EXHIBIT 10.15
CONTRACT
FOR
ENGINEERING, DESIGN, PROCUREMENT, CONSTRUCTION,
ERECTION AND START UP
OF A
KRAFT PULP MILL
BETWEEN
ZELLSTOFF STENDAL GMBH
AND
RWE INDUSTRIE-LOSUNGEN GMBH
TABLE OF CONTENTS
PAGE
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ART. 1 DEFINITIONS AND INTERPRETATION......................................................1
ART. 2 CONTRACT APPENDICES................................................................11
ART. 3 OBLIGATIONS OF THE CONTRACTOR-- NATURE AND EXTENT OF THE DELIVERY..................12
ART. 4 OBLIGATIONS OF THE OWNER...........................................................22
ART. 5 PARTIES' REPRESENTATIVES; INDEPENDENT ENGINEER.....................................25
ART. 6 QUALITY CONTROL....................................................................27
ART. 7 PRE-ACTIVITIES; UNFORESEEN SITE CONDITIONS.........................................32
ART. 8 TIME SCHEDULE......................................................................33
ART. 9 CONTRACT PRICE, PAYMENT TERMS AND ADJUSTMENTS TO CONTRACT PRICE....................40
ART. 10 ADVANCE PAYMENT, PERFORMANCE AND WARRANTY SECURITY.................................45
ART. 11 CHANGES IN LAW.....................................................................48
ART. 12 CHANGES............................................................................49
ART. 13 OWNERSHIP AND RISK OF LOSection....................................................54
ART. 14 INSURANCE..........................................................................59
ART. 15 WORK ENVIRONMENT RESPONSIBILITY....................................................62
ART. 16 MECHANICAL COMPLETION..............................................................64
ART. 17 TRAINING; COMMISSIONING, SYSTEM START-UP, START-UP AND SCHEDULE A TESTS............68
ART. 18 72-HOUR TEST AND ACCEPTANCE OF WORKS...............................................72
ART. 19 SCHEDULE B TESTS...................................................................77
ART. 20 DEFECTS LIABILITY..................................................................81
ART. 21 LIQUIDATED DAMAGES.................................................................87
ART. 22 INTELLECTUAL PROPERTY RIGHTS.......................................................89
ART. 23 SUSPENSION.........................................................................91
ART. 24 TERMINATION........................................................................93
ART. 25 CONTRACTORS' SUPPLIERS............................................................101
ART. 26 FORCE MAJEURE.....................................................................104
ART. 27 COPYRIGHT AND CONFIDENTIALITY.....................................................108
ART. 28 GOVERNING LAW; DISPUTES...........................................................112
ART. 29 INDEMNITY OBLIGATIONS.............................................................112
ART. 30 MISCELLANEOUS.....................................................................114
ART. 31 CONTRACT LANGUAGE.................................................................118
ART. 32 COMMENCEMENT DATE.................................................................118
ART. 33 ASSIGNMENT; TRANSFER..............................................................119
i
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CONTRACT AGREEMENT
OWNER CONTRACTOR
Zellstoff Stendal GmbH RWE Xxxxxxxxx-Xxxxxxxx XxxX
Xxxxxxxxxxxx Xxxx 0 Xxxxxxxxxx 85
X-00000 Xxxxxxxx X-00000 Xxxxxxxx
Tel. x00 00000 00000 Tel. x00 000 000 0000
Fax. x00 00000 00000 Fax. x00 000 000 0000
VAT No. 0000-000-00000 VAT No. DE 811187276
The following agreement has been concluded between the Contractor and the Owner.
RECITALS
A. The Owner wishes to build, own, operate and finance a softwood
kraft pulp mill with a capacity of 552,000 Adt/year and 1,700
Adt/day BSKP at Arneburg, Germany and wishes to appoint the
Contractor, upon the terms and subject to the conditions set out
herein on a lump-sum, fixed price, turnkey basis to perform the
Works. The Contractor wishes to undertake the Works to the
standards and in the manner set out herein.
B. The Owner and the Contractor have entered into this Contract
after extensive negotiations on the form and substance hereof and
each confirm that for such purpose the Contract could not in any
way be considered to be either Party's standard terms and
conditions.
C. Each Party has carefully considered and accepted the risks
allocated to it in this Contract. Accordingly, the Parties
consider that the terms and conditions hereof, including the
remuneration payable to the Contractor and the termination rights
set out in the Contract, are comprehensive and exclusive and
consider all relevant risks relating to the Works, whether
foreseeable or not.
ART.1 DEFINITIONS AND INTERPRETATION
SECTION 1.1. IN THIS CONTRACT, UNLESS THE CONTEXT OTHERWISE REQUIRES, THE
FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
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Acceptance Means the issuance or deemed issuance by the Owner
of the Acceptance Certificate.
Acceptance Certificate Means the certificate to be issued pursuant to
Article 18.
Acceptance Date Means the date upon which Acceptance has occurred.
Adt Means air dry metric tonnes.
Agent Means Bayerische Hypo- und Vereinsbank AG in its
capacity as agent under the Project Financing
Facility Agreement in relation to the Plant
entered into between, INTER ALIOS, the Owner and
Bayerische Hypo- und Vereinsbank AG, and any of
its subsequent successors and permitted
transferees and assigns.
Ancillary Facilities Means those ancillary facilities relating to the
Plant as more fully set forth in the
Specifications, including offices, utilities,
warehousing and shipping facilities.
Appendix Means an appendix to this Contract as described in
Article 2.
Banks Means the financial institutions and other
institutions that provide limited recourse
financing to the Owner for the construction,
testing and operation of the Plant.
BGB Means the German Civil Code.
Base Case As used in Sections 3.14, 4.5 and 19.3, means the
relevant line items in the "Key" and "Oper" sheets
in the so-called "base case" scenario (and the
assumptions relating thereto) attached hereto as
Appendix 4.
BSKP Means bleached softwood kraft pulp.
Business Day Means a Day that is not a Saturday, Sunday, or
Day which is recognized as a legal holiday at the
registered office of
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the Owner or the Contractor set forth above.
Change Means any change, amendment, modification,
addition or deletion to or in respect of the
Works.
Change in Law Has the meaning assigned to that term in
Article 11.
Change Order Means an order to effect a Change in the
Contractor's obligations and/or rights as a result
of changed circumstances in relation to the Works.
Commencement Date Means the date when all conditions specified in
Article 32 have been fulfilled or waived.
Commissioning Means, with respect to any System, the process of
testing all control functions of, and performing
water runs or equivalent tests on, such System
following Mechanical Completion of such System and
the process of making such System ready for
operation.
Confidential Information Means any documents, data or other information
furnished directly or indirectly to one Party by
the other Party or its affiliates or subsidiaries
or acquired from the performance of the Works, or
any other information concerning the technical and
business activities and know-how of the other
Party or its affiliates or subsidiaries, in each
case as and to the extent provided in Article 27,
whether such information has been furnished prior
to, during or following termination of the
Contract.
Contract Means this Contract entered into between the Owner
and the Contractor, together with the Appendices.
Contract Day Means the Day on which the Contract is signed by
both Parties.
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Contract Price Means the sum specified in Section 9.1, subject to
such additions and adjustments thereto or
deductions therefrom as may be made pursuant to
Section 9.8 or Article 12.
Contractor Means RWE Industrie-Losungen GmbH and its legal
successors or permitted assigns.
Contractor's Equipment Means machines, tools, apparatus, appliances or
things of every kind to be used by the Contractor
or any Contractor's Suppliers in or for the Works
or for the performance of any tests of the Works
or the Plant in accordance with the Contract, all
of which are to be provided by the Contractor, but
excludes any Materials or equipment intended to
form part of the Works.
Contractor's Personnel Means all personnel the Contractor uses in
execution of its obligations under the Contract.
Contractor's Representative Has the meaning assigned to that term in
Section 5.2.
Contractor's Supplier Means any supplier, agent or subcontractor of the
Contractor (including any Key Supplier) for the
execution of parts of the Works.
Day Means a calendar day of the Gregorian Calendar.
Defect Means:
(i) any error, omission or defect in the Works;
or
(ii) anything falling within the meaning of
"Xxxxxx" in Section 633 BGB.
Defects Liability Period Means the period during which the Contractor is
liable for Defects as set forth in Article 20.
Design Documentation Has the meaning assigned to that term in
Section 6.4.
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Detailed Program Means a program for the execution of the Works,
prepared in accordance with Section 8.7.
EPC Price Calculation Means the Project Cost Summary dated November 28,
2001, including the underlying detailed cost
estimate, of which both Parties have a copy.
Event of Force Majeure Has the meaning assigned to that term in
Section 26.1.
Excepted Risks Means the risks specified in Section 13.2 which
are not insurable and which are excepted from the
Contractor's responsibility for risk of loss.
HGB Means the German Commercial Code.
Independent Engineer Means the independent engineer appointed by the
Banks to provide consulting services in connection
with the Plant.
Interconnection Points Those places, to be agreed upon by the Owner and
the Contractor in accordance with Appendix 3,
Ex. 8 and identified in Appendix 3, Ex. 2.5,
drawing 000-0-0000, at which the Owner is required
to supply the temporary utilities specified in
Appendix 3, Ex. 4.2.
Key Suppliers Means suppliers of certain Systems identified in
Appendix 3, Ex. 10.
Laws Means applicable laws, orders, rules, ordinances,
regulations, by-laws, statutory orders, executive
orders and decrees, judicial decisions,
notifications or other similar directives having
the force of law, or legally binding instructions,
policy guidelines, codes or standards, in each
case adopted or issued by Relevant Authorities
(or, if applicable, by the European Union).
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Major Capital Spares Means certain spare parts to be supplied by the
Contractor as specified in Appendix 3, Ex. 14.4.
Materials Means apparatus, materials, articles and things of
all kinds to be provided and incorporated in the
Works by the Contractor, but does not include
Contractor's Equipment.
Mechanical Completion Means, with respect to a System, a Non-System
Department or the Works, as the case may be, the
issuance or deemed issuance by the Owner of the
Mechanical Completion Certificate pursuant to
Article 16.
Mechanical Completion Date Means the date on which Mechanical Completion of a
System, a Non-System Department or the Works, as
the case may be, occurs.
Mechanical Completion Tests Means the tests described in Article 16.
Milestone Means an element of the Works identified in
Appendix 3, Ex. 20 and in the Detailed Program the
timely achievement of which is relevant to the
timely completion of the Works.
Milestone Date Means the targeted date for each Milestone set
forth in Appendix 3, Ex. 20.
Minimum Performance Means the minimum performance levels that must be
Requirements achieved for Acceptance or to satisfy the Schedule
B Tests, as set forth in Appendix 3, Ex. 12.4 or
12.6, as applicable, and referred to therein
(after giving effect to the last paragraph under
"Scope of Work of Contractor" in Appendix 3, Ex.
1.1.) as "absolute requirements," "absolutely
required" or "make good."
Month Means a calendar month.
Non-System Department Means a Department listed in Appendix 3, Ex. 2.4
that is not included in a System.
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included in a System.
Operational Acceptance Means, with respect to a System or the Works, as
the case may be, the issuance or deemed issuance
by the Owner of the Certificate of Operational
Acceptance pursuant to Article 17.
Owner Means Zellstoff Stendal GmbH and its legal
successors or permitted assigns.
Owner's Representative Has the meaning assigned to that term in
Section 5.1.
Owner's Scope Means those works and services required to be
undertaken by the Owner as set forth in Article 4
and Appendix 3, Ex. 4.
Party Means the Owner or the Contractor.
Parties Means the Owner and the Contractor.
Payment Milestone Means the events or deliveries specified in
Appendix 2, Ex. 9, the completion of which shall
be the basis for payment under the Contract in the
respective percentages specified therein and in
accordance with the procedures set forth in
Article 9.
Performance Requirements Means the performance figures set forth in
Appendix 3, Ex. 12.4 to be achieved during the
Schedule B Tests.
Permits Means permits or applications therefor, consents,
approvals and licenses from Relevant Authorities.
Plant Means the whole and, where the context requires,
part of the kraft pulp mill with a net capacity of
1,700 Adt/d BSKP and 552,000 Adt/year,
respectively, the water intake and output
facilities, all interconnection facilities to
utilities, transportation and storage facilities,
the Ancillary Facilities and all related
infrastructure and activities related thereto, to
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be constructed at the Site, a summary description
of which is set forth in Appendix 3, Ex. 1.2.
Pre-Activities Means certain activities to be undertaken by the
Contractor before the Commencement Date in
accordance with Article 7.
Pre-Activity Agreement Means the contract, in the form of Appendix 3, Ex.
22, executed by the Owner and the Contractor in
connection with the Pre-Activities.
Punch List Means a list of those items or parts of the Works
which the Contractor and the Owner agree are not
complete, but which are not material to the safe
operation of the Works and the Plant at levels
consistent with the net capacity requirements set
forth in Appendix 3, Ex. 1.2 and Ex. 2.1.
Relevant Authorities Means:
(a) the Federal Government and State Government
of Sachsen-Anhalt;
(b) any political sub-division of the Federal and
State Government and any local government
authority with jurisdiction over the Plant;
and
(c) any ministry, department, authority,
instrumentality or agency of the Federal and
State Government and/or any such political
sub-divisions, and their respective
successors and permitted assigns.
Schedule A Test(s) Means the test(s) described in Article 17 to be
performed in connection with the Start-up of
certain individual Systems, as specified in
Appendix 3, Ex. 12.1 and 12.2.
Schedule B Test(s) Means the test(s) described in Article 19 to
confirm the performance of certain individual
Systems, as specified in
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Appendix 3, Ex. 12.3 and 12.4.
Scheduled Acceptance Date Means the date set forth in Section 8.5 by which
the Contractor has agreed to achieve Acceptance,
as the same may be extended in accordance with
Section 8.9 and Article 12.
Scheduled Mechanical Means the date set forth in Section 8.2 by which
Completion Date the Contractor has agreed to achieve Mechanical
Completion of the Works, as the same may be
extended in accordance with Section 8.9 and
Article 12.
Security Agent Means Bayerische Hypo- und Vereinsbank AG in its
capacity as agent under the Project Financing
Facility Agreement in relation to the Plant
entered into between, INTER ALIOS, the Owner and
Bayerische Hypo- und Vereinsbank AG, and any of
its subsequent successors and permitted
transferees and assigns.
Selected Subcontract Means any contract entered into between the
Contractor and a Selected Supplier in relation to
the Works.
Selected Supplier Means Metso Paper, Xxxxxxx-Xxxxxxxx Corporation,
Kvaerner Chemetics AB, FFE Minerals Denmark A/S,
AE Energietechnik GmbH, MAN Turbomaschinen AG,
PURAC GmbH (in a joint venture with Lurgi Bamag
GmbH), LINDE-KCA-Dresden GmbH, Hochtief
Construction AG and PI-Consulting OYJ.
72-Hour Test Means the 72-hour test run to demonstrate
fulfillment of the Minimum Performance
Requirements as set forth in Article 18 and
Appendix 3, Ex. 12.5 and 12.6.
Site Means the Owner's site at Arneburg/Sachsen-Anhalt
in Germany upon which the Plant is to be
installed, including
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the water intake/outlet site(s) and
interconnecting land all as shown in Appendix 3,
Ex. 6.
Specifications Means the complete technical specifications for
the Works contained in Appendix 3, Ex. 6 and Ex.
7.
Start-up Means cooking of chips using liquor has started in
at least four (4) digesters sequentially.
Start-up Period Means the period from Start-up to the Acceptance
Date.
System Means each of the Plant systems specified in
Appendix 3, Ex. 1.1 and Ex. 6.
System Start-up Means operation of any System with the respective
media/raw material or, with respect to any System
that does not require media or raw material,
operation of such System for its intended purpose.
Time Schedule Means the detailed schedule for carrying out the
Works as established in accordance with Article 8.
Warranties Means the warranties given by the Contractor to
the Owner in respect of the Works as set out in
Article 20.
Week Means a period of seven (7) consecutive Days.
Works Means all or part of the works (including
Materials, supplies, machinery, equipment, tools,
buildings, roads, ways, Major Capital Spares,
and/or other items of whatever nature (excluding
the Contractor's Equipment), documents or services
to be planned, designed, engineered, manufactured,
procured, constructed, erected, installed,
commissioned, tested, completed, carried out,
undertaken or done by the Contractor in accordance
with the Contract (including any part of the Works
performed prior to the Contract Day and all
Pre-Activities to be performed by the
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Contractor pursuant to the Pre-Activity
Agreement), for the provision of a fully operating
Plant (but excluding the Owner's Scope) as
described in more detail, but without limitation,
in the exhibits contained in Appendix 3, including
Ex. 3.
SECTION 1.2. INTERPRETATION
In this Contract:
1.2.1. words importing the singular shall include the plural and vice
versa except where the context otherwise requires;
1.2.2. references to the word "INCLUDE" or "INCLUDING" are to be
construed without limitation; and
1.2.3. an "AFFILIATE" of a person shall be construed as a reference to a
subsidiary or holding company, or a subsidiary of a holding
company of such person.
SECTION 1.3. HEADINGS AND TITLES
The headings and references thereto in the Contract are included
for ease of reference and shall not affect the interpretation of
the Contract.
SECTION 1.4. OWNER ASSISTANCE
Any obligation imposed on the Owner pursuant to the terms of the Contract to
assist, or to use its best efforts to assist, the Contractor shall not be
construed as any obligation on the Owner to do anything in breach of Laws.
ART. 2 CONTRACT APPENDICES The following appendices form part of this
Contract:
Appendix
1: Direct Agreement
2: Commercial - Comprising Exhibits
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3: Technical - Comprising Exhibits
4: Base Case
The text of the Articles of the Contract and the
Appendices are intended to supplement each other.
In case of incongruity between the text of the
Articles of the Contract and any of the
Appendices, the text of the Articles of the
Contract shall take precedence.
ART. 3 OBLIGATIONS OF THE CONTRACTOR -- NATURE AND EXTENT OF THE
DELIVERY CONTRACTOR'S GENERAL OBLIGATIONS
SECTION 3.1. Subject to the terms and conditions of this Contract, the
Contractor agrees to plan, design, engineer, procure, deliver,
construct, erect, install, start up and test the Works.
SECTION 3.2. The works and services to be performed by the Contractor shall
include the following:
(a) all planning, design, engineering, manufacture,
procurement, delivery to the Site and erection or
installation of all equipment, systems, components and
Materials (including the first fill of oils for machinery
and ion exchange resin for the feedwater treatment plant,
one set of cutter knives, one set of xxxxx and wires, and
Major Capital Spares) needed to provide, commission, test,
and put into operation the Works, to achieve Acceptance by
the Scheduled Acceptance Date and to carry out the
Schedule B Tests, all in accordance with the Contract;
(b) the performance of, and completion of the Works in
accordance with, appropriate detailed design, engineering
and construction methods and techniques in accordance with
the Contract, the Specifications, all Laws and Permits
(including the Permit requirements and any environmental
remediation required based on the Environmental
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Impact Assessment Report (UMWELTVERTRAGLICHKEITSSTUDIE)
dated September 18, 2001 related to the Works and the
permit values contained in the Permits or applications for
Permits (or amendments to Permits) listed in items 1-6 of
Appendix 3, Ex. 4.4) and recognized rules of sound
engineering practice.
(c) the scheduling, execution and completion of the Works in
accordance with the Detailed Program established pursuant
to Section 8.7;
(d) the application for and obtaining of all Permits
(including the updated emissions Permit for which an
application has been filed and any necessary amendments or
modifications to Permits obtained by the Contractor, but
excluding those Permits to be obtained by the Owner
pursuant to Section 4.6) in good time so as not to delay
the execution and completion of the Works and the timely
initiation and diligent execution of other measures
necessary for the granting of the Permits;
(e) the timely submission of all data, information and
documentation that the Owner may reasonably request,
including the provision of such information and assistance
to enable the Owner to apply for and obtain the Permits
specified in Section 4.6 as set forth in Appendix 3,
Ex. 4.4; and
(f) the provision of complete documentation, including
operation and maintenance manuals in accordance with
Appendix 3, Ex. 3.2 and "as built" drawings in accordance
with Appendix 3, Ex. 3.2.2.1 and Ex. 19.
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SECTION 3.3. THE CONTRACTOR SHALL:
(a) at all times exercise (and has exercised) the skill, care
and diligence in the carrying out and completion of the
Works of a reasonable and prudent contractor, fully
skilled and experienced in the carrying out of work
similar to the Works, and has and will have the resources,
experience, qualifications and capabilities as are
required to fully perform its obligations under the
Contract;
(b) ensure that all Materials, equipment and workmanship shall
be of first-class quality, and all equipment, machinery
and Materials installed in the Works shall be new and
conform to the Specifications. With respect to Materials,
equipment and machinery for which a standard is not
prescribed in the Specifications or elsewhere in the
Contract, such Materials, equipment and components shall
conform to quality levels of leading European pulp xxxxx
and shall not be of a type generally recognized in the
industry as Material, equipment or components to be
avoided or unsuitable (including due to susceptibility to
erosion or corrosion) for the application in which they
are to be used;
(c) carry out (and has carried out) the Works as a reasonable
and prudent contractor to ensure the safe operation of the
Works and Plant at levels consistent with the net capacity
requirements set forth in Appendix 3, Ex. 1.2 and Ex.2.1;
(d) carry out (and has carried out) the Works so as to comply
with the Performance Requirements and the Warranties;
(e) liase with the Owner regarding the management of the Works
and the coordination of the Owner's Scope with the Works,
all as further defined in the Contract.
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SETTING OUT
SECTION 3.4. The Contractor shall be responsible for accurate setting out of
the Works on the Site and for the correctness of the positions,
levels, dimensions and alignment of all parts of the Works and
for the provision of all necessary instruments, appliances and
labor in connection therewith. The Contractor shall carefully
protect and preserve all benchmarks, sight-rails, pegs and other
things used in setting out the Works and shall replace the same
should they become lost, damaged or destroyed in any way.
The Contractor shall provide such information as the Owner shall
reasonably require in relation to the setting out of the Works.
If, at any time during the carrying out and execution of the
Works, any errors which would affect the Works appear in the
positions, levels, dimensions or alignment of the Works, the
Contractor shall rectify the error at its own cost.
SECTION 3.5. HAZARDOUS SUBSTANCES, MAN-MADE MATERIALS AND ARCHAEOLOGICAL
FINDINGS
Upon the discovery of any hazardous or toxic substances, man-made
materials or fossil, coin, article of value or antiquity or any
other thing of archaeological interest, the Contractor shall
promptly:
(i) notify the Owner of such conditions;
(ii) provide the Owner in a timely manner with any information
or documentation required by the Owner to enable the Owner
to make any necessary application to any Relevant
Authority and comply with any requirements of such
Relevant Authority; and
(iii) use best efforts to mitigate the effects of any such
discovery on the performance of the Works (which efforts
shall be at the expense of the Contractor).
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Any fossils, coins, objects of value, antiques or objects of
geological or archaeological value discovered at the Site shall
in no case be the property of the Contractor and shall be handed
over to the Owner. The Contractor shall take appropriate
precautionary measures and prevent its agents and employees or
the agents and employees of any Contractor's Suppliers from
misappropriating or damaging any such objects.
The Contractor shall be responsible for all costs and expenses
associated with any hazardous substances or man-made materials
which may be brought onto the Site, or released or deposited at
the Site by the Contractor, any Contractor's Supplier or their
respective affiliates, directors, officers, employees or agents
or otherwise.
OPPORTUNITIES FOR OTHER CONTRACTORS
SECTION 3.6. The Contractor recognizes that certain other persons including
the Owner will, during the carrying out of the Works, require
access to and use of parts of the Site to carry out works and
services in connection with or to construct, install, operate and
maintain parts of the Plant. The Contractor shall not object to
such access, use and works and shall in accordance with the
requirements of the Owner afford all reasonable opportunities to
such persons for carrying out their work and services and to the
Owner and/or the Independent Engineer for inspecting their work
and services, provided that such access, use, works or services
does not unduly interfere with the Works or the Time Schedule. In
the event and to the extent that such undue interference in
connection with such access, use, works or services cannot be
avoided and causes delay or additional expense to the Contractor,
the Time Schedule and, if necessary, the Contract Price shall be
adjusted accordingly pursuant to Sections 8.9 and 9.8,
respectively.
Contract Page 17(19)
LIAISON WITH THIRD PARTIES
SECTION 3.7. The Owner shall be responsible for coordination and liaison with
the Independent Engineer. The Contractor shall fully cooperate
with the Owner and the Independent Engineer in all matters
relating to the timely completion of the Plant and all works in
relation to it for which the Contractor is not responsible and
shall provide such information, attend such meetings and perform
such work as is required by the Contract or is reasonably
requested by the Owner for such purposes.
TRAINING
SECTION 3.8. The Contractor shall provide full and comprehensive training in
the German language for the Owner's personnel in accordance with
Appendix 3, Ex. 3.5 to enable such personnel to assume operating
control of the Plant upon Acceptance and operate the Plant
thereafter as a reasonable and prudent operator in accordance
with the operation and maintenance manuals and the manufacturers'
instructions and guidelines.
CLEARANCE OF SITE
SECTION 3.9. The Contractor shall keep the Site and adjacent land clean, free
and clear of all waste, rubble and hazardous substances and in a
workmanlike condition during the term of the Contract. Prior to
Mechanical Completion of each System, the Contractor shall clear
away, remove from that System and (if applicable) dispose of in
accordance with applicable Laws and Permits all Contractor's
Equipment, surplus materials, rubbish and temporary works of
every kind and leave the whole of that System clean, free and
clear of all waste, rubble and hazardous substances and in a
workmanlike condition all to the Owner's reasonable satisfaction.
Prior to Acceptance, the Contractor shall clear away and remove
from the Site and (if applicable) dispose of in accordance with
applicable Laws and Permits all Contractor's Equipment, surplus
materials, rubbish and temporary
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works of every kind related to the Works and leave the whole of
the Site clean, free and clear of all waste, rubble and hazardous
substances and in a workmanlike condition all to the Owner's
reasonable satisfaction.
The Owner may require that any pre-existing buildings, structures
and other facilities not be cleared or removed by the Contractor
under this Section.
UTILITIES
SECTION 3.10. The Contractor shall be responsible for the distribution within
the Site, as may be required for the performance of the Works in
accordance with this Contract, of all temporary utilities
provided by the Owner pursuant to Section 4.2 or necessary for
the Contractor to perform the Works. The Contractor shall, at its
risk and cost, provide any apparatus necessary for the
connections at the Interconnection Points and its use of such
utilities within the Site.
CONTRACTOR'S ADDITIONAL OBLIGATIONS
SECTION 3.11. The Contractor shall, unless specifically excluded in the
Contract, perform all such work and/or supply all such items and
materials (including any spare parts that the Owner is not
specifically required to provide pursuant to Section 4.5 when and
as the same may become necessary for replacement of parts of the
Works), even though not specifically mentioned in the Contract,
as are required within the battery limits specified in
Appendix 3, Ex. 8 for the completion, testing, functioning and
operation of the Plant including attaining Minimum Performance
Requirements and Acceptance of the Works, remedying any failures
to achieve the Performance Requirements and remedying any Defects
until the expiry of the Defects Liability Period as if such work
and/or items and materials were expressly mentioned in the
Contract.
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OWNER INFORMATION
SECTION 3.12. The Owner's provision of information and/or data in accordance
with this Contract, and the Owner's participation in the
selection of Key Suppliers and equipment in accordance with
Section 25.2 and in quality control as provided in Article 6 and
any act or omission by the Owner or the Independent Engineer,
shall not relieve the Contractor from any obligations under this
Contract. The Contractor shall independently verify all
documents, drawings, plans and data relating to the Works,
whether or not supplied by the Owner, and any flaws therein shall
not be partly or wholly attributed to the Owner as comparative
negligence under Section 254 BGB.
TITLE TO WORKS
SECTION 3.13. The Contractor shall provide to the Owner good title to the Works
and all equipment and Materials contained therein (as further
provided in Section 13.1), and Intellectual Property Rights
relating thereto, free of all liens, security interests,
encumbrances or any other rights of third parties.
The Contractor shall release the Owner from any liabilities
toward employees of the Contractor and SOZIALKASSEN (social
funds) pursuant to Section 1a ARBEITNEHMER-ENTSENDEGESETZ (Act
Concerning the Secondment of Employees), including liabilities
for making such payments imposed on any Contractor's Supplier or
hiring agent appointed by the Contractor or any Contractor's
Supplier.
CONTRACTOR'S RISK; OPERATION PRIOR TO ACCEPTANCE
SECTION 3.14. Prior to Acceptance, the Contractor shall have sole
responsibility for the Works and, subject to the second paragraph
of Section 13.2, operation of the Plant. Following Mechanical
Completion, the Contractor shall instruct, supervise and carry
out, using the Owner's personnel, Commissioning, System Start-up,
Start-up and testing of the Plant including Schedule A Tests,
72-Hour Test and Schedule B Tests, all as set forth in the
Contract.
Contract Page 20(22)
In carrying out the Start-up and testing of the Plant, the
Contractor shall use its best efforts (subject to compliance with
Laws) to have the Plant meet or exceed the production projected
in the Base Case for the period from Start-up until Acceptance.
The Contractor shall provide until Acceptance any wear and tear
parts that are required in excess of the amounts which are normal
(having regard to the experience of European pulp xxxxx during
normal operation) for such wear and tear parts in a Plant of this
type during the period from Commissioning until Acceptance. The
Contractor shall also provide until expiry of the Defects
Liability Period all necessary qualified personnel to promptly
respond to and deal with any correction, replacement or
rebuilding of Defects which may become apparent in the Works
during such period.
PERMITS
SECTION 3.15. The Contractor (directly or through the Contractor's Suppliers),
shall acquire and pay for all Permits which are necessary for the
performance of the Contract, including in relation to the
start-up, testing and operation of the Plant, in a timely manner
so as not to delay the execution and completion of the Works,
provided that the Contractor shall not be responsible for
obtaining those Permits to be obtained by the Owner as specified
in Appendix 3, Exhibit 4.4. The Contractor shall comply with all
Permit conditions and requirements (including the Permit
requirements and any environmental remediation required based on
the Environmental Impact Assessment Report
(UMWELTVERTRAGLICHKEITSSTUDIE) dated September 18, 2001) related
to the Works and the permit values contained in the Permits or
applications for Permits (or amendments to Permits) listed in
items 1-6 of Appendix 3, Ex. 4.4 and, if necessary, obtain such
amendments or modifications to such Permits as may be required by
Law and make any modifications to the Works in accordance with
Article 12 as may be required in order to comply with such
Permits and/or any modifications thereto; provided that, if such
amendments
Contract Page 21(23)
or modifications are required as a result of a Change in Law, the
provisions of Article 11 shall apply. The Contractor shall also
ensure that all Contractor's Suppliers have all Permits necessary
for the performance of their contracts.
The Contractor shall use its best efforts to assist the Owner
free of charge in obtaining in a timely and expeditious manner
the Permits to be obtained by the Owner as specified in Appendix
3, Exhibit 4.4.
CONTRACTOR'S INVESTIGATIONS
SECTION 3.16. The Contractor confirms that, prior to the Commencement Date, it
will have informed itself about all circumstances relevant to
fulfill this Contract. The Contractor shall not thereafter make
any claim on the basis of insufficient knowledge.
CONTROL MEASURES
SECTION 3.17. All control measures required by the Relevant Authorities,
including X-ray tests, pressure testing, and examination of
calculations and drawings, shall be attended to and paid for by
the Contractor, who shall submit all relevant certificates and
reports to the Relevant Authorities and to the Owner and the
Independent Engineer without delay and in any event no later than
two (2) Weeks before System Start up (or, if not applicable until
later, two (2) Weeks before the date they are due).
FINANCING
SECTION 3.18. The Contractor shall provide to the Owner free of charge such
information and assistance as the Owner may reasonably request in
connection with the financing of the Plant and the Contractor
shall enter into a direct agreement with the Banks in the form
attached as Appendix 1.
Contract Page 22(24)
ART. 4 OBLIGATIONS OF THE OWNER
OWNER INFORMATION
SECTION 4.1. The Owner shall provide to the Contractor the information and
data described in Appendix 3, Ex. 4.7. The Owner's provision of
such information and data shall not relieve the Contractor from
its obligations under this Contract. The Contractor shall
independently verify the accuracy of all such information and
data provided by the Owner. If the Contractor notifies the Owner
of any inconsistencies or errors in such information or data the
Owner shall, if it agrees with the Contractor, correct such
information or data within fifteen (15) Days from the Owner's
receipt of notice from the Contractor. In the event that the
Owner fails to make the agreed corrections, or if the Owner and
the Contractor cannot reach agreement on such information or
data, the Contractor shall be entitled to proceed on the basis of
the information and data that were agreed or which it considers
to be correct, respectively. The Contractor shall remain
responsible for such information and data and in no event shall
the Owner's failure to act entitle the Contractor to any relief
from its obligations under this Contract, including any
adjustment to the Contract Price or the Time Schedule.
SITE
SECTION 4.2. The Owner shall be responsible for acquiring legal and physical
possession of the Site and providing the Contractor with access
thereto. The Owner shall also provide at its cost, at the
Interconnection Points as set forth in Appendix 3, Ex. 2.5,
temporary utilities as specified in Appendix 3, Ex. 4.2.
OWNER'S SCOPE
SECTION 4.3. The Owner shall provide the equipment, Materials and services
specified in Appendix 3, Ex. 4 and Ex. 6, Depts. 820 and 830. The
Owner shall arrange for the clearance and removal from the Site
of the buildings and other items described in Appendix 3, Ex. 4.3
under "Permanent Demolition Services" in a
Contract Page 23(25)
manner that will not result in interference with the Works. The
Owner shall have no obligations other than as expressly included
in the Owner's Scope. The Owner's Scope shall be provided and
performed in accordance with the Time Schedule as set forth in
the Detailed Program and shall be of the quality stipulated in
Appendix 3, Ex. 4. The Contractor shall notify the Owner of any
act, omission, event or delay of which it becomes aware that may
affect the Owner's obligations in respect of the Owner's Scope
and shall not act or omit to act in such a manner that would
prejudice the Owner's obligations hereunder. The Contractor shall
also notify the Owner promptly of any failure by the Owner to
perform the Owner's Scope of which it becomes aware and that may
give rise to any extension of time pursuant to Section 8.9 or any
increase in the Contract Price pursuant to Section 9.8. In such
event, the Owner may, among other options to avoid or minimize
any such delay or increase in the Contract Price, request the
Contractor to undertake the performance of such item(s) of the
Owner's Scope. Any such request by the Owner shall be handled as
a Change in accordance with Article 12.
SECTION 4.4. The Owner shall provide at the Site, upon Mechanical Completion
of a System the operating personnel, raw material (furnish),
consumables, wear and tear parts and other items, in each case as
set forth in Appendix 3, Ex. 4 and Ex. 14 (but in the case of
wear and tear parts limited to the amounts which are normal
(having regard to the experience of European pulp xxxxx during
normal operation) for such parts in a Plant of this type during
the period from Commissioning until Acceptance). The Owner shall
have no obligation to provide anything not specified in such
Appendix (or, in the case of wear and tear parts specified in
Appendix 3, Ex. 14.3, in excess of the amounts which are normal
for such parts in a Plant of this type during the period from
Commissioning until Acceptance), which shall be the obligation of
the Contractor.
Contract Page 24(26)
SPARE PARTS
SECTION 4.5. The Owner shall provide, within the budgeted amount of Seven
Million Five Hundred Thousand Euros ((euro)7,500,000), at
Mechanical Completion of a System, the inventory of spare parts,
other than Major Capital Spares, relating to that System as set
forth in Appendix 3, Ex. 4.5, Ex. 14.1 and 14.2.
Prior to Acceptance, the Contractor shall be entitled to use the
spare parts and wear and tear parts provided by the Owner, as
well as the Major Capital Spares, in connection with the
fulfilment of its contractual obligations, including performance
of tests required by this Contact. After Acceptance and prior to
the end of the Defects Liability Period, the Contractor shall be
entitled to use the spare parts, as well as the Major Capital
Spares, in connection with the fulfillment of its contractual
obligations, including performance of tests required by this
Contract. In each case, the Contractor shall replace any spare
parts (including Major Capital Spares) so used, and any wear and
tear parts used prior to Acceptance in excess of the amounts
which are normal (having regard to the experience of European
pulp xxxxx during normal operation) for such parts in a Plant of
this type during the period from Commissioning until Acceptance,
forthwith at its own cost. If the Contractor fails so to replace
any spare parts (including Major Capital Spares) or any such
excess wear and tear parts used by it, the Owner shall be
entitled to withhold, or draw on any performance security issued
on behalf of the Contractor, for an amount equal to the cost of
replacing and if necessary installing such spare parts (including
Major Capital Spares) and excess wear and tear parts.
PERMITS TO BE OBTAINED BY THE OWNER
SECTION 4.6. The Owner shall acquire and pay for the Permits specified in
Appendix 3 Ex. 4.4 upon receipt from the Contractor, in the case
of Permits relating to the Works, of all necessary documentation
required for any such Permits. Notwithstanding the foregoing, it
shall be the Contractor's responsibility to
Contract Page 25(27)
monitor the progress of all Permit applications and to coordinate
all its activities to ensure that all Permits are obtained in a
timely manner. The Owner shall comply with all Permit conditions
and requirements relevant to its provision of the Owner's Scope.
SECTION 4.7. If requested by Contractor, the Owner shall, at its own cost, use
its best efforts to assist the Contractor in obtaining the
Permits to be obtained by the Contractor or any Contractor's
Supplier, including providing all technical information relating
to items within the Owner's Scope that is necessary to prepare
the Permit applications.
TRANSFER OF CONTROL OF PLANT
SECTION 4.8. The Owner shall assume responsibility for the operation of the
Plant upon Acceptance (other than in connection with the Schedule
B Tests, the performance of which shall be the responsibility of
the Contractor with respect to the affected Systems).
ART. 5 PARTIES' REPRESENTATIVES; INDEPENDENT ENGINEER
OWNER'S SITE REPRESENTATIVE AND CONTRACTOR'S SITE REPRESENTATIVE
SECTION 5.1. The Owner shall appoint within seven (7) Days from the Contract
Day a person to act as the Owner's Representative at the Site
with whom the Contractor may consult whenever necessary. The
Owner shall, from time to time, be entitled to replace such
person and notify the Contractor of the new Owner's
Representative. The Owner's Representative shall have the
authority to make decisions which are binding on the Owner in
regard to technical and commercial matters relating to
performance of activities at the Site and also to receive
proposals and recommendations from the Contractor concerning the
Plant in other respects.
SECTION 5.2. The Contractor shall appoint within seven (7) Days from the
Contract Day a person to act as the Contractor's Representative
at the Site with whom the
Contract Page 26(28)
Owner may consult whenever necessary. The Contractor shall, from
time to time, be entitled to replace such person and notify the
Owner of the new Contractor's Representative. In addition, the
Contractor shall, upon reasonable request by the Owner based on
the substantive reasons set forth in such request, replace the
Contractor's Representative with a new Contractor's
Representative who shall be reasonably satisfactory to the Owner.
The Contractor's Representative shall have the authority to make
decisions which are binding on the Contractor in regard to
technical and commercial matters relating to performance of
activities at the Site and also to receive proposals and
recommendations from the Owner concerning the Works in other
respects.
SECTION 5.3. All decisions by the Owner's Representative and/or the
Contractor's Representative shall be documented in the Site log
book or otherwise as appropriate. Neither the Contractor's
Representative nor the Owner's Representative shall be authorized
to change any provision of the Contract, approve any Change or
agree on any item or matter which would affect the Time Schedule
or Contract Price (except as specifically authorized in a notice
provided pursuant to the following sentence), and no decisions by
either or both of the two Representatives shall be the basis for
any such changes. At or prior to the Commencement Date, each
Party shall designate by notice to the other one or more
individuals who are authorized to approve Changes or agree on
items or matters which would affect the Time Schedule or Contract
Price (including any limits on their authorizations to specific
items). A Party may change such designations from time to time by
notice to the other, provided that all approvals and agreements
that were issued by authorized individuals prior to notice of
such change shall remain valid.
INDEPENDENT ENGINEER
SECTION 5.4. The Parties acknowledge that prior to the Commencement Date the
Banks shall appoint an Independent Engineer. The Contractor shall
afford the
Contract Page 27(29)
Independent Engineer unimpeded access to the Site and all
documentation, and records associated with the Works and fully
cooperate with the Independent Engineer as contemplated in the
Contract. No actions or omissions on the part of the Independent
Engineer or certificates or agreements given by the Independent
Engineer shall relieve the Contractor of its obligations in this
Contract.
ART. 6 QUALITY CONTROL
INSPECTION AND TESTING
SECTION 6.1. The Owner's representatives and the Independent Engineer shall be
entitled to inspect and witness any tests in connection with the
engineering, purchase, manufacture, construction and erection of
each part of the Works and the Plant to ensure that the
Contractor is performing its obligations in accordance with, and
the Works conform with the requirements of, this Contract.
The Contractor shall adopt the necessary measures to rectify
Defects (including any nonconformity with the Specifications) and
failures to maintain the Time Schedule, that are found during its
inspections or tests or that are pointed out by the Owner. The
Contractor shall not be entitled to any adjustments in the
Contract Price or Time Schedule as a result of such measures,
except to extent provided in Section 8.9 or 9.8.
SECTION 6.2. The Contractor shall ensure that the Owner and Independent
Engineer have free access during normal working hours and upon
reasonable advance notice to workplaces (including those of
Contractor's Suppliers) where constituent parts of the Works are
designed, engineered, planned, manufactured, assembled or tested
so that the Owner and the Independent Engineer can inspect and be
present at tests of the Works. In addition the Owner and the
Owner's designated consultants and representatives shall have the
right to request reasonable additional testing of the Works
during manufacture, fabrication and construction to verify
conformance with the Specifications. In the event that such
request is based on findings of defects
Contract Page 28(30)
in similar Materials, equipment or Systems or in the event that
such testing identifies a Defect, the costs of such additional
testing shall be for the account of the Contractor and shall not
result in any increase in the Contract Price or extension of the
Time Schedule. If the request is not based on such findings and
does not identify a Defect, and provided that the Contractor had
before such additional tests provided written notice of the
increase in costs or delay in the Works that would result from
such additional tests and a reasonable explanation why such
additional tests were unnecessary or could otherwise be avoided,
all such costs shall be for the account of the Owner and the
Contract Price or Time Schedule shall be adjusted accordingly
pursuant to Section 9.8 or 8.9, respectively.
In the event that any portion of the Works at the Site will no
longer be visible or accessible by the time of Acceptance, the
Contractor shall notify the Owner and the Independent Engineer
once such portion is completed and give them an opportunity to
test and inspect such part of the Works. In the event the Owner
requires additional testing, the Owner shall advise the
Contractor of such requirements within a reasonable time prior to
the Contractor's scheduled testing. All additional inspection,
examination and testing required by the Owner shall to the extent
possible be carried out in conjunction with the Contractor's
similar activities and, if not, upon prior consultation with the
Contractor and in such a manner as to avoid any unnecessary delay
or interference in the performance of the Works.
SECTION 6.3. The Contractor shall give the Owner and the Independent Engineer
reasonable advance notice of any tests together with details of
the times and locations of such tests. Tests shall be conducted
in accordance with applicable provisions of the Specifications.
In the event that the Owner and/or the Independent Engineer are
not present the Contractor may proceed with the testing. The
Contractor shall provide to the Owner and the Independent
Engineer the test protocols, test certificates and any associated
reports and results upon completion of the relevant tests.
Contractor shall
Contract Page 29(31)
also furnish the Owner and the Owner's designated consultants and
representatives with access to records of all performance
inspections, tests and examinations undertaken by Contractor
and/or Contractor's Suppliers.
The Owner and its designated consultants and representatives
shall have the right to reject any portion of the Works which is
defective, deficient, not within Specifications or the standards
described in Section 3.3(b) or otherwise of inferior quality or
faulty workmanship (including upon inspection or reinspection
upon arrival at the Site of Materials or equipment provided by
Contractor's Suppliers) and require its repair or replacement by
written notification to Contractor specifying the reasons for
such rejection. All rejected and other workmanship that is
defective, not within Specifications or the standards described
in Section 3.3(b) or otherwise of inferior quality or faulty
workmanship shall be repaired so as to satisfy the Contractor's
Warranties and otherwise comply with the provisions of Article
20. Rejected and other defective Materials or equipment shall be
repaired or replaced with proper Materials or equipment. The
costs associated with such repairs and replacements shall be for
the account of Contractor and not reimbursable. In no event shall
such rejection, repair or replacement result in any extension of
the Time Schedule or increase in the Contract Price. After
completion of the necessary repairs or replacements the relevant
Materials and equipment shall be subject to further inspection,
examination and testing, all the expenses of which shall be for
Contractor's account.
Should the Owner consider it necessary or advisable at any time
before Acceptance to make an examination of Work already
completed, by removing or tearing out same, Contractor shall
consult with the Owner and take reasonable steps to follow up
with the appropriate Contractor's Supplier regarding the
necessity for such action. On request by the Owner, the
Contractor shall promptly furnish all necessary facilities, labor
and material for effecting the requested examination; provided,
however, that the Owner may require removing or tearing out Work
already completed only in
Contract Page 30(32)
circumstances where it has reasonable grounds to believe that
Defects exist in the Works that would not have been identified by
any tests previously conducted by the Contractor. All costs of
removing and tearing out any completed work and the costs
associated with its satisfactory reconstruction in accordance
with this Contract (including charges for services rendered in
connection therewith) shall be for the account of Contractor and
not reimbursable, except in the event that such removal or
tearing out does not uncover a Defect and the Contractor had
before such removal or tearing out provided written notice of the
increase in costs or delay in the Works that would result from
such removal or tearing out and reasonable evidence from the
relevant Contractor's Supplier or otherwise (including by
reference to tests previously conducted by the Contractor) as to
why such removal or tearing out was unnecessary or could be
otherwise avoided, in which case all such costs shall be for the
account of the Owner and the Contract Price or Time Schedule
shall be adjusted accordingly pursuant to Section 9.8 or 8.9,
respectively.
Contractor shall furnish at each location where inspection,
examination and testing is carried out all reasonable facilities,
assistance, labor, equipment, materials, utilities, apparatus and
instruments necessary for the safe and standard inspection and
testing of material and workmanship that may be required pursuant
to this Contract (in each case, other than any items comprising
part of the Owner's Scope).
The right of inspection, examination and testing by the Owner,
its designated consultants and representatives provided herein is
intended solely for the Owner's benefit, it being understood that
no exercise of or failure to exercise such right shall relieve
the Contractor of any of its obligations hereunder or prejudice
any of the Owner's rights under this Contract.
Contract Page 31(33)
DESIGN
SECTION 6.4. All working drawings, specifications, flow sheets and other
designs prepared by the Contractor or Contractor's Supplier
("Design Documentation"), test certificates, records of failed
tests, detailed time schedules, minutes of construction meetings
and any other documentation that is relevant to the activities at
the Site or operation of the Plant shall be made available at the
Site for review by the Owner and the Independent Engineer (with
all other working drawings, specifications, flow sheets and other
designs being available for review at the offices or shop of the
Contractor or the relevant Contractor's Supplier), other than
proprietary manufacturer's drawings.
The Owner and the Independent Engineer shall have the right upon
giving reasonable prior notice to the Contractor at all
reasonable times to inspect, at the Site or at the premises of
the Contractor and the premises of the Contractor's Suppliers,
all the Contractor's and Contractor's Suppliers' drawings,
documents and other material relating to the Works.
SECTION 6.5. The Contractor shall, either directly or through the Contractor's
Suppliers, provide to the Owner, in accordance with this
Contract, complete documentation relating to the Works. The
Contractor shall submit to the Owner for approval and make
available to the Independent Engineer at the Site for review the
drawings and specifications indicated in Appendix 3 Ex. 3.2.2.1,
which shall be examined by the Owner as soon as possible. The
Contractor shall be notified in writing by the Owner of approval
or any remarks and observations (including remarks or
observations provided to the Owner by the Independent Engineer)
within seven (7) Days from the date on which the documents were
actually received by the Owner. The Contractor shall modify and
re-submit the Design Documentation to reflect the comments made
by the Owner. If such notification has not been communicated to
the Contractor within such period, the respective approval shall
be deemed as having been given upon the expiry of such seven (7)
Day period.
Contract Page 32(34)
Design Documentation approved by the Owner pursuant to Appendix
3, Ex. 3.2 shall not be departed from without resubmission to and
re-approval by the Owner in accordance with this Section 6.5.
SECTION 6.6. The fact that the Owner has approved drawings and specifications
and participated in the engineering, design (including
development of the Specifications and selection of Contractor's
Suppliers and equipment), planning, manufacture, construction and
erection process shall not relieve the Contractor of any of its
responsibilities under the Contract.
SECTION 6.7. Each Party shall bear its own costs incurred in connection with
the above activities.
ART. 7 PRE-ACTIVITIES; UNFORESEEN SITE CONDITIONS
PRE-ACTIVITIES
SECTION 7.1. In order to achieve the Time Schedule as set forth in Article 8,
the Contractor shall be given the opportunity to carry out prior
to the Commencement Date the Pre-Activities in accordance with
and subject to the Pre-Activity Agreement.
UNFORESEEN GROUND CONDITIONS
SECTION 7.2. The Contractor confirms that it has, prior to the date hereof,
inspected and studied the Site and its environs and has fully
satisfied itself as to all matters affecting the Site and its
environs. The Contractor has also made itself familiar with the
investigations that had been conducted in connection with the
initially intended use of the Site for the construction of a
nuclear power station, and the additional site investigations
that were conducted in the fall of 2001 in preparation for the
Works.
Section 7.3. The Contractor acknowledges that the Works shall be designed and
engineered for erection and installation at the Site and that it
has thoroughly investigated and satisfied itself as to all
general and local conditions at the
Contract Page 33(34)
Site and the waters adjacent thereto, including but not limited
to: river and land transportation and access to the Site,
including the availability and condition of roads; handling and
storage of materials; availability and quality of labor, water,
sand, rock and power; rainfall and other climatic conditions,
currents, soundings and ground water; topography, ground surface,
subsurface, seismic, shore and harbor conditions; the nature and
quantity of surface and subsurface materials or obstacles to be
encountered, and equipment, machinery and materials required by
the Contractor prior to and during performance of its obligations
hereunder. The Contractor acknowledges that all appropriate
allowances for the matters and conditions referred to in this
Section have been taken into account in calculating the Contract
Price and determining the Time Schedule. No increase in the
Contract Price and/or extension of the Time Schedule shall be
considered by the Owner or given effect based in whole or in part
upon any discrepancy between the conditions that the Contractor
anticipated and the actual conditions encountered by the
Contractor. Without limiting the generality of the foregoing, the
Contractor confirms that it is aware of the archaeological
investigations being conducted at the Site by the LANDESAMT FUR
ARCHAOLOGIE DES XXXXXX SACHSEN-ANHALT, that it has taken such
work into account in developing its workplan, and that it shall
not be entitled to any adjustment in the Contract Price or Time
Schedule as a result of any interference with the Contractor's or
Contractor's Suppliers' work caused by such investigation
provided that the investigations are completed as indicated in
the time schedule provided by the LANDESAMT FUR ARCHAOLOGIE DES
XXXXXX SACHSEN-ANHALT for such investigations.
ART. 8 TIME SCHEDULE
The Parties agree to fulfill their obligations as set forth in
this Contract by the times and dates specified below (as such
times and dates may be extended in accordance with Section 8.9 or
an approved Change Order).
Contract Page 34(36)
SECTION 8.1. The Pre-Activities shall start on the date mutually agreed upon
between the Parties and shall have a duration of at least 3
months prior to Commencement Date.
SECTION 8.2. Mechanical Completion of the Works shall be not later than 22
(twenty-two) months after Commencement Date ("Scheduled
Mechanical Completion Date").
SECTION 8.3. Start-up shall be not later than 23 (twenty-three) months after
Commencement Date ("Scheduled Start-up Date").
SECTION 8.4. Production of saleable pulp shall begin not later than 24
(twenty-four) months after Commencement Date ("Scheduled
Production Date"). "Saleable pulp" means pulp which can be sold
at a price of at least seventy percent (70%) of the list price of
NBSKP (CIF North Sea Port), as reported by NLK. "NBSKP" means
northern bleached softwood kraft pulp. "NLK" means Nystrom, Lee,
Kobyashi Ltd.
SECTION 8.5. All conditions to Acceptance shall be satisfied not later than 28
(twenty-eight) months after Commencement Date.
SECTION 8.6. The times for delivery of documentation, including "as built"
drawings, are set forth in Appendix 3, Ex. 3.2 and Ex. 19.
DETAILED PROGRAM
SECTION 8.7. The Contractor shall, no later than thirty (30) Days after the
Commencement Date submit to the Owner and the Independent
Engineer for review a draft of a Detailed Program for the
execution of the Works. The Detailed Program shall be consistent
with the Milestone schedule set forth in Appendix 3, Ex. 20 and
shall set out in detail the sequence in which and the techniques
and resources by which the Contractor intends to perform the
Works so that the Contractor will achieve each Milestone by the
applicable Milestone Date, Mechanical Completion by the Scheduled
Mechanical Completion Date, Start-
Contract Page 35(37)
up by the Scheduled Start-up Date, commencement of production of
saleable pulp (as defined in Section 8.4) by the Scheduled
Production Date, and Acceptance by the Scheduled Acceptance Date.
In particular, the Detailed Program shall include information
regarding the planned physical progress of major construction and
erection activities at the Site, including without limitation
manpower (by trade) on Site, concrete poured, equipment
installed, and piping, electrical and instrumentation installed.
Such information shall include graphs of the planned achievement
over time of the aggregate unit quantities for such items
(so-called "S-curves") in order to facilitate measurement and
reporting of actual progress against planned progress for
purposes of, among other things, the monthly progress reports to
be provided pursuant to Section 8.10. The S-curves shall be
prepared in accordance with good industrial practice as approved
by the Owner and the Independent Engineer.
The Contractor shall give due consideration to any comments made
by the Owner and the Independent Engineer regarding the Detailed
Program in finalizing the Detailed Program and any portion of the
Detailed Program that affects the implementation of the Owner's
Scope or its use of facilities shall be mutually agreed by the
Owner and the Contractor. The fact that the Owner has reviewed
and/or made comments regarding the Detailed Program shall not
relieve the Contractor of any of its obligations under the
Contract.
The Parties recognize that it is essential to complete all of the
items specified in Sections 8.1 through 8.6 by the respective
dates specified therein and the Contractor undertakes to carry
out its work diligently and in a timely manner, so that the
scheduled dates can be achieved. The Contractor shall not be
entitled to any adjustments in the Time Schedule except as and to
the extent provided in Section 8.9. Should delays occur, the
Contractor shall use all diligent means and efforts, including
but not limited to overtime work and extra resources, at no extra
cost to the Owner except as provided in Section 9.8
Contract Page 36(38)
and Article 12 of the Contract, in order to comply with the Time
Schedule established under this Article 8.
The Contractor shall revise and update the Detailed Program as
necessary in order to achieve each Milestone by the applicable
Milestone Date, Mechanical Completion by the Scheduled Mechanical
Completion Date, Start-up by the Scheduled Start-up Date,
commencement of production of saleable pulp (as defined in
Section 8.4) by the Scheduled Production Date and Acceptance by
the Scheduled Acceptance Date; provided that any changes to any
portion of the Detailed Program that affect the implementation of
the Owner's Scope or its use of facilities shall be mutually
agreed by the Owner and the Contractor. The Contractor shall use
its best efforts to meet the Milestone Dates in the execution of
the Contract, but failure to achieve any Milestone by the
Milestone Date or to complete any of the items specified in
Section 8.1 through 8.6 by the respective dates specified therein
shall not entitle the Owner to any rights or remedies in
connection with such delay other than as expressly set forth in
Sections 8.11, 23.1 and 24.1 and Article 21; provided that
payments in respect of Payment Milestones shall only become due
upon the completion of such Payment Milestones.
SECTION 8.8. The Contractor shall carry out all other aspects of the Works in
accordance with the Detailed Program described in Section 8.7, as
such program may change from time to time in accordance with
Section 8.9 or Article 12 of this Contract.
DELAY AND EXTENSION OF TIME
SECTION 8.9. If the achievement of the Time Schedule or any Milestone will be,
or has been, delayed beyond the Milestone Date applicable
thereto; Mechanical Completion of the Works will be, or has been,
delayed beyond the Scheduled Mechanical Completion Date; Start-up
will be, or has been, delayed beyond the Scheduled Start-up Date;
commencement of production of saleable pulp will be, or has been,
delayed beyond the Scheduled Production Date, or
Contract Page 37(39)
Acceptance will be, or has been, delayed beyond the Scheduled
Acceptance Date by reason of:
(i) Change in Law;
(ii) suspension of the Works under Article 23 (other than by
reason of the Contractor's default or breach of the
Contract);
(iii) breach of the Contract by the Owner, including the failure
by the Owner to perform the Owner's Scope in accordance
with Article 4 or Section 17.11 as adjusted for delays
(other than by reason of the Contractor's default or
breach of the Contract);
(iv) a Force Majeure to the extent the provisions of
Section 26.4 permit a delay;
(v) it is ultimately determined that a modification to any
Milestone Date, the Scheduled Mechanical Completion Date,
the Scheduled Start-up Date, the Scheduled Production Date
or the Scheduled Acceptance Date is warranted as a
consequence of a Change Order issued by the Owner pursuant
to Section 12.10;
(vi) any additional tests performed at the request of the Owner
in cases where Section 6.2 provides for an adjustment in
the Time Schedule;
(vii) any removal or tearing out in cases where the third
paragraph of Section 6.3 provides for an adjustment in the
Time Schedule; or
(viii) undue interference with the activities of the Contractor
by the Owner in carrying out the Owner's Scope as provided
in Section 3.6,
then the Owner shall (in the case of clause (v), upon settlement
of the effects of the Change) grant an extension of the relevant
Milestone Date, the Scheduled Mechanical Completion Date, the
Scheduled Start-up Date, the Scheduled Production Date and/or the
Scheduled Acceptance Date
Contract Page 38(40)
commensurate to the effect of such delay, subject to satisfaction
by the Contractor of the following conditions:
(a) the Contractor shall have used and continue to use
its best efforts to prevent, avoid, overcome and
minimize any such delay and to proceed with the
Works;
(b) the Contractor shall as soon as practicable and in
any event within twelve (12) Days after such
occurrence deliver a notice to the Owner which
identifies the basis on which an extension of time
is claimed and within twenty five (25) Days after
the relevant circumstances have occurred, deliver
to the Owner full and detailed particulars of any
claim for an extension of time to which it
reasonably considers itself entitled; to the
extent that such full and detailed particulars are
not available at that time for reasons not
attributable to the Contractor, it shall deliver
such full and detailed particulars as soon as
practicable;
(c) the Contractor shall be entitled to an extension
of time only to the extent that any delay is not
attributable to or contributed to by any default,
omission, neglect or failure on its part, or on
the part of any Contractor's Supplier or to any
matters or events which are within the control of
the Contractor or Contractor's Supplier;
(d) any addition to the Contract Price granted by the
Owner under Section 9.8 shall not of itself
entitle the Contractor to any extension of the
Time Schedule;
If the Owner has agreed under Section 12.7 to the Contractor's
proposals for an extension of the Time Schedule in relation to
any Change, the Milestone Date, the Scheduled Mechanical
Completion Date, the Scheduled Start-up
Contract Page 39(41)
Date, the Scheduled Production Date or the Scheduled Acceptance
Date shall be extended by the time agreed in the Change Order and
not otherwise.
REPORTS
SECTION 8.10. Monthly progress reports shall be prepared by the Contractor and
submitted to the Owner in six copies. The first report shall
cover the period up to the end of the first calendar month
following the Commencement Date and shall reflect the
Contractor's performance of the Pre-Activities. Reports shall be
submitted monthly thereafter, each within fifteen (15) Business
Days after the end of the calendar month to which it relates.
Reporting shall continue until the Contractor has achieved
Acceptance.
The monthly progress report shall be in the form described in
Appendix 3, Ex. 23 and shall include all relevant information
needed to describe the physical and other progress of the Works,
any problems associated therewith and the main activities for the
following reporting period, including demand for manpower; in
addition, the monthly progress report shall note any events which
may cause delays, claims for increases in the Contract Price or
Changes and describe corrective actions being taken if deviations
from the Detailed Program are apparent.
The Contractor shall also provide to the Owner and the
Independent Engineer promptly after receipt copies of all
agreements it may have or enter into with any Contractor's
Supplier regarding schedule and progress (including any changes
to same) and, upon request, progress reports it receives from
specific Contractor's Suppliers.
Deviations from the Time Schedule by the Contractor or any
Contractor's Supplier shall be reported by the Contractor without
delay.
SECTION 8.11. In the event that the monthly progress reports or other reports
by the Contractor, the Owner or the Independent Engineer of
deviations from the
Contract Page 40(42)
Time Schedule and the Milestone Dates indicate that any activity
on the "critical path" or the physical progress of major
activities or groups of activities in the current Detailed
Program prepared in accordance with Section 8.7 is delayed by
more than thirty (30) Days, the Contractor shall within fifteen
(15) Days after notice from the Owner prepare, in consultation
with the Owner and subject to confirmation by the Independent
Engineer that such plan is reasonable and achievable, a
"workaround plan" which will detail additional manpower or other
resources, resequencing of the workplan and other steps to be
taken by the Contractor to achieve the Time Schedule and the
Milestones by the Milestone Dates. The Contractor shall proceed
in accordance with such plan, and shall not be entitled to any
additional payment for taking such steps. In the event the
Contractor fails to prepare and deliver such workaround plan
within such fifteen (15) Day period, the Owner shall be entitled
to have such plan prepared by the Independent Engineer or an
engineering consulting firm at the expense of the Contractor, and
the Contractor shall comply with such plan. In the event that the
Contractor does not bring the Works substantially into accord
with the workaround plan within sixty (60) Days after its
delivery (by the Contractor or, if applicable, by the Independent
Engineer or engineering consulting firm), the Owner shall have
the right, in addition to other rights and remedies under this
Contract (including, if applicable, Section 24.1.2.), to engage
third party companies or otherwise arrange for additional
resources to carry out such part or portion of the Works that are
behind schedule or affected by delay (including by adding to the
scope of the relevant Contractor's Supplier with respect to items
of equipment or components), with the cost of any such additional
resources to be for the account of the Contractor.
ART. 9 CONTRACT PRICE, PAYMENT TERMS AND ADJUSTMENTS TO CONTRACT PRICE
SECTION 9.1. For the fulfillment of all obligations and undertakings under the
terms and conditions of this Contract, the Owner shall pay to the
Contractor a contract price of:
Contract Page 41(43)
Seven Hundred Sixteen Million Euros
(EURO 716,000,000)
The Contract Price is inclusive of all taxes and duties except
for German value added tax (MEHRWERTSTEUER, MWST.), which shall
be shown separately on each invoice and added to the Contract
Price.
The Contract Price is fixed provided that the Commencement Date
is not later than September 9, 2002. In the event the
Commencement Date occurs later than September 9, 2002, the
Parties shall agree on any adjustment to the Contract Price that
is appropriate under the circumstances.
For Contract Price breakdown see Appendix 2, Ex. 2.
The Contract Price is the total price to be paid by or on behalf
of the Owner to the Contractor in full consideration for the
performance by the Contractor of its obligations under the
Contract (including the Pre-Activities) and, except as
contemplated in the Contract, encompasses all of the risks
relating to the Works whether foreseen or unforeseen. The
Contract Price shall be escalated, increased or decreased only as
provided in Section 9.8 and any Change Order approved pursuant to
Article 12. The Contract Price shall be paid to the Contractor
against invoices received in respect of Payment Milestones
achieved in accordance with Appendix 2, Ex. 9.
SECTION 9.2. The Contractor may submit to the Owner on a Monthly basis (with a
copy to the Independent Engineer), but not more than once per
Month, its draft invoice for payment in respect of the Payment
Milestones that have been completed during such Month, together
with a certificate signed by a duly authorized officer of the
Contractor confirming that all Payment Milestones in respect of
which the Contractor is claiming payment have been completed and
attaching supporting documentation. The form of such invoice
shall be agreed by the Parties prior to the Commencement Date.
The Owner shall complete its review (including such input as it
may receive from the Independent Engineer) within seven (7)
Business Days of receipt of the draft
Contract Page 42(44)
invoice. The Owner (or the Owner's Representative) shall, if it
agrees, approve the draft invoice or, if it disagrees, approve
only that part of the draft invoice with which it agrees and the
Contractor shall, upon receipt of the Owner's approval of
undisputed amounts, issue an invoice for payment of such
undisputed amounts by the Owner. No approval by the Owner or
payment of any invoice shall relieve the Contractor of any of its
obligations hereunder with respect to the Works or prejudice any
of the Owner's rights under the Contract, including the Owner's
rights under Article 20 hereof.
In addition to the foregoing, the Contractor shall provide to the
Owner at such times and in such form as the Owner requires, such
information and support as is required to perform and prepare the
proper accounting and make any subsidy calculations and
submissions to the Relevant Authorities.
SECTION 9.3. Each approved invoice for undisputed amounts shall be due and
payable within thirty (30) Days after receipt by the Owner
thereof; provided that, if required by Law, the Owner shall
withhold the required amount of each instalment, to be applied in
accordance with the relevant Law, unless prior to such payment
the Contractor delivers to the Owner satisfactory evidence from
the Relevant Authority confirming that the Contractor or such
payment is exempt from such withholding requirement. The
Contractor shall not be entitled to any additional compensation
for any amounts so withheld. Should the Owner fail to make the
required payment of undisputed amounts within thirty (30) Days
after submission of an approved invoice, the Contractor shall be
entitled to charge interest at a rate equal to Euribor (1 month)
at the respective due date plus three (3) percentage points,
accruing from the due date until payment is received.
SECTION 9.4. In the event of a dispute about any amount invoiced by the
Contractor, including whether the Contractor has achieved the
necessary progress, the undisputed amount of the payment shall be
made in accordance with Section 9.3. Should the Contractor claim
a right to refuse performance or a
Contract Page 43(45)
right of retention in respect of amounts in dispute, it shall be
obligated to state the amount as to which it asserts such right
and the Owner shall be entitled to prevent such right from being
enforced by providing to the Contractor security within thirty
(30) Days after notice from the Contractor of its claim of such
right, security for the payment of the amounts in dispute in the
form of a deposit or a standby (not first demand) bank guarantee
issued by a first class bank acceptable to the Contractor (which
may be Bayerische Hypo-und Vereinsbank AG) and generally
consistent with the tenor of the bank guarantees to be provided
under Section 10.1, provided that the Owner shall not be entitled
to use such payment security for more than EURO 10,000,000 in
the aggregate at any one time.
SECTION 9.5. All bank fees assessed by the payor's bank in connection with the
payment shall be borne by Owner and all bank fees assessed by
recipient's bank shall be borne by the Contractor.
SECTION 9.6. The Contractor shall pay to the Owner all amounts payable by it
under this Contract at the times specified herein or, if not so
specified, within thirty (30) Days after such amounts become due.
If the Contractor fails to pay the Owner any amount due under the
Contract within the specified period, then the Owner may set off
the amounts in question against any amounts payable to the
Contractor under this Contract and/or call on any payment or
performance security to satisfy, in whole or in part, the
Contractor's payment obligations.
SECTION 9.7. All Change Orders issued according to Article 12 shall be
invoiced separately and in accordance with the terms of payment
contained in such Change Order.
SECTION 9.8. If as a result of the effect of any of the following the costs to
the Contractor of performing its obligations under the Contract
shall be increased or decreased:
(i) Change in Law;
Contract Page 44(46)
(ii) suspension of the Works under Article 23 (other than by
reason of the Contractor's default or breach of the
Contract);
(iii) breach of Contract by the Owner, including the failure by
the Owner to perform the Owner's Scope in accordance with
Article 4 or Section 17.11, as adjusted for delays (other
than by reason of the Contractor's default or breach of
the Contract);
(iv) a Force Majeure to the extent the provisions of
Section 26.4 provide for an increase in the Contract
Price;
(v) it is ultimately determined that an increase in the
Contract Price is warranted as a consequence of a Change
Order issued by the Owner pursuant to Section 12.10;
(vi) any additional tests performed at the request of the Owner
in cases where Section 6.2 provides for an increase in the
Contract Price;
(vii) any removal or tearing out in cases where the third
paragraph of Section 6.3 provides for an in the Contract
Price; or
(viii) undue interference with the activities of the Contractor
by the Owner in carrying out the Owner's Scope as provided
in Section 3.6,
then the Contract Price shall (in the case of clause (v), upon
settlement of the effects of the Change) be increased (or
decreased as the case may be) by the amount of such increase (or
decrease) subject to satisfaction by the Contractor of the
following conditions:
(a) The Contractor shall have used and continue to use best
efforts to prevent, avoid and minimize any such increase
in costs;
(b) The Contractor shall as soon as practicable and in any
event within twelve (12) Days after such occurrence
deliver a notice to the Owner which identifies the basis
on which the increase in Contract Price is
Contract Page 45(47)
claimed and within twenty five (25) Days after the
relevant circumstances have occurred, deliver to the Owner
full and detailed particulars of any claim for an increase
in the Contract Price to which it reasonably considers
itself entitled, to the extent that such full and detailed
particulars are available at the time or, to the extent
that such full and detailed particulars are not available,
to deliver such full and detailed particulars as soon as
practicable.
(c) The Contractor shall be entitled to any increase in the
Contract Price only to the extent that the circumstances
giving rise to the increase in costs to the Contractor are
not attributable to some default, omission, neglect or
failure on its part, or on the part of any Contractor's
Supplier or to any matters or events which are within the
control of the Contractor or such Contractor's Supplier;
The granting by the Owner of any extension to the Time Schedule
shall not of itself entitle the Contractor to any increase in the
Contract Price.
SECTION 9.9. In any case where the Contractor considers it is entitled to an
increase in the Contract Price under this Article 9 it shall keep
full and detailed contemporary records of the Costs it incurs in
relation to the matter in question. Such records shall be open to
inspection by designated representatives of the Owner at all
reasonable times.
ART. 10 ADVANCE PAYMENT, PERFORMANCE AND WARRANTY SECURITY
SECTION 10.1. On or prior to the Commencement Date, the Contractor shall
provide the Owner with an irrevocable bank guarantee(s) as
security for the advance payment by the Owner, for the
performance by the Contractor of its obligations under the
Contract and for any Defects arising during the Defects Liability
Period. Such bank guarantee(s) shall be issued by a first class
bank acceptable to the Owner and the Banks, shall be in the form
set forth in Appendix 2, Ex. 4 and in the amounts therein
specified, and shall be valid and enforceable on the Commencement
Date.
Contract Page 46(48)
Such security may be issued as separate bank guarantees or a
composite bank guarantee provided that such security shall be in
the respective amounts for the periods and in respect of the
obligations set forth in Appendix 2, Ex. 4. In the event that the
bank guarantee is called in respect of the Contractor's liability
for Defects under Article 20, the Contractor shall within 3 days
of the date of such call provide to the Owner a replacement bank
guarantee or confirmation of an increase in the outstanding bank
guarantee in an amount equal to the applicable percentage of the
Contract Price as set forth in Appendix 2, Ex. 4.
Not later than forty-five (45) days prior to September 1, 2006,
the Contractor shall provide to the Owner (who shall promptly
furnish a copy to the Agent):
(i) an additional guarantee in substantially the same form as the
guarantee set forth in Appendix 2, Exhibit 4, in an amount equal
to the applicable percentage of the Contract Price as set forth
in Appendix 2, Ex 4 (being an amount no less than five (5) per
cent of the Contract Price) and having an expiry date of
January 1, 2009; or
(ii) evidence that the expiry date of the guarantee provided by
the Contractor to the Owner under this Contract as security for
the advance payment by the Owner, for the performance by the
Contractor of its obligations under the Contract and for any
Defects arising during the Defects Liability Period (the
"Original Guarantee") has been extended from September 1, 2006 to
January 1, 2009,
unless the Original Guarantee has already expired in accordance
with its terms because the Contractor has presented an original
Expiry of Defects Liability Certificate as set forth in Annex C
to Appendix 2, Ex. 4 or Annex D to Appendix 2, Ex. 4.
If the Contractor fails to provide an additional guarantee in
accordance with either paragraph (i) or (ii) above, it shall be
in breach of this Contract and the
Contract Page 47(49)
Owner shall be entitled to call upon the Original Guarantee in
its full amount, to be held as security for the performance by
the Contractor of its obligations under the Contract and for any
Defects arising during the Defects Liability Period.
To the extent that there are no claims submitted under the bank
guarantee, the amount shall be reduced and the bank guarantee
shall be released as set forth in Appendix 2, Ex. 4.
Thereafter the Contractor shall provide to the Owner, if
applicable, a bank guarantee as set forth in Appendix 2, Ex. 5,
to cover any outstanding warranty obligations.
SECTION 10.2. CHANGE IN CONTRACT PRICE
If the Contract Price is adjusted under Section 9.8:
(i) in the case of an increase, the Contractor shall, within 3
days and as a condition precedent to any further payment
by the Owner, provide the Owner with a replacement bank
guarantee or confirmation of an increase in the
outstanding bank guarantee to equal the applicable
percentage of the new Contract Price as set forth in
Appendix 2, Ex. 4; and
(ii) in the case of a decrease, the Contractor may within 3
days provide the Owner with a replacement bank guarantee
to equal the applicable percentage of the new Contract
Price as set forth in Appendix 2, Ex. 4.
SECTION 10.3. CONSENT TO ASSIGNMENT
At the same time as it provides any bank guarantee under this
Article 10, the Contractor shall also provide an acknowledgement
by the issuer of the bank guarantee, in a form approved by the
Owner, that the issuer consents to the assignment by the Owner of
its rights under the guarantee to the Banks.
Contract Page 48(50)
ART. 11 CHANGES IN LAW
SECTION 11.1. The Contractor shall comply with all Laws and Permits as in
effect from time to time in relation to the Works (including
during the Defects Liability Period). Except in relation to any
income taxes payable by the Contractor, if, after the Contract
Day, any Law or Permit not reasonably foreseeable on the Contract
Day, is enacted, promulgated, abrogated or changed (which shall
be deemed to include any change in interpretation or application
by the competent authorities but exclude any Law in existence on
the Contract Day that is to become effective at a later date)
that affects the Works and as a result the costs and expenses of
the Contractor (other than increases in direct or indirect labor
costs of the Contractor or any Contractor's Supplier as a result
of changes in Law or salary or benefit increases instituted by
Contractor) are increased or decreased by an amount in excess of
(euro) 500,000, individually or in the aggregate and/or the Time
Schedule is affected ("Change in Law"), the Contractor shall
promptly notify the Owner and supply to the Owner fully details
of such Change in Law, the manner in which the Contractor
proposes to comply with the Change in Law, a proposed expenditure
budget, a revised Time Schedule (if appropriate) and all
information as the Owner shall reasonably require to assess the
effect on the Contractor's obligations. The Contractor shall be
entitled to an adjustment to the Contract Price (which may be
increased or decreased) and/or the Time Schedule, by the issuance
of a Change Order as set forth in Article 12, to the extent that
the Contractor has been affected in the performance of any of its
obligations under the Contract by such Change in Law.
The same shall apply for any changes in the Works reasonably
required due to changes in permitting requirements by the
Relevant Authorities (not reasonably foreseeable on the Contract
Day) between the Contract Day and the Acceptance Date. This
Section shall not, however, apply to any change made or required
based on the permit values contained in the Permits or
Contract Page 49(51)
applications for Permits (or amendments to such Permits) listed
in items 1-6 in Appendix 3, Ex. 4.4.
SECTION 11.2. The Contractor shall use its best efforts to avoid or minimize
any delays, cost increases or decreases in performance resulting
from the foregoing.
ART. 12 CHANGES
SECTION 12.1. The Contractor shall not be entitled to make any Changes without
the written approval and consent of the Owner in accordance with
this Article 12.
SECTION 12.2. The Owner may require the Contractor from time to time during the
performance of the Contract to make any Change provided that such
Change does not constitute unrelated work and that it is
technically practicable.
SECTION 12.3. The Contractor may from time to time during its performance of
the Contract propose to the Owner in writing any Change which the
Contractor considers necessary or desirable to improve the
quality, efficiency or safety of the Works. Should any
improvements or innovations which can be incorporated in the
design of the Works or used in connection with its operation
become available, the Contractor shall offer the Owner such
technological advances in the form of a proposal for a Change
Order. The Owner shall in its discretion approve or reject any
Change proposed by the Contractor in writing.
SECTION 12.4. If the Contractor proposes a Change the Contractor shall submit
to the Owner a written "Application for Change Proposal," giving
reasons for the proposed Change and including the information
specified in Section 12.5.
The Contractor shall not be entitled to recover any costs for
preparing the Application for Change Proposal.
Contract Page 50(52)
SECTION 12.5. If the Owner proposes a Change, it shall send to the Contractor a
request ("Request for Change Proposal") requiring the Contractor
to prepare and furnish to the Owner as soon as reasonably
practicable a proposal ("Change Proposal") which shall include
the following:
(a) description of Change and details of how the Contractor
intends to give effect to the Change;
(b) effect on the Time Schedule, including the effect on any
applicable Milestone;
(c) estimated costs of the Change;
(d) effect on Performance Requirements, if any;
(e) effect on any other provisions of the Contract; and
(f) such other information as will reasonably enable the Owner
to properly evaluate the proposed Change.
SECTION 12.6. In the event that it can be foreseen that the cost of preparing
and submitting the Change Proposal will be in excess of (euro)
5,000, the Contractor shall, prior to preparing and submitting
the Change Proposal, submit to the Owner an estimate of the cost
of preparing and submitting the Change Proposal ("Estimate for
Change Proposal").
The Contractor shall use its best efforts to obtain any Change
Proposal by a Contractor's Supplier at no cost for the Owner.
Upon receipt of the Contractor's Estimate for Change Proposal,
the Owner shall either:
(a) accept the Contractor's estimate with instructions to the
Contractor to proceed with the preparation of the Change
Proposal, or
Contract Page 51(53)
(b) advise the Contractor of any part of its Estimate for
Change Proposal that is unacceptable with a request for
the Contractor to review its estimate, or
(c) advise the Contractor that the Owner does not intend to
proceed with the Change.
SECTION 12.7. Upon receipt of the Change Proposal, the Owner and the Contractor
shall mutually agree upon all matters therein contained. Within
fourteen (14) Days of such agreement the Owner shall, if it
intends to proceed with the Change, issue the Contractor a Change
Order, to be executed by the Parties, incorporating the changes
in question and providing for any change in the Time Schedule
(including any applicable Milestone) or other dates for
completion or delivery, any increase or reduction of the Contract
Price, change in payment terms and any change in the scope of the
Works, the Contractor's standards of performance, the
Specifications, Warranties or the Performance Requirements and,
if necessary to conform provisions of the Contract, enter into an
amendment to this Contract, in each case resulting from the
change in the Works. Any adjustment of the Contract Price shall
be determined on an "open book" basis as described in
Section 12.11 and shall take into account, among other things,
requirements of the various financial institutions providing
funding for the accomplishment of the Works, the elimination or
avoidance of Works to be performed resulting from the changes in
the scope of the Works and assistance to be given by the Owner.
The price of the Change shall be added to the Contract Price and
shall be invoiced in accordance with Article 9 of the Contract
based on an agreed payment schedule.
If the Owner decides not to proceed with a Change for whatever
reason, it shall, within said period of fourteen (14) Days notify
the Contractor accordingly. Under such circumstances, the
Contractor shall be entitled to reimbursement of all costs
reasonably incurred by it in preparation of any
Contract Page 52(54)
Change Proposal for which it has submitted an Estimate for Change
Proposal to the Owner in accordance with Section 12.6, not to
exceed the amount given by it in such Estimate for Change
Proposal.
SECTION 12.8. The Owner shall have the right at its own choice to enter into
contracts directly with the Contractor's Suppliers or suppliers
for additional items or modifications it wishes to procure, and
shall bear the entire risk related thereto.
SECTION 12.9. Except as provided in 12.10, the Contractor shall not proceed
with any Changes unless the respective Change Order has been
issued.
SECTION 12.10. If the Owner and the Contractor fail to agree on the effect of a
Change and as a result a Change Order is not issued, the Owner
may direct the Contractor to perform the work involved in that
Change by delivering to the Contractor a Change Order signed by
the Owner and making payment for any undisputed amount related to
such Change when it becomes due, unless the amount in dispute in
respect of such Change involves a net amount payable to the
Contractor that, together with all other amounts then in dispute
under Change Orders issued under this Section 12.10, exceeds
(euro)50,000 for an individual Change or (euro)500,000 in the
aggregate. In the event amounts in dispute are greater than the
respective threshold amounts in the previous sentence, the Owner
may direct the Contractor to perform such work upon providing a
standby (not first demand) bank guarantee or other payment
assurance reasonably satisfactory to the Contractor. In such
event, the Contractor shall be obligated to carry out the Change
as instructed with the appropriate adjustment to the Contract
Price and/or Time Schedule to be determined later on an "open
book" basis as described in Section 12.11, provided that the
Contractor shall declare the basis for any claimed additional
remuneration and/or adjustment to the Time Schedule in writing
within fourteen (14) Days after receipt of such instruction. The
Contractor's performance of work pursuant to a Change Order
issued under this Section 12.10 shall not
Contract Page 53(55)
prejudice the right of either Party in the settlement of the
effects of that Change.
SECTION 12.11. The costs for any Change shall be determined using an "open book"
methodology similar in all pertinent respects to that used in
determining the Contract Price and based on the same units prices
and the same margin used for the Contact Price or set forth in
the EPC Price Calculation.
With respect to any cost forming the basis for an adjustment in
the Contract Price, the Contractor agrees to keep records and
books of account, showing the cost of all items of labor,
Materials, equipment, supplies, services and all other
expenditures of whatever nature, and all cash and trade
discounts, rebates, allowances, credits, salvage and commissions
in respect thereof, which are reimbursable to the Contractor or
which are the subject of an adjustment in the Contract Price. The
system of accounting to be employed by the Contractor shall be in
accordance with generally accepted accounting principles in
Germany consistently applied. The Contractor's records and books
of account referred to above and all supporting documents,
including all supporting documents required for this purpose to
be obtained by the Contractor from any Contractor's Supplier,
shall be maintained in such a manner as to provide an audit trail
and as to facilitate any examination and audit thereof by the
Owner.
SECTION 12.12. For all items referred to in Section 12.11, the Owner or its
authorized representatives or agents shall have the right to
examine and audit, during business hours, all books, statements,
accounts, correspondence, instructions, specifications, plans,
drawings, receipts, memoranda, accounting documents and other
records of the Contractor, including all supporting documents
required for this purpose to be obtained by the Contractor from
any Contractor's Supplier, insofar as they are pertinent.
The Contractor shall cause all of its documentation specified
above, including all supporting documents required for this
purpose to be obtained by the
Contract Page 54(56)
Contractor from Subcontractors and the Contractor's Suppliers, to
be preserved and made available for examination and audit,
without any additional compensation therefor, for a period of
twelve (12) Months after the earlier of the date of Acceptance
and the date of any earlier termination of this Contract. The
foregoing right of examination and audit shall extend, but shall
not be limited to, calculations of unit rates, percentages per
diem charges or other similar fixed amounts or man-hours worked
or estimated to be worked which are to provide that basis of
reimbursements or indemnifications to the Contractor and
adjustments of the Contract Price. The foregoing right of
examination and audit shall survive any early termination of this
Contract.
SECTION 12.13. Notwithstanding the execution by the Owner of any approval,
certificate of performance or payment to the Contractor or any
Contractor's Supplier, the Owner shall be entitled to a refund
from the Contractor in the event that any examination and audit
of the documentation referred to in Section 12.11 above establish
that the Contractor or any Contractor's Supplier did not incur
any amount claimed. Such right of examination and refund shall
continue for a period of three years after the earlier of the
date of Acceptance and the date of any earlier termination of
this Contract.
SECTION 12.14. Notwithstanding anything contained in this Article 12, no Change
necessary due to any default of the Contractor in the performance
of its obligations under the Contract shall result in any
adjustment of the Contract Price and/or the Time Schedule.
ART. 13 OWNERSHIP AND RISK OF LOSS
TRANSFER OF TITLE
SECTION 13.1. The Parties hereby agree that title to all Works, equipment and
Materials (the "ITEMS") to be provided by the Contractor under
the Contract and all warrants (TRADITIONSPAPIERE, including
KONNOSSEMENTS, LADESCHEINE and LAGERSCHEINE (irrespective of the
law governing such warrants)) issued in relation to such Items
(the "WARRANTS") shall be transferred to the Owner at the earlier
of
Contract Page 55(57)
delivery to the Site or payment in respect thereof. For that
purpose, the Contractor shall every 6 months (and otherwise from
time to time as the Owner may reasonably instruct the
Contractor), notify the Owner of all Items during the preceding 6
month period (or otherwise since the last such notification
received by the Owner) in relation to which the Contractor has
received payment prior to delivery of such Items to the Site, and
the Contractor shall provide the Owner with a signed protocol
(each such protocol, a "Transfer Protocol") specifying such Items
and the Warrants relating thereto. Each Transfer Protocol shall
provide that (i) the Contractor reconfirms the passing to the
Owner of title in the Items and the Warrants relating thereto
specified in the Transfer Protocol and (ii) the Contractor waives
its right to receive a countersigned copy of the Transfer
Protocol. The Parties hereby agree that, upon counter signature
by the Owner of each Transfer Protocol, title to all Items and
the Warrants relating thereto listed in such Transfer Protocol
shall be deemed to have passed to the Owner irrespective of
whether the Contractor has actually received payment for such
Items.
The Parties hereby further agree that in the event of title
passing to the Owner upon payment prior to delivery of the
relevant Items to the Site as provided herein, for the purpose of
title passing to the Owner, the transfer of possession in the
relevant Items and the Warrants relating thereto is hereby
replaced (BESITZKONSTITUT) as follows. The Contractor shall:
(i) hold possession of any Items and the Warrants relating
thereto specified in any Transfer Protocol and of which
the Contractor has possession on behalf of the Owner free
of charge (UNENTGELTLICHE VERWAHRUNG) and, in relation to
such Items and the Warrants relating thereto of which the
Contractor does not have possession, the Contractor
assigns to the Owner any claim of the Contractor for
transfer of possession (HERAUSGABEANSPRUCHE); and
Contract Page 56(58)
(ii) ensure that such Items will be and will remain:
(a) upon completion of manufacture of any item of such
Works, equipment or materials, separated from any
other Works, equipment and materials; and
(b) clearly marked and/or reserved as the property of
the Owner; and
(iii) upon delivery to the Site of any Items in relation to
which title has not already passed to the Owner, ensure
that such Items are treated in the same manner as set out
in paragraph (ii).
RISK OF LOSS
SECTION 13.2. Notwithstanding the transfer of title pursuant to Section 13.1
and except as otherwise provided in Section 18.11, all risk of
damage to or loss of any item of the Works (other than Excepted
Risks) shall be borne by and remain with the Contractor until
Acceptance; provided, however, that the Contractor shall not be
obligated to repair or restore any portion of the Works that is
damaged by a risk covered by the insurance to be obtained and
maintained by the Owner pursuant to Article 14 where the Banks do
not make the proceeds of such insurance available to the
Contractor for the purpose of such repair or restoration.
The Owner shall, upon the written request of the Agent, release
the Contractor from its obligation to repair or restore any
portion of the Works that is damaged by a risk covered by the
insurance to be obtained and maintained by the Owner pursuant to
Article 14. It is hereby understood that any such release of the
Contractor from its obligation to repair or restore any portion
of the Works (the "RELEASED WORKS") shall shift the risk of loss
in respect of the Released Works to the Owner. The Contractor
hereby covenants that, in the case of a release pursuant to this
paragraph, it will not claim any material
Contract Page 57(59)
interests (VERSICHERTE INTERESSEN) from which it would benefit
without such release.
If the Contractor is released from its obligation to repair or
restore any portion of the Works pursuant to the preceding
paragraph, the Contractor shall release each Selected Supplier
from any obligation it may have to repair or restore such portion
of the Works to the extent that that Selected Supplier has an
obligation to do so pursuant to a Selected Subcontract. The
Contractor shall also procure that any such Selected Supplier (i)
covenants not to claim, in the case of a release, any material
interests (VERSICHERTE INTERESSEN) from which it would benefit
without such release and (ii) releases its suppliers from any
obligation they may have to repair or restore that portion of the
Works and procures that its suppliers covenant not to claim, in
the case of a release, any material interests (VERSICHERTE
INTERESSEN) from which they would benefit without such release.
If the Contractor reasonably incurs costs related to mitigating
the effects of the insured event between the date of the
occurrence of the insured event and the date on which the
Contractor is released from its obligation to repair or restore
any of the Works in accordance with this section 13.2, the Owner
shall, without prejudice to section 26.4, ensure that to the
extent that insurance proceeds in respect of the Contractor's
mitigation costs are paid by the insurance company under the
insurance to be obtained by the Owner pursuant to Article 14, the
Contractor is provided with any such insurance proceeds.
The Contractor shall also be responsible for all damages
resulting from the operation of the Works prior to Acceptance
unless caused by the wilful misconduct of the Owner's personnel
and during the Schedule B Tests unless caused by wilful
misconduct or gross negligence of the Owner's personnel. The
Contractor shall also be responsible for the consequences of any
non-compliance by it or any Contractor's Supplier with Laws or
Permits.
Contract Page 58(60)
Excepted Risks shall mean each of the following insofar as they
directly affect the Site:
(a) war, hostilities (whether war be declared or not),
invasion, act of foreign enemies, terrorist acts (until
insurance for such acts is obtained by the Owner),
(b) ionizing radiation, or contamination by radioactivity from
any nuclear fuel, or from any nuclear waste from the
combustion of nuclear fuel, radioactive toxic explosive or
other hazardous properties of any explosive nuclear
assembly or nuclear component thereof, but not including
goods and material such as measuring, monitoring and
testing devices, that use low levels of radiation, in each
case from a source outside of the Site,
(c) pressure waves caused by aircraft or other aerial devices
travelling at sonic or supersonic speeds,
(d) riot, commotion or disorder, unless restricted to
employees or agents of the Contractor or the Contractor's
Suppliers,
(e) rebellion, revolution, insurrection, or military or
usurped power, or civil war;
except to the extent any of the above (i) existed prior to the
Contract Day, (ii) are covered by insurance maintained pursuant
to Article 14 or (iii) are the direct or indirect result of
actions by the Contractor or any Contractor's Supplier, or the
failure of the Contractor or any Contractor's Supplier to perform
any of its obligations under this Contract or the applicable
subcontract, and provided that the Contractor has taken all
reasonable precautions, due care, and reasonable alternative
measures in order to mitigate the consequences thereof.
Contract Page 59(61)
SECTION 13.3. All of the Contractor's Equipment shall be brought to and kept at
the Site at the sole cost, risk and expense of the Contractor or
Contractor's Supplier and the Owner shall not be liable for any
loss or damage thereto in connection with the performance of the
Works.
ART. 14 INSURANCE
The Owner will maintain at its own cost insurance policies taken
out as at the date hereof consistent with the indicative
description set out in Appendix 2, Exhibit 6. The Contractor (and
Contractor's Suppliers) will be added as a named insured party
for its respective rights and interests in the policy.
The Owner will be responsible for notifying insurers, filing and
prosecuting all insurance claims pursuant to any insurance policy
required under the Contract.
The Contractor will be required to take out, at its own cost, and
require all Contractor's Suppliers to take out and maintain, at
their own cost, insurance in compliance with Law and:
1) Workmen's Compensation/Employers' Liability insurance with
a minimum sum insured for any one occurrence and in the
annual aggregate to a level adequate to cover statutory
liability under applicable Laws;
2) Motor Vehicle Liability (including Third Party Property
Damage) to at least the levels required to comply with
Law;
3) insurance against loss or damage to the Contractor's
Equipment used in performance of the Contract while at,
on, adjacent to or in transit to or from the Site;
4) material damage insurance against fire, lightning,
aircraft, explosion, earthquake, impact, xxxxx, xxxxxxx,
flood, on all administrative, manufacturing and storage
facilities owned leased or hired by the
Contract Page 60(62)
Contractor and used by the Contractor for the performance
of the Contract; and
5) Professional Indemnity insurance to the extent available
in accordance with the existing insurance policies of the
Contractor or Contractor's Suppliers.
The Contractor will be required to:
(a) bear the deductibles (up to (euro)75,000 per loss and
(euro)750,000 in the aggregate per year) where any claim
under the Owner's insurance arises by reason of the
Contractor's performance of its obligations under the
Contract;
(b) the Contractor shall be responsible for, and shall
compensate the Owner in respect of, any increase in the
premium for the Owner's Insurance to the extent that any
such increase is attributable to claims made on such
insurance by reason of fault of the Contractor;
(c) not act or omit to act in a manner which might prejudice
such insurance and promptly comply with the
recommendations of the insurers of the Owner so that said
insurance carriers will continue to provide the cover
maintained by the Owner;
(d) assist, and cause the Contractor's Suppliers to assist, in
the disclosure of information to insurers and will, and
will cause the Contractor's Suppliers to disclose all
information material to the risks covered by the insurance
procured by the Owner under the Contract;
(e) fully comply with, and require all Contractor's Suppliers
to comply fully with, all procedures and services
including completion of all necessary applications for
insurance, prompt and full compliance with all audit
requests and claim reporting procedures, and full
participation in and compliance with safety and loss
control programs implemented by, or
Contract Page 61(63)
at the request of, the Owner, all of the above to be in
accordance with applicable professional standards;
(f) any claims with respect to any event covered by the
insurance listed in the Contract shall be made on the
basis that such insurance is the primary insurance and not
in contribution with any other insurance the Contractor or
any Contractor's Suppliers may have and thereby will not
jeopardize the availability of cover under any delay in
start up, business interruption or similar type insurance
that the Owner may have;
(g) in respect of the insurance obtained pursuant to
paragraphs (1), (2) and (3) above, obtain an "Indemnity to
Principals" clause and a clause providing for a waiver of
insurers' rights of redress against the Owner, the Lenders
and such other parties as notified to the Contractor by
the Owner;
(h) assist and co-operate, and require all Contractor's
Suppliers to assist and co-operate, in every manner
possible in connection with the adjustment of all claims
arising out of the operations conducted under, or in
connection with, the Contract and shall co-operate with
the insurers of the Owner in all litigated claims and
demands which arise out of said operations and which the
said insurers are called upon to adjust to resist.
(i) obtain certificates of insurance from each Contractor's
Supplier evidencing the required cover is in full force
and effect and, if requested, provide the Owner with such
certificates. The Contractor shall procure by stipulation
in all Contractor's Suppliers' contracts that all
insurance policies arranged by any Contractor's Suppliers
are to comply with this Contract and shall include a
provision for "Indemnity to Principals" and a waiver of
their insurers rights of redress against the
Contract Page 62(64)
Owner, the Banks and such other parties as notified to the
Contractor by the Owner;
(j) the insurance set out under this Section does not alter
the liabilities of the Parties (except insofar as it
obligates the Owner to obtain and maintain insurance under
the conditions set out herein) or otherwise affect the
allocation of risk under this Contract and shall in no way
affect, nor are they intended as a limitation of the
Contractor's liability with respect to its performance of
the Contract.
ART. 15 WORK ENVIRONMENT RESPONSIBILITY
SECTION 15.1. The responsibility for coordination according to the Work
Environment Act (BAUSTELLENVERORDNUNG) shall be borne by the
Contractor. However, this does not derogate from either Party's
normal employer responsibility, for their own personnel, their
own or their employee's tools, technical devices and vehicles. In
accordance with this, the Parties shall be responsible for
ensuring that their employees and their subcontractors' employees
have been given the necessary training, received appropriate
information about regulations concerning order, safety and
security at the workplace in accordance with Appendix 3, Ex. 16
and other regulations and instructions (including all TUV
(Technical Control Board) provisions, all trade law provisions,
the accident prevention provisions of the social insurance
associations and all statutes, in particular statutes for
protection against building noise and other federal and state law
emission control regulations, ordinances and local by-laws which
affect the Works) issued by the authorities or the Owner for the
work concerned.
SECTION 15.2. Each Party shall participate in the safety organization and joint
safety inspection rounds, and to comply with all applicable Laws
concerning order and safety which are applicable at each
workplace and at the Site. The Contractor shall ensure that all
Contractor's Suppliers are bound by the same obligation.
Contract Page 63(65)
SECTION 15.3. The Contractor shall, and shall ensure that each Contractor's
Supplier take all reasonable steps to protect the environment
(both on and off the Site) and to limit damage and nuisance to
people and property resulting from pollution, noise and other
results of its operations during the performance of the Works.
During the execution of the Works the Contractor shall ensure
that emissions, surface discharges and effluent from the Works,
including operation of the Plant prior to Acceptance and during
the Schedule B Tests, shall not exceed the values prescribed by
applicable Laws and Permits for the Plant.
SECTION 15.4. The Contractor shall indemnify and hold harmless the Owner and
its employees and officers from and against any and all suits,
actions or administrative proceedings, claims, demands, losses,
damages, costs, and expenses of whatsoever nature, including
attorney's fees and expenses, which the Owner may suffer as a
result of any allegation, notice of violation, claim, demand,
order, directive, cost recovery action or other cause of action
by, or on behalf of, any Relevant Authority or any person for
damages, injunctive or equitable relief, personal injury
(including sickness, disease or death), remedial action costs,
tangible or intangible property damage, natural resource damages,
nuisance, pollution, any adverse effect on the environment caused
by any hazardous material, or for fines, penalties or
restrictions, resulting from or based upon (a) the alleged
existence, or the continuation of the existence, of a release of
hazardous material (including sudden or non-sudden, accidental or
non-accidental releases), (b) the alleged exposure to any
hazardous material, (c) the alleged presence, use, handling,
transportation, storage, treatment or disposal of any hazardous
material or (d) the violation or alleged violation of any
environmental law or environmental Permit, in the case of each of
(a) through (d) to the extent caused by the Contractor or any
Contractor's Supplier. Such indemnity shall not cover the Owner's
Scope or any use by the Owner of the Works or any part thereof
other than for the purpose indicated by, or reasonably to be
inferred from, the Contract.
Contract Page 64(66)
ART. 16 MECHANICAL COMPLETION
SECTION 16.1. The Contractor shall perform Mechanical Completion Tests and
verify the satisfaction of the applicable Mechanical Completion
checklist, each as specified in Appendix 3, Ex. 11.1, to ensure
that each System, each Non-System Department and, after each
System and Non-System Department has satisfied the applicable
Mechanical Completion Test, the Works have been properly
installed and are in accordance with the Contract. The Contractor
shall provide all equipment, Materials, supplies, personnel and
utilities for such tests except for items to be provided by the
Owner in accordance with Appendix 3, Ex. 4.
SECTION 16.2. Not later than seventy-five (75) Days prior to anticipated
Mechanical Completion of a System or Non-System Department, the
Contractor shall deliver a plan of Mechanical Completion Tests
(including details of how such tests shall be performed) for the
systematic checking of all relevant parts of the Works as set
forth in Appendix 3, Ex. 11.1, together with the Mechanical
Completion checklist for such System or Non-System Department.
The Owner shall review such plan and checklist and, within
fifteen (15) Days after the date on which such documents were
actually received by the Owner and the Independent Engineer,
shall either notify the Contractor of its approval (such approval
not to be unreasonably withheld) or of any remarks and
observations. If such notification has not been given to the
Contractor within said period, approval of the plan and checklist
shall be deemed given upon expiry of said fifteen (15) Day
period. If the Owner submits any remarks or observations
(including remarks or observations provided to the Owner by the
Independent Engineer), the Contractor shall meet with the Owner
and endeavor to resolve all issues within the next fifteen (15)
Days (all such issues shall in any event be resolved prior to the
commencement of the Mechanical Completion Tests).
SECTION 16.3. The Contractor shall give at least five (5) Business Days' prior
written notice to the Owner and the Independent Engineer of all
Mechanical Completion
Contract Page 65(67)
Tests specified in Appendix 3, Ex. 11.1 and the Owner and the
Independent Engineer shall have the right to witness all such
Mechanical Completion Tests. In the event that the Owner or the
Independent Engineer, after having been notified properly, does
not attend any such Mechanical Completion Test, the Contractor
shall be entitled to proceed in accordance with the plans and
checklists for such tests as established in accordance with
Section 16.2.
SECTION 16.4. The Contractor shall certify in writing to the Owner and the
Independent Engineer that the relevant System, Non-System
Department or the Works, as the case may be, complies with the
requirements for Mechanical Completion set forth in Appendix 3,
Ex. 11.1 and shall submit to the Owner six copies of the
Mechanical Completion Test results and the completed Mechanical
Completion checklists, and make a copy of such test results and
checklists available to the Independent Engineer at the Site, for
verification that the test results and the completed checklists
conform to the requirements set forth in the plans prepared in
accordance with Appendix 3, Ex. 11.1. The Contractor shall give
the Owner and the Independent Engineer at least two (2) Business
Days' advance notice of the date on which it anticipates
submitting the test results for review.
SECTION 16.5. If the results of the Mechanical Completion Tests and the
completed Mechanical Completion checklists properly conform to
the requirements of the Contract, the Owner shall issue three
original signed copies of a Certificate of Mechanical Completion
for the applicable System or Non-System Department within five
(5) Business Days after receipt by the Owner and the Independent
Engineer of such results and checklists, dated to reflect the
actual date of Mechanical Completion of the System or Non-System
Department, one of such copies to be provided to the Contractor.
If the Owner believes that the test results or the completed
Mechanical Completion checklists do not properly conform to the
requirements set forth in the Contract or indicate that the
System or Non-System Department has not been properly installed,
the Owner shall notify the Contractor of such results within five
(5) Business Days
Contract Page 66(68)
after the Owner and the Independent Engineer have received such
results or checklists and the Contractor shall promptly take such
corrective action as is necessary to cure the defects or
deficiencies. The Contractor shall thereafter re-perform the
applicable Mechanical Completion Tests and re-submit test results
or completed checklists to the Owner and the Independent Engineer
as specified herein. If the Owner neither issues the Certificate
of Mechanical Completion of such System or Non-System Department
nor notifies the Contractor that the test results of the
Mechanical Completion Tests and/or the completed Mechanical
Completion checklists do not properly conform as aforesaid prior
to the end of the fifth (5th) Business Day following receipt by
the Owner and the Independent Engineer of the results of the
Mechanical Completion Tests (or the re-performance thereof) and
the completed Mechanical Completion checklists with respect to a
System or Non-System Department, then a Certificate of Mechanical
Completion of such System or Non-System Department will be deemed
to have been issued as of such fifth Business Day.
SECTION 16.6. The Owner shall not withhold the issue of a Certificate of
Mechanical Completion of a System or Non-System Department if all
items required to achieve Mechanical Completion shall have been
completed except for Punch List items which do not adversely
affect the Commissioning of the System, Non-System Department or
any other System or Non-System Department without damage to the
Works or the environment. All such defects and deficiencies shall
be listed in the Punch List and all such Punch List items shall
be remedied by the Contractor as soon as possible but in any
event within six (6) months after Acceptance.
SECTION 16.7. The Certificate of Mechanical Completion for the Works shall be
issued after:
(a) Certificates of Mechanical Completion have been issued for
(i) all Systems and (ii) all Non-System Departments that
are scheduled to be completed by the Scheduled Mechanical
Completion Date;
Contract Page 67(69)
(b) documentation has been delivered in accordance with and to
the extent required by Appendix 3, Ex. 3.2;
(c) the training program for the Owner's personnel has been
completed to the degree provided in Appendix 3, Ex. 3.5
and Ex. 4.6; and
(d) the Contractor certifies that all items on the Master
Equipment List in Appendix 3, Ex. 5 are as required by the
Specifications and have been installed (except as agreed).
Within five (5) Business Days after the foregoing conditions are
satisfied, the Owner shall issue three original signed copies of
the Certificate confirming the date of Mechanical Completion of
the Works, one such copy to be provided to the Contractor. The
Certificate of Mechanical Completion of the Works shall be dated
the same date as and issued (or deemed to be issued as the case
may be) concurrently with the Certificate of Mechanical
Completion for the last System or Non-System Department for which
a Certificate of Mechanical Completion is required to be issued
by the Scheduled Mechanical Completion Date.
SECTION 16.8. Within five (5) Business Days after the issuance of the
Certificate of Mechanical Completion of the Works, the Contractor
shall either confirm to the Owner that the Owner's Scope,
including the furnishing of the inventory of spare parts to be
provided by the Owner pursuant to Section 4.5, has been completed
or else notify the Owner of those items within the Owner's Scope
that remain to be completed and/or corrected. If the Contractor
does not notify the Owner prior to the end of the fifth (5th)
Business Day after the issuance of the Certificate of Mechanical
Completion of the Works of any items that remain to be so
completed and/or corrected, the Owner's Scope shall be deemed to
be completed as of such date.
Contract Page 68(70)
ART. 17 TRAINING; COMMISSIONING, SYSTEM START-UP, START-UP AND SCHEDULE A
TESTS
SECTION 17.1. Upon Mechanical Completion of a System, Commissioning of such
System as set forth in Appendix 3, Ex. 11.2 shall be carried out
by the Owner's operating personnel under the instruction,
supervision and direction of the Contractor as described in
Appendix 3, Ex. 3.5 and 4.6. The Contractor shall be responsible
for having sufficient qualified personnel available at the Site
during Commissioning and until Acceptance to adequately supervise
the Owner's personnel and determine the cause of any Defects
which may become apparent and promptly to remedy the same.
SECTION 17.2. The Contractor shall provide all items required for the
performance of Commissioning and until Acceptance, except as
otherwise provided in Appendix 3 Ex. 4.1 and 11. The Owner shall
provide the operating personnel, the raw materials and other
consumables for Commissioning, System Start-up and for Start-up
specified in Appendix 3, Ex. 4.1. All pulp and other output
produced by the Plant prior to Acceptance, including during test
runs, shall be property of the Owner.
SECTION 17.3. After Commissioning of a System has been completed in accordance
with the Contract and training of the Owner's personnel has
progressed in accordance with the training program as set forth
in Appendix 3, Ex. 3.5 and 4.6 and the System is ready for System
Start-up, the Contractor shall give the Owner and the Independent
Engineer at least twenty-four (24) hours' prior written notice of
the scheduled date (and time) for commencement of System
Start-up.
The Contractor shall conduct System Start-up for each System as
set forth in and in the sequence provided in Appendix 3,
Ex. 11.3.
Start-up shall be conducted in accordance with Appendix 3,
Ex. 11.4 following the successful completion of System Start-up
of all Systems.
Contract Page 69(71)
SECTION 17.4. System Start-up and Start-up shall be conducted under the
instruction, supervision and direction of the Contractor by the
Owner's operating personnel as set forth in Appendix 3, Ex. 3.5
and 4.6.
SECTION 17.5. After completion of System Start-up of the respective Systems,
the Schedule A tests shall be performed pursuant to and in
accordance with detailed procedures prepared by the Contractor
and delivered to the Owner and Independent Engineer at least
sixty (60) Days prior to the anticipated commencement of such
tests. The Owner shall review such procedures and, within fifteen
(15) Days after the date on which such documents were actually
received by the Owner and the Independent Engineer, shall either
notify the Contractor of its approval (such approval not to be
unreasonably withheld) or of any remarks and observations. If
such notification has not been given to the Contractor within
said period, approval of the detailed procedure shall be deemed
given upon expiry of said fifteen (15) Day period. If the Owner
submits any remarks or observations (including remarks or
observations provided to the Owner by the Independent Engineer),
the Contractor shall meet with the Owner and endeavor to resolve
all issues within the next fifteen (15) Days (all such issues
shall in any event be resolved prior to commencement of the
Schedule A Tests).
SECTION 17.6. The Contractor shall give the Owner and the Independent Engineer
at least twenty-four (24) hours' prior written notice of the
performance of any Schedule A Test, and the Owner and the
Independent Engineer shall have the right to witness all such
tests.
SECTION 17.7. The Contractor shall submit six copies of the results of the
Schedule A tests to the Owner and make a copy of such results
available to the Independent Engineer at the Site for
verification that the tested System conforms to the requirements
of Appendix 3, Ex. 12.2. The Contractor shall give the Owner and
the Independent Engineer at least two (2) Business Days' advance
notice of the date on which it anticipates submitting such test
results for review.
Contract Page 70(72)
SECTION 17.8. If the results of the Schedule A Tests prove the compliance of
the applicable System with the performance criteria specified in
Appendix 3, Ex. 12.2, the Owner shall, within two (2) Business
Days after receiving such results, confirm that such System has
satisfied the performance criteria for the applicable Schedule A
Test by issuing three original signed copies of the Certificate
of Operational Acceptance of the System dated to reflect the
actual date of Operational Acceptance, two of such copies to be
provided to the Contractor. If the results of the Schedule A
tests indicate that the applicable System does not satisfy the
performance criteria specified in Appendix 3, Ex. 12.2, the Owner
shall notify the Contractor within two (2) Business Days after
receiving such results and the Contractor shall promptly take
such corrective action as is necessary to rectify any defect or
deficiency. After the Contractor has completed such corrective
action and determines that the System is ready for re-testing,
the Contractor shall give the Owner and the Independent Engineer
at least 24 hours' notice of the date (and time) that the failed
Schedule A test will be re-performed. Upon completion of the
re-performed Schedule A tests, the Contractor shall re-submit six
copies of such test results to the Owner and the Independent
Engineer as specified herein and the Owner shall, within two (2)
Days, either advise the Contractor in writing of any additional
defects or deficiencies that are discovered (in which event the
Contractor shall promptly take such action as is necessary to
rectify such defect or deficiency and re-perform the relevant
Schedule A Test in accordance with the procedures established
pursuant to Section 17.5) or the Owner shall issue three original
signed copies of the Certificate of Operational Acceptance of
such System dated to reflect the actual date of Operational
Acceptance, two of such copies to be provided to the Contractor.
If the Owner neither issues the Certificate of Operational
Acceptance of such System nor notifies the Contractor that the
applicable System does not conform to the requirements specified
in Appendix 3, Ex. 12.2 prior to the end of the second (2)
Business Day following receipt by the Owner and the Independent
Engineer of the results of
Contract Page 71(73)
a Schedule A test or of the results of the re-performance of such
Schedule A test with respect to a System, then a Certificate of
Operational Acceptance for such System will be deemed to have
been issued as of such second Business Day.
SECTION 17.9. The Owner shall not withhold the issuance of a Certificate of
Operational Acceptance of a System if all items required to
achieve Operational Acceptance shall have been completed except
for Punch List items relating to the System, but all such Punch
List items shall be remedied by the Contractor as soon as
possible and in any event within six (6) months after Acceptance.
SECTION 17.10. Upon satisfaction of the following conditions the Owner shall
issue three original signed copies of the Certificate confirming
the date of Operational Acceptance of the Works (one such copy to
be provided to the Contractor):
(a) Certificates of Operational Acceptance have been issued
for all Systems that are subject to Schedule A Tests and
any Punch Lists issued;
(b) documentation has been delivered in accordance with and to
the extent provided in Appendix 3, Ex. 3.2; and
(c) the training program for the Owner's personnel has been
completed to the degree provided in Appendix 3, Ex. 3.5
and Ex. 4.6.
The Certificate of Operational Acceptance of the Works shall be
dated the same date as and, provided the conditions in clauses
(b) and (c) have then been satisfied, issued (or deemed to be
issued as the case may be) concurrently with the Certificate of
Operational Acceptance for the last System for which a
Certificate of Operational Acceptance is required to be issued.
SECTION 17.11. The issuance of the Certificate of Operational Acceptance of the
Works pursuant to Section 17.10 is the condition precedent for
commencement of the 72-Hour Test. In the event that a Schedule A
Test cannot be carried out
Contract Page 72(74)
or cannot be successfully carried out due to a failure by the
Owner to perform the Owner's Scope in accordance with the
Contract (which has not been caused or contributed to by the
Contractor), then, so long as all other Schedule A tests have
been successfully completed or waived by the Owner, the
Contractor shall be entitled to a Change in the Time Schedule
pursuant to Section 8.9 equal to the period of delay in
fulfillment by the Owner of such obligations and a Change in the
Contract Price pursuant to Section 9.8 equal to any additional
costs reasonably incurred by the Contractor as a result of such
delay.
ART. 18 72-HOUR TEST AND ACCEPTANCE OF WORKS
SECTION 18.1. During the period between Mechanical Completion of a System and
Acceptance of the Works, such System(s) or, upon Mechanical
Completion of all Systems, the Plant will be operated by the
Owner's personnel under the instruction, supervision and
direction of the Contractor in order to fine-tune all Systems in
preparation for the 72-Hour Test.
SECTION 18.2. At least seventy-five (75) Days prior to the anticipated
commencement of the 72-Hour Test, the Contractor shall prepare
and deliver to the Owner and the Independent Engineer detailed
procedures for the conduct of the 72-Hour Test (including
sampling and testing of Materials and consumables to be supplied
by the Owner for purposes of the 72-Hour Test). The Owner and
Independent Engineer shall review such procedures and, within
fifteen (15) Days after the date on which such documents were
actually received by the Owner and the Independent Engineer, the
Owner shall either notify the Contractor of its approval (such
approval not to be unreasonably withheld) or of any remarks and
observations. If such notification has not been given to the
Contractor within said period, approval of the detailed procedure
shall be deemed given upon expiry of said fifteen (15) Day
period. If the Owner submits any remarks or observations
(including remarks or observations provided to the Owner by the
Independent Engineer), the Contractor shall meet with the Owner
and the Independent Engineer and endeavor to resolve
Contract Page 73(75)
all issues within the next fifteen (15) Days (all such issues
shall in any event be resolved prior to the 72-Hour Test).
SECTION 18.3. At least thirty (30) Days prior to the anticipated commencement
of the 72-Hour Test, the Parties shall select and jointly engage
an independent laboratory to conduct split sample testing for
purposes of the 72-Hour Test in accordance with the test
procedures. The costs of the independent laboratory shall be
shared equally by the Parties.
SECTION 18.4. Fourteen (14) Days prior to the date when the Plant is
anticipated by Contractor to be ready for the commencement of the
72-Hour Test, the Contractor shall so notify the Owner and the
Independent Engineer. When the Plant is ready for the 72-Hour
Test, and provided that Operational Acceptance of the Works has
been achieved in accordance with Section 17.10, the Contractor
shall certify in writing to the Owner that the Works have
satisfied all required conditions for commencement of the 72-Hour
Test. The Contractor shall give the Owner and the Independent
Engineer at least twenty-four (24) hours' prior notice of the
commencement of such test and the Owner and the Independent
Engineer shall have the right to witness the test. The 72-Hour
Test shall be carried out as set forth in Appendix 3, Ex. 12.5 by
the Owner's personnel under the instruction, supervision and
direction of the Contractor and in accordance with the detailed
procedures established pursuant to Section 18.2. All data
measured and information gathered during the 72-Hour Test shall
be properly documented and signed by authorized representatives
of both Parties.
SECTION 18.5. The results of the 72-Hour Test(s) shall be evaluated in
accordance with the procedure set forth in Appendix 3, Ex. 12.5
and Ex. 12.6.
SECTION 18.6. Following completion of the 72-Hour Test, the Contractor shall
submit to the Owner as soon as available and in any event within
thirty (30) Days after completion of the 72-Hour Test, six
original signed copies of the results of such test (together with
a written certification by the Contractor that the test
Contract Page 74(76)
results and, if applicable, the test results from the independent
laboratory, are true and correct), and make a copy of such test
results and other items available to the Independent Engineer at
the Site, for approval that the Minimum Performance Requirements
for the Works specified in the Contract have been fulfilled. The
Contractor shall give the Owner and the Independent Engineer at
least two (2) Business Days' advance notice of the date on which
it anticipates submitting such test results for review.
SECTION 18.7. If the following conditions are satisfied:
(i) the results of the 72-Hour Test shows that the Works meet
all Minimum Performance Requirements set forth in Appendix
3, Ex. 12.6,
(ii) all Non-System Departments have been successfully
completed as described in Article 16,
(iii) documentation has been delivered in accordance with and to
the extent provided in Appendix 3, Ex. 3.2,
(iv) all Permits required to have been obtained by the
Contractor by such date have been issued and are in full
force and effect, and
(v) the Contractor shall have validly assigned to the Owner
all its rights with respect to performance or availability
guarantees by the Contractor's Suppliers,
the Owner shall, within five (5) Business Days after receiving
such results, confirm that the Works have achieved all such
Minimum Performance Requirements and satisfied the 72-Hour Test
by issuing the Acceptance Certificate in the form set out in
Annex A to Appendix 2, Ex. 4 (together with a list of the Punch
List items from Sections 16.6 and 17.9, and any additional items
identified during the 72-Hour Test that remain to be completed)
dated to reflect the actual date of passing the 72-Hour Test.
Notwithstanding anything to the contrary contained herein, the
Owner shall be entitled to withhold from
Contract Page 75(77)
the amount due to the Contractor upon Acceptance one hundred
fifty percent (150%) of the value of all uncompleted Punch List
items, which amount shall be paid to the Contractor upon
completion of such Punch List items.
SECTION 18.8. If the results of the 72-Hour Test show that the Works do not
fulfill all of the Minimum Performance Requirements set forth in
Appendix 3 Ex. 12.6 or the test was not performed in accordance
with the procedures established pursuant to Section 18.2, the
Owner shall so notify the Contractor within five (5) Business
Days after receipt by the Owner and the Independent Engineer of
such results and the Contractor shall take such corrective action
as is necessary to correct the deficiencies in the Works without
delay (and in any event within six (6) months after the results
of the first test have been given to the Owner and the
Independent Engineer) so that all of the Minimum Performance
Requirements are achieved in a repeat 72-Hour Test in accordance
with this Article 18 or, if acceptable to the Owner, as part of a
Schedule B Test.
SECTION 18.9. In no event shall the Acceptance Certificate be given, or deemed
to be given, unless and until the Works have met all of the
Minimum Performance Requirements set forth in Appendix 3, Ex.
12.6. If all of the Minimum Performance Requirements are not
achieved prior to (i) such time as the Contractor has incurred
liquidated damages for delay equal to the maximum amount
permitted under Section 21.1 of the Contract or (ii) in the event
that an insured event that does not qualify as an Event of Force
Majeure occurs off-Site with respect to the turbogenerator, steam
drum for the power boiler or recovery boiler, 33 kV transformer
or fan pump and proceeds are payable for the delay in Start-up
resulting from such event under the insurance to be obtained and
maintained by the Owner pursuant to Article 14, three (3) Months
after the expiration of the period specified in clause (i) above,
the Contractor shall pay the applicable performance liquidated
damages for deficient performance in accordance with Section 21.2
and, notwithstanding such payment, shall remain obligated to take
any and all such corrective
Contract Page 76(78)
actions at its own cost and expense (without regard to any
limitations that might otherwise be applicable under Section 635
(3) BGB) as are necessary to correct the deficiencies in the
Works so as to achieve all of the Minimum Performance
Requirements.
SECTION 18.10. If the Owner neither issues the Acceptance Certificate nor
notifies the Contractor that the Works do not satisfy the Minimum
Performance Requirements set forth in Appendix 3, Ex. 12.6 prior
to the end of the fifth (5) Business Day following receipt by the
Owner and the Independent Engineer of the results of the 72-Hour
Test or the re-performance of such test, then the Acceptance
Certificate will be deemed to have been issued as of the fifth
Business Day after completion of the 72-Hour Test, dated to
reflect the actual date of passing the 72-Hour Test, provided
that the Contractor shall nevertheless remain obligated to
satisfy the conditions set forth in clauses (ii) - (vi) of
Section 18.7. In no event shall Acceptance be replaced by public
authority acceptance or, except as provided in this
Section 18.10, by notification of completion by the Contractor.
The possibilities of a fictitious acceptance provided for in
Section 640 BGB or of implied acceptance and the right of the
Contractor to obtain a certificate of completion pursuant to
Section 641a BGB are excluded.
SECTION 18.11. In the event that, due to the failure of the Owner to perform the
Owner's Scope in accordance with the Contract (which has not been
caused or contributed to by the Contractor), the first 72-Hour
Test cannot be carried out within six (6) months after Mechanical
Completion (plus any period by which the Time Schedule has been
extended pursuant to Section 17.11), then, provided that
Mechanical Completion of the Works has occurred, the Defects
Liability Period shall commence and risk of loss with regard to
the Works shall be transferred to the Owner upon the expiry of
such period, and the Contractor shall be entitled to a Change in
the Time Schedule pursuant to Section 8.9 equal to the period of
delay in fulfillment by the Owner of such obligations and a
Change in the Contract Price pursuant to Section 9.8 equal
Contract Page 77(79)
to any additional costs reasonably incurred by the Contractor as
a result of such delay.
SECTION 18.12. After expiry of the six (6) month period described in Section
18.11 above (as the same may be extended), the Contractor shall
remain obligated to demonstrate compliance of the Works with the
Performance Requirements within nine (9) months following
Mechanical Completion, upon terms to be agreed upon and taking
into consideration the actual situation of the Plant.
SECTION 18.13. With regard to defects, performance deficiencies or Punch List
items previously notified to the Contractor, the Owner retains
its rights under this Contract regardless of whether it made a
formal reservation pursuant to Section 640 subpara. 2 BGB on the
occasion of Acceptance.
ART. 19 SCHEDULE B TESTS
SECTION 19.1. Not later than six (6) months after Acceptance the Contractor
shall demonstrate that the Systems set forth in Appendix 3, Ex.
12.3 achieve the Performance Requirements stipulated in Appendix
3, Ex. 12.4. The Owner shall have the right (in consultation with
the Independent Engineer) to waive in writing any Schedule B Test
if satisfied with the performance of the Plant in production.
SECTION 19.2. The Owner's operating personnel, under the instruction, direction
and supervision of the Contractor, shall carry out the Schedule B
Tests in accordance with checklists and detailed test procedures
prepared by the Contractor and delivered to the Owner and the
Independent Engineer at least seventy-five (75) Days prior to the
anticipated commencement of the first Schedule B Test. The Owner
and the Independent Engineer shall review such procedures and,
within fifteen (15) Days after the date on which such documents
were actually received by the Owner and the Independent Engineer,
the Owner shall either notify the Contractor of its approval
(such approval not to be unreasonably withheld) or the Owner
shall notify the Contractor of any remarks and observations
(including remarks or
Contract Page 78(80)
observations provided to the Owner by the Independent Engineer).
If such notification has not been communicated to the Contractor
within said period, approval of the detailed procedure shall be
deemed given upon expiry of said fifteen (15) Day period. If the
Owner submits any remarks or observations (including remarks or
observations provided to the Owner by the Independent Engineer),
the Contractor shall meet with the Owner and endeavor to resolve
all issues within the next fifteen (15) Days (all such issues
shall in any event be resolved prior to the commencement of the
Schedule B Test).
SECTION 19.3. When the Contractor believes that a System is ready for the
commencement of its Schedule B Test, the Contractor shall provide
the Owner and the Independent Engineer with at least fourteen 14
Days' prior written notice of the performance of such test. The
exact timing of any Schedule B testing, as well as of Plant
shutdowns following Acceptance, if required, shall be agreed
between the Parties in due course in order not to interfere with
the operation of the Plant, taking into account pulp prices, the
cash flows and revenue anticipated to be generated pursuant to
the Base Case and other operating considerations and the fact
that the Contractor is entitled to 3 attempts for each Schedule B
Test. If, as a result of a written request by the Owner that the
Contractor not perform a Schedule B Test or the failure by the
Owner to respond within seven (7) Days to a written request by
the Contractor to perform a Schedule B Test, the Schedule B Tests
for one or more Systems have not been conducted within six (6)
months following Acceptance, the respective Schedule B Test
Certificate(s) shall be deemed to have been issued as of the
fifth Day following expiry of such period.
SECTION 19.4. At least thirty (30) Days prior to the anticipated commencement
of the Schedule B Tests, the Parties shall select and jointly
engage an independent laboratory to conduct split sample testing
for purposes of the Schedule B Tests in accordance with the test
procedures. The costs of the independent laboratory shall be
shared equally by the Parties.
Contract Page 79(81)
SECTION 19.5. The Contractor shall submit to the Owner within thirty (30) Days
after completion of a Schedule B Test, six (6) copies of the
results of the Schedule B Test and, if applicable, the results
from the independent laboratory (together with a written
certification by the Contractor that the test results and, if
applicable, the results from the independent laboratory, are true
and correct), and make available to the Independent Engineer at
the Site a copy of such test results and other items, for
approval that the tested System fulfills the Performance
Requirements set forth in Appendix 3, Ex. 12.4. The Contractor
will give the Owner and the Independent Engineer at least two (2)
Business Days' advance notice of the date on which it anticipates
submitting such test results for review.
SECTION 19.6. If the results of the Schedule B Test demonstrate compliance of
the applicable System with the Performance Requirements set forth
in Appendix 3, Ex. 12.4, the Owner shall, within five (5)
Business Days after receipt by the Owner of such results, issue
three original signed copies of the Schedule B Test Certificate
for such System in the form set out in Annex B to Appendix 2, Ex.
4, two of such copies to be provided to the Contractor, dated to
reflect the actual date of passing of the Test.
SECTION 19.7. If the results of the Schedule B Test indicate that the
applicable System does not fulfill the Performance Requirements
set forth in Appendix 3 Ex. 12.4 or the test was not performed in
accordance with the procedures established pursuant to
Section 19.2, the Owner shall so notify the Contractor within
five (5) Business Days after receipt by the Owner of such results
and, unless the Contractor establishes that such failure is due
to failure by the Owner to perform the Owner's Scope (which has
not been caused or contributed to by the Contractor), either:
(a) the Contractor shall promptly take such corrective action
as is necessary and the Schedule B Test shall be
re-performed in accordance with the terms of this
Article 19; or
Contract Page 80(82)
(b) (i) the Contractor may, at its option, provided that the
Minimum Performance Requirements are met, or (ii) after
the Contractor has made three attempts as permitted by
Section 19.3, the Contractor shall, pay the applicable
performance liquidated damages as set forth in
Section 21.2.
As long as the Minimum Performance Requirements are met, payment
of such liquidated damages pursuant to clause (b) shall satisfy
the Contractor's performance obligations with respect to such
Schedule B Test (but the Contractor shall remain obligated to
remedy any Defects in accordance with Article 20).
SECTION 19.8. If the results of a Schedule B Test indicate that a System does
not meet the Minimum Performance Requirements set forth in
Appendix 3, Ex. 12.4, then the Contractor shall not have the
option to cure the shortfalls by the payment of liquidated
damages and shall have an obligation to correct the deficiencies
in the Works without delay (and in any event within six (6)
months after the results of the first test have been given to the
Owner) so that the Minimum Performance Requirements are achieved
in a repeat Schedule B Test. If the Minimum Performance
Requirements are not achieved within six months after Acceptance
or after the Contractor has made three attempts as permitted by
Section 19.3, whichever occurs first, then, unless it establishes
that such failure is due to failure by the Owner to perform the
Owner's Scope in accordance with the Contract (which has not been
caused or contributed to by the Contractor), the Contractor shall
pay the applicable liquidated damages for deficient performance
in accordance with Section 21.2 and, notwithstanding such
payment, shall remain obligated to take any and all such
corrective actions at its own cost and expense (without regard to
any limitations that might otherwise be applicable under Section
635 (3) BGB) as are necessary to correct the deficiencies in the
Works so as to achieve the Minimum Performance Requirements.
Contract Page 81(83)
SECTION 19.9. If the Owner neither issues the Schedule B Test Certificate nor
notifies the Contractor that the relevant System does not satisfy
the applicable Performance Requirements set forth in Appendix 3,
Ex. 12.4 prior to the end of the fifth Business Day following
receipt by the Owner of the results of a Schedule B Test or of
the results of the re-performance of such test, then the Schedule
B Test Certificate will be deemed to have been issued as of the
fifth Business Day after completion of the Schedule B Test, dated
to reflect the actual date of passing the Schedule B Test.
SECTION 19.10. The Owner shall not withhold the issuance of a Schedule B Test
Certificate for a System in case of Punch List items relating to
the System, but all such Punch List items shall be remedied by
the Contractor as soon as possible and in any event within (a)
six months from Acceptance for those Punch List items identified
at or prior to Acceptance and (b) three months after the issuance
of the relevant Schedule B Test Certificate for those identified
in connection with the Schedule B Tests.
ART. 20 DEFECTS LIABILITY
SECTION 20.1. THE CONTRACTOR WARRANTS UNTIL THE EXPIRY OF THE DEFECTS LIABILITY
PERIOD THAT:
(i) the Works are free from all Defects, whether arising from
defective design, engineering, equipment, Materials or
workmanship and are suitable for their intended purpose as
set forth in the Contract;
(ii) the Works conform to the Specifications, the standards set
forth in Section 3.3(a) and 3.3(b) and the Design
Documentation as approved by the Owner (or any approved
revisions thereof) and recognized rules of sound
engineering practice (as in effect up to and including the
Acceptance Date) and comply with all other requirements of
the Contract;
Contract Page 82(84)
(iii) the Works comply with the requirements and provisions of
all Permits as in effect up to and including the
Acceptance Date (including Permit requirements resulting
from the Environmental Impact Assessment Report and the
updated emissions Permit for which an application has been
filed) relating to the construction and operation of the
Works;
(iv) the Works comply in all material respects with all Laws in
effect up to and including the Acceptance Date;
(v) the Works meet the Performance Requirements; and
(vi) good title to all Works, equipment and Materials and all
Intellectual Property Rights relating thereto are vested
in the Owner.
The Contractor's Warranties set out above do not apply to, and
the Contractor shall not be responsible for the repair,
replacement or making good of, any Defects or any damage to the
Plant which is attributable to normal wear and tear, operation or
maintenance of the Plant by the Owner after Acceptance in
violation of the instructions in the operation and maintenance
manuals or use of consumables not within the design range set out
in the Specifications.
The Contractor's obligations under this Article 20 shall not
apply to any Materials or equipment which are supplied by the
Owner, or which has a normal design life shorter than the Defects
Liability Period and fails after its normal design life.
SECTION 20.2. The Defects Liability Period shall be eighteen (18) months from
Acceptance (or, in the case of specified portions of the Works,
such longer periods as are set forth in Appendix 3, Ex. 24),
subject to any extension pursuant to Section 20.7. The provisions
of Sections 377 and 378 of the German Commercial Code (HGB)
(requirement to make a complaint in respect of a defect
immediately on receipt of the Goods) shall not apply.
Contract Page 83(85)
SECTION 20.3. The Contractor shall, at its own cost, be responsible for making
good by correction, repair, or replacement (including
substitution of materials in the event of excessive corrosion or
erosion) and, where necessary (including in the case of recurring
Defects), by procuring redesign and reengineering with all
possible speed and in accordance with the Contract any Defect
which may appear or occur in any part of the Works (including any
Defects that appear or occur on or before Acceptance) and which
arises from either:
(i) any breach of the warranties set out in Section 20.1;
(ii) any act or omission or breach of Contract of or by the
Contractor or any Contractor's Supplier (including as a
result of the operation of the Works prior to Acceptance)
or damage caused by carrying out of the Works on the Site;
or
(iii) operation of the Plant in accordance with defective
instructions in any operation and maintenance manual
(which contains material errors or omissions) that should
not reasonably have been apparent to the Owner's operating
personnel and such defective instruction or omission is
the cause of such Defect where those manuals are
subsequently revised in accordance with this clause,
and also any Defect or damage to the Works caused by or during
such correction, repair or replacement or by any Defect.
Section 635 (3) BGB is not applicable to this Contract.
If the nature or scope of the repair, replacement or redesign is
such that it might reasonably affect the performance of any
System, the Owner may require that the Contractor, after having
completed an appropriate test and checklist of the mechanical
completion and appropriate start up of the relevant System,
reperform the relevant Schedule B Tests. The request shall be
made by notice within thirty (30) Days after completion of the
making good. The relevant tests shall be repeated under the same
procedures
Contract Page 84(86)
(including with regard to costs of the Parties) as those followed
under the Contract in relation to the relevant original test.
If the results of the re-performed Schedule B Tests indicate that
the System(s) do not fulfill the relevant Performance
Requirements, then the Contractor shall either make such
additional repairs, replacements and redesign until the
Performance Requirements are fulfilled, or, at its sole option as
long as the Minimum Performance Requirements are fulfilled, pay
the applicable liquidated damages as set forth in Section 21.2
and payment of such liquidated damages shall satisfy the
Contractor's obligation in respect of such Performance
Requirements. Notwithstanding anything to the contrary contained
herein, other than as expressly set forth in this Section 20.3,
the Contractor shall have no continuing obligation (including
under Section 20.1(v)) with respect to the Performance
Requirements for a System, and shall be deemed to have met the
relevant Performance Requirements after the Owner has issued a
Schedule B certificate for such System pursuant to Section 19.6.
SECTION 20.4. If the Owner becomes aware of a Defect, the Owner shall give the
Contractor a written notice stating the nature of any such Defect
referred to in Section 20.3, together with all available
information related thereto, promptly following the discovery
thereof. If the Contractor becomes aware of a Defect, it shall
immediately notify the Owner of the nature and effect of such
Defect. The Owner shall afford a reasonable opportunity for the
Contractor to inspect any Defect without undue delay. Promptly
after this, the Parties shall agree upon the date and duration of
the repair, which shall be effected without undue delay
("UNVERZUGLICH") (taking into account physical access and
operation of the Plant, but not considerations of cost,
additional manpower and the like).
SECTION 20.5. The Contractor shall be afforded all access to the Plant and the
Site reasonably necessary to enable the Contractor to perform its
obligations under this Article 20; however, the Contractor shall
use its best efforts in
Contract Page 85(87)
connection with the performance of such obligations not to
interfere with the operations of the Plant.
The Contractor may, with the consent of the Owner, which consent
shall not be unreasonably withheld, remove from the Site any part
of the Works if any Defect is such that permanent repairs cannot
be expeditiously carried out on the Site.
SECTION 20.6. If the Contractor fails to commence the work necessary to remedy
a Defect or any damage to the Plant caused by such Defect, or to
complete the work, by the date agreed upon in accordance with
Section 20.4, then, unless the reasons for such delay are
attributable to the failure by the Owner to permit the Contractor
to perform as agreed, the Owner may, following expiration of
fourteen (14) Days' prior written notice to the Contractor,
proceed to do such work and the reasonable costs incurred by the
Owner in connection therewith shall be reimbursed by the
Contractor.
SECTION 20.7. The warranty and the Defects Liability Period with respect to any
part of the Works that are repaired, replaced, modified, or
otherwise altered during the Defects Liability Period shall
extend for a period of eighteen (18) months from the date of
completion of such repair, replacement, modification or
alteration (or such longer period as is set forth in Appendix 3,
Ex. 24).
If the Works or any part thereof cannot be used by reason of a
Defect and/or making good such Defect (the "stand-still" period),
such stand-still period shall be added to the Defects Liability
Period of the Works or such part, as the case may be.
The above notwithstanding, no Defects Liability Period shall
(except as otherwise set forth in Appendix 3, Ex. 24) extend more
than a total of 36 (thirty-six) months after Acceptance or more
than sixty-four (64) months after the Commencement Date plus a
period equal to the aggregate of all extensions in the Time
Schedule pursuant to Section 8.9 (other than clause
Contract Page 86(88)
(iii) of Section 8.9) or Article 12, whichever occurs first,
provided that (except as provided in Section 20.9), if a Defect
is discovered by the Contractor or, if discovered by the Owner,
as long as notice of a Defect is given to the Contractor, in each
case within the Defects Liability Period, the Contractor shall
remain liable to complete the making good of such Defect even if
the time to do so extends beyond the Defects Liability Period.
SECTION 20.8. The remedies provided for in this Article 20 shall be in lieu of
any other remedies provided in law with respect to defects
(XXXXXX), except where such defects are the result of fraud,
criminal or willful act or gross negligence of the Contractor
(and even in such cases the remedy of rescission shall be
excluded).
SECTION 20.9. Upon expiry of the Defects Liability Period as set forth in this
Article 20, or as soon thereafter as the Contractor has completed
or deemed to have completed all the Works, including remedying
any defects, and provided that all Schedule B Tests have been
completed (or waived by the Owner) and the respective Performance
Requirements have been achieved or (as long as the Minimum
Performance Requirements are fulfilled) the applicable liquidated
damages have been paid by the Contractor, the Owner shall issue
the Expiry of Defects Liability Period Certificate in the form
set out in Annex C to Appendix 2, Ex. 4. In the event that at
such time certain warranty obligations remain outstanding
(including rights of the Contractor against Contractor's
Suppliers), the Expiry of Defects Liability Period Certificate
shall be in the form set out in Annex D to Appendix 2, Ex. 4 and
shall include a reservation of rights of the Owner with respect
to any Defects covered by such warranties and shall be issued
against (i) provision by the Contractor of a bank guarantee in
the form set forth in Appendix 2, Ex. 5 for any Defects that have
not been remedied or, upon agreement with the Owner with respect
to claims against any Contractor's Supplier regarding such
Defects or (ii) in the case of warranties by Contractor's
Suppliers extending beyond the Defects Liability Period as set
forth in Appendix 3, Ex. 24, assignment by the Contractor of the
Contract Page 87(89)
respective warranty claims against such Contractor's Suppliers in
accordance with Section 25.8. If the Contractor has, despite the
exercise of its best efforts, been unable to remedy a Defect
within the Defects Liability Period, the Contractor may apply to
the Owner for the Expiry of Defects Liability Certificate if (i)
the Contractor would, apart from the Defect, be entitled to apply
for the Expiry of Defects Liability Certificate and (ii) the
Owner and the Contractor have agreed upon a sum to be paid by the
Contractor to the Owner as compensation for the Defect and the
Contractor has paid said compensation.
ART. 21 LIQUIDATED DAMAGES
LIQUIDATED DAMAGES FOR DELAY
SECTION 21.1. In the event that Acceptance is not achieved by the Scheduled
Acceptance Date (as the same may be extended or agreed upon in
accordance with Section 8.9 or Article 12 of the Contract), the
Contractor shall be liable to pay liquidated damages for each
Week of delay in an amount equal to 0.4% (zero point four
percent) of the Contract Price. In the case of a delay that is
less than a full Week, the amount of liquidated damages payable
shall be pro rated for each day of delay (with any part of a day
being deemed a full day for purposes of such proration).
The maximum amount of liquidated damages for delay shall be
limited to twelve percent (12%) of the Contract Price.
Except as otherwise provided in Section 8.11, 23.1 and 24.1, the
liquidated damages payable pursuant to this Section 21.1 for
delay in achieving Acceptance shall be the exclusive remedy for
such delay (and, in particular, remedies pursuant to Section 286
ET SEQ. BGB ("VERZUG") shall not be available). Any further
rights or remedies of the Owner to claim any damages or loss for
delay in connection with this Contract are expressly excluded.
Contract Page 88(90)
LIQUIDATED DAMAGES FOR DEFICIENT PERFORMANCE
SECTION 21.2. In the event that (i) the Minimum Performance Requirements are
not fulfilled during the 72-Hour Test prior to such time as the
Contractor has incurred liquidated damages for delay equal to the
maximum amount permitted under Section 21.1 or, if applicable,
such later time as is provided in clause (ii) of Section 18.9, or
(ii) the Performance Requirements are not achieved during the
Schedule B Tests (or not deemed to be achieved pursuant to the
last sentence of Section 19.3) within six months after Acceptance
or after the Contractor has made three attempts as permitted by
Section 19.3, whichever occurs first, in each case other than for
reasons which the Contractor can establish are attributable to
failure by the Owner to perform the Owner's Scope in accordance
with the Contract (which has not been caused or contributed to by
the Contractor), the Contractor shall be liable to pay the
following liquidated damages:
(a) with respect to the 72-Hour Test, five percent (5%) of the
Contract Price, and
(b) with respect to each Schedule B Test, subject to the
maximums set forth below and in Section 21.3, an amount
equal to twice the applicable amount(s) set forth in
Appendix 3, Ex. 12.4.
The maximum amount of liquidated damages for deficient
performance shall be limited to ten percent (10%) of the Contract
Price.
OVERALL LIQUIDATED DAMAGES
SECTION 21.3. The aggregate maximum of liquidated damages under Sections 21.1
and 21.2 hereof shall be limited to seventeen percent (17%) of
the Contract Price.
The Parties agree that the liquidated damages constitute a
genuine and reasonable estimate of the actual damages that would
be suffered by the Owner in the event of the Contractor's delay
or non-achievement of
Contract Page 89(91)
Performance Requirements and such liquidated damages shall not be
considered as penalties and, subject to the following paragraph
and except as provided in Sections 8.11, 18.9, 19.8, 23.1 and
24.1 and Article 20, shall be in lieu of all other rights and
remedies for delay in achieving Acceptance and non-achievement of
the Performance Requirements. The Parties agree that it is not a
precondition for the assertion of a claim to payment of
liquidated damages that the Owner must have reserved such right
at the time of Acceptance or established fault ("VERSCHULDEN") on
the part of the Contractor.
The Parties further agree that the payment of liquidated damages
shall not relieve the Contractor from any of its obligations to
complete the Works, attain the Minimum Performance Requirements,
or cure Defects and that any other amounts payable pursuant to
the Contract and any costs incurred by the Contractor to attain
the Minimum Performance Requirements or cure Defects shall not be
credited against or otherwise reduce the amounts of liquidated
damages otherwise payable pursuant to this Article 21.
SECTION 21.4. Liquidated damages for delay will be invoiced on a weekly basis.
Liquidated damages for deficient performance will be invoiced
twenty (20) Days after failure of the last permitted test
relating to the respective System.
ART. 22 INTELLECTUAL PROPERTY RIGHTS
SECTION 22.1. In the event that licenses, patents or other intellectual
property or proprietary rights held by the Contractor, or any
Contractor's Supplier, or any of their respective affiliates are
required by the Owner in the operation, maintenance, or repair of
the Plant in the manner intended and at the design capacity and
the production of the design output, the Contractor shall deliver
or cause to be delivered to the Owner such licenses on or before
the time such licenses, if any, are required. Such licenses shall
be in such form as shall be reasonably acceptable to the Owner,
shall be irrevocable, non-exclusive, and royalty free to the
Owner, and shall be assignable to the Owner and to the other
parties contemplated in the Direct Agreement.
Contract Page 90(92)
SECTION 22.2. The Contractor warrants that the Owner (and any successor in
interest) can use the Works and any parts thereof in Germany for
its intended purpose (including any modification or expansion of
the Works, but subject in the case of expansion to payment by the
Owner of any additional license fees payable in respect of such
additional capacity) in accordance with the Contract without
infringing another party's (whether in Germany or in any other
country) rights and interests in any utility model, unregistered
or registered design, trademark, copyright or other intellectual
property right registered or otherwise ("Intellectual Property
Rights"), and can sell products produced by the Works or by means
of it within and outside Germany.
SECTION 22.3. The Contractor shall indemnify and hold harmless the Owner and
its employees and officers from and against any and all suits,
actions or administrative proceedings, claims, demands, losses,
damages, costs, and expenses of whatsoever nature, including
attorney's fees and expenses, which the Owner may suffer as a
result of any infringement or alleged infringement of any
Intellectual Property Rights.
Such indemnity shall not cover the Owner's Scope or any use of
the Works or any part thereof other than for the purpose
indicated by, or reasonably to be inferred from, the Contract.
SECTION 22.4. If any proceedings are brought or any claim is made against the
Owner arising out of the matters referred to in Section 22.2, the
Owner shall promptly give the Contractor a notice thereof, and
the Contractor shall at its own expense and in the Owner's name
conduct such proceedings or claim and any negotiations for the
settlement of any such proceedings or claim.
If the Contractor fails to notify the Owner within ten (10) Days
of receipt of such notice that it intends to conduct any such
proceedings or claim, then the Owner shall be free to conduct the
same on its own behalf. Unless the Contractor has so failed to
notify the Owner within the ten (10) Day period,
Contract Page 91(93)
the Owner shall make no admission which may be prejudicial to the
defense of any such proceedings or claim.
The Owner shall, at the Contractor's request, assist the
Contractor in conducting such proceedings or claim, and shall be
reimbursed by the Contractor for all expenses incurred in so
doing. Should any claim in relation to an infringement of any
Intellectual Property Rights not be discharged, or should the
Contractor be found to have infringed such Intellectual Property
Rights the Contractor shall at its own expense (including all
reasonable direct costs and expenses suffered by the Owner) and
option either (a) procure the right to use any such Intellectual
Property Rights and all associated equipment and Materials and
transfer such rights to the Owner or (b) replace or redesign the
infringing equipment and Material and provide the Owner with a
confirmation that all Intellectual Property Rights have been
correctly obtained. The failure by the Owner to comply with the
provisions of this Section 22.4 shall not relieve the Contractor
of its obligations under Section 22.3 except to the extent that
the Contractor has been prejudiced thereby.
SECTION 22.5. The Owner shall indemnify and hold harmless the Contractor and
its employees, officers and the Contractor's Suppliers from and
against any and all suits, actions or administrative proceedings,
claims, demands, losses, damages, costs, and expenses of
whatsoever nature, including attorney's fees and expenses, which
the Contractor may suffer as a result of any infringement or
alleged infringement of any Intellectual Property Rights in
connection with the Owner's Scope. The Contractor shall, at the
Owner's request, assist the Owner in conducting any proceedings
or claim, and shall be reimbursed by the Owner for all expenses
incurred in doing so.
ART. 23 SUSPENSION
SECTION 23.1. The Owner may, by written notice to the Contractor, order the
Contractor to suspend performance of any or all of its
obligations under the Contract. Such notice shall specify the
obligations as to which performance is to be
Contract Page 92(94)
suspended, the commencement date of the suspension and the
reasons therefor. The Contractor shall thereupon suspend
performance of such obligation (except those obligations
necessary for the care or preservation of the Works) until
ordered in writing to resume such performance by the Owner.
If, by virtue of a suspension order given by the Owner, other
than by reason of the Contractor's default or breach of the
Contract, the Contractor's performance of any of its obligations
is suspended for an aggregate period of more than one hundred
fifty (150) Days, then at any time thereafter and provided that
at that time such performance is still suspended, the Contractor
may give a notice to the Owner requiring that the Owner shall,
within thirty (30) Days of receipt of the notice, order the
resumption of such performance or request and subsequently order
a Change in accordance with Article 12 excluding the performance
of the suspended obligation from the Contract. If the Owner fails
to do so within such period, the Contractor may, by a further
notice to the Owner, elect to treat the suspension as termination
of the Contract under Article 24.
SECTION 23.2. If (i) the Owner has failed to pay any approved invoice under the
Contract within the fourteen (14) Days after the expiry of the
thirty (30) Day period provided in Section 9.3, (ii) the Owner
has failed to approve any invoice or supporting document without
just cause pursuant to Section 9.2 within thirty (30) Days after
notice to the Owner that the Contractor considers the Owner's
failure to be without just cause or (iii) an event of default has
occurred under one or more loan agreements to which the Owner is
a party and the Owner's creditors thereunder have accelerated the
debt under such loan agreements, and within sixty (60) Days after
such acceleration suitable payment assurances reasonably
satisfactory to the Contractor have not been provided to the
Contractor, then the Contractor may, in each case by sixteen (16)
Days' notice to the Owner, suspend performance of all or any of
its obligations under the Contract, or reduce the rate of
progress until the Owner has remedied its failure. In the case of
a claim by the Contractor that the
Contract Page 93(95)
Owner has failed to approve an invoice or supporting documents
without just cause, the Owner shall be entitled to prevent such
suspension of performance by providing to the Contractor security
for the payment of the amounts in dispute in the form of a
deposit or a standby bank guarantee (which bank guarantee shall
not be first demand but shall otherwise be generally consistent
with the tenor of the bank guarantees to be provided under
Section 10.1).
SECTION 23.3. If the Contractor's performance of its obligations is suspended
or the rate of progress is reduced pursuant to this Section 23
(other than by reason of a Contractor default or breach of the
Contract), then the Time Schedule shall be extended accordingly
pursuant to Section 8.9, and any and all additional costs or
expenses incurred by the Contractor as a result of such
suspension or reduction shall be paid by the Owner to the
Contractor in addition to the Contract Price pursuant to Section
9.8, except in the case of suspension or reduction in the rate of
progress by reason of the Contractor's default or breach of the
Contract.
SECTION 23.4. During the period of suspension, the Contractor shall not be
entitled to payment of the Contract Price otherwise payable
during the period of such suspension (other than previously
approved invoices that are payable during such period). Upon
resumption by the Contractor of all activities affected by a
suspension, the Owner shall resume payments of the Contract Price
with adjusted payment dates. During any suspension, the
Contractor shall not remove from the Site any Materials or
equipment, any part of the Works or any Contractor's Equipment
without the prior written consent of the Owner and shall, unless
otherwise instructed by Owner, cover up and continue to preserve
the Works.
ART. 24 TERMINATION
SECTION 24.1. TERMINATION BY OWNER FOR CONTRACTOR'S DEFAULT
Contract Page 94(96)
24.1.1. The Owner, without prejudice to any other rights or remedies it
may possess under this Contract, may terminate the Contract
forthwith in the following circumstances by giving a notice of
termination to the Contractor referring to the relevant provision
of this Section 24.1.1 and stating the nature of the default:
(a) if the Contractor becomes bankrupt or insolvent, has a
receiving order issued against it, compounds with its
creditors, or, being a corporation, a resolution is passed
or order is made for its winding up (other than a
voluntary liquidation for the purposes of amalgamation or
reconstruction), a receiver is appointed over any part of
its undertaking or assets, or if the Contractor takes or
suffers any other analogous action in consequence of debt;
or
(b) if the Contractor assigns or transfers the Contract in
violation of the provisions of the Contract.
24.1.2. If:
(a) the Contractor has abandoned or repudiated the Contract;
or
(b) the Contractor has without valid reason failed to commence
the Works promptly or has suspended or materially reduced
(other than pursuant to Section 23.2 hereof) the progress
of the Works for more than twenty-eight (28) Days after
receiving a written instruction from the Owner to proceed;
or
(c) the Contractor fails to perform or observe any of its
material obligations under the Contract and such failure
continues for more than thirty (30) Days after notice of
same;
(d) the workaround plan prepared pursuant to Section 8.11
indicates that Acceptance will occur more than four (4)
Months after the Scheduled Acceptance Date; or
Contract Page 95(97)
(e) the Contractor fails to achieve Acceptance (including
achievement of the Minimum Performance Requirements and,
if applicable, taking corrective action or payment of
applicable liquidated damages for failure to fulfill the
Performance Requirements in accordance with Section 21.2)
prior to such time as the Contractor has incurred
liquidated damages for delay equal to the maximum amount
permitted under Section 21.1; or
(f) the Independent Engineer's reasonable projections show
that the Contractor will fail to achieve Acceptance by the
time when the maximum liquidated damages for delay will be
applicable.
then the Owner may, without prejudice to any other rights it may
possess under the Contract, give a notice to the Contractor
stating the nature of the default and requiring the Contractor to
remedy the same. If the Contractor fails to remedy or, in the
case of clauses (b) and (c) take all necessary and appropriate
steps to remedy the same within fourteen (14) Days of its receipt
of such notice, then the Owner may terminate the Contract
forthwith by giving a notice of termination to the Contractor
which refers to this Section 24.1.2.
24.1.3. Upon receipt of the notice of termination under Section 24.1.1 or
Section 24.1.2 above, the Contractor shall either immediately or
upon such date as is specified in the notice of termination:
(a) cease all further work, except for such work as the Owner
may specify in the notice of termination for the sole
purpose of protecting that part of the Works already
executed, or any work required to leave the Site in a
clean and safe condition; and
(b) terminate all subcontracts, except those to be assigned to
the Owner pursuant to paragraph (d) below; and
(c) upon the Owner's request deliver to the Owner the parts of
the Works executed by the Contractor up to the date of
termination; and
Contract Page 96(98)
(d) as may be required by the Owner, to the extent legally
possible, assign to the Owner all right, title and benefit
of the Contractor to the Works, in any subcontracts
concluded between the Contractor and the Contractors
Suppliers and any warranties relating thereto, and provide
a power of attorney in form satisfactory to the Owner to
enforce such rights; and
(e) deliver to the Owner all non-proprietary detail and
conceptual drawings, specifications and other documents
prepared in connection with the Works by, and assign all
Intellectual Property Rights arising in connection with
the Works from, the Contractor or any Contractor's
Supplier as at the date of termination.
24.1.4. In the case of termination pursuant to Section 24.1.1 or 24.1.2,
the Owner may enter upon the Site, expel the Contractor, and
complete the Works itself or by employing any third party. The
Owner may, to the exclusion of any right of the Contractor over
the same, take over and use with the payment of a fair rental
rate (which shall take account of wear and tear) to the
Contractor, with all maintenance costs to the account of the
Owner and with an indemnification by the Owner for all liability
including damage or injury to persons arising out of the Owner's
use of such equipment, any Contractor's Equipment on the Site in
connection with the Works for such reasonable period as the Owner
considers expedient for the completion of the Works.
Upon Acceptance of the Works or at such earlier date as the Owner
thinks appropriate, the Owner shall give a notice to the
Contractor that such Contractor's Equipment will be returned to
the Contractor at or near the Site and shall return such
Contractors Equipment to the Contractor in accordance with such
notice. The Contractor shall thereafter without delay and at its
cost remove or arrange removal of the same from the Site.
24.1.5. Subject to Section 24.1.6 below, the Contractor shall be entitled
to be paid (after the calculations required by Section 24.1.6 are
completed) the Contract
Contract Page 97(99)
Price attributable to the Works executed as at the date of
termination, the value of any unused or partially used Works on
the Site, and the costs, if any, incurred in protecting the Works
and in leaving the Site in a clean and safe condition pursuant to
paragraph (a) of Section 24.1.3 above. Any sums due to the Owner
from the Contractor accruing prior to the date of termination
shall be deducted from the amount to be paid to the Contractor
under this Contract and/or may be drawn from the payment or
performance security.
24.1.6. If the Owner completes the Works, the costs of completing the
Works shall be determined by reference to the costs and expenses
that were reasonably incurred by the Owner as a consequence of
the Contractor's failure to perform its obligations in accordance
with the Contract.
If the sum which the Contractor is entitled to be paid pursuant
to Section 24.1.5 above, plus the costs incurred by the Owner in
completing the Works, exceeds the Contract Price, such excess
(together with any applicable liquidated damages) shall be offset
against any amount payable to the Contractor pursuant to Section
24.1.5 and the Contractor shall pay any balance to the Owner
together with any applicable liquidated damages. For such
purpose, the Owner may call upon any payment or performance
security issued in respect of the Contractor's obligations.
SECTION 24.2. TERMINATION BY CONTRACTOR FOR OWNER'S DEFAULT
24.2.1. The Contractor may terminate the Contract, upon ten (10) Days'
prior notice to the Owner, in the following circumstances by
giving a notice of termination and its reasons therefor to the
Owner referring to the relevant provision of this Section 24.2.1
and stating the nature of the default.
(a) if the Owner becomes bankrupt or insolvent, has a
receiving order issued against it, compounds with its
creditors, or, being a corporation, if a resolution is
passed or order is made for its winding up (other than a
voluntary liquidation for the purposes of amalgamation or
Contract Page 98(100)
reconstruction), or a receiver is appointed over any part
of its undertaking or assets, or if the Owner takes or
suffers any analogous action in consequence of debt; or
(b) if the Owner assigns or transfers the Contract in
violation of the provisions of the Contract.
24.2.2. If:
(a) the Owner fails to perform or observe any of its other
material obligations under the Contract and such failure
continues for more than one hundred twenty (120) Days
after notice of the same, or
(b) the Contractor has rightfully suspended performance under
the Contract pursuant to Section 23.2,
then the Contractor may give a notice to the Owner of its intent
to terminate the Contract, and if the Owner has failed to remedy
the occurrence within thirty (30) Days of such notice, or if the
Contractor is still unable to carry out such obligations under
the Contract for reasons attributable to the Owner within thirty
(30) Days of such notice, the Contractor may by a further notice
to the Owner referring to this Section 24.2.2, forthwith
terminate the Contract.
24.2.3. If the Contract is terminated under Section 24.2.1 or 24.2.2
above, then the Contractor shall have the obligation to take
actions in order to minimize the costs and immediately:
(a) cease all further work, except for such work as the Owner
may specify in the notice of termination for the sole
purpose of protecting that part of the Works already
executed, or any work required to leave the Site in a
clean and safe condition; and
(b) terminate all subcontracts; and
Contract Page 99(101)
(c) upon the Owner's request, deliver to the Owner the parts
of the Works executed by the Contractor up to the date of
termination; and
(d) subject to payment of any amounts due under Section
24.2.4, deliver to the Owner all non-proprietary detail
and conceptual drawings, specifications and other
documents prepared in connection with the Works by, and
assign all Intellectual Property Rights arising in
connection with the Works from, the Contractor or any
Contractor's Supplier as at the date of termination; and
(e) remove all Contractor's Equipment from the Site and
repatriate the Contractor's and Contractor's Suppliers'
personnel from the Site.
24.2.4. If the Contract is terminated under Section 24.2.1 or Section
24.2.2 above, the Owner shall pay to the Contractor as its
exclusive remedy:
(a) the Contract Price properly attributable to the parts of
the Works executed by the Contractor as at the date of
termination; and
(b) the costs reasonably incurred by the Contractor in the
withdrawal of the Contractor's and Contractor's Suppliers'
personnel; and
(c) amounts due to be paid by the Contractor to Contractor's
Suppliers in connection with the termination of any
subcontracts, including cancellation charges; and
(d) costs incurred by the Contractor in protecting the Plant
and leaving the Site in a clean and safe condition
pursuant to paragraph (a) of Section 24.2.3 above; and
(e) the costs of satisfying other due obligations, commitments
and claims that the Contractor has reasonably and in good
faith undertaken with third parties in accordance with the
Contract that are not covered by paragraphs (a) through
(d) above.
Contract Page 100(102)
TERMINATION IN EVENT OF FAILURE TO ACHIEVE COMMENCEMENT DATE
SECTION 24.3. In the event the conditions to the Commencement Date are not
satisfied (or waived) for any reason on or prior to September 9,
2002, either the Owner or the Contractor may terminate this
Contract upon notice to the other without any further cost or
obligation.
TERMINATION BY OWNER FOR CONVENIENCE
SECTION 24.4. The Owner may terminate this Contract for its convenience at any
time and without cause upon giving not less than sixty (60) Days'
prior notice to the Contractor. If the Contract is terminated
under this Section 24.4, the Owner shall be obligated to pay to
the Contractor the amounts specified in clauses (a) through (e)
of Section 24.2.4 plus an amount equal to fifty percent (50%) of
the agreed margin on the portion of the Works not yet performed
(determined by proration of the agreed margin specified in the
EPC Price Calculation, based on the ratio of the amount of the
Contract Price remaining unpaid (after taking into account the
amount specified in Section 24.2.4(a)) to the total Contact
Price).
CALCULATIONS
SECTION 24.5. In this Article 24, the expression "Works executed" shall include
all work executed, services provided, all Works, Materials and
equipment acquired (or subject to a legally binding obligation to
purchase) by the Contractor where title has passed to the Owner,
and used or intended to be used for the purpose of the Plant, up
to and including the date of termination; provided that the Owner
shall not be obligated to pay for any Materials or equipment
pursuant to this Article 24 until such Materials and equipment
are delivered to the Site.
SECTION 24.6. In this Article 24, in calculating any monies due from the Owner
to the Contractor, account shall be taken of any sum previously
paid by the Owner
Contract Page 101(103)
to the Contractor under the Contract, including any advance
payment paid pursuant to Article 9 of the Contract.
ART. 25 CONTRACTORS' SUPPLIERS
SECTION 25.1. The Contractor is responsible for ensuring that all Contractor's
Suppliers engaged by it are bound by conditions substantially
similar to those which apply to the Contractor in this Contract.
Notwithstanding any approval by the Owner of any Contractor's
Supplier (including any Key Supplier), the Contractor shall be
responsible for and warrant the work and services of all
Contractor's Suppliers as if performed by the Contractor; and any
such approval by the Owner shall not relieve the Contractor of
any of its duties, responsibilities, obligations, Warranties or
liabilities under this Contract.
SECTION 25.2. The Contractor shall not subcontract the whole of the Works. The
Contractor may use only suppliers pre-qualified in Appendix 3,
Ex. 10. All Contractor's Suppliers shall hold any licenses
required for them to perform the subcontracted work. With respect
to the Key Suppliers, the Contractor shall use the suppliers and
equipment designated by the Owner with the consent of the
Contractor, which consent shall not be unreasonably withheld, and
the Owner shall have the right to review and approve the
specifications, including performance and availability guarantees
and other technical portions of the contracts with such Key
Suppliers. In the event that the Contractor wishes to use other
Key Suppliers, the Owner's prior consent shall be required, which
shall not be unreasonably withheld, and appropriate modifications
shall be made to Appendix 3 to conform to the subcontracts with
such Key Suppliers, provided that in no event shall the
applicable technical specifications and performance requirements
be reduced below those currently in Appendix 3. To the extent
that any availability guarantees are contained in Appendix 3,
Ex. 3.7, the Contractor shall ensure that the same availability
guarantees are contained in its subcontracts with the relevant
Key Suppliers.
Contract Page 102(104)
SECTION 25.3. No subcontract or purchase order shall bind or purport to bind
the Owner but all subcontracts shall contain a provision
permitting assignment thereof and all warranties contained
therein to the Owner upon the Owner's written request as provided
in the Contract, provided that any security for payments to the
Contractor's Supplier under the assigned subcontract is not
adversely affected by such assignment. The Contractor shall
furnish the Owner with such information relative to the
Contractor's Suppliers as the Owner may reasonably request. Upon
termination of this Contract, the Contractor shall deliver to the
Owner a copy of each subcontract with respect to which the Owner
has a right of assignment from the Contractor, including the
price payable thereunder so that the Owner can decide whether or
not to exercise its right of assignment.
SECTION 25.4. The Contractor shall include in all subcontracts a prohibition on
assignment or subcontracting of the entire obligation by any
Contractor's Supplier of its obligations under its respective
subcontract.
SECTION 25.5. The Contractor's contracts with each Contractor's Suppliers shall
include an initial supply of Major Capital Spares. The Contractor
will secure the undertaking from Key Suppliers to provide the
ability to supply Major Capital Spares and any other spare parts
that are not readily available from other vendors as a standard
product for a period of at least ten (10) years from Acceptance.
In the case of data processing equipment the same period of time
as above shall apply, but instead of "spare parts", "spare parts
or replacement unit or repair of such part or unit" shall apply.
Should a Contractor's Supplier's business be discontinued, the
Contractor shall provide design drawings and other necessary
manufacturing documentation to the Owner and procure the right
for the Owner to use such documentation for manufacturing the
parts in question without hindrance of patents, registered
designs or other industrial property rights, whereupon the
Contractor shall be released from its obligations under the
second sentence of this Section 25.5 in respect of such spare
parts.
Contract Page 103(105)
Upon expiry of the Defects Liability Period, the Contractor shall
validly assign to the Owner such Contractor's Supplier's
warranties as remain in effect at that time.
SECTION 25.6. PAYMENT OF CONTRACTOR'S SUPPLIERS; RELEASE OF LIENS;
ERFULLUNGSGEHILFEN. Contractor's Suppliers shall be deemed
persons employed by the Contractor in the performance of its
obligations (ERFULLUNGSGEHILFEN) within the meaning of
Section 278 BGB. The Contractor shall pay promptly for all its
labor, equipment, subcontracts and other materials and supplies
used in connection with the Works. If any liens are filed against
the Plant or the Site in respect of the Works, the Contractor
shall immediately either (i) pay the amount in question or (ii)
cause the release of such liens by arranging for the issuance of
bonds or other reasonably satisfactory security.
SECTION 25.7. NO PAYMENTS BY SUPPLIERS. The Contractor shall not, directly or
indirectly, receive or accept any payments from any suppliers
(other than as provided in the relevant subcontract) in
connection with or related to the Works except as may be approved
in writing by the Owner. The Contractor shall not, without the
prior written consent of the Owner, reduce the scope of work of
any Key Supplier. The Contractor shall not offset against
payments otherwise due to any Supplier, if such offset could
jeopardize the performance of such Contractor's Supplier's
obligations relating to this Contract.
SECTION 25.8. ASSIGNMENT OF WARRANTY CLAIMS. (a) The Contractor hereby makes
the Owner an irrevocable and indefinite offer to assign all
warranty claims (including availability guarantees) against Key
Suppliers. The Owner shall have the right to accept this offer as
a whole or with regard to (i) individual Contractor's Suppliers
or (ii) performance guarantees with respect to any Contractor's
Supplier, by notice to the Contractor. To the extent that the
Owner accepts the offer of assignment of warranty claims (but not
in the case of the assignment of the availability guarantees as
provided in paragraph (b)) with respect to a Contractor's
Supplier, the Contractor's warranty obligation
Contract Page 104(106)
with respect to such Contractor's Supplier's scope of work shall
be extinguished but the Contractor's warranty obligation with
regard to all warranty claims which are not assigned shall remain
unaffected.
(b) Promptly after Acceptance, the Contractor shall assign to the
Owner the availability guarantees by the relevant Key Suppliers
under their subcontracts. The valid assignment of such rights by
the Contractor will satisfy the Contractor's obligations in
respect of the corresponding availability guarantees in
Appendix 3, Ex. 3.7.
(c) In case of assignment of any warranty or performance guaranty
obligation (including availability guarantees), the Contractor
shall support the Owner in enforcing the warranty and shall
supply the Owner promptly upon request with all necessary
documents and information.
ART. 26 FORCE MAJEURE
SECTION 26.1. EVENTS OF FORCE MAJEURE. An "Event of Force Majeure" shall mean
any circumstance not within the reasonable control, directly or
indirectly, of the Party affected, but only if and to the extent
that (i) such circumstance, despite the exercise of reasonable
diligence, cannot be or be caused to be prevented, avoided or
removed by such Party, (ii) such event or series of the same or
different events materially adversely affects the ability of the
Party affected to perform its obligations under this Contract,
and such Party has taken all reasonable precautions, due care,
and reasonable alternative measures in order to avoid the effect
of such event on such Party's ability to perform its obligations
under this Contract and to mitigate the consequences thereof,
(iii) such event is not the result of the failure of such Party
to perform any of its obligations under this Contract.
SECTION 26.2. "Force Majeure" shall, subject to Section 26.1, include the
following:
(a) war, hostilities or warlike operations (whether a state of
war be declared or not), invasion, act of foreign enemy;
Contract Page 105(107)
(b) ionizing radiation, or contamination by radioactivity from
any nuclear fuel, or from any nuclear waste from the
combustion of nuclear fuel, radioactive toxic explosive or
other hazardous properties of any explosive nuclear
assembly or nuclear component thereof, but not including
goods and material such as measuring, monitoring and
testing devices, that use low levels of radiation, in each
case from a source outside of the Site;
(c) rebellion, revolution, insurrection, mutiny, usurpation of
civil or military government or civil war, or any, riot,
civil commotion or terrorist acts;
(d) confiscation, nationalization, mobilization, commandeering
or requisition by or under the order of any government or
de jure or de facto authority or ruler or any other act or
failure to act of any local state or national government
authority;
(e) strikes, lock outs or other industrial actions (in each
case that are national, regional or sector-wide),
sabotage, embargo, shipwreck, epidemics, quarantine;
(f) earthquake, landslide, volcanic activity, fire, flood or
inundation, tidal wave, typhoon or cyclone, hurricane,
storm, lightning, nuclear waves and pressure waves caused
by aircraft or other aerial devices travelling at sonic or
supersonic speeds, or other natural or physical disaster;
(g) shortage of labor, materials or shortage or restriction of
utilities where caused by circumstances that are
themselves Force Majeure.
SECTION 26.3. The following shall in no event be considered an Event of Force
Majeure:
(i) late performance by the Contractor caused by the acts or
omissions of subcontractors or Contractor's Suppliers
(other than acts or omissions caused by an Event of Force
Majeure), by the Contractor's failure to
Contract Page 106(108)
hire an adequate number of personnel or labor or by
inefficiencies on the part of the Contractor;
(ii) delays resulting from reasonably foreseeable unfavorable
weather or sea conditions or other similarly reasonably
foreseeable adverse conditions;
(iii) delays resulting from ground or soil conditions at the
Site or from ground conditions at other sites where Work
is being performed or parts of the Works are stored or
maintained;
(iv) economic hardship of the Contractor or any of its
affiliates or its or their inability to pay debts;
(v) the late payment by the Owner or the Contractor of money
when otherwise due in accordance with the Contract;
(vi) infringements by the Contractor or any of the Contractor's
Suppliers or their affiliates of any Intellectual Property
Rights; and
(vii) delays resulting from late submission of documents and/or
drawings to either the Independent Engineer or the Owner
which does not afford the Independent Engineer and/or the
Owner with sufficient time to review, approve or make a
judgment on their content (unless such delays are caused
by circumstances that are themselves Force Majeure, in
which case such delays shall also be considered Force
Majeure).
(viii) delays relating from strikes, lockouts or other industrial
action which relate to any dispute between the Contractor,
its affiliates or any Contractor's Supplier and their
respective directors, officers, employees or agents.
In the event that the Works or any part thereof are damaged
pursuant to an Event of Force Majeure which is covered by
insurance, and provided the
Contract Page 107(109)
insurance policy provides coverage for such event in accordance
with the insurance required under Article 14, the Contractor
shall make good such loss and damage at its own expense insofar
as such loss and damage exceeds the amount of insurance proceeds,
unless the Banks elect not to make the insurance proceeds
available to the Contractor for such purpose and the Contractor
is released pursuant to Section 13.2.
SECTION 26.4. If either Party is prevented or delayed from or in performing any
of its obligations under the Contract by an Event of Force
Majeure, then it shall promptly (and in any event within fourteen
(14) Days) after the occurrence of such event notify the other
Party in writing of the occurrence of such event, the
circumstances thereof and the measures it is taking to avoid the
effects or mitigate the consequences thereof. Within a reasonable
time following the date of termination of such Force Majeure, the
Party having invoked such Force Majeure as a cause for such delay
shall submit to the other Party reasonable proof of the nature of
such delay, its effect upon the time of performance and the
actions being taken to comply with clause (ii) of Section 26.1.
The Parties shall thereupon consult with one another concerning
the effect of such delay upon the Detailed Program and Time
Schedule and the Time Schedule shall be equitably adjusted by the
Parties in accordance with Section 8.9 to take into account such
effect and the ability of the Contractor to reschedule project
activities to avoid or minimize overall delays resulting from the
Event of Force Majeure. Both Parties shall use their best efforts
to prevent and reduce to a minimum and mitigate the effect of any
delay occasioned by any Force Majeure and to fulfil its
obligations under the Contract, including recourse to alternate
acceptable sources of services, equipment, Materials, or
Contractor's Equipment. In case such mitigating actions or costs
associated with the reinstatement of performance have any impact
on the cost, the provisions of Section 9.8 shall apply and the
Parties shall consider them as Changes and treat them
accordingly, but without prejudice to either Party's right to
terminate the Contract pursuant to Section 26.7.
Contract Page 108(109)
SECTION 26.5. The Party affected by an Event of Force Majeure shall be excused
from the performance or punctual performance of its obligations
under the Contract for so long as the relevant event of Force
Majeure continues and to the extent that such Party's performance
is prevented, hindered or delayed. The Time Schedule shall be
extended accordingly, provided that the Party has provided prompt
notice of such delay in accordance with Section 26.4 and all
efforts to mitigate the effects as per Section 26.4 above have
been exhausted.
SECTION 26.6. No delay or non-performance by either Party hereto caused by the
occurrence of any event of Force Majeure shall:
(a) constitute a default under or breach of the Contract; or
(b) give rise to any claim for damages or, except as provided
in Section 26.4, additional cost or expense occasioned
thereby, by either Party.
SECTION 26.7. If the performance of the Contract is substantially prevented or
delayed for a continuous period of more than two hundred thirty
(230) Days on account of one or more events of Force Majeure, the
Parties will attempt to develop a mutually satisfactory solution,
including an appropriate Change Order to reflect any increased
costs, failing which either Party may terminate the Contract by
giving a notice to the other, but without prejudice to either
Party's right to terminate the Contract under Article 24.
SECTION 26.8. In the event of termination pursuant to Section 26.7 above, the
rights and obligations of the Parties shall be as specified in
Sections 24.1.3 and 24.1.5 (but without including the cross
reference to Section 24.1.6).
ART. 27 COPYRIGHT AND CONFIDENTIALITY
SECTION 27.1. Subject to Section 27.2, the copyright in all drawings, documents
and other materials containing data and information furnished to
one Party by the other Party shall remain vested in the supplying
Party, or if they are furnished by any third party, directly or
indirectly, including suppliers of Materials and
Contract Page 109(111)
equipment, the copyright in such materials shall remain vested in
such third party.
CONFIDENTIAL INFORMATION
SECTION 27.2. The Owner and the Contractor shall keep confidential and shall
not, without the written consent of the other party hereto,
divulge to any third party or use, other than on behalf of the
other party hereto, any Confidential Information. To the extent
possible, Confidential Information shall be stamped or labeled
"Confidential" or if designated orally as Confidential
Information, such indication shall be confirmed in writing within
thirty (30) Days. Notwithstanding the foregoing, all financial
information (including the financial model) provided to or
otherwise obtained by a Party shall be Confidential Information.
Notwithstanding the above, the Contractor may furnish to its
Contractor's Suppliers Confidential Information to the extent
required for the Contractor's Suppliers to perform its/their work
under the Contract, and the Owner may furnish Confidential
Information to the Banks in connection with the financing of the
Plant. If disclosure to a third party is authorized or disclosure
to the Banks or the Contractor's Suppliers is made under this
Section 27.2, the Contractor or the Owner, as applicable, shall
obtain from such third party, Contractor's Supplier or Banks, as
applicable, a confidentiality undertaking containing terms and
conditions identical to this Section 27.2 contains.
SECTION 27.3. The Owner shall not use Confidential Information for any purpose
other than the management, operation, maintenance, rebuild and
capacity increase, production optimization, authority inspection
and divestment of the Plant and in case of termination, for the
completion of the Plant. In such case, any third party involved
by the Owner for any of the above purposes shall be bound by a
similar confidentiality obligation. Similarly, the Contractor
shall not use Confidential Information for any purpose other than
the design, procurement
Contract Page 110(112)
of the Works, construction or such other work and services as are
required for the performance of the Contract.
SECTION 27.4. The obligation of a Party under Section 27.2 and 27.3 above,
however, shall not apply to that information which:
(a) now or hereafter enters the public domain through no fault
of that Party; or
(b) can be proven to have been possessed by that Party at the
time of disclosure, either without limitation on
disclosure to others or which subsequently becomes free of
such limitation, and which was not previously obtained,
directly or indirectly, from the other Party hereto; or
(c) belongs to the other Party and lawfully becomes available
to the Party from a third party that has no obligation of
confidentiality to the other Party;
(d) is required by the Banks and/or is required by any
Relevant Authorities in connection with the Plant, in
which case the other Party shall be informed prior to such
disclosure so that precautions with respect to proprietary
information may be taken; or
SECTION 27.5. Each of the Contractor and the Owner represent to the other that
it has a policy and procedure designed to protect trade secret
rights and its own proprietary information including notices to
its employees to prevent unauthorized publication and disclosure
of such information. The Contractor and the Owner respectively
agree that Confidential Information shall be subject to such
policy and procedure.
SECTION 27.6. Each party hereto agrees to safeguard any documents which the
other party may supply to it hereunder. The Contractor may make
copies of such documents only to the extent necessary for the
performance of the Works.
Contract Page 111(113)
Upon the expiry of the Defects Liability Period, the Contractor
shall return to the Owner all documents supplied by the Owner and
destroy all copies thereof. Should the Contractor, however,
desire to retain certain documents and receives the Owner's
written approval therefor, the Contractor shall treat said
documents as it does Confidential Information.
SECTION 27.7. The Contractor also agrees to enter into confidentiality
agreements with third parties upon the Owner's request and to
keep in force confidentiality agreements concerning third
parties' proprietary information, which agreements shall permit
the Contractor to use such parties' proprietary information in
the Works.
SECTION 27.8. The Contractor agrees to disclose or cause to be disclosed
promptly to the Owner all inventions which the Contractor, or any
officer, director, employee, servant or agent of the Contractor
or any Affiliated Supplier may make which are wholly or in part
based upon or derived from information proprietary to the Owner.
All right, title and interest in and to such inventions shall
belong to the Owner or its designee. The Contractor agrees to
execute or cause to be executed all documents and perform or
cause to be performed other lawful acts which the Owner may deem
desirable or necessary to perfect its or its designee's title
thereto and to obtain and maintain or cause to be obtained and
maintained patent coverage thereon, provided that the Contractor
may condition its compliance with any such request on the Owner's
agreement to reimburse the Contractor for all reasonable expenses
incurred in connection therewith. "Affiliated Supplier" means any
Contractor's Supplier that controls, is controlled by, or is
under common control with, the Contractor. For purposes hereof,
control of any entity shall be determined by the beneficial
ownership of at least fifty percent (50%) in voting power of the
equity interest in such entity.
Contract Page 112(114)
SECTION 27.9. The above provisions of this Section 27 shall not in any way
modify any undertaking of confidentiality given by either of the
Parties hereto prior to the date of the Contract in respect of
the Plant or any part thereof.
SECTION 27.10. The provisions of this Section 27 shall survive Acceptance and
termination of the Contract for whatever reason for a period of
ten (10) years.
ART. 28 GOVERNING LAW; DISPUTES
SECTION 28.1. The Parties are obliged to do their utmost to settle any arising
dispute in good faith. If this is not possible Articles 28.2 and
28.3 shall apply.
SECTION 28.2. This Contract shall be governed by, and disputes shall be judged
and settled in accordance with German law, excluding, however,
the Vienna Convention of "April 1980" named "Convention of
Contracts for the International Sale of Goods".
SECTION 28.3. Any dispute arising out of or in connection with the Contract
shall be finally and exclusively settled by arbitration pursuant
to the "DEUTSCHE INSTITUTION FUR SCHIEDSGERICHTSBARKEIT". The
venue of arbitration proceedings shall be Berlin. The language to
be used in arbitration proceedings shall be English.
ART. 29 INDEMNITY OBLIGATIONS
CONTRACTOR'S INDEMNITY OBLIGATIONS
SECTION 29.1. (a) The Contractor shall indemnify and hold harmless the Owner
and its employees and officers from and against any and
all suits, actions or administrative proceedings, claims,
demands, losses, damages, costs and expenses of whatsoever
nature, including attorneys fees and expenses, for injury
to, or sickness, disease or death of, any persons
(including employees of the Contractor and the
Contractor's Suppliers) and for loss of or damage to the
property of third parties which directly or indirectly
arise out of or result from any negligent, illegal,
reckless or tortious act or omission of the Contractor or
any Contractor's Supplier
Contract Page 113(115)
or anyone directly or indirectly employed by any of them,
or anyone for whose acts such person may be liable in
connection with activities under the Contract.
(b) The Contractor shall indemnify and hold harmless the Owner
and its employees and officers from and against any and
all suits, actions or administrative proceedings, claims,
losses, and damages by the Relevant Authorities or any
third party asserting rights under or by virtue of the
relevant Law, and costs and expenses of whatever nature
whatsoever relating thereto, including attorneys fees and
expenses and any fines or penalties imposed by Relevant
Authorities, which directly or indirectly arise out of or
result from any violation of Law (including Permits) by
the Contractor in connection with its activities under
this Contract.
OWNER'S INDEMNITY OBLIGATIONS
SECTION 29.2. (a) The Owner shall indemnify and hold harmless the Contractor
and its employees and officers from and against any and
all suits, actions or administrative proceedings, claims,
demands, losses, damages, costs and expenses of whatsoever
nature, including attorneys fees and expenses, for injury
to, sickness, disease or death of, any persons (including
employees of the Owner) and for loss of or damage to the
property of third parties which directly or indirectly
arise out of or result from any negligent, illegal,
reckless or tortious act or omission of the Owner or any
of the Owner's subcontractors (other than the Contractor)
or anyone directly or indirectly employed by any of them,
or anyone for whose acts such person may be liable in
connection with activities under the Contract.
(b) The Owner shall indemnify and hold harmless the Contractor
and its employees and officers from and against any and
all suits, actions or administrative proceedings, claims,
losses and damages by the
Contract Page 114(116)
Relevant Authorities or any third party asserting rights
under or by virtue of the relevant Law, and costs and
expenses of whatever nature whatsoever relating thereto,
including attorneys fees and expenses and any fines or
penalties imposed by Relevant Authorities, which directly
or indirectly arise out of or result from any violation of
Law (including Permits) by the Owner in connection with
its activities under this Contract.
SECTION 29.3. If any proceedings are brought or any claim is made arising out
of the matters referred to in Section 29.1 or 29.2 above, the
Party seeking indemnification (the "Indemnified Party") shall
promptly give the other Party (the "Indemnifying Party") a notice
thereof, and the Indemnifying Party shall at its own expense and
in the Indemnified Party's name conduct such proceedings or claim
and any negotiations for the settlement of any such proceedings
or claim.
SECTION 29.4. If the Indemnifying Party fails to notify the Indemnified Party
within twenty-eight (28) Days of receipt of such notice that it
intends to conduct any such proceedings or claim, then the
Indemnified Party shall be free to conduct the same on its own
behalf. Unless the Indemnifying Party has so failed to notify the
Indemnified Party within the twenty-eight (28) Day period, the
Indemnified Party shall make no admission which may be
prejudicial to the defense of any such proceedings or claim.
SECTION 29.5. The Indemnified Party shall, at the Indemnifying Party's request,
assist the Indemnifying Party in conducting such proceedings or
claim, and shall be reimbursed by the Indemnifying Party for all
reasonable expenses incurred.
ART. 30 MISCELLANEOUS
SECTION 30.1. Notwithstanding anything contained to the contrary in this
Contract, except to the extent of the liquidated damages provided
for in this Contract, the Contractor shall in no case be liable
to the Owner for any indirect and/or consequential loss or
damage, including loss of production, loss by reason of Plant
shutdown or inability to operate at a certain capacity, claims of
Contract Page 115(117)
customers or suppliers, capital interest costs and the like. This
limitation of liability shall not apply in the event of willful
misconduct on the part of the Contractor.
SECTION 30.2. The Contractor shall be an independent supplier performing the
Contract. The Contract does not create any agency, partnership,
joint venture or other joint relationship between the Parties
hereto.
SECTION 30.3. Subject to the provisions of the Contract, the Contractor shall
be solely responsible for the manner in which the Contract is
performed. All employees, representatives or Contractor's
Suppliers engaged by the Contractor in connection with the
Performance of the Contract shall be under the complete control
and responsibility of the Contractor and shall not be deemed to
be employees of the Owner, and nothing contained in the Contract
or in any subcontract awarded by the Contractor shall be
construed to create any contractual relationship between any such
employees, representatives or Contractor's Suppliers and the
Owner or relieve the Contractor from any of its obligations
hereunder.
SECTION 30.4. Subject to Section 30.5 below, any relaxation, forbearance, delay
or indulgence by either Party in enforcing any term of this
Contract or the granting of an extension of time by either Party
to the other shall not be considered a waiver of any right
thereafter to insist upon strict adherence to that term or any
other term of this Contract, nor shall any waiver by either Party
of any breach of this Contract operate as waiver of any
subsequent or continuing breach of this Contract.
SECTION 30.5. Any waiver of a Party's rights, powers or remedies under the
Contract must be in writing, must be dated and signed by an
authorized representative of the Party granting such waiver, and
must specify the right and the extent to which it is being
waived.
Contract Page 116(118)
SECTION 30.6. Subject to the payment of any amounts due under Section 24.2.4,
the Contractor shall not be entitled to claim a right of
retention with respect to any plans, drawings, or descriptions,
or, in the event of termination of the Contract, agreements or
contracts, invoices, accounting records or other documents
relating to the Works.
SECTION 30.7. If any provision or condition of the Contract is prohibited or
rendered invalid or unenforceable, such prohibition, invalidity
or unenforceability shall not affect the validity or
enforceability of any other provisions and conditions of the
Contract. In such event the Parties shall, by amendment to this
Contract, properly replace such provision by a reasonable new
provision or provisions which, as far as legally possible, shall
approximate what the Parties intended by such original provision
and the purpose thereof.
The performance criteria and Performance Requirements of the
Contractor provided in Articles 17, 18, 19 and set forth in
Appendix 3 and the warranties set forth in Article 20 shall not
be considered or construed as "GARANTIEN" within the meaning of
Sections 444 and 639 BGB (new version). The Parties recognize
that there is presently some uncertainty as to whether
limitations of liability of the type agreed upon in the Contract
with respect to such performance standards of the Contractor will
be held valid under the terms of the new German Civil Code. In
the event that such limitations of liability are deemed invalid
or the performance standards are deemed to be "GARANTIEN" under
Section 444 or 639 BGB (new version), the Owner agrees not to
claim any rights or assert any claims inconsistent with the
intended limitations on the liability of the Contractor under the
Contract.
Notwithstanding the foregoing, the Parties agree that the Owner
shall not be required to establish fault ("VERSCHULDEN") on the
part of the Contractor in connection with a claim for liquidated
damages or a claim under the warranties contained in Article 20.
Contract Page 117(119)
SECTION 30.8. Unless otherwise stated in the Contract, all notices to be given
under the Contract shall be in writing, and shall be sent by
personal delivery, airmail post, special courier, facsimile or
e-mail to the address of the relevant Party set out herein in
accordance with the following provisions.
SECTION 30.9. Any notice sent by facsimile or e-mail shall be confirmed within
two (2) Business Days after dispatch by notice to be sent by post
or special courier, except as otherwise agreed between the
Parties.
SECTION 30.10. Any notice sent by post or special courier shall be deemed (in
the absence of evidence of earlier receipt) to have been
delivered two (2) Business Days after dispatch. In proving the
fact of dispatch, it shall be sufficient to show that the
envelope containing such notice was properly addressed, stamped
and conveyed to the postal authorities or courier service for
transmission by post or special courier.
SECTION 30.11. Any notice delivered personally or sent by facsimile or e-mail
shall be deemed to have been delivered on the date of its
dispatch.
SECTION 30.12. Either Party may change its postal, facsimile or e-mail address
or addressee for receipt of such notices by ten (10) Days notice
to the other Party in writing.
SECTION 30.13. Notices shall be deemed to include any approvals, consents,
instructions, orders and certificates to be given under the
Contract.
SECTION 30.14. The Contract constitutes the entire Agreement between the Owner
and the Contractor with respect to the subject matter of the
Contract. All previous documents, undertakings and agreements,
whether verbal, written or otherwise, between the Parties
concerning the subject matter hereof are hereby cancelled and
shall not affect or modify any of the terms or obligations set
forth in this Contract. In addition, anything mentioned in the
text of any Appendix and not shown on the drawings made part
thereof or shown on such drawings and not mentioned in such
Appendices shall be of like effect as if shown or mentioned in
both.
Contract Page 118(120)
SECTION 30.15. No amendment or other variation of the Contract shall be
effective unless it is in writing, is dated, expressly refers to
the Contract, and is signed by a duly authorized representative
of each Party hereto.
ART. 31 CONTRACT LANGUAGE
Except as otherwise specifically provided to the contrary, all
documents, notices, waivers and all other communications written
or otherwise between the Owner and the Contractor in connection
with this Contract shall be English. However, the Contractor is
obligated to prepare all documents which are required by the
respective authorities (including for obtaining Permits), as well
as the main technical documents and drawings including manuals
and "as built" drawings, in German. Also, all training and all
training, operation and maintenance manuals and instructions,
signs and manuals shall be in German.
ART. 32 COMMENCEMENT DATE
The Parties shall proceed with the activities under this Contract
when the conditions set forth below have been fulfilled:
- the Contract has been signed by both Parties and the
Direct Agreement has been signed by the parties thereto;
- loan agreements for the construction of the Plant shall
have been executed by the Owner and the Banks and shall be
in full force and effect and all conditions for their
initial drawdown shall have been met or waived, except for
the receipt by the lenders of the Notice of Commencement
Date, which shall be executed and delivered to the Banks
by the Contractor and the Owner concurrently with the
execution and delivery to the Contractor and the Owner of
the Banks' declaration of the satisfaction of the
conditions precedent for initial drawdown under the loan
agreements;
Contract Page 119(121)
- the Permits specified in items 1.1, 2, 3 and 5 of Appendix
3, Ex. 4.4 have been obtained, are not the subject of
pending appeal as of August 22, 2002 and, except as set
forth in paragraph 8 of Appendix 3, Ex 4.4, are not the
subject of pending modifications;
- the bank guarantee as per Section 10.1 hereof has been
received by the Owner and is in full force and effect;
- the Contractor has delivered to the Owner a Parent Company
Guaranty in the form set forth in Appendix 2, Ex. 10;
- an advance payment in an amount equal to five percent (5%)
of the Contract Price has been received by the Contractor;
and
- the Pre-Activity Period specified in the Pre-Activity
Agreement has expired.
The Owner and the Contractor shall advise each other regarding
their progress toward the satisfaction of the foregoing
conditions and, when the conditions are satisfied, shall execute
and deliver a joint notice of Commencement Date substantially in
the form set forth in Appendix 2, Ex. 1 specifying the occurrence
of the Commencement Date.
ART. 33 ASSIGNMENT; TRANSFER
Without written permission from the other Party neither the Owner
nor the Contractor is entitled to assign or transfer the Contract
or any right, interest or obligation therein to a third party,
except in the event of assignments in connection with termination
pursuant to Section 24.1.3(d) and, in the case of the Owner,
assignment of its rights under the Contract to the Banks and
except that, for the purpose of financing the construction of the
Plant, the Owner and the Contractor may assign or create a
security interest over its rights and interests under or pursuant
to this Contract. The Contractor agrees to cooperate with the
Banks and to provide such acknowledgements of any
Contract Page 120(122)
assignment by the Owner to the Banks in such terms as the Banks
may reasonably require. Any actual, attempted or purported sale,
assignment or other transfer by a Party of any of its rights or
obligations or interests in, under or pursuant to this Contract
that does not comply with the terms of this Section 33 shall be
null, void and of no force or effect.
This Contract may be executed in one or more counterparts, each of which when so
executed will be deemed an original, and such counterparts together shall
constitute one and the same instrument.
Frankfurt August 26/02
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/s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx Xxxxxxxx
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/s/ Xxxxxx Xxxxxx /s/ Xxxx Xxxxxxxxx
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Owner Contractor
[RWE SOLUTIONS LOGO]
ZELLSTOFF
XXXXXXX XxxX
XXXXXXXX 0
DIRECT AGREEMENT
XXXXXXXX
CHANGE
PUNDER EXECUTION COPY
DATED August 2002
ZELLSTOFF STENDAL GMBH
and
RWE INDUSTRIE-LOSUNGEN GMBH
and
RWE SOLUTIONS AG
and
BAYERISCHE HYPO-UND VEREINSBANK AG
------------------------------------
CONTRACTOR'S DIRECT AGREEMENT
------------------------------------
CONTENTS
CLAUSE PAGE
1. DEFINITIONS AND INTERPRETATION........................................1
2. CONSENT TO SECURITY...................................................6
3. ACKNOWLEDGEMENT.......................................................6
4. PAYMENT SECURITY......................................................6
5. NOTIFICATION..........................................................7
6. SUSPENSION DEFAULT NOTICE AND SUSPENSION OF PERFORMANCE...............7
7. TERMINATION DEFAULT NOTICE AND TERMINATION............................8
8. STATEMENT OF AMOUNTS DUE.............................................10
9. WARRANTY OF ACCURACY.................................................11
10. STATEMENTS TO BE PRIMA FACIE EVIDENCE................................11
11. SUSPENSION OF WORKS..................................................12
12. STEP-IN NOTICE.......................................................13
13. CONSENT OF THE CONTRACTOR............................................13
14. ASSUMPTION...........................................................14
15. RIGHTS AND OBLIGATIONS ON ASSUMPTION.................................14
16. STEP-OUT.............................................................15
17. NOVATION PROPOSAL....................................................16
18. CONSENT OF THE CONTRACTOR............................................16
19. NOVATION.............................................................16
20. REVIVAL OF REMEDIES..................................................18
21. CONSIDERATION........................................................19
22. GUARANTOR'S CONTINUING OBLIGATIONS...................................19
23. LEGAL AND BINDING OBLIGATIONS........................................20
24. STANDARD OF WORK.....................................................20
25. ACCESS TO SITE AND INFORMATION.......................................20
26. FORCE MAJEURE........................................................20
27. INSURANCE............................................................21
28. RESTRICTIONS ON OWNER'S RIGHTS AND OBLIGATIONS.......................21
29. ASSIGNMENT...........................................................21
30. BENEFIT..............................................................22
31. NO ASSIGNMENT........................................................22
32. NO WAIVER............................................................22
33. COUNTERPARTS.........................................................22
34. NO OTHER CLAIMS......................................................22
35. NO SET-OFF...........................................................22
36. PAYMENT OF MONIES....................................................23
37. CONFIDENTIALITY......................................................23
38. NOTICES..............................................................23
39. GOVERNING LAW........................................................25
SCHEDULE 1 ADDITIONAL OBLIGOR ACCESSION MEMORANDUM............................26
SCHEDULE 2 SUBSTITUTE ACCESSION MEMORANDUM....................................28
THIS AGREEMENT is made on August 2002
BETWEEN
(1) ZELLSTOFF STENDAL GMBH (the "OWNER");
(2) RWE INDUSTRIE-LOSUNGEN GMBH (the "CONTRACTOR");
(3) RWE SOLUTIONS AG (the "GUARANTOR"); and
(4) BAYERISCHE HYPO-UND VEREINSBANK AG (the "SECURITY AGENT", which
expression shall include any trustee for the time being appointed
pursuant to the Security Pooling Agreement).
WHEREAS
(A) The Owner and the Contractor have entered into the Construction
Contract in relation to the Works.
(B) The Guarantor has entered into the Parent Company Guarantee and the
Contractor has procured the Advance Payment, Performance and Defects
Liability Period Guarantees as security for the obligations of the
Contractor under the Construction Contract.
(C) Pursuant to the Finance Documents, the Lenders have agreed to make
financial accommodation available to the Owner for the purpose of
financing the Plant.
(D) It is a condition precedent to the financial accommodation being made
available by the Lenders that this Agreement is executed and delivered
by the parties hereto.
IT IS AGREED as follows:
PART 1
DEFINITIONS AND INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
Except where the context otherwise requires, in this Agreement the
following terms and expressions shall bear the following meanings:
"ADDITIONAL OBLIGOR" shall bear the meaning ascribed thereto in
Clause 12;
1
"ADDITIONAL TERMINATION STANDSTILL PERIOD" shall bear the meaning
ascribed thereto in Clause 7.3;
"ADVANCE PAYMENT, PERFORMANCE AND DEFECTS LIABILITY PERIOD GUARANTEES"
means the bank guarantees provided or to be provided by or on behalf
of the Contractor in favour of the Owner referred to in clause 10.1 of
the Construction Contract and in the forms appearing in appendix 2 of
the Construction Contract (or in such other form as may be agreed by
the parties hereto);
"ASSUMPTION DATE" shall bear the meaning ascribed thereto in
Clause 14;
"CONSTRUCTION CONTRACT" means the agreement dated on or about the date
hereof entered into between the Contractor and the Owner for, inter
alia, the engineering, design, procurement, construction, erection and
start-up of a kraft pulp mill and the training of certain of the
Owner's employees;
"CHANGE ORDERS" shall bear the meaning ascribed thereto in the
Construction Contract;
"DEFAULT NOTICE" means, as the case may be, a Suspension Default
Notice or a Termination Default Notice;
"EFFECTIVE DATE" shall bear the meaning ascribed thereto in Clause 17;
"FACILITY AGREEMENT" means the project financing facility agreement
dated on or about the date hereof made between the Owner, the Security
Agent, Bayerische Hypo-und Vereinsbank AG as original lender and
Bayerische Hypo-und Vereinsbank AG as arranger;
"FINANCE DOCUMENTS" means any agreement entered into with any
Permitted Subsidiary in connection with the financing of the wood
supply or logistics aspects of the Project, the Hedging Agreements,
the Security Agreements, the Shareholders' Undertaking Agreement, the
RWE Solutions AG Guarantee, any agreement regarding Shareholder Loans
and the corresponding subordination declarations, the Stand-By Equity
Security, the Fee Letter, any waiver requests, waivers and other
binding notifications, the Parent Company Guarantee, the Step-in
Rights Agreement between SP Holding, RWE-IN, FAHR and the Agent, the
State Guarantee and any other document in relation to the financing of
the Project (as each of the foregoing terms is defined in the Facility
Agreement), the Advance Payment, Performance and Defects Liability
Period Guarantees, the Facility Agreement and this Agreement;
"FIRST ADDITIONAL SUSPENSION STANDSTILL PERIOD" shall bear the meaning
ascribed thereto in Clause 6.3;
2
"INITIAL SUSPENSION STANDSTILL PERIOD" shall bear the meaning ascribed
thereto in Clause 6.2;
"INITIAL TERMINATION STANDSTILL PERIOD" shall bear the meaning
ascribed thereto in Clause 7.2;
"LENDERS" means the banks or other financial institutions providing
financial accommodation to or at the request of the Owner which is
secured by, inter alia, the Security Document;
"MILESTONES" shall bear the meaning ascribed thereto in the
Construction Contract;
"NOVATION NOTICE" shall bear the meaning ascribed thereto in
Clause 17;
"PARENT COMPANY GUARANTEE" means the guarantee given by the Guarantor
in favour of the Owner in respect of, inter alia, the present and
future obligations of the Contractor to the Owner under the
Construction Contract;
"PETITION" shall bear the meaning ascribed thereto in Clause 6.2;
"PLANT" shall bear the meaning ascribed thereto in the Construction
Contract;
"REVIVAL DATE" shall bear the meaning ascribed thereto in Clause 20;
"SECOND ADDITIONAL SUSPENSION STANDSTILL PERIOD" shall bear the
meaning ascribed thereto in Clause 6.4;
"SECURITY DOCUMENT" means the global assignment agreement dated on or
about the date hereof made between the Owner and the Security Agent.
"SECURITY POOLING AGREEMENT" means the agreement dated on or about the
date hereof made between the Owner, the Security Agent, Bayerische
Hypo- und Vereinsbank AG as original lender and as hedging
counterparty, RWE Industrie-Losungen GmbH, Stendal Pulp Holding GmbH,
Xxxxxx International Inc., AIG Altmark Industrie AG, FAHR
Beteiligungen AG;
"SHAREHOLDERS' UNDERTAKING AGREEMENT" means the agreement dated on or
about the date hereof made between the Owner, Bayerische Hypo- und
Vereinsbank AG (as agent), RWE Industrie-Losungen GmbH, Xxxxxx
International Inc., AIG Altmark Industrie AG, Stendal Pulp Holding
GmbH and FAHR Beteiligungen AG;
"SITE" has the meaning given to it in the Construction Contract;
"STEP-IN NOTICE" shall bear the meaning ascribed thereto in Clause 12;
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"STEP-IN DATE" means the date upon which any Step-in Notice is given
pursuant to Clause 12;
"STEP-IN PERIOD" in relation to an Additional Obligor means the period
from and including the Step-in Date to and including the Step-out Date
relating to such Additional Obligor;
"STEP-OUT DATE" in relation to an Additional Obligor means the date
upon which any notice served by such Additional Obligor pursuant to
Clause 16 expires;
"SUBSTITUTE" shall bear the meaning ascribed thereto in Clause 17;
"SUSPENSION DEFAULT NOTICE" shall bear the meaning ascribed thereto in
Clause 6.2;
"STANDSTILL PERIOD" means the Initial Suspension Standstill Period,
First Additional Suspension Standstill Period, Second Additional
Suspension Standstill Period, Initial Termination Standstill Period
and/or Additional Termination Standstill Period, as the case may be;
"TERMINATION DEFAULT NOTICE" shall bear the meaning ascribed thereto
in Clause 7.2; and
"WORKS" shall bear the meaning ascribed thereto in the Construction
Contract.
1.2 INTERPRETATION
Save where the contrary is indicated, any reference in this Agreement
to:
1.2.1 words importing the singular shall include the plural and vice versa;
1.2.2 any person (including without limitation, an Additional Obligor,
Lender or Substitute) shall be construed so as to include its and any
subsequent successors, transferees and assigns in accordance with
their respective interests;
1.2.3 this Agreement or any other agreement or document shall be construed
as a reference to this Agreement or, as the case may be, such other
agreement or document as the same may have been, or may from time to
time be, amended, varied, novated, replaced or supplemented;
1.2.4 a Clause and a Part shall, respectively, be construed as a reference
to a clause or part to this Agreement; and
1.2.5 the "WINDING-UP", "DISSOLUTION", "ADMINISTRATION", "INSOLVENCY" or
"REORGANISATION" of a company or corporation and references to the
"LIQUIDATOR", "ASSIGNEE", "ADMINISTRATOR", "RECEIVER", "ADMINISTRATIVE
RECEIVER", "MANAGER" or "TRUSTEE" of a company or corporation shall be
4
construed so as to include any equivalent or analogous proceedings or,
as the case may be, insolvency representatives or officers under the
law of the jurisdiction in which such company or corporation is
incorporated or constituted or any jurisdiction in which such company
or corporation or, as the case may be, insolvency representative or
officer carries on business including without limitation, the seeking
of liquidation, winding-up, reorganisation, dissolution,
administration, arrangement, adjustment, protection or relief of
debtors.
1.3 DISCRETIONS
Any discretion exercisable under the terms of this Agreement by any
party hereto shall, unless otherwise provided herein, be exercisable
by such party in its absolute discretion and shall not be
challengeable on grounds that such discretion shall not have been
exercised fairly or reasonably.
1.4 HEADINGS
Headings are for ease of reference only and shall not affect the
construction of this Agreement.
5
PART 2
CONSENT AND ACKNOWLEDGEMENT
2. CONSENT TO SECURITY
The Contractor and the Guarantor hereby consent to the Owner's
assignment by way of security under the Security Document of all its
right, title, benefit and interest under each of the Construction
Contract, the Advance Payment, Performance and Defects Liability
Period Guarantees and the Parent Company Guarantee (provided that the
assignment under the Security Document of the Construction Contract
shall not confer on the Security Agent or the Lenders any rights,
title, benefit and interest greater than those conferred on the Owner
thereunder) and hereby acknowledge receipt of the respective notices
of such assignment.
3. ACKNOWLEDGEMENT
The Contractor and the Guarantor hereby acknowledge that none of the
Security Agent, the Lenders or their respective agents or
representatives accept or assume any liabilities or obligations under
the Construction Contract, the Advance Payment, Performance and
Defects Liability Period Guarantees or the Parent Company Guarantee as
a result of the assignment referred to in Clause 2.
4. PAYMENT SECURITY
The Contractor and Guarantor agree that if at any time the Contractor
requests payment security pursuant to section 648a of the German Civil
Code (as the same may be amended from time to time) any obligations of
the Owner pursuant to such section shall be fulfilled by the Guarantor
in accordance with the terms of the Shareholders Undertaking Agreement
and shall be a full discharge of the Owner's obligations thereunder.
6
PART 3
SUSPENSION OF REMEDIES
5. NOTIFICATION
5.1 The Contractor shall as soon as it becomes aware of any failure of the
Owner to perform its material obligations under the Construction
Contract immediately notify the Security Agent of such failure.
5.2 The Contractor shall provide to the Security Agent immediately (and in
any event within 2 days of the delivery of the relevant notice) a copy
of any notice given to the Owner in respect of any failure by the
Owner to comply with its obligations under the Construction Contract.
6. SUSPENSION DEFAULT NOTICE AND SUSPENSION OF PERFORMANCE
6.1 The Contractor acknowledges that its only rights of suspension under
the Construction Contract are those set out in sections 23.2 and 26.7
of the Construction Contract.
6.2 The Contractor undertakes not to take any step to suspend or reduce
its rate of progress or performance under the Construction Contract or
its employment under the Construction Contract, exercise any other
right it may have whether under the Construction Contract or otherwise
to rescind or terminate the Construction Contract, enforce execution
against any of the assets of the Owner or present any petition for the
administration, dissolution or winding up of the Owner (a "PETITION")
for a period of 30 days (the "INITIAL SUSPENSION STANDSTILL PERIOD")
after actual receipt by the Security Agent of written notice (a
"SUSPENSION DEFAULT NOTICE") specifying the grounds under which the
Contractor may have a right to suspend under section 23.2 (i) - (iii),
on the giving of notice in accordance with section 23.2, under the
Construction Contract.
6.3 If on or before the expiry of the Initial Suspension Standstill Period
the Security Agent (on behalf of the Lenders) by written notice to the
Contractor agrees to pay 50% of the actual costs of the Contractor
from the date of expiry of the Initial Suspension Standstill Period
for a further period 30 days ("FIRST ADDITIONAL SUSPENSION STANDSTILL
PERIOD") the Contractor undertakes not to take any step to terminate
the Construction Contract or its employment under the Construction
Contract, exercise any other right it may have whether under the
Construction Contract or otherwise to rescind, suspend the performance
of or terminate the Construction Contract, enforce execution against
any of the assets of the Owner or present any Petition prior to the
expiry of the First Additional Suspension Standstill Period.
7
6.4 If on or before the expiry of the First Additional Suspension
Standstill Period the Security Agent (on behalf of the Lenders) by
written notice to the Contractor agrees to pay 100% of the actual
costs of the Contractor from the date of expiry of the First
Additional Suspension Standstill Period for a period to be determined
by the Security Agent (not to exceed 760 days) ("SECOND ADDITIONAL
SUSPENSION STANDSTILL PERIOD") the Contractor undertakes not to take
any step to terminate the Construction Contract or its employment
under the Construction Contract, exercise any other right it may have
whether under the Construction Contract or otherwise to rescind,
suspend the performance of or terminate the Construction Contract,
enforce execution against any of the assets of the Owner or present
any Petition prior to the expiry of the Second Additional Suspension
Standstill Period.
6.5 The Contractor must continue to perform all its obligations under the
Construction Contract after the service by it of a Suspension Default
Notice on the Security Agent unless:
6.5.1 the Contractor receives a notice from the Security Agent in accordance
with Clause 11.1;
6.5.2 the Initial Suspension Standstill Period or First Additional
Suspension Standstill Period (as the case may be) expires and the
Security Agent has not agreed to pay the Contractor's costs as
contemplated in Clauses 6.3 and 6.4 (as the case may be); or
6.5.3 the Second Additional Suspension Standstill Period expires.
6.6 At the same time and in the same manner that the Contractor sends the
Suspension Default Notice to the Security Agent, the Contractor must
send a copy of the Suspension Default Notice to the Owner. The
Contractor shall, at the same time and in the same manner as provided
in the Construction Contract, send a copy of any notice sent to the
Owner under section 23.2 of the Construction Contract to the Security
Agent.
7. TERMINATION DEFAULT NOTICE AND TERMINATION
7.1 The Contractor acknowledges that its only rights to terminate the
Construction Contract are those set out in sections 24.2 and 26.7 of
the Construction Contract.
7.2 The Contractor undertakes not to take any step to terminate the
Construction Contract or its employment under the Construction
Contract or reduce its rate of progress or performance under the
Construction Contract, exercise any other right it may have whether
under the Construction Contract or otherwise to rescind or terminate
the Construction Contract, enforce execution against any of the assets
of the Owner or present any Petition for a period of 30 days in the
case
8
of any event set out in section 24.2.2 of the Construction Contract
(the "INITIAL TERMINATION STANDSTILL PERIOD") after actual receipt by
the Security Agent of written notice from the Contractor together with
a certified copy of any notice of its intent to terminate the
Construction Contract given to the Owner under section 24.2.1 or
24.2.2 of the Construction Contract (a "TERMINATION DEFAULT NOTICE")
specifying the grounds for termination provided that the Security
Agent (on behalf of the Lenders) by written notice to the Contractor
agrees within 10 days of actual receipt of the Termination Default
Notice to pay 50% of the actual costs of the Contractor from the date
of receipt of the Termination Default Notice until the expiry of the
Initial Termination Standstill Period,
Provided that:
This Clause 7.2 shall not apply in the case of a termination pursuant
to section 24.2.2(b) of the Construction Contract where:
(a) there has been an expiry of the Initial Suspension Standstill
Period and no First Additional Suspension Standstill Period is in
effect; or
(b) there has been an expiry of the Initial Suspension Standstill
Period and the First Additional Suspension Standstill Period and
the Security Agent (on behalf of the Lenders) has not, by written
notice to the Contractor, agreed to pay 100% of the actual costs
of the Contractor from the date of expiry of the First Additional
Suspension Standstill Period,
in which case the Contractor shall be entitled to exercise its
remedies in accordance with the Construction Contract.
7.3 If on or before the expiry of the Initial Termination Standstill
Period the Security Agent (on behalf of the Lenders) by written notice
to the Contractor agrees to pay 100% of the actual costs of the
Contractor from the date of expiry of the Initial Termination
Standstill Period for a period to be determined by the Security Agent
(not to exceed 760 days) ("ADDITIONAL TERMINATION STANDSTILL PERIOD")
the Contractor undertakes not to take any step to terminate the
Construction Contract or its employment under the Construction
Contract, exercise any other right it may have whether under the
Construction Contract or otherwise to rescind, suspend the performance
of or terminate the Construction Contract, enforce execution against
any of the assets of the Owner or present any Petition prior to the
expiry of the Additional Termination Standstill Period.
7.4 The Contractor must continue to perform all its obligations under the
Construction Contract after the service by it of a Termination Default
Notice on the Security Agent unless:
9
7.4.1 the Contractor receives a notice from the Security Agent in accordance
with Clause 11.1;
7.4.2 the Security Agent (on behalf of the Lenders) has not, by written
notice to the Contractor, agreed to pay the Contractor's costs as
contemplated in Clause 7.2 or the Initial Termination Standstill
Period expires and the Security Agent has not agreed to pay the
Contractor's costs as contemplated in Clause 7.3; or
7.4.3 the Additional Termination Standstill Period expires.
7.5 At the same time and in the same manner that the Contractor sends the
Termination Default Notice to the Security Agent, the Contractor must
send a copy of the Termination Default Notice to the Owner.
8. STATEMENT OF AMOUNTS DUE
8.1 Within 10 days after the date of any Default Notice, the Contractor
shall submit to the Security Agent statements of:
8.1.1 all amounts due and payable to the Contractor under the Construction
Contract on or before the date of such Default Notice and which remain
unpaid at such date; and
8.1.2 the nature and the amount of any monetary claim, asserted by the
Contractor against the Owner under the Construction Contract, which
arises out of or in connection with the breach for which such Default
Notice was served.
8.2 The Security Agent may appoint a firm of independent chartered
accountants:
8.2.1 to verify the statements submitted by the Contractor pursuant to
Clause 8.1 (other than for amounts that have been approved in
accordance with section 9.2 of the Construction Contract); or
8.2.2 where the Contractor fails to submit statements in accordance with
Clause 8.1, to prepare such statements themselves; and
such firm of independent chartered accountants shall provide its
determinations as soon as reasonably practicable and in any event
within 3 months from the date upon which the Contractor is required to
submit information to the Security Agent in accordance with
Clause 8.1.
8.3 The Contractor shall permit any firm of independent chartered
accountants appointed pursuant to Clause 8.2 to have access to and to
make copies of all records, documents, data and accounting and other
information not subject to legal (including, without limitation,
solicitor and own client) and other professional privilege which is
reasonably required with a view to verifying or
10
preparing the statements referred to in Clause 8.1 (other than for
amounts that have been approved in accordance with section 9.2 of the
Construction Contract).
8.4 If a firm of independent chartered accountants is appointed pursuant
to Clause 8.2 to verify any statements submitted by the Contractor
pursuant to Clause 8.1 (other than for amounts that have been approved
in accordance with section 9.2 of the Construction Contract) and such
firm determines that such statements contain an amount which is in
excess of the amount which such firm believes to be accurate, fair and
reasonable, the amount determined by such firm shall be deemed to
prevail for the purposes of this Part 3.
8.5 If a firm of independent chartered accountants is appointed pursuant
to Clause 8.2 to prepare any statements which should have been
submitted by the Contractor pursuant to Clause 8.1, then such
statements shall be prepared by such firm on the basis of such
information as may be available to it and shall be treated as having
been prepared by the Contractor to the purposes of this Part 3.
8.6 The cost and expenses of any firm of independent chartered accountants
appointed by the Security Agent pursuant to Clause 8.2 shall be for
the account of the Security Agent except that, if such firm is
appointed to prepare any statements which should have been prepared by
the Contractor pursuant to Clause 8.1, then the Contractor shall
reimburse the Security Agent on demand for any amounts paid by it to
such firm in respect of the preparation of such statements.
9. WARRANTY OF ACCURACY
The Contractor warrants to the Security Agent that the statements
submitted by it pursuant to Clause 8 shall be (so far as reasonably
practicable in relation to Clause 8.1.2) true, complete and accurate
statements of the amounts to which the Contractor considers itself
entitled.
10. STATEMENTS TO BE PRIMA FACIE EVIDENCE
Without prejudice to the rights of the Contractor to pursue any claims
against the Owner following the Revival Date (if any), any statements
submitted by:
10.1.1 the Contractor pursuant to Clause 8.1 (as the same may be adjusted
pursuant to Clause 8.2); or
10.1.2 a firm of independent chartered accountants pursuant to Clause 8.2,
shall be prima facie evidence for the Security Agent, the Lenders, any
receiver and manager of the Owner, any Substitute and any Additional
Obligor that the
11
Contractor has waived and abandoned all claims arising out of or in
connection with the Construction Contract prior to the date of the
Default Notice to which such statements relate other than those
disclosed in such statements.
11. SUSPENSION OF WORKS
11.1 At any time during any Standstill Period, but before the Security
Agent issues a Step-in Notice or a Novation Notice, the Security Agent
may by notice to the Contractor request the Contractor to suspend the
performance of its obligations under the Construction Contract.
11.2 Immediately after receipt of such a notice the Contractor is obliged
to suspend the Works, other than the performance of all obligations in
connection with protection and maintenance of the Works, until:
11.2.1 it receives payment of all amounts due and payable from the Owner to
the Contractor under the Construction Contract (including amounts
verified under Clause 8) plus any amounts due and payable from the
date of the Default Notice to the date on which Security Agent gave
notice of the suspension (or satisfactory payment security for such
amounts); or
11.2.2 it receives a Step-in Notice or a Novation Notice; or
11.2.3 the Contractor and the Security Agent otherwise agree; or
11.2.4 the applicable Standstill Period expires and another Standstill Period
has not become effective.
11.3 If the Contractor receives payment in accordance with Clause 11.2.1,
without prejudice to Clause 20, any right of suspension or termination
suspended by virtue of Clauses 6 or 7 shall be of no further effect
and the Contractor shall not be entitled to present a Petition,
suspend or terminate the Construction Contract by virtue of any act,
omission or circumstance prior to the date for such payment.
12
PART 4
STEP-IN AND STEP-OUT RIGHTS
12. STEP-IN NOTICE
12.1 At any time:
12.1.1 notwithstanding any rights of the Security Agent or the Contractor
pursuant to Clause 6, on or after the occurrence of a default by the
Owner under Clause 24.2 of the Construction Contract (whilst the same
is continuing unremedied or unwaived) until the Revival Date (if any);
12.1.2 on or after the service of a notice of enforcement of the security
constituted by the Security Document over the Owner's right, title,
benefit and interest in the Construction Contract until the Revival
Date (if any); or
12.1.3 during any Standstill Period,
the Security Agent may give notice (a "STEP-IN NOTICE") in writing to
the Contractor in respect of any one of:
(a) itself;
(b) any receiver, manager or administrative receiver of the Owner
appointed under the Security Document; or
(c) a company substantially the whole of whose issued share capital
is owned by the Security Agent and/or any one or more of the
Lenders,
(each an "ADDITIONAL OBLIGOR"), stating that the Additional Obligor is
to become a party to the Construction Contract and this Agreement in
accordance with the terms hereof.
13. CONSENT OF THE CONTRACTOR
13.1 A Step-in Notice shall not take effect unless approved by the
Contractor save that the Contractor shall only be entitled to withhold
its approval to a Step-in Notice where reasonable in accordance with
Clause 13.2 and such approval shall be deemed to be given in the
absence of a response from the Contractor, within five days after
service of a Step-in Notice by the Security Agent.
13.2 Withholding approval of a Step-in Notice shall only be considered to
be reasonable if the Additional Obligor named therein:
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13.2.1 is not of sound financial standing or is not guaranteed by a person or
persons of sound financial standing; or
13.2.2 does not have the legal capacity, power and authorisation to become a
party to and perform the obligations of the Owner under the
Construction Contract.
14. ASSUMPTION
If the Contractor approves a Step-in Notice pursuant to Clause 13 and
the Additional Obligor named therein executes and delivers to the
Contractor (with a copy thereof to the other parties to this
Agreement) a duly completed Additional Obligor Accession Memorandum in
substantially the form set out in the First Schedule hereto, then such
Additional Obligor shall become a party to the Construction Contract
and this Agreement on and from the date of execution and delivery of
such Accession Memorandum (the "ASSUMPTION DATE").
15. RIGHTS AND OBLIGATIONS ON ASSUMPTION
15.1 Upon an Additional Obligor becoming a party hereto and to the
Construction Contract pursuant to Clause 14, then such Additional
Obligor shall, on and from the Assumption Date and for so long as such
Additional Obligor remains a party hereto and to the Construction
Contract, be:
15.1.1 jointly and severally entitled to exercise and enjoy the rights,
benefits, powers and discretions expressed to be assumed by or granted
to the Owner under the Construction Contract, Advance Payment,
Performance and Defects Liability Period Guarantees and Parent Company
Guarantee;
15.1.2 entitled to exercise and enjoy the rights, benefits, powers and
discretions expressed to be assumed by or granted to an Additional
Obligor under this Agreement, Advance Payment, Performance and Defects
Liability Period Guarantees and Parent Company Guarantee;
15.1.3 subject to Clause 10, jointly and severally liable with the Owner for
the payment of all sums due from the Owner under the Construction
Contract as at the Assumption Date and for the performance of all of
the Owner's obligations under the Construction Contract arising on or
after the Assumption Date; and
15.1.4 liable for the performance of the obligations expressed to be assumed
by an Additional Obligor under this Agreement.
15.2 If an Additional Obligor becomes a party hereto and to the
Construction Contract pursuant to Clause 14, then the Contractor shall
owe its obligations under the Construction Contract to the Owner and
such Additional Obligor jointly PROVIDED THAT:
14
15.2.1 subject to Clause 15.2.2, the receipt of, or performance by the
Contractor in favour of, either such Additional Obligor or the Owner
shall be a good discharge of the Contractor; and
15.2.2 the Security Agent shall be entitled at any time by notice in writing
to the Contractor to direct (such direction being binding on the
Contractor and the Owner) that, at all times thereafter whilst such
Additional Obligor remains a party to the Construction Contract and
subject to any further notice from the Security Agent, such Additional
Obligor shall be solely entitled to make any decisions, to give any
directions, approvals or consents or otherwise to deal with the
Contractor under the Construction Contract.
15.3 If an Additional Obligor becomes a party hereto and to the
Construction Contract pursuant to Clause 14, then:
15.3.1 any amount due from the Owner to the Contractor under the Construction
Contract on the Assumption Date and notified to such Additional
Obligor prior to the Assumption Date shall be paid to the Contractor
by the Additional Obligor as soon as reasonably practicable without
undue delay and in any event within thirty days after the Assumption
Date, failing which the Contractor shall be entitled to exercise its
rights under the Construction Contract in respect of the amount so due
and unpaid; and
15.3.2 subject to payment by the Additional Obligor under Clause 15.3.1 and
without prejudice to Clause 20, any right of suspension or termination
suspended by virtue of Clauses 6 or 7 shall be of no further effect
and the Contractor shall not be entitled to present a Petition,
suspend or terminate the Construction Contract by virtue of any act,
omission or circumstance prior to the Assumption Date.
16. STEP-OUT
An Additional Obligor may, at any time, by giving not less than sixty
days prior written notice to the Contractor terminate its obligations
to the Contractor under the Construction Contract, in which event such
Additional Obligor shall, upon the expiry of such notice, cease to be
a party hereto and to the Construction Contract and shall be released
from all obligations hereunder and under the Construction Contract
except for any obligation which has arisen on or before the expiry of
such notice.
15
PART 5
NOVATION
17. NOVATION PROPOSAL
At any time:
17.1.1 on or after the occurrence of a default by the Owner under Clause 24.2
of the Construction Contract (whilst the same is continuing unremedied
or unwaived) until the Revival Date (if any);
17.1.2 on or after the service of a notice of enforcement of the security
constituted by the Security Document over the Owner's right, title,
benefit and interest in the Construction Contract until the Revival
Date (if any);
17.1.3 during any Standstill Period; or
17.1.4 during any Step-in Period,
the Security Agent may give notice (a "NOVATION NOTICE") in writing to
the Contractor stating that it wishes another person (a "SUBSTITUTE")
to assume the obligations of the Owner under the Construction Contract
and specifying a date falling between the 28th and 35th day (both
dates inclusive) after the date of such Novation Notice, on which such
assumption is to be effective (the "EFFECTIVE DATE").
18. CONSENT OF THE CONTRACTOR
18.1 A Novation Notice shall not take effect unless approved by the
Contractor save that the Contractor shall only be entitled to withhold
its approval to a Novation Notice where reasonable in accordance with
Clause 18.2 and such approval shall be deemed to be given, in the
absence of a response from the Contractor, within five days after
service of a Novation Notice by the Security Agent.
18.2 Withholding approval of a Novation Notice shall only be considered
reasonable if the Substitute named therein:
18.2.1 is not of sound financial standing or is not guaranteed by a person or
persons of sound financial standing; or
18.2.2 does not have the legal capacity, power and authorisation to become a
party to and perform the obligations of the Owner under the
Construction Contract.
19. NOVATION
If the Contractor approves a Novation Notice pursuant to Clause 18 and
the Substitute named therein executes and delivers to the Contractor
(with a copy
16
thereof to the other parties to this Agreement) a duly completed
Substitute Accession Memorandum in substantially the form set out in
the Second Schedule hereto, then:
19.1.1 on and from the Effective Date specified in such Novation Notice, such
Substitute shall:
(a) become a party to the Construction Contract in place of the Owner
who shall be immediately released from its obligations under, and
cease to be a party to, the Construction Contract and thereafter
such Substitute shall be treated as if it had originally been
named as a party thereto in place of the Owner with the rights,
benefits, powers, discretions and obligations of the Owner
thereunder;
(b) be entitled to exercise and enjoy the rights, benefits, powers
and discretions expressed to be in favour of a Substitute under
this Agreement; and
(c) be liable for the performance of the obligations expressed to be
owing by a Substitute under this Agreement,
and the Contractor shall owe its obligations (including, without
limitation, any undischarged liability in respect of any loss or
damage suffered or incurred by the Owner prior to the Effective Date)
under the Construction Contract to such Substitute in place of the
Owner;
19.1.2 any amount due from the Owner to the Contractor under the Construction
Contract on the Effective Date and notified to such Substitute prior
to the Effective Date shall be paid to the Contractor by the
Substitute as soon as reasonably practicable without undue delay and
in any event within thirty days after the Effective Date, failing
which the Contractor shall be entitled to exercise its rights under
the Construction Contract in respect of the amount so due and unpaid;
19.1.3 subject to payment by the Substitute under Clause 19.1.2 any right of
suspension or termination suspended by virtue of Clauses 6 or 7 shall
be of no further effect and the Contractor shall not be entitled to
present a Petition, suspend or terminate the Construction Contract by
virtue of any act, omission or circumstance prior to such Effective
Date and, if any Additional Obligor is a party to or has any
obligations under the Construction Contract on the Effective Date,
such Additional Obligor shall cease to be a party thereto and shall be
discharged from all obligations thereunder.
17
PART 6
REVIVAL OF REMEDIES
20. REVIVAL OF REMEDIES
20.1 If a Default Notice has been given, the grounds for that notice are
continuing and either:
20.1.1 the relevant Standstill Period expires and either the Security Agent
has not agreed to pay the Contractor's costs as contemplated in
Clause 6.3, 6.4, 7.2 and/or 7.3 (as the case may be) or no Additional
Obligor or Substitute becomes a party hereto; or
20.1.2 an Additional Obligor becomes a party hereto but the Step-in Period
relating to such Additional Obligor ends without a Substitute becoming
a party hereto,
then, on and from the date (the "REVIVAL DATE") such Standstill Period
or, as the case may be, such Step-in Period expires, the Contractor
shall be entitled to:
(a) act upon any and all grounds for suspension or termination
available to it under the Construction Contract in respect of
breaches not remedied or waived Provided that no account shall be
taken of the number of days from the date such Default Notice was
given to such Revival Date (both dates inclusive) when
determining any time for the exercise of the Contractor's rights
or the time for the service of any notice by the Contractor under
the Construction Contract;
(b) pursue any and all claims and exercise any and all remedies it
may have under the Construction Contract against the Owner or the
Additional Obligor; and
(c) (if and to the extent that it is then entitled to do so under the
Construction Contract) present a Petition.
18
PART 7
CONSIDERATION AND THE GUARANTOR'S OBLIGATIONS
21. CONSIDERATION
The Contractor acknowledges that the Lenders will make advances and
give other financial accommodation to the Owner in consideration of,
inter alia, the agreements and undertakings given by the Contractor in
this Agreement and that the execution of this Agreement is a condition
precedent to such financial accommodation being made available under
the Finance Documents.
22. GUARANTOR'S CONTINUING OBLIGATIONS
The Guarantor acknowledges and confirms to the Owner, the Security
Agent, each Substitute and each Additional Obligor and their
respective successors and assigns that:
22.1.1 its obligations under the Parent Company Guarantee shall continue in
full force and effect notwithstanding:
(a) any Additional Obligor becoming, or ceasing to be, a party to the
Construction Contract in accordance with the terms hereof; or
(b) any Substitute becoming a party to the Construction Contract in
place of the Owner in accordance with the terms hereof; and
22.1.2 if any Additional Obligor or Substitute becomes a party to the
Construction Contract pursuant to the terms hereof, then such
Additional Obligor or, as the case may be, Substitute shall be
entitled to make claims and otherwise exercise the rights, powers and
discretions of the Owner under the Parent Company Guarantee in
accordance with the terms thereof.
19
PART 8
MISCELLANEOUS
23. LEGAL AND BINDING OBLIGATIONS
23.1 The Contractor warrants to each of the other parties to this Agreement
that each of this Agreement and the Construction Contract is its
legally binding obligation, is within its powers, has been duly
authorised by it, and does not conflict with any law or agreement to
which it is a party and that all consents and authorisations required
by it in relation to this Agreement and the Construction Contract have
been obtained.
23.2 The Guarantor warrants to each of the other parties to this Agreement,
each Substitute and each Additional Obligor that each of this
Agreement and the Parent Company Guarantee is its legally binding
obligation, is within its powers, has been duly authorised by it, and
does not conflict with any law or agreement to which it is a party and
that all consents and authorisations required by it in relation to
this Agreement and the Parent Company Guarantee have been obtained.
24. STANDARD OF WORK
Each of the Guarantor and the Contractor confirms that the Contractor
will perform the Works in accordance with the Construction Contract.
25. ACCESS TO SITE AND INFORMATION
25.1 The Contractor agrees that the Security Agent, the Lenders, and their
advisers, and representatives shall be entitled to have access to the
Site during the term of the Construction Contract, at all reasonable
times upon reasonable notice, provided that the Security Agent, the
Lenders, and their advisers and representatives do not impede the
performance of the Contractor and that they comply with health and
safety regulations applicable to the construction of Works on the
Site.
25.2 The Contractor agrees to provide to the Security Agent, the Lenders,
and their advisers and representatives copies of all information which
the Owner is entitled to receive under the Construction Contract or
requested by proposed Additional Obligor or Substitute, in each case
upon receiving written notice from the Security Agent.
26. FORCE MAJEURE
The Contractor undertakes not to terminate the Construction Contract
under section 26.7 of the Construction Contract if and to the extent
that the Security
20
Agent has provided to the Contractor an undertaking in respect of its
costs arising from the expiry of the 230 days period referred to
therein.
27. INSURANCE
27.1 The Contractor warrants that it has and will continue to maintain in
full force and effect the insurance coverages required to be taken out
by the Contractor in accordance with the Construction Contract. The
Contractor shall ensure that at all times it shall comply with the
terms of the Owner's insurance policies taken out in accordance with
the Construction Contract and shall not act or omit to act in a manner
that would breach or invalidate such policies.
27.2 The Contractor acknowledges that the Owner shall control all claims
under the insurance policies required to be taken out by the Owner
under the Construction Contract. The Contractor shall pay to the
Insurance Account defined in the Facility Agreement all insurance
proceeds (other than insurance proceeds relating to third party claims
against the Contractor and any proceeds from the insurance policies
required to be maintained by the Contractor under the Construction
Contract) received by the Contractor in respect of losses affecting
the Works, which shall be distributed in accordance with the terms of
the Facility Agreement by the Owner.
28. RESTRICTIONS ON OWNER'S RIGHTS AND OBLIGATIONS
The Contractor acknowledges that the rights and obligations of the
Owner are limited by the terms of the Facility Agreement including
(without limitation) in relation to the issue of the Acceptance
Certificate (as defined in the Construction Contract), changes to the
design, specification or configuration of the Plant, amendments to the
Construction Contract, application of insurance proceeds, and
satisfaction of performance tests each of which may require the
consent of the Lenders and/or their designated representatives or
agent provided that such acknowledgment shall not relieve the Owner of
its obligations under the Construction Contract.
29. ASSIGNMENT
Each of the Contractor and the Guarantor agree not to assign, transfer
or novate its rights or obligations under the Construction Contract,
Advance Payment, Performance and Defects Liability Period Guarantees,
Parent Company Guarantee or this Agreement without the prior written
consent of the Security Agent.
21
30. BENEFIT
The benefit of this Agreement (including, without limitation, all
warranties and undertakings and any sums received by the Security
Agent pursuant to this Agreement) shall be held by the Security Agent
upon and subject to the terms of the Security Pooling Agreement for
the benefit of the Lenders.
31. NO ASSIGNMENT
No party to this Agreement shall assign or transfer any part of its
respective rights or obligations under this Agreement without the
consent of the others provided that the Security Agent may assign or
transfer its rights and obligations to a successor Security Agent
under the Security Document without the consent of the other parties
to this Agreement.
32. NO WAIVER
No failure or delay by the Security Agent in exercising any right
under this Agreement shall operate as a waiver thereof or prejudice
any other or further exercise by the Security Agent of any of its
rights or remedies under this Agreement, the Construction Contract,
the Advance Payment, Performance and Defects Liability Period
Guarantees or the Parent Company Guarantee. The rights and remedies
under this Agreement may be exercised as often as necessary and are
cumulative and not exclusive of any rights or remedies provided by
law.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which when taken together shall constitute one and the same
instrument.
34. NO OTHER CLAIMS
The Contractor and the Guarantor separately confirm to the Security
Agent that it has not received notice of any other assignment or
charge by the Owner to any third party of any of its right, title,
benefit or interest under, respectively, the Construction Contract,
the Advance Payment, Performance and Defects Liability Period
Guarantees or the Parent Company Guarantee.
35. NO SET-OFF
The Contractor and the Guarantor each agrees with the Security Agent
that it will not exercise any right of set-off or counterclaim it may
have against the Owner which would reduce any monies payable by the
Contractor under the Construction Contract or, as the case may be, by
the Guarantor under the Parent Company Guarantee except where the
right of set-off or counterclaim is
22
contained within the Construction Contract or, as the case may be, the
Parent Company Guarantee itself.
36. PAYMENT OF MONIES
36.1 The Contractor and the Guarantor each agrees with the Security Agent
that it will pay all monies due from the Contractor under the
Construction Contract or, as the case may be, by the Guarantor under
the Parent Company Guarantee to the Revenue Account established
pursuant to clause 9.2 of the Facility Agreement unless and until,
after the date of enforcement of the Security Document, the Security
Agent otherwise directs, whereupon the Contractor or, as the case may
be, the Guarantor shall comply with the directions of the Security
Agent.
36.2 Where a payment is made by the Security Agent to the Contractor under
this Agreement, the Owner acknowledges that the amount of the payment
shall be treated as if it was an amount borrowed from the Lenders
under the Facility Agreement and accordingly the payment shall be
governed by the provisions of the Facility Agreement.
37. CONFIDENTIALITY
The Security Agent for and on behalf of the Lenders undertakes to the
Contractor to be bound to observe, mutatis mutandis, the terms of
article 27 of the Construction Contract with respect to any
information or document referred to in article 27 of the Construction
Contract which shall come into its possession pursuant to this
Agreement, the Construction Contract, the Finance Documents or the
Security Document Provided that it is hereby agreed that the Security
Agent and the Lenders shall be free to disclose any such information
or document to one another or to any actual or potential assignee,
transferee or sub-participant of any Lender who shall have been made
aware of the terms of this Clause and article 27 of the Construction
Contract.
38. NOTICES
38.1 Save as otherwise expressly provided in this Agreement, all notices or
other communications which are required or permitted hereunder shall
be in writing and sufficient if delivered personally or sent by
registered or certified mail or telecopier addressed as follows:
23
38.1.1 if to the Owner:
Address: Xxxxxxxxxxxx Xxxx 0
X-00000 Xxxxxxxx
Attention: Xx Xxxxxx Xxxxxx
Telecopier No: x00 000 00 00000
38.1.2 if to the Contractor:
Address: Xxxxxxxxxx 00
X-00000 Xxxxxxxx
Attention: Xx Xxxxxxx Xxxxxxxx
Telecopier No: x00 000 0000000
38.1.3 if to the Guarantor:
Address: Guiollettstra beta e 44-48
60325 Frankfurt am Main
Germany
Attention: Xx Xxxxx Xxxxxxx
Telecopier No: x00 00 0000 0000
38.1.4 if to the Security Agent:
Address: Xx Xxxxxxxxxx 0 (XXX0)
X-00000 Xxxxxxx
Attention: Marc Thumecke
Telecopier No: x00 00 000 00000
38.1.5 if to any Additional Obligor or Substitute, to the address or
telecopier number specified in the Additional Obligor Accession
Memorandum delivered by it pursuant to Clause 14 or, as the case may
be, the Substitute Accession Memorandum delivered by it pursuant to
Clause 19.
38.2 All notices shall be deemed delivered upon receipt.
38.3 Any party may by notice of at least fifteen days to the other party
change the address and/or addresses to which such notice and
communications to it are to be delivered or mailed.
24
39. GOVERNING LAW
39.1 This Agreement shall be governed by, and construed in accordance with,
the laws of the Federal Republic of Germany.
39.2 The exclusive place of jurisdiction to hear and determine any suit,
action or proceeding, and to settle any disputes which may arise out
of or in connection with this Agreement is Munich. The Lenders and the
Security Agent may, however, also commence proceedings before any
other court in which assets of the Owner are located. Mandatory places
of jurisdiction remain unaffected.
25
SCHEDULE 1
ADDITIONAL OBLIGOR ACCESSION MEMORANDUM
To: RWE INDUSTRIE-LOSUNGEN GMBH
Sonnenwall 85
D-47051 Duisburg
For the attention of Xx Xxxxxxx Xxxxxxxx
Copied to: ZELLSTOFF STENDAL GMBH
Xxxxxxxxxxxx Xxxx x
X-00000 Xxxxxxxx
For the attention of the Secretary
RWE SOLUTIONS AG
Xxxxxxxxxxxxx(xxxx)x 00-00
00000 Xxxxxxxxx xx Xxxx
For the attention of Xx Xxxxx Xxxxxxx
BAYERISCHE HYPO-UND VEREINSBANK AG
Am Tucherpark 1 (FPA1)
D-80538 Munchen
For the attention of the Secretary
From: [Additional Obligor]
ADDITIONAL OBLIGOR ACCESSION MEMORANDUM
We [INSERT NAME OF ADDITIONAL OBLIGOR] refer to the construction contract dated
[-] and originally made between Zellstoff Stendal GmbH as the Owner and
Zellstoff Stendal GmbH as the Contractor (the "CONSTRUCTION CONTRACT") and the
direct agreement dated [-] and originally made between the Zellstoff Stendal
GmbH as Owner, RWE Industrie-Losungen GmbH as Contractor, RWE Solutions AG as
Guarantor and Bayerische Hypo-und Vereinsbank AG as Security Agent (the "DIRECT
AGREEMENT"). Terms defined in the Construction Contract or, if not defined
therein, in the Direct Agreement shall have the same meanings in this Accession
Memorandum.
26
1. We hereby confirm that we are an Additional Obligor pursuant to Part 4
of the Direct Agreement.
2. We acknowledge and agree that, upon and by reason of our execution and
delivery of this Additional Obligor Accession Memorandum, we will
thereby forthwith become a party to the Construction Contract jointly
and severally with the Owner and a party to the Direct Agreement as an
Additional Obligor and, accordingly, shall have the rights, benefits,
powers, discretions and obligations of the Owner under the
Construction Contract and an Additional Obligor under the Direct
Agreement.
3. Our address, telecopier and telephone number for the purpose of
receiving communications under the Construction Contract and the
Direct Agreement are as follows:
Attention:
Address:
Telecopier No.:
4. This Accession Memorandum shall be governed by, and construed in
accordance with, the laws of the Federal Republic of Germany.
[INSERT NAME OF ADDITIONAL OBLIGOR]
By:
-------------------- --------------------
Name: Name:
Title: Title:
Address:
27
SCHEDULE 2
SUBSTITUTE ACCESSION MEMORANDUM
To: RWE INDUSTRIE-LOSUNGEN GMBH
Sonnenwall 85
D-47051 Duisburg
For the attention of Xx Xxxxxxx Xxxxxxxx
Copied to: ZELLSTOFF STENDAL GMBH
Xxxxxxxxxxxx Xxxx x
X-00000 Xxxxxxxx
For the attention of the Secretary
RWE SOLUTIONS AG
Xxxxxxxxxxxxx(xxxx)x 00-00
00000 Xxxxxxxxx xx Xxxx
For the attention of Xx Xxxxx Xxxxxxx
BAYERISCHE HYPO-UND VEREINSBANK AG
Am Tucherpark 1 (FPA1)
D-80538 Munchen
For the attention of the Secretary
From: [Additional Obligor]
SUBSTITUTE ACCESSION MEMORANDUM
We [INSERT NAME OF SUBSTITUTE] refer to the construction contract dated [-] and
originally made between Zellstoff Stendal GmbH as Owner and RWE
Industrie-Losungen GmbH as Contractor (the "CONSTRUCTION CONTRACT") and the
direct agreement dated [-] and originally made between the Zellstoff Stendal
GmbH as Owner, RWE Industrie-Losungen GmbH as Contractor, RWE Solutions AG as
Guarantor and Bayerische Hypo-und Vereinsbank AG as Security Agent (the "DIRECT
AGREEMENT"). Terms defined in the Construction Contract or, if not defined
therein, in the Direct Agreement shall have the same meanings in this Substitute
Accession Memorandum.
1. We hereby confirm that we are a Substitute pursuant to Part 5 of the
Direct Agreement.
28
2. We acknowledge and agree that, upon and by reason of our execution and
delivery of this Substitute Accession Memorandum, we will thereby
forthwith become a party to the Construction Contract as the Owner and
the Direct Agreement as a Substitute and, accordingly shall have the
rights, benefits, powers, discretions and obligations of the Owner
under the Construction Contract and a Substitute under the Direct
Agreement.
3. Our address, telecopier and telephone number for the purpose of
receiving communications under the Construction Contract and the
Direct Agreement are as follows:
Attention:
Address:
Telecopier No.:
4. This Accession Memorandum shall be governed by, and construed in
accordance with, the laws of the Federal Republic of Germany.
[INSERT NAME OF SUBSTITUTE] ACTING BY
By:
-------------------- --------------------
Name: Name:
Title: Title:
Address:
29
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written:
THE OWNER
ZELLSTOFF STENDAL GMBH
By:
-------------------- -----------------------
Name: Name:
Title: Title:
Address:
THE CONTRACTOR
RWE INDUSTRIE-LOSUNGEN GMBH
By:
-------------------- --------------------
Name: Name:
Title: Title:
Address:
Federal Republic of Germany
THE GUARANTOR
RWE SOLUTIONS AG..
By:
-------------------- --------------------
Name: Name:
Title: Title:
Address:
THE SECURITY AGENT
BAYERISCHE HYPO- UND VEREINSBANK AG
By:
-------------------- --------------------
Name: Name:
Title: Title:
Address: Am Xxxxxxxxxx 00
00000 Xxxxxxx
Xxxxxxx Xxxxxxxx of Germany
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
TABLE OF CONTENTS
1. Form of Notice of Commencement Date
2. Schedule of Prices
3. Intentionally Omitted
4. Form of Down Payment, Performance and Warranty Bank Guarantee
5. Form of Extended Defects Liability Period Bank Guarantee
6. Insurance
7. Intentioanally Omitted
8. Key Persons List
9. Payment Milestone Schedule
10. Form of Parent Company Guarantee
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
1. FORM OF NOTICE OF COMMENCEMENT DATE
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
1. FORM OF NOTICE OF COMMENCEMENT DATE
(Date)
To: RWE Xxxxxxxxx-Xxxxxxxx XxxX
Xxxxxxxxxx X0
X 00000 Xxxxxxxx, Xxxxxxx
Attention:
To: Zellstoff Xxxxxxx XxxX
Xxxxxxxxxxxx Xxxx 0
X-00000 Xxxxxxx, Xxxxxxx
Attention:
Reference is made to the Contract for Engineering, Design, Procuremnt,
Construction, Erection and Start Up for the Stendal Pulp Mill Project dated
(Date of Signature) between RWE Industrie-Losungen GmbH (the "Contractor") and
Zellstoff Stendal GmbH (the "Owner").
Contractor and Owner, respectively, hereby certify that the Commencement Date
(as defined in the Contract) occurred on ___________ (Date of Commencement) in
accordance with Article 32 of the Contract.
Zellstoff Xxxxxxx GmbH RWE Industrie-Losungen GmbH
Date: Date:
------------------------ ------------------------
By: By:
------------------------ ------------------------
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
2.Schedule of Prices
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
Schedule of Prices
Prices
Systems/Non-Systems Departments in EUR
General Plant *
Water Treatment System *
Effluent Tratment System *
Power Boiler System *
Turbine Generator System *
Wood Handling System *
Fiber Line - Cooking/Xxxxx Stock/Bleaching *
Fiber Line - Pulp Dewatering/Drying/Baling *
Chlorine Dioxide System *
Evaporator System *
Recovery Boiler System *
Recausticizing *
Lime Kiln System *
NCGD System *
Tall Oil System *
Administration and Workshop Building *
DCS System *
Cooling Tower System *
Underground Installations *
Power Distribution System *
Emergency Power System *
Oxygen Plant *
Roads and Paved Areas *
Weighbridges and Guardhouse *
Pipe Bridges *
Fuel Oil Storage *
Railway *
-----------
Grand Total: 716,000,000
----------
* These prices may be broken down as required for invoicing.
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
3. Intentionally Omitted
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERICAL EXHIBITS
4. FORM OF DOWN PAYMENT, PERFORMANCE AND WARRANTY BANK GUARANTEE
APPENDIX 2 EXHIBIT 4
AGREED FORM OF ADVANCE PAYMENT, PERFORMANCE AND DEFECTS LIABILITY PERIOD
GUARANTEE
Zellstoff Stendal GmbH
Niedergorner Damm 1
D-39596 Arneburg
Guarantee No. (_____)
Dear Sirs:
We refer to the Contract for Design, Engineering, Procurement, Construction,
Erection and Start Up made as of (_____), (the 'Contract') between Zellstoff
Stendal GmbH ('the Owner') and RWE Industrie-Losungen GmbH, Duisburg/Germany
(the 'Contractor') for the Stendal Pulp Mill Project.
In accordance with the Contract terms, the Contractor is required to provide to
the Owner a combined Advance Payment, Performance and Defects Liability Period
Guarantee in the amount of (INSERT AMOUNT EQUAL TO 17% OF CONTRACT PRICE) EURO
(EURO _____).
Certain capitalized terms are used herein with the same meanings given to them
in the Contract, as follows:
'Expiry of Defects Liability Period Certificate' means the certificate
issued by Owner to Contractor in the form of either Annex C or Annex D, in
accordance with section 20.9 of the Contract, certifying that the Expiry of
the Defects Liability Period (as defined in the Contract) has occurred in
accordance with, and subject to the conditions (including in the case of a
certificate in the form of Annex D, the reservation of the Owner's rights
with respect to certain continuing warranties referenced in Attachment A
thereto) contained in, Section 20.9 of the Contract.
'Acceptance Certificate' means the certificate issued by Owner to
Contractor in the form set out in Annex A to this Guarantee, in accordance
with section 18.7 of the Contract, confirming that Acceptance (as defined
in the Contract) has occurred in accordance with, and subject to the
conditions contained in, Section 18.7 of the Contract.
'Schedule B Test Certificate' means a certificate issued by Owner to
Contractor, in accordance with article 19 of the Contract, confirming that
all conditions to the completion of the Schedule B Test (as defined in the
Contract) for a System (as defined in the Contract) have been satisfied in
accordance with, and subject to the conditions contained in, Section 19.6
of the Contract.
'Direct Agreement' means the agreement dated August 2002 between the Owner,
Contractor, RWE Solutions AG and Bayerische Hypo-und Vereinsbank AG.
In addition, a reference in this Guarantee to a "day" shall be construed as a
reference to a calendar day.
On behalf of the Contractor, we (INSERT NAME OF BANK) hereby give our guarantee
and irrevocably and unconditionally undertake to pay to you any amount you may
claim (by one or more claims) up to but not exceeding (INSERT AMOUNT EQUAL TO
17% OF CONTRACT PRICE) EURO (EURO _____) upon receipt of your first written
demand to us stating the Contractor is in breach of the Contract and details of
the nature of such breach (which we shall consider to be sufficient and rely on
in full without investigation or inquiry).
This Guarantee is a guarantee (GARANTIE) and not a surety (BURGSCHAFT) in terms
of German law, and, accordingly, the provisions relating to sureties and
contained in the German Civil Code shall not apply to this Guarantee. This
guarantee shall in all respects be a continuing, absolute, unconditional and
irrevocable guarantee. Our obligations hereunder shall be absolute and primary
obligations irrespective of the occurrence of any circumstances which might
otherwise constitute a legal or equitable defence. In particular, the release by
the Owner of any other security granted in connection with the Contract in
fulfillment of the Owner's obligation under any other security agreement to
effect such release shall not in any way affect the obligations of the Guarantor
hereunder.
This Guarantee shall be payable in cash without set-off, deduction or
withholding in whole or in part on your first written demand notwithstanding any
defense, contestation, claims, demands or objections by the Contractor or by any
other party.
We hereby waive any right we may have of first requiring you to pursue your
legal remedies against the Contractor and waive notice of acceptance hereof, of
any action taken or omitted in reliance hereon, of any defaults under the
Contract, and any presentation, demand, protest, or notice of any kind. We
hereby agree that the Contract may be modified, amended and supplemented without
our consent in any manner and agree that no such modification, amendment, or
supplement shall release, affect or impair our liability under this Guarantee.
We further agree that no invalidity, irregularity or unenforceability of the
Contract shall affect or impair our liability under this Guarantee.
Our aggregate maximum liability under this Guarantee is in any case limited to
the sum of (INSERT AMOUNT EQUAL TO 17% OF CONTRACT PRICE) EURO (EURO _____).
This Guarantee shall become effective automatically for an amount of (INSERT
AMOUNT EQUAL TO 8.5% OF THE CONTRACT PRICE) EURO (EURO _____) upon the
deposit in the Contractor's account with (INSERT NAME OF BANK AND ACCOUNT
NUMBER) of the amount of EURO (EURO INSERT AMOUNT EQUAL TO 5% ADVANCED
PAYMENT) in funds immediately available to the Contractor.
This Guarantee shall become effective automatically for an additional amount of
(INSERT AMOUNT EQUAL TO 8.5% OF THE CONTRACT PRICE) EURO (EURO _____) upon the
deposit in the Contractor's account WITh (INSERT NAME OF BANK AND ACCOUNT
NUMBER) of the amount of EURO (EURO INSERT AMOUNT EQUAL TO 5% ADVANCED
PAYMENT) in funds immediately available to the Contractor.
This Guarantee shall automatically be reduced to the amount of (INSERT AMOUNT
EQUAL TO 10% OF THE CONTRACT PRICE) EURO (EURO _____) after 45 days from the
earliest of the following daTES:
(i) the date of presentation to us by the Contractor of a copy of the
Acceptance Certificate signed and dated by the Owner in the form set
out in Annex A to this Guarantee;
(ii) the date of presentation to us by the Contractor of a copy of a
certificate signed by the Owner stating that the conditions for
reduction of this Guarantee upon Acceptance (as defined in the
Contract) have been satisfied and that all liquidated damages
payable on or before such date have been paid to the Owner;
(iii) the date of presentation to us by the Contractor of the original of
a certificate or declaration of the Contractor, signed by the
Contractor, that the works are deemed accepted in accordance with
section 18.10 of the Contract and that all liquidated damages
payable on or before such date have been paid to the Owner, such
certificate or declaration to be accompanied by a statement of one
of the following audit companies PriceWaterhouseCoopers, KPMG, Ernst
& Young or Deutsche Treuarbeit, confirming that the statements of
the Contractor, that the works are deemed to be accepted in
accordance with section 18.10 of the Contract have been made in
accordance with the terms and conditions of the Contract and that
all liquidated damages payable on or before such date have been paid
to the Owner.
This Guarantee shall automatically be further reduced on the presentation of
copies of the seventeen (17) Schedule B Test Certificates in four successive
steps as follows:
(i) by an amount equal to (1.25% OF THE CONTRACT PRICE) EURO
(EURO _____) 65 days after the dATE of presentation to us by the
Contractor of copies of four Schedule B Test Certificates in the
form set out in Annex B to this Guarantee signed and dated by the
Owner in relation to four different Systems and a certificate to us
from the Contractor that it has not previously presented copies or
originals of such Schedule B Test Certificates;
(ii) by an amount equal to (1.25% OF THE CONTRACT PRICE) EURO
(EURO _____) 65 days after the dATE of presentation to us by the
Contractor of copies of four Schedule B Test Certificates in the
form set out in Annex B to this Guarantee signed and dated by the
Owner in relation to four different Systems and a certificate to us
from the Contractor that it has not previously presented copies or
originals of such Schedule B Test Certificates;
(iii) by an amount equal to (1.25% OF THE CONTRACT PRICE) EURO
(EURO _____) 65 days after the dATE of presentation to us by the
Contractor of copies of four Schedule B Test Certificates in the
form set out in Annex B to this Guarantee signed and dated by the
Owner in relation to four different Systems and a certificate to us
from the Contractor that it has not previously presented copies or
originals of such Schedule B Test Certificates; and
(iv) by an amount equal to (1.25% OF THE CONTRACT PRICE) EURO
(EURO _____) 65 days after the dATE of presentation to us by the
Contractor of copies of five Schedule B Test Certificates in the
form set out in Annex B to this Guarantee signed and dated by the
Owner in relation to five different Systems and a certificate to us
from the Contractor that it has not previously presented copies or
originals of such Schedule B Test Certificates,
provided that, in respect of any of the reductions set out in (i)-(iv)
above, such reductions may also take place on the date falling 65 days
after:
(v) the date of presentation to us by the Contractor of a copy of a
certificate signed by the Owner stating that the conditions for
reduction of this Guarantee upon the satisfaction of the relevant
Schedule B Tests have been satisfied and that all liquidated damages
payable on or before such date in respect of the relevant Schedule B
Tests have been paid to the Owner; or
(vi) the date of presentation to us by the Contractor of the original of
a certificate or declaration of the Contractor, signed by the
Contractor, that the relevant number of Schedule B Tests set out in
(i)-(iv) above (in respect of which a reduction in this Guarantee
has not previously been claimed) have been deemed accepted in
accordance with section 19.9 of the Contract and that all liquidated
damages payable on or before such date have been paid to the Owner,
such certificate or declaration to be accompanied by a statement of
one of the following audit companies PriceWaterhouseCoopers, KPMG,
Ernst & Young or Deutsche Treuarbeit, confirming that the statements
of the Contractor, that the relevant Schedule B Tests are deemed to
be accepted in accordance with section 19.9 of the Contract, have
been made in accordance with the terms and conditions of the
Contract, a reduction in this Guarantee has not previously been
claimed in respect of such Schedule B Tests and that all liquidated
damages payable on or before such date have been paid to the Owner.
This Guarantee will expire on the first to occur of:
(1) presentation to us by the Contractor of a copy of the original
Expiry of Defects Liability Period Certificate in the form set out
in Annex C to this Guarantee signed and dated by the Owner to
reflect the actual date of the expiry of the Defects Liability
Period;
(2) presentation to us by the Contractor of a copy of the original
Expiry of Defects Liability Period Certificate in the form set out
in Annex D to this Guarantee signed and dated by the Owner to
reflect the actual date of the expiry of the Defects Liability
Period together with a confirmation to us by the Owner that it has
received a guarantee in an amount equal to five percent (5%) of the
aggregate value of all items with respect to which the Contractor
has continuing warranty obligations under the Contract;
(3) (_____);
after which date this Guarantee shall become null and void unless your written
demand under this Guarantee has reached us at (_____) before 5:00 p.m. German
time on such date.
You shall return this Guarantee to us not later than ten (10) days following the
date of its expiry provided that no demands are then outstanding.
The rights under this Guarantee may not be assigned by you or your permitted
assigns or transferees under the Direct Agreement without our prior written
approval, such approval not to be unreasonably withheld or delayed; provided
that no approval shall be required for the assignment of the rights under this
Guarantee to your lenders by way of security or an additional obligor or
substitute appointed under the Direct Agreement and that in case of such
assignment, we will provide an acknowledgement thereof on such terms as the
assignee may reasonably require.
This Guarantee shall be governed by and construed in accordance with the laws of
Germany.
ANNEX A
FORM OF ACCEPTANCE CERTIFICATE
To: RWE Industrie-Losungen GmbH
Xxxxxxxxxx 00
X 00000 Xxxxxxxx, Xxxxxxx
Attention:
From: Zellstoff Stendal GmbH
Xxxxxxxxxxxx Xxxx 0
X 00000 Xxxxxxxx, Xxxxxxx
Reference is made to the Contract for Engineering, Procurement,
Construction, Erection, Start-up and Testing of a Kraft Pulp Mill dated [-] (the
"Contract") between RWE Industrie-Losungen GmbH ("Contractor") and Zellstoff
Stendal GmbH ("Owner").
This is the Acceptance Certificate referred to in Section 18.7 of the
Contract. The Owner hereby confirms that Acceptance (as defined in the Contract)
has occurred on [-] in accordance with, and subject to the conditions contained
in, Section 18.7 of the Contract.
Zellstoff Stendal GmbH
---------------------------
Name:
Title:
ANNEX B
FORM OF SCHEDULE B TEST CERTIFICATE
To: RWE Industrie-Losungen GmbH
Xxxxxxxxxx 00
X 00000 Xxxxxxxx, Xxxxxxx
Attention:
From: Zellstoff Stendal GmbH
Xxxxxxxxxxxx Xxxx 0
X 00000 Xxxxxxxx, Xxxxxxx
Reference is made to the Contract for Engineering, Procurement,
Construction, Erection, Start-up and Testing of a Kraft Pulp Mill dated [-] (the
"Contract") between RWE Industrie-Losungen GmbH ("Contractor") and Zellstoff
Stendal GmbH ("Owner").
This is the Schedule B Test Certificate referred to in Section 19.6 of
the Contract. The Owner hereby confirms that all conditions to the completion of
the Schedule B Test (as defined in the Contract) for the [INSERT RELEVANT
SYSTEM] have been satisfied on [-] in accordance with, and subject to the
conditions contained in, Section 19.6 of the Contract.
Zellstoff Stendal GmbH
---------------------------
Name:
Title:
ANNEX C
FORM OF EXPIRY OF DEFECTS LIABILITY PERIOD CERTIFICATE
To: RWE Industrie-Losungen GmbH
Xxxxxxxxxx 00
X 00000 Xxxxxxxx, Xxxxxxx
Attention:
From: Zellstoff Stendal GmbH
Xxxxxxxxxxxx Xxxx 0
X 00000 Xxxxxxxx, Xxxxxxx
Reference is made to the Contract for Engineering, Procurement,
Construction, Erection, Start-up and Testing of a Kraft Pulp Mill dated [-] (the
"Contract") between RWE Industrie-Losungen GmbH ("Contractor") and Zellstoff
Stendal GmbH ("Owner").
This is the Expiry of Defects Liability Period Certificate referred to
in Section 20.9 of the Contract. The Owner hereby certifies that the Expiry of
the Defects Liability Period (as defined in the Contract) has occurred on [-] in
accordance with, and subject to the conditions contained in, Section 20.9 of the
Contract.
Zellstoff Stendal GmbH
---------------------------
Name:
Title:
ANNEX D
FORM OF EXPIRY OF DEFECTS LIABILITY PERIOD CERTIFICATE
To: RWE Industrie-Losungen GmbH
Xxxxxxxxxx 00
X 00000 Xxxxxxxx, Xxxxxxx
Attention:
From: Zellstoff Stendal GmbH
Xxxxxxxxxxxx Xxxx 0
X 00000 Xxxxxxxx, Xxxxxxx
Reference is made to the Contract for Engineering, Procurement,
Construction, Erection, Start-up and Testing of a Kraft Pulp Mill dated [-] (the
"Contract") between RWE Industrie-Losungen GmbH ("Contractor") and Zellstoff
Stendal GmbH ("Owner").
This is the Expiry of Defects Liability Period Certificate referred to
in Section 20.9 of the Contract. The Owner hereby certifies that the Expiry of
the Defects Liability Period (as defined in the Contract) has occurred on [-] in
accordance with, and subject to the conditions (including the reservation of the
Owner's rights with respect to certain continuing warranties referenced in
Attachment A hereto) contained in, Section 20.9 of the Contract.
Zellstoff Stendal GmbH
---------------------------
Name:
Title:
IN WITNESS WHEREOF, we have caused this Guarantee to be executed by one or more
to our officers thereunto duly authorized on this day of August, 2002.
(Name of Guarantor)
By:
Name:
Title:
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
5. FORM OF EXTENDED DEFECTS LIABILITY PERIOD BANK GUARANTEE
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
Form of Extended Defects Liability Period Bank Guarantee
Zellstof Stendal GmbH
Niedergorner Damm 1
D-39596 Ameburg
Guarantee No. (_____)
Dear Sirs:
(to be substantially in the form of the guarantee in Appendix 2, Exhibit 4)
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
6. Insurance
Bankrisk Services Steridal Pulp Mill Project
Insurance Due Diligence Arrangers Insurance Concept
Minimum Insurance Schedule
CONSTRUCTION PHASE INSURANCE
1. Construction/Erection "All Risks" Material Damage Insurance
1.1 The Insured Parties
(a) Borrower and any Subsidiary Companies;
(b) The ERG Contractor AND/OR Contractor's Suppliers in respect of the EPC
Contract and the Contractor and/or Contractor's Suppliers in respect
of the non-EPC ancillary Contracts;
(c) Any consultants and suppliers for their site act ivities only;
(d) The independent Engineer,
Each for their respective rights and interests.
1.2 The Insured Property
All permanent and temporary works, preliminary works (including associatad works
and site mobilisation) executed or in course of execution, materials, goods,
parts, excavations, spare parts inventory, debris removal, consumables, fuels,
chemicals and oils and all other things equipment of whatsoever nature used for
or intended for incorporation within the Site, including the rail spur,
electricity, steam, gas and water interconnections, all designs drawings
specifications plans to be provided, together with computer and building
services equipment, all other parts or units or equipment plant and machinery of
whatever nature the property of the insured or for which they are responsible,
(but excluding any contractor's or sub contractor's constructional plant and
equipment), while on or adjacent to the Site and all associated and ancillary
works connected to the Plant.
1.3 Geographical Limits
Europe and Scandinavia.
1.4 Sum Insured
EURO * representing the amount equivalent to the total reinstatement value of
the Works and the Plant, including allowance for the costs of demolition and
debris removal and professional fees (including construction management,
Technical Advisers fees and fuel, chemical, raw material and Spares Inventory
at Site at the date of Acceptance), customs duties of the Works and the Plant
(as applicable). The sum insured is to operate in respect of each occurrence
of loss or damage to the insured property.
1.5 Indemnity
All risks of physical loss of or damage to any part of the Insured Property from
any cause not excluded.
1.6 Period of Insurance
From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until the date of Acceptance, extending for an additional 18 months
thereafter with respect to cover during the Defects Liability Period.
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
23/08/02 1 HypoVereinsbank
Bankrisk Services Steridal Pulp Mill Project
Insurance Due Diligence Arrangers Insurance Concept
1.7 Main Exclusions
The Insurers shall not be liable for:
(a) War, Civil War, etc. including Terrorism (until such time as insurance
against acts of Terrorism becomes available in the international
market on what the Security Agent accepts to be reasonable commercial
terms);
(b) Radioactive Contamination, etc;
(c) Wear and Tear and gradual deterioration but this shall not exclude
consequent loss or damage;
(d) Date Recognition Clause;
(e) Unexplained Disappearance or Shortages;
(f) Consequential Losses, loss of use, delay penalties;
(g) Contractor's or its Subcontractors' Constructional Plant and
Equipment;
(h) Loss of cash, banknotes, treasury notes, money orders, cheques or
stamps;
(i) Costs incurred arising out of wear, tear, wasting or wearing away,
gradual deterioration, rust, oxidation, corrosion or erosion but not
consequent damage;
(j) Marine and Air transits (but not transits by inland waterways);
(K) Vehicles licensed for road use.
1.8 Maximum Deductible
Not exceeding EURO 75,000 in respect of each and every occurrence of loss or
damage.
1.9 Main Extensions/Conditions
(a) Including loss or damage arising from acts of Terrorism, strikes,
riots, civil commotion and criminal/malicious damage (except that
insurance against acts of Terrorism will be excluded until such xxx.e
as that insurance becomes available in the international market on
what the Security Agent accepts to be reasonable commercial terms);
(b) Natural Hazards Limit; Euro 12,500,000 each event and Euro 25,000,000
per annum;
(c) Defective Design cover only excluding the component part that is
detective but otherwise covering consequential damage;
(d) Debris removal;
(e) Expediting expenses;
(f) Professional and surveyors' fees;
(g) Automatic reinstatement of sum insured;
(h) Escalator on Sum Insured;
(i) Escalator on Limit of liability applied to Sum Insured;
(j) Seventy-two Hour Clause;
(k) Plans Specifications Drawings Electronic Records and data Clause;
(1) 50/50 Marine/Construction Loss Sharing Clause; (in) Temporary Repairs
and Minimising Loss; (n) Offsite Storage and inland Transits; (o)
Cover during Defects Liability Period to cover loss or damage caused
to the Works and the Plant by defects or whilst work is being
undertaken pursuant to the Defects Liability provisions of the
relevant EPC Contract.
23/08/02 2 HypoVereinsbank
Bankrisk Services Steridal Pulp Mill Project
Insurance Due Diligence Arrangers Insurance Concept
2. Delay in Start up/Advance Loss of Revenue Insurance (Construction)
2.1 The Insured Parties
Borrower
2.2 PERIOD OF INSURANCE
From Financial Close (OR the Commencement Date under the EPO Contract if
earlier) until the date of Acceptance.
2.3 Indemnity
Fixed operating costs and standing charges including loss of debt service
(interest -including fees- and Principal); plus any minimum take or pay
obligations; plus increased cost of working following delays in the date of
Start Up, incuding in the five month period from the date of Start Up until the
scheduled date of Acceptance, as a direct result of physical loss or damage
covered under Paragraph 1, "Construction! Erection "All Risks' Material Damage
Insurance," of this Minimum lnsurance Schedule including loss or damage, which
would be insured but for the application of any deductible, that causes an
interference in the construction work resulting in a delay to the scheduled date
of Start Up or such later date on which the Insured Business would have become
operational or causes an interruption of the operation as scheduled from the
date of Start Up until scheduled date of Acceptance, respectively.
2.4 Sum Insured
EURO * for any 12 months period of indemnification being an amount sufficient
to cover the Plant's fixed operating costs including interest, fees and
principal payable plus any minimum take or pay obligations for the duration
of the Indemnity Period.
2.5 Indemnity Period
A period of 18 months from the scheduled Start Up date including the period from
the scheduled date of Start Up until the scheduled date of Acceptance for FLEXA
(Fire Lightning Explosion and Aircraft) perils and Acts of God and 12 months
from the scheduled Start Up date including the period from the scheduled date of
Start Up until the scheduled date of Acceptance for Machinery Breakdown & all
other damage.
2.6 Main Exclusions
The insurance excludes any event not insured under paragraph 1 "Construction!
Erection "All Risks" Material Damage Insurance, above.
2.7 Maximum Time Excess
Not exceeding 60 days any one delay.
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
23/08/02 3 HypoVereinsbank
Bankrisk Services Steridal Pulp Mill Project
Insurance Due Diligence Arrangers Insurance Concept
3. Marine Cargo and Inland Transit Insurance
3.1 The Insured Parties
(a) Borrower and any Subsidiary Companies;
(b) The ERG Contractor and/or Contractors Suppliers in respect of the ERG
Contract and the Contractor and/or Contractor's Suppliers in respect
of the non-EPC ancillary Contracts;
(c) The Independent Engineer,
Each for their respective rights and interests.
3.2 Period of Insurance
From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until date of delivery of the final consignment to the Site.
3.3 The Insured Property
All imported Cargoes and/or interest and/or stock of whatsoever description
including plant, equipment, machinery, (other than Contractors construction
plant and equipment), spare parts and other items for incorporation within the
Site.
3.4 SUM Insured
EURO 40,000,000 any one shipment but not less than 110% of the maximum value
(including cost of freight and insurance) any one conveyance and/or location of
each shipment and EURO 10,000,000 for Inland Transit.
3.5 Indemnity
Against "All Risks' of physical loss or damage while in transit by sea, air or
land or inland waterway portion of the journey or whilst in storage en route.
From the time the insured items leave the warehouse or factory anywhere in the
world for shipment or transit to, and until they are delivered and unloaded at
the Site, and return.
3.6 MAIN Exclusions
(a) German Institute Insolvency Exclusion Clause or Equivalent;
(b) German Institute Radioactive Contamination Exclusion Clause or
Equivalent;
(c) Excluding electrical and mechanical derangement unless caused by an
insured peril.
3.7 Main Extensions/Conditions
(a) German Institute Cargo and Air Cargo Clauses (A) or Equivalent;
(b) German Institute War Clauses (Cargo, Air Cargo) or Equivalent;
(c) German Institute Strikes Clause (Cargo, Air Cargo) or Equivalent;
(d) German Institute Classification Clause or Equivalent;
(e) German Institute Replacement Clause or Equivalent;
(f) 50/50 Marine Construction Loss Sharing and Concealed Damage clause;
(g) Debris Removal Clause;
(h) Expediting Expenses;
(i) Transhipment Clause;
(j) Accumulation Clause/Off- Site Storage.
3.8 Maximum Deductible
23/08/02 4 HypoVereinsbank
Sankrisk Services Steridal Pulp Mill Project
Insurance Due Diligence Arrangers Insurance Concept
Not to exceed EURO 10,000 each and every loss.
23/08/02 5 HypoVereinsbank
Bankrisk Services Steridal Pulp Mill Project
Insurance Due Diligence Arrangers Insurance Concept
4. Marine Delay in Start Up/ Marine Advance Loss of Revenue
4.1 The Insured Parties
Borrower
4.2 Period of Insurance
From the date of Financial Close or the Commencement Date under the EPC Contract
(if earlier) until the date of Start Up.
4.3 Indemnity
Fixed operating costs and standing charges including loss of debt service
(interest -including fees- and Principal) plus any minimum take or pay
obligations; plus increased cost of working following delays in Start Up as a
direct result of physical loss or damage covered under Paragraph 3, "Marine
CargoiTransit Insurance," of this Minimum insurance Schedule including loss or
damage, which would be insured but for the application of any deductible, that
causes an interference in the construction work resulting in a delay to the
scheduled date of Start Up or such later date on which the Insured Business
would have become operational.
4.4 Sum Insured
EURO * being an amount sufficient to cover the Project's fixed operating
costs including interest, fees and principal payable plus any minimum take or
pay obligations for the duration of the maximum Indemnity Period.
4.5 Indemnity Period
A minimum of 12 months from the scheduled date of Start Up.
4.6 Main Exclusions
The insurance excludes any event Insurance," above. not insured under
paragraph 3, "Marine Cargo/Transit
4.7 Maximum Time Excess
Not exceeding 60 days any one delay.
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
23/08/02 6 HypoVereinsbank
Bankrisk Services Steridal Pulp Mill Project
Insurance Due Diligence Arrangers Insurance Concept
5. Third Party Liability I Environmental Impairment Liability
5.1 The Insured Parties
(a) Borrower and Subsidiary Company;
(b) The EPC Contractor and/ar Contractors Suppliers in respect of the EPC
Contract and the Contractor and/or Contractors Suppliers in respect of
the non-EF'C ancillary Contracts;
(c) Any consultants and suppliers for their site activities only;
(d) The Independent Engineer;
(e) Each of their respective assigns, employees, agents, officers,
partners and Directors,
Each for their respective rights and interests.
5.2 Period of Insurance
From Financial Close (or the Commencement Date under the EPC Contract if
earlier) until the date of Acceptance, extending for an additional 18 months
thereafter with respect to cover required in respect of the EPC Contractor/and
or its Suppliers during the Defects Liability Period.
5.3 Indemnity
The legal and contractual liability of an Insured to pay damages, costs and
expenses as a result of:
(a) Death, bodily injury and dIsease (including mental shock) of any
person;
(b) Loss or damage to any third party property and/or loss of use thereof;
(c) Interference with traffic or property or any easement, right of air,
light, water, support or way or enjoyment at use by obstruction, loss
of amenities, nuisance, trespass or any like cause; and
(d) false arrest, invasion of privacy, detention, eviction or any like
cause,
Arising out of or in the course of or in connection with the performance of the
Works.
5.4 Geographical Limits
World-wide.
5.5 Limit of Indemnity
Notless than EURO 10,000,000 for any one occurrence or all occurrences of a
series consequent upon or attributable to one source or original source but in
respect of Products Liability EURO 10,000000 in the aggregate.
5.6 Maximum Deductible
Not more than EURO 25,000 in respect of third party property damage only and not
more than EURO 250,000 in respect of EIL.
5.7 Main Extensions/Conditions
(a) Cross Liabilities Clause;
(b) World-wide jurisdiction clause;
(c) legal costs and expenses;
(d) Contingent Motor Liability.
5.8 Main Exclusions
23/08/02 7 HypoVereinsbank
Bankrisk Services Steridal Pulp Mill Project
Insurance Due Diligence Arrangers Insurance Concept
(a) Death of, or bodily injury to, or illness or disease contracted by,
the employees of the Insured claiming indemnity arising out of or in
the course of their employment;
(b) Property belonging to, or in the charge, or under the control of, the
Insured;
(c) Liability arising out of technical or professional advice given for a
fee by the Insured or by any person acting on behalf of the Insured
other than advice relating to the construction and operation of the
Plant in so far as insured under paragraph 1, "Construction! Erection
"All Risks" Material Damage Insurance," of this Minimum insurance
Schedule;
(d) Liability arising out of the use of mechanically propelled vehicles
for which compulsory insurance or security is required by legislation,
except whilst in use as a tool of trade;
(e) The cost of making good loss of or damage to property indemnified
under the insurance referred to in paragraph 1 "Construction! Erection
"All Risks" Material Damage Insurance," of this Minimum Insurance
Schedule;
(f) Liability arising from ownership, possession, use or control of any
aircraft or watercraft; and
(g) Liquidated damages or penalties under any agreement in connection with
delay or guarantees of performance or efficiency.
5.9 Environmental Impairment Insurance ("Umwelthaftpflichtversicheruflg")
(a) All events for which one of the insured becomes liable to pay in
respect of legal liabilities to third parties arising from
contamination of the Project Site, which results ri a pollution event
causing third party bodily injury or property damage;
(b) Temporary ownership in Cover Component 2.6 of the
Umwelthaftpflicht-Modefl des H UK-Verbandes;
(c) 36 month extended reporting period after cancellation.
23/08/02 8 HypoVereinsbank
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
7. Intentionally Omitted
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
8. Key Persons List
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
8. KEY PERSONS LIST
POSITION NAME
-------- ----
Project Sponsor Xxxx Xxxxxxxxx
Project Director Xxxxx X. Xxxxx
Technical Director Xxxxx X. Xxxxxxxx
Commercial Director Bernd Kildentoft
Engineering Manager Xxx Xxxxxxx
Site Manager Xxxxxx Xxxxxxx
Manager Subcontracts Amd Pannenbecker
Administration Coordinator Xxxxxx Xxxxxx
Commisioning Manager Xxxx Xxxxx
Civil Manager Xxxxxx Xxxx
Erection Manager Xxxx Xxxx
Planning / Scheduling Xxxxxx xxxxxxxx
Electrical Xxxxxx Xxxxxxxxx
Authority Coordination Xxxx Xxxxxx
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERCIAL EXHIBITS
9. PAYMENT MILESTONE SCHEDULE
*
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 2
COMMERICAL EXHIBITS
10. FORM PARENT COMPANY GUARANTEE
APPENDIX 2 EXHIBIT 10
AGREED FORM OF PARENT COMPANY GUARANTEE
Zellstoff Xxxxxxx XxxX
Xxxxxxxxxxxx Xxxx 0
D-39596 Arneburg
This Guarantee is provided by RWE Solutions AG (the "Guarantor") pursuant to the
Contract for Engineering, Design, Procurement, Construction, Erection and Start
Up made as of ( ) August, 2002 (the "Contract") between Zellstoff Xxxxxxx XxxX,
00000 Arneburg (the "Owner") and RWE Xxxxxxxxx-Xxxxxxxx XxxX, 00000 Duisburg
(the "Contractor").
Guarantor, being the owner of the capital stock of the Contractor and in
consideration of and in order to induce the execution and delivery of and/or
performance of its obligations under the Contract by Owner, does hereby
unconditionally and irrevocably guarantee to the Owner:
(1) the due and punctual performance by or on behalf of Contractor of any
and all obligations of the Contractor contained in the Contract; and
(2) the payment when due of all sums which may become due on the part of
the Contractor under or pursuant to the Contract
(together the "Guaranteed Obligations").
We hereby undertake that if the Contractor fails to perform the Guaranteed
Obligations we shall assume the Guaranteed Obligations (SCHULDMITUBERNAHME) as
though they were our own and perform the Guaranteed Obligations at the place, to
the extent and in the manner as specified in the Contract. Guarantor agrees that
no invalidity or unenforceability of the Contract in breach of the
representations in paragraphs (3) and (4) below shall affect or impair its
liability under this Guarantee. Payments required to be made under this
Guarantee shall be made without set-off or counterclaim and free from deductions
or withholdings.
This Guarantee shall in all respects be a continuing, absolute, unconditional
and irrevocable performance guarantee, irrespective of the occurrence of any
circumstances which might otherwise constitute a legal or equitable defense. In
particular, the release by the Owner of any other security granted in connection
with the Contract in fulfillment of the Owner's obligations under any other
security agreement to effect such release shall not in any way affect the
obligations of the Guarantor hereunder.
The Guarantor in order to fulfill its obligations hereunder shall have the right
to appoint another contractor to complete the works, provided that such
appointment shall be subject to the prior written approval of the Owner, which
approval shall not be unreasonably withheld. At such time as Guarantor is
required to perform Contractor's obligations under the Contract, all rights and
obligations of Contractor under the Contract, including the right to receive all
payments due and owing by Owner to Contractor, shall be deemed to have been
transferred and assigned to it or to such contractor appointed by it; provided,
however, that (i) Guarantor first shall have notified Owner in writing of such
transfer and assignment of rights and
obligations, (ii) Owner shall have received Contractor's written acknowledgement
that its rights and obligations under the Contract have been transferred and
assigned, and (iii) Guarantor shall have executed and delivered to Owner an
indemnity reasonably satisfactory to Owner whereby the Guarantor agrees to
indemnify the Owner against and hold it harmless from any and all claims by or
through Contractor for payments from Owner under the Contract.
Guarantor hereby agrees that the Contract may be modified, amended and
supplemented with the written agreement of Contractor without Guarantor's
consent in any manner and agrees that no such modification, amendment or
supplement shall release, affect or impair its liability under this Guarantee.
Guarantor represents that:
(1) it is a company duly organized under the laws of the Federal Republic of
Germany and has and will have the necessary power to enable it to enter
into and perform its obligations under this Guarantee;
(2) the Contractor is a company duly organized under the laws of Germany and
has and will have the necessary power to enable it to enter into and
perform its obligations under the Contract;
(3) the Contract, as originally executed and delivered, has been duly
authorized by Contractor and has been duly executed by duly authorized
officers of Contractor;
(4) the obligations of Contractor under the Contract are, or when the
Contract becomes effective in accordance with its terms, will be valid
obligations of Contractor legally binding upon it and enforceable in
accordance with the terms and conditions of the Contract;
(5) this Guarantee has been duly authorized by Guarantor and has been duly
executed by duly authorized officers of Guarantor;
(6) Guarantor's obligations under this Guarantee are, or when this Guarantee
becomes effective in accordance with its terms, will be valid obligations
of Guarantor enforceable in accordance with the terms and conditions
hereof;
(7) all necessary authorisations to enable it to enter into this Guarantee
have been obtained and are and will remain in full force and effect;
(8) all necessary authorisations to enable the Contractor to enter into the
Contract have been obtained and are and will remain in full force and
effect;
(9) its obligations under this Guarantee rank and will rank at least equally
with all its other present and future unsecured and unsubordinated
obligations save that certain categories of its other obligations will,
however, be preferred in a liquidation by virtue of mandatory provisions
of statute;
(10) no stamp, registration or similar tax is payable, and no filing or
registration is required, in connection with the execution, performance
or enforcement of this Guarantee;
(11) the execution, delivery and performance of this Guarantee will not
conflict with (a) any agreement binding on it or any of its assets; (b)
its constitutional documents; or (c) any applicable law; and
(12) the execution, delivery and performance of the Contract by the Contractor
will not conflict with (a) any agreement binding on it or any of its
assets; (b) its constitutional documents; or (c) any applicable law.
This Guarantee shall become effective on the date on which all of the conditions
set forth in article 32 of the Contract have been satisfied (the `Commencement
Date') and will expire on the date on which all amounts payable by Contractor
under the Contract have been paid in full and all obligations to be performed by
Contractor under the Contract have been performed, after which date this
Guarantee shall become null and void unless Owner's written demand by registered
letter under this Guarantee has reached Guarantor at Frankfurt, Germany before 5
p.m. German time on such date.
Owner shall return this Guarantee to Guarantor no later than ten (10) days
following the date of its expiry provided that no demands are then outstanding.
This Guarantee may not be assigned or transferred by Guarantor without Owner's
prior written approval.
This Guarantee may not be assigned by Owner without Guarantor's prior written
approval, such approval not to be unreasonably withheld or delayed; provided
that no approval shall be required for the assignment of this Guarantee to
Owner's lenders by way of security and/ or any additional obligor or substitute
appointed pursuant to the Direct Agreement. Guarantor agrees to cooperate with
Owner's lenders and to provide an acknowledgement of any such assignment in such
terms as the lenders may reasonably require. Guarantor hereby waives notice of
acceptance and agrees with Owner that acceptance will be deemed to be effected
with receipt of this Guarantee by Owner.
Any dispute arising out of or in connection with the Guarantee shall be finally
and exclusively settled by arbitration pursuant to the "DEUTSCHE INSTITUTION FUR
SCHIEDSGERICHTSBARKEIT". The venue of arbitration proceedings shall be Berlin.
The language to be used in arbitration proceedings shall be English.
This Guarantee shall be governed by and construed in accordance with the laws of
Germany.
IN WITNESS WHEREOF,[ ] has caused this Guarantee to be executed by its
officers thereunto duly authorized on this (____) day of August, 2002.
By: By:
Title: Title:
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 3
TECHNICAL EXHIBITS
4 OBLIGATIONS OF OWNER
4.4 Owner's Permits and Licenses
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 3
EXHIBIT 4.4 - OWNER'S PERMITS AND LICENSES
The construction, erection and operation of the new mill is based on five (5)
major permits, see items 1-5 below.
The Owner is responsible for handling, applying and obtaining the following
permits and authorizations. In this activity the Contractor shall supply
assistance to the Owner as set forth in the Contract and according to
Appendix 3, Exhibit 13.
I. PERMIT BASED ON GERMAN FEDERAL LAW, CONCERNING THE PROTECTION AGAINST
HARMFUL EFFECTS ON THE ENVIRONMENT
The permitting Authority is the Regierungsprasidium Magdeburg, Land
Sachsen-Anhalt (LSA), which obtains assistance from other authorities and
experts (Sachverstandige) to control technical details.
1.1 The First Partial Permit '1 . Teilgenehmigung fur die Errichtung und den
Betrieb einer Zellstofffabrik fCir 555,450 ADtId" granted on January 22,
1998, is still valid to the extent that it has not been altered by the new
Permit (the "Modifying Permit"). It concerns the erection and operation of
the whole mill (except the Effluent Treatment Plant). Because Owner has
made several considerable changes to the original concept, for example *,
an application for a change in permit (Antrag zur wesentliche Anderung
der 1 . Teilgenehmiguflg) was submitted to the Authorities on 20 June 2001.
The Modifying Permit was granted on July 26, 2002 by the
RegierungspraSiditum Magdeburg, Land Sachsen-Anhalt (LSA). The modification
(Docket # 46b-44007-227) was made pursuant to Section 1 6 of the German
Federal Law, concerning the protection against harmful effects on the
environment.
The First Partial Permit (to the extent that it has not been altered by the
Modifying Permit) and the Modified Permit are binding documents for the
Plant.
1.2 During project execution, the Owner shall, upon receipt of adequate
information from the Contractor (if related to the Works):
- Inform the Authorities in an "Anderungsanzeige", in case of minor
changes to the mill concept and equipment.
- Apply to the Authorities in an "Anderungsantrag", in cases of major
changes to the mill concept and equipment.
1.3 The Owner shall apply for a second Partial Permit "2. Teilgenehmiguflg'
according to `Dampfkesselverordnung" (The Steam Boilers Act). Owner shall
submit this application to the Authorities after Owner has received the
required design specifications and construction drawings from Contractor.
The permitting procedure of the Authorities will require considerable time.
Zellstoff Stendal GmbH Kraft Pulp Mill Projec - Appendix 3 - Exhibit 4.4 -
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
Page 1
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
2. APPROVAL OF THE PLAN TO CONSTRUCT AND OPERATE THE EFFLUENT TREATMENT PLANT
FOR THE STENDAL PULP MILL (Planteststellungsverfahren)
The approving Authority is the HegierungsprasidiUrfl Magdeburg, Land
Sachsen-Anhait (LSA).
An approval 'Plant esstellungSbesChlUSS fur den Bau und Betrieb einer
Abwasserbehandlungwsantage der Zellstofffabrik Stendal" was issued on 11
September 1 998. A new application "Antrag auf Planfeststellung nach
Section 155 Xxxxxx Gesetz LSA fur Bau und Betrieb einer
AbwasserbehandluflgSanlage zugehorig zur geplanten Zellstofffabrik rn
lndustrie- und Gewerbepark Altmark", was submitted to the Authorities on 26
June 2001.
The approval for the Plant (PlanfeststellungsbeSchluSS) (Docket #
43.2.13-62632-62-2001) was granted on July 26, 2002, being a binding
document for the Plant.
3. Permit to withdraw surface water FROM THE ELBE River (Wasserrechtliche
Bewilligung fur die Entnahrne von OberflachenwasSer aus der Elbe)
Permitting Authority is the Regierungsprasidiufll Magdeburg, Land
Sachsen-Anhalt (LSA).
The present permit 'Wasserrechtliche Bewilligung zur Entnahme von Rohwasser
aus der Elbe" was approved on 6 November 1998 and is still valid, being a
binding document for the Plant.
This permit is satisfactory to the Contractor. No change in the permit is
foreseen or has been applied for.
4. PERMISSION TO DISCHARGE CLEANED EFFLUENT INTO THE ELBE River (Gehobene
Erlaubnis zur Einleitung von Abwasser in die Elbe)
Permitting Authority is the Regierungsprasidiurn Magdeburg, Land
Sachsen-Anhalt (LSA).
There is no existing permit.
An application for "Gehobene Erlaubnis zur Einleitung von Abwasser in die
Elbe" (permit for discharge of cleaned effluent into the Elbe River) was
submitted to the Authorities on 24 October 2001. The permit is expected to
be approved in due course.
The "Plant esstellungsbeschluss fur den Bau und Betrieb einer
Abwasserbehandlullgsafllage der Zellstofffabrik Stendal" defines
environmental compatibility and all limits for the emissions into the Elbe
River.
5. PERMIT TO CONSTRUCT AND OPERATE facilities FOR THE WATER INTAKE AND
EFFLUENT OUTFALL AT THE ELBE RIVER (Genehmigung fur Errichtung von einem
Em- BZW AUSLAUFBAUWERK am Ufer der Elbe).
Permitting Authority is the Xxxxxx- und Schifffahrtsarflt (Water and
Shipping Authority) Magdeburg.
Zellstoff Stendal GmbH Kraft Pulp Mill Projec - Appendix 3 - Exhibit 4.4 -
Page 2
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
The present permit `Xxxxx- und Schifffahrtspolizeiliche Genehmigung fur
Errichtung von einem Em- bzw Auslaufbauwerk am Ufer der Elbe" was granted
on April 15, 2002, being a binding document for the Plant.
6. OTHER PERMITS AND APPROVALS
APPROVAL TO CONSTRUCT PIPELINES AND CABLES FROM MAIN MILL SITE TO THE SITE
AT THE ELBE RIVER.
Owner has made agreements with the owner(s) of the land where the pipelines
and electrical and signal cables will be located between the main site arid
the Elbe River site. Owner shall secure approval for Contractor's use of
this road and for construction by Contractor of the piping and electrical
works between the two sites, and the construction of approximately 50
meters of access road between these two sites.
Owner shall apply for certain permits related to water drainage.
7. OTHER PERMITS.
With regard to all other registrations, licenses and permits which may be
required by the authorities and which are required to be in the name of the
Owner, for the temporary or permanent use of land or facilities,
construction and operation of the Plant, permission for construction works
during the night and weekend times, Start-up, testing and operation of the
Plant (other than those Permits required to be obtained by the Owner as
specified in this Appendix 3, Exhibit 4.4, except items 1.3 and 5), and if
directly related to the Works, the Contractor shall;
a) identify all such registrations, licenses and permits, and;
b) provide correct and complete information, data, documents and
applications related thereto, and;
c) provide all necessary assistance to the Owner to obtain, maintain, and
if necessary, amend such registrations, licenses and permits, all in due
time for the completion of the Plant in accordance with the Time Schedule.
The Contractor is responsible for obtaining any permits, which are required
to be applied for in the name of the Contractor, and as indicated in
Appendix 3, Exhibit 13.
The Contractor shall provide to the Owner for its review, approval and
signature, one (1) original copy of any applications prepared by Contractor
pursuant to this Exhibit 4.4.
The following permits are entirely the responsibility of the Owner and the
Contractor shall not support or provide assistance to the Owner in any way
for any research, preparation, submission or any other activity, or be
involved in any discussion with the authorities, except as otherwise
provided in the Contract:
1. Genehmigung des Landesbeauftragten fur Eisenbahnen in Sachsen -
Anhalt.
Zellstoff Stendal GmbH Kraft Pulp Mill Projec - Appendix 3 - Exhibit 4.4 -
Page 3
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
2. Bau-/BetirebsgeflehmigUflg fur die Eisenbahnanbindung und die
eventuell notwendige EisenbahnbrUcke.
3. Genehmigung zur Sondernutzung der Oftentlichen Straf3en (except
as required for Contractor's Works).
4. Eventuell riotwenciige BO8 Funkzulassung.
5. Gewerbeamtliche Genehmigung fur den Betrieb der Kantine.
6. Genehmigung fur Abtransport und Deponie von Abfallen aus der
Zellstoffproduktion (Abfallwirtschaftsgesetz).
7. Forstwirtschaftliche Genehm igungen fur die Holzbeschaffung.
8. NutzungsgerlehmigLlflg (Durchleitungsrecht) fur Rohrleitungen auf
nicht eigenem Gelande.
9. Genehmigungen im Zusammenhang mit Personal und Arbeitsrecht fur
Betriebspersonal.
10. Erfullung von Auflagen aus dem Feuerwehrgesetz Sachsen-Anhalt
(except if part of EPC Contract).
8. APPLICATIONS FOR PERMIT MODIFICATIONS
The following applications for Permit modifications have been filed by the
Owner:
a) Building size modifications for the * were FILED on July 16, 2002.
b) A building size modification for the * was filed on August 9, 2002.
c) Building size modifications for the * and the * were filed on
August 12, 2002.
d) A modification to replace the * with * in the * was filed on
August 12, 2002.
e) Modifications to the size of the * and the * were filed on
August 21, 2002.
Zellstoff Stendal GmbH Kraft Pulp Mill Projec - Appendix 3 - Exhibit 4.4 -
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
Page 1
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 3
Exhibit 20:
Attachment 1
The milestones set out below and identified by an asterisk, are "Milestones" for
the purposes of the contract.
*
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
[RWE SOLUTIONS LOGO]
ZELLSTOFF
STENDAL GmbH
APPENDIX 4
BASE CASE
*
* Xxxxxx has made an application to the SEC to redact this information. The
information has been filed separately with the SEC.
