EXHIBIT 10.12
EXECUTION COPY
MASTER CONSTRUCTION MANAGEMENT AGREEMENT
AMONG
CALPINE CONSTRUCTION MANAGEMENT COMPANY, INC.
CALPINE GENERATING COMPANY
AND
CERTAIN FACILITY OWNERS
DATED AS OF MARCH 23, 2004
TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS; GENERAL REFERENCES...................................... 1
1.1 Definitions......................................................... 1
1.2 General Terms....................................................... 1
ARTICLE 2. EXHIBITS............................................................. 2
2.1 Exhibits............................................................ 2
2.2 Conflicting Provisions.............................................. 2
ARTICLE 3. APPOINTMENT; SERVICES GENERALLY...................................... 2
3.1 Appointment......................................................... 2
3.2 Services............................................................ 3
3.3 Personnel........................................................... 5
3.4 Authority of Construction Manager................................... 5
3.5 Right to Request Instruction....................................... 5
3.6 Cooperation and Consultation....................................... 6
3.7 Construction Manager Representative................................. 6
3.8 Limitations on Authority............................................ 6
ARTICLE 4. OWNER'S RESPONSIBILITIES............................................. 6
4.1 General............................................................. 6
4.2 Construction Financing.............................................. 6
4.3 Owner Representative................................................ 6
4.4 Site Surveys; Access................................................ 7
4.5 Permits, Easements,etc.............................................. 7
4.6 Professional Services............................................... 7
4.7 Prompt Provision.................................................... 7
4.8 Hazardous Substances................................................ 7
4.9 Taxes............................................................... 7
ARTICLE 5. CONSTRUCTION MANAGER'S COMPENSATION.................................. 7
5.1 Generally........................................................... 7
5.2 Budget.............................................................. 8
5.3 Payment............................................................. 8
5.4 Interest............................................................ 8
5.5 Accounting and Auditing............................................. 8
5.6 No Fees............................................................. 9
ARTICLE 6. INDEMNIFICATION AND LIMITATIONS ON LIABILITY......................... 9
6.1 Indemnification By Construction Manager............................. 9
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6.2 Indemnification by Facility Owner................................... 9
6.3 Environmental Indemnity............................................. 9
6.4 Limitation of Liability............................................. 9
6.5 Limitations on Recourse............................................. 10
6.6 No Warranties or Guarantees......................................... 10
ARTICLE 7. TERM AND TERMINATION................................................. 10
7.1 Term ............................................................... 10
7.2 Termination......................................................... 10
7.3 Termination for Convenience......................................... 11
7.4 Rights Upon Termination............................................. 12
7.5 Termination Payment................................................. 12
7.6 Suspension.......................................................... 12
ARTICLE 8. FORCE MAJEURE....................................................... 13
8.1 Excuse for Force Majeure............................................ 13
8.2 Legal Changes....................................................... 13
ARTICLE 9. INSURANCE........................................................... 13
9.1 Owner's Insurance................................................... 13
9.2 Construction Manager's Insurance.................................... 13
9.3 Evidence of Insurance............................................... 14
9.4 Endorsements........................................................ 14
9.5 Coverage under Owner's Policies..................................... 14
ARTICLE 10. MISCELLANEOUS....................................................... 14
10.1 Assignment.......................................................... 14
10.2 Governing Law;Forum................................................. 14
10.3 Entire Agreement.................................................... 14
10.4 Survival............................................................ 15
10.5 Waivers............................................................. 15
10.6 Notices............................................................. 15
10.7 Partial Invalidity.................................................. 15
10.8 Not for Benefit of Third Parties.................................... 16
10.9 Headings............................................................ 16
10.10 Counterparts........................................................ 16
APPENDIX A Definitions
APPENDIX B Facility Descriptions
EXHIBIT A Services Description
EXHIBIT B Construction Management Budget
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MASTER CONSTRUCTION MANAGEMENT AGREEMENT
THIS MASTER CONSTRUCTION MANAGEMENT AGREEMENT (the "Agreement"),
dated as of March 23, 2004 (the "Effective Date"), is entered into by and among
CALPINE GENERATING COMPANY, LLC, a Delaware limited liability company ("CGC"),
each of the wholly-owned subsidiaries of CGC listed on the signature page hereof
(each a "Facility Owner"), and CALPINE CONSTRUCTION MANAGEMENT COMPANY, INC., a
Delaware corporation ("Construction Manager").
RECITALS
A. Each of Facility Owners owns and is presently constructing gas-fired,
combined-cycle electric generation facilities described on Appendix B attached
hereto (each a "Facility").
B. The Facility Owners are indirect, wholly-owned subsidiaries of CGC.
C. Each Facility Owner desires to enter into this Agreement with
Construction Manager pursuant to which Construction Manager shall provide the
Services with respect to such Facility Owner's Facility as more fully described
herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and other valuable consideration, the parties hereby agree as
follows:
ARTICLE 1. DEFINITIONS; GENERAL REFERENCES
1.1 Definitions. Capitalized terms used in this Agreement without other
definition shall have the meanings specified in Appendix A to this Agreement,
unless the context requires otherwise.
1.2 General Terms. As used in this Agreement, the terms "herein,"
"herewith," and "hereof are references to this Agreement (including its
Exhibits), taken as a whole, the term "includes" or "including" shall mean
"including, without limitation," and references to a "Section," "subsection,"
"clause," "Article," "Exhibit," "Appendix," or "Schedule" shall mean a Section,
subsection, clause, Article, Exhibit, Appendix or Schedule of this Agreement, as
the case may be, unless in any such case the context requires otherwise. All
references to a given agreement, instrument or other document shall be a
reference to that agreement, instrument or other document as modified, amended,
supplemented and restated through the date as of which such reference is made,
and reference to a law includes any amendment or modification thereof. The
singular shall include the plural and the masculine shall include the feminine
and neuter, and vice versa. Where the words "required," "approved,"
"satisfactory," "determined," "acceptable," "decision" or words of like import
are used in this Agreement, action by Facility Owner is indicated unless the
context clearly indicates otherwise.
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ARTICLE 2. EXHIBITS
2.1 Exhibits. This Agreement consists of this document itself and the
following Exhibits which are specifically made a part hereof by reference:
EXHIBIT A - Services Description
EXHIBIT B - Construction Management Budget
2.2 Conflicting Provisions. In the event of any conflict between this
document and any Exhibit hereto, the terms and provisions of this Agreement, as
amended from time to time, shall control. In the event of any conflict among the
Exhibits, Exhibit A shall have priority over Exhibit B. Subject to the
foregoing, the several instruments forming part of this Agreement are to be
taken as mutually explanatory of one another and in the case of ambiguities or
discrepancies within or between such parts the same shall be explained and
adjusted by the issuance of a written instruction by Facility Owner.
ARTICLE 3. APPOINTMENT; SERVICES GENERALLY
3.1 Appointment.
(a) Each Facility Owner hereby appoints and retains Construction Manager
to provide, throughout the Term, the Services with respect to such Facility
Owner's Facility on the terms and conditions set forth in this Agreement.
Construction Manager hereby accepts such appointment and agrees to perform the
Services in accordance with the terms and conditions of this Agreement. This
Agreement, including all exhibits and attachments, shall constitute a separate
contract between each Facility Owner and Construction Manager with respect to
the Facility owned by such Facility Owner, and "Facility Owner" shall be
understood to mean the owner of the Facility in question as indicated on
Appendix B. Construction Manager and each Facility Owner agree that, upon the
reasonable request of either party, they will execute separate individual
construction management agreements with respect to such Facility Owner's
Facility on the same terms and conditions (modified as necessary to reflect the
fact that only one Facility is covered) as are set forth in this Agreement. The
obligations and liabilities of Construction Manager and the applicable Facility
Owner with respect to a given Facility are independent of the obligations and
liabilities of Construction Manager and the other Facility Owners with respect
to the other Facilities, and events giving rise to a right to terminate this
Agreement with respect to one Facility shall not entitle CGC, another Facility
Owner or Construction Manager, as applicable, to terminate this Agreement with
respect to any other Facility.
(b) If CGC sells or otherwise transfers a Facility subject to this
Agreement as permitted under the agreements between CGC and the holders of the
Secured Obligations, CGC, the applicable Facility Owner and Construction Manager
shall terminate this Agreement with respect to such Facility and the related
Facility Owner, and, from and after the effective date of such sale, CGC, the
applicable Facility Owner and Construction Manager will be released from all
future liabilities, and will no longer have any obligations, hereunder with
respect to such Facility. In such event, CGC, the applicable Facility Owner(s)
and Construction Manager shall amend this Agreement, including Appendix B
hereto, to delete such Facility and the related Facility Owner..
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3.2 Services. Construction Manager shall perform or cause to be performed
on behalf of each Facility Owner the following management, administrative and
other support services in connection with the day-to-day business of such
Facility Owner relating to the design, engineering, procurement, construction,
start-up and testing of such Facility Owner's Facility (collectively, the
"Services"). All Services shall be performed in a manner consistent with the
Construction Management Budget for the Facility.
3.2.1 General Management and Administration Construction Manager
shall be fully responsible for the day-to-day management and administration of
all of each Facility Owner's business relating to the design, engineering,
procurement, construction, start-up and testing of such Facility Owner's
Facility through the Final Completion Date for such Facility, including, without
limiting the generality of the scope of Services described in this Section 3.2,
the specific responsibilities attached in the Services Description-set forth as
Exhibit A hereto and the coordination of work under the applicable Construction
Agreements, but excluding (a) any responsibilities of the Facility Owner set
forth in Article 4 hereof and (b) any responsibilities of the Operator under the
Operating and Maintenance Agreement.
3.2.2 Construction Parties and Construction Agreements. Subject to
Section 3.8, Construction Manager shall represent each Facility Owner in all
matters involving the Construction Parties related to the Facility Owner's
Facility, shall coordinate the activities of the applicable Construction Parties
under the applicable Construction Agreements and shall negotiate (subject to the
applicable Facility Owner's approval) any necessary amendments to or change
orders under such Construction Agreements and administer on behalf of the
applicable Facility Owner the performance of all of such Facility Owner's
obligations and responsibilities thereunder. Construction Manager shall manage
construction of each Facility in accordance with the requirements of the
Construction Agreements and Prudent Engineering Practices. Construction Manager
shall use all commercially reasonable efforts to achieve Completion of each
Facility by the Scheduled Completion Date for such Facility set forth on
Appendix B, but does not guarantee or warrant achieving Completion by that date.
3.2.3 Performance Testing; Completion.
(a) Before mechanical completion has been achieved for a
Facility in accordance with the applicable Construction Contract, Construction
Manager shall review and cause performance testing for all subsystems in such
Facility and, as such subsystems are completed and turned over by the relevant
contractor for such subsystems, shall test such subsystems and accept or reject
them, as appropriate. Construction Manager shall also cause such Facility to be
started up in accordance with Prudent Engineering Practices.
(b) After mechanical completion has been achieved for a
Facility in accordance with the applicable Construction Contract, Construction
Manager shall start up such Facility in accordance with the requirements of the
applicable Construction Agreements and Prudent Engineering Practices and shall
cause performance testing of such Facility, with the objective of causing a
Successful Performance Test to occur on or prior to the applicable Performance
Test Target Date. Construction Manager shall, without limitation, cause
performance of each of the test procedures set forth in the applicable Major
Supply Agreements
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and such other procedures as may have been developed by Construction Manager in
the due course of project implementation.
(c) Each Facility Owner acknowledges that Construction Manager
is not providing any performance guarantees, nor guarantying completion of a
Successful Performance Test on or prior to the applicable Performance Test
Target Date. Construction Manager's sole obligation with respect to performance
testing of a Facility is to cause the applicable Performance Tests to be
conducted in accordance with the test procedures set forth in the applicable
Major Supply Agreements and such other procedures as may have been developed by
Construction Manager in the due course of project implementation, and to
otherwise comply with the provisions of this Section 3.2.3.
(d) When Construction Manager believes that a Successful
Performance Test has been completed for a Facility, it shall deliver to the
applicable Facility Owner a Notice of Completion. The Notice of Completion shall
contain a report in a form reasonably acceptable to such Facility Owner and with
sufficient detail to enable such Facility Owner to determine that all such
conditions to a Successful Performance Test have been satisfied.
(e) Each Facility Owner will use all reasonable efforts to
notify Construction Manager at the earliest possible date of any inadequacy,
inaccuracy or otherwise unacceptable information or results set forth in the
Notice of Completion given to such Facility Owner. In the event that a Facility
Owner believes that a Successful Performance Test has not been achieved,
Construction Manager shall promptly take such action as may be taken by such
Facility Owner under the applicable Construction Agreements as will enable
Construction Manager to demonstrate a Successful Performance Test for the
Facility in question and shall issue to such Facility Owner another Notice of
Completion. Such procedure shall be repeated as necessary until a Successful
Performance Test has been achieved for the Facility in question, in which case,
Completion of such Facility shall be deemed to have occurred on the date of such
Facility Owner's receipt of the most recently delivered Notice of Completion,
which shall be considered the "final" Notice of Completion.
(f) If, upon completion of each of the Performance Tests for a
Facility, it is not established that a Successful Performance Test has occurred,
Construction Manager shall, until the applicable Performance Test Target Date
(and thereafter, if directed by such Facility Owner), cause to be re-performed
(consistently with Prudent Engineering Practices), the Performance Tests for the
Facility in question in order to establish that a Successful Performance Test
has occurred. Notwithstanding the foregoing, if prior to the applicable
Performance Test Target Date, a Facility Owner, in consultation and agreement
with Construction Manager, determines (i) that the applicable Performance Tests
are not likely to be successfully completed or (ii) that it will accept such
Facility as complete at less than the level of the applicable Performance
Guarantees and/or that Completion shall be deemed to have occurred based on the
performance of such Performance Tests, such Facility Owner may require
Construction Manager to pursue on such Facility Owner's behalf, all remedies
available to such Facility Owner pursuant to the terms of the applicable Major
Supply Agreements.
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(g) After successful completion of the Performance Tests for a
Facility, Construction Manager shall cause Final Completion for such Facility to
occur as soon as reasonably practicable.
3.3 Personnel. Construction Manager shall provide and make available as
necessary all professional, supervisory, managerial, administrative and other
personnel as are reasonably necessary to perform the Services, and shall
supervise the operation's personnel provided by a Facility Owner during start-up
and testing for such Facility Owner's Facility. Personnel provided by
Construction Manager shall be qualified and experienced in the duties to which
they are assigned. The working hours, rates of compensation and all other
matters relating to the employment of individuals employed by Construction
Manager or its Affiliates in the performance of the Services shall be determined
solely by Construction Manager or its respective Affiliates, but in a manner
consistent with industry standards and rates, and the Construction Management
Budget for the applicable Facility. Construction Manager also shall arrange, at
each Facility Owner's expense, for suitable office and other related facilities
and supplies at the applicable Facility site for all personnel working at such
Facility site.
3.4 Authority of Construction Manager. Subject to Section 3.8 hereof,
Construction Manager is hereby granted, to the fullest extent permitted by law,
during the Term, the right, power and authority to do on behalf of each Facility
Owner in such Facility Owner's name all things which are necessary, proper or
desirable to carry out the duties and responsibilities of Construction Manager
under this Agreement with respect to such Facility Owner and its Facility,
including the right, power and authority to engage in any actions and to
execute, enter into, perform and carry out contracts and undertakings of any
kind whatsoever necessary or incidental to the accomplishment of the purposes
and objectives of such Facility Owner in connection with the design,
engineering, procurement, construction, start-up and testing of such Facility
Owner's Facility, so long as such activities, contracts and undertakings may be
lawfully carried out or performed by or on behalf of such Facility Owner, and
provided that in no event shall Construction Manager's authority hereunder be
greater than or extend beyond the authority of such Facility Owner, as such
authority may be limited by any covenant or other restriction contained in any
applicable Construction Agreement. Each Facility Owner agrees, from time to
time, to execute and deliver any additional written authorizations or powers of
attorney which may be reasonably requested by Construction Manager to permit it
to carry out the purpose and intent of this Section. Construction Manager
represents and warrants to each Facility Owner that it has reviewed each
Construction Agreement related to such Facility Owner's Facility and is familiar
with the obligations of such Facility Owner under each such agreement and shall
not take any actions that could reasonably be expected to cause such Facility
Owner to be in breach of such agreements.
3.5 Right to Request Instruction. At any time, Construction Manager may,
if it reasonably deems it to be necessary or appropriate, request written
instructions from a Facility Owner, within a reasonable period prior to the
necessity for taking action, with respect to any matter contemplated by this
Agreement and may defer action thereon pending the receipt of such written
instructions. Actions taken by Construction Manager, its officers, employees and
representatives in accordance with the written instructions of a Facility Owner
shall be deemed to be proper conduct within the scope of Construction Manager's
authority under this Agreement.
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3.6 Cooperation and Consultation. Each Facility Owner agrees that it shall
cooperate with Construction Manager in the performance of Construction Manager's
Services and, subject to the provisions of Article 4, shall not take any
independent or unilateral action with respect to the applicable Construction
Agreements or any other matter with respect to which Construction Manager has
authority under this Agreement, without first consulting Construction Manager.
3.7 Construction Manager Representative. Construction Manager shall
appoint a project manager with respect to each Facility. In all matters
concerning or arising under this Agreement, Construction Manager shall be bound
by the written communications, directions, requests and decisions made by such
project manager. The appointment of such project manager hereunder shall remain
in full force and effect until a written notice of substitution or replacement
is delivered by Construction Manager to the applicable Facility Owner; provided
that any successor project manager shall be subject to approval by such Facility
Owner, which approval shall not be unreasonably withheld. Unless a Facility
Owner identifies its reasons for not approving any such successor in reasonable
detail in a written notice to the Construction Manager delivered within ten (10)
Days following Such Facility Owner's receipt of written notice of such
successor's nomination by Construction Manager, such successor shall be deemed
approved by such Facility Owner.
3.8 Limitations on Authority. Notwithstanding any other provision hereof
to the contrary, Construction Manager shall not without the prior written
consent of the applicable Facility Owner (a) execute or otherwise approve any
amendments or modifications to any of the Construction Agreements related to
such Facility Owner's Facility, any other agreements related to the ownership,
construction or operation of such Facility, or any Governmental Approvals
related to such Facility, or (b) execute or otherwise approve any change orders
under any of the Construction Agreements related to such Facility.
ARTICLE 4. OWNER'S RESPONSIBILITIES
4.1 General. Each Facility Owner shall furnish, or cause to be furnished,
to Construction Manager, at such Facility Owner's expense, such information,
documentation, services and materials, which are not required to be provided by
Construction Manager hereunder and which are reasonably requested by
Construction Manager to permit it to perform the Services and to otherwise
fulfill its obligations under this Agreement. All such items shall be made
available at such times and in such manner as may be required by Construction
Manager for the expeditious and orderly performance of the Services.
4.2 Construction Costs. Each Facility Owner shall be responsible for
payment of all amounts payable to the Construction Manager under this Agreement
and to each of the Construction Parties under the Construction Agreements
related to such Facility Owner's Facility.
4.3 Owner Representative. Within ten (10) Days after the execution date of
this Agreement (or, in the case of Facilities and Facility Owner's added after
the Effective Date, within ten (10) Days after being added to this Agreement),
each Facility Owner shall appoint an Owner Representative. In all matters
concerning or arising under this Agreement, each Facility Owner shall be bound
by the written communications, directions, requests and decisions made
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by its Owner Representative. Each Facility Owner shall notify Construction
Manager in writing of such representative, and such appointment shall remain in
full force and effect until a written notice of substitution or replacement is
delivered by such Facility Owner to Construction Manager.
4.4 Site Surveys; Access. Each Facility Owner shall furnish all necessary
surveys of the applicable Facility site, including a description of the physical
characteristics of such Facility site, soil reports and subsurface
investigations of such Facility site, a description of utility locations on and
adjacent to such Facility site, and a legal description of such Facility site.
Each Facility Owner shall also provide Construction Manager all access to the
applicable Facility site that the Construction Manager considers necessary to
perform its Services hereunder.
4.5 Permits, Easements, etc. Each Facility Owner shall secure and pay for
necessary permits, licenses, approvals, easements, and charges required for the
construction, use or occupancy of permanent structures or for permanent changes
in existing facilities in connection with such Facility Owner's Facility.
4.6 Professional Services. Each Facility Owner shall furnish such legal
services as may be necessary for providing the items set forth in this Article 4
related to such Facility Owner's Facility and such auditing services as such
Facility Owner may require.
4.7 Prompt Provision. The services, information, surveys and reports to be
furnished by each Facility Owner shall be furnished with reasonable promptness
at such Facility Owner's expense, and Construction Manager shall be entitled to
rely upon the accuracy and completeness thereof.
4.8 Hazardous Substances. Each Facility Owner shall, in consultation with
Construction Manager and with Construction Manager's assistance as reasonably
requested, prepare a Hazardous Substances Plan for such Facility Owner's
Facility, and update such plan from time to time as appropriate. Construction
Manager shall, at such Facility Owner's cost, observe the provisions of the
Hazardous Substance Plan applicable to Construction Manager.
4.9 Taxes. Each Facility Owner shall pay, as and when due, all property,
ad valorem, business and other taxes assessed or levied on or with respect to
such Facility Owner's Facility by any federal, state or local governmental
agency.
ARTICLE 5. CONSTRUCTION MANAGER'S COMPENSATION
5.1 Generally. As compensation in full to Construction Manager for
performance of its Services hereunder, each Facility Owner shall pay to
Construction Manager the sum of the following (hereinafter collectively referred
to as the "Construction Manager's Compensation") with respect to such Facility
Owner's Facility:
5.1.1 Project Personnel Cost Reimbursement. An amount equal to the
sum of all direct wages and salaries (including overtime) which the Construction
Manager actually pays to Project Personnel employed or retained solely to
provide Services relating to such Facility Owner's Facility.
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5.1.2 Additional Reimbursement. Without duplication of the amounts
described in Section 5.1.1, an amount equal to the sum of all amounts actually
paid by Construction Manager for any items provided for in the Construction
Management Budget with respect to such Facility Owner's Facility.
5.1.3 Third Party Costs. Without duplication of the amounts
described in Sections 5.1.1 and 5.1.2, an amount equal to the sum of all third
party costs incurred by Construction Manager in the performance of the Services
with respect to such Facility Owner's Facility.
5.2 Budget. The Construction Management Budget for each Facility shall
constitute the control document pursuant to which Construction Manager shall
incur expenses with respect to such Facility hereunder. If at any time during
the Term, the Construction Manager anticipates a Construction Management Budget
overrun in the aggregate of fifteen percent (15%) or greater in any expense
category set out in the then current Construction Management Budget with respect
to a Facility, Construction Manager shall so notify the applicable Facility
Owner in writing and shall prepare a proposed variance from the applicable
Construction Management Budget incorporating such change. Except in the case of
an Emergency, no expense shall be incurred by Construction Manager which will
cause any expense category in the Construction Management Budget with respect to
a Facility to be exceeded by more than fifteen percent (15%), unless Facility
Owner that owns such Facility has approved such variance in writing.
5.3 Payment. Within ten (10) Days after the last Day of each month after
the Effective Date during the Term, Construction Manager shall send each
Facility Owner an invoice setting forth in reasonable detail the amount of
Construction Manager's Compensation for such preceding month with respect to
such Facility Owner's Facility, accompanied by such supporting documentation and
additional data as such Facility Owner may reasonably request. Such amounts
shall be due and payable by each Facility Owner within thirty (30) Days of
Construction Manager's submission of each invoice therefor. Construction Manager
shall be paid any amounts included in the applicable Construction Management
Budget for Services rendered by it or for Project Personnel costs or other costs
incurred by it prior to the Effective Date with respect to a Facility within
thirty (30) Days after the Effective Date. Unless otherwise agreed by a Facility
Owner, Construction Manager shall provide such Facility Owner with a partial
release or waiver of lien in conjunction with each payment of Construction
Manager's Compensation.
5.4 Interest. After the Effective Date, all payments due Construction
Manager hereunder but unpaid shall bear interest at the lower of (a) the "prime
rate" as published from time to time in the Wall Street Journal, plus two
percent (2%), or (b) the highest rate permitted under applicable law.
5.5 Accounting and Auditing. Construction Manager shall keep accurate and
complete accounting records in support of all cost xxxxxxxx to each Facility
Owner, in accordance with generally recognized accounting principles and
practices consistently applied. Each Facility Owner and its audit
representatives shall have the right at any reasonable time or times to examine,
audit, and reproduce the records, vouchers, and other source documents which
serve as the basis for Construction Manager's Compensation with respect to such
Facility Owner's Facility. Such documents shall be available for examination,
audit, and reproduction by a
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Facility Owner and its representatives for three (3) years after the Final
Completion Date for the applicable Facility.
5.6 No Fees. In no event will Construction Manager receive any fee or
additional compensation (other than Construction Manager's Compensation) for the
Services.
ARTICLE 6. INDEMNIFICATION AND LIMITATIONS ON LIABILITY
6.1 Indemnification By Construction Manager. Subject to Sections 6.4 and
6.5, Construction Manager shall indemnify, defend and hold each Facility Owner,
CGC and their respective Indemnitees harmless from and against any and all
claims, actions damages, expenses (including reasonable attorneys' fees), losses
or liabilities incurred by or asserted against such Facility Owner, CGC and
their respective Indemnitees for injury (including death) to persons or damage
or destruction to property and any and all fees or penalties incurred by such
Facility Owner, CGC or their respective Indemnitees, including damages arising
from environmental contaminants, to the extent that such claims, actions,
damages, expenses, losses or liabilities, including damages arising from
environmental contaminants, are caused by the negligence, fraud or willful
misconduct of Construction Manager or its Affiliates (other than the Facility
Owner), employees, partners, agents, officers or directors.
6.2 Indemnification by Facility Owner. Each Facility Owner shall
indemnify, defend and hold Construction Manager and its Indemnitees harmless
from and against any and all claims, actions, damages, expenses (including
reasonable attorneys' fees), losses or liabilities incurred by or asserted
against Construction Manager or its Indemnitees to the extent that such claims,
actions, damages, expenses, losses or liabilities are caused by the negligence,
fraud or willful misconduct of such Facility Owner or its Affiliates (other than
Construction Manager and Operator), employees, partners, agents, officers or
directors.
6.3 Environmental Indemnity. Notwithstanding Section 6.1, each Facility
Owner hereby waives any claim for liability against and agrees to defend,
indemnify and hold Construction Manager and its Indemnitees harmless from and
against any and all claims, actions, damages, fines, penalties, expenses
(including those actions asserted by any governmental or regulatory body)
incurred by or asserted against Construction Manager or its Indemnitees that
arise out of or result from (a) any environmental contamination of such Facility
Owner's Facility site or the property of any third party, or the failure of any
Hazardous Substance Handling to be carried out in accordance with applicable
laws or regulations, whether arising before or after the Effective Date, or (b)
to the extent a Facility Owner has obtained insurance coverage with respect to
any matter giving rise to a claim, except, as to any such contamination or
failure occurring after the Effective Date, to the extent that such claims,
actions damages, fines, penalties or expenses arise directly from Construction
Manager's negligence or willful misconduct.
6.4 Limitation of Liability. Notwithstanding any provision in this
Agreement to the contrary, except as set forth below in this Section 6.4, no
party to this Agreement nor its Indemnitees shall be liable hereunder for
consequential or indirect loss or damage, including loss of Project Revenues,
cost of capital, loss of goodwill, increased operating costs, or any other
special or incidental damages; provided, however, that the foregoing limitation
shall not apply to
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damages resulting from a party's willful misconduct; provided, further, that
nothing in this sentence shall limit the obligations of a Facility Owner and
Construction Manager under Sections 6.1, 6.2 and 6.3 to indemnify the other
party with respect to claims by third parties otherwise covered by the
provisions of Sections 6.1, 6.2 and 6.3. Except for damages resulting from
Construction Manager's willful misconduct, Construction Manager's maximum
cumulative liability under this Agreement with respect to a given Facility shall
be limited to $250,000 per calendar year (prorated for partial calendar years if
this Agreement terminates with respect to a given Facility on a date other than
December 31) plus the proceeds available from, and actually collected under, any
policy of insurance then in force with respect to the Services, the insurer of
which waives subrogation against Construction Manager (which proceeds shall be
applied directly to satisfy Construction Manager's liability under this
Agreement); provided, however, that the foregoing limitation of liability shall
not apply to damages resulting from Construction Manager's fraud or willful
misconduct. The parties further agree that the waivers and disclaimers of
liability, indemnities, releases from liability, and limitations on liability
expressed in this Agreement (including in Sections 6.4 and 6.5) shall survive
termination or expiration of this Agreement, and shall apply (unless otherwise
expressly indicated), whether in contract, equity, tort or otherwise, even in
the event of the fault, negligence, including sole negligence, strict liability,
or breach of warranty of the parry indemnified, released or whose liabilities
are limited, and shall extend to the partners, principals, directors, officers
and employees, agents and related or affiliated entities of such party, and
their partners, principals, directors, officers and employees.
6.5 Limitations on Recourse. The obligations of the parties under this
Agreement are obligations of the parties only, and no recourse shall be
available against any officer, director, employee, stockholder or partner of a
party or its Affiliates. In addition, recourse against each Facility Owner and
CGC is limited to such Facility Owner's interest in the Facility or CGC's
interest in each of the Facilities, as applicable, including all tangible and
intangible assets comprising the Facility, the revenue and income produced by
the Facility and the proceeds of any of the foregoing.
6.6 No Warranties or Guarantees. EXCEPT AS EXPRESSLY SET FORTH HEREIN,
CONSTRUCTION MANAGER MAKES NO WARRANTY OR GUARANTY TO CGC, ANY FACILITY OWNER OR
ANY OTHER PERSON OR ENTITY, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE
PROJECT, THE SERVICES, OR THE SUBJECT MATTER OF THIS AGREEMENT, AND CONSTRUCTION
MANAGER EXPRESSLY DISCLAIMS, AND CGC AND EACH FACILITY OWNER EXPRESSLY WAIVE,
ANY AND ALL WARRANTIES IMPLIED BY LAW.
ARTICLE 7. TERM AND TERMINATION
7.1 Term. This Agreement shall become effective on the Effective Date and,
if not earlier terminated pursuant to this Article 7, shall expire upon the
Final Completion Date (the "Term").
7.2 Termination.
10
7.2.1 Either party hereto may terminate this Agreement with respect
to some or all of the Facilities for cause upon thirty (30) Days' prior written
notice to the other party in the event of a Bankruptcy Event affecting such
other party.
7.2.2 Each Facility Owner may terminate this Agreement with respect
to such Facility Owner's Facility upon thirty (30) Days' prior written notice to
Construction Manager in the event that (a) Construction Manager (i) fails to
perform its material obligations hereunder in accordance with the requirements
of this Agreement with respect to such Facility and (ii) does not cure such
failure within thirty (30) Days of the date of a notice from such Facility Owner
demanding such cure (or within such longer period of time as is reasonably
necessary to accomplish such cure, but not to exceed ninety (90) Days in the
aggregate, if cure cannot be reasonably accomplished within such thirty (30) Day
period and Construction Manager diligently commences and continues such cure in
such period) or (b) Construction Manager is unable to substantially perform the
Services in a material respect because of the happening of an event of Force
Majeure with respect to such Facility which event would not similarly affect
another construction manager having qualifications and availability to perform
the Services similar to those of Construction Manager or (c)in the event of a
Bankruptcy Event of Construction Manager's guarantor or (d) Construction
Manager's guarantor disaffirms, disclaims, or rejects, in whole or in part, or
challenges the validity of, the guaranty.
7.2.3 Construction Manager may terminate this Agreement upon thirty
(30) Days' prior written notice to the applicable Facility Owner in the event
that (i) such Facility Owner fails to make any payments, as and when due in each
case, under this Agreement or under any insurance policy relating to such
Facility Owner's Facility or to any taxing authority having jurisdiction over
such Facility or such Facility Owner in respect of this Agreement, or (ii) the
breach by such Facility Owner of any of its obligations under this agreement
would cause Construction Manager, as it may determine in its reasonable
discretion, to violate applicable Laws or subject it to unreasonable liability.
7.2.4 Notwithstanding any provision herein to the contrary, no
failure of Construction Manager to do any act or perform any Services that
results from lack of budget authority or other required approval by a Facility
Owner shall be deemed a breach of this Agreement with respect to such Facility
Owner and such Facility Owner's Facility.
7.3 Termination for Convenience.
7.3.1 Each Facility Owner shall have, at any time during the Term,
the right to terminate this Agreement with respect to such Facility Owner's
Facility, without cause, upon thirty (30) Days' notice to Construction Manager.
7.3.2 If a Facility Owner elects to terminate this Agreement with
respect to such Facility Owner's Facility pursuant to this Section 7.3, the
parties shall confer and set forth a description of the activities required in
order to terminate in an orderly manner, including matters addressed in Section
7.4. In event of any termination pursuant to this Section 7.3, a Facility Owner
shall have the right to request that Construction Manager continue to maintain
or assist in training a replacement Construction Manager and to perform such
other transition work with respect to such Facility Owner's Facility as Facility
Owner may reasonably request, and
11
Construction Manager shall comply with any such request for a period not to
exceed six (6) months. In the event of any such request, such Facility Owner
shall pay to Construction Manager the Construction Manager's compensation set
forth in Section 5.1.1 hereof, prorated over the transition period described in
this Section 7.3, and any amounts due under Sections 5.1.2 and 5.1.3 hereof.
Upon any such termination, such Facility Owner shall pay to Construction
Manager, in addition to the amounts described in the preceding sentence, and
otherwise, in full satisfaction and discharge of all liabilities and obligations
owed to Construction Manager with respect to this Agreement related to such
Facility Owner's Facility, the amounts specified in Section 7.5.
7.4 Rights Upon Termination. Upon any expiration or termination of this
Agreement with respect to a Facility, Construction Manager shall deliver to the
applicable Facility Owner at such Facility Owner's principal place of business
all records, documents, accounts, files and other materials of such Facility
Owner or pertaining to such Facility Owner's business as Facility Owner may
reasonably request. Such Facility Owner shall assume and become liable for any
contracts or obligations that Construction Manager may have undertaken with
third parties in connection with the Services as permitted in this Agreement
with respect to such Facility Owner's Facility, and Construction Manager shall
execute all documents and take all other reasonable steps requested by such
Facility Owner which may be required to assign to and vest in Facility Owner all
rights, benefits, interests and titles in connection with such contracts or
obligations with respect to such Facility Owner's Facility. Expiration or
termination of this Agreement shall not relieve any party hereto of liability
which has accrued or arisen prior to the date of such expiration or termination.
7.5 Termination Payment. In the event of a termination of this Agreement
with respect to a Facility by Construction Manager pursuant to Section 7.2. or
by a Facility Owner pursuant to Section 7.3, Construction Manager shall be
entitled, in addition to all other amounts due hereunder (including under
Section 5.1 hereof) as of the date of termination and regardless the reason for
termination, to a termination payment from such Facility Owner equal to all
costs and expenses reasonably incurred by Construction Manager as a direct
result of such termination, including (a) all relocation and severance costs
incurred with respect to Construction Manager's employees related to such
Facility Owner's Facility that Construction Manager is contractually or legally
obligated to pay to such employees (other than pursuant to any "golden
parachute" or other like provisions contained in such contracts) or that are
incurred with the prior written consent of such Facility Owner in accordance
with established personnel policies of Construction Manager, and (b) the cost
reasonably incurred by Construction Manager in withdrawing from the applicable
Facility and otherwise demobilizing its operations with respect to such
Facility. Such amounts shall be due and payable by such Facility Owner or a new
owner of such Facility, as applicable, within thirty (30) Days after
Construction Manager's submission of an invoice therefor.
7.6 Suspension. In addition to the termination rights set forth in this
Article 7, in the event a Facility Owner fails (a) to pay amounts due to
Construction Manager hereunder as and when due, (b) to pay any taxes on the
applicable Facility as and when due, (c) to maintain the insurance required to
be maintained by such Facility Owner hereunder or (d) to perform any of its
other obligations hereunder with respect to such Facility Owner's Facility such
that continued performance by Construction Manager hereunder is impractical,
would violate applicable Laws
12
or would subject Construction Manager to unreasonable liability, Construction
Manager shall have the right to suspend the performance of Services hereunder
with respect to such Facility Owner's Facility until such failure has been
remedied.
ARTICLE 8. FORCE MAJEURE
8.1 Excuse for Force Majeure. Subject to Section 7.2.2(b), a delay in or
failure of performance hereunder by either party shall be excused to the extent
caused by Force Majeure, with the exception of payment obligations. The
foregoing provisions allowing a party to claim excuse due to Force Majeure shall
not relieve such party from using its reasonable efforts to overcome or remove
such Force Majeure. A party claiming such failure or delay shall give prompt
notice thereof to the other party, together with a description of such efforts
to overcome the Force Majeure.
8.2 Legal Changes. In the event a party is unable to perform due to
legislative, judicial, or regulatory agency action, this Agreement shall be
amended as appropriate to comply with the legal change which caused the
non-performance.
ARTICLE 9. INSURANCE
9.1 Owner's Insurance. Beginning on the Effective Date and continuing for
the Term of this Agreement, each Facility Owner shall procure and maintain in
full force and effect, at such Facility Owner's cost, builder's risk all risk
property and delay in start up insurance with respect to such Facility Owner's
Facility in an amount equal to the replacement cost of such Facility, including
boiler and machinery coverage with deductibles and sublimits as appropriate. In
addition, Construction Manager shall be an additional insured with respect to
any liability insurance obtained by or for the benefit of a Facility Owner with
respect to such Facility Owner's Facility, and such Facility Owner shall require
all such insurers to waive subrogation against Construction Manager.
9.2 Construction Manager's Insurance. From and after the Effective Date,
Construction Manager shall procure and maintain in full force and effect the
following insurance coverage with respect to each Facility:
(a) Worker's Compensation insurance with statutory limits, and
employers liability insurance with limits of not less than $2,000,000 in the
aggregate. Construction Manager shall require its insurers to waive all rights
of subrogation against CGC, the applicable Facility Owner, and their respective
officers, directors, agents and employees.
(b) Business automobile liability insurance covering owned,
non-owned and hired automobiles for a combined single limit of $1,000,000 each
occurrence. This policy shall be primary as to other insurance which may be
available to CGC, the applicable Facility Owner or its constituent members or
partners and shall name CGC and such Facility Owner as additional insureds to
the extent of the indemnity obligations assumed hereunder.
(c) Commercial general liability insurance, including bodily injury,
property damage, products/completed operations, blanket contractual, and
personal injury liability, with a combined single limit of $1,000,000 each
occurrence, all of which shall be endorsed to name
13
CGC and the applicable Facility Owner as additional insureds to the extent of
the indemnity obligations assumed hereunder.
(d) Umbrella liability providing excess general liability,
automobile liability and employment liability with a combined single limit of
$25,000,000, which shall be endorsed to name CGC and the applicable Facility
Owner as additional insureds to the extent of the indemnity obligations assumed
hereunder.
9.3 Evidence of Insurance. Each party shall provide to the other
certificates of insurance evidencing the required insurance as the requesting
party may reasonably specify.
9.4 Endorsements. Each of me required policies shall be endorsed to
provide that the other party requiring the insurance hereunder be given thirty
(30) Days advance notice of cancellation or material change.
9.5 Coverage under Owner's Policies. Each Facility Owner, at its option,
may add Construction Manager as a named insured to such Facility Owner's
liability policies in order to fulfill Construction Manager's obligations
hereunder.
ARTICLE 10. MISCELLANEOUS
10.1 Assignment. None of the Facility Owners or Construction Manager may
assign this Agreement, nor may Construction Manager delegate to another the
performance of the Services, without the prior written consent of the other
applicable party; provided, however that a Facility Owner shall have the
unconditional right, by security, charge or otherwise, to encumber its interest
under this Agreement, and may also assign its rights to any financially
qualified party, subject, in the latter case to Construction Manager's approval,
which approval shall not be unreasonably withheld or delayed. Construction
Manager shall execute a consent to assignment and such other documents in
connection with any assignment to such secured party or financially qualified
party, as the case may be, as such party may reasonably request.
10.2 Governing Law; Forum. This Agreement shall be governed by the law of
the State of California. Actions to enforce or interpret this Agreement or to
resolve disputes hereunder shall be brought in the United States District Court
in San Jose, California, or, if such court does not have jurisdiction over such
action, in the Superior Court of the State of California in San Jose,
California, which courts shall have exclusive jurisdiction with respect to such
matters. For purposes of the foregoing, each Facility Owner and Construction
Manager hereby submit and agree to the jurisdiction of such courts.
10.3 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement among CGC, the Facility Owners and Construction Manager with respect
to the matters covered hereby and supersedes all prior negotiations,
representations, agreements or understandings relating thereto. This Agreement
may be amended with respect to a particular Facility only by a writing signed by
a duly authorized representative of CGC (if CGC's rights and obligations are
affected), the applicable Facility Owner and Construction Manager.
14
10.4 Survival. Notwithstanding any provisions herein to the contrary, the
provisions set forth in Articles 6 and 7 shall survive in full force the
expiration or termination of this Agreement.
10.5 Waivers. Either party may specifically waive any breach of this
Agreement by any other party, but no such waiver shall be deemed to have been
given unless such waiver is in writing, signed by the waiving party and
specifically designates the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.
10.6 Notices. Any written notice, direction, instruction, request or other
communication required or permitted under this Agreement shall be deemed to have
been duly given on the date of receipt, and shall be either served personally or
by facsimile to the party to whom notices is to be given, or mailed to the party
to whom notices is to be given, by first class registered or certified mail,
return receipt requested, postage prepaid, and addressed to the addressee at the
address stated opposite its name below, or at the most recent address specified
by written notice given to the other party in the manner provided in this
Section 10.6.
CGC: Calpine Generating Company, LLC
c/o Calpine Corporation
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telephone: (000)000-0000
Facsimile: (000)000-0000
FACILITY OWNER: At the address set forth on Appendix B
With a copy to: Calpine Corporation
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telephone: (000)000-0000
Facsimile: (000)000-0000
CONSTRUCTION MANAGER: Calpine Construction Management Company, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Asset Optimization and Regional Counsel
Telephone: (000)000-0000
Facsimile: (000)000-0000
10.7 Partial Invalidity. If any term, provision, covenant, or condition of
this Agreement is held by a court of competent jurisdiction to be invalid, void,
or unenforceable, the rest of this Agreement shall remain in full force and
effect and in no way be affected, impaired, or invalidated.
15
10.8 Not for Benefit of Third Parties. Except with respect to any person
in whose favor an interest in this Agreement may be created pursuant to Section
10.1, this Agreement and each and every provision thereof is for the exclusive
benefit of CGC, the Facility Owners and Contraction Manager and is not for the
benefit of any third party.
10.9 Headings. The headings herein in this Agreement are for reference
only and shall not affect the construction of this Agreement.
10.10 Counterparts. This Agreement may be executed in counterparts, and
any number of counterparts signed in the aggregate by the parties hereto shall
constitute a single original document.
[The next page is the signature page.]
16
IN WITNESS WHEREOF, the parties hereto have caused this Construction
Management Agreement to be executed by their officers or partners thereunto duly
authorized as of the day and year first written above.
CALPINE CONSTRUCTION CALPINE GENERATING COMPANY, LLC
MANAGEMENT COMPANY, INC.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxx Xxxx
--------------------------------- ---------------------------------
Name: XXXXXX XXXXXXX Name: XXXXX XXXX
Title: Authorized Signatory Title: Vice President
COLUMBIA ENERGY, LLC GOLDENDALE ENERGY CENTER, LLC
By: /s/ Xxxxx Xxxx By: /s/ Xxxxx Xxxx
--------------------------------- ---------------------------------
Name: XXXXX XXXX Name: XXXXX XXXX
Title: Vice President Title: Vice President
PASTORIA ENERGY FACILITY, L.L.C.
By: /s/ Xxxxx Xxxx
---------------------------------
Name: XXXXX XXXX
Title: Vice President
17
APPENDIX A
DEFINITIONS
"Affiliate" means with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with such Person. For purposes of the foregoing definition, "control" means (i)
the direct or indirect ownership of fifty percent (50%) or more of the
outstanding capital stock or other securities or equity interests having
ordinary voting power to elect the board of directors, managing general partner
or similar managing authority or (ii) the power to direct the management of such
Person.
"Bankruptcy Event" shall be deemed to occur, with respect to any Person,
if that Person shall institute a voluntary case seeking liquidation or
reorganization under the Bankruptcy Law, or shall consent to the institution of
an involuntary case thereunder against it; or such Person shall file a petition
or consent or shall otherwise institute any similar proceeding under any other
applicable Federal or state law, or shall consent thereto; or such person shall
apply for, or by consent or acquiescence there shall be an appointment of, a
receiver, liquidator, sequestrate, trustee or other officer with similar powers
for such Person, or any substantial part of its assets; or such Person shall
make an assignment for the benefit of its creditors; or such Person shall admit
in writing its inability to pay its debts generally as they become due; or if an
involuntary case shall be commenced seeking liquidation or reorganization of
such Person under the Bankruptcy Law or any similar proceedings shall be
commenced against such Person under any other applicable Federal or state law
and (i) the petition commencing the involuntary case is not timely controverted,
(ii) the petition commencing the involuntary case is not dismissed within sixty
(60) Days of its filing, (iii) an interim trustee is appointed to take
possession of all or a portion of the property, and/or to operate all or any
part of the business of such Person and such appointment is not vacated within
sixty (60) Days, or (iv) an order for relief shall have been issued or entered
therein; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee or other
officer having similar powers, of such Person or all or a part of its property
shall have been entered; or any other similar relief shall be granted against
such Person under any applicable Federal or state law.
"CGC" means Calpine Generating Company, LLC, a Delaware limited liability
company.
"Completion" means, with respect to a Facility, that all Performance Tests
have been successfully completed as required under the Major Supply Agreements
related to such Facility and either all applicable Performance Guarantees have
been satisfied by Successful Performance Tests or, if Successful Performance
Tests have not been achieved, the counterparty to the applicable Major Supply
Agreement has paid liquidated damages for shortfalls in performance as required
thereunder and all other work to be performed under the applicable Major Supply
Agreements has been performed in accordance with the requirements thereof and
such other procedures as may have been developed by Construction Manager in the
due course of project implementation, as evidenced by delivery of a final Notice
of Completion from Construction Manager.
"Completion Date" means, with respect to a Facility, the date on which
Completion of such Facility occurs.
A-1
"Construction Agreements" means, with respect to a Facility, the Major
Supply Agreements and the Engineering Contract related to such Facility.
"Construction Contract" means, for each Facility, the Construction
Contract specified on Appendix B. The Construction Contract generally provides
for the design and construction of the Facility other than the work provided for
in the other Major Supply Agreements related to such Facility.
"Construction Management Budget" means, with respect to a Facility, the
budget attached hereto as Exhibit B related to such Facility, as such may be
amended from time to time under the terms of this Agreement.
"Construction Manager Representative" means the individual representative
for a Facility appointed by Construction Manager and authorized and empowered to
act for and on behalf of Construction Manager on all matters concerning or
arising under the Construction Management Agreement.
"Construction Parties" means, with respect to a Facility, the Engineer for
such Facility, the parties to the Major Supply Agreements (other than Facility
Owner) for such Facility and any sub-contractors of any of the foregoing.
"Contractor" means, for each Facility, the Contractor specified for such
Facility on Appendix B.
"Day" means a calendar day.
"Effective Date" shall have the meaning given in the preamble to this
Agreement.
"Emergency" means an event occurring at a Facility which poses actual or
imminent risk of serious personal injury, physical damage or environmental
contamination requiring immediate preventative or remedial action by
Construction Manager and for which advance approval by the applicable Facility
Owner otherwise required under the Construction Management Agreement would be
impossible or impractical.
"Engineer" means, for each Facility, the Engineer specified for such
Facility on Appendix B.
"Engineering Contract" means, for each Facility, the Engineering Contract
specified on Appendix B.
"Facility" means each Facility described on Appendix B.
"Facility Owner" has the meaning given in the preamble to this Agreement.
"Final Completion" means, with respect to a Facility, that Completion of
such Facility has been achieved and all work under all of the applicable
Construction Contracts, including the
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completion of all punch-list items and post mechanical completion services by
the Contractor under such Construction Contract has been completed.
"Final Completion Date" means, with respect to a Facility, the date upon
which Final Completion of such Facility occurs.
"Force Majeure" means acts, events, occurrences and conditions beyond the
reasonable control of the party claiming Force Majeure including acts of God,
labor disputes (other than those affecting Construction Manager unless such
labor disputes are of a general nature or affect the entire industry), sudden
actions of the elements, the effect of changes in applicable laws or
regulations, actions by federal, state, or municipal agencies, actions of
legislative, judicial, or regulatory agencies or denial, lapse or revocation of
any permit, license or regulatory approval necessary in connection with the
operation of a Facility.
"Governmental Approval" means any permit, approval, license, right,
franchise, order, authorization, waiver, exemption, variance or consent issued
or given by any government, political subdivision, agency, authority, board,
commission, bureau, court, tribunal or other governmental or judicial entity
related to the ownership, construction or operation of a Facility.
"Hazardous Substance Handling" means the management, handling, labeling,
containing, treatment, storage and removal of any hazardous waste or toxic
materials at the Facility site, in accordance with applicable laws and
regulations.
"Hazardous Substance Plan" means, with respect to a Facility, a plan for
Hazardous Substance Handling for such Facility.
"Indemnitees" of a party means each of its Affiliates and permitted
assignees, and each of the officers, directors, employees, agents, partners and
shareholders of the party and its Affiliates and permitted assignees.
"Laws" means all laws, statutes, rules, regulations, orders and ordinances
or specified standards or objective criteria contained in any applicable
license, permit or approval, or other legislative or administrative act, of the
United States of America or any state, agency, department, authority, political
subdivision or other instrumentality thereof, or a decree, judgment or order of
a court from time to time in effect, including those governing wages, hours,
employment discrimination and safety, laws regarding workers' compensation,
disability laws and employee benefit laws and including any applicable
engineering, construction, safety or electrical generation code.
"Major Supply Agreements" means, with respect to a Facility, the Power
Island Supply Contracts and Construction Contract related to such Facility.
"Notice of Completion" means, with respect to a Facility, the notice
delivered by the Construction Manager to the applicable Facility Owner following
a Successful Performance Test at such Facility Owner's Facility.
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"Operating and Maintenance Agreement" means that certain Master Operation
and Maintenance Agreement dated as of March 23, 2004 among CGC, the Facility
Owners, certain other subsidiaries of CGC, and Calpine Operating Services
Company, Inc.
"Operator" means Calpine Operating Services Company, Inc. as operator
under the Operating and Maintenance Agreement.
"Owner Representative" means, with respect to a Facility, the individual
representative for such Facility appointed by the applicable Facility Owner and
authorized and empowered to act for and on behalf of such Facility Owner on all
matters concerning or arising under the Construction Management Agreement.
"Performance Guarantees" means, with respect to a Facility, collectively
(a) the "performance guarantees" and similar terms as defined in each of the
Major Supply Agreements related to such Facility, and (b) any additional
guarantees provided by the Contractor in the Construction Contract related to
such Facility.
"Performance Tests" means, with respect to a Facility, collectively (a)
"performance tests," "performance testing" and similar terms as defined in each
of the Major Supply Agreements related to such Facility, (b) "acceptance tests"
as defined in the Construction Contract related to such Facility, and (c) test
procedures developed by the Construction Manager in the due course of project
implementation, which shall include the use of a certifiable continuous
emissions monitoring system or a qualified independent third party environmental
testing firm to monitor emissions during such tests or testing.
"Performance Test Target Date" means, with respect to a Facility, the date
on which a Successful Performance Test for such Facility is scheduled to occur
under the terms of the Construction Contract for the Facility related to such
Facility.
"Person" means any natural person, corporation, partnership, limited
liability company, firm or other entity.
"Power Island Supplier" means, with respect to a Facility, each party that
has entered into a Power Island Supply Contract with respect to such Facility.
"Power Island Supply Contracts" means, for each Facility, the Power Island
Supply Contracts specified on Appendix B.
"Project Personnel" means the permanent or temporary employees or
representatives of, Construction Manager or employed or retained at a Facility
solely to provide Services relating to the Facility.
"Project Revenues" means for any month or other reference period, gross
revenues received during each month or other period from all sales of steam,
electric energy and capacity generated by a Facility.
A-4
"Prudent Engineering Practices" means those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change
from time to time, as are commonly used by independent operators of electric
generation stations of a type and size similar to those constituting the
Facility as good, safe and prudent engineering practices in connection with the
operation, maintenance, repair and use of gas turbines, steam turbines,
electrical generators and other equipment and facilities with commensurate
standards of safety, performance, dependability, efficiency and economy. Prudent
Engineering Practices are not intended to be limited to the optimum practice or
method to the exclusion of others, but rather to be a spectrum of possible but
reasonable practices and methods.
"Scheduled Completion Date" means, for each Facility, the Scheduled
Completion Date specified on Appendix B.
"Secured Obligations" means the "Secured Obligations" as defined in that
certain Security Agreement dated as of March 23, 2004 by and between CGC, the
Facility Owners, as guarantors, and Wilmington Trust Company, as collateral
trustee.
"Services" shall have the meaning given such term in Section 3.2 of this
Agreement.
"Successful Performance Test" means, with respect to a Facility, that the
Performance Tests for such Facility have been completed and the Performance
Guarantees provided under the Major Supply Agreements related to such Facility
have been met in accordance with the terms of each such agreement.
"Term" has the meaning given in Section 7.1 of this Agreement.
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XXXXXXXX X
FACILITY DESCRIPTIONS
(MASTER CONSTRUCTION MANAGEMENT AGREEMENT)
COLUMBIA ENERGY CENTER
Address for Notices: 000 Xxxxxxx Xxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
(000) 000-0000
Description of Facility: The Columbia facility is a nominal 464 MW natural
gas-fired combined cycle generating facility with an
approximate peak capacity of 641 MW. The facility
consists of two General Electric combustion turbines
and two Nooter Xxxxxxx heat recovery steam generators
which supply steam to a single Toshiba steam turbine.
The facility supplies steam to Xxxxxxx Chemical
Company.
Contractor: TIC - The Industrial Company
Construction Contract: Contract for Construction dated July 13, 2001
Engineer: Xxxxxxx & Xxxxx, L.L.C.
Engineering Contract: Contract for Professional Services dated as of
January 10, 2001
Power Island Supply Contracts: (1) Purchase Contract for Two PG7241FA Gas
Turbine Generators dated May 14, 2001
between Columbia Energy, L.L.C. and General
Electric Company
(2) Purchase Contract - Steam Turbine
Generator and Accessories; Steam Surface
Condenser and Accessories dated April 2,
2001 between Columbia Energy, L.L.C. and
Toshiba International Corporation
(3) Purchase Contract for Heat Recovery
Steam Generators and Accessories dated May
14, 2001 between Columbia Energy, L.L.C. and
Nooter/Xxxxxxx, Inc.
Scheduled Completion Date: March 2004
GOLDENDALE ENERGY CENTER
Address for Notices: 000 Xxxxxxxxxx Xxxx Xxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000
Description of Facility: The Goldendale facility will be a nominal 237 MW
natural gas-fired combined cycle power generating
facility with an estimated
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peak capacity of 271 MW. The facility will consist of
a single General Electric combustion turbine and a
Hitachi heat recoversy steam generator which supplies
steam to a single Hitachi steam turbine.
Contractor: TIC - The Industrial Company
Construction Contract: Contract for Construction dated November 3, 2003
Engineer: Cochrane Engineering, Ltd.
Engineering Contract: Contract for Professional Services dated December
1, 2001
Power Island Supply Contracts: (1) Agreement dated September 22, 2000
between Enron Equipment Procurement Company
and General Electric Company for Gas Turbine
Generator Package, assigned to Goldendale
Energy Center, LLC
(2) Purchase Order No. FR04710003 (Steam
Turbine Generator Set) dated October 18,
2000 between National Energy Production
Company and Hitachi America, Ltd., assigned
to Goldendale Energy Center, LLC
(3) Purchase Order Agreement No. FR04710004
(Heat Recovery Steam Generator) dated
October 18, 2000 between National Energy
Production Company and Hitachi America,
Ltd., assigned to Goldendale Energy Center,
LLC
Scheduled Completion Date: May 2004
PASTORIA ENERGY CENTER
Address for Notices: 00000 Xxxxxxxxx Xxxxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxxxxx 00000
(000) 000-0000
Description of Facility: The Pastoria facility will be a nominal 759 MW
natural gas-fired combined cycle generating facility
with an estimated peak capacity of 769 MW. Th
facility is being constructed in two phases. Phase 1
consists of a single General Electric combustion
turbine and a Nooter Xxxxxxx heat recovery steam
generator which supplies a single General Electric
steam turbine. Phase 2 consists of two General
Electric combustion turbines and two Nooter Xxxxxxx
heat recovery steam generators which supply a single
General Electric steam turbine.
Contractor: Calpine Construction Management Company, Inc.
Construction Contract: Contract for Construction dated July 1, 2003
Engineer: Utility Engineering Corporation
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Engineering Contract: Contract for Professional Services dated March 27, 2001
Power Island Supply Contracts: Agreement dated May 1, 2000 between
Westdeutsche Landesbank Grizentrale, New
York Branch, acting through its agent Enron
North America Corp., and General Electric
Company for Combined Cycle Power Islands,
amended by Amendment dated September 15,
2000, assigned to Pastoria Energy Facility,
L.L.C.
Scheduled Completion Date: Phase 1 (1X1): September 2004
Phase 2 (2X1): August 2005
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EXHIBIT A
TO
MASTER CONSTRUCTION MANAGEMENT AGREEMENT
SERVICES DESCRIPTION
DESIGN PHASE
- Consultation during Facility development
- Scheduling
- Prepare Facility budgets
- Coordination of contract documents
- Negotiate construction contracts
- Negotiate design contracts
- Negotiate major equipment procurement contracts
- Develop and implement a system for the preparation, review and processing
of change orders
- Drawing and specification review
CONSTRUCTION PHASE
- Project control
- Coordinate and provide general direction of the work
- Expedite procurement of major equipment
- Conduct weekly site schedule and coordination meetings
- Schedule and conduct progress meetings for Facility Owner
- Provide regular monitoring of the Facility construction schedules
A-1
- Prepare monthly progress reports to present information such as status of
construction, engineering status, report of actual expenditures vs.
budget, procurement status, safety report, and status of project schedule
and milestone dates
- Review and approve monthly progress estimates
- Provide Facility Owner information as appropriate so that loan advance
applications can be prepared by Facility Owner
- Assist the Facility Owner, Contractor and Engineer in obtaining
construction and building permits
- Audit quality control programs
- Monitor each Contractor's safety program
- Record the progress of Facility
- Coordinate with the Engineer in determining the Completion Date for each
report
- With Facility Owner's assistance, provide to appropriate governmental
agencies all of the documents, plans and specifications required by the
Facility's permits from time to time
- Administer and enforce Facility Owner's rights under the construction and
design contracts
START UP AND COMMISSIONING PHASE
- Review and test Facility subsystems and turnover packages when the
Contractor states that they are ready for turnover and testing
- Coordinate and administer the start up of each subsystem and of the
Facility as a whole
- Coordinate and administer all Performance Tests
- Obtain the initial inventory of spare parts in accordance with the
Construction Management Budget
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EXHIBIT B
TO
MASTER CONSTRUCTION MANAGEMENT AGREEMENT
CONSTRUCTION MANAGEMENT BUDGETS
[The Construction Management Budgets for each Facility are attached.]
PASTORIA CONSTRUCTION MANAGEMENT
BUDGET
AMOUNTS IN US $
BALANCE TO COMPLETE
-------------------
CONSTRUCTION MANAGEMENT
SITE OFFICE
Base Wages 4,889,506
Consultants and Outside Servies 360,925
Temporary Living/ Per Diem 772,891
Communications Equipment 5,989
Field Office Rent 146,076
Meals 9,538
Office Supplies and Expense 59,781
Office Equipment 14,537
Reporduction 22,667
Memberships and Dues 2,664
Photograpy 11,339
Contributions 8,334
Relocation 40,298
Safety Equipment and Supplies 1,314
Travel & Entertainment Expense 52,653
Vehicle Expense 18,271
Travel Home 140,780
SACRAMENTO LABOR & RELATED COSTS
Base Wages 555,702
Meals & Entertainment 4,800
Travel Expense 46,991
CORPORATE LABOR & RELATED COSTS
Base Wages 138,881
COMMISSIONING
COMMISSIONING
Support 5,092,184
Support Per Diem 370,265
Craft Support 1,508,060
Third Party Testing 325,000
Flushes and Flows 120,000
Field Supplies 128,564
Oil Flushes 120,000
Hydrolaise 325,000
Chemical Clean 470,000
Consultants 100,000
First Fill Chemicals 155,000
First Fill Oils/Lubricants/Gases 270,000
Fuels 6,020,000
Power (4,987,500)
MOBILIZATION
Mobilization (Permanent Operations) 435,411
Combustion Turbine Spare Parts 9,800,000
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TOTAL 27,555,921
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GOLDENDALE CONSTRUCTION MANAGEMENT BUDGET
AMOUNTS IN US $
BALANCE TO COMPLETE
-------------------
CONSTRUCTION MANAGEMENT
SITE OFFICE
Base Wages 703,300
Temporary Labor 109,920
Temporary Living/ Per Diem 6,000
Field Office Rent 120,000
Meals & Entertainment 9,000
Office Expense 180,000
Safety Equipment and Supplies 1,400
Travel Expense - Site 24,000
Vehicle Expense 9,000
SACRAMENTO LABOR & RELATED COSTS
Base Wages 100,000
Meals & Entertainment 1,600
Travel Expense 4,000
CORPORATE LABOR & RELATED COSTS
Base Wages 12,000
COMMISSIONING
COMMISSIONING
Support 833,849
Support Per Diem 98,400
Craft Support 743,313
Third Party Testing 331,667
Flushes and Flows 160,000
Field Supplies 90,000
Consultants 30,000
First Fill Chemicals 75,000
Fuels 3,301, 500
Power 450,000
MOBILIZATION
Mobilization (Permanent Operations) 2,475,604
Combustion Turbine Spare Parts 1,884,654
Balance of Plant Spares 800,000
Furniture, Office supplies, Equip., Tools 52,364
Pickup Truck 3,272
Performance Won. System/CMMS 71,625
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TOTAL 12,681,468
==========
AMOUNTS IN
COLUMBIA CONSTRUCTION MANAGEMENT BUDGET US $
BALANCE TO
COMPLETE
--------
CONSTRUCTION MANAGEMENT
SITE OFFICE
Base Wages $ 516,016
Temporary Living/ Per Diem $ 61,975
Field Office Rent $ 7,200
Meals & Entertainment $ 3,500
Office Expense $ 11,132
Travel Expense $ 9,655
Vehicle Expense $ 7,521
SACRAMENTO LABOR & RELATED COSTS
Base Wages $ 125,000
Travel Expense $ 12,000
CORPORATE LABOR & RELATED COSTS
Base Wages $ 65,000
Travel Expense $ 15,000
REGIONAL LABOR & RELATED COSTS
Base Wages $ 525,000
Travel Expense $ 7,500
COMMISSIONING
COMMISSIONING
Support $ 165,000
Support Per Diem $ 0
Craft Support $ 283,219
Third Parry Testing $ 0
Flushes and Flows $ 0
Field Supplies $ 67,360
Consultants $ 0
First Fill Fuel Oil Tank $ 1,500,000
First Fill Chemicals $ 35,453
First Fill Oils/Lubricants/Gases $ 90,000
Fuels $ 5,215,658
Fuels take or pay fees $ 1,663,247
Power $ 90,000
MOBILIZATION
Mobilization (Permanent Operations) $ 350,000
Mobilization Travel $ 1,200
Combustion Turbine Spare Parts $ 2,385,962
Balance of Plant Spares $ 2,165,950
Engr after Start up $ 190,000
Furniture, Office supplies, Equip., Tools $ 180,797
Pickup Truck $ 16,705
Mobile Equipment $ 107,547
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Total $15,874,598
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