ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT BETWEEN MIRANT MID- ATLANTIC, LLC & MIRANT CHALK POINT LLC (EACH INDIVIDUALLY AN “OWNER” AND COLLECTIVELY THE “OWNERS”) AND MIRANT MID-ATLANTIC, LLC AS AGENT FOR THE OWNERS AND STONE & WEBSTER, INC....

Exhibit 10.1

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

BETWEEN MIRANT MID-ATLANTIC, LLC & MIRANT CHALK POINT LLC

(EACH INDIVIDUALLY AN “OWNER” AND COLLECTIVELY THE

“OWNERS”) AND MIRANT MID-ATLANTIC, LLC AS AGENT FOR THE

OWNERS

AND

STONE & XXXXXXX, INC. (“CONTRACTOR”)

FOR

ENGINEERING, PROCUREMENT & CONSTRUCTION SERVICES

RELATING TO

AIR QUALITY CONTROL SYSTEMS

MORGANTOWN GENERATING STATION,

XXXXXXXXX GENERATING STATION AND

CHALK POINT GENERATING STATION

TABLE OF CONTENTS

					PAGE
1.	DEFINITIONS				1

2.	OWNER ENTITIES				11

	2.1	Mirant Mid-Atlantic, LLC			11
	2.2	Mirant Chalk Point, LLC			11
	2.3	Owner’s Agent			12
	2.4	Obligations			12

3.	EFFECTIVE DATE				12

4.	TERM				12

5.	OWNER SCOPE				12

	5.1	Owner Scope			13
	5.2	Gypsum Dewatering Plant			13
	5.3	Schedule for Owner Scope			13
	5.4	Non-Interference and Safety			15

6.	PROJECT SCOPE				15

	6.1	Work To Be Performed			15
		6.1.1	LNTP for FGD Systems		15
		6.1.2	INTP for FGD Systems		15
		6.1.3	NTP for FGD Systems		15
		6.1.4	LNTP for SCR System		16
		6.1.5	INTP for SCR System		16
		6.1.6	Transition of SCR from Contractor to Owner		16
		6.1.7	Application of Terms and Conditions		16
	6.2	Engineering/Design Services			17
		6.2.1	Technical Specifications		17
		6.2.2	Design Standards		17
		6.2.3	Design Documentation		17
			6.2.3.1	Schematic Design Documents	17
			6.2.3.2	Permitting Documents	18
			6.2.3.3	Design Development Documents	18
			6.2.3.4	Approved Drawings	19
			6.2.3.5	Rough Site Grading, Demolition and Relocation	20
			6.2.3.6	Interfaces and connections for the Gypsum Dewatering Plant	22
			6.2.3.7	Contractor’s Obligations under Section 6.2.3.6	22
	6.3	Procurement Services			23
		6.3.1	Procurement of Systems Equipment and Construction Equipment		23

			6.3.1.1	Title to Systems Equipment		23
			6.3.1.2	Risk of Loss		23
			6.3.1.3	Storage		23
		6.3.2	Procurement of Chemicals, Start-Up Spares and Consumables			24
		6.3.3	Inspection and Testing of Materials and Systems Equipment			24
	6.4	Transportation Charges				24
	6.5	Construction-Related Work				24
		6.5.1	Clearance of the Site (by Owner)			24
		6.5.2	Labor and Personnel			25
		6.5.3	Construction Utilities Interface			25
		6.5.4	Testing			25
		6.5.5	As-Built Drawings			25
		6.5.6	Operation and Maintenance Manuals			25
		6.5.7	Turnover Package			26
		6.5.8	Clean Up and Waste Removal			26
		6.5.9	Hazardous Substances			26
		6.5.10	Quality Assurance/Quality Control			27
	6.6	General				28
	6.7	Non-Interference				28
	6.8	Safety				29
		6.8.1	Contractor Responsibility			29
		6.8.2	Fitness For Duty, Drug, Alcohol Abuse And Safety Policy For Access To Owner Facilities			29
		6.8.3	Access To Owner Facilities			29
		6.8.4	Prohibited Activities			30
		6.8.5	Suspected Violation Of Policy			30
		6.8.6	Refusal To Comply			31
		6.8.7	Protection			31
		6.8.8	OSHA Compliance			32
		6.8.9	Material Safety Data Sheets			32
		6.8.10	Dust and Fume Control			32
		6.8.11	Water Pollution			32
		6.8.12	Operating Environment			32
			6.8.12.1		Generating Sites	32
			6.8.12.2		Electrical System	33
	6.9	Operating Utilities Interface				33
	6.10	Owner’s Right to Inspect, Stop and Re-Perform Work				33
		6.10.1	Owner’s Right to Attend Contractor Inspections			33
		6.10.2	Inspection and Re-Performance			33

7.	PERFORMANCE GUARANTEES					33

	7.1	Input Guarantees for FGD Systems				33
		7.1.1	Guaranteed Consumption Levels			33
		7.1.2	Consumption Within Engineering Design Margins			34
		7.1.3	Consumption Outside Engineering Design Margins			34

		7.1.4	Liquidated Damages for Input Guarantees for FGD Systems			34
			7.1.4.1	Power Consumption		34
			7.1.4.2	Make-Up Water Consumption		34
			7.1.4.3	Limestone Consumption		34
	7.2	Output Guarantees for FGD Systems				34
		7.2.1	List of Output Guarantees			34
		7.2.2	Correction by Contractor			35
		7.2.3	Mercury Removal			35
	7.3	Operational Guarantees for FGD Systems				36
		7.3.1	List of Operational Guarantees			36
			7.3.1.1	Minimum Turndown Capability		36
			7.3.1.2	Maximum Entrained Moisture Carryover		36
			7.3.1.3	Fan Characteristics		36
			7.3.1.4	Pressure Drop		36
		7.3.2	Correction by Contractor			36
	7.4	Blank				36
	7.5	Blank				36
	7.6	Blank				36
	7.7	Performance Testing				36
		7.7.1	Performance Testing			36
	7.8	Concurrent Obligations				37

8.	PROJECT SCHEDULE; SCHEDULE GUARANTEES					37

	8.1	Project Schedule				37
		8.1.1	Guaranteed Provisional Acceptance Date			38
		8.1.2	Conditions for Outages			38
		8.1.3	Outage Start and End Dates			38
		8.1.4	Blank			38
		8.1.5	Concurrent Outages			38
		8.1.6	Immovable Milestones			39
	8.2	Schedule Guarantee				39
		8.2.1	Work Progress and Completion			39
			8.2.1.1	General		39
			8.2.1.2	Maximum Outage Period		39
				8.2.1.2.1	Amounts Reasonable	40
				8.2.1.2.2	Bonus for Early Completion	41
				8.2.1.2.3	Payment of Excessive Outage Payments	41
		8.2.2	Guaranteed Provisional Acceptance Date			41
		8.2.3	Late Provisional Acceptance Payments			41
			8.2.3.1	Before 23:59 on December 31, 2009 for the FGD Systems		41
			8.2.3.2	After 23:59 on December 31, 2009 for FGD Systems		42
			8.2.3.3	Blank		42

iii

			8.2.3.4		Reduced Late Provisional Acceptance Payments Period	42
			8.2.3.5		Amounts Reasonable	43
			8.2.3.6		Payment of Late Provisional Acceptance Payments	43
		8.2.4	Guaranteed Substantial Completion Date			44
			8.2.4.1		Late Substantial Completion Payments	44
			8.2.4.2		Amounts Reasonable and Exclusive Remedy for Delay	44
			8.2.4.3		Payment of Late Substantial Completion Payments	44
		8.2.5	Guaranteed Final Completion Date			45
		8.2.6	Late Final Completion Payments			45
			8.2.6.1		Amounts Reasonable and Exclusive Remedy for Delay	45
			8.2.6.2		Payment of Late Final Completion Payments	45
		8.2.7	Full Program Completion			46
		8.2.8	Reduction of Liquidated Damages Based on Delayed Permitting			46
	8.3	Schedules				47
		8.3.1	Schedule Software			47
		8.3.2	Activity Coding			47
		8.3.3	Level 3 Detail			47
		8.3.4	Schedule Updates			47
	8.4	Work Operations				47
	8.5	Recovery Schedule				48
	8.6	Critical Schedule Situation				48
	8.7	Contractor Responsible for Schedule				48

9.	KEY PERSONNEL REQUIREMENTS					48

	9.1	Personnel Resources				48
		9.1.1	Key Personnel			48
		9.1.2	Departure of Key Personnel			49
		9.1.3	Assignment of Key Personnel			49
		9.1.4	Replacement of Key Personnel			49
		9.1.5	Key Personnel of Subcontractors			50
	9.2	Contractor Personnel Transition Plan				50
		9.2.1	Notice of Departure of Key Personnel			50
		9.2.2	Mutual Agreement			50
	9.3	Independent Contractor: Employees				51
	9.4	Applicable Time Period				51

10.	TARGET COST					51

	10.1	Facility Target Cost				51
	10.2	Calculation of Contractor’s Actual Cost				51
		10.2.1		Categories of Costs		51
		10.2.2		Actual Home Office Labor Costs		52

		10.2.3		Actual Field Non-Manual Labor Costs		52
		10.2.4		Actual Self-Performed Field Manual Services Cost		52
		10.2.5		Actual Third Party Expenses		53
		10.2.6		Selling, General and Administrative Expenses		53
		10.2.7		Separate Accounts		54
	10.3	Cap on Contractor’s Total Engineering Hours				54

11.	PRICE					54

	11.1		EPC Total Compensation			54
	11.2		Project Compensation			54
	11.3		Guarantee Costs			54
			11.3.1	Classification of Guarantee Costs		54
			11.3.2	Treatment of Guarantee Costs		55
	11.4		Incentives			55
			11.4.1	Blank		55
			11.4.2	Performance Incentives		56
				11.4.2.1	Early Completion of Work During Planned Outages	56
				11.4.2.2	Safety, Schedule and Quality Incentive	56
	11.5		Allocable Costs			58
			11.5.1	Sections Addressing Allocable Costs		58
			11.5.2	Treatment of Allocable Costs		58
	11.6		Underrun Bonus			58

12.	PAYMENT TERMS					59

	12.1		Payments Generally			59
			12.1.1	Owner Shall Pay Contractor EPC Total Compensation		59
			12.1.2	Milestone-based, Guarantee and Final Payments		59
			12.1.3	NTP Milestone Payment		59
	12.2		Milestone Progress Payments			59
			12.2.1	Approved Final Milestone Payment Schedule		59
			12.2.2	Milestone Progress Payments		59
			12.2.3	Partial Payment Requests		60
			12.2.4	Valid Payment Requests		61
			12.2.5	Documentary Evidence of Achieving Milestone		61
			12.2.6	Owner Review		61
			12.2.7	Payment of Milestone Payment shall not constitute approval or acceptance of Work by Owner		61
	12.3		Quarterly Reconciliation			61
			12.3.1	Timing of Quarterly Reconciliation		61
			12.3.2	Scheduled Milestone		61
			12.3.3	Incomplete Milestone		62
			12.3.4	Quarterly Reconciliation Ratio		62
			12.3.5	Quarterly Actual Cost and Disputed Costs		62
			12.3.6	Reconcilable Cost		62
			12.3.7	Quarterly Milestone Payment Cost		62
			12.3.8	Quarterly Benchmark Cost		62

	12.3.9	Performance of Reconciliation			63
		12.3.9.1	Excess Payment		63
		12.3.9.2	Payable Cost		63
	12.3.10	Reconcilable Cost greater than Quarterly Benchmark Cost			63
		12.3.10.1	Supplemental Contingency Draw Request		63
		12.3.10.2	Difference between Quarterly Milestone Payment Cost and Quarterly Benchmark Cost		63
	12.3.11	Carryover Cost			64
	12.3.12	NTP Milestone Payment added to Quarterly Actual Cost in 13th month			64
12.4	Blank				64
12.5	Late Payment Interest				64
12.6	Contingency				64
	12.6.1	Quarterly Contingency Allowance Limit			64
	12.6.2	Contingency Draw Request			64
	12.6.3	Contingency Draw Notification			65
	12.6.4	Owner Approval of Contingency Draw Request			65
12.7	Purpose of Quarterly Reconciliation Process				65
12.8	Retention				65
12.9	Effect of Change Order on Approved Final Milestone Payment Schedule				66
12.10	Conditions of Payments; Withholdings, Set-Offs				66
	12.10.1	Material Breach			66
	12.10.2	Required Submittals			66
		12.10.2.1	Progress Reports		66
		12.10.2.2	Partial Lien Waivers		66
		12.10.2.3	Full Lien Release		66
		12.10.2.4	Form of Waivers and Releases		67
		12.10.2.5	Xxxx Xxxxx		67
	12.10.3	Withholding to Protect Owner from Loss			67
		12.10.3.1	Owner may withhold or retain any Milestone Progress Payment, payment or part		67
			12.10.3.1.1	Contractor Event of Default	67
			12.10.3.1.2	Lien or Charge Not Discharged	67
			12.10.3.1.3	Work Performed by Owner	68
		12.10.3.2	Xxxx Xxxxx		68
		12.10.3.3	Payment after Removal of Cause		68
	12.10.4	Set Off			68
12.11	Final Payment for Target Work at Each Facility				68
	12.11.1	Open Book Basis Showing Actual Costs			68
	12.11.2	Target Final Payment			69
	12.11.3	Target Final Payment Documentation			69
		12.11.3.1	Final lien waiver		69
		12.11.3.2	As-Built Drawings		69
		12.11.3.3	Operating manuals		69


			12.11.3.4	Warranty documents	69
			12.11.3.5	Back-charges and/or claims satisfied	69
			12.11.3.6	Quality and reliability requirements	69
			12.11.3.7	Nonconformance items	69
			12.11.3.8	Spare parts list	69
			12.11.3.9	Mill certifications	69
	12.12	Liens After Final Payment			69
	12.13	Payment of Guarantee Costs			70
		12.13.1	Separate Accounting		70
		12.13.2	Prior to Target Final Payment		70
		12.13.3	After Target Final Payment		70

13.	PRICING METHOD				70

	13.1	Blank			70
	13.2	Target Price Method			70

14.	WARRANTIES				71

	14.1	Parts and Labor Warranties			71
		14.1.1	Warranties		71
		14.1.2	Parts and Labor Warranty Period		72
		14.1.3	Conditions and Limitations of Warranty		72
		14.1.4	Repair of Defects		72
		14.1.5	Parts and Labor Warranty Period Extension		73
			14.1.5.1	Extension for Corrected Work	73
			14.1.5.2	Extension for Total Shutdown	73
	14.2	Blank			73
	14.3	Aggregation of Warranties and Specific Time Limitation			73
	14.4	No Other Warranties/Obligations			74

15.	STANDARDS OF PERFORMANCE				74


16.	MECHANICAL COMPLETION		74

	16.1	Mechanical Completion	74
	16.2	Notice and Achievement of Mechanical Completion for Each System	75

17.	PROVISIONAL ACCEPTANCE/SUBSTANTIAL COMPLETION		75

	17.1	Criteria for Provisional Acceptance of FGD System	75
	17.2	Criteria for Substantial Completion of FGD System	76
	17.3	Notice and Report of Provisional Acceptance for Each System	76
	17.4	Achievement of Provisional Acceptance of the Work	76
	17.5	Creation of Punch-List	77
	17.6	Notice and Report of Substantial Completion for Each System	77
	17.7	Achievement of Substantial Completion of the Work	77
	17.8	Transfer of Possession and Control of the Systems to Owner	78

vii

18.	FINAL COMPLETION			78

	18.1	Requirements		78
	18.2	Notice and Report of Final Completion		79
	18.3	Achievement of Final Completion		79

19.	CHANGE ORDERS			79

	19.1	Changes		79
	19.2	Procedure for Changes		79
		19.2.1	Changes Initiated by Contractor	79
		19.2.2	Changes Initiated by Owner	80
		19.2.3	Change in Cost Element and Fee Element	80
	19.3	Change Order Due to Force Majeure Event		80
	19.4	Change Order Due to Suspension of Work by Owner		81
	19.5	Change Order Due to Differing Site Conditions		81
	19.6	Change Order Due to Pre-Existing Hazardous Substances		81
	19.7	Change Order Due to Actions of Owner		81
	19.8	Blank		82
	19.9	Change Order Due to Changes in Applicable Law		82
	19.10	Change Order Due to Escalation in Actual Self-Performed Field Manual Services Cost		82
	19.11	Change Order Due to Escalation in Home Office Labor Costs and Actual Field Non-Manual Labor Costs		83
	19.12	Change Order Due to Escalation of Commodities		83
	19.13	Changes Involving Schedule Extensions		83
	19.14	Changes to the Contract Price		83
	19.15	Continued Performance Pending Resolution of Disputes		84
	19.16	Owner’s Right to Offset Changes		85
	19.17	Other Work on Site		85

20.	FORCE MAJEURE			85

	20.1	Force Majeure		85
	20.2	Burden of Proof		86
	20.3	Obligations Excused		86
	20.4	Costs		86

21.	AGGREGATE LIABILITY			86

	21.1	Aggregate Liability		86
	21.2	Sub-limits of Liability		86
		21.2.1	Liquidated Damages and Warranty Work	87
		21.2.2	Systems Equipment Subcontractors	87
		21.2.3	Other Subcontractors	87
		21.2.4	Facility Limits	88
	21.3	Pursuit of Subcontractor Warranties		88
	21.4	Consequential Damages		88
	21.5	Consequential Damages for Subcontractors		88
	21.6	Indemnity for Lessor Claims		89

viii

22.	SECURITY				89

	22.1	Contractor’s Parent Company Guarantee			89
	22.2	Contractor’s Letter of Credit			89
	22.3	Performance Bond and Payment Bond			90
	22.4	Owner Security			90

23.	SUSPENSION AND TERMINATION				91

	23.1	Right to Stop Work for Cause			91
	23.2	Right to Suspend Work for Convenience			92
	23.3	Suspension by Contractor			92
	23.4	Termination by Owner for Convenience			92
		23.4.1	Right to Terminate		92
		23.4.2	Termination Payment		92
		23.4.3	Withholding/Conditions Precedent		93
		23.4.4	Return of Security		93
	23.5	Termination by Owner for Cause			93
		23.5.1	Insolvency		94
		23.5.2	Delay After Provisional Acceptance		94
		23.5.3	Key Personnel		94
		23.5.4	Material Breach		94
	23.6	Actions Upon Termination			94
	23.7	Survival			94

24.	ASSIGNMENT				94

25.	INSURANCE				95

	25.1	Contractor’s Insurance			95
		25.1.1	Casualty Insurance		95
			25.1.1.1	Commercial General Liability Insurance	95
			25.1.1.2	Business Automobile Liability Insurance	96
		25.1.2	Workers’ Compensation and Employer’s Liability Insurance		96
		25.1.3	Contractor’s Property		96
		25.1.4	Transit Insurance		96
		25.1.5	Other Insurance		96
			25.1.5.1	International Insurance	97
			25.1.5.2	Differences in Condition Policy	97
		25.1.6	General Insurance Conditions		97
		25.1.7	Other Duties, Representations, and Obligations		97
			25.1.7.1	Certificates of Insurance	97
			25.1.7.2	Violation of Insurance Terms	98
			25.1.7.3	Failure to Maintain Insurance	98
			25.1.7.4	No Waiver of Liability	98
			25.1.7.5	Additional Insurance	98
			25.1.7.6	Premium Audit	98
		25.1.8	Subcontractor’s Insurance		98

			25.1.8.1	Levels of Coverage	98
			25.1.8.2	Waiver of Rights	99
	25.2.	Owner’s Insurance			99
		25.2.1	Builder’s All Risk		99
		25.2.2	Exclusion from Builder’s Risk		99
		25.2.3	Contractor Compliance		99

26.	TIME				99

27.	TAXES				99

	27.1	Taxes			100
	27.2	Sales Taxes			100
	27.3	Property Taxes			100

28.	INDEMNIFICATION				100

	28.1	Property Damage			100
	28.2	Limitation on Property Damage Indemnification			101
	28.3	Royalties and License Fees			101
	28.4	Operation of Systems			101
	28.5	No Liens or Encumbrances			101
	28.6	Contractor’s Indemnities for Personal Injury or Property Damage			101
	28.7	Other Contractor’s Indemnities			102
	28.8	No Limitation to Workers’ Benefits			102

29.	GOVERNING LAW				102

30.	PERMITTING				102

	30.1	Responsibility for Permitting			102
		30.1.1	Owner’s Permits Required for Construction		103
		30.1.2	Permission to Begin Installation of Pilings		103
	30.2	Other Permits			103

31.	SITE CONDITIONS				103

	31.1	Geotechnical Study			103
	31.2	Special Site Characteristics			103
	31.3	Contractor’s Knowledge of Conditions			103
	31.4	Sub-Surface Site Conditions			104

32.	SUBCONTRACTORS				104

	32.1	Approved Subcontractors			104
	32.2	Subcontractor and Vendor Identification			104
	32.3	Substitute Contractors			104
	32.4	Purchase Orders and Subcontracts			104
	32.5	Subcontractor Warranties			105
	32.6	Subcontractor Insurance			105
	32.7	No Privity with Subcontractors			105
	32.8	Assignment of Subcontracts to Owner			106

	32.9	Directed Payments		106
	32.10	Neglect to Pay		106

33.	DISPUTE RESOLUTION			106

	33.1	Applicability of Resolution Procedures		106
	33.2	Management Discussions		106
	33.3	Mediation		107
	33.4	Arbitration		107
	33.5	Dispute Review Board		108
	33.6	Obligations Continue		108
	33.7	Injunctive Relief		109
	33.8	Survival		109

34.	MISCELLANEOUS			109

	34.1	Audit and Maintenance of Records		109
	34.2	Rights to Work Product		109
		34.2.1	Deliverables	109
		34.2.2	License	109
		34.2.3	Reuse	109
	34.3	Compliance with Laws		110
		34.3.1	Familiarity with Laws	110
		34.3.2	No Fees or Commissions	110
	34.4	Authorized Representatives		110
	34.5	Confidentiality		110
		34.5.1	Confidential Information	110
		34.5.2	Nondisclosure	111
		34.5.3	Compelled Disclosure	111
		34.5.4	Use Restrictions	111
	34.6	Owner Caused Project End Suspension and Other Owner Caused Event		111
	34.7	Notices		112
	34.8	Relationship of the Parties		113
	34.9	Amendments		114
	34.10	No Third Party Beneficiaries		114
	34.11	Priority Among Contract Documents		114
	34.12	Severability		114
	34.13	Remedies		114
	34.14	Nonwaiver		114
	34.15	Interpretation		114
	34.16	Entire Agreement		115
	34.17	Representations and Warranties of Contractor		115
		34.17.1	Due Organization of Contractor	115
		34.17.2	Due Authorization of Contractor, Binding Obligation	116
		34.17.3	Non-Contravention	116
		34.17.4	Regulatory Approvals	116
	34.18	Representation and Warranties of Owner		116
		34.18.1	Due Organization of Owner	116

	34.18.2	Due Authorization of Owner; Binding Obligation	116
	34.18.3	Non-Contravention	116
34.19	Further Assurances		117
34.20	No Implied Waiver		117
34.21	Exhibits and Schedules		117

xii

TABLE OF EXHIBITS

EXHIBIT NUMBER			TITLE
	1		FGD Technical Specification
	2		FGD Division of Responsibility
	3		Intentionally Omitted
	4		Permitting Division of Responsibility
	5		Intentionally Omitted
	6		Performance Guarantees and Test Methods
	7		Key Personnel
	8		Cost Submitted with Proposal
	8	A	Detailed Cost Summary
	8	B	Details of Cost
	8	C	Contractor’s Technical and Commercial Clarification/Exceptions
	8	D	Rate Sheet
	8	E	Intentionally Omitted
	8	F	Escalation of Commodities
	9		Progress Milestone Payments
	10		Applicable Codes and Standards
	11		Letter of Credit
	12		Payment Bond and Performance Bond
	13		Agency Letter
	14		Intentionally Omitted
	15		Draft Project Schedule
	16		Forms for Lien Waivers and Releases
	17		Dispute Resolution Board Procedure

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

THIS ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT is made this 30th day of July, 2007, by and between MIRANT MID-ATLANTIC, LLC, a Delaware limited liability company, and MIRANT CHALK POINT, LLC, a Delaware limited liability company (each individually an “Owner”, or collectively, “Owners” as further described in Sections 2.1 and 2.2), MIRANT MID-ATLANTIC, LLC as agent for the Owners, and STONE & XXXXXXX, INC., a Louisiana corporation (“Contractor”).

NOW, THEREFORE, for and in consideration of the mutual covenants set forth in this Agreement, the Parties agree as follows:

1. DEFINITIONS

1.1 “Actual Cost” is the sum of all actual costs for performing the Work as described in Section 10.2.

1.2 “Actual Field Non-Manual Labor Costs” has the meaning set forth in Section 10.2.3.

1.3 “Actual Home Office Labor Costs” has the meaning set forth in Section 10.2.2.

1.4 “Actual Self-Performed Field Manual Services Costs” has the meaning set forth in Section 10.2.4.

1.5 “Actual Third Party Expenses” has meaning set forth in Section 10.2.5.

1.6 “Agreement” means this Engineering, Procurement and Construction Agreement, consisting of Articles 1 through 34, and Exhibits 1, 2, 4, 6 through 13, 15 through 17.

1.7 “Alliance Agreement” means the agreement between Owner and Contractor dated July 11, 2006 pursuant to which preliminary Work has been performed as authorized by Owner through the issuance of LNTP and INTP.

1.8 “Allocable Costs” has the meaning set forth in Section 11.5.1.

1.9 “Applicable Laws” means all laws, statutes, ordinances, rules, regulations, judgments, interpretations, policies and orders of any court, arbitrator or governmental agency or authority having or asserting jurisdiction over the Facility, the Site, the Systems or the performance of the Work, as may be in effect from time to time.

1.10 “Applicable Permits” means all valid waivers, franchises, variances, permits, authorizations, licenses or orders of or from any governmental body, agency, authority, court or other body having jurisdiction over the Facility, the Site, the Systems or the performance of Work that are required, necessary or desirable to be obtained or maintained in connection with the Project.

1.11 “Approved Final Milestone Payment Schedule” has the meaning set forth in Section 12.2.1.

1.12 Blank

1.13 “Approved Project Schedule” has the meaning set forth in Section 8.1.

1.14 “Approved Subcontractor List” has the meaning set forth in Section 10.2.5.

1.15 “As-Built Drawings” means drawings which are revised to show all modifications and revisions made by the Contractor (including all Subcontractors to the Contractor) up to Final Completion, for all key drawings which are necessary for the Owner’s continued operation, maintenance, and regulatory compliance for the Project. The final list of As-Built Drawings is listed in Exhibit 1.

1.16 “Authorized Representative” has the meaning set forth in Section 34.4.

1.17 “Baseline Commodity Index Price” for an individual Commodity means the PPI Index Price for that Commodity as provided in Exhibit 8F.

1.18 “Business Day” means a calendar day other than Saturday, Sunday or a national holiday. As used in Section 17.5, “Business Day” also excludes a holiday recognized and followed in the State of Maryland.

1.19 “Chalk Point” means the power station known as “Chalk Point Plant” located at 00000 Xxxxx Xxxxx, Xxxxxxx, XX 00000 consisting of Units E1 and E2.

1.20 “Change” means (i) any addition to, deletion from, suspension of or other modification to the quality, function, intent, quantity, method or entity performing the Work, including without limitation any such addition, deletion, suspension or other modification that requires a change in the Contract Price or the Approved Project Schedule, or (ii) any extension of the Approved Project Schedule or increase in the Contract Price.

1.21 “Change in Applicable Law” has the meaning set forth in Section 19.9.

1.22 “Change Order” has the meaning set forth in Section 19.1.

1.23 “Change Order Notice” has the meaning set forth in Section 19.2.1.

1.24 “Change Order Request” has the meaning set forth in Section 19.2.2.

1.25 “Confidential Information” has the meaning set forth in Section 34.5.

1.26 “Construction Equipment” means the equipment, materials, tools and supplies which are to be provided by Contractor and used in the performance of the Work, but which are not incorporated into or become a part of the Systems.

1.27 “Commodities” has the meaning set forth in Exhibit 8F.

1.28 The “Contingency” is an amount equal to ten percent (10%) of the Target Cost at issuance of NTP for that Facility. References to “50% Contingency” mean an amount that equals one-half of the Contingency amount.

1.29 “Contract Documents” means this Agreement and the Drawings, as either of these may be supplemented or amended.

1.30 “Contract Price” has the meaning set forth in Section 13.2.

1.31 “Contractor” has the meaning set forth in the preamble of this Agreement.

1.32 “Contractor Event of Default” has the meaning set forth in Section 23.5.

1.33 “Contractor’s Additional Direct Costs or Savings” has the meaning set forth in Section 19.14.3.

1.34 “Critical Schedule Situation” has the meaning set forth in Section 8.6.

1.35 “Dedicated” has the meaning set forth in Section 9.1.1.

1.36 “Deliverables” has the meaning set forth in Section 34.2.1.

1.37 “Design Development Documents” has the meaning set forth in Section 6.2.3.3.

1.38 “Dickerson” means the power station known as “Dickerson Plant” located at 00000 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000 consisting of Xxxxx X0, X0 and D3.

1.39 “Direct Cause” or “Directly Cause(d)” means a cause that naturally brings about a delay or Direct Cost without intervention of any new and independent

cause, and without which the delay would not have occurred or the Direct Cost would not have been incurred.

1.40 “Direct Cost” means an actual cost necessarily incurred by Contractor in performing the Work, that is substantiated by written invoices, payment applications, time sheets, or other reasonable documentation, that is paid for Actual Third Party Expenses, Actual Field Non-Manual Labor, Actual Self-Performed Field Manual Services, or engineering services by Contractor’s employees, or for costs of repair or replacement of Construction Equipment or Systems Equipment and that is not reimbursed by proceeds of insurance.

1.41 “Disclosing Party” has the meaning set forth in Section 34.5.1.

1.42 “Disputes” has the meaning set forth in Article 33.

1.43 “Drawings” has the meaning set forth in Section 6.2.3.4.

1.44 “DRB” is the Dispute Review Board referred to in Section 33.5.

1.45 “Effective Date” has the meaning set forth in Article 3.

1.46 “Engineering Design Margins” has the meaning set forth in Section 7.1.1.

1.47 The “EPC Total Compensation” is the total compensation to be paid by the Owner to the Contractor for proper performance of all of the Work and shall be calculated pursuant to Article 11.

1.48 “Equivalent Availability Guarantee” has the meaning set forth in Section 1.2 of Exhibit 6.

1.49 “Escalation Report” has the meaning set forth in Section 19.10.

1.50 “Excessive Outage Payments” has the meaning set forth in Section 8.2.1.2.

1.51 “Extended Warranty Equipment” is the booster fans, absorber vessel (materials, internals and internal piping), spray nozzles, agitator, ball mill and recycle pumps.

1.52 “Facilities” means the Morgantown, Chalk Point and Xxxxxxxxx power stations.

1.53 “Facility” means either Chalk Point, Xxxxxxxxx or Morgantown, as the context requires.

1.54 “Fee” means the Target Fee.

1.55 “Fee Element” has the meaning set forth in Section 19.2.3.2.

1.56 “FGD System” means the total equipment, materials, tools and supplies supplied by Contractor for each fully operable flue gas desulfurization unit as described in Exhibit 1, including the associated balance of plant (“BOP”) required to meet the Input Guarantees, Output Guarantees and Operational Guarantees applicable to an FGD System under Article 7.

1.57 “FGD Subcontractor” means the Subcontractor supplying the FGD System.

1.58 “Final Completion” has the meaning set forth in Section 18.1.

1.59 “Financing Parties” means any and all lenders providing the construction, interim or long-term financing for the Project, their successors and assigns, and any trustee or agent acting on their behalf.

1.60 “Force Majeure” has the meaning set forth in Section 20.1.

1.61 “Geotechnical Study” has the meaning set forth in Section 31.1.

1.62 “Guarantee Costs” has the meaning set forth in Section 11.3.

1.63 “Guaranteed Final Completion Date” has the meaning set forth in Section 8.2.5 and shall be the date set forth in the Approved Project Schedule.

1.64 “Guaranteed Provisional Acceptance Date” has the meaning set forth in Section 8.2.2 and shall be the date set forth in the Approved Project Schedule.

1.65 “Guaranteed Substantial Completion Date” has the meaning set forth in Section 8.2.4 and shall be the date set forth in the Approved Project Schedule.

1.66 “Gypsum Dewatering Plant” has the meaning set forth in Section 5.1.5.

1.67 “Hazardous Substance” means any and all chemicals, constituents, contaminants, pollutants, materials, and wastes and any other carcinogenic, corrosive, ignitable, radioactive, reactive, toxic or otherwise hazardous substances or mixtures (whether solids, liquids, or gases), or any similar substances now or at any time before Final Completion subject to regulation, control, remediation or otherwise addressed under Applicable Laws, including but not limited to those Applicable Laws relating to the discharge, emission, spill, release, or threatened release into the environment or relating

to the disposal, distribution, manufacture, processing, storage, transport, treatment or other use of such substances.

1.68 “Incremental Payment Amount” has the meaning set forth in Section 12.2.1.

1.69 “Incremental Percentage” means the Incremental Percentage identified for a Milestone in the Approved Percentage Milestone Payment Schedule as set forth in Exhibit 9.

1.70 An “Initial Performance Test” is the first occurrence of Performance Test PA, the first occurrence of Performance Test 1, or the first 180 days of Performance Test 2, all as referred to in Exhibit 6.

1.71 “Input Guarantee” has the meaning set forth in Section 7.1.

1.72 “INTP” means the Intermediate Notice to Proceed for FGD System set forth in Section 6.1.2.

1.73 “INTP for SCR” means the intermediate notice to proceed for the SCR system as set forth in Section 6.1.5.

1.74 “INTP Security” means the letter of credit posted by Contractor in a form and by an issuing bank acceptable to Owner, in the amount equal to the sum of the purchase orders issued by Owner at LNTP and INTP.

1.75 “Key Personnel” has the meaning set forth in Section 9.1.1.

1.76 “Late Final Completion Payments” has the meaning set forth in Section 8.2.6.

1.77 “Late Provisional Acceptance Payments” has the meaning set forth in Section 8.2.3.

1.78 “Letter of Credit” shall have the meaning as set forth in Section 22.2 and 22.4.

1.79 “LNTP” means the Limited Notice to Proceed for the FGD Systems as set forth in Section 6.1.1.

1.80 “LNTP for SCR” means the limited notice to proceed for the SCR System as set forth in Section 6.1.4.

1.81 “LNTP Security” means the letter of credit posted by Contractor in a form and by an issuing bank acceptable to Owner, in the amount equal to the purchase order issued by Owner for the Work to be performed during the LNTP phase.

1.82 “Lost Time Incident Rate” means the number of lost time incidents divided by manhours worked multiplied by two hundred thousand (200,000).

1.83 “Mechanical Completion” has the meaning set forth in Section 16.1.

1.84 “Milestone” means a portion of the Work identified in the Approved Final Milestone Payment Schedule, and for which a related Incremental Payment Amount has been established.

1.85 “Milestone Progress Payment” has the meaning set forth in Section12.2.2.

1.86 “Morgantown” means the power station known as “Morgantown Plant” located at 00000 Xxxxx Xxxxxxx, Xxxxxxx, XX 00000 consisting of Units F1 and F2.

1.87 “Notice of Final Completion” has the meaning set forth in Section 18.2.

1.88 “Notice of Mechanical Completion” has the meaning set forth in Section 16.2.

1.89 “Notice of Project Completion” has the meaning set forth in Section 8.2.7.

1.90 “Notice of Provisional Acceptance” has the meaning set forth in Section 17.3.

1.91 “Notice of Substantial Completion” has the meaning set forth in Section 17.6.

1.92 “NTP” means the notice to proceed for the FGD Systems set forth in Section 6.1.3.

1.93 “Open Book” means that Contractor will maintain and make all of its books, records, schedules, logs and electronic communications and data related to the Work available to Owner to substantiate and document the design, pricing, progress and sequencing of the Work and costs and other expenses incurred or expected to be incurred in connection with performing the Work.

1.94 “Operational Guarantees” has the meaning set forth in Section 7.3.1.

1.95 “Output Guarantees” has the meaning set forth in Section 7.2.1.

1.96 “Owner” has the meaning set forth in Sections 2.1 and 2.2 of this Agreement.

1.97 “Owner Agent” has the meaning set forth in Sections 2.1 and 2.3 of this Agreement.

1.98 “Owner Scope” has the meaning set forth in Section 5.1.

1.99 “Owner Security” has the meaning set forth in Section 22.4.

1.100 “Owner’s Separate Contractors” means contractors hired by Owner to perform work in connection with a Facility, not including Contractor.

1.101 “Parties” means Owner and Contractor.

1.102 “Parts and Labor Warranties” has the meaning set forth in Section 14.1.1.2.

1.103 “Parts and Labor Warranty Period” has the meaning set forth in Section 14.1.2.

1.104 “Performance Guarantees” has the meaning set forth in Article 7.

1.105 “Performance Incentives” has the meaning set forth in Section 11.4.2.

1.106 “Performance Test PA” means the Performance Test for Provisional Acceptance referred to in Section One of Exhibit 6.

1.107 “Performance Test 1” means the Performance Test 1 referred to in Section One of Exhibit 6.

1.108 “Performance Test 2” means the Equivalent Availability Test referred to in Section One of Exhibit 6.

1.109 “Performance Tests” has the meaning set forth in Section 7.7.1.

1.110 “PPI Index Price” means the unit price for a Commodity as reported in the applicable publication of the United States Bureau of Labor Statistics, effective as of the date that the firm price is established for purchase of the Commodity by Contractor.

1.111 “Progress Report” means a progress report containing the following information: (i) description of Contractor’s and all Subcontractors’ activities and progress on the Work completed to the date of such report, including but not limited to a comparison of such progress with the Approved Project Schedule, (ii) an identification and evaluation of any problems or deficiencies in the Work, (iii) the status of all deliveries of Systems Equipment, and (iv) a forecast of the Work to complete.

1.112 “Project” means the complete design, engineering, procurement, permitting, construction, installation, initial performance tests, commissioning, start-up and completion of the Systems for the Facilities by Contractor on a turn-key basis in accordance with the Contract Documents, excluding only the Owner Scope.

1.113 “Project Compensation” is the amount calculated pursuant to Section 13.2.2.

1.114 “Provisional Acceptance” has the meaning set forth in Section 17.1.

1.115 “Prudent Electrical Practices” means the use of, and adherence to, equipment, practices and methods of applicable United States of America industry codes, standards and regulations, required, necessary or desirable to protect the Systems, the Facility and Owner’s employees, agents, and customers from electrical malfunctions, as embodied in the National Electric Code.

1.116 “Prudent Utility Practices” means the practices, methods, materials, supplies and equipment that are commonly used in the United States of America electric power production industry to design, construct and operate power plants and related equipment (including equipment such as the Facility and the Systems) or any practices, methods and acts, which in the exercise of reasonable judgment in light of the facts known at the time, could have been expected to be used to accomplish the desired result to the specified standards and at the lowest reasonable cost consistent with good business practices, reliability, safety and expedition.

1.117 “Punch-List” has the meaning set forth in Section 17.5.

1.118 “Qualified Person” has the meaning set forth in Section 9.1.4.

1.119 “Receiving Party” has the meaning set forth in Section 34.5.1.

1.120 “Total Recordable Incident Rate” means the number of recordable injuries divided by manhours multiplied by two hundred thousand (200,000).

1.121 “Scheduled Outage Period” means, with respect to each Unit, the time period as set forth in the Approved Project Schedule, during which such Unit will be taken out of operation by Owner for the purpose of allowing Contractor to install the System for such Unit.

1.122 “Schematic Design Documents” has the meaning set forth in Section 6.2.3.1.

1.123 “Separate Contractor” means a person or entity having a separate contract with the Owner to perform all or part of the Owner Scope.

1.124 “Site” means a site upon which a Facility is located and upon which the Systems will be constructed.

1.125 “Spill” shall mean any discharge, overflow, spill or release of any kind or nature that constitutes, either by way of adherence, conformance or compliance with Applicable Law or any of either Contractor’s or Owner’s environmental, health and safety policies or programs, a reportable event or requires specialized or significant containment, treatment, action or remediation.

1.126 “Subcontractor” means each and every vendor, supplier, manufacturer, materialman, contractor, subcontractor or sub-subcontractor of any tier other than Contractor, performing any part of the Work, providing any of the Systems Equipment and Construction Equipment, or providing other services or supplies in connection with the Work directly or indirectly for or to Contractor.

1.127 “Substantial Completion” has the meaning set forth in Section 17.2.

1.128 “System” means an FGD System.

1.129 “Systems Equipment” means the equipment, materials, tools and supplies which are to be provided by Contractor as part of the Work, pursuant to Section 6.3.1 and are to be incorporated into and become a part of the Systems owned by Owner.

1.130 The “Target Cost” for each Facility has the meaning set forth in Section 10.1.

1.131 The “Target Fee” is an amount that is five percent (5%) of the Target Cost.

1.132 The “Target Final Payment” has the meaning set forth in Section 12.11.2.

1.133 The “Target Price” is an amount equal to the sum of the Target Cost plus 50% of the Contingency.

1.134 “Taxes” means all sales, use, gross receipts, income and withholding taxes and other similar taxes and contributions imposed by any taxing authority upon the sale, purchase or use of the Systems Equipment or the Construction Equipment, or upon services or labor provided as part of the Work, including, without limitation, taxes on or measured by Contractor’s receipts hereunder and taxes on or measured by wages earned by employees of Contractor or any Subcontractor, subject to application of Article 27.

1.135 “Technical Specifications” means the requirements and specifications set forth in Exhibits 1, 2, 4 and 6.

1.136 “Termination Payment” has the meaning set forth in Section 23.4.2.

1.137 “Time” has the meaning set forth in Article 26.

1.138 “Underrun Bonus” has the meaning set forth in Section 11.6.

1.139 “Unit D1” means the electricity generating unit comprising part of Xxxxxxxxx, as more specifically described in Exhibit 1.

1.140 “Unit D2” means the electricity generating unit comprising part of Xxxxxxxxx, as more specifically described in Exhibit 1.

1.141 “Unit D3” means the electricity generating unit comprising part of Xxxxxxxxx, as more specifically described in Exhibit 1.

1.142 “Xxxx X0” means the electricity generating unit comprising part of Chalk Point, as more specifically described in Exhibit 1.

1.143 “Xxxx X0” means the electricity generating unit comprising part of Chalk Point, as more specifically described in Exhibit 1.

1.144 “Unit F1” means the electricity generating unit comprising part of Morgantown, as more specifically described in Exhibit 1.

1.145 “Unit F2” means the electricity generating unit comprising part of Morgantown, as more specifically described in Exhibit 1.

1.146 “Units” means all units at the specified Facility; “Unit” means a single Unit at a Facility.

1.147 “Warranty Bond” has the meaning set forth in Section 22.3.

1.148 “Work” has the meaning set forth in Section 6.1 of this Agreement.

2. OWNER ENTITIES

2.1 Mirant Mid-Atlantic, LLC. Mirant Mid-Atlantic, LLC leases the Morgantown Generating Station located in Xxxxxxx, Maryland (Unit F1 and Unit F2) and the Xxxxxxxxx Generating Station located in Dickerson, Maryland (Unit D1, Unit D2 and Unit D3). Mirant Mid-Atlantic, LLC is an “Owner” for purposes of the Morgantown and Dickerson Facilities, and is an authorized agent (“Owner Agent”) of itself and Mirant Chalk Point, LLC for the purposes set forth herein.

2.2 Mirant Chalk Point, LLC. Mirant Chalk Point, LLC owns Xxxxx X0 xxx X0 xx xxx Xxxxx Xxxxx Xxxxxxx located in Aquasco, Maryland. Mirant Chalk Point, LLC is an “Owner” for purposes of the Chalk Point Facility.

2.3 Owner’s Agent. Mirant Mid-Atlantic, LLC, as an Owner Agent, is authorized to act as Owners’ agent in connection with this Agreement with authority to bind such Owners and to delegate such authority as set forth in this Agreement.

2.4 Obligations. Obligations of an Owner set forth in this Agreement shall be deemed to be the obligations of an Owner of the Facility with respect to the applicable obligation. Obligations owed by Contractor to an Owner under this Agreement shall be deemed owed to the Owner of the Facility(ies) applicable to such obligation. Owner obligations that are independent of a particular Facility shall be owed jointly and severally by both Owners as a single obligation, and Contractor’s obligations owed independent of a particular Facility shall be owed to both Owners as a single obligation by Contractor.

3. EFFECTIVE DATE

The effective date of this Agreement is 30th day of July, 2007 (the “Effective Date”).

4. TERM

This Agreement will commence on the Effective Date and will expire following the fulfillment of all obligations of the Parties hereunder, unless terminated earlier pursuant to the terms of this Agreement.

5. OWNER SCOPE

5.1 Owner Scope. Owner, in addition to its other obligations under the Agreement, will engage Separate Contractors to perform the following (the “Owner Scope”):

5.1.1 Rough Site Grading in accordance with the bidding information prepared by Contractor pursuant to Section 6.2.3.5.1;

5.1.2 Underground Relocation in accordance with the bidding information prepared by Contractor pursuant to Section 6.2.3.5.2;

5.1.3 Site Demolition in accordance with the bidding information prepared by Contractor pursuant to Section 6.2.3.5.3; and

5.1.4 Railroad Improvements in accordance with the general arrangement drawings included in the Drawings approved by Owner pursuant to Section 6.2.3.4, as such general arrangement drawings may be modified from time to time by mutual agreement of the Parties in writing; and

5.1.5 Gypsum handling and dewatering systems (“Gypsum Dewatering Plant”) in accordance with Section 5.2.

5.2 Gypsum Dewatering Plant. Owner will provide to Contractor, for Contractor’s use in performing its services under Section 6.2.3.6, the foundation loads, general arrangement drawings, and interconnection information for the Gypsum Dewatering Plant for each of the Facilities. Owner will engage a Separate Contractor to engineer, procure and construct a Gypsum Dewatering Plant for each of the Facilities.

5.3 Schedule for Owner Scope. The Owner Scope shall be performed in accordance with Sections 5.3.1 through 5.3.5 below. Owner’s obligations under this Section 5.3 shall be conditioned on timely completion of the related obligations of Contractor. Failure of Owner to timely perform its obligations under this Section 5.3 shall constitute an omission of Owner for the purposes of Section 19.7.

5.3.1 Owner will perform the Rough Site Grading in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

5.3.2 Owner will perform the Underground Relocation in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties, and from time to time as may be requested by Contractor and agreed by Owner.

5.3.3 Owner will perform the Site Demolition in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties, and from time to time as may be requested by Contractor and agreed by Owner.

5.3.4 Owner will perform the Railroad Improvements in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

5.3.5 With respect to the Gypsum Dewatering Plants:

5.3.5.1 Owner will provide the certified foundation loads for Morgantown to Contractor on or before August 30, 2007

5.3.5.2 Owner will provide the certified foundation loads for Chalk Point to Contractor on or before August 30, 2007.

5.3.5.3 Owner will provide the certified foundation loads for Xxxxxxxxx to Contractor on or before August 30, 2007

5.3.5.4 Owner will provide “issued for construction” general arrangement drawings for Morgantown to Contractor on or before August 30, 2007.

5.3.5.5 Owner will provide “issued for construction” general arrangement drawings for Chalk Point to Contractor on or before August 30, 2007.

5.3.5.6 Owner will provide “issued for construction” general arrangement drawings for Xxxxxxxxx to Contractor on or before August 30, 2007.

5.3.5.7 Owner will provide utility interface information for Morgantown to Contractor in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties,

5.3.5.8 Owner will provide utility interface information for Chalk Point to Contractor in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties,

5.3.5.9 Owner will provide utility interface information for Xxxxxxxxx to Contractor in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

5.3.5.10 The “Ready for Tie-In” milestone in the construction schedule of the Separate Contractor for the Gypsum Dewatering Plant at Morgantown will be substantially completed on or before the later of 15 months from substantial completion of piles for the Gypsum Dewatering Plant at Morgantown by Contractor.

5.3.5.11 The “Ready for Tie-In” milestone in the construction schedule of the Separate Contractor for the Gypsum Dewatering Plant at Chalk Point will be substantially completed on or before the later of 15 months from substantial completion of piles for the Gypsum Dewatering Plant at Chalk Point by Contractor.

5.3.5.12 The “Ready for Tie-In” milestone in the construction schedule of the Separate Contractor for the Gypsum Dewatering Plant at Xxxxxxxxx will be substantially completed on or before the later of 15 months from substantial completion of piles for the Gypsum Dewatering Plant at Xxxxxxxxx by Contractor.

5.3.5.13 The “Ready for Slurry” milestone in the construction schedule of the Separate Contractor for the Gypsum Dewatering Plant at Morgantown will be substantially completed on of before the later of 45 days satisfactory completion of tie in by Contractor and the last day of the final tie-in outage for the first System at Morgantown.

5.3.5.14 The “Ready for Slurry” milestone in the construction schedule of the Separate Contractor for the Gypsum Dewatering Plant at Chalk Point will be substantially completed on of before the later of 45 days satisfactory completion of tie in by Contractor and the last day of the final tie-in outage for the System at Chalk Point.

5.3.5.15 The “Ready for Slurry” milestone in the construction schedule of the Separate Contractor for the Gypsum Dewatering Plant at Xxxxxxxxx will be substantially completed on of before the later of 45 days satisfactory completion of tie in by Contractor and the last day of the final tie-in outage for the System at Xxxxxxxxx.

5.4 Non-Interference and Safety. In performing Owner Scope, the Separate Contractors will be subject to the requirements applicable to Contractor under Sections 6.7 and 6.8.

6. PROJECT SCOPE

6.1 Work To Be Performed. Excluding the Owner Scope, Contractor will perform or cause to be performed in accordance with the Contract Documents all work, services and management required for the complete design, engineering, procurement, manufacturing, furnishing, delivery (FOB at Facility), unloading, placement and maintenance in storage as required, removal from storage, permitting, construction, installation, commissioning, check-out, tuning, testing, start-up and completion and placement of air quality control systems that are ready for continuous operation on a turn-key basis (collectively, the “Work”), such systems consisting of the following:

Two FGD Systems on:

Morgantown- (Units F1 and F2)

One FGD System on each of:

Xxxxx Xxxxx- (Xxxxx X0 and E2)

Xxxxxxxxx- (Units D1, D2, and D3)

The Work with respect to each of the above is further detailed in Exhibits 1, 2, 4, 8C and 15, and includes but is not limited to Sections 6.2 through 6.10 below. For the avoidance of doubt, the Work does not include the Owner Scope.

6.1.1 LNTP for FGD Systems. Pursuant to the Alliance Agreement, Owner has issued a Limited Notice to Proceed (LNTP) and Contractor has posted the LNTP Security.

6.1.2 INTP for FGD Systems. Pursuant to the Alliance Agreement, Owner has issued an Intermediate Notice to Proceed (INTP) and Contractor has posted the INTP Security.

6.1.3 NTP for FGD Systems. Contractor shall continue performance of the Work on the INTP until the Owner’s issuance of an NTP. Prior to issuance of the NTP, Owner and Contractor have agreed on a Target Cost for the Work

included in each Facility. Owner shall issue a Notice to Proceed (“NTP”) to continue the Work upon execution of this Agreement. Contractor shall commence Work on the NTP on the next Business Day after receipt of the NTP. Upon issuance of the NTP, Owner shall post the Owner Security in accordance with Section 22.4 and Contractor shall maintain the Letter of Credit pursuant to Section 22.2.3 and shall post the performance bond and payment bond pursuant to Section 22.3.

6.1.4 LNTP for SCR System. Pursuant to the Alliance Agreement, Owner has issued a Limited Notice to Proceed for the SCR system at Chalk Point, and Contractor commenced work on the LNTP for SCR on the next Business Day after receipt of the LNTP for SCR.

6.1.5 INTP for SCR System. Pursuant to the Alliance Agreement, Owner has issued an Intermediate Notice to Proceed to Contractor for an SCR system at Chalk Point. Contractor commenced Work on the INTP for SCR and has developed certain design documents and has initiated certain procurement activities in connection with that SCR system.

6.1.6 Transition of SCR from Contractor to Owner. Contractor shall tender to Owner, at Owner’s request, all documents relating to the Chalk Point SCR system, including all preliminary and other design documents, CAD files, books, records, drawings, specifications, electronically stored information and other information or data relating to that SCR system. Within ten (10) days after execution of this Agreement Contractor shall obtain and tender appropriate written consents of all subcontractors and vendors, and complete the assignment to Owner of all contracts or agreements relating to the SCR system, including all contracts for procurement of materials or equipment to be used in the construction of that system. Contractor shall also submit to Owner waivers of lien, if any, received from subcontractors and vendors for the SCR System, and a certificate of Contractor verifying payment to date for all materials, equipment, or services provided by subcontractors or vendors. Along with the documents required under this Section 6.1.6, Contractor shall submit to Owner a request for payment of all amounts due and owing to Contractor for work performed by Contractor in connection with the SCR system. Such request for payment shall include documentation of all Actual Costs incurred by Contractor in performing work necessary for the SCR system, and a calculation of the Fee owed to Contractor for such work. Such Fee shall be calculated at the rate of five percent (5%) of Actual Costs. Upon receiving such request, Owner will make payment within 30 days.

6.1.7 Application of Terms and Conditions. The terms and conditions of this Agreement apply to any Work performed by Contractor following Owner’s issuance of the LNTP. Owner reserves the right to modify the scope of the Work (other than deletion of all of the Work associated with a single Facility, except in connection with termination of all the Work for the entire Project) at any time pursuant to this Agreement.

6.2 Engineering/Design Services. As part of the Work, Contractor will perform the following engineering and design services, and Owner shall have the right to review all drawings, specifications and other documents and electronic records relating to such services:

6.2.1 Technical Specifications. Exhibits 1, 2 and 4 set forth the basic design concept, intent, objectives and requirements of Owner for the Project. Contractor represents and warrants that it has thoroughly familiarized itself with the Technical Specifications contained in Exhibits 1, 2 and 4, and agrees that it has and will provide all engineering and design services, excluding only the Owner Scope, necessary to produce fully completed Systems that meet or exceed the requirements set forth in the Technical Specifications. All engineering work requiring certification under the laws of the State of Maryland will be certified by professional engineers licensed and properly qualified to perform such engineering services in the State of Maryland. Contractor shall follow the State of Maryland requirements in identifying the Contractor’s drawings, calculations and specifications that must be sealed and signed by a professional engineer licensed in the State of Maryland.

6.2.2 Design Standards. In addition to causing each System to meet or exceed the requirements set forth in the Technical Specifications under the design conditions set forth in Exhibits 1, 2, 4 and 6. Contractor will cause each System, and all design documentation prepared pursuant to Section 6.2.3, to be engineered and designed in a manner which is consistent and in conformance with Prudent Electrical Practices and Prudent Utility Practices, including, without limitation, all applicable codes and standards (including without limitation all applicable engineering, environmental, construction, safety, and electrical generation codes and standards) and in conformance with all other Applicable Laws and Applicable Permits, all as in effect as of the date of Substantial Completion, subject to changes pursuant to Section 19.9. A list of the applicable codes and standards has been agreed upon by the Parties and included as Exhibit 10 to the EPC Agreement.

6.2.3 Design Documentation.

6.2.3.1 Schematic Design Documents. Based upon the Technical Specifications, Contractor will prepare, for written approval by Owner, schematic design documents for the Project consisting of drawings, system descriptions, process flow diagrams, general arrangement drawings, models and other documents illustrating the scale and relationship of the components of each System (collectively, the “Schematic Design Documents”). The Parties have agreed that the list of the Schematic Design Documents to be reviewed and approved by Owner consists of General Arrangement drawings, P&IDs, Electrical One-line diagrams, and equipment Specifications. Contractor shall provide to

Owner each listed Schematic Design Document as it is prepared by Contractor. Owner shall notify Contractor as to whether it approves or disapproves (and, if it disapproves, the reasons therefore) each of the listed Schematic Design Documents within ten (10) Business Days of its receipt of the same. Owner will review the Schematic Design Documents for compliance and will xxxx and stamp them to indicate whether changes and/or corrections are required. Contractor shall address all material comments and questions appropriately including, when appropriate, incorporating the comments, corrections and/or changes on the original drawing or document and resubmitting the drawing or document. Should Owner fail to provide notification to Contractor within the aforesaid ten (10) day period after its receipt of Schematic Design Documents, then the Schematic Design Documents for which notification is not provided shall be deemed to have been returned as acceptable for procurement, fabrication or construction. One paper print or copy of each submitted design document will be marked with the Owner’s review stamp, comment, and corrections and/or changes and returned to Contractor with a transmittal letter. On resubmitted drawings, Contractor shall clearly xxxx the section of the drawing which has been revised with a revision number, cloud around the appropriate item or a similar written designation. Owner’s approval or disapproval, or refusal to review any design documents, including but not limited to the “Schematic Design Documents” shall not impose on Owner any responsibility for the design and shall not be deemed a waiver and will not relieve Contractor of Contractor’s obligations for turnkey design, procurement and construction of the Work in accordance with the Contract Documents.

6.2.3.2 Permitting Documents. Contractor shall produce and provide to Owner, pursuant to the schedule and list of Deliverables to be agreed upon by the Parties after issuance of the LNTP, all Deliverables required for permitting under Applicable Law and Applicable Permits. Should Contractor fail to provide any such Deliverable by the scheduled date, then for each such late Deliverable, Contractor shall be assessed liquidated damages in the amount of Five Thousand Dollars ($5,000) per day for each day after the scheduled date of delivery until such Deliverable is provided to Owner. Such liquidated damages shall accrue and be treated as Guarantee Costs pursuant to Section 11.3.

6.2.3.3 Design Development Documents. Based upon the Technical Specifications and the approved Schematic Design Documents, Contractor will prepare, for written approval by Owner, both basic and detailed design development documents for the Project consisting of drawings, models, specifications, plans and other documents necessary to fix and describe the size and character of each System with respect to the civil engineering, structural, instrumentation, control, mechanical, electrical, fire protection, acoustical and life safety systems to be

incorporated therein (collectively, the “Design Development Documents”). The Parties have agreed that the list of the Design Development Documents to be reviewed and approved by Owner consists of General Arrangement drawings, P&IDs, Electrical One-line diagrams, and equipment Specifications. Contractor shall provide to Owner each listed Design Development Document as it is prepared by Contractor. Owner shall notify Contractor as to whether it approves or disapproves (and, if it disapproves, the reasons therefore) each of the listed Design Development Documents within ten (10) Business Days of its receipt of the same. Owner will review the design documents for compliance and will xxxx and stamp them to indicate whether changes and/or corrections are required. Contractor shall address all material comments and questions appropriately including, when appropriate, incorporating the comments, corrections and/or changes on the original drawing or document and resubmitting the drawing or document. Should Owner fail to provide notification to Contractor within the aforesaid ten (10) day period after its receipt of Design Development Documents, then the Design Development Documents for which notification is not provided shall be deemed to have been returned as acceptable for procurement, fabrication or construction. On resubmitted drawings, Contractor shall clearly xxxx the section of the drawing which has been revised with a revision number, cloud around the appropriate item, or a similar written designation. After expiration of Owner’s ten (10) day review period, Contractor may proceed with the Work during the review process. Owner’s approval or disapproval, or refusal to review any design documents, including but not limited to the “Design Development Documents” shall not impose on Owner any responsibility for design, and shall not be deemed a waiver and will not relieve Contractor of Contractor’s obligations for turnkey design, procurement and construction of the Work in accordance with the Contract Documents.

6.2.3.4 Approved Drawings. After issuance of an INTP, and based upon the Technical Specifications, the approved Design Development Documents, and any further adjustments in the scope of the Project authorized in writing by Owner, Contractor will proceed to prepare, for written approval by Owner, a list of the drawing type as well as drafts of the key drawings setting forth the requirements for the complete construction of each System (as approved by Owner, the “Drawings”). The Parties have agreed that the list of the Drawings to be reviewed and approved by Owner consists of General Arrangement drawings, P&IDs, Electrical One-line diagrams, and equipment Specifications. Contractor shall provide to Owner each listed Drawing as it is prepared by Contractor. Following Owner’s written approval of the listed Drawings, Contractor will proceed with the procurement, construction, installation, start-up and completion of the Systems based upon the Technical Specifications and the Drawings. Owner shall notify

Contractor as to whether it approves or disapproves (and, if it disapproves, the reasons therefore) each of the Drawings within ten (10) Business Days of its receipt of the same. Owner will review the Drawings for compliance and will xxxx and stamp them to indicate whether changes and/or corrections are required. Contractor shall address all material comments and questions appropriately including, when appropriate, incorporating the comments, corrections and/or changes on the original drawing or document and resubmitting the drawing or document. Should Owner fail to provide notification to Contractor within the aforesaid ten (10) day period after its receipt of Drawings, then the Drawings for which notification is not provided shall be deemed to have been returned as acceptable for procurement, fabrication or construction. Owner’s approval or disapproval of any design documents, including but not limited to the “Drawings” shall not impose on Owner any responsibility for design and shall not be deemed a waiver, and will not relieve Contractor of Contractor’s obligations for turnkey design, procurement and construction of the Work in accordance with the Contract Documents. Performance of any work, fabrication of materials or procurement of fabricated material, requiring the review of drawings, data, etc., prior to obtaining final review of drawings, data, etc., is at Contractor’s risk.

6.2.3.5 Rough Site Grading, Demolition and Relocation: As part of the Work, Contractor shall perform the following engineering and design services in connection with the Owner Scope:

6.2.3.5.1 Contractor has provided to Owner preliminary bidding information that includes Contractor’s requirements for rough site grading work (“Rough Site Grading”). The bidding information shall include, as necessary to satisfy Contractor’s requirements, engineering, drawings, and specifications. The bidding information shall be suitable for soliciting bids from rough site grading contractors for performance of the Rough Site Grading by such contractors in accordance with Contractor’s requirements. The design for the Rough Site Grading shall account for, be prepared in accordance with, and be coordinated with, the Approved Project Schedule, the approved Drawings, the existing Site conditions and any other planned or reasonably anticipated activities in the vicinity of Rough Site Grading. The drawings and specifications included in the bidding information shall provide detail, such as relevant geotechnical information, locations of existing structures and utilities, and beginning and final coordinates and elevations, so as to facilitate efficient and effective prosecution of the Rough Site Grading.

6.2.3.5.2 Contractor has provided to Owner bidding information that includes Contractor’s requirements for

underground relocation work (“Underground Relocation”). The bidding information consists of drawings indicating existing locations of underground utilities and proposed relocation routing. Existing underground utilities locations are based on Ground Penetrating Radar (GPR) surveys and as built drawings obtained from Owner, and will have to be field verified by Owner or Owner’s underground relocation contractors. The proposed relocation routing for the utilities is based on existing General Arrangement drawings. Field rerouting will be verified by the Underground Relocation contractors. For other unanticipated interferences encountered during the re-routing implementation, the Owner or the Owner’s underground relocation contractor will follow the same process. The bidding information is suitable for soliciting bids from underground relocation contractors for performance of the Underground Relocation by such contractors in accordance with Contractor’s requirements as outlined above. The plan for the Underground Relocation shall account for, be prepared in accordance with, and be coordinated with, the Approved Project Schedule, the approved Drawings, the existing Site conditions and any other planned or reasonably anticipated activities in the vicinity of Underground Relocation. The drawings included in the bidding information provide, in as much detail as can be reasonably determined by GPR surveys and other information on as-built drawings provided to Contractor by Owner, such as location, size, nature, and other defining characteristics of the identified underground utilities and other items required to be relocated, approximate coordinates and approximate elevations for those items (elevation and plan), relevant geotechnical information, locations of existing structures and obstructions, so as to facilitate prosecution of the Underground Relocation and to avoid subsequent relocation of the same utilities or other items. Before any relocated utilities or other items are covered up or buried, Contractor shall be afforded an opportunity, at its option, to inspect the utilities or other items to confirm that they have been relocated. Owner and Contractor shall follow the same process for any subsequent Underground Relocation required by Contractor during performance of the Work.

6.2.3.5.3 Contractor will prepare and deliver to Owner a package describing the demolition work at each Site necessary for proper construction and completion of the Project (“Site Demolition”). Contractor shall provide to Owner bidding information that includes Contractor’s requirements for Site Demolition. The bidding information shall include, as necessary to satisfy Contractor’s requirements, engineering and drawings. Design and implementation of rerouting for utilities and services in

the structures and other facilities to be demolished or relocated shall be part of the scope of Owner or Owner’s Site Demolition contractors. The bidding information shall be suitable for soliciting bids from site demolition contractors, and for performance of the Site Demolition by such contractors in accordance with Contractor’s requirements. The design for the Site Demolition shall account for, be prepared in accordance with, and be coordinated with, the Approved Project Schedule, the approved Drawings, the existing Site conditions and any other planned or reasonably anticipated activities in the vicinity of Site Demolition. The information provided by Contractor concerning Site Demolition shall provide information, such as location, size, nature, and other defining characteristics of structures and other facilities to be demolished or relocated, any adjoining structures that should not be demolished or damaged, and other details, so as to facilitate prosecution of the Site Demolition. Owner and Contractor shall follow the same process for any subsequent Site Demolition required by Contractor during performance of the Work.

6.2.3.6 Interfaces and connections for the Gypsum Dewatering Plant shall be located five feet outside the building battery limit. Based on the information provided by Owner pursuant to Section 5.2, Contractor shall prepare and submit to Owner detailed engineering, drawings and specifications for the pilings, and interfaces on Contractor’s side, for the Gypsum Dewatering Plant as described in Exhibit 1. After addressing Owner’s comments, if any, Contractor shall prepare “issued for construction” drawings showing the final locations of points of interface between the Gypsum Dewatering Plant and other portions of the Project.

6.2.3.7 Contractor’s obligations under Section 6.2.3.6 shall be performed in accordance with Sections 6.2.3.7.1 through 6.2.3.7.6.

6.2.3.7.1 Contractor shall submit to Owner for its approval “issued for construction” drawings and specifications for the pilings at Morgantown in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.2.3.7.2 Contractor shall submit to Owner for its approval “issued for construction” drawings and specifications for the pilings at Chalk Point in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.2.3.7.3 Contractor shall submit to Owner for its approval “issued for construction” drawings and specifications for the pilings at Xxxxxxxxx

in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.2.3.7.4 Contractor shall submit to Owner for its approval “issued for construction” drawings and specifications for the utility interfaces at Morgantown in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.2.3.7.5 Contractor shall submit to Owner for its approval “issued for construction” drawings and specifications for the utility interfaces at Chalk Point in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.2.3.7.6 Contractor shall submit to Owner for its approval “issued for construction” drawings and specifications for utility interfaces at Xxxxxxxxx in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.3 Procurement Services. As part of the Work, Contractor will provide the following services:

6.3.1 Procurement of Systems Equipment and Construction Equipment. Contractor will provide or procure in Contractor’s name, pay for, receive and transport to the Site, receive at the Site, unload, place and maintain in storage, remove from storage, and check-out all Construction Equipment and all Systems Equipment and any and all other equipment necessary to design and build the complete Project, excluding only the Owner Scope. In addition, all items constituting the Systems Equipment shall be in strict compliance with the Contract Documents.

6.3.1.1 Title to Systems Equipment. Title to the Systems Equipment procured by Contractor will pass to Owner when Owner has made a payment to Contractor that represents payment for such Systems Equipment. The Parties expressly understand and agree, however, that the passage of title will not release Contractor from its responsibility to perform fully its obligations under the Agreement.

6.3.1.2 Risk of Loss. Notwithstanding passage of title from Contractor to Owner, risk of loss, destruction or damage of or to Systems Equipment for each System will be borne by Contractor to the extent that Contractor will be responsible for any insurance deductible amounts required under Section 28.2 to cover such risk of loss at all times until Substantial Completion of such System. Any such insurance deductible amounts shall be treated as Allocable Costs under Section 11.5.

6.3.1.3 Storage. Contractor will provide and pay for all appropriate storage and maintenance while in storage, in accordance with

manufacturers’ recommendations, for all Systems Equipment and any and all other equipment necessary to design and build the Project on or off the Site.

6.3.2 Procurement of Chemicals, Start-Up Spares and Consumables. Contractor will pay for, receive, and deliver to the Site all of the chemicals, start-up spares and consumables required for the completion of the Project (other than fuel, ammonia, limestone, make-up water, any chemicals required for waste-water treatment). Contractor will coordinate with Owner regarding the delivery and storage of such chemicals, start-up spares and consumables at the Site. Contractor will at all times transport, store and use these chemicals in a manner that is in accordance with all Applicable Laws and Applicable Permits.

6.3.3 Inspection and Testing of Materials and Systems Equipment. As part of the Work, Contractor will inspect and test the Systems Equipment to ensure that all fabrication work is proceeding in accordance with the Approved Project Schedule and the Contract Documents and to protect Owner against defects and deficiencies in such items. Contractor will notify Owner of any pre-installation testing to any Systems Equipment (i) fourteen (14) calendar days in advance of such testing for any testing outside the Site, and (ii) twenty-four (24) hours in advance of such testing for any testing within the Site. Owner will have the option of being present at all inspections and testing on or off the Site. No inspection observed or performed or failed to be observed or performed by Owner will be deemed a waiver of any of Contractor’s obligations under this Agreement or be construed as an approval or acceptance of any portion of the Work.

6.4 Transportation Charges. Contractor will pay all transportation charges incurred by Contractor in connection with its performance of this Agreement including, without limitation, procuring and transporting the Systems Equipment and Construction Equipment, chemicals (other than fuel, ammonia, limestone, make-up water, any chemicals required for waste-water treatment) and any other items provided by Contractor pursuant to this Agreement and all charges for shipping, air travel and in-land transportation. Contractor shall have the sole and exclusive right to make the selection of vessels and transportation agencies unless otherwise reasonably directed in writing by Owner’s Authorized Representative.

6.5 Construction-Related Work. After issuance of the NTP, and as part of the Work, Contractor will perform and undertake the construction-related services described below:

6.5.1 Clearance of the Site (by Owner). Contractor will be responsible for the removal of obstructions to the Work that may be located on the Site other than those conditions or items expressly included within the Rough Site Grading, Underground Relocation or Site Demolition described in Section 5.1, 5.3.2 and 5.3.3 and for the clean up, disposal and removal of any matter related to such removal or arising in any way from the performance of such work.

Before removing any such obstructions, Contractor will discuss and agree with Owner concerning the items to be removed. Contractor will follow any instructions that Owner may have with respect to such removal. Contractor will take all reasonable precautions necessary to avoid any damage to persons or any property during the course of any such removal work..

6.5.2 Labor and Personnel. Contractor will provide and be solely responsible for all labor and personnel required in connection with the Work. All labor and personnel provided by Contractor will by training, experience or otherwise be qualified and duly licensed to perform the assigned Work items. Owner will not be responsible for or have control or charge over the acts or omissions of the Contractor, Subcontractors, or any of their agents or employees, or any other persons performing any of the Work.

6.5.3 Construction Utilities Interface. Contractor shall include in its design all equipment, parts, or other items necessary to interface with Owner’s utility facilities to fully perform and complete the Work. Contractor will interface with the Facility for the purposes of accessing reasonable consumption of utilities as described in Section 3.3.5 of Exhibit 1. Such interface will be performed according to a schedule agreed upon by Owner and Contractor.

6.5.4 Testing. Contractor shall perform all Performance Tests and the costs thereof are Allocable Costs. If the test results for the Initial Performance Test, as witnessed by Owner and adjusted to the design conditions asset forth in Section 7.7.1, reveals that a System does not meet the Performance Guarantees for such System, then the direct costs and expenses relating to the subsequent re-performance of any Performance Tests shall be treated as Guarantee Costs under Section 11.3; provided, however, that in all cases Owner shall bear the cost of fuel, ammonia, limestone, make-up water, and any chemicals required for waste-water treatment required for re-testing.

6.5.5 As-Built Drawings. As a condition to achieving Final Completion for each Facility, Contractor will provide Owner with (i) five (5) hard copies of the As-Built Drawings; and (ii) one (1) electronic copy of such As-Built Drawings and Technical Specifications in a form acceptable to Owner. In advance of Final Completion, representatives of Contractor and Owner will consult and agree upon the acceptable type, form and substance that will be required for the As-Built Drawings.

6.5.6 Operation and Maintenance Manuals. As a condition to achieving Mechanical Completion of a System hereunder, for each Facility Contractor will provide Owner with three (3) individually bound final operation and maintenance instruction manuals in hard copy and three (3) copies in electronic form, in a form and containing such information as Owner may require, with respect to each System and all subsystems thereof. The format and content for this document shall be as mutually agreed between the Parties.

6.5.7 Turnover Package. Prior to achieving Substantial Completion, Contractor will provide Owner with a turnover package with respect to such System, which will include all such drawings, start-up procedures, log sheets, and settings. Contractor shall provide a draft of the turnover package to Owner no later than four months before Substantial Completion of each System, and the format and content for this document shall be as mutually agreed between the Parties.

6.5.8 Clean Up and Waste Removal. Contractor will keep the work area and surrounding areas clean and free from accumulation of waste materials and rubbish caused by the Work. Contractor will provide a dumpster of a size and type reasonably acceptable to Owner, to be kept at a location acceptable to Owner, for the temporary storage and ultimate removal of all waste materials and rubbish. As a condition of achieving Final Completion of a System hereunder, Contractor will completely clean the work area and surrounding areas and will remove from the Site all waste materials and rubbish generated, and (unless necessary for the completion of the remaining System) all Contractor’s tools, Construction Equipment, machinery and surplus materials used in connection with such System. Contractor shall remove and dispose of all such waste materials and rubbish in accordance with the Contract Documents, all Applicable Laws, all Applicable Permits and all Owner’s rules, regulations, practices and procedures. If, in the reasonable opinion of Owner, Contractor has failed to fulfill its obligations under this Section, then Owner, after having given prior notice to Contractor, may itself clean or cause to be cleaned the work area and surrounding areas and remove all waste materials, rubbish, Contractor’s tools, Construction Equipment, machinery and surplus materials from the Site. All costs and expenses related to such actions of Owner will be Allocable Costs under Section 11.5. Owner’s taking such actions will not relieve Contractor of its obligations under this Agreement or Applicable Laws or constitute a waiver of any of Owner’s rights or a mitigation or diminution of any of Contractor’s obligations under this Agreement. For the avoidance of doubt, Contractor is not required to clean up or remove waste generated by Separate Contractors performing the Owner Scope.

6.5.9 Hazardous Substances. Contractor will take all measures necessary to prevent the release by Contractor or any of its Subcontractors of any Hazardous Substances at the Site or adjacent areas. Contractor will immediately notify Owner of any spills, emissions or other releases of Hazardous Substances at or adjacent to the Site due to Contractor or its Subcontractors. Contractor will be responsible for removing from the Site and areas adjacent thereto, and for properly disposing of, in compliance with the Contract Documents, all Applicable Laws and Applicable Permits, all Hazardous Substances generated or accumulated by Contractor or any Subcontractor in the course of performing the Work. In the event Contractor encounters on the Site material reasonably believed to be a Hazardous Substance that existed prior to the effective date of the NTP, then Contractor will immediately cease performance of any Work in the area

affected and report the condition to Owner in writing. Contractor will not thereafter resume performance of the Work in the affected area except with the prior written permission of Owner. Contractor shall provide reasonable advance notice before contacting any local, state or federal environmental regulatory agency concerning such pre-existing Hazardous Substance. Contractor may be entitled to cost and schedule relief pursuant to Section 19.6.

6.5.10 Quality Assurance/Quality Control. The Contractor shall submit to the Owner for review its quality control manual. The Contractor shall be responsible for assuring that any Subcontractor’s quality control program meets the specified requirements imposed on Contractor by Owner. Contractor’s quality program shall be consistent with Owner’s Quality Program (MIRMA Standard Quality Requirements, Rev. 0 — 07/16/01). In addition, Contractor shall comply with the following supplemental requirements:

6.5.10.1 All quality control documentation, as specified, shall be submitted for review and acceptance, to Owner, and shall include, but not be limited to the following: material certifications; inspection and nondestructive examination records; test records; and copies of deviations and approved deviation reports.

6.5.10.2 All materials, equipment or products and accessories furnished by Contractor shall be new and of first-class quality for the service intended and shall be free of all defects. Owner shall have the right to reject all materials and workmanship not conforming to the Technical Specifications or Drawings. Any defective material found shall be promptly replaced or corrected by Contractor to the satisfaction of Owner.

6.5.10.3 Contractor shall develop an inspection point program. This program shall include the manufacturing, inspection, and test operations which are required for Contractor to demonstrate product quality, whether performed in its or its Subcontractor’s or supplier’s facilities.

6.5.10.4 Owner and/or its designated representative shall have full access to Contractor and Subcontractor’s facilities for reviewing conformance to the approved quality control records, and for witnessing of inspections and tests. Owner or its designated representative shall be notified fourteen (14) calendar days prior to the start of the tests and inspection points as specified by Owner.

6.5.10.5 Non-conformances and deviations shall be documented in detail including review, acceptance, and resolution and made available for Owner review upon request. Contractor shall furnish Owner with triplicate certified copies of any and all factory test data and certificates. Owner shall have the right to reject all materials and workmanship not

conforming to the Technical Specifications or Drawings. Any defective material found during the progress of the work shall be promptly replaced or corrected by Contractor to the satisfaction of Owner.

6.5.10.6 All manufacturing errors or omissions required to be corrected in the field shall be performed by Contractor and the cost shall be treated as Allocable Cost pursuant to Section 11.5, or if performed by Owner after failure of Contractor to perform same, the cost of same shall be an Allocable Cost. Work performed in the field shall be in the same standards of quality, using approved procedures and personnel, as required in the Contractor’s shops.

6.5.11 Contractor shall provide all labor, materials and equipment and other services necessary to construct and install the pilings, and utility interfaces on Contractor’s side (including power supply interface, water interface and point-to-point control interconnections) for the Gypsum Dewatering Plant in accordance with the approved “issued for construction” drawings and specifications prepared by Contractor pursuant to Section 6.2.3.6

6.5.12 Contractor’s obligations under Section 6.5.11 shall be performed in accordance with Sections 6.5.12.1 through 6.5.12.3 below.

6.5.12.1 Contractor shall achieve substantial completion of the utility interfaces at Morgantown in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.5.12.2 Contractor shall achieve substantial completion of the utility interfaces at Chalk Point in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.5.12.3 Contractor shall achieve substantial completion of the utility interfaces at Xxxxxxxxx in accordance with Exhibit 15, as same may be modified by mutual agreement of the Parties.

6.6 General. As part of the Work, Contractor will perform all other obligations imposed under the Contract Documents and any other services that may reasonably be inferred from the Contract Documents as being necessary for the proper execution and completion of the Work.

6.7 Non-Interference. Contractor will not, and will ensure that Contractor’s Subcontractors do not, interfere with the ongoing operations of the Facility, except as otherwise approved by Owner. Contractor will take all reasonable action to protect the Facility and all other property of Owner from damage as a result of its performance of the Work. Contractor shall at all times limit its employee’s activities to the specific work areas on the Site. Contractor’s vehicles or personnel are not to enter or pass through the operating areas of the Facility, except for travel to and from the work areas along designated routes approved by Owner.

6.8 Safety. Owner is committed to a safe workplace. Contractor shall at all times be solely responsible for providing safe conditions in its work area free from hazards that may cause harm to person or property while performing the Work for Owner. Contractor will initiate, maintain and supervise all necessary or desirable safety precautions and programs in connection with the performance of the Work. Such safety precautions and programs will be in compliance with Owner’s safety and job work rules and regulations applicable at each site as well as Applicable Laws and Applicable Permits. Pursuant to such safety precautions and programs, Contractor will take all reasonable actions necessary to prevent injury or death to any persons and to prevent damage or loss to any property while it is performing the Work at the Site. During its performance of the Work, Contractor will be responsible for providing for the safety of workers employed by Contractor and its Subcontractors and for the safety of any other persons who may be affected by the Work on or in proximity to the Site. Contractor will comply with all Owner safety requirements, and all Applicable Laws and Applicable Permits regarding safety. Contractor will immediately notify Owner upon the occurrence of any injury or damage to property that occurs on the Site. Contractor will promptly remedy any damage or loss to property at or to the Site or at the site of or to the Facility caused by Contractor or its Subcontractors. Whenever, in the reasonable opinion of Owner, Contractor has failed to take sufficient precautions for the safety of the public or the protection of the Facility, the Systems, the Site or property adjacent thereto, creating, in the reasonable opinion of Owner, an emergency requiring immediate action, then Owner, after having given reasonable prior notice to Contractor (except in the case of an emergency, in which event notice may be given after the fact), may cause such sufficient precautions to be taken or provide such protection. The cost and expense of taking or provision of any such precautionary actions by Owner or its agents will be treated as an Allocable Cost pursuant to Section 11.5. Owner’s taking any such precautionary actions will not relieve Contractor of its obligations under this Agreement or Applicable Laws or constitute a waiver of any of Owner’s rights or a mitigation or diminution of any of Contractor’s obligations under this Agreement. In addition to, and to further describe Contractor’s safety obligations, the following are understood and agreed:

6.8.1 Contractor Responsibility. Contractor agrees to employ the appropriate means, methods, techniques, sequences, or procedures of construction, and to establish or undertake safety precautions/programs in accomplishing the Work. Contractor shall also be responsible for assuring that all of its Subcontractors comply with these safety conditions. Contractor shall at all times be responsible for initiating, maintaining, and supervising all safety precautions and programs in connection with the Work, and will perform the Work in accordance with good safety practices.

6.8.2 Fitness For Duty, Drug, Alcohol Abuse And Safety Policy For Access To Owner Facilities. Sections 6.8.3 through 6.8.6 apply to the personnel of Contractor and all Subcontractors providing maintenance, construction, and related services at the Sites. Owner employees are covered by Mirant Drug Prevention Policy and employee conduct policy.

6.8.3 Access To Owner Facilities. Owner may deny access to, or remove from its Facilities the personnel of Contractor or any Subcontractor, who Owner has reasonable grounds to believe has:

6.8.3.1 Engaged in alcohol abuse, illegal drug activity or unsafe work practices which in any way impairs Owner’s ability to maintain safe work facilities, to protect the health and well-being of Owner employees, customers, and the general public, and to promote the public’s confidence in Owner service and operations; or,

6.8.3.2 Been found guilty, pled guilty, or pled nolo contendere to a charge of sale or distribution of any illegal drug or controlled substance as defined under federal or governing state law within the past five (5) years, whether or not the criminal record was later expunged or sealed by a court order.

Any individual who has been denied access to, or removed from, Owner facilities for violating this policy may obtain permission to enter or reenter provided the individual establishes, to the satisfaction of his or her employer and Owner that the previous activity which formed the basis for denying access or removal has been corrected and his or her future conduct will conform with this policy. Owner retains the right of final approval for the entry or reentry of any individual previously denied access to or removed from Owner facilities.

6.8.4 Prohibited Activities. The following activities are prohibited at all Facilities:

6.8.4.1 Possessing, furnishing, selling, offering, purchasing or using firearms, weapons, or explosives, or being under the influence of drugs or other controlled substances as defined under federal or governing state law;

6.8.4.2 Possessing, furnishing, selling, offering, or using alcoholic beverages, or being under the influence of alcohol; or

6.8.4.3 Engaging in any unsafe work practices.

6.8.5 Suspected Violation Of Policy. Where reasonable cause exists that Section 6.8.4 has been violated, Contractor or Subcontractor shall inform the Owner. Contractor or Subcontractor shall also take any or all of the following actions:

6.8.5.1 Search the individual, his or her vehicle, locker, storage area, and personal effects;

6.8.5.2 Require the individual to undergo a medical examination to determine his or her fitness for duty. Such examination shall include obtaining a urine and/or blood specimen for drug or alcohol analysis unless the examining physician deems such tests to be inappropriate; or

6.8.5.3 Take any other appropriate action to determine if there has been a violation of Section 6.8.4.

6.8.6 Refusal To Comply. Refusal to comply with a request made under this Section 6.8 shall be grounds for denying access to, or immediate removal from, any Owner facility.

6.8.7 Protection. At all times with respect to its Work activities, Contractor must provide a safe environment and working conditions, and shall take necessary precautions for the safety of, and shall provide the necessary protection to prevent damage, injury, or loss to:

6.8.7.1 Its employees and those employees of its Subcontractors on the Project, and other persons who may be affected thereby, including, without limitation, any employees of Owner or Owner’s Separate Contractors on the Project. Contractor will provide such safety equipment to its employees as is necessary to meet the requirements of good safety practices and Applicable Laws and regulations, including, but not limited to, eye, head, and ear protection. Hard hats, approved safety shoes and approved eye protection will be used while working on Owner work sites. Ear protection is required inside operating parts of the plants.

6.8.7.2 All the Work and all materials or equipment to be incorporated therein, whether in storage on or off the Site.

6.8.7.3 Other property at the Site or adjacent thereto, including trees, shrubs, lawns, walks, pavements, roadways, structures, and utilities not designated for removal, relocation, or replacement in the course of the Work.

Contractor shall erect and maintain, as required by the conditions and progress of the Work, all necessary safeguards for the safety and protection of the Work and of persons and property. Contractor shall advise Owner whenever the Work is expected to affect the owners of adjacent utilities and shall cooperate with Owner in providing notice to such owners. Contractor shall keep all its tools, equipment, materials, etc., in such condition that the Work can be carried on with safety to employees of Owner, Contractor, other contractors, and to other persons and property on or near the Site or Owner premises. Contractor shall furnish and erect all temporary barricades required by federal, state, or local laws, ordinances, rules, or regulations, by any governmental authority or by Project conditions. All such barricades shall be arranged so as to ensure the safety of all workers,

persons, and property, and shall be removed by Contractor at the completion of the Work.

6.8.8 OSHA Compliance. Contractor shall comply with OSHA Construction Safety and Health Standards, Construction Industry Standards (29 CFR part 1926), applicable General Industry Standards (29 CFR part 190), and all other Applicable Laws, ordinances, rules, regulations, and orders of any public body having jurisdiction for the safety of persons or property or to protect them from damage, injury, or loss. Contractor shall also comply with Owner safety regulations and rules.

6.8.9 Material Safety Data Sheets. In accordance with Applicable Laws, Contractor must provide Material Safety Data Sheets (MSDS) on all chemical products and toxic substances. This MSDS must be sent to the Owner’s contract administrator authorizing the contract or purchase order.

6.8.10 Dust and Fume Control. Contractor has the responsibility for knowledge of applicable laws and regulations relating to dust and fumes arising from, or related to, the Work, as well as methods of compliance and control. Contractor must treat, in an approved fashion, the area in which it is conducting its operations, as well as any access areas into its area in order to control dust. When demolition or other Work creates harmful dust or fumes, Contractor shall provide satisfactory means to protect personnel and property against any such substances in accordance with Applicable Laws and Applicable Permits.

6.8.11 Water Pollution. Contractor has the responsibility for knowledge of Applicable Laws and Applicable Permits relating to water pollution arising from, or related to, the Work, as well as methods of compliance and control. Contractor shall provide suitable facilities to prevent the introduction of any substances or materials into any stream, river, lake, underground aquifer, or other body of water which may pollute the water or constitute substances or materials deleterious to fish and wildlife in accordance with Federal, State, and local laws and regulations. Contractor is responsible for developing, maintaining and complying with a Storm Water Pollution Prevention Plan (SWPPP) necessary for the Work at each Site in accordance with Applicable Laws and Applicable Permits. Contractor shall furnish Owner with a copy of its SWPPP for each Site before commencing the Work at that Site.

6.8.12 Operating Environment. Contractor must assure that its employees and Subcontractors work safely in the environment of an electric utility.

6.8.12.1 Generating Sites. Within power plants, there are fire, high-pressure steam, high-voltage electricity, and chemicals. All require careful attention to those hazards and extreme care to assure that Contractor’s operation does not damage or interfere with the plant operation.

6.8.12.2 Electrical System. Within substations, and overhead and underground transmission lines, extremely high-voltage electricity requires the strict compliance with OSHA and Owner’s safety regulations.

6.9 Operating Utilities Interface. Owner will, in accordance with the schedule agreed to by Owner pursuant to Section 8.1, make such utilities available to Contractor as described in Exhibit 1.

6.10 Owner’s Right to Inspect, Stop and Re-Perform Work.

6.10.1 Owner’s Right to Attend Contractor Inspections. Owner will have the option of being present at all inspections and testing on or off the Site, and, in the event that the progress and quality of the Work are not proceeding in accordance with Contract Documents or the Approved Project Schedule, will be entitled to make recommendations to Contractor or any Subcontractor for the purpose of remedying such deficiencies. No inspection observed or performed or failed to be observed or performed by Owner will be deemed a waiver of any of Contractor’s obligations or be construed as an approval or acceptance of the Work.

6.10.2 Inspection and Re-Performance. Owner will have the right to have access to and inspect the Work, wherever located and at any stage of completion. Owner may reject any Work that does not comply with the Contract Documents. If Owner’s inspection reveals any such non-compliance or any other defects in any portion of Work, then Contractor will promptly correct all such defective Work and the cost of such correction shall be treated as an Allocable Cost under Section 11.5. If Contractor fails to initiate correction of the defective Work within five (5) calendar days of Owner’s notice, Owner may, without prejudice to any other remedy Owner may have under this Agreement, correct such defective Work. Owner’s correction of such defective Work will not relieve Contractor of its obligations under this Agreement. All costs and expenses related to such actions of Owner will be treated as Allocable Costs, and Contractor will promptly reimburse Owner for all such amounts if and to the extent such costs are to be borne by Contractor pursuant to Section 11.5.

7. PERFORMANCE GUARANTEES

Contractor guarantees that the Systems will meet the performance guarantee requirements below, as further described in Exhibit 6 (the “Performance Guarantees”).

7.1 Input Guarantees for FGD Systems. The following input guarantees as further set forth in Exhibit 6 (“Input Guarantees”) apply to the FGD Systems:

7.1.1 Guaranteed Consumption Levels. The guaranteed consumption levels and related engineering design margins (the “Engineering Design

Margins”) are set forth in Exhibit 6 for consumption of auxiliary power, limestone, and makeup water.

7.1.2 Consumption Within Engineering Design Margins. In cases where the actual consumption exceeds the guarantee, but is within the Engineering Design Margins as established pursuant to Section 7.1.1, then, as Owner’s sole and exclusive remedy, the liquidated damages for excess consumption listed below shall accrue and be treated as Guarantee Costs under Section 11.3.

7.1.3 Consumption Outside Engineering Design Margins. In cases where the actual consumption exceeds both the guarantee and the Engineering Design Margins, then the liquidated damages for excess consumption shall apply plus Contractor shall perform all Work necessary to satisfy the Engineering Design Margins and re-test the Systems until the testing verifies that consumption is within the Engineering Design Margins as established pursuant to Section 7.1.1. The costs of such work and re-testing shall be treated as Guarantee Costs pursuant to Section 11.3. Once a System is placed in service and the actual operating parameters are established, the Engineering Design Margin shall be adjusted by agreement of the Parties to reflect the actual operating requirements and to allow reasonable operating capacity margins in accordance with Prudent Utility Practices and Prudent Electrical Practices.

7.1.4 Liquidated Damages for Input Guarantees for FGD Systems. Liquidated damages shall be assessed against Contractor for exceeding guaranteed consumption levels for FGD Systems as follows:

7.1.4.1 Power Consumption. Liquidated damages of $1,370 per kW shall apply for every kW in excess of the guaranteed power consumption (excluding fan).

7.1.4.2 Make-Up Water Consumption. Liquidated damages of $4,000 per gallon/minute shall apply for every gallon/minute in excess of the guaranteed water consumption.

7.1.4.3 Limestone Consumption. Liquidated damages of $1,000,000 per ton/hr for each ton/hr in excess of the guaranteed limestone consumption.

7.2 Output Guarantees for FGD Systems.

7.2.1 List of Output Guarantees. The following output guarantees as further set forth in Exhibit 6 (“Output Guarantees”) shall apply to the FGD Systems:

7.2.1.1 SO2 Removal as described in Section 1.1.1 of Exhibit 6.

7.2.1.2 Mercury Removal as described in Section 1.1.14 of Exhibit 6.

7.2.1.3 Equivalent Availability Guarantee as described in Section 1.2 of Exhibit 6.

7.2.1.4 Particulate Emission Level as described in Section 1.1.2 of Exhibit 6.

7.2.1.5 Oxidation Level as provided in Section 1.1.10 of Exhibit 6.

7.2.1.6 Sound Level as provided in Section 1.1.12 of Exhibit 6.

7.2.1.7 Wastewater Effluent Quality as provided in Section 1.1.13 of Exhibit 6, and Item 6 of Exhibit 8C.

7.2.2 Correction by Contractor. For each of the Output Guarantees for a FGD System, System output shall satisfy the guaranteed value as a minimum. If during testing the guaranteed value is not met, Contractor shall correct the Work, repair or replace the affected parts or systems and re-test until the guaranteed values are achieved, except that for Mercury Removal the provisions of Section 7.2.3 shall apply. The costs of such correction and re-testing (and any payments due from Contractor pursuant to Section 7.2.3 to the extent not collected by Contractor from the FGD Subcontractor) shall be treated as Guarantee Costs pursuant to Section 11.3.

7.2.3 Mercury Removal. Mercury Removal will be tested for during Performance Test PA as described in Exhibit 6. In the event that the actual Mercury Removal is less than the guaranteed Mercury Removal, Owner shall asses Contractor $1,000,000 per each FGD System where the performance guarantee was not achieved, and the Mercury Removal criteria for successful completion shall be deemed to have occurred as of the date of the Performance Test PA. Such assessment shall be treated in accordance with Article 7.2.2. For a period of ninety (90) days after the Performance Test PA, Contractor shall be given the opportunity to modify and re-test the system in order to achieve the Mercury Removal performance guarantee. If the performance guarantee is met after re-testing by Contractor, within the ninety (90) day cure period, Owner shall return to Contractor the above-referenced payments if such amounts were paid to Owner pursuant to Article 7.2.2 for each FGD System where the performance guarantee was achieved. After the ninety (90) day cure period has expired and the performance guarantee is not met after re-testing by the Contractor, Owner, as a performance liquidated damage, shall retain the above-referenced payments pursuant to Article 7.2.2 for each FGD System where the performance guarantee was not achieved. During the ninety (90) day cure period, the Contractor shall

have access to the equipment to implement potential remedies, and the FGD shall be operated in a reasonable manner to support Contractor’s efforts.

7.3 Operational Guarantees for FGD Systems.

7.3.1 List of Operational Guarantees. The following operational guarantees as further set forth in Exhibit 6 (“Operational Guarantees”) shall apply to the FGD Systems:

7.3.1.1 Minimum Turndown Capability as a percentage of full load as provided in Section 1.1.9 of Exhibit 6.

7.3.1.2 Maximum Entrained Moisture Carryover as provided in Section 1.1.4 of Exhibit 6.

7.3.1.3 Fan Characteristics. Performance guarantees for the booster fans shall be as provided in Section 1.1.11 of Exhibit 6.

7.3.1.4 Pressure Drop. Pressure drop through FGD System as provided in Section 1.1.3 of Exhibit 6.

7.3.2 Correction by Contractor. For each of the Operational Guarantees for the FGD Systems, the System shall satisfy the guaranteed value as a minimum. In case during testing the guaranteed value is not satisfied, Contractor shall correct the Work, repair or replace the affected parts or systems and re-test until the guaranteed values are achieved. The costs of such correction and re-testing shall be treated as Guarantee Costs pursuant to Section 11.3.

7.4 Blank

7.5 Blank.

7.6 Blank.

7.7 Performance Testing.

7.7.1 Performance Testing . After the occurrence of Mechanical Completion for each System, and after the “Ready for Flue Gas to Scrubber” milestone in Exhibit 15 is achieved, Contractor will start-up the System. Once Contractor has started a System, Owner will operate the corresponding Unit or Units continuously for ninety (90) days (the “FGD Tuning Period”) during which Contractor and its FGD Subcontractor will be afforded an opportunity to tune and maximize the operation of the System. The FGD Tuning Period shall include at least twenty (20) days, scheduled at Contractor’s reasonable requirement, during which the corresponding Unit or Units are operated at or near full load. Contractor shall notify Owner when each System is ready to be tested (such notice, the “Testing-Ready Notice”). Contractor will provide notice to Owner of

Performance Test PA no later than fifteen (15) days prior to the then-scheduled date of Provisional Acceptance for the System to be tested. Contractor will provide notice to Owner of Performance Test 1 no later than fifteen (15) days prior to the then-scheduled date of Substantial Completion for the System to be tested. Contractor will perform the tests on each System as are described in Exhibit 6, which tests are designed to demonstrate whether the System achieves the Performance Guarantees (the “Performance Tests”); provided, that the results of such tests will be adjusted, in a manner agreed to by the Parties, to the design conditions set forth in Exhibits 1 and 6 and in accordance with correction curves prepared by Contractor in accordance with Exhibit 6 and approved by Owner. Owner has the right to witness all occurrences of Performance Test 1 and Performance Test PA. If a System fails to meet any of the Performance Guarantees during such Performance Test PA or Performance Test 1, then Contractor will immediately take such actions as are required to correct the Work so as to meet the Performance Guarantees, and notify Owner when such System is ready to be re-tested. Contractor will use all reasonable efforts to complete the re-performed Performance Test 1 and Performance Test PA on such System within thirty (30) days. The costs of such correction and re-testing shall be treated as Guarantee Costs pursuant to Section 11.3. If a System fails to satisfy the requirements at Performance Test 2 within the first 270 days of testing, any costs of retesting and correction that are not due to failure of the Owner to operate the System in accordance with Section 1.2 of Exhibit 6 and the manuals provided by Contractor pursuant to Section 6.5.6, shall be treated as Guarantee Costs. Owner shall afford the Contractor opportunity to test at least two FGD Systems before July 2011. Provided that the Performance Guarantees as set forth in Exhibit 6 are met during these tests, and the Performance Tests have not been performed on a maximum of two FGD Systems, the Systems not tested shall be deemed Substantially Complete.

7.8 Concurrent Obligations. The Performance Tests listed in Sections 2.1.5 of Exhibit 6 shall be performed concurrently. If Contractor’s performance of such Performance Tests on a System reveals that such System is not capable of concurrently passing such Performance Tests, then Contractor will immediately and continuously take all measures that are necessary to cause such System to pass such Performance Tests concurrently; provided, that such measures must meet the standards set forth in Article 15. The cost of taking such measures, including without limitation all additional costs of labor, equipment, supplies, tools, non-consumable chemicals and materials shall be treated as Guarantee Costs under Section 11.3.

8. PROJECT SCHEDULE; SCHEDULE GUARANTEES

8.1 Project Schedule. Attached as Exhibit 15 is the “Draft Project Schedule”. Contractor has used its best efforts to schedule all work that requires a Unit to be taken out of service during Owner’s planned outages excepting for “tie-in” outages where Contractor’s obligation is to use reasonable efforts to schedule those outages. The Parties shall agree on the Approved Project Schedule within thirty (30) days of execution of this Agreement. Once the Approved Project Schedule is agreed, it shall replace and

govern over the Draft Project Schedule. The “Approved Project Schedule” contains an integrated detailed engineering, procurement, fabrication, delivery, construction and startup schedule of the Work and the interface activities of Owner’s Separate Contractors and specifies the Guaranteed Provisional Acceptance Dates for the Work included in each System, the Guaranteed Final Completion Date of the Work included in each Facility and all Scheduled Outage Periods, and meets the following conditions:

8.1.1 Guaranteed Provisional Acceptance Date. The Work necessary for and included in the milestone identified in Exhibit 15 as “Ready for Flue Gas to Scrubber” for each FGD System at each Facility shall be completed before 23:59 December 31, 2009, and the Guaranteed Provisional Acceptance Date for each FGD System shall be a date not later than one hundred five (105) days after the first day of the Scheduled Outage Period set forth in the Approved Project Schedule for the final tie-in outage for that System.

8.1.2 Conditions for Outages. The start dates, end dates, and duration of outages (defined as calendar days from 07:00 on the start date of the outage until 23:59 on the end date of the outage) are subject to Owner’s approval and shall meet the following conditions:

8.1.2.1 Final tie-in outages for each Unit for Work on an FGD System will have a maximum duration of fifteen (15) days;

8.1.2.2 Electrical tie-in outages per Unit will occur in March 2009 and have a maximum duration of five (5) days; and

8.1.2.3 The start dates, end dates, and duration of all other outages, shall be as agreed by Owner with a minimum of six (6) months advance notice to Owner from Contractor.

8.1.3 Outage Start and End Dates. The start and end dates of all outages will be mutually agreed between the Parties. Contractor shall be flexible and work with the Owner towards agreeing on the start and end dates of outages.

8.1.4 Blank.

8.1.5 Concurrent Outages. Except as set forth in this Section 8.1.5, Contractor shall not plan an outage for any Unit at Morgantown or Chalk Point for a time when any other Unit at the same Facility is also out of service for a planned outage by Owner or Contractor. In the specific case of Chalk Point Owner shall allow one concurrent outage, prior to the tie-in outage, for a time and duration to be mutually agreed by the Parties. Contractor shall not schedule an outage for any Unit at Xxxxxxxxx, if two other Units at Xxxxxxxxx are also out of service for a planned outage by Owner or Contractor. Owner shall provide six (6) months advance notice of outages planned by Owner. Contractor shall provide six (6) months advance notice of outages planned by Contractor that are not in or in accordance with the Approved Project Schedule.

8.1.6 Immovable Milestones. There shall be no change to the following milestones in Exhibit 15:

8.1.6.1 Provisional Acceptance for each FGD System shall occur not later than one hundred five (105) days after the first day of the last Scheduled Outage Period set forth in the Approved Project Schedule for the final tie-in outage for that System, and Substantial Completion for each FGD System shall occur not later than ninety (90) days after the date of Provisional Acceptance for that System;

8.1.6.2 Owner permitting completion and construction full release shall occur not later than September 1, 2007;

8.1.6.3 Required dates for operating utilities interface as described in Exhibit 15;

8.1.6.4 Permitting documents submission date as described in Section 6.2.3.2;

8.1.6.5 The Guaranteed Provisional Acceptance Date as set forth in 8.1.1;

8.1.6.6 Owner’s schedule commitments as set forth in Section 5.3;

8.1.6.7 With respect to each FGD System, the Work included in the milestone identified as “Ready for Flue Gas to Scrubber” in Exhibit 15 shall be completed not later than December 31, 2009.

8.2 Schedule Guarantee. As further provided in this Section 8.2, liquidated damages will accrue for certain extended and unplanned outages, and for delay in achieving any Guaranteed Provisional Acceptance Date, the Guaranteed Substantial Completion Date, or Guaranteed Final Completion Date. Such liquidated damages shall be treated as Guarantee Costs pursuant to Section 11.3.

8.2.1 Work Progress and Completion.

8.2.1.1 General. Contractor will schedule, report and perform the Work according to the Approved Project Schedule. Contractor will provide Owner with a Progress Report on the fifteenth (15th) day of each month during the performance of the Work.

8.2.1.2 Maximum Outage Period. Contractor acknowledges that Owner will incur significant damages and liabilities if any of the Units is taken out of operation for any period longer than the Scheduled Outage Period for such Unit (as will be reflected in the Approved Project

Schedule). Accordingly, all Work that must be performed while a Unit is out of operation will be performed by Contractor during normal maintenance outages scheduled by Owner or during the Scheduled Outage Period for such Unit. Subject only to adjustment by Change Order, the Contractor’s exact compliance with the Scheduled Outage Period set forth in the Approved Project Schedule is crucial to Owner’s business and Contractor has planned, organized and coordinated the Work to fully and exactly comply with such Scheduled Outage Period. Because of the significant economic harm that Owner will suffer if the Contractor does not comply with the Scheduled Outage Period, Owner and Contractor agree that if, during an outage, Contractor is not performing the Work in accordance with the time limits for a Scheduled Outage Period and Owner can reasonably deduce, during the outage, that Contractor will not complete the Work necessary within the Scheduled Outage Period, then Owner may utilize separate contractors to perform all or part of the Work necessary to complete such Work within the Scheduled Outage Period. Liquidated damages for such losses shall accrue for each day that the Contractor does not start and finish the work in exact accordance with the Scheduled Outage Period (such payment with respect to each Unit, the “Excessive Outage Payments”) in the following amounts:

Morgantown; $125,000 per Unit per day

Xxxxxxxxx; $70,000 per Unit per day

Chalk Point; $100,000 per Unit per day

Owner shall use its best efforts to avoid interference with the Contractor’s Work by the Owner and Owner’s Separate Contractors during the Scheduled Outage Period. Contractor understands and agrees that it shall not interfere with and shall cooperate with the Owner and Owner’s Separate Contractors at the Project Site to fully perform the Work with no or minimal impact to any other party.

8.2.1.2.1 Amounts Reasonable. The Parties agree that the terms, conditions and amounts fixed as liquidated damages pursuant to Section 8.2.1.2 for Excessive Outage Payments are reasonable, considering the actual losses that Owner will incur if the outage of a Unit exceeds the Scheduled Outage Period for such Unit. The amounts of these liquidated damages are agreed upon and fixed hereunder by the Parties because of the difficulty of ascertaining the exact amount of losses that Owner will actually incur in such event, and the Parties agree that such amounts are a reasonable estimate of Owner’s probable loss (and are not a penalty) and that such amounts will be applicable regardless of the actual losses incurred by Owner.

8.2.1.2.2 Bonus for Early Completion. If the Contractor finishes its Work during an outage before the end date of the Scheduled Outage Period, then for each day Owner is able to generate power from the affected Unit Contractor shall receive a bonus as follows:

Morgantown: $ 35,000 per Unit per day

Xxxxxxxxx: $15,000 per Unit per day

Chalk Point: $25,000 per Unit per day

8.2.1.2.3 Payment of Excessive Outage Payments. Owner will invoice Contractor for any Excessive Outage Payments due under Section 8.2.1.2 on a monthly basis, and Contractor will be assessed the undisputed portion of each such invoice in full within thirty (30) calendar days of its receipt. If, subject to Section 11.3, an undisputed amount remains unpaid for more than five (5) days after receipt of notice from Owner that the amount is overdue, Owner may deduct any such amounts due as Excessive Outage Payments from any unpaid amounts owed by Owner to Contractor under this Agreement.

8.2.2 Guaranteed Provisional Acceptance Date. Contractor guarantees that Provisional Acceptance of each of the Systems will occur on or before the “Guaranteed Provisional Acceptance Date” for each System as set forth in the Approved Project Schedule, subject only to adjustment by Change Order pursuant to Article 19 of this Agreement.

8.2.3 Late Provisional Acceptance Payments. If Provisional Acceptance of a System does not occur on or before the Guaranteed Provisional Acceptance Date for such System, as adjusted by Change Order pursuant to the provisions of this Agreement, liquidated damages shall accrue in the amounts provided below (“Late Provisional Acceptance Payments”):

8.2.3.1 Before 23:59 on December 31, 2009 for the FGD Systems. In the event that Provisional Acceptance of an FGD System is not achieved by a Guaranteed Provisional Acceptance Date that is prior to 23:59 on December 31, 2009, then the following Late Provisional Acceptance Payment shall apply for each day beginning with the day after the Guaranteed Provisional Acceptance Date and ending on the earlier of (i) 23:59 on December 31, 2009, or (ii) the date Provisional Acceptance is achieved:

Xxxxxxxxx – $25,000 per FGD System per day

Chalk Point – $25,000 per FGD System per day

Morgantown – $25,000 per FGD System per day

8.2.3.2 After 23:59 on December 31, 2009 for FGD Systems. The Late Provisional Acceptance Payments set forth below shall apply in the following circumstances. In the event that the Milestone described as “Ready for Flue Gas to Scrubber” in Exhibit 15 for an FGD System is not achieved before 23:59 on December 31, 2009, then the stated Late Provisional Acceptance Payment shall apply for each day beginning with January 1, 2010, and ending with the day before such Milestone is achieved. In the event that Provisional Acceptance of an FGD System is not achieved by a Guaranteed Provisional Acceptance Date that is after December 31, 2009 then, unless reduced pursuant to Section 8.2.3.4, the stated Late Provisional Acceptance Payment shall apply for each day beginning with the Guaranteed Provisional Acceptance Date and ending with the day before Provisional Acceptance is achieved. The Late Provisional Acceptance Payments applicable to the FGD Systems at each Facility are as follows:

Xxxxxxxxx – $100,000 per FGD System per day

Chalk Point – $100,000 per FGD System per day

Morgantown – $125,000 per FGD System per day

In the event that there is delay in both achievement of the “Ready for Flue Gas to Scrubber” milestone for a System and achievement of Provisional Acceptance for the same System, then such Late Provisional Acceptance Payments shall apply without duplication. For example, if completion of the “Ready for Flue Gas to Scrubber” milestone for the System is delayed for ten days (i.e., such milestone is not achieved until January 11, 2010), and Provisional Acceptance of the System is delayed by fifteen days (i.e., from a Guaranteed Provisional Acceptance Date of February 28, 2010 until an actual date of Provisional Acceptance of March 16, 2010) then Late Provisional Acceptance Payments will accrue for the ten days of delay in achieving the milestone (from January 1 through 10), but will not accrue for the first ten days of delay in achieving Provisional Acceptance (from February 28 through March 10). Under this example, Late Provisional Acceptance Payments will accrue for the remaining five days of delay in achieving Provisional Acceptance, from March 11 to March 15.

8.2.3.3 Blank.

8.2.3.4 Reduced Late Provisional Acceptance Payments Period. In the event that Provisional Acceptance of an FGD System is not achieved on or before the Guaranteed Provisional Acceptance Date, but such Provisional Acceptance would have been achieved if not for an initial SO2 removal test showing an SO2 removal percentage below 98% but greater than 94%, then the following Late Provisional Acceptance Payments shall apply for each day beginning on the later of (i) January 1,

2010 or (ii) the date of the initial SO2 removal test, and ending on the day before Provisional Acceptance is achieved:

8.2.3.4.1 If the initial test result is less than 98% and greater than 97%, then the Late Provisional Acceptance Payment shall be $30,000 per FGD System per day for the first 30 days, and the full amount set forth in Section 8.2.3.2 for each day thereafter.

8.2.3.4.2 If the initial test result is less than or equal to 97% and greater than 96%, then the Late Provisional Acceptance Payments shall be $30,000 per FGD System per day for the first 26 days, and the full amount set forth in Section 8.2.3.2 for each day thereafter.

8.2.3.4.3 If the initial test result is less than or equal to 96% and greater than 95%, then the Late Provisional Acceptance Payments shall be $30,000 per FGD System per day for the first 19 days, and the full amount set forth in Section 8.2.3.2 for each day thereafter.

8.2.3.4.4 If the initial test result is less than or equal to 95% and greater than 94%, then the Late Provisional Acceptance Payments shall be $30,000 per FGD System per day for the first 10 days, and the full amount set forth in Section 8.2.3.2 for each day thereafter.

8.2.3.5 Amounts Reasonable. The Parties agree that the terms, conditions and amounts fixed as liquidated damages pursuant to Section 8.2.3 for Late Provisional Acceptance Payments are reasonable, considering the actual losses that Owner will incur if Contractor fails to achieve Provisional Acceptance of a System by the Guaranteed Provisional Acceptance Date for such System. The amounts of these liquidated damages are agreed upon and fixed hereunder by the Parties because of the difficulty of ascertaining the exact amount of losses that Owner will actually incur in such event, and the Parties agree that such amounts are a reasonable estimate of Owner’s probable loss (and are not a penalty) and that such amounts will be applicable regardless of the actual losses incurred by Owner. The receipt of any such liquidated damages will not affect, nor be affected by, Owner’s rights to terminate this Agreement pursuant to Sections 23.4 or 23.5.

8.2.3.6 Payment of Late Provisional Acceptance Payments. Owner will invoice Contractor for any Late Provisional Acceptance Payments due under Section 8.2.3 on a monthly basis, and Contractor will be assessed the undisputed portion of each such invoice in full within thirty (30) calendar days of its receipt. If, subject to Section 11.3, an

undisputed amount remains unpaid for more than five (5) days after receipt of notice from Owner that the amount is overdue, Owner may deduct any such amounts due as Late Provisional Acceptance Payments from any unpaid amounts owed by Owner to Contractor under this Agreement.

8.2.4 Guaranteed Substantial Completion Date. Contractor guarantees that Substantial Completion of each of the Systems will occur on or before the “Guaranteed Substantial Completion Date” for each System. The Guaranteed Substantial Completion Date for each FGD System at each Facility shall be the date that is ninety (90) days after date on which such System achieves Provisional Acceptance.

8.2.4.1 Late Substantial Completion Payments. If Substantial Completion of the Work required in connection with a Facility does not occur on or before the Guaranteed Substantial Completion Date for such Facility, then subject only to adjustment of the Substantial Completion Date by Change Order pursuant to Article 19 of this Agreement, Contractor hereby agrees to be assessed to Owner, $500 per calendar day for each calendar day after such Guaranteed Substantial Completion Date until Substantial Completion of all Work required in connection with such System is achieved (“Late Substantial Completion Payments”).

8.2.4.2 Amounts Reasonable and Exclusive Remedy for Delay. The Parties agree that the terms, conditions and amounts fixed as liquidated damages pursuant to Section 8.2.4.1 for Late Substantial Completion Payments are reasonable, considering the actual losses that Owner will incur if Contractor fails to achieve Substantial Completion for a System by the Guaranteed Substantial Completion Date for such System. The amounts of these liquidated damages are agreed upon and fixed hereunder by the Parties because of the difficulty of ascertaining the exact amount of losses that Owner will actually incur in such event, and the Parties agree that such amounts are a reasonable estimate of Owner’s probable loss (and are not a penalty) and that such amounts will be applicable regardless of the actual losses incurred by Owner. The Parties agree that the Late Provisional Acceptance Payments, Excessive Outage Payments, and Late Substantial Completion Payments are the sole and exclusive monetary remedy of Owner for damages it incurs due to delay in completing outages or achieving Provisional Acceptance or Substantial Completion; notwithstanding anything herein to the contrary, Owner reserves all of its rights and remedies under Section 6.10, Article 7, Article 14, Article 23 and Article 28.

8.2.4.3 Payment of Late Substantial Completion Payments. Owner will invoice Contractor for any Late Substantial Completion Payments due under Section 8.2.4 on a weekly basis, and Contractor will

be assessed the undisputed portion of each such invoice in full within thirty (30) calendar days of its receipt. If, subject to Section 11.3, an undisputed amount remains unpaid for more than five (5) days after receipt of notice from Owner that the amount is overdue, Owner may deduct any amounts due as Late Substantial Completion Payments from any unpaid amounts owed by Owner to Contractor.

8.2.5 Guaranteed Final Completion Date. Contractor guarantees that Final Completion of the Work at each Facility will be achieved by no later than ninety (90) days after Substantial Completion of the Work required in connection with the last System at that Facility (such date, the “Guaranteed Final Completion Date” for each Facility).

8.2.6 Late Final Completion Payments. If Final Completion of the Work required in connection with a Facility does not occur on or before the Guaranteed Final Completion Date for such Facility, then subject only to adjustment of the Final Completion Date by Change Order pursuant to Article 19 of this Agreement, Contractor hereby agrees to pay to Owner, $10,000 per calendar day for each calendar day after such Guaranteed Final Completion Date until Final Completion of all Work required in connection with such Facility is achieved (“Late Final Completion Payments”).

8.2.6.1 Amounts Reasonable and Exclusive Remedy for Delay. The Parties agree that the terms, conditions and amounts fixed as liquidated damages pursuant to Section 8.2.6 for Late Final Completion Payments are reasonable, considering the actual losses that Owner will incur if Contractor fails to achieve Final Completion for a System by the Guaranteed Final Completion Date for such System. The amounts of these liquidated damages are agreed upon and fixed hereunder by the Parties because of the difficulty of ascertaining the exact amount of losses that Owner will actually incur in such event, and the Parties agree that such amounts are a reasonable estimate of Owner’s probable loss (and are not a penalty) and that such amounts will be applicable regardless of the actual losses incurred by Owner. The Parties agree that the Late Provisional Acceptance Payments, Excessive Outage Payments, and Late Final Completion Payments are the sole and exclusive monetary remedy of Owner for damages it incurs due to delay in completing outages or achieving Provisional Acceptance or Final Completion; notwithstanding anything herein to the contrary, Owner reserves all of its rights and remedies under Section 6.10, Article 7, Article 14, Article 23 and Article 28.

8.2.6.2 Payment of Late Final Completion Payments. Owner will invoice Contractor for any Late Final Completion Payments due under Section 8.2.6 on a weekly basis, and Contractor will pay be assessed the undisputed portion of each such invoice in full within thirty (30)

calendar days of its receipt. If, subject to Section 11.3, an undisputed amount remains unpaid for more than five (5) days after receipt of notice from Owner that the amount is overdue, Owner may deduct any amounts due as Late Final Completion Payments from any unpaid amounts owed by Owner to Contractor.

8.2.7 Full Program Completion. Once the Contractor has successfully achieved Final Completion of all of its Work at all of the Project Sites, then it will deliver a notice of completion of the Project (the “Notice of Project Completion”) to the Owner for verification. Owner shall, within ten (10) days of receipt of this notice, either approve or validate the notice or provide a specific list of the area or areas in which it believes there are remaining Punch List items to be completed that have not been bought-down by mutual agreement pursuant to Section 17.5. Existence of any Punch List items that have not been bought-down at a Facility shall be grounds for rejection of the “Notice of Project Completion.”

8.2.8 Reduction of Liquidated Damages Based on Delayed Permitting. Should issuance of a permit that is listed in Exhibit 4 as the responsibility of Contractor be delayed beyond the scheduled date indicated in Exhibit 15 for issuance of such permit, Contractor shall promptly prepare for Owner’s review a revised schedule accelerating such work activities as are reasonably necessary to address the impact of such delay so that the immovable milestones may be completed in accordance with Section 8.1.6. After review and discussion of the Contractor’s proposed revised schedule on an Open Book basis, Owner shall enter a Change Order adjusting the Target Cost in accordance with Section 19.14 so as to equitably compensate Contractor for any additional Direct Costs that are Directly Caused by such acceleration. Should Owner fail to issue such a Change Order then, to the extent that such failure is the Direct Cause of a delay in (i) achieving Provisional Acceptance pursuant to Section 8.2.2, (ii) achieving Substantial Completion pursuant to Section 8.2.4 or (ii) achieving Final Completion pursuant to Section 8.2.5:

8.2.8.1 the liquidated damages applicable to the days of delay Directly Caused by the failure of Owner to issue a reasonable Change Order in accordance with Section 19.14 shall be calculated using one-half (50%) of the daily rate that would otherwise be applicable under Sections 8.2.3.1, 8.2.3.2, 8.2.3.4, 8.2.4.1 and 8.2.6; and

8.2.8.2 the total amount of liquidated damages payable by Contractor for delay Directly Caused by failure of Owner to issue a reasonable Change Order pursuant to Section 19.14 shall not exceed the following:

8.2.8.2.1 Five Million Two Hundred and Fifty Thousand Dollars ($5,250,000) for all Systems at Morgantown;

8.2.8.2.2 Three Million Eight Hundred and Fifty Thousand Dollars ($3,850,000) for all Systems at Chalk Point; and

8.2.8.2.3 Two Million One Hundred Thousand Dollars ($2,100,000) for all Systems at Xxxxxxxxx.

8.3 Schedules. Sections 8.3.1 through 8.3.4 apply to the Approved Project Schedule:

8.3.1 Schedule Software. The schedule has been developed utilizing “Project Planner” project management system software by Primavera. Contractor shall submit subsequent monthly updates, in both hard copy and diskette format at the lowest level of detail.

8.3.2 Activity Coding. The schedule has been developed using a detailed “work breakdown structure” (“WBS”) for activity coding.

8.3.3 Xxxxx 0 Detail. The subsequent monthly updates of the Approved Project Schedule shall contain a level of detail consistent with a Level 3 schedule. The subsequent updates of the Approved Project Schedule for each Facility will contain at minimum a specific activity for each group of similar engineering deliverables, material procurement activity, group of similar site deliverables, and work that interfaces with others. The subsequent updates shall also contain specific construction activities for the Work, consistent with the detail afforded by the work breakdown structure.

8.3.4 Schedule Updates. On a monthly basis, Contractor shall submit to Owner on the tenth (10th) day of each calendar month an update of the Approved Project Schedule. This submittal shall be by an electronic transfer method approved by Owner. The updated schedule shall identify any changes in Contractor’s scheduling logic and shall show the status of all activities relative to:

Completion dates

Estimate man-hours

Actual man-hours

Percent complete

Estimated quantities

Actual quantities

8.4 Work Operations. Contractor shall provide Owner, in a timely and convenient fashion, all information regarding Work operations, sequence of Work including work of Subcontractors, breakdown of the Work into individual activities with estimated durations, logical relationships in the schedule for the Work, and descriptions of critical path and non-critical path activities, and monthly schedule updates as required.

8.5 Recovery Schedule. If, in the reasonable opinion of Owner after considering Contractor’s monthly Progress Report and the facts and information known to Owner, Contractor’s Work on critical path activities should fall behind the Approved Project Schedule by greater than one week, the parties will meet to discuss appropriate remedial actions. Based on these discussions, Contractor shall, at Owner’s reasonable request, develop a recovery schedule for review and acceptance by Owner. In order to achieve the recovery schedule, Contractor agrees to take some or all of the following actions: increase manpower, increase Project Work periods, and/or increase concurrency in such quantities and crafts as shall substantially eliminate the backlog of Work. The additional costs of such action shall be treated as Allocable Costs under Section 11.5. This recovery schedule, once approved by Owner, shall be incorporated into the Approved Project Schedule and maintained until the interim schedule milestones in question are accomplished.

8.6 Critical Schedule Situation. If, in the reasonable opinion of Owner after consideration of Contractor’s monthly Progress Report and the facts and information known to it, Contractor’s Work on the critical path activities necessary for Provisional Acceptance of a System fall behind the Approved Project Schedule by greater than one week, and should the Guaranteed Provisional Acceptance Date for such System be less than nine (9) months away (a “Critical Schedule Situation”), then the parties will immediately meet to discuss appropriate remedial actions. Based on these discussions, Contractor shall develop a recovery schedule for review and acceptance by Owner. In order to achieve the recovery schedule, Contractor agrees to take some or all of the following actions: increase manpower, increase Work periods, and/or increase concurrency in such quantities and crafts as shall substantially eliminate the backlog of Work. This recovery schedule, once approved by Owner, shall be incorporated into the Approved Project Schedule and maintained until the delay is eliminated.

8.7 Contractor Responsible for Schedule. Owner’s review and approval of schedules specified within the Contract Documents shall not relieve Contractor of its responsibility for accomplishing the Work according to the Contract Documents. Omissions and errors in the Approved Project Schedule shall not excuse performance less than that required by the Contract Documents. Owner’s approval of Contractor certified and submitted schedules in no way makes Owner an insurer of the success of those schedules or liable for time or cost overruns resulting from shortcomings in such schedules.

9. KEY PERSONNEL REQUIREMENTS

9.1 Personnel Resources.

9.1.1 Key Personnel. The Parties will designate a certain number of Contractor employees as “Key Personnel”. Exhibit 7 identifies individuals designated as Key Personnel as of the Effective Date and a Project organization chart. In addition, any personnel identified on Exhibit 7 shall be considered Key Personnel, regardless of any statement set forth in this Agreement. The Key

Personnel will be highly qualified and capable of fulfilling the responsibilities of their positions, and Contractor will cause each of them to be primarily Dedicated to the Project. The Parties may agree to change the Contractor personnel and/or positions designated as Key Personnel. Contractor shall guarantee that Key Personnel shall be dedicated, devoted and assigned to Work applicable to such personnel’s discipline at each such person’s assigned Facility for as long as and for the duration that their discipline is needed to complete the Work (“Dedicated”).

Contractor acknowledges that the presence of certain Key Personnel at the Facilities is critical to the Project and agrees to make any requested Key Personnel available at the Facilities upon Owner’s reasonable request. Such request will be provided to Contractor at least thirty (30) days before the presence of Key Personnel is required, or, in the case of specialists to be identified by agreement of the Parties, fourteen (14) days; provided that where less than the required notice is provided, Contractor shall use reasonable efforts to make such Key Personnel available.

9.1.2 Departure of Key Personnel. Contractor shall be deemed in default of this Agreement if Contractor breaches Section 9.1.1, except (i) where a Key Personnel leaves his or her employment for reasons that are beyond the reasonable control of Contractor (e.g., retirement, resignation, death, disability, illegal or wrongful activity, etc), (ii) where a change in the person identified as a Key Personnel is agreed to by Owner in accordance with Section 9.1.4, or (iii) where a person identified as a Key Personnel is transferred due to demonstrable personal hardship of the Key Personnel.

9.1.3 Assignment of Key Personnel. Before assigning an individual as a Key Personnel, Contractor will (i) notify Owner of the proposed assignment, (ii) introduce the individual to the Owner’s Authorized Representative (and provide such representative with the opportunity to interview the individual), and (iii) provide Owner with a résumé and other information requested by Owner about the individual. If Owner objects to the proposed assignment for any reason that is not unlawful, Contractor will not assign the individual as a Key Personnel and will promptly propose to Owner another highly qualified individual to serve in such position.

9.1.4 Replacement of Key Personnel. Key Personnel may not be transferred or re-assigned until a suitable replacement has been approved by Owner. Any replacement of Key Personnel, whether requested by Owner or Contractor, must be conducted in accordance with a mutually agreed upon transition plan in accordance with Section 9.2. If any Key Personnel leaves his or her employment with Contractor for reasons that are beyond the reasonable control of Contractor, Contractor may temporarily replace such person, for a period not to exceed sixty (60) days, with a Qualified Person without Owner’s approval until a permanent replacement has been identified to and approved by Owner. For purposes of this Section, a “Qualified Person” shall mean a person of equal or greater education and experience, or as otherwise approved by

Owner. Owner’s approval of replacements for Key Personnel will not be unreasonably withheld or delayed. The Parties agree that promotion will be acceptable grounds for replacing Key Personnel provided that Contractor first identifies a replacement and such replacement is pre-approved by Owner.

9.1.5 Key Personnel of Subcontractors. Owner’s ultimate right to replace an employee of Contractor includes employees of its Subcontractors. Owner shall have the right to instruct Contractor to remove any of its employees or its Subcontractors’ employees from the Project Site or the Work if Owner determines in its reasonable discretion and for reasons that are not unlawful that the continued assignment to the Project of such personnel is not in the best interest of Owner. Owner’s Authorized Representative may request by notice that Contractor remove and replace any such person with another qualified individual. After receipt of such notice, Contractor will remove, or require that its Subcontractor remove such person from the Project and replace such person with personnel possessing qualifications and skills appropriate to the position.

9.1.5.1 For Key Personnel, in a safety or emergency situation, such personnel shall be removed immediately, and replaced as soon as practicable. In all other instances, Key Personnel shall be removed and replaced within 30 calendar days of Owner’s notice.

9.1.5.2 For non-Key Personnel, in a safety or emergency situation, such personnel shall be removed immediately, and replaced as soon as practicable. In all other instances, non-Key Personnel shall be removed and replaced within 30 calendar days of Owner’s notice.

9.2 Contractor Personnel Transition Plan.

9.2.1 Notice of Departure of Key Personnel. Contractor will notify Owner promptly upon determining that any Key Personnel will no longer be serving in such person’s position. Where practicable, notice will be delivered to Owner at least thirty (30) Business Days prior to the date on which such person will cease to serve in such role.

9.2.2 Mutual Agreement. In addition to providing notice to Owner pursuant to Section 9.2.1, Contractor will cause Key Personnel not to be removed or re-assigned from their positions and to continue to perform the Work until the Parties reach mutual agreement regarding a transition plan, unless (i) otherwise requested by Owner or (ii) the continued performance of any such person in such role is impossible due to illness, disability, death or termination of employment. The Parties will promptly begin to negotiate in good faith the terms of the transition plan for the departing personnel immediately following Contractor’s delivery of notice pursuant to Section 9.2.1. Each transition plan will be

developed by the Parties on a case-by-case basis for any departing personnel and will be mutually agreed upon in writing by the Parties. All transition plans will include at least the following: (i) technical requirements (if not already defined), (ii) a timetable for integration of the replacement personnel into the Key Personnel position, and (iii) replacement methodology designed to minimize the loss of knowledge as a result of losing the previous Key Personnel.

9.3 Independent Contractor: Employees. Neither Contractor nor Contractor’s employees are or shall be deemed to be employees of Owner. Contractor shall be solely responsible for the payment of compensation (including provision for employment taxes, federal, state and local income taxes, workers compensation and any similar taxes) associated with the employment of Contractor’s employees. Contractor shall also be solely responsible for obtaining and maintaining all requisite work permits, visas, and any other documentation required under Applicable Law and Applicable Permits for its employees and shall require that all Subcontractors do the same for their employees. Contractor represents that Contractor, its employees, and those Subcontractors authorized by Owner under this Agreement, are authorized to perform services under this Agreement.

9.4 Applicable Time Period. The provisions set forth in this Article 9 shall be applicable and binding upon Contractor from the date of issuance of the LNTP through and up to the date of Final Completion.

10. TARGET COST

10.1 Facility Target Cost. The Target Cost of the Work associated with each Facility is as follows:

Morgantown – $402,621,000.00

Xxxxxxxxx – $269,329,000.00

Chalk Point – $285,224,000.00

as such Target Cost may be adjusted from time to time pursuant to a Change Order.

10.2 Calculation of Contractor’s Actual Cost.

10.2.1 Categories of Costs. The Actual Cost for Work performed on a System is the sum of the costs for Actual Home Office Labor Costs, Actual Field Non-Manual Labor Costs, Actual Self-Performed Field Manual Services Costs, and Actual Third Party Expenses as described in Sections 10.2.2 through 10.2.5 incurred before the date of the first occurrence of an Initial Performance Test that does not satisfy the applicable Performance Guarantees, plus any such actual costs incurred to perform the Initial Performance Test and to complete the Punch List, but excluding any liquidated damages under Section 8.2.

10.2.2 Actual Home Office Labor Costs. The actual costs for home office labor including labor employed at the Contractor’s home office and at any other location away from a Site (“Actual Home Office Labor Costs”) shall be calculated by multiplying the number of hours spent on tasks necessary for proper performance of the Work by such persons times the labor rates set forth in Exhibit 8D. Such rates are fully burdened including xxxx-up for SG&A and will not be modified except by Change Order in accordance with Section 19.11 for escalation on January 1 of each year, of five percent (5%) per annum as provided in Exhibit 8D. The reasonable actual cost of travel of persons classified as home office labor shall be allowed only as provided in accordance with Contractor’s travel and expense reimbursement policy in effect on the Effective Date, subject only to non-material annual adjustments such as adjustment of the rate of reimbursement for mileage to match changes in the mileage allowance contained in the Internal Revenue Code.

10.2.3 Actual Field Non-Manual Labor Costs. The actual costs for field non-manual labor including Contractor’s supervisory or management personnel located on a Site (“Actual Field Non-Manual Labor Costs”) shall be calculated by multiplying the number of hours spent on tasks necessary for proper performance of the Work by such persons times the labor rates set forth in Exhibit 8D. Such rates are fully burdened including xxxx-up for SG&A and will not be modified except by Change Order in accordance with Section 19.11 for escalation on January 1 of each year, of five percent (5%) per annum as provided in Exhibit 8D. The reasonable actual cost of travel of persons classified as field non-manual labor shall be allowed only as provided in accordance with Contractor’s travel and expense reimbursement policy in effect on the Effective Date, subject only to non-material annual adjustments such as adjustment of the rate of reimbursement for mileage to match changes in the mileage allowance contained in the Internal Revenue Code.

10.2.4 Actual Self-Performed Field Manual Services Costs. The actual costs for employees the Contractor has hired to perform construction related tasks at a Site (“Actual Self-Performed Field Manual Services Costs”) shall be calculated by multiplying the number of hours spent on tasks necessary for proper performance of the Work by such persons times the hourly costs for such persons as set forth in certified payrolls and any other evidence as provided by Contractor. The hourly rates stated in Exhibit 8B shall be subject to increase or decrease semi-annually by Change Order pursuant to the process provided in Section 19.10 below. The rates shall be burdened only with the following categories of additional labor-related costs applicable thereto, which shall be adjusted by Change Order pursuant to Section 19.2 in the event of a change in the benefits, safety incentive or per diem paid by Contractor to its employees working on the Project or a change in premiums paid for WC/GL insurance, or by Change Order pursuant to Section 19.9 for a Change in Applicable Law:

Benefits = 5% (initial)

Federal Unemployment Insurance = 0.8% (initial)

State Unemployment Insurance = 2.3% (initial)

FICA/HI = 7.65% (initial)

WC/GL = 5% (initial)

Safety Incentive = $0.5/hour (initial)

Per Diem = $7/hour (initial)

SG&A = 8.5%

The percentage xxxx-ups for Benefits, FUI, SUI, FICA/HI, and WC/GL shall be applied only to the base published craft labor rate, and shall not be applied to the Safety Incentives or Per Diem. The SG&A shall be applied to the fully-burdened rates including the base craft labor rate, Benefits, FUI, SUI, FICA/HI, WC/GL, Safety Incentive and Per Diem. The percentage xxxx-ups for FUI, SUI, FICA/HI and WC/GL shall be charged only on the portion of wages and other compensation that is actually subject to tax, withholding or deduction under FUI, SUI, FICA/HI and WC/GL, and shall not apply to any amount of wages or other compensation that exceeds the applicable caps or limitations on wages or other compensation, as provided by relevant statute, regulation or contract.

10.2.5 Actual Third Party Expenses: Unless expressly waived by Owner in writing, all Subcontractors will be selected by Contractor based on a competitive sourcing process demonstrating best value, including subcontractors that are on the approved subcontractor lists included in Exhibit 1, as further supplemented by agreement of the Parties (the “Approved Subcontractor List”). “Actual Third Party Expenses” shall include only payments made by Contractor to Subcontractors or other third parties that are necessary for proper performance of the Work and substantiated by paid invoices. Actual Third Party Expenses shall be marked-up by 8.5% to cover SG&A expenses. Actual Third Party Expenses shall be calculated net of discounts, rebates, insurance proceeds, or other payments or credits of any kind received by Contractor from a Subcontractor or other third party. Subject to the conditions and requirements of this Section 10.2.5, Actual Third Party Expenses may include, among other costs, costs incurred for Commodities, for equipment packages, for furnish & erect subcontracts and for subcontracted labor.

10.2.6 Selling, General and Administrative Expenses. All SG&A costs are included in the rates used for calculating Actual Home Office Labor Costs and Actual Field Non-Manual Labor Costs as set forth in Exhibit 8D, the calculation of Actual Self-Performed Field Manual Services Costs set forth in Section 10.2.4, and the calculation of Actual Third Party Expenses set forth in Section 10.2.5.

These percentage xxxx-ups will be Contractor’s sole source of recovery or compensation for SG&A costs.

10.2.7 Separate Accounts. Contractor shall keep separate accounts for Actual Costs, Performance Incentives and Guarantee Costs incurred at each Facility for Work performed under the Target Price method (Section 13.2), and shall make such accounts available for Owner’s inspection on an Open Book basis.

10.3 Cap on Contractor’s Total Engineering Hours. Subject to modification by Change Order pursuant to Article 19, Contractor’s total engineering hours to complete the Work, including hours before and after issuance of NTP, shall not exceed the following:

Morgantown = 275,000 hours

Chalk Point = 253,000 hours

Xxxxxxxxx = 242,000 hours

Any hours in excess of the capped amount shall be the Contractor’s sole expense and shall not be included in the Actual Costs.

11. PRICE

11.1 EPC Total Compensation. “EPC Total Compensation” is the sum of Project Compensation (Section 11.2) plus the Performance Incentives (Section 11.4.2), plus the Underrun Bonus (Section 11.6), plus the Guarantee Costs to be paid by Owner (Section 11.3).

11.2 Project Compensation. “Project Compensation” is calculated in accordance with Article 13.

11.3 Guarantee Costs.

11.3.1 Classification of Guarantee Costs. The “Guarantee Costs” for Work performed on a System is the sum of the costs for Actual Home Office Labor Costs, Actual Field Non-Manual Labor Costs, Actual Self-Performed Field Manual Services Costs, and Actual Third Party Expenses as described in Sections 10.2.2 through 10.2.5 incurred after the date of the first occurrence of an Initial Performance Test that does not satisfy the applicable Performance Guarantees, plus any liquidated damages under Section 8.2, but excluding such actual costs incurred to complete the Punch List. The following sections contain references to costs identified therein as Guarantee Costs:

6.2.3.2 (Permitting Documents)

6.5.4 (Testing)

7.1 (Input Guarantees for FGD Systems)

7.2 (Output Guarantees for FGD Systems)

7.3 (Operational Guarantees for FGD Systems)

7.7 (Performance Testing)

7.8 (Concurrent Obligations)

8.2 (Schedule Guarantee)

8.2.1.2.2 (Bonus for Early Completion)

14.1.4 (Repair of Defects)

14.1.5 (Parts and Labor Warranty Period Extension)

28.1 (Property Damage)

11.3.2 Treatment of Guarantee Costs.

11.3.2.1 Blank.

11.3.2.2 Contractor shall keep a separate accounting on an Open Book basis of all Guarantee Costs as they are incurred, and shall include a breakdown and cumulative total of Guarantee Costs in each Progress Report. Guarantee Costs that are identified below as Owner’s payment responsibility shall be included in the calculation of EPC Total Compensation payable by Owner. Guarantee Costs that are identified below as Contractor’s sole responsibility shall not be included in the calculation of EPC Total Compensation payable by Owner. The final responsibility for Guarantee Costs shall be determined as follows:

11.3.2.2.1 If Actual Cost is less than the Target Price, and Guarantee Cost is less than the difference between Target Price and Actual Cost, then Owner shall be responsible for paying Contractor for the Guarantee Costs.

11.3.2.2.2 If Actual Cost is less than the Target Price, and Guarantee Cost is greater than the difference between Target Price and Actual Cost, then Owner shall be responsible for paying the Guarantee Costs up to an amount equal to the difference between Target Price and Actual Cost. Contractor shall be solely responsible, and Owner shall not pay Contractor, for Guarantee Cost in excess of such difference up to the limits of liability as set forth in Article 21. Owner shall be responsible for paying the Guarantee Cost beyond the limits of liability set forth in Article 21.

11.3.2.2.3 If Actual Cost is greater than the Target Price, then Contractor shall be responsible, and Owner shall not pay, for Guarantee Cost up to the limits of liability set forth in Article 21. Owner shall be responsible for paying Guarantee Cost beyond the limits of liability set forth in Article 21.

11.4 Incentives

11.4.1 Blank

11.4.2 Performance Incentives. The following incentives (the “Performance Incentives”) can be earned by Contractor based on its performance:

11.4.2.1 Early Completion of Work During Planned Outages. If an outage is planned exclusively for Contractor, and the Contractor completes its Work during the outage early so that the outage duration is reduced and Owner is able to benefit from this early completion, Owner shall pay Contractor the following incentive:

Morgantown = $35,000 per Unit per day

Chalk Point = $25,000 per Unit per day

Xxxxxxxxx = $15,000 per Unit per day

11.4.2.1.1 For the purpose of calculation of the above incentive, the outage start shall be 07:00 on the start date and the outage end shall be 23:59 on the end date. Each day of early completion shall be calculated from the end date and time. The following examples illustrate the implementation of this incentive and are for intended solely for clarification purposes:

1. If an outage at Morgantown was to be completed on August 31, 2009, and the outage is complete on August 30, 2009, at 23:00 hours, Owner shall owe Contractor an incentive of $35,000.

2. If an outage at Morgantown was to be completed on August 31, 2009, and the outage is complete on August 30, 2009, at 08:00 hours, Owner shall owe Contractor an incentive of $35,000.

3. If the outage at Morgantown was to be completed on August 31, 2009, and the outage is complete on August 31, 2009, at 02:00 hours, Owner shall owe Contractor an incentive of $0.00.

11.4.2.1.2 The early completion payment for each System shall be paid at Substantial Completion for that System.

11.4.2.2 Safety, Schedule and Quality Incentive.

11.4.2.2.1 During the progress of the Work, the following performance parameters shall be measured:

11.4.2.2.1.1 Safety, on a Per-Facility basis. This incentive includes incentives based on Contractor’s safety record each calendar quarter, and also its safety record for each Facility. The incentive for Contractor’s safety record during a calendar quarter shall be paid if Contractor has met the criteria set forth in the table below. This incentive shall be assessed for safety and spills specified for once each Calendar Quarter in the Approved Final Milestone Payment Schedule. Such incentive shall be payable as part of the first payment after the end of the Calendar Quarter. If there is any incentive that is assessed prior to NTP due to the Contractor, such incentive amount shall be paid with the first safety incentive payment after NTP.

If Contractor does not meet the standard in some of the specified quarters, however meets the standard for the Facility as a whole, the unpaid safety incentive shall be considered earned at Substantial Completion of the last System of the Facility.

Metric	Quarterly Target	Facility Target	Applicable Incentive
Recordables/Record-able Incident Rate	≤ 2 per qtr.	1.55	0.2%
Lost Time Incidents/Lost time Incident Rate	0	0.35	0.25%
Fatality(ies)	0	≤ 1	Keep the Fee
Spills	0	≤ 3	0.05%

11.4.2.2.1.2 Quality, including (i) number of defects in drawings and documents (defects shall be measured in terms of Owner’s written comments or instructions agreed to by the Parties that are not implemented); and (ii) number of defects during supply and installation (defects in materials, non-compliance with drawings and specifications not addressed) that have not been corrected. The report card for the framework that reflects the evaluation of this performance will be mutually agreed to by the Parties.

11.4.2.2.1.3 Schedule, including completion of Milestones with zero delay. This incentive shall be payable if no delay occurs. Incentives not earned in specific Milestones shall not be earned at the end of the Project even though the overall Project was within schedule.

11.4.2.2.2 The following percentages shall be applied to the Milestone Progress Payment as an incentive for Contractor to meet the performance parameters identified in Section 11.4.2.2.1 above:

Safety = 0.5% of each milestone

Quality = 0.25% of each milestone

Schedule = 0.25% of each milestone

11.4.2.2.3 The schedule incentive shall be paid with specific Milestones identified in the Approved Final Milestone Payment Schedule. Accordingly, Contractor shall include a request for this payment as a separate line item in the request for payment of the applicable Milestone Progress Payment. The quality incentives shall be paid at Substantial Completion of the System.

11.5 Allocable Costs.

11.5.1 Sections Addressing Allocable Costs. Certain costs incurred by Contractor in performance of the Work (“Allocable Costs”) are treated as indicated in Section 11.5.2. The following Sections contain references to costs that are identified therein as Allocable Costs:

6.3.1.2 (Risk of Loss)

6.5.4 (Testing)

6.5.8 (Clean Up and Waste Removal)

6.5.10 (Quality Assurance/Quality Control)

6.8 (Safety)

6.10.2 (Inspection and Re-Performance)

8.5 (Recovery Schedule)

8.6 (Critical Schedule Situation)

12.10.3.2 (Xxxx Xxxxx)

17.5 (Creation of Punch List)

11.5.2 Treatment of Allocable Costs.

Allocable Costs shall be included in the appropriate category of Actual Home Office Labor Costs, Actual Field Non-Manual Labor Costs, Actual Self-Performed Field Manual Services Costs or Actual Third Party Expenses.

11.6 Underrun Bonus.

11.6.1 Should the sum of the Actual Costs plus Guarantee Costs be less than the Target Cost plus Contingency, when Substantial Completion is achieved by Contractor, then Contactor shall be paid an “Underrun Bonus”. If payable, the amount of such Underrun Bonus shall equal one-half of the difference between (i) the Target Cost plus Contingency and (ii) the sum of the Actual Cost plus the Guarantee Cost. The amount of the Underrun Bonus shall not exceed $65MM.

12. PAYMENT TERMS

12.1 Payments Generally.

12.1.1 Owner shall pay Contractor the EPC Total Compensation in accordance with this Agreement and shall make all payments if and when due under this Agreement. Wherever Owner’s consent or approval is required, such consent or approval shall not be unreasonably delayed or withheld.

12.1.2 Owner shall make milestone-based payments in accordance with Section 12.2 through 12.3, Guarantee Payments in accordance with Section 12.13 and Final Payment in accordance with Section 12.11.

12.1.3 The Milestone Progress Payment payable at the NTP Milestone shall be equal to: (a) Sixty Million Dollars ($60,000,000) (the “NTP Milestone Payment”), plus (b) ten percent (10%) of the sum of (the Target Cost plus the Target Fee of five percent (5%) applicable to the Target Cost), less (c) the amounts invoiced by Contractor for the Work for the Facility to July 20, 2007. The amounts invoiced but not yet received by Contractor to July 20, 2007 shall be promptly paid by Owner no later than thirty (30) days from receipt of the original invoices by Owner, without the need for further invoicing by Contractor. The NTP Milestone Payment shall be accounted for pursuant to section 12.3.12, and in any reconciliation of the balance of the amount of the Milestone Progress Payment made at NTP, the Target Fee of five percent (5%) of the amounts invoiced by Contractor for the Work to July 20, 2007 shall be excluded from such reconciliation.

12.2 Milestone Progress Payments

12.2.1 A schedule (the “Approved Final Milestone Payment Schedule”) showing the dollar amount associated with each Milestone (the “Incremental Payment Amounts”), and the Calendar Quarter in which the Milestone is scheduled to be completed, is included in Exhibit 9. Exhibit 9 also includes a curve (the “Cash Curve”) based on an original schedule of the cumulative value of Incremental Payment Amounts for Milestones scheduled for completion in each Calendar Quarter. So long as the cumulative total to date of actual Milestone Progress Payments does not exceed the Cash Curve (as is adjusted from time to time by the same Change Order adjustments to the Target Cost and Fee), Contractor is entitled to payment for any completed Milestones irrespective of the number of Milestones or sequence. Notwithstanding, if the Parties mutually agree that, in certain circumstances, it is in the best interest of the Project to allow for increased expenditures, then Owner shall allow for exceeding the Cash Curve or shall otherwise adjust the Cash Curve to a higher level to allow the desired expenditures.

12.2.2 The Approved Final Milestone Payment Schedule shall be used as the basis for preparation of requests for payment, and payment, of progress payments (“Milestone Progress Payments”) to Contractor. Milestone Progress Payments shall be made in accordance with the Milestones achieved under the

Approved Final Milestone Payment Schedule. Upon achievement of a Milestone, Contractor shall submit to Owner for its approval a request for payment for (i) the corresponding Incremental Payment Amount, (ii) the Target Fee associated with this payment that equals Five Percent (5%) of this payment and (iii) any Applicable Safety , Schedule and Quality Incentives as set forth in Article 11.4.2.2 . Each request for payment shall identify in detail the amounts to which Contractor considers it is entitled under this Agreement for the applicable Milestone. As a minimum, each request for payment shall identify the following:

12.2.2.1 the Milestone to which the request for payment relates and the corresponding Incremental Payment Amount for that Milestone;

12.2.2.2 any amount which Owner is entitled to deduct set off or withhold from Contractor;

12.2.2.3 each request for payment shall contain the tax identification number of both Owner and Contractor and all such other information as may be required from time to time under applicable tax laws; and

12.2.2.4 the total amount which Contractor claims under that request for payment.

12.2.3 Contractor can request a partial payment for a Scheduled Milestone where the Work included in that Milestone may not be fully completed, provided Contractor shall submit with its request for payment sufficient documentation satisfactory to Owner to substantiate the cost of the associated Work completed. Each request for partial payment shall identify in detail the amounts to which Contractor considers it is entitled under this Agreement as of the date the applicable Milestone is partially completed. Contractor shall submit to Owner for its approval a request for payment for (i) the corresponding partial payment amount, (ii) the Target Fee associated with this payment that equals Five Percent (5%) of this payment and (iii) any Applicable Safety , Schedule and Quality Incentives as set forth in Article 11.4.2.2. As a minimum, each request for payment shall identify the following:

12.2.3.1 the Milestone to which the request for payment relates and the corresponding Incremental Payment Amount for that Milestone;

12.2.3.2 any amount which Owner is entitled to deduct set off or withhold from Contractor;

12.2.3.3 each request for payment shall contain the tax identification number of both Owner and Contractor and all

such other information as may be required from time to time under applicable tax laws; and

12.2.3.4 the total amount which Contractor claims under that request for payment.

12.2.3.5 the calculations that support the percentage of milestone payment that is being requested.

12.2.4 Any request for payment which is not accompanied by all of the information identified in Section 12.2.2 and 12.2.3 shall not constitute a valid and proper request for payment.

12.2.5 In addition, each request for payment shall include documentary evidence of achieving the corresponding Milestone. Owner shall not be obligated to make payment of amounts in the current month that would cause the cumulative total to date of Milestone Progress Payments to exceed the Cash Curve for the current month, but Owner shall pay such amounts promptly with the next request for payment from Contractor.

12.2.6 Owner shall review each such request for payment and may make such exceptions in accordance with this Agreement within fifteen (15) calendar days of receipt of same. Payment of amounts due and payable shall be made by Owner within fifteen (15) calendar days after the foregoing fifteen-day review period has expired. Unless Owner within the fifteen-day review period confirms that a request for payment does not include all information and documentation required by this Section 12.2, or that the Work included in the relevant Milestone has not been completed properly, then Owner shall make payment to Contractor as provided in this Article 12. If Owner discovers an error in Contractor’s request for payment, Owner shall immediately notify Contractor thereof and upon receipt of a correct request for payment by Contractor shall immediately pay such invoice in accordance with the Agreement.

12.2.7 The payment of any Milestone Progress Payment by Owner shall not constitute approval or acceptance by Owner of the Work, any part thereof or of any item of cost in the corresponding request for payment.

12.3 Quarterly Reconciliation.

12.3.1 Each January, April, July, and October, Owner and Contractor shall work together in good faith to complete, for the immediately preceding Calendar Quarter, the reconciliation activities described in Sections 12.3.2 through 12.3.12.

12.3.2 A “Scheduled Milestone” is a Milestone which, according to the Approved Final Milestone Schedule as modified in accordance with Section 12.1.1.1.4, was scheduled to be completed during the Calendar Quarter being

reconciled or which was re-sequenced by Contractor from prior or subsequent Calendar Quarters to occur in the current Calendar Quarter.

12.3.3 An “Incomplete Milestone” is a Scheduled Milestone that was not completed during the Calendar Quarter being reconciled.

12.3.4 The “Quarterly Reconciliation Ratio” is expressed as a percentage, and is the quotient of (i) the sum of the Incremental Payment Amounts for Scheduled Milestones that were actually completed during the Calendar Quarter, divided by (ii) the total of the Incremental Payment Amounts for all of the Scheduled Milestones for that Calendar Quarter.

12.3.5 The “Quarterly Actual Cost” is the sum of the costs incurred by Contractor for its own personnel or paid by Contractor to third parties during the immediately preceding Calendar Quarter that are verified and documented by Contractor’s records for its own personnel or invoices paid by Contractor to third parties as evidenced by electronic payment receipts or other reliable means of verification and documentation, that are Actual Costs in accordance with Section 10.2. Any costs or expenses about which Contractor and Owner disagree as being Actual Costs shall not be included in the Quarterly Actual Cost for the purpose of the reconciliation and shall be deemed to be “Disputed Costs”. Any Disputed Costs shall be grounds for a Claim by either Party under Article 33. The quarterly reconciliation process shall be conducted solely for the purposes of determining the amount of interim progress payments, and not for the purpose of determining Project Compensation and EPC Total Compensation. Any agreement by Owner and Contractor concerning Quarterly Actual Cost, and any determination or agreement of the Parties regarding Disputed Cost, shall not be relevant or binding for the purpose of determining the Project Compensation and EPC Total Compensation.

12.3.6 The “Reconcilable Cost” is the sum of (i) the Quarterly Actual Cost for a Calendar Quarter multiplied by the Quarterly Reconciliation Ratio for that Calendar Quarter, plus (ii) any Carryover Cost allocated to a delayed Milestone that is completed during that Calendar Quarter.

12.3.7 The “Quarterly Milestone Payment Cost” is the sum of the Milestone Progress Payments made by Owner to Contractor during a Calendar Quarter, less any portion of the Target Fee and Safety, Quality and Schedule Incentive included in those payments.

12.3.8 The “Quarterly Benchmark Cost” is the sum of (i) the Quarterly Milestone Payment Cost, (ii) the Quarterly Contingency Allowance, and (iii) any Approved Contingency Draw Requests approved by Owner for that Calendar Quarter.

12.3.9 To perform the reconciliation, the Reconcilable Cost for the Calendar Quarter shall be compared to the Quarterly Milestone Payment Cost paid by Owner to Contractor for the immediately preceding Calendar Quarter and the Quarterly Benchmark Cost for that Calendar Quarter, as follows:

12.3.9.1 Should the Reconcilable Cost be less than the Quarterly Milestone Payment Cost then the difference shall be deemed an “Excess Payment.” Any Excess Payment shall be deducted from any amount otherwise due and payable by Owner to Contractor under the next payment request submitted by Contractor to Owner. Such amounts shall not be treated as Contingency and shall be available to Contractor in subsequent Calendar Quarters by the use of an internal change order without the need for a Contingency Draw Request. If no further payment requests are to be submitted by Contractor to Owner, then the Excess Payment shall be credited to Owner if due following final reconciliation as set forth in Section 12.11.2 and the calculation of the EPC Total Compensation and Target Final Payment pursuant to Section 12.11.2 and Article 13.

12.3.9.2 Should the Reconcilable Cost be greater than the Quarterly Milestone Payment Cost and less than the Quarterly Benchmark Cost, then the difference between the Quarterly Milestone Payment Cost and the Reconcilable Cost shall be deemed a “Payable Cost”. Contractor shall add the Payable Cost to its next payment request to Owner. If no further payment requests are to be submitted by Contractor to Owner, then Contractor shall submit a separate payment request for the Payable Cost and Owner shall make payment on such application in accordance with the provisions of this Agreement relating to requests for payment.

12.3.10 Should the Reconcilable Cost be greater than the Quarterly Benchmark Cost then:

12.3.10.1 Contractor shall submit a supplemental Contingency Draw Request to support the difference between the Reconcilable Cost and the Quarterly Benchmark Cost, which shall be subject to approval by Owner in accordance with Section 12.6.4; and.

12.3.10.2 the difference between the Quarterly Milestone Payment Cost and the Quarterly Benchmark Cost shall be a Payable Cost and shall be included in a subsequent payment request, and paid by Owner, as provided Section 12.3.9.2; and

12.3.11 A “Carryover Cost” is a cost that is excluded from reconciliation on account of one or more Incomplete Milestones. If there are no Incomplete Milestones during a Calendar Quarter, then the Reconciliation Ratio shall be one (1.0) and there shall be no Carryover Cost from that Calendar Quarter. If there are one or more Incomplete Milestones during a Calendar Quarter, then the Reconciliation Ratio is less than one (1.0) and the Carryover Cost from that Calendar Quarter shall be (i) the Quarterly Actual Cost multiplied by (ii) the difference between one (1.0) and the Quarterly Reconciliation Ratio. If there is one Incomplete Milestone during the Calendar Quarter, the Carryover Cost shall be assigned to that Incomplete Milestone. If there is more than one Incomplete Milestone during the Calendar Quarter, then the Carryover Cost shall allocated and assigned to the Incomplete Milestones in amounts proportional to the Incremental Payment Amounts associated with each such Incomplete Milestone. The Carryover Cost assigned to any Incomplete Milestone shall be added to the Payable Cost for the Calendar Quarter in which that Incomplete Milestone is completed.

12.3.12 The NTP Milestone payment referred to in Section 12.1.3 shall be excluded from the reconciliation described in Sections 12.3.2 through 12.3.11 for the Calendar Quarters beginning with the month the NTP is issued and ending with the month that is twelve (12) months after NTP. Beginning with the thirteenth (13th) month after NTP, the NTP Milestone payment referred to in Section 12.1.3 shall be added back to the Quarterly Actual Cost at the rate of twelve million dollars ($12 million) for each Calendar Quarter until the total of such NTP Milestone Payment amount is accounted for in the reconciliation process.

12.4 Blank

12.5 Payments not made in accordance with Sections 12.2.6, 12.3.12., 12.8, 12.11.2, 12.13 shall be subject to late payment interest at the prime rate reported in the Wall Street Journal on the date such payment is due and payable, plus 1%.

12.6 Contingency

12.6.1 The “Quarterly Contingency Allowance Limit” for each Calendar Quarter is One Million Five Hundred Thousand Dollars ($1,500,000.00). Contractor shall be allowed access and use of the Quarterly Contingency Allowance Limit without prior approval of the Owner. Any unused portion of the Quarterly Contingency Allowance Limit shall not be subject to carryover.

12.6.2 Contractor shall attempt to identify, as early as practicable, any events, causes, conditions, trends or occurrences that are likely to cause the Actual Costs during a Calendar Quarter to be greater than Contractor’s original estimate of the cost of the Work to be performed during that Calendar Quarter by an amount greater than the Quarterly Contingency Allowance. Without limiting Contractor’s rights and other obligations under the Agreement, including its rights

and obligations under Article 19, Contractor shall give notice to Owner, in the form of a written “Contingency Draw Request”, of all such events, causes, conditions or occurrences of which Contractor becomes aware . The Contingency Draw Request shall identify and describe (i) the anticipated or actual magnitude of the cost overrun, (ii) the events, circumstances, conditions or occurrences giving rise to the cost overrun, and (iii) the individual incurred or anticipated cost items involved.

12.6.3 When complete information is not readily available, Contractor shall issue a “Contingency Draw Notification” including such information as is reasonably available at the time. Contractor may convert a Contingency Draw Notification to a Contingency Draw Request by providing the information specified in Section 12.6.2. While such notification cannot form part of the quarterly reconciliation process, the notification will provide a basis for more expeditious consideration by Owner of a cost, when it is converted to a Contingency Draw Request.

12.6.4 Upon receipt by Owner of a Contingency Draw Request, Owner and Contractor will discuss any measures that Contractor has taken, and any additional steps that Contractor or Owner might take, to minimize or eliminate the potential cost overrun and any time limits or other practical limitations relating to such additional steps. Owner and Contractor shall make a good-faith effort to work collaboratively to determine what work-around steps or alternate measures may be appropriate. Owner may by written notice to Contractor, based on these discussions and collaborative efforts, approve a Contingency Draw Request in whole or in part. Any dispute with respect to Owner’s approval of Contingency Draw Request shall be subject to provisions of Article 33.5.

12.7 The quarterly reconciliation process shall be conducted solely for the purposes of assisting in the determination of the amount of interim progress payments, and not for the purpose of determining Project Compensation and EPC Total Compensation. Any use of the Quarterly Contingency Allowance, approval of a Contingency Draw Request, or determination or agreement of the Parties regarding Disputed Cost, shall not be relevant or binding for the purpose of the determining the amount of Project Compensation and EPC Total Compensation.

12.8 Retention. Owner shall retain from each payment made for each Milestone Progress Payment pursuant to Section 12.2.1, Payable Cost pursuant to Section 12.3.9.2, and Carryover Cost pursuant to 12.3.11 (when paid), ten percent (10%) of the amount due and payable to Contractor; provided, however, that no such retention shall be withheld from the amount of the Milestone Progress Payment made at the time of issuance of the NTP pursuant to section 12.1.3 nor from the payment of invoices outstanding to July 20, 2007. Upon Substantial Completion of each System, Owner shall remit to Contractor fifty percent (50%) of the amount retained with respect to such System. Owner shall remit the balance of the retention in the Final Payment.

12.9 A Change Order that increases or decreases the Cost Element and/or the Fee Element shall also increase or decrease the amount of each Milestone Progress Payment in the Approved Final Milestone Payment Schedule. The amount of the increase or decrease to each Milestone Progress Payment shall be calculated by multiplying the increase or decrease in the Contract Price stated in the Change Order times the Incremental Percentage for each such Milestone. In addition, the amount of a Milestone Progress Payment may be changed pursuant to Section 12.2.1 or by mutual agreement of the Parties in writing. Other than as provided in this Section 12.9, the Milestone Progress Payments contained in the Approved Final Milestone Payment Schedule shall not be increased or decreased.

12.10 Conditions of Payments; Withholdings, Set-Offs.

12.10.1 Material Breach. Notwithstanding Sections 12.1, 12.11, and 12.13, Owner may withhold payment to Contractor pursuant to Section 12.10.3 if Contractor is in material breach of its obligations under this Agreement.

12.10.2 Required Submittals. Notwithstanding Section 12.1.2, Owner will not be required to make any payment to Contractor until Contractor has provided the submittals described in Sections 12.2.2 and 12.2.3 and any other lien-waiver documentation as Owner may reasonably request and which is not inconsistent with standard practice in similar construction projects in the State of Maryland.

12.10.2.1 Progress Reports. In order for each request for payment to be valid, Contractor must have submitted to Owner all monthly Progress Reports required under Section 8.2.1.1. if due prior to the date of such request for payment.

12.10.2.2 Partial Lien Waivers. In order to be valid, each request for payment submitted by Contractor must be accompanied by partial lien waivers and releases in the form attached as Exhibit 16 executed by Contractor and all Subcontractors with whom Contractor has a direct contract or purchase order, and who submitted an invoice or application for payment to Contractor more than thirty (30) days prior to Contractor’s application for payment to Owner. In addition, and at Owner’s request, Contractor shall submit such lien waivers of any and all other Subcontractors who may have the right to pursue a mechanic’s or materialman’s lien under Applicable Law.

12.10.2.3 Full Lien Release In order to be valid, Contractor’s invoice for the final payment from Owner under this Agreement must be accompanied by full lien releases and waivers executed by Contractor and all Subcontractors which have provided equipment or materials or performed work at the Site in the prior 180 days.

12.10.2.4 Form of Waivers and Releases. The lien waivers and releases required from Contractor under this Section 12.10.2 must be in the form and substance as set forth in Exhibit 16.

12.10.2.5 Xxxx Xxxxx. Notwithstanding the other provisions of Section 12.10, Contractor may substitute lien discharge bonds sufficient under applicable law to remove any lien attaching to a Site, or other security reasonably acceptable to Owner in lieu of the lien waivers required hereunder.

12.10.3 Withholding to Protect Owner from Loss. Notwithstanding Sections 12.1 through 12.9, Owner may, without prejudice to any other rights Owner may have under this Agreement, withhold all or any portion of any payment to such extent as may be reasonably necessary to protect Owner from loss due to: (i) defective or incomplete Work by Contractor or any of its Subcontractors; (ii) claims filed by third parties arising out of Contractor’s performance of the Work for which Contractor has an indemnity obligation or other responsibility under the Agreement; (iii) failure of Contractor to make payments to Subcontractors (other than as a result of non-payment by Owner to Contractor); (iv) reasonable evidence that a System will not be completed by the Guaranteed Substantial Completion Date for such System and that the retention, Letter of Credit and unpaid balance would not be adequate to cover liquidated damages for the anticipated cumulative delay on all Systems; (v) damage to Owner caused by Contractor or its Subcontractors (provided, that if such damage is only partially caused by Contractor or its Subcontractors, Owner may only withhold a portion of such damage equal to the relative degree of fault of Contractor or its Subcontractors in causing such damage) for which Contractor has an indemnity obligation or other liability under this Agreement; (vi) liens filed against a System, Facility, Site or any other property of Owner by Subcontractors which Contractor fails to remove, discharge or bond over; or (vii) failure by Contractor to maintain the insurance required by this Agreement. Notwithstanding the foregoing, Contractor may substitute bonds or other reasonable security for specific items in question under Sections 12.10.3.2 or 12.10.3.3, subject to the agreement of Owner which will not be unreasonably withheld or delayed.

12.10.3.1 In addition, upon prior notice to Contractor, Owner may withhold or retain any Milestone Progress Payment, payment or part thereof in any of the following circumstances:

12.10.3.1.1 A Contractor Event of Default shall have occurred;

12.10.3.1.2 Any lien or charge has been created on the Facility, the Work or any portion thereof by Contractor or a Subcontractor based on Work for which Owner has made payment to the Contractor

pursuant to this Agreement, and such lien or charge has not been discharged; or

12.10.3.1.3 Owner has performed any part of the Work in lieu of Contractor.

12.10.3.2 Xxxx Xxxxx. Notwithstanding Section 12.10.3(vi) and 12.10.3.1.2, Owner will release any payments withheld due to any lien if Contractor obtains a lien discharge bond which is (i) issued by a surety reasonably acceptable by Owner, (ii) in form and substance satisfactory to Owner, and (iii) in an amount sufficient under applicable law to remove the lien from Owner’s property. By posting a lien discharge bond, however, Contractor will not be relieved of any obligations (including its indemnity obligations) under this Agreement. The premium for any such lien discharge bond shall be treated as an Allocable Cost pursuant to Section 11.5.

12.10.3.3 Payment after Removal of Cause. When Contractor has remedied the cause for withholding any payment and has furnished satisfactory evidence of such remediation to Owner, Owner will make the payment so withheld to Contractor within ten (10) calendar days following Owner’s receipt of such evidence. If Contractor, after receipt of notice from Owner, fails or refuses to remedy the cause for withholding such payment within the time specified in the notice, then Owner may, without prejudice to any other rights Owner may have under this Agreement, remedy it, but such action by Owner will not be or be considered to be a waiver of any default by Contractor under this Agreement.

12.10.4 Set Off. Owner may set off any sums payable by Contractor to Owner under this Agreement against any payments due to Contractor under this Agreement.

12.11 Final Payment for Target Work at Each Facility.

12.11.1 For Work performed at each Facility, Contractor shall check all materials, equipment and labor involved with or incorporated into the Work and shall keep on an Open Book basis (and require all Subcontractors performing work on a cost-plus basis to keep) full, detailed and accurate records and accounts thereof, showing the Actual Costs of all items of labor, materials, supplies, services and other expenditures of whatever nature for which payment or reimbursement is authorized or required under this Agreement, and the system of accounting shall be satisfactory to Owner. Contractor shall retain and preserve all such records for not less than three (3) years after Target Final Payment.

12.11.2. At the time that Contractor submits a Notice of Final Completion for Work performed under the Target pricing method (Section 13.2), Contractor shall submit to Owner on an Open Book basis a final accounting of all Actual Costs and Guarantee Costs incurred in performing such Work, in accordance with Section 10.2 and Section 11.3. Owner’s accountants will review Contractor’s accounting and may request such further information as is necessary for Owner to substantiate the accounting and to determine the amount of Actual Costs and Guarantee Costs incurred. Based on its review of Contractor’s accounting, Owner shall determine and pay, within thirty (30) days after the date of Final Completion of a Facility, the unpaid amount (excluding Guarantee Costs to be paid at a later date pursuant to Sections 12.13) of EPC Total Compensation for such Work (the “Target Final Payment”) and shall release all remaining retention amounts, less any amounts that may be due and payable by Contractor to Owner. Should Owner’s review of Contractor’s accounting show that a net amount is owed by Contractor to Owner, Contractor shall pay such amount to Owner within thirty (30) days of demand for such payment by Owner.

12.11.3 When application for Target Final Payment is submitted by the Contractor, the Contractor shall assure that the following documents or conditions have been previously completed, submitted and approved by Owner:

12.11.3.1 Final lien waiver documents in the form attached as Exhibit 16;

12.11.3.2 As-Built Drawings;

12.11.3.3 Operating manuals;

12.11.3.4 Warranty documents under this Agreement;

12.11.3.5 Back-charges and/or claims satisfied;

12.11.3.6 Quality and reliability requirements complete;

12.11.3.7 Nonconformance items complete or bought-down;

12.11.3.8 Spare parts list; and

12.11.3.9 Mill certifications.

12.12 Liens After Final Payment. Should there be any claim, obligation, or lien existing for Work for which Target Final Payment has been made, then Contractor shall refund to Owner all monies that Owner shall have paid or may be obligated to pay in satisfying, discharging, or defending against any such claim, obligation or lien or any action brought or adjustment recovered thereon, including all costs and expenses, including attorney’s fees and disbursements incurred in connection therewith.

12.13 Payment of Guarantee Costs. Guarantee Costs incurred by Contractor in connection with the FGD Systems and for which Owner is responsible for payment pursuant to Section 11.3.2 shall be paid to Contractor as follows:

12.13.1. Separate Accounting. Contractor shall keep a separate accounting of all Guarantee Costs incurred to satisfy Contractor’s obligations to correct the Work, to repair or replace affected parts or systems and to retest, due to failure to satisfy the Equivalent Availability Guarantee as set forth in Sections 7.2.1.3 and 7.2.2. To the extent that Owner is responsible pursuant to Section 11.3.2.2 for paying such Guarantee Costs, payment of same shall be made within thirty (30) days after the Equivalent Availability Guarantee is satisfied.

12.13.2. Prior to Target Final Payment. Guarantee Costs for which Owner is responsible for payment pursuant to Section 11.3.2.2, that are incurred prior to Target Final Payment and are not addressed under Section 12.13.1 shall be paid to Contractor in the Target Final Payment.

12.13.3. After Target Final Payment. In the event that Contractor incurs Guarantee Costs subsequent to Target Final Payment that are not addressed under Section 12.13.1, and all of Contractor’s responsibility for Guarantee Costs has been exhausted, then Contractor may submit monthly requests for payment to Owner for such Guarantee Costs, and Owner will make payment on such requests for payment in accordance with the accounting procedure set forth in Sections 12.11.1 and 12.11.2.

13. PRICING METHOD

13.1 Blank.

13.2. Target Price Method. The provisions of this Section 13.2 apply to the “Target” pricing method.

13.2.1. The “Contract Price” under this method is the sum of the following:

Target Cost

50% Contingency

Target Fee

13.2.2. The Project Compensation under this method is calculated as follows:

13.2.2.1 If

i. Actual Cost is less than or equal to the sum of the Target Price plus 50% Contingency and,

ii. Actual Cost is greater than Target Cost

then Project Compensation equals the sum of the following:

Actual Cost

Target Fee

Underrun Bonus

13.2.2.2 If Actual Cost is less than or equal to the Target Cost, then Project Compensation equals the sum of the following:

Actual Cost

Target Fee

Underrun Bonus

13.2.2.3 If

i. Actual Cost is less than or equal to the sum of Target Price plus Target Fee plus 50% Contingency, and

ii. Actual Cost is greater than the sum of Target Price plus 50% Contingency

then Project Compensation equals the sum of the following:

Target Price

50% Contingency

Target Fee

minus 50% of the difference between the following:

i. Actual Cost and

ii. the sum of the Target Price plus 50% Contingency.

13.2.2.4 If Actual Cost is greater than the sum of the following:

Target Price

50% Contingency

Target Fee

then Project Compensation equals the sum of the following:

Actual Cost

50% of Target Fee

14. WARRANTIES

14.1 Parts and Labor Warranties.

14.1.1 Warranties. Contractor warrants that for the duration of the Parts and Labor Warranty Period set forth below:

14.1.1.1 all Systems Equipment provided by Contractor or any Subcontractor and incorporated into any of the Systems will be (i) new and of good quality, (ii) free from defects in workmanship and materials, (iii) in accordance with the Contract Documents (iv) satisfy the requirements of Article 15 “Standards of Performance” and (v) in compliance with all Applicable Laws and Applicable Permits in effect on the date of Substantial Completion; and

14.1.1.2 all Work performed by Contractor or its Subcontractors will be performed (i) in accordance with the Contract Documents, (ii) in satisfaction of the requirements of Article 15 “Standards of Performance” (iii) in compliance with all Applicable Laws and Applicable Permits (all of Sections 14.1.1.1 and 14.1.1.2, the “Parts and Labor Warranties”).

14.1.2 Parts and Labor Warranty Period. Subject to Section 14.1.5, with respect to each System, the Parts and Labor Warranties will remain in full force and effect for defects appearing between Substantial Completion of the Work required for the System and the date that is twelve (12) months after Substantial Completion of the System; provided, however, that the Parts and Labor Warranties for Extended Warranty Equipment will remain in full force and effect for defects appearing between Substantial Completion of the Work required for the System and the date that is two (2) years after Substantial Completion of its associated System (the “Parts and Labor Warranty Period” for such System or Extended Warranty Equipment).

14.1.3 Conditions and Limitations of Warranty. The Parts and Labor Warranty is conditioned upon Owner’s operation and maintenance of the Systems in accordance with the operations manual provided by Contractor pursuant to Section 6.5.6 and in accordance with Prudent Utility Practices. Excluded from Contractor’s repair obligations under the Parts and Labor Warranty are repairs and replacements required as a result of (i) normal wear and tear of the System(s), (ii) damage due to deterioration or wear occasioned by abrasion, corrosion, erosion or chemical attack resulting from exposure to conditions not anticipated in the design basis set forth in Exhibit 1, and (iii) operation or maintenance not in accordance with the operation and maintenance manual provided by Contractor in accordance with Section 6.5.6.

14.1.4 Repair of Defects. Within a reasonable time after discovering that Contractor has failed to meet any of the Parts and Labor Warranties, Owner will notify Contractor thereof. Upon receipt of such notice, Contractor will promptly cure such failure to Owner’s reasonable satisfaction and in accordance with Prudent Utility Practices, Prudent Electrical Practices, Applicable Laws and Applicable Permits. The costs of cure shall be treated as a Guarantee Cost pursuant to Section 11.3. The expiration of the Parts and Labor Warranty Period is only applicable to the Parts and Labor Warranties and will have no effect on

any assigned Subcontractor warranties or guarantees that may be of longer duration.

14.1.5 Parts and Labor Warranty Period Extension.

14.1.5.1 Extension for Corrected Work. Any Work re-performed and any part of any System reworked, repaired or replaced in satisfaction of Contractor’s obligations in connection with the Parts and Labor Warranties will be re-warranted pursuant to the same Parts and Labor Warranties set forth in Section 14.1.1, and Contractor will have the same obligations in relation thereto as set forth in Section 14.1.4, for a period equal to the longer of (i) twelve (12) months, or two (2) years (for Extended Warranty Equipment) from the date such re-performance, rework, repair or replacement is completed, or (ii) the remaining period under the Parts and Labor Warranty Period for such System or Extended Warranty Equipment. Except for Extended Warranty Equipment, all Parts and Labor Warranties, including Parts and Labor Warranties on repaired or replaced parts, shall expire no later than two (2) years after the date of Substantial Completion of the System. All Parts and Labor Warranties on Extended Warranty Equipment, including Parts and Labor Warranties on repaired or replaced parts, shall expire no later than four (4) years after Substantial Completion of the associated System. The cost of performing the Contractor’s warranty obligations under this Section 14.1.5 shall be treated as Guarantee Costs pursuant to Section 11.3.

14.1.5.2 Extension for Total Shutdown. If, after the date of Substantial Completion of a System and during the Parts and Labor Warranty Period for such System, such System is shut down or derated (other than for the purpose of scheduled or routine maintenance) and such shutdown would not have occurred but for the existence of a defect or failure covered by one of the Parts and Labor Warranties, then the Parts and Labor Warranty Period for such System will be extended by a period equal to the duration of the shutdown or derating.

14.2 Blank.

14.3 Aggregation of Warranties and Specific Time Limitation. Contractor’s obligations in connection with the Parts and Labor Warranties are separate and in addition to, and not to the exclusion of the Performance Guarantee. In no instance will the expiration or limitation of any warranty imply the expiration or limitation of any other warranty. In order for Owner to exercise any remedy under this Article 14, Owner must have notified Contractor of Owner’s intention to make a claim under such warranty no later than thirty (30) days after the expiration of the given warranty period for such warranty.

14.4 No Other Warranties/Obligations. THE PARTS AND LABOR WARRANTY, AND THE PERFORMANCE GUARANTEES CONSTITUTE THE SOLE AND EXPRESS WARRANTIES OF CONTRACTOR WITH RESPECT TO THE SYSTEMS UNDER THIS AGREEMENT, AND ANY AND ALL WARRANTIES THAT MAY BE IMPLIED UNDER APPLICABLE LAW, EQUITY OR CUSTOM OF TRADE, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A SPECIFIED OR INTENDED PURPOSE, ARE HEREBY DISCLAIMED. The remedies of Owner (and obligations of Contractor) expressly provided in this Agreement for any breach of any of the Parts and Labor Warranty during the Parts and Labor Warranty Period, shall constitute Owner’s sole remedies (and Contractor’s sole obligations), whether based on contract, tort (including negligence and strict liability) or otherwise, with respect to such breach. For the avoidance of doubt, the Parties expressly agree that the foregoing shall not affect Owner’s rights under Section 6.10, Article 7, Article 8, Article 23 and Article 28.

15. STANDARDS OF PERFORMANCE

Contractor shall be solely responsible for all construction means, methods, techniques, sequences, procedures and safety and security programs in connection with the performance of the Work. Contractor will supervise and direct the Work using its best skill and attention. Contractor will enforce strict discipline and good order among all employees of Contractor and its Subcontractors. Contractor will not permit employment of unfit persons or persons not skilled in tasks assigned to them. Contractor shall perform the Work in accordance with the following standards: (a) with a design basis objective for the Facility that assumes at least a thirty (30) year commercial life from Substantial Completion; (b) in accordance with (i) the plans and specifications and accompanying data set forth in Exhibit 1; (ii) Applicable Laws and Applicable Permits; (iii) the codes and standards provided in this Agreement, Prudent Utility Practices and Prudent Electrical Practices; and (c) in a manner that is approved as to form, use and content by public entities authorized under Applicable Laws to administer or enforce any building or construction code or standard and whose approval of the final design of the Facility, or any portion thereof, is necessary for the construction, operation or maintenance of the Facility in accordance with Applicable Laws.

16. MECHANICAL COMPLETION

16.1 Mechanical Completion. “Mechanical Completion” of each System will be achieved when, with respect to such System, each of the following conditions have been met:

16.1.1 Contractor has completed the design, engineering, procurement, permitting, construction and installation of such System in accordance with the Contract Documents, including: the setting of the Systems Equipment for such System on its foundations; connecting such Systems Equipment to other applicable equipment with piping, wiring, controls, and safety systems; ensuring that such Systems Equipment is individually cleaned, leak checked, lubricated,

and point-to-point checked to verify that such Systems Equipment is ready for initial operation and testing and may be so operated and tested without damage thereto or to any other property and without injury to any person;

16.1.2 Contractor has completed the Work in connection with such System so that it is capable of operating safely in accordance with Prudent Utility Practices, Prudent Electrical Practices, Applicable Laws and Applicable Permits; and

16.1.3 Contractor has provided to Owner the operation and maintenance instruction manuals for such System as required under Section 6.5.6.

16.2 Notice and Achievement of Mechanical Completion for Each System. Contractor will notify Owner in writing ten (10) calendar days in advance of the date on which it anticipates Mechanical Completion for a System will occur. When Contractor believes that it has achieved Mechanical Completion for a System, Contractor shall deliver a written notice thereof to Owner (“Notice of Mechanical Completion”). The Notice of Mechanical Completion for each System will contain a report in a form acceptable to Owner and with sufficient detail to enable Owner to determine whether Mechanical Completion has occurred. Within ten (10) Business Days of receipt of a Notice of Mechanical Completion of a System, Owner shall inspect the System and either (i) deliver to Contractor a written certification stating that Contractor has achieved the requirements set forth in Sections 16.1.1 through 16.1.3, or (ii) notify Contractor in writing that such criteria have not been achieved, stating the reasons therefore. If Owner certifies that such requirements have been met, then the date of the Notice of Mechanical Completion will be deemed to be the date Mechanical Completion of such System has been achieved. In the event Owner notifies Contractor that such requirements have not been met, Contractor shall undertake such action or work that is reasonably necessary to achieve such requirements and shall then issue another written notice to Owner stating that Contractor believes that such requirements have been achieved. Such procedure shall be repeated until Mechanical Completion for such System is achieved. Should Owner fail to make any notification to the Contractor within the aforesaid ten (10) day period after its receipt of Notice of Mechanical Completion, then the System shall be deemed to have achieved Mechanical Completion as of the date of the Notice of Mechanical Completion. So long as Owner has satisfied the ten-day notice requirement, issuance by Owner of a certificate stating that the requirements of Sections 16.1.1 through 16.1.3 have been met shall be a condition to achievement of Mechanical Completion.

17. PROVISIONAL ACCEPTANCE / SUBSTANTIAL COMPLETION

17.1. Criteria for Provisional Acceptance of FGD System. “Provisional Acceptance” of the Work required in connection with each FGD System will be achieved when, with respect to such System, each of the following conditions have been met:

17.1.1 Mechanical Completion for such System has been achieved; and

17.1.2 Contractor has completed Performance Test PA as described in Exhibit 6 and such Performance Test PA has demonstrated that the System complies with the Performance Guarantees for Performance Test PA, subject to the provisions of Section 7.2.3 with respect to Mercury Removal.

17.2. Criteria for Substantial Completion of FGD System. “Substantial Completion” of the Work required in connection with each FGD System will be achieved when, with respect to such System, each of the following conditions have been met:

17.2.1 Mechanical Completion for such System has been achieved;

17.2.2 Contractor has completed Performance Test 1 as described in Exhibit 6 and such Performance Test 1 has demonstrated that the System complies with the Performance Guarantees for Performance Test 1 or, with respect to the Input Guarantees as provided in Section 7.1, that the System complies with the Engineering Design Margins as provided in Section 7.1.2;

17.2.3. Contractor has completed performance of all the Work for such System in accordance with the Contract Documents, except for any remaining items set forth in the Punch-List for such System;

17.2.4. Contractor has provided to Owner, and Owner has reviewed and approved, the Punch-List for such System as described in Section 17.5; and

17.2.5. Contractor has delivered to Owner all such lien releases and waivers as are required under Section 12.10.2.

17.3 Notice and Report of Provisional Acceptance for Each System. At such time as Contractor believes that it has met the requirements under Section 17.1 with respect to a System, it will deliver to Owner notice thereof (the “Notice of Provisional Acceptance”). The Notice of Provisional Acceptance for each System will contain a report in a form acceptable to Owner and with sufficient detail to enable Owner to determine whether Contractor has achieved such requirements.

17.4 Achievement of Provisional Acceptance of the Work. Owner will within seven (7) Business Days after Owner’s receipt of the Notice of Provisional Acceptance for a System either (i) deliver to Contractor a written certificate stating that the requirements for Provisional Acceptance of such System have been met, or (ii) notify Contractor in writing that such requirements have not been met, stating the reasons therefore. If Owner certifies that such requirements have been met, then the date of the Notice of Provisional Acceptance will be deemed to be the date Provisional Acceptance of such System has been achieved. In the event Owner notifies Contractor that such requirements have not been met, Contractor will promptly take such actions as will cause such requirements to be met, and upon meeting such requirements, Contractor will issue

to Owner another Notice of Provisional Acceptance for such System. Such procedure will be repeated as necessary until Owner certifies that such requirements have been met for such System. Should Owner fail to make any notification to the Contractor within the aforesaid seven (7) Business Day period after its receipt of Notice of Provisional Acceptance, then the System shall be deemed to have achieved Provisional Acceptance as of the date of the Notice of Provisional Acceptance. So long as Owner has satisfied the seven-day notice requirement, the issuance by Owner of a certificate stating that the requirements of Section 17.1 have been met shall be a condition to achievement of Provisional Acceptance.

17.5 Creation of Punch-List. No later than ten (10) calendar days prior to the then-scheduled date of Substantial Completion for a System, Contractor will prepare and deliver to Owner a prepared punch list setting forth those minor, non-operational items that remain to be performed to complete the Work required in connection with such System and the proposed time limits within which Contractor will complete such remaining Work. Upon its receipt of Contractor’s prepared punch list for a System, Owner will review and direct Contractor to make any appropriate or necessary revisions to the same, after which Owner’s Authorized Representative and Contractor’s Authorized Representative will meet and consult in good faith to agree upon the definitive, final punch-list for such System, including the approved time limits within which Contractor will perform such remaining Work (such punch-list, with respect to each System constituting the “Punch-List” for such System). Once the final Punch-List for such System is agreed upon, Contractor will immediately begin work on the items thereon, provided, that if Contractor has not commenced such Work within three (3) Business Days, or has not completed such Work within the approved time limits set forth in the final Punch-List, then Owner may have such items completed. All costs and expenses related to such actions of Owner will be accounted for as Allocable Costs under Section 11.5. Notwithstanding the foregoing, Owner and Contractor may agree for Owner to undertake certain Punch-List items for Contractor, in which event such item(s) will be removed from the Punch-List, and Contractor will pay to Owner the amount agreed upon for such undertaking. Owner’s taking of any actions under this Section will not relieve Contractor of its obligations under this Agreement or Applicable Laws, or constitute a waiver of any of Owner’s rights or a mitigation or diminution of any of Contractor’s obligations under this Agreement.

17.6 Notice and Report of Substantial Completion for Each System. At such time as Contractor believes that it has met the requirements under Section 17.2 with respect to a System, it will deliver to Owner notice thereof (the “Notice of Substantial Completion”). The Notice of Substantial Completion for each System will contain a report in a form acceptable to Owner and with sufficient detail to enable Owner to determine whether Contractor has achieved such requirements.

17.7 Achievement of Substantial Completion of the Work. Owner will within seven (7) Business Days after Owner’s receipt of the Notice of Substantial Completion for a System either (i) deliver to Contractor a written certificate stating that the requirements for Substantial Completion of such System have been met, or (ii) notify

Contractor in writing that such requirements have not been met, stating the reasons therefore. If Owner certifies that such requirements have been met, then the date of the Notice of Substantial Completion will be deemed to be the date Substantial Completion of such System has been achieved. In the event Owner notifies Contractor that such requirements have not been met, Contractor will promptly take such actions as will cause such requirements to be met, and upon meeting such requirements, Contractor will issue to Owner another Notice of Substantial Completion for such System. Such procedure will be repeated as necessary until Owner certifies that such requirements have been met for such System. Should Owner fail to make any notification to the Contractor within the aforesaid seven (7) Business Day period after its receipt of Notice of Substantial Completion, then the System shall be deemed to have achieved Substantial Completion as of the date of the Notice of Substantial Completion. So long as Owner has satisfied the seven-day notice requirement, the issuance by Owner of a certificate stating that the requirements of Section 17.2 have been met shall be a condition to achievement of Substantial Completion.

17.8 Transfer of Possession and Control of the Systems to Owner. Upon Substantial Completion of a System, Owner shall take possession and control of such System. Following transfer of possession and control of such System to Owner and prior to Final Completion of such System, Contractor will have reasonable access to such System and the Site so as to complete the Punch-List items on such System.

18. FINAL COMPLETION .

18.1 Requirements. “Final Completion” of the Work required in connection with each Facility will be achieved, with respect to such Facility or System, when:

18.1.1 Contractor has achieved Substantial Completion of the Work required in connection with all Systems at the Facility;

18.1.2 Owner and Contractor have completed Final Reconciliation.

18.1.3 Contractor has completed all Punch-List items for all Systems at the Facility, or has bought-down all such Punch-List items of a price mutually agreed upon by Owner and Contractor;

18.1.4 Contractor has executed and delivered to Owner all full lien waivers and releases for the Facility or System as required under Section 12.10.2.3 (or, in lieu thereof, Contractor has provided and Owner has accepted a lien discharge bond or other security as allowed under Section 12.10.2.5); and

18.1.5 Contractor has delivered to Owner (i) As-Built Drawings as required under Section 6.5.5; (ii) copies of all purchase orders, contracts, subcontracts and material requisitions with its Subcontractors who performed Work on or in connection with such System, as required under Section 32.8; (iii) legally effective written assignments of all Subcontractor guarantees and

warranties on Systems Equipment that were provided by such Subcontractors in connection with such System, as required in Section 32.5; (vi) a list of the names, addresses, and telephone numbers of all Subcontractors providing such guarantees and warranties; and (v) the turnover package required under Section 6.5.7.

18.2 Notice and Report of Final Completion. At such time as Contractor believes that it has met the requirements under Sections 18.1.1 through 18.1.5 for a Facility, it will deliver to Owner a written notice thereof (the “Notice of Final Completion”). The Notice of Final Completion for each System will contain a report in a form acceptable to Owner and with sufficient detail to enable Owner to determine whether Contractor has achieved such requirements.

18.3 Achievement of Final Completion. Owner will within five (5) Business Days following Owner’s receipt of the Notice of Final Completion for a Facility, either (i) deliver a written certification stating that the requirements for Final Completion of such Facility have been achieved, or (ii) notify Contractor in writing that such requirements have not been achieved, stating the reasons therefore. If Owner certifies that such requirements have been met, then the date of such Notice of Final Completion will be deemed the date Final Completion of such Facility or System. If Owner notifies Contractor that such requirements have not been met, then Contractor will promptly take such actions as will cause such requirements to be met, and upon meeting such requirements, Contractor will issue to Owner another Notice of Final Completion. Such procedure will be repeated as necessary until Owner certifies that such requirements have been met. Should Owner fail to make any notification to Contractor within the aforesaid five (5) Business Day period after its receipt of Notice of Final Completion, then the Facility shall be deemed to have achieved Final Completion as of the date of the Notice of Final Completion. So long as Owner has satisfied the aforesaid five-Business Day notice requirement, the issuance by Owner of a certificate stating that the requirements of Sections 18.1.1 through 18.1.5 have been met shall be a condition to achievement of Final Completion.

19. CHANGE ORDERS

19.1 Changes. Without invalidating this Agreement, Owner may issue an order making Changes (each such order, a “Change Order”) to the Work, in which event one or more of the Contract Price or the Approved Project Schedule may be adjusted as provided in this Article 19. Changes may only be authorized by Change Orders issued in accordance with this Article 19. Change Orders will constitute the exclusive remedy to Contractor for any Changes.

19.2 Procedure for Changes.

19.2.1 Changes Initiated by Contractor. Should Contractor become aware of any circumstances which Contractor has reason to believe may necessitate a Change, Contractor will issue to Owner a written “Change Order Notice.” All Change Order Notices will include, to the extent practicable, documentation

sufficient to enable Owner to determine (i) the factors necessitating the possibility of a Change, (ii) the impact which the Change is likely to have on the Contract Price based on the time and materials rate charges in effect at the time of the Change pursuant to Section 10.2 of this Agreement, (iii) the impact which the Change is likely to have on Contractor’s compliance with the Approved Project Schedule, and (iv) such other information which Owner may request in connection with such Change. If Contractor fails to provide a Change Order Notice to Owner within fifteen (15) Business Days after Contractor knew about the first occurrence or circumstance resulting in the possibility of such Change, then notwithstanding anything in this Article 19 to the contrary, Contractor agrees that Owner’s ability to exercise its rights pursuant to Section 19.16 shall have been compromised and Contractor will be deemed to have waived any right to receive a Change Order based upon such occurrence or circumstance. Owner may, but except as provided in Sections 19.3, 19.4, 19.5, 19.6, 19.7, 19.9, 19.10, 19.11 and 19.12below, will not be obligated to, issue a Change Order pursuant to a Change Order Notice. Unless otherwise stated by Owner in writing or in the event of an emergency that poses an immediate threat to life or property, any work outside the Work described in the Contract Documents performed by Contractor prior to its having received a Change Order from Owner will be at Contractor’s sole risk.

19.2.2 Changes Initiated by Owner. If Owner desires to make a Change, it will submit a “Change Order Request” to Contractor. Contractor will promptly review the Change Order Request and notify Owner in writing, as promptly as possible and no later than five (5) Business Days after receipt, of the options for implementing the proposed Change (including, if possible, any option that does not involve an increase in the Contract Price or an extension of the Approved Project Schedule) and to the extent practicable based on reasonably available information the effect, if any, each such option would have on the Contract Price and the Approved Project Schedule. After consideration of such information, Owner may, but will not be obligated to, issue a Change Order pursuant to this Section 19.2.2.

19.2.3 Change in Cost Element and Fee Element. Any change to the Contract Price shall be in the amount of the sum of the associated changes in the Cost Element and the Fee Element pursuant to Section 19.14:

19.2.3.1 The “Cost Element” means the Target Cost.

19.2.3.2 The “Fee Element” means the Target Fee.

19.3 Change Order Due to Force Majeure Event. In the event and to the extent that a Force Majeure event Directly Causes a delay to the critical path of the Work at the time of the Force Majeure event, then upon submission of a proper Change Order Notice and subject to the other Sections of this Article 19, the Approved Project Schedule will be extended by Change Order by the number of calendar days of actual delay to the critical

path of the Work at the time of the Force Majeure event. Such Change Order will be Contractor’s sole and exclusive remedy for any such delay. To the extent an event of Force Majeure affects Contractor’s costs, the provisions of Section 20.4 will apply.

19.4 Change Order Due to Suspension of Work by Owner. In the event that Owner suspends the Work pursuant to the provisions of Section 23.2, then, upon submission of a proper Change Order Notice and subject to the other Sections of this Article 19, Contractor will be entitled to a Change Order extending the Approved Project Schedule as required and, if necessary, increasing the Contract Price pursuant to Section 19.14 so as to equitably compensate Contractor for additional demonstrable Direct Costs incurred by Contractor as Directly Caused by such suspension. Such Change Order will be Contractor’s sole and exclusive remedy for such increased costs and/or delay. During the suspension period, Owner shall reimburse Contractor on a time and material basis for its stand-by charges, storage and maintenance charges, and demobilization and remobilization charges.

19.5 Change Order Due to Differing Site Conditions. In the event Contractor encounters a subsurface condition at the Site that is not reasonably ascertainable from the information provided in the Geotechnical Study prepared pursuant to Section 31.1 (including but not limited to information relating to the water table, rock formations, and the bearing capacity of soil) and to the extent such condition Directly Causes an increase to Contractor’s Direct Cost of performing the Work and/or Directly Causes a delay to the critical path of the Work at the time such condition is encountered, then, upon submission of a proper Change Order Notice and subject to the other Sections of this Article 19, the Approved Project Schedule will be extended by Change Order by the number of calendar days of actual delay to the critical path of the Work at the time the subsurface condition is encountered, and the Contract Price shall be increased pursuant to Section 19.14 so as to equitably compensate Contractor for additional demonstrable Direct Costs incurred by Contractor and Directly Caused by such condition.

19.6 Change Order Due to Pre-Existing Hazardous Substances. In the event Contractor encounters Hazardous Substances that were present at the Site prior to the date of the NTP, or that were brought to or deposited on the Site by Owner or a separate contractor of Owner, and to the extent such condition Directly Causes an increase to Contractor’s Direct Cost of performing the Work and/or Directly Causes a delay to the critical path of the Work at the time such condition is encountered, then, upon submission of a proper Change Order Notice and subject to the other Sections of this Article 19, the Approved Project Schedule will be extended by Change Order by the number of calendar days of actual delay to the critical path of the Work at the time the subsurface condition is encountered, and the Contract Price shall be increased pursuant to Section 19.14 so as to equitably compensate Contractor for additional demonstrable Direct Costs incurred by Contractor and Directly Caused by such condition.

19.7 Change Order Due to Actions of Owner. In the event Contractor suffers increased costs and/or a delay in the critical path progress of the Work and to the extent such increased costs and/or delay is Directly Caused by the acts or omissions of Owner,

including delay or failure of Owner to perform its obligations under this Agreement including Owner’s obligations under Article 5, then, upon submission of a proper Change Order Notice and subject to the other Sections of this Article 19, Contractor shall be entitled to a Change Order extending the Approved Project Schedule as required and, if necessary, increasing the Contract Price pursuant to Section 19.14 so as to equitably compensate Contractor for additional demonstrable Direct Costs or critical path delay incurred or experienced by Contractor as Directly Caused by such acts or omissions of Owner. Such Change Order shall be Contractor’s sole and exclusive remedy for such increased costs and/or delay.

19.8 Blank.

19.9 Change Order Due to Changes in Applicable Law. The Parties acknowledge that Contractor must adhere to all Applicable Laws. In the event Contractor incurs increased Direct Costs and/or a delay in the critical path progress of the Work that are Directly Caused by a Change in Applicable Law, then, upon submission of a proper Change Order Notice and subject to the other Sections of this Article 19, Contractor shall be entitled to a Change Order extending the Approved Project Schedule by the number of calendar days of actual delay to the critical path of the Work at the time of such Change in Applicable Law, and increasing the Contract Price pursuant to Section 19.14 so as to equitably compensate Contractor for additional demonstrable Direct Costs or critical path delay incurred by Contractor and Directly Caused by such Change in Applicable Law. For purposes hereof, a “Change in Applicable Law” means the adoption, imposition, promulgation, cancellation, modification or change in the interpretation or application of, after the execution of this Agreement of any state, city, county or other Applicable Law, which affects Contractor’s cost or performance of the Work; provided, however, that a change in law or regulation relating to (i) gross receipts, income, or other similar taxes, or (ii) immigration or naturalization, shall not constitute a Change in Applicable Law for the purposes of this Section 19.9.

19.10 Change Order Due to Escalation in Actual Self-Performed Field Manual Services Costs. Contractor’s initial hourly costs for Actual Self-Performed Field Manual Services are set forth in Exhibit 8B. On or before January 1 and July 1 of each year, Contractor shall submit to Owner a report (the “Escalation Report”) showing the amount of increase or decrease in such hourly cost that Contractor request for the upcoming six-month period, based on changes in labor surveys and published reports of the cost for such labor. Each Escalation Report shall contain (i) the man-hours of labor for the remaining Work as set forth in Exhibit 8B, and (ii) such information as Owner shall reasonably require to demonstrate the amount of labor cost escalation or de-escalation reported in the indices or published reports for such hourly labor. Owner shall review and verify each Escalation Report within fifteen (15) days of receipt. To the extent that such escalation or de-escalation is justified by the Contractor’s Escalation Report, the Contract Price shall be adjusted by Change Order in the amount of the increase in hourly costs multiplied by the remaining Work hours as set forth in Exhibit 8B, without any xxxx-up for Target Fee. The exclusive method for modifying the Contract Price based on increases or decreases in Contractor’s hourly labor costs under Section 10.2.4 shall be a

Change Order pursuant to this Section 19.10 and such Change Order shall be Contractor’s sole and exclusive remedy for escalation of Actual Self-Performed Field Manual Services Costs.

19.11 Change Order Due to Escalation in Home Office Labor Costs and Actual Field Non-Manual Labor Costs . Contractor’s initial hourly rates for Home Office Labor and Field Non-Manual Labor are set forth in Exhibit 8D. On or before January 15 of each year, Contractor shall submit to Owner a Change Order Notice for a five percent (5%) increase in such rates. Upon submission of a proper Change Order Notice and subject to the other Sections of this Article 19, Contractor shall be entitled to a Change Order increasing the Target Cost by the product of the increase in rates multiplied by the man-hours for the remaining Work hours as set forth in Exhibit 8B, and the amount of the increase in the Target Fee shall be calculated in accordance with Section 19.14.4. The exclusive method for modifying the Contract Price based on increases or decreases in Contractor’s hourly cost under Section 10.2.2 and 10.2.3 shall be a Change Order pursuant to this Section 19.11.

19.12 Change Order Due to Escalation of Commodities. Within fifteen (15) days after the date that a firm and enforceable price is established for the Commodity, Contractor shall submit a Change Order Notice. The Change Order shall be based on the change in the value of the index as set forth in Exhibit 8F, the quantity to which this price is applicable and the baseline price for the Commodity as set forth in Exhibit 8F. Upon submission of a proper Change Order Notice and subject to the conditions of Section 10.2.5the other Sections of this Article 19, upon Owner’s approval, Contractor shall be entitled a Change Order to increase or decrease the Target Cost and the Target Fee in accordance with Section 19.14.

19.13 Changes Involving Schedule Extensions. Within five (5) Business Days of submission of a Change Order Notice under Section 19.2.1, or within ten (10) Business Days after submission of a Change Order Request under Section 19.2.2, the Contractor shall prepare and submit, on an Open Book basis, an analysis of the delay, if any, caused by such Change to the critical path progress of the Work. Contractor shall supplement this analysis on an Open Book basis with such other information as Owner may reasonably require. Any Change Order extending any date in the Approved Project Schedule will only extend such date(s) by a number of calendar days, at a maximum, equal to the number of calendar days of delay Directly Caused to the actual critical path of the Work at the time of the event giving rise to the Change Order and only to the extent that such delay to the critical path progress of the Work has been demonstrated by Contractor to Owner’s reasonable satisfaction.

19.14 Changes to the Contract Price. Within five (5) Business Days of submission of a Change Order Notice under Section 19.2.1, or within ten (10) Business Days after submission of a Change Order Request under Section 19.2.2, the Contractor shall prepare and submit, on an Open Book basis, an analysis of the impact of the Change on the Cost Element for the System, Facility, or Project, as the context may require.

Contractor shall supplement this analysis on an Open Book basis with such other information as Owner may reasonably require. The amount of an increase or decrease in the Cost Element and Fee Element, if any, resulting from a Change will be determined and will be included in the Change Order as follows:

19.14.1 in a lump sum amount proposed by Contractor and accepted by Owner; or

19.14.2 if Owner does not accept the lump sum amount proposed by Contractor, by unit prices agreed upon by the Parties; or

19.14.3 if neither of the methods set forth in Sections 19.14.1 or 19.14.2 is agreed upon after good faith negotiation by the Parties, Contractor will provide Owner with such purchase orders, invoices, Subcontractor quotes and other documents and records as Owner may require to verify, to its satisfaction, Contractor’s incremental Direct Costs or savings of effecting such Change (or Directly Caused by the event necessitating such Change) (“Contractor’s Additional Direct Costs or Savings”). All equipment, materials, labor, equipment rental and other items associated with such Change will be purchased by Contractor at competitive market prices. Owner will, upon verifying Contractor’s Additional Direct Costs or Savings associated with such Change, adjust the Cost Element by an amount equal to such Contractor’s Additional Direct Costs or Savings, the calculation of these shall be in accordance with the methodology used to develop the Target Cost. Owner will make appropriate adjustments to the amount of the applicable Incremental Payment Amount in the Approved Final Milestone Payment Schedule.

19.14.4 A Change Order that increases or decreases the Cost Element shall also increase or decrease the Fee Element in an amount calculated by multiplying the percentage Fee times the amount of the increase or decrease in the Cost Element. The amount of increase or decrease in the Cost Element and the Fee Element shall be stated separately on each Change Order. Adjustment in the Fee Element as provided in this Section 19.14.4 shall be Contractor’s sole remedy and sole means for adjusting its margins for profit, overhead, or similar costs due to Changes in the Work, and Contractor expressly waives any claims for modification of such margins based on cardinal change or other legal or equitable theories.

19.15 Continued Performance Pending Resolution of Disputes. Notwithstanding and pending resolution of any dispute with respect to a Change, Contractor must proceed, upon written notice from Owner, with the performance of any Change ordered by Owner. Contractor will be reimbursed provisionally on a time and material basis for any such Change ordered by Owner that increases the scope of the Work. For disputed Changes that do not increase the scope of the Work, Contractor may request provisional reimbursement. Should Owner deny such provisional reimbursement, Contractor may submit a request for provisional reimbursement to the DRB pursuant to Section 33.5.

19.16 Owner’s Right to Offset Changes. Whenever it is determined that any Changes may require an extension of the Approved Project Schedule, Owner may, at its sole discretion and to the extent possible, elect to offset all or any part of such extension with other Changes (including but not limited to Changes to the Contract Price) that will maintain the Approved Project Schedule. Whenever it is determined that any Changes may require an increase in the Contract Price, Owner may at its sole discretion and to the extent possible, elect to offset all or any part of such increase with other Changes (including but not limited to Changes to the Approved Project Schedule) that will maintain the Contract Price.

19.17 Other Work on Site. Owner reserves the right to perform, and to award separate contracts for the performance of, construction or operations related or ancillary to other work on the Site. Contractor will in good faith coordinate its performance of the Work with any activities of Owner and/or other contractors operating at the Site or at the Facility.

20. FORCE MAJEURE

20.1 Force Majeure. At each particular Site, an event of “Force Majeure” will mean any act or event that prevents or delays the affected Party from performing its obligations under this Agreement or complying with any conditions required by the other Party under this Agreement if such act or event is beyond the reasonable control and not the fault of the affected Party and such Party has been unable by the exercise of all reasonable efforts to prevent, overcome or mitigate the effects of such act or event. To the extent the foregoing conditions are satisfied, Force Majeure events will include, but not be limited to:

20.1.1 acts of God, including lightning, hurricanes, unusually severe storms, earthquakes and floods;

20.1.2 acts of the public enemy, war, hostilities, terrorism, pandemic, civil or military insurrection, expropriation or confiscation of facilities, public disorders, sabotage, riots; and

20.1.3 national or regional strikes and national or regional labor disturbances; provided, however, that unavailability of labor and strikes and labor disturbances confined to the work forces of Contractor and/or its Subcontractors are explicitly excluded from a Force Majeure event and are the sole responsibility of Contractor;

provided, further, that Force Majeure shall not include (i) reasonably anticipatable weather conditions at the Site, (ii) events caused by negligence or willful misconduct of the Party claiming Force Majeure, or (iii) failure by a Subcontractor to perform in accordance with the terms of its subcontract or purchase order, unless such failure is

caused by the Subcontractor being a Party affected by Force Majeure as defined in this Section 20.1.

20.2 Burden of Proof. The burden of proof as to whether Force Majeure has occurred will be upon the Party claiming a Force Majeure event.

20.3 Obligations Excused. If either Party is rendered wholly or partly unable to perform its obligations under this Agreement because of Force Majeure, Contractor will be entitled to a Change Order pursuant to Section 19.3, and Owner will be excused from whatever performance is affected by Force Majeure to the extent so affected; provided that:

20.3.1 the Party claiming Force Majeure, within seventy-two (72) hours after knowing of the occurrence of or the effect of the Force Majeure, gives the other Party written notice describing the particulars of the occurrence;

20.3.2 any suspension of performance is of no greater scope and of no longer duration than is reasonably required by the Force Majeure;

20.3.3 the Party claiming Force Majeure uses its best efforts to overcome or mitigate the effects of such occurrence;

20.3.4 when the non-performing Party is able to resume performance of its obligations hereunder, that Party will give the other Party written notice to that effect and will promptly resume such performance; and

20.3.5 No Force Majeure event shall excuse Owner’s payment obligations.

20.4 Costs. Any additional Direct Cost incurred by Contractor in performing Work, and Directly Caused by Force Majeure shall not be grounds for an increase in the Target Cost by Change Order pursuant to Section 19.3 until the aggregate of such Direct Costs shall equal or exceed two million dollars ($2,000,000), and Contractor shall only be entitled to a Change Order based on Force Majeure for the additional Direct Costs incurred by Contractor that exceed two million dollars ($2,000,000). Any costs incurred by Owner by reason of or Directly Caused by Force Majeure will be borne by Owner.

21. AGGREGATE LIABILITY

21.1 Aggregate Liability. The aggregate liability of Contractor and its affiliates under this Agreement for the Work performed at all three Facilities shall not exceed the amount of three hundred million dollars ($300,000,000).

21.2 Sub-limits of Liability.

21.2.1 Liquidated Damages and Warranty Work. The maximum liability of Contractor and its affiliates for liquidated damages under Sections 6.2.3.2, 7.1, and 8.2, and for performance of warranty work under Article 14 shall be for each Facility an amount equal to the Fee for such Facility; provided, however, that should the Project Compensation be calculated in accordance with Section 13.2.2.3 or 13.2.2.4, then such maximum liability shall be as follows:

21.2.1.1 If Project Compensation is calculated in accordance with Section 13.2.2.3, then the maximum liability shall be the amount by which the Target Fee exceeds one-half (50%) of the difference between Actual Cost and the sum of the Target Price plus 50% Contingency.

21.2.1.2 Blank.

21.2.1.3 Blank.

21.2.1.4 Blank.

21.2.1.5 If Project Compensation is calculated in accordance with Section 13.2.2.4, then the maximum liability shall be limited to 50% of the Target Fee.

21.2.2 Systems Equipment Subcontractors. For Work performed or provided by the Subcontractors providing Systems Equipment, the maximum liability of Contractor and its affiliates for defects in such Work on all three Facilities shall be:

For the FGD Systems, an amount equal to any amounts collected from the Subcontractors providing Systems Equipment, plus fifteen million dollars ($15,000,000).

21.2.2.1 Contractor’s liability in connection with the Mercury removal guarantee in Section 7.2.1.2 shall not exceed one million dollars ($1,000,000) per FGD System

21.2.3 Other Subcontractors. For Work not performed or provided by the Subcontractors providing Systems Equipment, the maximum liability of Contractor and its affiliates for services, materials, rework, or reperformance pursuant to Sections 7.1.3, 7.2.2, and 7.3.2 at all three facilities shall be one hundred million dollars ($100,000,000), and shall be further limited as follows for such services, material, rework or reperformance at a Facility:

Morgantown= $100,000,000 maximum

Chalk Point = $80,000,000 maximum

Xxxxxxxxx= $80,000,000 maximum

21.2.4 Facility Limits. In any event, (i) liquidated damages pursuant to Sections 8.2 and 6.2.3.2 for schedule delay at a single Facility will not exceed ten percent (10%) of the portion of the Contract Price for that Facility; (ii) liquidated damages under Section 7.1 based on failure to satisfy performance guarantees at a single Facility shall not exceed five percent (5%) of the Contract Price for that Facility; and the aggregate of (i) and (ii) shall not exceed fifteen percent (15%) of the Contract Price for each Facility. For the purposes of this Section 21.2.4, the Contract Price for a Facility shall be calculated using the Target Cost for the Facility provided pursuant to Section 6.1.3, as adjusted by Change Order pursuant to Article 19.

21.3 Pursuit of Subcontractor Warranties. Contractor shall use reasonable and good faith efforts to recover warranty, re-work, and make good obligation amounts from its Subcontractors and at Owner’s request shall assign to Owner all rights of recovery Contractor may have against such Subcontractors.

21.4 Consequential Damages. In no event shall either Party or an affiliate of either Party be liable to the other Party, whether based on contract, tort, strict liability, or otherwise, for special, incidental or consequential losses or damages, including without limitation loss of profits or revenue, loss by reason of plant shutdown, non-operation or increased expense of operation, service interruptions, cost of purchased or replaced power, claims of customers, cost of money, lost profits, loss of business opportunity, loss of bonding capacity, loss of use of capital or revenue, or loss or damage arising out of or related to occupational disease or non-compliance with environmental law; provided, however, that the foregoing limitation shall not be construed as a waiver or limit of liability of Contractor (i) under the provisions of this Agreement that provide Owner with specific remedies against Contractor (i.e. liquidated damages payable by Contractor), or (ii) in cases of any breach of the Confidentiality Section 34.5 of this Agreement and any breaches of the patent indemnity by Contractor as fully described in Section 28.3 of this Agreement and (iii) in cases of fraud or willful misconduct. Furthermore, the Parties hereby expressly agree that any claims of third parties for which Contractor has an indemnification obligation under Article 28 are not consequential losses or damages.

21.5 Consequential Damages for Subcontractors. In no event shall any Subcontractor be liable to Owner, and in no event shall Owner be liable to any Subcontractor, whether based on contract, tort, strict liability, or otherwise, for special, incidental or consequential losses or damages, including without limitation loss of profits or revenue, loss by reason of plant shutdown, non-operation or increased expense of operation, service interruptions, cost of purchased or replaced power, claims of customers, cost of money, lost profits, loss of business opportunity, loss of bonding capacity, loss of use of capital or revenue, or loss of damage arising out of or related to occupational disease or non-compliance with environmental law; provided, however, that the foregoing limitation shall not be construed as a waiver or limit of liability of any Subcontractor (i) under the provisions of this Agreement or any subcontract that provide Owner or Contractor with specific remedies against a Subcontractor (i.e. liquidated damages payable by a Subcontractor), or (ii) in cases of any patent infringement

indemnity or other indemnity by a Subcontractor (iii) in cases of a false or misleading statement in a lien waiver or (iii) in cases of fraud or willful misconduct. Furthermore, any claims of third parties for which a Subcontractor has an indemnification obligation are not consequential losses or damages.

21.6 Indemnity for Lessor Claims. Mirant Mid-Atlantic shall defend, indemnify and hold Contractor and its affiliates harmless against any claim, damage, liability, suit, or action asserted against Contractor by any real property lessor of the Mirant Mid-Atlantic, LLC Facilities (collectively “Lessor Claim”) to the extent that such Lessor Claim would be barred by Sections 21.1, 21.2, 21.3 or 21.5.

22. SECURITY

22.1 Contractor’s Parent Company Guarantee. No later than ten (10) Business Days after issuance of the NTP, Contractor shall provide a parent company guarantee acceptable to the Owner which shall guarantee all of Contractor’s obligations under this Agreement; provided, however, that the obligations of the guarantor under such guarantee shall be limited to three hundred million dollars ($300,000,000).

22.2 Contractor’s Letter of Credit. Contractor shall provide a letter of credit in form and substance acceptable to Owner (as shown in Exhibit 11) from a mutually acceptable U.S. financial institution (“Letter of Credit”) in the following amounts and at the following times:

22.2.1 Not later than ten (10) Business Days after issuance of the LNTP, Contractor has provided a Letter of Credit in an amount equal to the purchase order issued by Owner to Contractor for the Work to be performed under the LNTP, excluding the value of the purchase order allocated to Systems Equipment to be purchased from Subcontractors. Contractor shall use good faith efforts to obtain from such Subcontractors, to the extent commercially practicable, letters of credit securing the performance of the Subcontractors. Such letters of credit shall be in the greatest amount practicable and shall be in favor of and drawable by Owner until such time as Contractor satisfies its obligation to provide the $50,000,000 letter of credit required by Section 22.2.3.

22.2.2 Not later than ten (10) Business Days after issuance of the INTP, Contractor shall amend the Letter of Credit or provide a new substitute Letter of Credit equal to the amount of the purchase orders issued by Owner to Contractor for the Work performed or to be performed under the LNTP and INTP, excluding the value of the purchase order allocated to Systems Equipment to be purchased from Subcontractors. Contractor shall use good faith efforts to obtain from such Subcontractors, to the extent commercially practicable, letters of credit securing the performance of the Subcontractors. Such letters of credit shall be in the greatest amount practicable and shall be in favor of and drawable by Owner until such time as Contractor satisfies its obligation to provide the $50,000,000 letter of credit required by Section 22.2.3.

22.2.3 Not later than ten (10) Business Days of issuance of the NTP for FGD Systems, Contractor shall amend the Letter of Credit or provide a new substitute Letter of Credit equal to fifty million dollars ($50,000,000). The Letter of Credit in this Section 22.2 shall remain in effect and drawable by Owner until Substantial Completion of all Work for the last System on each Facility whereupon, the amount of the Letter of Credit will be stepped down by an amount proportionate to the relative Target Cost of such Facility to the sum of the Target Costs for all three Facilities. The Letter of Credit shall be promptly returned to Contractor upon the last System of the last Facility achieving Substantial Completion. To the extent that any replacement of a Letter of Credit is required to maintain compliance with this Section 22.2, Contractor shall deliver the replacement Letter of Credit to Owner no later than thirty (30) days prior to the date when the existing Letter of Credit will expire. In the event of a failure to comply with the preceding sentence, Owner shall be entitled to draw upon the existing Letter of Credit prior to the expiration thereof and take such further action to protect its interests pursuant to this Agreement.

22.3 Performance Bond and Payment Bond. To further assure Contractor’s performance under this Agreement, within ten (10) Business Days after the issuance of the NTP for FGD Systems, Contractor will furnish to Owner a performance bond and a payment bond each having a face value of one hundred and fifty-five million dollars ($155,000,000). The combined penal sum of both bonds in the aggregate shall not exceed the face value of either bond. Such performance and payment bonds shall be substantially in the form set forth in Exhibit 12. The payment bond shall remain in effect and drawable until Final Completion. The performance bond will remain in effect and drawable until Substantial Completion. The face value of the performance bond shall be stepped down as each Facility achieves Substantial Completion and the face value of the payment bond shall be stepped down as each facility achieves Final Completion (the step-down being in an amount proportionate to the relative target Cost of the Facility to the sum of the Target Costs of all three Facilities). The payment bond shall be promptly returned to Contractor upon the last Facility achieving Final Completion. At Substantial Completion of the last Facility, the performance bond provided at NTP shall be replaced with a performance bond covering all obligations of Contractor under Article 14 and Sections 7.2.2 for the Equivalent Availability Guarantee referred to in Section 7.2.1.3 with a penal sum equal to ten percent (10%) of the Contract Price of the Project (the “Warranty Bond”). In no event shall the combined penal sum of the performance bond provided at NTP, and the Warranty Bond be less than ten percent (10%) of the Contract Price for the Project.

22.4 Owner Security. No later than ten (10) Business Days of issuance of the NTP for FGD Systems\, Owner shall provide a letter of credit in form and substance acceptable to Contractor (as shown in Exhibit 11) from a mutually acceptable U.S. financial institution (“Letter of Credit”) for an amount of $55,000,000 (the “Owner Security”). Contractor can request a change in Owner’s Security to an amount not to exceed $80,000,000 in the event that Contractor’s committed cost exposure increases.

Contractor shall include in such request all documents as requested by Owner to justify the increase. If Owner is satisfied, Owner will amend the Letter of Credit to the approved value. Such amendment shall be issued no later than Ten (10) business days from such approval. The letter of credit in this Section 22.4 shall remain in effect and drawable by Contractor until release of fifty percent (50%) of the retention at Substantial Completion of each System, whereupon, the amount of the letter of credit will be stepped down by an amount proportionate to the relative Target Cost of the Facility to the sum of the Target Costs of all three Facilities. The letter of credit shall be promptly returned to Owner upon Substantial Completion of the last System at the last Facility and release of the corresponding fifty percent of retention for that System. To the extent that any replacement of a Letter of Credit is required to maintain compliance with this Section 22.4, Owner shall deliver the replacement Letter of Credit to Contractor no later than thirty (30) days prior to the date when the existing Letter of Credit will expire. In the event of a failure to comply with the preceding sentence, Contractor shall be entitled to draw upon the existing Letter of Credit prior to the expiration thereof and take such further action to protect its interests pursuant to this Agreement. Upon the issuance of the INTP, Owner shall provide to Contractor a parent company guarantee in a form acceptable to Contractor and issued by Mirant North America, Inc., which shall guarantee the payment obligations of the Owner under this Agreement and the EPC Agreement up to the maximum amount of sixty-two million five hundred thousand dollars ($62,500,000).

23. SUSPENSION AND TERMINATION

23.1 Right to Stop Work for Cause. If, due to Contractor’s failure (i) to correct defective Work under Section 6.10.2, (ii) to meet its repair or replacement obligations under Section 28.1; (iii) to meet its safety obligations under Section 6.8; (iv) to meet its obligations to complete Punch-List items as provided in Section 17.5; (v) to achieve Provisional Acceptance on or before the date that is thirty (30) days after the applicable Guaranteed Provisional Acceptance Date, or (vi) to perform the Work in accordance with the Approved Project Schedule such that Owner can reasonably deduce that Contractor will not complete the Work necessary to comply with the requirements for an outage in accordance with Section 8.2.1.2, Owner shall be entitled to take any of the Owner-cure actions under such Sections, then Owner may, by a written order signed by its Authorized Representative, order Contractor to stop performing all or a portion of the Work in order to allow Owner to take such actions. The foregoing right of Owner to stop Contractor’s performance will not give rise to any duty on the part of Owner to exercise this right for the benefit of Contractor or any other person or entity. In addition, Owner, by written order signed by its Authorized Representative, may order Contractor to stop performance if the activities of Contractor or Contractor’s Subcontractors reasonably appear to Owner to cause or threaten to cause damage to the property of Owner. In the event of such a stop order, Contractor will not be entitled to a Change Order extending the Approved Project Schedule. The cost of any delays experienced by Contractor as a result of orders issued by Owner ordering Contractor to stop performance hereunder will be borne by Contractor. Owner’s right to stop work under this Section 23.1 will be without prejudice to any other right or remedy Owner may have under this Agreement.

23.2 Right to Suspend Work for Convenience. Owner may at any time and from time to time, by a written order signed by its Authorized Representative, suspend (and later reinstate) all or a portion of the Work without terminating this Agreement. Upon receipt of such order, Contractor will immediately suspend its performance of the Work. In the event of a suspension of the Work, Contractor shall use its best efforts to mitigate potential delays to the date of Substantial Completion and to minimize the amount of personnel and equipment that is idled and the costs associated with such suspension. If Owner suspends the Work pursuant to this Section, then Contractor will be entitled to a Change Order as described in Section 19.4.

23.3 Suspension by Contractor. Subject to Sections 19.15 and 33.6 for amounts that are disputed in good faith, if Owner fails to pay to Contractor any payment when due under this Agreement and such failure continues for fifteen (15) calendar days after written notice thereof has been received by Owner from Contractor, and so long as such notice from Contractor to Owner was given at least five (5) days after payment was due, then Contractor may suspend the Work until payment of the amount owing has been received.

23.4 Termination by Owner for Convenience.

23.4.1 Right to Terminate. Owner may, at any time and for any reason, terminate all or any part of this Agreement (provided that termination of part of the Agreement shall not be for substantially the entire scope for a Facility, unless Owner decides not to proceed with the Work for the Facility) for Owner’s convenience and without cause by providing Contractor with written notice regarding the same. In the event of partial termination, the remaining Work under this Agreement shall be performed in accordance with all of the terms and conditions of this Agreement, and the Target Cost and Fees will be increased or decreased in proportion to the value of the Work terminated.

23.4.2 Termination Payment. Within thirty (30) calendar days of Contractor’s having received notice from Owner under Section 23.4.1, Owner will reimburse Contractor for completed Work and work-in-progress, applicable vendor cancellation charges, demobilization costs, and reasonable costs to bring the work to an orderly conclusion (collectively the “Termination Payment”). The Termination Payment will be Contractor’s sole and exclusive remedy for such termination. Owner will not be liable to Contractor, any Subcontractor or any other party for any damages or indirect, special, incidental costs or consequential liability resulting from such termination, including without limitation, prospective profits on Work not performed or other consequential or incidental damages. The Parties recognize, agree and acknowledge that Owner’s termination right hereunder is a permitted action under this Agreement (and not a breach hereof or a default hereunder), which right carries with it the obligation to make the Termination Payment. In the event of termination by Owner for convenience, Contractor’s liability limitations that are expressed as a percentage

of the Contract Price shall instead be calculated as a percentage of the actual compensation paid to Contractor.

23.4.3 Withholding/Conditions Precedent. Notwithstanding Section 23.4.2 Owner may withhold from such Termination Payment any unpaid amounts due from Contractor to Owner under this Agreement. Furthermore, the following will be conditions precedent to Owner’s obligation to pay Contractor the Termination Payment: (i) Contractor’s executing and delivering all such documents and taking all such steps, including the assignment of Contractor’s contractual rights, as Owner may require for the purpose of fully vesting in Owner all rights, title and interests of Contractor in and to all subcontracts, purchase orders, warranties, guarantees and other agreements pertaining to the Work; (ii) Contractor’s executing and delivering to Owner all waivers and releases, in form and substance acceptable to Owner, required to establish that the Systems, the Facility and the Site, and any and all interests, estates or improvements related thereto, are free from any and all claims, liens, security interests or encumbrances arising out of or in connection with performance by Contractor or any Subcontractor of the Work; (iii) Contractor’s delivering to Owner any other information reasonably requested by Owner; and (iv) Contractor’s delivery to Owner of assignments of any agreements with Subcontractors for which Owner requests assignment.

23.4.4 Return of Security In the event of termination for convenience pursuant to this Section 23.4, and subject to all of the rights of the Parties under the Contract Documents, (i) Owner shall return the original Letter of Credit issued by Contractor pursuant to Section 22.2 to Contractor for cancellation; (ii) Contractor shall return the original Letter of Credit issued by Owner pursuant to Section 22.4 to Owner for cancellation; (iii) Owner shall return the original Payment and Performance Bond issued by Contractor pursuant to Section 22.3 to Contractor for cancellation; and (iv) Owner shall pay all undisputed retainage to Contractor. Upon request of either Party, the exchange of Letters of Credit and Payment and Performance Bonds pursuant to subparts (i), (ii) and (iii) shall be simultaneous.

23.5 Termination by Owner for Cause. If a Contractor Event of Default occurs, then Owner may, without prejudice to any other right or remedy Owner may have under this Agreement and notwithstanding any other provision under this Agreement, at any time terminate all or any part of this Agreement, such termination becoming effective seven (7) calendar days after notice thereof is provided from Owner to Contractor. For purposes hereof, a “Contractor Event of Default” will be deemed to have occurred if:

23.5.1 Insolvency. Contractor is adjudged as bankrupt or insolvent, makes a general assignment for the benefit of its creditors, has a trustee or receiver appointed for its property, or files a petition to take advantage of any debtor’s act;

23.5.2 Delay After Provisional Acceptance. (a) Provisional Acceptance of an FGD System has failed to occur on or before the date that is thirty (30) calendar days after the Guaranteed Provisional Acceptance Date for such System as adjusted by Change Order, and (b) Contractor has not provided an acceptable recovery plan to Owner;

23.5.3 Key Personnel. Breach by Contractor of Article 9 of this Agreement (“Key Personnel”); or

23.5.4 Material Breach. Contractor otherwise refuses to perform, or commits a material breach, of any of the terms of this Agreement and fails to cure such breach within a reasonable time after notice.

Upon such termination or partial termination Owner may take possession of the applicable portion of the Site and of the applicable materials, equipment (including, without limitation, Construction Equipment and Systems Equipment) and tools thereon owned by Contractor, may take assignment of the applicable Contractor’s agreements with Subcontractors, and may finish the applicable Work by whatever method Owner may deem expedient. If the costs of finishing the applicable Work exceed the unpaid balance of the Contract Price for such Work, then Contractor will pay the difference to Owner, subject to the provisions relating to limitations of liability and cost sharing set forth in this Agreement. Such right of termination for cause and right to take possession shall be in addition to and not in limitation of Owner’s other rights and remedies under the Agreement or, should Owner have exhausted any non-exclusive specific remedy under this Agreement, under law or equity.

23.6 Actions Upon Termination. Upon receipt of written notice from Owner of termination of this Agreement pursuant to either Section 23.4 or 23.5, Contractor will (i) cease operations as directed by Owner in the notice; (ii) take all actions necessary, including such actions as Owner may direct, for the protection and preservation of all Systems Equipment, Construction Equipment and the Systems (in whatever stage of completion); and (iii) terminate all existing subcontracts and purchase orders for the portion of the Work terminated (unless and to the extent Owner directs Contractor to assign such subcontracts and/or purchase orders to Owner pursuant to Section 23.4.3) and enter into no further subcontracts and purchase orders in connection with the Work.

23.7 Survival. Termination of this Agreement will not relieve Contractor of any obligation hereunder which expressly or by implication survives termination hereof, including, without limitation, its liabilities, warranties, and indemnification obligations under Article 28 with respect to any acts or omissions prior to the effectiveness of such termination or arising out of such termination.

24. ASSIGNMENT

Contractor may not assign its rights or obligations under this Agreement without the prior written consent of Owner. Owner may assign its rights and obligations under

this Agreement at any time to any future owner of the Facility and to any lender or other financing entity. When requested by Owner, Contractor will execute and return a consent to assignment in a form acceptable to such lender, financing entity or future owner. Subject to the foregoing, all of the rights, benefits, duties, liabilities and obligations of the Parties will inure to the benefit of and be binding upon their respective successors and permitted assigns.

25. INSURANCE

25.1. Contractor’s Insurance. Prior to commencement of the Work, Contractor shall purchase and maintain the following insurance coverages and limits until the earlier of Final Completion or termination of this Agreement except for Products and Completed Operations coverage as described in the sections below. The limits of coverage required by this Agreement may be satisfied by a combination of primary and excess (or umbrella) insurance policies provided that the form of the excess/umbrella coverage follows the form of the primary liability insurance. All insurance obtained by Contractor hereunder shall be written by a company or companies with a Best’s rating of no less than A: VII or equivalent. Such company or companies must be lawfully authorized to do business in the jurisdiction in which the Facility is located or where any services related to this Agreement are performed.

25.1.1 Casualty Insurance.

25.1.1.1 Commercial General Liability Insurance. Commercial General Liability Insurance providing coverage of Ten Million Dollars ($10,000,000), reduced to Two Million Dollars ($2,000,000) between Substantial Completion and Final Completion, each occurrence as will protect Contractor, Owner, Owner’s affiliates, employees, representatives, agents and the Financing Parties from third party bodily injury (including death) and property damage claims which may arise out of or result from Contractor’s operations under the Agreement and for which Contractor, Owner or the Financing Parties may be legally liable.

25.1.1.1.1 Liability insurance in Section 25.1.1.1 shall be written on an occurrence form and include Comprehensive Form, Premises and Operations, Independent Contractors, Products and Completed Operations, Blanket Written Contractual, Broad Form Property Damage, Explosion, Collapse and Underground Hazard (XCU coverage), Sudden and Accidental Pollution and Personal Injury liability coverages. A cross liability and severability of interest clause shall be included. Blanket Contractual Liability Insurance shall specifically include Contractor’s indemnification obligations under this Agreement.

25.1.1.1.2 Products and Completed Operations coverage shall continue for two (2) years after the earlier of Substantial Completion of the Work, and termination of this Agreement.

25.1.1.2 Business Automobile Liability Insurance. Business Automobile Liability Insurance, including coverage for the operation of all owned, non-owned and hired vehicles including trailers with limits of liability for bodily injury (including death) and property damage of $5-Million Dollars ($5,000,000), reduced to Two Million Dollars ($2,000,000) between Substantial Completion and Final Completion, combined single limit per occurrence (and with no aggregate limit). Such insurance shall cover occurrences both at and away from the Facility Site.

25.1.2 Workers’ Compensation and Employer’s Liability Insurance. Contractor shall provide and maintain Workers’ Compensation Insurance or its substantial equivalent on its employees for statutory obligations imposed by Workers’ Compensation or Occupational Disease laws and regulations of the applicable jurisdiction, including coverage for the benefits provided under the United States Longshoremen & Harbor Workers’ Act, the Xxxxx Act and other appropriate extensions, with Employer’s Liability Insurance (Coverage B) including Maritime, to limits of One-Million Dollars ($1,000,000) each accident. Coverage under the Broad Form All States extension shall be included. For comparable exposures falling outside the United States, Contractor shall comply with all legally required obligations related to employee injuries, including obligations related to compensation for medical costs and/or lost wages.

25.1.3 Contractor’s Property. Contractor shall be responsible for and shall bear the risk of loss and damage to any property including but not limited to (i) tools and equipment of Contractor (owned or rented) and (ii) any property (other than the Work) for which it is responsible or that is in its care, custody and control, wherever located, to the extent that such property is not covered under Owner’s Builder’s Risk insurance. Any insurance provided for property owned or rented by Contractor shall be at Contractor’s expense. All deductibles with respect to Contractor’s insurance shall be for the account of Contractor.

25.1.4 Transit Insurance. Where Contractor has responsibility to coordinate transportation, whether ocean or air (inland transit being by Owner pursuant to Section 25.1.6), Contractor shall bear responsibility for providing transit coverage on an all-risk basis from warehouse to warehouse, unless total risk of loss in transit is borne by the shipper or supplier, or Owner provides notification that it will carry such coverage. Coverage shall include lightering operations and loading and unloading exposures therefrom and provide a limit of full replacement value of each conveyance. Any marine inspections and/or survey fees under this coverage shall be for the account of Contractor.

25.1.5 Other Insurance.

25.1.5.1 International Insurance. Additional Insurance may be required in accordance with the customs of the country where any part of the operation of this Agreement will occur.

25.1.5.2 Differences in Condition Policy. Difference in Conditions Policy with the applicable limit required in Section 25.1.1 above to complete gaps left by the local policy that are customarily included in a policy issued in the United States.

25.1.6 General Insurance Conditions. Other than coverage under Builder’s All Risk or All Risk Property and Inland Marine Insurance to be procured by Owner pursuant to Section 25.2.1, all coverages provided by Contractor shall be primary coverage for incidents arising from Contractor’s work under the Agreement and pay without contribution from any other coverage procured or maintained by Owner, its affiliates and/or the Financing Parties regardless of whether or not Owner has similar coverage. Contractor shall bear all cost for payment of any and all deductibles or self-insured retentions under its policies and shall remain solely and fully liable for the full amount of any claim or item not compensated by insurance. The Contractor’s deductible shall encompass the costs of defense, including court costs and attorney’s fees. Except with respect to Professional Liability, Worker’s Compensation/Employer’s Liability coverages and insurance on Contractor’s property, all coverages required to be carried by Contractor under this Agreement shall be endorsed to name Owner, its affiliates, employees and the Financing Parties as additional insureds and other parties reasonably requested by Owner for their imputed liability as a result of Contractor’s operations hereunder. Unless prohibited by law, Contractor shall and require its insurers to waive any right of recovery, under subrogation or otherwise, against Owner, its affiliates, employees and the Financing Parties.

25.1.7 Other Duties, Representations, and Obligations.

25.1.7.1 Certificates of Insurance. Certificates of Insurance will be provided on an industry standard XXXXX Form 25 shall be filed with Owner prior to commencement of the Work. These Certificates and the insurance polices required by this Agreement shall contain a provision that the coverages afforded under Contractor’s policies shall not be modified, canceled, allowed to expire, or the limits changed without first giving at least thirty (30) days prior written notice thereof to Owner. No such cancellation, modification or change shall affect Contractor’s obligation to maintain the insurance coverages required by the Agreement. Upon expiration of all required policies, renewal certificates shall be sent to Owner for verification of continued compliance of Contractor’s Insurance requirements under this Agreement.

25.1.7.2 Violation of Insurance Terms. Contractor shall not violate or knowingly permit any violation of any conditions or terms of the policies of insurance required by this Agreement.

25.1.7.3 Failure to Maintain Insurance. In the event Contractor neglects, refuses or fails to provide or maintain any of the insurance required under this Agreement, or if such insurance is canceled for any reason, Owner shall have the right, but not the obligation, to procure or maintain the same. In the event Owner does procure or maintain such insurance, Owner shall have, in addition to any and all other, available remedies, the right to recover from Contractor all of the costs associated with procuring or maintaining such insurance.

25.1.7.4 No Waiver of Liability. The foregoing provisions requiring Contractor to carry insurance shall not be construed in any manner as waiving, restricting or limiting the liability of Contractor as to any obligations imposed under this Agreement, whether or not same are, or may be, covered by insurance. In addition, the maintenance of Contractor’s insurance shall not in any way operate to limit the liability of Contractor to Owner under this Agreement.

25.1.7.5 Additional Insurance. Upon a reasonable written request from Owner, Contractor shall provide as soon as practical additional insurance, including increased coverage and /or limits of liability, as it deems appropriate for the risk involved, and Owner will pay Contractor the actual premium cost thereof.

25.1.7.6 Premium Audit. With respect to any special policies or additional limits procured as a result of this Agreement, Contractor hereby grants permission to Owner, or Owner’s representative, to audit any request for premium reimbursement including permission for Owner to contact and receive its broker’s certification.

25.1.8 Subcontractor’s Insurance.

25.1.8.1 Levels of Coverage. Contractor shall require all Subcontractors of any tier that may work on or in connection with the Project to maintain the coverages required in this Article (or at least equivalent coverage); provided however, that Contractor may vary the limits of such coverage of subcontractors depending on the services provided, but such limits shall be comparable to those customarily provided by others within similar size and scope of business. In no event shall the insurance requirements be deemed to limit the liability or responsibility of Contractor or any of its Subcontractors to Owner.

25.1.8.2 Waiver of Rights. Contractor shall require all tiers of Subcontractors to waive the rights of recovery against Owner, its affiliates, employees and the Financing Parties.

25.2. Owner’s Insurance.

25.2.1 Builder’s All Risk. Owner shall provide and maintain for the duration of the Project Builder’s Risk Insurance or All Risk Property Insurance written on an “all-risk” form insuring all real and personal property of Owner at the Facility Site, on a replacement cost basis while under construction and during any testing, including hot testing, as well as operating property insurance for the existing and completed Facility through the Warranty Period. This insurance includes the interests of Owner, Financing Parties and Contractor (including Contractor’s affiliates and Subcontractors). Owner shall provide to Contractor a certificate of insurance confirming the status of Contractor as an additional insured on the Project Builder’s Risk or All Risk Property Insurance policy. The Insurance policy shall provide for a waiver of all rights of subrogation against the Financing Parties and Contractor (including Contractor’s affiliates and Subcontractors). Contractor will be responsible for any deductible or self-insured retention under this insurance up to a maximum of (US$5,000,000) for each and every occurrence. The foregoing shall in no way affect Contractor’s obligation for any breach of the Warranty as described in the Terms and Conditions of the Agreement. The furnishing of said insurance by the Owner shall in no way relieve, or limit, or be construed to relieve or limit, the Contractor or Subcontractors of any tier of any other responsibility or obligation otherwise imposed by this Agreement.

25.2.2 Exclusion from Builder’s Risk. Contractor is aware that insurance companies providing “all-risk” Builder’s Risk insurance usually exclude several classes of unusual risk. Upon Contractor review and concurrence, Contractor agrees that the terms of the Builder’s Risk policy shall define any exclusion, which may reasonably exist.

25.2.3 Contractor Compliance. Contractor will promptly comply with the recommendations of the insurance carriers so that said insurance carriers will continue to provide the coverage to be maintained by the Owner pursuant to this Agreement at a reasonable premium.

26. TIME

The time periods, time deadlines and other temporal descriptions (collectively “Time”) contained in this Agreement are a material part of the bargain between the parties and are considered essential to the performance of the Parties under this Agreement. Furthermore, all references to Time are considered fixed and absolute, subject only to the cure periods expressed in this Agreement, and Change Orders pursuant to Article 19.

27. TAXES

27.1 Taxes. Contractor will administer, pay for and furnish to the appropriate taxing authorities all required information and reports in connection with, all Taxes. Contractor shall be responsible for paying all Taxes associated with the Work, except as otherwise provided in Sections 27.2 and 27.3 below. If and to the extent Owner is legally required to pay any such Taxes associated with the Work, Contractor will promptly reimburse Owner for the full amount of such Taxes paid by Owner.

27.2 Sales Taxes. Owner will provide Contractor with a Maryland Exempt Use Affidavit, for the express purpose of allowing Contractor to use the Affidavit to procure Systems Equipment free of any and all sales or use taxes, in and outside of the State of Maryland. Should the Affidavit not be applicable to any item of Systems Equipment, then Contractor shall pay the tax due to the relevant taxing authority, and Owner shall reimburse Contractor for such tax in the Milestone Progress Payment applicable to the subject item of Systems Equipment. Such reimbursement shall be outside the EPC Total Compensation.

27.3 Property Taxes. Owner will be responsible for all property taxes assessed on the Site and on Systems Equipment. Contractor will be responsible for paying, and shall administer, any property taxes assessed against, or on, Construction Equipment.

28. INDEMNIFICATION

28.1 Property Damage. In addition to and not in limitation of its compliance with all Applicable Laws and Applicable Permits (including, without limitation, those relating to work and occupational safety and health measures) Contractor will take all reasonable precautions to avoid any damage to person or property at the Site or any adjacent areas due to its activities at the Site. Subject to Section 28.2, if Contractor or its Subcontractors cause any property damage at the Site during the course of the performance of the Work, and to the extent Owner is not reimbursed for such damages as an insured or an additional insured under any policy of insurance, then Contractor will bear the cost of same; provided, however, that for any such cost covered by Contractor’s insurance, the portion of such cost paid by Contractor as an insurance deductible shall be treated as Guarantee Cost pursuant to Section 11.3; provided further that the maximum amount of such costs that may be treated as Guarantee Costs shall be five hundred thousand dollars ($500,000) for each occurrence. If, in the reasonable opinion of Owner, Contractor has failed to fulfill its obligations under the foregoing sentence within a reasonable period of time, then Owner may repair or replace or cause to be repaired or replaced any damaged property and take all such actions as it deems necessary in order to return the affected part of the Site or any adjacent areas to the condition in which they were in prior to such damage. All costs and expenses related to such actions of Owner will be for the account of Contractor, and Contractor will promptly reimburse such amounts to Owner, subject to the limitation set forth in Section 28.2 and Article 21. Owner’s taking such actions will not relieve Contractor of its obligations under this Agreement and Applicable Laws or constitute a waiver of any of Owner’s rights or a mitigation or diminution of any of Contractor’s obligations under this Agreement.

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Contractor understands and agrees that it shall not interfere, and shall coordinate and cooperate, with the Owner, Owner’s Separate Contractors and other contractors at the Project Site to fully perform the Work with no or minimal impact to any other party.

28.2 Limitation on Property Damage Indemnification. Notwithstanding anything to the contrary, Contractor’s liability for damage to the Work under Section 28.1 shall be limited to the deductible of the Builders All Risk and Liability Insurance to be procured by Owner pursuant to Section 25.2 hereunder, and Contractors Liability for damage to the existing Facilities shall be limited to the deductible of Owner’s property insurance. To the extent that Contractor damages any personnel or property of another Owner authorized party at the Project Site by or through its negligence, and such damage is not covered by any applicable insurance policy, then Contractor shall be and remain liable for such damage.

28.3 Royalties and License Fees. Contractor will pay all royalties, license fees and the like, if any, for any tangible or intangible property or software or any other intellectual property rights including, without limitation, materials, methods, processes and systems used, purchased or provided by or on behalf of Contractor for incorporation into a System. In performing the Work, Contractor will not incorporate into a System any materials, methods, processes or systems which involve the use of any confidential information, intellectual property or proprietary rights which Owner or Contractor does not have the right to use or which may result in claims or suits against Owner or Contractor arising out of claims of infringement including, without limitation, of any domestic or foreign patent rights, copyrights, trademarks or service marks, or other proprietary rights, or applications for any such rights, or unauthorized use of confidential information.

28.4 Operation of Systems. The operation and maintenance of the Systems will be within the exclusive control of Owner. The Parties acknowledge that, in operating and maintaining the Systems, Owner will be following the instructions set forth in the operating and maintenance manual provided to Owner by Contractor under Section 6.5.6. Owner agrees to indemnify and save Contractor harmless from expense and liability (including reasonable attorney’s fees) incurred by or imposed upon Contractor based upon injury to person (including death) or damage to tangible property resulting from Owner’s operation or maintenance of the Systems in violation of the operating and maintenance manual provided under Section 6.5.6.

28.5 No Liens or Encumbrances. Contractor warrants and guarantees that good and clear title to the Systems, the Systems Equipment and all materials and supplies provided pursuant to this Agreement will pass to Owner free and clear of all claims, liens, security interests and other rights and encumbrances.

28.6 Contractor’s Indemnities for Personal Injury or Property Damage. To the extent of Contractor’s or its Subcontractor’s negligence or fault, Contractor hereby assumes liability for, and will indemnify, defend and hold harmless Owner and its respective shareholders, members, partners, affiliates, employees, and representatives

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(the “Owner Indemnitees”) from and against liability (including any strict liability), claims, suits, actions, costs (including attorneys’ fees), expenses, losses or judgments that may be imposed on, incurred by or asserted against any Owner Indemnitee arising out of personal injuries (including wrongful death) or any third party property damage arising from the Work.

28.7 Other Contractor’s Indemnities. Contractor hereby assumes liability for, and will indemnify, defend and hold harmless Owner Indemnitees from and against liability (including any strict liability), claims, suits, actions, costs (including attorneys’ fees), expenses, losses or judgments that may be imposed on, incurred by or asserted against any Owner Indemnitee arising out of (i) the release or threatened release by Contractor or its Subcontractors, of any Hazardous Substances on the Site or any areas adjacent thereto that are brought onto the site by Contractor or its Subcontractors, (ii) the violation by Contractor or its Subcontractors of any Applicable Laws and/or Applicable Permits, (iii) any claim or allegation that any Systems Equipment, Construction Equipment or other equipment, materials or information provided by Contractor or any Subcontractor in connection with its performance of the Work constitutes an infringement of any patent, trade xxxx, trade secret or confidential information, copyright or proprietary rights of any kind belonging to or claimed by any third party, or (iv) any Subcontractor liens, claims of lien or similar encumbrances arising in connection with any Subcontractor claims.

28.8 No Limitation to Workers’ Benefits. In any and all claims against any Owner Indemnitee or any of their agents or employees by any employee of Contractor or any Subcontractor, the indemnification obligation under Section 28.6 above will not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for Contractor or any Subcontractor under workers’ or workmen’s compensation acts, disability benefit acts or other employee benefit acts.

29. GOVERNING LAW

This Agreement will be governed in all respects by the laws of the State of New York, U.S.A. without giving effect to any choice of law ruled thereof which may direct the application of the laws of another jurisdiction. Subject to the Dispute resolution Article 33, any action arising out of, or related to, this Agreement or the Project shall be brought in a court of competent jurisdiction sitting in the Borough of Manhattan, City of New York, New York, U.S.A. and the Parties consent to jurisdiction and venue in such court.

30. PERMITTING

30.1 Responsibility for Permitting. Responsibility for permitting is set forth in Exhibit 4. For permits for which Owner is responsible, Contractor shall provide technical support and reasonable assistance in support of Owner’s application for such permits. For permits for which Contractor is responsible, Owner shall provide reasonable assistance in support of Contractor’s application for such Applicable Permits.

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30.1.1 Owner’s Permits Required for Construction. With respect to each FGD System, Owner shall obtain all permits as required for construction for which it is responsible on or before September 1, 2007. Should Owner fail to obtain such permits by such date, then by Change Order pursuant to Sections 19.7 and 19.13, and subject to Section 19.16, the milestone identified in Exhibit 15 as “Ready for Flue Gas to Scrubber” and the Guaranteed Provisional Acceptance Date for such System shall each be extended day-for-day for each day of delay in obtaining such permits.

30.1.2 Permission to Begin Installation of Pilings With respect to each FGD Systems, Owner shall use good faith efforts to obtain permission for Contractor to begin installing the necessary piles at the Site on or before August 1, 2007. Should Owner fail to obtain such permission, then by Change Order pursuant to Sections 19.7 and 19.13, and subject to Section 19.16, the milestone identified in Exhibit 15 as “Ready for Flue Gas to Scrubber” and the Guaranteed Provisional Acceptance Date for such System shall each be extended day-for-day for each day of delay in obtaining such permission.

30.2 Other Permits. To the extent that any permits are required that are not listed in Exhibit 4, then Owner will obtain and pay for all environmental and operating permits, and Contractor will obtain and pay for all construction permits.

31. SITE CONDITIONS

31.1 Geotechnical Study. The Contractor shall perform and have full responsibility for the comprehensive geotechnical study (the “Geotechnical Study”) which shall indicate the results of Contractor’s full investigation, discovery, and conclusions regarding the subsurface conditions and all other geotechnical issues at the Site. The findings and conclusions of the Geotechnical Study shall be incorporated into the design of the Project.

31.2 Special Site Characteristics. Prior to issuance of NTP, Contractor shall thoroughly inspect the Site and fully familiarize itself with the structures, features, characteristics and conditions of the available working space and the ongoing operations of the Facility. Contractor shall ascertain the most suitable means and methods for executing and delivering the Work in accordance with this Agreement, and shall employ such means throughout its performance of the Work.

31.3 Contractor’s Knowledge of Conditions. Contractor will be responsible for having taken all steps necessary to ascertain the suitability of the location of the Work, and the general and local conditions which may affect the Work or the scheduling or cost thereof. Failure by Contractor to fully acquaint itself with all conditions which may affect the Work, such as transportation, handling, storage of materials, normal weather patterns and ambient conditions, Applicable Laws, Applicable Permits, Taxes, insurance, and the character and availability of labor, consumables, supplies, Systems Equipment,

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Construction Equipment, the nature and timing of work being performed by other contractors and the facilities needed preliminary to and during the performance of the Work, will not relieve Contractor of its responsibilities under this Agreement.

31.4 Sub-Surface Site Conditions. Contractor agrees that each Site is or will be made by Contractor satisfactory for performance of the Work in accordance with the Approved Project Schedule and for the Contract Price (except as the Approved Project Schedule and Contract Price may be adjusted in accordance with Article 19). Contractor expressly assumes the risk of any sub-surface conditions relating to soils, water, or rock that may affect the performance of the Work that could reasonably have been deduced from or revealed by the Geotechnical Study described in Section 31.1 of this Agreement.

32. SUBCONTRACTORS

32.1 Approved Subcontractors. Owner will have the right to approve any and all Subcontractors from whom Contractor or its Subcontractors may obtain bids to subcontract portions of the Work. In no case shall Owner’s approval of any subcontract impose on Owner any responsibility for the Work or relieve Contractor of any of its obligations under this Agreement. Owner’s approval of Contractor’s proposed Subcontractors of any tier will not be unreasonably withheld. If Contractor receives a disapproval notice for any Subcontractor it shall not use or utilize such Subcontractor. Those approved Subcontractors are listed in Exhibit 1. Contractor may also have portions of the Work performed by its affiliates, in which event the Work shall be awarded by competitive sourcing and shall be subject to all provisions of Article 10.

32.2 Subcontractor and Vendor Identification. Prior to issuance of the NTP, Contractor shall identify all equipment and erection Subcontractors or potential Subcontractors that Contractor will employ to complete the Work. Contractor shall not add any additional Subcontractors after issuance of the NTP without Owner’s prior approval.

32.3 Substitute Contractors. If Contractor proposes to substitute a non-preapproved subsupplier, the subsupplier’s credentials shall be submitted to Owner for approval. Sufficient data must be provided to Owner in a timely manner to prove that the proposed equipment is of an equivalent quality and has proven operation in similar service conditions, including capacity, to that provided by the pre-approved subsuppliers. If an offshore subsupplier is proposed, contractor shall provide information providing satisfactory domestic stockpiling of any required spare parts.

32.4 Purchase Orders and Subcontracts. Except as otherwise expressly agreed or directed by Owner, Contractor will ensure that each Subcontractor with whom Contractor has a direct contract is bound to Contractor to the same extent that Contractor is bound to Owner hereunder. Contractor will use in connection with the Work such Contractor-prepared purchase orders, contracts, subcontracts, material requisitions, terms and conditions and similar purchasing forms as are generally used from time to time by Contractor, however, these forms shall be designed to facilitate an Open Book analysis of

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underlying costs related to the Work. As a condition to Final Completion, Contractor will provide Owner with copies of all purchase orders, contracts, subcontracts and material requisitions relating to such System (unpriced for any Work being performed on a lump sum pricing method). Contractor shall purchase the DCS equipment and software on the terms and conditions for purchase of same by Owner pursuant to the Master Agreement between Mirant Services LLC and Invensys Systems, Inc dated Xxxxx 00, 0000, (xxx “DCS Master Agreement”) a copy of which was provided to Contractor prior to the Effective Date. Contractor’s responsibility to Owner under this Agreement for the DCS equipment shall be equal to but no higher than the obligations of the DCS Contractor for the DCS Equipment under the DCS Master Agreement.

32.5 Subcontractor Warranties. Except as otherwise expressly agreed or directed by Owner in writing, Contractor will procure from suppliers standard warranties and guarantees with respect to the Systems Equipment. Notwithstanding any failure of Contractor to obtain such a warranty from a supplier, the Parts and Labor Warranty shall apply to all Systems Equipment. If, and to the extent, that Owner is not able to effectuate a warranty remedy from the Contractor, where Contractor has subcontracted such services, then Owner may contact and prosecute such warranty services from such Subcontractor. As a condition to the achievement of Final Completion, and/or prior to the termination of this Agreement, Contractor will (i) assign in writing all such warranties and guarantees to Owner; (ii) secure any consents necessary for such assignment from each Subcontractor; and (iii) deliver to Owner copies of all contracts and subcontracts (unpriced for any Work being performed on a lump sum pricing method) providing for warranties and guarantees enforceable by Owner. Neither Contractor, nor its Subcontractors will take any action which could release, void, impair or waive any warranties or guarantees on Systems Equipment, materials or services that it procures from others.

32.6 Subcontractor Insurance. Except as otherwise agreed or directed by Owner in writing, Contractor will require all Subcontractors with whom Contractor has a direct contract to obtain, maintain and keep in force (and to require from their lower tier Subcontractors to obtain, maintain and keep in force) during the time in which they are engaged by Contractor similar insurance coverages, if and as applicable to their respective scopes of services and activities as are required of Contractor pursuant to Section 25.1. The limits for such coverage may be reduced by the Contractor in which case the Contractor agrees to be solely responsible to Owner, the Financing Parties, claimants or employees for any otherwise un-recovered losses which fall in the area between the required Subcontractor coverage and that which is actually procured and maintained. Furthermore, Contractor will require of its subcontractors that the policies providing such coverages meet the same requirements as are applicable to Contractor’s policies, as set forth in Article 25.

32.7 No Privity with Subcontractors. Other than subsequent to an assignment of a subcontract or purchase order to Owner, Owner will not be deemed by virtue of this Agreement or otherwise to have any contractual obligation to or relationship with any Subcontractor. Furthermore, no Subcontractor will have any rights against Owner under

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this Agreement, whether as a third party beneficiary or otherwise. Contractor will include clauses that expressly state the concepts set forth in this Section 32.7 in each subcontract with Subcontractors.

32.8 Assignment of Subcontracts to Owner. In the event of termination of this Agreement pursuant to its terms, Contractor shall assign any or all of its agreements with Subcontractors to Owner at Owner’s request and shall ensure that each such subcontract is assignable to Owner. In the event of partial termination of this Agreement pursuant to its terms, Contractor shall assign the applicable agreements with Subcontractors to Owner at Owner’s request and shall ensure that each such subcontract is assignable to Owner

32.9 Directed Payments. From the monies paid by Owner to Contractor, Contractor shall make payment to Subcontractors, to utilities furnished and Taxes owed by Contractor, to the payment of premiums on surety bonds and insurance, and to any other purpose related to the Project. The Contractor agrees that any liquidating agreement, pass-through agreement, or other agreement between the Contractor and a Subcontractor that purports to make Owner responsible for paying a Subcontractor for work on the Project is void and unenforceable and deemed to be waived.

32.10 Neglect to Pay. Should Contractor neglect or refuse to pay promptly when due any legitimate or undisputed xxxx incurred by it pursuant to the Agreement, Owner, after giving Contractor seven (7) calendar days’ notice of its intentions so to do, shall have the right but not the obligation, to pay such xxxx by joint check made payable to Contractor and the applicable Subcontractor and such payments shall be accounted for as a payment to Contractor. Owner shall be entitled to offset such amounts against any payments thereafter becoming due to Contractor. The payment of any xxxx by Owner pursuant to the foregoing shall not be deemed to cure or waive Contractor’s default, and Owner may exercise any other right or remedy granted by the Agreement or by law or equity. Owner will not make any such payment, however, without prior consultation with Contractor concerning Contractor’s reason for refusing to pay such xxxx.

33. DISPUTE RESOLUTION

33.1 Applicability of Resolution Procedures. All claims, disputes or other matters in question between the Parties arising out of or relating in any way to this Agreement (“Disputes”) will be resolved pursuant to this Article 33.

33.2 Management Discussions. The Parties agree to make a diligent, good-faith attempt to resolve all Disputes. If the Authorized Representatives of the Parties are unable to resolve a Dispute arising under this Agreement within ten (10) calendar days after notice from one Party to the other, such Dispute will be submitted promptly to the senior executive officers of the Parties, who will meet, in person or by telephone, not later than ten (10) calendar days after the date such Dispute was submitted to them. In the event that the officers cannot resolve the Dispute within five (5) Business Days after the matter is submitted to them, then, unless otherwise agreed, the Parties will refer such Dispute to mediation proceedings under Section 33.3.

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33.3 Mediation. Provided that the Parties have been unable to resolve a Dispute pursuant to the procedures set forth in Section 33.2, the Parties will make a good faith effort to mediate a resolution of the dispute with the assistance of a qualified mediator to be chosen by agreement of the Parties. In the event that the Parties are unable to agree upon a qualified mediator, a mediator will be designated by the American Arbitration Association (“AAA”). Any such mediation will be held in accordance with the Construction Industry Mediation Rules of the AAA or by such other standards as established by the mediator. Such mediation will be held in Atlanta, Georgia or at such other site as the Parties may agree. If, despite the Parties’ good faith efforts to mediate a Dispute, such Dispute remains unresolved forty-five (45) calendar days after the first date on which such mediation commenced (or such longer period as the Parties may agree to in writing), then the Parties may pursue such rights and remedies as may be available under applicable law.

33.4 Arbitration. Should a mediation under Section 33.3 be unsuccessful, and so long as the aggregate amount of all disputed Changes, Change Order Notices, Change Order Requests, Change Orders, and other Disputes, claims, controversies or other matters disputed in good faith between the Parties at one time is equal to or less than twenty-five million dollars ($25,000,000), then all such Disputes, controversies or claims arising out of or related to the Project shall be settled by mandatory and binding “baseball” arbitration in accordance with this Section 33.4, and judgment upon the award may be entered in any court having jurisdiction thereof; provided, however, that should such aggregate amount exceed twenty-five million dollars ($25,000,000), then arbitration shall not be mandatory and the Parties may elect, by mutual agreement in writing, to have none, any or all such Disputes, controversies or claims decided by binding or non-binding arbitration, as may be agreed by the Parties. The Parties agree that they will not assert frivolous claims in bad faith in an effort to subvert the purpose of the preceding sentence, which is to establish an objective standard for distinguishing between situations in which arbitration is mandatory, and situations in which arbitration is not mandatory and will be used only upon agreement of the Parties. Any arbitration pursuant to this Section 33.4 shall be held in Atlanta, Georgia and conducted pursuant to the Uniform Arbitration Act (2000). The arbitration shall be heard by three arbitrators, who shall be appointed using the process for the selection of the members of the DRB, and who shall strictly enforce the terms and conditions of this Agreement. In the event of such arbitration, each Party agrees to produce to the other Party all non-privileged documents that such other Party considers to be related to the Dispute, including all electronic documents and data in native format. Provided that the other Party is provided a reasonable opportunity to obtain and preserve such electronic data before a Party ceases to maintain it, the requirement that data be provided in native format shall apply only so long as that electronic data is still maintained in the ordinary course of business. All such documents shall be produced at least six months before the date set for the hearing, and the initial production shall be supplemented promptly to include any additional documents that come into possession of a Party after the initial production. Each Party shall also provide to the other Party, at least forty-five (45) days before the hearing or such shorter period as the arbitrators may direct upon application of a Party (but not less than 30 days before the

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hearing), (i) a copy of all exhibits the Party will introduce at hearing, and a (ii) complete list of all witnesses the Party may call and a detailed summary of their testimony, including a written report of all expert witnesses in accordance with Fed. R. Civ. P. 26(a)(2)(B). Documents that have not previously been exchanged, and witnesses for whom proper information has not previously been provided, may not be considered by the arbitrators without a showing of good cause. The attorneys for the Parties and the arbitrators shall have the authority to issue subpoenas for the appearance of witnesses at the hearing and for production of documents (including documents in the possession of persons other than the Parties) at or in advance of the hearing. At least fifteen (15) days before the date set for the hearing, the Parties will exchange, and provide to the arbitrators, best and final offers of compromise, which the Parties may amend at any time before the tenth (10th) day after the close of the hearing. Within forty-five (45) days after the conclusion of the hearing, the arbitrators shall select the best and final offer (as amended) of one Party and that offer shall become the award of the arbitrators. At the discretion of Owner, any Subcontractor with whom the Contractor has a direct contract may be joined as a party to an arbitration conducted pursuant to this Section 33.4. Contractor shall include in each of its subcontracts, to the extent commercially practicable, a provision allowing for such joinder at Owner’s discretion, and an agreement by the Subcontractor to be bound by the results of such arbitration. Should any Subcontractor oppose the inclusion of such provisions in its subcontract, and should the negotiations between Contractor and such Subcontractor reach an impasse, Contractor will consult with Owner to determine a commercially reasonable course of action before entering into a subcontract or issuing a purchase order to such Subcontractor.

33.5 Dispute Review Board. Notwithstanding Sections 33.3 and 33.4, either Party may, at any time, submit a Dispute for interim decision by the Dispute Review Board (“DRB”) in accordance with Exhibit 17. Should a Dispute arise that involves the subject matter of Sections 8.6, 19.15, 23.3 33.5, 12.3.5 or 12.6.4, then the Parties agree to abide by any decision of the DRB relating to same on an interim basis, until the disagreement can be permanently resolved through the procedure described in this Article 33. The Parties agree that the Parties will suffer irreparable harm if either Party does not abide by a decision of the DRB relating to the Sections listed in the previous sentence, and that either Party may enforce such a decision of the DRB through an action for equitable relief including mandatory temporary injunction.

33.6 Obligations Continue. Notwithstanding the existence of any Dispute hereunder, the Parties will continue to perform their respective obligations under this Agreement unless the Parties otherwise mutually agree in writing. If during the pendency of a Dispute, the Work is in progress, Owner’s Authorized Representative will give such instructions as are necessary for the proper performance of the Work and to prevent delays pending settlement of the Dispute. Contractor will carry out such instructions and will proceed with the execution of the Work, it being understood that in so doing Contractor, if it gives Owner a written notice before carrying out such Work that Contractor is doing so under protest, is not jeopardizing any claim it may have and is not in any way renouncing or waiving any rights or recourses.

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33.7 Injunctive Relief. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement is intended to, nor shall it, prevent the Parties from seeking injunctive relief at any time as may be available under law or in equity.

33.8 Survival. The provisions of this Article 33 will survive the termination of this Agreement.

34. MISCELLANEOUS

34.1 Audit and Maintenance of Records. Owner shall have the right to audit and inspect Contractor’s records and accounts covering Fees and costs paid, payable or reimbursable hereunder for Work performed on an Open Book basis, at all reasonable times during the performance of the Work and for such time as may be required by Applicable law, but in no event less than one year, after the expiration or termination of this Agreement; provided, however, that the purpose of any such audit shall be only for verification of such costs. If an audit reveals that errors have been made in connection with the Fees, costs and other charges invoiced to Owner, then the parties will work together to correct the error and any overpayments revealed by the audit will be promptly paid by Contractor to Owner. In addition, if the audit reveals any overpayment that is greater than five percent (5%) of the amount which was actually due for the period being audited, Contractor, subject to the opportunity to dispute the audit findings in good faith, shall bear the cost of the audit.

34.2 Rights to Work Product.

34.2.1 Deliverables. All copies of the paid-up Drawings and other deliverables provided or prepared under this Agreement, including, without limitation, Systems designs, and any sealed original drawings, specifications, final project specific calculations, computer-aided design and drafting (CADD) data and files, and other engineering documents which Contractor prepares or delivers to Owner pursuant to this Agreement (“Deliverables”) shall be the property of Owner. Notwithstanding the foregoing, all Deliverables are Instruments of Service of Contractor and Contractor shall retain all of its intellectual property rights in and to such Deliverables.

34.2.2 License. Contractor hereby grants to Owner and its affiliates a fully paid-up, royalty-free, irrevocable, non-exclusive license to use, modify, display, copy, and reproduce the Deliverables to the extent Owner or its affiliates deem necessary to construct, operate, maintain, repair, or alter the Systems at the Sites. This license grant includes, without limitation, a license under all current and future patents owned by or licensed to Contractor that would be infringed by or are applicable to the Deliverables and/or any such construction, operation, maintenance, repair or alternation of the Systems at the Facilities.

34.2.3 Reuse. All Deliverables prepared by Contractor pursuant to this Agreement are not intended or represented to be suitable for reuse by Owner or

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others in connection with any air quality control system for any sites other than the Sites. Any such reuse without prior written verification or adaptation by Contractor for the specific purpose intended will be at Owner’s sole risk and without liability or legal exposure to Contractor. Owner shall defend, indemnify, and hold harmless Contractor and its employees, agents, officers and/or assigns, against all claims, losses, damages, injuries, and expenses, including attorneys’ fees, arising out of or resulting from such reuse.

34.3 Compliance with Laws.

34.3.1 Familiarity with Laws. Contractor shall be familiar with and, at all times, comply with and observe, all Applicable Laws, including all applicable federal, state, and local laws, ordinances, rules, regulations, and executive orders; all applicable safety orders, all orders, or decrees, of administrative agencies, courts, or other legally constituted authorities having jurisdiction or authority over Contractor or the Work which may be in effect now, or during performance of the Work.

34.3.2 No Fees or Commissions. Contractor has not employed or retained any company or person, other than a bona fide employee working solely for Contractor to solicit or secure this Agreement and Contractor has not paid or agreed to pay any person, company, corporation, individual, or firm other than a bona fide employee working solely for Contractor, any fee, commission, percentage, gift, or any other consideration contingent upon or resulting from the award or making this Agreement.

34.4 Authorized Representatives. Each Party will appoint its own “Authorized Representative” and notify the other Party in writing of such representative’s name, address, facsimile and telephone number within five (5) calendar days after the execution of this Agreement. Either Party may, at any time, change the designation of its Authorized Representative, provided such Party will promptly notify the other Party in writing of such change.

34.5 Confidentiality.

34.5.1 Confidential Information. From time to time, in connection with the Project and/or the Work a Party (the “Disclosing Party”) may disclose certain written information to the other Party (the “Receiving Party”) which is clearly marked or otherwise designated as “CONFIDENTIAL” (such information, the “Confidential Information”). Notwithstanding the foregoing, Confidential Information does not include (i) information which is now in the public domain, or which later enters the public domain, through no action by a party in violation of this Agreement; (ii) information which the Receiving Party can demonstrate was already in the Receiving Party’s possession at the time of its disclosure, and which was not acquired by that party directly or indirectly from the Disclosing Party on a confidential basis; or (iii) information which was acquired from

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persons not under an obligation of secrecy (whether legal or contractual) to the Disclosing Party.

34.5.2 Nondisclosure. The parties agree that the Confidential Information will be kept confidential by them during the term of this Agreement, and in addition that certain identified parts of the Confidential Information shall be kept and remain confidential for a ten (10) year period following Final Completion of each plant’s Facility. Notwithstanding the foregoing, a Receiving Party may disclose the Confidential Information to those of its officers, directors, employees, affiliates, consultants, lenders, potential lenders and advisors who need to know the Confidential Information in order to assist that party in connection with the Project or the financing thereof. Each party agrees to be responsible for the actions and disclosures of any such person with respect to Confidential Information.

34.5.3 Compelled Disclosure. If a Receiving Party becomes legally compelled to disclose any of the Confidential Information, that party will provide the Disclosing Party with immediate written notice of that requirement so that the Disclosing Party may seek a protective order or other appropriate remedy at the Disclosing Party’s risk and expense. The Receiving Party will furnish only that portion of the Confidential Information which is legally required, and the Receiving Party will cooperate with the Disclosing Party’s counsel to enable the Disclosing Party to obtain a protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information.

34.5.4 Use Restrictions. Owner will only use the Confidential Information of Contractor for or in connection with the Project and the testing, operation, maintenance and repair of the Facilities.

34.6 Owner Caused Project End Suspension and Other Owner Caused Events

34.6.1 “Owner Caused Project End Suspension” shall be deemed to have occurred if: (i) more than eighty percent (80%) of the Milestones have been completed; (ii) Owner suspends the Work pursuant to Section 23 of this Agreement, and (iii) such suspension is for reasons other than Force Majeure, the discovery and required treatment of Hazardous Substances, Differing Site Conditions or Changes in Applicable Law; acts of omissions of the Contractor that are in breach of its obligations under this agreement; or any other excused basis under this Agreement that would compel the Owner to effectuate such a suspension or delay.

Within fifteen (15) business days after delivery of the notice of the Owner Caused Project End Suspension, Owner shall deposit into a specific escrow account an amount equal to one hundred percent (100%) of the amount of retention related to completed and undisputed milestones. Contractor shall be entitled to any and all interest from the specific escrow account (the “Escrow Account”).

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Should all or a significant portion of the Work be recommenced subsequent to a Owner Caused Project End Suspension, all of the proceeds of the escrow account shall revert back to Owner upon the delivery to the contractor of an official “recommencement of the work” Notice (“Recommencement Notice”)

In the event that a Recommencement Notice has not been delivered to Contractor within one hundred and eighty (180) days after the first day of the Owner Caused Project End Suspension, then all of the Escrow Account funds, including all interest, shall be distributed to Contractor.

In addition to Contractor’s other rights and entitlements under the Agreement in connection with an Owner suspension, should a Recommencement Notice be delivered to Contractor after the expiration of the above- described one hundred eighty (180) day period, the Contractor hereby agrees and covenants that it shall return to Owner One Hundred percent (100%) of the principal amount of the escrowed funds within five (5) business days after receipt of the Recommencement Notice.

34.6.2. Owner has no duty or obligation to seek an extension of any of the time limitations imposed by Maryland Department of Environmental Conservation (“DEC”) or any other regulatory rulings or requirements related to the Facilities. Notwithstanding the foregoing, should (i) the time limits imposed by the DEC or any other regulatory agencies related to the Facilities for one or more of the Facilities be extended; (ii) Owner intentionally interferes with or frustrates Contractor’s efforts to achieve Provisional Acceptance, Substantial Completion or Final Completion within the time provided in the Approved Project Schedule; and (iii) Contractor demonstrates that, at the time of the interference, Owner had a financial incentive to pursue recovery of liquidated damages for late completion rather than allow Contractor to complete the Work within the time allowed, then for the time period of such Owner interference, Contractor shall not be assessed any liquidated damages relating to Provisional Acceptance, Substantial Completion or Final Completion within the time provided in the Approved Project Schedule.

34.7 Notices. All notices permitted or required to be given under this Agreement will be in writing and will be deemed duly given when sent by overnight courier, by personal delivery (against receipt) or on the third (3rd) calendar day following the date on which such notice is deposited, postage prepaid, in the United States mail, certified, return receipt requested. All notices will be delivered or sent to the Parties at their respective address(es) shown below or to such other address(es) as a Party may designate by prior written notice given in accordance with this provision to the other Party:

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If to Owner:

Mirant Mid-Atlantic LLC

0000 Xxxxxxxxx Xxxxxx Xxxx

Xxxxxxx, XX 00000

Attention: Xxxx X. Xxxxx

with a copy to:

Xxxxxx Xxxxxxx

Mirant Mid-Atlantic LLC

0000 Xxxxxxxxx Xxxxxx Xxxx

Xxxxxxx, XX 00000

Xxxxx Xxxx

Mirant Mid-Atlantic LLC

0000 Xxxxxxxxx Xxxxxx Xxxx

Xxxxxxx, XX 00000

Xxxxxx Xxxxxxxxx

Mirant Mid-Atlantic LLC

0000 Xxxxxxxxx Xxxxxx Xxxx

Xxxxxxx, XX 00000

If to Contractor:

Stone & Xxxxxxx, Inc.

000 Xxxxx Xxxxx Xxxx

Xxxxxxxxx, XX 00000

Attention: Xxxxxx Xxxxxxxxx, Vice President

with a copy to:

Xxxxxxx Xxxxxxx

000 Xxxxxxxxxx Xxxxxx Xxxxx

Xxxxxxxxx, XX 00000

Project Director

Mirant Air Quality Projects

000 Xxxxxxxxxx Xxxxxx Xxxxx

Xxxxxxxxx, XX 00000

34.8 Relationship of the Parties. Nothing in this Agreement will be deemed to constitute either Party a partner, agent or legal representative of the other Party, or to create any fiduciary relationship between the Parties. Contractor is and will remain an

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independent contractor in the performance of this Agreement, maintaining complete control of its personnel, workers, Subcontractors and operations required for performance of the Work. This Agreement will not be construed to create any relationship, contractual or otherwise, between Owner and any Subcontractor.

34.9 Amendments. Except as provided in Article 19, no amendments or modifications of this Agreement will be valid unless evidenced in writing and signed by a duly authorized representative of the Party against which enforcement is sought.

34.10 No Third Party Beneficiaries. This Agreement is not intended to, and shall not, create any rights in or confer any benefits upon anyone other than the Parties.

34.11 Priority Among Contract Documents. In the event of any conflict between the provisions of any of the Contract Documents, such provisions shall be given priority in the following order: (i) Articles 1 through 34 of this Agreement (ii) the Exhibits to this Agreement, and (iii) the Drawings.

34.12 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity of the remaining provisions. If any provision proves to be invalid or unenforceable, then Owner and Contractor shall replace such provisions with a valid new provision having an economic effect as close as possible to the invalid or unenforceable provision.

34.13 Remedies. To the extent that an express exclusive remedy is set forth in this Agreement for a particular subject matter, then that remedy shall be the exclusive remedy for the matter to which it applies. To the extent that a subject matter in this Agreement does not set forth an express exclusive remedy, then the parties shall retain and have all their rights at law and in equity for such subject matter.

34.14 Nonwaiver. Owner’s failure to insist upon or enforce, in any instance, strict performance by Contractor of any of the terms of this Agreement, or to exercise any rights herein conferred, shall not be construed as a waiver, or relinquishment, to any extent of its right to assert, or rely upon, any such terms or rights on any future occasion.

34.15 Interpretation. The following rules of interpretation apply to the Agreement and are by this reference incorporated into the Agreement:

34.15.1 the word “or” is not exclusive and the words “including” or “include” are not limiting;

34.15.2 the words “hereby,” “herein,” “hereof,” “hereunder” or other words of similar meaning refer to the entire document in which it is contained;

34.15.3 a reference to any agreement or other contract includes permitted supplements, amendments and restatements;

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34.15.4 a reference to a law includes any amendment or modification to such law and any rules or regulations promulgated thereunder or any law enacted in substitution or replacement therefore;

34.15.5 a reference to singular includes plural and vice-versa and each gender includes the other;

34.15.6 a reference to days, months, or years refers to calendar days, months, and years, unless Business Days are specified;

34.15.7 Article and Section headings and table of contents are only for reference and are not to be considered in interpreting this Agreement;

34.15.8 a reference to an Article, Section, Exhibit or Schedule which does not specify a particular document is to the relevant Article, Section, Exhibit or Schedule of the document containing the reference;

34.15.9 a reference to an Article includes all Sections and Subsections contained in such Article, and a reference to a Section or Subsection includes all Subsections of such Section or Subsection;

34.15.10 All terms not otherwise defined herein will have the meaning commonly ascribed thereto in the relevant industry;

34.15.11 “$” or “dollars” refers to United States dollars; and

34.15.12 unless otherwise indicated, all accounting terms, ratios and measurements shall be interpreted or determined in accordance with GAAP as in effect on date hereof.

34.16 Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes any and all prior and contemporaneous written and oral agreements, proposals, negotiations, understandings and representations pertaining to the subject matter hereof. This Agreement is to be construed without regard to any presumption or other rule requiring construction against the Party causing the Agreement to be drafted.

34.17 Representations and Warranties of Contractor. Contractor hereby represents and warrants to Owner as follows:

34.17.1 Due Organization of Contractor. Contractor is a Louisiana corporation, duly organized, validly existing and in good standing under the laws of Louisiana and has all requisite corporate power and authority to own and operate its business and properties and to carry on its business as such business is now being conducted and is duly qualified to do business in Maryland and in any other jurisdiction in which the transaction of its business make such qualification necessary.

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34.17.2 Due Authorization of Contractor; Binding Obligation. Contractor has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution, delivery and performance of this Agreement by Contractor have been duly authorized by all necessary corporate action on the part of Contractor. This Agreement is the valid and binding obligation of Contractor, enforceable in accordance with its terms

34.17.3 Non-Contravention. The execution, delivery and performance of this Agreement by Contractor and the consummation of the transactions contemplated hereby do not and will not contravene the certificate of incorporation or by-laws of Contractor and do not and will not conflict with or result in a breach of or default under any contract, indenture, mortgage, lease, agreement, instrument, judgment, decree, order or ruling to which Contractor is a party or by which it or any of its properties is bound or affected.

34.17.4 Regulatory Approvals. All governmental or other authorizations, approvals, orders or consents, if any, required in connection with the execution, delivery and performance of this Agreement by Contractor have been obtained or will be obtained in due course.

34.18 Representation and Warranties of Owner. Owner hereby represents and warrants to Contractor as follows:

34.18.1 Due Organization of Owner. Owner is a limited liability company duly organized and validly existing and in good standing under the laws of Delaware and has all requisite power and authority to own and operate its business and properties and to carry on its business as such business is now being conducted and is duly qualified to do business in Maryland.

34.18.2 Due Authorization of Owner; Binding Obligation. Owner has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder and the execution, delivery and performance of this Agreement by Owner have been duly authorized by all necessary corporate actions on the part of Owner. This Agreement is the valid and binding obligation of Owner, enforceable in accordance with its terms.

34.18.3 Non-Contravention. The execution, delivery and performance of this Agreement by Owner and the consummation of the transactions contemplated hereby do not and will not contravene the articles of incorporation of Owner and do not and will not conflict with or result in a breach of or default under any indenture, mortgage, lease, agreement, instrument, judgment, decree, order or ruling to which Owner is a party or by which it or any of its properties is bound or affected.

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34.19 Further Assurances. The Parties will execute and deliver such other instruments and documents, and take such other actions, as either Party reasonably requests to evidence or effect the transactions contemplated by this Agreement.

34.20 No Implied Waiver. Unless otherwise expressly provided herein, no waiver by either Party of any provision hereof shall be deemed to have been made unless expressed in writing and signed by such Party. The waiver by either Party of any breach of any term, covenant or condition herein stated shall not be deemed to be a waiver of any other breach, or of a subsequent breach of the same or any other term, covenant or condition herein contained.

34.21 Exhibits and Schedules. All Exhibits referred to in, and attached to, this Agreement are hereby incorporated herein in full by this reference.

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IN WITNESS WHEREOF, the Parties, intending to be legally bound, have caused this Agreement to be executed by their duly authorized officers, to be effective as of the Effective Date provided herein.

MIRANT MID-ATLANTIC, LLC		STONE & XXXXXXX, INC.

By:	/s/ Xxxxx X. Xxxxxxx	By:	/s/ X.X. Xxxxxx

Name:	Xxxxx X. Xxxxxxx	Name:	X.X. Xxxxxx

Title:	Senior Vice President, Operations	Title:	President of Fossil Power


MIRANT CHALK POINT, LLC

By:	/s/ Xxxxx X. Xxxxxxx

Name:	Xxxxx X. Xxxxxxx

Title:	Senior Vice President, Operations


MIRANT MID-ATLANTIC, LLC as Agent for MIRANT MID-ATLANTIC LLC AND MIRANT CHALK POINT LLC

By:	/s/ Xxxxx X. Xxxxxxx

Name:	Xxxxx X. Xxxxxxx

Title:	Senior Vice President, Operations

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ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT BETWEEN MIRANT MID- ATLANTIC, LLC & MIRANT CHALK POINT LLC (EACH INDIVIDUALLY AN “OWNER” AND COLLECTIVELY THE “OWNERS”) AND MIRANT MID-ATLANTIC, LLC AS AGENT FOR THE OWNERS AND STONE & WEBSTER, INC....

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