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Resolution No. 9406
i 1 RESOLUTION NO. 9406 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF 3 VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A LONG TERM SERVICE AGREEMENT BY AND BETWEEN THE 4 CITY OF VERNON AND SIEMENS DEMAG DELAVAL TURBOMACHINERY, INC. FOR REPAIR AND MAINTENANCE 5 SERVICES FOR THE MALBURG GENERATING STATION 6 7 WHEREAS, the City of Vernon (the "City") owns and operates 8 its own electric system which services the City's constituents; and 9 WHEREAS, the City constructed the Malburg Generating Station 10 within the City limits for the purpose of producing additional 11 generating capacity; and 12 WHEREAS, the Malburg Generating Station's generators, 13 turbines and other associated parts and equipment used by the City are 14 collectively referred to herein as the "Systems;" and 15 WHEREAS, the repair and maintenance of the City's Systems 16 are of vital importance; and 17 WHEREAS, the City's Light & Power Department believes that 18 Siemens Demag Delaval Turbomachinery, Inc. ("Siemens") is the only 19 vendor that can provide the necessary repair and maintenance services 20 because of its familiarity with the City's Systems and the City's 21 requirements; and 22 WHEREAS, the City Council of the City of Vernon has 23 determined that, pursuant to the provisions of subsection (a) of 24 Section 2.27 of the Vernon City Code, it is in the public interest and 25 necessity to enter into a contract with Siemens for the repair and 26 maintenance of the Systems to enhance services provided to the Vernon 27 community. 28 / / / 1 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE 2 CITY OF VERNON AS FOLLOWS: 3 SECTION l: The City Council of the City of Vernon hereby 4 finds and determines that the recitals contained hereinabove are true 5 and correct. 6 SECTION 2: The City Council of the City of Vernon hereby 7 approves the Long Term Services Agreement with Siemens, in 8 substantially the same form as Exhibit A which is attached hereto and 9 incorporated herein by reference. 10 SECTION 3: The City Council of the City of Vernon hereby 11 authorizes the Mayor or Mayor Pro-Tem to execute said Agreement for, 12 and on behalf of, the City of Vernon and the City Clerk is hereby 13 authorized to attest thereto. 14 SECTION 4: The City Council of the City of Vernon hereby 15 authorizes the City Administrator, or her designee, to make whatever 16 nonsubstantive, administrative and/or text changes, upon advice of 17 counsel, to the Agreement. 18 SECTION 5: The City Council of the City of Vernon hereby 19 directs the City Clerk, or her designee, to send one fully executed 20 Agreement to Siemens Demag Delaval Turbomachinery, Inc. 21 SECTION 6: The City Council of the City of Vernon hereby 22 authorizes the City Administrator, or his designee, to execute any and 23 all documents necessary or required to implement and carry out the 24 Agreement consistent with the terms of the Agreement approved herein 25 for, and on behalf of, the City of Vernon and to perform such other 26 acts and deeds, as may be necessary or convenient to effect the 27 purposes of this Resolution and the transactions herein authorized. 28 / / / - 2 - 1 2 3 4 51 6 7 8 9 10 11 12 13 14 15 16 171 18 MI 20 21 22 23 24 25 26 27 28 SECTION 7: The City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 4th day of September, 2007. ATTEST: M NUELA GIR N, City Clerk Name: Leonis C. Malburg Title: Mayor Ma;7nr PrQ-Tom_ - 3 - 1 2 911 MI 5 6 7 8 9 10 11 12 13 14 15 16II 17. 18 19 20 21 22 23 all 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 9406, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Tuesday, September 4, 2007, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. (SEAL) MANUELA- GI/RON, City Clerk - 4 - I ♦ � � n Siemens Demag Delaval Turbomachinery, Inc. and City of Vernon Services Agreement for the Malburg Generating Station 4963 Soto Street, Vernon, California MP Contract Number: 11-COV-06 149307.15 8/28/07 Final 01910/0038 149307.15 MAINTENANCE PROGRAM SECTIONS TITLE PAGE 1. INTERPRETATION..................................................................................................................1 2. SCOPE OF THE CONTRACTOR'S SERVICES..................................................................... 5 3. CUSTOMER'S OBLIGATIONS................................................................................................9 4. PLANNING.............................................................................................................................11 5. CORRECTIVE MAINTENANCE (MAINTENANCE OTHER THAN PREVENTIVE MAINTENANCE)............................................................................................11 6. ATTENDANCE AT SITE........................................................................................................12 7. CONTRACTOR'S STOCK PARTS........................................................................................12 8. DELIVERY, TITLE, RISK OF LOSS OR DAMAGE, AND LICENSE.....................................13 9. EMERGENCY GAS GENERATOR/TURBINE.......................................................................13 10. OPERATION OF THE EQUIPMENT.....................................................................................13 11. RECORDS AND REPORTS..................................................................................................14 12. PRICE AND PAYMENT.........................................................................................................14 13. EXECUTION TIME; RELIABILITY GUARANTEE; EMISSIONS AND PERFORMANCE...................................................................................................................15 14. LIQUIDATED DAMAGES.......................................................................................................16 15. CONTRACTOR'S WARRANTY.............................................................................................16 16. LIMITATION OF LIABILITY....................................................................................................18 17. INTELLECTUAL PROPERTY INFRINGEMENT....................................................................20 18. INSURANCE..........................................................................................................................21 19. CONFIDENTIALITY...............................................................................................................22 20. ASSIGNMENT AND SUBCONTRACTING............................................................................23 21. FORCE MAJEURE.................................................................................................................23 22. DURATION OF THE CONTRACT.........................................................................................24 23. TERMINATION.......................................................................................................................24 24. LAW AND ARBITRATION......................................................................................................25 25. ENTIRE AGREEMENT..........................................................................................................27 26. NOTICES................................................................................................................................ 27 27. WAIVERS...............................................................................................................................28 28. MODIFICATION.....................................................................................................................28 29. HEADINGS............................................................................................................................. 28 30. THIRD PARTIES....................................................................................................................28 31. SURVIVAL..............................................................................................................................28 32. ENVIRONMENTAL COMPLIANCE.......................................................................................28 33. ASBESTOS AND THERMAL INSULATION..........................................................................29 APPENDICES 1.1 Preliminary Maintenance Schedule for approximately 7.5 years (59,999 EOH) 1.2.1 Preventive Maintenance Activities - SGT-800/GTX100 X1 CS36693 and DOR 1.2.2 Activity List for VAX Maintenance Program Axial Flow Steam turbine modules MP 24 and DOR 1.3.1 Maintenance Program Activities (A-insp) - SGT-800/GTX100 1.3.2 Maintenance Program Activities (ASI-insp) - MP24-ST 1.4.1 Maintenance Program Activities (B-insp) - SGT-800/GTX100 1.4.2 Maintenance Program Activities (LO) - MP24-ST 1.5.1 Maintenance Program Activities (C-insp) - SGT-800/GTX100 1.5.2 Maintenance Program Activities (MO) - MP24-ST 2.1 Replacement Schedule 2.2 [A Overhaul] Gas Turbine INSP Consumables, SGT Tool Kit and Instruments 2.3 [B Overhaul] SGT INSP Consumables, Spare Parts and Program Parts 2.4 [C Overhaul] SGT INSP Consumables, Spare Parts and Program Parts 2.5 Preliminary List Maintenance Consumable Spare Parts for Overhauls (Steam Turbine) 3.1 Service and temporary area requirements 01910/0038 149307.15 3.2 NDT Area Requirements 5.1 Operating Statistics GTX100 and Gas Turbine Monthly Report 5.2 Steam Turbine Monthly Report 6.1 Additional Terms and Conditions for lease of Emergency Gas Turbine or modules 6.2 Emergency Modules — General Description and Daily Lease Fees 7 Additional Terms & Conditions for On Line Remote Support 8 Additional Terms and Conditions for Reliability Guarantee 8.1 List of Corrective Maintenance Spare Parts 8.2 Maintenance Program— Instrument and tool kit to SGT-800/GTX100 9 Performance Requirements 10.1 Additional Terms and Conditions for analysis of Condition Monitoring System (CMS) -data 10.2 Form of Software License Agreement 11 Field Service Rates 12 Emissions Requirements 13 Term and Cost Sheet 14 List of Customer's Manuals 15 Customer's Fuel Specifications ii 01910/0038 149307.15 Services Agreement This Services Agreement (this "Agreement") is entered into on the day of , 2007. BETWEEN Siemens Demag Delaval Turbomachinery, Inc., a company incorporated in the State of Delaware, whose registered office is at 840 Nottingham Way, Hamilton, New Jersey 08638 (hereinafter referred to as "the Contractor") AND City of Vernon, a municipality with offices located at 4305 S. Santa Fe Avenue, Vernon, CA (hereinafter referred to as "Customer"). Contractor and Customer may be referred to individually as "Party' and collectively as "Parties" WHEREAS 1) The Customer is the owner and operator of the Equipment. 2) The Customer wishes the Contractor to provide repair and maintenance services in relation to the Equipment and the Contractor is willing to supply the same on the terms and conditions of this Contract. NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties hereby agree as follows: 1. INTERPRETATION 1.1 In this Contract, unless the context otherwise requires: "Affiliate" shall mean with respect to either Party, any legal entity who directly or indirectly (through one or more intermediaries), either (i) controls such Party; (ii) is controlled by such Party; or (iii) is controlled by the same legal entity that directly or indirectly controls such Party where in each such case, "control' means the power and ability to direct, or share equally in the direction of, the management and/or policies of the Party, whether through ownership or control by proxy of more than fifty percent (50%) of the voting shares or other equivalent interests of the controlled entity, by contract or otherwise. "Consumable Spare Parts" shall mean such Spare Parts as are commonly required to be used by the Customer or operator in the day-to-day operation of the Equipment, a non -exhaustive list of which includes filter elements and associated joints and seals for fuel, lubricating oil, hydraulic oil and air filter systems, cleaning fluids for the gas turbine compressor, grease, fuses, lamps, fire extinguishant, and jointing compounds. "Consumable Spare Parts for Overhauls" shall mean the Consumable Spare Parts to be used in conducting the Overhauls for the Gas Turbines, as further described in Section 2.2.2 and Appendices 2.2, 2.3, and 2.4, and for conducting the Overhauls for the Steam Turbine, as further described in Section 2.2.2.2 and Appendix 2.5. "Contract" shall mean this Services Agreement which consists of (i) this Agreement, including any purchase orders previously issued, signed by Contractor and Customer, (ii) Appendices attached to this Agreement, and (iii) amendments executed pursuant to this Agreement. In the event of any conflict or inconsistency between any provisions contained in these documents, the documents shall take precedence in the following order: Term and Cost Sheet, (iii), (i) and (ii). "Contract Price" shall mean the price set forth in the Term and Cost Sheet attached hereto as Appendix 13, and constitutes the charges payable by the Customer to the Contractor under this Contract as specified in Article 12 Price and Payment. The Contract Price includes the payment in 01910/0038 149307.15 the amount of $11,341,850.00 made by Customer in connection with Purchase Order Number LP No. 14970 dated February 7, 2007. "Contractor's Associate" shall mean and include any directly or indirectly owned subsidiary of SIEMENS AG. "Contractor's Personnel" shall mean all supervisors, specialists, technicians, workmen, contractors, subcontractors, and laborers selected, hired, retained, or provided by Contractor, or employed by Contractor or Contractor's Affiliates, to perform any of the Services to be provided under this Contract. Contractor's Personnel includes all persons performing Services hereunder except for the Customer's employees or contractors. "Contractor's Stock Parts" shall mean a separate stock of parts supplied and owned by Contractor and stored at the Site for use by Contractor on the terms and conditions described in Article 7. "Corrective Maintenance" shall mean maintenance and repairs carried out to correct operating faults or failures in the Equipment and the repair or replacement of damaged or worn parts of the Equipment in order to restore the Equipment to operable condition, but shall not include performance of the Preventive Maintenance. "Corrective Maintenance Spare Parts" shall mean those Spare Parts listed in Appendix 8.1 that Customer is advised to purchase as an "Optional Price Adder" to the Contract Price so that they will be available as may be necessary for Corrective Maintenance. "Customer's Manuals" shall refer to all of the operations and maintenance manuals, technical publications, and service bulletins that were delivered to Customer by Contractor (or Alstom) upon completion of construction of the Plant, as updated by the addition of official written technical publications, inspection reports, and service bulletins delivered to Customer by Contractor and acknowledged in writing by Customer as being received. The Customer's Manuals constitute all of the instructions and requirements related to the operation of the Equipment. "Customer's Material" shall mean all components of the Plant other than the Equipment. "Daily attendance" shall mean activities consisting of taking routine readings and carrying out routine checks at running condition. "Effective Date" shall mean the date on which this Agreement is executed by both Parties or, if not executed by both Parties simultaneously, the date of execution by the second Party; provided, however, that Customer's payment in the amount of $11,341,850.00 shall constitute a payment of the Contract Price hereunder, although paid prior to the Effective Date hereof. "Equipment" shall mean the equipment to be maintained and repaired by the Contractor pursuant to this Contract as listed in Article 2 Scope of the Contractor's Services. "Equivalent Operating Hours EOH" shall mean Equivalent Operating Hours (EOH) calculated according to the formula set out below: SGT-800 Gas Turbines EOH = E(C),xCfxH+5xNO) EOH = Equivalent operating hours Cx = Stress factor CX = 1.0 Cf = Fuel factor Ct = 1.0 for gas according to GTI X241010E Cf = 1.5 for liquid fuel according to GTI X242004E H = Operating hours 2 01910/0038 149307.15 Equivalent operating cycles: No = E (C, x N) No = Equivalent Operating Cycles ("EOC") C, = Start and stop factor Cn= 0 normal start - trip before T7 = 300' C Cn = 1 normal start - normal stop Cn = 10 normal start - 100 to 50 % direct trip Cn = 10 normal start - 100 to 50 %, 30 sec shutdown Cn = 5 normal start - 100 to 50 % 90 sec shutdown N = Number of start / stop cycles MP24 Steam Turbine The influence of the mode of operation on the long term effect is expressed by the following equation giving the equivalent operating hours Te: Te = Teff + ns x Ts where: Te = equivalent operation hours Teff = effective operation hours ns = number of cold starts T = 20 operating hours charged for one start (i.e. unit has been down for more than 16 s hours) The calculation formula for the EOH and Te are based on the present knowledge and technical know-how and may be subject to change by mutual written agreement of the Parties. "Gas Turbines" shall mean the Gas Turbines described in Section 2.1. "Inspection" shall mean the visual or metallurgical examination or measurement or testing of parts or assemblies to establish suitability for further use. "Intervention" means a change to the operation or controls of the Equipment. "Isolation" shall mean the disconnection of the Equipment from its outside supplies including but not limited to, all AC/DC electrical supplies, gas/liquid fuel supplies, fire and gas detection suppression equipment or any other ancillary systems which might in any way preclude a safe system of work. "Limited Overhaul" is defined in Appendix 1.4.2. "Major Overhaul" is defined in Appendix 1.5.2. "Mobilize" shall mean and include the calling out of Contractor's Personnel, their preparation for departure and commencement of travel to Site. "On -Condition Inspection" shall mean that the Contractor determines the timing, nature and extent of the workscope and type of Inspection after taking into account the mechanical integrity and condition of the Equipment. 3 01910/0038 149307.15 "OEM" shall mean parts originally or subsequently provided by Contractor, Contractor's Associate, or Alstom. "Overhaul Tools" shall mean all of the tools and equipment required to perform the Preventive Maintenance described in Section 2.2, all of which shall be provided by Contractor on a temporary basis during an Overhaul as part of the Contract Price. "Performance Requirements" shall mean the standards for output and heat rate to be achieved, as further described in Appendix 9. "Plant" shall mean the Malburg Generating Station. "Preventive Maintenance" shall mean all of the inspections and overhauls of the Equipment carried out by Contractor's Personnel as described in Section 2.2 and pursuant to the schedule contained in this Contract. "Program Spare Parts" shall mean the Spare Parts to be used in conducting the Overhauls for the Gas Turbines, as further described in Section 2.2.2 and Appendices 2.2, 2.3, and 2.4, and the Consumable Spare Parts to be used in conducting the Overhauls for the Steam Turbine, as further described in Section 2.2.2.2 and Appendix 2.5. All Program Spare Parts shall be OEM. "Reliability Guarantee" shall mean Contractor's guarantee of Equipment reliability as described in Section 13.2. "Routine Maintenance" shall mean activities and tasks carried out by the Customer on a daily or other routine basis, including on a calendar basis (compressor water wash cleaning, lubrication oil sampling, etc.) or as required (filter replacement, cleaning etc.), including ongoing maintenance of the auxiliary systems due to normal wear and tear. "Services" shall mean the repair and maintenance services to be provided by the Contractor for the Equipment at the Site as specified in Article 2 Scope of the Contractor's Services. "Site" shall mean the location of the Equipment. "Spare Parts" shall mean component parts, assemblies and sub -assemblies manufactured or supplied by the Contractor or a Contractor's Associate for use as replacement parts for the Equipment or for Customer's Material. Spare Parts shall include Consumable Spare Parts, Program Spare Parts, and Corrective Maintenance Spare Parts. "Special Tools" shall mean those tools and instruments that Customer is advised to purchase as an "Optional Price Adder" to the Contract Price so that they will be available as may be necessary for Corrective Maintenance. Special Tools are listed on Appendix 8.2, options 140 and 142. The tools and instruments required for Preventive Maintenance shall be provided by Contractor on a temporary basis during an Overhaul as part of the Contract Price, and are not "Special Tools" for purposes of this Contract. "Steam Turbine" shall mean the Steam Turbine described in Section 2.1 "Technical Support Service" shall mean the Contractor's advisory service including Electronic Interrogation of Turbine Control Module. "Third Party Parts" shall mean parts, components, equipment or materials provided by Customer under the Contract which were not manufactured or supplied by Contractor or the predecessors of Contractor or which were originally supplied by Contractor or the predecessors of Contractor and subsequently repaired, serviced or otherwise modified or altered by any party not affiliated with Contractor or with a predecessor of Contractor or Customer or a contractor retained by Customer and approved by Contractor. "Year" shall mean a period of 365 days or 366 days (in the case of a leap year) from the Effective Date. 4 01910/0038 149307.15 1.2 The relationship between the Parties established by this Contract is that of independent contractors. Nothing herein shall be construed to create or give rise to any partnership, joint venture or agency relationship between the Parties. At no time during the performance of this Contract shall the Contractor or its employees and other representatives be considered to be the employees or agents of the Customer, nor shall the Customer's employees, agents or subcontractors be considered to be the employees or agents of the Contractor, even where assigned to assist the Contractor in the performance of the Services. 1.3 This Contract is written in the English language, and shall be interpreted in English by all Parties. All measurements shall be made using the American system of measurement (inches, feet, etc.). 1.4 This Contract includes the Term and Cost Sheet attached as Appendix 13. 2. SCOPE OF THE CONTRACTOR'S SERVICES. Contractor shall, in consideration of the Contract Price, undertake the following program for Preventive Maintenance, including on Site inspections and overhauls, based on Equivalent Operating Hours, by retaining the services of Contractor's Personnel. 2.1 Equipment The Equipment covered by this Contract consists of the following turbines: 2 x SGT-800 Gas Turbine units with No B0531 and B0533 and 1 x MP24 Steam Turbine with No B- 2555, including their gearboxes, generators and auxiliary and control systems and other components, as listed as part of the Activity Lists in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2. 2.2 Preventive Maintenance Unless otherwise specifically stated herein, all products and services described in Section 2.2, including all subparts, are included in the Contract Price. Contractor shall select and retain all of Contractor's Personnel, and Contractor shall be solely liable for all activities and services undertaken during the Overhauls by Contractor's Personnel. Contractor shall ensure that all of Contractor's Personnel are familiar with the Equipment and are skilled, knowledgeable, and qualified to perform the tasks that are required (a) to perform the Overhauls, (b) to achieve the standards required for satisfaction of the Emissions Requirements and Performance Requirements, and the Reliability Guarantee, and (c) to provide any assistance in Corrective Maintenance, if such additional assistance is requested by Customer. Contractor's Personnel shall remain at the Plant during their assigned times or shifts, and shall not leave the Plant for another job or to return home until Customer has approved, in writing, their departure. Customer shall approve a person's departure after the required task has been completed, or if the person's departure will not adversely affect the outage or the schedule, or after Contractor has provided a substitute person with comparable experience, skills, and knowledge. In the latter case, the Contractor shall ensure an overlap of these personnel to ensure an effective handover of responsibilities at the Plant. Inspections and overhauls This Contract includes the following inspections and overhauls: For each of the Gas Turbines (GT1 and GT2) 2 A -inspections at 30', 50' EOH 1 B Overhaul at 20' EOH 1 C Overhaul at 40' EOH For the Steam Turbine: 2 ASI (Annual Safety Inspections) at 30', 50' GT EOH 01910/0038 149307.15 1 LO (Limited Overhaul) at 20' GT EOH 1 MO (Major Overhaul) at 40'GT EOH 2.2.1 Work Management for Preventive Maintenance The Contractor shall furnish work management (expertise) for Preventive Maintenance in accordance with Appendix 1.1 maintenance schedule. The extent of the Preventive Maintenance is defined in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2. Personnel categories of Contractor's Personnel paid for as part of the Contract Price are defined in Appendices 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2 (clauses 3.1 and 3.2 thereof). These are Supervisors, Specialists, and Technical Personnel as defined in the Activities & Requirements document for each maintenance activity. Contractor's Personnel not defined in Appendices 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2 (clauses 3.1 and 3.2 thereof, including, without limitation, millwrights, mechanical fitters, and crane operators, shall be retained directly by and work under the control of and report directly to Contractor, and their costs shall be charged to Customer on a time and materials basis in accordance with Contractor's then current Service Craft Labor Rates; Extra Work or T&M Contracts, as adjusted for use in California. Those positions that are not Contractor's Personnel and are filled by Customer's employees (such as Coordinator, Electrician, and Operator) shall be paid for and under the supervision of the Customer, and shall not be deemed to be "Contractor's Personnel". Contractor shall be solely responsible for directing the Contractor's Personnel in the performance of the Services, using Contractor's best skill and attention. Contractor shall be solely responsible for all means, methods, techniques, sequences and procedures and for coordinating all portions of the Services to be provided by Contractor under this Contract. Contractor shall be responsible to Customer for the acts and omissions of Contractor and Contractor's Personnel. The date for each activity will be jointly agreed upon. 2.2.2 Gas Turbines: Consumable Spare Parts for Overhauls and Program Spare Parts and Overhaul Tools - Preventive Maintenance As part of the Contract Price, the Contractor shall provide Consumable Spare Parts for Overhauls and new or refurbished Program Spare Parts as listed in Appendices 2.2, 2.3, and 2.4 and all Overhaul Tools required for the Preventive Maintenance of the Gas Turbines in accordance with this Contract. The lists of Consumable Spare Parts for Overhauls and Program Spare Parts show the current status and such lists may be subject to modifications if required; provided, however, that Customer shall have the option to determine if it wants to purchase the Spare Parts from the modified list of Spare Parts. If Customer elects to purchase the modified Spare Parts, the price of the modifications or modified parts will be negotiated in good faith, and the Contractor shall credit the Customer for parts that have been committed or paid for. 2.2.2.2 Steam Turbine: Consumable Spare Parts and Program Spare Parts and Overhaul Tools - Preventive Maintenance As part of the Contract Price, the Contractor shall provide Consumable Spare Parts for Overhauls as listed in Appendix 2.5 and all Overhaul Tools required for the Preventive Maintenance of the Steam Turbine in accordance with this Contract. For a Steam Turbine Limited Overhaul, a limited number of maintenance Consumable Spare Parts for Overhauls will be chosen from the list in Appendix 2.5. Program Spare Parts for the Steam Turbine Overhauls are not listed on Appendix 2.5. The Program Spare Parts that are necessary for proper operation, based on experience and findings during the previous inspections and overhauls, will be offered separately at Contractor's then -current published pricing. Program Spare Parts not listed on Appendix 2.5 are not a part of the Contract Price. 2.2.3 Overhaul Tools The Contractor shall temporarily provide the necessary Overhaul Tools required for carrying out Preventive Maintenance in accordance with this Contract. Special Tools, if any, owned by the Customer and kept at the Plant shall be available for the Contractor's staff. 2.2.4 24-hour telephone support 6 01910/0038 149307.15 24 hours per day the Contractor's Personnel are available to assist Customer's operation personnel via telephone. The Customer may call an assigned telephone at any time, out of the normal working day, to obtain assistance, if there is a problem with the Equipment. If necessary, other appropriate steps will be taken with the participation of resources from the Contractor to ensure that the problem is solved as soon as possible. 2.2.5 Emergency Spare Parts In case of unforeseen events, i.e. for Corrective Maintenance, the Customer will have access to the Contractor's emergency spare parts storage of sophisticated gas turbine parts without any emergency fee. This means at Contractor's normal published prices. These parts are available on a first come, first served basis. 2.2.6 Corrective Maintenance Spare Parts for Reliability Guarantee Contractor shall be excused from payment of Liquidated Damages under the Reliability Guarantee for the number of days that lack of availability of the Corrective Maintenance Spare Parts at the Plant as and when needed for Corrective Maintenance is the direct cause of lack of reliability. The Reliability Guarantee will remain in full force and effect for every day during which reliability is not achieved for any other reason for which Contractor is liable for payment of Liquidated Damages, as described in Appendix 8. The Corrective Maintenance Spare Parts are included as an Optional Adder to the Contract Price. Customer shall have the right to use the Corrective Maintenance Spare Parts when carrying out Corrective Maintenance work. 2.2.7 Emergency gas generator/turbine and modules In case of unforeseen events, i.e. for Corrective Maintenance, the Customer will have the right to lease the Contractor's emergency gas generator/turbine according to the terms described in Appendices 6.1 and 6.2. Lease terms and other obligations are further described in Appendices 6.1 and 6.2. Emergency gas generators/turbines are available on a first come, first served basis. 2.2.8 Analyses Lubrication oil samples provided by the Customer are analyzed and appraised twice a year at a time mutually agreed between Customer and Contractor. 2.2.9 On Line Remote Support The Contractor shall design, deliver and commission a CMS System to operate in conjunction with the Customer's PI System for remote connection from the Contractor's facilities to the local control room at the Plant. The on line support is included in the Contract Price. Additional terms and conditions for support utilizing the remote connection are defined in Appendix 7. 2.2.10 Condition Monitoring System (CMS) The Customer has purchased a PI System for monitoring operations at the Plant, sized in accordance with Contractor's recommendation to fit the CMS. The Contractor will lease to the Customer the use of the CMS, for approximately $200,000 USD (included in the Contract Price), to be used as an add -on to the PI System. The Contractor shall provide regular analysis and, if requested by the Customer, operation support by using information stored in the CMS/PI System. Terms and conditions for regular analysis and operation support utilizing the CMS/PI System are defined in Appendix 10.1. The CMS shall be installed at the Plant as soon as possible, but not later than within four (4) months following the execution of this Contract. 2.2.11 Operational statistics The Contractor gathers statistics over all gas turbines with reported operation statistics. With this as a base compilation of reported data for each machine will be compared with the entire fleet and presented to the Customer. 2.2.12 Service Bulletins 7 01910/0038149307.15 The accumulated experience from operation and maintenance of the Contractor's delivered gas turbines is gathered in Finspong. By compiling and evaluating such experience, new possibilities to increase the performance, efficiency and availability of the turbines are constantly being discovered. In order to give the Customer the opportunity to share in the accumulated experience of the entire gas turbine fleet, the Contractor offers Service Bulletins. In the Service Bulletins the Contractor recommends actions in line with the latest experience in the above mentioned areas. Contractor shall deliver the service bulletins to Customer when they become available, and Customer shall sign for receipt, after which the Service Bulletins shall be part of the Customer's Manuals. 2.2.13 Reporting Within six (6) weeks after completion of an inspection/overhaul, the Contractor will provide the Customer with a written report on actions taken at the inspection/overhaul. Possible modifications and recommended actions due at the next inspection will be included in the report. 2.2.14 Technical advice Free of charge technical consultation service up to 200 hours is available during the validity time of this Contract. This includes investigations and examination for the turbine equipment concerning, for example, methods for raising performance, reducing environmentally unacceptable emissions, or avoiding certain types of corrosion. 2.2.15 Designated Project Manager The Contractor will have a designated Project Manager for this Contract. The Project Manager will be the Customer's contact for Preventive Maintenance and Corrective Maintenance within normal working day. The Project Manager is working in a team consisting of one Service and Spares Coordinator, one Application Engineer and one Sales Area Manager. 2.2.16 Additional Training To assist the Customer in reducing the turbines' outage time more easily, and to increase his understanding of "how to act" in case of an emergency, and to enable the Customer to solve minor unplanned situations himself, the Contractor offers to provide an optional extra training period of two weeks at the Plant. Contractor acknowledges and agrees that the Customer's Plant currently operates at a high degree of availability and reliability and that the Plant's operations personnel are fully qualified and trained and meet the standards required for operating the Plant. Contractor acknowledges and agrees that Customer is entitled to the benefits of the Reliability Guarantee and Contractor's other warranties, guarantees, and covenants set forth herein whether or not Customer's personnel attend any training described in this Section 2.2.16 or otherwise offered by Contractor. 2.3 If the Customer is not at any time during the continuance of the Contract the sole owner of the Equipment, the Contractor shall have the right to suspend performance of the Services until such time as the Customer has obtained and provided evidence to the Contractor of the written approval of the owner or owners to the carrying out of the Services by the Contractor on the terms of this Contract. The Customer shall keep the Contractor informed of the status of ownership of the Equipment and shall indemnify the Contractor against any claims of the owner or owners against the Contractor for the suspension of Services which may arise out of the Customer's failure to obtain the written approval of the new owners as referred to above. If such approval is not obtained within sixty (60) days following the transfer of ownership of the Equipment, Contractor may terminate for convenience by delivering ten (10) days prior written notice to the original Customer that Contractor has not received written approval from the new owner to continuation of the Services to be provided hereunder. Contractor may terminate this Contract within thirty (30) days following the last day of such 10 day notice period, if Contractor has not received the requisite consent from the new owner within the 10 day period. In the event of such termination, the provisions of Section 23.2 shall apply. 2.4 The Services to be provided under this Contract are complementary to and do not replace the obligations of the Contractor or other suppliers of the Equipment to repair or replace defective items 01910/0038149307.15 of Equipment under any applicable express warranty of the supplier in the contract for the sale and purchase of the Equipment. 2.5 The Services agreed to be provided by the Contractor in return for the Contract Price do not include the correction or repair of the Equipment or the provision or installation of Spare Parts required as a result of: (a) misuse, neglect of or damage caused to the Equipment by Customer or any third party (except the Contractor's Personnel); or (b) use of parts which have not been supplied by the Contractor or a Contractor's Associate, or predecessors of Contractor or Contractor's Associate (including Alstom), or repairs or modifications to the Equipment which have been made without the Contractor's approval; or (c) failure or delay on the part of the Customer to comply with its obligations or fulfill its responsibilities as set out in the Contract to the extent such failure actually adversely affects the Equipment or the operation of the Plant; or (d) damage resulting from operating personnel ignoring alarms or safety devices related to the Equipment or purposely rendering them ineffective; or (e) damage resulting from foreign objects (not being part of the Equipment itself) entering or impacting part of the Equipment; or (f) damage resulting from failure, malfunction or improper operation of the Plant or systems (which are not themselves the Equipment) associated with the Plant; or (g) accidents or other force majeure events as defined in this Contract. Where work is carried out by the Contractor in the circumstances referred to above, the Customer shall pay the Contractor's additional charges for labor, associated expenses and Spare Parts provided at the Contractor's standard published rates of charge and published prices prevailing at the time. 2.6 In the circumstances referred to in Section 2.5 and in any other circumstances where the Contractor considers that it is necessary to carry out repairs or provide Spare Parts which are not included within the scope of the Services to be provided by the Contractor at its own expense under this Contract, the Contractor will inform the Customer in writing (including email), along with a detailed description of the problem, the proposed solution, the risk, and the proposed timing, as soon as possible and provide the Customer with an estimate of its charges for carrying out the work and providing the Spare Parts required. Where the work is carried out by the Contractor at the request or with the consent of the Customer, the terms and conditions of this Contract shall apply thereto. If the Customer fails or refuses to have the necessary work carried out the Contractor shall have no liability to the Customer for any damage or loss that may arise in consequence. 3. CUSTOMER'S OBLIGATIONS 3.1 The Customer is responsible to supply the following manpower, services, tools and facilities at no cost for the Contractor. All licenses, permits, government authorizations and taxes required permitting the Contractor to perform the obligations defined in this Contract. Customer shall provide inspections and testing as may be required by statutory law, regulations or directives imposed by authorities. The provision of facsimile and telephone facilities as are available at Site. Necessary assistance and personnel required for carrying out Preventive Maintenance as defined in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2 and Appendices 3.1 and 3.2. 9 01910/0038149307,15 Equipment and facilities, standard tools, work shop facilities etc., of the Activities & Requirements document (also known as the Division of Responsibilities or DOR, as set forth in Appendices 1.2.1 and 1.2.2) for each maintenance activity, shall be available for the Contractor's staff. Lifting equipment, cranes, transports, electricity, water, compressed air and workshop facilities as required and as further specifically described in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2 and Appendices 3.1 and 3.2, and such other equipment as may be agreed to by the Parties during any pre -outage planning. 3.2 Records To enhance the availability of the Plant and to facilitate future improvements, the Customer shall provide the Contractor every month with an operation report. The information shall be written in to a web application or in a standard report template according to Appendices 5.1 and 5.2. The report shall be in English language. 3.3 Lube oil samples The Customer shall twice a year provide the Contractor with samples for analyses. 3.4 Corrective Maintenance Spare Parts Contractor shall have the right to use the Corrective Maintenance Spare Parts located on Site for preventive and corrective work. Contractor shall not be liable for the payment of Liquidated Damages for each day during which reliability is not achieved as a direct result of lack of one or more of the Corrective Maintenance Spare Parts that is required for repairs in order to achieve reliability. Any Corrective Maintenance Spare Parts used by Contractor for an Overhaul shall be replaced by Contractor at Contractor's cost. Any Corrective Maintenance Spare Parts used by Contractor for Corrective Maintenance may be replaced by Customer, at Customer's option and at Customer's cost. 3.5 On -Line Remote Support The Customer's obligations when utilizing the system for remote connection between the local control room of the Plant and the Contractor's facilities are defined in Appendix 10.1. 3.6 Condition Monitoring System The Customer's obligations when utilizing the CMS connection to the Customer's PI System are defined in Appendices 10.1 and 10.2 (form of software license agreement). 3.7 Safety precautions When Contractor is on Site, the Customer is obliged to take safety precautions according to the Activities & Requirements document for each maintenance program activity, as set forth in Appendices 1.2.1 and 1.2.2. 3.7.1 The Customer is obliged to allow the Contractor to carry out its activities without restriction. If the activities are carried out on Site or in a local workshop the Customer shall also provide an accessible and safe working environment complying with the applicable regulations and instructions such as the availability of sufficient work space, access, lighting, power and power outlets. 3.7.2 Moreover, for the protection of Contractor's property and for the property of the Contractor's Personnel on Site, the Customer shall take the same measures as would be adopted by it to protect his own property and personnel. 3.7.3 It is the Customer's sole responsibility to ensure that the Plant is operated substantially in accordance with the instructions in Customer's Manuals, including any obligations described in Customer's Manuals relating to the availability and use of the correct operational consumables, filters, fuels, lube oils, water, air, etc. Contractor shall, within 60 days following the Effective Date, review the Customer's Manuals located at the Plant (all of which are listed on Appendix 14), and ensure that the Customer's Manuals, including official written technical publications, inspection reports, and service 10 01910/0038 149307.15 bulletins that were issued following commissioning of the Plant, are complete and current through the date of execution of this Contract. If Contractor does not advise Customer in writing within 75 days following the Effective Date that Customer's Manuals are not complete and accurate, they will be deemed complete and accurate for purposes of this Contract (although nothing set forth herein negates Contractor's right and obligation to provide updates and revisions so that Customer's Manuals will be complete and correct). The Parties agree that the Customer's Manuals constitute all of the official instructions by which the Equipment is to be operated. The list of Customer's Manuals set forth in Appendix 14 may be updated from time to time by the addition of official written technical publications, inspection reports, and service bulletins delivered to Customer from Contractor. The official written technical publications, inspection reports, and service bulletins will be binding on Customer when Customer has signed a receipt evidencing receipt of the update from the Contractor. 4. PLANNING 4.1 The Contractor and the Customer shall each appoint a project manager as a regular contact person for a number of management tasks during the preparation of maintenance activities and fulfillment of each Party's obligations. 4.2 When a Preventive Maintenance activity is completed, the Customer shall, together with the Contractor's representatives, decide on a date for the next activity to suit the operation plan. Either Party shall give the other Party at least six (6) months written notice (including email) if a change to the previously agreed to date for the scheduled activity is requested, and the other Party shall respond to such request within two (2) weeks of receipt of the request, so that the new date is agreed to at least five months and two weeks before the new date. 4.3 If Customer requests that Contractor provide Corrective Maintenance (maintenance and repair activities that are not part of the Preventive Maintenance), the normal working week for such additional services that may be provided by Contractor at Customer's request is 50 hours a week, comprising 10 hours per day from Monday to Friday. For work performed on Site outside the Contractor's normal working hours requested by the Customer, the Contractor is entitled to charge its normal overtime published charges. 4.4 For waiting time at the Site caused by the Customer, the Contractor is entitled to charge its normal published charges for technical personnel including accompanying reasonable expenses, not to exceed 8 hours per day. 5. CORRECTIVE MAINTENANCE (MAINTENANCE OTHER THAN PREVENTIVE MAINTENANCE) 5.1 Corrective Maintenance consists of all maintenance and repair activities carried out to correct failures in the Equipment and damaged parts, other than that caused by or resulting from the execution of work performed by Contractor. Corrective Maintenance does not include Preventive Maintenance. Contractor shall not provide Corrective Maintenance (work other than Preventive Maintenance) except at the request and agreement of the Customer. The Customer has the right to complete the Corrective Maintenance with Customer's employees or agents or selected contractors, subject to the terms of the third paragraph of Section 15.5. 5.2 If the Contractor is requested by the Customer to perform any Corrective Maintenance, the Contractor will take actions to resolve the problem as quickly as possible. If such assistance involves sending Contractor's Personnel to the Plant, Contractor shall ensure that such personnel are familiar with the Equipment and are skilled, knowledgeable, and qualified to perform the required tasks. Such personnel shall remain at the Plant during their assigned times or shifts, and shall not leave the Plant for another job or to return home until Customer has approved, in writing, their departure. Customer shall approve a person's departure after the required task has been completed, or if the person's departure will not adversely affect the outage or the schedule, or after Contractor has provided a substitute person with comparable experience, skills, and knowledge. In the latter case, the Contractor shall ensure an overlap of these personnel to ensure an effective handover of responsibilities at the Plant. 5.3 The Spare Parts and all other agreed costs and expenses incurred by the Contractor as a consequence of Customer requested Corrective Maintenance under this Article 5 shall be borne by the Customer and the Customer shall place an additional order for that work. Hourly rates for additional manpower are stated in Appendix 11. 11 01910/0038 149307.15 ATTENDANCE AT SITE 6.1 The Services included in the scope of this Contract shall be carried out by qualified representatives of the Contractor attending at the Site when necessary at such times as are agreed in advance between the Contractor and the Customer. 6.2 The Contractor shall be responsible for the costs of transport and subsistence and overnight accommodation for Contractor's employees, agents, and representatives when they are at the Site for the performance of the Preventive Maintenance, and such costs are included as part of the Contract Price. 6.3 If Customer requests that Contractor's employees, agents, or representatives come to the Site to provide additional services, such as assisting in making repairs that are not part of the Preventive Maintenance, the Customer shall pay for the costs of transport and subsistence and overnight accommodation for such personnel during such period. If the personnel are already on Site for Preventive Maintenance, and Customer requests that they stay after the Preventive Maintenance is completed, in order to make further enhancements to the Plant (such as achieving better emissions or performance), the Customer shall pay for the subsistence and overnight accommodation, but there shall be no additional charge for airline transportation. The costs charged to the Customer shall be in accordance with the Contractor's then current and published Schedule of Field Rates. The terms of Section 5.2 in connection with the obligation of Contractor's personnel to remain at the Site until authorized by Customer to depart (and the criteria for Customer's approval of such person's departure) shall apply in the situation described in this Section 6.3. 6.4 The Customer shall ensure that the Contractor's representatives have full and free access to the Equipment during the visits to Site and to any records of its use kept by the Customer to enable the Contractor to perform the Services under this Contract. 6.5 The Customer shall provide to the Contractor the Customer's safety and security regulations applicable to all personnel at the Site. 6.6 The Contractor shall require its representatives while at the Site to observe the safety and security regulations of the Customer. In the event of any material non -observance of these regulations by a representative of the Contractor, the Customer shall inform the Contractor and may require the Contractor to withdraw the representative concerned from the Site. 6.7 At the end of each visit to a Site by a Contractor's Personnel, such party and the Customer shall complete and sign a Site visit record as a record of the visit, and each Party shall be entitled to a copy of it. In addition, after each visit by Contractor's Personnel to the Site, the Contractor shall within 2 weeks provide to the Customer a written report on the visit, including the reasons for the visit, the observations made by the Contractor's Personnel and the actions taken or to be taken. 7. CONTRACTOR'S STOCK PARTS 7.1 (a) The Contractor may supply Contractor's Spare Parts to the Site DDP INCOTERMS 2000, which separate stock shall be those spare parts that Contractor considers on the basis of its experience to be likely to be required for the maintenance of the Equipment. (b) Unless otherwise agreed between the Parties, the Contractor's Stock Parts shall be placed and kept by the Customer at its own risk and expense in suitable dry and secure storage at the Site. The Customer shall hold the Contractor's Stock Parts at Site as bailee for the Contractor, clearly identify it as belonging to the Contractor and insure it against all risks of loss and damage for the full replacement value as specified by notice in writing from the Contractor. (c) The Customer shall grant to the Contractor's representatives reasonable access to the Contractor's Stock Parts at reasonable times for the purpose of inspection, protection or removal. (d) The Contractor shall have the right to remove parts from the Contractor's Stock Parts at any time for use in the repair of the Equipment or in the event of failure by the Customer to keep any of them in good condition or to comply with any of its obligations under the Contract and 12 01910/0038149307.15 on termination of Contract. The Contractor may at its own expense on an exceptional basis also remove parts from the Contractor's Stock Parts at any time for use in the maintenance of other equipment located in the territory. 7.2 All Program Spare Parts which are permanently removed and replaced during the course of repairs by the Contractor pursuant to this Contract, and are requested by the Contractor for refurbishment or are at end of life cycle shall become the property of the Contractor except where otherwise agreed in writing between the Parties. 8. DELIVERY, TITLE, RISK OF LOSS OR DAMAGE, AND LICENSE 8.1 Delivery of each Spare Part or consumable specified in this Contract and its Appendices shall be DDP Plant Site, Vernon, California, USA (INCOTERM 2000). Subject to the provisions of Section 8.2 below, and except for Contractor's Stock Parts, legal and equitable title and risk of loss or damage to each Spare Part or consumable shall pass from Contractor to Customer upon delivery. 8.2 Title to any Software licensed hereunder shall remain with Contractor or its licensor. Contractor hereby licenses the Software to Customer under the terms of the Software License attached hereto as Appendix 10.2, and Customer shall, for the term of this Contract have the right of possession and use of the Software; provided, however, that if this Contract is terminated, the license for possession and use of the Software shall terminate concurrently with the termination of this Contract. Nothing in this Contract shall be construed as giving Customer any right to sell, assign, lease or in any other manner transfer or encumber Contractor's or its licensor's ownership of the Software, except that if this Contract is assigned in conjunction with the sale of the Plant, the Software shall be licensed to the new owner of the Plant without further charge or new conditions. Nothing in this Contract shall limit Contractor or its licensor from using and licensing the Software to any third party. 8.3 Contractor grants to Customer a nonexclusive, nontransferable license to utilize the Contractor's Software furnished hereunder. Such license is limited to Customer's internal use for the Equipment with which such Software is incorporated. All title and ownership of the Contractor's Software, including, without limitation, the copyright to such Software, shall remain exclusively with Contractor. Customer may make a reasonable number of backup copies of the Software for evaluation, installation, and maintenance of the Equipment. Customer shall not itself, or with the assistance of others, reverse compile, reverse engineer, or in any other manner attempt to decipher in whole or in part the logic or coherence of any Software licensed hereunder. Third party Software provided by Contractor may be subject to a separate license agreement and/or registration requirements and limitations on copying and use. 8.4 Risk of loss of or damage to Customer's Material or other property located at the Site shall remain with Customer at all times during the performance of work hereunder, except to the extent damage results from the negligent acts or omissions of Contractor and Contractor's employees and agents, as further described in Section 16.5. 9. EMERGENCY GAS GENERATOR/TURBINE In the case of unforeseen events and for Corrective Maintenance, the Customer shall have access to the Contractor's emergency gas generator/turbine according to the terms to be negotiated at the time. Emergency gas generators/turbines are available on a first come, first served basis and on such other terms as are set forth in Appendix 6.1. 10. OPERATION OF THE EQUIPMENT 10.1 The day to day operation of the Equipment shall be the responsibility of the Customer. The Contractor shall not be required to operate the Equipment and Contractor's representatives are not authorized to do so on its behalf except for the purposes of re -commissioning or, with the consent of the Customer, to change settings in the Equipment. 10.2 The Customer shall be responsible for obtaining and maintaining the permits, licenses, and authorizations necessary for the operation of the Equipment and for ensuring that the Equipment complies with applicable safety laws and other applicable laws and regulations. 13 01910/0038 149307.15 10.3 The Customer shall operate the Equipment only with qualified personnel (in accordance with Section 2.2.16) and in accordance with good and prudent engineering practices and in accordance with Customer's Manuals. 10.4 The Customer or its approved contractor shall carry out the routine maintenance of the Equipment recommended by the manufacturers of the Equipment and shall correct minor faults promptly after consultation with the Contractor's technical representatives. 10.5 10.5 Other than as stated in Section 10.4 above, the Customer shall not allow any person other than a representative of the Contractor to repair, replace or remove any part of the Equipment without the Contractor's prior written approval. 10.6 In the event of any alteration to the Equipment, the Customer shall advise the Contractor promptly in writing. If such alteration materially affects the cost to the Contractor of providing the Services under this Contract, the Parties will agree to an appropriate revision to the Contract Price and other consequential amendments to the terms of this Contract. If agreement on such revisions is not reached within 90 days of a request from a Party to negotiate in such circumstances, then either Party shall be entitled to terminate this Contract by not less than 90 days' notice in writing. 10.7 The Customer shall shut down the Equipment upon the request of the Contractor when, in the best judgment of the Contractor, continued operation would constitute a risk of substantial damage to the Equipment and/or personnel in the vicinity of the Equipment. 10.8 The Customer shall be responsible for ensuring that all lubricants, water and/or steam used in the operation of the Equipment complies with the Customer's Manuals, and failure to substantially comply with specifications as set forth in the Customer's Manuals may be determined to be improper operation. Contractor has delivered to the Customer the Customer's Manuals, including all updates, each with the appropriate date and revision number, current through the date of execution of this Contract. The Customer shall be responsible for ensuring that the fuel used in the operation of the Equipment meets the standards attached hereto as Appendix 15, which Contractor acknowledges is within the +/- 5% general requirement for gaseous fuel set forth in the Wobbe-index. 11. RECORDS AND REPORTS 11.1 The Customer shall monitor the operation of the Equipment and maintain the operating log book, in form and substance mutually agreed to, and shall within 5 days after the end of each calendar month provide to the Contractor a copy of the entries made in the operating log book during that month. 11.2 The Customer shall use commercially reasonable efforts to report promptly to the Contractor actually observed changes in operating condition, operating abnormalities, unplanned shutdowns of the gas turbine, faults and defects in and malfunctions of the Equipment. Such reports shall be, made in writing by facsimile transmission or other means of transmission approved by the Contractor. Oral reporting shall be deemed to comply with this requirement provided that it is confirmed in writing in the following 48 hours. 12. PRICE AND PAYMENT 12.1 The Customer shall pay to the Contractor the Contract Price in accordance with the provisions of the Term and Cost Sheet attached hereto as Appendix 13. The price will be in US Dollars, established using the exchange rate SEK/USD in effect as of the date of execution of the Contract by the Customer. 12.2 All invoices shall be paid within forty-five (45) days after the date of the invoice. 12.3 If there exists a good faith dispute over the amounts to be paid, Customer shall pay the undisputed amount. The disputed portion may be held in abeyance until resolution of the dispute with that portion, together with the interest charge specified in Section 12.9 below, due thirty (30) days after said resolution. 12.4 Work outside the Contractor's obligations as described in Article 2 will be charged at Contractor's standard published rates valid as stated in Appendix 11. 14 01910/0038 149307.15 12.5 The amount of the remaining unpaid balance of the Contract Price on each anniversary of the date of execution of the Contract will be subject to an annual escalation in the amount of 31/. of the then outstanding balance through September 30, 2010, and in the amount of 4% of the then outstanding balance after September 30, 2010. 12.6 Intentionally deleted 12.7 The price paid or to be paid to Contractor under the Contract does not include any federal (other than federal and state income taxes imposed on Contractor), state, or local property, license, privilege, sales, use, excise, value added, gross receipts, or similar taxes now or hereafter applicable to, measured by, or imposed upon or with respect to the transaction, the Equipment and Customer's Material, its or their sale, their value or their use, or any Services performed in connection therewith. Customer agrees to pay or reimburse Contractor for any such taxes which Contractor or its Suppliers are required to pay. 12.8 If any law, regulation or standard comes into force after the date of signature of this Contract which increases or reduces the cost to the Contractor of performing the Services under the Contract, the Contract Price shall be adjusted accordingly. 12.9 In the event that any undisputed payment provided to be made by the Customer under this Contract is not made in due time in accordance with the provisions hereof, the Contractor shall be entitled (without prejudice to other rights and remedies which it may have), upon thirty (30) days written notice, to, at its option, (i) terminate this Contract (which termination shall be treated as a termination pursuant to Article 23, Termination and subject to Section 23.5) or (ii) suspend all further work hereunder until such time as the full amounts due have been paid. The schedule for the resumed work will be established by Contractor based on its then current work load and the availability of other resources. Any past due payments shall, without prejudice to the right of Contractor to payment when due, bear interest at a floating rate equivalent to one -twelfth (1/12) of the per annum prime rate charged by Chase Manhattan Bank, New York, New York, U.S.A., as such prime rate is published on the first banking day following the date payment is due, plus an additional one-half of one percent (0.5%), payable each month or portion thereof that payment is delayed. 12.10 In the event of a suspension, the actual, out of pocket costs reasonably and properly incurred by the Contractor as a result of the suspension shall be added to the Contract Price and paid by the Customer within 30 days of invoice date. 13. EXECUTION TIME; RELIABILITY GUARANTEE; EMISSIONS AND PERFORMANCE 13.1 Execution Time for Overhauls The Contractor shall use commercially reasonable efforts to complete each Overhaul in accordance with Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2 within the Execution Times provided in the table below, to be extended if the Customer requests the Contractor to perform Corrective Maintenance. E t'it d execution time calendar days measured concurrentl from first day of Outage): Overhaul GT1 GT2 ST B / LO 19 19 5 C/ MO 22 22 21 The work shall be executed in 2 or more shifts, and as further described in Appendices 1.4.1 and 1.5.1, and Contractor shall ensure that personnel supervising or performing the Overhauls shall remain at the Plant during their assigned times or shifts, and shall not leave the Plant for another job or to return home until Customer has approved, in writing, their departure. Customer shall approve a person's departure after the required task has been completed, or if the person's departure will not adversely affect the outage or the schedule, or after Contractor has provided a substitute person with comparable experience, skills, and knowledge. In the latter case, the Contractor shall ensure an overlap of these personnel to ensure an effective handover of responsibilities at the Plant. 15 01910/0038 149307,15 13.2 Reliability Guarantee The Contractor guarantees the reliability of each of the two Gas Turbines, measured individually, of 97%, and the Steam Turbine, measured individually, of 97% in accordance with the additional terms and conditions in Appendix 8. For purposes of the Reliability Guarantee, the Turbines include their associated gearboxes, generators and auxiliary and control systems and other components, as listed as part of the Activity Lists in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1 A.1, 1.4.2, 1.5.1, and 1.5.2. If there is a failure of reliability during the time when the Reliability Guarantee is in force, and there is a need for one or more of the Corrective Maintenance Spare Parts listed in Appendix 8.1 or one of the Special Tools specified in Appendix 8.2, option 140 and 142 (collectively, the "Reliability Guarantee Parts and Tools") in order to cure the failure, and any such Reliability Guarantee Spare Parts or Tools is not located at the Plant, the number of days required to obtain the required Reliability Guarantee Spare Part(s) or Tool(s) shall not be counted as days of lack of Reliability for purposes of determining whether the Reliability Guarantee has been satisfied. Customer is not obligated to maintain the Reliability Guarantee Parts and Tools at the Plant, and it shall not be a breach of this Contract if Customer does not have any of the Reliability Guarantee Parts and Tools at the Plant when needed, and such lack of any Reliability Guarantee Parts and Tools shall not void Contractor's Reliability Guarantee, except to the extent that the lack of the Reliability Spare Parts and Tools actually causes a delay in curing the failure of reliability. In no event shall Contractor be liable for any delay caused by the lack of the Reliability Guarantee Parts and Tools. The Customer undertakes to keep the following systems in operation: CMS module 0 for the gas turbines in operation, in accordance with Appendices 10.1 and 10.2 to be operated in conjunction with Customer's PI System. 2. Remote on-line connection to Contractor in operation, in accordance with Appendix 7. 3. Operation of the Plant and daily and routine maintenance shall be carried out by qualified trained personnel as set forth in Section 2.2.16. The standards for the Reliability Guarantee, including procedures, measurements, evaluations, and Liquidated Damages are set forth in Appendix 8. 13.3 EMISSIONS AND PERFORMANCE Contractor shall provide assistance as requested by Customer to achieve the Emissions Requirements as described in Appendix 12 and Contractor shall provide assistance as requested by Customer to achieve the Performance Requirements as described in Appendix 9 at the then published Field Service Rates. 14. LIQUIDATED DAMAGES Aggregated Liquidated Damages shall not exceed 7.5% of the total amount of the Contract Price during the term of this Contract, and shall be payable on the terms described in Appendix 8. 15. CONTRACTOR'S WARRANTY 15.1 The Contractor undertakes that the Services provided by it under this Contract shall be carried out by qualified personnel, knowledgeable about and experienced with the Equipment, with due care and skill and in accordance with good and prudent industry standards. Spare Parts shall be examined prior to incorporation into the Equipment and replaced if determined to be defective or nonconforming or not appropriate for the Plant. Furthermore, any Spare Parts incorporated into the Equipment in the course of repairs or overhauls pursuant to this Contract shall, under proper use, be free from defects in material and workmanship and shall be OEM and the proper and appropriate Spare Parts for the Equipment. "Proper use" means operation and maintenance of the Equipment in accordance with the Customer's Manuals. 15.2 The Contractor's obligation under this undertaking shall be limited to repair or replacement, at the Contractor's option, and, in either event, at the Contractor's expense (and including the Contractor's personnel's time, travel, and subsistence expenses for making the repair or replacement), and shall 16 01910/0038 149307.15 apply in the event of (a) any defect in the Equipment caused by the negligence of the Contractor, its employees or other representatives in carrying out the Services, or (b) any defect in the Spare Paris, or (c) any Services provided that do not conform to the requirements of this Contract The Contractor's warranty for Spare Parts is subject to the following: (a) The Contractor's obligation shall be to remedy such defects which appear at any time before the expiry of a period of 12 months after (a) the completion of the Services rendered in connection with an Overhaul, or (b) incorporation of the Spare Parts concerned (in either case, the "Trigger Date"). (b) Notwithstanding the expiry or termination of this Contract (howsoever occasioned), the Contractor's obligation under this Article 15 to remedy such defects in respect of Services carried out by it or the incorporation of Spare Parts shall continue until the expiry of the period of 12 months from the Trigger Date, but other liabilities of any kind for defective Services and/or Spare Parts shall cease; (c) The Contractor's obligation to remedy such defects in Spare Parts which have already been incorporated into the Equipment by reason of an earlier defect in parts which they replaced shall apply for a period of 24 months after the incorporation into the Equipment of the parts which they replaced, regardless of the expiry or termination of this Contract for any reason; and (d) in the circumstances referred to above, the Contractor's obligation shall not extend to failures caused by normal wear and tear. 15.3 The Contractor's obligations and liabilities under this Article 15 shall not extend to failures or defects arising in any of the circumstances that were Customer's responsibility as set forth in the Customer's Manuals or in this Contract. Diagnostic and non-destructive examination and testing techniques employed by Contractor represent the current Contractor's techniques for detecting defects in (including indications of cracking) and evaluation of the condition of Customer's Material and the Equipment. However even these current techniques, when performed according to the standards detailed above in this Article 15, may not detect all of the defects in Customer's Material and the Equipment (including indications of cracking) and such failure shall not constitute a breach by Contractor of its warranty obligations. Customer acknowledges that Contractor will not be responsible for the consequences of undetected defects including undetected cracks. Contractor warrants that the Equipment and Spare Parts, upon delivery, shall not be subject to any encumbrances, liens, security interests, or other defects in title. In the event of any failure to conform to this warranty, Contractor, upon prompt written notice of such failure, shall defend the title to the Equipment and the Spare Parts. 15.4 The Contractor's obligation under this Article 15 is subject to the Contractor being given prompt notice by the Customer of the appearance of the defect and a reasonable opportunity to investigate and rectify it. 15.5 THE WARRANTIES SET FORTH IN ARTICLE 15 ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER STATUTORY, EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE). Correction of nonconformities in the manner and for the period of time provided above constitute Contractor's sole and exclusive liability and Customer's sole and exclusive remedy for defective or nonconforming Equipment and/or Services whether claims of the Customer are based in contract, in tort (including negligence and strict liability), or any other theory of recovery. The Contractor's liabilities and the Customer's remedies in respect of defects in the Services and any damage to the Equipment resulting therefrom whether arising from breach of contract or warranty, tort (including strict liability), negligence or any other theory of recovery are solely and exclusively as stated in this Article 15. 1? 01910/0038 149307.15 Customer assumes the entire liability and risk arising out of or resulting from Third Party Parts and Services on Third Party Parts. The warranties and remedies set forth herein do not apply to any Third Party Parts or Services on Third Party Parts, and CONTRACTOR DISCLAIMS ANY AND ALL WARRANTIES AND REMEDIES, WHETHER STATUTORY, EXPRESS OR IMPLIED, FOR OR WITH RESPECT TO THIRD PARTY PARTS OR SERVICES ON THIRD PARTY PARTS. The Contractor does not warrant the accuracy or completeness of any data downloaded by the CMS System or guarantee the Customer uninterrupted service with, the correction of any error in or elimination of any `bug' in the CMS System. Monitoring devices supplied by Contractor pursuant to this Contractor, such as but not limited to, monitors for generator condition and for steam chemistry, are intended to enhance the availability and reliability of the Equipment. These monitors normally represent state-of-the-art technology which enables users to better diagnose and control conditions within a turbine generator. While such monitors follow conditions and trends within the Equipment and thereby permit earlier detection of harmful conditions, Contractor does not warrant or represent that the use of such monitors will prevent failure or detect all harmful conditions in a turbine generator and Customer acknowledges the same. 15.6 Deleted 15.7 The warranties and remedies set forth in this Article 15 are conditioned upon: (1) Customer's receipt, handling, storage, installation, testing, operation and maintenance, including tasks incident thereto, of the Equipment and/or Customer's Material in accordance with Customer's Manuals, to the extent applicable or, in the absence of such or to the extent not applicable, in accordance with the generally accepted practices of the industry. In addition, such Equipment and Customer's Material shall not have been operated in excess of limitations specified in Customer's Manuals and not have been subjected to accident, alteration, abuse or misuse; and (2) For all warranty work, where disassembly, removal, replacement and reinstallation of Equipment, materials, structures or Customer's Material was not part of Contractor's scope of work under the Contract; Customer providing, without cost to Contractor, access to the nonconformity by disassembling, removing, replacing and reinstalling any Equipment, materials, structures or Customer's Material to the extent necessary to permit Contractor to perform its warranty obligations. (3) All warranty work being performed on a single -shift straight -time basis, 10 hours per day, 50 hours per week, Monday through Friday. In the event Customer requests correction of warranty items on an overtime or multiple shift schedule, the premium portion of such overtime or multiple shift shall be to Customer's account. (4) Customer, without cost to Contractor, making its Site facilities and personnel (to the extent consistent with personnel job classifications) available to assist Contractor in the performance of its warranty obligations. 16. LIMITATION OF LIABILITY 16.1 For the purpose of this Article 16 only: a) "Contractor" shall include the Contractor, its sub -contractors, its Affiliates and, where the context so admits, the respective servants, agents and employees of all of the foregoing. b) "Customer" shall include the Customer, its Affiliates, its co -venturers including any financiers, lenders or banks (if any), end users or ultimate owners of the Equipment (if any), and, where the context so admits, the respective servants, agents and employees of all of the foregoing. 16.2 In all cases the Parties establishing or alleging a breach of contract or a right to be indemnified in accordance with this Contract shall be under a duty to take reasonable necessary measures to mitigate the loss which has occurred providing that it can do so without unreasonable inconvenience or cost. 18 01910/0038 149307,15 16.3 NOTWITHSTANDING ANY OTHER PROVISION OF THE AGREEMENT, THE PARTIES EXPRESSLY AGREE THAT, EXCEPT FOR ANY LIQUIDATED DAMAGES PAYABLE IN ACCORDANCE WITH THIS CONTRACT, NEITHER CUSTOMER OR CONTRACTOR NOR ITS SUPPLIERS WILL UNDER ANY CIRCUMSTANCES BE LIABLE UNDER ANY THEORY OF RECOVERY, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER WARRANTY, OR OTHERWISE, FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE WHATSOEVER; LOSS OF PROFITS OR REVENUE OR LOSS OF USE THEREOF; LOSS OF USE OF PURCHASER'S MATERIAL, EQUIPMENT OR POWER SYSTEM; COST OF CAPITAL: COST OF FUEL; COST OF PURCHASED OR REPLACEMENT POWER; INCREASED COSTS OF ANY KIND; OR ANY CLAIMS OF CUSTOMERS OF CUSTOMER. NOTHING SET FORTH HEREIN NEGATES ANY LIQUIDATED DAMAGES PAYABLE IN ACCORDANCE WITH THIS CONTRACT. 16.4 Intentionally deleted. 16.5 Except to the extent caused by Customer, Contractor shall indemnify Customer for any loss, damage, liability, or judgment resulting from claims for injury to or death of any party at the Site or physical damage to property of any party that is located at the Site during Contractor's performance of the Services at the Site to the extent caused by the negligent acts or omissions of Contractor or its employees, Associates, or Affiliates in the performance of Contractor's Services under this Contract; provided however, in no event shall this indemnity provision apply to any claim by a customer of Customer for voltage or frequency fluctuation or service interruption of any kind or to any claim by any third party for failure of Customer to provide power or capacity under any contract. The liability under this Section 16.5 for damage to Customer's property shall be limited to $2.5M per occurrence and in the annual aggregate and to the extent caused by warranty non -conformity or Contractor's negligence. Contractor's indemnity shall survive the termination of this Contract, but Contractor's indemnity obligation under this Section shall not apply or relate to events or circumstances that occur after the termination of this Contract. 16.6 Except to the extent caused by Contractor or any of Contractor's Personnel, Affiliates, or Associates, Customer shall indemnify Contractor for any loss, damage, liability, or judgment resulting from claims for injury to or death of a third party or physical damage to third party property located at the Site to the extent caused by the negligent acts or omissions of Customer, its agents, contractors, employees, directors, partners and their respective employees. Customer's indemnity shall survive the termination of this Contract, but Customer's indemnity obligation under this Section shall not apply or relate to events or circumstances that occur after the termination of this Contract. "Third party property" for purposes of this Section 16.6 shall in no case include any part of the Site or the Plant in which the Customer has any interest, directly therein, whether by title, lease, pledge or otherwise. 16.7 The Customer shall indemnity and hold harmless the Contractor from and against all actions, suits, claims, demands, costs, charges and expenses (including legal costs and expenses) in respect of the Customer's Responsibilities set out in Section 16.8 below howsoever caused including, but not limited to tort, negligence, breach of statutory duty, or breach of the Contract. 16.8 Any indemnification obligation under this Contract shall be subject to the following conditions: (a) the indemnified Party shall promptly notify the indemnifying Party in writing of the claim for which it is seeking indemnification; (b) the indemnifying Party may at its sole discretion, risk and expense conduct negotiations for the settlement of such claim and any litigation or arbitration that may arise from it. (c) the indemnified Party shall not make any admission of liability or settlement which might be prejudicial to the indemnifying Party without the prior written consent of the indemnifying Party or the indemnifying Party has given written notice to the indemnified Party that it will not conduct the negotiations, litigation or arbitration to resolve such claim (d) the indemnified Party shall, at its expense as to internal personnel, but at the Indemnifying Party's expense as to out of pocket costs and expenses, provide all reasonable assistance to the indemnifying Party for its defense and/or settlement of any such claim. 19 01910/0038149307.15 (e) The indemnifying Party shall, at its sole cost and expense, and with counsel reasonably acceptable to the indemnified Party, defend and protect the indemnified Party from all costs, claims, and losses, including all costs of defense, judgment, and settlement, including, without limitation, attorneys' fees and costs, and costs of experts, witnesses, and consultants. 16.9 THE PARTIES EXPRESSLY AGREE THAT THE REMEDIES PROVIDED IN THIS CONTRACT ARE EXCLUSIVE, AND THAT NOTWITHSTANDING ANY OTHER PROVISION OF THIS CONTRACT, EXCEPT FOR ITS INDEMNITY OBLIGATIONS, UNDER NO CIRCUMSTANCES SHALL THE TOTAL AGGREGATE LIABILITY OF CONTRACTOR UNDER ANY THEORY OF RECOVERY, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER WARRANTY, OR OTHERWISE, EXCEED THE TOTAL CONTRACT PRICE PAID TO DATE TO CONTRACTOR UNDER THIS CONTRACT. 16.10 EXCEPT FOR CONTRACTOR'S INDEMNITIES AS SET FORTH IN THIS CONTRACT, AND EXCEPT AS OTHERWISE PROVIDED IN SECTION 15.2, THE LIABILITY OF CONTRACTOR AND ITS SUPPLIERS UNDER THIS CONTRACT SHALL TERMINATE NO LATER THAN TWELVE (12) MONTHS AFTER THE TERMINATION OF THE CONTRACT. 17. INTELLECTUAL PROPERTY INFRINGEMENT 17.1 Contractor will, at its own expense, indemnify, defend, and hold harmless, and, at its option settle, any suit or proceeding brought against Customer (and Customer's elected officials, employees, agents, and independent contractors) to the extent based on an allegation that any Spare Parts delivered hereunder or Services on Customer's Material or the Equipment (including parts thereof), or use thereof for their intended purpose, constitutes an infringement of any patent issued by a Patent Cooperation Treaty member country, trademark, or copyright, or violates any other proprietary interest or intellectual property right, including, without limitation, misappropriation of a trade secret. Customer shall give prompt notice in writing to Contractor of any such action or proceeding, and shall provide Contractor with authority, information, and assistance (to be furnished at Contractor's expense) in a timely manner for the defense of said suit or proceeding; provided, however, that any delay in notice shall not affect the scope of the indemnity set forth herein except to the extent of actual loss or damage caused by such delay. Contractor will pay all costs of defense, including attorneys' fees and costs and costs of witnesses and experts, and the damages awarded in any suit or proceeding so defended. Contractor will not be responsible for any settlement of such suit or proceeding made without its prior written consent, which consent shall not be unreasonably denied. The indemnity set forth herein shall survive the termination of this Contract as to Spare Parts and Services provided by Contractor or its Affiliates or Associates. In case the Spare Parts or Services on Customer's Material or the Equipment, or any part thereof, as a result of any suit or proceeding so defended is held to constitute infringement of any such patent, trademark, copyright, trade secret, or other proprietary interest or intellectual property right, or its use by Customer is enjoined, Contractor will, at Contractor's own expense, use best efforts to procure the right to continue using the Spare Parts or to provide the Services. If Contractor cannot procure such rights within a reasonable time, Contractor shall then promptly, at Contractor's expense, and with Customer's prior written approval, either: (a) replace the Spare Parts or Services with substantially equivalent non -infringing equipment; or (b) modify Spare Parts or Services so they become non - infringing, Plant long as, i in either such case, law, sovbstitution or ernmental approval, modification perm t, or warranty set forth cause the Plant to violate any, applicableg herein. 17.2 Contractor will have no duty or obligation to Customer under this Article 17 to the extent that the Spare Parts provided or Services on Customer's Material or Equipment is (a) supplied according to Customer's design or instructions wherein compliance therewith has caused Contractor to deviate from its normal course of performance, (b) modified by Customer or its contractors after delivery, or (c) combined by Customer or its contractors with items not furnished hereunder. In addition, if by reason of such design, instruction, modification or combination, a suit or proceeding is brought shall protect Contractor in the same manner 9'nst Contractor, Con actor has greed toprotectdto t he same ctt Customer under the of Section 17 1 above. atextent 17.3 THIS ARTICLE IS AN EXCLUSIVE STATEMENT OF ALL THE DUTIES OF THE PARTIES RELATING TO PATENTS, COPYRIGHTS OR TRADE SECRETS AND DIRECT OR CONTRIBUTORY INFRINGEMENT THEREOF AND OF ALL THE REMEDIES OF EITHER PARTY 20 01910/0038149307.15 RELATING TO ANY CLAIMS, SUITS, OR PROCEEDINGS INVOLVING PATENTS, COPYRIGHTS OR TRADE SECRETS. Compliance with this Article as provided herein shall constitute fulfillment of all liabilities of the Parties under this Contract with respect to patents, copyrights or trade secrets. 17.4 No right, title or interest to or in any patents, copyrights, trademarks, service marks, trade names, or any intellectual property of or held by Contractor or its Affiliates or Associates is granted hereunder. 18. INSURANCE 18.1 The Customer agrees to carry and maintain in force for the duration of this Contract and any continuation thereof the following insurance as a minimum which shall be placed with reputable and substantial insurers satisfactory to the Contractor: 18.2 Property Insurance: Throughout the duration of this Contract and until the expiration of the last of the applicable Warranty Periods, Customer shall purchase and maintain property damage insurance for the facilities at the Site. Such insurance will name Contractor and its Suppliers as an additional insured, with a waiver of subrogation, for physical loss or damage to the property at the Site (including the Equipment and Customer's Material). Coverage shall be on a 100% replacement cost basis with no exclusion for manufacturer's warranties. 18.3 Customer shall provide to Contractor certificates evidencing such coverages and shall make reasonable efforts to have all such insurance certificates endorsed to provide that Contractor shall be given thirty (30) days advance notice of cancellation or material change. Customer shall be responsible for any deductible amounts. In connection with this Contract, Contractor shall maintain insurance (or self insurance) as specified in clauses (a), (b), (c), and (d) below and shall deliver to Customer certificates evidencing such coverages and shall make reasonable efforts to have all such insurance certificates endorsed to provide that Customer shall be given thirty (30) days advance notice of cancellation or material change. Contractor shall be responsible for any deductible amounts. The insurance described in clauses (b) and (c) shall name Customer as an additional insured. (a) Worker's Compensation: Contractor shall comply with workers compensation laws (or equivalent) in each jurisdiction where work is performed, and shall maintain a Workers Compensation and Employers Liability insurance policy. If any work is to be performed on or near navigable waters, the policy shall include coverage for United States Longshoreman's and Harbor Worker's Act, Death on the High Seas Act, Jones Act, or their equivalent as required by the applicable law in the jurisdiction where such work is performed. The limits of such insurance shall be as follows: Worker's Compensation — Statutory Employer's Liability — $1,000,000 each accident and in the aggregate $1,000,000 disease each employee. (b) Commercial General Liability: Contractor shall maintain commercial general liability insurance on an occurrence basis to provide coverage for: Bodily Injury; Personal Injury and Death, Property Damage, Explosion, Collapse and Underground hazards; Contractual Liability (particularly applicable to the provisions of the Indemnity Article of this Agreement); and Products and Completed Operations, and E and O coverage with limits as follows: $1,000,000 each occurrence and in the aggregate. (c) Business Automobile Liability: Contractor shall maintain business automobile liability insurance which shall include coverage for all owned, non -owned and hired vehicles with the following limit: $1,000,000 Combined Single Limit Bodily Injury and Property Damage (d) Umbrella Liability: Contractor shall maintain umbrella liability insurance with a limit of $2,000,000 each occurrence and in the aggregate. The policy shall be excess over the 21 01910/0038 149307,15 Commercial General Liability, Business Automobile Liability, and Employer's Liability coverages. 18.4 Waiver of Subrogation Rights Notwithstanding any provision to the contrary in this Contract, the insurance described in Section 18.3 shall be primary as to all other policies (including any deductibles or self -insured retention (s)) and self insurance which may provide coverage. It is further agreed that the Customer shall procure that the insurer(s) providing coverage under Section 18.3 shall include the Contractor as additional insured and shall waive all rights of subrogation and/or contribution against, the Contractor to the extent of the liabilities assumed by the Customer under this Contract. 18.5 Proof of Insurance and Changes The Customer shall furnish to the Contractor on request, certificates of insurance as evidence of its compliance with Section 18.2 and such insurance shall also where possible provide that the Contractor shall be given not less than 30 days notice of cancellation or material change to cover. 19. CONFIDENTIALITY 19.1 The provisions of the Contract, including any proposals, shall be treated by both Parties as confidential and shall not be disclosed by either Party to any third party without the prior written consent of the other except where and to the extent that such disclosure is reasonably required by law or in connection with applications and reports to governmental authorities, the borrowing of funds, obtaining of insurance, or potential sale or assignment of any interest in this Contract permitted hereunder. Except as contemplated by the terms hereof, or in the event of litigation between the Parties hereto, or as required by applicable law or pursuant to an order entered or subpoena issued by a court of competent jurisdiction, any confidential information provided by Contractor under this Contract shall not be disclosed publicly or made available to third parties, other than such of Customer's employees, consultants, and advisors as the Customer determines to have a need to know, which shall include the City Council, without the prior approval of Contractor. Notwithstanding anything to the contrary in this Contract, Contractor acknowledges that the agenda and proceedings of the City Council are public and of public record, as are any agreements entered into by the Customer; provided, however, that the Customer shall use reasonable efforts to maintain as confidential any information of Contractor provided pursuant to this Agreement. 19.2 Subject to Section 19.3, technical information supplied by one Party to the other in connection with this Contract shall remain the property of the furnishing Party, shall be kept confidential and shall not be copied, modified, disclosed or used by the receiving Party otherwise than for the purposes of the operation, repair and maintenance of the Equipment pursuant to this Contract. When required by appropriate governmental authority, including governmental regulations, applicable law or regulation, by order of a court of competent jurisdiction or lawful subpoena (hereinafter collectively referred to as "Governmental Authority') Customer may disclose such confidential information to such Governmental Authority; provided, however, that prior to making any such disclosure, Customer will: (a) provide Contractor with timely advance written notice of the confidential information requested by such Governmental Authority and Customer's intent to so disclose; (b) minimize the amount of confidential information to be provided consonant with the interests of Contractor and its Suppliers and the requirements of the Governmental Authority involved; and (c) make every reasonable effort (which shall include participation by Contractor in discussions with the Governmental Authority involved) to secure confidential treatment and minimization of the proprietary information to be provided. In the event that efforts to secure confidential treatment are unsuccessful, Contractor shall have the prior right to revise such information to minimize the disclosure of such information in a manner consonant with its interests and the requirements of the Governmental Authority involved. 19.3 All of the intellectual property rights in data downloaded to the Contractor using the CMS System shall be the sole, proprietary, and confidential property of the Customer and shall be made available to the Customer without charge at any time and from time to time during the term of this Contract. All of such data shall be delivered to the Customer at the termination of this Contract without charge, and regardless of the reason for the termination. The Contractor hereby acknowledges the confidentiality of such data and acknowledges that use of such data is governed by the terms of 2.2 01910/0038149307.15 Section 19.1 of this Contract. Notwithstanding the provisions of this paragraph, Contractor shall have the right to use such information in aggregate statistical analyses, without identification of any data specifically associated with Customer. 20. ASSIGNMENT AND SUBCONTRACTING 20.1 With Customer's prior written consent, the whole or any part of this Contract may be transferred, assigned or subcontracted by the Contractor to a Contractor's Associate; provided, however, that Customer's consent shall not be required to transfer, assign, or subcontract to Siemens Industrial Turbomachinery AB, located in Finspong, Sweden. 20.2 The Contractor may subcontract the inspection or repair of parts of the Equipment to the manufacturers of those parts. 20.3 The Contractor shall remain responsible to the Customer for the performance of Services under this Contract by the Contractor's Associates and the Contractor's Personnel in every way as if the activities of the Contractor's Personnel were being carried out by the Contractor itself. 20.4 Customer shall have the right to assign this Contract in connection with the sale of the Plant, without obtaining the consent of the Contractor, unless the Plant is sold to (i) a direct competitor of Contractor; (ii) an entity with which Contractor is in litigation or arbitration, or (iii) an entity without the demonstrated and acceptable assurances of payment. For purposes of this Section 20.4, a "direct competitor" is the specific division of a company that is in the power operations business and to whom disclosure of Contractor's confidential and proprietary information, such as manuals or practices, would be detrimental. In the case of a large company, only the division to which this description applies will be deemed to be a "direct competitor". In the event of such sale, Customer will provide the name of the buyer and Contractor will notify Customer within five (5) business days of Contractor's receipt of such notice if the buyer is one of the entities described in this Section 20.4. In such event, Contractor shall have the right to terminate this Contract, upon 60 days' prior written notice, delivered within twenty (20) days after the sale of the Plant and assignment of this Contract to a buyer that Contractor has identified as meeting the criteria of clause (i), (ii), or (iii) of this Section 20.4. 20.5 Except as set out in this Article 20, neither Party shall be entitled to transfer, assign or subcontract the whole or any part of this Contract without the prior written consent of the other Party. 21. FORCE MAJEURE 21.1 If performance of any obligation under the Contract (other than an obligation of the Customer to make payment) resulting from or contributed to by any cause beyond the reasonable control of either Party or its suppliers or from any act of God; act of civil or military authority; act of war whether declared or undeclared; act (including delay, failure to act or priority) of any governmental authority or Customer; act of terrorism; civil disturbance, rebellion, insurrection, riot or sabotage; fire, inclement weather conditions, earthquake, flood or natural disaster; strike, work stoppage or other labor difficulty; embargo, epidemic or quarantine; railroad car, fuel or energy shortage; major equipment breakdown; delay or accident in shipping or transportation; or failure or delay beyond that its reasonable control in obtaining necessary manufacturing facilities, labor, or materials from usual sources, then that Party shall be excused from and shall not be liable for failure in performance to the extent of that prevention, restriction or delay and the time for performance shall be extended accordingly. Unless the Contract is terminated, the performance shall commence again as soon as practical. 21.2 If performance is delayed for more than 6 months by any cause referred to in Section 21.1 above and the Parties have not agreed upon a revised basis for continuing the work at the end of the delay, then either Party may after that period and while the cause of the non-performance still exists terminate the Contract by not less than 30 days' notice in writing to the other Party, in which event the provisions of Section 23 below shall apply. 2� 01910/0038 149307.15 22. DURATION OF THE CONTRACT 22.1 This Contract shall enter into effect on signature by both Parties and continue in effect until the Gas Turbine EOH Clock reaches 59,999 EOH, or such other period as may be agreed in writing between the Parties. 22.2 This Contract may be extended by Customer (including any successor thereto, so long as such successor is not an entity described in clauses (i), (ii), or (iii) of Section 20.4) for one additional term of 60,000 EOH, by written notice from Customer to Contractor at least 180 days prior to the expiration of the then existing term. The Contract Price shall be adjusted by an amount reasonably agreed to by the parties to take effect on the commencement date of the extension term. That price shall be competitive with the pricing then being agreed to by Contractor for comparable scope of services, adjusted for any increases or decreases in the scope of work in this Contract compared to other contracts entered into by Contractor at the time. 23. TERMINATION 23.1 This Contract may be terminated in any of the following events: (a) By either Party, effective immediately upon delivery of written notice to the other Party, if the other Party shall become dissolved or enter into liquidation (whether voluntary or compulsory) or become subject to or submit to any law for the relief of insolvent debtors or if a receiver, administrator or similar official shall be appointed in respect of all or any substantial part of its assets; (b) By either Party under the circumstances described in Section 21.2; (c) By Contractor, if Customer shall be unable or shall fail to pay any undisputed sum due hereunder within thirty (30) days following delivery of written notice of non-payment to Customer. The termination shall be effective on the first business day following the 30 day notice period. (d) By Contractor, upon 60 days' prior written notice, if Customer sells the Plant and assigns this Contract to (i) a direct competitor of Contractor or the affiliate of a direct competitor of Contractor; (ii) an entity with which Contractor is in litigation or arbitration, or (iii) an entity without the demonstrated and acceptable assurances of payment. The definition of a direct competitor and procedure for advising Customer of such are set forth in Section 20.4. The termination shall be effective on the first business day following the 60 day notice period. (e) By Customer, by not less than 30 days' notice in writing to the Contractor in the event that Customer ceases permanently to operate the Equipment. The termination shall be effective on the first business day following the 30 day notice period. (f) The Parties expressly agree that, in recognition of the length and the term of this Contract, the Customer has the absolute and unilateral right to terminate this Contract at any time, with or without cause, upon ninety (90) days prior written notice. If, at any time, the Customer desires to terminate this Contract, with or without cause, the Customer may deliver notice to the Contractor stating that this Contract will terminate at the end of the ninetieth (90th) day following delivery of the notice. 23.2 Upon the expiry or termination of this Contract (howsoever occasioned): (a) the obligations of the Contractor to provide the Services shall cease. (b) any Spare Parts or tools belonging to the Contractor and stored by the Customer shall be returned to the Contractor unless the Parties then agree that they shall be purchased by the Customer; provided, however, that Customer shall not be liable for Contractor's Spare Parts or tools at the Site in the event of damage or destruction. In such event, Contractor shall seek reimbursement from the insurance company. 24 01910/0038 149307.15 (c) the Customer shall pay to the Contractor any outstanding balance of the Contract Price accrued up to the date of termination and the outstanding balance of any other charges payable for Services performed or goods delivered to it up to that date. (d) In the event of a termination by Customer, Customer will be liable for the cost of any preordered parts that have not yet been delivered to the Site. At Customer's election, the preordered parts will be delivered to the Plant or Customer may request that Contractor sell the parts to a third party, in which case Contractor shall use it best efforts to sell such parts to other users and credit the amount to any amounts payable by Customer. (e) In the event of a termination by Contractor, Contractor may, at its election, either deliver any preordered parts to the Plant and receive payment therefor or hold the parts for sale to another party and not charge Customer therefor. 23.3 Intentionally deleted. 23.4 The expiry or termination of this Contract (howsoever occasioned) shall not affect or prejudice any provision of this Contract which is expressly or by implication provided to come into effect or continue in effect after such expiry or termination. 23.5 In the event of the termination of this Contract by the Customer for convenience under clause (f) of Section 23.1 above, Customer shall pay to Contractor, in addition to the amounts in clauses (c) and (d) of Section 23.2, 10% of the then outstanding balance of the Contract Price. 24. LAW AND ARBITRATION 24.1 This Contract shall be governed in all respects by the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents. Each of the Parties irrevocably consents to the exclusive personal jurisdiction of the federal and state courts located in California, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to enforce any order or any judgment of such federal or state courts located in California, such personal jurisdiction shall be nonexclusive. 24.2 Customer acknowledges that Contractor is required to comply with all applicable export laws and regulations relating to the sale, exportation, transfer, assignment, use and/or disposal of the Equipment supplied and Customer's Material Serviced under this Contract, including without limitation all export license requirements. Customer agrees that the Equipment provided and Customer's Materials Serviced under this Contract shall not at any time, directly or indirectly, be sold, exported, transferred, assigned, used or otherwise disposed of in any manner which shall or may result in any non-compliance with such export laws and regulations. It is a condition to the continuing performance by Contractor of its obligations under this Contract that compliance with such export laws and regulations be maintained at all times. 24.3 Arbitration; Waiver of Trial by Jury. (a) Agreement as to Dispute Resolution. In the event of any dispute or disagreement arising out of or related to this Contract, the performance of the Parties hereunder or otherwise in connection with any aspect of the Plant, the relationship between the Parties, or any other matter in any way connected to this Contract (including the Exhibits hereto), the Parties agree to proceed strictly in accordance with the terms of this Section 24.3. Any dispute as to the interpretation or enforceability of this Section 24.3, or the arbitrability of any dispute, shall be resolved by Qualified Arbitrators, in accordance with the terms of this Section 24.3. (b) Senior Management Negotiation. In the event of any dispute as to any matter described in Section 24.3(a) above, the aggrieved Party shall, prior to filing any formal claim, proceeding in arbitration or litigation, provide written notice ("Notice of Dispute") to the other Party. Within twenty (20) days of receipt of the Notice of Dispute, senior management of each Party shall meet in person and employ best efforts to arrive at an amicable and equitable solution or settlement. Notwithstanding the foregoing, if a Party receiving a Notice of Dispute fails or refuses to participate in such negotiation, the aggrieved Party may commence arbitration in accordance with the terms set forth herein. If the dispute is not resolved within 30 days following the delivery of the Notice of Dispute, either Party may 25 01910/0038 149307.15 submit the matter to expedited binding arbitration by serving on the other Party, and submitting to the Los Angeles office of JAMS, a demand for arbitration ('Arbitration Demand'), setting forth the nature of the claims in dispute. Such arbitration shall be held before a panel of three arbitrators agreed to by the Parties, and otherwise on the terms set forth below. Except as set forth in Section 24.3(g), such arbitration shall be the sole and exclusive means for resolving any dispute as to any matter described in Section 24.3(a) above. (c) Selection of Arbitrators. Each arbitrator shall be a retired judge or attorney who is a panelist of JAMS, without a business or personal relationship with either Party (a "Qualified Arbitrator"). The Qualified Arbitrators must agree to be available as required by the terms of this Contract and to perform in accordance with the terms of this Contract. The Parties shall, within 45 days after the Effective Date, agree to the names of three Qualified Arbitrators that may be used for purposes of dispute resolution; provided, however, that failure to agree to such names shall not affect the validity of this Contract or the enforceability of the terms of this Section 24.3. If the Parties have not previously agreed to the names of three Qualified Arbitrators at the time that a dispute arises (or one or more of the three is not available at the time that a dispute arises), they shall agree to the names of three Qualified Arbitrators (or so many as are required in order to have three available Qualified Arbitrators) within 2 business days following delivery of the Arbitration Demand. If the Parties do not agree to three Qualified Arbitrators within such time period, each Party shall select a Qualified Arbitrator and shall give written notice of such appointment to the other Party within 5 business days following delivery of the Arbitration Demand. If one Party does not select a Qualified Arbitrator, the sole selected Qualified Arbitrator shall serve as the single arbitrator. If each Party selects a Qualified Arbitrator, the two Qualified Arbitrators shall select a third Qualified Arbitrator and give written notice of such appointment to each Party within the time frame required for resolution of the matter, as set forth in Section 24.3(f). If the two Qualified Arbitrators cannot agree on the selection of a third Qualified Arbitrator within five (5) business days after their selection, they shall request that JAMS select the third Qualified Arbitrator, who shall be required to agree to perform in accordance with the terms of this Section 24.3, including the time frames set forth herein. (d) Decision. The decision of two of the three Qualified Arbitrators shall be the decision of the arbitrators and shall be binding and conclusive on the Parties. (e) Payment of Arbitrators. The Qualified Arbitrators may, in their discretion, require one Party to pay all or a percentage in excess of 50%, including attorneys' fees and the cost of the arbitration (including the cost of the Arbitrators), based on the relative merits of each Party's position on the issues. If the Arbitrators do not award the cost of arbitration otherwise, the Parties shall share equally the cost of the three Qualified Arbitrators; provided, however, that if a Party selects a Qualified Arbitrator who does not reside in the Los Angeles, California area, that Party shall be solely responsible for all additional costs incurred as a result of such a selection, including, without limitation, travel (including air fare, rental car, and taxi or other travel costs), lodging, food, and fees for hours required in order to become familiar with California law) regardless of who is the prevailing Party and regardless of any allocation of cost established by the Qualified Arbitrators and regardless of the agreement set forth herein to share equally the cost of the three Qualified Arbitrators. If a Qualified Arbitrator does not reside in the Los Angeles area, the costs incurred as a result of such a selection shall be paid by the selecting Party before any costs or fees are otherwise awarded or allocated. (f) Arbitration Procedure. The arbitration shall be administered by JAMS. Except as set forth in this Contract, the arbitration shall be governed by the JAMS Streamlined Arbitration Rules and Procedures, excluding Rule 28, as such rules exist as of the Effective Date. In addition, the discovery procedures set forth in California Code of Civil Procedure Section 1283.05 shall apply to the arbitration. The arbitration hearing shall take place not more than 60 days after service of the Arbitration Demand, and shall last no more than three consecutive days. The arbitration shall take place at a neutral location in Los Angeles, California selected by the Qualified Arbitrators. Within three business days after conclusion of the arbitration hearing, each Party shall submit a closing brief, not to exceed 15 pages. The Qualified Arbitrators shall issue a written decision within five business days after receipt of the closing briefs. The decision of the Qualified Arbitrators shall be final, binding, and conclusive on the Parties, and may be enforced in the Superior Court of the State of California for the County 26 01910/0038 149307.15 of Los Angeles. The Qualified Arbitrators shall have the power and authority to grant injunctive relief as well as damages. (g) Continuation of Work and Payments. Each Party shall be required to continue to perform in accordance with the terms of this Contract during the dispute resolution process, and neither Party shall take any steps or actions to impede the performing Party from continuing its performance hereunder. Notwithstanding any provision of this Section 24.3, any Party may apply to the Superior Court of the State of California for the County of Los Angeles for any form of injunctive relief enforcing any provision of this Contract, without the need to post a bond or other security and without the need to prove injury. (h) EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS CONTRACT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY, THAT MIGHT OTHERWISE ARISE UNDER THE FEDERAL ARBITRATION ACT OR OTHER LAW, OF ANY ISSUE RELATING TO THE ARBITRABILITY OF ANY DISPUTE, OR OF THE ENFORCEMENT OR APPLICABILITY OF ANY OF THE PROVISIONS OF THIS SECTION 24.3. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES' ENTERING INTO THIS CONTRACT. 25. ENTIRE AGREEMENT This Contract constitutes the entire agreement and understanding of the Parties with respect to its subject matter. Each of the Parties acknowledges, that in entering into this Contract, it has not relied on any oral or written representation, warranty, or other assurance (except as provided for or referred to in this Contract) and waives all rights and remedies which might otherwise be available to it in respect thereof, provided always, that nothing in this Contract shall limit or exclude any liability of a Party for fraud. 26. NOTICES 26.1 Any notice or other communication which either Party is required or permitted or wishes to give or make to the other Party pursuant to this Contract shall be in writing in the English language and shall be effected by: (a) delivering in person to the authorized representative of such other Party, as identified in this Article 26, or (b) sending it by prepaid first class mail or by reputable courier specializing in overnight delivery service to such other Party; or (c) transmitting it to such other Party by facsimile or other electronic means of data transmission (including email), with telephonic confirmation of receipt, and followed up by hard copy in the U.S. mail. 26.2 Service of such notice or other communication shall be made on the Parties at their respective addresses as follows: CONTRACTOR CUSTOMER Siemens Demag Delaval Turbomachinery, Inc. City of Vernon 840 Nottingham Way City of Vernon Trenton, New Jersey 08638 4305 Santa Fe Avenue Tel. 609-890-5112 Los Angeles, California 90058 Fax: 27 01910/0038 149307.15 Customer Service Manager Contact: Director of Light and Power, with copies to City Attorney and City Administrator Contact Name: Vincent S. Wagner Contact Name: Donal O'Callaghan Tel: 609-890-5112 Tel: 323-583-8811 X834 Fax: 609-890-5320 Fax: 323 587 7596 Email: vincent.wagner@siemens.com Email: docallaghan@ci.vernon.ca.us 26.3 A Party may change the address, fax number to which notices are to be addressed by serving notice on the other Party in accordance with this Article 26 26.4 Notices sent by mail or overnight courier service shall be deemed to be delivered on date of delivery (or failure to accept delivery), and notices sent by facsimile or other electronic means of data transmission shall be deemed to be delivered on the date of transmission so long as such date is a business day. Contractor acknowledges that weekends, holidays, and Fridays are not business days for the Customer. 27. WAIVERS The failure of either Party to enforce at any time any of the provisions of this Contract or to require at any time performance by the other Party of any of such provisions, shall in no way be construed to be a waiver of such provision, nor in any way to affect the validity of this Contract or any parts thereof, or the right of either Party thereafter to enforce each and every provision. 28. MODIFICATION No waiver, modification, or amendment of any of the provisions of this Contract shall be binding unless it is in writing and signed by duly authorized representatives of both Parties. 29. HEADINGS The headings used in this Contract are not to be construed as modifying, limiting or expanding in any way the scope or extent of the provisions in this Contract. 30. THIRD PARTIES There are no third party beneficiaries to this Contract. Nothing in this Contract shall be construed to create any duty to standard of care with respect to or any liability to any person who is not a Party to this Contract. 31. SURVIVAL The Articles numbered 15.2(b), 16, 17, 19, and 23.2 through 23.5, and 24 through 31 shall survive the termination, cancellation or expiration of this Contract, in addition to such other provisions of this Contract which by their nature are intended to survive the termination, cancellation or expiration of this Contract. 32. ENVIRONMENTAL COMPLIANCE Customer recognizes that the performance of Services at the Site may involve the generation of hazardous waste as such term is defined by the laws of the United States, the laws of the state in which the Site is located and the rules or regulations issued thereunder as are now in effect or hereafter amended from time to time (such generated hazardous waste being herein referred to as "Hazardous Waste"). Customer shall at its expense furnish Contractor with containers for Hazardous Waste and shall designate a waste storage facility at the Site where such containers are to be placed by Contractor. Customer shall handle, store and dispose of Hazardous Waste in accordance with applicable federal, state and local laws, rules, regulations and ordinances. Customer shall reimburse Contractor for additional costs, if any, incurred in complying with any such laws, regulations, rules and/or ordinances. 28 01910/0038 149307,15 Contractor shall have no responsibility or liability with regard to any Hazardous Waste which it does not know or have reason to know will be generated in the performance of the Services, and Customer shall be responsible for pollution and environmental impairment arising from the Customer's property, the Equipment and the Services. 33. ASBESTOS AND THERMAL INSULATION The terms "Asbestos" and "Presumed Asbestos Containing Material" shall have the meanings set forth in United States Code of Federal Regulations Chapter 29 Section CFR 1926.1101 et seq. (1) The Customer, by allowing access to the Site, thereby warrants, represents, and certifies that any areas there associated with the Contractor's scope of work, including, without limitation, areas of ingress and egress thereto (the 'Work Areas") either (a) are free of asbestos or asbestos containing materials (collectively "ACM"), or (b) any ACM there present is lawfully abated and conspicuously and specifically marked as asbestos or ACM. (2) Prior to Contractor's commencement of Services at the Site: (a) The Customer shall, at Customer's expense remove all thermal insulation, sprayed -on surfacing material, and/or Presumed Asbestos Containing Material ("PACM") the disturbance of which could occur in or removal of which is required for the performance of the Services; and, (b) The Customer shall ensure that any areas where any activities involving the abatement or removal of thermal insulation or ACM shall be conspicuously identified, posted and isolated, all as required by applicable law. CUSTOMER EXPRESSLY ACKNOWLEDGES AND AGREES THAT SIEMENS IN PERFORMING THE SERVICES AND PERMITTING EMPLOYEES TO ENTER THE WORK AREAS IS RELYING UPON THE COVENANTS, AGREEMENTS, WARRANTIES, CERTIFICATIONS AND REPRESENTATIONS MADE BY CUSTOMER ABOVE. Without limiting its other rights and remedies Contractor shall not be obligated to commence or may stop any work in any Work Areas unless fully satisfied that the Purchaser is in compliance with Paragraph (1) above and this Paragraph (2), and shall be entitled to an equitable adjustment in the schedule, price and other provisions of this Contract affected thereby or otherwise affected by Customer's non-compliance. (3) In no event shall Contractor be obligated to install, disturb, handle, or remove any thermal insulation, sprayed -on surfacing material, or PACM except as specifically agreed in writing by Contractor and only after Contractor has been provided acceptable chemical analyses verifying that the same are not ACM. (4) Contractor does not represent that it is licensed to abate ACM. Where the Services include activities such as handling, modification, removal, or reinstallation of generator wedges, packing, or high temperature gaskets (such materials herein "GPW"), then, and unless Contractor is provided satisfactory written evidence that such GPW is not ACM, Contractor shall be obligated only to the extent (a) such activities do not require a permit, license, or authorization, (b) such activities are not likely to generate airborne asbestos fibers, and (c) all such GPW is non -friable. In all other cases, such activities shall be Customer's responsibility and Contractor shall be entitled to an equitable adjustment in the schedule, price and other pertinent affected provisions of this Contract should the same not be performed in a timely manner. The disposal of any GPW or scrap or waste material resulting from its disturbance or removal shall in all cases be the Customer's responsibility. (5) Customer shall defend, indemnify and hold Contractor harmless against any and all claims, demands, damages, losses, liabilities, fines, penalties, costs or expenses, including without limitation any clean up or remedial measures arising out of, connected with, or resulting from the Customer's failure to comply with the provisions of this Article 33. 29 01910/0038 149307.15 IN WITNESS WHEREOF this Contract has been executed by the duly authorized representatives of the Parties as follows: FOR CONTRACTOR FOR CUSTOMER Company Name: Siemens Demag Delaval Turbomachinery, Inc. City of Vernon Signature Print Name: Title. - Date: 30 01910/0038 149307.15 Maiburg Generating Station — City of Vernon Final Contract Document List - Appendices August 24, 2007 List of Appendices Tab App. # Subject P s Comments 1 1.1 Preliminary Maintenance Schedule for approximately 7.5 years 59,999 EOH 2 2006.06.12 2 1.2.1 Preventive Maintenance Activities — SGT-800/ GTX100 X1CS36693 and DOR 26 2006.06.13 3 1.2.2 Activity List for VAX Maintenance Program Axial Flow Steam turbine modules MP 24 and DOR 26 2005.11.15 4 1.3.1 Maintenance Program Activities (A-insp) — SGT-800/GTX100 2 2006.06.13 5 1.3.2 Maintenance Program Activities (ASI-insp) — MP24- ST 3 2006.06.13 6 1.4.1 Maintenance Program Activities (B-insp) — SGT-800/GTX100 4 2006.06.12 7 1.4.2 Maintenance Pr ram Activities LO — MP24-ST 4 2006.06.13 8 1.5.1 Maintenance Program Activities (C-insp) — SGT-800/GTX100 3 2006.06.13 9 1.5.2 Maintenance Pro ram Activities MO — MP24-ST 3 2006.05.09 2.2 [A Overhaul] Gas Turbine INSP Consumables, SGT Tool Kit and Instruments 1 2005.11.03 11 12 2.3 [B Overhaul] SGT INSP Consumables, Spare Parts and Program Parts 4 2005.11.03 13 2.4 [C Overhaul] SGT INSP Consumables, Spare Parts and Program Parts 5 2005.11.03 14 2.5 Preliminary List Maintenance Consumable Spare Parts for Overhauls Steam Turbine 4 -- 1s 3.1 Service and temporary area requirements 3 2003.05.19 16 3.2 NDT Area Re uirements 1 2001.08.29 Operating Statistics GTX100 and Gas Turbine Monthly Report 3 -- 18 5.1 19 5.2 Steam Turbine Monthly Report 3 --- 26 9 71 Performance Requirements 2 2007.07.17 ei eei.iae9m 29 Field Service Rates 3 2007 Rates 30 ;12 32 Emissions Re uirements Lis#if=TBA 2 2007.07.17 33 15 Customer's Fuel Specifications 6 2005.10-04 Last printed 24/0&2007 15:57:45 VSw Ij SIEMENSService PAppendix number Edition Product Information D Appendix 1.1 City of Vernon Date Page 2007-08-15 1 Gil Preventive Maintenance Maintenance Schedule SGT-800 PRELIMINARY SCHEDULE FOR APPROXIMATELY 71/2 YEARS PLANNED SERVICE AND MAINTENANCE This maintenance contract is based on the following operation profile per gas turbine and year: Operation hours/year 7800 Number of start/stops per year 26 Number of abnormal start/stops 1 Corresponding EOH 7920 Based on the operation so far and the mentioned operation profile the following preliminary preventive maintenance schedule applies: 7800 20600 28400 36200 44000 51800 59600 63400 1,00 1, 00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 26 26 26 26 26 26 14 1 1 1 1 1 1 1 7980 7980 7980 7980 7980 7980 3919 16180 24160 32140 40120 48100 56080 59999 1 2 g 7800 7800 4 5 7800 7800 6 7800 End 3800 This schedule is approximate and intended for illustrative purposes only. The expected 20,000 EOH will occur around/about February/March 2008 and the `B' outage is being planned to occur at that time following the pre -outage planning meetings with the responsible MGS plant personnel. We reserve all rights in this docunent and n the irFormation contained titereir. Reproduction,© Siemens Demag Delavai Turborrachinery Inc use or disclosure to third parties wMW e) ress authority is strictly forbidden. Issued by: ajul Checked by. Approved by: 9 / " "'11 SIEMENS Service Product Information Document number Edition Appendix 1.1 Date Page 2007-08-15 2 (2) Preventive Maintenance Maintenance Schedule SGT-800 Year after start This chart is `Typical' and since the first A-insp has taken place in November 2007, is not part of this contract. It is shown only for informational purposes. The first outage will be the B-overh shown at 20000 EOH. Therefore, years after start are actually in line with the actual plant start-up and not the contract start. It is recommended that a certain activity take place within a period of 1000 EOH after passing the EOH specified in the chart above. The date for each maintenance activity shall be mutually agreed between the parties well in advance typically during the pre -outage scheduling meeting. The Supplier shall have the right to adjust this schedule and scope of Preventive Maintenance activities due to modified operating profile and/or any corrective maintenance activities carried out. We reserve all rights in this document and in the iitormation contained therein. Reproduction. use or disdosure to third parties without express authority is atdctly forbidden. © Siemens Demag Delaval TurbomeoNnery Inc 2 Template Prooram Handbook GTXtOO-a Aw 0 0 n CD c a rL _. 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O 1 Ai N cn LE CD ((DD C c ry 00 tr O IN 0 N Template AtlAe_I-d d 3 d 1 1 CD (O OD V O 041 GW N -2 O Q < < o n < < ro Cr fA 3 3. fMD 3. 0. 3 3 N ) p N 'o �; (D2 " a. o 2) 3 3.' .�' .�' ro m o c N o 3 3 � 3 c° Gt O -„ 3 -„ 3 3 cD 'r C 7 dor :3 0ro y N G .�., ? < N 3 0 _ _ O M. O � y' 3 n N N 0 .p0. W M o ' � 2) O p) 7 g ro w ro <v N A co ro N v 3 O M (n 3 m N m A s :✓1 (D `$ a (D 3 m 0) ° < a, 0 o 0. O p j Q' `z N y n CD y 7 ro w (D .. O ° *z v ° c'D O 7r m O p R1 ro p) aEF y j 6<:? N N o m a (rod o 7 0 in rt O 3 N 3 O 7 O ro p) 3 N -Oi. N ro X X ( cw n 4 V V ro O 7: m m -► ❑ ❑11, o❑ 'O C n 0 z 0 aroi n n r4 r4 n A r4 A nnn z m 3 m z Mo d OF r T 7 c) CD Cu 7 Si wo u W, CD CD C Q n C z I,3 Appendix 1.3.1 SIEMENSService Product Information "'curve u" Edlti n Vernon fete Pape 2006-06-13 1 (2) Preventive Maintenance Maintenance Plan Activities SGT-8001 GTX100 Standard document —may be changed without previous notice Activities and requirements level A (10' equivalent operating hours or 500 equivalent operating cycles, whichever comes first, 30'equivalent operating hours or 1500 equivalent operating cycles, whichever comes first, 50' equivalent operating hours or 2500 equivalent operating cycles, whichever comes first, 70' equivalent operating hours or 3500 equivalent operating cycles, whichever comes first, 90' equivalent operating hours or 4500 equivalent operating cycles, whichever comes first, and 110' equivalent operating hours or 5500 equivalent operating cycles, whichever comes first or at least every second year) 1. Standard down time Standard down time inclusive cooling down is 3 days for a level A inspection. The estimated downtime is based upon 12 working hours/day and on the fact that all spare parts needed are available before the beginning of activities. Moreover, it will depend on the finding following the boroscope inspection and observations during test before shut down as well as on additional activities ordered by the client. Level A maintenance can be carried out at any favourable period allowed by the operation conditions. Therefore Siemens must be informed well in advance in order to plan the necessary personnel and spare parts. 2. Basic scope of work For detailed information see Maintenance Activity List, document 1CS36693 • Site installation, check of tools and spare parts. • Meeting with client, review of operation incidents and reports. • Start test (if in stand by), check of start sequences and performance readings. • Final report writing 3. Personnel 3.1 Supervisors, specialists and technical personnel • Commissioning engineer • Quality engineer We reserve all rights in this docvnent and in the information oonteined therein. Reproduction, use or disdosurs to third parties without express authority is strictly forbidden. 0 Siemens Industrial Turbomachinery AB Issued by: celil Checked by: Approved by: SIEMENSService Product Information xxlcslsoa6 Edition Date Page 2006-06-13 2 (2) Preventive Maintenance 3.2 Additional personnel • 1 Millwright • 1 Operator, as required Maintenance Plan Activities SGT-800 / GTX100 4. Main means and facilities 4.1 Spare parts, special tools and instruments • Spare part kit for Level A • Special tools and instruments 4.2 Standard tools, workshop facilities etc. • Specific tools originally delivered with the unit • Standard hand tools as required • Cleaning products • Office and sanitary facilities 5. Safety precautions All precautions in order to avoid personnel injuries and equipment damage are to be ensured, among which are: • Training -if necessary- in order to comply with local safety regulation or plant activity. • Availability of first aid and rescue equipment. • Availability of standard electrical and mechanical safety equipment e.g. rubber gloves and carpet, helmet, skin gloves, grinding glasses, welding screens etc. • Rotor turning motor(s) must be switched off and locked. • M.V. and L.V. equipment's must be switched off, locked and earthen according to applicable safety standards. • Main circuits such as liquid fuel and gas fuel, lubrication oil, steam, propane gas bottles (if applicable), fire extinguishing system etc. must be shut off and locked etc. Note: The above safety precaution list is not limited and the customer is required to provide all necessary additional assistance to the Siemens personnel in order to fulfil its mission in safe condition We reserve all rights in this document and in the 0 Kormation contained therein. Reproduction, use or disclosure to third parties without express authority is strictly forbidden. ® Siemens Industrial Turbomachinery AS /_? A_J �J Appendix 1.3.2 SIEMENSService Product Information xIcs20003 Edith Vernon Date Page 2006-06-13 1 (3) Preventive Maintenance Maintenance Program ST Activities Standard document — may be changed without previous notice Activities and requirements, level "ASI" (Annual Safety Inspection) 1. Standard down time Standard down time is 3 working days for a level ASI inspection. The estimated down time above is based upon S working days/week,12 hours/day. It is assumed that all required spare parts are available before the beginning of activities. Moreover, it will depend on the findings following visual inspection and observations during test before shut down as well as on additional activities ordered by the customer. Level "ASI" maintenance can be carried out at any favourable period allowed by the operation conditions. Therefore Siemens must be informed well in advance in order to plan the necessary personnel. 2. Basic scope of work More detailed information is to be find in the main activity list, supplied by the Service Execution Centre in Finspong, Sweden. • Checks for deviations from normal turbine behaviour and visual inspection. • Shut down. • Stroke test, emergency stop valve and check valves • Linearity test, control valves • Leakage test, control valves • Test of tripping devices (switches and transmitters) • Function and logic test of hydraulic oil system • Function and logic test of lube oil system • Gear box inspection (through the inspection cover) • Visual inspection of earth grounding device • Generator inspection* • Start up We reserve all rights in this doeunent and in the information contained therein. Reproduction, use or disclosure to third parties without aWass authority is stdctly forbidden. issued by: Johanna Akesson Checked by: Approved by: ' The Generator activities are provided by gas turbine activities and requirements in a combined cycle application and are in those applications not to be considered. Service Product Information pocument 000 Edition SIEMENSxlcs2oao3 6 Date Pege Vernon 2006-06-13 2 (3) Preventive Maintenance Maintenance Program ST Activities 3. Personnel 3.1 Advisors, specialists and technical personnel • Commissioning Engineer • Generator Inspector 3.2 Additional personnel • 1Operator • 1 Mechanical Fitter • 1 Electrical Engineer • 1 Instrument Engineer 4. Main means and facilities 4.1 Spare parts, special tools and instruments • Additional specific tools and instruments (depending on scope of work) 4.2 Standard tools, workshops facilities etc. • Standard tools as required • Cleaning products • Office and sanitary facilities 5. Safety precautions All precautions in order to avoid personnel injuries and equipment damage are ensured, among which are: • On site safety orientation in order to comply with local safety regulation or plant activity. • Availability of first aid and rescue equipment. • Availability of standard electrical and mechanical safety equipment such as, but not limited to, rubber gloves, fire carpet, helmet, gloves, safety goggles, welding screens etc. • If the external gas and/or steam net are pressurized, two shut off valves between the external net and the plant must be in a closed position. Between the two shut off valves, there must be a drain valve that is locked in an open position. We reserve all rigtus in this document and in the information contained therein. Reproduct on, p Siemens Industrial Turbomachinery AB use or disclosure to third parties without express authority is stricuy forbidden. ') 1/1,-V Service Product Information Document number Edition SIEMENSXlCS20003 6 Vernon Die Page 2006-06-13 3 (3) Preventive Maintenance Maintenance Program ST Activities • M.V. and L.V. equipment must be switched off, locked and earthed according to applicable ISO or VDE standards • Main circuits such as: Liquid fuel and gas fuel, lubrication oil, steam, propane gas bottles (if applicable), fire fighting systems etc. must be shut off and locked etc. Note: The safety precautions are not limited tot he list above. The customer is required to provide all necessary additional assistance to the Siemens' personnel in order to fulfil its mission in safe condition We reserve all rights in this document and in the information contained therein. Reproduction, use or disclosure to third parties without express authority Is strictly forbidden- 0 Siemens industrial Turbomachinery AB p rw Appendix 1.4.1 Service Product Information owmentnu04 Edition SIEMENSX1DCS197 6 Vernon owe Page 2006-06-12 1 ) Preventive Maintenance Maintenance Plan Activities SGT-800 / GTX100 Standard document —maybe changed without previous notice Activities and requirements level B (20' equivalent operating hours or 1 000 equivalent operating cycles, whichever comes first and 60' equivalent operating hours or 3 000 equivalent operating cycles, whichever comes first and 100' equivalent operating hours or 5 000 equivalent operating cycles, whichever comes first.) 1. Standard down time Standard down time, inclusive cooling down, is according to table 1 for a level B overhaul. Table 1: Alternative Expected down time (calendar days) incl. cooling down 1-shift 25 days* 2-shift 19 days** 2-shift, turbine module and turbine stator 1 15 days*** • based on 10 hours work per day, 6 working days/week •* based on work in two shifts and 10 working hourstshift , 6 working days/week based on work in two shifts and 10 working hours/shift, 6 working days/week, and use of spare turbine module and spare turbine stator 1 The estimated downtime is based on the fact that all spare parts needed are available before the beginning of activities. Moreover, it will depend on the finding following the Boroscope inspection and observations during test before shut down as well as on additional activities ordered by the client. Level B maintenance can be carried out at any favourable period allowed by the operation conditions. Therefore Siemens must be informed well in advance in order to plan the necessary personnel and spare parts. 2. Basic scope of work • Site installation, check of tools and spare parts • Meeting with client, review of operation incidents and reports • Start test (if in stand by), check of start sequences and performance readings • For further detailed information see Maintenance Activity List, document 1CS36693 • Final report writing we reserve all rights in this dowment and in the information contained therein. Reproduction. © Siemens industrial Turbomechinery AB use or disclosure to third parties without e)Pms authority is strictly forbidden. issued by: celi1 Checked by: Approved by: ISEMENS Service Product Information Document number Editi on XX1 CS19047 6 6 Date Page 2006-06-12 2 (11) Preventive Maintenance Maintenance Plan Activities SGT-800 / GTX100 (q) 3. Personnel 3.1 Supervisors, specialists and technical personnel • Site manager • Commissioning engineers • Technical advisors / shift • Quality engineer • Performance engineer • Vibration specialist (if required) 3.2 Additional personnel • 1 Co-ordinator • 3 Millwrights / shift • 1 Electrician • 2 Mechanical fitters • 1 Operator, as required 4. Main means and facilities 4.1 Spare parts, special tools and instruments • Spare part kit for Level B • Special tools and instruments 4.2 Standard tools, workshop facilities etc. • Service area requirement according to document 1CS35073 • NDT area requirement according to document 1CS16885 • Standard hand tools as required • Cleaning products • Office and sanitary facilities • Access to the customer workshop may also be needed and consequently allowed We reserve all rights in this document end in the irdormetion contained therein. Reproduction, © Siemens Industrial Turbomachinery AB use or disclosure to third parties without express authority is strictly forbidden. V )W SIE Service Product Information Document number Edition XX1 CS19047 6 Date Page 2006-06-12 3 SA Preventive Maintenance Maintenance Plan Activities SGT-800 / GTX 100 (q) • Rented workshop facilities and machine tools when required We reserve all rights in this document and in the information contained therein. Reproduction, use or disatosure to third parties WIlt*,A express authority is strictly forbidden. © Siemens Industrial Turbomachinery AS Document number Edition Service Product Information xxlcs19047 s SIEMENSDate Page 2006-06-12 4 �A Preventive Maintenance Maintenance Plan Activities SGT-800 / GTX 100 14) 5. Safety precautions All precautions in order to avoid personnel injuries and equipment damage are to be ensured, among which are: • Training -if necessary- in order to comply with local safety regulation or plant activity. • Availability of first aid and rescue equipment. • Availability of standard electrical and mechanical safety equipment e.g. rubber gloves and carpet, helmet, skin gloves, grinding glasses, welding screens etc. • Rotor turning motor(s) must be switched off and locked. • M.V. and L.V. equipments must be switched off, locked and earthen according to applicable safety standards. • Main circuits such as liquid fuel and gas fuel, lubrication oil, steam, propane gas bottles (if applicable), fire extinguishing system etc. must be shut off and locked etc. Note: The above safety precaution list is not limited and the customer is required to provide all necessary additional assistance to the Siemens personnel in order to fulfil its mission in safe condition We reserve all Nhts in this document and in the information contained therein. Reproduction, ® Siemens Industrial Turbomachinery AB use or disclosure to tNrd parties without egress authority Is stridly forbidden 7 Appendix 1.4.2 Document number Edition SIEMENSService Product Information xlcs2000s s Date page Vernon 2006-06-13 1 (4) Preventive Maintenance Maintenance Program ST Activities Standard document — may be changed without previous notice Activities and requirements, level "LO" (Limited Overhaul) All information is based on a single module configuration VAX HP, LP, MP, ATP4, ST5 or ST6. 1. Standard down time Standard down time are 5 working days for a level LO inspection (excluding turbine cool -down time and lock out procedure). The estimated down time above is based upon 2 shifts 5 working days/week, 10 hours/day. It is assumed that all required spare parts needed are available before the beginning of activities. Moreover, it will depend on the findings following visual inspection and observations during test before shut down as well as on additional activities ordered by the customer. Level '10" maintenance can be carried out at any favourable period allowed by the operation conditions. Therefore Siemens must be informed well in advance in order to plan the necessary personnel. 2. Basic scope of work More detailed information is to be found in the main activity list, supplied by the Service Execution Centre in Finspong, Sweden. • Visual inspection for leaks, noises or other deviations from normal turbine behaviour • Shut down. • Stroke test, emergency stop valve and check valves • Linearity test, control valves • Leakage test, control valves • Test of tripping devices (switches and transmitters) • Function and logic test of hydraulic oil system • Function and logic test of lube oil system • Boroscope Inspection of the Turbine • HP/MP-turbine bearings inspection • Bearing squeeze damper inspection • Gear box inspection (blue mark) We reserve all rights in this document and in the information contained therein Reproduction, p Siemens Industrial Turbomachinery AB use or disclosure to third parlies without express authority is 96CUy forbidden. Issued by. Johanna Akesson Checked by: Approved by: Service Product Information XX1GS20006 SIEMENSDate Vernon 2007-08-16 Preventive Maintenance Maintenance Program sT Activities • Visual inspection of earth grounding device • Generator inspection* • Inspection of heat exchanger (through the inspection covers) • Startup Appendix 1.4.2 Edition Page 2 (4) As a result of inspections or other source of information, further extensive corrective activities not included in the preventive maintenance contract, might be necessary. This kind of activities has to be ordered separately. 3. Personnel 3.1 Advisors, specialists and technical personnel Chief erector —Technical field advisor Turbine erector Quality Inspector —Turbine Quality Inspector —Generator Commissioning Engineer 3.2 Additional personnel 1 Operator 1 Instrument Engineer I Electrical Engineer 2 Mechanical Fitters 4. Main means and facilities 4.1 Spare parts, special tools and instruments • Needed maintenance consumables for level LO • Additional specific tools and instruments. 4.2 Standard tools, workshops facilities etc. • Standard tools as required • Lifting capacity We reserve all rights in this doament and in the information contained therein. Reproduction, p Siemens Industrial Turbomachinery AS use or disclosure to third parties without express atlhority is strictly forbidden. SIEMENS Service Product Information Vernon Preventive Maintenance Maintenance Program Activities • Cleaning products • Office and sanitary facilities we reserve all rights in this document and in the information contained therein. Reproduction, use or disclosure to third parties without express autlwrity is strictly forbidden. Document number XXlCS20006 Date 2007-08-16 ST Appendix 1.4.2 Edition 6 Page 3 (4) • The Generator activities are provided by gas turbine activities and requirements in a combined cycle application and are in those applications not to be considered. e Siemens Industrial Turbomachlnery AB Appendix 1.4.2 Docume"' number Edition Service Product Information XX1cs20006 6 SIEMENSDate Page Vernon 2007-08-16 4 (4) Preventive Maintenance Maintenance Program ST Activities 5. Safety precautions All precautions in order to avoid personnel injuries and equipment damage are to ensured, among which are: • On -site safety orientation in order to comply with local safety regulation or plant activity. • Availability of first aid and rescue equipment. • Availability of standard electrical and mechanical safety equipment such as, but not limited to, rubber gloves, fire carpet, helmet, gloves, safety goggles, welding screens etc. • If the external gas and/or steam net are pressurized, two shut off valves between the external net and the plant must be in a closed position. Between the two shut off valves, there must be a drain valve that is locked in an open position. • M.V. and L.V. equipment must be switched off, locked and earthed according to applicable ISO or VDE standards • Main circuits such as: Liquid fuel and gas fuel, lubrication oil, steam, propane gas bottles (if applicable), fire fighting systems etc. must be shut off and locked etc. Note: The safety precautions are not limited to t he list above. The customer is required to provide all necessary additional assistance to the Siemens' personnel in order to fulfil its mission in safe condition. VJe reserve all rights In this document and In the information contained therein. Reproduction, ®Siemens Industrial Tufiomachinery AB use or disclosure to third parties without express authority is strictly forbidden. qrv-v— Service Product Information X1CS19048 SIEMENSDate Vernon 20 2006-06-13 Preventive Maintenance Maintenance Plan Activities SGT-900 / GTX100 Standard document — may be changed without previous notice Activities and requirements level C Appendix 1.5.1 Edition Page 1 (3) (40'equivalent operating hours or 2000 equivalent operating cycles, whichever comes first) 1. Standard down time Standard down time, inclusive cooling down, is according to table 1 for a level C overhaul. Table 1 Alternative Expected down time (calendar days) incl. cooling down 1-shift 31 days* 2-shift - 22days" 2-shift, turbine module = and turbineitatar 11 - 19 days*** + based on 10 hours work per day, b woncmg aaysrweex ++ based on work in two shifts and 10 working hours/shift , 6 working days/week +++ based on work in two shifts and 10 working hours/shift, 6 working days/week, and use of spare turbine module and spare turbine stator 1 The estimated downtime is based on the fact that all spare parts needed are available before the beginning of activities. Moreover, it will depend on the finding following the Boroscope inspection and observations during test before shut down as well as on additional activities ordered by the client. Level C maintenance can be carried out at any favourable period allowed by the operation conditions. Therefore Siemens must be informed well in advance in order to plan the necessary personnel and spare parts. 2. Basic scope of work • Site installation, check of tools and spare parts • Meeting with client, review of operation incidents and reports Start test (if in stand by), check of start sequences and performance readings • For further detailed information see Maintenance Activity List, document 1 CS36693 • Final report writing We reserve ell rids in this document and in the information contained therein. use or rxsdosure to third parties without express authority is strictly forbidden. Issued by: celi1 Checked by: Approved by: ® Siemens Industrial Turbomachinery AB Me Preventive Maintenance 3. Personnel nul Service Product Information XXXlES19048 Date 2006-06-13 Maintenance Plan Activities SGT-800 / GTX100 3.1 Supervisors, specialists and technical personnel • Site manager • Commissioning engineers • Technical advisor / shift • Quality engineer • Alternator specialist • Performance engineer • Vibration specialist (if required) • DT-specialist 3.2 Additional personnel • 1 Co-ordinator • 5 Millwrights / shift • 1 Electrician • 2 Mechanical fitters / shift • 1 Operator, as required • 2 Mechanical fitters (alternator) 4. Main means and facilities 4.1 Spare parts, special tools and instruments • Spare part kit for Level C • Special tools and instruments We reserve adl rights in this document and in the information oor"ned thereat. Reproduction, use or disclosure to third parties without express authority is strictly forbidden. Edition Page 2 (3) p Siemens industrial Turbomachinery AB SIEMEAS Service Product Information Preventive Maintenance Maintenance Plan Activities Document number Edition XXl CS19048 7 Date Page 2006-06-13 3 (3) SGT-800 / GTX100 4.2 Standard tools, workshop facilities etc. • Service area requirement according to document 1 CS35073 • NDT area requirement according to document 1 CS 16885 • Standard hand tools as required • Cleaning products • Office and sanitary facilities • Access to the customer workshop may also be needed and consequently allowed • Rented workshop facilities and machine tools when required 5. Safety precautions All precautions in order to avoid personnel injuries and equipment damage are to be ensured, among which are: • Training -if necessary- in order to comply with local safety regulation or plant activity. • Availability of first aid and rescue equipment. • Availability of standard electrical and mechanical safety equipment e.g. rubber gloves and carpet, helmet, skin gloves, grinding glasses, welding screens etc. • Rotor turning motor(s) must be switched off and locked. • M.V. and L.V. equipment's must be switched off, locked and earthen according to applicable safety standards. • Main circuits such as liquid fuel and gas fuel, lubrication oil, steam, propane gas bottles (if applicable), fire extinguishing system etc. must be shut off and locked etc. Note: The above safety precaution list is not limited and the customer is required to provide all necessary additional assistance to the Siemens personnel in order to fulfil its mission in safe condition We reserve a!f rights in this document and in the information contained therein. Reproduction, use or disclosure to third penis without express authority is strictly forbidden. 0 Siemens Industrial Turbomachinery AB 0 Appendix 1.5.2 ENS Service Product Information xics20007 Edith Vernon g Date Pa e 2006-05-09 1 0) Preventive Maintenance Maintenance Program ST Activities ,Standard document — may be changed without previous notice Activities and requirements, level "MO" (Major Overhaul) All information is based on a single module configuration VAX HP, LP, MP, ATP4, ST5 or ST6. 1. Standard down time Standard down time are 17 working days for a level MO inspection (cooling down time not inlcuded). The estimated downtime above is based upon 2 shift 5 working days/week, la hours/day and on the fact that all spare parts needed are available before the beginning of activities. Moreover, it will depend on the findings following visual inspection and observations during test before shut down as well as on additional activities ordered by the customer. Level "MO" maintenance can be carried out at any favourable period allowed by the operation conditions. Therefore Siemens must be informed well in advance in order to plan the necessary personnel. 2. Basic scope of work More detailed information is to be find in the main activity list, supplied by the Service Execution Centre in Finspong, Sweden. • Visual inspection for leaks, noises or other deviations from normal turbine behaviour. • Shut down. • Dismantling. • Inspection and NDT of turbine casing, rotor, blades, diaphragms, guide vanes, bearings, couplings and sealings on turbine. • Inspection and NDT of wheel, pinion, bearings on the gearbox. • Inspection and NDT of inlet steam valves, extraction valves. • Inspection of valves, actuators, strainers for gland- and leak -off system. • Inspection of valves, pumps, motors, filters, coolers, servomotors, for lube- and hydraulic oil system. • Inspection of bearings, sealings, rotor, stator, cooler for the generator*. • Inspection of heat exchangers and condensers in turbine auxiliary system • Limited commissioning procedure (including annual safety inspection). • Startup We reserve all rights in this document and in the information contained therein. use or disclosure to third parties without express authority is strictly forbidden. Issued by: Johanna Akesson Checked by: Approved by: * The Generator activities are provided by gas turbine document "activities and requirements" in a combined cycle application and are in those applications not to be considered. O Siemens Industrial Turbomachinery AB SIEMENSService Product Information Documentnumber Edition XXl CS20007 6 Vernon 2006-05-09 2 (3j Preventive Maintenance Maintenance Program ST Activities As a result of inspections or other source of information, further extensive corrective activities not included in the preventive maintenance contract, might be necessary. This kind of activities has to be ordered separately. 3. Personnel 3.1 Advisors, specialists and technical personnel Senior advisor —Site manager Chief erector —Technical field advisor Turbine erector Quality inspector -Turbine Quality inspector NDT Quality inspector —Condenser system inspector Quality inspector —Generator inspector* Commissioning Engineer 3.2 Additional personnel I Co-ordinator I Turbine Operator, as required 1 Instrument Engineer, as required 1 Electrical Engineer, as required 6 Millwrights 2 Scaffolders 2 insulators 1 Joiner 4. Main means and facilities 4.1 Spare parts, special tools and instruments • Needed maintenace consumables for level MO • Additional specific tools and instruments. 4.2 Standard tools, workshops facilities etc. • Standard tools as required We reserve all rights in this document and in the information contained therein. Reproduction, use or discbsure to third parties without express authority is strictly forbidden. a The Generator personnel are provided by gas turbine activities and requirements in a combined cycle _ application and are in those applications not to be considered. SIEMENSService Product Information XXlCS20007 Edit Vernon Date Page 2006-05-09 3 (3) Preventive Maintenance Maintenance Program ST Activities • Service area requirement according to 1CS 35073 • NDT area requirements according to 1CS 16885 • Cleaning products • Office and sanitary facilities 5. Safety precautions All precautions in order to avoid personnel injuries and equipment damage are to ensured, among which are: • Training -if necessary- in order to comply with local safety regulation or plant activity. • Availability of first aid and rescue equipment. • Availability of standard electrical and mechanical safety equipment such as, but not limited to, rubber gloves, fire carpet, helmet, gloves, safety goggles, welding screens etc. • If the external gas and/or steam net are pressurized, two shut off valves between the external net and the plant must be in a closed position. Between the two shut off valves, there must be a drain valve that is locked in an open position. • M.V. and L.V. equipment must be switched off, locked and earthed according to applicable ISO or VDE standards • Main circuits such as: Liquid fuel and gas fuel, lubrication oil, steam, propane gas bottles (if applicable), fire fighting systems etc. must be shut off and locked etc. Note: The safety precautions are not limited to the list above. The customer is required to provide all necessary additional assistance to the Siemens' personnel in order to fulfil its mission in safe condition. We reserve aH rights in this do urnent and in the information contained therein. Reproduction, use or disclosure to third parties without express authority is strictly forbidden. ® Siernens Industrial Turbomechinery AB 10 SGT-800 2006-08-24 App 2.1 SIEMENS Vernon Edition (Stdno) Replacement schedule ! Page 1 (1) The parts of the maintenance plan shown below are the parts included in Supplier's Scope of Supply in accordance with clause 2.2.2 in the Contract for each Gas Turbine and the parts are either replaced by new ones or they are reconditioned and reused in accordance with this schedule. <— ('ttntract len0l) -) B 20 D00 EOH C 40 000 EOH B 60 000 EOH D 60 000 EOH B 100 OOD EOH 120 D00 EOH 1000 EOC 2000 EOC 3000 EOC 4000 EOC 50DO EOC 6000 EOC Fuel injectors, Fuel injectors, CC, aet #1 Cc, set #2 CC, set #3 1 St Vane, set 1 st Vane, set 1 st Vane, set tst Blade, set 1 sl Blade, set 1st Blade, set 2nd Vane, se 2nd Vane, 9e' 2nd Vane, is 2nd Blade, se 2nd Blade, se 2nd Blade, ss 3rd Vane, se' 3rd Vane, se 3rd Vane, se 3rd Blade, ae 3rd Blade, se 3rd Blade, se The replacement schedule is further detailed in Appendices 2,1 to 2.5, which also include typical maintenance consumable parts as well as other parts necessary for carrying out the o maintenance work_ The list of Maintenance consumable parts is subject modification without further notice. m C O 11 C LL m Q tv C U N E 0 0 0 0. 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Q` .--I r-1 ,-I r-i ,� ri ri e--I r♦ W M .-( ri a N Nri ri ri I I l ri r-i ri W N I i I 1 1 I I I MfANW MN W Ln dl W W 0�� I l I I I V�N.--I riW N01 I I ri l CD�ri�ri t+1MMMWl�CD O�{�h(�l�ht!lWW W M O in, Ln Ln M Ln Ln H CD lb ri lO ri WOrn W.y� W � W O W W h CD r� Otr-10 Ln riLO 0 I I I I I ri ri H Nrir 04 N O 0000 N N N N r•101 VINNN I I I hh I I 1 1 l l 1 l r-IHrl HIW '10 1 t t0)0) i MN I Ln 000ri 000 Ln., d' 010N CO CO O co m OD CD CO OD CD h 'i co w Mh mr-N -IONONr-INr-INNM10 lfiNWr-iNNt!)InN�F�OdI ri N(+1 h N 4 a K HN N U) N e> "-w-w-WK4 a'Fi4�. CO aDmtD EO DEn U1 V) Ln Ln Ln M M V) LO En fn V) V) N U) t4 U) CV U) V) N D0 W a% N N Go W 0 W h W h%D h O'aD Ln l710 CO Ln tnM P)h V)cn r-i HCW-IEW-IHFrU•IU-IUi��r�in4icoarV-ilvirU.+rU-irU-+,U-LrU-I,UiUirU-I,U-I -0U-IU-INFE4 -IH00HEEEH-'FFC> �r %0r1RCWE+CC) roiNroiE�-IUirE+��•I NNN N N N N N N N N N N N N N N N N N N N N N I 'A N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 14 MP24 Appendix 2.5 SIEMENS Spare parts B2555 COV ! MALBURG Steam turbine type MP24 PRELIMINARY LIST MAINTENANCE CONSUMABLE SPARE PARTS Row HG Component No 45 2100 MP TURBINE 50 55 60 65 70 75 80 85 90 95 100 103 105 110 115 120 125 130 135 140 145 150 155 160 165 170 175 180 185 190 195 200 205 210 215 220 225 230 2121 INLET CASING 2121 INLET CASING 2130 DIAPHRAGM Row HG Component Assembly Item Name of part city Drwg No No 301302 22 Lock washer 8 23 Lock washer (folded) 36 24 Lockwasher 2 36 Wedge 13 36 Wedge - oversize 4 78 0-ring 5 80 Lock washer (folded) 6 91 Hexagon socket head cap screw 24 92 Washer 24 93 Sleeve 1 94 Guide pin 1 95 Washer 1 97 Parallel pins 1 96 Allen screw 1 105 Hexagon socket head cap screws 4 249935 9 Cap nut 2 11 Cap nut 2 12 Stud m36tkx240 2 13 Stud m36x300 2 14 Stud m42tkx310 2 15 Resilient sleeve 2 16 Resilient sleeve 2 17 Resilient sleeve 2 19 Stud M64 TK 2 20 Nut m64 2 249935 21 Resilient sleeve 2 22 Slotted nut M72x6 2 23 Stud M72x6 TK 2 14 Lock washer 36 19 Gasket 8 23 Plug 2 24 Gasket Copper 2 301091->94 Flat bar 2 5 Hexagon socket head cap screw 4 6 Sealing strip 5 6 Sealing strip 5 7 Caulking wire 35 8 Set screw 4 9 Hexagon sockethead screw 32 Assembly Item Name of part Qty App 2 -ST Maintenance consumable parts .xls Page 1 4 q MP24 Appendix 2.5 SIEMENS Spare parts No Drwg No No 235 2130 DIAPHRAGM 301095->99 2+3 Flat bar 2 240 4 Hexagon sockethead screw 40 245 6 Hexagon socket set screw F79 5 250 7 Adjusting screw 10 255 8 Sealing strip 10 260 9 Caulking wire 25 265 10 Set screw 5 270 11 Hexagon sockethead screw 5 275 2130 DIAPHRAGM 301102 2+3 Flat bar 1 280 4 Hexagon sockethead screw 10 285 5 Hexagon sockethead screw 1 290 7 Hexagon socket set screw with dog 1 295 8 Adjusting screw 2 300 9 Sealing strip 2 305 10 Caulking wire 5 310 11 Set screw 1 315 2130 DIAPHRAGM 301101 2+3 Flat bar 1 320 4 Hexagon sockethead screw 10 325 5 Hexagon sockethead screw 1 330 7 Hexagon socket set screw+F98 1 335 8 Adjusting screw 2 340 9 Sealing strip 2 345 10 Caulking wire 6 350 11 Set screw 1 410 5 Caulking wire 7 415 6 Sealing strip 1 440 2160 BEARING BRACKET 301304 2 Strip, brass 2 445 INLET END 3 Caulking wire 2 465 10 Hexagon head screw 8 470 12 Lock washer (folded) 8 495 2160 BEARING BRACKET 301305 6 Hexagon head screw 12 500 OUTLET END 7 Lock washer (folded) 12 505 12 0-ring 1 510 14 Guide pin 1 515 2170 HYDRAULIC BOLT 245365 12 Seal ring 2 520 TIGHTENER 13 Sliding seal for piston rod 1 525 14 Sliding seal for piston rod 1 530 2200 GEAR SHAFT 80047582 7 Coupling screw M30 16 535 8 Lock nut 16 540 9 Coupling screw M30 16 545 10 Lock nut 16 550 13 Coupling screw M36 18 555 14 Lock nut 18 560 23 Grounding braid 1 565 24 Tension spring 1 Row HG Component Assembly Item Name of part Qty No Drwg No No App 2.-�ST Maintenance consumable parts .xls Page 2 1 MP24 Appendix 2.5 SIEMENS Spare parts 600 2410 ESV VALVE 285493 2 Valve stem 1 605 3 Valve seat 1 610 9 Gland 1 615 10 Ring gasket 4 620 10 Lubricant 1 625 12 Ring gasket 1 630 12 Graphite braid 1 635 13 Support ring 1 640 14 Split ring 1 645 15 Locking ring 1 650 18 Gasket, spiral -wound 2 655 19 Hexagon sockethead screw+F145 4 660 20 Hexagon head bolt 16 665 21 Stud 4 670 22 Hexagon nut 8 675 23 Hexagon socket head cap screw 8 673 35 Steam strainer 1 680 29 Lock washer 20 685 2410 CV VALVE 285851 31 Valve seat 1 690 32 Valve head 1 695 33 Locking nut 1 705 38 Gland 1 710 41 Split Ring 1 715 42 Ring gasket 1 720 43 Support ring 1 730 45 Ring 1 735 46 Parallel pins 1 740 47 Stud 4 1005 3350 ESV SERVOMOTOR 285066 3 Piston Rod 1 1010 9 Spindle Head 1 1015 17 Hexagon socket head cap screw 8 1020 21 Lock nut 2 1025 22 Hexagon socket head cap screw 4 1030 23 Split pin 4 1035 24 Retaining ring for bores 2 1040 26 Guide ring for piston 2 1045 27 Sealing for piston 2 1050 28 Guide ring for rod piston 2 1055 29 Sealing for piston rod 2 1060 30 Stripper 2 1065 31 Stripper 2 1070 32 Sealing for piston rod 2 1075 33 Sealing for piston 2 1080 34 O-ring 2 1085 35 O-ring 2 1090 36 O-ring 2 1095 37 0-ring 2 11 42 Solenoid valve 1 Row HG Component Assembly Item Name of part Qty No Drwg No No 1105 3350 CV SERVOMOTOR 285063 2 Hexagon sockethead screw 1 App 2e#ST Maintenance consumable parts .xls Page 3 MP24 Appendix 2.5 SIEMENS Spare parts 1110 1115 1120 1125 1130 1135 1140 1145 1150 1155 1160 1165 1170 1175 1180 1185 1190 1195 1105 1110 1115 1120 1125 1130 1135 1140 1145 1150 1155 1160 1165 1170 1175 1180 3350 CV SERVOMOTOR 285063 4100 GENERATOR 5 Retaining ring for bores 1 6 Sealing for piston 1 7 Guide ring for piston 1 8 0-ring 1 11 0-ring 1 12 Hexagon socket head cap screws 4 14 Sealing for piston 1 16 Hexagon bolt 1 17 Stop nut 1 18 0-ring 1 19 O-ring 1 20 Guide ring for rod piston 1 22 Sealing for piston rod 1 24 O-ring 2 27 Felt joint 2 28 Cup spring 19 33 O-ring 2 34 Hexagon socket head cap screws 4 Earth faulth brush 2 Rotor grounding brush 2 Brush holder 1 Bearing bushing upperhalf 1 Bearing bushing low.half 1 Thrust washer 1 Shaft seal 1 Bearing insulation 1 Bearing insulation 1 Diode 1 Thyristor MKA10 1 Control pulse unit 1 Temperature transducer 1 RTD 1 Heating element 1 Heater 1 App ?,f ST Maintenance consumable parts .xls a. 5, Page 4 %I 15 SIEMENS Service Product Information 1 S'35073 Appendix 3.1 Edi 2 Date Page 2003-05-19 1 (3) Standard document Specification SGT-800• KAX100-1 Standard document — may be changed without previous notice Service and temporary area requirements This document stipulates required areas for maintenance according to the Maintenance Programs for GTX100 and KAX100-1. For activities outside the Maintenance Program, the requirements may be extended. Introduction Demag Delaval Industrial Turbomachinery's maintenance concept goal is to optimise preventive maintenance in order to secure a reliable operation. The preventive maintenance program is based on component lifetime in the gas turbine, or in the power plant. During the defined maintenance program activities, inspections and replacement of specific components according to the preventive maintenance program are needed. Requirements The gas turbine/power plant is based on a modular design that simplifies the inspections and replacements so that the down time can be minimised. The dismantled turbine modules and other modules must be carefully handled with the right tooling and protected from dirt, dust, moisture, etc. which can damage the modules. Therefore, it is a necessity that the service area is covered during the maintenance activities, and protected against presumptive contamination. During the maintenance program activities, it is also necessary that the service and temporary storage area have specified main requirements such as for the: Temporary storage area • Ventilated and temperature controlled within -15 - 30 °C and humidity less than or equal to 60% • A covered area and with an acceptable area and height, see table 1 • Acceptable lifting possibilities and capacity, tested and approved by authorities, see table 1 • Access to plastic coverage of components • Have proper lightning ,Service working area • A covered area and with an acceptable area and height, see table I • Acceptable lifting possibilities and capacity, tested and approved by authorities, see table l • Covered and protected from air dust and contamination • Ventilated and temperature controlled within 15-30 °C and humidity less than or equal to 60% • Have access to compressed air of min. 8 bar (g) • Have proper lightning of approximately 500 lux (measured 80 cm from floor level) • Have 230V electrical connections, if not then electrical tools supplied by Customer • Access to TIG- and electrical welding, access to compressed air and gas for heating • Two workbench approximately 1,5 x 3 in, one of them with a vice • Access to 10 pallets for temporary storage of larger components • 15 Boxes for storage of smaller components, screws nuts etc. Sizes: 500 x 300 x 200 mm, 330 x 200 x 150 mm, 230 x 150 x 120 mm We reserve all rights in this documerd and in the kftmation contained therein. Reproduelion, use or disclosure to third Wles withott egress authority is strictly forbidden ® Demag Delaval Industrial Turib machinery AS Issued by: alui This document is issued in Pulse. Checked by: 2003-06-02 Bengt Svensson Approved by: 2003-06-13 Olov Karlsson 0f*11V Service Product Information Ord mbEdition SIEMENS1 CS35073 2 paw page 2003-05 19 2 (3) Standard document Specification GTX100. KAX100-1 • Clean cloths for cleaning • Place for disposals such as cloths, rest material etc • Forklift truck, or similar, with required capacity for handling the gas turbine / power plant modules outside the enclosure and inside Service working and Temporary storage area (table 1). • An additional prong extension to the forklift When a overhead crane and forklift truck can not be used, a hoisting crane, or similar, is required when a gas turbine / power plant modules has to be lifted out from enclosure due to its required lifting capacity and lifting height, see table 1, and A hoisting crane, or similar, is also necessary when the service working area is not placed close to the enclosure and transport is necessary. Additional down time can be added depending on the extra time for transport to local service area or if the requirements are not fulfilled. Depending on what type of Steam turbine (see below table I for ST5) in a Power plant KAX100-1, different specific requirements must be fulfilled so that proper service can be performed. NDT-area S4 worldng area Covered Service Temporary Lifting Lifting Lifting speed area working area storage area height capacity min/max Imi) 1mi1 ►mll Iml lkgl Im/min.l. GTX100 > 75 > 110 > 50 > 4 8 000 0,5 / 6 KAX100-1 > 225 > 160 > 150 > 8 > 20 000 0,25 / 4 Example for a ST5 Table 1. Specific requirements We rasem all rights in this document and in the information contained therein. Reproduction, use ar disdosure to third parties without w9ress authority is strictly forbidden b Demag Delaval Industrial Turbomaehindy AB ISEMENS Service Product Information pocumat5073r E�tl2 iCS3073 2 pate Page 2003-05-19 3(3) Standard document Specification GTX100. KA,X100-1 Please note the following: • For outdoor installations The covered area specified below, an area just outside the enclosure for lifts and for performing the work, have an overhead crane that is operating, and must be protected from dust and rain and therefore be covered with waterproof material that is resistant to minimum wind speed of 15 m/s. Covered area - The total area to be covered is for: GTX100 (L x W): 15 in x 5 m KAX100-1 (L x W): 45 in x 5 m • Lifting capacity — required capacity on crane when turbine is lifted out from the enclosure. • Service working area — a covered maintenance area close to the installation where the inspection take place. • Temporary storage area — a covered area where all turbine parts etc at an inspection are kept. Certain parts are also inspected here. • Lifting height — the requirements of minimum height in the Service working area • Lifting speed — minimum and maximum requirements on lifting speed, meters per minute • More specific demands are specified in the documents activities and requirements, and depend on the type of installation or the plant and its major components such as Steam turbine, for example ST5 etc. • NDT area requirements are not included in above table 1, but is separately specified in document 1 CS16885. This area can be placed at another location depending on the requirements on site. We reserve all tights in the domnent and in the intonation oorAained therein Reproduction, use or dsdosrae 10 third pmtiee without SWess w#Wty is strictly forbidden. ® Demag Delaval Industrial TurbanaWunery AS �T 16 Service Product Information Douanemmber Edition 1 CS16885nAppendix 3.2 3 Date page 2001-08-29 1 (1) Standard document Specifications GT, ST Standard document — may be changed without previous notice NDT Area Requirements Introduction This document is valid for GT10, GT35, GTX100 and Steam turbine (VAX HP, -MP, -LP, ATP4 or ICS) To be able to detect presumptive cracks in specific gas turbine components, Non Destructive Test (NDT) must be carried out within the arranged service area. Requirements The area where these activities are to be carried out must fulfil the following requirements: - A ventilated area of min 20 in close to the service area, and temperature controlled within 15- 35°C. - Have access to compressed air of min 5 bar (g). - Have proper lightning of approximately 500 lux (measured 80cm. from floor level). - Have access to the off-line water for cleaning of turbine components, according to water specification GTl W220027E, ed. 4. - Have a cesspool for disposal of wastewater containing NDT chemicals. - Have 220V el. connection. - A workbench, approximately 1,5 x 3m. - Lifting possibilities - Access to an ultrasonic cleaning equipment. - Clean and lint -free cloths for cleaning. The service and the NDT area can be temporary, but it must fulfil the above requirements. We reserve all rights in this domment Ord in the Information contained therein. Reproduction, use or disdosm to ddrd parries wlttwut egress a 0mrity is strictly forbidden a, Demeg Del"I Industrial Twtomachin" AS Issued by: aju1 This document is issued in Pulse. Checked by: 2000-11-10 Per Svensson Approved by 2000-11-16 Olov Karlsson 17 SIEMENS/CITY OF VERNON APPENDIX TAB 17 INTENTIONALLY DELETED iF OPERATING STATISTICS GTX100 14(3 GAS TURBINE MONTHLY REPORT (Definitions on next page) Comnanv: Vernon Appendix 5.1 Unit Name: Order No: Period (Year -Month): Operational data from counters Accumulated by the end of Total this month in signal treatment cubicle: this month (A) last month (B) (A-B) Operating hours total (ID Equivalent hours total (Ho) Total start/stop cycles (N)— Total equivalent start/stop cycles (No) Operational data from counters Accumulated by the end of Total this month in control system cubicle: this month (A) last month (B) (A-B) Total production of MWh - _ Total production of MVArh + - _ Total production of MVArh -—�_ Additional information (compulsory): No of start attempts during this period (Note 1) No of successful starts during this period (Note 2) No of failed starts during this period (Note 3) Note 1 A start attempt shall be counted when the start button is pressed and the gas turbine is required for commercial operation. Repeated failed start attempts without any actions taken in between shall be counted as one attempt. Note 2 A start shall be counted as successful if the gas turbine is started for commercial operation and the drive shaft reaches synchronous speed in Power Generation. Note 3 If a start fails, please specify if possible in the "specification" below additional information about where in the start sequence the start was interrupted, first fault indication, following alarm and trip signals, actions and parts required etc. SPECIFICATION OF FAILED STARTS Date Description C!� ^7�3 By occurance of outage, please fill in the form on next page LOG OF OUTAGE HOURS Turbine Related Outage Non Turbine Date Forced Planned Related Outage Comments/Cause Definitions: Operating Hours Total number of hours the gas turbine set was actually operated and producing power. Turbine related Outage Hours Number of hours that the gas turbine set was not available for operation due to a fault of the gas turbine set or it's auxiliary systems included in DDIT's supply. The gas turbine set also includes gear and generator. Shut downs of the gas turbine set due to external disturbances (boilers, gas & power supply ...) shall be reported as non turbine related outage (OH-N) even though the consequence was a shut down of the gas turbine set. Execution of maintenance work that normally do not require a shut down but is performed at a planned outage and thus extending the outage shall not be included in the time for correction. Forced Outage Hours (FOH) Turbine related outage due to conditions that require an immediate shut down (most likely gas turbine set was tripped by the safety system). Planned Outage Hours (POH) Outage due to an inspection or overhaul, planned and scheduled well in advance. a IV ? �3 Other operation maintenance activities like compressor cleanings, filter replacement etc. shall also be considered as planned outage. Only outage hours due to activities that require a shut down of the gas turbine set shall be reported as Planned Outage Hour. Non -Turbine Related Outage Hours Number of hours the plant was not available for operation due to conditions not directly related to the gas turbine set (see def. Turbine Related above) or due to external incidents. W Appendix 5.2 STEAM TURBINE MONTHLY REPORT / COMPANY: Vernon UNIT NAME: ORDER NUMBER: MONTH/YEAR: ( Definitions on next page ) Total Operating Hours: End of this Month: I h End of last Month: h = h Total Operating Hours this Month: Total Stand-by Hours: End of this Month: h End of last Month: � h = h Stand-by Hours this Month: Cold (>16h) Hot(<16h) Total Starts: End of this Month: End of last Month: Total Starts this Month: Total Production of MWh: End of this Month: MWh End of last Month: _ j W11 MWh Total Production of MWh this Month: ar3 LOG OF OUTAGE HOURS Month: DATE Turbine Related Outage Hours Non Turbine Rel. Comments/Causes Outage Hours Forced Outage I Planned TOTAL: Definitions: 1. Operating Hours: total number of hours the turbine/generator was actually operated and producing power on base or peak load. 2. Stand-by Hours: total number of hours the plant was available for operation but was not required to operate (e.g. power was not needed); if no figure is given the balance of the month is regarded as stand-by hours. 3. Turbine Related Outage Hours: number of hours the turbine/generator was not available for operation due to fault of the turbine/generator and it's direct auxiliary systems. 4. Forced Outage: outage due to conditions that require immediate shut down (most likely turbine/generator was tripped by the safety system). 5. Planned Outage: outage due to a planned inspection or overhaul, or due to conditions that can be remedied during a schedueld shut down (e.g. weekend). 3�3 6. Non -Turbine Related Outage Hours: number of hours the plant was not available for operation due to conditions not directly related to the turbine/generator (e.g. boiler) or due to externa influences (e.g. electrical disturbances from the grid). 20 2 x SGT-800 200606-13 Appendix 6.1 SIEMENS Vernon Edition 1 (std no) / Page 1 J' Lq) Additional Terms and Conditions for lease of Emergency Gas Turbine or Gas Turbine modules Below additional Terms and Conditions shall prevail when the Purchaser is leasing the Supplier's Gas Turbine or its modules within the validity period of this agreement. 1. Emergency Gas Generator/Turbine The Supplier hereby agrees to lease to the Purchaser on the terms and conditions described herein one SGT-800 / GTX-100 Gas Turbine (see the end of this document for definition) or one of its modules described in Appendix 6.2, hereinafter referred to as the Lease Unit, during unscheduled repair of the Installation, provided such a Lease Unit is available at the time of the Purchaser's request. The term "available" means that the Lease Unit is not utilized or booked by another Purchaser or under maintenance. The following terns and conditions apply also to lease of SGT-800/GTX-100 modules as described in Appendix 6.2, which is the more likely than leasing a whole turbine. 2. Supplier's obligations 2.1 The Lease Unit will be delivered to the Purchaser at the site. The lease period commences on the date that the Lease Unit leaves the Supplier's workshop facilities and ends on the date when the Lease Unit is returned back to the Supplier hereinafter referred to as the Lease Period. 2.2 The Supplier will provide qualified technical direction for the installation and subsequent removal of the Lease Unit. m 3 0 2.3 In the event that the Lease Unit becomes inoperative during the Lease Period due to faulty, . workmanship or material, the Supplier shall remedy such defect at its own expense. m Q z 3. Purchaser's obligations m 0 $ 3.1 The Purchaser shall to the Supplier place an acceptable purchase order for repair of his own Gas Turbine. JJ � 7 7 'O � C N E CAWINDOWWemporary Internet FileslApp 6.1 Lease of GTX turbine or modules.doc 02 c 05 m Q z a� U M E N 2 C_ -tn N ram-• � v m c to 2 x SGT-800 200606-13 Appendix 6.1 SIEMENS Vernon Edition 1 (stdno) Page 2,01 q) 3.2 The Purchaser agrees to pay a weekly use fee for each week or fraction thereof of use of the Lease Unit. Invoicing will be made after each 30 days of use. Payment is to be made against invoice payable within 30 days from the date of invoice. In case payment is delayed beyond the respective due date the Supplier shall be entitled to interest on the overdue amount at a rate of 10% p.a. from the due date until the actual date of payment. The weekly use fee is a fixed fee, subject to adjustment in accordance with a Price Adjustment clause and changes in exchange rate SEK/USD. 3.3 The Purchaser agrees to pay all cost for manpower and for transport of the Lease Unit. The cost for manpower will be based on the Supplier's charges for manpower valid at the time of execution. 3.4 The Purchaser shall allow the Supplier to utilise parts and components from the Purchaser's gas turbine at no charge during the Lease Period. 3.5 The Purchaser shall ensure that the Lease Unit is operated and maintained by trained personnel in accordance with the Supplier's at the moment current specifications (manuals, mandatory bulletins and other written instructions), including the performance of inspections and sampling to assure conformance. The Lease Unit shall be operated in accordance with the specified conditions. Without limiting the generality of the foregoing, the Purchaser shall bear the costs of all necessary consumables needed during the Lease Period. The Purchaser is not entitled to make any alterations or modifications to the Lease Unit. 3.6 Except for the Supplier's obligations of paragraph 2.3 of this document, the Purchaser hereby assumes and shall bear during the Lease Period the entire risk of loss or damage to the Lease Unit. 3.7 The Purchaser shall during the Lease Period keep the Lease Unit insured against risk of loss or damage by fire, theft or other customarily insured hazards in an amount not less than 100 times the weekly rate. The insurance shall be in a form and with a company satisfactory to CAWINDOWSWemporary Internet FileslApp 6.1 lease of GTX turbine or modules.doc 2 x SGT-800 200606-13 Appendix 6.1 SIEMENS Vernon Edition 1 (Sid no) / Page 31,31 (q} the Supplier. The Purchaser shall at the Supplier's request deliver evidence satisfactory to the Supplier of insurance coverage as aforesaid. 3.8 The Supplier shall have the right to in advance notice enter the premises where the Lease Unit is located and shall be given necessary facilities for the purpose of inspection thereof. 3.9 The Purchaser shall supply all necessary assistance, helpers, tools and other equipment, required for carrying out installation and subsequent removal of the Lease Unit at no cost for the Supplier. 3.10 The Purchaser shall provide the Supplier with relevant operating and performance data as requested by the Supplier including, but not limited to, fired hours, equivalent operating hours, starts, full and partial cycles, trips, irregular operating and performance indications and results of sampling inspections. The Purchaser is obligated to shut down the Lease Unit upon the request of the Supplier when, in the reasonable opinion of the Supplier, continued operation would constitute a risk of substantial damage to the Lease Unit or associated equipment and/or personnel. If the Purchaser in spite of the Supplier's written request for a shut down, chooses to run without the Supplier's concurrence, the cost for remedying any resulting damages shall be borne by the Purchaser. 3.11 Title to and ownership of the Lease Unit shall at all times remain with the Supplier and the Purchaser shall undertake all measures necessary in order to preserve the Supplier's ownership to the Lease Unit during the Lease Period. The Purchaser may not pledge, transfer or sell the Lease Unit or part thereof. The Purchaser may not transfer this Agreement to a third party or lease the Lease Unit or part thereof to a third party except in connection with the sale of the Plant. 21 W C 0 u CO E 0 L CD CO C t; 0 F C fd wD C �+ d v E V/ CAWINDOMTemporary Internet FiiesWpp 6.1 Lease of GTX turbine or modules.doc E Fn SIEMENS 2 x SGT-800 Vernon Emerged spare gas t �b ne . 0 a tN C LL N C U IE E 0 F- c_ �a 200606-13 Appendix 6.1 Edition 1 (Std no) ! Page 4 (4) m � a0i CADocuments and Settingslwagnerv\My Documents\Siemens\PGl1\Total Care Solutions\CoVernon12007 NegotiationslContractDocs\Appendices_1u1pp 6.1 Lease of GTX turbine or modules.doc C Vj lV� 21 er I A ENS Service Product Information pp ntenddixiXvurn6.2 Edition App2 Vernon Data Page 2006-06-13 1 (2) Emergency Support Emergency Modules SGT-800 Standard document — may be changed without previous notice Emergency Modules Purpose High power plant availability is dependent not only on a high technical reliability of the equipment and an effective preventive maintenance program. Ample back-up resources are of near -equal importance. Operation support, accessibility of spare parts, spare modules and complete spare units are therefore prerequisites for maintaining the plant's availability at the desired, high level. Though the consequences of an extensive breakdown may be severe, few users keep a back-up unit on their own. So, Siemens offers cost efficient emergency back up in the form of spare modules and gas turbines for hire. To offer the possibility of individual optimising of cost and outage time in case of an emergency break down, our back up recourses do not only include complete gas turbines but also spare modules for hire. Depending on the situation it is sometimes, from total outage time perspective, beneficial to install a spare module instead of replacing the complete gas turbine. General description The emergency modules for SGT-800 / GTX100 cover the major part of the core engine (See definition at the end of this document). Following modules are available for hire for a weekly fee as shown: Weekly fee (JSD) Combustion Chamber Module (Combustor Chamber and Fuel Injectors) 20 000 Turbine Module (including Turbine Stator Stage 1 and Turbine Casing) 40 000 Outlet Casing Module 10 000 Minimised transportation time to all turbine sites is secured by the strategic locations of the emergency modules. All users have access to these emergency modules on a first come first served basis. If there is a need, any available module can be sent within 24 hours from notification, at the return of a signed lease contract. The estimated time for installation and commissioning is normally 2-9 days, depending on type of module and local conditions such as means of transportation, lifting capacity, local assistance personnel, etc. The lease of modules is subject to the same terms and condition as described in Appendix 6.1. We reserve ail rights in this document and in the information contained therein. Reproduction, use or disclosure to third parties without express authority is strictly forbidden. Issued by: sjul Checked by: Approved by: ® Demag Aelaval Industrial Turbomachinery AB SIEMENSService Product Information Appendix 6.2 Edition Date Page 2006-05-09 2 (2) Emergency Support Emergency Modules SGT-800 ing Module I Ell R�j ow■ Turbine Module GTX100 Emergency Back-up Modules We reserve all rights in this document and in fie Wof nation contained therein. Reproduction, use or disclosure to third parties without express authority is strictly forbidden. 0 Demag Delaval Industrial Turbomachinery AB 22 2 x SGT-800 2006-06-12 Appendix 7 SIEMENS Vernon Edition 1 (Stdno) Page 1 (1) Additional Terms and Conditions for On Line Remote Support Below Terms and Conditions shall prevail when the Supplier is assisting the Purchaser with trouble shooting using a remote connection to the local control system of the Purchaser's power plant. 1. The Suppliers obligations 1.1 In emergency situation and on the Purchaser's request the Supplier will, via a remote client, connect to the control system of the Purchaser's power plant in order to assist the Purchaser with trouble shooting. Such support is free of charge. 2. The Purchasers obligations 2.1 The Purchaser is responsible to keep an ISDN or DSL or T-1 subscription necessary for the Supplier to connect to the control system of the Purchaser's power plant from remote. When there is a need for remote connection, it is the Purchaser's responsibility to initiate that by requesting the Supplier to connect to his power plant from a remote client. The responsibility for operation and maintenance of the Purchaser's power plant will under all circumstances stay with the Purchaser. rn c g. N C it CO sz- Q Z' N C U (o E O .fl 7 1— N � C w V7 A � 7 TJ (Q N b y m GMINDOWSNTemporary Internet Files\App 7. Additional Terms Conditions for On Line Remote Support.doc c � V 23 Appendix 8 Page 1 of 8 Additional Terms and Conditions for RELIABILITY GUARANTEE Vernon 1. INTRODUCTION This Reliability Guarantee is offered for the Equipment covered by this Contract, as defined in Articles 2.1 and 13.2 of the Agreement. The following additional terms and conditions apply to the determination of Reliability of the Equipment for which the Contractor is responsible in accordance with the Contract between the Parties. 2. GUARANTEE The Contractor guarantees on the terms and conditions set out below that the "Reliability" (RFg) of the each of the two Gas Turbines (as defined in Articles 2.1 and 13.2 of the Agreement) shall not be less than 97% and the Reliability of the Steam Turbine (as defined in Articles 2.1 and 13.2 of the Agreement) shall not be less than 97%, while operating in compliance with all applicable laws and permits governing the operation of the Plant and while operating within the emissions limits permitted by the SCAQMD and the Plant's permit (the "Guaranteed Value"). 3. MEASURING PERIOD The "Measuring Period" covers approximately 40,000 EOH, commencing on the date on which the B outage has been completed (at approximately 20,000 EOH) and terminating at the end of the C outage (at 59,999 EOH), or when the Equipment has reached 2,000 Equivalent Operating Cycles (EOC), or on the expiry date of the Contract, whichever occurs first. Each of the three Turbines shall be separately measured to determine their individual Reliability throughout the Measuring Period. 4. RELIABILITY DEFINITION The Reliability ("R") during the Measuring Period shall be determined as a percentage as follows: Where: R as a fraction = RH / (MH - PMH - PUMH) x 100 RH = The hours that the Equipment is available to produce the electrical output required of it by Customer during the Measuring Period. PUMH = The Prescheduled Unplanned Maintenance Outage Hours for the Measuring Period where the Equipment is unavailable for Customer's dispatch due to a Prescheduled Unplanned Maintenance Outage agreed to by the Parties where the 2007-07-30 Created on 30/08/2007 07:43:46 01910/0038 160594.3 Appendix 8 Page 2 of 8 Additional Terms and Conditions for RELIABILITY GUARANTEE Vernon Customer has designated that there is no material adverse impact to earnings. PMH = Planned Maintenance Hours for Outages for the Equipment for the Measuring Period. ME = Maximum Hours during the Measuring Period is 40,000 EOH, reduced by the hours that the Customer has not requested the Equipment be available in whole or in part during the Measuring Period. RH will equal MH if there is no PUMH or PMH. Reliability will be 100% if the Equipment is available for operation when the start button is pushed and the Equipment produces the electrical output for the number of hours in the Measuring Period that Customer requests availability, less outages agreed to by the Parties (PUMH and PMH). 5. LIQUIDATED DAMAGES (6'LDW9) At any time and from time to time during the Measuring Period, Customer may determine whether the Turbines are satisfying the Reliability Guarantee. If, by the end of the Measuring Period, each Turbine has satisfied its Reliability Guarantee (le, the actual Reliability meets the Guaranteed Value), then the Contractor is released from its obligation hereunder. 5.1 Liquidated Damages Based on the Guaranteed Value of Reliability of 97% for each of the three Turbines, a Turbine will be deemed to have failed to achieve the Reliability Guarantee, if, commencing on the date when the B Outage has been completed, the Turbine is unreliable (fails to start when the start button is pushed) for 1,400 hours. When 1,400 hours of non -reliability have been reached by any one of the Turbines, it will be mathematically impossible for that Turbine to achieve the Guaranteed Value of Reliability through the end of the Contract, and LD payments will therefore become available at that time. The basis for establishing 1,400 hours as being the point of inability to achieve Reliability is as follows: Each Turbine is under Contract for 40,000 EOH. There is a band from 100% down to 96.50001% where no LD's are to be paid. This equals 100% — 96.5% = 3.5% x 40,000 EOH = 1,400 hours of non -reliability per Turbine before any LD's are due to the Customer. The liquidated damages ("LD's") payable once non -reliability is established is based on an hourly rate for LD's as follows: For every hour of non -reliability of either Gas Turbine that exceeds 1,400 hours, Contractor will pay to Customer $281.00. This is calculated per Gas Turbine, so if 2007-07-30 Created on 30/08/2007 07:43:46 01910/0038 160594.3 Appendix 8 Page 3 of 8 Additional Terms and Conditions for RELIABILITY GUARANTEE Vernon both Gas Turbines are unreliable more than 1,400 hours, the LD's payable to Customer will be $561 per hour, subject to Section 5.2 below. For every hour of non -reliability of the Steam Turbine that exceeds 1,400 hours, Contractor will pay to Customer $561, subject to Section 5.2 below. For further clarification of the basis of payment of LD's, see attached Schedule 1 with example and attached Schedule 2 with a graph that depicts the parameters within which LD's would be payable, and the point at which the maximum LD's would become payable (based on an assumed Contract Price of $22,475,000). 5.2 Limitations The maximum amount of liquidated damages for failure to meet the Guaranteed Value of Reliability shall not exceed 7.5% of the aggregated payments made by Customer under the Contract to date of the non -reliability. The aggregated payments made shall include the $11,341,850.00 prepayment made by Customer pursuant to Purchase Order LP No. 14970 dated February 7, 2007. The liquidated damages set out in this Section 5.2 shall be the Customer's exclusive remedy in case of failure in meeting this Reliability Guarantee. The amount of LD's available may be allocated to any one, two, or three of the Turbines that has not achieved the Guaranteed Level of Reliability. Therefore, if two Turbines function at the Guaranteed Level, and one Turbine is so far below the Guaranteed Level that the entire 7.5% of the Contract Price paid to date has been earned as LD's, that entire amount will be paid as LD's for the one failed Turbine. The LD's are cumulative across the Turbines. That is, if one Turbine is non -reliable for 1 hour, it counts as 1 hour. If two Turbines are non -reliable at the same time for 1 hour, that counts as 2 hours. If all three Turbines are non -reliable for 1 hour at the same time, that counts as 3 hours. 5.3 Payments Liquidated damages may be invoiced to Contractor or used as a credit against the next payment owing by Customer, at Customer's option, at any time that 1,401 hours of non -reliability occurs. If the LD's are invoiced, they are due and payable within 45 days after Contractor's receipt of invoice. 6. TERMS AND CONDITIONS This Reliability Guarantee is valid only under the following conditions: 6.1 Operation & Maintenance Equipment is operated and maintained in accordance with the Customer's Manuals. 2007-07-30 Created on 30/08/2007 07:43:46 01910/0038 160594.3 Appendix 8 Page 4 of 8 Additional Terms and Conditions for RELIABILITY GUARANTEE Vernon The fuel fulfills the requirements in the fuel specification of the Contract (as defined in Appendix 15 of the Contract). The Contractor shall have the right to use any Reliability Guarantee Spare Parts or Special Tools that may be located at the Plant or obtained by Customer for Contractor's rectification work; provided, however, that Customer is not obligated to have any Reliability Guarantee Spare Parts or Special Tools at the Plant. The Contractor shall supply the Overhaul Tools on a temporary basis as needed for dismantling and erection of the Equipment as part of the Contract Price. 6.2 Outage time Stoppages or operational problems due to defects for which the Contractor is or might be responsible and which the Customer's personnel is not able to remedy within five (5) hours shall be reported immediately to the Contractor's service department by phone and facsimile or e-mail. Said report shall contain information about the nature and the extent of the defect. If the Customer fails to report such stoppage or defect, the Contractor is relieved from responsibility for the arising unreliability. For reported failures, the Contractor shall provide recommendations and submit an offer for corrective actions to be applied by and be ordered by the Customer. If the Contractor does not receive a written order regarding the supply of technical assistance, tools and/or material from the Customer within 12 hours after the Contractor's offer has been submitted to the Customer, the Contractor is relieved from responsibility for the arising unreliability. When the Contractor has remedied a defect or malfunction, the outage period shall be calculated from the time of the Contractor's receipt of the report from the Customer until the defect has been made good and the Equipment restarted. The Equipment will be restated as soon as practicable after the outage. If the Equipment is shut down for reasons outside the Contractor's responsibility, the Contractor shall have the right to carry out adjustments and modifications, preventive repairs and maintenance of the Equipment during such shut down period without this being considered as unreliability. The Customer shall use all reasonable endeavours to carry out work within his responsibility within the shortest possible time in order to minimize unreliability. 6.3 Records and Reporting During the period of the Reliability Guarantee, the Customer shall keep records regarding the operation of the Equipment in a form agreed upon in the Agreement. In that connection, the 2007-07-30 Created on 30/08/2007 07:43:46 01910/0038 160594.3 Appendix 8 Page 5 of 8 Additional Terms and Conditions for RELIABILITY GUARANTEE Vernon Contractor shall design, deliver and commission a CMS System to operate in conjunction with the Customer's PI System for remote connection from the Contractor's facilities to the local control room at the Plant. The record shall contain information about all circumstances that could be of importance for the calculation of an outage period. The Customer shall within one week after the end of each calendar month submit to the Contractor copies of the record covering the preceding month and a summary of the outage time during said month, if any. The Contractor has the right, at its cost, to delegate personnel for the purpose of observing the operation of the Equipment and to make inspections. Such personnel shall have unlimited access to the operating records during the period of the Reliability Guarantee. The Customer shall use commercially reasonable efforts to report promptly to the Contractor actually observed changes in operating condition, operating abnormalities, unplanned shutdowns of the Gas Turbine, and faults and defects in and malfunctions of the Equipment. Such reports shall be made in writing by facsimile transmission or other means of transmission approved by the Contractor. Oral reporting shall be deemed to comply with this requirement provided that it is confirmed in writing in the following 48 hours. 6.4 Exclusions For the purpose of calculating the Reliability, the circumstances listed below shall not be considered as outage (unreliability): • Outages due to defects for which the Contractor is not responsible within the Contract. • Outages necessary for the performance of engine soak washing or air intake filter exchange. • Periods when the Equipment is not in operation due to Customer's decision. • Outages due to reasons outside the Equipment for which the Reliability is calculated. • Force Majeure or non -reliability caused by part of the Plant other than the Equipment. • Days of outage arising directly out of lack of Special Tools or Reliability Guarantee Spare Parts that are necessary to make repairs. 2007-07-30 Created on 30/08/2007 07:43:46 01910/0038 160594.3 Appendix 8 Page 6 of 8 Additional Terms and Conditions for RELIABILITY GUARANTEE Vernon SCHEDULE I TO APPENDIX 8 Reliability Guarantee Sample Liquidated Damages Calculations Assume Contract Value = $22,475,000 USD Maximum LD's = 7.5% x $22,475,000 = $1,685,625 (This assumes that the entire Contract Price has been paid by the Buyer; actual Maximum LD's at any given time will be the full amount of the Contract Price that has been paid to date at the time of the non -reliability.) After the first 1400 non -reliable hours, the dollar value for further non -reliability is $281 per hour for either Gas Turbine and $561 per hour for the Steam Turbine. After the first 1,400 non -reliable hour for a specific Gas Turbine, if that one Gas Turbine is non -reliable for additional hours (and the Steam Turbine is reliable), the LD's are $281 per hour of non -reliability. If both Gas Turbines have been non -reliable for 1,400 hour and are non -reliable for additional hours (and the Steam Turbine is reliable), the LD's are $561 per hour of non -reliability. If the Steam Turbine has been non -reliable for 1,400 hours, and is non -reliable for additional hours, the LD's are $561 per hour of non -reliability, in which case no additional LD's would be payable for that period of non -reliability, even if one or both of the Gas Turbines are also non -reliable at the same time. That is, there is no event whereby the LD's will reach more than $561 per hour. As an example: o Assume that one Gas Turbine and the Steam Turbine exceeded the 97% threshold while the other Gas Turbine ran at 93.4% reliability. That would mean it was out of service 100% — 93.4% = 6.6% of the time that Customer wanted it to be operational. Based on 40,000 EOH of desired availability, if the Gas Turbine is not available 6.6% of the time, then 40,000 EOH x 6.6% = 2,640 hours of non -reliability. o The calculation threshold has been set at 97.0% or 40,000 x 3.0% = 1,200 hours. Because the LD's are payable on the basis of 0.5% for each full 0.5% by which the Turbine misses the guaranteed reliability of 97%, the first dollar paid actually starts at 96.5% reliability (when the Turbine has been down at least 1,401 hours), at which point the first full 0.5% is due. o Therefore the LD's due are 2,640 hours of downtime —1,400 hours of permitted downtime = 1,239 hours of non -Reliability x $281/hour = $348,159. • Once the non -reliable Gas Turbine is back on line, its counter holds at the 2,640 hours. If there is another Reliability issue for that Turbine of, for example, 2%, the cumulative reliability drops to 91.4%, and the calculation would be 100% - 91.4% = 8.6% non -reliability. The non -reliability of 8.6% x 40,000 EOH = 3,440 hours of non -reliability. 2007-07-30 Created on 30/08/2007 07:43:46 01910/0038 160594.3 Appendix 8 Page 7 of 8 Additional Terms and Conditions for RELIABILITY GUARANTEE Vernon o LD's would be 3,440 hours - 2,640 hours = 800 hours of non -reliability x $281 = $224,800. Hence total LD's paid would be $224,800 + $348,159 = $572,959 against a cap of $1,685,625 (based on 7.5% of $22,475,000). 2007-07-30 Created on 30/08/2007 07:43:46 01910/0038 160594.3 GRAPH TO APPENDIX 8 Page 8 of 8 o C n r.. O O N O QN r O N E C U o s �+ coo. r- 0 C) m K � o m N d � c o C L in 1!4 Cc C N L O N � N H o J U r U I I O O O O CD N pOp � d0' $sn - S,a-i O Cl 00 O O O N E!4 Efl � I 0 O a r,. O O O N O O O T -74_1_b LLI 24 a o� 10 a ca x a 0 a a Q co O C co R m O d m0 oN 4.0 R t2. tb ` N n C4 'CAL u c v+ G N c 0 In 9 0 z cammml CD T CV C V N N 11' ) d' � mmmmm m00m pC7G7600000 ¢¢Qa4Qaaa n.CLCLdman.aa mmmmmmmmm 0 0 0 0 0. 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W) IT N N N T T r N y co W 00 y N r r a� N h~ LO y r W n O H 4Lh E17 E o O Lh1�1t0Np� Er�r0 E0 EOT�N M m 2 0 Ow InIOOaM�-�jp�-ArtUir mtiNoN0,.0_.NCn�tpr—O'Y7000 m a O t mm0M OOOC� � Ln N.p00N a00CA .0 04 V �p/p10N�Cf�NNN J =NON 7•!MM a m J :,)444eTJJ 7 c9MMJ v-44Q Q 0NNNN��FFI-�U)NNNNLL�[nNF-N��FFF�Cn O 00000 tO LO U)0 U') 0 CO VOO 0000 0000 CO M M M f- CD cp cfl P- O M M 1- r, 0) m 0 p" � r r r n QNCQ4C0 QQQQO NNN NNCQ�I0 Or NNN N r N NN O OLOptA C=)LO N 06 zi5a lnOLO E t�AOtOO� 0 p� Ln0CD NNMM d'QtnU')to C01-I.-00 00m0)LO AN04N NNNNN NNNN NNNN �% N NNNNN 0 E m r N MMd� C i-- r- r N N Cl) Q Q Q Q O O O O cLO oo w v -It ctdd MMM M (M M M r r— q N N N N N N N m tOn to tLO to M to 2 N N N N N N N L)u0Q � t3UUU U UUUUUUUUUc:UUUIL)U ae.c.ao.aae.a.aaaa M aaan.a 0 r >, er�0or 04 C'J OOo Otn Nq to trt>Drn i T OrN r r N M NN N f~ d m O C! 0 O 0 N H G � � C v Lco N LL o r 0 7 C N X U N ii. V O O p N .19 `Q i m N to d V/ � >Z �` H +�-' � o O � m m m G W U 1n d m C to V r w '�0 'C V N L7 d C J C m i' c .01 "�." tw o N C N +�+ W ` C ems+ O m Q C Q m a m d m a Q m m m an d is M .�+ m w v c O O Q® 19 scs9) 9)U),�. r-m ooCL0 C4 .a.0A>.aa o ema a to faQ ° a m mQ ° o on a m v av c 2 c m w n E s c tam �.. �`Z'�''c=�c o o o mx�c n a 0 o'f,c1 nF c �.m 0.2 m m m m cc 0 aaaw a R �' o—.c 0 o E E E— m m m u+ W o 0 0 0� tv o oc7 a� P1'�J W W WUapag� 2 JJJJfo.flJJJU).02 O � N C4 O O M LoLoCtLo TNr t)tol+rNNrNMNr0O is eil M'c� e� �(V NtV ej'Mq NOD NT-rin Ito tD to OOQNNNO(0(D O N co 010D yp pOt7O�t0 Of ►r l�t�O y1�CO h ko to M(M '7 d'�tO to tO to 0 to Of nN �r'��d �rONrNN060D OD OO t70r O�W (�(Trr Z @ rrrr� ti ujQtir• des l�A.CIA •mrap r^raaaaaataot to WO �tra-),r�*QO rOa-NNaNNaNNattraD(1 r000000�NONMNNnin Ln O�!MMMM"7WOO0t0 7O .�M coi-�naraa CD O O O o to to to o to to to to in to to to to tin to to to to to to to to NNNN d'dI'7�T *It ITddd'dnntdnIqu toto 0000r- to to to to to to to tD to to to 1n to In to to to to to W NN N N t r �V N` _V •N`=NNNNNNNNNNNNNNNN f OtnO to 01000 O(n6tnOin O tt)O t C) 25tOOtnOtn to (G (O I- t- 00 0o 0)0 0 0 r r N N M M E O r r N N m M d• d' to N N N N N N N N N N N N N N N N N N N co N co N N N m N N E _d } Cl) co Q C9 z M O r � O � t0 m m O +O a N Q. co L a zN N AN z c m aY�aaaay.aa r!")to0000Nr M N N r r 0 r J O F- ti X a M d W 3 N N M D7 fp � ld U) m m W czcc m m Aco �= N C1 m oouwmm c s v �n N t9 £ M r O O r N%- TC? 0t003J� r 4 c 1. 4 4 r 7 00 CO CD W LU a c6 00�0OIffOOV% y �-rQQQQQQ�'P LO M 00 u> io In In O C aVvd,VV'I }'i- 0 u7 M UO to to 0 0 0 (D � O�OLOWwr-rl-M ��toloCDCDh h�� N NNNNNNNNNi1i c N y C OI 0 Q) C LU N 0 �cn2ch IV 25 Appendix 8.2 Document number Edition Service Product Information X1CS19051 5 SIEMENun Date Page Vernon 2006-06-12 1 (7) Preventive Maintenance Maintenance plan- SGT-800 / GTX 100 Instrument and tool kit Standard document — may be changed without previous notice Instrument and tool kit to SGT-800 t GTX10O The final result of the work carried out during the inspections and overhauls depends mainly on skilled people with good tooling. In order to achieve high standard work both in quality and safety during disassembly and assembly of the gas turbine components, Siemens has developed a specific tool kit. These indispensable tools are available in boxes for each inspection level, for hire or purchase. The tools must be available on site before inspection or overhaul. If any of the Tools listed in Options 140 or 142 are not at the Site when needed during a time when the Supplier's Reliability Guarantee is in force, the provisions of Paragraph 13.2 of the Contract shall apply. Maintenance tools for SGT-8001 GTX100 The tools listed below are included in a standard complete maintenance tool kit. V Uon Item* 14u — 1 UUI5 lui ti-sum c�asuu. Name of the tool Barring tool Q. 1 The vurpose of the Tool For hand barring of rotor at boroscope inspection and trim balancing Change of transmitter For plug removal at borescope and trim balancing For assembly and disassembly of balancing weights 1 2 Barring tool (quill shaft) 1 3 Seal plate Transmitter assembly/disassembly tool 10-14mm hexagon key 1 1 1 5 6 7 27mm hexagon key Screw driver, complete 1 1 8 9 Screw driver l Box for maintenance tools, level A 1 * Item number according to Group Specification 2421646 --- -- — - We reserve all rights in this document and in the information contained therein Reproduction, ® Siemens Industrial Turbomachinery AB use or disdosure to third parties without express authority is strictly forbidden. issued by: celil Checked by: Approved by: Document number Edition Service Product Information XXlCS19051 5 SIEMENDale Pace 2006-06-12 2 (7) Preventive Maintenance Maintenance plan- SGT-800 / GTX100 Instrument and tool kit , A'7 -r__i, f,., n_ r- and Minsneetinn (excluding generator rotor withdrawal). U tlVu Item* j'ff. - ■ VVIO U. y , v ... , Name of the tool I -___- Q. I The purpose of the Tool B 21 Blocking bar, 0=50mm 1 Block the rotor in fixed position before removal of turbine outlet casing Turbine intermediate cone tool (use with pos. 247 & 248) Outlet and turbine casing lifting tool 22 Blocking bar, 0=30mm 2 23 Measuring probe, assembly 1 24 Measuring probe, assembly 1 26 29 T-bar screw Threaded bar 4 3 30 Washer 6 31 33 Hexagon nut Lifting tool 6 1 34 Lifting eye bolt, M24 I 35 Lever winch, 3 tonnes 2 36 Shaft extension I Guiding of outlet casing Lifting tool for covers on outlet casing and turbine bearing 37 Hexagon screw 1 38 Clamp screw 2 40 Screw driver Lifting tool, bearing and cover 1 1 41 44 Pallet support Scale link Hydraulic tensioner, M30x2 2 1 9 Pallet support for outlet casing Verify lifting weight of modules Turbine tie bolts and module splittin 46 51 52 Hydraulic tensioncr, M30x3,5 Hydraulic pump, 1725 bar 4 I Studs for turbine casing For tensioners Lock position between stator and rotor of the turbine module during D/A 53 54 Hydraulic hose, 3m long 10 55 61 9 Con. hydraulic block Tools for turbine 1 1 62 Threaded sleeve 6 Removal of turbine module 63 Guide bolt 4 64 Jacking bar 4 65 Retainingcap4 66 Module splitting bar 4 67 Washer 4 Washer 4 ff Screw, M36x2x160 4 Group We reserve all rights in this document end in the information contained therein. use or disclosure to third parties without express authority is strictly forbidden. ® Siemens Industrial TurAomachinery AB ._/ SIEMENS Service Product Information Preventive Maintenance Maintenance plan - Instrument and tool kit Document number Edition XX 1 CS19051 5 Date page 2006-06-12 3 (7) SGT-800 / GTX100 Option 142 — Tools for B-, C- and D-inspection (excluding generator rotor withdrawal), continued Item* Name of the tool Q. The purpose of the Tool B 70 Guide pin 8 Removal of turbine module 71 Screw driver 2 72 Screw 4 73 Screw 25 74 Screw 16 75 Hexa on nut 25 76 Hexagon nut 4 77 Hexagon nut 4 78 clamp screw 10 79 Clamp screw 11 80 Clamp screw I1 81 82 83 Stage 1, disassembly segment Stage 2, disassembly segment Stage 3, disassembly segment Stage 4, disassemblysegment 4 4 1 4 4 Splitting of turbine disc, stage 1 Slitting of turbine disc, stage 2 Splitting of turbine disc, stage 3 Splitting of turbine disc, stage 4 Splitting rod ring 1 Support for splitting of turbine discs F87 Backing ring Splitting rod ring 1 1 Slitting of discs Support for splitting of turbine discs Splitting rod 18 Splitting of discs Locking rod 18 90 Stage 3, turbine disc protection ring 1 93 Adjusting washer, 7,7 4 94 Adjusting washer 1,5 12 95 Guide sleeve 1 97 Hexagon bolt 45 98 Hexagon bolt 27 99 Hexagon bolt 9 100 Hexagon bolt 48 101 Hexagon nut 90 102 W asher 1 17 103 E e bolt 2 104 Washer 4 105 Hexagon bolt 4 * Item number according to Group Specification 2421640 We reserve all rights in this document and in the information contained therein. Reproduction, use or disclosure to third parties without express authority is strictly forbidden. Siemens Industrial 7urbomachlnery AB SIEMENS Service Product Information Preventive Maintenance Maintenance plan - Instrument and tool kit Document number Edison XXl CS19051 5 Date Pege 2006-06-12 4 (7) SGT-800 / GTX100 Option 142 — Tools for B-, C- and D-inspection (excluding generator rotor withdrawal), a.v as aaa w Item* vw. Name of the tool Q. The purpose of the Tool B 106 Puller, intermediate ring I Removal of intermediate ring 107 Puller, sealing ring 1 4 Removal of sealing ring 1 108 Puller, sealing ring 2 4 Removal of sealing rin 2 III Lifting tool, disc 1+2 1 Liftingof turbine discs 1 and 2 112 Lifting tool, disc 3 1 Lifting of turbine disc 3 113 Sleeve 2 Lifting of intermediate rings 115 Lifting eye bolt, M10 2 Liftin of intermediate rings 116 Lifting eye bolt, M42 1 Lifting of rotor hub 117 Lifting eye bolt, M12 2 D/A of turbine module 118 Clamp screw 13 119 Lifting ring I 120 Eye bolt 3 121 Location pin, intermediate rings 2 Assembly of intermediate rings 122 Locating block 2 l23 Locating block 2 124 Location pin, disc 2 2 Assembly of turbine disc 2 in, disc 3 2 Assembl ofturbine disc 3 Location pin, rotor hub 2 Assembl of rotor hub Washer, 0=50mm 2 Lifting of intermediate rings Support ring, assembly 1 Fixture for assembly of turbine module r125Location Location in disc 1 2 Turbine module splitting Location pin disc 1 2Hexa on bolt 2 Hexa on bolt 2 Spacer 1 134 Hexagon bolt 1 135 Hexagon nut 1 136 Washer 1 138 Clamp, assembly 1 Assembly of locking plates for turbine blades 145 Combustor handling tool 1 Handling of combustor 146 Hexagon screw 14 147 1 Bow schackle I * Item number according to Group Specification 24L164d reserve righ all ts in this document and in the intormation contained therein Reproduction, We — © Siemens Industrial Turbomachinery AB do use or dssure to third parties without express authority is strictly forbidden. SIEMENS Service Product Information Preventive Maintenance Maintenance plan - Instrument and tool kit Document number Edition XXlCS19051 5 Date page 2006-06-12 5 (7) SGT-800 / GTX100 Option 142 — Tools for B-, C- and D-inspection (excluding generator rotor withdrawal), continued. Item* Name of the tool The —purpose of the Tool B 148 Bow schackle Handhn of combustor 149 Protective hood fl60 Protective hood for fuel injector 150 Protective hood 151 Protective hood 152 Protective hood 60 155 Tool, inlet guide ring 1 Lifting and D/A of guide vane 156 Tool, inlet guide ring - plate 1 158 Hexagon bolt 3 159 Hexagon nut 3 161 Pipe location tool, front pipe 1 Location tool assembly 162 Pie location tool 1 163 Hexagon screw 4 165 Ring bolt 3 Turbine module splitting Turbine intermediate cone tool 166 Hexagon bolt 3 167 Washer 3 168 Hexagon bolt 4 Hexagon nut 4 Washer 8 Ring bolt 2 P Spread washer Transport lock 4 8 Hexagon nut Box for maintenance tools, level B 16- 1 * Item number according to Group Specification 2421646 We reserve a!I rights in this document and in the information Contained therein. use or disdosure to third parties without express authority is K4dy forbidden. ® Siemens Industrial Turbomaohinery AB 11 an number SIEMENS Service Product Information XX1CS19051 Edition Date page 2006-06-12 s (7} Preventive Maintenance Maintenance plan- SGT-800 / GTX 100 Instrument and tool kit Option 142 — Tools for B-, C- and D-inspection (excluding generator rotor withdrawal), continued. Item* Name of the tool Q. The purpose of the Tool C 50 Hydraulic tensioner, M90x6 l Compressor coupling 175 Stage 2 stator tooling, assembly 1 Lifting and D/A of stator, stage 2 176 Stage 3 stator tooling, assembly 1 Lifting and D/A of stator, stage 3 shaft) 182 Lifting block 1 183 Lifting device, assembly 1 184 Track, assembly 1 191 Lift tool coupling, assembly 1 Removal of compressor coupling 192 Key 1 193 Blocking sleeve, assembly 1 Lock position of rotor during disassembly of compressor bearing 194 Bearing support bracket, assembly 1 Removal of compressor coupling 195 Threaded bar 1 Removal of compressor bearing 198 Pin -Comp. setting 4 Guide vane control 201 Chain sling 1 Removal of compressor stator 202 Eye bolt, M24 3 205 Lifting frame 3 Removal of compressor stator 206 Hexagon screw 3 207 Hexagon nut 3 213 Inner compressor casing build plate 1 Assembly of compressor stator 224 Bending tool l D/A com . blades Box for maintenance tools, level C and D l * Item number according to Group Specification 2421646 We reserve all rights in this document and in the information contained therein. Reproduction, use or disclosure to third parties witfW express authority is strictly forbidden. 0 Siemens Industrial TurbonlWhfnery AB SIEMENS Service Product Information Preventive Maintenance Maintenance plan - Instrument and tool kit Option 141— Tools for GT-exchange. Doctanentnumber Edition W CS 19051 5 Date Page 2006-06-12 7 (7) SGT-800 / GTX 100 Item* Name of the tool Q. The a ose of the Tool 11 Beam I D/A Quill shaft 12 Hexagon bolt 4 13 Hexagon nut 4 29 Threaded bar 3 Turbine intermediate cone tool (use with pos. 247 & 248) 30 Washer 6 31 Hexagon nut 6 233 Su port block 4 GT exchange 234 Engine lifting beam 1 235 Jacking late, 5 tonnes 2 236 Jacking plate, 20 tonnes 2 237 Roll block, 5 tonnes 2 238 Roll block, 20 tonnes 2 239 Hydraulic jack, 5 tonnes 2 240 1 Hydraulic jack, 20 tonnes 2 247 1 Transport lock 8 Turbine intermediate cone tool 248 Hexagon nut 16 GIMX Gas turbine roll out frame 1 Box for maintenance tools, level GT- exchange 1 * Item number according to Group Specification 2421646 or design department and Group Specification 2030234 OnfFinn 1 dl — Tank far generator rotor withdrawal v Item* Name of the tool The purpose of the Tool GIMX Roll -out frame 1 Removal of electrical generator rotor GIMX Lifting tool kit 1 GIMX Lifting tool kit, option when electrical generator is driven from both sides 1 ABB M&M I Tool kit 1 * Item number according to design department and Group Specification 2030280 or 2030281 and 2036455 (option) or sub -supplier and drawing 3BSM004360-A. We reserve all rights in this document and in the information contained therein. Reproduction, use or disclosure to third parties without express authority is strictly forbidden. 0 Siemens Industrial Turbotnachinery AB V 26 Appendix 9 Page 1/2 Additional Terms and Conditions for PERFORMANCE REQUIREMENTS Vernon 1. MMODUCTION Upon completion of Level B and C Overhauls, the Contractor will perform work for the Customer, on the terms set forth below, in connection with meeting certain heat rate and output requirements (the "Performance Requirements' from each of the two Gas Turbines in accordance with the additional terms and conditions set out below. The Contractor will perform work for the Customer so that the performance levels from each Gas Turbine after the completion of each Level B and Level C Overhaul will meet the Performance Requirements established by the Customer. 2. EVALUATION Customer will determine whether the Performance Requirements have been satisfied, and Contractor's continued work to meet the Performance Requirements will be covered by Customer's purchase order issued separately at that time, except for obligations of Contractor as set forth in Clause 3 (Remedies) below. 3. REMEDIES If on completion of the performance test following the B and C Overhauls, the heat rate and power output are not acceptable to the Customer, the Contractor shall replace all defective or nonconforming Program parts or Program parts that are not proper and appropriate for the Equipment at Contractor's cost until the Performance Requirements are satisfied. Any parts outside of the Program Spare Parts that are required to be replaced shall be covered by Customer's purchase order issued separately at the time; provided, however, that if the performance does not fulfil the Performance Requirements set forth in Clause 2 above as a result of or caused by work carried out by the Contractor (including Contractor's subcontractors, employees, or personnel hired by Contractor for performance of the Overhaul) or part(s) replaced by the Contractor that are defective or nonconforming or not proper and appropriate for the Equipment, as required by this Contract, such shortcoming shall be remedied in accordance with the warranty clause in Section 15 of#die Contract. In addition, the Contractor shall make available, as requested b)c the Customer and at the Customer's cost (at Contractor's then current published rates for such personnel) qualified and knowledgeable personnel with expertise in "tuning" the Equippent'after the Overhaul to ensure that the Equipment meets the Performance Requirements. Contractor shall ensure that all personnel selected by or employed by Contractor are familiar with the Equipment and are skilled, knowledgeable, and qualified to perform the tasks that are required to achieve the standards required for satisfaction of the Performance Requirements. Contractor shall ensure that such personnel remain at the Plant during their assigned times or shifts, and do not leave the Plant for another job or to return home until Customer has approved, in writing, their departure. Customer shall approve a person's departure after the required task has been completed, or if the person's departure will not adversely affect the outage or the schedule, or after Contractor has provided a substitute person with comparable experience, skills, and knowledge. In the latter case, the Contractor shall ensure an overlap of these personnel to ensure an effective handover of responsibilities at the Plant. I 01910/0038 1590177 4107 V4 Last yawed 200749-21 VSW ]61mn07 r�� Appendix 9 Page 2/2 Additional Terms and Conditions for PERFORMANCE REQUIREMENTS Vernon 4. CONDITIONS The Performance Requirements assume the following conditions: The Plant has during the full performance test period been operated on a continuous steady-state 100% base load and has not been exposed to more than 50 EOC (Equivalent Operating Cycles) per year. • The Plant has during the full performance test period been operated in accordance with the Customer's Manuals. • The Plant has during the full performance test period been operated exclusively on natural gas, i.e. no oil operation. The fuel used fulfils the requirements in Appendix 15 of the Contract • Gas Turbines and air filters shall be in clean condition and evaluated power output shall be corrected to the actual Gas Turbine inlet and outlet pressure losses. • The evaluation is conducted immediately upon completion of the respective overhaul. The Plant is operated in a continuous steady-state 100% base load during the evaluation. Anti -icing is not in operation. 6. VALI DrrY This agreements set forth in this Appendix are valid up to and including the completion of the C-level overhaul at 40,000 EOH or until the expiry of the Contract I 01910/00381590172 4/07 V4 Lag WiWO& 2007-08-21 VSW 26J=07 27 Conditioning Monitoring System AGREEMENT Appendix 10.1 1 of 2 Additional Terms and Conditions for analysis of Condition Monitoring System (CMS) data Below Terms and Conditions shall prevail when the Supplier is performing analysis of data stored in the Purchaser's Condition Monitoring System, hereinafter referred to as the CMS. The Purchaser has purchased a PI System for monitoring operations at the Plant, sized in accordance with Supplier's recommendation to fit the CMS, and Supplier shall install the CMS so that it connects and interfaces with the PI System. 1. The Supplier's obligations 1.1 Analysis The Supplier shall, at the Purchaser's request, once a month perform an analysis of CMS data from the latest month of operation. Operational data to be analysed is submitted on CD/CD's by the Purchaser. The Supplier shall in writing (fax, or E-mail) notify the Purchaser that he has received the CD/CD's with stored operational data. Latest 10 days after reception of the CD/CD's, the result of performed analysis shall be presented to the Purchaser in a standardised report template. The responsibility for operation and maintenance of the Purchaser's power plant will under all circumstances stay with the Purchaser. 1.2 Remote support The Supplier shall on the Purchasers request, via a remote client, connect to the Purchaser's CMS in order to assist the Purchaser with possible trouble shooting and/or operation optimisation. 2. The Purchasers obligations 2.1 General The Purchaser shall before delivery of the CMS sign a SLA's (Software License Agreement) valid for the historical database (PI), which the CMS is based on, and for the Siemens developed and configured software. 2.2 Analysis The Purchaser shall once a month store operational data from the latest month of operation on one or several CD's and send it/them to the Supplier for analysis of stored data. The Purchaser is responsible for that submitted data is correct. CANrP0rthBLAD0CSW\]6]731 _1.DOC 019I0/0038 161731.1 0 Conditioning Monitoring System AGREEMENT Appendix 10.1 2 of 2 The responsibility for operation and maintenance of the Purchaser's power plant will under all circumstances stay with the Purchaser. 2.3 Remote support The Purchaser is responsible for keeping an ISDN or DSL or T-1 subscription, necessary for the Supplier to connect to the Purchaser's CMS from remote. When there is a need for remote connection, it is the Purchaser's responsibility to initiate that by requesting the Supplier to connect to his CMS from a remote client. 2.4 Software upgrading When the Supplier submits an upgrading of CMS software, the Purchaser shall without delay make sure that his CMS is being upgraded with the new software. Until the Purchaser has upgraded his CMS, the Supplier is not obliged to fulfil his obligations defined in clause 1.1 and 1.2 of this appendix. C:1NrPortb1\LAUOCS\SS\161731 LDOC 01910/0038 161731.1 2s Siemens Industrial Turbomachinery AB SOFTWARE LICENSE AGREEMENT City of Vernon CMS -system with maximum ❑ 1000 tags ❑ 2 000 tags ❑ 5 000 tags ❑ 8 000 tags ("Effective Date") Siemens Industrial Turbomachinery AB ('SIT') Slottsvagen 612 83 Finspang SIT and Licensee hereby agree as follows: Definitions 1.1 "Software" means all (own and acquired) software originally installed by SIT in the CMS computer consisting of modules that are designed to operate on either a server ("Server Softwere'l or a client computer ("Client Software'] or both; and (ii) all related documentation, bug fixes and updates made available to Licensee by SIT. 1.2 "Clients" means the number of client computers onto which Licensee may install Client Software or from which Licensee may otherwise access the Server Software. ('Licensee") 2. License Appendix 10.2 (1 of 4) 2.1 License Grant. Subject to the terms and conditions of this Agreement, SIT grants to Licensee a nonexclusive, nontransferable (except to a new owner in the event of a sale of the Plant that uses the Software) license to use the Software, solely for Licensee's internal use. SIT will, from time to time, incorporate new solutions into planned updates to the Software, as applicable, ('Updates'). Such Updates may also include minor improvement and extensions or other changes to the Software as are determined by SIT to be suitable to the use of Software. SIT will provide such Updates as they are released. SIT will provide Licensee with such instructions and/or documentation that SIT considers reasonably necessary to assist in a smooth transition to use of such Updates. In the event SIT decides in its discretion to update the appropriate software reference manual or to issue release notes or other documentation corresponding to Updates, SIT will provide one copy of the same to Licensee. 2.2 License Restrictions. In using the Software, Licensee will not exceed the number of Tags or Clients received by Licensee from SIT defined above and licensed under this Agreement. Ucensee agrees that it has no right to: (i) modify the Software or to permit any third party to do so; (ii) copy the Software; (iii) incorporate updates of Software without SITS prior written approval; or (iv) install any software in to the hardware where Software is installed. Licensee acknowledges that Software contains trade secrets of SIT, and in order to protect such trade secrets, Licensee agrees not to disassemble, decompile or reverse engineer the object code of the Software, nor permit any third party to do so, except to the extent such restrictions are prohibited by law. 2 of 4 2.3 Limited Rights. Licensee's rights in the Software will be limited to those expressly granted in this Section 2 and SIT reserves all other rights, title, interest and licenses therein. Portions of the Software are unpublished and SiT reserves all rights therein. 2.4. Audit Rights. At SIT's written request, Licensee shall furnish SIT with a certification signed by an officer of Licensee verifying that the Software is being used pursuant to the terms of this Agreement. In addition, with or without prior written notice, SIT may audit licensee's use of the Software to ensure that Licensee is in compliance with the terms of this Agreement and any Order. Any such audit shall be conducted during regular business hours at Licensee's facilities and shall not unreasonably interfere with Licensee's business activities. Licensee shall provide SIT accesses to the relevant Licensee records and facilities. If an audit reveals that Licensee has underpaid fees to SIT , Licensee shall be invoiced for such underpaid fees based on SiT's subsupplier standard price list in effect at the time the audit is completed. Licensee shall promptly deliver to SiT any unpaid fee for any errors or omissions disclosed by such audit Licensee shall pay SIT an additional fee of twenty-five percent (25%) of the applicable unpaid fee disclosed by the audit. If the underpaid fees exceed five percent (5%) of the license fees previously paid by Licensee, then Licensee shall also pay SIT's reasonable costs of conducting the audit 3. Payment Except as otherwise expressly agreed by the parties, Technical Services ordered for use by Licensee or a Licensee Subsidiary shall be at SIT's then -current list price, catergory "Specialist" as modified at SIT's sole discretion. 4. Limited Warranty. SIT warrants that, for a period of one (1) year after delivery of the Software, the Software will function in accordance with the accompanying documentation in all material respects. As Licensee's sole and exclusive remedy and SIT 's entire liability for any breach of the foregoing warranty, SIT will repair or replace, at no additional charge to Licensee, any Software that falls to meet this limited warranty. The limited warranty set forth herein shall automatically become null and void if a party other than SIT modifies the Software in any way. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION, SIT MAKES NO WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED, AND SIT EXPRESSLY DISCLAIMS ANY AND ALL SUCH OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONiNFRINGEMENT. SIT does not warrant that the Software will be error -free or that it will function without interruption. 5. Limitations of Liability. EVEN IF ANY REMEDY SET FORTH HEREIN FAILS OF ITS ESSENTIAL PURPOSE OR OTHERWISE AND REGARDLESS OF WHETHER A CLAIM ARISES UNDER CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF WARRANTY, STRICT LIABILITY OR OTHERWISE, AND WHETHER OR NOT SIT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES, IN NO EVENT: (i) SHALL SIT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGES OF ANY KIND (INCLUDING LOSS OF USE, DATA, BUSINESS OR PROFITS); (ii) FOR CLAIMS THAT ARE COVERED BY THE INSURANCE POLICIES SPECIFIED IN SECTION 4 SHALL SIT'S TOTAL LIABILITY EXCEED THE INSURANCE POLICY LIMITS SPECIFIED THEREIN; NOR (iii) FOR CLAIMS THAT ARE NOT COVERED BY THE INSURANCE POLICIES SPECIFIED IN SECTION 4 SHALL SIT 'S TOTAL CUMULATIVE LIABILITY HEREUNDER EXCEED THE TOTAL SERVICE AGREEMENT FEES PAID BY LICENSEE TO SIT UNDER THIS AGREEMENT OR TWO HUNDRED FIFTY THOUSAND (250,000) EURO, WHICHEVER IS GREATER. The parties expressly agree that the allocation of risk contained in this Section is an essential basis of this Agreement. 6. Confidential Information. "Confidential Information" means the Software and any business or technical information that is marked by a party as 'confidential" or "proprietary" at the time of disclosure. SiT Confidential Information shall also include any information derived from or developed with reference to SIT Confidential Information. The receiving party will not use or disclose any Confidential Information of the other party except as expressly permitted herein and will use all reasonable measures to maintain the confidence of all such Confidential Information, which measure will in no event be less than the measures that the receiving party takes to protect its own confidential information of similar importance. Confidential Information will not include information which: (i) is or becomes publicly available without fault of the receiving party; (ii) is independently developed by the receiving party without use or access to the Confidential Information; and (iii) was known to the receiving party prior to its receipt of the Confidential Information from the disclosing party and is not subject to other restrictions on disclosure or use. 7. Term and Termination. Either party may terminate this Agreement if the other party breaches any material term, and such breach remains uncured for thirty (30) days after receiving notice thereof. In the event of any termination of this Agreement, the parties agree to return or at the other party's request destroy ail of the other party's Confidential Information within three (3) business days and without limiting the foregoing, Licensee will return or at SIT's request destroy all copies of the Software within its possession or control. Licensee may terminate its license under this Agreement at any time by destroying all copies of the Software and Confidential Information. Termination of this Agreement by either party will be a nonexclusive remedy for breach without prejudice to any other right or remedy of such party. The rights and obligations of the parties contained in Sections 3 and 5 through 8 will survive the termination of this Agreement. 16239/00100/S F/831312.8 3 of'4 2.3 Limited Rights. Licensee's rights in the Software will be limited to those expressly granted in this Section 2 and SIT reserves all other rights, title, interest and licenses therein. Portions of the Software are unpublished and SIT reserves all rights therein. 2.4. Audit Rights. At SiT's written request, Licensee shall furnish SIT with a certification signed by an officer of Licensee verifying that the Software is being used pursuant to the terms of this Agreement. In addition, with or without prior written notice, SIT may audit Licensee's use of the Software to ensure that Licensee is in compliance with the terms of this Agreement and any Order. Any such audit shall be conducted during regular business hours at Licensee's facilities and shall not unreasonably interfere with licensee's business activities. Licensee shall provide SIT accesses to the relevant Licensee records and facilities. If an audit reveals that Licensee has underpaid fees to SIT , Licensee shall be invoiced for such underpaid fees based on SIT's subsupplier standard price list in effect at the time the audit is completed. Licensee shall promptly deliver to SIT any unpaid fee for any errors or omissions disclosed by such audit Licensee shall pay SIT an additional fee of twenty-five percent (25%) of the applicable unpaid fee disclosed by the audit. If the underpaid fees exceed five percent (5%) of the license fees previously paid by Licensee, then Licensee shall also pay SIT's reasonable costs of conducting the audit. 3. Payment. Except as otherwise expressly agreed by the parties, Technical Services ordered for use by Licensee or a Licensee Subsidiary shall be at SIT's then -current list price, catergory'Specialist" as modified at SIT's sole discretion. 4. Limited Warranty. SIT warrants that, for a period of one (1) year after delivery of the Software, the Software will function in accordance with the accompanying documentation in all material respects. As Licensee's sole and exclusive remedy and SIT 's entire liability for any breach of the foregoing warranty, SIT will repair or replace, at no additional charge to Licensee, any Software that fails to meet this limited warranty. The limited warranty set forth herein shall automatically become null and void if a party other than SIT modifies the Software in any way. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION, SIT MAKES NO WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED, AND SIT EXPRESSLY DISCLAIMS ANY AND ALL SUCH OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. SIT does not warrant that the Software will be error -free or that it will function without interruption. 5. Limitations of Liability, EVEN IF ANY REMEDY SET FORTH HEREIN FAILS OF ITS ESSENTIAL PURPOSE OR OTHERWISE AND REGARDLESS OF WHETHER A CLAIM ARISES UNDER CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF WARRANTY, STRICT LIABILITY OR OTHERWISE, AND WHETHER OR NOT SIT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES, IN NO EVENT: (i) SHALL SIT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGES OF ANY KIND (INCLUDING LOSS OF USE, DATA, BUSINESS OR PROFITS); (io FOR CLAIMS THAT ARE COVERED BY THE INSURANCE POLICIES SPECIFIED IN SECTION 4 SHALL SIT'S TOTAL LIABILITY EXCEED THE INSURANCE POLICY LIMITS SPECIFIED THEREIN; NOR (iii) FOR CLAIMS THAT ARE NOT COVERED BY THE INSURANCE POLICIES SPECIFIED IN SECTION 4 SHALL SIT 'S TOTAL CUMULATIVE LIABILITY HEREUNDER EXCEED THE TOTAL SERVICE AGREEMENT FEES PAID BY LICENSEE TO SIT UNDER THIS AGREEMENT OR TWO HUNDRED FIFTY THOUSAND (250,000) EURO, WHICHEVER IS GREATER. The parties expressly agree that the allocation of risk contained in this Section is an essential basis of this Agreement. 6. Confidential Information. "Confidential Information" means the Software and any business or technical information that is marked by a party as "confidential" or "proprietary" at the time of disclosure. SIT Confidential Information shall also include any information derived from or developed with reference to SIT Confidential Information. The receiving party will not use or disclose any Confidential Information of the other parry except as expressly permitted herein and will use all reasonable measures to maintain the confidence of all such Confidential information, which measure will in no event be less than the measures that the receiving party takes to protect its own confidential information of similar importance. Confidential Information will not include information which: (i) is or becomes publicly available without fault of the receiving party; (4) is independently developed by the receiving party without use or access to the Confidential Information; and (iii) was known to the receiving party prior to its receipt of the Confidential Information from the disclosing party and is not subject to other restrictions on disclosure or use. 7. Term and Termination. Either party may terminate this Agreement if the other party breaches any material term, and such breach remains uncured for thirty (30) days after receiving notice thereof. In the event of any termination of this Agreement, the parties agree to return or at the other party's request destroy all of the other party's Confidential Information within three (3) business days and without limiting the foregoing, Licensee will return or at SIT 's request destroy all copies of the Software within its possession or control. Licensee may terminate its license under this Agreement at any time by destroying all copies of the Software and Confidential Information. Termination of this Agreement by either party will be a nonexclusive remedy for breach without prejudice to any other right or remedy of such party. The rights and obligations of the parties contained in Sections 3 and 5 through 8 will survive the termination of this Agreement, 16239/00100/SF/831312.8 4 of 4 8.4 Entire Agreement, Waiver and Language. This Agreement is the entire agreement between SIT and Licensee with respect to the Software and adherent Technical Services and their use. This Agreement cannot be amended except by a writing signed by both parties. The failure by either party to enforce any provision of this Agreement will not constitute a waiver of future enforcement of that or any other provision, This Agreement has been written in the English language , and the parties agree that the English version will govern even if a translation has been provided for Licensees' convenience. Licensee waives any rights Licensee may have under the law of Licensee's country or province to have this Agreement written in any language other than English. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective late through their duly authorized representatives. Each individual signatory below hereby represents and warrants that they have full corporate power and authority to execute this agreement and bind the respective parties to the terms and conditions of this Agreement. Siemens Industrial Turbomachinery AB Signature: Name: LICENSEE: Signature: _ Name: Title: 16239/00100/SF/8313118 29 Siemens Power Generation - Industrial Applications Field Service Rates f-fpe,�l Pi Y_ iJ SERVICES for USA (onshore) PRODUCTS: Siemens Steam Turbines & Compressors, Alstom Steam & Gas Turbines ►T100 CT IT01 r7 AW daily rate daily rate daily rate Hourly rate in Hourly rate in Personnel Mon - Fri Sat based on a ! Sun & Local excess of excess of based on a 8 i 8 hour work day holiday 8 hours worked 8 hours worked hour work days l based on a 8 y Mon- Sat Sun or Local j hour work day holiday SPECIALIST ENGINEER I $1760.00 US I $2640.00 US $3520.00 US i $330.00 US $440.00 US TECHNICAL FIELD ADVISOR $1440,00 US i $2160.00 US $2880.00 US $270.00 US $360.00 US FIELD SERVICE TECHNICIAN $1120.00 US $1360.00 Us $1600.00 US $170.00 US $200.00 US Round Trip Billing for One Way Travel Time of: Up to 3 hours Up to 8 hours Up to 12 hours USA! Canada Up to 12 hours International* Up to 18 hours* Up to 24 hours" Up to 36 hours* $1550.00 $4400.00 $6300.00 $5700.00 $8100.00 $10,400.00 $14,300.00 *Excludes airfare. Alrtare is muea at cost plus i 5% aamm►sirauon Tee. Daily Lump Sum Per Diem charge for Lodging, Transportation, Meals and Misc = $290.00 from arriving at location. Higher cost of living areas will be billed at cost plus 15% administration fee_ The above rates are in US Dollars and include expenses as referenced in the attached Conditions. Validity : From 2007-01-01 up to 2007-12-31 Conditions : General Conditions for Erection, Commissioning and other Services Charging appendix for field services issue 01-2006 Rev.2 Dec 2 08 a$r,3 Siemens Demag Delaval Turbomachinery, Inc. Conditions for the Sale of A Siemens Company Field & Engineering 840 Nottingham Way, Hamilton, New Jersey, U.S.A. 08650 Services Field & Engineering Services For Service on All Siemens Acquired Steam Turbines, Gas Turbines, Compressors and Pumps in the U.S.A. Effective January 1, 2007 Prices are subject to change without notice I. Selling Policy All prices contained herein are subject to the terms and conditions of the Siemens Demag Delaval Turbomachinery, Inc. Selling Policy for the Sale of Equipment and Services ("Selling Polic)i) in effect on the date an order is received. 11. Price Policy All rates and prices are subject to change without notice. Unless contracted otherwise, rates and prices for ongoing contracts will be those in effect at the time the work is performed. No personnel will be dispatched until a Purchase Order, Payment or written authorization acknowledging acceptance of Terms, Pricing and agreement to pay is received 111. Services Definitions Siemens Demag Delaval Turbomachinery, Inc. ("Siemens") offers three types of field and engineering services as defined below, in accordance with the price list attached. A. Supervisory and Specialist Services An engineer, project manager, technical field advisor (TFA) providing Supervisory Services and directing Siemens personnel or Customer personnel performing to Siemens procedures and process specifications. A job specific readiness fee will apply to all orders that are not firm priced, for supervisory services. This fee will cover pre job efforts and will be quoted separately. An engineer, manager or specialist providing Special Services also performs diagnostic and operational trouble -shooting and commissioning of rotating equipment. This work may be conducted onsite or by telecommunication_ Special Services Include diagnostic electrical testing, evaluation and set-up activities on control systems, voltage regulator systems and any on-line diagnostics. Level III NDE and balancing is also included in this type of field engineering service. Engineers located at Siemens home facilities, including District Offices and the Technical Support Center, provide technical studies and information relating to the design and operating parameters of rotating equipment. B. Technical Field Advisor (TFA) An engineer providing TFA renders advice and makes recommendations based on Siemens procedures and drawings during standard maintenance of existing and installation of new Siemens supplied rotating equipment to customers direct employees. By definition, standard maintenance includes disassembly, inspection, and replacement of parts, routine repair and reassembly. C. Field Service Technician A Field Service Technician generally performs the work required to be completed at site. By definition, this would include the disassembly, inspection, and replacement of parts, routine repair and reassembly of rotating equipment. It would also include the complete removal and re - Installation of the entire unit. IV. Bates Payable A standard day for on -shone work is classified as 8 hours working time. A standard day for off- shore work is classified as 12 hours working time. Minimum billing is the daily rate and will also apply to week day standby time. Weekend stand-by will be charged at % the daily rate, straight time per day that the representative does not work but remains within the vicinity of the site. Horiday stand-by will be charged as if it was worked. If the representative is able to return home then the costs of time and travel for the representative to go home and return to site will be charged accordingly. The daily rate applies to all time worked or traveled during an 8 hour work day or fraction thereof; that is, any consecutive 8 hour period in a weekday (Monday through Friday, holidays excepted) with an allowance for lunch time. The e day daily rates apply to all time worked or traveled on Saturday (holidays excepted) with an allowance for lunch. The 7`" day daily rates apply to all time worked or traveled on a Sunday or a holiday, locally observed by Siemens, with an allowance for lunch. Overtime rates also apply for time worked in excess of 8 hours. This is an hourly charge, based upon actual additional time worked in excess of 8 hour period. Two overtime rates apply; one for time worked in excess of 8 hours for the daily rate (Monday through Friday, holidays excepted) and the a day daily rate (holidays excepted), and one for time worked in excess of 8 hours for the r day daily rate. The daily rates are based on working days at site. Standby time not attributable to Siemens will be classed as working time. Time spent at the site shall be evidenced with timesheets signed by the Customer's authorized representative. The daily rates include the supply and use of basic PPE (Personal Protective Equipment) and the use of standard small hand tools, as required by Technicians. All rates shall be valid for the determined period of validity only. V. Traveling and Other Expenses Siemens policy for traveling and other expenses are assessed as outlined here: A. Travel and Expenses The daily labor rates exclude the following costs, which shall be for Customer's account and will be charged separately: a) Mobilization/Demobilization fees shall be charged at a graded fixed fee dependent on the required travel time from base location to site. Mobilization fees include preparation time, visa costs, all travel expenses including flights where relevant to mobilize and travel time plus accommodation costs to get the field service personnel to and from the onshore work site, or point of embarkation for off shore sites. The transport from the point of embarkation to an offshore location and back will be provided by the Customer free of charge. b) Mobilization/Demobilization fees applicable for International travel in excess of 12 hours shall be charged at a graded fixed fee dependent on the required travel time from base location to site. Mobilization fees include preparation time, visa costs, all travel expenses excluding flights where relevant to mobilize and travel time plus accommodation costs to get the field service personnel to and from the onshore work site, or point of embarkation for off shore sites. The transport from the point of embarkation to an offshore location and back will be provided by the Customer free of charge. c) Accommodation where not provided by the Customer will be charged on a lump sum daily basis. d) Meals and allowances will be charged on a lump sum daily basis. e) The daily allowance charge for accommodation, meals, transportation and allowances will be assessed for each calendar day an individual is assigned to a project including non -working weekend days for jobs extending over the week- end(s). f) Where the Customer provides accommodation and food it is to be to a standard which is acceptable to Siemens. In the event that this is, in our opinion, unsuitable, we reserve the right to find an alternative which will be charged for as above. g) Should an expedited mobilization be required an additional charge for excessive airfare may be applicable. All separately invoiced items over and above the daily rates will be charged with a fifteen percent (15 %) increase for handling and administration costs. Page No. 1 (7 %_ B. Departure Delay and Cancellation a) Departure delay —Standby in Home Base If the fixed date for the personnel delegation will be delayed due to reason by the Customer, Siemens is prepared to keep the nominated personnel on stand-by up to 7 calendar days. In this case Siemens reserve the right to charge a delay fee of the full applicable daily rate per calendar day. b) Departure Delay —At Point of Embarkation Should departure of personnel be delayed at the point of embarkation for any reason beyond Siemens control, the full applicable day rate will be changed per day of delay. Accommodation and meals where provided by Siemens will also be charged according to the published rates. c) Cancellation Where cancellation by the Customer is notified less than 7 days prior to planned mobilization, a cancellation fee of one single day at 100% of the applicable daily rate will be charged. Should any job be cancelled or postponed by the Customer after the representative has been dispatched then all costs incurred for time and expenses will be charged in accordance with the terms of this rate sheet. C. Home Leave a) For USA/ Canadian service personnel, when a project is expected to exceed 5 continuous weeks of duration, following every three (3) weeks of continuous attendance at an onshore site, including any days spent traveling, the Customer will allow each member of Siemens personnel an extended weekend home leave journey at the Customer's expense. For International personnel, home leave is permitted every two (2) months for 10 days b) If continuous attendance of Siemens personnel is required, then and on request, Siemens will delegate substitute personnel, mobilization rates would apply. c) Following every fourteen days of continuous attendance offshore, Siemens reserves the right to charge the Customer a further mobilization fee for each member of Siemens personnel. d) Days spent traveling with respect to home leave shall be charged at the applicable daily rate. Should any member of Siemens personnel cancel a home leave journey, the Customer shall be charged for the airfare (according to Siemens travel regulations) and/or other travel costs that are incurred by Siemens. D. Tools a) Charges for equipment, tools, measuring instruments and special assembly tools supplied with Siemens field service personnel for use by Siemens or its subcontractors will be quoted by your local Siemens representative. Costs of transportation (including all applicable transportation charges, insurance, customs/duties, etc.) will also be charged at cost plus 15%. The rental time applies from the day of dispatch from base to return receipt b) Siemens will catalogue the tools required to be returned to base. If for any event the catalogued tools are not returned within 30 days after leaving site, Siemens will charge the Customer the current replacement cost. c) Prices quoted will include normal replenishment and re -calibration. Excessive loss or damaged equipment, tools and instruments beyond the control of Siemens will be billed as an additional charge to the Customer. E. ShiftWork a) Shift work is defined as those circumstances where, in a given day, more than one service crew is engaged to perform the service activity. In such instances Siemens reserves the right to charge a shift premium In addition to the published rate sheets. Technical Consultation During on -site service work it might be necessary to involve specialists from Siemens headquarters for particularly complicated technical questions such as certain analysis, calculations or similar tasks. For such technical consultation Siemens will invoice this charge on an hourly basis according to the Specialist Engineer rates as defined in the published rates sheet. Where Technical Consultation is required to be provided at site, charges will be in accordance with the published rate sheets for Specialists and Engineers. Before such work is commenced a separate agreement has to be established, unless it is already agreed upon in the order. '?J 3 VI. Working Conditions and Special Costs Costs for factory security officers, medical services, industrial safety and supporting activities at the Customer site will be for the account of the Customer. In case of accident or illness, the Customer undertakes to provide immediate medical assistance and if necessary, to transfer any injured or sick person to a hospital preferably conforming to North American standards. Should repatriation become necessary as a result of serious illness or death, the Customer shall attend to all formalities and pay all the costs Incurred thereby. Should replacement personnel be required, the costs for same shall be home by the Customer. The Customer shall make available free of charge to Siemens personnel: office space, telephone, high speed Internet connection and telex/fax (communication with home office shall be free of charge) and all such other facilities as are available to Customer's own personnel. Any social amenities available at the job site or Introduced there during the progress of site work, as well as any special benefits granted, shall be made available to Siemens personnel in the same mariner and extent as accorded to any other foreign personnel at the job site. In the interests of avoiding language difficulties, the Customer shall, for own account, make available the services of interpreters, where work is being performed. VII. Additional Notes a) In the event Siemens uses outside or subsidiary personnel to perform services that would normally be performed by Siemens personnel, Siemens will invoice Purchaser for such personnel at the hourly rates published herein- b) Any non Siemens parts or materials supplied during the work will be charged at cost plus 25%. c) Siemens will supply engineers and technicians based on qualifications with priority given to qualified daily commuting personnel when available. d) For all other conditions, please refer to the attached selling policy. Page 2 30 Appendix 12 Page 1/2 Additional Terms and Conditions for EMISSIONS REQUIREMENTS Vernon 1. INTRODUCTION Upon completion of Level B and C Overhauls, the Contractor will perform work for the Customer, on the terms set forth below, in connection with meeting certain emissions requirements (the "Emissions Requirements") from each of the two Gas Turbines in accordance with the additional terms and conditions set out below. The Contractor will perform work for the Customer so that the emissions from each Gas Turbine after the completion of each Level B and Level C Overhaul will meet the Emissions Requirements established by the Customer for NOx emissions (evaluated as NO2), CO Emissions, VOC Emissions (evaluated as C3H8), and Particulates PM10. 2. EVALUATION Customer will determine whether the Emissions Requirements have been satisfied, and Contractor's continued work to meet the Emissions Requirements will be covered by Customer's purchase order issued separately at that time, except for obligations of Contractor as set forth in Clause 3 (Remedies) below. 3. REMEDIES If on completion of the emission evaluation or emission test following the B and C Overhauls, the actual emission levels do not meet the Emissions Requirements acceptable to Customer, the Contractor shall replace all defective or nonconforming Program parts or Program parts that are not proper and appropriate for the Equipment at Contractor's cost until the Emissions Requirements are satisfied. Any parts outside of the Program Spare Parts that are required to be replaced shall be covered by Customer's purchase order issued separately at the time; provided, however, that if the performance does not fulfil the Emissions Requirements set forth in Clause 2 above as a result of or caused by work carried out by the Contractor (including Contractor's subcontractors, employees, or personnel hired by Contractor for performance of the Overhaul) or part(s) replaced by the Contractor that are defective or nonconforming or not proper and appropriate for the Equipment, as required by this Contract, such shortcoming shall be remedied in accordance with the warranty clause in Section 15 of the Contract. In addition, the Contractor shall make available, as requested by the Customer and at the Customer's cost (at Contractor's then current published rates for such personnel) qualified and knowledgeable personnel with expertise in `tuning" the Equipment after the Overhaul to ensure that the Equipment meets the Emissions Requirements. Contractor shall ensure that all personnel selected by or employed by Contractor are familiar with the Equipment and are skilled, knowledgeable, and qualified to perform the tasks that are required to achieve the standards required for satisfaction of the Emissions Requirements. Contractor shall ensure that such personnel remain at the Plant during their assigned times or shifts, and do not leave the Plant for another job or to return home until Customer has approved, in writing, their departure. Customer shall approve a person's departure after the required task has been completed, or if the person's departure will not adversely affect the outage or the schedule, or after Contractor has provided a substitute person with comparable experience, skills, and knowledge. In the latter case, the Contractor shall ensure an overlap of these personnel to ensure an effective handover of responsibilities at the Plant. I Lac pwook M-M21 01910/0038 1592013 VSw 26J=07 flhl� Appendix 12 Page 2/2 Additional Terms and Conditions for EMISSIONS REQUIREMENTS Vernon 4. CONDITIONS The Emissions Requirements assume the following conditions: • The Plant has during the full testing period been operated on a continuous steady-state 100% base load and has not been exposed to more than 50 EOC (Equivalent Operating Cycles) per year. • The Plant has during the full testing period been operated in accordance with the Customer's Manuals. • The Plant has during the full testing period been operated exclusively on natural gas, i.e. no oil operation.. The fuel used fulfils the requirements in Appendix 15 of the Contract. • Gas Turbines and air filters shall be in clean condition and evaluated power output shall be corrected to the actual Gas Turbine inlet and outlet pressure losses. • The evaluation is conducted immediately upon completion of the respective overhaul. The Plant is operated in a continuous steady-state 100% base load during the evaluation - Anti -icing is not in operation. b. VALIDITY This agreements set forth in this Appendix are valid up to and including the completiq# of the C-level overhaul at 40,000 EOH or until the expiry of the Contract. 1 01910/0038 159201.3 Last Via: 2007-M-21 vsw 2br&wm 31 August 24, 2007 Appendix 13 Term and Cost Sheet for a Long Term Service Agreement City of Vernon: 2 x SGT-800 + 1 x MP24 This Term Sheet and Cost Sheet is attached to and made a part of the LTSA dated by and between the City of Vernon and Siemens Demag Delaval Turbomachinery, Inc. In the event of a conflict between this Term and Cost Sheet and the Contract, the terms of the this Term and Cost Sheet shall control. Siemens hereby advises as follows: 1. Siemens carries out the service locally. The machine is not scheduled to leave the site for service activities. Siemens will provide maintenance specialists and will also advise the local labor for dismantling, assembling and commissioning activities. The cost for the local labor is not included in this proposal. 2. Siemens will also provide the set of replacement/refurbished parts as well as maintenance consumable parts to site well in advance of the scheduled activities. 3. There are Technical Field Service personnel with SGT-800 (GTX-100) experience available in the region. 4. In the unlikely event that machining of some parts of the turbines would be needed, we would find a workshop in the nearby region to undertake this work under supervision of experts from Siemens. 5. In the case that the machine cannot be repaired locally, Siemens has turbine maintenance workshops in the USA and Mexico that can undertake more complicated work if such a very rare event would occur. 6. In addition to the service provided in connection with the Preventive Maintenance work, we wish to bring to your attention that Siemens Long Term Service Agreements also includes the assistance as listed under Service Products below, giving you rapid access to Siemens resources when needed. Scope of Supply Siemens will provide an LTSA for 2 x SGT-800's + 1 x MP24 machines including our Preventive Maintenance program, service products and guarantees as briefly described below. Our proposal is based on our standard maintenance program for both the gas turbines and the steam turbine. It is a well developed program based on experience from existing gas turbines and steam turbines in operation around the world. 1/4 01910/0038 161927.2 August 24, 2007 Preventive maintenance part Appendix 13 The proposed preventive contract consists of the following activities: For each of the two gas turbines: 2 A -inspections 1 B-overhaul 1 C-overhaul For the steam turbine 2 AS[ (Annual Safety Inspections) 1 LO (Limited Overhaul) 1 MO (Major Overhaul) The content of each of the inspections / overhauls are detailed in the attached contract. Service products In addition to the preventive maintenance undertaking described above, we also add the following service products: • Access to Siemens Emergency Spare Parts store without 30% emergency fee • 24 hours Telephone Support incl. On Line Remote Support without charges when used • Access to Emergency Gas Turbine and Emergency Modules without the initial renting fee • Frequent oil analysis — generally twice per year • Service Bulletins — as released • Annual reporting of operation statistics • 200 hours of free technical advice • Designated Project Manager for the proposed contract with whom our Customer can discuss any matter regarding this contract such as planning of Preventive activities, spare parts, Corrective undertakings and any other matter of mutual interest. Service product options Siemens always recommends installing a Condition Monitoring System (CMS), which will enable Siemens to analyse the behavior of the gas turbines and propose counteractions in case the machines or some part of the machines are showing tendencies of decreasing performance and/or 2/4 01910/0038 161927.2 August 24, 2007 Appendix 13 malfunction. Siemens acknowledges that the CMS will be installed in conjunction with the City's PI System already in place. M inrnntaP- Reliability Guarantee: Siemens guarantees reliability as follows; 97% for each gas turbine and 97% for the steam turbine on the terms and conditions set forth in the Contract. The terms and conditions for this guarantee are set forth in Article 13.2 of the Contract and Appendix 8, and are subject to payment of Liquidated Damages as set forth in the Contract and Appendix 8. Budgetary Prices: Preventive Maintenance Plan: Total Preventive Maintenance budgetary price: $22,475,000. USD Optional prices: • Installation of CMS module 0 for the gas turbines $200,000. USD (without monthly reports) • Contingency Spare Parts $1,232,264. USD (less parts already at site). • Set of special tools $573,825. USD The prices do not include any taxes or VAT. The prices are based on an exchange rate 6.99 SEK/ 1 USD. If the exchange rate differs from the mentioned one at the date of contract signing, it will be adjusted based on the above exchange rate and the exchange rate valid at the time of invoicing. The unpaid part of the contract amount shall be subject to escalation as described in the Appendix. The base month is the month of Contract signing. For convenience, the escalation shall be calculated on a January past year to January current year basis, e.g. Jan. 2007 to Jan. 2008. City of Vernon shall provide the hedge protection for any/all currency fluctuations through the life of this contract. Terms of Delivery: DDP Site, City of Vernon, CA, USA (INCOTERMS 2000) Price Validity: The price quoted above shall by valid until September 5, 2007 by which time City of Vernon shall have held its Council meeting and can advise Siemens whether the contract is approved. If not approved, Siemens reserves the right to either extend the validity expiration time or adjust the price. 3/4 01910/0038 161927.2 August 24, 2007 Payment Schedule for the Preventive Maintenance Service: Appendix 13 This payment plan takes into consideration the order placed by CoV for the delivery of B-inspection parts, and may need adjustment depending on when the actual contract is signed. Payment date Rate of total rice With order 22,7% 1 st of July 2007 23,4% 1 st of March 2008 5,8% 1 st of Sept. 2008 9,6% 1 st of March 2009 9,6% 1 st of March 2010 21,2% 1 st of Sept. 2010 1,9% 1 st of March 2011 1,9% 1 st of March 2012 1,9% 1 st of Sept. 2012 1,9% Sums 100,0% Payment plan for the options: 50 % of the price with order 50 % of the price after installation or at delivery of spare parts to plant site at Vernon, CA, USA, whichever is applicable. The Supplier shall issue invoices for the payment in accordance with the payment schedule. The invoices are due forty-five (45) days after date of issue. The fulfilment of an agreement on Siemens' part is subject to the proviso that this shall not be prevented by impediments on the grounds of national and international legal requirements, in particular export control provisions. 4/4 01910/0038 161927.2 32 33 m lg ' "pi \� 15.- EMPACT ANALYTICAL SYSTEMS, INC 365 S_ MAIN STREET BRIGHTON, CO 80601 (303) 637-0150 NATURAL GAS ANALYSIS PROJECT NO.: 0510006 ANALYSIS NO.: 05 COMPANY NAME: MCHALE & ASSOCIATES ANALYSIS DATE: OCTOBER 4, 2005 SAMPLE DATE : OCTOBER 2, 2005 ACCOUNT NO. CYLINDER NO.: MCHALE 180 NAME/DESCRIP : CITY OF VERNON MARBURG GEN. STATION @ 12:02:45 ***FIELD DATA*** SAMPLED BY : SAMPLE TEMP.: SAMPLE PRES..: AMBIENT TEMP.: COMMENTS NORM. GPM @ GPM @ COMPONENTS MOLE% 14.696 � 14.73 HELIUM 0-"- HYDROGEN 0.00 OXYGEN/ARGON 0.00 - - NITROGEN 0.35 - - 0O2 1.50 - - METHANE 96.46 - - ETHANE 1.31 0.350 0.330 PROPANE 0.24 0,066 0.066 I SOBUTANE 0.05 0.016 0.016 N-BUTANE 0.05 0.016 0.016 ISOPENTANE 0.02 0.007 0.007 N-PENTANE 0.01 0.004 0.004 HEXANES+ 0.00 0.000 0.000 TOTAL 100.00 0.459 0.460 BTU @ 60 DEG F 14.696 14.73 LOW NET DRY REAL= 909.7 911.8 NET SATURATED REAL= 893.8 995.9 HIGH GROSS DRY REAL = 1010.0 1012.4 GROSS SATURATED REAL = 992.4 994.8 RELATIVE DENSITY ( AIR=1 @14.696 PSIA 60F) : 0.5815 COMPRESSIBILITY FACTOR : 0.99790 NOTE: REFERENCE CPA 2261(ASTM D1945 & ASME-PTC), 2145, & 2172 CURRENT PUBLICATIONS v n6 EMPACT ANALYTICAL SYSTEMS, INC 365 S. MAIN STREET BRIGHTON, CO 80601 (303) 637-0150 NATURAL GAS ANALYSIS PROJECT NO.: 0510006 ANALYSIS NO.: 03 COMPANY NAME: MCHALE & ASSOCIATES ANALYSIS DATE: OCTOBER 4, 2005 SAMPLE DATE : OCTOBER 2, 2005 ACCOUNT NO.: CYLINDER NO.: MCHALE 036 NAME/DESCRIP : CITY OF VERNON MARBURG GEN. STATION @ 12:32:46 ***FIELD DATA*** SAMPLED BY : SAMPLE TEMP.: SAMPLE PRES.: AMBIENT TEMP.: COMMENTS NORM. GPM @ GPM @ COMPONENTS MOLE% 14.696 14.73 HELIUM 0.01 - - HYDROGEN 0.00 - - OXYGEN/ARGON 0.00 - - NITROGEN 0.34 - 0O2. 1.51 METHANE 96.47 - - ETHANE 1.31 0.350 0.350 PROPANE 0.24 0.066 0.066 ISOBUTANE 0.05 0.016 0.016 N-BUTANE 0.05 0.016 0.016 ISOPENTANE 0.01 0.004 0.004 N-PENTANE 0.01 0.004 0.004 HEXANES+ 0.00 0.000 0.000 TOTAL 100.00 0.455 0.456 BTU @ 60 DEG F 14.696 14.73 LOW NET DRY REAL= 909.4 911.5 NET SATURATED REAL= 893.6 895.7 HIGH GROSS DRY REAL = 1009.7 1012.1 GROSS SATURATED REAL = 992.2 994.5 RELATIVE DENSITY ( AIR=] @14.696 PSIA 60F) : 0.5813 COMPRESSIBILITY FACTOR : 0.99790 NOTE: REFERENCE CPA 2261(ASTM D1945 k ASME-PTC), 2145, d 2172 CURRENT PUBLICATIONS a �a EMPACT ANALYTICAL SYSTEMS, INC 365 S. MAIN STREET BRIGHTON, CO 80601 (303) 637-0150 NATURAL GAS ANALYSIS PROJECT NO.: 0510006 ANALYSIS NO.: 01 COMPANY NAME: MCHALE & ASSOCIATES ANALYSIS DATE: OCTOBER 4, 2005 SAMPLE DATE : OCTOBER 2, 2005 ACCOUNT NO.: CYLINDER NO.: MCHALE 311 NAME/DESCRIP : CITY OF VERNON MARBURG GEN. STATION @ 1:01:38 ***FIELD DATA*** SAMPLED BY SAMPLE TEMP.: SAMPLE PRES.: AMBIENT TEMP.: COMMENTS COMPONENTS HELIUM HYDROGEN OXYGEN/ARGON NITROGEN CO2 METHANE ETHANE PROPANE ISOBUTANE N-BUTANE ISOPENTANE N-PENTANE HEXANES+ TOTAL NORM. MOLE% 0.01 0.00 0.00 0.34 1.50 96.47 1.31 0.24 0.05 0.05 0.02 0.01 0.00 10050 BTU @ 60 DEG F LOW NET DRY REAL= NET SATURATED REAL= HIGH GROSS DRY REAL = GROSS SATURATED REAL RELATIVE DENSITY ( AIR-1 @14.696 PS1A 60F) COMPRESSIBILITY FACTOR : GPM @ 14.696 0.350 0.066 0.016 0.016 0.007 0.004 0.000 0.459 14.696 909.8 893.9 1010.1 992.5 0.5815 0.99790 GPM @ 14.73 0.350 0.066 0.016 0.016 0.007 0.004 0.000 0.460 14.73 911.9 8%.0 1012.5 994.9 NOTE. REFERENCE GPA 2261(ASTM D1945 & ASME-PTC), 2145, & 2172 CURRENT PUBLICATIONS EMPACT ANALYTICAL SYSTEMS, INC 365 S. MAIN STREET BRIGHTON, CO 80601 (303) 637-0150 NATURAL GAS ANALYSIS PROJECT NO.: 0510006 ANALYSIS NO.: 02 COMPANY NAME: MCHALE & ASSOCIATES ANALYSIS DATE: OCTOBER 4, 2005 SAMPLE DATE : OCTOBER 2, 2005 ACCOUNT NO.: CYLINDER NO.: MCHALE 202 NAMEIDESCRIP : CITY OF VERNON MARBURG GEN. STATION @ 1:31:24 ***FIELD DATA*** SAMPLED BY : SAMPLE TEMP.: SAMPLE PRES.: AMBIENT TEMP.: COMMENTS NORM. GPM @ GPM @ COMPONENTS MOLE% 14.696 14.73 HELIUM 0.01 - - HYDROGEN 0.00 - - OXYGEN/ARGON 0.00 - - NITROGEN 0.33 - - 0O2 1.51 - _ METHANE 96.49 - - ETHANE 1.30 0.347 0.348 PROPANE 0.24 0.066 0.066 ISOBUTANE 0.05 0.016 0.016 N-BUTANE 0.04 0.013 0.013 ISOPENTANE 0.02 0.007 0.007 N-PENTANE 0.01 0.004 0.004 HEXANES4- 0.00 0.000 0.000 TOTAL 100.00 0.453 0.454 BTU @ 60 DEG F 14.696 14.73 LOW NET DRY REAL= 909.5 911.6 NET SATURATED REAL= 893.7 895.8 HIGH GROSS DRY REAL = 1009.8 1012.2 GROSS SATURATED REAL = 992.2 994.6 RELATIVE DENSITY ( AIR=1 @14.696 PSIA 60F) : 0.5813 COMPRESSIBILITY FACTOR : 0.99790 NOTE: REFERENCE GPA 2261(ASTM D1945 & ASME-PTC), 2145, & 2172 CURRENT PUBLICATIONS EMPACT ANALYTICAL SYSTEMS, INC 365 S. MAIN STREET BRIGHTON, CO 80601 (303) 637-0150 NATURAL GAS ANALYSIS PROJECT NO.: 0510006 ANALYSIS NO.: 06 COMPANY NAME: MCHALE & ASSOCIATES ANALYSIS DATE: OCTOBER 4, 2005 SAMPLE DATE : OCTOBER 2, 2005 ACCOUNT NO.: CYLINDER NO.: MCHALE 035 NAME/DESCRIP : CITY OF VERNON MARBURG GEN. STATION @ 2:01:35 ***FIELD DATA*** SAMPLED BY : SAMPLE TEMP.: SAMPLE PRF,S.: AMBIENT TEMP.: COMMENTS NORM. GPM @ GPM @ COMPONENTS MOLE% 14.696 14.73 HELIUM 0.01 HYDROGEN 0.00 - - OXYGEN/ARGON 0.00 - - NITROGEN 0.34 - - 0O2 1.50 - - METHANE 96.50 - ETHANE 1.29 0.344 0.345 PROPANE 0.25 0.069 0.069 ISOBUTANE 0.05 0.016 0.016 N-BUTANE 0.04 0.013 0.013 ISOPENTANE 0.01 0.004 0.004 N-PENTANE 0.01 0.004 0.004 HEXANES+ 0.00 0.000 0.000 TOTAL 100.00 0.449 0.450 BTU @ 60 DEG F 14.696 14.73 LOW NET DRY REAL= 909.3 911.4 NET SATURATED REAL= 893.4 895.6 HIGH GROSS DRY REAL = 1009.6 1012.0 GROSS SATURATED REAL = 992.0 994.4 RELATIVE DENSITY ( AIR=1 @14.696 PSIA 60F) : 0.5810 COMPRESSIBILITY FACTOR : 0.99790 NOTE: REFERENCE CPA 1161(ASTM D1945 & ASME-PTC), 2145, A 2172 CURRENT PUBLICATIONS � �6 EMPACT ANALYTICAL SYSTEMS, INC 365 S. MAIN STREET BRIGHTON, CO 80601 (303) 637-0150 NATURAL GAS ANALYSIS PROJECT NO.: 0510006 ANALYSIS NO.: 04 COMPANY NAME: MCHALE & ASSOCIATES ANALYSIS DATE: OCTOBER 4, 2005 SAMPLE DATE : OCTOBER 2, 2005 ACCOUNT NO.: CYLINDER NO.: MCHALE 155 NAME/DESCRIP : CITY OF VERNON MARBURG GEN. STATION @ 2:31:28 ***FIELD DATA*** SAMPLED BY : SAMPLE TEMP.: SAMPLE PRES.: AMBIENT TEMP.: COMMENTS : NORM. GPM @ GPM @ COMPONENTS MOLE% 14,696 14.73 HELIUM 0.01 - - HYDROGEN 0.00 - - OXYGEN/ARGON 0.00 - - NITROGEN 0.34 - - 0O2 1.52 - - METHANE 96.48 - - ETHANE 1.29 0.344 0.345 PROPANE 0.25 0.069 0.069 ISOBUTANE 0.04 0.013 0.013 N-BUTANE 0.04 0.013 0.013 ISOPENTANE 0.02 0.007 0.007 N-PENTANE 0.01 0.004 0.004 HEXANES+ 0.00 0.000 0.000 TOTAL I00.00 0.450 0.451 BTU @ 60 DEG F 14.696 14.73 LOW NET DRY REAL- 909.2 911.3 NET SATURATED REAL= 893.3 895.4 HIGH GROSS DRY REAL = 1009.5 1011.8 GROSS SATURATED REAL = 991.9 994.2 RELATIVE DENSITY ( AIR=1 @14.696 PSIA 60F) : 0.5813 COMPRESSIBILITY FACTOR : 0.99790 NOTE: REFERENCE GPA 2261(ASTM D1945 & ASME--PTC), 2145, & 2172 CURRENT PUBLICATIONS J � �6 SUPPORTING DOCUMENTS N i 4305 Santa Fe Avenue, Vernon,90058 Telephone September 10, 2007 Siemens Demag Delaval Turbomachinery, Inc. Attn: Vincent S. Wagner, Customer Service Manager 840 Nottingham Way Trenton, NJ 08638 Re: Repair and Maintenance Services Agreement Dear Mr. Wagner: In accordance with Section 18.0 of said agreement, you are to furnish the City with proof of insurance as set forth in the Insurance Schedule. Please submit your insurance documents to Willard Yamaguchi, Risk Manager, for review and approval. Upon approval of said documentation, this office will forward to you a fully executed duplicate original agreement. If you have any questions, please contact Willard Yamaguchi at 323/583-8811 ext. 175. NG:dr c: Willard Yamaguchi Karina Rueda Donal O'Callaghan Resolution No. 9406 Agreement File No. 07-095 truly yours, N elly Giron City Clerk E ,c(usivefy Industfia( RELATING TO ANY CLAIMS, SUITS, OR PROCEEDINGS INVOLVING PATENTS, COPYRIGHTS OR TRADE SECRETS. Compliance with this Article as provided herein shall constitute fulfillment of all liabilities of the Parties under this Contract with respect to patents, copyrights or trade secrets. 17.4 No right, title or interest to or in any patents, copyrights, trademarks, service marks, trade names, or any intellectual property of or held by Contractor or its Affiliates or Associates is granted hereunder. 18. INSURANCE 18.1 The Customer agrees to carry and maintain in force for the duration of this Contract and any continuation thereof the following insurance as a minimum which shall be placed with reputable and substantial insurers satisfactory to the Contractor: 18.2 Property Insurance: Throughout the duration of this Contract and until the expiration of the last of the applicable Warranty Periods, Customer shall purchase and maintain property damage insurance for the facilities at the Site. Such insurance will name Contractor and its Suppliers as an additional insured, with a waiver of subrogation, for physical loss or damage to the property at the Site (including the Equipment and Customer's Material). Coverage shall be on a 100% replacement cost basis with no exclusion for manufacturer's warranties. 18.3 Customer shall provide to Contractor certificates evidencing such coverages and shall make reasonable efforts to have all such insurance certificates endorsed to provide that Contractor shall be given thirty (30) days advance notice of cancellation or material change. Customer shall be responsible for any deductible amounts. In connection with this Contract, Contractor shall maintain insurance (or self insurance) as specified in clauses (a), (b), (c), and (d) below and shall deliver to Customer certificates evidencing such coverages and shall make reasonable efforts to have all such insurance certificates endorsed to provide that Customer shall be given thirty (30) days advance notice of cancellation or material change. Contractor shall be responsible for any deductible amounts. The insurance described in clauses (b) and (c) shall name Customer as an additional insured. (a) Worker's Compensation: Contractor shall comply with workers compensation laws (or equivalent) in each jurisdiction where work is performed, and shall maintain a Workers Compensation and Employers Liability insurance policy. If any work is to be performed on or near navigable waters, the policy shall include coverage for United States Longshoreman's and Harbor Worker's Act, Death on the High Seas Act, Jones Act, or their equivalent as required by the applicable law in the jurisdiction where such work is performed. The limits of such insurance shall be as follows: Worker's Compensation — Statutory Employer's Liability — $1,000,000 each accident and in the aggregate $1,000,000 disease each employee. (b) Commercial General Liability: Contractor shall maintain commercial general liability insurance on an occurrence basis to provide coverage for: Bodily Injury; Personal Injury and Death, Property Damage, Explosion, Collapse and Underground hazards; Contractual Liability (particularly applicable to the provisions of the Indemnity Article of this Agreement); and Products and Completed Operations, and E and O coverage with limits as follows: $1,000,000 each occurrence and in the aggregate. (c) Business Automobile Liability: Contractor shall maintain business automobile liability insurance which shall include coverage for all owned, non -owned and hired vehicles with the following limit: $1,000,000 Combined Single Limit Bodily Injury and Property Damage (d) Umbrella Liability: Contractor shall maintain umbrella liability insurance with a limit of $2,000,000 each occurrence and in the aggregate. The policy shall be excess over the 21 01910/0038 149307.15 Commercial General Liability, Business Automobile Liability, and Employer's Liability coverages. 18.4 Waiver of Subrogation Rights Notwithstanding any provision to the contrary in this Contract, the insurance described in Section 18.3 shall be primary as to all other policies (including any deductibles or self -insured retention (s)) and self insurance which may provide coverage. It is further agreed that the Customer shall procure that the insurer(s) providing coverage under Section 18.3 shall include the Contractor as additional insured and shall waive all rights of subrogation and/or contribution against, the Contractor to the extent of the liabilities assumed by the Customer under this Contract. 18.5 Proof of Insurance and Changes The Customer shall furnish to the Contractor on request, certificates of insurance as evidence of its compliance with Section 18.2 and such insurance shall also where possible provide that the Contractor shall be given not less than 30 days notice of cancellation or material change to cover. 19. CONFIDENTIALITY 19.1 The provisions of the Contract, including any proposals, shall be treated by both Parties as confidential and shall not be disclosed by either Party to any third party without the prior written consent of the other except where and to the extent that such disclosure is reasonably required by law or in connection with applications and reports to governmental authorities, the borrowing of funds, obtaining of insurance, or potential sale or assignment of any interest in this Contract permitted hereunder. Except as contemplated by the terms hereof, or in the event of litigation between the Parties hereto, or as required by applicable law or pursuant to an order entered or subpoena issued by a court of competent jurisdiction, any confidential information provided by Contractor under this Contract shall not be disclosed publicly or made available to third parties, other than such of Customer's employees, consultants, and advisors as the Customer determines to have a need to know, which shall include the City Council, without the prior approval of Contractor. Notwithstanding anything to the contrary in this Contract, Contractor acknowledges that the agenda and proceedings of the City Council are public and of public record, as are any agreements entered into by the Customer; provided, however, that the Customer shall use reasonable efforts to maintain as confidential any information of Contractor provided pursuant to this Agreement. 19.2 Subject to Section 19.3, technical information supplied by one Party to the other in connection with this Contract shall remain the property of the furnishing Party, shall be kept confidential and shall not be copied, modified, disclosed or used by the receiving Party otherwise than for the purposes of the operation, repair and maintenance of the Equipment pursuant to this Contract. When required by appropriate governmental authority, including governmental regulations, applicable law or regulation, by order of a court of competent jurisdiction or lawful subpoena (hereinafter collectively referred to as "Governmental Authority'), Customer may disclose such confidential information to such Governmental Authority; provided, however, that prior to making any such disclosure, Customer will: (a) provide Contractor with timely advance written notice of the confidential information requested by such Governmental Authority and Customer's intent to so disclose; (b) minimize the amount of confidential information to be provided consonant with the interests of Contractor and its Suppliers and the requirements of the Governmental Authority involved; and (c) make every reasonable effort (which shall include participation by Contractor in discussions with the Governmental Authority involved) to secure confidential treatment and minimization of the proprietary information to be provided. In the event that efforts to secure confidential treatment are unsuccessful, Contractor shall have the prior right to revise such information to minimize the disclosure of such information in a manner consonant with its interests and the requirements of the Governmental Authority involved. 19.3 All of the intellectual property rights in data downloaded to the Contractor using the CMS System shall be the sole, proprietary, and confidential property of the Customer and shall be made available to the Customer without charge at any time and from time to time during the term of this Contract. All of such data shall be delivered to the Customer at the termination of this Contract without charge, and regardless of the reason for the termination. The Contractor hereby acknowledges the confidentiality of such data and acknowledges that use of such data is governed by the terms of 22 01910/0038149307.15 LIGHT & POWER DEPARTMENT Donal O'Callaghan, Director of Light & Power October 16, 2007 Mr. Vincent Wagner Siemens Demag Delaval, Inc. 840 Nottingham Way Trenton, New Jersey 08638 Subject: Siemens Demag Delaval Turbomachinery, Inc. and city of Vernon Services Agreement for the Malburg Generating Station 4963 Soto Street, Vernon, CA, MP Contract Number: I1-COV-06 Dear Mr. Wagner: Enclosed herewith is an original fully executed Siemens Demag Delaval Turbomachinery, Inc. and City of Vernon Service Agreement for the Malburg Generating Station for your files. If you have any questions, please do not hesitate to call me at 583-8811, extension 834. Sincerely, CITY OF VERNON Light & Power Department 1�6�al (ka ag _ •� Director of Light and Power DO:rmt Enclosure c: City Administration Document Control 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 Fax (323) 826-1425 Excfusivefy Industfial Siemens Demag Delaval Turbomachinery, Inc. and City of Vernon Services Agreement for the Malburg Generating Station 4963 Soto Street, Vernon, California MP Contract Number: 11-COV-06 149307.15 9/4/07 Final 01910/0038 149307.15 1 MAINTENANCE PROGRAM INDEX SECTIONS TITLE PAGE 1. INTERPRETATION............................................................................... 2. SCOPE OF THE CONTRACTOR'S SERVICES ............................................. 3. CUSTOMER'S OBLIGATIONS.............................................................................................9 4. PLANNING..............................................................................................................................111 5. CORRECTIVE MAINTENANCE (MAINTENANCE OTHER THAN PREVENTIVE MAINTENANCE).............................................................................................11 6. ATTENDANCE AT SITE.........................................................................................................12 7. CONTRACTOR'S STOCK PARTS.........................................................................................12 8. DELIVERY, TITLE, RISK OF LOSS OR DAMAGE, AND LICENSE......................................13 9• EMERGENCY GAS GENERATOR/TURBINE.......................................................................13 10. OPERATION OF THE EQUIPMENT......................................................................................13 1211. RECORDS AND REPORTS...................................................................................................14 . PRICE AND PAYMENT..........................................................................................................14 13. EXECUTION TIME; RELIABILITY GUARANTEE; EMISSIONS AND PERFORMANCE..................................................................................... 14. LIQUIDATED DAMAGES ""."••"""••16 15. CONTRACTOR'S WARRANTY..............................................................................................16 16. LIMITATION OF LIABILITY....................................................................................................18 17. INTELLECTUAL PROPERTY INFRINGEMENT .................................... .............20 18. ................... INSURANCE..............................................................................I...21 ......................................... 19. CONFIDENTIALITY................................................................................................................22 20. ASSIGNMENT AND SUBCONTRACTING ................................... 23 ..................................... FORCE MAJEURE.................................................................................................................23 22. DURATION OF THE CONTRACT ............................ 24 ........................................................... 23. TERMINATION................................................................................................... ....................24 4. LAW AND ARBITRATION........................................................................... 25. ENTIRE AGREEMENT..................................................... ........I...............27 .............................. 6. NOTICES................................................................................................................................27 27. WAIVERS......................................................................................28 28. MODIFICATION.............................................................28 ......................................................... 29. HEADINGS .................... 30. THIRD PARTIES................................................................... ....28 31. SURVIVAL..............................................................................................................................28 32. ENVIRONMENTAL COMPLIANCE........................................................................................28 33. ASBESTOS AND THERMAL INSULATION.......................................................................I...29 APPENDICES 1.1 Preliminary Maintenance Schedule for approximately 7.5 years (59,999 EOH) 1.2.1 Preventive Maintenance Activities - SGT-800/GTX100 X1CS36693 and DOR 1.2.2 Activity List for VAX Maintenance Program Axial Flow Steam turbine modules MP 24 and DOR 1.3.1 Maintenance Program Activities (A-insp) - SGT-800/GTX100 1.3.2 Maintenance Program Activities (ASI-insp) - MP24-ST 1.4.1 Maintenance Program Activities (B-insp) - SGT-800/GTX100 1.4.2 Maintenance Program Activities (LO) - MP24-ST 1.5.1 Maintenance Program Activities (C-insp) - SGT-800/GTX100 1.5.2 Maintenance Program Activities (MO) - MP24-ST 2.1 Replacement Schedule 2.2 [A Overhaul] Gas Turbine INSP Consumables, SGT Tool Kit and Instruments 2.3 [B Overhaul] SGT INSP Consumables, Spare Parts and Program Parts 2.4 [C Overhaul] SGT INSP Consumables, Spare Parts and Program Parts 2.5 Preliminary List Maintenance Consumable Spare Parts for Overhauls (Steam Turbine) 3.1 Service and temporary area requirements 01910/0038 149307.15 3•2 NDT Area Requirements 5.1 Operating Statistics GTX100 and Gas Turbine Monthly Report 5.2 Steam Turbine Monthly Report 6.1 Additional Terms and Conditions for lease of Emergency Gas Turbine or modules 6•2 Emergency Modules — General Description and Daily Lease Fees 7 Additional Terms & Conditions for On Line Remote Support 8 Additional Terms and Conditions for Reliability Guarantee 8.1 List of Corrective Maintenance Spare Parts 8.2 Maintenance Program- Instrument and tool kit to SGT-800/GTX100 9 Performance Requirements 10.1 Additional Terms and Conditions for analysis of Condition Monitoring System (CMS) -data 10.2 Form of Software License Agreement 11 Field Service Rates 12 Emissions Requirements 13 Term and Cost Sheet 14 List of Customer's Manuals 15 Customer's Fuel Specifications 01910/0038 149307.)5 J- "1 ._ 1 Services Agreement This Services Agreement (this "Agreement") is entered into and effective as of September 4, 2007, BETWEEN Siemens Demag Delaval Turbomachinery, Inc., a company incorporated in the State of Delaware, whose registered office is at 840 Nottingham Way, Hamilton, New Jersey 08638 (hereinafter referred to as "the Contractor') AND City of Vernon, a municipality with offices located at 4305 S. Santa Fe Avenue, Vernon, CA (hereinafter referred to as "Customer"). Contractor and Customer may be referred to individually as "Party" and collectively as "Parties". WHEREAS 1) The Customer is the owner and operator of the Equipment 2) The Customer wishes the Contractor to provide repair and maintenance services in relation to the Equipment and the Contractor is willing to supply the same on the terms and conditions of this Contract. NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties hereby agree as follows: 1. INTERPRETATION 1.1 In this Contract, unless the context otherwise requires: "Affiliate" shall mean with respect to either Party, any legal entity who directly or indirectly (through one or more intermediaries), either (i) controls such Party; (ii) is controlled by such Party; or (iii) is controlled by the same legal entity that directly or indirectly controls such Party where in each such case, "control' means the power and ability to direct, or share equally in the direction of, the management and/or policies of the Party, whether through ownership or control by proxy of more than fifty percent (50%) of the voting shares or other equivalent interests of the controlled entity, by contract or otherwise. "Consumable Spare Parts" shall mean such Spare Parts as are commonly required to be used by the Customer or operator in the day-to-day operation of the Equipment, a non -exhaustive list of which includes filter elements and associated joints and seals for fuel, lubricating oil, hydraulic oil and air filter systems, cleaning fluids for the gas turbine compressor, grease, fuses, lamps, fire extinguishant, and jointing compounds. "Consumable Spare Parts for Overhauls" shall mean the Consumable Spare Parts to be used in conducting the Overhauls for the Gas Turbines, as further described in Section 2.2.2 and Appendices 2.2, 2.3, and 2.4, and for conducting the Overhauls for the Steam Turbine, as further described in Section 2.2.2.2 and Appendix 2.5. "Contract" shall mean this Services Agreement which consists of (i) this Agreement, including any purchase orders previously issued, signed by Contractor and Customer, (ii) Appendices attached to this Agreement, and (iii) amendments executed pursuant to this Agreement. In the event of any conflict or inconsistency between any provisions contained in these documents, the documents shall take precedence in the following order: Term and Cost Sheet, (iii), (i) and (ii). "Contract Price" shall mean the price set forth in the Term and Cost Sheet attached hereto as Appendix 13, and constitutes the charges payable by the Customer to the Contractor under this Contract as specified in Article 12 Price and Payment. The Contract Price includes the payment in Al1910/0038149307.15 / '� `iin \ the amount of $11,341,850.00 made by Customer in connection with Purchase Order Number LP No. 14970 dated February 7, 2007. "Contractor's Associate" shall mean and include any directly or indirectly owned subsidiary of SIEMENS AG. "Contractor's Personnel" shall mean all supervisors, specialists, technicians, workmen, contractors, subcontractors, and laborers selected, hired, retained, or provided by Contractor, or employed by Contractor or Contractor's Affiliates, to perform any of the Services to be provided under this Contract. Contractor's Personnel includes all persons performing Services hereunder except for the Customer's employees or contractors. "Contractor's Stock Parts" shall mean a separate stock of parts supplied and owned by Contractor and stored at the Site for use by Contractor on the terms and conditions described in Article 7. "Corrective Maintenance" shall mean maintenance and repairs carried out to correct operating faults or failures in the Equipment and the repair or replacement of damaged or worn parts of the Equipment in order to restore the Equipment to operable condition, but shall not include performance of the Preventive Maintenance. "Corrective Maintenance Spare Parts" shall mean those Spare Parts listed in Appendix 8.1 that Customer is advised to purchase as an "Optional Price Adder" to the Contract Price so that they will be available as may be necessary for Corrective Maintenance. "Customer's Manuals" shall refer to all of the operations and maintenance manuals, technical publications, and service bulletins that were delivered to Customer by Contractor (or Alstom) upon completion of construction of the Plant, as updated by the addition of official written technical publications, inspection reports, and service bulletins delivered to Customer by Contractor and acknowledged in writing by Customer as being received. The Customer's Manuals constitute all of the instructions and requirements related to the operation of the Equipment. "Customer's Material" shall mean all components of the Plant other than the Equipment. "Daily attendance" shall mean activities consisting of taking routine readings and carrying out routine checks at running condition. "Effective Date" shall mean September 4, 2007, which is the date on which this Agreement was approved by both Parties; provided, however, that Customer's payment in the amount of $11,341,850.00 shall constitute a payment of the Contract Price hereunder, although paid prior to the Effective Date hereof. "Equipment" shall mean the equipment to be maintained and repaired by the Contractor pursuant to this Contract as listed in Article 2 Scope of the Contractor's Services. "Equivalent Operating Hours EOH" shall mean Equivalent Operating Hours (EOH) calculated according to the formula set out below: SGT-800 Gas Turbines EOH I(CxxCfxH+5xNO) EOH = Equivalent operating hours Cx = Stress factor Cx = 1.0 Cf = Fuel factor Cf = 1.0 for gas according to GTI X241010E Cf = 1.5 for liquid fuel according to GTI X242004E H = Operating hours 2 01910/0038 149307.15 Equivalent operating cycles: No = E(C„xN) No = Equivalent Operating Cycles ("EOC") C„ = Start and stop factor C,= 0 normal start - trip before T7 = 3000 C Cn = 1 normal start - normal stop C„ = 10 normal start - 100 to 50 % direct trip Cr, = 10 normal start - 100 to 50 %, 30 sec shutdown C„ = 5 normal start - 100 to 50 % 90 sec shutdown N = Number of start / stop cycles MP24 Steam Turbine The influence of the mode of operation on the long term effect is expressed by the following equation giving the equivalent operating hours Te: Te = Teff + ns x Ts where: Te = equivalent operation hours Teff = effective operation hours ns = number of cold starts = 20 operating hours charged for one start (i.e. unit has been down for more than 16 T s hours) The calculation formula for the EOH and Te are based on the present knowledge and technical know-how and may be subject to change by mutual written agreement of the Parties. "Gas Turbines" shall mean the Gas Turbines described in Section 2.1. "Inspection" shall mean the visual or metallurgical examination or measurement or testing of parts or assemblies to establish suitability for further use. "Intervention" means a change to the operation or controls of the Equipment. "Isolation" shall mean the disconnection of the Equipment from its outside supplies including but not limited to, all AC/DC electrical supplies, gas/liquid fuel supplies, fire and gas detection suppression equipment or any other ancillary systems which might in any way preclude a safe system of work. "Limited Overhaul" is defined in Appendix 1.4.2. "Major Overhaul" is defined in Appendix 1.5.2. "Mobilize" shall mean and include the calling out of Contractor's Personnel, their preparation for departure and commencement of travel to Site. "On -Condition Inspection" shall mean that the Contractor determines the timing, nature and extent of the workscope and type of Inspection after taking into account the mechanical integrity and condition of the Equipment. 3 01910/0038 149307.15 "OEM" shall mean parts originally or subsequently provided by Contractor, Contractor's Associate, or Alstom. "Overhaul Tools" shall mean all of the tools and equipment required to perform the Preventive Maintenance described in Section 2.2, all of which shall be provided by Contractor on a temporary basis during an Overhaul as part of the Contract Price. "Performance Requirements" shall mean the standards for output and heat rate to be achieved, as further described in Appendix 9. "Plant" shall mean the Malburg Generating Station, "Preventive Maintenance" shall mean all of the inspections and overhauls of the Equipment carried out by Contractor's Personnel as described in Section 2.2 and pursuant to the schedule contained in this Contract. "Program Spare Parts" shall mean the Spare Parts to be used in conducting the Overhauls for the Gas Turbines, as further described in Section 2.2.2 and Appendices 2.2, 2.3, and 2.4, and the Consumable Spare Parts to be used in conducting the Overhauls for the Steam Turbine, as further described in Section 2.2.2.2 and Appendix 2.5. All Program Spare Parts shall be OEM. "Reliability Guarantee" shall mean Contractor's guarantee of Equipment reliability as described in Section 13.2. "Routine Maintenance" shall mean activities and tasks carried out by the Customer on a daily or other routine basis, including on a calendar basis (compressor water wash cleaning, lubrication oil sampling, etc.) or as required (filter replacement, cleaning etc.), including ongoing maintenance of the auxiliary systems due to normal wear and tear. "Services" shall mean the repair and maintenance services to be provided by the Contractor for the Equipment at the Site as specified in Article 2 Scope of the Contractor's Services. "Site" shall mean the location of the Equipment. "Spare Parts" shall mean component parts, assemblies and sub -assemblies manufactured or supplied by the Contractor or a Contractor's Associate for use as replacement parts for the Equipment or for Customer's Material, Spare Parts shall include Consumable Spare Parts, Program Spare Parts, and Corrective Maintenance Spare Parts. "Special Tools" shall mean those tools and instruments that Customer is advised to purchase as an "Optional Price Adder" to the Contract Price so that they will be available as may be necessary for Corrective Maintenance. Special Tools are listed on Appendix 8.2, options 140 and 142. The tools and instruments required for Preventive Maintenance shall be provided by Contractor on a temporary basis during an Overhaul as part of the Contract Price, and are not "Special Tools" for purposes of this Contract. "Steam Turbine" shall mean the Steam Turbine described in Section 2.1. "Technical Support Service" shall mean the Contractor's advisory service including Electronic Interrogation of Turbine Control Module. "Third Party Parts" shall mean parts, components, equipment or materials provided by Customer under the Contract which were not manufactured or supplied by Contractor or the predecessors of Contractor or which were originally supplied by Contractor or the predecessors of Contractor and subsequently repaired, serviced or otherwise modified or altered by any party not affiliated with Contractor or with a predecessor of Contractor or Customer or a contractor retained by Customer and approved by Contractor. "Year" shall mean a period of 365 days or 366 days (in the case of a leap year) from the Effective Date. 4 01910/0038 149307.15 1.2 The relationship between the Parties established by this Contract is that of independent contractors. Nothing herein shall be construed to create or give rise to any partnership, joint venture or agency relationship between the Parties. At no time during the performance of this Contract shall the Contractor or its employees and other representatives be considered to be the employees or agents of the Customer, nor shall the Customer's employees, agents or subcontractors be considered to be the employees or agents of the Contractor, even where assigned to assist the Contractor in the performance of the Services, 1.3 This Contract is written in the English language, and shall be interpreted in English by all Parties. All measurements shall be made using the American system of measurement (inches, feet, etc.). 1.4 This Contract includes the Term and Cost Sheet attached as Appendix 13. 2. SCOPE OF THE CONTRACTOR'S SERVICES. Contractor shall, in consideration of the Contract Price, undertake the following program for Preventive Maintenance, including on Site inspections and overhauls, based on Equivalent Operating Hours, by retaining the services of Contractor's Personnel. 2.1 Equipment The Equipment covered by this Contract consists of the following turbines: 2 x SGT-800 Gas Turbine units with No B0531 and B0533 and 1 x MP24 Steam Turbine with No 13- 2555, including their gearboxes, generators and auxiliary and control systems and other components, as listed as part of the Activity Lists in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4A , 1.4.2, 1.5.1, and 1.5.2. 2.2 Preventive Maintenance Unless otherwise specifically stated herein, all products and services described in Section 2.2, including all subparts, are included in the Contract Price. Contractor shall select and retain all of Contractor's Personnel, and Contractor shall be solely liable for all activities and services undertaken during the Overhauls by Contractor's Personnel. Contractor shall ensure that all of Contractor's Personnel are familiar with the Equipment and are skilled, knowledgeable, and qualified to perform the tasks that are required (a) to perform the Overhauls, (b) to achieve the standards required for satisfaction of the Emissions Requirements and Performance Requirements, and the Reliability Guarantee, and (c) to provide any assistance in Corrective Maintenance, if such additional assistance is requested by Customer. Contractor's Personnel shall remain at the Plant during their assigned times or shifts, and shall not leave the Plant for another job or to return home until Customer has approved, in writing, their departure. Customer shall approve a person's departure after the required task has been completed, or if the person's departure will not adversely affect the outage or the schedule, or after Contractor has provided a substitute person with comparable experience, skills, and knowledge. In the latter case, the Contractor shall ensure an overlap of these personnel to ensure an effective handover of responsibilities at the Plant. Inspections and overhauls This Contract includes the following inspections and overhauls: For each of the Gas Turbines (GT1 and GT2) 2 A -inspections at 30', 50' EOH 1 B Overhaul at 20' EOH 1 C Overhaul at 40' EOH For the Steam Turbine: 2 ASI (Annual Safety Inspections) at 30', 50' GT EOH 01910/0038 149307.15 V1a, 1 LO (Limited Overhaul) at 20' GT EOH 1 MO (Major Overhaul) at 40'GT EOH 2.2.1 Work Management for Preventive Maintenance The Contractor shall furnish work management (expertise) for Preventive Maintenance in accordance with Appendix 1.1 maintenance schedule. The extent of the Preventive Maintenance is defined in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2. Personnel categories of Contractor's Personnel paid for as part of the Contract Price are defined in Appendices 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2 (clauses 3.1 and 3.2 thereof). These are Supervisors, Specialists, and Technical Personnel as defined in the Activities & Requirements document for each maintenance activity. Contractor's Personnel not defined in Appendices 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2 (clauses 3.1 and 3.2 thereof), including, without limitation, millwrights, mechanical fitters, and crane operators, shall be retained directly by and work under the control of and report directly to Contractor, and their costs shall be charged to Customer on a time and materials basis in accordance with Contractor's then current Service Craft Labor Rates; Extra Work or T&M Contracts, as adjusted for use in California. Those positions that are not Contractor's Personnel and are filled by Customer's employees (such as Coordinator, Electrician, and Operator) shall be paid for and under the supervision of the Customer, and shall not be deemed to be "Contractor's Personnel". Contractor shall be solely responsible for directing the Contractor's Personnel in the performance of the Services, using Contractor's best skill and attention. Contractor shall be solely responsible for all means, methods, techniques, sequences and procedures and for coordinating all portions of the Services to be provided by Contractor under this Contract. Contractor shall be responsible to Customer for the acts and omissions of Contractor and Contractor's Personnel. The date for each activity will be jointly agreed upon. 2.2.2 Gas Turbines: Consumable Spare Parts for Overhauls and Program Spare Parts and Overhaul Tools -Preventive Maintenance As part of the Contract Price, the Contractor shall provide Consumable Spare Parts for Overhauls and new or refurbished Program Spare Parts as listed in Appendices 2.2, 2.3, and 2.4 and all Overhaul Tools required for the Preventive Maintenance of the Gas Turbines in accordance with this Contract. The lists of Consumable Spare Parts for Overhauls and Program Spare Parts show the current status and such lists may be subject to modifications if required; provided, however, that Customer shall have the option to determine if it wants to purchase the Spare Parts from the modified list of Spare Parts. If Customer elects to purchase the modified Spare Parts, the price of the modifications or modified parts will be negotiated in good faith, and the Contractor shall credit the Customer for parts that have been committed or paid for. 2.2.2.2 Steam Turbine: Consumable Spare Parts and Program Spare Parts and Overhaul Tools - Preventive Maintenance As part of the Contract Price, the Contractor shall provide Consumable Spare Parts for Overhauls as listed in Appendix 2.5 and all Overhaul Tools required for the Preventive Maintenance of the Steam Turbine in accordance with this Contract. For a Steam Turbine Limited Overhaul, a limited number of maintenance Consumable Spare Parts for Overhauls will be chosen from the list in Appendix 2.5. Program Spare Parts for the Steam Turbine Overhauls are not listed on Appendix 2.5. The Program Spare Parts that are necessary for proper operation, based on experience and findings during the previous inspections and overhauls, will be offered separately at Contractor's then -current published pricing. Program Spare Parts not listed on Appendix 2.5 are not a part of the Contract Price. 2.2.3 Overhaul Tools The Contractor shall temporarily provide the necessary Overhaul Tools required for carrying out Preventive Maintenance in accordance with this Contract. Special Tools, if any, owned by the Customer and kept at the Plant shall be available for the Contractor's staff. 2.2.4 24-hour telephone support 6 01910/0038 149307.15 24 hours per day the Contractor's Personnel are available to assist Customer's operation personnel via telephone. The Customer may call an assigned telephone at any time, out of the normal working day, to obtain assistance, if there is a problem with the Equipment. If necessary, other appropriate steps will be taken with the participation of resources from the Contractor to ensure that the problem is solved as soon as possible. 2.2.5 Emergency Spare Parts In case of unforeseen events, i.e. for Corrective Maintenance, the Customer will have access to the Contractor's emergency spare parts storage of sophisticated gas turbine parts without any emergency fee. This means at Contractor's normal published prices. These parts are available on a first come, first served basis. 2.2.6 Corrective Maintenance Spare Parts for Reliability Guarantee Contractor shall be excused from payment of Liquidated Damages under the Reliability Guarantee for the number of days that lack of availability of the Corrective Maintenance Spare Parts at the Plant as and when needed for Corrective Maintenance is the direct cause of lack of reliability. The Reliability Guarantee will remain in full force and effect for every day during which reliability is not achieved for any other reason for which Contractor is liable for payment of Liquidated Damages, as described in Appendix 8. The Corrective Maintenance Spare Parts are included as an Optional Adder to the Contract Price, Customer shall have the right to use the Corrective Maintenance Spare Parts when carrying out Corrective Maintenance work. 2.2.7 Emergency gas generator/turbine and modules In case of unforeseen events, i.e. for Corrective Maintenance, the Customer will have the right to lease the Contractor's emergency gas generator/turbine according to the terms described in Appendices 6.1 and 6.2. Lease terms and other obligations are further described in Appendices 6.1, 6.2, and 13, Emergency gas generators/turbines are available on a first come, first served basis. 2.2.8 Analyses Lubrication oil samples provided by the Customer are analyzed and appraised twice a year at a time mutually agreed between Customer and Contractor. 2.2.9 On Line Remote Support The Contractor shall design, deliver and commission a CMS System to operate in conjunction with the Customer's PI System for remote connection from the Contractor's facilities to the local control room at the Plant. The on line support and reports are included in the Contract Price. Additional terms and conditions for support utilizing the remote connection are defined in Appendices 7 and 10.1. 2.2.10 Condition Monitoring System (CMS) The Customer has purchased a PI System for monitoring operations at the Plant, sized in accordance with Contractor's recommendation to fit the CMS. The Contractor will sell to the Customer the use of the CMS, for approximately $200,000 USD (included in the Contract Price), to be used as an add -on to the PI System. The Contractor shall provide regular analysis and, if requested by the Customer, operation support by using information stored in the CMS/PI System. Terms and conditions for regular analysis and operation support utilizing the CMS/PI System are defined in Appendix 10.1. The CMS shall be installed at the Plant as soon as possible, but not later than within four (4) months following the execution of this Contract. 2.2.11 Operational statistics The Contractor gathers statistics over all gas turbines with reported operation statistics. With this as a base, compilation of reported data for each turbine will be compared with the entire fleet and presented to the Customer. 2.2.12 Service Bulletins III 01910/0038 149307.15 /�? r11-,A The accumulated experience from operation and maintenance of the Contractor's gas turbines is gathered in Finspong. By compiling and evaluating such experience, new possibilities to increase the performance, efficiency and availability of the turbines are constantly being discovered. In order to give the Customer the opportunity to share in the accumulated experience of the entire gas turbine fleet, the Contractor offers Service Bulletins. In the Service Bulletins the Contractor recommends actions in line with the latest experience in the above mentioned areas. Contractor shall deliver the service bulletins to Customer when they become available, and Customer shall sign for receipt, after which the Service Bulletins shall be part of the Customer's Manuals. 2.2.13 Reporting Within six (6) weeks after completion of an inspection/overhaul, the Contractor will provide the Customer with a written report on actions taken at the inspection/overhaul. Possible modifications and recommended actions due at the next inspection will be included in the report. 2.2.14 Technical advice Free of charge technical consultation service up to 200 hours is available during the validity time of this Contract. This includes investigations and examination for the turbine equipment concerning, for example, methods for raising performance, reducing environmentally unacceptable emissions, or avoiding certain types of corrosion. 2.2.15 Designated Project Manager The Contractor will have a designated Project Manager for this Contract. The Project Manager will be the Customer's contact for Preventive Maintenance and Corrective Maintenance within normal working day. The Project Manager is working in a team consisting of one Service and Spares Coordinator, one Application Engineer and one Sales Area Manager. 2.2.16 Additional Training To assist the Customer in reducing the turbines' outage time more easily, and to increase his understanding of "how to act" in case of an emergency, and to enable the Customer to solve minor unplanned situations himself, the Contractor offers to provide an optional extra training period of two weeks at the Plant. Contractor acknowledges and agrees that the Customer's Plant currently operates at a high degree of availability and reliability and that the Plant's operations personnel are fully qualified and trained and meet the standards required for operating the Plant. Contractor acknowledges and agrees that Customer is entitled to the benefits of the Reliability Guarantee and Contractor's other warranties, guarantees, and covenants set forth herein whether or not Customer's personnel attend any training described in this Section 2.2.16 or otherwise offered by Contractor. 2.3 If the Customer is not at any time during the continuance of the Contract the sole owner of the Equipment, the Contractor shall have the right to suspend performance of the Services until such time as the Customer has obtained and provided evidence to the Contractor of the written approval of the owner or owners to the carrying out of the Services by the Contractor on the terms of this Contract. The Customer shall keep the Contractor informed of the status of ownership of the Equipment and shall indemnify the Contractor against any claims of the owner or owners against the Contractor for the suspension of Services which may arise out of the Customer's failure to obtain the written approval of the new owners as referred to above. If such approval is not obtained within sixty (60) days following the transfer of ownership of the Equipment, Contractor may terminate for convenience by delivering ten (10) days prior written notice to the original Customer that Contractor has not received written approval from the new owner to 'continuation of the Services to be provided hereunder. Contractor may terminate this Contract within thirty (30) days following the last day of such 10 day notice period, if Contractor has not received the requisite consent from the new owner within the 10 day period. In the event of such termination, the provisions of Section 23.2 shall apply. 2.4 The Services to be provided under this Contract are complementary to and do not replace the obligations of the Contractor or other suppliers of the Equipment to repair or replace defective items 8 01910/0038 149307.15 of Equipment under any applicable express warranty of the supplier in the contract for the sale and purchase of the Equipment. 2.5 The Services agreed to be provided by the Contractor in return for the Contract Price do not include the correction or repair of the Equipment or the provision or installation of Spare Parts required as a result of: (a) misuse, neglect of or damage caused to the Equipment by Customer or any third party (except the Contractor's Personnel); or (b) use of parts which have not been supplied by the Contractor or a Contractor's Associate, or predecessors of Contractor or Contractor's Associate (including Alstom), or repairs or modifications to the Equipment which have been made without the Contractor's approval; or (c) failure or delay on the part of the Customer to comply with its obligations or fulfill its responsibilities as set out in the Contract to the extent such failure actually adversely affects the Equipment or the operation of the Plant; or (d) damage resulting from operating personnel ignoring alarms or safety devices related to the Equipment or purposely rendering them ineffective; or (e) damage resulting from foreign objects (not being part of the Equipment itself) entering or impacting part of the Equipment; or (f) damage resulting from failure, malfunction or improper operation of the Plant or systems (which are not themselves the Equipment) associated with the Plant; or (g) accidents or other force majeure events as defined in this Contract. Where work is carried out by the Contractor in the circumstances referred to above, the Customer shall pay the Contractor's additional charges for labor, associated expenses and Spare Parts provided at the Contractor's standard published rates of charge and published prices prevailing at the time. 2.6 In the circumstances referred to in Section 2.5 and in any other circumstances where the Contractor considers that it is necessary to carry out repairs or provide Spare Parts which are not included within the scope of the Services to be provided by the Contractor at its own expense under this Contract, the Contractor will inform the Customer in writing (including email), along with a detailed description of the problem, the proposed solution, the risk, and the proposed timing, as soon as possible and provide the Customer with an estimate of its charges for carrying out the work and providing the Spare Parts required. Where the work is carried out by the Contractor at the request or with the consent of the Customer, the terms and conditions of this Contract shall apply thereto. If the Customer fails or refuses to have the necessary work carried out the Contractor shall have no liability to the Customer for any damage or loss that may arise in consequence. 3. CUSTOMER'S OBLIGATIONS 3.1 The Customer is responsible to supply the following manpower, services, tools and facilities at no cost for the Contractor. All licenses, permits, government authorizations and taxes required permitting the Contractor to perform the obligations defined in this Contract. Customer shall provide inspections and testing as may be required by statutory law, regulations or directives imposed by authorities. The provision of facsimile and telephone facilities as are available at Site. Necessary assistance and personnel required for carrying out Preventive Maintenance as defined in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, 1.5.2, 3.1, and 3.2. 01910/0038 149307.15 i Equipment and facilities, standard tools, work shop facilities etc., of the Activities & Requirements document (also known as the Division of Responsibilities or DOR, as set forth in Appendices 1.2.1 and 1.2.2) for each maintenance activity, shall be available for the Contractor's staff. Lifting equipment, cranes, transports, electricity, water, compressed air and workshop facilities as required and as further specifically described in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, 1.5.2, 3.1, and 3.2, and such other equipment as may be agreed to by the Parties during any pre -outage planning. 3.2 Records To enhance the availability of the Plant and to facilitate future improvements, the Customer shall provide the Contractor every month with an operation report. The information shall be written in to a web application or in a standard report template according to Appendices 5.1 and 5.2. The report shall be in English language. 3.3 Lube oil samples The Customer shall twice a year provide the Contractor with samples for analyses. 3.4 Corrective Maintenance Spare Parts Contractor shall have the right to use the Corrective Maintenance Spare Parts located on Site for preventive and corrective work. Contractor shall not be liable for the payment of Liquidated Damages for each day during which reliability is not achieved as a direct result of lack of one or more of the Corrective Maintenance Spare Parts that is required for repairs in order to achieve reliability. Any Corrective Maintenance Spare Parts used by Contractor for an Overhaul shall be replaced by Contractor at Contractor's cost. Any Corrective Maintenance Spare Parts used by Contractor for Corrective Maintenance may be replaced by Customer, at Customer's option and at Customer's cost. 3.5 On -Line Remote Support The Customer's obligations when utilizing the system for remote connection between the local control room of the Plant and the Contractor's facilities are defined in Appendix 10.1. 3.6 Condition Monitoring System The Customer's obligations when utilizing the CMS connection to the Customer's PI System are defined in Appendices 10.1 and 10.2 (form of software license agreement). 3.7 Safety precautions When Contractor is on Site, the Customer is obliged to take safety precautions according to the Activities & Requirements document for each maintenance program activity, as set forth in Appendices 1.2.1 and 1.2.2. 3.7.1 The Customer is obliged to allow the Contractor to carry out its activities without restriction. If the activities are carried out on Site or in a local workshop the Customer shall also provide an accessible and safe working environment complying with the applicable regulations and instructions such as the availability of sufficient work space, access, lighting, power and power outlets. 3.7.2 Moreover, for the protection of Contractor's property and for the property of the Contractor's Personnel on Site, the Customer shall take the same measures as would be adopted by it to protect its own property and personnel. 3.7.3 It is the Customer's sole responsibility to ensure that the Plant is operated substantially in accordance with the instructions in Customer's Manuals, including any obligations described in Customer's Manuals relating to the availability and use of the correct operational consumables, filters, fuels, lube oils, water, air, etc. Contractor shall, within 60 days following the Effective Date, review the Customer's Manuals located at the Plant (all of which are listed on Appendix 14), and ensure that the Customer's Manuals, including official written technical publications, inspection reports, and service 10 01910/0038 149307.15 bulletins that were issued following commissioning of the Plant, are complete and current through the Effective Date, If Contractor does not advise Customer in writing within 75 days following the Effective Date that Customer's Manuals are not complete and accurate, they will be deemed complete and accurate for purposes of this Contract (although nothing set forth herein negates Contractor's right and obligation to provide updates and revisions so that Customer's Manuals will be complete and correct). The Parties agree that the Customer's Manuals constitute all of the official instructions by which the Equipment is to be operated. The list of Customer's Manuals set forth in Appendix 14 may be updated from time to time by the addition of official written technical publications, inspection reports, and service bulletins delivered to Customer from Contractor. The official written technical publications, inspection reports, and service bulletins will be binding on Customer when Customer has signed a receipt evidencing receipt of the update from the Contractor. 4. PLANNING 4.1 The Contractor and the Customer shall each appoint a project manager as a regular contact person for a number of management tasks during the preparation of maintenance activities and fulfillment of each Party's obligations. 4.2 When a Preventive Maintenance activity is completed, the Customer shall, together with the Contractor's representatives, decide on a date for the next activity to suit the operation plan. Either Party shall give the other Party at least six (6) months written notice (including email) if a change to the previously agreed to date for the scheduled activity is requested, and the other Party shall respond to such request within two (2) weeks of receipt of the request, so that the new date is agreed to at least five months and two weeks before the new date. 4.3 If Customer requests that Contractor provide Corrective Maintenance (maintenance and repair activities that are not part of the Preventive Maintenance), the normal working week for such additional services that may be provided by Contractor at Customer's request is 50 hours a week, comprising 10 hours per day from Monday to Friday, For work performed on Site outside the Contractor's normal working hours requested by the Customer, the Contractor is entitled to charge its normal overtime published charges, 4.4 For waiting time at the Site caused by the Customer, the Contractor is entitled to charge its normal published charges for technical personnel including accompanying reasonable expenses, not to exceed 8 hours per day. S. CORRECTIVE MAINTENANCE (MAINTENANCE OTHER THAN PREVENTIVE MAINTENANCE) 5.1 Corrective Maintenance consists of all maintenance and repair activities carried out to correct failures in the Equipment and damaged parts, other than that caused by or resulting from the execution of work performed by Contractor. Corrective Maintenance does not include Preventive Maintenance. Contractor shall not provide Corrective Maintenance (work other than Preventive Maintenance) except at the request and agreement of the Customer. The Customer has the right to complete the Corrective Maintenance with Customer's employees or agents or selected contractors, subject to the terms of the third paragraph of Section 15.5. 5.2 If the Contractor is requested by the Customer to perform any Corrective Maintenance, the Contractor will take actions to resolve the problem as quickly as possible. If such assistance involves sending Contractor's Personnel to the Plant, Contractor shall ensure that such personnel are familiar with the Equipment and are skilled, knowledgeable, and qualified to perform the required tasks. Such personnel shall remain at the Plant during their assigned times or shifts, and shall not leave the Plant for another job or to return home until Customer has approved, in writing, their departure. Customer shall approve a person's departure after the required task has been completed, or if the person's departure will not adversely affect the outage or the schedule, or after Contractor has provided a substitute person with comparable experience, skills, and knowledge. In the latter case, the Contractor shall ensure an overlap of these personnel to ensure an effective handover of responsibilities at the Plant. 5.3 The Spare Parts and all other agreed costs and expenses incurred by the Contractor as a consequence of Customer requested Corrective Maintenance under this Article 5 shall be borne by the Customer and the Customer shall place an additional order for that work. Hourly rates for additional manpower are stated in Appendix 11. 01910/0038 149307.15 /J-� h, 6. ATTENDANCE AT SITE 6.1 The Services included in the scope of this Contract shall be carried out by qualified representatives of the Contractor attending at the Site when necessary at such times as are agreed in advance between the Contractor and the Customer. 6.2 The Contractor shall be responsible for the costs of transport and subsistence and overnight accommodation for Contractor's employees, agents, and representatives when they are at the Site for the performance of the Preventive Maintenance, and such costs are included as part of the Contract Price. 6.3 If Customer requests that Contractor's employees, agents, or representatives come to the Site to provide additional services, such as assisting in making repairs that are not part of the Preventive Maintenance, the Customer shall pay for the costs of transport and subsistence and .overnight accommodation for such personnel during such period. If the personnel are already on Site for Preventive Maintenance, and Customer requests that they stay after the Preventive Maintenance is completed, in order to make further enhancements to the Plant (such as achieving better emissions or performance), the Customer shall pay for the subsistence and overnight accommodation, but there shall be no additional charge for airline transportation. The costs charged to the Customer shall be in accordance with the Contractor's then current and published Schedule of Field Rates. The terms of Section 5.2 in connection with the obligation of Contractor's personnel to remain at the Site until authorized by Customer to depart (and the criteria for Customer's approval of such person's departure) shall apply in the situation described in this Section 6.3. 6.4 The Customer shall ensure that the Contractor's representatives have full and free access to the Equipment during the visits to Site and to any records of its use kept by the Customer to enable the Contractor to perform the Services under this Contract. 6.5 The Customer shall provide to the Contractor the Customer's safety and security regulations applicable to all personnel at the Site. 6.6 The Contractor shall require its representatives while at the Site to observe the safety and security regulations of the Customer. In the event of any material non -observance of these regulations by a representative of the Contractor, the Customer shall inform the Contractor and may require the Contractor to withdraw the representative concerned from the Site. 6.7 At the end of each visit to a Site by a Contractor's Personnel, such party and the Customer shall complete and sign a Site visit record as a record of the visit, and each Party shall be entitled to a copy of it. In addition, after each visit by Contractor's Personnel to the Site, the Contractor shall within 2 weeks provide to the Customer a written report on the visit, including the reasons for the visit, the observations made by the Contractor's Personnel and the actions taken or to be taken. 7. CONTRACTOR'S STOCK PARTS 7.1 (a) The Contractor may supply Contractor's Spare Parts to the Site DDP INCOTERMS 2000, which separate stock shall be those spare parts that Contractor considers on the basis of its experience to be likely to be required for the maintenance of the Equipment. (b) Unless otherwise agreed between the Parties, the Contractor's Stock Parts shall be placed and kept by the Customer at its own risk and expense in suitable dry and secure storage at the Site. The Customer shall hold the Contractor's Stock Parts at Site as bailee for the Contractor, clearly identify it as belonging to the Contractor and insure it against all risks of loss and damage for the full replacement value as specified by notice in writing from the Contractor. (c) The Customer shall grant to the Contractor's representatives reasonable access to the Contractor's Stock Parts at reasonable times for the purpose of inspection, protection or removal. (d) The Contractor shall have the right to remove parts from the Contractor's Stock Parts at any time for use in the repair of the Equipment or in the event of failure by the Customer to keep any of them in good condition or to comply with any of its obligations under the Contract and 12 01910/0038 149307.15 on termination of Contract. The Contractor may at its own expense on an exceptional basis also remove parts from the Contractor's Stock Parts at any time for use in the maintenance of other equipment located in the territory. 7.2 All Program Spare Parts which are permanently removed and replaced during the course of repairs by the Contractor pursuant to this Contract, and are requested by the Contractor for refurbishment or are at end of life cycle shall become the property of the Contractor except where otherwise agreed in writing between the Parties. 8. DELIVERY, TITLE, RISK OF LOSS OR DAMAGE, AND LICENSE 8.1 Delivery of each Spare Part or consumable specified in this Contract and its Appendices shall be DDP Plant Site, Vernon, California, USA (INCOTERM 2000). Subject to the provisions of Section 8.2 below, and except for Contractor's Stock Parts, legal and equitable title and risk of loss or damage to each Spare Part or consumable shall pass from Contractor to Customer upon delivery. 8.2 Title to any Software licensed hereunder shall remain with Contractor or its licensor. Contractor hereby licenses the Software to Customer under the terms of the Software License attached hereto as Appendix 10.2, and Customer shall, for the term of this Contract have the right of possession and use of the Software; provided, however, that if this Contract is terminated, the license for possession and use of the Software shall terminate concurrently with the termination of this Contract. Nothing in this Contract shall be construed as giving Customer any right to sell, assign, lease or in any other manner transfer or encumber Contractor's or its licensor's ownership of the Software, except that if this Contract is assigned in conjunction with the sale of the Plant, the Software shall be licensed to the new owner of the Plant without further charge or new conditions. Nothing in this Contract shall limit Contractor or its licensor from using and licensing the Software to any third party. 8.3 Contractor grants to Customer a nonexclusive, nontransferable license to utilize the Contractor's Software furnished hereunder. Such license is limited to Customer's internal use for the Equipment with which such Software is incorporated. All title and ownership of the Contractor's Software, including, without limitation, the copyright to such Software, shall remain exclusively with Contractor. Customer may make a reasonable number of backup copies of the Software for evaluation, installation, and maintenance of the Equipment. Customer shall not itself, or with the assistance of others, reverse compile, reverse engineer, or in any other manner attempt to decipher in whole or in part the logic or coherence of any Software licensed hereunder. Third party Software provided by Contractor may be subject to a separate license agreement and/or registration requirements and limitations on copying and use. 8.4 Risk of loss of or damage to Customer's Material or other property located at the Site shall remain with Customer at all times during the performance of work hereunder, except to the extent damage results from the negligent acts or omissions of Contractor and Contractor's employees and agents, as further described in Section 16.5. 9. EMERGENCY GAS GENERATOR/TURBINE AND EMERGENCY MODULES In the case of unforeseen events and for Corrective Maintenance, the Customer shall have access to the Contractor's emergency gas generator/turbine and emergency modules according to the terms to be negotiated at the time and Appendices 6.1, 6.2, and 13. Emergency gas generators/turbines and modules are available on a first come, first served basis. 10. OPERATION OF THE EQUIPMENT 10.1 The day to day operation of the Equipment shall be the responsibility of the Customer. The Contractor shall not be required to operate the Equipment and Contractor's Personnel are not authorized to do so on its behalf except for the purposes of re -commissioning or, with the consent of the Customer, to change settings in the Equipment. 10.2 The Customer shall be responsible for obtaining and maintaining the permits, licenses, and authorizations necessary for the operation of the Equipment and for ensuring that the Equipment complies with applicable safety laws and other applicable laws and regulations. 13 01910/0038 149307.15 ✓" J in,. 1 10.3 The Customer shall operate the Equipment only with qualified personnel (in accordance with Section 2.2.16) and in accordance with good and prudent engineering practices and in accordance with Customer's Manuals. 10.4 The Customer or its approved contractor shall carry out the routine maintenance of the Equipment recommended by the manufacturers of the Equipment and shall correct minor faults promptly after consultation with the Contractor's technical representatives. 10.5 10.5 Other than as stated in Section 10.4 above, the Customer shall not allow any person other than a representative of the Contractor to repair, replace or remove any part of the Equipment without the Contractor's prior written approval. 10.6 In the event of any alteration to the Equipment, the Customer shall advise the Contractor promptly in writing. If such alteration materially affects the cost to the Contractor of providing the Services under this Contract, the Parties will agree to an appropriate revision to the Contract Price and other consequential amendments to the terms of this Contract. If agreement on such revisions is not reached within 90 days of a request from a Party to negotiate in such circumstances, then either Party shall be entitled to terminate this Contract by not less than 90 days' notice in writing. 10.7 The Customer shall shut down the Equipment upon the request of the Contractor when, in the best judgment of the Contractor, continued operation would constitute a risk of substantial damage to the Equipment and/or personnel in the vicinity of the Equipment. 10.8 The Customer shall be responsible for ensuring that all lubricants, water and/or steam used in the operation of the Equipment complies with the Customer's Manuals, and failure to substantially comply with specifications as set forth in the Customer's Manuals may be determined to be improper operation. Contractor has delivered to the Customer the Customer's Manuals, including all updates, each with the appropriate date and revision number, current through the Effective Date. The Customer shall be responsible for ensuring that the fuel used in the operation of the Equipment meets the standards attached hereto as Appendix 15, which Contractor acknowledges is within the +/- 5% general requirement for gaseous fuel set forth in the Wobbe-index. 11. RECORDS AND REPORTS 11.1 The Customer shall monitor the operation of the Equipment and maintain the operating log book, in form and substance mutually agreed to, and shall within 5 days after the end of each calendar month provide to the Contractor a copy of the entries made in the operating log book during that month. 11.2 The Customer shall use commercially reasonable efforts to report promptly to the Contractor actually observed changes in operating condition, operating abnormalities, unplanned shutdowns of the gas turbine, faults and defects in and malfunctions of the Equipment. Such reports shall be made in writing by facsimile transmission or other means of transmission approved by the Contractor. Oral reporting shall be deemed to comply with this requirement provided that it is confirmed in writing in the following 48 hours. 12. PRICE AND PAYMENT 12.1 The Customer shall pay to the Contractor the Contract Price in accordance with the provisions of the Term and Cost Sheet attached hereto as Appendix 13. The price will be in US Dollars, established using the exchange rate SEK/USD in effect as of the Effective Date. 12.2 All invoices shall be paid within forty-five (45) days after the date of the invoice. 12.3 If there exists a good faith dispute over the amounts to be paid, Customer shall pay the undisputed amount. The disputed portion may be held in abeyance until resolution of the dispute with that portion, together with the interest charge specified in Section 12.9 below, due thirty (30) days after said resolution. 12.4 Work outside the Contractor's obligations as described in Article 2 will be charged at Contractor's standard published rates valid as stated in Appendix 11. 14 01910/0038149307.15 � / •r: 1 12.5 The amount of the remaining unpaid balance of the Contract Price on each anniversary of the Effective Date will be subject to an annual escalation in the amount of 3% of the then outstanding balance through September 30, 2010, and in the amount of 4% of the then outstanding balance after September 30, 2010. 12.6 Intentionally deleted. 12.7 The price paid or to be paid to Contractor under the Contract does not include any federal (other than federal and state income taxes imposed on Contractor), state, or local property, license, privilege, sales, use, excise, value added, gross receipts, or similar taxes now or hereafter applicable to, measured by, or imposed upon or with respect to the transaction, the Equipment and Customer's Material, its or their sale; their value or their use, or any Services performed in connection therewith. Customer agrees to pay or reimburse Contractor for any such taxes which Contractor or its suppliers are required to pay. 12.8 If any law, regulation or standard comes into force after the Effective Date which increases or reduces the cost to the Contractor of performing the Services under the Contract, the Contract Price shall be adjusted accordingly. 12.9 In the event that any undisputed payment provided to be made by the Customer under this Contract is not made in due time in accordance with the provisions hereof, the Contractor shall be entitled (without prejudice to other rights and remedies which it may have), upon thirty (30) days written notice, to, at its option, (i) terminate this Contract (which termination shall be treated as a termination pursuant to Article 23, Termination and subject to Section 23.5) or (ii) suspend all further work hereunder until such time as the full amounts due have been paid. The schedule for the resumed work will be established by Contractor based on its then current work load and the availability of other resources. Any past due payments shall, without prejudice to the right of Contractor to payment when due, bear interest at a floating rate equivalent to one -twelfth (1/12) of the per annum prime rate charged by Chase Manhattan Bank, New York, New York, U.S.A., as such prime rate is published on the first banking day following the date payment is due, plus an additional one-half of one percent (0.5%), payable each month or portion thereof that payment is delayed. 12.10 In the event of a suspension, the actual, out of pocket costs reasonably and properly incurred by the Contractor as a result of the suspension shall be added to the Contract Price and paid by the Customer within 30 days of invoice date. 13. EXECUTION TIME; RELIABILITY GUARANTEE; EMISSIONS AND PERFORMANCE 13.1 Execution Time for Overhauls The Contractor shall use commercially reasonable efforts to complete each Overhaul in accordance with Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2 within the Execution Times provided in the table below, to be extended if the Customer requests the Contractor to perform Corrective Maintenance. Estimated execution time (calendar days, measured concurrently from first day of Overhaul): Overhaul GT1 GT2 ST B / LO 19 19 5 C/ MO 22 22 21 The work shall be executed in 2 or more shifts, and as further described in Appendices 1.4.1 and 1.5.1, and Contractor shall ensure that personnel supervising or performing the Overhauls shall remain at the Plant during their assigned times or shifts, and shall not leave the Plant for another job or to return home until Customer has approved, in writing, their departure. Customer shall approve a person's departure after the required task has been completed, or if the person's departure will not adversely affect the outage or the schedule, or after Contractor has provided a substitute person with comparable experience, skills, and knowledge. In the latter case, the Contractor shall ensure an overlap of these personnel to ensure an effective handover of responsibilities at the Plant. W 01910/0038 149307.15 /0-1 M,1 , A 13.2 Reliability Guarantee The Contractor guarantees the reliability of each of the two Gas Turbines, measured individually, of 97%, and the Steam Turbine, measured individually, of 97% in accordance with the additional terms and conditions in Appendix 8. For purposes of the Reliability Guarantee, the Turbines include their associated gearboxes, generators and auxiliary and control systems and other components, as listed as part of the Activity Lists in Appendices 1.2.1, 1.2.2, 1.3.1, 1.3.2, 1.4.1, 1.4.2, 1.5.1, and 1.5.2. If there is a failure of reliability during the time when the Reliability Guarantee is in force, and there is a need for one or more of the Corrective Maintenance Spare Parts listed in Appendix 8.1 or one of the Special Tools specified in Appendix 8.2, option 140 and 142 (collectively, the "Reliability Guarantee Parts and Tools") in order to cure the failure, and any such Reliability Guarantee Spare Parts or Tools is not located at the Plant, the number of days required to obtain the required Reliability Guarantee Spare Part(s) or Tool(s) shall not be counted as days of lack of Reliability for purposes of determining whether the Reliability Guarantee has been satisfied. Customer is not obligated to maintain the Reliability Guarantee Parts and Tools at the Plant, and it shall not be a breach of this Contract if Customer does not have any of the Reliability Guarantee Parts and Tools at the Plant when needed, and such lack of any Reliability Guarantee Parts and Tools shall not void Contractor's Reliability Guarantee, except to the extent that the lack of the Reliability Spare Parts and Tools actually causes a delay in curing the failure of reliability. In no event shall Contractor be liable for any delay caused by the lack of the Reliability Guarantee Parts and Tools. The Customer undertakes to keep the following systems in operation: CMS module 0 for the gas turbines in operation, in accordance with Appendices 10.1 and 10.2 to be operated in conjunction with Customer's PI System. 2. Remote on-line connection to Contractor in operation, in accordance with Appendix 7. 3. Operation of the Plant and daily and routine maintenance shall be carried out by qualified trained personnel as set forth in Section 2,2.16. The standards for the Reliability Guarantee, including procedures, measurements, evaluations, and Liquidated Damages are set forth in Appendix 8. 13.3 EMISSIONS AND PERFORMANCE Contractor shall provide assistance as requested by Customer to achieve the Emissions Requirements as described in Appendix 12 and Contractor shall provide assistance as requested by Customer to achieve the Performance Requirements as described in Appendix 9 at the then published Field Service Rates. 14. LIQUIDATED DAMAGES Aggregated Liquidated Damages shall not exceed 7.5% of the total amount of the Contract Price during the term of this Contract, and shall be payable on the terms described in Appendix 8. 1s. CONTRACTOR'S WARRANTY 15.1 The Contractor undertakes that the Services provided by it under this Contract shall be carried out by qualified personnel, knowledgeable about and experienced with the Equipment, with due care and skill and in accordance with good and prudent industry standards. Spare Parts shall be examined prior to incorporation into the Equipment and replaced if determined to be defective or nonconforming or not appropriate for the Plant. Furthermore, any Spare Parts incorporated into the Equipment in the course of repairs or overhauls pursuant to this Contract shall, under proper use, be free from defects in material and workmanship and shall be OEM and the proper and appropriate Spare Parts for the Equipment. "Proper use" means operation and maintenance of the Equipment in accordance with the Customer's Manuals. 15.2 The Contractor's obligation under this undertaking shall be limited to repair or replacement, at the Contractor's option, and, in either event, at the Contractor's expense (and including the Contractor's Personnel's time, travel, and subsistence expenses for making the repair or replacement), and shall 16 01910/0038 149307.15 1/4�1 �), apply in the event of (a) any defect in the Equipment caused by the negligence of the Contractor, its employees or other representatives in carrying out the Services, or (b) any defect in the Spare Parts, or (c) any Services provided that do not conform to the requirements of this Contract. The Contractor's warranty for Spare Parts is subject to the following: (a) The Contractor's obligation shall be to remedy such defects which appear at any time before the expiry of a period of 12 months after (a) the completion of the Services rendered in connection with an Overhaul, or (b) incorporation of the Spare Parts concerned (in either case, the "Trigger Date"). (b) Notwithstanding the expiry or termination of this Contract (howsoever occasioned), the Contractor's obligation under this Article 15 to remedy such defects in respect of Services carried out by it or the incorporation of Spare Parts shall continue until the expiry of the period of 12 months from the Trigger Date, but other liabilities of any kind for defective Services and/or Spare Parts shall cease; (c) The Contractor's obligation to remedy such defects in Spare Parts which have already been incorporated into the Equipment by reason of an earlier defect in parts which they replaced shall apply for a period of 24 months after the incorporation into the Equipment of the parts which they replaced, regardless of the expiry or termination of this Contract for any reason; and (d) in the circumstances referred to above, the Contractor's obligation shall not extend to failures caused by normal wear and tear. 15.3 The Contractor's obligations and liabilities under this Article 15 shall not extend to failures or defects arising in any of the circumstances that were Customer's responsibility as set forth in the Customer's Manuals or in this Contract. Diagnostic and non-destructive examination and testing techniques employed by Contractor represent the current Contractor's techniques for detecting defects in (including indications of cracking) and evaluation of the condition of Customer's Material and the Equipment. However even these current techniques, when performed according to the standards detailed above in this Article 15, may not detect all of the defects in Customer's Material and the Equipment (including indications of cracking) and such failure shall not constitute a breach by Contractor of its warranty obligations. Customer acknowledges that Contractor will not be responsible for the consequences of undetected defects including undetected cracks. Contractor warrants that the Equipment and Spare Parts, upon delivery, shall not be subject to any encumbrances, liens, security interests, or other defects in title. In the event of any failure to conform to this warranty, Contractor, upon prompt written notice of such failure, shall defend the title to the Equipment and the Spare Parts. 15.4 The Contractor's obligation under this Article 15 is subject to the Contractor being given prompt notice by the Customer of the appearance of the defect and a reasonable opportunity to investigate and rectify it. 15.5 THE WARRANTIES SET FORTH IN ARTICLE 15 ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER STATUTORY, EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE). Correction of nonconformities in the manner and for the period of time provided above constitute Contractor's sole and exclusive liability and Customer's sole and exclusive remedy for defective or nonconforming Equipment and/or Services whether claims of the Customer are based in contract, in tort (including negligence and strict liability), or any other theory of recovery. The Contractor's liabilities and the Customer's remedies in respect of defects in the Services and any damage to the Equipment resulting therefrom whether arising from breach of contract or warranty, tort (including strict liability), negligence or any other theory of recovery are solely and exclusively as stated in this Article 15. IVA 01910/0038 149307.15 / )__2 A - 1 Customer assumes the entire liability and risk arising out of or resulting from Third Party Parts and Services on Third Party Parts. The warranties and remedies set forth herein do not apply to any Third Party Parts or Services on Third Party Parts, and CONTRACTOR DISCLAIMS ANY AND ALL WARRANTIES AND REMEDIES, WHETHER STATUTORY, EXPRESS OR IMPLIED, FOR OR WITH RESPECT TO THIRD PARTY PARTS OR SERVICES ON THIRD PARTY PARTS. The Contractor does not warrant the accuracy or completeness of any data downloaded by the CMS System or guarantee the Customer uninterrupted service with, the correction of any error in or elimination of any 'bug' in the CMS System. Monitoring devices supplied by Contractor pursuant to this Contractor, such as but not limited to, monitors for generator condition and for steam chemistry, are intended to enhance the availability and reliability of the Equipment. These monitors normally represent state-of-the-art technology which enables users to better diagnose and control conditions within a turbine generator. While such monitors follow conditions and trends within the Equipment and thereby permit earlier detection of harmful conditions, Contractor does not warrant or represent that the use of such monitors will prevent failure or detect all harmful conditions in a turbine generator and Customer acknowledges the same. 15.6 Deleted 15.7 The warranties and remedies set forth in this Article 15 are conditioned upon: (1) Customer's receipt, handling, storage, installation, testing, operation and maintenance, including tasks incident thereto, of the Equipment and/or Customer's Material in accordance with Customer's Manuals, to the extent applicable or, in the absence of such or to the extent not applicable, in accordance with the generally accepted practices of the industry. In addition, such Equipment and Customer's Material shall not have been operated in excess of limitations specified in Customer's Manuals and not have been subjected to accident, alteration, abuse or misuse; and (2) For all warranty work, where disassembly, removal, replacement and reinstallation of Equipment, materials, structures or Customer's Material was not part of Contractor's scope of work under the Contract; Customer providing, without cost to Contractor, access to the nonconformity by disassembling, removing, replacing and reinstalling any Equipment, materials, structures or Customer's Material to the extent necessary to permit Contractor to perform its warranty obligations. (3) All warranty work being performed on a single -shift straight -time basis, 10 hours per day, 50 hours per week, Monday through Friday. In the event Customer requests correction of warranty items on an overtime or multiple shift schedule, the premium portion of such overtime or multiple shift shall be to Customer's account. (4) Customer, without cost to Contractor, making its Site facilities and personnel (to the extent consistent with personnel job classifications) available to assist Contractor in the performance of its warranty obligations. 16. LIMITATION OF LIABILITY 16.1 For the purpose of this Article 16 only: a) "Contractor' shall include the Contractor, its sub -contractors, its Affiliates and, where the context so admits, the respective servants, agents and employees of all of the foregoing. b) "Customer' shall include the Customer, its Affiliates, its co -venturers including any financiers, lenders or banks (if any), end users or ultimate owners of the Equipment (if any), and, where the context so admits, the respective servants, agents and employees of all of the foregoing. 16.2 In all cases the Parties establishing or alleging a breach of contract or a right to be indemnified in accordance with this Contract shall be under a duty to take reasonable necessary measures to mitigate the loss which has occurred providing that it can do so without unreasonable inconvenience or cost. 18 01910/0038 149307.15 16.3 NOTWITHSTANDING ANY OTHER PROVISION OF THE AGREEMENT, THE PARTIES EXPRESSLY AGREE THAT, EXCEPT FOR ANY LIQUIDATED DAMAGES PAYABLE IN ACCORDANCE WITH THIS CONTRACT, NEITHER CUSTOMER OR CONTRACTOR NOR ITS SUPPLIERS WILL UNDER ANY CIRCUMSTANCES BE LIABLE UNDER ANY THEORY OF RECOVERY, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER WARRANTY, OR OTHERWISE, FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE WHATSOEVER; LOSS OF PROFITS OR REVENUE OR LOSS OF USE THEREOF; LOSS OF USE OF PURCHASER'S MATERIAL, EQUIPMENT OR POWER SYSTEM; COST OF CAPITAL: COST OF FUEL; COST OF PURCHASED OR REPLACEMENT POWER; INCREASED COSTS OF ANY KIND; OR ANY CLAIMS OF CUSTOMERS OF CUSTOMER. NOTHING SET FORTH HEREIN NEGATES ANY LIQUIDATED DAMAGES PAYABLE IN ACCORDANCE WITH THIS CONTRACT. 16.4 Intentionally deleted. 16.5 Except to the extent caused by Customer, Contractor shall indemnify Customer for any loss, damage, liability, or judgment resulting from claims for injury to or death of any party at the Site or physical damage to property of any party that is located at the Site during Contractor's performance of the Services at the Site to the extent caused by the negligent acts or omissions of Contractor or Contractor's Personnel, Associates, or Affiliates in the performance of Contractor's Services under this Contract; provided however, in no event shall this indemnity provision apply to any claim by a customer of Customer for voltage or frequency fluctuation or service interruption of any kind or to any claim by any third party for failure of Customer to provide power or capacity under any contract. The liability under this Section 16.5 for damage to Customer's property shall be limited to $2.5M per occurrence and in the annual aggregate and to the extent caused by warranty non -conformity or Contractor's negligence. Contractor's indemnity shall survive the termination of this Contract, but Contractor's indemnity obligation under this Section shall not apply or relate to events or circumstances that occur after the termination of this Contract. 16.6 Except to the extent caused by Contractor or any of Contractor's Personnel, Affiliates, or Associates, Customer shall indemnify Contractor for any loss, damage, liability, or judgment resulting from claims for injury to or death of a third party or physical damage to third party property located at the Site to the extent caused by the negligent acts or omissions of Customer, its agents, contractors, employees, directors, partners and their respective employees. Customer's indemnity shall survive the termination of this Contract, but Customer's indemnity obligation under this Section shall not apply or relate to events or circumstances that occur after the termination of this Contract. "Third party property" for purposes of this Section 16.6 shall in no case include any part of the Site or the Plant in which the Customer has any interest, directly therein, whether by title, lease, pledge or otherwise. 16.7 The Customer shall indemnify and hold harmless the Contractor from and against all actions, suits, claims, demands, costs, charges and expenses (including legal costs and expenses) in respect of the Customer's responsibilities set out in Section 16.8 below howsoever caused including, but not limited to tort, negligence, breach of statutory duty, or breach of the Contract. 16.8 Any indemnification obligation under this Contract shall be subject to the following conditions: (a) the indemnified Party shall promptly notify the indemnifying Party in writing of the claim for which it is seeking indemnification; (b) the indemnifying Party may at its sole discretion, risk and expense conduct negotiations for the settlement of such claim and any litigation or arbitration that may arise from it. (c) the indemnified Party shall not make any admission of liability or settlement which might be prejudicial to the indemnifying Party without the prior written consent of the indemnifying Party or in the event that the indemnifying Party has given written notice to the indemnified Party that it will not conduct the negotiations, litigation or arbitration to resolve such claim (d) the indemnified Party shall, at its expense as to internal personnel, but at the indemnifying Party's expense as to out of pocket costs and expenses, provide all reasonable assistance to the indemnifying Party for its defense and/or settlement of any such claim. 19 01910/0038 149307.15 / V - � I. . i (e) The indemnifying Party shall, at its sole cost and expense, and with counsel reasonably acceptable to the indemnified Party, defend and protect the indemnified Party from all costs, claims, and losses, including all costs of defense, judgment, and settlement, including, without limitation, attorneys' fees and costs, and costs of experts, witnesses, and consultants. 16.9 THE PARTIES EXPRESSLY AGREE THAT THE REMEDIES PROVIDED IN THIS CONTRACT ARE EXCLUSIVE, AND THAT NOTWITHSTANDING ANY OTHER PROVISION OF THIS CONTRACT, EXCEPT FOR ITS INDEMNITY OBLIGATIONS, UNDER NO CIRCUMSTANCES SHALL THE TOTAL AGGREGATE LIABILITY OF CONTRACTOR UNDER ANY THEORY OF RECOVERY, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER WARRANTY, OR OTHERWISE, EXCEED THE TOTAL CONTRACT PRICE PAID TO DATE TO CONTRACTOR UNDER THIS CONTRACT. 16.10 EXCEPT FOR CONTRACTOR'S INDEMNITIES AS SET FORTH IN THIS CONTRACT, AND EXCEPT AS OTHERWISE PROVIDED IN SECTION 15.2, THE LIABILITY OF CONTRACTOR AND ITS SUPPLIERS UNDER THIS CONTRACT SHALL TERMINATE NO LATER THAN TWELVE (12) MONTHS AFTER THE TERMINATION OF THE CONTRACT. 17. INTELLECTUAL PROPERTY INFRINGEMENT 17.1 Contractor will, at its own expense, indemnify, defend, and hold harmless, and, at its option settle, any suit or proceeding brought against Customer (and Customer's elected officials, employees, agents, and independent contractors) to the extent based on an allegation that any Spare Parts delivered hereunder or Services on Customer's Material or the Equipment (including parts thereof), or use thereof for their intended purpose, constitutes an infringement of any patent issued by a Patent Cooperation Treaty member country, trademark, or copyright, or violates any other proprietary interest or intellectual property right, including, without limitation, misappropriation of a trade secret. Customer shall give prompt notice in writing to Contractor of any such action or proceeding, and shall provide Contractor with authority, information, and assistance (to be furnished at Contractor's expense) in a timely manner for the defense of said suit or proceeding; provided, however, that any delay in notice shall not affect the scope of the indemnity set forth herein except to the extent of actual loss or damage caused by such delay. Contractor will pay all costs of defense, including attorneys' fees and costs and costs of witnesses and experts, and the damages awarded in any suit or proceeding so defended. Contractor will not be responsible for any settlement of such suit or proceeding made without its prior written consent, which consent shall not be unreasonably denied. The indemnity set forth herein shall survive the termination of this Contract as to Spare Parts and Services provided by Contractor or its Affiliates or Associates. In case the Spare Parts or Services on Customer's Material or the Equipment, or any part thereof, as a result of any suit or proceeding so defended is held to constitute infringement of any such patent, trademark, copyright, trade secret, or other proprietary interest or intellectual property right, or its use by Customer is enjoined, Contractor will, at Contractor's own expense, use best efforts to procure the right to continue using the Spare Parts or to provide the Services. If Contractor cannot procure such rights within a reasonable time, Contractor shall then promptly, at Contractor's expense, and with Customer's prior written approval, either: (a) replace the Spare Parts or Services with substantially equivalent non -infringing equipment; or (b) modify Spare Parts or Services so they become non - infringing, so long as, in either such case, the substitution or modification does not violate any, or cause the Plant to violate any, applicable law, governmental approval, permit, or warranty set forth herein. 17.2 Contractor will have no duty or obligation to Customer under this Article 17 to the extent that the Spare Parts provided or Services on Customer's Material or Equipment is (a) supplied according to Customer's design or instructions wherein compliance therewith has caused Contractor to deviate from its normal course of performance, (b) modified by Customer or its contractors after delivery, or (c) combined by Customer or its contractors with items not furnished hereunder. In addition, if by reason of such design, instruction, modification or combination, a suit or proceeding is brought against Contractor, Customer shall protect Contractor in the same manner and to the same extent that Contractor has agreed to protect Customer under the provisions of Section 17.1 above. 17.3 THIS ARTICLE IS AN EXCLUSIVE STATEMENT OF ALL THE DUTIES OF THE PARTIES RELATING TO PATENTS, COPYRIGHTS OR TRADE SECRETS AND DIRECT OR CONTRIBUTORY INFRINGEMENT THEREOF AND OF ALL THE REMEDIES OF EITHER PARTY 20 01910/0038 149307.15 RELATING TO ANY CLAIMS, SUITS, OR PROCEEDINGS INVOLVING PATENTS, COPYRIGHTS OR TRADE SECRETS. Compliance with this Article as provided herein shall constitute fulfillment of all liabilities of the Parties under this Contract with respect to patents, copyrights or trade secrets. 17.4 No right, title or interest to or in any patents, copyrights, trademarks, service marks, trade names, or any intellectual property of or held by Contractor or its Affiliates or Associates is granted hereunder. 18. INSURANCE 18.1 The Customer agrees to carry and maintain in force for the duration of this Contract and any continuation thereof the following insurance as a minimum which shall be placed with reputable and substantial insurers satisfactory to the Contractor: 18.2 Property Insurance: Throughout the duration of this Contract and until the expiration of the last of the applicable Warranty Periods, Customer shall purchase and maintain property damage insurance for the facilities at the Site. Such insurance will name Contractor and its named suppliers as an additional insured, with a waiver of subrogation, for physical loss or damage to the property at the Site (including the Equipment and Customer's Material). Coverage shall be on a 100% replacement cost basis with no exclusion for manufacturer's warranties. 18.3 Customer shall provide to Contractor certificates evidencing such coverages and shall make reasonable efforts to have all such insurance certificates endorsed to provide that Contractor shall be given thirty (30) days advance notice of cancellation or material change. Customer shall be responsible for any deductible amounts. In connection with this Contract, Contractor shall maintain insurance (or self insurance) as specified in clauses (a), (b), (c), and (d) below and shall deliver to Customer certificates evidencing such coverages and shall make reasonable efforts to have all such insurance certificates endorsed to provide that Customer shall be given thirty (30) days advance notice of cancellation or material change. Contractor shall be responsible for any deductible amounts. The insurance described in clauses (b) and (c) shall name Customer as an additional insured. (a) Worker's. Compensation: Contractor shall comply with workers compensation laws (or equivalent) in each jurisdiction where work is performed, and shall maintain a Workers Compensation and Employers Liability insurance policy. If any work is to be performed on or near navigable waters, the policy shall include coverage for United States Longshoreman's and Harbor Worker's Act, Death on the High Seas Act, Jones Act, or their equivalent as required by the applicable law in the jurisdiction where such work is performed. The limits of such insurance shall be as follows: Worker's Compensation — Statutory Employer's Liability — $1,000,000 each accident and in the aggregate $1,000,000 disease each employee. (b) Commercial General Liability: Contractor shall maintain commercial general liability insurance on an occurrence basis to provide coverage for: Bodily Injury; Personal Injury and Death, Property Damage, Explosion, Collapse and Underground hazards; Contractual Liability (particularly applicable to the provisions of the Indemnity Article of this Agreement); and Products and Completed Operations, and E and O coverage with limits as follows: $1,000,000 each occurrence and in the aggregate. (c) Business Automobile Liability: Contractor shall maintain business automobile liability insurance which shall include coverage for all owned, non -owned and hired vehicles with the following limit: $1,000,000 Combined Single Limit Bodily Injury and Property Damage (d) Umbrella Liability: Contractor shall maintain umbrella liability insurance with a limit of $2,000,000 each occurrence and in the aggregate. The policy shall be excess over the 21 01910/0038 149307.15 IL_ i In _ \ Commercial General Liability, Business Automobile Liability, and Employer's Liability coverages. 18.4 Waiver of Subrogation Rights Notwithstanding any provision to the contrary in this Contract, the insurance described in Section 18.3 shall be primary as to all other policies (including any deductibles or self -insured retention (s)) and self insurance which may provide coverage. It is further agreed that the Customer shall procure that the insurer(s) providing coverage under Section 18.3 shall include the Contractor as additional insured and shall waive all rights of subrogation and/or contribution against, the Contractor to the extent of the liabilities assumed by the Customer under this Contract. 18.5 Proof of Insurance and Changes The Customer shall furnish to the Contractor on request, certificates of insurance as evidence of its compliance with Section 18.2 and such insurance shall also where possible provide that the Contractor shall be given not less than 30 days notice of cancellation or material change to cover. 19. CONFIDENTIALITY 19.1 The provisions of the Contract, including any proposals, shall be treated by both Parties as confidential and shall not be disclosed by either Party to any third party without the prior, written consent of the other except where and to the extent that such disclosure is reasonably required by law or in connection with applications and reports to governmental authorities, the borrowing of funds, obtaining of insurance, or potential sale or assignment of any interest in this Contract permitted hereunder. Except as contemplated by the terms hereof, or in the event of litigation between the Parties hereto, or as required by applicable law or pursuant to an order entered or subpoena issued by a court of competent jurisdiction, any confidential information provided by Contractor under this Contract shall not be disclosed publicly or made available to third parties, other than such of Customer's employees, consultants, and advisors as the Customer determines to have a need to know, which shall include the City Council, without the prior approval of Contractor. Notwithstanding anything to the contrary in this Contract, Contractor acknowledges that the agenda and proceedings of the City Council are public and of public record, as are any agreements entered into by the Customer; provided, however, that the Customer shall use reasonable efforts to maintain as confidential any information of Contractor provided pursuant to this Agreement. 19.2 Subject to Section 19.3, technical information supplied by one Party to the other in connection with this Contract shall remain the property of the furnishing Party, shall be kept confidential and shall not be copied, modified, disclosed or used by the receiving Party otherwise than for the purposes of the operation, repair and maintenance of the Equipment pursuant to this Contract. When required by appropriate governmental authority, including governmental regulations, applicable law or regulation, by order of a court of competent jurisdiction or lawful subpoena (hereinafter collectively referred to as "Governmental Authority"), Customer may disclose such confidential information to such Governmental Authority; provided, however, that prior to making any such disclosure, Customer will: (a) provide Contractor with timely advance written notice of the confidential information requested by such Governmental Authority and Customer's intent to so disclose; (b) minimize the amount of confidential information to be provided consonant with the interests of Contractor and its suppliers and the requirements of the Governmental Authority involved; and (c) make every reasonable effort (which shall include participation by Contractor in discussions with the Governmental Authority involved) to secure confidential treatment and minimization of the proprietary information to be provided. In the event that efforts to secure confidential treatment are unsuccessful, Contractor shall have the prior right to revise such information to minimize the disclosure of such information in a manner consonant with its interests and the requirements of the Governmental Authority involved. 19.3 All of the intellectual property rights in data downloaded to the Contractor using the CMS System shall be the sole, proprietary, and confidential property of the Customer and shall be made available to the Customer without charge at any time and from time to time during the term of this Contract. All of such data shall be delivered to the Customer at the termination of this Contract without charge, and regardless of the reason for the termination. The Contractor hereby acknowledges the confidentiality of such data and acknowledges that use of such data is governed by the terms of 22 01910/0038 149307.15 Section 19.2 of this Contract. Notwithstanding the provisions of this paragraph, Contractor shall have the right to use such information in aggregate statistical analyses, without identification of any data specifically associated with Customer. 20. ASSIGNMENT AND SUBCONTRACTING 20.1 With Customer's prior written consent, the whole or any part of this Contract may be transferred, assigned or subcontracted by the Contractor to a Contractor's Associate; provided, however, that Customer's consent shall not be required to transfer, assign, or subcontract to Siemens Industrial Turbomachinery AB, located in Finspong, Sweden. 20.2 The Contractor may subcontract the inspection ' or repair of parts of the Equipment to the manufacturers of those parts. 20.3 The Contractor shall remain responsible to the Customer for the performance of Services under this Contract by the Contractor's Associates and the Contractor's Personnel in every way as if the activities of the Contractor's Personnel were being carried out by the Contractor itself. 20.4 Customer shall have the right to assign this Contract in connection with the sale of the Plant, without obtaining the consent of the Contractor, unless the Plant is sold to (i) a direct competitor of Contractor; (ii) an entity with which Contractor is in litigation or arbitration, or (iii) an entity without the demonstrated and acceptable assurances of payment. For purposes of this Section 20.4, a "direct competitor" is the specific division of a company that is in the power operations business and to whom disclosure of Contractor's confidential and proprietary information, such as manuals or practices, would be detrimental. In the case of a large company, only the division to which this description applies will be deemed to be a "direct competitor". In the event of such sale, Customer will provide the name of the buyer and Contractor will notify Customer within five (5) business days of Contractor's receipt of such notice if the buyer is one of the entities described in this Section 20.4. In such event, Contractor shall have the right to terminate this Contract, upon 60 days' prior written notice, delivered within twenty (20) days after the sale of the Plant and assignment of this Contract to a buyer that Contractor has identified as meeting the criteria of clause (i), (ii), or (iii) of this Section 20.4. 20.5 Except as set out in this Article 20, neither Party shall be entitled to transfer, assign or subcontract the whole or any part of this Contract without the prior written consent of the other Party. 21. FORCE MAJEURE 21.1 If performance of any obligation under the Contract (other than an obligation of the Customer to make payment) resulting from or contributed to by any cause beyond the reasonable control of either Party or its suppliers or from any act of God; act of civil or military authority; act of war whether declared or undeclared; act (including delay, failure to act or priority) of any governmental authority or Customer; act of terrorism; civil disturbance, rebellion, insurrection, riot or sabotage; fire, inclement weather conditions, earthquake, flood or natural disaster; strike, work stoppage or other labor difficulty; embargo, epidemic or quarantine; railroad car, fuel or energy shortage; major equipment breakdown; delay or accident in shipping or transportation; or failure or delay beyond that its reasonable control in obtaining necessary manufacturing facilities, labor, or materials from usual sources, then that Party shall be excused from and shall not be liable for failure in performance to the extent of that prevention, restriction or delay and the time for performance shall be extended accordingly. Unless the Contract is terminated, the performance shall commence again as soon as practical. 21.2 If performance is delayed for more than 6 months by any cause referred to in Section 21.1 above and the Parties have not agreed upon a revised basis for continuing the work at the end of the delay, then either Party may after that period and while the cause of the non-performance still exists terminate the Contract by not less than 30 days' notice in writing to the other Party, in which event the provisions of Section 23 below shall apply. 23 01910/0038 149307,15 22. DURATION OF THE CONTRACT 22.1 This Contract shall enter into effect on the Effective Date and continue in effect until the Gas Turbine EOH Clock reaches 59,999 EOH, or such other period as may be agreed in writing between the Parties. 22.2 This Contract may be extended by Customer (including any successor thereto, so long as such successor is not an entity described in clauses (i), (ii), or (iii) of Section 20.4) for one additional term of 60,000 EOH, by written notice from Customer to Contractor at least 180 days prior to the expiration of the then existing term. The Contract Price shall be adjusted by an amount reasonably agreed to by the parties to take effect on the commencement date of the extension term. That price shall be competitive with the pricing then being agreed to by Contractor for comparable scope of services, adjusted for any increases or decreases in the scope of work in this Contract compared to other contracts entered into by Contractor at the time. 23. TERMINATION 23.1 This Contract may be terminated in any of the following events: (a) By either Party, effective immediately upon delivery of written notice to the other Party, if the other Party shall become dissolved or enter into liquidation (whether voluntary or compulsory) or become subject to or submit to any law for the relief of insolvent debtors or if a receiver, administrator or similar official shall be appointed in respect of all or any substantial part of its assets; (b) By either Party under the circumstances described in Section 21.2; (c) By Contractor, if Customer shall be unable or shall fail to pay any undisputed sum due hereunder within thirty (30) days following delivery of written notice of non-payment to Customer. The termination shall be effective on the first business day following the 30 day notice period. (d) By Contractor, upon 60 days' prior written notice, if Customer sells the Plant and assigns this Contract to (i) a direct competitor of Contractor or the affiliate of a direct competitor of Contractor; (ii) an entity with which Contractor is in litigation or arbitration, or (iii) an entity without the demonstrated and acceptable assurances of payment. The definition of a direct competitor and procedure for advising Customer of such are set forth in Section 20.4. The termination shall be effective on the first business day following the 60 day notice period. (e) By Customer, by not less than 30 days' notice in writing to the Contractor in the event that Customer ceases permanently to operate the Equipment. The termination shall be effective on the first business day following the 30 day notice period. (f) The Parties expressly agree that, in recognition of the length and the term of this Contract, the Customer has the absolute and unilateral right to terminate this Contract at any time, with or without cause, upon ninety (90) days prior written notice. If, at any time, the Customer desires to terminate this Contract, with or without cause, the Customer may deliver notice to the Contractor stating that this Contract will terminate at the end of the ninetieth (90th) day following delivery of the notice. 23.2 Upon the expiry or termination of this Contract (howsoever occasioned): (a) the obligations of the Contractor to provide the Services shall cease. (b) any Spare Parts or tools belonging to the Contractor and stored by the Customer shall be returned to the Contractor unless the Parties then agree that they shall be purchased by the Customer; provided, however, that Customer shall not be liable for Contractor's Spare Parts or tools at the Site in the event of damage or destruction. In such event, Contractor shall seek reimbursement from the insurance company. 24 01910/0038 149307.15 (c) the Customer shall pay to the Contractor any outstanding balance of the Contract Price accrued up to the date of termination and the outstanding balance of any other charges payable for Services performed or goods delivered to it up to that date. (d) In the event of a termination by Customer, Customer will be liable for the cost of any preordered parts that have not yet been delivered to the Site. At Customer's election, the preordered parts will be delivered to the Plant or Customer may request that Contractor sell the parts to a third party, in which case Contractor shall use it best efforts to sell such parts to other users and credit the amount to any amounts payable by Customer. (e) In the event of a termination by Contractor, Contractor may, at its election, either deliver any preordered parts to the Plant and receive payment therefor or hold the parts for sale to another party and not charge Customer therefor. 23.3 Intentionally deleted. 23.4 The expiry or termination of this Contract (howsoever occasioned) shall not affect or prejudice any provision of this Contract which is expressly or by implication provided to come into effect or continue in effect after such expiry or termination. 23.5 In the event of the termination of this Contract by the Customer for convenience under clause (f) of Section 23.1 above, Customer shall pay to Contractor, in addition to the amounts in clauses (c) and (d) of Section 23.2, 10% of the then outstanding balance of the Contract Price. 24. LAW AND ARBITRATION 24.1 This Contract shall be governed in all respects by the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents. Each of the Parties irrevocably consents to the exclusive personal jurisdiction of the federal and state courts located in California, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to enforce any order or any judgment of such federal or state courts located in California, such personal jurisdiction shall be nonexclusive. 24.2 Customer acknowledges that Contractor is required to comply with all applicable export laws and regulations relating to the sale, exportation, transfer, assignment, use and/or disposal of the Equipment supplied and Customer's Material Serviced under this Contract, including without limitation all export license requirements. Customer agrees that the Equipment provided and Customer's Materials Serviced under this Contract shall not at any time, directly or indirectly, be sold, exported, transferred, assigned, used or otherwise disposed of in any manner which shall or may result in any non-compliance with such export laws and regulations. It is a condition to the continuing performance by Contractor of its obligations under this Contract that compliance with such export laws and regulations be maintained at all times. 24.3 Arbitration; Waiver of Trial by Jury. (a) Agreement as to Dispute Resolution. In the event of any dispute or disagreement arising out of or related to this Contract, the performance of the Parties hereunder or otherwise in connection with any aspect of the Plant, the relationship between the Parties, or any other matter in any way connected to this Contract (including the Exhibits hereto), the Parties agree to proceed strictly in accordance with the terms of this Section 24.3. Any dispute as to the interpretation or enforceability of this Section 24.3, or the arbitrability of any dispute, shall be resolved by Qualified Arbitrators, in accordance with the terms of this Section 24.3. (b) Senior Management Negotiation. In the event of any dispute as to any matter described in Section 24.3(a) above, the aggrieved Party shall, prior to filing any formal claim, proceeding in arbitration or litigation, provide written notice ("Notice of Dispute") to the other Party. Within twenty (20) days of receipt of the Notice of Dispute, senior management of each Party shall meet in person and employ best efforts to arrive at an amicable and equitable solution or settlement. Notwithstanding the foregoing, if a Party receiving a Notice of Dispute fails or refuses to participate in such negotiation, the aggrieved Party may commence arbitration in accordance with the terms set forth herein. If the dispute is not resolved within 30 days following the delivery of the Notice of Dispute, either Party may 25 01910/0038 149307.15 / a,� submit the matter to expedited binding arbitration by serving on the other Party, and submitting to the Los Angeles office of JAMS, a demand for arbitration (`Arbitration Demand'), setting forth the nature of the claims in dispute. Such arbitration shall be held before a panel of three arbitrators agreed to by the Parties, and otherwise on the terms set forth below. Except as set forth in Section 24.3(g), such arbitration shall be the sole and exclusive means for resolving any dispute as to any matter described in Section 24.3(a) above. (c) Selection of Arbitrators. Each arbitrator shall be a retired judge or attorney who is a panelist of JAMS, without a business or personal relationship with either Party (a "Qualified Arbitrator"). The Qualified Arbitrators must agree to be available as required by the terms of this Contract and to perform in accordance with the terms of this Contract. The Parties shall, within 45 days after the Effective Date, agree to the names of three Qualified Arbitrators that may be used for purposes of dispute resolution; provided, however, that failure to agree to such names shall not affect the validity of this Contract or the enforceability of the terms of this Section 24.3. If the Parties have not previously agreed to the names of three Qualified Arbitrators at the time that a dispute arises (or one or more of the three is not available at the time that a dispute arises), they shall agree to the names of three Qualified Arbitrators (or so many as are required in order to have three available Qualified Arbitrators) within 2 business days following delivery of the Arbitration Demand. If the Parties do not agree to three Qualified Arbitrators within such time period, each Party shall select a Qualified Arbitrator and shall give written notice of such appointment to the other Party within 5 business days following delivery of the Arbitration Demand. If one Party does not select a Qualified Arbitrator, the sole selected Qualified Arbitrator shall serve as the single arbitrator. If each Party selects a Qualified Arbitrator, the two Qualified Arbitrators shall select a third Qualified Arbitrator and give written notice of such appointment to each Party within the time frame required for resolution of the matter, as set forth in Section 24.3(f). If the two Qualified Arbitrators cannot agree on the selection of a third Qualified Arbitrator within five (5) business days after their selection, they shall request that JAMS select the third Qualified Arbitrator, who shall be required to agree to perform in accordance with the terms of this Section 24.3, including the time frames set forth herein. (d) Decision. The decision of two of the three Qualified Arbitrators shall be the decision of the arbitrators and shall be binding and conclusive on the Parties. (e) Payment of Arbitrators. The Qualified Arbitrators may, in their discretion, require one Party to pay all or a percentage in excess of 50%, including attorneys' fees and the cost of the arbitration (including the cost of the Arbitrators), based on the relative merits of each Party's position on the issues. If the Arbitrators do not award the cost of arbitration otherwise, the Parties shall share equally the cost of the three Qualified Arbitrators; provided, however, that if a Party selects a Qualified Arbitrator who does not reside in the Los Angeles, California area, that Party shall be solely responsible for all additional costs incurred as a result of such a selection, including, without limitation, travel (including air fare, rental car, and taxi or other travel costs), lodging, food, and fees for hours required in order to become familiar with California law) regardless of who is the prevailing Party and regardless of any allocation of cost established by the Qualified Arbitrators and regardless of the agreement set forth herein to share equally the cost of the three Qualified Arbitrators. If a Qualified Arbitrator does not reside in the Los Angeles area, the costs incurred as a result of such a selection shall be paid by the selecting Party before any costs or fees are otherwise awarded or allocated. (f) Arbitration Procedure. The arbitration shall be administered by JAMS. Except as set forth in this Contract, the arbitration shall be governed by the JAMS Streamlined Arbitration Rules and Procedures, excluding Rule 28, as such rules exist as of the Effective Date. In addition, the discovery procedures set forth in California Code of Civil Procedure Section 1283.05 shall apply to the arbitration. The arbitration hearing shall take place not more than 60 days after service of the Arbitration Demand, and shall last no more than three consecutive days. The arbitration shall take place at a neutral location in Los Angeles, California selected by the Qualified Arbitrators. Within three business days after conclusion of the arbitration hearing, each Party shall submit a closing brief, not to exceed 15 pages. The Qualified Arbitrators shall issue a written decision within five business days after receipt of the closing briefs. The decision of the Qualified Arbitrators shall be final, binding, and conclusive on the Parties, and may be enforced in the Superior Court of the State of California for the County 26 01910/0038 149307.15 of Los Angeles. The Qualified Arbitrators shall have the power and authority to grant injunctive relief as well as damages. (g) Continuation of Work and Payments. Each Party shall be required to continue to perform in accordance with the terms of this Contract during the dispute resolution process, and neither Party shall take any steps or actions to impede the performing Party from continuing its performance hereunder. Notwithstanding any provision of this Section 24.3, any Party may apply to the Superior Court of the State of California for the County of Los Angeles for any form of injunctive relief enforcing any provision of this Contract, without the need to post a bond or other security and without the need to prove injury. (h) EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS CONTRACT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY, THAT MIGHT OTHERWISE ARISE UNDER THE FEDERAL ARBITRATION ACT OR OTHER LAW, OF ANY ISSUE RELATING TO THE ARBITRABILITY OF ANY DISPUTE, OR OF THE ENFORCEMENT OR APPLICABILITY OF ANY OF THE PROVISIONS OF THIS SECTION 24.3. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES' ENTERING INTO THIS CONTRACT. 25. ENTIRE AGREEMENT This Contract constitutes the entire agreement and understanding of the Parties with respect to its subject matter. Each of the Parties acknowledges, that in entering into this Contract, it has not relied on any oral or written representation, warranty, or other assurance (except as provided for or referred to in this Contract) and waives all rights and remedies which might otherwise be available to it in respect thereof, provided always, that nothing in this Contract shall limit or exclude any liability of a Party for fraud. 26. NOTICES 26.1 Any notice or other communication which either Party is required or permitted or wishes to give or make to the other Party pursuant to this Contract shall be in writing in the English language and shall be effected by: (a) delivering in person to the authorized representative of such other Party, as identified in this Article 26, or (b) sending it by prepaid first class mail or by reputable courier specializing in overnight delivery service to such other Party; or (c) transmitting it to such other Party by facsimile or other electronic means of data transmission (including email), with telephonic confirmation of receipt, and followed up by hard copy in the U.S. mail. 26.2 Service of such notice or other communication shall be made on the Parties at their respective addresses as follows: CONTRACTOR CUSTOMER Siemens Demag Delaval Turbomachinery, Inc. City of Vernon 840 Nottingham Way City of Vernon Trenton, New Jersey 08638 4305 Santa Fe Avenue Tel, 609-890-5112 Los Angeles, California 90058 Fax: 01910/0038 149307.15 A4 F, 27 Customer Service Manager Contact: Director of Light and Power, with copies to City Attorney and City Administrator Contact Name: Vincent S. Wagner Contact Name: Donal O'Callaghan Tel: 609-890-5112 Tel: 323-583-8811 X834 Fax: 609-890-5320 Fax: 323 587 7596 Email: vincent.wa ner siemens.com Email: docallaghan@ci.vernon.ca.us 26.3 A Party may change the address, fax number to which notices are to be addressed by serving a notice on the other Party in accordance with this Article 26 26.4 Notices sent by mail or overnight courier service shall be deemed to be delivered on date of delivery (or failure to accept delivery), and notices sent by facsimile or other electronic means of data transmission shall be deemed to be delivered on the date of transmission so long as such date is a business day. Contractor acknowledges that weekends, holidays, and Fridays are not business days for the Customer. 27. WAIVERS The failure of either Party to enforce at any time any of the provisions of this Contract or to require at any time performance by the other Party of any of such provisions, shall in no way be construed to be a waiver of such provision, nor in any way to affect the validity of this Contract or any parts thereof, or the right of either Party thereafter to enforce each and every provision. 28. MODIFICATION No waiver, modification, or amendment of any of the provisions of this Contract shall be binding unless it is in writing and signed by duly authorized representatives of both Parties. 29. HEADINGS The headings used in this Contract are not to be construed as modifying, limiting or expanding in any way the scope or extent of the provisions in this Contract. 30. THIRD PARTIES There are no third party beneficiaries to this Contract. Nothing in this Contract shall be construed to create any duty to standard of care with respect to or any liability to any person who is not a Party to this Contract. 31. SURVIVAL The Sections and Articles numbered 15.2(b) and 15.2(c), 16, 17, 19, and 23,2 through 23.5, and 24 through 31 shall survive the termination, cancellation or expiration of this Contract, in addition to such other provisions of this Contract which by their nature are intended to survive the termination, cancellation or expiration of this Contract. 32. ENVIRONMENTAL COMPLIANCE Customer recognizes that the performance of Services at the Site may involve the generation of hazardous waste as such term is defined by the laws of the United States, the laws of the state in which the Site is located and the rules or regulations issued thereunder as are now in effect or hereafter amended from time to time (such generated hazardous waste being herein referred to as "Hazardous Waste"). Customer shall at its expense furnish Contractor with containers for Hazardous Waste and shall designate a waste storage facility at the Site where such containers are to be placed by Contractor. Customer shall handle, store and dispose of Hazardous Waste in accordance with applicable federal, state and local laws, rules, regulations and ordinances. Customer shall reimburse Contractor for additional costs, if any, incurred in complying with any such laws, regulations, rules and/or ordinances. 28 01910/0038 149307.15 Contractor shall have no responsibility or liability with regard to any Hazardous Waste which it does not know or have reason to know will be generated in theperformance of the Services, and Customer shall be responsible for pollution and environmental impairment arising from the Customer's property, the Equipment and the Services. 33. ASBESTOS AND THERMAL INSULATION The terms "Asbestos" and "Presumed Asbestos Containing Material" shall have the meanings set forth in United States Code of Federal Regulations Chapter 29 Section CFR 1926.1101 et seq. (1) The Customer, by allowing access to the Site, thereby warrants, represents, and certifies that any areas there associated with the Contractor's scope of work, including, without limitation, areas of ingress and egress thereto (the "Work Areas") either (a) are free of asbestos or asbestos containing materials (collectively ACM'), or (b) any ACM there present is lawfully abated and conspicuously and specifically marked as asbestos or ACM. (2) Prior to Contractor's commencement of Services at the Site: (a) The Customer shall, at Customer's expense remove all thermal insulation, sprayed -on surfacing material, and/or Presumed Asbestos Containing Material ("PACM") the disturbance of which could occur in or removal of which is required for the performance of the Services; and, (b) The Customer shall ensure that any areas where any activities involving the abatement or removal of thermal insulation or ACM shall be conspicuously identified, posted and isolated, all as required by applicable law. CUSTOMER EXPRESSLY ACKNOWLEDGES AND AGREES THAT SIEMENS IN PERFORMING THE SERVICES AND PERMITTING EMPLOYEES TO ENTER THE WORK AREAS IS RELYING UPON THE COVENANTS, AGREEMENTS, WARRANTIES, CERTIFICATIONS AND REPRESENTATIONS MADE BY CUSTOMER ABOVE. Without limiting its other rights and remedies Contractor shall not be obligated to commence or may stop any work in any Work Areas unless fully satisfied that the Purchaser is in compliance with Paragraph (1) above and this Paragraph (2), and shall be entitled to an equitable adjustment in the schedule, price and other provisions of this Contract affected thereby or otherwise affected by Customer's non-compliance. (3) In no event shall Contractor be obligated to install, disturb, handle, or remove any thermal insulation, sprayed -on surfacing material, or PACM except as specifically agreed in writing by Contractor and only after Contractor has been provided acceptable chemical analyses verifying that the same are not ACM. (4) Contractor does not represent that it is licensed to abate ACM. Where the Services include activities such as handling, modification, removal, or reinstallation of generator wedges, packing, or high temperature gaskets (such materials herein "GPW"), then, and unless Contractor is provided satisfactory written evidence that such GPW is not ACM, Contractor shall be obligated only to the extent (a) such activities do not require a permit, license, or authorization, (b) such activities are not likely to generate airborne asbestos fibers, and (c) all such GPW is non -friable. In all other cases, such activities shall be Customer's responsibility and Contractor shall be entitled to an equitable adjustment in the schedule, price and other pertinent affected provisions of this Contract should the same not be performed in a timely manner. The disposal of any GPW or scrap or waste material resulting from its disturbance or removal shall in all cases be the Customer's responsibility. (5) Customer shall defend, indemnify and hold Contractor harmless against any and all claims, demands, damages, losses, liabilities, fines, penalties, costs or expenses, including without limitation any clean up or remedial measures arising out of, connected with, or resulting from the Customer's failure to comply with the provisions of this Article 33. 29 01910/0038 149307.15 A J M, IN WITNESS WHEREOF this Contract has been executed by the duly authorized representatives of the Parties as follows, effective as of September 4, 2007, regardless of date of execution. FOR CONTRACTOR FOR CUSTOMER Company Siemens Demag Delaval City of Vernon Name: Turbomachine_ ty, Inc. aturema L ' Print N Title: Leoni S Mal bur 141s Mayor Approved by: Signature Print Name: +✓ � ...,�.... J Har s ^n _ _ _ .._ ' Title: _.1t1 f �,a?� C y ttorne Date: i J , 30 ATT �ST By: t anuela Giron, CiIt Clerk 01910/0038 149307.15 Al `Y�_-/ Transmittal Number: L&P-0200 Page 1 of 1 City of Vernon Light & Power Department 4305 Santa Fe Avenue, Vernon, CA 90068 Tel.: 323-583-8811, Ext. 661 Fax: 323-826-1425 TRANSMITTAL LETTER FROM: Light & Power Department I DATE: 10/02/07 ATTN: Vincent Wagner Siemens Demag Delaval, Inc. TO: 840 Nottingham Way Trenton, NJ 08638 cc: We Transmit For Your The Following Herewith ❑ Under Separate Cover Transmitted Via ❑ Approval ❑ Specifications ❑ Review and Comment ❑ Submittals ❑ Fax Number: ❑ Distribution as Indicated ❑ Drawings ❑ Overnight Service: ❑ Information Only ❑ Close -Out Documents ® US Mail: 863057139877 ® Use/File ❑ Computer Files ❑ Per Your Instructions ❑ Action: ❑ Documents ❑ Hand Delivered ❑ Contract Documents ❑ Other: ❑ Other: Copies Date Description 1 10/02/07 Siemens Demag Delaval Turbomachinery, Inc. and City of Vernon Service Agreement for the Malburg Generating Station MP Contact Number: 11-COV-06 COMMENTS Transmitted From: Michelle Mermis 4305 Santa Fe Avenue, Vernon, CA 90058 Tel.: 323-583-8811, Ext Fax: 323-826-1425 Copies To: File: Chron — UP Please Sign, Date and Return