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DRAFT FOR DISCUSSION PURPOSES

EPC Contract

Section III - General Conditions _________________

DEFINITIONS AND INTERPRETATION

1.1

Definitions In the Contract the following words and expressions shall have the meanings hereby assigned to them: "Acceptable Limits" means the limits set out in SC within which the Contractor may fail to achieve the Guaranteed Performances as set forth in this Contract. "Acceptance Tests" or "Tests on Completion" means the tests which have to be passed successfully in order to obtain the Taking-Over Certificate of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be. "Acceptance Test Certificate" means Test Certificate issued in respect of an Acceptance Test. "Acceptance Tests Procedure" means the procedure outlined in the Specifications. "Actual Completion Date" means the date on which all conditions required for the Taking-Over of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, have been fulfilled as notified by the Owner to the Contractor in the relevant Taking-Over Certificate. "Advance Payment" means the advance payment of a part of the Contract Price set out in SC. "Advance Payment Bond" means an advance payment bond in the form set out in Annex 3.3 to the Master Agreement and to be issued pursuant to Article 3.3 of the Master Agreement.

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"Affiliate(s)" means (i) any Person that directly, or indirectly through one or more intermediaries, controls other Person (a "Controlling Person") or (ii) any Person which is controlled by or is under common control with a Controlling Person. As used herein, the term "control" means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Approved Drawings shall mean Drawings expressly approved by the Owner, as per GC 13. Availability has the meaning assigned to such term in the SC. "Availability Guarantee" means the guarantees regarding the Availability of each of the Units as set forth in the Contract Documents. "Availability Liquidated Damages" means the liquidated damages payable by the Contractor to the Owner in case of breach of the relevant Availability Guarantee, in accordance with GC 25.16 and the SC. Cancellation Charges means the charges specified in Annex MA 4.2 which may become payable pursuant to the provisions of Article 4.2(ii) of the Master Agreement. "CDEC" means the Chilean Centro de Despacho Econmico de Carga del Sistema Interconectado Central, or its successor. Claims means with respect to any Person, any and all suits, sanctions, legal proceedings, claims, assessments, judgments, damages, penalties, fines, liabilities, demands, reasonable expenses (including reasonable attorneys fees) and losses incurred by or against such Person. "Commencement Date" means the date on which the Contractor may start with the Works, as such date is notified by the Owner to the Contractor in the Notice to Proceed. "Commissioning" means, in respect of each of the Units, all activities from Ready for Commissioning up to Taking-Over of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, including performance of the Acceptance Tests in accordance with the Contract. "Common Plant Facilities" means all those works, equipment and services forming part of the Works, except those relating to the Units, as further described in the Contract Documents. "Completion" means the achievement by the Contractor of all its obligations as required for the Taking Over of Unit 1 (including the Common Plant Facilities) or for Unit 2, as the case may be. "Complex" means the whole facilities to be constructed and put into operation under this Contract (including Unit 1, the Common Plant Facilities and Unit 2) as defined in the Contract Documents. "Consents" means, collectively, Contractor's Consents and Owner's Consents.

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"Contract" means the rights and obligations which result from the full set of Contract Documents, of which these General Conditions are part, as listed in Article 2.1 of the Master Agreement. "Contract Manager" has the meaning ascribed thereto in GC 3.1. "Contract Documents" means the documents listed as such in Article 2.1 of the Master Agreement. "Contractual Completion Date" is the date on which the Time for Completion applicable to Unit 1 (and the Common Plant Facilities) or Unit 2, as the case may be, expires as set out in SC1.1. "Contract Price" means the fixed lump-sum specified in Article 6 of the Master Agreement as relating to the Project, as may be adjusted pursuant to GC 31. "Contractor" has the meaning ascribed thereto in the Master Agreement. "Contractor's Consents" means all such approvals, consents, authorisations, notifications, concessions, acknowledgements, agreements, licenses, permits, import permits, decisions, easements, public deeds, registration in public registries, way leaves and similar items, either in the name of the Owner or the Contractor, required to be obtained or maintained under this Contract for the Works or any other obligation to be performed under the Contract from any Public Authority, or any other authority, agency, body or instrumentality including those required for the Contractor for the design and construction of the Complex or for the import, handling, transportation and storage of any Machinery and Contractor's Equipment for the purposes of the Works, except for the Owner's Consents. "Contractor's Equipment" means all appliances, things or facilities, buildings, connections, of whatsoever nature required for the purpose of the Works but does not include Machinery or other things intended to form or forming part of the Complex. Contractors Insurance means the insurances required to be taken out and maintained by Contractor pursuant to GC 30.1. "Contractor's Liens" means any liens, claims, withholding rights, security interests or any other encumbrances in connection with the carrying out of the Works held (i) by the Contractor against the Owner, or (ii) by a Sub-Contractor or a third party against the Contractor, the Owner or another Sub-Contractor, on any portion of the Complex, the Machinery or the Site. "Costs" means all expenses, costs, disbursements and losses of whatsoever nature. "Country" means the Republic of Chile. Chilean Pesos means the lawful currency of the Country. "Day" means any twenty-four (24) hour period beginning and ending at 12:00 midnight in the Country, unless specified as starting from a specific hour. "Defect" has the meaning assigned to such term in GC 25.1A.
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"Defects Liability Period" means the period specified in GC 25.2 following the Taking-Over of Unit 1 (and the Common Plant Facilities) or Unit 2, as the case may be, during which the Contractor is liable to make good any defect or damage resulting from a Defect. Delay Event has the meaning set out in GC 7.3. "Delay Limit Date" means, in respect of each Unit, the date on which the maximum amount of Liquidated Damages for Delay in Completion or the fixed date, as the case may be, as indicated in the SC has been reached for that Unit. "Dolar Observado Exchange Rate" means, for any date, the exchange rate between United States Dollars and Chilean Pesos referred to in number six of Chapter I of Title 1 of the Compendium of Foreign Exchange Regulations published by the Central Bank of Chile in the in the official gazette of the Country (Diario Oficial de la Repblica de Chile) on such date. "Drawings" means without any limitation all such drawings, specifications, samples, patterns, models, calculations, computer programs (software), operation and maintenance manuals and other documents or information of a similar nature, to be submitted by the Contractor in accordance with the Contract. "Electrical Energy" means the electrical energy measured in megawatt/hours. "Electrical Power" means the electrical power measured in megawatts. "Environmental Liabilities" means all losses, damages, fines and expenses (including, without limitation, the reasonable costs of investigation, testing, containment, removal, cleanup, abatement and reasonable attorneys' fees and costs), whether or not quantified in amount, relating to the presence in the environment of Hazardous Materials on the Site or in the Complex, or created by the Complex, the Plant, the Contractors Equipment or the Machinery or as a result of the Works, in violation of any Laws, Consent, the Environmental Permit or the World Bank Guidelines regarding protection of the environment or the physical health of persons. Environmental Permit means the Resolucin de Calificacin Ambiental issued by the competent Public Authority of the Country pursuant to the Law (and any amendment thereof) as well as any other environment permits or authorisations necessary to carry out the Works and/or operate the Complex. Environmental Tests means the tests aimed at verifying the gaseous emissions and noise as described in the Acceptance Test Procedure and in the Contract Documents. Expert means any person appointed to resolve the disputes between the Parties pursuant to GC36.2. "Explanatory Notice" has the meaning assigned to this term in GC 7.3. "Final Acceptance" means the acceptance of the Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, by the Owner at the end of the relevant Defects Liability Period in accordance with GC 25.

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"Final Acceptance Certificate" means a certificate issued by the Owner in accordance with GC 25 to approve Final Acceptance of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be. "Final Certificate of Payment" has the meaning ascribed thereto in GC 26.9 and GC 26.10. "Finance Agreements" means the agreements entered into or to be entered into between the Owner and the Lenders, and, as the case may be, the shareholders of the Owner, and other documents related thereto for the purpose of providing financing, refinancing or other financial services for the Project, including any agreements for the providing of securities to the Lenders. "Financial Close" means the date notified by the Owner to the Contractor as being that on which funds are first unconditionally available for drawdown under the Finance Agreements, subject only to service of a notice of drawing by the Owner, or, if earlier, the date upon which such funds are first drawn down under the Finance Agreements. "First Class Insurance Company" means any internationally reputable, recognized and solvent insurance company able to provide coverage to the risks specified in GC25.14 and GC30. First Class International Bank means a bank possessing (i) a current AA rating or better (whether graded plus or minus or otherwise qualified) awarded by Standard and Poors corporation or a current AA rating or better (whether graded 1, 2 or 3 or otherwise qualified) awarded by Moodys Investor Services Inc., in respect of its most recent unsecured (and unsubordinated) long term or medium term issue on any capital market or (ii) if both the said agencies should cease to publish such ratings, an equivalent rating from another rating agency of equal international standing and repute. "Force Majeure" Force Majeure Event means any event defined as such in GC 33.1, subject to the proviso therein included. "Full Site-related Works" has the meaning as indicated in SC 17. "Functional Tests" means the tests aimed at verifying the capability of each of the Units to operate under various circumstances, including transitory situations, as described in the Specifications. "General Conditions" or "GC" means these general conditions and their Annexes, so listed in the Master Agreement. General Variation has the meaning given in GC 31.2 (a General Variation) "Good Engineering and Construction Practices" means the relevant internationally recognised practices, standards, methods and acts that, in the exercise of proper judgement in light of the facts known or that reasonably should have been known at the time a decision is made, would be expected to accomplish the desired result in a manner consistent with those practices, standards, methods and acts relating to the design, construction and operation of each part of the Complex and the exercise of that degree of skill, diligence and prudence which would ordinarily be expected from a skilled and experienced and internationally recognised design, engineering and construction contractor
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engaged in the same type of undertaking under the same or similar circumstances and applying the standards generally adopted by such design engineering and construction contractors in the design engineering and construction of the Works. Those practices include, but are not limited to, ensuring that: (i) adequate materials, resources and supplies are available to meet the Complex's needs; (ii) sufficient engineering, design, construction and safety personnel are available and are adequately experienced and trained to design, construct, start-up and test and make good the Complex properly, efficiently and in compliance with applicable Laws, the Consents, the Environmental Permit, the manufacturer's guidelines and specifications; (iii) appropriate monitoring and testing is done during the design, manufacturing, erection and commissioning to ensure equipment is functioning as designed and to provide assurance that it will function properly; (iv) appropriate protective devices and design features are provided to ensure that safe, reliable, long-term operation of the Complex can be achieved; (v) any equipment is operated in a manner consistent with the applicable Laws, the Consents, the Environmental Permit, the manufacturer's guidelines and specifications and safe to workers, the general public and the environment. "Good Utility Practices" means those internationally recognised practices, methods, equipment specifications and standards of safety and performance, and the level of skill and care, as the same may change from time to time, as are commonly used by professional organisations operating or maintaining utilities of the type and size similar to the Complex, which in the exercise of reasonable judgement and the light of the facts known at the time the decision was made, are considered good, safe and prudent international practice in connection with the operation and maintenance of an electrical power plant and auxiliary facilities and use of electrical and other equipment, with commensurate standards of safety, performance, dependability, efficiency and economy. "Government" means the government of the Country (national, regional and/or local), represented by its various ministries, bureaus, agencies, departments, boards, offices and other instances. "Gross Negligence" means the failure by a Party to pay due regard to the adverse consequences of an act or omission, in violation of the most elementary rules of diligence, which a conscientious and reasonable person would foresee to ensue or the deliberate disregard of any consequences of such act or omission. "Guaranteed Performances" means, in respect of each of the Units and, if applicable, the Common Plant Facilities, the Guaranteed Values regarding (i) net electrical output, (ii) net heat rate, (iii) start-up time, (iv) limestone consumption and (v) desalinated water consumption, guaranteed by the Contractor as specified in SC 3.1 A, B, C, D and E and to be achieved in the Performance Tests as described in the Contract Documents.

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"Guaranteed Values" means the values set forth in SC 3.1 that each of the Units and, if applicable, the Common Plant Facilities, shall meet and/or achieve in accordance with the Contract Documents. "Hazardous Material" means any pollutant, contaminant, solid waste, hydrocarbon product, toxic or hazardous substance or waste, any flammable, explosive or radioactive materials regulated under, or subject to, any Laws of the Country. "Heat Rate" means a measure of efficiency of electrical production as the quantity of fuel energy in kilojoules consumed per kilowatt hour of Electrical Energy, as further defined in the Specifications. "Import Duties" means the taxes, duties, charges or surcharges assessed by the Public Authorities of the Country on the importation of goods, but excluding VAT Taxes. "Indemnified Party" has the meaning assigned to such term in GC 8.3 (i). "Independent Engineer" is the organisation or the person appointed by the Lenders to represent them on technical matters. Inspection Authority has the meaning ascribed thereto in GC17.9. "Interim Certificate of Payment" means a certificate issued by the Owner for a payment under the Contract pursuant to GC 26.3. "Lapse of Consent" means any Consent (a) ceasing to remain in full force and effect or (b) not being issued or renewed notwithstanding applicant's compliance with the applicable procedural and substantive requirements. "Latent Defect" has the meaning assigned to such term in GC 25.13. "Laws" means all constitutional provisions, laws, edicts, decrees, regulations, instructions, orders, declarations, resolutions, judgements, decisions, official interpretations, System Regulations or the application thereof, and other legal acts of the Government of the Country or any body under the control of the Government or any federal, regional, provincial or municipal authority thereof, or of any Public Authority or of any court or tribunal thereof and international treaties of the Country (the above being referred to as "Legal Acts"), including technical or other specifications with respect to the Works, the Machinery, the Complex, the Site, the Contractors Equipment or the Plant, embodied in such Legal Acts, as well as instructions to contractors embodied in such Legal Acts and any of the environmental permits issued by any Public Authority in respect of the Complex and/or the Work. "Lenders" means the multilateral agencies, banks and other financial institutions who have committed to make certain loan facilities or other credit support or financial services available pursuant to the Finance Agreements and shall include any export credit agency and any agent or trustee for any of the aforesaid persons, together with their respective successors and assigns and any persons subrogated to their rights. The Lenders may act through one or more duly authorised representatives.

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"LIBOR" means the London interbank offered rate at or about 11:00 hours (London time) on the day that is two London banking days preceding the relevant date for US Dollar deposits for a three month period which appears on the Reuters screen # LIBO, and which is calculated by Owner who will maintain a screen print-out as proof. "Liquidated Damages" means the liquidated damages as specified in SC and payable in accordance with the Contract and include the Availability Liquidated Damages, the Performance Liquidated Damages, the Liquidated Damages for Delay in Completion and such other liquidated damages (if any) as may be specified in SC. "Liquidated Damages for Delay in Completion" means liquidated damages as specified in SC in respect of a failure by the Contractor to meet all of its contractual obligations to achieve the relevant Actual Completion Date by the expiry of the relevant Time for Completion and payable in accordance with GC 7. "Local Manager" has the meaning ascribed thereto in GC 3.1. "Machinery" means machinery, apparatus, materials, articles, computer software and things of all kinds to be provided under the Contract to become permanent part of the Complex. "Major Items" means the items listed in Annex SC 14. "Mandatory Spare Parts" means the spare parts for the Complex as are listed in Annex SC 6.1 to the Contract. "Master Agreement" means the agreement between the Contractor and the Owner being the master document and listing the Contract Documents including these General Conditions forming Section 1 of the Contract. "Mechanical Completion" means in relation to Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, or to a portion thereof, the status achieved when all construction and erection work has been done and checked in conformity with the Contract Documents. "Mechanical Completion Certificate" means a certificate issued by the Owner in accordance with GC 20 confirming that Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, or a part thereof, have achieved Mechanical Completion. "Milestone" means a specified event or group of events to be achieved by a specified date in each case, as set out in SC. "Milestone Completion Certificate" means a certificate issued by the Owner confirming that a Milestone as specified in such certificate has been achieved. "Month" means a period of 28, 29, 30 or 31 Days according to the Gregorian Calendar beginning at 12:00 midnight on a Day in a Month and ending at 12:00 midnight on the Day preceding the same Day of the following Month. "Municipal Taxes" means any real estate or other property or use taxes levied on the Site pursuant to applicable Law for the sole benefit of the corresponding municipality.
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"Negligence" means the failure to pay due regard to the serious consequences of an act or omission which a conscientious and reasonable person would foresee to ensue or the disregard of any consequences of such act or omission. "Net Electrical Energy" means the Electrical Energy delivered by the Owner to the grid operated by the CDEC at the Point of Delivery of the Plant. "Net Electrical Power" means the Electrical Power available to the grid operated by the CDEC at the Point of Delivery of the Plant. "Notice to Proceed" means the notice substantially in the form set out in Annex 4.1 to the Master Agreement whereby the Owner instructs the Contractor to start with the Works. "Operation and Maintenance Manuals" means the manuals mentioned as such in the Specifications. "Owner" has the meaning ascribed thereto in the Master Agreement. "Owner's Consents" means the approvals, consents, authorisations, notifications, concessions, acknowledgements, agreements, licenses, permits, import permits, decisions, way leaves and similar items, as listed in Annex GC 10.7. Owners Engineer means the person within or outside Owners organization appointed by the Owners Representative pursuant to GC 2.1. Owners Insurance means the insurances required to be taken out and maintained by Owner pursuant to GC 30.2. "Owner's Representative" means any representative of the Owner appointed from time to time by the Owner in accordance with GC 2.1. "Parties" means Owner and Contractor. "Party" means Owner or Contractor. "Performance Bond" means a performance bond in the form set out in Annex 3.2 to the Master Agreement to cover the performance by the Contractor of all its obligations under the Contract, to be issued in accordance with Article 3.2 of the Master Agreement. "Performances Liquidated Damages" means liquidated damages as specified in SC payable in accordance with GC 23. "Performance Tests" means such tests to be made by the Contractor for Unit 1 (including, if applicable, the Common Plant Facilities) or for Unit 2, as the case may be, according to the Acceptance Tests Procedures to demonstrate that the Guaranteed Performances are achieved as provided for in the Contract Documents. "Permitted Contracts" means the contracts and purchase orders that Contractor may enter into or execute without the prior consent of the Owner pursuant to GC 4. "Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization.
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"Plant" means collectively, Unit 1 and Unit 2, all of them being part of the Complex. "Point of Delivery" means the point at which the Net Electrical Energy is delivered from the Plant, as defined in the Specifications. "Power Purchase Agreement" or "PPA" means the power purchase agreement between the Owner and the Purchaser [to be completed]. "Preparatory Site-related Works" has the meaning as indicated in SC 17. "Project" means the development, financing, insurance, design, engineering, procurement, construction, completion, ownership, operation and maintenance of the Complex in the Country, as more particularly described in the Contract Documents. "Project Procedure Manual" means the manual prepared by the Contractor and approved by the Owner and setting out the organisation and the procedures for the Project. "Project Schedule" means the schedule setting out the timetable for the performance of the Works in accordance with the description of the Milestones of SC 2, to be adopted in accordance with GC 14.1, as the same may be amended in accordance with the Contract. "Provisional Acceptance" means the acceptance of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, by the Owner, when such facilities have successfully achieved the relevant Acceptance Tests, and the conditions specified in GC 22 have been fulfilled to the satisfaction of the Owner, and the Works to be performed have been completed in accordance with the Contract to allow safe and reliable operation of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, in accordance with Good Utility Practices. "Provisional Acceptance Certificate" means the certificate issued by the Owner in accordance with GC 22 stating that Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, has reached Provisional Acceptance. "Public Authority" means the Government and any of its subdivisions, any regional or local governmental authority with jurisdiction over the Contractor, the Owner, the Complex or any part thereof or the Site, or any rights thereto, or to the waters and sub-surface affected by the Works, courts or tribunals in the Country, and any administrative department, authority, instrumentality, agency or judicial body of the Government or any such local governmental authority, including the CDEC. Punch List means the list of items to be completed by the Contractor after Taking Over of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, as determined in accordance with GC22.4. "Purchaser" means the purchaser(s) of the Electrical Energy in accordance with the PPA. "Ready for Commissioning" means the status of the Works relating to Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, or of a
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part thereof, after completion of all pre-commissioning activities including all tests and running-in operations required to confirm that all Contractor's Equipment, Machinery, components, subsystems and systems will perform correctly in a safe and reliable manner and in accordance with their intended use when commissioned, all in accordance with the Contract Documents (including the Specifications). "Ready for Commissioning Certificate" means the certificate issued by the Owner in accordance with GC 20 confirming that the Works relating to Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, or a part thereof, are Ready for Commissioning. "Recommended Spare Parts" means the spare parts for the Complex as are listed in Annex SC 6.2 to the Contract. "Recovery Schedule" means a schedule of accelerated Works prepared and followed by Contractor as per GC 14.2 in order to regain compliance with the Project Schedule. "Reliability Run" means a demonstration in accordance with the Acceptance Tests Procedure that a Unit is capable of delivering Net Electrical Energy in a continuous, safe and reliable manner. "Reliability Run Certificate" means a certificate issued by the Owner confirming that a Unit has successfully completed the Reliability Run. "Reliability Test" means Flexibility Test. "Report" has the meaning assigned to this term in GC 7.3. "Retention Money Bond" means the retention money bond to be issued in accordance with the Master Agreement and the SC substantially in the form as set out in Annex 3.4 to the Master Agreement. Third Unit Contract Price has the meaning ascribed to this term in Section 6bis 4 of the Master Agreement. Third Unit Project has the meaning ascribed to this term in Section 6bis 1 of the Master Agreement. Third Unit Specifications has the meaning ascribed to this term in Section 6bis 1 of the Master Agreement. Third Unit has the meaning ascribed to this term in Section 6bis 1 of the Master Agreement. Second Punch List means the punch list referred to in GC 25.12. "Seismic Design Basis has the meaning assigned to this term in GC 13.9. "Seismic Specialist" is the person appointed pursuant to GC 13.9. Seismic Specification means the document entitled Seismic Specification forming part of the Specifications. "Site" means the lands and other places identified in the Contract on, under, in or through which the Works are to be executed or carried out and the foregoing
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shall not comprise any land on which any part of the Works, that has been taken over in accordance with the Contract, is situated. "Spare Parts" means the Mandatory Spare Parts and/or the Recommended Spare Parts. "Special Conditions" or "SC" means the special conditions listed as Contract Document in the Master Agreement forming Section 2 of the Contract. "Specific Tests" means tests the purpose of which is to verify that the value of specified parameters or certain specified conditions are achieved as described in the Acceptance Tests Procedure. "Specifications" means the technical and other specifications, including their appendices, relating to each of the Units, the Common Plant Facilities and the Complex, listed as a Contract Document in the Master Agreement. "Sub-Contractor" means any person, firm or company - or group thereof - (other than the Contractor) to whom any part of the Contract has been sub-let by the Contractor or by another Sub-Contractor in accordance with GC 4 but not any assignee of such Sub-Contractors. "System Regulations" means any rule or regulation issued by the CDEC or a competent Public Authority in relation, in this latter case, to the functioning of the Sistema Interconectado Central. "Taking Over" means the taking-over of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, by the Owner when the Provisional Acceptance Certificate(s) has (have all) been issued and all of the conditions set forth in GC 24.1 have been fulfilled (or waived by Owner). "Taking Over Certificate" means the certificate issued by the Owner in accordance with GC 24 and stating that Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, has achieved Taking Over. "Tax" has the meaning assigned to this term in GC 8.3 (a). "Tax Claim" has the meaning assigned to this term in GC 8.3 (i). "Temporary Works" means all temporary works of every kind required in connection with the execution, completion or maintenance of the Works and the remedying of any Defects, but not to include Contractor's Equipment or facilities to house personnel, or to store and prepare Machinery before erection. Termination Value has the meaning ascribed thereto in GC34.3. "Test Certificate" means a certificate issued by the Owner confirming that the test(s) specified in such certificate has been passed successfully and has achieved the guaranteed results of such test(s) as per the Contract Documents. "Tests for Completion" means Acceptance Tests. "Time for Completion" means the period of time set forth in the SC 1.1 for completing the Works relating to, respectively, Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, and achieving Completion, which period of time starts on the Commencement Date.
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"UF" or Unidad de Fomento means an inflation-indexed, Chilean Peso-denominated adjustability unit, calculated by the Chilean Central Bank as provided in No. 9 of article 35 of Law No. 18,840 and number 3(a) of Chapter II.B.3 of the Compendium of Financial Regulations of the Central Bank. "Unit 1" means the portion of the Works capable of producing 150 MW of Electrical Energy, to be completed within the Time for Completion set out in SC1.1(a), as further set out in the Specifications. "Unit 2" means the portion of the Works capable of producing 150 MW of Electrical Energy, to be completed within the Time for Completion set out in SC1.1(b), as further set out in the Specifications. United States Dollars or Dollar or US Dollar or USD means the lawful currency of the United States of America. Unit means Unit 1 or Unit 2. Units means both Unit 1 and Unit 2. "Variation" means a Works Variation or a General Variation. Variation Order" means any document, identified as such, ordering a Variation, such document being issued to the Contractor by the Owner in accordance with GC 31. "VAT Law" means the Chilean Decree Law N 825, as it may be amended from time to time. "VAT Taxes" means the taxes payable under the VAT Law. "Working Day" means any Day, except Saturdays, Sundays and public holidays of the Country. "Works" means all work to be done under this Contract, including, without limitation, the performance of services and training, the supply of Machinery, the performance of engineering, procurement, construction, pre-commissioning and commissioning activities by the Contractor, the making good of all Defects, the performance of the obligations specified in GC 25, all as necessary for Unit 1 (including the Common Plant Facilities) and Unit 2 to be taken over by the Owner according to the Contract Documents, and shall include any work, equipment, documentation and material which is necessary to achieve any of the purposes specified in the Contract or arising from any obligation of the Contractor, including all works, equipment or material not mentioned in the Contract but which may be inferred to be necessary according to Good Engineering and Construction Practices and Good Utility Practices for stability or completion or the safe, reliable and efficient operation of a Unit and/or the Complex. Works Variation has the meaning given in Clause 31.1 (Owners power to vary). "World Bank Guidelines" means the environmental guidelines and occupational health and safety standards of the World Bank which Owner might be obliged to comply with under the Power Purchase Agreement or the Financing Documents or that are otherwise applicable to the construction of the Complex.
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1.2

Interpretation Words importing persons shall include firms and corporations and vice versa. Unless the context of this Contract otherwise requires or the relevant provision(s) expressly state otherwise: (a) (b) (c) words of any gender include each other gender; words using the singular or plural number always include the plural or singular number, respectively; the terms hereof, herein, hereby, hereto and similar words refer to this entire Agreement and not to any particular Article, Section, Appendix or any other sub-division of this Contract; references to Article, Section, Clause, Exhibit, Schedule, Appendix or Attachment are to an Article, Section, Clause, Exhibit, Schedule, Appendix and Attachment, respectively, of this Contract, unless specified otherwise herein; the words include or including shall be deemed to be followed without limitation or but not limited to whether or not they are followed by such phrases or words of like import; references to this Contract or any other agreement or document shall be construed as a reference to such agreement or document as amended, modified or supplemented and in effect from time to time and shall include a reference to any document which amends, modifies or supplements it, or is entered into, made or given pursuant to or in accordance with its terms; all periods of time shall be based on, and computed according to, the Gregorian calendar; any capitalised words, terms, phrases and abbreviations used specifically in any Exhibit or any Attachment to any Exhibit shall have the meaning set forth in such Exhibit or Attachment, as the case may be, or, in the absence of a meaning thereof, in the General Conditions; and in the event of any inconsistency between any capitalised word, term, phrase or abbreviation set forth in Section 1.1 of this Contract and any capitalised word, term, phrase or abbreviation set forth in any Exhibit or any Attachment to any Exhibit, the meaning set forth in the Contract shall take precedence over the meaning set forth in such Exhibit or Attachment, unless the context of this Contract otherwise requires.

(d)

(e)

(f)

(g) (h)

(i)

1.3.

Communications Unless otherwise specified, wherever provision is made for the giving or issue of any notice, instruction, consent, approval, certificate or determination by any
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person, such communication shall be in writing. The word "notify" shall be construed accordingly.

1.4

Joint and Several Liability in Case of Consortium If the Contractor is a joint venture or consortium of two or more persons, all such persons shall be jointly and severally liable to the Owner for the fulfilment of the terms of the Contract. Such persons shall designate one of them to act as leader with full authority to bind the joint venture or the consortium and each of its members. The composition and constitution of the joint venture or consortium shall not be altered without the prior written consent of the Owner which can be withheld at discretion. For the avoidance of doubt, the use, by the Contractor, of a registered branch office in the Country for the execution of the Works, or supply of part of the Machinery, Spare Parts, consumables or any other goods or services to be provided pursuant to the Contract, shall not be regarded as a consortium.

2.

OWNER'S REPRESENTATIVE - INSTRUCTIONS IN WRITING

2.1.

Owner's Power to Delegate The Owner shall designate the Owners Representative, to whom it may delegate any of the powers, discretions, functions and/or authorities vested in it and Owner may at any time revoke any such delegation. The Owners Representative may from time to time in writing delegate to the Owner's Engineer any of the powers, discretions, functions and/or authorities vested in him and he may at any time revoke any such delegation. The Owner or the Owners Representative shall furnish to the Contractor a copy of any such written delegation or revocation. No such delegation or revocation shall have effect until a copy thereof has been delivered to the Contractor. Any written decision, instruction or approval given, and not revoked, by the Owner's representative to the Contractor in accordance with such delegation shall bind the Contractor and the Owner as if it had been given by the Owner. Except as expressly stated in the Contract Documents, the Owners Representative or his delegate or the Owner's Engineer shall have no authority to relieve the Contractor of any of its duties, obligations or responsibilities under the Contract. Any proposal, inspection, examination, testing, consent, approval or similar act (including the omission of any such act) by the Owners Representative or his delegate or the Owner's Engineer shall not relieve the Contractor from any responsibility, including responsibility for its errors, omissions, discrepancies or Negligence. Any failure by the Owners Representative to disapprove any action, omission, document, Works or documents made by or prepared on behalf of the Contractor or its Sub-Contractors shall not prejudice to the right of the Owners Representative to exercise the Owner's rights under the Contract, including the right to reject any Works, the Plant or the Complex or the relevant document.
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2.2.

Confirmation in Writing Whenever a provision is made for the giving or issue of any notice, instruction, consent, approval, certificate or determination by any Party, such communication shall be in writing and shall not be unreasonably withheld or delayed.

3.

CONTRACTOR 'S MANAGERS AND CONTRACTOR'S PERSONNEL

3.1.

Contractor's Managers The Contractor shall provide the necessary Contract management during the execution of the Works and as long thereafter as the Owner may reasonably consider necessary for the proper fulfilment of the Contractor's obligations under the Contract. The Contractor shall appoint at the latest on the Commencement Date a competent and authorized Contract manager (the "Contract Manager") approved in writing by the Owner, which approval may at any time be withdrawn as per GC 3.3, who will be in charge of all activities and obligations of the Contractor under the Contract. The Contractor shall also appoint at the latest one (1) week prior to the date of the availability of the Site a competent and authorized local manager (the "Local Manager") approved in writing by the Owner, which approval may at any time be withdrawn as per GC 3.3, who (under the authority of the Contract Manager) is to be present during all hours worked by the Contractor for the Works in the Country (including the Site) and who shall dedicate his whole time to the management of the Works. If such approval is withdrawn by the Owner, the Contractor shall, as soon as is practicable but no later than one (1) Month (having regard to the requirements for a replacement as hereinafter mentioned) after receiving written notice of such withdrawal, remove the Contract Manager and/or Local Manager from the Works and shall not thereafter employ him again for the Works in any capacity unless approved in advance in writing by the Owner and shall replace him (on or prior to the removal of the previous Contract Manager and/or Local Manager) with another Contract Manager and/or Local Manager approved in advance in writing by the Owner. Such authorized Contract Manager and/or Local Manager shall receive, on behalf of the Contractor, directions and instructions from the Owner or, subject to the limitations of GC 2, from the Owner's Representative or the Owner's Engineer. Such directions and instructions shall not relieve the Contractor from its obligations and responsibilities under this Contract and shall be complied with by the Contractor. Contractor shall give efficient and permanent management to the Contract, using its best skills and attention, causing its representatives to perform the Works in accordance with the Contract Documents, it being understood that the Contractor shall be responsible for all construction means, methods, procedures, sequences and techniques in connection with the Works performed by it and for the coordination of all Sub-Contractors, labourers and materialmen retained by, through or under Contractor in connection with the Works.

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3.2

Contractor's Employees All personnel proposed by the Contractor for the execution of the Works shall be highly qualified and experienced for their respective tasks under the Contract. The Contractor and its Sub-Contractors shall provide and employ on the Site in connection with the execution and completion of the Works and the remedying of Defects in the Works: (a) Only such technical assistants as are skilled and experienced in their respective callings and such sub-agents, foremen and leading hands as are competent to give proper supervision to the work that they are required to supervise; and (b) Such skilled, semi-skilled and unskilled labour as is necessary for the proper and timely execution and completion of the Works and the remedying of defects of the Works. All labour and other contractual obligations of the Contractor with respect to Contractor's employees or personnel hired by the Contractor (including, but not limited to, the provision of any work permits) shall be assumed and performed by the Contractor, not existing, therefore, any labour or other contractual relationship between Contractor's employees or the personnel hired by the Contractor and the Owner. The Contractor shall indemnify and hold harmless the Owner for any costs (including reasonable attorneys fees), damages, charges, expenses and losses of whatever kind and nature incurred or suffered by the Owner as a result of actions or suits brought by any third party against the Owner in connection with the obligations and responsibilities of Contractor vis--vis its agents or employees or third parties (including in the event that applicable Law renders Owner liable for any obligations and liabilities of Contractor vis--vis its agents or employees or any third-party).

3.3

Notice of Objection The Owner shall have all freedom to object to and require in writing the Contractor to remove forthwith from the Works any person employed by the Contractor or any Sub-contractor in or about the execution, completion and remedying of defects of the Works who, in the reasonable opinion of the Owner, misconducts himself, or is incompetent or negligent in the performance of his duties, or whose employment is otherwise considered by the Owner to be undesirable and such person shall not be again employed for or in connection with the Works without the written authorisation of the Owner. Any person so removed from the Works shall be replaced as soon as possible by a competent substitute approved by the Owner.

3.4

Proficiency of Languages The Contract Manager, the Local Manager and a reasonable proportion of their technical assistants shall be capable of speaking, writing and understanding the language(s) of the Contract Documents. The Contractor shall prepare instructions for executing the Works on Site in a manner easily understandable by the foremen, skilled and semi-skilled workers. In addition, the Local Manager
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and a sufficient number of the foremen shall have a working knowledge of the Spanish language. All persons engaged by the Contractor in connection with the Commissioning, and the direction, supervision and control thereof, shall be fluent in Spanish and in English.

ASSIGNMENT AND SUB-LETTING

4.1

Assignment by the Contractor The Contractor shall not assign the Contract or any part thereof or any benefit, obligation or interest therein or thereunder without the prior written consent of the Owner.

4.2

Sub-letting The Contractor shall not sub-let the whole of the Works. Except if otherwise provided by the Contract, the Contractor shall not sub-let any part of the Works, or allow sub-letting by a Sub-Contractor, without the prior written consent of the Owner which can be withheld at discretion. Any such consent, if given, shall not relieve the Contractor from any liability or obligation under the Contract and Contractor shall be responsible for the acts, defaults and neglects of any SubContractor, its Sub-Contractors, agents, servants or workmen as fully as if they were the acts, defaults or neglects (including Negligence and Gross Negligence) of the Contractor, its agents, servants or workmen. The Contractor shall, however, not require such consent in the following situations (each, a "Permitted Contract"): for the purchase of Machinery from vendors which have been approved by the Owner, as specified in the relevant Contract Document; for the award of contracts for minor and non critical Site works and supplies (the value of which is less than five hundred thousand (500,000) United States Dollars, if not otherwise specified in the Contract Documents).

When such consent is required, the Contractor shall apply for it in due time with all details of the scope of purchase order or contract, to allow the Owner at least 25 Days to analyse the request and give or refuse its consent. The Contractor shall provide the Owner within 15 Days after its being executed or delivered by the Contractor (or Sub-Contractor), a copy of any purchase order or contract (including specifications and technical data) that requires the consent or approval of the Owner. Nothing contained herein may be construed or interpreted to infer, create or imply the existence of any contractual relationship between the Owner and any Sub-Contractor that may oblige Owner to pay or cause payment of any amounts
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owed to any Sub-Contractor or to grant any of these rights as a third party beneficiary of any Contract Document.

4.3

Assignment by the Owner (i) The Owner shall be freely entitled, without the consent of the Contractor, to assign, charge or otherwise encumber the Contract or any rights or benefits arising thereunder or therefrom in favour of any Lenders. Any such assignment, charge or encumbrance may include the right to make second or subsequent assignments, charges or encumbrances and freely to enforce the same by way of sale or otherwise. The Contractor shall provide the Owner with such assistance as the Owner may from time to time request in relation to the Owner's financing arrangements with actual or potential lenders and shall co-operate fully with the Owner to that end, including the entry into required amendments to the Contract. The Contractor shall, if and when so requested by the Owner, enter into an agreement with the Lenders or any company or body nominated by the Lenders entitling the Lenders or such company or body, at the Lenders' option, to take over the Contract from the Owner and to be treated in all respects as the Owner in the event of: (a) (b) a default by the Owner entitling the Contractor to terminate the Contract, or a default by the Owner under the Finance Agreements,

(ii)

if such default is not remedied within the applicable cure period following notice thereof and containing such other undertakings on the part of the Contractor in favour of the Lenders as the Lenders may reasonably require as a condition of their agreement to provide finance in connection with the Works, provided always that: (a) nothing contained in this GC 4.3 shall require the Contractor to enter into any agreement which places any more extensive or onerous obligations or liabilities on the Contractor than those contained in the Contract, and any such agreement shall require the Lenders to have cured the Owner's default, if any, within a period of time, after the cure period provided in the Contract, at least equal to half such cure period

(b)

and without prejudice to any interests due for the late payment as provided in the Contract. (iii) The part of the rights and benefits of the Owner under or in relation to the Contract which is assigned may be exercised by its assignees and shall inure for their benefit. All or any part of the rights and obligations of the Owner hereunder may be assigned or transferred by the Owner to an Affiliate of the Owner without the prior consent of the Contractor.
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(iv)

DRAFT FOR DISCUSSION PURPOSES

(v)

Notwithstanding the terms of this GC, the Contractor shall include in all contracts with Sub-Contractors that require the consent of Owner pursuant to GC 4.2, provisions: (i) permitting Contractor to assign such contract to Owner or to Lender, as the case may be, without consent of the respective Sub-Contractor, and (ii) obligating the respective SubContractor to perform the portion of the Works to be performed by such Sub-Contractor for the benefit of the Owner or the Lenders, as the case may be, under the terms of the Contract Documents.

5.

CONTRACT DOCUMENTS AND LANGUAGES - GOVERNING LAW

5.1.

Contract Documents Unless otherwise provided in the Contract, in the event of any ambiguity, conflict or discrepancies between any of the Contract Documents, the order of precedence is set out in Article 2.2 of the Master Agreement. In case of ambiguities, conflicts or discrepancies between any of the Contract Documents or between any provisions of a same Contract Document, the Contractor shall inform the Owner as soon as possible after discovery of such ambiguity, conflict or discrepancy, and the Owner shall explain and/or adjust such ambiguities, conflicts or discrepancies and shall therefore issue to the Contractor instructions with respect thereto and the Contractor shall not be entitled to an increase in the Contract Price or any extension of Time for Completion.

5.2

Languages (a) The ruling language of the Contract is the English language.

(b) All correspondence between the Owner and the Contractor shall be in English. (c) All markings on equipment, labels, sign-boards, instrument dials, machine and component name plates, instruction sheets and shipping marks shall be in Spanish and in English. (d) Except as otherwise agreed, all Drawings relating exclusively to the design of the Works shall be drafted and commented in English, all Drawings relating exclusively to operation and maintenance shall be drafted and commented in Spanish, and all other Drawings shall be drafted and commented both in Spanish and in English. (e) All codes, standards and regulations referred to in any part of the Works, whatever their origin, shall be made available to the Owner (at no cost) in English upon its request.

5.3

Governing Law

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The Contract shall be governed by and construed in accordance with the laws of England. The United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention) shall not apply to the Contract or the goods sold thereunder.

SCOPE OF WORKS

The Contractor, under its sole responsibility and on a turn-key basis, shall execute all the Works, perform all services, supply all Machinery and Drawings and execute any other works or services, of whatsoever nature or extent, required to deliver Unit 1 (and the Common Plant Facilities) and Unit 2 in accordance with the Contract, in order to achieve Completion of the respective Unit and Common Pant Facilities by their respective Time for Completion, and shall comply with all other obligations under the Contract. For the avoidance of doubt, the Common Plant Facilities shall be constructed by the Contractor in accordance with the Contract Documents within the Time for Completion applicable to Unit 1 and set out in SC 1.1 (a) and, hence, shall be taken over by the Owner simultaneously with and as a condition to, the Taking Over of Unit 1. In performing its services, the Contractor shall produce or cause to be produced all engineering work and related services, including but not limited to, design studies and calculations, all Drawings, including working drawings and reproducible "as built" drawings, and all specifications required to design and construct the Complex. In procuring all Machinery and materials, performing its services and executing all Works, the Contractor shall perform all acts required therefor in accordance with Good Engineering and Construction Practices, including, without limitation, the preparation of invitations to bid, the receipt of bids, the tabulation and analysis of bids, the placing of purchase orders, the inspection of materials and equipment in process, the expediting of deliveries, the compilation of schedules of purchase orders and the preparation of reports summarising the status of procurement activities. In completing the Works, the Contractor shall perform or cause to be performed all acts intended for this purpose, including, without limitation, the supervision and inspection of the Works, the receipt, unloading, handling, storing and/or warehousing of all materials, supplies and equipment to be incorporated into the Works, the preparation of detailed construction schedules, budgets, manpower estimates, progress reports and cost reports (if so required for the application of any provisions of the Contract) and the performance of all other activities required in order to efficiently and expeditiously proceed with the Works. The description of the Complex and the content of the Works are given in the Contract Documents. In addition to the services required for the construction of the Complex to be handed over to the Owner, the Contractor shall provide such services as required under the Contract for the proper training of the Owner's personnel and for the remedying of Defects to the Works.
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The Contractor shall use adequate design, engineering and construction methods and practices in accordance with Good Engineering and Construction Practices applicable at the time of the use of such methods and practices.

TIME FOR COMPLETION

7.1

Time for Completion The Contractor guarantees that each part of the Works shall be completed within the applicable Time for Completion. The Contractor shall proceed with the Works regularly and diligently in accordance with the Project Schedule and any other applicable schedule so that Unit 1 (including the Common Plant Facilities) and Unit 2 shall have achieved Completion within the applicable Time for Completion. The Contractor shall be deemed to have satisfied itself as to all the conditions and circumstances affecting the Time for Completion, including but not limited to the nature and character of the Works to be executed, the prevailing environmental and ambient conditions, the presence of other contractors or other facilities (including those required for the Owner or its Sub-Contractors) on the Site, soil and subsoil conditions, marine and air conditions, local uses, codes and conditions, the existing installations (if any), the possibility of executing the Works as required by the Contract, the general circumstances of the Works at the Site or elsewhere, and the general labour condition at the Site or elsewhere, the means of access thereto and to have determined and agreed upon the Time for Completion accordingly.

7.2

Commencement Date The Time for Completion shall start on the Commencement Date.

7.3

Extension of Time for Completion If any of the following events occur: (a) (b) (c) (d) (e) any Variation (in accordance with GC 31); or any suspension of the Works under GC 19 (Suspension of Works) except in the case addressed in 19.1 (a), (b), (d) or (e), or a breach of the Contract by the Owner; or delay by the Owner to perform its obligation as per GC 10.5; or Force Majeure as per GC 33,

(a Delay Event)

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and if the Contractor is of the opinion that a Delay Event has caused a delay in the Completion of the Works relating to Unit 1 (including the Common Plant Facilities) and/or Unit 2 within the relevant Time for Completion, the Contractor shall immediately serve notice in accordance with GC 31.2 in respect of such Delay Event, whereupon the procedure set out in GC 31 shall be followed in order to determine whether the Contractor is entitled to an extension to the relevant Time for Completion.

7.4

[intentionally left blank]

7.5

Delay in Completion - Liquidated Damages If the Contractor fails to complete the Works relating to Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, within the applicable Time for Completion, the Contractor shall be obliged to pay to the Owner (or there shall be deducted from or set off against the Contract Price) Liquidated Damages for Delay in Completion calculated for the period between the expiry of the relevant Time for Completion and the relevant Actual Completion Date in accordance with SC for each Day of delay, up to the limit as given in same SC 1.2.

7.6

Delay in Completion - Termination or Rejection If the Contractor has reached any Delay Limit Date, the Owner may, in addition to its right to receive the relevant maximum of Liquidated Damages for Delay in Completion and the other remedies set forth in this Contract, by notice to the Contractor do at its entire discretion any of the following: (a) either require the Contractor to complete the Works relating to Unit 1 (and the Common Plant Facilities) and/or Unit 2 within any period of time determined (and subsequently modified) by the Owner at its discretion. If the Contractor does not complete each part of the Works as determined by Owner at its discretion within such period of time, then Owner shall be free to exercise any of his rights under (b), (c) or (d) hereafter; or terminate the Contract as a whole or in respect of Unit 1 (including the Common Plant Facilities) and/or Unit 2 in accordance with GC 34.1 in which case the Owner may forthwith enter any part of the Site, expel the Contractor therefrom and replace the Contractor. The mechanism of termination and the payments pursuant to such termination shall be those as set out in GC 34; or reject the Works relating to Unit 1 (including the Common Plant Facilities) and/or Unit 2 and require the Contractor to repay forthwith that part of the Contract Price relating to Unit 1 (including the Common Plant Facilities) and/or Unit 2, as the case may be, paid by the Owner to the Contractor at the date of rejection and to require the Contractor to remove all Machinery, Works and Contractor's Equipment from the relevant part or all of the Site, to make good the relevant part or all of the
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(b)

(c)

DRAFT FOR DISCUSSION PURPOSES

Site and thereafter to hand the relevant part or all of the Site back to the Owner in its original state. The Owner will be entitled to claim from the Contractor all Costs incurred by it or by any other contractor as a result of such rejection (including, in case rejection leads to the loss of title of the Owner to the land containing Unit 1 (including the Common Plant Facilities) and/or Unit 2, the Cost for the acquisition of the such land to the extent not reimbursed to the Owner), plus any amounts that may be due under GC 29.1; (d) or require the Contractor to allow a reasonable reduction in the Contract Price to be agreed upon within five (5) Working Days as from the request thereof by the Owner or, failing agreement within such period of time, the Owner may either choose to refer the question of the amount of the reduction in the Contract Price to the Expert for determination under GC36, or exercise any of its rights under (a), (b) or (c) above.

CONTRACT PRICE

8.1

Fixed Price - No Adjustment The Contract Price is a fixed lump-sum price as set out in the Master Agreement and there shall be no event, reason or cause, including but not limited to an event of Force Majeure or any change in the Law of the Country, or any other applicable law, which shall entitle Contractor to an amendment, adjustment or increase of the Contract Price for whatever reason, unless due to GC 31 hereof. The Owner shall be authorised to set off the Liquidated Damages against any sums due by the Owner to the Contractor. The Owner hereby agrees to pay to the Contractor the Contract Price in accordance with SC, in consideration of the performance by the Contractor of its obligations under the Contract.

8.2

VAT Taxes - Invoicing The Contract Price is exclusive of any applicable VAT Taxes levied under the Laws of the Country and the Parties agree that an amount for VAT Taxes (if and when applicable) will be included in each invoice to be issued by the Contractor in accordance with the applicable tax Laws of the Country, to be duly evidenced by Contractor. For the avoidance of doubt, any invoice to be issued by the Contractor in accordance with the applicable laws of any country other than the Country, shall not include (by means of a gross-up or a separate entry) any amount for VAT Taxes (whether or not paid by the Contractor in connection with this Contract). The VAT Taxes are the only addition to the Contract Price allowed in the invoices to be issued by the Contractor pursuant to the terms of the Contract. Unless the Parties agree otherwise, they will prepare and approve an "Invoicing Manual" that shall set forth, among others, the basic criteria and procedures for
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the preparation, issuance and delivery of the invoices that the Contractor shall prepare, issue and deliver to the Owner pursuant to the terms of the Contract and in accordance with the VAT Law, the applicable Laws of the Country that relate to the issuance of invoices and any other applicable Laws of the Country.

8.3

Taxation, Rates, Charges and other Statutory Obligations (a) Except for the VAT Taxes as per GC 8.2 and the payment of Municipal Taxes as per GC 8.3(d) hereunder, respectively, the Contractor shall be responsible for ascertaining the extent of all taxes (including but not limited to sales taxes, use taxes, taxes on gross receipts and income, value added taxes on contracts with Sub-Contractors and suppliers), rates, dues, customs duties, Import Duties, stamp duties, tariffs, withholding taxes, fines, penalties, burdens and any other similar taxes or contributions levied, collected or imposed by any authority upon the sale, purchase or use of materials, supplies, equipment, services or labour in relation to the Contract or the Works (the "Taxes"). The Owner shall withhold from each invoice submitted by the Contractor any amount that the Owner is required to withhold and pay to the competent Public Authorities under the applicable Laws of the Country. The Contract Price shall include and shall be held to have included all Taxes (except for the (i) VAT Taxes and (ii) the Municipal Taxes). Contractor shall administer, furnish to the appropriate authorities all required information and reports in connection with, give all notices and make all filings in connection with, and pay all Taxes. To the extent the Owner is legally obligated to pay any Taxes, Contractor shall pay in advance Owner for the full amount to be paid by Owner for such Taxes. Owner shall be entitled to receive for its own account all refunds of any Taxes paid by Contractor. [intentionally left blank]. Unless otherwise set forth in this Contract, the Municipal Taxes will be paid to the competent Public Authorities or any designee thereof (e.g. authorized banks) by the Owner. However, Contractor shall be solely responsible at its cost for the timely preparation of correct documents and furnishing all the required supporting documents to be presented by the Owner to the competent Public Authorities in relation to the Municipal Taxes. In case of failure by the Contractor to provide all of these documents and supporting information to the Owner in a timely manner, that might result in costs for the Owner and/or in delay in the performance of the Works, the costs incurred by the Owner resulting therefrom or in connection therewith will be borne by the Contractor and the consequence of the delay in the performance of the Works shall be the responsibility of the Contractor (and shall not entitle the Contractor to any extension of the Time for Completion as a result thereof). (e) The Contractor shall be solely responsible, and shall bear all costs in respect therewith, for the re-export of any Contractor's Equipment in case
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(b)

(c) (d)

DRAFT FOR DISCUSSION PURPOSES

that the applicable Laws of the Country require to re-export (or to pay normal import duties or customs fees for) such items or equipment and materials. (f) The Contractor shall be solely responsible, and shall bear all costs in respect therewith, for the export of all equipment and materials for repair and refurbishment for non-compliance with Contractor's obligations outside the Country and for their re-import. It is expressly agreed that any Import Duties with respect to defective Machinery or payable for a noncompliance by Contractor of any of its obligations under the Contract will be paid by the Contractor. The Contractor shall have exclusive responsibility for the payment of all Taxes that are assessed on the basis of wages, salaries or other compensation of personnel employed by the Contractor or any SubContractor (or that are a consequence of their employment) that are imposed by any applicable Laws. Unless otherwise agreed-upon, the Parties shall prepare and approve an Importation Manual that shall set forth, among others, the basic criteria and procedures for the importation of Machinery into the Country and the basic criteria and procedures in order to reduce, to the extent allowed by the Law, the VAT Taxes and Import Duties that affect the importation of Machinery. Without prejudice to GC29, the Contractor shall defend, indemnify and hold harmless the Owner and its Affiliates, agents, officers, representatives and employees, or other persons involved directly or indirectly in the Project (including the Lenders and their advisors or representatives) (each an Indemnified Party), against all liabilities, losses, damages, costs (including reasonable attorneys fees), expenses, fines and claims whatsoever (collectively Losses), including but not limited to liabilities towards third parties, which are tax claims both (i) originating from the tax authorities of the Country in connection with this Contract and/or the Works and also (ii) arising directly or indirectly out of, in connection with, or howsoever arising as a result of, the importation of any Machinery into the Country (a Tax Claim). The Contractors indemnification obligation under this GC shall be payable upon first demand of the Owner, in the currency of the Country or United States Dollars (at the sole option of the Owner). In the latter case, any Losses in the currency of the Country shall be converted in United States Dollars at the Dolar Observado Exchange Rate as of the date the respective notice of a Tax claim was sent to the Indemnified Party. Losses indemnified under this GC shall include all interest accrued thereon from the date notice of the relevant claim is sent by the Owner or the Indemnified Party until the date such Losses are fully indemnified hereunder, at the rate indicated in GC 27.3. The Owner or the Indemnified Party shall send notice to the Contractor, in writing and with reasonable detail, of such Tax Claim. Failure of the Owner or the Indemnified Party to provide such prompt notice and
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(g)

(h)

(i)

DRAFT FOR DISCUSSION PURPOSES

documentation to Contractor shall not affect the indemnification provided hereunder. If a third party claim is made against the Owner or an Indemnified Party, the Contractor shall be entitled to consult with and advise the Owner or Indemnified Party with respect to the third party claim, it being understood that the Owner and/or the Indemnified Party alone shall conduct and control the defense of such third party claim. The Owner and/or the Indemnified Party may settle, at Owner and such Indemnified Party sole discretion, any Tax Claim. To the extent that the Owner or the Indemnified Party so requests in connection with any Tax Claim, the Contractor shall be actively involved and participate in an active manner in the defense and settlement of such Tax Claim in an economically efficient manner. In no event shall the Owner or the Indemnified Party have any liability whatsoever towards the Contractor for any actions or omissions in connection with a Tax Claim (including, without limiting the foregoing, any consenting in or contestation of such Tax Claim, the way it conducts the defense of a Tax Claim, or the instructions it gives to the Contractor). The Owner and/or the Indemnified Party may, at any time prior to the final resolution or settlement of the respective Tax Claim and at their sole discretion, (i) deposit funds or post any bond or guarantee in favour of the Public Authorities to continue with the defense of the respective Tax Claim, or (ii) if an order of attachment or other legal action or measure is threatened or executed against the Owner or the Indemnified Party or any of their assets that may affect the normal operations of the Owner, its Affiliates or the Indemnified Party, they may make such deposit or post such bond or guarantee without the Contractors consent. The Contractor shall, at the Owners sole discretion, either reimburse the Owner or the Indemnified Party its cost therefor (including out of pocket expenses) or advance such funds or post such guarantee or bond.

8.4

Sufficiency of Contract Price The Contractor shall be deemed to have satisfied itself as to all the conditions and circumstances affecting the Contract Price, including but not limited to the nature and character of the Works to be executed, the prevailing environmental, seismic and ambient conditions, the presence of other contractors or other facilities (including those required for the Owner or its Sub-Contractors) on the Site, soil and subsoil conditions, marine, hydro-oceanographic and sub-aquatic conditions, local uses, codes and conditions, the existing installations (if any), the possibility of executing the Works as required by the Contract, the general circumstances of the Works at the Site or elsewhere, and the general labour condition at the Site or elsewhere, the means of access thereto and to have determined the Contract Price accordingly. The Contractor shall be responsible for all errors made and for any misunderstanding or incorrect information provided to or relied upon by it. Any information or lack of information from the Owner shall not relieve the Contractor from its responsibility for executing the Works in accordance with the Contract, including details and apparatus which
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may not have been specifically mentioned in the Contract but are necessary for ensuring the safe and efficient execution of the Works and the safe and reliable operation and maintenance of the Complex.

8.5

Revenues of the Complex The Contractor acknowledges that all revenues of any kind, if any, arising out of the Complex or any part thereof shall be the property of the Owner and, if received by the Contractor (or any of the Sub-Contractors), shall be turned over to the Owner within thirty (30) Days of receipt thereof.

8.6

Payment Terms The Contract Price shall be paid as per the terms specified in SC. The Advance Payment shall be paid within Commencement Date provided that the Advance amount and the Performance Bond have been accordance with the Contract, at Contractor's cost, Bank previously approved by the Owner. fifteen (15) Days of the Payment Bond of the same delivered to the Owner, in by a First Class International

The other terms regarding payment will be as per GC 26 and 27.

8.7

Payments to Sub-Contractors The Contractor shall pay each Sub-Contractor, save for disputes between the Contractor and any Sub-Contractor, upon receipt of any payment received hereunder covering work performed by a Sub-Contractor, the amount to which said Sub-Contractor is entitled (including any Taxes and withholdings due under the applicable Laws of the Country). The Contractor shall provide in its agreement with each Sub-Contractor that such Sub-Contractor is required to make payment to its Sub-Contractors in a similar manner. None of the Contract Documents are intended to create any liability, in contract, tort, warranty, strict liability, or any other legal theory, from the Owner in respect of the Sub-Contractors or Sub-Contractors' personnel. For the avoidance of doubt, there shall no obligation of the Owner to pay or cause payment of amounts to any Sub-Contractor, nor shall any Sub-Contractor be granted any rights as a third party beneficiary of the Owner. The Contractor shall indemnify and hold harmless the Owner from any actions or suits that may be brought by any third party against the Owner in connection with the obligations and responsibilities of Sub-Contractors vis--vis their agents or employees or any third party (including when applicable Law renders Owner liable for any obligations and liabilities of a Sub-Contractor vis--vis its agents or employees or any third-party).

CONTRACTOR'S OBLIGATIONS
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9.1

General Obligations Without limiting the general obligation and responsibility of the Contractor to perform on a turnkey basis the Works in accordance with the Contract and GC 6 with due care and diligence so as to achieve Completion of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, within the relevant Time for Completion, the Works as completed by the Contractor shall be wholly in accordance with the Contract and fit for the purposes for which they are intended, as described in the Contract, and fit to operate the Complex and each part thereof according to applicable Laws, World Bank Guidelines and Good Utility Practices, and to prevent the creation of any Environmental Liability. Any description of services, supply or work that is given in the Contract Documents is given for the purpose of organisation, shall be understood as a minimum, and shall not be construed as a limitation of the Contractor's obligations. The Contractor shall be fully and unrestrictedly responsible for the complete design, manufacture, fabrication, testing, shipping, transport to port of disembarkation, transport to Site, storage, erection, construction (including connection of the Complex to the [_______] substation), completion, checking, commissioning, testing, co-ordination, handing over of the Complex and for performing the obligations specified in GC 25, including but not limited to the remedying of Defects in or malfunctioning of Unit 1, the Common Plant Facilities and Unit 2. The Contractor shall also be responsible for the observance of all necessary safety measures at the Site as well as observance of all applicable laws and regulations (including the Laws) by it and the Sub-Contractors. The Contractor shall have the custody of the Site. The Contractor shall provide all labour, including the supervision thereof, materials and Contractor's Equipment, and all other things whether of a temporary or permanent nature, necessary to perform the Works. The Contractor shall take full responsibility for the adequacy, stability and safety of all site operations and co-ordination and methods of construction. According to the terms of the Contract, the Contractor shall assume the whole risk of the design and construction of the Complex and of all works associated therewith. The Contractor shall perform the Works and comply with the Contract and its obligations thereunder as an independent contractor, and none of the Contractor, the Sub-Contractors, or any of their representatives, employees or agents, shall be deemed for any purpose whatsoever a representative, agent or employee of the Owner. The Contractor shall not incur any obligation or liability of any nature for or on behalf of the Owner or create any Contractor's Lien. It shall prevent the creation of any Contractor's Lien by a Sub-Contractor, and insert in its contracts with the Sub-Contractors the necessary provision to this effect. Without prejudice to said obligation, if a Contractor's Lien is nevertheless created, then the Contractor shall take all measures that are necessary to immediately have such Contractor's Lien released.

9.2

Compliance with Laws


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The Contractor shall conform in all respects with the applicable Laws and in relation to the manufacture of the Machinery, to the laws of the country of the manufacturer. The Contractor's Equipment, Machinery, consumables and the Complex (when built), shall comply with all applicable Laws, System Regulations, Environmental Permit, Consents and World Bank Guidelines. Each site where Contractor's Equipment, Machinery and consumables are stored or any site where Works are performed shall comply with applicable Laws. The Contractor shall procure that the Sub-Contractors shall strictly observe the Laws and all relevant procedures, requirements and regulations applicable to the Works. The Contractor shall be responsible for, and shall keep the Owner indemnified against all penalties, costs and liabilities of any kind for any breach of any Laws (and in relation to the manufacture of the Machinery, of the laws of the country of the manufacturer).

9.3

Registration The Contractor shall, and shall procure evidence that its Sub-Contractors shall, obtain and maintain appropriate registrations or authorisations, and pay all required fees and make all necessary filings, to do business in the Country sufficient to enable the Contractor and the Sub-Contractors respectively to lawfully carry out the Works. For the avoidance of doubt nothing herein contained shall render the Owner responsible or liable for the failure by the Contractor or the Sub-Contractors to obtain or maintain such registration as well as for the Costs of such registrations and the Contractor hereby agrees to indemnify and hold harmless the Owner from any and all Costs, expenses or other liabilities arising from or related to the failure to obtain or maintain such registration or arising from or related to the obtaining and maintaining of such registrations and from any liability to taxation which may be attributed to the Contractor or the SubContractors by the Government. This obligation shall survive the termination of this Contract for a period of five (5) years after the Final Acceptance Date.

9.4

[intentionally left blank]

9.5

Obtainment of Contractor's Consents Except for the Owner's Consents expressly listed in Annex GC10.7, the Contractor shall, and shall cause the Sub-Contractors to, obtain and pay for (and maintain in effect and renew when necessary) in a timely fashion all Contractors Consents, and shall diligently pursue all services required for the obtainment of all Contractor's Consents, even in the name of the Owner (if so required by the Owner or by applicable Laws), and shall give all notices and pay all fees required in relation to the execution of the Works and the remedying of any Defects by the Laws or any Public Authority and shall keep the Owner indemnified against all penalties and liabilities of any kind for breach of any such Laws or Consents. The information supplied in the applications for Contractor's Consents shall be
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complete and accurate and shall satisfy the substantive and procedural requirements of the Laws. The Contractor shall allow all inspections required for or under the Consents or the Laws. For the avoidance of doubt, it is expressly agreed that any fines or other penalties incurred by the Contractor, its agents, employees or the SubContractors for non-compliance with applicable Laws or Consents or other governmental actions taken pursuant thereto, or with the laws of the country in which any equipment and materials are manufactured or the Consents shall be the sole responsibility of the Contractor. The preparation, follow-up and signature of all Contractor's Consents required by the Laws shall be the responsibility of the Contractor.

9.6

Import Permits and Licences The Contractor shall have sole responsibility for the importation (including the obtaining of all permits and/or licenses relating thereto) (i) of all Machinery (and consumables that would be imported by the Owner), and (ii) of consumables and Contractor's Equipment, through the customs of the Country or other applicable customs regimes (including the payment of all brokerage, supervision, inspection, expediting and other charges). In co-operation with the Owner, the Contractor shall (unless specifically instructed otherwise by the Owner) use all reasonable efforts to minimise the amount of VAT Taxes payable with respect to such importation through taking advantage of all applicable exemptions, reductions, payment in instalments or similar benefits. The Contractor shall be responsible for the completion of all necessary documentation for such importation, in a manner calculated to minimise all VAT Taxes. During the course of the Works, the Contractor shall provide to the Owner (for the Months for which this applies) on a monthly basis, the Contractor's estimate of the VAT Taxes payable with respect to the Machinery to be imported into the Country in the following Month and the projected data for delivery thereof. Owner shall have no responsibility with respect to the importation of the abovementioned consumables or Contractor's Equipment. The Owner's sole responsibility with respect to the importation of any Machinery shall be to promptly (but not earlier than reasonably practicable) execute accurate and complete customs documentation prepared by the Contractor or its agents and required for the importation of such Machinery. To the extent included in the preceding Month's estimate provided by the Contractor, the Owner shall pay the VAT Taxes related to the importation of Machinery, so long as the Owner receives at least five (5) Days advance notice from the Contractor before the date on which the Machinery is due to arrive at the port of entry into the Country. With respect to any VAT Taxes which become payable in any Month but were not included in any prior estimate provided by the Contractor, the Owner shall pay such taxes no later than the fifteenth (15th) Day of the Month following the Month in which such taxes became payable. The Owner undertakes
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to provide reasonable assistance to the Contractor in respect of its obligations under this GC 9.6, if so requested by the Contractor. Such assistance will be under the responsibility, and at the Cost, of the Contractor, and shall not exempt the Contractor from its obligations or liability under this GC. The Contractor shall be exclusively responsible for the information and the supporting documentation (e.g., invoices, bills of lading, etc.) of all customs documentation to be prepared by it for execution by the Owner pursuant to this GC.

9.7

No Liability for Review, Comments or Approval by or on behalf of the Owner The Contractor acknowledges that it must rely entirely on its own skill and judgement in the performance of its duties and obligations under this Contract. Accordingly: (i) the duties, obligations and liabilities of the Contractor shall not be released, diminished or in any other way affected by any instruction, direction, omission, consent, approval, confirmation, comment, sanction, acknowledgement or advice, or the omission of the same, made or given or waived to be made or given, by or on behalf of the Owner or by an independent entity into any relevant matter which may be made or carried out by or on behalf of the Owner nor by any act or omission of any person carrying out such inquiry, whether or not such act or omission might give rise to an independent liability of such person to the Owner, and the Contractor shall not be entitled to make any claim against the Owner or to seek any relief or remedy of any nature by reason of any such action or absence of action by or on behalf of the Owner.

(ii)

9.8

Setting Out The Contractor shall be responsible for the accurate setting out of the Works in relation to original points, lines and levels of reference given by the Owner in writing and to be first ascertained by the Contractor and for the correctness of the positions, levels, dimensions and alignment of all parts of the Works and for the provision of all necessary instruments, appliances and labour in connection therewith. If, at any time during the progress of the Works, any error shall appear or arise in the positions, levels, dimensions or alignment of any part of the Works, the Contractor shall at its own cost, rectify such error to the satisfaction of the Owner. The checking of any setting out or of any line or level by the Owner shall not in any way relieve the Contractor of its responsibility for the accuracy thereof. The Contractor shall give a minimum of three (3) Days notice to the Owner before setting out.

9.9

Sources of the Contractor's Obligation to Design and Construct


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The Contractor shall design, engineer, construct, install and perform each part of the Works in strict compliance with the requirements of (i) the Contract Documents; (ii) the Good Engineering and Construction Practices; (iii) the Good Utility Practices; (iv) the Laws, (v) if not inconsistent with the Laws of the Country, the Consents and the World Bank Guidelines and (vi) such requirements as the Owner may reasonably deem necessary. The order of precedence is determined in the descending order from (i) to (vi). Compliance by the Contractor with the sources mentioned here above shall not relieve the Contractor from the obligation to comply with any and all applicable laws and regulations. The Contractor shall check that all information provided by the Owner is consistent with the other requirements of the documents listed in the first paragraph and in case of doubt or discrepancy between the sources mentioned above, the Contractor shall refer the matter to the Owner. The Owner shall explain and/or adjust such ambiguities or discrepancies and shall issue to the Contractor instructions in respect thereof. Compliance with the sources mentioned here above will not release the Contractor of its responsibilities under the Contract, including in case of defect or malfunctioning of any part of the Complex.

9.10

Records The Contractor shall, and shall procure that the Sub-Contractors shall, maintain complete accounting records of all Costs of executing the Works in accordance with the generally accepted accounting principles to be used in the Country as per applicable Law for a period of six (6) years from whichever is the first to occur of (i) the issuance of the Final Certificate of Payment pertaining to the Works, or (ii) termination of the Contract. The Contractor shall check all materials, equipment and labour entering into the Works and shall keep such full and detailed accounts as may be necessary for proper financial management under this Contract. The Owner and/or Owner's representatives shall be afforded full access to all Contractor's records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda and similar data relating to the Contract Documents at all reasonable times if so required for the application of any provisions of the Contract. The Contractor shall preserve all such records for a period of six (6) years from the earlier to occur of (i) the issuance of the Final Certificate of Payment pertaining to the Works or (ii) termination of the Contract.

9.11

Wastes, Hazardous Materials and Environmental Liabilities The Contractor shall keep the Site and the Works free from accumulation of wastes, rubbish and Hazardous Materials caused by or used in the construction of the Complex and other operations and acts or omissions by the Contractor and shall, in compliance with applicable laws (including the Laws of the Country), the World Bank Guidelines, the Environmental Permit, the Consents and the Contract, clean up the Site (and additional areas referred to in GC 9.14) and
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dispose of any such materials, to the satisfaction of the Owner, on a regular basis and as soon as possible after the Owner's reasonable request to do so or after termination of the Contract or after issuance of the Taking Over Certificate. The Contractor shall, immediately upon occurring, report to the Owner any violation of the foregoing, and shall at its own cost cure such violation. The Contractor shall handle and clean-up all Hazardous Materials present in the soil and subsoil, but the disposal thereof shall be borne by the Owner. Subject to the conditions stated herein, the Contractor shall handle, clean-up and dispose of all waste and/or Hazardous Materials that were present on the Site before the Commencement Date as if such wastes and/or Hazardous Materials are found by the Contractor or a Sub-Contractor. If such wastes or Hazardous Materials are found by the Contractor or any Sub-Contractor, the Contractor shall immediately notify the Owner. The Contractor shall act in accordance with the instructions of the Owner, and shall abstain from any action that may increase the actual or potential Environmental Liabilities in connection with such wastes or Hazardous Materials. The Contractor shall at all times act so as not to create any Environmental Liabilities, whether before or after termination of the Contract, and shall indemnify and hold the Owner harmless from any such liabilities. Notwithstanding any other provision of the Contract, the Contractor shall indemnify the Owner in respect of any consequences, costs, fines, claims, expenses and losses of or resulting from of its breach of its obligation hereunder during a period of ten (10) years after termination of the Contract or after issuance of the last Taking Over Certificate, whichever comes first.

9.12

Spare Parts Availability The Contractor guarantees the availability of spare parts for all the Machinery according to the provisions of SC 6. This obligation shall survive the termination of the Contract.

9.13

Representation The Contractor hereby represents and warrants that the design, engineering, construction, installation, performance under this Contract as well as the operation and maintenance prescribed by the Contractor in the operation and maintenance manuals of the Works shall guarantee the construction of a Plant capable of providing the envisaged capacity and producing the envisaged Electrical Energy in accordance with Good Utility Practices for a period of thirty (30) years.

9.14

Contractor's Operations on Site The Contractor shall confine its operations to the Site, and to any additional areas which may be used as working areas with the prior consent of the Owner and subject to no objection from any Public Authority or any other third party. The
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Contractor shall keep its personnel and equipment within the Site and such additional areas.

9.15

Fossils All fossils, coins, articles of historical, cultural or other value, and remains or things of geological or archaeological interest discovered on the Site shall not become the property of the Contractor or any Sub-Contractor, and shall become the property of the Owner if (and only if) the applicable Laws of the Country so permit. The Contractor shall take precautions to prevent its personnel or the SubContractors or other persons from removing or damaging any such item. Immediately upon discovery of such item, the Contractor shall immediately stop any Works that may affect such item and inform the Owners Representative, who shall issue instructions in relation thereto.

9.16

Acknowledgment The Contractor acknowledges that it has satisfied itself as to the nature and location of the Works, the general and local conditions, including but not restricted to those relating to transportation, disposal, handling and storage of materials, availability of labour, water, electric power, roads and uncertainties of weather, river stages, tides or similar physical conditions at the Site, the conformation and conditions of the ground, the character of equipment and facilities needed preliminary to and during the performance of the Works. The Contractor further acknowledges that it has satisfied itself as to the character, quality and quantity of surface and subsurface materials or obstacles to be encountered insofar as this information is reasonably ascertainable from an inspection of the Site, including all exploratory work done by the Owner, as well as information presented by the Drawings and Specifications made a part of this Contract. Any failure by the Contractor to so satisfy itself and acquaint itself with available information and to make any further investigations will not relieve it from its responsibility for properly estimating the difficulty or costs of successfully performing the Works.

9.17

Upgrades and Improvements During the term of the Contract, the Contractor shall inform the Owner of any possible improvement, for performances, reliability or availability, that may be made to the Complex as a result of advance in technology or otherwise, as soon as such possible improvement is known to him. The Contractor shall inform the Owner of all modifications that have been implemented or are under consideration in any other Complex with similar technology and will show the advantages to the Owner by transmitting to him a written analysis report.
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At the request of the Owner, the Contractor shall submit a report regarding the possible improvements and their feasibility, considering the actual progress of the Works. The Owner may request the Contractor to apply the Variation procedure as per GC 31.

10

OWNER'S OBLIGATIONS

10.1

Access to and Possession of the Site Non-exclusive access to and possession of the Site shall be afforded to the Contractor by the Owner in reasonable time according to the Project Schedule and for the sole purpose of performing the Works. The Owner shall delimit the Site, but shall not be responsible for the fencing thereof. Following Taking Over of Unit 1 and the Common Plant Facilities, the parts of the Site on which such Unit and the Common Plant Facilities are situated shall be excluded from the Site and in the event the Contractor requires access across such parts it shall seek the Owners prior consent thereto and shall comply with the Owners requirements in relation to the granting of such access. For the avoidance of doubt, the granting of possession of the Site shall not be treated as creating any legal or other interest in favour of the Contractor.

10.2

Authority for Access During the execution of the Works no persons other than the Contractor, SubContractors, and its and their employees or any of the other persons named in GC 17.11 shall be allowed on the Site except with the prior written authorisation of the Owner but facilities to inspect the Works at all times shall be afforded to the Owner and its representatives and other authorities or officials and to the Lenders and their representatives (including the Independent Engineer) for the purpose of exercising their rights under the Financing Agreements. The Contractor shall be responsible for keeping unauthorised persons off the Site.

10.3

Access not Exclusive The access to and possession of the Site referred to in GC 10.1 hereof shall not be exclusive to the Contractor but only such as shall enable it to execute the Works.

10.4

Personnel for Commissioning The Owner shall put personnel at the disposal of the Contractor for training in accordance with Specifications. When a Unit or the Common Plant Facilities, or a portion thereof, is Ready for Commissioning, the Owner will provide the normal operating and maintenance personnel that will operate the facility concerned
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under the technical direction and supervision of the Contractor. Except in case of Gross Negligence or malicious act by the personnel put at disposal by the Owner, the Contractor remains responsible for care and custody and in other respect of the Complex (or part thereof) being commissioned. The additional personnel that may be required during this period shall be provided by the Contractor.

10.5

Supply of Fuel and Take Off of Energy The fuel and electricity required for the Commissioning shall be provided by the Party identified in the Utility Matrix at Annex GC10.5. The Owner shall obtain the necessary authorisations and consents to connect the Plant to the CDECs electrical grid for the purposes of Commissioning.

10.6

Owner's Responsibility Without prejudice to GC 9.7, the Owner shall have no liability to the Contractor, the Sub-Contractors, their respective agents and employees, whether by way of indemnity or by reason of any breach of the Contract or warranty or of statutory duty or by reason of tort or the committing of any actionable wrong (including but not limited to Negligence and Gross Negligence) or undertaking of any account or otherwise for any indirect or consequential or special or incidental damage whatsoever that may be suffered by the Contractor, the Sub-Contractors, their respective agents and employees (including without limitation loss of profit, investment revenue, return, use, operating time, contract, production, opportunity or goodwill, cost of capital, claims of customers or third parties). In all cases where the Contractor is claiming a breach of Contract or a right to be indemnified in accordance with the Contract, it shall be obliged to take all reasonable measures to mitigate the loss or damage which has occurred or may occur. The Owner's liability under the Contract shall not exceed the Contract Price.

10.7

Owner's Consents The Owner shall obtain and keep in full force and effect only those Consents listed in Annex GC 10.7, in accordance with the time schedule set forth therein. The Contractor shall provide all reasonable support (including documentation, if any is requested) requested by the Owner in the obtaining of such Owner's Consents.

10.8

Assistance concerning Laws The Owner shall give the Contractor such assistance as the Contractor shall reasonably require to enable the Contractor to comply with any Laws or Consents which may affect the Contractor in the performance of its obligations
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under this Contract at the Contractor's expense and under the Contractor's sole responsibility.

11

CONTRACT DATA

11.1

Site Data Without prejudice to Contractors acknowledgment contained in GC 7.1 and 9.16, the Contractor confirms that it has entered into the Contract having examined or at least having had the opportunity and time to examine the Site and the accesses to the Site and their suitability for the undertaking of the Works (including among others the climatic, hydrological, seismic, soil, marine, hydrooceanographic, submarine relief, sub-aquatic and general conditions of the Site). The Contractor is solely responsible for all conditions at the Site (whether or not foreseeable at the time of inspection) and for the suitability of the Site for the performance of the Works. The Owner shall bear no responsibility for (and the Contractor shall not be entitled to any extension of time or addition to the Contract Price or any Variation in respect of) the actual conditions prevailing at the Site or the suitability of the Site for the performance of the Works nor for any error, inaccuracy or omission of any kind in any data provided to the Contractor by the Owner. The Contractor shall be solely responsible for checking and verifying the accuracy and correctness and completeness of all information supplied by the Owner and it is deemed to have checked such information. The Contractor shall be deemed to have satisfied itself as to the suitability and availability of the access routes to the Site. The Contractor shall (as between the Parties) be responsible for the selection and maintenance of access routes to the Site that it chooses to use. The Contractor shall provide any signs or directions which are necessary for the guidance of its personnel and of the SubContractors. The Contractor shall be responsible for obtaining any permission or Consent that may be required from any Public Authority for the use of such routes, signs and directions. In particular the Contractor has checked that the information on soil and subsoil, marine, hydro-oceanographic, submarine relief and sub-aquatic conditions represents the actual situation on Site, that they are complete and valid for design and construction of the Plant and it undertakes not to claim for any price variation or any other change in the Contract as a result of further investigations.

11.2

Proprietary Data of Owner or others If any proprietary data of the Owner or of another party, whether given by the Owner or obtained from third parties (including for the avoidance of doubt, the drawings for any existing installations, listed in Specifications) proves to be substantially incorrect or incomplete, the Contractor shall forthwith inform the Owner and may request the Owner to rectify or have rectified said proprietary data. The Owner shall bear no responsibility for (and the Contractor shall not be
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entitled to any extension of time or addition to the Contract Price in respect of) such inaccuracies.

12

GUARANTEED PERFORMANCES

The Contractor guarantees that each of the Units and, if applicable, the Common Plant Facilities will achieve the relevant Guaranteed Performances set out in the Contract Documents and SC 3 in accordance with the Contract. If the Contractor fails to achieve the relevant Guaranteed Performances by the relevant Delay Limit Date and the relevant Acceptable Limits are achieved, then the Contractor shall be obliged to the pay the relevant Performance Liquidated Damages in accordance with the Contract. If the relevant Acceptable Limits are not achieved by the relevant Delay Limit Date, the Owner may apply such other remedies in accordance with the Contract.

13

DOCUMENTATION BY THE CONTRACTOR

13.1

Submission of Drawings The Specifications lists which Drawings are to be submitted to the Owner by the Contractor. To the extent required by the applicable Laws of the Country, the Contractor shall obtain for the Drawings professional engineering certifications from the competent professional board of the Country. The Contractor shall submit such Drawings to the Owner for approval or information (as the case may be) within the time required by the Contractor in order to meet the requirements of the Project Schedule. Without prejudice to GC 9.7, the Owner shall use its reasonable efforts to approve or disapprove any Drawings submitted for approval within the period specified in the Project Procedure Manual.

13.2

Consequences of Disapproval of Drawings Any Drawings which the Owner disapproves shall be modified and re-submitted without delay at the Contractor's cost. The Contractor shall not implement any part of the Works for which the design or other specification has been disapproved as aforesaid or requires to be approved pursuant to the provisions of this GC 13 until such approval has been given or refused in accordance herewith (which approval or disapproval shall be without prejudice to GC 9.7). The Contractor shall give due consideration to the comments of the Owner.

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Any disapproval, comment or lack of comment made by the Owner on the Drawings shall not operate to absolve the Contractor from the due performance of its obligations under the Contract, nor operate as a Variation.

13.3

Reviewed Drawings Drawings reviewed without comments by the Owner shall not be deviated from. The approval of or failure to approve Drawings by the Owner shall not operate to absolve the Contractor from the due performance of its obligations under the Contract, nor operate to vary those obligations in any manner.

13.4

Inspection of Drawings - Documents and Drawings on Site The Owner shall have the right at all reasonable times to inspect all Drawings or other documents of any part of the Works and to request submissions. The Contractor shall keep on Site one complete set of the documents forming the Contract, the Contract Documents, the Drawings, all Variation Orders, other communications between the Owners Representative and the Contractor, and all documents required by Law.

13.5

Technical File All Drawings submitted to the Owner either for approval or for information will be transmitted in their as built status and so marked, in one package called "Technical File", according to the requirements of the Specifications and at the latest three (3) months after the Provisional Acceptance. The Technical File will be submitted in six (6) copies.

13.6

Owner's Use of Drawings Supplied by Contractor The copyright of Drawings, including all technical documents related to standard or proprietary Machinery, shall remain vested in the Contractor. The Owner hereby receives a perpetual licence, free of cost, to use these documents for the repair, restoration, operation and maintenance of any part of the Complex. The Owner may at any time assign such licence to any person (including without limitation the Lenders or any person designated by the Lenders) to whom the Complex would be assigned in whole or in part.

13.7

Mistakes in Information The Contractor shall be responsible for any Cost incurred in correcting any discrepancies, errors or omissions in the Drawings prepared by it or on its behalf, whether they have been approved by the Owner or not, and in correcting any work carried out by Contractor or the Owner or the Sub-Contractors, in reliance upon such Drawings or due to a delay in submission of such drawings or documents by the Contractor.
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The Contractor shall be, in addition, responsible for any damages, liquidated or other, incurred by the Owner due to a delay, error or omission in the supply of Drawings.

13.8

Operating and Maintenance Instructions and Drawings The Contractor shall deliver to the Owner as soon as possible and no later than the date which is six (6) months before expiry of the relevant Time for Completion or the relevant date for Mechanical Completion, whichever is earlier, a draft of the Operation and Maintenance Manuals and Drawings of the relevant Unit, and if applicable, the Common Plant Facilities. There shall be a sufficient number of Drawings and the Drawings and the draft Operation and Maintenance Manuals shall be in sufficient detail to enable the Contractor to train the Owner's personnel to operate, maintain, dismantle, reassemble and adjust all relevant parts of the Works and to enable the Owner to operate, actively identify and solve problems within the relevant part of the Complex with its own resources, and purchase the spare parts and consumables required for commercial operation of the relevant part of the Complex immediately after Taking Over of it. The Contractor shall revise the draft Operation and Maintenance Manuals to incorporate the comments made by the Owner. The operation instruction sheets and logs shall include and shall be in accordance with the Specifications, and the Operation and Maintenance Manuals shall be in Spanish and in English. Before the starting of the Commissioning of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, the Contractor must provide and complete the technical training of the Owners personnel who will be entrusted with the normal operation and maintenance of the relevant part of the Complex and must, in particular, instruct them about all orders and procedures of operation and maintenance necessary for the correct operation and maintenance of the relevant part of the Complex in accordance with Good Utility Practices. The Contractor shall during the Defects Liability Period revise and/or update and/or re-issue the Operation and Maintenance Manuals at the latest 4 Months after issuance of the Provisional Acceptance Certificate and as a condition for Final Acceptance. Any cost that may be incurred by the Owner at any time due to a delay in supply of the Operation and Maintenance Manuals or to an error or omission in the manuals shall be borne by or charged to the Contractor. All Drawings incorporated in the Operation and Maintenance Manuals as well as all key drawings, i.e. general arrangement drawings, system diagrams, flow diagrams, single line diagrams, control diagrams, if applicable, and all others considered by the Owner to be necessary, shall in addition to the original dimension of the Drawings be supplied in a reduced size for easy handling.

13.9

Approval of Seismic Specifications by a Seismic Specialist

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Within 30 Days from the date of the Notice to Proceed, the Owner shall select and the Contractor shall be obliged to accept one of the following procedures (A or B) in respect of the review of the design to be made by a senior seismic specialist (the Seismic Specialist). Procedure A: Without prejudice to its obligations elsewhere in the Contract, the Contractor shall design and construct each part of the Complex in accordance with the Seismic Specifications and the Laws. A Seismic Specialist shall be appointed by the Contractor within 30 Days from the date of the Notice to Proceed. The Seismic Specialist shall be chosen by the Contractor from a list of three Chilean seismic specialists presented to the Contractor by the Owner. All costs relating to his services shall be borne by, and invoiced to, the Parties on a 50/50 basis. The Contractor shall prepare seismic design specifications and calculations for each part of the Complex (the Seismic Design Basis) that shall comply with the Seismic Specifications and the Laws. The Contractor shall submit the Seismic Design Basis to the Seismic Specialist for approval and to the Owner for information. The Contractor shall copy the Owner on all correspondence between the Contractor and the Seismic Specialist. When reviewing the Seismic Design Basis, the Seismic Specialist shall ensure that such Seismic Design Basis complies with the Laws and the Seismic Specifications. The Contractor shall transmit the Seismic Design Basis approved by the Seismic Specialist to the Owner when approved and so marked. As a condition to the issuance of the relevant Taking Over Certificate, the Seismic Specialist will be requested to confirm that the Units, and if applicable, the Common Plant Facilities, have been designed and constructed in accordance with the approved Seismic Design Basis and the Laws. The Contractor and the Owner will jointly manage the services to be rendered by the Seismic Specialist and the approval process and shall handle this process in compliance with the Project Schedule in order to perform each part of the Works within the applicable Time for Completion and shall agree a procedure with the Seismic Specialist for his review. All the requirements of the Seismic Specifications shall be strictly complied with. No approval, act or omission, including but not limited to the Seismic Specialists confirmation that the design and construction of the Complex complies with the Seismic Design Basis, shall relieve the Contractor of its obligations under the Contract including its obligation to comply with the Seismic Specifications and to complete each part of the Works within the relevant Time for Completion, without any adjustment to the Contract Price. Procedure B: Without prejudice to its obligations elsewhere in the Contract, the Contractor shall design and construct each part of the Complex in accordance with the Seismic Specifications, including but not limited to the performance standards stated therein, and the Laws of Country related to seismic design including all relevant Country regulations.
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A senior seismic specialist, knowledgeable about seismic design and with extensive experience in seismic design of structures, equipment and power plants, shall be appointed by the Contractor within 30 Days from the date of the Notice to Proceed to act as seismic coordinator (the "Seismic Coordinator"). The curriculum vitae of the Seismic Coordinator shall be submitted to the Owner for approval. All costs relating to the services of the Seismic Coordinator shall be borne by the Contractor. In addition to the appointment by the Contractor of the Seismic Coordinator, the Owner shall be entitled, at his own cost and discretion, to appoint a Seismic Specialist, who in that case will be the contact person for the Contractor for matters related to seismic design. The Contractor and his Seismic Coordinator shall prepare the Seismic Design Basis that shall comply with the Seismic Specifications, including but not limited to the performance standards stated therein, and the Laws of Country related to seismic design including all relevant Country regulations. The Contractor shall submit the Seismic Design Basis to the Seismic Specialist and the Owner for approval. The Contractor shall copy the Owner on all correspondence between the Contractor and the Seismic Coordinator. When reviewing the Seismic Design Basis, the Seismic Coordinator shall ensure that such Seismic Design Basis complies with the Laws of Country related to seismic design including all relevant Country regulations, the Seismic Specifications. The Contractor shall transmit the Seismic Design Basis approved by the Seismic Coordinator to the Owner when approved and so marked. The Seismic Coordinator shall be further in charge of: ensuring that purchase orders to Subcontractors and suppliers include the Seismic Design Basis requirements; ensuring that the design of each Subcontractor and each supplier of equipment complies with the Seismic Design Basis and Seismic Specifications; ensuring that competent seismic specialists are appointed within the organizations of the each Subcontractor and supplier; organizing kick-off meetings with Subcontractors and suppliers (to which the Seismic Specialist shall be invited) to implement the requirements of the Seismic Design Basis in their work product or supply. Such meetings to result in the issuance by the Subcontractors and suppliers of the guidelines of its design showing implementation of the Seismic Design Basis; reviewing the detailed design Subcontractors and suppliers; by the Contractors engineering

correspondence and liaison with the Seismic Specialist and the Owner on matters related to seismic aspects; follow-up of proper implementation of comments originated from the Seismic Specialist and Owner.
43

DRAFT FOR DISCUSSION PURPOSES

The Seismic Specialist (and Owner) shall review and comment on the documents such as the Seismic Design Basis, the seismic design guidelines and choices of the subcontractors and suppliers, the meeting reports, the detailed design, the seismic test certificates. To this effect the Seismic Coordinator shall submit all relevant documentation in electronic form in PDF format enabling the Seismic Specialist to properly perform the review. Input files for computer calculations shall also be provided in their original electronic form. The Seismic Specialist shall attend meetings organized by the Seismic Coordinator for the finalizing of the Seismic Design Basis and the seismic design guidelines by the SubContractors and suppliers, if judged necessary by the Owner. As a condition to the issuance of the relevant Taking Over Certificate, the Seismic Coordinator and the Seismic Specialist shall be requested to confirm in writing that Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, has been designed and constructed in accordance with the approved Seismic Design Basis, the Seismic Specifications, including but not limited to the performance standards stated therein, and the Laws of Country related to seismic design including all relevant Country regulations. The Contractor and his Seismic Coordinator shall manage the approval process and shall handle this process in compliance with the Project Schedule in order to perform each part of the Works within the relevant Time for Completion and shall agree on a procedure with the Seismic Specialist for his review. Such procedure shall at least foresee a minimum period of 15 Working Days for the review by the Seismic Specialist, counted from the receipt of all necessary information for the review. All the requirements of the Seismic Specifications shall be strictly complied with. No approval, act or omission, including but not limited to the Seismic Specialists confirmation that the design and construction of the Complex complies with the Seismic Design Basis, shall relieve the Contractor of its obligations under the Contract including its obligation to comply with the Seismic Specifications and to complete each part of the Works within the relevant Time for Completion, without any adjustment to the Contract Price.

14

PROJECT SCHEDULE, FOLLOW-UP AND REPORTING

14.1

Performance of Works The Contractor shall at all times perform each part of the Works in accordance with the Project Schedule and the Project Procedure Manual. Changes to the Project Schedule will only be made where and to the extent that an extension to any Time for Completion has been granted in accordance with 31. The Contractor acknowledges that time is of the essence in this Contract and that, in case of delay by the Contract, the remedies and rights as specified in this Contract will apply. The Project Schedule, which will be part of the Contract, will be agreed upon between Parties at the latest one Month after the execution of the Contract. The
44

DRAFT FOR DISCUSSION PURPOSES

Project Schedule will be in accordance with the Preliminary Project Schedule attached in Annex 14.1 to these General Conditions, and the description of the Milestones as set out in SC 2. To this purpose, the Contractor shall communicate to the Owner a draft Project Schedule as soon as possible after execution of the Contract.

14.2

Progress of Works If at any time the actual progress of any part of the Works does not conform to the Project Schedule, the Contractor shall promptly inform the Owner, shall participate in such meetings as Owner may require to explain and display how Contractor intends to regain compliance with the Project Schedule, and shall produce at no extra cost to Owner, within seven (7) Days of being so required, a Recovery Schedule showing (if any) the modifications to the Project Schedule necessary to ensure completion of each part of the Works within the relevant Time for Completion. The Owner will review and comment the Recovery Schedule and Contractor will accept and incorporate all reasonable comments and resubmit the adapted Recovery Schedule to the Owner. Within ten (10) Days of Contractor's initial submission of the Recovery Schedule, the Contractor will implement the Recovery Schedule (including the comments of Owner) and will use its best efforts to adhere to such implemented Recovery Schedule in order to regain compliance with the Project Schedule, including without limitation, the utilization of additional shifts, additional manpower, overtime and re-sequencing of activities. If modifications proposed by the Contractor will alter the Milestones in a manner which in the reasonable opinion of the Owner will adversely affect Owner's ability to perform its obligations under this Contract or under any other agreement to which the Owner is a party, then the Contractor at its cost shall make such other modifications as the Owner shall require in order to remove the adverse effect.

14.3

Reports The Contractor shall prepare and submit to the Owner four (4) copies of the following reports as detailed in the Project Procedure Manual: (i) (ii) (iii) Imported Shipments Report to be delivered on a monthly basis and as necessary for the correct follow-up of the Works; Fabrication and Shipments Progress Report to be delivered at least on a monthly basis and as necessary for the correct follow-up of the Works; Monthly Progress Report on Engineering, Procurement and, Construction to be delivered monthly and at Commissioning in accordance with a table of contents and format to be agreed-upon; Critical Events Report to be delivered on a monthly basis; Quality Surveillance Report to be delivered on a monthly basis; Insurance Report to be delivered on a monthly basis;
45

(iv) (v) (vi)

DRAFT FOR DISCUSSION PURPOSES

(vii) (viii) (viii) (ix)

Report on Status of Consent to be delivered on a monthly basis and as required by the Owner; Pre-completion report to be delivered on a monthly basis and as otherwise requested by the Owner; Final Purchase Orders Status Report to be delivered on a monthly basis and as otherwise requested by the Owner; List of all documents and Drawings relating to the Works together with their author, revision number and status, to be delivered on a monthly basis and as otherwise requested by the Owner; Reports on all shop and manufacturing inspections made by the Contractor, to be delivered on a monthly basis and as otherwise requested by the Owner.

(x)

The Contractor shall submit all such other information and reports in relation to the Works as the Owner shall reasonably require from time to time.

14.4

Accidents Reports The Contractor shall as soon as possible after the event, submit to the Owner, to the relevant Public Authorities and to the insurance companies providing insurance cover therefor, in the form as required, reports related to accidents and incidents having occurred on Site or in any other place with possible impact on the Works. Each of such reports shall contain a root cause analysis and a list of actions with assignment of responsibilities and planning defined in such a manner as to avoid similar future accidents.

15

SITE WORKS FACILITIES

15.1

Contractor's Equipment The Contractor shall, at its own Cost, provide all Contractor's Equipment, including Site facilities, haulage, installation and power, necessary to execute and complete the Works, in a safe and efficient way. The Contractor's Equipment shall be of high quality, in good shape and in sufficient quantity and appropriate to execute and complete the Works in the conditions set forth in the Contract and in accordance with the Project Schedule. All lifting equipment used by the Contractor (including but not limited to cranes) shall be identified and inspected at least twice a year by one independent inspection authority. The Contractor shall make the necessary arrangements and obtain all Consents for the delivery, transportation and receipt of the Contractor's Equipment on the Site within such period required to complete the Works in accordance with the Project Schedule. Before being given access to the Site, the Contractor shall provide to the Owner a list of the Contractor's Equipment with a drawing showing the size and location of the Site facilities.
46

DRAFT FOR DISCUSSION PURPOSES

All Contractor's Equipment provided by the Contractor shall, when brought on the Site, be deemed to be exclusively intended for the execution of the Works and the Contractor shall not remove the same or any part thereof, except for the purpose of moving it from one part of the Site to another, without the consent in writing of the Owner, which shall not be unreasonably withheld. The Contractor shall be liable for loss of or damage to any of the Contractor's Equipment which may happen otherwise than through the fault of the Owner and shall forthwith replace any item of the Contractor's Equipment used for the Works which is damaged or lost. For the avoidance of doubt, the fault of any one of the Contractor, Sub-Contractors or other third parties on Site is not to be considered as the fault of the Owner. Maintenance, care and custody of Contractor's Equipment will be the responsibility and at the cost of the Contractor. The Contractor shall also supply site facilities for the Owner and others as specified in the Specifications. If, at any time, the Contractor's Equipment appears to the Owner to be insufficient, inefficient or inappropriate to secure the quality of the Works required for the proper rate of progress, the Owner may order the Contractor to increase their efficiency, substitute new tools, plant or equipment as the case may be, and the Contractor shall comply with such order. However, either such an order or a failure of the Owner to demand such increase of efficiency, number or improvement shall not relieve the Contractor of its obligations to achieve the quality of work and the rate of progress necessary to complete the Works, within the time required by the Contract to the satisfaction of the Owner and will not entitled the Contractor to any Variation.

15.2

Electricity, Water and Gas The utilities connection works and the costs of consumption of the utilities needed from time to time during the construction and Commissioning shall be provided by, and be the responsibility of, the Party identified in the Utility Matrix at Annex GC10.5. The Contractor shall be entitled to use for the purpose of the Works such supplies of electricity, water and/or (if applicable) gas as may be available on the Site if and as described in the Specifications and shall, at its own expense, provide any apparatus necessary for such the use of utilities including meters and pay to the Owner all charges made (including VAT Taxes) for the use of the supplies for which it is responsible in accordance with the Utility Matrix at Annex GC 10.5. For the supplies of utilities that are not identified in the Utility Matrix at Annex GC 10.5, the Contractor shall make all arrangements for connection (or own production) and distribution at its own cost. Save as stated above, the Contractor shall at its own Costs make all its own arrangements for the connection and distribution of electricity, water (including drinking water) and/or gas to all points where they are required for all the operations under the Contract and for this purpose it shall provide and use all the
47

DRAFT FOR DISCUSSION PURPOSES

necessary Contractor's Equipment. Distribution systems for electricity, water and gas shall meet the requirements defined in the Specifications.

15.3

Owner's Equipment During each Defects Liability Period and subject to the condition that Contractor has not failed to provide sufficient and adequate Contractor's Equipment on Site, the Owner shall at the reasonable request of the Contractor and for the remedying and repairs to the Works allow the Contractor to operate any suitable equipment belonging to the Owner (Owners Equipment) that may be available on the Site and which in the sole opinion of the Owner is not reserved for other purposes. The Owner shall during such operation retain ownership of the Owners Equipment but shall not be responsible for any acts of the Contractor in relation to such equipment nor for the performance or non-performance or condition of such equipment or for any incident, accident or damage that may occur to the Owner's Equipment or to others, when the Owner's Equipment is in use by the Contractor. The Contractor shall pay to the Owner all charges (as reasonably determined by the Owner) resulting from the use of such Owner's Equipment (including without limitation charges for fuel and other consumables). The Contractor shall also indemnify the Owner against any loss or damage caused by any operations carried out by the Contractor when using or in custody of the Owner's Equipment in the same conditions as under GC 29.1.

16

SITE WORKS: ORGANIZATION - SECURITY - SAFETY

16.1

Safety and Security The Contractor shall throughout the progress of the Works have full regard for the safety of all persons on the Site and shall keep the Site and the Works up to the final Taking Over to be achieved in an orderly state appropriate to the avoidance of danger to such persons and to the Works. The Contractor shall, without prejudice to the foregoing, in connection with the Works provide and maintain at its own cost all lighting, guards, fencing and warning signs when and where necessary or required by the Owner or by any Law or competent authority, for the protection of the Works, or for the safety and convenience of the public or others. The Contractor shall also be responsible for the safety and provision of temporary roadways, footways, guards and fences for the accommodation and protection of the owners and occupiers of adjacent property, the public and others, and for the free transit of the public through areas of the Site where transit may not be impeded, as provided by the applicable Laws of the Country. The Contractor shall also install and operate a reliable security system to be approved by Owner, for the protection of the Site, the Works and all the intervening parties on the Site, that is normal for a prudent construction contractor operating in the Country.

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DRAFT FOR DISCUSSION PURPOSES

The Contractor shall issue and enforce a construction site procedure manual as provided for in the Specifications and comply with any instruction of the Owner and/or Law or regulation issued with respect to the safety of the Works.

16.2

Engagement of Labour The Contractor shall make its own arrangements for the engagement of all labour, local or otherwise, and, for the transport, housing, feeding, payment and any other encumbrances thereof, in compliance with all requirements of applicable Laws and all regulations issued by any Public Authority. The Contractor shall comply with all relevant labour, tax and immigration laws applying to its personnel and shall duly pay their wages and afford to them all their legal rights. The Contractor shall require its personnel to obey all applicable laws and regulations, including the Laws and the Consents. All obligations arising from the above-mentioned laws, any applicable collective bargaining agreements or labour agreements binding on the Contractor or any SubContractor shall remain the exclusive responsibility of the Contractor or any such Sub-Contractor. The Contractor shall not recruit or attempt to recruit members of the personnel of the Owner, the Owners Representative or the Owner's Engineer. For the avoidance of doubt, the employees of the Contractor or any SubContractor shall be and remain at all times employees of the Contractor or such Sub-Contractor and shall not be deemed to be employees of Owner. Without prejudice to the provision of GC 33, the Contractor shall use all commercially reasonable efforts to prevent and mitigate the effects of any labour disputes between the Contractor or any Sub-Contractor(s) and their respective employees that may delay or have an adverse effect on the progress or quality of the Works.

16.3

Alcoholic Liquor or Drugs The Contractor shall not import, sell, give, barter or otherwise dispose of any alcoholic liquor or drugs or permit or suffer any such importation, sale, gift, barter or disposal by his agents or employees or by the Sub-Contractors or their agents or employees.

16.4

Arms and Ammunition The Contractor shall not give, barter or otherwise dispose of to any person or persons any arms or ammunition of any kind or permit or suffer the same as aforesaid.

16.5

Days of Rest
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DRAFT FOR DISCUSSION PURPOSES

The Contractor shall, in all dealings with labour in his employment, have due regard to all recognised festivals, days of rest and religious or other customs.

16.6

Epidemics In the event of any outbreak of illness of an epidemic nature the Contractor shall comply with and carry out such regulations, orders and requirements as may be made by the Government or the local medical or sanitary authorities for the purpose of dealing with and overcoming the same.

16.7

Disorderly Conduct The Contractor shall at all times take all responsible precautions to prevent any unlawful, riotous or disorderly conduct by or amongst its employees or those of the Sub-Contractors and for the preservation of peace and protection of persons and property in the neighbourhood of the Site.

16.8

Safety of Workmen and Public (a) The Contractor shall comply with applicable Laws of any Public Authority regarding safety, health and sanitary measures, as well as the established safety rules and practices of the Owner. The Contractor shall provide means for the protection of personnel and property, maintain warning signs and lights, barricades, railings and other safeguards as required by the conditions and the progress of the Works. The Contractor shall furnish and issue approved equipment, including safety helmets, steel-pointed safety shoes, gloves, eye and ear protection and other safety items to all workmen and authorised personnel and visitors (as meant in GC 10.2) at the Site. The Contractor shall ensure that first aid facilities, sick bay and ambulance service (in coordination, if applicable, with the appropriate Public Authority) are available for its (and the Sub-Contractors') workmen on Site, as required by applicable Law. All accidents shall be promptly reported to the Owner in accordance with GC 14.4 and to appropriate Public Authorities as required by applicable Law.

(b)

(c)

(d)

(e)

16.9

Observance by Sub-Contractors The Contractor shall be responsible for the compliance by the Sub-Contractors of the foregoing provisions.

16.10 Returns of Labour


50

DRAFT FOR DISCUSSION PURPOSES

The Contractor shall deliver to the Owner on a monthly basis a detailed report, in such form as the Owner may prescribe, showing the supervisory staff and the numbers of the several classes of labour employed (by the Contractor and SubContractors) and the Contractor's Equipment used from time to time by the Contractor on the Site and such other information as the Owner may require. The Contractor shall supply to the Owner monthly information on expected staff and Machinery and/or Contractors Equipment awaited for the following Month. Within the first fifteen (15) Days as from the Site availability and on a weekly basis thereafter, the Contractor shall provide to the Owner a list of all personnel of the Contractor and of all the Sub-Contractors, indicating if they are local or expatriate, their immigration status, visas, passport numbers and any other relevant information that the Owner may request.

16.11 Manner of Execution (a) All Machinery to be supplied and all Work to be performed under the Contract shall be manufactured and executed in the manner set out in the Contract Documents. The Works shall be executed in the best and most workmanlike manner by qualified, careful and efficient personnel. If the Contractor desires to propose a method or to use Machinery other than that specifically described in the Contract Documents, it shall in all cases submit the same for consideration to the Owner and it shall not make the substitution unless approved by the Owner. If the substitute offered is not approved by the Owner, the Contractor is bound to furnish the component under consideration in compliance with the Contract Documents. Approval of any substitute shall not relieve the Contractor of its contractual obligations.

(b) (c)

16.12 Quality of Materials (a) All Machinery and Works shall be brand new and unused and the best in quality of their respective kinds and shall in any event be in accordance with the standards set forth in the Contract Documents. All Machinery and Works shall be treated to resist deterioration due to the prevailing local conditions on Site. Such treatment shall include but not be restricted to coatings of protective materials, insulation's, etc. All materials buried under the ground shall be suitable or shall be so protected to withstand the actual soil conditions. The Owner may at any time request samples and test certificates of any material to check the compliance with the contractual requirements.

(b)

(c) (d)

16.13 Fire and Explosion Precautions


51

DRAFT FOR DISCUSSION PURPOSES

The Contractor shall conform to the regulations of the Owner and any other competent authority in force at the Site with respect to precautions to be taken against fire and explosion hazards.

16.14 Clearance of Site The Contractor shall regularly during the progress of the Works clear away and remove all surplus materials and rubbish. Upon each Taking Over, the Contractor shall remove any Contractor's Equipment not required to carry out the Contractors obligations under this Contract and leave the relevant part of the Site and the Works clean and in a workmanlike condition, to the satisfaction of the Owner. All Contractor's Equipment and the Temporary Works may be removed only with the prior consent of Owner, that will not be unreasonably withheld (taking into account the needs for the carrying out of the outstanding Works and during the relevant Defects Liability Period), or at the request of the Owner.

16.15 Opportunities for other Contractors The Contractor shall, in accordance with the requirements of the Owner, grant to any other contractors employed by the Owner and their workmen and the workmen of the Owner and of any other duly constituted authorities who may be employed in the execution on or near the Site of any work not included in the Contract or of any contract which the Owner may enter into in connection with or ancillary to the Works (Associated Works), all reasonable opportunities for carrying out their work. The Contractor and the Owner shall liaise to establish and agree a programme for such Associated Works which will avoid or minimize any interference with the Works but also enabling the Owner to ensure that the Plant can be connected to the grid so as not to delay synchronization and commencement of Commissioning.

16.16 Right of access for the Purchaser, the Independent Engineer and the Public Authorities At the request of the Owner, the Contractor shall give access to any part of the Works, including manufacturing shops, to the representatives of the Purchaser or of the Lenders, to the Independent Engineer, to any Public Authority or the representatives of any party concerned by the Project. The Contractor shall provide safety briefings and personal safety equipment to any such visitor prior to entering the Site, and their visits shall be escorted by appropriate personnel of the Contractor, all in accordance with the Contract Documents. The Contractor shall inform any such visitor of the Contractors safety rules at the Site and shall not be required to give access to any visitor who breaches these safety rules.

16.17 Surplus Machinery

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DRAFT FOR DISCUSSION PURPOSES

The Owner shall be given the opportunity to purchase the surplus Machinery at each Taking Over. If the Owner does not exercise its rights within sixty (60) days, and subject to GC 16.14, the Contractor shall remove the surplus Machinery together with Contractor's Equipment.

16.18 Environment Protection Procedure The Contractor shall prepare, submit to Owner for approval, and enforce when approved an environment protection procedure on and around the Site for all steps of Site activities, and comply with any environmental permits and/or instruction and/or environmental Law and/or provision of the Environmental Permit applicable to the Owner and/or the Works.

16.19 Immigration and Employment Laws The Contractor shall be obliged to verify that all of the Contractor's personnel and of its Sub Contractors that are allowed to access the Site have a valid work permit (or any other official document) if so required under the Laws of the Country (and that they have complied with all payment obligations in this respect) and it shall refuse access to such personnel that do not comply with such obligations. The Contractor shall indemnify the Owner against and hold the Owner harmless from all damage, costs, fines and penalties caused by the presence on the Site of such personnel that infringe the Laws of the Country in this respect. The Contractor shall comply, and shall cause its Sub-Contractors to comply, in respect to their respective personnel, agents and contractors with all applicable obligations including social security, labour and tax Laws and obligations (including withholding and payment of withheld amounts) of the Country and their country of origin. The Contractor shall indemnify the Owner for and hold the Owner harmless against any liability of the Owner to any third party caused by any breach by the Contractor of these obligations. The Contractor shall provide, at the request of the Owner, satisfactory evidence of compliance with all applicable labour and immigration Laws of the Country.

17.

TESTING AND OWNER'S RIGHT TO INSPECT DURING MANUFACTURING AND CONSTRUCTION

17.1

Inspection and Testing during Manufacture The Owner shall be entitled during manufacture to inspect, examine and test on the Contractor's premises during working hours, the materials and workmanship and check the progress of manufacture of all Machinery (or such major items of Machinery as specified in the Specifications or otherwise agreed between the Parties) to be supplied under the Contract, and if part of the said Machinery is being manufactured on other premises, the Contractor shall obtain for the Owner permission to inspect, examine and test as if the said Machinery were being
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DRAFT FOR DISCUSSION PURPOSES

manufactured on the Contractor's premises. Such inspection, examination or testing, if made, shall not release the Contractor from any obligation under the Contract.

17.2

Dates for Inspection and Testing The Contractor and the Owner shall agree on the date on and the place at which any Machinery (or such major items of Machinery as specified in the Specifications or otherwise agreed-upon by the Parties) will be ready for testing at the Contractors premises or at the manufacturers shops. Should any postponement become necessary, the Contractor shall provide written notification of the same at least seventy two (72) hours prior to the originally scheduled date. The Owner shall give the Contractor forty eight (48) hours notice in writing of its intention to attend the tests, or ask for a postponement of not more than seventy two (72) hours if required. Should the Owner not attend the tests at the place named and on the date which the Contractor has stated in its notice (or on the postponed date), the Contractor may proceed with the tests and shall forthwith forward to the Owner duly certified copies of the test results. If the Owner decides, at receipt of positive test results, that the test should be repeated in its presence, all the consequences of such repeated test (additional Cost and delay suffered by the Contractor) shall be borne by the Owner, unless such repeated tests give unsatisfactory results in which case they shall be borne by the Contractor. If the Owner decides, at receipt of negative test results, that the test should be repeated in its presence, all the consequences of such repeated test shall be borne by the Contractor.

17.3

Facilities for Testing at Manufacturer's Shops The Contractor shall at its cost provide such assistance, labour, materials, electricity, fuel, stores, apparatus, scaffoldings and instruments as may be necessary and as may be reasonably requested to carry out the tests efficiently on the premises of the Contractor or of any Sub-Contractor. In addition, all costs related to inspection and testing shall be borne by the Contractor except for the Owner's wages, travel and accommodation costs. However, should an inspection or test have to be repeated due to the Contractor's fault, Owner's wages, travel and accommodation costs will be charged to the Contractor.

17.4

General Right to Inspect The Owner shall be entitled to inspect the Works at any time provided that such inspection shall not cause undue interference to the Works. Any inspection of the Works by the Owner (or by the Lenders or the Purchaser or any agent thereof) shall not release the Contractor from any obligation under the Contract nor constitute an acceptance by the Owner or any other party of any of the Works inspected or tested.
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DRAFT FOR DISCUSSION PURPOSES

17.5

Covering up Works The Contractor shall give the Owner full opportunity to examine, measure or test any part of the Works on Site which is about to be covered up or put out of sight. The Contractor shall give at least five (5) Days notice to the Owner whenever such work is ready for examination, measurement or testing. The Owner shall then, unless it notifies the Contractor that it considers it unnecessary, without unreasonable delay, carry out the examination, measurement or testing.

17.6

Uncovering Works If any work on Site is covered up without giving the Owner opportunity to examine it in accordance with GC 17.5, the costs of uncovering, if so instructed by the Owner, shall be borne by the Contractor irrespective of whether or not the work is in accordance with the Contract. If GC 17.5 has been complied with, the costs of uncovering shall be borne by the Contractor if the work is not in accordance with the Contract but otherwise the Contractor shall be entitled to apply for a General Variation in respect of such costs in accordance with GC 31.

17.7

Certificate of Testing As and when the Machinery shall have passed the tests referred to in this GC 17, the Contractor shall prepare the report with all supporting data and shall deliver the same to the Owner for approval, together with a proposed Test Certificate. In relation to the tests that may be witnessed by the Owner as per the Contract and in the event the Owner (or the Owner's Representative and/or the Owners Engineer) is present during such tests, the Test Certificate will be approved or disapproved by the Owner (or the Owner's Representative and/or the Owners Engineer) within twenty-four (24) hours upon submission of such certificate. If the Owner approves the report, it shall sign the Test Certificate and return it to the Contractor. In relation to the tests that may be witnessed by the Owner as per the Contract and in the event the Owner (or the Owner's Representative and/or the Owners Engineer) is not present during such tests (although the Owner has been informed of the timing and the performance of these tests as per this GC17), the Test Certificate will be submitted to the Owner within two (2) Working Days, for Owner's information. In relation to the tests that may not be witnessed by the Owner as per the Contract, the Contractor shall submit the Test Certificate to the Owner within five (5) Working Days for Owner's approval and if the test report has not been disputed by the Owner within five (5) Working Days, the Test Certificate shall be deemed approved by the Owner.

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DRAFT FOR DISCUSSION PURPOSES

17.8

Failure of Tests or Inspection If as a result of any inspection, examination or test of the Machinery or Works other than GC 21 (Acceptance Tests) the Owner considers with reasonable justification that such Machinery or Works is defective or not in accordance with the Contract, then it shall notify the Contractor accordingly stating in writing its objection and reasons therefor. The Contractor shall with all speed make good the defect and ensure that the Machinery or Works complies with the Contract. Thereafter, if required by the Owner, the tests shall be repeated under the same terms and conditions save that all reasonable expenses that the Owner may have to incur by the repetition of the tests shall be charged to the Contractor upon reasonable evidence thereof. All the consequences of such making good and of such repeated tests shall be borne by the Contractor (and the Contractor shall not be entitled to any extension to the Time for Completion or increase in the Contract Price with respect thereto).

17.9

Inspection Authority The Owner may appoint an independent inspection authority ("Inspection Authority") for the carrying out of Machinery inspection and testing. The provisions as specified in this GC 17 shall apply to the Inspection Authority so appointed. Such Inspection Authority will not substitute the work of any inspection normally carried out by the Contractor and/or Sub-Contractor or those tests carried out according to rules, regulation, and practices of the manufacturing country.

17.10 No Reduction of Liability No decision, instruction, rejection or approval by the Owner or the Inspection Authority shall release the Contractor from its obligations to execute the Works in accordance with the Contract.

17.11 Right to Inspect by Others In exercising its rights to inspect the Works and/or to attend any tests under the Contract, the Owner shall be entitled to inspect the Works on its own or accompanied by the Purchaser, the Lenders, any Independent Engineer, or any advisor(s) of the Owner, the Purchaser, the Lenders or the corresponding insurance companies. The Contractor shall allow the Purchaser, the Lenders, any Independent Engineer, or any advisor(s) of the Owner the same rights of inspection as are enjoyed by the Owner pursuant to the Contract, whether or not such inspection is made with the Owner.

17.12 Additional Inspection and Tests In addition to the inspection provided for in the program of inspection and testing, the Inspection Authority or the Owner shall have the right, at any time, to call for additional inspection and test, if such test is intended by or provided for in the
56

DRAFT FOR DISCUSSION PURPOSES

Specifications or is in the opinion of the Owner necessary to ascertain whether the design of any finished or partially finished Work is appropriate for the purposes which it was intended to fulfil. The cost (and the impact on the timing, if any) of such inspection and testing shall be borne by the Owner and the procedure as per GC31 shall apply. If any test is ordered by the Inspection Authority or the Owner which is either: not so intended by or provided for in the Specifications; or while intended by or provided for in the Specifications is ordered by the Owner to be carried out by an independent person at any place other than the Site or the place of manufacture or fabrication of the materials tested,

then the cost and the delay impact, if any, of such test shall be borne by the Contractor if the test shows that the design, workmanship or materials are not in accordance with the provisions of the Contract. If such test shows that the design, workmanship or materials are in accordance with the provisions of the Contract, then Contractor shall be entitled to apply to the Owner for a General Variation.

18

DELIVERY OF MACHINERY TO SITE - PROPERTY RIGHT TRANSFER

18.1

Delivery Unless the Owner shall otherwise direct, no Major Items shall be shipped to Site until the Owner shall have approved or shall be deemed to have approved (or waived in writing the requirement for approval), in respect of such Major Items, a Test Certificate under GC 17.7. In addition such Major Items shall be shipped to Site only upon authorisation in writing applied for and obtained by the Contractor from the Owner (such authorisation not to be unreasonably withheld or delayed) except if the Owner has waived its right to inspect. Should the Owner fail to reply in writing to the Contractor's request within ten (10) Days of receipt of such request or if the Owner has notified to have waived its right to inspect, shipment to Site shall be deemed authorised. The above procedure is without prejudice to the requirements of the insurance companies for inspection and authorizations which the Contractor undertakes to comply with. The Contractor shall be responsible for the reception on Site of all Machinery delivered for the purposes of the Contract. The Contractor shall deliver to the Owner (i) on a case by case basis for the major pieces of Machinery and (ii) on a monthly basis for the other items of Machinery, a report detailing the circumstances of receipt on Site, including possible damages occurred to such Machinery.

18.2

Packing and Marking


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(a) (b)

All Machinery shall be packed in first quality containers or packages. All packing shall be suitable for transport from factories/port of embarkation and rail/road/sea/air freight, rough handling at port of destination, inland transport and movement to the Site, all as applicable. All packing shall be suitably marked in full accordance with the shipping documents and in accordance with the importation requirements of the Country and with the Specifications.

(c)

18.3

Transportation and Storage The Contractor is solely responsible for loading at factory, transport to port of embarkation, loading on ship, sea transportation (or air or rail or road transportation as may be required or appropriate), unloading at port of destination, storage at port if necessary, inland transportation and unloading and storage on Site according to the good practice and the internationally accepted standards. The Contractor shall provide all documents accurately filled in with the information and data as required for each step from factory to Site. The Contractor shall comply with all reasonable requirements of the insurers in the frame of an insurance coverage according to GC 30. Unless otherwise instructed or waived by the Owner, each delivery of materials (per shipment) shall be accompanied by a certificate of origin countersigned by the private or public authority competent therefor in the country of origin of such Machinery. In case no such certificate of origin would be available in the country of origin, other evidence will be provided that is reasonably acceptable to the Lenders and the Owner.

18.4

Detailed Specification and Procedure Within sixty (60) Days from the Commencement Date, the Contractor shall prepare and submit to Owner for approval the detailed specification of packing and marking, the description of the detailed organisation and procedure for shipping from factory to Site, specify the type and number of documents to be prepared and transmitted, with the form for each of them, all in accordance with the Specifications.

18.5

Ownership of Machinery Without prejudice to any other right of the Owner under the Contract, Machinery shall become the property of the Owner at whichever is the earlier of the following times: (a) When by virtue of GC 19 (Suspension of Works) the Contractor becomes entitled to require that the cost of the Machinery be included in a Payment Certificate; or
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(b)

Upon placement of the item of the Work or Materials on the dock along side the vessel at the port of export or along side any other means of transport for loading at the port of export; or Upon delivery of the item of the Work or Materials to Site for non-imported Machinery.

(c)

The Contractor shall, inter alia, provide the Owner with a report on possible damages to the Machinery, documents evidencing customs clearance, bills of lading and similar documents, all to the reasonable satisfaction of the Owner. The Contractor guarantees to the Owner that title to all Machinery and works to be incorporated in the Complex, or to be stored for its later incorporation in the Complex for its use therein, shall pass to the Owner free and clear of any liens, fines, claims, security interests or any other encumbrances. The Contractor shall indemnify the Owner against any claim, loss or damage arising from any defect in the title or any encumbrance or charge or lien on any Machinery. For the avoidance of doubt, such passage of title to the Machinery shall not relieve the Contractor of its obligations under the Contract with respect to such Machinery.

18.6

Ownership of Site Work The property rights in relation to each relevant part of the Work on Site shall be transferred to the Owner upon completion of each relevant part of such Work on Site. For the avoidance of doubt, such transfer of title to the Work on Site shall not relieve the Contractor of its obligations under the Contract with respect to such Works on Site.

18.7

Care and Custody on Machinery Although the property rights in relation to the Machinery or the relevant part of the Works on Site have been transferred to the Owner, the Machinery and the Works on Site shall remain at the disposal and risk of the Contractor, for all subsequent activities. The Contractor shall bear the risk of loss and damage and shall be liable for care and custody on such Machinery and Works on Site (or part thereof) and shall be liable to others as if the Machinery and Works on Site (or part thereof) were still its own property, until Taking Over of the relevant part of the Works as specified in GC 24.2. The insurance coverage, according to GC 30 shall be maintained as if the Machinery or Works on Site was still the property of the Contractor.

18.8

Clearance through Customs The Contractor shall have exclusive responsibility for clearance through customs of all Machinery and Contractor's Equipment and in procuring any necessary Government consent to the re-export of Contractor's Equipment upon removal from the Site and shall support all costs of any nature related thereto. Likewise, the Contractor shall be responsible for all charges, payments and/or costs arising
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out of the formalities to be accomplished for the importation of goods associated with the Complex and any fees and/or penalties payable in connection therewith. The only obligations of the Owner regarding the importation of Machinery are those set forth in the Contract.

19

SUSPENSION OF WORKS

19.1

Order to Suspend Execution of Works The Owner may at any time instruct the Contractor to suspend the execution of the Works, or any portion thereof, for such time or times and in such manner as the Owner may reasonably consider necessary and during such suspensions the Contractor shall properly protect and secure the Works or any part thereof as considered necessary or required by the Owner. Any extra cost reasonably incurred and properly documented by the Contractor in giving effect to the Owner's instructions under this GC, shall be borne and paid by the Owner unless such suspension is: (a) (b) (c) (d) otherwise specifically provided for in the Contract, or necessary by reason of some material default on the part of the Contractor, or due to reason of Force Majeure, or necessary for the proper execution of the Works or part thereof or for the safety of the Works or any part thereof in so far as such necessity does not arise from any act or default by the Owner, due to delay in obtaining the necessary Contractors Consents or the Owners Consents (in this latter case provided that such a delay is due to an act, omission or negligence of the Contractor in assisting and supporting the Owner in obtaining the Owners Consents) which prevents the Contractor from proceeding diligently with the Works,

(e)

provided that the Contractor shall not be entitled to recover any such extra cost unless within fourteen (14) Days after receipt of the order to suspend the execution of the Works or part thereof it gives to the Owner notice in writing of its intention to apply for a General Variation in accordance with GC 31.

19.2

Payment for Machinery when Execution Suspended If work on the Machinery or any portion thereof is suspended as aforesaid by the Owner before the Machinery or such portion thereof is delivered to the Site and (i) the suspension exceeds three (3) Months and (ii) the Contractor has taken over such Machinery and (iii) the Contractor has suitably and sufficiently marked the Machinery or such portion thereof as the Owner's property and (iv) insurance has been effected in accordance with GC 30 then the Contractor shall be entitled to have the Contract Value (as hereinafter defined) thereof as at the
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commencement of the suspension included in an Interim Certificate on the expiration of the said three (3) months or (if later) at the time when, but for such suspension, the Machinery or such portion thereof would have been delivered to the Site; provided that this Sub-Clause shall not apply if the suspension is within paragraphs (a), (b), (c), (d) or (e) of GC 19.1; and further provided that the Contract Value of any Machinery that, according to the decision of the Owner, is defective or not in accordance with the Contract shall not be included in such certificate. For the purpose of this GC, "Contract Value" means such part of the Contract Price as is properly apportionable to the Machinery in question (to be decided in the first instance by the Owner). In deciding what the Contract Value should be, the known state, condition and topographical location of the Machinery, the amount of work done and all other relevant circumstances shall be taken into account.

19.3

Resumption of Works At any time after a suspension under GC 19.1 the Owner may give notice to the Contractor to proceed with the delivery or erection of the Machinery and/or with the execution of the Works or any part thereof suspended under this GC. If the execution of the Works or any part thereof is suspended pursuant to GC 19.1 and if notice to resume execution is not given by the Owner within two hundred seventy (270) Days after the date of suspension, then unless the suspension is within paragraphs (a), (b), (c), (d) or (e) of GC 19.1, the Contractor may serve notice in writing on the Owner requiring permission within twenty eight (28) days after receipt thereof to proceed with the Works or the part in regard to which progress is suspended and, if such permission is not granted within that time, the Contractor may by a further notice in writing to the Owner elect to treat the suspension either, where it affects a portion of the Works, as an omission of such portion under GC 31 (Contract Variations) or, where the suspension affects the whole of the Works, as an abandonment of the Contract by the Owner the consequences of which are to be resolved in accordance with GC 35.

20

MECHANICAL COMPLETION AND PRE-COMMISSIONING

20.1

Mechanical Completion As soon as the Works relating to (i) Unit 1 (including the Common Plant Facilities) or (ii) Unit 2, as the case may be, or a portion thereof, has, in the opinion of Contractor, been completed mechanically, electrically and structurally and put in a tight and clean condition excluding minor items which do not materially affect the operation or safety of the Works, the Contractor shall so notify the Owner in writing.

20.2

Issue of Mechanical Completion Certificate


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The Owner shall, within five (5) Working Days after receipt of the Contractor's notice under GC 20.1 above, either issue a Mechanical Completion Certificate stating that the relevant part of the Works (or a portion thereof) have achieved Mechanical Completion, or notify the Contractor in writing of any defects and/or deficiencies preventing the issue of the relevant Mechanical Completion Certificate. The issuance of the Mechanical Completion Certificate shall not operate as an admission by the Owner that the relevant part of the Works have been completed at this stage in accordance with the Contract. If the Owner notifies the Contractor of any defects and/or deficiencies, the Contractor shall then correct such defects and/or deficiencies and shall repeat the procedure described in this General Condition until issue of the relevant Mechanical Completion Certificate by the Owner or termination of the Contract.

20.3

Ready for Commissioning Following (but not before) the issue of the relevant Mechanical Completion Certificate, as soon as all works in respect of the pre-commissioning of the Works relating to Unit 1 (including the Common Plant Facilities) and/or the Unit 2, as the case may be, (or a portion thereof) are completed and, in the opinion of the Contractor, are Ready for Commissioning, the Contractor shall so notify the Owner in writing by submitting the relevant Ready for Commissioning Certificate for approval.

20.4

Issue of Ready for Commissioning Certificate The Owner shall, within five (5) Working Days after receipt of the Contractor's notice under GC 20.3 above, either approve the relevant Ready for Commissioning Certificate or notify the Contractor in writing of any defects and/or deficiencies preventing the issue of the relevant Ready for Commissioning Certificate. The issuance of the Ready for Commissioning Certificate shall not operate as an admission by the Owner that the relevant part of the Works have been completed at this stage in accordance with the Contract. If the Owner notifies the Contractor of any defects and/or deficiencies, the Contractor shall then correct such defects and/or deficiencies and shall repeat the procedure described in this General Condition, until approval of the relevant Ready for Commissioning Certificate by the Owner or termination of this Agreement.

21.

ACCEPTANCE TESTS - TESTS ON COMPLETION

21.1

Obligation to Proceed with Commissioning. Following the issue of the relevant Ready for Commissioning Certificate, the Contractor shall proceed with the Commissioning of Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, (or a portion thereof) at the date(s) specified in the Project Schedule.
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21.2

Notice of Tests The Contractor shall deliver to the Owner not less than hundred eighty (180) days in advance of the scheduled date for the relevant Ready for Commissioning, a testing programme showing the proposed dates to start the relevant Reliability Run and to do the relevant Acceptance Tests and their expected duration (the Testing Programme) for the Owners approval. The Contractor will use its best efforts to provide the Owner on an on-going basis with relevant information regarding its Testing Programme. For those tests requiring the export of electricity or otherwise impacting the grid or as otherwise required by Law, the Contractor will submit its Testing Programmes and related test procedures to CDEC for its approval. The Contractor shall only contact CDEC with the prior approval of the Owner and in the presence of the Owner. The Contractor shall submit the Testing Programmes and related test procedures to CDEC sufficiently in advance to allow CDEC and the Owner sufficient time to comment and to allow subsequent revisions of the documents by the Contractor following the receipt of comments and coordination meetings. The Testing Programmes reviewed and agreed-upon in accordance with the above shall be confirmed in writing by the Contractor to the Owner at the latest twenty (20) days ahead of the scheduled dates for their commencement and the Contractor agrees that the Testing Programmes will be submitted by the Owner to the CDEC for approval and the Contractor agrees to amend the Testing Programmes in accordance with the comments made by CDEC The Contractor shall advise the Owner in writing of any changes in its final Testing Programmes in sufficient time for the Owner to obtain the approval of CDEC. In any event, the Contractor agrees to amend the Testing Programmes as required by CDEC. If the timing for any test is adjusted after the Contractor has provided the Owner with the relevant final Testing Programme, then the Contractor shall advise the Owner of the adjustments made not less than seventy two (72) hours prior to the commencement of any such test, but such adjustments shall remain subject to the approval of CDEC. During the coordination meetings that shall be held on a daily basis as from the start of the Commissioning of the relevant part of the Works, the Contractor shall provide a detailed schedule of the tests to be conducted on the following seven (7) Days.

21.3

Procedure for Acceptance Tests The Acceptance Tests shall be carried out by the Contractor in accordance with the Contract Documents, and more specifically the Specifications and the Acceptance Tests Procedure. The Acceptance Tests shall be performed under conditions appropriate to demonstrate the functionality of the part of the Works being tested and under operating conditions representative of the commercial operation of the Plant.
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21.4

Delayed Tests If in the opinion of the Owner the tests are being unduly delayed, it may, by notice in writing, request the Contractor to make such tests within twenty-one (21) Days from the receipt of the said notice and the Contractor shall make the said tests on such Days within the said twenty-one (21) Days that the Contractor may determine and for which it shall give advance notice to the Owner at least seven (7) Days prior to the commencement of the tests.

21.5

Facilities for Commissioning Approval of delivery of power to the grid will be the responsibility of the Owner. The utilities (fuel, electric power, water) required for Commissioning will be supplied by the Parties in accordance with GC 15.2. All other facilities and instrumentation shall be supplied by the Contractor at its Costs.

21.6

Repeat Tests If the Works (or a portion thereof) fail to pass any of the Acceptance Tests and/or fail to achieve the guaranteed results as per the Contract of any of such tests, then subject to this GC, the SC and all other Contract Documents, the Contractor shall make good the Works or part thereof and the relevant Acceptance Tests (or with the Owner's prior consent which shall not be unreasonably withheld the unsuccessful Acceptance Test(s)) shall be repeated in accordance with GC 23 upon the same terms and conditions, save that all reasonable expenses (except for the facilities mentioned in GC 21.5 which are subject to the limitations therein) incurred by the Owner as a result of the repetition of the tests shall be reimbursed by the Contractor.

21.7

Tests Results - Test Certificates As soon as available but not later than twenty (20) Days after each relevant Acceptance Test has been completed, the Contractor shall provide the Owner with copies of all preliminary results of tests performed. The Owner shall have a reasonable period of time, not to exceed fifteen (15) Days, to review and comment on these results. When, in the opinion of the Contractor, Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, have passed each relevant Acceptance Test, and have achieved the results of the relevant Acceptance Test as per the Contract, the Contractor shall submit for the Owner's approval the Test Certificate in relation thereto with all supporting data. The Owner shall approve such certificate or shall state the reasons for disapproval, and (in the latter case) the Contractor shall repeat the tests as said under GC 21.6 above and GC 23 hereinafter.

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As soon as available but not later than thirty (30) Days after the date on which the relevant Test Certificate is issued, the Contractor shall provide the Owner with copies of all final results of each relevant Acceptance Test. The Owner shall have a reasonable period of time, not to exceed fifteen (15) Days, to review and comment on these results. The comments or absence of comments by the Owner or the issuance of any Test Certificate shall not operate to absolve the Contractor from the due performance of its obligations under this Contract, nor operate to vary those obligations in any manner. The Owner has the right, but not the obligation, to issue in relation to an Acceptance Test that has not been successfully passed, a Test Certificate for the purposes of Provisional Acceptance only (a "Fail Test Certificate"). Such certificate shall mention the remarks of the Owner. Such certificates shall not prevent, in respect of the relevant Acceptance Test, the issue of the Provisional Acceptance Certificate. However, it shall not relieve the Contractor from its obligations under this Contract, including, but not limited to, its obligation to make good, to repeat the test and to support all consequences of its failure to pass the test. The Owner and the Contractor acknowledge that the periods specified in this GC 21.7 are maximum periods, and each Party shall use its reasonable best efforts to complete any action to be performed during such periods within the shortest possible time.

21.8

Inability to Test Due To Reasons Attributable to Owner In the event that the Contractor is unable to carry out the relevant Acceptance Tests for a period of time after the date given in the twenty (20) Days notice referred to in GC 21.2 for reasons attributable to Owner, and provided that the Contractor has at the start of the period complied with all its contractual obligations, such period of time shall be added to the relevant Time for Completion. Without limiting its option to apply GC 7.3 (d), the Owner may deliver a provisional Test Certificate (a "Provisional Test Certificate") to the Contractor where it has not been able to carry out the relevant Acceptance Tests within the relevant Time for Completion, for reasons attributable to the Owner. This Provisional Test Certificate shall be treated in all subsequent relations between the Owner and the Contractor as a Test Certificate, provided however that the Contractor shall not be relieved of its obligations to perform the relevant Acceptance Tests at the request of the Owner and, if these are not successful, to support all consequences according to the Contract. The Owner shall have the right to request the Contractor to undertake the Acceptance Tests for which a Provisional Test Certificate has been issued within a period of two (2) years from the expiry of the relevant Time for Completion, under condition that the Owner will be charged with all additional direct expenses incurred by the Contractor in the performance of such tests.

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21.9

Test after Modification If the Contractor modifies any part of the Works after successful completion of a test and if the Owner considers that such modification may reduce the capability of the relevant part of the Works to pass the test, the Contractor shall repeat the said test at its costs and such repeated test shall be the only one recognised for the purposes of this Contract.

22

PROVISIONAL ACCEPTANCE

22.1

Unit 1 and the Common Plant Facilities When (i) all Mechanical Completion Certificates relating to the Common Plant Facilities have been issued by the Owner and (ii) all relevant Acceptance Tests have been passed successfully and have achieved the guaranteed results as per the Contract Documents and all relevant Acceptance Tests Certificates have been approved and issued by the Owner for Unit 1 (and, if applicable, the Common Pant Facilities), the Contractor shall be entitled to submit to the Owner the Provisional Acceptance Certificate for Unit 1 (and the Common Pant Facilities), under condition that such Unit (and the Common Plant Facilities) are in such a stage of completion as to assure safe and reliable operation, in normal operating and maintenance conditions, according to the Operation and Maintenance Manual and the Good Utility Practices. If so satisfied, the Owner shall issue the Provisional Acceptance Certificate for Unit 1 (and the Common Plant Facilities) and indicate in such certificate the date at which all conditions for Provisional Acceptance have been fulfilled.

22.2

Unit 2 When all relevant Acceptance Tests have been passed successfully and have achieved the guaranteed results as per the Contract Documents and all relevant Acceptance Tests Certificates have been approved and issued by the Owner for Unit 2, the Contractor shall be entitled to submit to the Owner the Provisional Acceptance Certificate for Unit 2, under condition that such Unit is in such a stage of completion as to assure safe and reliable operation, in normal operating and maintenance conditions according to the Operation and Maintenance Manual and the Good Utility Practices. If so satisfied, the Owner shall issue the Provisional Acceptance Certificate for Unit 2 and indicate in such certificate the date at which all conditions for Provisional Acceptance have been fulfilled.

22.3

Use by Owner before Taking Over The Owner shall be entitled to use any portion of the Complex in respect of which a Provisional Acceptance Certificate has been issued provided that such use shall not relieve the Contractor from any of its obligations hereunder nor in
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any way restrict, limit or exclude the remedies available to the Owner in respect of the Works as set out in GC 23 and GC 34.

22.4

Punch List Notwithstanding the issue of any certificate, in conjunction with the issue of any Provisional Acceptance Certificate the Owner and the Contractor shall, acting in good faith, agree a list of items of defective works or any incomplete or unfinished element of the Works to which such certificate relates. Such items shall be of a minor nature only and shall not affect the ability of the Owner to operate Unit 1 and/or Unit 2 and/or the Common Plant Facilities in full commercial operation in a safe and reliable manner. The Items shall be included on a Punch List and the works necessary to rectify and complete the items on the Punch List shall be carried out by the Contractor as soon as practical after Taking Over of the relevant part of the Works and in accordance with a schedule to be agreed-upon.

23

CONSEQUENCES OF FAILURE TO PASS ACCEPTANCE TESTS

23.1

Types of Tests The Acceptance Tests comprise all tests included in the Specifications and shall include, without limitation, the Performance Tests, the Environmental Tests, the Reliability Run, the Functional Tests and the Specific Tests.

23.2

Tests other than Performance Tests If the Works (or a portion thereof) fail to pass any of the relevant Acceptance Tests other than the Performance Tests (including, without limitation, any of the Environmental Tests, the Reliability Run, the Functional Tests and Specific Tests) and/or fail to achieve the relevant Guaranteed Values and/or the Test demonstrates that the Works or any part is not in accordance with the Contract, the Contractor is obliged, subject to GC 23.4 (Repeat Tests), to make good the relevant part of Works, until such part of the Works pass successfully all these tests and achieve the relevant Guaranteed Values and/or any other guaranteed results of any of these tests as specified in the Contract Documents. If the Contractor is unable to make good the relevant part of the Works and to pass successfully any of the above-mentioned tests by the relevant Delay Limit Date, the Owner shall be entitled, in addition to its right on Liquidated Damages for Delay in Completion and any other remedies set forth in the Contract Document in favour of the Owner: (a) to require the Contractor to complete and/or to make good the relevant part of the Works within a period of time equal to one (1) month as from the relevant Delay Limit Date (upon submission by the Contractor to the Owner and approval by the Owner of a recovery program for the completion and make good of such Works within such one (1) month
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period). If the Contractor is unable to complete and/or to make good the Works and to pass any of the above-mentioned tests and to achieve the relevant Guaranteed Values and/or any other guaranteed results of any of these tests as specified in the Contract Documents on or before such one (1) month period, the Owner shall be entitled (i) to a reduction of the Contract Price to be determined by an Expert as per GC 36, it being understood that the Parties expressly accept the such an issue be dealt with by the Expert and that the decision of the Expert will be final and binding on the Parties or (ii) to exercise any other remedy set forth in this GC 23.2; or (b) or terminate the Contract in respect of the relevant part or the whole of the Works in accordance with GC 34.1, in which case the Owner may forthwith enter the Site or the relevant part thereof, expel the Contractor therefrom and replace the Contractor. The mechanism of termination and the payments pursuant to such termination shall be those as set out in GC 34; or reject the Works or relevant part thereof and to require the Contractor to repay forthwith that part of the Contract Price paid by the Owner to the Contractor at the date of rejection and to require the Contractor, at no cost to the Owner, to remove all Machinery, Works and Contractor's Equipment from the Site or the relevant part thereof, to make good the Site or relevant part thereof and thereafter to hand the Site or the relevant part thereof back to the Owner in its original state. The Owner will be entitled to claim from the Contractor all Costs incurred by it or any other contractor as a result of such rejection (including, in case rejection leads to the loss of title of the Owner to the land containing the Site or relevant part thereof, the Cost for the acquisition of the such land to the extent not reimbursed to the Owner), plus any amounts that may be due under GC 29.1; or to require the Contractor to allow a reasonable reduction in the Contract Price to be agreed upon within five (5) Working Days as from the request thereof by the Owner or, failing agreement within such period of time, the Owner may either refer the issue of the amount of the reduction of the Contract Price to the Expert for determination under GC36 or exercise any of its rights under (a), (b) or (c) above.

(c)

(d)

23.3

Performance Tests If as a result of the relevant Performance Tests, the Contractor has been unable to achieve the relevant Guaranteed Performances set forth for such tests and the performances achieved have satisfied the relevant Acceptable Limits, the Owner shall issue the relevant Test Certificate with respect to such Performance Tests, it being understood that Contractor shall have a right, at its cost and risk, to make good the Works and reconduct the Performance Tests (the "Repeated Performance Tests") on or prior to the Delay Limit Date in order to achieve the relevant Guaranteed Performances. If as a result of the Repeated Performance Tests, the performances are outside of the relevant Acceptable Limits, the Owner shall be entitled to exercise any of the remedies set forth in GC 23.2.
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If on the relevant Delay Limit Date, the Contractor has been unable to make good the Works or relevant part thereof and to pass successfully any of the above-mentioned tests and to achieve the relevant Guaranteed Performances of any of theses tests as specified in the Contract Documents, the following shall apply: a) If the relevant part of the Works have achieved the relevant Acceptable Limits as defined in SC, the Contractor shall forthwith pay the relevant Performance Liquidated Damages according to the SC and the Owner will approve the relevant Provisional Acceptance Certificate in respect of the Works; If the relevant part of the Works have not achieved the relevant Acceptable Limits, the Owner shall be entitled to exercise any of the remedies set forth in GC 23.2 above.

b)

This provision is without prejudice to SC 3.3.

23.4

Repeat Tests If the Works (or a portion thereof) fail to pass any of the relevant Acceptance Tests and/or fail to achieve the relevant Guaranteed Values and/or the Test demonstrates that the Works or any part is not in accordance with the Contract, then subject to this GC, the SC and all other Contract Documents, the Contractor shall at its own cost make good the Works as required by GC 23.2 and GC 23.3. The Contractor may then repeat such Acceptance Tests subject to the Owner's prior consent which shall not be unreasonably withheld at a time to be determined by the Owner and CDEC. Any repeated tests shall be carried out upon the same terms and conditions that applied to the first unsuccessful test.

24

TAKING OVER

24.1

Conditions for Taking Over

24.1.1 Conditions for Taking Over of Unit 1 and the Common Plant Facilities As soon as: The Owner has approved the Provisional Acceptance Certificate for Unit 1 (and the Common Plant Facilities); and There is no subsisting event of default on the part of the Contractor under the Contract, and The Contractor has paid to the Owner any applicable Liquidated Damages due at that time, and the Retention Money Bond has been validly issued and delivered to the Owner in accordance with the Contract Documents, and
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The Contractor has complied with its other obligations (including payment obligations) under the Contract, and The documentation and drawings to be handed over to Owner prior to Taking Over pursuant to the Specifications, including the Operation and Maintenance Manuals in accordance with GC 13.8, have been submitted to the Owner and approved by the Owner, and The Contractor has issued certificates in respect of Machinery confirming that such Machinery is new and unused, and The Punch List and the schedule for the performance of the same have been agreed in accordance with GC 22.4, and The Seismic Specialist has confirmed pursuant to, and in accordance with, GC13.9 that the design and construction of the Unit 1 (including Common Plant Facilities) conforms to the Seismic Design Basis, and [The Recommended and Mandatory Spare Parts which the Owner has purchased in accordance with SC 6 have been delivered on Site in accordance with the Contract Documents,] the Contractor shall be entitled to submit to the Owner the Taking Over Certificate for Unit 1 (including Common Plant Facilities). If satisfied that all of the above conditions have been met, the Owner shall execute the Taking Over Certificate for Unit 1 (including Common Plant Facilities), specifying the Actual Completion Date. If as a result of the Contractor carrying out its obligations in relation to Unit 2, any part of Unit 1 and/or the Common Plant Facilities is rendered inoperable or can only operate at a reduced capacity, then the Contractor shall indemnify the Owner from and against any losses suffered or sustained by the Owner, including damages, liquidated or otherwise, to be paid to the Purchaser or to other third parties.

24.1.2 Conditions for Taking Over of Unit 2 As soon as: The Owner has approved the Provisional Acceptance Certificate for Unit 2; and There is no subsisting event of default on the part of the Contractor under the Contract, and The Contractor has paid to the Owner any applicable Liquidated Damages due at that time, and the Retention Money Bond has been increased as set forth in Article 3.4 of the Master Agreement, and The Contractor has complied with its other obligations (including payment obligations) under the Contract, and
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The documentation and drawings to be handed over to Owner prior to Take Over pursuant to the Specifications, including the Operation and Maintenance Manuals in accordance with GC 13.8, have been submitted to the Owner and approved by the Owner, and The Contractor has issued certificates in respect of Machinery confirming that such Machinery is new and unused, and The Punch List and the schedule for the performance of the same have been agreed in accordance with GC 22.4, and The Seismic Specialist has confirmed pursuant to, and in accordance with, GC13.9 that the design and construction of Unit 2 conforms to the Seismic Design Basis, and The Recommended and Mandatory Spare Parts which the Owner has purchased in accordance with SC 6 have been delivered on Site in accordance with the Contract Documents, the Contractor shall be entitled to submit to the Owner the Taking Over Certificate for Unit 2. If satisfied that all of the above conditions have been met, the Owner shall execute the Taking Over Certificate for Unit 2, specifying the Actual Completion Date.

24.2

Transfer of Risks, Care and Custody Liability The Owner shall be deemed to have taken over the Works relating to Unit 1 (including the Common Plant Facilities) or Unit 2, as the case may be, on the date of the signature of the relevant Taking Over Certificate whereupon the risks of loss and damage and the responsibility for care and custody will pass to the Owner as of such a date. The Taking Over Certificates are issued without prejudice to the remaining obligations of the Contractor under the Contract.

25

DEFECTS BEFORE GUARANTEE

AND

AFTER

TAKING

OVER

AVAILABILITY

25.1A Without prejudice to any other obligations of the Contractor in the Contract, the Contractor guarantees that each part of the Works shall be (a) new, (b) in accordance with the Contract and all design construction and quality standards referred to therein, (c) in accordance with all applicable Laws and Consents, and (d) free from all defects, deficiencies, imperfections or faults of whatsoever kind, whether in design, materials, workmanship or otherwise, and damage resulting therefrom (all such defects, deficiencies and damages, and Works that are not in accordance with the Contract, being Defects).

25.1

Defects Before Taking Over


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Without prejudice to GC 23, if, in respect of any part of the Works for which no Provisional Acceptance Certificate has been issued, the Owner shall at any time: (a) decide that any part of the Works is or are defective or not in accordance with this Contract and (b) have given notice in writing to the Contractor of the said decision specifying particulars of such deficiencies and of where the same exist or have occurred, then the Contractor (who moreover has the obligation to notify the Owner of any such deficiencies) shall, with all speed and due diligence and at his own expense, make good the deficiencies so specified. In case the Contractor shall fail to do so within reasonable time, the Owner is entitled to (but has no obligation to) take at the cost of the Contractor such steps as may in all the circumstances be reasonable to make good such deficiencies. All Machinery provided by the Owner to replace defective equipment and materials shall comply with this Contract and shall be obtained at reasonable prices and where reasonably practicable under competitive conditions. The Contractor shall be entitled to remove and retain all defective Machinery or Works that the Owner may have replaced at the Contractor's cost. Nothing contained in this GC shall affect any of the Owners rights under this Contract, including any claim by the Owner under GC 23. If any such defect shall appear or damage occur the Contractor has the obligation to forthwith notify the Owner thereof stating in writing the nature of the defect or damage.

25.2

Defects Liability Period Unless otherwise specified in the SC, the Defects Liability Period shall be for (i) Unit 1 and the Common Plant Facilities and (ii) Unit 2, the period of twenty-four (24) Months calculated as from the relevant Actual Completion Date as specified in the respective Taking-Over Certificate, as such period may be extended in accordance with GC 25.5. The provisions of this GC 25 shall apply to all replacements or renewals or repaired Works carried out by the Contractor to remedy any Defect in any part of the Works. The Defects Liability Period for such replacements, renewals or repaired Works shall be the period of twenty-four (24) Months from the date the said replacements and renewals and repaired Works were completed to the satisfaction of the Owner, provided always that the Contractors obligations under this GC25 shall not extend beyond a five (5) year period from the relevant Actual Completion Date.

25.3

Making Good Defects The Contractor shall be responsible for making good by repair or replacement with all possible speed at his own expense any Defect in any part of the Works (and the consequences thereof) which may appear or occur during the relevant
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Defects Liability Period, unless the Contractor proves that such Defect is due to the Owner. If as a result of the need to make good any Defect to any part of the Works, the Complex or any part thereof is rendered inoperable or can only operate at reduced capacity, then the Contractor shall indemnify the Owner from and against any losses suffered or sustained by the Owner, including damages, liquidated or otherwise, to be paid to the Purchaser or to other third parties. If during the relevant Defects Liability Period, the same Defect in any same part of the Machinery occurs three (3) times or more, the Owner has the right to reject such part of the Machinery and Contractor will be obliged to replace such part of the Machinery at its cost by another more reliable Machinery agreed upon by the Owner (or, with the approval of the Owner, perform any design changes as are required to cure such defective Machinery). The Contractor shall immediately after Taking Over work on the items of Works specified in the respective Punch List, provided, that if Contractor has not completed such items of Works in accordance with the schedule agreed in accordance with GC 22.4, such items of Works will be considered as a Defect and Owner may complete or may have completed such items of Works at Contractor's cost and expense.

25.4

Notice of Defects If any Defect shall appear during the relevant Defects Liability Period the Owner shall forthwith inform the Contractor thereof stating in writing the nature of the Defect.

25.5

Extension of Defects Liability Period The applicable Defects Liability Period shall be extended by a period equal to the period during which the Complex (or any portion thereof) cannot be used or is operated at reduced load (i.e., under 85% of full load) by reason of a Defect and, in the case of any further Defect occurring during any such extension, the Defects Liability Period shall be further extended by the period during which the Complex or any portion cannot be used or is operated at reduced load (i.e., under 85% of full load) by reason of the further Defect.

25.6

Delay in Remedying Defects If any Defect appearing during the relevant Defects Liability Period is not remedied within a reasonable period of time to be determined by the Owner, or if such Defect renders the Complex or any part thereof inoperable, the Owner may (a) proceed to do the work itself or by others at the Contractor's risk and expense provided that it does so in a reasonable manner, and all Costs, expenses and direct losses incurred by the Owner in undertaking such work may be deducted from the Contract Price or otherwise recovered as a debt due from the Contractor to the Owner; or (b) require the Contractor to grant the Owner a reasonable reduction in the Contract Price to be agreed-upon, or failing agreement, the
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Owner may either refer the question of the amount of the reduction in the Contract Price to the Expert for determination under GC 36 or terminate the Contract in respect of that part of the Complex rendered inoperable by reason of the Defect; or (c) if the Defect or damage is such that the Owner has been deprived of substantially the whole of the benefits of the Works or a part thereof, it may terminate the Contract in respect of such part of the Works as cannot be put to the intended use. The Owner shall be entitled to recover all sums paid in respect of such parts of the Works together with the cost of dismantling the same, clearing the Site or part thereof and returning Machinery and Contractor's Equipment to the Contractor or otherwise disposing of it in accordance with the Contractor's instructions at Contractor's Costs. This GC is without prejudice to GC 29.1.

25.7

Removal of Defective Work The Contractor may, with the consent of the Owner and the giving of financial security satisfactory to the Owner, remove from the Site or part thereof any portion of the Complex which is defective or damaged if the nature of the Defect is such that repairs cannot be expeditiously carried out on the Site. All costs of any nature due to that removal shall be for the account of the Contractor.

25.8

Further Acceptance Tests If the replacement, repair or renewal, at any time after the successful completion of any of the Acceptance Tests, is, in the opinion of the Owner, of such a character as it may affect the efficiency, reliability or operability of the Complex or any portion thereof, the Owner may, within one (1) month of such replacement repair or renewal, give to the Contractor notice in writing requiring that adequate Acceptance Tests be carried out, in which case such tests shall be carried out as provided in GC 21 and the consequences will apply to such tests according to GC 23.

25.9

Conditions Applicable The Contract shall apply to all inspections, adjustments, replacements and renewals and to all tests occasioned thereby, carried out by the Contractor pursuant to this GC 25.

25.10 Right of Access Until the Final Certificate of Payment shall have been issued, the Contractor may request the Owner (who shall not unreasonably withhold his consent) to have the right of access to all parts of the Complex for the purpose of inspecting the working thereof and, recording of the working and performance thereof for the purpose of inspecting the same and taking notes therefrom during normal working hours, at its own risk and expense, for itself or its duly authorised representatives, whose names shall have previously been communicated in
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writing to the Owner. The Contractor may at its own risk and expense make any test which its considers desirable subject to the Owner's approval, which shall not be unreasonably withheld. The Contractor shall observe the safety and security rules and such other rules in force at the Complex or part thereof (including the rules regarding restricted areas and confidentiality) and shall in no event obstruct or disturb the operation or maintenance of the Plant. The Contractor shall communicate the results of such tests to the Owner.

25.11 Contractor to Search The Contractor shall, if required by the Owner in writing, search for the cause of any Defect, under the direction of the Owner. If such Defect is not one for which the Contractor is responsible under the Contract, the cost of the work carried out shall be borne by the Owner. But if such Defect shall be shown to be one for which the Contractor is liable as aforesaid the cost of the work carried out in searching for the Defect shall be borne by the Contractor and the Contractor shall reimburse to the Owner any Costs reasonably incurred by the Owner in connection therewith. If there is a reasonable probability that a Defect in any part of the Works or Machinery may appear regularly or may affect other similar items or parts of the Works or Machinery, the Contractor shall be obliged to search for such Defect in those parts of the Works or Machinery. If there appears at least one similar Defect in such other parts, the Contractor shall be obliged at its cost and under its responsibility to replace all such similar items or parts of the Works or Machinery in the Complex by Machinery or Works of a higher quality in order to ensure compliance with the Contract.

25.12 Issue of Final Acceptance Certificate At the end of the relevant Defects Liability Period relating to (i) Unit 1 (and the Common Plant Facilities) or (ii) Unit 2, as the case may be, (as extended in accordance with the Contract) and so long as: (i) any tests performed during the relevant Defects Liability Period have been passed successfully, have achieved the results set forth in respect thereof in the Contract and the Owner has issued the corresponding Test Certificate(s), and [intentionally left blank]; all Defects which appeared during the relevant Defects Liability Period have been remedied by the Contractor to the full satisfaction of the Owner, except for those outstanding minor items of the Works that remain to be performed and that are identified in a list agreed-upon by the Parties (which list includes a time schedule for the completion of the items included therein) (the Second Punch List), on the condition that the Contractor extents the Retention Money Bond up to the end of the period necessary to complete the items identified in the Second Punch List; and
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(ii) (iii)

DRAFT FOR DISCUSSION PURPOSES

(iv)

the Contractor has revised and/or updated the Operation and Maintenance Manuals; and all Liquidated Damages due under the Contract have been paid; and the Contractor has complied with each of its other obligations under the Contract, including the appropriate repair or completion of pending issues contained in Punch List under GC 24.1,

(v) (vi)

the Owner shall issue, at the request of Contractor, the Final Acceptance Certificate for Unit 1 (and the Common Plant Facilities) or Unit 2, as the case may be. The issue of the relevant Final Acceptance Certificate will not release the Contractor of its outstanding obligations according to the Laws or any Contract Document.

25.13 Responsibility for Latent Defects The Contractor is responsible for a period commencing on the expiry of the Defects Liability Period and expiring on the date falling three (3) years after the date of the issuance of the Final Acceptance Certificate for Defects in the relevant part of the Complex that existed prior to or during the Defects Liability Period and were not discovered by the Owner prior to the expiry of the Defects Liability Period (a "Latent Defect"), it being understood that in case of dispute between the Parties on the fact whether a defect is a Latent Defect the Contractor will have to demonstrate that the Defect is not a Latent Defect.

25.14 Decennial Liability The Contractor shall remain liable for a period commencing on the expiry of the relevant Defects Liability Period and to expire on the date falling ten (10) years (the "Decennial Liability") after the date of the issuance of the relevant Final Acceptance Certificate for any Defect in, inappropriate design of, or defective or inappropriate selection of materials or workmanship in, the foundations, structures and buildings comprised in the Complex or part thereof, that may prevent or materially impair the use of the Complex or of a part thereof for the purpose it is intended for. The Contractor remains liable in accordance with the standards of skill, care, diligence and fitness for purpose required under this Contract. To the extent of any Defect or issue of whatever nature covered by this Decennial Liability, the Contractor shall repair and make good, at its Costs, such Defect and/or solve such an issue, including the parts of the Complex which have been affected directly by such Defects or issue. If the Contractor fails to perform its obligations set out in this GC 25, the Owner shall be entitled to carry out, or cause to carry out, the requisite remedial works and to recover from Contractor, within fourteen (14) Days from the date of invoice, the full Costs thereof and all damages, liquidated or otherwise, to be paid to the Purchaser or to any other third parties. The liability of the Contractor
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as aforesaid shall apply only in respect of claims notified in writing to Contractor within a period of ten (10) years from the relevant Final Acceptance Certificate. Without prejudice to any other rights available to the Owner under this Contract, the Contractor shall subscribe before the relevant Taking Over at, its costs, an insurance policy with a First Class Insurance Company expiring at the end of a two (2) year period as from the relevant Final Acceptance in which the Owner shall be named as a beneficiary and including adequate cover for the Decennial Liability hereunder. As an alternative to providing such a policy, the Owner will accept a letter of guarantee from the Contractor or its parent company prior to the relevant Taking Over in a form satisfactory to the Owner and providing the same cover as would otherwise be provided by the First Class Insurance Company under this GC. The provisions of this GC25 are without prejudice to any other rights and remedies which the Owner may have whether under this Contract, at law or otherwise.

25.15 Assignment of Sub-Contractors' Obligations Contractor shall ensure that all warranties granted by the Sub-Contractor are legally assignable to the Owner and, as a precondition to the issuance of the relevant Final Acceptance Certificate, shall make a valid assignment of such warranties to Owner. If a Sub-Contractor has undertaken a continuing and assignable obligation to the Contractor for the work executed or the Machinery supplied by such SubContractor, and if such obligation extends beyond the expiry of the Defects Liability Period, the Contractor shall, upon the expiry of the Defects Liability Period (or, if earlier, upon the termination of the Contract), assign the benefit of such obligation to the Owner for its unexpired duration.

25.16 Availability Guarantee The Contractor guarantees the Availability of Unit 1 and Unit 2 in accordance with SC and shall pay to the Owner the relevant Availability Liquidated Damages in case any Availability Guarantee is not met in accordance with same SC.

26

CERTIFICATES AND PAYMENT

26.1

Application for Payment The Contractor may make application to the Owner for Interim Certificates of Payment in respect of: (a) the achievement of Milestones set out in SC in the amounts specified therein, provided always that the application for Interim Certificates of

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Payment is accompanied by the corresponding application for a Milestone Completion Certificate. (b) Works affected by suspension under and in accordance with GC 19.

The Contractor shall list and identify all claims, whether or not related to a Milestone, of which it had knowledge or ought to have had knowledge on or before making an application for Interim Certificate of Payment. No other claims or costs, including but not limited to extension of Time for Completion, indemnification, breach of contract, will be allowed after that date. Not more than one application for Interim Certificate of Payment shall be submitted per month.

26.2

Form of Application Each application for an Interim Certificate of Payment shall be in the form agreed-upon by the Parties and, as applicable, accompanied: (a) (b) in the case of Milestone payments, by such evidence of the proper achievement of the relevant Milestone; in the case of Works affected by suspension under GC 19.1, by such evidence of the value of the Works at the time of suspension as the Owner may reasonably require;

In the case of Milestone payments, the Contractor shall also provide a certification listing and describing the Machinery imported for the period covered by the Milestone for which an interim application for Interim Certificates of Payment is made, such certification containing an indication of the value of such Machinery, except to the extent that such data have already been certified in early documents from the Contractor.

26.3

Issue of Payment Certificate The Owner shall use all reasonable endeavours (in case of Milestone payments) to approve the Milestone Completion Certificate and to issue an Interim Certificate of Payment to the Contractor as soon as possible after receiving an application therefor which the Contractor was entitled to make and if all conditions are met shall issue such Interim Certificate of Payment within twenty eight (28) Days after receiving such an application. Upon receipt of such an Interim Certificate of Payment, the Contractor is entitled to present an invoice according to a model form agreed upon between the Parties to the Owner for the amount ascertained by the Owner in the Interim Certificate of Payment. Each such invoice delivered by the Contractor to the Owner shall be accompanied by the corresponding Interim Certificate of Payment (as issued by the Owner) and shall set forth the following:

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(i)

the aggregate amount due and payable to the Contractor under the provisions of SC 2 and GC 26 or otherwise pursuant to the terms of the Contract; any VAT Taxes payable with respect to the amount invoiced by the Contractor; [intentionally left blank]; and relevant information on the amount and concepts invoiced pursuant to the relevant Laws.

(ii) (iii) (iv)

All invoices delivered by the Contractor to the Owner shall be in form and substance satisfactory to the Owner and shall comply with all applicable Laws.

26.4

Value Included in Certificates of Payment Every Interim Certificate of Payment shall certify the total sum due to the Contractor from the Owner in accordance with the terms of payment in respect of: (a) (b) (c) less: (d) (e) (f) (g) the total of any sums previously certified in certificates of payment; and/or any amounts retained by the Owner pursuant to the Contract; and/or any sum payable by the Contractor to the Owner; and/or any deductions from the Contract Price authorised by the Contract; Milestones achieved; and/or Contract Variation Orders; and/or Machinery and work affected by suspension under GC 19.1;

provided that no sum shall be included in any Interim Certificate of Payment in respect of any portion of the Works, which in the reasonable opinion of the Owner does not comply with the Contract or which has been brought onto the Site to be incorporated in the Complex otherwise than in accordance with the Contract. All payments to be made under the Contract shall be stated and made in United States Dollars or UFs (in the case of the UFs, the amount of the Contract Price stated in UFs shall be paid in the equivalent amount of Chilean Pesos taking into account the value of the UF at the date of the respective invoice), as specified in the SC. Notwithstanding the foregoing, all amounts to be paid under this Contract shall be invoiced in Chilean Pesos, using, in the case of amounts to be paid in USD the applicable Dolar Observado Exchange Rate of the day of the invoice. If on the date of a payment by the Owner, and using the applicable Dolar Observado Exchange Rate of the day of such payment, there is a difference between the amount invoiced in Chilean Pesos and the equivalent in Chilean Pesos of the amount paid in USD, then the Contractor shall send forthwith to the
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Owner a credit note or a debit note, as the case may be, covering such difference.

26.5

[intentionally left blank]

26.6

Adjustment of Certificates If any sum shall become payable under the Contract by the Contractor to the Owner, whether by deduction from the Contract Price or otherwise, the amount thereof shall be deducted in any subsequent Interim Certificates of Payment.

26.7

Corrections to Certificates The Owner may in any application for Interim Certificate of Payment make any correction or modification that should properly be made in respect of any previous certificate and shall so inform the Contractor with the details of and the reasons for such corrections. The Contractor shall promptly issue and deliver to the Owner the respective invoice or other document, as required under the applicable Laws, that result from any such correction or modification.

26.8

Effect of Certificates of Payment No Interim Certificate of Payment other than a Final Certificate of Payment shall be relied upon as conclusive evidence of any matter stated therein, nor shall it affect or prejudice any right of the Owner or the Contractor against the other. In particular, any payment by the Owner shall not constitute approval or acceptance of the Works or any part thereof to which such payment relates and shall not constitute a waiver of any right or remedy arising under this Contract with respect thereto.

26.9

Application for Final Certificate of Payment The Contractor shall make application for the Final Certificate of Payment forthwith after the issue by the Owner of the last Final Acceptance Certificate to be issued under this Contract. If the Contractor fails to apply for the Final Certificate of Payment in accordance with the above, the Owner may request the Contractor to do so. If the Contractor still fails to make an application within a period of twenty eight (28) Days from the issuance of the last Final Acceptance Certificate to be issued hereunder, the Owner shall issue the Final Certificate of Payment for such amount as it considers to be due.

26.10 Value of Final Certificate of Payment


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The Final Certificate of Payment shall certify the total amount payable to the Contractor under the Contract in respect of the Works having regard to any addition to or deduction from the Contract Price provided for in these General Conditions and claims in respect thereof made by the Contractor or the Owner, the total amounts paid on Interim Certificates of Payment previously issued, and the balance payable whether by the Owner to the Contractor or by the Contractor to the Owner.

26.11 Issue of Final Certificate of Payment The Owner shall issue to the Contractor the Final Certificate of Payment within sixty (60) Days after receiving an application which the Contractor was entitled to make and which complies with all the requirements of GC 26.9 (Application for Final Certificate of Payment). Time shall not start to run until the Contractor has provided to the Owner all information in relation to the final account that the Owner may reasonably require.

26.12 Effect of Final Certificate of Payment Subject to GC 26.1, the Owner shall not be liable to the Contractor for any matter or thing arising out of the Contract or the Works unless the Contractor shall have included a claim for it in the application for the Final Certificate of Payment.

26.13 Outstanding Obligations The Final Certificate of Payment shall be without prejudice to any outstanding obligation of Contractor under the Contract for which Contractor remains liable such as, but not limited to GC 8.3, GC 25.13 and GC 25.14.

26.14 Discharge When submitting the application for the Final Certificate of Payment, the Contractor shall submit a written discharge which confirms that the total of the Final Certificate of Payment represents full and final settlement of all monies due to the Contractor under the Contract. Such discharge may state that it shall become effective only after payment due under the Final Certificate of Payment has been made and any bond retained by the Owner has been returned to the Contractor. Such discharge shall equally state that, after payment due under the Final Certificate of Payment has been made and any bond retained by the Owner has been returned to the Contractor, the Contractor shall not bring any claim, whether in court or before an arbitral tribunal, against the Owner for noncompliance with its obligations under this Contract. The discharge will be accompanied by a certification that all Sub-Contractors have been paid and they have no Contractor's Liens against any portion of the Complex or the Site; and a certificate listing each Sub-Contractor under an agreement or agreements with a combined value of five hundred thousand (500,000) United States Dollars or more, which certificate shall be accompanied
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by certificates executed by each such Sub-Contractor unconditionally releasing all Contractor's Liens of such Sub-Contractor for all Works performed and services, materials and equipment supplied by each such Sub-Contractors under or in connection with the Contract.

27

PAYMENT CONDITIONS

27.1

Payment The Contract Price shall be paid as specified in SC and in accordance with the General Conditions.

27.2

Time and place for Payment On and subject to the terms of the Contract, the Owner shall pay to the Contractor the sum certified as due to the Contractor in an invoice within thirty (30) Days after the date of issue thereof. Subject to the terms of the Contract, any payment by the Owner to the Contractor shall be made in immediately available funds in the currency indicated on the invoice by bank transfer to the bank account specified by the Contractor in the corresponding invoice. The date of payment will be the Day on which the Owner has given payment instructions. Any payments by the Contractor to the Owner under the Contract shall be made in immediately available funds no later than 15 Days after the date when due to such account the Owner may specify in writing, free and clear of all set-off, character claims or other deductions whatsoever (whether on account of Taxes or otherwise).

27.3

Delayed Payment If payment of any sum payable under this Contract is delayed, interest shall be payable on the amount unpaid for the period equal to the number of Days elapsed between such due date and the date of payment, at the rate per annum (for a year of 360 days) determined by the non defaulting party (which determination shall be conclusive, save for manifest error) to be the LIBOR for similar amount and period of time (prorated if necessary), such interest rate to be increased with a margin of 2 % per annum. The relevant Party shall be entitled to interest without formal notice and without prejudice to any other right or remedy. Interest shall be calculated as a flat interest, and not as a compound interest. This provision shall also apply in case any payments effectively owed under this Contract by the Contractor to the Owner have not been made on the date as
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specified by the Owner, free and clear of all set-offs, counterclaims or other deductions (in such way that the Owner receives the full amount to which it is entitled).

27.4

Interdependence If there exists monies, owed between the Parties, the Owner reserves the right to offset its own debt to the Contractor against the debt due to Owner by the Contractor, or to exercise its right of deduction or of set off, as if the whole of the monies owed to each other existed under a single contractual commitment. The collection of damages of any kind or other monies due by the Contractor may be done by the Owner by automatic deduction from or set off of the amounts owed to the Contractor.

27.5

No Waiver No payment by the Owner of any portion of the Contract Price shall constitute approval or acceptance of the Works to which the payment relates or a waiver of any right, power or remedy under this Contract with respect thereto.

27.6

Revenues The Contractor agrees that all revenues of any kind, if any, arising out of the use of the Complex or any part thereof shall be property of the Owner and, if received by the Contractor or any of its Sub-Contractors, turned over to the Owner within five (5) Days of receipt thereof.

28

CARE OF THE WORKS Irrespective of the title of property on the Works or part thereof, the Contractor shall take full responsibility for the care, supervision, duly performance, safety, security and adequacy ("Care") of the Works until the relevant Taking Over of the Works as specified in GC 24.2, and (save as expressly provided to the contrary herein) in case any damage or loss shall happen to any portion of the Works from any cause whatsoever, including but not limited to liabilities towards third parties, the same shall be made good by and at the sole cost of the Contractor with due diligence and to the satisfaction of the Owner. The Contractor shall also be liable for any loss of or damage to the Works or part thereof occasioned by it, its personnel or its Sub-Contractors and their personnel in the course of any operation carried out for the purpose of completing any outstanding work or complying with his obligations under GC 25.

29

CONTRACTOR'S AND OWNERS LIABILITY

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29.1

Contractors Indemnity with respect to third parties The Contractor shall assume liability for and shall defend, protect, indemnify and keep indemnified, save and hold harmless the Indemnified Parties from and against any and all liabilities, claims, demands, suits, proceedings, actions, causes of action, costs (including reasonable attorney's fees), damages, charges, expenses, losses or judgments of whatever kind and nature in respect thereof or in relation thereto with respect to damages or losses to property of third parties and/or injury (including death) to persons that may be imposed on, suffered or incurred by or asserted against any Indemnified Parties and in any way relating to: (i) (ii) any breach by the Contractor of any of its obligations under the Contract; or any negligent act or omission, actionable wrong or breach of statutory duty or duty of care committed by the Contractor, its employees, agents or any of its Sub-Contractors; or any failure of the Contractor, its employees, agents or any of its SubContractors to comply with the Laws and the Consents and against all claims, proceedings, damages, costs, charges and expenses whatsoever in respect thereof or in relation thereto (except any compensation or damages for or with respect to injuries or damage to persons or property resulting solely from any act or neglect of the Owner, its agents, servants or other contractors, not being employed by the Contractor); or the Contractor's performance of the Works or part thereof; or liens, claims or similar encumbrances arising in connection with the Works or part thereof.

(iii)

(iv) (v)

This indemnification obligation shall include but not be limited to claims, damages, losses and expenses which are attributable to bodily injury, personal injuries, sickness, disease or death, or to injury to or destruction of physical property.

29.2

Contractor's Liability The Contractor shall indemnify Owner for any costs (including reasonable attorneys fees), damages, charges, expenses and losses of whatever kind and nature incurred or suffered by the Owner in respect of or in relation to: (i) any breach by the Contractor of any of its obligations under the Contract to the extent that there are no other remedies expressly set out in the Contract for such breaches; or any negligent act or omission, actionable wrong or breach of statutory duty or duty of care committed by the Contractor, its employees, agents or any of its Sub-Contractors; or any failure of the Contractor, its employees, agents or any of its SubContractors to comply with the Laws and the Consents and against all claims, proceedings, damages, costs, charges and expenses whatsoever
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in respect thereof or in relation thereto (except any compensation or damages for or with respect to injuries or damage to persons or property resulting solely from any act or neglect of the Owner, its agents, servants or other contractors, not being employed by the Contractor); or (iv) (v) the Contractor's performance of the Works or part thereof; or liens, claims or similar encumbrances arising in connection with the Works, except liens or encumbrances solely attributable to the Owner.

29.3

Limitation of Contractor's Liability Except as detailed below and without prejudice to any indemnity obligations of Contractor pursuant to this Contract, the Contractor's liability under the Contract is limited to the amount of the Contract Price. The limitation on the Contractor's liability under this GC 29.3 shall be in each case exclusive of: (i) any liability which is found in an Expert Determination pursuant to GC36, or in a final judgment or arbitral decision to arise out of the Contractor's wilful default, intentional act or omission, Gross Negligence, fraud or mispresentation; any liability arising out of the Contractors failure to comply with the requirements of any applicable laws (including the Laws and the Environmental Law) and Consents; any liability to hold Owner harmless against any claims of third parties for personal injury or property damage; any liability arising out of the Contractors failure to comply with its undertakings under GC 30; any liability to the extent satisfied by the proceeds of any insurance policy held by the Contractor or the Owner.

(ii)

(iii) (iv) (v)

The Contractor shall not be liable for any indirect or consequential damages or losses (including loss of profit) or punitive or exemplary damages that may be suffered by the Owner in connection with this Contract and/or the performance of the Works or part thereof except: (a) (b) where such damages or losses are caused by Gross negligence or wilful misconduct of the Contractor; or where the Contractor is expressly liable for such damages or losses under the terms of the Contract.

29.4

Limitation on Owner's Liability Save as provided in this GC29.4, the Owner's liability under the Contract is limited to the amount of the Contract Price.

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The limitations on the Owner's liability under this GC 29.4 shall be in each case exclusive of: (i) any liability which is found in an Expert Determination pursuant to GC36 or in a final judgment or arbitral decision to arise out of the Owner's wilful default, intentional act or omission, Gross Negligence, fraud or misrepresentation; any liability arising out of the Owner's failure to comply with the requirements of any applicable Laws (including any environmental Laws) and Consents; The Owner shall not be liable for any indirect or consequential damages or losses (including loss of profit) or punitive or exemplary damages that may be suffered by the Contractor in connection with this Contract and/or the performance of the Works except: (a) (b) where such damages or losses are caused by Gross negligence or wilful misconduct of the Owner; or where the Owner is expressly liable for such damages or losses under the terms of the Contract.

(ii)

(iii)

30

INSURANCE

30.1

Contractors Insurance

30.1.1 Requirement to Procure and Maintain Without prejudice to its obligations and responsibilities under this Contract, Contractor shall, prior to undertaking the supply of any goods and/or services and/or Work on the Site or part thereof, at its sole cost and expense, subscribe and maintain in place for the period required pursuant to Section 30.1.2 (including the respective Defects Liability Periods and any extension thereof) insurance cover (Contractors Insurance) in accordance with this Section 30.1 and as further detailed in Section l of Annex GC 30 (Insurance Requirements) and such other insurance cover as Contractor is required to maintain pursuant to any applicable law, Good Engineering and Construction Practices or Good Utility Practice.

30.1.2 Term of Insurance All insurance cover taken out by Contractor shall commence on and including the Commencement Date and shall be maintained until and including the latter of (i) the date on which all Contractors Equipment has been finally removed from the Site, (ii) the date on which Contractor, all Subcontractors and/or all their respective Affiliates, employees, servant, agents and representatives have finally
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left from the Site and (iii) the date of expiry of the last Defects Liability Period (and any extension thereof) to expire.

30.1.3 Additional Insured Parties All insurance covers taken out by Contractor shall, where indicated in Annex GC 30 (Insurance Requirements), name as additional insured as far as possible and legally permitted, each of Contractor, Owner, the Lenders, the Subcontractors and any other relevant parties as may be agreed upon by the Parties all for their respective rights and interests. All insurance covers taken out by Contractor shall contain as far as possible and legally permitted an explicit waiver of subrogation in favour of such additional insured parties and their respective consultants, their officers, their directors and their employees and any other relevant parties as may be agreed upon by the Parties.

30.1.4 Insurance Companies Contractor shall use, and procure that Subcontractors use, insurance companies, brokers and agents reasonably satisfactory to Owner and, if applicable, the Lenders.

30.2

Owner's Insurance up to the Actual Completion Date

30.2.1 Requirement to Procure and Maintain Without prejudice to the obligations and responsibilities of the Contractor under this Contract, Owner shall, at its sole cost and expense, subscribe and maintain in full force and effect from and including the earliest of (i) date of commencement of the Works on the Site and (ii) with respect to marine transit and marine delay in start up only first ex-works delivery of Machinery destined for transportation to the Site and destined for incorporation in the Works until the Actual Completion Date, insurance cover in accordance with this Section 30.2 and as further specified in Section 2 of Annex GC 30 (Insurance Requirements) and such other insurance cover as Owner is required to maintain pursuant to any applicable Law (Owners Insurance).

30.2.2 No Effect on Duty of Disclosure The procurement by or through Owner of the insurances pursuant to this Section 30.2 shall not relieve Contractor, the Subcontractors or any of the relevant suppliers of the independent duty of disclosure applicable to all insured parties by law or contract.

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30.2.3 Scope of Cover Owner does not warrant that the insurances required to be procured and maintained pursuant to this GC30 covers to the full extent the exposure and responsibilities assumed by Contractor under this Contract. Contractor shall procure and maintain, at its sole cost and expense, such additional insurance cover as it considers necessary for the protection of its interests.

30.2.4 Marine Cargo and Marine Delay in Start-Up Insurance The following provisions shall apply in respect of the marine cargo and marine delay in start-up insurance to be maintained by Owner pursuant to this Section 30.2 and Annex GC 30 (Insurance Requirements): a) The transportation of certain critical items shall be subject to a customary critical items survey warranty or condition and a critical items separation warranty or condition. Owner shall appoint, on behalf of the insurers, a recognised surveying body which shall review, inspect, comment and approve the packaging, load plans, stowage, conveyances and routing of the critical items from the place of manufacturing to the Site. Contractor shall comply with all reasonable recommendations of the surveying body and shall immediately notify Owner of any unreasonable recommendation. Contractor agrees and acknowledges that the marine cargo and marine delay in start-up insurance cover to be procured and maintained by Owner pursuant to this Section 30.2 and Annex GC 30 (Insurance Requirements) could be invalidated by a failure to adhere to each of the critical items survey warranty or condition and the critical items separation warranty or condition and shall ensure that the transportation of the relevant critical items shall not commence, or in case of transit continue, until the surveying body has issued an inspection certificate approving the packing, conveyance, loading, stowage and routing of such critical items. Contractors compliance with the recommendations of the surveying body or the issuance of an inspection certificate shall not relieve Contractor of its responsibility for risk of loss or damage under this Contract. Contractor shall provide reasonable advance notice to Owner, or the surveying body assigned thereto by Owner, of the dates of packing and commencement of transportation of the relevant critical items. In case the surveying body does not inspect within the seven (7) Day period immediately prior to the scheduled date of the ship's leaving or does not issue an inspection certificate within two (2) Days following the survey, Contractor is entitled to commence or continue the transit and the approval or certificate shall be deemed to be issued, but the surveying body shall be permitted, if requested in writing, to attend the vessel or conveyance at any intermediate port or other place of transit and any reasonable recommendations of the surveying body made at such any intermediate port or other place of transit shall be complied with, provided that such attendance at the intermediate port or other place of transit does not interfere with the Contractors time schedule.
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b)

c)

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30.3

Information Provision The Parties shall provide each other with all assistance and disclose all information, including but not limited to information regarding the design, engineering, manufacturing, operational history and transportation of the Machinery to be incorporated in the Project, required for the setting up of the insurance underwritten in relation to the Work. The Contractor shall also disclose in a timely manner (i) all information which the Owner's insurance broker or adviser and the Contractors insurance officer mutually advise should be disclosed; (ii) all technical information required to be provided to the insurer(s) at the request of the Contractors insurance officer or pursuant to the provisions of this Contractor; and (iii) any problem or delay that is deemed material to the insurance in the opinion of the Contractors insurance officer.

30.4

Unavailability of Insurance The financial consequences of damages and claims not insured or not recovered from the insurers (including the deductibles) shall be borne by Contractor or Owner in accordance with their responsibilities and liabilities under this Contract.

30.5

Subcontractors Contractor shall either insure itself or impose on its Subcontractors the same obligations as have been imposed on it pursuant to this Contract, covered by the same insurance requirements. Contractor shall be liable for and shall indemnify Owner, against liability for damages and costs arising out of the negligence of Contractor or its Subcontractors to comply with the obligations under this GC 30 or under any policy of insurance procured pursuant to this GC 30.

30.6

Evidence of Insurance Prior to the earlier of (i) the commencement of any Works on the Site and (ii) the first ex-works delivery of Machinery destined for incorporation in the Works, each Party shall provide to the other Party and, where required in writing, to relevant Public Authority, insurance certificates evidencing the insurances procured by it and, if specifically requested by the other Party, provide reasonable evidence that the premiums have been paid in respect of such insurances.

30.7

Copies of Owner Insurances Owner shall provide Contractor with a copy of the terms and conditions of the insurance policies to be procured and maintained by Owner pursuant to this GC 30 and Annex GC 30 (Insurance Requirements) which are relevant to Contractor and Contractor shall have the right to comment on such terms and conditions for a period of sixty (60) Days from receipt of such copy following which period Contractor shall not be entitled to claim any non-conformity of the policy with the
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provisions of this GC 30 or Annex GC 30 (Insurance Requirements). In the event Contractor provides comments within such sixty (60) Day period, the Parties shall use their best efforts to work out a practical solution acceptable for both of them, provided however that Owner shall not be under any obligation to obtain coverage broader or in excess of that required by this GC 30 and Annex GC 30 (Insurance Requirements).

30.8

Changes to Works Contractor shall notify the insurers of changes in the nature, the extent and/or the duration of the Work, and shall ensure the adequacy of the respective insurance cover as required by this GC 30 and Annex GC 30 (Insurance Requirements) and compliance with applicable insurance policies, endorsements, procedures, terms and conditions at all times.

30.9

Notification of Claim Contractor shall notify Owner and confirm in writing all incidents giving rise to a possible claim under the insurance policies procured and maintained by the Parties pursuant to this GC 30. Contractor shall with respect to claims under the policies referred to in paragraphs 2.1, 2.2 and 2.3 of Annex GC 30 (Insurance Requirements) promptly notify insurers and the appointed loss adjusters of any actual or, upon obtaining knowledge thereof, potential casualty or claim under such policies. For incidents involving physical loss or damage only, and provided the estimated amount thereof does not exceed ten millions Dollars (USD10,000,000), and unless Owner notifies Contractor to the contrary, Contractor shall have the right to conduct negotiations and settle claims directly with the insurers and their appointed loss adjusters, in each case subject to Owners prior written consent (which consent shall not be unreasonably withheld) as to the amount of such settlement. For incidents involving physical loss or damage estimated to exceed ten millions Dollars (USD10,000,000) or incidents involving a potential delay to the Project, negotiations with insurers and loss adjusters shall be conducted jointly with Owner, Contractor, the insurers, their appointed loss adjusters and the settlement of any claim shall be subject to Owners prior written approval (which consent shall not be unreasonably withheld).

30.10 Failure to Insure If either Party fails to effect and keep in force any of the insurance policies required under this Contract, then the other Party may effect and keep in force any such insurance and pay any premiums that may be necessary for that purpose and deduct the amount so paid from any payment due to the defaulting Party under this Contract.

30.11 Approval of Insurers


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All insurance policies subscribed by each Party shall be effected with independent First Class Insurance Companies approved by the other Party, which approval shall not be unreasonably withheld or delayed.

30.12 Cancellation/Alteration Notwithstanding any provision in the policies, the policies subscribed by either Party pursuant to hereof may not be cancelled, allowed to lapse or materially changed by the insurer without giving thirty (30) Days prior written notice to the other Party, or in the case of cancellation for non-payment of premium, ten (10) Days prior written notice to such other Party.

30.13 Insurance Proceeds Unless otherwise agreed upon by Owner, insurance proceeds of the Owners Insurances shall be payable in due course to Owner or, in accordance with the Finance Agreements, if applicable, to the Lenders, who shall distribute them in accordance with the Finance Agreements.

30.14 Industry Meanings Terms used in this GC 30 and not otherwise defined in this Contract shall have the meaning generally ascribed to them in the international insurance industry.

30.15 Requirements of Financing Parties The insurance covers, deductibles, endorsements and other terms procured by Owner and Contractor in accordance with this GC 30 and GC 30 (Insurance Requirements) shall comply or be modified, if needed, at Owners costs, to comply with the requirements of the Lenders.

30.16 No Effect on Liability The amount and scope of any insurance policy required to be procured pursuant to this GC 30 and/or the absence of any such policy shall not reduce or otherwise act as a limitation or extension of either Partys liabilities or responsibilities under this Contract.

31

CONTRACT VARIATIONS

31.1

Owner's Power to Vary

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The Owner shall be entitled to require the Contractor to make alterations to the Works or part thereof and to the manner of their execution, including, without limitation, any of the following: (a) (b) (c) (d) (e) increase or decrease the quantity of any portion of the Works included in the Contract; omission of any such portion; change the character or quality or kind of any such portion; change the levels, lines, position and dimensions of any part of the Works; and execute additional work or service or supply additional Machinery;

and no such variation shall in any way vitiate or invalidate for Contract and in carrying out such variation the Contractor shall be bound by the Contract Documents, subject to the variation itself, as if the variation was originally stated in the Contract Documents. (a Works Variation)

31.2

A General Variation Upon the occurrence of an event which the Contractor considers will cause the Contractor to incur additional Costs or delay in completing the Works which it would not have incurred but for such event, the Contractor may apply to the Owner for variation to Contract Price and/or extension of the relevant Time for Completion provided that it is expressly authorized to do so under the terms of the Contract (a General Variation). The Contractor shall, as soon as it is aware (and in any event no later than 2 Days after becoming aware) that any of the events set out at this GC 31.2 have occurred notify the Owner and provide the Owner with as much detail as is available at that time as to the nature of the relevant event and the likely impact on the performance of the Works or a part thereof and the Contract. Where the Contractors notice is in respect of a Delay Event as referred to in GC 7.3, it shall include an explanation of the event, the circumstances under which the Delay Event took place and the preliminary envisaged consequences of such event on the timing contemplated under the Contract. The Contractor shall only be entitled to apply for a General Variation if it delivers to the Owner a written notice of any claim within the period specified above.

31.3

Notices and information Upon: (a) (b) receipt by the Contractor of a written notice of a Works Variation from the Owner pursuant to GC 31.1; or receipt by the Owner of a written notice from the Contractor seeking a General Variation pursuant to GC 31.2;
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the Contractor shall prepare and deliver to the Owner within 10 Days of receipt or deliver, as the case may be, of any such notice, a written statement setting out in such detail as the Owner may reasonably require: (i) (ii) (iii) (iv) the Contractors estimate of the net increase or decrease in the Contract Price together with detailed evidence of how estimate was established; any requisite adjustments to the Milestones and the Milestone payment dates, the Time for Completion and the Project Schedule . the effect that the Variation will have on the ability of the Contractor to achieve the Guaranteed Performances or the Guaranteed Values, whether, in the reasonable opinion of the Contractor, a Works Variation or a Change in Law is likely to prevent or prejudice its ability to fulfil any of its obligations under the Contract, any other information as the Owner may reasonably require.

(v)

Where the statement relates to a Delay Event as referred to in GC 7.3, it shall specify in detail and as precisely as possible the following: (i) the likely period of delay; (ii) the Delay Event causing the delay; (iii) the temporary records that the Contractor will maintain to substantiate its claim for an extension of time; (iv) any actions the Contractor has taken to prevent the event; (v) any measures the Contractor has adopted and further proposes to adopt in order to minimize or remove the actual or anticipated delay and any actions adopted or to be adopted to mitigate to the maximum possible extent the consequences of the delay; and (vi) further particulars of the consequences of the delay as the Contractor becomes aware. Within fourteen (14) Days from the receipt of the above statement where it relates to a Delay event, the Owner shall notify the Contractor whether or not, as the case may be, the Delay Event has caused a delay to the Completion of Unit 1 (including the Common Plant Facilities) and/or Unit 2 Works within the relevant Time for Completion and if there is such a delay shall grant the Contractor an extension of time to the relevant Time for Completion necessary to ensure that the delay caused by the Delay Event does not thereby reduce the relevant Time for Completion available to the Contractor. 31.4 Specific requirements for a Variation Nothing in this GC 31 shall prevent the Contractor from making proposals to the Owner for a Works Variation, but no Works Variation so proposed shall be carried out by the Contractor except as directed in writing by the Owner through the issuance of a Variation Order according to the procedure set out in this GC 31. The Contractor shall only be entitled to a General Variation where it has complied with the procedures set out in GC 31.2 and 31.3. No Variation instructed by the Owner or requested by the Contractor, as the case may be, shall result in an addition to the Contract Price or an extension of the relevant Time for Completion if instructed or requested as a result of some act, omission or default on the part of the Contractor.
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The Contractor shall use its best efforts to mitigate and minimize the delay to the relevant Time for Completion which may be caused by a Variation and any increase in the Cost to the Contractor of completing the Works or part thereof which may be caused by any Variation.

31.5

Evaluation of Variations (a) The Owner and the Contractor shall each use their reasonable endeavours to agree upon the effects of a Variation on the Contract Price, any alteration of any Time for Completion or Project Schedule, the Milestones or the Milestone payment dates, or any alteration of the scope of the Works or part thereof, warranties or guarantees as soon as possible after the delivery of the statement provided by the Contractor in accordance with GC 31.3 or the notification by the Owner (as the case may be). Where all of the matters affected by the Variation have been agreed by the Parties, then Owner shall issue a Variation Order which shall set out the agreement reached and which shall be signed by both Parties, and the Contract shall be amended accordingly. In the event that the Parties do not agree on the matters contained in the statement provided by the Contractor in accordance with GC 31.3 or the notification by the Owner (as the case may be) in a reasonable time, the Owner shall be entitled, at its discretion, (i) to request the Contractor to execute the Variation on a cost plus fee basis where, for the purposes of this GC 31.5 (b), (a) cost shall include direct equipments, services, works and expenses to be performed and/or incurred by the Contractor in connection with the performance of the Variation (excluding overheads and margins of any type) and (b) fee shall mean [___] % of the costs (as defined in above (a)) effectively supported by the Contractor in performing the Variation (such fee covering the Contractors contingencies, overheads and profit margins) or (ii) to proceed as set out in (c) or (d) below, as the case may be. If the Parties do not agree on the matters contained in the statement provided by the Contractor in accordance with GC 31.3 or in the notification by the Owner (as the case may be) in a reasonable time and if above GC 31.5 (b) (i) does not apply, where the Variation is a General Variation, or a Works Variation for which the Owner is not entitled to issue a draft Works Variation in accordance with GC 31.5(d), either Party may refer the dispute for resolution in accordance with GC36 without prejudice to the Contractors obligation to continue to perform the Works in accordance with the Contract. If the Parties do not agree on the matters contained in the statement provided by the Contractor in accordance with GC 31.3 or in the notification by the Owner (as the case may be) in a reasonable time in the opinion of the Owner, the Owner may and if above GC 31.5 (b) (i) does not apply, the Owner may, where the Variation is a Works Variation, withdraw the Works Variation or where a Works Variation is required as a result of a change in Law or where the Works Variation has an impact on ability of the Contractor to achieve the respective Taking Over within the
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(b)

(c)

(d)

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relevant Time for Completion issue a draft Variation Order and instruct the Contractor in writing to proceed with the Variation and the Contractor shall be obliged to proceed with the Works in accordance with the draft Variation Order, and the following will apply. The draft Variation Order shall set out all of the amendments to the Contract which the Owner, acting reasonably considers should be made to the Contract as a result of the Works Variation including the amount to be added to or deducted from the Contract Price and any extension to the respective Time for Completion determined in accordance with GC 7.3. If the Contractor does not agree with any determination of the Owner in the draft Variation Order, the Contractor is entitled to submit the dispute for resolution in accordance with GC36. When the matters in the draft Variation Order are finally agreed or determined, the Owner shall issue a final Variation Order that shall be signed by both Parties, and the Contract shall be amended accordingly.

31.6

Contractor's Records of Costs and Time Where the Owner has issued a draft Variation Order prior to the determination of the value thereof or of any other effects or, in respect of a General Variation, from the date that the Contractor issues the notice to Owner in accordance with GC 31.2 in respect thereof, the Contractor shall in each case keep records of the Cost of implementing the Variation or the effects of the General Variation, as the case may be, and of any circumstances that may have effects on other contractual obligations. Such records shall be open to inspection by the Owner at all reasonable times until final settlement of the matter.

31.7

Notice and Confirmation of Variation The Contractor shall not implement any Variation which requires a change in the Works or a part thereof until a Variation Order has been signed by both Parties or a draft Variation Order has been issued by the Owner in accordance with GC 31.5.

31.8

Progress with Variations The Contractor shall upon the signing of a Variation Order immediately proceed to implement such Variation Order.

32

INTELLECTUAL PROPERTY RIGHTS

32.1

Contractor Indemnity The Contractor warrants that it has obtained, granted by third parties for the use by the Contractor during the Works or a part thereof, and complied with, and will maintain in full force and comply with, any patent, licence, intellectual property
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right, registered design, copyright, trade mark or trade name or industrial property of any piece of Machinery and that such third parties agree to the use of the same by the Owner for the life time of the Complex. Contractor shall defend, indemnify and hold harmless the Indemnified Parties against all claims, damages, losses, liabilities and expenses (including court costs and reasonable legal fees) arising from any Claim or legal action for unauthorised disclosure or use of any trade secrets, proprietary rights or intellectual property rights, or of patent, copyright or trademark infringement arising from Contractors performance (or that of any Sub-Contractor) of this Contract and asserted against an Indemnified Party that (a) concerns any Machinery, process or other items provided or employed by Contractor or any Sub-Contractor under this Contract; or (b) is based upon the performance of the Work by Contractor or any Sub-Contractor, including the use of any tools, implements or construction by Contractor or any Sub-Contractor; or (c) is based upon the design or construction of any item or unit specified by Contractor under this Contract or the operation of any item or unit according to directions embodied in Contractor Documents.

32.2

Removal of Injunctions If Owner is enjoined from completion of the Project or any part thereof, or from the use, operation or enjoyment of the Project or any part thereof as a result of any Claim, legal action or litigation of the type described in GC 32.1 above, Contractor shall promptly attempt to have such injunction removed at no cost to Owner, or take other action so that Owner may continue its completion, use, operation and enjoyment of the Project.

32.3

Limitations and Conditions In the event of any claim or legal action for infringement hereunder, Contractor shall have the right, at its option and at its sole expense, either to procure for Owner the rights alleged to have been infringed or to modify the infringing item in a way satisfactory to Owner, in the reasonable exercise of its judgment, so that it becomes non-infringing.

32.4

Environmental Claims Contractor shall indemnify and hold harmless the Indemnified Parties against all Claims, damages, losses, liabilities and expenses (including court costs and reasonable legal and advisors fees) arising from any Claim in relation to environmental or similar conditions at, on or under the Complex, in relation to or arising out of the discharge, release, storage, treatment, generation, disposal or escape of pollutants or other toxic or Hazardous Materials arising out of or in connection with the Works or any part thereof attributable to Contractor and/or Sub-Contractor and whilst in the care, custody and control of Contractor, or the contamination of the soil, air, surface water or ground water at, on or around the Complex arising out of or in connection with the Works or any part thereof attributable to Contractor and/or Sub-Contractor, and against the Cost of Owner
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complying with any pollution, abatement, replacement, removal or other decontamination or monitoring obligations with respect to such matters required from it by Public Authorities or Laws or the Environmental Permit.

32.5

Claims in respect of Patent Rights In the event of any claim being made or action brought against the Owner arising out of the matters referred to in this GC, the Contractor shall be promptly notified thereof and may, always acting in the Owner's best interests, at its own expense, conduct all negotiations for the settlement of the same and any litigation that may arise therefrom. The Owner shall not, unless and until the Contractor shall have failed within a reasonable time after having been informed by the Owner to take over the conduct of the negotiations or litigation, make any admission which might be prejudicial thereto. The conduct by the Contractor of such negotiations or litigation shall be conditional upon the Contractor having first given to the Owner any reasonable security that may be from time to time required by the Owner to cover the amount ascertained or agreed or estimated, as the case may be, of any compensation, damages, expenses and costs for which the Owner may become liable. The Owner shall, at the request of the Contractor, afford all available reasonable assistance for the purpose of contesting any such claim or action, and shall be repaid all reasonable expenses incurred in so doing.

33

FORCE MAJEURE

33.1

Definition of Force Majeure Subject to the provisos below, Force Majeure Event means any unavoidable and unforeseeable event beyond the reasonable control of and without the fault or Negligence of the Party affected (and which, in the case of the Contractor, would not have been avoided by the use of Good Engineering and Construction Practices or Good Utility Practices) which is the sole and direct cause which prevents the performance by a Party of any material obligation hereunder, provided however that such circumstance could not have been prevented, overcome, mitigated or remedied, in whole or in part, by the affected Party through the exercise of diligence and reasonable care, it being understood that reasonable care includes acts or activities to protect the part of the Works already done from a casualty event, which are reasonable in light of the likelihood of such event, the probable effect of such event if it should occur and the likely efficacy of the protection measures. Force Majeure Events shall include without limitation (and to the extent that the foregoing conditions have been met): (a) (b) war and other hostilities, (whether war be declared or not), invasion, act of foreign enemies, mobilization, requisition or embargo; ionizing radiation or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel, radioactive toxic explosives, or other hazardous properties of any explosive nuclear assembly or nuclear components thereof;
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(c) (d)

rebellion, revolution, insurrection, military or usurped power and civil war; riot, commotion or disorder, strikes, industrial and labour disputes, except to the extent affecting solely the employees of the Contractor or any SubContractor; storms, tempest, hurricanes, floods, lighting, seismic events causing at the location of the Complex a peak ground acceleration equal to or greater than 0.55g (for the purpose of this GC 33 1 (e), the peak ground acceleration shall be measured by accelerometer(s) located at ground level), and other natural disasters.

(e)

Force Majeure Events shall expressly not include the following conditions, except and to the extent that they result directly from a Force Majeure Event: (i) late or non-delivery of Machinery equipment (including Contractor's Equipment), materials, Spare Parts or consumables (including Site facilities); a delay in the performance of any Sub-Contractor; or normal wear and tear or random flaws in Machinery or breakdowns in equipment; or seismic events causing at the location of the Complex a peak ground acceleration lower than 0.55g (for the purpose of this GC 33, the peak ground acceleration shall be measured by accelerometer(s) located at ground level.

(ii) (iii) (iv)

33.2

Effect of Force Majeure So long as the affected Party has at all times since the occurrence of the Force Majeure Event complied with the obligations of GC 33 and continues to so comply, then the affected Party shall not be liable for any failure in performing its obligations under or pursuant to this Contract during the existence of a Force Majeure Event to the extent that such a failure (i) is caused by such Force Majeure Event and (ii) could not have been mitigated by the Contractor. A Force Majeure Event shall not entitle the Contractor to any increase or modifications of the Contract Price and shall only result in an extension of the relevant Time for Completion to the extent set forth and in accordance with GC 7.3.

33.3

Notice of Occurrence (i) If either Party considers that any Force Majeure Events have occurred which may affect performance of its obligations, then it shall notify the other Party as soon as possible but within a maximum of two (2) Working Days after such Party becomes aware of the Force Majeure Event or should reasonably have become aware of the Force Majeure Event. Within five (5) Working Days after the affected Party became aware of should reasonably have become aware of such Force Majeure Event, the
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affected Party will submit a notice to the other Party giving written particulars of the Force Majeure Event and its effect upon its performance under the Contract and, where known, the expected duration of the failure to perform. (ii) In the case of the Contractor, within ten (10) Days after giving the above notice the Contractor shall prepare and deliver to the Owner an appraisal report on the effects of the Force Majeure event ("Force Majeure Report"). The Force Majeure Report shall: (a) (b) (c) specify the Force Majeure Event; describe the damage to and/or other effects on the Works resulting from the Force Majeure Event; provide a good faith estimate (in each case to the extent applicable in the circumstances) of: (i) the costs to restore the Works to their condition immediately prior to the Force Majeure Event and the associated delay costs; the time it will take to restore the Works to such condition; the liquidated damages and/or the insurance proceeds, if any that may be recovered by the Contractor from any third parties, the date or dates on which such proceeds may be recovered, and the particular purposes for which such proceeds are required to be applied; and the effect which the relevant Force Majeure Event is likely to have upon any other contract relating to the Project;

(ii) (iii)

(iv) (d)

give a recommendation as to whether or not (a) the restoration of the Works should be commenced or (b) completion or continued operation of the Works is technically or financially viable, with, in each case, the reasons for such recommendation; and include all relevant supporting documentation.

(e) (iii)

In addition to the Force Majeure Report, the Owner may request, and the Contractor shall promptly provide, such additional information, including but not limited to financial and other information pertaining to the Force Majeure Report, as may be deemed necessary, in Owners opinion, to assess the situation. The Party not claiming Force Majeure shall within forty (40) Days of receipt of a Force Majeure Report notify the other Party of its agreement or objection to the terms of the Force Majeure Report ("Objection Notice"). The Party claiming Force Majeure shall have forty (40) Days from the date of an "Objection Notice" to appeal the decision by notice in writing to the other Party (an "Appeal Notice") failing which the Objection Notice shall be final and binding.
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(iv)

(v)

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(vi)

Following receipt of an Appeal Notice the Parties shall negotiate in good faith to determine the nature and effects, if any, of the claimed event of Force Majeure. If the Parties cannot reach agreement within thirty (30) Days of the Appeal Notice then either Party may refer the disagreement to an Expert in accordance with the provisions of GC 36. Any Expert so appointed shall determine whether or not the circumstances and effects thereof set out in the Force Majeure Report constitute an event of Force Majeure. In accordance with GC 36, arbitration proceedings may be started concerning any dispute as to whether or not there is an event of Force Majeure.

33.3bis

Cessation of Force Majeure

The Party claiming Force Majeure shall give written notice to the other Party of (a) the cessation of the relevant Force Majeure, and (b) the cessation of the effects of such Force Majeure on the performance by such Party of its obligations under the Contract as soon as practicable after becoming aware of each of (a) and (b) above but in each case within three (3) Days after becoming so aware. Thereafter the affected Party shall resume performance of its obligations excused as a result of Force Majeure.

33.4

Performance to Continue Upon the occurrence of any circumstances of Force Majeure the Contractor shall endeavour to continue to perform its obligations under the Contract to the extent possible under existing circumstances. The Contractor shall notify the Owner of the steps it proposes to take including any reasonable alternative means for performance which is not prevented by Force Majeure. The Contractor shall not take any such steps unless directed so to do by the Owner. The Contractor shall be entitled to such extension of the relevant Time for Completion as shall be reasonably required to properly reflect any delay to any part of the Works caused by the circumstances of Force Majeure. The Party affected by the Force Majeure shall make all reasonable efforts to remedy expeditiously the circumstances constituting the Force Majeure (if practicable) and to mitigate the adverse effects of the Force Majeure.

33.5

Termination in Consequence of Force Majeure If circumstances of Force Majeure have occurred and have resulted in a suspension of the Works that shall continue for period of 365 (three hundred and sixty five) Days then, notwithstanding that the Contractor may by reason thereof have been granted an extension of any relevant Time for Completion, either Party shall be entitled to serve upon the other an additional twenty eight (28) Days notice to terminate the Contract. If at the expiry of that period, the Force Majeure Event is still in effect, the Contract shall terminate. In the event of a termination of this Contract due to Force Majeure, the Contractor shall be entitled to the payment of the values set out in GC 35.4 a) to e).
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34

CONTRACTOR'S DEFAULT

34.1

Defaults If the Contractor shall: (a) (b) assign the Contract or sublet the whole of the Works without the consent of the Owner, or without reasonable excuse suspend the progress of the Works relating to Unit 1 (and the Common Plant Facilities) and/or Unit 2 for twenty one (21) Days or more or postpone the start of the Works or part thereof for twenty one (21) Days or more following the giving by the Owner of the Notice to Proceed, or fail to execute the Works (or part thereof) in accordance with the Contract, or fail to proceed with the Works relating to Unit 1 (and the Common Parts Facilities) and/or Unit 2 with due diligence, or fail to accelerate the progress of the Works (or part thereof) as result of which there is no reasonable prospect of Taking Over being achieved within the relevant Time for Completion, or fail to carry out its obligations under the Contract in such a way as to affect adversely the carrying out of the Works (or part thereof), or commit a breach of any material obligation under the Contract or commit a persistent or repeated breach of any obligation under the Contract; for the avoidance of doubt, and without limiting the foregoing, the following shall be considered as a material breach under this Contract: failure to maintain any bond in full force and effect in accordance with the provisions of the Contract; or failure to make a payment to the Owner if and when it is due under the terms of the Contract, or failure to comply with its obligations under GC 30, or [failure to maintain the parent company guarantee to be provided pursuant to Section 3.1 of the Master Agreement in full force and effect,] or

(c)

(d)

(e) (f)

abandon or repudiate the Contract, or fail to have the material Consents and insurances (as per GC 30) in full force and effect within the prescribed time and to maintain them in effect thereafter according to the Contract, or become or is adjudged bankrupt or insolvent, have a receiving order made against it or compound with its creditors, or carry on business under a receiver, administrator, trustee or manager for the benefit of its creditors or go into liquidation (any of such circumstances being hereinafter referred to as a "default"), or any such default occurs in relation to the company of the [Contractor]
101

(g)

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group providing the parent company guarantee referred to in Section 3.1 of the Master Agreement, then the Owner may give a twenty one (21) Days notice to the Contractor of its intention to terminate the whole or part of the Contract in accordance with the provisions of this GC. In the event that the default is listed in GC 34.1 (b) or (c) or (d) or (f), the Owner may (at its sole discretion) serve such notice of intention to terminate either in relation to the whole Contract or the part of the Contract relating to Unit 1 (and the Common Plant Facilities) or the part of the Contract relating to Unit 2. Upon the expiry of such notice and unless during such twenty one (21) Days period the Contractor has remedied the default then without prejudice to any other remedy under the Contract, the Owner may forthwith terminate the Contract (or the relevant part thereof), enter the whole or the relevant part of the Site and expel the Contractor therefrom but without thereby releasing the Contractor from any of its obligations or liabilities which have accrued under the Contract and without affecting the rights and powers conferred by the Contract on the Owner. For the avoidance of doubt, the remedies and indemnities provided in this GC 34 shall be without prejudice to the right of the Owner to claim other indemnities, or bring further claims (including in respect of Liquidated Damages), insofar as it is entitled to do so by law or pursuant to any provision of this Contract. Upon such termination, the Owner may itself complete the Works (or relevant part thereof) or may engage any other contractor to do so for the Owner's own benefit, and the Owner shall have the free use of any Contractor's Equipment for the time being on the Site. Works and Machinery will then automatically become the property of the Owner, unless the Owner decides otherwise. The Owner will be entitled to claim from the Contractor all extra Costs and damages incurred by it or by any other contractor in making good and completing the Works, i.e., the Cost and damages incurred for completing the Works which is superior to the Contract Price less the Termination Value due to the Contractor, without prejudice to any other rights and remedies of Owner under the Contract. By the said notice or by further notice in writing within thirty (30) Days of the date thereof, the Owner may request the Contractor to assign (and, if so, the Contractor shall thereupon assign) to the Owner the benefit of any agreement for the supply of any Machinery and/or for the execution of any work and any other sub-contract including any associated guarantees and warranties which the Contractor or a Sub-Contractor may have entered into for the purpose of the Contract and title to all Machinery and other assets which are vested in the Contractor at that time and have been acquired by the Contractor for the purposes of the Works or any part thereof. The twenty one (21) Days notice by the Owner shall not be required in case of event listed under (g) above. The Contractor, upon a notice of termination becoming effective, shall (unless otherwise instructed in writing by the Owner): (i) immediately discontinue the Work (or the relevant part thereof) (and cause all Sub-Contractors to discontinue their work) and
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promptly vacate (and cause all Sub-Contractors to vacate) those areas in which it is no longer required to perform Works in accordance with and in the manner specified in the notice; (ii) (iii) (iv) place no further order or subcontracts for materials, services or facilities for any Works (or the relevant part thereof); promptly return, at Owner's order, all material and equipment belonging to the Owner; actively assist the Owner in the maintenance, protection and disposition of materials and completed portions of the Works (or the relevant part thereof).

Notwithstanding the foregoing, Owner shall have the right to require Contractor to complete any part of the Works to any degree of completion required by Owner, whether before or after the effective date of termination, in circumstances where leaving the Works incomplete would in the Owner's judgment operate to the Owner's detriment. Owner shall pay for any Works so required to be completed in accordance with GC 26 of this Contract as if the termination had not occurred.

34.2

Bribes Neither the Contractor nor any of the Sub-Contractors, agents or member of personnel shall give or offer to give to any person any bribe, gift, gratuity or commission as an inducement or reward: (a) for doing or for bearing to do any action in relation to the Contract or any other contract with the Owner, or (b) for showing or for bearing to show favour of disfavour to any person in relation to the Contract or to any other contract with the Owner. In the case of any non-compliance with this GC 34.2, the Owner may terminate the Contract and expel Contractor from the Site, and the provisions of this GC 34 shall apply in the same manner as for termination under GC 34.1.

34.3

Valuation at Date of Termination As soon as practicable after the Owner has terminated the Contract (or part thereof) because of the default of the Contractor, the Owner shall calculate the total sum then due to the Contractor as of the date of termination in accordance with the principles of GC 26 (Certificates and Payment) (but excluding any profit element) and certify the amount thereof. The amount so certified is herein called the Termination Value".

34.4

Payment after Termination Following termination pursuant to GC 34 because of the default of the Contractor, the Owner shall not be liable to make any further payments to the
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Contractor until the Works (or the relevant part thereof) have been completed. Where the Contract has been terminated in part, the foregoing sentence shall not apply in respect of the part of the Contract not so terminated. When the Works (or relevant part thereof) have been so completed, the Owner shall be entitled to recover from the Contractor the extra Costs, if any, of completing the Works (or relevant part thereof) after allowing for any sum due to the Contractor under GC 34.3, provided however that if termination of the Contract shall have occurred pursuant to sub-paragraph (g) of GC 34.1 the Owner shall immediately upon such termination be entitled to recover from the Contractor such extra Costs and damages or estimate of the amount of such extra Costs and damages. If on completion of the Works (or relevant part thereof) (a) the actual extra Cost of completing the Works (or part thereof) (including any other damages) is greater than the amount set out in the Owner's certificate as per GC 34.3, the Owner shall be entitled to recover from the Contractor an amount equal to such excess; or the actual extra Cost of completing the Works (or part thereof) is less than the amount set out in such certificate, or there is no such extra Cost, the Owner shall pay any balance due to the Contractor; provided however that the Owner shall be entitled to deduct any sum that may be due by the Contractor under GC 29.1. The Owner shall be entitled to retain any sum payable to the Contractor until such time as the Owner is able to determine at its satisfaction the amounts due to it by the Contractor under the Contract.

(b)

If the Owner's certification under GC 34.3 demonstrates that the amount received by the Contractor prior to the date of such certification is greater than the total amount payable to the Contractor under the Contract, the Contractor shall forthwith on demand pay to the Owner an amount equal to such excess.

34.5

Removal of Contractor's Equipment If following termination of this Contract because of the default of the Contractor, the Owner shall decide that it does not wish to use all or some part of the Contractor's Equipment, the Contractor shall upon receipt of notice from the Owner requiring it to do so forthwith remove from the Site or any part thereof the Contractor's Equipment referred to in Owner's notice. Should the Contractor fail to remove any Contractor's Equipment which is not required by the Owner within a reasonable time of being requested to do so the Owner may itself remove and dispose of the Contractor's Equipment (without any obligation to obtain a reasonable price of such Equipment) and shall account to the Contractor for the net disposal proceeds (if any) after deducting the costs incurred by the Owner in their disposal and any other sums then due from the Contractor to the Owner.

35

TERMINATION FOR OWNER'S CONVENIENCE OR AS A RESULT OF OWNER'S DEFAULT

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35.1

Notice of Termination for Owner's Convenience The Owner may at any time terminate the Contract for any reason by giving the Contractor a notice of termination in accordance with GC 39. The Contract shall terminate with effect from the date indicated in such notice.

35.2

Notice of Termination Due to Owner's Default In the event of the Owner: (a) failing to issue any Interim Certificate of Payment when properly due (and unless disputed in good faith by the Owner) and provided that the Contractor shall have given not less than twenty-eight (28) Days of notice in writing referring to this GC and the Interim Certificate of Payment shall not have been issued within this period; or failing to pay to the Contractor the amount (or the undisputed portion of the amount) due under any invoice at the due date subject to any deduction that the Owner is entitled to make under the Contract and provided that the Contractor shall have then given not less than twentyone (21) Days of notice in writing and payment shall not have been made within this period (except only to the extent that the Owner is challenging the amount or a portion thereof due under such invoice in good faith); or having suspended the Works or part thereof, allowing the Contractor to treat the case as an abandonment of the Contract by the Owner according to GC 19.3, or becoming bankrupt or going into liquidation other than for the purpose of a scheme of reconstruction or amalgamation, or carrying on its business under an administrator, receiver, manager or liquidator for the benefit of its creditors or any of them,

(b)

(c)

(d)

(any such circumstances being hereinafter referred to as a default) the Contractor shall be entitled without prejudice to any rights or remedies under the Contract to terminate the Contract by written notice (which notice will, in the circumstances under (a), (b) and (c) above, be at least sixty (60) Days) to the Owner with a copy to the Lenders. However, the said notice shall have no effect if (i) the default shall have been remedied or resolved (in the circumstances envisaged in paragraphs (a), (b) and (c) above, within such period; in the circumstances envisaged in paragraph (d) above, within the time frame set out, as the case may be, in the Contractor's notice) or, (ii) in the circumstances envisaged in paragraph (d) above, if the Contractor and the trustee in bankruptcy, administrator, receiver, manager or liquidator shall so agree. For the avoidance of doubt, this GC sets out the exclusive grounds for which the Contractor may terminate the Contract (without prejudice to such other provisions of this Contract that expressly authorise the Contractor to terminate the Contract).

35.3

Removal of Contractor's Equipment


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Upon the termination under this GC, the Contractor shall with all reasonable diligence remove from the Site all Contractor's Equipment and return the Site neat and clear to the Owner.

35.4

Payment on Termination for Owner's Convenience or due to Owner's Default In the event of termination under GC 35.1 or GC 35.2, the Owner shall pay to the Contractor: a) the total sum then due to the Contractor as of the date of termination in accordance with the principles of GC 26 (Certificates and Payment); for this purpose, the Advance Payment will be apportioned to the Milestones in accordance with Annex 3.3 (bis) to the Master Agreement. the cost of the Machinery which has been delivered to the Contractor or of which the Contractor is legally liable to accept delivery. Such Machinery shall become the property of and be at the risk of the Owner when paid by the Owner and the Contractor shall place the same at the Owner's disposal; the amount of any other expenditure which in the circumstances was effectively and reasonably incurred by the Contractor in the expectation of completing the whole of the Works; the reasonable cost of removal of Contractor's Equipment from the Site and the return thereof to the Contractor's facilities in its country of origin or to any other destination at no greater cost; the reasonable cost of repatriation of the Contractor's staff and workmen employed wholly in connection with the Works at the date of such termination, and the amount, in addition to (a) to (e) above, not to exceed [___%]: of any loss or damage, including loss of profit which the Contractor may have suffered as a consequence of termination (to be documented as much as possible and excluding any such amount taken into account in (a) through (e) above). less any sums which the Contractor is liable to pay to the Owner under or by virtue of the Contract.

b)

c)

d)

e)

f)

35.5

Transfer of Rights The Contractor shall transfer or assign to the Owner, or as the Owner shall direct, all the Contractor's rights, title and interests in and to the Works and the Machinery which the Owner is required to pay for according to the above, including, for the avoidance of doubt, any such rights under contracts with SubContractors.

106

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36

SETTLEMENT OF DISPUTES

36.1

Amicable Procedure If any dispute or difference of any kind whatsoever shall arise between the Owner and the Contractor in connection with, or arising out of the Contract, or regarding its existence, validity or termination, or the execution of the Works, whether during the progress of the Works or after their completion and whether before or after the termination, abandonment or breach of the Contract, the Parties shall attempt to settle such dispute in the first instance within thirty (30) Days by discussions. These discussion shall be held successively at site level, management level and top management level with, if both Parties so decide, involvement of a neutral and impartial third person acting as a mediator.

36.2

Reference to an Expert for Determination 1) If the dispute cannot be settled within such thirty (30) Day period or if the Parties agree in writing before the expiration of such thirty (30) Day period, the dispute may be referred to an Expert for determination. The Expert shall be experienced in the development, design, construction, engineering and operation of power plants and the terms of turn-key engineering, procurement and construction contracts. The Expert shall also have knowledge of Good Engineering and Construction Practices and Good Utility Practices and shall be fluent in English. If within twenty-one (21) Days from the end of the thirty (30) Day period referred to in above 1), the Parties have agreed on an Expert and on the terms under which the dispute shall be referred to him, the dispute shall be so referred. In the event that the Parties are unable within such twenty-one (21) Days period to agree upon an Expert to be appointed hereunder, then such matters shall be determined in the following manner, unless a Party decides to refer the matter to the arbitration procedure as provided in GC36.3: (a) either Party may request the head of the ICC International Centre for Expertise to propose and appoint an Expert, provided, however, that the Expert shall not be a national of the jurisdiction of either of the Parties to this Contract nor a national of the Country; within seven (7) Days of the appointment of the Expert, the Expert shall decide on a time and place in the Country for a hearing of the Parties on the dispute which time shall not be more than thirty (30) Days after the Expert's appointment. The hearing will be conducted in English or the language agreed by the Parties;

2)

3)

(b)

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(c) (d)

at the time set forth for the hearing, each Party must appear before the Expert and present its case; the Expert must render its decision on the dispute as soon as possible after completion of the hearing and not later than forty five (45) Days of the conclusion of the hearing and must forthwith advise the Parties in writing of his decision and his reasons therefor; the proceeding shall be confidential and any evidence given or statements made in the course of the hearing may not be used against a Party in any other proceedings other than in relation to this Contract; the proceedings shall not be regarded as an arbitration and the procedural laws relating to commercial arbitration shall not apply.

(e)

(f) 4)

The decision of the Expert shall be final and binding upon both Parties upon the notification to them of the Expert's written decision unless and until the dispute is finally determined by arbitration as provided for hereunder. The costs of the referral to the Expert shall be borne equally by the Parties; however each Party shall be responsible for its own costs associated with the referral.

5)

The Experts decision shall forthwith be given effect to by the Contractor, which shall proceed with execution of each part of the Works with all due diligence whether the Contractor or the Owner requires the matter to be referred to arbitration, as hereinafter provided, or not. If the Expert has given written notice of his decision to the Owner and the Contractor and no reference to arbitration has been communicated by either Party to the other within a period of thirty (30) Days from receipt of such notice, the said decision shall remain final and binding upon the Owner and the Contractor. If the Expert shall fail to give notice of his decision, as aforesaid, or if either the Owner or the Contractor be dissatisfied with any such decision, then in any such case either the Owner or the Contractor may within thirty (30) Days after receiving notice of such decision, or within thirty (30) Days after the expiration of the period within which the Expert had to render its decision, as the case may be, require that the matter or matters in dispute be referred to arbitration as hereinafter provided. The obligations of the Owner and the Contractor during the progress of the Works (or during the respective Defects Liability Period and the extensions hereof or the respective Decennial Liability) shall not be altered by reason of proceedings being conducted before the Expert.

36.3

Arbitration Procedure In the event that either Party serves a reference to arbitration on the other in accordance with GC 36.2, or if a Party chooses not to refer any dispute or difference listed in GC 36.l for determination by an Expert in accordance with GC36.2, then any such dispute or difference shall be referred to and finally resolved by arbitration under the Rules of the London Court of International Arbitration effective as at the date such reference to arbitration is made, which
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Rules are deemed to be incorporated by reference to this GC and in accordance with the following: (a) (b) The governing law of this Contract shall be the law as provided in GC 5.3. The tribunal shall consist of three (3) arbitrators, two of them shall be appointed by the respective Parties. The Parties shall appoint their arbitrators within thirty (30) Days of the receipt, by them, of the request for arbitration. The third arbitrator, who shall chair the tribunal, shall be appointed by the Court within thirty (30) Days as from the appointment of the party-appointed arbitrators. The language of the arbitration shall be English and each arbitrator shall be fluent in English. The place of the arbitration shall be London. The arbitrators shall organize the investigative process taking into account the Parties' desire that the arbitration will be conducted expeditiously and cost effectively. The hearing (or first hearing, if there are several) shall be held no later than one hundred and twenty (120) Days as from the appointment of the third arbitrator. The arbitrators shall have full power to open up, review and revise and amend any decision, opinion, direction, certificate or valuation of the Expert. Neither Party shall be limited in the proceedings before such arbitrators to the evidence or arguments put before the Expert for the purpose of obtaining his decision. No decision given by the Expert in accordance with the foregoing provisions shall disqualify the Expert from being called as a witness and giving evidence before the arbitrator(s) on any matter whatsoever relevant to the dispute or difference referred to the arbitrator as aforesaid. The reference to arbitration may proceed notwithstanding that the Works shall not then be or be alleged to be complete, provided always that the obligations of the Owner and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works and during the respective Defects Liability Period and the extensions thereof (or the respective Decennial Liability Period). Where a dispute to be referred to arbitration under this Contract raises issues which are substantially the same as or connected with issues raised in a related difference, dispute, claim or controversy (the "Related Dispute") between the Owner and any other Person, and if the related dispute has already been referred for determination by an Arbitrator, the Parties agree that: A. The dispute under this Contract shall be referred to the Arbitrator appointed to determine the related dispute, except that either party to this Contract may require the dispute under this Contract to be referred to a different Arbitrator (to be appointed under this Contract) if the party reasonably considers that the Arbitrator
109

(c) (d)

(e)

(f)

(g)

(h)

DRAFT FOR DISCUSSION PURPOSES

appointed to determine the related dispute is not appropriately qualified to determine the dispute under this Contract; and B The Arbitrator shall have power to make such directions and all necessary awards in the same way as if the procedure of the High Court as to joining one or more Defendants or co-joining Defendants or third parties was available to the parties and to him.

(i)

The award shall be final and binding and shall be the sole and exclusive remedy between the Parties regarding any claims, counterclaims and issues presented to the arbitral tribunal. Any award shall be payable in U.S. Dollars. Except to the extent necessary in connection with this arbitration, information concerning (i) the existence of an arbitration, (ii) any documentary or other evidence given by a Party or witness in the arbitration or (iii) the arbitration award, may not be disclosed by said Court, by the arbitrators, any Party or their counsel to any person not connected professionally with the proceeding unless required to do so (a) by law or by a court or competent regulatory body, and then only insofar as required by this instance, or (b) under the Finance Agreements. Nothing in this GC 36.3 shall prevent any Party from resorting to a court of competent jurisdiction for such provisional remedies as are necessary to prevent serious and irreparable injury to such Party or to enforce any award of the arbitrators; provided, however, that the applicable dispute shall be resolved ultimately as provided by this GC 36.3 and provided, further, that following the commencement of the arbitral proceedings hereunder, the arbitrator shall have the power to modify or vacate any such provisional remedy. The Parties expressly agree that leave to appeal under section 69(1) of, or an application for the determination of a preliminary point of law under section 45 of, the Arbitration Act 1996 may not be sought with respect to any question of law arising from an award.

(j)

(k)

If there is any conflict between the Rules and the requirements at GC36.3 (a) to (k) above then the provisions of this GC shall prevail.

37

CONFIDENTIALITY

(a)

Each of the Parties shall, and shall ensure that their employees, the SubContractors, consultants and agents, and each of their respective permitted successors and assigns, hold in confidence all documents and other information whether technical or commercial, which is of a confidential nature supplied to it by or on behalf of the other Party relating to the Project and shall not (save as required by the Law of the Country, the rules of the pertinent Stock Exchange, or otherwise under this Contract to rating agencies, actual or potential Lenders or Owner or Owner's shareholders or respective professional advisers of the Parties) publish or otherwise disclose or use the same for its own purposes,
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otherwise than as may be required to perform its obligations under this Contract. This provision shall survive the termination of this Contract, but shall expire and be of no further effect upon the tenth (10th) anniversary of the date of termination of this Contract. (b) The provisions of (a) above shall not apply to: (i) (ii) information in the public domain obtained otherwise than by breach of this Contract; information which was already in the possession of the receiving Party before disclosure thereof and that was not obtained from a party that was under any obligation of confidentiality; and information obtained from a third party which the receiving Party believes, after reasonable inquiry, is free to disclose the same so long as the information was not obtained by the receiving Party under any obligation of confidentiality to the third party.

(iii)

(c)

Nothing herein shall preclude the use of provisions, similar to those contained in this Contract and the other agreements referred to herein, included in any contract prepared and executed in connection with other similar projects.

38

WAIVERS

(a)

No waiver by either Party of any default by the other in the performance of any of the provisions of this Contract: (i) (ii) shall operate or be construed as a waiver of any other or further default whether of a like or different character; or shall be effective unless in writing duly executed by an authorized representative of the Party.

(b)

The failure by either Party to insist on any occasion upon the performance of the terms, conditions and provisions of this Contract, or time or other indulgence granted by one Party to the other, shall not thereby operate or been deemed as a waiver of the breach, as an acceptance of any Variation, or as the relinquishment of any such right hereunder, which right shall remain in full force and effect.

39

NOTICES

39.1

Notices to Owner and Contractor Any notice, demand, offer or other written instrument required or permitted to be given pursuant to this Contract shall be in writing signed by the Party giving such notice and shall, to the extent reasonably practicable, be sent by telefax, and if
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not reasonably practicable to send by telefax, then by hand delivery, overnight courier, telegram or registered mail, to the other Party at the address set forth in Article 7 of the Master Agreement. A notice shall be deemed to be duly received: (a) If delivered by hand, overnight courier or telegram, the date when left at the address of the recipient or, if such a date is not a Working Day, the following Working Day; If sent by registered mail, the date of the return receipt; If sent by telefax, upon receipt by the sender of an acknowledgement or transmission report generated by the machine from which the telefax was sent indicating that the telefax was sent in its entirety to the recipients telefax number or, if such a date is not a Working Day, the following Working Day.

(b) (c)

39.2

Change of address Either party to the Contract may change its nominated address by prior written notice to the other.

40

MISCELLANEOUS

40.1

Successors and Assigns This Contract shall inure to the benefit of, and be binding upon, the permitted successors and permitted assigns of the Parties.

40.2

Third Parties This Contract is intended solely for the benefit of the Parties hereto and, except as otherwise provided herein, nothing in this Contract shall be construed to create any duty to, standard of care with reference to, or any liability to, any person not a Party to this Contract.

40.3

Relationship of the Parties This Contract shall not be interpreted or construed to create an association, joint venture, or partnership between the Parties or to impose any partnership obligation or liability upon either Party. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as or be an agent or representative of, or to otherwise bind, the other Party.

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40.4

Amendments All additions and amendments to the Contract shall be binding only if in writing and signed by duly authorised representative(s) of the Parties.

40.5

Entire Agreement The Contract incorporates the entire understanding between the Parties in relation to the subject matters considered therein and supersedes all previous oral and written representations, agreements or arrangements between the Parties in respect of the subject matters considered therein. Nothing in this GC40.5 purports to exclude liability for fraudulent misrepresentation.

40.6

No standard clause Parties expressly recognise that all provisions of the Contract have been fully negotiated and accepted by them and that none of them may be considered as a mere standard clause.

40.7

Survival The rights and obligations contained in [GC 8, 9.3, 9.5, 9.10, 9.11, 9.12, 9.16, 10.6, 13.5, 13.6, 13.8, 14.2, 18.5, 25, 26, 29, 30, 32, 34.3, 34.4, 34.5, 36, 37, 39 and 40] shall survive the termination of the Contract. For the avoidance of doubt, [SC___] shall also survive termination of the Contract.

40.8

Liquidated Damages not a Penalty The Parties acknowledge and agree that because of the unique nature of the Project and the unavailability of substitute facilities, it is difficult to determine with precision the amount of damages that would or might be incurred by Owner as a result of Contractors failure to achieve Completion by the expiry of the relevant Time for Completion or complete each part of the Works so that the Plant meets the relevant Guaranteed Performances as set forth in the Contract. It is understood and agreed by the Parties that Owner shall be damaged by the failure of Contractor to meet such obligations and that (i) it would be impracticable or extremely difficult to fix the actual damages resulting therefrom; (ii) any Liquidated Damages which are payable under this Contract are in the nature of liquidated damages, and not a penalty, and are fair and reasonable; and (iii) such payments represent a reasonable estimate of fair compensation to Owner for the losses that may reasonably be anticipated from such failure.

40.9

Representations and Warranties The Contractor represents and warrants as follows:

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(a)

It is a corporation duly organized, validly existing and in good standing under the laws of [____] and has all requisite legal power and authority to execute and perform its obligations under this Contract. This Contract constitutes the legal, valid and binding obligation of the Contractor, enforceable in accordance with its terms. The execution, delivery of and performance by the Contractor of its obligations under this Contract will not result in a violation of, or be in conflict with, any provision of the Contractor's authorisation document, or constitute a default under any contract, or other instrument to which the Contractor is a party or by which it is bound, or result in a violation of any statute, rule, order or any court or administrative agency, or regulation applicable to the Contractor, or result in violation of, or be in conflict with any term or provision of any judgment or order of any court, arbitrator or governmental or public instrumentality binding upon the Contractor. There is no action, at law or in equity, or before or by any court, public board or body, pending against the Contractor, or of which the Contractor has otherwise received official notice, or which to the knowledge of respectively the Contractor is threatened against the Contractor, wherein an adverse decision, filing or finding would have a material adverse affect on the Contractor's ability to perform its obligations under this Contract. There are no factors or conditions which materially adversely affect or in the future may (so far as the Contractor can now reasonably foresee) materially adversely affect the Contractor's ability to perform its obligations under this Contract.

(b) (c)

(d)

(e)

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ANNEX GC 10.5 UTILITY MATRIX

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ANNEX GC 10.7 OWNER'S CONSENTS

1. 2. 3.

Approval of the Resolucin de Calificacin Ambiental. Acquisition of title to the Site. Connection to the grid of the Sistema Interconectado Central; the obtention of the authorisations necessary for the connection of the Unit to the grid of the Sistema Interconectado Central will be the responsibility of the Owner. The Contractor will provide all requested assistance for the obtention of such permit (e.g., providing technical documentation with regard to the Complex). In case the permit would be refused (or would not allow unrestricted operation of the Complex) for reasons which find their cause in (i) the technical characteristics of the Complex, or in (ii) any non-compliance of the Contractor with its obligations under the Contract, then the Contractor shall, at its Cost, do whatever is necessary (including the carrying out of additional Works) to remove such hurdle(s), and shall be fully liable for any delay caused by such hurdle(s) (it being understood that Owner shall not, in that case, be under an obligation to proceed with Taking Over.

116

ANNEX GC 14.1 PRELIMINARY PROJECT SCHEDULE

117

ANNEX GC 30

[TO BE FURTHER REVIEWED BY INSURANCE DEPARTMENT] INSURANCE REQUIREMENTS

1. Contractors Insurance 1.1. Contractors equipment insurance at the Complex and during transportation Coverage: Insureds: Additional Insureds: Physical loss or damage to Contractor's equipment on an all risks basis, including war risks during transportation Contractor and its Subcontractors, all for their respective rights and interests Any other parties as can be agreed upon by the Parties, all for their respective rights and interests only

Sum insured: Full replacement value or any other basis of insurance that can be agreed upon by the Parties Deductible: [USD 100,000.-] maximum

1.2. Third Party Liability Insurance Coverage: Against liability to third parties for any loss or damage to property, death or personal injury, direct financial consequential loss and which result or are presumed to result or arise out of or occur during the carrying out of the construction of the Complex and happen on or in the immediate vicinity of the Site without regard to the number of persons prejudiced and/or the total sums of all injuries and/or damage caused. The covers shall be placed on an occurrence based basis. Contractor and its Subcontractors, all for their respective rights and interests Owner and/or any other parties as can be agreed upon by the Parties, all for their respective rights and interests only

Insureds: Additional Insureds:

Sum Insured: [USD 10,000,000.-] each and every event minimum. For liabilities arising at the Complex, this cover is primary to the any other third party liability insurance cover

The insurance provisions and this Annex GC 30 are subject to finalisation of the insurance regime and review by the insurance adviser, including adjusting the Annex to match any particular requirements of the other project documents.
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All deductibles in this Annex are subject to the agreement of the parties. Deductibles shall be in line with international insurance market practice for project financed independent power projects at the time of placement.

Deductible:

as per prevailing market standards at the time of placement, e.g. [USD 5,000] for material damage only, none for bodily injury or death car liability aircraft liability pollution and contamination, unless caused by sudden, identifiable, unintended and unexpected events fines damages of a punitive or exemplary nature

Permitted Exclusions:

Main Extensions: cross liability clause sudden and accidental pollution

1.3. Worker's Compensation Insurance Coverage : Statutory worker's compensation coverage to include all activities to comply fully with all applicable laws and with agreements made with employees Contractor, its Subcontractors, and their respective employees all for their respective rights and interests

Insureds :

Sum Insured: The limit required by applicable Law

1.4. Employer's Liability Insurance Coverage: Employers liability

Sum Insured: Combined single limit of not less than [to be advised] per occurrence or if higher the limit required by applicable Law. Insureds: Additional Insureds: Contractor and its Subcontractors, all for their respective rights and interests Owner and/or any other parties as can be agreed upon by the Parties, all for their respective rights and interests only

1.5. Motor Vehicle Insurance Coverage: Liability for damage to property or bodily injury to third parties arising out of the ownership, the use and maintenance of motor vehicles owned, hired, leased or otherwise used by Contractor, in accordance with the applicable Law, conditions and limits in line with local practice.

Sum Insured: The limit required by applicable Law but at least until such time as all such motor vehicles have been finally removed from the Site

2. Owners Insurance up to Actual Completion Date 2.1. Construction / Erection All Risk - Delay in Start Up Insurance Period Insured: From the order for commencement of Works or commencement of the works on the Site, whichever is the earliest, up to Actual Completion Date followed by a 12 months extended maintenance cover

2.1.1. Damage to the Works and Materials Coverage: Physical loss of or damage to the permanent and temporary works and materials and equipment supplied for incorporation in the Complex The cover shall be on an all risk basis against all risks of physical loss or damage, including extended maintenance cover during the twelve (12) months following Actual Completion Date and shall to the extent available at reasonable commercial terms include cover for physical loss or damage which is the consequence of defective design, defective materials, defective workmanship based on basis of LEG 2/96, DE3 or alike. Insured: Additional Insureds: Owner Contractor (for their on-Site activities), Subcontractors (for their on-Site activities), suppliers (for their on-Site activities), the Lenders and/or any other parties as can be agreed upon by Owner, all for their respective rights and interests only

Sum Insured: Total contract value Deductible: (As per prevailing insurance market standards at time of placement, based on the information presently available and subject to finalization during the placement process, the Owner expects following deductibles) [USD 750,000.-] for Testing/Commissioning/Breakdown/Extended maintenance turbine & generators. [USD 250,000.-] for Commissioning/Extended maintenance balance of the Complex [5%] of the total investment at the project Site at the time of the loss with a minimum of [USD 500,000.-] for Earthquake (maximum to be determined). [USD 500,000.-] for other natural perils.

Main extensions:

Inland transit / off-Site storage for domestic purchases 50/50 marine/non-marine clause Design, plan, specification, materials and workmanship cover: based on LEG 2/96, DE3 or alike Expediting expenses clause, subject to customary sublimit 72 hours clause Cost escalation Clause: Debris removal and plant recovery clause, subject to customary sublimit 12 months extended maintenance cover Plans and documents clause Architects, surveyors and consulting engineers fees clause subject to sublimit

Main Exclusions:

Transmission lines War, terrorism and kindred risks Nuclear risks Unexplained shortage Pollution and contamination Contractors plant and equipment Penalties Consequential losses Cyber Exclusion Cash Vehicles Vessels & aircraft Wear and tear, oxidation, corrosion and similar

2.1.2. Delay in start up Coverage: Loss of revenue and/or standing charges and/or debt service, incurred due to a delay in Actual Completion Date caused by an insured Construction/Erection All Risks loss. Owner

Insureds: Additional

Insured:

Lenders and/or any other parties as can be agreed upon by the Owner for their respective rights and interests [12] months minimum An amount equivalent to minimum [12] months loss of revenue and/or debt service and/or standing charges only (as per prevailing insurance market standards at the time of placement, based on the information presently available and subject to finalization during the placement process, the Owner expects following deductibles :) [60 days per occurrence /75 days in the aggregate]

Period of Indemnity: Sum Insured:

Deductible:

Extensions:

Professional accountants clause Suppliers and customers extension clausenamed perils and named locations only, subject to a sublimit. Public utilities clause-named perils and named locations only, subject to a sublimit.

Exclusions:

Liquidated damages (Contractors liquidated damages to apply before any DSU Indemnity) Penalties Fines

2.2. Marine Cargo and Marine Delay in Start-up Insurance Period of insurance: From the earliest of the order for the commencement of Works on site or the first ex-works delivery of goods to be incorporated in the Complex and to be transported directly to the Site up to Actual Completion Date.

2.2.1. Damage to the goods Coverage : Materials, equipment, machinery, spares, supplies and other items to be incorporated in the Complex against all risks of physical loss or damage by any means of transport from the place of manufacturing or assembly, anywhere in the world, to the Site or vice versa (from warehouse to warehouse) so including intermediate transit, intermediate transshipments, and all inland transportation. Owner

Insureds: Additional

Insureds

Contractor, Subcontractors, the Finance Parties and/or any other parties as can be agreed upon by Owner, all for their respective rights and interests. CIF value (As per prevailing insurance market standards at the time of placement based on the information presently available and subject to finalization during the placement process, the Owner expects following deductibles:) [USD 25,000.] per occurrence

Sum Insured: Deductible:

Main Conditions (non exhaustive) : Ocean Barge Shipments excluded Critical Items separation warranty Critical Items survey warranty 50/50 marine / non-marine clause Extra Expenses Transit Clause Waiver of underinsurance Institute Cargo Clauses(A) Institute Cargo Clauses (Air) Institute Strike Clauses (Cargo) Institute Strike Clauses (Air) Institute War Clauses (Cargo) Institute War Clauses (Air) Institute Replacement Clause Institute Radioactive Contamination Exclusion Clause Excluding rust, oxidation and discoloration in respect of unprotected steelwork unless caused by a peril covered underInstitute Cargo Clauses (C) or during loading or unloading operations Excluding twisting, bending and distortion of steelwork unless caused by a peril covered under Institute Cargo Clauses (C ) or during loading or unloading operations Excluding, electronic and mechanical derangement unless caused by external impact or by a peril insured against by Institute Cargo Clause (C) Excluding damage to coatings and linings of pipes unless caused by a peril insured against. Excluding final positioning installation and/or testing Insolvency Exclusion Clause Unseaworthiness Exclusion Clause

Duration of Cover Clause Institute Classification Clause Accumulation Clause Basis of Loss Settlement Sue and Labour Increased Value on Arrival Clause Insurable Interest Clause Deductible Clause Replacement by Air Packing Clause Inchmaree Clause Debris Removal Clause Goods Purchased by the Assured on Insured or delivered Terms. Civil Authority Clause Seaworthiness Admitted Container Clause Control of Damaged Goods Extra Expense Clause Other Insurance Local Insurance Payment on Account Clause Letter of Credit Clause Clause Paramount General Average Clause Classification Warranty

2.2.2. Delay in start up Coverage : Loss of revenue and/or standing charges and/or debt service incurred due to a delay in achieving Actual Completion Date caused by a risk insured under the Marine Cargo insurance cover and /or more specifically insured under the Marine Delay in Start Up insurance cover, Owner Lenders and/or any other parties as can be agreed upon by Owner, all for their respective rights and interests.

Insureds: Additional Insureds:

Period of

Indemnity: Sum Insured:

[12] months minimum An amount equivalent to minimum [12] months loss of revenue and/or debt service and/or standing charges only (as per prevailing insurance market standards at the time of placement based on the information presently available and subject to finalization during the placement process, the Owner expects following deductibles:) [12] days each and every loss.

Deductible:

Exclusions:

Liquidated damages (Contractors liquidated damages to apply before DSU indemnity) Penalties Fines

2.3. Worker's Compensation Insurance Coverage: Statutory worker's compensation coverage to include all activities to comply fully with all applicable Law and with agreements made with employees Owner and its employees all for their respective rights and interests The limit required by applicable Law

Insured: Sum Insured:

2.4. Employer's Liability Insurance Coverage: Insured: Additional Insured: Sum Insured: Employers liability Owner Lenders and any other party as can be agreed upon by the Owner Combined single limit of not less than [to be advised] per occurrence or if higher the limit required by applicable Law.

2.5. Motor Vehicle Insurance Coverage: Liability for damage to property or bodily injury to third parties arising out of the ownership, the use and maintenance of motor vehicles owned, hired, leased or otherwise used by Owner, in accordance with the applicable Law, conditions and limits in line with local practice The limit required by applicable Law

Sum Insured:

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