ex10-2_newmech.htm

Unless specifically stated otherwise in this Agreement, all Construction Works are to be provided by the Contractor.

Contract means this agreement and any schedules and exhibits attached hereto or specifically referenced herein, including, without limitation, any RFCPs, FWOs, CORs or Change Orders as such terms are defined in Section 37.

Contract Schedule means the schedule described in Section 6.

Contract Time means the total amount of calendar time allowed in the Contract Schedule for performance of the Contractor’s Work.

Contractor Means the Party identified as such in this Contract. Unless the context clearly requires otherwise, the term shall include all those employed by or in privity with Contractor at any tier including all Subcontractors and Suppliers.

Corrective Work shall have the meaning set forth in Section 33.

Craft Labor means trade workers. By way of example, Craft Labor includes laborers, carpenters, operators, pipe fitters, boilermakers, electricians, and sheet metal workers. Refer to Attachment B – Price & Payment, Section 3 for definition of supervision

Days mean calendar days unless specifically stated otherwise.

Dead-Band means an established plus or minus range whereby profit is fixed for the cumulative value of Change Orders provided the cumulative Change Order Value remains within the range. Cumulative value of Change Orders that fall outside the range will be applicable to profit adjustments as defined in Attachment B – Price and Payment, section

Deliverables or Drawings mean all of the documentation including cut sheets, reports, drawings, certificates, schedules, plans, invoices, and other submittals that Contractor is required to furnish pursuant to this Contract.

Effective Date means the date set forth in the Contract as the date on which the Contract is effective.

Engineer means the person or entity designated as such in Attachment A.

Engineered Materials and Equipment means Materials and Equipment that will be designed and fabricated by Contractor as part of its Work.

Field Non-Manual Labor (“FNM”) all workers other than Craft Labor.

Field Work Order shall have the meaning set forth in Section 37.

Final Acceptance means Company’s written acknowledgment that Contractor has achieved Final Completion as provided herein.

Final Completion means that all obligations of Contractor under this Contract have been completed except for obligations which Company has waived or excused in writing and except for obligations of Contractor that survive termination of this Contract such as warranty and indemnity.

Force Majeure means an event beyond the reasonable control and without the fault or negligence of the Party claiming Force Majeure, including acts of God, acts of the government (including failure or delay by the government in issuing, or cancellation or non-renewal of, any applicable permit, in each case without just cause), fire, flood, pandemics, earthquake, explosion, riot or civil insurrection, war, sabotage, nuclear accident, pandemic, acts of terrorism, and any industry or trade wide strike or any other strike not specifically directed at Company, Contractor, a Subcontractor, or Supplier.

Goods, Materials and Equipment mean all materials, commodities, supplies, apparatus, equipment, and machinery that Contractor, unless other wise stated, is obligated to provide and which will become a permanent part of the Project when it is completed. The provisions of the Uniform Commercial Code as adopted and set forth in the Montana Code Annotated, shall apply to Goods unless otherwise specified in writing agreed to by the Parties.

Guaranteed Maximum Price (GMP) The term “GMP” means the Guaranteed Maximum Price (excluding approved Change Orders) that shall be established by executing this Contract and, is the total maximum amount that the Contractor may be compensated under the GMP scope of work. The GMP shall include Contractor overhead and profit. The GMP will not be adjusted for the value of approved Change Orders. Approved Change Orders shall be managed outside the GMP structured price. Refer to Attachment B – Price & Payment section 9. Contractor shall be solely liable and responsible for and pay any and all costs in excess of the Guaranteed Maximum Price without entitlement to reimbursement from the Company.

GMP Contract Cost means Actual Costs plus overhead and profit.

Hazardous Materials means any chemical substance, mixture or contaminant, pesticide, source material, regulated nuclear material, residual radioactive material, harmful physical agents, air pollutants, or hazardous waste or by-product material that is regulated or defined by Law. Includes the purchase, possession, transportation, use, and/or disposal of such material.

Industry Practice means, with respect to each of engineering, design, construction, operation, and maintenance of the Work, the practices, methods, procedures, equipment, and tools which comply with all applicable Laws and are used by a significant portion of other similar businesses and industries in the United States.

Contract _7/27/09 4 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

Labor means all Field Non-Manual Labor and Craft Labor.

Laws mean all laws, statutes, regulations, ordinances, executive orders, codes, and similar pronouncements published by any governmental authority.

Lender means the financial institution providing all or a portion of the Project financing and includes Lender’s subsidiaries, affiliates, agents, representatives, successors or assigns, officers, directors, agents, and employees.

Lien means any claim, lien, mortgage, encumbrance, pledge, charge, lease, easement, servitude, right of others, or security interest of any kind.

Limited Notice to Proceed (“LNTP”) means a Notice specifying the date Contractor is authorized by Company to start the Work to the limited extent specified in the LNTP.

Losses mean any claims, demands, suits, proceedings, fines, penalties, liabilities, judgments, awards, damages, interests, costs, or other such expenses including reasonable attorney fees and court costs, but do not include any indirect, special, incidental, consequential, or exemplary damages.

Mechanical Completion means the stage in the progress of the Work when all Materials and Equipment which Contractor is responsible to install: (a) have been completely installed, connected mechanically and electrically, aligned, balanced, lubricated, charged with proper lubricants, chemicals, and/or gases; and (b) are otherwise mechanically and electrically sound in all respects; and (c) have successfully completed all pre-operational tests; and (d) are capable of being operated within manufacturers’ recommended limits in compliance with all Laws and without hazard or danger to any property and without danger of injury to persons or property.

Notice means a written document prepared and delivered by one Party to another Party.

Notice to Proceed (“NTP”) means a Notice specifying the date Contractor is authorized by Company to start the Work.

Notify means to provide Notice.

Person means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, non-incorporated organization, or government or any agency or political subdivision thereof.

Professional Services mean the performance of engineering, design, consulting, testing, or other technical services performed by persons specially licensed, certified, or otherwise acknowledged to have specialized training, experience, and skills in the art. Professional Services require the exercise of skilled judgment and expertise in addressing and completing the Work.

Project means the total effort being undertaken by the Company, of which the Work performed under this Contract may be the whole or may be a part, and which may include work by other Contractors to Company or by Company or by Company’s own forces including Persons under separate contracts with Company.

Project Safety Plans shall have the meaning set forth in Section 11.

Project Schedule means the overall integrated schedule for the Project developed by Company with input from others, including Contractor.

Project Site means the land and other places on, under, in, or through which the Work is to be installed, executed or carried out, and any other lands or places provided for the purposes of the Project, together with such other places as may be specifically designated in this Contract as forming part of the Project Site. Where the Work is but a part of the Project, Contractor may be granted access for ingress, egress to the particular part of the Project Site where the Work is to be performed, but not necessarily to the entire Project Site.

Revise and Resubmit, when applied by Company to Contractor's Deliverables, means that the Deliverables are unsatisfactory, as determined by the Company in its sole discretion, because they do not interface properly with Company-furnished components of the Project or do not comply with the requirements of the Contract.

Services mean those efforts expended, that do not produce a tangible input to the direct construction and installation of the plant facility.

Site Manager means Contractor’s senior representative on the Project Site.

Specifications mean the documents identified as such or referred to in this Contract and which sets forth the technical requirements for the Work and for the performance of related Services.

Stop Work Order means a Company Directive ordering Contractor to cease all Work to the extent described in the order.

Subcontractor means any person, at any tier, who has a contract with Contractor or with any other Lower Tier Subcontractor to perform a portion of the Work at the Project Site.

Substantial Completion means the stage in the progress of the Work when:

(a) Mechanical Completion has been achieved; and

(b) operational testing, whether by Contractor, Company, or both, has been successfully completed; and

Contract _7/27/09 5 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

(d) the Work is ready for uninterrupted operation; and

(e) the Work or designated portion thereof is sufficiently complete in accordance with this Contract so that Company can occupy the Work and utilize it for its intended use; and

(f) remaining items are set forth in the punch list mutually agreed by Contractor and Company, inclusive of anticipated completion dates for items on the punch list, which the Parties shall endeavor to agree upon promptly and in good faith.

Integrated plant operation will not occur until all 3 units are available. Tie-ins and unit outages will be performed as necessary during the construction effort to complete the plant.

Supplier means any Person providing or supplying any Goods, Construction Works, or Materials and Equipment to Contractor or to its Subcontractors.

Technical Document List (“TDL”) means the documents, Drawings and Specifications compiled in a list as required.

Total Contract Cost means cumulative value of GMP Contract Cost, approved Change Orders, plus half of shared savings.

Warranty Period shall have the meaning set forth in Section 64.

Work means all the resources including Goods, Labor, Construction Works, Materials and Equipment, Services, supervision, and management required by this Contract, whether provided by Contractor or provided to Contractor by Company, its Authorized Representative or others in order to fulfill Contractor’s obligations under this Contract. Work also includes all duties, responsibilities, and other obligations undertaken by Contractor under this Contract, whether expressed or implied.

2 General

This Contract constitutes the complete integrated agreement between the Company and Contractor regarding the Work, and it supersedes all prior agreements or undertakings. Any exceptions or additional terms, whether written or oral, including those terms in the Contractor’s bid or proposal not expressly incorporated herein, are rejected. No course of prior dealing or performance between Company and Contractor or industry usage shall be construed or interpreted to modify any term, condition, requirement, or instruction set forth in the Contract.

3 Representations by Contractor

3.1 Contractor represents that it has thoroughly examined the Contract; has studied all information provided or otherwise made available by Company; has familiarized itself with all applicable state and Federal, and local laws; and is experienced, qualified, and licensed (to the extent required by applicable Laws) to perform the Work.

3.2 Contractor also represents that it has visited the Project Site and that the GMP includes consideration of all the general and local conditions that might impact the Work including climatic conditions, existing surface conditions, existing structures, availability of qualified labor, availability of utilities, access to the Project Site, transportation facilities, disposal, storage, handling of Materials and Equipment, and any necessary Construction Works.

3.3 Contractor agrees and acknowledges that any surface or subsurface reports, topographic maps, geotechnical reports, information regarding the physical condition or character of the Project Site, existing structures at the Project Site, or material equipment or materials at the Project Site, or other information made available to Contractor by Company or its Authorized Representative are solely for Contractor’s convenience and not represented or warranted to be accurate. Contractor acknowledges that Company and its Authorized Representative assume no responsibility or liability for conclusions or interpretations made by Contractor based on any information Company or its Authorized Representative has made available to Contractor. Contractor further acknowledges that Company and its Authorized Representative assume no responsibility or liability for any understandings reached or representations made by third parties, including Company, or its employees or agents, and its Authorized Representative concerning conditions that may affect the Work. Any failure by Contractor to take the actions described in this Section 3 shall not relieve Contractor from its responsibility for properly estimating the difficulty and cost of successfully performing the Work.

4 Scope of Work

The Contractor’s detailed scope of work is set forth in Attachment A - Scope. Unless otherwise stated in the Contract, Contractor shall provide all resources including Goods, Labor, Construction Works, Materials and Equipment, Services, supervision, and management, necessary to fulfill Contractor’s obligations under this Contract.

Contract _7/27/09 6 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

5 Price & Payment

The GMP and payment terms are set forth in Attachment B - Price & Payment. Attachment B – Price and Payment also contains the schedule of liquidated damages that may be imposed by Company for Contractor delay. The GMP includes the cost of all resources necessary to complete the Work in accordance with the requirements of the Contract. Contractor acknowledges and agrees that the Total Contract Cost will be paid to Contractor in trust first for the benefit of Contractor’s employees, Subcontractors, and Suppliers.

6 Schedule

6.1 The Contract Schedule for the performance of Contractor’s Work is set forth in Attachment A. Contractor shall begin its Work upon receipt of a LNTP or an NTP. However, Contractor shall not begin any physical Work on the Project Site until it receives a fully executed “Release to Work” (Exhibit 3) from Company. Contractor agrees and acknowledges that time is of the essence in the performance of this Contract. Provided that the Company is not in breach of this Contract, Contractor shall take whatever measures are necessary to complete its Work according to the Contract Schedule. Contractor agrees and acknowledges that at times, the Project Site may have very limited areas available for lay down of materials, staging of materials, fabrication facilities, or pre-assembly operations. In addition, several contractors will be working on the Project Site at the same time, and Contractor will have to coordinate its activities with those of Company, its Authorized Representative and other Subcontractors. At times, this will require Contractor to focus on activities other than those most critical to the Contract Schedule.

6.2 If Contractor cannot timely complete the Work on the Project as a result of third parties, other than those third parties under Contractors control and supervision as defined in the general terms and conditions of this Contract, interfering with Contractor’s Work, then Contractor shall be entitled to an equitable adjustment to the Contract Schedule.

6.3 Contractor shall Notify Company and its Authorized Representative of any potential delay to the Work, including delays caused by third parties, other than those third parties under Contractor’s control and supervision as defined in the general terms and conditions of this Contract, within five (5) days after the event giving rise to the potential delay becomes known to Contractor. The Notice shall describe the cause of the potential delay and the plan Contractor proposes to avoid,

mitigate, or recover from the delay. Such recovery plan shall be subject to Company’s or its Authorized Representative’s review and approval. If Contractor fails to take steps that Company or its Authorized Representative determine are necessary to avoid or recover from the delay, Company or its Authorized Representative may direct Contractor to accelerate its Work by providing additional resources to recover and maintain the Contract Schedule. Unless the delay is caused by the Company, third parties other than those third parties under Contractor’s control and supervision as defined in the general terms and conditions of this Contract, or Force Majeure, all costs incurred by Contractor to accelerate its Work shall be the responsibility of the Contractor. In addition to its right to direct Contractor to accelerate its Work, Company or its Authorized Representative may exercise any other remedy specified herein or otherwise available under applicable Laws or in equity. Company or the Company’s Authorized Representative’s approval of Contractor’s proposed action to recover the delay or Company's or its Authorized Representative’s Directive to accelerate the Work shall not constitute a waiver of any right or remedy available to Company under this Contract, at law, or equity. Further any directive to accelerate work shall not constitute a waiver of any of the provisions of this Contract.

7 Independent Contractor

7.1 Contractor is and shall operate as an independent contractor in the performance of the Work and not as an agent or employee of Company. Nothing contained in this Contract is intended nor shall be construed as creating any contractual relationship between any Persons other than Company and Contractor. Contractor shall obtain any and all state and/or local licenses, certificates, or permits required to obtain and maintain independent contractor status that may be required by the State of Montana.

7.2 At all times, Contractor shall be solely responsible for the means, methods, sequences, and procedures for performing its Work.

7.3 Subject to the limits in Section 8, Contractor has sole authority, control and responsibility to employ, discharge, supervise and otherwise manage its employees.

8 Supervision and Labor

Contractor shall provide an adequate number of Competent Persons to perform the Work. Prior to the start of the Work, Contractor shall submit the resume of a

Contract _7/27/09 7 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

Competent Person to act as Contractor’s supervisor. Once approved by Company, said supervisor shall be present on the Project Site whenever Contractor is performing Work. Contractor’s supervisor shall have complete authority to act on behalf of Contractor in all matters pertaining to execution of the Work. Contractor shall not remove or replace its supervisor or any other of its supervisory staff assigned to the Work without the prior written consent of Company.

9 Subcontractors and Suppliers

Contractor shall not subcontract performance of any portion of the Work to any Subcontractor or Supplier that does not meet the prequalification criteria applicable to such Subcontractor or Supplier as set forth in Attachment G. If there is an issue with Subcontractor or Supplier prequalification, Contractor may address the matter with Company. Upon request, Contractor shall furnish Company and its Authorized Representative a copy of any subcontract or purchase order for Company’s or its Authorized Representative’s information. Contractor shall also furnish to Company and its Authorized Representative such information pertaining to the proposed Subcontractor or Supplier as Company or its Authorized Representative may reasonably request including financial statements, safety data, and references. Contractor shall not subcontract any portion of the Work to any Person that has a direct contractual relationship with Company. Failure of Contractor to comply with this Section 9 may, at the sole discretion of Company, be deemed to be a material breach of this Contract. Notwithstanding anything to the contrary in this Section 9, Contractor shall remain liable to Company for any and all Losses incurred by Company caused by or related to any act of any Subcontractor or Supplier.

10 Labor Relations

10.1 Contractor shall strictly comply with all the Project Job Rules (Attachment D) and any procedures established by Contractor for employee conduct at the Project Site. Company reserves the right to revise any such rule, and Contractor shall fully comply with such rules as revised.

10.2 Contractor shall use its best efforts to minimize the risk of labor-related delays including, if applicable, using its best efforts to negotiate a Project agreement that includes a no-strike provision. Contractor shall promptly take any and all steps that may be available to resolve violations of collective bargaining agreements and jurisdictional disputes including the filing of appropriate processes with any court or administrative agency having jurisdiction to settle, enjoin, or award damages resulting from violations of collective bargaining agreements or jurisdictional disputes.

10.3 Contractor shall promptly Notify Company and its Authorized Representative of any actual, anticipated, or threatened labor dispute that might affect the performance of the Work of Contractor or any of its Subcontractors or Suppliers.

10.4 Contractor acknowledges that Materials and Equipment to be furnished by Company, if any, may be provided by non-union shops, and Contractor expressly agrees that any labor disputes resulting from this circumstance shall not constitute an event for which Contractor may seek relief under Force Majeure or any other provision of this Contract.

11 Environmental, Health & Safety

11.1 Contractor acknowledges and agrees that its paramount obligation under this Contract is to perform its Work in a safe manner. To that end, Contractor shall, at a minimum, perform its Work in accordance with all applicable State, Federal and Local Laws and regulations. Further, Contractor hereby represents and warrants that it has a comprehensive safety, health, and environmental program and corresponding policies to insure human as well as environmental health and safety.

11.2 Contractor agrees to develop, in advance of project commencement, a written, comprehensive, site-specific project safety plan covering all aspects of the Work required to complete the project. This plan will be available at the main office of the construction site and available for review at all times Contractor employees are at Work on the project. A copy of this plan will be submitted to the Company prior to the commencement of work.

11.3 As part of the site specific project safety plan, the Contractor will develop and implement an effective training and inspection program to ensure all Contractor employees understand and follow all Contractor required safety rules and requirements. Details of the training and inspection program shall be included in the site specific project safety plan.

11.4 Prior to mobilizing at the Project Site, Contractor shall designate a Competent Person who shall have the overall responsibility for implementing the requirements of the Project Safety Plans. The Competent Person shall (a) be present on the Project Site whenever Contractor is performing Work, (b) be able to identify hazards associated with the Work, and (c) have complete authority to stop the Work if he / she deems it necessary. The designation of this Competent Person will be identified in the site specific project safety plan described in Attachment E.

Contract _7/27/09 8 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

11.5 The Contractor will develop an effective program to preclude and prevent the potential for any Contractor or Subcontractor employees to be using or under the influence of any alcohol or controlled substance (drugs) while on the project site.

11.6 Notwithstanding any of the requirements of this section, including the submission of the site specific project safety plan or any safety related actions by the Company, the Contractor retains sole responsibility for the safe execution of the Work and the overall safety of both Contractor and any Subcontractor employees. All the requirements of this section shall apply equally to any Subcontractors hired by the Contractor.

12 Hazardous Materials

12.1 Contractor shall be solely responsible for all Hazardous Materials on the Project Site including reporting, accounting, licensing, care, transportation, storage, use, treatment, and disposal introduced by Contractor. This excludes pre-existing hazardous material. In carrying out its obligations under this Section 12, Contractor shall comply with the site specific project safety plan and all applicable Laws.

12.2 A Hazardous Material is any substance or material identified now or in the future as hazardous under any federal, state or local law or regulations, or any other substance or material that may be considered hazardous or otherwise subject to statutory or regulatory requirement governing handling, disposal or clean-up. The Contractor shall not be obligated to commence or continue work until any pre-existing Hazardous Material discovered at the Worksite has been removed, rendered or determined to be harmless by the Contractor as certified by an independent testing laboratory and approved by the appropriated government agency.

12.3 If after the commencement of the Work, pre-existing Hazardous Material is discovered at the Worksite, the Contractor shall be entitled to immediately stop Work in the affected area. The Contractor shall report the condition to the Company, and, if required, the government agency with jurisdiction.

12.4 The Contractor shall not be required to perform any Work relating to or in the area of pre-existing Hazardous Material without written mutual agreement.

12.5 Contractor must obtain Company approval prior to offsite disposal of existing soil.

13 Cleanup

Contractor acknowledges and agrees that cleanliness is an important factor in creating a safe work environment. Contractor shall at all times keep work areas in a neat, clean, and orderly condition and shall promptly and properly dispose of all debris and rubbish resulting from Contractor’s operations. If Contractor fails to maintain its work areas in a manner satisfactory to Company or its Authorized Representative or fails to immediately clean up after receipt of Notice from Company or its Authorized Representative to do so, Company or its Authorized Representative shall have the right, without further notice to Contractor, to clean up Contractor’s work areas and backcharge the cost to Contractor.

14 Stop Work Orders

Contractor is responsible for conducting the Work, however, Contractor shall at all times abide by the reasonable instructions of Company’s Site Manager and its Authorized Representative and any Company Directives. If Contractor fails to comply with any such instructions, Directives, or the requirements of this Contract, Company or its Authorized Representative shall have the authority (a) to stop any portion of the Work affected by such failure until such failure is remedied or (b) to terminate this Contract for default in accordance with Section 41. In the event that Company or its Authorized Representative is forced to issue a Stop Work Order, Contractor shall be liable for all resulting cost and Contract Schedule impacts.

15 Permits & Licenses

Contractor shall promptly apply for and procure, without additional compensation, all certificates, licenses, permits, and similar permissions required by applicable Laws necessary to perform except for such permits as may be specifically set forth as Company’s responsibility elsewhere within this Contract.

16 Submittals

16.1 Contractor shall submit to Company or its Authorized Representative all Deliverables required by the Contract. The submission of any such Deliverables shall be certification by Contractor that the information set forth therein is accurate in all material respects and conforms to the Contract requirements and all applicable Laws.

16.2 Unless the Contract indicates that any such Deliverable is to be for Company' or its Authorized Representative’s information only, Company or its Authorized Representative, upon receipt of Contractor's Deliverables, shall review and return same to Contractor, marked as "Accepted," "Accepted as Certified," or "Revise and Resubmit".

Contract _7/27/09 9 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

The timing of Contractor's Deliverables and Company’s review shall be in accordance with the Contract Schedule. If the Schedule does not show a time for submission or approval, the submissions shall be made so as not to delay the Work, and Company or its Authorized Representative shall have a reasonable period to review the Deliverables. Contractor shall be entitled to an equitable adjustment to the Contract Schedule if the Company, in reviewing the Deliverables, directly causes a material delay in the construction progress.

16.3 Upon receipt of a Deliverable marked "Accepted," Contractor may proceed with the Work to the extent of and in accordance with the Accepted Deliverable.

16.4 Upon receipt of a Deliverable marked "Accepted as Certified" and if Contractor concurs with Company's or its Authorized Representative’s comments, Contractor shall incorporate the comments and may proceed with the Work to the extent of and in accordance with the Accepted as Certified Deliverable. Within fourteen (14) Days, Contractor shall submit a revised Deliverable in which Company's or its Authorized Representative’s comments have been incorporated. If Contractor determines that it cannot incorporate Company's or its Authorized Representative’s comments without prejudice to Contractor's warranty or other obligations under this Contract, Contractor shall so advise Company and its Authorized Representative in writing within seven (7) days of its receipt of Company's or its Authorized Representative’s comments, stating the reasons therefore. In this case, Contractor may proceed with the Work to the extent of and in accordance with the Accepted as Certified Deliverable only after resolution of Company’s or its Authorized Representative’s comments and Contractor’s objections.

16.5 Upon receipt of a Deliverable marked "Revise and Resubmit," Contractor shall immediately take all necessary action to revise its Deliverable in accordance with Company's or its Authorized Representative’s comments and to resubmit the document to Company and its Authorized Representative. In no event shall Contractor proceed with the affected Work until its revised Deliverable has been returned to Contractor marked as "Accepted" or "Accepted as Certified" by Company.

16.6 Use of the term “Accepted” or “Accepted as Certified” shall not excuse or otherwise discharge Contractor from its responsibility to supply

Materials and Equipment that interface with Company-furnished components and comply with the requirements of this Contract, including the Specifications and Drawings as provided in the Contract and the documentation incorporated thereto. Provided the review does not directly cause a material delay to the Contract Schedule, review and comment by Company or its Authorized Representative of Contractor’s Deliverable shall not relieve Contractor of its obligation to maintain the Contract Schedule and to complete the Work in accordance with this Contract, and any such review and comment by Company or its Authorized Representative shall not constitute a waiver of Company’s rights under this Contract with respect to nonconforming Work.

17 Issued for Construction Documents

17.1 Contractor shall perform the Work using only Drawings and Specifications marked by Contractor as "Issued for Construction" or equivalent designation.

17.2 Contractor shall maintain at the Project Site, a complete and current set of "Issued for Construction" Drawings and Specifications.

18 Ownership and Use of Contractor Deliverables

18.1 All Deliverables prepared or developed by Contractor and submitted to Company in the performance of the Work shall be the property of Company, and such Deliverables may be used by Company without restriction in the design, construction, operation, maintenance, and use of the Project.

18.2 To the extent that the Deliverables contain any intellectual property belonging to Contractor, Company shall have a royalty-free perpetual license, at no additional charge, providing the Company the right to use such property in the design, construction, operation, maintenance, and use of the Project.

18.3 Company and its Authorized Representative shall have the right to reproduce all Deliverables received from Contractor that are related to the Project notwithstanding any notice to the contrary appearing on the document. If requested by Company or its Authorized Representative, Contractor shall provide a certificate to that effect.

19 Substitutions

Contractor may propose substitutions for the specified Goods or Materials and Equipment. Contractor’s proposal shall constitute a warranty by Contractor that the proposed substitution is equal or superior to the item for

Contract _7/27/09 10 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

which it is being substituted and is fit for its intended purpose. Company's or its Authorized Representative’s decision on the use of any such substitution shall be final. If the substitution is accepted, the Company will issue a Change Order to that effect in accordance with Section 37. Company’s or its Authorized Representative’s approval shall not excuse any of Contractor’s obligations including its warranty obligations. Contractor shall be solely liable for the cost and schedule impacts of using any substitution.

20 Discrepancies

Whenever, in Contractor's opinion, the Contract documents or any portion of the Work are defective, deficient, or at variance with each other or with any Laws applicable to the Work, Contractor shall immediately discontinue performance on the portion of the Work affected thereby and Notify Company and its Authorized Representative of such opinion. Thereafter, Contractor shall not proceed with the portion of the Work so affected until it has received a Directive specifying what action, if any, is to be taken. If Contractor proceeds with any affected portion of the Work prior to receiving such Directive, such Work shall be at Contractor’s risk.

21 Quality Control/Quality Assurance Program

21.1 Contractor shall submit for review a Project-Specific Quality Control Program. Contractor shall assign a Competent Person at the Project Site to implement and supervise Contractor’s Quality Control Program.

21.2 For Work that includes the installation, placement, storage, or preventative maintenance of Materials and Equipment, Contractor shall use Contractor’s appropriate procedures, systems, and forms to generate and track quality and inspection documentation, turnover punch lists, and preventive maintenance.

21.3 Contractor shall, without additional compensation, make or cause to be made all inspections and tests required by this Contract. If the results or methods of performance of such inspections or tests fail to conform to the requirements of the Contract, Company or its Authorized Representative may, at its sole discretion, require Contractor to perform additional inspections and tests, all costs of which shall be to the account of Contractor. Contractor shall furnish Company and its Authorized Representative with satisfactory documentation of the results of all inspections and tests. Company and its Authorized Representative shall be given not less than seven (7) days Notice of any inspections or tests to be made by Contractor or by its Subcontractors or Suppliers so that Company or its Authorized Representative

may, at its option, witness any such inspections or tests.

21.4 Unless specifically permitted by the Specifications, Contractor shall employ a qualified and approved independent testing agency, acceptable to Company and its Authorized Representative, to perform all required testing.

22 Materials Management Procedure

22.1 If required by the Scope of Work (Attachment A), Contractor shall, prior to the start of the Work, prepare and submit for approval a Project-Specific Materials Management Procedure (“MMP”). Contractor shall assign a Competent Person at the Project Site to implement and supervise Contractor’s Materials Management Procedure.

22.2 The MMP shall be a comprehensive computer-based system capable of tracking Contractor-supplied Materials and Equipment from requisition through order placement, delivery to the Project Site or other storage areas, receipt into inventory, and issuance from inventory for incorporation into the Work.

22.3 In addition, the MMP shall be used to track all Materials and Equipment furnished to Contractor by Company, its Authorized Representative, or third parties. These Materials and Equipment shall be tracked either from purchase order information furnished by Company or other third parties or from the actual receipt and turn-over of Materials and Equipment to Contractor.

23 Control of Materials and Equipment Furnished by Company

23.1 Materials and Equipment furnished by Company to Contractor for Contractor’s installation, erection, or incorporation into the Work shall be offloaded and received by Contractor in the presence of Company’s or its Authorized Representative’s site representative or his designated representative. Quantities of such Materials and Equipment shall be checked jointly by Contractor and Company or its Authorized Representative. Contractor’s receiving and acceptance of such Materials and Equipment shall be recorded in writing and evidenced by Contractor’s signing of forms satisfactory to Company or its Authorized Representative.

23.2 If the nature of the shipping packaging allows, Contractor shall inspect and carefully note any visible shortage of or damage to the Materials and Equipment furnished by Company prior to the unloading of same from the carrier. Where such inspection and inventory is not possible prior to

Contract _7/27/09 11 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

unloading, Contractor shall inspect and inventory such Materials and Equipment as soon after unloading as practicable, but in any event, prior to moving such Materials and Equipment to storage. Such inspection and inventory may require the opening and resealing of crates or cartons in order to ascertain the existence of any visible damage or of shortages in the quantities indicated in the shipping documents. Contractor shall Notify Company or its Authorized Representative promptly of any shortages or damage revealed by its inspection.

23.3 Provided that the Company and Contractor were available for a timely inspection under 23.2, any shortage of or damage to such Materials and Equipment that is found after the time required for inspection under Section 23.2, and that would have been revealed in a proper inspection pursuant to Section 23.2, shall be deemed to have been caused by Contractor, and Contractor shall assume full responsibility for any shortages in, loss of, or damage to such Materials and Equipment and for any delay in completion of the Work caused thereby.

23.4 Contractor shall Notify Company or its Authorized Representative of any additional requirements for Materials and Equipment being supplied by Company. Such Notice shall be made as soon as the need for the additional requirement is discovered, but, in any event, in sufficient time for Company or its Authorized Representative to address the requirement. In the event of a misfit of the Materials and Equipment furnished by Company, Contractor shall immediately Notify Company or its Authorized Representative of such misfit. Contractor shall take all reasonable steps to avoid standby time due to lack of such Materials and Equipment or misfits and shall continue to perform other portions of the Work pending resolution of such situations by Company and its Authorized Representative.

23.5 Contractor shall Notify Company or its Authorized Representative of any Materials and Equipment supplied to Contractor that are surplus and shall cooperate with Company and/or its Authorized Representative in the disposition of such surplus as directed by Company or its Authorized Representative.

24 Project Controls Requirements

24.1 Contractor shall provide Company and its Authorized Representative with appropriate reports and updates in sufficient detail to enable Company and its Authorized Representative to measure

Contractor’s progress against the current short term work plan on a weekly basis. In addition, Contractor shall schedule and conduct Contractor shall schedule and conduct weekly progress meetings and weekly coordination meetings unless a need for more frequent meetings are needed or requested by the Contractor, the Company or the Company’s Authorized Representative.

24.2 Detailed Contract Schedule

a. Within thirty (30) calendar days of the effective date of this Contract, Contractor shall submit, for Company or its Authorized Representative’s review and approval, a detailed Contract schedule in CPM format using the latest software (currently Primavera 6.0). Company or its Authorized Representative shall set the Project activity codes dictionary structure, calendars, activity ID and Project ID numbering system etc. in consultation with the Contractor. The Company’s or Authorized Representative’s Project planner will also arrange a Project calendar to set the data dates for schedule updates, in order to facilitate easy electronic integration of the overall Project Schedule. This Contract Schedule shall include ample allowance for normal delays and difficulties that may be encountered in the work of this nature including weather, holidays, coordination and normal job site congestion. At a minimum, the detailed Contract Schedule must support the dates given in the Project Schedule and show a logical and orderly array of resource loaded activities (materials, equipment and man hours) required to achieve completion of the work. Individual activity durations shall not be longer than twenty (20) work days. In case the submitted Contract Schedule is found deficient by the Company or its Authorized Representative, the Contractor shall correct the deficiencies and resubmit the schedule within five (5) working days for Company or its Authorized Representative’s approval. The approved Contract Schedule will become the baseline against which schedule performance is measured. Forecasted deviation of the completion date from this baseline by greater than one week will require a recovery plan addressing the causes of the deviation. The baseline will not be revised except by Change Order.

b. In conjunction with the development of the detailed Contract Schedule, Contractor shall produce production and quantity installation schedules for each major discipline, commodity, and craft activity. These schedules shall reflect in tabular and graphical form the Deliverables to be produced or quantities to be installed each period. These schedules shall be updated by Contractor on a weekly basis throughout execution of the Work.

24.3 Four Week Schedule (Three Week Look-Ahead)

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Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

During the execution of the Work, Contractor shall submit to Company or its Authorized Representative a weekly short term schedule showing the previous week's Work and a three week look-ahead schedule including engineering, procurement, and construction activities as appropriate (the "Four Week Schedule"). As a minimum, the Four Week Schedule shall include all activities, Contract Schedule milestones, and payment milestones identified on the detailed Contract Schedule for the four week period. The Four Week Schedule must identify all activities by area, and must include manpower loading for each activity.

24.4 Daily Report

Beginning with the first day of activity on the Project Site and continuing until completion of the Work, Contractor shall submit a “Daily Report” in form and substance acceptable to Company ‘s Authorized Representative. At a minimum, the Daily Report shall list any safety incidents, manpower by craft, equipment, FWOs, and a brief description of Contractor’s activities. The report for the previous day shall be submitted to the Company and its Authorized Representative by 9:00 a.m. of each working day. Daily reporting may be suspended at the discretion of the Company in the event work is slowed or stopped.

24.5 Weekly Status Report

Beginning with the start of activity on the Project Site and continuing until completion of the Work, Contractor shall submit a “Weekly Status Report” in form and substance acceptable to Company’s Authorized Representative. At a minimum, the Weekly Status Report shall include safety statistics, completed work activities, schedule updates, manpower utilization, FWOs, and CORs. The report for the previous week shall be submitted to Company’s Authorized Representative by 9:00 a.m. of each Monday.

24.6 Monthly Report

a. Following the Effective Date of the Contract, Contractor shall submit a “Monthly Report” in form and substance acceptable to Company or its Authorized Representative. At a minimum, the Monthly Report shall include the following:

24.6.1.1 A brief description of work activities accomplished during the reporting period for all phases of the Work.

24.6.1.2 Milestones Achieved.

24.6.1.3 FWOs and CORs.

24.6.1.4 Status of Documents and Drawings for Approval.

24.6.1.5 Quality Assurance/Quality Control Activities.

24.6.1.6 The updated detailed Contract Schedule including a detailed recovery plan for any schedule milestones that have slipped from the baseline Contract Schedule. The updated

detailed Contract Schedule and Monthly Report shall be submitted as separate documents.

24.6.1.7 A narrative description of all problems affecting progress of the Work, proposed remedies to such problems, and other needs of Contractor.

b. The Monthly Report shall be submitted to Company or its Authorized Representative on the fifth day of each month.

24.7 All reports required by this Section 24 shall be delivered to Company or its Authorized Representative in hard copy and native electronic format including any reports generated with Primavera 6.0. The Company or its Authorized Representative will provide an example of weekly and monthly reports expected from the Contractor to insure proper management and success of this project. Provision of these reports by the Contractor will be in accordance with the Project calendar.

24.8 For Progress Measurement, the Contractor shall adhere to Company or its Authorized Representative’s standard rules of credit milestones, in accordance with Company or Authorized Representative approved progress measurement system. Man-hour budgets will be reasonably spread over discrete elements of identifiable and quantifiable work to provide the budget basis for progress measurement. Budget hours will be earned as quantities are installed. Quantity surveillance will be performed by the Contractor and verified by the Company or Authorized Representative to confirm installed quantities and or earned man-hours. Construction Progress measurement will be updated weekly.

25 Construction Works

Construction Works shall be in first-class operating condition, safe, and fit for the purposes for which they are used. Such Construction Works shall be subject to inspection from time to time by Company, its Authorized Representative or by third parties as may be required by applicable Laws. Any Construction Works that do not conform to the requirements of the Contract or applicable Laws shall be promptly removed by Contractor and replaced without additional cost to Company and without delaying the Contract Schedule.

26 Expediting, Inspection, and Testing

26.1 In addition to tests that may be specified elsewhere in this Contract, Company and its Authorized Representative shall have the right, but not the obligation, to inspect and test Contractor’s Work at any time, including any Work that may be performed at locations other than the Project Site,

Contract _7/27/09 13 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

to ensure compliance with the requirements of the Contract. Any such inspection or lack of such inspection shall not excuse Contractor’s obligation to perform in accordance with the requirements of the Contract. Contractor shall provide access and sufficient safe and proper facilities for such inspections and tests.

26.2 If Contractor covers any portion of the Work prior to (i) an inspection or test required by this Contract, (ii) an inspection or test specified in the schedule of inspect and test activities, or (iii) an inspection or test previously requested by Company or its Authorized Representative, the cost of uncovering and restoring the Work to allow for such inspection or test shall be to Contractor’s account.

26.3 If Industry Practices would require re-examination, then re-examination of any Work may be ordered by Company or Authorized Representative. If, as a result of such re-examination, any part of the Work is determined by Company or Authorized Representative to be defective or to otherwise fail to conform to this Contract, Contractor shall not be reimbursed for uncovering the Work or for the repair or for the corrective work required to be performed or for any restoration costs. If, as a result of such re-examination, the Work is found to conform to the Contract requirements, Company shall reimburse Contractor for the allowable direct documented cost incurred by Contractor to uncover and restore the re-examined portion of the Work and the Contractor shall be entitled to an equitable adjustment to the Contract for delay only in the event that re-examination shows conformity with the Contract.

26.4 Rejection by Company or Authorized Representative of any non-conforming Work shall be final and binding. Rejected Work shall be promptly repaired or replaced by Contractor so as to conform to this Contract and all costs thereof shall be to Contractor’s account. If Contractor fails to promptly commence and diligently continue the repair or replacement of such rejected Work within five (5) days of receipt of written Notice from Company or Authorized Representative to do so, Company or its Authorized Representative may, at its option, cause the rejected Work to be repaired or replaced by others and all costs thereof shall be to Contractor’s account. The refusal or failure to commence correction of the rejected Work upon Directive within five (5) days shall constitute a basis for Termination for Default of Contractor under Section 41 at the sole discretion of Company. If Contractor commences correction as required under this section, Contractor reserves its

right to dispute the required correction for 30 days following the corrective action.

27 Contractor's Shipments

27.1 Contractor shall be responsible for shipping all Contractor-supplied Materials and Equipment and Construction Works to the Project Site including any required export licenses and customs clearance. Contractor shall consign such shipments to itself at the shipping address for the Project, freight fully prepaid. Contractor shall be responsible for making demurrage agreements and for settling any claims by carriers for such shipments.

27.2 Contractor shall advise Company or its Authorized Representative, in writing, in advance of major shipments of Materials and Equipment or the delivery of major items of Construction Works and Contractor shall be responsible for all aspects regarding the arrival, unloading, inspection, and release of the carriers' equipment. Contractor shall coordinate as necessary with Company or it’s Authorized Representatives. Contractor shall promptly unload its shipments and release the carriers' equipment from the Project Site.

28 Country of Origin

Materials and Equipment shall have their origin in the country or countries as required by the Contract. Unless otherwise indicated in the Contract, the country of origin shall be considered the country in which the Materials and Equipment become a commercially recognizable product that is substantially different in basic characteristics, purpose, or utility from its components and that results from fabricating, manufacturing, processing, or a substantial and major assembling of components.

29 Spare Parts

If the Work includes the furnishing of any Engineered Materials and Equipment and if Contractor intends to terminate or discontinue the production of spare parts related to such Materials and Equipment, Contractor shall give Company or its Authorized Representative Notice of its intention to do so in sufficient time to permit Company or its Authorized Representative to obtain their spare parts requirements from Contractor or from others. Contractor shall provide to Company’s Authorized Representative, at no cost, the drawings, blueprints, and specifications for the fabrication, manufacture, and assembly of the spare parts if and as requested by Company or its Authorized Representative. The obligations of this Section 29 shall survive any completion or termination of this Contract.

Contract _7/27/09 14 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

30 Title & Risk of Loss

Title to all Materials and Equipment supplied by Contractor in the performance of its Work shall pass to Company on the earlier of (i) delivery to the Project Site or (ii) Contractor’s receipt of payment from Company. Regardless of which Party has title, risk of loss shall remain with Contractor until Company assumes care, custody, and control or until Final Acceptance, whichever is earlier.

31 Protection of the Work

Regardless of who may hold title, Contractor shall be responsible for protection of the Work, including any Goods or Materials and Equipment furnished to Contractor by others, until Company assumes care, custody, and control or until Final Acceptance, whichever is earlier. Until that time, Contractor shall take all necessary precautions to protect the Work from damage by the elements or by other construction activities.

32 Possession Prior to Final Completion

Company shall have the right to take possession of or use any completed or partially completed portion of the Work as Company may deem necessary for their operations. If Company exercises the foregoing right, Company will provide written Notice to Contractor. Such possession or use shall not constitute acceptance of Contractor's Work, but Contractor shall not be liable for damage or loss to the Work caused by Company, or third parties acting under the control of Company.

33 Warranty of the Work

33.1 Contractor warrants that (i) the Materials and Equipment furnished under the Contract will be of good quality and new unless otherwise required or permitted by the Contract, (ii) the Work will be free from defects not inherent in the quality required or permitted, (iii) the Work will be done in a professional and workmanlike manner in accordance with Industry Practice, and (iv) the Work will conform to the requirements of the Contract.

33.2 The Warranty Period is set out in Section 65. Nothing contained in Section 65 is intended nor shall be construed to limit any other obligations which the Contractor may have under the terms of the Contract. The Warranty Period for correction of Work as described in Section 65 relates only to the specific obligation of the Contractor to correct the Work, and has no relationship to the time within which Company may seek to enforce Contractor’s other obligations under the Contract including Contractor’s liability for latent defects.

33.3 At any time prior to the end of the Warranty Period, Contractor shall replace, repeat, repair, retest, re-inspect, or otherwise correct any portion of the Work that fails to conform to the warranties in Section 33.1. Contractor shall perform any such Corrective Work at its sole expense. In addition, Contractor shall be liable for the cost of correcting any Work of Company, or other contractors or Contractors that is destroyed or damaged by Contractor's Corrective Work or by removal of Contractor’s defective Work.

33.4 In addition to the warranties in Section 33.1 above, and to the extent that Contractor is obligated to supply any Goods under this Contract, Contractor warrants that the Goods are new, of merchantable quality, and fit for their particular purpose. If any Goods are found to be defective or otherwise not in conformance with the Contract, Company or its Authorized Representative shall have the right, upon giving notice and the basis for rejection, to either (a) reject any or all defective or nonconforming Goods or (b) accept and correct the Goods. Contractor shall pay all costs and expenses arising from such rejection or correction.

33.5 Contractor shall perform any required Corrective Work as soon as reasonably possible, but in any event, within five (5) Days after Contractor receives Notice from Company or its Authorized Representative that the Work is nonconforming. If, despite Contractor’s reasonable efforts, the Corrective Work cannot be performed within said five (5) Day period, Contractor shall commence such Corrective Work immediately upon receipt of Notice from Company or its Authorized Representative and shall diligently and, without interruption, perform such Corrective Work until it is completed. If Contractor contends that the Corrective Work directed by Company or its Authorized Representative is not covered by the warranty or is outside the Warranty Period, or that Contractor is not obligated to perform the Corrective Work for other reasons, Contractor shall nevertheless promptly proceed with the Corrective Work in accordance with the Company and or Authorized Representative’s Directive, submit a Notice of claim within seven (7) Days, and pursue its remedies under Section 62 hereof.

33.6 If, during the Warranty Period, the performance of Corrective Work would disrupt the work of others or the commercial operation of the Project or any portion thereof, such Corrective Work shall be coordinated with Company or its Authorized Representative’s operating personnel in order to minimize such disruption. In the event of such

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Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

disruption, Company or its Authorized Representative may require that Corrective Work be performed on an around-the-clock basis, including weekends and holidays. All costs incidental to such Corrective Work, including, but not limited to, overtime premiums and shift differentials, shall be borne by Contractor.

33.7 In the event: (i) Contractor fails to commence Corrective Work promptly within the five (5) Day period prescribed above; or (ii) Contractor commences Corrective Work within the five (5) Day period but, in Company’s or its Authorized Representative’s reasonable opinion, under Industry Practices fails to diligently, and without interruption, prosecute the Corrective Work; or (iii) Company or its Authorized Representative reasonably determines that a case of emergency exists, where delay in commencing Corrective Work could result in serious loss or damage to persons or property; or (iv) Company or its Authorized Representative, in its sole reasonable discretion, determines that the requirements of its Project Schedule will be adversely affected if the Corrective Work is not performed prior to the expiration of the five (5) Day period; or (v) Company or its Authorized Representative reasonably determine that the Corrective Work must be performed prior to the expiration of the five (5) Day period in order to return the Work or the Project to commercial use, then the Corrective Work may be performed by Company or its Authorized Representative and all costs thereof shall be to Contractor's account, provided that Company or its Authorized Representative, as applicable, has given reasonable Notice thereof to Contractor and afforded Contractor the opportunity to perform Corrective Work within the time determined by Company or its Authorized Representative to be required. Further, the refusal or failure of Contractor to commence Corrective Work within five (5) Days of Notice from Company or its Authorized Representative shall constitute a basis for Termination for Default under Section 41, at the sole discretion of the Company, regardless of the degree of completion of the Work by the Contractor.

33.8 Company shall have the right to assign Contractor’s warranties to other third parties.

33.9 Company shall operate and maintain the equipment in a manner consistent with all applicable manufacturer specifications. Contractor shall not be obligated to warranty any claim by Company arising directly or indirectly from Company’s failure to meet its obligation to operate

and maintain the Equipment or care for materials in a manner consistent with applicable manufacturer specifications.

34 Warranty of Title

Contractor warrants that title to the Work, including the Materials and Equipment, shall be clear, marketable, and free of any defects, liens, charges, or encumbrances whatsoever.

35 Warranty against Infringement of Patents, Copyrights, Trademarks, and Trade Secrets

Contractor represents and warrants that no portion of the Work infringes any patent, copyright, trademark, or trade secret. If the Work or any portion thereof is held to constitute an infringement of any patent, copyright or trademark or an unauthorized disclosure of any trade secret, Contractor shall, at its own expense, and, at Company’s option (i) procure for Company the perpetual right to use such Deliverables (ii) replace the Deliverables with implements that are not infringing or do not disclose any trade secret, or (iii) modify the Work so that it becomes non-infringing or does not disclose any trade secret. Any such replacement of or modification to the Work shall meet the requirements of and shall be subject to the terms of this Contract.

36 Intellectual Property

Whenever Contractor is required to use any design, device, material, or process covered by letters, patent, trademark, or copyright, Contractor shall indemnify and save harmless Company from any and all claims for infringement by reason of the use of such protected design, device, material or process in connection with the Agreement and shall indemnify Company for any costs, expenses and damages which it may be obliged to pay by reason of such infringement at any time during the prosecution or after the completion of the Services; provided, however, that Contractor has no such liability for equipment, design, material or processes furnished by Company.

37 Changes

37.1 Company and its Authorized Representative shall have the right to direct Contractor to make changes in the Work that are within the general scope of the Work including additions, deletions, and revisions in the Goods, the Materials and Equipment, the Construction Works, or the Contract Schedule. To the extent that any such change impacts Contractor’s cost of or time for performance, the Total Contract Cost and Contract Schedule shall be equitably adjusted to compensate for such impact. Changes shall be accomplished using Request for Change

Contract _7/27/09 16 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

Proposals, Field Work Orders, Change Order Requests, Change Orders, or a combination thereof.

37.2 Request for Change Proposal

Request for Change Proposal (“RFCP”) is a Company Directive that advises Contractor about a potential change in the Work. Unless otherwise stated in the RFCP or in some subsequent Company Directive, Contractor shall not implement the change until it receives a fully executed Change Order.

37.3 Field Work Orders

A Field Work Order (“FWO”) is a Company Directive that instructs Contractor to take some immediate action in connection with the Work. FWOs are issued when the circumstances are such that there is not time to issue a RFCP or a Change Order. Upon receipt of a FWO, Contractor shall immediately proceed in accordance with the terms of the FWO. Any impact of an FWO on the Total Contract Cost or Schedule shall be adjusted by a formal Change Order.

37.4 Change Order Requests

Within seven (7) Days after the occurrence of any event that Contractor believes entitles Contractor to a Change Order, Contractor shall determine whether it will have any cost or Contract Schedule impact on Contractor’s Work. If Contractor believes that it will have any such impact, Contractor shall prepare and submit a Change Order Request (“COR”) to Company. When submitting a COR, Contractor shall include:

a. a detailed narrative describing the factual basis of the request including references to the applicable Contract provisions,

b. a detailed build-up of the price of the proposed change of the GMP scope, if any, including labor (hours and rates), Goods, Materials and Equipment, Subcontractors, Suppliers, Construction Works and Services, (exclusive of markups for profit), together with supporting documentation such as time sheets and vendor invoices, and

c. a detailed analysis showing the impact, if any, on the Contract Schedule.

37.5 Change Orders

a. A Change Order (“CO”) is a formal written instrument stating (i) the change in the Work, (ii) the adjustment, if any, in the Total Contract Cost, and (iii) the adjustment, if any, in the Contract Schedule.

b. Upon receipt of a properly documented COR, the Parties shall negotiate in good faith to determine whether Contractor is entitled to a Change Order and, if so, the appropriate equitable adjustment, if any. Change Orders are to be managed outside the GMP structure and priced individually. Contingency under the GMP is not available to fund Change Orders, as defined in Attachment B –

Price and Payment, Section 3.3 – Contract Contingency. In determining the price of Changes to scope of the Work, the allowance for profit shall be determined on the basis of the cumulative net value of change and how it relates to the Dead-Band referenced in Attachment B – Price & Payment, Section 4 – Change Management. Contractor shall not be entitled to any damages; including loss of anticipated profits, based on a decrease in the Work.

c. If the Parties are unable to agree on the disposition of a COR, including those necessitated by a FWO, Company will either (i) issue a Notice denying Contractor’s request or (ii) issue a unilateral Change Order setting forth Company’s final determination regarding the adjustments. If Contractor disagrees with Company’s determination, it may pursue the matter under Section 62 (“Disputes”). Pending resolution of the dispute, Contractor shall continue to perform its Work, including the disputed Work, in accordance with the Contract and the Company’s Directives.

37.6 Claims

A Claim is a written demand by Contractor seeking an adjustment in the Total Contract Cost or Contract Schedule or some other relief under the terms of the Contract Documents for events other than a RFCP or FWO. Contractor shall provide Notice to Company of any potential Claim within seven (7) Days after the event giving rise to the Claim. Within fifteen (15) days thereafter, Contractor shall submit a COR for any claimed cost or Contract Schedule impacts. The Claim will be processed in the same manner as set forth in Section 37.4.

37.7 Waiver

Contractor hereby expressly waives any right to an equitable adjustment in the Total Contract Cost or the Contract Schedule; (i) for any event that Contractor fails to pursue in accordance with this Section 37, (ii) for work done by Contractor without a Company Directive or Change Order, or (iii) for claims asserted after Contractor submits its final invoice.

38 Final Completion and Acceptance

38.1 Final Completion of the Work shall be deemed to have occurred when all of the following have been completed: (i) the Work, including any punch list items, has been fully completed in accordance with the requirements of the Contract; (ii) all inspections and tests have been successfully completed; (iii) all Deliverables including any required operation and maintenance manuals, special tools, and operating certificates have been submitted; (iv) all Contractor’s, supplies, rubbish, Construction Works, excess Materials and Equipment, and temporary facilities have been removed from the Project Site; (v) Contractor has restored any facility affected by Contractor to its original condition and

Contract _7/27/09 17 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

and/or utility belonging to Company used or state of repair; and (vi) all Contractor’s Subcontractors and Suppliers have been paid in full as shown by properly executed lien releases.

38.2 When Contractor believes that it has achieved Final Completion, it shall so Notify Company and its Authorized Representative. If Company agrees, Company shall endorse Contractor’s Notice. If Company does not agree, it shall Notify Contractor of its reasons for refusing to endorse the Notice. Thereafter, Contractor shall work diligently to correct the deficiencies and resubmit its Notice. This process may be repeated as many times as necessary to obtain Company’s endorsement.

38.3 Company endorsement of Contractor’s Notice of Final Completion shall constitute Company’s Final Acceptance of the Work. Such Final Acceptance shall not relieve Contractor of its continuing obligations under this Contract, including its warranty and indemnity obligations.

39 Suspension of the Work

39.1 Company shall have the unilateral right to suspend performance of the Work, in whole or in part, by giving Notice to Contractor specifying the extent to which the Work is suspended and the effective date of such suspension. Contractor shall suspend performance of the Work to the extent that the Notice so specifies, but shall continue to perform any portion of the Work not suspended. To the extent that any such suspension affects Contractor’s cost of or time for performance, the Total Contract Cost and Contract Schedule shall be equitably adjusted to compensate for such impact.

39.2 All requests for adjustment in the time or cost for performance under this Section 39 shall be submitted to Company in accordance with the provisions of Section 37.

40 Termination for Convenience

40.1 Company shall have the unilateral right to terminate this Contract, in whole or in part, for its convenience, by giving Notice to Contractor specifying the extent to which the Contract is terminated and the effective date of such termination. Contractor shall discontinue performance of the Work to the extent that the Notice so specifies, but shall continue to perform any portion of the Work not terminated. To the extent that any such termination affects Contractor’s cost of or time for performance, the Total Contract Cost and Contract Schedule shall be equitably adjusted to reflect any such impact.

40.2 Contractor, if and to the extent requested to do so by Company, shall promptly assign to Company, in form and content satisfactory to Company, Contractor’s rights, title and interest to the Materials and Equipment and Construction Works purchased for or committed to the terminated Work (whether completed or in progress), and Work in progress and completed Work (whether at Project Site or at other locations), or shall otherwise dispose of same in accordance with the Company's Directives.

40.3 Subject to Contractor’s compliance with the provisions of this Section 40 and other applicable sections of the Contract, Contractor shall recover from Company, as complete, full, and final settlement for such terminated Work, a sum equal to its actual direct cost for the terminated Work satisfactorily performed as of the effective date of termination, plus an allowance for reasonable overhead and profit on such direct cost of the Work performed, provided, however, that such a sum does not exceed a pro rata portion of the Total Contract Cost, commensurate with the ratio that the terminated Work performed by Contractor and accepted by Company as of the effective date of the termination bears to the entire Work specified under this Contract prior to termination. Any payment to Contractor hereunder shall be less any amounts previously paid to Contractor. In addition, Contractor shall recover from Company its reasonable and direct costs incurred to terminate its subcontracts, including lease and rental agreements, supply agreements, and other commitments. In no event, however, shall the total payment to Contractor under this Section 40 exceed the Total Contract Cost prior to termination. Contractor shall not be entitled to recover indirect, special, incidental, consequential or exemplary damages; including loss of profits or revenue on Work not performed.

40.4 All requests for compensation under this Section 40 shall be submitted to Company in accordance with the provisions of Section 37.

41 Termination for Default

41.1 If Contractor (i) fails to supply adequate Competent Persons to perform the Work, (ii) fails to perform the Work in a safe professional and workmanlike manner; (iii) fails to abide by all applicable Laws, (iv) fails to make prompt payment to its Subcontractors and Suppliers, v) fails to abide by Company or Authorized Representative Directives, (vi) or is otherwise in breach of its obligations under this Contract and Contractor fails to correct any such condition within seven (7) Days after receipt of Notice from Company,

Contract _7/27/09 18 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

Company may without any further Notice or prejudice to any other right or remedy, terminate the contract for default.

41.2 In the event of termination by Company under this Section 41, Contractor, if and to the extent requested to do so by Company, shall promptly assign to Company, in form and content satisfactory to Company, Contractor’s rights, title and interest to Materials and Equipment purchased for or committed to the terminated Work (whether completed or in progress) and Work in progress and completed Work (whether at the Project Site or at other locations) and to those subcontracts, lease and rental agreements, supply agreements, and other commitments so designated by Company. Company, at its option and without waiving any other available remedy under this Contract or at Law or in equity, may take possession of the Work at the Project Site and of any or all of the Materials and Equipment (whether delivered to the Project Site or on order by Contractor) and finish the terminated Work by whatever method Company deems necessary; including, obtaining Materials and Equipment similar to those to be provided under this Contract, on terms and conditions that Company deems appropriate.

41.3 In the event Company elects to terminate this Contract pursuant to this Section 41, Company shall have the right to use any of Contractor’s Intellectual Property and proprietary information that Company deems necessary to complete the Work.

41.4 In the event of a termination for default, Contractor shall be liable to Company for all Losses incurred by Company arising from the default including all costs to complete the terminated Work. Upon termination under this Section, Company may withhold any further payments to Contractor unless and until all of the Work, including the terminated Work, has been completed and Accepted by Company. Company shall thereafter determine the Losses incurred by Company as a result of the termination. If the Losses are less than the unpaid balance of the Total Contract Cost, Company shall pay the difference to Contractor. If the Losses exceed the unpaid balance of the Total Contract Cost, Contractor shall promptly, after receipt of Company’s invoice, pay to Company the amount of such excess. Contractor shall continue to be fully liable to Company for all other damages to Company. If the Contract is terminated under this Section and it is later determined or adjudged that there is no default, such termination shall be considered to be a termination for convenience

and not a breach of contract, and the provisions of Section 40 (Termination for Convenience) shall apply.

42 Insurance

Contractor shall maintain the insurance coverage described in Attachment C (Insurance Requirements).

43 Indemnity

43.1 To the extent of its fault or negligence, Contractor agrees to indemnify, hold harmless, and defend Company, and Lenders (the “Indemnified Parties”) from and against any Losses arising:

a. on account of injury, illness, or death of any persons including the employees of the Indemnified Parties, Contractor, its Subcontractors, Suppliers, and other third parties,

b. injury to or destruction of tangible property,

c. from failure of Contractor to comply with any Laws,

d. from claims by any collective bargaining group or individual employee that Contractor has failed to pay wages, benefits, withholdings, dues, or assessments,

e. from failure to pay Employees, Subcontractors or Suppliers, or

43.2 The provisions of this Section shall survive Final Acceptance and the termination of this Contract.

44 Waiver of Consequential Damages

Except for (i) those damages specifically recoverable by Company or Contractor as set forth elsewhere in the Contract, (ii) specified liquidated damages, if any, or, (iii) those consequential damages resulting from the willful misconduct of Company or Contractor, neither Party shall be liable to the other, whether such liability arises out of contract, warranty, tort (including negligence), strict liability, or any other cause or form of action whatsoever, for consequential, special, indirect, punitive, exemplary, or incidental loss or damage.

45 Limitation of Liability

Contractor’s liability to Company shall not exceed the GMP. The foregoing limitation upon Contractor’s liability shall apply under any theory of recovery regardless of Loss, including contract, warranty, tort (including negligence whether actual, imputed, or presumed by operation of law), strict liability. However, such limitation shall not apply to Contractor’s indemnity or insurance obligations or to any claims arising directly or indirectly from Contractor’s willful misconduct or gross negligence.

Contract _7/27/09 19 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

46 Force Majeure

46.1 Neither Party shall be responsible for or liable for or be deemed in breach of this Contract because of any delay, interference, disruption, or hindrance in the performance of their respective obligations hereunder, if and to the extent that any such impact in performance is due solely to a Force Majeure event.

46.2 The following events shall not be considered Force Majeure events within the meaning of this Section:

a. changes in market conditions that affect the demand for the services of Contractor or its Subcontractors or Suppliers;

b. late delivery of Materials and Equipment caused by congestion at the facilities of Contractor or its Subcontractors or Suppliers or elsewhere, an oversold condition of the market, inefficiency, or similar occurrence or condition;

c. late performance by Contractor or its Subcontractors or Suppliers caused by a shortage of labor or supervision, inefficiency in prosecuting their respective portions of the Work, or similar occurrence or condition;

d. Contractor’s failure or the failure of its Subcontractors or Suppliers to secure and maintain permits, licenses, or other governmental approvals necessary for prosecution of the Work or their respective portions of the Work;

e. normal weather conditions, including adverse weather conditions predictable through analysis of 100 year historical weather data, and;

f. any negligent or intentional acts, errors, omissions or acts which are the fault of the affected Party.

46.3 If Contractor experiences a delay, interference, disruption, or hindrance or other inability to perform that is due solely to a Force Majeure event described herein, the Contract Schedule shall be adjusted and the scheduled completion date shall be extended by a period of time equal to the amount of time reasonably determined by the Parties to be necessary for Contractor to recover from such impact in performance. Contractor expressly agrees that adjustment of the Contract Schedule shall be Contractor’s sole and exclusive remedy and Company’s sole and exclusive liability in the event Contractor is delayed, interfered with, disrupted, or hindered in the performance of its Work by a Force Majeure event.

46.4 The Party claiming a delay under this Section shall use its best efforts to remedy any inability to perform due to the occurrence of a Force Majeure event. As and when such affected Party is able to resume performance of its obligations under this

Contract, such affected Party shall give the other Party Notice to that effect.

46.5 If Contractor experiences a delay, interference, disruption, or hindrance or other inability to perform that is due to a Force Majeure event described herein, Contractor shall take all reasonable steps to reduce, mitigate, remove, or overcome the delay, interference, disruption or hindrance or its direct or indirect effects or impacts. If Contractor fails to take such action as Company may, in its sole discretion and after seven (7) days written Notice to Contractor, and at Contractor’s expense, initiate measures to remove or relieve such delay, interference, disruption, or hindrance or its direct or indirect effects or impacts and thereafter require Contractor to resume full or partial performance of the Work, or may declare Contractor in default under this Contract.

46.6 Failure of the affected Party to provide the Notice or to take the prescribed actions hereunder shall be deemed a waiver by the affected Party of its right to seek an extension of time for its performance.

47 Avoidance of Liens

47.1 Third party Liens - Contractor shall promptly pay for all things including Services, Labor, Construction Works, Materials and Equipment, and Goods used or furnished by Contractor in the performance of the Work and shall, at its sole expense, keep the Project free and clear of any liens. If Contractor fails to release and discharge any such lien against the Project within seven (7) Days after receipt of Notice from Company to remove such lien, Company may, at its option, pay, discharge, or release the lien or otherwise deal with the lien claimant. In the event that Company elects to pay any such lien claim, the amount of such payment shall be considered reasonable. Contractor shall be liable to Company, as applicable, for any Losses incurred by Company in resolving lien claims including reasonable attorney fees and court costs. Company shall be entitled to deduct such costs from payments otherwise due to Contractor.

47.2 Liens by Contractor – Unless otherwise required by statute, the Parties agree that Company may discharge any lien filed by Contractor by posting a surety bond with a penal sum equal to 105% of the lien claim amount.

48 Proprietary Information

48.1 Unless required by applicable Laws, neither Party shall disclose to third parties, information obtained from the other Party in the performance of this Contract which has been designated by that Party

Contract _7/27/09 20 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

as confidential or proprietary information (“Confidential or Proprietary Information”).

48.2 This obligation shall not apply to any information (a) in the public domain, (b) already in the Party’s possession free of any confidentiality agreement and not obtained from the other Party, (c) provided to a Party from a third party free of any confidentiality obligation and not obtained from the other Party, or (d) independently developed. Nothing in this Section shall limit or preclude either Party from use of Confidential or Proprietary Information in its possession prior to the execution of this Contract in accordance with the terms of any agreements governing such use.

48.3 Either Party shall have the right, without the other Party’s approval, to disclose Confidential or Proprietary Information to the limited extent required to comply with any request or order of a governmental agency or court. If a Party intends to disclose Confidential or Proprietary Information to any governmental agency or court, that Party shall, to the extent it does not violate or fail to comply with any such request or order, advise the other Party prior to disclosure as defined in article 67. Each Party is responsible for taking any action it deems necessary, such as seeking a protective order from the appropriate authority, to protect its confidential and proprietary information.

48.4 The Contract, and any other information issued to or made available to Contractor by or through Company in connection with the Work are Proprietary Information whether or not so marked by Company. All such Proprietary Information furnished by Company to Contractor shall remain Company’s property. Upon completion of the Work, Contractor shall, as requested by Company, either destroy or return such documents including any copies thereof except that Contractor may retain one copy for its records.

49 Gratuities

49.1 Contractor, its employees, agents, and representatives, shall not give or offer to give to an officer, official, or employee of Company, gifts, entertainment, payments, loans, or other gratuities to influence the award of this Contract or any other contract or to obtain favorable treatment under this Contract or any other contract or purchase order.

49.2 Violation of this Section 49 may be deemed by Company to be a material breach of this Contract and any other contract between Contractor and Company, and may subject all contracts with Contractor to termination for default under the provisions of Section 41 (Termination For Default)

of this Contract, as well as any other remedies at law or in equity available to Company.

50 Assignment

Contractor shall not sell, assign, or transfer any of its rights or obligations under this Contract, in whole or in part, by operation of Law, or otherwise, without the prior written consent of the Company. Any assignment of this Contract in violation of the foregoing shall be voidable at the option of the Company. However, Company shall have the right to assign this Contract to Lenders, or Affiliated Companies including their respective successors or assigns each of whom shall have the right to make subsequent assignments. Contractor shall include in any subcontracts, lease agreements, and purchase orders a provision giving to Contractor the right to assign any such subcontracts and purchase orders to the Company, its successors, and assigns and giving each the right to make subsequent assignments.

51 Notices

Any Notice required by this Contract shall be in writing, signed by an Authorized Representative of the Party issuing the Notice, and delivered to the Authorized Representative of the other Party at the address given on the signature page of the Contract. A Notice shall be effective upon receipt or on the Notice's effective date, whichever is later. Notice shall not be made by telephone, telegraph, facsimile, or electronic mail.

52 Severability

Any invalid or unenforceable provision of this Contract shall be deemed severed from the Contract, and the balance of the Contract shall be reformed in such a manner as to effect, to the maximum extent possible, the original intent of the Parties.

53 Modifications and Amendments

No modification, amendment, rescission, waiver, or other change of or to this Contract shall be of any force or effect unless such modification, amendment, rescission, waiver, or other change is set forth in a fully executed Change Order.

54 Remedies

Unless otherwise designated as “sole and exclusive,” all remedies allowed by the Contract may be exercised cumulatively and concurrently with each other provided there is no double recovery for the same damages. Where remedies are not specified in this Contract, then the Parties shall be entitled to their remedies at law or in equity for such occurrence, subject, nevertheless, to the Contractor’s Limitation of Liability in Section 45.

Contract _7/27/09 21 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

55 Publicity

Contractor shall not issue news releases or publicize or issue advertising pertaining to the Work or to this Contract without first obtaining the written approval of Company.

56 Site Records & Audit

56.1 Contractor shall maintain, at the Project Site, one (1) record copy of this Contract, including all Drawings, Specifications, addenda, Change Orders, Field Work Orders, and other modifications in good order and currently marked to record changes and selections made during construction. In addition, Contractor shall maintain, at the Project Site, one (1) record copy of approved shop drawings, product data, samples, and other Deliverables required of Contractor. These record copies shall be available to Company at all times and shall be delivered to Company upon completion of the Work. Delivery of the record copies shall be a condition precedent to Final Acceptance.

56.2 Company reserves the right to perform an audit of all Contractor’s and associated Subcontractors and Vendors documentation. Company shall be allowed to perform total of (3) audits, including one (1) audit that can be performed after Final Completion. Audit locations and/or additional follow-up audits shall be determined based on audit conditions/findings.

57 Interpretation

57.1 Any reference to an article, section, paragraph, exhibit, appendix, or attachment refers to an article, section, paragraph, exhibit, appendix, or attachment of or to this Contract unless otherwise specified. The table of contents and the headings and subheadings are inserted for convenience only and shall not be deemed a part of this Contract nor taken into consideration in the interpretation or construction of this Contract.

57.2 As used in this Contract, the singular includes the plural, and the masculine includes the feminine. The terms "hereof," "herein," "hereunder," and comparable terms refer to the entire Contract with respect to which such terms are used and not to any particular article, section, or subdivision thereof. The terms “includes” and “including” shall mean “including, but not limited to.”

57.3 In the case of any conflict between or among the documents or provisions that make up Attachment A, including the Drawings and Specifications, the Scope of Work in Attachment A shall take precedence over the Drawings and Specifications

and the Drawings shall take precedence over the Specifications and, within Drawings text shall take precedence over graphics, and the specific shall take precedence over the general.

57.4 If any provision of this Contract contemplates that Company and Contractor will negotiate any matter after the Effective Date, such provision shall be construed to include an obligation on the part of the Parties to negotiate in good faith in accordance with the intent of this Contract.

58 English Language

Contractor hereby represents that it has sufficient knowledge of the English language to fully understand this Contract. All Deliverables provided by Contractor shall be in the English language. Contractor shall bear all costs of translation and assumes all risk of such translation.

59 Non-Waiver

Any Party’s waiver of any breach or failure to enforce any of the terms, covenants, conditions, or provisions of this Contract at any time shall in no way affect, limit, modify, waive, or be deemed to affect, limit, modify, or waive that Party’s right thereafter to enforce or compel strict compliance with each term, covenant, condition, or provision of this Contract, any course of dealing or custom of the trade notwithstanding.

60 Survival

In order that the Parties may fully exercise their rights and perform their obligations hereunder arising from the performance of the Work, any provisions of this Contract that are required to ensure exercise of such rights or performance shall survive the expiration or termination of this Contract regardless of the cause for such termination and regardless of whether or not such termination applies to all or only part of this Contract.

61 Laws and Regulations

Contractor shall comply strictly with all Laws applicable to Contractor's Work. Contractor shall not, under any circumstances, apply for any exception or variance from applicable Laws without Company's prior written approval. This Contract shall be interpreted and applied in accordance with the laws of the State of Montana without regard to Montana’s choice or conflict of law rules or statutes.

62 Disputes, Forum and Applicable Law

62.1 This Agreement shall be governed in all respects by the laws of the State of Montana.

a) When a Dispute has arisen and negotiations between the parties have reached an impasse, either party may give the other party written notice

Contract _7/27/09 22 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

of the Dispute. In the event such notice is given, the parties shall attempt to resolve the Dispute promptly by negotiations between representatives who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for the matter. Within ten (10) days after delivery of the notice, the receiving party shall submit to the other a written response. Thereafter, the representatives shall confer in person or by telephone promptly to attempt to resolve the dispute. All reasonable requests for information made by one party to the other will be honored.

b) If the dispute has not been resolved by negotiation between the representatives within thirty (30) days of the notice, or if the parties have failed to confer within twenty (20) days after delivery of the notice, the parties shall endeavor to settle the dispute by non-binding mediation. The mediation shall consist of both parties agreeing to one neutral mediator, providing the mediator with simultaneous, non-shared written position statements, and daylong mediation at the chosen mediator’s desired location.

c) Should the mediation not lead to settlement of the dispute, then either party may proceed to a court of competent jurisdiction.

d) All negotiations and proceedings pursuant to this process are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence and any additional confidentiality protections provided by applicable law.

62.2 Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against either of the parties in the courts of the State of Montana, or, if it has or can acquire jurisdiction, in the United States District Court for the District of Montana and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on either party anywhere in the world.

63 Notice of Affirmative Action

If the Work or any portion thereof is performed in the United States of America, then, for such Work or portion of the Work, Contractor shall comply with Executive Order 11246 (as amended), the Vocational Rehabilitation Act of 1973 (as amended), the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (as amended), and

their implementing regulations codified at 41 C.F.R. 60-1.4(a), 41 C.F.R. 60-741.4, and 41 C.F.R. 60-250.4, respectively, all of which are incorporated herein by reference and made part of this Contract.

64 Warranty Period

The Warranty Period for Contractor to correct its defective Work shall be twenty four (24) months from Final Acceptance unless otherwise stated herein. Any Corrective Work done during the Warranty Period shall be warranted for an additional twenty-four (24) month period.

65 Contract Performance Security

65.1 Within seven (7) days after the Effective Date or prior to mobilization to the site, whichever is earlier, Contractor shall furnish an irrevocable Letter of Credit (LOC) in the amount of five million dollars ($5,000,000.00) as a guaranty on behalf of Contractor that the terms of this Contract shall be complied with in every particular. The LOC shall (a) name Company or its designee as the beneficiary, (b) be issued by a bank with a major presence in the United States, and (c) be substantially in the form of Exhibit 5. Company shall not be obligated to make any payments to Contractor for any purpose until the LOC is furnished to Company.

65.2 The LOC shall remain in full force and effect until the end of the Warranty Period provided, however, that upon Final Acceptance of the last generating unit, Company will accept a substitute LOC for two million, five hundred thousand dollars ($2,500,000.00) plus the amount of any potential or unpaid liquidated damages as determined by Company.

65.3 Upon discovery of an event that could result in a draw on LOC, Company will provide informal communication to the Contractor identifying the event in question to allow Contractor an opportunity for remedy. If Contractor and Company fail to mutually resolve the event to Company satisfaction, Company will exercise its rights under Article 65.4.

65.4 Company is required to give Contractor 15 calendar days written Notice of it intent to draw upon and exercise its rights under the LOC.

66 Disclosure

Contractor acknowledges that Company is a regulated public utility. Further, Contractor acknowledges and accepts that Company may be compelled, obligated, ordered, or otherwise directed to produce this Contract, including all attachments, schedules, exhibits, and other documentation that may be required by federal or state

Contract _7/27/09 23 of 63 Contractor Initials ____

Company Rep Initials ____

Contract Number – 84670

Contract Title – EPC Balance of Plant

Contractor – NewMech Companies, Inc.

Project Name – Mill Creek Generating Station (MCGS)

regulators or other governmental authority. Contractor expressly acknowledges the potential of such disclosures and the potential for the Agreement to become part of the

public record and expressly accepts the provisions of Section 48.1 of this Contract.

Contractor Initials	Document
N/A	Change Orders, if any
_____________	Contract Agreement
_____________	Attachment A – Scope of Work
_____________	Attachment B - Price & Payment
_____________	Attachment C – Insurance Requirements
_____________	Attachment D – Not Used
Provided by Contractor	Attachment E – Safety Manual & Plan
Provided by Contractor	Attachment F – QA/QC Manual
Provided by Contractor	Attachment G – Prequalification Forms for Subcontractors
_____________	Attachment H – Invoice Process Flow Chart
_____________	Attachment I – Permits Provided by Company
_____________	Attachment J – Dead Band Profit Adjustment Process for Change Orders
_____________	Attachment K – GMP Examples
_____________	Attachment L – Indemnity Agreement
_____________	Exhibit 1 – Partial Lien Release
_____________	Exhibit 2 – Final Lien Release
_____________	Exhibit 3 – Release to Work Form
_____________	Exhibit 4 – Requisition for Payment
_____________	Exhibit 5 – Form of Letter of Credit
_____________	Exhibit 6 – Change Order Request Form

For Contractor:	For Company:
By:_______________________________	By:_____________________________
Title: _____________________________	Title: ___________________________
Date: _____________________________	Date: ___________________________

For Contractor:	For Company:
Name:	Name:
Address 1:	Address 1:
Address 2:	Address 2:
Address 3:	Address 3:
Tel:	Tel:
Fax:	Fax:
Email:	Email:
Cell:	Cell:

ITEM	DESCRIPTION
MILESTONE PAYMENTS
a.	Insurance Cost shall be paid upon receipt of approved certificate
b.	Letter of Credit Cost shall be paid upon receipt of approved Letter of Credit
c.	Mobilization paid upon actual percent complete of mobilization with initial payment per section 5.12 below.
PROGRESS PAYMENTS
a.	Engineering & Design shall be paid on approved progress basis.
b.	Applicable Sales & Use Tax shall be paid with each applicable invoice.
c.	Direct & Indirect Material shall be invoiced and paid as accepted at site.
d.	Direct & Indirect Labor Works shall be paid based on approved progress complete.
e.	Direct Construction Equipment Works shall be paid based on approved Direct Work progress complete.
f.	OH&P shall be paid in percentage proportionate to the progress of approved Direct Work progress complete.

Milestone Number	Description	Daily Liquidated Damages Amount
Milestone A	Unit # 1 Substantial Completion – 9/25/10	see below
Milestone B	Unit # 2 Substantial Completion – 10/21/10	see below
Milestone C	Unit # 3 Substantial Completion – 11/10/10	see below
Milestone D	Final Completion of Contractor’s Work – 12/31/10	$ 5,000.00

1	Definitions	3	34	Warranty of Title	16
2	General	6	35	Warranty against Infringement of Patents, Copyrights, Trademarks, and Trade Secrets	16
3	Representations by Contractor	6			16
4	Scope of Work	6	36	Intellectual Property	16
5	Price & Payment	7	37	Changes	16
6	Schedule	7	38	Final Completion and Acceptance	17
7	Independent Contractor	7	39	Suspension of the Work	18
8	Supervision and Labor	7	40	Termination for Convenience	18
9	Subcontractors and Suppliers	8	41	Termination for Default	18
10	Labor Relations	8	42	Insurance	19
11	Environmental, Health & Safety	8	43	Indemnity	19
12	Hazardous Materials	9	44	Waiver of Consequential Damages	19
13	Cleanup	9	45	Limitation of Liability	19
14	Stop Work Orders	9	46	Force Majeure	20
15	Permits & Licenses	9	47	Avoidance of Liens	20
16	Submittals	9	48	Proprietary Information	20
17	Issued for Construction Documents	10	49	Gratuities	21
18	Ownership and Use of Contractor Deliverables	10	50	Assignment	21
19	Substitutions	10	51	Notices	21
20	Discrepancies	11	52	Severability	21
21	Quality Control/Quality Assurance Program	11	53	Modifications and Amendments	21
22	Materials Management Procedure	11	54	Remedies	21
232323	Control of Materials and Equipment Furnished by Company	11	55	Publicity	22
232323	Control of Materials and Equipment Furnished by Company	11	56	Site Records & Audit	22
24	Project Controls Requirements	12	57	Interpretation	22
25	Construction Works	13	58	English Language	22
26	Expediting, Inspection, and Testing	13	59	Non-Waiver	22
27	Contractor's Shipments	14	60	Survival	22
28	Country of Origin	14	61	Laws and Regulations	22
29	Spare Parts	14	62	Disputes, Forum and Applicable Law	22
30	Title & Risk of Loss	15	63	Notice of Affirmative Action	23
31	Protection of the Work	15	64	Warranty Period	23
32	Possession Prior to Final Completion	15	65	Contract Performance Security	23
33	Warranty of the Work	15	66	Disclosure	23

Days	Daily Liquidated Damages Amount
1-10	$ 10,000.00
11-20	$ 15,000.00
21-30	$ 25,000.00
31 or more	$ 35,000.00

	Issuing Agency	Permit/Approval Name	Nature of Permit
FEDERAL GOVERNMENT
1	Federal Aviation Administration	Notice of Proposed Construction or Alteration	Tower location and height relative to air traffic corridors
2	US Environmental Protection Agency	Acid Rain Permit	Permit to comply with Acid Rain Program monitoring, recordkeeping and reporting requirements.

STATE GOVERNMENT
3	Montana Department of Environmental Quality	Air Quality Pre-Construction Permit	Permit for the construction, installation and operation of equipment or facilities that may directly or indirectly cause or contribute to air pollution.
4	Montana Department of Environmental Quality	Air Quality Operating Permit	Title V Operating Permit
5	Montana Department of Environmental Quality	General Discharge Permit for Stormwater Associated with Construction Activities	Permits industrial activities that would result in the discharge of stormwater to waters of the state.
6	Montana Department of Environmental Quality	Underground Storage Tanks	Permits for installation and operation of underground storage tanks.
7	Montana Department of Natural Resources and Conservation	Water Right Change of Use for Generation Plant water	Would allow use of existing water right from the Silver Lake pipeline.
8	Montana Department of Transportation	Utility Crossing Permits	Grant state highway utility crossing permits for utilities and access roads that may encroach on state highway right-of-ways.

LOCAL GOVERNMENT
9	County Weed Control Districts	Noxious Weed Management Program	Provides containment, suppression, and eradication of noxious weeds.
10	County Floodplain Administrators	Floodplain Development Permit	Allows construction activities within a designated 100-year floodplain.
11	Boards of County Commissioners	Easement grants and county road crossing permits	Consider issuance of right-of-way easements grants and road crossing permits for county property and roadways.
12	Anaconda-Deer Lodge County	TIFID	Zoning requirements
13	Anaconda-Deer Lodge County	Development Permit	Permit for all land development and building activity in the county.
14	Anaconda-Deer Lodge County	Conditional Use Permit-Plant Site	Zoning permit approving use of the site for generation purposes
15	Anaconda-Deer Lodge County	Conditional Use Permit-Gas Compressor Site	Zoning permit approving use of the site for gas compressor purposes
16	Anaconda-Deer Lodge County	Development Permit-Gas Compressor Site	Permit for all land development and building activity in the county.
17	Butte-Silver Bow	Water Agreement	Water usage from Silver Lake waterline.
18	Anaconda-Deer Lodge County	Sewer Agreement	Connection / use of sewer line.
19	Anaconda-Deer Lodge County	Municipal Water Agreement	Connection to potable water line and use of potable water.

OTHER
20	Butte, Anaconda & Pacific Railway	Railroad crossing permits	Utilities constructed within railroad right-of-ways (over, under & parallel).

Definitions:
* Actual Cost = Indirects and Directs (excluding change orders)
* Dead-Band = +/-		$ 2,703,769	Value is determined based on 5% of Total GMP Price

Example:
	GMP

		GMP Indirect and Direct Price		$ 44,659,440
	~10%	Contingency		$ 4,500,000
		SubTotal GMP Cost		$ 49,159,440.00
	3%	Overhead		$ 1,474,783
	7%	Profit		$ 3,441,161


		Total GMP Price		$ 54,075,384

	Profit is 'fixed' for the Project provided the total cumulative Change Order value remains
	within the Dead-Band +/-		$ 2,703,769



Aggregate Change Orders result in a overall INCREASE.

Senario 1 - Aggregate Changes stay within the Dead-Band

	Aggregate Change Order Value			$ 200,000

	Results: Contractor would be paid separately for C/O's.
	No Profit Adjustment
	Adjustments to Overhead Cost would be considered as referenced in Attachment B - Price & Payment, Section 10.4.


Senario 2 - Aggregate Changes move outside the Dead-Band					Formula:	$ 3,000,000
						$ (2,703,769)
	Aggregate Change Order Value			$ 3,000,000		$ 296,231
						7%	% Profit Markup
	Results: Contractor would be paid separately for C/O's.					$ 20,736	$ Profit Markup
	Profit would be adjusted by formula.
	Adjustments to Overhead Cost would be considered as referenced in					$ 3,020,736	Total Change Value
	Attachment B - Price & Payment, Section 10.4.



Aggregate Change Orders result in a overall DECREASE.

Senario 3 - Aggregate Changes stay within the Dead-Band

	Aggregate Change Order Value			$ (200,000)

	Results: Company would be owed separately for C/O's.
	No Profit Adjustment
	Adjustments to Overhead Cost would be considered as referenced in Attachment B - Price & Payment, Section 10.4.


Senario 4 - Aggregate Changes move outside the Dead-Band					Formula	$ (3,000,000)
						$ 2,703,769
	Aggregate Change Order Value			$ (3,000,000)		$ (296,231)
						7%	% Profit Markup
	Results: Company would be owed separately for C/O's.					$ (20,736)	$ Profit Markup
	Profit would be adjusted down by formula
	Adjustments to Overhead Cost would be considered as referenced in					$ (3,020,736)	Total Change Value
	Attachment B - Price & Payment, Section 10.4.

From March 16, 2009 letter from NMC to Shaw
		Estimated cost	44,659,440
		Contingency	4,500,000
		Project Budget	49,159,440

		OH&P	4,915,944

		GMP	54,075,384




Examples
1. actual cost less than Project Budget
	Project Budget		49,159,440
	Project actual cost (less OH&P)		42,000,000

	Difference		7,159,440

	N.W.E "savings"		3,579,720

	NMC receives		3,579,720	Split savings
			4,915,944	OH&P
			42,000,000	Project actual cost (less OH&P)
			50,495,664

2. actual cost greater than Project Budget
	Project Budget		49,159,440
	Project actual cost (less OH&P)		51,000,000

	Difference		-1,840,560

	N.W.E "savings"		0

	NMC receives		54,075,384	GMP

3. actual cost equals Project Budget
	Project Budget		49,159,440
	Project actual cost (less OH&P)		49,159,440

	Difference		0

	N.W.E "savings"		0

	NMC receives		0	Split savings
			4,915,944	OH&P
			49,159,440	Project actual cost (less OH&P)
			54,075,384	GMP

No.	Description	Ref.	Received Date	Approved Date	Approval Initial
1	Executed Contract
2	Insurance Certificate with proper coverage, verbiage, and 30 day cancellation notice	Article 42 Attach. C
3	Site Specific Safety Plan by Contractor	Article 11
4	Safety Supervisor Resumes Reviewed
5	Safety Supervisor Interviewed
6	Business Licenses
7	Emergency Numbers
8	Quality Control Plan by Contractor Reviewed	Article 21
9	Project Execution Plan and Site Specific Security Plan Reviewed (1week prior to Mobe)
10	Contract Performance Security*	Article 65
11	Organization Chart
12	Permits as required per Basis of Design	Article 15
13	Construction Kick-off Meeting (to be scheduled collaboratively, possibly the same day as Ground Breaking)
14	Site (Project) Labor Agreement Received

From:	Insert from whom here	Application Date:	Insert Application Date
To:	Insert who to here	Invoice No.:	Insert Invoice Number
Attn:	Insert attention to here	Payment No.:	Insert Payment Number
		Period From:	Insert Date From
		Period To:	Insert Date To

Table 1		Table 2		$
Current Contract Status	0.00%	Progress Invoice Amount		$
		Change Order Invoice Amount		$
Original Contract Value	$	Invoice Amount		$
Approved Change Order Value	$	Less Retention	0.0%	$
Current Contract Value	$	Subtotal Invoice Amount		$
		Less Previous Invoices		$
Approved Contract Changes	0.00%	Net Invoice Amount		$
Approved Change Order Progress	0.00%

CONTRACTOR:	Contractor Name
	Contractor Address
	City, State Zip Code
	Country

BENEFICIARY:	[Company Entity]
	[Address]
	[City, State, Zip]
	[Country]

Demolition / Salvage		Concrete	Instrumentation
Site work / Civil		Special Concrete	Insulation
Underground Electrical		Structural Steel	Painting
Underground Piping		Building Construction	Manufacturing & Process Duct
Pipeline		Aboveground Piping	Mechanical Equipment
Piling		Aboveground Electrical	Instrumentation
	Other	Explain

	RFI -- No.	Correction Of Interface Problem
	Field Work Order -- No.	Schedule Acceleration
	Revised Drawing Or Specification	New Drawing Or Specification
	Work Stoppage / Delay	Potential Claim
	Rework	Client Request
	Vendor Error -- VPR No.	Other (Describe)
List all relevant document types and numbers

Direct Labor	$
Direct Materials	$
Construction Equipment	$
Subcontracts	$
Indirect Costs	$
Overhead	$
Contingency	$
Applicable Taxes	$
Other	$
Total COR Costs	$

COR represents schedule impact?		Yes		No
If yes, specify number of workdays