EXHIBIT 10.56
[REDACTED VERSION]
PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
MAINTENANCE SERVICES AND PARTS AGREEMENT
FOR
MCV 11NM GAS TURBINES
BETWEEN
MIDLAND COGENERATION VENTURE, LIMITED PARTNERSHIP
and
GENERAL ELECTRIC INTERNATIONAL, INC.
Dated: 31, December 2002
TABLE OF CONTENTS
Article Page
Preamble
Recitals
Definitions 1 6
Obligations of GEII 2 11
Obligations of MCV 3 16
Term and Termination of Agreement 4 19
Fee and Payment 5 21
Delivery, Title Transfer, Repair Services Logistics & Inventory 6 28
Indemnity 7 31
Warranty 8 32
Insurance 9 33
Limitation of Liability 10 34
Force Majeure 11 36
Inspection and Quality Surveillance 12 36
Assignment 13 37
Applicable Law 14 37
Severability 15 38
NOT USED 16 38
Entire Agreement 17 38
NOT USED 18 38
Notices 19 38
Disputes 20 39
Independent Entities 21 40
Confidential Information 22 40
Consent and Agreement 23 41
Plant Security and Safety 24 41
Supplemental Payment Terms 25 42
Hazardous Chemicals 26 42
Exculpation 27 44
Patents 28 44
Tax & Duties 29 45
No Nuclear Use 30 46
General Clauses 31 46
Signatures 47
EXHIBITS Exhibit
Covered Units 1 48
Technical Scope 2 49
Spare Parts Lists 3 63
Water Specification 4 65
De-NOx Steam Specification 5 66
Fuel Specification 6 67
Air Specification 7 68
Assumptions 8 69
Covered Parts Price List 9 70
Mobilization Services 10 72
Form of Assignment 11 74
NOT USED 12 77
Consent and Agreement 13 78
GEII Standard Rate Sheets 14 86
PREAMBLE
This maintenance services and parts agreement, including all exhibits, (the
"Agreement") is made effective this 31 day of December, 2002 (the "Effective
Date") by and between General Electric International, Inc. ("GEII"), a
corporation organized under the laws of Delaware, with offices located at 4200
Wildwood Parkway, Atlanta, GA 30339 and MIDLAND COGENERATION VENTURE LIMITED
PARTNERSHIP ("MCV"), a limited partnership organized under the laws of Michigan,
with offices located at 100 Progress Place, Midland, MI 48640.
RECITALS
WHEREAS, GEII, is among other things, engaged in the business of
providing, either directly or through its affiliates and subsidiaries,
certain maintenance services and parts with respect to power plant
equipment;
WHEREAS, MCV operates a power plant located at Midland, Michigan;
WHEREAS, MCV made a verbal request for a proposal from GEII and as a
result MCV and GEII have negotiated this Agreement whereby GEII will
provide certain maintenance services and parts to MCV;
WHEREAS, MCV and GEII independently and collectively acknowledge that
this Agreement is being entered into for the mutual benefit of both
parties and that GEII's obligations contained herein represent its
initial engagement in the provision of certain maintenance services and
parts for non-GE manufactured power plant equipment;
WHEREAS, GEII is willing to provide parts and services in accordance
with the terms of this Agreement,
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, GEII and MCV hereby agree as follows:
ARTICLE I DEFINITIONS
Unless the context clearly requires otherwise, the following terms used in this
Agreement have the meaning set forth below:
1.1 "AFFILIATE" with respect to a Party means an entity (including
without limitation any individual, corporation, partnership,
limited liability company, association or trust) controlling,
controlled by or under common control with that Party.
1.2 "ASSUMPTION VIOLATIONS" means a violation of one or more of
the Assumptions as specified in Exhibit 8.
1.3 "AGREEMENT PRICE" means the total price to be paid by MCV to
GEII under this Agreement as described in Article 5, but does
not include the amounts paid for Unplanned Maintenance and
Extra Work.
1.4 "ASSUMPTIONS" means the operating conditions as specified in
Exhibit 8.
1.5 "CHANGE OF LAW COSTS" shall have the meaning set forth in
Article 5.
1.6 "COMMENCEMENT DATE" shall be January 1, 2004; provided,
however that the Commencement Date may be extended if GEII
provides notification to MCV as soon as the need for an
extension is apparent, but in no case shall notification occur
later than December 1, 2003; provided, further, that in no
event shall the Commencement Date occur later than January 1,
2005.
1.7 "COMPETITOR OF GEII" means any person or entity, and its
parent or affiliates, engaged in the manufacture or
distribution of components, parts or equipment similar to
components, parts or equipment manufactured or distributed by
GE Power Systems, a business division of General Electric
Company and/or the provisions of major maintenance services
similar to the Services supplied under this Agreement for the
power generation industry.
1.8 "COVERED UNIT" shall mean the Gas Turbine Covered Unit and
Generator Covered Unit as described in Exhibit 1.
1.9 "COVERED PARTS" shall mean those new or refurbished parts
provided by GEII for performance under this Agreement as
further defined in Exhibit 2.
1.10 "EFFECTIVE DATE" shall mean the date specified in the Preamble
to this Agreement.
1.11 "EQUIVALENT OPERATING HOURS (EOH)" for a gas turbine, shall
mean, for such gas turbine, the actual measured hours of
operation plus an additional twenty (20) hours for each Start
of such gas turbine.
1.12 "EXCLUDED COMPONENTS" means those components of the Covered
Units other than the Covered Parts.
1.13 "EXCLUDED EVENTS" shall mean maintenance events where Parts,
Services or Repairs for the Covered Units are required to be
provided or performed due to the following circumstances:
i. Caused by an Unplanned Maintenance event,
ii. Caused by an Assumption Violation,
iii. Caused by errors or negligent acts by MCV,
iv. Caused by defective parts provided or services
performed by parties other than GEII or its
subcontractors installed or performed after the
Commencement Date.
v. Caused by a Force Majeure event as defined in Article
11.
vi. the presence of contaminants including, but not
necessarily limited to, chemicals, salt air and
harmful gases in the ambient physical environment
affecting the Covered Unit(s),
1.14 "EXTRA WORK" means parts or services which GEII provides
pursuant to Article 2.4.
1.15 "FACILITY" shall mean the Midland Cogeneration Plant operated
by MCV and located at 100 Progress Place, Midland, Michigan.
1.16 "FORCE MAJEURE EVENT" shall have the meaning set forth in
Article 11 hereof.
1.17 "GEII" shall mean General Electric International, Inc. and its
successors and assigns.
1.18 "GEII STANDARD RATE" shall mean (i) GEII's published standard
rates for field service personnel which are applicable at the
time of providing any services under this Agreement, plus
reasonable expenses pre-approved by MCV including living
expenses, travel expenses, and the rental of cars; (ii) the
price of Parts as described in Exhibit 9, escalated pursuant
to Article 5.2.3, at the time the Parts are ordered; (iii) the
price of Parts, materials and services, purchased by GEII, as
shown by invoices for the same, together with a markup of
twenty-five (25%) percent of such invoices; (iv) the price of
craft labor provided by GEII, as shown by invoices for the
same, together with a markup of fifteen (15%) percent of such
invoices; (v) the then-applicable price for any Repairs.
1.19 "GOVERNMENT REQUIREMENTS" means, to the extent of each Party's
obligations under this Agreement, any statute, law, directive,
regulation, rule, order or legislation of any governmental
authority applicable to the Facility and to the Parties.
1.20 "INITIAL SPARE PARTS" shall mean an initial supply of
components for the Covered Units, as more specifically
identified in Exhibit 3 and owned and maintained by MCV for
use as described in Article 6. Upon delivery to the Site the
Initial Spare Parts shall be redesignated Mandatory Spare
Parts.
1.21 "INITIAL SPARE PARTS PAYMENT" shall have the meaning set forth
in Article 5 .
1.22 "INSOLVENT" means that:
(i) a Party makes an assignment for the benefit of
creditors, or petitions or applies for or arranges
for the appointment of a trustee, liquidator or
receiver, or commences any proceeding relating to
itself under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of the
country under which the insolvent Party is organized
or a country in which the insolvent Party conducts
business, now or hereafter in effect (collectively
"Bankruptcy Laws"), or shall be adjudicated bankrupt
or insolvent in such a country; or
(ii) a Party gives its approval of, consent to, or
acquiesces in, any of the following: the filing of a
petition or application for the appointment of a
trustee, liquidator or receiver against that Party;
the commencement of any proceeding under any
Bankruptcy Laws against that Party; or the entry of
an order appointing any trustee, liquidator or
receiver.
1.23 "MAINTENANCE END DATE" shall mean for each Covered Unit the
later of 96,000 EOH or the completion of the fourth (4th)"C"
Inspection to occur as Planned Maintenance under this
Agreement.
1.24 "MANDATORY SPARE PARTS" shall mean the components for the
Covered Units, as more specifically identified in Exhibit 3
and owned and maintained by MCV for use as described by
Article 2.
1.25 "MCV" shall mean Midland Cogeneration Venture Limited
Partnership and its successors and assigns.
1.26 "MOBILIZATION PERIOD" shall mean the period commencing on the
Effective Date and ending on the Commencement Date.
1.27 "MOBILIZATION SERVICES" shall mean those goods and services
provided under Exhibit 10.
1.28 "OUTAGE" means removal of a Covered Unit from electric or
power generation service.
1.29 "PARTIES" shall mean MCV and GEII collectively, and "PARTY"
shall mean MCV or GEII individually.
1.30 "PARTS" means new, repaired, or refurbished parts, materials,
components and other goods furnished by GEII, or its
subcontractors or suppliers, under this Agreement for the
Covered Units.
1.31 "PLANNED MAINTENANCE" means, with respect to the Covered
Units, the following:
a) with respect to the Gas Turbine Covered Units
described in Exhibit 1, periodic inspection, testing,
repair, and/or replacement of the Covered Parts, as
specified in Exhibit 2, as reasonably necessary in
light of deterioration from wear and tear due to
normal operation of the Covered Units and in
accordance with GEII's recommendations under this
Agreement and Prudent Industry Practices; and
b) with respect to the Generator Covered Units described
in Exhibit 1, periodic inspection as specified in
Exhibit 2 (Parts and Repairs excluded), to be
performed concurrently with an Outage on the Gas
Turbine Covered Unit and in accordance with GEII's
recommendations under this Agreement and Prudent
Industry Practices; and
c) the repair and/or replacement of Covered Parts
subject to the work set out in paragraph a) above,
(1) the need for which is found during any Planned
Maintenance Outage and (2) which is reasonably
determined to be necessary prior to the next
scheduled Planned Maintenance Outage to continue safe
operation in each case in accordance with Prudent
Industry Practices, except in the event that the need
or requirement for such repair or replacement is an
Excluded Event;
d) provided that paragraphs a), b), and c) above shall
not include testing, repair or replacement of
components and parts of a Covered Unit comprising
Excluded Components or the performance of Unplanned
Maintenance, Routine Maintenance or Extra Work.
1.32 "PRE-EXISTING CONDITIONS" shall mean the condition of the
Covered Units, including but not limited to any condition
resulting from the design, manufacture, operation, wear and
tear (normal or otherwise), maintenance or failure to
maintain, or repair or failure to repair, of the Covered
Units, on or before the Commencement Date.
1.33 "PRUDENT INDUSTRY PRACTICES" means the exercise of that degree
of skill and diligence, and of such practices, methods and
acts, at a minimum as would ordinarily be expected in the
power generation industry from a prudent owner and/or operator
and/or a services and/or parts provider acting lawfully,
reliably and safely in connection with the operation, repair,
and servicing of power generation facilities and equipment
similar to the Facility and Covered Units.
1.34 "REPAIR" means work, which can be performed in a repair
service shop or at the Site, including, but not limited to,
machining; welding; grinding; polishing; cleaning; inspection;
disassembly or re-assembly and machine tool work such as lathe
work or vertical bore mill work.
1.35 "REPAIR FACILITIES" means GEII's repair facilities where
Repair services are performed.
1.36 "ROUTINE MAINTENANCE" means maintenance of a regular,
preventive or minor nature that is performed periodically,
during Covered Unit shutdown or during operation, to maintain
equipment in working order on a day-to-day basis without the
need for an Outage, including, but not limited to, inspection,
lubrication, calibration, adjustment, minor leak repair,
provision of fluids, greases, and resins, cleaning and
replacement of operational spares, filters (including inlet
air filters), strainers and cartridges, maintenance or
replacement of sensors, fuses, thermocouples, gauges,
switches, and light bulbs, and other similar preventive,
routine or minor work.
1.37 "SERVICES" means the work, services and labor required to be
provided by GEII in accordance with this Agreement, including
Mobilization Services, Planned Maintenance, Unplanned
Maintenance and Extra Work.
1.38 "SITE" means the real property upon which the Facility is
located.
1.39 "START" for the purposes of calculating EOH, shall mean an
event in which an ignition takes place and the rotational
speed is reached at which the starting aides switch off, which
is currently approximately 2400 RPM.
1.40 "TECHNICAL SCOPE" shall mean the description of inspection
schedules and procedures and the equipment included in GEII's
inspection obligations set forth in Exhibit 2.
1.41 "TERM" means the time period beginning on the Commencement
Date and ending upon termination or expiration of this
Agreement as more fully described in Article 4.
1.42 "UNPLANNED MAINTENANCE" means maintenance of the Covered Units
that is neither Routine Maintenance nor Extra Work, required
to remedy an in-service failure or abnormality of a component,
whether discovered during an Outage or inspection, or
discovered from the monitoring of the Covered Units, which
occurs as a result of a problem or failure of a Covered Unit.
ARTICLE 2 OBLIGATIONS OF GEII
GEII shall provide the following under this Agreement:
- Mobilization Services in accordance with the terms of Article
2.1
- Planned Maintenance in accordance with the terms of Article
2.2
- Unplanned Maintenance in accordance with the terms of Article
2.3
- Extra Work in accordance with the terms of Article 2.4
- Initial Spare Parts in accordance with Article 2.5
- Site Support Team in accordance with Article 2.6
- Mandatory Spare Parts in accordance with Article 2.7
- Maintenance services guidelines in accordance with Article
2.8.
- Maintenance schedule in accordance with Article 2.9
- New or refurbished parts in accordance with Article 2.10
- New technology parts in accordance with Article 2.11
2.1 MOBILIZATION PERIOD
During the Mobilization Period, GEII shall carryout the Mobilization
Services as detailed in Exhibit 10. In addition, on or before the
Commencement Date, GEII shall deliver to the Facility those Initial
Spare Parts for the Covered Units (not in the MCV inventory) listed in
Exhibit 3.
2.2 PLANNED MAINTENANCE
For each Covered Unit, from the Commencement Date to the Maintenance
End Date applicable to such Covered Unit, GEII shall provide Covered
Parts and Services necessary for the Planned Maintenance of that
Covered Unit. The scope of Planned Maintenance for the Covered Units is
set forth in Exhibit 2. Planned Maintenance on the Covered Units shall
include the provision of all craft labor, labor supervision, technical
advisors, and specialists (e.g., bladers) to perform these normal
scheduled inspections on the Covered Units with exceptions as noted
under MCV scope on the Covered Units as more particularly described in
Exhibit 2. Such Planned Maintenance shall be performed in accordance
with Prudent Industry Practices.
GEII shall provide parts planning support to MCV to facilitate
maintenance planning. During the Term of the Agreement, at a mutually
agreed date in the middle of each calendar year, GEII's representatives
and MCV's representatives shall meet to discuss maintenance planning
and related Outages for the following calendar year.
At said meeting a tentative schedule of Planned Maintenance events for
the following calendar year will be set by mutual agreement provided
however that should the Parties fail to mutually agree MCV shall set
the tentative schedule. MCV and GEII will keep each other apprised of
any need to modify the tentative schedule, and mutually agree upon a
final schedule as far in advance as reasonably possible. By mutual
agreement of the Parties, the exact start date of the Planned
Maintenance event may be advanced or delayed. A mutually agreed upon
reimbursement will be made by the Party making the change if additional
manpower and material costs related to the preparation for the outage
are incurred due to the change in outage date.
Where MCV and GEII have agreed that a Planned Maintenance event has
been scheduled, tentative or final, during a given time period, more
detailed scheduling of the work scope will be presented by GEII at a
pre-outage meeting approximately six (6) months prior to the
anticipated start of that Planned Maintenance event and at such other
times as the Parties deem necessary. A post-outage meeting will be
scheduled after completion of each such Planned Maintenance event for
presentation and discussion of GEII's outage report(s).
The Planned Maintenance schedule used by GEII to develop the Agreement
Price is premised on the Assumptions specified in Exhibit 8. Overfired
operation, use of fuel or steam which does not comply with the attached
applicable specifications or other deviations from the Assumptions may
necessitate a reduced interval for Planned Maintenance. Any Parts or
Services GEII must provide or perform resulting from Assumption
Violations shall be provided as Extra Work.
2.2.1 MAINTENANCE SERVICES REPORTS
GEII shall submit a monthly report of its work hereunder
performed during the previous month indicating all
inspections, Maintenance and Repairs performed, condition of
Covered Units, and Parts used. Promptly after completing each
scheduled inspection, GEII shall submit a detailed report of
the work performed, condition of inspected Covered Units,
revised settings and clearances of inspected Covered Units,
and GEII's recommendations for future Maintenance or Repair of
the Covered Units or purchases of spare parts.
2.2.2 SITE RELATIONS
2.2.2.1 GEII recognizes that MCV, other contractors, and
subcontractors may be working concurrently at the
Facility. GEII shall cooperate with MCV and other
contractors so that all work will progress with a
minimum of delays and interference. Subject to
Article 11 ("Force Majeure") hereof, MCV reserves the
right to require GEII to schedule the performance of
its work hereunder in such manner as not to
unreasonably interfere with the performance of others
or with MCV's operation of the Facility.
2.2.2.2 GEII shall maintain workable and harmonious relations
with its employees and between GEII's employees, the
employees of other contractors and subcontractors,
and the employees of MCV. Whenever GEII has knowledge
that any actual or potential labor dispute is
delaying or threatens to delay the timely performance
of GEII's work hereunder, GEII shall immediately give
notice thereof to MCV, including all relevant
information.
2.3 UNPLANNED MAINTENANCE
For all Covered Units, from the Commencement Date to the expiration or
termination of this Agreement, GEII shall provide Covered Parts and
Services for Unplanned Maintenance.
MCV shall pay GEII for Parts and Services required for Unplanned
Maintenance at the GEII Standard Rates in effect at the time the work
is performed or the Parts are ordered.
If the Covered Units require(s) Unplanned Maintenance, during the Term
of this Agreement, MCV shall notify GEII in writing and make the
Covered Units available for correction.
2.4 EXTRA WORK
Extra Work shall mean Parts provided and Services performed by GEII
under the following circumstances:
a) To remedy damage to the Covered Units arising from an Excluded
Event;
b) Repair or replacement of generator parts;
c) To remedy damage to the Covered Units arising from Pre-existing
Conditions;
d) To provide Parts, Services, or Repairs in connection with changes
in original equipment manufacturer recommendations as described in
Article 3.4;
e) To provide Parts, Services, or Repairs in connection with changes
as described in Article 3.5;
f) To repair or replace Excluded Components;
g) Which are provided or performed, pursuant to mutual agreement of
the Parties.
Extra Work shall be provided as requested by MCV from time to time in
writing, for the Covered Units; provided, however, that: (i) MCV shall
have the obligation to request such services of GEII and shall not have
the right to use other contractors to perform such services if GEII
agrees to perform such services; and, (ii) GEII shall have no
obligation to perform any such service if it gives MCV written notice
of its election not to perform such service within seven (7) days after
receipt of MCV's written request to perform such service.
Extra Work shall be provided at GEII Standard Rates in effect at the
time the work is performed. Payment for Extra Work shall be made in
accordance with Article 5.4 of this Agreement.
2.5 INITIAL SPARE PARTS
GEII shall provide the Initial Spare Parts as detailed in Exhibit 3.
The Initial Spare Parts will be shipped within thirty (30) days of the
Commencement Date and will become part of the Mandatory Spare Parts
inventory upon transfer of title to MCV.
2.6 SITE SUPPORT TEAM
GEII shall, commencing on or before the Commencement Date and
continuing through the Term of the Agreement, designate individuals who
will be denoted the "Site Support Team" as required to fulfill GEII's
obligations under this Agreement.
As a minimum, GEII will designate an individual as the Site Manager who
will be a member of the Site Support Team. The Site Manager will serve
as a contact point with MCV for GEII for matters respecting this
Agreement. Other GEII personnel and performance support methods may
also be utilized by GEII in connection with performance of this
Agreement. The individuals and the titles may change from time to time
during the Term of this Agreement provided that GEII will have
representatives at
all times required under this Agreement serving such a role regardless
of the specific individual or job title used.
The Site Support Team personnel, assigned on a full-time basis to the
facility, shall:
(i) assist MCV in trouble shooting, as requested by MCV,
and in accordance with Article 3.4;
(ii) consult with MCV to schedule inspections and
maintenance;
(iii) recommend to MCV the purchase of spare parts to
maintain inventory;
(iv) organize the scheduled inspections identified in the
Exhibit 2;
(v) coordinate with MCV the receipt and inspection of
Parts to confirm condition upon delivery.
2.7 MANDATORY SPARE PARTS
In the event GEII uses any of the Mandatory Spare Parts maintained by
MCV for the performance of Planned Maintenance, GEII shall replace such
Parts such that there is at all times one set of Mandatory Spare Parts
in MCV's inventory as detailed in Exhibit 3.
2.8 MAINTENANCE SERVICES GUIDELINES
In connection with the performance of any Services to be performed by
GEII pursuant to this Agreement:
2.8.1 GEII shall comply with Government Requirements applicable to
GEII's performance of its obligations under this Agreement.
2.8.2 GEII shall notify MCV of any lack of, or requirement for,
materials, supplies, equipment, and other items required to be
supplied by MCV reasonably in advance of GEII's need. In the
event of misfit of or defect in MCV-furnished materials,
supplies, equipment, or other items, GEII shall promptly
notify MCV of same. GEII shall take all reasonable steps to
avoid standby time due to such misfit, defect, or lack of
MCV-furnished materials, supplies, equipment, or other items
and to continue progress of other portions of GEII's work
hereunder pending correction of such misfit or defect and/or
the furnishing of such materials, supplies, equipment, or
other items.
2.8.3 GEII shall, at all times, in accordance with the Prudent
Industry Practices and at no additional cost to MCV, protect
from damage due to GEII's operations, equipment, and materials
(whether stored or installed), paving, structures, and any and
all other items on the Facility belonging to MCV or others.
GEII's scope of supply under this Agreement includes the
provision of construction equipment such as cranes, heavy lift
equipment, fork lifts, etc., except for the installed crane as
describe in Article 3.2. If GEII provides such equipment as
Extra Work, such equipment shall comply with Article 24.
2.8.4 In connection with the performance of its obligations
hereunder, GEII shall not be bound by any agreement(s) or any
amendments thereto for the sale of electricity produced by the
Facility, any agreement(s) or amendments thereto for the sale
of steam produced by the Facility, any agreement(s) or
amendments thereto for the purchase of fuel necessary to
operate the Facility, or to any other
agreement unless GEII has consented in writing to be legally
bound in whole or in part by any obligation contained in such
agreement.
2.8.5 Notwithstanding anything in this Agreement to the contrary,
GEII shall not be responsible for making any payments required
to be made by MCV pursuant to, or the compliance by MCV with
any other obligation of MCV under, any other agreement to
which MCV is or may be a Party including, but not limited to,
any agreement relating to supply of any consumables for the
Facility, the sale of electricity or steam produced by the
Facility, or the purchase of fuel necessary to operate the
Facility, or any agreement relating to the construction
financing or permanent financing of the Facility.
2.8.6 GEII shall not, in connection with this Agreement, under any
circumstances, apply to or enter into negotiations with any
governmental authority or agency for acceptance of variations
from or revisions to safety or health, or air, water, or noise
pollution laws, or regulations relating to this Agreement, or
to the performance of its obligations hereunder without MCV's
prior written approval, which approval may not be unreasonably
withheld or delayed.
2.9 MAINTENANCE SCHEDULE
All work to be performed by GEII during an Outage hereunder shall be
performed in accordance with the following work schedule:
Scheduled "Camera", "Visual", Two ten hour shifts,
and "C" Inspections six days per week
Unplanned Maintenance and Two ten hour shifts,
Extra Work six days per week
provided, however, that MCV shall have the right to require
overtime work and shall bear all additional costs incurred by
GEII in connection with such overtime work. Overtime for
GEII's personnel shall be charged at GEII Standard Rates in
effect at such time.
The term "week" as used in this Article 2.9 is defined as
Monday through Saturday, except holidays. If MCV requires GEII
to work on a holiday or schedules a six day work week which
includes Sunday, then MCV shall pay for the differential
incurred due to premium time.
2.10 USE OF NEW OR REFURBISHED PARTS
GEII, at its discretion, may supply either new or reconditioned Covered
Parts, provided that reconditioned parts meet prevailing GEII quality
standards and are reasonably acceptable to MCV.
2.11 NEW TECHNOLOGY PARTS
GEII may, from time to time in the performance of its scope of work
under this Agreement, develop and/or utilize improved Parts which are
not commercially available on the Effective Date. It is anticipated
that GEII may do so in an effort to extend parts'
lives and/or increase the interval between certain Planned Maintenance
Outages and/or improve Covered Unit performance.
If GEII has available new part designs, MCV may request such new part
designs from GEII for Covered Parts. If the original part design is
also made available to MCV by GEII, MCV shall pay for the new part
design at the then current price differential between the new and
original part design. If the original part is no longer available, the
new part shall be supplied at no additional cost to MCV.
If MCV makes available to GE an upgraded design for a Covered Part and
requests that GEII make use of this part in the fulfillment of GEII's
obligations under this Agreement, GEII and MCV shall mutually agree to
appropriate modifications to this Agreement.
ARTICLE 3 OBLIGATIONS OF MCV
MCV shall provide the following under this Agreement:
- Mobilization Services in accordance with the terms of Article
3.1
- Maintenance services support in accordance with the terms of
Article 3.2
- General support in accordance with the terms of Article 3.3.
- Product support service in accordance with the terms of
Article 3.4.
- Notices associated with the modification of the Covered Units
in accordance with the terms of Article 3.5
3.1 MOBILIZATION PERIOD
During the Mobilization Period, MCV shall carryout the Mobilization
Services as detailed in Exhibit 10.
3.2 MAINTENANCE SERVICES SUPPORT
MCV shall provide to GEII, at no cost to GEII, the following during
Outages in sufficient quantities, at the times necessary, for the
performance of GEII's obligations under this Agreement.:
- Materials, and consumables (other than those provided by
GEII).
- Fuel, water, electric power, chemicals, and fuel additives.
- Waste disposal.
- On-site lockable storage to be under the control of GEII for
consumables, tools, and instruments supplied by GEII.
- Use of permanently installed cranes (GEII to supply crane
operator(s) for "C" inspections).
- Use of on-site facilities including, but not limited to,
parking, restrooms, drinking water, vending machines, office
space, welding machines, and fire fighting equipment. On
occasion, when the need for machine shop, instrument shop or
other services are required, GEII may request the use of MCV
services subject to availability and type of work.
- Use of special tools for the maintenance of equipment,
supplied with such equipment by the manufacturers thereof.
- Labor and material for all inspection, maintenance, and repair
of Covered Units auxiliaries, burner removal, and
reinstallation, in-situ welding, balancing, and
recommissioning, as listed in Exhibit 2.
- MCV shall provide GEII full access to the Facility during the
Term of the Agreement to the extent reasonably necessary for
GEII to perform its obligations hereunder. MCV shall maintain
all the permits and licenses necessary to own and operate the
Facility.
- MCV shall use its best efforts in planning Covered Unit
outages and developing inspection and maintenance schedules to
ensure that only one unit of the Covered Units is shut down
for Covered Parts replacement or maintenance at a time (except
in the case of an emergency failure or Excluded Events).
- MCV shall also be responsible for in-situ weld repairs on the
Covered Units performed between "C" inspections with the
understanding that the Agreement has provisions that would
allow GEII to supply services as Extra Work.
- Access to any medical facilities at the Site for use by GEII.
3.3 GENERAL SUPPORT
Except as determined by the mutual agreement of GEII and MCV, the
Covered Units shall be operated and maintained in accordance with OEM's
recommendations supported by the OEM operating instruction manuals and
instructions.
MCV shall comply with Government Requirements applicable to MCV's
performance of its obligations under this Agreement.
Except for such services as GEII shall provide pursuant to this
Agreement, MCV shall perform Routine Maintenance upon, and operate, the
Covered Units and the Facility using the proper lubricants and fuel and
steam which comply with the OEM specifications, all in accordance with
Prudent Industry Practices. MCV shall perform Planned Maintenance and
Unplanned Maintenance on those portions of the Facility which are not
included in the Covered Units. MCV shall inform GEII, in writing, of
all Assumption Violations.
Parts furnished by GEII under this Agreement shall not be installed,
used, or made available for use in any equipment other than the Covered
Units; provided, however, that MCV may provide Parts to other
facilities to support an unplanned event and such Parts shall be
replaced by MCV as Extra Work.
MCV bears the risk of loss for all Covered Parts while stored at the
MCV Facility. MCV shall provide, at no cost to GEII, the necessary
equipment to properly store and handle the Covered Parts, including
existing warehouse space and security measures required to safely store
and properly maintain the Covered Parts. Any Covered Parts that need
replacement due to improper storage shall be replaced as Extra Work.
MCV will make the Covered Units available to GEII for (i) technical
evaluation of the Covered Parts during routine scheduled inspections;
(ii) the review of TAT spread measurements and calibration methods and
measurements performed by MCV; (iii) providing day-to-day surveillance
and operating recommendations; and, (iv) witnessing, to the extent
possible, turbine restarts for the purpose of enhancing starting
reliability.
3.4 PRODUCT SERVICE SUPPORT AND ORIGINAL EQUIPMENT MANUFACTURER
RECOMMENDATIONS
MCV shall be responsible for communicating and resolving all inquiries
GEII has related to the Covered Units to the original equipment
manufacturer. Any incremental costs incurred by GEII, including delays,
associated with its performance during Outages resulting from said
communication, shall be borne by MCV. MCV shall immediately notify GEII
in writing of all communications to MCV, written or otherwise, which is
applicable to the Covered Units, mandating an inspection, or repair or
replacement of components or parts of the Covered Units which is issued
by the original equipment manufacturer or any of its Affiliates,
including, but not limited to, one (1) time maintenance events, part
lives, and repair intervals. Any costs incurred by GEII as a result of
such communication shall be borne by MCV as Extra Work.
GEII will provide technical and engineering support related to Covered
Parts and Services provided under this Agreement to the extent GEII or
its Affiliates has reengineered and manufactured the Part or performed
the Services.
GEII will make reasonable commercial efforts to troubleshoot, advise,
and recommend solutions to OEM related product service issues. If MCV
requests GEII and GEII agrees to provide engineering or technical
support related to the design or operation of Covered Units, these
services will be provided as Extra Work.
3.5 NOTICE OF PREEXISTING CONDITION OF AND ANY MODIFICATIONS TO THE COVERED
EQUIPMENT
MCV shall promptly provide to the Site Manager all of the information
in its possession, including, but not limited to, all
operating/maintenance records, logs or data (written or otherwise)
regarding the Covered Units prior to the Commencement Date.
Additionally, MCV represents that the provision of such information
shall be complete and accurate to the best of MCV's knowledge. Any
incremental cost incurred by GEII as a result of MCV's breach of the
foregoing shall be excluded from Planned Maintenance and borne by MCV
as Extra Work.
MCV shall also promptly notify GEII in writing regarding any changes or
modifications to the Covered Units made by parties other than GEII
occurring after the Effective Date. Any changes to the maintenance
program necessitated by such changes, including but not limited to,
reduced part life or inspection interval time, shall be excluded from
Planned Maintenance and borne by MCV as Extra Work.
3.6 OWNER PROVISION OF PARTS
3.6.1 PATENTED PARTS
If GEII, in its sole determination, determines in good faith that it is
not able to provide a part to MCV during the Term of this Agreement,
due to intellectual property restrictions , then GEII shall promptly
provide written notice to MCV advising of its determination. Prior to
giving such notice, GEII shall make reasonable commercial efforts to
manufacture or procure a non-infringing part or other alternative
replacement capable of satisfying GEII's obligations under this
Agreement. In the event GEII is unable to manufacture or procure a
non-infringing part, MCV agrees that MCV may procure such part for
GEII's performance, and an adjustment to the Agreement shall be made in
accordance with Article 3.6.2. The Parties agree that GEII's inability
to provide such part shall not be considered a material breach of this
Agreement.
If GEII's inability to supply a part due to intellectual property
restrictions is expected to delay a scheduled outage, GEII shall notify
MCV no later than nine (9) months prior to the scheduled date of the
affected outage, and MCV shall have the right to obtain a replacement
part, and an adjustment to the Agreement will be made in accordance
with Article 3.6.2.
If GEII cannot supply three or more different Covered Parts due to
intellectual property restrictions, MCV shall have the right to
terminate this Agreement without penalty thirty (30) days after
providing notice of MCV's intent to terminate; provided, however, that
MCV shall take title to all Covered Parts being manufactured by GEII
for use in this Agreement on the notice date, and pay for such Parts
upon delivery to the site as Extra Work.
3.6.2 ADJUSTMENT TO PERIODIC PAYMENT
If GEII is not able to provide a part pursuant to 3.6.1, and MCV
procures a part for GEII's performance, then the Parties agree to make
an adjustment to the Periodic Payments. Such adjustment shall be made
on Periodic Payment due following MCV's provision of such part(s),
whereby GEII shall reduce that Periodic Payment by a value equal to
GEII Standard Rate for such part(s).
ARTICLE 4 TERM AND TERMINATION OF AGREEMENT
4.1 TERM OF AGREEMENT
This Agreement shall become effective on the Effective Date and shall
expire; unless sooner terminated in accordance with the provisions of
this Agreement, upon the first to occur of the following:
a) The date upon which all Covered Units have reached
their Maintenance End Date, or;
b) Fifteen (15) years from the Commencement Date.
4.1.1 For the purposes of the Term of this Agreement and EOH based
payments hereunder, the EOH of each Covered Unit shall be
considered to be zero (0) as of the Commencement Date.
4.2 TERMINATION
4.2.1 TERMINATION FOR DEFAULT AND/OR INSOLVENCY
4.2.1.1 Either Party (the "Non-Defaulting Party") may
terminate this Agreement if the other Party (the
"Defaulting Party") (i) becomes Insolvent or (ii) the
Defaulting Party commits a material breach of this
Agreement and fails to cure the breach within thirty
(30) days of notice from the Non-Defaulting Party, or
if it is not possible to cure such breach within
thirty (30) days of such notice, fails to commence to
cure the breach within thirty (30) days or fails to
thereafter continue diligent efforts to complete
the cure as soon as reasonably possible. This
provision for Termination for Default may only be
exercised by notice in writing within ninety (90)
days of the event(s) giving rise to the default and
effective thirty (30) days from such written notice.
4.2.1.2 In the case of Termination for Default and/or
Insolvency pursuant to Article 4.2.1.1, the
Defaulting Party shall pay the Non-Defaulting Party
(i) the Buy Out Amount specified in Article 4.2.4. In
addition, all Parts required to be supplied and all
payments required under this Agreement for
performance prior to the effective date of such
termination shall be provided/paid in accordance with
this Agreement. The foregoing specified in this
Article 4.2.1.2, shall be the sole and exclusive
rights and liabilities of the Non-Defaulting Party
and Defaulting Party respectively, on account of
Termination for Default and/or Insolvency and the
breach giving rise to such termination.
4.2.2 TERMINATION FOR CONVENIENCE
After the Commencement Date either Party may terminate this
Agreement for convenience effective at the end of a calendar
year by, (i) giving written notice at least one hundred twenty
(120) days in advance, and (ii) making payment ninety (90)
days prior to the effective date of such termination for
convenience to the other Party (the "Non-terminating Party")
of (a) the Buy Out Amount specified in Article 4.2.4.
Additionally, the Terminating Party shall pay to the
Non-terminating Party, not later than thirty (30) days after
the effective date of such termination, all payments due and
all payments required and supply all parts required under this
Agreement for performance prior to the effective date of such
termination. Prior to terminating for convenience, the Parties
agree to hold a meeting of executives to discuss mutually
agreeable alternatives to termination. The foregoing payments
specified in this Article 4.2.2 shall be the sole and
exclusive rights and liabilities of the Non-terminating Party
and Terminating Party, respectively, on account of termination
for convenience.
4.2.3 OTHER TERMINATION EVENTS
4.2.3.1 Either Party may terminate on account of a Force
Majeure Event as provided in Article 11, MCV shall
pay to GEII all payments required, and GEII shall
provide all Parts required under this Agreement for
performance prior to the Force Majeure Event.
4.2.4 BUY OUT AMOUNT
In the case of Termination for Default and/or Insolvency as
described in Article 4.2.1, the Buy Out Amount as specified in
the table below shall be paid by the Defaulting Party to the
Non-defaulting Party. The Parties agree that the damages
likely to be incurred by a Non-Defaulting Party or
Non-Terminating Party in the event of termination will be
difficult to measure, that the Buy Out Amount is reasonable,
and that the Buy Out Amount shall be paid as liquidated
damages in lieu of all such actual damages and not as a
penalty.
In the case of Termination for Convenience as described in
Article 4.2.2, the "Buy Out Amount" is specified in the table
included in this Article 4.2.4. The table below specifies the
Buy Out Amount applicable to a termination effective
during each "EOH Time Period." For purposes of this Article
4.2.4, the "EOH Time Period" shall be determined by reference
to the total number of EOH accumulated under this Agreement
for the Facility.
[TABLE DELETED]
"OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT."
4.2.5 OBLIGATIONS PRIOR TO TERMINATION
Termination or expiration of this Agreement shall not relieve
either Party of any obligation arising out of work performed
prior to termination.
ARTICLE 5 FEE AND PAYMENT
The price to be paid by MCV to GEII is set forth in Articles 5.1, 5.2, 5.3, 5.4,
and 5.5.
[INFORMATION DELETED]
"OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT."
ARTICLE 6 DELIVERY, TITLE TRANSFER, REPAIR SERVICES LOGISTICS & INVENTORY
6.1 DELIVERY
6.1.1 GENERAL DELIVERY TERMS
GEII shall be responsible for delivery of all Parts necessary to timely
perform GEII's obligations under this Agreement, pursuant to the work
schedule set in accordance with this Agreement.
6.1.2 SHIPMENT TO STORAGE
If any of the Parts cannot be delivered to MCV when ready due to any
cause not attributable to GEII, GEII may ship such Parts to storage. If
such Parts are placed in storage, including storage at the facility
where manufactured, the following conditions shall apply: (a) any
amounts otherwise payable to GEII upon delivery or shipment shall be
payable upon presentation of GEII's invoices and certification of cause
for storage; (b) all expenses incurred by GEII, such as for preparation
for and placement into storage, handling, inspection, preservation,
insurance, storage, removal charges and any taxes shall be payable by
MCV upon submission of GEII's invoices; and (c) when conditions permit
and upon payment of all amounts due hereunder, GEII shall resume
delivery of the Parts to the originally agreed point of delivery.
6.1.3 DELIVERY OF PARTS
GEII will deliver Parts FCA (INCOTERMS 2000) carrier at the point of
shipment to the Facility Site. GEII shall bear transportation costs
associated with delivery of Parts.
6.2 PASSAGE OF TITLE
6.2.1 PASSAGE OF TITLE TO MCV
Title to Parts to be shipped from within the United States shall pass
to MCV when such Parts are made available for shipment from the
manufacturer's factory or other point of shipment to MCV. Title to
Parts to be shipped from a country other than the United States shall
pass to MCV at the port of export immediately after the Parts have been
cleared for export. Title to service work in progress at the Site shall
pass as such services are performed. Notwithstanding the foregoing,
GEII shall have the option to declare, from time to time, alternate
title passage points for some or all of the Parts provided that (i)
title shall pass to MCV no later than the time of installation in a
Covered Unit, and (ii) the GEII's delivery and risk of loss
responsibilities shall remain as specified in Articles 6.1.3 and 6.3.
6.2.2 PASSAGE OF TITLE TO GEII
GEII shall have the right, at its option, to take title to and
possession of, and remove from the Site, any parts or components
existing as of the Commencement Date of the Covered Units which have
been replaced with Parts supplied by GEII under this Agreement. Title
to such parts and components shall pass from MCV to GEII at the Site
upon completion of the Outage during which the replacement Part is
installed. MCV warrants to GEII good title to such parts and
components, free and clear of all liens, encumbrances and claims. GEII
shall be responsible for packing such parts and components at the Site.
Notwithstanding the foregoing, GEII shall notify MCV in the event GEII
intends to declare alternate title passage points for some or all of
such parts and components. MCV may reasonably deny GEII's right to
declare alternate title passage points in the event it has an adverse
effect on MCV from an inventory or tax exposure standpoint.
GEII warrants that, at the time of sale to MCV, it will have good and
clear title to all Parts, materials, and equipment to be sold by GEII
under this Agreement.
6.3 RISK OF LOSS
Notwithstanding the limit of liability per calendar year as set by Article 10.1,
risk of loss or damage to Parts supplied by GEII to MCV shall be borne by GEII
prior to the time of delivery to the Facility and by MCV upon and after the time
of delivery to the Facility.
6.4 REPAIR SERVICES LOGISTICS
6.4.1 REPAIR SERVICES CONDUCTED AT THE REPAIR FACILITIES.
If MCV retains title to parts and components of a Covered Unit that are
removed from a Covered Unit and which are to be repaired or refurbished
at Repair Facilities and returned to MCV, the following provisions
shall apply:
6.4.1.1 MCV shall be responsible for all actions and costs
related to packing and transporting the parts and components
of the Covered Unit to and from the Site and the Repair
Facilities. Notwithstanding any other provisions in this
Agreement, including any reference to INCOTERMS, MCV shall
bear risk of loss and related insurance costs for the parts
and components of the Covered Unit while in transit to the
Repair Facilities.
6.4.1.2 All scrap and used Covered Parts and components which
have been replaced during Repair Services made at the Repair
Facilities shall be the property of GEII.
6.4.2 REPAIR SERVICES CONDUCTED AT THE SITE
GEII shall retain title to any GEII equipment utilized by GEII, or
loaned or made available to MCV, at the Site. GEII shall be responsible
for transit costs and risk of loss and insurance costs for such
equipment to and from the Site. MCV shall be responsible for risk of
loss or insurance costs for such equipment loaned or made available
while on the Site.
6.5 INVENTORY UTILIZATION
MCV shall own and maintain in inventory one (1) set of Mandatory Spare
Parts at the Facility as described in Exhibit 3. Title to the Mandatory
Spare Parts shall be held by MCV. GEII may use the Mandatory Spare
Parts in the Covered Unit. If so used, GEII shall replace the Mandatory
Spare Parts with new or reconditioned parts such that MCV shall have
one (1) set of Mandatory Spare Parts in inventory at all times. If
such part is utilized by GEII in the performance of Planned
Maintenance, it shall be replaced at no additional cost to MCV. If such
part is utilized by GEII for a purpose other than Planned Maintenance,
it shall be replaced by GEII as Extra Work, and invoiced to MCV
accordingly.
MCV shall have the right to use any of the Mandatory Spare Parts for
testing or other purposes, provided, however, that the Parts are not
needed for the performance of Planned Maintenance within nine months
and that MCV shall not transfer such Parts to another generating
Facility without the consent of GEII, such consent shall not be
unreasonably withheld. GEII shall provide replacement parts and MCV
shall pay for those Parts as Extra Work.
Subject to the warranty provisions of Article 8, upon completion of the
Term, or termination of the Agreement whichever is the earliest, GEII
will ensure that any of the Mandatory Spare Parts utilized by GEII have
remaining EOH life capable of operating 24,000 EOH (based on the
operating conditions of the Covered Units at the Effective Date, known
repair history of the Mandatory Spare Parts, and the predicted total
life of the Part at the time the Parts were installed). For the
avoidance of doubt, GEII shall be able to use any Parts supplied by
GEII, in a Covered Unit, or in MCV inventory on the Commencement Date
for the performance of GEII obligations under this Agreement in any
Covered Unit.
ARTICLE 7 INDEMNITY
GEII agrees to indemnify and hold harmless MCV from and against any
loss or expense by reason of physical damage to the property of third
parties or bodily injury, including death, of persons to the extent
such damage or injury results directly from the negligence of GEII or
its subcontractors while engaged in the performance of this Agreement.
MCV shall likewise indemnify and hold harmless GEII from and against
any loss or expense by reason of physical damage to the property of
third parties or bodily injury, including death, of persons to the
extent such damage or injury results directly from the negligence of
MCV or its other contractors. In the event such damage or injury is
caused by the joint or concurrent negligence of MCV (or its other
contractors) and GEII (or its subcontractors), the loss or expense
shall be borne by each Party in proportion to its degree of negligence
or the degree of negligence of its contractors/subcontractors. For
purposes of GEII's indemnity responsibility under this Article 7, no
portion of the Covered Units, Facility or the Site is considered third
party property.
Additionally, MCV shall indemnify and hold harmless GEII from and
against any and all claims, losses, costs, and expenses (including
without limitation attorney's fees), based on or arising out of any
condition, duty, or obligation, or breach of any of the foregoing, at
the Site or Facility, which condition, duty, obligation, or breach was
in existence on or before the Effective Date, whether such claim is
based on contract, warranty, indemnity, tort (including without
limitation negligence), strict liability, environmental,
confidentiality, latent defects in design, manufacturing, or
installation, payment, equity, or any other theory of recovery.
MCV represents that the ownership of the Covered Units, Facility, and
Site is as described by Article 23, Consent and Agreement. In the event
that there is an additional or different owner of all or any portion of
the Covered Units, Facility, or Site, in addition to any other rights
of GEII, MCV shall indemnify and hold harmless GEII from any and all
claims, suits, losses and expenses (including attorney's fees) brought
against or incurred by GEII by, or on account of, any such additional
or different owner.
ARTICLE 8 WARRANTY
GEII warrants to MCV that the Parts delivered during the Term of this
Agreement shall be free from defects in material, workmanship and title
and that Services performed during the Term of this Agreement shall be
performed in a competent, diligent manner and in accordance with
Prudent Industry Practices.
[INFORMATION DELETED]
"OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT."
If any failure of Parts or Services to meet the above warranties is
discovered during the warranty period, MCV shall promptly notify GEII
in writing and promptly make the affected Parts or components of the
Covered Units available for correction. GEII shall thereupon correct
any defect by, at its option, re-performing the defective Services;
repairing and re-installing the defective Parts; or delivering
necessary replacement Parts in accordance with Article 6.1.3 and
installing such Parts.
It shall be MCV's cost to make the affected Parts or components of the
Covered Unit available to GEII at the Site if capable of being repaired
at the Site or at the Repair Facilities in accordance with Article 6.4
if GEII determines that such warranty repair cannot be made at the
Site.
GEII shall not be responsible for the cost of opening and closing of
the Covered Unit or for removal or replacement of systems, structures
or parts of the Facility. The condition of any tests shall be mutually
agreed upon and GEII shall be notified of and may be represented at all
tests that may be made.
Except where separate warranty terms are set forth in a proposal for
Extra Work from GEII to MCV (in which case the separate warranty terms
apply), the provisions of this Article 8 shall apply to Extra Work
which GEII agrees to undertake pursuant to this Agreement.
GEII shall have no responsibility for Unplanned Maintenance or other
failures, which are otherwise covered under a warranty provided by a
party other than GEII or other contract under which the failed or
defective goods or services were provided. Any Parts or Services
provided by GEII to correct defects which are covered under a warranty
provided by a party other than GEII or other contract shall be treated
as Extra Work.
GEII shall not be responsible for any warranty claim arising out of or
necessitated by a Pre-Existing Condition.
The preceding paragraphs of this Article 8 set forth the exclusive
remedies for all claims based on failure of or defect in the Parts and
Services provided under the Agreement or GEII's performance, whether
the failure or defect arises, from a Pre-Existing Condition or, before
or during the applicable warranty period and whether a claim, however
instituted, is based on contract, indemnity, warranty, tort (including
negligence), strict liability or otherwise. The foregoing warranties
and guarantees are exclusive and are in lieu of all other warranties
and guarantees whether written, oral, implied or statutory. NO IMPLIED
STATUTORY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE SHALL APPLY.
8.1 MCV WARRANTY
MCV warrants that all parts, materials and services provided or made
available to GEII by MCV in connection with this Agreement shall be
free from defects in materials, design, title, and workmanship and
performed in a competent, diligent manner; provided, however, that this
Article 8.1 shall not apply in the case of parts provided under the
Parts Supply Agreement effective September 20, 2002 between GEII and
MCV. In the event of a breach of this warranty, MCV shall correct the
breach and such correction shall be GEII's exclusive remedy for all
claims whatsoever. NO IMPLIED STATUTORY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE SHALL
APPLY.
ARTICLE 9 INSURANCE
9.1 GEII'S INSURANCE
9.1.1 During the Term of this Agreement, GEII shall maintain the
following insurance coverage:
9.1.1.1 Workers' Compensation and any other
statutory insurance required by law with
respect to work related injuries or disease
of employees of GEII applicable to GEII's
employees in such form(s) and amount(s) as
required by all applicable laws.
9.1.1.2 Commercial General Liability ("CGL")
insurance for GEII's protection, in broad
form including coverage for liability
assumed under contract, providing coverage
for bodily injury and property damage with a
combined single limit of not less than five
million dollars ($5,000,000) cumulative
total of underlying and excess coverages.
9.1.2 The foregoing insurance policies shall provide that the policy
shall not be canceled or changed without thirty (30) days'
advance written notice to MCV of such cancellation or change.
9.1.3 Prior to commencement of any work under this Agreement, and
not less than annually thereafter during the Term of this
Agreement, GEII shall deliver to MCV certificate(s) of
insurance showing that the foregoing insurance is in full
force and effect.
9.2 MCV'S INSURANCE
9.2.1 During the Term of this Agreement, MCV shall maintain the
following insurance coverage:
9.2.1.1 Workers' Compensation and any other statutory
insurance required by law with respect to
work-related injuries or disease of employees of MCV
applicable to MCV's employees in such form(s) and
amount(s) as required by all applicable laws.
9.2.1.2 Commercial General Liability ("CGL") insurance for
MCV's protection, in broad form including coverage
for liability assumed under contract, providing
coverage for bodily injury and property damage with a
combined single limit of not less than five million
dollars ($5,000,000) cumulative total of underlying
and excess coverages.
9.2.1.3 All Risk Property and Boiler and Machinery Breakdown
insurance covering the full value of the Covered
Units and Facility, together with business
interruption coverage.
9.2.2 The foregoing insurance policies shall provide that the policy
shall not be canceled or changed without thirty (30) days'
advance written notice to GEII of such cancellation or change.
9.2.3 Prior to commencement of any work under this Agreement, and
not less than annually thereafter during the term of this
Agreement, MCV shall deliver to GEII a certificate(s) of
insurance showing that the foregoing insurance is in full
force and effect.
9.3 FAILURE TO MAINTAIN INSURANCE
Failure of either of the Parties to maintain any insurance required
under this Article 9 shall constitute an event of material breach for
the purposes of Article 4 and, in addition to termination rights,
either Party shall have the right to immediately suspend performance
and delivery until such breach is cured. The suspending Party shall
give notice of said suspension within twenty-four (24) hours of
suspension.
ARTICLE 10 LIMITATION OF LIABILITY
FOR PURPOSES OF THIS AGREEMENT:
10.1 [INFORMATION DELETED]
"OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT."
SUBJECT TO THE FOREGOING, GEII'S MAXIMUM LIABILITY FOR ANY WARRANTY
CLAIM UNDER ARTICLE 8 SHALL NOT EXCEED THE PRICE OF THE PARTS,
INCLUDING INSTALLATION, AND/OR SERVICES WHICH ARE THE SUBJECT OF THE
WARRANTY CLAIM. THE MONETARY LIMITATION OF LIABILITY ON ALL CLAIMS OF
ANY KIND ARISING OUT OF OR RELATED TO ANY EXTRA WORK SHALL NOT EXCEED
THE PRICE PAID FOR PERFORMING SUCH EXTRA WORK.
NOTWITHSTANDING ANYTHING TO THE CONTRARY, ALL GEII LIABILITY SHALL END
UPON EXPIRATION OF THE APPLICABLE WARRANTY PERIOD AND, IN NO EVENT,
LATER THAN TWO (2) YEARS FOLLOWING TERMINATION OR EXPIRATION OF THIS
AGREEMENT, WHICHEVER IS EARLIER.
10.2 IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY,
INDEMNITY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE,
SHALL EITHER PARTY OR THEIR RESPECTIVE SUBCONTRACTORS OR SUPPLIERS BE
LIABLE FOR LOSS OF PROFIT OR REVENUES, LOSS OF USE OF THE FACILITY OR
THE EQUIPMENT OR ANY ASSOCIATED EQUIPMENT, COST OF CAPITAL, COST OF
SUBSTITUTE
EQUIPMENT, FACILITIES, SERVICES OR REPLACEMENT POWER, DOWNTIME COSTS,
CLAIMS OF CUSTOMERS FOR SUCH DAMAGES, OR FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES;
PROVIDED, HOWEVER, NOTHING CONTAINED IN THIS PROVISION SHALL ELIMINATE,
DECREASE, OR OTHERWISE ALTER MCV'S PAYMENT OBLIGATIONS TO GEII, HEREIN.
10.3 IF GEII FURNISHES MCV WITH ADVICE OR ASSISTANCE CONCERNING ANY
PRODUCTS, SYSTEMS OR WORK WHICH IS NOT REQUIRED PURSUANT TO THIS
AGREEMENT, THE FURNISHING OF SUCH ADVICE OR ASSISTANCE WILL NOT SUBJECT
GEII TO ANY LIABILITY, WHETHER IN CONTRACT, WARRANTY, INDEMNITY, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.
10.4 EXCEPT TO THE EXTENT GEII HAS RESPONSIBILITY UNDER ARTICLE 8,
"WARRANTY", MCV WAIVES RIGHTS OF RECOVERY AGAINST GEII, WHETHER MCV'S
CLAIM IS BROUGHT UNDER BREACH OF CONTRACT, WARRANTY, INDEMNITY, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, FOR LOSS OR
DAMAGE TO PROPERTY OF MCV.
10.5 FOR THE PURPOSES OF THIS ARTICLE 10, THE TERM "GEII" SHALL MEAN GEII,
ITS PARENT, AFFILIATES, SUBCONTRACTORS AND SUPPLIERS OF ANY TIER, AND
THEIR RESPECTIVE AGENTS AND EMPLOYEES, WHETHER INDIVIDUALLY OR
COLLECTIVELY. THE PROVISIONS OF THIS ARTICLE 10 SHALL PREVAIL OVER ANY
CONFLICTING OR INCONSISTENT PROVISIONS CONTAINED IN ANY OF THE
DOCUMENTS COMPRISING THIS AGREEMENT, EXCEPT TO THE EXTENT THAT SUCH
PROVISIONS FURTHER RESTRICT GEII'S LIABILITY.
10.6 GEII SHALL HAVE NO LIABILITY WHATSOEVER FOR ANY DAMAGES RESULTING FROM
"PRE-EXSITING CONDITIONS."
ARTICLE 11 FORCE MAJEURE
As used herein, the term "FORCE MAJEURE EVENT" shall mean any event or
occurrence, which is beyond the reasonable control of the affected
Party and which prevents the Party affected thereby from performing
hereunder except where such Party could have reasonably foreseen and
avoided the occurrence without undue expense, including, but not
limited to, the following: (a) acts of God; (b) governmental
priorities; (c) acts or failures to act on the part of any governmental
authority including, without limitation, changes after the Effective
Date in Government Requirements (including the enactment of new
Government Requirements); (d) acts of war or public disorders, civil
violence or disobedience, blockages, strikes, lockouts, sabotage,
insurrection, terrorism (whether government sponsored or otherwise) or
rebellion; (e) floods, hurricanes, earthquakes, lightning, hail, or
other natural calamities; (f) explosions or fires; (g) accidents in
transportation or unavailability of commercially practicable
transportation; (h) delays in obtaining goods or services from any
subcontractor or supplier by reason of a Force Majeure Event as defined
herein; (i) any act or omission of the other Party to this Agreement,
its employees, subcontractors or agents, or other persons acting on
such
Party's behalf; or (j) the act of any third party which is beyond the
reasonable control of the affected Party.
The affected Party shall take all reasonable actions necessary and in
good faith to mitigate and eliminate the effect of the Force Majeure
Event. The affected Party shall give prompt written notice to the other
Party, with full particulars of the circumstances constituting the
Force Majeure Event and of the obligation or performance which is or
which is expected to be thereby delayed or prevented. So long as the
affected Party has complied with its obligations under this Article 11,
any delay in or total or partial failure of performance by the affected
Party hereto caused by a Force Majeure Event shall not constitute a
default hereunder. Except as otherwise provided herein, all of the
provisions of this Agreement shall remain in full force and effect in
the event of the occurrence of a Force Majeure Event. Except as
provided in Article 4, no occurrence of a Force Majeure Event shall
suspend, alter, or affect MCV's obligation to make, or GEII's right to
receive, the payments required herein for work performed by GEII.
If delay excused by this Article 11 extends for more than one hundred
twenty (120) days and the Parties have not agreed upon a revised basis
for continuing the work at the end of the delay, including the
equitable price adjustment, then either Party (except where delay is
caused by MCV, in which event only GEII), upon thirty (30) days written
notice, may terminate this Agreement in accordance with Article 4.2.3.1
of this Agreement.
ARTICLE 12 INSPECTION AND QUALITY SURVEILLANCE
MCV's designated employees shall be provided access to GEII's
facilities for purposes of obtaining information on production
progress, determining status and observing tests and inspections
concerning Parts to be provided to MCV under this Agreement. Such
access shall be limited to areas concerned with the Parts and shall not
include restricted areas or areas where work of a proprietary nature is
being conducted. MCV shall be advised as to any schedule for testing
which the Parties have mutually agreed upon. MCV's designated employees
shall be given such access and be provided with an opportunity to
observe those tests during regular working hours. Neither completion of
production work nor shipment of any of the Parts, however, shall be
delayed to accommodate such inspectors.
ARTICLE 13 ASSIGNMENT
13.1 GEII AFFILIATES
GEII shall have the right to transfer, in whole or in part, by way of
assignment or novation to any Affiliate its rights and/or obligations
under this Agreement. Provided GEII and its Affiliate agrees to execute
such subsequent documentation, including in the case of an assignment,
the Form of Assignment Agreement attached hereto as Exhibit 11. Any
such assignment shall not relieve GEII from any of its obligations
hereunder.
13.2 NO ASSIGNMENT
Except as set forth in this Agreement, neither Party may transfer or
assign, in whole or in part, any of its rights or obligations under
this Agreement without the express written consent of the other Party,
such consent not to be unreasonably withheld. Such consent
shall not be deemed to be unreasonably withheld if conditions,
including but not limited to, the following exist: (i) the purported
transferee or assignee does not have the legal capacity, powers or
authorization to become a party to and perform the obligations under
the Agreement including any necessary governmental approvals, or (ii)
the technical competence or financial standing of the purported
transferee or assignee is insufficient to meet the obligations under
the Agreement, or (iii) the purported transferee or assignee is a
Competitor of GEII. Furthermore, any such assignment shall not relieve
the transferor/assignor of its obligations hereunder, which arose prior
to such transfer or assignment. Any transfer or assignment, or
attempted transfer or assignment, in contravention of this Article
13.2, whether by operation of law or otherwise, shall be null and void.
A sale or transfer of all or a controlling interest in a Party, in
whatever form such interest may be held, sold or transferred, shall be
deemed to be a transfer and assignment subject to this Article 13.2.
For the purposes of this Article 13.2, controlling interest shall mean
greater than 50% equity ownership. In the event of a sale or transfer
of less than a controlling interest to a Competitor of GEII, MCV may
not transfer or assign, in whole or in part, any of its rights or
obligations under this Agreement without the express written consent of
GEII.
Nothing in this Article 13.2 shall restrict GEII from subcontracting
portions of its work, provided that GEII shall remain responsible to
MCV for performance of subcontracted work.
ARTICLE 14 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Michigan, without regard to its choice of law,
rules, provided that any provision of such law invalidating any
provision of this Agreement or modifying the intent of the Parties as
expressed in the terms of this Agreement shall not apply (the
"Applicable Law").
All transactions under this Agreement shall at all times be subject to
the export control laws and regulations of the United States ("US") and
any changes or amendments thereto. MCV agrees not to re-export US
origin goods supplied by GEII other than in and to the country of the
Site, except as may be permitted by such United States export laws and
regulations. Without limiting the generality of the foregoing, MCV
agrees that it will not re-export to the countries designated in Export
Administration Regulations Article TR.4 (F) any technical data or
software (or the direct product thereof) provided to MCV by GEII in
connection with this Agreement, unless prior written authorization is
obtained from the United States Export Administration.
ARTICLE 15 SEVERABILITY
The invalidity in whole or in part of any part of this Agreement shall
not affect the validity of the remainder of this Agreement. The rights
and remedies set forth in this Agreement are the exclusive rights and
remedies of each Party with respect to this Agreement, its performance
or breach.
ARTICLE 16 NOT USED
ARTICLE 17 ENTIRE AGREEMENT
This Agreement represents the entire agreement between the Parties and
no modification, amendment, rescission, waiver or other change shall be
binding on either Party unless assented to in writing by the Parties'
authorized representatives. Any oral or written representation,
warranty, course of dealing or trade usage not contained or referenced
herein shall not be binding on either Party. Each Party agrees that it
has not relied on, or been induced by, any representations of the other
Party not contained in this Agreement.
ARTICLE 18 NOT USED
ARTICLE 19 NOTICES
All notices required or desired to be given pursuant to this Agreement,
including updates to the Consent and Agreement document, shall be in
writing and shall be delivered by personal in-hand delivery, sent by
facsimile transmission, or sent prepaid by recognized delivery service
(such as Federal Express), addressed as follows:
IF TO MCV WITH A COPY TO
Robert E. McCue James Mooney
100 Progress Place 100 Progress Place
Midland, MI 48640 Midland, MI 48640
Facsimile No.: (989) 633-7935 Facsimile No.: (989) 633-7965
Telephone No.: (989) 633-7930 Telephone No.: (989) 633-7960
IF TO GEII WITH A COPY TO
- ------------------------- --------------------------
4200 Wildwood Parkway 4200 Wildwood Parkway
Atlanta, Georgia 30339 Atlanta, Georgia 30339
U.S.A. U.S.A.
ATTENTION: ATTENTION:
General Manager- Counsel-GE Contractual Services
GE Contractual Services
Facsimile No.: 678-844-5312 Facsimile No.: 678-844-5312
Telephone No.: 770-859-7793 Telephone No.: 770-859-7383
Such notices shall be deemed to have been given when delivered in the case of
in-hand delivery, on the date shown by a facsimile transmission report or
confirmation in the case of successfully completed facsimile transmission, and
on the date of delivery in the case of delivery service. Either Party may modify
its address for notices by advance written notice to the other Party delivered
in conformance with this Article 19.
MCV shall provide a current list of Owner Participants, the related Owner
Trustees, the related Indenture Trustees, the Funding Corporations, and the MDC.
to GEII and notify GEII of any updates to such list in the event of a change in
its composition.
ARTICLE 20 DISPUTES
20.1 All disputes arising in connection with this Agreement shall be
settled, if possible, by negotiation of the Parties. If the matter is
not resolved by such negotiations, either Party may, by the giving of
written notice to the other Party, cause the matter to be referred to a
meeting of appropriate higher management representatives of the
Parties. Such meeting shall be held within ten (10) business days
following the giving of the written notice.
20.2 If the matter is not resolved within twenty (20) business days after
the date of the notice referring the matter to appropriate higher
management, or such later date as may be mutually agreed upon, the
dispute may be submitted to non-binding mediation at the mutual
agreement of the Parties. In the event of mediation, mediator fees
shall be shared equally by the Parties.
20.3 If the matter is not resolved through such mediation, the Parties may
then, subject to the terms of this Agreement, commence legal action in
a court of competent jurisdiction in order to resolve the dispute.
20.4 Notwithstanding the foregoing, each Party shall have the right at any
time, at its option and where legally available, to commence an action
or proceeding in a court of competent jurisdiction, subject to the
terms of this Agreement, in order to seek and obtain a restraining
order or injunction, but not monetary damages, to enforce the
confidentiality provisions set forth in Article 22.
ARTICLE 21 INDEPENDENT ENTITIES
MCV and GEII are each independent of the other and nothing in this Agreement is
intended, or shall be deemed, to create a partnership or joint venture of the
Parties.
ARTICLE 22 CONFIDENTIAL INFORMATION
22.1 Any information disclosed by either Party in connection with this
Agreement and designated in writing, by label, stamp or other written
communication by the disclosing Party as "confidential" or
"proprietary" at the time of disclosure shall be treated as
"Confidential Information" subject to this Article 22. It is agreed
that this Agreement and all drafts hereof, shall be considered GEII's
Confidential Information at all times. The recipient Party agrees (i)
to treat such Confidential Information as confidential and not disclose
it to third parties other than GEII Affiliate entities as necessary for
performance of this Agreement, (ii) to restrict the use of such
Confidential Information to
matters relating to the recipient Party's performance of this
Agreement, and (iii) to restrict access to such information to
employees of the recipient Party and GEII's Affiliate entities whose
access is necessary in the implementation of this Agreement. All copies
of written Confidential Information will be returned to the disclosing
Party upon request (i) except to the extent that an item of such
information is designated to be retained by the recipient Party
pursuant to a specific provision of this Agreement, and (ii) either
Party may retain one copy of the other Party's Confidential Information
until such time as all its liability under this Agreement terminates.
The foregoing restrictions do not apply to Confidential Information
which: (i) is, or becomes, publicly known other than through a breach
of this Article 22 or other illegal or wrongful act; (ii) is in
possession of the recipient Party prior to receipt from the disclosing
Party or (iii) is independently developed by the recipient Party,
provided that the person or persons developing the same have not had
access to such Confidential Information from the disclosing Party under
this Agreement; (iv) is furnished to others by the disclosing Party
without restrictions similar to those herein on the right of the
receiving Party to use or disclose, or (v) must be disclosed pursuant
to requirements of law or valid legal process, provided that the Party
intending to make disclosure in response to such requirements or
process shall promptly notify the disclosing Party in advance of any
such disclosure and reasonably cooperate in attempts to maintain the
confidentiality of the Confidential Information.
22.2 Neither Party shall discuss employment with or hire any employee of the
other Party or of the other Party's contractors or subcontractors
working at the Facility without a letter of "non-objection" from the
affected Party.
ARTICLE 23 CONSENT AND AGREEMENT
GEII and MCV shall execute the Consent and Agreement attached as Exhibit 13.
ARTICLE 24 PLANT SECURITY AND SAFETY
24.1 The Parties shall take necessary safety and other precautions to
protect all property and persons from damage, injury, or illness
arising out of the performance of the Agreement hereunder. The Parties
shall comply and require its subcontractors to comply strictly with
Government Requirements pertaining to health or safety which are
applicable to the Parties work hereunder. On an ongoing basis prior to
performing any aspect of its work hereunder, GEII shall inspect the
places where its employees, agents, or subcontractors are, or may be
present, at the Facility. If any unsafe conditions are discovered which
are wholly within the jurisdiction and control of GEII and unrelated to
any concurrent activities or actions of others including, but not by
way of limitation, MCV, then GEII shall promptly take action to correct
any such conditions prior to initiating or continuing any further work
in potentially affected areas. With respect to any unsafe conditions
which GEII discovers or of which GEII is made aware, and which
conditions are attributable in whole or in part to MCV's ongoing
operations, GEII shall immediately suspend performance of the affected
work, secure the area of concern, and notify MCV both verbally and in
writing of said unsafe condition. All further work in the affected
area shall remain suspended until said condition is corrected. GEII,
its employees and subcontractors shall comply with all security and
safety rules of MCV while at the Site.
24.2 GEII shall orally report to MCV at the time of the incident all
accidents, injuries, or illnesses requiring medical attention (other
than first aid), damage to property of MCV or GEII, and fires. Written
reports, satisfactory in form and content to MCV, shall be submitted by
GEII promptly after each incident.
24.3 GEII shall maintain, in form and content approved by MCV, accident,
injury, and illness statistics which shall be available for inspection
by MCV and submitted to MCV upon MCV's written request.
24.4 GEII shall, at all times, keep its work area in a neat, clean, and safe
condition. Upon completion of each task, GEII shall promptly return
unused materials furnished by MCV and either remove from GEII's work
area or place in designated storage all of GEII's equipment, material,
scaffolding, and like items, leaving GEII's work area clean, safe, and
ready for use. In the event GEII shall fail to maintain its work area
as described above and in a manner satisfactory to MCV, or to effect
such cleanup or removal within two (2) working days after written
notice to do so, MCV shall have the right without further notice to
GEII to perform such cleanup and remove such items on behalf or at the
risk and expense of GEII. MCV may store items so removed at a place of
MCV's choosing on behalf of GEII and at GEII's risk and expense. MCV
shall promptly notify GEII of such place of storage. GEII shall
reimburse MCV within fifteen (15) days of receipt of invoice from MCV
for the costs of such cleanup, removal, and storage .
24.5 MCV shall allow for review by GEII of, and instruction by MCV on, MCV's
security and safety practices, proper and safe handling and disposal of
hazardous substances and protection of GEII's personnel from exposure
thereto, energization/de-energization of all power systems (electrical,
mechanical and hydraulic) using a safe and effective lock-out tag
procedure, and conducting periodic safety meetings.
24.6 GEII may, from time to time, conduct safety audits to ensure safe
conditions exist and make recommendations to MCV concerning the same.
Neither the conduct nor non-conduct of safety audits, nor the making of
any recommendation by GEII, shall relieve MCV of the responsibility for
providing a safe working environment. If GEII's personnel require
medical attention, local MCV facilities will be made available to
GEII's personnel for the duration of such needs.
24.7 GEII personnel shall not be required to work in excess of maximum time
periods, if any, prescribed by applicable law.
24.8 MCV's operation of equipment at the Site, including the Covered Units,
is the responsibility of MCV. If MCV requires or permits GEII's
personnel to operate equipment at the Site, MCV shall indemnify and
save GEII, its employees and agents, harmless from expense and
liability (including reasonable attorneys' fees) incurred by or imposed
upon GEII, its employees and agents, based upon injury to persons
(including death) or damage to property resulting from operation of
equipment at the Site by GEII personnel.
24.9 GEII shall comply with health and safety requirements established from
time to time by MCV at the Facility, provided, however, that if MCV
imposes unusual or new
requirements, or requirements that materially impact GEII's costs or
performance, the Parties will negotiate appropriate amendments to this
Agreement to address such impact, including an equitable adjustment in
price and/or payment terms.
24.10 MCV shall provide site security, including but not limited to
safeguarding the Site, the Parts and GEII's tools and consumables and
personnel by whatever means MCV deems necessary, including guards,
fencing, and lighting. GEII's personnel will take all reasonable
precautions to protect their tools and equipment on Site against petty
theft.
ARTICLE 25 SUPPLEMENTAL PAYMENT TERMS
25.1 NONFULFILLMENT
In addition to its other rights, if MCV fails to fulfill any of the payment
conditions in this Agreement, GEII may suspend performance and delivery and/or
thereafter require full or partial payment in advance. Any cost incurred by GEII
in accordance with such suspension (including storage costs) shall be payable by
MCV upon submission of GEII's invoices.
25.2 REPAIR SERVICES LIEN
If Repair Services are performed at the Repair Facility, MCV agrees that, in
addition to any right of lien which GEII may be entitled to as a matter of law,
GEII shall be entitled to a general lien on MCV's equipment in GEII's
possession, including any MCV's equipment which has already been paid for by
MCV, to the extent of the unpaid amounts due to GEII under this Agreement. If
MCV fails to fulfill any condition of its payment obligations, GEII may suspend
or terminate further performance and may retain possession of MCV's equipment
until MCV fulfills its payment obligations. If MCV's payment obligations are not
fulfilled within ninety (90) days after receipt of GEII's invoice, GEII may,
upon not less than seven (7) days written notice to MCV, sell MCV's equipment at
a public or private sale and apply the net proceeds to offset MCV's payment
obligations.
ARTICLE 26 HAZARDOUS CHEMICALS
26.1 MCV will be responsible for transportation and disposal of all
waste and debris in accordance with state and federal laws.
All waste and debris resulting from GEII's work at the
Facility shall be turned over to MCV for disposal. GEII shall
collect all such waste and debris and place it in containers
provided and designated by MCV at the Facility. GEII will use
reasonable efforts to avoid unnecessary mixing of any
hazardous or toxic wastes with each other or with other
substances. GEII shall use reasonable and prudent
cost-effective means to minimize both the volume and the
toxicity of any hazardous or toxic wastes which may be
produced by GEII in connection with this Agreement. GEII will
not bring Amines or Mercury on the Facility. All waste and
debris which requires special marking, labeling, handling, or
disposal pursuant to applicable Government Requirements shall
be kept separate from all other waste and debris to the extent
reasonably practicable. In the event GEII spills or otherwise
releases at the Facility any toxic or hazardous waste or
hazardous substance as defined in the Michigan Hazardous Waste
Management Act, MCLAss.299.504, the federal Resource
Conservation and Recovery Act, the federal Comprehensive
Environmental Response, Compensation and Liability Act, the
federal
Emergency Planning and Community Right to Know Act of 1986, or
any substance regulated by the Toxic Substances Control Act,
15 U.S.C.ss.2601 et seq., as such statutes may be amended from
time to time and any new or applicable successor statutes
thereto, GEII shall immediately notify MCV and shall provide
for the cleanup of such spill or release. GEII shall be
compensated for such cleanup on a cost plus basis pursuant to
Article 5 hereof as Extra Work except to the extent such spill
or release is caused by the negligence or willful misconduct
of GEII.
26.2 Prior to GEII commencing any work at the Site, MCV shall (i)
provide documentation that identifies any existing
contamination of Site property and the presence of any
Hazardous Materials in or about the Facility, and (ii) allow
GEII, at its option, access to the Site and Facility to
perform a Site evaluation, including without limitation, a
review of applicable documents and visual examination of the
Site and Facility and Covered Units, provided, however, the
conduct or non-conduct of any such evaluation shall not give
GEII any responsibility or liability respecting Site
conditions. Responsibilities and liability respecting Site
conditions shall be in accordance with the other provisions of
this Agreement.
26.3 GEII shall notify MCV if the following conditions are
encountered in the course of GEII's work: (i) subsurface or
latent physical conditions at the Site differing materially
from those disclosed by MCV pursuant to Article 26 (i) or
those otherwise described to GEII by MCV; or (ii) previously
unknown physical conditions at the Site differing from those
ordinarily encountered and generally recognized as inherent in
the work of the character provided in this Agreement. MCV
shall promptly investigate the conditions described above. If
it is determined that any such condition causes an increase in
GEII's cost of, or the time required for, performance of any
part of the work under this Agreement, an equitable adjustment
in price and time of performance shall be made and this
Agreement shall be modified in writing accordingly.
26.4 If, at the Site, GEII encounters toxic substances, hazardous
substances or hazardous wastes (as such terms may be defined
in any statute or ordinance or regulations promulgated by any
federal, state provincial, or local governmental authority of
the United States or the country of the Site) (collectively,
the "Hazardous Materials") which require special handling
and/or disposal, MCV shall immediately take whatever
precautions are required to legally eliminate such hazardous
conditions so that the work under this Agreement may safely
proceed. If any such Hazardous Materials cause an increase in
GEII's work, or cost of, or the time required for, performance
of any work under this Agreement, additional work and cost
shall be charged as Extra Work and an equitable adjustment
shall be made in any schedule. MCV agrees to properly dispose
of all Hazardous Materials produced or generated in the course
of GEII's work at the Site. MCV shall indemnify and hold GEII
harmless for any and all claims, damages, losses, causes of
action, demands, judgments and expenses arising out of or
relating to the presence of any Hazardous Materials which are:
(i) present on the Site prior to the commencement of GEII's
work; or (ii) improperly handled or disposed of by MCV; or
(iii) brought onto the Site or produced thereon by parties
other than GEII or its subcontractors under this Agreement.
ARTICLE 27 EXCULPATION
Notwithstanding anything to the contrary contained in this Agreement
except as stated in this Article 27, the liabilities and obligations of
MCV arising out of, or in connection with, this Agreement or any other
agreements entered into pursuant hereto shall not be enforced by any
action or proceeding wherein damages or any judgment or specific
performance of any covenant in any such document and whether based upon
contract, warranty, negligence, indemnity, strict liability or
otherwise, shall be sought against the assets of the partners of MCV.
GEII waives any and all rights to sue for, seek or demand any judgment
against such partners and their affiliates, other than MCV, by reason
of the liabilities and obligations of MCV arising out of, or in
connection with, this Agreement or any other agreements entered into
pursuant hereto, except to the extent such partners breach any
obligations regarding Confidential Information as more fully defined
herein in Article 22 or are legally required to be named in any action
to be brought against MCV.
ARTICLE 28 PATENTS
MCV agrees to indemnify and hold harmless GEII from any rightful claim of any
third party that any part or parts manufactured by MCV or furnished hereunder by
MCV infringes any patent of the United States and European Union. If GEII
notifies MCV promptly of the receipt of any claim, does not take any position
adverse to MCV regarding such claim and gives MCV information, assistance and
exclusive authority to settle and defend the claim, MCV shall, at its own
expense and option, either (i) settle or defend the claim or any suit or
proceeding and pay all damages and costs awarded in it against GEII, (ii)
procure for GEII the right to continue to make or use the part, (iii) modify the
part so that it becomes non-infringing, or (iv) replace the part with
non-infringing parts. If, in any suit arising from such a claim, the continued
use of the part for the purpose intended is forbidden by any court of competent
jurisdiction, MCV shall at its option take one or more of the actions under
(ii), (iii); or (iv) above. The foregoing states the entire liability of MCV for
patent infringement of any parts furnished by MCV hereunder.
GEII agrees to indemnify and hold harmless MCV from any rightful claim of any
third party that any Part or Parts manufactured by GEII or furnished hereunder
by GEII infringes any patent of the United States and European Union. If MCV
notifies GEII promptly of the receipt of any claim, does not take any position
adverse to GEII regarding such claim and gives GEII information, assistance and
exclusive authority to settle and defend the claim, GEII shall, at its own
expense and option, either (i) settle or defend the claim or any suit or
proceeding and pay all damages and costs awarded in it against MCV, (ii) procure
for MCV the right to continue using the Part, (iii) modify the Part so that it
becomes non-infringing, (iv) replace the Part with non-infringing Parts; or (v)
remove the infringing Part and refund and/or reduce the price allocable to such
Part. If, in any suit arising from such a claim, the continued use of the Part
for the purpose intended is forbidden by any court of competent jurisdiction,
GEII shall at its option take one or more of the actions under (ii), (iii), (iv)
or (v) above. The foregoing states the entire liability of GEII for patent
infringement of any Parts furnished by GEII hereunder.
GEII assumes no liability to MCV for patent infringement claims by third parties
arising out of performance of Repair Services, provided, however, GEII shall
make available to MCV any patent indemnity rights GEII may have against third
party suppliers of materials used in the Repair Services.
ARTICLE 29 TAXES AND DUTIES
29.1 GEII shall be responsible for, and shall pay directly, any and all
corporate and individual taxes that are measured by net income or
profit imposed by any Governmental Authority of any country on GEII,
its employees or subcontractors due to the execution of any agreement
or the performance of or payment for work hereunder (the "GEII Taxes").
If MCV deducts or withholds GEII Taxes, MCV shall furnish within one
(1) month to GEII accurate official receipts from the appropriate
governmental authority for each deducted or withheld amount of GEII
Taxes. MCV shall be responsible for, and shall pay directly when due
and payable, any and all MCV Taxes, as defined below, and all payments
due and payable by MCV to GEII hereunder shall be made in the full
amount of the price specified in this Agreement, free and clear of all
deductions and withholding for MCV Taxes.
If MCV deducts or withholds MCV Taxes, MCV shall pay additional amounts
to GEII to cause the amounts actually received by GEII, net of deducted
or withheld MCV Taxes, to equal the full amount of the specified
prices, and shall provide to GEII within one (1) month, along with such
payments, accurate official receipts from the appropriate governmental
authority for deducted or withheld MCV Taxes. If GEII is required to
pay MCV Taxes, MCV shall, promptly upon presentation of GEII's invoice
and accurate official receipts from the appropriate governmental
authority for such MCV Taxes, pay to GEII in U.S. dollars an amount
equal to the U.S. dollar equivalent of such MCV Taxes (calculated at
the exchange rate in effect at the time payment of such MCV Taxes was
made).
29.2 "MCV Taxes" means all taxes, duties, fees, or other charges of any
nature (including, but not limited to, ad valorem consumption, excise,
franchise, gross receipts, import, export, license, property, sales,
stamp, storage, transfer, turnover, use, or value-added taxes, and any
and all items of withholding, deficiency, penalty, addition to tax,
interest, or assessment related thereto), other than GEII Taxes,
imposed by any Governmental Authority of any country on MCV or its
employees or subcontractors due to the execution of any agreement or
the performance of or payment for work hereunder. Products exported
from the United States are presumed to be exempt from taxes levied
within the United States. When requested by GEII, MCV agrees to furnish
without charge evidence of tax or duty exemption acceptable to the
taxing or customs authorities. Furthermore, if MCV arranges for export
shipment, MCV agrees to provide GEII, without charge, an export bill of
lading.
ARTICLE 30 NO NUCLEAR USE
30.1 THE PARTS AND SERVICES PROVIDED AND PERFORMED HEREUNDER ARE NOT
INTENDED FOR APPLICATION (AND SHALL NOT BE USED) IN CONNECTION WITH ANY
NUCLEAR INSTALLATION OR ACTIVITY AND MCV WARRANTS THAT IT SHALL NOT USE
THE PARTS AND SERVICES FOR SUCH PURPOSES, OR PERMIT OTHERS TO USE THE
PARTS OR SERVICES FOR ANY SUCH PURPOSES.
30.2 IF, IN BREACH OF THE FOREGOING, ANY SUCH USE OCCURS, GEII, ITS PARENT
AND AFFILIATES, SUPPLIERS AND SUBCONTRACTORS, SHALL HAVE NO LIABILITY
FOR ANY NUCLEAR OR OTHER DAMAGE, INJURY OR CONTAMINATION, AND MCV SHALL
INDEMNIFY GEII, ITS PARENT AFFILIATES, SUPPLIERS AND SUBCONTRACTORS OF
EVERY TYPE AND TIER AGAINST ANY SUCH LIABILITY, WHETHER ARISING AS A
RESULT OF BREACH OF CONTRACT, WARRANTY, INDEMNITY, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.
ARTICLE 31 GENERAL CLAUSES
31.1 Any information, suggestions or ideas transmitted by MCV to GEII in
connection with performance hereunder are not to be regarded as secret
or submitted in confidence except in accordance with Article 22,
"Confidential Information".
31.2 Except as provided in the articles entitled "Limitations of Liability"
and "No Nuclear Use", the provisions of this Agreement are for the
benefit of the Parties hereto and not for any other or third party.
31.3 Notwithstanding anything to the contrary, GEII shall have the right, in
its discretion, to gather data and information concerning Parts and
Covered Units performance and disclose any such data to any GEII
Affiliate. In the event that GEII deems it necessary to disclose any
such information to other than a GEII Affiliate which may reasonably be
considered to be Site specific, it shall first obtain approval from MCV
to do so, such approval not to be unreasonably withheld.
31.4 The language of this Agreement, and all documents, materials and
training, if any, to be supplied by GEII under this Agreement shall be
English.
31.5 Article headings are for convenience and shall not be given effect in
interpretation of this Agreement.
31.6 Subject to liability time limitations contained herein, the following
Articles shall survive termination of the Agreement: Article 4.2
(Termination), Article 9.2.1.3 (Insurance, to the extent of the waiver
of subrogation), Article 8 (Warranty), Article 10 (Limitation of
Liability), Article 20 (Disputes), Article 22 (Confidential
Information), Article 24.8, Article 13 (Assignment), Article 24 (Plant
Security and Safety), Article 26(Hazardous Chemicals), Article 28
(Patents), Article 19 (Notices), Article 5.10 (Change in Law Costs),
Article 14 (Applicable Law), Article 29 (Taxes and Duties), Article 30
(No Nuclear Use), and Article 31 (General Clauses), provided, however,
that in the event of a termination by GEII on account of MCV's Default
or Insolvency, MCV's warranty and guarantee rights under Article 8 and
MCV's rights under Article 28 shall also terminate.
31.7 This Agreement may be signed in counterparts with the same effect as if
all signing Parties had signed the same document. All counterparts
shall be construed together and constitute one and the same contract.
- ---------------------------------------- --------------------------------------
"GE INTERNATIONAL INC." "MIDLAND COGENERATION VENTURE
LIMITED PARTNERSHIP"
By: /s/ James N. Suciu
---------------------------- By: /s/ James Kevra
----------------------------
Printed Name: James N. Suciu
------------------- Printed Name: James Kevra
------------------
Title: VP - Energy Services
-------------------------- Title: President and CEO
-----------------------
EXHIBIT 1
COVERED UNITS
THE COVERED UNIT SHALL CONSIST OF THE FOLLOWING:
GAS TURBINE COVERED UNIT:
Twelve (12) ABB GT11NM gas turbines (flange to flange) up to the following
terminal points described below:
Gas turbine terminal points:
- Flanged connection at inlet bellmouth
- Flanged connection at exhaust
- Closest air inlet and outlet connections to turbine casing(s)
- Closest water inlet and outlet connections to turbine casing(s)
- Closest electrical connections to turbine casing(s)
- Closest fuel inlet connection to combustion chamber
Excluded from the scope are the following components:
- Auxiliary systems
- Control systems
- Inlet system (except as required to perform "C" inspection scope)
- Exhaust system downstream of exhaust housing
GENERATOR COVERED UNIT:
Twelve (12) Alstom generator an exciter(excluding auxiliary systems) up to the
following terminal points described below:
- Coupling connection on turbine side
- End connection point of generator flex leads
- Closest air inlet and outlet connections to generator casing
- Closest water inlet and outlet connections to generator casing
- Closest electrical connections to generator casing
EXHIBIT 2
TECHNICAL SCOPE
"COVERED PARTS "shall be:
- Turbine Blades
- Stage 1
- Stage 2
- Stage 3
- Stage 4
- Stage 5
- Turbine Vanes
- Stage 1
- Stage 2
- Stage 3
- Stage 4
- Stage 5
- Vane Carriers
- Tile Carriers Rings
- Tiles
- C Segment
- Combustion Chamber Lower Insert
- Turbine Entry Segments
- Stator Heat Shields A-F
- Rotor Heat Shields A-L
- Hot Gas Casing
- Exhaust housing
- Swirler
- Single Burner assemblies
- EV Burners (per terms of Article 3.6.1)
- Hardware necessary for installation of above parts
- Consumables for a standard "C" Inspection.
The Planned Maintenance work of GEII will consist of the following work,
including provision of Covered Parts, as GEII determines to be necessary in
accordance with this Agreement: (i) Camera (ii) visual, (III) "C" Inspection.
Recognizing that the precise scope of such maintenance events may vary over the
Term of this Agreement, such as by extension of the intervals between the need
to repair or replace parts, the following outlines a current example scope of
said Planned Maintenance events but not necessarily the exact scope of work of
GEII under this Agreement.
This Agreement assumes that the nominal maintenance interval for these
inspection events is as follows:
(a) Camera inspection: Approximately every 3000 EOH
(b) Visual inspection: Approximately every 8000 EOH
(c) "C" Inspection: Approximately every 24,000 EOH
Maintenance inspections as defined in "PLANNED MAINTENANCE" shall be the
following inspections:
1. CAMERA INSPECTION
ACTIVITY MCV GE
-------- --- --
Remove GT ignition torch assembly x
Complete visual inspection of the GT using MCV camera assembly x
Provide a technical report of the condition of the GT parts seen through the ignition x
assembly
Install the GT ignition torch assembly x
Return the unit to commercial operation x
2. VISUAL INSPECTION
ACTIVITY MCV GE
Remove insulation x
Disconnect piping flanges, remove burner bolts, and remove burner assembly x
Complete visual inspection of the GT x
Provide a technical report of the condition of the GT parts x
Complete a final inspection of the hot gas path x
Reinstall the burner and reconnect all piping flanges x
ACTIVITY MCV GE
-------- --- --
Reinstall insulation x
Return the unit to commercial operation x
3. "C" INSPECTION
NOTE: If no activities/comments are mentioned in the column "Cost Plus Basis",
the following is applicable.
The listed items here are cost plus:
>> Attend repairs outside of hot gas path
>> Spare parts supply not included as Covered Parts
>> Special tools, if required
>> Manpower outside normal "C" inspection scope
>> Other materials not included
COST PLUS LUMP SUM
STEP DESCRIPTION MCV BASIS BASIS
---- ----------- --- ----- -----
- -- PRE-SHUT DOWN
10 Data Recording Record
20 Check for leaks and observe combustion Check
characteristics
- -- ENCLOSURES
30 Exterior paneling Remove/Install
40 Air intake duct and silencer hood (for blow-off Remove/Install
valves)
50 Man hole exhaust cover Remove/Install
- -- THERMAL BLOCK
60 1st Shaft/blading reference measurement Measure
COMBUSTION CHAMBER
70 Disconnect fuel pipes from burner Remove
71 Loosen screws to burner Remove
COST PLUS LUMP SUM
STEP DESCRIPTION MCV BASIS BASIS
---- ----------- --- ----- -----
72 Flame monitor units Remove
73 Burner unit Remove
BURNER UNIT
80 Deformation or cracks in the swirler Check
90 Blockage of measuring pipe Check
120 Gas rings for damage (if fitted) Check
130 Make all adjustments according to final settings, Adjustments Check/Measure
HTCZ24
IGNITION GAS SYSTEM
140 Filter GT 5280 Clean/Check
150 Gas pipe Clean/Check
160 Igniter Insulation Clean/Check
170 Ignition Plug Clean/Check
180 Reassembly of burner unit complete Re-fit
THERMAL BLOCK
189 Combustion chamber screws to upper cylinder casing Remove/Install
190 Combustion chamber from gas turbine cylinder Remove/Install
casing
COMBUSTION CHAMBER
200 Loosen screws on external cover Remove *
210 Swirler guide, inner and outer internal covers Remove
220 Loosen screws to sight glass/flame monitors and Remove
tubes
230 Finned segments and supp. cylinder assy. Complete Lift Out *
260 Support Pins for finned segment carrier Remove *
supporting structure
270 Finned segments carrier support structure Lift Out *
280 Support Pins for double shell assembly Remove *
290 Double shell assembly (inner and outer liner and Lift Out *
mixing nozzle)
300 Finned segments for cracks wear and sealing Check
310 Inner liner and mixing nozzles for cracks Check
overheating and wear
- ----------------------
* Only to be removed if cracks are visible at the inner liner/finned segments
carrier, and if repair welds cannot be performed due to lack of access.
* Only to be removed if cracks are visible at the inner liner/finned segments
carrier, and if repair welds cannot be performed due to lack of access.
COST PLUS LUMP SUM
STEP DESCRIPTION MCV BASIS BASIS
---- ----------- --- ----- -----
320 Inner liner/finned segments carrier overlapping Check
for wear and sealing
330 Support pins and bushes for wear Check
340 Sight glass condition Check
350 Reassembly of combustion chamber steps 200 to 290 Re-Fit *
in reverse order
THERMAL BLOCK
360 2nd shaft/blading reference measurement Measure
370 Compressor blow-off valves Remove/Re-Fit/Test
380 Upper cylinder insulation pads Remove/Re-Fit
390 Exhaust gas splitter to/from the cylinder casing Withdraw/Insert
400 Loosen/tighten screws to cylinder upper and lower Remove/Re-Fit
halves
410 Screws between upper and lower halves of gland Remove/Re-Fit
seal on exhaust side
420 Sight glass in lower cylinder casing Remove/Install
430 Upper cylinder casing Remove/Install
440 Attend to welds between hot gas casing upper and WELD GRIND
lower halves
450 Loosen/tighten screws, safety forks between HGG Remove/Re-Fit
upper and lower halves
460 Upper portion of hot gas casing Remove/Re-Fit
470 3rd blading reference measurement Measure
480 Loosen/tighten screws between upper and lower Remove/Re-Fit
blade carrier
490 Upper Part of blade carrier Remove/Re-Fit
500 4th blading reference measurement Measure
510 Loosen/tighten upper and lower compressor Remove/Re-Fit
diffusor screws
520 Upper part of compressor diffusor Remove/Re-Fit
530 Rotor shaft Remove/Re-Fit
540 Compressor diffusor lower half Remove/Re-Fit
550 Blade carrier lower half Remove/Re-Fit
560 Hot gas casing lower half Remove/Re-Fit
COST PLUS LUMP SUM
STEP DESCRIPTION MCV BASIS BASIS
---- ----------- --- ----- -----
BLADING
570 Visual inspection of all blades and heat shields Repair* Check *
610 Visually inspect blade profile and roots for Repair* Check **
cracks
680 Rotor labyrinth seals Check/Replace**
700 New rotor labyrinth sealing rings Repair*
HOT PATH COMPONENTS
730 Grooves in compressor-diffusor for heat shield Check and Repair
inlet segments
740 Groove in upper and lower blade carrier for Check and
locating hot gas casing Repair
750 Hot gas casing Check and Repair
770 Overlapping assembly between hot gas casing and Rectify
inner liner andInstall
790 Sealing between exhaust gas diffusor and gas Check
turbine cylinder
GEARS, DRIVES, COUPLINGS AND SHAFTS
800 All coupling bolts Remove/Re-Fit
810 Shaft position indicator and vibration pick-ups Remove/Re-Fit
820 Loosen/tighten exhaust and air inlet main bearing Remove/Re-Fit
cover screws
830 Both main bearing covers Remove/Replace
840 Thrust bearing axial clearance Check
850 Journal and thrust bearing cap screws Loosen/Tighten
860 Journal and thrust bearing caps Remove/Re-Fit
870 Gearbox cover Remove/Re-Fit
880 Turbine/compressor/gearbox journal bearing radial Check
clearances
890 Gearwheel backlash and contact pattern Measure/Check
- --------------
* If blade removal/reassembly is required it will be performed under the cost
plus basis. [Applicable to compressor blades only]
** Only to be removed as deemed necessary by the GEII's service engineer.
Compressor Blade removal/reassembly under cost plus basis.
COST PLUS LUMP SUM
STEP DESCRIPTION MCV BASIS BASIS
---- ----------- --- ----- -----
900 Main oil pump Check
910 Governor assembly Check
920 Barring gear Check
930 Oil injectors and nozzles Remove/Clean
940 Gearbox components, Steps 870-930, in reverse Re-Fit
order
950 GT/Compressor/Gearbox and Generator Shafts Check/Align
960 Coupling Bolts Check/Install
REGULATING AND CONTROL SYSTEM
-----------------------------
970 Safety oil pressure supervision R1587 Check
980 Lube oil pressure supervision R5502 and GT4010 Check
990 Temperature supervision of bearing oil return Check
flow GT 7325/7329
1000 Differential pressure supervision for Gland Check
Sealing Boxes GT3288/3289
1010 Sealing on Shaft Position Indicator GT 7515 Adjust
1020 Flame Supervision R2590 Check
1030 Control Oil Pressure Supervision R1588 Check
1040 Gas Pressure Supervision (Gas R1584) Check
1050 Differential Pressure Supervision, Air Intake Check
Filter GT 7590
1060 Exciter Warm Air Supervision W2244 Check
1070 Generator Cooling Air, Inlet and Outlet W2150, Check
W2151
1080 Safety Oil Pressure Switch R1587 Adjust/Measure
1090 Emergency Oil Pressure Switch R4591 Adjust/Measure
1100 Lube Oil Pressure Switch R5502 Adjust/Measure
1110 Lube Oil Pressure Switch GT4010 Adjust/Measure
1120 Control Oil Pressure Switch R1588 Adjust/Measure
1130 Set Point Oil Pressure Switch Adjust/Measure
------
STEP ACTIVITY MCV LUMP SUM
---- -------- --- ------
1140 Adjust/measure compressor discharge pressure switch R2585 x
1150 Adjust/measure rotor gland pressure switch GT3288 x
1160 Adjust/measure rotor cooling air pressure switch GT3289 x
1170 Adjust/measure inlet filter pressure switch GT7590 x
1180 Adjust/measure fuel gas pressure switch R1583 x
1190 Adjust/measure fuel gas pressure switch x
1200
1210
1220 Adjust/measure cooling water pressure switch GT2079 x
1230 Adjust/measure turbine bearing temperature switch GT7325 A x
1240 Adjust/measure compressor bearing temperature switch GT7325 B x
1250 Adjust/measure gearbox DS left temperature switch GT7325 C x
1260 Adjust/measure gearbox left temperature switch GT7325 D x
1270 Adjust/measure gearbox DS right temperature switch GT7325 E x
1280 Adjust/measure gearbox NDS left temperature switch GT7325 x
1290 Adjust/measure generator bearing DS temperature switch W7325 A x
1300 Adjust/measure generator bearing NDS temperature switch W7325 A x
1310 Adjust/measure thrust bearing temperature switch GT7329 A x
1320 Adjust/measure thrust bearing temperature switch GT7329 B x
1330 Adjust/measure lube oil temperature switch GT7330 x
1340 Adjust/measure rotor cooling air temperature switch GT7342 x
1350 Adjust/measure gen. warm air DS temperature switch W2151 A x
1360 Adjust/measure gen. cold air DS temperature switch W2151 A x
1370 Adjust/measure gen. warm air NDS temperature switch W2150 B x
1380 Adjust/measure gen. cold air NDS temperature switch W2151 B x
1390 Adjust/measure exciter temperature switch W2244 x
1400 Check/clean hydraulic air safety relay R2284 x
------
STEP ACTIVITY MCV LUMP SUM
---- -------- --- ------
1410 Check/clean fine dryer, Rifox TG5501, R5781 x
1420 Check/clean air filter Wilkerson 1137-CZM85744 x
1430 Clean/tighten terminals in TR76 temperature regulation panel x
1440 Check alarm and trip GT inlet temperature protection of TR76 temperature x
regulation
1450 Check alarm and trip GT outlet temperature protection of TR76 temperature x
regulator
1460 Check electrical over-speed trip protection of TR76 temperature regulation x
1470 Check speed signal of TR76 temperature regulation to static starting device x
1480 Check vibration measurement of TR76 temperature regulation x
1500 Check electronic cards of secontic system x
1510 Check stimulation of secontic orders x
1520 Check terminals in secontic panel x
1530 Check operating device R1205 x
1540 Check pulsator R1207 x
1550 Check starting valve R1269 x
1560 Check temperature controller R65, R1284 x
1570 Check fuel oil control valve R1382 x
1580 Check over-speed governor R2201 x
1590 Check emergency trip R2213 x
1610 Check blow off valves R1392-93 x
1620 Check pilot valve for blow off valves R1184 x
1640 Check air pressure reducing valve R5698 x
1650 Check speed pick-up R1213 x
OIL SYSTEM
1660 Check oil system pipeline for leaks x
1670 Clean twin lube oil filter elements GT4029 x
1680 Clean twin power oil filter elements GT4110 x
------
STEP ACTIVITY MCV LUMP SUM
---- -------- --- ------
1700 Check lube oil for contamination x
1710 Check/clean suction air filter for lube oil tank ventilation GT4005A/B/C x
1840 Lubricate auxiliary power oil pump and drive motor R5715 x
1860 Lubricate cooling oil pump and drive motor R5717 x
1870 Lubricate jacking oil pump and drive motor GT4008/4009 x
1880 Lubricate shaft turning hydraulic pump and motor GT1605/1606 x
1890 Lubricate oil tank venting fan and motor GT 4002/4003 x
2030 Recalibrate bearing vibration recorder x
2040 Recalibrate turbine temperature/load recorder x
2080 Check 125V and 24V battery chargers x
2110 Check/adjust auxiliary switch contacts and linkage mechanism (209A1) x
2120 Check/adjust auxiliary switch contacts and linkage mechanism (4A2) x
2150 Check oil level in expansion vessel of main step-up transformer x
2160 Check Drycol Breather of main step-up transformer x
2170 Clean/inspect bushing of main step-up transformer x
2180 Inspect/retighten gaskets on main step-up transformer x
2190 Check valve and earth connection on main step-up transformer x
2200 Sample dielectric strength of main step-up transformers x
2210 Clean air side of cooling radiators of main step-up transformers x
2220 Test alarm and trip signals on main step-up transformer x
2230 Check oil level in expansion vessel of aux. and starting transformer x
2240 Check silicagel of auxiliary and starting transformers x
2250 Clean/inspect bushings on auxiliary and starting transformers x
2260 Inspect/retighten gaskets on auxiliary and starting transformers x
2270 Check earth connection on auxiliary and starting transformers x
2280 Test dielectric strength of aux. and starting transformers x
2290 Clean air side of cooling radiators aux. and starting transformers x
------
STEP ACTIVITY MCV LUMP SUM
---- -------- --- ------
2300 Test alarm and trip signals on aux. and starting transformers x
2310 Test static starting system as per HIER 93 132 E x
2320 Check machine hall ventilation x
2340 Test fire fighting system I&C Air Leakage
Portion of Enclosure
2350 Check/clean contactors and aux. contacts x
2360 Check/clean auxiliary relays and contacts x
2380 Clean panels in local control room x
2390 Terminals in local control panels x
2400 Clean remote control panels x
2410 Clean terminals in remote control panels x
2420 Clean turbine hall terminal boxes x
2440 Clean/tighten 480 vac bus bar bolts and nuts x x
TECH. DIR.
2450 Check 480 vac breaker's contacts and breaker mechanism x x
TECH. DIR.
2460 Check annunciation circuits on panel alarm x
2470 Check tripping circuits x
2490 Measure insulation of auxiliary lube oil pump drive motor (R5711) x
2500 Measure insulation of auxiliary power oil pump drive motor (R5272) x
2540 Check brushes on jacking oil pump DC-Motor (GT4009) x
2550 Check emergency oil pump x
2570 Check brushes on speed device drive DC-Motor (R1205) x
2580 Check brushes on shaft turning gear pump drive DC-Motor (GT1606) x
2600 Check/compare generator protection relay settings x
2610 Check/compare generator protection diodes according to matrix x
2620 Test generator protection relay's function x
2630 Check generator protection blocking print x
2640 Check fuse of minimum frequency relay 103B x
------
STEP ACTIVITY MCV LUMP SUM
---- -------- --- ------
2650 Test generator differential protection relay DIX111 x
2660 Test transformer differential protection relay DIX111 x
2670 Test overcurrent protection relay IUX159 x
2680 Test negative phase sequence x
2690 Test overvoltage protection relay USX115 x
2700 Test under voltage protection relay USX116 x
2710 Test stator earth fault protection relay UBX117 x
2720 Test bus bar earth fault protection relay UBX117 x
DUCTING AND ACCESSORIES
2730 Check air inlet area before air filters x
2740 Check air filter elements x
2750 Check air inlet filter system compressor x
2760 Check air inlet filter control system x
2770 Check air intake duct and silencer hood x
2780 Check exhaust gas diffuser x
2790 Check exhaust gas thermocouples x
2800 Check exhaust gas line x
2830 Check expansion joints x
GENERATOR PROGRAM***
2870 Remove endshields covers exciter unit, bearing caps + rotor x*
2880 Inspect/test stator condition and diagnosis x
2890 Check/measure rotor condition and insulation x
2910 Remove/clean H2O side/test air water cooler leakage x
2920 Re-fit new sealing for air-water coolers after cleaning x
2930 Check air filters x
2940 Inspect exciter components x
- -------------------
*** Partial Discharge monitoring by Alstom may be maintained by MCV
* Exciter removal, rotor removal, retaining ring removal and NDE at GEII
discretion
------
STEP ACTIVITY MCV LUMP SUM
---- -------- --- ------
2950 Check instrumentation x
2960 Inspect bearings x
2970 Inspect rotor bearing caps, exciter unit, covers A, Shields, A. Coupl. bolts x***
2980 Check crack detection of rotor retaining rings x*
COMMISSIONING
3020 Inspect/remove foreign or loose objects in the air intake system x
3030 Inspect combustion chamber without burner fitted x
3040 Run machine with starting equipment only (3 step) [Blowout] x
3050 Reinspect combustion chamber without burner x
3060 Function test ignition gas system x
3070 Re-assemble burner x
3090 Check characteristics of servomotor x
3110 Start-up machine from cold x
3120 After 2 hours without load, stop with real over-speed trip (R1205) x
3130 Measure hot start-up time x
3140 Test over-voltage protection USX115 at full speed x
3150 Test under-voltage protection USX116 at full speed x
3160 Test stator earth fault protection UBX117 (6R) at full speed x
3170 Test bus bar earth fault protection UBX117 (3L) at full speed x
3180 Test under-frequency protection FCX103B at full speed (trip of unit) x
3190 Check/adjust synchronizing equipment x
3200 Check/adjust hydraulic system at full speed x
3220 Test/record normal and fast loadings x
3230 Test rotor earth fault protection IWX161A, on-load x
3240 Check/measure generator differential protection DIX111 x
3250 Check/measure transformer differential protection x
------
STEP ACTIVITY MCV LUMP SUM
---- -------- --- ------
3260 Check reverse power protection x
3270 Check/measure minimal reactants protection ZPX103/5 x
3280 Check/measure negative phase sequence protection IPX 132-B x
3290 Measure/adjust full load readings and observations x
3300 Record operational data and inspection findings x
3310 Balance unit, end planes only. x
x x
WEIGHT
3320 Balance unit, mid-plane INSTALLATION
ONLY
EXHIBIT 3
SPARE PARTS LISTS
MCV HAS THE FOLLOWING PARTS AND SHALL ALLOW USE OF PARTS BY GEII FOR THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT:
Two hot gas casings
One Combustion inner liner
One set Swirlers
One burner for standard(non-EV) silo
One set finned segments
One expansion joint
GE WILL PROVIDE THE FOLLOWING AS INITIAL SPARE PARTS UNDER THE TERMS DESCRIBED
BY ARTICLE 6.5 THE QUANTITIES LISTED MAY BE CHANGED AT MCV'S OPTION PRIOR TO
COMMENCEMENT IF REQUIRED ACCORDING TO THE TERMS OF ARTICLE 5.1.1:
2 sets each Rows 1-5 blades
2 sets each Rows 1-5 vanes
2 sets each Rows A-F stator and A-L rotor heat shields
Blade and vane installation hardware
THE TABLE BELOW DESCRIBES THE PARTS REQUIRED TO BE KEPT IN INVENTORY PER ARTICLE
2.7.
MANDATORY SPARE PARTS
ITEM QTY. DESCRIPTION
---- ---- -----------
P100 One Set Turbine Blades 1
P200 One Set Turbine Blades Row 2
P300 One Set Turbine Blades Row 3
P400 One Set Turbine Blades Row 4
P500 One Set Turbine Blades Row 5
P600 One Set Turbine Vanes Row 1
P700 One Set Turbine Vanes Row 2
P800 One Set Turbine Vanes Row 3
P900 One Set Turbine Vanes Row 4
P1000 One Set Turbine Vanes Row 5
P1800 One Set Combustor Inner Chamber with Mechanical Seal
P1900 One Set Finned Segments
P2000 One Standard Combustor Burner Spares
P2300 One Set Heat Shield Segments, Row A-L for Rotor
P2400 One Set Heat Shield Segments, Row A-F for Vane Carrier
P2500 One Set Heat Shield Segments, Inlet
P2600 One Set Heat Shield Segments with Nozzle for Compressor, Diffusor
ITEM QTY. DESCRIPTION
---- ---- -----------
P2700 One Set Heat Shield Segments for Compressor Diffusor
EXHIBIT 4
WATER SPECIFICATION
NOT USED
EXHIBIT 5
DE-NOX STEAM SPECIFICATION
Main Steam Limits *
Items Limit Unit
----- ----- ----
Conductivity, Max 1 U-MHO
Chloride, Max 6 PPB
Sodium, Max 10 PPB
Sulfate, Max 100 PPB
Silicate, Max 20 PPB
*Steady state operating parameters, Doesn't include start-up transients or
carryover due to mechanical failures.
EXHIBIT 6
FUEL SPECIFICATION
1.0 Heat Content
Heat content shall mean the gross heating value per cubic foot of gas
delivered at the point of receipt and point of delivery. The gas at the
point of receipt shall not have a heat content less than 950 Btu/scf or
greater than 1,100 Btu /scf when determined on a saturated basis. The
total heating value per cubic foot of gas at the points of receipt or
delivery shall be determined by one of the following methods:
a. By means of an instrument of standard manufacture installed to
measure the heating value of the gas being delivered at the points
of receipt or delivery.
b. At intervals of not more than six (6) months, by means of an
instrument of standard manufacture and a sample of gas from the
gas stream from which gas is being delivered
c. Other methods mutually agreed upon by both Parties
For the purposes of calculating receipts and deliveries, the heat
content of the gas so determined at each such point shall be deemed to
remain constant at such point until the next determination.
The unit of quantity for the purpose of determining total heating value
shall be one (1) cubic foot of gas saturated with water vapor at a
temperature of sixty (60) Fahrenheit and an absolute pressure of 14.73
psia saturated.
2.0 Freedom from Objectionable Matter
The gas received and delivered:
(a) Shall be commercially free from dust or other solid or liquid
matter.
(b) Shall not contain more than one (1) grain of hydrogen sulfide per
one hundred (100) cubic feet of gas, as determined by methods
prescribed in Standards of Gas Service, Circular of the National
Bureau of Standards, No. 05, page 134 (1934 edition).
EXHIBIT 7
AIR SPECIFICATION
NOT USED
EXHIBIT 8
ASSUMPTIONS
"Assumptions" shall mean the following operating conditions:
a) Base load operation: At least 6000 hours/year per Covered Unit
b) Overfired Operation: 0 hours per year per gas turbine.
c) Load regulation for any Covered Unit not more than 2.66 MW/minute.
d) Firing Temperature: Gas turbine Covered Unit operated at a firing
temperature at or below 1881 degrees Fahrenheit ("Assumed Firing
Temperature")
e) Steam for NOx and pulsation control at MDEQ and/or OEM specified rates.
f) Natural gas fuel only.
g) Steam: Per the steam specification contained in Exhibit 5
h) Fuel: Natural Gas per the fuel specification contained in Exhibit 6
i) Proper operation and maintenance of filtration system.
j) MCV's performance of its obligations under Article 3.
k) No more than three planned "C" inspections between January and June or
between June and December in any calendar year
l) As of the Effective Date, there shall be no modifications to the
Covered Units including, but not limited to, firing temperature changes
and upgrades not addressed per Sec. 3.5.
"Assumption Violations" means one (1) or more of the Assumptions has been
violated pursuant to the following criteria:
a) Load regulation for any Covered Unit greater than 2.66 MW/minute
b) Overfired Operation in excess of 0 hours per year.
c) Firing Temperature: Operation at a firing temperature above the Assumed
Firing Temperature boundaries.
d) Steam for NOx control above MDEQ specified rates
e) Operation on fuel other than natural gas.
f) Using fuel or steam , which is not in conformance with the relevant
specifications.
g) MCV's material failure to perform its obligations in Article 3.
h) More than three planned "C" inspections between January and June or
between June and December in any calendar year
i) Any modifications to the Covered Units including, but not limited to,
firing temperature changes and upgrades following the Effective Date
not addressed per Article 3.5.
EXHIBIT 9
COVERED PARTS PRICE LIST ( 2002 )
[INFORMATION DELETED]
"OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT."
EXHIBIT 10
MOBILIZATION SERVICES
PHASE I: MOBILIZATION AFTER EFFECTIVE DATE AND BEFORE THE COMMENCEMENT DATE
A. GEII RESPONSIBILITIES
1. Design and manufacture all of the parts covered under this
Agreement called the Covered Parts including all hardware and
consumables.
2. Transport the Covered Parts to the Facility as required to
support the Commencement Date.
3. Supply Initial Spare Parts as requested by MCV.
PHASE II: MOBILIZATION AT COMMENCEMENT DATE
A. GE RESPONSIBILITIES
All costs associated with the mobilization of tools, equipment and
personnel to perform the scope of the Agreement including but not
limited to the following:
1. Provide a Site Manager to coordinate all GEII activities.
2. Hiring of trouble shooting crew for Maintenance and Repair
activities.
3. Cleaning equipment for turbine components
4. Tool cabinets
5. Hand Tools (mechanical and electrical)
6. Safety equipment
7. Crane operator(s)
8. All costs associated with the mobilizing of the site
organization at the Commencement Date.
9. The items supplied under Mobilization will be maintained by
GEII throughout the Agreement.
10. Costs of changing personnel during the Agreement and the
demobilization costs at the end of the Agreement.
11. On-site first aid
12. Cribbing and floor protection
13. Transportation from repair facilities
B. MCV RESPONSIBILITIES
All costs associated the supply of office and warehouse space (to the
extent currently provided) including work and laydown space. Other
tools, equipment and personnel will be provided per the scope of the
Agreement including, but not limited to the following:
1. All fixtures, currently available, for performing turbine
inspections. If fixtures are not available to GEII, a
replacement cost of $100,000 will be required or they can be
replaced at GEII Standard Rates.
2. Welders and welding equipment for in situ welding.
3. Special tools (originally supplied with the turbine-generator)
4. Station air (for air tools)
5. Electric power, fuel, water
6. Insulation blankets , installation, and repair
7. Telephone service
8. Hazardous waste disposal
9. Sanitary facilities
10. Transportation to repair facilities
11. Erected scaffolding, as required
12. Forklifts with operator for materials movement
EXHIBIT 11
FORM OF ASSIGNMENT
FORM OF ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT
This Assignment Agreement (the "Assignment") is made effective as of the ______,
day of __________, _____, by and between _____________________, a corporation
existing under the laws of ____________ with a place of business at
___________________________________________ (herein called "Assignor"), and
___________________________, a corporation existing under the laws of
__________________ with a place of business at_______________________ (herein
called "Assignee").
WHEREAS, Assignor entered in that certain Contractual Service
Agreement, dated ________ (herein called "Agreement") with _____________ (herein
called "MCV") for the supply of certain Parts and Services in connection with
the Covered Unit(s) at the Facility;
WHEREAS, Assignor entered into the Agreement with the desire and full
expectation that work, including without limitation, the supply of material and
equipment from within the country where the Facility is located and services to
be performed by Assignor within such country (the "Country") pursuant to the
Agreement (such work collectively called the "Assigned Scope of Work"), would be
performed by Assignee on its own behalf;
WHEREAS, the Agreement authorizes Assignor to assign to Assignee its rights and
obligations regarding the Assigned Scope of Work; and
WHEREAS, Assignee having received and examined a copy of the Agreement, is
willing to perform the Assigned Scope of Work in accordance with the terms and
conditions set forth in the Agreement.
NOW, THEREFORE, Assignor, in consideration of good and valuable consideration
paid by Assignee, the receipt and sufficiency of which consideration are hereby
acknowledged, does hereby GRANT, CONVEY, ASSIGN and SELL unto Assignee, without
reservation, all of Assignor's right, title and interest under the Agreement
attributable to the Assigned Scope of Work, together with all of Assignor's
right, title and interest in and to consideration to be paid by MCV for the
Assigned Scope of Work and all other benefits or privileges in any way
pertaining thereto.
This Assignment shall be on the following terms and conditions;
1. Definitions
Unless otherwise defined herein, all capitalized terms used in this Assignment
shall have the meanings given to them in the Agreement.
2. Assumption
Assignee hereby assumes all obligations under the Agreement to perform the
Assigned Scope of Work arising after the effective date of this Assignment, and
agrees to perform faithfully such obligations and to be bound by all of the
terms and conditions of the Agreement attributable to the Assigned Scope of Work
as fully and completely as if Assignee had been an original party to the
Agreement.
3. Contract/Payments
Assignor hereby represents that the copy of the Agreement delivered to Assignee
reflects Assignor's entire understanding and agreement with MCV in respect of
the subject matter therein, and further agrees to deliver to Assignee true
copies of all related correspondence to which Assignor was a party prior to the
effective date of this Assignment. Without limitation of the foregoing, Assignor
represents that, pursuant to the Agreement, MCV is obligated to make
[MONTHLY/QUARTERLY] payments for the Assigned Scope of Work calculated as
follows:
(A) Fixed Monthly Fee payment of [$______]
(B) Variable Monthly Fee payment of [$________] per Equivalent Operating Hour
per gas turbine
In addition, pursuant to the Agreement, MCV is obligated to make certain other
payments in connection with the Assigned Scope of Work, including without
limitation payments for Unplanned Extra Work.
4. Indemnification
Assignor agrees to indemnify and hold harmless Assignee from and against any and
all claims made against Assignee arising out of or in any way related to the
failure of Assignor to perform and observe the provisions of the Agreement, to
the extent not required to be performed or observed by Assignee as a result of
this Assignment. Assignee agrees to indemnify and hold harmless Assignor from
and against any and all claims made against Assignor arising out of or any way
related to the failure of Assignee to perform, and observe the provisions of the
Agreement, to the extent required to be performed or observed by Assignee as a
result of this Assignment.
5. Effectuation of Assignment
Assignor and Assignee desire to effectuate this Assignment so as to evidence
Assignor's assignment to Assignee as herein set forth. Assignor and Assignee
agree to take all actions necessary to effectuate this Assignment of record and
to execute, deliver and acknowledge as appropriate all further instruments and
documents to accomplish the same. Without limitation of the foregoing, Assignor
hereby agrees to pay over to Assignee any and all consideration paid by MCV for
the Assigned Scope of Work within three (3) business days of Assignor's receipt
as same from MCV.
6. Successors
This Assignment shall be binding upon and inure to the benefit of Assignor and
Assignee and their respective successors, representatives and assigns.
7. Governing Law
The laws of the State of New York, U.S.A. shall govern the validity,
construction, enforcement, and interpretation of this Assignment.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment,
effective as of the date first above written.
_________________________________ _________________________________
By: _________________________ By: _________________________
Name: ________________________ Name: ________________________
Title: _______________________ Title: _______________________
EXHIBIT 12
NOT USED
EXHIBIT 13
CONSENT AND AGREEMENT
CONSENT AND AGREEMENT, dated as of ____________ ___, 200__, made by
___________________________, a ___________ corporation, (the "undersigned") to
the parties whose names appear on Schedule A attached hereto (the "Transaction
Parties"), provides as follows:
1. Midland Cogeneration Venture Limited Partnership ("MCV"), and the
undersigned entered into the ____________________________________, dated
___________, 200__, as the same may be amended, modified or supplemented from
time to time in accordance with the provisions thereof and of this Consent and
Agreement (the "Contract"). MCV was the owner of an approximately 1370 MW
gas-fired cogeneration facility in Midland, Michigan (the "Facility"). Pursuant
to several separate Participation Agreements, each dated as of June 1, 1990, MCV
sold and leased-back several separate Undivided Interests in the Facility under
several separate Leases each having a basic term of 25 years. The general
structure of the sale and lease-back transactions is described in more detail in
Schedule B attached hereto.
2. The undersigned hereby acknowledges notice of the sale and
lease-back transactions described in Schedule B and receipt of a photocopy of
each Participation Agreement (including Appendix A thereto but excluding other
Appendices, Exhibits and Schedules referenced therein unless specifically
requested). Photocopies of the related Transaction Documents will be made
available by MCV to the undersigned at its request for inspection. The
undersigned further acknowledges and consents to the assignments of and Liens on
the Contract pursuant to the Transaction Documents related to each sale and
lease-back transaction, and hereby agrees with each of the Transaction Parties
(provided, however, that each of the Indenture Trustees will have the rights set
forth herein only until the undersigned receives written notice from such
Indenture Trustee that the related Undivided Interest in the Facility is no
longer subject to the Lien of the Indenture to which such Indenture Trustee is a
party and the Secured Notes issued pursuant to such Indenture have been paid in
full) that:
(a) Each Owner Trustee and each related Indenture Trustee
shall be entitled, after a Lease Event of Default or an Indenture Event of
Default under the Lease or the Indenture, as the case may be, to which such
Person is a party, to exercise any and all rights of MCV under the Contract in
accordance with the terms of the related Lease, the related Lessee Security
Agreement, the related Indentures and this Consent and Agreement, and the
undersigned will comply in all respects with such exercise by any of such
Persons.
(b) The undersigned will give each owner Trustee and Indenture
Trustee prompt written notice of any default of which it has knowledge under the
Contract which, if not cured, would give the undersigned the right to suspend
its performance under, or to terminate, the Contract. Each Owner Trustee and
Indenture Trustee (and their respective designee(s)) shall have the right,
within 30 days (or such longer period, not to exceed 90 days, as may reasonably
be required to cure defaults other than defaults in respect to the nonpayment of
money by MCV) of receipt by each such Person of such written notice, to cure
such default.
(c) In the event any Owner Trustee or Indenture Trustee
succeeds to MCV's rights or interests under the Contract after a Lease Event of
Default or an Indenture Event of Default under the Lease or the Indenture, as
the case may be, to which such Person is a party, whether by foreclosure or
otherwise, such Person shall have the right to exercise all rights of MCV under
such Contract, and the undersigned will comply in all respects with such
exercise by such Person.
(d) The exercise of remedies under any Lease or foreclosure of
any Indenture, whether by judicial proceedings or under power of sale contained
in such Indenture or otherwise or any conveyance from MCV or any Owner Trustee
to either related Indenture Trustee in lieu thereof, following a Lease Event of
Default or Indenture Event of Default under the Lease or the Indenture, as the
case may be, to which such Person is a party, shall not require the further
consent of the undersigned.
3. It is understood and agreed that the Contract and this Consent and
Agreement are subject to all tariffs and all Applicable Laws relating to such
services. Except as required, in the undersigned's reasonable opinion or by any
Applicable Law, the undersigned will not, without the prior written consent of
each Owner Trustee and Indenture Trustee (unless MCV delivers to the undersigned
a certificate stating that such consent is not required by the terms of the
related Transaction Documents), cancel, amend, modify or terminate or accept any
cancellation, amendment, modification or termination thereof, except if such
cancellation or termination is in accordance with the express terms of the
Contract, but subject to the rights of each Owner Trustee and Indenture Trustee
to cure any defaults and to keep the Contract in full force and effect as
provided in Section 2(b) above.
4. In the event that any Owner Trustee or Indenture Trustee (or their
respective designee(s)) assumes the Contract or otherwise elects to perform the
duties of MCV under the Contract, such Person shall not have any personal
liability to the undersigned for the performance of MCV's obligations under the
Contract, it being understood that the sole recourse of the undersigned seeking
enforcement of such obligations shall be to such Person's interest in the
Facility and the related rights and Revenues therefrom.
5. If the Contract is rejected by a trustee or debtor-in-possession in
any bankruptcy, insolvency or similar proceeding involving any Persons other
than the undersigned, or is terminated for any other reason (except as a result
of a default which was not appropriately cured as provided herein and in the
Contract), and if, (i) within 30 days thereafter, MCV (in the case of a
bankruptcy, insolvency or similar proceeding involving any Owner Trustee or
Owner Participant), any Owner Trustee, Indenture Trustee or their respective
successors or assigns so request and (ii) all payment defaults under the
Contract have been cured, the undersigned will execute and deliver to the Person
or Persons making such request in proportion to their respective interests in
the Contract a new Contract for the services remaining to be performed under the
original Contract and containing the same terms and conditions as the original
Contract (except for any requirements which have been fulfilled prior to such
termination). Such new Contract also shall be subject to the terms of this
Consent and Agreement.
6. The undersigned acknowledges that after the end of the respective
Lease Terms and during the respective Residual Terms, each Owner Trustee, as the
assignee of an Undivided Interest in the Contract pursuant to the related
Facility Agreements Assignment, shall have all of the rights and shall be liable
for all of the obligations (to the extent of its respective Undivided Interest
Percentage) on a non-recourse basis of MCV under the Contract. The undersigned
further acknowledges that MCV shall be the initial Operator of the Facility
under the Operating Agreement and further agree that the Owner Trustees may
appoint any Person to serve as a successor Operator thereunder so long as such
Person satisfies the requirements set forth in the Operating Agreement.
7. No termination, amendment or waiver of any provision of this Consent
and Agreement or consent to any departure by the undersigned from any provision
of this Consent and Agreement shall be effective unless the same shall be in
writing and signed by the Owner Trustees, the Indenture Trustees and MCV and
then such waiver or consent shall be effective only in a specified instance for
the specific purpose for which it was given.
8. This Consent and Agreement shall be governed by, and construed in
accordance with, the laws of the State of Michigan, and shall be binding on the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the undersigned by its officers thereunto duly
authorized, have duly executed this Agreement as of the day and year first above
written.
_____________________________
By: James N. Suciu
--------------------------
Title: VP -- Energy Services
----------------------
Seen and Agreed to this 31 day of December, 2002.
-- --------------
MIDLAND COGENERATION VENTURE
LIMITED PARTNERSHIP, as
Lessee
By: James M. Kevra
--------------------------------
Title: President & CEO
------------------------------
SCHEDULE A
MIDLAND COGENERATION VENTURE LIMITED PARTNERSHIP,
as Lessee,
FIRST MIDLAND LIMITED PARTNERSHIP,
IEA-MCV, LLC (formerly, DCC Project Finance One, Inc.),
EDISON CAPITAL (formerly, Mission Funding Epsilon),
VERIZON CAPITAL CORPORATION (formerly, NYNEX Credit Company, and Bell Atlantic
Credit Corporation),
RESOURCES CAPITAL MANAGEMENT CORPORATION,
as the several Owner Participants,
STATE STREET BANK AND TRUST COMPANY
(formerly, Fleet National Bank, Shawmut Bank Connecticut, National Association,
and The Connecticut National Bank),
not in its individual capacity but solely as Owner Trustee
under several separate Trust Agreements,
WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly, First Union National Bank, and Meridian Trust Company),
not in its individual capacity but solely as Subordinated Indenture Trustee
under several separate Subordinated Trust Indenture,
Leasehold Mortgage and Security Agreements
for the benefit of the Subordinated Secured Notes, and
MIDLAND FUNDING CORPORATION II,
as purchasers of the Secured Notes.
SCHEDULE B
A. As described below, the Owner Participants named in
Schedule A acquired separate Undivided Interests in the Facility and leased such
Undivided Interests back to MCV through separate Owner Trustees acting on behalf
of separate Owner Trusts. The beneficial interest in each Owner Trust is held by
Owner Participant.
B. For purposes of this Schedule B and the Consent and
Agreement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in Appendix A to the several separate
Amended and Restated Participation Agreements (the "Participation Agreements"),
each dated as of June 1, 1990, to which MCV, an Owner Participant, the related
Owner Trustee, the related Indenture Trustees, the Funding Corporations, MDC and
the Institutional Senior Bond Purchasers named therein are parties. The rules of
usage set forth in such Appendices also shall apply hereto; provided, that when
the terms defined in Appendix A to a particular Participation Agreement as
relating only to the transaction contemplated therein are used in the plural
herein, such terms are intended to apply to the terms applicable to the
transactions contemplated by all Participation Agreements collectively. In
addition, the word "related", when used with respect to any Person, interest,
instrument, agreement or document, shall denote a Person which is a party to, or
an interest, instrument, agreement or document which is a part of, the
transaction contemplated in a particular Participation Agreement and the
Transaction Documents referred to in such Participation Agreement.
C. Pursuant to a related Participation Agreement, MCV sold and
transferred to each Owner Trustee, and each Owner Trustee acquired, subject to
Dow's Prior Rights and Consumers' Prior Rights, an Undivided Interest in the
Facility equal to the respective Undivided Interest Percentage of such Owner
Trustee (with the Undivided Interests in the Initial Assets having been sold and
transferred on the First Closing Date and the Undivided Interests in the Second
Closing Assets being sold and transferred on the Second Closing Date). Each
Owner Trustee leased its Undivided Interest in the Facility back to the Lessee
pursuant to a related Lease, under which MCV has the use, possession and control
of the Undivided Interest in the Facility for the related Lease Term (with the
Undivided Interests in the Initial Assets having been leased on the First
Closing Date and the Undivided Interests in the Second Closing Assets being so
leased on the Second Closing Date).
D. On the Second Closing Date, (i) MCV assigned to each Owner
Trustee a separate Undivided Interest in the Facility Agreements and the
Cogeneration Agreements pursuant to a related Facility Agreements Assignment and
a related Cogeneration Agreements Assignment, respectively, (ii) each Owner
Trustee assumed the obligations of MCV under the PPA and the SEPA,
to the extent of its respective Undivided Interest Percentage, pursuant to a
related Cogeneration Agreements Assignment, (iii) pursuant to the related Lease,
each Owner Trustee subassigned its Undivided Interests in the Cogeneration
Agreements and Facility Agreements back to MCV for the respective Lease Term,
subject to the Lien of the related Indentures, and MCV, as lessee, accepted such
subassignment, and (iv) MCV granted to each Owner Trustee a Lien on, without
limitation, MCV's right, title and interest in the related Undivided Interests
in the Cogeneration Agreements and the Facility Agreements (and the Revenues
therefrom) as collateral security for the related Secured Obligations pursuant
to a related Lessee Security Agreement.
E. Each Owner Trustee, as provided in the related
Participation Agreement, financed a portion of the Purchase Price for its
Undivided Interest in the Facility with the proceeds of Senior Secured Notes
issued by it to Midland Funding Corporation I pursuant to a related Senior Trust
Indenture and related Subordinated Secured Notes issued by it to Midland Funding
Corporation II pursuant to a related Subordinated Trust Indenture, and Midland
Funding Corporation I and Midland Funding Corporation II purchased such Secured
Notes.
F. Each Owner Trustee granted to the related Indenture
Trustees Liens on, among other things, the Owner Trustee's Undivided Interests
in the Facility, the Cogeneration Agreements and the Facility Agreements, the
Site Interest and its interest in certain of the related Transaction Documents
as collateral security for the Owner Trustee's obligations under the related
Secured Notes.
G. On the Second Closing Date, the Funding Corporations issued
Bonds pursuant to a Senior Collateral Trust Indenture and a Subordinated
Collateral Trust Indenture, respectively, for the purpose of participating in
the payment of the Purchase Price for each Undivided Interest in the Facility
and acquiring the funds necessary to purchase the Senior Secured Notes and the
Subordinated Secured Notes pursuant to a related Participation Agreement. The
Funding Corporations secured their obligations under the Bonds by a pledge to
the related Collateral Trust Trustees of the related Secured Notes (and the
collateral security therefor) held by the Funding Corporations.
H. MCV, each Owner Trustee and Indenture Trustee and the
Working Capital Lender, on the Second Closing Date, entered into an
Intercreditor Agreement with the Collateral Agent providing for the deposit with
and disbursement of all Revenues from the Undivided Interests in the Project by
the Collateral Agent.
I. MCV and each Owner Trustee also entered into an Operating
Agreement appointing MCV as the initial operator of the Project during
the respective Residual Terms, commencing on the Operation Commencement Date (as
such term is defined in the Operating Agreement).
J. On the Second Closing Date, in order to obtain necessary
working capital for the operation of the Facility, MCV obtained the Working
Capital Line from the Working Capital Lender and granted to the Working Capital
Lender first priority Liens on MCV's right, title and interest (as subassignee
of the separate Undivided Interests in the Cogeneration Agreements and the
Facility Agreements during the respective Lease Terms) in and to (i) all Earned
Receivables, (ii) its Natural Gas Inventory and (iii) the Gas Brokering
Contract.
K. Each Owner Trustee has agreed to reassign its Undivided
Interest in the Project (including the Undivided Interest in the Facility
Agreements) and the Site Interest back to MCV at the expiration of the related
Support Term.
L. On July 23, 2002, MCV paid in full the Senior Secured Notes
that were issued pursuant to the Senior Trust Indenture, consequently, the
Senior Indenture Trustee no longer has an Undivided Interest in the Facility
which, in turn, is no longer subject to the Lien of the Senior Trust Indenture.
EXHIBIT 14
GEII STANDARD RATE SHEETS
These rates below are attached as an example of the format of the rate sheet to
be used in the calculation of the cost of Services. Actual costs will be
according to the terms of Article 1.17 and Article 5.4.
GENERAL ELECTRIC INTERNATIONAL INC. (GEII)
INSTALLATION & FIELD SERVICES
EXTERNAL COMMERCIAL RATES
EFFECTIVE JANUARY 1, 2002
Advanced Commitment* Advanced Peak *,** Published Rate Published Peak Rate**
Service Description ST OT ST OT ST OT ST OT
- -------------------
Field Engineering Service $190.00 $285.00 $220.00 $330.00 $210.00 $315.00 $240.00 $360.00
Lead Field Eng. Service $216.00 $324.00 $250.00 $375.00 $242.00 $363.00 $280.00 $420.00
Specialty Field Eng. Service $226.00 $339.00 $260.00 $390.00 $258.00 $387.00 $300.00 $450.00
Site Management Service $262.00 $393.00 $302.00 $453.00
Consulting Analyst Service $262.00 $393.00 $302.00 $453.00
Note 1 *: Advanced Commitment Rates apply for purchase orders received at least
90 days prior to start of service
Note 2**: Peak Rates are for T&M work during peak period (3/1 to 5/31).
INSTALLATION AND MAINTENANCE SERVICES
FIELD ENGINEERING: This service is defined as technical advice and counsel from
field personnel based on good engineering, manufacturing, installation and
operation practices as applicable to the equipment. To the extent specified
during performance of work, such services may also include testing, adjustment,
programming and other similar services. Field Engineering Service does not
include supervision or management of Purchaser's employees, agents, or other
contractors.
LEAD FIELD ENGINEERING: This service includes responsibility for the direction
of the activities of one or more field engineers during the erection, assembly,
check-out, start-up, maintenance, inspection, or repair of equipment and
systems.
SITE MANAGEMENT: This service includes all management responsibilities including
planning, organizing, integrating and monitoring of resources such as labor,
supervisors, tools and technical assistants as required to complete the
workscope.
SPECIALITY SERVICES
GENERATOR: Specialists experienced in the inspection, test and repair of
generator equipment.
LASER ALIGNMENT: Specialists utilizing GE proprietary digital laser alignment
equipment, technology, and GE fleet data, to optimize internal component
alignment and potentially provide significant reductions in outage duration over
conventional alignment methods.
GAS/STEAM PATH AUDIT: Specialists skilled at inspecting and determining the
thermodynamic losses on a stage by stage basis of the turbine steam/gas path.
Results of the inspection give the financial benefits of repairs or replacement
parts that allow an operating plant to make repair/replacement decisions during
the outage.
START-UP/CONTROLS: Specialists skilled at performing start-up and
troubleshooting of gas and steam turbine control systems.
GAS TURBINE DLN: Specialists skilled in the proper methods required for tuning
Dry Low NOx (DLN) systems to optimize reductions in gas turbine emissions and
extension of combustion system components life expectancy.
EXCITATION: Specialists skilled in the start-up and troubleshooting of
excitation systems interfacing circuits, breakers, and power systems.
VIBRATION: Specialists experienced in the areas of vibration data acquisition,
analysis, and having the skills required to perform a diagnostic balance
program, make recommendations and install balance weights.
STATIC STARTER (LCI): Specialists skilled in start-up and troubleshooting of
static start, load commutating inverter (LCI) equipment.
EMERGENT TECHNOLOGY: Specialists skilled in an area involving new technology
that is not specifically covered by the Specialist categories listed above.
CONSULTING ANALYST: Technical assistance of personnel not normally classified as
field personnel for the solution of problems that require highly specialized
background and experience.
DIAGNOSTICS: Specialists skilled in performance of diagnostic tests and
diagnostic data analysis, such as plant evaluations and general consulting for
plant performance issues.
PROFESSIONAL WITNESS: Technical direction and coordination of performance tests
not conducted by GE
NOTES:
2. The normal workweek is five consecutive eight-hour days. Time in excess of
the normal workweek and GEII holidays will be billed at the overtime rate.
2. Travel time will be charged at the applicable hourly rate from the Field
Engineer's point of origin to the job site and return.
3. Travel and Living (T&L) for the Continental U.S.A. will be billed, as
follows, for any portion of a day worked and based on the distance traveled
by the GEII field representative responsible for providing the service,:
40 miles or less: $90.00 per day per employee
Greater than 40 miles: $180.00 per day per employee
Air Travel Cost plus 15% administrative adder
4. T&L for Alaska, Hawaii and international locations, including air travel,
will be billed at cost plus 15% administration fee.
5. Purchased Craft Labor & Materials (PL&M) will be billed at cost plus 15%.
6. Consult with the local GEII office to determine any taxes, fees, or VAT
that may be in addition to the above rates.
7. Consult with local GEII office to determine applicable charges for special
tooling and/or test equipment.
Minimum of 4 hours of billing for all services provided.