ADES » Topics » Article 24. Events of Default; Termination for Cause; Suspension

These excerpts taken from the ADES 10-Q filed Nov 7, 2008.

Article 24. Events of Default; Termination for Cause; Suspension

Seller Events of Default. Each of the following shall constitute an “Event of Default” by Seller:

 

  (i) if Seller becomes insolvent, makes an assignment for the benefit of its creditors, has a receiver or trustee appointed for the benefit of its creditors, or files for protection from creditors under any bankruptcy or insolvency laws; or

 

  (ii) if Seller breaches or fails to comply or perform its material obligations hereunder (except that Seller’s liability for failure to achieve Unit Installation for Units #3 and #4 is as set forth in Article 9, and Seller shall have no liability, other than the express Make Good Obligation efforts described in Article 10, for failing to achieve Substantial Completion or any Performance Guarantee with respect to Unit #4);

 

  (iii) failure by Seller to make prompt payments to its Subcontractors for material or labor except: (a) for such payments as may reasonably be in dispute, and (b) to the extent Purchaser has failed to pay Seller;

 

  (iv) the interest of Seller passes to any person, entity, partnership or corporation other than as permitted under this Contract;

 

  (v) any representation or warranty made by Seller herein is false or misleading in any material respect when made and such misrepresentation has a material adverse effect on the Party to whom such representation and warranty is provided and such error or omission is not corrected within sixty (60) days after receipt of written notice thereof by the other Party;

 

  (vi) Seller fails to pay any amount that Seller is required to pay to Purchaser under this Contract within thirty (30) days after receipt by Seller of written demand from Purchaser unless such amount is in dispute;

 

  (vii) Seller abandons or suspends progress of the Work for five (5) Business Days or more due to any reason other than Force Majeure or as permitted under this Contract; and

 

  (viii) An Event of Default by Seller occurs under any other Multi-Hearth Furnace Contract.

Grounds for Termination by Purchaser. Purchaser shall have the right to terminate this Contract for cause upon the occurrence of a Seller Event of Default; provided, however, that (a) Purchaser shall first have provided Seller with written notice of the nature of such breach in reasonable detail and of Purchaser’s intention to terminate this Contract as a result of such breach, and (b) Seller shall have failed within thirty (30) days after receipt of such notice (ten (10) days for breach of a payment obligation) to commence and diligently pursue the correction of such breach (and not have cured such breach within sixty (60) days after receipt of such notice), except that if a Party wishes to terminate this Contract pursuant to this paragraph, in no event shall such right to terminate be effective until after the Parties have followed the “referral to senior management” process set forth in the first paragraph of Article 28, but in no event shall the Parties be obligated to pursue the other dispute resolution procedures described in Article 28 unless a genuine dispute

 

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exists with respect to such dispute. If Purchaser terminates this Contract pursuant to this Article 24, then Purchaser shall also be entitled to terminate all of the other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder. If Purchaser terminates any of the other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder, then Purchaser shall also be entitled to terminate this Contract pursuant to this Article 24.

Remedy in the Event of Termination by Purchaser. Subject to Article 25, if Purchaser terminates this Contract as provided above, Seller shall be liable to Purchaser for all costs incurred by Purchaser in excess of the amount it would have been obligated to pay to Seller under this Contract to obtain a replacement supplier to perform the uncompleted Work on substantially the same terms and conditions, excepting price.

Suspension by Purchaser. Purchaser may at any time suspend the Work or any portion thereof upon giving written notice to Seller. Seller shall strictly comply with Purchaser’s notice and shall reasonably work to minimize the cost of such suspension. Any part of the Work not suspended shall continue to be diligently prosecuted by Seller. In the event of any such suspension, Seller shall be compensated for its reasonable costs to perform additional work and activities in order to implement such suspension, including demobilization, remobilization, costs of Subcontractor cancellation and/or suspension and reasonable overhead and profit on such costs; provided, however, that Seller shall act commercially reasonably to minimize such costs; and provided, further, that within three (3) Business Days after written notice of such suspension, Seller shall use its reasonable efforts to provide an estimate of such cost computed on a daily basis. Purchaser may, at any time, direct Seller to resume the Work and Seller shall use commercially reasonable efforts to resume all suspended Work as expeditiously as possible. If a question arises as to satisfactory performance by Seller, Purchaser shall have the right to direct Seller to stop Work without cost to Purchaser until a timely inspection thereof has been made and compliance with this Contract has been assured. However, if Seller has been performing reasonably, there shall be an equitable adjustment to the Contract Price, Project Schedule, and/or any other applicable Contract term for any costs incurred by Seller as a result of such stoppage pursuant to a Change Order. Costs incurred by Seller as a result of any suspension shall be paid on a monthly basis.

Purchaser Events of Default. Each of the following shall constitute an “Event of Default” by Purchaser:

 

  (i) if Purchaser becomes insolvent, makes an assignment for the benefit of its creditors, has a receiver or trustee appointed for the benefit of its creditors, or files for protection from creditors under any bankruptcy or insolvency laws;

 

  (ii) if Purchaser breaches or fails to comply or perform its material obligations hereunder;

 

  (iii) the interest of Purchaser passes to any person, entity, partnership or corporation other than as permitted under this Contract;

 

  (iv) any representation or warranty made by Purchaser herein is false or misleading in any material respect when made;

 

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  (v) Purchaser abandons or suspends progress of the Work for sixty (60) days or more due to any reason other than Force Majeure or a default by Seller hereunder;

 

  (vi) Purchaser fails to pay any undisputed amount that Purchaser is required to pay to Seller under this Contract when due; and

 

  (vii) any Event of Default by Purchaser occurs under any other Multi-Hearth Furnace Contract.

Grounds for Termination by Seller. Seller shall have the right to terminate this Contract for cause upon the occurrence of a Purchaser Event of Default; provided, however, that (a) Seller shall first have provided Purchaser with written notice of the nature of such breach in reasonable detail and of Seller’s intention to terminate this Contract as a result of such breach, and (b) Purchaser shall have failed within thirty (30) days after receipt of such notice (ten (10) days for breach of a payment obligation) to commence and diligently pursue the correction of such breach (and not have cured such breach within sixty (60) days after receipt of such notice). Notwithstanding any cure period, Seller shall be entitled to the Late Payment Rate for amounts not paid when due. If Seller terminates this Contract pursuant to this Article 24, then Seller shall also be entitled to terminate all other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder. If Seller terminates any of the Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder, Seller shall also be entitled to terminate this Contract pursuant to this Article. 24.

Remedy in the Event of Termination by Seller. If Seller terminates this Contract as provided above, Purchaser shall pay to Seller the Termination Payments set forth in Article 5 (“Termination for Convenience”). Furthermore, nothing in this Article 24 shall limit Seller’s rights under Article 4.

Article 24. Events of Default; Termination for Cause; Suspension

Seller Events of Default. Each of the following shall constitute an “Event of Default” by Seller:

 

  (i) if Seller becomes insolvent, makes an assignment for the benefit of its creditors, has a receiver or trustee appointed for the benefit of its creditors, or files for protection from creditors under any bankruptcy or insolvency laws; or

 

  (ii) if Seller breaches or fails to comply or perform its material obligations hereunder (except that Seller’s liability for failure to achieve Unit Installation for Units #3 and #4 is as set forth in Article 9, and Seller shall have no liability, other than the express Make Good Obligation efforts described in Article 10, for failing to achieve Substantial Completion or any Performance Guarantee with respect to Unit #3);

 

  (iii) failure by Seller to make prompt payments to its Subcontractors for material or labor except: (a) for such payments as may reasonably be in dispute, and (b) to the extent Purchaser has failed to pay Seller;

 

  (iv) the interest of Seller passes to any person, entity, partnership or corporation other than as permitted under this Contract;

 

  (v) any representation or warranty made by Seller herein is false or misleading in any material respect when made and such misrepresentation has a material adverse effect on the Party to whom such representation and warranty is provided and such error or omission is not corrected within sixty (60) days after receipt of written notice thereof by the other Party;

 

  (vi) Seller fails to pay any amount that Seller is required to pay to Purchaser under this Contract within thirty (30) days after receipt by Seller of written demand from Purchaser unless such amount is in dispute;

 

  (vii) Seller abandons or suspends progress of the Work for five (5) Business Days or more due to any reason other than Force Majeure or as permitted under this Contract; and

 

  (viii) An Event of Default by Seller occurs under any other Multi-Hearth Furnace Contract.

Grounds for Termination by Purchaser. Purchaser shall have the right to terminate this Contract for cause upon the occurrence of a Seller Event of Default; provided, however, that (a) Purchaser shall first have provided Seller with written notice of the nature of such breach in reasonable detail and of Purchaser’s intention to terminate this Contract as a result of such breach, and (b) Seller shall have failed within thirty (30) days after receipt of such notice (ten (10) days for breach of a payment obligation) to commence and diligently pursue the correction of such breach (and not have cured such breach within sixty (60) days after receipt of such notice), except that if a Party wishes to terminate this Contract pursuant to this paragraph, in no event shall such right to terminate be effective until after the Parties have followed the “referral to senior management” process set forth in the first paragraph of Article 28, but in no event shall the Parties be obligated to pursue the other dispute resolution procedures described in Article 28 unless a genuine dispute

 

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exists with respect to such dispute. If Purchaser terminates this Contract pursuant to this Article 24, then Purchaser shall also be entitled to terminate all of the other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder. If Purchaser terminates any of the other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder, then Purchaser shall also be entitled to terminate this Contract pursuant to this Article 24.

Remedy in the Event of Termination by Purchaser. Subject to Article 25, if Purchaser terminates this Contract as provided above, Seller shall be liable to Purchaser for all costs incurred by Purchaser in excess of the amount it would have been obligated to pay to Seller under this Contract to obtain a replacement supplier to perform the uncompleted Work on substantially the same terms and conditions, excepting price.

Suspension by Purchaser. Purchaser may at any time suspend the Work or any portion thereof upon giving written notice to Seller. Seller shall strictly comply with Purchaser’s notice and shall reasonably work to minimize the cost of such suspension. Any part of the Work not suspended shall continue to be diligently prosecuted by Seller. In the event of any such suspension, Seller shall be compensated for its reasonable costs to perform additional work and activities in order to implement such suspension, including demobilization, remobilization, costs of Subcontractor cancellation and/or suspension and reasonable overhead and profit on such costs; provided, however, that Seller shall act commercially reasonably to minimize such costs; and provided, further, that within three (3) Business Days after written notice of such suspension, Seller shall use its reasonable efforts to provide an estimate of such cost computed on a daily basis. Purchaser may, at any time, direct Seller to resume the Work and Seller shall use commercially reasonable efforts to resume all suspended Work as expeditiously as possible. If a question arises as to satisfactory performance by Seller, Purchaser shall have the right to direct Seller to stop Work without cost to Purchaser until a timely inspection thereof has been made and compliance with this Contract has been assured. However, if Seller has been performing reasonably, there shall be an equitable adjustment to the Contract Price, Project Schedule, and/or any other applicable Contract term for any costs incurred by Seller as a result of such stoppage pursuant to a Change Order. Costs incurred by Seller as a result of any suspension shall be paid on a monthly basis.

Purchaser Events of Default. Each of the following shall constitute an “Event of Default” by Purchaser:

 

  (i) if Purchaser becomes insolvent, makes an assignment for the benefit of its creditors, has a receiver or trustee appointed for the benefit of its creditors, or files for protection from creditors under any bankruptcy or insolvency laws;

 

  (ii) if Purchaser breaches or fails to comply or perform its material obligations hereunder;

 

  (iii) the interest of Purchaser passes to any person, entity, partnership or corporation other than as permitted under this Contract;

 

  (iv) any representation or warranty made by Purchaser herein is false or misleading in any material respect when made;

 

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  (v) Purchaser abandons or suspends progress of the Work for sixty (60) days or more due to any reason other than Force Majeure or a default by Seller hereunder;

 

  (vi) Purchaser fails to pay any undisputed amount that Purchaser is required to pay to Seller under this Contract when due; and

 

  (vii) any Event of Default by Purchaser occurs under any other Multi-Hearth Furnace Contract.

Grounds for Termination by Seller. Seller shall have the right to terminate this Contract for cause upon the occurrence of a Purchaser Event of Default; provided, however, that (a) Seller shall first have provided Purchaser with written notice of the nature of such breach in reasonable detail and of Seller’s intention to terminate this Contract as a result of such breach, and (b) Purchaser shall have failed within thirty (30) days after receipt of such notice (ten (10) days for breach of a payment obligation) to commence and diligently pursue the correction of such breach (and not have cured such breach within sixty (60) days after receipt of such notice). Notwithstanding any cure period, Seller shall be entitled to the Late Payment Rate for amounts not paid when due. If Seller terminates this Contract pursuant to this Article 24, then Seller shall also be entitled to terminate all other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder. If Seller terminates any of the Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder, Seller shall also be entitled to terminate this Contract pursuant to this Article. 24.

Remedy in the Event of Termination by Seller. If Seller terminates this Contract as provided above, Purchaser shall pay to Seller the Termination Payments set forth in Article 5 (“Termination for Convenience”). Furthermore, nothing in this Article 24 shall limit Seller’s rights under Article 4.

Article 24. Events of Default; Termination for Cause; Suspension

Seller Events of Default. Each of the following shall constitute an “Event of Default” by Seller:

 

  (i) if Seller becomes insolvent, makes an assignment for the benefit of its creditors, has a receiver or trustee appointed for the benefit of its creditors, or files for protection from creditors under any bankruptcy or insolvency laws; or

 

  (ii) if Seller breaches or fails to comply or perform its material obligations hereunder (except that Seller’s liability for failure to achieve Unit Installation for Units #1 and #2 is as set forth in Article 9, and Seller shall have no liability, other than the express Make Good Obligation efforts described in Article 10, for failing to achieve Substantial Completion or any Performance Guarantee with respect to Unit #1);

 

  (iii) failure by Seller to make prompt payments to its Subcontractors for material or labor except: (a) for such payments as may reasonably be in dispute, and (b) to the extent Purchaser has failed to pay Seller;

 

  (iv) the interest of Seller passes to any person, entity, partnership or corporation other than as permitted under this Contract;

 

  (v) any representation or warranty made by Seller herein is false or misleading in any material respect when made and such misrepresentation has a material adverse effect on the Party to whom such representation and warranty is provided and such error or omission is not corrected within sixty (60) days after receipt of written notice thereof by the other Party;

 

  (vi) Seller fails to pay any amount that Seller is required to pay to Purchaser under this Contract within thirty (30) days after receipt by Seller of written demand from Purchaser unless such amount is in dispute;

 

  (vii) Seller abandons or suspends progress of the Work for five (5) Business Days or more due to any reason other than Force Majeure or as permitted under this Contract; and

 

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  (viii) An Event of Default by Seller occurs under any other Multi-Hearth Furnace Contract.

Grounds for Termination by Purchaser. Purchaser shall have the right to terminate this Contract for cause upon the occurrence of a Seller Event of Default; provided, however, that (a) Purchaser shall first have provided Seller with written notice of the nature of such breach in reasonable detail and of Purchaser’s intention to terminate this Contract as a result of such breach, and (b) Seller shall have failed within thirty (30) days after receipt of such notice (ten (10) days for breach of a payment obligation) to commence and diligently pursue the correction of such breach (and not have cured such breach within sixty (60) days after receipt of such notice), except that if a Party wishes to terminate this Contract pursuant to this paragraph, in no event shall such right to terminate be effective until after the Parties have followed the “referral to senior management” process set forth in the first paragraph of Article 28, but in no event shall the Parties be obligated to pursue the other dispute resolution procedures described in Article 28 unless a genuine dispute exists with respect to such dispute. If Purchaser terminates this Contract pursuant to this Article 24, then Purchaser shall also be entitled to terminate all of the other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder. If Purchaser terminates any of the other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder, then Purchaser shall also be entitled to terminate this Contract pursuant to this Article 24.

Remedy in the Event of Termination by Purchaser. Subject to Article 25, if Purchaser terminates this Contract as provided above, Seller shall be liable to Purchaser for all costs incurred by Purchaser in excess of the amount it would have been obligated to pay to Seller under this Contract to obtain a replacement supplier to perform the uncompleted Work on substantially the same terms and conditions, excepting price.

Suspension by Purchaser. Purchaser may at any time suspend the Work or any portion thereof upon giving written notice to Seller. Seller shall strictly comply with Purchaser’s notice and shall reasonably work to minimize the cost of such suspension. Any part of the Work not suspended shall continue to be diligently prosecuted by Seller. In the event of any such suspension, Seller shall be compensated for its reasonable costs to perform additional work and activities in order to implement such suspension, including demobilization, remobilization, costs of Subcontractor cancellation and/or suspension and reasonable overhead and profit on such costs; provided, however, that Seller shall act commercially reasonably to minimize such costs; and provided, further, that within three (3) Business Days after written notice of such suspension, Seller shall use its reasonable efforts to provide an estimate of such cost computed on a daily basis. Purchaser may, at any time, direct Seller to resume the Work and Seller shall use commercially reasonable efforts to resume all suspended Work as expeditiously as possible. If a question arises as to satisfactory performance by Seller, Purchaser shall have the right to direct Seller to stop Work without cost to Purchaser until a timely inspection thereof has been made and compliance with this Contract has been assured. However, if Seller has been performing reasonably, there shall be an equitable adjustment to the Contract Price, Project Schedule, and/or any other applicable Contract term for any costs incurred by Seller as a result of such stoppage pursuant to a Change Order. Costs incurred by Seller as a result of any suspension shall be paid on a monthly basis.

Purchaser Events of Default. Each of the following shall constitute an “Event of Default” by Purchaser:

 

  (i) if Purchaser becomes insolvent, makes an assignment for the benefit of its creditors, has a receiver or trustee appointed for the benefit of its creditors, or files for protection from creditors under any bankruptcy or insolvency laws;

 

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  (ii) if Purchaser breaches or fails to comply or perform its material obligations hereunder;

 

  (iii) the interest of Purchaser passes to any person, entity, partnership or corporation other than as permitted under this Contract;

 

  (iv) any representation or warranty made by Purchaser herein is false or misleading in any material respect when made;

 

  (v) Purchaser abandons or suspends progress of the Work for sixty (60) days or more due to any reason other than Force Majeure or a default by Seller hereunder;

 

  (vi) Purchaser fails to pay any undisputed amount that Purchaser is required to pay to Seller under this Contract when due; and

 

  (vii) any Event of Default by Purchaser occurs under any other Multi-Hearth Furnace Contract.

Grounds for Termination by Seller. Seller shall have the right to terminate this Contract for cause upon the occurrence of a Purchaser Event of Default; provided, however, that (a) Seller shall first have provided Purchaser with written notice of the nature of such breach in reasonable detail and of Seller’s intention to terminate this Contract as a result of such breach, and (b) Purchaser shall have failed within thirty (30) days after receipt of such notice (ten (10) days for breach of a payment obligation) to commence and diligently pursue the correction of such breach (and not have cured such breach within sixty (60) days after receipt of such notice). Notwithstanding any cure period, Seller shall be entitled to the Late Payment Rate for amounts not paid when due. If Seller terminates this Contract pursuant to this Article 24, then Seller shall also be entitled to terminate all other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder. If Seller terminates any of the Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder, Seller shall also be entitled to terminate this Contract pursuant to this Article. 24.

Remedy in the Event of Termination by Seller. If Seller terminates this Contract as provided above, Purchaser shall pay to Seller the Termination Payments set forth in Article 5 (“Termination for Convenience”). Furthermore, nothing in this Article 24 shall limit Seller’s rights under Article 4.

Article 24. Events of Default; Termination for Cause; Suspension

Seller Events of Default. Each of the following shall constitute an “Event of Default” by Seller:

 

  (i) if Seller becomes insolvent, makes an assignment for the benefit of its creditors, has a receiver or trustee appointed for the benefit of its creditors, or files for protection from creditors under any bankruptcy or insolvency laws; or

 

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  (ii) if Seller breaches or fails to comply or perform its material obligations hereunder (except that Seller’s liability for failure to achieve Unit Installation for Units #1 and #2 is as set forth in Article 9, and Seller shall have no liability, other than the express Make Good Obligation efforts described in Article 10, for failing to achieve Substantial Completion or any Performance Guarantee with respect to Unit #2);

 

  (iii) failure by Seller to make prompt payments to its Subcontractors for material or labor except: (a) for such payments as may reasonably be in dispute, and (b) to the extent Purchaser has failed to pay Seller;

 

  (iv) the interest of Seller passes to any person, entity, partnership or corporation other than as permitted under this Contract;

 

  (v) any representation or warranty made by Seller herein is false or misleading in any material respect when made and such misrepresentation has a material adverse effect on the Party to whom such representation and warranty is provided and such error or omission is not corrected within sixty (60) days after receipt of written notice thereof by the other Party;

 

  (vi) Seller fails to pay any amount that Seller is required to pay to Purchaser under this Contract within thirty (30) days after receipt by Seller of written demand from Purchaser unless such amount is in dispute;

 

  (vii) Seller abandons or suspends progress of the Work for five (5) Business Days or more due to any reason other than Force Majeure or as permitted under this Contract; and

 

  (viii) An Event of Default by Seller occurs under any other Multi-Hearth Furnace Contract.

Grounds for Termination by Purchaser. Purchaser shall have the right to terminate this Contract for cause upon the occurrence of a Seller Event of Default; provided, however, that (a) Purchaser shall first have provided Seller with written notice of the nature of such breach in reasonable detail and of Purchaser’s intention to terminate this Contract as a result of such breach, and (b) Seller shall have failed within thirty (30) days after receipt of such notice (ten (10) days for breach of a payment obligation) to commence and diligently pursue the correction of such breach (and not have cured such breach within sixty (60) days after receipt of such notice), except that if a Party wishes to terminate this Contract pursuant to this paragraph, in no event shall such right to terminate be effective until after the Parties have followed the “referral to senior management” process set forth in the first paragraph of Article 28, but in no event shall the Parties be obligated to pursue the other dispute resolution procedures described in Article 28 unless a genuine dispute exists with respect to such dispute. If Purchaser terminates this Contract pursuant to this Article 24, then Purchaser shall also be entitled to terminate all of the other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder. If Purchaser terminates any of the other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder, then Purchaser shall also be entitled to terminate this Contract pursuant to this Article 24.

Remedy in the Event of Termination by Purchaser. Subject to Article 25, if Purchaser terminates this Contract as provided above, Seller shall be liable to Purchaser for all costs incurred by Purchaser in excess of the amount it would have been obligated to pay to Seller under this Contract to obtain a replacement supplier to perform the uncompleted Work on substantially the same terms and conditions, excepting price.

 

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Suspension by Purchaser. Purchaser may at any time suspend the Work or any portion thereof upon giving written notice to Seller. Seller shall strictly comply with Purchaser’s notice and shall reasonably work to minimize the cost of such suspension. Any part of the Work not suspended shall continue to be diligently prosecuted by Seller. In the event of any such suspension, Seller shall be compensated for its reasonable costs to perform additional work and activities in order to implement such suspension, including demobilization, remobilization, costs of Subcontractor cancellation and/or suspension and reasonable overhead and profit on such costs; provided, however, that Seller shall act commercially reasonably to minimize such costs; and provided, further, that within three (3) Business Days after written notice of such suspension, Seller shall use its reasonable efforts to provide an estimate of such cost computed on a daily basis. Purchaser may, at any time, direct Seller to resume the Work and Seller shall use commercially reasonable efforts to resume all suspended Work as expeditiously as possible. If a question arises as to satisfactory performance by Seller, Purchaser shall have the right to direct Seller to stop Work without cost to Purchaser until a timely inspection thereof has been made and compliance with this Contract has been assured. However, if Seller has been performing reasonably, there shall be an equitable adjustment to the Contract Price, Project Schedule, and/or any other applicable Contract term for any costs incurred by Seller as a result of such stoppage pursuant to a Change Order. Costs incurred by Seller as a result of any suspension shall be paid on a monthly basis.

Purchaser Events of Default. Each of the following shall constitute an “Event of Default” by Purchaser:

 

  (i) if Purchaser becomes insolvent, makes an assignment for the benefit of its creditors, has a receiver or trustee appointed for the benefit of its creditors, or files for protection from creditors under any bankruptcy or insolvency laws;

 

  (ii) if Purchaser breaches or fails to comply or perform its material obligations hereunder;

 

  (iii) the interest of Purchaser passes to any person, entity, partnership or corporation other than as permitted under this Contract;

 

  (iv) any representation or warranty made by Purchaser herein is false or misleading in any material respect when made;

 

  (v) Purchaser abandons or suspends progress of the Work for sixty (60) days or more due to any reason other than Force Majeure or a default by Seller hereunder;

 

  (vi) Purchaser fails to pay any undisputed amount that Purchaser is required to pay to Seller under this Contract when due; and

 

  (vii) any Event of Default by Purchaser occurs under any other Multi-Hearth Furnace Contract.

Grounds for Termination by Seller. Seller shall have the right to terminate this Contract for cause upon the occurrence of a Purchaser Event of Default; provided, however, that (a) Seller shall first have provided Purchaser with written notice of the nature of such breach in reasonable detail and of Seller’s intention to terminate this Contract as a result of such breach, and (b) Purchaser shall have failed within thirty (30) days after receipt of such notice (ten (10) days for breach of a payment obligation) to commence and diligently pursue the correction of such breach (and not have cured such breach within sixty (60) days after receipt of such notice).

 

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Notwithstanding any cure period, Seller shall be entitled to the Late Payment Rate for amounts not paid when due. If Seller terminates this Contract pursuant to this Article 24, then Seller shall also be entitled to terminate all other Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder. If Seller terminates any of the Multi-Hearth Furnace Contracts pursuant to Article 24 thereunder, Seller shall also be entitled to terminate this Contract pursuant to this Article. 24.

Remedy in the Event of Termination by Seller. If Seller terminates this Contract as provided above, Purchaser shall pay to Seller the Termination Payments set forth in Article 5 (“Termination for Convenience”). Furthermore, nothing in this Article 24 shall limit Seller’s rights under Article 4.

EXCERPTS ON THIS PAGE:

10-Q (4 sections)
Nov 7, 2008
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