Agreement for Operation and Maintenance

CONSIDERING that the Port San Luis Port District (“District") and Michael Cohen (“Operator") are parties to an operations and maintenance agreement dated February 1, 2017 for the operation of the ice facility, which expires on January 31, 2018; `(1) Does the Agreement provide that the Authority may terminate the Agreement in the event of the events listed in Annex 4? (2) Does the Operator have the right to terminate the contract for any reason, in addition to: (1) A contract often contains guarantees for each of the parties – these are statements that they are validly constituted, have the rights and powers to conclude the contracts, have not given rise to a substantive dispute, etc. (2) If the authority guarantees the information provided to the operator, then this is explained here. (3) Guarantees are given at a given time – and may be repeated at certain times – but it should be clarified whether the guarantees are given at the time of signing the contract – whether they are repeated on the date of entry into force of the contract – and whether they must be repeated at another time. If there is no indication as to the date on which the guarantees will be given, they may be deemed to have been given at the time of the conclusion of the contract by the parties. (4) The parties should consider what should happen if circumstances change that would render the warranty defective – should the party that gave the warranty be obliged to inform the other party of the change? (5) Guarantees should not be confused with commitments – the obligations of a party are to do or refrain from doing anything. For example, the authority may undertake not to enter into similar agreements with a third party in the field of service – these obligations apply during the term of the contract and, unlike guarantees, are not granted at any time. Confirmation that changes to the underlying agreement do not release the guarantor from any liability? 9) (In the case of a loan), are the guarantees and debt instruments transferable to lenders and third parties designated by the lenders? Second, lenders require a clear division and delineation of all obligations and responsibilities for the operation and maintenance of the plant between the parties, so that there are no gaps when ongoing risks or obligations remain with the project company. In the case of project financing, project lenders generally require some form of support from the proponent if the proponent retains significant risk or responsibility for the operation and maintenance of the facility. The description of the operator`s tasks is often complex and requires significant project management and technical expertise. A simpler approach is to describe the operator`s requirements in general and link them to the performance outcomes required by the agreement and include everything necessary and ancillary to that delivery. (a) Responsibility for local taxes and in particular for changes in local taxes; (b) responsibility for obtaining licences/authorisations; (c) Amendment of the law (the operator should possibly be obliged to take into account all laws known to enter into force or which are communicated to the operator before the conclusion of the contract)? The O&M agreement should include provisions that set out in as much detail as possible the consequences of the operator`s failure to fulfil its performance obligations, including lump sum damages or other financial damages. In most cases, operations and maintenance contracts set minimum performance levels below which the operator is deemed to have defaulted under the agreement, as well as the options and remedies available to the owner.

Lump sum damages are financial compensation for loss, damage or breach by a party to an agreement granted by a contractual provision relating to the breach of the agreement. Contracts or agreements that involve the exchange of money or the promise of performance, such as .B. O&M agreements, often contain a provision for lump sum damages. The purpose of a lump-sum damages provision is to determine a predetermined amount to be paid if a party fails to perform the agreed performance. A lump sum compensation may only be provided for in a contract if (1) the damage is uncertain or difficult to quantify; (2) the amount is reasonable and takes into account the actual or foreseeable damage caused by the breach, the difficulty of proving the actual damage and the difficulty of finding another reasonable remedy; and (3) the damages are structured in such a way that they act as damage and not as punishment. If these criteria are not met, a lump sum damages clause is void. This risk is minimal and can be shared among project participants prior to the start of the project. Conversely, cases of force majeure during the operation phase could lead to an insolvent operator. In this case, the operator may not be able to fulfil its obligations in accordance with the performance standards of the contract. The agreement should impose on the party affected by the force majeure event the obligation to take all possible measures to overcome the event, including the appropriate use of funds.

However, the non-performance of contractual obligations due to the event generally prevents such a party from defaulting. 1. The parties shall consider whether they authorise the assignment of the contract in whole or in part to a third party and, where permitted, whether they impose conditions on the position of the assignee and the place of registration of the assignee. 2. Is the agreement freely transferable by the authority? If not, is it at least transferable as collateral to the lenders concerned? (3) Is the assignment of the contract by the operator subject to the consent of the authority? (1) Are all the functions of the authority under the control of the authority? (See Appendix 3 for a list of what such obligations might entail.) (2) What does the agreement provide for with regard to the following matters: (1) Care shall be provided in such a way that appropriate levels and types of insurance are concluded. Due diligence must be done to determine what insurance is available in the host country. (2) Does the agreement provide for the operator to take out insurance that includes the authority and creditors as co-insured? 3. Does the agreement provide for a waiver of subrogation vis-à-vis the authority and creditors? (4) Are the limits of insurance and the limits of deductibles appropriate? 5. Does the agreement require the operator to comply with the terms and conditions of all insurance policies? (6) Does the agreement contain provisions allowing the Authority to continuously review the operator`s insurance, obtain proof of payment of premiums, approve the identity of insurers and insurance conditions and take out insurance at the operator`s expense if the operator fails to meet its insurance obligations? (7) Does the agreement provide for operating loss insurance covering loss of production due to delays due to force majeure or official risks?.

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