Common use of Performance Test Clause in Contracts

Performance Test. (6.1) After the plant has been started up per Article 5.2 and has reached nameplate capacity, but no longer than 90 (ninety) days from the date LICENSEE has completed the required modifications per Article 5.1, LICENSOR shall notify LICENSEE that the Plant is ready for the Performance Test. (6.2) LICENSEE shall then have the obligation of calling for the first Performance Test by setting a date for same not less than fourteen (14) days nor more than thirty (30) days from the date of the Notice from LICENSOR mentioned above. Delays caused by other portions of the plant outside the “Battery Limits” of the Licensed Process shall not be deemed to constitute a material cause for a delay of Performance Test, unless LICENSOR accepts such a delay. (6.3) The Performance Test shall be conducted by LICENSEE according to instructions by LICENSOR and the guarantee made in Article 4 shall be deemed to have been met as soon as the Plant has satisfied the requirements of the Performance Test. (6.4) LICENSOR shall have the right to conduct two (2) Performance Tests at LICENSEE’S expense. Thereafter, LICENSOR shall have the right and LICENSEE shall permit LICENSOR to conduct as many Performance Tests as LICENSOR deems necessary, at LICENSOR’S expense, provided LICENSEE shall not be obligated to permit a Performance Test 180 days beyond the date of the first test; further provided, however, that such time limit shall be exclusive of periods of delay caused by LICENSEE or by matters beyond the control of either party. (6.5) Within a reasonable period of time after completion of each Performance Test, LICENSOR shall submit to LICENSEE in writing the results thereof, and shall certify in writing whether the guarantee relating to such Performance Test has been met. Such guarantee shall be deemed to have been met if LICENSOR certified that the Performance Test was successful and if LICENSEE, within 30 (thirty) days after notification by LICENSOR of the results of such Performance Test, does not respond in writing to LICENSOR in what respect, in LICENSEE’S opinion, such guarantee has not been met. (6.6) LICENSEE shall furnish, at no cost to LICENSOR, Fresh Substrate Charge, yeast culture, enzymes, chemicals, utilities, operating and maintenance personnel, maintenance materials and necessary services, such as adequate laboratory inspection, operating supplies as are required for the operation of the Plant in order to meet the guarantees as herein made. LICENSEE will be responsible to process “fresh substrate charge” at a rate as required by LICENSOR during the Performance Test, provided that such rate shall not exceed 115% of daily capacity, as specified in Schedule B, Product Guarantee. (6.7) Failure of LICENSEE to call for the Performance Test within a period of 3 (three) years after the effective date of this Agreement or 6 (six) months after start of commercial operation, whichever comes earlier, or to perform any of its other obligations under this Article 6 shall constitute a waiver of the requirement of a Performance Test or LICENSEE may voluntarily waive the requirement for such test, in which either event shall result in LICENSOR’S guarantees being deemed met, as per Article 3.2 of this Agreement.

Performance Test. The performance test of the Plant will be conducted in accordance with the performance test procedure as defined in ANNEX 6. THE BUYER’s personnel shall conduct the performance test with the assistance of THE SELLER’s personnel assigned for Advisory Services. THE BUYER shall conduct the performance test within 60 (6.1Sixty) After days after the plant has been started up per Article 5.2 and Plant has reached nameplate capacity, but no longer than 90 (ninety) days from the date LICENSEE has completed the required modifications per Article 5.1, LICENSOR shall notify LICENSEE that the Plant is ready for the Performance Test. (6.2) LICENSEE shall then stable operation at design rate and all necessary adjustments have the obligation of calling for the first Performance Test by setting a date for same not less than fourteen (14) days nor more than thirty (30) days from the date of the Notice from LICENSOR mentioned abovebeen made. Delays caused by other portions of the plant outside the “Battery Limits” of the Licensed Process shall not be deemed to constitute a material cause for a delay of Performance Test, unless LICENSOR accepts such a delay. (6.3) The Performance Test performance test run shall be conducted for 72 (Seventy Two) consecutive hours. The Performance Guarantees shall be met if the performance values are achieved, on a 24 (twenty-four) hours average during the test run. THE BUYER shall at any time during the Performance Test and any repeat thereof ensure the availability of sufficient qualified operating personnel, raw materials, chemicals and utilities. THE BUYER shall provide to THE SELLER written notice of successful performance testing within 5 (five) days of completion of a successful performance test. If the Plant fails to pass the performance test for reasons attributable to THE SELLER, the deficiencies will be promptly identified by LICENSEE according THE BUYER and THE SELLER, and corrective measures will be agreed to instructions by LICENSOR THE BUYER and THE SELLER at the guarantee made earliest practicable date. If the failed performance test is attributable to THE SELLER, THE SELLER shall take such action as may be necessary to remedy, at its expense, all deficiency attributable to THE SELLER which prevented the Plant from successfully completing the performance test, whereupon a second performance test run shall take place. In the event that also during this second test run one or more of the Performance Guarantees are not met for reasons attributable to THE SELLER, THE SELLER shall, at its option, either take such action as may be necessary to remedy, at its expense, all deficiency attributable to THE SELLER which prevented the Plant from successfully completing the performance test, or pay to THE BUYER the liquidated damages provided for in ANNEX 6. The payment of such liquidated damages shall be in lieu of all liability for any damages for failure to satisfy the Performance Guarantees provided for in ANNEX 6 and shall be the sole remedy of THE BUYER against THE SELLER for such failed performance; THE BUYER having acknowledged that the amount of liquidated damages is fair and reasonable under the circumstances. The total maximum liquidated damages which are payable by THE SELLER to THE BUYER under this Article 4 12.4 shall not exceed 7 (seven) % of the of the Total Contract Price or the overall limit of liability, whichever is greater If the failed performance test is attributable to THE BUYER, THE BUYER’s contractor, or any person other than THE SELLER or THE SELLER’s vendors, then THE BUYER shall, at its option, either take such action as may be necessary to remedy, at its expense, all such deficiencies which prevented the Plant from successfully completing the performance test, or issue to THE SELLER a written waiver of the performance testing, in which event, all Performance Guarantees provided for in ANNEX 6 shall be deemed to have been met as soon as the Plant has satisfied the requirements of the Performance Testfulfilled. (6.4) LICENSOR shall have the right to conduct two (2) Performance Tests at LICENSEE’S expense. Thereafter, LICENSOR shall have the right and LICENSEE shall permit LICENSOR to conduct as many Performance Tests as LICENSOR deems necessary, at LICENSOR’S expense, provided LICENSEE shall not be obligated to permit a Performance Test 180 days beyond the date of the first test; further provided, however, that such time limit shall be exclusive of periods of delay caused by LICENSEE or by matters beyond the control of either party. (6.5) Within a reasonable period of time after completion of each Performance Test, LICENSOR shall submit to LICENSEE in writing the results thereof, and shall certify in writing whether the guarantee relating to such Performance Test has been met. Such guarantee shall be deemed to have been met if LICENSOR certified that the Performance Test was successful and if LICENSEE, within 30 (thirty) days after notification by LICENSOR of the results of such Performance Test, does not respond in writing to LICENSOR in what respect, in LICENSEE’S opinion, such guarantee has not been met. (6.6) LICENSEE shall furnish, at no cost to LICENSOR, Fresh Substrate Charge, yeast culture, enzymes, chemicals, utilities, operating and maintenance personnel, maintenance materials and necessary services, such as adequate laboratory inspection, operating supplies as are required for the operation of the Plant in order to meet the guarantees as herein made. LICENSEE will be responsible to process “fresh substrate charge” at a rate as required by LICENSOR during the Performance Test, provided that such rate shall not exceed 115% of daily capacity, as specified in Schedule B, Product Guarantee. (6.7) Failure of LICENSEE to call for the Performance Test within a period of 3 (three) years after the effective date of this Agreement or 6 (six) months after start of commercial operation, whichever comes earlier, or to perform any of its other obligations under this Article 6 shall constitute a waiver of the requirement of a Performance Test or LICENSEE may voluntarily waive the requirement for such test, in which either event shall result in LICENSOR’S guarantees being deemed met, as per Article 3.2 of this Agreement.