Endesa - General Contracting Terms and Conditions · ENDESA, through a hedging instrument accepted...

GENERAL CONTRACTING GLOBAL CONDITIONS GROUP ENDESA

First Edition Valid from 01/09/2010 - 1 -

ENDESA: GENERAL CONTRACTING TERMS AND CONDITIONS

1. Scope of application .....................................................................................................3

2. Definitions.....................................................................................................................3 3. Interpretation ................................................................................................................7 4. Language and communications....................................................................................7 5. Contractual documentation and formalisation ..............................................................8 6. Purpose of the Contract................................................................................................8 7. Financial conditions ......................................................................................................10

7.1. Price.......................................................................................................................10 7.2. Negotiated and cost-plus prices.............................................................................11 7.3. Readjustment of prices ..........................................................................................12 7.4. Invoicing.................................................................................................................12 7.5. Payment conditions ...............................................................................................13

8. Implementation .............................................................................................................14

8.1. General points .......................................................................................................14 8.2. Inspections, tests or checks...................................................................................15 8.3. Quality control........................................................................................................16 8.4. Delivery and receipt ...............................................................................................17 8.5. Transfer of ownership and risk...............................................................................21 8.6. Assignment and subcontracting.............................................................................23

9. Transfer of rights and credits ........................................................................................24 10. Guaranteed commitment and financial guarantee ......................................................24

10.1. Guaranteed commitment ....................................................................................24 10.2. Financial guarantee .............................................................................................27

11. Fines and sanctions....................................................................................................28

Supplies



12. Suspension and rescission.........................................................................................30

12.1. Suspension ..........................................................................................................30 12.2. Rescission by Supplier.........................................................................................30 12.3. Rescission for causes attributable to Supplier .....................................................30 12.4. Rescission by Endesa..........................................................................................32

13. Industrial and intellectual property ..............................................................................32 14. Confidentiality .............................................................................................................34 15. Treatment of personal data ........................................................................................35 16. Insurance....................................................................................................................35 17. Liability .......................................................................................................................36 18. Employment Law, Social Security and Health and Safety Obligations .......................37 19. Environmental protection............................................................................................39

19.1. Materials and/or equipment .................................................................................39 19.2. Works and/or services .........................................................................................41

20. Force Majeure ............................................................................................................43 21. Taxes..........................................................................................................................44 22. United Nations Global Compact .................................................................................46 23. Ethical standards ........................................................................................................47 24. Applicable laws and conflict resolution .......................................................................47

Annex I: BRAZIL Annex II: CHILE Annex III: COLOMBIA Annex IV: SPAIN Annex V: PERU



1. SCOPE OF APPLICATION.

1.1. These Terms and Conditions regulate the commercial relationships of ENDESA, S.A. and its affiliates (hereinafter referred as“ENDESA”) with its SUPPLIERS for the contracts for purchasing materials and equipment or contracting works and services. These Terms and Conditions will apply to all the contracts formalised for these purposes, it exclucludes any other sales conditions or conditions of any other nature that are normally applied or invoked by the SUPPLIER, unless a specific agreement to the contrary is established.

1.2. These Terms and Conditions will form a constituent part of the Requests For

Offers for ENDESA’S purchases, and will be part of the Contractual Documentation attached to the Contract that is subsequently formalised. The Requests For Offers will state the website address where these General Terms and Conditions will be available and a copy will be sent to any parties unable to access the website, if requested. The presentation of an Offer to ENDESA will constitute an acknowledgement that the Offering Supplier is aware of and accepts these Terms and Conditions, should the Supplier in question be awarded the Contract.

1.3. These Terms and Conditions will apply to any question not expressly and directly

addressed or regulated in the Contract main body, or in the rest of the Contractual Documentation, in accordance with the established order of priority.

Likewise, one of the Annexes attached at the end of these Terms and Conditions, each of which contains specific regulations for the individual countries in which ENDESA operates, will apply, depending on the country in which the affiliate of ENDESA that formalises the Contract is based (hereinafter, the General Terms and Conditions and the corresponding Annex will be referred as “General Terms and Conditions”).

1.4. Any exception to these General Terms and Conditions proposed by the

SUPPLIER will only be valid if presented previously in writing and accepted previously in writing by ENDESA; any such exception will only apply to the individual Contract against which it was proposed and will in no case extend to any other current or subsequent contracts established with the SUPPLIER.

2. DEFINITIONS.

The following terms, as used in these General Terms and Conditions, will have the following definitions:

• FINAL ACCEPTANCE CERTIFICATE: Certificate or document officially confirming

the definitive transfer and receipt, and the end of the corresponding Warranty Period, of the materials and equipment purchased or the contracted works or service, which must be signed by both Parties in order to be valid.



• PROVISIONAL ACCEPTANCE CERTIFICATE: Certificate or document, which must be signed by both Parties in order to be valid, referring to the following:

1) The satisfactory results from any tests, checks or final inspections to which a

specific piece of equipment or material received by ENDESA will be subject, or the repair, resolution or correction of any deficiencies detected in such pieces of equipment or materials, in the applicable areas, or

2) The satisfactory results from the examination of the good working condition

of the works or the corrections to the contracted services and the fulfilment of the technical standards and contractual clauses in terms of execution, production and commissioning, in the applicable areas.

• WORKS AND SERVICES INSPECTION CERTIFICATE: Certificate used to record

any deficiencies or defects found in the completed works or services and the timeframe in which such deficiencies must be rectified by the SUPPLIER.

• DELIVERY NOTE (Dispatch or consignment Slip or Receipt): Commercial

document containing a list of the goods supplied and accrediting their effective delivery.

• CONSIGNMENT AUTHORISATION: Document issued by ENDESA authorising

the SUPPLIER to proceed with the consignment or delivery of the Contracted equipment or material, or a part of the same.

• ADVICE OF DISPATCH: Document issued by the SUPPLIER once the agreed

procedures have been completed, informing ENDESA that the whole or part of the Contracted equipment or material has been sent.

• QUALITY AGREEMENT: Agreement established between ENDESA and the

SUPPLIER, under which a certain degree of liability attaches to the SUPPLIER for the acquisition, guaranteeing the quality levels previously agreed by both parties.

• LETTER OF INTENT or NOTICE TO PROCEED: Non-binding agreement outlining

the commitments that may be formalised or not in a Contract at a future date.

• GUARANTEED COMMITMENT: Set of technical and commercial guarantees for the materials or equipment purchased and/or the contracted works or services, under which the SUPPLIER specifically guarantees to fulfil the terms to ENDESA.

• CONTRACT: Document regulating and formalising the heads of agreement

between ENDESA and the SUPPLIER, referring to the acquisition of materials and equipment and/or the execution of specific works or the rendering of a determined service. If ENDESA deems it appropriate or necessary, the formalisation of the contract may be brought forward through the corresponding Letter of Intent or Notice to Proceed, with the purpose of obtaining the SUPPLIER’S goods or services as quickly as possible, once the Parties have agreed on the general and essential obligations, and subject to the subsequent negotiations and/or the formalisation of the details.



The Contract may be drawn up in any of the following forms:

- Framework Agreement : This contract regulates the financial and technical conditions and all other types of conditions, which will govern the subsequent “Delivery Orders” that may be issued during the contract period. The formalisation of a Framework Agreement or Open Contract does not, however, constitute an obligation to subsequently formalise a Delivery Order.

- Contract-Delivery Order: Formalised under the terms of a Framework

Agreement or Open Contract and therefore containing, at least, the basic conditions established thereunder.

- Contract: This contract independently regulates the acquisition of materials

or equipment and/or the execution of specific works or services.

• CONTRACTUAL DOCUMENTATION: Set of attached documents forming a constituent part of the Contract, including the General Contracting Terms and Conditions, and the financial, technical and quality conditions contained in the Request for Offers, which establish the technical, commercial, legal or financial parameters, among others.

• SPECIFICATIONS: Detailed information on the features, qualities and conditions

of the purchase of materials or equipment and/or the execution of the required works or services that are the subject of the contract.

• ELECTRONIC SIGNATURE: Accreditation system for verifying the parties’

identities, with the same value as a handwritten signature, and authenticating the communications sent by the signatory, within the areas where the system is applicable and in accordance with the laws in force in each country.

• FINANCIAL GUARANTEE: Financial sum that the SUPPLIER must provide to

ENDESA, through a hedging instrument accepted by ENDESA, as a guarantee of the proper fulfilment of the contractual obligations and/or as a guarantee of the payments made in advance and that will be deducted from the final price.

• INSPECTOR: Person or body appointed by ENDESA to carry out inspections at

any stage during the implementation of the Contract.

• BIDDER/S: Person or natural or legal person, or a group of natural or legal persons, presenting an offer in response to a Request For Offers issued by ENDESA.

• PARTIES: For the purposes of this document and any matter regulated therein,

this term refers to both ENDESA and the SUPPLIER.



• WARRANTY PERIOD: Period after the effective implementation of the Contract in which the SUPPLIER must guarantee the proper fulfilment of the contractual obligations. The period begins when the Provisional Acceptance Certificate is signed and ends in the agreed timeframe or when the Final Acceptance Certificate is signed, whichever occurs later, excepting cases in which the warranty period is extended as a result of adjustments, repairs or replacements to the materials or equipment supplied.

• REQUEST FOR OFFERS: Document through which ENDESA issues its request

for bids. The document will consist of the Technical, Commercial and Legal Specifications and will include these General Terms and Conditions.

• QUALITY CONTROL PLAN: Document issued by the SUPPLIER specifying the

processes, procedures and associated resources that will be used in order to fulfil the requirements of the Contract.

• PURCHASES PORTAL: Computer application that provides access to a

purchasing system, through which the SUPPLIER may carry out transactions with ENDESA.

• INSPECTION POINTS PROGRAMME: Document issued by the SUPPLIER and

subject to ENDESA’S approval, recording the different inspections, tests or checks that must be performed.

• SUPPLIER: Natural or legal person or persons, or group, that ENDESA contracts

for the execution of the works and/or services.

• ACCEPTANCE AT SOURCE: Procedure during which the mandatory tests or checks for the handover of the materials, are performed in the presence of the ENDESA technicians or of the person or body appointed by ENDESA, at the SUPPLIER’S installations, those of their subcontractors or any other company agreed by the Parties.

• ACCEPTANCE PROTOCOLS: Procedure for checking the mandatory testing

protocols, carried out previously by the SUPPLIER, through which the ENDESA technicians or the person or organisation authorised by ENDESA, approve the consignment of the material in question or, on the contrary, decide to check the results of said protocols through an Acceptance at Source procedure.

• QUALITY ASSURANCE SYSTEM: System establishing the requirements that the

SUPPLIER must fulfil in order to provide the materials/services that are the subject of the Contract effectively and correctly.



• SUBCONTRACTING: Contracts established by the SUPPLIER with third parties,

constituted by natural or legal person or persons, under which these parties partially participate in the fulfilment or execution of the Contract signed with ENDESA, without prejudice to the legal relationship existing between the Parties established under the abovementioned Contract and without creating any legal relationship or direct obligation whatsoever between ENDESA and the third party/parties in question.

• TAXES: All taxes, tax contributions, tax rights or other levies or encumbrances or

any other form of duty in general or of a similar nature, established by the corresponding authorities under the corresponding laws, affecting the execution of the subject of the Contract.

3. INTERPRETATION.

3.1. The Parties will try to resolve amicably any discrepancies or disagreements that may arise regarding the execution or interpretation of the Contract, always in accordance with the object and purpose of the Contract and the applicable Legislation.

3.2. In the event of any discrepancies between the content of the main body of text of the contract and the text of the Contractual Documentation, the text of the Contract will prevail.

3.3. If case of any discrepancies between the original Spanish version of the General Contracting Terms and Conditions and the translation of these to the other languages, the Spanish version shall prevail.

3.4. It shall not be understood that either of the Parties has waived any right, power or privilege granted by the Contract, unless such waiver has been duly expressed in writing and acknowledged by the other Party. The waiver of a specific right will not constitute the waiver of future eventual rights, even if they are of a similar nature.

3.5. Not exercising a right will not constitute a waiver of said right, except in the specific cases foreseen in the Contract.

3.6. If any clause or condition of the Contract is annulled, the annulment will not affect the rest of the Contract’s clauses or conditions, which will remain in force without the annulled clause. The Parties will try to amend the annulled clause in a way that respects the intention and spirit of the clause as faithfully as possible.

4. LANGUAGE AND COMMUNICATIONS.



4.1. All communications sent between the Parties on the development of the Contract, must be made in writing and sent to the contact person appointed as such in the Contract.

The communications may be made electronically if this is expressly accepted in the Contract, provided that the system makes a record of the communications.

4.2. In any other case, communications, notifications or requests must be made in

writing to the address stated in the Contract.

4.3. The Contract and the Contractual Documentation will be drawn up in the official language of the country in which the affiliate of ENDESA signing the contract is based, excepting the documents expressly exempt from this requirement by the Parties’ mutual agreement. The technical documents and information may be presented in English.

4.4. Any amendment or addition to the Contract must be made in writing and must be

drawn up and signed in the same language used to draw up the Contract.

4.5. If the Contract is drawn up in any language other than Spanish, the Parties may agree to have it translated into Spanish. In any case, the version drawn up in the original language will prevail.

5. CONTRACTUAL DOCUMENTATION AND FORMALISATION.

5.1. The agreements will be formalised through the signature of a Contract, along with its Contractual Documentation.

5.2. The additions and additional clauses of a Contract will be interpreted whilst

restricting the modifying parts and will not have any modifying effects, unless the contrary is expressly agreed.

6. PURPOSE OF THE CONTRACT.

6.1. These General Terms and Conditions will apply to Contracts whose principal purpose is the acquisition of materials or equipment and/or the execution of a determined service or work, as requested by ENDESA to the SUPPLIER.

6.2. If applicable, the object of the Contract, which will be charged to and on account

of the Supplier, will specify at least the following:

6.2.1. The execution of the inspections, tests and verifications required by the applicable regulations or by ENDESA, as well as all the costs derived from the execution of these tests.

6.2.2. The management and obtainment of visas, authorisations, permits and

licenses required in order to fulfil the Contract, except for those legally corresponding to ENDESA, in its capacity as the owner or promoter.



6.2.3. The organisation of the SUPPLIER’S own personnel, appointed to implement

the Contract, with a clear identification of their responsibilities and lines of action, separate for all purposes from those of ENDESA.

6.2.4. The appointment of a person within the SUPPLIER’S organisation who will

act as the sole representative when dealing with ENDESA, with regard to any matter related to the implementation of the Contract.

6.2.5. Contracts for the purchase of materials and/or equipment:

a) The necessary design, engineering and technical projects.

b) The storage of materials and all stages of manufacture, as well as the

storage of the finished products until they are delivered.

c) The cost of supervising the assembly and / or receipt of the equipment at the location specified by ENDESA.

d) The normal and special paint, protections and packaging required.

e) Training for ENDESA’S personnel on how to operate and maintain the

purchased equipment and materials.

f) The preparation and delivery of all the documentation required for the fulfilment of the Contract, such as plans, schedules, reports, manuals, instructions, protocols, acceptance, control and testing certificates and lists of replacements and tools, to ENDESA, sufficiently in advance for ENDESA to examine these documents.

g) The marking of the materials according to the Specifications that are

established, if applicable.

6.2.6 Contracts for the implementation of a service or works:

a) The labour required to implement the Contract with all the costs and social security requirements.

b) The construction of all the auxiliary installations, their maintenance,

cleaning and securing during the execution of the work, as well as demolition or removal of the provisional installations not required by ENDESA and the conditioning and cleaning of the location at the end of the work.

c) The construction of the installations, provisions of resources and

establishment of plans, measures, devices, signs and services necessary to guarantee the health and safety of the employees in the site.

d) The construction of the water and electricity lines required for the works

or the installation from supply points indicated by ENDESA, as well as



the construction and/or maintenance of the roads or paths within the worksite that are necessary to connect the installations, workshops, facilities and offices, and the conservation of the public roads and pathways used.

e) The provision of all the materials, elements and pieces of equipment that

will be part of the installation and that ENDESA is not expressly obliged to provide, as well as the provision of the labour and all the fittings, cranes, vehicles, scaffolding, machinery, tools, replacements, consumables, reagents and chemical products that are necessary and adequate for the correct implementation of the work, including the assembly, upkeep, functioning, fuel and repairs.

f) The transportation of all the materials, equipment, tools and machinery

that the SUPPLIER must provide to the worksite. g) The delivery at the worksite, unloading, appropriate storing, moving and

handling of all the materials, equipment, tools, replacements, consumables and machinery required, including those that the SUPPLIER is obliged to provide and those provided by ENDESA as part of the object and scope of the Contract.

h) The maintenance, conservation and signposting of the works performed

or installations assembled until their Provisional Acceptance.

6.3. In cases involving the extension, modification or reduction of the Contract, the prices agreed in the Contract will be applied; if this is not possible, contingent or cost-plus prices will be established in accordance with section 7.2 of these General Terms and Conditions; if this is not possible either, prices per unit or item as a lump sum will be agreed, so that the extension, modification or reduction can be valued.

6.4. The object of the Contract may not be modified in any way, unless the Parties

reach a previous agreement in writing.

7. FINANCIAL CONDITIONS

7.1. Price.

7.1.1. The price of the Contract is the consideration agreed for the acquisition of the materials and/or equipment and/or the implementation of a the contracted works or service, which is therefore considered as the total contract value, and includes all that comprises the object of the Contract, as specified in section 6 of these General Terms and Conditions, the contractor’s profit and all that the SUPPLIER must provide or generate, or the expenses or overheads that are necessary for the fulfilment of the contract, without any further exceptions apart from the concepts or provisions that have been expressly excluded and the legally established taxes.



7.1.2. Accordingly, in the event of a works or service contract, the price of the Contract will include, at the least and unless expressly included under a different heading, the following:

• Direct and indirect labour. • Machinery and associated personnel. • Amortisation of machinery. • Consumables supplies and permanent materials. • Transportation of personnel, materials and resources to and from the

place of work. • Installation and authorisation of services. • Maintenance costs. • Overheads and contractor’s profit. • The legally corresponding taxes, levies and duties. • Expenses incurred by the SUPPLIER in programming, inspections and

tests, controlling materials and execution methods, tests, deliveries and other analyses.

• Complete fulfillment of all the work units, in accordance with the technical specifications and all other contractual documents.

• Construction, demolition and removal of the auxiliary works, installations, security or storage facilities or installations built in fulfillment of the Regulation for Prevention of Risks in the Workplace.

• Costs of financial guarantees, insurance and warranties, where applicable.

7.1.3. The prices will be itemised by price of services, prices of materials and the

legally corresponding taxes. 7.1.4. The SUPPLIER will pay any additional costs incurred in freightage and

transportation and any expenses incurred due to the failure to fulfil the delivery and consignment conditions established in the Contract.

7.1.5. ENDESA will not pay for any materials, equipment or work not included in the

Contract if their execution was not previously offered by the SUPPLIER, in writing and with an express description of the price, accepted likewise in writing by a representative of ENDESA with the required level of authority.

7.2. Negotiated and cost-plus prices.

7.2.1. In the cases in which a work unit that was not originally foreseen in the prices

of the Contract must be executed, the corresponding price will be agreed upon by ENDESA and the SUPPLIER: the SUPPLIER will submit a duly substantiated proposal, based on an itemisation of the costs of other analogous units for which there is a unit price.



7.2.2. The negotiation of the contingent price will be independent of the

construction of the unit in question, as the SUPPLIER will be obliged to implement the unit immediately after receiving the order from ENDESA.

7.2.3. If reaching an agreement to establish a negotiated price is not possible, or if

ENDESA deems this necessary, the price will be determined on a cost-plus basis, for the purposes of which the SUPPLIER will include the corresponding price ranges for personnel and machinery in their offer, along with all the items listed in point 7.1.2.

7.2.4. The execution of works on a cost-plus basis may only be carried out after the

execution order has been received from ENDESA in writing.

7.2.5. The personnel costs will include the tools corresponding to the worker’s area of expertise, as well as the equipment required for the worker’s safety and protection and the correct execution of the work.

7.2.6. Additional costs for transport, allowances or expenses for the SUPPLIER’S

personnel will not be accepted.

7.3. Readjustment of Prices.

The prices will be considered always fixed. Exceptionally, the prices may be readjusted, but only if the Contract establishes the criteria, formulae and procedures that must be applied in order to do so.

7.4. Invoicing.

7.4.1. Invoicing may take place through:

A. ENDESA’S Purchases Portal (in the countries where this is available).

On the basis of ENDESA’S agreement and in accordance with the terms and conditions established in the Contract, the SUPPLIER will enter the corresponding invoice in ENDESA’S Purchases Portal, stating essentially the invoice number, issuing date and date of effect.

For ENDESA to accept the invoice and include it in the accounting system effectively, the SUPPLIER must attach its electronic signature, in accordance with the laws on online invoicing.



B. Invoicing independently of ENDESA’S Purchases Portal.

The SUPPLIER must send the original paper invoice to ENDESA. This invoice will be accepted provided it is legally and contractually correct and that the items included in the invoice have been duly accepted by ENDESA.

Any invoices not including the corresponding Contract number will not be accepted or taken into account when calculating the date of receipt of the invoice. Each invoice may only be issued in one currency, regardless of whether different currencies have been established in the Contract for the payment. ENDESA will return to the SUPPLIER any invoices that:

1. Are missing any data or do not fulfil any contractual or legal mandatory requirement.

2. Contain items that have not been accepted or approved by ENDESA. 3. Contain sums expressed in a currency other than that established in

the Contract or 4. Result in any other justified cause for returning the invoice.

In any case, ENDESA will state the reason on any returned invoice. The original date of issuance/receipt of an invoice will be annulled in the event that the invoice in question is returned.

All invoices and, if applicable, the supporting documents must be sent to the address specified in the Contract, unless the Contract states otherwise.

7.4.2. The following items must be shown separately on the same invoice:

a) Eventual works contracted on a cost-plus basis, in addition to the costs

agreed in the Contract.

b) Increases that have already been invoiced through the application of the readjustment formula foreseen in the Contract. In this case, the SUPPLIER must include the documents substantiating the values of the applied price indexes and the details of the corresponding readjustment formula.

7.5. Payment Conditions.

7.5.1. All payments made by ENDESA will be made by bank transfer, in

accordance with the conditions described below. For these purposes, the SUPPLIER undertakes to provide ENDESA with the full details of its complete bank account, taking into account the fact that if the SUPPLIER is not based in the country where the contracted work takes place, it must provide the information required to make the payment (the SWIFT code or ABA code; if based in the European Union, the SUPPLIER must provide its



complete IBAN code). In exceptional cases, ENDESA may accept other legal and valid payment methods, taking into account the purpose of the Contract and the place of implementation.

7.5.2. The timeframes established for the payment of the corresponding invoices

are stated in the Annexes, as they will depend on the tax residence of the ENDESA affiliate signing the Contract.

7.5.3. All the payments made before the Provisional Acceptance in accordance with

the stipulations of the Contract will be considered paymentsin advance and will be discounted from the final price. If no guarantee of the faithful fulfilment of the Contract has been presented, the SUPPLIER must provide a financial guarantee to ENDESA at the same time as making each of the potential payments, in fulfilment of the requirements established in these General Terms and Conditions, to guarantee said payments.

7.5.4. The payment of the price will not imply that ENDESA considers that the

SUPPLIER has fulfilled all the commitments established in the Contract correctly or that ENDESA waives its rights and actions that may correspond by virtue of the Contract in respect of the SUPPLIER; ENDESA expressly reserves these rights, independently of the payment made.

7.5.5. ENDESA will have the right to withhold and compensate the sums pending

payment to the SUPPLIER, in the amounts accrued and required that the SUPPLIER, in turn, owes to ENDESA due to causes related directly or indirectly with the purpose of one same Contract.

8. IMPLEMENTATION.

8.1. General Points.

8.1.1. In the execution of the Contract, apart from the requirements contained in the

Specifications, the Contractual Documentation and the Annexes depending on the country in which the ENDESA affiliate signing the contract is based, the conditions established in the following sections must also be fulfilled.

8.1.2. The SUPPLIER providing the services in the works or installations of

ENDESA is obliged to appoint a Representative, who will be present at the works or installations during the works period, with the authority to make decisions and represent the SUPPLIER in terms of all the technical and financial aspects, the health and safety in the workplace regulations, social and employment obligations and Environmental matters.

ENDESA reserves the right to reject to the Representative in the Works or Installations during the work, when there is a justified cause, in which case the SUPPLIER will be obliged to replace the Representative in no more than ten (10) days.



8.2. Inspections, tests or checks.

8.2.1. ENDESA may inspect the materials and pieces of equipment that are the subject of the Contract at any stage during the manufacturing process, as well as the execution of the contracted works or services, including the materials used by the SUPPLIER to provide the works or services. These inspections may be carried out by ENDESA’S personnel directly or by persons or organisations appointed for this purpose, in the works, offices, factories, workshops or warehouses of the SUPPLIER or those of the SUPPLIER’S subcontractors. For these purposes, ENDESA’S inspectors will be provided free access to the above mentioned installations and must be granted this access when necessary.

8.2.2. Notwithstanding ENDESA’S right to inspect the above mentioned

installations, the SUPPLIER is obliged to carry out, at its own account and expense, all the agreed tests and verifications that may be required in accordance with the administrative Rules and Regulations or the standards usually applied in good professional practice. The SUPPLIER must notify ENDESA of the dates of any inspections in writing with at least ten (10) calendar days’ notice. Likewise, the SUPPLIER must notify ENDESA of the results of the tests or verifications performed, accrediting them with the corresponding certificates or protocols, even if inspectors or representatives of ENDESA were present during the tests.

8.2.3. The SUPPLIER may not begin any stage or phase in the manufacturing,

construction or assembly process or send any materials, until the previously required tests or checks have been performed with satisfactory results and ENDESA has expressly authorised these operations in writing or ten (10) calendar days have elapsed since the SUPPLIER notified ENDESA of the conclusion of the tests without ENDESA registering any objection.

8.2.4. Notwithstanding the previous clauses, the tests or checks will be carried out

in accordance with the Inspection Points Programme prepared by the SUPPLIER and approved by ENDESA, in all cases in which the Contract specifies the Inspection Points Programme.

8.2.5. ENDESA may demand additional tests or checks apart from those foreseen

in the Contract if it deems these tests necessary. If the results of these additional tests prove that the tested elements fulfil the Specifications, they will be paid by ENDESA; if the contrary is the case, the costs will be borne by the SUPPLIER.

8.2.6. The conclusion of the inspections, tests or checks, even with results to the

satisfaction of ENDESA, will not imply that the purpose of the Contract has been fulfilled in all extents and must therefore be accepted and approved by ENDESA, and will not exempt the SUPPLIER from its corresponding liability. Any recommendations or observations made by ENDESA’S engineers or inspectors during the execution of the Contract or during the inspections, tests or checks will not exempt or reduce the SUPPLIER’S liability in respect of the purpose of the Contract or excuse the SUPPLIER of having to fulfil all



the parts of the agreement, unless the agreed specifications are expressly modified.

8.2.7. If the results of an inspection, test or check show that the agreed

Specifications or the established quality standards have not been met, ENDESA may, without waiting for the delivery, reject the elements that have not been prepared correctly and demand that they be replaced or repaired, at the SUPPLIER’S account and cost, and without any expense or cost to ENDESA whatsoever. In any case, the SUPPLIER may not invoke the timeframes and conditions attaching to the inspections, tests and checks performed as a cause and justification for delays in delivery.

8.3. Quality control.

8.3.1. Quality control covers the set of actions, activities and techniques that are necessary to provide sufficient confidence that the contracted materials, equipment, works or services will fulfil the conditions required by ENDESA satisfactorily and, if applicable, comply with the corresponding technical standards.

8.3.2. The SUPPLIER will be solely responsible for quality control, independently of

the controls and tests carried out or demanded by ENDESA with its own resources or those of a third party. These tests will have no bearing on the full liability for quality control attaching exclusively to the SUPPLIER.

8.3.3. Before beginning the manufacturing process or the construction of the works

or rendering of the contracted service, the SUPPLIER will submit a Quality Control Plan (according to Standard ISO 10.005 or equivalent), at ENDESA’S request, for approval, which will include the Inspection Points Programme and a description of the applicable operations and procedures.

Once the above mentioned Quality Control Plan has been presented, ENDESA may present its objections, if applicable and solely for justified reasons, within a period of fifteen (15) working days, and the SUPPLIER will have to modify the plan with due diligence, making the necessary corrections in accordance with the objections raised by ENDESA.

8.3.4. During the execution of the Contract, the SUPPLIER will rigorously and

strictly comply with the contents of the Quality Assurance System and Quality Control Plan approved by ENDESA, which reserves the right to carry out any audits necessary to ensure that the plans are fulfilled.

8.3.5. Once the Contract has been executed, the SUPPLIER will issue a final

Quality Control Report, submitted to ENDESA’S approval; the content of the report must fulfil the provisions of the Contract and the approved Quality Control Plan.

8.3.6. ENDESA may require the SUPPLIER to register the technical documentation

necessary for manufacturing the materials and pieces of equipment that are



the subject of the Contract with a Public Attorney. This documentation will be made available to ENDESA, which may use it in cases in which a product is discontinued or bankruptcy SUPPLIER or its subcontractors or suppliers.

8.3.7. The fulfilment of these quality control conditions will not exempt the

SUPPLIER of its liability for the inappropriate execution of the Contract in any case.

8.4. Delivery and receipt.

8.4.1. General Conditions.

8.4.1.1. The deliveries must be made within the timeframes or periods agreed in the Contract.

Likewise, the SUPPLIER undertakes to meet all the partial timeframes and deadlines that may have been established in the Contract.

8.4.1.2. If the Contract does not specify a determined date of termination and only establishes the execution or delivery timeframe, this period will begin when the Contract is signed or on the issuance date of the Letter of Intent or Notice to Proceed.

8.4.1.3. The early completion or reduction of the execution or delivery period will

require ENDESA’S prior approval. ENDESA’S approval will not imply any early payment of the whole or part of the price.

8.4.1.4. The dates of completion must suffer no delays and the execution or

delivery periods may not be extended, except in cases of Force Majeure or due to causes attributable to ENDESA.

8.4.1.5. The SUPPLIER undertakes to provide, at its sole account, all the

resources that are reasonably available to it to offset, as soon as possible, any delays in the established timeframes or dates, even if the delay is justified.

8.4.2. Materials and/or equipment.

8.4.2.1. In executing the Contract, the SUPPLIER must take all the precautions and measures necessary to avoid any type of personal injuries or material damage, which the SUPPLIER must treat or repair, if applicable.

8.4.2.2. Along with each delivery, the SUPPLIER must provide all the final

technical documents and test protocols established in the Specifications, in the Contract and, if applicable, in the corresponding Technical Standards.



8.4.2.3. Apart from these documents, the SUPPLIER must certify that the design, raw materials, brands and types of components are identical to those contained in the original approved offer, if so requested by ENDESA.

8.4.2.4. The elements or parts rejected as a consequence of an inspection

carried out by ENDESA in the SUPPLIER’S workshops must be clearly identified and the SUPPLIER will be responsible for ensuring that these elements are not dispatched as part of the supply/consignment.

8.4.2.5. In order to deliver the elements, the SUPPLIER must send to ENDESA,

care of the person designated in the Contract or in charge of receiving the elements, the Advice of Dispatch, stating the following:

• Contract reference number. • Number of packages sent, indicating the materials contained

therein. If these were the last contracted supplies, this should be expressly noted.

• Data on the means of transport used and/or the company in charge of transport, with telephone with of a contact person.

• Date and place of commissioning of the equipment or materials.

Likewise, the SUPPLIER undertakes to notify ENDESA immediately of any circumstance that may alter the agreed delivery conditions.

8.4.2.6. With regard to materials or equipment subject to quality controls, and

unless the contrary is agreed, the SUPPLIER will not send these elements until it has received the mandatory Consignment Authorisation subsequent to the Acceptance Protocols or the Acceptance at Source issued by ENDESA. The supplies subject to Quality Agreements will be exempt form this requirement. If, however, the SUPPLIER proceeds with the consignment, all the costs incurred in the process will be at the SUPPLIER’S account.

8.4.2.7. Unless the contrary is stipulated in the Contract, the materials and

equipment will be delivered as DDP (Incoterms CCI 2000) at the destination established in the Contract. The terms, with reference to the delivery, ownership, insurance, etc, will be interpreted in accordance with the Incoterm, except where such terms are in conflict with the contents of the Contract.

8.4.2.8. All the equipment and materials must be duly marked, referenced and

labelled so that they may be received correctly and easily, along with the corresponding delivery note that must contain all the details stated in section 8.4.2.5. clearly.

8.4.2.9. In accordance with the contents of section 8.4.2.7, the costs of

transporting the materials to the destination and the unloading operations will be paid by the SUPPLIER.



The SUPPLIER must obtain any transit permits, licenses, authorisations and police escorts required due to the nature of the transported materials and/or the form of transportation; the costs of such elements and any works required by the same, such as traffic detours, shoring up bridges, road signs, etc, will be borne by the SUPPLIER.

8.4.2.10. The SUPPLIER must insure the transportation of the merchandise with

an insurance company of recognised solvency and reputation, in accordance with the minimum coverage requirements specified by the Institute Cargo Clauses (Institute of London Underwriters) or similar, or as established in the Contract.

8.4.2.11. The signature of the corresponding delivery notes, dispatch slips or

consignment receipts will not imply the acceptance of the quantities or quality specified for the received materials.

8.4.2.12. ENDESA reserves the right to postpone any delivery or consignment of

the materials or equipment it is to receive, without such postponement constituting a failure to fulfil the delivery dates on behalf of the SUPPLIER. The SUPPLIER will bear the storage and insurance costs resulting from the postponement during the month following the agreed date of delivery. If the consignment is postponed for longer, the Parties will mutually agree on the compensations that must apply for the subsequent storage and insurance costs.

8.4.2.13. Once ENDESA has received the material or equipment, it will issue a

Provisional Acceptance Certificate, that must be signed by both Parties; the Certificate must mention the satisfactory results of the final tests, checks and diagnoses, or a record must be made of the circumstances in which any deficiencies discovered are repaired, resolved or corrected. The Provisional Acceptance Certificate must be formalised in a maximum period of eight (8) calendar days as of the date on which either of the Parties requests this, once all the conditions or activities of the Contract have been fulfilled.

When no final tests, checks or diagnoses can be demanded, the SUPPLIER’S delivery of the materials and equipment will be formalised with ENDESA’S approval upon receipt of the same.



8.4.3. Works and/or services.

8.4.3.1. The SUPPLIER must notify ENDESA, with due notice, of the date on

which it expects to completely finish its work, so as to schedule the date and time on which the Provisional Acceptance takes place. The Provisional Acceptance must take place as soon as possible, without this period extending further than thirty (30) days, as of the completion of the works.

On the date established by mutual agreement for the Provisional Acceptance, the state of the contracted works or service will be inspected, in the presence of the SUPPLIER’S representative, to check that it fulfils the Technical Specifications and contractual clauses in terms of the execution, production and functioning.

8.4.3.2. The Provisional Acceptance will take place once the specific tests have

been performed with satisfactory results and the good condition of the contracted service or works has been verified. In this case, ENDESA will issue the Provisional Acceptance Certificate, which must be signed by both Parties.

8.4.3.3. If the results of the inspection of the contracted works or service are not

satisfactory, or the established tests are not passed, ENDESA may issue a Works and Services Inspection Certificate, which will record the defects discovered and the timeframe in which they must be rectified by the SUPPLIER.

Once this period has elapsed, the works or services will be inspected again, with the corresponding tests performed. If the results are satisfactory, ENDESA will issue the Provisional Acceptance Certificate. If the opposite is the case, ENDESA will issue a new Inspection Certificate, stating the observed defects, and ENDESA will be able to choose between rescinding the Contract and granting the SUPPLIER a new period in which to resolve or repair the defects.

8.4.3.4. The extraordinary timeframes granted to the SUPPLIER to resolve or

repair the deficiencies discovered during the Provisional Acceptance, will not be considered as extensions to the contractual timeframes and, consequently, the SUPPLIER will be liable for any fines, sanctions and/or indemnities for damage or loss incurred as a result.

8.4.3.5. If the SUPPLIER wishes to make a record its disagreement with any

technical or financial aspect, it must do so using the Certification issued by ENDESA itself, stating the reasons for its disagreement.

8.4.3.6. Once the warranty period stated in section 10.1 of these Terms and

Conditions has elapsed, the SUPPLIER will notify ENDESA that the period in question has expired and request the Definitive Acceptance. Upon receipt of the request, ENDESA will notify the SUPPLIER as to the



date established for the Definitive Acceptance, which must take place within a period of no more than thirty (30) days, as of the date of ENDESA’S receipt of the notification.

On the date established by mutual agreement for the Definitive Acceptance, the state of the contracted works or service will be inspected to check that it fulfils the required conditions, with the corresponding tests, in the presence of the SUPPLIER.

8.4.3.7. ENDESA will officially accept the work or service by issuing the

corresponding Final Acceptance Certificate, which must be signed by both Parties and must certify the complete fulfilment of all the SUPPLIER’S contractual obligations.

8.4.3.8. If the SUPPLIER does not attend the Definitive Acceptance, despite

having been notified of the same, the Certificate issued by ENDESA will have the same validity as if it had been signed by the SUPPLIER.

8.4.3.9. If the SUPPLIER wishes to express its disagreement with any technical

or financial aspect, it must do so using the same Certificate issued by ENDESA, describing the reasons for the disagreement.

8.4.3.10. The SUPPLIER will be fully responsible for the Management and

Supervision of the execution of the contracted works or services.

8.5. Transfer of Ownership and Risk.

8.5.1. Materials and/or Equipment.

8.5.1.1. The ownership and risks inherent in the ownership of the materials and equipment that are the subject of the Contract will be transferred to ENDESA once the materials and equipment have been delivered by the SUPPLIER and ENDESA has accepted them, at the agreed location and conditions. Notwithstanding, the SUPPLIER authorises ENDESA to take possession of the materials and equipment, either in full or in part, as soon as they are on the worksite or premises belonging to ENDESA and to use them if necessary, for any works, installations or other operations and to install them in ENDESA’S facilities, unless there are justified reasons for limiting ENDESA’S rights in this sense. If authorisation is given, ENDESA may incorporate these materials and equipment to its operational processes and appropriate the results of the processes. In any case, until the risks inherent in ownership are transferred to ENDESA, the SUPPLIER must have an insurance policy in force with sufficient cover for the materials and equipment, even if they are already in possession of and being used by ENDESA.

8.5.1.2. The SUPPLIER will be liable for any hidden defects or factory defects,

including during the Warranty Period and up until the period stated in the applicable legislation, apart from the legal responsibilities and liabilities of other types that may apply.



8.5.2. Works and/or Services.

8.5.2.1. The elements constituting the subject of the Contract, including the

results of the use of the contracted works or service, whether they may be protected or not, will be property or, if applicable, will be transferred to ENDESA when the Provisional Acceptance Certificate is signed, notwithstanding the right to agree to an anticipated transfer, in each particular case.

8.5.2.2. Notwithstanding the rights legally corresponding to the State or to third

parties, ENDESA reserves the rights to the possession and ownership of any discoveries made of any nature during the excavations and demolitions carried out on its land, including any usable mineral substances. When extracting them, the SUPPLIER must apply all the legal precautions and/or those established by ENDESA. ENDESA will reimburse the SUPPLIER for the extra works or special expenses incurred in this work, applying an extension to the execution period, if necessary.

8.5.2.3. Notwithstanding the contents of this clause, both Parties reserve the right

to demand from the other Party, which will be obliged to comply with the demand unless there is a reasonable cause not to, the transfer of ownership of the works, installations, materials and equipment incorporated or existing at the location at any time, provided that ENDESA is current with its approved payments owed to the SUPPLIER. In this case, the SUPPLIER will continue to have the right to act on the transferred elements in order to carry on with the works and maintaining the risks inherent in the installation until the Provisional Acceptance.

8.5.2.4. In any case, until the risks inherent in ownership are transferred to

ENDESA, the SUPPLIER must have an insurance policy covering the risks in the worksite or installations, even if they are already in possession of or being used by ENDESA.

8.5.2.5. The SUPPLIER will be liable for any hidden defects or faults, including

during the Warranty Period and up until the period stated in the applicable legislation, apart from the legal responsibilities or liabilities of any other nature that may apply.



8.6. Assignment and subcontracting.

8.6.1. Any agreement or operation of the SUPPLIER with any third parties, under which they participate in fulfilling or implement the Contract, will be considered an assignment of the Contract or subcontract, depending on each case.

8.6.2. The SUPPLIER may not assign the Contract, or subcontract its fulfilment or

implementation, whether in part or in full, to any third party, unless it has informed ENDESA of the identity of the assignee or subcontractor and the scope of the assignment or subcontract, and ENDESA has previously and expressly authorised the operation in writing. The assignment or subcontracting proposal must be made by the SUPPLIER in writing and with sufficient notice so as to avoid causing any delays, if the proposal is rejected.

8.6.3. In no event will such operations imply the existence of a contractual

relationship between the subcontractors or assignees and ENDESA: the SUPPLIER will at all times be liable for all the actions and activities of the subcontractors or assignees, and the fulfilment of the contractual, legal and tax obligations derived from the execution of the work, including any damage or loss caused to ENDESA by any of the subcontractors or assignees, their agents, assessors and/or employees.

8.6.4. ENDESA will not be liable towards any subcontractor or assignee, or any of

their personnel, for any claim derived directly or indirectly from the Contract; consequently, the SUPPLIER undertakes and guarantees to ENDESA that it will implement all possible measures to avoid the presentation and/or processing of said claims. Consequently, the SUPPLIER will be liable towards ENDESA and will hold ENDESA free and harmless from any in-court or out-of-court litigation, lawsuit or proceeding against ENDESA from any subcontractor or assignee, or any of these parties’ personnel. The abovementioned liability will be sufficient to cover both the sum that ENDESA may be forced to pay as indemnity, and the expenses or costs of any nature that ENDESA is forced to incur as a result of said claim. The SUPPLIER’S failure to fulfil the requirements established in this section will be considered a severe material breach of Contract and will give ENDESA the right to rescind the Contract due to breach by the SUPPLIER, notwithstanding any other legal action or lawsuit that ENDESA may institute.

8.6.5. In cases of assignment of the Contract or subcontract, the SUPPLIER

undertakes to obtain from the assignee or subcontractor, the prior acceptance of the obligations towards ENDESA in respect of the fulfilment of the contractual, legal, employment, confidentiality, security and health and safety conditions; the documentation accrediting the assignee’s or subcontractor’s acceptance of these conditions must be provided to ENDESA.

8.6.6. Accordingly, ENDESA may at any time inspect and oversee the works or

manufacturing process of the assignee or subcontractor, to ensure that the



obligations are being met. The subcontractor or assignee will be obliged to provide ENDESA with all the assistance it may require for these purposes (documentation, reports, free access to its factories, workshops or installations, etc.).

8.6.7. ENDESA reserves the right to reject any of the subcontractors or assignees

that it deems inappropriate for the work or service at any time.

9. TRANSFER OF RIGHTS AND CREDITS

9.1. Unless the laws applicable to the jurisdiction corresponding to the Contract categorically state the contrary, the SUPPLIER may not assign or transfer, either in full or in part, the financial, commercial or economic rights or credits attaching to the SUPPLIER by virtue of the Contract, to any third party, or carry out any operation that would imply the disposal of any title, lien, commitment and/or transaction, total or partial, on the abovementioned rights and credits, unless ENDESA has previously authorised these operations in writing and expressly for each individual operation.

9.2. ENDESA may assign its payment collection rights or the payment obligations

resulting from the Contract to any of its affiliates, with the only requirement of providing the SUPPLIER with notice of the transfer.

10. GUARANTEED COMMITMENT AND FINANCIAL GUARRANTEE.

10.1. Guaranteed Commitment.

10.1.1. The SUPPLIER undertakes to guarantee ENDESA, for both the material and/or equipment purchase Contracts and the works and/or services Contracts, the fitness and exclusive ownership of the materials and equipment that are the subject of the actual Contract, as well as the industrial and intellectual property; in particular, the SUPPLIER guarantees:

a) That all the materials and pieces of equipment:

• Comply with the laws and fulfil the contractual obligations,

specifications and standards. • Are free of any defects, either apparent or hidden. • Are appropriate for the purpose or use for which they are intended. • Are of the required quality, and • Are not second-hand.

b) That the pieces of equipment will be free of any defects in the design,

materials, manufacturing process, functioning or performance. c) That all pieces of equipment will work perfectly throughout their useful life,

with the specified regularity, performance levels and capacities, and with all other specified features.



d) That the pieces of equipment and materials that are the subject of the

Contract will be free of charges and encumbrances and, in particular, not embargoed or in the process of being embargoed, or subject to any chattel mortgage, pledge without conveyance of possession, or any other charge or encumbrance related to intellectual or industrial property, or property of any other nature.

Unless the contrary is specified in the Contract, the SUPPLIER will likewise guarantee the transfer of the intellectual or industrial property necessary for the correct use of the supplied materials and equipment, as foreseen in law.

e) That the works or services will be supplied correctly, in accordance with

the plans and specifications and the standards and rules of good professional practice.

f) That the works or services supplied will be in perfect condition and the

installations set up will work perfectly and regularly.

g) The full and undisturbed possession of the licenses and permissions required if the materials include any form of software, either on its own or as a constituent part of any of the contracted works.

10.1.2. The warranty period for the materials and equipment and the contracted

works or services and the Commitment outlined above will last for the period specified in the Contract, or, if this is not specified in the Contract, for the period of one (1) year as of the date of the Provisional Acceptance Certificate; if this Certificate is not issued, the one-year period will begin as of ENDESA’S acceptance of the delivery of the material or the notification of the completion of the contracted works or service and the delivery of the SUPPLIER’S documentation for the processing of the administrative authorisation to commission the works, where applicable.

10.1.3. The Guaranteed Commitment will not cover any damage or breakdowns

caused by ENDESA’S bad operation or inappropriate use of the delivered elements, if they can be accredited as such, unless they resulted from incorrect or unclear instructions or manuals provided by the SUPPLIER.

10.1.4. In order to fulfil the Guaranteed Commitment, the SUPPLIER is obliged:

a) To replace, as soon as possible or in the period specified in the

Contract, the materials and pieces of equipment that do not fulfil the agreed or demanded conditions or that are inappropriate or of deficient quality. These pieces of equipment and materials may be kept in storage by ENDESA until they are replaced, on the understanding that ENDESA has the right to use the rejected materials until such time as the new materials are supplied.



b) To adjust, repair or replace the equipment with any defects in the design, materials, execution methods, functioning or performance.

c) To replace all the materials and pieces of equipment supplied or

provided by the SUPPLIER when serial defects are discovered, and to justify the solution applied to ensure that said defects do not reoccur in the rest of the materials or equipment pending delivery. The existence of serial defects will be established when the percentage of defective equipment and materials exceeds the percentage established in the Contract or, if not expressly established, 10% of the total.

d) To rectify and resolve any element that was badly executed and/or

reconstruct or reassemble the element in question, or replace the service.

e) To return any equipment belonging to ENDESA and made available to

the SUPPLIER in the same condition as it was in when provided.

f) To keep ENDESA free and harmless from any third party claims.

10.1.5. All the obligations established in the preceding section will be fulfilled by the SUPPLIER at its own exclusive expense and account, and will not represent any form of cost or disbursement for ENDESA; the SUPPLIER will likewise pay the costs incurred as a result of the obligation to fulfil the guarantee, such as: demolition and disassembly, construction, insurance, transport and packaging for returned materials and for the replacement materials, projects, licenses and permits, assemblies and supervision, taxes, duties and similar.

10.1.6. The decision to proceed with the rectification, correction or repair or to a

completely new execution, construction or assembly of a defective part of whole, as foreseen in section 10.1.4, will be made by ENDESA, which may demand, for justified reasons, the adjustments, corrections and repairs or provisional replacements, the costs of which will be met by the SUPPLIER, until the definitive repairs or new constructions and assemblies have been provided, which must be notified reliably and in writing to the SUPPLIER.

10.1.7. In any case, the adjustments, corrections, repairs or replacements and the

new constructions, assemblies works or services must be provided by the SUPPLIER as soon as possible, so as to cause the least disturbance possible to ENDESA and without causing any delays in the works, interruptions in the installations or, if this is not possible, reducing said delays or total or partial interruptions in the installations to all possible extent.

10.1.8. If the SUPPLIER fails to fulfil the Guaranteed Commitment or does not act as

expected under its terms and in the agreed timeframe, ENDESA may proceed with the repairs/replacements itself or with the assistance of any third parties, with the resulting costs paid by the SUPPLIER. In addition, the SUPPLIER will be obliged to indemnify ENDESA for any damage or loss caused.



10.1.9. The period of the Guaranteed Commitment will be interrupted on the date on

which the ENDESA decision is effectively notified to the SUPPLIER in accordance with the contents of clause 16.1.6 above and will be renewed subsequently for the period of time that it takes to carry out the repairs, replacements or new constructions, assemblies or works, in fulfilment of the Guaranteed Commitment.

10.1.10. These repairs, replacements or new constructions, assemblies or works will

be guaranteed in turn by the SUPPLIER, as of their completion, for a period equal to that of the Guaranteed Commitment.

10.1.11. If upon expiry of the Warranty Period, at least six (6) months have not

elapsed since the commissioning of ENDESA’S main installation for which the element is intended or that forms part of the subject of the Contract, the Warranty Period will be automatically renewed until those six (6) months have elapsed, unless the materials or equipment provided by the SUPPLIER have required repairs or replacements, in which case, the warranty period will be as established in clause 10.1.10.

10.1.12. Once the Warranty Period has elapsed with satisfactory results or with all the

anomalies, faults or deficiencies occurring or discovered during the period being resolved, the Final Acceptance Certificate will be signed, if the Provisional Certificate was formalised previously, and the sums of the financial guarantees established will be cancelled and returned.

10.1.13. The total or partial application of the Guaranteed Commitment, the

termination of the Warranty Period or even the Final Acceptance and Handover of the materials that are the subject of the Contract, will not release the SUPPLIER from its eventual liability for faults or hidden defects or any other liability attributable to the SUPPLIER by Law.

10.1.14. Once the Warranty Period has elapsed and the Final Acceptance and

Handover has taken place, ENDESA may proceed, for its own exclusive benefit and directly at its own account or with the assistance of third parties, to freely modify or alter the materials and pieces of equipment that are the subject of the Contract or the constructions or installations assembled, even if they are subject to licenses, patents or other forms of industrial property in the name of the SUPPLIER, although ENDESA will be subject to the corresponding confidentiality clauses attaching to these elements.

10.2. Financial Guarantee.

10.2.1. The SUPPLIER will establish, unless the contrary is agreed in the Contract, a financial guarantee made available to ENDESA at a minimum of 10% of the total value of the Contract and its modifications, extensions and cost-plus works, to guarantee the fulfillment of all the obligations deriving from the Contract, including any indemnities or fines that must be paid by the SUPPLIER.



10.2.2. The guarantee will be established and managed in the manner and with the characteristics described in the Annexes, which will vary according to the country in which the ENDESA affiliate signing the Contract is based.

10.2.3. The costs incurred in establishing the financial guarantee will be paid by the

SUPPLIER.

10.2.4. The establishment of a guarantee will not imply any limitation on the sums or enforcement periods of the liabilities that may attach to the SUPPLIER by virtue of the Contract, and will only constitute one form of ensuring the effectiveness of the guarantees.

10.2.5. If the total value of the Contract increases during the execution, the

SUPPLIER will be obliged to provide ENDESA with an additional financial guarantee, with the same requirements described above, equal to 10% of the increased value of the Contract, within fifteen (15) calendar days as of the date on which the increase is formalised.

11. FINES AND SANCTIONS.

11.1. Notwithstanding the contents of section 12.3 on the Rescission of the Contract for causes attributable to the SUPPLIER, the SUPPLIER’S failure to fulfil the delivery deadlines or the partial and final execution periods, as well as any other deadlines expressly foreseen in the Contract or in these General Terms and Conditions, will result in the application of a fine by ENDESA, which will not be considered an, or part of an, indemnity.

If no extension or new period is established, the fine will be equal to 1.5% of the Total Contract Value per calendar week of delay, during the first four weeks, and equal to 4% from the fifth week.

11.2. ENDESA may return the sums of the fines that may have been imposed, if the SUPPLIER recovers or offsets the delays in the partial periods of execution or deadlines, after deducting the greater costs and expenses that the offset delays have incurred for ENDESA.

11.3. The sanctions and fines for delays may not exceed 15% of the Total Contract

Value. If this limit is exceeded, ENDESA will have the right to rescind the Contract in accordance with the applicable legislation.

11.4. The collection of the fines will not imply any limitation on ENDESA’S right to

charge the costs and extraordinary expenses that it is obliged to pay to third parties as a direct consequence of the delays in question, to the SUPPLIER.

If during the warranty period, ENDESA finds it is unable to use or avail itself of the contracted materials or equipment, or the works performed or installations set up, due to defects, damage or faults that have occurred or been discovered during the period, which are not attributable to ENDESA, or which are deficiencies in the execution or works necessary to resolve these in fulfilment of



the Guaranteed Commitment, the SUPPLIER will be sanctioned with the fine established for this purpose in the Contract, or, if this is not expressly established in the Contract, a fine of 0.1% of the Total Contract Value for each calendar day during which the elements are not available or cannot be used.

11.5. The application of the established fines will not release the SUPPLIER from the

obligation of providing the Guaranteed Commitment to its full extent. Consequently, the SUPPLIER will be obliged to eliminate any technical deficiencies discovered; to pay the corresponding fines; and to replace the materials and equipment, or repeat or recommence the works or services that are the subject of the Contract, as applicable, at ENDESA’S request.

11.6. The failure to apply one or any of the established fines will not imply ENDESA’S

waiver of its right to impose these fines at a subsequent time.

11.7. The procedure for collecting the payment of any fine derived from the Contract will be implemented as described in this section.

ENDESA will notify the SUPPLIER of the fine that must be paid, stating the sum of the fine and the reasons for its imposition, in writing. The SUPPLIER will have a period of fifteen (15) calendar days as of the date of notification in which to register any objections it may wish to raise.

Once this period has elapsed, if ENDESA does not accept the arguments on which the SUPPLIER bases its objections, it will issue the corresponding invoice, which must be paid by the SUPPLIER in a period of no more than ten (10) calendar days. If the SUPPLIER does not make the corresponding payment in this timeframe, ENDESA may subtract the sum corresponding to the fine from the SUPPLIER’S invoices that are still pending payment until the fine is covered, or take the sum from the financial guarantees established under the Contract, or attempt to collect payment for the fine through any other means foreseen in the Contract, in Law or in these General Terms and Conditions, notwithstanding ENDESA’S right to seek indemnity for damage and/or loss through any means.

If the financial guarantee is executed, the SUPPLIER will be obliged to reinstate the guarantee to its level prior to the execution, in accordance with the contents of clause 10.2.

Until this reinstatement takes place, ENDESA will keep possession of the sum remaining after subtracting the value of the fine from the total value of the guarantee.

If the sum of the initial guarantee is insufficient to cover the sum of the fines, ENDESA will offset the sums from the payments pending to cover the total value of the fines, notwithstanding the reinstatement of the guarantee in accordance with the above.

12. SUSPENSION AND RESCISSION.



12.1. Suspension.

If, for any cause, ENDESA deems it necessary or is forced to instigate the temporary, total or partial suspension of the Contract, it shall notify the SUPPLIER in writing, explaining the cause and its estimate of the duration of the temporary suspension, at which point the corresponding work or delivery of materials will be interrupted immediately. The SUPPLIER will be entitled to received payment for the work or deliveries already performed, with the payment conditions and prices agreed in the respective Contract. The payment corresponding to any part of the work or delivery that is already at an advanced stage at the time of the notification, will be negotiated by the Parties in a fair and reasonable manner; if the Parties cannot reach an agreement in this manner, the conflict resolution method foreseen in these General Terms and Conditions will apply.

12.2. Rescission by the SUPPLIER.

12.2.1. The SUPPLIER may call for the rescission of the Contract by means of a written notification explaining the reasons for the rescission sent to ENDESA, with sufficient notice, appropriate for the specific characteristics and stage of development of the Contract. The Parties must reach a mutual agreement on the conditions for rescinding the Contract, with the corresponding settlement which will include the indemnities for damage and loss caused to ENDESA, which can be reliably determined at that point, notwithstanding other indemnities deriving from damage or loss caused to ENDESA that may be discovered subsequently.

12.3. Rescission for causes attributable to the SUPPLIER.

12.3.1. ENDESA may rescind the Contract in all cases foreseen for this action by

Law or when any of the following causes impedes or affects to a significant extent the appropriate fulfillment completion of the Contract:

a) The death of the SUPPLIER or modified circumstances affecting its

capacity to work or its physical or psychological condition, which impede, alter or modify the fulfillment of the Contract in any substantial form, when the SUPPLIER is a natural person.

b) The dissolution, transformation, reduction of capital or important

changes in the decision-making bodies or the shareholder structure of the SUPPLIER, if these changes can negatively affect the execution of the Contract or conflict with the provisions of section 22.

c) The reduction of the SUPPLIER’S economic solvency or financial

capacity, or the appearance of legal, economic or financial difficulties, or difficulties of any nature that may affect the normal fulfillment of the legal or contractual obligations assumed by the SUPPLIER.



d) The SUPPLIER’S withdrawal from, interruption or cancellation of the fulfillment of the Contract.

e) Delays, without any justified cause, by the SUPPLIER in delivering the

materials or equipment or in meeting the deadlines for the execution of the contracted works or services, exceeding half of one partial delivery period or exceeding a third of the total delivery period, or the failure to meet the essential delivery deadlines for the appropriate implementation of the Contract.

f) The SUPPLIER’S inability to obtain the certificates and official

endorsements required for its products or services under the terms of the Contract, or its loss of these permits during the Contract period.

g) The SUPPLIER’S effective inability to resolve any eventual breaches of

the established technical conditions, the repetition of errors or defects or the failure to follow the instructions given by ENDESA

h) The SUPPLIER’S failure to fulfill the obligations established by Law

and, especially employment, social security, health and safety, environment and tax laws in respect of its personnel, especially when its activities are performed either in full or in part, at the installations of ENDESA or any of its clients.

i) The failure to fulfill the obligations with regard to the treatment of

personal data, as established in the current laws applying to each Contract and in section 15 of these General Terms and Conditions.

j) If any of the information provided by the SUPPLIER on the fulfillment of

the legal, economic, financial, technical or contractual conditions is revealed to be false, after the Contract has been signed.

k) Any other breach by the SUPPLIER that may impede or negatively

affect the proper conclusion of the Contract to a substantial extent, or that is identified in the Contract or in these General Terms and Conditions as sufficient grounds for the rescission, such as exceeding the maximum fines established in the same or the SUPPLIER’S incurring of any of the disqualifications or conflicts described in these General Terms and Conditions.

12.3.2. In the event of any of the preceding causes, ENDESA may decide to rescind

the Contract and render it void as of the date on which it declares and notifies this to the SUPPLIER or, if applicable, its assignees or transferees, or demand that the assignees or transferees fulfill the contract, notwithstanding the indemnities for damage or loss that ENDESA may seek.

12.3.3. In the event of the rescission of the Contract due to a cause attributable to

the SUPPLIER, ENDESA will have the right, but not the obligation, to purchase all or some of the materials that the SUPPLIER has in storage or in partial or complete production or that have already been delivered, at the



prices foreseen in the Contract or, if no prices were established, at the prices negotiated by mutual agreement for the purchase or, if this is not possible, at the value determined by an independent surveyor.

12.3.4. In all the cases outlined above, ENDESA may, without prejudice to the

collection of the corresponding fines or to the lawsuits ENDESA may pursue to defend its interests and especially seek indemnities for any loss or damage, implement all or some of the following measures:

a. Withhold or suspend its pending payments to the SUPPLIER. b. Execute any financial guarantees established by the SUPPLIER.

12.4. Rescission by ENDESA.

12.4.1. ENDESA may rescind the Contract through a reliable notification to this effect

to the SUPPLIER. In such a case, ENDESA will indemnify the SUPPLIER for any direct damage or loss effectively caused.

12.4.2. The SUPPLIER must accredit the existence of the damage or loss suffered

by the SUPPLIER to ENDESA satisfaction and the corresponding indemnity will be mutually agreed by the Parties or, if this is not possible, established by an independent loss adjuster.

12.4.3. Once the notification of the rescission of the Contract has been received from

ENDESA, the SUPPLIER will immediately discontinue its work and will only carry out what is necessary to preserve and protect what has already been built/performed, and proceed with its delivery to ENDESA.

13. INDUSTRIAL AND INTELLECTUAL PROPERTY.

13.1. The SUPPLIER guarantees to ENDESA and is obliged to substantiate with documents if ENDESA demands this, that it has the trademarks and industrial and intellectual property rights to the invention patents, utility models, industrial designs or the corresponding licenses to the rights as well as the mandatory permits for its activities, when the activities that are the subject of the Contract require a special permit, and that none of these rights, records or licenses infringe any third party rights.

If the SUPPLIER has any of the licenses or permits mentioned in the preceding paragraph, they must be registered with the corresponding Registry; ENDESA reserves the right to demand the documents substantiating their registration from the SUPPLIER.

13.2. The SUPPLIER will be responsible for obtaining any assignments, permits, licenses and authorisation that are necessary from the holders of the rights to the corresponding patents, models and trademarks, as well as the intellectual property rights; the SUPPLIER will pay any costs associated to these rights and compensations.



13.3. If ENDESA receives a claim or lawsuit from any third party due to the SUPPLIER’S breach of any of the obligations referred to in the preceding sections, the SUPPLIER will be obliged, at ENDESA request, to present a guarantee (in accordance with the provisions of point 10.2) sufficient to cover the value of the claim or lawsuit received by ENDESA, within a period of no more than ten (10) calendar days.

13.4. The SUPPLIER will hold ENDESA free and harmless from any liability for

violations of industrial or intellectual property rights that the SUPPLIER may have committed, and undertakes to take all necessary measures to ensure that ENDESA is exempt and released from any claims or lawsuits that may be instigated against ENDESA for the abovementioned violations, and to ensure that the payments for any patents, licenses or rights that are necessary are paid exclusively by the SUPPLIER, and to indemnify ENDESA for any damage or loss suffered as a direct or indirect result of said claims or lawsuits.

Any in-court or out-of-court claim instigated by any third party against the SUPPLIER for violations of intellectual or industrial property rights must be notified to ENDESA as soon as it is received.

13.5. All the documents, designs, plans, computer programmes and specifications, and

their copies, that ENDESA provides to the SUPPLIER for the execution of the works, as well as any inventions, patents, utility models and all other industrial property rights that have arisen or arise in the future from the documents delivered by ENDESA to the SUPPLIER for the execution of the work, will continue to belong to ENDESA; the SUPPLIER may only use them exclusively to implement the Contract and must return them upon completion of the same, maintaining at all times the appropriate precautions for the treatment, handling and transmission of the information, guaranteeing its security and confidentiality, in accordance with the provisions of section 14 and the legislation in force applicable to each Contract.

13.6. Likewise, the designs, documents, plans, computer programmes and

specifications, and their copies, generated during the execution of the Work on the basis of the SUPPLIER’S documentation and technology, including the inventions, patents, utility models and all other industrial or intellectual property rights, will continue to be the property of the SUPPLIER. However, the designs, documents, plans and computer programmes, and their copies, which have been delivered by the SUPPLIER in fulfilment of the Contract will become the property of ENDESA.

13.7. The industrial or intellectual property rights and the technologies and

methodologies resulting from the works or services provided by the SUPPLIER in fulfilment of the Contract, and the records or documents to which these may give rise, will correspond to ENDESA, without giving the SUPPLIER any right to increase the price established in the Contract for that particular work or service.

13.8. The mode in which the technology that is the subject of the Contract is

commercialised and disseminated to third parties and the profits that may result from such processes will be determined as expressly convened in the Contract.



14. CONFIDENTIALITY.

14.1. ENDESA and the SUPPLIER will treat all the information of any nature, whether verbal, written or extant in any other form or format, related to the Contract, as confidential and undertake to maintain its confidentiality and to not reveal or provide such information to any third parties or use it for any purpose other than that for which it is intended under the terms of the Contract, without the prior authorisation of the other Party in writing. The scope of this confidentiality clause even extends to the actual existence of the Contract, as well as its contents, the economic, financial, technical and strategic documentation, plans, information, procedures, patents, licenses and any other information that either of the Parties provides to the other for the execution of the Contract.

14.2. If ENDESA has authorised the assignment of the Contract or subcontracting to

any third party, the SUPPLIER must prepare and sign together with the subcontractor or assignee, a confidentiality agreement with the exact same terms as stated herein.

14.3. The Parties undertake to maintain the strictest confidentiality during the period

beginning with the Letter of Intent or Notice to Proceed or the signature of the Contract and ending five (5) years after the date of the Final Acceptance and Handover, except to the extent that is strictly necessary for the execution of the Contract, or when obliged by the Law or the official legal or administrative Authorities.

In the event of such an obligation, the Party obliged to provide the confidential information must notify the other Party of this circumstance immediately, so that the other may take all measures necessary for defending its rights. The Parties will reveal or include in their response to the Authorities, only the information that is strictly legally required and will make every effort possible to obtain a reliable statement from the Authority requiring the information, establishing that it will be treated as confidential information.

14.4. The Parties will agree on the content, the media and the date of publication of

any press release, public notification or communication of any type regarding the existence of the actual Contract or any matters related to the Contract.

14.5. The confidentiality clause does not apply to the information available in the public

domain before the Contract was signed, or that becomes public after the signature of the Contract without either of the Parties breaching their contractual confidentiality obligations.

14.6. The SUPPLIER will be liable for confidential treatment of all the information and

documentation identified as such in these General Terms and Conditions by its shareholders, directors, employees, assessors and subcontractors that have access to the same; ENDESA reserves its right to instigate the appropriate legal proceedings to defend its interests in respect of any breach of confidentiality.



15. TREATMENT OF PERSONAL DATA.

15.1. Both ENDESA and the SUPPLIER undertake to comply with all the applicable laws on the protection and treatment of personal data, as well as the provisions established in the annexes, which will depend on the country in which the ENDESA affiliate signing the Contract is based.

16. INSURANCE.

16.1. The SUPPLIER undertakes to obtain, at its own expense, sufficient insurance coverage for the risk exposure in question, with insurers of recognised standing and solvency, throughout the Contract period, in respect of the following risks:

a) Any loss or damage affecting the materials and pieces of equipment that

are the subject of the Contract, during all handling, loading, unloading and transport operations, until they are delivered to ENDESA at the agreed place and time; the SUPPLIER will be fully responsible for any damage that may affect said materials or equipment. Likewise, the SUPPLIER assumes the same obligations in respect of the materials and equipment that ENDESA provides for the purposes of fulfilling the Contract, from the moment that they are made available to the SUPPLIER or its subcontractor, until they are returned to ENDESA.

If the Contract is for materials consigned to the SUPPLIER at ENDESA’S installations, the SUPPLIER must contract, apart from the insurance policies described above, insurance for theft or other damage that the stored materials may suffer, for the whole of the Contract period.

b) The general liability for loss or damage that may be caused by the

SUPPLIER or its personnel or subcontractors, to the employees or property of ENDESA and/or any third parties, deriving from the operations performed to delivery the materials or equipment or any of those that are the subject of the Contract; ENDESA will be exempt of any liability in this sense, whatsoever the cause.

c) The SUPPLIER likewise undertakes to obtain General Liability Insurance

with coverage and indemnity limits proportionate to the risk exposure, to cover any claims for material damage, personal injuries and/or financial losses, that may be caused to ENDESA or other third parties, as a result of a defect or defective functioning of the supplied materials or equipment, attributable to the SUPPLIER.

16.2. The insurance policies described in the preceding sections must expressly state

that the insurers will pay any indemnities that may arise from loss or damage directly to ENDESA.

16.3. If, in ENDESA’S opinion, the insurance cover of the policies obtained by the

SUPPLIER in accordance with the preceding sections is insufficient in respect of the risk exposure of the materials or equipment delivered or the works or services



provided under the Contract, the SUPPLIER undertakes to revise and modify the policies as required and in accordance with the conditions of the insurance market.

16.4. The SUPPLIER must provide to ENDESA the documents substantiating the

contracting and effectiveness of the insurance required under the preceding sections, throughout the period of the individual Contract in question.

16.5. Likewise, the SUPPLIER undertakes to contract, at its own expense and with

insurers of recognised standing and solvency and throughout the Contract period, any other insurance that is obligatory under the terms of the Law, Employment Regulations or Working Agreements, such as Vehicle Insurance or Personal Life or Accident Insurance.

17. LIABILITY.

17.1. The SUPPLIER will be solely liable towards ENDESA for the correct implementation of the Contract. This liability will be indivisible and may not be delegated to the subcontractors employed by the SUPPLIER for the purposes of the Contract, always with the authorisation of ENDESA.

17.2. The SUPPLIER will be liable for the strict fulfilment of its legal, tax and

contractual obligations towards its suppliers and subcontractors; likewise, the SUPPLIER is liable for and guarantees that the materials and equipment delivered or provided for the purposes of fulfilling the Contract, belong to the SUPPLIER and the SUPPLIER can freely use and dispose of such elements and they are free of any charges or encumbrances in the name of any third parties.

17.3. When the SUPPLIER in question consists of two or more natural or legal

persons, or a group of such persons, each and every one of the persons will be jointly and severally liable and obliged to fulfil the Contract, and will likewise be jointly and severally liable for the obligations established in these General Terms and Conditions.

17.4. The SUPPLIER is obliged to avoid situations that may create conflicts of interest

and must therefore take all reasonable measures to detect their existence, undertaking to notify ENDESA immediately of any circumstance that may give rise to such conflicts.

18. EMPLOYMENT LAW, SOCIAL SECURITY AND HEALTH AND SAFETY OBLIGATIONS.

18.1. The SUPPLIER declares that it is aware of its obligations in terms of employment

laws, social security, health and safety and the prevention or risks in the workplace, and undertakes to comply with all applicable legislation in this sense. In particular, the SUPPLIER is obliged to fulfil all the obligations and conditions in this sense included in the Annexes, which will depend on the country in which the ENDESA affiliate signing the Contract is based.



18.2. The SUPPLIER will organise its personnel appointed to the implementation of the

Contract in such a way that each of their responsibilities and lines of action are clearly defined and separated from those of ENDESA.

18.3. All personnel assigned to the implementation of the Contract must have the

appropriate specialised training for the works that are the subject of the contract, as well as the training and information required in terms of the prevention of risks in the workplace

18.4. Supplier’s obligations.

Throughout the Contract period, the SUPPLIER undertakes to:

a. Implement the Contract in accordance with all the provisions established

therein, as well as all the applicable laws, clauses, regulations, technical standards and instructions issued by the corresponding Authorities, in force at any time during the implementation of the Contract, assuming the relevant obligations and duties.

b. Guarantee that its personnel has been legally contracted, with the fulfilment

of the corresponding wage, tax and social security obligations foreseen in the law and the applicable Working Agreements.

c. Respect all the laws and regulations in force in respect of security, hygiene

and health and safety in the workplace

d. Take all measures necessary to allow ENDESA, or a third party appointed by ENDESA, to identify the SUPPLIER’S personnel.

e. Request express authorisation from ENDESA before subcontracting any part

of the Contract, always before the subcontracted works or activities begin, and in accordance with the terms established in clause 9 of these General Terms and Conditions.

f. Provide ENDESA with a nominal list of the employees assigned to the

implementation of the Contract, whether they are employed directly by the SUPPLIER or any subcontractor. The list must contain, at the least, the names and surnames and social security data of each of the employees. The document must be certified by the corresponding Authority.

The validity of the Contract is subject to the SUPPLIER’S delivery of all the documents stated in these General Terms and Conditions to ENDESA.

18.5. Fine in the event of breach of the health and safety requirements established as

per the Law and this Contract.

In the event that the SUPPLIER breaches the obligations established in the Contract and/or in any regulation, rule, or law on health and safety in the workplace, ENDESA may apply a fine of 300 Euros (or, if applicable, its



equivalent in the country in which the ENDESA affiliate signing the Contract is based) for each of the breaches, through a notification with an acknowledgement of receipt, provided no claims are received by ENDESA for a sum greater than this amount for the breach and notwithstanding ENDESA’S right to rescind the Contract.

By mutual agreement or as an alternative to the fine described above, ENDESA may at its sole discretion:

a. Cancel the execution of any activity under the Contract for a number of days,

depending on the severity of the breach and, in any case, after checking the effectiveness of the proposed corrective measures plan, without this implying any right for the SUPPLIER to extend the period for the implementation of the Contract or to obtain any remuneration or indemnity whatsoever.

b. Ask the SUPPLIER to organise an additional course in health and safety in

the workplace for the members of staff responsible for the breach.

If the sum of the fines for breaches of health and safety regulations exceeds 5% of the Total Contract Value, ENDESA will have the right to rescind the Contract in accordance with the applicable legislation.

18.6. Rescission of the Contract due to breach of health and safety requirements.

ENDESA may rescind the Contract if the SUPPLIER or its subcontractors, if applicable, breach any of the obligations established in the applicable laws and regulations on health and safety in the workplace, including any of the following:

a. Not filling-in and/or sending to ENDESA the health and safety documentation

in accordance with the provisions of the Contract and/or of any applicable health and safety regulation, standard or law.

b. Not fulfilling the safety plan or specific plan for the prevention of risks in the

workplace for the purposes of implementing the Contract, when this is required by Law or ENDESA.

c. The SUPPLIER using any non-qualified personnel or staff not authorised by

ENDESA during the implementation of the Contract.

d. Failing to fulfill the obligations in terms of the use of working equipment and individual protective equipment, of the safety norms or standards established for moving around the places where the Contracted works or services will be performed, of the health and safety alarm systems, of the handling of materials and equipment and of the provisions established in the Contract or the applicable legislation.

19. ENVIRONMENTAL PROTECTION.

19.1. Materials and/or Equipment.



19.1.1. The SUPPLIER undertakes to implement the appropriate measures to

guarantee the strictest compliance with the obligations corresponding to the SUPPLIER under the terms of all the applicable State, Autonomous Community, Regional, Provincial and Local environmental laws, especially with regard to the correct packaging and labelling of the supplied products (date of packaging, date or production, expiration date, etc), as well as the recyclable or returnable properties of chemical product containers, in the cases in which said products are considered hazardous compounds in the existing laws, notwithstanding any other legal development that may apply in the future in this regard, and to reinstate or replace any damage caused as a consequence of any breach of the applicable regulations in force .

19.1.2. The SUPPLIER undertakes to supply whenever possible, all the products

and materials environmentally labelled, and the products with a longer useful life, which cost less and do not create as much waste due to the product’s expiry date.

19.1.3. The SUPPLIER undertakes that the usable elements in its materials or

equipment will not be chemically unstable or contain carcinogens.

19.1.4. The SUPPLIER will respect the limitations established on the commercialisation of dangerous substances and compounds by law, as well as any other future legal modification in this regard. Particularly, the SUPPLIER will accredit the absence of PCBs in the oils used in the equipment, and the absence of CFCs, HCFCs, halons, etc, with commercial restrictions.

19.1.5. The SUPPLIER will be responsible for ensuring that the transportation

methods fulfil the provisions of the applicable laws.

19.1.6. The unloading of products or materials will take place in accordance with the appropriate procedures established to fulfil the laws applicable to the handling of hazardous substances in each jurisdiction.

19.1.7. Whenever possible and even when this is not obligatory by law, the

SUPPLIER will reuse or recycle the waste generated by its products or materials.

19.1.8. ENDESA reserves the right to monitor or oversee the SUPPLIER’S waste

management procedures to ensure they are correct.

19.1.9. The Contract may include the acquisitions of substances in the form of compounds or contained in other elements, including but not limited to:

• Insulating oil • Lubricating oil • Grease • Paint, ink (including Toners) and varnishes • Solvents



• Chemical products • Electric batteries • Gases (in bottles or equipment) • Fuels (diesel, fuel oil) • Laboratory reagents • Cleaning products If this is the case, the SUPPLIER must confirm that it has fulfilled all the legislation in force on the registering, evaluation, authorisation and restriction of chemical compounds and substances and provide the files and certificates on the safety and security, handling and storage of the substances or compounds that it supplies, in accordance with the applicable laws. The safety and security files must describe the uses to which the supplied substances and compounds will be put.

Likewise, the SUPPLIER undertakes to manage the packages used to supply the substances once they have been emptied, in accordance with the applicable legislation, undertaking in any case to remove them when ENDESA requests this and provides the packaging for this purpose; the SUPPLIER will be fully liable for fulfilling all the mandatory regulations on transportation, as described in previous clauses. The SUPPLIER will likewise be obliged to remove the packaging used for the transportation in the conditions and timeframes established in each Contract or, if these details are not specified, the SUPPLIER will remove the packaging from previous deliveries when making subsequent deliveries and ENDESA requests this.

19.1.10. The SUPPLIER of electronic equipment will fulfil the conditions established in

the applicable legislation in force. Special attention must be paid to electronic meters, computers and installations control equipment, which must be removed at the end of their useful lives by the SUPPLIER, which must establish the appropriate logistics to pick up the returnable supplies at no cost to ENDESA.



19.2. Works and/or Services.

19.2.1. The SUPPLIER must be aware of and follow all the applicable requirements

and laws, in order to perform the work.

19.2.2. The SUPPLIER will guarantee and, if necessary accredit, that the employees carrying out the work that is the subject of the Contract, have or receive the appropriate theoretical and practical training for the work, especially that required to guarantee the appropriate environmental activities and measures and reduce the risk of an incident with environmental effects. The training must cover the obligations derived from the Environmental Management System documents, should such a system be implemented or in the process of being implemented, as is usually the case in ENDESA’S different concerns.

19.2.3. The SUPPLIER will provide its employees with the measures necessary to

ensure that the work can be carried out in an Environmentally friendly manner. Likewise, the SUPPLIER undertakes to fulfil all the applicable legal requirements, as well as those deriving from the Environmental Management System, should there be one implemented in the installation that is the subject of the Contract.

19.2.4. The SUPPLIER will be liable for any environmental incident it causes, as a

result of the works; ENDESA reserves the right to pass on any claims or expenses incurred as a result of the SUPPLIER’S failure to fulfil its environmental obligations, to the SUPPLIER. The SUPPLIER must implement all appropriate measures to guarantee the strictest compliance with all environmental legislation, whether on the State, Autonomous Community, Regional, Provisional or Local level, that applied to the works, and will reinstate any damage caused as a consequence of any breach of the applicable regulations in force.

19.2.5. The SUPPLIER will prepare an environmental contingencies and risks

prevention plan for the works that will be performed, which must be provided to ENDESA when requested. To avoid any environmental incident, the SUPPLIER will implement the appropriate preventive measures to guarantee the fulfilment of the applicable regulations in force, as well as the standards of good environmental management practice, such as:

• Appropriate storage and handling of chemical products and toxic and

hazardous merchandise or waste, disposing of incompatible chemical products separately and avoiding waste materials mixing with each other.

• Putting up appropriate and clear signs in the areas that are

environmentally sensitive or containing waste with environmental effects.



• Preventing leaks, spills and contamination of grounds, inspection chambers or beds.

• Prohibiting its employees from lighting fires or leaving cleaning

procedures or works unattended.

• Preventing the emission of dust or other substances when transporting materials.

• The SUPPLIER must especially respect the prohibition of carrying out

any form of uncontrolled spilling or the abandonment of any type of waste in the area fenced off for the contracted works or services, which must be kept clean and tidy to all extent possible during each working shift and especially at the end of the shift, whilst fulfilling the specifications of the environmental procedures of the Environmental Management System, applicable to the work performed, if there is one implemented in the installations that are the subject of the Contract.

• In order to segregate each waste type appropriately, the SUPPLIER

must place a sufficient number of containers, with a lock and signs and in good condition, in the work area, when the works in question create waste, which must subsequently be managed appropriately, using an authorised waste management company and in accordance with the applicable legislation. When so requested, the SUPPLIER will provide ENDESA with copies of the waste disposal, management and transport documents, as applicable by law, as well as the permits and licenses of the waste managers and transporters used.

• Once all the contracted works or services have been provided, the

SUPPLIER must leave the working area clean and tidy and free from any remains, removing at the end of the work all the debris, packaging, containers, rubbish, scrap metal and any kind of waste, with all the removal, transport and authorised management operations at the SUPPLIER’S own cost and account.

• Likewise, the SUPPLIER will implement the appropriate measures to

guarantee the strict fulfilment of the environmental laws in force applicable to said work.

19.2.6. The SUPPLIER’S Foreman will be in charge of overseeing that the

procedures are followed and may appoint another person to carry out this task, after notifying the ENDESA technician in charge of supervising the work and providing the person’s identification details; the appointed person must follow any specific environmental instructions given by the ENDESA technician during the work.

19.2.7. The SUPPLIER undertakes to notify the ENDESA technician supervising the

work of any environmental incident occurring during the work immediately, and must present a written report on any such events and their causes.



19.2.8. In the event of an environmental incident, whatsoever the nature, the SUPPLIER undertakes to follow the instructions issued by the ENDESA technician supervising the work.

19.2.9. In the event of any breach of any of these clauses, the ENDESA technician

supervising the work may bring the works to a halt, in which case the SUPPLIER will pay for any losses caused, and in any case, the failure to fulfil the obligations regarding the maintenance of the work area will result in the deduction of the costs caused as a result, plus 10% of these costs for management expenses, from the SUPPLIER’S invoice.

19.2.10. The SUPPLIER agrees to apply these specifications in all the works or

services that it carries out in any ENDESA installation or in the installations of any third parties.

20. FORCE MAJEURE.

20.1. For each Contract, the definition given to “Force Majeure” in the legislation in force in the country in which the ENDESA affiliate signing the Contract is based, will apply.

20.2. Neither of the Parties will be considered liable for breaching any of their

obligations when the fulfilment of said obligations is delayed or made impossible due to causes of Force Majeure or Acts of Nature.

20.3. The SUPPLIER may not invoke the following as caused by Force Majeure:

a) Weather conditions or phenomena that could reasonably have been foreseen by an experienced SUPPLIER operating in the area, the negative consequences of which, therefore, could have been avoided either fully or partially.

b) Delays or deficiencies in the obtainment of materials or labour that occur despite the fact that they could have reasonably been foreseen or that could have been avoided or resolved before they occurred.

c) Delays caused by any of the SUPPLIER’S subcontractors, unless they in turn are the cause of Force Majeure.

d) Strikes by or conflicts with the SUPPLIER’S employees or subcontractors, unless they occur nationally or across the industry.

e) The local conditions in which the services will be provided must be known to the SUPPLIER at the time of the technical inspection.

20.4. The party affected by Force Majeure must notify the other as soon as possible and in no more than one (1) calendar day as of the moment at which the Party learns of the event. Likewise, all the documents substantiating the circumstances and an estimate of the time that the situation will last must be sent to the other Party in a maximum period of five (5) calendar days.



20.5. The Parties will be exempt from the fulfilment of the obligations affected by Force Majeure for the period that the situation lasts, without any consequences in terms of indemnities for the Parties. The contractual obligations not affected by Force Majeure will remain in force and will be fulfilled in the contractual timeframes in force before the event of Force Majeure occurred.

20.6. If the works are severely affected by the Force Majeure event and the Contract has to be suspended for more than one hundred and eighty (180) calendar days, or it is reliably established that the event makes it impossible to fulfil the purpose of the Contract, either of the Parties may request the rescission of the Contract.

20.7. Once the Force Majeure event is over, the Parties will agree either to extend the contractual timeframes or to implement the measures necessary to recover, in part or in full, the time lost, so as to fulfil the deadlines in question, if possible.

20.8. The Parties will take all reasonable measures available to them so that the execution of the obligations of the Contract that have stopped or slowed down can be continued in the best possible conditions and with the least possible delays, once the cause of Force Majeure no longer applies.

20.9. If the SUPPLIER has invoked a Force Majeure event as justification for the non-fulfilment of all or part of its contractual obligations and the event is subsequently found not to meet the criteria for Force Majeure, ENDESA may impose a fine equivalent to 0.5% of the value of the Contract on the SUPPLIER, notwithstanding any other indemnity that may apply for loss or damage.

21. TAXES.

21.1. The prices established in the Contract do not include taxes, duties and social security contributions. The taxes, duties and contributions resulting from the contracts, applicable in any of the jurisdictions in which the SUPPLIER of the good or service and/or the ENDESA affiliate signing the Contract is based, or in any other jurisdiction, will be paid, withheld or discounted from the price of each Contract, in accordance with the provisions of the applicable Law.

21.2. The Parties mutually agree to fulfil all the requirements and procedures and to deliver all the documents required for the appropriate settlement and payment of all taxes and invoice payments, and to enforce the similar withholdings and obligations resulting in accordance with the Laws in the jurisdiction of the legally responsible subsidiary, following at all times the guidelines established by the applicable Legislation in force. Likewise, the Parties undertake to cooperate in obtaining the exemptions and other tax benefits that may apply to the business in question. If ENDESA is unable to take the opportunity of benefiting from any tax exemption due to the lack of diligence of or any other cause attributable to the SUPPLIER, ENDESA may deduct the value of the benefit in question from the agreed price.



21.3. If there is an agreement for avoiding double taxation between the SUPPLIER’S country of residence and that of the ENDESA affiliate signing the Contract, and the SUPPLIER invokes the application of any regulation contained therein, the SUPPLIER must provide ENDESA with the corresponding residence certificate accrediting that the SUPPLIER is a resident for tax purposes in the country for the purposes of the provisions of the agreement in question, and the income tax status granted by the country in which the ENDESA affiliate signing the Contract is based, must be taken into account. Said certificate must be delivered together with the issued invoice and/or as soon as requested by ENDESA. These certificates are usually valid for one year as of their issue, unless the internal regulations of the country of residence of the ENDESA affiliate signing the Contract establishes a shorter period, and therefore, a new certificate must be provided when any previously delivered one expires.

21.4. If ENDESA is obliged to implement any form of tax withholding on its payments to the SUPPLIER, and if the SUPPLIER requests this, ENDESA will subsequently deliver the corresponding certificate of taxes withheld, which will state the sums paid and withheld.

21.5. When the materials or equipment are brought from abroad, the taxes will be paid as follows:

a) The SUPPLIER will pay all the taxes, charges and encumbrances of the country of origin of the merchandise and those applying in the countries it passes through until delivery at the destination, as well as the taxes that may apply in the destination country on the profits obtained from the corresponding sale.

b) ENDESA will pay the customs duties, tariffs and taxes on imports or equivalent in the destination country, as well as other official overhead expenses at customs for the materials or equipment that it imports.

21.6. When the materials or pieces of equipment are made nationally, the taxes will be paid by ENDESA or the SUPPLIER, as established in the legislation in force.

22. UNITED NATIONS GLOBAL COMPACT.

22.1. The SUPPLIER undertakes to implement and respect the full contents of the Principles of the Global Compact, in terms of ensuring that all its activities, whether carried out by its own employees or by subcontractors, are in line with said Principles.

22.2. The Principles of the Global Compact are as follows:

a) HUMAN RIGHTS.



One: Businesses must support and respect the protection of internationally proclaimed human rights within their sphere of influence.

Two: Businesses must ensure that they are not complicit in human rights abuses.

b) EMPLOYMENT.

Three: Businesses must uphold the freedom of association and the effective recognition of the right to collective bargaining.

Four: Businesses must uphold the elimination of all forms of forced and compulsory labour.

Five: Businesses must uphold the effective abolition of child labour

Six: Businesses must uphold the elimination of discrimination in employment and occupation.

c) ENVIRONMENT.

Seven: Businesses must support a precautionary approach to environmental challenges.

Eight: Businesses must undertake initiatives to promote environmental responsibility.

Nine: Businesses must encourage the development and diffusion of environmentally friendly technologies.

d) ANTI-CORRUPTION.

Ten: Businesses must work against corruption in all its forms, including extortion and bribery.

22.3. The SUPPLIER undertakes to fulfil all the applicable legislation in force related to the abovementioned principles and to immediately notify ENDESA of any situation in which these principles are found to be violated, and to provide a plan to resolve the situation in question.

22.4. During the Contract period, the SUPPLIER undertakes to allow ENDESA to check on the degree of fulfilment of the clauses in this section; ENDESA may require the rescission of the Contract, for causes attributable to the SUPPLIER, in cases in which it has sufficient and substantiated knowledge of the violation of any of the Principles stated above by the SUPPLIER or any of its subcontractors.

23. ETHICAL STANDARDS.

23.1. In its management of its business and its business relationships, ENDESA follows the principles established in the ethical standards and codes that oblige all its members to conduct themselves with integrity in their relationships with all



the SUPPLIERS that they associate with, constituting the basis from which to act in a socially responsible manner. ENDESA’S current Ethical Code is available on the Website www.endesa.es/Suppliers/Ethic Behaviour, and it applies to all the companies constituting the corporate group.

23.2. The SUPPLIER must be aware of these principles and promise to apply them or other equivalent ones in the management of its business.

24. APPLICABLE LAWS AND CONFLICT RESOLUTION.

The provisions contained in the Annexes, which will depend on the country in which the ENDESA affiliate signing the Contract is based, will apply.

Endesa - General Contracting Terms and Conditions · ENDESA, through a hedging instrument accepted...

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