HomeMy WebLinkAboutResolution - 2002-R0249 - Contract For LP&L Cooke Boiler Modifications - Applied Utillity Systems - 06_26_2002Resolution No. 2002-RO249
June 26, 2002
Item No. 33
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK
THAT the Mayor of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock, a Contract for LP&L
Cooke Boiler #1 modifications, by and between the City of Lubbock and Applied
Utility Systems, Inc. of Irvine, California, and related documents. Said Contract is
attached hereto and incorporated in this resolution as if fully set forth herein and shall
be included in the minutes of the City Council.
Passed by the City Council this 26th day of June .ram , 2002.
MARC MCDGAL, MAYOR
ATTEST:
Reb cca Garza, City Secretary
APPROVED AS TO CONTENT:
LL'al K-D, .0
Victor Kilman, chasing Manager
APPROVED AS TO FORM:
William de Haas
Contract Manager/Attorney
gslccdocs/Contract-LP&L Cooke Boiler #] Mod. res
June 14, 2002
CONTRACT
This Contract dated as of June 26, 2002, is entered into by and between Applied Utility
Systems, Inc. ("Seller") and City of Lubbock ("Buyer"). This Contract covers the supply of those
items of equipment and related services more particularly described below.
SECTION 1 - SCOPE OF WORK
Seller shall furnish to Buyer the goods and services set forth in the Description of Products and
F 1 Services attached hereto as Attachment 1 (the "Description of Products and Services"). The
1 Description of Products and Services identifies all goods and services to be provided by Seller
under this Contract. The delivery or provision of such goods and services shall sometimes be
J
referred to herein as the "Work" or the "Scope of Work". Items not included in the "Description of
Products and Services" are not part of Seller's scope of work.
The Work shall be furnished in accordance with the "General Terms and Conditions" attached
hereto as Attachment 2 and in accordance with the other provisions of this Contract.
SECTION 2 - PURCHASE PRICE
In consideration of Seller's performance of the Work, Buyer shall pay Seller the sum of Two
Hundred and Fifteen Thousand Two Hundred and 00/100 Dollars ($215,200.00) (the "Purchase
Price"). The Work shall be completed at the time and in the manner provided for in this
Contract.
SECTION 3 - PAYMENT TERMS
Payment of the Purchase Price shall be in accordance with the Project Payment Schedule
attached hereto as Attachment 3. Invoices issued by Seller and conforming to the requirements
of this Contract shall be paid prior to thirty (30) days after the date of the same. Invoices shall
be sent to Buyer by e-mail or facsimile, at the e-mail address or facsimile number shown below
Buyer's signature on this Contract or to such other address or number as may from time to time
be specified by Buyer, and shall be deemed received by Buyer on the date sent. Buyer shall
make payment by wiring funds to Seller's account in compliance with wiring instructions from
time to time provided by Seller. Payments rendered after 30 days of the invoice date shall
include an interest charge of ten percent (10%) per annum on all amounts paid.
SECTION 4 - TIME OF PERFORMANCE; DELIVERY
The deadline for delivery of the various items of equipment covered by this Contract and the
performance of the services required of Seller shall be as set forth in the Project Milestones
Schedule attached hereto as Attachment 4.
SECTION 5 — CANCELLATION FOR CONVENIENCE
Buyer shall have the right to cancel this Contract at any time for convenience by delivering to
Seller written notice of Buyer's election to cancel and at the same time wiring to Seller funds
equal to the applicable "Cancellation Charge." The amount of the Cancellation Charge shall
2WOO-061202
depend on the time of cancellation and shall be determined in accordance with the provisions of
Attachment 5. Payment of the Cancellation Charge shall release Buyer from any further
obligations hereunder to Seller. The parties hereby acknowledge that Seller will suffer
substantial damage in the event of cancellation, the amount of which will be difficult if not
impossible to determine. The Cancellation Charge represents a good faith determination of the
damages that will be sustained. The foregoing right of cancellation shall be in addition to any
termination rights provided for in the General Terms and Conditions.
SECTION 6 - SHIPPING TERMS
' All prices are F.O.B. Buyer's facility, located in Lubbock, Texas, unless otherwise agreed.
Method and route of shipment are at Seller's discretion, but shall be limited to truck delivery. All
shipments shall be insured at Seller's expense and made at Seller's risk.
SECTION 7 - MANUALS AND OTHER DOCUMENTATION
The items to be delivered under this Contract shall include four (4) copies of the operation and
maintenance manuals and three (3) copies of the engineering submittals provided for in the
Scope of Work, all of which shall be delivered by Seller to Buyer at the time specified in the
Project Milestones Schedule and in the manner specified in Section 6 of this Contract. If within
five (5) working days Buyer does not disapprove any of Seller's engineering submittals, Buyer
shall be conclusively deemed to have approved such submittals and Seller shall have the right
to proceed with the completion of the Work. Review and approval of submittals by Buyer shall
not relieve Seller of its obligations to perform the Work in accordance with the requirements of
this Contract.
SECTION 8 - START-UP SERVICE AND TRAINING
The Purchase Price covers up to eighty (80) man-hours of site attendance for start-up, set-up,
adjustment, testing, tuning and training. Should Seller's field service engineer be asked by
Buyer to be on standby for any reason, such time shall be charged in accordance with Seller's
field service rates. Additional field services requested by Buyer shall be charged by Seller on a
time and material basis at the applicable Seller's field service rates. Seller's field service rates
for the year 2002 are set forth in Attachment 6. Seller shall honor these rates for work
performed under this Contract in the year 2002 or 2003, but for any services provided
thereafter, Buyer shall be charged in accordance with Seller's field service rates then in effect.
SECTION 9 - ATTACHMENTS
The following documents are attached to this Contract and are incorporated into and made a
part of the Contract by this reference:
Attachment 1
Description of Products and Services
Attachment 2
General Terms and Conditions
Attachment 3
Project Payment Schedule
Attachment 4
Project Milestones Schedule
Attachment 5
Cancellation Charge
Attachment 6
Seller's Field Service Rates
Executed by Buyer and Seller on the year and date set forth opposite their signatures below.
Dated June 26, 2002 Dated June 26, 2002
APPLIED UTILITY SYSTEMS, INC. CITY OF LUBBOCK TE)
John Landry, President Marc McDougal, AYOR
Attest:
By--'�
Rebecca Garza, City Secretary
Approved As To Content:
BYR'ir _
Gary Davis
Riertt Production Superintendent
E trl��L
Approved As To Form:
William de Haas
Contract Manager/Attorney
3 :ORO-06IW2
ATTACHMENT 1
DESCRIPTION OF PRODUCTS AND SERVICES
1.0 TECHNICAL APPROACH
The Seller proposes to meet the performance guarantee by modifying the existing burners. Specifically, the Seller
will replace the existing center section of the burners with a new VEM dual fuel staged air burner. The new VEM
burners will be supplied complete with the following items:
• Mounting plate.
• Oil gun housing tube.
Six (6) equi-spaced gas pokers
Concentric gas supply tube with 4" inlet connection
Swirler.
• Primary air tube.
• Air slide assembly to enable primary air to be adjusted and set during commissioning.
• Nuts, bolts and gaskets required for assembly.
All six burners can be removed without having to first enter the boiler windbox.
The design is compatible with the existing burner throat, actuated air register, oil gun, oil gun coupling block,
flame scanners, igniter and Burner Management System (BMS). The revised burner arrangement is shown in
Figure 1.
In addition to burner modifications, Seller has also included its fuel biasing technology to enable the distribution of
the natural gas to each burner to be optimized. Fuel biasing is an effective NO, control measure that requires no
operator intervention. It is implemented by installing biasing valves on each burner of the top burner elevation
with a pressure gauge located on each burner (including the lower row burners) to provide an indication of the
degree of biasing.
Fuel biasing is achieved by partially closing the biasing valves during commissioning, thereby reducing fuel flow to
l upper burners. Since the amount of combustion air supplied to the burner remains the same, reducing the supply
J of fuel to a burner causes this burner to operate fuel -lean. Fuel not supplied through the biased burner is
redistributed to the other firing burners.
I The fuel biasing valves will decrease the liberation of the upper burners and increase the liberation of the lower
J burners. This causes the top burner elevation(s) to operate fuel -lean, while the bottom burners operate fuel -rich.
The increase in NO., emissions caused by the operation of the top burner elevation(s) fuel -lean is more than offset
by operating the bottom burner elevations fuel -rich, providing the net effect of a substantial reduction in overall
NO, emissions.
2.0 SCOPE OF SUPPLY AND CLARIFICATIONS
J Seller is providing Buyer with a complete turnkey solution that includes project management, design, supply,
delivery, installation, start-up and testing. Seller's scope of supply is detailed in Table 1. The installation scope is
further described in Table 2. Applicable clarifications are given in Table 3.
TABLE 1: SCOPE OF SUPPLY
Item No. oty Description
1 6
AUS VEM dual fuel staged air burner, each complete with:
❑ Mounting plate.
r
❑ Oil gun housing tube.
❑ Six (6) equi-spaced gas pokers
❑ Concentric gas supply tube with 4" inlet connection
l
❑ Swirler.
❑ Primary air tube.
❑ Air slide assembly to enable primary air to be adjusted and set during
commissioning.
❑ Nuts„ bolts and gaskets required for assembly
Design is compatible with the existing burner throat, air register, oil gun,
C.'I
oil gun coupling block, flame scanners, igniter and BMS.
2 3
Biasing valve. One valve will be fitted in the gas line to each of the three
upper burners to allow gas flow to be biased to the lower burners. Valve
position will be adjusted and set during commissioning. Biasing valve will
be a 4" Class 150 flanged ball valve.
3 6
Pressure gauge. One gauge will be fitted in the gas line to each of the six
-;
burners to enable accurate adjustment and optimization of the burner
biasing. Each gauge supplied complete with root valve to isolation.
4 1-lot
Project management to interface with Buyer, suppliers and sub-
contractors.
5 1-lot
Preparation of manufacturing and installation drawings required to
complete Buyer's scope of work. Including submission of approval
6 1-lot
drawings, "for construction" drawings and "as -built" drawings.
Preparation and supply of 4 manuals to provide operation and
maintenance details.
7 1-lot
8 1-lot
Inland packing and delivery of equipment to the job -site.
Installation of Seller supplied equipment, as detailed in Table 2, including
necessary supervision of site work.
9 1-lot
Start-up and testing of Seller supplied equipment, including training of
Lubbock personnel. A total of 80 hours has been included for start-up,
set-up, adjustment, testing, tuning and training. Additional hours would be
charged on a time -and -material basis.
5 M800-06120
TABLE 2: INSTALLATION SCOPE
Item No. Description
1 Before proceeding:
• Ensure all lines are clear of combustible gas and liquids,
• Ensure windbox and furnace are clear of combustible gas and liquids,
• Ensure that boiler has cooled to safe levels,
• Ensure that all electrical supplies to the burner front are de -energized.
2 Follow client work rules and safety requirements.
3 Protect adjacent items as necessary to prevent damage.
4 Take all precautions necessary to avoid disturbing existing asbestos insulation. Buyer
advises that existing insulation contains asbestos. Report any disturbed insulation to Buyer
so that Buyer can determine how to proceed.
5 Repeat following steps (a) to (m) for each of the 6 burners:
(a) Remove existing oil gun from burner. Store carefully so that it can be reinstalled
later.
(b) Disconnect hoses from the existing oil gun coupling block and gas gun, including:
• 4" gas hose
• oil supply hose
• aspirating air supply hose.
Carefully tie back or remove hoses so that they can be reconnected later.
(c) Remove oil gun inserted limit switch from existing oil gun coupling block. Carefully
tie back the switch and cable, so that the switch can be reinstalled later.
(d) Remove the existing oil gun coupling block from the existing oil gun housing tube.
(e) Disconnect brackets between the oil gun housing tube and the support rod for
inserted/retracted limit switches.
(f) Unbolt and remove the existing burner tube support assembly (item Z on Peabody drawing
5AB-1 1777-4), including the existing swirler, concentric gas gun and oil gun housing tube.
Temporarily remove (and then reinstall) adjacent items as necessary for the existing burner
tube support assembly to be removed.
(g) Increase the existing opening in the burner front plate from approximately 17" diameter to
18.112" diameter. Any asbestos encountered will be abated by others. Seal weld a
cylindrical section in new hole to seal between the inner and outer skin. Install new
studboits on the bumer front plate (twelve 1h" diameter studs on 20" pitch circle diameter).
(h) Install new burner center section (including the new gas firing head, concentric gas supply
tube, oil gun housing tube, primary air tube, air slide assembly and swirler) to replace the
existing bumer tube support assembly.
(h) Connect existing oil gun coupling block (from point d above) to the end of new oil
gun housing tube.
(i) Reconnect the existing oil gun inserted limit switch (from point c above) to the
existing oil gun coupling block.
�) Reconnect hose connections (from step b above) to the existing oil gun block,
including oil supply and aspirating air supply.
(k) Install existing oil gun (from step a above) into the existing oil gun coupling block.
6 208D0-061202
TABLE 2: INSTALLATION SCOPE (CONTINUED)
Item No. Description
(l) Re -align the existing igniter to the angle shown in Figure 1.
1 (m) Install pressure gauge and its root valve on gas line to each burner.
g Install biasing valve in the gas line to each of the upper three burners.
7 Allow Buyer to inspect installation work as it proceeds and at completion. Maintain
1 installation tolerances and setting dimensions specified by Seller.
8 Close access doors, tidy up, and clear permits.
7 20800-061202
TABLE 3. CLARIFICATIONS
..... .....
Item No. Clarincadon
1 A Performance and hardware guarantees. Emissions with natural gas firing will be less than
0.195 Ibs NO2/MMBtu, based on a one hour averaging period. As described in the Buyer
specification, the guarantee shall be considered met by a successful test of the boiler at 15,
25, 35 and 45 MW, as measured by the boiler's calibrated CEMS. In the event of dispute, an
independent stack testing firm shall be called in, to the cost of the losing party.
Hardware manufactured by Seller will be warranted for a period of twelve (12) months after
1 start-up or eighteen (18) months after delivery, whichever occurs first. The hardware
warranty is contingent upon proper operation and maintenance of the equipment as defined
by the Seller's operating and maintenance manuals which will be supplied as part of the
project deliverabies.
Seller's warranty is limited to repairs to and/or replacement of equipment supplied by Seller
only. The cost of equipment removal or installation for repair or replacement shall be the
responsibility of others once Seller has demobilized from the jobsite. Seller will not be
responsible for the cost of repair or replacement of any equipment not supplied by Seller.
Warranties for purchased equipment will be limited to the original manufacturers warranty,
which will be passed through to Buyer enforced by Seller as an agent on behalf of Buyer.
Seiler warranties exclude consumable items.
Seller reserves the right to implement remedies, at its own cost, to achieve the specified
performance requirements. These remedies may include hardware modifications and/or
modification of boiler operation. Under no circumstances shall Seller be prevented from
{ exercising this option.
B Seller's scope of work is strictly limited to items specifically described as being in Seller's
scope in Tables 1 and 2 and is subject to the clarifications contained in this table (Table 3).
Revisions to this scope and/or additional items can be quoted upon request.
C Seller's scope excludes spare parts. A detailed list of recommended spare parts will be
provided by the Seller after award of contract during detailed engineering.
D Others will obtain all permits. Seller shall not be responsible for delays or costs associated
with obtaining permits.
E Seller anticipates using existing plant instrumentation during start-up and commissioning of
the new systems. Any existing plant equipment to be used shall be calibrated by plant
personnel prior to the start-up in accordance with industry standards.
F Seller's proposal is based on the Seller's visit to the jobsite and the technical data provided
by Buyer.
G Abatement of asbestos and lead paint is not included in Seller's scope. If required,
abatement would be performed by others.
H Seller has not included for refurbishing existing items reused in the revised installation. If
required, this refurbishment would be by others, or can be provided at additional cost.
2DSDO-061202
1
ATTACHMENT 2
GENERAL TERMS AND CONDITIONS
Article 1, Contract. The Contract of which these terms and conditions are a part is the sole
and only agreement between Buyer and Seller with respect to the subject matter thereof and
shall supercede all prior negotiations or agreements. The terms of the Contract consist of
the provisions written on the face thereof together with any other documents incorporated
therein by reference, including these terms and conditions, the Description of Products and
Services, and drawings, if any, The Contract is expressly limited to and is issued conditioned
upon Buyer's acceptance of the terms thereof. Any provisions contained in any quotation,
acknowledgment, shipping document or other document which are inconsistent with or in
addition to the terms of this Contract shall be of no force or effect. Written acknowledgment
of the Contract, or the shipment of goods or the commencement of work required by the
Contract, shall constitute acceptance by Buyer of the terms of the Contract. No changes,
modifications or amendments of any of the provisions of the Contract shall be valid unless
agreed to by the parties in writing and signed by their authorized representatives.
Article 2, Independent Contractor. Seller is an independent contractor, and neither Seller,
nor any of its subcontractors, agents or employees shall be considered servants, agents,
partners or employees of Buyer.
Article 3, Changes. Buyer shall have the right to make changes, additions or alterations to
the work to be accomplished under this Contract by a written notice to Seller; provided,
however, that Buyer shall (i) be obligated to pay such additional charges as are billed to
Buyer by Seller and (ii) agree to the revised delivery schedule provided to Buyer by Seller as
soon as reasonably practical after Seller's receipt of such notice of change from Buyer. Prior
to the commencement of making any changes directed by Buyer, Seller shall notify Buyer, in
writing, of the additional cost and schedule delay.
Article 4, Assignment and Subcontracting of the Work. Seller shall have the right to
subcontract for any or all of the work pursuant to this Contract; provided, however, Seller
shall notify Buyer, for review and approval, as to the name and address of each
subcontractor performing work for Seller pursuant to this Contract. Buyer shall not
unreasonably withhold approval of designated subcontractors. The Seller shall impose on
each of its subcontractors the obligation to comply with the requirements of this Contract.
Article 5, Inspection. If requested by Buyer, Seller shall give Buyer reasonable advance
notice of the commencement of the manufacture of any goods to be manufactured by Seiler
under this Contract so that Buyer may observe the same. Such notice shall specify the item
to be manufactured, the location of the shop, and the manufacturing schedule. In addition, if
requested by Buyer, Seller shall give Buyer reasonable advance notice of the
commencement of any shop tests in order to enable Buyer to witness such tests if Buyer so
desires. Such notice shall describe the nature of the tests to be conducted.
`1 Article 6, Time of Performance. A schedule of deliveries and submittals is set forth in the
f Project Milestones Schedule. The Schedule is hereby approved by Buyer. Any delay in the
performance by either Buyer or Seller shall be excused to the extent due to unforeseeable
causes beyond their control and without their fault or negligence. Seller shall notify Buyer in
.l � .DaIX1Ad,2�2
writing within seven (7) business days of the occurrence of any event likely to delay its
performance and shall make every reasonable effort to minimize the effect of such delay.
Seller shall not be entitled to additional compensation as a result of delays which it incurs,
whether such delays are attributable to Buyer or otherwise, and an extension of time shall be
Seller's sole and exclusive remedy; provided, however, that in the event there is a delay
attributable to Buyer of more than ninety (90) days, all prices shall be increased to reflect
interest on the unpaid portion of the Purchase Price for the entire period of such delay at the
rate of nine percent (9%) per annum.
Article 7, Risk of Loss. Seller shall bear the risk of any loss or damage to goods until the
goods are delivered to Buyer's facilities. In addition, Seller shall be responsible for any loss
or damage attributable to the improper packing of goods.
Article 8, Compliance with Laws. Seller shall comply with all Federal, State, County,
municipal and industrial (AMSE, ANSI, AWS, AISC, etc.) laws, codes, regulations and rules
applicable to the Work and the conditions under which it is to be performed, including, but not
limited to, all requirements of the Occupational Safety and Health Act of 1970, as amended
from time to time.
Article 9, Patents. Seller shall pay all royalties and license fees which may be payable on
account of the Work performed under this Contract. Seller shall at its own expense defend
any claim brought against Buyer, and its successors and assigns, because the Work or any
part thereof, including the use of goods to be provided by Seller, infringes or is alleged to
infringe directly or contributorily on any patent, copyright or other proprietary right, and Seller
shall save Buyer harmless from any loss, damage, cost or liability of any nature arising out of
such infringement or alleged infringement. Without limiting the foregoing, Seller shall pay all
awards or damages assessed and all costs of suit adjudged against those named in such
suits or proceedings. In case any part of the Work should in any such suit or proceeding be
held to constitute infringement and its use be enjoined, Seller shall within a reasonable time
either (1) secure for Buyer the perpetual right to continue the use of such part of the Work or
(2) replace or modify the Work so that it becomes non -infringing, provided the performance
of the Work is not affected in any adverse manner.
Article 10, Insurance. During the performance of the Work under this Contract, Seller shall
maintain insurance coverage with the following forms and limits:
Worker's Compensation Insurance, including Employer's Liability Insurance, for all
employees of Seller in accordance with the laws of the state in which Seller may be required
to pay compensation.
Automobile Liability Insurance, endorsed for all vehicles, whether hired, scheduled, owned or
non -owned, with a combined single limit of at least One Million and 00/100 Dollars
($1,000,000.00) per occurrence for personal injuries, including accidental death, to any one
person; and for property.
Comprehensive General Liability Insurance, including Contractor's Protective and
Contractual Liability, with a combined single limit of at least One Million and 00/100 Dollars
($1,000,000.00) for bodily injury and property damage. Excess Liability insurance with a
combined single limit of Five Million and 00/100 Dollars ($5,000,000.00) shall also be
maintained.
10 20MO-061202
-1
Article 11, Indemnify. Seller shall indemnify and hold Buyer harmless from and against
claims by third parties against Buyer for the negligence or wrongful conduct of Seller in
r proportion to its negligence; provided, however, that (i) Seiler shall not indemnify Buyer to the
extent any such claim arises out of any negligent act or omission or wrongful conduct of
Buyer and, (i€) Seller's obligation pursuant to this Article 11 shall not exceed the amount of
this Purchase Price.
Article 12, Warranty. Seller warrants that, during the warranty period, the goods and
services manufactured by Seller pursuant to this Contract shall be (1) new, (2) free from
defects in title, design, material and workmanship, and (3) in conformance with the
requirements of this Contract, including the Description of Products and Services, and with
all applicable codes, standards, laws and regulations. The warranty period for the goods
shall be that period ending twelve (12) months after start-up or that period ending eighteen
(18) months after delivery of the goods to jobsite, whichever occurs first. Start -Up shall be
defined as the first date that a flame is established in the furnace after the new equipment is
installed. Equipment warranties shall only apply if Buyer complied with all operating and
maintenance instructions as contained in Seller's operating manual.
In the event of a breach of warranty during the warranty period as to goods manufactured or
supplied by Seller, Seller shall, at its expense, replace or repair such goods so that they
conform to the requirements of Seller's warranty. The cost of all corrective work and
materials shall be borne by Seller. If Seller fails to proceed with reasonable promptness to
take corrective action, Buyer shall have the right, after notice to Seller, to cause such
necessary corrective work to be accomplished and Seller shall reimburse Buyer for all costs
reasonably incurred thereby.
Notwithstanding anything in the foregoing to the contrary, Seller shall have no warranty
obligation if the failure complained of is caused in whole or in part by something other than a
defect in the goods manufactured by Seller; it being the intention of the parties that Seller not
be responsible for the acts of third parties, conditions not contemplated by the Contract or
other matters beyond Seller's control. Seller's warranty obligations shall be subject to the
condition that Seller shall determine the appropriate remedy, and upon obtaining Buyer's
approval of the remedy, which approval shall not be unreasonably withheld, Seller shall be
given adequate access and shutdown time to implement the remedy. In the event repairs
are required to bring the goods into conformity with the terms of this warranty, Seller shall
have the right to perform such tests of the goods, as it deems necessary or appropriate.
Seller shall have no warranty obligation as to goods manufactured by other parties and
purchased by Seller for resale to Buyer, except that in the case of any defect in or failure of
such goods, Seller shall assign to Buyer any warranty rights from the manufacturer in favor
of Seller and shall use its best efforts to enforce such warranty rights in favor of Buyer.
NO EXPRESS WARRANTIES AND NO IMPLIED WARRANTIES, WHETHER OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR USE, OR OTHERWISE,
OTHER THAN THOSE EXPRESSLY SET FORTH ABOVE, WHICH ARE MADE
EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, SHALL APPLY TO PRODUCTS OR
SERVICES SUPPLIED BY SELLER, AND NO WAIVER, ALTERATION OR MODIFICATION
OF THE FOREGOING CONDITIONS SHALL BE VALID UNLESS MADE IN WRITING AND
SIGNED BY AN EXECUTIVE OFFICER OF SELLER.
11 20M-OW202
Article 13, Termination for Cause. Buyer and Seller shall each have the right, by written
notice to the other party, to terminate this Contract, in whole or in part, in any one of the
following circumstances: (i) if the other party becomes insolvent, files a voluntary petition in
bankruptcy, becomes subject to any involuntary petition in bankruptcy, suffers the
appointment of a Receiver or Trustee, or executes an assignment for the benefit of its
creditors; or (ii) if the other party materially fails to perform any of the obligations pursuant to
this Contract or abandons its premises or discontinues its business operations. The
foregoing termination right shall be in addition to, and not in lieu of, any other remedy
available in law or equity.
Article 14, Liens. Seller shall make prompt payment for all labor, material and services
used by Seller in the performance of the Work. In the event a lien should be filed against the
Work as a result of non-payment by Seller, Seller shall at its expense, upon demand of
Buyer, take all necessary action, by bond or otherwise, to cause any such lien to the
released or discharged therefrom, and Seller shall indemnify Buyer against any loss or
expense in connection therewith, including reasonable attorneys fees.
Article 15, Work on Buyer's Premises. Seller, its employees and subcontractors shall
comply with and observe all directions, rules and regulations of Buyer relating to work
performed at the premises of Buyer, including those relating to safety, fire prevention,
housekeeping, maintenance and protection of the work and premises, delivery and storage
of materials, ingress and egress to the premises, parking, employee conduct, public
relations, and handling of labor disputes.
Article 16, Publicity. Neither party shall make any announcement, take any photographs,
or release any information concerning this Contract to any member of the public, press,
official body or any other third party unless prior written consent is obtained from the other
party. Each party agrees not to divulge to third parties, without the written consent of the
other party, any information obtained from or through the other party in connection with the
,J performance of this Contract. Notwithstanding the foregoing, nothing herein shall limit the
right of either party to (i) make disclosures to their respective attorneys, accountants and
professional advisors, (ii) make such disclosures as may be required by law or legal process,
60 or (iii) make any disclosures as may be necessary to enforce this Agreement.
Article 17, Non -Waiver. Failure by either party to insist upon strict performance of any
terms or conditions of this Contract, or failure or delay in exercising any rights or remedies
provided herein, or failure to properly notify the other party in the event of breach, or the
acceptance of or payment for any work hereunder, shall not release the other party from any
obligations under this Contract and shall not be deemed a waiver of any right to insist upon
strict performance hereof or constitute a waiver of any of its rights or remedies with respect
to any prior or subsequent default hereunder.
Article 18, Governing Law. This Contract shall be governed by and construed in
accordance with the laws of the State of Texas, and any action on this Contract shall be filed
in Lubbock County, Texas.
Article 19, Cure. Prior to either party taking action to terminate this Contract or bringing any
action for alleged breach of the terms of this Contract, the non -breaching party shall give the
breaching party a "Notice of Breach" and shall allow the breaching party reasonable time to
cure any breach of the provisions of this Contract. Any Notice of Breach shall be presented
within ten (10) calendar days of determination of alleged breach, shall specify the nature of
12 Z0900-061202
i the breach in reasonable detail, and shall set forth the manner or manners in which such
breach could reasonably be cured. Any response from the alleged breaching party shall be
i
presented within ten (10) calendar days of receipt of Notice of Breach.
Article 20, Limitation on Seller's Liability. In no event shall Seller or its subcontractor or
sub -vendors be liable, whether in contract, in tort (including negligence), warranty, strict
liability, or any other legal theory for any consequential or indirect damages, such as, but not
limited to, cost of capital, loss of anticipated profits or revenues, loss of use or increase in the
expense of the use of equipment or plant, loss of power or production, cost of purchased or
replacement power or production, or claims of customers for loss of power or production.
Seller's liability for any cause of action arising out of Buyer's purchase of Seller's products or
services, including any cause of action based on negligence, is expressly limited to the
refunding of the net Purchase Price for such products or services. Notwithstanding the
preceding sentence, Seller may, at Seller's option, and in lieu of any refunding of the
Purchase Price, repair or replace any defective products or parts sold or furnished by Seller.
Any products or parts which Seller elects to repair or replace, or for which Seller elects to
refund the Purchase Price, shall, if Seller so requests, be returned to Seller's plant at Seller's
expense. Seller's liability is confined to replacing defective equipment or correcting faults
l only on equipment supplied by Seller and in correcting any errors in engineering drawings.
Article 21, Facsimile Signature and Delivery. Signatures transmitted by facsimile shall
constitute execution and delivery of this Contract.
Article 22, Taxes. The Purchase Price does not include Sales and Use Taxes.
Article 23, Conditions. Seller's responsibility to perform its obligations under this Contract
shall be subject to Seller's ability to obtain raw materials or component parts necessary for
such performance, as affected by action(s) of third parties, government regulations, orders,
directives and restrictions that may be in effect from time to time.
Article 24, Drawings, Plans and Specifications. During the period that this Contract is in
effect, Seller shall retain possession of any drawings, plans or specifications submitted by
Buyer in connection herewith. Any such drawings, plans or specifications shall be stored at
Buyer's risk, and Seller assumes no responsibility for loss of or damage to such items from
any cause whatsoever. Seller shall, upon completion of the Work, return all drawings, plans
and specifications to Buyer, upon Buyer's written request.
Article 25, Notices. Notices required or permitted by this Contract shall be sent to the
parties at the addresses set forth below their signatures by personal delivery, by facsimile, by
registered or certified mail, or by overnight delivery service. If sent by mail or overnight
delivery service, the notice shall provide for return receipt. If sent by facsimile, the facsimile
machine shall provide for confirmation of receipt and a copy shall be mailed by registered or
certified mail or by overnight delivery service. Notices shall be deemed given upon receipt.
Each party shall have the right to change its address for notice by written notice to the other
party in the manner provided for in this Article 25.
13 2OW-06 i 202
ATTACHMENT 3
PROJECT PAYMENT SCHEDULE
Milestone
Anticipated Date
Percent of Total
Contract Value
71
u
Award of Contract
June 21, 2002
10
❑
Engineering Submittals
July 12, 2002
10
❑
Engineering Complete
July 26, 2002
10
❑
Placement of Equipment and Fabrication
August 2, 2002
10
Contracts
❑
Equipment Procurement and Fabrication
October 24, 2002
15
Complete
❑
Delivery of Equipment to Site Complete
October 31, 2002
20
(and Operation and Maintenance Manuals
delivered)
F=
❑
Installation Work Complete
November 30, 2002
15
❑
Start -Up Complete (including Acceptance
December 14, 2002
10
Testing Using Buyer's CEMS) (Milestone
='
payment not to exceed sixty (60) days from
installation work completion.)
14 .-106120
}
ATTACHMENT 4
PROJECT MILESTONES SCHEDULE
Milestone
Anticipated Date
❑
Award of Contract
June 21, 2002
❑
Engineering Submittals
July 12, 2002
❑
Engineering Complete
July 26, 2002
❑
Placement of Equipment and Fabrication
August 2, 2002
Contracts
❑
Equipment Procurement and Fabrication
October 24, 2002
Complete
❑
Delivery of Equipment to Site Complete
October 31, 2002
(and Operation and Maintenance Manuals
delivered)
❑
Installation Work Complete
November 30, 2002
❑
Start -Up Complete (including Acceptance
December 14, 2002
Testing Using Buyer's CEMS) (Milestone
payment not to exceed sixty (60) days from
installation work completion.)
} 15 zosoaataoz
:J
1
S
ATTACHMENT 5
CANCELLATION CHARGE
4
i
f
Weeks from Contract Date
Cancellation Charge as Percent of
Total Purchase Price
2
10
1 4
20
6
30
j 8
40
j 10
50
12
60
14
70
16
80
18
90
20
1
100
The amount of the Cancellation Charge in the event of cancellation by Buyer under Section 5
of this Contract shall be determined by using the above table. The Cancellation Charge shall
be the applicable percentage of the Purchase Price less the amount of the Purchase Price
already paid by Buyer as of the cancellation date.
For example, if Buyer cancels more than 12 weeks after the contract date but before 14
weeks after the contract date and if as of the cancellation date Buyer has already paid 40
percent (40%) of the Purchase Price, or $86,080, then the Cancellation Charge will be
$129,120 [(60 percent of $215,200) less $86,080].
16 '2MWa1:!0'-
ATTACHMENT 6
SELLER'S FIELD SERVICE RATES
APPLIED UTILITY SYSTEMS, INC. FIELD SERVICE RATES
2002
Seller field service rates are charged at an hourly rate plus expenses in accordance with the
following standard arrangements:
Hourly Rates
❑ Monday to Friday (excluding holidays)
First eight hours Overtime
On -site Rate per Hour $120.00 $150.00
Travel Rate per Hour $96.00 $96.00
❑ Saturday, Sunday and Holidays
First eight hours Overtime
On -Site Rate per Hour $150.00 $180.00
Travel Rate per Hour $96.00 $96.00
Travel Rate will be charged for the time spent traveling from Seller offices to the job site and
return to Seller offices.
Expenses
Expenses for local automobile travel will be at the rate of 34.5 cents per mile plus tolls and
parking. Other means of transportation, including car rental when necessary, will be charged at
the actual cost. Living expenses, when overnight stay is required, will be charged at the actual
cost.
17 20600- 1202