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AGREEMENT CONSTRUCTION CONTRACT i ,. II I I CONSTRUCTION CONTRACT FOR INSTALLATION IN FLORIDA OFA 6" LATERAL AT PASCO COUNTY, FLORIDA FACILITY OF OWNER to-, -- BETWEEN Citrus Energy Services, Inc. "Contractor" AND City of Clearwater "Owner" . . Construction Contract No.: OOF-CONST-2114 f:\fonnsldesign2.F1oridadoc 11120/96 .~ I I CONSTRUCTION CONTRACT TABLE OF CONTENTS ARTICLE 1 - DEFINITIONS. 1 ARTICLE 2 - SCOPE OF WORK. 3 ARTICLE 3 - CHANGES IN THE WORK. 4 ARTICLE 4 - CONFIDENTIALITY. . 5 ARTICLE 5 - CONTRACT PRICE; TAXES. 5 ARTICLE 6 - PAYMENT. 6 ARTICLE 7 - ACCOUNTING, AUDIT, ETC. 7 ARTICLE 8 - ACCEPTANCE OF THE WORK. 7 ARTICLE 9 - TITLE AND RISK OF LOSS. 8 ARTICLE 10 - LIMITED WARRANTY. . . 8 ARTICLE 11 - WAIVER OF CONSEQUENTIAL DAMAGES. 10 " ARTICLE 12 -INDEMNIFICATION. 10 ARTICLE 13 - LIABILITY INSURANCE. 12 ARTICLE 14 - OWNER'S PROPERTY INSURANCE. 13 ARTICLE 15 - LIMITATION OF LIABILITY. 13 ARTICLE 16 - OWNER'S AND CONTRACTOR'S REPRESENTATIVES. 14 ARTICLE 17 - TERMINATION. 15 ARTICLE 18 - PERMITS. 16 f:\fonnsldesign2.F1oridadoc 11/20/96 I I ARTICLE 19 - INDEPENDENT CONTRACTOR. 16 ARTICLE 20 - MECHANICS LIENS. 17 ARTICLE 21 - COMPLIANCE WITH LAWS. 17 ARTICLE 22 - EXISTING HAZARDOUS MATERIALS. 17 ARTICLE 23 - NO OTHER AGREEMENTS. 18 ARTICLE 24 - SUCCESSORS AND ASSIGNS. 18 ARTICLE 25 - NON-WAivER:' 18 ARTICLE 26 - LAW TO GOVERN. 18 ARTICLE 27. DISPUTE RESOLUTION. 19 ARTICLE 28 - ARBITRATION. 20 ARTICLE 29 - SEVERANCE OF TERMS. 21 ARTICLE 30 - ASSIGNMENT. . . 21 ARTICLE 31 - NO THIRD PARTY BENEFICIARY. 22 ARTICLE 32 - EXHIBITS. 22 ARTICLE 33 - COUNTERPARTS. 22 EXHIBIT "A" SCOPE OF WORK "A" EXHIBIT "B-1" SAMPLE SUBSTANTIAL COMPLETION CERTIFICATE "B-1" EXHIBIT "B-2" SAMPLE FINAL COMPLETION CERTIFICATE "B-2" f:\fonnsldesign2.Floridadoc 11120/96 I I Construction Contract No.: 00F-CONST-2114 CONSTRUCTION CONTRACT THIS TURNKEY CONSTRUCTION CONTRACT ("Agreement") made and entered into as of this 23rd day of June, 2000 (the "Effective Date"), by and between CITY OF CLEARWATER, a Florida municipal corporation, hereinafter called "Owner ", and CITRUS ENERGY SERVICES, INC., a Delaware corporation, hereinafter called "Contractor". WITNESSETH: WHEREAS, Owner desires to install and own a 6" Lateral to be known as the Facility. WHEREAS, Contractor, -i.tself or through subcontractors, desires to design, engineer, procure materials and construct the Facility on a lump sum bid price basis. NOW THEREFORE in consideration of the mutual promises, covenants and agreements herein, the parties hereto, intending to be legally bound, agree as follows: ARTICLE 1 - DEFINITIONS. "Affiliate(s)" as used herein shall mean with respect to Owner or Contractor, any entity, including corporation, company, partnership or joint venture that directly or indirectly through one or more intermediaries controls, is controlled by, or is under cqmmon control with another ~~ . "Change Order" shall mean a written order to Contractor pursuant to Article 3 hereof, signed by Owner and countersigned by Contractor, authorizing the addition, deletion or revision in the Work or the Contract Price. "Contractor" shall mean Citrus Energy Services, Inc. "Day" or "day" shall mean a calendar day and shall include Saturdays, Sundays and holidays of Owner or Contractor, except that, in the event that an obligation to be performed under this Agreement falls due on a Saturday, Sunday or any other day which is not a Working Day, the obligation shall be deemed due on the first Working Day thereafter. "Design Basis" shall mean the standards, specifications, capacities, parameters and conditions for the Facility as set forth in Exhibit "A". "Equipment" shall mean all the equipment, materials, supplies which are to become part of the Facility. f:\fonnsldesign2F1orida .doc 1 0129/96 rv::. I I "Facility" shall mean the Work under th,is Agreement to design, engineer, procure materials and construct a 6" Lateral more fully described in Exhibit "A". "Final Completion" shall mean the acceptance by Owner of the Final Completion Certificate as described in Article 8. "Force Majeure" shall mean each of the following events: acts of God or the elements, acts or failure to act by the government or any agency thereof; delays in receipt of Owner or third party engineering data or vendor drawings; fire, flood, earthquake or unusually severe weather; natural disasters or unavoidable casualties; riots; civil disorders; labor shortages or disputes, strikes, picketing; delays in transportation, material or equipment deliveries; material, equipment or fuel shortages; or any other event, matter or thing, wherever occurring, which shall not be within the reasonable control of the party affec!ed there.by. . "Hazardous Materials" shall mean any hazardous or toxic substance or waste or material including without limitation, petroleum and petroleum derived substances, including mixtures and compounds derived from natural gas and natural gas liquids and naturally occurring radioactive materials ("NORM") as defined by any law, statute, ordinance, rule or regulation of any Governmental Authority pertaining to protection of the environmental or human health. "Governmental Authority" shall mean the United States, and the state, county, city and political subdivisions of which such site is located and that exercises jurisdiction over such site, and any agency, department, board or other instrumentality thereof that exercises jurisdiction over the site. "Owner" shall mean City of Clearwater. "Owner Delay" shall mean events of interference in the progress of the Work, delay or failure of performance caused by the Owner, including but not limited to delays associated with hazardous materials as described in Article 22, and delays in providing utilities and other items required to be provided by Owner pursuant to this Agreement. "Punchlist" shall mean a list of those finishing items prepared in accordance with Article 8 after Substantial Completion of the Work without which the Equipment is nonetheless commercially operable in accordance with generally acceptable engineering practices. "Project" shall mean collectively the Facility, the Site and all associated equipment, structures, facilities and other improvements necessary for the ownership, operation and maintenance of the Facility. "Scope of Work" shall mean the description of Work including the Design Basis to be performed by Contractor as set forth in Exhibit "A" attached to this Agreement. "Site" shall mean pipeline rights of way or any other location where all or a portion of the permanent Facility is to be located. f:\fonnsldesign2F1orida .doc 1 0/29/96 2 fJD I I "Substantial Completion" shall mean the acceptance by Owner of the Substantial Completion Certificate as described in Article 8. "Warranty Period" shall have the meaning set forth in Article 10. "Work" shall mean all obligations, duties and responsibilities undertaken by Contractor pursuant to this Agreement. "Working Day" or "working day" shall mean every day other than a Saturday, Sunday or a day which is a declared holiday for Contractor or Owner. ARTICLE 2 - SCOPE OF WORK. " A. Contractor shall furnish, undertake, provide or cause to be provided all design, engineering, procurement and construction services, technical expertise, supervision, testing, labor, personnel, materials, supplies, equipment and machinery necessary for the installation of the Facility at the Site in accordance with the terms, conditions, drawings and specifications described in Exhibit "A" attached hereto. Owner represents to Contractor that Owner holds all rights of egress and ingress to the Site that are necessary for the performance of the Work by Contractor. B. Contractor shall submit to Owner current and complete copies of the Project drawings that are deemed necessary by the Contractor for the Project, and Project documents for Owner's review. Contractor shall submit any drawing or docu}llent to Owner in sufficient time for Owner to raise comments or queries on such drawings' and documents and to permit the resolution of such comments or queries prior to the commencement of the Work without impeding performance of Contractor's other obligations under the Agreement. Project documents may include, without limitation, piping and instrument diagrams; the equipment location plan; piping plan; piping sections; and typical electrical drawings. Owner shall notify the Contractor of any comments or queries within seven (7) days of receipt of any drawing or document. If Owner fails to take any action within the seven (7) days then the drawing or document shall be deemed reviewed by Owner. Contractor shall, within ten (10) days of Owner's notification of any comments or queries on any drawing or document, amend such drawing or document or otherwise take account of or respond to Owner's comments or queries or re-submit such drawing or document together with Contractor's written response to Owner's comments or inquiries for Owner's review in accordance with this Paragraph. Contractor shall reasonably endeavor to implement and accommodate within any such drawing or document submitted for review, Owner's comments relating to such drawing or document unless such comments are inconsistent with the relevant requirements of this Agreement. Owner shall not review or comment on any drawing or document submitted for information except on the grounds that the drawing or document is not in accordance with the requirements of this Agreement, provided that Owner shall always be entitled to comment on or require a f:\fonnsldesign2Florida .doc I 0129/96 3 ~ I I change to any such drawing or document by directing a written Change Order agreement pursuant to Article 3. C. If applicable to this Agreement, Owner agrees to provide at no cost to Contractor the following consumables and utilities needed by Contractor for the installation of the Facility: (i) all telephone service, electrical service and other utilities or housing for Contractor's installation of electronic flow measurement ("EFM") or SCADA equipment as part of the Facility; (ii) natural gas for purging and filling the pipeline installed by Contractor; (iii) line pack i(~ecessary-for the pipeline installed by Contractor. ARTICLE 3 - CHANGES IN THE WORK. Owner may from time to time through written Change Orders issued pursuant to this Article 3, change the Scope of the Work by submitting a written request to Contractor to perform additional services or work or to omit portions of the Work previously provided for under this Agreement. In any such event, all Change Orders shall be executed in writing by Owner and Contractor and shall contain full particulars of the changes and any equitable adjustment to the Contract Price, completion date, and any other modifications to take into account the effect of each Change Order, all in accordance with the following procedures: . . A. If Owner desires to make a change in the Scope of the Work, Owner shall advise Contractor and Owner shall submit to Contractor a written request setting forth in reasonable detail the requested change. Contractor shall as soon as reasonably practical following a request therefor, prepare a detailed estimate of the cost of such change to be used in determining the amount of the proposed adjustment to the Contract Price, taking into account the effect of such change on the Work and other agreed upon Change Orders. Owner shall review Contractor's estimate, and if Owner accepts it or the parties otherwise agree on the cost, the equitable adjustment to be made to the Contract Price and other terms of the proposed change, Contractor shall prepare a Change Order for execution by both Contractor and Owner. In the event Owner declines to proceed with any Owner requested change Contractor shall be compensated for reasonable costs incurred in preparing the estimate. B. If Contractor determines that a condition or the occurrence of an event, including any Force Majeure event or Owner Delay, requires or makes advisable a change in the Scope of the Work, the Contractor shall prepare and deliver to Owner a request for a Change Order which sets out in reasonable detail the requested change, the estimated cost of such change, the proposed equitable adjustment to the Contract Price to be made on account thereof, and its effect on other agreed upon Change Orders and the timely completion of f:\fonns\design2Florida .doc 10129/96 4 (i) I I the Work. Within five (5) working days following Owner's receipt of any request for Change Order, Owner shall determine whether to agree to the requested Change Order, request modifications to it, or to reject it, and shall so notify Contractor. Owner shall identify in its notice the specific reasons for any requested modification or rejection. The failure of Owner to respond to a requested Change Order within the specified time period shall be deemed a rejection thereof. If Owner and Contractor agree upon the terms and provisions of a requested Change Order, Contractor shall promptly prepare the Change Order for execution by Owner and Contractor. C. In the event that the parties are unable to agree upon the terms and provisions of a requested Change Order, the requesting party shall have the right to have such matters determined in accordance with the provisions of Articles 27 and if necessary Article 28 of this Agreement. " D. Interaction of Equipment Vendors to Change Orders and this Agreement. Prior to execution of any Change Order under this Agreement, the Change Order will be reviewed and concurred by the Contractor's Equipment vendor. Such concurrence shall signify that such Change Order has no effect on the vendor's ability to perform under its original contract, purchase order or purchase agreement for such Equipment with Contractor or, such Change Order affects vendor and that vendor and Contractor are executing a mutually agreeable change order for the affected Equipment. ARTICLE 4 - CONFIDENTIALITY. , Each party agrees that it will maintain this Agreement and all parts and contents thereof in strict confidence, and will not disclose or cause or permit disclosure thereof to any third party without the express written consent of the other party; provided, however, that disclosure by a party is permitted in the event and to the extent that such party is required by a court or governmental agency exercising jurisdiction over the subject matter hereof, by order or by regulation, to make such a disclosure (provided that in the event either party becomes aware of a judicial or administrative proceeding that has resulted or may result in such an order requiring disclosure, it shall (i) so notify the other party immediately, (ii) utilize all reasonable available means to limit the scope of the order or regulation requiring disclosure, and (iii) take all actions reasonably necessary to prevent disclosure to the public as a result of disclosure to the court or governmental agency). ARTICLE 5 . CONTRACT PRICE; TAXES. A. Contract Price. Owner agrees to pay Contractor a Contract Price in the amount of Fourty-Five Thousand Dollars ($45,000.00) and all other sums, if any, required to be paid by Owner to Contractor pursuant to the terms of this Agreement, in each case in accordance with the provisions of ARTICLE 6 hereof. f:\fonnsldesign2F1orida .doc 1 0129/96 s @O I I B. Taxes. 1. Contractor shall pay all applicable federal, state and local taxes, unless this contract shall otherwise provide. Owner reserves the right to elect to accrue all Florida sales and use taxes due under this contract and shall make such election by specifying its intention to do so in the Request for BidlProposal. This paragraph shall not apply to work involving real property that is covered by Rule 12A-1.051 (2)( d) of the Rules and Regulations of the Florida Department of Revenue. 11. Sales and Use Taxes. CONTRACTOR agrees that any state or local sales, use, gross receipts or like taxes on materials, supplies or services furnished by Contractor and on services performed by Contractor on work under this Contract covered by Rule 12~-1.051(2)(d) of the Rules and Regulations of the Florida DepartmentpfRevenae (Contractors who repair, alter, improve and construct real property) shall be paid by the Contractor as the ultimate consumer. Work not covered by the provisions of Rule 12A-1.051(2)(d) and where Contractor is deemed to be a retail dealer, Contractor shall separately list on taxable invoice(s) all such taxes, including the tax rate and the taxing authority to whom such taxes are due and directly payable. Owner reserves the right to elect to accrue all Florida sales and use tax due under this Contract where Rule 12A-1.051(2)(d) does not apply. Owner shall make such election by specifying its intention to do so in the bid or proposal for the Work. If Owner exercises such election, Owner shall provide Contractor with a properly completed and signed exemption certificate or other written evidence of exemption so long as the evidence meets requirements cited by the applicable taxing authority, prior to Contractor's . procurement or payment of taxable purchases. ARTICLE 6 - PAYMENT. A. Contractor will invoice Owner upon completion of this project and Owner shall pay Contractor within thirty (30) days of the date of invoice. The amount to be paid to Contractor shall be wire transferred to Contractor's account at: Citrus Energy Services, Inc. Nations Bank of Texas, N.A. 700 Louisiana Houston, Texas 77002 Account # 375-067614-7 ABA # 111000012 B. If changes in the Scope of Work are ordered under Article 3 which increase or decrease the cost of the Work in an amount as determined in accordance therewith, the Contract Price shall be increased or decreased accordingly, which adjusted figure shall then become the Contract Price under the Agreement. f:\fonnsldesign2F1orida .doc 1 0129/96 6 fJ') . I I C. Should Owner fail to pay part or all of the amount of any invoice rendered by Contractor, interest shall accrue from the due date of such invoice until the date of payment received by Contractor at the lower of the effective prime rate charged by Texas Commerce Bank, N.A., plus two percent or the maximum allowable interest rate permitted by applicable law, calculated on a compounded monthly basis, provided that disputed amounts will be subject t the provisions of Section 6 (0) below. D. If the amount of any invoice shall be disputed in good faith the Owner shall promptly pay the portion of the invoice not in dispute, and acceptance of such payment shall not prejudice any claims to the disputed portion of the invoice. Any disputed amount that is ultimately determined to have been payable shall accrue interest for failure to pay as described in Section 6 (C) al?ove. ARTICLE 7 - ACCOUNTING. AUDIT, ETC. A. For all fixed price contracts Owner shall have the right to inspect at Contractor's Maitland, Florida office, at reasonable times during Contractor's business hours and upon ten (10) days prior notice, all documents, books, records or other evidence supporting any increase above the fixed price, when such increase is requested by Contractor; provided, however, that if Owner does not submit a written claim for adjustment or correction within two (2) years following the date of Substantial Completion of the Work, work orders, receipts and payments shall be deemed final and conclusively correct. . B. For all contracts, other than those covered by Section (A) above, Contractor agrees that adequate documentation in the form of invoices, work orders and receipts for all costs associated with the Work shall be available to Owner for inspection at Contractor's office in Maitland, Florida at reasonable times during Contractor's business hours, upon ten (10) days prior notice; provided, however, that if Owner does not submit a written claim for adjustment or correction within two (2) years following the date of Substantial Completion of the Work, work orders, receipts and payments shall be deemed final and conclusively correct. ARTICLE 8 - ACCEPTANCE OF THE WORK. A Contractor shall substantially and finally complete the Work in accordance with the schedule heretofore or hereafter mutually agreed upon between Owner and Contractor. . Any completion dates specified are tentative only provided however, that Contractor shall use its reasonable efforts to complete the Work by such dates and Contractor shall have no liability to Owner for late completion. B. Substantial Completion of the Work means that all reports with respect to the Work have been submitted to the Owner, all Change Orders are closed and the Equipment is ready f:\fonnsldesign2Florida .doc 1 0129/96 7 ~ I I for its intended use up to its rated capacity as set out in the Scope of Work. When Contractor believes the Work has achieved Substantial Completion, Owner and Contractor shall promptly make a joint inspection thereof Contractor shall prepare a Punchlist of the finishing items agreed to by Owner and Contractor as a result of such joint inspection and provide it to Owner together with an estimate of the cost and time to complete each Punchlist item. The Work shall be deemed acceptable to Owner except with respect to the Work on said Punchlist. The Warranty Period with respect to the Work so accepted shall be deemed to begin on the date of such acceptance. Within ten (10) days after the receipt of Contractor's estimate of the cost and time necessary to complete each Punchlist item, Owner shall deliver its written acceptance or rejection of each such estimate to Contractor. The acceptance or rejection thereof of the estimates will not relieve Contractor of its responsibility to correct the Punchlist items. If Owner accepts the estimates, Owner shall ~ithhold from the unpaid amount of the Contract Price an amount equal to.. ~he estimated cost of correcting all outstanding Punchlist items ("Punchlist Value"), and retain such amount until the Punchlist items are corrected. If Owner rejects any such estimate, Owner shall in its notice to Contractor specifically identify in detail the reasons for rejection. The parties shall make all reasonable efforts to resolve such dispute. If Owner and Contractor are unable to reach agreement within five (5) days of delivery by Owner of its notice of rejection, either party shall have the right to submit such dispute for resolution in accordance with Article 27 and if necessary Article 28, Section E, of this Agreement. Owner shall adjust the Punchlist Value to reflect the disputed amount and withhold the adjusted Punchlist Value from the unpaid amount of the Contract Price and retain such amount until the Punchlist items are corrected. The amount withheld will be adjusted if necessary to reflect the settlement amount of the Punchlist Value resolved by dispute resolution or arbitration proceedings. Contractor shall issue a Certificate of Substantial Completion to Owner'substantially in the form of the example in Exhibit B-1. Within ten (10) days after receipt of such Certificate, Owner shall accept or reject it. Upon Owner's acceptance of Contractor's Certificate of Substantial Completion of the Work, Owner shall pay Contractor the amount of the unpaid Contract Price less the Punchlist Value and care, custody, supervision, control and risk of loss of the Facility shall pass to Owner. As Contractor corrects the Punchlist items, Contractor may invoice Owner for the value of such corrected items in accordance with such item's value on the Punchlist. C. When Contractor believes it has completed such Work on the Punchlist, Contractor shall deliver to Owner the Final Completion Certificate substantially in the form of the example in Exhibit B-2. Upon Owner's acceptance of Contractor's Final Completion Certificate, final completion shall have occurred, and Owner shall pay any remaining Punchlist Value to Contractor. ARTICLE 9 - TITLE AND RISK OF LOSS. A. Title to Work. Contractor warrants good title to all materials, equipment, tools and supplies furnished by it and its subcontractors to become part of the Facility. The title to f:\fonnsldesign2F1orida .doc 1 0129/96 8 tiJ I I all Work completed and in the course of construction and to all material, equipment, tools and supplies for which payment has been made to Contractor shall be in Owner. B. Risk of Loss. Notwithstanding the passage of title as provided in Article 9 Section A, Contractor shall retain sole care, custody, supervision, control and risk of loss of the Work including damage or loss of Equipment intended for incorporation in the Work until the earlier of Substantial Completion of the Work pursuant to Article 8, Section B, or termination of this Agreement pursuant to Article 17 at which time the risk of loss will pass to Owner. ARTICLE 10 - LIMITED WARRANTY. A. Contractor warran!s that., the Wort{ -will be performed in an good and workmanlike manner and the workmanship supplied by the Contractor for the Work will be free from defects, excepting wear, tear, abuse or improper use. Contractor's sole liability to Owner for any breach of warranty shall be to correct, repair or replace the item of defective workmanship, for which Contractor receives written notice by the end of the period of one (I) year from the date that the Work, or a portion thereof, is accepted by Substantial Completion or Final Completion (the "Warranty Period"). B. With respect to items of materials, supplies, equipment or services procured by Contractor from vendors or subcontractors, Contractor will attempt to secure the best warranties reasonably obtainable as to workmanship and material and to include the interest of Owner in such warranties. Contractor shall not, under any circumstances, be . responsible for correction of any defective workmanship or material in connection with said items, nor shall there be any express or implied warranties made by Contractor with respect to such items. However, Contractor will assign to Owner all warranties covering same, and will provide all reasonable assistance to Owner in the enforcement of warranty claims against such suppliers, manufacturers or subcontractors. C. THE EXPRESS WARRANTIES AND REMEDIES SET FORTH IN THIS ARTICLE 10 OF THIS AGREEMENT STATE THE ONLY WARRANTIES OF CONTRACTOR FOR THE WORK., AND NO WARRANTIES OTHER THAN THE ABOVE, EITHER STATUTORY, WRITTEN, ORAL OR I1vfPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTIBILITY OR FITNESS FOR A P ARTICULAR PURPOSE APPLICABLE TO CONTRACTOR'S WORK UNDER THIS AGREEMENT SHALL APPLY. WHERE SO LWITED, THE REMEDIES SET FORTH HEREIN SHALL BE OWNER'S SOLE AND EXCLUSIVE REMEDIES FOR DEFECTS IN THE WORK AND BREACH OF THE WARRANTIES STATED HEREIN AND CONTRACTOR IS HEREBY RELEASED FROM ANY LIABILITY IN EXCESS THEREOF. f:\lonnsldesign2F1orida .doc I 0/29/96 9 ~ I I ARTICLE 11 - WAIVER OF CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY HEREUNDER BE LIABLE TO ANY OTHER P ARTY HERETO FOR ANY LOST OR PROSPECTIVE PROFITS OR REVENUES, LOSS OF USE OF EQUIPMENT OR ANY OTHER SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES (IN TORT INCLUDING NEGLIGENCE, CONTRACT, STRICT OR ABSOLUTE LIABILITY, PROFESSIONAL ERRORS AND OMISSIONS LIABILITY, WARRANTY OR OTHERWISE) UNDER OR IN RESPECT OF THIS AGREEMENT OR FOR ANY FAILURE OF PERFOIUv1ANCE RELATED HERETO HOWSOEVER CAUSED, WHETHER OR NOT ARISING FROM SUCH PARTY'S SOLE, JOINT OR CONCURRENT NEGLIGENCE. THE PARTIES SPECIFICALLY ACKNOWLEDGE THAT THE PRICING PROVISIONS OF THIS AGREEMENT REFLECT SUCI.:I ALL9CA TION OF RISK AND LIMIT A nON OF LIABILITY. TO THE EXTENT ANY PAYMENT REQUIRED TO BE MADE UNDER THIS AGREEMENT IS AGREED BY THE PARTIES TO CONSTITUTE LIQUIDATED DAMAGES, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE AND THAT SUCH PAYMENT CONSTITUTES A REASONABLE APPROXIMATION OF SUCH DAMAGES, AND NOT A PENALTY. ARTICLE 12 -INDEMNIFICATION. 12.1 INDEMNITYBYOWNER A. TO THE FULLEST EXTENT PERMITTED BY LAW, OWNER AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD HARMIrESS CONTRACTOR, ITS PARENT, AFFILIATES, DlRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS, ASSIGNS AND SUBCONTRACTORS (COLLECTIVELY THE "INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES, DA1\1AGES, AND EXPENSES (INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS AND REASONABLE ATTORNEY'S FEES), LOSSES, CLAIMS, COSTS, SUITS, AND CAUSES OF ACTION ATTRIBUTABLE TO BODILY INJURY TO OR DEATH OF ANY THIRD PARTY OR THE LOSS OR DAMAGE TO THE TANGIBLE PROPERTY OF ANY THIRD PARTY, AND CAUSED IN WHOLE OR IN PART BY (I) OWNER'S OWNERSHIP OF THE SITE OR THE FACILITY, (2) THE NEGLIGENT ACTS OR OMISSIONS OF OWNER, ITS PARENT, AFFILIATES, OFFICERS, DIRECTORS, Bv1PLOYEES, AGENTS AND CONTRACTORS (OTHER THAN THE PARTY TO THIS AGREEMENT) WITH RESPECT TO THIS AGREEMENT, OR (3) OWNER'S F AlLURE TO COMPLY WITH APPLICABLE LAWS, REGULATIONS, RULES, PERMITS AND ORDERS. B. ENVIRONMENTAL LIABILITIES AND INDEMNITIES. 1. IN ADDITION TO THE INDEMNITY PROVIDED UNDER SECTION 12.1(A), OWNER SHALL INDEMNIFY AND DEFEND CONTRACTOR, ITS PARENT, AFFILIATES, DlRECTORS, OFFICERS, EMPLOYEES, AGENTS, f:\fonnsldesign2F1orida .doc I 0129/96 10 p4 ~ I SUCCESSORS AND ASSIGNS (COLLECTIVELY THE "INDEMNITEES") FROM AND AGAINST ANY AND ALL LOSSES, REMEDIES (INCLUDING BUT NOT LTh1ITED TO DAMAGES), CLAIMS, SUITS, PROCEEDINGS, JUDGMENTS, COSTS AND EXPENSES (INCLUDING BUT NOT LIMITED TO REASONABLE ATTORNEYS' FEES AND COSTS OF LITIGATION AND PROCEEDINGS) ARISING DIRECTLY FROM ANY ENVIRONMENTAL ISSUE (AS HEREINBELOW DEFINED), EXCEPT THAT OWNER SHALL NOT INDEMNIFY AND DEFEND THE INDEMNITEES FROM AND AGAINST ANY AND ALL LOSSES, REMEDIES (INCLUDING BUT NOT LIMITED TO DAMAGES), CLAIMS, SUITS, PROCEEDINGS, JUDGMENTS, COSTS AND EXPENSES (INCLUDING BUT NOT LIMITED TO REASONABLE ATTORNEYS' FEES AND COSTS OF LITIGATION Al~D PROCEEDINGS) ARISING DIRECTLY FROM A CONTRACTOR CAUSED ENVIRONMENTAL ISSUE. - - 11. THE TERM "ENVIRONMENTAL ISSUE" SHALL MEAN ANY AND ALL: (1) ALLEGED OR ACTUAL VIOLATIONS OR FAILURES TO COMPLY WITH APPLICABLE ENVIRONMENTAL LA WS, REGULATIONS, RULES, PERMITS, ORDERS, GUIDANCE AND RULINGS OF GOVERNMENTAL AGENCIES, COURTS OR BODIES; (II) RELEASE OF ANY AND ALL SUBSTANCES OR PRODUCTS WITHOUT REGARD TO WHETHER OR NOT SUCH ARE WASTES, HAZARDOUS, NON-HAZARDOUS, TOXIC OR HARMFUL; AND (ill) CLAIMS, DEMANDS, CAUSES OF ACTION AND REMEDIES OF PRlV ATE OR PUBLIC PERSONS OR ENTITIES RESPECTING EITHER OF THE FOREGOING SUBPARTS (I) OR (II) OR RESPECTING ANY OTHER MATTER RELATING TO ACTUAL O~ ALLEGED HARM TO NATURAL RESOURCES OR THE ENVIRONMENT. lll. THE TERM "CONTRACTOR CAUSED ENVIRONMENTAL ISSUES" SHALL MEAN ENVIRONMENTAL ISSUES CAUSED BY CONTRACTOR. 12.2 INDE!vfNITY BY CONTRACTOR. IN CONSIDERATION OF THE SUM OF $1,000.00, THE RECEIPT AND SUFFICIENCY OF WHICH IS ACKNOWLEDGED BY CONTRACTOR, PAYABLE AS PART OF THE FIRST PAYMENT FOR SERVICES, AND TO THE FULLEST EXTENT PERMmED BY LAW, CONTRACTOR AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD HARMLESS OWNER, ITS PARENT, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS (COLLECTIVELY "INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES, DAMAGES AND EXPENSES (INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS AND REASONABLE ATTORNEY'S FEES), LOSSES, CLAIMS, COSTS, SUITS AND CAUSES OF ACTION ATTRIBUTABLE TO BODILY INJURY TO OR DEATH OF ANY THIRD PARTY OR DAMAGE OR LOSS OF ANY TANGIBLE PROPERTY OF ANY THIRD PARTY, AND CAUSED IN WHOLE OR IN PART BY (I) THE NEGLIGENT ACTS OR OMISSIONS OF CONTRACTOR, ITS f:\fonnsldesign2F1orida .doc 1 0/29/96 11 r;t3 I 'I P ARENT, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND SUBCONTRACTORS IN THE PERFORMANCE OF THE WORK. HEREUNDER, (2) ANY CONTRACTOR CAUSED ENVIRONMENTAL ISSUES, OR (3) CONTRACTOR'S FAILURE TO COMPLY WITH APPLICABLE LA WS, REGULATIONS, RULES, PERMITS AND ORDERS. 12.3 EXCEPT AS PROVIDED IN SECTION 12.1 (B) - ENVIRONMENTAL LIABILITIES AND INDEMNITIES, AND SUBJECT TO AND LIMITED BY THE PROVISIONS AGREED TO BY OWNER AND CONTRACTOR IN ARTICLE 10 - LIMITED WARRANTY, ARTICLE 11 - WANER OF CONSEQUENTIAL DAMAGES, AND ARTICLE 15 - LIMITATION ON LIABILITY, AND TO THE FULLEST EXTENT PERMITTED BY LAW, IF ANY COST, CLAIM, LIABILITY, LOSS OR DAMAGE OF A THIRD PARTY IS CAUSED IN PART BY THE NEGLIGENCE OF A PARTY TO THIS AGREEMENT AND-IN P AR'"f- BY.THE NEGLIGENCE OF THE OTHER PARTY HERETO OR ANY OTHER NEGLIGENT PARTY, ENTITY, OR INDIVIDUAL, OWNER AND CONTRACTOR SHALL INDEMNIFY THE OTHER PARTY HERETO AGAINST SUCH CLAIM, COST, LIABILITY, LOSS OR DAMAGE OF A THIRD PARTY, BUT ONLY TO THE EXTENT OF SUCH PARTLY NEGLIGENT OWNER'S OR CONTRACTOR'S, AS THE CASE MAYBE, PERCENT AGE SHARE OF THE TOTAL NEGLIGENCE OF ALL NEGLIGENT PARTIES, ENTITIES, AND INDIVIDUALS. 12.4 THE INDEMNIFICATIONS, WANER OF CONSEQUENTIAL DAMAGES AND LIMIT A TIONS ON LIABILITY AND WARRANTY MADE IN OR GIVEN IN THIS AGREEMENT SHALL EXPRESSLY SURVIVE TERMINATION, CANCELLATION OR EXPIRATION OF THIS AGREEMENT. · 12.5 ANY PROVISION OF THIS CONTRACT IN GENERAL, AND ARTICLE 12 IN PARTICULAR, TO THE CONTRARY NOTWITHSTANDING, THE OWNER'S LIABILITY SHALL NOT IN ANY EVENT, FOR ANY REASON, UNDER ANY CIRCUMSTANCE, OR UNDER ANY THEORY OF LIABILITY EXCEED THOSE LIMITS OF LIABILITY CONTAINED IN SECTION 768.28 (5), FLORIDA STATUTES OF $100,000 FOR A PERSON OR $200,000 FOR AN INCIDENT OR OCCURRENCE, IT BEING THE OWNER'S EXPRESSED INTENT HEREIN NOT TO WANE ITS SOVEREIGN IMMUNITY AS PROVIDED BY LAW. ARTICLE 13 - LIABILITY INSURANCE. During the performance of this Agreement, and until final acceptance by Owner, Contractor shall maintain and keep in force, with insurers reasonably acceptable to Owner, the following types and minimum levels of insurance: Worker's Compensation Employer's Liability Statutory Limits $500,000 each occurrence $500,000 each employee f:\fonnsldesign2Florida .doc 10/29/96 12 ~ 1 ) Commercial General Liability, or self-insurance, including contractual liability and completed operations coverage $1,000,000 per occurrence $1,000,000 annual aggregate Commercial Automobile Liability, including coverage for owned, non-owned and hired vehicles $1,000,000 combined single limit per occurrence The foregoing insurance shall name Owner as an additional insured and shall provide for waivers of subrogation in favor of Owner. Further, prior to performance of any Work hereunder, Contractor shall provide Owner with Certificates of Insurance issued by the insurance company showing that the above minimum levels of insurance are in force. Such certificates shall provide that thirty (30) days prior: written, notice shall be given to Owner prior to cancellation or material modification of any such policy. ARTICLE 14 - OWNER"S PROPERTY INSURANCE. Upon Substantial Completion of any Work and until such time as Contractor has completed its warranty obligations under this Agreement, Owner shall insure, or at its election self-insure, for the full replacement, value existing facilities of Owner at or near the Site of the Project and the Facility itself. Owner shall name Contractor and its subcontractors as additional insureds and waive subrogation under such insurance provided that such additional insured status shall not extend beyond the time necessary for Contractor to fulfill its warranty obligations under ARTICLE 10. Owner hereby waives all rights of recovery or otherWise such as its insurers may have against Contractor and any of its affiliated or associated companies performing any part of the Work and its subcontractors from any loss, including, without limitation, loss of use and all consequential damages thereof, resulting from risks to be insured under this Article. This waiver is applicable after the limitation on liability set forth in Article 15 has been exceeded. ARTICLE 15 - LIMITATION OF LIABILITY. 15.! TO THE FULLEST EXTENT PERMITTED BY LAW, AND NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE TOTAL AGGREGATE LIABILITY OF CONTRACTOR AND CONTRACTOR'S PARENT, AFFILIATES, OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES, AGENTS AND SUBCONTRACTORS TO THE OWNER AND ANYONE CLAIMING BY, THROUGH OR UNDER OWNER WHETHER BASED IN TORT (INCLUDING NEGLIGENCE AND PROFESSIONAL ERRORS OR OMISSIONS LIABILITY), CONTRACT, WARRANTY, STRICT OR ABSOLUTE LIABILITY, BREACH OF STATUTORY DUTY OR OTHERWISE ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL NOT EXCEED TEN PERCENT ( 10% ) OF THE CONTRACT PRICE RECEIVED BY CONTRACTOR UNDER THIS AGREEMENT. f:\fonnsldesign2F1orida .doc 1 0129/96 13 ,~ I I 15.2 SUCH LIMITATION OF LIABILITY SHALL NOT APPLY IN RESPECT OF: (1) CONTRACTOR'S LIABILITY UNDER ARTICLE 4 FOR RISK OF LOSS OR DAMAGE TO WORK INCLUDING DAMAGE OR LOSS OF EQUIPMENT INTENDED FOR INCORPORATION IN THE FACILITY, AND (IT) THE INDEMNITIES SET OUT IN ARTICLE 12 TO THE EXTENT THAT THEY RELATE TO CLAIMS BY THIRD PARTIES. IN ADDITION, CONTRACTOR ACKNOWLEDGES AND AGREES THAT ANY LIABILITY OF CONTRACTOR PROVIDED FOR BY THE PROCEEDS OF THE INSURANCE MAINT AINED PURSUANT TO ARTICLE 13 - LIABILITY INSURANCE, AND ARTICLE 14 - OWNER'S PROPERTY INSURANCE, SHALL NOT BE COUNTED TOWARD ANY OF THE FOREGOING LIMIT A TIONS ON LIABILITY. 15.3 IN NO EVENT SHALL C_ONTRACTOR BE LIABLE TO OWNER, AND OWNER HEREBY RELEASES CONTRACTOR FR0M LOSS OR DAMAGE TO OR DESTRUCTION OF THE EXISTING FACILITIES OR OTHER STRUCTURES OR PROPERTY OF OWNER LOCATED AT OR ADJACENT TO THE WORK. ARTICLE 16 - OWNER'S AND CONTRACTOR'S REPRESENTATIVES. A. Owner hereby designates Brian Langille as the "Owner's Representative" whom Contractor shall be entitled to recognize and accept as Owner's agent with full power and authority to act for, and in the name, place and stead of Owner for any of the purposes for which Owner mayor shall have authority or responsibility under this Agreement. Contractor shall be entitled to rely on such designation until written revocation thereof . and the designation of a different Owner's Representative is received by Contractor. All communications from Contractor to Owner shall be delivered personally to Owner's Representative, or shall be deemed to have been received by Owner on the fifth business day following deposit of the same in the U.S. Mail with First Class postage prepaid and proper addressing to Owner's Representative as follows: City of Clearwater Attn.: Mr. Brian Langille 400 North Myrtle Avenue Clearwater, FL 33755 B. Contractor, hereby designates Mr. Gary Corless, CESI Construction Coordinator, as the "Contractor's Representative" whom Owner shall be entitled to recognize and accept as Contractor's agent, with full power and authority to act for, and in the name, place and stead of Contractor, for any of the purposes for which Contractor mayor shall have authority or responsibility under this Agreement. Owner shall be entitled to rely on such designation until written revocation thereof and the designation of a different Contractor's Representative is received by Owner. All written Communications from Owner to Contractor shall be delivered personally to Contractor's Representative, or shall be deemed to have been received by Contractor on the fifth business day following deposit f:\fonnsldesign2F1orida .doc 1 0/29/96 14 41 I I of the same in the U.S. Mail with First Class postage prepaid and proper addressing to Contractor's Representative as follows: Address: 601 S. Lake Destiny Drive, Maitland, FL 32751 Telephone Number: (407) 838-7109 ARTICLE 17 - TERMINATION. A. If Owner shall fail to pay Contractor in accordance with the provisions of Article 6 hereof, Contractor may, upon thirty (30) days prior written notice to the other party terminate this Agreement, provided that Contractor shall not be entitled to terminate the carrying out of the Work if Qwner in .good faith disputes any amount due and has paid the undisputed amo~t and provided also that the carrying out of the Work shall not terminate if at the end of the thirty (30) day period the payment has been made. B. If the Work shall be delayed for more than sixty (60) days on account ofan event of Force Majeure, either Owner or Contractor may, upon thirty (30) days prior written notice to the other party terminate this Agreement, provided that the Agreement shall not terminate if at the end of such thirty (30) day period the event of Force Majeure has ended. C. This Agreement may also be terminated by either party upon thirty (30) days prior written notice if the other party (1) is dissolved (other than pursuant to a consolidation, merger or amalgamation), (2) becomes insolvent or is unable to pay its debts as they become due, (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors, (4) institutes or has instituted against it a proceooing seeking judgment of insolvency or bankruptcy or any other relief under bankruptcy or insolvency law or other similar law affecting creditors' rights, or (5) is in material breach of the Agreement (other than the payment failure covered by paragraph A above) and has failed to cure such material breach within such thirty (30) days' notice and at the end of the thirty (30) day notice of termination, the breach remained uncured. D. In the event of termination of this Agreement pursuant to this Article 17 due to Contractor's default, Contractor shall have the right to remove all materials belonging to Contractor and not paid for by Owner from the Work Site, and Contractor shall repay to Owner the amount of the Contract Price received by Contractor less (I) that portion of the Contract Price earned to date of termination, and (2) Contractor's costs in connection with termination of the Work. Owner shall thereafter assume all obligations, commitments or other liabilities that Contractor shall have theretofore incurred or made in connection with its performance of the Work and for which Contractor has not been paid or released. E. In the event of termination of this Agreement pursuant to this Article 17 due to Owner's default or a Force Majeure event, Contractor shall have the right to remove all things from the work site belonging to the Contractor, and Owner shall reimburse Contractor for all charges and costs associated with the cessation of Contractor's services, plus that f:\fonns\design2F1orida .doc I 0/29/96 IS ~ I I portion of Contractor's Contract Price earned to the date of such termination plus such extra costs of performance of the Work as Contractor may have incurred on account of such default or delay. Owner shall thereafter assume all obligations, commitments or other liabilities that Contractor shall have theretofore incurred or made in connection with its performance of the Work and for which Contractor has not been paid or released. F. Any termination pursuant to this Article 17 shall be without prejudice to any existing rights, powers, or remedies of either party under this Agreement. ARTICLE 18 - PERMITS. A. Owner shall be responsibleJ at OW!ler's expense, for obtaining all licenses, permits or other approvals from any governmental or regulatory body which are necessary to the performance of the' Work under this Agreement, including without limitation, effluent air or stream treatment permits or licenses, building permits, and easements for permanent structures or permanent changes in existing facilities. Owner shall not be responsible for obtaining those permits that a construction contractor typically obtains to perform the construction work. B. Owner agrees to grant to Contractor any and all suitable rights-of-way and easements or any other authorizations necessary and/or incidental for the installation and removal of the Facility and appurtenances deemed essential or desirable by Contractor. C. IT SHALL BE A CONDITION PRECEDENT TO CONTRACTOR'S OBLIGATION TO . PERFORM WORK UNDER THIS AGREEMENT THAT'OWNER OBTAlN AND DELIVER TO CONTRACTOR ALL FEDERAL, STATE AND LOCAL LICENSES, PERMITS, AND OTHER APPROVALS, INCLUDING ENVIRONMENT AL LICENSES AND PERMITS, AND ALL RIGHTS OF WAY, EASEMENTS AND OTHER AUTHORIZATIONS NECESSARY FOR THE PERFORMANCE OF WORK UNDER THIS AGREEMENT, AND THAT CONTRACTOR DETERMINE THAT THE DOCUMENTS RECEIVED FROM OWNER MEET CONTRACTOR'S COMPLETE SATISFACTION. ARTICLE 19 - INDEPENDENT CONTRACTOR. It is understood and agreed that the relationship created by this Agreement is that of principal and independent contractor and not that of principal and agent, master and servant, or employer and employee; and Contractor and its employees shall not be the employees of Owner for any purpose whatsoever. Owner shall designate the services it desires to be performed and the ultimate results to be obtained, but shall leave to Contractor the methods and details of performance, Owner being interested only in the results obtained and having no control over the manner and method of performance or the obtaining of such results provided however that Contractor shall perform the Work hereunder in a good, workmanlike manner using competent f:\fonnsldesign2F1orida .doc I 0129/96 16 .41) . ~ I I and qualified individuals and in accordance with industry practices. The Contractor shall have complete power and authority to make and shall make all decisions concerning his activity and all other factors affecting these services. ARTICLE 20 - MECHANICS LIENS. Contractor shall indemnify and save Owner harmless from any and all liens and claims of liens for labor, materials and services furnished to or by Contractor, its subcontractors and suppliers (except those liens or claims arising out oflabor, materials and services furnished to Contractor by Owner) when such liens or claims therefore result from Contractor's failure, or its subcontractors' failure, to pay amounts due for such labor, materials or services, except when the failure to pay results from a bona fide dispute or the failure of Owner to pay Contractor in accordance with Article 6;. In such event, Contractor shall, at Owner's expense, promptly cause the removal or discharge of any lien asserted against Owner or Owner's property by posting of bonds or otherwise. ARTICLE 21 - COMPLIANCE WITH LAWS. Contractor shall comply with all laws and regulations applicable to the Contractor in the performance of its obligations under this Agreement, including without limitation, applicable federal, state and local wage and hour laws and regulations and all other laws and regulations pertaining to employer-employee relations. Furthermore, Contractor shall comply with Owner's safety rules and regulations at the Project Site which conform with OSHA and applicable State . regulations. . ARTICLE 22 - EXISTING HAZARDOUS MATERIALS. A. Upon the discovery of any Hazardous Material existing on the Site at the date of this Agreement, Contractor shall (i) promptly cease work in the affected area and direct its workers and subcontractors not to remove or further disturb the material or item; (ii) promptly notify Owner of such discovery; (iii) use all reasonable efforts to mitigate the effects of any such discovery on the performance of the Work; and (iv) follow any and all directions of Owner or its representatives with respect to such discoveries. Owner hereby expressly indemnifies Contractor and its subcontractors from all responsibilities, claims or liabilities arising from pre-existing Hazardous Materials on the Site. Owner shall be responsible for the removal from the Site or for otherwise making safe in accordance with applicable law any such Hazardous Material existing on the Site at the date of this Agreement, and Contractor shall not be required to remove or handle any such Hazardous Material. Any delay or additional cost as a result of such discovery or Owner's directions with respect thereto shall be the responsibility of Owner. f:\fonns\design2Florida .doc I 0/29/96 17 ~ ~. I I B. Contractor shall not, without the written consent of Owner, bring onto the Site any Hazardous Materials. Contractor shall upon termination of this Agreement remove any Hazardous Materials brought onto the Site by Contractor in full compliance with all applicable laws and regulations. Contractor shall be solely liable for any and all damages, fines and penalties in any way connected with Hazardous Materials brought onto the Site by Contractor or with Contractor's failure to comply with any law or regulation applicable to Contractor's use of Hazardous Materials at or removal or failure to remove any Hazardous Materials from the Site. ARTICLE 23 - NO OTHER AGREEMENTS. All negotiations, proposals and agr~ements _prior to the date of this Agreement are superseded hereby, there being no agreements,-warranties, or understandings other than those written or specified herein, unless oiherwise provided. . This Agreement constitutes the entire agreement between the parties on an arms-length basis and no obligation or covenant of good faith or fair dealing shall be implied or interpreted as conferring upon either party any right, duty, obligation or benefit other than expressly set forth herein, not withstanding the fact that certain of the terms and conditions hereof may give either party discretion in the manner of performance under this Agreement. No changes, modifications or amendments to this Agreement shall be valid unless agreed to by the parties in writing and signed by their authorized officers. ARTICLE 24 - SUCCESSORS AND ASSIGNS. . This Agreement shall be binding upon and inure to the benefit of'the respective successors, administrators and assigns of Contractor and Owner. ARTICLE 25 - NON-WAIVER. The failure by either party to this Agreement, at any time, to enforce or to require strict compliance or performance by the other party to any of the provisions of this Agreement shall not constitute a future waiver of such provisions and shall not affect or impair in any way its rights at any time to enforce said provisions or to avail itself of such remedies as it may have for any breach thereof. ARTICLE 26 - LAW TO GOVERN. THE TERMS OF THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED UNDER, AND ALL RESPECTIVE RIGHTS AND DUTIES OF THE PARTIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW. ANY DISPUTE RELATING TO, ARISING OUT OF OR CONNECTED WITH THIS AGREEMENT SHALL BE FILED AND MAINTAINED IN f:\fonnsldesign2F1orida .doc I 0/29/96 18 ':J I I THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF HOUSTON, HARRIS COUNTY, TEXAS IF NOT IN DISPUTE RESOLUTION OR ARBITRATION PURSUANT TO ARTICLES 27 AND 28 HEREOF. ARTICLE 27- DISPUTE RESOLUTION. A. Any matter or dispute or difference of whatever nature howsoever arising under, out of or in connection with this Agreement between the parties, or its breach or termination thereof (collectively "Disputes") shall be referred to the dispute resolution procedures in this and the next following ARTICLE. Any party has the right to request the other to meet to discuss Disputes. B. Each Party to this Agreement shall-select one or two high-level non-lawyer business representative(s) not concerned with the day-to-day performance of their appointor's obligations under this Agreement to sit on a panel (the "Panel") as soon as reasonably practicable after commencement of performance of the Work. Each party shall notify the other of the name and relevant qualifications of the Panel Member(s) it has selected within thirty (30) days of their selection. Each Party may appoint substitute or replacement Panel member(s) from time to time and shall notify the other of the name and relevant qualifications of the substitute or replacement Panel members so appointed within 30 days of their appointment. The Panel shall meet as and when necessary (from time to time) for the purposes of this Agreement and each Party shall in turn select and notify to the other a reasonable venue for meetings of the Panel. Each party shall bear the costs and expenses of those members of the Panel appointed by it and the costs and expenses of providing a venue for meetings of the Panel shall be borne by the party choosing the venue. C. All Disputes shall first be submitted to the Panel for resolution. Either party shall give to the other written notice setting out the material particulars of the Dispute and requiring the Panel to meet within 15 days of the date of receipt of such notice by the relevant party. The Panel will attempt in good faith and using its best endeavors at all times to resolve the Dispute and produce written terms of settlement. D. If the Dispute is not resolved as evidenced by the signing of the written terms of settlement described in paragraph (C) above by an authorized representative of each party within thirty (30) days, or such longer period as may be mutually agreed by the parties, after the date of receipt of the notice described in paragraph (C) above by the relevant party, or if the Panel is not required or fails to so meet as required by the notice described in paragraph (c) above, then the provisions of ARTICLE 28 shall apply. f:\fonnsldesign2F1orida .doc I 0129/96 19 ItJ .. I I ARTICLE 28 - ARBITRATION. A. Where any Dispute is not resolved as provided for in ARTICLE 27, then the following provisions shall apply: B. Any claim, dispute or controversy arising out of or relating to this Agreement, shall be submitted to binding arbitration by the American Arbitration Association for arbitration in Orange County, Florida, in accordance with the Construction Industry Arbitration Rules then in effect, except as more particularly provided herein. The parties agree that an officer or other representative with authority to resolve the dispute for each party shall attend the arbitration. There shall be three arbitrators, with each party selecting one; the third arbitrator, who shall be the chairman of the panel, shall be selected by the two party- appointed arbitrators. The ~laimant _shall name its arbitrator in the demand for arbitration and the responding. party, sha11 name-its arbitrator within thirty (30) days after receipt of the demand for arbitration. The third arbitrator shall be named within thirty (30) days after the appointment of the second arbitrator. The American Arbitration Association shall be empowered to appoint any arbitrator not named in accordance with the procedure set forth herein. Each arbitrator will be qualified by at least ten (10) years experience in construction, and/or engineering of natural gas pipeline facilities. C. Each of the parties hereto consents to the procedure herein set forth. In deciding the substance of any claim, dispute or disagreement, the arbitrators shall apply the substantive laws of the State of Texas. The parties agree to make discovery and disclosure of all matters relevant to the dispute to the extent and in the manner provided by the Federal Rules of Civil Procedure. The arbitrators shall rule on all requests for discovery and . disclosure and discovery shall be completed within ninety (90)' days of the date of the first notice of the dispute pursuant to Article 27, Paragraph C. The arbitrators shall issue a final ruling within one-hundred twenty (120) days of the first notice pursuant to Article 27, Paragraph C. The ruling of the arbitrators shall be in writing, signed, and shall contain a statement of findings and conclusions of law in addition to the award or decision. The decision of the arbitrators shall be final and binding upon the parties, in so far as the law allows, without the right of appeal to the courts. The award rendered by the arbitrators shall be final, in so far as the law allows, and judgment thereon may be entered by any court having jurisdiction thereof. The costs and expenses of the arbitration (including reasonable attorney's fees) will be paid by the losing party, unless the arbitrators determine that it would be manifestly unfair to honor this agreement of the parties and determine a difference allocation of costs. D. The arbitrators shall not have the authority or power to alter, amend or modify any of the terms or conditions of the Agreement of the parties. The arbitrators' powers shall be limited to enforcement of this Agreement as to the issues raised by the parties, and shall not include tort claims or the power to award consequential, indirect, special, punitive, or exemplary damages. f:\fonnsldesign2F1orida .doc I 0129/96 20 ;44 I I E. Fast Track Arbitration. Within ten (10) days of the effective date of this Agreement, Owner and Contractor shall decide upon an independent third party mutually acceptable to both parties (the Fast Track Arbitrator) and an alternate third party (the "Alternate") to decide disputes to be referred to the Fast Track Arbitrator as provided in this section. The Fast Track Arbitrator and the Alternate each shall have experience in the construction and/or engineering of gas pipeline facilities. Either party may refer disputes as described in Article 3 Changes in the Work, or Article 8 Acceptance of the Work, or as mutually agreed by both parties to the Fast Track Arbitrator by providing written notice of its intent to the Fast Track Arbitrator and to the other party. If a party has given written notice of its intent to refer such a dispute, the other party shall be bound to fast track arbitration as provided in this Section 28 (E). In the event that the Fast Track Arbitrator is unavailable to resolve the dispute within the time period stated in this section, the dispute shall be referred to the Alternate. The Fast Track Arbitrator or the Alternate, as the case may be (the "Arbitrator") shall be_.directed to-resolve the dispute within five (5) working days of referral. The parties shail cooperate in good faith in providing to the Arbitrator any information reasonably needed to resolve the dispute. The decision of the Arbitrator shall be final and binding and non-appealable to the extent that the law allows. The cost and expenses shall be borne by the losing party unless the Arbitrator finds that it would be manifestly unfair to honor this agreement of the parties and determines a different allocation of costs. F. Performance of the Agreement shall continue during arbitration proceedings or any other dispute resolution mechanism pursuant to ARTICLES 27. OR 28. No payment due or payable by the Owner shall be withheld on account of a pending reference to arbitration or other dispute resolution mechanism; provided that in the event Owner disputes the amount or content of any invoice, Owner shall not be responsible for payment of such invoice or portion of such invoice that is pending reference to arbitration or other dispute resolution mechanism until such dispute is resolved. Any disputed amount which is ultimately determined to have been payable shall accrue interest for failure to pay as described in Article 6 herein. The amount not in dispute shall be promptly paid as described in Article 6. ARTICLE 29 - SEVERANCE OF TERMS. If any provision of this Agreement shall be declared invalid, unenforceable or illegal by the courts of any jurisdiction to which it is subject, such invalidity, unenforceability or illegality shall not prejudice or affect the validity, enforceability and legality of the remaining provisions of this Agreement. ARTICLE 30 - ASSIGNMENT. This Agreement or any right or obligation contained herein may be assigned, or transferred, all or in part, by Owner or Contractor, respectively, to affiliates of Owner or Contractor, provided that Owner or Contractor, as the case may be, guarantees the performance of such affiliate's f:\fonnsldesign2F1orida .doc I 0129/96 21 .pj \. I I obligations under this Agreement to the reasonable satisfaction of the other party hereto. This Agreement may be assigned or transferred to other parties only upon the prior written consent of the other party hereto, which consent shall not be umeasonably withheld. Contractor may, upon consent of the Owner, which consent shall not be unreasonably withheld, subcontract any portion of the Work to a subcontractor. In no case shall Owner's consent of any subcontract relieve Operator of any of its obligations under this Agreement. ARTICLE 31 - NO THIRD PARTY BENEFICIARY. This Agreement is for the sole and exclusive benefit of the parties hereto and shall not create a contractual relationship with, or cause of action in favor of any party not a signatory to this Agreement. The obligations and legal duties imposed on any party or parties by this Agreement are owed exclusively to the other party or parties and are not owed to any party not a signatory to this Agreement. ARTICLE 32 - EXHIBITS. All exhibits referenced in this Agreement shall be incorporated into this Agreement by such reference and shall be deemed to be an integral part of the Agreement. f:\formsldesignlFlorida .doc I 0/29/96 22 ,,11 ~ ,//4 ,. I I ARTICLE 33 - COUNTERPARTS. This Agreement may be signed in any number of counterparts and each counterpart shall represent a fully executed original as if signed by both parties. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be effective as of the date and year set forth in the first paragraph herein regardless of the date of execution. Countersigned: ~--- ~ ~tl Mayor-Commissioner CITY OF CLEARWATER, FLORIDA By: dJ~~-n William B. Home, II Interim City Manager " Approved as to form: Attest: ~~~ Assistant City Attorney CITRUS ENERGY SERVICES, INC. "Contractor" BY: Date: M~ /- d2-r/t:TO / Name: Danny Pribble Title: Vice President Operations 23 .. J I EXHIBIT "B-2" SAMPLE FINAL COMPLETION CERTIFICATE (Referenced in Section 8(C) CITRUS ENERGY SERVICES, INe. To: OWNER Subject: Certificate of Final Completion. By this certificate CITRU~ ENE~GY SERVICES, INC. certifies that all Punchlist items have been corrected. " Therefore, the Work is deemed to have achieved Final Completion. Sincerely, Acknowledged and Agreed , . Signature Name Title Date f:\fonnsldesign2F1orida .doc 1 0129/96 24 .. I I EXHIBIT "B-1" SAMPLE SUBSTANTIAL COMPLETION CERTIFICATE (Referenced in Section 8 (B) CITRUS ENERGY SERVICES, INe. To: OWNER Subject: Certificate of Substantial Completion By this certificate CITRUS ENERGY SERVICES, INe. certifies that: (i) the Work is substantially complete in accordance with the Scope of Work, all design specifications and. all apglicable laws and permits; (ii) all Change Orders are closed and the Facility is ready for and constructed for its intended use up to its rated capacity as set out in the Scope of Work; (iii) the tests as listed in Exhibit "A" of the Construction Contract have been conducted and the results of such tests have been delivered to owner; (iv) Contractor has prepared and submitted the applicable Punchlist as required under Section 8 (B). Sincerely, Acknowledged and Agreed Signature Name Title Date f:\fonnsldesign2F1orida .doc I 0/29/96 23 . 1(1 ~ J I Exhibit A Scope of Work Citrus Energy Services, Inc. (CESI or Contractor) will provide the turnkey design, material procurement, and construction of the proposed 6" lateral for the City of Clearwater (Clearwater or Owner) in Pasco County, Florida. CESI will provide the drawings of the proposed facilities when complete. The following scope of work is based upon the February 15,2000 meeting at Clearwater's offices, and subsequent information as supplied by Clearwater. I. The 6 inch pipeline will begin 5 feet downstream of the purge valve on the meter station outlet and terminate at the Clearwater existing pipeline installed in the north right of way of Mitchell Boulevard. 2. A purge valve will not -be installed at the end of the pipeline since this location is in the road right of way. The pipeline will be purged and packed from the existing Clearwater pipeline through the purge valve at the Trinity Gate Station. 3. CESI will provide the 6 inch class 150 RFWN flange, bolts, and either a ring gasket or an insulation gasket to connect the 6 inch pipeline to the valve on the Clearwater pipeline. Clearwater will install the tap valve on their existing pipeline. This valve must be in place at the time CESI commences work on the 6 inch pipeline. 4. The 6 inch pipeline length is approximately 770 feet. This distance was scaled from the plat provided by Clearwater at the February 15 meeting. Since then, the 20 foot temporary construction easement has been modified per Mr. Langille's fax to"Mr. Bob Bouchard on May 8, 2000. 5. The installation of the Clearwater 6 inch pipeline will be done at the same time as the installation of the Florida Gas Transmission Company CFGT) 4 inch lateral from the existing 4 inch valve on the 16 inch Anclote Lateral to the inlet of the Trinity Gate Station. The FGT and Clearwater pipelines will be installed in the same ditch. 6. Clearwater will obtain the easement for both the 4 inch and 6 inch pipelines. The permanent easement width will be 15 feet. An additional 20 foot wide temporary work space easement will be required and has been modified per Mr. Langille's fax to FGT regarding placement of the proposed temporary easement. Please see the attached plat for the new location of the temporary work space easements. 7. The cleanup and resodding of the easement and temporary work space (or as required by permit conditions) will be done by others (FGT) where both pipelines will be installed in the same ditch. CESI will cleanup and resod the easement and temporary work space where the Clearwater 6 inch pipeline is installed south of the FGT tap to the Clearwater tap in Mitchell Boulevard. f:\fonnsldesign2 Florida .doc I 0/29/96 25 ~ 47 '''t ... I I 8. The 6 inch pipeline will be purged, packed, and placed in service by Clearwater. 9. Others (FGT) will obtain the environmental permits. 10. Clearwater will provide the design, material, and installation of the cathodic protection equipment for the 6 inch pipeline. II. At the request of Clearwater, CESI will not provide radiographic inspection for the 6 inch pipeline. 12. Others (Motorfuelers, Inc.) will install the Trinity Gate Station. CESI will verify that facilities are functioning properly prior to turning over to Clearwater. CESI will provide a job book for the project which includes the CESI Construction Contract, material requisitions and purchase orders, material certification reports, major equipment vendor brochures and operation and maintenance manuals, construction inspectors' reports, radiographic inspection reports, inspectors' corrections showing the facility in the as-built condition and with the radiographic film J.D. number locations, preliminary and/or as-built survey notes (if survey is performed). CESI will provide facility as-built drawings. . . f:\fonnsldesign2F1orida .doc I 0/29/96 26