1 AGREEMENT FOR THE PURCHASE AND SALE OF EQUIPMENT
THIS AGREEMENT FOR THE PURCHASE AND SALE OF EQUIPMENT (“Agreement”) is made and entered into by and between the CITY OF ANAHEIM, a municipal corporation (“Purchaser”), and VETERAN SUPPLY SERVICES , a California Limited Liability Company (“Seller”), on this _____ day of April, 2023 (the “Effective Date ”). Seller and Purchaser are sometimes referred to herein collectively as the “Parties” and individually as a “Party”.
RECITALS
WHEREAS, Purchaser wishes to purchase certain equipment from Seller and further wishes for Seller to assemble the equipment and provide certain technical direction in connection with the initial operation of such equipment, and certain other services as described herein; and
WHEREAS, Seller wishes to provide such equipment and technical direction and services to Purchaser in accordance with the terms and conditions hereof.
NOW, THEREFORE, for and in consideration of the mutual promises of the Parties set forth herein and other valuable consideration, the Parties agree as follows:
1. DEFINITIONS
1.1 “Affected Party” has the meaning set forth in Section 11.1.
1.2 “Agreement” means this Agreement for the Purchase and Sale of Equipment, consisting of the Terms and Conditions, Appendices A through D, and all written amendments thereto.
1.3 “Applicable Laws ” means all laws, treaties, ordinances, judgments, decrees, injunctions, writs and orders of any court, arbitrator or governmental agency or authority and rules, regulations, orders, interpretations and permits of any national, federal, state, county, municipal, regional, environmental or other governmental body, instrumentality, agency, authority, court or other body ha ving jurisdiction over the Facility, the Equipment, the financing of either, the Work, or either Party’s obligations under this Agreement, as may be in effect from time to time.
1.4 “Applicable Permits ” means all valid consents, waivers, franchises, variances, permits, authorizations, concessions, licenses or orders of or from any governmental agency, body, instrumentality, court or other body which are required to be obtained or maintained in connection with the Facility, the Equipment, the financing of either, The performance of the Work, or either Party ’s obligations under this Agreement, as may be in effect from time to time.
1.5 “Bidder” means, as used in the Specification, Seller.
1.6 “Business Day” means any calendar day other than Saturday, Sunday or national holidays in the United States of America.
2 1.7 “Confidential Information” has the meaning set forth in Section 17.1.
1.8 “Contract Price” has the meaning set forth in Section 2.3.
1.9 “Delivery Point ” means Southwest Substation located at 1627 S. Ninth Street , Anaheim, California.
1.10 “Drawings” mean those drawings, schematics, diagrams, plans, descriptive literature, illustrations or other representations of the Equipment identified in the Specifications.
1.11 “Drawing Delivery Schedule” means the document submittal schedule set forth in the Specifications.
1.12 “Equipment” means part of an outdoor, three -phase, four -wire, grounded distribution system. All primary components of the switchgear (circuit breakers, disconnect switches, grounding devices, bus-bars, CTs, PTs, cable boxes, etc.) shall be rated in accordance with the basic primary ratings of ANSI C37.20 and relevant standards of the attached specification.
1.13 “Facility” means the electricity generation facility in which the Equipment will be installed, known as the “Southwest Substation”.
1.14 “Field Performance Test” has the meaning set forth in Section 7.2.
1.15 “Final Acceptance” has the meaning set forth in Section 8.2.
1.16 “Guaranteed Delivery Date” means December 31, 2024 or such later date specified in writing by Purchaser.
1.17 “Liabilities” means liability, monetary losses, penalties, fines, judgments, expenses (including reasonable attorneys’ fees and court costs) and other damages incurred.
1.18 “Personnel” means, with respect to a Party, the employees, directors, officers, agents, representatives and any third party independent contractors with whom such Party contracts.
1.19 “Punch-List” has the meaning set forth in Section 8.2.
1.20 “Purchaser Event of Default” has the meaning set forth in Section 14.3.1.
1.21 “QA/QC Program” has the meaning set forth in Section 4.1.
1.22 “Receiving Party” has the meaning set forth in Section 17.2.
1.23 “Specifications” means Specification 15 kV Metal Clad Switchgear attached hereto as Appendix C and incorporated herein by reference.
3 1.24 “Supplier” means any individual, firm, partnership, corporation or contractor at any tier having an agreement with Seller to perform a portion of Seller ’s obligations under this Agreement.
1.25 “Technical Direction” means any instruction, direc tion, information or assistance provided by Seller or its Personnel to Purchaser, either in writing or orally, concerning the installation and/or initial operation of the Equipment.
1.26 “Warranty” has the meaning set forth in Section 9.1.1.
1.27 “Warranty Period” has the meaning set forth in Section 9.1.2.
1.28 “Work” means all work and services which Seller is to perform in connection with its fulfilling its obligations under this Agreement. The Work is further described in the Specifications.
2. SCOPE OF SUPPLY
2.1 Purchase, Supply, and Delivery of Equipment
2.1.1 Delivery of Equipment
(a) Pursuant to the provisions of this Agreement, Purchaser will purchase and accept at, and Seller will design, manufacture, test, pack, supply and deliver the Equipment to, the Delivery Point. Seller shall provide Purchaser at least twenty (20) calendar days written notice prior to shipment of any Equipment
(b) Notwithstanding anything to the contrary in this Section 2.1.1, if Purchaser is not able to take delivery of such Equipment , at the agreed delivery date, within thirty (30) days after receiving written notification from Seller that such Equipment is ready for delivery as a result of any cause not attributable to Seller, Purchaser shall inform the Seller that it will avail itself of the option to have the Equipment stored at Selle r’s facility until such time the Purchaser is ready to accept delivery. In such event, the following conditions shall apply:
(i) Purchaser will avail itself of the thirty (30) calendar days of free storage which is already included in the unit costs of the Equipment; and (ii) all expenses incurred by Seller (which such expenses must be reasonable), such as for prepar ation for and placement of Equipment into extended storage, handling, inspection,
preservation, insurance, storage, removal charges and any taxes shall be payable by Purchaser upon submission of Seller’s invoices and documentation therefor.
(c) Without prejudice to Section 6.4, if any of the Equipment cannot be delivered to Purchaser when ready due to any cause attributab le to Seller or Seller’s Personnel, Seller shall be responsible for all costs 4 incurred by Seller. When conditions permit, Seller shall resume delivery of such Equipment to the Delivery Point.
2.1.2 Packing. Seller shall pack the Equipment for shipment in Seller ’s factory standard export packing, which shall be suitable for transport, including the use of shock recording equipment and other equipment, and the taking of such precautions, as per the Specifications.
2.2 Taxes and Reporting.
2.2.1 Project Construction. Seller s hall cooperate with Purchaser in all matters relating to taxation and the collection of taxes, particularly with respect to the self-accrual of use tax. Prior to commencement of construction, Seller shall obtain a Board Equalization sales and use tax sub- permit for the construction site and allocate eligible sales and use tax payments for individual contracts over $5,000,000 to the Purchaser. Seller will follow the guidelines set forth in the relevant sections of the Sales and Use Tax Regulations. The Seller must, on its quarterly use tax return, identify the use tax applicable to the Facility and use the appropriate Board of Equalization forms and schedules to ensure that the tax is allocated to the Facility. In determining the amounts of use tax to be paid, the Seller must follow the Sale and Use Tax Regulations. In the event it is later determined that certain eligible use tax amounts were not included on Seller's use tax return(s), Seller must agree to amend those returns and file them with the Board of Equalization in a manner that will ensure that the Purchaser receives such additional use tax from the project.
2.2.2 Use Tax Direct Payment Process . Seller shall follow the Use Tax Direct Payment Permit Process established in the Revenue and Taxation Code and use the sub -permit for all qualifying individual purchases in excess of $100,000 so that the local share of its sales/use tax payments is allocated to the Purchaser as the point of sale.
2.2.3 Fixtures, Materials and Equipment . It is understood and agreed that an y fixtures, materials and equipment shipped from outside California, with a purchase total that exceeds $100,000 purchased directly by Seller and shipped to Purchaser’s Facility, may also be eligible for direct allocation of sales/use tax to the Purchaser. Seller shall complete and submit to the Purchaser the Use Tax Direct Payment Permit. Upon request, Seller shall provide to Purchaser on a semi -annual basis with a list of purchases exceeding the $100,000 threshold during the preceding six -month period, including the amount of the purchase and, if readily available, the name and contact information for the vendor upon request by the Purchaser. The Purchaser agrees to review the semi-annual list of purchases made by Seller.
2.2.4 Permits. In completing the permit, Seller shall use the address of the Facility as its business address and may use any address for its mailing address. 5 Copies of the permit(s) shall also be delivered to the Public Utilities General Manager. The Seller shall provide documentation to the Purchaser that the sub-permit(s), if any, have been obtained and provide the sub- permit number(s) to Purchaser. The permit(s) must be obtained as soon as reasonably possible after Seller receives a Notice to Proceed. Seller shall not order any materials or equipment of $100,000 from vendors outside California until the permit(s) are obtained; and if Seller does so, it shall be a material breach of this Agreement.
2.3 Contract Price and Payment . In consideration for the Work and the Equi pment, Purchaser will pay Seller a total amount of Three Million, Nine Hundred Eight - Two Thousand, Seven Hundred Fifty -Seven Dollars and Thirty -Eight Cents ($3,982,757.38) (the “Contract Price” ). Subject to the terms of this Agreement, Purchaser will pay t he Contract Price in accordance with and subject to the provisions set forth in Appendix A. All taxes applicable to the Equipment, the Work or the Technical Direction, including without limitation all taxes related to any services provided by Seller and al l sales, use, excise, property or similar tax es on the Equipment are included in the Contract Price. The Contract Price also includes (and Seller will bear without reimbursement) any import duties, fees or other charges incurred to perform the Work.
2.4 Materials and Workmanship: This Agreement, including the Specifications, may describe certain specific materials, processes and products of manufacturers which will be required unless equivalent materials, processes or products are specifically approved in writing by Purchaser. The Equipment shall be manufactured using only the kind, make and quality of components and materials described in this Agreement. All Equipment furnished shall be (a) new and (b) manufactured and tested in accordance with the technical testing schedules and standards for manufacture set forth in the Specifications (including ANSI/IEEE), and where specific standards are not referenced, in accordance with the highest standards of the industry. Should Seller propose to furnish equivalent mate rials, processes or products, either in substitution for or as an alternate to those materials, processes and products required under the Specifications, Seller will submit full details thereof and obtain Purchaser ’s prior written approval, Purchaser ’s decision as to the suitability of any such equivalent materials, processes or products will be final, but the approval of Purchaser will not relieve Seller from its responsibility concerning the Work and will not affect the Warranty.
2.5 Compliance with Laws and Permits . Seller will, at its cost, comply with all Applicable Laws and all Applicable Permits. Seller will, at its cost, obtain and maintain any permits required for Seller to perform the Work.
2.6 Transfer of Title and Risk of Loss . Title (legal and beneficia l ownership) in the goods comprising the Equipment shall pass to Purchaser upon the completion of all of the following: (a) delivery to the Delivery Point ; (b) testing and acceptance of Equipment by Purchaser at the Delivery Point: and (c) Final Acceptance criteria of Section 8.2.2. Risk of loss to the Equipment will remain with Seller at all times 6 until the conditions in the forgoing sentence are met , at which time it will pass to Purchaser. Notwithstanding any transfer of title or risk of loss as described herein, Seller shall at all times remain responsible for any damage to Purchaser’s property or Equipment caused by Seller or its Personnel. Notwithstanding anything to the contrary in the foregoing, Seller shall retain the ownership of its studie s, shop drawings and models communicated to Purchaser, or of which Purchaser may have had knowledge in fulfillment of the Agreement; provided, that Purchaser will have a right to use the same for execution of the Agreement and operation, ownership and maintenance of the Equipment.
3. Drawings and Submittal Requirements.
3.1 Submittal of Drawings . Seller will, in accordance with the Drawing Delivery Schedule and as f urther described in the Specifications , furnish to Purchaser all necessary Drawings, including necessary details for the design of proper supporting structures, as required and with such detail as necessary for Purchaser to be able to operate, maintain and obtain replacement parts for the Equipment. Seller will identify in such documentation the originator of the same if the originator is other than Seller.
3.2 Limits of Purchaser ’s Review . Review and comment by Purchaser of Seller ’s submittals will not relieve Seller of its responsibility to meet this Agreement’ s requirements (including schedule requirement s) and to supply Equipment that interfaces with Purchaser-furnished components of the Facility and complies with the requirements of this Agreement. All Drawings will be submitted to Purchaser for comment or approval of general design, general dimensions a nd apparent suitability. Purchaser ’s approval will not relieve Seller of any responsibility for furnishing Equipment which meets the requirements of this Agreement, and which will operate as guaranteed by Seller, nor will it relieve Seller from responsibility for detail dimensions.
4. QUALITY CONTROL, EQUIPMENT TESTING, EXPEDITING, INSPECTION AND
REJECTION
4.1 Quality Assurance/Quality Control . As furth er described in the Specifications, Seller will develop a quality assurance and quality control program which shall be capable of providing assurance that design, purchasing, manufacturing, shipping, storage, assembly, testing, and examination of all Equipment, materials, and services shall comply with the requirements of this Agreement. Seller shall provide a copy o f such program to Purchaser for review and approval (as approved by Purchaser, the “ QA/QC Program ”). Seller shall maintain the QA/QC Program during the performance of Work under this Agreement. Seller will similarly require its Suppliers to provide and mai ntain approved quality control systems where applicable. Seller ’s and/or its Suppliers ’ failure to provide and maintain an approved quality control program until completion of Work and Purchaser ’s acceptance of the Equipment may be cause for rejection of such Equipment. Seller’s QA/QC Program will provide for controlling its Suppliers and for assuring that their 7 quality control systems are appropriate for the scope of their supply and are in compliance with the requirements of this Agreement.
4.2 Component Testing. Seller will provide at its own expense, and will cause its Suppliers to provide at their own or Seller’s expense, the equipment, facilities and personnel necessary for the performance of the tests specified in this Agreement to determine that each component comprising the Equipment conforms to the requirements of this Agreement . Purchaser will have the right, but shall not be obligated, to be present or represented during the performance of such tests. Seller shall notify Purchaser not less than thirty (30) days prior to the performance of any such tests so that Purchaser may attend and observe if it so chooses.
4.3 Purchaser’s Right to Expedite and Inspect . All components comprising the Equipment will be subject to expediting and inspection by Purchase r and its representatives (and by third parties as may be required by Applicable Laws), prior to Purchaser’s acceptance thereof. Purchaser and its representatives and such third parties may test the Equipment or have the Equipment tested in Seller ’s or its Suppliers’ facilities to determine whether the Equipment conforms to the requirements of this Agreement. If Purchaser is required to make additional or extended inspection visits as a result of Seller ’s or its Supplier ’s non-readiness to perform scheduled tests or Seller’s or its Suppliers’ failure to achieve satisfactory test results, all costs and expenses incurred by Purchaser in connection therewith will be to Seller’s account.
4.4 Access to Expedite and Inspect . Seller will provide Purchaser and its representatives (and third parties as described in Section 4.3), reasonable and safe access to its facilities and the facilities of its Suppliers in order to allow these persons to expedite and inspect the Equipment and to test or witness tests. Seller will identify for Purchaser all facilities in which the different parts or components of the Equipment are fabricated, manufactured or assembled, and will furnish all information that may be reasonably required by Purchaser to expedite the Equipment, to confirm or verify that the Equipment conforms to the requirements of this Agreement, and to test or witness tests specified in this Agreement, including the Specifications. The Contract Price includes business class airline travel, car rental, food and lodging costs for two (2 ) personnel to wit ness the factory acceptance tests (FAT) related to the Work and the Equipment.
4.5 Limitation on Shipping; Rejection/Acceptance of Components . No component comprising the Equipment will be accepted by Purchaser before all tests and inspections have been performed in accordance with this Agreement and the results of such tests or inspections have been accepted in writing by Purchaser. Seller will transmit certified copies of the test results and inspection reports to Purchaser in accordance with the required schedule date therefor. If any component comprising the Equipment is found to be defective or not in conformance with this Agreement, Purchaser will have the right, upon giving notice to Seller, to reject or accept such component of the Equipment as follows. If Purchaser rejects any component of the Equipment, such component will be returned to Seller, at Seller ’s risk, for (at 8 Purchaser’s option) repair, replacement or credit, as directed by Purchaser. All costs and expenses incurred in such return will be to Seller’s account. If Purchaser elects to accept a defective or nonconforming component comprising the Equipment, all costs and expenses incurred by Purchaser in connection with such election, including those incurred as a result of the modification or alteration of the Equipment necessary to make the Equipment conforming, will be to Seller ’s account.
4.6 Effect of Inspections. Any inspection or acceptance of the Equipment at Seller’s or its Suppliers’ facilities will not preclude subsequent inspection and/or rejection of any component of the Equipment if such component is later discovered to be defective or nonconforming or if Purchaser has reasonable grounds upon which to believe that such component may be defective or nonconformin g. Any inspection of the Equipment or any component thereof or any witnessing of tests conducted by Seller or its Suppliers or any performance of testing by Purchaser or its representatives or third parties shall in no event be deemed to constitute final acceptance thereof by Purchaser and will not discharge Seller from its obligation to meet this Agreement ’s schedule requirements and to supply Equipment that conforms to the requirements of this Agreement. Inspection by Purchaser or its representatives shall not be deemed to be supervision by Purchaser of Seller, its Suppliers, or their agents, representatives, servants, employees or subcontractors, but shall be only for the purpose of assuring that the Equipment complies with this Agreement.
5. TECHNICAL DIRECTION
In consideration for the Contract Price, Seller shall provide Technical Direction to Purchaser. Such Technical Direction shall be accurate and free from errors, omissions, faults or defects. In addition to Purchaser ’s Warranty obligations hereunder, i f Purchaser gives Seller written notice within a reasonable time after discovery of any defective or inaccurate Technical Direction, Seller shall (at such limes as instructed by Purchaser) re - perform work or make the repair or replacement necessary to remedy any nonconformity in the Equipment which is a result of defective or inaccurate Technical Direction, with the expenses thereof, including the cost of supervision and labor, to be borne by Seller. If Seller, after notice, fails to proceed promptly to cor rect any non -conformity in the Equipment which is a result of defective or inaccurate Technical Direction in accordance herewith, Purchaser may correct such non- conformity, or have such non- conformity corrected by others, and Seller shall be liable for all expenses so incurred. Purchaser shall, at no charge, provide reasonable facilities for office space and parking, if needed, to Seller’s personnel providing Technical Direction.
6. DELIVERY DELAYS
6.1 Time is of the Essence. Time is of the essence of Seller ’s obligations under this Agreement, and Seller acknowledges that Purchaser relies upon Seller ’s timely performance hereunder. The Seller will continuously monitor, report, forecast and control the progress of the Work in accordance with the schedule set forth i n this 9 Agreement. If such activities indicate a delay or potential for delay, Seller will take appropriate corrective measures and will make all reasonable efforts to avoid such delay.
6.2 Notification of Delays. With the exception of delays resulting from Force Majeure events (which are governed by Section 11), in the event of any delay or anticipated delay in Seller ’s performance, Seller will give Purchaser notice of such delay or anticipated delay in writing within three (3) Business Days after the occurrenc e of the event giving rise to the delay or anticipated delay became known to, or, with the exercise of reasonable diligence on the part of Seller, should have become known to, Seller. The notice to Purchaser will include a description of the source or caus e of the delay or anticipated delay and of the actions Seller intends to undertake to avoid or recover from the delay, which actions will be subject to Purchaser’s approval. If Seller fails to take steps that Purchaser determines are necessary to avoid or recover from the delay or fails to bring its performance into compliance with the requirements of this Agreement, Purchaser may direct Seller to accelerate its Work by supplying additional labor, including, but not limited to, overtime or additional shifts , and/or additional supervision and equipment as Purchaser may reasonably require, in order to recover and maintain the schedule set forth in this Agreement. All costs incurred by Seller to accelerate its Work will be to the account of Seller. Purchaser ’s receipt of Seller ’s notice of delay and/or Purchaser’s approval of Seller ’s proposed action to recover the delay and/or Purchaser’s directive to accelerate the Work will not constitute a waiver of any right or remedy available to Purchaser under this Agreement or at law or in equity, nor will be deemed a waiver of any other requirements of this Agreement.
6.3 Late Delivery of Submittals . Purchaser will suffer large financial losses if the required Drawings are not delivered on or before the scheduled dates set forth in the Drawing Delivery Schedule. It would be impracticable or extremely difficult to fix the actual damages resulting from such failure of delivery. Therefore, Seller will pay to Purchaser as liquidated damages and not as a penalty, the Specifi cations contain the amounts per calendar day for each calendar day that the delivery of each Drawing identified below is delayed beyond the specified delivery dates set forth in the Drawing Delivery Schedule; provided, that Seller will have a three (3) calendar day grace period before any such liquidated damages are assessed.
Notwithstanding the foregoing, Seller ’s aggregate liability for liquidated damage under this Section 6.3 shall not exceed fifty thousand dollars ($50,000). The Parties acknowledge that the liquidated damages sums in the Specifications represent a reasonable endeavor by the Parties to estimate a fair compensation for the foreseeable losses resulting from late delivery of required Drawings and shall be applicable regardless of the actual losses incurred. Such amounts, or part thereof, may be deducted by Purchaser from the balance, if any, due under this Agreement.
6.4 Late Delivery of Equipment: Liquidated Damages . Purchaser will suffer large financial losses if any of the Equipment is not delivered to the Delivery Point on or before its respective Guaranteed Delivery Date, including by virtue of the loss of 10 revenue to Purchaser due to the inability to transmit power and/or the loss or use of money invested in the Equipment. It would be impracticable or extremely difficult to fix the actual damages resulting from such delay of delivery. Therefore, with the exception of delays resulting from Force Majeure (which are governed by Section 11), if Seller delivers any of the Equipment to the Delivery Point after its respective Guaranteed Delivery Date, then Seller will pay to Purchaser, as liquidated damages and not as a penalty, the following amounts for each calendar day of such delay.
Calendar Days After Guaranteed
Delivery Date
Liquated Damages per Day
1-14 $2,000
15-21 $4,000
>21 $10,000
Notwithstanding the foregoing, Seller ’s aggregate liability under this Section 6.4 for liquidated damages for delays in delivery of the Equipment shall not exceed twenty percent (20%) of the amount that is equal to (a) the Contract Price, less (b) all shipping costs. The Parties acknowledge that the sums for liquidated damages as set forth above represent a reasonable endeavor by the Parties to estimate a fair compensation for the foreseeable losses resulting from late delivery of Equipment (but assuming delivery prior to the dates described in Section 14.2.1(a)), and shall, without prejudice to Section 14.2, be applicable regardless of the actual losses incurred. Such amounts, or part thereof, may be deducte d by Purchaser from the balance, if any, due Seller under this Agreement
7. TESTING
7.1 Factory Testing. Prior to shipment of the Equipment , Seller will pe rform tests on such Equipment at its factory that demo nstrate whether such Equipment is compliant with the S pecifications. Seller will provide Purchaser with at least 45 days prior notice of any such tests and will allow Purchaser and/or its representatives to be present at the factory for the same (if they so elect), In any event, Seller will provide to Purchaser a written report describing the results of such tests on the Equipment. If any such factory test indicates that any of the Equipment fails to pass the requirements of the Specifications, then Seller will not ship any of the Equipment to Purchaser unless and until compliance to Purchaser’s satisfaction is demonstrated via a subsequent factory test (with report of same delivered to Purchaser).
7.2 Field Performance Testing . A fter assembly of the Equipment is completed and upon notification to the Seller that such Equipment is ready for testing, Seller (or its representatives) shall carry out comprehensive performance tests, in a manner 11 consistent with the testing guidelines and criteria as described in Section 3.7 of the Specifications, to verify that su ch Equipment performs as required therein (such tests, collectively, the “Field Performance Test”). If any portion of the Equipment fails to so comply as required herein, then Purchaser will notify Seller in writing of this fact (such notice the “Performance Deficiency Notice”). Upon its receipt of the Performance Deficiency Notice with respect to any portion of the Equipment, Seller shall immediately take, at its own expense, all steps necessary to co rrect any deficiencies in such Equipment and shall also, at its own expense, take such actions and re-perform the Field Performance Test as necessary to demonstrate compliance with the Specifications with respect to which the Equipment had previously failed to comply.
8. FINAL ACCEPTANCE PAYMENT
8.1 Punch-List. At any time after delivery of the Equipment, Purchaser may provide Seller with a list of items remaining to be completed upon or in connection with such Equipment in order for Final Acceptance to occur (the “Punch List”).
8.2 Final Acceptance.
8.2.1 Tests and Check-Outs. Once the Equipment has been assembled by Seller, Purchaser or its representative shall thereafter perform such tests and check- outs as described in the Specifications as necessary to demonstrate that the Equipment performs as represented and/or guaranteed in this Agreement.
8.2.2 Final Acceptance Criteria. Subject to Section 8.2.3, “Final Acceptance” will occur once:
(a) Seller has, as with respect to the Equipment, demonstrated compliance per Field Performance Tests as per Section 7.2; (b) Seller has completed all Punch-List items; and
(c) Purchaser has delivered to Seller a written certification that all the requirements of Section s 8.2.2(a) and (b) have been satisfied or waived.
8.2.3 Certification Process. When Seller believes that the requirements set forth in Sections 8.2.2(a) and (b) have been achieved, Seller shall deliver a certificate to Purchaser indicating the same. Purchaser will within thirty (30) days following Purchaser’s receipt thereof, either: (a) deliver a written certification as described in Section 8.2.2(c); or (b) notify Seller in writing that such requirements have not been achieved, stating the reasons therefor.
In the event Purchaser notifies Seller that such requirements have not been met, Seller shall promptly take such action as necessar y to achieve such requirements, and shall then issue to Purchaser another certificate indicating the same. Such procedure shall be repeated until Final Acceptance is achieved.
12 8.2.4 Delayed Certificate. Notwithstanding the foregoing, if (a) Purchaser fails to issue a Final Acceptance Certificate within one hundred twenty (120) days of energization of the Equipment despite such Equipment ’s having demonstrated performance as represented and/or guaranteed and (b) the Equipment is thereafter utilized by Purchaser in its normal business operations, and (c) Seller has completed all Punch- List Items, then Final Acceptance shall be deemed to have occurred.
8.2.5 Final Payments. Upon the occurrence of Final Acceptance (or deemed Final Acceptance, as applicable), Seller will invo ice Purchaser for any amounts of the Contract Price that remain unpaid. Purchaser will pay Seller such invoiced amounts within thirty (30) days of such invoice. Final payment to Seller shall not relieve Seller of its continuing obligations under this Agreement, including, without limitation, Seller ’s warranty and indemnity obligations.
9. WARRANTY
9.1 Standard Warranty.
9.1.1 Terms of Warranty . Seller warrants that, for the duration of the Warranty Period, the Equipment will be (a) new and of good quality, (b) free from defects in design, workmanship, manufacturing and materials, and (c) provided in accordance with the requirements of this Agreement, and in compliance with all Applicable Laws and Applicable Permits (the “Warranty”).
9.1.2 Warranty Period. Subject to Section 9.1.4, the Warranty will remain in full force and effect for a period beginning on the date of Final Acceptance and ending five (5) years thereafter (such period, the “Warranty Period”).
9.1.3 Warranty Obligations. If during the Warranty Period the Equipment or any portion of the Equipment fails to conform to the Warranty, then Seller will, as promptly as practicably possible (but at such times as directed by Purchaser), in the manner it deems appropriate and that is reasonably acceptable to Purchaser, take all actions necessary to cure such failure. Any such redesign, repair or replacement Work requiring the Facility to be off - line will be coordinated with Purchaser ’s operating personnel to minimize disruption of Purchaser’s ongoing operations, such coordination to include, at Purchaser ’s option, around- the-clock Work, including weekends and holidays. Seller will, at Seller ’s expense, perform such tests as Purchaser may reasonably require and that are normal industry practice to demonstrate that the redesign, repair or replacement of defective or nonconforming Equipment complies with this Agreement. All costs incurred to remove, disassemble, reassemble, re- install, re -construct, re-inspect and retest the Equipment hereunder (including the costs of mobilization and demobilization of Seller’s Personnel) will be to the account of Seller. 13 9.1.4 Warranty Period Extensions. Any item of Equipment that is the subject of re-work in satisfaction of Seller ’s obligations in connection with the Warranty will be re-warranted by Seller pursuant to the same Warranty set forth in Section 9.1,1, and Seller will have the same obligations in relation thereto as set forth in Section 9.1.3, for a period equal to longer of (a) one (1) year from the date such re -performance, rework, repair or repla cement is completed, or (b) the remaining period under the Warranty Period.
9.1.5 Warranty Exclusions. Notwithstanding anything in this Section 9.1 to the contrary, Seller shall have no warranty obligations with respect to a given condition or defect to the exte nt that it can demonstrate that the condition or defect constitutes or results from any of the following:
(a) normal equipment wear and tear; or
9.2 Warranty of Title; Lien Waivers. Seller warrants that the Equipment will be free of defects in title and that the title to the Equipment is marketable and clear and free of any liens, charges or encumbrances whatsoever. Seller will indemnify, defend and hold Purchaser harmless for any claims, demands or Liabilities arising out of any breach of the foregoing warranty. S eller will furnish, as deemed necessary by and in format acceptable to Purchaser, partial and/or final lien waivers, affidavits, or other documents required to keep the Facility and the Equipment free from liens or claims for liens arising out of the furni shing of the Equipment. If any such lien is filed or claim is made, Seller will remove the lien or defend against any such claim. If Seller fails to remove such lien or claim within seven (7) calendar days after receipt of written notice from Purchaser, Purchaser may proceed to remove such lien or claim, and Seller will pay Purchaser any and all costs and expenses incurred by Purchaser in so doing, including reasonable attorneys ’ fees and court costs so incurred.
9.3 Warranty Against Infringement of Intellectual Property Rights . Seller represents and warrants that the Equipment or any portion thereof does not infringe any patent, copyright, trademark or trade secret (as the same may be defined by applicable law).
10. CHANGES
Except as authorized by the design -review process in the Specif ications, no change shall be made or extra work done without the prior written approval of Purchaser ’s Purchasing Agent. The Purchaser ’s Purchasing Agent may authorize minor changes from the Specifications that involve no extra cost and may also execute any order for changes and/or extra work for the Equipment provided the accumulated sum of this and all previous change orders do not exceed ten percent (10%) of the Contract Price. The Purchaser’s City Council must approve any order for changes and/or extra work which exceed the foregoing limitation.
14 11. FORCE MAJEURE
11.1 Definition of Force Majeure. For purposes hereof, a “Force Majeure” event means any event that (a) is beyond the reasonable control of the Party affected by such event (the “ Affected Party”) or i ts Personnel; (b) is not the fault of the Affected Party or its Personnel; (c) could not have been prevented by the Affected Party’s or its Personnel’s exercise of reasonable diligence. For purposes of Section 11.1(a), the following events shall be considered to be beyond the reasonable control of an Affected Party or its Personnel: war; civil insurrection; floods; hurricanes; tornadoes; typhoons; lightning strikes; landslides; earthquakes; epidemics and other Acts of God; quarantines; embargoes; riots; sabotage; malicious acts of damage; requirements of or actions or failures to act on the part of governmental authorities preventing performance (but excluding normal business acts of Purchaser relative to this Agreement); the refusal or withdrawal of any import or export licenses; and labor conflicts or lockouts (except as expressly prohibited below). For the sake of clarity, in no instance will any event that is caused by the intentional act, error, omission or negligence of Seller, its affiliates or either of their Personnel be considered Force Majeure entitling Seller to relief under this Section 11. In no instance will the following be considered events beyond Seller ’s reasonable control; (1) strikes or labor disturbances involving employees of Seller or i ts Suppliers, or (ii) price fluctuations with respect to materials, supplies or components of equipment related to the Equipment or the Work.
11.2 Notification and Mitigation Requirements. If a Force Majeure event occurs that will delay a Party from the perform ance of its obligations under this Agreement, such Affected Party will notify the other Party in writing of such condition and the cause thereof no later than three (3) calendar days after the commencement of the event of Force Majeure, describing in detail the event, the effect thereof upon the Work, and the length or potential length of delay and the measures to be taken to minimize the delay. An Affected Party will use all reasonable efforts to remedy its inability to perform under this Agreement and to minimize any delay and mitigate any damages caused by an event of Force Majeure. An Affected Party’s failure to do so will prevent such Party from claiming that a Force Majeure event has occurred.
Unless otherwise directed by the other Party in writing, an Affected Party will continue to perform its obligations under this Agreement so far as reasonably practical, and will seek all reasonable alternative means for performance not prevented by Force Majeure, including utilizing alternative means for performance not prevented by the Force Majeure event. To the extent not already resumed via alternative means, the Affected Party will promptly resume its performance at the cessation of the event. The Affected Party will give the other Party written notice of the cessation of a Force Majeure event within no later than three (3) calendar days after such suspension.
11.3 Effect of Force Majeure.
11.3.1 Obligations Temporarily Suspended. Neither Seller nor Purchaser will be responsible or liable for or deemed in breach of this Agreement because of, 15 any delay in the performance of their respective obligations under this Agreement if and to the extent that such delay in performance is directly and solely caused by a Force Majeure event.
11.3.2 Schedule Adjustments. If Seller experiences a delay caused directly and solely by a Force Majeure event, and provided Seller has given Purchaser the written notices and has taken the prescribed actions as required under Section 11.2, the required schedule date(s) for delivery of the Equipment and any other: required dates for performance by Seller will be equitably adjusted to reflect the delay caused by such Force Majeure event. Failure of Seller to provide such written notice or to take such prescribed actions will be deemed a waiver by Seller of it s right to an extension of time for its performance.
11.4 Extended Force Majeure. If Seller experiences an event of Force Majeure that has continued for a period of sixty (60) calendar days, then Purchaser will be entitled to serve upon Seller in writing a thir ty (30) calendar day notice to terminate this Agreement. If at the expiration of said thirty (30) day period, the event of Force Majeure is continuing, Purchaser may terminate this Agreement or may elect to further equitably extend the required schedule da tes set forth in this Agreement If Purchaser elects to terminate this Agreement pursuant to this Section 11.4, Seller will be entitled to receive: (a) payment for that portion of the Equipment that conforms to the requirements of this Agreement and that ha s been delivered and accepted by Purchaser and (b) the cost of materials ordered for the Equipment or for use in connection with the Equipment that has been delivered to Seller or for which Seller is legally liable to accept delivery as and to the extent s uch costs are approved by Purchaser. Such materials will become the property of Purchaser when paid for by Purchaser and Seller has delivered the materials to a location specified by Purchaser.
11.5 Limited Remedies . Except for the payments identified in Section 11.4, and notwithstanding any other provision to the contrary, Seller ’s sole and exclusive remedy in the event of a Force Majeure event will be limited to an equitable adjustment to the delivery schedule in accordance with this Section 11. Any additional costs incurred by Seller by reason of a Force Majeure event or in complying with the obligations of this Section 11 will be borne by Seller, without reimbursement from Purchaser.
12. INDEMNIFICATION
The Indemnification provisions of this Agreem ent are contained in Appendix D, attached hereto and incorporated herein by reference.
13. SUSPENSION
13.1 Right to Suspend. Purchaser will have the right, at any time and at its sole discretion, to direct Seller to suspend performance of the Work, in whole or in part, 16 by giving written notice to Seller specifying the extent to which the performance of Work is suspended pursuant to this Section 13 and the effective date of such suspension. The suspension will continue for the period of time specified in the written notice. Seller will suspend performance of the Work under this Agreement, to the extent that the notice so specifies, on the effective date of the suspension, but will continue to perform any portion of the Work not so suspended.
13.2 Actions Upon Suspension. I n the event of suspension by Purchaser under this Section 13, Seller will, at Purchaser’s request, preserve and protect the Equipment committed to or purchased for the suspended Work (whether completed or in progress), pending Purchaser’s instructions.
13.3 Affect of Suspension on Schedule. If suspension under this Section is due to causes not related to Seller’s failure to perform its obligations under this Agreement, then Purchaser will equitably adjust the scheduled date(s) for Seller ’s performance of the suspended Work, as set forth in this Agreement, to refle ct the length of the suspension, and Purchaser will reimburse Seller for the reasonable and direct additional costs incurred by Seller as a result of the suspension that are documented to the satisfactio n of Purchaser and that are attributable solely to: (a) the safeguarding or storing of the Work, including Equipment at Seller ’s facilities or the facilities of its Suppliers, or in transit; and (b) any resultant demobilization and remobilization at the Work site in connection with such suspension. Adjustment to Seller’s scheduled dates for performance and reimbursement of the costs specified in this Section 13.3 will constitute Seller ’s sole and exclusive remedies for any suspension directed by Purchaser. Any claim for additional time for performance or for compensation relating to a suspension of Work under this Section will be presented in writing by Seller within ten (10) calendar days after the suspended Work has been either resumed or terminated at the direction of Purchaser. The failure of Seller to submit a written claim within such period of time will constitute a waiver of Seller’s right to submit a claim relating to suspension hereunder.
13.4 Resumption of Work. At any time after the effective date of the suspension, Purchaser may require Seller to promptly resume performance of all or any portion of the suspended Work by giving written notice to Seller authorizing resumption of such suspended Work.
14. TERMINATION
14.1 [INTENTIONALLY OMITTED]
14.2 Termination for Seller Event of Default
14.2.1 Seller Events of Default. Upon the occurrence of a Seller Event of Default, Purchaser will have the right, at its sole discretion and without prejudice to any other remedy under this Agreement or at law or in equity, to withhold further payments to Seller and/or to terminate this Agreement, in whole or in part, after having given Seller written notice of such default, specifying 17 the extent to which this Agreement is terminated for default. For purposes hereof, a “Seller Event of Default” means any of the following events have occurred:
(a) if either (1) the delivery of the Equipment is delayed by more than sixty (60) days beyond its Guaranteed Delivery Date;
(b) if the delivery of any Draw ing is delayed by more than sixty (60) days beyond the deadline for the same as set forth in the Drawing Delivery Schedule;
(c) a case or action is commenced by or against Seller under applicable bankruptcy law, or Seller makes a general assignment for the benefit of its creditors, or a receiver is appointed to ta ke charge of Seller’s assets;
(d) Seller attempts to assign this Agreement or any part thereof without the written consent of Purchaser;
(e) Seller fails or refuses to comply with any Applicable Law or Applicable Permit and such failure or refusal has a material impact on Purchaser;
(f) Seller defaults in its performance of any other material obligation under this Agreement, and Seller does not cure its default in performance within a period of ten (10) calendar days after Seller’s receipt of such a written notice of default from Purchaser; or (g) Seller’s failure to maintain and provide acceptable evidence of the required insurance for the required period of coverage as set forth in Section 16.
14.2.2 Actions Upon Default. In the event of termination by Purchaser under this Section 14.2, Seller and its Suppliers will place no further orders or enter into any further agreements or other commitments for equipment, facilities or services in connection with terminated Equipment under this Agreement.
Upon request by Purchaser, Seller will promptly provide Purchaser a listing of all outstanding agreements and other commitments which pertain to the performance of the Work, and will furnish Purchaser with complete copies thereof.
14.2.3 Assignment of Equipment. In the event of termination by Pur chaser under this Section 14.2, Seller, if and to the extent requested to do so by Purchaser, will promptly assign to Purchaser, in form and content satisfactory to Purchaser, Seller ’s rights, title and interest to the Equipment (whether completed or in pr ogress) and to those Supplier agreements and other commitments so designated by Purchaser. Purchaser, at its option and without waiving any other available remedy under this Agreement or at law 18 or in equity, may take possession of any or all of the Equipme nt (whether delivered to the Delivery Point or on order), or may obtain goods similar to those ordered under this Agreement on terms and conditions that Purchaser deems appropriate, and may complete the terminated Work by whatever method Purchaser deems necessary.
14.2.4 Remedies. In the event of a termination of this Agreement under this Section
14.2, Purchaser will be entitled to all rights under law or equity. Without limiting the foregoing, if such termination results from the Seller Event of Default described in Section 14.2.1(a), in addition to any liquidated damages payable to Purchaser under Section 6.4, Purchaser may reject and/or rescind its or der for the delayed Equipment (in which case, Seller may retrieve them, at its expense), and receive a full refund of the purchase price therefor, and Seller will further be liable to Purchaser for any costs in excess of such purchase price as are incurred by Purchaser in procuring replacement equipment, as limited by Section 20.1 and Section 20.2.
14.3 Termination for Purchaser Event of Default
14.3.1 Purchaser Events of Default. Upon the occurrence of a Purchaser Event of Default, Seller will have the right, at its sole discretion and without prejudice to any other remedy under this Agreement or at law or in equity to terminate this Agreement, in whole or in part, after having given Purchaser written notice of such default, specifying the extent to which this Agreement is terminated for default. For purposes hereof, a “Purchaser Event of Default” means any of the following events have occurred:
(a) a case or action is commenced by or against Purchaser under applicable bankruptcy law, or Purchaser makes a general assignment for the benefit of its creditors, or a receiver is appointed to take charge of Purchaser’s assets;
(b) Purchaser att empts to assign this Agreement or any part thereof without the written consent of Seller (to the extent so required under Section 15.2.2);
(c) Purchaser fails to make an undisputed payment within sixty (60) days after its due date under this Agreement; or
(d) Purchaser defaults in its performance of any other material obligation under this Agreement, and Purchaser does not cure its default in performance within a period of ten (10) calendar days after Purchaser’s receipt of such a written notice of default from Seller.
14.3.2 Remedies. In the event of a termination of this Agreement under this Section
14.3, Seller will be entitled to all rights under law or equity.
19 15. SUBCONTRACTING AND ASSIGNMENT
15.1 Subcontracting. Except for expendable materials and minor component parts, and except for any portion of the Work for which a Supplier is specifically named in this Agreement, Seller will not subcontract all or any portion of the Work without first notifying Purchaser in writing of its intention to do so and obtaining Purchaser’s w ritten consent of the proposed subcontracting and the proposed Supplier. Any Equipment fabricated, manufactured or assembled without such consent will be subject to subsequent rejection at Purchaser ’s sole discretion. If Purchaser gives written consent to Seller to subcontract all or any portion of the Work, no contractual relation will exist between Seller ’s Supplier and Purchaser.
Seller will, upon request of Purchaser, provide Purchaser with unpriced copies of Seller’s purchase orders with its Suppliers. Notwithstanding such written approval, Seller will be responsible for the full and complete performance of this Agreement.
Seller guarantees that its Suppliers will comply fully with the terms of this Agreement applicable to the portion of the Work perfor med by them, whether or not such Agreement terms include a reference to Seller ’s Suppliers. In the event Purchaser terminates this Agreement pursuant to Article 14, Seller will assign to Purchaser, as Purchaser may direct, any of Seller ’s agreements with S uppliers, as may be requested by Purchaser. Seller will ensure that all its Supplier agreements contain provisions therein permitting assignment to Purchaser and to its successors and assigns.
15.2 Assignment.
15.2.1 Assignment by Seller . Seller will not assign this Agreement wholly or in part, voluntarily, by operation of law (including change of control), or otherwise, without first obtaining Purchaser’s prior written consent.
15.2.2 Assignment by Purchaser. Purchaser reserves the right, at its sole discretion, to assign t his Agreement to its affiliates or to any financial institution(s) participating in the financing of the Facility with notice to Seller. Upon its receipt of such notice, if Purchaser so requests, then Seller will execute a written release that releases Pur chaser from its obligations under this Agreement. Purchaser may also assign this Agreement or any part hereof to any other third parties with the prior consent of Seller (which will not be unreasonably withheld or delayed).
15.2.3 Successors and Assigns. Subject to Sections 15.2.1 and 15.2.2, the provisions of this Agreement will extend to the benefit of and will be binding upon the successors and assigns of the Parties.
16. INSURANCE
Seller will, at its sole expense, obtain and maintain in full force and effect during the term of this Agreement the insurance described as being Seller ’s responsibility in, and in accordance with, and meeting the requirements set forth in, Appendix B. 20 17. NON-DISCLOSURE
17.1 “Confidential Information” means, with respect to a Party hereto, all information or material which either (1) is marked or identified as “Confidential,” “Restricted,” or “Proprietary Information” or other similar marking or identification, or (2) the other Party knew, as recipient, or under the circumstances, should have known, was considered confidential or proprietary by the Disclosing Party (as defined below).
Confidential Information shall consist of all information, whether in written, oral, electronic, or other form, furnished in connection with this Agreement by one Party or its Representatives ( “Representative” is defined as any elected and appointed officials, affiliate, director, officer, employee, agent, advisor or consultant of a Party or any of its subsidiaries or aff iliates) to the other Party or to its Representatives, and specifically includes but is not limited to Purchaser ’s individually identifiable customer information, and Purchaser ’s customer usage data and financial data.
17.2 Seller and Purchaser shall each hold the other ’s Confidential Information in confidence. Neither Party shall make the other ’s Confidential Information available in any form to any third party or use the other’s Confidential Information for any purpose other than as specified in this Agreeme nt. The Party providing Confidential Information ( “Disclosing Party ”) to the other Party ( “Receiving Party”) shall remain the sole owner of such information. Except as provided elsewhere within this Agreement, nothing contained in this Agreement shall be construed as granting or conferring any right or license in any Confidential Information or in any patents, copyrights, software or other technology, either expressly or by implication to the other Party, or to its Representatives or to others.
The term Co nfidential Information shall not include any of the following: (1) information already in possession of, or already known to, the Receiving Party as of the Effective Date without an obligation of confidentiality; (2) information in the public domain at the time of the disclosure, or which, after such disclosure, enters into the public domain through no breach of this Agreement by the Receiving Party or its Representative(s); (3) information lawfully furnished or disclosed to the Receiving Party by a non -party to this Agreement without any obligation of confidentiality and through no breach of this Agreement by the Receiving Party or its Representative(s); (4) information independently developed by the Receiving Party without use of any Confidential Informati on of the Disclosing Party; or (5) information authorized in writing by the Disclosing Party to be released from the confidentiality obligations herein.
17.3 By virtue of this Agreement, each Party hereto may disclose to the other Party information that is Conf idential Information. This Agreement does not diminish, revoke or supersede any existing confidentiality, non- disclosure or similar agreement between the Parties that does not pertain to the subject matter of this Agreement. However, any Confidential Info rmation, whether or not previously disclosed, that pertains to the subject matter of this Agreement shall be governed by the terms of this Section 17 which shall supersede any such previous agreement with respect to such Confidential Information and any Confidential Information 21 relating to the subject matter of this Agreement that was exchanged under such previous agreement shall be treated as though it was exchanged under this Agreement as of the date of such exchange.
17.4 The Receiving Party will treat all Confidential Information of the Disclosing Party, no matter written, electronic, or oral, as confidential and proprietary, and the Receiving Party shall only use such information in furtherance of this Agreement.
As such, the Receiving Party shall hold in confidence the Confidential Information of the Disclosing Party, and ensure that such Confidential Information is not disclosed to any other person or entity, except as expressly permitted by this Agreement or as authorized by the Disclosing Party. Receiv ing Party shall not disclose Confidential Information of the Disclosing Party received under this Agreement to any person other than its Representatives who require knowledge of such Confidential Information in furtherance of this Agreement. The Receiving Party shall inform its Representatives of the confidential nature of the Confidential Information of the Disclosing Party and advise such Representatives of the limitations on the use and disclosure and prohibition on making copies or summaries of such Confidential Information. The Receiving Party shall be responsible for any breach of this Agreement by its Representatives. Neither Party shall use the Confidential Information of the other Party for any commercial purpose.
17.5 If the Receiving Party becomes legally compelled (by oral questions, interrogatories, request for information or documents, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information of the Disclosing Party, the Receiving Party will provide the Disclosing Party with written notice of such an occurrence (if so permitted) as soon as possible. Thereafter, at its sole costs and expense, the Disclosing Party may seek a protective order or other appropriate remedy, or waive compliance with the provisions of this Agreement.
So long as it is consistent with applicable law, the Receiving Party will not oppose action by, and the Receiving Party will cooperate with, the Disclosing Party, at the Disclosing Party’s sole cost and expense, to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information. If the Disclosing Party fails to obtain such protective order or other remedy, or if the Disclosing Party waives compliance with the requirements of the preceding sentence, the Receiving Party will disclose only that Confidential Information that it is legally required to disclose, and will exercise commercially reasonable efforts, at Disclosing Party ’s expense, to obtain reliable assurance that confidential treatment will be accorded the Confidential Information so disclosed.
17.6 In the event the Receiving Party discloses, disseminates or releases any Confidential Information, except as expressly permitted by this Agreement, such disclosure, diss emination or release will be deemed a material breach of this Agreement and the Disclosing Party may demand prompt return of all Confidential Information previously provided to the Receiving Party. As soon as the Receiving Party becomes aware that it has made an unauthorized disclosure of Confidential 22 Information, the Receiving Party shall take any and all necessary actions to recover the improperly disclosed Confidential Information and immediately notify Disclosing Party regarding the nature of the unaut horized disclosure and the corrective measures being taken. Each Party agrees that any breach of their confidentiality obligations could cause irreparable harm to the other Party, the amount of which would be extremely difficult to estimate. Accordingly, it is understood and agreed that monetary damages would not be a sufficient remedy for any material breach of this Agreement and that specific performance and injunctive relief in addition to monetary damages shall be appropriate remedies for any breach or any threat of such breach. The provisions of this Paragraph are in addition to any other legal rights or remedies the Receiving Party may have.
17.7 Within two (2) weeks of the termination of this Agreement or final acceptance of the Equipment, Seller will return to Purchaser any and all Confidential Information, including all originals, copies, translations, transcriptions or any other form of said material, without retaining any copy or duplicate thereof. To the extent permitted by law, and if authorized in writing by Purchaser, Seller shall promptly destroy any and all electronic and hardcopy versions of the Confidential Information, as well as any documents consisting of excerpts or portions of the Confidential Information.
Seller shall certify in writing the destruction of the Confidential Information.
Purchaser may perform an audit of Seller ’s records to confirm the return or destruction of the Confidential Information. Purchaser shall have this audit right for three (3) years after the termination of this Agreement or final acceptance of the Equipment.
17.8 Notwithstanding the termination of this Agreement, this Confidentiality Section shall survive the expiration or earlier termination of this Agreement.
18. WITHHOLDINGS AND SET-OFFS
18.1 Withholding Rights. Purchaser may withhold payments otherwise due to Seller under this Agreement on the following grounds:
18.1.1 defective Work not remedied;
18.1.2 notice of claims or filing of liens or reasonable evidence indicating probable notice of such claims or filing of liens;
18.1.3 failure of Seller to make payments properly to Suppliers;
18.1.4 reasonable evidence that the delivery of the Equipment will not be completed by its Guaranteed Delivery Date;
18.1.5 any failure to furnish final approved Drawings and documentation, including but not limited to, quality assurance documentation., Seller erection, assembly and other required Drawings, spare parts lists, and instruction and operating manuals; or
23 18.1.6 any failure of the Equipment to meet any requirements of the Specifications or other requirements of this Agreement.
18.2 Set-Off Rights. Any and all payments due Seller hereunder may, at the discretion of Purchaser, be offset or charged against any outstanding obligations of Seller to Purchaser under this Agreement.
19. PREVAILING WAGE.
19.1 In accordance with the provisions of Division 2, Part 7, Chapter 1 of the Labor Code, the general prevailing rates of per diem wages for each craft, classification and type of assembly and installation work for this project have been determined by the Director of the California Department of Industrial Relations. Seller and each Subcontractor shall pay all workers not less than the prevailing wage rates as determined by the Director of Industrial Relations in accordance with the provisions of the Labor Code. As provided in Labor C ode Section 1775, the Seller shall f orfeit, as a penalty to the Purchaser , Fifty Dollars ($50) for each Day or portion thereof, for each workman paid less than the stipulated prevailing wage rate for such work or craft in which such workman is employed for any assembly or installation work done pursuant to this Agreement by Seller or by any Subcontractor in violation of the provisions of the Labor Code and in particular, Labor Code Section 1770 to 1780, inclusive. In addition to said penalty and pursuant t o said Section 1775, the difference between such stipulated prevailing wage rates and the amount paid to each workman shall be paid to each workman by Seller.
19.2 Seller shall strictly adhere to the provisions of the Labor Code, including Sections 1810 through 1813 and 1815, regarding minimum wages, the 8- hour day and 40- hour week, overtime, Saturday, Sunday, and holiday work. Seller shall forfeit to Purchaser the penalties prescribed in the Labor Code for noncompliance, including the penalties set forth in Section 1813 for violations of Sections 1810 through 1815.
19.3 Seller shall comply with the provisions of Labor Code, Sections 1777.5 and 1777.6, and Title 8, Code of Regulations, Sections 200 et seq., relating to apprentice employment and training. Seller shall assume full responsibility for compliance with said sections with respect to all apprenticeable occupations upon the project. To ensure compliance and complete understanding of the law regarding apprentices, and specifically the required ratio thereunder, Seller should, where some question exists, contact the Division of Apprenticeship Standards, 455 Golden Gate Avenue, San Francisco, CA 94102, or one of its branch offices, prior to commencement of the Work. In the event of noncompliance by Seller, Purchaser shall withhold the penalties provided for under Section 1777.7 of the Labor Code from progress payments then due.
19.4 Pursuant to the requirements of Section 1860 of the Labor Code, Seller will be required to secure the payment of workers’ compensation to his employees in accordance with the provisions of Section 3700 of the Labor Code.
19.5 Pursuant to Section 1861 of the Labor Code, Seller is obligated to sign and file with Purchaser a certification in the form required by the Purchaser. 24 19.6 Seller shall comply with the applicable provisions of the Labor Code and implementing regulations relating to Labor Nondiscrimination.
19.7 Pursuant to the provisions of Section 1770 of the Labor Code of the State of California, the Director of the De partment of Industrial Relations has ascertained the general prevailing rate of wages (which rate includes employer payments for health and welfare, vacation, pensions and similar purposes) applicable to the Work to be done, for straight time, overtime, Saturday, Sunday and holiday work. The Seller shall obtain a copy of prevailing wage rate determinations of the Director of the Department of Industrial Relations and post it in a conspicuous place on the Work site.
19.8 The Purchaser will not recognize any claim for additional compensation because of the payment by the Seller of any wage rate in excess of the prevailing wage set forth in the Agreement. The possibility of wage increases is one of the elements to be considered by the Seller in determining his bid, and will not under any circumstances be considered as the basis of a claim against the Purchaser on the Agreement.
19.9 The Seller shall maintain accurate payroll records in accordance with the provisions of Labor Code Section 1776 and shall, upon request, file said records with the Purchaser.
19.10 The Seller shall forfeit as a penalty to the Purchaser Twenty Five Dollars ($25) for each worker employed in the execution of the Work by the Seller or any Subcontractor for each Day during which such workman is required or permitted to work more than eight (8) hours in any one Day and forty (40) hours in any one calendar week, in violation of the provisions of the Labor Code and, in particular, Section 1810 to Section 1815 thereof, inclusive, except that Work performed by the employees of Seller or Subcontractor in excess of eight (8) hours per day and forty (40) hours during any one week shall be permitted upon compensation of all hours worked in excess of eight (8) hours per day at not less than one and one-half times the basic rate of pay as provided in said Section 1815.
19.11 Attention is directed to the provisions in Section 1777.5 and 1777.6 of the Labor Code concerning the employment of apprentices by the Seller or any Subcontractor under him.
19.12 The Seller and any Subcontractor under him shall comply with the requirements of Section 1777.5 and 1777.6 in the employment of apprentices.
19.13 Information relative to apprenticeship standards, wage schedules, and other requirements may be obtained fr om the Director of Industrial Relations, Office of the Administrator of Apprenticeship, San Francisco, California, or from the Division of Apprenticeship Standards and its branch offices.
This Agreement is subject to Public Contract Code Section 6109: The Design Builder shall be prohibited from performing Work with a subcontractor who is ineligible to perform the Work pursuant to Sections 1777.1 or 1777.7 of the Labor Code.
25 20. LIMITATIONS OF LIABILITY
20.1 No Consequential Damages. Neither Party shall be liable to the other Party under this Agreement, whether by way of indemnity or in contract, guarantee, tort, or otherwise for any special, incidental, indirect or consequential loss or damages, including but not limited to loss of profit, loss of production, loss of revenue or loss of use. The foregoing will not apply to (a) limit a Party ’s liability for liquidated damages that are expressly payable pursuant to the terms of this Agreement, (b) limit any damages under third party claims for which a party has an inde mnity obligation hereunder, (c) damages arising as a result of a breach of any non- disclosure or non-use obligations of a Party pursuant to Section 17, and (d) damages arising as a result of willful misconduct, fraud or gross negligence of a Party or its Personnel,
20.2 Caps on Liquidated Damages. Notwithstanding anything to the contrary elsewhere in this Agreement, Seller’s maximum liability for liquidated damages of every kind payable by Seller to Purchaser under this Agreement shall not exceed twenty -five percent (25%) of the Contract Price.
21. MISCELLANEOUS
21.1 Priority of Documents: Interpretation . Seller will promptly notify Purchaser in writing of any real or apparent conflicts, discrepancies, errors or omissions among the documents comprising this Agreement. All documents comprising this Agreement, including any modifications or additions thereto, will be read in a complementary manner. Any Work affected by such conflict, discrepancy, error or omission performed by Seller prior to resolution of the same by Purcha ser will be at Seller ’s risk. In the event of an irreconcilable conflict, discrepancy, error or omission, the following descending order of precedence will govern:
(a) the Terms and Conditions; Appendix B (Insurance Requirements) and Appendix D (Indemnification);
(b) Appendix C (Specifications);
(c) Appendix A (Payment Schedule);
Subject to the foregoing, if any provisions in any Contract Document are in conflict with any other provisions in such Contract Document, the provision setting forth the higher standard of conduct for or more onerous obligations upon Seller will prevail. Nothing contained in the Specifications or Drawings will be construed as relieving Seller from the responsibility for designing, fabricating, manufacturing or assembling the Equipment to meet the requirements specified in this Agreement Seller undertakes full responsibility and liability for the consequences of its failure to comply with all Agreement requirements.
21.2 Severability. The invalidity or unenforceability of any provision of this Agreement will in no way affect the validity or enforceability of any other provision hereof. 26 Any invalid or unenforceable provision will be enforced to the greatest extent permitted by law. If any such provision is unenforceable, then such provision shall be deemed severed from this Agreement, and the balance of this Agreement will be reformed and construed in such a manner as to effect to the maximum extent possible the original intent of the Parties.
Notices. All notices permitted or required to be given under this Agreement shall be in writing and shall be deemed duly given when sent by telefacsimile transmission, by overnight courier, by personal delivery or on the seventh (7th) day following the date on which such notice is deposited in the mail, postage prepaid, certified, return receipt requested. “ Electronic mail ” shall not be considered a “writing” for purposes hereof. All notices shall be delivered or sent to the Parties at their respective addr ess(es) or number(s) shown below or to such other address(es) or number(s) as a Party may designate by prior written notice given in accordance with this provision to the other Party:
If to Purchaser: City Clerk
City of Anaheim
200 S. Anaheim Boulevard, 2nd Floor
Anaheim, California 92805
FAX No.: (714) 765-4105
With copies to: Dukku Lee
Public Utilities General Manager
City of Anaheim
201 S. Anaheim Boulevard, Suite 1101
Anaheim, CA 92805
FAX No.: (714) 765-4138
To Seller: Veteran Supply Services, LLC
Attention: Ravi Vemulapalli
10880 Wilshire Blvd., Suite 1101
Los Angeles, California 90024
Telephone No.: (323) 332-6896
Electronic Mail: [email protected]
21.3 Section Headings. The Section headings herein have been inserted for convenience of reference only and shall not in any manner affect the construction, meaning or effect of anything herein contained nor govern the rights and liabilities of the Parties. References to “ Sections” in these Terms and Conditions shall mean the Sections of these Terms and Conditions unless otherwise expressly noted.
21.4 Duties and Remedies Not Limited. The duties and obligations imposed by this Agreement and the rights and remedies available thereunder shall be in addition to, and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law or in equity.
27 21.5 English Language. Seller hereby represents that it has sufficient knowledge of the English language to fully understand this Agreement. This Agreement is in the English language and all documentation related hereto, including without limitation, any documentation and Drawings to be provided by Seller or its Suppliers will also be in the English language. Seller will bear all costs of translation and assumes all risk of such translation.
21.6 Governing Law: Choice of Forum. The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange.
21.7 No Waiver of Rights. Except as may be specifically agreed in writing, the failure of Purchaser or Seller to insist in any one or more instances upon the stric t performance of any one or more of the provisions of this Agreement or to exercise any right herein contained or provided by law or equity, shall not be construed as, or constitute in any way, a waiver, modification or relinquishment of the performance of such provision or right(s), or of the right to subsequently demand such strict performance or exercise such right(s), and all such rights shall continue unchanged and remain in full force and effect. “ Electronic mail” shall not be considered a “writing” for purposes hereof.
21.8 Amendments. No amendments or modifications of this Agreement shall be valid unless evidenced in writing and signed by a duly authorized representative of the Party against which enforcement is sought “Electronic mail” shall not be considered a “writing” for purposes hereof.
21.9 Relationship of the Parties. Nothing in this Agreement shall be deemed to constitute either Party a partner, agent or legal representative of the other Party, or to create any fiduciary relationship between the Partie s. Seller is and shall remain an independent contractor in the performance of this Agreement, maintaining complete control of its Personnel, suppliers, workers, subcontractors and operations required for performance of the Work.
21.10 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
21.11 Entire Agreement. This Agreement constitutes the complete, integrated agreement between the Parties relating to the Equipment, superseding all other prior agreements or undertakings regarding the subject matter hereof.
[SIGNATURES ON THE FOLLOWING PAGE]
28 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth.
CITY OF ANAHEIM,
a municipal corporation
DATE: ______________________ By: _______________________________ Barrick L. Bartlett
Purchasing Agent
ATTEST
DATE: _______________________ By: ______________________________ Theresa Bass, City Clerk
VETERAN SUPPLY SERVICES, a California
Limited Liability Company
DATE: _______________________ By: ______________________________ Ravi Vemulapalli
President & Managing Member
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
By: _________________________________
Alison M. Kott, Assistant City Attorney
143963/147036
29 APPENDIX A
PAYMENT SCHEDULE
1. VENDOR will be paid based on the milestones below. Upon completing each milestone below, the Seller will issue an invoice. That invoice shall identify the completed milestone. The Buyer will pay that invoiced amount within thirty (30) calendar days.
A) 20% of the Contract Price upon Buyer’s approval of the “COMPLETE” set of drawings for fabrication.
B) 75% of the Contract Price upon successful delivery, completion of Assembly, and Field Testing at the designated project site.
2. CITY will release 5% of the Contract Price in accordance with Section 8.2.5 of the Sales Agreement (Final Acceptance Payment section).
30 APPENDIX B
INSURANCE REQUIREMENTS
Without limiting Purchaser ’s right to indemnification, it is agreed that Seller shall secure and maintain, during the term of this Agreement, insurance coverage as follows:
Workers’ Compensation Insurance as required by California statutes and Employers Liability in an amount not less than $1,000,000 per occurrence.
Commercial General Liability Insurance, including coverage for Premises and Operations, Contractual Liability, Personal Injury Liability, Products/Completed Operations Liability, and Independent Contractor’s Liability, in an amount not less than $20,000,000 per occurrence, $20,000,000 annual aggregate, written on an occurrence form. Such insurance shall be written on a primary basis (i.e., without a self -insured retention), but may include a deductible of not more than $10,000 per occurrence, provided that such deductible is disclosed to Purchaser, in writing, at the inception of this Agreement.
Comprehensive Automobile Liability Coverage including – as applicable – owned non-owned and hired autos, in an amount not less than Ten Million Dollars ($10,000,000) per occurrence, combined single limit.
Each insurance policy required by this Agreement shall contain the following clause or shall otherwise provide for the following conditions:
“This insurance shall not be cancelled or non- renewed until after five (5) business days prior written notice has been received by the City of Anaheim.” If Seller’s insurer will not commit to this requirement, then Purchaser shall assume the obligation of notifying Purchaser of such pending development(s) within the stated time frame.
Each insurance policy required by this Agreement, except policies for Workers ’ Compensation, shall contain the following clauses or shall otherwise provide for the following conditions:
“It is agreed that any insurance maintained by Seller pursuant to this Agreement shall be primary to, and not contribute with, any insurance or self -insurance maintained by the City of Anaheim.”
“The City of Anaheim, its officers, agents, employees, and representatives are added as additional insureds as respects the acts, omissions, operations, and activities of, or on behalf of, the named insured, in regard to products supplied, or work or services performed for the City of Anaheim.”
At the earlier of (i) thirty (30) days after the execution of this Agreement, or (ii) the first date by which payment is due Seller, Seller shall deliver to Purchaser insurance certificates confirming the existence of the insurance required under this Agreement, including the applicable clauses and/or provisions referenced above. Also, Seller shall provide Purchaser (i) endorsements to the 31 insurance policies which add to these policies the applicable clauses referenced above, or (ii) in lieu of said endorsements, documentation acceptable to Purchaser evidencing that the coverage, terms, and conditions set forth in the above-referenced clauses are otherwise provided for in said insurance policies.
Insurance required hereunder shall be placed with insurers (i) admitted to write insurance in California and (ii) possessing an A. M. Best rating of A VII or higher, or (iii) otherwise acceptable to Purchaser (but only with prior written permission from Purchaser). In the event that a claim or other legal action is filed against Purchaser, and if Purchaser, in its good faith opinion, believes it may have coverage under any of the insurance required herein, then Purchaser has the right to demand, and to receive within a reasonable time period, copies of the insurance policies related to such required insurance; provided; however, that this provision shall not apply if the parties agree that Seller shall fully defend, hold harmless, and indemnify Purchaser against any such claim or other legal action.
In addition to other remedies Purchaser may have if Seller fails to provide or maintain any insurance p olicies or policy endorsements to the extent and within the time herein required, Purchaser may, at its sole option:
A. Order Seller to stop work under this Agreement and/or withhold any payment(s) which become due to Seller hereunder until Seller demonstrates compliance with the requirements hereof;
B. Terminate this Agreement.
Exercise of any of the above remedies, however, is an alternative to other remedies Purchaser may have and is not the exclusive remedy for Seller’s failure to maintain insurance or secure appropriate endorsements.
The insurance limits stated herein are minimum requirements only, and their existence shall in no way limit any rights Purchaser may have under Seller ’s insurance policies, including but not limited to Purchaser’s status as an additional insured as required herein.
Nothing contained in this Insurance Section shall be construed as limiting in any way the extent to which Seller may be held responsible for payments of damages to persons or property resulting from Seller ’s, (or Seller ’s contractors/subcontractor, if any) performance of the work covered under this Agreement.
Purchaser’s Risk Manager is hereby authorized to reduce the requirements set forth herein in the event he determines that such reduction is in Purchaser’s best interest.
32 APPENDIX C
SPECIFICATIONS
Appendix C contains confidential and protected information and therefore is not subject to public disclosure. In summary, the Technical Specifications contain the technical requirements for the supply, installation, assembly, testing, and commissioning of the 15 kV Outdoor Metal -Clad Switchgear.
33 APPENDIX D
INDEMNIFICATION
1. To the fullest extent permitted by law, Seller agrees to indemnify, defend (at Purchaser’s option), and hold harmless Purchaser, its officials, officers, employees, agents, and representatives from and against any and all claims, losses, damages, defense costs, or liability from damage to property or from injury to, or death of, any person (including but not limited to Personnel of Purchaser), of any kind or nature (collectively referred to hereinafter as “ Claims”), arising out of or in connection with Seller’s (or Seller’s contractors’ or subcontractors’, if any) (i) acts, errors, or omissions, (ii) performance or failure to perform, (iii) goods or services provided, or (iv) work performed by, or on behalf of, Seller, relative to this Agreement; except to the extent that such Claims arise out of the active negligence or willful misconduct of Purchaser.
2. Further, to the fullest extent permitted by law, Seller agrees to indemnify, defend (at Purchaser’s option), and hold harmless Purchaser, its officials, officers, employees, agents, and representatives from and against any and all claims, loss es, damages, defense costs, or liability from (i) Seller’ s breach of contract with any of its Suppliers, (ii) the release of any hazardous materials or substances that results from the fault, negligent act or omission, or willful misconduct of Seller, its Suppliers, and their Personnel, (iii) any liens or claims of lien against Purchaser, officials, officers, employees, agents, and representatives by any Supplier, (iv) any demand, claim or legal action based on a claim that the Equipment or any portion ther eof infringes any patent, copyright or trademark or constitutes an unauthorized disclosure of any trade secret or other violation of proprietary intellectual property rights, (v) the violation of any Applicable Laws or Applicable Permits by Seller or its P ersonnel, and (g) any taxes, duties or other governmental charges for which Seller is responsible under Section 2.3 of the Agreement.
3. The obligations set forth in this indemnification provision (i) shall be in effect without regard to whether or not Purchaser, Seller, or any other person maintains, or fails to maintain, insurance coverage, or a self -insurance program, for any such Claims (as set forth in Paragraph 1 of this Appendix) or any such claims, demands or losses (as set forth in Paragraph 2 of this Appendix); and (ii) shall survive the termination of this Agreement.