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EXHIBIT 10.92
MASTER ENERGY EFFICIENCY SERVICES AGREEMENT
BETWEEN
CITY OF SAN DIEGO, CALIFORNIA
AND
ONSITE ENERGY CORPORATION
This Master Energy Efficiency Services Agreement (this "Agreement") is made as
of November 22, 1999, by and between Onsite Energy Corporation, a Delaware
corporation having its principal offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Onsite"), and the City of San Diego, California, having
offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Customer"), for the
evaluation, engineering, procurement, installation, operation and monitoring of
energy conservation measures ("ECMs") at some or all of the Customer's
facilities identified in each Amendment to this Agreement (the "Facilities"),
all with reference to the following:
A. The Public Utilities Commission of the State of California (the
"CPUC") implemented a Standard Performance Contracting incentive program in or
about the beginning of 1998 (and subsequently re-funded for 1999, and
potentially beyond 1999) (the "SPC Program"), which currently is being
administered by San Diego Gas & Electric Company ("SDG&E").
B. Pursuant to the SPC Program, the CPUC is willing to purchase energy
savings obtained from certain ECMs Onsite identifies and installs, all in
accordance with the SPC Program.
C. Customer issued a Request for Qualifications for Engineering Services
and Performance Contracting on July 3, 1998 and a Request for Proposals for
Engineering Services and Performance Contracting on August 12, 1998 (to which
Onsite responded), notified Onsite of its selection on October 14, 1998, and now
desires to participate in the SPC Program with Onsite to effect long term
electricity savings and associated energy cost reduction at the Facilities.
D. Onsite desires to identify and install ECMs at the Facilities to
effect such savings for the benefit of Customer and to deliver energy savings
from such ECMs to the CPUC in accordance with the terms of the SPC Program, and
Customer desires to engage Onsite to perform the same.
NOW, THEREFORE, Onsite and Customer, for good and valuable consideration, the
adequacy and sufficiency of which are hereby acknowledged, agree as follows:
1. DEFINITIONS. When used in this Agreement, the following terms shall have the
meaning specified:
A. AMENDMENT: An amendment to this Agreement executed by both Parties
pursuant to Schedule A defining the specific conditions of the Work to be
performed on a Phase of the Project.
B. CHANGES: Material changes in the Operating Hours, material
modifications, additions and/or deletions to Customer's equipment, material
changes in the use of Customer's equipment, material changes in the use of the
Facilities, the closure of any one of the buildings the comprise the Facilities,
and variations in weather conditions. Customer shall deliver to Onsite a written
notice of any actual or intended material changes in the use or condition of the
Facilities occurring after the execution of this Agreement. A "material change"
shall be defined as a change that reasonably could be expected to increase or
decrease the amount of energy used at the Facilities by greater than +/- ten
percent (10%) and may include a change in (i) the manner of use of the
Facili-
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ties by Customer; (ii) the operating hours of any equipment, facilities or
energy systems contained in the Facilities; (iii) the structure of the
Facilities; (iv) occupancy rate; (v) types or amount of equipment used on the
Facilities; or (vi) other conditions affecting energy use at the Facilities
other than those caused by the Equipment. Similarly, Onsite may deliver a
written notice to Customer if it believes a "material change" has occurred or if
a modification to the baseline condition has occurred that would impact Onsite's
guarantee of Energy Savings as compared to the final energy baseline.
C. CONSTRUCTION DRAW SCHEDULE: For each Phase, the schedule pursuant to
which Customer shall execute the Disbursement Authorizations, as set forth in
the applicable Amendment.
D. CONTRACT CHANGE ORDER: A written agreement between the Parties
evidencing a change in the scope of the Work, Total Capital Cost and/or Customer
Incentive Payment, as set forth in Section III below, substantially in the form
attached hereto as Exhibit 1 and incorporated herein.
E. CONTRACT DOCUMENTS: This Agreement, the attached General Terms and
Conditions, Schedules, Amendments, Appendices, Exhibits, drawings,
specifications, addenda issued prior to execution of the Agreement, and other
documents in this Agreement and executed modifications thereto issued after
execution of this Agreement.
F. CUSTOMER INCENTIVE PAYMENT: That portion of the Incentive Payments
payable by Onsite to Customer in accordance with Section VII.
G. CURRENT MARKET VALUE ("CMV"): The total market value rate expressed in
cents/kWh, including demand, $/therms of natural gas ("THR"), $/gallons of fuel
oil ("GFO") and/or $/gallons of propane ("GP"), imposed by SDG&E, or other
applicable servicing utility company or supplier, in the current monthly period,
including applicable taxes, surcharges and franchise fees, if applicable.
H. ENERGY CONSERVATION MEASURES ("ECMS") OR EQUIPMENT: The various items
of equipment (including all hardware and software), devices or materials
installed by Onsite at the Facilities for the purpose of improving the electric
efficiency and fossil fuel consumption, or to reduce the utility costs of the
Facilities.
I. ENERGY SAVINGS: Electric energy reduction, expressed in kWh and kW of
demand, and fossil fuel energy reduction, expressed in THR, GFO and GP, achieved
through load reduction by installation of ECMs encompassed in the scope of the
Project.
J. ESTIMATED ENERGY SAVINGS: The amount of Energy Savings, expressed in
kWh and kW of demand, estimated to be provided on an annual (and monthly) basis
by means of a Phase and/or the Project pursuant to this Agreement and as set
forth in each Amendment. The Estimated Energy Savings of each Phase shall be
identified in the detailed energy audit completed and approved pursuant to
Schedule A, and set forth in the applicable Amendment.
K. GUARANTEED ENERGY SAVINGS: The amount of Energy Savings, expressed in
kWh and kW of demand, and which is a percentage of Estimated Energy Savings as
set forth in Schedule C, guaranteed to be provided on an annual basis by means
of a Phase and/or the Project pursuant to this Agreement and as set forth in
each Amendment.
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L. INCENTIVE PAYMENTS: Payments from the CPUC to Onsite on each Phase
during each Phase Term in accordance with the SPC Program pursuant to which the
CPUC purchases from and/or compensates Onsite for Energy Savings obtained from
the SPC Benefit ECMs installed in each Phase under the applicable Amendment, all
as further discussed in Section VII.
M. M&V FEE: The amount, as set forth in the applicable Amendment but
included as part of the Fixed Payment (as defined in Schedule C), that will be
paid by Customer to Onsite to compensate Onsite for performing the measurement
and verification services required under this Agreement and/or the SPC Program
to measure and verify Energy Savings, and preparing and submitting the SPC
Documentation (as defined in Section VII) and the Energy Savings reports
pursuant to Section IX.
N. PARTIES: Customer and Onsite.
O. PARTY: Customer or Onsite.
P. PHASE: A portion of the Project, as mutually agreed upon between the
Parties pursuant to this Agreement.
Q. PHASE COMMENCEMENT DATE: For each Phase, the earlier of (i) the date
of acceptance by SDG&E of all of the ECMs installed by Onsite in the applicable
Phase (via SDG&E's acceptance of any applicable report required under the SPC
Program); or (ii) the date Customer executes a Certificate of Substantial
Completion and Acceptance (substantially in the form attached hereto as Exhibit
2) on the Phase.
R. PHASE PERIOD: A twelve (12) month period in a Phase Term.
S. PHASE TERM: A term of each Phase, which shall begin on the Phase
Commencement Date of the applicable Phase and end as set forth in the applicable
Amendment.
T. PROJECT: The complete range of services provided by Onsite pursuant to
this Agreement, including evaluation, engineering, procurement, installation,
operation and monitoring of ECMs at the Facilities, and Verification of Energy
Savings, as implemented in all of the Phases.
U. SPC BENEFIT ECMS: The ECMs for which benefits or incentives are
available under the SPC Program.
V. TOTAL CAPITAL COST: The sum of all costs for each Phase and/or the
Project (and set forth on a building by building basis) associated with the
installation of the ECMs, including materials, labor, subcontracts, taxes,
audits, design, management, profit and contingencies, as calculated in
accordance with Schedule G and set forth in each applicable Amendment.
W. UNCONTROLLABLE CIRCUMSTANCES: Any event or condition having a material
adverse effect on the rights, duties and obligations of Onsite, or the Project,
if such event or condition is beyond the reasonable control, and not the result
of willful or negligent action or omission or a lack of reasonable diligence, of
Onsite; provided, however, that the contesting by Onsite in good faith of any
event or condition constituting a change in applicable law shall not constitute
or be construed as a willful or negligent action, or a lack of reasonable
diligence. Such events or conditions may include, but shall not be limited to,
circumstances of the following kind:
1. an act of God, epidemic, landslide, lightning, hurricane,
earthquake, fire,
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explosion, storm, flood or similar occurrence, an act of war, effects of nuclear
radiation, blockade, insurrection, riot, civil disturbance or similar
occurrences, or damage caused by hazardous waste stored on the project site;
2. strikes, lockouts, work slowdowns or stoppages, or similar
labor difficulties, affecting or impacting the performance of Onsite or its
contractors and suppliers; or
3. a change in law, or regulation, or an act by a governmental or
judicial authority or agency; or
4. a change in the SPC Program by SDG&E and/or the CPUC that
affects the amount or frequency of the Incentive Payments, or the partial or
total cessation of business by SDG&E; or
5. a major change in the use of the Facilities (including a
substantial or total cessation of business at the Facilities by Customer).
X. VERIFICATION: The method to be used by Onsite for establishment of
actual Energy Savings achieved after the ECMs have been in place for a specified
time period, as specified in each Amendment.
Y. WORK: All materials, labor, tools and supplies necessary to install
the ECMs and perform all work set forth in each Amendment for the implementation
of each Phase of the Project, and all services to monitor and verify Energy
Savings in accordance with the monitoring and verification plan set forth in the
applicable Amendment, all as set forth in the applicable Amendment.
II. EXECUTION OF AMENDMENTS; EQUIPMENT INSTALLATION. In exchange for the
consideration set forth in Section VI below, Onsite will complete the
evaluation, engineering, procurement, installation, operation and monitoring of
ECMs utilizing the procedure as set forth on Schedule A attached hereto.
Customer and Onsite will agree on individual Phases of the Project utilizing the
procedure identified in Schedule A, and, in accordance with Schedule A, will
amend this Agreement for each Phase. The installation of ECMs shall be done in
accordance with the scope identified in Schedule A according to the
specifications to be provided by Onsite. Except as otherwise set forth in this
Agreement, Onsite shall obtain Customer approval of all ECMs prior to
implementation of the same. Onsite will design and manage the installation of
the Equipment so as to provide the standards of service and comfort described in
Schedule E.
Each Amendment will set forth the specific scope of the Work to be performed on
each applicable Phase. The Parties understand that information regarding the
Facilities and/or proposed ECMs for each individual Phase may become known to
the Parties after the execution of an Amendment, however, which information
impacts the Estimated and/or Guaranteed Energy Savings, and/or the types or
amount of ECMs to be installed. Accordingly, to ensure both Parties are
comfortable with the specifics of each Phase, unless otherwise agreed by the
Parties, the Parties shall participate in periodic design review meetings after
the execution of the applicable Amendment and prior to the performance of the
Work on the Phase. Based on any information that becomes known to the Parties
after the execution of the Amendment, and/or as a result of these design review
meetings, Onsite may modify the scope of the Work to be performed and/or ECMs to
be installed so long as the financial parameters of the Phase (for example, the
ratio of the cumulative net benefit to Customer to the Total Capital Cost of the
Project) as originally set forth in the Amendment are maintained (including on a
prorata basis), and the Total Capital Cost of the Project is not increased.
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In the event the Parties do not execute an Amendment on a Phase for which Onsite
has performed a comprehensive energy audit, as set forth in Schedule A, Customer
agrees that Onsite shall be reimbursed for its costs and expenses incurred in
the performance of such audit, in an amount to be agreed to by the Parties but
not to exceed Fifty Thousand Dollars ($50,000), via Onsite's retention from any
past, present or future Incentive Payments or Customer Incentive Payments to be
paid by the CPUC and/or received by Onsite (and otherwise forwarded to Customer
in accordance with Section VII), to the extent any Incentive Payments or
Customer Incentive Payments exist or are to be paid by the CPUC. Customer has no
obligation to reimburse Onsite for such audit costs and expenses to the extent
no Incentive Payments or Customer Incentive Payments are to be paid by the CPUC
and/or received by Onsite.
III. CHANGE ORDER SERVICES. The Parties understand and agree that, while the
intent is for Onsite to provide to Customer those ECMs set forth on in each
Amendment with no significant changes or modifications thereto being required,
changes and/or modifications may be required that affect the Total Capital Cost.
Onsite may, with the prior written consent of Customer, substitute ECMs set
forth in each Amendment with ECMs of equal or better quality that do not
increase the Total Capital Cost. If either Customer or Onsite desire to
significantly or substantially change and/or modify the ECMs set forth in each
Amendment, or any modification increases or decreases the Total Capital Cost
and/or the Estimated and/or Guaranteed Energy Savings, the Parties shall execute
a Contract Change Order.
IV. OWNERSHIP OF FACILITIES. Customer owns the various buildings that comprise
the Facilities, as set forth in each Amendment.
V. COMMENCEMENT DATE AND TERM OF AGREEMENT. The term of this Agreement (the
"Term") shall begin on the date this Agreement is executed by Onsite and
Customer, and the Conditions Precedent set forth in Section XI are satisfied,
and shall end concurrent with the end of the Phase Term on the last Phase to be
implemented under this Agreement, except as such Term may be earlier terminated
as provided in this Agreement. Such Term may be adjusted by mutual consent based
upon actual ECMs agreed upon by Customer and Onsite. If the Term is adjusted,
this Agreement and Schedules C and D will be adjusted appropriately. At the end
of the Term of this Agreement, provided that Customer is not in default
hereunder and provided that Customer exercises its option to purchase the
Equipment pursuant to Section 6 of the General Terms and Conditions, Onsite will
transfer title to all Equipment to Customer, free and clear of all liens and
encumbrances.
VI. ONSITE COMPENSATION. As consideration for the performance of the Work,
Customer agrees to pay Onsite the Fixed Payment (as defined in Schedule C and
set forth in the applicable Amendment) for the Phase Term beginning within
thirty (30) days of the Phase Commencement Date. Onsite shall prepare and send
to Customer, and Customer agrees to pay, a monthly invoice pursuant to Section
VIII below.
VII. CUSTOMER INCENTIVE PAYMENT. Under the SPC Program, the CPUC has agreed to
make certain incentive payments to Onsite to purchase from and/or compensate
Onsite for Energy Savings obtained from the ECMs, all in accordance with the
terms and conditions of the SPC Program (the Incentive Payments). Under the SPC
Program, the Incentive Payments are due as follows: (i) forty percent (40%) of
the aggregate of the Incentive Payments is due approximately upon completion of
the Project and submittal to and, if required, approval by SDG&E of any
documentation required under the SPC Program (collectively, the "SPC
Documentation") (the "First Incentive
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Payment'); (ii) thirty percent (30%) of the aggregate of the Incentive Payments
is due approximately at the end of the first year after completion of the
Project and submittal and/or approval of the SPC Documentation (the "Second
Incentive Payment"); and (iii) thirty percent (30%) of the aggregate of the
Incentive Payments is due approximately at the end of the second year after
completion of the Project and submittal and/or approval of the SPC Documentation
(the "Third Incentive Payment").
Onsite agrees to forward to Customer the Customer Incentive Payment for each
Phase as follows (except as otherwise set forth in Section II): Within ten (10)
days of Onsite's receipt of each of the First Incentive Payment (and following
Substantial Completion), the Second Incentive Payment and the Third Incentive
Payment for each Phase, Onsite hereby agrees to forward to Customer the Customer
Incentive Payment applicable thereto. Unless otherwise agreed by the Parties and
set forth in the applicable Amendment, the Customer Incentive Payment shall be
one hundred percent (100%) of the Incentive Payments.
The parties understand and agree that Onsite is utilizing the Estimated Energy
Savings for purposes of estimating the Incentive Payments and thus the Customer
Incentive Payment, and that the actual amount of the Incentive Payments is based
on actual Energy Savings verified, calculated and paid in accordance with the
terms and conditions of the SPC Program. Accordingly, in the event actual Energy
Savings results in either a reduction or increase in the Incentive Payments,
Onsite's only obligation to Customer regarding the Customer Incentive Payment is
to forward to Customer, in accordance with this Section VII, the Incentive
Payments. Nothing herein shall obligate Onsite to pay to Customer any difference
between any estimated and actual Incentive Payments.
The Incentive Payments, and thus the Customer Incentive Payment, will be
adjusted to reflect Changes. Should the results of annual monitoring of the ECMs
by Onsite reflect any Changes, Customer (i) bears the entire risk of loss due to
a reduction in the Incentive Payments and/or the Customer Incentive Payment as a
result of Changes; and (ii) acknowledges and agrees that the Customer Incentive
Payment may be reduced in the event of a reduction in the Incentive Payments.
VIII. ONSITE BILLING. During each Phase Term, Customer shall make one hundred
forty-four (144) monthly payments calculated as follows: During each twelve (12)
month period of a Phase Term (a "Phase Period"), Customer will make equal
monthly payments to Onsite as set forth in Schedule C (the Fixed Payment).
Onsite will submit monthly invoices to Customer for such amounts beginning after
the Phase Commencement Date. Payments of these invoices will be due within
thirty (30) days after Customer's receipt of the same. Customer's obligation to
make these payments is absolute and unconditional in all events, subject only to
Section 15 of this Agreement regarding early termination, and is not subject to
any setoff, defense, counterclaim or recoupment for any reason whatsoever
including, without limitation, any failure of the Equipment to be delivered or
installed, any defects, malfunctions, breakdowns or infirmities in the
Equipment, any accident to or condemnation of the Equipment, any unforeseen
circumstances, or any difference or shortfall of actual energy savings achieved
pursuant to paragraph 6 of Schedule C. No loss of or damage to the Equipment
from any cause whatsoever, nor unfitness or obsolescence thereof, shall relieve
Customer of the obligation to make these payments.
Unless Onsite notifies Customer otherwise, all payments due and payable to
Onsite shall be made to Onsite at the address set forth in Section X below.
IX. GUARANTEE OF ENERGY SAVINGS. Onsite guarantees that the actual Energy
Savings achieved, calculated pursuant to Schedule E, will be no less that the
Guaranteed Energy Savings. If the actual
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Energy Savings achieved, calculated pursuant to Schedule E, are less than the
Guaranteed Energy Savings, Onsite will pay to Customer an amount equal to such
difference or shortfall. An annual reconciliation of actual Energy Savings will
be made in accordance with Schedule E at the end of each Phase Period. Such
annual reconciliation shall be submitted by Onsite to Customer within ninety
(90) days after the end of each Phase Period provided Onsite has direct and
prompt access to Customer usage data through online data base, and annual
reconciliation payments will be payable thirty (30) days after submittal to
Customer by Onsite. Customer will not have the ability to offset succeeding
payments pursuant to this Agreement for any such difference or shortfall. The
Guaranteed Energy Savings for each Phase are based on the assumption that
Customer's annual operating hours at those facilities of the Facilities covered
in a Phase (the "Operating Hours"), and stipulated load profiles (the "Load
Profiles") and run hours (the "Run Hours") depending on the type of Equipment
(lighting or mechanical), all as set forth in the applicable Amendment. Onsite
guarantees the Guaranteed Energy Savings for each Phase as set forth in each
Amendment based upon the Operating Hours, and/or Load Profiles and Run Hours, as
applicable. The Estimated and Guaranteed Energy Savings will be adjusted to
reflect Changes. If any one of the buildings that comprise the Facilities is
closed during the applicable Phase Term, the Estimated and Guaranteed Energy
Savings will be adjusted accordingly.
X. NOTICES. All notices to be given by either Party to the other shall be in
writing and must be delivered or mailed by registered or certified mail, return
receipt requested, or sent by a nationally recognized overnight carrier
addressed as set forth below or such other addresses as either Party may
hereinafter designate by notice to the other. Notices are deemed delivered or
given and become effective forty-eight (48) hours after deposit in the U.S.
mails if mailed as aforesaid or upon actual receipt if otherwise delivered.
To Onsite: Onsite Energy Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CEO
To Customer: City of San Diego
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Deputy Director, Facilities Maintenance Division
XI. CONDITIONS PRECEDENT. The rights, obligations and liabilities of Onsite
under this Agreement shall be subject to the satisfaction or completion of each
of the following conditions, which conditions may be waived at Onsite's sole
option. If such conditions are not satisfied and/or completed, Onsite may, at
its sole option, terminate this Agreement upon notice to Customer with no
further liability to Customer.
1. Acceptance by Onsite of Customer's creditworthiness, in the
sole and absolute discretion and judgment of Onsite;
2. Opinion of City Attorney, in a form acceptable to Onsite, that,
among other things, Customer has the authority to enter into this Agreement and
that this Agreement is binding upon Customer;
3. Approval of the first or initial Phase of the Project by SDG&E
pursuant to the SPC Program; and
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4. The securing by Onsite of the financing necessary for the
Project, or the first or initial Phase thereof with a lender, and the execution
by Onsite and Customer of any documentation required by such lender. Onsite will
obtain Customer's consent to the selected lender, which consent shall not be
unreasonably withheld.
Additionally, the rights, obligations and liabilities of Customer under this
Agreement shall be subject to the approval of this Agreement, and any applicable
amendments, by City Council in accordance with applicable requirements for the
approval of an ordinance, which requirements include a first reading at a City
Council meeting, a second reading at a City Council meeting held at least twelve
(12) days after the first reading, and the passage of a referendum period of
thirty (30) days without objection. This condition may be waived by Customer at
its sole option. If such condition is not satisfied and/or completed and/or
waived, this Agreement shall be deemed of no force and effect, and/or Customer
may terminate this Agreement upon notice to Onsite, all with no further
liability to Onsite.
XII. APPLICABLE LAW. This Agreement, and the construction and enforceability
thereof, shall be interpreted under the laws of the State of California without
giving effect to its conflict of laws principles.
XIII. ADDITIONAL REPRESENTATIONS AND COVENANTS OF CUSTOMER. Customer (i) will do
or cause to be done all things necessary to preserve and keep this Agreement in
full force and effect; (ii) has complied with all bidding requirements where
necessary and by due notification presented this Agreement for approval and
adoption as a valid obligation on its part; (iii) has sufficient appropriations
or other funds available to pay all amounts due under this Agreement for the
current fiscal period; (iv) agrees that during the Term of this Agreement, the
Equipment will be used by Customer only for the purpose of performing one or
more governmental or proprietary functions of Customer consistent with the
permissible scope of Customer's authority and will not be used in a trade or
business of any person or entity other than the Customer; (v) will take no
action that will cause any interest portion of any payment to become includable
in gross income of the recipient for purposes of Federal income taxation under
the Internal Revenue Code of 1986, as amended (the "Code"), and will take, and
will cause if officers, employees and agents to take, all affirmative action
legally within its power to prevent such interest from being includable in gross
income for purposes of Federal income taxation under the Code; and (iv) will
timely file the appropriate Internal Revenue Service Form 8038-G.
Furthermore, Customer (i) reasonably believes that funds can be obtained
sufficient to make all payments due under this Agreement during the Term and
agrees that it will do all things lawfully within its power to obtain, maintain
and properly request and pursue funds from which such payments may be made,
including making provisions for such payments to the extent necessary in each
budget submitted for the purpose of obtaining funding, using its bona fide best
efforts to have such portion of the budget approved and exhausting all
reasonable available administrative reviews and appeals in the event such
portion of the budget is not approved; (ii) intends to make the payments if
funds are legally available therefor and in that regard further represented that
the use of the Equipment is essential to its proper, efficient and economic
operation; (iii) understands and intends that the obligation of Customer to pay
the payments constitutes a current expense of Customer and shall not in any way
be construed to be a debt of Customer or Onsite in contravention of any
applicable constitutional or statutory limitation or requirement concerning the
creation of indebtedness by Customer, nor shall anything contained in this
Agreement constitute a pledge of the general tax revenues, funds or moneys of
Customer; and (iv) is a state, or a political subdivision thereof, or that
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Customer's obligation under this Agreement constitutes an obligation issued on
behalf of a state or political subdivision thereof, such that any interest
derived will qualify for exemption from Federal income taxes under Section 103
of the Code, and that its obligations under this Agreement represent a valid
deferred payment obligation for the amount set forth therein, and that Customer,
having the legal capacity to enter into the same, is not in contravention of any
Town/City, District, County or State statute, rule, regulation or other
governmental provision.
XIV. FINAL AGREEMENT. This Agreement, together with the other Contract
Documents, shall constitute the full and final agreement between the Parties as
to the subject matter hereof, and may not be amended or modified except by a
writing evidencing said change or changes signed by the Parties. This Agreement
shall become binding when executed by Onsite and Customer. Any inconsistency in
this Agreement shall be resolved by giving precedence in the following order:
(i) Amendments to this Agreement, in reverse chronological order; (ii) this
Agreement; (iii) Schedules to this Agreement; (iv) General Terms and Conditions
of this Agreement; and (v) Exhibits to this Agreement.
THIS AGREEMENT IS SUBJECT TO THE GENERAL TERMS AND CONDITIONS
ATTACHED HERETO AND MADE A PART HEREOF.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first written above.
Onsite: Customer:
ONSITE ENERGY CORPORATION CITY OF SAN DIEGO, CALIFORNIA
By: By:
-------------------------------- -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CEO Name:
-------------------------
Title:
-----------------------------
Date: __________, 1999 Date: __________, 1999
General Terms and Conditions
Schedules:
A - Project Scope
B - Proposed Energy Conservation Measures
C - Payment Calculation
D - Termination Values
E - Method of Savings Calculation
F - Operation and Administrative Services
G - Calculation of Total Capital Cost
H - Equal Opportunity Contracting Program
I - Drug Free Workplace Certification
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Exhibits:
Exhibit 1 - Form of Contract Change Order
Exhibit 2 - Certificate of Substantial Completion and Acceptance
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GENERAL TERMS AND CONDITIONS
SECTION 1. OWNERSHIP OF EQUIPMENT. Onsite hereby leases to Customer and Customer
hereby leases from Onsite the Equipment. Customer shall have no right, title or
interest in or to the Equipment, except as expressly set forth in the Agreement.
Onsite may sell or otherwise transfer all or any portion of its ownership
interest in the Equipment to a third party for purposes of financing at any time
during the Term of this Agreement; provided, however, that such sale or transfer
shall not interfere with or in any way effect Onsite's obligations under this
Agreement or Customer's right to quiet enjoyment of the Equipment. Except as
specifically set forth elsewhere in this Agreement, such transferee of Onsite
shall have no liability in connection with the use and/or possession of the
Equipment. Customer shall at all times keep the Equipment free and clear from
all encumbrances, liens and claims of any of its creditors or other third
parties. At the end of the Term, Customer shall purchase the Equipment for the
Termination Value pursuant to Schedule D. Onsite, at its sole option, may
abandon the Equipment in place. Customer shall execute and deliver any financing
statements, such as a Uniform Commercial Code ("UCC") Financing Statement (Form
UCC-1), a Fixture Filing statement, continuation statements or other instruments
or agreements that Onsite may require, from time to time, to confirm Onsite or
its assignee/transferee's ownership of the Equipment.
Onsite shall at all times use its best efforts to keep the Facilities free from
any liens or encumbrances by Onsite's contractors and/or subcontractors during
the performance of the Work. Onsite further indemnifies Customer for any costs
and/or expenses incurred by Customer in connection with same.
Customer acknowledges that if any assignee/transferee of Onsite is neither a
manufacturer nor a vendor of equipment such as the Equipment, such
assignee/transferee HAS NOT MADE, AND WILL NOT MAKE, ANY REPRESENTATION,
WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY,
CONDITION, QUALITY, DURABILITY, DESIGN, OPERATION, FITNESS FOR USE OR
SUITABILITY OF THE EQUIPMENT IN ANY RESPECT WHATSOEVER OR IN CONNECTION WITH OR
FOR THE PURPOSES AND USES OF CUSTOMER, OR ANY OTHER REPRESENTATION, WARRANTY OR
COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO, AND
SUCH ASSIGNEE/TRANSFEREE SHALL NOT BE OBLIGATED OR LIABLE FOR ACTUAL,
INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES OF OR TO CUSTOMER OR ANY OTHER PERSON
OR ENTITY ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE
EQUIPMENT AND THE MAINTENANCE THEREOF.
In the event of a sale or transfer by Onsite to an assignee/transferee of all or
part of Onsite's ownership interest in the Equipment, Customer's sole remedy for
the breach of any manufacturer's warranty shall be against the manufacturer, and
not against any assignee/transferee of Onsite, and such matter shall have no
effect whatsoever on the rights and obligations of Onsite or its
assignee/transferee to receive full and timely payments under this Agreement.
Customer acknowledges that, unless otherwise notified by Onsite, any
assignee/transferee of Onsite makes no representations or warranties whatsoever
as to the existence or the availability of manufacturers' warranties.
SECTION 2. EQUIPMENT LOCATION AND ACCESS. Customer shall provide mutually
satisfactory rent free space for the installation of the ECMs, and shall protect
such ECMs in the same careful manner that Customer protects its own property.
Customer shall provide access to the Facilities for Onsite and its contractors
or subcontractors during regular business hours, or such other hours as may be
requested by Onsite and are acceptable to Customer, to carry out Onsite's
responsibilities under this Agreement. Onsite shall have free access to the
Facilities to correct any emergency condition.
SECTION 3. OBLIGATIONS OF CUSTOMER; MAINTENANCE OF FACILITIES AND EQUIPMENT.
a. Maintenance of ECMs. During each Phase Term and during the Term,
Customer is responsible for operating and maintaining the Facilities and the
ECMs in good repair, and for protecting and preserving the building envelope and
the operating condition and standard performance of Customer's equipment in or
on the Facilities.
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Operation and maintenance of the various systems shall include: (i) regular
inspections and replacement of parts or components as needed; (ii) determination
of spare parts or component replacement stocking requirements; (iii) replacement
schedules for major conservation measure components; (iv) specifications of
preventative maintenance actions in accordance with the manufacturer's
recommendations for all ECMs, measures and components; and (v) for lighting
systems, spot lamp replacement and keeping an adequate quantity of spare lamps
and ballasts available for spot replacement. Customer shall not tamper with or
remove the ECMs from the Facilities. Customer shall not modify or alter the
Equipment without the prior written consent of Onsite, which consent shall not
be unreasonably withheld. Customer will notify Onsite upon the event of any
breakdown, malfunction or failure of the ECMs as soon as possible after the
occurrence. Onsite shall not be responsible for the maintenance and/or operation
of the ECMs installed pursuant to this Agreement.
Customer agrees that all of the existing heating, ventilating, air conditioning,
hydropic and lighting systems shall be maintained in the same condition or
better condition as existed prior to construction of the Project. The Parties
will examine said heating, ventilating, air conditioning, hydropic and lighting
equipment. Customer maintenance of said equipment during the Term of this
Agreement shall not unreasonably cause operational problems. During the
examination, if the maintenance procedures that are not the responsibility of
Onsite are found to be inadequate, Onsite shall notify Customer in writing and
recommend reasonable maintenance procedures. If no changes and/or
recommendations are made, Onsite is deemed to have accepted Customer's
maintenance procedures as adequate.
Operation and administrative services to be performed by Onsite under this
Agreement will be in accordance with this Agreement and Schedule F attached
hereto and incorporated herein.
b. Prohibition of Utility Rebates. Customer understands and agrees that
the SPC Program prohibit, or may prohibit, the receipt by Customer of other
rebates, incentives or financial assistance from, or the participation by
Customer in, other SDG&E programs or demonstration projects, or other SPC
Program for or relating to the SPC Benefit ECMs, and Customer agrees to observe
such prohibitions.
c. Access for Inspection. Customer understands and agrees that under the
SPC Program, SDG&E has the right to conduct inspections (pre-installation and
post-installation) and audits of the Facilities for the purpose of inspecting
the Facilities and the ECMs, monitoring the operation of the ECMs, verifying
Energy Savings, and otherwise evaluating the effectiveness of the Project.
Additionally, Onsite has an obligation under the SPC Program to conduct similar
monitoring and verification services in order to receive the Incentive Payments,
and accordingly requires reasonable access to the Facilities during the Term.
During each Phase Term (or such longer period as may be required by the SPC
Program, including any portion of the Phase Term remaining after any early
termination in accordance with this Agreement), Customer hereby consents to such
inspections by SDG&E and/or Onsite, and agrees to provide to SDG&E and/or
Onsite, and SDG&E and/or Onsite shall have the right of, reasonable access, upon
at least fifteen (15) working days notice to Customer, to the Facilities,
including any metering equipment or similar devices used in support of any
measurement and verification plan attached to any Amendment, to perform such
audits, inspections, monitoring and verification.
SECTION 4. PREVAILING WAGES. Customer shall notify Onsite if all or any portion
of the Project, including specifically the installation of ECMs, constitutes a
public works project subject to applicable prevailing wage regulations, and, in
the absence of such notification of Onsite by Customer, shall indemnify, defend
and hold harmless Onsite, its assigns, consultants, contractors, officers,
agents and employees against any and all costs, claims, damages and liabilities
arising out of or relating to the failure of Onsite or any subcontractor of
Onsite to pay prevailing wages. In the absence of such notification by Customer,
Onsite shall not be required to contract for the installation of the ECMs at
prevailing wages.
SECTION 5. LATE PAYMENT. Interest shall accrue on any outstanding balance more
than thirty (30) days past due, at the rate of prime plus two percent (2%) per
annum. This remedy shall be in addition to, and not exclusive of, any
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other remedy available under this Agreement or applicable law. The balance is
not outstanding until the invoice date of the next billing period.
SECTION 6. TERMINATION FEE. In the event this Agreement is terminated pursuant
to Section 15 hereof regarding termination, Customer will be responsible for
payment to Onsite of the Termination Value(s), as applicable, as set forth in
Schedule D. Upon payment of the amount calculated pursuant to Schedule D, Onsite
will abandon the Equipment and assign its ownership interest, if any, in the
Equipment to Customer.
SECTION 7. CONSTRUCTION SCHEDULING. All construction work will be scheduled
between Onsite and its contractors and Customer to minimize inconvenience to
Customer's operation and personnel. Customer's operations shall have priority
over construction.
SECTION 8. INSURANCE. At all times during the Term of this Agreement, including
during the installation of all ECMs by Onsite, Customer either (i) shall be
self-insured for; or (ii) shall maintain in full force and effect, at its
expense, property and liability insurance on the Facilities and on the Equipment
for the Termination Value thereof, and liability insurance for its undertakings
hereunder. Customer shall provide a certificate of insurance to Onsite or its
assignee/transferee naming Onsite or its assignee/transferee as the sole named
loss payee (as their interests may appear) with respect to insurance for damage
to or loss of the Equipment, and Onsite and its assignee/transferee shall be
named as an additional insured on the liability insurance. All insurance shall
provide for at least thirty (30) days advance written notice to Onsite or its
assignee/transferee before cancellation or material modification thereof.
Customer shall bear the entire risk of loss with respect to any damage,
destruction, loss or theft of the Equipment both during and after installation
of the same by Onsite, whether partial or complete. Customer hereby irrevocably
appoints Onsite or its assignee/transferee as Customer's attorney-in-fact to
make claim for, receive payment of, and execute and endorse all documents,
checks or drafts received in payment for loss or damage of the Equipment under
any such insurance policy(ies). If insurance proceeds paid to Onsite or its
assignee/transferee are insufficient to return such Equipment to its previous
condition, such additional costs shall be capitalized and an appropriate
adjustment will be made to the payment schedule pursuant to Schedule C and the
Termination Values pursuant to Schedule D. In the event the Equipment is damaged
beyond repair and Customer and Onsite or its assignee/transferee mutually agree
not to replace it, the applicable portion of this Agreement shall terminate and
Customer shall pay to Onsite or its assignee/transferee (i) any payments
invoiced by Onsite pursuant to Section VI of this Agreement and due and owing by
Customer as of the date of such agreement not to replace the damaged Equipment,
and (ii) the Termination Value set forth in Schedule D related to the Equipment
at the Facilities affected, net of any insurance proceeds actually received by
Onsite or its assignee/transferee, and the payments due thereafter to Onsite
under this Agreement shall be revised accordingly. If insurance proceeds paid to
Onsite or its assignee/transferee exceed the Termination Value pursuant to
Schedule D then, at Customer's sole option, Customer may terminate the portion
of this Agreement related to such Equipment and Onsite or its
assignee/transferee will promptly pay such excess amount to Customer.
During the installation of the ECMs on each Phase, Onsite shall provide and
maintain throughout the Term of this Agreement Workers' Compensation,
Comprehensive General Liability and Comprehensive Automobile Liability Insurance
at the following minimum limits:
(1) WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY INSURANCE with
a limit of $1,000,000 (or such higher limit as may be required by law) to
provide for payment to Onsite's employees, and/or their dependents, employed on
or in connection with the Work covered by this Agreement, of Workers'
Compensation benefits in accordance with applicable laws.
(2) (i) COMPREHENSIVE GENERAL LIABILITY INSURANCE covering all
operations, including completed operations and contractual liability with the
following limits: $1,000,000 per occurrence, $2,000,000 general
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aggregate and $2,000,000 completed operations aggregate; and (ii) EXCESS OR
UMBRELLA LIABILITY INSURANCE with the following limits: $2,000,000 per
occurrence and $2,000,000 general aggregate.
(3) PRIMARY COMPREHENSIVE AUTOMOBILE PUBLIC LIABILITY INSURANCE
covering owned, non-owned and hired automotive equipment used in connection with
Subcontractor's operations with a combined single limit for bodily injury or
death and property damage of $1,000,000 per accident.
(4) ARCHITECTS AND ENGINEERS PROFESSIONAL LIABILITY INSURANCE
coverage with a minimum of $1,000,000 per claim and $1,000,000 general
aggregate.
In the event Onsite contracts any of the work to be performed on the Project to
subcontractors, Onsite will require such subcontractors to carry and maintain
the same (or substantially similar) insurance as specified above. Customer shall
be included as additional insured on the Commercial Liability Insurance
policy(ies) specified above. The naming of Customer as additional insured shall
not obligate Customer to pay any premium on the policy(ies). Such insurance
shall be primary insurance and shall contain a Severability of Interest clause
with respect to each insured.
Prior to commencing implementation of the Project in accordance with this
Agreement, and prior to expiration of any policy of insurance specified herein,
Onsite shall deliver to Customer a Certificate(s) of Insurance (in a form
acceptable to Customer) completed by Onsite and its subcontractor's insurance
carrier or agent certifying that the minimum insurance coverage, as required
above, is in effect and will not be canceled or changed until thirty (30) days
after written notice is given to Onsite and Customer.
SECTION 9. ENVIRONMENTAL REQUIREMENTS. Customer recognizes that in connection
with the performance of the Work, Onsite may encounter, but is not responsible
for any work relating to, (i) asbestos or materials containing asbestos; (ii)
pollutants, hazardous wastes, hazardous materials or contaminants, including
without limitation ballasts that may contain PCBs (collectively clauses (i) and
(ii), "Hazardous Materials"); and (iii) the storage, handling, use,
transportation, treatment, disposal, discharge, leakage, detection, removal or
containment thereof. The materials and activities listed in the foregoing
sentence are referred to as "Excluded Materials and Activities." Customer agrees
that if performance of the Work under this Agreement involves any Excluded
Materials and Activities, including asbestos or materials containing asbestos,
Onsite will not perform such work, and Customer will perform or arrange for the
performance of such work and shall bear the sole risk and responsibility
therefor. Furthermore, in handling any of Customer's property, including without
limitation Hazardous Materials, Onsite neither takes title to any such property
nor assumes any responsibility for the transportation, handling or disposal of
such property. Customer shall be solely responsible for disposing of its
property, including Hazardous Materials, in accordance with all federal, state
and local laws, statutes and regulations applicable thereto and shall provide
written evidence of the same to Onsite. All costs associated with work related
to Excluded Materials and Activities necessary for the implementation of ECMs
shall be included in the Total Capital Cost. Onsite will reimburse Customer for
such costs, but such reimbursement shall not make Onsite liable for any work
related thereto. Where Onsite is aware that Excluded Materials and Activities
are involved with the implementation of the ECMs, it shall be identified in the
audit report prepared pursuant to Schedule A. In furtherance of the foregoing,
Customer agrees to release, indemnify, defend and hold harmless Onsite, its
assigns, consultants, contractors, officers, agents and employees of and from
all costs, claims, damages and liabilities arising out of or relating to
Excluded Materials and Activities, acts or omissions of Onsite or third parties
relating thereto, or injury caused thereby, excepting only such costs, claims,
damages or liabilities as are the result of any willful misconduct and/or gross
negligence of Onsite.
SECTION 10. EVENTS OF DEFAULT.
a. By Customer. Upon any applicable notice and the passage of any
applicable opportunity to cure without such cure being effected, each of the
following events or conditions shall constitute an Event of Default by Customer:
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(1) any failure by Customer to pay Onsite its compensation
required by Section VI of this Agreement for a period of more than thirty (30)
days after the date of the invoice thereof;
(2) any representation or warranty furnished by Customer in this
Agreement was false or misleading in any material respect when made;
(3) institution or any proceeding in bankruptcy, receivership or
insolvency against Customer, or appointment of a trustee or receiver for
Customer or for any substantial part of the Facilities, unless such proceedings
are dismissed within sixty (60) days after their date of filing, or any
assignment by Customer for the benefit of its creditors or a voluntary
commencement by Customer of any proceeding in bankruptcy, receivership or
insolvency; or
(4) any material failure by Customer to observe or perform any
material obligation of Customer under this Agreement.
If any of the events or conditions described above occurs, Onsite shall give
notice to Customer of Onsite's intent to declare an Event of Default by Customer
and Customer shall have a period of thirty (30) days (sixty (60) days under
subsection (3)) after receipt of such notice to effect such cure.
b. By Onsite. Upon any applicable notice and the passage of any
applicable opportunity to cure without such cure being effected, each of the
following events or conditions, except to the extent caused by Uncontrollable
Circumstances, shall constitute an Event of Default by Onsite:
(1) any failure by Onsite to pay Customer any amount required
pursuant to this Agreement for a period of more than thirty (30) days after the
amount has been established;
(2) failure of Onsite to perform any of its responsibilities
pursuant to this Agreement;
(3) any representation or warranty furnished by Onsite in this
Agreement was false or misleading in any material respect when made; or
(4) institution or any proceeding in bankruptcy, receivership or
insolvency against Onsite or appointment of a trustee or receiver for Onsite,
unless such proceedings are dismissed within sixty (60) days after their date of
filing, or any assignment by Onsite for the benefit of its creditors or a
voluntary commencement by Onsite of any proceeding in bankruptcy, receivership
or insolvency.
If any of the events or conditions described above occurs, Customer shall give
notice to Onsite of Customer's intent to declare an Event of Default by Onsite
and Onsite shall have a period of thirty (30) days (sixty (60) days under
subsection (4)) after receipt of such notice to effect such cure. If such cure
cannot reasonably be effected within thirty (30) days, Onsite shall have such
further reasonable period to effect a cure provided that Onsite commences to
effect the cure within such thirty (30) day period and thereafter proceeds
diligently to complete such cure.
SECTION 11. REMEDIES UPON DEFAULT.
a. By Customer. Upon the occurrence of an Event of Default by Customer,
Onsite may, without an election of remedies:
(1) exercise all remedies available at law or at equity or other
appropriate proceedings including bringing an action or actions from time to
time for recovery of amounts due and unpaid by Customer, and/or for specific
performance, and/or for damages; or
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(2) without recourse to legal process, terminate this Agreement by
delivery of a notice declaring termination, enter the Facilities and dismantle
and/or remove the ECMs that have not been paid for from the Facilities without
liability in any suit, action or other proceeding to Customer on account of such
actions. Customer agrees to pay all costs and expenses reasonably incurred by
Onsite in the exercise of any of its remedies (including reasonable attorney's
fees and costs). Except for an Event of Default for failure to pay compensation
owed, in the event Customer fails to perform any other duty, covenant or
condition under this Agreement after thirty (30) days notice, Onsite may perform
such duty at its option and invoice Customer for the cost incurred.
b. By Onsite. Upon the occurrence of an Event of Default by Onsite,
Customer shall have the choice of either of the following remedies:
(1) exercise its option to purchase the Equipment for the
Termination Value set forth on Schedule D, excluding Administrative and Finance
Termination Fees; or
(2) take those actions that would have been incumbent upon Onsite
to perform and invoice Onsite. Customer agrees to immediately notify Onsite of
all actions taken.
Onsite agrees to pay all costs and expenses reasonably incurred by Customer in
the exercise of any of its remedies (including reasonable attorney's fees and
costs). Except for an Event of Default for failure to pay compensation owed, in
the event Onsite fails to perform any other duty, covenant or condition under
this Agreement after thirty (30) days notice, Customer may perform such duty at
its option and invoice Onsite for the cost incurred.
c. Limitation of Remedies. Notwithstanding any provision of this
Agreement which may be to the contrary other than the provision in this section
c., neither Party, nor its officers, employees, agents, partners or affiliates
shall be liable to the other Party, its officers, employees, agents, partners,
affiliates or subcontractors, for claims for incidental, indirect, consequential
or other special damages; provided, however, the foregoing limitation is not
intended to apply to, and shall not be construed to limit or exclude, Customer's
obligations under Section 15 of this Agreement.
SECTION 12. REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES. Each Party warrants
and represents to the other that (i) it has all requisite power, authority,
license, permits and franchises, corporate or otherwise, to execute this
Agreement and perform its obligations hereunder; (ii) its execution, delivery
and performance of this Agreement have been duly authorized by, or are in
accordance with, its organic instruments, and this Agreement has been duly
executed and delivered for it by the signatories so authorized, as set forth in
the Corporate Certificate or Partnership Authorization, as applicable, delivered
by Customer if requested by Onsite and made a part hereof and constitutes a
legal, valid and binding obligation of the Party; and (iii) no suits, actions or
proceedings are threatened or pending that will adversely affect its ability to
perform its obligations under this Agreement, except as otherwise disclosed in
writing prior to the execution of this Agreement.
SECTION 13. ADDITIONAL REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CUSTOMER.
Customer hereby warrants and represents to Onsite that Customer presently
intends to continue to use, for a period at least equal to the Term of this
Agreement, the Facilities in a manner substantially similar to its present use,
except as may have been disclosed by Customer in writing and attached hereto and
made a part hereof. If Customer changes the use of any of the Facilities,
Customer shall notify Onsite of the same. Customer (i) bears the entire risk of
loss due to a reduction in the Incentive Payments and/or the Customer Incentive
Payment as a result of any change by Customer in the use of the Facilities; and
(ii) acknowledges and agrees that the Customer Incentive Payment may be reduced
in the event of a reduction in the Incentive Payments. The Parties also agree to
negotiate an appropriate adjustment in the BEU as defined in and calculated
pursuant to Schedule E, the Guaranteed Energy Savings and payments pursuant to
Schedule C and/or a partial termination payment in accordance with Schedule D.
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SECTION 14. COMPLIANCE WITH LAW AND STANDARD PRACTICES. Onsite shall perform its
obligations hereunder (i) in compliance with all applicable federal, state and
local laws, rules and regulations; (ii) in accordance with sound engineering and
safety practices; and (iii) in compliance with any and all reasonable rules of
Customer relative to the Facilities. Onsite will endeavor to obtain and be
responsible for all governmental permits, consents and authorizations as may be
required to perform its obligations hereunder.
SECTION 15. EARLY TERMINATION. This Agreement (or applicable portion of this
Agreement) is subject to early termination upon:
(1) failure to satisfy the Conditions Precedent identified in
Section XI of the Agreement; or
(2) acquisition of all (but not less than all) of (i) the
Equipment installed in all of the buildings that comprise the Facilities; or
(ii) the Equipment installed in one (1) or more of the buildings that comprise
the Facilities by Customer upon notice to Onsite of Customer's desire to acquire
the same (provided, however, that in the event Equipment is acquired under
subsection (ii), this Agreement shall terminate only as to that Equipment and
building); or
(3) an Event of Default, as described by Section 10.
In case of the first event mentioned above, termination shall be without remedy
or recourse by either Party against the other. In case of occurrence of the
event set forth in subsections (2) or (3) above, any claims arising on account
of performance prior to termination shall survive termination and Customer shall
be obligated to Onsite to pay the Termination Value(s), as applicable, as set
forth in Schedule D
If this Agreement (or applicable portion thereof) is terminated pursuant to this
Section 15, Onsite may retain all amounts previously paid by Customer to Onsite,
and Onsite may collect and retain any amounts due and unpaid by Customer on the
date of such termination. In addition, Customer will be responsible for payment
of the Termination Value(s), as applicable, to Onsite as set forth in Schedule
D.
SECTION 16. ASSIGNMENT; SUBCONTRACTING. Without the prior written consent of
Onsite, Customer shall not (a) assign, transfer, pledge, hypothecate or
otherwise dispose of this Agreement, the Equipment or any interest therein
during the Term of this Agreement; or (b) sublet or lend the Equipment or permit
the Equipment to be used by anyone other than Customer or Customer's employees
during the Term of this Agreement. Onsite may assign any or all of its rights
under this Agreement, grant a security interest in the Equipment, or sell or
transfer all or part of its ownership interest in the Equipment, all for
financing purposes, without the consent of Customer. Customer agrees to execute
such documents reasonably requested by such assignee or transferee, or such
party's agents, to reflect such assignment or transfer. Onsite may not assign
its obligations under this Agreement with the prior written consent of Customer,
which consent shall not be unreasonably withheld; provided, however, that
Customer understands and agrees that Onsite shall enter into subcontracts for
the performance of the Work, and Onsite shall have the right to subcontract any
portion or part of the Work required by this Agreement to a subcontractor
approved by Customer (which approval shall not be unreasonably withheld). Onsite
agrees that if it contracts with any contractors or subcontractors to perform
any portion of the Work hereunder or otherwise in connection with the Equipment,
Onsite (i) shall be solely responsible for the employment and work performed by
such contractors or subcontractors, and Customer shall have no responsibility
whatever therefor (except for the conduct of Customer in connection therewith);
(ii) in employing such contractors or subcontractors, Onsite shall comply with
all laws, rules, regulations and other requirements concerning such employment,
and agrees that Customer shall have no responsibility whatsoever therefor
(except for the conduct of Customer in connection therewith); and (iii) any
repairs, maintenance, damages or other acts caused by any such contractors or
subcontractors shall be the responsibility of Onsite (except the same are caused
by the conduct of Customer)
SECTION 17. TAXES. Onsite will declare and pay when due, and include in the
Total Capital Cost, all applicable license fees, registration fees, assessments,
charges and taxes related to the installation or procurement of the Equipment
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pursuant to this Agreement, whether municipal, state or federal, including but
not limited to sales, use and excise taxes, and penalties and interest with
respect thereto. Customer will be responsible for all applicable taxes related
to operation of the Equipment, including but not limited to reporting the
existence of such Equipment, and all property taxes, and penalties and interest
with respect thereto.
SECTION 18. SEVERABILITY. Any provision of this Agreement prohibited by, or
unlawful or unenforceable under, any applicable law or any jurisdiction shall be
ineffective as to such jurisdiction without invalidating the remaining
provisions of this Agreement.
SECTION 19. EFFECT OF WAIVER. No delay or omission to exercise any right or
remedy accruing to one Party upon any breach or default of the other Party will
impair any such right or remedy or be construed to be a waiver of any such
breach or default, nor will a waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval on the part of one Party of any breach or
default of the other Party under this Agreement, or any Schedule, Exhibit,
provision or condition hereof or thereof, must be in writing specifically set
forth. All remedies, either under this Agreement, or at law or in equity or
otherwise afforded to the Parties are cumulative and not alternate.
SECTION 20. USAGE OF CUSTOMER'S RECORDS. Upon reasonable notice to Customer,
Onsite shall have free access to Customer's existing construction documents,
equipment submittals, operation and maintenance manuals, utility usage bills and
records and any other public access records for various periods of time not
exceeding three (3) consecutive days. Onsite will be responsible for all costs
associated with the replacement of lost, damaged or stolen Customer records
assigned to Onsite. Onsite may, in accordance with copyright laws, reproduce any
records for its use. Onsite shall bear all reproduction costs associated with
the reproduction of Customer's records.
SECTION 21. VENDORS AND MANUFACTURERS' WARRANTIES. For the benefit of Customer,
Onsite shall obtain from all vendors and manufacturers (as applicable) of the
Equipment installed or materials used in the ECMs such warranties against
defects and deficiencies in design, material and workmanship as are generally
given in the trade to an owner or contractor. Except as otherwise set forth in
this Agreement, ONSITE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND WITH
RESPECT TO ANY OF THE EQUIPMENT OR MATERIALS SUPPLIED BY ONSITE OR BY ANY VENDOR
OF ONSITE HEREUNDER, AND ALL EQUIPMENT AND MATERIALS HEREUNDER IS DELIVERED AS
IS, AND THE SOLE WARRANTIES AND REPRESENTATIONS THAT SHALL APPLY WITH RESPECT TO
SUCH EQUIPMENT AND MATERIALS SHALL BE THOSE WARRANTIES AND REPRESENTATIONS,
WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS OR IMPLIED (INCLUDING WARRANTIES OF
FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY) THAT HAVE BEEN GIVEN OR
MADE BY SUPPLIERS OR SUBCONTRACTORS TO ONSITE OR BY MANUFACTURERS OF SUCH
EQUIPMENT TO END USERS. THIS WARRANTY IS EXPRESSLY IN LIEU OF ALL OTHER
WARRANTIES EXCEPT AS ARE EXPRESSLY STATED IN THIS AGREEMENT. Onsite hereby
assigns to Customer all of Onsite's interest, if any, in all equipment vendors
and manufacturers' warranties and guarantees, express or implied, issued on or
applicable to the Equipment installed and materials used in ECMs. Customer shall
hold Onsite harmless and shall be responsible for any loss, damage or injury to
persons or property caused by the Equipment. No representation or warranty by
the suppliers or manufacturers is binding on Onsite nor shall breach of such
warranty relieve Customer of Customer's obligations to Onsite. In no event shall
Onsite be liable to Customer for special, indirect, incidental or consequential
damages. The above language does not affect the Energy Savings guarantee set
forth in Section IX of this Agreement.
Notwithstanding the foregoing, Onsite agrees to provide warranty administration
services throughout the term of the warranty period and will manage service
and/or repairs provided by individual manufacturers and subcontractors.
SECTION 22. DISPUTE RESOLUTION PROCESS.
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a. Mandatory Non-Binding Mediation. If a dispute arises out of, or
relates to this Agreement, or the breach thereof, and if said dispute cannot be
settled through normal contract negotiations, the Parties agree to first
endeavor to settle the dispute in an amicable manner, using mandatory mediation
under the Construction Industry Mediation Rules of the American Arbitration
Association ("AAA") or any other neutral organization agreed upon by the
Parties, such as the University of San Diego Municipal Dispute Resolution group
(the "USD Group") before having recourse in a court of law.
b. Mandatory Mediation Costs. The expenses of witnesses for either side
shall be paid by the Party producing such witnesses. All other expenses of the
mediation, including required traveling and expenses of the mediator, and the
cost of any proofs or expert advice produced at the direct request of the
mediator, shall be borne equally by the Parties, unless they agree in writing
otherwise in advance. The shared costs would be minimal and are estimated at One
Thousand Five Hundred Dollars ($1,500) or less for claims up to Sixty Thousand
Dollars ($60,000) and Three Thousand Dollars ($3,000) or less for claims over
Sixty Thousand Dollars ($60,000). If both Parties agree, then the mediation
costs may increase as required for the resolution of the dispute.
c. Selection of Mediator. A single mediator that is acceptable to both
Parties shall be used to mediate the dispute. The mediator will be knowledgeable
in construction aspects and may be selected from lists furnished by the AAA, the
USD Group or any other neutral organization agreed upon the Parties, hereinafter
called the Administrator. To initiate mediation, the initiating Party shall
serve a Request for Mediation on the opposing Party. At the same time, the
initiating party shall concurrently file with the Administrator the following:
three (3) copies of the Request for Mediation along with the appropriate filing
fees; a copy of the list of mediators marked in preference order, after striking
any mediators to which the Party has any factual objection; and a copy of the
calendar form designating the initiating Party's availability for the mediation
hearing.
Within two (2) working days from the receipt of the initiating Party's Request
for Mediation, the opposing Party shall file the following: a copy of the list
of the mediators listed in preference order, after striking any mediators to
which they have a factual objection; and a copy of the calendar form designating
their availability for the mediation hearing.
The Administrator shall appoint the highest, mutually preferred mediator from
the individual Parties' lists who is available to serve within the designated
time frames.
d. Conduct of Mediation Sessions. Mediation hearings will be conducted in
an informal manner and discovery will not be allowed. All discussions,
statements or admissions will be confidential to the Party's legal position. The
Parties may agree to exchange any information they deem necessary.
Both Parties must have an authorized representative attend the mediation. Each
representative must have the authority to recommend entering into a settlement.
Either Party may have attorney(s), witnesses or expert(s) present. Either Party
may request a list of witnesses and notification whether attorney(s) will be
present.
Spokespersons shall be limited to Customer's Staff and Onsite, its
subcontractors and/or subconsultants personnel, except that, at its option,
Onsite may have an attorney present, in which event it shall advise Customer no
less than three (3) working days before the mediation so that Customer may also
have its attorney present. Outside experts, including attorneys, may address
their specialty if approved by both Parties.
Any resultant agreements from mediation shall be documented in writing by both
Parties and may be used as the basis for a Change Order or other directive as
appropriate. All mediation results and documentation, by themselves, shall be
non-binding and inadmissible for any purpose in any legal proceeding, unless
such admission is otherwise agreed upon, in writing, by both Parties. Mediators
shall not be subject to any subpoena or liability and their actions shall not be
subject to discovery.
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e. Dispute Resolution Board.
(1) If mediation is unsuccessful in settling the dispute and if
both Parties agree, a non-mandatory dispute resolution board process may be
used. The Parties may impanel a Dispute Resolution Board ("DB") and the DB
process shall be conducted in accordance with Customer's Alternative Dispute
Resolution Process, utilizing board members who are individuals who have
expertise in construction. The selection process shall be administered by the
AAA or any other such neutral organization selected by the Parties, hereinafter
called the "Administrator." Claims made for Sixty Thousand Dollars ($60,000) or
less shall be heard by one (1) DB member, and claims for more than Sixty
Thousand Dollars ($60,000) shall be heard by three (3) DB members.
To initiate the DB procedures, the Parties shall jointly execute and file a
"Submission to Dispute Resolution Board Procedures" request with the
Administrator. Upon receipt by the Administrator of the submission form, the
Administrator shall furnish to the Parties of list of individuals skilled in
dispute resolution and having expertise in construction from which to select the
DB. Within five (5) working days from the date the list is sent to the Parties,
the Parties shall return the list to the Administrator, striking any individual
to which the Parties have any factual objections and numbering the remaining in
preference order. The Administrator shall appoint the highest mutually preferred
individuals to the DB that are available to serve in the time frame designated
above.
(2) The costs for all DB hearings and proceedings, which includes those
of either the one (1) person or three (3) person boards hearing the dispute,
will be shared equally by both Parties. Fees shall be jointly negotiated by both
Parties directly with the Administrator. Unless otherwise mutually agreed upon,
the costs for claims up to Sixty Thousand Dollars ($60,000) shall not exceed One
Thousand Five Hundred Dollars ($1,500), and costs for claims over Sixty Thousand
Dollars ($60,000) shall not exceed Three Thousand Dollars ($3,000).
(3) DB hearings will be conducted in an informal manner and discovery
will not be allowed. Each Party shall have a maximum of two (2) hours for
presentation, unless otherwise agreed upon. Spokespersons shall be limited to
Customer's Staff and Onsite, its subcontractors and/or subconsultants personnel.
Outside experts, including attorneys, may address their specialty if approved by
both Parties in advance. Each Party will be given full opportunity to present
its views and supporting information, including documents, drawings or other
pertinent material. All such evidence and displays shall be considered
confidential and shall be retained by the presenting Party. Discussions or
admissions during DB discussions shall be considered as part of privileged
settlement discussions, without prejudice to any Party's legal positions.
Any resultant agreements from DB hearings shall be documented in writing by both
Parties and may be used as the basis for a Change Order or other directive as
appropriate. All DB results and documentation, by themselves, shall be
non-binding and inadmissible for any purpose in any legal proceeding, unless
such admission is otherwise agreed upon, in writing, by both Parties. DB members
shall not be subject to any subpoena or liability and their actions shall not be
subject to discovery.
Within five (5) working days after the hearing, the DB will make its
recommendations for resolution of the dispute to the Parties. The DB will strive
for consensus and unanimity in its decision making. If such in unattainable,
however, separate written recommendations may be made as majority or minority
reports.
SECTION 23. COMPLIANCE WITH CUSTOMER'S EQUAL OPPORTUNITY CONTRACTING PROGRAM.
Onsite and each of its subcontractors and/or subconsultants shall comply with
Customer's Equal Opportunity Contracting Program Requirements, a copy of which
is attached hereto as Schedule H and incorporated herein by this reference.
SECTION 24. DRUG-FREE WORKPLACE. Onsite agrees to comply with Customer's Drug
Free Workplace requirements set forth in Council Policy 100-17, adopted by
Council Resolution No. R-277952 and incorporated into this Agreement by this
reference. The elements of this policy are set forth on Schedule I. Onsite shall
certify to Customer
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that it will provide a drug-free workplace by submitting a Certification for a
Drug-Free Workplace in the form to Schedule I.
SECTION 25. INDEMNIFICATION.
(a) Indemnification and Hold Harmless Agreement. With respect to any
liability, including but not limited to claims asserted or costs, losses,
attorney fees or payments for injury to any person or property caused or claimed
to be caused by the acts or omissions of Onsite, or Onsite's employees, agents
and officers, arising out of any services performed involving this Agreement,
except liability for professional services covered under subsection (b) below,
Onsite agrees to defend, indemnify, protect and hold harmless Customer, its
employees, agents and officers, from and against all such liability. Onsite's
duty to defend, indemnify, protect and hold harmless shall not include any
claims or liabilities arising from the negligence or willful misconduct of
Customer, its employees, agents and officers.
(b) Indemnification for Professional Services. As to any professional
services being performed by Onsite under this Agreement, Onsite agrees to
defend, indemnify, protect and hold harmless Customer, its agents, officers and
employees from and against any and all claims asserted, or liability established
for any damages, arising from the active or passive negligent acts or omissions
of Onsite. Customer may, of its own election, conduct its defense or participate
in the defense of any claim related in any way to this Agreement; provided
however, that Onsite's duty to indemnify and hold harmless shall not include any
claims or liability arising from the established negligence or willful
misconduct of Customer, its agents, officers or employees.
(c) Duty to Defend. Onsite further agrees that the indemnification
agreement in subsections (a) and (b) above, and the duty to defend Customer,
require Onsite to pay any costs and reasonable attorneys' fees Customer incurs
that are associated with enforcing these indemnification provisions, and
defending any claims arising from this Agreement that are the appropriate
subject of indemnification provided under this Section 25; provided, however,
that if Customer chooses at its own election to conduct its own defense,
participate in its own defense or obtain independent legal counsel in defense of
any claim related to this Agreement, Onsite shall have no obligation to
reimburse Customer for the attorneys' fees and/or costs incurred in such defense
or counsel.
SECTION 26. MISCELLANEOUS. All obligations of Customer, if more than one, shall
be joint and several. Customer shall provide Onsite with such financial data or
information relative to this Agreement and the Equipment as Onsite may
reasonably request.
END OF GENERAL TERMS AND CONDITIONS
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