Exhibit 10.79
AGREEMENT FOR FLY ASH; RESTATED CONTRACT NO. 3804-983
AMENDMENT NO. 12
THIS AMENDMENT NO. 12 TO "AGREEMENT FOR FLY ASH" is entered into this 22th day
of May 2001.
WHEREAS, Purchaser and Company have entered into a contract for sale by
Company of fly ash produced at Company's Centralia Plant dated March 1,
1977, as amended by amendments 1 through 11 (the "Agreement"); and
WHEREAS, THE PURCHASER AND COMPANY DESIRE TO AMEND THE TERMS OF THE
AGREEEMENT, THE PARTIES DO HEREBY AGREE AS FOLLOWS:
1. Change Company name to TransAlta Centralia Generation LLC.
2. Change Purchaser's name to ISG Resources, Inc.
3. Purchaser will obtain eight <$) knife gates to be installed by
Company on top of flyash bins for better segregation of flyash.
4. * Purchaser will provide all design, equipment, material and hire
Company approved contractor to install a carbon fixation systems in
the flyash unloading room (per attachment A).
* Company will provide electricity for new equipment operation.
* The Purchaser will retain ownership and maintenance of the
equipment and the Company will bear no liability for equipment
damage.
* The Company will retain ongoing review of equipment and it will
be removed at the Company's request.
* The Company will not participate in the cost of flyash treatment.
All costs will be paid by Purchaser.
* Purchaser will report monthly the tons of ash treated and maintain
flow meter readin for audit purposes.
PURCHASER COMPANY
ISG RESOURCES, INC. TRANSALTA CENTRALIA
GENERATION LLC
By /s/ Clinton A. Kurtz By /s/ Darrel Webster for
--------------------------- -----------------------------
Name Clinton A. Kurtz Name JEFF D WILLEY
Title V. President - W. Region Title CONTRACT ADMINSTRATOR
June 26, 2001 June 28, 2001
- ------------------------ ------------------------
Date Executed Date Executed
AMENDMENT NO. 11 TO
CENTRALIA PLANT
AGREEMENT FOR FLY ASH; CONTRACT NO. 3804-983
This Amendment No. 11 to Centralia Plant ("Centralia Plant") Agreement
for Fly Ash (Contract No. 3804-983) is entered into this 5th day of August, 1997
between Pozzolanic Northwest, Inc. ("Purchaser") and PacifiCorp ("Company").
RECITALS
WHEREAS, Purchaser and Company have entered into a contract for sale by Company
of fly ash produced at Company's Centralia Plant dated March 1, 1977, as amended
by amendments 1 through 10 (the "Agreement"); and
WHEREAS, THE PURCHASER AND COMPANY DESIRE TO AMEND THE TERMS OF THE AGREEMENT,
THE PARTIES DO HEREBY AGREE AS FOLLOWS:
1. The combustion of coal at the Centralia Plant produces certain
residual wastes in the form of ash collected by electrostatic
precipitators (herein called "fly ash" or "reject ash") and other
by-products. Considerable quantities of fly ash, reject ash and
other by-products must be removed and disposed of by Company at
their expense.
2. Purchaser has explored the possibility of using or commercially
marketing, or both, the fly ash at its sole expense. Purchaser in
consideration for - an extension to the Restated Agreement, dated
January 20, 1992, in Amendment No. 9, a revision to the Company's
residual value percentage at the expiration of this Agreement; and
other incentives to use, market or _ sell all the fly ash produced
by Company - agrees to: increase the price paid to Company,
eliminate additional transportation expenses by purchasing the fly
ash FOB the spout, revise the exclusive right to a right of first
refusal and other incentives to make the Agreement easier to
administer. Purchaser desires to obtain the right, title and
interest to those amounts of fly ash it may require from time to
time for its own use or for dolivery to customers that it may
develop, together with rights to have installed and maintained
certain equipment on the Centralia Plant site for such purpose.
Installation of certain equipment is further defined in Article . 3,
Equipment at Centralia Plant Site and Article 4, Maintenance and
Operation.
WHEREAS, the parties desire to continue their basic relationship whereby
Purchaser buys from Company fly ash produced at Company's Centralia Plant; and
Page 1 of 9
WHEREAS, fly ash means ash collected by electrostatic precipitators at the
Centralia Plant that meets the color, fineness, LOI and other quality
requirements to be mixed with Portland Cement and considered as meeting industry
standards;
WHEREAS, reject ash means ash collected by electrostatic precipitators at the
Centralia Plant that does not meet the standards for fly ash or fly ash rejected
by Purchaser that is transferred to silos 13 and 14. Bottom ash, economizer ash,
cenospheres, scrubber sludge and other related products are by-products
resulting from operation of the Centralia Plant and are neither fly ash nor
reject ash. However, Purchaser may explore using or marketing these related
products under separate agreements;
WHEREAS, Purchaser's rights, title and interest for exclusive right to fly ash
shall pertain to fly ash in Company's silos 11 and 12. All fly ash shall
initially go into silo 11. All ash transferred to Companys silos 13 and 14 from
Company's silos 11 and 12 is considered reject fly ash (whether it is fly ash or
reject ash) for the purposes of this Agreement. Reject ash in silos 13 and 14
may be marketed or sold to others by Company provided the reject ash is not
marketed or sold to current customers of Purchaser. Company may sell to a
competitor of Purchaser as long as the competitor does not sell the reject ash
to Purchaser's customers. Purchaser shall provide a list of customers when
requested by Company, in order for Company to determine if the marketing or sale
of reject ash is to a customer of Purchaser,
WHEREAS, the intent of this Amendment No. 11 is to give both parties incentives
to work harmoniously and cooperatively towards reducing Company's disposal costs
and increasing the revenue derived from fly ash sales for both parties, and
ultimately using, marketing or selling all the fly ash;
WHEREAS, Purchaser and Company therefore desire to amend the terms of the
Agreement.
AGREEMENT
NOW,THEREFORE, the parties do hereby further agree as follows:
1. Definitions and References. The capitalized terns used herein shall
have the same meanings as those defined in the Fly Ash Agreement
between PacifiCorp Electric Operations and Pozzolanic Northwest,
Inc., dated January 20, 1992 (the "Restated Agreement"), unless
otherwise defined above or herein. All references to section numbers
herein refer to the Restated Agreement. From and after the date of
this Amendment N0.11, the terms "fly ash" and "reject ash" shall
have the meanins defined in this Amendments Recitals.
Page 2 of 9
2. Extension of Agreement. The parties agree to extend the term of the
Agreement from February 28, 2002, to __________________ with options
to extend the Agreement in 5 year terms beginning in ______________
in order for Purchaser to have a continuous ___________________ year
term, provided Purchaser's performance is in accordance with the
Agreement.
3. Right to Fly ash. Section 2.1 of the Restated Agreement is deleted
in its entirety and replaced with:
2.1 Purchaser, for the price specified in Section 5 to be paid to
the Company shall have the right to remove, market for sale,
sell and otherwise dispose of any or all fly ash it may now or
hereafter require, subject to this Agreement, either acting
alone or in conjunction with others, from Company's silos 11 and
12; provided however, that the Company may at its own discretion
retain any amount of fly ash which it may desire for its own
use, including but not limited to the blending of fly ash with
scubber sludge or any other byproducts of the Centralia Plant;
and provided further that the Company shall have the right to
market for sale and sell all fly ash or reject ash at any time
that Purchaser transfers ash to Company's silos 13 and 14 or at
any time Purchaser does not remove available quantities of fly
ash from the Centralia Plant, including fly ash in Company's
silos 11 and 12 as specified below.
Purchaser will have right of first refusal to all fly ash as it
enters Company's silo 11 or is classified and placed in
Company's silo 12. After Purchaser exercises its right of first
refusal, Company may remove, market for sale, sell and otherwise
dispose of any and all reject ash in silos 13 and 14 it may now
or hereafter require, subject to this Agreement, either acting
alone or in conjunction with others; provided, however, that the
Company may at its own discretion retain any amounts of reject
ash which it may desire for its own use. Company reserves the
right to sell any or all reject ash to third parties independent
of Purchaser if the Company, in its sole discretion, deems the
terns offered by the third party to be more favorable than
offered by Purchaser.
Company, however, agrees not to soil any fly ash or reject ash
to customers of Purchaser. Company may sell fly ash or reject
ash to a competitor of Purchaser as long as the competitor does
not sell the fly ash or reject ash to Purchaser's customers.
Purchaser shall provide a list of fly ash customers and reject
ash customers when requested by Company.
Any new customers obtained after March 1, 1997 that Purchaser
adds to the original lists will not be considered customers if
Page 3 of 9
Purchaser has not sold the customer fly ash or reject ash within
12 months. Pre March 1,1997 customers of Purchaser will not be
subject to this 12 month requirement.
If Company is contacted by a competitor or customer for fly ash
or reject ash and the ultimate customer is not on the respective
list, Purchaser will have 48 hours to exercise its right of
first refusal before the fly ash or reject ash is sold to the
customer or competitor or before any fly ash is disposed of or
before being transferred to silos 13 and 14 as reject ash.
In the unlikely event that Purchaser does not exercise its first
right of refusal and fly ash needs to be loaded into others
trucks or rail cars out of silos 11-14; Purchaser agrees to
reasonably accommodate this loading and charge Company
Purchaser's actual loading costs (exclusive of overheads), as
they relate to this activity.
4. Equipment at Centralia Plant Site add the following 3.4 and 3.5 to
section 3 of the Agreement
3.4 Purchaser will submit a list of equipment annually to Company
for consideration in Company's budget process. If budget
requests are justifiable, Company will use best efforts to get
them approved. Approved capital costs at the Centralia Plant are
to be at Company's sole expense.
3.5 Reacting quickly to market conditions is important, and
therefore, unbudgeted capital equipment items, that Company and
Purchaser are in agreement with, can be initially paid for by
Purchaser and Company will true up this expenditure the
following year with a capital project to reimburse Purchaser.
5. Maintenance and Operation add the following 4.6 to Section 4 of the
Agreement.
Page 4 of 9
6. Sales Price Sections 5.1, 5.2, 5.4, 5.5 of the Restated Agreement
shall be deleted in their entirety and replaced with the following:
Page 5 of 9
Page 6 of 9
8. Indemnification Section 9 of the Restated Agreement shall be deleted
in its entirety and is replaced.
Page 7 of 9
9.1 Purchaser specifically and expressly agrees to indemnify,
defend, and hold harmless Company and its directors, members of
Company's Pacific Board, Utah Board, and Wyoming Board,
officers, employees and agents (hereinafter collectively
"Indemnitees") against and from any and all claims, demands,
suits, losses, costs and damages of every kind and description,
including attorneys' fees and/or litigation expenses, brought
or made against or incurred by any of the Indemnitees resulting
from, arising out of, or in any way connected with any act,
omission, fault or negligence of Purchaser, its employees,
agents, representatives or subcontractors of any tier, their
employees, agents or representatives in the performance or
nonperformance of Purchaser's obligations under this Agreement
or in any way related to this Agreement. The indemnity
obligations under this Section shall include without
limitation.
1. Loss of or damage to any property of Company, Purchaser or
any third party;
2. Bodily or personal injury to, or death of any person(s),
including without limitation employees of Company, or of
Purchaser or its subcontractors of any tier, and
3. Claims arising out of Workers' Compensation, Unemployment
Compensation, or similar such laws or obligations
applicable to employees of Purchaser or its subcontractors
of any tier.
9.2 Purchaser's indemnity obligations under this Section for death,
bodily injury or property damage (collectively "Damages")
caused in part by the negligence of Comapany shall be limited
to the extent the Damages arise out of the negligence or
willful acts of Purchaser, its employees, agents,
representatives or subcontractors of any tier, their employees,
agents or representative.
9.4 For work performed in the State of Washington, and to the
extent applicable, Purchaser specifically and expressly, waives
any immunity under Industrial Insurance, Title 51, RCW, and
acknowledges that this waiver was mutually negotiated by the
parties herein.
9. Exhibit A shall be deleted in its entirety and shall no longer be
applicable.
10. Effect of Amendment. Except as otherwise amended by this Amendment
No. 11, the Agreement remains in full force and effect as amended.
Page 8 of 9
IN WITNESS HEREOF, this Amendment No. 11 has been executed by the parties and is
effect as of March 1, 1997.
POZZOLANIC NORTHWEST, INC. PACIFICORP for itself and as agent
for COMPANYS
By: /s/ Clinton A. Kurtz By: /s/ Russell Davidson
--------------------------- -----------------------------
Its: Secretary/Treasurer Its: Procurement Manager
Page 9 of 9
AGREEMENT FOR FLY ASH; RESTATED CONTRACT NO. 3804-983
AMENDMENT NO. 10
THIS AMENDMENT NO. 10 TO "AGREEMENT FOR FLY ASH" is entered into this 26the day
of June 1995.
WHEREAS, the undersigned parties have entered into a Contract dated March 1,
1977, for Sale by OWNERS to POZZOLANIC NORTHWEST, INC., ("Purchaser") of fly ash
produced at Owner's Centralia Steam Electric Generating Plant; and
WHEREAS, the parties desire by this instrument to amend the terms of said
Agreement to reduce the disposing of reject fly ash,
NOW, THEREFORE, the parties do hereby further agree as follows:
1. Purchaser shall engineer, construct, and provide all equipment
necessary to install an auger-unloader for No. 14 Fly Ash Tailings
Bin, including electrical work, auger and knife gate valve.
2. Purchaser shall install the equipment on Company's No. 14 Fly Ash
Bin located at the Centralia Steam Electric Generating Plant's Fly
Ash Loading Facility.
3. Company will compensate Purchaser for the installation of the recon
auger loading station for the Firm Lump Suns price of _____________
__________________________________________________________________.
Purchaser shall receive payment by deducting the _________________
from monthly payments to Company for future Fly Ash Sales. The
amount may be deducted in total or inpart until the Firm Lump Sum
Amount is satisfied.
4. Contractor shall provide itemized accounting for sales of reject
ash on the monthly sales report for tarcking payback of the cost
for the recon auger loading station.
5. All other terms and conditions of the Agreement shall remain in
effect.
PURCHASER COMPANY
POZZOLANIC NORTHWEST, INC. PACIFICORP for itself and as agent for
the Owners of the CENTRALIA
STEAM ELECTRIC GENERATING PLANT
By /s/ Clinton A. Kurtz By /s/ Michael O. Scriners, for
---------------------------- ----------------------------------
Name Clinton A. Kurtz Name Zack B. Brewer, Jr.
(Type or Print)
Title Secretary/Treasurer Title Lead Contract Administrator
8/7, 1995 8-9, 1995
- ------------------------- --------------------------------
Date Executed Date Executed
CENTRALIA STEAM ELECTRIC GENERATING PLANT
AGREEMENT FOR FLY ASH: CONTRACT NO. 3804-983
AMENDMENT No. 9
THIS AMENDMENT NO. 9 to "AGREEMENT FOR FLY ASH" is entered into this
20th day of January, 1992.
WHEREAS, the undersigned parties have entered into a Contract dated
March 1, 1977 for sale by OWNERS to POZZOLANIC NORTHWEST, INC. ("Purchaser") of
fly ash produced at Owner's Centralia Steam Electric Generating Plant: and
WHEREAS, the parties desire by this instrument to amend. the terms of
said agreement and to resolve and settle certain concerns arising out of. said
Agreement and incorporate Amendments 1-8 of said Agreement into a Restated
Agreement for clarification of said Agreement,
NOW, THEREFORE, the parties do hereby further agree as follows:
1. RESTATED AGREEMENT ASATTACHED.
PURCHASER COMPANY
POZZOLANIC NORTHWEST, INC. PACIFICORP ELECTRIC OPERATIONS
for itself and as agent for OWNERS
By /s/ Gerald A. Peabody By /s/ Zack B. Brewer, Jr.
-------------------------- ---------------------------------
Name Gerald A. Peabody Name Zack B. Brewer, Jr.
Title President Title Lead Contract Administrator
20 Jan 1992 January 20, 1992
- -------------------------- ------------------------------------
Date Executed Date Executed
RESTATED
FLY ASH AGREEMENT
BETWEEN
PACIFICORP ELECTRIC OPERATIONS
AND
POZZOLANIC NORTHWEST, INC.
OF AGREEMENT NO. 3804-983
TABLE OF CONTENTS
RESTATED AGREEMENT PAGE 1
1. TERM OF AGREEMENT PAGE 1
2. RIGHT TO FLY ASH PAGE 1
3. EQUIPMENT AT CENTRALIA PLANT SITE PAGE 2
4. MAINTENANCE AND OPERATION PAGE 3
5. SALES PRICE PAGE 4
6. CONDUCT OF OPERATIONS PAGE 9
7. MINIMUM SALES VOLUME PAGE 10
8. DEFAULT-TERMINATION PAGE 13
9. INDEMNIFICATION PAGE 13
10. WORKERS' COMPENSATION PAGE 14
11. INSURANCE PAGE 14
12. NOTICES PAGE 16
13. ARBITRATION PAGE 16
14. UNCONTROLLABLE FORCES PAGE 17
IS. ASSIGNMENT PAGE 17
16. LITIGATION/APPLICABLE LAW PAGE 18
17. COMPLETE AGREEMENT PAGE 18
18. ADDITIONS PAGE 18
19. NONWAIVER PAGE 18
20. MWBE/EQUAL EMPLOYMENT OPPORTUNITY
AGREEMENT AND CERTIFICATION PAGE 18
21. LIMITATION OF LIABILITY PAGE 19
22. DAMAGES PAGE 19
23. AUDIT PAGE 19
Attachment A
Exhibit A
Exhibit B
Examples
RESTATED AGREEMENT NO. 3804-983
PACIFICORP ELECTRIC OPERATIONS
CENTRALIA STEAM ELECTRIC GENERATING PLANT
RESTATED AGREEMENT FOR FLY ASH
THIS RESTATED AGREEMENT, hereinafter referred to as "AGREEMENT",
between PACIFICORP ELECTRIC OPERATIONS, ("Company") acting for itself as
operator and as agent for the Owners of the Centralia Steam Electric Generating
Plant, Centralia, Washington, to-wit: PACIFICORP ELECTRIC OPERATIONS, THE
WASHINGTON WATER POWER COMPANY, CITY OF TACOMA DEPARTMENT OF PUBLIC UTILITIES,
PUD NO. 1 OF SNOHOMISH COUNTY, SEATTLE CITY LIGHT, PUGET SOUND POWER & LIGHT
COMPANY, PORTLAND GENERAL ELECTRIC, AND PUD NO. 1 OF GRAYS HARBOR COUNTY
(collectively "Owners"), and POZZOLANIC NORTHWEST, INC., ("Purchaser"),
withnesseth that:
WHEREAS, the parties have been signatory to an Agreement or Fly Ash
(Agreement No. 3804-983) dated March 1, 1977, with Amendment Nos. 1-8;
WHEREAS, THE PARTIES AGREE TO THE FOLLOWING FACTS:
a. The combustion of coal at the Centralia Plant produces certain
residual wastes in the form of ash collected by electrostatic
precipitators (herein called "Fly Ash") , Considerable
quantities of Fly Ash must be removed and disposed of by
pacific at the owner's
b. Purchaser has explored the possiblitiy of using or
commercially marketing, or both, the Fly Ash at its sole
expense. Purchaser desires to .obtain the right, title and
interest to those amounts of Fly Ash it may require from time
to time for its own use or for delivery to customers that it
may develop, together with rights to have installed and
maintained certain equipment on the Centralia Plant site for
such purpose. Installation arid maintenance of certain
equipment is further defined in Article 3, Equipment at
Centralia Plant Site and Article 4, Maintenance and Operation.
WHEREAS, the parties desire to continue their basic from Company Fly A
relationship whereby Purchaser, buys from Ash, reject ash, economizer ash and
cenospheres (herein after referred to as "Fly Ash") produced at owner's
Centralia Steam Electric Generating Plant; and
Restated Agreement No. 3804-983
NOW, THEREFORE, Company and Purchaser do hereby agree as follows:
1. TERM OF AGREEMENT
1.1 This Agreement shall become effective upon date of its
execution by Company, and shall continue uniterrupted with the
five consecutive five-year terms as orginally stated in
Agreement No. 3804-983, terminating on February 28, 2002,
unless earlier termineated in accordance iwth the provisions
of this Agreement. Parties agree that Company may, at
Company's option, extend the term of the Agreement.
2. RIGHT TO FLY ASH
2.1 Purchaser, for the price specified in Section 5 to be paid to
Company, shall have the exclusive right to store, remove,
market for sale, sell and otherewise dispose of any or all Fly
Ash it may now or hereafter require, subject tot his
Agreement, either acting alone or in conjunction with others;
provided, however, that Company may at its own discretion
retain any amount of Fly Ash which it may desire, for its own
use.
2.2 Company makes no representation as to the continued
availability, nor quantity, of Fly Ash throughout the life of
this Agreement, and rights to Fly Ash granted to Purchaser by
this Agreement create no obligation on Company to produce Fly
Ash at any minimum rate or volume at any time.
2.3 Company expressly disclaims all warranties and guarantees,
whether implied or expressed, including but not limited to
warranties of merchantability and fitness for any particalar
purpose.
2.4 Purchaser shall not use Company's or the Owners' name in any
manner whatsoever in conjunction with the use or sale of Fly
Ash.
3. EQUIPMENT AT CENTRALIA PLANT BITE
3.1 All existing equipment and facilities currently associated
with the Fly Ash. removal, handling or storage process at the
Centralia Plant are property of Company, except as listed on
Attachment A, "Purchaser's Equipment."
-2-
Restated Agreement No- 3804-983
3.2 To the extent Purchaser's costs associated with Company
equipment and.facilities as defined in Section 3.1 have been
previously credited to the account of Purchaser such costs
will continue to be amortized through Fly Ash . purchases at
the rate specified in section 5.
3.3 Any new equipment or facilities deemed necessary by Purchaser
for Purchaser's Fly Ash needs will be submitted in concept to
company for approval. If Company concurs, it will so notify
Purchaser in writing. Purchaser will then be responsible for
the design and engineering, which shall be subject to Company
approval, and Company will construct any new equipment or
facilities at Company's expense. said .new facilities or
equipment shall be property of Company at all times.
Reasonable and actual expenses borne by Purchaser under this
Paragraph 3.3 shall be reimbursed by Company.
4. MAINTENANCE AND OPERATION
4.1 Company will be responsible for maintenance of all Fly Ash
facilities and equipment at the Centralia Plant Site,
including mobile equipment, owned by Company. Purchaser shall
be responsible for maintenance of all fly ash facilities and
equipment at the plant site including mobile equipment, owned
by Purchaser. Each party shall bare the costs of maintaining
their own facilities and equipment at plant site.
4.2 Company will maintain on the plant site an adequate supply of
spare parts, filters, lubricants, special tools and heavy
equipment for the maintenance of Company's facilities.
4.3 Company shall respond. (initiate work) to request by Purchaser
for emergency maintenance of Company's facilities within 1/2
hour during regular Company work hours or within 3 hours
during non-regular Company work hours. If Company is unable or
does not respond within these time frames, Purchaser shall
have the right to take reasonable action to secure parts or
have maintenance performed by a Company approved contractor or
Company approved purchasers personnel. In such cases, Company
shall reimburse Purchaser for Purchaser's actual and
reasonable costs of parts and contract services.
-3-
Restated Agreement No. 3804-983
4.4 The hiring and supervision of personnel to provide operation
of the facilities and maintenance of purchaser owned equipment
shall be the responsibility of Purchaser. The cosh including
wages, of providing a staff of competent operators, laboratory
supervisors and management personnel shall be borne by
Purchaser.
4.5 Purchases, of Fly Ash will be weighed at the Centralia Plant
site or the Centralia storage facility. If these . facilities
are not available for whatever reason, each truck load will be
supported by a public scale weight verification after each
pick-up.
5. SALES PRICE
5.1 The price Purchaser will pay for the Fly Ash removed from the
Centralia Plant site for sale to others shall be 25 percent of
the price Purchaser obtains from the sale of Fly Ash to
others, after deducting direct transporting costs, (those
costs incurred from point of origin to point of destination)
provided, however, that in no event shall Purchaser pay in
total for all Fly Ash less than the per ton minimum price for
the Minimum Sales Volume of Fly Ash as calculated under
Paragraph 7.3 below. Any savings resulting from backhauling
will be shared with Company in the same manner as the original
haul.. "Transporting costs" as used herein are further defined
as the total direct costs incurred in delivering the Fly Ash
from the plant site to the customer. It includes all rail
costs including freight .charges, surcharges and demurrage
costs imposed by the railroads including costs of the rail
cars. It includes all truck freight charges, surcharges and
highway use taxes. Purchaser-owned or leased trucks are
charged at the prevailing tariff rate. Transporting costs do
not include the cost of plant site personnel, technical
representatives, office costs, Purchaser's equipment listed on
Attachment A or any other equipment at the Centralia Plant
site or Centralia storage facility that may be used for
locating rail cars, except to the extent that such costs are
associated with the acquisition of an intermediate silo,
storage facility, terminal or barging facility.
If an intermediate silo, storage facility, terminal barging
facility is required or if personnel or equipment is required
far these facilities, then these costs including the
associated lease and/or acquisition costs for such
intermediate facilities and equipment are treated as
transporting costs, as they are incurred in
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Restated Agreement No. 3804-983
delivering the Fly Ash from the plant site to the customer.
For the purpose of determining the associated costs of
Purchaseracquired intermediate facilities, the acquisition
charge shall be calculated using one of the following methods
depending upon whether the acquisition is a lease or purchase:
(a) Lease costs shall be costs actually incurred in
conjunction with the lease of an intermediate
facility for use under this Agreement plus an amount
equal to five percent of the lease cost to cover
general. and administrative costs associated with the
lease. In the event any lease subject to with this
provision contains an option to purchase, and m the
event of election of said option, the affected asset
shall become subject to the provisions of Item (b) of
this Paragraph at the time of option election.
(b) The charge for purchase of intermediate facilities
shall be calculated using the straight-line
amortization method over the useful life. This charge
shall terminate after the facility has been fully
amortized. Intermediate facilities purchased pursuant
to this provision shall be treated as having a useful
life not exceeding the remaining term of this
Agreement (i.e.; through the fifth 5year contract
period); provided, if, at the conclusion of the fifth
5-year contract period, a facility shall.have any
residual value, Purchaser shall refund to Owners an
amount equal to twentyfive percent (25%) of the
residual value. The refund shall consist of payment
of twenty-five percent (25%) of the residual value
after deduction of all facility costs subject to
amortization under this Paragraph but which have not
previously been . deducted from the price paid
Company by reason of the Minimum Sale Price
requirement as set forth in Paragraph 5.2.
The value of the land will not be included in
determining residual value under this Paragraph
5.1.b.
In the event of any dispute concerning the residual
value, the parties will attempt to resolve the matter
through assistance of an independent appraiser prior
to any arbitration.
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Restated Agreement No. 3804-983
The basis for amortizaiton shall be actual cost
including interest calculated as described below
(Owner's pro rata share of costs in the event a
facility is used for purposes in addition ot the sale
of Centralia Plant Fly Ash under this Agreement) less
any applicable investment tax credits realized by
Purchaser. To the extent that Purchaser employs
borrowed funds for the acquisition of any facility or
refinances previous rate shall be equal to the actual
interest rate charged to Purchaser to borrow such
funds. However, interest on borrowed funds shall not
exceed a commercially reasonable rate. To the extent
that Purchaser finances the acquisition of any
facility with its own funds, the imputed interest
rate shall be equal to the yield on a U.S. Treasury
Bond maturing in February 2002, as reported in The
Wall Street Journal on the date of asset acquisition.
The imputed interest reate shall be applied to the
declining loan balance of the asset using the
interest method (re: APB Opinion No. 21, 169.108,
Amortization of Discount and Premium) and shall be
adjusted in three-year intervals to reflect
fluctuations inthe above-described Treasury Bond
yield rate.
For the purposes of this Paragraph, the actual cost
of facilities shall include general and
administrative costs equal to five percent of asset
acquisition costs.
(c) The allowable cost of Purchaser-owned land shall be
equal to an annually determined, commercially
reasonable lease rate as agreed to by the parties for
that portion of the land devoted to the sale and
handling of Centralia Fly Ash.
In the event of any dispute concerning such rate,
the parties will attempt to resolve the matter
through assistance of an independent appraiser prior
to any arbitration.
Title to and risk of loss for intermediate facilities shall remain with
Pozzolanic throughout the term of this Agreement. In no event shall
Company's reimbursement of acquisition costs or any subsequent refund
of residual value act to transfer any portion of title, risk of loss or
liability for said facilities to Company.
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Restated Agreement No. 3804-983
This Paragraph 5 shall be effective commencing with original
Agreement Year 6 (i.e.; commencing March 1, 1982).
5.2
5.3 Purchaser shall keep and maintain complete and accurate books
of account showing all removal of Fly Ash from the Centralia
Plant site and the price to be paid for that Fly Ash, which
books of account shall be made available to Company upon
request. Purchaser, within forty-five
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Restated Agreement No. 3804-983
days after the last day of each month, shall provide Company
with a statement reflecting the Fly Ash removed during said
month, sold during said month, the price to be paid for Fly
Ash sold, a reasonable estimate of Fly Ash unsold in storage,
and all sums due under this Agreement. A reconciliation will
also be included, to reflect the total amount of any
construction costs and the dollar offset of Fly Ash received
by Purchaser during that period. When monies are due, a check
made out to Company, will accompany this statement. Purchaser
shall true up to actual cost any amounts reflected in these
statements which were based on reasonable estimates. The true
up may be on a calendar year or contract year at Purchaser's
discretion. Company shall have the right to dispute that
statement and subject that dispute to arbitration pursuant to
Section 13 of this Agreement.
5.4 Reject Fly Ash from the Centralia Plant is subject to all the
terms and conditions of the Agreement, with the exception of
paragraph 5.1 and 5.2 which set forth the formula for payment
by Purchaser to Company for Fly Ash sales and Section 7 in its
entirety, which deals with minimum sales volume.
5.5 Purchaser shall pay Company for all reject Fly Ash removed by
Purchaser from the Centralia Plant site for sale to others an
amount equal to twenty-five percent (25%) of the price
Purchaser obtains from the sale of said Fly Ash to others,
after deducting transporting costs (as defined in Article 5,
Sales Price 5.1).
5.6 Purchaser, by the first of each month, will provide Company
with the following month's estimated daily quantities of Fly
Ash to be removed from the Centralia Plant site.
5.7 In the event that any sales or use tax is applicable to this
Agreement, such tax shall be added to the price and paid by
Purchaser.
5.8 Purchaser agrees that if payment for any Fly Ash purchased is
not rendered to Company within 30 days of receipt of invoice,
this Agreement may be terminated.
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Restated Agreement No. 3804-983
6. CONDUCT OF OPERATIONS
6.1 Purchaser agrees that in exercising its rights under this
Agreement, its contractors, employees, or other agents, will
observe any and all safety and operating rules and orders in
force at the Centralia Plant, maintain good housekeeping in
the working area and comply with all applicable environmental,
safety and other laws and regulations.
6.2 Purchaser shall exercise its rights under this Agreement in a
manner that permits adequate access at all times by Owners to
all structures located on the Centralia Plant site as those
structures may from time to time exist, and to permit free and
unrestricted movement of Owners' materials and equipment
thereon as may be required by them, or any of them, and
Purchaser shall use trucks, equipment and work procedures for
hauling and loading the Fly Ash designed to prevent spillage
and shall confine its hauling activities to such entry and
exit routes and portals as may be directed by Company.
6.3 The rights of Purchaser under this Agreement are subject to
the rights of Owners, their successors and assigns, to
construct, maintain, use, operate, alter, add to, repair,
replace, reconstruct and/or remove in, on, over, along, under,
through and across the Centralia Plant site, electric
generation and related facilities, electric transmission and
distribution lines and telephone lines, together with
supporting structures and appurtenances, for conveying
electric energy for light, heat, power arid telephone purposes
and pipelines and appurtenances for the transportation of oil,
petroleum, gas, coal, water or other substances, and conduits,
building or structures for any and all purposes.
6.4 Purchaser agrees that it will not divulge to third parties,
without the written consent of Company, any information
obtained from or through Company in connection with the
performance of this Agreement at the Centralia Plant.
6.5 Purchaser is an independent contractor and persons employed by
Purchaser in connection herewith shall be employees of
Purchaser and not employees of Company in any respect.
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Restated Agreement No. 3804-983
6.6 Purchaser shall perform the work at the Centralia Plant in
accordance with its own methods in an orderly and workmanlike
manner, enforce strict discipline and order among its
employees, and shall not employ on the work any unfit person
or anyone unskilled in the work assigned to him.
6.7 Purchaser shall not, without receiving the written approval of
Company, conduct any transaction with regard to Centralia Fly
Ash, with any subsidiary or other related entity or party
during the remaining term of the Agreement.
7. MINIMUM SALES VOLUME
7.1
7.2
7.3
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7.4
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7.5
8. DEFAULT-TERMINATION
If Purchaser fails or refuses to comply with and perform any of the
terms and covenants on its part in this Agreement within thirty (30)
days after Company has given Purchaser written notice of such refusal
or failure, the rights granted under this Agreement shall cease at the
option of Company and this Agreement shall terminate.
9. INDEMNIFICATION
Purchaser specifically and expressly agrees to indemnify, defend and
hold harmless Owners and their directors, members of Company's Pacific
Board and Utah Power Board, officers, employees and agents (hereinafter
collectively "indemnitees") from any and all claims, demands, suits,
losses, costs and damages of every kind and description, including
attorneys' fees, brought or made against or incurred by any of the
indemnitees resulting from, arising out of, or in any way
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Restated Agreement No. 3804-983
connected with any act, omission, fault or negligence of Purchaser, its
employees, agents, representatives or subcontractors of any tier, their
employees, agents or representatives in the performance or
nonperformance of Purchaser's obligations under this Agreement or in
any way related to this Agreement, including the sale of Fly Ash by
Purchaser or the use of Fly Ash by Purchaser in it own operations. The
indemnity obligations under this article shall include with limitation
i) loss of or damage to any property of Owners, Purchaser or any third
party; ii) injury, bodily or personal, to or death of any person(s),
including without limitation employees of Owners, Purchaser or
Purchaser's subcontractors of any tier; and iii) claims arising out of
Workers' Compensation, Unemployment Compensation or similar such laws
or obligations applicable to employees of Purchaser or its
subcontractors of any tier. Purchaser's indemnity obligation under this
article shall not extend to any liability caused by the negligence of
any of the indemnitees. Where both Purchaser (including its employees,
agents or representatives) and indemnitees are liable for the same
injury, harm or damage to person or property or same wrongful death,
Purchaser and indemnitees shall share the liability based on the
relative degree of fault of each.
To the extent applicable, Purchaser specifically and expressly waives
any immunity under Industrial Insurance, Title 51 RCW and acknowledges
that this waiver was mutually negotiated by the parties hereto.
10. WORKERS' COMPENSATION
Purchaser shall comply with all applicable Workers' Compensation Acts
in the states having jurisdiction and shall furnish proof thereof
satisfactory to Company upon request.
11. INSURANCE
11.1 Without limiting any liabilities or any other obligations of
Purchaser, Purchaser shall secure and continuously carry with
insurers acceptable to Company the following insurance
coverage:
Employers Liability insurance with a minimum limit of
$500,000.
Commercial General Liability insurance with a minimum single
limit of $1,000,000. The coverage shall include:
* Bodily Injury and Property Damage Liability,
* Contractual Liability,
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Restated Agreement No. 3804-983
to protect against and from all loss by reason of injury to
persons or damage to property, including Purchaser's own
workers and all third persons, and property of Owners and all
third parties based upon and arising out of Purchaser's
operations hereunder, including the operations of its
subcontractors of any tier.
Business Automobile Liability insurance with a minimum single
limit of $1,000,000 for bodily injury and property damage with
respect to Purchaser's vehicles whether owned, hired or
non-owned, assigned to or used in the performance of the work.
11.2 Except for Employers Liability insurance, the policies
required herein shall include i) provisions or endorsements
naming Owners, members of Company's Pacific Power Board and
Utah Power Board, their directors, officers and employees as
additional insureds, and ii) a cross-liability and
severability of interest clause.
11.3 All policies required by this Agreement shall include
provisions that such insurance is primary insurance with
respect to the interests of Owners and that any other
insurance maintained by Owners is excess and not contributory
insurance with the insurance required hereunder, and
provisions that such policies shall not be cancelled or their
limits of liability reduced without i) ten (10) days prior
written notice to Company if cancelled for nonpayment of
premium, or ii) thirty (30) days prior written notice to
Company if cancelled for any reason. A certificate in a form
satisfactory to Company certifying to the issuance of such
insurance, shall be furnished to Company. For all commercial
general liability coverage written on a "claims-made" basis,
the certificate shall also identify the retroactive date(s)
and all laser endorsements, if any. If requested by Company, a
copy of each insurance policy, certified as a true copy by an
authorized representative of the issuing insurance company,
shall be furnished to Company.
11.4 Company shall be notified by Purchaser of any commercial
general liability policies maintained hereunder and written on
a "claims-made" form. Such insurance policies written on a
"claims-made" basis shall be maintained by Purchaser for a
minimum period of five (5) years after the completion of this
Agreement and Company may, at its discretion, require
Purchaser, at Purchaser's sole expense, to institute other
measures to guarantee future coverage for claims as
contemplated by this Agreement.
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Restated Agreement No. 3804-983
11.5 It is understood that the cost of insurance provided by
Purchaser hereunder is borne by Purchaser, and Company in
reliance thereon, will not otherwise secure insurance for the
protection of the indemnitor as may otherwise be required by
statute to render enforceable Purchaser's, indemnity herein.
12. NOTICES
12.1 Any formal notice, demand or request provided for in this
Agreement shall be in writing and shall be deemed properly
served, given or made if delivered in person, or sent by
either registered or certified mail, postage prepaid or
prepaid telegram, to the persons specified below:
PacifiCorp Electric Operations
Centralia Steam Electric Operations
Attention: Lead Contract Administrator
913 Big Hanaford Rd.
Centralia, Washington 98531
Pozzolanic Northwest, Inc.
Attention: President
7525 S.E. 24th Street
Mercer Island, WA 98040
12.2 The names and addresses set forth in Section 12.1 may be
changed by notice given as provided in this Section 12.
13. ARBITRATION
Arbitration under this Agreement shall be governed by the following
procedures: The party demanding arbitration shall give notice in
writing of such demand to the other party. The parties shall meet
within ten (10) days thereafter to select an arbitrator by mutual
agreement. The arbitrator shall be an individual having demonstrated
expertise in the field of the matter or item to be arbitrated. If the
parties cannot agree upon an arbitrator, the Chief Judge of the United
States District Court of the District of Oregon, or such tribunal as
may at the time be the successor of such court, may, upon request of a
party, appoint an arbitrator. If, pending any arbitration under this
Agreement, the arbitrator or successor substitute arbitrator shall die
or for any reason be unable or
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Restated Agreement No. 3804-983
unwilling to act, his successor shall be appointed as he was appointed
and such successor or substitute arbitrator, as to all matters then
pending, shall act the same as if he had been originally appointed as
an arbitrator. The award of the arbitrator so chosen shall be final as
to the parties of this Agreement. The parties shall each bear the
expense of preparing its own case, and the expense of the arbitrator,
including the expense of any technical studies required by the
arbitrator, shall be equally apportioned between the parties.
14. UNCONTROLLABLE FORCES
14.1 A party shall not be considered in default in respect to any
obligation under this Agreement if prevented from fulfilling
that obligation by reason of scheduled or unscheduled plant
shutdowns which result in reduced availability of Fly Ash; nor
by reason of uncontrollable forces, the term "uncontrollable
forces" being deemed for purpose of this Agreement to be any
cause beyond the control of the party affected, including, but
not limited to, flood, earthquake, storm, lightning, fire,
epidemic, war, riot, civil disturbance, labor disturbance,
sabotage, proceeding by court or public authority or act or
failure to act by court or public authority which
uncontrollable forces, by exercise by due diligence and
foresight, such party could not have reasonably expected to
avoid. A party rendered unable to fulfill any obligation by
reason of uncontrollable forces shall exercise due diligence
to remove such inability with all reasonable dispatch.
14.2 In addition, a party shall not be considered in default if the
Fly Ash or any portion thereof becomes unusable because of any
one or more of the following: The addition of detrimental
precipitation aids; enactment of governmental laws regarding
the handling and use of hazardous waste; facility access
problems or other unforeseen actions that could reasonably
deter the use of Fly Ash in concrete.
15. ASSIGNMENT
This Agreement shall be binding upon the parties to it, their
successors and assigns, provided Purchaser may not assign its right
under this Agreement without prior written approval of Company and any
unauthorized assignment shall be void.
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Restated Agreement No. 3804-983
16. LITIGATION/APPLICABLE LAW
16.1 If litigation is brought arising out of this Agreement, the
losing party shall reimburse the prevailing party for court
costs and attorneys' fees as determined by the court,
including costs and fees on appeal.
16.2 This Agreement shall be governed by the laws of the State of
OREGON.
17. COMPLETE AGREEMENT
This Agreement and any referenced attachments constitute the complete
agreement between the parties. It is subject to change only by an
instrument in writing, prepared and signed by Company and accepted by
Purchaser.
18. ADDITIONS
Exhibit A, Schedule of Prices, is an integral part of this Agreement;
Exhibit B, Pozzolanic Marketing Program, attached hereto and
incorporated herein, is for the purpose of demonstrating Purchaser's
marketing plan as the basis for this Agreement and to be used in
construing the parties's obligations hereunder, including any additions
or deletions on Pages 5 and 9 of Exhibit B by Company.
19. NONWAIVER
The failure of Company to insist upon or enforce, in any instance,
strict performance by Purchaser of any of the terms of this Agreement
or to exercise any right herein conferred shall not be construed as a
waiver or relinquishment to any extent of its right to assert or rely
upon such terms or rights on any future occasion.
20. MWBE/EQUAL EMPLOYMENT OPPORTUNITY AGREEMENT AND CERTIFICATE
The attached PacifiCorp Electric Operations form No. 2421, entitled "
Minority and Women Business Enterprise/Equal Opportunity Compliance
Certificate," is hereby made a part of this Agreement. The Purchaser
shall certify compliance by appropriate execution hereof and agrees to
continue such compliance during the life of this Agreement. For
purposes of this Agreement, the term "SUPPLIER/CONTRACTOR" used in such
form shall mean Purchaser and the term "COMPANY" shall mean Company.
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Restated Agreement No. 3804-983
21. LIMITATION OF LIABILITY
In no event shall Company be liable for any consequential damages or
lost profits, whether in tort, contract, strict liability or otherwise,
except that in the event Company is found to be liable for breach of
the Agreement, Purchaser may receive any actual lost profits directly
resulting from the breach for a two-year period after the date of
breach.
22. DAMAGES
No remedies provided herein for Company upon Purchaser's default shall
limit Company to such specified remedies and Company shall be entitled
to all remedies provided by law.
23. AUDIT
Purchaser will permit Company to examine all records relevant to the
computation of amounts due. Company may examine records during normal
business hours. Company shall be allowed to reproduce, at its own
expense, all or any part of said records which it deems necessary to
verify the computation of those amounts. These records shall include
but are not limited to ledgers, and supporting schedules. If it is
determined by Company's audit of Purchaser's records that a discrepancy
exists between amounts paid and amounts owed, the party owing will pay
the party owed the appropriate amount within thirty (30) calendar days
after announcement of Company of its findings. - Purchaser shall have
the right to dispute Company's findings and subject that dispute to
arbitration pursuant to Section 13 of this Agreement. This right to
audit shall exist during the term of the Agreement and survive for five
(5) years after each year of the Agreement.
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