EXHIBIT 10.02
STRATEGIC PARTNERSHIP AGREEMENT
This Agreement is by and between Lighting Management Consultants, Inc.
(hereinafter, "LMC") with its principal place of business at 5626 Star Lane,
Houston, Texas 77057 and DeMarco Energy Systems of America, Inc. (hereinafter,
"DEMARCO")with its principal place of business at PO Box 201057, Austin, Texas
78720-1057.
NATURE OF THE PARTNERSHIP
It is with mutual understanding between LMC and DEMARCO to enter into a
strategic partnership agreement, where DEMARCO has relationships and contracts
with various organizations to perform energy efficient lighting retrofits and
energy management services, and LMC is in the energy efficient lighting business
and agrees to become the primary company rendering for DeMarco services such as:
energy audits, energy-related feasibility studies, lighting system
removal/demolition, lighting system installation/retrofit, and energy management
services for commercial, industrial and institutional applications. The
relationship description, contributions, terms, conditions, and other covenants
are set forth herein.
1) PURPOSE. The purpose of this agreement is to engage LMC to perform as
PROJECT MANAGER the services described in Articles 1, 2, and 3 herein
for the contracts and/or work orders issued to DEMARCO. DEMARCO will
perform their duties and responsibilities as described in Article 4,
10, 11, and 12, plus any other duties and responsibilities required to
assist LMC with performing their obligations. Each party will perform
all individual duties, responsibilities and requirements as set forth
in this agreement.
2) COMMENCEMENT. Effective immediately, DEMARCO will issue all work
relating to lighting systems installation, retrofit and/or demolition
to LMC, and LMC agrees to perform the services required of each work
order or contract for and on behalf of DEMARCO.
3) DURATION. The duration of this agreement is perpetual until such time
either party wishes to terminate the relationship, and does so by
furnishing written notice of their intent to terminate at least 60 days
prior to the effective date. All contracts in-works, services being
performed at that time and work orders under construction by LMC will
be performed through completion, regardless of time requirements to
fulfill the project's work scope. Failure to perform will result in a
reduction in final payment, based upon percentage of completion, less
reasonable expenses.
4) MUTUAL NON-DISCLOSURE. It is understood that DEMARCO and LMC have
individually entered into Mutual Non-Disclosure Agreements with certain
companies, and each agrees to honor and carry-out the terms of the
others agreement(s), unless otherwise agreed to in writing and attached
hereto. A mutual Non-Disclosure agreement has been executed between
DEMARCO and LMC and is attached hereto.
5) NON-COMPETE. DEMARCO and LMC agree to not compete with each other for
the same contracts or work orders for the duration of this agreement.
It is understood that each have individually negotiated and/or earned
contracts prior to this agreement, or have contracts or work orders not
yet issued, but are considered in process to be issued, and that these
work orders or agreements are not in direct competition between DEMARCO
and LMC. It is further agreed each company will establish a system to
notify the other of contracts under negotiation and subsequent date
awarded, and that either company will not individually bid for the
other company's work contracts without receiving prior written
permission to conduct such activities from that company. If for
whatever reason a contract (regardless of status `under negotiation' or
`awarded') is considered to be in competition between either company,
then the default shall go to LMC, unless it is reasonably determined
otherwise by each party, or that DEMARCO had made initial contact or
introduction first and was capable of performing services required to
fulfill its obligations under such contract.
6) COMPENSATION FOR SERVICES. DEMARCO agrees to pay to LMC the entire bid
amount for each contract awarded to DEMARCO for the services agreed to
be performed and completed by LMC. It is understood by each party that
each bid submitted by LMC to DEMARCO shall include and reflect a five
percent profit for DEMARCO, calculated and added to the sum total of
LMC's bid. Upon receipt of final payment for each project, DEMARCO will
retain their five percent profit and distribute the balance to LMC
within ten days of receipt, unless otherwise agreed to in writing prior
to each project's bid submission.
7) PERFORMANCE REQUIREMENTS. LMC agrees to perform the services, duties
and obligations as outlined in the contracts, work orders and Articles
of this Agreement to the best of their abilities, and based upon their
historical performance and capabilities of providing such services,
duties, and obligations.
8) DEFAULT AND REMEDIES. Upon determination that a default or breach has
occurred under any portion of this agreement by either party, the
affected party shall give 30 days to the defaulting party to cure the
default. If the default has not been cured according to the terms of
this agreement or with reasonable satisfaction of the affected party,
this agreement shall become terminated within 30 days. Upon termination
of this Agreement, both parties shall fulfill all outstanding
obligations incurred prior to the date of termination through to the
effective termination date.
9) COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall
constitute 1 (one) Agreement, binding on all parties hereto,
notwithstanding that all the parties have not signed the same
counterpart.
10) ARTICLES OUTLINING THE WORKING RELATIONSHIP. The following Articles
outline the working relationship between LMC and DEMARCO. Hereinafter,
the term Project Manager refers to LMC and their identified
sub-contractor position with DEMARCO and as identified within
agreement(s) relating to energy efficient lighting retrofit and energy
management services.
STRATEGIC PARTNERSHIP AGREEMENT BETWEEN INITIALS
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND TECHLITE APPLIED SCIENCES , INC. PAGE 80 OF 80
ARTICLE 1
PROJECT MANAGER'S RESPONSIBILITIES
1.1 PROJECT MANAGER'S SERVICES
1.1.1 The Project Manager & Services consist of those services
performed by the Project Manager. Project Manager's employees and
Project Manager's consultants as enumerated in Articles 2 and 5 of
this Agreement and any other services included in Article 13.
1.1.3 The Project Manager shall provide sufficient organization,
personnel and management to carry out the requirements of this
agreement on an expeditious and economical manner consistent with
the interest with DEMARCO, and when appropriate recruit, select
and train personnel for placement within the DEMARCO organization.
1.1.4 The services covered by this Agreement are subject to the
limitations contained in sub paragraph 13.
ARTICLE 2
SCOPE OF PROJECT MANAGER'S BASIC SERVICES
2.1 DEFINITION
2.1.1 The Project Manager's Basic Services consist of those
described in Paragraph 2.2 and 2.3 and any other services
identified in Article 13 as part of Basic Services.
2.2 PRE - PROJECT PHASE
2.2.1 The Project Manager shall review the program furnished by
DEMARCO to ascertain the requirements of the Project and shall
arrive at a mutual understanding of such requirements with
DEMARCO.
2.2.2 The Project Manager shall provide a preliminary evaluation of
DEMARCO's program, schedule and Project budget requirements, each
on terms of the other.
2.2.3 Based on previously performed audits and other energy
management services criteria prepared by DEMARCO, the Project
Manager shall prepare preliminary estimates of Project cost for
program requirements using logistical, volume and/or similar
conceptual estimating LMCniques. The Project Manager shall provide
cost evaluations of alternative materials and systems.
2.2.4 The Project Manager shall expeditiously review design
documents during their development and advise on proposed site use
and improvements, selection of materials, building systems and
equipment, and methods of Project delivery. The Project Manager
shall provide recommendations on relative feasibility of Project
methods, availability of materials and labor, time requirements
for procurement, installation and Project, and factors related to
Project cost including, but not limited to costs of alternative
designs or materials, preliminary budgets and possible economics
of geographic locations plus other productive factors.
2.2.5 The Project Manager shall prepare and periodically update a
Project Schedule for DEMARCO's review and DEMARCO's acceptance.
The Project Manager shall obtain DEMARCO's approval for the
portion of the preliminary Project schedule relating to the
performance requirements of PG&E ES energy management services. In
the Project Schedule, the Project Manager shall coordinate and
integrate the Project Manager's services, and DEMARCO's
responsibilities with anticipated Project schedules, highlighting
critical and long-lead-time items.
STRATEGIC PARTNERSHIP AGREEMENT BETWEEN INITIALS
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 81 OF 81
2.2.6 As DEMARCO progresses with the preparation of the Project
Documents, the Project Manager shall prepare and update, at
appropriate intervals agreed to by DEMARCO and Project Manager,
estimates of Project Cost of increasing detail and refinement. The
estimated cost of each Contract shall be indicated with supporting
detail. Such estimates shall be provided for DEMARCO's approval.
The Project Manager shall advise DEMARCO if it appears that the
Project Cost may exceed the latest approved Project budget and
make recommendations for corrective action.
2.2.7 The Project Manager shall consult with DEMARCO regarding the
Project Documents and make recommendations whenever
retrofit/installation details adversely affect specific or overall
project logistics, cost or schedules.
2.2.8 The Project Manager shall provide recommendations and
information to DEMARCO regarding the assignment of
responsibilities for temporary Project facilities and equipment
materials and services for common use of the Contractors. The
Project Manager shall verify that such requirements and
assignments of responsibilities are included in the proposed
Contract Documents.
2.2.9 The Project Manager shall provide recommendations and
information to DEMARCO regarding the allocation of
responsibilities for safety programs among the Contractors.
2.2.10 The Project Manager shall advise on the divisions of the
Project into individual Contracts for various categories of Work,
including the method to be used for selecting Contractors and
awarding Contracts. If multiple Contracts are to be awarded, the
Project Manager shall review the Project Documents and make
recommendations as required to provide that (1) the Work of the
Contractors is coordinated, (2) all requirements for the Project
have been assigned to the appropriate Contractor, (3) the
likelihood of jurisdictional disputes has been minimized, and (4)
proper coordination has been provided for phased Project.
2.2.11 The Project Manager shall prepare a Project completion
schedule providing for the components of the Work, including
phasing of Project, times of commencement and completion required
of each Contractor ordering and delivery of products requiring
long lead time, and the occupancy requirements of DEMARCO. The
Project Manager shall provide the current Project completion
schedule for each set of bidding documents.
2.2.12 The Project Manager shall expedite and coordinate the ordering
and delivery of materials requiring long lead-time through
DEMARCO.
2.2.13 The Project Manager shall provide an analysis of the types and
quantities of labor required for the Project and review the
availability of appropriate categories of labor required for
critical phases. The Project Manager shall make recommendations
for actions designed to minimize adverse effects of labor
shortages.
2.2.15 The Project Manager shall assist DEMARCO in obtaining
information regarding applicable requirements for equal employment
opportunity programs for inclusion in the Contract Documents.
2.2.16 Following DEMARCO's approval of the Project Documents, the
Project Manager shall update and submit the latest estimate of
Project cost and the Project completion schedule for DEMARCO's
review and approval.
2.2.17 The Project Manager shall submit the list of prospective
bidders for DEMARCO's approval.
2.2.18 The Project Manager shall develop bidders' interest in the
Project and establish bidding schedules. The Project Manger, with
DEMARCO's Assistance, shall issue bidding documents to bidders and
conduct pre-bid conferences with prospective bidders. The Project
Manager shall assist DEMARCO with regard to questions from bidders
and with issuance of addenda.
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 82 OF 82
2.2.19 The Project Manager shall receive bids, prepare bid analysis
and make recommendations to DEMARCO for DEMARCO's award of
Contracts or rejection of bids.
2.2.20 The Project Manager shall assist DEMARCO in preparing Project
Contracts and advise DEMARCO on the acceptability of
Subcontractors and material suppliers proposed by Contractors.
2.2.21 The Project Manager shall assist DEMARCO in obtaining building
permits and special permits for permanent improvements, except for
permits required to be obtained directly by the various
Contractors. The Project Manager shall assist DEMARCO in
connection with DEMARCO's responsibility for filing documents
required for the approvals of governmental authorities having
jurisdiction over the Project.
2.3 PROJECT PHASE - ADMINISTRATION OF THE PROJECT CONTRACT
2.3.1 The Project Phase will commence with the award of the initial
Project Contract, Work Order or purchase order and, together with
the Project Manager's obligation to provide Basic Services under
this Agreement, will end 30 Days after final payment to all
Contractors is due.
2.3.2 The Project Manager shall provide administration of the PG&E
ES Master Agreement and subsequent Work Orders throughout the
Project in cooperation with the guidelines established and
performance requirements of PG&E ES and DEMARCO.
2.3.3 The Project Manger shall provide administrative management and
related services to coordinate scheduled activities and
responsibilities of the Contractors with each other and with those
of the Project Manager and DEMARCO to endeavor to manage the
Project in accordance with the approved estimate of Project Cost,
the Project Schedule and the Contract Documents.
2.3.4 The Project Manager shall schedule and conduct meetings to
discuss such matters as procedures, progress and scheduling. The
Project Manager shall prepare and promptly distribute minutes to
DEMARCO, and Contractors when required.
2.3.5 Utilizing the Project Schedules provided by the Contractors,
the Project Manager shall update the Project completion schedule
incorporating the activities of the Contractor's progress
throughout the Project, including activity sequences and duration,
allocations of labor and materials, processing of Drawings,
Product Data and Samples, and delivery of products requiring long
lead time and procurement. The Project completion schedule shall
include DEMARCO's occupancy requirements showing portions of the
Project having occupancy priority. The Project Manager shall
update and reissue the Project completion schedule as required to
show current conditions. If an update indicates that the
previously approved Project completion schedule may not be met,
the Project Manager shall recommend corrective action to DEMARCO.
2.3.6 Consistent with the various holding documents and utilizing
information from the Contractors the Project Manager shall
coordinate the sequence of Project and assignment of space in
areas where the Contractors are performing Work.
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 83 OF 83
2.3.7 The Project Manager shall endeavor to obtain satisfactory
performance from each of the Contractors. The Project Manager
shall recommend courses of action to DEMARCO when requirements of
a Contract are not being fulfilled.
2.3.8 The Project Manager shall monitor the approved estimate of
Project Cost. The Project Manager shall show actual costs for
activities in progress as estimated for uncompleted tasks by way
of comparison with such approved estimate.
2.3.9 The Project Manager shall develop cash flow reports and
forecast for the Project and advise DEMARCO as to variances
between actual and budgeted on estimated costs.
2.3.10 The Project Manager shall maintain accounting records on
authorized Work performed under unit costs, additional Work
performed on the basis of actual costs of Labor and materials, and
other Work requiring accounting records.
2.3.11 The Project Manager shall develop and improve procedures for
the review and processing of applications by Contractors for
progress and final payment.
2.3.11.1 Based on the Project Manager's observations and evaluations of
each Contractor's Application for Payment, the Project Manager
shall review and apply the amounts due the respective Contractors.
2.3.11.2 The Project Manager shall prepare a Project Application for
Payment based on the Contractors' Certificates for Payment.
2.3.11.3 The Project Manager's certification for payment shall continue
a representation to DEMARCO, based on the Project Manger's
determinations at the site as provided in Subparagraph 2.3.12 and
on the data comprising the Contractor's Applications for Payment,
that to the best of the Project Manager's knowledge, information
and belief, the Work has progressed to the point indicated and the
quality of the Work is in accordance with the Contract Documents.
The foregoing representations are subject to an evaluation of the
Work for conformance with the Contract Documents upon Substantial
Completion, to results of subsequent tests and inspections, to
minor deviations from the Contract Documents correctable prior to
completion and to specific qualifications expressed by the Project
Manager. The issuance of a Certificate for Payment shall further
constitute a representation that the Contractor is entitled to
payment in the amount certified.
2.3.11.4 The issuance of a Certificate for Payment shall not be a
representation that the Project Manager has (1) made exhaustive or
continuous on-site inspections to check the quality or quantity of
the Work, (2) reviewed Project means, methods, LMCniques,
sequences for the Contractor's own Work, or procedures, (3)
reviewed copies of requisitions received from Subcontractors and
material suppliers and other data requested by DEMARCO to
substitute the Contractor's right to payment or, (4) ascertained
how or for what purpose the Contractor has used money preciously
paid on account of the Contract Sum.
2.3.12 The Project Manager shall determine in general that the Work
of each Contractor is being performed in accordance with the
requirements of the Contract Documents, endeavoring to guard
DEMARCO against defects and deficiencies in the Work. As
appropriate, the Project Manager shall have authority, upon
written authorization from DEMARCO, to require additional
inspection or testing of the Work in accordance with the
provisions of the Contract Documents, whether or not such Work is
fabricated, installed or completed. The Project Manager in
consultation with DEMARCO may reject Work, which does not conform
to the requirements of the Contract Documents.
STRATEGIC PARTNERSHIP AGREEMENT BETWEEN INITIALS
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 84 OF 84
2.3.13 The Project Manager shall schedule and coordinate the sequence
of Project in accordance with the Contract Documents and the
latest approved Project completion schedule.
2.3.14 With respect to each Contractor's own Work, the Project
Manager shall not have control over or charge of and shall not be
responsible for Project means, methods, LMCniques, sequences or
procedures, or for safety precautions and programs in connections
with the Work of each of the Contractors, since these are solely
the Contractor's responsibility under the Contract for Project.
The Project Manager shall not be responsible for a Contractor's
failure to carry out the Work in accordance with the respective
Contract Documents. The Project Manager shall not have control
over or charge of acts or omissions of the Contractor's,
Subcontractors, or their agents or employees, or any other persons
performing portions of the Work not directly employed by the
Project Manager.
2.3.15 The Project Manager shall transmit to DEMARCO requests for
interpretations of the meaning on intent of the Drawings and
Specifications, and assist in the resolution of questions that may
arise.
2.3.16 The Project Manager shall review requests for changes, assist
in negotiating Contractor's proposals, submit recommendations to
DEMARCO, and, if they are accepted, prepare Change Orders and
Project Change Directives which incorporate DEMARCO's
modifications to the Documents.
2.3.17 The Project Manager shall assist DEMARCO in the review,
evaluation and documentation of Claims.
2.3.18 The Project Manager shall receive certificates of insurance
from the Contractors and forward them to DEMARCO.
2.3.19 In collaboration with DEMARCO, the Project Manager shall
establish and implement procedures for expediting the processing
and approval of Drawings, Product Data, Samples and other
submittals. The Project Manager shall review all Shop Drawings,
Product Data, Samples and other submittals from the Contractors.
The Project Manager shall coordinate submittals with information
obtained in related documents and transmit to DEMARCO those such
have been approved by the Project Manager. The Project Manager's
actions shall be taken with such reasonable promptness as to cause
no delay in the Work or in the activities of DEMARCO of
Contractors.
2.3.20 The Project Manager shall record the progress of the Project.
The Project Manager shall submit written progress reports to
DEMARCO including information on each Contractor and each
Contractor's Work, as well as the entire Project showing
percentage of completion. The Project Manager shall keep a daily
log containing a record of weather, each Contractor's Work on the
site, number of workers, identification of equipment, Work
accomplished, problems encountered, and other similar relevant
data as DEMARCO may require.
2.3.21 The Project Manager shall maintain at the Project site
for DEMARCO one record copy of all Contracts, Drawings,
Specifications, addenda, Change Orders and other modifications, in
good order and marked currently to record changes and selections
made during Project, and in addition, approved Drawings, Product
Data, Samples and similar required submittals. The Project Manager
shall maintain records, in duplicate, of principal building layout
lines, engineering specifications, electrical drawing layouts, as
well as any other relevant data or drawing required to perform the
services required, and as certified by a qualified surveyor or
professional engineer. The Project Manager shall make all such
records available to DEMARCO and upon completion of the Project
shall deliver them to DEMARCO.
2.3.22 The Project Manager shall arrange for the delivery, storage,
protection and security of DEMARCO purchased materials, systems
and equipment that are a part of the Project until such items are
incorporated into the Project.
STRATEGIC PARTNERSHIP AGREEMENT BETWEEN INITIALS
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 85 OF 85
2.3.23 With DEMARCO's maintenance personnel or consent with when
absent, the Project Manager shall review the Contractor's final
Customer Completion Certificate, or observe as available the
testing and start-up of the retrofit systems and equipment.
2.3.24 When the Project Manager considers each Contractor's Work or a
designated portion thereof substantially complete, the Project
Manager shall, jointly with the Contractor, prepare a list of
incomplete of unsatisfactory items and a schedule for their
completion. The Project Manager shall assist DEMARCO in conducting
inspections to determine whether the Work or designated portion
thereof is substantially complete.
2.3.25 The Project Manager shall coordinate the correction and
completion of the Work. Following issuance of a Certificate of
Substantial Completion of the Work or a designated portion
thereof, the Project Manager shall evaluate the completion of the
Work of the Contractors and make recommendations to DEMARCO when
Work is ready for final inspection. The Project Manager shall
assist DEMARCO in conduction of final inspections, or receive
suitable assurances from Quality Control of their final
completion.
2.3.26 The Project Manager shall secure and transmit to DEMARCO
warranties and similar submittals required by the Contract
Documents and deliver all keys, manuals, record drawings and
maintenance stocks to DEMARCO. The Project Manager shall forward
to DEMARCO a final Project Application for Payment upon compliance
with the requirements of the Contract Documents.
2.3.27 Duties, responsibilities and limitations of authority of the
Project Manager as set forth in the Contract Documents shall not
be restricted, modified or extended without written consent of
DEMARCO, Project Manager, and Contractors. Consent shall not be
unreasonably withheld.
ARTICLE 3
ADDITIONAL SERVICES
3.1 GENERAL
3.1.1 The services described in this Article 3 are not
included in Basic Services unless so identified in Article 13, and
they shall be paid for by DEMARCO as provided in this Agreement,
in addition to the compensation for Basic Services. The Optional
Additional Services described under paragraph 3.3 shall only be
provided if authorized or confirmed in writing by DEMARCO. If
services described under Contingent Additional Services in
Paragraph 3.2 are required due to circumstances beyond the Project
Manager's control, the Project Manager shall notify DEMARCO prior
to commencing such services. If DEMARCO deems that such services
described under paragraph 3.2 are not required DEMARCO shall give
prompt written notice to the Project Manager. If DEMARCO indicates
in writing that all or part of such Contingent Additional Services
are not required, the Project Manager shall have no obligation to
provide those services.
3.2 CONTINGENT ADDITIONAL SERVICES
3.2.1 Providing services required because of significant changes in
the Project including, but not limited to, changes in size,
quality, complexity or DEMARCO's schedule.
3.2.2 Providing consultation concerning replacement of Work damaged
by fire or other cause during Project, and furnishing services
required in connection with the replacement of such Work.
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 86 OF 86
3.2.3 Providing services made necessary by the termination or
default of DEMARCO or a Contractor, by major defects or
deficiencies in the Work of a Contractor, or by failure of
performance of either DEMARCO or Contractor under a Contract for
Project.
3.2.4 Providing services in evaluating an extensive number of claims
submitted by a Contractor or others in connection with the Work.
3.2.5 Providing services in evaluating an extensive number of claims
submitted by a Contractor or others in connection with the Work.
3.3 OPTIONAL ADDITIONAL SERVICES
3.3.1 Providing services relative to the recruitment, selection, and
training of personnel, acquisition of future facilities, systems
implementation and integration, and equipment purchases.
3.3.2 Providing services to investigate existing conditions or
facilities or to provide measured drawings thereof.
3.3.3 Providing services to verify the accuracy of drawings or to
provide measured drawings thereof.
3.3.4 Providing services to verify the accuracy of drawings or other
information furnished by DEMARCO.
3.3.5 Providing services required for or in connection with
DEMARCO's selection or procurement of furniture, furnishings and
related equipment included in fee.
3.3.6 Providing services for tenant improvements.
3.3.7 Providing any other services not otherwise included in this
Agreement.
ARTICLE 4
OWNER'S RESPONSIBILITY
4.1 DEMARCO shall provide full information regarding requirements
for the Project including a program which shall set forth
DEMARCO's objective, schedule, constraints and criteria, including
space requirements and relationships, flexibility, expansion
capabilities, special equipment, systems, and site requirements.
4.2 DEMARCO shall establish and update an overall budget for the
Project based on consultation with the Project Manager which shall
include the Project Cost, DEMARCO's other costs and reasonable
contingencies related to all of these costs.
4.3 If requested by the Project Manager, DEMARCO shall furnish
evidence that financial arrangements have been made to fulfill
DEMARCO's other costs and reasonable contingencies related to all
of these costs.
4.4 If requested by the Project Manager, DEMARCO shall furnish
evidence that financial arrangements have been made to fulfill
DEMARCO's obligations under this Agreement.
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 87 OF 87
4.5 DEMARCO shall designate a representative authorized to act on
DEMARCO's behalf with respect to the Project. DEMARCO or such
authorized representative, shall render decisions in a timely
manner pertaining to documents submitted by the Project Manager in
order to avoid unreasonable delay in the orderly and sequential
progress of the Project Manager's service.
4.6 DEMARCO shall furnish structural, mechanical, chemical, air
and water pollution tests, tests for hazardous materials, and
other laboratory and environmental tests, inspections and reports
required by law or the Contract Documents.
4.7 DEMARCO shall furnish all legal, accounting and insurance
counseling services as may be necessary at any time for the
Project, including auditing services DEMARCO may require to verify
the Contractors' Applications for Payment or to ascertain how or
for what purposes the Contractors have used the money paid by or
on behalf of DEMARCO.
4.8 DEMARCO shall furnish the Project Manager with a sufficient
quantity of Project Documents.
4.9 The services, information and reports required by Paragraph
4.6 through 4.8 shall be furnished at DEMARCO's expense, and the
Project Manager shall be entitled to rely upon the accuracy and
completeness thereof.
4.10 Prompt written notice shall be given by DEMARCO or to the
Project Manager if DEMARCO becomes aware of any fault or defect in
the Project or nonconformance with the Contract Documents.
4.11 DEMARCO reserves the right to perform Project and operations
related to the Project with DEMARCO's own forces, and to award
contracts in connection with the Project which are not part of the
Project Manager's responsibilities under this Agreement. The
Project Manager shall notify DEMARCO if any such independent
action will interfere with the Project Manager's ability to
perform the Project Manager's responsibilities under this
Agreement. When performing Project or operations related to the
Project, DEMARCO agrees to be subject to the same obligations and
to have the same rights as the Contractors.
4.12 Information or services under DEMARCO's control shall be
furnished by DEMARCO with reasonable promptness to avoid delay in
the orderly progress of the Project Manager's services and the
progress of the Work.
ARTICLE 5
PROJECT COSTS
5.1 DEFINITION
5.1.1 The Project Costs shall be the total cost or estimated cost
of DEMARCO of all elements of the Project.
5.1.2 The Project Cost shall include the cost a current market rates
of labor and materials furnished by DEMARCO and equipment
designed, specified, selected, or specially provided for by
DEMARCO, plus a reasonable allowance for the Contractors' overhead
and profit. In addition, a reasonable allowance for contingencies
shall be included for market conditions at the time Except as
provided in Subparagraph 5.1.3; Project cost shall also include
the compensation of the Project Manager and Project Manager's
consultants.
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 88 OF 88
5.1.3 Project Cost does include the compensation of DEMARCO and
Owners' consultant, costs of the land, right-of-way, financing or
other costs which are the responsibility s DEMARCO as provided in
Article 4. If any portion of the Project Manager's compensation is
based upon a percentage of Project Cost, then Project Cost, for
the purpose of determining such portion, shall include the
compensation of the Project Manager or Project Manager's
consultants.
5.2 RESPONSIBILITY FOR PROJECT COST
5.2.1 Evaluations of DEMARCO's Project budget, preliminary
estimates of Project Cost and detailed estimates of Project Cost
prepared by the Project Manager represent the Project Manger's
best judgement as a person or entity familiar with the Project
industry. It is recognized, however, that neither the Project
Manager nor DEMARCO has control over the cost of labor, materials
or equipment, over Contractor's methods of determining bid prices,
or over competitive bidding, market or negotiating conditions.
Accordingly, the Project Manager cannot and does not warrant or
represent that bids or negotiated prices will not vary from the
Project budget proposed, established or approved by DEMARCO, or
from any cost estimate or evaluation prepared by the Project
Manger.
5.2.2 No fixed limit of Project Cost shall be established as a
condition of this Agreement by the furnishing, proposal or
establishment of a Project budget unless such fixed limit has been
agreed upon in writing and signed by the parties hereto. If such a
fixed limit has been established, the Project Manager shall be
permitted to include contingencies for design, bidding, and price
escalation, and shall consult with DEMARCO to determine what
materials, equipment, component systems and types of Project are
to be included in the Project Documents, to suggest inclusion of
alternate bids in the Project Documents to adjust the Project Cost
to the fixed limit. Fixed limits, if any, shall be increased in
the amount of any increase in the Contract Sums occurring after
execution of the Contracts for Project.
5.2.3 If the Bidding or Negotiating Phase has not commenced within
90 days after submittal of the Project Documents to DEMARCO, any
Project budget or fixed limit of Project Cost shall be adjusted to
reflect changes in the general level of prices in the Project
industry between the date of submission of the Project Documents
to DEMARCO and the date on which proposals are sought.
5.2.4 If a fixed limit of Project Cost (adjusted as provided in
Subparagraph 5.2.3) is exceeded by the sum of the lowest bonafide
bids or negotiated proposals plus the Project Manager's estimate
or other elements of Project Cost for the Project, DEMARCO shall:
11) give written approval or an increase in such fixed limit;
12) authorize rebidding or renegotiating of the Project
within a reasonable time;
13) if the Project is abandoned, terminate in accordance
with paragraphs 3; or
14) cooperate in revising the Project scope and quality as
required to reduce the Project Cost.
ARTICLE 6
PROJECT SUPPORT ACTIVITIES
6.1 Project Support activities, if provided by the Project
Manager, shall be governed by separate contractual agreements
unless otherwise provided in Article 13.
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6.2 Reimbursable expenses listed in Article 13 for Project support
activities nay be subject to trade discounts, rebates, refunds and
amounts received from sales or surplus materials and equipment
which shall accrue to DEMARCO, and the Project Manager shall make
provisions so that they can be accrued.
ARTICLE 7
OWNERSHIP AND USE OF OWNER'S DRAWINGS,
SPECIFICATIONS AND OTHER DOCUMENTS
7.1 The Drawings, Specifications and other Documents prepared by
DEMARCO are instruments of DEMARCO's service through which the
Work to be executed by the Contractors is described. The Project
may retain one record set. The Project Manager shall not own or
claim a copyright in the Drawings, Specifications and other
Documents prepared by PG&E ES, DEMARCO, OR CUSTOMER; and copies
thereof furnished to the Project Manager, are for the use solely
with the respect to this Project. They are not to be used by the
Project Manager on other Projects or for additions to this Project
outside the scope of the Work without the specific written consent
of DEMARCO. The Project Manager is granted a limited license to
use and reproduce applicable portions of the Drawings.
Specifications and other documents prepared by the Architect
appropriate to and for use in the performance of the Project
Manager's services under this Agreement.
All copies made under this license shall bear the statutory
copyright notice, if any, shown on the Drawings, Specifications
and other Documents prepared by the Architect of such drawing.
Submittal or distribution to meet official regulatory requirements
or for other purposes in connection with this Project is not to be
construed as publication in derogation of the Architect's
copyright or other reserved rights. This Agreement shall be
specifically enforceable in accordance with applicable law in any
court having jurisdiction thereof.
ARTICLE 8
TERMINATION, SUSPENSION OR ABANDONMENT
9.1 This Agreement may be terminated by either party upon not
less than seven days' written notice should the other party fail
substantially to perform in accordance with the terms of this
Agreement through no fault of the party initiating the
termination.
9.2 If the Project is suspended by DEMARCO for more than 30
consecutive days, the Project Manager shall be compensated for
services performed prior to notice of such suspension. When the
Project is resumed, the Project Managers' compensation shall be
equitable adjusted to provide for expenses incurred in the
interruption and resumption of the Project Manager's services.
9.3 This Agreement may be terminated by DEMARCO upon not less than
seven days' written notice to the Project Manager in the event
that the Project is permanently abandoned. If the Project is
abandoned by DEMARCO for more than 90 consecutive days, the
Project Manager may terminate this Agreement by giving written
notice.
9.4 Failure of DEMARCO to make Payments to the Project Manager
in accordance with this Agreement shall be considered substantial
nonperformance and cause for termination.
9.5 If DEMARCO fails to make payment when due the Project Manager
for services and expenses, the Project Manager may, upon seven
days' written notice to DEMARCO, suspend performance of services
under this Agreement. Unless payment in full is received by the
Project Manager within seven days of the date of the notice, the
suspension shall take effect without further notice. In the event
of a suspension of services, the Project Manager shall have no
liability to DEMARCO for delay or damage caused to DEMARCO because
of such suspension of services.
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9.6 In the event of termination not the fault of the Project
Manager, the Project Manager shall be compensated for services
performed prior to termination, together with Reimbursable
Expenses then due and all Termination Expenses as defined in
Paragraph 9.7
9.7 Termination Expenses are those costs directly attributable
to termination for which the Project Manager is not otherwise
compensated.
ARTICLE 9
MISCELLANEOUS PROVISIONS
10.1 Unless otherwise provided this Agreement shall be governed
by the law of the place where the Project is located.
10.2 Terms in this Agreement shall have the same meaning as
those in the edition of AIA Document A201/Cma. General Conditions
of the Contract for Project. Project Manager-Advisor Edition,
current as of the date of this Agreement.
10.3 Causes of action between the parties to this Agreement
pertaining to acts of failures to act shall be deemed to have
accrued and the applicable status of limitations shall commence to
run not later than either the date of Substantial Completion for
acts or failures to act occurring prior to Substantial Completion,
or the date of issuance of the final Project Certificate for
Payment for acts or failures to act occurring after Substantial
Completion.
10.4 Waiver of Subrogation. DEMARCO and Project Manager waive all
rights against each other and against PG&E ES, the Contractors,
consultants, agents and any of them, for damages, but only to the
extent covered by property insurance during Project, except such
rights as they may have to the proceeds of such insurance as set
forth in the edition of AIA Document A201/Cma General Conditions
of the Contract for Project, Project Manager-Advisor Edition,
current as of the date of this Agreement. DEMARCO and Project
Manager each shall require similar waivers from their Contractors,
Architect, consultants, agents, and persons or entities awarded
separate contracts administered under DEMARCO's own forces.
10.5 DEMARCO and Project Manager, respectively, bid themselves,
their partners, successors, assigns and legal representatives to
the other party to this Agreement and to the partners, successors,
assigns and legal representatives of such other party with respect
to all covenants of this Agreement. Neither Owner nor Project
Manager shall assign this Agreement without the written consent of
the other.
10.6 This Agreement represents the entire and integrated agreement
between DEMARCO and Project Manager and supercedes all prior
negotiations, representations or agreements, either written or
oral. This Agreement may be amended only by written instrument
signed by both Owner and Project Manager.
10.7 Nothing contained in this Agreement shall create a contractual
relationship with or a cause of action in favor of a third party
against either DEMARCO or Project Manager.
10.8 Unless otherwise provided in this Agreement, the Project
Manager and the Project Manager's consultants shall have no
responsibility for the discovery, presence, handling, removal or
disposal of or exposure of persons to hazardous materials in any
form at the Project site, including but not limited to asbestos,
asbestos products, polychlorinated bipheryl (PCB) of other toxic
substances.
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AND SLI LIGHTING SOLUTIONS, INC. PAGE 91 OF 91
ARTICLE 10
INSURANCE
11.1 PROJECT MANAGER'S LIABILITY INSURANCE
11.1.1 The Project Manager shall purchase from and maintain in a
company or companies lawfully authorized to do business in the
jurisdiction In which the Project is located such insurance as
will protect the Project Manager from claims set forth below which
may arise out of or result from the Project Manager's operations
under this Agreement and for which the Project Manager may be
legally liable.
1. Claims under workers compensation, disability benefit
and other similar employee benefit acts which are
applicable to the operation to be performed;
2. Claims for damages because of bodily injury, occupational
sickness or disease, or death of the Project Manager's
employees;
3. Claims for damages because of bodily injury, sickness, or
disease, or death of any person other than the Project
Manager's employees;
4. Claims for damages insured by usual personal injury
liability coverage which are sustained (1) by a person as
a result of an offense directly or indirectly related to
employment of such person by the Project Manager, or (2)
by another person;
5. Claims for damages, other than to the Work itself,
because of injury to or destruction of tangible property,
including loss of use resulting therefrom;
6. Claims for damages because of bodily injury, death of
a person or property damage arising out of ownership,
maintenance or use of a motor vehicle.
11.1.2 The insurance required by subparagraph 11.1.1 shall be written
for not less than limits of liability specified in Article 13 or
required by law, whichever coverage is greater. Coverages, whether
written on an occurrence or claims-made basis, shall be maintained
without interruption from date of commencement of operations under
this Agreement until date of final Payment and termination of any
coverage required to be maintained after final payment.
ARTICLE 11
PAYMENTS TO THE PROJECT MANAGER
11.1 DIRECT PERSONNEL EXPENSE
11.1.1 Direct Personnel Expense is defined as the direct salaries of
the Project Manager's personnel engaged on the Project and the
portion of the cost of their mandatory and customary contributions
and benefits related thereto, such as employment taxes and other
statutory employee benefits, insurance, sick leave, holidays,
vacations, pensions and similar contributions and benefits.
11.1.2 Salaries and fringes of persons designated as Project Managers
for Projects listed in Attachment "B" as well as salaries; fringes
of office personnel are included in the fee as shown in Article
13. The Project Manager's home office overhead is also included in
the fee arrangement with the exception of those items identified
in Article 11.2 Reimbursable expenses and as outlines in
Attachment "C".
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AND SLI LIGHTING SOLUTIONS, INC. PAGE 92 OF 92
11.1.3 The Project Manager is required to utilize DEMARCO personnel
in each area of the Project, and when these positions are either
unable to satisfactorily perform or are entirely absent from the
organization, the Project Manager may utilize their own staff and
bill DEMARCO for the Direct Personnel Expense, coupled with a
letter of recommendation to hire. This recommendation should
include opinions regarding types of personnel, quantity,
education, and experience backgrounds, plus any and all other
qualification identifications used to assist in the recruiting,
selection processing, training, and management of such personnel.
11.2 REIMBURSEMENT EXPENSES
11.2.1 Reimbursement Expenses are in addition to compensation for
Basic and Additional Services and include expenses incurred by the
Project Manager and Project Manager's employees and consultants in
the interest of the Project, as identified in the following
Clauses.
11.2.1 Expense of transportation in connection with the Project;
expenses in connection with authorized out-of-town travel;
long-distance communications; and fees paid for securing approval
of authorities having jurisdiction over the Project.
11.2.1.2 Expense of transportation in connection with the Project;
expenses in connection with authorized out-of-town travel;
long-distance communications; and fees paid for securing approval
of authorities having jurisdiction over the Project.
11.2.1.2 Expense of reproductions, postage, express deliveries,
electronic facsimile transmissions and handling of Drawings,
Specifications and other documents.
11.2.1.3 If authorized in advance by DEMARCO, expense of overtime work
requiring higher than regular rates.
11.2.1.4 Insurance- No additional charges for Insurance.
11.3 PAYMENTS ON ACCOUNT OF BASIC SERVICES
11.3.1 The payment schedule, as set forth in Paragraph 12.1, is
the minimum payment under this Agreement.
11.3.2 Subsequent payments for Basic Services shall be made monthly
within and, where applicable, shall be in proportion to services
performed within each phase of service, on the basis set forth in
Subparagraph 12.2.1.
11.3.3 If and to the extent that the time initially established in
Subparagraph 12.5.1 of this Agreement is exceeded or extended
through no fault of the Project Manager, compensation for any
services rendered during the additional period of time shall be
computed in the manner set forth in Subparagraph 12.3.1.
11.3.4 When compensation is based on a percentage of Project Cost and
any portions of the Project are deleted or otherwise not
constructed, compensation for those portions of the Project shall
be payable to the extent of services are performed on those
portions, in accordance with Subparagraph 12.2.1 based on (1) the
lowest bona fide bids or negotiated proposals, or (2) if no such
bids or proposals are received, the latest approved estimate of
such portions of the Project.
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11.4 PAYMENTS ON ACCOUNT OF ADDITIONAL SERVICES AND REIMBURSEABLE EXPENSES
11.4.1 Payments on account of the Project Manager's Additional
Services and for Reimbursable Expenses shall be made monthly upon
presentation of the Project Manager's statement of services
rendered or expenses incurred.
11.5 PAYMENTS WITHHELD
11.5.1 No deduction shall be made from the Project Manager's
compensation on account of penalty, liquidated damages or other
sums withheld from payments to Contractors, or on account of the
cost of changes in Work other than those for which the Project
Manager has been found to be liable.
11.6 PROJECT MANAGER'S ACCOUNTING RECORDS
11.6.1 Records of reimbursable Expenses and expenses pertaining to
Additional Services and Services performed on the basis of a
multiple of Direct Personnel Expense shall be available to DEMARCO
or DEMARCO's authorized representatives at mutually convenient
times.
ARTICLE 12
BASIS OF COMPENSATION
DEMARCO shall compensate the Project Manager as follows:
12.1 BASIC COMPENSATION
12.2.1 For Basic Services, as described in Article 2, and any other
services included in Article 13 as part of Basic Services. Basic
Compensation shall be computed as follows:
1. The Project Manager shall be paid a fee equal to for
timely completion of their responsibilities and scope of
work as outlined by DEMARCO and PG&E ES.
12.3 COMPENSATION FOR ADDITIONAL SERVICES
12.3.1 FOR ADDITIONAL SERVICES OF THE Project MANAGER, as described
in Article 3, and any other services included in Article 13 as
Additional Services, compensation shall be computed according to
ATTACHMENT "D" of this Agreement.
12.4 REIMBURSABLE EXPENSES
See Attachment "C".
12.4.1 FOR REIMBURSABLE EXPENSES, as described in Paragraph 10.2 and
any other items included in Article 13 as Reimbursable Expenses, a
multiple of One(1) times the expenses incurred by the Project
Manager and the Project Manager's employees and consultants in the
interest of the Project.
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12.5 ADDITIONAL PROVISIONS
12.5.1 IF THE BASIC SERVICES covered by this Agreement have not been
completed within Twelve (12) months or the date hereof, through no
fault of the Project Manager, extension of the Project Manager's
services beyond that time shall be compensated as provided in
Subparagraphs 10.3.3 and 10.3.1.
12.5.2 Payments are due and payable Thirty (30) days from the date of
the Project Manager's invoice. Amounts unpaid Thirty (30) days
after the invoice date shall bear interest at the rate entered
below, or in the absence thereof at the legal rate prevailing from
time to time at the principal place of business of the Project
Manger.
Interest rate is Prime plus Two(2) points.
(Usury laws and requirements under the Federal Truth in
Lending Act, similar state and local consumer credit laws and
other regulations at DEMARCO's and Project Manager's principal
places of business, the location of the Project and elsewhere may
affect the validity of this provision. Specific legal advice
should be obtained with respect to deletions or modifications, and
also regarding requirements such as written disclosures or
waivers)
12.5.3 The rates and multiples set forth for Additional Services
shall be annually adjusted in accordance with normal salary review
practices of the Project Manager.
ARTICLE 13
OTHER CONDITIONS OR SERVICES
SEE Attachment "C"
13.1 LIMITS ON INSURANCE
The Insurance required by Article 9 shall be written for not
less than the following limits required by law:
Project Manager shall furnish and maintain a liability policy
having DEMARCO a Co-Insured with minimum coverage of One Million
Dollars ($1,000,000.00).
This Agreement is dated the 20th day of December, 1999. The laws of
the State of Texas shall govern this Strategic Partnership Agreement and venue
is the County of Travis. The parties executing this Agreement warrant and
guarantee that they have full individual and/or corporate authority to enter
into such an Agreement. All parties have read, understood, and agreed to the
terms and conditions of this Strategic Partnership Agreement.
BY: LMCLite Applied Sciences, Inc. BY: DeMarco Energy Systems of America, Inc.
By: /S/ Tim Carnes By:/S/ Victor M. DeMarco
---------------------------------- ----------------------------
Tim Carnes, President Victor M. DeMarco, President
December 20, 1999 December 29, 1999
---------------------------------- ----------------------------
Date Date
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ATTACHMENT "A"
PROJECT DESCRIPTION
The timely assessment and completion of the Projects of DEMARCO as submitted
specifically as energy efficient lighting retrofit service work orders issued by
Pacific Gas and Electric Energy Services (hereinafter, "PG&E ES") and as they
relate to the management of the sub-contractors and relationships with those
individuals, agents, contractors, and/or companies involved with lighting
retrofit services for and on behalf of DEMARCO projects. Where this project is
not limited to a geographic region, but wherever it is feasible to perform
lighting retrofit and energy management services as determined by DEMARCO and
LMC. Each Work Order submitted by PG&E ES to DEMARCO shall be considered an
attachment to this agreement as periodically outlined in Attachment "B", and
shall become subject to the terms of this agreement. The scope of work for each
location shall be determined by a separate agreement entitled as TURNKEY ENERGY
EFFICIENT LIGHTING RETROFIT AGREEMENT agreed to by and between the customer and
DEMARCO or as otherwise determined by a PG&E ES energy services agreement, and
shall be included as a subsection to Attachment "B" of this agreement.
Additional terms of this project and relationship are submitted as ATTACHMENT
"C."
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ATTACHMENT "B"
PROJECT LISTING
FACILITY # PROJECT LOCATION BUDGET
TOTAL PROJECTS BUDGET: $____________
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DEMARCO ENERGY SYSTEMS OF AMERICA, INC.
AND SLI LIGHTING SOLUTIONS, INC. PAGE 97 OF 97
ATTACHMENT "C"
REIMBURSABLE EXPENSES
(Not Included in Fee Compensation)
Cost of all travel and transportation related expenses - (Both home office and
project locations)
Project related long distance communications cost.
All fees and permits, should they be required.
Cost of reproductions and express mail delivery.
Cost of Project site office requirements.
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AND SLI LIGHTING SOLUTIONS, INC. PAGE 98 OF 98
ATTACHMENT "D"
ADDITIONAL PROJECTS
At DEMARCO's discretion should additional Projects not included in Attachment
"A" be assigned to the Project Manager and those additional Projects run
concurrent to those in Attachment "B" a fee to be agreed upon at such date for
the costs associated with recruiting, selection processing, and training will be
added as a portion of overhead to LMC, and added after the standard bid has
been. All other terms and conditions of this Contract shall be applicable
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ATTACHMENT "E"
BASIS OF COMPENSATION
The basis for compensation is as follows:
A) Conducting energy audits, energy feasibility studies, scope of
work assessment, project bidding, lighting system removal or
demolition, lighting system installation or retrofit, and energy
management services for commercial, industrial, and institutional
applications.
B) Identifying, contracting and managing the services of field
contractors/personnel to perform lighting retrofit services.
C) Researching the procedures, LMCnology/products, and uniqueness in
assemblage currently specified by Pacific Gas & Electric Energy
Services (hereinafter, "PG&E-ES") as an acceptable energy
efficient lighting retrofit, and then replicating such procedures,
LMCnology/products, and uniqueness in assemblage as a DEMARCO
commercial facility retrofit standard.
D) Engineering and implementing a system to manage the logistics of
personnel and inventory requirements to conduct lighting retrofit
services.
E) Maintaining a `Best In Class' reputation as maintained by
PG&E-ES and as determined by overall market standards.
F) Organizing the timely delivery standards specified by PG&E-ES and
as outlined within their client sales contracts and work orders.
G) Maintaining a standard of excellence in customer interaction and
satisfaction established as tradition by PG&E-ES and jointly
determined as the benchmark for an acceptable customer retrofit
and client contract fulfillment.
H) Represent LMC services as being performed by DEMARCO and conducted
with the highest standards in customer satisfaction and service.
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