[CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN
REDACTED AND SEPARATELY FILED WITH THE COMMISSION]
Kingman
Kansas
November 11, 2003
Mr. ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ President and COO
Composite Technology Corporation
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Testing of CTC's Newly Developed ACCC Conductor and Agreement for
CTC sub-contract services to the City of Kingman for Transmission
Line Construction
Dear ▇▇. ▇▇▇▇▇▇▇▇▇:
The City of Kingman has evaluated the Composite Technology Corporation's ("CTC")
request to test its newly developed ACCC conductor (the "ACCC Conductor") and to
sub-contract for engineering services, pole and hardware supply and
installation, and cable installation on the proposed new City of Kingman
transmission line. All services and products to be contracted by CTC are subject
to final approval, in each case, by authorized representatives of the City of
Kingman before commencement of each phase of work. The targeted project time
table is set forth as Appendix A to this Agreement.
This agreement shall engender three (3) separate components, each of which may
be considered a sub-agreement to the entire agreement. The sub-agreement
components include:
I. Agreement to utilize ACCC transmission cable for pilot testing.
II. Agreement to Purchase engineering and construction services.
III. Agreement to Purchase CTC poles, cross-arms, hardware and Installation.
IV. Agreement to Purchase cable installation services.
Part I. Agreement to Utilize ACCC transmission cable for pilot testing:
The city of Kingman agrees to make the planned transmission facility from
Cunningham, KS to Kingman, KS (the "Facilities"), approximately twenty-one (21)
circuit miles of transmission line, available to CTC for ACCC cable testing
purposes under the terms and conditions established below. For the purposes of
this Letter Agreement (the "Agreement"), the City of Kingman and CTC may also be
referred individually as "Party" or collectively as "Parties."
*** CONFIDENTIAL TREATMENT REQUESTED
The Parties hereby agree to the terms and conditions as stated below:
1. Term; Termination. This Agreement shall become effective upon execution by
both Parties and shall remain in effect for one year from the date of
energization. It is intended that during the one year from the date of
energization the project will be considered a demonstration project, and
the City of Kingman will collect data to determine satisfactory
performance. If the CTC Conductors fail to perform properly during the
term of this Agreement, as determined by the City of Kingman in its
reasonable discretion, the City of Kingman may terminate this Agreement
and require CTC to pay for the (a) removal of the CTC Conductors and (b)
purchase and installation of standard type conductor and hardware equal to
conventional ACSR 477 kcmil, known as Hawk.
2. Compensation for Services Provided by the Parties. ***. Should the City of
Kingman request additional ACCC cable not provided for under this
Agreement, such arrangement will be set forth in a future attachment to
this Agreement and compensation for such additional cable will be
negotiated.
3. Infringement. CTC hereby warrants that, to its knowledge, the CTC
Conductor does not violate or infringe upon, and its performance under
this Agreement will not be in violation of or infringement of, the rights
of any third party, including but not limited to properly, contractual,
employment, trademark, trade secrets, copyright, patent, proprietary
information and non-disclosure rights.
4. CTC, at its ole expense, shall, so long as the transmission system is
operated within agreed industry standards/parameters, and excluding acts
of God, nature, fire, sabotage or other outside influences, and under any
circumstances not to exceed a period of one year from the date of
energization:
a) Provide all ACCC Conductors to be tested, including replacement ACCC
Conductors, and all specialized suspension/tension hardware required for
installation of the ACCC Conductors and other hardware on the Facilities.
b) Provide available design and performance data on the ACCC conductors
and specialized suspension/tension hardware being tested;
c) Provide the City of Kingman, in it's warehouse, necessary equipment and
hardware for repairs or replacements;
d) Incur all cost of repairing, removing or replacing ACCC Conductors in
case of verified product failure;
e) Replace any failed test ACCC Conductor with standard type conductor and
hardware equal to original (via an insurance policy, bond or other method
of assurance paid for by CTC and acceptable to the City of Kingman and
CTC);
*** CONFIDENTIAL TREATMENT REQUESTED
f) Provide equipment, as required, to monitor tension, sag, and/or current
to meet CTC's testing requirements;
g) Provide the City of Kingman thirty (30) days prior written notice when
conducting a site visit to testing sites;
i) Provide the City of Kingman thirty (30) days prior written notice when
conducting a site visit to testing sites. All access must be pre-approved
by the City of Kingman. All necessary paperwork or forms must be filled
out if visitor(s) are from outside of the USA;
j) CTC shall not use the City of Kingman's name as either a sponsor or
advocate in the advertisement and promotion of its commercial ventures,
without prior approval from the City of Kingman. CTC and the City of
Kingman agree to work together to issue mutually agreeable public notices
to selected publications, announcing the planned test, progress, and
later, results as appropriate.
5. FACILITIES; WORK ON FACILITIES. The City of Kingman has selected
Facilities to be used for testing of the ACCC Conductor, and CTC has
agreed to the selection. The Facilities shall be a proposed new
transmission line to be built and in operation by end of Fall of 2004,
subject to final schedule determinations, and extending approximately 21
miles from the city of ▇▇▇▇▇▇▇▇▇▇, KS to the city of Kingman, KS.
Specifications for the electrical transmission material characteristics
and requirements have been supplied to CTC by the City of Kingman and
accepted by CTC.
CTC acknowledges and agrees that, while it must pay for all costs
associated with work to be performed on, or in connection with replacing,
removing, or monitoring the ACCC Conductor (the "Work"), all such Work
will be performed by the City of Kingman or contractors approved by the
City of Kingman.
6. THE CITY OF KINGMAN, AT ITS SOLE EXPENSE, SHALL:
a) Incur the labor costs whether directly or through contract services
associated with the initial installation of the ACCC Conductor on the
Facilities;
b) Ensure that all environmental and other permits are obtained, as
necessary to install the ACCC Conductor;
c) Review product and design data;
d) Collect data from CTC's monitoring equipment and provide the data only
to CTC, unless prior approval is given for its release to other parties by
CTC. CTC shall be responsible for supplying the necessary data logging
monitoring equipment, and the data collection shall be for a period of one
year following the date of energization; provided, however, if CTC
requests data beyond this one year period, the City of Kingman shall
reasonably consider such request; and
*** CONFIDENTIAL TREATMENT REQUESTED
e) Provide all necessary forms and documents to be filled out by
visitor(s) to the test sites.
7. THE PARTIES AGREE TO:
a) Share quarterly data collected in that quarter with the other Party;
and
b) Provide, upon completion of the test period of no less than twelve
months, to the other Party a report of findings collected from this test
within ninety (90) days of the completion of all testing.
PART II. AGREEMENT TO PURCHASE ENGINEERING AND CONSTRUCTION SERVICES: The City
of Kingman authorizes CTC either directly or through the use of approved CTC
sub-contractors to provide engineering and construction services for this
project, subject to review and approval of final cost estimates by the City of
Kingman.
1. COMPENSATION FOR SERVICES: CTC shall provide complete engineering and
construction services to the City of Kingman to design, engineer, and supervise
construction of a twenty-one mile transmission line from Cunningham, KS to
Kingman, KS, to previously CTC supplied specifications and via a route
previously determined by the City of Kingman ***. Invoices for services shall be
presented by CTC at intervals necessary to accomplish the work, and shall be
paid by the City of Kingman upon Commission approval twice per month.
2. SCHEDULE: CTC shall arrange for an initial engineering site visit and
evaluation to occur during the first two weeks of December, 2003, subject to
approval and availability of City of Kingman representatives. The subsequent
final cost estimate for Engineering and construction services shall be presented
to the City of Kingman within two weeks following the site evaluation.
3. LIMITATIONS: The City of Kingman authorizes the paid initial site visit and
evaluation by the CTC engineering team from which final project cost estimates
and project schedules will be determined. Upon review of the final cost estimate
and schedules from CTC, the City of Kingman at its sole discretion may accept
and approve the expenditure, or may submit the engineering and construction
services package for open bid to qualified regional contractors, and reserves
the right to award the balance of the contract for engineering and construction
of the transmission line to the lowest qualified bidder; provided, however, that
if CTC is not satisfied with the selection of the final engineering and
construction service requirements or contractor, the parties shall be bound to
renegotiate this Agreement so as not to subject CTC to any liability or
additional expense as a result of the selection of the final engineering and
construction requirements or contractor.
*** CONFIDENTIAL TREATMENT REQUESTED
4. GENERAL PROVISIONS: All general provisions of the entire agreement equally to
this sub-agreement.
PART III. AGREEMENT TO PURCHASE CTC POLES, CROSS-ARMS, HARDWARE AND
INSTALLATIONS: The City of Kingman agrees to purchase all CTC composite poles,
cross arms, installation hardware, and installation services determined by
specifications of final engineering to accommodate construction of a twenty-one
mile transmission corridor. From the date of the initial supply of products
including ACCC cable the City of Kingman shall be authorized to purchase any
additional ACCC products as a direct factory purchaser (for its own use only)
regardless of any distribution network established by CTC.
1. PURCHASE PRICE: Subject to final engineering and construction estimates, CTC
agrees to provide all poles, cross arms, hardware, and installation services for
a combined cost ***. Invoices for services shall be presented by CTC at
intervals necessary to accomplish the work, and shall be paid by the City of
Kingman upon Commission approval twice per month.
2. GUARANTEES AND WARRANTEES: CTC guarantees that all products utilized for this
project shall meet or exceed standard industry specifications provided by CTC.
***, and agrees to replace such poles at CTC's cost with: (i) CTC replacement
poles if the defect can be so corrected: or, thereafter, (ii) either wooden
poles or composite poles selected by the City of Kingman, such replacement to
include dismantling and re-installation of subject poles.
3. EXCEPTIONS: If for any reason, CTC Composite Poles shall not be available to
meet schedule requirements to be determined for this agreement, the City of
Kingman may (a.) elect to extend the schedule to accommodate delivery of CTC
Composite Poles, or (b.) elect to utilize Class I wooden poles in place of CTC
Composite poles and adjust the equipment and installation costs accordingly.
4. GENERAL PROVISIONS: All general provisions of the entire agreement apply
equally to this sub-agreement.
PART IV. AGREEMENT TO PURCHASE CABLE INSTALLATION SERVICES:
The City of Kingman authorizes CTC either directly or through the use of
approved CTC sub-contractors to provide ACCC cable Installation services for
this project, subject to review and approval of final engineering and cost
estimates (provide, however, if such review and approval is not provided by the
City of Kingman, CTC shall have the right to terminate this Agreement).
1. COMPENSATION FOR SERVICES: Subject to final engineering, CTC shall provide
services to the City of Kingman to supervise, manage and install twenty-one
circuit miles of ACCC transmission cable meeting the City of Kingman's
specification, from Cunningham, KS to Kingman, KS, via a route previously
determined by the City of Kingman and approved by project engineers, ***.
Invoices for services shall be presented by CTC at intervals necessary to
accomplish the work, and shall be paid by the City of Kingman upon Commission
approval twice per month.
*** CONFIDENTIAL TREATMENT REQUESTED
2. CONTINGENCY ALLOCATION: Subject to final engineering considerations, the City
of Kingman authorizes allocation of a general contingency budget *** Said funds
are reserved for construction or installation contingencies yet to be determined
by final engineering. Such contingencies may include but are not limited to:
tree trimming or removal, unanticipated water crossing or terrain impediments,
unanticipated route changes or easement restrictions, unanticipated soil bed
alterations required to accommodate pole installation, unanticipated use of
non-budged personnel, equipment or supplies.
3. LIMITATIONS: In each instance where contingency funds are required, CTC shall
submit a written request to the City of Kingman, describing the prevailing
circumstances and the estimated cost to accomplish the proposed objective. The
City of Kingman shall in each instance in a timely manner, review and approve
requests for utilization of such funds, or provide alternative solutions
acceptable to CTC for accomplishing the immediate objective and maintaining the
integrity of the project work schedule.
4. SCHEDULE: Subject to final engineering reports, sub-station construction
schedules, and easement acquisition schedules, CTC, and the City of Kingman
shall establish a final project work, payment and completion schedule mutually
agreeable to all parties.
5. GENERAL PROVISIONS: All general provisions of the entire agreement apply
equally to this sub-agreement.
GENERAL PROVISIONS:
OWNERSHIP. Ownership of all Facilities, equipment, and materials shall remain
with the City of Kingman at all times, From the date of installation and
surviving termination of this Agreement, the City of Kingman shall own the ACCC
Conductor and all hardware and equipment associated therewith. The City of
Kingman, solely for purposes of operation of the facilities as intended, and
CTC, for all testing and intellectual property purposes, shall jointly own any
information and data of every kind and description collected and/or generated
pursuant or in connection with this Agreement.
LIABILITY. CTC will indemnify, hold harmless and defend the City of Kingman and
its affiliates, officers, directors, shareholders, agents, employees, and
representatives from all claims, liabilities, fines, interest, costs, expenses
and damages (including reasonable attorneys' fees) incurred by the City of
Kingman, for any damage, injury, death, loss or destruction of any kind to
persons or property, to the extent the damage, injury, death, loss of
destruction arises out of or is related to the negligence, error, omission,
willful misconduct, misrepresentation, breach of warranty or other breach of
this Agreement on the part of CTC or any of its servants, representatives,
agents, employees or contractors; provided, however, this Liability provision
shall only be effective if CTC is permitted to control the defense and
settlement of any such claim with attorneys of its choice; and further provided
that the maximum cumulative liability of each party to this Liability provision
shall not exceed one million dollars.
*** CONFIDENTIAL TREATMENT REQUESTED
The City of Kingman agrees to name CTC as an additional insured on the city's
liability policy and to enter into a hold harmless agreement, agreed to by the
city's liability carrier of a scope similar to the scope of the CTC
indemnification and holds harmless provision set forth hereinabove.
AUTHORITY TO EXECUTE. Each person executing this Agreement on behalf of a Party
is duly authorized to enter into this Agreement on behalf of and to bind the
Party represented.
If the provisions of this Agreement meet with your approval, please sign both
original copies and return one signed original to:
The City of Kingman
P.O. Box 168
Kingman, KS 67068
This signed Agreement shall be returned to the above address within fifteen (15)
days of the date written above. If this Agreement is not signed within fifteen
(15) days, the City of Kingman may rescind the proposal offered under this
Agreement.
Questions related to the technical work to be performed should be directed to
▇▇▇ ▇▇▇▇; tel. (▇▇▇) ▇▇▇-▇▇▇▇, questions on contract issues should be directed
to ▇▇▇▇▇▇ ▇▇▇▇▇▇; tel. (▇▇▇) ▇▇▇-▇▇▇▇.
*** CONFIDENTIAL TREATMENT REQUESTED
Sincerely,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Mayor
Enclosures
IN DUPLICATE
Accepted and agreed to this 11th day of December, 2003
COMPOSITE TECHNOLOGY CORPORATION
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
*** CONFIDENTIAL TREATMENT REQUESTED
APPENDIX A
Kingman Municipal Power & Light
Electric Tie line Project
Targeted Project Timetable
*** Meeting with Partners for Project Review
*** Proceed with Bon Financing
Seek Alternative Funding State of Kansas
And Department of Energy
*** Design: Tie Line
- Substations
*** Land Acquisition
*** Bid Requests Released
*** Award of Bid
*** Construction of Project
*** CONFIDENTIAL TREATMENT REQUESTED
