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Praxair Oxygen Supply Agreement D~ ~<k~ MEMORANDUM C) July 27,2004 "', TO: FROM: The Honorable Mayor and City Council Members Michael C. Van Milligen, City Manager SUBJECT: Praxair Oxygen Supply Agreement Water Pollution Control Plant staff has investigated ways to reduce major expenditures and has looked at the Praxair technology of vacuum pressure swing adsorbtion (VPSA) to produce the oxygen used by the Water Pollution Control Plant. This system replaces the City's current practice of leasing the tank system. Using this system, the City is expected to save $35,000 per year, based on current oxygen use and electrical costs. Water Pollution Control Plant Manger Paul Horsfall recommends City Council authorization for the City of Dubuque Water Pollution Control Plant to provide a site for oxygen generation purposes to Praxair, Inc. for not less than ten (10) years, and to set a public hearing for August 16, 2004 to dispose of the City's interest in the property. This will furnish a site to Praxair, Inc. of approximately 50 feet by 55 feet for the oxygen plant and the liquid oxygen supply system and will insure that Praxair has the right to locate, maintain and have access to their equipment. I concur with the recommendation and respectfully request Mayor and City Council approval. 1 I' j I ¿"II ) , . . L " !' j U (cl//)lL¿ ~ Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Paul J. Horsfall, Water Pollution Control Plant Manager CITY OF DUBUQUE, IOWA MEMORANDUM July 26, 2004 TO: Michael C. Van ~~e1Þ9ity Manager FROM: Paul J. Hors~a~~p Manager SUBJECT: Praxair Oxygen Supply Agreement INTRODUCTION: The purpose of this memorandum is to recommend that the City Council set a date for a public hearing authorizing the City of Dubuque, Iowa to dispose of an interest in real property at the Water Pollution Control Plant for the installation of an oxygen generating and liquid oxygen storage facility to Praxair Inc., Danbury, CT. BACKGROUND: Prior to 1999 Water Pollution Control Plant staff was challenged to look at ways to reduce major expenditures. Plant staff looked at people, polymer, power and oxygen for reductions. During 1996-1997 plant staff was reduced and the cryogenic oxygen plant was taken out of service. The oxygen was purchased on the open market leading to substantial savings in oxygen and electrical costs. During 1999 plant staff again looked at reducing the oxygen supply cost by investigating a new technology based on the standard pressure swing adsorbtion system (PSA). This new technology was patented by Praxair Inc. and is 10-30% more efficient than other manufacturers oxygen generation equipment. At the time, the system had to be installed in a building at City expense. The building cost exceeded the savings over a 15 year period and plant staff did not proceed with the new technology. During June and July of 2003 the City of Dubuque was struggling with a budgetary shortfall. The Water Pollution Control Plant was challenged to again look at ways to reduce major expenditures. Staff again looked at the Praxair technology of vacuum pressure swing adsorbtion (VPSA). DISCUSSION: The Praxair VPSA system is now designed to be placed outdoors and a building is no longer required. Plant staff and Praxair evaluated the potential savings using the VPSA system. A potential savings of $35,000 per year was predicted based on current oxygen use and June 2003 electrical costs. Since this evaluation the cost of delivered oxygen has increased 7% and a regulatory charge for delivery increased 2%%. The following information compares the annual operating costs of the existing lease system and the VPSA system, based on current wastewater loads and the anticipated 22% increase in electrical costs for a 15 year and a 10 year contract. Operating Costs, 2004 Secondary Treatment Oxygen Costs 15 Years Yearlv OxVQen Cost Electrical Costs Total Leased Tank System VPSA System $ 304,000 $ 186,900 $ 0.00 $ 63,400 Savings $ 304,000 $ 253,300 $ 53,700 Operating Costs, 2004 Secondary Treatment Oxygen Costs 10 Years Yearlv OXVQen Cost Electrical Costs Total Leased Tank System VPSA System $ 304,000 $ 203,100 $ 0.00 $ 63,400 Savings $ 304,000 $ 266,500 $ 37,500 There is a certain risk we will be taking by signing a contract with Praxair for either a 10 year or a 15 year contract. The risk is that we are committed to the rental of the equipment for the term of the contract. The economics are with the 15 year contract but the risk is lowered with the 10 year contract. The recommendation to lease the VPSA system was made to Council and accepted at their July 8, 2003 budget meeting. During the past year we worked out technical issues with Praxair Inc. However, we had problems with the City's insurance requirements and Praxair's standard insurance package. Barry Lindahl was able to work thru the insurance issues with Praxair so that it was acceptable to the City and Frank O'Connor. Other issues with Contingency Article 12.3 and Confidentiality Article 14 have been addressed and explained. The agreement calls for the City of Dubuque to furnish a site to Praxair, Inc. approximately 50 feet by 55 feet for the oxygen plant and the liquid oxygen supply system. The land is adjacent to the existing oxygen plant building. The purpose is to insure that Praxair has the right to locate, maintain and have access to their equipment. RECOMMENDATION: Based on the above information, Water Pollution Control Plant staff recommends that the City Council approve the attached resolution authorizing the City of Dubuque Water Pollution Control Plant to provide a site for oxygen generation purposes to Praxair, Inc. for not less than ten (10) years and to set a public hearing to dispose of the City's interest of the property on the 16th day of August, 2004. Attachments RESOLUTION NO. -04 INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY AT THE WATER POLLUTION CONTROL PLANT BY AGREEMENT WITH PRAXAIR, INC., A DELWARE CORPORATION WHEREAS, the City of Dubuque, Iowa (City) owns certain real property known as the Water Pollution Control Plant (the Plant), 795 Julien Dubuque Drive, Dubuque, Iowa; and WHEREAS, City requires substantial quantities of oxygen for use at the plant; WHEREAS, City and Praxair, Inc. (Praxair), a Delaware corporation, have negotiated an Oxygen Supply Agreement pursuant to which Praxair will provide City with oxygen for use at the Plant; and WHEREAS, the Oxygen Supply Agreement provides that City will provide a site to Praxair for its oxygen plant for a period of not less than ten (10) years; and WHEREAS, the City Council believes it is in the best interests of the City of Dubuque to approve the Oxygen Supply Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Council of the City of Dubuque, Iowa, intends to dispose of the City's interest in the foregoing-described real property pursuant to the Oxygen Supply Agreement between City and Praxair, a copy of which is now on file at the Office of the City Clerk, City Hall, 13th and Central Ave., Dubuque, Iowa. Section 2. The City Clerk is hereby authorized and directed to cause a Notice to be published as prescribed by Iowa Code Section 364.7 of a public hearing on the City's intent to dispose of the foregoing-described real property, to be held on the 16th day of August, 2004, at 6:30 o'clock p.m. at the public library auditorium, 11th & Locust, Dubuque, Iowa Passed, approved and adopted this - day of August, 2004. ATTEST: Terrance M. Duggan, Mayor Jeanne F. Schneider, City Clerk OXYGEN SUPPLY AGREEMENT Between CITY OF DUBUQUE AND PRAXAIR, INC. For City of Dubuque Water Pollution Control Plant 795 Julien Dubuque Drive' Dubuque, Iowa May 7, 2004 - Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement CONFIDENTIALITY NOTICE Please note that this Agreement contains Praxair's trade secrets and confidential information, the disclosure of which could cause Praxair irreparable harm. In consideration for Praxair furnishing this Agreement at Praxair's expense, City of Dubuque agrees that to the extent permitted by law, it shall hold the Agreement in strict confidence and not disclose, or permit disclosure of this Agreement except as set forth in this Notice. It is provided to City of Dubuque on the understanding that to the extent permitted by law, City of Dubuque will use its best efforts to ensure that access to the Agreement, or information related to or arising from the Agreement, is solely limited on a confidential basis to those of your employees who are advised of this Notice and have responsibility for evaluation of the proposed transaction. Praxair. Inc. - Business Confidential City of Dubuque';' Oxygen Supply Agreement TABLE OF CONTENTS ARTICLE 1 - DEFINITIONS ARTICLE 2 - QUANTITY ARTICLE 3 - SPECIFICATIONS ARTICLE 4 - MEASUREMENT AND DELIVERY ARTICLE 5 -INSTALLATION AND FIRST DELIVERY ARTICLE 6 - DURATION OF AGREEMENT ARTICLE 7 - PRICES ARTICLE 8 - ADJUSTMENT OF PLANT PRODUCED OXYGEN PRICES ARTICLE 9 - ADJUSTMENT OF SUPPLEMENTAL OXYGEN PRICE ARTICLE 10 - TAXES ARTICLE 11 - SHUTDOWN ARTICLE 12 - CONTINGENCIES ARTICLE 13 - LIABILITY ARTICLE 14 - CONFIDENTIALITY ARTICLE 15 - OXYGEN PLANT SITE(S) ARTICLE 16 - ENVIRONMENTAL CONDITIONS ARTICLE 17 - UTILITIES ARTICLE 18 - FAIR LABOR STANDARDS ACT ARTICLE 19 - APPLICABLE LAW ARTICLE 20 - DISPUTE RESOLUTION ARTICLE 21 - NOTICES ARTICLE 22 - ASSIGNMENT ARTICLE 23 - PROMOTIONAL USE ARTICLE 24 - HEADINGS ARTICLE 25 - WAIVER ARTICLE 26 - PRIOR AGREEMENTS ARTICLE 27 - ENTIRE AGREEMENT EXHIBIT A - SITE LOCATION DRAWING EXHIBIT B - SPECIFICATION FOR ELECTRICAL POWER EXHIBIT C - RELEASE OF INTEREST EXHIBIT D -INVOICING DURING INTERIM SUPPLY PERIOD EXHIBIT E - ADJUSTMENT OF PLANT PRODUCED OXYGEN PRICES EXHIBIT F - SHUTDOWN EXHIBIT G -INSURANCE SCHEDULE Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement 1 3 4 5 6 7 7 9 10 10 11 12 13 15 16 18 19 21 21 21 21 22 23 23 23 23 24 OXYGEN SUPPLY AGREEMENT This OXYGEN SUPPLY AGREEMENT (the "Agreement") made and entered into as of -, 2004 by and between PRAXAIR, INC., a Delaware Corporation, with an office at 39 Old Ridgebury Road, Danbury, CT 06817-0001 (hereinafter referred to as "Seller") and City of Dubuque, a municipality organized and existing under the laws of the State of Iowa (hereinafter referred to as "Buyer"), with an office located at 795 Julien Dubuque Drive in Dubuque, Iowa. WITNESSETH: WHEREAS, Buyer requires substantial quantities of oxygen for use at its water pollution control plant in Dubuque, Iowa and has requested Seller to supply such quantities of oxygen from a plant to be constructed, owned and operated by Seller; and WHEREAS, Seller is willing to make substantial investment, construct, own and operate a plant on a site(s) to be mutually selected and furnished by Buyer, from which Seller will supply oxygen to Buyer; NOW THEREFORE, in consideration of the foregoing and the mutual promises herein, Buyer and Seller agree as follows: ARTICLE 1 - DEFINITIONS 1.1 "Base Plant Oxygen" means Plant Produced Oxygen up to the rate specified in Article 2.2. 1.2 "Buyer's Oxygen Requirements" means Buyer's total present and future requirements, in gaseous and liquid form, of oxygen other than that supplied in cylinders for use at Buyer's Plant. Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 1 1.3 "Buyer's Plant" means Buyer's plant at the location referred to above, andlor any additions thereto and/or any location to which any operations conducted by Buyer during the term of this Agreement may be subsequently moved. 1.4 "Cubic Foot" used as a measure of oxygen means that quantity of oxygen which in gaseous form would occupy a volume of one cubic foot at 70 degrees Fahrenheit temperature and 14.696 pounds per square inch absolute pressure. Such quantity is herein referred to as "Standard Cubic Foot" or "SCF". 1.5 "First Delivery of Oxygen" means the date of first delivery of liquid oxygen to the Oxygen Distributing System. 1.6 "First Delivery of Plant Produced Oxygen" means the date of first delivery of oxygen from the Oxygen Plant to the Oxygen Distributing System. 1.7 "Incremental Plant Oxygen" means Plant Produced Oxygen up to the rate specified in Article 2.2. 1.8 "Interim Supply Period" means the period from the effective date of this Agreement until the initial delivery of Plant Produced Oxygen. 1.9 "Liquid Oxygen Supply System" means the Seller supplied liquid oxygen storage vessels and vaporizers. The vaporization equipment will be capable of vaporizing up to 7,500 SCFH on a continuous basis. 1.10 "Oxygen Delivery Point( s)" means the flange( s) where the Oxygen Distributing System will be connected to Seller's Oxygen Plant, as indicated on Exhibit A, in accord with Article 15. Buyer accepts title and risk of loss of Plant Produced Oxygen at the Oxygen Delivery Point(s). 1.11 "Oxygen Distributing System" means the system of trunk and service pipelines to be constructed, now or as required, owned and maintained by Buyer at Buyer's expense and used to transport oxygen from the Oxygen Delivery Points to the various use points at Buyer's Plant. 1.12 "Oxygen Plant" means the facilities referred to above to be constructed, owned and operated by Seller which contain facilities for the production, compression, Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 2 storage and vaporization of oxygen for the purposes of supplying Buyer hereunder. The Oxygen Plant includes the Liquid Oxygen Supply System as defined in Article 1.12. 1.13 "Oxygen Plant Site(s)" means the plot(s) of land at Buyer's plant, mutually selected by Buyer and Seller as provided in Article 15.1 and on Exhibit A for the Oxygen Plant and the Oxygen Plant's Liquid Oxygen Supply System. The Oxygen Plant Site( s) location( s) and boundaries are described in Article 15.1. 1.14 "Plant Produced Oxygen" means oxygen produced by the Oxygen Plant and introduced to the Oxygen Distributing System as gaseous oxygen up to the Total Plant Produced Oxygen SCFH rate specified in Article 2.2. Plant Produced Oxygen includes Base Plant Oxygen and Incremental Plant Oxygen. 1.15 "SCFH" shall mean an instantaneous rate of flow which would be equivalent to one (1) SCF if continued for a one (1) hour period. 1.16 "Supplemental Oxygen" means all oxygen delivered hereunder other than Plant Produced Oxygen and as specified in Article 2.2. 1.17 "Shutdown" means a period of time during which operation of the Oxygen Plant is suspended or reduced pursuant to Article 11 hereof. ARTICLE 2 - QUANTITY 2.1 Seller will sell and deliver into the Oxygen Distributing System and Buyer will purchase and receive from Seller, on the terms and conditions hereinafter set forth Buyer's oxygen requirements set forth in this Article 2. 2.2 Seller agrees to sell and deliver and Buyer agrees to purchase and receive oxygen up to the instantaneous rates set forth below: [J Total Plant Produced Oxygen1 (Full capacity): Base Plant Oxygen (0-7,500 SCFH) Incremental Plant Oxygen (7,501-10,600 SCFH) 10,600 SCFH 7,500 SCFH 3,100 SCFH Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 3 D Supplemental Oxygen: Maximum Continuous Flow 7,500 SCFH 1 Onsite production volumes are 100% contained oxygen values and system capacity is rated at a maximum ambient temperature of 60 degrees F, 50% relative humidity and pressure of 14.35 psia. 2.3 If Buyer requires oxygen at instantaneous rates in excess of the Oxygen Plant's onsite production capacity of 10,600 SCFH as set forth in Article 2.2, Seller will deliver to Buyer, and Buyer will purchase and receive such oxygen, to the extent that in Seller's sole discretion such oxygen is deemed to be available for Buyer and delivery may be made within the flow and pressure limitations of the equipment installed. Such oxygen supplied to Buyer above the instantaneous production rates shall be considered Supplemental Oxygen. Measurement and delivery of Supplemental Oxygen will be in accord with Article 4.3. 2.4 Buyer and Seller agree to meet from time to time to review the maximum instantaneous demand rates and specifications for purposes of determining Buyer's future requirements of oxygen which are also the subject of this Agreement and each party agrees to negotiate in good faith for the additional charges and fees pertaining to any additional or upgraded production facilities, equipment, controls, storage vessels and/or plant relocations as such are required. ARTICLE 3 - SPECIFICATIONS 3.1 Plant Produced Oxygen delivered hereunder will be at least eighty-nine percent (89.0%) pure on a dry basis and will be delivered into the Oxygen Distributing System at a pressure of 20 pounds per square inch (20 psig). If Plant Produced Oxygen purity decreases below eighty-nine percent (89%) the Oxygen Plant will isolate, causing oxygen to be delivered from the Liquid Oxygen Supply System. Oxygen from the Liquid Oxygen Supply System will be at least 99.5 percent (99.5%) Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 4 request of Buyer, with reasonable advance notice, Seller will test the metering equipment in the presence of Buyer's representatives, and if the metering equipment is found on such test to be accurate, Buyer will pay Seller the cost and expense of such test, but if found on such test to be inaccurate, then the cost and expense of such test and of correcting the inaccuracy in the metering equipment will be borne by Seller. If on any test the metering equipment is found to be inaccurate, a correcting invoice will be rendered to cover the actual amount of oxygen delivered to Buyer through the metering equipment for the thirty (30) day period prior to the date on which such test was made, or the period from the date such metering equipment was last tested and considered accurate, whichever period is shorter. If on any test of the metering equipment, its inaccuracy is not over two percent (2%), either high or low, the meter will be considered accurate. 4.3 Buyer will give Seller reasonable advance notice of the quantities of Supplemental Oxygen needed for its use. Subject to Article 2.3, Seller will deliver such quantities within a reasonable time after receipt of an order from Buyer or at Seller's sole discretion, Seller will anticipate Buyer's need for oxygen and make delivery. Seller will measure the quantities of Supplemental Oxygen using Seller's metering system. 4.4 If, at Buyer's request, Seller delivers at anyone time less than a full truckload (550,000 SCF) of liquid oxygen into the Liquid Oxygen Supply System, Buyer will pay Seller any special expenses incurred. If Buyer at any time restricts access to the Liquid Oxygen Supply System, Buyer will pay Seller any special expenses incurred. Said special expenses could be in the form of a charge or surcharge. ARTICLE 5 -INSTALLATION AND FIRST DELIVERY 5.1 Seller and Buyer will endeavor to make and receive the First Delivery of Plant Produced Oxygen within ten (10) months after Buyer executes the Agreement. During the Interim Supply Period, Seller will supply oxygen via the Liquid Oxygen Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 6 Supply System. Seller and Buyer will endeavor to make and receive the First Delivery of Oxygen within ninety (90) days after the Buyer executes the Agreement. 5.2 Should Buyer fail to complete preparation of the site(s), supply utilities or obtain permits by the date set forth in the schedules contained in Articles 15 and 17 through no fault of Seller, First Delivery of Oxygen shall be deemed to take place on the date specified in Article 5.1 or actual delivery whichever occurs first. 5.3 Should Buyer be delayed in performance due to failure of Seller to meet its obligations contained in Article 15 and 17 for any reason, with or without cause, through no fault of Buyer, First Delivery of Plant Produced Oxygen will be deemed to be the date of actual delivery and Seller will supply oxygen during this Interim Supply Period up to the continuous maximum rate of 7,500 CFH specified in Article 2.2 at Plant Produced Oxygen Price( s) as shown in Article 7.1. ARTICLE 6 - DURATION OF AGREEMENT 6.1 Except as provided in Article 12.3, this Agreement will be in effect from the date first written above and continue for a period of fifteen (15) years from the date of First Delivery of Plant Produced Oxygen and will continue in effect thereafter until terminated by either party for any reason, with or without cause, upon giving not less than twelve (12) months prior written notice of termination to the other party. ARTICLE 7 - PRICES 7.1 During the Interim Supply Period, Seller will invoice Buyer and Buyer will pay Seller (1) a unit price for oxygen of $0.2511 per 100 SCF (equivalent to Base Monthly Fee for 7,500 SCFH of oxygen over 730 hour month), as adjusted under Article 8, (2) Buyer's avoided cost of electrical power (or $0.0608 per 100 SCF based on unit power of 1.35 Kwh per 100 SCF and electrical power cost of $45 per megawatt) and (3) any applicable taxes as set forth in Article 10. The Interim Supply Period is limited to twelve (12) months beginning the date of the First Delivery of Oxygen as set forth in Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 7 Article 5.1. Thereafter, and until First Delivery of Plant Produced Oxygen, Seller will invoice and Buyer will pay Seller for oxygen at Supplemental Oxygen Price, as adjusted under Article 9 plus any applicable taxes as set forth in Article 10. Oxygen supplied during the Interim Supply Period will be billed upon delivery to the Liquid Oxygen Supply System. An example of this calculation is attached as Exhibit D. 7.2 Upon First Delivery of Plant Produced Oxygen and thereafter, as promptly as possible at the beginning of each month, Seller will invoice Buyer and Buyer will pay Seller (1) Base Monthly Fee for Base Plant Oxygen up to 7,500 SCFH of oxygen in accord with the Price set forth below, as adjusted under Article 8, (2) Incremental Plant Oxygen (if any) from 7,501 to 10,600 SCFH of oxygen in accord with the Price set forth below, as adjusted under Article 8, (3) Supplemental Oxygen Price for oxygen over 10,600 SCFH in accord with the Price set forth below, as adjusted under Article 9 and (3) any applicable taxes as set forth in Article 10. PRICES 0 PLANT PRODUCED OXYGEN: Base Monthly Fee Base Plant Produced Oxygen (up to 7,500 CFH) Incremental Plant Produced Oxygen (7,501-10,600 SCFH) 0 SUPPLEMENTAL OXYGEN: $13,750/Month Not Applicable $0.200/100 SCF $0.325/100 SCF 7.3 After the First Delivery of Oxygen, even if Buyer has no requirements or partial requirements for oxygen during any month, Buyer will pay the Base Monthly Fee and for any Supplemental Oxygen supplied during the month, as adjusted under Articles 8 and 9 respectively, plus the amount of taxes as set forth in Article 10. 7.4 Oxygen supplied during Shutdown will be billed as Supplemental Oxygen in accord with Article 11 hereof. 7.5 Terms of payment will be net cash ten (10) days following the date of invoice. In the event of a failure by Buyer to pay any invoice within said time period, Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 8 is revised and published on some basis other than 1982 = 10O, the values will be adjusted to the 1982 = 100 base in accordance with such conversion schedule or factor as may be supplied by the Department of Labor. The intent of the parties with respect to this Article 8.1 is illustrated by Exhibit E hereto. Notwithstanding the above, the minimum annual escalation of the Monthly Fee and the price of Incremental Plant Oxygen will be 2 percent per year. ARTICLE 9 - ADJUSTMENT OF SUPPLEMENTAL OXYGEN PRICE 9.1 Seller will have the right to revise the prices for Supplemental Oxygen as set forth in Article 7.1 by giving Buyer not less than fifteen (15) days prior written notice of the effective date of such revision, provided, however, that if said price(s) are increased and Buyer, within fifteen (15) days after said notice, furnishes Seller with credible written evidence that Buyer can purchase Supplemental Oxygen from a responsible supplier in like quantities under similar terms and conditions at lower prices, and if, within fifteen (15) days thereafter Seller does not agree to either meet said lower prices or rescind the notice of revised price(s), Buyer will have the right within ten (10) days thereafter to terminate this Agreement as it pertains to Supplemental Oxygen for which such lower price(s) was (were) offered by giving Seller not less than thirty (30) days prior written notice. If Buyer exercises such right of termination, the cost of removal of the Liquid Oxygen Supply System will be borne by Buyer. This Article 9.1 will not apply to any price changes or other charges hereunder which arise from surcharges or a change to the Liquid Oxygen Supply System. ARTICLE 10 - TAXES 10.1 Seller shall bear and pay all federal, state, and local taxes based upon or measured by its net income, and all general franchise taxes imposed on corporations on account of their existence or their right to transact business. Praxair,~nc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 10 10.2 Buyer will pay the amount of any sales, use, or other excise tax imposed upon Seller's Oxygen Plant or upon the purchase of equipment, construction and installation by reason of production, storage, sales, transportation, or delivery of oxygen hereunder. If initially paid by Seller, such tax, including any interest and penalties, shall be invoiced to Buyer as a separate item and paid by Buyer to Seller. 10.3 Buyer will pay any property taxes levied on the Oxygen Plant Site(s). Buyer will reimburse Seller for any property taxes with respect to the Oxygen Plant. 10.4 The prices set forth in Article 7.1 do not include any taxes, charges, or fees other than those per Article 10.1. If at any time while this Agreement is in effect any tax, charge, or fee other than as set forth in Article 10.1, is newly imposed on Seller by any governmental authority which increases Seller's costs incurred in the production, sale or delivery of oxygen to Buyer hereunder, or if, due to a rate change or other action of the governmental authority there is an increase in any such tax presently existing, then Buyer will reimburse Seller therefore to the extent that Seller can reasonably demonstrate that its cost for production, sale, or delivery hereunder are directly increased thereby. 10.5 In the event any taxes, charges or fees are reimbursable to Seller from Buyer as a result of the provisions of this Article 10 and these taxes, charges or fees are not deductible for federal, state or local income tax purpose, Buyer will reimburse Seller for any additional federal, state and local tax incurred or federal, state and local income tax benefit lost as a result of the non-deductibility of the above mentioned taxes, charges or fees. The reimbursement for the federal, state and local income tax benefit lost shall be invoiced to Buyer as a separate item and paid by Buyer to Seller. ARTICLE 11 - SHUTDOWN 11.1 Seller will have the right from time to time to shut down the production facilities of the Oxygen Plant for such period of time as may be necessary for Seller to make ordinary repairs and for maintenance consistent with proper operation. During Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 11 12.2 If, for any period, a contingency covered by Article 12.1 reduces or fully interrupts Seller's oxygen supply capability at the Oxygen Plant, Buyer's and Seller's commitments under Article 2 and the prices set forth in Article 7.1 will be inapplicable to the extent of the reduction or interruption in oxygen supply. Seller will use reasonable efforts to deliver in accord with Buyer's demand any oxygen which Seller has reasonably available for Buyer from the Liquid Oxygen Supply System and other locations, and Seller will give prompt notice to Buyer of the reduction or interruption. Buyer will accept and pay for any oxygen so delivered before said notice. Upon receiving said notice, Buyer will advise Seller to discontinue said deliveries or request that they be continued. Seller will continue said deliveries, if so requested, for as long as Seller, in its sole discretion, deems that its own needs and contract commitments to others will permit. Buyer will pay for any oxygen delivered from other locations pursuant to this Article 12.2 at the price for Supplemental Oxygen plus any additional costs related to special purchase, freight or special handling. 12.3 During any period that delivery of oxygen is interrupted or reduced due to a contingency under this Article 12, the duration of this Agreement will be extended for a period equal to two (2) times the duration of the contingency. ARTICLE 13 - LIABILITY 13.1 Buyer acknowledges that there are hazards associated with the storage and handling of Oxygen. Buyer agrees that its personnel concerned with oxygen are aware of the hazards and assumes all responsibility for the warning and protecting of its employees, independent contractors and others of all hazards to persons and property in any way connected with Buyer. Buyer will receive documents from Seller, including Seller's Material Safety Data Sheet(s) containing Seller's safety and health information pertaining to oxygen supplied hereunder and Buyer will incorporate such information into Buyer's safety program. Buyer shall be responsible for complying with all relevant reporting obligations under the Emergency Planning and Community Right- Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 13 to-Know Act of 1986, 42 U.S.C. Sections 11001-11049 (EPCRA, also known as Title 1\1 of the Superfund Amendments and Reauthorization of 1986 (SARA Title III) resulting from the presence at Buyer's Plant of oxygen supplied under this Agreement. Buyer also assumes all responsibility for the suitability and the results of using oxygen alone or in combination with other articles or substances and in any manufacturing, medical, or other process or procedure. Seller shall not be liable under this Agreement for any incidental, consequential, indirect or special damages. 13.2 Each party hereby agrees to defend, indemnify and hold the other party harmless from any actions, lawsuits, demands, claims, losses, expenses, costs, including but not limited to legal fees, and damages, except to the extent arising from the negligence of the party to be indemnified, in connection with the performance or nonperformance of the party's responsibilities under this Agreement to the extent of the party's insurance coverage as set forth in Exhibit G for Seller and the certificate of the Iowa Communities Assurance Pool for Seller. 13.3 If Seller is requested by Buyer to deliver Supplemental Oxygen and Seller is able to make deliveries during any strike or labor disturbance at Buyer's Plant, Buyer shall indemnify and hold Seller harmless from and against all costs, liability or expenses including but not limited to injury or deaths of persons and damage or loss of property arising from delivery of oxygen which would not be incurred by Seller during normal delivery. 13.4 The obligations of the indemnifying party are conditioned on the following: (a) the party ("Indemnitee") seeking indemnification shall promptly inform the other ("Indemnitor") in writing of any claim within the scope of of this Article 13, (b) Indemnitor is given exclusive control of the defense of such claim and all negotiations relating to the settlement thereof, and (c) Indemnitee assists Indemnitor in all necessary respects in the conduct of the suit. Praxair, ~nc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 14 13.5 Seller shall maintain during the term of this Agreement insurance as set forth in the City's standard Insurance Schedule for TENANTS AND LESSEES OF CITY PROPERTY OR VENDORS (SUPPLIERS, SERVICE PROVIDERS) TO THE CITY OF DUBUQUE, as such Insurance Schedule may from time to time be amended. A copy of the current Insurance Schedule is attached to this Agreement. 13.6 Buyer agrees to maintain during the term of this Agreement insurance as set forth in the attached certificate from the Iowa Communities Assurance Pool or equivalent commercial general liability insurance. ARTICLE 14 - CONFIDENTIALITY 14.1 This Agreement and all drawings, diagrams, specifications, prices, operating data and costs and other materials furnished by Seller including this Agreement and identified as confidential, relating to the use andlor delivery hereunder and the information therein are proprietary to Seller. Such materials have been developed at great expense and contain trade secrets which are recognized and protected as such by law and which constitute confidential and proprietary information of the Seller and would, if released, give advantage to competitors. Buyer may not reproduce or distribute such materials except to the extent required by law, including as necessary to obtain necessary permits and to Buyer's employees who may use the oxygen as specified in Article 2. In the case of any of the aforementioned disclosures, Buyer agrees to inform its employees and governmental agencies that such information is the confidential information of Seller and is to be treated accordingly. All such materials relating to the oxygen supplied directly by Seller (except information as may be established to be in the public domain) shall be received in confidence and Buyer shall exercise the same degree of care to hold such information in confidence as it uses with respect to its own trade secrets and/or confidential and proprietary material. Should Buyer receive a request to disclose Seller's confidential information pursuant to Chapter 22 of the Code of Iowa 2003 as may be amended, Buyer will provide notice to Praxair, ~nc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 15 Seller of same so that Seller may, as it deems appropriate, take reasonable steps to secure an injunction, protective order or other relief in connection with such request. Unless otherwise agreed in writing by the parties, Buyer agrees that it shall keep all such material confidential for a period which shall expire five (5) years after the termination date of this Agreement. ARTICLE 15 - OXYGEN PLANT SITE(S) 15.1 Buyer will furnish a mutually acceptable Oxygen Plant Site(s) to Seller approximately 50 feet by 55 feet for the Oxygen Plant and the Liquid Oxygen Supply System, cleared, graded, and free from any toxic or hazardous materials and underground or overhead obstructions, and having a load-bearing capacity of twenty- five hundred (2,500) pounds per square foot three (3) feet below grade, with provisions for drainage of surface and rain water, without any charge to Seller. Buyer, at its expense, will prepare and furnish to Seller a drawing no later than two weeks after Buyer executes this Agreement showing the location of such site. Said drawing upon Seller's approval will be deemed to be Exhibit A to this Agreement. 15.2 Buyer, at its expense, will obtain all necessary federal, state or local permits, licenses and authorizations for construction and operation of the Oxygen Plant. If subsequent to the execution of this Agreement, any new, local, state or federal law, rule, or regulation requires additional permits, licenses, authorizations or rights, Buyer will obtain and cost shall be borne by Buyer. If modifications to the Oxygen Plant, Oxygen Plant Site(s), or Oxygen Plant operations are required due to the above, the cost for modifications will be borne by Buyer. 15.3 Buyer, at its expense, will construct, install or cause to be constructed, installed and maintain foundations and foundation pilings (if necessary), security fencing and isolation barriers, hub drains, grounding grid, lighting and gravel as reasonably required by Seller's drawings and design specifications. Seller will provide drawings and specifications within four (4) weeks after Buyer provides a geotechnical Praxair,.Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 16 soil report from the agreed upon Oxygen Plant Site. Buyer will use reasonable effort to complete its preparation of the Oxygen Plant Site(s) and make it then available to Seller four weeks prior to First Delivery of Oxygen. 15.4 Buyer, at its expense, will construct, install or cause to be constructed or installed, operate and maintain the Oxygen Distributing $ystem. Buyer is responsible for installing and maintaining appropriate pressure relief devices on the Oxygen Distributing System. The Oxygen Distributing System will remain the property of Buyer at all times. Buyer will make the connections between the Oxygen Distributing System and the Oxygen Plant. 15.5 Buyer, at its expense, will provide a clear roadway acceptable to Seller and suitable for access to the Oxygen Plant Site(s) by a tractor trailer sixty (60) feet long and weighing eighty thousand (80,000) pounds, and a right to use Buyer's railroad siding, if necessary and available. 15.6 Seller, at its expense, will construct, operate, own and maintain the Oxygen Plant on the Oxygen Plant Site(s) and install Seller's metering equipment. The Oxygen Plant and metering equipment will remain the property of Seller at all times, and Seller will remove it within six (6) months after the termination or expiration of this Agreement. 15.7 Buyer will install an alarm enunciation panel for the oxygen at least two weeks prior to First Delivery of Plant Produced Oxygen. Such panel shall receive electrical power from a source separate from the Oxygen Plant. The alarm panel shall be monitored by Buyer twenty-four (24) hours a day. Buyer will immediately notify Seller by telephone at a number designated by Seller should any alarm signal be received. 15.8 Buyer grants Seller an unrestricted right of access twenty-four (24) hours a day to the Oxygen Plant Site(s) for the term of this Agreement and, thereafter, for the delivery of liquid oxygen and maintenance and removal of the Oxygen Plant. Praxair.~nc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 17 15.9 Buyer will prevent persons other than Seller's representatives or Buyer's employees authorized by Seller from entering the Oxygen Plant Site(s) or altering, repairing or adjusting, or otherwise tampering with the Oxygen Plant. Buyer will prohibit storage of flammable or corrosive materials within two hundred (200) feet of the Oxygen Plant Site(s), unless approved in writing by Seller. Buyer will prohibit smoking or use of open flames by its employees within the area of the Oxygen Plant Site(s). Buyer will provide a fire hydrant within two hundred and fifty (250) feet of the Oxygen Plant Site(s) or other fire suppression system acceptable to Seller and available for use in the protection of the Oxygen Plant. 15.10 Buyer will hold Seller harmless from and against liens and claims against the Oxygen Plant due to its location on Buyer's premises. 15.11 Buyer and Seller agree to negotiate, in good faith, any fees associated with modifications to the Oxygen Plant Site(s) requested by Buyer. All oxygen delivered during plant outages for modifications requested by Buyer will be Supplemental Oxygen and the outage will not be considered as shutdown as specified in Article 11.2. ARTICLE 16 - ENVIRONMENTAL CONDITIONS 16.1 If for any reason, inlet air contaminants or other environmental factors create conditions which, in the demonstrated opinion of Seller, affect safe or reliable operation of the Oxygen Plant, or impose or result in additional maintenance, repair, operational or replacement requirements for the Oxygen Plant, then Buyer, upon receipt of written notice from Seller of the existence of such factors, shall proceed in good faith either to a) correct such condition by removal or modification of contaminant source or b) reimburse Seller for the costs of additions or modifications to the Oxygen Plant or its components reasonably necessary to alleviate such conditions for safe or reliable operation or c) reimburse Seller for increased Oxygen Plant operational, maintenance, repair or replacement cost attributable to such factors. Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 18 16.2 Buyer warrants that there are no toxic or hazardous materials or substances on, in or under the Oxygen Plant Site(s) which would prevent or increase the cost of the construction or operation of the Oxygen Plant or which would cause injury or death to Seller's employees or any other persons on or at the Oxygen Plant Site(s) or which would cause oxygen damage or injury to any adjoining property. Buyer shall indemnify and hold Seller harmless from and against any and all claims, liabilities, costs (including attorney's fees), expenses, damages, penalties and fines resulting from any breach of the foregoing warranty or from any toxic or hazardous materials now or hereafter in, on or under the Oxygen Plant Site(s) which did not occur or result directly from Seller's performance pursuant to this Agreement. 16.3 Seller, at its expense, will construct the Oxygen Plant to operate with a noise level of 96 dba time weighted average measured 20 feet beyond the Oxygen Plant boundary, 5 feet above ground level.. If, for any reason subsequent to the date of this Agreement, any reduction in such noise emission level results in additional maintenance, repair, operational or replacement requirements for the Oxygen Plant, then Buyer, shall (a) reimburse Seller for the costs of additions or modifications to the Oxygen Plant or its components reasonably necessary to meet any such reduced noise levels and (b) reimburse Seller for increased Oxygen Plant operational, maintenance, repair or replacement costs attributable to such factors. At Buyer's request, Seller and Buyer will meet to discuss and evaluate Buyer's options hereunder or determine any other mutually acceptable option. ARTICLE 17 - UTILITIES 17.1 Buyer, at its expense, will provide facilities to deliver temporary construction power to the point(s) within the Oxygen Plant Site(s) which Seller designates. Buyer, at no cost to Seller, will provide 480 Volt electrical service to the Oxygen Plant Site(s) at least two weeks prior to First Delivery of Oxygen. Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 19 17.2 In accord with the specifications set forth in Exhibit B to this Agreement, Buyer, at its expense, will provide permanent facilities to deliver electric power to the point(s} on the Oxygen Plant Site(s) which Seller designates and will install circuit breaker(s) and other necessary equipment at Buyer's source of power as requested by Seller to protect against short-circuits and overloads in Buyer's feeder and the motor control center of the Oxygen Plant. Buyer will terminate all feeder(s) at Seller's electrical gear. Electric power shall be available to Seller at least two weeks prior to First Delivery of Oxygen. 17.3 Buyer, at its expense, will provide storm and sewer connections at the points on the Oxygen Plant Site(s) designated by Seller, and Buyer, at no cost to Seller, shall remove and treat all discharges from the Oxygen Plant in accordance with all applicable federal, state and local laws, rules, regulations for the term of this Agreement. Said discharges will include process water, air compression condensate, and site runoff. 17.4 Buyer, at its expense, will install or cause to be installed two dedicated pulse source telephone lines with free access at the points within the Oxygen Plant Site(s) designated by Seller and should be in service at least two weeks prior to First Delivery of Plant Produced Oxygen. Seller will pay for all use charges associated with the telephone service after installation. 17.5 Buyer, at its expense, will provide a three-quarter inch hose bib (3/4 inch) and facilities for potable water supply to the point(s) on the Oxygen Plant Site(s} which Seller designates. Buyer will pay for all charges associated with the supply of water. 17.6 Buyer will provide sanitary facilities twenty-four (24) hours per day for the use by Seller's employees or representatives operating, servicing, maintaining or otherwise involved with the Oxygen Plant. Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 20 ARTICLE 18 - FAIR LABOR STANDARDS ACT 18.1 Seller represents that oxygen delivered to Buyer hereunder will have been produced in compliance with the Fair Labor Standards Act of 1938, as amended. ARTICLE 19 -APPLICABLE LAW 19.1 This Agreement will be governed by the substantive laws of Iowa. ARTICLE 20 - DISPUTE RESOLUTION 20.1 In the event that a party to this Agreement has reasonable grounds to believe that the other party hereto has failed to fulfill any obligation hereunder, or, that its expectation of receiving due performance under this Agreement may be impaired, such party will promptly notify the other party in writing of the substance of its belief. The party receiving such notice must respond in writing within thirty (30) days of receipt of such notice and either provide evidence of cure of the condition specified, or provide an explanation of why it believes that its performance is in accordance with the terms and conditions of this Agreement, and also specify three (3) dates, all of which must be within thirty (30) days from the date of its response, for a meeting to resolve the dispute. The claiming party will then select one (1) of the three (3) dates, and a dispute resolution meeting will be held. If the parties cannot, in good faith discussions, resolve their dispute, they will be free to pursue all remedies allowed under the law without prejudice. ARTICLE 21 . NOTICES 21.1 All notices, requests, demands, invoices, and other communications under this Agreement, except those communications pursuant to Article 7.4, which may be given electronically, telephonically or by facsimile transmission, shall be made in writing and shall be deemed to have been duly given on the date of delivery if delivered personally on the party to whom notice is to be given, or on the second day after Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 21 mailing if mailed to the party to whom notice is to be given, by first class mail postage prepaid, and properly addressed as follows: To Seller at: To Buyer at: Invoices at: PRAXAIR, INC. Attention: Customer Financial Services 55 Old Ridgebury Road Danbury, Connecticut 06810-5113 Fax: (203) 837-2795 CITY OF DUBUQUE Att: Water Pollution Control Plant Manager Water Pollution Control Plant 795 Julien Dubuque Drive Dubuque, Iowa 52003-7996 CITY OF DUBUQUE Att: Water Pollution Control Plant Manager Water Pollution Control Plant 795 Julien Dubuque Drive Dubuque, Iowa 52003-7996 Fax: (563) 589-4179 Either party may change its address(s) for purposes of this Article 21 by giving the other party notice of the new address in the manner set forth above. ARTICLE 22 - ASSIGNMENT 22.1 This Agreement shall inure to the benefit of and bind the respective successors and assigns of the parties hereto and except as provided below, any assignment of this Agreement without the prior written consent of the other party, which shall not be unreasonably withheld, shall be void. Seller may assign its rights under this Agreement, including the rights to receive payments hereunder to a subsidiary, affiliate, partnership, venture or financial institution (but in such case Seller shall remain liable to Buyer for Seller's obligations hereunder). Such assignment shall be promptly Praxair,.lnc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 22 acknowledged in writing by Buyer after notice of assignment is received from Seller. In addition, Seller may, without Buyer's consent, assign all or part of this Agreement to an affiliate of Seller or any party obtaining substantially all of the business assets of Seller by way of a merger, consolidation or acquisition. ARTICLE 23 - PROMOTIONAL USE 23.1 Upon reasonable advance notice by Seller, Buyer hereby grants to Seller the right to use the Oxygen Plant for promotional purposes including site visits, etc. Specific promotional uses shall be subject to Buyer's approval, provided, however, that such approval shall not be unreasonably withheld. ARTICLE 24 - HEADINGS 24.1 Any headings and the Table of Contents contained in this Agreement are used only as a matter of convenience and reference and are in no way intended to define, limit, expand or describe the scope of this Agreement. ARTICLE 25 - WAIVER 25.1 A waiver of any of the terms and conditions hereof shall not be deemed a continuing waiver, but shall apply solely to the instance to which the waiver is directed. ARTICLE 26 - PRIOR AGREEMENTS 26.1 Buyer hereby represents that it is contractually free to enter into this agreement as described herein. This Agreement cancels and supersedes any prior agreement or agreements between Buyer and Seller for delivery of oxygen to Buyer's Plant, but this Agreement shall not be construed as a renunciation or discharge of any claim in damages for an antecedent breach. Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 23 ARTICLE 27 - ENTIRE AGREEMENT 27.1 The entire Agreement is contained herein. There are no other promises, representations or warranties affecting this Agreement, and any other or different terms and conditions in any purchase orders issued or accepted hereunder shall be deemed null and void. Neither of the parties shall be bound by any terms, conditions, decisions, definitions, warranties or representations with respect to the subject matter hereof other than as expressly provided herein, or as duly set forth on or subsequent to the date hereof in a writing duly signed by the parties to be bound thereby. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. CITY OF DUBUQUE PRAXAIR, INC. By: Typed Name Title: Date: By: Typed Name Title: Date: Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 24 Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement Page 25 EXHIBIT A SITE LOCATION DRAWING Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement ~~ , , " . ',', , , " ' " , ' '. , , " , ',', ' :- :- : : : I I . . >>I [J I <~ '~~ . >::, I ",~"" 'I -: -: : : :- I I \, \',-, \ '> :1 : ' "'\.\ "" . \. '-\ :':: '> \~~~ ,:....... I \ '. '\ "'" ,,- " , "< \~;§~~~~ ., ~ i '~'- -.':- ' "=-- ------, " I '" \ \ \, EXHIBIT B SPECIFICATION FOR ELECTRICAL POWER The electrical power supply shall have the capability to permit starting the largest motor across the line without causing a voltage drop in excess of 15 percent (15%) at the Buyer's switchgear. The largest motor will be 200 horsepower @ 480 volts. The maximum connected load for 480 volt power will be 300 kVA. The limit for symmetrical short circuit current will be 65,000 RMS amperes. The voltage variation shall not be more than:t 5 percent (:t 5%). The supply shall be 60 hertz, 3 phase. The electrical supply system system shall be solidly grounded. The supply voltage unbalanCE! between phases shall not be greater than :t 1 percent (:t 1 %) for both steady-state and instantaneous conditions, except for fault conditions. The supply voltage sine wave harmonic distortion shall not exceed 5 percent (5%) total and 3 percent (3%) for any individual harmonic per IEEE Standard 519. Buyer will verify and provide that the electric power supply is protected from electrical short circuits and overloads by Buyer and/or electric power utility. The Oxygen Plant will consume an average demand for fifteen (15) minutes of 1.35 Kwh/100 CF, based on design output, 60 degrees Fahrenheit (60 F), 50 percent (50%) relative humidity, and 14.35 pound per square inch absolute (psia) barometric pressure. The power consumption may vary plus or minus five percent (:t5%). Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement EXHIBIT C RELEASE OF INTEREST The undersigned ("Grantor") holds fee title to certain land as more particularly described in EXHIBIT A. attached hereto and made part hereof (the "Premises") and has granted to Praxair, Inc., a Delaware corporation ("Praxair"), the right to locate, maintain and operate certain facilities, improvements, fixtures, machinery and equipment, and the appurtenances thereto (collectively, the "Property"), for the production, compression, storage, vaporization and transportation of industrial gases (e.g., oxygen, nitrogen, argon, etc.) upon the Premises. In consideration of One Dollar ($1.00) and other valuable consideration, Grantor, on behalf of itself and its successors and assigns, hereby (i) ratifies and confirms that the Property shall remain the personal property of Praxair, Praxair shall have access thereto at all times and Praxair shall have the right, from time to time, to replace or remove the Property, in whole or in part, all pursuant to a separate unrecorded Supply Agreement between Grantor and Praxair, as may be amended by said parties from time to time; and (ii) waives and releases all claims of title or interest, including any security interests or liens, which it may have or hereafter acquire in the Property. EXECUTED this - day of ,2004. Witnesses: By: Title: State of: Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement EXHIBIT D INVOICING DURING INTERIM SUPPLY PERIOD (SECTION 7.1) Assumptions: Base Monthly Fee: Base Incremental Plant Oxygen: Oxygen Volume (CF) Base Plant Oxygen Incremental Plant Oxygen Supplemental Oxygen Example Invoice Calculations: Base Plant Oxygen Up to 5,580,000 CF/month Incremental Plant Oxygen 750,000 CF @ $0.200/100 CF Supplemental Oxygen 100,000 CF @ $0.325/100 CF Invoice Total (Monthly) $13,750/month $0.200/100 CF 5,580,000 750,000 100,000 $13,750 $ 1,500 $ 325 $15,575 Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement EXHIBIT E ADJUSTMENT OF PLANT PRODUCED OXYGEN PRICES (ARTICLE 8.1) Assumptions: Base Monthly Fee: Base Incremental Plant Oxygen: Base PPI: Current PPI: $13,750/month $0.200/100 CCF 100.0 102.7 Example Calculations: 0 New Monthly Fee New Monthly Fee = Base Monthly Fee * (Current PPI/Base PPI) New Monthly Fee = $13,750 * (102.71100.0) New Monthly Fee = $13,750 * 1.027 New Monthly Fee = $14,121.25 The New Price for the Plant Produced Product Monthly Fee = $14,121.25 0 New Incremental Plant Oxygen New Incremental Oxygen Price = Base Incremental Plant Oxygen * (Current PPI/Base PPI) New Incremental Oxygen Price = $0.200/100 CCF * (102.71100.0) New Incremental Oxygen Price = $0.200/100 CCF * 1.027 New Incremental Oxygen Price = $0.2054/100 CCF The New Price for Incremental Plant Produced Oxygen = $0.2054/100 CCF Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement EXHIBIT G INSURANCE SCHEDULE INSURANCE REQUIREMENTS FOR TENANTS AND LESSEES OF CITY PROPERTY OR VENDORS (SUPPLIERS, SERVICE PROVIDERS)'TO THE CITY OF DUBUQUE 1. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa. All insurers shall have a rating of A of better in the current AM. Best Rating Guide. However, Seller may self retain or self insure any of the required insurance, and such self insured retention or other self insurance shall not be subject to the foregoing ratings requirement. 2. All policies of insurance shall be endorsed to provide a thirty (30) day advance notice of cancellation to the City of Dubuque if cancellation is prior to the expiration date. This endorsement supersedes the standard cancellation statement on the Certificate of Insurance. 3. Seller shall furnish a Certificate of Insurance to the City of Dubuque, Iowa for the coverage required in Paragraph 6 below. Such certificates shall include copies of the following policy endorsements: a) Thirty day notice of cancellation to the City of Dubuque. b) Commercial General Liability policy is primary and non-contributing. c) Commercial General Liability additional insured endorsement. d) Governmental Immunity Endorsements. e) Waiver of recovery under workers compensation. 4. Each certificate shall be submitted to the contracting department of the City of Dubuque. 5. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of this agreement. 6. Seller shall be required to carry the following minimum coverage/limits or greater if required by law or other legal agreement: Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement a) COMMERCIAL GENERAL LIABILITY General Aggregate Limit Products-Completed Operations Aggregate Limit Personal and Advertising Injury Limit Each Occurrence Limit Fire Damage Limit (anyone occurrence) Medical Payments $2,000,000 $1,000,000 $1,000,000 $1,000,000 $ 50,000 $ 5,000 This coverage shall be written on an occurrence, not claims made, form per location. All deviations or exclusions from the standard ISO commercial general liability form CG 0001 or Businessowners form BP 0002 shall be clearly identified. Governmental Immunity Endorsement identical or equivalent to form attached. An additional insured endorsement identical or equivalent to ISO Form CG 2026 or CG 2011 and include as additional insureds: "The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions andlor authorities and their board members, employees, and volunteers." b. WORKERS' COMPENSATION & EMPLOYERS LIABILITY Statutory for Coverage A Employers Liability: $100,000 each accident $100,000 each employee-disease Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement $500,000 policy limit-disease Policy shall include an endorsement waiving right of recovery against City of Dubuque. c) UMBRELLA/EXCESS LIABILITY $ 4.000.000 POLICY NUMBER COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person Or Organization: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees, and volunteers. (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement) WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. Copyright. Insurance Services Office. Inc. 1994 (CG 20 26 11 85) Praxair, Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement GOVERNMENTAL IMMUNITIES ENDORSEMENT 1. Nonwaiver of Governmentallmmunitv. The insurance carrier expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the City of Dubuque, Iowa under Code of Iowa Section 670.4 as it is now exists and as it may be amended from time to time. 2. Claims Coveraae. The insurance carrier further agrees that this policy of insurance shall cover only those claims not subject to the defense of governmental immunity under the Code of Iowa Section 670.4 as it now exists and as it may be amended from time to time. Those claims not subject to Code of Iowa Section 670.4 shall be covered by the terms and conditions of this insurance policy. 3. Assertion of Government Immunitv. The City of Dubuque, Iowa shall be responsible for asserting any defense of governmental immunity, and may do so at any time and shall do so upon the timely written request of the insurance carrier. 4. Non-Denial of Coveraae. The insurance carrier shall not deny coverage under this policy and the insurance carrier shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa under this policy for reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of the defense(s) of governmental immunity asserted by the City of Dubuque, Iowa. 5. No Other ChanQe in Policv. The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. Praxair. Inc. - Business Confidential City of Dubuque - Oxygen Supply Agreement -- Page 1 of 1 Paul Horsfall From: Rick_Nelson@praxair.com Sent: Wednesday, July 14, 2004 7:55 AM To: phorsfal@cityofdUbuque.org Cc: Kyric_McMillan@praxair.com Subject: Praxair Oxygen Supply Agreement Paul- Following up on conversations with you and Barry Lindahl, I am providing below a summary of the issues discussed and related Praxair clarifications/responses: Article 6 (Duration of Agreement) - praxair would agree to 10 year term at $15,100 base monthly fee. Article 11.2 (Shutdown) - Excepting force majeure events, Praxair commits to 98% reliability (uptime) for the oxygen plant. In event downtime exceeds 2%, Praxair will continue to suppiy with supplemental oxygen (versus plant produced oxygen) up to 7,500 CFH at the base monthly fee plus the cost of power ColD wouid have otherwise purchased for the plant. Article 12.3 (Contingency) - The agreement provides for a term extension of two times the length of any contingency. The reasoning is that praxair project economics are adversely affected by contingencies and that extension provides some protection. Article 14 (Confidentiality) - praxair acknowledges that CofD is required by law to make public certain materials to the extent required by law. We believe the supply agreement allows CofD to do so. I hope our clarifications/responses are satisfactory. I will leave it to you to forward to Barry Lindahl, City Manager and any other appropriate parties. As we discussed this morning, 1 would be glad to attend council and/or public meeting(s). Rick Nelson On site & Pipeiine Sales Calumet Area PRAXAIR, INC. 4400 Kennedy Avenue East Chicago, Indiana 46312 Tel: 219-391-5208 Mob: 219-218-3875 7/14/2004 Page 1 ofl Paul Horsfall From: Rick_Nelson@praxair.com Sent: Wednesday, July 14, 2004 7:55 AM To: phorsfal@cityofdubuque.org Cc: Kyrlc_McMillan@praxair.com Subject: Praxalr Oxygen Supply Agreement Paul- Following up on conversations with you and Barry Lindahl, I am providing below a summary of the issues discussed and related Praxair clarifications/responses: Article 6 (Duration of Agreement) - Praxair would agree to 10 year term at $15,100 base monthly fee. Article 11.2 (Shutdown) - Excepting force majeure events, Praxair commits to 98% reliability (uptime) for the oxygen plant. In event downtime exceeds 2%, Praxair will continue to supply with supplemental oxygen (versus plant produced oxygen) up to 7,500 CFH at the base monthly fee plus the cost of power CofD would have otherwise purchased for the plant. Article 12.3 (Contingency) - The agreement provides for a term extension of two times the length of any contingency. The reasoning is that Praxair project economics are adversely affected by contingencies and that extension provides some protection. Article 14 (Confidentiality) - Praxair acknowledges that ColD is required by law to make public certain materials to the extent required by law. We believe the supply agreement allows ColD to do so. I hope our clarifications/responses are satisfactory. I will leave it to you to forward to Barry Lindahl, City Manager and any other appropriate parties. As we discussed this morning, I would be glad to attend council and/or public meeting(s). Rick Nelson On site & Pipeline Saies Calumet Area PRAXAIR, INC. 4400 Kennedy Avenue East Chicago, Indiana 46312 Tel: 219-391-5208 Mob: 219-218-3875 7/1412004