Praxair Oxygen Supply Agreement
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MEMORANDUM
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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
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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.
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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,
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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
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City of Dubuque - Oxygen Supply Agreement
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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%)
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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
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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
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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,
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City of Dubuque - Oxygen Supply Agreement
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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.
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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
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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-
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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.
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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
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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
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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.
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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.
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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.
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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.
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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
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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
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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.
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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
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EXHIBIT A
SITE LOCATION DRAWING
Praxair, Inc. - Business Confidential
City of Dubuque - Oxygen Supply Agreement
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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:
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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
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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)
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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