DBO_sample contract

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DRAFT SERVICE CONTRACT

FOR THE

DESIGN, CONSTRUCTION AND OPERATION

OF THE

SPOKANE COUNTY

REGIONAL WATER RECLAMATION FACILITY

between

COUNTY OF SPOKANE, WASHINGTON

AND

CH2M HILL CONSTRUCTORS, INC.

Dated

______________, 2008


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TABLE OF CONTENTS

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1. DEFINITIONS ............................................................................................. 3SECTION 1.2. INTERPRETATION .................................................................................... 25

(A) References Hereto ................................................................................................. 25(B) Gender and Plurality............................................................................................. 25(C) Persons................................................................................................................. 25(D) Headings .............................................................................................................. 25(E) Entire Agreement.................................................................................................. 25(F) Technical Specifications........................................................................................ 26(G) Standards of Workmanship and Materials ............................................................ 26(H) Technical Standards and Codes............................................................................ 26(I) Liquidated Damages ............................................................................................. 27(J) Causing Performance............................................................................................ 27

(K) Party Bearing Cost of Performance........................................................................ 27(L) Assistance ............................................................................................................ 27(M) Interpolation......................................................................................................... 28(N) Applicability and Stringency of Contract Standards .............................................. 28(O) Delivery of Documents in Digital Format............................................................... 28(P) Severability........................................................................................................... 28(Q) No Third-Party Rights ........................................................................................... 28(R) References to Treatment ....................................................................................... 29(S) References to Days ............................................................................................... 29(T) References to Including......................................................................................... 29(U) References to Knowledge....................................................................................... 29(V) Counterparts ........................................................................................................ 29(W) Governing Law...................................................................................................... 29

(X) Defined Terms ...................................................................................................... 29ARTICLE II

REPRESENTATIONS AND WARRANTIES

SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE COUNTY ...................... 30(A) Existence and Powers ........................................................................................... 30(B) Due Authorization and Binding Obligation............................................................ 30(C) No Conflict............................................................................................................ 30(D) No Approvals Required.......................................................................................... 30(E) No Litigation ......................................................................................................... 30(F) County Ownership Interests in the Site................................................................. 31

(G) Information Pertaining to the Site ......................................................................... 31SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................... 31(A) Existence and Powers ........................................................................................... 31(B) Due Authorization and Binding Obligation............................................................ 31(C) No Conflict............................................................................................................ 31(D) No Approvals Required.......................................................................................... 32(E) No Litigation ......................................................................................................... 32(F) Claims and Demands............................................................................................ 32(G) Applicable Law Compliance................................................................................... 32


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(H) Practicability of Performance................................................................................. 32(I) Patents and Licenses ............................................................................................ 33(J) Information Supplied by the Company.................................................................. 33(K) Guaranty Agreement............................................................................................. 33(L) Required Design/Build Period Insurance .............................................................. 33

ARTICLE III TERM

SECTION 3.1. EFFECTIVE DATE AND INITIAL TERM ..................................................... 34SECTION 3.2. RENEWAL AND EXTENSION OPTION....................................................... 34

ARTICLE IV

PERMITTING, DESIGN AND CONSTRUCTION OF THE FACILITY

SECTION 4.1. DESIGN/BUILD WORK GENERALLY........................................................ 35(A) Commencement of Design/Build Work ................................................................. 35

(B) Construction Practice ........................................................................................... 35(C) Sequencing and Staging of Design/Build Work..................................................... 35(D) Schedule and Reports........................................................................................... 36(E) Monthly On-Site Meetings and Design and Construction Review........................... 36(F) Engagement of County Engineering Representative............................................... 37(G) Title and Risk of Loss............................................................................................ 37(H) Encumbrances ..................................................................................................... 38(I) Utilities................................................................................................................. 38(J) Payment of Costs .................................................................................................. 38(K) Quality Assurance and Quality Control................................................................. 38(L) Certificates and Reports........................................................................................ 38(M) Notice of Default ................................................................................................... 39

SECTION 4.2. ACCESS TO AND SUITABILITY OF SITE................................................... 39

(A) Site Familiarity ..................................................................................................... 39(B) Independent Verification....................................................................................... 39(C) Site Access ........................................................................................................... 40(D) Regulated Site Conditions and Differing Site Conditions ....................................... 40

SECTION 4.3. SURFACE AND SUBSURFACE GEOTECHNICAL CONDITIONS................. 40(A) General................................................................................................................. 40(B) Differing Site Conditions....................................................................................... 40(C) Regulated Site Conditions - Company Obligations................................................. 41(D) Regulated Site Conditions - County Obligations.................................................... 41

SECTION 4.4. DESIGN WORK......................................................................................... 42(A) Performance of the Design Work ........................................................................... 42(B) Design Risk .......................................................................................................... 42(C) County Review and Comment on Design Documents ............................................ 42

(D) Changes to the Technical Specifications................................................................ 43(E) Documents at Site ................................................................................................ 43(F) Licensing Requirements........................................................................................ 43

SECTION 4.5. SUPPLEMENTAL TECHNICAL INFORMATION. ......................................... 43(A) Relation to the Design and Construction Requirements ........................................ 44(B) Permissible Variations .......................................................................................... 44

SECTION 4.6. CHANGES TO THE DESIGN AND CONSTRUCTIONREQUIREMENTS...................................................................................... 44

(A) Changes Made at Company Request ..................................................................... 44


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(B) Changes Made due to Uncontrollable Circumstances............................................ 45(C) Changes Required by Governmental Bodies .......................................................... 45(D) Changes Required by the County.......................................................................... 46

SECTION 4.7. DESIGN/BUILD WORK CHANGE DIRECTIVES. ....................................... 46(A) Generally .............................................................................................................. 46(B) Disagreement with Terms of a Design/Build Work Change Directive..................... 47

SECTION 4.8. COMPANY CONSTRUCTION PERMITTING RESPONSIBILITIES................. 47(A) Applications and Submittals................................................................................. 47(B) Data and Information ........................................................................................... 48(C) Non-Compliance and Enforcement........................................................................ 48(D) Reports to Governmental Bodies ........................................................................... 49(E) Potential Regulatory Change................................................................................. 49(F) Assistance to the County ...................................................................................... 49(G) Company Assumption of Permitting Risk .............................................................. 50(H) Relief from Certain Permitting Obligations ............................................................ 50(I) Assumed Approval Issuance Dates........................................................................ 51(J) Failure of a Governmental Body to Comply with Applicable Law ........................... 52

SECTION 4.9. COUNTY PERMITTING RESPONSIBILITIES. ............................................. 52(A) County Permitting Responsibilities Generally........................................................ 52

(B) Ecology Requirements and the NPDES Permit....................................................... 53SECTION 4.10. COMPLIANCE WITH APPLICABLE LAW. ................................................... 53(A) Compliance with Applicable Law Generally ........................................................... 53(B) Compliance with Conditions in Governmental Approvals ...................................... 53(C) Governmental Approvals Necessary for Continued Construction........................... 53(D) Fines, Penalties and Remediation ......................................................................... 53

SECTION 4.11. ENVIRONMENTAL MITIGATION MEASURES ............................................ 54SECTION 4.12. CONSTRUCTION MONITORING, OBSERVATIONS, TESTING AND

UNCOVERING OF WORK.......................................................................... 54(A) Observations and Design/Build Work Review Protocol.......................................... 54(B) Tests..................................................................................................................... 54(C) County Observations, Inspections and Tests......................................................... 55(D) Taking Apart, Uncovering and Replacing Design/Build Work................................ 55

SECTION 4.13. CORRECTION OF NON-CONFORMING DESIGN/BUILD WORK................ 56(A) Correction of Non-Conforming Design/Build Work................................................ 56(B) Elective Acceptance of Defective Design/Build Work............................................. 56(C) Relation to Other Obligations................................................................................ 57

SECTION 4.14. DAMAGE TO THE FACILITY. .................................................................... 57(A) Damage Prevention............................................................................................... 57(B) Restoration........................................................................................................... 57(C) Notice and Reports ............................................................................................... 57(D) Insurance and Other Third-Party Payments.......................................................... 58(E) Uninsured Costs................................................................................................... 58

SECTION 4.15. PATENT, COPYRIGHT AND OTHER PROTECTED MATERIAL.................... 58(A) Property of the County.......................................................................................... 58(B) Delivery of Deliverable Material............................................................................. 58

(C) Software and Other Computer Programs as Part of the Deliverable Material ......... 58(D) Use of Deliverable Material, Processes and Equipment.......................................... 59(E) Infringement of Deliverable Material, Process or Equipment.................................. 59

SECTION 4.16. PERSONNEL............................................................................................. 59(A) Personnel Performance ......................................................................................... 59(B) Design/Build Manager.......................................................................................... 59(C) County Rights With Respect to Key Personnel....................................................... 60(D) Labor Disputes ..................................................................................................... 60(E) Prevailing Wages................................................................................................... 60


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SECTION 4.17. WARRANTIES. .......................................................................................... 61

ARTICLE V

ECOLOGY REQUIREMENTS AND THE NPDES PERMIT

SECTION 5.1. ECOLOGYS ROLE GENERALLY ............................................................... 62SECTION 5.2. ECOLOGY REQUIREMENTS DURING THE DESIGN/BUILD PERIOD. ...... 62(A) The Primary Design Document ............................................................................. 62(B) County Review of WAC 173-240 Submittals on Behalf of Ecology.......................... 62(C) Ecology Access to Records and Site....................................................................... 63

SECTION 5.3. OBTAINING THE INITIAL NPDES PERMIT. ............................................... 63(A) Responsibility for Obtaining the Initial NPDES Permit........................................... 63(B) Company Assistance............................................................................................. 63

SECTION 5.4. TERMS AND CONDITIONS OF THE INITIAL NPDES PERMIT. ................... 64(A) Relationship to the Contract Standards in Effect as of the Contract Date.............. 64(B) NPDES Terms and Conditions Consistent with the Contract Standards in Effect

as of the Contract Date ......................................................................................... 64(C) Additional or More Stringent NPDES Terms and Conditions Not Requiring

Facility Modifications or Resulting in Increased Operating Expenses..................... 64(D) Additional or More Stringent NPDES Terms and Conditions Requiring FacilityModifications or Resulting in Increased Operating Expenses................................. 64

SECTION 5.5. RECLAIMED WATER PROJECT ALTERNATIVES ...................................... 65SECTION 5.6. COMPANY CO-PERMITTEE STATUS ON THE NPDES PERMIT OR

ANY RECLAIMED WATER PERMIT. .......................................................... 66(A) Requirement of Company Co-Permittee Status on the NPDES Permit or Any

Reclaimed Water Permit........................................................................................ 66(B) Company Challenge to Co-Permittee Status .......................................................... 66(C) County Indemnification in the Event of Company Co-Permittee Status on the

NPDES Permit or Any Reclaimed Water Permit ..................................................... 66(D) Upsets and Excessive Influent and Company Co-Permittee Status ........................ 67(E) Service Contract Termination and Company Co-Permittee Status ......................... 67

SECTION 5.7. NPDES PERMIT RENEWALS AND COMPLIANCE...................................... 68(A) Company Responsibility for NPDES Permit Renewals............................................ 68(B) Data and Information ........................................................................................... 68(C) Non-Compliance and Enforcement........................................................................ 69(D) Reports to Ecology ................................................................................................ 69(E) Potential Regulatory Change................................................................................. 69

SECTION 5.8. THIRD-PARTY LAWSUITS PERTAINING TO COMPLIANCE WITH THENPDES PERMIT........................................................................................ 69

(A) Generally .............................................................................................................. 69(B) Corrective Measures ............................................................................................. 70(C) Resolution of Responsibility for Noncompliance with the NPDES Permit ............... 70

ARTICLE VI

ACCEPTANCE OF THE FACILITY

SECTION 6.1. SUBSTANTIAL COMPLETION. .................................................................. 72(A) Conditions to Substantial Completion................................................................... 72(B) Final Punch List ................................................................................................... 73(C) Notice of Substantial Completion .......................................................................... 74

SECTION 6.2. START-UP OPERATIONS. ......................................................................... 74(A) Notices.................................................................................................................. 74


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(B) Commissioning ..................................................................................................... 74SECTION 6.3. ACCEPTANCE TESTING. .......................................................................... 74

(A) Submittal of Acceptance Test Plan ........................................................................ 74(B) Notice of Commencement of Acceptance Test ........................................................ 74(C) Conditions to Commencement of the Acceptance Tests ......................................... 75(D) Conduct of Acceptance Test .................................................................................. 75

(E) Fees of the County Engineering Representative..................................................... 75SECTION 6.4. ACCEPTANCE DATE CONDITIONS........................................................... 76SECTION 6.5. TEST REPORT.......................................................................................... 76SECTION 6.6. INTERIM OPERATIONS AND PROVISIONAL ACCEPTANCE....................... 77

(A) Interim Operations ............................................................................................... 77(B) Company Certification .......................................................................................... 77(C) Effect of Provisional Acceptance............................................................................ 77

SECTION 6.7. CONCURRENCE OR DISAGREEMENT WITH TEST RESULTS................... 78(A) Acceptance Date Concurrence .............................................................................. 78(B) Acceptance Date Disagreement............................................................................. 78(C) Acceptance Date Disagreement and Provisional Acceptance.................................. 78

SECTION 6.8. EFFECT OF UNEXCUSED DELAY; EXTENSION PERIOD.......................... 79(A) Unexcused Delay .................................................................................................. 79

(B) Delay-Liquidated Damages ................................................................................... 79SECTION 6.9. FAILURE TO MEET ACCEPTANCE STANDARD......................................... 80SECTION 6.10. BIOSOLIDS PERFORMANCE TESTING..................................................... 80

(A) Generally .............................................................................................................. 80(B) Submittal of Biosolids Performance Test Plan ....................................................... 80(C) Notice of Commencement of Biosolids Performance Test ....................................... 80(D) Conduct of Biosolids Performance Test ................................................................. 81(E) Fees of the County Engineering Representative..................................................... 81(F) Biosolids Performance Test Report........................................................................ 81(G) Concurrence with Test Report............................................................................... 81(H) Disagreement with Test Report ............................................................................. 81(I) Remedies for Failure to Meet the Biosolids Performance Standards....................... 82

SECTION 6.11. FINAL COMPLETION. ............................................................................... 82

(A) Requirements ....................................................................................................... 82(B) Final Certificate and Claims Statement................................................................. 83(C) Payment for Punchlist Items and Final Payment ................................................... 83

SECTION 6.12. NO ACCEPTANCE, WAIVER OR RELEASE................................................ 84SECTION 6.13. NO SERVICE FEE PAYMENT DURING START-UP AND TESTING.............. 84SECTION 6.14. OVERLAP OF DESIGN/BUILD PERIOD AND OPERATION PERIOD........... 85

ARTICLE VII

FINANCING AND PAYMENT OF THE DESIGN/BUILD PRICE

SECTION 7.1. COUNTY FINANCING................................................................................ 86SECTION 7.2. ASSISTANCE WITH FINANCING PROCESS............................................... 86

SECTION 7.3. WPCRF RESPONSIBILITIES...................................................................... 86(A) WPCRF Loan Agreement ....................................................................................... 86(B) Company Responsibilities..................................................................................... 86(C) Data and Information ........................................................................................... 87(D) Design Packages ................................................................................................... 87(E) WPCRF Requirements........................................................................................... 87

SECTION 7.4. DESIGN/BUILD PRICE............................................................................. 87(A) Design/Build Price Generally................................................................................ 87(B) Fixed Design/Build Price ...................................................................................... 87


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(C) Fixed Design/Build Price Adjustments.................................................................. 88(D) Limitation on Payments for Costs of the Design/Build Work................................. 91(E) Taxes Payable in Connection with the Design/Build Work .................................... 91

SECTION 7.5. PAYMENT PROCEDURE........................................................................... 92(A) Milestone Payments.............................................................................................. 92(B) Construction Disbursement Procedure ................................................................. 92

(C) Disbursement Dispute Procedures........................................................................ 94(D) Letter of Credit in Lieu of Retainage ...................................................................... 94SECTION 7.6. PERMISSIBLE WITHHOLDINGS ............................................................... 95SECTION 7.7. FINAL REQUISITION AND PAYMENT........................................................ 96

(A) Final Requisition .................................................................................................. 96(B) Final Payment....................................................................................................... 96

SECTION 7.8. PAYMENT OF SUBCONTRACTORS........................................................... 98SECTION 7.9. AUDIT BOOKS AND RECORDS. ............................................................... 98

(A) Audit .................................................................................................................... 98(B) Construction Books and Records.......................................................................... 98

ARTICLE VIII

OPERATION AND MANAGEMENT SECTION 8.1. COMPANY OBLIGATIONS GENERALLY. ................................................... 99

(A) Operation and Management Responsibility ........................................................... 99(B) Transfer and Application of Industry Experience................................................... 99

SECTION 8.2. COUNTY OBLIGATIONS GENERALLY....................................................... 99SECTION 8.3. SERVICE COORDINATION AND CONTRACT ADMINISTRATION. ............ 100

(A) Companys Facility Manager ............................................................................... 100(B) Companys Senior Supervisors............................................................................ 101(C) Countys Contract Administrator ........................................................................ 101(D) County Approvals and Consents ......................................................................... 101(E) Communications and Meetings........................................................................... 102(F) Complaints and Communications ....................................................................... 102

SECTION 8.4. OPERATION AND MAINTENANCE MANUAL............................................ 103(A) Company Responsibility ..................................................................................... 103(B) Supplements for Capital Modifications................................................................ 103

SECTION 8.5. PROCESS CONTROL MANAGEMENT PLAN. ........................................... 104(A) Company Responsibility ..................................................................................... 104(B) Supplements for Capital Modifications................................................................ 104

SECTION 8.6. STAFFING AND PERSONNEL. ................................................................ 104(A) Staffing............................................................................................................... 104(B) Training.............................................................................................................. 105(C) Prevailing Wages................................................................................................. 105

SECTION 8.7. TRAINING OF COUNTY PERSONNEL...................................................... 105(A) Emergency Preparedness .................................................................................... 105(B) Ongoing Training ................................................................................................ 105

(C) Permanent Operations ........................................................................................ 105(D) Compensation..................................................................................................... 106SECTION 8.8. ELECTRICITY SUPPLY............................................................................ 106SECTION 8.9. SAFETY AND SECURITY......................................................................... 106

(A) Safety ................................................................................................................. 106(B) Security.............................................................................................................. 107

SECTION 8.10. COMPLIANCE WITH APPLICABLE LAW. ................................................. 107(A) Compliance Obligation........................................................................................ 107(B) Sampling, Testing and Laboratory Work ............................................................. 107


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(C) Investigations of Non-Compliance ....................................................................... 108(D) Fines, Penalties and Remediation ....................................................................... 108(E) No Nuisance Covenant........................................................................................ 109

SECTION 8.11. OPERATING GOVERNMENTAL APPROVALS........................................... 109(A) General Permit for Biosolids Management........................................................... 109(B) Company Assistance........................................................................................... 109

(C) NPDES Permit .................................................................................................... 110(D) All Other Operating Approvals ............................................................................ 110(E) Data and Information ......................................................................................... 110(F) Non-Compliance and Enforcement...................................................................... 111(G) Reports to Governmental Bodies ......................................................................... 111(H) Potential Regulatory Change............................................................................... 111

SECTION 8.12. COUNTY ACCESS TO FACILITY.............................................................. 111SECTION 8.13. ASSET AND FINANCIAL RECORDS. ....................................................... 112

(A) Facility Records .................................................................................................. 112(B) Availability of Facility Records to County ............................................................ 112(C) Record Documents ............................................................................................. 112(D) Financial Records ............................................................................................... 113(E) Company Financial Reports................................................................................ 113

(F) Inspection, Audit and Adjustment....................................................................... 113SECTION 8.14. PERIODIC REPORTS. ............................................................................. 114(A) Monthly and Quarterly Operations...................................................................... 114(B) Annual Operations and Maintenance Reports ..................................................... 114(C) Default Reports................................................................................................... 114(D) Permit Communications and Reports.................................................................. 114

SECTION 8.15. EMERGENCIES. ..................................................................................... 114(A) Emergency Plan.................................................................................................. 114(B) Emergency Action............................................................................................... 115

SECTION 8.16. COST REDUCTION AND SERVICE IMPROVEMENT................................ 115

ARTICLE IX

INDUSTRIAL PRETREATMENT PROGRAMSECTION 9.1. COMPANY IPP OBLIGATIONS................................................................. 116

(A) Industrial Pretreatment Program ........................................................................ 116(B) Company IPP Participation Generally.................................................................. 116(C) IPP Administrative Support Generally ................................................................. 116(D) General Compliance Monitoring.......................................................................... 116(E) Transition Program Administrative Support Duties ............................................. 117(F) Ongoing Program Administrative Support Duties ................................................ 117(G) Field Inspection, Flow Monitoring and Flow Sampling......................................... 118(H) Laboratory Analyses of Wastewater Samples....................................................... 120(I) Preparation of Annual Pretreatment Report......................................................... 120(J) IPP Violation Investigations................................................................................. 121

(K) Notice to County of Violations............................................................................. 121(L) Company Enforcement Assistance ...................................................................... 122(M) Fines and Penalties............................................................................................. 122(N) New Permittees under the IPP ............................................................................. 122

SECTION 9.2. IPP ENFORCEMENT BY THE COUNTY. .................................................. 122(A) Industrial Discharge Permits .............................................................................. 122(B) Enforcement ....................................................................................................... 122

SECTION 9.3. SUMMARY OF RESPONSIBILITIES......................................................... 122


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ARTICLE X

PERFORMANCE

SECTION 10.1. FACILITY PERFORMANCE GENERALLY. ................................................ 124(A) Reliance.............................................................................................................. 124

(B) Curtailments and Shutdowns ............................................................................. 124(C) Limitations on Company Rights .......................................................................... 124SECTION 10.2. EFFLUENT GUARANTEE. ....................................................................... 124

(A) Generally ............................................................................................................ 124(B) Liquidated Damages for Failure to Comply with the Effluent Guarantee.............. 124(C) Indemnity for Loss-and-Expense from Non-Complying Effluent........................... 125(D) Change in Law Affecting Effluent ........................................................................ 125

SECTION 10.3. ODOR GUARANTEE. .............................................................................. 125(A) Applicable Law Limits ......................................................................................... 125(B) Contract Limits................................................................................................... 125(C) Odor Control Practices Report............................................................................. 126(D) Preventing Recurrence of Violations.................................................................... 126(E) Odor Incident ..................................................................................................... 126

(F) Sustained Odor Condition................................................................................... 126(G) Citations for Odor Incidents................................................................................ 126(H) Liquidated Damages for Odor Citations............................................................... 127(I) County Monitoring.............................................................................................. 127(J) Disregarding Prior Odor Citations ....................................................................... 127(K) Sustained Odor Condition Determination ........................................................... 127(L) Liquidated Damages for Sustained Odor Condition Determination...................... 128(M) County Termination Rights Based on Odor Citations or a Sustained Odor

Condition Determination .................................................................................... 128(N) Concurrent Odor Incidents and Sustained Odor Conditions................................ 128(O) Number of Odor Citations and Sustained Odor Condition Determinations .......... 128

SECTION 10.4. SEPTAGE GUARANTEE.......................................................................... 129SECTION 10.5. DISPOSAL OF RESIDUALS AND BIOSOLIDS QUALITY AND

QUANTITY GUARANTEE......................................................................... 129(A) General Obligations ............................................................................................ 129(B) Biosolids Quality and Quantity Guarantee.......................................................... 129(C) Storage, Loading and Coordinating with Transporter .......................................... 130(D) Failure to Comply with the Biosolids Quality and Quantity Guarantee................ 130(E) Residuals Processing and Management Information............................................ 130

SECTION 10.6. ENVIRONMENTAL GUARANTEE............................................................. 130SECTION 10.7. UPSETS AND EXCESSIVE INFLUENT AFFECTING COMPANY

COMPLIANCE WITH PERFORMANCE GUARANTEES.............................. 131(A) Relief Generally................................................................................................... 131(B) Upsets and Excessive Influent ............................................................................ 131(C) Response Measures to Upsets and Excessive Influent ......................................... 131(D) Service Fee Impact.............................................................................................. 131

SECTION 10.8. TESTING, METERING AND WEIGHING. ................................................. 132(A) Testing................................................................................................................ 132(B) Metering and Weighing ....................................................................................... 132

SECTION 10.9. RELEASES, LEAKS AND SPILLS............................................................. 132(A) Unauthorized Releases Prohibited....................................................................... 132(B) Notification and Reporting .................................................................................. 132(C) Cleanup and Costs ............................................................................................. 133(D) Indemnification................................................................................................... 133


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SECTION 10.10. COUNTY REMEDIES FOR NON-COMPLIANCE WITHPERFORMANCE GUARANTEES.............................................................. 133

(A) Remedies............................................................................................................ 133(B) Performance Testing ........................................................................................... 134

ARTICLE XI

MAINTENANCE, REPAIR AND REPLACEMENT

SECTION 11.1. MAINTENANCE, REPAIR AND REPLACEMENT GENERALLY. ................. 135(A) Ordinary Maintenance ........................................................................................ 135(B) Repair and Maintenance of Site Grounds............................................................ 135(C) Major Maintenance, Repair and Replacements by the Company.......................... 135(D) Repair and Replacements by the County............................................................. 136

SECTION 11.2. FACILITY EVALUATION. ......................................................................... 136(A) Initial and Final Valuation of Vehicles, Rolling Stock, Spare Parts and

Consumables...................................................................................................... 136(B) Baseline Facility Record...................................................................................... 136(C) Final Evaluation of the Facility ........................................................................... 137

(D) Required Condition of Facility Structures Upon Return to the County ................ 137(E) Required Condition of Facility Equipment Upon Return to the County................ 137(F) Capital Modifications .......................................................................................... 137(G) Effect of Election to Renew.................................................................................. 138(H) Disputes ............................................................................................................. 138

SECTION 11.3. PERIODIC MAINTENANCE INSPECTIONS. ............................................. 138(A) Annual Maintenance Inspection.......................................................................... 138(B) Full-Scale Inspections......................................................................................... 138(C) Remediation ....................................................................................................... 139(D) Unscheduled Inspections.................................................................................... 139

SECTION 11.4. COMPUTERIZED MAINTENANCE MANAGEMENT SYSTEM.................... 139SECTION 11.5. MAINTENANCE, REPAIR AND REPLACEMENT PLAN.............................. 140

(A) Generally ............................................................................................................ 140

(B) Facility Equipment Repair and Replacement Schedule........................................ 140(C) Facility Equipment Repair and Replacement Charge........................................... 141SECTION 11.6. MEMBRANE REPAIR AND REPLACEMENT............................................. 141

(A) Generally ............................................................................................................ 141(B) Required Condition of Membranes Upon Return to the County ........................... 142

SECTION 11.7. WARRANTIES......................................................................................... 142SECTION 11.8. LOSS, DAMAGE OR DESTRUCTION TO THE FACILITY. ......................... 142

(A) Prevention and Repair......................................................................................... 142(B) Insurance and Other Third-Party Payments........................................................ 143(C) Uninsured Costs................................................................................................. 143(D) Repair of County and Private Property ................................................................ 143

ARTICLE XII

CAPITAL MODIFICATIONS

SECTION 12.1. CAPITAL MODIFICATIONS GENERALLY................................................. 144(A) Purpose .............................................................................................................. 144(B) County Approval................................................................................................. 144(C) Party Responsible for Costs ................................................................................ 144(D) No Third Party Borrowing or Financing............................................................... 144(E) Cost Savings....................................................................................................... 144


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SECTION 12.2. CAPITAL MODIFICATIONS AT COMPANY REQUEST .............................. 145SECTION 12.3. MAINTENANCE, REPAIR AND REPLACEMENT CAPITAL

MODIFICATIONS.................................................................................... 145SECTION 12.4. CAPITAL MODIFICATIONS REQUIRED TO REMEDY COMPANY

BREACH................................................................................................. 145SECTION 12.5. CAPITAL MODIFICATIONS DUE TO UNCONTROLLABLE

CIRCUMSTANCES.................................................................................. 146SECTION 12.6. CAPITAL MODIFICATIONS AT COUNTY DIRECTION............................... 146SECTION 12.7. PRIMARY PROCEDURE FOR IMPLEMENTING CAPITAL

MODIFICATIONS.................................................................................... 146(A) Primary Implementation Procedure..................................................................... 146(B) Preliminary Company Plan and County Review................................................... 147(C) Company Implementation Proposal..................................................................... 147(D) Negotiation and Finalization of Company Implementation Proposal..................... 148(E) Implementation Procedures ................................................................................ 148

SECTION 12.8. ALTERNATIVE PROCEDURES FOR IMPLEMENTING CAPITAL MODIFICATIONS.................................................................................... 148

SECTION 12.9. FINANCING CAPITAL MODIFICATIONS .................................................. 149SECTION 12.10. COMPANY NON-IMPAIRMENT RIGHTS................................................... 149

ARTICLE XIII

SERVICE FEE AND OTHER PAYMENTS

SECTION 13.1. SERVICE FEE ........................................................................................ 150SECTION 13.2. SERVICE FEE FORMULA ....................................................................... 150SECTION 13.3. BASE OPERATING CHARGE COMPONENTS. ......................................... 150

(A) Formula.............................................................................................................. 150(B) Basis of Fixed Component .................................................................................. 151(C) Basis of Variable Component .............................................................................. 151

SECTION 13.4. FIXED COMPONENT. ............................................................................. 151(A) Annual Reset Group Election.............................................................................. 151

(B) Annual Reset Groups Defined............................................................................. 151(C) Adjustment to Facility Element Based on Incremental Increase to Number of Permittees under the IPP .................................................................................... 152

(D) Annual Adjustment of Facility Element............................................................... 152(E) Annual Adjustment of Electricity Element........................................................... 154

SECTION 13.5. VARIABLE COMPONENT. ....................................................................... 155(A) Calculation ......................................................................................................... 155(B) Non-electricity Flow and Loadings Adjustment Element ...................................... 155(C) Electricity Flow and Loading Adjustment Element .............................................. 156

SECTION 13.6. VARIABLE COMPONENT ADJUSTMENT FEES. ...................................... 156(A) Non-electricity Adjustment Fees.......................................................................... 156(B) Electricity Adjustment Fees ................................................................................ 157

SECTION 13.7. REIMBURSABLE COSTS CHARGE ......................................................... 157

SECTION 13.8. ANNUAL MAJOR REPAIR AND REPLACEMENT CHARGES..................... 157(A) Generally ............................................................................................................ 157(B) Major Repair and Replacement Fund .................................................................. 158(C) Maximum Annual Major Repair and Replacement Charge................................... 158(D) Annual Major Repair and Replacement Charge ................................................... 159(E) Characterization of Annual Major Repair and Replacement Charge Payments..... 160

SECTION 13.9. EXTRAORDINARY ITEMS CHARGE OR CREDIT..................................... 160(A) Generally ............................................................................................................ 160(B) Treatment of Extraordinary Items Component .................................................... 160


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SECTION 13.10. BILLING AND PAYMENT......................................................................... 161(A) Billing................................................................................................................. 161(B) Payment ............................................................................................................. 161(C) County Service Fee Offset Rights ........................................................................ 162

SECTION 13.11. ESTIMATES AND ADJUSTMENTS. ......................................................... 162(A) Pro Rata Adjustments......................................................................................... 162

(B) Budgeting........................................................................................................... 162(C) Adjustment to Service Fee................................................................................... 163SECTION 13.12. ANNUAL SETTLEMENT .......................................................................... 163SECTION 13.13. BILLING STATEMENT DISPUTES ........................................................... 163SECTION 13.14. PRIVATE BUSINESS USE RESTRICTIONS.............................................. 164

(A) Payments to Company ........................................................................................ 164(B) Retesting of the Service Fee ................................................................................ 164(C) Monthly Update .................................................................................................. 165

SECTION 13.15. TAXES.................................................................................................... 165

ARTICLE XIV

BREACH, DEFAULT, REMEDIES AND TERMINATION

SECTION 14.1. REMEDIES FOR BREACH ...................................................................... 166SECTION 14.2. EVENTS OF DEFAULT BY THE COMPANY. ............................................ 166

(A) Events of Default Not Requiring Previous Notice or Further Cure Opportunity for Termination........................................................................................................ 166

(B) Events of Default Requiring Previous Notice and Cure Opportunity for Termination........................................................................................................ 167

(C) Other Remedies Upon Company Event of Default................................................ 168(D) Relationship to Liquidated Damages ................................................................... 168

SECTION 14.3. LIMITATION ON COMPANY LIABILITY. ................................................... 169(A) Initial Stated Monetary Limitation....................................................................... 169(B) Reductions for the Payment of Delay-Liquidated Damages .................................. 169(C) Stated Monetary Limitation for Contract Years Six through Ten.......................... 169

(D) Stated Monetary Limitation for Contract Years Eleven through Fifteen................ 169(E) Stated Monetary Limitation for Contract Years Sixteen through the end of the Term................................................................................................................... 169

(F) Liability for Liquidated Damages and Other Reimbursements to the CountyRelating to the Operations Services..................................................................... 170

SECTION 14.4. APPLICABILITY AND INTERPRETATION OF THE LIMITATIONS ONLIABILITY............................................................................................... 170

SECTION 14.5. EVENTS OF DEFAULT BY THE COUNTY................................................ 171(A) Events of Default Permitting Termination ........................................................... 171(B) Notice and Cure Opportunity .............................................................................. 171(C) Termination Liquidated Damages During the Operation Period........................... 172

SECTION 14.6. COUNTY CONVENIENCE TERMINATION DURING THEDESIGN/BUILD PERIOD........................................................................ 172

(A) Termination Right and Fee.................................................................................. 172(B) Delivery of Design/Build Period Work Product to the County .............................. 172SECTION 14.7. COUNTY CONVENIENCE TERMINATION DURING THE OPERATION

PERIOD.................................................................................................. 173(A) Termination Right and Fee.................................................................................. 173(B) Uncontrollable Circumstances ............................................................................ 173(C) Payment of Amounts Owing Through the Termination Date and Termination

Costs .................................................................................................................. 173


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SECTION 14.8. GENERAL PROVISIONS REGARDING CONVENIENCE TERMINATION........................................................................................ 173

(A) Termination Fee Payment Contingent Upon Surrender of Possession.................. 173(B) Adequacy of Termination Payment...................................................................... 173(C) Consideration for Convenience Termination Payment ......................................... 174(D) Completion or Continuance by County ............................................................... 174

SECTION 14.9. OBLIGATIONS UPON TERMINATION OR EXPIRATION. .......................... 174(A) Company Obligations.......................................................................................... 174(B) Hiring of Company Personnel.............................................................................. 176(C) Continuity of Service and Technical Support....................................................... 176(D) Company Payment of Certain Costs .................................................................... 177(E) County Payment of Certain Costs ....................................................................... 177(F) Exit Test ............................................................................................................. 177

SECTION 14.10. SURVIVAL OF CERTAIN PROVISIONS UPON TERMINATION .................. 178SECTION 14.11. NO WAIVERS.......................................................................................... 178SECTION 14.12. NO CONSEQUENTIAL OR PUNITIVE DAMAGES..................................... 178SECTION 14.13. FORUM FOR DISPUTE RESOLUTION..................................................... 179SECTION 14.14. NON-BINDING MEDIATION. ................................................................... 179

(A) Rights to Request and Decline ............................................................................ 179

(B) Procedure ........................................................................................................... 179(C) Non-Binding Effect ............................................................................................. 179(D) Relation to Judicial Legal Proceedings ................................................................ 179

ARTICLE XV

INSURANCE, UNCONTROLLABLE CIRCUMSTANCES AND INDEMNIFICATION

SECTION 15.1. INSURANCE. .......................................................................................... 180(A) Company Insurance............................................................................................ 180(B) Insurers, Deductibles and County Rights............................................................ 180(C) Certificates, Policies and Notice .......................................................................... 180(D) Maintenance of Insurance Coverage.................................................................... 181

(E) County Insurance............................................................................................... 181SECTION 15.2. UNCONTROLLABLE CIRCUMSTANCES.................................................. 181(A) Relief from Obligations........................................................................................ 181(B) Notice and Mitigation.......................................................................................... 182(C) Conditions to Performance, Price and Schedule Relief......................................... 182(D) Cost Relief Associated with Uncontrollable Circumstance Delays interfering with

the Critical Path Completion Date....................................................................... 184(E) Change in Law Pertaining to Taxes ..................................................................... 185(F) Certain Changes in Law occurring Outside the United States ............................. 185(G) Capital Modifications .......................................................................................... 185(H) Acceptance of Adjustment Constitutes Release ................................................... 186

SECTION 15.3. INDEMNIFICATION BY THE COMPANY .................................................. 186SECTION 15.4. INDEMNIFICATION BY THE COUNTY..................................................... 187

ARTICLE XVI

SECURITY FOR PERFORMANCE

SECTION 16.1. GUARANTOR.......................................................................................... 188(A) Guaranty Agreement........................................................................................... 188(B) Material Adverse Change to the Financial Condition of the Guarantor ................ 188(C) Credit Enhancement........................................................................................... 188


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(D) No Surety Liability for Credit Enhancement ........................................................ 189(E) Annual Reports................................................................................................... 189

SECTION 16.2. BONDS................................................................................................... 189(A) Construction Performance and Payment Bonds .................................................. 189(B) Monitoring of Sureties......................................................................................... 190

SECTION 16.3. DESIGN/BUILD LETTER OF CREDIT. .................................................... 190

(A) Terms and Purpose of the Design/Build Letter of Credit ..................................... 190(B) County Drawing Rights....................................................................................... 190(C) Effect of Final Determination of Damages ........................................................... 191

SECTION 16.4. COSTS OF PROVIDING SECURITY FOR PERFORMANCE ....................... 191

ARTICLE XVII

MISCELLANEOUS PROVISIONS

SECTION 17.1. RELATIONSHIP OF THE PARTIES .......................................................... 192SECTION 17.2. LIMITED RECOURSE TO COUNTY ......................................................... 192SECTION 17.3. PROPERTY RIGHTS................................................................................ 192

(A) Protection from Infringement .............................................................................. 192

(B) Substitutes for Deliverable Material, Process or Equipment ................................ 193(C) Intellectual Property Developed by the Company................................................. 193SECTION 17.4. INTEREST ON OVERDUE OBLIGATIONS................................................ 194SECTION 17.5. NEGOTIATED FIXED PRICE WORK........................................................ 194

(A) Fixed Design/Build Price and Fixed Component of the Service Fee ..................... 194(B) Negotiated Lump Sum Pricing of Work for Which the County is Financially

Responsible ........................................................................................................ 194SECTION 17.6. COST SUBSTANTIATION OF WORK ALREADY PERFORMED. ................ 195

(A) Cost Substantiation Generally ............................................................................ 195(B) Costs Requiring Cost Substantiation .................................................................. 195(C) Cost Substantiation Certificate ........................................................................... 195(D) Technical Services .............................................................................................. 196(E) Mark-Up............................................................................................................. 196

(F) Evidence of Costs Incurred ................................................................................. 196SECTION 17.7. SUBCONTRACTORS. .............................................................................. 196(A) Use Restricted .................................................................................................... 196(B) Limited County Review and Approval of Permitted Subcontractors...................... 196(C) Subcontract Terms and Subcontractor Actions................................................... 197(D) Indemnity for Subcontractor Claims ................................................................... 197(E) Assignability ....................................................................................................... 198

SECTION 17.8. ACTIONS OF THE COUNTY IN ITS GOVERNMENTAL CAPACITY. ........... 198(A) Rights as Government Not Limited...................................................................... 198(B) No County Obligation to Issue Governmental Approvals...................................... 198

SECTION 17.9. ASSIGNMENT......................................................................................... 198(A) By the Company ................................................................................................. 198(B) By the County..................................................................................................... 199

SECTION 17.10. FACILITY TOURS.................................................................................... 199SECTION 17.11. COMPLIANCE WITH MATERIAL AGREEMENTS...................................... 199SECTION 17.12. BINDING EFFECT .................................................................................. 199SECTION 17.13. CONTRACT ADMINISTRATION. .............................................................. 199

(A) Administrative Communications ......................................................................... 199(B) Contract Administration Memoranda.................................................................. 199(C) Procedures.......................................................................................................... 200(D) Effect.................................................................................................................. 200

SECTION 17.14. AMENDMENT AND WAIVER................................................................... 200


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(A) Service Contract Amendments ............................................................................ 200(B) Waiver ................................................................................................................ 200

SECTION 17.15. NON-DISCRIMINATION .......................................................................... 200SECTION 17.16. NOTICES................................................................................................ 201

(A) Procedure ........................................................................................................... 201(B) Company Notice Address .................................................................................... 201

(C) County Notice Address........................................................................................ 201SECTION 17.17. NOTICE OF LITIGATION......................................................................... 202SECTION 17.18. FURTHER ASSURANCES........................................................................ 202


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APPENDICES

(1) Site Description(2) Technical Specifications(3) General Design/Build Work Requirements and Environmental Mitigation Measures(4) Design/Build Work Review Procedures

(5)

Anticipated Governmental Approvals (6) Acceptance Test Procedures and Standards and Biosolids Performance Testing(7) [Reserved](8) Milestone Payment and Maximum Drawdown Schedule(9) General Operations and Maintenance Requirements(10) Supplemental Performance Guarantee Requirements(11) Facility Evaluation Protocol(12) Example Service Fee(13) Exit Test and Transition Plan(14) Insurance Requirements(15) Key Personnel and Approved Subcontractors(16) Maintenance, Repair and Replacement Schedules

REFERENCE DOCUMENTS[1] GeoEngineers, Inc., Geotechnical Baseline Study, Proposed Water Reclamation Facility,

Spokane County, Washington, File No. 0188-070-00, August 23, 2007

[2] Final Closure Report, Former Stockyards Property, 1004 N. Freya Street, Spokane, WA,September 24, 2007, File No. 003-09314-00, LFR, Inc.

[3] Spokane County Wastewater Facilities Plan Final Environmental Impact Statement,dated January 2002; Spokane County Wastewater Facilities Plan Final SupplementalEnvironmental Impact Statement, dated December 2002; Conditional Use Permit issuedby the City of Spokane, Washington, File Number Z2007-011-CUP

TRANSACTION FORMS

A. Form of Guaranty Agreement

B. Form of Performance Bond

C. Form of Payment Bond


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Draft of October 17, 2008

SERVICE CONTRACT FOR THE

DESIGN, CONSTRUCTION AND OPERATIONOF THE

SPOKANE COUNTY REGIONAL WATER RECLAMATION FACILITY

THIS SERVICE CONTRACT FOR THE DESIGN, CONSTRUCTION AND

OPERATION OF THE SPOKANE COUNTY REGIONAL WATER RECLAMATION FACILITY (this

Service Contract) is made and entered into as of this ____ day of _________, 2008 between the

County of Spokane, a political subdivision of the State of Washington (the County), and

CH2M Hill Constructors, Inc., a corporation organized and existing under the laws of the State

of Delaware and authorized to do business in the State of Washington (the Company).

RECITALS

(A) The County has determined that it is in the Countys best interests tocontract with a private entity to permit, design, construct, start up, acceptance test, operate,

maintain, repair and replace a new regional water reclamation facility.

(B) The County has also determined that it is in the Countys best interests

to have such private entity (i) administer the Industrial Pretreatment Program, and (ii) perform

certain residuals processing and disposal services, as more particularly described herein

(together with the services described in (A) above, the Contract Services).

(C) Pursuant to the Water Quality Joint Development Act, Chapter 70.150

RCW (the Act), the County is authorized to conduct a procurement process to select a privateentity to provide the Contract Services.

(D) The first phase of the procurement process was the issuance of a

Request for Qualifications (RFQ) by the County in January 2007. Following an evaluation of

the statements of qualifications submitted in response to the RFQ based upon the criteria set

forth in the RFQ, the County selected two firms to whom it would issue a request for proposals

(RFP) to provide the Contract Services.

(E) On October 15, 2007, the County undertook the second phase of the

competitive process by issuing the RFP to the two pre-qualified firms. RFP Addenda wereissued on November 26, 2007 and December 11, 2007.

(F) Proposals submitted in response to the RFP were received on March 14,

2007 from the two pre-qualified firms.

(G) The proposals were reviewed by the Countys selection committee and

assigned a score based on the evaluation criteria and scoring method set forth in the RFP.


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Draft of October 17, 2008 2

(H) Based on the evaluations and scoring of the final proposals, the selection

committee determined that the proposal submitted by ____________________ was the most

advantageous proposal received in response to the RFP.

(I) On _______________, 2008, by Resolution No. __________, the Countys

Board of Commissioners authorized the execution and delivery of this Service Contract onbehalf of the County.

(J) _________________________, an [affiliate] of the Company, will guarantee

the payment and performance of the obligations of the Company under this Service Contract

pursuant to a guaranty agreement executed concurrently herewith.

(K) The County desires to receive, and the Company desires to provide, the

Contract Services under the terms of this Service Contract.

NOW, THEREFORE, in consideration of the mutual covenants herein contained,

the parties hereto, intending to be legally bound, agree as follows:


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ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1. DEFINITIONS. As used in this Service Contract the following

terms shall have the meanings set forth below:

Acceptable Septage means Septage that (1) does not contain grease trap

material, (2) has a pH not lower than 5 and not higher than 8.5, (3) does not contain Toxic

Substances or a Hazardous Material, and (4) is transported into the Facility by authorized

septic tank haulers pre-registered by the Company and the County.

Acceptance means demonstration by the Company in accordance with

Article V and Appendix 6 that the Acceptance Tests have been conducted, the Acceptance Test

Procedures and Standards have been achieved and the other Acceptance Date Conditions set

forth in Section 6.4 have been achieved.

Acceptance Date means the date on which Acceptance has occurred or is

deemed to have occurred under Article VI.

Acceptance Date Conditions has the meaning specified in Section 6.4.

Acceptance Test Plan means the testing protocols, procedures and processes

for the performance of the Acceptance Tests prepared and documented by the Company and

approved by the County in accordance with Appendix 6 and Section 6.3.

Acceptance Test Procedures and Standards means the test procedures and

standards for Acceptance, as set forth in Appendix 6.

Acceptance Tests means the tests required for Acceptance, as more

particularly described in Article VI and Appendix 6.

Act means the Water Quality Joint Development Act, Chapter 70.150 RCW, as

amended, supplemented, superseded and replaced from time to time.

Affiliate means any person directly or indirectly controlling or controlled by

another person, corporation or other entity or under direct or indirect common control with

such person, corporation or other entity.

Annual Major Facility Equipment Payment Amount means the payment

amounts set forth in Table 16-3 of Appendix 16, which are used to calculate the Major Repair

and Replacement Charge in accordance with Section 13.8.

Annual Reset Group has the meaning specified in subsection 13.4(B).

Annual Settlement Statement has the meaning specified in Section 13.12.


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Spokane County Regional Water ReclamationFacility - P5451-4

Service ContractArticle I - Definitions and Interpretation


Appendix means any of the Appendices attached to this Service Contract and

identified as such in the Table of Contents, as the same may be amended or modified from time

to time in accordance with the terms hereof.

Applicable Law means: (1) any federal, state or local law, code or regulation;

(2) any formally adopted and generally applicable rule, requirement, determination, standard,policy, implementation schedule or other order of any Governmental Body having appropriate

jurisdiction; (3) any established interpretation of law or regulation utilized by an appropriate

Governmental Body if such interpretation is documented by such Governmental Body and both

generally applicable and publicly available; (4) any Governmental Approval; and (5) any consent

order or decree, settlement agreement or similar agreement between the County and the EPA,

Ecology or any other Governmental Body, in each case having the force of law and applicable

from time to time to: (a) the siting, design, acquisition, construction, equipping, financing,

ownership, possession, start up, testing, operation, maintenance, repair, replacement or

management of the Facility; (b) the conveyance, treatment, storage, discharge, reuse or

disposal of the influent thereto or the effluent thereof; (c) the air and odor emissions therefrom;

(d) the transfer, handling, processing, transportation or disposal of sludge, biosolids and other

residuals produced thereby; or (e) any other transaction or matter contemplated hereby

(including any of the foregoing which pertain to wastewater treatment, waste disposal, health,

safety, fire, environmental protection, labor relations, building codes, the payment of prevailing

or minimum wages and non-discrimination). Applicable Law shall include the Conditional Use

Permit and the Environmental Mitigation Measures set forth in Reference Document 3.

Assumed Approval Issuance Date has the meaning specified insubsection 4.8(I).

Bankruptcy Code means the United States Bankruptcy Code, Title 11 U.S.C.,

as amended from time to time and any successor statute thereto. Bankruptcy Code shall

also include (1) any similar state law relating to bankruptcy, insolvency, the rights and

remedies of creditors, the appointment of receivers or the liquidation of companies and estates

that are unable to pay their debts when due, and (2) in the event the Guarantor is incorporated

or otherwise organized under the laws of a jurisdiction other than the United States, any

similar insolvency or bankruptcy code applicable under the laws of such jurisdiction.Baseline Cost Amounts has the meaning set forth in subsection 7.4(C)(3)(b).

Baseline Facility Record has the meaning specified in subsection 11.2(B).

Base Operating Charge is comprised of a Fixed Component and a Variable

Component, each of which is designed to recover a distinct portion of the costs associated with

the operation and maintenance costs of the Facility, as set forth in Section 13.3.


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Best and Final Offer Date shall mean May 30, 2008, which is the date the

Company submitted its best and final offer to the County in accordance with the RFP.

Billing Period means each calendar month. The first Billing Period shall begin

on the Acceptance Date (or, if certified by the Company pursuant to Section 6.6, the Provisional

Acceptance Date) and shall continue to the last day of the month in which the Acceptance Date(or, if certified by the Company pursuant to Section 6.6, the Provisional Acceptance Date)

occurs and the last Billing Period shall end on the last day of the Term. Any computation

made on the basis of a Billing Period shall be adjusted on a pro rata basis to take into account

any Billing Period of less than the actual number of days in the month to which such Billing

Period relates.

Biosolids means treated Sludge meeting the Biosolids quality requirements set

forth in subsection 10.5(B).

Biosolids Performance Standards means the standards for successfulcompletion of the Biosolids Performance Test, as set forth in Appendix 6

Biosolids Performance Test means the tests required to demonstrate

compliance with the Biosolids Performance Standards, as more particularly described in

Appendix 6.

Biosolids Performance Test Plan means the testing protocols, procedures and

processes for the performance of the Biosolids Performance Tests prepared and documented by

the Company and approved by the County in accordance with Appendix 6 and Section 6.10.

Biosolids Quality and Quantity Guarantee has the meaning specified in

subsection 10.5(B).

Capital Modification means any material change to the Facility including the

installation of new structures, equipment, systems or technology following Acceptance, as

addressed in Article XII.

CERCLA means the Comprehensive Environmental Response, Compensation,

and Liability Act, 42 U.S.C. 9601 et seq. , and applicable regulations promulgated thereunder,

each as amended from time to time.

Change in Law means any of the following acts, events or circumstances to the

extent that compliance therewith materially increases the cost of performing or materially

increases the scope of a partys obligations hereunder:

(a) except as provided below with respect to the exclusions from the

definition of Change in Law, the adoption, amendment, promulgation, issuance, modification,


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repeal or written change in any Applicable Law, or the administrative or judicial interpretation

thereof on or after [_______ __, 2008] unless such Applicable Law was on or prior to [_______ __,

2008] duly adopted, promulgated, issued or otherwise officially modified or changed in

interpretation, in each case in final form, to become effective without any further action by any

Governmental Body;(b) except as provided below with respect to the exclusions from the

definition of Change in Law, the order or judgment of any Governmental Body issued on or

after [_______ __, 2008] (unless such order or judgment is issued to enforce compliance with

Applicable Law which was effective as of [_______ __, 2008]) to the extent such order or

judgment is not the result of willful or negligent action, error or omission of the Company or of

the County, whichever is asserting the occurrence of a Change in Law; provided, however, that

the contesting in good faith or the failure in good faith to contest any such order or judgment

shall not constitute or be construed as such a willful or negligent action, error or omission; or

(c) except as provided below with respect to the exclusions from the

definition of Change in Law, the denial of an application for, a delay in the review, issuance or

renewal of, or the suspension, termination, or interruption of any Governmental Approval, or

the imposition of new or increased permitting fees, or the imposition of a term, condition or

requirement which is more stringent or burdensome than the Contract Standards in

connection with the issuance, renewal or failure of issuance or renewal of any Governmental

Approval, to the extent that such occurrence is not the result of willful or negligent action,

error or omission or a lack of reasonable diligence of the Company or of the County, whichever

is asserting the occurrence of a Change in Law; provided, however, that the contesting in goodfaith or the failure in good faith to contest any such occurrence shall not be construed as such

a willful or negligent action or lack of reasonable diligence.

It is specifically understood, however, that none of the following shall constitute

a Change in Law:

(i) a change in the nature or severity of the actions typically taken by a

Governmental Body to enforce compliance with Applicable Law which was effective as of the

Contract Date;

(ii) acts, events and circumstances relating to any Governmental Approval

with respect to which the Company has assumed the permitting risk hereunder;

(iii) any increase in any fines or penalties provided for under Applicable Law

in effect as of the Contract Date; or


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(iv) any act, event or circumstance that would otherwise constitute a Change

in Law but that does not change the requirements imposed on the Company by the Contract

Standards in effect as of the Contract Date.

Change Order means a written order issued by the County to the Company

prior to the Acceptance Date making a Design and Construction Requirement Change, whethermade at Company request, due to Uncontrollable Circumstances, as a result of a term or

condition imposed by a Governmental Body, or at the direction of the County, or otherwise

making a Fixed Design/Build Price Adjustment, adjustment to the Scheduled Acceptance Date

or other change to the terms and conditions of this Service Contract relating to the

Design/Build Work or the Operation Services. A Change Order shall be deemed to constitute a

Service Contract Amendment.

Clean Water Act means the Clean Water Act (formally referred to as the Federal

Water Pollution Control Act), 33 U.S.C. 1251 et seq. , and applicable regulations promulgatedthereunder, each as amended from time to time.

CMMS means the computerized maintenance management system to be

developed by the Company in accordance with Section 11.4.

Collection System means the Countys wastewater collection system described

in the Facilities Plan, together with all modifications thereto, as the same shall be acquired,

installed, constructed or reconstructed from time to time.

Company means CH2M HILL Constructors, Inc., a corporation organized and

existing under the laws of Delaware, and its permitted successors and assigns.

Company Fault means any breach (including the untruth or breach of any

Company representation or warranty herein set forth), failure, non-performance or non-

compliance by the Company with respect to its obligations and responsibilities under this

Service Contract to the extent not directly attributable to any Uncontrollable Circumstance,

and which materially and adversely affects the Countys rights, obligations or ability or costs to

perform under this Service Contract.

Company Governmental Approvals means all Governmental Approvals other

than the County Governmental Approvals.

Company Indemnitee has the meaning specified in subsection 5.6(C).

Conditional Use Permit means the permit issued by the City of Spokane,

Washington imposing additional conditions on the design, construction and operation of the

Facility pursuant to the Conditional Use Permit Findings of Fact and Decision on file with the

City Planning Department, File Number Z2007-011-CUP.


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Spokane County Regio