Document:

EX-10.1

 Exhibit 10.1 

 
  

 
 SERVICE CONTRACT 

FOR THE 
 SUPPLY,
PLACEMENT, REMOVAL AND THERMAL REACTIVATION 
 OF GRANULAR ACTIVATED CARBON 

between 
 THE
CITY OF PHOENIX, ARIZONA 
 and 
 CALGON CARBON CORPORATION 
 Dated as of 

 
  

 
  

 

 TABLE OF CONTENTS 

 

					
	  	  	Page

 ARTICLE I 
 DEFINITIONS AND INTERPRETATION 

 

									
	SECTION 1.1.	 	DEFINITIONS	  	 	3	  
			
	SECTION 1.2.	 	INTERPRETATION	  	 	11	  
				
		 	(A)	  	References Hereto	  	 	11	  
				
		 	(B)	  	Gender and Plurality	  	 	11	  
				
		 	(C)	  	Persons	  	 	11	  
				
		 	(D)	  	Headings	  	 	11	  
				
		 	(E)	  	Entire Agreement	  	 	11	  
				
		 	(F)	  	Parole Evidence	  	 	12	  
				
		 	(G)	  	Causing Performance	  	 	12	  
				
		 	(H)	  	Party Bearing Cost of Performance	  	 	12	  
				
		 	(I)	  	Applicability, Stringency and Consistency of Performance Standards	  	 	12	  
				
		 	(J)	  	Counterparts	  	 	12	  
				
		 	(K)	  	Severability	  	 	12	  
				
		 	(L)	  	No Third-Party Rights	  	 	12	  
				
		 	(M)	  	Approvals	  	 	12	  
				
		 	(N)	  	Interpolation	  	 	13	  
				
		 	(O)	  	References to Including	  	 	13	  
				
		 	(P)	  	References to Days	  	 	13	  
				
		 	(Q)	  	Applicable Law	  	 	13	  
				
		 	(R)	  	References to Applicable Law	  	 	13	  
				
		 	(S)	  	Implied Contract Terms	  	 	13	  
				
		 	(T)	  	Defined Terms	  	 	13	  

 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES 
  

									
	 SECTION 2.1.
	 	REPRESENTATIONS AND WARRANTIES OF THE CITY	  	 	14	  

											
					
		 		 	(A)	  	Existence and Powers	  	 	14	  
					
		 		 	(B)	  	Due Authorization	  	 	14	  

  
 i 

 TABLE OF CONTENTS 
 (continued) 
  

									
		 		  		  	 	Page	  
			
	SECTION 2.2.	 	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	  	 	14	  
				
		 	(A)	  	Existence and Powers	  	 	14	  
				
		 	(B)	  	Due Authorization and Binding Obligation	  	 	14	  
				
		 	(C)	  	No Conflict	  	 	14	  
				
		 	(D)	  	No Approvals Required	  	 	14	  
				
		 	(E)	  	No Litigation Affecting the Company	  	 	15	  
				
		 	(F)	  	Company Ownership Interest in Thermal GAC Reactivation Facility Site	  	 	15	  
				
		 	(G)	  	Company Financing of the Thermal GAC Reactivation Facility	  	 	15	  
				
		 	(H)	  	Intellectual Property	  	 	15	  
				
		 	(I)	  	Information Supplied by the Company	  	 	15	  
				
		 	(J)	  	No Gratuities	  	 	15	  
				
		 	(K)	  	Claims and Demands	  	 	16	  
				
		 	(L)	  	Compliance with Applicable Law Generally	  	 	16	  

 ARTICLE III 
 TERM 
  

							
	SECTION 3.1.	 	 EFFECTIVE DATE AND INITIAL TERM
	  	 	17	  
			
	SECTION 3.2.	 	 RENEWAL AND EXTENSION OPTION
	  	 	17	  

 ARTICLE IV 
 THERMAL GAC REACTIVATION FACILITY 

 

									
	SECTION 4.1.	 	SITING, PERMITTING, FINANCING AND OWNERSHIP OF THERMAL GAC REACTIVATION FACILITY	  	 	18	  
				
		 	 (A)
	 	 Thermal GAC Reactivation Facility Site
	  	 	18	  
				
		 	 (B)
	 	 Permitting
	  	 	18	  
				
		 	 (C)
	 	 Financing
	  	 	18	  
				
		 	 (D)
	 	 Ownership
	  	 	19	  
				
		 	 (E)
	 	 No City Payment Responsibility for Thermal GAC Reactivation Facility
	  	 	19	  

  
 ii 

 TABLE OF CONTENTS 
 (continued) 
  

									
	 	 	 	  	 	  	Page	 
	SECTION 4.2.	 	DESIGN AND CONSTRUCTION OF THERMAL GAC REACTIVATION FACILITY	  	 	19	  
				
		 	(A)	  	Generally	  	 	19	  
				
		 	(B)	  	Reports to the City	  	 	19	  
				
		 	(C)	  	City Access and Review Rights	  	 	20	  
				
		 	(D)	  	Performance of Interim GAC Services	  	 	20	  
			
	SECTION 4.3.	 	FACILITY COMPLETION	  	 	20	  
				
		 	(A)	  	Schedule for Completion	  	 	21	  
				
		 	(B)	  	Conditions to Facility Completion	  	 	21	  
				
		 	(C)	  	Facility Completion on or before the Scheduled Facility Completion Date	  	 	21	  
				
		 	(D)	  	Facility Completion Subsequent to the Scheduled Facility Completion Date	  	 	22	  
				
		 	(E)	  	Failure to Achieve Facility Completion during the Extension Period	  	 	22	  
			
	SECTION 4.4.	 	THERMAL GAC REACTIVATION FACILITY OPERATIONS	  	 	22	  
				
		 	(A)	  	Operations and Maintenance Generally	  	 	22	  
				
		 	(B)	  	Compliance with Applicable Law	  	 	23	  
				
		 	(C)	  	NSF Certification	  	 	23	  
				
		 	(D)	  	City Access Rights	  	 	23	  
			
	SECTION 4.5.	 	PRIORITY CUSTOMERS OF THERMAL GAC REACTIVATION FACILITY	  	 	23	  
				
		 	(A)	  	Priority Customers	  	 	23	  
				
		 	(B)	  	Uncommitted Capacity	  	 	23	  
			
	SECTION 4.6.	 	THERMAL GAC REACTIVATION FACILITY EXPANSIONS	  	 	24	  
				
		 	(A)	  	Expansions Generally	  	 	24	  
				
		 	(B)	  	Consultations with the City	  	 	24	  
				
		 	(C)	  	Expansions Directed by the City	  	 	24	  

 ARTICLE V 
 PERFORMANCE OF THE GAC SERVICES 

 

									
	SECTION 5.1.	 	 RESPONSIBILITY FOR PERFORMANCE
	  	 	26	  
				
		 	 (A)
	  	 Reliance
	  	 	26	  
				
		 	 (B)
	  	 Responsibility for Employees, Agents and Subcontractors
	  	 	26	  

  
 iii

 TABLE OF CONTENTS 
 (continued) 
  

									
	 	 	 	  	 	  	Page	 
	 SECTION 5.2.
	 	COMPANY OBLIGATIONS GENERALLY	  	 	26	  
				
		 	(A)	  	Performance Standards	  	 	26	  
				
		 	(B)	  	Compliance with Applicable Law	  	 	26	  
				
		 	(C)	  	Affidavits and Chain of Custody	  	 	27	  
				
		 	(D)	  	Commencement of Work; Turn-Around Time	  	 	27	  
				
		 	(E)	  	GAC Reactivation Demand and Local Capacity	  	 	27	  
				
		 	(F)	  	Virgin GAC	  	 	27	  
				
		 	(G)	  	Warranties; Responsibility for Correction	  	 	28	  
				
		 	(H)	  	Liens	  	 	28	  
				
		 	(I)	  	Spills	  	 	28	  
				
		 	(J)	  	Title and Risk of Loss	  	 	28	  
				
		 	(K)	  	Damage to City Property and Private Property	  	 	29	  
			
	 SECTION 5.3.
	 	CITY GAC TESTING RIGHTS	  	 	29	  
			
	 SECTION 5.4.
	 	CITY OBLIGATIONS GENERALLY	  	 	29	  
				
		 	(A)	  	General City Obligations	  	 	29	  
				
		 	(B)	  	Exclusivity	  	 	30	  
				
		 	(C)	  	Scheduling of GAC Filter Exchanges	  	 	30	  
				
		 	(D)	  	Demand Forecasting	  	 	30	  
			
	 SECTION 5.5.
	 	DEMAND MANAGEMENT	  	 	30	  
				
		 	(A)	  	Commitment of Volume	  	 	30	  
				
		 	(B)	  	Volume Forecast	  	 	31	  
				
		 	(C)	  	Long-Term Planning Forecast	  	 	31	  
				
		 	(D)	  	Reconciling Actual Demand with Demand Forecast	  	 	31	  
			
	 SECTION 5.6.
	 	SERVICE COORDINATION AND CONTRACT ADMINISTRATION	  	 	33	  
				
		 	(A)	  	Company’s Service Manager	  	 	33	  
				
		 	(B)	  	Company’s Senior Corporate Representatives	  	 	33	  
				
		 	(C)	  	City Representative	  	 	33	  
				
		 	(D)	  	Communications and Meetings	  	 	33	  
			
	 SECTION 5.7.
	 	PERSONNEL	  	 	34	  
				
		 	(A)	  	Account Staffing	  	 	34	  
				
		 	(B)	  	Background Screening	  	 	34	  
				
		 	(C)	  	Water Treatment Facilities Access Requirements	  	 	34	  
				
		 	(D)	  	Legal Worker Requirements	  	 	34	  
				
		 	(E)	  	Affirmative Action	  	 	34	  

  
 iv 

 TABLE OF CONTENTS 
 (continued) 
  

									
		 		  		  	 	Page	  
	 SECTION 5.8.
	 	SUBCONTRACTORS	  	 	35	  
				
		 	(A)	  	Use Restricted	  	 	35	  
				
		 	(B)	  	Limited City Review and Approval of Permitted Subcontractors	  	 	35	  
				
		 	(C)	  	Subcontract Terms and Subcontractor Actions	  	 	35	  
				
		 	(D)	  	Payments to Subcontractors	  	 	36	  

 ARTICLE VI 
 PAYMENT FOR GAC SERVICES 

 

									
	 SECTION 6.1.
	 	UNIT PRICING	  	 	37	  
				
		 	(A)	  	Generally	  	 	37	  
				
		 	(B)	  	Unit Pricing for Interim GAC Services	  	 	37	  
				
		 	(C)	  	Unit Pricing for Local GAC Services	  	 	37	  
				
		 	(D)	  	Unit Pricing for Non-local GAC Services	  	 	37	  
				
		 	(E)	  	Fuel Surcharge Applicable to Non-local GAC Services	  	 	38	  
				
		 	(F)	  	Virgin GAC Required for City Operational GAC Losses	  	 	38	  
				
		 	(G)	  	Annual Adjustments to Unit Prices	  	 	38	  
			
	 SECTION 6.2.
	 	BILLING AND PAYMENT	  	 	38	  
				
		 	(A)	  	Company Invoicing	  	 	38	  
				
		 	(B)	  	Payment	  	 	39	  
				
		 	(C)	  	Payment Deduction Offset	  	 	39	  
			
	 SECTION 6.3.
	 	INVOICE AND PAYMENT DISPUTES	  	 	39	  
			
	 SECTION 6.4.
	 	FUND APPROPRIATION CONTINGENCY	  	 	39	  
			
	 SECTION 6.5.
	 	TAXES	  	 	40	  

 ARTICLE VII 
 BREACH, DEFAULT, REMEDIES AND TERMINATION 

 

									
	 SECTION 7.1.
	 	REMEDIES FOR BREACH	  	 	41	  
				
		 	(A)	  	Generally	  	 	41	  
				
		 	(B)	  	Strict Performance	  	 	41	  
				
		 	(C)	  	Right to Assurance	  	 	41	  

  
 v 

 TABLE OF CONTENTS 
 (continued) 
  

									
		 		  	 	Page	  
	 SECTION 7.2.
	 	COMPANY EVENTS OF DEFAULT	  	 	41	  
				
		 	(A)	  	Events of Default Not Requiring Previous Notice or Further Cure Opportunity for Termination	  	 	41	  
				
		 	(B)	  	Events of Default Requiring Previous Notice and Cure Opportunity for Termination	  	 	42	  
				
		 	(C)	  	Notice and Cure Opportunity	  	 	43	  
				
		 	(D)	  	Other Remedies Upon Company Event of Default	  	 	43	  
			
	 SECTION 7.3.
	 	PURCHASE OPTION IN THE EVENT OF COMPANY EVENT OF DEFAULT	  	 	44	  
				
		 	(A)	  	Option Exercisable Upon Company Event of Default	  	 	44	  
				
		 	(B)	  	Determination of Fair Market Value	  	 	44	  
				
		 	(C)	  	Appraisal Procedure	  	 	44	  
				
		 	(D)	  	Continuation of Service Pending Purchase and Completion of Facility	  	 	45	  
			
	 SECTION 7.4.
	 	LIMITATION OF LIABILITY	  	 	45	  
				
		 	(A)	  	No Limitation of Liability Associated with Actual Damages of the City	  	 	45	  
				
		 	(B)	  	Waiver of Consequential and Punitive Damages	  	 	45	  
			
	 SECTION 7.5.
	 	CANCELLATION FOR CONFLICT OF INTEREST	  	 	46	  
			
	 SECTION 7.6.
	 	CITY CONVENIENCE TERMINATION RIGHTS	  	 	46	  
			
	 SECTION 7.7.
	 	SURVIVAL OF CERTAIN PROVISIONS UPON TERMINATION	  	 	47	  

 ARTICLE VIII 
 DISPUTE RESOLUTION 

 

									
	 SECTION 8.1.
	 	DISPUTE RESOLUTION PROCEDURES	  	 	48	  
				
		 	(A)	  	Generally	  	 	48	  
				
		 	(B)	  	Informal Negotiations	  	 	48	  
				
		 	(C)	  	Rights to Request and Decline Non-Binding Mediation	  	 	48	  
				
		 	(D)	  	Procedure	  	 	48	  
				
		 	(E)	  	Non-Binding Effect	  	 	48	  
				
		 	(F)	  	Relation to Judicial Legal Proceedings	  	 	49	  
				
		 	(G)	  	Continuation During Disputes	  	 	49	  
			
	 SECTION 8.2.
	 	FORUM FOR LEGAL PROCEEDINGS	  	 	49	  

  
 vi 

 TABLE OF CONTENTS 
 (continued) 
  
  

					
	 	 	 	  	Page

 ARTICLE IX 
 INSURANCE, UNCONTROLLABLE CIRCUMSTANCES AND INDEMNIFICATION

  

									
	 SECTION 9.1.
	  	INSURANCE	  	 	50	  
				
		  	(A)	 	Company Insurance	  	 	50	  
				
		  	(B)	 	Insurers, Deductibles and City Rights	  	 	50	  
				
		  	(C)	 	Maintenance Of Insurance Coverage	  	 	50	  
				
		  	(D)	 	Insurance Does Not Limit Liability	  	 	50	  
			
	 SECTION 9.2.
	  	UNCONTROLLABLE CIRCUMSTANCES	  	 	50	  
				
		  	(A)	 	Extent of Relief Available to the Company	  	 	50	  
				
		  	(B)	 	Relief from Obligations	  	 	51	  
				
		  	(C)	 	Notice and Mitigation	  	 	51	  
				
		  	(D)	 	Conditions to Relief	  	 	52	  
				
		  	(E)	 	Acceptance of Relief Constitutes Release	  	 	52	  
			
	 SECTION 9.3.
	  	INDEMNIFICATION	  	 	52	  
				
		  	(A)	 	General Indemnity	  	 	52	  
				
		  	(B)	 	Patent, Copyright and Trademark Indemnity	  	 	53	  
				
		  	(C)	 	Other Indemnities	  	 	53	  

 ARTICLE X 
 MISCELLANEOUS 

 

									
	 SECTION 10.1.
	  	RELATIONSHIP OF THE PARTIES	  	 	54	  
			
	 SECTION 10.2.
	  	ASSIGNMENT AND DELEGATION	  	 	54	  
			
	 SECTION 10.3.
	  	BINDING EFFECT	  	 	54	  
			
	 SECTION 10.4.
	  	CONTRACT ADMINISTRATION	  	 	55	  
				
		  	(A)	 	Administrative Communications	  	 	55	  
				
		  	(B)	 	Contract Administration Memoranda	  	 	55	  
				
		  	(C)	 	Procedures	  	 	55	  
				
		  	(D)	 	Effect	  	 	55	  
			
	 SECTION 10.5.
	  	AMENDMENTS, CHANGES AND MODIFICATIONS	  	 	55	  
			
	 SECTION 10.6.
	  	AUDIT; BOOKS AND RECORDS	  	 	56	  
				
		  	(A)	 	Audit	  	 	56	  
				
		  	(B)	 	Books and Records	  	 	56	  
				
		  	(C)	 	Overpayment	  	 	56	  

  
 vii

 TABLE OF CONTENTS 
 (continued) 
  

									
		  		  		  	 	Page	  
			
	 SECTION 10.7.
	  	CONFIDENTIALITY AND DATA SECURITY	  	 	56	  
				
		  	(A)	  	Generally	  	 	57	  
				
		  	(B)	  	Securing Information	  	 	57	  
				
		  	(C)	  	Compromise of Confidentiality	  	 	57	  
				
		  	(D)	  	Indemnification	  	 	57	  
			
	 SECTION 10.8.
	  	SOLICITATION	  	 	57	  
				
		  	(A)	  	Covenant Against Contingent Fees	  	 	57	  
				
		  	(B)	  	Gratuities	  	 	58	  
			
	 SECTION 10.9.
	  	COMPLIANCE WITH MATERIAL AGREEMENTS	  	 	58	  
			
	 SECTION 10.10.
	  	CO-OP USE OF CONTRACT	  	 	58	  
			
	 SECTION 10.11.
	  	NOTICES	  	 	58	  
				
		  	(A)	  	Procedure	  	 	58	  
				
		  	(B)	  	City Notice Address	  	 	58	  
				
		  	(C)	  	Company Notice Address	  	 	59	  

  
 viii

 APPENDICES 
  

	1.	Thermal GAC Reactivation Facility Site and Design and Construction Plan 

  

	2.	Thermal GAC Reactivation Facility Completion Schedule 

  

	3.	Performance Standards 

  

	4.	Information Concerning Water Treatment Facilities 

  

	5.	Employee Background Screening 

  

	6.	Water Treatment Facilities Access Controls 

  

	7.	Approved Subcontractors 

  

	8.	Price Adjustments 

  

	9.	Insurance Requirements 

  

  
 ix 

 SERVICE CONTRACT 
 FOR THE 
 SUPPLY, PLACEMENT, REMOVAL AND THERMAL REACTIVATION 

OF GRANULAR ACTIVATED CARBON 
 THIS SERVICE CONTRACT FOR THE SUPPLY, PLACEMENT, REMOVAL AND THERMAL REACTIVATION OF GRANULAR ACTIVATED CARBON, hereinafter referred to as the “Service Contract”, is made and dated as
of                    , between the City of Phoenix, Arizona (the “City”) and Calgon Carbon Corporation, a corporation organized and
operating under the laws of the State of Delaware, having its principal offices at 500 Calgon Carbon Drive, Pittsburgh, Pennsylvania 15205, and authorized to do business in the State of Arizona (the “Company”). 

RECITALS 
 (1)
The City has determined that it is in its best interests to contract with a private entity on a long-term basis to provide for the supply, placement, removal and thermal reactivation of granular activated carbon at certain of its water treatment
facilities. 
 (2) The City has further determined that it is in its best interest to require the private entity service
provider to design, build, finance, own and operate a potable water granular activated carbon thermal reactivation facility located in Maricopa County, Arizona in connection with the furnishing of such services in order to provide for a long-term
local solution that offers economies of scale and reduces overall greenhouse gas emissions. 
 (3) The City issued a request for
qualifications in June 2010, advertised both on the City of Phoenix website and in local publications, from private entities qualified to provide for the supply, placement, removal and thermal reactivation of granular activated carbon and to design,
build, finance, own and operate a potable water granular activated carbon thermal reactivation facility located in Maricopa County, Arizona. 
 (4) Based on the evaluation of the statements of qualifications submitted in response to the request for qualifications, a selection panel made up of representatives of the City, as well as
representatives from the City of Scottsdale, Arizona and the City of Glendale, Arizona, selected two firms, including the Company, to participate in an interview process in connection with the request for qualifications. These two firms were
subsequently determined to be prequalified to participate in a request for proposals process by the selection panel in accordance with the prequalification criteria established by the request for qualifications. 

(5) In April 2011, the City issued a request for proposals (RFP 11-0022) to the two prequalified firms to provide the services
contemplated by this Service Contract. 

  
 1 

 (6) In May 2011, proposals were submitted from both prequalified firms and each was deemed
responsive to the requirements of the RFP. 
 (7) Based on the evaluation factors and selection criteria set forth in the RFP
and following the review and selection process identified in the RFP, the City determined that the Company’s proposal was the most advantageous to the City and that it would be in the City’s best interest to initiate negotiations with the
Company. 
 (8) In June 2011, negotiations were initiated with the Company, which negotiations have concluded with the agreement
of the parties hereto that this Service Contract will constitute the fully integrated and total agreement between the Company and the City with respect to the granular activated carbon thermal reactivation services to be provided by the Company.

 (9) The City desires to receive, and the Company desires to provide the granular activated carbon thermal reactivation
services under the terms of this Service Contract. 
 In consideration of the mutual covenants herein contained, the parties
hereto, intending to be legally bound, agree as follows: 

  
 2 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 ARTICLE I 
 DEFINITIONS AND INTERPRETATION 
 SECTION 1.1. DEFINITIONS. For the purposes
of this Service Contract, the following words and terms shall have the respective meanings set forth in this Section. 

“Additional GAC Price” has the meaning specified in subsection 6.1(F). 

“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. 
 “Amendment” means a written
amendment to this Service Contract pursuant to Section 10.5. 
 “Appendix” means any of the Appendices and, as
applicable, any attachments thereto, that are appended to this Service Contract and identified as such in the Table of Contents. 

“Applicable Law” means (1) any federal, State or local law, code, regulation, consent order or agreement; (2) any
formally adopted and generally applicable rule, requirement, determination, standard, policy, implementation schedule or 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 generally applicable; and (4) any Governmental Approval, in each case having the force of law and applicable from time to time to:
(a) the siting, permitting, design, acquisition, construction, equipping, start-up, testing, operation, maintenance, repair, replacement or management of granular activated carbon thermal regeneration facilities; (b) the supply, placement,
removal and thermal reactivation of granular activated carbon; (c) the transfer, handling, and transportation or disposal of granular activated carbon; and (d) any other matter or transaction contemplated hereby (including any of the
foregoing pertaining to health, safety, fire, environmental protection and building codes). 
 “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 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. 

“Change in Law” means any of the following acts, events or circumstances to the extent that compliance with the change
materially expands the scope, interferes with, delays or increases the cost of performing the GAC Services: 

  
 3 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 (1) except as provided below with respect to the exclusions from the definition of “Change
in Law”, the adoption, amendment, promulgation, issuance, modification, repeal or written change in any Applicable Law, or the administrative or judicial interpretation thereof, on or after the Contract Date, unless such Applicable Law was on
or prior to the Contract Date 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; or 

(2) 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 the Contract Date enforcing any Change in Law described in subsection (1) of this definition to the extent such order or judgment is not the result of intentional or negligent action, error
or omission or lack of reasonable diligence of the Company. 
 It is specifically understood, however, that none of the following
shall constitute a “Change in Law”: 
 (a) 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 a term, condition or requirement in connection with the issuance, renewal or failure of issuance or renewal of any Governmental Approval, to the
extent any such occurrence is consistent with Applicable Law as of the Contract Date; 
 (b) any Change in Law relating to Taxes
associated with the Thermal GAC Reactivation Facility, the income of the Company or otherwise not directly related to the performance of the GAC Services; 
 (c) a change in the nature or severity of the actions typically taken by a Governmental Body to enforce compliance with Applicable Law that was in effect as of the Contract Date; 

(d) any increase in any fines or penalties provided for under Applicable Law in effect as of the Contract Date; or 

(e) 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 Performance Standards in effect as of the Contract Date. 
 “City” means the City of Phoenix,
Arizona. 
 “City Fault” means any breach (including the untruth or breach at the time made of any City representation
or warranty herein set forth), failure, non-performance or non-compliance by the City under this Service Contract 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 Company’s rights, obligations or ability or costs to perform under this Service Contract. 

  
 4 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 “City Indemnitee” has the meaning set forth in Section 9.3. 

“City Operational GAC Loss” means (a) GAC loss occurring between the completion of any GAC Filter Exchange and the
commencement of any subsequent GAC Filter Exchange; (b) degradation of the GAC during operation of the filter, such as caused by build up of calcium carbonate or other minerals on the carbon which impact the ability of the GAC to be reactivated
such that yield losses are higher than the 5% to 10% “normal” and require the supply of additional Virgin GAC; or (c) higher than the 5% to 10% “normal” Virgin GAC make-up rates incurred due to the lower than normal yield
rates resulting from the use by the City of Virgin GAC supplied by another vendor. 
 “City Representative” has the
meaning specified in subsection 5.6(C). 
 “Commitment of Volume” has the meaning specified in subsection 5.5(A).

 “Company” means Calgon Carbon Corporation, a corporation organized and operating under the laws of the State of
Delaware, having its principal offices at 500 Calgon Carbon Drive, Pittsburgh, Pennsylvania 15205, and authorized to do business in the State of Arizona. 
 “Company Event of Default” means those items specified in Section 7.2. 
 “Company Fault” means any breach (including the untruth or breach of any 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 City’s rights, obligations or ability or costs to
perform under this Service Contract. 
 “Contract Administration Memorandum” has the meaning specified in
Section 10.4. 
 “Contract Date” means the date this Service Contract is fully executed and delivered by the
parties hereto. 
 “Contract Year” means the City’s fiscal year commencing on July 1 in any year and ending
on June 30 of the following calendar year; provided, however, that the first Contract Year shall commence on the Contract Date and shall end on the following June 30, and the last Contract Year shall commence on July 1 prior to the
date this Service Contract expires or is terminated, whichever is appropriate, and shall end on the date of termination. Any computation made on the basis of a Contract Year shall be adjusted on a pro rata basis to take into account any Contract
Year of less than 365 or 366 days, whichever is applicable. 

  
 5 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 “Demand Forecast” has the meaning specified in subsection 5.4(D). 

“Department Director” means the City’s Water Services Department Director, the contracting authority for the City for
purposes of this Service Contract, authorized to sign this Service Contract and Amendments on behalf of the City. 
 “Design
and Construction Plan” has the meaning specified in subsection 4.2(A). 
 “Extension Period” has the meaning
specified in subsection 4.3(E). 
 “Facility Completion” means the completion by the Company of the site acquisition,
financing, permitting, design, construction, commissioning and testing of the Thermal GAC Reactivation Facility in accordance with the requirements set forth in Section 4.3. 

“Facility Completion Date” means the date on which Facility Completion has occurred and the Company is ready to commence Local
GAC Services. 
 “Fees and Costs” means reasonable fees and expenses of employees, attorneys, architects, engineers,
expert witnesses, contractors, consultants and other persons, and costs of transcripts, printing of briefs and records on appeal, copying and other reimbursed expenses, and expenses reasonably incurred in connection with investigating, preparing
for, defending or otherwise appropriately responding to any Legal Proceeding. 
 “GAC” means granular activated carbon.

 “GAC Filter Exchange” means the performance of all GAC Services necessary to provide for the thermal reactivation of
the GAC of a single GAC filter at the Water Treatment Facilities. 
 “GAC Services” means everything required to be
furnished and done for and relating to the supply, transportation, placement, removal and thermal reactivation of GAC by the Company for the City pursuant to this Service Contract, including the Interim GAC Services and the Local GAC Services.

 “Governmental Approvals” means all orders of approval, permits, licenses, authorizations, consents, certifications,
exemptions, rulings, entitlements and approvals issued by a Governmental Body of whatever kind and however described which are required under Applicable Law to be obtained or maintained by any person with respect to the Thermal GAC Reactivation
Facility or the performance of the GAC Services. 
 “Governmental Body” means any federal, State, regional or local
legislative, executive, judicial or other governmental board, agency, authority, commission, administration, court or other body, or any official thereof having jurisdiction. 

  
 6 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 “Initial Term” has the meaning set forth in Section 3.1. 

“Interim GAC Services” means the GAC Services to be provided under this Service Contract by the Company prior to the Scheduled
Facility Completion Date, as more particularly defined in subsection 4.2(D). 
 “Interim Service Price” has the meaning
specified in subsection 6.1(B). 
 “Lake Pleasant WTP” means the City’s water treatment plant, which is located at
37000 North New River Road, Phoenix, Arizona and is excluded from the definition of Water Treatment Facilities hereunder. 

“Legal Proceeding” means every action, suit, litigation, arbitration, administrative proceeding, and other legal or equitable
proceeding having a material bearing upon this Service Contract or the performances of the parties hereunder, and all appeals therefrom. 
 “Local GAC Services” means the GAC Services to be provided under this Service Contract by the Company commencing on the earlier to occur of the Facility Completion Date or the Scheduled Facility
Completion Date and for the remainder of the Term. 
 “Local Service Price” has the meaning specified in subsection
6.1(C). 
 “Long Term Planning Forecast” has the meaning specified in subsection 5.5(C). 

“Loss-and-Expense” means, and is limited to, any and all actual loss, liability, forfeiture, obligation, damage, fine, penalty,
judgment, deposit, charge, tax, cost or expense relating to third-party claims for which the Company is obligated to indemnify the City Indemnitees hereunder, including all Fees and Costs. 

“Mediator” means any person serving as a third-party mediator of disputes hereunder pursuant to Section 8.1. 

“Non-Binding Mediation” means the voluntary system of dispute resolution through third-party mediation established by
Section 8.1 for the resolution of any dispute arising under this Service Contract. 
 “Non-Local Fuel Surcharge”
has the meaning specified in subsection 6.1(E). 
 “Non-Local Service Price” has the meaning specified in subsection
6.1(D). 

  
 7 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 “NSF” means the NSF Water Division of NSF International, an independent, not-for-profit organization
that provides standards development, product certification, auditing, education and risk management for public health and the environment, including any successor division or organization. 

“Performance Standards” means the requirements and standards for the performance of the GAC Services by the Company, which are
set forth in Appendix 3. 
 “Prime Rate” means the prime rate as published in The Wall Street Journal Western
Edition, or a mutually agreeable alternative source of the prime rate for the United States if it is no longer published in The Wall Street Journal Western Edition or the method of computation thereof is substantially modified. 

“Renewal Term” has the meaning specified in Section 3.1. 

“Required Insurance” has the meaning specified in Section 9.1. 

“RFP” means the Request for Proposals for Granular Activated Carbon Reactivation Services, RFP 11-0022, issued by the City in
April 2011. 
 “Scheduled Facility Completion Date” means the date that is 480 days following the Contract Date, as
such date may be adjusted due to the occurrence of Uncontrollable Circumstances. 
 “Senior Corporate Representative”
has the meaning specified in subsection 5.6(B). 
 “Service Contract” means this Service Contract for the Supply,
Placement, Removal and Reactivation of Thermal Granular Activated Carbon between the City and the Company, including the Appendices, as the same may be amended or modified from time to time in accordance herewith. 

“Service Manager” has the meaning specified in subsection 5.6(A). 

“State” means the State of Arizona. 
 “Subcontract” means any contract entered into by the Company or a Subcontractor of the Company of any tier, with one or more persons in connection with the carrying out of the Company’s
obligations under this Service Contract, whether for the furnishing of labor, materials, equipment, supplies, services (including professional design services) or otherwise, excluding contracts related to the construction and commissioning of the
GAC Thermal Reactivation Facility. 
 “Subcontractor” means any person, other than the Company, that enters into a
Subcontract, excluding any person entering into a Subcontract related to the construction and commissioning of the GAC Thermal Reactivation Facility. 

  
 8 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 “Tax” means any tax, fee, levy, duty, impost, charge, surcharge, assessment or withholding, or any
payment-in-lieu thereof, and any related interest, penalty or addition to tax. 
 “Term” means the Initial Term and any
Renewal Term. 
 “Thermal GAC Reactivation Facility” means the potable water thermal GAC reactivation facility to be
designed, constructed, financed, owned, operated and maintained by the Company in Maricopa County, Arizona in order to perform the Local GAC Services in accordance with this Service Contract, including any expansions or capital modification made
thereto. 
 “Thermal GAC Reactivation Facility Site” means the parcel of real property identified in Appendix 1 on
which the Thermal GAC Reactivation Facility is to be constructed, operated and maintained by the Company. 
 “Uncommitted
Capacity” has the meaning specified in subsection 4.5(B). 
 “Uncontrollable Circumstance” means any act, event or
condition that (1) is beyond the reasonable control of the party relying on it as a justification for not performing an obligation or complying with any condition required of the party under this Service Contract, and (2) materially
expands the scope, interferes with, delays or increases the cost of performing the party’s obligations under this Service Contract, to the extent that such act, event or condition is not the result of the willful or negligent act, error or
omission, failure to exercise reasonable diligence, or breach of this Service Contract on the part of the party claiming the occurrence of an Uncontrollable Circumstance. 
 (a) Inclusions. Subject to the foregoing, Uncontrollable Circumstances may include the following: 
 (i) a Change in Law, except as otherwise provided in the definition thereof; 
 (ii) naturally occurring events, such as unusually severe and abnormal climactic conditions, landslides, underground movement, earthquakes, fires, tornadoes, hurricanes, floods, lightning, epidemics and
other acts of God; 
 (iii) explosion, sabotage or similar occurrence, acts of a declared public enemy,
terrorism, extortion, war, blockade or insurrection, riot or civil disturbance; 
 (iv) labor disputes, strikes,
slowdowns, stoppages, boycotts or disruption (1) affecting a specific trade on a national or regional level, or (2) involving City employees at the Water Treatment Facilities, each to the extent not caused by the improper acts or omissions
of the Company or any Subcontractor; 

  
 9 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 (v) the failure of any Subcontractor (other than the Company or any Affiliate), to furnish
services, materials, chemicals or equipment on the dates agreed to, but only if such failure is the result of an event which would constitute an Uncontrollable Circumstance if it affected the Company directly, and the Company is not able to timely
obtain substitutes after exercising all reasonable efforts; 
 (vi) with respect to the Company, any City Fault;

 (vii) with respect to the City, any Company Fault; or 

(viii) any other act, event or circumstance specifically identified as providing a basis for Uncontrollable Circumstance
relief hereunder. 
 (b) Exclusions. It is specifically understood that, without limitation, none of the following acts,
events or circumstances shall constitute Uncontrollable Circumstances: 
 (i) any act, event or circumstance that
would not have occurred if the affected party had complied with its obligations hereunder; 
 (ii) changes in
interest rates, inflation rates, wage rates, insurance costs, commodity prices, currency values, labor availability, exchange rates or other economic conditions; 

(iii) any failure, inability or delay by the Company for any reason to provide for the financing of the Thermal GAC
Reactivation Facility in accordance with the terms and conditions of this Service Contract; 
 (iv) changes in
the financial condition of the City, the Company, or their Affiliates or Subcontractors affecting the ability to perform their respective obligations; 
 (v) the consequences of error, neglect or omissions by the Company, any Subcontractor, any of their Affiliates or any other person in connection with the performance of the Company’s obligations
under this Service Contract; 
 (vi) strikes, labor disputes, work slowdowns, work stoppages, boycotts or other
similar labor disruptions, unless such strikes, disputes, slowdowns, stoppages, boycotts or disruptions (1) affect a specific trade on a national or regional level, or (2) involve City employees at the Water Treatment Facilities, each to
the extent not caused by the improper acts or omissions of the Company or any Subcontractor; 
 (vii) weather
conditions that do not constitute unusually severe and abnormal climactic conditions; 

  
 10 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 (viii) mechanical failure of any equipment of the Company to the extent not resulting from a
condition that is listed in the “Inclusions” section of this definition; or 
 (ix) failure of the
Company to secure patents, copyrights or any other intellectual property right which it deems necessary for the performance of its obligations under this Service Contract. 
 “Virgin GAC” means newly produced GAC meeting the quality, size, manufacturing and other requirements specified in Appendix 3. 

“Volume Forecast” has the meaning specified in subsection 5.5(B). 

“Water Treatment Facilities” means the City’s water treatment plants and related assets and facilities, as specifically
identified in Appendix 4. The City’s Lake Pleasant WTP is specifically excluded from this definition. 
 “WTP”
means water treatment plant. 
 SECTION 1.2. INTERPRETATION. In this Service Contract, unless the context otherwise
requires: 
 (A) References Hereto. The terms “hereby”, “hereof”, “herein”,
“hereunder” and any similar terms refer to this Service Contract, and the term “hereafter” means after the date of execution and delivery of this Service Contract. 

(B) Gender and Plurality. Words of the masculine gender mean and include correlative words of the feminine and neuter genders and
words importing the singular number mean and include the plural number and vice versa. 
 (C) Persons. Words importing
persons include firms, companies, associations, general partnerships, limited partnerships, trusts, business trusts, corporations and other legal entities, including public bodies, as well as individuals. 

(D) Headings. The table of contents and any headings preceding the text of the Articles, Sections and subsections of this Service
Contract shall be solely for convenience of reference and shall not constitute a part of this Service Contract, nor shall they affect its meaning, construction or effect. 
 (E) Entire Agreement. This Service Contract constitutes the entire agreement between the parties hereto with respect to the transactions contemplated herein. Without limiting the generality of the
foregoing, this Service Contract shall completely and fully supersede all other understandings and agreements among the parties with respect to such transactions, including those contained in the RFP, the proposal of the Company submitted in
response thereto, and any amendments or supplements to any of the foregoing. 

  
 11 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 (F) Parole Evidence. This Service Contract is intended as a complete and exclusive statement of the
terms of this Service Contract. No course of prior dealings between the parties and no usage in the trade shall be relevant to supplement or explain any term used in this Service Contract. Acceptance or acquiescence in a course of performance
rendered under this Service Contract shall not be relevant to determine the meaning of this Service Contract even though the accepting or acquiescing party has knowledge of the nature of the performance and opportunity to object. 

(G) Causing Performance. A party shall itself perform, or shall cause to be performed, subject to any limitations specifically
imposed hereby with respect to Subcontractors or otherwise, the obligations affirmatively undertaken by such party under this Service Contract. 
 (H) Party Bearing Cost of Performance. All obligations undertaken by each party hereto shall be performed at the cost of the party undertaking the obligation or responsibility, unless the other
party has explicitly agreed herein to bear all or a portion of the cost either directly or by reimbursement to the other party. 

(I) Applicability, Stringency and Consistency of Performance Standards. The Company shall be obligated to comply only with those
Performance Standards which are applicable in any particular case. Where more than one Performance Standard applies to any particular performance obligation of the Company hereunder, each such applicable Performance Standard shall be complied with.
In the event there are different levels of stringency among such applicable Performance Standards, the most stringent of the applicable Performance Standards shall govern. In the event of any inconsistency among the Performance Standards, the
City’s determination as to the applicable standard shall be binding. 
 (J) Counterparts. This Service Contract may
be executed in any number of original counterparts. All such counterparts shall constitute but one and the same Service Contract. 
 (K) Severability. If any clause, provision, subsection, Section or Article of this Service Contract shall be ruled invalid by any court of competent jurisdiction, the invalidity of any such
clause, provision, subsection, Section or Article shall not affect any of the remaining provisions hereof, and this Service Contract shall be construed and enforced as if such invalid portion did not exist. 

(L) No Third-Party Rights. This Service Contract is exclusively for the benefit of the City and the Company and shall not provide
any third parties (with the sole exception of the rights of any third-party City Indemnitee to the extent provided in Section 9.3) with any remedy, claim, liability, reimbursement, cause of action or other rights. 

(M) Approvals. Except as otherwise specifically provided in this Service Contract, all approvals, consents and acceptances required
to be given or made by any party hereto shall be at the sole discretion of the party whose approval, consent or acceptance is required. 

  
 12 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal
 Reactivation of Granular Activated

Carbon
	  	Article I – Definitions and Interpretation

  
 (N) Interpolation. If any calculation hereunder is to be made by reference to a chart, index or table of
values, and the reference calculation falls between two stated values, the calculation shall be made on the basis of linear interpolation. 
 (O) References to Including. All references to “including” herein shall be interpreted as meaning “including without limitation”. 

(P) References to Days. Unless otherwise specified as “business days”, all references to days herein are references to
calendar days. References to “business days” herein shall include Monday through Friday, excluding City holidays. 

(Q) Applicable Law. This Service Contract shall be governed by and construed in accordance with the applicable laws of the State of
Arizona. 
 (R) References to Applicable Law. All references to Applicable Law herein shall be construed as including all
Applicable Law provisions consolidating, amending or replacing the Applicable Law referred to. To the extent any such Applicable Law is amended or replaced over the course of performance of this Service Contract, the Company shall have the right to
assert a claim for Change in Law relief as and to the extent provided in this Service Contract. 
 (S) Implied Contract
Terms. Each and every provision of law and any clause required by law to be in this Service Contract shall be read and enforced as though it were included herein, and if through mistake or otherwise any such provision is not inserted, or is not
correctly inserted, then upon the application of either party this Service Contract shall forthwith be physically amended to make such insertion or correction. 
 (T) Defined Terms. The definitions set forth in Section 1.1 shall control in the event of any conflict with any definitions used in the recitals hereto. 

  
 13 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article II – Representations and Warranties

  
 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES 
 SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF
THE CITY. The City represents and warrants that: 
 (A) Existence and Powers. The City is a municipal corporation
organized and existing under and by virtue of the Constitution and the laws of the State, with full legal right, power and authority to enter into and to perform its obligations under this Service Contract. 

(B) Due Authorization. This Service Contract has been duly authorized, executed and delivered by all necessary action of the City.

 SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In addition to any other representations and warranties
made by the Company in this Service Contract, the Company represents and warrants that: 
 (A) Existence and Powers. The
Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the authority to do business in the State and in any other state in which it conducts its activities, with the full legal
right, power and authority to enter into and perform its obligations under this Service Contract. 
 (B) Due Authorization and
Binding Obligation. This Service Contract has been duly authorized, executed and delivered by all necessary action of the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms, except to the extent that its enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights from time to time in effect and equitable principles of general application. 

(C) No Conflict. To the best of its knowledge, neither the execution nor delivery by the Company of this Service Contract, nor the
performance by the Company of its obligations in connection with the transactions contemplated hereby, or the fulfillment by the Company of the terms or conditions hereof: (a) conflicts with, violates or results in a breach of any constitution,
law, governmental regulation, by-laws or certificates of incorporation applicable to the Company; or (b) conflicts with, violates or results in a breach of any order, judgment or decree, or any contract, agreement or instrument to which the
Company or any of its Affiliates is a party or by which the Company or any of its Affiliates or any of its properties or assets are bound, or constitutes a default under any of the foregoing. 

(D) No Approvals Required. No approval, authorization, order or consent of, or declaration, registration or filing with, any
Governmental Body is required for the valid execution and delivery of this Service Contract by the Company except as such have been duly obtained or made. 

  
 14 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article II – Representations and Warranties

  
 (E) No Litigation Affecting the Company. Except as disclosed in writing to the City, to the best of its
knowledge, there is no Legal Proceeding, at law or in equity, before or by any court or Governmental Body pending or, to the best of the Company’s knowledge, overtly threatened or publicly announced against the Company or any of its Affiliates,
in which an unfavorable decision, ruling or finding could reasonably be expected to have a material and adverse effect on the execution and delivery of this Service Contract by the Company or the validity, legality or enforceability of this Service
Contract against the Company, or any other agreement or instrument entered into by the Company in connection with the transactions contemplated hereby, or on the ability of the Company to perform its obligations hereunder or under any such other
agreement or instrument. 
 (F) Company Ownership Interest in Thermal GAC Reactivation Facility Site. Prior to the
execution of this Service Contract, the Company obtained the right to purchase the Thermal GAC Reactivation Facility Site in fee simple, subject only to such easements and exceptions to title as have been disclosed to the City in writing. The
Company’s purchase option shall be exercised either on or before execution of this Service Contract. 
 (G) Company
Financing of the Thermal GAC Reactivation Facility. The Company will provide for the financing of the Company’s purchase of the Thermal GAC Reactivation Facility Site and the design and construction of the Thermal GAC Reactivation Facility
through its own financial resources or an existing Company line of credit. The Company represents that its board of directors has authorized such Company financing. 
 (H) Intellectual Property. The Company owns, or has express rights to use, all patents, copyrights and other intellectual property rights necessary for the performance of its obligations under this
Service Contract without any known material conflict with the rights of others. 
 (I) Information Supplied by the
Company. The information supplied and representations and warranties made by the Company in all submittals made to the City with respect to the Company (and to the best of its knowledge after due inquiry, all information supplied in such
submittals with respect to any Subcontractor) are true, correct and complete in all material respects. 
 (J) No
Gratuities. The Company has not directly or indirectly offered or given any gratuities (in the form of entertainment, gifts, or otherwise) to any City Indemnitee with a view toward securing this Service Contract or securing favorable treatment
with respect to any determinations concerning the performance of this Service Contract. 

  
 15 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article II – Representations and Warranties

  
 (K) Claims and Demands. Except as disclosed in writing to the City, to the best of its knowledge, there
are no claims or demands based in environmental, contract or tort law pending or threatened against the Company that would have a material and adverse effect on the ability of the Company to perform its obligations under this Service Contract.

 (L) Compliance with Applicable Law Generally. The Company is in compliance in all material respects with Applicable Law
pertaining to the Company’s business and services. 

  
 16 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation
 of Granular Activated Carbon

 
	  	Article III – Term

  

ARTICLE III 
 TERM

 SECTION 3.1. EFFECTIVE DATE AND INITIAL TERM. This Service Contract shall become effective on the Contract Date, and
shall continue in effect for ten years following the Contract Date (the “Initial Term”) or, if renewed as provided in Section 3.2, until the last day of any renewal term (the “Renewal Term”; the Initial Term and any Renewal
Term being referred to herein as the “Term”), unless earlier terminated pursuant to the termination provisions of this Service Contract, in which event the Term shall be deemed to have ended as of the date of such termination. All rights,
obligations and liabilities of the parties hereto shall commence on the Contract Date, subject to the terms and conditions hereof. At the end of the Term, all other obligations of the parties hereunder shall terminate, except as provided in
Section 7.7. 
 SECTION 3.2. RENEWAL AND EXTENSION OPTION. This Service Contract may be renewed and extended for
additional terms of five years (subject to convenience termination without cost to the City at any time during any Renewal Term upon 60 days’ written notice to the Company) at the election of the City in its sole discretion. Except as provided
in this Section with respect to the City’s convenience termination rights during any Renewal Term, the terms and conditions governing the Renewal Term shall be the same terms and conditions governing the Initial Term. The Company shall give the
City notice of the approaching expiration of the Initial Term or any Renewal Term, as applicable, no later than 180 days prior to such expiration. The City, not later than 120 days prior to the expiration of the Initial Term or any Renewal Term, as
applicable, shall give the Company written notice of its intent whether or not to exercise its renewal option. 

  
 17 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article IV – Thermal GAC Reactivation Facility

  
 ARTICLE IV 
 THERMAL GAC REACTIVATION FACILITY 
 SECTION 4.1. SITING, PERMITTING, FINANCING
AND OWNERSHIP OF THERMAL GAC REACTIVATION FACILITY. 
 (A) Thermal GAC Reactivation Facility Site. The Company shall
exercise its right to purchase the Thermal GAC Reactivation Facility Site either on or before execution of this Service Contract. The Company represents and warrants that, prior to the Contract Date, the Company’s agents and representatives
performed all necessary due diligence regarding the Thermal GAC Reactivation Facility Site, its physical condition relevant to the obligations of the Company pursuant to this Service Contract, including surface conditions, soil conditions, roads,
utilities, and topographical conditions; that the Company is familiar with all local and other conditions which may be material to the Company’s performance of its obligations under this Service Contract (including transportation; seasons and
climate; access, availability, disposal, handling and storage of materials and equipment; and availability and quality of labor and utilities); and has made all other site investigations that it deems necessary to make a determination as to the
suitability of the Thermal GAC Reactivation Facility Site; and that, based on the foregoing, the Thermal GAC Reactivation Facility Site constitutes an acceptable and suitable site for the construction and operation of the Thermal GAC Reactivation
Facility in accordance with this Service Contract. 
 (B) Permitting. The Company shall be fully responsible for obtaining
and maintaining all Governmental Approvals required for the construction and continued operation of the Thermal GAC Reactivation Facility. Without limiting the generality of the foregoing, the Company shall prepare all filings, applications and
reports and take all other action necessary to obtain and maintain, and shall obtain and maintain, all Governmental Approvals necessary to commence, continue and complete the work necessary to achieve Facility Completion and to provide the GAC
Services in accordance with this Service Contract. The Company explicitly assumes the risk of obtaining and maintaining all such Governmental Approvals and all costs associated therewith, including the risk of delay, non-issuance or the imposition
of any term or condition in connection therewith by any Governmental Body. The Company shall be afforded Uncontrollable Circumstance relief with respect to the assumption of such risks only in the event of a Change in Law. 

(C) Financing. The Company shall be fully responsible for the financing of the Company’s purchase of the Thermal GAC
Reactivation Facility Site and the design, construction and continued operations of the Thermal GAC Reactivation Facility, including all work necessary to achieve Facility Completion. The Company covenants that it will provide for such financing
through its own resources or an existing Company line of credit and not through project financing. In no event shall any Company financing associated with the Thermal GAC Reactivation Facility

  
 18 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article IV – Thermal GAC Reactivation Facility

  
 
create, grant or in any way establish any pledge, mortgage, lien, security interest or other encumbrance on this Service Contract, the Thermal GAC Reactivation Facility Site or the Thermal GAC
Reactivation Facility; provided, however, that the Company may pledge the Thermal GAC Reactivation Facility as a component of the Company’s overall collateral for line of credit financing insofar as the financial institution providing the
Company line of credit requires that all Company assets serve as collateral for the Company line of credit. 
 (D)
Ownership. The Company shall be and shall remain the owner of the Thermal GAC Reactivation Facility Site and the Thermal GAC Reactivation Facility both during and after the Term of this Service Contract, subject to the provision of
Section 10.2, regarding assignment, unless the City exercises its option to purchase the Thermal GAC Reactivation Facility and Thermal GAC Reactivation Facility Site upon a Company Event of Default pursuant to Sections 4.3(E), 7.2 A(1), 7.2
A(2) or 7.3. The City accepts no responsibility for the Company’s actions or omissions with respect to the ownership of the Thermal GAC Reactivation Facility Site or the ownership, design, construction or continuing operations and maintenance
of the Thermal GAC Reactivation Facility. 
 (E) No City Payment Responsibility for Thermal GAC Reactivation Facility. The
City shall have no payment responsibility to the Company or to any third party with respect to the Company’s purchase of the Thermal GAC Reactivation Facility Site or the design, construction, financing, permitting, operation or maintenance of
the Thermal GAC Reactivation Facility. The Company acknowledges and agrees that the Company is solely responsible for all costs associated with such activities, including all costs necessary to achieve Facility Completion and notwithstanding any
cost overruns the Company may incur. The Company shall finance and pay for all such costs without reimbursement from or other claim upon the City. The City’s sole payment responsibility to the Company under this Service Contract shall be to pay
the Company for the performance of the GAC Services on a unit price basis in accordance with and subject to the terms and conditions set forth in Article VI hereof. 
 SECTION 4.2. DESIGN AND CONSTRUCTION OF THERMAL GAC REACTIVATION FACILITY. 

(A) Generally. The Company shall design and construct the Thermal GAC Reactivation Facility on the Thermal GAC Reactivation
Facility Site in accordance with the design and construction plan set forth in Appendix 1 (the “Design and Construction Plan”) and in compliance with all requirements of Applicable Law. The provisions of Section 5.8 shall be applicable to
any Subcontractors performing design or construction services associated with Facility Completion. 
 (B) Reports to the
City. Commencing with the first month following the Contract Date and continuing until the achievement of Facility Completion, the Company shall submit to the City a monthly progress schedule and report. Each such monthly progress schedule and
report shall provide an updated critical path 

  
 19 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article IV – Thermal GAC Reactivation Facility

  
 
completion schedule and shall summarize the status of all work necessary to achieve Facility Completion, including the status of the Company’s efforts with respect to permitting, design,
construction and testing of the Thermal GAC Reactivation Facility. The Company shall provide each such monthly progress schedule and report to the City no later than five days prior to each monthly meeting to be held between the parties pursuant to
subsection 5.6(D). The Company agrees that the Company’s submission of the monthly progress schedule and report (or any revised progress schedule and report) is for the City’s information only and shall not limit or otherwise affect the
Company’s obligations to achieve Facility Completion by the Scheduled Facility Completion Date. The City’s acceptance of the monthly progress schedule and report (or any revised progress schedule and report) shall not bind the City in any
manner. In addition to such monthly progress schedule and reports, the Company shall provide to the City, promptly following the receipt thereof, copies of any notice of default, breach or non-compliance received under or in connection with any
Governmental Approval pertaining to the Thermal GAC Reactivation Facility 
 (C) City Access and Review Rights. The City
Representative may at any reasonable time and with reasonable advance notice conduct such on-site observations and inspections of the Thermal GAC Reactivation Facility Site and the Thermal GAC Reactivation Facility as the City deems necessary to
ascertain the progress of the work necessary to achieve Facility Completion. During any such observation or inspection, the City Representative shall comply with all safety and other rules and regulations applicable to presence upon the Thermal GAC
Reactivation Facility Site and shall in no material way interfere with the performance of any work being performed by the Company or any of its Subcontractors. In addition, the Company shall provide the City with reasonable advance notice of
regulatory agency approvals, testing or inspections of the Thermal GAC Reactivation Facility, with the understanding that such testing during construction will happen frequently and at times on short notice, and the City Representative shall have
the right to attend such regulatory agency testing and inspections. 
 (D) Performance of Interim GAC Services. Prior to
the earlier to occur of the Facility Completion Date or the Scheduled Facility Completion Date, the Company shall meet the City’s GAC reactivation demand in accordance with Article V by providing for GAC thermal reactivation services at the
Company GAC thermal reactivation facilities identified in Appendix 1 (the “Interim GAC Services”). The Company accepts the risk that the Company can perform the Interim GAC Services to meet the City’s reactivation demand in accordance
with Article V while performing all work necessary to achieve Facility Completion pursuant to this Article. The Company shall maintain sufficient capacity at the Company GAC thermal reactivation facilities identified in Appendix 1 to perform the
Interim GAC Services in order to meet the City’s demand for thermal GAC reactivation services at all times prior to Facility Completion. 
 SECTION 4.3. FACILITY COMPLETION. 

  
 20 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article IV – Thermal GAC Reactivation Facility

  
 (A) Schedule for Completion. The Company’s initial critical path completion schedule for the
achievement of Facility Completion is set forth in Appendix 2. The Company shall update, maintain and revise such critical path completion schedule for the City’s review pursuant to subsection 4.2(B). In order to be entitled to an adjustment to
the Scheduled Facility Completion Date or to the Extension Period, the Company must demonstrate the occurrence of an Uncontrollable Circumstance in accordance with Section 9.2 and the impact of such Uncontrollable Circumstance on the
Company’s critical path completion schedule, as updated, maintained and revised by the Company in accordance with subsection 4.2(B). In no event shall the Company be entitled to any such adjustment for delays caused by Company Fault or
otherwise not attributable to an Uncontrollable Circumstance impacting the Company’s critical path completion schedule. 

(B) Conditions to Facility Completion. Facility Completion shall be deemed to have occurred when all of the following conditions
have been satisfied: 
 (1) the Thermal GAC Reactivation Facility is operational and in compliance with the
Design and Construction Plan; 
 (2) All applicable Governmental Approvals required under Applicable Law that are
necessary for the continued routine operation of the Thermal GAC Reactivation Facility shall have been duly obtained and shall be in full force and effect; 
 (3) The Thermal GAC Reactivation Facility has achieved NSF certification; and 
 (4) The Company has submitted written certification to the City that all of the foregoing conditions have been satisfied and the City has approved the Company’s certification, which approval shall
not be unreasonably withheld or delayed and shall be effective as of date of the Company’s certification. 
 (C) Facility
Completion on or before the Scheduled Facility Completion Date. In the event that Facility Completion occurs on or prior to the Scheduled Facility Completion Date, the Company shall commence performing the Local GAC Services to meet the
City’s GAC reactivation demands in accordance with Article V and the City shall pay the Company a price equal to the average of the Non-Local and Local Service Prices for the performance of all GAC Services provided during the period between
actual Facility Completion and the Scheduled Facility Completion Date, subject to the terms and conditions of Article VI. Once the Scheduled Facility Completion Date is reached, the City shall pay the Company the Local Service Prices for the
performance of all GAC Services, subject to the terms and conditions of Article VI. 

  
 21 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article IV – Thermal GAC Reactivation Facility

  
 (D) Facility Completion Subsequent to the Scheduled Facility Completion Date. In the event that Facility
Completion does not occur by the Scheduled Facility Completion Date, the Company shall continue to perform the Interim GAC Services to meet the City’s GAC reactivation demand in accordance with Article V until such time as Facility Completion
actually occurs or this Service Contract is terminated for a Company Event of Default; provided however, that the City shall pay the Company the Local Service Price rather than the Interim Service Price for the performance of all GAC Services
provided following the Scheduled Facility Completion Date, subject to the terms and conditions of Article VI, notwithstanding the fact that Facility Completion has not actually occurred. The Company agrees that the payment of the Local Service Price
by the City rather than the Interim Service Price under the circumstances described in this subsection is a remedy intended to place the City in the same economic position as it would have been in had the Company met its obligation to achieve
Facility Completion by the Scheduled Facility Completion Date. The Company further agrees that such remedy is not a penalty and hereby expressly waives any right it may have to argue that such remedy is unenforceable as a penalty under Applicable
Law. Nothing in this subsection shall limit any of the City’s rights in the event of a termination of this Service Contract for a Company Event of Default. 
 (E) Failure to Achieve Facility Completion during the Extension Period. Subject to relief in accordance with the terms and conditions of this Service Contract in the event of Uncontrollable
Circumstances, if, as of the date which is 480 days following the Scheduled Facility Completion Date (the 480-day period following the Scheduled Facility Completion Date being referred to herein as the “Extension Period”), Facility
Completion has not been achieved, a Company Event of Default shall be deemed to have occurred under subsection 7.2(A) notwithstanding any absence of notice, further cure opportunity or other procedural rights accorded the Company thereunder,
and the City shall thereupon have the right to terminate this Service Contract upon written notice to the Company. Upon any such termination, the City shall have all of the rights provided in Article VII upon a termination of the Company for
cause, including the City’s right to purchase the Thermal GAC Reactivation Facility and Thermal GAC Reactivation Facility Site pursuant to Sections 4.1(D), 7.2 A(2), and 7.3. 

SECTION 4.4. THERMAL GAC REACTIVATION FACILITY OPERATIONS. 

(A) Operations and Maintenance Generally. The Company shall be fully responsible for operating and maintaining the Thermal GAC
Reactivation Facility for the full Term of this Service Contract in order to provide for the thermal reactivation of the City’s GAC at the Thermal GAC Reactivation Facility. 

  
 22 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article IV – Thermal GAC Reactivation Facility

  
 (B) Compliance with Applicable Law. The Company shall operate and maintain the Thermal GAC Reactivation
Facility in accordance with all requirements of Applicable Law, including compliance with the terms and conditions of all Governmental Approvals required for the continued operations of the Thermal GAC Reactivation Facility. The Company shall report
to the City, promptly upon obtaining knowledge thereof, all violations of the terms and conditions of any Governmental Approval or Applicable Law pertaining to the Thermal GAC Reactivation Facility and shall promptly correct any such violation and
resume compliance with Applicable Law. 
 (C) NSF Certification. The Company shall maintain NSF certification of the
Thermal GAC Reactivation Facility for the full Term of this Service Contract and, in operating and maintaining the Thermal GAC Reactivation Facility, shall adhere to all applicable quality control procedures and audit requirements established by
NSF. 
 (D) City Access Rights. The City Representative, providing the Company with reasonable advance notice, shall have
the right at any time during normal business hours to visit and inspect the Thermal GAC Reactivation Facility and observe the Company’s performance of the GAC Services. During any such observation or inspection, the City Representative shall
comply with the Company’s reasonable operating and safety procedures and rules, and shall not interfere with the Company’s operations of the Thermal GAC Reactivation Facility. The parties agree that the City shall have immediate access to
the Thermal GAC Reactivation Facility during normal business hours, and no Company rule or procedure shall impede, impair or delay such access. 
 SECTION 4.5. PRIORITY CUSTOMERS OF THERMAL GAC REACTIVATION FACILITY. 

[A] Most Favored Customer Status: In the event that the Company charges any other customer of the Thermal GAC Reactivation Facility
an amount less than the Local Service Price in effect at any given time for the performance of GAC thermal reactivation services, the Company shall provide the same pricing to the City. The City shall never pay more than any other Thermal GAC
Reactivation Facility customer. 
 [B] Right of First Refusal: Both parties shall remain in communication on an on-going
basis and shall review projections of all customer demand as part of the two-year Long Term Planning Forecast in order to aid both parties in decision making related to the disposition of uncommitted capacity. Should the Company identify an
opportunity to sell uncommitted capacity of the Thermal GAC Reactivation Facility to a customer other than the City, the Company shall first provide the City with the opportunity to increase the volume and/or duration of its commitment. Prior to
making a firm proposal to the other customer to reactivate its GAC, the Company shall meet with the City and review the Long Term Planning Forecast to determine whether or not the sale of the uncommitted capacity to another customer would
potentially displace volume required by the City. If the City determines that the sale of the uncommitted capacity to another customer would not displace volume required by 

  
 23 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article IV – Thermal GAC Reactivation Facility

  
 
the City, the Company may proceed with the sale. If the City determines that the sale of uncommitted capacity would potentially displace volume required by the City, the City may choose to
exercise its right of first refusal. Should the City exercise its right to increase the volume and/or duration of its commitment, the Company shall make alternative plans with the other customer that will ensure that the City’s volume
commitment is protected (e.g. quote some or all of the other customer’s required volume based on use of Company reactivation facilities other than the local Thermal GAC Reactivation Facility if necessary). Should the City decline to exercise
its option to increase its commitment, the Company shall be free to sell the uncommitted capacity to the other customer. The City shall have 3 business days in which to choose to exercise its right to increase its commitment, after which the Company
shall have to the right to proceed with selling the uncommitted capacity to the other customer without restriction. 
 SECTION
4.6. THERMAL GAC REACTIVATION FACILITY EXPANSIONS. 
 (A) Expansions Generally. The parties recognize that it may
be necessary or desirable from time to time to expand the capacity of the Thermal GAC Reactivation Facility. The Company shall bear the cost and expense of all expansions of the Thermal GAC Reactivation Facility and shall be solely responsible for
the financing, permitting, design and construction of any expansion of the Thermal GAC Reactivation Facility. The financing of any expansion of the Thermal GAC Reactivation Facility shall be subject to the terms and conditions of subsection 4.1(C).

 (B) Consultations with the City. The Company shall consult with the City prior to undertaking or committing to any
expansion of the Thermal GAC Reactivation Facility. Such consultation shall include providing the City with the Company’s plan for the expansion, including the reasons for the expansion and the Company’s design, construction and operation
plans associated with the expansion. 
 [C] Expansions Dictated by Increases in Demand. The City shall have the right to
direct the Company to undertake expansions of the Thermal GAC Reactivation Facility to the extent deemed reasonably necessary by the City based on its best estimate available at the time and to its Long-Term Planning Forecast. Based on the best
available information, which shall be reviewed jointly by both parties, the City and the Company shall mutually agree that the projected increased demand is expected and sustainable and that no other practicable, viable option exists to maintain the
supply other than expansion of the plant. The Company shall give the City’s request for expansion serious consideration, in good faith, and shall agree to expansion if the City’s request would generally be deemed reasonable. A milestone
schedule shall be jointly prepared by both parties for the provision of the expansion. The milestone schedule shall provide for intermediate points at which the expansion can be cancelled if demand projections change. The parties shall in good faith

  
 24 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article IV – Thermal GAC Reactivation Facility

  
 
negotiate and execute an amendment to this Service Contract covering the Thermal GAC Reactivation Facility expansion and incorporating the milestone schedule. Should the parties be unable to
negotiate a mutually agreeable amendment, the parties shall follow the Dispute Resolution Procedures provided in Article VIII. Once the amendment is signed by both parties, the Company shall complete the expansion based on the milestone schedule
submitted by the Company, but no later than 420 days following receipt of notice by the City. The rights and responsibilities of the parties with respect to any expansion directed by the City pursuant to this subsection shall be contained within the
amendment and shall be the same as the rights and responsibilities of the parties set forth in this Article with respect to Facility Completion, with the understanding that in the case of Expansions, the definition of Uncontrollable Circumstance
shall also include unforeseen issues regarding the securing of permits related to the design and construction of the expansion. 

The City acknowledges that expansions directed in later years of the contract may entail a requirement for the City to extend the term of
the contract in order to ensure that the Company realizes an acceptable return on the additional investment. The exact nature of the contract term extension shall be negotiated and mutually agreed upon during the expansion determination process.

  
 25 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 ARTICLE V 
 PERFORMANCE OF THE GAC SERVICES 
 SECTION 5.1. RESPONSIBILITY FOR
PERFORMANCE. 
 (A) Reliance. The Company acknowledges and agrees that the City is entering into this Service Contract
in reliance on the Company’s expertise with respect to the GAC Services, so that the City may continue to meet applicable regulatory requirements at its Water Treatment Facilities and to deliver safe, high quality drinking water to its
residents. 
 (B) Responsibility for Employees, Agents and Subcontractors. All obligations of the Company under this
Service Contract shall be performed by Company employees, agents or Subcontractors (subject to the limitations set forth in Section 5.8) who are qualified to perform the specific services and meet all licensing and certification requirements of
Applicable Law. The Company shall be fully responsible, in accordance with the terms and conditions of this Service Contract, for all GAC Services performed by its employees, agents or Subcontractors. As regards subcontractors, this provision
applies only subcontractors on City-owned sites, and not to the GAC Thermal Reactivation Facility. 
 SECTION 5.2. COMPANY
OBLIGATIONS GENERALLY. 
 (A) Performance Standards. The Company shall furnish all labor, materials, equipment and
incidentals required to provide the GAC Services, including the removal and replacement of GAC. The Company shall perform the GAC Services in accordance with the Performance Standards set forth in Appendix 3. As regards subcontractors, this
provision applies only subcontractors on City-owned sites, and not to the GAC Thermal Reactivation Facility. 
 (B) Compliance
with Applicable Law. The Company shall perform the GAC Services in accordance with all requirements of Applicable Law. Without limiting the generality of the foregoing, the Company shall ensure that all persons performing GAC Services, including
all employees, agents and Subcontractors, comply with all registration, licensing and certification requirements imposed by any Governmental Body. The Company shall obtain and maintain all Governmental Approvals required for the performance of the
GAC Services throughout the Term. The Company shall be entitled to Uncontrollable Circumstance relief associated with a Change in Law as and to the extent provided in Section 9.2. The Company agrees to permit City inspection of the
Company’s business records, including personnel records, to verify compliance with the requirements of this subsection. As indicated in Section 10.1, the Company will perform services under this Service Contract as an independent
contractor. Accordingly, the City accepts no responsibility for the Company’s actions or omissions. As regards subcontractors, this provision applies only subcontractors on City-owned sites, and not to the GAC Thermal Reactivation Facility.

  
 26 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 (C) Affidavits and Chain of Custody. At the time of delivery of any GAC pursuant to this Service
Contract, the Company shall provide an affidavit of compliance stating that the thermal activation services provided and the thermally activated GAC produced comply with all applicable Performance Standards, including all applicable provisions of
ANSI/AWWA B605-07 Standard, NSF, and City requirements. The Company shall provide a “Chain of Custody” certification that documents that the handling procedure used assures that the GAC from each of the City’s Water Treatment
Facilities has been separated from other GACs from the time of removal, through the thermal reactivation process, and during storage and transportation until it is received and placed at the Water Treatment Facility. 

(D) Commencement of Work; Turn-Around Time. The Company shall not commence any GAC Filter Exchange until the Company receives a
written demand notice from the City Representative pursuant to subsection 5.4(C). The Company shall commence each GAC Filter Exchange within seven days following receipt of such notice, or as otherwise agreed to by the City pursuant to subsection
5.4(C). Commencement of a GAC Filter Exchange shall be deemed to have occurred upon commencement of filter preparation in accordance with the Performance Standards set forth in Appendix 3. The total turn around time for each GAC Filter Exchange,
from commencement until placement of thermally reactivated GAC and including all transit time, shall not exceed [30] days, except to the extent excused due to the occurrence of Uncontrollable Circumstances. 

(E) GAC Reactivation Demand and Local Capacity. The Company agrees to handle all of the City’s GAC reactivation needs
associated with the Water Treatment Facilities for the Term in accordance with the terms and conditions of this Service Contract. Prior to the actual Facility Completion Date and in accordance with the City’s Commitment of Volume, Demand
Forecast, and Long Range Planning Forecast, the Company shall provide and perform the Interim GAC Services to handle the City’s GAC reactivation needs. Beginning on the actual Facility Completion Date, the Company shall provide and perform the
Local GAC Services to handle the City’s GAC reactivation needs, subject to the terms and conditions of Section 5.5. 

(F) Virgin GAC. As indicated in Appendix 3, makeup Virgin GAC shall be provided by the Company, at no additional cost to the City,
to compensate for any loss of GAC that might have occurred during transportation, handling (including removal and installation), and thermal reactivation of the spent GAC, or as otherwise necessary to meet the Performance Standards for GAC set forth
in Appendix 3. In addition, GAC that has become contaminated by the Company before, during, or after being placed in the basin shall be removed and replaced with Virgin GAC at no additional cost to the City and in a manner satisfactory to the City.
The Company shall also provide Virgin GAC to make up for any other operational GAC loss occurring between the completion of any GAC Filter Exchange and the commencement of any 

  
 27 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 
subsequent GAC Filter Exchange (a “City Operational GAC Loss”) or for any other reason at the direction of the City; provided, however, that the Company shall be compensated for Virgin
GAC required to make up for such City Operational GAC Losses or as otherwise directed by the City as provided in subsection 6.1(F). The Company acknowledges and agrees that the City has no exclusivity requirements pursuant to this Service Contract
with respect to the purchase of Virgin GAC and may purchase Virgin GAC from the Company pursuant to this Service Contract or from any other source. The City acknowledges that Virgin GAC that is materially outside the agreement specifications and
purchased from other sources may prove to be less durable under typical thermal reactivation conditions than Virgin GAC manufactured by the Company, and that use of Virgin GAC from other sources may result in higher thermal reactivation losses,
requiring the Company to supply more Virgin GAC to make-up for these losses. Such losses, as validated by the Company and agreed upon by the City, shall be considered City Operational GAC Losses, and the City shall compensate the Company for any
such additional Virgin GAC required to be supplied. 
 (G) Warranties; Responsibility for Correction. The Company
expressly warrants that all goods or services furnished under this Service Contract shall conform to the Performance Standards and the requirements of Applicable Law. It is agreed that the Company shall be fully responsible for making any
correction, replacement, or modification necessary for compliance with the Performance Standards or Applicable Law. The Company shall be required to make corrections, replacements or modifications to work completed prior to any Change in Law,
subject to Uncontrollable Circumstance relief as and to the extent provided in Section 9.2. 
 (H) Liens. The Company
shall hold the City harmless from claimants supplying labor or materials to the Company or its Subcontractors in the performance of the work required under this Service Contract. 

(I) Spills. The Company shall be responsible for the cleanup of any spills during placement or removal of media in the basins that
are caused by the Company’s equipment, off-loading technique or failure to comply with the Performance Standards, including all cost associated therewith. In addition, the Company shall provide technical support for spills of materials supplied
by the Company, including a 24-hour emergency phone number. The Company shall be fully responsible for any spill occurring during transport or during the reactivation process. 
 (J) Title and Risk of Loss. All service and materials are subject to final inspection and acceptance by the City Representative. The title and risk of loss of material or service shall not pass to
the City until the City actually accepts the material or service at the point of delivery; and such loss, injury, or destruction shall not release the Company from any obligation hereunder. The City assumes no responsibility, at any time, for the
protection of or for the loss of materials, from the commencement of performance of the GAC Services until final acceptance of the work associated with each GAC Filter Exchange by the City Representative. 

  
 28 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 (K) Damage to City Property and Private Property. The Company shall perform the GAC Services so that no
damage to any City property, including the buildings and grounds of the Water Treatment Facilities, results. The Company shall promptly repair or replace, at no cost to the City, all City property and private property damaged by the Company or any
officer, director, employee, representative, agent or Subcontractor of the Company in connection with the performance of, or the failure to perform, the GAC Services. The repair and replacements shall restore the damaged property, to the maximum
extent reasonably practicable, to its character and condition existing immediately prior to the damage. 
 SECTION 5.3. CITY
GAC TESTING RIGHTS. The City reserves the right to perform periodic, random, unannounced, testing of any reactivated GAC delivered under this Service Contract, employing the GAC sampling and testing procedures included in Appendix X. The
reactivated GAC shall be tested for conformance with the Performance Standards associated with iodine number, apparent density, and abrasion, ash by an independent laboratory. Should the reactivated GAC fail any of tests conducted by the independent
laboratory, the Company shall provide samples of the same lot of GAC from its manufacturing retain samples and submit them to a mutually accepted second independent laboratory for testing. Should the test results from the second independent
laboratory indicate that the GAC meets specification, it shall be determined that the GAC does meet specification and no further actions shall be taken. Should the test results from the second independent laboratory confirm the results of the
testing from the first independent laboratory, it shall be determined that the GAC does not meet specification. In the case that it is determined that the GAC does not meet specification, , the Parties shall discuss all possible financial and/or
physical remedies, up to and including partial or total replacement of the GAC which failed the testing. The Parties shall in good faith negotiate and execute a mutually agreeable settlement. All costs associated with the failed testing shall be
borne by the Company. Three (3) ‘significant’ failed test reports within a twelve (12) month period may, at the City’s discretion, result in this Service Contract being terminated by the City in accordance with
Section 7.2. ‘Significant’ failed test reports are defined as test results which are out of compliance with a specification parameter by more than 10% of the numeric value of the parameter. Without limiting any of the City’s
rights under this Service Contract with respect to any failure of Company compliance with the Performance Standards, other specifications listed in the Performance Standards may also be tested pursuant to this Section but shall not be cause for
rejection of GAC. 
 SECTION 5.4. CITY OBLIGATIONS GENERALLY. 

(A) General City Obligations. The City, in addition to the obligations it has undertaken elsewhere in this Service Contract, shall:

 (1) Provide the Company access to the Water Treatment Facilities to the extent necessary for the performance
of the Company’s obligations hereunder, subject to the terms and conditions of this Service Contract; 

  
 29 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 (2) Perform the obligations of the City specified in Appendix 3 with respect to GAC media
washing; and 
 (3) Pay the Company for the performance of the GAC Services in accordance with and subject to the
terms and conditions set forth in Article VI. 
 (B) Exclusivity. During the Term of this Service Contract, the City shall
direct all of its required thermal GAC reactivation needs associated with its Water Treatment Facilities exclusively to the Company, except that the City may direct any reactivation demand above the Commitment of Volume to its Lake Pleasant WTP GAC
reactivation facility. Without limiting any of the City’s rights under this Service Contract with respect to any breach of the Company’s obligations hereunder, the Company’s failure to meet the City’s local reactivation needs
more than three (3) times during the term of the Agreement, subject to the terms and conditions of Section 5.5, may, at the City’s discretion, result in this Service Contract becoming non-exclusive for the purpose of the City meeting
some or all of its reactivation needs from a source other than the Company, with non-exclusivity applying only during the period in which the Company is unable to meet the City’s local reactivation needs. The Company acknowledges and agrees
that the exclusivity requirements of this subsection do not apply to the purchase of Virgin GAC and that the City may purchase Virgin GAC from the Company pursuant to this Service Contract or from any other source. It is the City’s intention
that the Virgin GAC shall materially meet the same specifications as that of the Virgin GAC originally supplied for each water treatment facility. Should the City purchase Virgin GAC from a source other than the Company, the City shall provide to
the Company upon request a copy of the Certificate of Analysis for the Virgin GAC, as well as documentation confirming that the Virgin GAC is of bituminous coal origin manufactured via a reagglomeration process. This documentation shall be used to
confirm that the Virgin GAC is of suitable quality to be reactivated to the specified parameters for Thermal Reactivated GAC, with Virgin GAC make-up requirements falling within the range considered normal for Thermal Reactivated GAC. 

(C) Scheduling of GAC Filter Exchanges. The City shall have the right to demand a GAC Filter Exchange at any time, by written
notice from the City Representative to the Company, subject to the terms and conditions of this Section. The City shall provide the Company with at least seven days’ written notice prior to the commencement of any GAC Filter Exchange. The
Company may request a longer period prior to commencement (not to exceed 30 days), subject to the reasonable approval of the City. 
 (D) Demand Forecasting. The City shall provide a Commitment of Volume, a Volume Forecast, and a Long Term Planning Forecast (collectively, the “Demand Forecast”) to the Company in order
to facilitate demand management for the Thermal GAC Reactivation Facility in accordance with Section 5.5. 
 SECTION 5.5.
DEMAND MANAGEMENT. 
 (A) Commitment of Volume. The “Commitment of Volume” shall be the quantity of
pounds of GAC that the City shall commit to having reactivated for a 

  
 30 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 
given six-month period, expressed in monthly quantities and subject to the terms and conditions of this Section. The Commitment Volume shall be a guaranteed volume with a variance of 20% over the
six-month period. The Commitment of Volume shall be provided to the Company by the City in May for the July to December period and in November for the January to June period. The Company shall review the commitment and verify that the demand as
projected can be met utilizing the capacity of the local Thermal GAC Reactivation Facility, considering the committed pounds of the City plus the committed pounds of other customers. Should the analysis indicate that the demand exceeds the Thermal
GAC Reactivation Facility’s ability due to the demand pattern (ie: An excessive amount being scheduled in a single month or condensed time frame or the total demand being in excess of the available plant capacity (given the total capacity of
the Thermal GAC Reactivation Facility less the committed pounds of other customers) over the projection time period) then the sourcing and scheduling mechanisms within Section 5.5(D)(2)) will be applied to resolve the overage. Otherwise, should
the actual volume add up to a quantity of up to 110% of the Commitment Volume, the Company will be responsible for meeting the Committed Volume at the Local Pricing and per the agreed upon schedule. Should the actual variance add up to a volume
greater than 110%, up to 120% of the Committed Volume, the City shall pay a price which is the average of the Non-Local Pricing and Local Pricing. 
 (B) Volume Forecast. The “Volume Forecast” is a rolling six-month forecast of expected demand, based on the most current information available and expressed in monthly quantities. The
City shall provide the Company with the Volume Forecast, and the City and the Company shall review the Volume Forecast, on a monthly basis. 
 (C) Long-Term Planning Forecast. The “Long Term Planning Forecast” shall be developed and updated quarterly by the City to give a two-year forecast, based upon the latest water quality
data, of anticipated GAC usage and reactivation demand. This data will be combined with other forecasts by regional partners to help anticipate thermal regeneration capital expansion needs. Planning associated with the Long Term Planning Forecast
will help ensure proper expansions of the Thermal GAC Reactivation Facility pursuant to Section 4.6. 
 (D) Reconciling
Actual Demand with Demand Forecast. During the monthly Volume Forecast review, when comparing the actual quantity and most recent forecast quantities with the current Commitment of Volume quantities: 

(1) Actual Quantity within Specified Range of Commitment of Volume. Where the actual quantity is not less than 80%
nor more than 120% of the Commitment of Volume quantity, reactivation shall proceed at the Thermal GAC Reactivation Facility as planned. Should the actual volume add up to a quantity of up to 110% of the Commitment Volume, the Company will be
responsible for meeting the Committed Volume at the Local Pricing and per the agreed upon schedule. Should the actual variance add up to a volume greater than 110%, up to 120% of the Commitment Volume, the City shall pay a price which is the average
of the Non-Local Pricing and Local Pricing. 

  
 31 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 (2) Actual Quantity in Excess of 120% of Commitment of Volume . Where the actual
quantity exceeds the Commitment of Volume quantity by more than 20% and the Company does not have the capacity to handle such demand at the Thermal GAC Reactivation Facility, the City may, in its sole discretion, (a) agree to reschedule GAC
Filter Exchanges in order to accommodate the excess demand situation at the Thermal GAC Reactivation Facility without incurring any additional charge beyond the Local Service Price for the performance of the excess GAC Filter Exchanges;
(b) direct the excess demand to the Lake Pleasant WTP without incurring any payment obligation to the Company with respect to such excess demand; or (c) direct the Company to perform GAC Filter Exchanges in excess of 120% of the
Commitment of Volume quantity at other Company GAC thermal reactivation facilities at the Non-Local Service Price. The Company shall be required to handle such excess demand at other Company GAC thermal reactivation facilities at the Non-Local
Service Price. The Company must demonstrate the lack of local capacity prior to the City agreeing to or paying the Non-Local Service Price. 
 Should the City opt to take the excess volume to Lake Pleasant WTP, the City shall be responsible for the reactivated GAC materially meeting the required specifications. The City shall be responsible for
all activities related to sending the excess volume to Lake Pleasant WTP, including removal of spent GAC, transportation of GAC to and from Lake Pleasant, and reinstallation of GAC into the filters. The City shall have the option of requesting a
proposal from the Company to provide these removal, transport, and reinstallation services. Pricing and terms of such a Company proposal shall be negotiated outside of the framework of this Service Contract. 

(3) Actual Quantity Less than 80% of Commitment of Volume. Where the actual quantity is less than 80% of the
Commitment of Volume quantity, the Company shall make reasonable efforts to make up for the shortfall with GAC from another reactivation customer. If the Company is successful in making up for the shortfall with GAC from another customer or fails to
make reasonable efforts to make up for the shortfall, the City shall have no payment responsibility to the Company with respect to the fact that the actual quantity is less than 80% of the Commitment of Volume quantity. If, however, the Company
demonstrates to the reasonable satisfaction of the City that it has made reasonable efforts to make up for the shortfall but has not been successful in making up for the shortfall, the Company reserves the right to charge the City at the Local
Service Price for the amount of the shortfall in GAC quantity below 80% of the Commitment of Volume quantity, as reduced by the extent to which the Company is able to make up for the shortfall pursuant to the terms and conditions of this subsection.

  
 32 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 SECTION 5.6. SERVICE COORDINATION AND CONTRACT ADMINISTRATION. 

Company’s Service Manager. The Company shall appoint a full-time service manager for the performance of the GAC Services (the “Service
Manager”) who shall be licensed, trained, experienced and proficient in the performance of the GAC Services. The Company acknowledges that the performance of the individual serving from time to time as the Service Manager will have a material
bearing on the quality of service provided hereunder, and that effective cooperation between the City and the Service Manager will be essential to effectuating the intent and purposes of this Service ContractThe Company shall promptly notify the
City in writing of a change in the Service Manager. As such, the Company agrees that if the City reports that an unworkable or very difficult working relationship has developed between the Service Manager and the City, that the Company will look
closely and seriously into such reports and shall seriously consider replacing the Service Manager after meeting with the City to attempt to mutually work out any issues regarding the Service Manager. 

(A) Company’s Senior Corporate Representatives. The Company shall appoint and inform the City from time to time of the
identity of the corporate officials of the Company with direct, senior supervisory responsibility for the performance of this Service Contract (the “Senior Corporate Representatives”). The Company shall promptly notify the City in writing
of the appointment of any successor Senior Corporate Representatives. The Senior Corporate Representatives shall cooperate with the City in resolving any issues that may arise in connection with the performance of the GAC Services over the Term.

 (B) City Representative. The City shall designate an employee or employees to administer this Service Contract and act
as the City’s liaison with the Company in connection with the GAC Services (the “City Representative”). The Company understands and agrees that the City Representative has only limited authority with respect to the implementation of
this Service Contract, and cannot bind the City with respect to any Amendment or to incurring costs in excess of the amounts appropriated therefor. 
 (C) Communications and Meetings. The Company shall inform the City of the telephone, cellular telephone, fax numbers, e-mail addresses and other means by which the Service Manager and Senior
Corporate Representatives may be contacted. The City shall furnish to the Company comparable communications information with respect to the City Representative. On a monthly basis, the Company shall meet with the City to review the Demand Forecasts
and the performance of the GAC Services generally. The Service Manager shall personally attend these monthly operations meetings with the City. If requested by the City, the Senior Corporate Representatives shall attend one such monthly operations
meeting per calendar quarter during the Term. In addition, the City shall have the right to require special meetings in its reasonable discretion to review performance and planning matters arising with respect to this Service Contract. The Service
Manager and, if requested by 

  
 33 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 
the City, the Senior Corporate Representatives or a duly designated representative shall each attend all such special meetings. Any issue in dispute which the parties are unable to resolve at
such monthly operations meetings and special meetings may be referred to the dispute resolution procedures set forth in Section 8.1, and the resolution of any issues resolved at such meetings or through the dispute resolution procedures shall
be reflected in a Contract Administration Memorandum or an Amendment, as applicable. 
 SECTION 5.7. PERSONNEL.

 (A) Account Staffing. The Company agrees to assign experienced personnel to provide for successful and timely
accomplishment of the GAC Services. The City reserves the right at any time and for any reason during the Term to reject any Company or Subcontractor personnel from performing services under this Service Contract. 

(B) Background Screening. All Company and Subcontractor employees performing services under this Service Contract are subject to
the background screening requirements set forth in Appendix 5. 
 (C) Water Treatment Facilities Access Requirements. All
Company and Subcontractor employees performing services at the Water Treatment Facilities under this Service Contract are subject to the access control requirements set forth in Appendix 6, including all badge and key access requirements.

 (D) Legal Worker Requirements. The City is prohibited by A.R.S. § 41-4401 from awarding an agreement to any
contractor who fails, or whose subcontractors fail, to comply with A.R.S. § 23-214(A). Therefore, the Company agrees that: 
 (1) The Company and each Subcontractor it uses warrants their compliance with all federal immigration laws and regulations that relate to their employees and their compliance with § 23-214,
subsection A. 
 (2) A breach of a warranty under paragraph 1 of this subsection shall be deemed a material
breach of this Service Contract, which may result in termination of this Service Contract by the City pursuant to Section 7.2. 
 (3) The City retains the legal right to inspect the papers of the Company or Subcontractor employee(s) who work(s) on this Service Contract to ensure that the Company and its Subcontractors are complying
with the warranty under paragraph 1. 
 (E) Affirmative Action. The Company agrees to abide by the provisions of the
Phoenix City Code Chapter 18, Article V as amended. Any contractor/subcontractor in performing under this Service Contract shall not discriminate against any worker, employee or applicant, or any member of the public, because of race, color,
religion, gender, national origin, age or disability nor otherwise commit an unfair employment practice. The Company shall, and shall cause all 

  
 34 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 
Subcontractors to, take affirmative action to ensure that applicants are employed, and employees are dealt with during employment without regard to their race, color, religion, gender or national
origin, age or disability. Such action shall include but not be limited to the following: Employment, promotion, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and
selection for training, including apprenticeship. The Company further agrees that this clause will be incorporated in all subcontracts with all labor organizations furnishing skilled, unskilled and union labor, or who may perform any such labor or
services in connection with this Service Contract. The Company further agrees that this clause will be incorporated in all subcontracts, job-consultant agreements or assignments of this Service Contract entered into by the Company or any
Subcontractor. 
 SECTION 5.8. SUBCONTRACTORS. 
 (A) Use Restricted. The Company shall operate the Thermal GAC Reactivation Facility with its own employees and in accordance with this Service Contract. Additionally, all GAC Services performed at
the Water Treatment Facilities shall be performed by Company personnel. Subcontractors may be used to perform other services under this Service Contract, subject to the City’s right of approval identified in subsection (B) of this Section.

 (B) Limited City Review and Approval of Permitted Subcontractors. Except as provided in the next sentence of this
Section, the City shall have the right, based solely on the criteria provided below in this Section, to approve all Subcontractors, which approval shall not be unreasonably withheld. The Company shall furnish the City with written notice of its
intention to engage any Subcontractor, together with all information reasonably requested by the City pertaining to the demonstrated responsibility of the proposed Subcontractor in the following areas: (1) any conflicts of interest;
(2) any record of felony criminal convictions or pending felony criminal investigations; (3) any final judicial or administrative finding or adjudication of illegal employment discrimination; (4) any unpaid federal, State or local
Taxes; and (5) any final judicial or administrative findings or adjudication of non-performance in contracts with the City, the State or the federal government. The approval or withholding thereof by the City of any proposed Subcontractor shall
not create any liability of the City to the Company, to third parties or otherwise. In no event shall any Subcontract be awarded to any person debarred, suspended or disqualified from federal, State or City contracting. 

(C) Subcontract Terms and Subcontractor Actions. The Company shall retain full responsibility to the City under this Service
Contract for all matters related to the GAC Services notwithstanding the execution or terms and conditions of any Subcontract. Except as provided in Item (a)(v) of the definition of Uncontrollable Circumstances, no failure of any Subcontractor used
by the Company in connection with the provision of the GAC Services shall relieve the Company from its obligations hereunder to perform the GAC Services. The Company shall be responsible for settling and resolving with all Subcontractors all claims
arising out of delay, disruption, 

  
 35 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article V – Performance of the GAC Services

  
 
interference, hindrance, or schedule extension caused by the Company or inflicted on the Company or a Subcontractor by the actions of another Subcontractor. Subcontracts entered into by the
Company for the performance of the GAC Services shall neither supersede nor abrogate any of the terms or provisions of this Service Contract. 

Payments to Subcontractors. The Company shall pay or cause to be paid to all direct Subcontractors all amounts due in accordance with their
respective Subcontracts and the requirements of Applicable Law. No Subcontractor shall have any right against the City for labor, services, materials or equipment furnished for the GAC Services. The Company acknowledges that its indemnity
obligations under Section 9.3 shall extend to all claims for payment or damages by any Subcontractor who furnishes or claims to have furnished any labor, services, materials or equipment in connection with the GAC Services. 

(D) Sections 5.8 [A] and 5.8 [B] shall not apply to Thermal GAC Reactivation Facility construction related activities. 

  
 36 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article VI – Payment for GAC Services

 
 ARTICLE VI 

PAYMENT FOR GAC SERVICES 
 SECTION 6.1. UNIT PRICING. 
 (A) Generally. The City shall pay the
Company for the performance of the GAC Services on a unit price basis per pound of thermally reactivated GAC in accordance with the terms and conditions of this Article. The unit price per pound of thermally reactivated GAC, as determined in
accordance with this Article, shall serve as the sole compensation to the Company for the performance of all obligations under this Service Contract. Without limiting the generality of the foregoing, the pricing set forth in this Section is
inclusive of all costs associated with labor; materials; transportation; incidentals; equipment; space; risk, administration, overhead and profit; operation and maintenance of the Thermal GAC Reactivation Facility; and any other services or items
necessary to effectively perform and complete the GAC Services in accordance with this Service Contract. The Company agrees that consideration for such costs has been included in the pricing set forth in this Section. 

(B) Unit Pricing for Interim GAC Services. The unit price for the performance of the Interim GAC Services (the “Interim
Service Price”) is $0.94 per pound of reactivated GAC. The Interim Service Price shall be applicable for all GAC Services performed by the Company until the earlier to occur of the Facility Completion Date or the Scheduled Facility Completion
Date. The Interim Service Price shall not be subject to annual adjustment pursuant to subsection (G) of this Section. Except as provided in subsection (F) of this Section, the Interim Service Price includes all compensation to the Company
for providing necessary make-up Virgin Carbon. 
 (C) Unit Pricing for Local GAC Services. Commencing on the earlier to
occur of the Facility Completion Date or the Scheduled Facility Completion Date, the Local Service Price shall be applicable for all GAC Services performed by the Company through the expiration or earlier termination of this Service Contract,
subject to subsection (D) of this Section. As of the Contract Date, the unit price for the performance of the Local GAC Services (the “Local Service Price”) is $0.595 per pound of reactivated GAC. The Local Service Price shall be
subject to adjustment annually from the Contract Date in accordance with subsection (G) of this Section. Except as provided in subsection (F) of this Section, the Local Service Price includes all compensation to the Company for providing
necessary make-up Virgin Carbon. 
 (D) Unit Pricing for Non-local GAC Services. The Company shall be entitled to the
Non-Local Service Price, as determined in accordance with this subsection, solely to the extent provided in Section 5.5 and Section 9.2. As of the Contract Date, the unit price for the performance of such non-local GAC Services (the
“Non-Local Service Price”) is $0.94 per pound of reactivated GAC. The Non-Local Service Price shall be subject to adjustment annually from the Contract Date in accordance with subsection (G) of this Section. Except as provided in
subsection (F) of this Section, the Non-Local Service Price includes all compensation to the Company for 

  
 37 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article VI – Payment for GAC Services

 
 
providing necessary make-up Virgin Carbon. The Company acknowledges and agrees that, except as provided in Section 5.5 and Section 9.2, the Non-Local Service Price shall not be
applicable to any GAC Filter Exchange demanded by the City, even if the Company is required to meet such demand by thermally reactivating GAC at Company facilities other than the Thermal GAC Reactivation Facility. 

(E) Fuel Surcharge Applicable to Non-local GAC Services. Additionally, to the extent the Non-Local Service Price is applicable
pursuant to subsection (D) of this Section, if the cost of diesel fuel is equal to or greater than $4.00 per gallon, according to the U.S. National Average On-Highway Diesel Price, the Company shall be entitled to a surcharge on non-local GAC
Services (“Non-Local Fuel Surcharge”) in accordance with Appendix 8. The Company acknowledges and agrees that the Non-Local Fuel Surcharge shall not be applicable prior to the earlier to occur of the Facility Completion Date or the
Scheduled Facility Completion Date and thereafter only to the extent provided in this subsection, Section 5.5 and Section 9.2. 
 (F) Virgin GAC Required for City Operational GAC Losses. The Company acknowledges and agrees that, except with respect to City Operational GAC Losses and as otherwise directed by the City pursuant
to 5.2(F), the Interim Service Price, the Local Service Price and the Non-Local Service Price include all compensation to the Company with respect to the Company’s obligation to provide makeup Virgin GAC in accordance with subsection 5.2(F).
The Company shall be entitled to additional compensation associated with Virgin GAC on a unit price basis in accordance with this subsection solely to the extent such Virgin GAC is required in order to make up for City Operational GAC Losses or as
otherwise directed by the City, as determined in accordance with subsection 5.2(F). As of the Contract Date, the unit price for the Virgin GAC required to make up for City Operational GAC Losses is $1.288 per pound of Virgin GAC (the
“Additional GAC Price”). The Additional GAC Price shall be subject to adjustment annually from the Contract Date in accordance with subsection (G) of this Section. 

(G) Annual Adjustments to Unit Prices. The Local Service Price, the Non-Local Service Price and the Additional GAC Price shall each
be subject to annual adjustment in accordance with Appendix 8. In no event shall any such price increase by more than ten percent (10%) or decrease by more than five percent (5%) in any annual adjustment. Any increase or reduction that is
not made as a result of the limitations established by the preceding sentence shall carry forward and be applied to the next Contract Year’s adjustment, subject to the same percentage limitations. The Interim Service Price shall not be subject
to annual adjustment. 
 SECTION 6.2. BILLING AND PAYMENT. 

(A) Company Invoicing. The Company shall submit monthly invoices to the City for the performance of the GAC Services. Such invoices
shall be issued for GAC Filter Exchange performed during the prior month. Company invoices must include the following: identification of this Service Contract, including applicable City contract number; description of services performed, including
number of GAC Filter 

  
 38 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article VI – Payment for GAC Services

 
 
Exchanges and applicable pricing in accordance with Section 6.1; invoice number and date; and such other documentation or information as the City may reasonably require to determine the
accuracy and appropriateness of the invoice. The City will not honor any invoices or claims which are tendered one (1) year after the last item of the account accrued. 
 (B) Payment. The City shall pay the Company the applicable price for the performance of the GAC Services, as determined in accordance with Section 6.1, on a monthly basis in arrears. Advance
payments are not authorized. Payment will be made only for actual services or commodities that have been received. The Company further agrees that, in order to receive payment, the Company must have a current IRS Form W-9 on file with the City. The
City’s obligation to make payments pursuant to this subsection shall be subject to the City’s rights to dispute any invoice pursuant to Section 6.3 Payment term to be 30 days from end of month with electronic payment via ACH or wire
transfer. 
 (C) Payment Deduction Offset. The Company acknowledges that the City Charter requires that no payment be made
to any contractor as long as there is an outstanding obligation due to the City. The Company agrees that any obligation it owes to the City will be offset against any payment due to the Company from the City. 

SECTION 6.3. INVOICE AND PAYMENT DISPUTES. If the City disputes any amount invoiced by the Company, the City may either
(1) pay the disputed amount when otherwise due, and provide the Company with a written objection indicating the amount that is being disputed and providing all reasons then known to the City for its objection to or disagreement with such
amount, or (2) withhold payment of the disputed amount and provide the Company with written objection as aforesaid within the time when such amount would otherwise have been payable. When any billing dispute is finally resolved, if payment by
the City to the Company of amounts withheld or reimbursement to the City by the Company of amounts paid under protest is required, such payment to the Company or reimbursement to the City shall be made within 45 days after the date of
resolution. 
 SECTION 6.4. FUND APPROPRIATION CONTINGENCY. The Company recognizes that any agreement entered into shall
commence upon the day first provided and continue in full force and effect until termination in accordance with its provisions. The Company and the City herein recognize that the continuation of this Service Contract after the close of any Contract
Year shall be subject to the approval of the budget of the City of Phoenix providing for or covering such contract item as an expenditure therein. The City does not represent that any budget item will be actually adopted, such determination being
the determination of the City Council at the time of the adoption of the budget. In the event that this Service Contract does not continue solely due to the failure of the City Council to fund this Service Contract pursuant to this subsection, this
Service Contract shall be subject to suspension for that fiscal year, and the City shall have no volume commitment responsibility to the Company for that fiscal year as a result of the suspension of the contract. The City agrees, however, that if
the City Council does not appropriate funds in the City budget 

  
 39 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article VI – Payment for GAC Services

 
 
for GAC services such that this Service Contract does not continue solely because of the failure to approve a budget that funds the Service Contract and the operation of this Section, the City
shall not, during the remainder of the full scheduled term of this Service Contract, contract for the thermal reactivation of GAC media with any other party. Years lost to suspension may be replaced via contract extensions per Article III,
Section 3.2, at the discretion of the City. 
 SECTION 6.5. TAXES. The unit pricing established pursuant to this
Article does not include State and local Taxes directly related to the performance of the GAC Services, as the City is exempt from such Taxes. In the event a Change in Law occurs imposing such Taxes, the City shall pay such Taxes on a pass-through
basis. Notwithstanding the foregoing, the Company shall be solely responsible for all Taxes associated with the Thermal GAC Reactivation Facility and for all Taxes associated with the income of the Company or otherwise imposed on the Company and not
directly related to the performance of the GAC Services. 

  
 40 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article VII – Breach, Default, Remedies and

Termination

  

ARTICLE VII 

BREACH, DEFAULT, REMEDIES AND TERMINATION 
 SECTION 7.1. REMEDIES FOR BREACH. 
 (A) Generally. The parties agree
that, except as otherwise provided in this Article with respect to termination rights, in the event that either party breaches this Service Contract, the other party may exercise any legal rights it may have under this Service Contract or under
Applicable Law to recover damages or to secure specific performance, and that such rights to recover damages and to secure specific performance shall ordinarily constitute adequate remedies for any such breach. 

(B) Strict Performance. Failure of either party to insist upon the strict performance of any item or condition of this Service
Contract or to exercise or delay the exercise of any right or remedy provided in this Service Contract, or by Applicable Law, or the acceptance of materials or services, obligations imposed by this Service Contract or by Applicable Law shall not be
deemed a waiver of any right of either party to insist upon the strict performance of this Service Contract. 
 (C) Right to
Assurance. Whenever one party to this Service Contract in good faith has reason to question the other party’s intent to perform, the former party may demand that the other party give a written assurance of this intent to perform. In the
event that a demand is made and no written assurance is given within five (5) days, the demanding party may treat this failure as an anticipatory repudiation of this Service Contract, subject to the rights and responsibilities of the parties
hereunder. 
 SECTION 7.2. COMPANY EVENTS OF DEFAULT. 

(A) Events of Default Not Requiring Previous Notice or Further Cure Opportunity for Termination. Each of the following shall
constitute a Company Event of Default upon which the City, by notice to the Company, may terminate this Service Contract without any requirement of having given notice previously or of providing any further cure opportunity: 

(1) Failure to Exercise Purchase Option. The failure of the Company to exercise its option to purchase the Thermal
GAC Reactivation Facility Site on the Contract Date and to become the owner of the Thermal GAC Reactivation Facility Site; 
 (2) Failure to Achieve Facility Completion. Except to the extent excused due to the occurrence of Uncontrollable Circumstances, the failure of the Company to achieve Facility Completion prior to
the end of the Extension Period; 
 (3) Failure to Meet Certain Performance Standards. The failure of the
Company to meet certain Performance Standards, as and to the extent provided in Section 5.3 with respect to termination under this Section, unless caused by the occurrence of Uncontrollable Circumstances; 

  
 41 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article VII – Breach, Default, Remedies and

Termination

  

(4) Contingent Fees and Gratuities. The failure of the Company to comply with the provisions of Section 10.8;

 (5) Water Treatment Facilities Access Control Requirements. The Company fails to comply with the access
control requirements for the Water Treatment Facilities set forth in Appendix 6, as and to the extent provided therein; 
 (6) Confidentiality and Data Security. The Company breaches its obligations under Section 10.7 with respect to confidentiality and data security; 

(7) Insolvency. The insolvency of the Company as determined under the Bankruptcy Code; 

(8) Voluntary Bankruptcy. The filing by the Company of a petition of voluntary bankruptcy under the Bankruptcy
Code; the consenting of the Company to the filing of any bankruptcy or reorganization petition against the Company under the Bankruptcy Code; or the filing by the Company of a petition to reorganize the Company pursuant to the Bankruptcy Code; or

 (9) Involuntary Bankruptcy. The issuance of an order of a court of competent jurisdiction appointing a
receiver, liquidator, custodian or trustee of the Company or of a major part of the Company’s property, or the filing against the Company of a petition to reorganize the Company pursuant to the Bankruptcy Code, which order shall not have been
discharged or which filing shall not have been dismissed within 90 days after such issuance or filing. 
 (B) Events of
Default Requiring Previous Notice and Cure Opportunity for Termination. It shall be a Company Event of Default upon which the City may terminate this Service Contract, by notice to the Company and subject to the Company’s cure rights set
forth in subsection (C) of this Section, if: 
 (1) Any representation or warranty of the Company hereunder
was false or inaccurate in any material respect when made, and the legality of this Service Contract or the ability of the Company to carry out its obligations hereunder is thereby materially and adversely affected; 

(2) The Company suspends, ceases, stops or abandons its efforts to achieve Facility Completion or fails to continuously
and diligently prosecute the work necessary to achieve Facility Completion, exclusive of work stoppages due to an Uncontrollable Circumstance; 
 (3) The Company fails to obtain or maintain the insurance policies required by this Service Contract or to provide evidence of renewal; 

  
 42 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article VII – Breach, Default, Remedies and

Termination

  

(4) The Company fails to comply with the Performance Standards or any Applicable Law or unreasonably fails to comply with
the instructions of the City consistent with this Service Contract; 
 (5) The Company fails to perform GAC
Filter Exchanges within the time stipulated in this Service Contract; 
 (6) The Company fails to comply with the
security inquiry requirements set forth in Appendix 5; 
 (7) The Company fails to comply with the legal worker
requirements set forth in subsection 5.7(D) or the affirmative action requirements set forth in subsection 5.7(E); 
 (8) The Company assigns or transfers (or attempts to assign or transfer) this Service Contract or any right or interest herein without the City’s prior written consent; or 

(9) The Company otherwise fails to perform any other material obligation under this Service Contract (unless such default
is excused by an Uncontrollable Circumstance as and to the extent provided herein). 
 (C) Notice and Cure Opportunity.
The Company acknowledges that the City has an immediate termination right upon the occurrence of any of the defaults listed in subsection (A) of this Section and that the Company has no further right of notice or cure in such circumstances of
default. Conversely, no default listed in subsection (B) of this Section shall constitute a Company Event of Default giving the City the right to terminate this Service Contract for cause under this Section unless: 

(1) The City has given prior written notice to the Company stating that a specified default has occurred which gives the
City a right to terminate this Service Contract for cause under this Section, and describing the default in reasonable detail; and 
 (2) The Company has not initiated within a reasonable time (in any event not more than 20 days from the initial default notice) and continued with due diligence to carry out to completion all actions
reasonably necessary to correct the default and prevent its recurrence. 
 If the Company shall have initiated and continued with due diligence
to carry out to completion all actions required under Item (2), above, the default shall not constitute a Company Event of Default during such period of time (in any event not more than 60 days from the initial default notice) as the Company
shall continue with due diligence to carry out to completion all such actions. 
 (D) Other Remedies Upon Company Event of
Default. The right of termination provided under this Section upon a Company Event of Default is not exclusive. If this Service Contract is terminated by the City for a Company Event of

  
 43 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article VII – Breach, Default, Remedies and

Termination

  

Default, the City shall have the right to pursue a cause of action for actual damages and to exercise all other remedies which are available to it under this Service Contract or under Applicable
Law. Without limiting the generality of the foregoing, upon a Company Event of Default under this Section, the City may re-procure or repurchase GAC Services from another source and may recover the excess costs by deduction from an unpaid balance
otherwise due the Company or exercise any other remedy available under Applicable Law. In addition, the City shall have the right to purchase the Thermal GAC Reactivation Facility in accordance with Section 7.3 in the event of any Company Event
of Default. Except as specifically provided in subsection 7.3, the Company shall not be entitled to any compensation for services provided subsequent to receiving any notice of termination for a Company Event of Default under this Section.

 SECTION 7.3. PURCHASE OPTION IN THE EVENT OF COMPANY EVENT OF DEFAULT. 

(A) Option Exercisable Upon Company Event of Default. The City shall have the right (but not the obligation) at any time within
[90] days following the occurrence of a Company Event of Default, as defined in either subsection 7.2[A]1 or 7.2[A]2 or after a period of three (3) years from the scheduled completion of the Thermal GAC Reactivation Facility, subsection
7.2[B]2, subject to the Company’s notice and cure rights to the extent provided in subsection 7.2(B), at its option, to purchase the Thermal GAC Reactivation Facility, including the Thermal GAC Reactivation Facility Site, on an “as
is” basis at its fair market value. Upon any such purchase, the Company shall convey to the City all of its right, title and interest in the Thermal GAC Reactivation Facility and the Thermal GAC Reactivation Facility Site, subject to all
encumbrances on the Thermal GAC Reactivation Facility and Thermal GAC Reactivation Facility Site. If the City elects to exercise its option to purchase the Thermal GAC Reactivation Facility pursuant to this Section, the City shall give the Company
written notice of its intention to exercise its option to purchase the Thermal GAC Reactivation Facility, and the parties will promptly enter into good faith negotiations to determine the fair market value of the Thermal GAC Reactivation Facility
pursuant to subsection (B) of this Section. Any agreement executed in connection with any permissible transfer by the Company of any interest in the Thermal GAC Reactivation Facility shall preserve and perfect the rights of the City under this
Section as to all present and subsequent owners of the Thermal GAC Reactivation Facility. 
 (B) Determination of Fair Market
Value. The fair market value of the Thermal GAC Reactivation Facility shall be the value which would be obtained for the Thermal GAC Reactivation Facility in an arm’s length transaction between an informed and willing buyer under no
compulsion to buy, and an informed and willing seller, under no compulsion to sell, taking into account all encumbrances and based upon the then current condition of the Thermal GAC Reactivation Facility. 

(C) Appraisal Procedure. If the Company and the City are unable to agree on the fair market value of the Thermal GAC Reactivation
Facility within 60 days 

  
 44 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article VII – Breach, Default, Remedies and

Termination

  

from the commencement of negotiations, and if either the Company or the City shall give written notice to the other requesting determination of such fair market value by appraisal, the appraisal
shall be made by two independent appraisers who shall be qualified, nationally recognized appraisers of industrial property similar to the Thermal GAC Reactivation Facility, one of whom shall be chosen by the Company and one of whom shall be chosen
by the City, or if such two appraisers cannot agree, by a third appraiser chosen by the mutual consent of such two appraisers. If either party shall fail to appoint an appraiser within 30 days from written notice from the other party requesting such
appointment, or if such two appraisers cannot agree upon the amount of such appraisal and fail to appoint a third appraiser within 30 days, then either party may apply to a court to make such appointment. 

(D) Continuation of Service Pending Purchase and Completion of Facility. In the event the City elects to exercise its option to
purchase the Thermal GAC Reactivation Facility pursuant to this Section, the Company agrees to continue to provide the City, at the election of the City, GAC Services for the Local Service Price until such time as the purchase is effectuated and the
City is able to assume operations and maintenance of the Thermal GAC Reactivation Facility; provided, however, that the Company shall have no obligation to provide such services beyond the date which is 900 days following the Company Event of
Default. 
 SECTION 7.4. LIMITATION OF LIABILITY. 

(A) No Limitation of Liability Associated with Actual Damages of the City. The City, as a public entity supported by tax monies, in
execution of its public trust, cannot agree to waive any lawful or legitimate right to recover monies lawfully due it. Therefore, the Company agrees that it will not insist upon or demand any statement whereby the City agrees to limit in advance or
waive any right the City might have to recover actual lawful damages in any court of law under applicable Arizona law. Accordingly, this Service Contract establishes no such limitation of liability with respect to actual damages that may be incurred
by the City as a result of a failure of performance by the Company hereunder. 
 (B) Waiver of Consequential and Punitive
Damages. Notwithstanding any provision to the contrary herein, unless prohibited by Applicable Law, in no event shall either party hereto be liable to the other or obligated in any manner to pay to the other any consequential or punitive damages
based upon claims arising out of or in connection with the performance or non-performance of its obligations or otherwise under this Service Contract, or the material falseness or inaccuracy of any representation made in this Service Contract,
whether such claims are based upon contract, tort, negligence, warranty or other legal theory; provided, however, that the waiver of the foregoing damages under this subsection is intended to apply only to disputes and claims as between the City and
the Company. Nothing in this subsection shall limit the obligation of the Company to indemnify, defend and hold harmless the City Indemnitees for any consequential or punitive damages payable to third parties resulting from any act or circumstance
for which the Company is obligated to indemnify the City Indemnitees hereunder. 

  
 45 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article VII – Breach, Default, Remedies and

Termination

  

SECTION 7.5. CANCELLATION FOR CONFLICT OF INTEREST. This Service Contract is subject to cancellation for conflict of interest
pursuant to A.R.S. § 38-511, the pertinent provisions of which are incorporated into this Service Contract by reference. 

SECTION 7.6. CITY CONVENIENCE TERMINATION RIGHTS. The City agrees that it shall not give notice of termination for convenience
within the first two years of the Initial Term. Starting in year three of the Initial Term, the City may terminate this Service Contract for convenience, at its discretion, for any reason, so long as the City provides the Company with four years
advanced written notice of its intent to terminate this Service Contract for convenience; provided that the City shall pay the Company a convenience termination fee equal to the following schedule: 

(1) Notice given in year three of the Initial Term—$2,000,000 termination fee; 

(2) Notice given in year four of the Initial Term—$1,000,000 termination fee; 

(3) Notice given in year five of the Initial Term—$500,000 termination fee; and 

(4) Notice given in years six of the Initial Term—$250,000; and 

Notice given in years seven through ten of the Initial Term—No termination fee. 

. The following example illustrates the concept described above: The City decides in Year Three to cancel the contract for convenience.
The contract shall run four (4) years from the date of notice of termination. On the date four (4) years after the date of notice of termination, the City shall pay the Company the “Year Three Termination Fee” of $2,000,000, as
per Section 7.6[1], and the contract shall be considered terminated. 
 At any time during any Renewal Term, the City may
terminate this Service Contract for any reason, at its discretion, without cost to the City upon 60 days’ written notice to the Company. Should the City choose to terminate this Service Contract during a Renewal Term, the City shall remain
obligated to pay the Company for any pounds still under commitment for the term of the most recent Commitment of Volume. The parties acknowledge and agree that the City’s termination rights under this Section are for the sole convenience of the
City and are in addition to the City’s rights to terminate this Service Contract in the event of a Company Event of Default. The requirements of this Section shall not apply, and the City shall have no obligation to pay any termination fee to
the Company, in the event of a termination for a Company Event of Default pursuant to Section 7.2 or in the event of a termination of this Service Contract for non-appropriation pursuant to Section 6.4. 

  
 46 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article VII – Breach, Default, Remedies and

Termination

  

SECTION 7.7. In the instance where the City does not appropriate funds to continue this Service Contract for a given fiscal year, the
contract shall be considered suspended for that year. Under suspension, the contract shall not be considered terminated. The City shall adjust its commitment of pounds, volume forecast, and long term planning forecast to reflect that it shall not be
purchasing GAC Services during the suspension period. Once the City restores funding for the Service Contract, the City shall again revise its commitment of pounds, volume forecast, and long term planning forecast, and the contract shall no longer
be considered suspended. Should the City determine that funding will not be restored during the remaining term of the contract, then the City may terminate the contract for convenience pursuant to Section 7.5. Years lost to suspension may be
replaced via contract extensions per Article III, Section 3.2, at the discretion of the City. SURVIVAL OF CERTAIN PROVISIONS UPON TERMINATION. All representations and warranties of the parties hereto contained in Article II, the
Company’s indemnity obligations in this Service Contract with respect to events that occurred prior to the termination date of this Service Contract and all other provisions of this Service Contract that so provide shall survive the termination
of this Service Contract. No termination of this Service Contract shall (1) limit or otherwise affect the respective rights and obligations of the parties hereto accrued prior to the date of such termination; or (2) preclude either party
from impleading the other party in any Legal Proceeding originated by a third party as to any matter occurring during the Term. 

  
 47 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article VIII – Dispute Resolution

 
 ARTICLE VIII 

DISPUTE RESOLUTION 
 SECTION 8.1. DISPUTE RESOLUTION PROCEDURES. 
 (A) Generally. Except
as provided in subsection (F) of this Section, each party shall follow the dispute resolution procedures set forth in this Section to attempt to resolve and settle disputes between themselves concerning the rights, obligations and liabilities
of the parties. The dispute resolution procedures set forth in this Section are intended to encourage a negotiated resolution of disputes in a prompt and efficient manner without resort to litigation, which should be a last resort. 

(B) Informal Negotiations. The City Representative and the Service Manager shall initially and promptly enter into negotiations to
attempt to address and resolve any disputes that may arise concerning this Service Contract. In connection with such negotiations, the party asserting the dispute shall provide the other with a written description of the nature of the dispute, along
with reasonable supporting documentation. The parties shall consider involving senior representatives and other upper management personnel of each party in the informal negotiation process, as well as other representatives of the parties not
actively involved in the day-to-day activities associated with the dispute who might be able to take a broader look at the dispute in the context of the overall objectives of this Service Contract. Upon the expenditure of reasonable efforts towards
resolution of a dispute through such informal negotiations without reaching agreement, a party may declare that the informal negotiations have been exhausted and such party may request Non-Binding Mediation in accordance with this Section.

 (C) Rights to Request and Decline Non-Binding Mediation. Subject to the requirements of subsection (B) of this
Section, either party may request Non-Binding Mediation of any dispute arising under this Service Contract, whether technical or otherwise. The non-requesting party may decline the request in its reasonable discretion. If there is concurrence that
any particular matter shall be mediated, the provisions of this Section shall apply. The costs of such Non-Binding Mediation shall be divided equally between the City and the Company. 

(D) Procedure. The Mediator shall be a professional engineer, attorney or other professional mutually acceptable to the parties who
has no current or on-going relationship to either party. The Mediator shall have full discretion as to the conduct of the mediation. Each party shall participate in the Mediator’s program to resolve the dispute until and unless the parties
reach agreement with respect to the disputed matter or one party determines in its discretion that its interests are not being served by the mediation. 
 (E) Non-Binding Effect. Mediation is intended to assist the parties in resolving disputes over the correct interpretation of this Service Contract. No Mediator shall be empowered to render a
binding decision. 

  
 48 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article VIII – Dispute Resolution

 
 (F) Relation to Judicial Legal Proceedings. Nothing in
this Section shall operate to limit, interfere with or delay the right of either party under this Article to commence judicial Legal Proceedings upon a breach of this Service Contract by the other party, whether in lieu of, concurrently with, or at
the conclusion of any Non-Binding Mediation. 
 (G) Continuation During Disputes. The Company agrees that notwithstanding
the existence of any dispute between the parties, insofar as is possible, under the terms of this Service Contract, the Company shall continue to perform the obligations required of the Company during the continuation of any such dispute unless
enjoined or prohibited by an Arizona Court of competent jurisdiction. 
 SECTION 8.2. FORUM FOR LEGAL PROCEEDINGS. It is
the express intention of the parties that all Legal Proceedings related to this Service Contract or to any rights or any relationship between the parties arising therefrom shall be solely and exclusively initiated and maintained in federal or State
courts located in the Maricopa County, Arizona. The Company and the City each irrevocably consents to the jurisdiction of such courts in any such Legal Proceeding, and waives any objection it may have to so laying the jurisdiction of any such Legal
Proceeding. 

  
 49 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article IX – Insurance, Uncontrollable

Circumstances and Indemnification

  

ARTICLE IX 

INSURANCE, UNCONTROLLABLE CIRCUMSTANCES AND INDEMNIFICATION 
 SECTION 9.1. INSURANCE 
 (A) Company Insurance. At all times during
the Term, the Company shall obtain and maintain insurance policies in accordance with Appendix 9 (the “Required Insurance”). The Company shall pay all premiums with respect to the Required Insurance as the same become due and payable.
The Required Insurance shall be provided concurrently with the execution and delivery of this Service Contract and shall remain in effect for the entirety of the Term or for such longer period as may be specified in Appendix 9 in annually (or
other) renewable period. 
 (B) Insurers, Deductibles and City Rights. All Required Insurance shall be obtained and
maintained from financially sound and generally recognized responsible insurance companies meeting the qualifications specified in Appendix 9. The insurers providing Required Insurance shall be selected by the Company and authorized to write such
insurance in the State. The insurance coverage may be written with reasonable deductible amounts within any limits specified in Appendix 9, and the Company shall be responsible for any deductible amounts. The Company shall also be responsible
for all self-insured retentions contained in its insurance coverages, as well as any excluded losses if such losses are within the liability of the Company hereunder. All policies shall be written on the forms, in accordance with the requirements
and in the manner set forth in Appendix 9. 
 (C) Maintenance Of Insurance Coverage. The Company shall comply with
all applicable Required Insurance and take all steps necessary to assure the continued effectiveness of the Required Insurance. The failure of the Company to obtain and maintain any Required Insurance shall not relieve the Company of its liability
for any losses intended to be insured thereby. Should any failure to provide continuous coverage occur, the Company shall indemnify, defend, save and hold harmless the City Indemnitees in the manner provided in Section 9.3, from and against any
Loss-and-Expense arising out of such failure 
 (D) Insurance Does Not Limit Liability. Neither the maintenance of the
Required Insurance, nor any maximum policy limits, shall be construed to limit the Company’s liability under this Service Contract. 
 SECTION 9.2. UNCONTROLLABLE CIRCUMSTANCES. 
 (A) Extent of Relief
Available to the Company. Except as provided in this subsection, the only relief the Company shall be entitled to with respect to the occurrence of an Uncontrollable Circumstance is an extension to the Scheduled Facility Completion Date or the
Extension Period, an extension of the time required to perform a GAC Filter Exchange or relief from a specific performance obligation associated with the GAC Services, each subject to the terms and conditions of this

  
 50 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article IX – Insurance, Uncontrollable

Circumstances and Indemnification

  

Section. The Company shall be entitled to an equitable adjustment to the unit prices set forth in Section 6.1 only in the event of a Change in Law and only to the extent provided in this
Section. The Company shall be entitled to the Non-Local Service Price rather than the Local Service Price for the performance of GAC Services that would otherwise be subject to the Local Service Price pursuant to the terms and conditions of this
Service Contract in the event of the occurrence of an Uncontrollable Circumstance that prevents the Company from performing GAC thermal reactivation services at the Thermal GAC Reactivation Facility, subject to the terms and conditions of this
Section. 
 (B) Relief from Obligations. Except as expressly provided under the terms of this Service Contract, neither
party to this Service Contract shall be liable to the other for any loss, damage, delay, default or failure to perform any obligation to the extent it results from an Uncontrollable Circumstance. The parties agree that the relief for an
Uncontrollable Circumstance described in this Section shall apply to all obligations in this Service Contract, except to the extent specifically provided otherwise, notwithstanding that such relief is specifically mentioned with respect to
certain obligations in this Service Contract but not other obligations. The occurrence of an Uncontrollable Circumstance shall not excuse or delay the performance of a party’s obligation to pay monies previously accrued and owing under this
Service Contract, or to perform any obligation hereunder not affected by the occurrence of the Uncontrollable Circumstance. 

(C) Notice and Mitigation. The party that asserts the occurrence of an Uncontrollable Circumstance shall notify the other party by
telephone, facsimile or email (with confirmation of receipt), on or promptly after the date the party experiencing such Uncontrollable Circumstance first knew of the occurrence thereof, followed within 15 days by a written description of:
(1) the Uncontrollable Circumstance and the cause thereof (to the extent known); and (2) the date the Uncontrollable Circumstance began, its estimated duration, the estimated time during which the performance of such party’s
obligations hereunder shall be delayed, or otherwise affected. As soon as practicable after the occurrence of an Uncontrollable Circumstance, the affected party shall also provide the other party with a description of: (i) the equitable relief
requested, if any; (ii) any areas where costs might be reduced and the approximate amount of such cost reductions; and (iii) its estimated impact on the other obligations of such party under this Service Contract. The affected party shall
also provide prompt written notice of the cessation of such Uncontrollable Circumstance. Whenever such act, event or condition shall occur, the party claiming to be adversely affected thereby shall, as promptly as practicable, use all reasonable
efforts to eliminate the cause therefor, reduce costs and resume performance under this Service Contract. While the Uncontrollable Circumstance continues, the affected party shall give notice to the other party, before the first day of each
succeeding month, updating the information previously submitted. The party claiming to be adversely affected by an Uncontrollable Circumstance shall bear the burden of proof, and shall furnish promptly any additional documents or other information
relating to the Uncontrollable Circumstance reasonably requested by the other party. 

  
 51 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article IX – Insurance, Uncontrollable

Circumstances and Indemnification

  

(D) Conditions to Relief. In the event of an Uncontrollable Circumstance, the Company shall, subject to the limitations
specifically provided for in this Service Contract, be entitled to relief in accordance with subsection (A) of this Section, but only to the minimum extent reasonably forced on the Company by the event, and the Company shall perform all other
services under this Service Contract. In the event that the Company believes it is entitled to any relief on account of an Uncontrollable Circumstance, it shall furnish the City written notice of the specific relief requested and detailing the event
giving rise to the claim within 30 days after the giving of notice delivered pursuant to subsection (C) of this Section, or if the specific relief cannot reasonably be ascertained and such event detailed within such 30-day period, then within
such longer period within which it is reasonably possible to detail the event and ascertain such relief. Within 30 days after receipt of such a timely submission from the Company, the City shall issue a written determination as to the extent, if
any, it concurs with the Company claim for performance or schedule relief, and the reasons therefor. The agreement of the parties as to the specific relief to be given the Company hereunder on account of an Uncontrollable Circumstance shall be
evidenced by a Contract Administration Memorandum or Amendment, as applicable. 
 (E) Acceptance of Relief Constitutes
Release. The Company’s acceptance of any performance, price or schedule adjustment under this Section shall be construed as a release of the City by the Company (and all persons claiming by, through, or under the Company) from any and
all losses or expenses resulting from, or otherwise attributable to, the event giving rise to the adjustment claimed. 
 SECTION
9.3. INDEMNIFICATION. 
 (A) General Indemnity. The Company shall indemnify, defend, save and hold harmless the
City and its officers, officials, agents, and employees (each hereinafter referred to as a “City Indemnitee”) from and against any and all claims, actions, liabilities, damages, losses, or expenses (including court costs, attorneys’
fees, and costs of claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible or intangible property caused, or alleged to be
caused, in whole or in part, by (1) the negligent or willful acts or omissions of; (2) the failure to comply with Applicable Law by; or (3) any failure to perform its obligations under this Service Contract by the Company or any of
its owners, officers, directors, agents, employees or subcontractors. This indemnity includes any claim or amount arising out of or recovered under the Workers’ Compensation Law or arising out of the failure of the Company to comply with
Applicable Law. It is the specific intention of the parties that the City Indemnitee shall, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the City Indemnitee, be indemnified by the Company from
and against any and all Claims caused or alleged to be caused, in whole or in part, by the negligent or willful acts or omissions of, or the failure to comply with Applicable Law or this Service Contract by, the Company or any of its owners,
officers, directors, agents, employees or subcontractors. It is agreed that the Company will be responsible for primary loss investigation, defense and judgment costs where this indemnification is applicable. In consideration of the award of this
Service Contract, the Company agrees to waive all rights of subrogation against the City, its officers, officials, agents and employees for losses arising from the work performed by the Company for the City. 

  
 52 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	 Article IX – Insurance, Uncontrollable

Circumstances and Indemnification

  

(B) Patent, Copyright and Trademark Indemnity. The Company shall indemnify, defend, save and hold harmless the City Indemnitees
against any Claims, including costs and expenses, for infringement of any patent, trademark or copyright or other proprietary rights of any third parties arising out of contract performance or use by the City of materials furnished or work performed
under this Service Contract. The Company agrees upon receipt of notification to promptly assume full responsibility for the defense of any suit or proceeding which is, has been, or may be brought against the City Indemnitees and its agents for
alleged infringement, as well as for the alleged unfair competition resulting from similarity in design, trademark or appearance of goods by reason of the use or sale of any goods furnished under this Service Contract and the Company further agrees
to indemnify the City Indemnitees against any and all expenses, losses, royalties, profits and damages including court costs and attorney’s fees resulting from the bringing of such suit or proceedings including any settlement or decree of
judgment entered therein. Any counsel selected by the Company shall be competent in the area of law at issue and shall offer timely and professional representation. It is expressly agreed by the Company that these covenants are irrevocable and
perpetual. 
 (C) Other Indemnities. The Company shall also indemnify, defend, save and hold harmless the City Indemnitees
as and to the extent provided elsewhere in this Service Contract. 

  
 53 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article X – Miscellaneous

 
 ARTICLE X 

MISCELLANEOUS 

SECTION 10.1. RELATIONSHIP OF THE PARTIES. The Company is an independent contractor of the City and the relationship between the
parties shall be limited to performance of this Service Contract in accordance with its terms. This Service Contract is not intended to constitute, create, give rise to or otherwise recognize a joint venture agreement or relationship, partnership or
formal business organization of any kind, and the rights and obligations of the parties shall be only those expressly set forth in this Service Contract. Neither party shall have any responsibility with respect to the services to be provided or
contractual benefits assumed by the other party. Nothing in this Service Contract shall be deemed to constitute either party a partner, agent or legal representative of the other party. No liability or benefits, such as workers compensation, pension
rights or liabilities, or other provisions or liabilities arising out of or related to a contract for hire or employer/employee relationship shall arise or accrue to any party’s agent or employee as a result of this Service Contract or the
performance thereof. The parties agree that no persons supplied by the Company in the performance of Company’s obligations under this Service Contract are considered to be the City’s employees and that no rights of City civil service,
benefits, retirement or personnel rules accrue to such persons. The Company shall have total responsibility for all salaries, wage bonuses, retirement, withholdings, workmen’s compensation, occupational disease compensation, unemployment
compensation, other employee benefits and all Taxes and premiums appurtenant thereto concerning such persons, and shall save and hold the City harmless with respect thereto. 
 SECTION 10.2. ASSIGNMENT AND DELEGATION. No right or interest in this Service Contract nor monies due hereunder shall be assigned in whole or in part without written permission of the City, and no
delegation of any duty of the Company shall be made without prior written permission of the Department Director, which may be withheld for good cause. Notwithstanding the forgoing, no permission is needed for the Company to assign this Service
Contract and/or title to the GAC Thermal Reactivation Facility to any wholly-owned subsidiary or other affiliate of the Company so long as such assignment does not release the Company of its obligations hereunder. Any assignment or delegation made
in violation of this Section shall be void. Notwithstanding the foregoing, the Company may, upon giving the City one year prior written notice, assign this GAC Service Contract and may transfer the GAC Thermal Reactivation Facility to a third party
for legitimate business purposes, so long as such third party is in excellent financial standing, has an A bond rating, is seasoned and experienced in the nature of this work, and competent and capable of carrying out all terms and conditions of
this GAC Service Contract. 
 SECTION 10.3. BINDING EFFECT. This Service Contract shall inure to the benefit of the City
and its successors and assigns and shall be binding upon the Company and its permitted successors and assigns. 

  
 54 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article X – Miscellaneous

 
 SECTION 10.4. CONTRACT ADMINISTRATION. 

(A) Administrative Communications. The parties recognize that a variety of contract administrative matters will routinely arise
during the Term. These matters will by their nature involve requests, notices, questions, assertions, responses, objections, reports, claims, and other communications made personally, in meetings by phone, by mail and by electronic and computer
communications. The purpose of this Section is to set forth a process by which the resolution of the matters at issue in such communications, once resolution is reached, can be formally reflected in the common records of the parties so as to
permit the orderly and effective administration of this Service Contract. 
 (B) Contract Administration Memoranda. The
principal formal tool for the administration of routine matters arising under this Service Contract between the parties which do not require an Amendment shall be a “Contract Administration Memorandum”. A Contract Administration Memorandum
shall be prepared, once all preliminary communications have been concluded, to evidence the resolution reached by the City and the Company as to matters of interpretation and application arising during the course of the performance of their
obligations hereunder. Such matters may include, for example: (1) issues as to the meaning, interpretation, application or calculation to be made under any provision hereof; (2) notices, waivers, releases, satisfactions, confirmations,
further assurances and approvals given hereunder; and (3) other similar contract administration matters. 
 (C)
Procedures. Either party may request the execution of a Contract Administration Memorandum. When resolution of the matter is reached, a Contract Administration Memorandum shall be prepared by or at the direction of the City reflecting the
resolution. The Contract Administration Memorandum shall be numbered, dated, signed by the City Representative and the Service Manager, and, at the request of the City, co-signed by a Senior Corporate Representative for the Company. The City and the
Company each shall maintain a parallel, identical file of all Contract Administration Memoranda, separate and distinct from all other documents relating to the administration and performance of this Service Contract. 

(D) Effect. The executed Contract Administration Memoranda shall serve to guide the ongoing interpretation and performance of this
Service Contract. Any material change, alteration, revision or modification of this Service Contract, however, shall be effectuated only through a formal Amendment authorized, approved or ratified by resolution of the governing body of the City and
properly authorized by the Company. 
 SECTION 10.5. AMENDMENTS, CHANGES AND MODIFICATIONS. This Service Contract may be
modified only by a written Amendment signed by the Department Director and persons duly authorized to enter into contracts on behalf of the Company. The City reserves the right at any time to make changes in any one or more of the following: a)
specifications, including the Performance Standards; and b) implementation schedule. If the change causes an increase or decrease in the cost of 

  
 55 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article X – Miscellaneous

 
 
or the time required for performance, an equitable adjustment may be made in the price or delivery schedule, or both. Any claim for adjustment shall be deemed waived unless asserted in writing
within thirty (30) days from the receipt of the change. Price increases or extensions of delivery time shall not be binding on the City unless evidenced in writing and approved by the Department Director prior to the institution of the change.

 SECTION 10.6. AUDIT; BOOKS AND RECORDS. 
 (A) Audit. All payments whatsoever by the City to the Company and all services of the Company shall be subject to audit at any time by the City. The Company will provide the evidence necessary to
substantiate charges related to this Service Contract and allow the City access to the Company’s books and records. The Company shall require all Subcontractors to comply with the provisions of this Section and include the requirements hereof
in the written contract between the Company and the Subcontractor. 
 (B) Books and Records. The Company shall prepare and
maintain proper, accurate and complete books and records regarding the GAC Services and all other transactions related to this Service Contract, including all books of account, bills, vouchers, invoices, personnel rate sheets, cost estimates and bid
computations and analyses, subcontracts, time books, daily job diaries and reports, correspondence, and any other documents showing all acts and transactions in connection with or relating to or arising by reason of this Service Contract, any
Subcontract or any operations or transactions in which the City has or may have a financial or other material interest hereunder. The Company and its Subcontractors shall provide such books and records for inspection, audit and reproduction for all
such purposes within two weeks of request by the City. All financial records of the Company and its Subcontractors shall be maintained in accordance with generally accepted accounting principles and generally accepted auditing standards. The Company
and its Subcontractors shall maintain such books and records for at least five years after termination of this Service Contract, or such longer period during which any Legal Proceeding with respect to this Service Contract commenced within five
years after termination may be pending. The provisions of this Section shall survive termination of this Service Contract. 

(C) Overpayment. In the event an audit by the City shall determine that the City has overpaid the Company, the Company, upon
demand, shall refund to the City the amounts overpaid or undocumented. If the overpayment exceeds one percent (1%) of the total amount that should have been properly paid by the City during the period audited, then the Company shall, in
addition, reimburse the City for any and all fees and costs incurred in connection with the inspection or audit. Payments to the Company shall in no way affect the Company’s obligation hereunder or the right of the City to obtain a refund of
any payment to the Company which is in excess of that to which it was lawfully entitled. 
 SECTION 10.7. CONFIDENTIALITY AND
DATA SECURITY. 

  
 56 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article X – Miscellaneous

 
 (A) Generally. All data, regardless of form, including
originals, images and reproductions, prepared by, obtained by, or transmitted to the Company in connection with this Service Contract is confidential, proprietary information owned by the City. Except as specifically provided in this Service
Contract, the Company shall not disclose data generated in the performance of services under this Service Contract to any third person without the prior written consent of the City Manager, or his/her designee. 

(B) Securing Information. Personal identifying information, financial account information, or restricted City information, whether
electronic format or hard copy, must be secured and protected at all times to avoid unauthorized access. At a minimum, the Company must encrypt and/or password protect electronic files. This includes data saved to laptop computers, computerized
devices or removable storage devices. When personal identifying information, financial account information, or restricted City information, regardless of its format, is no longer necessary, the information must be redacted or destroyed through
appropriate and secure methods that ensure the information cannot be viewed, accessed, or reconstructed. 
 (C) Compromise of
Confidentiality. In the event that data collected or obtained by the Company in connection with this Service Contract is believed to have been compromised, the Company shall notify the City Privacy Officer immediately. The Company agrees to
reimburse the City for any costs incurred by the City to investigate potential breaches of this data and, where applicable, the cost of notifying individuals who may be impacted by the breach. The Company agrees that the requirements of this Section
shall be incorporated into all Subcontracts. It is further agreed that a violation of this Section shall be deemed to cause irreparable harm that justifies injunctive relief in court. A violation of this Section may result in immediate termination
of this Service Contract without notice. 
 (D) Indemnification. The Company shall indemnify, defend, save and hold
harmless the City Indemnitees against any Claims for any loss caused, or alleged to be caused, in whole or in part, by the Company’s or any of its owners’, officers’, directors’, agents’ or employees’ failure to comply
with the requirements of this Section regarding confidentiality and data security. This indemnity includes any Claim arising out of the failure of the Company to conform to any federal, state or local law, statute, ordinance, rule, regulation or
court decree. 
 SECTION 10.8. SOLICITATION 
 (A) Covenant Against Contingent Fees. The Company warrants that no person or selling agent has been employed or retained to solicit or secure this Service Contract upon an agreement or
understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employers or bona fide established commercial or selling agencies maintained by the Company for the purpose of securing business. For breach or violation
of this warranty, the City shall have the right to annul this Service Contract without liability or in its discretion to deduct from the contract price a consideration, or otherwise recover the full amount of such commission, brokerage or contingent
fee. 

  
 57 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article X – Miscellaneous

 
 (B) Gratuities. The City may, by written notice to the
Company, cancel this Service Contract if it is found that gratuities, in the form of entertainment, gifts or otherwise, were offered or given by the Company or any agent or representative of the Company, to any officer or employee of the City making
any determinations with respect to the performing of this Service Contract. In the event this Service Contract is canceled by the City pursuant to this provision, the City shall be entitled, in addition to any other rights and remedies, to recover
or withhold from the Company the amount of the gratuity. 
 SECTION 10.9. COMPLIANCE WITH MATERIAL AGREEMENTS. The
Company shall comply with its obligations under agreements of the Company which are material to the performance of its obligations under this Service Contract, including all Subcontracts. 

SECTION 10.10. CO-OP USE OF CONTRACT. In addition to the City, this Service Contract may be extended for use by other
municipalities, government agencies and governing bodies, including the Arizona Board of Regents, and political subdivisions of the State. Any such usage by other entities must be in accord with the ordinances, charter and/or rules and regulations
of the respective entity and the approval of the Company. 
 SECTION 10.11. NOTICES. 

(A) Procedure. All notices, reports, demands or written communications given pursuant to the terms of this Agreement shall be in
writing and: (1) delivered in person; (2) transmitted by certified mail, return, receipt requested, postage prepaid or by overnight courier utilizing the services of a nationally-recognized overnight courier service with signed
verification of delivery; or (3) given by facsimile transmission, if a signed original is deposited in the United States mail within two days after transmission. Notices shall be deemed given only when actually received at the address first
given below with respect to each party. Either party may, by like notice, designate further or different addresses to which subsequent notices shall be sent. 
 (B) City Notice Address. Notices required to be given to the City shall be addressed as follows: 
 City of Phoenix 
 Water Services Department 

Carlos Padilla, Assistant Director 
 200 West Washington Street 

  
 58 

			
	 Service Contract for the Supply,
 Placement, Removal and Thermal Reactivation of
 Granular Activated Carbon

 
	  	Article X – Miscellaneous

 
 9th Floor 

Phoenix, AZ 85003 

with a copy to: 

City of Phoenix 

Office of City Attorney 
 Roza Ferdowsmakan, Assistant City Attorney 
 200 West Washington Street 

13th Floor 
 Phoenix, AZ 85003 
 (C) Company Notice Address. Notices required to be given
to the Company shall be addressed as follows: 
  

					
		 	 	  	
		 	 	  	
		 	 	  	
		 	Attn:                             
                                         
      	  	

 with a copy to: 
  

					
		 	 	  	
		 	 	  	
		 	 	  	
		 	Attn:                             
          	  	

 [SIGNATURE PAGE FOLLOWS] 

  
 59 

 IN WITNESS WHEREOF, the parties have caused this Service Contract to be executed by their
duly authorized representatives as of the day and year first above written. 
  

									
	CITY OF PHOENIX, ARIZONA	 		 	CALGON CARBON CORPORATION
					
	By:	 	/s/ Neil Mann	 		 	By:	 	/s/ Robert P. O’Brien
					
	Name:	 	/s/ Neil Mann	 		 	Name:	 	/s/ Robert P. O’Brien
		 	Printed	 		 		 	Printed

  

					
		 		 	[Company Seal]
			
	ATTEST:	 		 	ATTEST:
			
	  	 		 	/s/ Richard D. Rose
	City Clerk	 		 	

  

			
		
	Printed Name:	 	/s/ Richard D. Rose

  

	
	APPROVED AS TO FORM:
	
	  
	City General Counsel

  

 
 APPENDICES 

TO THE 
 SERVICE
CONTRACT 
 FOR THE 
 SUPPLY, PLACEMENT, REMOVAL AND THERMAL REACTIVATION 
 OF GRANULAR ACTIVATED CARBON

 between 

THE CITY OF PHOENIX, ARIZONA 
 and 
 CALGON CARBON CORPORATION 

Dated as of              

 
  

 
  

 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	 APPENDIX 1
	  	THERMAL GAC REACTIVATION FACILITY SITE AND DESIGN AND	  			
	 CONSTRUCTION PLAN
	  	 	A1-1	  
			
	 1.1
	  	Construction Plan	  			
	 APPENDIX 2
	  	THERMAL GAC REACTIVATION FACILITY COMPLETION SCHEDULE	  	 	A2-1	  
			
	 2.1
	  	Schedule	  			
	 APPENDIX 3
	  	PERFORMANCE STANDARDS	  	 	A3-1	  
			
	 3.1
	  	FILTER PREPARATION	  	 	A3-1	  
			
	 3.2
	  	THERMALLY REGENERATED GAC REPLACEMENT	  	 	A3-1	  
			
		  	3.2.1 Placing GAC	  	 	A3-1	  
			
		  	3.2.2 Properties of Thermally Reactivated Carbon.	  	 	A3-1	  
			
		  	3.2.3 GAC Media Washing	  	 	A3-2	  
			
	 3.3
	  	REFERENCE STANDARDS	  	 	A3-2	  
			
	 3.4
	  	VIRGIN GAC	  	 	A3-3	  
			
		  	3.4.1 Quality	  	 	A3-3	  
			
		  	3.4.2 Size	  	 	A3-4	  
			
	 APPENDIX 4
	  	INFORMATION CONCERNING WATER TREATMENT FACILITIES	  	 	A4-1	  
			
	 4.1
	  	WATER TREATMENT FACILITIES IDENTIFIED	  	 	A4-1	  
			
	 4.2
	  	ESTIMATED THERMAL GAC REACTIVATION QUANTITIES	  	 	A4-1	  
			
	 APPENDIX 5
	  	EMPLOYEE BACKGROUND SCREENING	  	 	A5-1	  
			
	 5.1
	  	COMPANY AND SUBCONTRACTOR WORKER BACKGROUND SCREENING	  	 	A5-1	  
			
		  	5.1.1 Security Generally	  	 	A5-1	  
			
		  	5.1.2 Security Inquiries	  	 	A5-1	  
			
		  	5.1.3 Additional City Rights Regarding Security Inquiries	  	 	A5-1	  
			
		  	5.1.4 Terms Applicable to All of the Company’s Agreements and Subagreements	  	 	A5-1	  
			
	 5.2
	  	Materiality of Security Inquiries Provisions	  	 	A5-1	  
			
	 5.3
	  	Document/Information Release	  	 	A5-2	  
			
	 5.4
	  	Confidentiality of Plans	  	 	A5-2	  
			
	 APPENDIX 6
	  	WATER TREATMENT FACILITIES ACCESS CONTROLS	  	 	A6-1	  
			
	 6.1
	  	EMPLOYEE ACCESS	  	 	A6-1	  
			
		  	6.1.1 Access Generally	  	 	A6-1	  
			
		  	6.1.2 Restricted Areas	  	 	A6-1	  
			
		  	6.1.3 Authorized Employee Access	  	 	A6-1	  
			
	 6.2
	  	BADGE AND KEY ACCESS REQUIREMENTS	  	 	A6-1	  
			
		  	6.2.1 Badge Application Procedures	  	 	A6-1	  
			
		  	6.2.2 Stolen or Lost Badges or Keys	  	 	A6-1	  
			
		  	6.2.3 Return of Badges or Keys	  	 	A6-1	  
			
		  	6.2.4 Badge and Key Fees	  	 	A6-2	  
			
	 6.3
	  	COMPANY’S DEFAULT; LIQUIDATED DAMAGES; RESERVATION OF REMEDIES FOR MATERIAL BREACH	  	 	A6-3	  
			
	 APPENDIX 7
	  	APPROVED SUBCONTRACTORS	  	 	A6-4	  
			
	 7.1
	  	Approved Subcontractors	  			
			
	 APPENDIX 8
	  	PRICE ADJUSTMENTS	  	 	A8-1	  
			
	 8.1
	  	LOCAL SERVICE PRICE ADJUSTMENTS	  	 	A8-1	  
			
		  	8.1.1 Annual Adjustment to Local Service Price	  	 	A8-1	  
			
		  	8.1.2 Natural Gas Adjustment Factor	  	 	A8-1	  

  
 A-i

							
			
	 	  	8.1.3 CPI Adjustment Factor	  	A8-2	 
			
	 8.2
	  	ANNUAL ADJUSTMENT TO NON-LOCAL SERVICE PRICE	  	 	A8-2	  
			
	 8.3
	  	ADDITIONAL VIRGIN GAC PRICE ADJUSTMENTS	  	 	A8-2	  
			
		  	8.3.1 Annual Adjustment to Additional Virgin GAC Price	  	 	A8-2	  
			
		  	8.3.2 Petroleum Index Adjustment Factor	  	 	A8-2	  
			
		  	8.3.3 Organic Chemical Index Adjustment Factor	  	 	A8-3	  
			
	 8.4
	  	INDICES	  	 	A8-3	  
			
	 8.5
	  	NON-LOCAL FUEL SURCHARGE	  	 	A8-3	  
			
	 APPENDIX 9
	  	INSURANCE REQUIREMENTS	  	 	A9-1	  
			
	 9.1
	  	INSURANCE REQUIREMENTS GENERALLY	  	 	A9-1	  
			
	 9.2
	  	MINIMUM SCOPE AND LIMITS OF INSURANCE	  	 	A9-1	  
			
		  	9.2.1 Generally	  	 	A9-1	  
			
		  	9.2.2 Commercial General Liability – Occurrence Form	  	 	A9-1	  
			
		  	9.2.3 Worker's Compensation and Employers' Liability	  	 	A9 1	  
			
		  	9.2.4 Professional Liability (Errors and Omissions Liability)	  	 	A9-2	  
			
		  	9.2.5 Automobile Liability	  	 	A9 2	  
			
	 9.3
	  	ADDITIONAL INSURANCE REQUIREMENTS	  	 	A9-2	  
			
	 9.4
	  	NOTICE OF CANCELLATION	  	 	A9-2	  
			
	 9.5
	  	ACCEPTABILITY OF INSURERS	  	 	A9-2	  
			
	 9.6
	  	VERIFICATION OF COVERAGE	  	 	A9-2	  
			
	 9.7
	  	SUBCONTRACTORS	  	 	A9-3	  

  
 A-ii

 APPENDIX 1 
 THERMAL GAC REACTIVATION FACILITY SITE AND DESIGN AND CONSTRUCTION PLAN 
 Construction
Plan 
 Preliminary (basic 30%) design engineering for the NSF-compliant Maricopa potable activated carbon reactivation facility was
completed by Calgon Carbon during a six month period in 2010. This design features technology based upon Calgon Carbon’s worldwide experience at multiple locations and will duplicate the process used at our Blue Lake, California plant which
presently reactivates spent carbons from several Arizona municipalities. The design package includes material balances, flow sheets, process and instrumentation diagrams, equipment arrangements in 3-D AutoCAD, power & controls, and
specifications for long lead-time equipment. Logistics for incoming spent carbon and outgoing reactivated carbon have been evaluated and integrated into the plant design. Utility requirements are defined to expedite connection to local utilities.
NSF considerations are an integral aspect of the plant’s layout, as this facility shall be NSF-certified from the first day of commercial operation, consistent with standard Calgon Carbon operating procedures for all of its North American
custom reactivation facilities. 
 Calgon Carbon plans center on a modular design utilizing standardized kiln designs. The Maricopa facility
will be initially constructed with a configuration of kilns necessary to provide dedicated capacity to our local partners with a reasonable amount of available capacity to support short term growth and demand fluctuations. Later, as demand grows for
GAC reactivation in Arizona and surrounding states, the facility will be expanded by installing additional modular kilns as needed. Any additional demand from new customers that cannot be supplied from the Maricopa facility during an expansion phase
will be accommodated by diverting the additional demand to one or more of Calgon Carbon’s other NSF-certified potable reactivation facilities, to ensure that we do not compromise the committed capacity to our local partners using the Maricopa
facility. The advantage of the combination of our modular approach and the availability of alternate company-owned assets allowed Calgon Carbon the unique ability to accommodate step change growth in demand with quick and effective
“bolt-on” production capacity that ensures the requisite dedication of local capacity necessary to meet that demand with no disruption regardless of the level of timing or growth in market demand. 

Environmental air permitting, identified as a critical path item for the project schedule, is nearly complete due to permit application and follow up
submittals made in mid-2010. All plant inputs, process, control devices, and expected emissions have been reviewed by the Maricopa Air Quality Department with the understanding that the facility could be located anywhere in Maricopa County. A final
submittal will be made specifying the site and the permit will be in place well before construction is scheduled to begin. 
 The Title V permit
requires the most lead time. Other permits, including Storm Water and Construction Dust Control will be required to expedite the construction phase of the project. These permits have significantly shorter application processing times and, given that
basic engineering has been completed, submission of the permit applications will occur when detail engineering begins. 

  
 A1-1

 Detail engineering will be performed by a local, full service engineering firm with an office and experience
in the Phoenix area. Design will include site grading, roadways, foundations, architectural, structural, process equipment, piping, utilities, electrical, and instrumentation. 
 Procurement of critical equipment, including kilns and air emission controls, will begin immediately using specifications developed during basic engineering and approved during air permitting. 

Construction contracting will be directed by Calgon Carbon in consultation with a local engineering firm. The construction method will be
design-bid-build, as it the norm for our construction projects. 
 Calgon Carbon’s commitment of resources to this project has put the
construction of the GAC Reactivation Facility on the fast track, allowing for start-up of the plant to occur at the earliest possible date and to best coincide with the needs of the City of Phoenix and the surrounding communities. 

People 
 The overall construction effort
will be led by Calgon Carbon’s Louis Knapil, Director Americas Facilities Engineering. Mr. Knapil has over 35 years of experience at Calgon Carbon and has been responsible for major construction projects, new plants and capital
improvements, since the 1980’s. Mr. Knapil and his team will use Calgon Carbon’s project systems to directly manage the design and construction of the GAC Reactivation plant. 
 A full-service engineering firm will provide the detail engineering as well as construction engineering. The firm will have over ten years experience in design and construction experience and is based in
Phoenix. This firm will also lead remaining permitting efforts and aid in contractor evaluation, selection and management. 
 Procurement will
be handled by Calgon Carbon’s Gregory Ringeling. Mr. Ringeling has had capital equipment purchasing responsibilities for over 10 years at Calgon. Construction contractors from the central Arizona region will be evaluated and selected based
on experience, references, performance on similar projects, safety, and other considerations. Contractors will be directly responsible to Calgon Carbon. 
 The plant will be fully staffed and trained at existing Calgon locations during construction. The Plant Manager of the Blue Lake, CA plant will have operating responsibility to ensure effective knowledge
transfer from the existing reactivation operation. The plant staff will participate in commissioning activities to allow a speedy and smooth transition from construction to full operation. 

  
 A1-2

 APPENDIX 2 
 THERMAL GAC REACTIVATION FACILITY COMPLETION SCHEDULE 
  

							
	 Task
	  	 	  	 Start
	  	 Finish

	 Design
	  	30% Design	  		  	complete
	 Permitting
	  	Air	  		  	complete
		  	Other	  		  	5/1/2012
	 Contract award
	  		  		  	1/31/2012
	 Land purchase
	  		  		  	3/31/2012
	 Design
	  	60% Design	  	1/31/2012	  	2/31/2012
		  	90% Design	  	1/31/2012	  	3/31/2012
		  	100% Design	  	1/31/2012	  	6/1/2012
	 Procurement
	  	Major Equipment	  	1/31/2012	  	11/1/2012
		  	Support Equipment	  	1/31/2012	  	11/1/2012
	 Construction
	  		  	8/1/2013	  	4/30/2013
	 Commissioning
	  		  	3/31/2013	  	4/30/2013
	 NSF Certification
	  		  	5/1/2013	  	5/30/2013
	 Operational
	  		  		  	6/1/2013

  
 A2-1

 APPENDIX 3 
 PERFORMANCE STANDARDS 

 APPENDIX 3 
 PERFORMANCE STANDARDS 
  

	3.1	FILTER PREPARATION 

 The
Company shall thoroughly clean each filter before any GAC is placed and shall keep each filter clean throughout placement operations. The Company shall thoroughly clean and sweep the filter walls and underdrains and shall verify that all openings of
the underdrain porous plates are open and free of obstructions. The Company shall keep GAC unloading area external to each filter clean throughout the placement operations. 

 

	3.2	THERMALLY REGENERATED GAC REPLACEMENT 

  

	3.2.1	Placing GAC. 

 Placing of
GAC shall conform to AWWA B604-05 and AWWA B100-09, as applicable. 
 The procedure for placement of the thermally regenerated
GAC media shall be reviewed and approved by the City prior to media placement in the basins. 
 Special care shall be taken in
transporting and placing the GAC to prevent it from being contaminated and to prevent damage to the GAC. 
 The Company shall
mark the top level of the GAC before removing the spent GAC from the filters. During delivery, the Company shall ensure that the delivered GAC is filled up to the marked top level in the filter. To ensure proper comparison the filter bed shall be
backwashed and drained prior to marking the media depth. Makeup Virgin GAC shall be provided by the Company to compensate for any loss of GAC that might have occurred during transportation, handling, and thermal reactivation of the spent GAC.

 Basins shall be filled to a water depth 12-15 inches above the top surface of the underdrain. 

GAC media shall be placed in 12-inch increments and made level over the entire bed area. 

The basin may be flooded with water to use as a leveling gauge for each layer of material. 

 

	3.2.2	Properties of Thermally Reactivated Carbon. 

 The thermally reactivated carbon shall have the following properties prior to placement in the plants filters: 
  

	 	1.	Iodine Number – Target value of greater than or equal to 90% of the existing virgin carbon Iodine Number, with a minimum value of 800. It is assumed that some
fraction of the thermally reactivated material will be comprised of virgin make-up carbon. 

  

	 	2.	 Abrasive Number (Stirring Abrasion Test or Ro-Tap Abrasion Test as described in AWWA Standard for Granular Activated Carbon ANSI/AWWA B604-05). –
Target 

  
 A3-1

 
value greater than or equal to 95% of the Abrasive Number prior to the thermal regeneration process, with a minimum value of 70. It is assumed that some fraction of the thermally reactivated
material will be comprised of virgin make-up carbon. 
  

	 	3.	Apparent Density (AD) of thermally reactivated material only – Target value of 0.54g/cc to 0.60g/cc. The Apparent Density shall be similar to that of the virgin
material. It is assumed that Virgin GAC will be added after this value has been met. 

  

	 	4.	The GAC shall conform to the National Sanitation Foundation Standard 61. 

  

	3.2.3	GAC Media Washing. 

 City
staff shall operate all basin backwash controls when washing the new GAC media placed in the basin. 
 The Company is responsible
for coordinating the scheduling of GAC media washing through the City. The City shall govern scheduling the use of the backwash system. The Company is responsible for this coordination to avoid delays to his schedule. 

The Company shall coordinate initial backwash of GAC media with the City to confirm that GAC fines have been sufficiently washed.

 Service water required for placement of the GAC shall be supplied by the City. 

Workers shall not stand or walk directly on media. Workers shall walk on plywood mats that will sustain their weight without displacing
the media. All materials in contact with the GAC media, including plywood, boots, and implements, shall be disinfected by spraying high concentration of chlorine solution. 
 After placing, the GAC shall be soaked overnight prior to backwashing. 
  

	3.3	REFERENCE STANDARDS 

 The
GAC Services shall comply with applicable provisions and recommendations of the following, except as otherwise shown or specified: 
  

	 	1.	ASTM D 2854 Standard Test Method for Apparent Density of Activated Carbon. 

 

	 	2.	ASTM D 2862 Standard Test Method for Particle Size Distribution of Granular Activated Carbon. 

 

	 	3.	ASTM D 2866 Standard test Method for Total Ash Content of Activated Carbon. 

 

	 	4.	ASTM D 2867 Standard Test Method for Moisture in Activated Carbon. 

  

	 	5.	ASTM D 3802 Standard Test Method for Ball-Pan Hardness of Activated Carbon. 

 

	 	6.	ASTM D 3838 Standard Test Method for pH of Activated Carbon. 

  

	 	7.	ASTM D 4607, Test Method for Determination of Iodine Number of Activated Carbon. 

  
 A3-2

	 	8.	ASTM E 11 Specification for Wire Cloth and Sieves for Testing Purposes. 

  

	 	9.	AWWA B100-09 Filtering Material, including any addenda. 

  

	 	10.	AWWA B604-05 Granular Activated Carbon, including any addenda. 

  

	 	11.	Food Chemical Codex: Third Edition. 

  

	 	12.	NSF International Standard 61—Drinking Water System Components—Health Effects. 

 

	3.4	VIRGIN GAC 

  

	3.4.1	Quality. 

  

	 	1.	The GAC shall conform to AWWA B604-05 in addition to the modifications listed herein. GAC shall also conform to Food Chemical Codex when tested under the conditions
outlined in the Food Chemical Codex, Third Edition. 

  

	 	2.	Controlled activation shall produce a material having a high internal surface area with optimum pore size for the effective adsorption of a broad range of high and low
molecular weight organic material. Carbon shall have a minimum iodine number of 900 milligrams/gram. 

  

	 	3.	Carbon shall be based on bituminous coal only. Carbons based on wood, lignite, sub-bituminous, peat, or coconut shall not be permitted. GAC shall be virgin or unused
GAC. GAC shall be manufactured from only select grades of bituminous coal combined with suitable binders as required to produce a highly active, durable granular material capable of withstanding the abrasion and dynamics associated with repeated
backwashing, surface washing and hydraulic transport. Activation shall be carefully controlled to produce a material having a high internal surface area with optimum pore size for effective adsorption of a broad range of high and low molecular
weight organic contaminants. The material shall be visually free of foreign materials. 

  

	 	4.	To assure a high initial hardness and durability of the material for future reprocessing, the carbon must be manufactured by reagglomerating powdered bituminous coal
that is bound and briquetted, then crushed to final size and thermally processed via steam activation. The carbon must be irregularly shaped and granular (not pellet material that has been broken or crushed) to provide a filtration benefit in
addition to adsorptive capacity. 

  

	 	5.	Carbon shall be composed of hard, durable grains with an abrasion resistance of no less than 75 by the RO-tap method. 

 

	 	6.	The maximum moisture content of the as-packed GAC shall be two percent. 

  

	 	7.	Carbon shall be thoroughly washed, screened, and free of clay, loam, dust, dirt, organic matter, and other foreign material prior to delivery to the site.

  

	 	8.	Manufacturing process shall include re-agglomeration and SHALL NOT be manufactured using a direct-activation process by a supplier with a minimum of five years
experience. Product shall have five years history in water treatment. 

  
 A3-3

	 	9.	Extruded or pelletized carbon to include broken pellets shall not be accepted. 

 

	 	10.	Maximum Total Ash: Less than or equal to 10 percent by weight. 

  

	 	11.	Carbon shall be NSF/ANSI 61 certified for potable water applications. The GAC shall contain no substances in quantities capable of producing deleterious or injurious
effects upon the health of those consuming the water treated using the GAC or cause the water so treated to fail to meet the requirements of county, state or federal drinking water regulations. 

 

	 	12.	Possess a unique product identifier. 

  

	 	13.	The molasses number shall be no less than 170. 

  

	3.4.2	Size. The contactor GAC shall meet the following requirements: 

  

	 	1.	Effective (10 percent) size (mm): 

  

	 	a.	8 x 20 mesh GAC: 1.0 – 1.2 

  

	 	b.	12 x 40 mesh GAC: 0.55 to 0.75 

  

	 	2.	Maximum Uniformity Coefficient: 

  

	 	a.	8 x 20 mesh GAC: 1.5 maximum 

  

	 	b.	12 x 40 mesh GAC: 1.9 maximum 

  

	 	3.	Larger than No. (8 or 12) – No more than 5 % 

  

	 	4.	Smaller than No. (20 or 40) – No more than 4% 

  

	 	5.	Apparent Density: Minimum of 0.50 g/Ml 

  
 A3-4

 APPENDIX 4 
 INFORMATION CONCERNING WATER TREATMENT FACILITIES 

 APPENDIX 4 
 INFORMATION CONCERNING WATER TREATMENT FACILITIES 
  

	4.1	WATER TREATMENT FACILITIES IDENTIFIED 

 The Water Treatment Facilities include the following: 
  

	 	1.	The Deer Valley WTP, which is located at 3030 W. Dunlap Ave., Phoenix, Arizona. The Deer Valley WTP will contain 18 GAC filter adsorbers. A total of approximately
4.1 million pounds of GAC is estimated to be in use at the Deer Valley WTP, 230,000 pounds per filter. It is anticipated that the first thermal regeneration of GAC for this facility will be required in January 2012. 

 

	 	2.	The Val Vista WTP, which is located at 3200 E. McDowell Rd., Mesa, Arizona. The Val Vista WTP treatment will contain 12 GAC post-filter contactors. A total of
approximately 8.3 million pounds of GAC will be in use at the Val Vista WTP, 691,000 pounds in each filter. The Val Vista WTP will be operational in January 2012. It is anticipated that the first thermal regeneration of GAC for this facility
will be required in January 2013. 

  

	 	3.	The Union Hills and 24th Street WTP’s GAC filters are anticipated to operate in biological mode with no associated thermal regeneration. 

 

	 	4.	The City is also installing two small pressure vessels at the West Anthem Booster Pump Station. Each of these vessels will contain approximately 20,000 pounds of GAC.
It is estimated that each vessel will need to be thermally regenerated on a bi-annual basis. These units are currently under design and are scheduled to be installed in the fall of 2011. 

 

	 	5.	Other water distribution sites. 

The City also owns the Lake Pleasant WTP; however, the Lake Pleasant WTP contains GAC post filter contactors and will continue to
thermally regenerate its GAC onsite. Accordingly, the Lake Pleasant WTP is not included within the definition of Water Treatment Facilities under this Service Contract. 

 

	4.2	ESTIMATED THERMAL GAC REACTIVATION QUANTITIES 

 The estimated thermal GAC reactivation quantities associated with each Water Treatment Facility are set forth in the Table 4-1. The quantities in Table 4-1 are only presented as an estimate of the amount
of carbon the City may need to thermally regenerate in any year. The Company acknowledges that these quantities do not represent a guarantee of the amount of the carbon the City will actually need to thermally regenerate in any year. The City shall
have no liability to the Company associated with actual thermal regeneration needs not meeting the estimated needs set forth in Table 4-1. 

  
 A4-1

 Table 4-1 
 Potential GAC Need Summary 
  

																					
	 	  	No.
Filters	 	  	lbs
GAC/Filter	 	  	Total lbs GAC	 	  	Filters
Thermally
Regenerated /Year	 	  	Total lbs Spent
GAC /Year	 
	 Val Vista WTP
	  	 	12	  	  	 	691,000	  	  	 	8,292,000	  	  	 	12	  	  	 	8,292,000	  
	 Deer Valley WTP
	  	 	18	  	  	 	230,000	  	  	 	4,140,000	  	  	 	12	  	  	 	2,760,000	  
	 West Anthem
	  	 	2	  	  	 	20,000	  	  	 	40,000	  	  	 	2	  	  	 	80,000	  
	 24 Street WTP
	  	 	16	  	  	 	145,000	  	  	 	2,324,000	  	  	 	*	  	  	 	*	  
	 Union Hills WTP
	  	 	36	  	  	 	72,000	  	  	 	2, 600,000	  	  	 	*	  	  	 	*	  
	 Other Water Distribution Sites
	  	 	*	  	  	 	*	  	  	 	*	  	  	 	*	  	  	 	*	  

  

	*	Quantities have not been determined as of the effective date of the Service Contract. 

  
 A4-2

 APPENDIX 5 
 EMPLOYEE BACKGROUND SCREENING 

 APPENDIX 5 
 EMPLOYEE BACKGROUND SCREENING 
  

	5.1	COMPANY AND SUBCONTRACTOR WORKER BACKGROUND SCREENING 

  

	5.1.1	Security Generally. The parties acknowledge that security measures required in this Section 5.1 are necessary in order to preserve and protect the public
health, safety and welfare. In addition to the specific measures set forth below, the Company shall take such other measures as it deems reasonable and necessary to further preserve and protect the public health, safety and welfare.

  

	5.1.2	Security Inquiries. The Company acknowledges that all of the employees that it provides pursuant to the Service Contract shall, at the request of the City, be
subject to background and security checks and screening (“Security Inquiries”). The City shall perform all such Security Inquiries, as it deems appropriate, for all employees considered for performing work (including supervision and
oversight) under the Service Contract. The City may, at its sole, absolute and unfettered discretion, accept or reject any or all of the employees proposed by the Company for performing work under the Service Contract. Employees rejected by the City
for performing GAC Services under the Service Contract may still be engaged by the Company for other work not involving the City. An employee rejected for work under the Service Contract shall not be proposed to perform work under other City
agreements or engagements without the City’s prior written approval. 

  

	5.1.3	Additional City Rights Regarding Security Inquiries. In addition to the foregoing, the City reserves the right, but not the obligation to: (1) have an
employee and/or prospective employee of the Company be required to provide fingerprints and execute such other documentation as may be necessary to obtain criminal justice information pursuant to Arizona Revised Statutes (A.R.S.) §
41-1750(G)(4); (2) act on newly acquired information whether or not such information should have been previously discovered; (3) unilaterally change its standards and criteria relative to the acceptability of the Company’s employees
and/or prospective employees; and (4) object, at any time and for any reason, to an employee of the Company performing work (including supervision and oversight) under the Service Contract. 

 

	5.1.4	Terms Applicable to All of the Company’s Agreements and Subagreements. The Company shall include the terms of this Section 5.1 for employee background
and security checks and screening in all agreements and subagreements for work performed under the Service Contract, including supervision and oversight. 

  

	5.2	MATERIALITY OF SECURITY INQUIRIES PROVISIONS 

 Notwithstanding any provisions to the contrary, the Security Inquiries provisions in Section 5.1 of this Appendix are material to the City’s entry into the Service Contract, and any breach
thereof by the Company may, at the City’s option and sole and unfettered discretion, be considered to be a breach of contract of sufficient magnitude to terminate the Service Contract. Such termination shall subject the Company to liability for
its breach of contract pursuant to Section 7.2 of the Service Contract. In the event of a breach, the default provision in Section 6.3 of Appendix 6 may also apply. 

  
 A5-1

	5.3	DOCUMENT/INFORMATION RELEASE 

 Documents and materials released to the Company, which are identified by the City as sensitive and confidential, are the property of the City of Phoenix Water Services Department. The document/material
must be issued by and returned to the Water Services Department upon completion of its intended release purposes. Secondary dissemination, disclosure, copying, or duplication in any manner is prohibited without the approval of the Water Services
Department. The document/material must be kept secure at all times. This directive is applicable to all City of Phoenix Water Services Department documents, whether in photographic, printed, or electronic data format. This directive is authorized
and required by City of Phoenix Code Article 1, Section 2-45.7. 
  

	5.4	CONFIDENTIALITY OF PLANS 

Any plans the Company generates must include the following statement in the Title Block on every page: “Per City of Phoenix Ordinance
G-4396, these plans are for Official use only and may not be shared with others except as required to fulfill the obligations of the Company’s contract with the City of Phoenix”. This document must be kept secure at all times. 

  
 A5-2

 APPENDIX 6 
 WATER TREATMENT FACILITIES ACCESS CONTROLS 

 APPENDIX 6 
 WATER TREATMENT FACILITIES ACCESS CONTROLS 
  

	6.1	EMPLOYEE ACCESS 

  

	6.1.1	Access Generally. A Contract Worker is any third party performing work on behalf of the Company for purposes of Company’s fulfillment of its contractual
obligations under this Agreement. A Contract Worker shall not be allowed to begin work in any City facility without: (1) the prior completion and City’s acceptance of the required Security Inquiries; and (2) when required, the
Contract Worker’s receipt of a City issued badge. A badge will be issued to a Contract Worker solely for access to the City facilities to which the Contract Worker is assigned. Each Contract Worker who enters a City facility must use the badge
issued to the Contract Worker. 

  

	6.1.2	Restricted Areas. Except as set forth in Section 5.1 of Appendix 5 (Employee Background Screening) and Section 6.2 of this Appendix, the Company’s
employees are forbidden access to designated restricted areas. Beyond meeting rooms and other areas open to the public, access to particular operational premises shall be as directed by the City’s authorized representative.

  

	6.1.3	Authorized Employee Access. Only authorized the Company’s employees are allowed on the premises of the City’s buildings. The Company’s employees
are not to be accompanied in the work area by acquaintances, family members, assistants or any other person unless said person is an authorized the Company’s employee. 

 

	6.2	BADGE AND KEY ACCESS REQUIREMENTS 

  

	6.2.1	Badge Application Procedures. Each Contract Worker providing GAC Services under the Service Contract shall submit to the City of Phoenix, Water Services
Department Contract Specialist II, Kimberly Dickerson two (2) forms of identification for the completion of the Security Inquiries and badge application. One form of identification must be a government issued credential with an accompanying
photograph. The second form of identification must be a valid passport; military issued identification card; immigration and naturalized services identification card; social security card; or an original birth certificate. Upon completion of the
Security Inquiries and clearance by the City, the Contract Worker will be issued a badge by the Water Services Department. The City will not process the badge application until the required Security Inquiries have been completed and approved as
determined by the City. The Contract Worker shall comply with all requirements and furnish all requested information within five (5) business days from request or the subject Contract Worker’s badge application shall be rejected.

  

	6.2.2	Stolen or Lost Badges or Keys. The Company shall report lost or stolen badges or keys to its local police department and must obtain a police department report
(PDR) prior to re-issuance of any lost or stolen badge or key. A new badge application or key issue form shall be completed and submitted along with payment of the applicable fees listed in subsection 6.2.4 of this Appendix prior to issuance of a
new badge or key. 

  

	6.2.3	 Return of Badges or Keys. All badges and keys are the property of the City and must be returned to the City at the badging office within one
(1) business day of when the Contract Worker’s access to a City facility is no longer required to furnish the GAC Services under the Service Contract. The Company shall collect a Contract Worker’s

  
 A6-1

	 	
badge and key(s) upon the termination of the Contract Worker’s employment; when the Contract Worker’s services are no longer required at the particular City facility; or upon
termination, cancellation or expiration of the Service Contract. 

  

	6.2.4	Badge and Key Fees. The following constitute the badge and key fees under the Service Contract. The City reserves the right to amend these fees upon thirty
(30) days prior written notice to the Company. 

  

					
	Replacement Badge Fee:	  	$55.00	  	per badge
	Lost / Stolen Badge Fee:	  	$55.00	  	per badge
	Replacement Key Fee:	  	$55.00	  	per key
	Lost / Stolen Key Fee:	  	$55.00	  	per key
	Replacement Locks:	  	$55.00	  	per key

  
 A6-2

	6.3	COMPANY’S DEFAULT; LIQUIDATED DAMAGES; RESERVATION OF REMEDIES FOR MATERIAL BREACH 

 The Company’s default under this Appendix shall include, but is not limited to the following: (1) Contract Worker gains access to a City facility without the proper badge or key;
(2) Contract Worker uses a badge or key of another Contract Worker to gain access to a City facility; (3) Contract Worker commences GAC Services under the Service Contract without the proper badge, key or Security Inquiries;
(4) Contract Worker or the Company submits false information or negligently submits wrong information to the City to obtain a badge or key or to complete the Security Inquiries; or (5) the Company fails to collect and timely return
Contract Worker’s badge or key upon termination of Contract Worker’s employment, reassignment of Contract Worker to another City facility or upon the expiration, cancellation or termination of the Service Contract. The Company acknowledges
and agrees that the access control, badge and key requirements in this Appendix are necessary to preserve and protect public health, safety and welfare. Accordingly, the Company agrees to properly cure any default under this Appendix within three
(3) business days from the date notice of default is sent by the City. The parties agree that the Company’s failure to properly cure any default under this Appendix shall constitute a breach of this Appendix. In addition to any other
remedy available to the City at law or in equity, the Company shall be liable for and shall pay to the City the sum of one thousand dollars ($1,000.00) for each breach by the Company of this Appendix. The parties further agree that the sum fixed
above is reasonable and approximates the actual or anticipated loss to the City at the time and making of the Service Contract in the event that the Company breaches this Appendix. Further, the parties expressly acknowledge and agree to the fixed
sum set forth above because of the difficulty of proving the City’s actual damages in the event that the Company breaches this Appendix. The parties further agree that three (3) breaches by the Company of this Appendix arising out of any
default within a consecutive period of three (3) months or three (3) breaches by the Company of this Appendix arising out of the same default within a period of twelve (12) consecutive months shall constitute a material breach of the
Service Contract by the Company, and the City expressly reserves all of its rights, remedies and interests under the Service Contract, at law and in equity, including, but not limited to, termination of the Service Contract, in accordance with
Section 7.2 of the Service Contract. 

  
 A6-3

 APPENDIX 7 
 APPROVED SUBCONTRACTORS 

  
 A6-4

 APPENDIX 7 
 APPROVED SUBCONTRACTORS 
 Dart Trucking Company Inc. 

11017 Market Street 
 North Lima Ohio 44452

 Contacts: Jim Pazzanita, Fleet Manager—330-549-4121, Mike Williams, Logistics Manager—330-549-4123 

Landstar Global Logistics/MAX Terminal 

1380 Highway 287 N 
 Suite 102 

Mansfield, TX 76063 
 Contacts: Robby L. Stewart,
Project Manager Calgon Carbon—817-225-0600, Christie Bomar, Operations Manager—817-225-0600 

  
 A7-5

 APPENDIX 8 
 PRICE ADJUSTMENTS 

 APPENDIX 8 
 PRICE ADJUSTMENTS 
  

	8.1	LOCAL SERVICE PRICE ADJUSTMENTS 

  

	8.1.1	Annual Adjustment to Local Service Price. The Local Service Price shall be adjusted on July 1 of each Contract Year following the Contract Date by
multiplying the Local Service Price applicable in the prior Contract Year by the adjustment factors applicable for the upcoming Contract Year, as determined in accordance with this subsection. That is: 

 

							
			
	
LSPn
	  	 	=	  	  	LSP(n-1) x [(0.7 x
NGAFn) + (0.3 x CPIAFn)]
			
	 Where,
	  				  	
			
	
LSPn
	  	 	=	  	  	Local Service Price for Contract Year “n”
			
	
NGAFn
	  	 	=	  	  	Natural Gas Adjustment Factor applicable for Contract Year “n”
			
	
CPIAFn
	  	 	=	  	  	CPI Adjustment Factor applicable for Contract Year “n”

 The “Natural Gas Adjustment Factor” and the “CPI Adjustment Factor” are as set forth
in subsections 8.1.2 and 8.1.3 of this Appendix, respectively. 
  

	8.1.2	Natural Gas Adjustment Factor. The Natural Gas Adjustment Factor shall be determined as follows: 

 

							
			
	
NGAFn
	  	 	=	  	  	NGPn ÷ NGP
n-1
			
	 Where,
	  				  	
			
	
NGAFn
	  	 	=	  	  	The Natural Gas Adjustment Factor for Contract Year “n”
			
	
NGPn
	  	 	=	  	  	Natural gas price based upon the Platt’s Gas Market Report inside FERC First of the Month Index El Paso Natural Gas Permian Basins Index for Contract Year
			
	
NGPn-1
	  	 	=	  	  	The natural gas price one year prior based upon the Platt’s Gas Market Report inside FERC First of the Month Index El Paso Natural Gas Permian Basins Index

  
 A8-1

	8.1.3	CPI Adjustment Factor. The CPI Adjustment Factor shall be determined as follows: 

 

							
			
	
CPIAFn
	  	 	=	  	  	CPIn-1 ÷ CPI
n-2
			
	 Where,
	  				  	
			
	
CPIAFn
	  	 	=	  	  	The CPI Adjustment Factor for Contract Year “n”
			
	
CPIn-1
	  	 	=	  	  	The average of the 12-month CPI values occurring in the Contract Year preceding the Contract Year with respect to which a calculation is to be made thereunder, based upon the
U.S. Department of Labor CPI for Urban Wage Earners and Clerical Work, specific to the West (CWUR040SA0)
			
	
CPIn-2
	  	 	=	  	  	The average of the 12-month CPI values occurring in the Contract Year two years preceding the Contract Year with respect to which a calculation is to be made thereunder, based
upon the U.S. Department of Labor CPI for Urban Wage Earners and Clerical Work, specific to the West (CWUR040SA0)

  

	8.2	ANNUAL ADJUSTMENT TO NON-LOCAL SERVICE PRICE 

 The Non-Local Service Price shall be adjusted on July 1 of each Contract Year following the Contract Date in the same manner as the Local Service Price under Section 8.1 of this Appendix.

  

	8.3	ADDITIONAL VIRGIN GAC PRICE ADJUSTMENTS 

  

	8.3.1	Annual Adjustment to Additional Virgin GAC Price. The Additional Virgin GAC Price shall be adjusted on July 1 of each Contract Year following the Contract
Date by multiplying the Additional Virgin GAC Price applicable in the prior Contract Year by the adjustment factors applicable for the upcoming Contract Year, as determined in accordance with this subsection. That is: 

 

							
			
	
AVGACPn
	  	 	=	  	  	AVGACP(n-1) x [(0.5 x
PIAFn) + (0.5 x OCIAFn)]
			
	 Where
	  				  	
			
	
AVGACPn
	  	 	=	  	  	Local Service Price for Contract Year “n”
			
	
PIAFn
	  	 	=	  	  	Petroleum Index Adjustment Factor applicable for Contract Year “n”
			
	
OCIAFn
	  	 	=	  	  	Organic Chemical Index Adjustment Factor applicable for Contract Year “n”

 The “Petroleum Index Adjustment Factor” and the “Organic Chemical Index Adjustment
Factor” are as set forth in subsections 8.3.2 and 8.3.3 of this Appendix, respectively. 
  

	8.3.2	Petroleum Index Adjustment Factor. The Petroleum Index Adjustment Factor shall be determined as follows: 

 

							
			
	
PIAFn
	  	 	=	  	  	PIPn ÷ PIP
n-1
			
	 Where,
	  				  	

  
 A8-2

							
			
	
PIAFn
	  	 	=	  	  	The Petroleum Index Adjustment Factor for Contract Year “n”
			
	
PIPn-1
	  	 	=	  	  	The average of the 12-month PIAF values occurring in the Contract Year preceding the Contract Year with respect to which a calculation is to be made thereunder, based upon the
Producer Price Index for Other Petroleum & Coal Products Manufacturing (CCWUR0400SA0)
			
	
PIPn-2
	  	 	=	  	  	The average of the 12-month PIAF values occurring in the Contract Year two years preceding the Contract Year with respect to which a calculation is to be made thereunder, based
upon the Producer Price Index for Other Petroleum & Coal Products Manufacturing (CCWUR0400SA0)

  

	8.3.3	Organic Chemical Index Adjustment Factor. The Organic Chemical Index Adjustment Factor shall be determined as follows: 

 

							
			
	
OCIAFn
	  	 	=	  	  	OCIn-1 ÷ OCI
n-2
			
	 Where,
	  				  	
			
	
OCIAFn
	  	 	=	  	  	The OCI Adjustment Factor for Contract Year “n”
			
	
OCIn-1
	  	 	=	  	  	The average of the 12-month OCIAF values occurring in the Contract Year preceding the Contract Year with respect to which a calculation is to be made thereunder, based upon the
Producer Price Index for Basic Organic Chemicals (WPU0614)
			
	
OCIn-2
	  	 	=	  	  	The average of the 12-month OCIAF values occurring in the Contract Year two years preceding the Contract Year with respect to which a calculation is to be made thereunder, based
upon the Producer Price Index for Basic Organic Chemicals (WPU0614)

  

	8.4	INDICES 

 If the final
value of any component of the formula for any Adjustment Factor in Sections 8.1 through 8.3 of this Appendix is not available for the applicable period when required hereunder, the amount of the adjustment to be made shall be estimated by using the
preliminary value of the index for the applicable period or the final value of the index for the latest available period. All calculations and payments based on such estimate shall be adjusted as soon as reasonably practicable after the final value
of the index for the applicable period is published. The Company shall set forth the calculation of the estimated values of the index in its invoices until the final values are published. The Company shall set forth the calculation of the final
values of the index and the resulting calculation of the adjustment, if any, to payments made based on the estimated values during the Contract Year in an invoice as soon as practicable after the final value is published. If the index is no longer
published at the time that an adjustment is to be calculated, or if the base or method of calculation used for the index is substantially altered, the calculation shall be made using a comparable similar index or method mutually agreed upon by the
Company and the City. 
  

	8.5	NON-LOCAL FUEL SURCHARGE 

The Non-Local Fuel Surcharge shall consist of a $200 charge per order from all Water Treatment plus a mileage charge based on the
difference between the base of $4.00/gallon and the fuel index at time of actual delivery in accordance with Table 8-1 in this Appendix. The mileage and surcharge amount will be established at time of delivery by the Company. 

  
 A8-3

 Each Monday at 5:00pm Eastern Standard Time, the Company will determine the Average Diesel
Price. The Non-Local Fuel Surcharge will become effective on Tuesday of that week (except if Monday is a National Holiday, then it will be Wednesday) and will be effective for the following seven (7) day period. 

In computing charges, fractions of less than one-half cent will be dropped and fractions of one-half cent or more will be increased to the
next whole cent. 
 If the Average Diesel Price is greater than $5.50 per gallon, the Non-Local Fuel Surcharge will increase one
(1) cent for every five (5) cent increase of the Average Diesel Price. If the Average Diesel Price is less than $4.00 per gallon, the Company will not charge a Non-Local Fuel Surcharge. 

TABLE 8-1 
  

																	
	 When the Fuel Index
Is:
	 	 	 	 When the Fuel Index Is:
	 	 	 	 When the Fuel Index Is:
	 	 
	 At Least
	 	 But Less Than
	 	 Fuel Surcharge
	 	 At Least
	 	 But Less Than
	 	 Fuel Surcharge
	 	 At Least
	 	 But Less Than
	 	 Fuel Surcharge

	 $4.00
	 	$4.05	 	1 Cent per Mile	 	$4.50	 	$4.55	 	11 Cents per Mile	 	$5.00	 	$5.05	 	21 Cents per Mile
	 $4.05
	 	$4.10	 	2 Cents per Mile	 	$4.55	 	$4.60	 	12 Cents per Mile	 	$5.05	 	$5.10	 	22 Cents per Mile
	 $4.10
	 	$4.15	 	3 Cents per Mile	 	$4.60	 	$4.65	 	13 Cents per Mile	 	$5.10	 	$5.15	 	23 Cents per Mile
	 $4.15
	 	$4.20	 	4 Cents per Mile	 	$4.65	 	$4.70	 	14 Cents per Mile	 	$5.15	 	$5.20	 	24 Cents per Mile
	 $4.20
	 	$4.25	 	5 Cents per Mile	 	$4.70	 	$4.75	 	15 Cents per Mile	 	$5.20	 	$5.25	 	25 Cents per Mile
	 $4.25
	 	$4.30	 	6 Cents per Mile	 	$4.75	 	$4.80	 	16 Cents per Mile	 	$5.25	 	$5.30	 	26 Cents per Mile
	 $4.30
	 	$4.35	 	7 Cents per Mile	 	$4.80	 	$4.85	 	17 Cents per Mile	 	$5.30	 	$5.35	 	27 Cents per Mile
	 $4.35
	 	$4.40	 	8 Cents per Mile	 	$4.85	 	$4.90	 	18 Cents per Mile	 	$5.35	 	$5.40	 	28 Cents per Mile
	 $4.40
	 	$4.45	 	9 Cents per Mile	 	$4.90	 	$4.95	 	19 Cents per Mile	 	$5.40	 	$5.45	 	29 Cents per Mile
	 $4.45
	 	$4.50	 	10 Cents per Mile	 	$4.95	 	$5.00	 	20 Cents per Mile	 	$5.45	 	$5.50	 	30 Cents per Mile

  
 A8-4

 APPENDIX 9 
 INSURANCE REQUIREMENTS 

 APPENDIX 9 
 INSURANCE REQUIREMENTS 
  

	9.1	INSURANCE REQUIREMENTS GENERALLY 

 The Company and Subcontractors shall procure and maintain until all of their obligations have been discharged, including any warranty periods under the Service Contract are satisfied, insurance against
claims for injury to persons or damage to property which may arise from or in connection with the performance of the work by the Company, its agents, representatives, employees or Subcontractors. The insurance requirements herein are minimum
requirements for the Service Contract and in no way limit the indemnity covenants contained in the Service Contract. The City in no way warrants that the minimum limits contained herein are sufficient to protect the Company from liabilities that
might arise out of the performance of the work under the Service Contract by the Company, his agents, representatives, employees or Subcontractors, and the Company is free to purchase additional insurance as may be determined necessary. 

 

	9.2	MINIMUM SCOPE AND LIMITS OF INSURANCE 

  

	9.2.1	Generally. The Company shall provide coverage with limits of liability not less than those stated below. An excess liability policy or umbrella liability policy
may be used to meet the minimum liability requirements provided that the coverage is written on a “following form” basis. 

  

	9.2.2	Commercial General Liability – Occurrence Form. Policy shall include bodily injury, property damage and broad form contractual liability coverage.

  

					
	 General Aggregate
	  	$	2,000,000	  
	 Products – Completed Operations Aggregate
	  	$	1,000,000	  
	 Personal and Advertising Injury
	  	$	1,000,000	  
	 Each Occurrence
	  	$	1,000,000	  

 Policy shall be endorsed to include the following additional insured language: “The City of Phoenix
shall be named as an additional insured with respect to liability arising out of the activities performed by, or on behalf of, the Company”. 
  

	9.2.3	Worker’s Compensation and Employers’ Liability. The Company shall provide Workers’ Compensation Statutory Employers’ Liability

  

					
	 Each Accident
	  	$	100,000	  
	 Disease – Each Employee
	  	$	100,000	  
	 Disease – Policy Limit
	  	$	500,000	  

 Policy shall contain a waiver of subrogation against the City. 

This requirement shall not apply when the Company or Subcontractor is exempt under A.R.S. 23-901, AND when the Company or Subcontractor
executes the appropriate sole proprietor waiver form. 

  
 A9-1

	9.2.4	Professional Liability (Errors and Omissions Liability). The Company’s policy shall cover professional misconduct or lack of ordinary skill in performing
the GAC Services under the Service Contract. 

  

					
	 Each Claim
	  	$	2,000,000	  
	 Annual Aggregate
	  	$	2,000,000	  

 The Company warrants that any retroactive date under the policy shall precede the effective date of the
Service Contract; and that either continuous coverage will be maintained or an extended discovery period will be exercised for a period of two (2) years beginning at the time work under the Service Contract is completed. 

 

	9.2.5	Automobile Liability. Policy shall include bodily injury and property damage for any owned, hired, and non-owned vehicles used in the performance of this Service
Contract. 

  

					
	 Combined Single Limit (CSL)
	  	$	1,000,000	  

 The policy shall be endorsed to include the following additional insured language: “The City of
Phoenix shall be named as an additional insured with respect to liability arising out of the activities performed by, or on behalf of the Company, including automobiles owned, leased, hired or borrowed by the Company.” 

 

	9.3	ADDITIONAL INSURANCE REQUIREMENTS 

 The policies shall include, or be endorsed to include, the following provisions: 
  

	 	(1)	On insurance policies where the City is named as an additional insured, the City shall be an additional insured to the full limits of liability purchased by the Company
even if those limits of liability are in excess of those required by the Service Contract. 

  

	 	(2)	the Company’s insurance coverage shall be primary insurance and non-contributory with respect to all other available sources. 

 

	9.4	NOTICE OF CANCELLATION 

For each insurance policy required by the insurance provisions of the Service Contract, the Company must provide to the City, within two
(2) business days of receipt, a notice if a policy is suspended, voided or cancelled for any reason. Such notice shall be mailed, emailed, hand delivered or sent by facsimile transmission to City of Phoenix, Water Services Department; ATTN:
Kimberly Dickerson, Contracts Specialist II; 200 West Washington Street, 9th Floor, Management Services Division; Phoenix, Arizona 85003-1611. 
  

	9.5	ACCEPTABILITY OF INSURERS 

Insurance is to be placed with insurers duly licensed or authorized to do business in the State of Arizona and with an “A.M.
Best” rating of not less than B+ VI. The City in no way warrants that the above-required minimum insurer rating is sufficient to protect the Company from potential insurer insolvency. 

 

	9.6	VERIFICATION OF COVERAGE 

The Company shall furnish the City with certificates of insurance (ACORD form or equivalent approved by the City) as required by the
Service Contract. The certificates 

  
 A9-2

 
for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. All certificates and any required endorsements are to be received and approved by
the City before work commences. Each insurance policy required by the Service Contract must be in effect at or prior to commencement of work under the Service Contract and remain in effect for the duration of the project. Failure to maintain the
insurance policies as required by the Service Contract or to provide evidence of renewal is a material breach of the Service Contract. All certificates required by the Service Contract shall be sent directly to the City’s insurance certificate
tracking service, or to the City of Phoenix Risk Management Division, 251 West Washington, 8th Floor, Phoenix, Arizona 85003, ATTN: Assistant Risk Management Administrator. The City project/contract number and project description shall be noted on
the certificate of insurance. The City reserves the right to require complete, certified copies of all insurance policies required by the Service Contract at any time. 
  

	9.7	SUBCONTRACTORS 

 The
Company’s certificate(s) shall include all Subcontractors as additional insured under its policies or the Company shall furnish to the City separate certificates and endorsements for each Subcontractor. All coverages for Subcontractors shall be
subject to the minimum requirements identified in Section 9.2 of this Appendix. 

  
 A9-3fs1a3ex10viii_compservices.htm

Exhibit 10.8

 

Comp Services, Inc.

 

Private Placement Memorandum

 

Confidential

 

 

 

414 S. Almansor St.

Alhambra, CA 91801

www.ComputerBuyout.com

626-975-0027

 

  

  

  

 

	No._________ 	Name of Offeree __________________

 

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

________________________________________

COMP SERVICES, INC.

__________________________________________

Maximum of 1,000,000 Shares of Common Stock

Offering Price: $0.05 per Share

__________________________________________

Comp Services, Inc., also known as “Comp Services”, “we” or “us,” is offering for sale to persons who qualify as accredited investors and to a limited number of sophisticated investors, on a best efforts basis 1,000,000 shares or our common stock aggregating $50,000.00 at $0.05 per share (the “Common Shares”). The Common Shares will be offered through our officers and directors on a best-efforts basis as set forth above. The minimum investment is $500, however, we may, in our sole discretion, accept subscriptions for lesser amounts.  Therefore, funds received from all subscribers will be released to us upon acceptance of the subscriptions by us.

________________________________________

The securities offered hereby are speculative, involve a high degree of risk and should not be purchased by anyone who cannot afford the loss of their entire investment. Prospective investors should consider carefully the information set forth under “risk factors” before purchasing such securities.

This memorandum contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause differences include, but are not limited to, those discussed in “risk factors.”

	  	
Price to Investors

	
Commission (1)

	
Proceeds to Company (2)

	
Per Share

	
$0.05

	
$0

	
$0.05

	
Maximum Offering – 1,000,000 shares

	
$50,000

	
$0

	
$50,000

	
(1)  

	
The common shares are being offered on our behalf by our directors and officers who will not be compensated for doing so.

	
(2)  

	
Before deducting non-commission expenses payable by us in connection with this offering, including, but not limited to blue sky filing fees, legal fees, and other related expenses of the offering estimated to be approximately $10,000.

	
(3)  

	
This offering will expire on the earlier to occur of (i) February 1, 2012; or (ii) the sale of all of the common shares, unless extended by us for up to an additional 90 day period, in our sole discretion. The expiration shall be known as the termination date.

The recipient of this document, prior to delivery, has agreed, and recipient's acceptance constitutes recipient's further agreement, that recipient will hold the information enclosed in this document and the transactions described in this document confidential and will not release or reproduce this document or discuss the information contained in it or use this document for any purpose other than evaluating a potential investment in our securities, without our prior express written permission.

 

  

  

  

 

Our common stock has not been registered under the Securities Act of 1933, as amended, also known as the “Securities Act,” or the securities laws of any state and are offered and sold in reliance upon exemptions from the registration requirements of the Securities Act and such state securities laws.  The common stock has not been approved or disapproved by the Securities and Exchange Commission, any state securities commission or other regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of the information set forth in this memorandum.  Any representation to the contrary is unlawful.  The common stock may not be sold or transferred without compliance with the registration or qualification provisions of applicable federal and state securities laws or an opinion of counsel, satisfactory to us, that an exemption from such registration or qualification requirements is available.

The minimum subscription is for $500, although we reserve the right to accept subscriptions for less than $500. The subscription price is payable upon submission to us of a fully completed and executed Subscription Agreement and Confidential Prospective Purchaser Questionnaire. The offering period will terminate upon the earlier to occur of (i) February 1, 2012 or (ii) the date the maximum offering is sold; provided, however, that such offering period may be extended for up to an additional 90 day period in our sole discretion without notice to any subscriber.

To the Prospective Purchasers

THIS MEMORANDUM SHOULD NOT BE CONSIDERED LEGAL OR INVESTMENT ADVICE AND EACH INVESTOR SHOULD CONSULT WITH HIS OWN COUNSEL, ACCOUNTANT OR OTHER INVESTMENT ADVISOR WITH RESPECT TO THE CONSEQUENCES OF AN INVESTMENT. NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS MEMORANDUM.  INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY EITHER US OR ANY OF OUR REPRESENTATIVES OR AGENTS.

THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF PROSPECTIVE INVESTORS INTERESTED IN THE POSSIBLE PLACEMENT OF THE SECURITIES AND CONSTITUTES AN OFFER ONLY TO AN OFFEREE TO WHOM WE HAVE DELIVERED THIS MEMORANDUM, AND ONLY TO SUCH OFFEREE. ANY REPRODUCTION OR DISTRIBUTION OF THIS MEMORANDUM, IN WHOLE OR IN PART, OR THE DISCLOSURE OF ANY OF ITS CONTENTS, IS PROHIBITED WITHOUT OUR PRIOR WRITTEN CONSENT. EACH OFFEREE, BY ACCEPTING DELIVERY OF THIS MEMORANDUM, AGREES TO RETURN IT AND ALL RELATED EXHIBITS AND OTHER DOCUMENTS TO US IF THE OFFEREE DOES NOT INTEND TO SUBSCRIBE FOR THE SECURITIES, THE OFFEREE'S SUBSCRIPTION IS NOT ACCEPTED, OR THE OFFERING IS TERMINATED.

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS PURCHASING THE UNITS IN THIS OFFERING MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. SEE “RISK FACTORS.”

 

  

  

  

 

THERE IS NO PUBLIC MARKET FOR THE COMMON SHARES, THE WARRANTS AND THE COMMON SHARES UNDERLYING THE WARRANTS.  OUR COMMON SHARES HAVE NOT BEEN LISTED FOR TRADING ON THE OVER THE COUNTER BULLETIN BOARD (“OTC BULLETIN BOARD”) OR ON ANY NATIONAL STOCK EXCHANGE.  ACCORDINGLY, THERE IS NO PUBLIC MARKET FOR THE COMMON SHARES, THE WARRANTS, OR THE COMMON SHARES UNDERLYING THE WARRANTS.  FURTHERMORE, THE TRANSFER OF THE SECURITIES MAY BE LIMITED BY FEDERAL OR STATE SECURITIES LAWS.  THE OFFERING PRICE OF THE UNITS BEARS NO RELATIONSHIP WHATSOEVER TO THE ASSETS, BOOK VALUE OR EARNINGS OF THE COMPANY, OR TO ANY OTHER RECOGNIZED CRITERIA OF VALUE.

THE SECURITIES ARE NOT TRANSFERABLE WITHOUT THE SATISFACTION OF CERTAIN CONDITIONS, INCLUDING REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION UNDER THE SECURITIES ACT AND STATE SECURITIES LAWS. PROSPECTIVE INVESTORS SHOULD ASSUME THAT THEY WILL HAVE TO BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE SECURITIES FOR AN INDEFINITE PERIOD OF TIME.  NO ONE SHOULD INVEST IN THE SECURITIES WHO CANNOT AFFORD TO LOSE HIS ENTIRE INVESTMENT.

EACH PROSPECTIVE INVESTOR AND HIS ADVISOR MAY, DURING NORMAL BUSINESS HOURS, ASK US QUESTIONS WITH RESPECT TO TERMS AND CONDITIONS OF THE OFFERING AND REQUEST ADDITIONAL INFORMATION RELATING TO THIS MEMORANDUM.  WE WILL SEEK TO PROVIDE ANSWERS AND SUCH INFORMATION TO THE EXTENT POSSESSED BY US OR OBTAINABLE WITHOUT UNREASONABLE EFFORT OR EXPENSE.  OFFEREES MAY BE REQUIRED TO EXECUTE NON-DISCLOSURE AGREEMENTS AS A PREREQUISITE TO REVIEWING DOCUMENTS DETERMINED BY US TO CONTAIN PROPRIETARY, CONFIDENTIAL OR OTHERWISE SENSITIVE INFORMATION.

THE STATEMENTS CONTAINED IN THIS DOCUMENT ARE BASED ON INFORMATION PROVIDED BY US AND BELIEVED TO BE RELIABLE.  NEITHER THE DELIVERY OF THIS MEMORANDUM NOR ANY SALES MADE SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE MATTERS DISCUSSED HEREIN SINCE THE DATE OF THIS MEMORANDUM.  HOWEVER, IN THE EVENT OF ANY MATERIAL CHANGES DURING THE OFFERING PERIOD, THIS MEMORANDUM WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY.  THIS MEMORANDUM CONTAINS A SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS RELATING TO US, AS WELL AS SUMMARIES OF VARIOUS PROVISIONS OF RELEVANT STATUTES AND REGULATIONS. SUCH SUMMARIES DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE TEXTS OF THE ORIGINAL DOCUMENTS, STATUTES AND REGULATIONS.

THE OFFERING PRICE OF OUR SECURITIES HAS BEEN DETERMINED ARBITRARILY.  THE PRICE OF THE SECURITIES BEARS NO RELATIONSHIP TO THE ASSETS, EARNINGS OR BOOK VALUE OF ZORRO FINANCIAL, OR TO POTENTIAL ASSETS, EARNINGS, OR BOOK VALUE OF THE COMPANY.  THERE IS NO ACTIVE TRADING MARKET IN THE COMPANY’S SECURITIES AND THERE CAN BE NO ASSURANCE THAT AN ACTIVE TRADING MARKET IN ANY OF THE COMPANY’S SECURITIES WILL DEVELOP OR BE MAINTAINED.  SUCH PRICES SHOULD NOT BE CONSIDERED ACCURATE INDICATORS OF FUTURE QUOTED OR TRADING PRICES.

 

  

  

  

 

THESE SECURITIES ARE BEING OFFERED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, WHICH EXEMPTION DEPENDS UPON THE EXISTENCE OF CERTAIN FACTS, INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS THAT THE SECURITIES ARE NOT BEING OFFERED THROUGH GENERAL ADVERTISING OR GENERAL SOLICITATION, ADVERTISEMENTS OR COMMUNICATIONS IN NEWSPAPERS, MAGAZINES OR OTHER MEDIA, OR BROADCASTS ON RADIO OR TELEVISION, AND THAT THIS MEMORANDUM SHALL BE TREATED AS CONFIDENTIAL BY THE PERSONS TO WHOM IT IS DELIVERED.  ANY DISTRIBUTION OF THIS MEMORANDUM OR ANY PART OF IT OR DIVULGENCE OF ANY OF ITS CONTENTS SHALL BE UNAUTHORIZED.

THIS MEMORANDUM CONSTITUTES AN OFFER ONLY IF A NAME APPEARS ON THE APPROPRIATE SPACE ON THE FRONT COVER.  WE HAVE THE RIGHT TO REJECT SUBSCRIPTIONS IN WHOLE OR IN PART.

THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR OTHER JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR OTHER SOLICITATION.

NASAA Uniform Legend

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF US AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.  FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION.  INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

FOR RESIDENTS OF ALL STATES:

THE UNITS CONSISTING OF COMMON SHARES AND WARRANTS AND THE UNDERLYING COMMON SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND ARE BEING SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH STATE LAWS.  THE UNITS CONSISTING OF COMMON SHARES AND WARRANTS AND THE UNDERLYING COMMON SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  OFFEREES SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.  THESE SECURITIES MAY BE SOLD ONLY TO ACCREDITED INVESTORS.

 

  

  

  

 

FOR ALASKA RESIDENTS: THE SECURITIES OFFERED HAVE BEEN REGISTERED WITH THE ADMINISTRATOR OF SECURITIES OF THE STATE OF ALASKA UNDER THE PROVISIONS OF 3 MC 08.500-3 MC 08.506. THE INVESTOR IS ADVISED THAT THE ADMINISTRATOR HAS MADE ONLY A CURSORY REVIEW OF THE REGISTRATION STATEMENT AND HAS NOT REVIEWED THIS DOCUMENT SINCE THE DOCUMENT IS NOT REQUIRED TO BE FILED WITH THE ADMINISTRATOR. THE FACT OF REGISTRATION DOES NOT MEAN THAT THE ADMINISTRATOR HAS PASSED IN ANY WAY UPON THE MERITS, RECOMMENDED, OR APPROVED THE SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS A VIOLATION OF A.S. 45.55.170.

THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.

FOR CALIFORNIA RESIDENTS: THE SALE OF THE UNITS AND THE UNDERLYING COMMON SHARES, WARRANTS AND SECURITIES OFFERED HEREBY HAVE NOT BEEN QUALIFIED WITH THE CALIFORNIA COMMISSIONER OF CORPORATIONS, AND THE ISSUANCE OF SUCH SECURITIES OR PAYMENT OR RECEIPT OF ANY CONSIDERATION THEREOF IS UNLAWFUL UNLESS AN EXEMPTION FROM QUALIFICATION IS PERFECTED.

FOR COLORADO RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1983, AS AMENDED, OR THE COLORADO SECURITIES ACT OF 1981, BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE REGISTERED OR ANY EXEMPTION FROM REGISTRATION IS AVAILABLE.

FOR CONNECTICUT RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 36485 OF THE CONNECTICUT UNIFORM SECURITIES ACT AND THEREFORE CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER SUCH ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

 

  

  

  

 

FOR DELAWARE RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT AND ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER SECTION 7309(B)(9) OF THE DELAWARE SECURITIES ACT AND RULE 9(B)(9)(II) THEREUNDER. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

NOTICE TO FLORIDA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE FLORIDA SECURITIES ACT, BY REASONS OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

THE SHARES REFERRED TO IN THIS SUBSCRIPTION AGREEMENT WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER SECTION 517.061(12) OF THE FLORIDA SECURITIES ACT. THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA, IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASE TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN 3 DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

NOTICE TO GEORGIA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 10-5-5 OF THE GEORGIA SECURITIES ACT OF 1973 (THE "ACT") AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION THEREFROM. THESE SECURITIES CANNOT BE SOLD TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THE INVESTMENT IS SUITABLE IF IT DOES NOT EXCEED 20% OF THE INVESTOR'S NET WORTH.

NOTICE TO HAWAII RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE HAWAII UNIFORM SECURITIES ACT (MODIFIED), BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

FOR IDAHO RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IDAHO SECURITIES ACT (THE "ACT") AND MAY BE TRANSFERRED OR RESOLD BY RESIDENTS OF IDAHO ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THE ACT OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THE INVESTMENT IS SUITABLE IF IT DOES NOT EXCEED 10% OF THE INVESTOR'S NET WORTH.

 

  

  

  

 

FOR ILLINOIS RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECRETARY OF STATE OF ILLINOIS OR THE STATE OF ILLINOIS, NOR HAS THE SECRETARY OF STATE OF ILLINOIS OR THE STATE OF ILLINOIS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

FOR INDIANA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 3 OF THE INDIANA BLUE SKY LAW AND ARE OFFERED PURSUANT TO AN EXEMPTION UNDER SECTION 23-2-1-2(B) (10) THEREOF AND MAY BE TRANSFERRED OR RESOLD ONLY IF REGISTERED PURSUANT TO THE CODE OR IF EXEMPTION FROM REGISTRATION IS AVAILABLE. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

FOR IOWA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IOWA UNIFORM SECURITIES ACT (THE "ACT") AND ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER SECTION 502.203(9) OF THE ACT. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

FOR MAINE RESIDENTS: THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES ADMINISTRATOR OF THE STATE OF MAINE UNDER SECTION 10502(2) @ TITLE 32 OF THE MAINE REVISED STATUTES. THESE SECURITIES MAY BE DEEMED RESTRICTED SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.

NOTICE TO MASSACHUSETTS RESIDENTS:  THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE MASSACHUSETTS SECURITIES ACT BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.  THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE MASSACHUSETTS IS SECURITIES ACT, IF SUCH REGISTRATION IS REQUIRED.

FOR MICHIGAN RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 451.701 OF THE MICHIGAN UNIFORM SECURITIES ACT (THE "ACT") AND MAY BE TRANSFERRED OR RESOLD BY RESIDENTS OF MICHIGAN ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THE ACT OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE

 

  

  

  

 

FOR MISSISSIPPI RESIDENTS: THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER THE MISSISSIPPI SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS NOT BEEN FILED WITH THE MISSISSIPPI SECRETARY OF STATE OR WITH THE SECURITIES AND EXCHANGE COMMISSION. NEITHER THE SECRETARY OF STATE NOR THE COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, NOR HAS APPROVED OR DISAPPROVED THE OFFERING. THE SECRETARY OF STATE DOES NOT RECOMMEND THE PURCHASE OF THESE OR ANY OTHER SECURITIES.

THERE IS NO ESTABLISHED MARKET FOR THESE SECURITIES AND THERE MAY NOT BE ANY MARKET FOR THESE SECURITIES IN THE FUTURE. THE SUBSCRIPTION PRICE OF THESE SECURITIES HAS BEEN ARBITRARILY DETERMINED BY THE ISSUER AND IS NOT AN INDICATION OF THE ACTUAL VALUE OF THESE SECURITIES.

THE PURCHASER OF THESE SECURITIES MUST MEET CERTAIN SUITABILITY STANDARDS (SEE "SUITABILITY STANDARDS"), AND MUST BE ABLE TO BEAR AN ENTIRE LOSS OF HIS INVESTMENT. THESE SECURITIES MAY NOT BE TRANSFERRED FOR A PERIOD OF ONE (1) YEAR EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MISSISSIPPI SECURITIES ACT OR IN A TRANSACTION IN COMPLIANCE WITH THE MISSISSIPPI SECURITIES ACT.

NOTICE TO NEW JERSEY RESIDENTS: THESE SECURITIES ARE OFFERED IN RELIANCE ON AN EXEMPTION FROM REGISTRATION UNDER THE NEW JERSEY UNIFORM SECURITIES LAW.  THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SAID LAW AND MAY NOT BE RE-OFFERED FOR SALE, TRANSFER OR RESOLD WITHOUT COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SAID LAW OR AN EXEMPTION THEREFROM.  THE BUREAU OF SECURITIES OF NEW JERSEY HAS NOT PASSED UPON THE ACCURACY OR COMPLETENESS OF THIS MEMORANDUM AND DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF THE SECURITIES.

FOR NEW MEXICO RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SECURITIES DIVISION OF THE NEW MEXICO DEPARTMENT OF BANKING NOR HAS THE SECURITIES DIVISION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

FOR NEW YORK RESIDENTS: THIS OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE.  THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

  

  

  

 

NOTICE TO OHIO RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE OHIO SECURITIES ACT (THE “OHIO ACT”), AND THEREFORE CANNOT BE RESOLD OR TRANSFERRED BY THE INVESTOR EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE OHIO ACT, OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE OHIO ACT.

FOR PENNSYLVANIA RESIDENTS: THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER SECTION 201 OF THE PENNSYLVANIA SECURITIES ACT OF 1972 (THE "ACT") AND MAY BE RESOLD BY RESIDENTS OF PENNSYLVANIA ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THE NET WORTH OF ALL PENNSYLVANIA NON ACCREDITED PURCHASERS MUST EXCEED FIVE TIMES THEIR INVESTMENT EXCLUSIVE OF HOME, FURNISHINGS, AUTOMOBILES AND PROPOSED INVESTMENT.

EACH PERSON WHO ACCEPTS AN OFFER TO PURCHASE SECURITIES EXEMPTED FROM REGISTRATION BY SECTION 203(D), (F), (P) OR (R), DIRECTLY FROM AN ISSUER OR AFFILIATE OF AN ISSUER SHALL HAVE THE RIGHT TO WITHDRAW HIS OR HER ACCEPTANCE WITHOUT INCURRING ANY LIABILITY TO THE SELLER, UNDERWRITER (IF ANY) OR ANY OTHER PERSON, WITHIN TWO BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE ISSUER OF HIS OR HER WRITTEN BINDING CONTRACT OF PURCHASE OR, IN THE CASE OF A TRANSACTION IN WHICH THERE IS NO WRITTEN BINDING CONTRACT OF PURCHASE, WITHIN TWO BUSINESS DAYS AFTER HE MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.

FOR SOUTH DAKOTA RESIDENTS: THE SHARES REPRESENTED BY THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER CHAPTER 47-31 OF THE SOUTH DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM, OR OPERATION OF LAW.

NOTICE TO TENNESSEE RESIDENTS: IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.

THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSIONS OR REGULATORY AUTHORITY.  FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

  

  

  

 

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE TENNESSEE SECURITIES ACT OF 1993, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

FOR TEXAS RESIDENTS: THE SHARES OFFERED HEREBY ARE BEING OFFERED AND SOLD IN TEXAS IN RELIANCE UPON THE EXEMPTION UNDER SECTION 5.1 OF THE TEXAS SECURITIES ACT AND REGULATION #109.13 OF THE TEXAS SECURITIES BOARD ISSUED UNDER THE TEXAS SECURITIES ACT. TEXAS INVESTORS ARE SUBJECT TO THE ADDITIONAL SUITABILITY REQUIREMENT IMPOSED BY THE REGULATIONS OF THE TEXAS SECURITIES BOARD; THE TOTAL COST OF THE PROPOSED INVESTMENT SHALL NOT EXCEED 20% OF THE INVESTOR'S NET WORTH (OR JOINT NET WORTH WITH THE INVESTOR'S SPOUSE) AT THE TIME OF SALE.

A PURCHASER OF THE SHARES OFFERED HEREBY MUST BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE SECURITIES HAVE NOT BEEN REGISTERED UNDER APPLICABLE SECURITIES LAWS AND THEREFORE CANNOT BE SOLD UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER SUCH SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

FOR VIRGINIA RESIDENTS: THE VIRGINIA STATE CORPORATION COMMISSION DOES NOT PASS UPON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT NOR UPON THE MERITS OF THE OFFERING AND THE COMMISSSION EXPRESSES NO OPINION AS TO THE QUALITY OF THESE SHARES.

FOR WYOMING RESIDENTS: THESE SERCURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE WYOMING UNIFORM SECURITIES ACT, BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION IS AVAILABLE.

FOREIGN INVESTOR LEGEND

FOR FOREIGN INVESTORS: IT IS THE RESPONSIBILITY OF EACH PERSON PURCHASING THE SECURITIES OFFERED HEREBY TO FULLY OBSERVE THE LAWS OF ANY RELEVANT TERRITORY OR JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE.

  

  

  

 

Table of Contents

 

 

	HEADING	PAGE
	 	 
	SUMMARY	 1
	THE OFFERING	 1
	RISK FACTORS	 3
	FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS	 4
	USE OF PROCEEDS	 5
	DIVIDENDS	 5
	BUSINESS	 6
	MANAGEMENT	 7
	PRINCIPAL SHAREHOLDERS	 8
	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	 9
	PLAN OF DISTRIBUTION	 9
	DESCRIPTION OF SECURITIES	 10
	LIMITATIONS ON TRANSFER OF SHARES	 10
	INVESTOR QUALIFICATIONS	 10
	SUBSCRIPTION PROCEDURES	 12
	FURTHER INFORMATION	 12

 

We encourage all potential investors to review carefully the attached exhibits and this memorandum.

LIST OF EXHIBITS

SUBSCRIPTION BOOKLET

Exhibit A                      Subscription Agreement

Exhibit B                      Investor Questionnaire

  

  

  

 

SUMMARY

This memorandum contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in such forward-looking statements.  Factors that might cause differences include, but are not limited to, those discussed in “Risk Factors.”

Comp Services, Inc.

Comp Services, Inc. (“we,” the “Company” or “Comp Services”), a hardware/software related online directory which links hundreds of advertisers who provide various computer products, is incorporated in the State of Nevada and operates in Alhambra, California. It was founded by Mr. Gabriel Mendez who is now the Chief Executive Officer.

The company owns ComputerBuyout.com, an online site  featuring hundreds of high quality computer, electronics, and software products.  The company generates revenue as a percentage of each sales made through its affiliate accounts.

Comp Services links hundreds of advertisers who provide various computer products. This online portal gains commission on everything sold based on their website. A built in tracking system cohesively tracks all clicks, and sales generated by affiliates of Comp Services. Advertisers are responsible for any logistics from customer service, to delivery of the product.

 

THE OFFERING

 

	Securities Offered	We are offering a maximum of 1,000,000 Common Shares.
	 	 
	Purchase Price	$0.05 per Common Share.
	 	 
	Minimum Investment	$500, although we may, in our sole discretion, permit sales of less than $500.
	 	 
	Offering Period	The offering period will terminate on the earlier of the sale of the maximum of 1,000,000 Common Shares or February 1, 2012. We have the option to extend the offering for a maximum of 90 days.
	 	 
	Plan of Distribution	We, through our officers and directors, will offer on a best-efforts basis a maximum of 1,000,000 Common Shares.
	 	 
	Investor Suitability	This offering will only be made to persons who qualify as “accredited investors," as that term is defined under the Securities Act and a limited number of sophisticated investors who meet certain suitability standards described in this document, and persons who are not “US persons” as defined in Regulation S under the Securities Act. The securities under this Offering are being sold pursuant to certain exemptions from registration under the Securities Act including the exemptions afforded by Regulation D and Regulation S promulgated under the Securities Act and the resale of the securities will be limited by the terms of such laws and regulations.

 

  

1

  

 

	 	 
	Use of Proceeds	The net proceeds from the offering will be used by us for the development of the U.S. market, improving existing networks, and other expenses related to the Company being publicly traded.
	 	 
	Restriction on Resale	None of the Common Shares offered have been registered under the Securities Act and the certificates representing our Common Shares will contain a legend restricting the distribution, resale, transfer, pledge, hypothecation or other disposition of the Common Shares unless and until such Common Shares are registered under the Securities Act or an opinion of counsel reasonably satisfactory to us is received that registration is not required under the Securities Act.
	 	 
	Available Documents	Any documents or information concerning us which a prospective purchaser reasonably requests to inspect or have disclosed to him or her will be made available or disclosed, subject in appropriate circumstances to receipt by us of reasonable assurances that such documents or information will be maintained in confidence.
	 	 
	

Subscription Documents

	The purchase of the Common Shares shall be made pursuant to the Confidential Prospective Purchaser Questionnaire (attached hereto as Exhibit A) and the Subscription Agreement  (attached hereto as Exhibit B), which will contain, among other things, customary representations and warranties and investment representations by the purchasers.
	 	 
	Expenses	All prospective purchasers of the common shares will be responsible for their own costs, fees and expenses, including the costs, fees and expenses of their legal counsel and other advisors.
	 	 
	Dividends	We have not paid any dividends to date on the Common Shares.

 

 

  

2

  

 

RISK FACTORS

The Common Shares offered are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose their entire investment. Accordingly, prospective investors should carefully consider, along with other matters referred to herein, the following risk factors in evaluating our business before purchasing any common shares.  This Memorandum contains forward-looking statements which involve risks and uncertainties.  Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth in the following risk factors and elsewhere in this Memorandum.

We Have A Limited Operating History In Which To Evaluate Our Business.

We are a start-up company with limited revenue to date and have a limited operating history upon which an evaluation of our future success or failure can be made.

If We Do Not Raise Enough Money, We Will Have To Delay Our Expansion Plans Or Cease Business.

Once the shares offered totaling 1,000,000 or $50,000, are sold, there will be no refunds on the sale of our Common Shares. Even if we raise the maximum amount of this offering, we may not have enough funds to successfully undertake our business plan.

There Is No Public Trading Market For Our Common Stock And You May Not Be Able To Resell Your Shares of Our Common Stock.

There is currently no public trading market for our common stock. Therefore, there is no central place, such as a stock exchange or electronic trading system, to resell your common shares. If you do want to resell your common shares, you may have to locate a buyer and negotiate your own sale.

Our Future Success Is Dependent, In Part, On the Performance and Continued Service Of Mr. Gabriel Mendez, Our Founder and Chief Executive Officer.

We are presently dependent to a great extent upon the experience, abilities and continued services of Mr. Gabriel Mendez, our founder and chief executive officer.  The loss of his services could have a material adverse effect on our business, financial condition or results of operation.

The Shares Sold In This Offering Have Not Been Registered Under The Securities Act, And Therefore The Shareholders Must Be Prepared To Hold Such Shares For An Indefinite Period Of Time.

Our common shares offered are "restricted securities" as defined under the Securities Act. The resale of such securities may not be made without registration under the Securities Act and state securities laws or the existence of an exemption from such registration requirements.

We Have No Plans To Pay Dividends.

To date, we have paid no cash dividends on our common shares.  For the foreseeable future, earnings generated from our operations will be retained for use in our business and not to pay dividends.

  

3

  

 

FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS

This memorandum contains certain forward-looking statements, including among others (i) anticipated trends in our financial condition and results of operations, and (ii) our business strategy for managing and expanding our operations. These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. Actual results could differ materially from these forward-looking statements.  In addition to other risks described elsewhere in the Risk Factors discussion, important factors to consider in evaluating such forward-looking statements include (i) changes in external competitive market factors or in our internal budgeting process which might impact trends in our results of operations; (ii) unanticipated working capital or other cash requirements; (iii) changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the industries in which we operate; and (iv) various competitive factors that may prevent us from competing successfully in the marketplace.  In light of these risks and uncertainties, many of which are described in greater detail elsewhere in the “Risk Factors” discussion, there can be no assurance that the events predicted in forward-looking statements contained in this memorandum will, in fact, transpire.  Prospective investors should have this Disclosure Statement reviewed by their personal investment advisors, legal counsel and/or accountants to properly evaluate the risks and contingencies of this offering.

 

  

4

  

 

USE OF PROCEEDS

The net proceeds to the Company after deducting offering expenses of up to $10,000 will be $40,000 if all of the Common Shares are sold. The first $10,000 raised will be used for offering expenses. We will use the net proceeds as follows:

$50,000 Offering

	 	

Dollar Amount

	

Percentage of Net Proceeds

	
Net Proceeds

	
$0,000

	
100.0%

	Application of Proceeds:	 	 
	

Marketing

	

$10,000

	

25%

	

Working Capital

	

$30,000

	

75%

	 	 	 
	 	 	 
	 	 	 

DIVIDENDS

To date, we have paid no dividends on our common shares and have no present intention of paying any dividends on our common shares in the foreseeable future. The payment by us of dividends on the common shares in the future, if any, rests solely within the discretion of our board of directors and will depend upon, among other things, our earnings, capital requirements and financial condition, as well as other factors deemed relevant by our board of directors. Although dividends are not limited currently by any agreements, it is anticipated that future agreements, if any, with institutional lenders or others may limit our ability to pay dividends on our common shares.

  

5

  

 

BUSINESS

General

Comp Services Inc. was formed in the State of Nevada by Mr. Gabriel Mendez, the current CEO of the Company. As of the date of this Private Placement Memorandum, we have 3,000,000 shares of common stock issued outstanding, all of which are owned by Mr. Mendez.

The Company owns ComputerBuyout.com, an online site featuring hundreds of high quality computer, electronics, and software products.  The company generates revenue as a percentage of each sales made through its affiliate accounts.

Objectives

There are 3 main objectives to this business plan:

	
(1)  

	
To become a competitor in the computer hardware and software online market;

	
(2)  

	
To sell, on average, 1 item from each of our affiliate sites per day, which will average 30 sales per day;

	
(3)  

	
To attract and partner with additional affiliate partners so as to reach our full capacity by the end of 2011 fiscal year.

Products and Services

Comp Service, Inc.'s offers an extensive range of products as outlined in the detailed sections below. It is ultimately the goal of the company to offer a one-stop portal to reach diverse computer hardware and software product websites. ComputerBuyout.com will offer a network of alternate computer products for customers via worldwide-web.

The following are some categories of products the Company intends to market:

	
·  

	
Desktops: a wide variety of PC's and Apple products, including monitors, keyboards, mice, & speakers.

	
·  

	
Notebooks: ranging from 10" to 17" with Microsoft Windows or Mac operating systems.

	
·  

	
Netbooks: These products are currently top selling, extremely light, portable, and user friendly, with fair prices and thousands to choose from.

	
·  

	
Handhelds & PDA's: products in this category range from cellphones to portable GPS navigation systems.

	
·  

	
Computer Add-Ons: containing accessory items which need to be installed or plug-n-play products. Some examples of these products are: wireless network cards, webcams, game controllers, and USB drives.

 

  

6

  

 

	
·  

	
Software: includes anything from Operating Systems to Virus protection software. This industry is highly competitive with suppliers having a great deal of power in setting and negotiating the prices of their products and services; however, by having such affiliate partners with the lowest costs on the market, the website will maintain a fair amount of traffic. This is the only way to have an advantage in this industry, with low cost applied aggressively with marketing strategies to gain strong business-to-customer ties.

Market Opportunity

Because Comp Services, Inc. is an online based business, there is a wide range of target markets for our products. We target on-line shoppers. Nearly 114,825,428 households reside in the United States area, and 80% of all households obtain or own their own computer. Computers and Handhelds are currently one of the fastest growing products, and because of the new era of the internet, people have begun to shop online for cheaper pricing.

By linking with other affiliate companies our sales will grow the more we advertise. Some advertising companies pay as much as 25% commission on each product. By combining 30 sub-domain directories, monthly advertisers, and Google AdSense; www.ComputerBuyout.com will be a leading company in directing clients to their products.

Marketing Strategy

We plan to advertise on search engines and various websites with the intention of directing on-line traffic to the ComputerBuyout.com site. Once at our site, customers can make purchases from any of our affiliate partners including: Amazon Associates Program, Google AdSense Publish Program, Commission Junction Roxio, Commission Junction AVG, Commission Junction Corel Draw, Commission Junction Compuvest, Commission Junction Web Watcher, and Smooth Antivirus. We will earn a commission on any sales by our affiliates through the ComputerBuyout.com site. These commission and associates programs will allow www.ComputerBuyout.com to earn up to 25% commission on certain computer products and software.

Web Plan Summary

www.ComputerBuyout.com will be the main web portal for our company. The website is already designed and created to link all our clients to the correct affiliate companies and their products.

Employees

The Company currently has one 1 part-time employee.

Legal Proceedings

Currently there is no legal action pending against us nor, to our knowledge, any such proceeding contemplated.

MANAGEMENT

Directors and Executive Officers

The company is owned by Gabriel Mendez, Mr. Mendez is CEO and obtains 80% of shares of Comp Services, Inc.

 

  

7

  

 

Family Relationships

There is no family relationship exists between any director, executive officer of the company, or any person contemplated to become such.

Business Experience

Mr. Mendez's educational and work experience consists of consulting for Focus Micro, a company involved in high-end security CCTV systems and installation. Managing of a 7-Eleven franchises where his duties consisted of accounting, maintaining inventory, managing employees, and daily operations. Gabriel started his educated at Pasadena City College where he studied Technical Theatre. In 2006, he graduated from the Academy of Art University, San Francisco with Fundamentals of Motion Picture and Television.

Employment Agreement

Our sole officer and director presently does not have an employment agreement with us.

Director Compensation

Our directors will not receive a fee for attending each board of directors meeting or meeting of a committee of the board of directors. All directors will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with attending board of director and committee meetings.

Option Plan

There is no stock option plan or common shares set aside for any stock option plan.

Certain Relationships and Related Transactions

We will present all possible transactions between us and our officers, directors or 5% stockholders, and our affiliates to the board of directors for our consideration and approval. Any such transaction will require approval by a majority of the disinterested directors and such transactions will be on terms no less favorable than those available to disinterested third parties.

 

PRINCIPAL SHAREHOLDERS

 

The following table sets forth certain information concerning stock ownership of all persons known by us to own beneficially five percent or more of the outstanding Common Stock, each director and certain executive officers and directors as a group, and as adjusted to reflect the sale of the total amount of Shares offered hereby.

 

	Name of Beneficial Owner	 	
Number of 

Common Shares Owned

	 	 	
Percent of Class 

Before Offering

	 	 	
Percent of Class 

After Offering (1)

	 
	 	 	 	 	 	 	 	 	 	 
	Gabriel Mendez  	 	 	3,000,000	 	 	 	100	%	 	 	60.0	%

 

(1) - Upon the completion of this offering, 5,000,000 shares of common stock will be issued and outstanding, assuming sale of all of the common shares.

 

  

8

  

 

Each outstanding share of Common Stock is entitled to one vote, either in person or by proxy, on all matters that may be voted on by the owners thereof at the shareholder meetings of the Company.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Except as disclosed below, none of the following persons has any direct or indirect material interest in any transaction to which we are a party since our incorporation or in any proposed transaction to which we are proposed to be a party:

	
(A)  

	
Any of our directors or officers;

	
(B)  

	
Any proposed nominee for election as our director;

	
(C)  

	
Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our Common Stock; or

	
(D)  

	
Any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary of our company.

PLAN OF DISTRIBUTION

Through our officers and directors, we are offering for sale 1,000,000 shares of our common stock, at $0.05 per share of common stock on a best-efforts basis. The Shares are being offered to accredited, a limited number of sophisticated investors.  Subscriptions are payable by wire transfer or by check subject to collection.  The offering price is $0.05 per common share.  The minimum investment is $500, however, we may, in our sole mutual discretion, accept subscriptions for lesser amounts.  We shall be responsible for paying the legal fees and expenses incurred in connection with the registration of the common shares being sold in this offering under the state blue sky laws of the various states in which the Common Shares are sold, which fees are not expected to exceed $10,000.

We reserve the right to reject any subscription from a subscriber that we believe, in our sole discretion, does not meet the suitability standards for this offering.  In such an event, any funds received from such subscriber will be promptly returned without interest or deduction.

Prior to the closing, a Confidential Prospective Purchaser Questionnaire (annexed hereto as Exhibit B) and a Subscription Agreement (annexed hereto as Exhibit C) must be completed and executed by each investor and delivered to us along with funds in the amount of the purchase price of the common shares being purchased.

We may, at our sole discretion, reject any potential investor’s Subscription Agreement in whole or in part, however, Subscription Agreements from any potential investor may only be accepted if such investor meets the minimum suitability standards for an investment in this offering. We are under no obligation to accept a potential investor’s Subscription Agreement and we have the discretion to accept Subscription Agreements to subscribe for any amount up to and including the amount of the entire offering. Our executive officers, controlling persons and affiliates may purchase our common shares in the offering in any amount.

  

9

  

 

DESCRIPTION OF SECURITIES

 

Common Stock

 

All Common Shares offered, when issued, will be fully paid and non-assessable, with no personal liability attaching to the ownership.  The holders of Common Shares do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding common shares can elect all of the directors.

Dividend Policy

It is unlikely that we will declare or pay cash dividends in the foreseeable future. We intend to retain earnings, if any, to expand our operations.

LIMITATIONS ON TRANSFER OF SHARES

The shares offered hereby have not been registered with the Commission pursuant to the Securities Act; however, they are deemed to be exempt from such registration pursuant to Regulation D Rule 506 of the Securities Act or if sold to a “non US” person, Regulation S of the Securities Act.  Even so, the shares are subject to a restriction on re-sale and will be marked as such on the face of the certificate.  In addition, there are limits on the resale of the shares by virtue of their corporate issuance.  Accordingly, an investment in the shares offered herein should be considered highly illiquid.

INVESTOR QUALIFICATIONS

Prospective investors should consider carefully each of the risks associated with this offering, particularly those described in “Risk Factors.”  In view of these risks, including the lack of an available trading market for the securities, and the consequent long-term nature of any investment in us, this offering is available only to investors who have substantial net worth and no need for liquidity in their investments.  The shares will be offered for sale only to accredited investors and a limited number of sophisticated investors, who, in conjunction with such sale, will represent in the Subscription Agreement that, among other things, the share(s) purchased are being acquired by each investor for his own account, for investment purposes and not with a view to resell or distribute those shares.

 

We, in reliance upon the criteria set forth in Rule 501(a) promulgated under the Securities Act, have established investor suitability standards for investors in the securities. Common shares will be sold only to an investor who:

 

	 	(a)	represents that such investor is acquiring the common shares for such investor’s own account, for investment only not with a view to the resale or distribution thereof;
	 	 	 
	 	(b)	acknowledges that the right to transfer the common shares will be restricted by the Securities Act, applicable state securities laws and certain contractual restrictions, and that the investor’s ability to do so will be restricted by the absence of a market for the common shares; and
	 	 	 
	 	(c)	represents that such investor qualifies as one or more of the following:

 

  

10

  

 

	 	(1)	
Any natural person whose individual net worth or joint net worth with that person's spouse, at the time of his purchase exceeds $250,000;

	 	 	 
	 	

(2)

	Any natural person who had an individual income in excess of $250,000 in each of the two most recent years, or (except for residents of the State of New Jersey) joint income with that person's spouse in excess of $300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year;
	 	 	 
	 	
(3)

	
Any bank as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the "Act"), or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; any insurance company as defined in Section 2(13) of the Act; any investment company registered under the Investment Harrison Act of 1940 (the "Investment Company Act") or a business development Harrison as defined in Section 2(a)(48) of the Investment Company Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

	 	 	 
	 	

(4)

	Any private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
	 	 	 
	 	
(5)

	
Any organization (described in Section 501(c)(3) of the Internal Revenue Code), corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

	 	 	 
	 	

(6)

	Any director, or executive officer of Comp Services;
	 	 	 
	 	

(7)

	Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment, or the company reasonably believes immediately prior to making any sale that such purchaser comes within this description; or
	 	 	 
	 	

(8)

	Any entity in which all of the equity owners are accredited investors.

If such person is not an Accredited Investor, that such person must be a sophisticated investor who:

 

	 	(a)	
represents that such investor is acquiring the Securities for such investor’s own account, for investment only not with a view to the resale or distribution thereof;

 

  

11

  

 

	 	 	 
	 	(b)	
acknowledges that the right to transfer the Securities will be restricted by the Securities Act, applicable state securities laws and certain contractual restrictions, and that the investor’s ability to do so will be restricted by the absence of a market for the Securities; and

	 	 	 
	 	(c)	
represents that such investor qualifies as one or more of the following:

 

	 	(1)	has an investment of $250,000 or more in shares;
	 	 	 
	 	(2) 	
has personal income before taxes for his or her last fiscal year or latest 12-month period of at least $300,000;

	 	 	 
	 	(3)	
is capable of bearing the economic risk of his or her investment and has a net worth (exclusive of home, home furnishings, personal automobiles and the amount to be invested in these shares) of at least five (5) times the total purchase price of the shares subscribed for by the investor.

 

Investors will be required to make certain representations and to satisfy certain other standards and conditions, which are set forth in a Confidential Prospective Purchaser Questionnaire and Subscription Agreement (annexed hereto as Exhibits B and C, respectively) that must be executed by all investors in this offering.

The suitability standards referred to above are minimum requirements; the satisfaction of such standards does not mean that an investment in the Company is a suitable investment for an investor.  In addition, we may revoke the offer made and refuse to sell any common shares to a prospective investor for any other reason whatsoever, even if such investor returns a Confidential Prospective Purchaser Questionnaire and Subscription Agreement containing appropriate representations.

SUBSCRIPTION PROCEDURES

In order to subscribe for the common shares, each prospective investor will be required to deliver the subscription price, made payable to “Comp Services Inc.” in United States dollars, by check or wire transfer in accordance with our instructions. In addition, the prospective investor must complete, execute and deliver the following to us:

	
·  

	
A signature page that will evidence such prospective investors’ execution of a Subscription Agreement. This document includes certain responsibilities by such investor relating to such investor’s subscription; and

	
·  

	
A completed and executed Confidential Prospective Purchase Questionnaire.

FURTHER INFORMATION

A prospective investor remitting the purchase price by wire transfer should first contact us to receive proper wire instructions to make necessary arrangements for such wire.

Subscription agreements are not binding on us until accepted by us. We reserve the right to reject, in whole or in part, in our sole discretion, any lesser number of common shares than the number for which a prospective investor has subscribed. If we reject all or a portion of any subscription, we will mail the subscriber a check for all, or the appropriate portion of, the amount submitted with such subscriber’s subscription, without interest or deduction there from.

 

The statements contained in this memorandum constitute only a brief summary of certain provisions of the documents referred to and the transactions contemplated. The statements contained in this document do not purport to be a complete description of every term and condition of such documents and are qualified in their entirety by reference to such documents. As with any summary, some details and exceptions have been omitted. If any of the statements made in this document are in conflict with any of the terms of any of such documents, the terms of such documents will govern. Reference is made to the actual documents for a complete understanding of what they contain. Copies of all documents in connection with the transaction described in this memorandum are either enclosed or are available for inspection at our offices.  Each prospective investor and his advisor are invited and encouraged to ask us questions with respect to the terms and conditions of the offering and our business and request additional information necessary to verify information in this memorandum. We will seek to provide answers and such information to the extent possessed or obtainable without unreasonable effort or expense. Offerees may be required to execute non-disclosure agreements as a prerequisite to reviewing documents determined by us to contain proprietary, confidential or otherwise sensitive information. To obtain such information or to make arrangements to ask such questions of us, prospective investors should contact us at 626- 975- 0027.

  

12

  

 

SUBSCRIPTION AGREEMENT

To:          Comp Services, Inc.

414 S. Almansor St.

Alhambra, CA 91801

 

Dear Sir or Madam:

 

1.    Subscription.

 

The undersigned (the "Purchaser"), intending to be legally bound, hereby irrevocably agrees to purchase from Comp Services Inc., a Nevada Corporation (the “Company”), the number of shares set forth on the Signature Page at the end of this Subscription Agreement (the “Agreement”) at a purchase price of $0.05 per share with a minimum investment of at least $500, upon the terms and conditions hereinafter set forth. This subscription is submitted to the Company in accordance with and subject to the terms and conditions described in this Agreement and in the Confidential Private Placement Memorandum dated as of February 1, 2012.

 

The undersigned is delivering (i) the subscription payment made payable to Comp Services, Inc. (ii) two executed copies of the Signature page at the end of this Agreement, and (iii) one executed copy of Purchaser Questionnaire for Individuals (if appropriate), attached hereto as Exhibit II, to:

 

Comp Services, Inc.

414 S. Almansor St.

Alhambra, CA 91801

 

The undersigned understands that the Common Stock is being issued pursuant to the exemption from the registration requirements of the United States Securities Act of 1933, as amended (the "Securities Act"), provided by Regulation D Rule 506, or Regulation S of such Securities Act. As such, the Common Stock is only being offered and sold to investors who qualify as “accredited investors," and a limited number of sophisticated investors, and persons who are not “US persons” as defined in Regulation S under the Securities Act. The Company is relying on the representations made by the undersigned in this Agreement that the undersigned qualifies as such an accredited, sophisticated, or non “US person” investor. The shares of Common Stock are "restricted securities" for purposes of the United States securities laws and cannot be transferred except as permitted under these laws.

 

2.    Acceptance of Subscription.

 

The Offering will be open until the earlier to occur of (i) February 1, 2012; or (ii) the sale of all of the common shares offered, unless extended by us for up to an additional 90 day period, in our sole discretion.

 

  

A-1

  

 

Subject to applicable state securities laws, the Purchaser may not revoke any subscription that such Purchaser delivers to the Company. However, the undersigned understands and agrees that the Company, in its sole discretion, may (i) reject the subscription of any Purchaser, whether or not qualified, in whole or in, part, and (ii) may withdraw the Offering at any time prior to the termination of the Offering. The Company shall have no obligation to accept subscriptions in the order received. This subscription shall become binding only if accepted by the Company.

 

3.    Memorandum.

 

The purchaser hereby acknowledges receipt of a copy of the Confidential Private Placement Memorandum dated February 1, 2012 (as, the “Memorandum”).

 

4.    Representations and Warranties.

 

4.1. The Company represents and warrants to, and agrees with the undersigned as follows, in each case as of the date hereof and in all material respects as of the date of any closing, except for any changes resulting solely from the Offering:

 

(a) The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation with full power and authority to own, lease, license and use its properties and assets and to carry out the business in which it is engaged as described in the Memorandum. The Company is in good standing in every jurisdiction in which its ownership, leasing, licensing or use of property or assets or the conduct of its business makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the Company.

 

(b) At the date of the closing, the outstanding capital stock of the Company will consist of 5,000,000 shares of common stock, par value $0.05 per share. Each outstanding share of Common Stock is validly authorized, validly issued, fully paid and non-assessable, without any personal liability attaching to the ownership thereof and has not been issued and is not or will not be owned or held in violation of any preemptive rights of stockholders. There is no commitment, plan or arrangement to issue, and no outstanding option, warrant or other right calling for the issuance of, any share of capital stock of the Company or any security or other instrument which by its terms is convertible into, exercisable for or exchangeable for capital stock of the Company, except, as may be described in the Memorandum. There is outstanding no security or other instrument which by its terms is convertible into or exchangeable for capital stock of the Company, except as may be described in the Memorandum.

 

(c) There is no litigation, arbitration, claim, governmental or other proceeding (formal or informal), or investigation pending or, to the best knowledge of the officers of the Company, threatened with respect to the Company, or any of its subsidiaries, operations, businesses, properties or assets except as may be described in the Memorandum or such as individually or in the aggregate do not now have and could not reasonably be expected have a material adverse effect upon the operations, business, properties or assets of the Company.

 

  

A-2

  

 

(d) The Company is not in violation of, or in default with respect to, any law, rule, regulation, order, judgment or decree except as may be described in the Memorandum or such as in the aggregate do not now have and will not in the future have a material adverse effect upon the operations, business, properties or assets of the Company; nor is the Company required to take any action in order to avoid any such violation or default.

 

(e) The Company has all requisite power and authority (i) to execute, deliver and perform its obligations under this Agreement, and (ii) to issue and sell the shares in the Offering.

 

(f) No consent, authorization, approval, order, license, certificate or permit of or from, or declaration or filing with, any United States federal, state, local, or other applicable governmental authority, or any court or any other tribunal, is required by the Company for the execution, delivery or performance by the Company of this Agreement or the issuance and sale of the shares, except such filings and consents as may be required and have been or at the closing will have been made or obtained under the laws of the United States federal and state securities laws.

 

(g) The execution, delivery and performance of this Agreement and the issuance of the Shares will not violate or result in a breach of, or entitle any party (with or without the giving of notice or the passage of time or both) to terminate or call a default under any agreement or violate or result in a breach of any term of the Company's Articles of Incorporation or Bylaws of, or violate any law, rule, regulation, order, judgment or decree binding upon, the Company, or to which any of its operations, businesses, properties or assets are subject, the breach, termination or violation of which, or default under which, would have a material adverse effect on the operations, business, properties or assets of the Company.

 

(h) The Shares issuable in this Offering are validly authorized and, if and when issued in accordance with the terms and conditions set forth in the Memorandum and in this Agreement, will be validly issued, fully paid and non-assessable without any personal liability attaching to the ownership thereof, and will not be issued in violation of any preemptive or other rights of stockholders.

 

(i) The Memorandum and this Agreement do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Without limiting the generality of the foregoing, there has been no material adverse change in the financial condition, results of operations, business, properties, assets, liabilities, or, to the knowledge of the Company, future prospects of the Company from the latest information set forth in the Memorandum.

 

4.2. The undersigned hereby represents and warrants to, and agrees with, the Company as follows:

 

(a) The undersigned is an "Accredited Investor" as that term is defined in Rule 501 (a) of Regulation D promulgated under the Securities Act, and as specifically indicated in Exhibit I attached to this Agreement.

(b) The undersigned is a “Sophisticated Investor” as that term is defined in Rule 506(b)(2)(ii) of Regulation D promulgated under the Securities Act.

 

  

A-3

  

 

(c) For California and Massachusetts individuals: If the subscriber is a California resident, such subscriber's investment in the Company will not exceed 10% of such subscriber's net worth (or joint net worth with his spouse). If the subscriber is a Massachusetts resident, such subscriber's investment in the Company will not exceed 25% of such subscriber's joint net worth with such subscriber's spouse (exclusive of principal residence and its furnishings).

 

(d) If a natural person, the undersigned is: a bona fide resident of the state or non-United States jurisdiction contained in the address set forth on the Signature Page of this Agreement as the undersigned's home address; at least 21 years of age; and legally competent to execute this Agreement. If an entity, the undersigned has its principal offices or principal place of business in the state or non-United States jurisdiction contained in the address set forth on the Signature Page of this Agreement, the individual signing on behalf of the undersigned is duly authorized to execute this Agreement and this Agreement constitutes the legal, valid and binding obligation of the undersigned enforceable against the undersigned in accordance with its terms.

 

(e) The undersigned has received, read carefully and is familiar with this Agreement and the Memorandum.

 

(f) The undersigned is familiar with the Company's business, plans and financial condition, the terms of the Offering and any other matters relating to the Offering, the undersigned has received all materials which have been requested by the undersigned, has had a reasonable opportunity to ask questions of the Company and its representatives, and the Company has answered all inquiries that the undersigned or the undersigned's representatives have put to it. The undersigned has had access to all additional information necessary to verify the accuracy of the information set forth in this Agreement and the Memorandum and any other materials furnished herewith, and have taken all the steps necessary to evaluate the merits and risks of an investment as proposed hereunder.

 

(g) The undersigned (or the undersigned's purchaser representative) has such knowledge and experience in finance, securities, taxation, investments and other business matters so as to be able to protect the interests of the undersigned in connection with this transaction, and the undersigned's investment in the Company hereunder is not material when compared to the undersigned's total financial capacity.

 

(h) The undersigned understands the various risks of an investment in the Company as proposed herein and can afford to bear such risks, including, without limitation, the risks of losing the entire investment.

 

(i) The undersigned acknowledges that no market for the Common Stock presently exists and none may develop in the future and that the undersigned may find it impossible to liquidate the investment at a time when it may be desirable to do so, or at any other time.

 

  

A-4

  

 

(j) The undersigned has been advised by the Company that none of the Common Stock has been registered under the Securities Act, that the Common Stock will be issued on the basis of the statutory exemption provided by Rule 506 of the Securities Act or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering and under similar exemptions under certain state securities laws; that this transaction has not been reviewed by, passed on or submitted to any federal or state agency or self-regulatory organization where an exemption is being relied upon; and that the Company's reliance thereon is based in part upon the representations made by the undersigned in this Agreement.

 

(k) The undersigned acknowledges that the undersigned has been informed by the Company of or is otherwise familiar with, the nature of the limitations imposed by the Securities Act and the rules and regulations thereunder on the transfer of the Common Stock. In particular, the undersigned agrees that no sale, assignment or transfer of any of the Common Stock shall be valid or effective, and the Company shall not be required to give any effect to such a sale, assignment or transfer, unless (i) the sale, assignment or transfer of such Common Stock is registered under the Securities Act, it being understood that the Common Stock are not currently registered for sale and that the Company has no obligation or intention to so register the Common Stock, except as contemplated by the terms of this Agreement or (ii) such Common Stock is sold, assigned or transferred in accordance with all the requirements and limitations of Rule 144 under the Securities Act (it being understood that Rule 144 is not available at the present time for the sale of the Common Stock), or (iii) such sale, assignment or transfer is otherwise exempt from registration under the Securities Act, including Regulation S promulgated thereunder. The undersigned further understands that an opinion of counsel and other documents may be required to transfer the Common Stock.

 

(l) The undersigned acknowledges that the Common Stock shall be subject to a stop transfer order and the certificate or certificates evidencing any Common Stock shall bear the following or a substantially similar legend or such other legend as may appear on the forms of Common Stock and such other legends as may be required by state blue sky laws:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") OR. APPLICABLE STATE SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE STATE SECURITIES LAWS.

 

(m) The undersigned will acquire the Common Stock for the undersigned's own account (or for the joint account of the undersigned and the undersigned's spouse either in joint tenancy, tenancy by 'he entirety or tenancy in common) for investment and not with a view to the sale or distribution thereof or the granting of any participation therein, and has no present intention of distributing or selling to others any of such interest or granting any participation therein.

 

(n) No representation, guarantee or warranty has been made to the undersigned by any broker, the Company, any of the officers, directors, stockholders, partners, employees or agents of either of them, or any other persons, whether expressly or by implication, that:

 

  

A-5

  

 

(I) the Company or the undersigned will realize any given percentage of profits and/or amount or type of consideration, profit or loss as a result of the Company's activities or the undersigned's investment in the Company; or

 

(II) the past performance or experience of the management of the Company, or of any other person, will in any way indicate the predictable results of the ownership of the Common Stock or of the Company's activities.

 

(o) No oral or written representations have been made other than as stated in the Memorandum, and no oral or written information furnished to the undersigned or the undersigned's advisor(s) in connection with the Offering were in any way inconsistent with the information stated in the Memorandum.

 

(p) The undersigned is not subscribing for the Common Stock as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting, or any solicitation of a subscription by a person other than a representative of the Company with which the undersigned had a pre-existing relationship in connection with investments in securities generally.

 

(q) The undersigned is not relying on the Company with respect to the tax and other economic considerations of an investment.

 

(r) The undersigned understands that the net; proceeds from all subscriptions paid and accepted pursuant to the Offering (after deduction for commissions, discounts and expenses of the Offering) will be used in all material respects for the purposes set forth in the Memorandum.

 

(s) Without limiting any of the undersigned's other representations and warranties hereunder, the undersigned acknowledges that the undersigned has reviewed and is aware of the risk factors described in the Memorandum.

 

(t) The undersigned acknowledges that the representations, warranties and agreements made by the undersigned herein shall survive the execution and delivery of this Agreement and the purchase of the Common Stock.

 

(u) The undersigned has consulted his own financial, legal and tax advisors with respect to the economic, legal and tax consequences of an investment in the Common Stock and has not relied on the Memorandum or the Company, its officers, directors or professional advisors for advice as to such consequences.

 

5.    Indemnification.

 

  

A-6

  

 

The Purchaser understands the meaning and legal consequences of the representations and warranties contained in Section 4.2, and agrees to indemnify and hold harmless the Company and each member, officer, employee, agent or representative thereof against any and all loss, damage or liability due to or arising out of a breach of any representation or warranty, or breach or failure to comply with any covenant, of the Purchaser, whether contained in the Memorandum or this Subscription Agreement. Notwithstanding any of the representations, warranties, acknowledgments or agreements made herein by the Purchaser, the Purchaser does not thereby or in any other manner waive any rights granted to the Purchaser under federal or state securities laws.

 

6.    Provisions of Certain State Laws.

 

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED TIE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE UNIFORM SECURITIES ACT AND, THEREFORE, CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

 

7.    Additional Information.

 

The Purchaser hereby acknowledges and agrees that the Company may make or cause to be made such further inquiry and obtain such additional information as they may deem appropriate, with regard to the suitability of the undersigned.

 

8.    Irrevocability; Binding Effect.

 

The purchaser hereby acknowledges and agrees that the Subscription hereunder is irrevocable, that the Purchaser is not entitled to cancel, terminate or revoke this Subscription Agreement or any agreements of the undersigned thereunder and that this Subscription Agreement and such other agreements shall survive the death or disability of the Purchaser and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns. If the Purchaser is more than one person, the obligations of the Purchaser hereunder shall be joint and several and the agreements, representations, warranties and acknowledgements herein contained shall be deemed to be made by and be binding upon each such person and his heirs, executors, legal representatives and assigns.

 

  

A-7

  

 

9.    Modification.

 

Neither this Subscription Agreement nor any provisions hereof shall be waived, modified, discharged or terminated except by an instrument in writing signed by the party against whom any such waiver, modification, discharge or termination is sought.

 

10.    Notices.

 

Any notice, demand or other communication which any party hereto may be required, or may elect, to give to any other party hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a United States mail box, stamped registered or certified mail, return receipt requested, addressed to such address as may be listed on the books of the Company, or (b) delivered personally at such address.

 

11.    Counterparts.

 

This Subscription Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each such counterpart shall, for all purposes, constitute one agreement binding on all parties, notwithstanding that all parties are not signatories to the same counterpart.

 

12.    Entire Agreement.

 

This Subscription Agreement contains the entire agreement of the parties with respect to the subject matter hereof and there are no representations, covenants or other agreements except as stated or referred to herein.

 

13.    Severability.

 

Each provision of this Subscription Agreement is intended to be severable from every other provision, and the invalidity or illegality of any Portion hereof shall not affect the validity or legality of the remainder hereof.

14.    Assignability.

This Subscription Agreement is not transferable or assignable by the Purchaser.

 

15.    Applicable Law.

 

This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of Nevada as applied to residents of that State executing contracts wholly to be performed in that State.

 

  

A-8

  

 

16.    Choice of Jurisdiction.

The parties agree that any action or proceeding arising, directly, indirectly or otherwise, in connection with, out of or from this Subscription Agreement, any breach hereof or any transaction covered hereby shall be resolved within the State of Nevada. Accordingly, the parties consent and submit to the jurisdiction of the United States federal and state courts located within the State of Nevada.

 

IN WITNESS THEREOF, the undersigned exercises and agrees to be bound by this Subscription Agreement by executing the Signature Page attached hereto on the date therein indicated.

 

 

  

A-9

  

 

SIGNATURE PAGE TO THE SUBSCRIPTION AGREEMENT

 

By executing this Signature Page, the undersigned hereby executes, adopts and agrees to all terms, conditions and representations of this Subscription Agreement and acknowledges all requirements are met by the purchaser to purchase shares in the Company.

Number of Shares Subscribed at $0.05 per Share:  ___________________________________

Aggregate Purchase Price: $ ____________________________________________________

 

	Type of ownership:	 ____________ 	Individual
	 	 ____________ 	Joint Tenants
	 	 ____________ 	Tenants by the Entirety
	 	 ____________ 	Tenants in Common
	 	 ____________ 	Subscribing as Corporation or Partnership
	 	 ____________ 	Other

 

IN WITNESS WHEREOF, the undersigned Purchaser has executed this Signature

Page this __________  day of _________________________, 201_.

 

	 	 	 	 
	Exact Name in which Shares are to be Registered	 	Exact Name in which Shares are to be Registered	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Signature	 	Signature	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Print Name	 	Print Name	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
Tax Identification Number

Or Social Security Number 

	 	
Tax Identification Number

Or Social Security Number

	 
	 	 	 	 

 

  

A-10

  

 

	 	 	 	 
	 	 	 	 
	Mailing Address	 	Mailing Address	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Residence Phone Number	 	Residence Phone Number	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Work Phone Number	 	Work Phone Number	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	E-Mail Address	 	E-Mail Address	 
	 	 	 	 

 

ACCEPTANCE OF SUBSCRIPTION

COMP SERVICES INC. hereby accepts the subscription of ________________Shares as

of the ____________day of _________________, 201_.

COMP SERVICES, INC.

By:       ___________________________________________________________________

Name:  ___________________________________________________________________

Title:     ___________________________________________________________________

  

A-11

  

 

Exhibit I to Subscription Agreement

DEFINITION OF "ACCREDITED INVESTOR"

WITHIN THE MEANING OF REGULATION D

An accredited investor means any person who comes within any of the following categories, or whom the Company reasonably believes comes within any of the following categories, at the time of the sale of the Shares to that person:

(i) any bank as defined in Section 3(a)(2) of the Securities Act or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker dealer registered pursuant to Section 15 of the Exchange Act; any insurance company as defined in Section 2(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act; any Small Business Investment Company licensed by the U.S., Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

(ii)  any private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

(iii) any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

(iv)  any of the directors or executive officers of the Company;

(v)  any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of investment in the Common Stock, exceeds $250,000;

(vi) any natural person who had an individual income in excess of $250,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching that same income level in the current year;

(vii) any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Common Stock, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D; or

(viii)  any entity in which all of the equity owners are accredited investors.

 

  

EX-1

  

 

Exhibit II to Subscription Agreement

PURCHASER QUESTIONNAIRE FOR INDIVIDUALS

Purpose of this Questionnaire.

Shares of Comp Services Inc., a Nevada Corporation (the "Company'), are being offered without registration under the Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of certain states, in reliance on the private offering exemption contained in Rule 506 of the Securities Act and on Regulation D or Regulation S of the Securities and Exchange Commission, and in reliance on similar exemptions under certain applicable state laws. The purpose of this Purchaser Questionnaire is to assure the Company that the proposed purchaser meets the standards imposed for the application of such exemptions including, but not limited to, whether the proposed purchaser qualifies as an "accredited investor" as defined in Rule 501 under the Act or a “sophisticated investor” as defined in Rule 506 under the Act, your answers will at all times be kept strictly confidential. However, by signing this purchaser Questionnaire you agree that the Company may present this Purchaser Questionnaire to such parties as the Company may deem appropriate if called upon under the law to establish the availability of any exemption from registration of the private placement or if the contents hereof are relevant to any issue in any action, suit or proceeding to which the Company is a party or by which it may be bound. The undersigned realizes that this Purchaser Questionnaire does not constitute an offer by the Company to sell shares but is a request for information.

THE COMPANY WILL NOT OFFER OR SELL SHARES TO ANY INDIVIDUAL WHO HAS NOT FILLED OUT, AS THOROUGHLY AS POSSIBLE, A PROSPECTIVE PURCHASER QUESTIONNAIRE.

Instructions:

One (1) copy of this Questionnaire should be completed, signed, dated and delivered to:

Comp Services Inc.

414 S. Almansor St.

Alhambra, CA 91801

Please contact the Company at626- 975- 0027, if you have any questions with respect to the Questionnaire.

PLEASE ANSWER ALL QUESTIONS. If the appropriate answer is "None" or "Not Applicable," so state. Please print or type your answers to all questions. Attach additional sheets if necessary to complete your answers to any item.

  

EX-2

  

I.           General Information:

Name:  ________________________________

Date of Birth:  ______________________________

Residence Address:  _______________________________________________________________

Business Address:  ________________________________________________________________

Home Telephone No.: ______________________________________________________________

Business Telephone No:  ____________________________________________________________

E-mail Address:  ___________________________________________________________________

Preferred Mailing Address: ________ Business    or _________   Home (check one)

Social Security Number:  ____________________________________________________________

Marital Status:  ____________________________________________________________________

II.           Financial Condition:

1.           Did your individual annual income during each of 2008 and 2009 exceed $250,000 and do you reasonably expect your individual annual income during 2010 to exceed $250,000?

Yes _______                                No _______

2.           Did your joint (with spouse) annual income during each of 2008 and 2009 exceed $300,000 and do you reasonably expect your individual annual income during 2010 to exceed $300,000?

Yes _______                                No _______

3.           Does your individual or joint net worth exceed $250,000?

Yes _______                                No _______

 

  

EX-3

  

 

By signing this Questionnaire I hereby confirm the following statements:

(a)  I am aware that the offering of Common Stock will involve securities that are not transferable and for which no market exists, thereby requiring my investment to be maintained for an indefinite period of time.

(b)  I acknowledge that any delivery to me of the Memorandum relating to the Shares of Common Stock prior to the determination by the Company of my suitability as an investor, shall not constitute an offer of such Shares until such determination of suitability shall be made, and I agree that I shall promptly return the Memorandum to the Company upon request.

(c)  My answers to the foregoing questions are, and were on any date (if any) that I previously subscribed for Shares in the Company, true and complete to the best of my information and belief and were true on any date that I previously as of, and I will promptly notify the Company of any changes in the information I have provided.

Executed:

Date: ________________

_______________________________________________

(Printed Name)

Place:  ____________________________________

__________________________________________

(Signature)

__________________________________________

(Printed Name of Joint Subscriber)

 

 

EX-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}]]