REQUEST FOR

PROPOSAL
Wind Turbine
NFS Private Ltd.

Contents
1.0

INTRODUCTION..............................................................................................................4

1.1

Executive summary...........................................................................................................4

1.2

Introduction of the client...................................................................................................5

2.0

PROJECT SCOPE.............................................................................................................6

2.1

Introduction.......................................................................................................................6

2.2

Availability of Wind Resource and Selection of the Site..................................................6

2.3

Detailed Design.................................................................................................................9

3.0

TERMS AND CONDITIONS..........................................................................................10

4.0

PAYMENT MILESTONES..............................................................................................11

5.0

INSURANCE DETAILS...................................................................................................11

6.0

COMMUNICATION PLANS..........................................................................................12

7.0

PROPOSAL REQUIREMENTS.....................................................................................13

7.1

Refusal of Proposals.......................................................................................................14

7.2

Evaluation of the RFP.....................................................................................................14

8.0

DESIGN CRITERIA........................................................................................................15

8.1

Work Summary..............................................................................................................15

8.2

Standards........................................................................................................................16

8.3

Performance Criteria.......................................................................................................16

8.4

Security Requirements....................................................................................................17

8.4.1

System interconnection...................................................................17

8.4.2

Lightning protection........................................................................17

8.4.3

Corrosion protection.......................................................................17

8.5

System Requirement.......................................................................................................17

8.5.1

Generator.........................................................................................17

8.5.2

Other accessories.............................................................................18

8.5.3

Terminals..........................................................................................18

8.5.4

Generator voltage wave form.........................................................18

8.5.5

Over speed........................................................................................18

8.5.6

Voltage variation..............................................................................18

8.5.7

Short circuit requirements..............................................................18

2

8.5.8
8.6
9.0

System maintenance........................................................................18

Design Specification.......................................................................................................19
APPENDIX I.....................................................................................................................20

9.1

Legal requirements..........................................................................................................20

9.2

Training...........................................................................................................................20

9.3

Availability requirements................................................................................................20

9.4

Other requirements..........................................................................................................21

9.5

Challenges.......................................................................................................................21

10.0

APPENDIX II....................................................................................................................21

10.1 Mandatory Bid Form.......................................................................................................21

11.0

NON-DISCLOSURE AGREEMENT.............................................................................22

1.0 INTRODUCTION
1.1 Executive summary
It has been proposed to construct, install, commission and operate wind turbines in
the university compound of Sri-Lanka Institute of Information Technology
(SLIIT), Malabe.
Topography is considerably flat but in low level compared to the surroundings.
Geologically land fill on marsh and ground water table is very high. Wind speeds
and directions vary with seasons. On both side of this premises slightly elevated
land with buildings can be seen. In this site some tall buildings have already been
constructed and it has been proposed to construct more in the near future.
The client to the proposed project is Sri-Lanka Institute of Information Technology
(SLIIT). The consultant NFS Private Ltd. has been the pioneers in the Sri-Lankan
industry for consultancy services in wind turbines.
As a solution for global warming and a substitute for fossil fuels, wind energy is
most effective and readily available solution. Hence, RFP is required for the
service of supply of materials, construction, testing, commissioning, training and
operation of wind turbines. The vendor is expected to construct one wind turbine
with the technical specification mentioned within the expected expenditure. The
product should fulfill all the needs as stated in this RFP and the process must
adhere to the given timeline

1.2 Introduction of the client

Sri Lanka Institute of Information And technology (SLIIT) seeks proposals from
experienced Wind project developers capable of designing, constructing, and
operating a commercial-scale wind energy facility. To receive serious
consideration, proposals must also incorporate state-of-the-art measures to
minimize impacts to the environment and it should cost effective and reliable.
Considering all these objectives, SLIIT requests proposal from qualified,
experienced constructors who have previously successfully constructed at least 3
wind turbine projects within the last five years.
The SLIIT campus intends to supply site improvements, roadway access to the
site, electrical distribution and utility company connections and expects to deliver a
wide range of service including project inspection, quality control, material testing,
claims mitigation, document control, construction management and
constructability .
For more details regarding the RFP contact;
Mr. M. Zatheer
(Managing Director, NFS private ltd.)
OR
Mr. Sai Krishna
(Assistant Managing Director, NFS private ltd.)

2.0 PROJECT SCOPE

2.1 Introduction
Due to the increase in fuel cost, it is the current trend to see the feasibility of
obtaining/producing cheap power using solar energy, nuclear energy, wind turbines
or coal power. Considering the location and the environment it is more appropriate
at this location the option of obtaining power from wind. Nuclear plant is
impossible at this location due to the intense population around the area. Solar
power is may be possible, but it is difficult to meet the demand with solar power
only. The option of using coal power is also out due to restricted area. Therefore it
is more appropriate to use wind power at this location although it may be seasonal
due to the variation in wind speed. The main advantage of using wind power is
very environmental friendly.

2.2 Availability of Wind Resource and Selection of

the Site
It is very important to locate the wind turbine to get the maximum benefit of
available wind with making a deep study of the site. A good database to be
obtained from meteorological department and other relevant authorities in order to
exactly know the wind speeds and the directions.
7

Further detailed geotechnical studies to be done in order to install the plant stable.
To make the project sustainable environmental impact studies are also to be carried
out.
Major factors to be considered in construction of the plant:
Strength of the wind and its profile
Having good clearance
Locating the turbines
Least environmental pollution
Geotechnical stability
Hindrance to other campus activities

Scope of Work
The selected bidder is expected to carry out the following activities.
Site development and setting out
Construction of foundation - contractor is expected to verify geotechnical
report.
Dewatering, excavation, shoring, supply and delivery of foundation
materials
Supply and delivery materials.
Fabrication and erection of the turbine
Connecting to the existing power grid.
Testing and commissioning
Training and operation of the plant for 1000hrs.
Submission of as-built drawing, wiring diagram and operation and
maintenance manual.
Supply of spares for five year operation
Contractor is expected to carry out the work to ISO and SLS standards and
maintain good quality control at site,
Response to RFP
8

All contractors who are willing to bid for the contract are required to send
their letter of intent within two weeks of receiving the request for proposal.
Failing to do so, the particular party will be eliminated as a potential bidder
for the project and will have to return the request of proposal immediately.
All contractors interested in obtaining the contract should send their letter of
intent addressed to,
M.Z. Hilal
Secretary
(hilal@nfs.lk)

Request for Proposal Schedule

Date of release of the request for proposal
Closing date for submitting inquiries
Resolving inquiries
Deadline for the submission of bid
Evaluation of bids, including presentation
meetings where bidders are welcome to
present their solutions.
Negotiation of the contract
Conclusion of the bid evaluation and award
The clarification phase; where the necessary
activities are carried out for the contractor to
obtain a better understanding of the scope of the
work and for our company to obtain a further
insight into the functions and capabilities of the
proposed plan. During this time, the contractor
also has to prepare a description supplementing
the RFP and the proposal, which needs to be
9

24/07/2015
31/08/2015
01/08/2015 06/08/2015
14/08/2015
15/08/2015 29/08/2015

30/08/2015 07/09/2015
10/09/2015 17/09/2015
18/09/2015 01/10/2015

approved by our company

Completion of the contract

31/10/2015

For RFP related inquiries, please contact,

Mr. F. Anver (Assistant Secretary,
NFS Private Ltd.)
f.anver@nfs.lk
Interested bidders should ensure that a copy of the proposal is delivered to the
following address on or before 14/08/2015.
NFS Private Ltd., New Kandy Road, Malabe.

10

2.3

Detailed Design

11

3.0 TERMS AND CONDITIONS

No oral interpretation, instruction or information concerning this RFP given
by any employee or agent of the client may be considered. Only written
12

information supplied by the client should be considered when responding to

this RFP.
The client can accept or reject any proposal; waive any formalities or
irregularities contained in a proposal that do not comply with this RFP;
modify or cancel the RFP at any time including specifications; select the
proposal that, in the exclusive and absolute discretion of the client without
limitation.
Expenses for developing and presenting proposals are the sole responsibility
of the contractor and are not chargeable to the Client / NFS (Pvt.) Ltd. All
supporting documentation submitted will become the property of the Client /
NFS (Pvt.) Ltd. Proposers waive all claims against the client and all of its
employees and consultants for any damages resulting during evaluation of
proposals.
Proposals will be evaluated and awarded as noted in the RFP. All
information must be legible, in order, and easily interpreted. Incomplete
packages may be rejected if any relevant information is not included in the
proposal.
The client (including its employees and consultants) may visit any of the
facilities referenced in the RFP and/or proposals and/or to observe the
operations of such facilities.
Submission of a proposal means that the contractor has read, understood and
agreed to all terms and conditions contained in this RFP.
The winning bidder and all its sub-contractors and service providers adhere
to all federal and State environmental, health and safety regulations and
local fire and building code ordinances when performing any work on the
property or delivering any service to the client. The client can suspend any
work or delivery that violates any federal or State regulation or local
ordinance until further notice.
All activities related to the project are subject to all applicable federal, State
and local laws, regulations, rules and/or requirements.
13

 The successful bidder will be required to enter into and sign a formal
agreement with the client, which will be in effect for the duration of the
contract period. The constructor can state any exceptions to the conditions
mentioned in the agreement in written format; Unless NFS Private Ltd. will
understand that the Constructor agrees to the terms and conditions as stated
in the contract.

4.0 PAYMENT MILESTONES

The management of SLIIT wishes to carry out the full payment in several stage as
stated below.
1. 15% advance at the commencement of the project.
2. Payment milestone 1

20%

3. Payment milestone 2

20%

4. Payment milestone 3

20%

5. Final payment at the conclusion of the project -

25%

All monetary transactions are to be done through banking services. Therefore it is

advised to send the bank account number along with the proposal. Online
transactions too are acceptable.

5.0 INSURANCE DETAILS

The contractor will be required to provide the following proof of insurance:
Commercial General Liability: Rs.1 000
Automobile Liability Rs.1 000
Umbrella Excess Rs.1 000
Proper insurance certificates must be supplied by the vendor before commencing
the contract, and the certificates must be up to date.

14

6.0 COMMUNICATION PLANS

Communication is an important aspect for the success of this project. Therefore a
considerable amount of attention is directed towards the communication between
the parties involved in this project.
Personnel are instructed to provide a report on the progress of respective section
allocated at the weekly meetings.
The communication methods are as follows:
1. Meetings be held weekly at 3.30pm onwards at the SLIIT premises.

2. For quick updates, email is recommended.

3. Hard copies of various documents must be mailed of hand delivered to

SLIIT.

4. Contact details of other officials will be given after the selection of

contracting company.
5. Basic contact details have been included in the next section.

In order to gain a proper understanding between the parties involved, the following
information are requested to be included in the proposal.
Financial Capacity
Organizational Hierarchy
Previous Projects
Financial Documents
Testimonials

15

7.0 PROPOSAL REQUIREMENTS

Proposal shall be limited to 50 pages on single-sided, A4 paper (For charts and
graphics 11 x17 sheets are acceptable). The text font shall be size 12 and the font
type of Times New Roman. The cover letter, table of contents, front and back
covers, and section dividers and resumes are excluded from the page count.
Proposers shall submit proposals in the following format.
1. Cover letter
2. Scope of supply
3. Pricing proposal on RFP supplied bid form.
a. Design and build standard package pricing, including all required

equipment.
b. Extended warranty pricing for 5 year warranty.
4. Wind Turbine Specification this will include the following at a minimum:
a. Hub height, rotor diameter, and rotational speed
b. Cut-in, rated, and cut-out wind speeds
c. Maximum noise level at ground level
d. Reactive capability curve to indicate generator excitation
requirements at various loads
e. Gearbox configuration
f. Generator electrical specification
g. Climate operational range
5. Foundation loading
6. Weights and transport protocols
7. Conceptual design of wind turbine foundation
8. Comparable project experience
9. Safety statistics for proposer and all identified subcontractors for a minimum
of the past 3 years.
10. A list of all intended sub-contractors for the project and their respective
scopes of work
11. Proposed project schedule
16

12. All proposal cost information and terms must be held firm and valid for one

hundred and eighty (180) calendar days from the date of the submission.

7.1 Refusal of Proposals

NFS (Pvt) Ltd/the client reserves the right to reject any or all proposals submitted,
and no confirmation is made hereby that any contract will be awarded
proceedings to this RFP. All costs incurred in the preparation of the proposal, the
submission of additional information and/or any aspect of a proposal prior to
award of a written contract will be borne by the bidder. All proposals submitted
will become the property of NFS (Pvt) Ltd.

7.2 Evaluation of the RFP

The client and Consultants will evaluate the proposals submitted based on the
RFP submitted. Evaluation of the bids will address the business and technical
merits related to the requirements. The client will conduct a detailed review and
evaluation of the principal company and all entities and/or organizations
participating in providing the services contemplated in this RFP. The evaluation of
proposals has one basic objective: to determine whether the proposer meets the
requirements set forth in this RFP and has the best value proposal.
The received proposals will be examined and evaluated as follows:
Financial aspects 20%
Experience with similar contracts 30%
Experience of developer and team with the specifically selected WTG(s). Success
rate depending on past projects 30%
Proper understanding of the project 10%
Objectives of the bidder 10%

17

8.0 DESIGN CRITERIA

8.1 Work Summary

The response to this RFP must specify all the equipment and materials for the
WTG (Wind Turbine Generator) System as specified below. The work shall
include supply & delivery of all equipment and materials to the job site, offloading, receiving, and proper storage. The minimal equipment and Materials
required by this RFP include, but are not limited to, the following major items:
a) Towers, 3.5 meters high or taller

i The winds at this site make a shorter tower a poor choice.

ii If tower Wind Project Developer wishes to propose a shorter tower, this
can be done as voluntary alternate. In this case, please provide a separate
Mandatory bid sheet completely filled out with the alternate tower
proposed.
b) Foundations, foundation anchor bolts, bolt sleeves, and concrete equipment

bases
c) Warrantees (include scopes, required durations, and acceptable limitations)

and/or Maintenance agreement terms. Warrantees shall cover scheduled and

unscheduled maintenance during the warranty period and be offered for
minimum of one year.
d) All nuts, bolts, gaskets, special fasteners, backing rings, etc., between

components and equipment furnished under these specifications

e)

Nacelles

f) First fill of lubricants and fuels for operation

g) Finish painting of all equipment
h) Method statements and shop drawings

18

a) Complete set of as-built drawings for the wind energy conversion system

the equipment will be tested by the Wind Project Developer under

observation of designated engineer of Five Initials Constructors &
Consultants (Pvt) Ltd after erection to demonstrate full operational status
and fulfill the required guarantees. If the equipment fails to meet
guaranteed performance, the Wind Project Developer shall make
additional tests and modifications at no additional costs to the client, the
SLIIT management. When the equipment is shown to be fully operational
and within the limits of the performance guarantee, SLIIT will accept the
equipment for use. Any power that is generated during the testing and/or
modifications shall be the property of the University.

8.2 Standards
All materials, equipment, and fabrication procedures shall be in accordance with
the latest applicable laws of the Democratic Socialist Republic of Sri lanka and all
local ordinances. In the case of conflict between standards, the more stringent
standards shall apply. All required stamps shall be affixed to denote conformance
to the appropriate codes. Code requirements shall be based on codes and standards
in effect at the contract date for the WTG unit(s) and support structures. Data
reports required by the applicable codes shall be submitted to the University or
designated engineer.

8.3 Performance Criteria

a) Power output vs. wind speed
b) Critical speed of rotor generator
c) Detailed information on the capability of the turbine generator to respond to

a System upset situation, where a large portion of the system load is applied
to the Unit and load shedding is required.
d) Detailed information on the ability of the yaw system to respond to wind

direction changes and turbulent wind conditions.

e) If variable pitch rotor blades are included, detailed information on the

ability of the Pitch system to respond to the wind speed changes and over
19

speed conditions 6. Detailed information on the ability of the braking

system to respond to over speed Conditions and shutdown.

8.4 Security Requirements

8.4.1
System interconnection
General
The Wind Project Developer supplied equipment must interface with
universitys distribution system. The system should provide stable 12V
voltage and maximum 5W current.
Grounding
The constructer intends to provide lugs installed at the tower base for
grounding cable connections.
Interconnection
The constructor of the wind mill will install that cable into the tower and
connect it as needed. And the wind mill constructer shall supply all
necessary equipment and labor to complete the interconnection.
8.4.2
Lightning protection
The wind turbines shall be furnished with lightning protection covering all
aspects of the turbine, including but not limited to blades, generator,
gearbox, and control system.
8.4.3
Corrosion protection
All ferrous materials shall be supplied with coating systems adequate to
protect the equipment from corrosion for the design life of the turbines at the
proposed locations.

8.5 System Requirement

A protection system shall be installed at the interconnection point to protect
the Universitys power system and equipment in the case of system
malfunction. This system must meet the requirements of both the University
and the local utility.
8.5.1
Generator
The generator shall be an alternating current generator and operate at 60
Hz. The generator shall be constructed especially for connection to a wind
20

turbine unit of the type described in these specifications. The generator and
gear box should be enclosed with weatherproof structure.
8.5.2
Other accessories
The generator will operate with a voltage stabilizer of 12V.
All system wiring shall have a temperature rating of 90 C or higher.
Exposed cables shall be listed as sunlight resistant.
All inside and outside cables shall be rigid galvanized steel.
For outside conduits it should be PVC coated
8.5.3
Terminals
All generator terminals to be brought out of the generator to an enclosed junction
box which shall be accessible without dismantling nearby structures or equipment.
The Wind Project Developer shall provide all terminal equipment.
8.5.4
Generator voltage wave form
The generator line-to-line voltage waveform deviation shall comply with
applicable requirements generator voltage waveform.
8.5.5
Over speed
The generator and gear box shall be capable of withstanding, without mechanical
injury, and over-speed of 25 percent.
8.5.6
Voltage variation
The generator shall operate at power at any voltage between 10 percent above and
5 percent below rated voltage.
8.5.7
Short circuit requirements
The generator shall be capable of withstanding a 3-phase short circuit across its
terminals without damage.
8.5.8
System maintenance
A scheduled maintenance shall be performed at manufacturers recommended
intervals in accordance with manufacturer specifications.

21

8.6 Design Specification

All equipment shall be designed to operate reliably and continuously for a
minimum useful life of 1 year of service. Wind Turbine Generation unit includes:

Blade count 3 (self-propelling)

Blade material (PVC or Aluminum )
Generator Permanent Magnet Dynamo or DC motor
Voltage Output 12v
Rotor diameter 1.5m
Voltage Stabilizer 12v
Load LED panel 12v
Tower height 3.5m
Tail 1.5m
Monopole towers are the preferred type of support for the Wind Facilities.
Color : The special permit granting authority shall have discretion over the
turbine color, although a neutral, non-reflective exterior color designed to
blend with the surrounding environment is encouraged
Wind turbines shall be lighted only if required by the Federal Aviation
Administration. Lighting of other parts of the wind facility, such as
appurtenant structures, shall be limited to that required for safety and
operational purposes, and shall be reasonably shielded from abutting
properties.
Max Loading 10kg
The generator shall be direct current generator and can be operated at
varying frequencies. Generator must comply with requirements described in
these specifications.
The generator and gear box shall be enclosed in an overall weatherproof
nacelle structure. Generator windings shall be of copper or all welded
aluminum.
The generator will operate with a voltage stabilizer of 12V.
All system wiring shall have a temperature rating of 90 C or higher.
All outside conduits shall be Poly Vinyl Chloride (PVC).

22

9.0 APPENDIX I
9.1 Legal requirements
The wind mill should be installed in a place where it can abide with
potential legal and environmental obstacles
The constructers should perform a complete economic analysis that
accounts for a multitude of factors before the wind mill installation there
should be a backup plan if there any issues.
The managements principal concern is with the safety of the facility, so these code
requirements emphasize proper wiring and installation, and the use of components
that have been certified for fire and electrical safety.

9.2 Training
The wind mill constructers shall provide an onside training. Basically they should
explain how the prototype works under following categories
Wind turbine basics
Turbine operation
Start-up
Shut-down
Mechanical maintenance
Electrical maintenance
Troubleshooting and fault clearing

9.3 Availability requirements

Availability of the wind turbine and the other accessories is a responsibility of
wind mill constructer, and they should ensure that the windmill functions
properly within the warranty period which is 6 months. The warranty includes
both the accessories of the wind mill and the function of the windmill.

23

9.4 Other requirements

Estimation of wind conditions
An estimation of local wind conditions is especially crucial in the selection of the
site. Furthermore, any individual obstacles - such as rows of trees, buildings, and
any other wind turbines must be registered accurately. Depending on local
conditions and the quality of any wind and data available for the region should be
clarified.

9.5 Challenges
The windmill designers can get the assistance from the utility (management)
representative with whom youve been working for assistance in working through
the problem.

10.0

APPENDIX II

10.1

Mandatory Bid Form

Wind Project Developer Company Name ___________________________

Contact Person _________________________________
Contact Phone _________________________________
Contact Email _________________________________
WTG Manufacturer _________________________________
WTG kW nominal rating (at rated speed) _____________________ (at m/s)
WTG Location of Manufacture _________________________________
Tower Height _________________________________

24

Wind Project Developer will provide Wind Turbine Generator, site

improvements as need for construction, foundation(s), tower(s),
construction, financing, insurance, maintenance.
Sri Lanka Institute of information Technology will provide 13.2kV to primary
side of switch, low voltage conduit with communications cable or fiber optic,
environmental permitting, a gravel road access to site, utility protective relaying.

11.0

NON-DISCLOSURE AGREEMENT

THIS AGREEMENT dated __________________, 20___ , by and between five

Initials Constructors and Consultants, a private limited Corporation and
__________
WHEREAS, Five Initials Constructors and Consultants and Recipient, for their
mutual benefit and pursuant to a working relationship which has been or may be
established, anticipate that Five Initials Constructors and Consultants may
disclose or deliver to Recipient documents, components, parts, information,
drawings, data, sketches, plans programs, specifications, techniques, processes
and other materials, both written and oral, of a secret, confidential or proprietary
nature, including without limitation any and all information relating to marketing,
finance, forecasts, invention, research, design or development of a wind turbine
and any and all subject matter claimed in or disclosed by any patent application
prepared or filed by or behalf of by Five Initials Constructors and Consultants, in
any jurisdiction, and any amendments or supplements thereto (collectively,
Proprietary Information); and
WHEREAS, Five Initials Constructors and Consultants desires to assure that the
confidentiality of any Proprietary Information is maintained;
NOW, THEREFORE, in consideration of the foregoing premises, and the mutual
covenants contained herein, Five Initials Constructors and Consultants and
Recipient hereby agree as follows:

1. Definition of Confidential Information

25

(a) For purposes of this Agreement, Confidential Information means

any data or information that is proprietary to the Disclosing Party

and not generally known to the public, whether in tangible or
intangible form, whenever and however disclosed, including, but not
limited to:
(i) any marketing strategies, plans, financial information, or
projections, operations, sales estimates, business plans and
performance results relating to the past, present or future
business activities of such party, its affiliates, subsidiaries
and affiliated companies;
(ii) plans for products or services, and customer or supplier lists;
(iii)
any scientific or technical information, invention,
design, process, procedure, formula, improvement,
technology or method;
(iv) any concepts, reports, data, know-how, works-in-progress,
designs, development tools, specifications, computer
software, source code, object code, flow charts, databases,
inventions, information and trade secrets; and
(v) any other information that should reasonably be recognized
as confidential information of the Disclosing Party.
Confidential Information need not be novel, unique,
patentable, copyrightable or constitute a trade secret in order
to be designated Confidential Information. The Receiving
Party acknowledges that the Confidential Information is
proprietary to the Disclosing Party, has been developed and
obtained through great efforts by the Disclosing Party and
that Disclosing Party regards all of its Confidential
Information as trade secrets
(b) Notwithstanding

anything in the foregoing to the contrary,

Confidential Information shall not include information which:
(i) was known by the Receiving Party prior to receiving the
Confidential Information from the Disclosing Party;
(ii) becomes rightfully known to the Receiving Party from a
third party source not known (after diligent inquiry) by the
Receiving Party to be under an obligation to Disclosing Party
to maintain confidentiality;
(iii)
is or becomes publicly available through no fault of or
failure to act by the Receiving Party in breach of this
Agreement;
26

(iv) is required to be disclosed in a judicial or administrative

proceeding, or is otherwise requested or required to be

disclosed by law or regulation, although the requirements of
paragraph 4 hereof shall apply prior to any disclosure being
made; and
(v) is or has been independently developed by employees,

consultants or agents of the Receiving Party without

violation of the terms of this Agreement or reference or
access to any Confidential Information.

2. Disclosure of Confidential Information

From time to time, the Disclosing Party may disclose Confidential
Information to the Receiving Party. The Receiving Party will:
(a) limit disclosure of any Confidential Information to its directors,
officers, employees, agents or representatives (collectively
Representatives) who have a need to know such Confidential
Information in connection with the current or contemplated business
relationship between the parties to which this Agreement relates, and
only for that purpose;
(b) advise its Representatives of the proprietary nature of the
Confidential Information and of the obligations set forth 2in this
Agreement and require such Representatives to keep the
Confidential Information confidential;
(c) shall keep all Confidential Information strictly confidential by using
a reasonable degree of care, but not less than the degree of care used
by it in safeguarding its own confidential information; and
(d) not disclose any Confidential Information received by it to any third
parties (except as otherwise provided for herein). Each party shall be
responsible for any breach of this Agreement by any of their
respective Representatives.

27

3. Use of Confidential Information

The Receiving Party agrees to use the Confidential Information solely in
connection with the current or contemplated business relationship between
the parties and not for any purpose other than as authorized by this Agreement
without the prior written consent of an authorized representative of the
Disclosing Party. No other right or license, whether expressed or implied, in
the Confidential information is granted to the Receiving Party hereunder. Title
to the Confidential Information will remain solely in the Disclosing Party. All
use of Confidential Information by the Receiving Party shall be for the
benefit of the Disclosing Party and any modifications and improvements
thereof by the Receiving Party shall be the sole property of the Disclosing
Party. Nothing contained herein is intended to modify the parties' existing
agreement that their discussions in furtherance of a potential business
relationship are governed by Federal Rule of Evidence 408.

4. Compelled Disclosure of Confidential Information

Notwithstanding anything in the foregoing to the contrary, the Receiving
Party may disclose Confidential Information pursuant to any governmental,
judicial, or administrative order, subpoena, discovery request, regulatory
request or similar method, provided that the Receiving Party promptly
notifies, to the extent practicable, the Disclosing Party in writing of such
demand for disclosure so that the Disclosing Party, at its sole expense, may
seek to make such disclosure subject to a protective order or other appropriate
remedy to preserve the confidentiality of the Confidential Information;
provided in the case of a broad regulatory request with respect to the
Receiving Partys business (not targeted at Disclosing Party), the Receiving
Party may promptly comply with such request provided the Receiving Party
give (if permitted by such regulator) the Disclosing Party prompt notice of
such disclosure. The Receiving Party agrees that it shall not oppose and shall
cooperate with efforts by, to the extent practicable, the Disclosing Party with
respect to any such request for a protective order or other relief.
Notwithstanding the foregoing, if the Disclosing Party is unable to obtain or
does not seek a protective order and the Receiving Party is legally requested
or required to disclose such Confidential Information, disclosure of such
Confidential Information may be made without liability.

28

5. Term
This Agreement shall remain in effect for a two-year term (subject to a one
year extension if the parties are still discussing and considering the
Transaction at the end of the second year). Notwithstanding the foregoing, the
parties duty to hold in confidence Confidential Information that was
disclosed during term shall remain in effect indefinitely.

6. Remedies
Both parties acknowledge that the Confidential Information to be disclosed
hereunder is of a unique and valuable character, and that the unauthorized
dissemination of the confidential 3Information would destroy or diminish the
value of such information. The damages to Disclosing Party that would result
from the unauthorized dissemination of the Confidential Information would
be impossible to calculate. Therefore, both parties hereby agree that the
Disclosing Party shall be entitled to injunctive relief preventing the
dissemination of any Confidential Information in violation of the terms
hereof. Such injunctive relief shall be in addition to any other remedies
available hereunder, whether at law or in equity. Disclosing Party shall be
entitled to recover its costs and fees, including reasonable attorneys fees,
incurred in obtaining any such relief. Further, in the event of litigation
relating to this Agreement, the prevailing party shall be entitled to recover its
reasonable attorneys fees and expenses.

7. Return of Confidential Information

Receiving Party shall immediately return and redeliver to the other all
tangible material embodying the Confidential Information provided hereunder
and all notes, summaries, memoranda, drawings, manuals, records, excerpts
or derivative information deriving there from and all other documents or
materials (Notes) (and all copies of any of the foregoing, including
copies that have been converted to computerized media in the form of
image, data or word processing files either manually or by image capture)
based on or including any Confidential information, in whatever form of
storage or retrieval, upon the earlier of
i

the completion or termination of the dealings between the parties

contemplated hereunder;
29

ii the termination of this Agreement; or

iii at such time as the Disclosing Party may so request; provided
however that the Receiving Party may retain such of its
documents as is necessary to enable it to comply with its
document retention policies. Alternatively, the Receiving Party,
with the written consent of the Disclosing Party may (or in the
case of Notes, at the Receiving Partys option) immediately
destroy any of the foregoing embodying Confidential Information
(or the reasonably no recoverable data erasure of computerized
data) and, upon request, certify in writing such destruction by an
authorized officer of the Receiving Party supervising the
destruction).

8. Notice of Breach
Receiving Party shall notify the Disclosing Party immediately upon discovery
of any unauthorized use or disclosure of Confidential Information by
Receiving Party or its Representatives, or any other breach of this Agreement
by Receiving Party or its Representatives, and will cooperate with efforts by
the Disclosing Party to help the Disclosing Party regain possession of
Confidential Information and prevent its further unauthorized use.

9. No Binding Agreement for Transaction

The parties agree that neither party will be under any legal obligation of any
kind whatsoever with respect to a Transaction by virtue of this Agreement,
except for the matters specifically agreed to herein. The parties further
acknowledge and agree that they each reserve the right, in their sole and
absolute discretion, to reject any and all proposals and to terminate
discussions and negotiations with respect to a Transaction at any time. This
Agreement does not create a joint venture or partnership between the parties.
If a Transaction goes forward, the non-disclosure provisions of any applicable
transaction documents entered into between the parties (or their respective
affiliates) for the Transaction shall supersede this Agreement. In the event
such provision is not provided for in said transaction documents, this
Agreement shall control.

30

10.Warranty
Each party warrants that it has the right to make the disclosures under this
Agreement. NO WARRANTIES ARE MADE BY EITHER PARTY UNDER
THIS AGREEMENT WHATSOEVER. The parties acknowledge that
although they shall each endeavor to include in the Confidential Information
all information that they each believe relevant for the purpose of the
evaluation of a Transaction, the parties understand that no representation or
warranty as to the accuracy or completeness of the Confidential Information
is being made by either party as the Disclosing Party. Further, neither party is
under any obligation under this Agreement to disclose any Confidential
Information it chooses not to disclose. Neither Party hereto shall have any
liability to the other party nor to the other partys Representatives resulting
from any use of the Confidential Information except with respect to
disclosure of such Confidential Information in violation of this Agreement.

31