WOOD FUELS SUPPLY AGREEMENT
This Agreement is made this 1st. day of March , 2002, by and between RBS
Enterprises, Inc. a Corporation with its principal address at 000 Xxxx Xxxx
Xxxx, Xxxx Xxxxxxx, XX 00000 (Supplier), and Green Power Energy Holdings LLC
(Operator) a Delaware Corporation, with its principal address at 0000 Xxxxxxxx
Xx. Xxxxxxxxxx, XX 00000, with reference to the following:
WHEREAS, Supplier owns and operates equipment and facilities for the collection.
transportation and delivery of Wood Fuels; and.
WHEREAS, Operator owns and operates an electric generating, co-generation plant
and facility as set out herein: and,
WHEREAS, Supplier desires to collect. store, process and deliver to Operator
such amount of Wood Fuels meeting such specifications as Operator requires upon
the terms and conditions hereinafter set forth, and Operator desires to receive
such services;
NOW THEREFORE, in consideration of the premises, the mutual covenants and
promises set forth herein and other good and valued consideration. The receipt,
adequacy and sufficiency of which are acknowledged. The parties agree as to the
following:
ARTICLE 1. DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following meanings:
A. '"Wood fuels" means processed wood which has met the specifications As
set forth in Article 3 within and is suitable for fuel and combustion in
state of the art gasifiers;
B. "Treated Wood" means any wood which has been acted upon with some agent,
including but not limited to, any toxic or hazardous chemicals for the
purpose of improving or altering its condition.
C. "Aged Waste" means any aged wood which is undergoing decay or loss of
structural integrity.
D. "Good Faith" means honesty in fact and the observance of reasonable
commercial standards of fair dealing in the trade.
E. "Tare Weight" refers to the deduction from the gross weight of a
substance and its container made in allowance for the weight of the
container .
F. "Collect" means to gather or take on wood
G. "Store" or "Stockpile" means to accumulate and stock waste wood for
preservation and use at a later time.
H. "Process" means a series of actions, including but not limited to,
Segregating and cleaning of debris and sizing of the waste wood.
I. "Deliver F.O.B. Operator's Facility" means "free on board" at the
Operator's facility and is a delivery term under which Supplier must, at
his own expense and risk, transport the goods to that place and there
tender delivery of them in a manner provided in this Agreement.
J. "Facility" means Operator's establishment and all associated equipment
being a bio-mass energy co-generating facility .
K. "Foreign Matter" means any matter alien in character to the natural
state of the wood .
L. "Supplier" means a person who deals in fuel processing or otherwise by
his occupation holds himself out as having knowledge or skill, or a person
who supplies or contracts to supply wood fuels.
ARTICLE 2. SERVICES TO BE RENDERED & RECIPROCAL OBLIGATIONS
2.1 Sixty (60) days from the date on which Operator has served notice to
Supplier that the conditions precedent to Operator's obligations hereunder
as set forth in Article 27 have been met ("Effective Date"), and continuing
for the term of this Agreement. Supplier agrees to collect, store, process
and deliver to Operator such amount of wood fuels as agreed upon in Article
5 of this Agreement and Operator agrees to accept delivery of the processed
wood fuels.
ARTICLE 3. SPECIFICATIONS
Supplier represents, warrants and agrees that the processed wood fuels
delivered to Operator's facility pursuant to this Agreement will meet the
following specifications of wood fuel mix: plywood, non-lead painted wood, and
clean construction and demolition wood. Process creosote wood may be delivered
separately.
3.1 Moisture The moisture content of such wood fuel shall not be greater
than fifty (50%) per cent by weight on a wet basis; and,
3.2 Foreign Matter -All such wood fuel shall be clean and free from metal
or other deterrent materials including, but not limited to, rock and tramp
metal, and shall not exceed the specified top size of the fuel material:
(a) which will interfere with operation of the conveying, distribution,
boilers, gasifiers, and/or other equipment connected with or related to the
facility to which such wood fuel is delivered or in which it is to be
disposed; or (b) which will materially affect the weight of such processed
wood fuel; and.
3.3 No Watered Waste -None of the collected wood fuels or other fuel
products will have been intentionally or unintentionally watered (for
example. but not limited to, waste that is left in or contained in open top
trailers allowed to remain uncovered during heavy rainfall).
3.4 No Aged Waste Wood - None of the collected wood fuels or other wood
fuel products of the processed wood fuels will have been taken from aging
or deteriorated piles of wood; creosote wood may be aged.
3.5 No pressure treated wood with CCA or lead painted. Supplier must use
X-Ray fluorescent scanner to prevent contamination.
3.6 Product Sizing -The processed waste wood shall conform to the following
size criteria: No material greater than two inch minus (2 inch -) sizing;
3.7 Heating Value -the processed wood fuel shall have a heating value of
5,000 BTU/LB, or greater.
ARTICLE 4. COLLECTION. STORAGE & DELIVERY
4.1 Supplier shall collect wood and shall store and process same, and shall
have wood fuels delivered to Operator at its facility at a cost not to
exceed $32 (Thirty Two U.S. Dollars).
ARTICLE 5. SUPPLIER'S CAPACITY
5.1 Supplier warrants that it will collect, process and deliver wood fuels
to Operator at 350 tons per day. The warranty set forth in this Article 5
shall not be construed as a limitation of Suppliers obligation to collect,
store and process wood fuels and to supply wood fuels to Operator pursuant
to Article 2 and Article 4 herein, in an amount sufficient to fulfill
Operator's requirements for processed wood fuels.
ARTICLE 6. NON-PERFORMANCE BY SUPPLIER
6.1 Failure to Perform - If Supplier does not deliver wood fuels to
Operator in the required quantity, at site or in time period under the
terms and conditions of this Agreement, or if Supplier delivers processed
wood fuel to Operator which meets such conditions, but which fails to
satisfy the specifications set forth in Article 3 herein, Operator shall
have the right upon written notice to Supplier, to obtain the services
rendered by Supplier from other persons or entities. If any such failure by
Supplier is not rectified and continues for more than sixty (60) days, then
Operator, at its sole discretion, may terminate this Agreement at any time
after the end of such sixty (60) day period with written notice unless
Supplier cures such failure and does not have any additional failure under
this Article 6.1 for an additional thirty (30) days.
6.2 Shortages in Delivery - Operator, at its option, may cover any shortage
in Supplies by Supplier by making in good faith and without unreasonable
delay any reasonable purchase of or contract to purchase goods in
substitution for those due from Supplier and furthermore, in the event of
non-conforming goods, Operator has the right to address any deficiency in
delivery by rejecting the entire delivery, accepting the entire delivery,
or accepting any commercial units or amounts and rejecting the balance.
ARTICLE 7. MEASUREMENT
Operator shall determine the net weight in tons of each load of processed
wood fuel by weighing the loaded vehicle at Operator's facility and deducting
the tare weight there from. Operator shall then, at operator's facility,
determine the specifications as outlined in Article 3 herein, on each load by
its customary procedures based upon random samples. Operator may reject all or
any portion of any delivery of wood fuel hereunder, if Operator reasonably
determines that such delivery contains processed wood fuel which fails to meet
the specifications as set forth in Article 3 herein and gives notice to Supplier
of such failure within three (3) calendar days of such delivery. Operator shall
be deemed to have accepted any delivery of processed waste wood that it does not
rejected within such three (3) days period.
If Supplier delivers a load to Operators site that is rejected by Operator,
Supplier has the option of removing the load from Operator's site at Supplier's
cost or paying Operator the equivalent cost to remove the rejected load from
Operator's site.
Operator reserves the right to have a person or persons on site at
Supplier's facility to inspect each load prior to operator accepting delivery.
ARTICLE 8. PAYMENT FOR SERVICES
8.1 The tipping fee price to be paid by Supplier to Operator for processed
wood fuels shall be thirty five (35) dollars per ton. All material must be
as per Article 3. Specifications.
8.2 The tipping fee price to be paid by Supplier to Operator for processed
creosote shall be thirty eight (38) dollars per ton if sourced sized and
delivered to Operator's facility.
ARTICLE 9. PAYMENT DATE
Operator and Supplier shall pay all invoices and requests for payment
received from the other party within fifteen (15) days of receipt of the same.
If Supplier does not pay Operator within thirty (30) days, Operator has the
right to terminate this agreement.
ARTICLE 10. TERM & OPTIONS
The term of this Agreement shall commence on the date the product is first
delivered and shall expire ten (10) years after the Effective Date; with
Operator and/or Supplier having options to renew for (1) successive period of
(10 ) years on the same terms and conditions contained herein, for a total of
(20) years, if the options are taken by Operator/ and/or Supplier. Should
Operator and/or Supplier renew for any additional term then said additional term
shall be the same terms and conditions contained herein. Operator and/or
Supplier shall exercise its option to renew for any additional (10 ) year term
by sending Operator and/or Supplier written notice of the same within ninety
(90) days, but before the expiration of the first renewal term.
ARTICLE 11. EXCUSED DELIVERY & PURCHASE
11.1 Supplier shall be excused from collecting, storing and processing wood
fuel and from supplying processed wood fuel to Operator and Operator shall
be excused from accepting delivery of wood fuel from Supplier in the event
of, and to the extent and during times of any fire, explosion, flood, Act
of God, war, transportation strikes, civil commotion, or other governmental
act, order or regulation outside Supplier's control which prevents Supplier
from performing the services herein, or Operator's use of any such
processed waste wood supplied. However, Supplier shall still be responsible
for performing the services required under this Agreement during mud season
and other typical weather induced restrictions of normal operations. If any
of the above events causes Supplier to be unable to meet Operator's full
requirements for waste wood or Supplier's other obligations under this
Agreement. Operator shall have the option of requiring Supplier to continue
at a reasonable reduced level set by Operator until such time as such event
ceases to prevent Supplier from fulfilling its obligations herein.
11.2 Mechanical Breakdown -In the event that the Operator and/or Supplier
have a major breakdown at their operating sites, Operator and/or Supplier
are temporarily relieved of their obligations under this Agreement until
the repairs to the facility have been completed. Operator and/or Supplier
shall notify the other party of the breakdown within forty-eight (48) hours
and give an estimated time for repairs. The Agreement shall be back in full
force and effect the day after the repairs are completed. Best efforts must
be exercised by Operator and/or Supplier towards resolutions of any such
problems, and the efforts to repair must be accomplished in a timely
fashion.
ARTICLE 12. INSURANCE
During the term of this Agreement, Supplier shall maintain general
liability insurance with a minimum coverage of $2,000,000 per instance. Property
damage insurance with a minimum coverage of $1,000,000 and Xxxxxxx'x
Compensation insurance as required by the laws of the State of Pennsylvania.
ARTICLE 13. NON-XXXXX
Failure of either party at any time to require strict performance by the other
of any provisions herein shall not constitute a waiver of any succeeding breach.
ARTICLE 14. ASSIGNMENT
This Agreement and all of the provisions herein, shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. This Agreement may be assigned by either party by way of merger,
consolidation or sale of assets, including assignments to financing parties, a
parent, subsidiary or affiliated company without the other parties consent
provided that (I) the assignor shall remain fully liable for all warranties,
representations and covenants herein unless released, in writing by the other
party, and (II) the assignee shall assume in writing, all warranties,
representations and covenants under this Agreement. This Agreement may also be
assigned as collateral by Operator to any financing parties and their successors
and assigns without consent of the Supplier.
ARTICLE 15. TIME OF ESSENCE
Time is of the essence in the performance of the Supplier's obligations
hereunder .
ARTICLE 16. SEVERABILTY
This Agreement is intended to be performed with and only to the extent permitted
by, all applicable Federal, State, County, municipal and local laws, statutes,
ordinances, directives, orders, regulations, requirements, restrictions and
rules. If any provision of this Agreement or the application thereof by any
person, entities or circumstance, shall for any reason and to any extent be
invalid or unenforceable the remainder of this Agreement and the application of
its provisions to other persons, entities or circumstances shall not be affected
thereby, but rather shall be enforced to the greatest extent permitted by law.
ARTICLE 17. NOTICES
Unless otherwise specified, any notices, demands or other communications which
may be permitted or required hereunder shall be in writing and shall be deemed
to have been given earlier than the date personally delivered.
RBS Enterprises, Inc. GREEN POWER GROUP, INC
000 Xxxx Xxxx Xxxx 0000 Xxxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
ARTICLE 18. AUDIT RIGHTS
Operator or Supplier shall have the right to audit Operators or Supplier's books
and records, to the extent necessary or appropriate for Operator or Supplier to
verify Operator's or Supplier's compliance with the terms and conditions herein,
during normal business hours upon reasonable advance notice.
ARTICLE 19. NO THIRD PARTY BENEFIT
Except as specifically otherwise set forth herein. nothing contained in
this Agreement, whether express or implied, shall be construed to give any
person or entity other than the parties hereto, any legal or equitable right,
remedy, or claim under or in respect to this Agreement or any provisions
contained herein.
ARTICLE 20. NO PRESS RELEASES
No party herein shall issue a press releases, advertisement, publicity material
or similar written matter or participate in a media interview which mentions or
refers to another party without the prior written consent of that party.
ARTICLE 21. AMENDMENT
This Agreement may be amended or changed only by an agreement in writhing signed
by each of the party's duly authorized officer or agent.
ARTICLE 22. COUNTERPARTS
This Agreement may be executed in multiple counterparts, each of which shaft
constitute on original of this Agreement, but all of which shall together
constitute one and the same instrument.
ARTICLE 23. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the parties with respect to
the subject matter herein and supersedes and replaces all other written or oral
agreements, discussions, and guidelines thereon between the parties.
ARTICLE 24. HEADINGS
Headings and titles used herein are for the convenience of the reader, and shall
not be construed to limit or increase the scope or affect the meaning of any
provisions herein.
ARTICLE 25. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of Pennsylvania.
ARTICLE 26. CONDITIONS PRECEDENT
26.1 Supplier Permits -Supplier shall have obtained all necessary Federal,
State and/or local permits to accept co-mingled materials, which include,
but are not limited to, construction wood. painted wood, paper, plastic.
shingles and creosote.
26.2 Operator Permits -Operator shall have all necessary Federal, State
and/or local permits and approvals in place to accept the processed waste
wood from Supplier.
ARTICLE 27. ARBITRATION
27.1 All disputes and controversies of every kind and nature between the
parties herein arising out of or in connection with this Agreement as to
its existence. construction, validity, interpretation or meaning,
performance. non-performance, enforcement, operation, breach, continuance
or termination therefore shall be submitted to arbitration pursuant to the
procedure listed in 27.2.
27.2 Either party may demand arbitration in Writing to the American
Arbitration Association's (A.A.A.) local office, after a controversy
arises. The parties agree that the A.A.A.'s Commercial Arbitration Rules in
effect as of April 1 I 1982, or as amended thereafter shall apply. The
A.A.A. shall supply each party with an identical list of arbitrators. Each
party to the dispute shall have seven (7) days from the mailing date in
which to strike any names objected to, number the remaining names to
indicate the order of preference, and return the list to the A.A.A. If a
party does not return the list within the time specified, all persons named
therein shall be deemed acceptable. The A.A.A. shall then pursuant to its
rules, appoint one arbitrator. Once the A.A.A. appoints an arbitrator, a
hearing date shall be set within sixty (60) days.
27.2 Neither the parties or the arbitrator, may obtain a continuance unless
all parties and the arbitrator agree. If discovery is necessary 1 al'
parties shall complete discovery five (5) days before the hearing date. The
arbitration hearing shall be conducted as soon as possible and an award
and/or decision shall be made within ten ( 10) days after the close of the
submission of evidence. An award rendered by the arbitrator appointed
pursuant to this Agreement shall be final and binding on all parties to the
proceeding, and judgment on such award may be entered by either party in
any court having jurisdiction. Venue for the purposes of any cause of
action shall be the Supreme Court of the State of Delaware, or the United
States District Court, State of Delaware.
27.4 The initiating party shall advance the administration fees to the
dispute: however .the unsuccessful party shall bear all costs and expenses
of the arbitration proceeding to the A.A.A., costs of all parties
discovery, including depositions expenses. the arbitrator's fees and travel
expenses, and reasonable attorney's fees of the successful party .
27.5 The parties agree that the provisions herein shall be a complete
defense to any suit, action or proceedings instituted in any Federal, State
or local court. Nothing herein contained shall be deemed to give the
arbitrator any authority, power or right to alter, change, amend, modify
and add to or subtract from any provisions of this Agreement.
IN WITNESS WHEREOF. the parties hereto have caused this Agreement to be executed
by their duly authorized officers and/or agents on the dates indicated below
their respective executions.
RBS Enterprises, Inc. /s/ Xxxxx Xxxxxx Title Date
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President
Green Power Energy Holdings LLC /s/ Xxxxx Xxxxxxxxx Title Date
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President
