Exhibit 10.20.1
STEAM PURCHASE CONTRACT
This STEAM PURCHASE CONTRACT [the "Agreement"], dated as of
December 8th, 1986, by and between E. I. DU PONT DE NEMOURS AND
COMPANY, a Delaware Corporation with its principal office located
at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ["Du Pont"] and
O'BRIEN ENERGY SYSTEMS, INC., a Delaware corporation with its
principal office located at 000 Xxxxx 0xx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000 ["O'BRIEN"].
RECITALS:
A. Du Pont owns and operates a plant at Xxxxxx, New
Jersey, ["Du Pont's Plant"] which uses substantial quantities of
steam.
X. X'Xxxxx is engaged in the business of building and
operating cogeneration facilities which produce steam for sale to
industries companies.
X. X'Xxxxx wishes to provide Du Pont with all steam
required for use in the operation of Du Pont's Plant up to the
maximum quantities and in accordance with the specifications set
forth herein, and will finance, design, construct, own, operate
and maintain a cogeneration facility [the "Facility"] to be
located adjacent to Du Pont's Plant and has on even date herewith
entered into a Lease with Du Pont covering certain
real property on which the Facility will be constructed [the
"Ground Lease"].
NOW, THEREFORE, in consideration of the mutual
covenants and promises herein contained and other good and
valuable consideration, the receipt of which is hereby
acknowledged, Du Pont and O'Brien hereby agree as follows:
Article 1. Representations and Warranties
A. Du Pont represents that it is a corporation
organized, validly existing and in good standing under the laws
of Delaware with full power and authority to enter into this
agreement.
B. Du Pont represents that the person executing and
delivering this agreement on Du Pont's behalf is acting pursuant
to proper authorization and that this agreement is the valid and
binding obligation of Du Pont and is enforceable in accordance
with its terms.
X. X'Xxxxx represents that it is a corporation
organized, validly existing and in good standing under the laws
of Delaware with full power and authority to enter into this
agreement.
X. X'Xxxxx represents that the person executing and
delivering this agreement on O'Brien's behalf is acting pursuant
to proper authorization and that this agreement is the valid and
binding obligation of O'Brien and is enforceable in accordance
with its terms.
Article 2. Construction and Operation of Cogeneration Facility.
A. O'Brien agrees to construct the Facility with a
capacity adequate to deliver at least 120,000 pounds per hour of
steam to Du Pont on a continuous uninterrupted basis. To insure
this capacity, O'Brien will build two heat recovery boilers
(including supplemental firing capability) associated with the
gas turbines and a back-up boiler, each of which will be capable
of producing at least 120,000 pounds per hour. The Facility will
be capable of using natural gas or fuel oil. The back-up boiler
shall be capable of burning 0.3% sulphur No. 6 fuel oil, and
O'Brien shall provide storage tank capable of holding at least a
14 day inventory of the fuel oil. As part of the construction
process, O'Brien will dismantle and remove, at its cost, Du Pont
buildings numbered 145, 826, 1939, and such foundations, supports
underground lines and any other items which the parties agree are
required to be removed in order to build the Facility. The
Facility will be located on land leased to O'Brien by Du Pont
consisting of approximately four (4) acres pursuant to the terms
and description set out in the Ground Lease for the nominal rent
of $10.00 per annum for a term expiring 120 days after the
expiration of this Agreement. The Facility Site is described
more fully in the Ground Lease.
X. X'Xxxxx shall operate the Facility twenty-four
hours per day, seven days a week.
X. X'Xxxxx will obtain all permits and variances
necessary for the lawful construction and operation of the
Facility and will apply to the Federal Energy Regulatory
Commission ["FERC"] for a certificate stating that the Facility
is a Qualifying Facility under the Public Utility Regulatory
Policies Act of 1978, as amended ["PURPA"]. If O'Brien has been
unable to obtain all necessary permits or the Facility has not
been certified as a Qualifying Facility by FERC by October 1,
1987, or within twelve months of the signing of this Agreement,
whichever is later, either party may, by written notice to the
other, terminate this Agreement without liability to the other.
D. All costs associated with the Facility, including
without limitation costs associated with engineering, licensing,
construction and operation of the Facility will be the
responsibility of O'Brien. Du Pont's sole responsibilities shall
be: (1) to provide land and provide easements as are necessary
for the construction and operation of the Facility both pursuant
to the attached Ground Lease, (2) to purchase steam as
hereinafter provided, and (3) to supply treated mainswater, at
cost.
X. X'Xxxxx shall obtain all governmental licenses and
permits needed for the sale of steam under this Agreement, and Du
Pont will cooperate with O'Brien and take any reasonable actions
requested by O'Brien, at O'Brien's expense, in obtaining such
licenses and permits.
Article 3. Sale and Purchase of Steam
A. O'Brien agrees to sell steam to Du Pont for use in
Du Pont's Plant in quantities required by Du Pont up to a maximum
of 120,000 pounds of steam per hour in accordance with
the terms and conditions hereof and the pressures, temperatures
and other specifications set forth in Exhibit A, Water and Steam
Supply Specifications, for a period of twenty (20) years
commencing with the Initial Delivery Date as defined in Article 4
below. If Du Pont's needs exceed 120,000 pounds per hour for
short duration peaks (less than 4 hours), O'Brien will supply up
to 150,000 pounds per hour for such short duration peaks at the
contract price. So long as Du Pont materially complies with the
terms and conditions of this Agreement and continues to purchase
during each Operating Year, O'Brien will deliver the steam at
pressures and at such temperatures and according to such other
specifications as set forth in Exhibit A hereto or as are
otherwise mutually agreed to in writing by Du Pont and O'Brien.
"Operating Year" as used herein shall be the period beginning
with the Initial Delivery Date as defined in Article 4 hereof and
ending one year thereafter, and yearly thereafter shall mean each
one year period from the anniversary of the Initial Delivery
Date.
X. X'Xxxxx will install, maintain, operate and own such meters
as shall be necessary to measure and record the steam delivered
and received in accordance with the terms and conditions of this
Agreement and any other data necessary for the sale of steam to
Du Pont and the computation of appropriate invoices. Meters
utilized for this purpose shall meet the specifications and shall
be subject to calibration and testing as set forth in Exhibit B
hereto. Upon request, O'Brien will allow Du Pont access to this
instrumentation at reasonable
hours, but all instrument reading, calibrating and adjustment
will be done only by O'Brien.
C. Du Pont will not be required to take or pay for
any steam not required for its operations at the Du Pont plant.
Insofar as Du Pont has requirements for steam at the Plant during
a twenty (20) year period beginning with the Initial Delivery
Date, it will purchase from O'Brien its requirements for steam
for the Plant up to the minimum quantity necessary for O'Brien toQualifying
Facility Status under PURPA as of the date of
this Agreement ("Minimum PURPA Obligation"), which quantity is
equal to 48,000 pounds of steam per hour, annual average. If Du
Pont has requirements greater than the Minimum PURPA Obligation,
it may elect to purchase the additional requirements from O'Brien
up to a maximum total amount of 120,000 pounds per hour.
D. Should Du Pont not take the annual Minimum PURPA
Obligation and after a one-year cure period, and if O'Brien is
unable to obtain relief from the regulatory authorities as regards
its minimum Qualifying Facility status under PURPA, O'Brien shall
have the right to conduct an affiliated thermal consuming
business acceptable to Du Pont on the property leased from Du
Pont under the Ground Lease. If required by O'Brien, Du Pont
will grant continued necessary and reasonable access across its
property to allow O'Brien to continue to operate the cogeneration
Facility and the affiliated thermal consuming business for the
term of this Agreement or any extension thereof. Du Pont will
also continue to provide the water
supply for the Facility, as provided in Article 9 hereof, if Du
Pont's plant remains in operation.
X. X'Xxxxx agrees that so long as Du Pont purchases
the Minimum PURPA Obligation in each Operating Year (except to
the extent limited by Force Majeure). O'Brien will not sell
steam from the Facility to any other person. Furthermore,
O'Brien's commitment to supply steam to Du Pont shall take
priority over any obligation to use steam to provide electricity
to any other party.
X. X'Xxxxx shall maintain a fuel oil supply
sufficient to meet Du Pont's maximum steam requirement for
fourteen days.
Article 4. Initial Delivery Date
A. The parties will begin to deliver and receive steam under
this Agreement within five (5) business days after O'Brien has
notified Du Pont that the Facility is commercially operational
(such date of commencement of delivery is herein referred to as
the "Initial Delivery Date"). O'Brien represents that the
Initial Delivery Date shall be on or before November 30, 1989,
provided that the Initial Delivery Date shall be extended by the
occurrence and the continuation of an event of Force Majeure as
defined in Article 7 below. Should O'Brien fail to commence
delivery of steam by the Initial Delivery Date (or the Extended
Initial Delivery Date as a result of an event of Force Majeure),
O'Brien agrees to pay Du Pont as liquidated damages a sum equal
to the difference
between what Du Pont would have had to pay to produce steam for
itself and the price which Du Pont is obligated to pay under this
Agreement. These liquidated damages shall be calculated pursuant
to the formula set out in Exhibit C. In lieu of accepting these
liquidated damages, or in the event that O'Brien should fail to
pay them, Du Pont shall have the right to pursue all available
remedies at law or in equity.
B. At least six months prior to the Initial Delivery
Date, O'Brien shall deliver to Du Pont steam from the back-up
boiler which will allow Du Pont to evaluate the steam condensate
from that boiler. With respect to condensate from the steam
turbine and heat recovery boiler systems, Du Pont's evaluation
will begin at start up and be completed within three months after
the Initial Delivery Date.
Article 5. Term; Termination
A. This Agreement shall be effective as of the date
of its execution and shall continue in effect thereafter for a
period of twenty (20) years beyond the Initial Delivery Date, and
remain in effect thereafter unless terminated by three years
notice by either party.
B. Upon expiration or if the Agreement is terminated
pursuant to Paragraph 5.A, Du Pont shall have the option to buy
part or all of the Facility equipment at its then fair market
value. In constructing the Facility, O'Brien shall install the
back-up boiler and all necessary auxiliaries in such a way that
it and the land on which it is located can be severed from the
rest of the Facility in the event of termination.
C. If the Agreement expires or is terminated for any
reason, O'Brien shall remove at its expense that part of the
Facility not purchased by Du Pont from the Xxxxxx site within
twelve months unless the parties otherwise agree in writing.
Article 6. Purchase Price
A. Throughout the term of this Agreement, the price
Du Pont shall pay O'Brien for the purchase of steam shall be as
provided in Exhibit D, the Purchased Steam Rate Schedule.
B. If Du Pont can secure or otherwise provide gas
equivalent to its steam demand (as defined in Exhibit A) at a
price lower than the cost of the gas supply being used by
O'Brien, then O'Brien will contract with Du Pont for such gas if
O'Brien's existing gas supply agreement does not prohibit or
penalize O'Brien for taking such gas. Assuming the Du Pont gas
can be used by O'Brien, the parties will negotiate in good faith
to arrive at a mutually acceptable price for the gas and steam.
Article 7. Force Majeure; Contingency
A. As used in this Agreement, "Force Majeure" shall be
an event by which either party shall be prevented from delivering or
receiving steam by reason of or through flood, earthquake, storm,
tornado, lightning, fire, explosion, war, riot, civil
disturbances, strikes or other labor stoppage, sabotage,
restraint by governmental authority (including any delay or
failure by a governmental authority to issue any
necessary permit or license), major equipment breakdown not due
to the sole negligence of O'Brien or Du Pont, inability to obtain
necessary labor or unforeseen shortages in materials or work from
subcontractors, and other like events beyond the control of the
parties, but shall not include economic hardship, the price
O'Brien receives for electricity, the price O'Brien pays for
natural gas or other fuel, or lack of a customer for the
electricity.
B. If an event of Force Majeure results in a party's
being unable to perform in full or in part its obligations under
this Agreement, that party shall not be deemed to be in breach of
this Agreement if the hindered party used its best efforts to
perform its obligations under this Agreement and to reduce the
losses to the other party arising from the event of Force
Majeure. If an event of Force Majeure shall occur, the hindered
party shall promptly notify the other party of its extent and
probable duration and the parties shall meet to decide if this
Agreement should be revised in light of the impact of the event
upon the implementation hereof. In the event of an O'Brien
strike or other work stoppage, O'Brien will use its supervisory
personnel to maintain full steam supply to Du Pont.
Article 8. Interconnection with Du Pont's Plant
A. O'Brien shall be responsible for all required auxiliary
equipment and systems required to supply steam to the point of
interconnection with Du Pont's Plant as indicated in
Exhibit B. The meter shall be located at or near the point of
interconnection. O'Brien will supply and maintain, at its cost,
all piping systems and interconnection points with Du Pont's
Plant specified on Exhibit B hereto.
B. Du Pont will be responsible for the construction,
operation and maintenance, at its cost, of the piping and other
equipment and apparatus to be located in Du Pont's Plant and
required to receive the delivery of steam from the Facility to Du
Pont's Plant at the point of interconnection.
C. Both Du Pont's and O'Brien's interconnection
facilities shall be designed to generally accepted engineering
standards. Du Pont and O'Brien agree to cooperate in determining
appropriate and compatible equipment specifications for
interconnection facilities, provided, however, that
notwithstanding anything to the contrary herein, Du Pont shall
not be responsible for any damage to the Facility due to demand
from du Pont's systems. O'Brien will deliver steam at the
interconnection point at 155 psig dry and saturated. O'Brien
will provide necessary safety valves and control equipment that
will limit steam to a maximum of 165 psig and a maximum steam
temperature of 398 DEGREES. O'Brien shall cause these valves to be
tested once each year by persons holding a Relief Valve (RV)
Stamp from the National Board of Boiler and Pressure Vessel
Inspectors and the results of such test shall be supplied to Du
Pont.
X. X'Xxxxx accepts responsibility for all necessary
cleanup and correction of all environmental contamination of
Du Pont's property that may result from O'Brien's operations.
O'Brien shall not be responsible for any environmental
contamination on or within the leased Facility Site if such
contamination originated prior to the effective date of the
lease.
Article 9. Water Supply Facilities; Provisions for Disposal
of Waste Water
Du Pont will supply 1,000 gallons per minute peak and
702 gallons per minute average of treated mainswater and xxxx
X'Xxxxx at Du Pont's actual cost on a monthly basis. The current
cost range as of the execution of this Agreement is $1.20-$1.50
per 1,000 gallons. In order to permit routine maintenance of Du
Pont's water supply system, O'Brien will provide, as part of its
Facility, water storage capacity adequate to sustain the Facility
operation for a period of twelve hours. Waste water will be
disposed of into the Borough of Sayreville's sanitary sewer,
hence to the Middlesex County Utilities Authority Systems.
O'Brien will bear all disposal costs based on current and future
regulations (which at the time of execution of this Agreement
include flow, biological oxygen demand, suspended solids,
chlorine demand) and sampling and analysis costs. Waste water pH
must be maintained between 5 and 9 and no toxic or corrosive
effluents will be permitted in the waste water. Any future
discharge parameter imposed by any regulatory agency must be met
by O'Brien. O'Brien shall be responsible for all treatment of
waste water and all permits required for discharge thereof.
O'Brien will provide flow
meters for the mainswater and the waste water and a 24-hour
composite sampling system for the waste water. Monthly supplies
and daily flow data will be provided to Du Pont for analysis and
billing purposes. Waste water flow and constituents will be
provided to the Borough of Sayreville for billing purposes.
O'Brien will be responsible for the design, construction,
operation and maintenance of these water supply and waste water
disposal facilities.
Article 10. Service Interruptions
A. O'Brien shall exercise all reasonable effort to
provide a continuous supply of steam to Du Pont at the quantities
described in Article 3. In this connection O'Brien agrees to
consult with Du Pont on a regular basis and to schedule to the
extent reasonably possible all routine boiler maintenance to
coincide with periods when Du Pont's operations are shut down or
steam needs are reduced. O'Brien agrees to keep at least one
heat recovery boiler in operation at all times when Du Pont's
Plant is requiring steam.
O'Brien agrees to conduct monthly tests of the back-up
boiler which it will install as part of the Facility. Du Pont
shall have a right to witness such tests and will be provided
with a copy of the report of such tests. If both heat recovery
boilers are out of service, O'Brien shall operate the back-up
boiler and move in an additional boiler of equal size through its
Mobile Power Division at no cost to Du Pont.
B. If for reasons other than Force Majeure events
O'Brien fails to supply steam to equal Du Pont's requirements
(up to a maximum of 120,000 pounds per hour), Du Pont shall have
the right immediately to take over operation of the auxiliary
boiler installed by O'Brien in order to provide steam to meet its
requirements, and to operate said boiler until such time as
O'Brien or its successor can resume steam deliveries on a
reliable basis pursuant to this Agreement. Du Pont may retrofit
one of the heat recovery boilers in order that the boiler can
operate independently of the gas turbine. In such event, Du Pont
shall also have the right to operate the retrofitted heat
recovery boiler to provide additional back up. O'Brien shall
obtain in its loan agreement any necessary waiver from its lender
to permit Du Pont to exercise the foregoing option.
In addition to the above rights, Du Pont shall also
have the right either (1) to recover from O'Brien liquidated
damages calculated pursuant to the formula in Exhibit C or (2) to
pursue any available remedies at law or in equity.
Article 11. Xxxxxxxx
On or immediately after Du Pont's monthly closing date
(which shall be supplied O'Brien by Du Pont at the beginning of
the year) O'Brien will xxxx Du Pont for the steam purchased by Du
Pont during the previous month. Each invoice will include all
necessary information for calculation of the payment pursuant to
Article 4 hereof. Payment for such invoices shall be made by Du
Pont within thirty (30) days after receipt. Payments made
thereafter shall be subject to a late payment charge on the
unpaid amount of such invoice of one percent per
month. Should Du Pont fail to pay any invoice within thirty (30)
days after receipt, O'Brien, in addition to collecting the
interest set out herein, may pursue any available remedy at law
or in equity.
Article 12. Assignment and Subcontracting
A. Neither party may assign this Agreement in whole
or in part, or any rights granted hereunder, or delegate or
subcontract to another party any of the duties hereunder, without
the prior written consent of the other party, which consent shall
not be unreasonably withheld. Any transfer, assignment,
delegation, or attempted transfer, assignment or delegation under
this Agreement or of any of the rights or duties herein granted
or imposed, whether voluntary, by operation of law or otherwise,
without consent in writing, shall, at the option of the party
whose written consent shall have been obtained, cause this
Agreement to be terminated.
X. X'Xxxxx may mortgage, hypothecate, pledge or
encumber its interest in this Agreement to any financial
institution lending funds for construction of the Facility,
provided that such lender does not reassign its interest in the
Agreement without Du Pont's prior written consent.
C. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their successors and assigns.
D. If Du Pont should elect to sell its Xxxxxx
operations or site, it agrees to make assumption of its
obligations under this Agreement a condition to the purchase of
such operations. If Du Pont elects to close down or abandon
the Xxxxxx operations or site, its obligations under this
Agreement shall terminate except for (1) the lease of the
Facility Site and the adjoining land described in the Ground
Lease to O'Brien, (2) the provision of continued access to the
Facility Site and adjoining plot, and (3) provision of the water
supply pursuant to this agreement assuming that Du Pont is still
operating its water treatment plant.
Article 13. Preconditions to Performance
The parties' obligations under this Agreement are
conditioned upon and subject to (1) the execution of a mutually
acceptable Ground Lease covering the Facility Site:
(2) O'Brien's executing a contract, satisfactory to O'Brien,
requiring Public Service Electric and Gas or some other supplier
to supply O'Brien with all natural gas necessary for O'Brien's
operation of the Facility; (3) O'Brien's arranging necessary
financing for construction of the Facility; (4) O'Brien's
obtaining all required permits for construction and operation of
the Facility; and (5) O'Brien's executing a contract,
satisfactory to O'Brien, with Jersey Central Power and Light
Company for the purchase of electricity generated by the
Cogeneration Facility.
Article 14. Remedies
A. Should either O'Brien or Du Pont breach this
Agreement, the other party shall give written notice of such
breach, and if such breach is not cured within thirty (30) days
of receiving such notice, the non-breaching party may seek any
remedy available at law or in equity. Where this Agreement
provides for the payment of specific liquidated damages to Du
Pont, Du Pont shall have the option of either accepting such
damages or pursuing available remedies at law or in equity.
B. The parties agree that if one party brings an
action against the other with respect to this Agreement, or any
act or representation made herein, the successful party will be
indemnified by the unsuccessful party for all court costs, legal
fees and other expenses. The party will be deemed successful in
any action if (1) a final applicable order has been entered by
the court or government agency having jurisdiction over such
action and (2) all appeals have been exhausted or rights to
appeal have elapsed.
Article 15. Compliance with Laws, Rules and Regulations
A. In all matters pertaining to the subject matter of
this Agreement, both parties shall comply with all applicable
laws, rules and regulations of all governmental authorities
having control over either party of this Agreement.
X. X'Xxxxx warrants and represents that throughout
the term of this Agreement and any renewals thereof it shall
maintain and operate the Facility in compliance with all federal,
state and local statutes, ordinances, rules and regulations
including but not limited to statutes, ordinances, rules and
regulations pertaining to human safety, protection of property,
and protection of the environment. Without limiting in any way
the foregoing, O'Brien shall comply with (1) the New Jersey
Department of Labor's Division of Workplace Standards,
Rules and Regulations for Boilers, Pressure Vessels and
Refrigeration, as amended from time to time, and (2) those
applicable noise control standards specified by the New Jersey
State Department of Environmental Protection, Title 7,
Chapter 29, subchapter 1, as amended from time to time, a copy of
which has been supplied to O'Brien.
Article 16. Indemnification
A. O'Brien agrees to defend, indemnify and hold
harmless Du Pont (including, its officers, directors, employees,
subcontractors and agents) from and against any and all
liability, claim, injury (including death resulting therefrom),
property damage, fine, penalty or assessment by any public
agency, cost or expense (including costs of defense, settlement
and reasonable attorneys' fees), which (1) are solely and
directly or indirectly caused by any act or omission of O'Brien,
its agents, employees or subcontractors associated with, or
arising from the performance of this Agreement, including any
failure to comply with any pertinent Federal, state or local law,
statute, regulation, rule or (2) are caused jointly by any such
act or omission by O'Brien, its agents, employees or
subcontractors and any such act or omission by any third party or
parties. The term "liabilities" employed in the preceding
sentence, and O'Brien's indemnification obligation, includes any
strict liability and other liability without fault, however
named, asserted against Du Pont.
B. Du Pont agrees to defend, indemnify and hold
harmless O'Brien (including its officers, directors, employees
and agents) from and against any and all liability, claim, injury
(including death resulting therefrom), property damage, fine,
penalty or assessment by any public agency, cost or expense,
(including costs of defense, settlement and reasonable attorneys'
fees) which (1) are solely and directly or indirectly caused by
any act or omission of Du Pont, its agents, employees or
subcontractors associated with, or arising from Du Pont's
obligations under this Agreement, or (2) are caused jointly by
any such act or omission by Du Pont, its agents, employees or
subcontractors and any such act or omission by any third party or
parties.
C. Where acts or omissions of the nature referred to
above by both O'Brien and Du Pont (including their respective
officers, directors, employees, subcontractors or agents) have
caused any liabilities, damages, fines, penalties, costs, claims,
demands and expenses, whether or not a third party's acts or
omissions also were causal, O'Brien and Du Pont shall contribute
to their common liability a pro rata share based upon the
relative degree of fault of each. In such a case, O'Brien shall
bear all costs (including attorneys' fees and other costs of
defense, if the parties choose common counsel; but if Du Pont
selects its own counsel, Du Pont shall bear its own attorneys'
fees and cost of defense, subject to reimbursement by O'Brien
pursuant to the last sentence of this paragraph) until (i) there
is a final court judgment allocating fault between the parties,
or (ii) the parties agree to such an allocation. If neither (i)
nor (ii) occurs within one (1) year
of the date on which O'Brien first incurs such costs (or within
such other period to which the parties agree in writing), then
(iii) either party may require submission of the issue of
allocation or arbitration, pursuant to the rules of the American
Arbitration Association, of two disinterested and competent
persons mutually chosen, and a third person whom the two shall
select. A majority decision by the three arbitrators shall be
conclusive and binding on both parties. Upon the concurrence of
(i), (ii) or (iii), Du Pont shall reimburse O'Brien for that
portion of the past costs paid by O'Brien which is equal to Du
Pont's share of the allocation; O'Brien shall reimburse Du Pont
for that portion of any attorneys' fees and defense costs paid by
Du Pont which is equal to O'Brien's share of the allocation; and
the parties shall share the costs of any arbitration and any
future costs according to the allocation.
Article 17. Insurance
At all times during the term of this Agreement, O'Brien
shall obtain and keep in force a Comprehensive General Liability,
Bodily Injury and Property Damage policy in an amount not less
than $5 million to cover O'Brien's obligations under this
Agreement. This policy shall name Du Pont as an additional
insured, and O'Brien shall furnish Du Pont as an additional
insured, and O'Brien shall furnish Du Pont with certificates of
insurance evidencing the coverage for the period of the
Agreement. O'Brien shall also obtain and keep in force Workers
Compensation Insurance in the statutory amount and Employer's
Liability insurance of $100,000 per accident,
which policies shall provide a waiver of subrogation against Du
Pont. In the event any subcontractor is employed, with or
without Du Pont's consent, for the services covered in this
Agreement, then O'Brien assumes full responsibility to insure
that the subcontractor's services are covered by the same
insurance limits as set forth herein.
Article 18. Amendments; Waiver
This Agreement may not be terminated, amended,
supplemented, waived or modified except by an instrument in
writing signed by both of the parties hereto. Any failure by
either party to enforce any provisions hereof shall not
constitute a waiver by that party of its right subsequently to
enforce the same or any other provision hereof.
Article 19. Severability
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
Article 20. Governing Law
This Agreement is executed and delivered in the State
of Delaware and shall in all respects be governed and construed
in accordance with the laws of the State of Delaware including
all matters of construction, validity and performance.
Article 21. Employee Displacement
In an effort to assist Du Pont in minimizing employee
layoffs or discharges which may result from the parties entering
into this Agreement, O'Brien shall make a good faith effort to
employ or cause its contractors to employ those employees of Du
Pont directly displaced due to Du Pont's discontinuing its own
steam production where such employees have the requisite skills
and experience to be considered for available positions at the
Cogeneration Facility.
Article 22. Possible Supply of Electricity
O'Brien has expressed an interest in supplying
electricity to Du Pont. The parties will explore the feasibility
of O'Brien's providing electricity to Du Pont under mutually
acceptable conditions.
Article 23. Notices
All notices and other communications hereunder shall be
in writing and shall become effective, if sent by first class
certified or registered mail with postage prepaid and return
receipt requested, three (3) days after deposit in the mails, or
when received (whichever is earlier), and shall be directed
(a) if to Du Pont, to E. I. du Pont de Nemours and Company,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Manager-Chemicals and
Energy Section, Materials and Logistics Department; (b) if to
O'Brien, to O'Brien Energy Systems, Inc., 000 Xxxxx 0xx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Executive Vice
President; or (c) to such other address as any such person may
designate by notice given to the other party hereto.
IN WITNESS WHEREOF, this Agreement is executed by the
duly authorized officers of the parties, pursuant to the
authority vested in them by the lawful action of their Boards of
Directors, on the date and year first above written.
E. I. du Pont de Nemours and Company
By /s/ W. E. Datum
Title Sr. Vice President, Materials
and Logistics
O'Brien Energy Systems, Inc.
By /s/ Xxxxxxx Xxxxxx
Title Exec. V. P.
EXHIBIT A
WATER AND STEAM SUPPLY SPECIFICATIONS
Water Quality
Treated mainswater supplied to O'Brien by Du Pont will meet
Du Pont Specification 29-279, dated August 21, 1979, a copy
of which has been supplied to O'Brien.
Boiler feedwater treatment by O'Brien must meet Du Pont
Specification 29-427, dated September 12, 1979, a copy of
which has been supplied to O'Brien.
Condensate from steam delivered to the point of
interconnection must meet Du Pont Specification 29-317,
dated August 23, 1979, a copy of which has been supplied to
O'Brien.
No organic additive shall be introduced into the feedwater,
condensate or steam systems without prior approval from Du
Pont.
Steam Quality
155 psig plus 10 or minus 0 psig, dry and saturated at the
point of interconnection. The quality of the steam
delivered shall have no more than 25 degrees F superheat.
Steam, at the point of interconnection, shall have at total
solids content not in excess of 3 parts per million, as
determined in accordance with Method A of the latest
published edition of "Methods of Testing for Suspended and
Dissolved Solids in Industrial Waters," by the American
Society for Testing Materials, or a similar method embodying
the same essential principles of that specification.
EXHIBIT B
STEAM SUPPLY METER SPECIFICATIONS
POINT OF INTERCONNECTION
O'Brien guarantees the accuracy of its instruments for
measuring the quantity of steam to within + 1 percent.
Instruments will be tested periodically as necessary, but
not less than semiannually.
If Du Pont requests that any meter be tested between
O'Brien's normal testing dates, O'Brien will arrange for the
meter to be promptly tested. All instrument testing will be
arranged by O'Brien and conducted by an independent testing
service satisfactory to both parties. O'Brien will pay the
expense of normal periodic tests; the expense of any test
requested by Du Pont will be paid by Du Pont, if the meters are
within the guaranteed accuracy.
O'Brien will give Du Pont sufficient notice of any periodic
or special instrument test to enable Du Pont to witness the test.
If any test reveals that O'Brien's instruments for measuring
the quantity of steam are inaccurate by + 1 percent or more, and
underpayment or overpayment occurs, the aggrieved party is
entitled to a retroactive adjustment. Any instrument inaccuracy
will be deemed to have commenced on the date which fell exactly
halfway between the date of the test revealing the inaccuracy and
the date of the last previous instrument test. The amount of
underpayment or overpayment will be calculated daily by Du Pont
in good faith commencing on the date on which O'Brien's
instruments are deemed to have been inaccurate. Amounts
reflecting underpayments and overpayments are payable immediately
upon receipt of the payment invoice.
The point of interconnection for steam shall be at a point
agreed upon by the parties.
EXHIBIT C
LIQUIDATED DAMAGES
Liquidated Damages shall be calculated according to the
following formula:
LDS = T X C - (T X S)
Where:
1) LDS equals liquidated damages sustained by Du Pont
during an unexcused supply interruption; and
2) T equals million BTU's of steam not provided Du
Pont during an unexcused supply interruption
(limited to Du Pont's requirements-not to exceed
120,000 lbs/hr) the enthalpic value of steam used
to compute T shall be 1,096 BTU's per pound; and
3) C equals Du Pont's rolled up cost for steam per
million BTU's [costs include operation,
maintenance, fuel, and rental (calculated on a
monthly rental basis unless the parties agree to a
longer term) of any steam producing equipment];
and
4) S equals cost of steam per million BTU's under
this Agreement (calculated pursuant to Exhibit D).
EXHIBIT D
STEAM PURCHASE RATE
The Base Steam Charge shall be $1.00 per thousand pounds for 155
psig, 368 degree Fahrenheit steam.
The steam charge per billing month shall be determined according
to the following formula:
SC = BSC x LBS
where:
1. SC equals the steam charge per billing month;
2. BSC equals the base steam charge of $1.00 per thousand
pounds for 155 psig, 368 degree Fahrenheit steam;
3. LBS equals thousands of pounds of steam delivered per
billing month.
When the most recent quarterly average spot purchase cost of
No. 6 oil received at New Jersey utility facilities of 50 MW or
larger, as reported in the Electric Power Quarterly, exceeds
$4.55 per million BTU's, the steam charge per billing month shall
be determined according to the following formula:
SC = BSC x MFC x LBS
BFC
where:
1. SC equals the steam charge per billing month;
2. BSC equals the base steam charge of $1.00 per thousand
pounds for 155 psig, 368 degree Fahrenheit steam;
3. MFC equals the most recent quarterly average spot
purchase cost of No. 6 oil received at New Jersey
Electric Utility Facilities of 50 MW capacity or
larger, as reported in Electric Power Quarterly,
published by the Energy Information Administration. If
the data upon which this pricing component is based
ceases to be published by the Electric Power Quarterly,
the parties shall mutually agree upon another source of
comparable information on fuel price changes;
4. BFC equals $4.55 per million BTU's as derived from the
facility base delivered fuel cost of $28/BBL No. 6 oil
at 6.15 MM BTU/BBL; and
5. LBS equals thousands of pounds of steam delivered per
billing month.
If condensate is returned to the facility, Du Pont will be
credited according to the following:
CRCR = SC X 1000
1196 BTU/lb
1. CRCR equals the condensate return credit rate $/MM BTU,
to Du Pont,
2. SC equals the steam charge per billing month, $/M lb;
and,
3. 1196 BTU/lb equals the number of BTU's per pound of 155
psig, 368 degree Fahrenheit steam.
The energy return to Du Pont will be determined as follows:
ER = W x Cp x T
where:
1. W equals the return flow of condensate, lb/month;
2. Cp equals the specific heat of water. 1 BTU/lb, degree
Fahrenheit, and;
3. T equals condensate return temperature in degrees
Fahrenheit.
4. ER equals the energy returns per month, MM BTU/month.
Finally, the condensate credit to Du Pont would then be
determined by:
DCC = CRCR x ER
where:
1. DCC equals the Du Pont condensate credit, $/month;
2. CRCR equals the condensate return credit rate, $/MM
BTU; and
3. ER equals the energy return; MM BTU/month.
[E.I. Du Pont de Nemours & Company letterhead]
Xx. Xxxxxx X. Xxxxx
Vice President
O'Brien Energy Systems
000 X. Xxxxxx Xx.
Xxxxxxxxxxxx, XX 00000
Dear Xxx:
This letter hereby acknowledges that O'Brien Energy Systems
and E. I. du Pont de Nemours & Co. mutually agree to extend the
required date by which O'Brien must obtain all necessary permits
to October 1, 1988, as is defined in Paragraph 2 of Amendment #1
to the Steam Purchase contract for the proposed Xxxxxx, NJ
Cogeneration Project, dated January 12, 1988.
If you have any questions or need additional information,
please call.
Sincerely,
/s/ X. X. Xxxxxx
X. X. Xxxxxx
Senior Purchasing Agent
cc: Xxxx Xxxxxx - Du Pont
