Exhibit 10.2
NECO
ENERGY PURCHASE AGREEMENT
This ENERGY PURCHASE AGREEMENT ("AGREEMENT") is entered into on the date
executed herein below by and between NECO ENERGY CORPORATION (previously New
Energy Corporation, ("NECO") and Xxxxxx X. Xxxxxx Co., Inc. ("PURCHASER").
1. Purchaser wishes to avoid high energy costs and agrees to purchase energy
produced by the NECO solar electro-thermal generating equipment, sub-systems,
recording meters and interconnect facilities (the "Solar Generator") at 20%
below prevailing retail energy rates charged by the local public utility company
for a term of sixty (60) months (the "First Term").
2. NECO agrees that at the end of the first Term, to extend this Agreement for
an additional sixty (60) month Term (the "Second Term") at 30% below the
prevailing retail energy rates charged by the local public utility company and
which shall include the Option to Purchase ("Option") for Purchaser to acquire
the Solar Generator. See Exhibit A attached to this Agreement by reference which
is part hereof.
3. In the event Purchaser elects not to purchase the Solar Generator at the end
of the Second Term, NECO shall provide Purchaser an additional sixty (60) month
Term (the "Third Term") at 35% below the prevailing retail energy rate charged
by the public utility at that time.
4. Purchaser agrees it shall at all times during the First and Second Term
(and/or additional Terms if applicable) of this Agreement provide adequate space
at Purchasers Site for the Solar Generator at no cost to NECO along with full
access by NECO to its Solar Generator. Purchaser must maintain site control
during the term of this Agreement. If Purchaser does not own the site where the
Solar Generator is to be installed, Purchaser must provide NECO an executed
Landlord Waiver Agreement between Purchaser and Landlord (see Exhibit C) which
shall thereafter become a part of this Agreement.
5. NECO agrees to install the Solar Generator at its sole expense and obtain all
government permits and interconnect agreements with the local public utility
company
6. Purchaser agrees that all rights, title and ownership of the Solar Generator
is the personal and identifiable property of NECO and Purchaser shall not create
any claims, liens, damages or encumbrances against the Solar Generator. NECO and
Purchaser agree to hold each other, separately and individually harmless from
any and all loss, claims, damages and/or actions caused by either party. NECO
shall provide liability insurance for the Solar Generator.
7. Purchaser agrees to promptly pay all invoices received from NECO calculated
from meter readings at Purchasers property. Payments are due NECO from Purchaser
no later than fifteen (15) days of NECO energy billing Due Date (the "Payment").
Billing statement text is outlined in Definitions.
8. In the event of Payment Default, Purchaser agrees NECO has the right to (a)
enter Purchasers Site during normal business hours and (b) remove the Solar
Generator and subsystems listed, but not limited to those outlined in Exhibit B
and (c) institute collection proceedings. Solar Generator and sub-systems shall
be subject to paragraphs within Exhibit C, Landlord Waiver.
9. Any dispute, controversy or claim arising under, out of or relating to this
Agreement and subsequent amendments thereof and hereinafter referred to as "the
Dispute" shall be submitted to Mediation in accordance with the Rules of
Mediation of the American Arbitration Association. See Definitions.
10. Purchaser and NECO agree that this Agreement may be assigned by either party
and that this Agreement shall have binding effect.
11. Rates paid by Purchaser to NECO for delivered electricity are based upon the
number of kilowatts used by Purchaser at rates charged by the local public
utility company, including demand charges, time of day use (where applicable)
and other factors, less 20% during the First Term, 30% during the Second Term
and 35% (if applicable) during the Third Term.
12. Rates paid by Purchaser to NECO for delivered thermal energy are based upon
the number of therms or BTU's used by Purchaser at rates charged by the local
public utility company, including surcharges if any, and including boiler
inefficiency (where applicable) and other factors, less 20% during the First
Term, 30% during the Second Term and 35% (if applicable) during the Third Term.
See Definitions.
13. NECO reserves the right to sell any available energy not consumed by
Purchaser to Third Parties. See Definitions.
14. Termination: This Agreement and commencement of the first sixty (60) month
First Term shall become effective as of the date set forth above and shall
continue in full force and effect until the final day sixty (60) months into the
Second Term, March 6, 2012 or until the final day of the Third Term (if
applicable), at which time this Agreement shall terminate.
Energy Purchase Agreement - Xxxxxx Xxxxxx Page 1 of 4
DEFINITIONS
BOILER INEFFICIENCY: Boiler inefficiency loss equals approximately 25% due to
the heat loss going up the exhaust stack.
DISPUTES: Any Dispute, controversy or claim arising under, out of or relating to
this Agreement (and subsequent amendments thereof) its valid conclusion, binding
effect, interpretation, performance, breach or termination, including tort
claims (hereinafter referred to as "the Dispute") shall be submitted to
Mediation in accordance with the Rules of the American Arbitration Association
in force at the time of initiating the mediation procedure. If the Dispute has
not been settled pursuant to the Mediation procedure within 60 days of the
initiation of the Mediation, or if either party will not participate in the
Mediation, the Dispute shall be referred to and finally determined by
arbitration in accordance with the Rules of Arbitration of the International
Chamber of Commerce in force when initiating the arbitral procedure. The
arbitral tribunal shall consist of a sole arbitrator. The place of arbitration
shall be San Diego, USA. The language to be used in the arbitral proceedings
shall be English. All disputes, controversies or claims referred to arbitration
including those on any statute of limitations, set-off claims, tort claims and
interest claims shall be governed by the substantive law of California, U.S.A.
INVOICES: Invoices are billing statements provided Purchaser by NECO on a
regular basis commencing the first day of each month and shall contain (1)
amount of kiloWatt hours delivered, (2) amount of delivered B.T.U.'s / therms
(where applicable), (3) price per kWh and therm and (4) total amount due).
NECO ENERGY CORPORATION: A public company, trading on NASDAQ Over The Counter
Bulletin Board ("OTCBB"). NECO has a Technology and Strategic Marketing
Agreement with MegaWatt Energy Corporation ("MEC"). MEC is a manufacturer
patented solar electro-thermal generators for NECO.
PAYMENT DEFAULT: Purchase shall be in default if payment is not received by NECO
fifteen (15) days after the Billing Date. Billing shall be sent to Purchaser in
advance of the billing date.
PURCHASERS SITE: The site or location where the Solar Generator is installed.
RECORDING METERS: Are placed at a convenient location. There are two types of
recording meters: (1) a kilowatt hour meter(s) and (2) a thermal B.T.U.
recording meter(s).
SOLAR GENERATOR: The identified components of the solar electro-thermal
generator, sub-systems, recording meters and interconnect facilities installed
at and upon Purchasers Site are the subject of this Agreement and Exhibits and
are listed in Exhibit B attached to this Agreement hereto by reference and is a
part hereof.
THIRD PARTIES: In the event the purchaser does not require energy at a certain
time of day or does not require thermal energy, NECO reserves the right to sell
any excess energy to the local utility or other parties.
UNITS OF MEASUREMENT: 1 Kilowatt: 1000 xxxxx; 1 Therm: 100,000 B.T.U.
EXHIBITS A, B AND C ATTACHED HERETO AND ARE PART OF THIS AGREEMENT.
IN WITNESS WHEREOF, PURCHASER and NECO have executed this Agreement as of this
5th day of March, 2002 in the City of Gardena, County of Los Angeles, State of
California.
PURCHASER NECO:
By: ______________________________ By: ______________________________
Xxxxx Xxxxxx, President Xxxx XxXxxxxx
00000 Xxxxx Xxxx Xx. 0000 Xx Xxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000 Xx Xxxxx, XX 00000-0000
(000) 000-0000 (000) 000-0000
Office: 0000 Xx Xxxxx Xxxx
Energy Purchase Agreement - Xxxxxx Xxxxxx Page 2 of 4
NECO
OPTION TO PURCHASE SOLAR GENERATOR
EXHIBIT A
This Exhibit A is attached hereto by reference and is part of the Energy
Purchase Agreement ("Agreement") entered into by and between NECO and Purchaser.
1. NECO agrees to transfer all rights, title and interest of and in the NECO
Solar Generator and its sub-systems to Purchaser free and clear of all liens and
encumbrances subject to the terms of the Agreement and Exhibit.
2. Purchaser has the right to purchase the Solar Generator after the end of the
Second Term: March 6, 2012 or Third Term: March 6, 2017 or at any time as
requested by Purchaser as defined in the Agreement. Purchaser is required to
inform NECO of its election to exercise this Option to Purchase provision no
less than sixty (60) days prior to the end of the Second Term or Third Term (if
applicable).
3. NECO hereby offers this Option to Purchase the Solar Generator installed at
Purchasers Site. The purchase price shall be equal to the amount of (a) the
value of electricity and thermal energy (if applicable and used by Purchaser)
produced by the Solar Generator and paid by Purchaser to NECO over the previous
Second Term, and (b) (where applicable) the value of electric and thermal energy
produced and delivered by the Solar Generator and paid for by Purchaser to NECO
over the previous Third Term. Purchaser shall retain this Option to Purchase for
the period of fifteen (15) years from the date of this Agreement as long as
Purchaser conforms to the terms of this Agreement and Exhibits.
4. In the event Purchaser elects to extend the number of Terms four (4) times
ending at twenty (20) years from the date of this Agreement and Exhibits,
thereafter this Option and Agreement shall automatically become void and may be
renegotiated by NECO and purchaser.
5. Purchaser hereby authorizes NECO to install a Rankine Cycle Turbine, its
sub-systems and associated thermal storage to produce electricity on demand for
subsequent use by Purchaser or sale to Third Parties by NECO. The installation
shall be at the sole cost of NECO and be subject to this Agreement and Exhibits
A, B and C.
AGREED BY:
PURCHASER NECO
By: _____________(initials) By:____________(initials)
Xxxxx Xxxxxx, President Xxxx XxXxxxxx
Energy Purchase Agreement - Xxxxxx Xxxxxx Page 3 of 4
NECO
SOLAR GENERATOR EQUIPMENT LIST
EXHIBIT B
Rated Output: The NECO Solar Generator installed by NECO upon
Purchasers Site shall have a total rated energy
output capacity after the inverter(s) of no less
than 300 kiloWatts per hour, and able to produce
and deliver 30 therms per hour over a daily annual
average of six and one half (6.5) hours of
sunlight.
Number of Generators: One (1) rated at 300 kW output or more.
Size: 235 feet in diameter
Location: Above Purchasers buildings and open areas where
permitted by law.
Model Number: 300 kW NECO
Warrantee: Unconditional 100% parts and labor during the
initial two 5 year Terms after installation and
grid connection. In essence, NECO delivers hassle
free energy to Purchaser
Extended Warrantee: Unconditional 100% parts and labor, over
additional 20 years subject to Extended Warrantee
Contract which may be executed by NECO and
Purchaser at any time prior to the end of the
initial 5 year unconditional warrantee period.
NOTES:
1. Purchaser agrees to allow NECO, at its own discretion, to install additional
Solar Generator(s) and sub-systems to fulfill Purchasers additional energy
requirements, if any.
2. The NECO Solar Generator shall be manufactured, installed and connected to
the grid as swiftly as possible.
SUB-SYSTEMS TO INCLUDE:
3. One or more electric and one or more thermal meters for each Solar Generator.
4. Each Rankine Cycle Turbine to convert unused and stored thermal energy into
electricity includes one (1) heat exchanger, one (1) condenser and one or more
Rankine Cycle Turbine generators. The Rankine and related equipment may be
installed at a later date at the sole discretion and cost of NECO or its
assigns.
5. Each Solar Generator requires one or more inverters installed to convert
direct current (DC) into alternating current (AC) for use by end user and the
local utility grid system.
6. Grid connecting equipment shall be installed as required by the local public
utility and construction permitting agencies.
7. Telemetry: NECO and MEC may install certain telemetry equipment to gather
real time information which may include delivered electric and thermal output,
operating conditions including wind speed, rain or faulty equipment operation,
etc. Purchaser shall supply at no cost to Purchaser access to electric or
communication connection(s) if required by NECO or MEC.
8. Purchaser understands and NECO agrees to increase Solar Generator output
capacity if Purchasers energy requirements exceed the Solar Generator output.
NECO shall at its sole option elect to expand the Solar Generator output when
and if applicable at no cost to Purchaser. If such output increase should occur,
Purchaser agrees to (1) amend Purchasers Option to Purchase Agreement as
presented by NECO, (2) provide additional space for Solar Generator Installation
as and where applicable and (3) to execute forms required by NECO, the local
utility and permitting agencies.
AGREED BY:
PURCHASER NECO
By: ________________ By: ________________
Initials Initials
Energy Purchase Agreement - Xxxxxx Xxxxxx Page 4 of 4
