Exhibit 10.26.2
AMENDED AND RESTATED STEAM VENTURE AGREEMENT
This Amended and Restated Steam Venture Agreement is made
this 17th day of September, 1993 by, between and among
Philadelphia Thermal Energy Corporation ("PTEC"), Philadelphia
United Power Corporation, formerly known as United Thermal
Development Corporation ("PUPCO"), Adwin Equipment Company
("Adwin") and O'Brien Environmental Energy, Inc. ("O'Brien").
BACKGROUND TO RESTATEMENT
PTEC, PUPCO, Adwin, O'Brien and Grays Ferry Cogeneration
Partnership, a general partnership formed by Adwin and O'Brien
("Project Developer"), are parties to some or all of a series of
agreements, each dated November 11, 1991, as follows
(collectively, "Original Agreements"):
(1) Steam Venture Agreement by and among O'Brien, Adwin,
PUPCO and PTEC ("Original Venture Agreement");
(2) Site Lease by and between PTEC and Project Developer
("Original Lease");
(3) Steam Purchase Agreement by and among PTEC, Adwin,
O'Brien and Project Developer ("Original Purchase Agreement");
(4) Project Services and Development Agreement by and
between Project Developer and PUPCO ("Original Development
Agreement");
(5) Penn Selection Agreement by and among PTEC, PUPCO,
Adwin, O'Brien and Project Developer ("Original Penn Agreement");
and
(6) Dock Facilities by and among PTEC, Project Developer
and Philadelphia Thermal Development Corporation ("Original Dock
Agreement").
The Original Agreements set forth the terms and conditions
under which Adwin and O'Brien formed the Project Developer for
the purposes of constructing and owning a Cogeneration Facility
(as defined hereafter), which will be located on a portion of
PTEC's Schuylkill Station site. The Cogeneration Facility will
produce steam and electrical power, and will be operated and
maintained by PUPCO. Steam from the Cogeneration Facility will
be purchased by PTEC for use in PTEC's steam distribution system.
The parties have subsequently agreed to terminate the Original
Penn Agreement.
The Original Agreements contemplated that the Cogeneration
Facility would consist of a Frame 7 Gas Turbine, a Heat Recovery
Steam Generator, a steam turbine and a high pressure auxiliary
boiler with a minimum 500,000 lbs/hour of capacity (No. 6 oil
rating) which would be capable of burning both No. 6 oil and
natural gas ("Auxiliary Boiler"). The Original Agreements
further contemplated that the Auxiliary Boiler would, under
certain circumstances, be constructed on an accelerated basis
prior to the remainder of the equipment described above.
Adwin and O'Brien have now requested, and PTEC and PUPCO
have agreed, that the installation of the Cogeneration Facility
("Project") be restructured in certain ways, including the
development of the Project in two discrete phases, consisting of
(i) installation in Phase I of a high pressure auxiliary boiler
with a 40 megawatt steam turbine ("Phase I Project"), and (ii)
installation in Phase II of the Frame 7 Gas Turbine and related
equipment ("Phase II Project"). The parties intend that the
Phase I Project be completed on an expedited basis.
The parties have further agreed to amend certain of the
Original Agreements and to restate those Original Agreements, as
so amended, in their entirety, to reflect the changes to the
Project described above.
Now, therefore, intending to be legally bound hereby, the
parties hereby amend the Original Venture Agreement and restate
the Original Venture Agreement in its entirety, as follows:
BACKGROUND
PTEC is a public utility certificated by the Pennsylvania
Public Utility Commission ("PUC") to sell steam in certain
portions of a defined area of the City of Philadelphia consisting
of Center City and West Philadelphia ("Service Area").
Adwin is a wholly-owned subsidiary of the Eastern
Pennsylvania Development Company, which itself is a wholly-owned
subsidiary of the Philadelphia Electric Company ("PECO").
O'Brien is a developer, owner and operator of cogeneration,
alternative fuel and waste heat recovery projects that produce
steam and electric energy for sale to industrial and commercial
users and public utilities.
PTEC is the only certificated utility authorized to sell
steam to the public for compensation in PTEC's Service Area.
However, customers and potential customers located therein may,
individually, produce steam and other forms of energy for their
own use.
PTEC presently has a need to both upgrade and add to its
steam production facilities to continue generating steam in the
quantities and with the reliability needed to serve the public in
its Service Area.
PTEC, PUPCO, Adwin and O'Brien each believes that it can
participate in the steam market for the Service Area and realize
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significant efficiencies by the joint development of a facility
(the "Cogeneration Facility") which would (i) provide new
capacity and base steam load for PTEC, and (ii) provide steam
energy to PECO or other utility.
The parties believe that an agreement which provides, among
other things, for the construction and operation of a steam
production facility which would supply steam exclusively to PTEC
on a "take or pay with minimum takes" basis which PTEC could then
resell to customers within PTEC's Service Area would be in their
mutual best interests.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Project Description
A. O'Brien and Adwin acting together through a
Pennsylvania general partnership known as Grays Ferry
Cogeneration Partnership (the "Project Developer") will design,
construct, start-up, test and own the Cogeneration Facility (as
defined below) to be located at PTEC's existing Schuylkill
Station site (the "Project") or at another mutually acceptable
site owned by PTEC or an affiliate of PTEC.
B. Prior to the Project Developer entering into
contracts for the construction of the Project, PTEC will be
entitled to review and approve a list of prospective steam
generating equipment options and, if approval by an independent
engineer engaged by any lender to the Project is also required,
PTEC's review will be prior to such approval as well. PTEC will
not unreasonably withhold its approval of the Project Developer's
nominees or selections for these lists. Project Developer has
provided, and PTEC has approved, the list of prospective project
engineering and construction firms attached hereto as Exhibit F.
C. The Project will be constructed in two phases, based, inter
alia, on the availability of financing. Phase I of the Project,
("Phase I" or the "Phase I Project") will include the
installation of a high pressure auxiliary boiler with a 40
megawatt steam turbine. Phase II of the Project ("Phase II" or
the "Phase II Project") will include the installation of a Frame
7 Gas Turbine and a Heat Recovery Steam Generator (as used
herein, the term "Cogeneration Facility" shall refer to Phase I
of the Project and, if completed, Phase II of the Project).
Phase II of the Project will have the capacity to deliver to PTEC
at least 1,000,000 pounds per hour of steam in accordance with
the technical specifications of PTEC attached hereto as Exhibit
A. PUPCO and PTEC agree that the Project Developer may purchase
and utilize a used steam turbine that is approved in advance of
acquisition by PTEC. The Project will supply and PTEC shall be
obligated to purchase Distribution Sendout Steam (low pressure
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steam) as defined in Appendix 2 of the Amended Steam Purchase
Agreement (210-240 psi, 40 degrees F) from the Phase I Project
for the term of this Agreement, in the amounts and at the prices
specified herein, until the Phase II Project Acceptance Date.
All references in this Agreement and the other Amended Project
Agreements to the purchase of "steam" prior to the Phase II
Project Acceptance Date shall refer to Distribution Sendout
Steam.
2. Project Schedule; Amended Project Services and
Development Agreement
A. The target date for completion of the
construction, testing and make ready for the Phase II Project
("Phase II Project Acceptance Date") shall be thirty (30) months
from the date Phase II Project financing is closed.
B. The Project Developer has delivered to PUPCO, and
PUPCO has approved, the following: (i) a list of major pieces of
equipment to be purchased for Phase I and Phase II of the Project
and (ii) a schematic and simplified single line diagram showing
how the equipment is to be arranged. Before financing closing
for Phase I, Project Developer will deliver to PUPCO the
following: (i) the control systems for the equipment, (ii) the
mechanical and electrical interconnection points, and (iii) the
vendor warranties and guarantees that are standard and which will
be requested in soliciting equipment bids, as further described
in the Project Services Agreement (as defined below).
C. The parties shall hereafter promptly negotiate the
Availability Standards to be attached to the Amended Project
Services and Development Agreement among PTEC, PUPCO and the
Project Developer of even date herewith attached hereto as
Exhibit B ("Amended Project Services Agreement"), pursuant to
which the Project Developer will, inter alia, retain PUPCO to
operate the Cogeneration Facility and agree to make certain
payments to PUPCO.
D. Phase I will be constructed by Project Developer
on an accelerated basis.
E. The parties hereto shall diligently expedite and
assist Project contractors in the completion and submission of
all applications for Permits (as defined in Section 7(D))
necessary for the construction of the Project ("Construction
Permits").
3. Amended Site Lease
A. Schuylkill Station, which is PTEC's main plant
within the existing steam system owned and operated by PTEC, is
situated on real estate located at 0000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx ("Land") which is owned by PECO and
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leased to PTEC under a long-term lease which may impose upon PTEC
at the end of the term (either 50 or 100 years) the obligation to
purchase the property at the current market value (the "PECO
Lease"). Schuylkill Station was used by PECO prior to 1987 to
generate both electric energy and steam energy; now Schuylkill
Station has been divided into two sections, and, with some
exceptions, PTEC owns or leases and operates the sections of the
buildings located on the Land (the "Buildings") which relate to
steam production.
B. Under the terms of the PECO Lease, certain of the
modifications to be made by PTEC to the Schuylkill Station is
connection with this Agreement will require the prior consent of
PECO.
C. The lease for the site from PTEC to the Project
shall otherwise be on the terms and conditions set forth in
Exhibit C attached hereto ("Amended Site Lease").
4. Sales of Steam by the Project
A. During the term of this Agreement and following
Phase I Project Acceptance (as defined in the Amended Project
Services Agreement), the Project will sell all steam produced by
the Project (net of the Project's requirements) to PTEC, and
PTEC will purchase all of its steam requirements from the
Project, except that PTEC shall have the right to access
alternate sources of steam when necessary (i) to operate boilers
at other PTEC facilities to meet minimum loading requirements for
maintaining adequate pressure and to provide system reliability,
or (ii) to satisfy PTEC steam send out requirements above and
beyond the capabilities of the Project.
B. On an annual basis, PTEC will pay for the greater
of (i) the amount of steam actually accepted by PTEC, or (ii) as
follows:
(x) after the Phase I Project Acceptance Date (as
defined in the Amended Project Services Agreement) and before the
Phase II Project Acceptance Date, 3.0 million Mlbs., subject to
adjustment as set forth in the Amended Project Services
Agreements and the Amended Steam Purchase Agreement; and
(y) after the Phase II Project Acceptance Date, 3.3
million Mlbs., subject to adjustment as set forth in the Amended
Project Services Agreements and the Amended Steam Purchase
Agreement.
C. The sale of steam by the Project shall otherwise be on
the terms and conditions set forth in Exhibit D attached hereto
("Amended Steam Purchase Agreement").
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5. Term
A. The term of this Agreement and of the Amended Site
Lease, Amended Project Services Agreement and Amended Steam
Purchase Agreement (collectively, "Amended Project Agreements")
will be for a minimum term consisting of (i) the period
commencing on the date hereof and ending on t he date ("Full
Operation Date") which will be the Phase II Project Acceptance
Date unless construction of the Phase II Project has not been
initiated (as described in Section 9 below) within one (1) year
after the Phase I Acceptance Date, in which event the Full
Operation Date will be the Phase I Project Acceptance Date, plus
(ii) twenty-five (25) years commencing on the Full Operation Date
("Initial Term"), with the Project Developer having the option to
extend the term of the Amended Steam Purchase Agreement, the
Amended Project Services Agreement and the Amended Site Lease for
an additional term of ten (10) years, such option to be exercised
no earlier than the twentieth anniversary, and no later than the
twenty-third anniversary, of the Full Operation Date. If the
Project Developer does not elect to extend for an additional
term, then PUPCO shall have the option to purchase the Project
pursuant to Section 5C; if PUPCO does not so elect by notice
given no later than eighteen (18) months before the expiration of
the Initial Term, Project Developer shall have the option to
extend the term of the Project Documents for an additional term
of fifteen (15) years. If Project Developer does not so elect
by notice given no later than twelve (12) months before the
expiration of the Initial Term, this Agreement and all the
Amended Project Documents shall terminate at the expiration of
the Initial Term.
B. Extension of the term of this Agreement and the
Amended Project Agreements beyond the Initial Term shall be
permitted only if agreement is reached among the parties to
adjust the steam price charged to PTEC to be equal to or less
than PTEC's avoided cost of steam (including the unamortized
capital cost of the Project's steam generating equipment, fuel,
water, chemicals, and any other appropriate costs) as of the
commencement of each extended term.
C. If PUPCO elects to purchase the Project pursuant
to Section 5A, PUPCO shall purchase the Project pursuant to
Section 19.3 of the Amended Project Services Agreement.
6. Access
During the term of the Amended Project Agreements,
including any extensions thereof, and for a period of three (3)
years thereafter, the Project Developer, upon reasonable notice,
shall grant PTEC or its auditors access to such of the Project's
books and records and audit workpapers as shall in the reasonable
opinion of TEC or its auditors be necessary for them to prepare
and support filings which PTEC may be obligated to make with
regulatory agencies, including but not limited to the PUC, with
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respect to PTEC's ownership interest in, operation of, or
contractual agreements with, the Project.
7. Fees
A. O'Brien and Adwin shall each have the right to
recover their actual development expenses incurred with respect
to the Project and to earn a development fee ("Development Fee")
equal to three percent (3%) of total Project costs, except that
the interest costs during construction shall not exceed $9
million for the purpose of calculating the Development Fee. The
$9 million interest allowance shall be allocated pro rata between
the financing for the Phase I Project and the financing for the
Phase II Project, based on the relative amount of each financing.
Notwithstanding the preceding sentence, however, the maximum
allowable interest for the financing of the Phase I Project shall
not exceed nine percent (9%) of the debt incurred for the Phase I
Project. Since PUPCO will receive a services and deferred
development fee, PUPCO and its affiliates shall have no right or
interest in the Development Fee.
X. X'Xxxxx and Xxxxx have heretofore paid $150,000 to
PUPCO for PUPCO's development services in connection with the
Cogeneration Facility.
X. X'Xxxxx and Adwin have paid to PUPCO an additional
sum of $150,000 upon the execution of the Original Agreement.
X. X'Xxxxx and Xxxxx will cause the Project Developer
to pay to PUPCO the following payments:
(i) beginning on December 17, 1992, the sum of
$150,000, and each quarter thereafter (i.e., the 17th day of each
subsequent March, June, September and December), the sum of
$150,000, pro-rated monthly until the Phase I Project Acceptance
Date;
(ii) after the Phase I Project Acceptance Date,
beginning on the Phase II Project Acceptance Date, annual
payments equal to the sum of (1) $1,200,000 plus (2) the product
of (x) $2,000 times (y) the number of full or partial calendar
months between the Phase I Project Acceptance Date and the Phase
II Project Acceptance Date ("Phase II Fee"), subject to the
installments, for so long as (1) neither PUPCO or PTEC are
currently in default under any of the terms and conditions of any
amended Project Agreement to which they are a party and (2) Penn
remains a PTEC steam system customer and (3) the minimum take
provisions in the Amended Steam Purchase Agreement have remained
unadjusted. This payment will be divided as follows: one-third
of the Phase II Fee shall be a fixed annual payment and two-
thirds of the Phase II Fee shall be escalated at three percent
(3%) per year.
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E. If, prior to the date any party terminates the
Amended Project Agreements in accordance with Section 9, any of
the parties or their affiliates seeks to participate in or
facilitate any project which will primarily serve, the energy
needs of Penn, that party will make a binding offer to the other
parties to this Agreement to participate on an equal basis in
such project. For purposes of this section, PUPCO AND PTEC shall
be considered one party. Nothing in this section shall be deemed
to refer to contractual arrangements between Penn and
Philadelphia Electric Company or PTEC which would be required to
be entered into by law, and this Section E will not apply to the
execution by Penn and PTEC of a long-term steam purchase
agreement under PTEC's Large Volume Rider.
X. X'Xxxxx and Adwin, jointly, will pay to PUPCO the
sum of (i) $550,000 at financial closing for the construction of
Phase I of the Project, and (ii) $50,000 at financial closing for
the construction of Phase II of the Project.
8. Confidentiality
O'Brien, Adwin, PUPCO, and PTEC each agree that the
technical and financial information and materials which may be
disclosed to the other party during the course of negotiations
shall be treated by the receiving party as confidential.
9. Termination
If construction of the Phase II Project has not been
initiated (i) within six (6) months after the date PECO, or
another utility, becomes unconditionally contractually bound to
pay the equivalent of $65 per kilowatt per year ($65/kw/year) for
a minimum of twenty (20) years, for a minimum of 120 megawatts of
capacity ("Capacity Contract"), or (ii) in any event within two
(2) years after the Phase I Project Acceptance Date, either party
may terminate Phase II of the Project, and any party hereto shall
have the right, by written notice to the other parties, to
terminate all obligations contained in any of the Amended Project
Agreements regarding Phase II, including, without limitation, any
obligations to develop, construct, operate or purchase steam from
Phase II, and, at PUPCO's option and request, Project Developer
will use its best efforts to have all agreements with PECO and
other agreements and permits affecting the Phase II Project
assigned to PUPCO (upon which assignment Project Developer,
O'Brien and Adwin shall each be released from any further
liability hereunder). In the event that the Phase II Project is
terminated as set forth above and the Project Developer is
unable, despite its best efforts, to obtain PECO's consent to the
assignments required in this Xxxxxxx 0, X'Xxxxx, Xxxxx and
Project Developer shall be released from any further liability
with respect to the Phase II Project. For purposes of this
Agreement, construction will only be deemed to have been
initiated if (i) a building permit for Phase II has been obtained
by the Project Developer, (ii) a general construction contract
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has been executed for such construction, and (iii) work has
started on the site for Phase II.
10. Withdrawal Penalty
If any party withdraws from the negotiations relating
to the Project or from the Amended Project Agreements at any time
prior to the Phase I Project Acceptance Date, the remaining
parties will receive the withdrawing party's equity interest on a
pro-rata basis and will assume all responsibilities and benefits
flowing from such equity interest. The withdrawing party shall
pay all direct out-of-pocket costs, up to an aggregate of $50,000
to all other parties together, incurred by the remaining parties
and the Project as a result of such withdrawal. For purposes of
this Paragraph 10, PTEC shall be deemed not to be a party.
11. Miscellaneous
A. Amendments. No change, amendment of
modification of this Agreement shall be valid or binding upon the
parties unless made in a writing signed by all parties.
B. Terminology. All personal pronouns used in
this Agreement, whether used in the masculine, feminine or neuter
gender, shall include all other genders; the singular shall
include the plural, and vice versa. Titles of Sections are for
convenience only, and neither limit nor amplify the provisions of
this Agreement. This Agreement shall always be deemed to mean
this Agreement and the Exhibits and Schedules hereto.
C. Notices. Any notice, demand, offer, consent,
report, approval or other written instrument required or
permitted to be given pursuant to this Agreement shall be in
writing signed by the party giving such notice and shall be hand
delivered, or sent by overnight delivery or by certified mail to
the other parties at the following addresses and shall be
effective upon receipt.
PTEC: President
Philadelphia Thermal Energy
Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
PUPCO: President
Philadelphia United Power
Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
O'Brien: Vice President
O'Brien Environmental Energy, Inc.
000 X. 0xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
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Adwin: Vice President
Adwin Equipment Company
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Each party shall have the right to change the place to which
notice shall be sent or delivered by notice to the other parties.
The effective date of any notice issued pursuant to this
Agreement shall be as of the addressee's receipt of such notice.
D. Severability. If any provision of this
Agreement or the application thereof to any persons or
circumstances shall be invalid or unenforceable to any extent,
(a) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected
thereby and (b) each such provision shall be enforced to the
greatest extent permitted by law.
E. Assignment. No party shall either assign or
otherwise transfer this Agreement (or any right or obligation
contained herein) without the prior written consent of the other
parties, and any assignment, subletting or other transfer without
such consent shall be void. Notwithstanding the foregoing, Adwin
and O'Brien may assign this Agreement as security for or as
required by any lender of funds to the Project Developer.
F. No Waiver. No consent or waiver, express or
implied, by a party to or of any breach or default by the party
in the performance by it of any of its obligations hereunder
shall be deemed or construed to be a consent or waiver to or of
any other breach or default in the performance by such party of
the same or any other obligation of such party hereunder.
G. Applicable Law. This Agreement shall be
governed by the laws of the Commonwealth of Pennsylvania,
exclusive of conflicts of laws provisions.
H. Successors and Assigns. Subject to the
restrictions on transfers set forth herein, this Agreement shall
inure to the benefit of, be binding upon and be enforceable by
and against the parties and their respective successors and
assigns.
I. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute
but one agreement. It shall not be necessary that any
counterpart be signed by all parties so long as each party shall
have executed two counterparts.
J. Proprietary Information. If any party
transmits to any other party information (including, without
limitation, drawings, technology, reports and designs) which the
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disclosing party designated in writing as "proprietary
information", the receiving party shall receive and hold such
proprietary information in confidence, shall use it exclusively
in connection with the Project (including necessary disclosures
on a proprietary basis to others directly engaged in the
operation or financing of the Project such as consultants,
trustees and lenders engaged for that purpose provided that such
third party shall consent in writing to be bound by the provision
of this Section 11.J, but in any event avoiding any disclosures
to other Project suppliers) and shall not publish or otherwise
disclose it to others. Notwithstanding the foregoing
restrictions, any party will have the right to disclose
proprietary information furnished hereunder to a governmental
authority to the extent required by such governmental authority;
provided, however, that if such party undertakes to so disclose
such proprietary information, it agrees to give the other parties
advance written notice of such undertaking, to make reasonable
efforts to secure confidential treatment of such proprietary
information by the governmental authority in question and to
permit such other parties to participate in discussions with the
governmental authority with regard to confidential treatment. In
the event that efforts to secure confidential treatment are
unsuccessful, the owner of the proprietary information shall have
the right, if legally permissible, to revise such proprietary
information to make it nonproprietary or to minimize the loss of
its proprietary value.
K. Assignment of electric Purchase Agreement.
(i) Upon the occurrence of a Phase I Project
Termination Event (as defined below), Project Developer shall
assign to PUPCO (subject to PECO's prior consent) Project
Developer's interest in (a) the Electric Output Purchase
Agreement dated July 28, 1992 ("Electric Purchase Agreement") and
(b) and capacity related addendum to the Electric Purchase
Agreement or other agreement that Project Developer executes with
PECO or any other utility, and (c) the "Permit to Construct,
Install and Operate the Cogeneration Process" granted by the City
of Philadelphia Department of Public Health dated November 4,
1992.
(ii) A Phase I Project Termination Event
shall occur hereunder upon the earlier to occur of (a)
termination of the Project by O'Brien, Adwin or Project Developer
for any reason, or (b) failure by Project Developer to obtain
construction financing for the Phase I Project, as evidenced by a
binding executed commitment letter from a reputable lender
subject only to conditions accepted in writing by Project
Developer, consistent with the Amended Project Documents and not
requiring any amendment to the price of steam payable by PTEC or
imposing any additional financial obligations on PTEC ("Binding
Commitment"), by the later to occur of the following ("Commitment
Deadline"): (a) January 1, 1994 or (b) ninety (90) days after
the date on which the Pennsylvania Public Utility Commission
approves
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the Amended Project Agreements, provided that Project Developer
may extend the Commitment Deadline for an additional three months
by making payments to PUPCO on the first day of each extension
month in the amount of $50,000 for each full or partial month
extended.
(iii) In the event that the Project
Developer has not executed a noncontingent contract to receive
the Contract Capacity as defined in Section 9 above for the Phase
II portion of the Project by January 1, 1995, or the Project
Developer terminates Phase II for any reason, PUPCO may terminate
the Phase II Project and Project Developer shall assign to PUPCO
(subject to PECO's consent) Project Developer's interest in (a)
110 megawatts of the 150 megawatt Electric Purchase Agreement and
(b) any remaining capacity in excess of 31.5 megawatts available
under any capacity-related addendum to the Electric Purchase
Agreement or other or agreement Project Developer executes.
O'Brien and Adwin may extend the January 1, 1995 date an
additional three months by making payments to PUPCO on the first
day of each extension month in the amount of $50,000 for each
full or partial month extended.
L. Reimbursement of Expenses. O'Brien and Adwin
will reimburse PUPCO and PTEC for all approved out of pocket
costs associated with the change in Project configuration
evidenced by the Amended Project Agreements up to a maximum
amount of $75,000 for legal, environmental and engineering costs.
Such payments will be made on a quarterly basis with the first
payment on March 23, 1993. O'Brien and Adwin agree to negotiate
an increased maximum amount if the $75,000 is exceeded.
M. Conversion of PTEC Boiler. If necessary to
obtain an AMS permit for the Project, Adwin and O'Brien will pay
all of the cost to convert PTEC's Boiler No. 26 to a low NOx dual
fuel (natural gas and No. 6 oil). This obligation of Adwin and
O'Brien is limited to the first $500,000 expended for this
conversion plus 50% of any costs in excess of the $500,000.
O'Brien and Adwin are entitled to 50% of any environmental
allowances received by PTEC for emission offsets associated with
this conversion, up to a maximum amount equal to the amount in
excess of $500,000 paid by O'Brien and Adwin for the conversion.
Project Developer will use its best efforts to ensure that the
air permit will be assignable to PTEC in whole or part consistent
with Section 11.K.
N. PECO Consent. This Amended Steam Venture
Agreement is contingent upon Project Developer using its best
efforts, as provided in Section 9 above, to obtain on or before
January 1, 1994 PECO's agreement to allow PTEC to utilize the
Schuylkill site to construct a cogeneration project (Phase I and
Phase II) and to utilize any approved interconnection agreement
obtained by the Project Developer if (a) either subsection of
Section 11.K is effected or (b) Phase II of the Project is
terminated. The Project Developer will provide to PTEC all
design,
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engineering and any other work products associated with the
electric interconnection between the cogeneration project Phase I
and Phase II) and the PECO interconnection point/s if (a) either
subsection of Section 11.K is effected or (b) Phase II of the
Project is terminated. The Project Developer will allow PTEC to
utilize these work products for any purpose subject only to
restrictions which may be imposed by PECO.
O. Release. Each of the parties hereto, for
themselves, their successors and assigns, hereby remises,
releases and forever discharges the other Parties and their
respective successors and assigns of and from all, and all manner
of, actions and causes of actions, suits, debts, dues, accounts,
bonds, covenants, contracts, agreements, judgments, claims and
demands whatsoever in law or equity (collectively, "Claims") by
reason of any cause, matter or thing whatsoever, from the
beginning of the world until the date of this Agreement. The
parties hereby acknowledge that, except as expressly set forth
herein, (i) no party has any Claim of any nature or sort against
any other party as of the date hereof, (ii) there are no defaults
of any kind by any party under the Original Agreements, and (iii)
each party expressly waives the right to initiate or pursue any
action of any kind against any other party based on any act or
omission occurring prior to the date hereof. Each party shall
indemnify, defend and hold the other parties harmless from any
violation of this Section 11.O by such party.
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IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their duly authorized representatives on the
date first above written.
PHILADELPHIA THERMAL ENERGY CORPORATION
By: /s/ X. X. Xxxxx
PHILADELPHIA UNITED POWER CORPORATION
By: /s/ X. X. Xxxxx
ADWIN EQUIPMENT COMPANY
By: /s/ Xxxxxx X. Xxxxx
O'BRIEN ENVIRONMENTAL ENERGY, INC.
By: /s/ Xxxxxx X. Xxxxx
14
LIST OF SCHEDULES AND EXHIBITS
EXHIBIT A Steam Purity Requirements
EXHIBIT B Amended Project Services Agreement
EXHIBIT C Amended Site Lease
EXHIBIT D Amended Steam Purchase Agreement
EXHIBIT E List of Project Engineering and
Construction Firms
15
EXHIBIT E
ENGINEERING AND CONSTRUCTION FIRMS
Raytheon Corp. (United Engineers)
Dick Corp. (Xxxxxxx Commonwealth)
Xxxxx Construction (Black & Veetch)
16
EXHIBIT A to STEAM VENTURE AGREEMENT
STEAM PURITY REQUIREMENTS
EXHIBIT "A"
Steam Purity Requirement
High Pressure Steam
Pressure 1300 max - 1200 psi min
Temperature 925 max - 900 min
Sodium < 15 ppb
Chloride < 10 ppb
Silica < 15 ppb
Cation-Conductivity < 0.35 umhos
Distribution Sendout Steam
Pressure 240 psi max - 210 psi min
Temperature Steam temperature shall be
40 F above sanitation
temperature but not higher than
450 F.
M Allcalinity < 1.0 ppm
Free CO2 < 1.5 ppm
TDS < 0.2 ppm
All chemicals carried over into the distribution steam system
must be suitable for use in the preparation of food,
humidification and sterilization of surgical instruments as
specified by the FDA and USDA
All desuperheating spray water must meet the same criteria
established for boiler feed water.
