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Steam Purchase Contract Dated November 30, 1984

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STEAM PURCHASE CONTRACT


This STEAM PURCHASE CONTRACT, dated as of November 30, 1984, by and between GUILFORD MILLS, INC., a corporation organized and existing under the laws of the State of Delaware ("Buyer"), and COGENTRIX LEASING CORPORATION, a corporation organized and existing under the laws of the State of North Carolina ("Cogentrix").


RECITALS:
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A. Buyer is a manufacturer of textile goods and owns and operates textile plants throughout North Carolina, including a textile plant located at North Carolina. Highway 11, Kenansville, North Carolina, known as the "Guilford East" plant ("Buyer's Plant").


B. Cogentrix is engaged in the business of building and operating cogeneration facilities which produce steam arid thermal energy for sale to industrial companies and electricity for sale to regional electric utilities.


C. Cogentrix wishes to provide Buyer with all steam and thermal energy required for use in the operation of Buyer's Plant and has entered into certain agreements for the construction, financing and management of a cogeneration plant (the "Cogeneration Facility") to be located adjacent to Buyer's Plant and has entered into a lease (the "Lease") with Buyer of certain real property adjacent to Buyer's Plant on which such Cogeneration Facility will be constructed.


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, Buyer and Cogentrix hereby agree as follows:


1. Construction of Cogeneration Facility. Cogentrix agrees to construct the Cogeneration Facility, to consist of two coal-fired boilers rated at approximately 157,500 pounds per hour and a condensing steam turbine generator rated at approximately 35,000 kilowatts, substantially in accordance with the plans and specifications issued for bids on March 12, 1984. The Cogeneration Facility will be located as shown on the plat attached hereto as Exhibit A. All costs associated with engineering, licensing, construction, and operation of the Cogeneration Facility will be the responsibility of Cogentrix. Cogentrix reserves the right to make changes in such plans and specifications, provided, however, Buyer shall have the right to approve any material changes to the plans and specifications affecting the exterior design of the Cogeneration Facility to insure that such design is aesthetically compatible with Buyer's Plant and the surrounding areas, any material changes to the pollution control equipment in the Cogeneration Facility, and. any changes that would materially adversely affect Cogentrix's ability to supply the steam and thermal fluid heating requirements of Buyer's Plant. The Buyer will cooperate with Cogentrix and take any actions reasonably requested by Cogentrix, at Cogentrix's expense, to enable Cogentrix to obtain all necessary licenses and permits to construct and operate the Cogeneration Facility and to permit the sale of steam and thermal energy under this Agreement.


2. Sale of Steam. Cogentrix agrees to sell (a) process steam, which may be high-pressure or low-pressure, to Buyer for use in Buyer's plant up to a maximum of 400,000,000 pounds of steam per annum and (b) the amount of steam required for use in the hot oil system in the Buyer's Plant up to a maximum 40,000,000 BTU's per hour. Cogentrix will deliver and Buyer will receive the process low-pressure steam at a volume up to 100,000 lbs. per hour, with a maximum peak delivery of up to 125,000 lbs. per hour for periods up to one hour. The steam for the hot oil system shall be of sufficient temperature to maintain a thermal oil temperature of 550(degree)F in the hot oil header in Buyer's Plant. All, steam shall be delivered with 1 ppm maximum total solids. If an amine system is used for corrosion control in the Cogentrix piping system, the conductivity of the steam delivered to the Buyer must not exceed 10 micromhos. If a nonamine system is used, the conductivity of delivered steam must not exceed 5 micramhos. Cogentrix agrees to sell to Buyer at its option high pressure steam at a volume of up to 30,000 pounds per hour at the boiler outlet station at conditions not to exceed 1500 pounds per square inch gauge ("p.s.i.g.") and 950(degree)F, as may be required by Buyer. Cogentrix will install and owe such meters as shall be necessary to measure and record the steam and BTU's delivered and received in accordance with the terms and conditions of this Agreement. Meters utilized for this purpose shall meet the specifications, and shall be subject to calibration and testing as set forth in Exhibit B hereto. Buyer agrees that beginning with the Initial Delivery Date as defined below, it will purchase and use or cause to be used (other than for generation of electricity) from Cogentrix during each Term Year (as defined in subparagraph 5(c) hereof) process steam representing a minimum of 5% of the "total energy output" of the Cogeneration Facility as defined by 18 C.F.R. ss. 292.202.


Buyer agrees that its obligation to purchase a minimum of 5% of the "total energy output" of the Cogeneration Facility under this Paragraph 2 is unconditional, and shall not be relieved by force majeure (as defined herein), transfer or closing of Buyer's Plant or otherwise, but the amounts payable hereunder shall be determined in accordance with Paragraph 5(e).


To ensure an available supply of steam to Buyer, Cogentrix agrees that in the event its operations are affected by a coal or transportation strike for a period of fourteen (14) or more consecutive days, Cogentrix shall curtail its operations and reduce production of steam and the generation of electricity for parties other than Buyer to the extent possible and for such periods of time in order to maintain a supply of coal that will enable Cogentrix to supply steam to Buyer, for not less than four (4) months.


3. Initial Deliverv Date. Cogentrix agrees to make steam available to Buyer in accordance with Paragraph 2 above, and Buyer agrees to accept delivery of steam under this Agreement, within five (5) business days after Cogentrix has notified Buyer that the Cogeneration Facility is commercially operational (such date of commencement of delivery the "Initial Delivery Date"). Buyer shall have no obligations hereunder unless the Initial Delivery Date occurs on or before two (2) years six (6) months from the date of execution of this Agreement, provided that the Initial Delivery Date shall be extended by the occurrence and the continuation of an event of force majeure as defined in the succeeding sentence. 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 strike, stoppage of labor, riot, fire, flood, ice, invasion, civil war, commotion, insurrection, military or usurped power, accident, order of any court or authority granted in any bona fide adverse legal proceedings or action, order of any civil authority, explosion, act of God or public enemies, or any other cause reasonably beyond the control of the parties (including Cogentrix's failure to obtain all necessary licenses and permits to construct and operate the Cogeneration Facility after diligent effort by Cogentrix), and not attributable to negligence. Notwithstanding the foregoing, in no event shall the Initial Delivery Date be extended beyond four (4) years from the date of this agreement, except by mutual agreement of the parties in writing. Upon the failure by Cogentrix to commence such delivery or failure of Buyer to receive such steam on or before the Initial Delivery Date (as extended pursuant to this Section 3),the non-breaching party, at its option and by written notice to the other party, may declare this Agreement, the Lease and any other contractual agreements or dealings between Cogentrix and the Buyer to be immediately terminated and cancelled.


4. Term; Breaches and Remedies. This Agreement shall run concurrently with the Lease executed by the parties this same date and shall terminate on the same date as that Lease, giving effect to any renewals thereof. Cogentrix, in addition to all other legal remedies available to it, may terminate this Agreement or suspend sales of steam and thermal energy hereunder (1) for Buyer's failure to pay any applicable bill within 20 days after written notice has been given that such bill is due and payable, (2) for fraudulent or unauthorized use of Cogentrix's meters or (3) for a breach by the Buyer of paragraph 10 hereunder. In addition, Cogentrix may suspend sales until any condition on Buyer's side of the point of interconnection with Buyer's Plant actually known by Cogentrix to be, or which . Cogentrix reasonably anticipates may be, dangerous to life or property has been remedied.


Failure of Cogentrix to terminate this Agreement or to suspend the sale of steam or thermal energy at any time after the occurrence of grounds therefor, or to resort to any other legal remedy or to exercise any one or more of such alternative remedies, shall not waive or in any manner affect Cogentrix's right later to resort to any one or more of such rights or remedies on account of any such ground then existing or which may subsequently occur. Any suspension of the sale of steam or the thermal energy by Cogentrix or termination of this Agreement upon any authorized grounds shall in no way operate to relieve Buyer of Buyer's liability to compensate Cogentrix for services and facilities previously supplied.


5. Purchase Price. The price Buyer shall pay Cogentrix for the purchase of steam and thermal energy shall be determined as follows:


(a) During the first five Term Years of this Agreement,

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