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EXHIBIT 10.11.1
This June 27, 1997 amendment ("Amendment") to the Steam and Electricity Service
Agreement between Cogenron Inc. (successor in interest to Northern Cogeneration
One Company) ("Company") and Union Carbide Corporation ("Customer") dated June
12, 1985, as amended ("Agreement") is effective the 31st day of December, 1996.
WHEREAS, Company and Customer desire to amend the Agreement;
NOW, THEREFORE, Company and Customer agree that the Agreement hereby
amended as follows:
1.
The following Articles related to the Secondary Steam Discount are
hereby Amended as follows:
1. Article 1.31 is hereby amended by (1) adding a new sentence between the
first and second sentences thereof which reads "Wheeling Costs shall be defined
as $12,600,000,00 for 1997, and escalated at 2% per year thereafter.", and (2)
adding the following language at the end of this Article "Company shall refund
to Customer 50% of the Maintenance Reserve balance as of June 30, 1999. In
computing this refund, the Maintenance Reserve balance shall be reduced by the
amount by which Company estimates payments will exceed accruals for the period
from July 1, 1999 through December 31, 1999, if applicable. After December 31,
1999, Company shall adjust the amount of the June 30, 1999 refund for any
variance between actual payments in excess of accruals between July 1, 1999 and
December 31, 1999 and the estimates used to calculate the June 30, 1999 refund.
2. Article 1.36 is hereby amended to read as follows:
1.36 PROJECT REVENUES: Base steam revenues at Ceiling Base Steam Price
plus revenues from Supplemental Steam and Incentive Steam, to Customer
and electric power/energy to Purchasing Utility. In determining revenues
from electric power/energy sales to a Purchasing Utility, the value used
for capacity revenue from such a Purchasing Utility shall be the Actual
Capacity Volume multiplied by twenty dollars and fifteen cents per
kilowatt/month ($20.15/Kw/Mo.) for 1997, twenty dollars and forty-two
cents per kilowatt/month ($20.42/Kw/Mo.) for 1998, and twenty-two
dollars and nineteen cents per kilowatt/month ($22.19/Kw/Mo.) for the
period from January 1, 1999 through June 30, 1999. Actual Capacity
Volume shall mean the Contract Level or Contract Capacity (410 MW) as
defined by the Cogenerated Electricity Sale and Purchase Agreement
between Enron Cogeneration One Company (formerly Northern Cogeneration
One Company) and Texas Utilities Electric Company, dated June 12, 1985,
as amended (the "PPA") less any adjustments made pursuant to such
Contract Level or Capacity with respect to certain minimum Capacity
Factor Performance Levels and performance tests as specified in the PPA.
2.
The following Articles related to the sale of electricity to Customer
are hereby deleted in their entirety:
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Article 2.2, including Articles 2.2.1 through and including 2.2.4;
Article 4.2, including Articles 4.2.1 through and including 4.2.3;
Article 5.2, including Articles 5.2.1 through and including 5.2.2;
Article 8.1.6; and Article 9.6.
3.
1. The following Articles related to the sale of electricity to Customer
are hereby amended as follows:
1. The second "WHEREAS" clause is hereby amended by dele phrase
"and electric service" therefrom.
2. The third "WHEREAS" clause is hereby amended by deleting the
"and electricity" therefrom.
3. Article 1.40 is hereby amended by deleting the phrase
"electricity" therefrom.
4. Article 2.0 is hereby amended by deleting the phrase "and
electric" from the first sentence thereof.
5. Article 2.3 is hereby amended to read as follows:
"2.3 Company shall not, without the prior written consent of
Customer, curtail or reduce steam availability to Customer below
six hundred thousand pounds per hour (600 Mlbs/hr) for the
purpose of increasing or maintaining electrical power/energy
sales to the Purchasing Utility. If such reductions or
curtailments are made without the consent of Customer, then
Company shall compensate Customer for the incremental cost or
penalties of producing or purchasing an equivalent amount of
said Service over what Customer would have paid Company for said
Service."
6. Article 2.5.3 is hereby amended by deleting therefrom the phrase
"and/or electrical energy".
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7. Article 2.5.4 is hereby amended by deleting therefrom the phrase
"and/or electric energy".
8. Article 4.1.3 is hereby amended by deleting the phrase "or
Customer" from the first sentence thereof.
9. Article 4.3 is hereby amended by amending the second sentence to
read as follows:
"For the purposes of an exchange of gas pursuant to Section
2.5.3, (i) Gas shall be deemed to have a value equal to the
Cogeneration Fuel Cost in effect at the time of actual delivery,
and (ii) the value of the steam shall be determined pursuant to
the provisions of Section 4.1 as though no exchange had
occurred."
10. Article 6.0 is hereby amended by deleting the phrase "and
electricity" from the second and fourth sentences thereof and by
deleting the phrase ", electricity" from the sixth and seventh sentences
thereof.
11. Article 8.1 is hereby amended by changing the caption to read
"Steam Metering."
12. Article 8.1.1 is hereby amended by deleting the phrase "and
electricity" therefrom.
13. Article 12.2(d) is hereby amended by deleting the phrase "and
electricity" from the last sentence thereof.
14. Article 12.2(e) is hereby amended by deleting the phrase "and
electric power" therefrom.
15. Article 13.0 is hereby amended by deleting the phrase "and
electricity" from the first and second sentences of the first paragraph
thereof.
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It is the intention of the Parties to amend the Agreement insofar and
only insofar as stated in the amendments contained herein and, subject to the
foregoing paragraphs, the Parties hereby affirm all other terms of the
Agreement.
IN WITNESS HEREOF, Company and Customer hereby execute this Amendment as
of the date first above written.
Company
COGENRON INC.
By:______________________________________
Title:
ATTEST:
By:_______________________________
Title:
Customer
UNION CARBIDE CORPORATION
By:______________________________________
Title:
ATTEST:
By:_______________________________
Title:
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AMENDMENT TO THE
STEAM AND ELECTRICITY AGREEMENT
BETWEEN
COGENRON INC. & UNION CARBIDE CORPORATION
DATED JUNE 12,1985
This August 19, 1997 amendment ("Amendment") to the Steam &
Electricity Service Agreement between Cogenron Inc. (successor in interest to
Northern Cogeneration One Company) ("Company") and Union Carbide Corporation
("Customer"), dated June 12, 1985, as amended ('Agreement' & is effective the
31st day of December, 1996.
WHEREAS, Company and Customer desire to amend the Agreement.
WHEREAS, Company and Customer entered into a June 27, 1997 amendment
to the Agreement. Company and Customer agree that the June 27, 1997 amendment
inadvertently deleted Article 4.2, Cost of Electric Service, from the Agreement.
It was not the Patties intention to delete Article 4.2 from the Agreement. The
purpose of this Amendment is, therefore, to reinstate Article 4.2 into the
Agreement and modify it as more fully described below.
NOW, THEREFORE, Company and Customer agree that the Agreement is
hereby amended as follows:
16. Article 4.2.1 is hereby amended to read as follows:
The monthly charge for electric Service shall consist of a
capacity charge.
17. Article 4.2.2 is hereby amended to read as follows:
The monthly capacity charge shall be determined by
multiplying the demand quantity of 20,000 kilowatts by the appropriate
rate hereunder:
CALENDAR $/KW - Month
YEAR
1997 8.447
1998 8.954
1999 9.492
18. Article 4.2.3 is deleted in its entirety.
It is the intention of the Parties to amend the Agreement insofar and
only insofar as stated in the amendments contained herein and, subject to the
foregoing paragraphs, the Parties hereby affirm all other terms of the
Agreement.
IN WITNESS HEREOF, Company and Customer hereby execute this Amendment
as of the date first above written.
Company
COGENRON INC.
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By:______________________________________
Title:
ATTEST:
By:_______________________________
Title:
Customer
UNION CARBIDE CORPORATION
By:______________________________________
Title:
ATTEST:
By:_______________________________
Title:
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STEAM AGREEMENT &
BETWEEN
COGENRON INC.
AND
UNION CARBIDE CORPORATION
JULY 1, 1997
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STEAM AGREEMENT
This Steam Agreement ("Agreement") is entered into as of the 1st day of July,
1997 by and between Cogenron Inc. ("Cogenron" or "Company") and Union Carbide
Corporation ("UCC" or "Customer").
WITNESSETH:
WHEREAS, Cogenron is a Delaware corporation and a wholly owned
subsidiary of Enron Cogeneration; Enron Cogeneration is a Delaware corporation
and a wholly owned subsidiary of Texas Cogeneration Company; and Texas
Cogeneration Company is a Delaware corporation, which is owned 50 percent by
Dominion Energy, Inc. and 50 percent by Calpine Corporation.
WHEREAS, Cogenron will operate and maintain facilities for the
purposes of producing steam near UCC's plant in Texas City, Texas; and
WHEREAS, UCC is the owner of a plant located in Texas City, Texas, and
desires to purchase steam from Cogenron; and
WHEREAS, Cogenron is willing to sell or exchange steam to UCC under
the terms and conditions set forth herein.
Article 1 - Definitions
1.1 UCC Land: The land owned by UCC adjacent to Cogenron's land in Texas
City, Texas, and which is described in Appendix I attached hereto,
except that Cogenron's land is expressly excluded from such
definition.
1.2 UCC's Plant: The plant, including equipment, rolling stock and all
personal property of any kind, owned and operated by, or with the
agreement of, UCC on UCC's land, being the property and equipment on
UCC's land side of the Point of Delivery, excluding the Retrofit
Equipment.
1.3 Cogenron's Land: The land leased by Cogenron adjacent to UCC's land in
Texas City, Texas, and which is described by metes and bounds in
Appendix I attached hereto.
1.4 Cogenron's Plant: The plant, including equipment, rolling stock and
all personal property of any kind, owned and operated by Cogenron on
Cogenron's land, being the property and equipment on Cogenron's land
side of the Point of Delivery up to and including the Point of
Delivery.
1.5 Retrofit Equipment: That equipment as set forth in Appendix 2 attached
owned, constructed and provided by Cogenron on UCC's land.
1.6 Gas Service: Gas that UCC elects to supply under the provisions of
Articles 4.3.2
Article 2 - Term
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2.1 This contract shall be in effect from July 1, 1999 until October 19,
2003. The contract term shall be automatically extended past October
19, 2003 until notice of termination is given by either party at least
twenty-four (24) months before the desired termination date. A notice
of termination must be in writing.
Article 3 - Service to be Provided by Cogenron
3.1 Upon request by UCC Cogenron will furnish UCC with 300,000 lbs/hour of
steam on a monthly average basis. Nevertheless, at no point shall
Cogenron be required to deliver more than 600,000 lbs/hour on an
instantaneous basis.
3.2 Cogenron will also provide UCC with an additional 300,000 lbs/hour of
steam for up to seven (7) times per year not to exceed a cumulative
total of eight hundred forty (840) hours in any calendar year. This
right as provided by this Article 3.2 to additional steam is
hereinafter referred to as a "Call Option." This Call Option is
intended to provide UCC with incremental steam quantities necessitated
by performance of maintenance at customer's facility and shall be
declared in advance of the event. For the period from July 1, 1999
through December 31, 1999, the Call Option may be exercised for up to
four (4) times not to exceed a cumulative total of four hundred
thirty-two (432) hours. For the period from January 1, 2003 through
October 19, 2003, the Call Option may be exercised for up to six (6)
times not to exceed a cumulative total of seven hundred twenty (720)
hours. If this Agreement has not been terminated by October 19, 2003
for the period from October 20, 2003 through the termination date of
the contract, the Call Option may be exercised on a pro rata basis
(rounded down) for up to seven (7) times per twelve (12) month period
not to exceed a cumulative total of 840 hours per twelve (12) month
period.
3.3 The quantities of steam described in articles 3.1 and 3.2 shall be
referred to as "Base Stearn Quantities."
3.4 Upon request by UCC Cogenron shall, if available, furnish UCC
incremental "Supplemental Steam Quantities" in excess of the Base
Stearn Quantities. It is within Cogenron's discretion as to whether
Supplemental Stearn Quantities are available.
3.5 During UCC's plant normal operation, UCC's designated employee shall
verbally notify Cogenron once at the beginning of each twelve (12)
hour work shift, or as otherwise mutually agreed, of the quantity of
steam Customer anticipates taking from Cogenron during said work
shift.
3.6 At the beginning of each calendar month, UCC shall provide Cogenron
with its reasonable best estimate of projected Call Option dates for
the succeeding twelve (12) months.
Article 4 - Price
4.1 Each month, UCC shall pay Cogenron (1) a Facilities Charge; and (2) a
Monthly Steam Charge. The Monthly Steam Charge, based on steam
deliveries, is comprised of a monthly charge for Base Stearn
Quantities and a monthly charge for Supplemental Stearn Quantities.
4.2 The Facilities Charge is & 100,000 per month.
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4.3 The monthly charge for Base Steam Quantities is comprised of a Fuel
Component and an Operations and Maintenance Component.
4.3.1 The Fuel Component is calculated by multiplying Cogenron's total
weighted average cost of gas ("Cogen Fuel Cost") for the applicable
month by a fixed "Equivalent Boiler Rate" of 1.2760 mBtu/lb. Cogen
Fuel Cost, expressed in $/mmBtu, shall be computed as the total
commodity cost of gas consumed by Cogenron's Texas City facilities
during the month, including any demand and scheduling or reservation
charges, divided by the total quantity of fuel consumed during the
applicable month. The Fuel Component will be adjusted monthly.
4.3.2 Cogenron shall present to UCC any proposed gas supply arrangement(s)
required to produce requested steam quantities under this Agreement.
Cogenron cannot enter into such a gas supply arrangement(s) until
written approval is given by UCC In the event UCC does not provide
written approval of a proposed gas supply arrangement(s) UCC will
provide the gas quantities necessary to provide the requested steam
quantities under this Agreement. UCC will be required to provide the
gas quantities necessary to produce the requested steam quantities
under this Agreement until such time as UCC directs Cogenron to secure
a third-party gas contract and UCC approves the proposed third-party
gas contract. Cogenron shall not terminate or amend such approved gas
supply arrangement(s) without prior written approval from UCC
4.3.3 Notwithstanding Article 4.3.2, upon delivery of notice by July 1,
1998, UCC may elect to supply such gas quantities necessary to produce
requested steam quantities for the term of this Agreement. Such gas
quantities shall meet the specifications as set forth in Appendix 3.
If UCC elects to provide gas quantities and fails to supply gas
quantities equal to the amount necessary to produce requested steam
quantities (calculated based on the Equivalent Boiler Rate), UCC shall
reimburse Cogenron for the replacement cost of natural gas, including
any imbalance premiums or other charges. Such reimbursement shall be
calculated by Cogenron in accordance with Article 4.6.
4.3.4 The Operations and Maintenance Component is $0.30/mlb of steam.
4.4 The monthly charge for Supplemental Steam Quantities is the monthly
charge for Base Steam- Quantities plus $0.50/mlb.
4.5 For billing purposes, monthly average steam deliveries (adjusted for
steam deliveries associated with the Call Option) will be used to
determine Base Steam Quantities and Supplemental Steam Quantities.
Nevertheless, should UCC request instantaneous steam deliveries in
excess of 600,000 lbs/hour and Cogenron elects to deliver such
requested quantities, such amounts in excess of 600,000 lbs/hour for
each hour shall be billed at the monthly charge for Supplemental
Stearn Quantities.
4.6 The regular billing period shall be the calendar month. All invoices
are due on presentation and payable within twenty (20) days of
receipt. Late payments by UCC shall bear interest at UCC's then
current short-term borrowing rate plus one percent (I%), not to exceed
the maximum interest rate permitted to be charged by applicable law.
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Article 5 - Point of Delivery
5.1 All steam under this contract will be delivered at the Point of
Delivery. The Point of Delivery are those points specified in Appendix
4. All right, title, and interest in and to any steam delivered under
this Agreement shall pass from Cogenron to UCC at the Point of
Delivery. Cogenron shall have the risk of loss of all steam to be
delivered under this Agreement up to and at the Point of Delivery. UCC
shall have the risk of loss of all steam delivered under this
Agreement from and after the Point of Delivery. Notwithstanding the
foregoing, if the loss of any steam is due to equipment, materials or
processes or any other matter under the control and maintenance, as
provided herein, of the party other than the one for which risk of
loss has been allocated as provided above, such party shall be liable
for the loss of any such steam. Liability for all damages caused by or
arising out of the steam to be delivered hereunder shall lie with the
party responsible for the risk of loss as specified in this article,
except to the extent the damages are caused by the negligence or
misconduct of the other party.
Article 6 - Article 6 & Services to Be Provided by UCC
6.1 UCC shall, without charge, provide to Cogenron: (1) facilities to
handle storm water runoff; (2) firewater; (3) wastewater treatment up
to an instantaneous flow of 3,000 gallons per minute; and (4) boiler
quality water in sufficient quantities to produce UCC's requested
steam takes, including an additional amount for necessary and
customary blowdown and losses, estimated at 1.5 percent. Such boiler
quality water shall meet the specifications defined in Appendix 5.
Should UCC fail to deliver boiler quality water in accordance with the
specifications detailed in Appendix 5, Cogenron shall make best
efforts to secure boiler quality water from third-party sources, upon
approval by UCC to produce requested steam deliveries. If Cogenron is
unsuccessful in securing boiler quality water from third-party sources
that is in accordance with the specifications detailed in Appendix 5,
Cogenron shall reduce such steam delivery to reflect actual receipt of
boiler quality water that is in accordance with the specifications
detailed in Appendix 5. UCC shall reimburse Cogenron for securing such
boiler quality water.
6.2 UCC shall provide an average of 2,500 gallons per minute and up to a
peak of 3,500 gallons per minute of river water to Cogenron, at UCC's
direct cost.
6.3 UCC shall make reasonable efforts to continue to provide to Cogenron
the services described in 6.1 and 6.2 after termination of this
Agreement at a price to Cogenron that compensates UCC for the direct
cost to provide such services, including a reasonable rate of return
on assets employed by UCC to provide said services.
Article 7 - Ground Lease Agreement
7.1 UCC and Cogenron (successor in interest to Northern Cogeneration One
Company) entered into a Ground Lease Agreement ("Lease"), dated
January 1, 1986. A copy of the Lease is attached as Appendix 7. UCC
and Cogenron agree to extend the Lease, and all rights and obligations
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contained therein, for five (5) years beyond the termination of this
Agreement. This includes, but is not limited to, Cogenron's right to
purchase the premises from UCC as set forth in the Lease.
Article 8 - Steam Metering
8.1 Cogenron shall measure the amount of steam delivered hereunder by a
mutually acceptable metering system at the Point of Delivery or at
other mutually acceptable locations as specified in Appendix 4.
8.2 Meters shall be installed, repaired and replaced at Cogenron's
expense. Meters will be tested and calibrated at Cogenron's expense in
accordance with Appendix 6 and with the schedule specified in Article
8.5. UCC may request meter tests at more frequent intervals. If such
requested test determines the meter to be within the accuracy
described herein, UCC will pay all reasonable costs for testing the
meter.
8.3 If at any time, any meter or other equipment constituting an official
meter station is found to be defective, such meter or equipment shall
be readjusted, repaired, or replaced without delay. If, upon any
calibration test, the inaccuracy of the meter or other equipment is
found to affect the measurement of the steam delivered hereunder in
excess of the specified amount when calculating such inaccuracy at the
average flowing conditions experienced during the period following the
previous calibration test, then an equitable adjustment and settlement
in the invoices for prior deliveries shall be promptly made by the
parties on the basis of best data available, using the first of the
following methods which is feasible:
8.3.1 By using the recording of a check meter if available and accurately
recording.
8.3.2 By correcting the error back to zero (0) after the percentage of error
is ascertained by calibration, test, or mathematical calculation for
the period of error, if known; or if unknown for a period extending
back one-half (1/2) of the time since the last calibration; or
8.3.3 If data cannot be obtained from the official or check meters, then
mutually agreeable data from Cogenron and UCC will be used to arrive
at the official meter reading. This data may be in the form of other
meters, production data, or previous and subsequent days' readings.
8.4 Cogenron shall provide notice of any meter test to UCC prior to making
each test of such meter. Such notice may be oral but shall
subsequently be confirmed in writing. UCC shall have the right to have
a representative present at such test to observe the same and any
meter adjustments found thereby to be necessary. UCC may provide at
its own expense (but shall not be obligated to do so) a check meter at
each delivery point and such check meter shall be used for measurement
purposes hereunder, subject to all provisions herein, during any
period when primary meter is inoperable or in such state of disrepair
that accurate measurements cannot be obtained therefrom.
8.5 The steam metering system shall have the capability of measuring the
hourly rat and quantity of steam delivered by Cogenron and received by
UCC and shall be maintained within an accuracy range of plus or minus
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one-and-a-half percent. Cogenron at its expense shall test the steam
metering system at least monthly.
Article 9 - Force Majeure
9.1 Neither Cogenron nor UCC shall be liable to the other for failure to
provide or take steam, or to perform any other obligation hereunder,
or for any damages resulting from such failure to the extent that such
failure or damage shall be the result of fire, strike, riot,
explosion, flood, accident, acts of God, the public enemy,
governmental laws, ordinances, rules or regulations (whether valid or
invalid), or without limitation by enumeration, any other acts or
circumstances beyond the reasonable control of either party,
preventing or prohibiting in whole or in part such provision, taking
or performance. Either party's failure to perform its obligations,
either in whole or in part, under the terms of this Agreement to the
extent resulting from a "year 2000 date change event" (i.e., due to
the impact on time and date codes and the affected party's internal
computer programs which impact is associated with the affected party's
operations following December 31, 1999) shall not constitute a Force
Majeure situation and is subject to any remedies that may be available
under this Agreement.
Article 10 - Status of Facility
10.1 UCC shall take delivery and consume sufficient steam quantities to
ensure that Cogenron's plant shall maintain its "Qualifying Facility"
status as defined in 18 CFR (Code of Federal Regulations) 292 as of
the date of the signing of this Agreement. UCC agrees that such steam
shall be thermally used as required by such regulations. In the event
that such rules and regulations governing "Qualifying Facilities"
change, the parties agree to enter into good faith negotiations with
an objective of' reaching a mutually satisfactory arrangement in order
to continue the qualifying status of Cogenron's Plant.
Article 11 - Governing Law
11.1 This Agreement shall be governed by law of the State of Texas.
Article 12 - Assignments
12.1 Except as otherwise provided in this Article, neither party shall
assign this Agreement, or any part thereof, without the prior consent
of the other party and any assignment in violation of this provision
shall be void. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their successors and permitted assigns.
12.2 Either party may assign its rights and obligations under this
Agreement, subject to the prior written approval of the other party
hereto, which approval shall not be unreasonably withheld, to any
subsequent owner of all or substantially all of the assets of UCC's
Plant, the Retrofit Equipment or Cogenron's Plant, as the case may be,
if such subsequent owner accepts the assignment of this Agreement and
assumes the obligations of the conveying party hereunder.
12.3 Either party shall have the right to assign this Agreement to a
subsidiary of affiliate of such party without the consent of the other
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party; provided that the assigning party shall not be released from
its obligation hereunder.
Article 13 - Entire Agreement
13.1 This Agreement, together with the attached Appendixes, contain the
entire understanding and Agreement between the parties. This Agreement
may not be amended or modified except by a written instrument,
designated on its face as an "Amendment" to this Agreement, signed by
all parties who have rights under this Agreement.
Article 14 - Confidentiality
14.1 The parties agree that the prices, terms and conditions contained in
this Agreement shall not be disclosed to third parties without the
written consent of all parties.
Article 15 - Steam Service Specifications
15.1 Cogenron shall render steam service to provide an adequate supply to
meet a pressure range of 5 85 psig to 610 psig at the Point of
Delivery and a temperature range of 725' F to 790' F and which meets
the following steam quality requirements: (1) Total Dissolved Solids:
Not more than 0.040 ppm; and (2) Oxygen: Nil.
15.2 Cogenron shall add neutralizing amines such as Nalco 1824 or
equivalent to the feedwater and/or steam to achieve a condensate pH of
8.0 to 9.0.
15.3 Cogenron agrees to provide periodic and as requested steam quality
monitoring records to UCC which may be used to confirm whether the
steam provided to UCC meets the specifications set forth in articles
15.1. and 15.2. Notwithstanding any other provision of this Agreement,
UCC shall not be obligated to accept delivery of steam that does not
meet the specifications of Articles 15.1 and 15.2.
15.4 Except for meeting the specifications contained in articles 15.1 and
15.2, Cogenron does not in any way warrant the fitness of the steam
supplied under this Agreement for the particular purpose for which UCC
intends or may intend to use the steam.
Article 16 - Limitation of Liability
16.1 In no event shall either party be liable to the other hereunder for
incidental, consequential, indirect or special damages, including loss
of profits, arising out of this Contract or its performance of or
failure to perform any obligation hereunder.
Article 17 - Notices
17.1 Any notices or communications permitted or required by this Agreement
shall be deemed properly made if delivered in person or sent by
certified United States Mail, return receipt requested, to the
respective parties at the following addresses:
Cogenron Inc. Union Carbide
Corporation
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Attn: President Attn: Mr. C. V. Jensen
Suite 2360 Supply Manager
700 Louisiana 39 Old Ridgebury Road,
Street El
Houston, Texas Danbury, CT 06817-0001
77002
Article 18 - Default of UCC
18.1 The following shall each constitute an Event of Default by UCC under
this Contract:
18.1.1 Failure of UCC to pay in full the charges billed to it by Cogenron for
steam and reimbursement for purchase of boiler quality water as
provided by Article 6.1 received pursuant to this Contract within a
period of ninety (90) days after the date of invoice receipt, unless
UCC shall in good faith be disputing the portion of such invoice that
has not been paid; or
18.1.2 If UCC fails to perform any of the other material provisions of this
Contract or otherwise endangers performance of the Contract in
accordance with its terms; and in either of these two circumstances
does not submit a proposed course of action within a period of thirty
(30) days to correct such failure after receipt of notice from
Cogenron specifying such failure, and thereafter diligently proceeds
to correct such failure; or
18.1.3 The occurrence of any of the following:
18.1.3.1 UCC's bankruptcy or insolvency or the initiation of any proceeding,
voluntary or involuntary, against UCC under the bankruptcy or
insolvency laws, or UCC's failure to meet its debts in the ordinary
course of business; provided, however, that there shall be no Event of
Default if, within thirty (30) days from the written receipt of notice
from Cogenron to terminate for such default, UCC as debtor in
possession or UCC's trustee, receiver, assignee or custodian,
whichever is obligee under this Contract, in writing affirms this
Contract and the Lease and demonstrates to Cogenron' s reasonable
satisfaction the ability to fulfill its or their obligations under
this Contract, and the Lease; or
18.1.3.2 UCC makes an assignment of all or a substantial part of UCC's Plant or
UCC's Land for the benefit of creditors.
18.2 Cogenron may, at its sole option, in the event of an occurrence of an
Event of Default as defined in Section 18. 1, exercise any or all of
the following remedies by written notice of default to UCC which shall
constitute the sole and exclusive remedies available to Cogenron in
connection with this Contract; and provided that Cogenron shall be
required to mitigate any damages that it incurs as a result of such
default, which mitigation obligation shall decrease the amount
otherwise payable by UCC under this Section 18.2:
18.2.1 Cogenron may terminate the whole or any part of this Contract. In the
event of such termination, Cogenron may discontinue steam
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deliveries, refuse to receive Gas Service and disconnect and/or remove
the Retrofit Equipment, after reasonable notice to UCC provided entry
on UCC's Land is done in accordance with UCC's safety, security, and
confidentiality requirements.
18.2.2 Cogenron may discontinue steam deliveries and refuse to receive Gas
Service.
18.2.3 Cogenron may disconnect and/or remove the Retrofit Equipment, after
reasonable notice to UCC provided entry on UCC's Land is done in
accordance with UCC's safety and security requirements.
18.3 In the event that UCC cures any such default, Cogenron shall resume
steam deliveries, receive Gas Service and continue its obligations
under this Contract for the duration thereof.
Article 19 - Default of Cogenron
19.1 The following shall each constitute an Event of Default by Cogenron
under this Contract:
19.1.1 Cogenron fails to perform any of the material provisions of this
Contract or otherwise endangers performances of the Contract in
accordance with its terms; and does not submit a proposed course of
action within a period of thirty (30) days to correct such failure
after failure of notice from UCC specifying such failure, and
thereafter diligently proceeds to correct such failure; or
19.1.2 The occurrence of any of the following:
19.1.2.1 Cogenron's bankruptcy or insolvency or the initiation of any
proceeding, voluntary or involuntary, against Cogenron. under the
bankruptcy or insolvency laws, or Cogenron's failure to meet its debts
in the ordinary course of business; provided, however, that there
shall be no Event of Default if, within thirty (30) days from the
written receipt of notice from UCC to terminate for such default,
Cogenron as debtor in possession or Cogenron's trustee, receiver,
assignee or custodian, whichever is obligee under this Contract, in
writing affirms this Contract, the Utility Service Agreement and the
Lease and demonstrates to UCC's reasonable satisfaction the ability to
fulfill its or their obligations under this Contract, the Utility
Service Agreement and the Lease.
19.1.2.2 Cogenron makes an assignment of all or a substantial part of
Cogenron's Plant or Cogenron's Land for the benefit of creditors.
19.2 UCC may, at its sole option, in the event of an occurrence of an Event
of Default as defined in Section 19.1, exercise any or all of the
following remedies by written notice of default to Cogenron, which
shall constitute the sole and exclusive remedies available to UCC in
connection with this Contract; and provided that UCC shall be required
to mitigate any damages that it incurs as a result of such default,
which mitigation obligation shall decrease the amount otherwise
payable by Cogenron under this Section 19.2:
19.2.1 UCC may terminate the whole or any part of this Contract. In the event
of such termination UCC may discontinue Gas Service, refuse to
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take steam deliveries and may require title to and possession of the
Retrofit Equipment to be transferred to UCC at no cost to UCC with no
liens or other security interests attached.
19.2.2 UCC may require Cogenron to promptly assign, in whole or in part, its
rights and obligations under each of its gas supply contracts that
provide for the supply of gas to Cogenron's Plant for a portion of Gas
equivalent on a BTU basis to the maximum steam taken provided under
this Contract; provided, however that in the event that the occurrence
of an Event of Default is caused by an insufficient gas supply, then
Cogenron will exert its best efforts to cause assignment of such gas
supply contracts to UCC.
19.3 In the event that Cogenron cures any such default, UCC shall resume
Gas Service, receive steam deliveries and continue under this Contract
for the duration thereof.
Article 20 - Access to UCC's Land
20.1 UCC shall provide as reasonably necessary (without cost to Cogenron
suitable space and access to Cogenron on UCC's Land for the
installation and inspection of the Retrofit Equipment at a location(s)
acceptable to Cogenron and UCC and as near the Point of Delivery as
practicable.
20.2 UCC shall also provide as reasonably necessary (without cost to
Cogenron suitable space and access to Cogenron on UCC's Land for the
installation, inspection, protection and maintenance of Cogenron's
meters at a location(s) acceptable to Cogenron and UCC and as near the
Point of Delivery as practicable. Where electricity or instrument air
is required for the operation of Cogenron's meters or meter regulating
valves, Cogenron shall furnish and install wiring, piping and
equipment necessary to provide such items. Notwithstanding any other
provision of this Contract, maintenance and repair of such wiring,
piping and equipment shall be Cogenron's obligation.
20.3 All UCC's security, safety, and confidentiality requirements shall be
followed, and Cogenron shall exercise reasonable care to not damage or
cause loss to UCC's Plant.
Article 21 - Access to Cogenron's Land
21.1 UCC shall have the right of access to Cogenron's Land, and on all
other premises with respect to which Cogenron has secured easements in
connection with this Contract, at all reasonable limes, for the
purpose of inspecting Cogenron's Plant and inspecting the Gas Service
lines, meters and equipment, removing its property, or any other
proper purpose; provided that any such inspection shall not relieve
Cogenron of its obligation to maintain Cogenron's Plant and the Gas
Service lines, meters and equipment as provided in this Contract. All
Cogenron's security and safety requirements shall be followed, and UCC
shall exercise reasonable care to not damage or cause loss to
Cogenron's Plant.
Article 22 - Indemnification
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22.1 It is further agreed that UCC and Cogenron as the case may be, shall
indemnify and hold harmless the other party, and its directors,
officers, employees, heirs, executors, successors and assigns from and
against any and all loss, cost, expense, damages, liability, demands,
claims, actions or causes of action (including the respective
employees and agents of Cogenron and UCC, and third parties), or
damage to or the loss of property (including but not limited to
reasonable attorney's fees) for injury or death of persons (including
the respective employees and agents of Cogenron and UCC, and third
parties) or damage to or the loss of property of customer, company,
and third parties) to the extent caused by, or arising out of, or
resulting from any act, error, omission or negligence (including the
failure to comply with any applicable regulations as required herein)
or vicarious or strict liability of the indemnifying party in
connection with the design, installation, operation or maintenance of
the property and equipment of the parties hereto as required herein,
the steam deliveries and/or Gas Service. It is thus intended that each
party hereto shall be liable, as between the parties hereto, in the
percentage that such party was the cause of any such loss, cost, etc.
This section is intended to satisfy the express negligence test as set
forth by the Texas Supreme Court. Therefore, the parties agree to
indemnify each other for the consequences of their own negligence.
IN WITNESS WHEREOF, this Agreement is signed and executed as of the
date and year written below.
COGENRON INC.
By: Earl Gore
Title: President & CEO
Date:
UNION CARBIDE CORPORATION
By:
Title:
Date:
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APPENDIX 3
GAS SPECIFICATIONS
The Gas delivered by UCC and received by Cogenron shall meet the
following quality specifications.
1) contain not more than one-fourth (1/4) grain of hydrogen
sulphide or mor ten (10) grains of sulphur per one hundred (100 cubic feet); and
2) have a gross heating value of not less than one thousand
(1,000) British Thermal Units (Btu) per cubic foot of Gas when saturated with
water vapor; and
3) have a temperature not greater than one hundred and ten
degrees Fahrenheit (I 10"F) or less than forty degrees Fahrenheit (40*F); and
4) contain not more than two percent (2%) by volume of carbon
dioxide or one percent (1%) by volume of oxygen;
5) be commercially free of all liquids, suspended matter, dust,
all gums and gum forming constituents, and other objectionable substances; and
6) contain not more than seven (7) pounds of water vapor per
one million cub of Gas; and
7) have a delivery pressure of 375-405 psig.
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APPENDIX 5
BOILER QUALITY WATER SPECIFICATIONS
The boiler quality water delivered by UCC and received by Cogenron
shall meet the following quality specifications:
Sodium LESS THAN 50 ppb
Chloride LESS THAN 20 ppb
Silica LESS THAN 20 ppb
Copper LESS THAN 5 ppb
Iron LESS THAN 10 ppb
Total Solids LESS THAN 1 ppb
Conductivity LESS THAN 15
micromhos
pH 7.0 to 9.0
Total Hydrocarbon LESS THAN 50 ppm
TOC LESS THAN 15 ppm
Hardness LESS THAN 10 ppb
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Graphic: Of A Tract of Land Out Of Kohfeldts and Addition To The City of Texas
City, Galveston County, TX
Surveyed October 7, 1984