EXHIBIT 10.65
STEAM SALES AGREEMENT
between
PANDA-BRANDYWINE, L.P.
a Delaware limited partnership
and
BRANDYWINE WATER COMPANY a Delaware
corporation
March 30, 1995
STEAM SALES AGREEMENT
This STEAM SALES AGREEMENT (this "Agreement")
is entered into as of March 30, 1995 by and between
PANDABRANDYWINE, L.P., a Delaware limited partnership
("Supplier") and BRANDYWINE WATER COMPANY, a Delaware
corporation ("Purchaser", and together with Supplier, the
"Parties").
RECITALS
WHEREAS, Supplier is in the business of
developing and operating a cogeneration facility for the
production of electric and thermal energy; and
WHEREAS, Purchaser is in the business of
producing distilled water products using thermal energy of
the type produced by Supplier; and
WHEREAS, Supplier wishes to sell thermal energy
to Purchaser and Purchaser wishes to buy thermal energy
from Supplier.
NOW, THEREFORE, in consideration of the
foregoing and of the premises hereinafter set forth, the
Parties agree as follows:
The following Exhibits are attached to this
Agreement and incorporated herein by reference as though
fully set forth herein:
(a) Exhibit A, generally describing those steam
lines, condensate lines and other interconnection devices
located on the Facility Site and located between the
Facility Site and the Interconnection Points and the
Distilled Water Facility, which lines and other devices
may be necessary to interconnect any steam, condensate, or
water, Cooling Water, Feed Water, waste water disposal and
Distilled Water Facility Premises runoff with the
Distilled Water Facility.
(b) Exhibit B, which is the proposed sublease
(the "Lease") between Supplier and Purchaser providing for
the sublease of the Distilled Water Facility Premises, the
Distilled Water Facility and all related equipment to
Purchaser, which sublease will be entered into on the date
on which the Facility Lease becomes effective.
ARTICLE I
DEFINITIONS
1.01 All capitalized terms not otherwise defined
herein shall have the meanings ascribed in that certain
Power Purchase Agreement between Potomac Electric Power
Company, a District of Columbia and Virginia corporation
("Utility"), and Supplier, dated August 9, 1991, as
amended, and the following terms shall have the following
definitions:
1.02 Cooling Water means the water delivered to
the Interconnection Points by Supplier for the
condensation of Purchaser's steam.
1.03 Distilled Water Facility means that certain
distilled water facility to be constructed by Supplier and
leased by Purchaser on the Distilled Water Facility
Premises.
1.04 Distilled Water Facility EPC Contractor means
Raytheon Engineers & Constructors, Inc., a Delaware
corporation or any other EPC contractor responsible for
the design, engineering, procurement and construction of
the Distilled Water Facility.
1.05 Distilled Water Facility Premises means the
land to be leased to Purchaser by Supplier under the
Lease.
1.06 Facility means that certain 230 megawatt gas-
fired cogeneration facility to be constructed by Supplier
and to be located on the Facility Site in Brandywine,
Maryland.
1.07 Facility Site means the land upon which the
Facility is to be located described in the Facility Lease
(excluding the Distilled Water Facility Premises).
1.08 Facility Lease means the Facility Lease intended to
be entered into between the Supplier, as Lessee, and the
Lender, as Lessor, covering the Facility and the Distilled
Water Facility.
1.09 Feed Water means that certain water delivered
to the Interconnection Points by Supplier for use as feed
stock for distilled water.
1.10 Heat Recovery Steam Generator means the
equipment used to convert the thermal energy emanating
from the Facility's gas turbine generator(s) into steam.
1.11 Interconnection Points means the points set
forth in Exhibit A where Thermal Energy, condensate,
water, Cooling Water, Feed Water and waste water disposal
lines are interconnected between the Distilled Water
Facility and the Facility.
1.12 Lender shall mean persons providing
construction or permanent financing to the Facility and
Distilled Water Facility in the case of loan arrangements
or the person acting as "lessor" in the case of a lease or
leveraged lease financing.
1.13 Metering Devices shall have the meaning set
forth in Section 13.01 of this Agreement.
1.14 Power Contract or PEPCO Contract means the
Power Purchase Agreement between Utility and Supplier,
dated August 9, 1991, as the same has been or may from
time to time be further amended, modified, or
supplemented.
1.15 Stipulated Interest Rate means the lesser of
(a) interest at the annual rate quoted from time to time
by Citibank, N.A., New York, N.Y., as its base rate plus
one percent (1%) or (b) the maximum rate permitted by
applicable law for loans to corporate borrowers.
1.16 Thermal Energy means saturated steam generated
by Supplier and delivered to Purchaser which steam shall
have a pressure range between 90 psig minimum and 110 psig
maximum at the Interconnection Point and delivered to the
Interconnection Point at an expected pressure range
between 90 and 110 pounds per square inch gage pressure.
1.17 Utility means Potomac Electric Power Company, a
District of Columbia and Virginia corporation.
ARTICLE II
TERM OF AGREEMENT
2.01 This Agreement shall become effective as of the
date hereof and, unless sooner terminated pursuant to the
terms hereof, shall remain in full force and effect for an
initial term from the date hereof to the date that is 25
years from the Actual Commercial Operation Date under the
Power Contract. Supplier shall have the option to renew
this Agreement for additional terms of 5 years each by
notifying Purchaser in writing of such extension at least
30 days before the expiration of the prior term.
2.02 If any of the following events or circumstances
have occurred on or before the Actual Commercial Operation
Date, Supplier shall have the right to terminate this
Agreement upon giving written notice of termination to
Purchaser, and all of the obligations of the Parties shall
be null and void as if this Agreement were never entered
into and executed; provided that the obligations of the
Parties under any other agreement, instrument or contract
shall not be affected (including the rights of Utility and
the Lender to consent to termination of this Agreement)
unless specifically set forth therein:
(a) Supplier is unable to secure necessary
financing for the Facility and all matters related
thereto on terms acceptable to Supplier in its sole
discretion; or
(b) Supplier is unable to obtain all permits,
licenses, utility company agreements, and
approvals, including environmental permits, necessary
to construct, own and operate the Facility; or
(c) Utility terminates the Power Contract; or
(d) There is any change in law, regulation or
policy that materially and adversely affects the
economic viability of the Supplier.
2.03 In the event the Power Contract is terminated
for any reason after the Actual Commercial Operation Date,
Supplier shall have the right to terminate this Agreement
upon giving written notice of termination to Purchaser and
all of the obligations hereunder of the Parties shall be
null and void as if this Agreement were never entered into
or executed; provided that the obligations of the Parties
under any other agreement, instrument or contract shall
not be affected (including the rights of Utility and the
Lender to consent to termination of this Agreement) unless
specifically set forth therein.
2.04 The Parties may terminate this Agreement
earlier, with the prior written consent of the Lender and
Utility, by their express written mutual agreement.
2.05 Subject to the rights of Utility to consent
to any termination of this Agreement, if an Event of
Default has occurred and is continuing under the Facility
Lease or the Lender's construction loan agreement, the
Lender, as collateral assignee of Supplier, may, by
written notice to Purchaser, terminate this Agreement.
ARTICLE III
THE FACILITY AND THE DISTILLED WATER FACILITY
3.01 Supplier shall construct and operate the
Facility such that it shall be capable of supplying the
amount and quality of Thermal Energy, Cooling Water, and
Feed Water described in Article IV hereof, without in any
way adversely affecting Supplier's obligations under the
PEPCO Contract. The Facility shall at all times remain
the leasehold property of Supplier as lessee from the
Lender. Supplier shall sublease the Distilled Water
Facility to Purchaser for the term of this Agreement
pursuant to the Lease set forth in Exhibit B hereto. The
Parties agree to enter into the Lease on the date on which
the Facility Lease becomes effective.
3.02 Supplier shall, so long as same is required by
the PEPCO Contract, design, construct, operate and
maintain the Facility in compliance with the requirements
of the Public Utility Regulatory Policies Act of 1978, as
amended, and the regulations and decisions of the Federal
Energy Regulatory Commission, including ▇▇ ▇▇▇ ▇▇▇,
relating thereto (collectively "PURPA") and the other
requirements of the Power Contract.
3.03 Supplier shall be responsible for the design
and construction of all interconnected systems between the
Facility and the Interconnection Points at the Distilled
Water Facility.
3.04 Supplier shall operate the Distilled Water
Facility and perform or provide, at Supplier's expense,
such services, repairs and maintenance to the Distilled
Water Facility and all equipment on the Distilled Water
Facility Premises, as are reasonably required to maintain
the Distilled Water Facility and such equipment and
facilities in good working order and in safe and lawful
operating condition. Supplier shall at all times ensure
that the Distilled Water Facility, including all
equipment, is appropriate for operation in accordance with
the certification of the Facility as a "Qualifying
Facility" under PURPA by the Federal Energy Regulatory
Commission and applications relating thereto (collectively
the "QF Certification") and is properly designed, operated
and maintained. Purchaser shall give Supplier two (2)
weeks notice of any scheduled activities that will cause
Purchaser's Thermal Energy requirements from the Facility
to cease for a period of more than twenty-four (24) hours.
Notification of such activities shall be made by telephone
and confirmed by written notice. Purchaser hereby grants
to Supplier all easements, rights-of-way and/or rights of
ingress and egress necessary for Supplier to perform
conveniently any services, repairs, operations or
maintenance or any one or more of the other activities
contemplated by this Agreement or the Power Contract.
Further, Purchaser hereby agrees that it will not
interfere in any manner whatsoever with the construction
activities of the Facility, including, without limitation,
the deliveries of materials to the Facility Site.
3.05 Supplier shall perform or provide all services,
repairs and maintenance to the Interconnection Facilities
(and associated Metering Devices) as are reasonably
required to maintain the Interconnection Facilities in
good working order and in safe and lawful operating
conditions.
3.06 Supplier shall design and build the Distilled
Water Facility using a Distilled Water Facility EPC
Contractor selected by Supplier and acceptable to Lender.
The Distilled Water Facility will be designed, built and
demonstrate performance requirements in accordance with
the specifications approved by Supplier and Lender (the
"Distilled Water EPC Contract").
ARTICLE IV
SALE OF THERMAL ENERGY
4.01 Commencing on the Actual Commercial Operation
Date, Supplier will deliver to the Interconnection Points,
and Purchaser agrees to accept and use all (up to the
maximum design limits of the Distilled Water Facility)
Thermal Energy produced by the Facility which is delivered
to the Interconnection Points. The amount of Thermal
Energy to be delivered to the Interconnection Points may
be adjusted downward by Supplier, in its sole discretion.
Supplier shall also deliver effluent Cooling Water to
condense steam generated by the Distilled Water Facility
and Feed Water to make distilled water. Prior to the
Actual Commercial Operation Date, during any operations
and testing of the Facility, Supplier, as agent for
Purchaser shall accept and use all Thermal Energy
delivered up to the maximum design limit of the Distilled
Water Facility and payment shall be made in the same
manner as after the Actual Commercial Operation Date.
Title to and full responsibility for all Thermal Energy,
Cooling Water and Feed Water generated by the Facility
will pass to Purchaser upon its delivery at the
Interconnection Points, and Supplier shall have no
responsibility for such Thermal Energy, Cooling Water and
Feed Water thereafter.
4.02 Purchaser unconditionally agrees that it will
accept delivery of and use all Thermal Energy delivered by
Supplier up to the maximum design limit of the Distilled
Water Facility. The amount of Thermal Energy supplied by
Supplier to Purchaser hereunder shall be sufficient to
maintain the status of the Facility as a "Qualifying
Facility" within the meaning of PURPA on an annual basis
under any possible load or configuration that the Supplier
could reasonably be expected to run as anticipated under
the Power Contract. If Purchaser fails to accept such
Thermal Energy up to the maximum design limits of the
Distilled Water Facility, then in addition to its other
rights hereunder and as may be allowed by law, Supplier
shall have the right, without Purchaser's approval, to
sell Thermal Energy from the Facility to any other person
or entity to the extent required to maintain such status,
and such failure shall be deemed a material default by
Purchaser hereunder.
4.03 Without limiting any right or remedy which
Supplier might have at law or in equity as a result of
such breach, Purchaser agrees that a breach by it of any
covenant contained in Section 4.01 or 4.02 hereof will
cause irreparable injury to Supplier and that Supplier has
no adequate remedy at law in respect of such breach and,
as a consequence, Purchaser agrees that the covenants
contained in Sections 4.01 and 4.02 hereof shall be
specifically enforceable by Supplier against it, and it
waives and agrees not to assert any defense against an
action for specific performance of such covenants except
for a defense that such covenants have not been breached.
4.04 The price for the sale of Thermal Energy, Feed
Water and Cooling Water shall be $1.00 per 1,000 pounds of
Thermal Energy and $1.00 per 1,000 gallons of Feed Water
or Cooling Water.
4.05 Supplier will install, maintain, operate and
own all meters for Thermal Energy, Cooling Water, Feed Water
and waste water along with all other items the Parties
deem necessary for metering and controlling the Distilled
Water Facility. Meters will be calibrated and maintained
in accordance with general practices.
4.06 All Cooling Water delivered by Supplier
shall be returned by Purchaser to Supplier. Cooling Water
delivered by Supplier to Purchaser shall not exceed 97 degrees F.
Supplier will be obligated to supply only enough Cooling
Water to condense Purchaser generated steam.
4.07 All payments due under this Agreement to one or
the other Party shall be due and payable at the
recipient's office thirty (30) days after receipt of the
relevant invoice. Any sum remaining unpaid after such date
shall bear interest at the Stipulated Interest Rate.
4.08 Supplier shall be under no obligation to supply
Thermal Energy, Cooling Water and Feed Water to the extent
it is not operating one or both of its Heat Recovery Steam
Generators; or such operation is for repair or testing of
the Facility.
ARTICLE V
GOVERNMENTAL APPROVALS
5.01 Supplier shall secure, at its own expense,
permits, licenses, easements and rights-of-way, leases,
releases, and other governmental or administrative
approvals necessary for construction and operation of
the Facility and the interconnection facilities relating
thereto. Purchaser shall use its best efforts to assist
Supplier in obtaining and maintaining all necessary
permits and approvals and shall fully cooperate with
Supplier in the event Supplier seeks a waiver of the
operating or efficiency standards for a "Qualifying
Facility" under PURPA, as any of the foregoing may be now
or hereafter amended. Except to the extent covered by
Supplier's permits, approvals, easements, rights-of-way
and licenses, Purchaser shall secure at its own expense
all permits, licenses, easements, rights-of-way, releases
and other governmental or administrative approvals
necessary for operation of the Distilled Water Facility
and related equipment. Supplier shall operate and maintain
the Distilled Water Facility, including all related
equipment, in accordance with all applicable federal,
state and local laws, rules, regulations and permits and
the QF Certification. Supplier shall use its best efforts
to assist Purchaser in obtaining and maintaining
necessary permits and approvals. Supplier and Purchaser
shall perform their respective obligations hereunder in
compliance with any and all valid and applicable federal,
state and local laws, rules and regulations.
ARTICLE VI
INSURANCE AND INDEMNIFICATION
6.01 Purchaser shall indemnify, defend and save harmless
and reimburse Supplier, its partners and Utility and their
respective officers, directors, affiliates, partners,
employees, servants and agents, and their respective
successors and assigns and the Lenders, from and against
all losses, claims, liabilities, damages, causes of
action, suits, judgments, costs and expenses (including
reasonable attorneys' fees and litigation expenses)
arising from any injury to or death of any person or
persons or damage to any property resulting from or
arising out of or in any way connected with:
(a) the use of Thermal Energy in the use or
operation of the Distilled Water Facility and all related
equipment, including the steam equipment;
(b) operation or non-operation or location
of the Distilled Water Facility or equipment
(including the steam equipment) by Purchaser, its
agents, employees, officers or independent
contractors;
(c) any other equipment or appurtenances on
the Distilled Water Facility Premises (including
steam equipment);
(d) Thermal Energy present or escaping from any
point from and including the steam Interconnection
Points to and including the Distilled Water Facility;
(e) Purchaser or its operators, officers,
shareholders, directors, managers, employees,
agents, servants or contractors tampering with or
attempting to repair and/or maintain the steam
equipment, or any of Supplier's steam lines, meters,
apparatus or equipment (including, without
limitation, the Facility, the interconnection
facilities and the Metering Devices); or
(f) the gross negligence or willful misconduct
of Purchaser.
If any action or proceeding should be brought
against Supplier or Utility or Supplier's or Utility's
partners or their respective officers, directors,
affiliates, partners, employees, servants, and agents or
their respective successors or assigns, based upon any
such claim and if Purchaser, upon notice from Supplier,
shall cause such action or proceeding to be
satisfactorily defended in Supplier's reasonable judgment
at Purchaser's expense by counsel reasonably satisfactory
to Supplier, without any disclaimer of liability by
Purchaser in connection with such claim, Purchaser shall
not be required to indemnify Supplier for attorneys' fees
and expenses in connection with such action or proceeding.
The obligations of Purchaser under this Section 6.01 shall
commence to accrue on the date of this Agreement and
shall survive any termination of this Agreement and any
permitted transfer or assignment by Purchaser or Supplier
of this Agreement or any interest hereunder.
6.02 Supplier shall indemnify, defend and save harmless
and reimburse Purchaser, its directors, officers,
affiliates, employees, servants and agents, and their
respective successors and assigns, from and against all
losses, claims, actions, liabilities, damages, causes of
action, suits, judgments, costs and expenses (including
reasonable attorneys fees and litigation expenses) arising
from any injury or death of any person or persons or
damage to any property resulting from or arising out of or
in any way connected with the gross negligence or willful
misconduct of Supplier. If any action or proceeding should
be brought against Purchaser or Purchaser's directors,
officers, affiliates, employees, servants and agents or
their respective successors or assigns, based upon any
such claim and if Supplier upon notice from Purchaser,
shall cause such action or proceeding to be satisfactorily
defended in Purchaser's reasonable judgment at Supplier's
expense by counsel reasonably satisfactory to Purchaser,
without any disclaimer of liability by Supplier in
connection with such claim, Supplier shall not be required
to indemnify Purchaser for attorneys' fees and expenses
in connection with such action or proceeding. The
obligations of Purchaser under this Section 6.02 shall
commence to accrue on the date of this Agreement and shall
survive any termination of this Agreement and any
permitted transfer or assignment by Purchaser or Supplier
of this Agreement or any interest hereunder.
6.03 Purchaser (at Supplier's cost) shall carry and
maintain during the term hereof at least the minimum
insurance coverage set forth in this subsection with
insurers of recognized responsibility satisfactory to the
Supplier and Lender. Such insurance shall be written on
such forms and with such terms, conditions and deductibles
acceptable to the Supplier and Lender.
6.03.1 During the construction phase (from the
commencement of on site construction):
(i) Purchaser shall maintain
Comprehensive General Liability insurance
written on an occurrence basis with a
limit of not less than $1,000,000. Such
coverage shall include, but not be limited
to, premises/operations, explosion,
collapse, underground hazards, broad form
contractual, independent contractors,
products/completed operations, broad form
property damage and personal injury
liability.
(ii) Purchaser shall maintain (a)
Worker's Compensation insurance in
accordance with statutory provisions of
the State of Maryland and (b) Employers'
Liability insurance with a limit of not
less than $1,000,000. Such policy shall not
contain an exclusion for occupational
disease.
(iii) Purchaser shall maintain
Comprehensive Automobile Liability
insurance for owned, non-owned, leased,
hired and borrowed vehicles covering bodily
injury or property damage with a limit of
not less than $1,000,000.
(iv) Purchaser shall maintain
Excess Umbrella Liability insurance written
on an occurrence basis and providing
coverage limits in excess of the insurance
required to be maintained pursuant to
Sections (i), (ii)(b), and (iii). The limit
of such insurance and Excess Umbrella
coverage, when combined, shall not be less
than $15,000,000. Such insurance shall
contain a drop down provision in the event
of exhaustion of underlying limits or
aggregates and apply on a following form
basis.
6.03.2 From Actual Commercial Operation
Date to the end of the term of this Agreement:
(i) Purchaser shall maintain
Comprehensive General Liability insurance
written on an occurrence basis with a
limit of not less than $1,000,000. Such
coverage shall include, but not be limited
to, premises/operations, explosion,
collapse, underground hazards, broad form
contractual, independent contractors,
products/completed operations, broad form
property damage and personal injury
liability.
(ii) Purchaser shall maintain (a)
Workers' Compensation insurance in
accordance with statutory provisions of
the State of Maryland and (b) Employers'
Liability insurance with a limit of not
less than $1,000,000. Such policy shall not
contain an exclusion for occupational
disease.
(iii) Purchaser shall maintain
Comprehensive Automobile Liability
insurance for owned, non-owned, leased,
hired and borrowed vehicles covering bodily
injury or property damage with a limit of
not less than $1,000,000.
(iv) Purchaser shall maintain Excess
Umbrella Liability insurance written on an
occurrence basis and providing coverage
limits in excess of the insurance required
to be maintained pursuant to Sections (i),
(ii)(b), and (iii). The limit of such
insurance and Excess Umbrella coverage,
when combined, shall not be less than
$15,000,000. Such insurance shall contain a
drop down provision in the event of
exhaustion of underlying limits or
aggregates and apply on a following form
basis.
6.03.3 Endorsements: The Purchaser
shall cause the insurance maintained in accordance with
this Article to be endorsed as follows:
(1) the Purchaser shall be the named
insured with respect to the insurance
carried pursuant to this section and
Supplier, Utility and Lender shall be
included as additional insured with respect
to 6.03.1(i), (ii)(b), (iii), and (iv) and
6.03.2(i), (ii)(b), (iii), and (iv) with
the understanding that any obligation
imposed upon the Purchaser (excluding the
obligation to Pay premiums, which shall be
the obligation of Supplier) shall be the
sole obligation of the Purchaser and not
that of the Supplier, Utility or Lender;
(2) inasmuch as the liability
policies are written to cover more than one
insured, all terms, conditions, insuring
agreements and endorsements, with the
exception of the limits of liability, shall
operate in the same manner as if there were
a separate policy covering each insured;
(3) the insurers thereunder shall
waive all rights of subrogation against
the Supplier, Utility and Lender, any right
of setoff or counterclaim and any other
right of deduction, whether by attachment
or otherwise;
(4) such insurance shall be primary
without right of contribution of any other
insurance carried by or on behalf of the
Supplier, Utility or Lender, or any other
Party, with respect to its interest as such
in the facility;
(5) if such insurance is canceled for
any reason whatsoever, including for
nonpayment of premium, or any changes are
initiated by the carrier which affect the
interest of the Supplier, Utility or
Lender, such cancellation or change shall
not be effective as to the Supplier,
Utility and Lender until thirty (30) days
after receipt by the Supplier, Utility and
Lender of written notice sent by registered
mail from such insurer.
6.03.4 Certification: At closing, and at
each policy renewal, but not less than annually, Purchaser
shall provide to Supplier, Utility and Lender approved
certification from each insurer or by an authorized
representative of each insurer. Such certification shall
identify the underwriters, the type of insurance, the
limits, deductibles, and term thereof. Upon request, the
Purchaser shall furnish Supplier, Utility and Lender with
copies of all insurance policies, binders, and cover notes
or other evidence of such insurance.
6.03.5 Power Contract Insurance. This
Article VI shall in no way affect or modify the Parties
obligations relating to insurance under the Power
Contract. In the event of any conflict in insurance
requirements, the requirements of the Power Contract shall
prevail.
ARTICLE VII
DEFAULT
7.01 Supplier shall be in default of its obligations under this
Agreement if:
7.01.1 Supplier fails to perform any material obligation
or breaches any of its warranties in a material manner under this
Agreement, unless such failure by Supplier is expressly excused under this
Agreement.
7.02 Purchaser shall be in default of its obligations under this
Agreement if:
7.02.1 Purchaser fails to perform its agreement contained
in the first sentence of Section 4.02 hereof.
7.02.2 Purchaser applies for or consents to the
appointment of a receiver, custodian, trustee or liquidator, becomes
unable to pay debts as such become due, makes a general assignment for the
benefit of creditors, or commences a voluntary case under the United
States Bankruptcy Code of 1978, or if final order for relief is granted
against it in an involuntary bankruptcy proceeding.
7.02.3 The occurrence of an "Event of Default"
(as defined in the Lease) under the Lease; or
7.02.4 Purchaser fails to perform any other
material obligation or breaches any of its warranties in a material
manner under this Agreement, unless such failure is expressly excused
under this Agreement.
ARTICLE VIII
REMEDIES
8.01 Upon the occurrence of a default by Purchaser hereunder, and
subject to the rights of Utility under the PEPCO Contract, Supplier may,
without an election of remedies and in addition to any other remedies
herein provided:
(a) suspend deliveries of Thermal Energy from the Facility until
Purchaser shall cure such default; and
(b) exercise all remedies available at law or at equity or other
appropriate proceedings including bringing an action or actions from
time to time for recovery of damages which shall include all costs and
expenses reasonably incurred in the exercise of its remedies
(including reasonable attorneys' fees); and
(c) without recourse to legal process, terminate this Agreement by
delivery of a notice declaring termination; and
(d) terminate the Lease and exercise its rights set forth therein;
and
(e) in the event Purchaser disavows its obligations hereunder or
otherwise breaches the terms hereof, Supplier may elect either to
enforce or to rescind this Agreement. This remedy shall not be deemed
to limit the generality of the foregoing, and in the event of an
election to enforce this Agreement, Supplier shall be entitled to all
remedies and damages available at law and in equity.
8.02 Upon the occurrence of a default by Supplier, Purchaser shall have
the right, with or without recourse to legal process, to seek to enforce
this Agreement and recover compensatory damages (specifically excluding
consequential damages, such as loss of use, lost revenues and costs
incurred because of delays and all other damages and remedies whatsoever)
directly caused by such default. This remedy shall be the exclusive
remedy of Purchaser in the event of a default by Supplier.
8.03 Notwithstanding anything in this Agreement to the contrary, unless
and until this Agreement has been terminated, Supplier shall not refuse to
deliver, suspend or delay any delivery of Thermal Energy as required under
this Agreement as a result of any breach or alleged breach by Purchaser,
nor shall Purchaser refuse to take and productively use the quantity of
Thermal Energy from Supplier as required under Article IV of this
Agreement, or refuse to make, suspend or delay any of the payments
required under this Agreement, as a result of any breach or alleged breach
by Supplier; provided however, that to the extent Purchaser has failed (or
is reasonably likely to fail) to purchase and productively use the minimum
quantity of Thermal Energy in any year, Supplier may enter into
arrangements for the sale of such Thermal Energy to third parties as in
Supplier's sole discretion may be necessary for the Facility to maintain
its Qualifying Facility status under PURPA; and provided further, however,
that Purchaser's and Supplier's obligations with respect to the minimum
quantity of Thermal Energy shall be reduced in any subsequent year, to the
extent such alternative arrangements for the sale of Thermal Energy to
third parties continues into such subsequent year.
8.04 In no event shall Supplier or Purchaser be liable to the other for
indirect, special, incidental, consequential or exemplary damages,
including, but not limited to, loss of profits or revenue, or, in the case
of Supplier, costs of purchased or replacement steam. Supplier shall not
be liable to Purchaser for damages arising out of Supplier's failure to
deliver Thermal Energy to Purchaser hereunder due to failure to achieve
commercial operation of the Facility or otherwise due to a termination by
Potomac Electric Power Company of the PEPCO Contract.
ARTICLE IX
FORCE MAJEURE
9.01 All obligations of the Parties to this Agreement (except for the
payment of money for Thermal Energy which has been supplied) shall be
suspended while and for so long as compliance is prevented in whole or in
part by an act of God, war, civil disturbance, explosion, Federal, State,
or Local law, inability to secure permits, approvals, or licenses, binding
order of a court or governmental agency, or any other cause beyond the
reasonable control of Supplier or Purchaser. Force Majeure shall not
include lack of financial funds, economic slowdowns, or strikes or labor
disputes of the employees of the party claiming Force Majeure. A party
shall notify the other party in writing of the occurrence of a Force
Majeure event within 10 days after the occurrence of such Force Majeure
event. The party suffering an event of Force Majeure shall use its best
efforts to remedy as soon as possible the cause(s) preventing the
performance of this Agreement.
9.02 Notwithstanding anything to the contrary contained herein,
Supplier shall have the right, at such times as it in its sole reasonable
judgment deems necessary, to interrupt the production and delivery of
Thermal Energy, Cooling Water and Feed Water hereunder when the continued
production and/or delivery of such Thermal Energy, Cooling Water and Feed
Water would constitute a threat of damage or loss to property or of injury
to the health and safety of any individual. Such interruption shall not
constitute a default in the performance of any Supplier's obligations
hereunder.
ARTICLE X
SUPPLIER'S REPRESENTATIONS AND WARRANTIES
10.01 Supplier has been duly formed, and is in good standing as a
limited partnership under the laws of the State of Delaware. Supplier is
qualified to do business in the State of Maryland.
10.02 Supplier has all requisite power and authority to enter this
Agreement, and to perform the obligations on its part herein contained.
10.03 There is no litigation or proceeding pending or, to its
knowledge, threatened against Supplier (otherwise than as expressly
disclosed in writing to Purchaser) that would, if determined adversely to
Supplier have a material adverse effect on the ability of Supplier to
enter or to perform this Agreement.
10.04 The execution and performance by Supplier of its obligations
hereunder will not result in the breach of any agreement or instrument to
which Supplier is a Party or in the violation of any order, rule or
regulation of any court or governmental body having jurisdiction over
Supplier.
ARTICLE XI
PURCHASER'S REPRESENTATIONS AND WARRANTIES
11.01 Purchaser has been duly incorporated, and is in good standing as a
corporation under the laws of the State of Delaware.
11.02 Purchaser has all requisite corporate power and authority to enter
this Agreement and to perform the obligations on its part herein
contained.
11.03 There is no litigation or proceeding pending or, to its knowledge,
threatened against Purchaser (otherwise than as expressly disclosed in
writing to Supplier) that would, if determined adversely to Purchaser,
have a material adverse effect on the ability of Purchaser to enter or to
perform this Agreement.
11.04 The execution and performance by Purchaser of its obligations
hereunder will not result in a breach of any agreement or instrument to
which Purchaser is a Party or in the violation of any order, rule or
regulations of any court or governmental body having jurisdiction over
Purchaser.
ARTICLE XII
DAMAGE OR DESTRUCTION OF FACILITY; REPAIR
12.01 If any portion of the Facility is damaged or destroyed and such
damage or destruction is an event that is covered by insurance, Supplier
will use its reasonable efforts (if permitted by the Facility Lease or
loan agreement with the Lender) to repair or restore steam supply
capability to the extent of insurance proceeds received by Supplier for
repair or restoration. If the insurance proceeds are insufficient or if
the Facility has been damaged or destroyed by an uninsured casualty, and
Supplier or the Lender determine that the restoration of the Facility is
not economically practical, Supplier may terminate this Agreement without
default by a notice to Purchaser declaring such termination. Upon such
termination, Supplier may dismantle and/or remove any part of the Facility
from the Facility Site without liability in any suit, action or other
proceeding to Purchaser on account of such action, and Purchaser shall
have no further obligation to Supplier hereunder; provided that
obligations of the Parties under any other agreement, instrument or
contract shall not be affected (including Supplier's obligations under
Section 13.5 of the PEPCO Contract) unless specifically set forth therein.
In the event of any conflict between this Section 12.01 and the terms and
conditions of the PEPCO Contract, the PEPCO Contract shall prevail.
12.02 Supplier shall at all times have the right to replace, delete or
substantially alter any component of the Facility; provided that any
alterations to the Facility permitted herein shall not materially change
Purchaser's obligations hereunder.
12.03 If any portion of the Distilled Water Facility or the steam
equipment relating thereto is damaged or destroyed, Purchaser shall comply
with the provisions of the Lease.
ARTICLE XIII
METERING
13.01 Supplier shall provide, own and maintain, at its own expense, all
necessary meters and associated equipment to be utilized in measuring the
Thermal Energy output of the Facility, measuring the condensate returned
to the Facility, measuring Cooling Water and measuring Feed Water (the
"Metering Devices") which measurements will form the basis of the
calculation of the monies owed pursuant to this Agreement. A single set of
Metering Devices for each service provided will be located at the
Facility. All Metering Devices, the arrangement thereof, and all
calibration procedures shall be approved by Purchaser in writing prior to
the purchase and installation by the Supplier.
13.02 An authorized representative of Supplier will read the Metering
Devices at the end of each calendar month, and will thereafter prepare and
send to Purchaser or its designee a notice of the amounts of steam
delivered to Purchaser by Supplier during such calendar month.
13.03 Supplier's metering devices shall be sealed and such seals shall be
broken only by Supplier and only when a Metering Device is to be
inspected, tested, adjusted, or repaired. Purchaser shall receive
reasonable prior notice of any testing, inspecting, or adjustment of the
Metering Devices and shall have the right to be present at such events.
13.04 Periodic calibration of the Metering Devices will be made at least
once every 2 years at no cost to Purchaser and additional tests will be
made at any reasonable time upon request therefor by Purchaser. If, as a
result of such tests the Metering Devices are found to be defective or
inaccurate, it will be promptly restored to a condition of accuracy or
replaced by Supplier. If a test of the Metering Devices is made at the
request of the Purchaser with the result that said Metering Device is
found to be registering correctly or within plus or minus two percent (2%)
of one hundred percent (100%) Purchaser agrees to bear all costs of such
test; provided, however, that if such test shows an error greater than
plus or minus two percent (2%) of one hundred percent (100%), then
Supplier shall bear all costs of such test. All Metering Devices shall be
calibrated by Supplier as close as practical to one hundred percent (100%)
at the time of installation and subsequent testing.
If any of the Metering Devices tests provided for herein disclose
that the error for such equipment exceeds plus or minus two percent (2%)
of one hundred percent (100%) an adjustment will be made for the actual
period during which inaccurate measurements were made, if that period can
be determined to the mutual satisfaction of the Parties, and otherwise,
for one-half (50%) of the measured quantities resulting from the readings
of such Metering Device taken during the billing periods since the last
test on such Metering Device was made, such adjustments to be made either
upward or downward from the amount of the error to one hundred percent
(100%). Any correction in billing resulting from such adjustment in meter
records shall be made in the next monthly ▇▇▇▇ rendered by Supplier after
the inaccuracy is discovered, and such correction when made, so long as
the error did not result from the intentional conduct of a Party, shall
constitute a complete and final settlement arising between the Parties out
of such inaccuracy of the Metering Devices.
Should any Metering Device fail to register the Thermal Energy
output of the Facility, the condensate returned, or the other services
provided during any period of time, the amount of Thermal Energy output,
condensate return, or other services provided will be estimated by
agreement by the Parties based on the amounts previously delivered during
similar periods under substantially similar conditions, producers
production volumes and historical records.
ARTICLE XIV
CONDENSATE
14.01 Condensate shall be returned by Purchaser to the Interconnection
Points, and shall be of a quality suitable for use by the Facility.
Condensate return shall be monitored by Supplier.
ARTICLE XV
MISCELLANEOUS
15.01 This Agreement shall be governed by the laws of the State of New
York.
15.02 This Agreement sets forth the entire agreement between the parties
on the subject matter hereof. Any modification of this Agreement can only
be in the form of a writing, signed by both Parties and having the prior
written consent of the Lender and, if required by the PEPCO Contract,
Utility.
15.03 If any provision of this Agreement shall be found by a court of
competent jurisdiction to be invalid, such finding shall not invalidate
any other provision hereof.
15.04 Neither Party shall be permitted to assign its rights or
obligations under this Agreement except in accordance with this Section
15.04. Supplier, in its sole discretion, may assign this Agreement and
delegate all rights, duties and obligations to any affiliate, successor
or subsidiary of Supplier, to any general or limited partnership in which
Supplier is a general or limited partner at the time of the assignment, or
to any person or entity who acquires the Facility or an interest in the
Facility. Supplier or any such successor or assignee may assign this
Agreement as security to any of Supplier's Lenders. Purchaser is aware
that Supplier (or its successor) will enter into a loan agreement (the
"Facility Loan Agreement") and related security documents with Supplier's
Lenders under which Supplier's Lenders or their agent, trustee, successors
or assigns may acquire the rights of Supplier under this Agreement or
assume the rights and obligations of Supplier under this Agreement.
Purchaser is also aware that Supplier intends to transfer the Facility and
the Distilled Water Facility to the Lender and leaseback such Facilities
from the Lender. Purchaser hereby acknowledges and agrees that Supplier
shall be entitled to enter into an agreement for the operation and
maintenance of the Facility with a third party qualified to perform such
services and further agrees that the execution of any such agreement shall
not constitute an assignment of this Agreement.
15.04.2 Purchaser may not assign this Agreement without (a)
the prior written consent of Supplier and the Supplier's Lenders and (b)
the written agreement of the assignee whereby such assignee expressly
assumes and agrees to perform each and every obligation of this Agreement,
and any assignment by Purchaser in violation hereof shall be null and
void.
15.05 Nothing contained in this Agreement shall be deemed or construed
for any purpose to establish a partnership, joint venture or a principal-
agent relationship between Supplier and Purchaser.
15.06 All notices under this Agreement shall be given in writing and
shall be deemed to have been given when delivered to the other party by
registered, or certified mail, return receipt requested, addressed as
follows:
For Purchaser:
Brandywine Water Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chairman & General Counsel
For Supplier:
Panda-Brandywine, L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chairman & General Counsel
15.07 This Agreement shall inure to the benefit of the Parties hereto and
their respective successors and assigns, in accordance with the terms
hereof.
Executed as of this 30th day of March, 1995.
PANDA-BRANDYWINE, L.P. BRANDYWINE WATER COMPANY
By: Panda Brandywine Corporation,
General Partner
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President Title: President
