HomeMy WebLinkAboutPermeate Refining LLC-6/25/2012SUPPLY AGREEMENT
This Supply Agreement (the "Agreement") is entered into as of J "-< 3- S , 2012,
by and between Permeate Refining L.L.C. ("Permeate") and the City of Waterloo, Iowa ("City").
WHEREAS, Permeate is in the business of producing and mixing an alternative fuel
mixture (AFM) which contains bio -mass by-product from food processing plants or corn ethanol
production, and selling and delivering the AFM for use as fuel or fuel additive; and
WHEREAS, Permeate has an obligation to properly dispose of waste which results from
the production of AFM Waste (defined in Section 3 below); and
WHEREAS, City owns and operates an anaerobic lagoon in Black Hawk County, Iowa,
which is capable of using the AFM Waste as fuel to produce energy and is in the business of
treating and disposing of water -borne waste products.
NOW, THEREFORE, in consideration of the mutual promises exchanged herein, the
parties agree to enter into a business relationship with respect to the AFM Waste upon the
following terms and conditions.
1. Transactions. Permeate shall transfer and deliver AFM Waste to City's anaerobic
lagoon on Martin Luther King Jr. Drive, and City shall treat and dispose of the AFM Waste.
2. Term. The term of this Agreement shall be for five (5) years, commencing on
, 2012 and continuing until and including March 31, 2017, subject to termination
upon default as set forth elsewhere in this Agreement. This Agreement shall be automatically
renewed for successive terms of one (1) year each on the same terms set forth herein, unless
either party provides notice to the other party of non -renewal of the initial term or any
subsequent term at least thirty (30) days prior to the end of the term then in effect.
3. AFM Waste. For purposes of this Agreement, "AFM Waste" (also known as
stillage) shall be the wastewater generated from the production of AFM by Permeate. The
wastewater will contain organic material which will exert a Biochemical Oxygen Demand
(BOD) during treatment. For purposes of this Agreement, AFM Waste (i.e., stillage) strength
based on the concentration of BOD expressed as milligrams per liter (mg/1) will be accepted as
follows:
Low strength 0 to 100,000 mg/1
Medium strength 100,000 to 200,000 mg/1
High strength > 200,000 mg/1
4. Payments. Permeate shall pay City a handling fee of five cents ($0.05) per gallon
of AFM Waste delivered by Permeate to Client pursuant to this Agreement. For purposes of
converting pounds to gallons, the parties agree that one gallon equals 8.5 pounds. City may, at
its option, bill Permeate monthly, bi-weekly or weekly, based on weight tickets that Permeate
provides to City for each shipment delivered. Permeate shall remit payment within fourteen (14)
days of billing.
5. Volume; Delivery. City agrees to accept, and Permeate agrees to deliver, a
minimum of three (3) truck loads, estimated at approximately 5,000 to 6,000 gallons each (or
16,000 to 20,000 gallons total), of "low strength" AFM Waste per day, seven (7) days per week,
provided, however, that City may notify Permeate that no deliveries, or only reduced deliveries,
will be accepted for good cause, including but not limited to facility or system maintenance
needs, significant reduction of inflow to lagoon, or AFM Waste testing results or BOD strength.
AFM Waste delivery will be coordinated with the City's schedule and ability to treat the AFM
Waste effectively and efficiently. The duration of any interruption or reduction of allowable
deliveries shall be in the discretion of City, exercised in good faith. At its sole discretion, City
may choose to accept more AFM Waste than stated above.
6. Operations.
A. No less than weekly, Permeate will provide a scale ticket receipt for each
load of AFM Waste delivered to City in the preceding week.
B. The pH content of all AFM Waste delivered to City shall be between three
point five (3.5) and nine point zero (9.0), notwithstanding any different limits that may
be stated in section 8 -3C -1-1(C) of the Waterloo Code of Ordinances.
C. Permeate will cause the AFM Waste in at least one truckload to be tested
by an Iowa certified testing laboratory, with a written report of the results to be
promptly delivered to City, for the following constituents and at the intervals specified
below:
1. Monthly:
• BOD (Biochemical Oxygen Demand)
® TSS (Total Suspended Solids)
® pH
® TKN (Total Kjeldahl Nitrogen)
® Temperature
2. Once every three months:
® Metals listed in the 503 Land Applied Sludge rules
3. Once every six months:
® Total oil and grease
D. Permeate, at its option, may use a dedicated truck carrier to transport and
deliver AFM Waste to City. If Permeate elects to use the dedicated truck carrier,
Permeate shall provide City with the name and phone number of a contact person at
such dedicated truck carrier.
E. The parties agree to cooperate in good faith to carry out the purposes
contemplated by this Agreement and to resolve any issues that may arise.
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7. Ownership. Ownership of the AFM Waste will be transferred from Permeate to
City upon acceptance of delivery.
8. Discharge Permit. By City's approval of this Agreement, Permeate shall be
deemed to have been issued a permit by City for discharge of industrial wastes, on the terms set
forth in this Agreement, pursuant to section 8-3C-2 of the Waterloo Code of Ordinances. Said
permit shall be effective for the term of this Agreement and shall expire concurrently with the
termination or expiration of this Agreement. City reserves all rights under section 8-3C-3-4.
9. Indemnity. Permeate agrees to defend, indemnify and hold harmless City, its
officials, employees, attorneys and agents, from and against any and all claims, demands,
actions, causes of action, damages, costs, or liabilities of any type or nature whatsoever,
including but not limited to reasonable attorneys' fees and expenses, whether at law or in equity,
and whether sounding in tort or contract, arising from or in connection with the acts or omissions
of Permeate, its officers, employees, contractors and agents, under this Agreement.
10. Default; Termination. Permeate shall be in default of this Agreement if (a) it fails
to deliver load tickets to City as required by this Agreement, (b) it fails to remit payments to
City, (c) it fails to engage in its usual and customary business activities for more than fifteen (15)
consecutive business days, or (d) becomes the subject to a voluntary or involuntary bankruptcy
proceeding or other action for protection from creditors. Upon occurrence of default as
described in clause (d), this Agreement shall terminate immediately and automatically without
further action by either party. Upon occurrence of any other event of default, then City shall
have the option to terminate this Agreement, provided, however, before any such termination is
effective City shall provide written notice to Permeate that specifies the default, and if Permeate
does not cure said default within ten (10) days after the giving of such notice, or such other
period of time to which the parties may agree in writing, then this Agreement shall be
terminated.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Iowa, but without regard to provisions thereof relating to
conflict of law.
12. Force Majeure. Either party will be excused from the obligations of this
Agreement to the extent that performance is delayed or prevented by any circumstances
reasonably beyond its control, including but not limited to fire, explosion, mechanical
breakdown, strikes or other labor disputes, plant shut down, cessation of business, unavailability
or interference with the usual mems of transport, or compliance with any law, regulation or
request or action (actual or threatened) of any governmental authority.
13. Severability. In the event of any provision in this Agreement is held invalid,
illegal or unenforceable, in whole or in part, the remaining provision of this Agreement shall not
be affected thereby and shall continue to be valid and enforceable.
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14. Entire Agreement; Modification. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof and supersedes all
negotiations, preliminary agreements and all prior or contemporaneous discussions and
understanding of the parties. This Agreement may not be modified or amended without the
written consent of both parties.
15. Notices. Any notices required or permitted under this Agreement shall be made
in writing and shall be delivered or sent to the parties addressed as follows:
Permeate Refining L.L.C.
205 Locust Street SW
Box 8
Hopkinton, IA 52237
Attn: Manager
City of Waterloo
Waste Management Services
3505 Easton Avenue
Waterloo, IA 50702
Attn: Superintendent
Unless either party notifies the other, in writing, of a different address, and without prejudice to
any other method of communication, such notice shall be considered given under the terms of
this Agreement when sent, addressed as designated above, by U.S. registered or certified mail,
return receipt requested, postage prepaid. Such notice shall be deemed delivered three (3)
business days after the date it is deposited in a U.S. mail receptacle.
16. Binding Effect. This Agreement is binding on the parties and the respective
successors and assigns of each. Time is of the essence hereof.
IN WITNESS WHEREOF, the parties have executed this Supply Agreement by their
duly authorized representatives as of the date first set forth above.
PERMEATE REFINING L.L.C. CITY OF TERLOO, IOWA
By:
Its:
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By:
Ernest G. Clark, Mayor
Suzy 5.'h ares, City Clerk