DEFERRED TERMS AGREEMENT
RELATING TO THE PROVISION OF PLANT AND SPARE PARTS
TO A POWER GENERATION COMPLEX AT
SYAMA, REPUBLIC OF MALI
BY AND BETWEEN
SOCIETE DES MINES DE SYAMA S.A.
AND
ROLLS-ROYCE POWER VENTURES LIMITED
TABLE OF CONTENTS
SECTION 1
DEFINITIONS AND RULES OF INTERPRETATION..............................................................2
SECTION 2
INITIAL CONDITIONS..................................................................................16
SECTION 3
DESIGN..............................................................................................18
SECTION 4
PLANT...............................................................................................19
SECTION 5
BALANCE OF PLANT AND MINE MODIFICATIONS.............................................................21
SECTION 6
TITLE...............................................................................................23
SECTION 7
SITE CONDITION......................................................................................24
SECTION 8
COMMISSIONING OF UNITS..............................................................................26
SECTION 9
SPARE PARTS.........................................................................................27
SECTION 10
INCENTIVE REGIME....................................................................................28
▇▇▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇▇▇▇ AND LUBE OIL............................................................................32
SECTION 12
ACCOUNTING..........................................................................................34
SECTION 13
INSURANCE...........................................................................................38
SECTION 14
INSURABLE/NON-INSURABLE EVENTS......................................................................40
SECTION 15
FINAL PAYMENT.......................................................................................46
SECTION 16
TERMINATION.........................................................................................47
SECTION 17
DISPUTE RESOLUTION..................................................................................58
SECTION 18
TRANSFER OF RIGHTS AND OBLIGATIONS..................................................................61
SECTION 19
ADJUSTMENT DUE TO CHANGE IN LAW.....................................................................62
SECTION 20
INTELLECTUAL PROPERTY...............................................................................63
SECTION 21
MISCELLANEOUS.......................................................................................63
EXHIBIT 1
Form of Randgold Guarantee...................................................................69
EXHIBIT 2
Offshore Account Arrangements................................................................76
EXHIBIT 3
Part 1 Plant.................................................................................83
Part 2 Balance of Plant......................................................................84
Part 3 Existing Facility.....................................................................87
Part 4 Technical Requirements................................................................88
EXHIBIT 4
Part 1 Shipment Schedule.....................................................................93
Part 2 Spare Parts Schedule..................................................................94
Part 3 Spare Parts Inventory.................................................................96
Part 4 Order Form............................................................................97
EXHIBIT 5
Insurances...................................................................................98
EXHIBIT 6
Part 1 Reusable.............................................................................113
Part 2 Salvage..............................................................................115
EXHIBIT 7
Facility Design Programme...................................................................116
EXHIBIT 8
Part 1 Guaranteed Contracted Capacity.......................................................117
Part 2 Fuel Efficiency Rate.................................................................118
Part 3 Lube Oil Consumption Rate............................................................122
EXHIBIT 9
Part 1 Completion Tests.....................................................................125
Part 2 Fuel Specification...................................................................127
Part 3 Water Specification..................................................................128
Part 4 Lube Oil Specification...............................................................129
EXHIBIT 10
Part 1 Plant Payment........................................................................130
Part 2 BOP Payment..........................................................................132
Part 3 Spare Parts Payment..................................................................134
Part 4 Payment Adjustments..................................................................135
Part 5 Existing Facility Payment............................................................140
Part 6 Fixed Spare Parts Payment............................................................141
Part 7 Payment Mechanism....................................................................143
Part 8 Table of Termination Prices where SOMISY Default or where SOMISY accelerates payment
in accordance with Section 15.3.............................................................147
Part 9 Table of Termination Prices where Sypps Default......................................149
Part 10 Table of Termination Prices where no Default........................................151
Part 11 CTF Termination Price...............................................................153
EXHIBIT 11
Notices.....................................................................................155
EXHIBIT 12
Key Milestones and Key Milestone Dates......................................................156
EXHIBIT 13
Fixed Default Amount........................................................................159
EXHIBIT 14
Direct Agreement in relation to the Syama Mining Project....................................160
EXHIBIT 15
Site........................................................................................168
DEFERRED TERMS AGREEMENT
This Deferred Terms Agreement (this "Agreement") is dated as of [25 February]
2000 , between ROLLS-ROYCE POWER VENTURES LIMITED registered in and in
accordance with the laws of England under number 2916875 for and on behalf of a
majority owned subsidiary of it which is to be incorporated under the name SYAMA
POWER PLANT SALES LIMITED (or such other name as may be required by the relevant
authorities in the jurisdiction in which such subsidiary is to be incorporated
and registered) (and the term "Sypps" shall mean Rolls-Royce Power Ventures
Limited until notice is given under Section 2.4, wherefrom it shall mean Syama
Power Plant Sales Limited) and SOCIETE DES MINES DE SYAMA S.A. ("SOMISY"), a
majority owned subsidiary of Randgold Resources Limited registered in and in
accordance with the laws of the Republic of Mali under number 3724. Each of
Sypps and SOMISY is referred to herein as a "Party" and collectively, as the
"Parties".
RECITALS
WHEREAS SOMISY holds a concession for gold mining at Syama, Republic of Mali in
respect of which SOMISY owns and operates a mining facility and associated
property (the "Mine") and wishes to acquire, on deferred terms, generating and
other equipment consisting of the Facility and made up of the Plant and the
Balance of Plant.
WHEREAS SOMISY has entered into or intends to enter into a contract (the "Energy
Support Agreement") with Operations d'Energie de Syama SA (the "Operator") for
the operation of the Facility on terms satisfactory to Sypps and, on that basis,
Sypps is prepared to warrant the Availability and Fuel Efficiency Rate of the
Plant.
WHEREAS Sypps has agreed on the terms set out in this Agreement to: (i) design
the Facility; (ii) supply the Plant; (iii) assist in the procurement of certain
parts of the Balance of Plant; and (iv) until expiration of the Term, provided
that the Energy Support Agreement remains in force, supply the Spare Parts.
NOW, THEREFORE, in consideration of the mutual benefits to be derived herefrom
and the undertakings contained herein Sypps and SOMISY hereby agree as follows:
SECTION 1
DEFINITIONS AND RULES OF INTERPRETATION
1.1 DEFINITIONS
Whenever the following terms appear in the Agreement, they shall have
the meanings stated below unless the context otherwise requires:
"ABANDONMENT" means the cessation by either Party
of the performance of its
obligations under this Agreement or
a material part thereof, for a
period of 6 consecutive months or
more.
"AFFILIATE" of any Party means a person (other
than a natural person) that directly
or indirectly controls or is under
the common control with or is
controlled by such Party.
"AGREEMENT" means this agreement including the
recitals and Exhibits hereto and
parts to the Exhibits.
"APPLICABLE LAW" means any law, statute, decree,
rules, judgment, regulation order or
code which is applicable to or
affects the Project or the supply of
all or any of the Plant, the Balance
of Plant, the Existing Facility, the
Commissioning of the Units and the
supply of Spare Parts limited to the
laws and statutes of the Republic of
Mali and, to the extent that the
same may be relevant, the Republic
of Cote d'Ivoire and environmental,
health and safety policies and
guidelines of the World Bank and
IFC.
"AVAILABLE" means that the Units are able to
deliver electrical energy at the
bus-bar specified in Part 4 of
Exhibit 3 and "Availability" shall
be construed accordingly.
-2-
"BALANCE OF FACILITY" means the Facility other than the
Units.
"BALANCE OF PLANT" means the equipment and plant listed
in Part 2 of Exhibit 3.
"BASE DATE" means 14 days following satisfaction
of the Suspensive Conditions.
"BOP PAYMENT" means the payment set out in Part 2
of Exhibit 10.
"BOP WARRANTIES" means those warranties given to
SOMISY in relation to either or both
the design and construction of the
Balance of Plant by one or more of
the Contractors.
"BUSINESS DAY" means a calendar day other than
a Saturday, a Sunday, a national
holiday in the Republic of Mali or a
day on which banks are authorised by
law or executive order to be closed
in the Republic of Mali.
"CATASTROPHIC TECHNICAL means a Fault or Faults occuring in
FAILURE" at least one (1) Unit which renders
the Facility inoperable to a level
at or below that set out in Section
10.2.4
"CHANGE IN LAW" means any of the following events
occurring after the date of
execution of this Agreement as a
result of, or in connection
with, any action or inaction by any
Competent Authority:
(a) a change in, or repeal of an
existing Applicable Law
(including any change in taxes
other than a change in rate of
any current taxes applicable to
Sypps as of the date of this
Agreement);
(b) an enactment or making of a new
Applicable Law (including any
change in taxes other than a
change in rate of any current
tax applicable
-3-
to Sypps as of the date of this
Agreement);
(c) a cancellation or non-renewal of
or change in the conditions
applicable to any authorisation
granted by a Competent Authority
to SOMISY, the Contractors or
any personnel supplied by Sypps
as technical support, unless due
to the failure by Sypps to
comply with its obligations
under this Agreement; or
(d) a change in the manner in which
an Applicable Law is applied or
interpreted by a Competent
Authority provided always that
if an assumption as to an
interpretation was made by Sypps
which was not verified with a
Competent Authority or based
upon information released by
such Competent Authority and is
found to be materially
incorrect, then the same shall
not constitute a Change in Law.
"COMMISSIONING" means the procedure by which it is
proved that theUnit is capable of
delivering electrical energy, ending
with passing the Completion Tests.
"COMMISSIONING COMMENCEMENT means the date on which
DATE" Commissioning is commenced.
"COMPETENT AUTHORITY" means with respect to the Republic
of Mali and, to the extent that it
may be relevant, the Republic of
Cote d'Ivoire, any ministry,
department, political sub-division,
instrumentality, agency, authority,
corporation or other organisation
under the direct or indirect control
of the government of such country,
-4-
court of competent jurisdiction or
other body exercising legislative,
executive, regulatory, administra-
tive or judicial or quasi judicial
functions or at any time asserting
any form of jurisdiction or de facto
control over the Parties in relation
to the Facility or any aspect of
this Agreement (or any transaction
or agreement contemplated herein).
"COMPLETION TESTS" means those tests set out in Part 1
of Exhibit 9.
"CONSENTS" means all permits, authorisations,
licences, exemptions, clearances,
consents or similar decision of any
kind which are required for the
construction, installation,
Commissioning, testing or completion
of the Facility.
"CONSIDERATION" means the financial consideration
for the transfer of title in the
Existing Facility from SOMISY to
Sypps as referred to in Section 6.2.
"CONSTRUCTION PHASE" means the period commencing from the
date of execution of this Agreement
and terminating on the last Relevant
Commercial Operations Date in time.
"CONTRACTOR" means any third party with whom
SOMISY enters into a contractual
arrangement to carry out any or all
of any work, services or supply of
equipment required for the Facility
in accordance with this Agreement.
"CPI" means the Consumer Price Index for
All Urban Consumers for the US City
Average for All Items as published
by the Bureau of Labor Statistics.
"CTF TERMINATION means that Termination Price payable
on termination of this Agreement as
a consequence of a Catastrophic
-5-
PRICE" Technical Failure.
"CUT-OFF DATE" means the date falling 6 weeks after
the date of this Agreement.
"DEFERRED PAYMENT PERIOD" means the period during which
payments are payable to Sypps under
this Agreement.
"DIRECT AGREEMENT" means the agreement appearing in
Exhibit 14.
"EF DEBT" means the debt falling due from
Sypps to SOMISY in relation to the
Existing Facility equal to the
amount of the Consideration.
"EF DEBT REPAYMENT" means an amount equal to 1/120 of
the Consideration and relates to the
Existing Facility only.
"ENERGY SUPPORT AGREEMENT" means the contract of even date
entered into by SOMISY and the
Operator.
"EXISTING FACILITY" means the equipment and plant listed
in Part 3 of Exhibit 3.
"EXISTING FACILITY PAYMENT" means the payment as set out
in Part 5 of Exhibit 10.
"EXISTING FACILITY WARRANTIES" means those warranties held by
SOMISY in relation to the Existing
Facility in respect of either or
both its design and construction.
"FACILITY" means the Plant, Balance of Plant
and Existing Facility.
"FACILITY DESIGN" means the design which meets the
Technical Requirements, prepared by
Sypps, provided to
-6-
SOMISY and to which SOMISY shall not
have objected or shall have approved
in accordance with Section 3.
"FACILITY DESIGN PROGRAMME" means the programme set out in
Exhibit 7.
"FAULT" means a problem with a Unit which
prevents it from producing 5.5MW or
more.
"FINAL PAYMENT" means the last payment to be paid by
SOMISY to Sypps in accordance with
Section 15.
"FINAL PAYMENT DATE" means the date that full and final
payment has been made
by SOMISY to Sypps pursuant to
Section 15 or Section 16.16.4.
"FIRST UNIT" means the first Unit in time
to be delivered pursuant to Section
4.
"FIXED DEFAULT AMOUNT" means the amount or amounts as
calculated in accordance with
Exhibit 13.
"FIXED SPARE PARTS PAYMENT" means the payment set out in Part 6
of Exhibit 10.
"FRENCH FRANCS OR FFR" means the lawful currency of the
Republic of France or such
other lawful currency that replaces
it.
"FUEL" means that fuel supplied by SOMISY
in accordance with Section 11.1.
"FUEL EFFICIENCY ADJUSTMENT has the meaning set forth in Part 4
PAYMENTS" of Exhibit 10.
"FUEL EFFICIENCY RATE" has the meaning set forth in Part 2
of Exhibit 8.
-7-
"FUEL SPECIFICATION" means that level of Fuel quality as
set out in Part 2 of Exhibit 9 which
is capable of being treated by the
centrifuge or other equipment to be
supplied as part of the Balance of
Plant.
"GOOD UTILITY PRACTICE" means the exercise of that degree of
skill, diligence, prudence,
foresight and operating practice
which would reasonably and
ordinarily be expected from a
skilled and experienced manufacturer
engaged in the same type of
undertaking under the same or
similar circumstances as in this
Agreement.
"GRM" means the government of the Republic
of Mali.
"GUARANTEED CONTRACTED means the lesser of the electrical
CAPACITY" demand required by the Mine and the
electrical capacity specified in
Part 1 of Exhibit 8 whether or not
the Mine is capable of receiving it.
"GUARANTEED FUEL EFFICIENCY has the meaning set forth in Part 2
RATE" of Exhibit 8.
"GUARANTEED LUBE OIL has the meaning set forth in Part 3
CONSUMPTION RATE" of Exhibit 8.
"IFC" means the International Finance
Corporation, an international
organisation established by Articles
of Agreement among its member
countries.
"INSURABLE EVENT" means all events and consequences of
an event against which the Parties
agree it is reasonable to expect to
be covered, and which shall be
covered, by the insurances listed in
Exhibit 5.
"KEY MILESTONE" means the key stages in the works as
identified in
-8-
"KEY MILESTONE DATE" Exhibit 12. means the dates for
achievement of each Key Milestone,
as set out in Exhibit 12.
"LUBE OIL CONSUMPTION has the meaning set forth in Part 4
ADJUSTMENT PAYMENTS" of Exhibit 10.
"LUBE OIL SPECIFICATION" means that level of lube oil quality
as set out in Part 4 of Exhibit 9.
"LUBE OIL CONSUMPTION RATE" has the meaning set forth in Part 3
of Exhibit 8.
"MINE" has the meaning set forth in the
Recitals.
"MINE MODIFICATIONS" means those modifications to be
carried out to the Mine to enable
the Mine to accept electrical
energy from, and to facilitate the
delivery of Fuel, lube oil and water
to, the Facility.
"NON-INSURABLE EVENT" means any event or circumstances or
combination of events or
circumstances which, or the effects
of which, materially and adversely,
affect the performance of that Party
of its obligations under or pursuant
to this Agreement provided:
(i) that no such event or
circumstance or combination
thereof shall constitute a
Non-Insurable Event if its
effects could reasonably have
been prevented by the affected
Party through the exercise of
its reasonable diligence and
reasonable care; and
-9-
(ii) no Insurable Event shall
constitute a Non-Insurable
Event unless insurance in
respect of that event shall not
be available in the market on
reasonable and commercial
terms.
"OFFSHORE ACCOUNT ARRANGEMENTS" means those arrangements set out in
Exhibit 2.
"OPERATIONAL PHASE" means the period ending on the Final
Payment Date unless this Agreement
is terminated earlier and commencing
on the Relevant Commercial
Operations Date.
"OPERATOR" has the meaning set forth in the
second recital of this Agreement.
"ORDER FORM" means a form substantially in the
form set out in Part 4 of Exhibit 4.
"PAYMENT MECHANISM" means the mechanism set out in Part
7 of Exhibit 10.
"PLANT" means the equipment listed in Part 1
of Exhibit 3.
"PLANT PAYMENT" means the payment set out in Part 1
of Exhibit 10
"PROJECT" means the construction,
installation, Commissioning and
testing of the Plant in accordance
with this Agreement.
"QUARTER DAY" means the 1st January, 1st April,
1st July and 1st October in any
year.
"RATE OF INTEREST" means a rate per annum equal to
LIBOR plus 2% where LIBOR
means, in respect of a Business Day
the three month US Dollar interbank
rate as
-10-
published in the Financial Times on
that Business Day.
"RELEVANT COMMERCIAL means, subject to Section 8.3, the
OPERATIONS DATE" date on which a Unit (and those
parts of the Facility which are
required for operation of that Unit
and which have not themselves
already passed the Completion Tests)
passes the Completion Tests.
"RELEVANT TARGET COMMERCIAL means the Relevant Commercial
OPERATIONS DATE" Operations Date calculated in
accordance with Part 1 of Exhibit 8.
"REUSABLE" means plant and equipment which can
be re-used for generation at another
location and includes, but is not
limited to, the equipment and plant
listed in Part 1 of Exhibit 6.
"SALVAGE" means plant and equipment which can
be used for purposes other than
generation, such as fill for
contractors' work and includes, but
is not limited to, the equipment and
plant listed in Part 2 of Exhibit 6.
"SHIPMENT SCHEDULE" means the schedule set out in Part 1
of Exhibit 4.
"SITE" means the lands, spaces, waterway,
roads and any surface and wayleaves
required for the Facility shown or
identified as such on the plan
referred to in Exhibit 15.
"SOMISY EVENT OF DEFAULT" has the meaning set forth in Section
16.6.
"SOMISY'S LENDERS" means the banks, institutions or
organisations or any agent or
trustees therefor making loans,
credit facilities or funding
arrangements available to, or
-11-
"SOMISY TERMINATION EVENT" providing debt finances for, SOMISY.
has the meaning set forth in Section
16.4.
"SOURCING" means in relation to an element of
the Balance of Plant, the
identification through competitive
tendering, or as may otherwise be
agreed between the Parties pursuant
to Section 5, of the supplier of
that element, and the term "Sourced"
shall be construed accordingly.
"SPARE PARTS" means those items of Plant and other
equipment to be supplied by Sypps
pursuant to Section 9 of this
Agreement.
"SPARE PARTS INVENTORY" means the inventory set out in Part
3 of Exhibit 4.
"SPARE PARTS PAYMENT" means the payment set out in Part 3
of Exhibit 10.
"SPARE PARTS SCHEDULE" means the schedule set out in Part 2
of Exhibit 4.
"SPOT FUEL EFFICIENCY" has the meaning set forth in Part 2
of Exhibit 8.
"SPOT FUEL EFFICIENCY TEST" has the meaning set forth in Part 2
of Exhibit 8.
"SPOT LUBE OIL CONSUMPTION" has the meaning set forth in Part 3
of Exhibit 8.
"SPOT LUBE OIL CONSUMPTION has the meaning set forth in Part 3
TEST" of Exhibit 8.
-12-
"SUSPENSIVE CONDITIONS" means those conditions to be
satisfied by SOMISY as set out in
Section 2.1.
"SYPPS EVENT OF DEFAULT" has the meaning set forth in Section
16.11.
"SYPPS' LENDERS" means the banks, institutions or
organisations or any agent or
trustees therefor making loans,
credit facilities or funding
arrangements available to or
providing debt finance to the
Project.
"SYPPS TERMINATION EVENT" has the meaning set forth in Section
16.9.
"TECHNICAL REQUIREMENTS" means those requirements set out in
Part 4 of Exhibit 3.
"TERM" means the period commencing on the
last Relevant Commercial Operations
Date in time and ending on the date
falling ten years thereafter.
"TERMINATION PRICE" means the relevant amounts
calculated in accordance with Parts
8, 9, 10 and 11 of Exhibit 10 as the
case may be.
"TEST CERTIFICATES" means the certificates issued
pursuant to Section 8.4.
"UNIT" means either of the two new
Rolls-▇▇▇▇▇ ▇▇▇▇▇ 5012 medium speed
generating sets to be supplied by
Sypps to SOMISY pursuant to the
Shipment Schedule.
"US DOLLARS OR US$" means the lawful currency of the
United States of America.
-13-
"WATER SPECIFICATION" means that level of water quality as
set out in Part 3 of Exhibit 9.
"WORLD BANK" means the International Bank for
Reconstruction and Development, an
international organisation
established by Articles of Agreement
among its member countries.
1.2 RULES OF INTERPRETATION
(a) The headings and references to them in this
Agreement shall not be deemed to be part of this
Agreement or be taken into consideration in the
interpretation or construction of this Agreement.
(b) References to Sections, Paragraphs, Parts and
Exhibits are references to sections, paragraphs and
parts of, and exhibits to, this Agreement. Where in
an Exhibit there is a reference to a paragraph
number, unless expressly stated otherwise, it shall
be a reference to a paragraph number in that
Exhibit.
(c) Words importing persons or parties shall include
firms, partnerships, corporations and any
organisations having legal capacity. Where the
context so requires, words importing the singular
only shall also include the plural and vice versa
and words importing the masculine shall be construed
as including the feminine or the neuter or vice
versa.
(d) Wherever in this Agreement provision is made for the
giving or issuing of any notice, endorsement,
consent, declaration, approval, certificate or
determination by any person unless otherwise
specified, such notice, endorsement, consent,
declaration, approval, certificate or determination
shall be in writing and words such as "notify",
"endorsed", "consent",
-14-
"declare", "approved", "certifying" or "determined"
shall be construed accordingly.
(e) References to any enactment (including any
subordinate legislation) are to be construed as
references to that enactment as for the time being
amended or modified or to any enactment for the time
being replacing or amending the same.
(f) References to any agreement or document include
(subject to all relevant approvals) a reference to
that agreement or document as amended, supplemented,
substituted, novated or assigned.
(g) Any reference to a public organisation shall be
deemed to include a reference to any successor to
such public organisation or any organisation or
entity which has taken over any of the functions and
responsibilities of such public organisation.
(h) The words in this Agreement shall bear their natural
meaning. The parties have had the opportunity to
take legal advice on this Agreement and no term
shall, therefore, be construed contra proferentem.
(i) The text of this Agreement as signed by the Parties
(and amended from time to time in accordance with
Section 21.1) shall be the exclusive, original and
decisive text for the purpose of the interpretation
or construction of this Agreement. No translation
shall be taken into consideration in the
interpretation or construction of this Agreement.
(j) Except where otherwise specifically provided in this
Agreement, all correspondence, notices, drawings,
designs, test reports, certificates, specifications
and information shall be in the English language.
All operating and maintenance instructions, name and
rating plates, identification labels, instructions
and notices to the public and staff and all other
-15-
written and printed matter required for operation
and maintenance shall be executed in the English or
French language.
SECTION 2
INITIAL CONDITIONS
2.1 SUSPENSIVE CONDITIONS
This Agreement shall come into immediate effect upon the execution
hereof save that the obligations of Sypps under Sections 4, 8, and 9
shall come into effect only
2.1.1 when SOMISY has produced to Sypps in the form and substance
satisfactory to it:
(i) evidence of the issue of the decree ratifying the
convention between GRM and SOMISY as to the
establishment and exploitation of the Mine; and
(ii) the form of guarantee from Randgold Resources Limited
and Randgold & Exploration Company Limited, or such
other party or parties determined in accordance with
Section 16.6.6, substantially in the terms set out in
Exhibit 1.
2.2 FAILURE TO SATISFY SUSPENSIVE CONDITIONS
If SOMISY shall fail to satisfy or procure the satisfaction of the
Suspensive Conditions set out in Section 2.1 prior to the Cut-off
Date, or such other date as is agreed in writing by the Parties, then
Sypps may in its absolute discretion either waive such Suspensive
Condition or terminate this Agreement in accordance with Section
16.3.1(a).
-16-
2.3 LENDERS' ISSUES
In the event that either SOMISY's Lenders, Sypps' Lenders or both (as
the case may be) propose any amendments to, or make any comments on,
this Agreement within 30 Business Days following satisfaction of the
Suspensive Conditions set out in Section 2.1, which may materially
affect the financing of the Project, the Mine or both (as the case
may be), the relevant Party shall give notice to the other Party of
such proposed amendments or comments and the Parties shall meet
within 10 Business Days of such notice and shall use reasonable
commercial endeavours to agree any amendments to this Agreement and,
if the Parties so agree, to amend this Agreement in accordance with
Section 21.1.
2.4 RATIFICATION BY SYAMA POWER PLANT SALES LIMITED
If and when the majority owned subsidiary of Rolls-Royce Power
Ventures Limited to be called Syama Power Plant Sales Limited (or
such other name as may be required by the relevant authorities in the
jurisdiction in which such susidiary is to be incorporated and
registered) is properly incorporated and registered, Rolls-Royce
Power Ventures Limited shall cause the said subsidiary to give notice
to SOMISY and therefrom the said subsidiary shall be responsible to
SOMISY for the obligations of Sypps under this Agreement and shall be
entitled to the benefits hereunder to the exclusion of Rolls-Royce
Power Ventures Limited.
2.5 OFFSHORE ACCOUNT ARRANGEMENTS
The Parties shall take all steps necessary to give effect to the
Offshore Account Arrangements as set out in Exhibit 2.
-17-
SECTION 3
DESIGN
3.1 SUPPLY OF FACILITY DESIGN
To the extent that the same shall not have been delivered prior to
the date hereof, Sypps shall supply to SOMISY as soon as is
practicable but in any event in accordance with the Facility Design
Programme designs for the Facility to such extent as will enable
SOMISY to procure the Balance of Plant. Within 10 Business Days of
receipt of the relevant part of the designs SOMISY shall notify Sypps
of either or both any clashes between the design of the Facility and
the design of the Mine and any failure of that design to meet the
Technical Requirements in Part 4 of Exhibit 3. Within 10 Business
Days of such notification Sypps shall resubmit the amended design of
the Facility and the provisions of this Section 3.1 shall apply to
such resubmitted design. If within 10 Business Days of the submission
of any design SOMISY shall not have objected to the same or has
signified to Sypps its approval of such design then the same shall be
incorporated in the Facility Design.
3.2 SOMISY CONSENTS
SOMISY shall, at its own cost and in a timely manner, obtain any
Consent required to install, commission, operate and maintain the
Facility in conformity with the Facility Design and the provisions of
this Agreement.
3.3 BALANCE OF PLANT
SOMISY shall procure from the consultant nominated by Sypps prior to
the date of this Agreement the provision of the re-engineering and
redesign of the Existing Facility at Syama and shall procure all shop
drawings and other fabrication detail designs to be carried out by
the Contractors.
-18-
3.4 REVIEW OF DOCUMENTS
3.4.1 Any design documents and other related design information to
be prepared by the Contractors in connection with the
Facility shall be submitted to Sypps who shall only raise
objection on the grounds of safety, operability or
non-compliance with the Facility Design. Any objection
together with reasons shall be raised within 10 days of
receipt by Sypps of the same.
3.4.2 Where any document or information has been provided to Sypps
pursuant to this Section 3.4, SOMISY shall ensure that any
such design document or information shall not be implemented
until the time has expired for raising an objection thereto
or, if an objection is raised, until any revised design has
been submitted to Sypps and the period for non-objection has
passed (again without there being any objection).
3.5 MINE MODIFICATIONS DESIGN
The Parties recognise that in order to obtain efficiency in design
SOMISY shall retain the same consultant engaged to carry out the
design pursuant to Section 3.3 to design the Mine Modifications.
SECTION 4
PLANT
4.1 DELIVERY
Subject to the provisions of Sections 6 and 13, Sypps shall deliver
to SOMISY all the Plant ex works at the place of manufacture in
accordance with the Shipment Schedule in order for SOMISY to arrange
transit of the Plant to the Site.
-19-
4.2 NOTIFICATION
On each and every occasion on which a shipment of Plant, including
for the avoidance of doubt the First Unit, shall be ready for
collection by SOMISY, Sypps shall furnish to SOMISY not later than 15
Business Days before the expected date of that shipment of Plant and
where practical by electronic data interchange:
4.2.1 a pro-forma invoice for that shipment detailing the Plant
and showing its value expressed in Ffr at the rate ruling on
the last Business Day immediately before its preparation;
4.2.2 the date such Plant will be ready for collection;
4.2.3 the location of the works from which the shipment is to be
made being in any of the United Kingdom, Finland or South
Africa;
4.2.4 where the Plant shall have been packaged, details of its
packaging; and
4.2.5 any other details which SOMISY shall reasonably require to
facilitate delivery of the shipment to Site and to enable
SOMISY to achieve permission from the relevant customs
authorities for that purpose.
4.3 NOTIFICATION OF TRANSIT
Within 10 Business Days of the arrival of each shipment of the Plant
at the Site SOMISY shall notify Sypps, or cause Sypps to be notified,
of:
4.3.1 details of the Plant included in that shipment;
4.3.2 the date on which such delivery arrived at the Site; and
4.3.3 in the case of any damage having occurred in transit,
sufficient documentary evidence of such damage as Sypps
shall reasonably require in order to claim against either or
both insurers and shippers of that shipment.
-20-
4.4 SOMISY shall be responsible for the safe storage at the Site
of each shipment of Plant until the Balance of Plant is
ready to receive the same.
SECTION 5
BALANCE OF PLANT AND MINE MODIFICATIONS
5.1 OBLIGATIONS OF SOMISY
SOMISY shall:
5.1.1 supply the Balance of Plant pursuant to Part 2 of Exhibit 3;
and
5.1.2 procure the installation of the Plant and the Balance of
Plant under the supervision of the Operator; and
5.1.3 require the Operator to Commission theUnits, and provide
sufficient labour and related resources to enable the
Operator to do so,
in accordance with the Facility Design.
5.2 KEY MILESTONES
SOMISY shall carry out the Balance of Plant so that each stage is
completed to the level required to achieve the relevant Key Milestone
by the relevant Key Milestone Date as set out in Exhibit 12. Where
work is required to be carried out to the Existing Facility then
provided that the same is carried out in accordance with the Facility
Design SOMISY shall be deemed to have been authorised by Sypps to
have procured those works notwithstanding that title in the Existing
Facility shall have passed to Sypps.
-21-
5.3 SOURCING BY SYPPS
There appears in Part 2 of Exhibit 3 those items of the Balance of
Plant the supply of which are to be Sourced by Sypps. In respect of
those items unless the Parties otherwise agree in writing, Sypps
shall carry out competitive tender procedures on terms agreed between
the Parties in relation to such supply and shall furnish to SOMISY a
report on the tenders received with a recommendation as to the
preferred tender and the reasons for that preference.
5.4 PROCUREMENT
Notwithstanding the provisions of Section 5.3 all the Balance of
Plant shall be procured by SOMISY and where the provisions of Section
5.3 apply unless there shall be a mathematical error in the
recommendation given under Section 5.3 as a consequence of which the
recommendation shall be amended, SOMISY shall enter into a contract
with each supplier so recommended in substantially the same terms as
submitted by SOMISY to Sypps prior to the commencement of the
competitive tender procedures.
5.5 MINE MODIFICATIONS
The Parties recognise the benefit of engaging the same Contractors to
carry out the Mine Modifications as are engaged to carry out the
Balance of Plant works. If the costs thereof when aggregated with the
costs of the Balance of Plant do not exceed the sum appearing in
Section 12.1.1 then the costs of executing the Mine Modifications may
at SOMISY's option be included in the costs of the Balance of Plant
so as to avoid separate accounting by the said Contractors. The
Parties agree, however, that Sypps shall have no liability for the
Mine Modifications including, for the avoidance of doubt, no
liability for operation and maintenance of the Mine Modifications,
and notwithstanding the provisions of Section 6, ownership in the
Mine Modifications shall remain with SOMISY.
5.6 PROJECT MANAGEMENT
SOMISY shall engage the Operator to monitor and supervise the
execution of the works for the Balance of Plant and to assist SOMISY
in the management of the
-22-
procurement of the Balance of Plant and to assist in the
Commissioning of the Units.
5.7 BOP AND EXISTING FACILITY WARRANTIES
SOMISY shall to the extent that they are assignable and after
assignment enforceable by Sypps assign the BOP Warranties and
Existing Facility Warranties to Sypps or, if they are not so
assignable and enforceable, seek to enforce the same for the benefit
of Sypps on request by Sypps.
SECTION 6
TITLE
6.1 SURPLUS ITEMS
There are at the Site certain existing structure and components
currently used in connection with the generation of electricity. To
the extent that these structures and components do not form part of
the Existing Facility, SOMISY shall cause the same to be removed as
part of the works for the Balance of Plant when they have been
declared redundant by Sypps . Title in those structures and
components shall remain vested in SOMISY.
6.2 EXISTING FACILITY
Title in the Existing Facility shall pass from SOMISY to Sypps on
satisfaction of all of the Suspensive Conditions referred to in
Section 2.1, however responsibility for the operation and maintenance
of the Existing Facility shall remain with SOMISY until the Final
Payment Date, or such other extended date as the Parties may agree
pursuant to Section 15.2. The Consideration for such transfer shall
be US$8 million accountable in accordance in with Section 12.1.3.
-23-
6.3 TITLE IN THE BALANCE OF PLANT
Title in the Balance of Plant or any part thereof shall pass from
SOMISY to Sypps on the date that the same shall pass the Completion
Tests.
6.4 RESERVATION OF TITLE
6.4.1 Notwithstanding any terms implied by law or by business
convention no title in any of the Plant nor in any of the
Spare Parts shall pass to SOMISY unless and until the Final
Payment Date has occurred. Until then, notwithstanding the
fact that any or all of the Plant may be physically attached
to the Balance of Plant or that any of the Spare Parts may
be attached to the Plant or Balance of Plant, the Plant and
the Spare Parts shall be deemed to be Reusable and title in
the Plant and the Spare Parts shall remain vested in Sypps.
6.4.2 Notwithstanding any terms implied by law or by business
convention following the transfer of title in either or both
of the Balance of Plant and the Existing Facility no title
in any of the Balance of Plant or the Existing Facility as
the case may be shall pass to SOMISY unless and until the
Final Payment Date has occurred.
6.5 REUSABLE AND SALVAGE
The Parties recognise that under the mining convention between SOMISY
and GRM there is an obligation for SOMISY to remove all assets
including the Facility upon expiry or earlier termination of that
convention and accordingly the same does not fall within domain
public. As between the Parties the assets incorporated in the
Facility are identified as between Reusable and Salvage.
6.6 RESTRICTION ON DEALING
Until the Final Payment Date SOMISY shall not be entitled to nor
shall it purport to sell, transfer, lease, charge, assign by way of
security or otherwise deal in or encumber the Facility and the
relationship between Sypps and SOMISY in respect
-24-
of the Facility including any proceeds of sale or other consideration
therefor shall be a fiduciary one.
SECTION 7
SITE CONDITION
7.1 GROUND AND SITE CONDITION
SOMISY shall satisfy itself and, to the extent it shall not have done
so at the date hereof, cause to be carried out as part of the Balance
of Plant works, studies as to the nature of the climatic,
hydrological and general conditions of the Site, the nature of the
ground and subsoil, the form and nature of the Site, the risk of
injury or damage to property adjacent to the Site and to occupiers of
such property, the nature of the materials (whether natural or
otherwise) to be excavated, the nature of the design, work and
materials necessary for the execution of the works; and shall provide
written information to Sypps in relation to the above.
7.2 RELIANCE ON INFORMATION
Sypps shall be entitled to rely on the information provided by SOMISY
pursuant to Section 7.1 unless there shall be a manifest error in
that information in which case, Sypps shall notify SOMISY within 28
days of receipt of the same and, unless the Parties otherwise agree,
SOMISY shall cause the study to be re-executed.
7.3 AS FOUND CONDITIONS
If, whilst the same is being carried out, the works for the Balance
of Plant shall reveal that the ground or other conditions as found
are not those which were revealed by the information provided by
SOMISY pursuant to Section 7.1 then SOMISY shall notify Sypps who
shall, to the extent necessary, amend the design in accordance with
the procedures contained in Section 3.1 and SOMISY shall issue a
variation or change order under the relevant contract for the Balance
of Plant. The costs so incurred shall be added to and become part of
the BOP Payment and the additional amounts properly payable by SOMISY
to the
-25-
Contractors in respect thereof shall be recoverable by SOMISY in
accordance with Section 12.1.1.
SECTION 8
COMMISSIONING OF UNITS
8.1 MINE AND OPERATOR'S STAFF
SOMISY shall be responsible for ensuring that prior to the
Commissioning Commencement Date (i) the Mine is capable of taking
load from the Facility; and (ii) the relevant staff of the Operator
are available on the Site to supply the copy Test Certificates in
accordance with Section 8.4.
8.2 COMMISSIONING
Where Commissioning is to be carried out in respect of sections of
the Facility capable of generation and supply of energy to the Mine,
the provisions of this Section 8 shall apply in respect of each such
section of the Facility mutatis mutandis.
8.3 RELEVANT COMMERCIAL OPERATIONS DATE
The Relevant Commercial Operations Date shall be deemed to have been
achieved on the earlier of:
8.3.1 15 weeks after notification that the relevant shipment of
Plant is ready for collection in accordance with Section
4.2;
8.3.2 8 weeks after the date on which SOMISY notifies Sypps that
the relevant Unit is ready to start the Completion Tests;
and
8.3.3 the date on which the relevant Unit passes the Completion
Tests,
provided always that to the extent that the Relevant Commercial
Operations Date of the relevant Units shall not have expired, the
periods under Sections 8.3.1 and 8.3.2 above shall be extended day
for day in respect of any failure to pass the Completion Tests due to
any default by Sypps.
-26-
8.4 TEST CERTIFICATE
SOMISY shall cause the Operator to supply to Sypps and SOMISY a copy
of the Test Certificates to confirm that the Units have achieved the
Technical Requirements set out in Part 4 of Exhibit 3 and have passed
the Completion Tests.
8.5 MANUALS AND RECORDS
Prior to the Relevant Commercial Operations Date Sypps shall provide
at the request of SOMISY to the Operator draft operation and
maintenance manuals and shall assist SOMISY in the preparation of
draft as-built drawings. Not later than 6 months after the last
Relevant Commercial Operations Date in time Sypps shall provide to
the Operator operation and maintenance manuals and upon submission to
it by SOMISY of the draft as-built drawings will review the same with
a view to assisting it in the finalisation of the as-built drawings.
In addition Sypps shall furnish to SOMISY proformas of the operation,
maintenance, Plant running and other records which would ordinarily
be kept in accordance with Good Utility Practice.
SECTION 9
SPARE PARTS
9.1 INITIAL SPARE PARTS
9.1.1 Prior to the date to be calculated in accordance with
Section 8.3 Sypps shall supply to SOMISY the Spare Parts
detailed in the Spare Parts Inventory as set out in Part 3
of Exhibit 4, or such other Spare Parts as Sypps may in its
absolute discretion require. Unless the Parties shall
otherwise agree Sypps shall supply all Spare Parts ex works
(in which case, the provisions of Section 4.1 shall apply
mutatis mutandis).
9.1.2 Following each Relevant Commercial Operations Date, or such
other date agreed by the Parties, in the event that a Spare
Part is required for any of that Unit, its associated Plant
and related Balance of Plant by
-▇▇-
▇▇▇▇▇▇, ▇▇▇▇▇▇ shall cause the Operator to deliver an Order
Form to Sypps substantially in the form set out in Part 4 of
Exhibit 4. Sypps shall use its reasonable endeavours to
deliver ex works the Spare Parts detailed in such order
within the time periods for such delivery in accordance with
the Spare Parts Schedule.
9.2 STORAGE FACILITIES
SOMISY shall provide storage facilities which, in the reasonable
opinion of Sypps are sufficient to store the Spare Parts detailed in
the Spare Parts Inventory, or such other Spare Parts as Sypps may in
its absolute discretion require, in a secure and safe manner so as to
prevent damage to the Spare Parts and to the standard required in
order that when the same have been incorporated in the Plant they can
be used in accordance with Good Utility Practice.
9.3 SPARE PARTS PAYMENT
Sypps shall be entitled to receive the Spare Parts Payment and the
Fixed Spare Parts Payment in accordance with Section 12.
9.4 SPARES FOR BALANCE OF FACILITY
For the avoidance of doubt, SOMISY shall be responsible for
procurement of, and payment for, the spare parts required for the
Balance of Facility.
SECTION 10
INCENTIVE REGIME
10.1 BASIS OF REGIME
The payment regime under Section 12.2 will be subject to an incentive
regime based upon a Guaranteed Contracted Capacity, Guaranteed Fuel
Efficiency Rate and Guaranteed Lube Oil Consumption Rate, provided
that:
10.1.1 the Energy Support Agreement remains extant; or
-28-
10.1.2 in the event that the Energy Support Agreement is
terminated, a replacement contract is entered into by SOMISY
after termination of the Energy Support Agreement, and:
(a) SOMISY shall have notified Sypps of the identity of
the operator pursuant to such replacement contract
prior to the commencement of the term; and
(b) Sypps shall have approved of such operator in writing
prior to the commencement of such term (such approval
to be based on a reasonable evaluation of such
operator's competency and experience in respect of
operation of electricity generating facilities of the
same type, kind and quality as the Facility).
10.2 AVAILABILITY OF GUARANTEED CONTRACTED CAPACITY
10.2.1 Subject to Section 10.1, during the Deferred Payment Period
and subject to the terms and conditions of this Agreement,
Sypps shall guarantee that the Unit shall be Available in
accordance with the Guaranteed Contracted Capacity.
10.2.2 SOMISY shall require the Operator to furnish to Sypps within
3 Business Days of the end of each month a statement showing
the meter readings for energy produced during that month
(such meter readings, unless adjusted in accordance with the
Energy Support Agreement, shall be final and binding on both
Parties) together with a report showing the scheduled and
non-scheduled outages occurring during that month.
10.2.3 If the Units have not provided Availability in accordance
with the Guaranteed Contracted Capacity pursuant to Section
10.2.1 Sypps shall pay SOMISY liquidated damages for the
shortfall in Availability of the Guaranteed Contracted
Capacity calculated in accordance with Part 4 of Exhibit 10.
Such damages shall be deductible from the payments otherwise
to be made by SOMISY to Sypps pursuant to Section 12 to the
extent that the calculation of such damages is undisputed by
the Parties. If either Party wishes to dispute that the
calculation of such
-29-
damages is not in accordance with the formula or that any of
the inputs other than the definition of LD are incorrect, it
shall notify the other Party in writing of the existence of
such dispute within 14 days. The dispute shall be resolved
in accordance with the provisions of Section 17 and all
amounts subsequently agreed or determined to be due and
payable shall be paid by Sypps to SOMISY within seven days
of resolution or determination of such dispute.
10.2.4 If following the last Relevant Commercial Operations Date in
time the Availability of the Units shall fall below 2.5MW
for a continuous period exceeding 45 days due to a
Catastrophic Technical Failure then:
(i) SOMISY shall reduce the load of the Mine by
inter alia closing down such parts of the
Mine as are necessary for that purpose;
(ii) Sypps shall, at Sypps' cost, seek to acquire
temporary emergency hire generating sets
sufficient to meet the load referred to above
and to install the same at the Site within 21
days of the reduction of the load in
accordance with paragraph (i) above;
(iii) if Sypps shall be unable or unwilling to
acquire the emergency hire generating sets in
accordance with paragraph (ii) above then
without prejudice to its other rights
hereunder SOMISY may seek to obtain emergency
hire generating sets in substitution for
those to be otherwise acquired by Sypps;
(iv) Sypps shall use all prudent and commercial
endeavours to cause the reinstatement of the
Units back to the Guaranteed Contracted
Capacity but if it shall fail so to do within
a period of 9 months following the reduction
in load under paragraph (i) above then either
Party may give notice to the other
-30-
and such notice shall be treated as if it
were a notice by SOMISY pursuant to
Sections 16.11.2 and 16.12.1;
(v) Until either Sypps shall have caused the
reinstatement of the Units back to not less
than the Guaranteed Contracted Capacity
pursuant to paragraph (iv) above, or notice
shall have been given pursuant to paragraph
(iv) above, the maximum liability of Sypps
shall not exceed an amount equivalent to 12 x
PPo where PPo is as defined in Part 1 of
Exhibit 10.
10.3 GUARANTEED FUEL EFFICIENCY RATE
10.3.1 Subject to Section 10.1, during the Deferred Payment Period
and subject to the terms and conditions of this Agreement,
Sypps shall guarantee to SOMISY the Guaranteed Fuel
Efficiency Rate for the Units.
10.3.2 Within 20 Business Days of each Quarter Day following a
Relevant Commercial Operations Date SOMISY shall cause the
Operator to calculate the Fuel Efficiency Rate of the Units
in accordance with the procedure set out in Part 2 of
Exhibit 8.
10.3.3 SOMISY shall ensure that the Operator shall monitor the
devices to be used to measure the ambient temperature and
will incorporate those readings accurately in any
calculation referred to in Section 10.3.2. If Sypps shall
request SOMISY for copies of those readings SOMISY will
ensure that the Operator delivers to Sypps the same within
10 Business Days of that request.
10.3.4 If the results of the calculation carried out pursuant to
Section 10.3.2 above are different from the Guaranteed Fuel
Efficiency Rate then the variation shall be calculated in
accordance with Part 2 of Exhibit 8.
10.4 GUARANTEED LUBE OIL CONSUMPTION RATE
-31-
10.4.1 Subject to Section 10.1, during the Deferred Payment Period
and subject to the terms and conditions of this Agreement,
Sypps shall guarantee to SOMISY the Guaranteed Lube Oil
Consumption Rate for the Units.
10.4.2 Within 20 Business Days of the end of each 12 month period
following a Relevant Commercial Operations Date SOMISY shall
cause the Operator to calculate the Lube Oil Consumption
Rate of the Units in accordance with the procedure set out
in Part 3 of Exhibit 8.
10.4.3 SOMISY shall ensure that the Operator shall monitor the
devices to be used to measure the ambient temperature and
will incorporate those readings accurately in any
calculation referred to in Section 10.4.2. If Sypps shall
request SOMISY for copies of those readings SOMISY will
ensure that the Operator delivers to Sypps the same within
10 Business Days of that request.
10.4.4 If the results of the calculation carried out pursuant to
Section 10.4.2 above are different from the Guaranteed Lube
Oil Consumption Rate then the variation shall be calculated
in accordance with Part 3 of Exhibit 8. In the event that
the result of such calculation is positive then SOMISY shall
be entitled to invoice Sypps for the Lube Oil Consumption
Adjustment Payment. In the event that the result of such
calculation is negative Sypps shall be entitled to invoice
SOMISY for the Lube Oil Consumption Adjustment Payment.
10.5 NO GUARANTEES IN RESPECT OF BALANCE OF FACILITY
For the avoidance of doubt, Sypps does not guarantee the
availability, fuel consumption rate, lube oil consumption rate or any
other parameter relating to performance of the Balance of Facility.
SECTION 11
FUEL, WATER AND LUBE OIL
11.1 SUPPLY
-32-
SOMISY shall be responsible for the supply of:
11.1.1 Fuel in accordance with the Fuel Specification;
11.1.2 water in accordance with the Water Specification;
11.1.3 lube oil in accordance with the Lube Oil Specification; and
11.1.4 other consumables except for those set out in the list of
Spare Parts referred to in Part 3 of Exhibit 4.
11.2 TESTING
11.2.1 SOMISY shall ensure that prior to the discharge from the
road tanker on delivery of Fuel to the Facility the Operator
carries out tests on that Fuel pursuant to the Energy
Support Agreement to verify the fact that all Fuel meets the
Fuel Specification as set out in Part 2 of Exhibit 9.
11.2.2 SOMISY shall ensure that the Operator carries out random
tests on the supply of water at intervals not exceeding
seven (7) days to verify the fact that all water meets the
Water Specification as set out in Part 3 of Exhibit 9.
11.2.3 SOMISY shall ensure that the Operator carries out tests on
all lube oil supplied to the Facility prior to such lube oil
being discharged into the lube oil tanks or used in the
Facility to verify the fact that all lube oil meets the Lube
Oil Specification as set out in Part 4 of Exhibit 9.
11.2.4 SOMISY shall ensure that the Operator provides not less than
monthly copy test certificates relating to each and every
delivery of Fuel and lube oil and relating to the water to
both SOMISY and Sypps.
11.3 FAILURE OF TESTS
11.3.1 In the event that the test certificates provided pursuant to
Section 11.2.4 indicate that a delivery of Fuel does not
satisfy the Fuel Specification then SOMISY shall reject the
same. If it shall fail so to do or if the Fuel
-33-
tanks are filled or replenished with Fuel which has not been
tested in accordance with Section 11.2.1, then until the out
of specification Fuel shall have been removed and the Fuel
tanks flushed and cleansed, Sypps shall be relieved, to the
extent to which it is reasonable, of all obligations
relating to Availability, Fuel Efficiency Rate and Lube Oil
Consumption Rate of the Units and shall be entitled to
continue to receive payments in accordance with Section 12.
11.3.2 In the event that the test certificates provided under
Section 11.2.4 indicate that the water does not satisfy the
Water Specification then to the extent that continued
operation of one or more Units would not be in accordance
with Good Utility Practice, Sypps shall, to the extent to
which it is reasonable, be relieved of all obligations
relating to Availability, Fuel Efficiency Rate and Lube Oil
Consumption Rate of the Plant and shall be entitled to
continue to receive payments in accordance with Section 12.
11.3.3 In the event that test certificates provided pursuant to
Section 11.2.4 indicate that a delivery of lube oil does not
satisfy the Lube Oil Specification then SOMISY shall reject
the same. If it shall fail to do so or if the lube oil tanks
are filled or replenished with lube oil which has not been
tested in accordance with Section 11.2.3, then until the out
of specification lube oil shall have been removed and the
lube oil tanks flushed and cleansed, Sypps shall, to the
extent to which it is reasonable, be relieved of all
obligations relating to Availability, Fuel Efficiency Rate
and Lube Oil Consumption Rate of the Plant and shall be
entitled to continue to receive payments in accordance with
Section 12.
11.4 WASTE
SOMISY shall be responsible for the disposal of the sludge from the
centrifuge or other Fuel cleansing equipment and for the disposal of
the waste lube oil and other used consumables and Sypps shall not be
required to provide as part of the Plant facilities for the retention
or disposal of the same.
-34-
SECTION 12
ACCOUNTING
12.1 BALANCE OF PLANT AND EXISTING FACILITY ACCOUNT
12.1.1 In each month during the period up to and including the
month in which the last Relevant Commercial Operations Date
in time occurs SOMISY shall submit monthly accounts to Sypps
in respect of the Balance of Plant procured by SOMISY in
respect of payments made by SOMISY to Contractors up to a
total aggregate not exceeding US$4.0 million.
12.1.2 In the event that the aggregate of the monthly accounts
submitted by SOMISY in accordance with Section 12.1.1 exceed
the figure referred to in Section 12.1.1, the amount by
which such aggregate exceeds the said figure shall be borne
by SOMISY with no recourse to Sypps.
12.1.3 On the last Relevant Commercial Operations Date in time
Sypps shall owe to SOMISY a sum equal to the Consideration,
such amount being the EF Debt as between the Parties. Unless
this Agreement shall be terminated pursuant to Section 16
(in which case the consequences shall be dealt with in
accordance with Section 16.16) then the EF Debt shall be
redeemed only in accordance with Part 5 of Exhibit 10. Each
month Sypps shall invoice SOMISY an amount equal to 1/120 of
the Consideration.
12.2 FACILITY AND SPARES
In each month of the Deferred Payment Period and following a Relevant
Commercial Operations Date, Sypps shall submit to SOMISY by the
seventh day of that month an invoice expressed in US Dollars showing
the amounts due:
12.2.1 in respect of the Plant, the Plant Payment calculated in
accordance with Part 1 of Exhibit 10; and
-35-
12.2.2 in respect of the BOP, the BOP Payment calculated in
accordance with Part 2 of Exhibit 10; and
12.2.3 in respect of Spare Parts which are dependent on hours run,
the Spare Parts Payment calculated in accordance with Part 3
of Exhibit 10; and
12.2.4 in respect of the Existing Facility, the Existing Facility
Payment calculated in accordance with Part 5 of Exhibit 10;
12.2.5 in respect of Spare Parts which are not dependent on hours
run, the Fixed Spare Parts Payment calculated in accordance
with Part 6 of Exhibit 10; and
12.2.6 in respect of the incentive payments calculated pursuant to
Section 10 (either as an amount due from SOMISY to Sypps or
as an amount due from Sypps to SOMISY) calculated in
accordance with Part 4 of Exhibit 10.
12.3 SETTLEMENT OF INVOICE
Any invoice delivered pursuant to Section 12.2 shall show amounts due
net of tax and SOMISY shall settle such invoice delivered in
accordance with Section 12.2 or any undisputed part of such invoice
within 30 days of the date of its receipt.
12.4 INTEREST
Without prejudice to Sypps's right to receive payment on the due
date, if and to the extent that payment is not received on the due
date, interest shall accrue on any sum due and payable to Sypps and
outstanding from the due date for payment until receipt of such
payment at the Rate of Interest (or such other rate as may be
specified in this Agreement in respect of such payment) calculated on
a daily basis and on the basis of a 365 day year.
12.5 BUSINESS DAY
Where a payment falls to be made on a day which is not a Business
Day, it shall be paid on the next following Business Day.
-36-
12.6 TAXATION
All amounts payable under this Agreement by SOMISY to Sypps shall be
paid free and clear of any assessment under Mali law to tax
deductions or withholdings unless the assessment to tax deduction or
withholding is required by law, in which event the amount payable by
SOMISY shall be increased so as to ensure that the net amount
received by Sypps will equal the full amount which it would have
received had the benefit had no such assessment, deduction or
withholding been made or incurred.
12.7 DISPUTED INVOICES
If SOMISY wishes to dispute any amount (or any part of an amount) set
out in an invoice delivered pursuant to Section 12.2, SOMISY shall
notify Sypps in writing of the existence of such dispute within 14
days of receipt of the relevant invoice. The dispute shall be
resolved in accordance with the provisions of Section 17 and all
amounts subsequently agreed or determined to be due and payable
including interest at the Rate of Interest shall be payable within
seven days of resolution or determination of such dispute.
12.8 STATEMENT ERRORS
In the event that either Party becomes aware of an error in a
statement such Party shall as soon as reasonably practical after the
discovery of the error notify the other Party of such error and Sypps
or SOMISY (as the case may be) shall pay any amount due to the other
without the addition of any interest in respect of such error within
ten (10) Days of such notification, provided that no adjustment shall
be made in respect of any statement in respect of which notification
is given more than two years after the date of such statement.
12.9 PLACE, TIMING AND CURRENCY OF PAYMENT
12.9.1 Notwithstanding anything to the contrary in this Agreement,
all payments to be made by either Party under this
Agreement, however denominated, shall be payable in US
Dollars in accordance with this Section 12.9.
-37-
12.9.2 Any payment that becomes due and payable on a day that is
not a Business Day shall if not paid on the preceding
Business Day be paid on the next succeeding Business Day
12.10 RECORDS
Unless otherwise provided herein, either Party shall have the right,
upon reasonable prior written notice to the other Party, to either
examine or make copies or both (as the case may be) of the records
and data of the other Party relating to this Agreement at any time
during normal business hours during the period such records and data
are required to be maintained. All such records and data shall be
maintained for a minimum of two (2) years after the creation of such
records or data and for any additional time period required under
Applicable Law.
SECTION 13
INSURANCE
13.1 INSURANCES REQUIRED
13.1.1 SOMISY shall, at its own cost and expense obtain and
maintain, or cause to be obtained and maintained, from the
date of this Agreement the policies of insurance, the
minimum requirements of which are set out in Exhibit 5 in
the amounts specified and during the period or periods
mentioned in Exhibit 5. Sypps shall be named as one of a
number of insureds with a severable interest on any such
insurance procured by SOMISY.
13.1.2 SOMISY shall be free at any time to increase the amounts of
cover above the amounts therein specified, but SOMISY shall
not reduce such amounts without the prior written consent of
Sypps.
13.1.3 SOMISY shall not be in breach of its obligations hereunder
if and to the extent that any particular insurance is
unavailable to it under
-38-
commercially reasonable terms except where such
non-availability shall be due to the act or neglect of
SOMISY.
13.1.4 If and to the extent an Insurable Event ceases to be
insurable at reasonable commercial terms then the Parties
shall meet to discuss methods of addressing the issue and
unless the reason for the insurance no longer being so
available shall arise out of the act or neglect of SOMISY
then until insurance shall be so available at commercial
terms the previously Insurable Event shall be deemed to be a
Non-Insurable Event.
13.2 SOMISY shall cause its insurers or agents to provide to
Sypps copies of the insurance policies, certificates of
insurance evidencing such policies and endorsements listed
above. Failure by SOMISY to obtain the insurance coverage or
certificates of insurance required by this Section 13 shall
not in any way relieve or limit its obligations and
liabilities under any provision of this Agreement. If SOMISY
shall fail to procure or maintain any insurance required
pursuant to this Section 13, then Sypps shall have the right
to procure such insurance in accordance with the
requirements of Exhibit 5 and shall be entitled to recover
the premiums paid for such insurance from SOMISY on demand.
13.3 Each Party shall provide to the other Party and the Operator
any underwriters' reports or other reports received by
either Party from any insurer; provided that neither Party
shall disclose such reports to any other person without the
relevant underwriter's consent.
13.4 The proceeds of any insurance claim in respect of physical
loss or damage to the Facility as a result of an Insurable
Event shall be paid into an account in the name of Sypps and
shall be applied towards the remedy of such loss or damage
as soon as reasonably possible or, to the extent that either
Party has already incurred reasonable costs in the remedy of
such loss or damage, such proceeds shall be applied towards
the reimbursement of such Party's reasonable costs. Any
dispute in relation to the application of such proceeds
shall be resolved in accordance with Section 17.
-39-
13.5 SOMISY shall ensure that the policies of insurance for which
it is responsible shall not be invalidated as regards the
respective rights and interests of SOMISY and Sypps and that
the insurers will not seek directly or indirectly to avoid
any liability under any of the policies to SOMISY or Sypps
because of any act, neglect, error or omission made by any
other insured under the policy concerned (whether occurring
before or after inception of the policy), including, without
limitation, any failure by any such other insured to
disclose any material fact, circumstance or occurrence, any
misrepresentation by any such other insured, any breach or
non-fulfilment by any such other insured whether or not any
such fact, neglect, error or omission could, if known at the
time, have affected any decision by the insurers to grant
the policy, to agree any particular term or terms to the
policy (including without limitation this provision) and the
amount in relation to the policy or to liability which might
arise thereunder.
SECTION 14
INSURABLE/NON-INSURABLE EVENTS
14.1 OBLIGATION TO NOTIFY
14.1.1 If by reason of an Insurable or Non-Insurable Event a Party
claims that it is wholly or partially unable to carry out
its obligations under this Agreement, the affected Party
shall:
(a) give the other Party notice of the event(s) as soon as
practicable, but in any event, not later than
forty-eight (48) hours after the affected Party
becomes aware of the occurrence of that event or those
events or, if the means of providing such notice
within such period is not available, not later than
six (6) hours after the resumption of the means of
providing such notice;
(b) give the other Party a second notice, describing that
event or those events in reasonable detail and, to the
extent that it can be reasonably determined at the
time of the second notice, providing a preliminary
evaluation of the obligations affected, a preliminary
estimate of the period of time that the affected Party
will be unable to perform the obligations, and other
relevant matters as soon as practicable, but in any
event, not later than seven (7) days after the initial
notice of the occurrence of the Insurable or
Non-Insurable Event(s) is given by the affected Party;
and
-40-
(c) when appropriate or when reasonably requested to do so
by the other Party, shall provide further notices to
the other Party more fully describing the event or
events and its cause or causes and providing or
updating information relating to the efforts of the
affected Party to avoid and/or to mitigate the effect
or effects thereof and estimates, to the extent
practicable, of the time that the affected Party
reasonably expects it will be unable to carry out any
of its affected obligations due to that event or those
events.
14.1.2 The affected Party shall also provide notice to the other
Party of (i) with respect to an ongoing Insurable or
Non-Insurable Event, the cessation of that event, and (ii)
the affected Party's ability to recommence performance of
its obligations under this Agreement, as soon as practicable
after becoming aware of each of (i) and (ii) above, but in
any event (and subject to the accommodation in Section
14.1.1 which shall apply, mutatis mutandis, where means of
providing such notice within such period is not available),
not later than seven (7) days after becoming so aware.
14.1.3 Failure by the affected Party to give notice of an Insurable
or Non-Insurable Event to the other Party within the periods
required by Section 14.1.1 shall not prevent the affected
Party from giving such notice at a later time; provided
however, that in such case, the affected Party shall not be
excused from any failure or delay in complying with its
obligations under or pursuant to this Agreement until the
notice required by Section 14.1.1 has been given. If such
notice is given within the forty-eight (48) hour period or
six (6) hour period as required
-41-
by Section 14.1.1, then unless the provisions of Section
14.2 apply, the affected Party shall be excused from such
failure or delay pursuant from the date of commencement of
the relevant event provided that no Insurable Event or
Non-Insurable Event shall excuse the late payment of money
when due.
14.2 MITIGATION
The Parties shall discuss what steps are reasonably required to
restore the affected Party's ability to perform its obligations under
this Agreement which are affected by an Insurable or Non-Insurable
Event and shall endeavour to reach agreement as to how the effects of
the Insurable or Non-Insurable Event may best be mitigated.
14.3 PRIOR TO OPERATIONAL PHASE
14.3.1 In the event of the occurrence of an Insurable or
Non-Insurable Event prior to the delivery of Plant ex works
in accordance with Section 4.1, subject to Section 14.1.3,
Sypps shall not be liable for any failure or delay in
performing its obligations (other than an obligation to make
a payment) under or pursuant to this Agreement to the extent
that such failure or delay in performance has been caused or
contributed to by one or more Insurable or Non-Insurable
Events or its effect or their effects or by any combination
thereof.
14.3.2 In the event of the occurrence of an Insurable Event or
Non-Insurable Event prior to the Relevant Commercial
Operations Date but after the delivery of the relevant Plant
ex works in accordance with Section 4.1 then unless the same
was caused by the neglect or wilful default of Sypps, SOMISY
shall pay to Sypps from each Relevant Target Commercial
Operations Date:
-42-
(a) the Plant Payment calculated in accordance with Part 1
of Exhibit 10;
(b) the BOP Payment calculated in accordance with Part 2
of Exhibit 10;
(c) the Spare Parts Payment calculated in accordance with
Part 3 of Exhibit 10;
(d) the Existing Facility Payment calculated in accordance
with Part 5 of Exhibit 10; and
(e) the Fixed Spare Parts Payment calculated in accordance
with Part 6 of Exhibit 10.
14.3.3 In respect of physical loss or damage occurring to the
Facility or a relevant part thereof in the event of the
occurrence of an Insurable Event prior to the Relevant
Commercial Operations Date but after the delivery of the
relevant Plant ex works in accordance with Section 4.1:
(a) SOMISY shall procure the replacement or repair of
either or both any Balance of Plant and Existing
Facility so lost or damaged and the provisions of
Sections 5.3 and 5.4 shall have effect as if the
replacement or repair of the Balance of Plant was its
initial procurement;
(b) Sypps shall be responsible for the replacement or
repair of any Plant so lost or damaged;
(c) the provisions of Section 13.4 shall apply;
(d) Sypps shall bear the deductible under the relevant
policies of insurance unless the damage shall have
been caused by SOMISY or persons for whom SOMISY shall
be responsible and subject thereto Sypps shall pay to
SOMISY out of the account referred to in Section 13.4
the reasonable costs properly incurred in carrying out
its obligations under Section
-43-
14.3.3(a) up to the amount of the insurance proceeds
received in respect of either or both the Balance of
Plant and Existing Facility, and
(e) SOMISY shall pay to Sypps from the Relevant Target
Commercial Operations Date the amounts appearing in
paragraphs (a) to (e) inclusive of Section 14.3.2.
14.3.4 Subject to Section 14.3.2, in the event of the occurrence of
a Non-Insurable Event prior to a Relevant Commercial
Operations Date but after the delivery of Plant ex works in
accordance with Section 4.1, SOMISY shall have the option to
terminate this Agreement in accordance with Section 16.14.
14.4 DURING OPERATIONAL PHASE
14.4.1 In the event of the occurrence of a Non-Insurable Event
after a Relevant Commercial Operations Date being a
breakdown (including machinery or equipment breakdown) of
that part of the Facility which is the subject of the
Relevant Commercial Operations Date and which shall not have
been caused by any of the intervening act of a third party
(which for this purpose shall exclude the Operator), the
occurrence of an Insurable Event, or the act or default of
SOMISY:
(i) if the breakdown (including machinery or equipment
breakdown) shall relate to the Plant, Sypps shall not
be relieved of its obligations under this Agreement;
and
(ii) if the breakdown (including machinery or equipment
breakdown) shall relate to the Balance of Plant,
SOMISY shall be entitled to apply any proceeds of the
BOP Warranties, if any, towards its reasonable costs
properly incurred in procuring the replacement or
repair of the Balance of Plant.
(iii) if the breakdown (including machinery or equipment
breakdown) shall relate to the Existing Facility,
SOMISY shall
-44-
be entitled to apply any proceeds of the Existing
Facility Warranties, if any, towards its reasonable
costs properly incurred in procuring the replacement
or repair of the Existing Facility; and
14.4.2 Subject to Section 14.4.1, in the event of the occurrence of
an Insurable or Non-Insurable Event following a Relevant
Commercial Operations Date, SOMISY shall pay:
(a) the Plant Payment calculated in accordance with Part 1
of Exhibit 10;
(b) the BOP Payment calculated in accordance with Part 2
of Exhibit 10;
(c) the Spare Parts Payment calculated in accordance with
Part 3 of Exhibit 10;
(d) the Existing Facility Payment calculated in accordance
with Part 5 of Exhibit 10; and
(e) the Fixed Spare Parts Payment calculated in accordance
with Part 6 of Exhibit 10.
14.4.3 In respect of physical loss or damage occurring to the
Facility or the relevant part thereof in the event of the
occurrence of an Insurable Event following a Relevant
Commercial Operations Date:
(a) SOMISY shall procure the replacement or repair of
either or both any Balance of Plant and Existing
Facility so lost or damaged and the provisions of
Sections 5.3 and 5.4 shall have effect as if the
replacement or repair of the Balance of Plant was its
initial procurement;
(b) Sypps shall be responsible for the replacement or
repair of any Plant so lost or damaged;
-45-
(c) the provisions of Section 13.4 shall apply; and
(d) Sypps shall bear the deductible under the relevant
policies of insurance unless the damage shall have
been caused by SOMISY or persons for whom SOMISY shall
be responsible and subject thereto Sypps shall pay to
SOMISY, out of the account referred to in Section
13.4, the reasonable costs properly incurred in
carrying out its obligations under Section 14.4.3(a),
up to the amount of the insurance proceeds received in
respect of either or both the Balance of Plant and the
Existing Facility.
14.4.4 Subject to Section 14.4.2, in the event of the occurrence of
a Non-Insurable Event following a Relevant Commercial
Operations Date, SOMISY shall have the option to terminate
this Agreement in accordance with Section 16.14.
14.4.5 Without prejudice to the provisions of this Section 14, in
the event of the occurrence of an Insurable Event or
Non-Insurable Event at any time prior to the Final Payment
date, SOMISY may elect to accelerate payment pursuant to
Section 15.3.
SECTION 15
FINAL PAYMENT
15.1 Subject to Section 15.3, SOMISY shall pay the Final Payment to Sypps
on the Final Payment Date, at which point title in the Plant, Balance
of Plant and the Existing Facility shall pass to SOMISY, provided
that SOMISY has performed all of its obligations under this Agreement
in relation to any matters which are then the subject of an
arbitration, dispute or any other form of proceedings.
15.2 SOMISY may, subject to extending the term of the Energy Support
Agreement for a like period, no earlier than 6 months prior to the
Final Payment Date and no later than 2 months prior to the Final
Payment Date, give notice to Sypps that it
-46-
wishes to extend this Agreement by a further period of up to 5 years
and if Sypps is so willing, the Parties shall endeavour to agree the
terms for such extension in substantially the same form as this
Agreement and if they do so agree, incorporating those terms in a
supplemental agreement.
15.3 At any time before the Final Payment Date SOMISY may elect to
accelerate payment pursuant to this Agreement upon giving two months'
prior notice and upon payment to Sypps of the amount set out in Part
8 of Exhibit 10.
15.4 Following the passing of title in the Plant, Balance of Plant and the
Existing Facility pursuant to Section 15.1, Sypps shall be released
from all obligations under or in connection with this Agreement
except for those in relation to any matters which are then the
subject of an arbitration, dispute or any other form of proceedings.
SECTION 16
TERMINATION
16.1 Subject to this Section 16, this Agreement may only be terminated by
either Party on the expiry of the Deferred Payment Period pursuant to
Sections 15.1, 15.2 or 15.3 as the case may be.
16.2 This Agreement may be terminated in accordance with its terms by
Sypps prior to the expiry of the Term on the occurrence of any of the
following:
16.2.1 a failure by SOMISY to satisfy any of the Suspensive
Conditions set out in Section 2.1 by the Cut-off Date;
16.2.2 a SOMISY Termination Event;
16.2.3 a SOMISY Event of Default in accordance with Section 16.8.
16.3 FAILURE TO MEET SUSPENSIVE CONDITIONS
-47-
16.3.1 Subject to Section 16.3.2, if SOMISY fails to satisfy or
procure the satisfaction of any of the conditions set out in
Section 2.1 prior to the Cut-off Date, Sypps shall be
entitled to:
(a) terminate this Agreement by giving notice to SOMISY
and such termination shall take effect immediately on
delivery of such notice; and
(b) recover the Fixed Default Amount from SOMISY.
16.3.2 If a date other than the Cut-off Date is agreed between the
Parties as contemplated by Section 2.2, Sypps shall be
entitled to terminate this Agreement in accordance with
Section 16.3.1 on such other date as is agreed between the
Parties.
16.4 SOMISY TERMINATION EVENT
The occurrence of any of the following events, unless such event
shall have occurred solely as a result of a breach by Sypps of its
obligations under this Agreement, shall constitute a "SOMISY
Termination Event":
16.4.1 Abandonment of the Mine or a substantial part of the
operations thereof;
16.4.2 SOMISY is declared insolvent, or an application is made for
the insolvency of SOMISY;
16.4.3 SOMISY applies for suspension of payment, whether
provisionally or otherwise;
16.4.4 SOMISY is unable to pay its debts as they fall due or admits
its inability to pay its debts as they fall due;
16.4.5 SOMISY stops, suspends, or threatens to stop or suspend
payment of all or any part of its debts or makes an
arrangement with or for the benefit of any creditor or
creditors in respect of or affecting all or a material part
-48-
of its indebtedness, or any step (including any proposal or
convening of any meeting) is taken with a view to such an
arrangement;
16.4.6 SOMISY is dissolved or a notice or application for the
dissolution of SOMISY, whether by the relevant companies
registration authority or otherwise, is made;
16.4.7 a general meeting of the shareholders of SOMISY is convened
for the purpose of considering any resolution for the
dissolution, for an application for the insolvency or for an
application for suspension of payment, whether provisional
or otherwise, of SOMISY, or an event occurs which leads to
the dissolution of SOMISY according to its articles of
association;
16.4.8 a material part of the assets of SOMISY is seized and such
seizure is not discharged within three days;
16.4.9 there occurs in relation to SOMISY any event under the laws
applicable to SOMISY which corresponds with or is analogous
to any of those mentioned in Sections 16.4.1 to 16.4.8
(inclusive);
16.4.10 the control over the business of SOMISY is directly or
indirectly changed other than involving an Affiliate and
only for so long as such company shall remain an Affiliate
of SOMISY, or other than involving the restructuring of the
JCI and Randgold groups of companies resulting from
negotiation between those groups of companies taking place
on or about the date of this Agreement or any of the shares
in SOMISY are sold, transferred or otherwise disposed of or
purported to be disposed of or changed or otherwise
encumbered (other than in accordance with the financial
arrangements consented to by Sypps in accordance with
Section 18) and such sale, transfer or other disposal or
purported
-49-
disposal or encumbrance result in a change of control of
SOMISY. In the event that control over the business of
SOMISY is intended to be so changed or any of the shares are
intended to be sold, transferred or otherwise disposed of
and such sale, transfer or other disposal or purported
disposal or encumbrance result in a change of control of
SOMISY, SOMISY shall seek the consent of Sypps, such consent
not to be unreasonably withheld or delayed. In the event
that any of the shares are sold, transferred or otherwise
disposed of, any change in control over the business of the
party receiving the shares shall amount to a SOMISY Event of
Default.
16.5 SYPPS' RIGHT TO TERMINATE FOR SOMISY TERMINATION EVENT
Upon the occurrence of a SOMISY Termination Event, Sypps may
terminate this Agreement immediately by giving notice to SOMISY of
the occurrence of the relevant SOMISY Termination Event and stating
that this Agreement is accordingly terminated and such termination
shall take effect immediately upon delivery of such notice.
16.6 SOMISY EVENT OF DEFAULT
The occurrence of any of the following events, unless any such event
shall have occurred solely as a result of a breach by Sypps of its
obligations under this Agreement, shall constitute a "SOMISY Event of
Default":
16.6.1 any default by SOMISY in the performance of its obligations
under this Agreement;
16.6.2 any breach by SOMISY in the performance of its obligations
under any other agreement to which SOMISY is a party to the
extent that such breach might, in the reasonable opinion of
Sypps, have a material adverse effect on the ability of
SOMISY to comply with its obligations under this Agreement;
16.6.3 any representation or warranty of SOMISY made to Sypps which
is or proves to be incorrect when made or repeated in any
respect which Sypps reasonably considers to be material;
16.6.4 a failure by SOMISY to make payments in accordance with
Section 12 and Exhibit 10 for one month;
-50-
16.6.5 refusal by SOMISY to allow Sypps or the Operator access to
the Site or any other act or omission on the part of SOMISY
which prevents the Plant being used in accordance with Good
Utility Practice;
16.6.6 in the event that the control over the business of SOMISY is
directly or indirectly changed, or any of the shares in
SOMISY are sold, transferred or otherwise disposed of or
encumbered and such sale, transfer, disposal or encumbrance
results in a change in control over the business of SOMISY a
failure by SOMISY to procure that the party, or parties,
which then have control over the business of SOMISY enter
into a form of guarantee in substantially the same terms as
are set out in Exhibit 1,
SOMISY shall notify Sypps immediately upon becoming aware of the
occurrence of any Termination Event or any SOMISY Event of Default.
16.7 NOTICE PERIOD AND REMEDIAL ACTION BY SOMISY
16.7.1 Upon Sypps becoming aware of the occurrence of a SOMISY
Event of Default, may give notice to SOMISY specifying the
relevant SOMISY Event of Default and requiring SOMISY, at
SOMISY's option, either:
(a) to remedy or otherwise overcome each SOMISY Event of
Default SOMISY specified in such notice within 30 days
of delivery of such notice; or
(b) other than in the case of an event under Section
16.6.4 (in which case only paragraph (a) above shall
apply) to propose in writing, within 21 days of
receipt of such notice, a reasonable programme for the
remedying of or otherwise overcoming each SOMISY Event
of Default specified in such notice.
16.7.2 If SOMISY shall propose such a programme in accordance with
Section 16.7.1(b), Sypps shall within 28 days of receipt of
such programme, notify SOMISY that it either accepts or does
not accept the programme as being capable of remedying or
otherwise overcoming each relevant SOMISY Event of Default.
If Sypps shall fail to give notice within such
-51-
28 day period, it shall be deemed to have accepted such
programme. If Sypps shall notify SOMISY that it does not
accept such programme, the Parties shall endeavour in good
faith to agree any necessary amendments to the programme.
Any dispute shall be resolved in accordance with Section 17.
SOMISY shall, immediately following acceptance by Sypps of
the relevant programme (or resolution of any dispute
relating to such programme), implement such programme.
16.8 ENTITLEMENT FOR SYPPS TO TERMINATE
If:
16.8.1 any SOMISY Event of Default notified in accordance with
Section 16.7.1 shall not have been remedied or otherwise
overcome before expiry of the period referred to in Section
16.7.1(a); or
16.8.2 SOMISY shall have proposed a programme pursuant to Section
16.7.1(b) which has been accepted by Sypps or has been
established in accordance with Section 17, but SOMISY shall
have failed to remedy or overcome to the reasonable
satisfaction of Sypps the relevant SOMISY Event of Default
or otherwise carry out the appropriate course of action to
the satisfaction of Sypps in accordance with such programme;
or
16.8.3 where SOMISY shall have submitted a programme for the remedy
of or otherwise overcoming of the relevant SOMISY Event of
Default in accordance with Section 16.7.1(b), such programme
is not accepted or agreed by Sypps in accordance with
Section 16.7.2 and the outcome of any dispute resolution in
accordance with Section 17 does not find against such
non-acceptance; or
16.8.4 SOMISY shall have failed to remedy in accordance with
Section 16.7.1 any Event of Default notified to SOMISY by
Sypps pursuant to Section 16.7.1 before the expiry of the
period referred to in such notice or SOMISY shall have
failed to provide a programme, in accordance with Section
16.7.1(b), acceptable to Sypps before the expiry of the
period referred to in such notice, or, where SOMISY has
provided a
-52-
programme for remedying or otherwise overcoming such SOMISY
Event of Default acceptable to Sypps, SOMISY shall have
failed to remedy or otherwise overcome the SOMISY Event of
Default in accordance with such programme,
Sypps may terminate this Agreement by giving notice to SOMISY and
such termination shall take effect immediately upon service of such
notice by Sypps or upon such later date as may be specified in the
notice.
16.9 SYPPS TERMINATION EVENT
The occurrence of any of the following events, unless such event
shall have occurred solely as a result of a breach by SOMISY of its
obligations under this Agreement, shall constitute a "Sypps
Termination Event":
16.9.1 Abandonment of the Plant and Balance of Plant or a
substantial part of the operations thereof;
16.9.2 Sypps is declared insolvent, or an application is made for
the insolvency of Sypps;
16.9.3 Sypps applies for suspension of payment, whether
provisionally or otherwise;
16.9.4 Sypps is unable to pay its debts as they fall due or admits
its inability to pay its debts as they fall due;
16.9.5 Sypps stops, suspends, or threatens to stop or suspend
payment of all or any part of its debts or makes an
arrangement with or for the benefit of any creditor or
creditors in respect of or affecting all or a material part
of its indebtedness, or any step (including any proposal or
convening of any meeting) is taken with a view to such an
arrangement;
16.9.6 Sypps is dissolved or a notice or application for the
dissolution of Sypps, whether by the relevant companies
registration authority or otherwise, is made;
-53-
16.9.7 a general meeting of the shareholders of Sypps is convened
for the purpose of considering any resolution for the
dissolution, for an application for the insolvency or for an
application for suspension of payment, whether provisional
or otherwise, of Sypps, or an event occurs which leads to
the dissolution of Sypps according to its articles of
association;
16.9.8 a material part of the assets of Sypps is seized and such
seizure is not discharged within three days;
16.9.9 there occurs in relation to Sypps any event under the laws
applicable to Sypps which corresponds with or is analogous
to any of those mentioned in Sections 16.9.1 to 16.9.8
(inclusive);
16.9.10 the control over the business of Sypps is directly or
indirectly changed other than involving an Affiliate and
only for so long as such company shall remain an Affiliate
of Sypps, or more than 50% of the shares in Sypps are sold,
transferred or otherwise disposed of or purported to be
disposed of or changed or otherwise encumbered and such
sale, transfer or other disposal or purported disposal or
encumbrance result in a change of control of Sypps. In the
event that control over the business of Sypps is intended to
be so changed or more than 50% of the shares are intended to
be sold, transferred or otherwise disposed of and such sale,
transfer or other disposal or purported disposal or
encumbrance result in a change of control of Sypps, Sypps
shall seek the consent of SOMISY, such consent not to be
unreasonably withheld or delayed. In the event that any of
the shares are sold, transferred or otherwise disposed of,
any change in control over the business of the party
receiving the shares shall amount to a Sypps Event of
Default
16.10 SOMISY'S RIGHT TO TERMINATE FOR SYPPS TERMINATION EVENT
Upon the occurrence of a Sypps Termination Event, SOMISY may
terminate this Agreement immediately by giving notice to Sypps of the
occurrence of the relevant Sypps Termination Event and stating that
this Agreement is accordingly
-54-
terminated and such termination shall take effect immediately upon
delivery of such notice.
16.11 SYPPS EVENT OF DEFAULT
The occurrence of any of the following events, unless any such event
shall have occurred solely as a result a breach by SOMISY of its
obligations under this Agreement, shall constitute a "Sypps Event of
Default":
16.11.1 any material default by Sypps in the performance of any of
its material obligations under this Agreement;
16.11.2 failure of the Units to achieve Guaranteed Contracted
Capacity for a period of 9 consecutive months, unless such
event shall have occurred as a result of the occurrence of:
(a) a SOMISY Event of Default; or
(b) an Insurable Event; or
(c) a Non-Insurable Event.
16.11.3 any representation or warranty of Sypps made to SOMISY which
is or proves to be incorrect when made or repeated in any
respect which SOMISY considers to be material;
Sypps shall notify SOMISY immediately upon becoming aware of the
occurrence of any Sypps Event of Default.
16.12 NOTICE PERIOD AND REMEDIAL ACTION BY SYPPS
16.12.1 Upon SOMISY becoming aware of the occurrence of a Sypps
Event of Default, SOMISY may give notice to Sypps specifying
the relevant Sypps Event of Default and requiring Sypps, at
Sypps's option, either:
(a) to remedy or otherwise overcome each Sypps Event of
Default specified in such notice within 21 days of
delivery of such notice; or
-55-
(b) other than in a case of failure by Sypps to make
payment (in which case only paragraph (a) above shall
apply) to propose in writing, within 14 days of
receipt of such notice, a reasonable programme for the
remedying of or otherwise overcoming each Sypps Event
of Default specified in such notice.
16.12.2 If Sypps shall propose such a programme in accordance with
Section 16.12.1(b), SOMISY shall within 28 days of receipt
of such programme, notify Sypps that it either accepts or
does not accept the programme as being capable of remedying
or otherwise overcoming each relevant Sypps Event of
Default. If SOMISY shall fail to give notice within such 28
day period, it shall be deemed to have accepted such
programme. If SOMISY shall notify Sypps that it does not
accept such programme, the Parties shall endeavour in good
faith to agree any necessary amendments to the programme.
Any dispute shall be resolved in accordance with Section 17.
Sypps shall, immediately following acceptance by SOMISY of
the relevant programme (or resolution of any dispute
relating to such programme), implement such programme.
16.13 ENTITLEMENT FOR SOMISY TO TERMINATE FOR SYPPS EVENT OF DEFAULT
If:
16.13.1 any Sypps Event of Default notified in accordance with
Section 16.12.1 shall not have been remedied or otherwise
overcome before expiry of the period referred to in Section
16.12.1(a); or
16.13.2 Sypps shall have proposed a programme pursuant to Section
16.12.1(b) which has been accepted by SOMISY or has been
established in accordance with Section 17, but Sypps shall
have failed to remedy or overcome to the reasonable
satisfaction of SOMISY the relevant Sypps Event of Default
or otherwise carry out the appropriate course of action to
the satisfaction of SOMISY in accordance with such
programme; or
16.13.3 where Sypps shall have a submitted a programme for the
remedy of or otherwise overcoming of the relevant Sypps
Event of Default in
-56-
accordance with Section 16.12.1(b), such programme is not
accepted or agreed by SOMISY in accordance with Section
16.12.2 and the outcome of any dispute resolution in
accordance with Section 17 does not find against such
non-acceptance; or
16.13.4 Sypps shall have failed to remedy in accordance with Section
16.12.1 any Sypps Event of Default notified to Sypps by
SOMISY pursuant to Section 16.12.1 before the expiry of the
period referred to in such notice or Sypps shall have failed
to provide a programme, in accordance with Section
16.12.1(b), acceptable to SOMISY before the expiry of the
period referred to in such notice, or, where Sypps has
provided a programme for remedying or otherwise overcoming
such Sypps Event of Default acceptable to SOMISY, Sypps
shall have failed to remedy or otherwise overcome the Sypps
Event of Default in accordance with such programme, SOMISY
may terminate this Agreement by giving notice to Sypps and
such termination shall take effect immediately upon service
of such notice by SOMISY or upon such later date as may be
specified in the notice.
16.14 UNECONOMIC EFFECT
If pursuant to either or both Sections 14.3.2 and 14.4.2 SOMISY is
obliged to make payments for a period exceeding 24 months then it may
give one month's notice to Sypps terminating this Agreement.
16.15 ENERGY SUPPORT AGREEMENT
Sypps shall be entitled to terminate this Agreement in the event that
the Energy Support Agreement is terminated or if the same is
terminated through the default of the Operator and a replacement
contract is entered into by with an operator which is not acceptable
to Sypps (such acceptance not to be unreasonably withheld or delayed
in the case of a proposed operator of international repute), by
giving notice to SOMISY stating that this Agreement is accordingly
terminated and such termination shall take effect immediately upon
delivery of such notice.
-57-
16.16 CONSEQUENCES OF TERMINATION
16.16.1 If this Agreement is terminated by Sypps pursuant to
Sections 16.5 or 16.8, or by SOMISY pursuant to Section
16.14, Sypps shall be entitled to recover from SOMISY the
Termination Prices calculated in accordance with Parts 8 and
10 respectively of Exhibit 10;
16.16.2 If this Agreement is terminated by SOMISY pursuant to
Section 16.10 or 16.13 then SOMISY shall pay to Sypps the
Termination Prices calculated in accordance with Part 9 of
Exhibit 10 save that if paragraph (iv) of Section 10.2.4
shall apply then the amount paid shall be the CTF
Termination Price;
16.16.3 If this Agreement is terminated by Sypps pursuant to Section
16.15:
(i) due to a default by the Operator, Sypps shall be
entitled to recover from SOMISY the Termination Prices
calculated in accordance with Part 9 of Exhibit 10;
(ii) due to the the occurrence of a Non-Insurable Event,
Sypps shall be entitled to recover from SOMISY the
Termination Prices calculated in accordance with Part
10 of Exhibit 10;
(iii) under any other circumstances within Section 16.15,
Sypps shall be entitled to recover from SOMISY the
Termination Prices calculated in accordance with Part
8 of Exhibit 10.
16.16.4 Upon full payment of the amounts payable under Sections
16.16.1 or 16.16.3 above to Sypps the provisions of Section
15 shall have effect as if the same were the Final Payment;
16.16.5 If this Agreement is terminated pursuant to this Section 16,
the EF Debt will be deemed to be fully redeemed and title in
the Existing Facility shall revert to SOMISY.
-58-
SECTION 17
DISPUTE RESOLUTION
17.1 SENIOR MANAGEMENT
17.1.1 Each Party shall notify the other Party of a member of
senior management who shall be authorised to resolve any
dispute on its behalf.
17.1.2 If a dispute arises that cannot be settled by the Parties
through informal discussions, either Party may (but shall
not be compelled to) refer the dispute to the Persons
designated pursuant to Section 17.1.1 for further
consideration and attempted resolution within thirty (30)
days after the dispute has been referred to such Persons (or
such longer period as the Parties may agree).
17.2 ARBITRATION
17.2.1 In the event of any dispute arising under this Agreement it
shall be settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce.
17.2.2 In all cases of arbitration:
(a) arbitration shall take place in London (or such other
place as the Parties may agree);
(b) the language of the arbitration shall be English; and
(c) the costs of the arbitration shall be borne by the
losing Party.
17.2.3 Arbitration shall be conducted by a sole arbitrator
appointed by mutual agreement of the Parties. This
arbitrator unless the Parties shall agree otherwise shall be
of a nationality other than that of the Parties and shall
have extensive experience in the electricity industry.
17.2.4 In the event that the Parties cannot agree on the choice of
arbitrator, arbitration shall be conducted by three
arbitrators named in accordance
-59-
with the rules and regulations of the International Chamber
of Commerce.
17.2.5 The Parties agree that the decision or award of the
arbitrators shall be final and binding and agree to execute
the decision rendered by the arbitrators without delay and
hereby waive any rights of appeal. The execution of the
decision may be carried out by any tribunal having
jurisdiction.
17.2.6 Provided that if the dispute to be referred to arbitration
under this Agreement raises issues which are substantially
the same as or connected with issues raised in a related
dispute between SOMISY and the Operator under the Energy
Support Agreement and if the related dispute has already
been referred for determination to an arbitrator, SOMISY and
Sypps hereby agree that the dispute under this Agreement
shall be referred to the arbitrator appointed to determine
the related dispute and the provisions of this Section 17
shall apply.
17.3 NO IMMUNITY; ENFORCEMENT; COSTS AND EXPENSES
As to all disputes between the Parties under this Agreement, each of
SOMISY and Sypps unconditionally and irrevocably:
17.3.1 agrees, to the extent that such Party may now or hereafter
be entitled in any jurisdiction to claim for itself or its
property, assets or revenues immunity (whether by reason of
sovereignty or otherwise) in respect of its obligations
under this Agreement from service of process, suit,
jurisdiction of any court, judgment, order, award,
attachment (before or after judgment or award), set-off,
execution of a judgment or other legal process, and to the
extent that in any such jurisdiction there may be attributed
to such Party or any of its property, assets or revenues
such an immunity (whether or not claimed), not to claim and
hereby irrevocably waives such immunity to the fullest
extent permitted by the laws of such jurisdiction;
-60-
17.3.2 consents generally in respect of the enforcement of any
judgment against it in any such proceedings in England
and/or the Republic of Mali and to the giving of any relief
or the commencement of any process in connection with such
proceedings (including, without limitation, the making,
enforcement or execution against or in respect of any
property whatsoever irrespective of its use or intended
use); and
17.3.3 consents that all costs and expenses related to any judicial
proceeding to enforce any arbitration award shall be paid by
the Party that resists the enforcement of such award.
17.4 APPOINTMENT OF AGENTS FOR SERVICE OF PROCESS
With respect to any proceedings for enforcement of an award pursuant
to Section 17.3 against assets of either Party brought in any court
of competent jurisdiction in England or the Republic of Mali:
17.4.1 each Party shall appoint, before the Relevant Commercial
Operations Date, an agent to receive for and on its behalf
service of process in such jurisdiction in any such
enforcement proceedings;
17.4.2 each Party agrees to maintain in the Republic of Mali duly
appointed process agents (or appoint replacement agents and
promptly notify the other Party of such replacement agents);
and/or
17.4.3 each Party agrees that failure by any such process agent to
give notice of any process to it shall not impair the
validity of such service or of any judgment based thereon.
-61-
SECTION 18
TRANSFER OF RIGHTS AND OBLIGATIONS
18.1 Except as expressly provided in this Agreement, no rights or
obligations under this Agreement may be transferred by either Party
in whole or in part, without the prior written consent of the other
Party as it may in its absolute discretion and upon such terms as it
may in its absolute discretion determine save that where such
transfer is to an Affiliate such consent shall not be unreasonably
withheld or delayed, provided that either Party may assign its rights
and obligations under this Agreement to an Affiliate if such
Affiliate: (i) agrees in writing to assume all obligations and
liabilities of the assigning Party under, and to be bound by all of
the terms, conditions and provisions of, this Agreement, (ii) has
provided the non-assigning Party with evidence to the reasonable
satisfaction of the non-assigning Party that such Affiliate has the
creditworthiness and operational ability to perform the assigning
Party's obligations under this Agreement; and
18.2 After any assignment contemplated by Section 18.1 above, the
assigning Party shall have no further obligations or liabilities
under this Agreement. Unless expressly agreed to by the other Party,
no assignment (other than an assignment under Section 18.1 above),
whether or not consented to, shall relieve the assignor of its
obligations hereunder in the event its assignee fails to perform.
18.3 Save as expressly provided in this Agreement, SOMISY shall not create
any security right or other interest over any of its rights under
this Agreement without the prior written consent of Sypps in its
absolute discretion and upon such terms as it may in its absolute
discretion determine. Where Sypps agrees to the creation of a
security right or other interest it will be prepared to enter into a
direct agreement with SOMISY's Lenders or an agent thereof in
substantially the same terms set out in Exhibit 14.
-62-
SECTION 19
ADJUSTMENT DUE TO CHANGE IN LAW
19.1 ADJUSTMENT DUE TO CHANGE IN LAW, IMPORT TAXES, INCENTIVES AND
BENEFITS
19.1.1 If the direct or indirect cost of the design, construction,
Commissioning and completion of the Facility, or of the
supply of Spare Parts changes as a result of a Change in
Law, or the economic benefit to Sypps, or any relevant
incentive to Sypps, under this Agreement changes as a result
of a Change in Law, the payments under this Agreement (as
appropriate) shall be adjusted to compensate for the direct
or indirect cost, loss or saving or increase (as the case
may be) in economic benefit resulting from such Change in
Law from the date it was effective. Sypps shall submit to
SOMISY a certificate setting forth in reasonable detail the
basis of, and the calculations for, such adjustments.
19.1.2 Within twenty (20) Days after the date of such certificate,
SOMISY shall notify Sypps whether it disagrees with any of
the calculations in the certificate. If SOMISY notifies
Sypps of its disagreement the Parties agree to meet within
twenty (20) Days and negotiate in good faith alternative
adjustments to the payments as appropriate to protect the
economic value of the Agreement to the Parties.
19.1.3 In the event that SOMISY agrees with the certificate or
fails to notify its disagreement within the period specified
in Section 19.1.2 above, this Agreement shall be amended
promptly by the Parties in accordance with Section 21.1 to
reflect such adjustments.
19.1.4 The Parties shall attempt to resolve any dispute regarding
adjustments pursuant to this Section 19.1 as expeditiously
as possible in accordance with Section 17.1. If the Parties
are unable to resolve the dispute in this manner, the
dispute shall be resolved in accordance with the procedures
described in remainder of Section 17.
-63-
19.1.5 In the event that SOMISY fails to pass to Sypps any economic
benefit or incentive referred to in Section 19.1.1, the
payments under this Agreement (as appropriate) shall be
adjusted to reflect either or both such taxes paid and the
benefit of such incentives not received by Sypps.
SECTION 20
INTELLECTUAL PROPERTY
Sypps shall make available and to the extent that it is able so to
do through prudent commercial practices cause its suppliers to make
available to SOMISY free of charge for use by SOMISY solely in
relation to the exploitation of the Mine a non-exclusive licence or
sub-licence for the use of design data (other than proprietary data
relating to machinery and equipment and retained by the relevant
manufacturer for commercially confidential reasons) developed for the
Project.
SECTION 21
MISCELLANEOUS
21.1 AMENDMENT
This Agreement may be amended only by a supplemental agreement to
this Agreement signed by both Parties.
21.2 NO WAIVER
21.2.1 Save as otherwise expressly provided in this Agreement,
nothing done or omitted to be done by Sypps or any of
Sypps's representatives whether for the purposes of this
Agreement or otherwise shall relieve SOMISY of any of its
obligations under this Agreement.
21.2.2 No delay or forbearance by either Party in exercising any
right, power, privilege or remedy under this Agreement shall
operate to impair or be construed as a waiver of such right,
power, privilege or remedy.
-64-
Any single or partial exercise of any such right, power,
privilege or remedy shall not preclude any other right,
power, privilege or remedy.
21.3 LIABILITY
21.3.1 Without prejudice to the provisions of Section 16 or Exhibit
10, neither Party shall be liable to the other Party in
contract, tort, warranty, strict liability, or any other
legal theory for any indirect, consequential, incidental,
punitive or exemplary damages, nor shall either Party be
liable to the other Party for any fines and penalties
incurred by that other Party. Neither Party shall have any
liability to the other Party for breach of this Agreement
except as expressly provided in this Agreement; provided,
however, that this provision is not intended to constitute a
waiver of any rights of one Party against the other with
regard to matters unrelated to this Agreement or to any
activity not contemplated by this Agreement.
21.3.2 Sypps' liability (whether in contract, tort or otherwise)
arising out of or in connection with this Agreement shall
not exceed USUS$2 million in any one year or US$8 million
during the Term.
21.4 SURVIVAL
The expiry or early termination of this Agreement shall not relieve
the Parties of obligations which by their nature should survive such
expiry or termination. including, without limitation, the following:-
Section 1, Section 6, Section 8.5, Section 11, Section 12, Section
15, Section 16, Section 17, Section 18, Section 20 and this Section
21.
21.5 FURTHER ASSURANCE
Each Party agrees to execute and deliver all such further instruments
and do and perform all such further acts and things as shall be
necessary or expedient for the carrying out of the provisions of this
Agreement.
-65-
21.6 NOTICES
21.6.1 All notices under this Agreement shall be in writing and all
certificates, notices or written instructions to be given
under the terms of this Agreement shall be served, in timely
fashion, by sending the same by registered post with
confirmation of receipt, facsimile or by leaving the same at
the addresses specified in Exhibit 11.
21.6.2 Either Party may change its nominated postal address,
facsimile number by prior notice to the other Party. Notices
given by registered post shall be effective upon the earlier
of (i) actual receipt and (ii) 7 days after mailing. Notices
given by facsimile shall be deemed to have been received
where there is confirmation of uninterrupted transmission by
a transmission report and where there has been no telephonic
communication by the recipient to the sender (to be
confirmed in writing) that the facsimile has not been
received in legible form either (a) within 2 hours after
sending if sent on a Business Day and between the hours of 9
a.m. and 4 p.m.; or (b) by 11 a.m. on the next following
Business Day if sent after 4 p.m. on a Business Day but
before 9 a.m. on that next following Business Day. In each
case the reference to time shall be in respect of the local
time at the place of receipt of the notice.
21.7 CONFIDENTIALITY
Each Party shall hold in confidence all commercially and technically
sensitive documents and information in relation to this Agreement and
the carrying out of the obligations thereunder and shall not publish
or otherwise disclose the same except:-
21.7.1 with the other Party's prior written consent;
21.7.2 as may necessarily be required by law, any relevant stock
exchange or other competent regulatory authority;
21.7.3 as Sypps may require for the purpose of the design,
construction, commissioning or completion of the Plant in
the event of termination of this Agreement;
-66-
21.7.4 that which is in or enters the public domain other than as a
result of a breach of the obligations imposed by this
Section 21.7; or
provided that the provisions of this Section 21.7 shall not restrict
either Party from either or both passing such documents and
information to its professional advisers or associates who have first
agreed in writing to be bound by the provisions of this Section 21.7
and each Party may, subject to appropriate confidentiality
restrictions, pass to actual or proposed lenders such documents and
other information as is reasonably required by the actual or proposed
lenders in connection with the raising of finance for the either or
both the gold mine concession or the Facility. Any Party making
documents or information available to a third party pursuant to this
Section 21.7 shall procure that such third party shall first enter
into a written confidentiality agreement in respect of such documents
or information in substantially the same terms as those contained in
this Section 21.7.
21.8 NON-BINDING PROVISIONS
If any one or more of the provisions of this Agreement shall become
or shall prove to be illegal, unenforceable or non-binding, the other
provisions of this Agreement shall remain in force and the Parties
shall enter into negotiations in good faith to replace any such
illegal, unenforceable or non-binding provisions by provisions which
are legal, enforceable and binding and which deviate as little as
possible, having regard to the purpose and objects of this Agreement,
from the intent of such illegal, unenforceable or non-binding
provisions. If the Parties shall be unable to agree, within 90 days
of becoming aware that a provision is illegal, unenforceable or
non-binding, on the replacement of that provision, the matter shall
be referred for resolution in accordance with Section 17.
21.9 ENTIRE AGREEMENT
This Agreement supersedes any previous agreement, arrangement or
understanding between the Parties in relation to the matters dealt
with in this Agreement and represents the entire understanding
between the Parties in relation to such matters as of the date
hereof.
-67-
21.10 APPLICABLE LAW
This Agreement shall be governed and construed in accordance with the
law of England and Wales.
IN WITNESS WHEREOF the Parties have executed this Agreement in the
presence of the witnesses by their duly authorised representatives on
the day and year first mentioned above.
SOMISY:
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By:
------------------------- ---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: DIRECTOR
WITNESSED BY:
By:/S/ ▇▇▇▇ ▇▇▇▇▇ By:
------------------------- ---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Legal Counsel
SYPPS:
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By:
------------------------- ---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
WITNESSED BY:
-68-
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By:
------------------------- --------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Development Manager
EXHIBIT 1
FORM OF RANDGOLD GUARANTEE
DEED OF GUARANTEE, dated as of day of (as amended, supplemental or
otherwise modified from time to time in accordance with the terms hereof) this
"Guarantee Agreement" between Randgold Resources Limited, having its registered
office at La ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ and Randgold &
Exploration Company Limited, having its registered office at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ (each a "Guarantor" and together the
"Guarantors") and Sypps having its registered office at [ ] (the "Project
Company").
WHEREAS
(A) SOMISY, a majority owned subsidiary of Randgold Resources Limited,
and the Project Company have entered into the Deferred Terms
Agreement.
(B) This guarantee is given in satisfaction of Clause 2.1 of the Deferred
Terms Agreement and it is a condition of the Project Company entering
into the Deferred Terms Agreement that the Guarantors enter into this
Guarantee Agreement.
NOW, THEREFORE, it is agreed as follows:
Section 1. Definitions
-----------
Unless expressly defined herein or the context requires otherwise, capitalised
terms shall have the same meanings as set out in the Deferred Terms Agreement.
The following capitalised terms shall have the meanings herein specified, and
shall include in the singular number the plural and in the plural number the
singular:
"Deferred Terms Agreement" the agreement dated [ ] between the Project Company
and SOMISY for the supply of electrical capacity and energy to a mine in Syama,
Republic of Mali;
-69-
"Guaranteed Obligations" shall mean all of the obligations and liabilities of
SOMISY under the Deferred Terms Agreement.
Section 2. Guarantee
---------
(a) Subject to this Section 2, each Guarantor severally, and also jointly with
the other Guarantor, hereby absolutely, irrevocably and unconditionally
guarantees the due and punctual payment of all the Guaranteed Obligations and
hereby agrees that in the event that SOMISY shall fail to make due and punctual
payment of any Guaranteed Obligation not disputed in good faith in an aggregate
amount exceeding five thousand US dollars ($5,000) properly payable under or
arising from or with respect to the Deferred Terms Agreement, the Guarantors
shall pay to the Project Company such sums within twenty one (21) Business Days
of a written demand from the Project Company the Guarantors are entitled to all
benefits, limitations and defences in respect of the Guaranteed Obligations
afforded to SOMISY under the Deferred Terms Agreement.
(b) The Guarantee Agreement shall be a continuing guarantee and shall remain
operative and in full force and effect until all of the Guaranteed Obligations
have been performed in full.
(c) This Guarantee Agreement and the liability of the Guarantors hereunder
shall remain in full force and effect and shall in no way be affected or
impaired by, and no notice to the Guarantors shall be required, in respect of:
(i) any compromise, waiver, settlement, release, renewal, extension,
indulgence, change in or modification of any of the obligations and liabilities
of SOMISY under the Deferred Terms Agreement, except to the extent that SOMISY
has been so relieved (except that this Guarantee Agreement and the liability of
the Guarantors hereunder shall not extend to any additional or increased
obligations and liabilities of SOMISY under the Deferred Terms Agreement as a
result of any such compromise, waiver, settlement, release, renewal, extension,
indulgence, change in or modification unless the prior written consent thereto
of the Guarantors, expressly referring to this Guarantee Agreement, shall have
been obtained in connection therewith);
(ii) the enforcement or absence of enforcement of the Deferred Terms Agreement
or any security or any release of security;
-70-
(iii) the winding-up (or equivalent) of SOMISY or the Guarantors or any other
person or any step being taken for any such winding-up or dissolution (or
equivalent); or
(iv) the material illegality, invalidity or unenforceability of or any material
defect in any provision of the Deferred Terms Agreement.
(d) Notwithstanding anything to the contrary herein contained, the Guarantors
shall not be obliged to perform any of the Guaranteed Obligations hereunder
until a demand by the Project Company shall have been made upon the Guarantors
specifying in detail each of the Guaranteed Obligations which shall not have
been performed by SOMISY and five (5) Business Days shall have elapsed after
receipt by the Guarantors of such demand.
(e) If the Project Company having received any payment from the Guarantors
pursuant to any of its obligations hereunder, should receive, after the making
of such payment by the Guarantors, any payment or distribution with respect
thereto, the Project Company shall remit such payment to the Guarantors
promptly, but in any event within five (5) business Days after receipt thereof.
Section 3. Guarantors' Representations
---------------------------
Each Guarantor severally, and also jointly with the other Guarantor, represents
and warrants to the Project Company as of the date hereof that:
(a) each Guarantor is a [public limited company] duly organised, validly
existing under the laws of [ ] and has full power, authority and legal rights to
execute and deliver, and to perform its obligations under, this Guarantee
Agreement;
(b) each Guarantor has taken all necessary corporate and legal action to
authorise the guarantee hereunder on the terms and conditions of this Guarantee
Agreement and to authorise its execution, delivery and performance of this
Guarantee Agreement.
(c) this Guarantee Agreement has been duly executed and delivered by each
Guarantor, and constitutes the legal, valid and binding obligation of each
Guarantor, enforceable against each Guarantor, except as such enforcement may be
limited by (i) applicable bankruptcy, insolvency, reorganisation, moratorium or
other laws affecting the rights of creditors generally, and (ii) general
principles of equity.
-71-
Section 4. Merger or Consolidation
-----------------------
If the Guarantors are party to a merger or consolidation in which the Guarantors
are not the surviving corporations, or sell all or substantially all of their
assets, then the Guarantors shall procure that the surviving corporations or the
person to which such sale has been made, as the case may be, shall have assumed
all of the Guarantors' obligations hereunder, to the extent same shall not have
occurred by the operation of law.
Section 5. Costs of Enforcement
--------------------
The Guarantors agree to hold the Project Company harmless from and against any
and all loss, liability or expense (including, without limitation, the
reasonable fees and disbursements of counsel for the Project Company) which may
be sustained or incurred by or on behalf of the Project Company in enforcing any
obligation of the Guarantors hereunder.
Section 6. Successors and Assigns
----------------------
The Guarantee Agreement shall be binding upon and inure to the benefit of the
Guarantors and the Project Company and their respective successors and permitted
assigns. This Guarantee Agreement shall not be deemed to create any right in any
person, nor be construed in any respect to be a contract, in whole or in part,
for the benefit of any person, except the parties hereto and their respective
successors and permitted assigns. This Guarantee Agreement may not be assigned
by either party without first having obtained written consent of the other.
Section 7. Termination
-----------
Unless earlier terminated pursuant to Section 2(b) and 4, this Guarantee
Agreement shall automatically terminate upon the performance in full of all the
Guaranteed Obligations.
Section 8. Miscellaneous
-------------
(a) Except as expressly otherwise provided herein, all notices, requests,
demands, consents, instructions or other communications to or upon the parties
hereto shall be deemed to have been duly given or made only when delivered in
writing or by telecopy to the party to which such notice, request, demand,
consent, instruction or other
-72-
communication is required or permitted to be given or made hereunder, at the
addresses or telecopy numbers of the parties, and to the attention of the
person, specified below, or to such other addresses, telecopy number or
attention as either party may hereafter specify to the other in writing:
(i) If to the Guarantors:
Address: ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attention:
Facsimile: [ ]
(ii) If to Project Company:
Address:
Attention:
Facsimile: [ ]
Any notice or other communication referred to herein given in accordance with
this Section 8 shall be deemed to be delivered (i) if sent by hand delivery when
received, (ii) if sent by mail, seven days after such communication is deposited
in the mail with first-class postage prepaid, addressed or aforesaid, (iii) if
sent by facsimile, when such facsimile is transmitted and oral or electronic
receipt of confirmation is obtained by the sender (iv) in the case of delivery
by an internationally recognised express courier service, two Business Days
after delivery to such service, or (v) if sent by other means, when received at
the addresses notified in this Section 8.
(b) The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which the Guarantors of the Project Company
would otherwise have. No waiver of any of the terms and conditions of this
Guarantee Agreement, and no notice to or demand on the Guarantors or the Project
Company in any case shall entitle the Guarantors or the Project Company, as the
case may be, to any other
-73-
or further notice or demand in similar or other circumstances, or constitute the
waiver of the rights of the Guarantors or the Project Company to any other or
further action in any circumstances without notice or demand.
(c) This Guarantee Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with, and governed by, the laws of
England and the parties hereby submit to the exclusive jurisdiction of the
English courts.
(d) This Guarantee Agreement may not be changed orally but only by an
instrument in writing signed by the Guarantorsand the Project Company, and
obligations hereunder may not be waived except by an instrument in writing
executed and delivered by the party granting such waiver.
(e) The headings of the several sections of this Guarantee Agreement are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Guarantee Agreement.
(f) Any provision of this Guarantee Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
This Guarantee Agreement may be executed in any number of counterparts, and by
the different parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Guarantee Agreement to be duly
executed and delivered as a deed by their duly authorised officers or
representatives as of the date first above written.
Signed as a deed by [Guarantor]
acting by [ ] and
[ ]
-74-
Director:
Director/secretary:
Signed as a deed by [Guarantor]
acting by [ ] and
[ ]
Director:
Director/secretary:
Signed as a deed by [Project Company]
acting by [ ] and
[ ]
Director:
Director/secretary:
-75-
EXHIBIT 2
OFFSHORE ACCOUNT ARRANGEMENTS
1. Sypps shall, unless paid from another source, be paid all sums properly
due and owing under this Agreement out of the Offshore Bank Account as
defined in the Tri-Partite Agreement among Sypps, SOMISY and Randgold
Resources Limited a copy of which appears in the annexure to this
Exhibit 2.
2. The Parties together with Randgold Resources Limited shall execute the
Tri-Partite Agreement a copy of which appears in the annexure to this
Exhibit 2.
-76-
TRI-PARTITE AGREEMENT
This Tri-Partite Agreement is dated as of __________ day of ____________ 2000
(this "Tri-Partite" Agreement) between ROLLS-ROYCE POWER VENTURES LIMITED
("Sypps") registered in and in accordance with the laws of [___] under number
[_____]; SOCIETE DES MINES DE SYAMA ("SOMISY") a majority owned subsidiary of
Randgold Resources Limited registered in and in accordance with the laws of the
Republic of Mali under number 3724; and RANDGOLD RESOURCES LIMITED having its
registered office at La Motte ▇▇▇▇▇▇▇▇, St Helier, Jersey JE1 BJ ("RRL").
WHEREAS this Tri-Partite Agreement is entered into pursuant to paragraph 2 of
Exhibit 2 to the Deferred Terms Agreement made between SYAMA and Sypps.
NOW THEREFORE it is agreed as follows:
1. DEFINITIONS
Unless expressly defined or the context requires otherwise,
capitalised terms shall have the same meanings as set out in the
Deferred Terms Agreement save that the following capitalised terms
shall have the meanings herein specified, and shall include in the
singular number the plural and in the plural the singular:
DEFERRED TERMS AGREEMENT the agreement dated [ ] between SOMISY and
Sypps for the sale and purchase of
generating and other equipment together
with the supply of spare parts and other
assistance as therein set out.
IFC means the International Finance
Corporation, an international organisation
established by Articles of Agreement among
its member countries.
-77-
THE SECURITY AGREEMENT means the Security and Reserve Account
Agreement dated June 2, 1998 among SOMISY,
IFC and Citibank., N.A.
THE OFFSHORE BANK ACCOUNT means the bank account set out or referred
to in the Statement of Cash Cascade.
THE STATEMENT OF CASH means the statement appearing in Appendix
CASHCADE 1 to this Tri-Partite Agreement.
2. OFFSHORE ACCOUNT
2.1 RRL hereby warrants to Sypps that the statements set out in
the Statement of Cash Cascade are correct.
2.2 Pursuant to the Security Agreement, SOMISY has created in
favour of IFC, inter alia, a first priority security interest
in, and a security assignment of, the Offshore Bank Account
and all funds held therein or credited thereto. SOMISY
warrants that it has not assigned, pledged or granted to any
party other than IFC any security interest in the Offshore
Bank Account and/or in the funds held therein or credited
thereto. For the avoidance of doubt, the parties hereto agree
that neither this agreement nor the Deferred Terms Agreement
nor any other agreement arising hereunder or thereunder
creates, or is intended to create, any security interest in,
grant any pledge or otherwise encumber the Offshore Bank
Account in favour of Sypps or any of its Affiliates (as such
term is defined in the Deferred Terms Agreement).
2.3 In the event that the Offshore Bank Account shall cease to be
held in accordance with paragraph 1 of the Statement of Cash
Cascade then SOMISY shall, with the prior written consent of
IFC, cause a substitute bank account to be opened at a bank of
international repute outside the Republic of Mali. The
provisions of this Tri-Partite Agreement shall apply to such
substitute account as if it were the Offshore Bank Account.
-78-
3. ADDITIONAL CHARGES OF THE OFFSHORE BANK ACCOUNT
In the event that either or both SOMISY and RRL with the prior written
consent of IFC permit any party other than IFC to take a charge by way
of security or shall grant any pledge or otherwise encumber the
Offshore Bank Account then and in any such case either or both SOMISY
and RRL (as the case may be) shall issue such authorisations as shall
be appropriate and shall secure that the additional holder or holders
of such security shall so permit to the intent that Sypps shall
receive from the Offshore Bank Account as an operational expense of
the Mine such amount or amounts as are properly due and owing under
this Tri-Partite Agreement.
4. TERMINATION
This Tri-Partite Agreement shall expire on the expiration of the term
or on receipt by Sypps of all sums properly payable in the event of
the earlier termination of the Deferred Terms Agreement.
5. PROPER LAW
This Tri-Partite Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance
with the Laws of England and Wales, the parties hereby submit to the
non-exclusive jurisdiction of the English Courts and SOMISY hereby
irrevocably appoints RRL to accept service of all proceedings on its
behalf.
6. SERVICE
The address for service for Sypps shall be as appears in the Deferred
Terms Agreement or such other address as may be notified in accordance
with its terms. The address for services of RRL shall be at its
registered office from time to time copied to ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇.
IN WITNESS WHEREOF the parties have caused the Tri-Partite Agreement to be duly
executed and delivered as a deed by their duly authorised Officers or
representatives as of the date first above written.
-79-
SIGNED by
......................................................
for and on behalf of ROLLS-ROYCE POWER VENTURES LIMITED
SIGNED by
......................................................
for and on behalf of SOCIETE DES MINES DE SYAMA
SIGNED by
......................................................
for and on behalf of RANDGOLD RESOURCES LIMITED
-80-
APPENDIX 1
STATEMENT OF CASH CASCADE FOR SYAMA MINE
7. The gold is purchased ex Mine by NM Rothschilds and payment is made
within 2 Business Days of delivery into the SOMISY account with
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ under account number ▇▇▇▇▇▇▇▇ bearing
title Randgold SOMISY.
7.1 The above-referenced SOMISY account is subject to a first priority
security interest and security assignment in favour of IFC, created by
SOMISY pursuant to the Security Agreement.
8. Subject to IFC's rights and interest in such SOMISY account, payments
may only be made out of the account in accordance with the mandate
requiring any authorisation to be signed by authorised persons who are
employed by Randgold Resources Limited. Any change in signatory can
only be with the consent of the existing signatories.
9. SOMISY is only entitled under its current arrangements with the Mali
Government and in accordance with Mali law to hold two bank accounts,
one onshore Mali and the other offshore. The onshore account will
receive funds from the offshore account which will be used to discharge
local liabilities of SOMISY.
10. In addition to payments to the onshore account the offshore account
shall be utilised to:-
10.1 discharge trade creditors;
10.2 discharge, unless discharged out of other funds of Randgold Resources
Limited, the debt service to SOMISY's Lenders;
10.3 pay management and other fees properly payable to Randgold Resources
Limited; and
-81-
10.4 discharge inter-company debts.
11. Payments to Randgold Resources Limited are made either to its rand bank
account in South Africa or to a bank account held in Jersey, Channel
Islands, with National Westminster Bank plc.
-82-
EXHIBIT 3
PART 1
PLANT
ORIGIN UK
5012 Engine 2 Units
Turbo-chargers 2 Pairs
Engine holding down bolts (set of 42) 2 Sets
Resin chocking 9 Pallets
Engine Flexibles (set of 4) 2 Sets
Exhaust transition pieces 2 Sets
Air intake transition pieces 2 Units
Platforms and ladders 2 Sets
Flexible coupling 2 Units
Oil mist detector 2 Units
Motor driven compressor 2 Units
Compressor control panel 1 Unit
Starting Air Receiver 2 Units
Strainer assemblies 2 Units
Filter / drier assembly 2 Units
Lubricating oil filter and cooller module 2 Units
Fill valve assembly 2 Units
Diesel transfer pump 2 Units
Flowmeter assembly 2 Units
Fuel oil bus rail module 2 Units
Control oil module 2 Units
Exhaust details (Silencer, Manifold and spares) 2 Sets
Exhaust flexibles (turbocharger side) 4 Units
Exhaust flexible (silencer side) 2 Units
Charge air filter, site mounted 2 Units
Charge air silencer 2 Units
Charge air flexibles 4 Units
Jacket water thermostat 2 Units
Secondary cooling water thermostat 2 Units
Jacket water heating module (attached to engine) 2 Units
Air blast cooler 2 Units
Special engine tools 1 Units
ORIGIN FINLAND
AC Generator 2 Units
ORIGIN SOUTH AFRICA
Generator neutral earthing contactor board 2 Units
Generator neutral earthing resistor 2 Units
LV Engine Auxiliary MCC, including local LV cables 2 Units
24V DC batteries and charger 1 Unit
Engine Control Panels 1 Set
-83-
PART 2
BALANCE OF PLANT
Those items maked with a "*" shall be Sourced by Sypps in accordance with
Section 5.3
FUEL TREATMENT
Mobile fuel oil treatment module* 1 Unit
GAS OIL SYSTEM
Piping, filters and valves for Gas Oil fuel ring main 1 Lot
10m^3 gas oil header tank, 1 Unit
LUBRICATING OIL SYSTEM
Pipes, pumps, filters and valves for lubricating oil system* 1 Lot
Lubricating oil storage tank 1 Unit
COMPRESSED AIR SYSTEM
Piping and valves for compressed air system* 1 Lot
COOLING SYSTEM
Jacket water piping, filters, pumps and valves* 1 Lot
Jacket water header/expansion tank 2 Unit
Jacket water first fill of chemicals 1 Lot
Secondary water piping, filters, pumps and valves* 1 Lot
Secondary water header/expansion tank 2 Unit
Secondary water first fill of chemicals 1 Lot
CHARGE AIR SYSTEM
Ducting 1 Lot
EXHAUST SYSTEM
Exhaust air ducting 1 Lot
Insulation for exhaust air ducting* 1 Lot
Exhaust gas vents 1 Lot
FIRE FIGHTING SYSTEM
Mobile foam generator 1 Unit
Fire fighting hose reel 2 Unit
Fire detection and alarms systems 1 Lot
Piping and valves 1 Lot
CO2 or dry power extinguisher 7 Unit
SLUDGE AND WASTE OIL SYSTEM
Engine fuel oil drain tank 1 Unit
Engine fuel oil drain piping, pumps and valves* 1 Lot
Oil/water separator* 1 Lot
Drainage pumps* 2 Unit
Sludge transfer pump unit 1 Unit
-84-
Sludge tank 1 Unit
Piping, pumps and valves for water oil system* 1 Lot
TREATED WATER SYSTEM
Piping, pumps and valves for potable water system* 1 Lot
Water treatment plant* 1 Unit
Piping, pumps and valves for water treatment system* 1 Lot
STEEL STRUCTURES
Steel structures for charge air duct and silencer support* 1 Lot
Steel structures for exhaust duct and silencer support* 1 Lot
Steel structures to support tanks* 1 Lot
Raised steel floor 1 Lot
Building extension 1 Lot
Overhead crane extension 1 Lot
ELECTRICAL
11kV generator circuit breakers, including metering 1 Unit
3.3kV neutral earthing compensator 1 Unit
MV and LV cables and cable terminations and supports* ▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇* ▇ ▇▇▇▇
▇▇▇▇▇▇▇ small power and distribution board 1 Unit
24V DC charger and batteries for second engine system 1 Set
Safety earthing 1 Lot
INSTRUMENTATION
Fiscal meters for lubrication oil and engine cooling water* 1 Lot
TOOLS
Facilities for analysing fuel, water and lubrication oil* 1 Lot
▇▇▇▇▇▇▇ tools 1 Lot
SITE FACILITIES
Extension to existing engine house, including new headblock 1 Lot
Plumbing and sanitary installation in new headblock 1 Lot
Lighting, indoor and outdoor* 1 Lot
Lightning rod(s) 1 Set
Furniture for office, document store, workshop and store* 1 Lot
Shelves 1 Lot
Lockers, cabinets* 1 Lot
Extension to overhead travelling crane rails 1 Lot
Air conditioning for office, toilets and workshop* 1 Lot
Office 1 Unit
Fire fighting pump shelter 1 Unit
Foundations for all structures, modules, tanks and buildings 1 Lot
Bund walls around fuel storage and treatment areas 1 Lot
Roads inside Facility boundary 1 Lot
Parking area 1 Lot
Sewage system 1 Lot
Drainage system 1 Lot
-85-
Telephone system 1 Lot
Security systems 1 Lot
Fence around Facility 1 Lot
MATERIALS
Materials for civil and building works. 1 Lot
Materials for mechanical works, e.g., welding rods, nuts, bolts,
steel sections 1 Lot
Materials for electrical and C&I works, e.g. cable lugs, core numbers,
insulation tape, cable ties. 1 Lot
-86-
PART 3
EXISTING FACILITY
EXISTING FACILITY
Gas Oil fuel transfer pump 1 Unit
Air receiver 1 Unit
Air compressor for instrument air 1 Unit
MTU diesel generator sets complete with auxiliaries, switchgear and
building 2 Sets
FBM diesel generator sets complete with auxiliaries, switchgear and
building 10 Sets
Station auxiliary transformers 2 Units
FBM engine complete 1 Lot
Overhead travelling crane 1 Unit
-87-
PART 4
TECHNICAL REQUIREMENTS
1- INTRODUCTION
This Exhibit 3, Part 4 describes the Facility and the associated technical
details as follows.
2- DESCRIPTION OF THE FACILITY
2.1- GENERAL
The Facility shall be located in the area designated by SOMISY for the operation
of the Facility, which shall operate under the following conditions:
Altitude: 300 metres above sea level
Maximum ambient temperature 45 (degrees) C
Minimum ambient temperature 10 (degrees) C
Design ambient temperature 37 (degrees) C
Ground bearing capacity 150 kPa
All contracted and guaranteed levels of Availability, Fuel Efficiency Rate and
electrical limits are quoted at the Site, which includes the average ambient
temperature of 37 (degrees) C and a minimum power factor of 0.8.
Generally, save to the extent the Existing Facility is non-compliant, the
Facility shall be designed and built according to the industry standards,
incorporating harmonised European Standards, British Standards and Codes of
Practice relevant to the Works.
THE FACILITY SHALL INCLUDE THE FOLLOWING:
Perimeter fence;
Road and access area within the Facility Site boundary;
Drainage;
-88-
Earthing grid;
Fire detection and hydrant system together with fire pump;
Main Facility building (including engine & auxiliaries)
Bulk Distillate Diesel Oil (DDO) storage facilities;
Lubricating oil storage facilities;
Radiators;
Office, mess room, shower & toilet room, control and electrical room, workshop
and dedicated storage area.
Engines (▇▇▇▇▇ 5012) together with associated alternators;
Engine auxiliaries including: lube-oil treatment module, cooling module, fuel
modules;
Starting air system;
Electrical MV system;
Electrical LV system;
DC and control system;
Intercom system;
Facilities for analysing Fuel, water and lube oil;
Mechanical and electrical building services lighting, small power, ventilation
and AC, plumbing and sanitary facilities, fire alarm system);
Existing MTU and FBM generator sets; and
Any works inside the Facility boundary.
THE FACILITY SPECIFICALLY EXCLUDES:
All roads outside the Facility Site boundary;
The provision and maintenance of housing for the staff of Sypps and the
Operator;
The existing 3.3kV distribution switchgear and cables; and
Any works outside the Facility Site boundary.
A list of equipment supplied as part of the Facility is given in Parts 1, 2 and
3 of this Exhibit.
3 INTERCONNECTION POINTS
3.1 WATER
-89-
POTABLE WATER
SOMISY shall supply potable water within the Facility. Such water shall be for
domestic usage. The estimated daily usage by the Facility is 1m^3/day and such
supply shall be through a 50mm pipe at a minimum pressure of 7bar(g). The
interface point shall be at the Facility boundary at a flange the size of which
shall be specified by Sypps.
SAND-FILTERED WATER
SOMISY shall supply sand-filtered raw river water within the Facility for the
cooling system filling and top up; turbocharger water washing; and firefighting.
The estimated daily usage by the Facility is 1m^3/day.
Such supply shall be through a 100mm pipe at a minimum pressure of 4bar(g) and
the interface point shall be the inlet flange of the Facility water treatment
tank.
3.2 SEWAGE AND DRAINAGE
The Facility sewage and drainage system shall be connected to the Mine's systems
at the Facility boundary.
The Facility drainage system shall incorporate an interceptor trap to normal
industrial standards.
3.3 GAS OIL FUEL
The point of supply of the GO fuel shall be at a flange within the Facility
boundary as identified by Sypps.
3.4 LUBE-OIL
SOMISY shall supply the lubrication oil necessary for the Facility at the inlet
valve of the bulk lubrication oil storage tank. The Lube Oil Specification is
included in Part 4 of Exhibit 8.
3.5 ROADS
-90-
This point of interface of the Facility roads with the incoming roads to the
Facility is at the Facility boundary.
3.6 ELECTRICAL
The electrical interface shall be as follows:
The Facility interconnection point shall be at the outgoing terminals of the
Facility's 3.3kV or 11kV equipment that connects the Facility to the Mine.
3.7 EARTHING
The earthing connection between the Mine and the Facility shall be supplied,
installed and maintained by SOMISY (including supply and installation of
necessary cables, trays, supports, glands, lugs and termination kits). The
interface with the Mine earth system shall be at the Facility border.
3.8 OIL WASTE AND SLUDGE
The interconnection point for the removal of oil waste and sludge from the
Facility shall be the outlet flange of the sludge drain pump within the Facility
boundary.
3.9 TELEPHONE.
SOMISY shall install a complete phone system to the Facility that operates on
the same system as SOMISY with 2 lines for international dialling.
4 ELECTRICAL LIMITS
ELECTRICAL REQUIREMENT
- The Facility includes 2 Units and 10 existing medium speed diesel
generators.
- The installed capacity of the Units shall be 11.4MW at Site conditions.
- The Units shall be designed to provide the Guaranteed Contracted
Capacity.
-91-
- Each Unit shall be able to deliver 5.7MW, at the generator terminals,
at a Site temperature of 37 (degrees) C.
FACILITY ELECTRICAL DESIGN:
- Generally, the electrical equipment incorporated in the Facility shall
comply with IEC standards/regulations.
- Frequency: 50hz.+/- 5% (steady load) at Facility bus-bar.
-92-
EXHIBIT 4
PART 1
SHIPMENT SCHEDULE
Sypps shall arrange for shipment of Plant in accordance with the following
Shipment Schedule. For the purpose of this Part 1 of Exhibit 4, the Base Date
shall be 14 days following satisfaction of the Suspensive Conditions.
------------------------------------------------ -----------------------------------------------
ITEM OF PLANT DATE OF SHIPMENT (WEEKS AFTER BASE DATE)
------------------------------------------------ -----------------------------------------------
------------------------------------------------ -----------------------------------------------
Unit 1 4
------------------------------------------------ -----------------------------------------------
Unit 1 auxiliaries 6
------------------------------------------------ -----------------------------------------------
Unit 2, its associated auxiliaries and station 14
common systems
------------------------------------------------ -----------------------------------------------
-93-
PART 2
SPARE PARTS SCHEDULE
This Part 2 of Exhibit 4 shall apply only to the Units.
PART DESCRIPTION REQUIRED EVERY ... HOURS EX-WORKS DELIVERY IN WEEKS
FUEL OIL FILTER 1000 1
LUB OIL FILTER 1000 1
INJECTOR OVERHAUL PACK 6000 4
CRANKCASE DOOR KIT 6000 4
N01 INTER SERVICE JOINTS (12 CYLINDER) 6000 4
CRANKCASE VALVE JOINTS 6000 4
CYLINDER HEAD FITTING PACK 12000 4
PISTON RING PACK 12000 4
LARGE END BEARING 12000 4
T/C SPARES KIT 12000 6
INJ PUMP OVERHAUL PACK 12000 10
PISTON & LINER FITTING PACK 12000 6
L.O. PUMP OVERHAUL PACK 12000 10
WATER PUMP OVERHAUL PACK 12000 10
N02 INTER SERVICE JOINTS (12 CYLINDER) 12000 10
EXHAUST VALVE 24000 10
INLET VALVE 24000 6
VALVE GUIDE 24000 6
EXH VALVE SEAT 24000 6
INL VALVE SEAT 24000 6
MAIN BEARING 24000 10
THRUST BEARING 24000 10
▇▇▇▇ ▇▇▇ BOLT 24000 4
▇▇▇▇ ▇▇▇ NUT 24000 4
▇▇▇▇ ▇▇▇ STUD 24000 4
▇▇▇▇ ▇▇▇ NUT 24000 4
VALVE SPRING 24000 10
VALVE COLLET 24000 10
TAPPET ASSEMBLY 24000 10
VALVE ROTATOR 24000 10
EXHAUST BELLOWS 24000 6
VEE CLAMP 24000 6
AIR INLET BELLOWS 24000 6
MAJOR OVERHAUL JOINT KIT (12 CYLINDER) 24000 10
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 6
CAMSHAFT ▇▇▇▇ 36000 6
CAMSHAFT THRUST RING 36000 6
GEAR ▇▇▇▇ 36000 6
-94-
VALVE LEVER ▇▇▇▇ 36000 6
PRESSURE RELIEF VALVE 36000 6
START AIR VALVE 36000 6
INTERM GEAR ▇▇▇▇ 36000 6
ROLLER 36000 6
ROLLER PIN 36000 4
FUEL PUMP ROLLER 36000 6
FIXED TAPPET 36000 6
-95-
PART 3
SPARE PARTS INVENTORY
This Part 3 of Exhibit 4 shall apply only to the Units.
PART DESCRIPTION
QTY
2 CYLINDER HEAD C/W INL & EXH VALVE
1 VALVE LEVER BRACKET
1 VALVE LEVER ASSEMBLY
1 CROSSHEAD ASSEMBLY
1 VALVE LEVER SHAFT
1 CYLINDER HEAD RELIEF VALVE
1 INDICATOR VALVE
1 START AIR VALVE
2 CYLINDER HEAD FITTING
6 PISTON ASSEMBLY
6 PISTON RING PACK
6 PISTON PIN
6 CYLINDER LINER
6 PISTON & LINER FITTING PACK
2 CONNECTING ROD
2 LARGE END BEARING
2 MAIN BEARING
2 THRUST BEARING
6 FUEL INJECTORS
6 INJECTOR PIPE
2 INJECTION PUMP
6 INJECTION SEAL PACK
2 PUSH ROD
1 EXHAUST BELLOWS
1 V BAND CLAMP
1 GUIDE BRACKET ASSEMBLY
1 START AIR DISTRIBUTOR
6 MAIN BEARING STUD
6 MAIN BEARING NUT
6 CYLINDER HEAD STUD
6 CYLINDER HEAD NUT
1 TURBOCHARGER COMPLETE
1 LUB OIL PUMP COMPLETE
1 WATER PUMP COMPLETE
2 DOOR SEAL KIT
1 DIGITAL GOVERNOR & EQUIPMENT
-96-
PART 4
ORDER FORM
Order on printed paper from Operator
Order form
Date:
Order number:
SUPPLIER INFORMATION
name:
address:
contact person:
telephone number:
facsimile number:
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
ITEM PART NUMBER DESCRIPTION QTY REQUIRED BY UNIT TOTAL PRICE
DATE PRICE
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
------------- --------------- ---------------------------- ------------ -------------- ---------- ------------
Signature
..........................................
..........................................
Date
-97-
EXHIBIT 5
INSURANCES
In this Exhibit, capitalised terms not defined in the Agreement shall bear the
meaning understood within the London Insurance Market.
1. INSURANCE TO BE OBTAINED AND MAINTAINED BY SOMISY
1.1 Insurance of the Plant whilst in Transit ex works for replacement
value;
Policy Form: MAR 91 or similar policy form
Insured Parties: 1. SOMISY
2. Sypps
3. IFC
Insured Property: All goods and/or merchandise and/or interests
appertaining to the Insured's business
including all packing materials, receptacles,
labels and the like when necessary for
commercial purposes, and consisting
principally of but not limited to:
Building materials of all descriptions
including cement, steel reinforcing,
machinery and spares, mining equipment,
chemicals (hazardous and non hazardous),
electricity generators and ancillary
equipment, plant crushing equipment, cooling
systems, tools, batch plant, laboratory
equipment, surveying instruments, heavy duty
vehicles, tubing and piping, caterpillar
trucks, electrical goods and cables.
-98-
Conditions of Cover: SHIPMENT UNDER DECK - Against all risks of
loss or damage to the subject matter insured
in terms of Institute Cargo Clauses (A).
SHIPMENT ON DECK (OTHER THAN IN CONTAINER)
LOADS/GOODS SHIPPED LOOSE/UNPROTECTED -
Against loss or damage to the subject matter
insured in terms of Institute Cargo Clauses
(A) excluding rust, oxidisation,
discolouration and water damage.
CONTAINER LOAD SHIPMENTS - Against all risks
of loss or damage to the subject matter
insured in terms of Institute Cargo Clauses
(A).
AIRFREIGHT CONSIGNMENTS - Against all risks
of loss or damage to the subject matter
insured in terms of Institute Cargo Clauses
(Air).
POSTAL SENDINGS - Against all risks of loss
or damage to the subject matter insured in
terms of Institute Cargo Clause (A).
Institute Clauses: The following Institute Clauses apply:
Institute Cargo Clauses (A) 1.1.1982 (Clause
No. 252)
Institute Cargo Clauses (B) 1.1.1982 (Clause
No. 253)
Institute Cargo Clauses (Air) 1.1.1982
(Clause No. 259)
Institute Classification Clause 13.04.1992
(Clause No. 354)
Institute Replacement Clause 01.01.1934
(Clause No. 161)
Institute Strikes Clauses (Cargo) 1.1.1982
(Clause No. 256)
Institute Strikes Clauses (Air Cargo)
1.1.1982 (Clause No. 260)
-99-
Institute War Clauses (Cargo) 1.1.1982
(Clause No. 255)
Institute War Clauses (Air Cargo) (excluding
Sendings by Post) 1.1.1982 (Clause No. 258)
Institute War Clauses (Sendings by Post)
1.1.1982 (Clause No. 257)
Institute War Cancellation Clause (Cargo)
01.12.1982 (Clause No. 271)
Institute Location Clause 26.03.1980 (Clause
No. 66)
Institute Malicious Damage Clause 01.08.1982
(Clause No. 266)
Institute Theft, Pilferage and Non-delivery
Clause 01.12.1982 (Clause No. 272)
Institute Radioactive Contamination Exclusion
Clause 1.10.1990 (Clause No. 356)
The "Standard" S.A.I.A. Exceptions
Important Clause
First Loss Clause
Limit of Indemnity: Maximum per Conveyance and/or Vessel and/or
Aircraft:
Rand 20,000,000 (or the maximum individual
declared shipment value).
Maximum per Location:
Rand 40,000,000
Valuation Basis: Delivery Cost plus 10%.
-100-
In the event of total loss prior to landing,
the basis of valuation shall be:
The prime cost of the goods plus expenses of
and incidental to shipping the freight for
which the Insured is liable and the charges
of insurance
Also to pay duty and/or VAT and/or landing
and similar charges, if incurred in
anticipation of arrival.
The Insured agrees to take all reasonable
steps to obtain a refund of such charges and
return the nett amount to underwriters.
Voyages: From the time that the Insured Property is
first moved for commencement of transit
within contractors' or suppliers' or
sub-contractors' premises anywhere in the
world, including temporary storage in the
ordinary course of transit, to delivery to
final contract site situated at Syama mine,
Mali and/or vice versa.
Including all loading and unloading risks.
Policy Period: Continuous open cover, until cancelled, to
accept all shipments and/or sendings for the
full amount as declared on or after 30th June
1999.
Conveyances: Conveyances and vessel and/or vessels of any
type and/or air and/or post and/or rail
and/or road conveyances.
Subject to the Institute Classification
Clause or held covered.
The terms of the Classification Clause shall
not prejudice any claims hereunder when
presentation of claims to Underwriters is the
first indication that transhipment was
effected on a vessel not covered by the
Institute
-101-
Classification Clause; the appropriate
additional premium will be paid if required.
Deductibles: Rand 10,000 will apply each and every loss.
Exclusions: Per Institute Cargo Clauses (A), Institute
Cargo Clauses (B), Institute Strikes Clauses
(Cargo) and Institute War Clauses (Cargo)
Electrical and Mechanical Derangement unless
caused by an insured peril
Extensions: The policy wording to include but not be
limited to:
- Brand Names/Trade Marks
- Returned Goods Clause
- General Average and Salvage Charges
Payable in Full
- Insolvency Exclusion Clause (JC 93)
- Deck Cargo shipped on Under Deck ▇▇▇▇ of
Lading
- Contribution Clause
- Debris Removal Costs Clause
- Duty of Insured Clause
- Letter of Credit Clause
- Concealed Damage (30 days)
- Cover after Discharge (120 days - sea,
60 days - Air)
- Hijacking Clause
- Labels Clause
- Repairers Clause
- Replacement Clause
- Apportionment of Recoveries
- Destruction of Salvage
-102-
- Shippers Protection Clause
- First Loss Clause
- CIF Shipments Clause (Imports)
1.2 Construction All Risks insurance during the Construction Phase;
Insured Parties: 1. SOMISY
2. Sypps
3. The Operator
4. IFC
5. All other contractors and sub-contractors
of any tier.
Project: The addition and subsequent operation and
maintenance of the Units and the modification
of the Facility.
Insured Property: All property and interests of every
description intended for the Project
including permanent and temporary works and
materials, plant and equipment for
incorporation therein.
Indemnity: During Transit, Construction, Erection,
Testing and Commissioning
"All Risks" of loss, destruction or damage to
the Insured Property arising from any cause
(not otherwise excluded) whilst on or about
the Site of the Project and elsewhere in Mali
including whilst in transit (other than by
sea or air) or during any trans-shipment,
storage or deviations en route and including
loading and unloading.
During Defects Liability or Maintenance
Period.
Loss, destruction or damage to the Insured
Property occurring whilst the contractor is
carrying out his
-103-
responsibilities during the defects liability
period specified in the Contract.
Period: From date 01 September 1999 to 31 August 2000
annually renewable for construction/erection,
on site testing and commissioning (plus 12
months defects liability after completion).
Limit of Indemnity: US$22,000,000 being the full contract sum for
the Power Plant only (including an allowance
for variations and any free supplied items).
Deductibles: The first US$50,000 of each and every
occurrence
Deductibles to be paid by the party
contractually responsible for the occurrence.
Extensions: The policy wording to include:
Automatic Reinstatement of Sum Insured Clause
without additional premium for losses up to
US$150,000
Cost Escalation Clause - 20%
Professional Fees and Debris Removal Clauses
Local Authorities Clause
Free Issue Material Clause
Expediting Expenses Clause
50:50 Marine Loss Sharing Clause
Loss Prevention Expenses Clause
Plans, Specifications and Computer Records
Clause
Financial Interest of Other Parties Clause
-104-
Testing and Commissioning Clause - 3 months
(90 days)
Seventy Two Hour Clause.
Exclusions: The policy wording may exclude, but not be
limited to:
Design, plan, specification, materials,
workmanship clause (however resultant damage
to be included)
Wear, tear, gradual deterioration, etc.
Unexplained Shortages
Loss of Cash, etc.
Liquidated Damages, Penalties or any
Consequential Loss not specifically included
War risks etc.
Radioactive Contamination, etc.
Transit by sea or air
Constructional plant, equipment, tools,
tackle, site huts and contents
1.3 Third Party Liability insurance during the Construction Phase;
Insured Parties: 1. SOMISY
2. Sypps
3. The Operator
4. IFC
5. All other contractors and sub-contractors
of any tier
-105-
Project: The addition and subsequent operation and
maintenance of the Units and the modification
of the Facility.
Indemnity: The legal liability of the Insured to pay
damages, costs and expenses as a result of:-
- death of or bodily injury to or illness
or disease contracted by any person
- loss of or damage to property
- interference to property or the enjoyment
of use thereof by obstruction, trespass,
loss of amenities, nuisance or any like
cause, arising out of and in connection
with the Project.
Limit of Indemnity: US$5,000,000 any one occurrence or series of
occurrences arising from one event but in the
aggregate in respect of sudden, unintended
and unexpected pollution in respect of the
Power Plant only and US$2,500,000 for the
balance of the Project.
Territorial Limits: Worldwide
Deductibles: The first US$5,000 of each and every
occurrence in respect of third party property
damage only.
Period: From date 01 September 1999 to 31 August 2000
annually renewable for construction/erection,
on site testing and commissioning (plus 12
months defects liability after completion).
-106-
Extensions: The policy wording to include but not be
limited to:
- Costs Clause
- Cross Liability Clause.
Exclusions: The policy wording may exclude, but not be
limited to:
- the Insured Parties' own employees
- use of mechanically propelled vehicles
licensed for road use, aircraft and
watercraft
- loss, destruction or damage to property
which was inevitable
- pollution or contamination unless caused
by a sudden, unintended and unexpected
incident (aggregate limit of indemnity).
1.4 Third Party Liability Policy during the Operational Phase;
Insured Party: 1. SOMISY
2. IFC
Insurance Cover: All sums which the Insured shall become
legally liable to pay as damages or
compensation consequent upon Personal Injury
or Property Damage and other contingencies
arising out of an Occurrence during the
Period of Insurance in connection with the
Business by reason of liability imposed upon
the Insured by law or assumed by the Insured
under any written contract or agreement.
-107-
The Business: The Company undertakes exploration worldwide
and manages the Syama and Morila Gold Mines
in Mali West Africa which includes
electricity generation through ownership
and/or operation and/or maintenance of the
power station at Syama mine, Mali and all
ancillary and associated activities of The
Insured.
Period of Insurance: (a) from 1 September 1999 to 31 August 2000
(both days inclusive)
(b) any subsequent period for which the
Insurer may accept payment for the
renewal of this Policy.
Territorial Limits: Worldwide.
Limits of Liability:
Public Liability: UK(pound)50,000,000 any one occurrence in
respect of claims made during the Period of
Insurance
Pollution Liability: UK(pound)50,000,000 any one occurrence and
UK(pound)50,000,000 in the aggregate in
respect of claims made during the Period of
Insurance
Excess Provision: Rand 75,000 in respect of each and every
incident of property damage.
Main Exclusions:
EMPLOYEES: Personal injury to employees, for this purpose including all persons
self-employed, hired, loaned, acquiring work experience and all labour supplied
by and/or hired from and/or through others.
-108-
VEHICLES: Injury or third party property damage arising from the ownership
possession or use of aircraft, waterborne craft and mechanical vehicles. This
exclusion does not apply to mechanical vehicles being used as a tool of trade.
POLLUTION: Other than caused by the sudden identifiable unintended and
unexpected incident which takes place in its entirety at a specific time and
place during the Period of Insurance anywhere in the world other than North
America or where such claim is brought anywhere in the world other than in a
Court of Law in North America.
DEFECTIVE DESIGN: Claims arising out of advice, design or specification given
for a separate and specific fee
CARE CUSTODY OR CONTROL: Damage to property belonging to the Insured
or in the care custody or control of the Insured other than
(a) Employees', directors' and/or visitors' property (including
vehicles and contents)
(b) Premises (including their contents), plant, equipment
and all other property not owned by or leased or rented
to the Insured at or on which the Insured is
undertaking work in connection with the Business.
(c) Premises leased or rented to the Insured (including
landlords fixtures and fittings) except where legal
liability has been assumed under a tenancy or other
agreement and would not have attached in the absence of
such agreement.
PRODUCTS SUPPLIED: legal liability for the cost of repairing damage to
and/or costs of recall, removal, repair, alteration, replacement or
reinstatement of any products supplied and/or contract works executed
by The Insured, caused or necessitated by any defect therein or
unsuitability thereof for its intended purpose.
General war, radioactivity, sonic boom and penalty and delay standard
exclusions
Main Extensions:
-109-
1. Director's Indemnity
2. Project Facilities Indemnity
3. Legal fees and expenses
4. Cross Liabilities Clause
5. Data Protection Act
6. Defective Premises Act.
Subject to Policy Terms, Conditions and Exceptions.
1.5 Material Damage Insurance (All Risks) during the Operational Phase;
Insured: 1. SOMISY
2. Sypps
3. IFC
Cover: Section I
Damage to power station property from any
cause not excluded by policy terms,
exceptions, definitions and conditions
Section II
Business interruption arising from Damage
insured under Section I Damage to the Insured
Property from any unexcluded cause during the
Insurance Period arising out of or in the
course of or in connection with the execution
of The Business.
Business: Mining and gold extraction activities
including electricity generation through
ownership and/or operation and/or
-110-
maintenance of the power station at Syama mine
and all ancillary and associated activities of
The Insured.
Premises: Syama mine, Mali
Period: From 1 September 1999 to 31 August 2000 (both
days inclusive) and any subsequent period for
which the Insurer may accept payment for the
renewal of this Policy.
Sum Insured Section I US$22,000,000 (Power Plant Only)
Section II US$4,000,000 (Power Plant Only)
Indemnity Period: Six (6) months beginning after the time exclusion
during which the results of the Business shall be
adversely affected in consequence of the Damage.
Excess: US$500,000 per event - combined both Sections
Exclusions: All Sections
DEFECTS: latent defects, defective materials or workmanship or of the
Insured's own faulty design, plan or specification, other than
resulting in insured damage.
WEAR AND TEAR: wear and tear, wasting, wearing out or away or other
gradual deterioration, rust, oxidation, wet or dry rot, shrinkage,
evaporation, loss of weight, dampness, dryness, marring, scratching,
vermin or insect damage other than resulting in insured damage.
CONSEQUENTIAL LOSS: liquidated damages, penalties for delay or
detention or in connection with guarantees of performance or
efficiency or any other consequential loss unless specifically
provided for by this Policy.
VEHICLES: damage to any mechanically propelled vehicle licensed for
road use, other than mechanical plant in transit or on or about the
situation or other working or storage area.
-111-
POLLUTION: other than arising from sudden, unexpected and unforeseen
cause.
Standard war, radioactivity, terrorism, sonic boom, money and
securities, wear and tear, penalty and delay, vessels/aircraft,
inventory and date recognition exclusions.
Extensions: Section I
1. Property abroad
2. Money - limit US$50,000
3. Computer equipment maintenance warranty
4. Professional Fees and Debris Removal
5. Expediting Costs
6. 50:50 Marine Loss Sharing
7. Documents and Computer Records - limit
US$250,000
8. Local Authorities
9. Financial Interest of other Parties
10. Reinstatement
11. Temporary Repairs
12. Electrical/mechanical breakdown in so far as
it is insurable and available at commercially
reasonable terms
Section II
1. Alternative Premises
2. Property away from the Premises
3. Prevention of Access
4. Utility Suppliers Extension
5. Suppliers and Customers Extension (Limit -
as per Section II Sum Insured)
All Sections
-112-
1. Several Liabilities
2. Financial Interest of other Parties
3. Contractual Liability
EXHIBIT 6
PART 1
REUSABLE
For the purpose of this Agreement, unless otherwise provided herein, the
following plant and equipment shall be deemed to be "Reusable". This list is
non-exhaustive and is subject to variation at the entire discretion of Sypps:
----------------------------------------- ---------------
ENGINE
----------------------------------------- ---------------
5012 Engine 2
----------------------------------------- ---------------
Turbo-chargers 2 pairs
----------------------------------------- ---------------
ANCILLARIES
----------------------------------------- ---------------
Engine Flexibles 2 sets
----------------------------------------- ---------------
Exhaust transition pieces 2
----------------------------------------- ---------------
Air intake transition pieces 2
----------------------------------------- ---------------
Fuel treatment module 1
----------------------------------------- ---------------
Oil treatment trolley 1
----------------------------------------- ---------------
Support steel (lot) 1
----------------------------------------- ---------------
Platforms and ladders 2
----------------------------------------- ---------------
ENGINE SYSTEMS
----------------------------------------- ---------------
Oil mist detector 2
----------------------------------------- ---------------
AC Generator 2
----------------------------------------- ---------------
COMPRESSED AIR SYSTEM
----------------------------------------- ---------------
Motor driven compressor 2
----------------------------------------- ---------------
Starting Air Receiver 2
----------------------------------------- ---------------
Strainer assemblies 2
----------------------------------------- ---------------
Filter/drier assembly 2
----------------------------------------- ---------------
LUBE OIL SYSTEM
----------------------------------------- ---------------
Lube oil filter cooler module 2
----------------------------------------- ---------------
Fill valve assembly 2
----------------------------------------- ---------------
DISTILLATE FUEL OIL SYSTEM
----------------------------------------- ---------------
Diesel transfer pump 2
----------------------------------------- ---------------
-113-
----------------------------------------- ---------------
Flowmeter assembly 2
----------------------------------------- ---------------
Distillate fuel module 2
----------------------------------------- ---------------
Hydraulic system sub module 2
----------------------------------------- ---------------
EXHAUST SYSTEM
----------------------------------------- ---------------
Exhaust Silencer 2
----------------------------------------- ---------------
Exhaust flexibles 4
----------------------------------------- ---------------
Exhaust flexibles 2
----------------------------------------- ---------------
CHARGE AIR SYSTEM
----------------------------------------- ---------------
Charge air filter, site mounted 2
----------------------------------------- ---------------
Charge air silencer 2
----------------------------------------- ---------------
Charge air flexibles 4
----------------------------------------- ---------------
COOLING SYSTEM
----------------------------------------- ---------------
Jacket water thermostat 2
----------------------------------------- ---------------
Secondary cooling water thermostat 2
----------------------------------------- ---------------
Jacket water heating module 2
----------------------------------------- ---------------
Air blast cooler 2
----------------------------------------- ---------------
TOOLS AND SPARES
----------------------------------------- ---------------
Special engine tools 1
----------------------------------------- ---------------
ELECTRICAL
----------------------------------------- ---------------
Medium voltage switchboard 1
----------------------------------------- ---------------
Generator neutral earthing contactor 1
----------------------------------------- ---------------
Generator neutral earthing resistor 2
----------------------------------------- ---------------
MV/LV Auxillary Transformer 2
----------------------------------------- ---------------
LV Engine Auxillary MCC 2
----------------------------------------- ---------------
Station MCC 1
----------------------------------------- ---------------
CONTROL SYSTEMS
----------------------------------------- ---------------
Control Panels 1 Set
----------------------------------------- ---------------
-114-
PART 2
SALVAGE
For the purpose of this Agreement, unless otherwise provided herein that part of
the Facility which is not classified as Reusable in accordance with Part 1 of
this Exhibit 6 shall be Salvage. This is subject to variation at the entire
discretion of Sypps.
-115-
EXHIBIT 7
FACILITY DESIGN PROGRAMME
For the purposes of this Exhibit 7, the Base Date shall be 14 days following
satisfaction of the Suspensive Conditions.
---------- ------------------------------------- ----------------------
DESIGN DESCRIPTION WEEKS AFTER BASE DATE
---------- ------------------------------------- ----------------------
1. Building GA 2
---------- ------------------------------------- ----------------------
2. Engine Foundation Design 2
---------- ------------------------------------- ----------------------
3. Civil Design 2
---------- ------------------------------------- ----------------------
4. Steelwork Design 2
---------- ------------------------------------- ----------------------
5. Fuel Tank Design 2
---------- ------------------------------------- ----------------------
7. Fuel System 2
---------- ------------------------------------- ----------------------
8. Mechanical Design 2
---------- ------------------------------------- ----------------------
9. HV Switchgear Design 6
---------- ------------------------------------- ----------------------
10. Electrical Design 6
---------- ------------------------------------- ----------------------
11. Civil Procurement Package 2
---------- ------------------------------------- ----------------------
12. Mechanical Procurement Package 2
---------- ------------------------------------- ----------------------
13. Electrical Procurement Package 2
---------- ------------------------------------- ----------------------
14. Civil Installation Package 2
---------- ------------------------------------- ----------------------
15. Mechanical Installation Package 2
---------- ------------------------------------- ----------------------
16. Electrical Installation Package 2
---------- ------------------------------------- ----------------------
-116-
EXHIBIT 8
PART 1
GUARANTEED CONTRACTED CAPACITY
For the purposes of this Part 1 of Exhibit 8, the Base Date shall be 14 days
following satisfaction of the Suspensive Conditions.
--------------------------- --------------------------- ----------------------
RELEVANT TARGET COMMERCIAL INSTALLED CAPACITY FOR GUARANTEED CONTRACTED
OPERATIONS DATE (WEEKS COMMISSIONING (MW) CAPACITY AT 95%
AFTER BASE DATE) AVAILABILITY (MW)
--------------------------- --------------------------- ----------------------
8 5.5 5.5
--------------------------- --------------------------- ----------------------
20 11 5.5
--------------------------- --------------------------- ----------------------
-117-
PART 2
FUEL EFFICIENCY RATE
1. FUEL EFFICIENCY RATE
1.1 GUARANTEED FUEL EFFICIENCY RATE
The Guaranteed Fuel Efficiency Rate ("GFE") for the Units at Site shall be
205.3g/kWh delivered to SOMISY for the first year following the last Relevant
Commercial Operations Date.
The conditions for the above guaranteed Efficiency rate are:
i) Average Site ambient conditions in accordance with Part 4 of Exhibit 3.
ii) Gas oil in accordance with Part 2 of Exhibit 9.
iii) Fuel calorific value 42,700 kJ/kg (LHV).
iv) Fuel specific gravity 0.8825 kg/l.
v) SOMISY's demand of between 10 and 11MW utilising only the Units.
vi) Test to be carried out after a running in period in accordance with
BS 5514.
1.2 FUEL EFFICIENCY TESTING PROCEDURES
Within 10 days following each Quarter Day, SOMISY shall ensure that the Operator
carries out a Spot Fuel Efficiency Test in accordance with the following
procedure:
(a) SOMISY and the Operator shall jointly undertake the Spot Fuel
Efficiency Test.
(b) The Spot Fuel Efficiency Test shall be undertaken using gas oil over
a period of 24 hours and SOMISY shall endeavour to provide conditions
as close as possible to those stated in paragraph 1.1 above with
respect to items i and v.
(c) SOMISY shall obtain full analysis of the Fuel during the Spot Fuel
Efficiency Test and this shall be agreed with Sypps.
(d) The Metering Equipment shall be read jointly by the Parties before
and after the Spot Fuel Efficiency Test.
-118-
(e) The Spot Fuel Efficiency shall be calculated as follows:
SFE = FC/PD x CFf x CFT
Where:
SFE = Spot Fuel Efficiency (g/kWh)
FC = Fuel Consumed in g = FM x SG x 1,000 by the relevant Unit.
Where:
FM = Fuel used measured in cubic metres during the test.
SG = The specific gravity of the Fuel (kg/m^3)
PD = Power Delivered by the relevant Unit in kWh during the test.
CFT = The value of CFT calculated according to the following table:
Ambient temperature ((degrees)C) CFT
10-29 1.007
30 1.007
31 1.006
32 1.005
33 1.004
34 1.003
35 1.002
36 1.001
37 1.000
38 0.999
39 0.998
40 0.997
41 0.996
-119-
42 0.995
43 0.994
44 0.993
45 0.992
46-50 0.992
CFf = Correction factor for fuel calorific value.
Where:
CFf = ACV/42,700
Where:
ACV = Actual Calorific Value of fuel measured LHV kJ/kg
(f) If SOMISY is not able to provide the conditions under paragraph 1.1
or if prevailing conditions differ significantly then SOMISY and
Sypps shall agree any such other factors as may be necessary.
(g) In comparing the Spot Fuel Efficiency with the Guaranteed Fuel
Efficiency a measurement tolerance of +/-5% shall be used.
(h) Part 4 of Exhibit 10 shall be applied.
1.3 GUARANTEED FUEL EFFICIENCY RATE REVISION
On the first Quarter Day following the end of the first year following the last
Relevant Commercial Operations Date, and every fourth Quarter Day thereafter,
the results of the Spot Fuel Efficiency Test carried out pursuant to paragraph
1.2 shall be used to modify the value of GFE as follows:
If GFEn < 0.95 x SFE,
GFEn+1 = 0.95 x SFE
If GFEn > 1.05 x SFE,
GFEn+1 = 1.05 x SFE
-120-
In all other cases,
GFEn+1 = GFEn
Where:
GFEn = The value of GFE for the year preceding the date of the Quarter
Day just prior to the date of the Spot Fuel Efficiency Test
GFEn+1 = The value of GFE for the year following the date of the Quarter
Day just prior to the date of the Spot Fuel Efficiency Test
-121-
PART 3
LUBE OIL CONSUMPTION RATE
1. LUBE OIL CONSUMPTION RATE
1.1 GUARANTEED LUBE OIL CONSUMPTION RATE
The Guaranteed Lube Oil Consumption Rate ("GLC") for the Units at Site shall be
0.66g/kWh delivered to SOMISY for the first year following the last Relevant
Commercial Operations Date.
The conditions for the above guaranteed consumption rate are:
i) Average Site ambient conditions in accordance with Part 4 of Exhibit 3.
ii) Lube Oil in accordance with Part 4 of Exhibit 9.
iii) Lube Oil specific gravity 0.90 Kg/l.
iv) SOMISY's demand of between 10 and 11MW utilising only the Units.
v) Test to be carried out after a running in period in accordance with BS
5514
1.2 LUBE OIL CONSUMPTION TESTING PROCEDURES
Within 10 days following the first Quarter Day following the end of the first
year following the last Relevant Commercial Operations Date, and every fourth
Quarter Day thereafter, SOMISY shall ensure that the Operator carries out a Spot
Lube Oil Consumption Test in accordance with the following procedure:
(a) SOMISY and the Operator shall jointly undertake a Lube Oil
Consumption Test.
-122-
(b) The Test shall be undertaken over a period of 7 days and SOMISY
shall endeavour to provide conditions as close as possible to
those stated in paragraph 1.1 above with respect to items i and
iv.
(c) SOMISY shall obtain full analysis of the lube oil during the Part
3.
(d) The Electrical Metering Equipment shall be read jointly by the
Parties before and after the Spot Lube Oil Consumption Test.
(e) The Lube Oil Consumption shall be calculated as follows:
SLC = LC/PD
Where:
SLC = Spot Lube Oil Consumption (g/kWh)
LC = Lube Oil Consumed in g = LM x SG x 1,000 by the relevant Unit.
Where:
LM = Lube Oil used measured in cubic metres during the test
SG = The specific gravity of the Lube Oil kg/m^3
PD = Power Delivered by the relevant Unit in kWh during the test.
(f) If SOMISY is not able to provide the conditions under paragraph
1.1 or if prevailing conditions differ significantly then SOMISY
and Sypps shall agree any such other factors as may be necessary.
(g) In comparing the Spot Lube Oil Consumption with the Guaranteed
Lube Oil Consumption a measurement tolerance of +/- 10% shall be
used.
-123-
(h) Part 4 of Exhibit 10 shall be applied.
1.3 GUARANTEED LUBE OIL CONSUMPTION REVISION
On the first Quarter Day following the end of the first year following the last
Relevant Commercial Operations Date, and every fourth Quarter Day thereafter,
the results of the Spot Lube Oil Consumption Test carried out pursuant to
paragraph 1.2 shall be used to modify the value of GLC as follows:
If GLCn < 0.90 x SLC,
GLCn+1 = 0.90 x SLC
If GLCn > 1.10 x SLC,
GLCn+1 = 1.10 x SLC
In all other cases,
GLCn+1 = GLCn
Where:
GLCn = The value of GLC for the year preceding the date of the Quarter
Day just prior to the date of the Spot Lube Oil Efficiency Test
GLCn+1 = The value of GLC for the year following the date of the Quarter
Day just prior to the date of the Spot Lube Oil Efficiency Test
-124-
EXHIBIT 9
PART 1
COMPLETION TESTS
In order for each of the Units to be tested to prove its ability to contribute
to providing the Guaranteed Contracted Capacity at 37 (degrees) C at Site,
SOMISY shall provide sufficient load from the Mine to use the power produced by
the Units that have already undergone Completion Tests as well as the additional
power produced by the Unit being tested. In the event that the load available is
not enough, the Units shall be configured in such a way as to allow the Unit
being tested to be tested as close as possible to an output of 5.5MW.
The Completion Test of each Unit shall consist of a reliability run to
demonstrate the ability of the Unit to generate power for 48 hours, 24 hours of
which shall be consecutive, provided the Mine load is suitable for such a
consecutive period. The requirement of a Unit to generate electricity for 24
hours consecutively will fall away as a condition precedent to pass the
Completion Test should the Mine not be able to provide continuous load for that
period.
Before the Completion Test starts, appropriate tests and checks shall be
conducted on the Facility related to each Unit, including:-
- tests relevant to civil construction work including checks on setting
out, material tests, concrete tests, alignment checks on structures,
proof testing of overhead crane and the like;
- hydrostatic tests on all pipework, tanks and pressure vessels;
- alignment checks on all equipment;
- loop checks, insulation resistance, high voltage and other routine
tests on cables and electrical equipment prior to energising;
- all equipment shall be subject to functional tests to demonstrate
correct working and readiness for service;
-125-
- electrical protection relays shall be subject to injection tests to
verify settings in accordance with an agreed settings schedule; and
- the Unit shall be subjected to tests to demonstrate the correct working
of all controls and protection to ensure that the generating set and
associated auxiliaries and common equipment are properly protected and
ready for service.
-126-
PART 2
FUEL SPECIFICATION
GASOIL (GO) SPECIFICATION
------------------------ ---------------- ------------------ ---------------------------- --------------- ----------------
CHARACTERISTIC UNIT VALUES METHOD FREQUENCY OF
TEST
------------------------ ---------------- ------------------ ---------------------------- --------------- ----------------
MIN MAX AFNOR ASTM OTHER
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Mass/Vol at
15 (degrees) C Kg/l 0.82 0.88 T60 101 D 1298 Each delivery
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Kinematic Viscosity at Cst 1.6 5.9 T60 100 D445 Each delivery
37.8 (degrees) C
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Copper corrosion index 1b M07 015 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇▇) ▇ ▇ ▇▇▇ ▇▇▇ If required
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Sulphur % by mass 1.0 M07 025 D1552 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Ash % by mass 0.01 M07 045 D482 EN7 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Flash Point (degrees) C 61 M07 019 D93 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Water % vol 0.05 T60 113 D95 Each delivery
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Sediment % by mass 0.01 M07 010 IP53 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Total acidity mgKoh/g 1.0 T60112 D974 Each delivery
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Carbon Aromacity index 825 T60 116 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Sodium mg/kg 0 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Aluminium + mg/kg 10 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
Vanadium mg/kg 0 Quarterly
------------------------ ---------------- ------- ---------- -------------- ------------- --------------- ----------------
-127-
PART 3
WATER SPECIFICATION
--------------------------------------- ---------------------- ------------------ ---------
TEST UNITS SPECIFICATION LIMIT
--------------------------------------- ---------------------- ------------------ ---------
Turbidity 15 Max
--------------------------------------- ---------------------- ------------------ ---------
pH value 7.3-10 Both
--------------------------------------- ---------------------- ------------------ ---------
Conductivity @ 25 (degrees) C Micro ohm/cm 600 Max
--------------------------------------- ---------------------- ------------------ ---------
Total hardness mg/l as CaCO3 200 Max
--------------------------------------- ---------------------- ------------------ ---------
Calcium (Ca) mg/l 2 Max
--------------------------------------- ---------------------- ------------------ ---------
Magnesium (Mg) mg/l 2 Max
--------------------------------------- ---------------------- ------------------ ---------
Iron (Fe) mg/l 5 Max
--------------------------------------- ---------------------- ------------------ ---------
Chloride (CI-) mg/l 200 Max
--------------------------------------- ---------------------- ------------------ ---------
Sulphate (SO4-) mg/l 100 Max
--------------------------------------- ---------------------- ------------------ ---------
Silica (SiO2) mg/l 100 Max
--------------------------------------- ---------------------- ------------------ ---------
Ammonium (NH4+) mg/l 10 Max
--------------------------------------- ---------------------- ------------------ ---------
Hydrogen Sulphide (H2S) mg/l 10 Max
--------------------------------------- ---------------------- ------------------ ---------
Total residual on evaporation mg/l 800 Max
--------------------------------------- ---------------------- ------------------ ---------
-128-
PART 4
LUBE OIL SPECIFICATION
The lubrication oil shall conform to the following minimum standards:
o lubrication oil grade SAE40 viscosity
o must meet the minimum performance of API CD
o for fuel oil with less than l% sulphur, the TBN requirement is 15-20
o minimum TBN retention of 10
For fuel oil containing more than 1% sulphur, the engine manufacturer has to be
contacted to recommed locally available alternative lubrication oils.
The recommended Mobil lubrication oil is Mobilguard 430.
-129-
EXHIBIT 10
PART 1
PLANT PAYMENT
PPn = PPo x AFn x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1.025y
Where:
PPn = The applicable Plant Payment for the relevant month n.
PPo = US$162,000
CPIn = The value determined for the month three months prior to
month n.
CPIo = The base value used for the indexation calculation determined,
which shall be the value of the CPI for the month three months
prior to the date of this Agreement.
y = Number of years (to the nearest whole number) from the date of
this Agreement to the date of the calculation.
AFn = Adjustment factor according to values below:
AF0 = 0.50
AF1 = 1.45
AF2 = 1.40
AF3 = 1.35
AF4 = 1.30
AF5 = 1.25
AF6 = 1.20
AF7 = 1.05
-130-
AF8 = 0.80
AF9 = 0.50
AF10 = 0.683
AF1 - 10 shall apply in the relevant year of the Term.
AF0 shall apply up to the occurrence of the last Relevant Commercial Operations
Date in time.
If the first and last month are partial months only then a pro rata calculation
of the Fixed Payment shall be made as below:
PPn(pr) = PPn x (Mr/Mt)
Where
PPn(pr) = The applicable pro-rata Fixed Payment for the relevant month
Mr = The number of days of operation since the Relevant Commercial
Operations Date to the end of the month or from the beginning of
the month to the end of the Term.
Mt = The total number of days in the relevant month.
-131-
PART 2
BOP PAYMENT
BOPPn = BOPPo x U x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1 .025y
Where:
BOPPn = The applicable BOP Payment for the relevant month n.
BOPPo = US$25,000
CPIn = The value determined for the month three months prior to
Month n.
CPIo = The base value used for the indexation calculation determined,
which shall be the value of the CPI for the month three months
prior to the date of this Agreement.
U = 0.5 when the first Relevant Commercial Operations Date is
reached and
= 1.0 when the last Relevant Commercial Operations Date is
reached.
y = Number of years (to the nearest whole number) from the date of
this Agreement to the date of the calculation.
If the first and last month are partial months only then a pro rata calculation
of the Fixed Payment shall be made as below:
BOPPn(pr) = BOPPn x (Mr/Mt)
Where:
BOPPn(pr) = The applicable pro-rata Fixed Payment for the relevant month.
-132-
Mr = The number of days of operation since the Relevant Commercial
Operations Date to the end of the month or from the beginning of
the month to the end of the Term.
Mt = The total number of days in the relevant month.
-133-
PART 3
SPARE PARTS PAYMENT
SOMISY shall pay Sypps a Spare Parts Payment each month in arrears. It shall be
payable from the end of the first month following the Relevant Commercial
Operations Date. It shall be escalated each three months in accordance with the
Consumer Price Index ("CPI") in accordance with the following formula:
SPARE PARTS PAYMENT
SPPn = SPn x PD x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1 .025y
Where:
SPPn = Spare Parts Payment for the relevant month n.
PD = The Power Delivered by the Units to SOMISY (measured in kilowatt
Hours kWh);
SPn = US$0.0060/kWh
CPIn = The value determined for the month three months prior to month n
CPIo = The base value used for indexation calculation determined, which
shall be the value of CPI for the month three months prior to the
date of this Agreement.
y = Number of years (to the nearest whole number) from the date of
this Agreement to the date of the calculation.
-134-
PART 4
PAYMENT ADJUSTMENTS
1. Availability Adjustment Payment for Guaranteed Contracted Capacity at
95% of Availability
Sypps shall pay SOMISY liquidated damages at the end of each
Agreement Year for the shortfall in Availability of the Guaranteed
Contracted Capacity pursuant to Section 10.
Shortfall Event shall mean a period during which Sypps is unable to
provide SOMISY with the Guaranteed Contracted Capacity and shall
occur when either:
(a) there is an interruption to the power supply due to the failure of
the Units to operate at the Guaranteed Contracted Capacity; or
(b) the Operator instructs SOMISY to load shed due to unavailability of
Guaranteed Contracted Capacity.
A Shortfall Event shall mean a period during which the Units are
unable to provide the Guaranteed Contracted Capacity and shall occur
when either:
(i) there is an interruption to the power supply due to the failure of
the Units to operate at the Guaranteed Contracted Capacity; or
(ii) Sypps instructs SOMISY to load shed due to unavailability of
Guaranteed Contracted Capacity.
SOMISY shall notify Sypps of the start of the Shortfall Event. The shortfall in
Availability shall be calculated in accordance with the following formula:
---m 100
Where: SFn = \ (SFDy) x ------------ - AUA
/ 5.5 x (8760)
---y=1
SFn = Shortfall in % Availability in any Year n, expressed as a %.
-135-
SFDy = Shortfall in available electrical capacity in an hour measured in
MW which shall be the difference between the Guaranteed
Contracted Capacity of the Units and the actual average capacity
of the Units available to SOMISY in such hour.
m = The number of hours in the period n in which a Shortfall Event
occurs less the period (in hours) of outages due to the
occurrence of an Insurable or Non-Insurable Event except to the
extent that Section 14.4.1 applies.
AUA = is the agreed proportion of a contract year during which the
Parties agree that Sypps is excused from its obligation to make
capacity available (whether such unavailability be due to
maintenance outage or a forced outage). AUA shall equal 5%.
The liquidated damages payable shall be calculated in accordance with the
following formula:
TLDn = LD x SFn x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1 .025y
Where:
TLDn = Total liquidated damages payable in year n.
LD = US$16,800 per %.
CPIn = The value determined for the month three months prior to year n.
CPIo = The base value used for indexation calculation determined, which
shall be the value of CPI for the month three months prior to the
date of this Agreement.
-136-
y = Number of years (to the nearest whole number) from the date of
this Agreement to the date of the calculation.
2. Limit of Liability to pay Liquidated Damages for Availability
-------------------------------------------------------------
In no case, shall TLDn be greater than US$255,000 per year.
3. Fuel Efficiency Adjustment Payment
-----------------------------------
From the Relevant Commercial Operations the Fuel Efficiency
Adjustment Payment in respect of Fuel consumption by the Units shall
be calculated as follows:
FEAPn = 0.5 x FEDn x PDn x FC/106
Where:
FEAPn = Fuel Efficiency Adjustment Payment for the relevant three month
period n
IF GFE < 0.95 x SFE,
FEDn = GFE - (0.95 x SFE)
If GFE > 1.05 x SFE,
FEDn = GFE - (1.05 x SFE)
In all other cases,
FEDn = 0
-137-
PDn = Power delivered by the Units in kilowatt hours in the three
month period n
FC = $200 per tonne
If FEAPn is negative, Sypps shall pay SOMISY FEAPn. If FEAPn is positive, SOMISY
shall pay Sypps FEAPn
4. Limit of Liability to pay Liquidated Damages for Fuel Efficiency
----------------------------------------------------------------
In no case, shall FEAPn be greater than US$255,000 per year.
5. Lube Oil Consumption Adjustment Payment
---------------------------------------
From the Relevant Commercial Operations the Lube Oil Consumption
Adjustment Payment in respect of lube oil consumption by the Units
shall be calculated as follows:
LOAPn = 0.5 x LCDn x PDn x LC/106
Where:
LOAPn = Lube Oil Consumption Adjustment Payment for the relevant three
month period n
If GLC < 0.90 x SLC,
LCDn = GLC - (0.90 x SLC)
If GLC > 1.10 x SLC,
LCDn = GLC - (1.10 x SLC)
-138-
In all other cases,
LCDn = 0
PDn = Power delivered by the Units in kilowatt hours in the three
month period n
LC = $1000.00 per tonne
If LOAPn is negative, Sypps shall pay SOMISY LOAPn. If LOAPn is
positive, SOMISY shall pay Sypps LOAPn.
6. Limit of Liability to pay Liquidated Damages for Lube Oil Consumption
---------------------------------------------------------------------
In no case, shall LOAPn be greater than US$54,000 per year.
7. Limit of Liability to pay Liquidated Damages for Availability, Fuel
Efficiency and Lube Oil Consumption
-------------------------------------------------------------------
In no case, shall the sum of TLDn plus FEAPn plus LOAPn be greater
than US$340,000 per year.
-139-
PART 5
EXISTING FACILITY PAYMENT
1. On receipt of an invoice from Sypps for an amount equal to 1/120 of
the Consideration in accordance with Section 12.1.3, SOMISY shall
reduce the EF Debt by the EF Debt Repayment.
-140-
PART 6
FIXED SPARE PARTS PAYMENT
SOMISY shall pay Sypps a Fixed Spare Parts Payment each month in arrears. It
shall be payable from the end of the first month following the Relevant
Commercial Operations Date. It shall be escalated each three months in
accordance with the Consumer Price Index ("CPI") in accordance with the
following formula:
FIXED SPARE PARTS PAYMENT
FSPn = FSPo x U x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1.025y
Where:
FSPn = The Fixed Spare Parts Payment for the relevant month n.
FSPo = US$19,830
CPIn = The value determined for the month three months prior to
month n.
CPIo = The base value used for the indexation calculation determined,
which shall be the value of the CPI for the month three months
prior to the date of this Agreement.
U = 0.5 when the first Relevant Commercial Operations Date is
reached and
= 1.0 when the last Relevant Commercial Operations Date is
reached.
y = Number of years (to the nearest whole number) from the date of
this Agreement to the date of the calculation
-141-
If the first and last month are partial months only then a pro-rata calculation
of the Fixed Spare Parts Payment shall be made as below:
FSPn(pr) = FSPn x (Mr/Mt)
Where:
FSPn(pr) = The applicable pro-rata Fixed Spare Parts Payment for the
relevant month.
Mr = The number of days of operation since the Relevant Commercial
Operations Date to the end of the month or from the beginning of
the month to the end of the Term.
Mt = The total number of days in the relevant month.
-142-
PART 7
PAYMENT MECHANISM
SAMPLE ONLY
On Sypps printed invoice paper
TAX INVOICE
Date: 05.04.02 Invoice number: 25
SOMISY
Randgold House
Bamako
Mali
----------------------------- ------------------------ ---------------------
DATE kWh
----------------------------- ------------------------ ---------------------
Last reading 01.03.02 1,000,000
----------------------------- ------------------------ ---------------------
This reading 08.04.02 11,000,000
----------------------------- ------------------------ ---------------------
Total for this period 10,000,000
----------------------------- ------------------------ ---------------------
----------- ------------------------------- ---------- -------- ----------------
ITEM DESCRIPTION TOTAL IN US$
----------- ------------------------------- ---------- -------- ----------------
1 Plant Payment 249,480
----------- ------------------------------- ---------- -------- ----------------
2 BOP Payment 27,500.00
----------- ------------------------------- ---------- -------- ----------------
3 Fixed Spare Parts Payment 21,813.00
----------- ------------------------------- ---------- -------- ----------------
4 Spare Parts Payment 66,000.00
----------- ------------------------------- ---------- -------- ----------------
5 Existing Facility Payment 10,000.00
----------- ------------------------------- ---------- -------- ----------------
6 Payment adjustment for quarter 8,080.50
ending 30 September 2000
----------- ------------------------------- ---------- -------- ----------------
7 VAT 0% 0
----------- ------------------------------- ---------- -------- ----------------
8 Total for this invoice 382,873.50
----------- ------------------------------- ---------- -------- ----------------
-143-
----------- ------------------------------- ---------- -------- ----------------
9 Less EF Debt Repayment -10,000
----------- ------------------------------- ---------- -------- ----------------
10 TOTAL PAYMENT DUE 372,873.50
----------- ------------------------------- ---------- -------- ----------------
SAMPLE CALCULATIONS
Agreement executed 01.09.99
Date of calculation 08.04.02 (therefore y = 2)
CPIo (01.06.99) = 100
CPIn (01.01.02) = 110
CPIn/CPIo = 110/100
= 1.10 (which is larger than 1.025^2 therefore
use 1.10)
Last Relevant Commercial
Operations Date = 30.07.00
AFn = 1.40
PD = 10,000,000 kWh
SFE = 192.95g/kWh
kWh in Quarter = 3,500,000 kWh
PLANT PAYMENT
PPn = PPo x AFn x CPIn/CPIo
= 162,000 x 1.40 x 1.10
= US$249,480
-144-
BOP PAYMENT
BOPPn = BOPPo x CPIn/CPIo
= 25,000 x 1.10
= US$27,500.00
SPARE PARTS PAYMENT
SPPn = SPPo x PD x CPIn/CPIo
= 0.60/100 x 10,000,000 x 1.10
= US$66,000
PAYMENT ADJUSTMENTS
AVAILABILITY
Not calculated for this month.
FUEL EFFICIENCY
SFE = 192.95g/kWh
FEDn = 205.3 - (1.05 x 192.95)
= 2.7
FEAPn = 0.5 x FEDn x PDn x FC/106
= 0.5 x 2.7 x 3,500,000 x 200/106
= US$9,450.00
-145-
LUBE OIL CONSUMPTION
Not calculated this month
TOTAL PAYMENT ADJUSTMENT = - 1,369.50 + 9,450.00
= US$8,080.50
FIXED SPARE PARTS PAYMENT
FSPn = FSPo x CPIn/CPIo
= 19,830 x 1.10
= US$21,813.00
EXISTING FACILITY PAYMENT
EFP = US$10,000.00
-146-
PART 8
TABLE OF TERMINATION PRICES WHERE SOMISY DEFAULT OR WHERE SOMISY
ACCELERATES PAYMENT IN ACCORDANCE WITH SECTION 15.3
TERMINATION DATE (FROM US$ (000s)
RELEVANT COMMERCIAL OPERATIONS DATE)
Start of year 1 14,120
End of year 1 11,985
End of year 2 10,911
End of year 3 9,728
End of year 4 8,419
End of year 5 6,960
End of year 6 5,314
End of year 7 3,664
End of year 8 1,934
End of year 9 1,426
End of year 10 0
The above amounts shall be adjusted in accordance with the following formula:
The above amounts shall be adjusted in accordance with the following formula:
TTPn = TP x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1.025y
Where
TTPn = Total Termination Price payable in year n.
TP = Termination Price from relevant year as per table above.
-147-
CPIn = The value determined for the month three months to year n.
CPIo = The base value used for indexation calculation determined, which
shall be the value of CPI for the month three months prior to
the date of this Agreement.
y = Number of years (to the nearest whole number) from the date of
this Agreement.
-148-
PART 9
TABLE OF TERMINATION PRICES WHERE SYPPS DEFAULT
TERMINATION DATE (FROM RELEVANT COMMERCIAL US$ (000s)
OPERATIONS DATE)
Start of year 1 10,499
End of year 1 9,737
End of year 2 8,808
End of year 3 7,765
End of year 4 6,636
End of year 5 5,395
End of year 6 4,020
End of year 7 2,654
End of year 8 1,206
End of year 9 778
End of year 10 0
The above amounts shall be adjusted in accordance with the following formula:
The above amounts shall be adjusted in accordance with the following formula:
TTPn = TP x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1.025y
Where
TTPn = Total Termination Price payable in year n.
TP = Termination Price from relevant year as per table above.
CPIn = The value determined for the month three months to year n.
-149-
CPIo = The base value used for indexation calculation determined, which
shall be the value of CPI for the month three months prior to
the date of this Agreement.
y = Number of years (to the nearest whole number) from the date of
this Agreement.
-150-
PART 10
TABLE OF TERMINATION PRICES WHERE NO DEFAULT
TERMINATION DATE (FROM RELEVANT COMMERCIAL US$ (000s)
OPERATIONS DATE)
Start of year 1 12,390
End of year 1 11,364
End of year 2 10,145
End of year 3 8,857
End of year 4 7,481
End of year 5 6,013
End of year 6 4,434
End of year 7 2,910
End of year 8 1,337
End of year 9 1,099
End of year 10 0
The above amounts shall be adjusted in accordance with the following formula:
The above amounts shall be adjusted in accordance with the following formula:
TTPn = TP x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1.025y
Where
TTPn = Total Termination Price payable in year n.
TP = Termination Price from relevant year as per table above.
CPIn = The value determined for the month three months to year n.
-151-
CPIo = The base value used for indexation calculation
determined, which shall be the value of CPI for the month
three months prior to the date of this Agreement.
y = Number of years (to the nearest whole number) from the date
of this Agreement.
-152-
PART 11
CTF TERMINATION PRICE
TERMINATION DATE (FROM RELEVANT COMMERCIAL US$ (000s)
OPERATIONS DATE)
Start of year 1 2,950
End of year 1 2,770
End of year 2 2,555
End of year 3 2,300
End of year 4 2,000
End of year 5 1,630
End of year 6 1,200
End of year 7 782
End of year 8 485
End of year 9 365
End of year 10 0
The above amounts shall be adjusted in accordance with the following formula:
TTPn = TP x (CPIn/CPIo)
Provided always that (CPIn/CPIo) shall not be less than 1.025y
Where
TTPn = Total Termination Price payable in year n.
TP = Termination Price from relevant year as per table above.
CPIn = The value determined for the month three months to year n.
CPIo = The base value used for indexation calculation determined,
which shall be the value of CPI for the month three months
prior to the date of this Agreement.
-153-
y = Number of years (to the nearest whole number) from the date of
this Agreement.
-154-
EXHIBIT 11
NOTICES
The address for the delivery of notices and other communications to each Party
and the respective telephone and facsimile numbers are as follows:
(a) For Sypps:
▇▇▇▇ ▇▇▇▇▇
Rolls-Royce Power Ventures Limited
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
(b) For SOMISY:
Managing Director
SOCIETE DES MINES DE SYAMA S.A
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
-155-
EXHIBIT 12
KEY MILESTONES AND KEY MILESTONE DATES
For the purposes of this Exhibit 12, the Base Date shall be 14 days following
satisfaction of the Suspensive Conditions.
--------------------------------- -------------------------------
KEY MILESTONE KEY MILESTONE DATE (WEEKS
AFTER BASE DATE)
BALANCE OF PLANT
--------------------------------- -------------------------------
Unit 1 installation complete* 4
-------------------------------- -------------------------------
Unit 2 installation complete* 16
--------------------------------- -------------------------------
*installation complete means the date on which Sypps is satisfied that the
following was achieved:
FOR THE RELEVANT PLANT OR BALANCE OF PLANT ASSOCIATED WITH THE CORRESPONDING KEY
MILESTONE:
- the relevant Plant or Balance of Plant shall be placed, aligned,
levelled, secured and grouted in position;
- the relevant Plant or Balance of Plant shall be reassembled where
appropriate;
- the relevant Plant or Balance of Plant shall be lubricated/greased;
- the relevant Plant or Balance of Plant movement checks shall be
carried out under No-Load Conditions.
FOR THE PIPING/DUCTING ASSOCIATED WITH THE CORRESPONDING KEY MILESTONE:
- the pipework shall be installed, connected, secured & earth linked
where applicable;
-156-
- the pipework shall be cleaned (by pickling/flushing as appropriate)
to required level;
- the pipework shall be pressure tested as appropriate;
- the pipework shall be lagged as appropriate.
FOR THE CABLING ASSOCIATED WITH THE CORRESPONDING KEY MILESTONE:
- the cabling shall be installed and terminated;
- Continuity shall be checked.
FOR THE TANKS ASSOCIATED WITH THE CORRESPONDING KEY MILESTONE:
- the tanks shall be fabricated, placed, secured and grouted in
position;
- the tanks shall be pressure tested;
- the tanks shall be painted/lagged as appropriate.
FOR THE MISCELLANEOUS ITEMS ASSOCIATED WITH THE CORRESPONDING KEY MILESTONE:
- all floorplating shall be in place;
- the alternator shall be dried out;
- all guarding shall be installed.
FOR THE STATION COMMON SYSTEMS/SERVICES ASSOCIATED WITH THE RELEVANT KEY
MILESTONE:
- the earthing system shall be proven;
- the water supply and inhibitors/antifreeze shall be available;
- the lubricating oil shall be available and engine sumps filled;
-157-
- the lubricating greases shall be available;
- the Fuel shall be available and transfer pumps operational;
- the commissioning labour shall be available;
- the ventilation systems shall be in operation.
-158-
EXHIBIT 13
FIXED DEFAULT AMOUNT
The Fixed Default Amount shall include actual proven costs in respect of design,
development, and equipment cancellation plus the value of equipment notified to
SOMISY by Sypps as being ready for collection ex works in accordance with
Section 4.2.
-159-
EXHBIT 14
DIRECT AGREEMENT IN RELATION TO THE SYAMA MINING PROJECT
THIS DIRECT AGREEMENT (this "Agreement") is made on 2000
BETWEEN:
(1) Societe des Mines de Syama S.A. ("SOMISY");
(2) Rolls-Royce Power Ventures Limited ("Sypps") and
(3) International Finance Corporation (the "Lender")
WHEREAS:
(A) SOMISY has entered into the Deferred Terms Agreement with Sypps for
the purposes of acquiring on deferred terms generating and other
equipment in connection with the Mining Project.
(B) The Lender has provided finance for the Mining Project upon the terms
and subject to the conditions set out in the Loan Agreement.
(C) Sypps has agreed to enter into this Agreement in order to provide
certain assurances to the Lender in connection with the Deferred
Terms Agreement.
IT IS AGREED as follows:-
In this Agreement, unless the context otherwise requires:
"AGREEMENT" is defined in the preamble;
"DEFERRED TERMS AGREEMENT" means the agreement, dated [ ] 2000 made
between SOMISY and Sypps in connection with the Mining Project;
"LENDER ASSUMING PARTY" has the meaning provided in Section 4.1(b);
-160-
"LOAN AGREEMENT" means the second investment agreement, dated June 2, 1998
between SOMISY and the Lender;
"MINING PROJECT" means the Syama or gold mining project at Syama, Republic of
Mali;
"SECURITY AGREEMENTS" means, inter alia, (1) Contrat de Nantissement de Fonds de
Commerce dated June 2, 1998 between SOMISY and the Lender, and (2) Contrat de
Substitution dated June 2, 1998 between SOMISY and the Lender;
"STEP-IN DATE" means the date specified in the Step-in the Notice as the date
for assumption of obligations of SOMISY under the Deferred Terms Agreement;
"STEP-IN NOTICE" means a written notice served by the Lender on Sypps pursuant
to Section 4.1;
"STEP-IN PERIOD" means the period from (and including) the Step-in Date to (and
excluding) the Step-out Date;
"STEP-OUT DATE" has the meaning provided in Section 4.5;
"SUBSTITUTE ENTITY" means the person appointed by the Lender for the purposes of
assuming the rights and obligations of SOMISY under the Deferred Terms
Agreement;
"SUSPENSION PERIOD" has the meaning provided in Section 4.1;
"TERMINATION ACTION" has the meaning provided in sub-section (a) of Section 3.1;
"TERMINATION NOTICE" means a written notice served by Sypps on the Lender
pursuant to sub-section (b) of Section 3.1.
2.1 CONSENT TO SECURITY
Sypps hereby:
(a) acknowledges that this Agreement shall constitute notice in
writing to it of the security created or to be created by the
Security Agreements (including the assignment thereunder) in
favour of the Lender over the right, benefit and interest of
SOMISY under the Deferred Terms Agreement;
-161-
(b) consents for purposes of the Deferred Terms Agreement to the
creation and subsistence of such security and the exercise by
the Lender of all its rights and remedies with respect to such
security; and
(c) without in any way limiting the consent in paragraph (b),
further consents to the assignment by SOMISY to the Lender of
its rights and interest in the Deferred Terms Agreement.
2.2 NO LIABILITY
Sypps agrees and acknowledges that, notwithstanding anything to the
contrary contained in this Agreement, SOMISY will remain liable to
observe and perform all of SOMISY's obligations under the Deferred
Terms Agreement and, the Lender shall have no obligation or liability
with respect to those obligations by any reason of or arising out of
this Agreement and the Lender will not be required in any manner to
perform or fulfil any obligations of SOMISY under the Deferred Terms
Agreement, or to make any payment under the Deferred Terms Agreement
unless and until the Lender notifies Sypps in writing in accordance
with Section 4.1 of the Lender's intention to assume obligations
imposed on SOMISY under the Deferred Terms Agreement.
2.3 TERMINATION OF DEFERRED TERMS AGREEMENT
Each of SOMISY and Sypps acknowledges and agrees that no termination
by SOMISY under the Deferred Terms Agreement shall be valid or
effective without the prior written consent of the Lender having
first been produced by SOMISY to Sypps.
3.1 NOTICE OF TERMINATION
Sypps undertakes to the Lender that:
(a) in relation to an event governed by Section 16.7 of the
Deferred Terms Agreement it will not exercise or seek any right
of termination of, or
-162-
discontinue the performance of any of its obligations under,
the Deferred Terms Agreement (any such action being referred to
as "Termination Action"), without first copying to the Lender
any notice to SOMISY under that Section of the Deferred Terms
Agreement which notice shall be delivered to the Lender no
later than simultaneously with the notice to SOMISY under
Section 16.7 of the Deferred Terms Agreement; or
(b) in respect to an event governed by Section 16.4 of the Deferred
Terms Agreement for a period of thirty days following receipt
by the Lender of a Termination Notice by Sypps that a
Termination Event under that Section 16.4 has occurred, it will
not take any Termination Action.
3.2 AMENDMENTS TO THE DEFERRED TERMS AGREEMENT
Sypps will not amend or agree with SOMISY any amendments to any of
the terms of the Deferred Terms Agreement without the prior written
consent of the Lender such consent not to be unreasonably withheld .
3.3 ASSIGNMENT OF THE DEFERRED TERMS AGREEMENT
Sypps will not assign, transfer or otherwise dispose of any of its
rights or obligations under the Deferred Terms Agreement without
obtaining the prior written consent of the Lender other than for the
purposes of raising financing for the Facility as defined by the
Deferred Terms Agreement and provided always that nothing shall
prevent Sypps from sub-contracting its obligations under that
agreement or from assigning its rights or obligations to an Affiliate
as defined by that Agreement in accordance with Section 18.1 of the
Deferred Terms Agreement.
3.4 PAYMENTS TO SOMISY
Provided that the same shall not increase the liability of Sypps to
tax in any jurisdiction Sypps undertakes to pay to such account at
such bank as the Lender may from time to time notify to it all moneys
due and payable by it to SOMISY under or in connection with the
Deferred Terms Agreement.
-163-
3.5 INFORMATION
Sypps shall provide the Lender with the following information, either
promptly upon the occurrence of the event in question or promptly
following a request for such information from the Lender:
(a) details of any breach by SOMISY of any terms of the Deferred
Terms Agreement;
(b) notice of, and details of the occurrence of any event or
circumstance that makes or is likely to make it impossible for
Sypps to perform any of its obligations under the Deferred
Terms Agreement in accordance with its terms.
4.1 EXERCISE OF STEP-IN RIGHTS
At any time during the period under Section 16.7 of the Deferred
Terms Agreement for remedying a default by SOMISY or within the
period of 30 days referred to in Section 3.1(b) (collectively or
singularly the Suspension Period) the Lender may give a Step-in
Notice to Sypps:
(a) requiring Sypps to continue to perform its obligations under
the Deferred Terms Agreement;
(b) acknowledging that the Lender or a Substitute Entity appointed
by the Lender in accordance with Section 4.2(a) (the "Lender
Assuming Party") is to become a joint and several obligor with
SOMISY from the date of such Step-in Notice in respect of the
obligations of SOMISY under the Deferred Terms Agreement; and
(c) undertaking to Sypps or, as the case may be, notifying Sypps of
the undertaking of the Lender Assuming Party, to discharge all
payments then due to Sypps under the terms of the Deferred
Terms Agreement within thirty (30) days.
-164-
4.2 OPERATION OF STEP-IN RIGHTS
Instead of the Lender being the joint and several obligor under
Section 4.1(b) the Lender may request that a Substitute Entity be
appointed, and, provided that Sypps shall be satisfied as to the
financial strength and technical competence of such proposed
Substitute Entity Sypps shall accept such request in writing such
acceptance not to be unreasonably withheld.
During the Step-in Period the Lender or the Lender Assuming Party, as
the case may be, shall enjoy all rights of SOMISY under the Deferred
Terms Agreement and shall be jointly and severally liable with SOMISY
for the performance of all the obligations of SOMISY under the
Deferred Terms Agreement which arise during the Step-in Period and
for payment of any sums which arise before the Step-in Period but, as
between SOMISY and the Lender or the Lender Assuming Party, as the
case may be, the latter alone (to the exclusion of SOMISY) shall have
the authority to deal with Sypps and exercise the powers and
discretions available to SOMISY under the Deferred Terms Agreement
and SOMISY shall not be released, nor shall its liability be affected
or impaired, as a result of the exercise by the Lender or the Lender
Assuming Party, as the case may be, alone of any such authority,
powers or discretions or by any other act or omission on the part of,
or indulgence or release granted to, the Lender or the Lender
Assuming Party, as the case may be, whether or not with the knowledge
or consent of SOMISY.
4.3 TERMINATION ACTION DURING STEP-IN PERIOD
During the Step-in Period any grounds for Sypps to terminate the
Deferred Terms Agreement through the grounds stated in Sections 16.4
or 16.7 of the Deferred Terms Agreement arising before and
outstanding on the Step-in Date, shall be deemed not to have effect
provided that no further grounds for Sypps to terminate the Deferred
Terms Agreement caused by an act or default of the Lender or the
Lender Assuming Party, as the case may be, shall arise during the
Step-in Period.
-165-
4.4 SYPPS OBLIGATIONS DURING STEP-IN PERIOD
During the Step-in Period, Sypps shall owe its obligations,
liabilities and duties with respect to the performance of the
Deferred Terms Agreement to SOMISY and the Lender or the Lender
Assuming Party, as the case may be, jointly but receipt of, or the
performance by Sypps in favour of, either of them shall be a good
discharge.
4.5 STEP-OUT RIGHTS
The Lender or the Lender Assuming Party, as the case may be, on
giving Sypps not less than 30 (thirty) days' prior written notice,
may terminate its obligations, liabilities and duties to Sypps under
this Agreement and the Deferred Terms Agreement (but without
affecting the continuation of SOMISY's obligations towards Sypps
under the Deferred Terms Agreement) and, from the date on which the
Lender's or the Lender Assuming Party's, as the case may be, notice
takes effect (the "Step-out Date"), the Lender or the Lender Assuming
Party, as the case may be, shall be released from all obligations,
liabilities and duties under this Agreement and the Deferred Terms
Agreement towards the Sypps other than those that arose during the
Step-in Period but have not been fully performed.
4.6 ADDITIONAL STEP-IN RIGHTS
Notwithstanding that, as between SOMISY and Sypps, the latter's right
of termination of the Deferred Terms Agreement may not have arisen,
the provisions of Sections 3.1, 4.1 and 4.2 shall nevertheless apply
if the Lender gives notice to Sypps and SOMISY and the Lender or the
Lender Assuming Party, as the case may be, complies with the
requirements on its part under Section 4.1.
5.1 LAW
This Agreement is governed by the law of England and Wales.
5.2 COURTS OF ENGLAND
The courts of England shall have jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement.
-166-
SIGNED by the parties on the date first set forth above.
[SOMISY]
By:
--------------------------------
Name Printed:
----------------------
Title:
-----------------------------
[Sypps]
By:
--------------------------------
Name Printed:
----------------------
Title:
-----------------------------
[IFC]
in its capacity as the Lender
By:
--------------------------------
Name Printed:
----------------------
Title:
-----------------------------
By:
--------------------------------
Name Printed:
----------------------
Title:
-----------------------------
-167-
EXHIBIT 15
SITE
Site layout: drawing no.: ▇▇▇▇▇-▇▇-▇▇▇