EXHIBIT 10.46
POWER PURCHASE AGREEMENT
(INITIALED COPY)
Agreement regarding
Power Purchase Agreement
relating to
734 MW Power Plant in Prachuab ▇▇▇▇ ▇▇▇▇ Province, Kingdom of Thailand between
Electricity Generating Authority of Thailand
and
Gulf Power Generation Company Limited
-----------------------
With regard to the Power Purchase Agreement for the 734 MW coal-fired power
plant to be located in Prachuab ▇▇▇▇ ▇▇▇▇ Province (hereinafter the "Agreement")
which the Electricity Generating Authority of Thailand ("EGAT") and Gulf Power
Generation Company Limited ("GULF") are executing contemporaneously with this
letter (an execution copy of which is attached hereto), EGAT and GULF
(hereinafter referred to as the "Parties") agree as follows:
1. Unless otherwise defined herein, capitalized terms in this letter shall
have the same meaning as in the Agreement.
2. EGAT agrees that on or prior to the date that is the earlier of the
Scheduled Financial Close Date and the date of Financial Close, Section
19.1 of the Agreement and paragraph 4.1 Schedule 2 thereto, shall be
amended, if necessary, so as to extend to GULF terms that are no less
favorable than the terms and conditions associated with comparable
provisions in any other power purchase agreement executed, or subsequently
amended or supplemented by EGAT, as a result of EGAT's Request for
Proposals - 1994 Independent Power Solicitation (the "1994 Solicitation").
Notwithstanding the foregoing, GULF shall not be entitled to any such
amendments pursuant to this provision for terms which are concluded with
any other IPP project as a result of dispute resolution which has yielded a
binding decision by an expert or by arbitration under or in connection with
any power purchase agreement.
3. After the execution of this letter, subject to paragraph 2 hereof, GULF
shall not claim any relief from its obligations under the Agreement on the
basis of Force Majeure or Governmental Force Majeure due to issuance by the
Thailand Ministry of Finance of a notification on 2 July 1997 providing
that the value of the Thai Baht will be set by conditions in the foreign
exchange markets (the "Notification"). Other than amendments to the
Agreement in accordance with paragraph 2 hereof, there shall not be any
revisions to the Agreement with respect to the issuance of the Notification
or the adoption of the managed float of the Thai Baht thereunder.
4. EGAT agrees that, at all times prior to the date which is the earlier of
the Scheduled Financial Close Date and the date of Financial Close, the
terms of this Agreement and Schedules thereto shall be amended, if
necessary, so as to extend to GULF terms (other than terms which are
related to a power project's specific technical characteristics) no less
favorable to GULF than the terms and conditions included in any other Stage
2 power purchase agreement executed, or subsequently amended or
supplemented, by EGAT in connection with the 1994 Solicitation (commonly
referred to as Stage 2 of Round One of EGAT's IPP Program) with respect to:
a. the rights of the Generator or the obligations of EGAT regarding any
compensation to be paid by EGAT as a result of the termination of the
Agreement following a default by EGAT;
b. the list and definitions of Force Majeure and Governmental Force
Majeure;
c. except with regard to the period of time Force Majeure must continue
before EGAT may exercise its termination rights under Section 14.6.2
of the Agreement, the termination rights in respect of, or the nature
or categories of compensation to be paid to a power producer in the
event of, the occurrence and continuation of an event of Force Majeure
or Governmental Force Majeure or the factors or procedures for
determining such compensation; and
d. the method of payment set forth in Section 19.3 of the Agreement.
5. EGAT agrees to extend to GULF material revisions in the manner in which the
application of Schedule 2 is administered with regard to any other power
purchase agreement for coal fired generation that is executed by EGAT as a
result of the 1994 Solicitation, provided such revisions are not related to
power project specific technical characteristics and (i) remedy demonstrated
problems with the administration of Schedule 2 and are of a generic nature
which warrant application to all of the power purchase agreements for coal
fired generation that have been executed by EGAT as a result of the 1994
Solicitation, and (ii) would restrict the application of or limit GULF's
exposure to the DRA, DDF and DSN deductions set forth in Schedule 2 of this
Agreement.
6. The Parties shall confer together in good faith concerning appropriate
accounting and tax treatment for the New Transmission Facilities and
documentation related thereto, including potential amendments to the
Agreement, if applicable.
7. The Parties agree that this letter and the Agreement together contain or
expressly refers to the entire Agreement between the Parties with respect
to the subject matter addressed thereby. Each of the Parties acknowledges
and confirms that it does not enter into this letter or the Agreement in
reliance on, and the Parties expressly waive any rights associated with, any
representation, warranty, commitment, obligation or other undertaking by the
other Parties not expressly reflected in this letter and the Agreement. Any
dispute under or concerning this letter shall be resolved in accordance with
Section 15 of this Agreement, which are incorporated by reference herein.
Acknowledged and agreed as of the date set forth below
On behalf of the On behalf of the
ELECTRICITY GENERATING GULF POWER GENERATION
AUTHORITY OF THAILAND (EGAT) COMPANY LIMITED (GULF)
By: By:
------------------------- --------------------------
(Mr. Viravat Chlayon) (▇▇. ▇▇▇▇▇▇ Ratanavadi)
Governor Director
December 1997 December 1997
Bangkok, Thailand Bangkok, Thailand
By:
--------------------------
(▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇)
Director
December 1997
Bangkok, Thailand
CONTRACT NO. IPP/ 41-107
POWER PURCHASE AGREEMENT
BETWEEN
GULF POWER GENERATION COMPANY LIMITED
AND
ELECTRICITY GENERATING AUTHORITY OF THAILAND
SIGNED ON DECEMBER 22, 1997
CONTENTS
SECTION PAGE
1. DEFINITIONS AND INTERPRETATIONS.................................................... 2
1.1 Definitions.................................................................. 2
1.2 Interpretation............................................................... 12
1.3 Calculation Values........................................................... 13
1.4 Table of Contents and Headings............................................... 13
2. FACILITY DEVELOPMENT AND CONNECTION ARRANGEMENTS................................... 13
2.1 Obligations to Construct..................................................... 13
2.2 Construction and Licensing of the Facility................................... 13
2.3 Independent Engineer and Progress Reports on Construction.................... 14
2.4 Metering..................................................................... 15
2.5 Grid Code Equipment and Communication Requirements........................... 17
2.6 Rights-Of-Way and Easements.................................................. 17
2.7 Provision of Information and Consultation Relating to EGAT
Transmission Facilities...................................................... 18
2.8 Completion of New Transmission Facilities.................................... 18
2.9 Inspection and Energizing of the Connection Point and Facility
Switchyard................................................................... 21
2.10 Synchronizing and Commercial Operation....................................... 22
2.11 Testing...................................................................... 24
2.12 Review by EGAT............................................................... 26
3. PROVISION AND PURCHASE OF AVAILABILITY AND
ELECTRICITY........................................................................ 26
3.1 Obligation to Provide Dependable Contracted Capacity and Contracted
Operating Characteristics.................................................... 26
3.2 Compliance with the Grid Code................................................ 27
3.3 Sale and Purchase of Electricity............................................. 27
3.4 Provision of Standby Service................................................. 28
3.5 Dispatch Instructions........................................................ 28
3.6 Operation and Maintenance (O&M) Reports...................................... 28
4. DELIVERY OF ELECTRICITY............................................................ 28
4.1 Quality of Supply............................................................ 28
4.2 Title and Risk of Loss....................................................... 29
4.3 Failure of the System........................................................ 29
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5. AVAILABILITY PAYMENTS............................................................ 29
5.1 Calculation of Availability Payments....................................... 29
5.2 Confirmation and Payment of Availability Payments.......................... 29
5.3 Notices of Availability and Declared Operating Characteristics............. 29
6. ENERGY PAYMENTS.................................................................. 30
6.1 Entitlement to and Calculation of Energy Payments.......................... 30
6.2 Confirmation and Payment of Energy Payments................................ 30
7. MINIMUM TAKE..................................................................... 30
8. ENVIRONMENTAL QUALITY REQUIREMENTS............................................... 32
9. FUEL SUPPLY...................................................................... 32
9.1 Fuel Supply Obligations.................................................... 32
9.2 Subsequent Fuel Supply Agreements.......................................... 33
9.3 Fuel Stock................................................................. 33
10. CRITICAL DATES AND DURATION OF AGREEMENT......................................... 34
10.1 Initial Term............................................................... 34
10.2 Survival of Rights on Termination.......................................... 34
10.3 Extension of Agreement..................................................... 34
10.4 Critical Dates............................................................. 34
10.5 Extension of Critical Dates and Term....................................... 35
11. CONTRACTED MILESTONES............................................................ 35
12. DEFAULT AND TERMINATION.......................................................... 36
12.1 Termination by the Generator............................................... 36
12.2 Termination by EGAT........................................................ 37
12.3 Step-In Rights............................................................. 39
12.4 Other Rights to Terminate.................................................. 42
13. SECURITIES AND LIQUIDATED DAMAGES................................................ 42
13.1 Establishment of Development Security...................................... 42
13.2 EGAT's Right to Retain Development Security as Liquidated Damages.......... 42
13.3 Liquidated Damages for Contracted Capacity Deficiencies.................... 44
13.4 Payments from the Security................................................. 44
13.5 Additional Security........................................................ 44
13.6 Reasonable Liquidated Damages.............................................. 46
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14. FORCE MAJEURE.................................................................. 46
14.1 Overview................................................................ 46
14.2 Notice of Force Majeure and Consequences................................ 47
14.3 Limitations............................................................. 48
14.4 Payment Rights and Obligations During Force Majeure..................... 48
14.5 Payments During Extension of Term....................................... 51
14.6 Termination............................................................. 52
14.7 Reconstruction.......................................................... 53
15. DISPUTE RESOLUTION............................................................. 54
15.1 Resolution.............................................................. 54
15.2 Arbitration............................................................. 54
16. LIMITATION OF LIABILITY........................................................ 56
16.1 Indemnification......................................................... 56
16.2 Consequential Damages................................................... 57
17. CHANGE-IN-LAW.................................................................. 57
17.1 Tax Change Adjustment................................................... 57
17.2 Change-in-Law Adjustment................................................ 58
17.3 BOI Privileges.......................................................... 60
18. CONFIRMATION STATEMENT......................................................... 60
18.1 Confirmation of Availability and Metered Energy......................... 60
18.2 Access to Information................................................... 60
18.3 Review of Confirmation Statement and Meter Reconciliation Statement..... 60
18.4 Disputes................................................................ 61
18.5 Final Confirmation Statement............................................ 61
18.6 Disputes Limitation..................................................... 61
18.7 Effect of Confirmation Statement........................................ 61
18.8 Energy Payment Adjustments.............................................. 61
18.9 Interference with Metering.............................................. 62
19. BILLING AND PAYMENT............................................................ 62
19.1 Payment Invoice/Credit Note............................................. 62
19.2 Other Payments.......................................................... 63
19.3 Payment Procedure....................................................... 63
19.4 Application of Payments................................................. 63
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19.5 Interest.................................................................. 64
19.6 Disputed Items............................................................ 64
19.7 Taxes and Fines........................................................... 64
19.8 Set-Off................................................................... 65
20. INDEXATION....................................................................... 65
21. CONFIDENTIALITY AND ANNOUNCEMENTS................................................ 66
21.1 General Restrictions on the Parties....................................... 66
21.2 Exceptions................................................................ 66
21.3 Internal Procedures....................................................... 67
21.4 Public Announcements...................................................... 67
22. INSURANCE AND INDEMNITIES........................................................ 67
22.1 Insurance Required........................................................ 67
22.2 Endorsements.............................................................. 68
22.3 Certificates Required..................................................... 68
22.4 Application of Proceeds................................................... 69
23. REPRESENTATIONS AND WARRANTIES................................................... 69
24. EQUITY UNDERTAKING............................................................... 71
24.1 Restrictions on Transferability........................................... 71
24.2 Qualifications to Equity Transfer Restrictions............................ 71
25. MISCELLANEOUS PROVISIONS......................................................... 72
25.1 Amendments................................................................ 72
25.2 Waivers of Rights......................................................... 72
25.3 Notice.................................................................... 72
25.4 Assignment................................................................ 73
25.5 Effect of Illegality...................................................... 74
25.6 Entire Agreement.......................................................... 75
25.7 Counterparts.............................................................. 75
25.8 Currency.................................................................. 75
25.9 Language.................................................................. 75
25.10 Third Parties............................................................. 75
25.11 Inconsistencies and Conflicts............................................. 75
26. GOVERNING LAW AND JURISDICTION................................................... 76
26.1 Governing Law.............................................................. 76
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26.2 Waiver.................................................................... 76
26.3 Arbitration............................................................... 76
27. PRIVATIZATION OF EGAT............................................................ 76
28. PERMISSION UNDER EGAT ACT........................................................ 76
SIGNATURES....................................................................... 77
Page v
THIS AGREEMENT (the AGREEMENT) is made on this 22 day of December, 1997
BETWEEN
(1) GULF POWER GENERATION CO., LTD., incorporated under the laws of Thailand,
represented by ▇▇. ▇▇▇▇▇▇ Ratanavadi, Director and ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Director, with its registered address at 11th Floor, M. Thai Tower 1, All
Seasons Place, 87 Wireless Road, Lumpini, Phatumwan, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ (the GENERATOR); and
(2) ELECTRICITY GENERATING AUTHORITY OF THAILAND, represented by Mr. Viravat
Chlayon, Governor, with its registered address at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Thailand (EGAT).
The Generator and EGAT are also each referred to herein as a PARTY and
collectively as the PARTIES.
WHEREAS:
(A) The Government of Thailand has announced the policy of encouraging and
promoting the development of independent power producers for generating
electricity to meet electricity demands in Thailand.
(B) To advance such Governmental policy, EGAT and the Generator have entered
into this Agreement setting out the terms on which the Generator has agreed
to develop, construct, finance, operate and maintain a 734 MW coal-fired
electricity generating plant at Boh Noak Subdistrict, Kui Buri District,
Prachuab Khiri Khan Province, Thailand to provide electricity to EGAT in
accordance with the terms and conditions of this Agreement.
NOW IT IS HEREBY AGREED as follows:
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1. DEFINITIONS AND INTERPRETATIONS
1.1 DEFINITIONS
Unless otherwise defined herein, capitalized terms used herein shall have
the following meanings, whether used in the singular or in the plural:
ACCESS RIGHTS This term shall have the meaning assigned thereto
in Section 2.6.1;
ACTUAL AVAILABILITY The Availability (in MWh) provided by a Unit during
a Settlement Period or other period as the context
requires, determined in accordance with Schedule 2;
ADDED FACILITY CHARGE This term shall have the meaning assigned thereto
in Section 2.8.16;
AFFILIATE When applied to a Person, any other Person
controlling, controlled by or under common control
with such first-named Person, provided that (i) for
purposes of Section 24, any Person that owns
directly or indirectly securities having fifty
percent (50%) or more of the voting power for the
election of directors or other governing body of a
corporation or fifty percent (50%) or more of the
partnership or other ownership interests of any
other Person (other than as a limited partner of
such Person) will be deemed to control such
corporation or other Person, and (ii) for any
purpose other than Section 24, any Person that owns
directly or indirectly securities having ten
percent (10%) or more of the voting power for the
election of directors or other governing body of a
corporation or ten percent (10%) or more of the
partnership or other ownership interests of any
other Person (other than as a limited partner of
such Person) will be deemed to control such
corporation or other Person;
AGREEMENT This Power Purchase Agreement and the Schedules
hereto;
AVAILABILITY The capability of a Unit (in MWh) to provide
generating capacity and electricity to EGAT,
regardless of the level at which EGAT dispatches
the Unit, and AVAILABLE shall be construed
accordingly;
AVAILABILITY NOTICE A statement in the form set out in Schedule 15
declaring or revising the capability of a Unit to
provide (i) generating capacity up to its
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Dependable Contracted Capacity, and (ii) the
other Contracted Operating Characteristics set
out in Paragraph 2 of Schedule 1;
AVAILABILITY PAYMENT Payment made by EGAT to the Generator for the
Actual Availability provided by the Units as
determined in accordance with Schedule 2;
BACK-UP METERING EQUIPMENT The back-up metering equipment and associated
devices as described in Schedule 13;
BAHT The lawful currency of the Kingdom of Thailand;
BILLING PERIOD The period beginning on the Commercial Operation
Date of the First Unit and ending on the last day
of the month in which that date occurs, each full
month in a Contract Year, and the period
beginning on the first day of the month in which
the Term expires and ending on the day the Term
expires;
BTU British Thermal Units;
BUSINESS DAY Any weekday from Monday through Friday, excluding
in each calendar year (i) not more than sixteen
(16) holidays designated by EGAT no later than
December 20 of the preceding year, and (ii) any
other holidays designated by the Bank of Thailand
for such calendar year;
CHANGE-IN-LAW Any of the following events occurring after the
Execution Date as a result of any action by any
Governmental Authority: (i) a change in or repeal
of an existing Law, (ii) an enactment or making
of a new Law, and (iii) a change in the manner in
which a Law is applied or in the application or
interpretation thereof (including any
interpretation of environmental standards);
COMMERCIAL OPERATION DATE The date agreed by EGAT and the Generator in
accordance with Section 2.10.2 with respect to
each Unit;
COMMERCIAL OPERATIONS TEST The series of tests to determine the net
generating capacity and Operating Characteristics
of a Unit as set out in Schedule 14;
CONFIRMATION STATEMENT A statement in the form set out in Schedule 15
confirming the capability of a Unit to provide
(i) generating capacity up to its Dependable
Contracted Capacity, and (ii) the other
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Contracted Operating Characteristics set out in
Paragraph 2 of Schedule 1;
CONNECTION The link between the Facility and the EGAT
System;
CONNECTION POINT The physical point or points where the Facility
and the New Transmission Facilities are
connected, which shall be the takeoff structure
in the Facility switchyard, as identified in
Schedules 10 and 13;
CONTRACTED AVAILABLE HOURS This term shall have the meaning
assigned thereto in Schedule 2;
CONTRACTED CAPACITY The rated net power output (expressed in MW) of
each Unit as set out in Schedule 1;
CONTRACTED OPERATING The Operating Characteristics of each Unit as set
CHARACTERISTICS out in Schedule 1, exclusive of Paragraph 3.2
thereof;
CONTRACT YEAR For the first calendar year of the Facility's
operation, the period which begins on the
Commercial Operation Date of the First Unit and
ends on December 31, and thereafter during the
Term, each annual period commencing on January 1
and ending on December 31 (or on the last day of
the Term);
CONTROL For purposes of Section 27.1, control of any
Person by a Governmental Authority shall mean
direct or indirect ownership by such Governmental
Authority of fifty percent (50%) or more of the
securities having ordinary voting power for the
election of directors or other governing body
(for a corporation) or fifty percent (50%) or
more of a partnership interest (excluding
interests as a limited partner) or other
ownership interests of another Person;
DECLARED OPERATING The Operating Characteristics of a Unit as
CHARACTERISTICS declared from time to time in accordance with
Schedule 2;
DEFAULT RATE A rate equal to two percent (2%) over the
Overdraft Rate;
DEPENDABLE CONTRACTED The maximum continuous net generating capacity of
CAPACITY a Unit (measured in MW or kW as appropriate)
established in accordance with Section 2.11;
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DESIGN LIMITS The operational limits of a Unit as set out in
Schedule 1 and revised from time to time as agreed
by the Parties;
DEVELOPMENT SECURITY A direct pay letter of credit or letter of
guarantee from one or more Thai banks or a cash sum
held by an escrow agent provided to EGAT by the
Generator in accordance with Section 13.1;
DISPATCH The direction by EGAT's Control Center to commence,
increase, decrease, continue or cease the delivery
of electricity into the EGAT System;
DISPATCH INSTRUCTION An instruction issued by EGAT's Control Center to
the Generator pursuant to the Grid Code to perform
one or more of the Declared Operating
Characteristics or other operation permitted by
this Agreement or the Grid Code;
EARLIEST COMMERCIAL The dates set out in Section 10.4 with respect to
OPERATION DATE each Unit (or as adjusted in accordance with
Section 10.5) on or after which the Unit may begin
commercial operation pursuant to Section 2.10.2;
EGAT The Electricity Generating Authority of Thailand;
EGAT ACT The Electricity Generating Authority of Thailand
Act, B.E. 2511, as amended from time to time;
EGAT'S CONTROL CENTER EGAT's National or Regional Control Centers set up
for the purposes of Dispatch of generating units,
external interconnectors and the EGAT System;
EGAT SYSTEM The bulk power network controlled or used by EGAT
for the purpose of generating, transmitting and
distributing electricity to EGAT's customers;
EMERGENCY CONDITIONS A condition or situation that in EGAT's reasonable
judgment is likely to cause (i) an imminent
physical threat of danger to life, health or
property, or (ii) a significant disruption on the
EGAT System that would adversely affect EGAT's
ability to meet its obligation to provide safe,
adequate and reliable supply of electricity to its
customers;
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ENERGIZING DATE The date determined in accordance with Section
2.10.1 on which the Connection is energized for the
pre-operation testing and start up of the First
Unit;
ENERGY PAYMENT Payment made by EGAT to the Generator for the
electrical energy generated by a Unit and delivered
to the EGAT System as determined in accordance with
Schedule 3;
EPC CONTRACT The agreement or agreements for the engineering,
design, supply, construction, erecting and testing
of the Facility, as modified or supplemented from
time to time;
EVENT OF DEFAULT An event, condition or circumstance described in
Section 12.1.1 or 12.2.1;
EXECUTION DATE The date on which this Agreement is signed by the
Parties;
EXPERT Any person appointed by agreement between the
Parties pursuant to Section 15.1.2;
FACILITY The two Units and the Generator's associated
buildings, structures, roads, and other
appurtenances, not including the New Transmission
Facilities;
FACILITY SWITCHYARD The Facility's 500kV equipment, including the Unit
auxiliary transformer, associated buildings,
structures, roads and other related appurtenances;
FINAL CONFIRMATION This term shall have the meaning assigned thereto
STATEMENT in Section 18.5;
FINANCIAL CLOSE When all relevant Financing Documents required to
fund fully the development, acquisition,
construction, ownership, and initial working
capital for the Facility have been duly executed
and either (i) an initial funding thereunder has
occurred, or (ii) EGAT shall have received a
certificate of the lead bank, agent or trustee
acting for the Financing Parties (or any other
evidence reasonably satisfactory to EGAT)
confirming that all conditions precedent to the
initial drawdown of funds thereunder have been
satisfied or waived by the Financing Parties where
the Generator does not need to make a drawdown of
funds thereunder to so fund the Facility;
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FINANCING DOCUMENTS The agreements for the making available of any
loans, credit facilities, notes (including floating
rate notes and commercial paper), bonds,
subordinated debt or other funds other than equity
or equity-related funds and including working
capital and any letters of credit (and related
agreements), security agreements, swap agreements,
and any other hedging agreements and any other
documents relating to the financing or refinancing
of the New Transmission Facilities or the Access
Rights and of the development, construction,
acquisition, ownership, operation and maintenance
of the Facility;
FINANCING PARTIES Any Person which provides loans or other financing
to the Generator as evidenced by or pursuant to the
Financing Documents;
FIRST UNIT The first of the two Units to be installed in
accordance with the schedule set out in Section
10.4;
FORCE MAJEURE This term shall have the meaning assigned thereto
in Section 14.1.1;
FUEL Coal which meets the specifications set out in the
Fuel Purchase Agreement;
FUEL PURCHASE AGREEMENT The Fuel sales contract between the supplier of
Fuel and the Generator;
FUEL STOCK The stock of Fuel to be arranged by the Generator
in accordance with Section 9.3;
FUEL TRANSPORTATION The agreement executed by the Generator to
AGREEMENT transport Fuel to the Site if arrangements for such
transport are not fully provided for in the Fuel
Purchase Agreement;
GENERATOR This term shall have the meaning assigned thereto
in the opening recitals of this Agreement;
GJ Gigajoule;
GOVERNMENTAL APPROVAL Any approval, consent, concession, decree, permit,
waiver, exemption or approval from, or filing with,
or notice to, any Governmental Authority;
GOVERNMENTAL AUTHORITY The Government of Thailand and any ministry,
department, political subdivision,
Page 7
instrumentality, agency, authority (excluding EGAT
or any successor to EGAT's interests under this
Agreement), corporation or commission under the
direct or indirect control of the Government of
Thailand, or the Parliament of Thailand, or any
court or tribunal in Thailand;
GOVERNMENTAL FORCE This term shall have the meaning assigned thereto
MAJEURE in Section 14.1.2;
GRID CODE The code issued by EGAT and attached hereto as
Schedule 20, which sets forth certain requirements
with respect to the coordination of power
facilities with the operation of the EGAT System,
and as it may be amended, modified or supplemented
from time to time;
INDEPENDENT ENGINEER The engineering firm appointed by the Generator in
accordance with Section 2.3.1;
KW Kilowatt;
KWH Kilowatt-hour;
LAW Any legislation, statute, act, Royal decree, rule,
order, treaty, regulation or announcement
(excluding the Grid Code), or any interpretation
thereof, which has been enacted, issued or
promulgated by any Governmental Authority;
METERING EQUIPMENT The Primary Metering Equipment and Back-Up Metering
Equipment as described in Schedule 13;
METERING POINT The point on the Site where the Metering Equipment
is located, as further described in Schedule 13;
METER RECONCILIATION A report issued in accordance with Section 18.1
STATEMENT following any meter test conducted pursuant to
Section 2.4.3;
MINIMUM TAKE LIABILITY This term shall have the meaning assigned thereto
in Section 7;
MW Megawatt;
MWH Megawatt-hour;
NET CAPACITY TEST The test to determine the net generating capacity
of a Unit as set out in Schedule 14;
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NET ELECTRICAL GENERATION For any period, the net electrical energy delivered
by the Facility or a Unit as the context requires
(measured in kWh or MWh as appropriate at the
Metering Point) into the EGAT System during such
period;
NEW MAIN TRANSMISSION The 500 kV double circuit transmission line from
LINE (NMTL) Bang Saphan to the NTF Connection Point and from
the NTF Connection Point to Chom Bung to be
constructed by EGAT;
NEW TRANSMISSION Extensions and modifications to the EGAT System as
FACILITIES (NTF) described in Schedule 10 made in order to allow
connection of the Facility to the EGAT System;
NOTICE A statement or notice in one of the forms set out
in Schedule 15 declaring, revising or confirming
the capability of a Unit to provide its Contracted
Operating Characteristics;
NTF CONNECTION POINT The physical point or points where the New
Transmission Facilities and the New Main
Transmission Line are connected, as identified in
Schedule 10;
NTF COMMISSIONING The date determined in accordance with Section
COMPLETION DATE 2.8.14 on which the New Transmission Facilities
have successfully completed the final testing and
commissioning requirements set out in Schedule 18;
NTF ENERGIZING DATE The date determined in accordance with Section
2.8.10 on which the NTF Connection Point is
energized;
O&M AGREEMENT The operation and maintenance agreement for the
Facility between the Generator and the Facility
operator;
OPERATING CHARACTERISTICS The parameters which define the capability of a
Unit to respond to Dispatch Instructions;
OUTAGE NOTICE A statement in the form set out in Schedule 15
declaring or revising the period during which a
Unit shall be withdrawn from service and the degree
to which this affects the Unit's capability to
deliver its Contracted Operating Characteristics,
as described in Schedule 2;
OVERDRAFT RATE The minimum overdraft rate then in effect at Krung
Thai Bank Public Company Limited, or its successor;
Page 9
PARTY This term shall have the meaning assigned thereto
in the recitals of this Agreement;
PAYMENT INVOICE/ A statement in the form set out in Schedule 6
CREDIT NOTE issued by the Generator in accordance with Section
19.1;
PERSON Any individual, corporation, partnership, joint
venture, association, trust, unincorporated
organization, Governmental Authority or other
entity;
PLANNED OUTAGE Any period during which a Unit is wholly or
partially withdrawn from service as determined in
accordance with the Grid Code;
POST EVENT NOTICE A statement given by EGAT in the form set out in
Schedule 15 describing a failure by a Unit to
deliver the Contracted Operating Characteristics
declared in a previous Notice;
PRIMARY METERING The Primary Metering Equipment and associated
EQUIPMENT devices as described in Schedule 13;
PROJECT The design, development, construction, financing,
ownership, operation and maintenance of the
Facility under the terms of this Agreement;
PROJECT AGREEMENTS The EPC Contract, the Fuel Purchase Agreement, the
Fuel Transportation Agreement (if any), the
Financing Documents, the O&M Agreement, and the
Site Agreement;
PRUDENT UTILITY PRACTICES The practices, methods and acts engaged in or
accepted by a significant portion of the
international electric generating industry for
facilities or equipment similarly situated to the
Facility, the New Transmission Facilities or the
New Main Transmission Line that, at a particular
time, in the exercise of reasonable judgment in
light of the facts known or that reasonably should
have been known at the time a decision was made,
would be expected to accomplish the desired result
in respect of the design, engineering,
construction, operation and maintenance of the
facilities or equipment associated with the
Facility, the New Transmission Facilities or the
New Main Transmission Line, in a manner consistent
with Law, Governmental Approvals, reliability,
safety, economy, environmental protection and the
construction, operation and maintenance
Page 10
standards recommended by the Facility's equipment
suppliers and manufacturers;
SCHEDULED COMMERCIAL The date set out in Section 10.4 with respect to
OPERATION DATE each Unit (or as adjusted in accordance with
Section 10.5) on which the Unit is scheduled to
begin commercial operation;
SCHEDULED CONSTRUCTION The date set out in Section 10.4 (or as adjusted in
COMMENCEMENT DATE accordance with Section 10.5) on which the
Generator is scheduled to commence construction of
the Facility in accordance with Section 11(i);
SCHEDULED ENERGIZING DATE The date set out in Section 10.4 (or as adjusted in
accordance with Section 10.5) on which the
Connection is scheduled to be energized by EGAT for
the pre-operation testing and start up of the First
Unit;
SCHEDULED FINANCIAL The date set out in Section 10.4 by which the
CLOSE DATE Generator is scheduled to complete the Financial
Close of the Project;
SCHEDULED NTF ENERGIZING The date set out in Section 10.4 (or as adjusted in
DATE accordance with Section 10.5) on which the NTF
Connection Point is scheduled to be energized by
EGAT for the testing and commissioning of the New
Transmission Facilities;
SECOND UNIT The second of the two Units to be installed in
accordance with the schedule set out in Section
10.4;
SETTLEMENT PERIOD A period of one (1) hour starting on the hour;
SITE The plot of land upon which the Facility is
located;
SITE AGREEMENT The purchase or lease agreement(s) relating to the
Generator's acquisition of a right to occupy and
use the Site for the Project;
SPONSORS Gulf Electric Company Limited (60%) and MEC
International B.V. (40%);
TAXES Any tax, charge, tariff, duty or fee of any kind
charged, imposed or levied, directly or indirectly,
by any Governmental Authority, including any VAT,
sales tax, stamp duty, import duty, withholding tax
(whether on income, dividends, interest payments,
fees,
Page 11
equipment rentals or otherwise), tax on foreign
currency loans or foreign exchange transactions,
excise tax, property tax, registration fee or
license, water tax or environmental, energy or fuel
tax (including any fee or charge imposed or
assessed on the basis of the carbon or calorific
content of fuel);
TERM The period of this Agreement as specified in
Section 10.1, subject to extension in accordance
with Sections 10.3 and 10.5;
UNIT Either of the Facility's two electrical generating
sets, each comprising a coal-fired boiler and a
steam turbine generator and ancillary equipment and
facilities as described in Schedule 7; and
VAT The value added tax in Thailand or such other taxes
having the same effect.
1.2 INTERPRETATION
In this Agreement (including its Schedules), unless otherwise stated:
1.2.1. Any references to:
(a) the Grid Code, or any section, appendix or other provision
thereof, shall be construed, at any particular time, as
including a reference to the Grid Code, section, appendix or
the relevant provision thereof as it may have been amended,
modified or supplemented;
(b) any agreement (including this Agreement or any Schedule hereto)
shall be construed, at any particular time, as including a
reference to the relevant agreement as it may have been
amended, modified, supplemented or novated;
(c) a month shall be construed as a reference to a calendar month;
(d) a particular Section or Schedule shall be a reference to the
relevant Section or Schedule in or to this Agreement; and
(e) a particular paragraph or sub-paragraph, if contained in a
Schedule, shall be a reference to the relevant paragraph or
sub-paragraph of that Schedule.
1.2.2 Words in the singular may be interpreted as referring to the plural
and vice versa, and words denoting natural persons may be
interpreted as referring to corporations and any other legal
entities and vice versa.
1.2.3. Whenever this Agreement refers to a number of days, such number
shall refer to the number of calendar days unless Business Days are
specified. A requirement that a payment be made on a day which is
not a Business Day shall be construed as a requirement that the
payment be made on the next following Business Day.
Page 12
1.2.4. The words "include" and "including" are to be construed as being at
all times followed by the words "without limitation", unless the
context otherwise requires.
1.3 CALCULATION VALUES
For the purposes of this Agreement, amounts and values shall be calculated
to the number of decimal places indicated in Schedule 4 unless otherwise
specified herein.
1.4 TABLE OF CONTENTS AND HEADINGS
The table of contents and headings are inserted for convenience only and
are not to be applied for purposes of construction and interpretation of
this Agreement.
2. FACILITY DEVELOPMENT AND CONNECTION ARRANGEMENTS
2.1 OBLIGATIONS TO CONSTRUCT
2.1.1 The Generator shall design, engineer, construct, test and
commission the Facility and the New Transmission Facilities. The
Generator shall ensure that the New Transmission Facilities and the
Facility Switchyard shall be ready for energizing on or before the
Scheduled Energizing Date, and that the First Unit and Second Unit
shall be ready for Dispatch on or before their respective Scheduled
Commercial Operation Dates.
2.1.2 EGAT shall design, engineer, construct, test, and commission the
New Main Transmission Line. EGAT shall energize the NTF Connection
Point on or before the Scheduled NTF Energizing Date for testing
and commissioning of the New Transmission Facilities and the
Facility Switchyard, and to enable Dispatch of the First Unit and
Second Unit on or before their respective Scheduled Commercial
Operation Dates.
2.2 CONSTRUCTION AND LICENSING OF THE FACILITY
The Parties shall comply with the following provisions.
2.2.1 The Generator shall apply for, obtain, and maintain, at its own
expense, each Governmental Approval necessary for the Generator to
construct, own, and operate the Facility and otherwise perform its
obligations under this Agreement. EGAT shall, when reasonably
requested by the Generator and at the Generator's cost, provide
reasonable assistance to the Generator in obtaining, renewing and
maintaining such Governmental Approvals. Notwithstanding the
foregoing, the Generator shall be solely responsible for obtaining
such Governmental Approvals. Subject to its regulatory and
statutory discretion, EGAT shall grant to the Generator any
approvals, consents, concessions, decrees, waivers, privileges or
exemptions that EGAT is empowered to grant, provided the Generator
(i) is in compliance with its obligations under this Agreement, and
(ii) has met all applicable requirements for such grant.
2.2.2 The Generator shall commence the construction of the Facility on or
before the Scheduled Construction Commencement Date.
2.2.3 The Facility shall be constructed to meet the Contracted Operating
Characteristics set out in Schedule 1, the technical
characteristics set out in
Page 13
Schedule 7 and the construction schedule set out in Schedule 11.
The Generator shall obtain EGAT's prior written consent to any
material modifications in such technical characteristics, which
consent shall not be unreasonably withheld or delayed. If EGAT does
not respond to a request for such a material modification within
thirty (30) days of receipt of such request, EGAT shall be deemed
to have given its consent to the material modification.
2.2.4 The Generator shall construct, complete, repair and modify the
Facility such that it shall, at all times, operate in compliance
with all applicable Laws, including environmental Laws, and the
Grid Code.
2.2.5 The Generator shall construct the Facility, either by itself or
through third party contractors, according to Prudent Utility
Practices and in a workmanlike and professional manner.
2.2.6 The Generator shall allow representatives of EGAT to inspect the
construction site at any reasonable time during construction,
start-up, and testing of the Facility, provided that EGAT shall
notify the Generator in writing reasonably in advance of any
inspection and shall cooperate with the Generator to minimize
interference with the Generator's contractors at the Site.
2.2.7 The Parties shall cooperate with each other in accordance with the
terms of this Agreement in the construction of the Facility, the
New Transmission Facilities and in connecting the Facility to the
EGAT System.
2.3 INDEPENDENT ENGINEER AND PROGRESS REPORTS ON CONSTRUCTION
The Generator, at its expense, shall provide EGAT with the documents and
other materials set out below within the dates specified there.
2.3.1 Within thirty (30) days after the Execution Date, the Generator
shall provide EGAT with a list of five or more independent
engineers. If at least three of the engineers listed are not
reasonably acceptable to EGAT then, within fifteen (15) days of
receiving the list (or any further lists required hereunder), EGAT
may require the Generator to provide a further list and the
Generator shall comply with any such requirement. Within fifteen
(15) days of receiving a list containing at least three independent
engineers reasonably acceptable to EGAT, EGAT shall nominate three
or more of the engineers listed to be appointed to act as
independent engineer (the "Independent Engineer") for the purposes
of this Agreement and the Generator shall appoint one of the
nominated engineers to act in that capacity. If EGAT does not
nominate three or more engineers or request a further list of
engineers within fifteen (15) days of receiving a list of engineers
from the Generator, EGAT shall be deemed to have nominated all of
the engineers on the list most recently provided to it by the
Generator. Except as otherwise provided in this Agreement, the
Generator shall bear all costs and expenses associated with the
Independent Engineer.
2.3.2 Starting fifteen (15) days after the end of the first full calendar
month after the Execution Date, and thereafter within fifteen (15)
days after the close of each calendar quarter up to the start of
construction of the Facility, the Generator shall submit for review
to EGAT quarterly progress reports substantially in the form set
out in Schedule 16.
Page 14
2.3.3 On the tenth (10th) Business Day of every month after the start of
construction of the Facility until the Commercial Operation Date of
the Second Unit, the Generator shall submit for review to EGAT
monthly progress reports substantially in the form set out in
Schedule 17.
2.3.4 The Generator shall provide EGAT with any clarifications or further
information which EGAT reasonably requests relating to the progress
of construction of the Facility or the Generator's ability to
perform its obligations to meet the Scheduled Commercial Operation
Dates.
2.3.5 Within a reasonable period after the Commercial Operation Date of
each Unit, the Generator shall provide to EGAT (i) a certificate
from the Independent Engineer confirming that the Facility has been
constructed in accordance with Prudent Utility Practices and the
provisions of Schedules 1, 7, 8, 10, 13 and 18, and (ii) a report
from the Independent Engineer on the status of the Facility in
relation to compliance with the material technical provisions of
the EPC Contract. The Generator shall provide any further
documentation or evidence supporting the Independent Engineer's
certificate which EGAT reasonably requests.
2.4 METERING
2.4.1 The Generator shall install, own and maintain, at the Generator's
expense, all Metering Equipment and associated transformers. The
Metering Equipment shall have the specifications set out in
Schedule 13.
The Generator, at its expense, shall provide (i) all metering
structures, unless otherwise agreed, and (ii) surge protection and
the necessary primary switches to isolate the metering
installation. The specifications of such structures and switches
shall be subject to EGAT's approval which shall not unreasonably be
withheld or delayed.
2.4.2 The Metering Equipment shall be sealed in the presence of both EGAT
and the Generator and the seals shall only be broken in the
presence of both Parties for inspection, testing or adjustment.
EGAT, at its expense, shall be entitled to have an authorized
representative present to monitor any test of the Metering
Equipment.
2.4.3 The accuracy of the Metering Equipment shall be tested annually as
specified in Schedule 13 by the Generator at the Generator's
expense, and the Generator shall give EGAT at least fourteen (14)
days' prior written notice of the date of such annual test.
Either Party may request additional tests of the accuracy of the
Metering Equipment in writing at least fourteen (14) days prior to
the proposed date of testing. The Generator shall bear the costs of
any such additional tests, except that EGAT shall bear such costs
if (i) EGAT requested the additional test, and (ii) the test
demonstrates that the Metering Equipment is performing within the
relevant tolerance limits as specified in Schedule 13.
Whenever any Metering Equipment is found to be defective or not
performing within such tolerance limits, it shall be adjusted,
repaired, replaced, or re-calibrated by the Generator at its
expense.
Page 15
2.4.4 If any of the Metering Equipment fails to register, or if the
Metering Equipment is found upon testing to be inaccurate by more
than plus or minus five tenths of one percent (plus or minus 0.5%)
in measuring Net Electrical Generation delivered, an adjustment
shall be made correcting all measurements by the inaccurate or
defective metering device for billing purposes, for both the amount
of the inaccuracy and the period of the inaccuracy, in the
following manner:
(a) If the Parties cannot agree on the amount of the adjustment
necessary to correct the measurements made by the Primary
Metering Equipment, the Parties shall use the Back-Up Metering
Equipment to determine the amount of such adjustment, provided
that the Back-Up Metering Equipment is operating within the
relevant tolerance limits as specified in Schedule 13. If the
Back-Up Metering Equipment is found upon testing to be
inaccurate by more than plus or minus five tenths of one
percent (plus or minus 0.5%) in measuring Net Electrical
Generation, and the Parties cannot agree on the amount of the
adjustment necessary to correct the measurements made by the
Back-Up Metering Equipment, the Parties shall, as soon as
practicable on the basis of procedures to be mutually agreed
upon by the Parties (which may be based upon deliveries of Net
Electrical Generation), estimate the amount of the necessary
adjustment on the basis of deliveries of the Net Electrical
Generation to the EGAT System during periods of similar
operating conditions when the Primary Metering Equipment was
registering accurately and taking into account the Facility's
Fuel use records during such periods;
(b) If the Parties cannot agree on the period during which the
inaccurate measurements were made, the period during which the
measurements are to be adjusted shall be the shorter of (i) one
half of the period from the last test of the Metering
Equipment, and (ii) the one hundred and eighty (180) days
immediately preceding the test that found the Metering
Equipment to be defective or inaccurate; and
(c) To the extent that the adjustment period covers a period of
deliveries for which payment has already been made by EGAT, the
Generator shall use the corrected measurements as determined in
accordance with this Section 2.4.4 to re-compute the amount due
for the period of the inaccuracy and shall subtract the
previous payments by EGAT for such period from such re-computed
amount. If the difference is a positive number, such difference
shall be paid by EGAT to the Generator; and if the difference
is a negative number, such difference shall be paid by the
Generator to EGAT. Payment of such difference shall be made by
means of a credit or an additional charge on the next statement
rendered pursuant to Section 19.
2.5 GRID CODE EQUIPMENT AND COMMUNICATION REQUIREMENTS
2.5.1 The Generator shall install, maintain and operate the
instrumentation set out in the applicable provisions of the Grid
Code relating to metering. The Generator shall also provide
telemetering equipment to facilitate remote monitoring of the
measurements and indications of such instrumentation.
2.5.2 All installation, maintenance, lease, service or purchase costs for
communications and remote indication units at the Facility required
by the Grid
Page 16
Code or specified in Schedules 10 and 13 shall be paid by the
Generator. The costs of communications between the Facility and
EGAT shall be borne by the Generator unless initiated by EGAT.
2.6 RIGHTS-OF-WAY AND EASEMENTS
2.6.1 No later than thirty (30) days after the Execution Date, the
Generator shall identify to EGAT (i) the location of the takeoff
structure at the Site and (ii) the location of the takeoff
structure at the substation on the New Main Transmission Line to
which the New Transmission Facilities shall be connected.
2.6.2 The Generator and EGAT shall cooperate in acquiring all ownership
rights, rights-of-way, easements and continuing access rights
(collectively, the ACCESS RIGHTS) necessary for the construction,
operation, maintenance, upgrading, replacement and removal of any
part of the New Transmission Facilities that will be located on
property owned by any Person other than the Generator.
2.6.3 In accordance with Section 2.6.2, if the Generator reasonably
believes it will be unable to acquire all of the Access Rights and
so notifies EGAT, EGAT shall endeavor to acquire the Access Rights
through the exercise of its authority under the EGAT Act as set out
in Paragraph 5 of Schedule 10. All costs and expenses incurred by
EGAT in the acquisition of the Access Rights shall be reimbursed by
the Generator in accordance with the Paragraph 5(f) of Schedule 10.
2.6.4 EGAT's obligations under Sections 2.6.2 and 2.6.3 shall not be
construed to require EGAT to exercise its authority under the EGAT
Act in a manner that would be extraordinary in light of EGAT's
historical use of such authority. For purposes of Section 14.1.1,
circumstances which would allow EGAT to acquire the Access Rights
only through such an extraordinary exercise of authority under the
EGAT Act shall be deemed beyond EGAT's reasonable control.
2.6.5 If all of the Access Rights have not been procured by 31 March
1998, each of the dates set out in Section 10.4 and each of the
milestone dates set out in Section 11 shall be extended by the
number of additional days required to complete acquisition of the
Access Rights. The Generator may elect to waive all or part of such
extension by giving EGAT, no later than twelve (12) months before
the Scheduled Commercial Operation Date for the First Unit, written
notice of the number of days of the extension that will not be
taken.
2.6.6 Notwithstanding EGAT's obligations under Section 2.6.2 and 2.6.3,
(i) the Generator shall bear all costs and expenses caused by any
delay in obtaining the Access Rights, (ii) any Events of Force
Majeure that delay or prevent acquisition of the Access Rights
shall be deemed to be Force Majeure affecting the Generator and
under no circumstances construed as Force Majeure affecting EGAT.
2.6.7 The Access Rights shall be acquired in EGAT's name or become EGAT's
by Law. EGAT shall allow the Generator, as EGAT's agent, to
exercise all uses of the Access Rights that are required for the
Generator's design, engineering, construction, testing, and
commissioning of the New Transmission Facilities.
Page 17
2.6.8 The Generator shall grant to EGAT all necessary rights-of-way and
easements, including adequate and continuing access rights to the
Generator's property, to install, operate, maintain, replace, or
remove any of EGAT's equipment or facilities for the Connection.
Such rights-of-way and easements shall be granted no later than the
date construction of the New Transmission Facilities is completed
and shall survive the termination or expiration of this Agreement
for a period of at least one hundred and eighty (180) days to
enable EGAT to remove any of its equipment or facilities located
thereon.
2.7 PROVISION OF INFORMATION AND CONSULTATION RELATING TO EGAT TRANSMISSION
FACILITIES
2.7.1 EGAT has provided the Generator with the materials EGAT provides
contractors or suppliers of equipment on their appointment by EGAT
to construct transmission facilities or supply equipment for that
purpose. Such materials are included or identified in Schedule 10
and set out EGAT's standard design specifications and engineering
and construction guidelines, standard contractual terms, conditions
and warranties required from contractors, and other standard
practices relating to the construction of EGAT transmission
facilities. EGAT shall provide any such additional materials
reasonably requested by the Generator.
2.7.2 EGAT shall afford the Generator reasonable opportunities for
consultation concerning the materials provided pursuant to Section
2.7.1.
2.8 COMPLETION OF NEW TRANSMISSION FACILITIES
2.8.1 The Generator shall design, engineer, construct, test, and
commission the New Transmission Facilities in accordance with (i)
the standard EGAT practices and contractual requirements as set out
in the materials and information provided to the Generator under
Sections 2.7.1 and 2.7.2, and (ii) Prudent Utility Practices
whenever there is not an applicable standard EGAT practice or
contractual requirement. Although EGAT shall by Law and the
provisions of Section 2.6 and this Section 2.8.1 have legal title
to the New Transmission Facilities from the start of their
construction, the Generator shall bear the risk of loss of or
damage to the New Transmission Facilities until the NTF
Commissioning Completion Date.
2.8.2 Unless otherwise agreed between the Parties, all contractors and
suppliers of equipment appointed by the Generator for the design,
engineering, construction, testing or commissioning of the New
Transmission Facilities shall be contractors or suppliers of
equipment that have previously performed similar services for or
supplied similar equipment to EGAT. The Generator shall consult
with EGAT concerning the selection of contractors and suppliers of
equipment, and EGAT shall identify for the Generator contractors or
suppliers of equipment that have previously performed services or
supplied equipment to EGAT's satisfaction.
2.8.3 On the tenth (10th) Business Day of every month after the start of
construction of the New Transmission Facilities, the Generator
shall submit for EGAT's review monthly progress reports on the
construction of the New Transmission Facilities substantially in
the form set out in Schedule 17.
Page 18
2.8.4 The Generator shall allow representatives of EGAT to inspect all
construction sites of the New Transmission Facilities at any
reasonable time during their construction or commissioning,
provided that EGAT shall notify the Generator in writing reasonably
in advance of any such inspection and shall cooperate with the
Generator to minimize interference with the Generator's contractors
at such sites. EGAT, at its expense, shall be entitled to attend
and monitor the inspection, testing, energizing and commissioning
of the New Transmission Facilities pursuant to Sections 2.8, 2.9
and 2.10 and Schedule 18.
2.8.5 If at any point during the construction or commissioning of the New
Transmission Facilities EGAT determines that modifications in the
New Transmission Facilities should be made to correct any
discrepancies between the Generator's construction of the New
Transmission Facilities and the materials and information provided
by EGAT to the Generator in accordance with Section 2.7, the
Generator shall make any such modifications reasonably proposed by
EGAT. The Generator shall bear the cost of any such modifications
that are required.
2.8.6 When the New Transmission Facilities are ready for initial
inspection and testing, the Generator shall so notify EGAT in a
statement in a form reasonably acceptable to EGAT. The initial
inspection and testing of the NTF Connection Point and the New
Transmission Facilities shall be scheduled for a date agreed by the
Parties which shall be not more than seven (7) days after EGAT's
receipt of such statement.
2.8.7 On the date determined pursuant to Section 2.8.6, the Generator
shall carry out the initial inspection and testing of the NTF
Connection Point and the New Transmission Facilities in accordance
with Paragraph 3.1 of Part A of Schedule 18.
2.8.8 EGAT shall review on-site the results of the initial inspection and
testing of the NTF Connection Point and the New Transmission
Facilities carried out pursuant to Section 2.8.7. After receiving
the results of such inspection and tests, EGAT shall either (i)
within one (1) day provide the Generator with written notice that
the inspection and testing requirements set out in Paragraph 3.1 of
Part A of Schedule 18 have been met, or (ii) within seven (7) days
provide the Generator with a written report describing any areas
where, in EGAT's reasonable opinion, such requirements have not
been met.
2.8.9 If pursuant to Section 2.8.8(ii) EGAT reports that the New
Transmission Facilities or the NTF Connection Point is not ready
for energizing, the Generator shall determine and remedy the cause
of such failure. The remedy and cost of the remedy shall be borne
by the Generator. The Generator shall notify EGAT when further
inspection and testing pursuant to Paragraph 3.1 of Part A of
Schedule 18 can take place. Such further inspection and testing
shall commence on a date agreed by the Parties which shall be not
more than seven (7) days after the Generator so notifies EGAT. Such
further inspection and testing and EGAT's review of the results
thereof shall proceed pursuant to Sections 2.8.6 to 2.8.8 and this
Section.
2.8.10 EGAT shall provide the energizing source and the Generator shall
energize the NTF Connection Point on an agreed date occurring not
more than five (5) days after EGAT issues to the Generator written
notice pursuant to Section 2.8.8(i),
Page 19
provided that EGAT shall not be required to energize the NTF
Connection Point before the Scheduled NTF Energizing Date. The EGAT
energizing source shall be at least one (1) energized 500kV circuit
from the New Main Transmission Line. After the Generator has
energized the NTF Connection Point, the Generator shall conduct
final energizing and commissioning tests in accordance with
Paragraphs 3.2 and 3.3 of Part A of Schedule 18.
2.8.11 EGAT shall review on-site the results of the final energizing and
commissioning tests of the NTF Connection Point and the New
Transmission Facilities carried out pursuant to Section 2.8.10.
After receiving the results of such tests, EGAT shall either (i)
within one (1) day provide the Generator with written notice that
the test requirements set out in Paragraphs 3.2 and 3.3 of Part A
of Schedule 18 have been met with respect to all tests that can be
performed using all New Main Transmission Line circuits available
at the time for energizing the NTF Connection Point and New
Transmission Facilities, or (ii) within seven (7) days provide the
Generator with a written report describing any areas where, in
EGAT's reasonable opinion, such requirements have not been met.
2.8.12 EGAT shall review on-site the results of the final energizing and
commissioning tests of the 500kV circuits from NTF Connection Point
to the Connection Point carried out pursuant to Section 2.8.10.
After receiving the results of such tests, (i) within one (1) day
EGAT shall provide the Generator with written notice of any
determination by EGAT that the test requirements set out in
Paragraphs 3.2 and 3.3 of Part A of Schedule 18 have been met with
respect to one or both such circuits, and (ii) if EGAT determines
that either of such 500kV circuits have not met such requirements,
within seven (7) days EGAT shall provide the Generator with a
written report describing any areas where, in EGAT's reasonable
opinion, such requirements have not been met.
2.8.13 If EGAT reports that the New Transmission Facilities or the NTF
Connection Point have not met the requirements for notice pursuant
to Section 2.8.11(i) or that either of the 500kV circuits from the
NTF Connection Point to the Connection Point has not met the
requirements for notice pursuant to Section 2.8.12(i), the
Generator shall determine and remedy the cause of such failure. The
remedy and cost of the remedy shall be borne by the Generator. The
Generator shall notify EGAT when further testing pursuant to
Paragraphs 3.2 and 3.3 of Part A of Schedule 18 can take place.
Such further testing shall commence on a date agreed by the Parties
which shall be not more than seven (7) days after the Generator so
notifies EGAT. Such further testing and EGAT's review of the
results thereof shall proceed pursuant to Sections 2.8.10 to 2.8.12
and this Section.
2.8.14 The NTF Commissioning Completion Date shall be the date which is
the later of (i) the date EGAT provides the Generator with notice
pursuant to Section 2.8.11(i), or (ii) the date EGAT provides
notice pursuant to Section 2.8.12(i) that both of the 500kV
circuits from the NTF Connection Point to the Connection Point have
met the test requirements set out in Paragraphs 3.2 and 3.3 of Part
A of Schedule 18.
2.8.15 Beginning on the NTF Commissioning Completion Date, EGAT shall (i)
assume the risk of loss of or damage to the New Transmission
Facilities, and (ii) operate, maintain and energize the New
Transmission Facilities in accordance with Prudent Utility
Practices. Within thirty (30) days after the NTF
Page 20
Commissioning Completion Date, the Generator shall assign to EGAT,
with effect from the NTF Commissioning Completion Date, all
continuing contractual rights and warranties the Generator has
under all contracts relating to the construction of the New
Transmission Facilities and equipment procured for that purpose.
Such contractual rights and warranties shall meet or exceed the
requirements set out in Paragraph 6 of Schedule 10.
2.8.16 There shall be included as a separate component of the Availability
Payments an amount (the ADDED FACILITY CHARGE) to reimburse the
Generator for costs incurred by it (including amounts paid by it to
EGAT pursuant to Section 2.6 and Paragraph 5(f) of Schedule 10) in
connection with the acquisition or transfer of Access Rights and in
the design, engineering, construction, testing and commissioning of
the New Transmission Facilities. The Added Facility Charge shall be
a monthly payment payable for 150 consecutive months equal to the
amounts specified in Paragraph 6.2 of Schedule 2. EGAT shall
commence payments of the Added Facility Charge as part of the first
payment of Availability Payments (after the Commercial Operation
Date of the First Unit or pursuant to Section 2.10.4 or 14.4.2).
Thereafter, EGAT shall pay the Added Facility Charge to the
Generator irrespective of whether EGAT's obligation to make
Availability Payments is otherwise excused in whole or in part
during the Term.
2.9 INSPECTION AND ENERGIZING OF THE CONNECTION POINT AND FACILITY SWITCHYARD
2.9.1 When the Facility Switchyard is ready for the Connection Point to
be energized, the Generator shall so notify EGAT in a statement in
a form reasonably acceptable to EGAT. The inspection and testing of
the Connection Point and the Facility Switchyard shall be scheduled
for a date agreed by the Parties which shall be on or before the
later of (i) fourteen (14) days after EGAT's receipt of such
statement, and (ii) one day after EGAT provides notice pursuant to
Section 2.8.12(i) that the test requirements set out in Paragraphs
3.2 and 3.3 of Part A of Schedule 18 have been met with respect to
at least one of the two 500kV circuits from the NTF Connection
Point to the Connection Point.
2.9.2 On the date determined pursuant to Section 2.9.1, the Generator
shall carry out the initial inspection and testing of the
Connection Point and Facility Switchyard in accordance with
Paragraph 3.1 of Part B of Schedule 18. EGAT, at its expense, may
attend and monitor the inspection and testing of the Connection
Point and the Facility Switchyard.
2.9.3 EGAT shall review at the Site the results of the initial inspection
and testing of the Connection Point and the Facility Switchyard
carried out pursuant to Section 2.9.2. After receiving the results
of such inspection and testing, EGAT shall either (i) within one
(1) day provide the Generator with written notice that the test
requirements set out in Paragraph 3.1 of Part B of Schedule 18 have
been met, or (ii) within seven (7) days provide the Generator with
a written report describing any areas where, in EGAT's reasonable
opinion, such requirements have not been met.
2.9.4 If EGAT reports that the Facility Switchyard or the Connection
Point is not ready for energizing, the Generator shall, at its
expense, make such changes to the Facility Switchyard or the
Connection Point as are required and notify EGAT when further
inspection and testing pursuant to Paragraph 3.1 of Part B
Page 21
of Schedule 18 can take place. Such further inspection and testing
shall commence on a date agreed by the Parties which shall be not
more than seven (7) days after the Generator so notifies EGAT. Such
further testing and EGAT's review of the results thereof shall
proceed pursuant to Sections 2.9.2 and 2.9.3 and this Section.
2.9.5 EGAT shall provide the energizing source and the Generator shall
energize the Connection Point on an agreed date occurring not more
than five (5) days after EGAT issues to the Generator written
notice pursuant to Section 2.9.3(i), provided that EGAT shall not
be required to energize the NTF Connection Point for this purpose
before the Scheduled Energizing Date. The Generator shall conduct
final energizing and commissioning tests for the Connection Point
and Facility Switchyard pursuant to Paragraphs 3.2 to 3.4 of Part B
of Schedule 18.
2.9.6 EGAT shall review the final energizing and commissioning test
results of the Connection Point and the Facility Switchyard. After
receiving the results of such testing, EGAT shall either (i) within
one (1) day provide the Generator with written notice that the test
requirements set out in Paragraphs 3.2 to 3.4 of Part B of Schedule
18 have been met, or (ii) within seven (7) days provide the
Generator with a written report describing any areas where, in
EGAT's reasonable opinion, such requirements have not been met.
2.9.7 If EGAT reports that the Facility Switchyard or the Connection
Point have not met the requirements for notice pursuant to Section
2.9.6(i), the Generator shall determine and remedy the cause of
such failure. The remedy and cost of the remedy shall be borne by
the Generator. The Generator shall notify EGAT when further testing
pursuant to Paragraphs 3.2 to 3.4 of Part B of Schedule 18 can take
place. Such further testing shall commence on a date agreed by the
Parties which shall be not more than seven (7) days after the
Generator so notifies EGAT. Such further testing and EGAT's review
of the results thereof shall proceed pursuant to Sections 2.9.5 and
2.9.6 and this Section.
2.10 SYNCHRONIZING AND COMMERCIAL OPERATION
2.10.1 After EGAT provides notice pursuant to Section 2.9.6(i), the
Generator shall conduct the Unit synchronizing tests set out in
Paragraph 3.5 of Part B of Schedule 18.
EGAT shall review the results of such Unit synchronizing tests.
After receiving the results of such testing, EGAT shall either (i)
within one (1) day provide the Generator with written notice that
the test requirements set out in Paragraph 3.5 of Part B of
Schedule 18 have been met, or (ii) within seven (7) days provide
the Generator with a written report describing any areas where, in
EGAT's reasonable opinion, such requirements have not been met.
If EGAT reports that the Unit has not met the requirements for
notice pursuant to subclause (i) of this Section, the Generator
shall determine and remedy the cause of such failure. The remedy
and cost of the remedy shall be borne by the Generator. The
Generator shall notify EGAT when further testing pursuant to
Paragraph 3.5 of Part B of Schedule 18 can take place. Such further
testing shall commence on a date agreed by the Parties which shall
be not more than seven (7) days after the Generator so notifies
EGAT. Such further testing and EGAT's review of the results thereof
shall proceed pursuant to this Section.
Page 22
The Generator shall be allowed to synchronize on an agreed date
occurring after EGAT provides notice pursuant to subclause (i) of
this Section 2.10.1, but no more than one hundred and eighty (180)
days before the Commercial Operation Date of the Unit the Parties
anticipate to be set pursuant to Section 2.10.2.
2.10.2 On the date which is twelve (12) months before the Scheduled
Commercial Operation Date of the First Unit, EGAT shall provide the
Generator with written notice stating whether the reserve capacity
in the EGAT System forecasted for the Scheduled Commercial
Operation Date of the First Unit is greater than or less than
fifteen percent (15%).
If such forecasted reserve capacity is less than fifteen percent
(15%), the Commercial Operation Date of the First Unit may occur on
or after its Earliest Commercial Operation Date and the Commercial
Operation Date of the Second Unit may occur on or after its
Earliest Commercial Operation Date. If such forecasted reserve
capacity is greater than fifteen percent (15%), the Commercial
Operation Date of the Units may not occur before their respective
Scheduled Commercial Operation Dates without the written consent of
EGAT which shall be at EGAT's sole discretion.
Subject to the foregoing, the Commercial Operation Date of each
Unit shall be a date agreed by EGAT and the Generator occurring no
more than five (5) days after the later of (i) EGAT's receipt of a
certificate of the Independent Engineer certifying that the Unit
has successfully completed the Commercial Operations Test in
accordance with Schedule 14, and (ii) the NTF Commissioning
Completion Date.
2.10.3 If the Commercial Operation Date for either Unit fails to occur by
its Scheduled Commercial Operation Date, the Generator shall pay
EGAT liquidated damages of four (4) Baht/kW per day of Contracted
Capacity of such Unit for the number of days such failure is not
due to the actions or omissions of EGAT or otherwise excused
hereunder in the period from the Unit's Scheduled Commercial
Operation Date to the earlier of (i) its Commercial Operation Date,
or (ii) the date two hundred and forty (240) days after the
Scheduled Commercial Operation Date.
2.10.4 If the Commercial Operation Date of either Unit fails to occur by
its Scheduled Commercial Operation Date, EGAT shall make
Availability Payments to the Generator with respect to that Unit
for the number of days during the period from its Scheduled
Commercial Operation Date to its Commercial Operation Date that
such failure is due solely to EGAT's not completing the New Main
Transmission Line or not energizing the NTF Connection Point by the
Scheduled NTF Energizing Date or not energizing the Connection
Point by the Scheduled Energizing Date, unless such failure is
otherwise excused hereunder. EGAT shall commence making such
Availability Payments on the Scheduled Commercial Operation Date of
the Unit after such date is adjusted as described below.
For the purposes of determining the date such Availability Payments
shall commence, the Scheduled Commercial Operation Date of the Unit
(i) shall be extended by one day for each day by which the
occurrence of the Commercial Operation Date is delayed due to
causes attributable to the Generator, but (ii) shall not be
extended pursuant to Section 10.5.2 for delay due solely to EGAT's
Page 23
not completing the New Main Transmission Line, not energizing the
NTF Connection Point by the Scheduled NTF Energizing Date or not
energizing the Connection Point by the Scheduled Energizing Date.
EGAT shall continue making such Availability Payments until the
earlier of (i) the date upon which EGAT has made such Availability
Payments for the same number of days as the Unit's Commercial
Operation Date was delayed by EGAT as determined in accordance with
the preceding paragraph, (ii) the Commercial Operation Date of the
Unit, or (iii) the termination of this Agreement.
Any Availability Payments made by EGAT in accordance with this
Section 2.10.4 shall be calculated using the Contracted Capacity of
the Unit. Costs which the Generator either did not incur or were
avoidable because the Unit was not Available shall be deducted from
such Availability Payments, and any additional costs necessarily or
reasonably incurred as a result of the delay caused by EGAT shall
be added to such Availability Payments.
If the Dependable Contracted Capacity that is established for
either Unit on its Commercial Operation Date is less than its
Contracted Capacity, then the Availability Payments paid to the
Generator with respect to that Unit during the period between its
Scheduled Commercial Operation Date and its Commercial Operation
Date shall be recalculated using its Dependable Contracted Capacity
on its Commercial Operation Date. If the Availability Payments made
in respect of that period exceed the amount reached by the
recalculation, EGAT shall be entitled to deduct an amount equal to
the excess from future payments due to the Generator by EGAT
together with interest on the amount of the excess at the Overdraft
Rate. Such deductions shall be made from such future payments pro-
rata over the same period of time in which the excess Availability
Payments were made.
2.10.5 Any Availability Payments payable by EGAT to the Generator in
accordance with Section 2.10.4 shall be paid in accordance with
Section 19.2. Liquidated damages payable by the Generator to EGAT
in accordance with Section 2.10.3 shall be drawn by EGAT from any
portion of the Development Security remaining after any reduction
thereof in accordance with Section 13.2. To the extent such portion
of the Development Security is insufficient to compensate EGAT for
all liquidated damages due under Section 2.10.3, the Generator
shall pay EGAT any further liquidated damages in accordance with
Section 19.2.
2.11 TESTING
2.11.1 Prior to the Commercial Operation Date of each Unit, the Generator
shall conduct the Commercial Operations Test for the Unit. Such
test will (i) determine the Unit's Dependable Contracted Capacity,
and (ii) verify the Unit's Contracted Operating Characteristics.
The Generator shall provide thirty (30) days' prior written notice
to EGAT of such test of each Unit. After such notice has been
given, the Generator shall provide at least seven (7) days' prior
written notice to EGAT of any rescheduling of the date of such
test. EGAT, at its expense, may attend and monitor the Commercial
Operations Test of each Unit.
The Generator shall bear the costs and expenses of the Commercial
Operations Tests and all other tests conducted before the
Commercial Operation Date.
Page 24
2.11.2 After the Commercial Operation Date of each Unit, the Unit shall be
tested semi-annually during each Contract Year (and after each time
the Unit is withdrawn from service for a major overhaul,
modification or renovation) to establish the Dependable Contracted
Capacity. The Dependable Contracted Capacity so established (i) may
be more or less than the previously established Dependable
Contracted Capacity for the Unit, but (ii) may not exceed the
Unit's Contracted Capacity. The Generator shall bear the costs and
expenses of all such semi-annual tests, and EGAT shall bear the
costs and expenses of attending and monitoring such tests.
2.11.3 EGAT shall have the right to require the Generator to conduct a Net
Capacity Test for either Unit upon seven (7) days' prior written
notice to the Generator if EGAT reasonably believes that the
generating capacity of the Unit is less than the Dependable
Contracted Capacity then in effect for the Unit for any reason
whatsoever except (i) Governmental Force Majeure, (ii) a condition
caused by the EGAT System (including Force Majeure affecting EGAT),
or (iii) a Planned Outage. The Generator shall bear the costs and
expenses of any test required by EGAT under this Section 2.11.3,
but EGAT shall repay the Generator such costs and expenses if the
Net Capacity Test demonstrates a Dependable Contracted Capacity
equal to or greater than that in effect for the Unit when EGAT
requested the Net Capacity Test. In either case, EGAT shall be
responsible for any costs and expenses of attending and monitoring
such tests.
2.11.4 The Generator shall have the right to conduct Net Capacity Tests to
establish a new Dependable Contracted Capacity for either Unit upon
seven (7) days' prior written notice to EGAT. The Generator may
request such determinations of Dependable Contracted Capacity on no
more than four (4) occasions in any Contract Year, exclusive of any
such determinations requested by EGAT pursuant to Section 2.11.3.
The Generator shall bear the costs and expenses of any test
required under this Section 2.11.4, and any expenses incurred by
EGAT in attending and monitoring such tests.
2.11.5 The Dependable Contracted Capacity of each Unit on its Commercial
Operation Date shall be the Dependable Contracted Capacity
established by the most recently conducted Net Capacity Test of the
Unit. The Dependable Contracted Capacity so established may not
exceed the Unit's Contracted Capacity. The Dependable Contracted
Capacity established for a Unit in the most recently conducted Net
Capacity Test shall be effective until the Dependable Contracted
Capacity for that Unit is next determined in accordance with this
Section 2.11 and Schedule 14. Any Availability Notice issued by the
Generator to EGAT pursuant to Section 5 shall not declare
Availability for a Unit in excess of the Dependable Contracted
Capacity in effect for that Unit at the time any such Availability
Notice is issued, except as permitted in Paragraph 17 of Schedule
2.
2.12 REVIEW BY EGAT
Notwithstanding any other provisions of this Agreement, any review by EGAT
of any materials, documents, designs, drawings, schedules, design data or
other information submitted by the Generator concerning the Facility under
this Agreement or prior to the execution of this Agreement, or any consent
by EGAT under Section 2.2.3 to any modification in the Facility's
construction, or any inspection or testing of the Facility by EGAT, or any
presence of EGAT to witness any test performed by the Generator, whether
undertaken pursuant to this Agreement or not, shall not be deemed to
constitute
Page 25
an endorsement of the Facility nor a warranty or other assurance by EGAT of
the safety, durability or reliability of the Facility, nor release the
Generator of any of its obligations under this Agreement.
3. PROVISION AND PURCHASE OF AVAILABILITY AND ELECTRICITY
3.1 OBLIGATION TO PROVIDE DEPENDABLE CONTRACTED CAPACITY AND CONTRACTED
OPERATING CHARACTERISTICS
3.1.1 In consideration of EGAT's agreement to pay Availability Payments,
Energy Payments and other sums to the Generator on the terms and
conditions of this Agreement, the Generator shall throughout the
Term maintain, repair, fuel and operate the Facility as required by
Prudent Utility Practices, the Grid Code and all applicable Laws to
ensure the provision of the Dependable Contracted Capacity and the
Contracted Operating Characteristics.
3.1.2 The Generator shall ensure that it does not at any time issue or
allow to remain outstanding, with respect to a Unit, a declaration
of revised Operating Characteristics which declares the
Availability and Operating Characteristics of the Unit at levels or
values different from those that the Unit could achieve at the
relevant time except:
(a) during periods of Planned Outage or otherwise with the
consent of EGAT;
(b) while repairing or maintaining the Facility or equipment
necessary to the operation of the Facility where such repair or
maintenance cannot reasonably, in accordance with Prudent
Utility Practices, be deferred to a period of Planned Outage;
(c) where necessary to avoid an imminent risk of injury to persons
or material damage to property (including the Facility);
(d) if it is not lawful for the Generator to operate the Facility;
or
(e) to the extent that the Generator is affected by a Force
Majeure;
provided that this Section shall not require the Generator to
declare Availability or Operating Characteristics exceeding the
requirements specified in Schedule 1.
3.1.3 EGAT shall accept test energy generated from a Unit prior to its
Commercial Operation Date and pay the Generator for such energy as
measured by Metering Equipment at the Metering Point in accordance
with Section 19 an amount equal to the sum of:
(a) the cost of Fuel used by the Generator to generate such test
energy; plus
(b) the variable operation and maintenance costs reasonably
incurred by the Generator in producing such test energy.
Page 26
3.2 COMPLIANCE WITH THE GRID CODE
3.2.1 The Generator shall comply with the provisions of the Grid Code in
effect throughout the Term, subject to any variations therefrom
granted to the Generator by EGAT.
3.2.2 EGAT shall use its reasonable efforts to notify the Generator in
advance of proposed changes to the Grid Code, and the Generator may
provide comments to EGAT in regard to such proposed changes. EGAT
shall give due consideration to any such comment.
3.2.3 Within the period of time stated in the notice (which shall
generally not be less than thirty (30) days) after receipt of a
notice of change in the Grid Code which does not require Facility
modifications, or which does not adversely affect the Facility's
operation, the Generator shall comply with such change to the Grid
Code. If Facility modifications are required or the Facility's
operation would be adversely affected by a change in the Grid Code,
the Generator shall as soon as practicable advise EGAT of the
anticipated length of time required in order for the Generator,
acting diligently, to effect compliance with such notice. The
Generator shall take immediate steps to comply with such notice
(unless EGAT subsequently notifies the Generator in writing that
the Generator may discontinue such compliance).
3.2.4 If changes to the Grid Code result in increases or decreases in
costs or revenues to the Generator, the provisions of Sections
3.2.5 and 17 shall apply and EGAT shall continue to make
Availability Payments to the Generator in accordance with Schedule
2 without deductions due to the Grid Code's effect on the
Facility's operations during the time period required for the
Generator to adjust the Facility or its operation to comply with
any such changes to the Grid Code.
3.2.5 The Generator shall provide EGAT with prompt written notice
describing in reasonable detail any circumstances in which actions
the Generator is required to take to comply with a change in the
Grid Code will prevent the Generator from performing other
obligations under this Agreement. The Generator's inability to
perform such other obligations in such circumstances shall not in
and of itself be a breach of this Agreement.
3.3 SALE AND PURCHASE OF ELECTRICITY
3.3.1 The Generator shall deliver to the Connection Point and sell to
EGAT, and EGAT shall purchase from the Generator, on the terms and
conditions of this Agreement, the Net Electrical Generation. The
Net Electrical Generation delivered to EGAT shall be measured at
the Metering Point using the Primary Metering Equipment. If the
Primary Metering Equipment is inaccurate, otherwise defective, or
being tested pursuant to Section 2.4, the measurements recorded by
the Back-Up Metering Equipment shall be used to measure the Net
Electrical Generation.
3.3.2 The Generator shall not deliver any electricity generated by the
Facility to any third party during the Term or any extension of the
Term made in accordance with this Agreement.
Page 27
3.4 PROVISION OF STANDBY SERVICE
To the extent permitted by law, EGAT shall offer the Generator standby
electrical service at the applicable standby rate.
3.5 DISPATCH INSTRUCTIONS
The Generator shall operate the Facility as a fully dispatchable facility.
Subject to the terms and conditions of this Agreement, EGAT shall have the
sole right and discretion to schedule and Dispatch the generation of
electricity from the Facility and the delivery thereof into the EGAT
System, provided that EGAT shall Dispatch the Facility in a manner that is
consistent with:
(a) the principle of merit order Dispatch, subject to the needs of the
EGAT System;
(b) the Grid Code;
(c) Prudent Utility Practices; and
(d) all applicable Laws, regulations and permits.
Except in Emergency Conditions, EGAT shall only issue Dispatch Instructions
that are in accordance with the Generator's declared Availability and
Declared Operating Characteristics of each Unit as notified by the
Generator from time to time. The Generator may but shall not be obliged to
comply with any Dispatch Instruction that would require the Generator to
operate either Unit beyond its declared Availability or Declared Operating
Characteristics at the relevant time unless such Dispatch Instruction is
stated to be issued under Emergency Conditions. In Emergency Conditions
the Generator shall not be required to operate either Unit beyond its
Design Limits or in any manner that would be inconsistent with Prudent
Utility Practices.
3.6 OPERATION AND MAINTENANCE (O&M) REPORTS
At least once in each calendar quarter, the Generator shall submit to EGAT
a report from the O&M operator containing the information set out in
Schedule 22. For so long as the Financing Documents remain effective, EGAT
shall be provided with complete copies of all O&M reports provided to
Financing Parties by the Generator or the O&M operator.
4. DELIVERY OF ELECTRICITY
4.1 QUALITY OF SUPPLY
If at any time the supply of electricity from a Unit does not comply as to
its electrical characteristics with the applicable requirements of the Grid
Code or this Agreement as a result of the breach by the Generator of any
such requirements:
(a) the Generator shall take the steps necessary pursuant to Prudent
Utility Practices to remedy such non-compliance as soon as possible;
and
(b) the Unit shall be deemed to be not Available to the extent of such non-
compliance.
Page 28
4.2 TITLE AND RISK OF LOSS
Title to and risk of loss of any electricity generated by the Facility and
delivered to EGAT in accordance with this Agreement shall pass to EGAT at
the Connection Point.
EGAT shall bear the cost of transmission losses incurred on the EGAT side
of the Metering Point in the transmission of electricity sold to EGAT,
except as attributable to diversion or theft before the Connection Point.
4.3 FAILURE OF THE SYSTEM
The calculation of Availability Payments under Schedule 2 shall not include
any deductions for:
(a) any failure, restriction or outage of transmission facilities on the
EGAT side of the Connection Point;
(b) any action which the Generator, in accordance with the Grid Code, is
obliged or entitled to take due to any frequency excursion on the EGAT
System outside the frequency ranges and time limitations set out in
Paragraph 4.1 of Schedule 1; or
(c) any shedding of the Net Electrical Generation of a Unit instructed by
EGAT.
5. AVAILABILITY PAYMENTS
5.1 CALCULATION OF AVAILABILITY PAYMENTS
Commencing from the Commercial Operation Date of the First Unit, the
Generator shall be entitled to receive from EGAT Availability Payments
calculated in accordance with the provisions of Schedule 2.
5.2 CONFIRMATION AND PAYMENT OF AVAILABILITY PAYMENTS
The Actual Availability and the Operating Characteristics of the Units in
each Settlement Period shall be confirmed in a Final Confirmation Statement
issued in accordance with Section 18. Amounts calculated pursuant to
Schedule 2 shall be payable in accordance with Section 19.
5.3 NOTICES OF AVAILABILITY AND DECLARED OPERATING CHARACTERISTICS
5.3.1 The Generator shall keep EGAT advised of the Availability and
Operating Characteristics of the Units by issuing Availability
Notices and Outage Notices in accordance with the Grid Code.
5.3.2 Any Availability Notice or Outage Notice may be given by telephone
in accordance with the Grid Code. The Notice shall be confirmed by
facsimile as soon as possible thereafter and in any event shall be
sent to EGAT within two hours. Where a facsimile is so sent by way
of confirmation it shall state clearly that it is in confirmation
of a Notice already given by telephone and must state the exact
time at which the Notice was given by telephone.
5.3.3 If, following the occurrence of an event of the type specified in
Paragraph 3.4 of Schedule 2, EGAT wishes to issue a Post Event
Notice, it shall deliver a copy of the Post Event Notice to the
Generator as soon as reasonably practicable but not
Page 29
later than 5 p.m. on the fifth (5th) Business Day after the day on
which the relevant event occurred.
5.3.4 A Post Event Notice shall specify:
(a) the Settlement Period during which the relevant event occurred;
and
(b) the matters or values which EGAT intends to re-declare as a
result of the relevant event.
5.3.5 If the Generator considers that a Post Event Notice was not validly
issued in accordance with this Agreement, it shall notify EGAT,
within seventy-two (72) hours after receipt of the written Post
Event Notice or confirmation thereof, of the grounds for its
objection. If EGAT and the Generator are unable to resolve the
Generator's objection within fourteen (14) days of the date of such
objection, the matter shall be referred to an Expert for
determination in accordance with Section 15. If the Generator does
not notify EGAT of its objection within such seventy-two (72) hour
period, the Post Event Notice shall be deemed accepted by the
Generator.
6. ENERGY PAYMENTS
6.1 ENTITLEMENT TO AND CALCULATION OF ENERGY PAYMENTS
Commencing on the Commercial Operation Date of the First Unit, the
Generator shall be entitled to receive from EGAT, for each Settlement
Period, the Energy Payments for electrical energy generated from the
Facility in response to Dispatch Instructions as measured and calculated in
Schedule 3. The Generator shall not be entitled to receive an Energy
Payment calculated in accordance with Schedule 3 for either (i) operations
carried out without a Dispatch Instruction, or (ii) any operation or part
thereof requested by EGAT's Control Center but not carried out by the
Generator.
6.2 CONFIRMATION AND PAYMENT OF ENERGY PAYMENTS
The operations of the Facility in each Settlement Period shall be reflected
in a Final Confirmation Statement issued in accordance with Section 18.
The Energy Payments due to the Generator pursuant to this Section 6 shall
be payable in accordance with Section 19.1.
7. MINIMUM TAKE
If the Generator is required to take or transport a minimum quantity of
Fuel by the Fuel Purchase Agreement or the Fuel Transportation Agreement,
and provided that the terms of such agreements have been approved by EGAT
in accordance with Sections 9.1 and 9.2, EGAT shall share the costs (the
MINIMUM TAKE LIABILITY) incurred by the Generator after the Commercial
Operation Date of the Second Unit with respect to a failure to take or
transport the minimum quantity of Fuel, as calculated under the provisions
of the Fuel Purchase Agreement and Fuel Transportation Agreement.
EGAT shall not share the Minimum Take Liability if such a failure (i)
occurs before the Commercial Operation Date of the Second Unit, or (ii) is
due to any causes other than Dispatch Instructions by EGAT, Force Majeure
affecting EGAT or Governmental Force Majeure.
Page 30
The method of sharing shall be on the basis of the following formula:
EA - Expected Unit Availability
EA = CAH for each Contract Year/8760
For two units, EA = (CAH//1// + CAH//2//) / (8760 x 2)
AA - Actual Availability
AA = (Sigma)AAH/8760
(Sigma)AAH = Equivalent Achieved Available Hours for each Contract Year
For two units, AA = ((Sigma)AAH//1// + (Sigma)AAH//2//)/(8760 x 2)
ACF - Annual Capacity Factor
ACF = MWh generated during Contract Year
----------------------------------
Contracted Capacity (CC) x 8760
For two units, ACF = (ACF//1// + ACF//2//) /2
MACF - Minimum Annual Capacity Factor below which the Minimum Fuel
Purchase Obligation applies = 0.60
If ACF is greater than or equal to MACF, then Minimum Take Liability does not apply.
If ACF is less than MACF, the Minimum Take Liability applies, with the Generator's Share and
EGAT's Share given by the following:
EGAT's Share = 1 - EA - AA
-------
EA - MACF
Generator's Share = EA - AA
-------
EA - MACF
The preceding formula allocates the Minimum Take Liability between EGAT and
the Generator within the following boundaries:
(a) If AA is greater than or equal to EA, EGAT shall bear one hundred
percent (100%) of the Minimum Take Liability, and
(b) If AA is less than or equal to the MACF, the Generator shall bear one
hundred percent (100%) of the Minimum Take Liability.
8. ENVIRONMENTAL QUALITY REQUIREMENTS
8.1 The Generator shall comply with or exceed the standards set out in
Schedule 8 and all applicable environmental Laws.
8.2 If, subsequent to the Execution Date, the Generator is required by a
Change-in-Law to meet environmental standards which are more stringent than
those set out in Schedule 8,
Page 31
the Generator may submit to EGAT a certificate setting out the details of
increased costs resulting from such change, in accordance with the
provisions of Section 17. Such a certificate shall include or be
accompanied by sufficient technical, environmental, and financial
information and data to demonstrate that the least-cost option consistent
with Prudent Utility Practices to meet or exceed the environmental Law has
been selected. EGAT and the Generator shall promptly determine, in good
faith, any necessary adjustments in accordance with Section 17.
8.3 The Generator shall establish environmental management systems and
facilities to ensure that the applicable environmental Laws and the
standards set out in Schedule 8 are complied with or exceeded. Unless
otherwise directed by the relevant Governmental Authority, the Generator
shall install and operate a suitable continuous emission and ambient air
monitoring system including at least four monitoring stations at
appropriate locations within a ten (10) kilometer radial distance from the
Facility. The Generator shall also install and operate on-line recorders
at the Facility and, unless otherwise directed, in the offices of the
relevant Governmental Authority.
8.4 The Generator shall provide an annual report on all relevant aspects
of the Generator's environmental facilities, activities and performance no
later than thirty (30) days following each Contract Year. The annual
report on environmental performance shall contain a statement of assurances
to the effect that all applicable environmental Laws have been complied
with or, where that is not the case, shall contain details of any failure
to comply with such environmental Laws and the actions instituted to
prevent such failures to recur.
9. FUEL SUPPLY
9.1 FUEL SUPPLY OBLIGATIONS
9.1.1 The Generator shall ensure that the Facility has sufficient
quantities of Fuel to enable each Unit to operate at eighty-five
percent (85%) of its Contracted Capacity on an annual basis from
its Commercial Operation Date until the last day of the Term.
9.1.2 The Generator shall not enter into a Fuel Purchase Agreement or
Fuel Transportation Agreement unless EGAT (i) has reviewed and
approved the terms and conditions thereof in accordance with
Section 9.1.3, or (ii) has been deemed to have so reviewed and
approved the terms and conditions thereof in accordance with
Section 9.1.4.
9.1.3 The Generator shall negotiate a Fuel Purchase Agreement and Fuel
Transportation Agreement which satisfy the principles set out in
Schedule 9. EGAT shall be afforded not less than thirty (30) days
to review the draft Fuel Purchase Agreement and draft Fuel
Transportation Agreement to determine whether or not such draft
agreements satisfy the principles set out in Schedule 9. EGAT shall
notify the Generator of its determination with respect to any such
draft agreement within thirty (30) days of receiving the draft
agreement. If EGAT determines that any such draft agreement does
not satisfy the principles set out in Schedule 9, EGAT shall
provide the Generator with the reasons for such determination and
propose changes EGAT reasonably deems necessary for the draft
agreement to satisfy such principles.
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9.1.4 EGAT shall be deemed to have completed its review and approved the
draft Fuel Purchase Agreement or draft Fuel Transportation
Agreement if it does not provide the Generator with a written
determination to the contrary together with the reasons for such
determination and EGAT's proposed changes within thirty (30) days
after the date of receipt of any such draft agreement.
9.1.5 EGAT's review, approval, objection or rejection of the draft Fuel
Purchase Agreement, Fuel Transportation Agreement or any proposed
amendment, modification or termination of such agreements shall
not:
(a) lessen, diminish or affect in any way the performance by the
Generator of its obligations under this Agreement or the
Project Agreements;
(b) increase, expand or affect in any way the obligations of EGAT
under this Agreement;
(c) affect the application or interpretation of the provisions of
this Agreement or the Project Agreements; or
(d) result in EGAT incurring any liability whatsoever for the
performance or consequences of the performance of the Fuel
Purchase Agreement or Fuel Transportation Agreement.
9.1.6 The Generator shall provide EGAT with copies of the fully executed
Fuel Purchase Agreement and Fuel Transportation Agreement on or
before the date specified in Section 11(g).
9.2 SUBSEQUENT FUEL SUPPLY AGREEMENTS
9.2.1 The Generator shall not terminate, modify or amend the Fuel
Purchase Agreement or Fuel Transportation Agreement without EGAT's
prior written consent. If either such agreement is terminated, the
Generator shall immediately negotiate a new Fuel Purchase Agreement
or a new Fuel Transportation Agreement.
9.2.2 The provisions set out in Section 9.1 shall apply mutatis mutandis
to any (i) new Fuel Purchase Agreement, (ii) new Fuel
Transportation Agreement, and (iii) documents relating to any
alternative Fuel arrangements made pursuant to Section 9.3.1.
9.3 FUEL STOCK
9.3.1 The Generator shall maintain at its expense on the Site at all
times a Fuel Stock sufficient to meet all of the Generator's Fuel
needs for a period of at least thirty (30) days in the event that
there is an interruption in the Generator's Fuel supply. In
determining whether the quantity of such Fuel Stock is sufficient,
the Generator shall take into account, among other things, the
maximum Fuel consumption rate of the Facility and the time required
to accomplish necessary replenishment.
9.3.2 The Generator shall provide EGAT with any information reasonably
requested by EGAT from time to time regarding the Fuel Stock and
shall also keep EGAT
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advised from time to time of any material modifications to its Fuel
Stock arrangements.
9.3.3 The Generator shall not be entitled to claim Force Majeure under
Section 14 for any interruption of the supply of Fuel to the
Facility until such interruption due to Force Majeure has continued
for a period of sixty (60) days from the date the interruption
occurred.
10. CRITICAL DATES AND DURATION OF AGREEMENT
10.1 INITIAL TERM
The Term of this Agreement shall begin on the Execution Date and shall
continue for a period of twenty-five (25) years from the Commercial
Operation Date of the Second Unit, unless otherwise extended or terminated
in accordance with the provisions of this Agreement.
10.2 SURVIVAL OF RIGHTS ON TERMINATION
The expiration or termination of this Agreement shall not affect any rights
or obligations which may have accrued prior to or in connection with such
expiration or termination, and shall not affect continuing obligations of
each of the Parties under this Agreement or any other agreement between the
Parties which are expressed to continue after such expiration or
termination.
10.3 EXTENSION OF AGREEMENT
The Term may be extended upon terms and conditions mutually satisfactory to
the Parties.
10.4 CRITICAL DATES
Scheduled Financial Close Date: 30 April 1999
Scheduled Construction Commencement Date: 1 May 1999
Scheduled NTF Energizing Date: 1 January 2001
Scheduled Energizing Date: 1 February 2001
Earliest Commercial Operation Date of the First Unit: 1 July 2001
Earliest Commercial Operation Date of the Second Unit: 1 January 2002
Scheduled Commercial Operation Date for the First Unit: 1 October 2001
Scheduled Commercial Operation Date for the Second Unit: 1 April 2002
10.5 EXTENSION OF CRITICAL DATES AND TERM
10.5.1 Each of the dates set out in Section 10.4 and the milestone dates
set out in Section 11 shall be extended by one day for each day
that a Force Majeure or Governmental Force Majeure preventing the
achievement of such date has occurred and is continuing.
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10.5.2 Each of the dates set out in Section 10.4 and the milestone dates
set out in Section 11 shall be extended by one day for each day
that the failure to achieve such date is due solely to the actions
or omissions of EGAT.
10.5.3 The Term of this Agreement shall be extended by one day for each
day of Force Majeure or Governmental Force Majeure occurring after
the Commercial Operation Date of the First Unit.
10.5.4 Failure to meet any of the critical dates set out in Section 10.4,
unless otherwise specifically stated in Section 12.2.1, shall not
be construed as a breach or default under this Agreement.
11. CONTRACTED MILESTONES
The Generator shall comply with the following milestones schedule in
connection with the development and construction of the Facility:
(a) EGAT shall have received from the Generator all drawings, reports and
certificates required under Sections 2.3.2, 2.3.3 and 2.8.3 with regard
to the design, construction and completion of the Facility on or before
the dates such materials are due thereunder;
(b) within fourteen (14) months after the Execution Date, EGAT shall have
received from the Generator evidence satisfactory to EGAT demonstrating
that the Generator has obtained all applicable Governmental Approvals,
including those related to air quality, easements and rights of way,
water use and discharge, solid waste and hazardous waste disposal
required for the construction, operation, and maintenance of the
Facility in accordance with the provisions of this Agreement, provided
that if any such Governmental Approval has not been obtained by such
date, the Generator shall provide to EGAT evidence demonstrating that
(i) such Governmental Approval could not be applied for by such date
other than due to an act or omission of the Generator, and (ii) the
Generator can reasonably be expected to obtain such Governmental
Approval before the date it is required to be obtained;
(c) within fourteen (14) months after the Execution Date, EGAT shall have
received from the Generator evidence acceptable to EGAT that the
Generator has acquired all necessary easements, rights-of-way and
authorizations needed to construct the Facility;
(d) within fourteen (14) months after the Execution Date, EGAT shall have
received from the Generator extracts or other evidence satisfactory to
EGAT demonstrating that contracts for the design and construction of
the Facility have been executed;
(e) within fourteen (14) months after the Execution Date, EGAT shall have
received from the Generator extracts or other evidence satisfactory to
EGAT that contracts for the procurement of major equipment have been
executed;
(f) within fourteen (14) months after the Execution Date, EGAT shall have
received from the Generator copies of the certificates of insurance
coverage, or insurance policies required;
Page 35
(f) EGAT fails to comply with or operate in conformity with any
material obligation of this Agreement.
12.1.2 In addition to any other remedy available to it, the Generator
shall be entitled to immediately terminate this Agreement by
written notice to EGAT for Events of Default by EGAT pursuant to
subsections (a) (following the thirty (30) day period specified in
subsection (a)), (b), (c), (d) and (e) of Section 12.1.1.
In the case of Section 12.1.1(f), the Generator shall give written
notice describing such Event of Default and EGAT shall be given
sixty (60) days from receipt of such notice to cure the default. If
the default cannot be cured within sixty (60) days with the
exercise of reasonable efforts, EGAT shall have an additional
period of time of one hundred and eighty (180) days in which to
cure the default, provided always that EGAT shall, throughout such
additional period, exercise reasonable, continuous efforts to cure
the default and continue to perform all its other obligations under
this Agreement during such period of cure. The Generator may (but
shall have no obligation to) grant any additional period of time
within which to cure any default. If EGAT fails to cure the default
within the relevant prescribed period, then the Generator may, in
addition to any other rights and remedies available to it,
immediately terminate this Agreement and consider EGAT in material
breach of its obligations under this Agreement.
12.1.3 After any termination of this Agreement, the Generator may exercise
any rights or remedies it has at law, including seeking monetary
compensation for damages, injunctive relief or specific
performance.
12.2 TERMINATION BY EGAT
12.2.1 Each of the following events shall be considered an EVENT OF
DEFAULT with respect to the Generator:
(a) the Generator defaults in the payment of any amount due and
payable under this Agreement and such default continues
unremedied for a period of thirty (30) days after the date on
which EGAT gives notice of the default to the Generator;
(b) damage to the Facility (excluding any damage caused by Force
Majeure) renders it substantially incapable of generating
electricity, and the Parties agree (or in the absence of such
agreement an Expert determines in accordance with Section 15)
that it is unlikely the Facility can be restored within thirty
(30) months from the date the damage occurred to a condition
such that (i) the Dependable Contracted Capacity established
for each Unit immediately following restoration would be at
least ninety percent (90%) of its Contracted Capacity, and (ii)
the Availability of each Unit over the six (6) months
immediately following restoration would exceed seventy-five
percent (75%) of its Actual Availability over the six (6)
months immediately preceding the date such damage occurred;
(c) damage to the Facility (by Force Majeure or any other cause)
rendered it substantially incapable of generating electricity,
and the Parties agreed (or in the absence of such agreement an
Expert determined in accordance with Section 15) that the
Facility could be restored to the condition
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described in Section 12.2.1(b) within thirty (30) months or
less from the date the damage occurred, and the Generator fails
to complete such restoration within thirty (30) months from the
date the damage occurred or within any lesser period agreed by
the Parties or determined by an Expert;
(d) the Generator is dissolved or liquidated, other than voluntary
dissolution or liquidation as part of a reorganization or
reincorporation;
(e) the Generator makes a general assignment of this Agreement or
any of its rights hereunder or of its interest in the Facility
for the benefit of its creditors;
(f) the Generator enters into voluntary insolvency proceedings or
is adjudicated bankrupt under any insolvency law as debtor;
(g) the Generator fails to comply with or operate in conformity
with any material obligation of this Agreement;
(h) the Commercial Operation Date of either Unit fails to occur by
its Scheduled Commercial Operation Date;
(i) the Generator abandons the engineering, design, construction or
operation and maintenance of the Facility for forty-five (45)
days or longer and, after receiving notice from EGAT, fails (i)
to indicate within ten (10) days its intent to resume such
activities within a period of time agreeable to EGAT, and (ii)
to resume such activities within such agreed period of time;
(j) there is a transfer of an interest in the Generator which falls
outside the permitted transfers set out in Section 24 and
EGAT's prior written approval of such transfer, to the extent
required by Section 24, has not been given, and such default
continues unremedied for a period of thirty (30) days from the
date on which such transfer occurred;
(k) without the prior written consent of EGAT, the Generator amends
the Fuel Purchase Agreement or Fuel Transportation Agreement,
or upon termination of the Fuel Purchase Agreement or Fuel
Transportation Agreement enters into a new Fuel Purchase
Agreement or Fuel Transportation Agreement, and the terms of
such amendment or new Fuel Purchase Agreement or Fuel
Transportation Agreement are such that the Generator's ability
to satisfy its obligations under this Agreement or EGAT's
rights under this Agreement are adversely affected;
(l) during any period of thirty-six (36) consecutive months, the
Actual Availability of the Units falls below sixty percent
(60%) of the Actual Availability that would be achieved were
both Units operated at their Contracted Capacity for all of the
hours in such thirty-six (36) month period, provided that the
accrual of such thirty-six (36) month period shall exclude
periods during which:
(i) it is not lawful for the Generator to operate the
Facility,
Page 38
(ii) the Generator is affected by Force Majeure or
Governmental Force Majeure, or
(iii) the Facility is being restored in accordance with Section
14.7; or
(m) the Generator fails to achieve Financial Close by the Scheduled
Financial Close Date or by such date fails to provide EGAT with
copies of written commitments from the Sponsors (or any of
their Affiliates) to provide capital contributions to the
Generator in amounts sufficient to enable the Generator to fund
development, construction and completion of the Facility.
12.2.2 In addition to any other remedy available to it, EGAT shall be
entitled to immediately terminate this Agreement by written notice
to the Generator for Events of Default by the Generator pursuant to
subsections (a) (following thirty (30) day period specified in
subsection (a)), (b), (d), (e), (f), (i), (j) (following the thirty
(30) day period specified in subsection (j)), (l) and (m) of
Section 12.2.1.
In the case of subsections (c), (g), (h) and (k) of Section 12.2.1,
EGAT shall give written notice describing such Event of Default and
the Generator shall be given sixty (60) days from receipt of such
notice to cure the default. If the default cannot be cured within
sixty (60) days with the exercise of reasonable efforts, the
Generator shall have an additional period of time of one hundred
and eighty (180) days in which to cure the default, provided always
that the Generator shall, throughout such additional period,
exercise reasonable, continuous efforts to cure the default and
continue to perform all of its other obligations under this
Agreement during such period of cure. EGAT may (but shall have no
obligation to) grant any additional period of time within which to
cure any default. If the Generator fails to cure the default within
the relevant prescribed period or any additional period granted by
EGAT at its sole discretion, then EGAT may, in addition to any
other rights and remedies available to it, immediately terminate
this Agreement and consider the Generator in material breach of its
obligations under this Agreement.
12.2.3 After any termination of this Agreement, EGAT may exercise any
rights or remedies it has at law, including seeking monetary
compensation for damages, injunctive relief or specific
performance.
12.3 STEP-IN RIGHTS
12.3.1 EGAT shall have the right, but under no circumstances the
obligation, to assume operational responsibility for the Facility
(in the capacity of an operator only) in the place and instead of
the Generator in order to continue operation of the Facility or
complete any necessary repairs so as to assure uninterrupted
availability of electrical energy from the Facility.
Such step-in rights shall arise upon the occurrence and continuance
of an Event of Default with respect to the Generator which could
reasonably be expected to materially adversely affect the
Generator's ability to operate and maintain the Facility in
accordance with this Agreement.
Page 39
EGAT shall not exercise such step-in rights until any applicable
cure period specified in Section 12.2.2 has expired, provided that
EGAT may step-in at any earlier time at the request of the
Financing Parties if a right for the Financing Parties to step-in
has arisen under the Financing Documents. For so long as the
Financing Documents remain in effect, EGAT shall not exercise step-
in rights hereunder (i) without first obtaining the consent of the
Financing Parties, or (ii) if operation of the Facility has been
assumed by any Financing Party or any approved assignee or designee
of the Financing Parties.
The Generator shall use its reasonable efforts to cause the
Financing Parties specifically to acknowledge such step-in rights
of EGAT in the Financing Documents.
EGAT may require issues and conditions in addition to those
addressed in this Section 12.3.1 to be clarified to EGAT's
satisfaction before EGAT exercises the step-in rights provided
hereunder. In particular, the Generator shall:
(a) assign to EGAT or its designated agent or contractor, within
two (2) Business Days of the event giving rise to EGAT's
rights, the Generator's rights in and to all agreements
necessary to operate the Facility; and
(b) take all steps necessary to permit EGAT to exercise as
operator of the Facility the Generator's rights under all
permissions and licenses to the extent such rights are
necessary for EGAT to operate the Facility and provide EGAT
with access to all design manuals, construction drawings and
other documentation required to operate the Facility.
12.3.2 During any period in which EGAT exercises its right to assume the
operations of the Facility pursuant to this Section 12.3, EGAT
shall continue making Availability Payments and Energy Payments to
the Generator in accordance with the terms of this Agreement. In no
event shall EGAT's decision to operate the Facility be deemed to be
a transfer of title or a transfer of the Generator's obligations as
owner thereof, but EGAT shall be deemed to be only the operator of
the Facility.
During any period when EGAT shall be operating the Facility, EGAT
shall:
(a) be entitled to reasonable remuneration for EGAT's services as
an operator charged at then international rates of remuneration
for comparable services; and
(b) meet any payments due from the Generator, including payments
for fuel, maintenance, repairs, insurance, taxes and other
operating costs of the Facility, together with all regularly
scheduled payments under the Financing Documents of principal,
interest, fees, indemnities, reserves, and other amounts owing
(in each case pro-rated for the amount attributable to such
period), but only to the extent that the Generator is unable to
meet any such payments.
The Parties shall cooperate with each other and execute and deliver
such documents as may be necessary or desirable to accomplish the
foregoing. The remuneration and payments referred to in subsections
(a) and (b) of this Section 12.3.2 which become payable during any
such period shall be regarded as funds
Page 40
advanced by EGAT to the Generator. EGAT shall be entitled to
payment of such amounts in full and with interest calculated at the
Default Rate from the date such payment is due. EGAT shall obtain
such payment by deduction from Availability Payments and Energy
Payments due to the Generator including, where such deduction is
insufficient to repay EGAT fully within the step-in period, the
continuation of such deduction after the end of such step-in
period, provided that such amounts shall be subordinated to amounts
owed to the Financing Parties.
12.3.3 During any period when EGAT is operating the Facility, EGAT shall
exercise its reasonable efforts to produce and deliver electrical
energy to the EGAT System, subject to the Facility being operable
at the time of EGAT's takeover or later being made operable by
repairs or otherwise. Throughout such period of time, EGAT shall
exercise due care in operating and maintaining the Facility in
accordance with Prudent Utility Practices. EGAT shall have no more
liability to the Generator than would a third party operation and
maintenance contractor with respect to the operation and
maintenance of the Facility by EGAT during the exercise of such
step-in rights hereunder. For the avoidance of doubt, such
liability shall not include any liability for failure to provide
Availability.
12.3.4 EGAT shall have the right to discontinue making payments under
Section 12.3.2 and to terminate this Agreement in accordance with
Section 12.2.2 if at any time EGAT reasonably determines that the
Event of Default leading to such exercise by EGAT of its step-in
rights cannot be cured, or that the Generator is unlikely to repay,
or to be able to repay, the funds advanced by EGAT under Section
12.3.2.
EGAT shall also have the right on fifteen (15) days' prior written
notice to the Generator to return the operational responsibility
for the Facility to the Generator, provided that EGAT shall return
the Facility to the Generator in a condition no worse than that
immediately prior to the assumption of the operational
responsibility for the Facility by EGAT, ordinary wear and tear
excepted.
Notwithstanding the foregoing, EGAT shall not be responsible for or
have any liability resulting from any conditions of the Facility or
at the Site that existed prior to EGAT's exercise of its step-in
rights.
12.3.5 The operation of the Facility by EGAT shall not relieve EGAT from
its obligations to perform under this Agreement. The failure by
EGAT to meet its obligations as a responsible operator of the
Facility under Section 12.3.3 shall not give rise to an Event of
Default with respect to the Generator for which EGAT shall have the
right to exercise remedies under Section 12.2.3. For the avoidance
of doubt, notwithstanding the provisions of this Section 12.3.5,
EGAT shall retain all those rights provided under Section 12.3.4.
12.3.6 Upon the curing of the Event of Default which has led to the
exercise by EGAT of its step-in rights, EGAT shall return the
operation of the Facility to the Generator with reasonable
promptness.
Page 41
12.4 OTHER RIGHTS TO TERMINATE
Without prejudice to any other remedy to which either Party may be entitled
for breach of this Agreement, the Parties agree that Sections 12, 14.6 and
14.7 state the only circumstances in which either Party may unilaterally
terminate this Agreement.
13. SECURITIES AND LIQUIDATED DAMAGES
13.1 ESTABLISHMENT OF DEVELOPMENT SECURITY
On the Execution Date the Generator shall provide to EGAT the Development
Security in the form of a direct-pay letter of credit or a letter of
guarantee or a cash escrow account acceptable to EGAT in an amount equal to
five hundred (500) Baht per kW of the sum of the Contracted Capacities of
the Units in order to secure the Generator's performance of its obligations
under this Agreement. The Generator shall maintain the Development
Security until the Commercial Operation Date of the Second Unit. The
Development Security shall be obtained from one or more Thai banks which
are listed in Schedule 21 or which satisfy the credit standards set out
below.
If the Generator provides the Development Security in the form of a letter
of credit, the letter of credit shall be issued either (i) for a term not
to expire before the Commercial Operation Date of the Second Unit, or (ii)
on the condition that such letter of credit expressly provides to EGAT the
right to draw down the amount of the letter of credit prior to termination
of the letter of credit, if it has not been extended for any additional
period of time that may be required to cover the period through the
Commercial Operation Date of the Second Unit. If the Generator provides
the Development Security in the form of a letter of guarantee, the
guarantee shall be substantially in the form set out in Schedule 12.
EGAT will appraise on a yearly basis the value of all non-cash securities
provided as the Development Security. If the credit rating of any Thai
bank from which the Generator has obtained the Development Security falls
below BBB+ as measured by Standard and Poor's Ratings Group, Baal as
measured by ▇▇▇▇▇'▇ Investors Services or AA as measured by the Thai Rating
Information Services, then EGAT may at its sole discretion require the
Generator to post additional or replacement security from a Thai bank with
a rating not less than those stated above in order to compensate for the
change in value of the Development Security.
If there is a failure to comply with this provision, EGAT may terminate
this Agreement pursuant to Sections 12.2.1(g) and 12.2.2.
13.2 EGAT'S RIGHT TO RETAIN DEVELOPMENT SECURITY AS LIQUIDATED DAMAGES
The Generator acknowledges and understands that EGAT has entered into this
Agreement in reliance on and in consideration of the Generator's
representation that the Units will be in operation no later than their
respective Scheduled Commercial Operation Dates, and that EGAT will include
the Units in its various capacity forecasts. The Generator further
acknowledges and understands that in order to meet its obligations to its
retail and wholesale customers as a public utility, EGAT must have adequate
assurance that construction of the Facility is proceeding in a timely
fashion in order to forecast adequately and meet the EGAT System's
capacity needs as well as to avoid incurring production costs higher than
those planned by EGAT.
Page 42
Based on the foregoing, the Generator agrees that EGAT shall have the right
in each instance to retain so much of the Development Security as is set
out below, plus accrued interest thereon, as liquidated damages if any one
or more of the following milestone dates have not been satisfied (unless
any such milestone date has not been met due to Force Majeure or the fault
of EGAT) within the time periods herein established:
(a) One quarter of one percent (0.25%) for each of the detailed
engineering drawings, reports, and certificates that EGAT has not
received from the Generator in accordance with Section 11(a);
provided, however, that the total amount able to be assessed against
the Generator for failure to provide such drawings, reports and
certificates shall not exceed five percent (5%) of the amount of the
Development Security;
(b) Ten percent (10%) if EGAT has not received all required environmental
permits and other Governmental Approvals required to construct the
Facility in accordance with Section 11(b);
(c) Five percent (5%) if EGAT has not received any extracts or other
evidence of the execution of the contracts for the procurement of
major equipment in accordance with Section 11(e);
(d) Five percent (5%) if EGAT has not received the Fuel Purchase Agreement
and the Fuel Transportation Agreement, if any in accordance with
Sections 9.1.3 and 11(g);
(e) Ten percent (10%) if EGAT has not received copies of the principal
Financing Documents in accordance with Section 11(h). For purposes of
this Section 13.2(e), satisfactory copies of the principal Financing
Documents shall consist of binding commitments of the Financing
Parties and equity participants sufficient to fund one hundred percent
(100%) of construction and permanent financing; and
(f) Fifteen percent (15%) if the Generator shall have failed to commence
construction in accordance with Section 11(i).
EGAT shall return the remaining portion of the Development Security
together with all interest accrued thereon, if any, following the payment
of any amounts due to EGAT hereunder to the Generator upon thirty (30) days
after the earlier of (i) satisfaction of the requirements for additional
security in accordance with Section 13.5 after the Commercial Operation
Date of the Second Unit, and (ii) the termination of this Agreement in
accordance with Section 12.1, 12.2, 14.6 or 14.7. Notwithstanding the
foregoing, EGAT shall return to the Generator fifty percent (50%) of that
portion of the Development Security retained by EGAT in accordance with
this Section 13.2 if the Commercial Operation Date of the First Unit occurs
by its Scheduled Commercial Operation Date and fifty percent (50%) of such
portion of the Development Security if the Commercial Operation Date of the
Second Unit occurs by its Scheduled Commercial Operation Date.
If the Commercial Operation Date of either Unit fails to occur by its
Scheduled Commercial Operation Date, in addition to any amounts retained by
EGAT in accordance with this Section due to the Generator's failure to meet
any of the milestones and the Commercial Operation Date of either Unit, the
Generator shall pay liquidated damages to EGAT in accordance with Sections
2.10.3, 2.10.5 and 19.2.
Page 43
13.3 LIQUIDATED DAMAGES FOR CONTRACTED CAPACITY DEFICIENCIES
If the Dependable Contracted Capacity of either Unit on its Commercial
Operation Date is less than ninety-five percent (95%) of its Contracted
Capacity, the Generator shall pay to EGAT on a one-time basis only for such
Unit, a sum equal to four thousand (4,000) Baht per kW for the difference
between such Dependable Contracted Capacity of the Unit and ninety-five
percent (95%) of the Unit's Contracted Capacity as liquidated damages for
the detrimental impact upon EGAT's generation planning. EGAT shall be
entitled to recover the amount of such liquidated damages from the
Development Security, and the Generator shall pay EGAT any amount of such
liquidated damages which exceeds the available amount of the Development
Security in accordance with Section 19.2. Notwithstanding subsequently
established increases in the Dependable Contracted Capacity of the Unit
pursuant to Section 2.11, EGAT shall not be required to refund any portion
of the liquidated damages previously paid to EGAT pursuant to this Section
13.3.
13.4 PAYMENTS FROM THE SECURITY
To the extent EGAT is owed damages as a result of the Generator's breach of
this Agreement (other than for a failure to meet the milestones set out in
Section 13.2 or for a deficiency in the Contracted Capacity of either Unit
under Section 13.3) and EGAT has previously not been compensated therefor,
appropriate amounts of the Development Security shall be retained by EGAT.
The return of the Development Security to the Generator shall not prejudice
the rights of EGAT to claim compensation arising from this Agreement.
13.5 ADDITIONAL SECURITY
13.5.1 As soon as reasonably practicable, but no later than six (6) months
after the Commercial Operation Date of the Second Unit, and before
the return of the Development Security under Section 13.2, the
Generator shall execute in favor of EGAT mortgages over the
buildings, machinery and real property assets comprising the
Facility. The mortgages shall secure the Generator's performance of
its obligations to EGAT under this Agreement up to an amount equal
to one billion (1,000,000,000) Baht and shall be subordinate at all
times to the amounts secured under the mortgages and security
interests granted to the Financing Parties up to the greater of:
(a) the sum of:
(i) all amounts secured under or contemplated to be secured
under the Financing Documents at Financial Close
(including amounts payable to providers of interest rate
swap agreements or other reasonable hedging arrangements
required by the Financing Parties or issuers of letters
of credit in respect of foreign currency exchange
reserve requirements or debt service reserve
requirements, but excluding the amount of any cost
overrun facilities relating to the construction of the
Facility other than the amount of the overrun facilities
that are drawn down upon for (i) capital improvements
which are required by Changes-in-Law, changes to the
Grid Code, Force Majeure or Prudent Utility Practices,
(ii) increased costs resulting from or attributable to
Page 44
EGAT's delay or failure in performing its obligations
under this Agreement, or (iii) any other uses, provided
that in the case of this subclause (iii) the amount of
equity committed or infused by or on behalf of the
Generator into the Project is greater than the sum of
(i), (ii) and (iii) by one billion (1,000,000,000)
Baht), plus
(ii) the amount of any additional financing obtained by the
Generator after the Financial Close for additional
working capital needs or capital improvements which are
required by Changes-in-Law, changes to the Grid Code,
Force Majeure (as approved by EGAT) or Prudent Utility
Practices; or
(b) the fair market value of the Project for the remaining useful
life of the Facility as reasonably determined by the Financing
Parties at the time of any additional financing or refinancing
minus one billion (1,000,000,000) Baht.
13.5.2 If requested by the Generator, EGAT and the Generator shall from
time to time, in connection with any financing or refinancing by
the Generator, execute subordination agreements giving effect to
the arrangements described in Section 13.5.1 and such other
documents as may be requested by the Financing Parties to evidence
the subordination contemplated in Section 13.5.1. EGAT acknowledges
that it shall have no rights to exercise any of its rights under
the mortgages executed in its favor pursuant to Section 13.5.1
during any period in which any Financing Documents are in force and
effect until such time as the Financing Parties have exercised
their mortgage rights to enforce their remedies.
13.5.3 The Generator shall bear its own costs and all reasonable costs
incurred by EGAT in connection with the negotiation and execution
of the mortgage granted to EGAT and, when such is requested by the
Generator, in connection with the subordination agreements,
consents, releases and related documents required by any Financing
Parties from time to time, and all other documents in connection
therewith, and shall pay the mortgage registration fees to register
the mortgage and for re-registrations required in connection with
refinancings or additional financings.
13.5.4 Subject to the continuing observation of the restrictions set out
in Section 13.5.1, the Generator shall be entitled to refinance the
Project after the Commercial Operation Date of the Second Unit. The
Generator shall obtain EGAT's prior written consent for any
refinancing of the Project before the Commercial Operation Date of
the Second Unit. EGAT shall provide such consent if in its judgment
the refinancing will not have a material adverse impact on EGAT's
interests in the completion of the Facility in accordance with the
terms of this Agreement.
In the case of a refinancing, EGAT agrees that the Financing
Parties shall continue to enjoy priority over EGAT with regard to
their respective security interests in the Facility. EGAT further
agrees to execute any consents reasonably requested by the
Financing Parties for subsequent refinancings or financings (or, if
necessary, a release of its mortgage) from time to time in order to
enable any subsequent or additional secured Financing Party to
enjoy the priority contemplated under Section 13.5.1 and the
Generator agrees to re-register the mortgage granted to EGAT, if
applicable.
Page 45
13.6 REASONABLE LIQUIDATED DAMAGES
The Parties acknowledge that where liquidated damages for either the
Generator's or EGAT's failure to perform their respective obligations are
set out in this Section 13 and Section 2, such liquidated damages (i) are
reasonable and appropriate measures of the damages for such delays or such
failures, (ii) do not represent a penalty or consequential damages for
losses sustained by EGAT or the Generator as a result of such failures, and
(iii) shall be the exclusive remedies for the failure to achieve the
milestone obligations set out in Section 11, provided that such liquidated
damages are not intended to compensate either Party for the damage that may
result from termination of this Agreement as a result of the continuation
of such failures.
14. FORCE MAJEURE
14.1 OVERVIEW
14.1.1 For the purposes of this Agreement, Force Majeure shall mean an
event, condition, or circumstance, including and the effects
thereof, beyond the reasonable control and without the fault or
negligence of the Party claiming Force Majeure, which, despite all
reasonable efforts of the Party claiming Force Majeure to prevent
it or mitigate its effects, causes a delay or disruption in the
performance of any obligation imposed hereunder. Subject to the
foregoing, Force Majeure shall include:
(a) unusually severe weather conditions;
(b) epidemic or plague;
(c) acts of war (whether war has been declared or is undeclared),
acts of force by a foreign nation, or embargo;
(d) strike or work stoppage (other than those solely affecting the
Party claiming the same as Force Majeure), riots or acts of
terrorists;
(e) Change-in-Law;
(f) failure (other than a failure due to an act or omission of the
Generator) to obtain or renew any required Governmental
Approval relating to the ownership, construction, financing,
operation or maintenance of the Facility, or the performance
of the obligations under this Agreement;
(g) accident, earthquake, sabotage fire or explosion;
(h) expropriation or compulsory acquisition of the Facility, any
material assets or rights, any shares or other interest of the
Generator, or any other act or omission by any Governmental
Authority (other than (i) lawful actions due to an act or
omission by the Generator or its contractors not in compliance
with Law, or (ii) the enforcement of the terms of this
Agreement or the Project Agreements in accordance with the
dispute resolution procedures contemplated thereunder) which
adversely affects the Generator or any of its rights or the
performance of its obligations under this Agreement or any
Project Agreement relating to the Facility to which the
Generator is a party; and
Page 46
(i) any Force Majeure affecting the performance of any Person that
is a party to any material maintenance, construction, service,
fuel supply or other material contract between the Generator
and such Person relating to the ownership, construction,
operation or maintenance of the Facility.
14.1.2 For purposes of this Agreement, GOVERNMENTAL FORCE MAJEURE shall
mean those events of Force Majeure described in Section 14.1.1(c),
(e), (f) and (h) in which the action or inaction of Governmental
Authorities is the controlling or contributing force which
determines or causes the occurrence of such events or the
continuation of the effects thereof. For the avoidance of doubt,
(i) events of Force Majeure shall not include Governmental Force
Majeure for purposes of Sections 14.4 and 14.6, and (ii) if an
event of Governmental Force Majeure occurs before the privatization
of EGAT and is continuing when EGAT is privatized, the event shall
continue to be treated as Governmental Force Majeure irrespective
of whether the provisions relating to Governmental Force Majeure
have been eliminated pursuant to Section 27.1.
14.1.3 For the avoidance of doubt, mechanical or electrical breakdown or
failure of equipment, machinery or plant owned or operated by
either Party due to the manner in which such equipment, machinery
or plant has been operated or maintained (whether or not by such
Party) shall not itself constitute Force Majeure.
14.1.4 Subject to the limitations set out in this Agreement, if either
Party is rendered unable by reason of a Force Majeure to perform,
wholly or in part, any obligation set out in this Agreement, then
upon such Party giving notice as specified in Section 14.2 and full
particulars of such event, such obligations of such Party shall be
suspended or excused to the extent of such Force Majeure.
14.2 NOTICE OF FORCE MAJEURE AND CONSEQUENCES
The Party claiming the Force Majeure shall as soon as reasonably
practicable following the occurrence of Force Majeure:
(a) notify the other Party of the Force Majeure, identifying the nature of
the event and the duration of its effect which the Party claiming
Force Majeure believes to be reasonably likely;
(b) afford the other Party reasonable access to its facilities for
obtaining further information about the event, including the Facility
or EGAT System, for site inspection;
(c) use, at its own cost, all reasonable efforts to remedy its inability
to perform and to resume full performance hereunder as soon as
practicable;
(d) keep such other Party reasonably apprised of such efforts; and
(e) provide written notice of the resumption of performance hereunder.
The foregoing shall be conditions to the ability of a Party to obtain
relief from its obligations under this Agreement due to Force Majeure.
Page 47
14.3 LIMITATIONS
The Party claiming Force Majeure shall not be entitled to suspend
performance under this Agreement for any greater scope or longer duration
than is required by the Force Majeure or the delay occasioned thereby.
Without otherwise limiting the payment rights and obligations under Section
14.4, during any period of Force Majeure or Governmental Force Majeure,
EGAT shall continue to make Availability Payments in accordance with
Schedule 2 for any Availability provided by the Generator that EGAT remains
capable of Dispatching. Neither Party shall be relieved of its obligations
under this Agreement nor shall any obligations of a Party be suspended
solely because there may be increased costs or other adverse economic
consequences incurred through the performance of such obligations.
Obligations of the Parties that are required to be completely performed
prior to the occurrence of Force Majeure shall not be excused as a result
of such occurrence. The failure or inability of either Party to satisfy a
payment obligation that has arisen under this Agreement shall not be
excused by Force Majeure.
14.4 PAYMENT RIGHTS AND OBLIGATIONS DURING FORCE MAJEURE
14.4.1 If Force Majeure affecting the Generator occurs after the
Commercial Operation Date of either Unit, EGAT shall make
Availability Payments to the Generator only to the extent the Unit
is Available to deliver electrical energy to EGAT.
14.4.2 EGAT shall make Availability Payments from the Scheduled Commercial
Operation Date of either Unit (adjusted as described below) if
Governmental Force Majeure affecting either Party occurs before the
Commercial Operation Date of the Unit and delays the occurrence of
its Commercial Operation Date past its Scheduled Commercial
Operation Date. The amount of each such Availability Payment shall
be calculated using the Contracted Capacity of the Unit.
For the purposes of determining the date such Availability Payments
shall commence, the Scheduled Commercial Operation Date of the Unit
(i) shall be extended by one day for each day by which the
occurrence of the Commercial Operation Date of the Unit is delayed
due to causes attributable to the Generator, but (ii) shall not be
extended pursuant to Section 10.5.1 for such Governmental Force
Majeure. EGAT shall make such Availability Payments until the
earlier of (i) the discontinuation of such Governmental Force
Majeure (including the effects thereof), or (ii) the termination of
this Agreement pursuant to Section 14.6.3.
14.4.3 If Governmental Force Majeure affecting either Party occurs after
the Commercial Operation Date of either Unit, EGAT shall continue
to make Availability Payments to the Generator with respect to the
Unit. Each such Availability Payment shall be:
(a) in an amount equal to the average of the Availability Payments
made to the Generator with respect to the Unit over the period
of six (6) months preceding the Governmental Force Majeure,
excluding periods of Planned Outages or Force Majeure;
(b) if the Governmental Force Majeure occurs less than six months
after the Commercial Operation Date of the Unit, in an amount
equal to the average of Availability Payments made to the
Generator with respect to
Page 48
the Unit over the period from its Commercial Operation Date to
the Governmental Force Majeure, excluding periods of Planned
Outages or Force Majeure; or
(c) if the Governmental Force Majeure occurs before the end of the
first Billing Period after the Commercial Operation Date of
either Unit, in an amount calculated using the Dependable
Contracted Capacity in effect for the Unit on the day before
the Governmental Force Majeure occurred.
EGAT shall make payments in accordance with this Section until the
earlier of (i) discontinuation of such Governmental Force Majeure
(including the effects thereof), or (ii) the termination of this
Agreement pursuant to Section 14.6.4.
14.4.4 If the Commercial Operation Date of the First Unit fails to occur
by its Scheduled Commercial Operation Date due to Force Majeure
affecting the New Main Transmission Line, from the Scheduled
Commercial Operation Date of the Unit (adjusted as described below)
EGAT shall pay the Generator its costs of servicing debt drawn down
and expended by the Generator before or on the date such Force
Majeure occurred and any unavoidable costs the Generator
necessarily or reasonably incurs thereafter. For the purposes of
determining the date such payments shall commence, the Scheduled
Commercial Operation Date of the First Unit (i) shall be extended
by one day for each day by which the occurrence of its Commercial
Operation Date is delayed due to causes attributable to the
Generator, but (ii) shall not be extended pursuant to Section
10.5.1 for Force Majeure affecting the New Main Transmission Line.
If Force Majeure affecting the New Main Transmission Line occurs
after the Commercial Operation Date of the First Unit and before
the Commercial Operation Date of the Second Unit, EGAT shall pay
the Generator the greater of (i) Availability Payments with respect
to the First Unit in amounts determined in accordance with Section
14.4.5(a), (b) or (c), or (ii) the Generator's costs of servicing
debt drawn down and expended before or on the date such Force
Majeure occurred and any unavoidable costs the Generator
necessarily or reasonably incurs thereafter. EGAT shall commence
making such payments on the date such Force Majeure occurs.
EGAT shall make payments pursuant to this Section 14.4.4 until the
earlier of (i) the discontinuation of such Force Majeure (including
the effects thereof), or (ii) the termination of this Agreement
pursuant to Section 14.6.2. If any payments made under this Section
14.4.4 (other than Availability Payments with respect to the First
Unit) include amounts which are applied to reduce the principal of
debt under the Financing Documents, the Parties shall consult each
other in good faith to determine any equitable adjustment to the
Availability Payments required to prevent EGAT from compensating
the Generator a second time after the Commercial Operation Date of
either Unit for the same principal amounts.
14.4.5 If Force Majeure affecting EGAT occurs after the Commercial
Operation Date of the Second Unit, EGAT shall pay the Generator its
costs of servicing debt drawn down and expended by the Generator
before or on the date such Force Majeure occurred and any
unavoidable costs the Generator necessarily or reasonably incurs
after such date. EGAT shall make such payments to the Generator
during any period of Force Majeure which affects EGAT after the
Page 49
Commercial Operation Date of the Second Unit until the aggregate of
all such periods of Force Majeure affecting EGAT equals six (6)
months. Thereafter, EGAT shall make Availability Payments to the
Generator during any period of Force Majeure that affects EGAT.
Such Availability Payments with respect to each Unit shall be:
(a) in an amount equal to the average of the Availability Payments
made to the Generator for the Unit over the period of six (6)
months preceding the Force Majeure, excluding periods of
Planned Outages or Force Majeure;
(b) if the Force Majeure occurred less than six (6) months after
the Commercial Operation Date of the Unit, in an amount equal
to the average of Availability Payments made to the Generator
with respect to the Unit from its Commercial Operation Date to
the date the Force Majeure occurred, excluding periods of
Planned Outages or Force Majeure; or
(c) if the Force Majeure occurs before the end of the first
Billing Period after the Commercial Operation Date of the
Unit, in an amount calculated using the Dependable Contracted
Capacity in effect for the Unit on the day before the Force
Majeure occurred.
EGAT shall make payments in accordance with this Section 14.4.5
until the earlier of (i) discontinuation of the Force Majeure
(including the effects thereof), or (ii) the termination of this
Agreement pursuant to Section 14.6.2.
14.4.6 Beginning on the date that the aggregate of periods of Force
Majeure affecting EGAT reaches six (6) months, EGAT shall pay the
Generator an amount representing the portion of Availability
Payments that were suspended in accordance with Section 14.4.5
during such periods of Force Majeure. Such amount shall be:
(a) the sum of the Availability Payments that would have been paid
pursuant to Section 14.4.5 (adjusted as set out in Section
14.4.7) during such periods of Force Majeure if such periods
of Force Majeure had occurred after preceding periods of Force
Majeure affecting EGAT had reached an aggregate of six (6)
months; less
(b) the sum of all payments made by EGAT to the Generator pursuant
to Section 14.4.5 during such periods of Force Majeure.
EGAT shall pay this amount to the Generator over a period of
twenty-four (24) months in equal monthly instalments added to the
Availability Payments made during such period, provided that (i)
EGAT shall pay such instalments whether or not its obligation to
make Availability Payments is excused in whole or in part during
such twenty-four (24) month period, and (ii) if this Agreement is
terminated before the end of such twenty-four (24) month period,
EGAT shall pay the sum of the unpaid instalments upon termination.
14.4.7 Whenever EGAT makes Availability Payments to the Generator in
accordance with Section 14.4.2, 14.4.3, 14.4.4 or 14.4.5, such
payments shall be:
Page 50
(a) decreased by all costs which, as a result of either Force
Majeure or Governmental Force Majeure, the Generator either
did not incur or reasonably need not have incurred without
materially and adversely affecting the condition of the
Facility or its ability to resume generation of electricity
upon the discontinuation of Force Majeure or Governmental
Force Majeure;
(b) decreased by the proceeds of any business interruption
insurance received by the Generator as a result of the Force
Majeure or Governmental Force Majeure;
(c) decreased by the amount of any Availability Payments made for
Actual Availability pursuant to Section 14.3; and
(d) increased by any additional costs necessarily or reasonably
incurred by the Generator as a result of the Force Majeure or
Governmental Force Majeure.
14.4.8 If the Dependable Contracted Capacity that is established for
either Unit on its Commercial Operation Date is less than its
Contracted Capacity, then any Availability Payments made to the
Generator before the Unit's Commercial Operation Date in accordance
with Section 14.4.2 shall be recalculated using the Dependable
Contracted Capacity established for the Unit on its Commercial
Operation Date. If the Availability Payments made to the Generator
with respect to the Unit before its Commercial Operation Date
exceed the amount reached by the recalculation, EGAT shall be
entitled to deduct an amount equal to the excess from future
payments due to the Generator by EGAT together with interest on
such amount at the Overdraft Rate. Such deductions shall be made
from such future payments pro-rata over the same period of time in
which the excess Availability Payments were made.
14.5 PAYMENTS DURING EXTENSION OF TERM
During any extension of the Term under Section 10.5.3 (or, if pursuant to
Section 2.10.4 or 14.4.2 EGAT has made Availability Payments with respect
to either Unit before its Commercial Operation Date, beginning on the date
in the Term after which the application of Table 1 of Schedule 2 to
determine Availability Payments for the Unit has been completed), EGAT
shall be entitled to receive electrical energy from the Generator by making
payments to the Generator in amounts determined as follows:
(a) Energy Payments calculated in accordance with Schedule 3 and fixed
operation and maintenance costs calculated in accordance with Schedule
2 with respect to each Unit for a period representing the same number
of days for which EGAT made (i) Availability Payments for the Unit
pursuant to Sections 2.10.4, 14.4.2, 14.4.3, 14.4.4 and 14.4.5, or
(ii) payments for the Unit pursuant to Section 14.4.6;
(b) if the aggregate of periods of Force Majeure affecting EGAT during the
Term (before any adjustment pursuant to Section 10.5.3) is less than
six (6) months, EGAT shall make Availability Payments with respect to
each Unit for the same number of days in such extension as the
aggregate of such periods of Force Majeure, provided that (i) such
Availability Payments shall be calculated using the rates set out in
Schedule 2 that would have applied during such periods of Force
Majeure, and (ii) such Availability Payments shall be reduced by
amounts
Page 51
paid by EGAT to the Generator during such periods of Force Majeure
pursuant to Sections 14.3 and 14.4.5; and
(c) Availability Payments to the extent of each Unit's Availability for
any portion of such extension attributable to Force Majeure affecting
the Generator after the Commercial Operation Date of the Second Unit,
provided that (i) such Availability Payments shall be calculated using
the rates set out in Schedule 2 that would have applied during such
periods of Force Majeure, and (ii) such Availability Payments shall be
reduced by the amount of any payments made to the Generator with
respect to the Unit pursuant to Section 14.4.1.
14.6 TERMINATION
14.6.1 Subject to Section 14.7, if Force Majeure affecting the Generator
occurs before or after the Commercial Operation Date of the Second
Unit and continues for a period exceeding one (1) year, either
Party may terminate this Agreement by giving the other Party thirty
(30) days written notice of termination.
14.6.2 If Force Majeure affecting the New Main Transmission Line occurs
before the Commercial Operation Date of the First Unit and
continues for a period of twenty-four (24) months, EGAT may
terminate this Agreement by giving the Generator thirty (30) days
written notice of termination. If any other Force Majeure affecting
EGAT occurs before or after the Commercial Operation Date of the
First Unit, EGAT may terminate this Agreement by giving the
Generator thirty (30) days written notice after such Force Majeure
has continued for twelve (12) months. Upon any termination of this
Agreement in accordance with this Section 14.6.2, EGAT shall
purchase the Generator's right, title and interest in and to the
Facility and all other assets of the Generator for an amount which
shall be:
(a) the aggregate amount outstanding on the date of such purchase
under the Financing Documents, including reasonable
termination costs due under such Financing Documents, and
under any loans from shareholders to the Generator; plus
(b) an amount equal to the sum of all amounts of registered and
paid-up share capital issued by the Generator and any share
premiums received by the Generator; plus
(c) an amount equal to any earnings retained by the Generator
(including statutory reserves); less
(d) the proceeds of any insurance received by the Generator as a
result of such Force Majeure.
14.6.3 Subject to Section 14.7, if Governmental Force Majeure affecting
either Party occurs before the Commercial Operation Date of the
Second Unit and continues for a period exceeding one (1) year,
either Party may terminate this Agreement by giving the other Party
thirty (30) days written notice of termination, whereupon EGAT
shall purchase the Generator's right, title, and interest in and to
the Facility and all other assets of the Generator for an amount
which:
Page 52
(a) if EGAT has elected to terminate this Agreement, shall be the
sum of (i) the purchase price as calculated in Section 14.6.2,
plus (ii) a return on the amount determined in Section
14.6.2(b) at the rate of fifteen percent (15%) per annum,
calculated from the date of the investment in the Generator to
the date of EGAT's purchase hereunder; or
(b) if the Generator has elected to terminate this Agreement,
shall be the purchase price as calculated in Section 14.6.2.
14.6.4 Subject to Section 14.7, if Governmental Force Majeure affecting
either Party occurs after the Commercial Operation Date of the
Second Unit and continues for a period exceeding one (1) year, EGAT
may terminate this Agreement by giving the Generator thirty (30)
days written notice of termination, whereupon EGAT shall purchase
the Generator's right, title, and interest in and to the Facility
and all other assets of the Generator for an amount which shall be
agreed between the Parties, provided that termination of this
Agreement shall not take effect until such amount is agreed. Such
agreed amount shall be an amount which:
(a) is not less than the aggregate amount outstanding under the
Financing Documents on the date of such purchase, including
reasonable termination costs payable under the Financing
Documents and an amount equal to any earnings retained by the
Generator (including statutory reserves); and
(b) takes into account the Term of this Agreement remaining on the
date such amount is agreed, the condition and historical
performance of the Facility, the remaining useful life and the
economic value of the Facility's generating capacity to either
Party over the remainder of its useful life, the depreciated
cost of the Facility on the books of the Generator, the
Generator's achieved return on equity, and the nature of the
Governmental Force Majeure and the ability to cure such
Governmental Force Majeure.
If the Parties are unable to reach agreement on such amount within
sixty (60) days after the date EGAT gives the Generator notice of
termination, the inability to reach agreement on such amount shall
be treated as a dispute and subject to resolution in accordance
with Section 15.
14.7 RECONSTRUCTION
If damage to the Facility by Force Majeure after the Commercial Operation
Date of the First Unit renders the Facility substantially incapable of
generating electricity, the Parties shall determine (or in the absence of
agreement by the Parties an Expert shall determine in accordance with
Section 15) whether within thirty (30) months from the date such damage
occurred, the Facility can be restored to a condition such that (i) the
Dependable Contracted Capacity established for each Unit immediately
following restoration would be at least ninety percent (90%) of its
Contracted Capacity, and (ii) the Availability of each Unit over the six
(6) months immediately following restoration would exceed seventy-five
percent (75%) of its Actual Availability over the six (6) months
immediately preceding the Force Majeure.
If it is determined that the Facility can be restored to such a condition
within thirty (30) months or less from the date such damage occurred, this
Agreement may not be terminated under Section 14.6.1, 14.6.3 or 14.6.4 and
the Generator shall commence
Page 53
restoration of the Facility. Notwithstanding the foregoing, the Generator
shall not be required to commence such restoration and this Agreement may
be terminated immediately by either Party if, within a reasonable period of
time from the date such damage occurred, either (i) the Generator cannot
obtain any approval required by the Financing Parties for such restoration,
or (ii) the Generator cannot arrange any additional funding required for
such restoration on commercially reasonable limited recourse financing
terms.
If it is determined that the Facility cannot be restored to the condition
described above within thirty (30) months from the date such damage to the
Facility occurred, or if the Generator is not required to commence
restoration under circumstances referred to in the preceding paragraph,
this Agreement may be terminated immediately by either Party and the
provisions of Section 14.6.1, 14.6.3 or 14.6.4 shall apply.
15. DISPUTE RESOLUTION
15.1 RESOLUTION
15.1.1 The Parties agree to make a diligent, good faith attempt to resolve
all disputes arising under or in connection with this Agreement in
an equitable manner and in accordance with procedures to be agreed
upon before either Party commences dispute resolution by Experts or
arbitration. This attempt shall involve discussions between
designated representatives of each Party, and then, if such
representatives are unable to resolve the dispute pursuant to this
Section 15.1.1 within ninety (90) days, the Parties shall appoint
an independent Expert or commence an arbitration in accordance with
Section 15.1.2 or 15.2.
15.1.2 If such dispute involves in whole or in part (i) a technical
engineering issue, then the Parties will in good faith attempt to
appoint a suitably experienced and qualified independent
engineering firm reasonably satisfactory to both of them, (ii) a
financial issue, then the Parties will in good faith attempt to
appoint a financial advisor or investment bank reasonably
satisfactory to both of them, or (iii) any other issue with respect
to which referral to an Expert is provided hereunder, then the
Parties will in good faith attempt to appoint an Expert with
appropriate expertise for the subject matter reasonably
satisfactory to both of them, in each case to act in relation to
such dispute and to render a final and binding determination in
respect thereof. Absent fraud or wilful misconduct in respect of an
Expert's determination, the Parties hereby waive any rights to
appeal or review of such determination by any court or tribunal.
The Parties shall share the cost of the Expert equally.
15.2 ARBITRATION
15.2.1 If the dispute involves any type of issue not otherwise addressed
in Section 15.1.2, or if the Parties are unable to agree upon an
acceptable Expert pursuant to Section 15.1.2, or if the Expert does
not render a decision within thirty (30) days after completion of
the hearing of the matter or if the dispute is not resolved by the
Expert within one hundred and fifty (150) days after the referral
to the Expert, then either Party may commence arbitration ten (10)
days after giving notice to the other Party. Nothing herein shall
prevent a Party from commencing arbitration at any time (i) when
the delay required for performance hereunder might materially and
adversely affect such Party's interest, or (ii) when the other
Party fails to fulfill its obligations under this Section 15.
Page 54
15.2.2 The arbitration shall be conducted in accordance with the Rules of
Arbitration and Conciliation of the International Chamber of
Commerce as in effect at the time of the arbitration or as
otherwise agreed upon by the Parties (the RULES).
15.2.3 The arbitral tribunal shall consist of three (3) arbitrators. Each
Party shall appoint one arbitrator with, in the case of a dispute
of a technical nature, knowledge and experience in such technical
matters. The two arbitrators so appointed shall appoint the third
arbitrator who shall serve as the chairman of the arbitral
tribunal. If a Party fails to appoint its arbitrator within a
period of ten (10) days after receiving notice of the arbitration,
or if the two arbitrators appointed cannot agree upon the third
arbitrator within a period of ten (10) days after appointment of
the second arbitrator, then such arbitrator shall be appointed
pursuant to the Rules.
15.2.4 If the Court of Arbitration of the International Chamber of
Commerce is required or requested to appoint an arbitrator, it
shall appoint only a person with experience in international
commercial agreements and, in particular, the implementation and
interpretation of contracts relating to the design, engineering,
construction, operation and maintenance of electrical power
generating facilities (and if the dispute concerns a technical
issue, a person who has knowledge and experience in technical
matters). No arbitrator shall be a present or former employee or
agent of, or consultant or counsel to, either Party or any
Affiliate thereof or any Governmental Authority.
15.2.5 The arbitration shall be conducted in Thailand using the English
language unless the use of the Thai language is agreed upon by the
Parties. All documents or evidence presented at such arbitration in
a language other than in English shall be accompanied by a
certified English translation thereof. The arbitrators shall decide
the dispute by majority of the arbitral tribunal and shall state in
writing the reasons for its decision. Any monetary award of the
arbitral tribunal shall be denominated and payable in Baht.
15.2.6 Any decision or award of an arbitral tribunal appointed pursuant to
Section 15 shall be final and binding upon the Parties. The Parties
hereby waive any rights to appeal or seek review of such a decision
or award by any court or tribunal, excluding any statutory defenses
or rights of appeal in enforcement proceedings under the
Arbitration Act of Thailand (B.E. 2530, or as it may be amended
after the Execution Date) that cannot legally be waived. The
Parties further undertake to carry out without delay the provisions
of any arbitral award or decision, and each agrees that any such
award or decision, may be enforced by the Parties against assets of
the relevant Party wherever they are located and a judgment upon
any arbitration award may be entered by any court or tribunal
having jurisdiction. Subject to Section 21, either Party may
publicize or otherwise disclose to others the contents of any
decision of the arbitral tribunal.
15.2.7 The costs of such arbitration shall be determined and allocated
between the Parties by the arbitral tribunal in its award.
15.2.8 Unless otherwise agreed in writing, the Parties shall continue to
perform their respective obligations under this Agreement during
the pendency of any proceeding by the Parties in accordance with
this Section 15.
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15.2.9 The provisions of Section 15.2 shall survive the termination of
this Agreement until all obligations which are intended to survive
termination have expired.
16. LIMITATION OF LIABILITY
16.1 INDEMNIFICATION
16.1.1 Except as otherwise specifically provided in this Agreement, or
unless the damage or injury arises out of, results from, or is
caused by, the breach of this Agreement by a Party or by the
negligence or misconduct of a Party's own officers, directors,
employees, agents, Affiliates, contractors or subcontractors,
neither Party shall be liable to the other for any claims,
judgments, liabilities, losses, costs, expenses or damages of any
kind or character (including loss of use of property) in connection
with damages or destruction of property or personal injury
(including death) arising out of the performance of the Agreement,
including the design, construction, maintenance or operation of
property, facilities or equipment owned or used by the other Party,
or the use of, misuse of or contact with the electrical energy
delivered or purchased hereunder.
16.1.2 Each Party shall indemnify and hold the other Party, and its
officers, directors, Affiliates, agents, employees, contractors and
subcontractors, harmless from and against any and all claims,
judgments, losses, liabilities, costs, expenses (including
reasonable attorneys' fees) and damages of any nature whatsoever
for personal injury, death or property damage (except workers'
compensation claims) caused by any act or omission of the
indemnifying Party or the indemnifying Party's own officers,
directors, Affiliates, agents, employees, contractors or
subcontractors that arises out of or are in any manner connected
with the performance of this Agreement, except to the extent such
injury, death or damage is attributable to the negligence or
misconduct of, or breach of this Agreement by, the Party or its
officers, directors, Affiliates, agents, employees, contractors or
subcontractors seeking indemnification hereunder.
16.1.3 The Generator shall defend, indemnify and hold EGAT, and its
officers, directors, Affiliates, agents, employees, contractors and
subcontractors, harmless from and against any and all claims,
judgments, liabilities, losses, costs, expenses (including
reasonable attorneys' fees) and damages (i) under every applicable
environmental law or regulation arising out of the condition of the
Site, the Generator's ownership or operation of the Facility, or
the Generator's construction of the New Transmission Facilities,
including the discharge, dispersal, release, storage, treatment,
generation, disposal or escape of pollutants or other toxic or
hazardous substances from the Facility, the contamination of the
soil, air, surface water or groundwater at or around the Site or
any pollution abatement, replacement, removal, or other
decontamination or monitoring obligations with respect thereto, and
(ii) under any Law arising out of the Generator's construction,
testing or commissioning of the New Transmission Facilities, except
to the extent such damages under this Section 16.1.3 are
attributable to the negligence or misconduct of, or breach of this
Agreement by EGAT, its officers, directors, Affiliates, agents
employees, contractors or subcontractors.
16.1.4 EGAT shall defend, indemnify, and hold the Generator, its officers,
directors, Affiliates, agents, employees, contractors, and
subcontractors, harmless from
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and against any and all claims, judgments, liabilities, losses,
costs, expenses (including reasonable attorneys' fees), and damages
under every applicable environmental law or regulation arising out
of the condition of or EGAT's ownership or operation of the New
Main Transmission Line, and the New Transmission Facilities and
EGAT's Connection (after their transfer to EGAT pursuant to Section
2.8.6), including the discharge, dispersal, release, storage,
treatment, generation, disposal, or escape of pollutants or other
toxic or hazardous substances from any of such facilities, the
contamination of the soil, air, surface water or groundwater at or
around any of such facilities or any pollution abatement,
replacement, removal, or other decontamination or monitoring
obligations with respect thereto, except to the extent such damages
are attributable to the negligence or misconduct of, or breach of
this Agreement by the Generator, its officers, directors,
Affiliates, agents, employees, contractors, or subcontractors.
16.1.5 In no case shall EGAT be liable for damage or destruction of
property, facilities or equipment operated by the Generator solely
as a result of EGAT's Dispatch or the Generator's operation of the
Facility, provided such Dispatch by EGAT was in accordance with the
terms of this Agreement and the Grid Code.
16.2 CONSEQUENTIAL DAMAGES
Neither Party shall be liable to the other Party for any indirect,
incidental, consequential or punitive damages as a result of the
performance or non-performance of the obligations imposed pursuant to this
Agreement, including failure to deliver or purchase electrical energy
hereunder, irrespective of the causes thereof, including fault or
negligence. For the avoidance of doubt, (i) neither the Generator's
Minimum Take Liability under the Fuel Purchase Agreement nor reasonable
termination costs under the Financing Documents shall be regarded as
indirect, incidental, consequential or punitive damages, and (ii) the
indemnification provisions set out in Section 16.1 shall not be construed
as giving indemnity against indirect, incidental, consequential or punitive
damages.
17. CHANGE-IN-LAW
17.1 TAX CHANGE ADJUSTMENT
On or before the fifth (5th) Business Day after the close of each quarter
in any calendar year following the Execution Date the Generator shall (i)
determine the amount of any increase or reduction in Taxes (excluding
corporate income or similar taxes imposed on or measured by the overall net
income of, but only to the extent generally applicable to, Persons doing
business in Thailand) paid or payable by the Generator in respect of the
Project for the preceding three Billing Periods resulting from any Change-
in-Law (or the previous three months if such Change-in-Law occurs prior to
the Commercial Operation Date of the First Unit), and (ii) submit to EGAT a
certificate setting forth in detail reasonably satisfactory to EGAT the
basis of and the calculations for such amount of increase or reduction,
including a description of the spare parts purchased by the Generator
during such period if the Generator is seeking compensation under this
Section 17.1 for Taxes paid or payable on such spare parts. EGAT and the
Generator shall promptly determine, in good faith, any necessary
adjustments to the Availability Payments or the Energy Payments to
equitably reflect any such increase or reduction in Taxes with the intent
that the financial position of the Generator shall not be affected in any
material respect by such Change-in-Law, provided that the Generator shall
not be
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entitled to receive interest on any previously paid or incurred cost
except to the extent that the adjustment required under this Section 17.1
shall be delayed due to the negligence of EGAT. Each Party shall cooperate
in good faith with the other Party in connection with any such
determination. Thereafter, the Availability Payments or the Energy
Payments and such other payments (if applicable) shall be adjusted to
reflect such increase or reduction and applied in the formulae set out in
Schedules 2 and 3.
17.2 CHANGE-IN-LAW ADJUSTMENT
17.2.1 If there is a Change-in-Law which requires the Generator to make
any material capital improvement or other material modification to
the Facility in order to comply with any Law, the Generator shall
submit to EGAT a certificate setting forth in detail reasonably
satisfactory to EGAT the costs of such capital improvement or other
modification, including financing costs, if any, related thereto.
EGAT and the Generator shall promptly determine as set out below,
in good faith, any necessary adjustments to the Availability
Payments to equitably compensate the Generator for such costs. Each
Party shall cooperate in good faith with the other Party in
connection with any such determination.
For the purposes of this Section 17.2.1, a material capital
improvement or other material modification to the Facility shall
mean one or more capital improvements or other modifications having
an aggregate cost in excess of twenty million (20,000,000) Baht for
any calendar year. In determining whether such aggregate cost
exceeds twenty million (20,000,000) Baht for any calendar year, the
amount representing the total cost of any capital improvement or
other modification (after any reduction made to such amount
pursuant to Section 17.2.4) shall be deemed to be expended on the
date in the calendar year on which the Change-in-Law becomes
effective. If such aggregate cost exceeds twenty million
(20,000,000) Baht for any calendar year, the Availability Payments
shall be adjusted to reimburse the Generator the portion of such
aggregate cost in excess of twenty million (20,000,000) Baht.
17.2.2 If there is a Change-in-Law (other than in respect of Taxes) which
the Generator believes in good faith will materially increase the
costs or materially decrease the revenues of the Generator in
connection with the financing, construction, operation or
maintenance of the Facility, then the Generator shall submit to
EGAT a certificate setting forth in detail reasonably satisfactory
to EGAT the basis of and the calculations for the amount of such
increase in costs or decrease in revenues. EGAT and the Generator
shall promptly determine, in good faith, any necessary adjustments
to the Availability Payments or the Energy Payments to equitably
reflect such increase in costs or decrease in revenues with the
intent that the financial position of the Generator shall not be
affected by such Change-in-Law. Each Party shall cooperate in good
faith with the other Party in connection with any such
determination. For the purposes of this Section 17.2.2, a material
increase in costs or material decrease in revenues means any one or
more Change-in-Law events resulting in an increase in costs and/or
decrease in revenues in excess of five million (5,000,000) Baht for
any calendar year.
17.2.3 If there is a Change-in-Law (other than in respect of Taxes) which
EGAT believes in good faith will materially decrease the costs or
materially increase the revenues of the Generator in connection
with the financing, construction, operation or maintenance of the
Facility, then EGAT shall submit to the
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Generator a certificate setting forth in detail reasonably
satisfactory to the Generator the basis of and the calculations for
the amount of such decrease in costs or increase in revenues. EGAT
and the Generator shall promptly determine, in good faith, any
necessary adjustments to the Availability Payments or the Energy
Payments to equitably reflect such decrease in costs or increase in
revenues with the intent that the financial position of the
Generator shall not be affected by such Change-in-Law. Each Party
shall cooperate in good faith with the other Party in connection
with any such determination. For the purposes of this Section
17.2.3 a material decrease in costs or material increase in
revenues means any one or more Change-in-Law events resulting in a
decrease in costs or increase in revenues in excess of five million
(5,000,000) Baht for any calendar year.
17.2.4 As soon as practicable after the Generator becomes aware of any
Change-in-Law which could reasonably be expected to give rise to an
adjustment pursuant to Section 17.2.1 or 17.2.2, the Generator
shall notify EGAT of the Change-in-Law and the expected effect on
the costs and revenues of the Generator. After the Generator
determines that it will be required to make any additional
operating or capital expenditures for which the Generator may be
entitled to an adjustment to the Availability Payments or the
Energy Payments pursuant to Section 17.2.1 or 17.2.2, the Generator
shall consult with EGAT regarding such expenditures and Generator
shall use all reasonable efforts to implement EGAT's
recommendations, if any, to minimize such expenditures consistent
with Prudent Utility Practices and the Generator's obligations
under this Agreement.
If the Generator makes any such capital expenditure without so
consulting with EGAT, the amount treated as the cost of the capital
improvement or modification to the Facility for purposes of Section
17.2.1 shall be limited to the cost of EGAT's reasonably determined
proposal for such improvement or modification to accommodate the
Change-in-Law. In the event the Generator initiates consultation
with EGAT and (i) EGAT objects to the Generator's proposed
expenditure as not being the lowest cost option within a reasonable
period of time, and (ii) EGAT demonstrates that there is a lower-
cost alternative that complies with the Change-in-Law which is
consistent with Prudent Utility Practices and will not adversely
affect the costs or manner of operations or maintenance and
economic life of the Facility, then the amount treated as the cost
of the capital improvement or modification to the Facility for
purposes of Section 17.2.1 shall be the cost of the alternative
demonstrated by EGAT.
17.2.5 For purposes of this Section 17.2, a change in Grid Code shall be
treated as a Change-in-Law.
17.2.6 If a change in an environmental Law requires the Generator to meet
a standard which exceeds a standard set out in Schedule 8, the
costs attributable to making the Facility or the operation thereof
meet such standard shall be subject to reimbursement in accordance
with the Section 17.2.1 or 17.2.2, provided that the Generator
shall not be entitled to any reimbursement under Section 17.2.1 or
17.2.2 for any portion of such costs which are attributable to
making the Facility or the operation thereof comply with any
standard set out in Schedule 8.
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17.3 BOI PRIVILEGES
17.3.1 EGAT acknowledges that the Availability Payments contemplated to be
paid to the Generator pursuant to this Agreement have been
determined based on the assumption that the Generator shall have
received certain investment promotion and tax incentives pursuant
to the Thailand Office of the Board of Investment Announcement No.
1/1993 on Policies and Criteria for Investment Promotion, Board of
Investment Announcement No. 2/1993 on List of Activities Eligible
for Investment Promotion and Board of Investment Announcement No.
2/1995 on Provision of Support for Power Generation Activity to be
Developed by Independent Power Producers.
17.3.2 If the Thailand Office of the Board of Investment (other than due
to an act or omission of the Generator) fails to grant the
Generator the investment promotion and tax incentives referred to
in Section 17.3.1 at the same tax rates and for the same exemption
or incentive periods contemplated under the Board of Investment
Announcements described in Section 17.3.1, or subsequent to the
granting thereof a Change-in-Law reduces the investment promotion
and tax incentives first granted, the Generator may request from
EGAT an equitable adjustment in the Availability Payments. Any
request by the Generator for such an equitable adjustment shall
include a certificate setting forth in details reasonably
satisfactory to EGAT the increased costs, expenses, Taxes,
decreased revenues and reduced return on equity resulting from such
failure to obtain or such subsequent reduction in any such
investment promotion and tax incentives. To the extent necessary,
the Parties shall promptly determine, in good faith, any necessary
adjustments to the Availability Payments or Energy Payments to
equitably reflect the impact of such failure to obtain or such
subsequent reduction in the investment promotion and tax incentives
with the intent that the financial position of the Generator shall
not be affected.
18. CONFIRMATION STATEMENT
18.1 CONFIRMATION OF AVAILABILITY AND METERED ENERGY
The Generator shall prepare and submit to EGAT a daily Confirmation
Statement no later than three (3) Business Days after the day to which it
relates. In addition, the Generator shall prepare and submit to EGAT a
Meter Reconciliation Statement following the annual meter test or any other
meter test conducted pursuant to Section 2.4.3. The Meter Reconciliation
Statement shall set out the results of any such test and any adjustments to
be made or other action to be taken following the test.
18.2 ACCESS TO INFORMATION
If available, the Generator shall provide such information as EGAT may
reasonably request to verify a Confirmation Statement provided that such
information is not readily available to EGAT by any other means.
18.3 REVIEW OF CONFIRMATION STATEMENT AND METER RECONCILIATION STATEMENT
EGAT shall review the Confirmation Statement and any Meter Reconciliation
Statement. Each Party shall notify the other Party in writing as soon as
practicable, and in any event within fourteen (14) Business Days after
having received the Confirmation Statement or Meter Reconciliation
Statement of any errors or omissions which the
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reviewing Party believes should be corrected. Subject to any alleged errors
or omissions notified by the reviewing Party to the other Party in writing
pursuant to this Section 18.3, the information contained in a Confirmation
Statement or Meter Reconciliation Statement shall, save in the case of
fraud or manifest error and subject to Section 18.6, be deemed to have been
approved by both Parties on the fifteenth (15th) Business Day after the
Confirmation Statement or Meter Reconciliation Statement shall have been
received.
18.4 DISPUTES
If the Parties cannot agree on whether any information contained in a
Confirmation Statement or Meter Reconciliation Statement is complete or
correct within fourteen (14) Business Days after the Confirmation Statement
or Meter Reconciliation Statement was received, the dispute shall be
referred to an Expert for determination in accordance with Section 15.1.2
or settled by arbitration in the circumstances in which arbitration is
provided under Section 15.2.1.
18.5 FINAL CONFIRMATION STATEMENT
Any Confirmation Statement which has been approved by both Parties, or
deemed to have been approved in accordance with Section 18.3, or which is
approved by a final decision of an Expert or arbitration, shall be a final
confirmation statement (FINAL CONFIRMATION STATEMENT). The information
contained in a Final Confirmation Statement shall be binding on both
Parties for the purposes of this Agreement save in the following
circumstances:
(a) (other than in the case of a determination by an Expert or by
arbitration) in the case of misrepresentation and subject to Section
18.6; or
(b) in the event of any adjustment pursuant to Section 18.8.
18.6 DISPUTES LIMITATION
Nothing in this Section 18 shall prevent either Party from disputing the
information contained in or referred to in a Confirmation Statement or
Meter Reconciliation Statement at any time where it is reasonable under all
the circumstances so to do, provided that no dispute shall be raised in
relation to information regarding a Settlement Period after the first
anniversary of the day during which such Settlement Period occurred.
18.7 EFFECT OF CONFIRMATION STATEMENT
The Final Confirmation Statement (or pending resolution of any outstanding
disputes, the Confirmation Statement) shall be used by the Generator to
prepare Payment Invoices/Credit Notes as required by Section 19.
18.8 ENERGY PAYMENT ADJUSTMENTS
18.8.1 Where a Meter Reconciliation Statement shows that an adjustment in
the amount due is required and the meter inaccuracy cannot be
attributed to a particular Settlement Period, the adjustment (in
MWh) shown in such Meter Reconciliation Statement shall be
converted by a monetary adjustment factor
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(MA) at a rate (in Baht/MWh) calculated in accordance with the
following formula:
MA = y/x
where:
x = the total metered Net Electrical Generation at the Metering
Point for the relevant quarterly period as shown
(unadjusted) in such Meter Reconciliation Statement;
y = the total amount paid as components of the Energy Payments
(calculated by reference to the terms FCharge//x// and
VCharge//x// in the equations in Schedule 3) in respect of
such metered Net Electrical Generation in the relevant
quarterly period (determined on the basis of such terms).
18.8.2 For the avoidance of doubt, where a Meter Reconciliation Statement
shows that an adjustment is required and the meter inaccuracy can
be attributed to a particular Settlement Period, the number of MWh
delivered in that Settlement Period shall be so adjusted and the
adjustment payments shall be made to or by the Generator as
appropriate.
18.9 INTERFERENCE WITH METERING
If either Party shall interfere with Metering in a manner which gives rise
to a need for a meter adjustment necessitating an additional payment or
rebate to the other Party, such payment shall be made or rebate paid
together with interest thereon at the Default Rate for the period for which
such payment or rebate is outstanding.
19. BILLING AND PAYMENT
19.1 PAYMENT INVOICE/CREDIT NOTE
The Generator shall prepare and issue to EGAT a Payment Invoice/Credit Note
in the form set out in Schedule 6 within three (3) Business Days after the
completion of all Final Confirmation Statements for the Billing Period. If
there is a dispute over a Confirmation Statement, the Generator may, from
the fifteenth (15th) Business Day after it is received by EGAT, treat that
Confirmation Statement as a Final Confirmation Statement for the purposes
of preparing the Payment Invoice/Credit Note for the applicable Billing
Period.
Such Payment Invoice/Credit Note shall set out either (i) the net amount of
the Availability Payments due to the Generator from EGAT for that month (if
the aggregate amount of the Availability Payments exceeds the aggregate
amount of the deductions from Availability Payments for that month), or
(ii) the net amount of the rebate due to EGAT from the Generator for that
month (if the aggregate amount of the Availability Payments is less than
the aggregate amount of the deductions from Availability Payments for that
month). The Payment Invoice/Credit Note shall reflect any adjustments of
invoice or credit amounts required by any Meter Reconciliation Statement in
accordance with Sections 2.4.4 and 18.1.
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The Generator shall calculate in accordance with paragraph 4.1.2 of
Schedule 2 of this Agreement the adjustment, if any, required to be made in
respect of the difference between (a) the Baht/US$ exchange rate used by
the Generator in the preparation of such Payment Invoice in accordance with
paragraph 4.1 of Schedule 2 of this Agreement and (b) the Baht/US$ exchange
rate applicable on the date of payment by EGAT of such Payment Invoice
(such adjustment, the FX ADJUSTMENT). The Generator shall issue an
adjustment invoice or credit note to EGAT, as applicable, setting forth in
sufficient detail the calculation of the FX Adjustment within five (5)
Business Days after the date of payment by EGAT of each Payment Invoice.
EGAT shall pay the amount shown on any FX adjustment invoice within thirty
(30) days after receipt of such invoice. Any FX Adjustment credit note
issued by the Generator shall be taken into account in the first Payment
Invoice prepared following the issuance of such credit note, provided,
however, that the Generator shall pay the amount set forth in any FX
Adjustment credit note to EGAT in cash or cash equivalent in accordance
with Section 19.3 in the event that such Payment Invoice has not been
prepared and submitted to EGAT for any reason within thirty (30) days of
when otherwise required to be submitted to EGAT in accordance with this
Agreement. Neither Party shall be liable for interest in respect of the FX
Adjustment for the period before the date payment or credit of the FX
Adjustment is due. The FX Adjustment shall not be subject to adjustment
pursuant to Paragraph 4.1 of Schedule 2 of this Agreement.
The undisputed amount shown in the Payment Invoice/Credit Note as payable
by EGAT or the Generator shall be paid within thirty (30) days after
receipt of such invoice or issuing of such credit note.
19.2 OTHER PAYMENTS
Except where expressly provided to the contrary any payment to be made by
either Party under this Agreement shall be made within thirty (30) days
after the Party liable to make payment receives a demand from the other
Party for the same.
19.3 PAYMENT PROCEDURE
Any sums payable pursuant to this Agreement shall be made by check or by
the deposit of funds by wire transfer into a Thai bank account as may be
notified by the receiving Party to the paying Party in writing from time to
time or by such other means as the Parties may agree. Bank charges will be
the receiving Party's expense. Each Party shall notify the other of the
details of the bank account to which sums due to that Party shall be
credited, identifying such bank account by means of the bank sort code
number, the bank account number and bank account title. Any payment that
becomes due and payable on a day that is other than a Business Day shall be
paid on the first (1st) Business Day thereafter.
19.4 APPLICATION OF PAYMENTS
Any payments received by one Party from the other under this Agreement
shall be applied in or towards settlement of amounts payable to the
recipient, with the longest outstanding amount being settled first,
provided that this Section 19.4 shall not apply in respect of any amount
which is disputed in good faith in accordance with this Agreement.
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19.5 INTEREST
Any amount (other than one which is disputed in good faith in accordance
with this Agreement) determined to be properly due from one Party to the
other pursuant to this Agreement and remaining unpaid after the due date
for payment shall bear interest at the Default Rate from and including the
due date as so determined until but excluding the date that it is received
by the Party entitled to it. Interest shall accrue at the Default Rate on
a day to day basis and shall be compounded monthly.
19.6 DISPUTED ITEMS
If any sum or part of a sum shown on an invoice submitted by one Party is
disputed in good faith by the other Party, and it is subsequently
determined in accordance with the dispute resolution provisions set out in
Section 15 that any amount withheld by the other Party should have been
properly payable to the Party submitting such invoice, the other Party
shall pay to the Party submitting such invoice interest in respect of such
disputed amount at the Default Rate from and including the date that the
amount in question was due up to but excluding the date on which the Party
submitting such invoice receives payment. The undisputed amount of each
invoice shall be paid promptly notwithstanding a dispute about any other
amount invoiced.
If any sum or part of a sum shown on an invoice submitted by one Party is
paid but is subsequently disputed or questioned, and is subsequently agreed
or determined not to have been properly payable, then such Party shall
refund the amount which was not properly payable together with interest at
the Default Rate from and including the date of receipt up to but excluding
the date of repayment. Whenever any payment or refund is required to be
made upon resolution of any dispute under this Section 19.6, appropriate
adjustments in respect of VAT shall be made by the Parties including the
issuing of credit notes, invoices (receipted or otherwise) and the payment
of VAT or further sum of VAT. Any dispute pursuant to the provisions of
this Section 19.6 shall be referred to an Expert for determination in
accordance with Section 15.1.2.
19.7 TAXES AND FINES
19.7.1 Taxes and Fees
The Generator shall pay when due all present and future Taxes
(whether national or local) imposed in connection with the
ownership, operation and maintenance of the Facility, and shall pay
all other duties, assignments, levies, fees, costs and expenses of
any kind (whether or not to a Governmental Authority) necessary to
assure the performance of its obligations under this Agreement,
except as otherwise provided in Section 12.3 or below. EGAT shall
pay when due all present and future (whether national or local) VAT
imposed on the sale to EGAT and purchase by EGAT of electricity
under this Agreement. It is expressly understood that each Party
shall be separately responsible for all Taxes imposed on its
overall net income.
19.7.2 Fines
Any fines, penalties or other costs incurred by the Generator or
its agents, officers, directors, employees, Affiliates, contractors
or subcontractors for non-compliance by the Generator, its agents,
officers, directors, employees, Affiliates, contractors or
subcontractors with the requirements of any Laws or
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Governmental Approvals shall not be reimbursed by EGAT but shall be
the sole responsibility of the Generator.
If any fines, penalties or other costs are assessed against EGAT or
its agents, officers, directors, employees, Affiliates, contractors
or subcontractors by any Governmental Authority due to the non-
compliance by the Generator with any Laws, the Grid Code or
Governmental Approvals, the Generator shall indemnify and hold
harmless EGAT against any and all losses, liabilities, damages and
claims suffered or incurred because of the failure of the Generator
to comply therewith. The Generator shall also reimburse EGAT for
any and all legal or other expenses (including attorneys' fees and
expenses) reasonably incurred by EGAT in connection with such
losses, liabilities, damages and claims.
If any fines, penalties or other costs are assessed against the
Generator or its agents, officers, directors, employees,
Affiliates, contractors or subcontractors by any Governmental
Authority due to the non-compliance by EGAT with any Laws, the Grid
Code or Governmental Approvals, EGAT shall indemnify and hold
harmless the Generator against any and all losses, liabilities,
damages and claims suffered or incurred because of the failure of
EGAT to comply therewith. EGAT shall also reimburse the Generator
for any and all legal or other expenses (including attorneys' fees
and expenses) reasonably incurred by the Generator in connection
with such losses, liabilities, damages and claims.
19.8 SET-OFF
All payments to be made by either Party under this Agreement shall be made
without set-off, counterclaim, withholding or deduction, including any set-
off, counterclaim, withholding or deduction for or on account of Taxes,
except as expressly provided in this Agreement or required by applicable
Law.
20. INDEXATION
20.1 If any index or external price reference for a particular date or period is
not available when required for the purposes of this Agreement, the Parties
shall seek to agree to use such other index or price reference for such
dates or periods as shall be appropriate in the circumstances.
20.2 If any index or external price reference referred to in this Agreement
ceases to be published or if the basis on which it is calculated is
materially altered, the Parties shall seek to agree to use such other index
or price reference as shall be appropriate in the circumstances.
20.3 Any dispute under Section 20.1 or 20.2 that cannot be resolved by agreement
within fourteen (14) days after the dispute arises shall be referred to an
Expert for determination in accordance with Section 15.
20.4 This Section 20 is without prejudice to any other provision of this
Agreement which provides for periodic review of any indexes or external
price references which are used for the purposes of this Agreement.
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21. CONFIDENTIALITY AND ANNOUNCEMENTS
21.1 GENERAL RESTRICTIONS ON THE PARTIES
Neither Party shall at any time, whether before or after the expiration or
earlier termination of this Agreement, divulge or suffer or permit its
officers, directors, employees, Affiliates, agents, contractors or
subcontractors to divulge to any other person any confidential information
relating to this Agreement or any other information labeled "CONFIDENTIAL"
which may be provided to such Party (the RECEIVING PARTY) by the other
Party pursuant to this Agreement or the Grid Code, or in the course of
negotiating this Agreement or otherwise concerning the operations,
contracts, commercial or financial arrangements or affairs of the other
Party except:
(a) in the circumstances set out in Section 21.2;
(b) to the extent otherwise expressly permitted by this Agreement; or
(c) with the prior consent of the other Party.
21.2 EXCEPTIONS
The restrictions imposed by Section 21.1 shall not apply to the disclosure
of any information:
(a) which now or hereafter comes into the public domain other than as a
result of a breach of an undertaking of confidentiality;
(b) which is required to be disclosed in compliance with the conditions of
any licenses or any document referred to in any such license with
which the Receiving Party is required to comply;
(c) which is required to be disclosed by any other requirement of Law or
Government Authority;
(d) required by any court, arbitrator or administrative tribunal or the
Expert in the course of proceedings before it to which the Receiving
Party is a party, provided that such parties, to the extent permitted
by applicable laws, shall be bound by the provisions contained in this
Section;
(e) to the employees, directors, Affiliates, agents, proposed assignees,
consultants or professional advisors of the Receiving Party, in each
case on the basis set out in Section 21.3, provided that such parties
shall be bound by the provisions contained in this Section 21;
(f) to the Financing Parties or insurers or their respective consultants
and advisors, provided that the Receiving Party agrees to keep such
information confidential on terms no less onerous than those set out
in Section 21.1; and
(g) as may be required to comply with the Grid Code.
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21.3 INTERNAL PROCEDURES
With effect from the date of this Agreement each Party shall adopt
procedures within its organization for ensuring the confidentiality of all
information which it is obligated to preserve as confidential under Section
21.1. Those procedures shall be as follows:
21.3.1 The confidential information will be disseminated within the
Receiving Party only to persons who need such information to carry
out the functions which they are employed to carry out.
21.3.2 The confidential information shall not be used by the Receiving
Party for the purpose of obtaining for such Party or any Affiliate
thereof or for any other Person any contract or arrangement for the
supply of electricity to any Person without the prior consent of
the originator of such confidential information.
21.3.3 Employees, directors, Affiliates, agents, proposed assignees,
consultants and professional advisors of the Receiving Party will
be made fully aware of such Party's obligations of confidence in
relation to confidential information and such Party will be
responsible for any failure by such Persons to comply with such
obligations as if they were parties to this Agreement.
21.3.4 Any copies of the confidential information, whether in hard copy or
computerized form, shall clearly identify the confidential
information as confidential.
21.4 PUBLIC ANNOUNCEMENTS
21.4.1 Subject to Section 21.4.2, no public announcement or statement
regarding the signature, performance or termination of this
Agreement shall be issued or made unless both Parties shall have
been furnished with a copy of the proposed announcement or
statement and shall have approved it (such approval not to be
unreasonably withheld or delayed).
21.4.2 Neither Party shall be prohibited from issuing or making any public
announcement or statement which is required to be made to comply
with any applicable Law or the regulations of any recognized stock
exchange upon which the share capital of such Party (or any parent
company of such Party) is from time to time listed or dealt in or
in response to a requirement of Governmental Authority.
22. INSURANCE AND INDEMNITIES
22.1 INSURANCE REQUIRED
The Generator shall fully apprise EGAT of the insurance requirements
proposed by the Financing Parties (including draft documentation thereon)
and the Generator shall use reasonable efforts to implement recommendations
on such requirements reasonably made by EGAT. The Generator shall obtain
and maintain in effect such insurance policies and coverage as is required
by Law, the Financing Documents and Prudent Utility Practices, including:
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(a) "Comprehensive or Commercial General Liability" insurance with
combined single limits for bodily injury and property damages in
amounts per occurrence and in the aggregate as required by the law of
Thailand;
(b) "Workers' Compensation" insurance that complies with the laws of
Thailand;
(c) "Comprehensive Automobile Liability" insurance with combined single
limits for bodily injury and property damage in amounts per occurrence
and in the aggregate covering vehicles owned, borrowed or hired;
(d) "All Risks Property Coverage" insurance and "Boiler and Machinery"
insurance against damage to the Facility (on a "replacement cost"
basis) in amounts and subject to deductibles in accordance with this
Section 22.1;
(e) "Excess Liability" insurance with a limit per occurrence and in the
aggregate in an amount to be in excess of the limits of insurance
provided in subsections (a) and (c) above; and
(f) "Business Interruption" insurance in amounts and subject to
deductibles in accordance with this Section 22.1.
The Generator shall maintain throughout the Term of this Agreement the
scope and type of insurance coverage (other than "Business Interruption"
insurance) as is initially required to be obtained and maintained by the
Financing Documents, provided the types of insurance and the amount thereof
are reasonably acceptable to EGAT. The Generator shall not reduce the
scope of such insurance without the prior written consent of EGAT, such
consent not to be unreasonably withheld or delayed.
22.2 ENDORSEMENTS
The Generator shall cause its insurers to amend its Comprehensive or
Commercial General Liability Policy and, if applicable, any Excess
Liability Policy and All Risks Property Coverage with the following
endorsement items (a), (b) and (c), and to amend its Workers' Compensation
and Automobile Liability policies with endorsement item (c):
(a) EGAT and its officers, directors, employees and agents are additional
insureds under the policy;
(b) the insurer waives all rights of subrogation against EGAT, its
officers, directors, employees and agents; and
(c) notwithstanding any provision of the policy, the policy may not be
cancelled, non-renewed or materially changed without the insurer
giving thirty (30) days' prior written notice to EGAT. All other
terms and conditions of the policy remain unchanged.
22.3 CERTIFICATES REQUIRED
At least sixty (60) days prior to the date set for the commencement of
construction and annually upon renewal or otherwise in accordance with the
terms of the relevant insurance policies, the Generator shall provide for
EGAT's review and approval evidence of the insurance required by Section
22.1 in a form acceptable to EGAT. The
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Generator shall also provide EGAT with copies of the receipts appropriate
to the annual premiums in respect of the insurance coverages and
endorsements.
Failure of the Generator to obtain the insurance coverages required by this
Section 22 or to provide EGAT with the certificates or copies of receipts,
shall in no way relieve the Generator of the insurance requirements of this
Section 22 or limit the Generator's obligations and liabilities under any
provision of this Agreement.
22.4 APPLICATION OF PROCEEDS
For the Term of this Agreement, and subject to the requirements of the
Financing Documents and any rights or remedies thereunder, the Generator
shall apply any and all insurance proceeds received in connection with any
damage to the Facility toward the repair, reconstruction or replacement of
the Facility.
23. REPRESENTATIONS AND WARRANTIES
23.1 The Generator represents and warrants to EGAT as follows:
(a) The Generator is a corporation duly organized, validly existing and in
good standing under the laws of Thailand and is qualified and in good
standing in each other jurisdiction where the failure so to qualify
would have a material adverse effect upon the business or financial
condition of the Generator or the Facility, and the Generator has all
requisite power and authority to conduct its business, to own its
properties and to execute, deliver and perform its obligations under
this Agreement.
(b) The execution, delivery and performance by the Generator of this
Agreement has been duly authorized by all necessary corporate action,
and does not and will not (i) require any consent or approval of the
Generator's Board of Directors, shareholders or any other third Party,
other than those that have been obtained (evidence of which shall be,
if it has not already been, delivered to EGAT), or (ii) result in a
breach of, or constitute a default under, any provisions of the
Generator's constitution or incorporation documents, any indenture,
contract or agreement to which it is a party or by which it or its
assets may be bound, or violate any law, rule, regulation, order, writ
judgment, injunction, decree, determination or award at present in
effect having applicability to the Generator.
(c) Each Project Agreement constitutes or, when executed will constitute,
a legal, valid and binding obligation of the Generator and is
enforceable by and against the Generator in accordance with its terms.
Upon the exercise of any step in rights under Section 12.3 or the
occurrence of any purchase of the Project by EGAT under Section 14.6,
EGAT shall have the right, but not the obligation to assume the rights
and obligations of the Generator as provided in such Project
Agreements. Moreover, each Project Agreement:
(i) will include no terms or conditions which conflict with the
provisions of this Agreement,
(ii) will not provide that any unsecured creditor of the Generator
shall be given higher priority as a creditor than EGAT, other
than rights which may arise by operation of Law,
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(iii) will include terms and conditions (including the selection of
counterparties and suppliers) that can reasonably be expected
to enable the Project to be successfully completed as
contemplated in this Agreement,
(iv) will include acknowledgments of the counterparties thereto
that, to the extent required to do so in order to give effect
to the purposes of this Agreement, they shall cooperate in the
exercise by the Parties of the step-in and buyout rights and
rights related thereto as provided in this Agreement, such
rights to include the right of EGAT (but not its obligation)
to exercise on behalf of or assume the Generator's rights
under that Project Agreement, and
(v) in the case of the Financing Documents, will include an
acknowledgment by the Financing Parties of the restrictions
contained in Section 25.4 relating to assignment by the
Financing Parties.
(d) No Governmental Approval by any Governmental Authority or pursuant to
any Law as in effect on the date hereof, other than those that have
been obtained, or to be obtained when required, is necessary for the
due execution, delivery and performance by the Generator of this
Agreement.
(e) This Agreement constitutes a legal, valid and binding obligation of
the Generator and is enforceable against the Generator in accordance
with its terms.
(f) There is no pending or, to the best of the Generator's knowledge,
threatened action or proceeding affecting the Generator before any
court, Governmental Authority or arbitrator that could reasonably be
expected to materially and adversely affect the financial condition or
operations of the Generator or the ability of the Generator to perform
its obligations hereunder, or that purports to affect the legality,
validity or enforceability of this Agreement.
23.2 EGAT represents and warrants to the Generator as follows:
(a) EGAT is a juristic person duly established pursuant to the EGAT Act
and is duly organized and validly existing under the laws of Thailand
and has the full legal right, power and authority to conduct its
business, to own its properties and to execute, deliver and perform
its obligations under this Agreement.
(b) The execution, delivery and performance by EGAT of this Agreement has
been duly authorized by all necessary action, and does not and will
not (i) require any consent or approval of EGAT's Board of Directors
or any other third party, other than those that have been obtained
(evidence of which shall be, if it has not already been, delivered to
the Generator), or (ii) result in a breach of, or constitute a default
under, any provisions of EGAT's constitutive or enabling documents,
any indenture, contract or agreement to which it is a party or by
which it or its assets may be bound, or violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination
or award at present in effect having applicability to EGAT.
(c) No Governmental Approval by any Governmental Authority or pursuant to
any Law in effect on the date hereof, other than those that have been
obtained, or are
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to be obtained, is necessary for the due execution, delivery and
performance by EGAT of this Agreement.
(d) This Agreement constitutes a legal, valid and binding obligation of
EGAT and is enforceable against EGAT in accordance with its terms.
(e) There is no pending or, to the best of EGAT's knowledge, threatened
action or proceeding affecting EGAT before any court, Governmental
Authority or arbitrator that could reasonably be expected to
materially and adversely affect the financial condition or operations
of EGAT or the ability of EGAT to perform its obligations hereunder,
or that purports to affect the legality, validity or enforceability of
this Agreement.
24. EQUITY UNDERTAKING
24.1 RESTRICTIONS ON TRANSFERABILITY
24.1.1 Subject to Section 24.2, the Generator shall ensure that after the
Execution Date and until the first anniversary of the Commercial
Operation Date of the Second Unit, no Sponsor (or any of its
respective Affiliates) shall transfer any of its equity ownership
interest in the Generator:
(a) to any Affiliate, other Sponsor or other Person if such
transfer will reduce such Sponsor's (or such Sponsor's
Affiliates') equity ownership interest in the Generator to
fifty percent (50%) or less of its equity ownership interest
in the Generator existing on the Execution Date; and
(b) to any Person other than such Sponsor's Affiliates or the
other Sponsors without the prior written approval of EGAT,
such approval not to be unreasonably withheld or delayed.
24.1.2 Subject to Section 24.2, the Generator shall ensure that after the
first anniversary of the Commercial Operation Date of the Second
Unit until the fifth (5th) anniversary of such date, no Sponsor (or
any of its respective Affiliates) shall transfer any of its equity
ownership interest in the Generator:
(a) to any Affiliate, other Sponsor or other Person if such
transfer will reduce such Sponsor's (or such Sponsor's
Affiliates') equity ownership interest in the Generator to
twenty-five percent (25%) or less of its aggregate equity
ownership interest in the Generator existing on the Execution
Date; or
(b) to any Person other than such Sponsor's Affiliates or the
other Sponsors without the prior written approval of EGAT,
such approval not to be unreasonably withheld or delayed.
24.2 QUALIFICATIONS TO EQUITY TRANSFER RESTRICTIONS
During the periods that the restrictions set out in Section 24.1 are
applicable:
(a) EGAT shall be given at least fourteen (14) days' prior notice of any
transfer by a Sponsor (or any of its Affiliates) of any interest in
the Generator to any other Person;
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(b) any Sponsor or transferee of such Sponsor shall have the right to
transfer its interest in the Generator notwithstanding the
restrictions set out in Section 24.1 above so long as such transfer is
approved in writing by EGAT, such approval to be made or withheld at
EGAT's sole discretion;
(c) any Sponsor or transferee of such Sponsor shall have the right to
pledge its direct or indirect interest in the Generator by way of
security to any of the Financing Parties or to any insurer of the
investment in the Project, notwithstanding the restrictions set out in
Section 24.1 above; and
(d) any transferee shall be subject to the same conditions imposed hereby
on transfers made by it as are imposed with respect to transfers by
the Sponsors except a transferee who acquires shares in the Generator
pursuant to an initial public offering of such shares which conforms
to the requirements of the Securities Exchange Commission of Thailand.
25. MISCELLANEOUS PROVISIONS
25.1 AMENDMENTS
This Agreement may not be amended except by an agreement in writing signed
by the Parties.
25.2 WAIVERS OF RIGHTS
25.2.1 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. For the avoidance of doubt any waiver by either Party of
the obligations of the other Party shall be evidenced by an
agreement in writing signed by the Parties. Any single or partial
exercise of any such right, power, privilege or remedy shall not
preclude any other or further exercise thereof or the exercise of
any other right, power, privilege or remedy.
25.2.2 The obligations of the Parties hereunder are civil and commercial
in nature rather than governmental. To the extent that either Party
may be or hereafter become 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 either Party or to any of such Party's property,
assets or revenues such an immunity (whether or not claimed), each
Party hereby irrevocably agrees not to claim and hereby irrevocably
waives such immunity to the fullest extent permitted by the laws of
such jurisdiction.
25.3 NOTICE
25.3.1 Save for Notices which are given pursuant to the Grid Code (as to
which the procedures provided for in the Grid Code shall apply) or
Section 5, any notice or other communications to be given by one
Party to the other under, or in connection with the matters
contemplated by, this Agreement shall be sent to
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the address given and marked for the attention of the Person
specified in Schedule 5 or such other address or facsimile number
of such Person whom one Party shall from time to time designate by
written notice to the other.
25.3.2 Save for Notices which are given pursuant to the Grid Code, any
notice or other communication to be given by one Party to the other
Party under, or in connection with the matters contemplated by,
this Agreement shall be in writing and shall be given by letter
delivered by hand or sent by first class prepaid post (airmail if
from abroad) or facsimile transmission, and shall be deemed to have
been received:
(a) in the case of delivery by hand, when delivered;
(b) in the case of first class prepaid post, on the third day
following the day of posting or (if sent by airmail from
abroad) on the sixth day after the day of posting; or
(c) in the case of facsimile transmission at the time of
receipt.
25.4 ASSIGNMENT
25.4.1 Neither Party shall assign any of its rights or obligations, in
part or in whole, under this Agreement without the prior written
consent of the other Party, provided that such consent shall not be
withheld or delayed if the Party wishing to assign has demonstrated
to the reasonable satisfaction of the other Party that the proposed
assignee has adequate legal, financial and technical status and
ability to observe and perform the obligations of the assignor
under this Agreement.
25.4.2 No assignment pursuant to Section 25.4.1 shall be effective unless
and until the assignor has procured the proposed assignee to
covenant directly with the other Party to observe and perform all
the terms and conditions of this Agreement, and has provided to the
other Party a certified copy of the assignment (omitting the
consideration therefor and any other commercial terms thereof).
25.4.3 No assignment pursuant to Section 25.4.1 shall be effective unless
at the same time there is assigned or novated to the assignee the
assignor's interest in this Agreement, and any other agreements
between the Parties that are necessary to the Facility or its
operation.
25.4.4 The preceding provisions of this Section 25.4 shall not apply to an
assignment by the Generator of its right, title and interest in and
to the Facility or this Agreement by way of security to any
Financing Party in accordance with the Financing Documents. EGAT
agrees to negotiate with the Generator and the Financing Parties in
good faith for the purposes of entering into (i) a consent to the
collateral assignment of this Agreement, and (ii) a consent to
provide for the security of Financing Parties (including rights and
appropriate time to cure the Generator's defaults) which the
Generator may reasonably request and which does not materially
adversely affect the rights of EGAT hereunder, provided that the
Generator will reimburse EGAT for all reasonable costs and expenses
incurred in relation thereto. Any assignment permitted under this
Section 25.4.4 shall be substantially in the form set out in
Schedule 19.
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25.4.5 Notwithstanding the foregoing provisions of Section 25.4.4, as a
condition to any such consent EGAT shall require that:
(a) any substitute for the Generator under this Agreement that may
be appointed by the Financing Parties, or any designee or
transferee of the Financing Parties or any purchaser of the
Generator or of any of its rights, title and interest under
this Agreement from the Financing Parties upon a foreclosure
sale or other exercise by them of their security under the
Financing Documents, shall have adequate legal, financial and
technical status and ability to observe and perform the
obligations of the Generator under this Agreement;
(b) any such substitute, designee, transferee or purchaser shall
agree in writing to be bound by all the terms, conditions and
provisions of this Agreement; and
(c) the Financing Parties shall have given EGAT at least thirty
(30) days' prior notice of the assignment. EGAT shall have the
right to reject such assignment if it does not conform to the
conditions set out herein.
25.4.6 Unless expressly agreed to by the other Party, no assignment,
whether or not consented to, shall relieve the assignor of its
obligations hereunder if its assignee fails to perform.
25.5 EFFECT OF ILLEGALITY
If for any reason whatsoever any provision of this Agreement is or becomes
invalid, illegal or unenforceable, or is declared by any court of competent
jurisdiction or any other Governmental Authority to be invalid, illegal or
unenforceable or if such Governmental Authority:
(a) refuses or formally indicates an intention to refuse, authorization of
any of the provisions of or arrangements contained in this Agreement
(in the case of a refusal either by way of outright refusal or by way
of a requirement that this Agreement be amended or any of its
provisions be deleted or that a Party give an undertaking or accept a
condition as to future conduct); or
(b) formally indicates that to continue to operate any provision of this
Agreement may expose the Parties to sanctions under any law, order,
enactment or regulation, or requests any Party to give undertakings or
to accept conditions as to future conduct in order that such Party may
not be subject to such sanctions; and, in all cases, whether initially
or at the end of any earlier period or periods of exemption then, in
any such case, the Parties will negotiate in good faith with a view to
agreeing one or more provisions which may be substituted for such
invalid, unenforceable or illegal provision which substitute
provisions are satisfactory to all relevant Governmental Authorities
and produce as nearly as is practicable in all the circumstances the
appropriate balance of the commercial interests of both Parties. The
remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by such invalid, illegal or
unenforceable provision.
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25.6 ENTIRE AGREEMENT
This Agreement and the "Agreement regarding Power Purchase Agreement"
entered into between the Parties on the date hereof contain or expressly
refer to the entire agreement between the Parties with respect to its
subject matter and expressly excludes any warranty, condition or other
undertaking implied at Law or by custom and supersedes any and all
previous agreements and understandings between the Parties with respect to
its subject matter. Each of the Parties acknowledges and confirms that it
does not enter into this Agreement in reliance on any representation,
warranty or other undertaking by the other Party not fully reflected in
the terms of this Agreement.
25.7 COUNTERPARTS
This Agreement is executed in two (2) original copies, one each for EGAT
and the Generator, each of which when executed and delivered shall
constitute an original, but both counterparts shall together constitute
but one and the same instrument.
25.8 CURRENCY
All payments to be made by either Party to the other Party hereunder shall
be in Baht.
25.9 LANGUAGE
This Agreement is being executed and delivered in the English language and
all modifications, amendments and waivers of and notices given pursuant to
any provision of this Agreement shall be in the English language. All
other documents, notices and communications, written or otherwise, between
the Parties in connection with this Agreement, shall be in either English
or Thai language as the Parties deem practicable. However, the Parties
agree that the Grid Code shall be in the English language and the
communications related thereto shall be in either English or Thai as
appropriate.
25.10 THIRD PARTIES
This Agreement is intended solely for the benefit of the Parties. This
Agreement shall be binding upon and inure to the benefit of the Parties
and their respective successors and permitted assignees. Nothing in this
Agreement should be construed to create any duty or liability to, or
standard of care with reference to, any third parties.
25.11 INCONSISTENCIES AND CONFLICTS
25.11.1 In the event of any inconsistency or conflict between the
provisions of this Agreement and the Grid Code, the provisions of
the Grid Code shall prevail.
25.11.2 In the event of any inconsistency or conflict referred to in
Section 25.11.1 existing at the date of this Agreement or arising
subsequently, the Parties shall, without prejudice to their rights
in respect of a change in the Grid Code, seek to negotiate an
amendment to this Agreement which removes the inconsistency or
conflict. If the Parties cannot agree on what amendment should be
made to this Agreement the dispute shall be referred to an Expert.
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26. GOVERNING LAW AND JURISDICTION
26.1 GOVERNING LAW
This Agreement shall be governed by and construed in all respects in
accordance with the laws of Thailand.
26.2 WAIVER
Each Party irrevocably waives any objection which it may have now or
hereafter to the laying of the venue of any proceedings in any court and
any claim that any such proceedings have been brought in an inconvenient
forum, and further irrevocably agrees that a judgment in any proceedings
brought in the courts of Thailand shall be conclusive and binding upon such
Party and may be enforced in the courts of any other jurisdiction.
26.3 ARBITRATION
For the avoidance of doubt, all disputes arising under or in connection
with this Agreement shall be resolved in accordance with Section 15 and
nothing contained in Section 26.1 or 26.2 shall be construed as permitting
either Party to commence proceedings in any court in any jurisdiction
except as may be necessary to enforce an arbitration award or the final
determination of a dispute by an Expert.
27. PRIVATIZATION OF EGAT
27.1 The Parties acknowledge that it is the present intention of the Government
of Thailand to corporatize and eventually privatize EGAT. At such time that
(i) EGAT shall have been privatized, and (ii) the Government of Thailand
and all other Governmental Authorities shall cease to Control EGAT, then
the Parties shall use their best efforts to obtain the Financing Parties'
approval to delete the definition of Governmental Force Majeure and the
provisions of this Agreement regarding Governmental Force Majeure, it being
the intention of the Parties and the Financing Parties that the need for
such provisions would then not be appropriate, and EGAT shall not bear the
risk of Governmental Force Majeure as provided for in this Agreement. The
events, conditions and circumstances previously described as Governmental
Force Majeure shall nevertheless continue to constitute Force Majeure.
28. PERMISSION UNDER EGAT ACT
28.1 This Agreement is the permission issued by EGAT to the Generator pursuant
to Section 37 of the EGAT Act, and this permission shall remain valid
throughout the Term of this Agreement. Except for those stated in this
Agreement, there is no other condition to such permission.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their respective duly authorized officers as of the date first above
written.
ELECTRICITY GENERATING AUTHORITY OF
THAILAND
Witness:_____________________________ By:___________________________
(▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇) (Mr. Viravat Chlayon)
Deputy-Governor-Planning and Policy Governor
GULF POWER GENERATION CO., LTD.
Witness:_____________________________ By:___________________________
(▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) (▇▇. ▇▇▇▇▇▇ Ratanavadi)
Director Director
By:___________________________
(▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇)
Director
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