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Southern Energy - Build, Operate And Transfer Project Agreement
DATED 16TH NOVEMBER, 1988
BUILD, OPERATE AND TRANSFER ("BOT")
PROJECT AGREEMENT
for
A GAS TURBINE POWER STATION
IN NAVOTAS, MANILA
BETWEEN
NATIONAL POWER CORPORATION
AND
HOPEWELL PROJECT MANAGEMENT COMPANY LIMITED
Clifford Chance
Hong Kong
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TABLE OF CONTENTS
Clause Heading Page - ------ ------- ---- 1. Definition of Terms .................................................... 1
2. The Project ............................................................ 5
3. Construction of the Power Station ...................................... 6
4. Specifications and Operating Parameters ................................ 8
5. Construction Timetable ................................................. 8
6. Testing ................................................................ 9
7. Conditions Precedent ................................................... 10
8. Operation of the Power Station ......................................... 13
9. Supply of Fuel ......................................................... 14
10. Supply of Electricity .................................................. 15
11. Fees ................................................................... 15
12. Foreign Exchange ....................................................... 16
13. Insurance .............................................................. 17
14. Transfer of Ownership .................................................. 17
15. Liability .............................................................. 18
16. Force Majeure .......................................................... 19
17. Buyout ................................................................. 20
18. Change in Circumstances ................................................ 21
19. Benefit of Agreement ................................................... 22
20. Warranty ............................................................... 22
21. Notices ................................................................ 23
22. Dispute Resolution ..................................................... 23
23. Law .................................................................... 23
24. Jurisdiction ........................................................... 24
(i) 3
TABLE OF CONTENTS
Schedules Heading Page - --------- ------- ---- FIRST SCHEDULE - Project Scope and Specifications........................ 25
SECOND SCHEDULE - Operating Parameters.................................... 30
THIRD SCHEDULE - Penalty of HOPEWELL on Delay
of Completion Date...................................... 34
FOURTH SCHEDULE - Specifications for Fuel Supply
and Start Up Electricity................................ 35
FIFTH SCHEDULE - Transmission Line Specifications........................ 38
SIXTH SCHEDULE - Electricity Delivery Procedures......................... 39
SEVENTH SCHEDULE - Measurement and Recording
of Electricity.......................................... 42
EIGHTH SCHEDULE - Delivery of Power and Energy............................ 43
NINTH SCHEDULE - Documentary Requirements
for the Effective Date.................................. 48
TENTH SCHEDULE - Insurance............................................... 50
ELEVENTH SCHEDULE - Form of Performance Undertaking......................... 51
TWELFTH SCHEDULE - Form of Accession Undertaking........................... 53
THIRTEENTH SCHEDULE - Form of Legal Opinion of
NAPOCOR's General Counsel............................... 56
FOURTEENTH SCHEDULE - Testing Procedures...................................... 58
FIFTEENTH SCHEDULE - Sample Computations of Monthly
Billings, Start-Up Charges,
Penalties and Bonuses................................... 63
FIGURES - ------- Figure 1 - Location Plan
Figure 2 - Temporary Fence Detail
Figure 3 - One Line Diagram
Figures 4/4A - Scope of Supply
Figure 5 - Communication
Figure 6 - Fuel Oil System
Figure 7 - Metering
(ii) 4
NOW ALL MEN BY THESE PRESENTS
This Agreement is made and entered into by and between:
HOPEWELL PROJECT MANAGEMENT COMPANY LIMITED, a private corporation,
duly organized and existing under the laws of Hong Kong with its
principal address at 64th Floor, Hopewell Centre, 183 Queen's Road
East, Hong Kong represented by its Managing Director, MR. GORDON WU,
who is duly authorised to represent it in this Agreement, hereinafter
referred to as HOPEWELL
- and -
NATIONAL POWER CORPORATION, a government owned and controlled
corporation existing under and by virtue of Republic Act No. 6395, as
amended, with its principal office at the corner of Agham Road and
Quezon Avenue, Diliman, Quezon City, Philippines, represented herein by
its President, MR. ERNESTO M. ABOITIZ, who is duly authorised to
represent it in this Agreement, hereinafter referred to as NAPOCOR.
RECITALS
WHEREAS NAPOCOR and Hopewell Holdings Limited signed a letter of intent on the 14th April, 1988 and a further letter dated 10th October, 1988 from Hopewell Holdings Limited pursuant to which they agreed, inter alia, to endeavour to agree the terms whereon HOPEWELL, a subsidiary of Hopewell Holdings Limited, would supply a gas turbine power station to NAPOCOR on a build, operate and transfer basis.
WHEREAS Pursuant to the said letters HOPEWELL has agreed to supply and NAPOCOR has agreed to accept a gas turbine power station upon the terms and subject to the conditions hereinafter appearing.
WHEREAS HOPEWELL shall cause the formation of a subsidiary Philippine corporation, to be called Hopewell Energy (Philippines) Corp., for the purpose of undertaking certain of the work in respect of the building and operating of the Power Station and perform other undertakings specified in this Agreement.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITION OF TERMS
1.01 In this Agreement and in the recitals hereto:
"ACCESSION UNDERTAKING" means an agreement in the form substantially
set out in the Twelfth Schedule pursuant to which
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HOPEWELL PHILIPPINES agrees to become a party hereto as therein provided;
"AVAILABILITY" means the maximum generating capacity from time to time of the Power Station as determined pursuant to the Availability Schedule;
"AVAILABILITY SCHEDULE" means the schedule of the generating capacity of the Power Station agreed pursuant to Clause 8.08;
"BLACK START" means the starting of the turbines of the Power Station in circumstances where, due to failure of other power stations connected to the Luzon grid, it is impossible for NAPOCOR to supply the necessary start-up electricity;
"BOI" means the Board of Investments of the Republic of the Philippines;
"CAPACITY FEES" means the fees payable by NAPOCOR to HOPEWELL in respect of the Contracted Capacity as provided in Clause 11;
"CENTRAL BANK" means the Central Bank of the Philippines;
"COMPLETION DATE" means the day upon which HOPEWELL certifies that the Power Station, capable of operating in accordance with the Operating Parameters, has successfully completed its testing;
"CONTRACTED CAPACITY" shall have the meaning given to it in the Eighth Schedule;
"CO-OPERATION PERIOD" means the period of twelve (12) years from the later of the Target Completion Date and the Completion Date, as the same may be extended from time to time pursuant to the terms hereof;
"DELIVERY POINTS" means the metering points referred to in the Seventh Schedule;
"DOWNTIME" shall have the meaning given to it in the Sixth Schedule;
"EFFECTIVE DATE" means the date on which NAPOCOR and HOPEWELL certify that all the conditions contained in Clauses 7.01, 7.02, 7.03 and 7.04 have been fulfilled to the satisfaction of NAPOCOR in the case of Clause 7.01 and fulfilled or waived to the satisfaction of HOPEWELL in the case of Clauses 7.02, 7.03 and 7.04;
"EMERGENCY" means unforeseen circumstances affecting the Luzon grid which reasonably require NAPOCOR to request HOPEWELL to supply it with power and energy as soon as practicable in order to avoid damage to NAPOCOR's electric system and/or a failure in the continuous supply of electricity from the grid;
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"ENERGY FEES" means the fees payable by NAPOCOR to HOPEWELL in respect of energy supplied to NAPOCOR as provided in Clause 11;
"EVALUATED OPERATING HOURS" shall have the meaning given to it in the Sixth Schedule;
"FORCE MAJEURE" shall have the meaning specified in Clause 16.01;
"FORCED OUTAGE" shall have the meaning given to it in the Sixth Schedule;
"FORCED OUTAGE DAY" shall have the meaning given to it in the Sixth Schedule;
"FUEL MANAGEMENT AGREEMENT" means the agreement to be entered into pursuant to Clause 9.06;
"FUEL SPECIFICATIONS" means the specifications as to the quality and method of storage, supply and delivery of the fuel for the Power Station described in Clause 9.03 and the Fourth Schedule;
"FUEL SUPPLY PROCEDURES" means the procedures and parameters for the supply and delivery of fuel by NAPOCOR described in Clause 9 and the Fourth Schedule;
"HOPEWELL PHILIPPINES" means Hopewell Energy (Philippines) Corp., a Philippine corporation in the process of being formed, and which is or shall be a subsidiary of HOPEWELL;
"MAJOR OVERHAUL" means, in relation to a turbine, the overhaul following 48,000 Evaluated Operating Hours;
"MONTH" means the period commencing immediately after the taking of a photograph of the electricity meters on the 25th of each calendar month, pursuant to the Seventh Schedule and ending upon the taking of such photograph on the 25th of the next calendar month; in the case of the first month "MONTH" means the period commencing on the first day of the Cooperation Period and ending upon the taking of a photograph of the electricity meters on the 25th of the current calendar month (or the next calendar month if the period commenced on or after the 25th of the current calendar month) and in the case of the last month "MONTH" means the period commencing immediately after the end of the immediately preceding Month and ending upon the taking of a photograph of the electricity meters on the Transfer Date;
"NOMINAL CAPACITY" shall mean 200,000 KW;
"OPERATING PARAMETERS" means the operating parameters of the Power Station described in the Second Schedule;
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"PERFORMANCE UNDERTAKING" means the agreement referred to in Clause 7.03(i);
"POWER STATION" means the power station built, or to be built, pursuant to Clause 2.01;
"PRIME" means, on any day, the rate per annum which is the average of the prime or equivalent rates of Citibank, N.A., New York, Bankers Trust Company, New York and Manufacturers Hanover Trust Company of New York as publicly announced from time to time, in force on such date and, for the purposes of this Agreement, a change in any such rate shall be effective on and from the day on which it is announced or, if such announcement provides for such change to come into effect on a later date, on and from such later date;
"PROJECT" means the design, construction, equiping, completion, testing, commissioning and operation of the Power Station;
"PROJECT SCOPE" means the scope of the supply of work of HOPEWELL in connection with the construction of the Power Station as described in the First Schedule;
"SITE" means the site for the Power Station at Navotas Metropolitan Manila as more particularly described in the First Schedule;
"SPECIFICATIONS" means the specifications of the Power Station described in the First Schedule;
"START UP FEES" means the fees payable by NAPOCOR to HOPEWELL in respect of start ups of the gas turbines as provided in Clause 11;
"SUPPLY PROCEDURES" means the procedures and parameters for the requesting of the supply of electricity by NAPOCOR described in Clause 10.01 and the Sixth Schedule;
"T-BILL RATE" means, in respect of any day for which interest based on such rate is being calculated under this Agreement, the rate per annum at which Philippine Treasury Bills (with terms of 30 days or if no such bill with a term of 30 days is issued such bill which is issued having the term nearest to 30 days) were issued by the Philippine Government on the Friday immediately preceding such day, or, if there were no Treasury Bills issued on such Friday, on the day immediately preceding such Friday on which Treasury Bills were issued provided that if, for 30 days no Philippine Treasury Bills are issued, then "T-Bill Rate" shall mean such alternative rate of interest as may be agreed between HOPEWELL and NAPOCOR at such time, or, in the absence of agreement, the rate per annum certified and evidenced by HOPEWELL to be its effective cost of borrowing at such time;
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"TARGET COMPLETION DATE" means, subject to Clause 5.02, 15th October,
1989;
"TRANSFER DATE" means the day following the last day of the
Co-operation Period; and
"TRANSMISSION LINE" means the transmission line to be installed and
connected by NAPOCOR pursuant to Clause 3.06(iv) and having the
specifications set out in the Fifth Schedule.
1.02 Any reference in this Agreement to a "CLAUSE" or a "SCHEDULE" is a reference to a clause hereof or a schedule hereto.
1.03 In this Agreement:
(i) "$" and "DOLLAR(S)" denote lawful currency of the United
States of America;
(ii) "PS" and "PESO(S)" denote lawful currency of the Republic of
the Philippines;
(iii) "MW" denotes a megawatt;
(iv) "KW" denotes a kilowatt; and
(v) "KWH" denotes a kilowatt hour.
2. THE PROJECT
2.01 HOPEWELL, having inspected the Site and finding it physically suitable for the construction and operation of a gas turbine power station, shall cause the design, development, construction, completion, testing and commissioning of a gas turbine power station with Black Start capability, capable of operating at a level within the Operating Parameters and in accordance with the Specifications and the Project Scope.
2.02 Subject as herein provided, all costs of HOPEWELL in connection with the building of the Power Station as provided in Clause 2.01 shall be borne by HOPEWELL and HOPEWELL shall be responsible for arranging all necessary funding including any available preferential credits.
2.03 NAPOCOR shall make available the Site to HOPEWELL for the purpose of building and operating the Power Station at no cost to HOPEWELL for the period from the Effective Date until the Transfer Date and HAPOCOR shall be responsible for the payment of all real estate taxes and assessments, rates and other charges in respect of the Site and the buildings and improvements thereon.
2.04 NAPOCOR shall ensure that all necessary access to and from the Site is made available to HOPEWELL, its employees, contractors, subcontractors and advisors and that all necessary utilities as provided in Section V of the First Schedule are made available at the Site as
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necessary for the construction, testing and commissioning of the Power Station.
2.05 HOPEWELL shall be responsible for the importation and transportation of equipment to the Site, the obtaining of building, construction, operating and other permits, licences and approvals for the Project, and of visas and work permits for foreign personnel, the recruitment of local labour and compliance with all local and other regulations including the payment of all fees and costs thereof.
2.06 NAPOCOR shall supply fuel and start up electricity (through the interconnection facilities with MERALCO) of the required quantity and quality and at the required time for the testing and commissioning of the Power Station, shall construct, install and connect the Transmission Line and shall take all electricity generated during testing and commissioning.
2.07 All costs of NAPOCOR (except in respect of start up electricity) in connection with its obligations under Clause 2.03, 2.04 and 2.06 shall be borne by NAPOCOR.
2.08 From the date hereof until the Transfer Date, HOPEWELL shall, directly or indirectly, own the Power Station and all the fixtures, fittings, machinery and equipment on the Site or used in connection with the Power Station which have been supplied by it or at its cost and it shall operate and manage the Power Station for the purpose of converting fuel of NAPOCOR into electricity.
2.09 Until the Transfer Date, NAPOCOR shall, at its own cost, supply and deliver all fuel for the Power Station and shall take all electricity generated by the Power Station at the request of NAPOCOR which shall pay to HOPEWELL fees as provided in Clause 11.
2.10 During the Co-operation Period NAPOCOR shall ensure the provision of all necessary utilities to the Power Station as provided in Section VI of the First Schedule Provided that NAPOCOR shall have no liability under this sub-clause where such utility is withdrawn as a result of HOPEWELL failing to pay for the utilization of the same.
2.11 On the Transfer Date the Power Station shall be transferred by HOPEWELL to NAPOCOR without the payment of any compensation.
2.12 The parties hereto shall mutually collaborate with each other in order to achieve the objectives of this Agreement and the performance by each of the parties hereto of their respective obligations hereunder.
3. Construction of the Power Station
3.01 HOPEWELL shall be responsible for the design, construction, equiping, completion, testing and commissioning of the Power Station and shall commence work upon being instructed by NAPOCOR by instructions in writing given not later than 31st December, 1988.
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3.02 In pursuance of its obligations under Clause 3.01 HOPEWELL shall have full right to:
(i) call for tenders and award contracts with or without tender;
(ii) arrange for the preparation of detailed designs and approve or
reject the same;
(iii) appoint and remove consultants and professional advisers;
(iv) purchase new and/or refurbished equipment including the gas
turbine sets;
(v) appoint, organise and direct staff, manage and supervise the
Project;
(vi) enter into contracts for the supply of materials and services,
including contracts with NAPOCOR; and
(vii) do all other things necessary or desirable for the completion
of the Power Station in accordance with the Specifications and
generally accepted engineering standards by the Target
Completion Date.
3.03 In pursuance of its obligations under Clause 3.01 HOPEWELL shall, where possible, award contracts to Philippine contractors and suppliers of materials and services provided that, in its opinion, the quality, delivery times, costs, reliability and other terms are comparable to those offered by foreign contractors and/or suppliers.
3.04 NAPOCOR shall be entitled at its own cost to monitor the progress and quality of the construction and installation work and for this purpose HOPEWELL shall:
(i) ensure that NAPOCOR and any experts appointed by NAPOCOR in
connection with the Project are afforded reasonable access to
the Site at times to be agreed with HOPEWELL provided that
such access does not materially interfere with the works
comprising the Project or expose any person on the Site to any
danger;
(ii) make available for inspection at the Site copies of all plans
and designs; and
(iii) within two months of the completion of the Power Station,
supply NAPOCOR with one set of reproduceable copies and five
sets of white print copies (or equivalent) of all "as built"
plans and designs.
3.05 HOPEWELL:
(i) shall in no way represent to any third party that, as a result
of any review by NAPOCOR, NAPOCOR is responsible for the
engineering soundness of the Power Station; and
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(ii) shall, subject to the other provisions of this Agreement, be
solely responsible for the economic and technical feasibility,
operational capability and reliability of the Power Station.
3.06 NAPOCOR shall ensure that all infrastructural requirements and utilities necessary for the completion of the Power Station in accordance with the Specifications by the Target Completion Date are made available in a timely fashion and accordingly shall at its own cost, inter alia:
(i) give vacant possession of the Site to HOPEWELL by not later
than 15 days after the Effective Date;
(ii) ensure that there is provided to the Site by not later than 15
days after the Effective Date access roads capable of taking
traffic to and from the Site and ensure that the Site is
enclosed by a temporary fence as described in the First
Schedule;
(iii) ensure that there is provided to the Site water, electricity,
telephone, telex and fax as provided and at the times set out
in Section V of the First Schedule the cost of the utilization
of which and normal fees shall be for HOPEWELL's account; and
(iv) ensure that there is installed and connected a transmission
line from the outgoing gantry of the switching facility within
the Site boundary and which is capable of operating within the
specifications set out in the Fifth Schedule.
3.07 NAPOCOR warrants and undertakes that the Site shall be suitable for the construction and operation of the Power Station including for its construction and operation within all environmental and other Philippine and local laws and regulations.
4. SPECIFICATIONS AND OPERATING PARAMETERS
4.01 The Power Station shall be constructed and equipped in accordance with the Specifications and Project Scope set out in the First Schedule.
4.02 Following the Completion Date the Power Station shall be capable of operating within the Operating Parameters set out in the Second Schedule.
5. CONSTRUCTION TIMETABLE
5.01 The parties shall work together in order to endeavour to achieve the timely completion of the Project in accordance with the following timetable:-
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Stage Completed Date - --------------- ---- Effective Date 30th November, 1988 Mobilisation 15th December, 1988 Commencement of Site Works 31st December, 1988 Testing for 100MW 15th August, 1989 Target Availability for 100MW 31st August, 1989 Testing for Completion Date 1st October, 1989 Target Completion Date 15th October, 1989
5.02 In the event that the Effective Date occurs, or the instructions referred to in Clause 3.01 are given, after 30th November, 1988 each of the other dates set out in Clause 5.01 shall be adjusted to occur later by the number of days that the Effective Date occurs, or such instructions are given, after 30th November, 1988.
5.03 In the event that, due to the fault of HOPEWELL, HOPEWELL fails to complete the Power Station as provided in Clause 4.01 within 4 weeks of the Target Completion Date, HOPEWELL shall pay NAPOCOR for each day thereafter until the Completion Date as provided in the Third Schedule.
5.04 In the event that, due to the fault of HOPEWELL, the Completion Date has not occurred on or before the day falling three hundred (300) calendar days after the Target Completion Date and it does not appear reasonably likely that the Completion Date will ever occur HOPEWELL shall pay to NAPOCOR the sum of $4,200,000 by way of liquidated damages but shall have no other liability in respect of such failure to complete the Power Station other than that provided in Clause 15.01 and upon such sum becoming payable, or being paid by HOPEWELL prior to it becoming due, HOPEWELL shall have no further liability to make payments pursuant to Clause 5.03.
5.05 Upon substantial completion of the Power Station, HOPEWELL may certify that the Power Station has successfully completed its testing and that accordingly the Completion Date has occurred notwithstanding that the Power Station is unable to produce 200 MW or to achieve the heat rates provided in Section 9 of Part A of the Second Schedule but in that event adjustments shall be made to the Capacity Fees and Energy Fees as provided in the Eighth Schedule.
6. TESTING
6.01 The parties shall meet and agree procedures, standards, protective settings and a programme for the testing of the Power Station in accordance with the Fourteenth Schedule and NAPOCOR undertakes to take all electricity generated during any such testing.
6.02 HOPEWELL shall give to NAPOCOR not less than 14 days' notice, or such lesser period as the parties hereto may agree, of its intention to commence any testing.
6.03 During the Co-operation Period, in order to ensure the proper functioning and maintenance of the Power Station, HOPEWELL shall be
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13 entitled to require that each gas turbine be operated for a period of two hours in each Month including start up time.
6.04 NAPOCOR shall ensure that there is made available for any testing supplies of fuel, start up electricity and water in sufficient quantity for the proper carrying out of such testing and of the quality specified in the Schedules hereto.
6.05 The cost of the fuel to be supplied by NAPOCOR pursuant to Clause 6.04 shall be for NAPOCOR's account.
6.06 NAPOCOR shall ensure that the Transmission Line is installed and connected in time for the first testing to take place in accordance with the agreed programme and that it is by such time capable of operating within the specifications set out in the Fifth Schedule.
6.07 NAPOCOR and/or its experts shall be entitled to be present at any testing.
6.08 Forthwith upon the completion of any testing HOPEWELL shall certify whether or not the Power Station has satisfied such test and shall provide NAPOCOR with a copy of such certificate.
7. CONDITIONS PRECEDENT
7.01 It shall be a condition precedent to this Agreement that by 30th November 1988, or such later date as the parties hereto may agree, the following are supplied to NAPOCOR by HOPEWELL, each in form and substance satisfactory to NAPOCOR or that such a condition precedent is waived by NAPOCOR:
(i) copies of the Memorandum and Articles of Association of
HOPEWELL, as certified by the company secretary of HOPEWELL in
a manner satisfactory to NAPOCOR:
(ii) copies of resolutions adopted by HOPEWELL's Board of Directors
authorising the execution, delivery and performance by
HOPEWELL of this Agreement certified by the company secretary
of HOPEWELL in a manner satisfactory to NAPOCOR;
(iii) approval of the Central Bank to make payments to HOPEWELL in
dollars as provided in this Agreement; and
(iv) a bond or guarantee of a financial institution acceptable to
NAPOCOR in respect of HOPEWELL's obligations under Clause
5.04.
7.02 It shall be a condition precedent to this Agreement that by 30th November 1988, or such later date as the parties hereto may agree, the following are supplied to HOPEWELL by NAPOCOR, each in form and substance satisfactory to HOPEWELL or that such a condition precedent is waived by HOPEWELL:
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(i) copies of the Charter and By-Laws of NAPOCOR, and of
resolutions adopted by its Board of Directors authorising the
execution delivery and performance by NAPOCOR of this
Agreement, each certified by the corporate secretary of
NAPOCOR in a manner satisfactory to HOPEWELL;
(ii) copies of such consents, licences, permits, approvals and
registrations by or with any governmental agency or other
authority in the Philippines as may be necessary to ensure
the validity and binding effect of this Agreement and to
permit the performance by NAPOCOR of its obligations under
this Agreement;
(iii) a certificate of the corporate secretary of NAPOCOR
confirming that all necessary corporate and other approvals
and action have been duly obtained and taken for the
execution, delivery and performance by NAPOCOR of this
Agreement;
(iv) a copy of the lease to NAPOCOR of the Site, certified by the
corporate secretary of NAPOCOR in a manner satisfactory to
HOPEWELL together with the agreement of the lessor and
NAPOCOR that, in the event NAPOCOR shall fail to pay any
rental or perform any of its obligations when due under the
said lease, HOPEWELL or its assignee shall be entitled, at
its sole option, to pay such rental or perform such
obligation on behalf and for the account of NAPOCOR;
(v) evidence that the lease referred to in paragraph (iv) above
has been recorded in the office of the Register of Deeds and
that HOPEWELL's interest in the Site has been duly recorded
on such lease and in the office of the Register of Deeds; and
(vi) a legal opinion of NAPOCOR's General Counsel in the form set
out in the Thirteenth Schedule.
7.03 It shall be a condition precedent to this Agreement that by 30th
November 1998, or such later date as the parties hereto may agree, the
following are received by HOPEWELL, each in form and substance
satisfactory to HOPEWELL or that such a condition precedent is waived
by HOPEWELL:
(i) a performance undertaking of the Republic of the Philippines
in respect of NAPOCOR's obligations hereunder duly executed
and delivered by the Republic of the Philippines in the form
set out in the Eleventh Schedule;
(ii) copies of all such consents, licences, permits, approvals and
registrations by or with any governmental agency or other
authority in the Philippines as may be necessary to ensure
the validity and binding effect of the Performance
Undertaking, and to permit the performance by the Republic of
the Philippines of its obligations thereunder;
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(iii) a legal opinion of the Secretary of Justice of the Republic
of the Philippines as to the validity, enforceability and
binding effect of the Performance Undertaking in form and
substance satisfactory to HOPEWELL;
(iv) the Accession Undertaking, duly executed by HOPEWELL
PHILIPPINES; and
(v) each of the documents referred to in the Ninth Schedule,
it is understood that NAPOCOR shall not be responsible to ensure that any of the above is received by HOPEWELL.
7.04 If the Effective Date has not occurred by 30th November, 1988 it shall be a condition precedent to this Agreement that HOPEWELL has notified NAPOCOR that it has been able to arrange for the purchase of appropriate gas turbines and auxiliaries for the construction of the Power Station.
7.05 If, on or before the 15th January 1989, or such later date as the parties hereto may agree, the Effective Date has not occurred, NAPOCOR shall reimburse and indemnify HOPEWELL for all costs and liabilities incurred by HOPEWELL in respect of its obligations under Clause 3 provided that NAPOCOR has given its prior written approval to HOPEWELL incurring such cost or liability; NAPOCOR's obligations under this Clause 7.05 shall be effective notwithstanding that the Effective Date has not occurred or that all or any of the conditions precedent set out in Clauses 7.01, 7.02, 7.03 and 7.04 have not been satisfied or waived.
7.06 In the event that the lease referred to in Clause 7.02(iv), or any of the approvals, consents, registrations, exemptions or other rights, laws or regulations referred to in Clause 7.02, 7.03 or the Ninth Schedule is subsequently terminated, withdrawn, rescinded or amended or any new required extension, approval, consent or registration cannot be obtained and as a result thereof the interest of HOPEWELL in the Site, the Project or the Power Station and/or HOPEWELL's expectation of its economic return (net of tax or other imposition) on its investment is materially reduced, prejudiced or otherwise adversely affected (including, without limitation, any restriction on the ability to remit funds in dollars outside of the Philippines) then the parties hereto shall meet and endeavour to agree on amendments to this Agreement and if after 60 days no such agreement has been reached the provisions of Clause 17.01 shall apply.
7.07 NAPOCOR and HOPEWELL shall meet and jointly certify that this Agreement is no longer conditional and that the Effective Date has occurred.
7.08 If all the conditions set forth in Clauses 3.01, 7.01, 7.02, 7.03 and 7.04 hereof have not been satisfied as of 1st January, 1989, the parties hereto shall meet and endeavour to agree a new effective date; if no agreement is reached on or before 15th January, 1989, this Agreement shall, subject to Clause 7.05, be declared automatically cancelled (except as required in respect of Clause 7.05) and the
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parties shall have no liability with respect to each other except as provided in Clause 7.05.
8. Operation of the Power Station
8.01 HOPEWELL shall, at its own cost, be responsible for the management, operation, maintenance and repair of the Power Station during the Co-operation Period and shall use its best endeavours to ensure that the Power Station is in good operating condition and capable of converting fuel supplied by NAPOCOR into electricity in a safe and stable manner within the Operating Parameters.
8.02 Notwithstanding Clause 8.01, it is understood and agr...
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