Wartsila NSD Latin America
WARTSILA NSD CORPORATION
CONF1DENT1ALITY AGREEMENT NON CIRCUMVENTION
AGREEMENT AND MEMORANDUM OF UNDERSTANDING
This Confidentiality Agreement, Non Circumvention and Memorandum of
Understanding ("Agreement"), effective as of November 6th, 1998, is made by and
between Wartsila NSD Ecuador ("Wartsila") and Xxxxx International ("Xxxxx"),
each singularly referred to as the Party and jointly referred to as the Parties.
Whereas:
(A) Wartsila wishes to design, obtain financing, construct, own, operate and
maintain the Arjona Power Plant project which will be a minimum of 2OMWe
with future potential expansion up to 50 MWe ("Project"), using natural gas
from the Xxxxx International Arjona (Chimichagua) gas field ("Arjona gas").
(B) Xxxxx whishes to further develop and sell natural gas to the Project under
a long term fuel supply agreement.
Now, therefore, inconsideration of the mutual benefits to he derived and the
representations, warranties, covenants and conditions herein contained, and
intending to be legally bound hereby, Wartsila and Xxxxx hereby agree as
follows:
1. This Agreement is made in order for Wartsila and Xxxxx to disclose
information required to develop the Project during the term of this
Agreement. Such information -- may consist of technical, legal, financial
and business information which may he required for the purpose of
evaluating and running models for the economical feasibility of the Project
and obtaining permits, contracts and financial closing.
2. As used herein, "Confidential Information" shall mean .any and all
technical, legal, financial and or business information. including third
party information furnished or disclosed, in whatever tangible form or
medium, by Wartsila or Xxxxx including, but riot limited to,
product/services specifications, project structure, computer programs
models, drawings, acquisition plans, financing plans, market plans and
financial data, subject to the qualifications in Section 6.
3. In handling the Confidential information, Xxxxx and Wartsila agree (a) to
use the confidential information solely for the purposes stated above; (b)
not to make disclosure of any such Confidential Information to anyone
except those employees consultants and professional advisors of the Parties
to whom disclosure 5 necessary for the purposes stated above; and (c) to
appropriately notify such employees, consultants and advisors that the
disclosure is made in confidence and to require them to keep the same in
confidence in accordance with the terms and conditions of this Agreement.
The obligations set forth herein shall be satisfied by the Parties through
the exercise of at least the same degree of care used to strict disclosure
of its own information of like importance.
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4. The Parties agree that each copy made of Confidential Information shall
contain and state the same confidential or proprietary notices or legends,
if any, which appear on the original. Nothing herein shall be construed as
granting to Xxxxx any right or license under any copyrights, inventions, or
patents now or hereafter owned or controlled by Wartsila.
5. This Agreement shall automatically expire after two (2) years after the
date first mentioned above. Upon the expiration or termination of this
Agreement or upon request of each Party, all Confidential information,
together with any copies of same as may be authorized herein, shall be
returned to the owner of such information or certified destroyed by each
Party, except for documents the Parties may be required to retain to comply
with applicable law, in which case the Party agrees the information shall
so notify the owner of such information. Each Party agrees to treat the
confidential information received as confidential for a period of five
years from the date of receipt of same unless otherwise agreed to in
writing by both parties; arid the requirements of use and confidentiality
set forth herein shall survive after expiration or earlier termination of
this Agreement.
6. The obligations imposed by this Agreement shall not apply to any
information that (a) is already in the possession of, is known to, or is
independently developed by each Party; or (b) is or becomes publicly
available through no fault of each Party; or (c) is obtained by each Party
from a third person without breach by such third person of an obligation of
confidence with respect to the Confidential Information disclosed; or (d)
is disclosed without restriction by one Party to the other; or (e) is
required to he disclosed pursuant to the lawful order of a government
agency or disclosure is required by operation of law, but in such event,
only to extent of such inquired disclosure.
7. Xxxxx agrees that for the duration of this Agreement it will not enter into
any agreement, partnership or discussions with other power plant
manufacturers, developers on other potential gas consumers of the Arjona
gas.
8. Any claim, controversy or dispute between the parties, their agents,
employees, officers, directors or affiliated agents ("Disputes") shall be
resolved by arbitration conducted under the current Rules of Conciliation
and Arbitration of the International Chamber of Commerce. The arbitrator
shall have authority to award compensatory damages only. The arbitrator's
award shall be final and binding and may be entered in any court having
jurisdiction hereof. The prevailing party, as determined by the arbitrary,
shall he entitled to an award of reasonable attorney's fees and costs. The
arbitration shall be conducted in Washington D.C Notwithstanding the
foregoing, it is expressly agreed that either Party may seek injunctive
relief or specific performance of the obligations hereunder in an
appropriate court of law or equity.
9. This Agreement, together with any and all exhibits incorporated herein,
constitutes the entire Agreement between the parties with respect to the
subject matter of this Agreement. No provision of this agreement shall be
deemed waived, amended or modified by either party, unless such waiver,
amendment or modification is made in writing and signed by both Parties.
This Agreement supersedes all previous agreements between the Parties
relating to the subject matter hereof.
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10. Any notice to be given hereunder by either party to the other, shall be in
writing and shall be deemed given upon delivery, if sent by facsimile or by
overnight courier, or five (5) days after such notice is sent if sent by
certified mail, return receipt requested.
A. Notices to Wartsila shall be addressed to:
WARTS XXX NSD Ecuador
Attn. Mr. Ben van den Xxxx
Xx. x0 xx Xxxxxxx 0000, Xxxx 0
Xxxxx, Xxxxxxx
Phone: 000-0-000000
Fax: 000-0-000000
B. Notices to Xxxxx shall be addressed to:
XXXXX INTERNATIONAL
Attn. Xx. Xxxx X. Xxxxx
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Tel:x0-000-0000000
Fax:x0-000-0000000
11. Both Wartsila and Xxxxx expressly consent to jurisdiction in the state of
New York for the purposes of any dispute which may arise under or be
related to this Agreement.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to sign this Agreement as of the date first stated above.
WARTSILA NSD XXXXX
By: /s/ Ben Van den Xxxx By: /s/ Xxxx X. Xxxxx
------------------------ -------------------
Name: Mr. Ben Van den Xxxx Name: Xx. Xxxx X. Xxxxx
Title: Vice President Wartsila NSD LA Title: CEO
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With regards to the development of the Project both Parties hereby agree as
following:
Whereas:
A. Wartsila wishes to design, obtain financing, construct, own, operate and
maintain the Arjona Power Plant project which will be a minimum of 2OMWe
with future potential expansion up to 50 Mew ("Project"), using natural gas
from the Xxxxx International Arjona (Chimichagua) gas field ("Arjona gas").
X. Xxxxx whishes to further develop it's Chimichagua gas field and sell
natural gas to the Project under a long term fuel supply agreement.
1. Objective
Both Parties hereby agree to jointly develop above mentioned Project, the
development of the Project will consist of the following phases:
Phase1: Feasibility study and due diligence of both Arjona gas field as well as
the Project.
Phase 2: Project execution
2. Tasks and duties
Tasks and duties of the Parties during above mentioned phases:
Phase 1
a) Xxxxx will perform and present all required studies and evaluations related
to availability and quality of the Arjona gas to present to potential
investors and lenders of the Project.
b) Wartsila will perform and present all required studies and evaluations
related to the Project to present to potential investors and lenders of the
Project. Such studies will consist of technical, legal, economical and
commercial evaluation of the Project.
c) Both Parties xxxx submit legal and or financial information regarding their
company and activities if so requested by potential lenders and or
investors.
Phase 2
a) Xxxxx will own the Arjona gas field and produce and supply Arjona gas in
quantities and quality agreed upon with the Project for the duration of the
fuel supply agreement to be negotiated. The price of this Arjona gas will
be market driven, both Parties nevertheless agree to exercise best efforts
to bring such price up to price levels valid today at well site in that
geographic area of the country.
b) Wartsila will engineer, arrange financing, construct, own and operate and
maintain the Project using Arjona gas. The Project cost will be market
driven, for the Project to be feasible the Project pricing nevertheless has
be meet minimum investment criteria of Wartsila.
c) Both Parties will excise best efforts to obtain 100% financing for the
Project, in such case Wartsila will own 60% of the Project and Xxxxx 40%.
Should 100% financing not be feasible than each Party will bring in equity
equal to its share in The Project, being 60% Wartsila and 40% Xxxxx. Both
Parties may bring in other investors to the Project subject to the other
Party's approval, such approval may not be unreasonable withheld.
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d) Xxxxx will assume all risk and obligations of gas supply and Wartsila will
assume all construction and operation risk of the Project.
3. Time frame
Both Parties agree that latest by the end of May 1999 all due diligence
specified in Phase 1 has be completed. Upon that that, time both Parties will
make a decision as to whether they will enter into Phase 2. conditions precedent
for Phase 2 are:
a) Approval from all competent authorities, and having in place all required
licenses and permits regarding the production, supply and commercialization
of Arjona gas to the Project.
b) Signing long term fuel supply agreement between Xxxxx and Project.
c) Approval from all competent authorities, and having in place all required
licenses and permits regarding the installation, operation of the Project.
d) Obtaining all required licenses and permits for commercialization of the
power.
e) Signing up tong term economically feasible Power Purchase Agreement between
the Project and industrial customer(s).
f) Board approval within both Xxxxx and Wartsila to proceed with the project.
g) Having assessed to the full satisfaction of both Parties and tenders the
security of the Project given the risk factor involved due to the location
of the Project.
h) Obtaining financing for the Project.
4. Development costs
Development costs of Arjona gas field and Project:
a) Xxxxx will assume full responsibility and costs related to the development
to the Arjona gas field and of the studies and evaluations mentioned in
paragraph A above.
b) Wartsila will assume full responsibility and costs related to the
development of the Project arid of the studies and evaluations mentioned in
paragraphs B above
c) Both Parties hereby agree that costs related to the development of the
Project will be reimbursed to Wartsila upon financial closing of the
Project.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to sign this Agreement as of the date first stated above.
WARTSILA NSD XXXXX
By: /s/ Ben Van den Xxxx By: /s/ Xxxx X. Xxxxx
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Name: Mr. Ben Van den Xxxx Name: Xx. Xxxx X. Xxxxx
Title: Vice President Wartsila NSD LA Title: CEO
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