DATED 18 May, 2005 BUILD, OPERATE AND TRANSFER ("BOT") PROJECT AGREEMENT for TWELVE WASTE TO ENERGY (WTE) COMBUSTOR MODULES AND ONE WTE PLANT IN The Republic of Mexico BETWEEN International Power Group Ltd. AND NAANOVO ENERGY USA, INC.
Exhibit 4
DATED 18 May, 2005
BUILD, OPERATE AND TRANSFER ("BOT")
PROJECT AGREEMENT
for
TWELVE WASTE TO ENERGY (WTE) COMBUSTOR MODULES AND ONE WTE PLANT
IN The Republic of Mexico
BETWEEN
International Power Group Ltd.
AND
NAANOVO ENERGY USA, INC.
TABLE OF CONTENTS
Clause Heading Page
------ ------- ----
1. Definition of Terms 3
2. The Project 7
3. Construction of the WTE Plants 9
4. Specifications and Operating Parameters 12
5. Construction Timetable 13
6. Testing 13
7. Conditions Precedent 14
8. Operation of the WTE Plants 18
9. Supply of Fuel 20
10. Supply of Electricity 21
11. Fees 22
72. Insurance 23
13. Transfer of Ownership 23
14. Liability 24
15. Force Majeure 25
16. Purchase Price 28
17. Change in Circumstances 29
18. Benefit of Agreement 29
19. Warranty 30
20. Notices 31
21. Dispute Resolution 32
22. Law 32
23. Jurisdiction 32
24. Taxes 33
Schedules Heading Page
--------- ------- ----
First Schedule Project Scope and Specifications 34
Second Schedule Operating Parameters 41
Third Schedule Penalty of NAANOVO on Delay of
Completion Date 47
Fourth Schedule Specifications for Fuel Supply and
Start Up Electricity 48
Fifth Schedule Transmission Line Specifications 51
Sixth Schedule Electricity Delivery Procedures 52
Seventh Schedule Measurement and Recording of
Electricity 54
Eighth Schedule Delivery of Power and Energy 56
Ninth Schedule Documentary Requirements for
the Effective Date 58
Tenth Schedule Insurance 60
Eleventh Schedule Form of Performance Undertaking 61
Twelfth Schedule Form of Accession Undertaking 63
Thirteenth Schedule Testing Procedures 68
Figures
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Figure 1 Location Plan
Figure 2 Temporary Fence Detail
Figure 3 Scope of Supply
Figure 4 Communication
Figure 5 Injection Fuel Oil Assist &
Control System
Figure 6 Metering
Signature Page 74
KNOW ALL MEN BY THESE PRESENTS
This Agreement is made and entered into by and between:
NAANOVO ENERGY USA, INC.,
a private corporation, duly organized and existing under
the laws of the State of Nevada, USA,
hereinafter referred to as "NAANOVO"
- and -
International Power Group, Ltd.
a publicly traded corporation, duly organized and existing under
the laws of the State of Delaware, USA,
hereinafter referred to as "INTERNATIONAL POWER".
RECITALS
WHEREAS NAANNOVO has proprietary modular waste to energy technology with each module capable of combusting 180 tons per day of municipal solid waste (MSW) to below 10% of its original volume and 20% of its original weight while generating a minimum of 6 megawatts of electricity as a byproduct of the process.
AND WHEREAS INTERNATIONAL POWER operates waste to energy plants utilizing
municipal solid waste in the Republic of Mexico and is confident it can secure
the municipal solid waste tonnage necessary to supply 2160 metric tons per day
of waste for energy plants using NAANOVO's technology.
AND WHEREAS NAANOVO and INTERNATIONAL POWER have identified a suitable location
for erecting such plants.
AND WHEREAS INTERNATIONAL POWER has made formal presentations to local
authorities, in the Republic of Mexico and the City of Ensenada relative to
municipal solid waste management and electric utilities, including the power grid
and ascertained that all either support or encourage a private or public entity
with private funding to proceed to apply for the necessary permits to construct
and operate a waste to energy plants in Ensenada as long as it benefits Residents
and does not negatively impact the environment, existing industries or the price
local residents pay for power.
AND WHEREAS INTERNATIONAL POWER desires to purchase such plants from NAANOVO on
the basis that NAANOVO undertake the construction and operation of the plants on
a build-operate-transfer (BOT) basis.
AND WHEREAS NAANOVO agrees that it will supply 2160 ton per day waste to energy
(WTE) plant, consisting of a total of 12 modules, capable of producing a minimum
of 72 megawatts of power to INTERNATIONAL POWER on such basis.
AND WHEREAS NAANOVO and INTERNATIONAL POWER have agreed to proceed with the
development of such plants upon the terms and subject to the conditions
hereinafter set forth.
AND WHEREAS NAANOVO undertakes to form " International Power de Mexico" (or
something thereabouts), a wholly owned subsidiary of International Power in
Mexico, incorporated for the special purpose of possessing and operating the WTE
plants to be transferred on Transfer Date in its entirety by NAANOVO to
INTERNATIONAL POWER in satisfaction of this Agreement.
AND WHEREAS NAANOVO undertakes to alone or with the cooperation of INTERNATIONAL
POWER a wholly owned subsidiary in Mexico, incorporated for the special purpose
of possessing and operating the WTE plants until the transfer dates, to be called
"NAANOVO Mexico WTE S.A." (or something thereabouts), to be transferred on the
Transfer Date in its entirety by NAANOVO to INTERNATIONAL POWER in satisfaction
of 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 NAANOVO MEXICO WTE S.A. agrees to become a party hereto
as therein provided;
"Availability" means the average minimum generating capacity
from the time to time of the WTE plants as determined pursuant
to the Availability Schedule;
"Availability Schedule" means the schedule of the generating
capacity of the WTE plants agreed pursuant to Clause 8.08;
"Capacity Fees" means the fees payable by INTERNATIONAL POWER
to NAANOVO in respect of the Contracted Capacity as provided
in Clause 11;
"Central Bank" means the Central Bank of The Republic of
Mexico;
"Completion Date" means the day upon which NAANOVO certifies
that each WTE plant is capable of operating in accordance with
the Operating Parameters and 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 one (1) year from
the later of the Target Completion Dates and the Completion
Dates, 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 INTERNATIONAL POWER
and NAANOVO certify that all the conditions contained in
Clauses 7.01, 7.02 and 7.03 have been fulfilled to the
satisfaction of INTERNATIONAL POWER in the case of Clause 7.01
and fulfilled or waived to the satisfaction of NAANOVO in the
case of Clauses 7.02 and 7.03;
"Force Majeure" shall have the meaning specified in Clause
15.01;
"Forced Outage" shall have the meaning given to it in the
Sixth Schedule;
"Forced Outage Hour" 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 and the Fourth Schedule;
"Fuel Specifications" means the specifications as to the
quality and method of storage, supply and delivery of the fuel
for the WTE plants 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 INTERNATIONAL POWER
described in Clause 9 and the Fourth Schedule;
"International Power de Mexico" means the company that IPG
designates as its Mexican operating entity under this
Agreement and, for the purpose of this Agreement, both are one
and the same.
"Major Overhaul" means, in relation to a turbine, the overhaul
as specified by the manufacturer of such turbine;
"Normal Capacity" shall mean 6,000 KW per hour per module or
72,000 KW per hour for the 12 module plant;
"Operating Parameters" means the Operating parameters of the
WTE plants described in the Second Schedule;
"Performance Undertaking" means the agreement referred to in
Clause 7.03(i);
"Project" means the design, construction, equipping,
completion, testing, commissioning and operation of the WTE
plants;
"Project Scope" means the scope of the supply of work of
NAANOVO in connection with the construction of the WTE plants
as described in the First Schedule;
"Site" means the site for the WTE plants described in the
First Schedule;
"Specifications" means the specifications of the WTE plants
described in the First Schedule;
"Substantial Completion" means the stage in the progress of
the plant construction when the plant thereof is sufficiently
complete in accordance with this Project Agreement so that
INTERNATIONAL POWER can occupy or utilize the plant for its
intended use;
"Target Completion Date" means, subject to Clause 5.02, 18
months after the Effective Date for the WTE. No plant will be
composed of more than 12 modules;
"Transfer Date" means the day following the last day of the
Co-operation Periods; and
"Transmission Line" means the transmission line to be
contracted by INTERNATIONAL POWER to connect the plant's
substation to the main transmission line that services the
institutional purchasers of the electricity generated by the
WTE plant, pursuant to Clause 3.06 (iv) and having the
specifications set out in the Fifth Schedule.
"WTE plant" means the WTE plant built, or to be built,
pursuant to Clause 2.01;
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) "MW" denotes a megawatt;
(iii) "KW" denotes a kilowatt; and
(iv) "KWH" denotes a kilowatt hour.
2. The Project
2.01 INTERNATIONAL POWER shall identify a suitable Site for the
project capable of accommodating the construction and operation of a 2160 metric
tons per day WTE plant.
2.02 NAANOVO, after determining that the identified Site is
physically suitable for the construction and operation of the proposed WTE plant
as described in Schedule One, shall, subject to INTERNATIONAL POWER obtaining all
necessary permitting for the project, cause the design, development,
construction, completion, testing and commissioning of the WTE plant capable of
operating at a level within the Operating Parameters and in accordance with the
Specifications and the Project Scope.
Subject to as herein provided, all costs of NAANOVO in connection with the building of the WTE plant as provided in Clause 2.01 shall be borne by INTERNATIONAL POWER and INTERNATIONAL POWER shall be responsible for arranging all necessary funding including any available preferential credits. It shall be understood that INTERNATIONAL POWER has engaged Providence Financial LLC to make the necessary arrangements for financing and that this contract is subject INTERNAIONAL POWER obtaining and accepting in writing a firm, irrevocable, written commitment of said financing in a minimum amount of $300 million from Providence Financial LLC and the receipt of said funds by INTERNATIONAL POWER as arranged by Providence Financial LLC or any other source of funding accepted by International Power.
2.03 INTERNATIONAL POWER shall make available the Site to NAANOVO for
the purpose of building and operating the WTE plant at no cost to NAANOVO for the
period from the Effective Date until the Transfer Date and INTERNATIONAL POWER
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 INTERNATIONAL POWER shall ensure that all necessary access to and from the Site is made available to NAANOVO, 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 necessary for
the construction, testing and commissioning of the WTE plant. If qualified,
Mexican (local labor) employees, contractors, subcontractors and advisors will
be hired by NAANOVO.
2.05 NAANOVO shall be responsible for the importation and
transportation of equipment to the Site, and of visas and work permits for
foreign personnel, the recruitment of local labor and compliance with all local
and other regulations including the payment of all fees and costs thereof.
2.06 INTERNATIONAL POWER de Mexico shall be responsible for
obtaining building, construction, operating and other permits, licenses and
approvals for the Project, and shall supply fuel of the required quantity and
quality as per the Fourth Schedule and, at the required time for the testing and
commissioning of the WTE plant, NAANOVO MEXICO WTE S.A. shall connect the plant's
electrical substation to the Transmission Line and INTERNATIONAL POWER de Mexico
shall take all electricity generated during testing and commissioning until the
end of the Cooperation Period. INTERNATIONAL POWER de Mexico shall bear the
expense and the responsibility of providing the transmission line to the site and
all utilities as described in Clause 3.06.
2.07 All costs of INTERNATIONAL POWER in connection with its
obligations under Clause 2.03, 2.04 and 2.06 shall be borne by INTERNATIONAL
POWER de Mexico.
2.08 From the date hereof, until the Transfer Date, NAANOVO shall,
directly or indirectly through NAANOVO MEXICO WTE S.A., own the WTE plant and all
the fixtures, fittings, machinery and equipment on the Sites used in connection
with the WTE plant which have been supplied by it or at its cost from payments
received from INTERNATIONAL POWER and it shall operate and manage the WTE plant
for the purpose of converting the fuel supplied by INTERNATIONAL POWER de Mexico
into electricity.
2.09 Until the Transfer Date, INTERNATIONAL POWER de Mexico shall,
at its own cost, supply and deliver all fuel for the WTE plant and shall ensure
that all of its fuel contracts with municipalities supplying waste for the WTE
plant are sufficient to satisfy the needs of the WTE plant on a sustained and
long term basis.
2.10 During the Co-operation Period INTERNATIONAL POWER de Mexico
shall ensure the provision of all necessary utilities to the WTE plant as
provided in Section VI of the First Schedule.
2.11 On the Transfer Date, all stock in NAANOVO MEXICO WTE S.A. and
the WTE plant shall be transferred by NAANOVO to INTERNATIONAL POWER de Mexico
without the payment of any compensation other than the payment of all monthly
payments due including the hold back payment.
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 WTE plant
3.01 NAANOVO shall be responsible for the design, construction,
equipping, completion, testing and commissioning of the WTE plant and shall
commence work upon the signing of this Agreement and receiving the Initial 20%
Deposit. INTERNATIONAL POWER de Mexico shall be responsible for the permitting
of the WTE plant.
3.02 In pursuance of its obligations under Clause 3.01 NAANOVO shall
have full right to:
(i) call for tenders and award contracts with or without
tender;
() arrange for the preparation of detailed designs and approve or reject the same;
(iii) appoint and remove consultants and professional advisers;
(iv) purchase equipment including the steam turbine;
(v) appoint, organize and direct staff, manage and supervise the
Project;
(vi) enter into contracts for the supply of materials and services,
including contracts with INTERNATIONAL POWER; and
(vii) do all other things necessary or desirable for the completion
of the WTE plants 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 NAANOVO shall
preferentially, where possible, award contracts to Republic of Mexico contractors
and suppliers of materials and services provided that, in its opinion, the
quality, delivery times, costs, reliability, bonding ability and other terms are
comparable to those offered by foreign contractors and/or suppliers.
3.04 INTERNATIONAL POWER shall be entitled at its own cost to
monitor the progress and quality of the construction and installation work and
for this purpose NAANOVO shall:
(i) ensure that INTERNATIONAL POWER de Mexico and any experts
appointed by INTERNATIONAL POWER in connection with the
Project are afforded reasonable access to the Site at times
to be agreed with NAANOVO 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 WTE Plant,
supply INTERNATIONAL POWER with one set of reproducible
copies and five sets of white print copies (or equivalent)
of all "as built" plans and designs with the restriction
that such plans and designs are not to be used in any way
by INTERNATIONAL POWER de Mexico, NAANOVO MEXICO WTE S.A.
or any company affiliated with INTERNATIONAL POWER for any
purpose other than to conduct inspections, regular
maintenance and repairs to the WTE plant after the said
plant is transferred from NAANOVO in accordance with Clause
2.11.
3.05 NAANOVO:
(i) shall in no way represent to any third party that, as a result
of any review by INTERNATIONAL POWER, INTERNATIONAL POWER
is responsible for the engineering soundness of the WTE
plant; and
(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
WTE plant.
3.06 INTERNATIONAL POWER de Mexico shall ensure that
all infrastructural requirements and utilities necessary
for the completion of the WTE plant are in accordance with
the Specifications by the Target Completion Dates are made
available in a timely fashion and accordingly shall at its
own cost, inter alia:
(i) give vacant possession of the Site to NAANOVO by not later
than 30 days after the Effective Date;
(ii) ensure that there is provided to the Site by not later than 30
days after the Effective Dates 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 at no cost to NAANOVO
water, sewer, electricity, telephone, Internet and fax as
provided and at the times set out in Section V of the First
Schedule; and
(iv) ensure that there is installed and connected a transmission
line to the Site switching plant within the Site boundaries
for the WTE plant and which is capable of operating within
the specifications set out in the Fifth Schedule.
3.07 INTERNATIONAL POWER de Mexico warrants and undertakes that the
Site shall be suitable for the construction and operation of the WTE plants
including for its construction and operation within all environmental and other
federal, province and local laws and regulations.
4. Specifications and Operating Parameters
4.01 The WTE plant 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 WTE plant 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 to achieve the timely
completion of the plant by the Target Completion Date.
5.02 Target Completion Date is defined in 1.01.
5.03 In the event that, due to the fault of NAANOVO, NAANOVO fails
to complete on time the WTE plant as provided in Clause 4.01, NAANOVO shall pay
INTERNATIONAL POWER a penalty fee for each day thereafter until the Completion
Date as provided in the Third Schedule.
5.04 Upon Substantial Completion of the WTE plant, NAANOVO may
certify that the WTE plant has successfully completed its testing and that,
accordingly, the Completion Date for that WTE plant has occurred.
6. Testing
6.01 The parties shall meet and agree on procedures, standards,
protective settings and a program for the testing of the WTE plant in accordance
with the Fourteenth Schedule.
6.02 NAANOVO shall give to INTERNATIONAL POWER not less than 14
days' notice, or such lesser period as the parties hereto may agree, of its
intention to commence any testing for the WTE plant.
6.03 During the Co-operation Period, in order to ensure the proper
functioning and maintenance of the WTE plant, NAANOVO shall be entitled to
require that all systems, including each turbine, be operated or shut down as it
deems necessary, but in accordance with any temporary operating permits issued
by the appropriate authorities.
6.04 INTERNATIONAL POWER 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 transportation for the fuel to be supplied by
INTERNATIONAL POWER pursuant to Clause 6.04 shall be the responsibility of
INTERNATIONAL POWER.
6.06 INTERNATIONAL POWER shall ensure that the Transmission Line is
installed and connected in time for the first testing to take place in accordance
with the agreed program and that it is by such time capable of operating within
the specifications set out in the Fifth Schedule.
6.07 INTERNATIONAL POWER and/or its experts shall be entitled to be
present at any testing.
6.08 Forthwith upon the completion of any testing NAANOVO shall
certify whether or not the WTE plant has satisfied such test and shall provide
INTERNATIONAL POWER with a copy of such certificate.
7. Conditions Precedent
7.01 NAANOVO agrees to provide to INTERNATIONAL POWER as soon as
possible after executing this document the following items for the WTE plant:
(i) copies of the Memorandum and Articles of Association of
NAANOVO, as certified by the company secretary of NAANOVO
in a manner satisfactory to INTERNATIONAL POWER;
(ii) copies of resolutions adopted by NAANOVO's Board of Directors
authorizing the execution, delivery and performance by
NAANOVO of this Agreement certified by the company
secretary of NAANOVO in a manner satisfactory to
INTERNATIONAL POWER;
(iii) a general contractor's completion/performance bond or
guarantee fom a financial institution acceptable to
INTERNATIONAL POWER for NAANOVO's obligations under Clause
5; and
(iv) a copy of the Articles of Incorporation of NAANOVO MEXICO WTE
S.A. as registered with the applicable Mexican authority,
certified by the company secretary in a manner satisfactory
to INTERNATIONAL POWER as soon as possible after this
company is formed.
7.02 INTERNATIONAL POWER agrees to provide NAANOVO as soon as
possible after executing this document the following items in a form and
substance satisfactory to NAANOVO, unless this condition or any part of it is
waived by NAANOVO:
(i) copies of the Charter and By-Laws of INTERNATIONAL POWER, and
of resolutions adopted by its Board of Directors
authorizing the execution delivery and performance by
INTERNATIONAL POWER of this Agreement, each certified by
the corporate secretary of INTERNATIONAL POWER in a manner
satisfactory to NAANOVO;
(ii) copies of such consents, licenses, permits, approvals, and
registrations by or with any governmental agency or other
authority in the USA as may be necessary to ensure the
validity and binding effect of this Agreement and to permit
the performance by INTERNATIONAL POWER of its obligations
under this Agreement;
(iii) a certificate of the corporate secretary of INTERNATIONAL
POWER confirming that all necessary corporate and other
approvals and actions have been duly obtained and taken for
the execution, delivery and performance by INTERNATIONAL
POWER of this Agreement;
(iv) a copy of the deed or lease to INTERNATIONAL POWER of the
Site, certified by the corporate secretary of INTERNATIONAL
POWER in a manner satisfactory to NAANOVO together with the
agreement of the lesser, if any, and INTERNATIONAL POWER
that, in the event INTERNATIONAL POWER shall fail to pay
any rental or perform any of its obligation when due under
the said lease, NAANOVO or its assignee shall be entitled,
at its sole option, to pay such rental or perform such
obligation on behalf and for the account or INTERNATIONAL
POWER;
() evidence that the lease or deed referred to in paragraph (iv) above has been recorded in the
office of the Register of Deeds or other such office of the applicable land authority and
that NAANOVO's interest in the Site has been duly recorded on such lease or deed and
in the office of the Register of Deeds; and
() evidence of the approval of INTERNATIONAL POWER to NAANOVO's occupation and use of the
Site, as contemplated in this Agreement and at no cost to NAANOVO, from the
Effective Date to the Transfer Date.
(vii) evidence of INTERNATIONAL POWER obtaining and accepting in
writing a firm, irrevocable, written commitment of said
financing in a minimum amount of $300 million from
Providence Financial LLC and the receipt of said funds by
INTERNATIONAL POWER or arranged by Providence Financial
LLC.
7.03 The parties agree as soon as possible after executing this
document the following items are received by NAANOVO, each in form and substance
satisfactory to NAANOVO:
(i) each of the documents referred to in the Ninth Schedule;
(ii) a Permit to Construct the WTE plants from the NCUAQMD provided
by INTERNATIONAL POWER;
(iii) an advice as soon as possible from NAANOVO's primary
suppliers that NAANOVO is able to procure the purchase of
appropriate equipment, including steam turbines and
auxiliaries for the construction of the WTE plants within
the time frames anticipated by this Agreement; and
(iv) it is understood that INTERNATIONAL POWER shall not be responsible to ensure that any of the above is received by NAANOVO except as stipulated.
7.04 After execution of this Agreement, if, on or before the date
as the parties hereto may agree, the Effective Date has not occurred,
INTERNATIONAL POWER shall reimburse and indemnify NAANOVO for all reasonable
costs and liabilities incurred by NAANOVO in respect of its obligations under
Clause 3; INTERNATIONAL POWER'S obligations under this Clause 7.04 shall be
effective only after the 20% deposit, 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 and 7.03 have not been satisfied or waived.
7.05 In the event that the lease or deed 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 NAANOVO in the Site, theProject or the WTE plant
and/or NAANOVO's expectation of its economic return (net of tax or other
imposition) on its investment is materially reduced, prejudiced or otherwise
adversely affected, then the parties hereto shall meet and endeavor to agree on
amendments to this Agreement and if after 60 days no such agreement has been
reached the provisions of Clause 17 shall apply.
7.06 INTERNATIONAL POWER and NAANOVO shall meet and jointly certify
that this Agreement is no longer conditional and that the Effective Date has
occurred.
7.07 If all the conditions set forth in Clauses 3.01, 7.01, 7.02 and
7.03 hereof have not been satisfied within 30 days of the signing of the
Agreement, the parties hereto shall meet as soon as possible and endeavor to
agree to a new effective date; if no agreement is reached within 90 days of the
signing of the Agreement, this Agreement shall, subject to Clause 7.04, be
declared automatically cancelled (except as required in respect of Clause 7.04)
and the parties shall have no liability with respect to each other except as
provided in Clause 7.04.
8. Operation of the WTE Plant
8.01 NAANOVO shall be responsible for the management, operation,
maintenance and repair of the WTE plant during the Co-operation Period and shall
use its best endeavors to ensure that the WTE plant is in good operating
condition and capable of converting fuel supplied by INTERNATIONAL POWER into
electricity in a safe and stable manner within the Operating Parameters. NAANOVO
shall be compensated as per the Eighth Schedule.
8.02 Notwithstanding Clause 8.01, it is understood and agreed by
INTERNATIONAL POWER that in order to undertake necessary overhaul, maintenance,
inspection and repair NAANOVO shall be entitled to periods of Downtime as
provided in the Sixth Schedule and, by not later than the Completion Date, the
parties hereto shall agree to a schedule for Downtime during the course of the
succeeding year which shall be revised as provided in the Sixth Schedule.
8.03 NAANOVO undertakes that during the Co-operation Period, subject
to the supply of the necessary fuel pursuant to Clause 9 and to the other
provisions hereof, it will operate the WTE plant to convert such fuel into
electricity in accordance with Clause 10.
8.04 In pursuance of its obligations under Clause 8.01 NAANOVO shall
have full right to:
(i) enter into contracts for the supply of materials and
services, including, contracts with INTERNATIONAL POWER;
(ii) appoint and remove consultants and professional advisers;
(iii) purchase replacement equipment;
(iv) appoint, organize and direct staff, manage and supervise the WTE
plants;
(v) establish and maintain regular inspection, maintenance and
overhaul procedures; and
(vi) do all other things necessary or desirable for the running
of each WTE plant within the Operating Parameters.
8.05 INTERNATIONAL POWER shall ensure that all infrastructural
requirements and utilities necessary for the operation of the WTE plant within
the Operating Parameters are made available in a timely fashion and according to
the First Schedule.
8.06 INTERNATIONAL POWER and NAANOVO shall, from time to time, meet
and discuss and agree on safety guidelines for the operation of the WTE plants
within the Operating Parameters and following such agreement NAANOVO shall
operate the WTE plant within such safety guidelines.
8.07 NAANOVO shall operate the WTE plant in accordance with all
country, local and environmental laws and regulations in force as of the date of
this Agreement and shall comply with any changes in such laws and regulations and
with any new laws and regulations provided that if to comply with such changes
or new laws and regulations except where they would:
(i) result in the WTE plant being unable to operate in
accordance with the Specifications or within the Operating
Parameters; or
() in the opinion of NAANOVO, result in the interest of NAANOVO in the Site, the Project or the
WTE plant and/or NAANOVO's expectation of its economic return (net of tax or other
imposition) on its investment being materially reduced, prejudiced or otherwise adversely
affected, then the parties shall meet and endeavor to agree on amendments to this Agreement
and if after 60 days no such agreement has been reached the provisions of Clause 17 shall
apply.
() NAANOVO shall maintain insurance to compensate INTERNATIONAL POWER if during
NAANOVO's construction and / or operation of the plant, NAANOVO is unable to comply
with changes described in Clause 8.07. NAANOVO's position will also be protected by the
completion bond set forth by the construction company hired.
8.08 Availability will be determined by reference to Downtime
calculated as provided in the Sixth Schedule and the parties will agree on a
schedule of Availability which shall be reviewed from time to time; in agreeing
to such Availability Schedule, NAANOVO shall take account the requirements of
INTERNATIONAL POWER but in no event shall NAANOVO be obliged to agree to
Availability in excess of, or at times other than, that permitted after taking
account of Downtime.
9. Supply of Fuel
9.01 Throughout the Co-operation Period INTERNATIONAL POWER shall
at all times supply and deliver all MSW fuel and start up electricity required
by NAANOVO and necessary for the WTE plant to generate the electricity required
to be produced by it pursuant to Clause 10.
9.02 The transportation cost of the fuel to be supplied by
INTERNATIONAL POWER pursuant to Clause 9.01 shall be at INTERNATIONAL POWER's
expense.
9.03 All fuel and start up electricity to be supplied by
INTERNATIONAL POWER shall be of the quality and supplied and delivered in the
manner described in the Fourth Schedule.
9.04 All fuel shall be tested as provided in the Fourth Schedule,
and NAANOVO shall, at all times, be entitled to reject any fuel if the results
of any test relating to it show that it does not comply with the Fuel
Specifications but INTERNATIONAL POWER shall not have any liability to NAANOVO
for damage to the WTE plant resulting from the fuel not complying with the Fuel
Specifications.
9.05 INTERNATIONAL POWER shall when requested by NAANOVO ensure that
at all times the necessary fuel stocks required by NAANOVO are stored within WTE
plant or are available for immediate delivery to the Site.
10. Supply of Electricity
10.01 Subject to INTERNATIONAL POWER supplying the necessary fuel and
start up electricity pursuant to Clause 9, NAANOVO agrees to convert such fuel
into electricity in accordance with the procedures set out in the Sixth Schedule
and the Operating Parameters set out in the Second Schedule.
10.02 The quantities of electricity produced by NAANOVO, through
NAANOVO MEXICO WTE S.A., shall from time to time during the Cooperation Period
be monitored, measured and recorded in accordance with the provisions of the
Seventh Schedule. A copy of said results will be delivered to INTERNATIONAL POWER
de Mexico.
10.03 NAANOVO shall notify INTERNATIONAL POWER promptly of the
occurrence of any event (other than scheduled Downtime) which results or may
result in the WTE plant being unable to operate in accordance with the
Specifications and within the Operating Parameters.
10.04 The place for delivery of the electricity shall be power
substations for each plant where the transmission line is connected.
11. Fees
11.01 From the Completion Date until and including the Month in which
the Transfer Date falls, NAANOVO, through NAANOVO MEXICO WTE S.A., and
INTERNATIONAL POWER de MEXICO shall split the fees from revenues generated from
the power purchase agreement during the Cooperation Period.
11.02 Each Month NAANOVO will deliver to INTERNATIONAL POWER a record
of the tonnage of fuel received at the WTE.
11.03 All fees payable to NAANOVO pursuant to this Clause shall be
paid together with applicable sales taxes (which shall be separately stated in
all invoices).
11.04 INTERNATIONAL POWER shall be responsible for ensuring that the
WTE plant tipping fees, calculated as provided in the Eighth Schedule, are
identified and properly provided to NAANOVO for the fuel contracts it negotiates
for supplying the WTE plant in accordance with Clause 2.09.
11.05 NAANOVO MEXICO WTE S.A. and INTERNATIONAL POWER de MEXICO, INC.
shall endeavor to work together to secure interim and or long term power purchase
agreements for the electricity to be produced by the WTE plant during and after
the Cooperation Period, but INTERNATIONAL POWER de MEXICO is ultimately
responsible for negotiating agreements in this regard prior to the Effective
Date.
11.06 If any amount payable by INTERNATIONAL POWER hereunder whether
in respect of fees or otherwise is not paid on or before the due date
INTERNATIONAL POWER shall pay interest thereon, calculated at the rate of Prime
plus 2% p.a. from the date upon which it was due until the date upon which such
amount is received by NAANOVO.
11.07 All payments made by INTERNATIONAL POWER hereunder shall be
made free and clear of and without any deduction for or on account of any set-off, counter claim, tax or otherwise except as required by law or in payment of
penalties referred to in Clause 5.03. Any other legitimate offsets INTERNATIONAL
POWER or NAANOVO may be entitled to under this agreement will be provided for as
per Clause 11.08.
11.08 If INTERNATIONAL POWER or NAANOVO disputes the amount specified
in any invoice it shall so inform NAANOVO or INTERNATIONAL POWER within seven (7)
days of receipt of such invoice; if the dispute is not resolved by the due date,
INTERNATIONAL POWER or NAANOVO shall pay the full amount on or before such date
and the disputed amount shall be resolved within fourteen (14) days of the due
date for such invoice and any sum refunded to INTERNATIONAL POWER shall be paid
together without interest pursuant to Clause 11.06 from the due date of such
invoice.
12. Insurance
NAANOVO shall be responsible to ensure that there is effected insurance
as provided in the Tenth Schedule and shall provide INTERNATIONAL POWER with
copies of all policies of insurance effected by it. Subject to the terms of
Articles 15.07 and unless INTERNATIONAL POWER has failed to perform any of its
payment obligations hereunder and such failure is continuing, the proceeds of
claims against such insurances, except third party liability and workmen's
compensation insurance, with respect to damage or other casualty to the WTE
plants shall be applied by NAANOVO to the extent necessary to repair or restore
the WTE plants to their previous condition.
13. Transfer of Ownership
13.01 Subject to Clause 16, on the Transfer Dates NAANOVO shall make
transfer to INTERNATIONAL POWER de MEXICO as in Clause 2.11.
13.02 Six months prior to the Transfer Date, INTERNATIONAL POWER and
NAANOVO shall meet and agree to the inventories involved, the mechanics of
transfer and security arrangements. NAANOVO shall maintain insurance acceptable
to INTERNATIONAL POWER and INTERNATIONAL POWER's recourse for discrepancies
between such inventories and the actual fixtures, fittings, plant and equipment
shall be through the insurance and not NAANOVO except for the payment of the
deductable if it exists.
13.03 The WTE plant and all other equipment transferred pursuant to
this Clause 13 shall be transferred on an "as is" basis and any warranties which
would otherwise be implied by statute or otherwise, including, without
limitation, warranties as to title, fitness for the purpose, the absence of
patent or inherent defects, description or otherwise of whatsoever nature shall
survive beyond and be enforceable.
13.04 INTERNATIONAL POWER shall be responsible for all costs
expenses including legal fees and taxes or duties) incurred in connection with
the transfer referred in this Clause 13 and shall at its own cost obtain or
effect all governmental and other approvals, licenses, registrations and filings
and take such other action as may be necessary for the transfer contemplated in
this Clause 13, and reimburse NAANOVO on demand for all such costs and expenses
incurred by NAANOVO in respect of such transfer.
14. Liability
14.01 In the event that, in breach of its obligations hereunder,
NAANOVO fails to construct the WTE plants, NAANOVO shall reimburse and indemnify
INTERNATIONAL POWER for all costs and liabilities incurred by INTERNATIONAL POWER
in respect of INTERNATIONAL POWER's obligations under Clause 2 or Clause 3.
14.02 NAANOVO's liability to INTERNATIONAL POWER arising from any
breach of this Agreement or otherwise in connection with the design, construction
and operation of the WTE plants shall be limited to payments as provided in
Clauses 5.03, 5.04 and 14.01 and the penalties as provided in the Eighth
Schedule.
14.03 INTERNATIONAL POWER shall indemnify and hold NAANOVO, its
officers and employees harmless against any claims of any person who directly or
indirectly suffers as a result of an interruption of electricity supply or any
other disruption or surge of electricity supply.
14.04 Subject to Clause 14.03, the parties shall mutually and
reciprocally hold each other and their respective officers and employees free of
and harmless from any claims or suits of any third party.
14.05 Except where otherwise stated in this Agreement, the duties,
obligations and liabilities of the parties hereto are intended to be several and not joint or collective and nothing contained in this Agreement shall be construed to create an association, trust, partnership or joint venture amongst the parties hereto and each party shall be liable individually and
severally for its own obligations under this Agreement.
15. Force Majeure
15.01 No failure or omission to carry out or observe any of the
terms, provisions or conditions of this Agreement shall give rise to any claim
by any party hereto against any other party hereto or be deemed to be breach of
this Agreement if the same shall be caused by or arise out of:
(i) (other than as referred to in paragraph (ii) below), any war,
declared or not or hostilities, or of belligerence,
blockade, revolution, insurrection, riot, public disorder,
expropriation, requisition, confiscation or
nationalization, export or import restrictions by any
governmental authorities, closing of harbors, docks,
canals, or other assistances to or adjuncts of the shipping
or navigations of or within any place, rationing or
allocation, whether imposed by law, decree or regulation
by, or by noncompliance of industry at the insistence of
any governmental authority, or fire, unusual flood,
earthquake, volcanic activity, storm, lightning, tide
(other than normal tides), tidal wave, perils of the sea,
accidents of navigation or breakdown or injury of vessels,
accidents to harbors, docks, canals, or other assistances
to or adjuncts of the shipping or navigation, epidemic,
quarantine, strikes or combination of workmen, lockouts or
other labor disturbances, or any other event, matter or
thing, wherever occurring, which shall not be within the
reasonable control of the party affected thereby; or
(ii) war, declared or not or hostilities involving the USA or
Mexico, or of belligerence, blockade, revolution,
insurrection, riot, public disorder, expropriation,
requisition, confiscation or nationalization by or
involving the USA or Mexico, export or import restrictions
by any governmental, regional or municipal authorities of
or within the USA or Mexico, closing of harbors, docks,
canals, or other assistances to or adjuncts of the shipping
or navigation of or within the USA, rationing or
allocation, whether imposed by law, decree or regulation
by, or by compliance of industry at the insistence of, any
governmental authority of or within the USA or Mexico, or
any other event, matter or thing, wherever occurring, which
shall be within the reasonable control of INTERNATIONAL
POWER or the government of the USA or Mexico or any agency
or regional or municipal authority thereof, each of the
foregoing events, matters or things being called "Force
Majeure" in this Agreement.
15.02 Notwithstanding Clause 15.01, INTERNATIONAL POWER:
() shall not be entitled to claim for itself Force Majeure in respect of any Force Majeure mentioned
in sub-paragraph (ii) of Clause 15.01 and INTERNATIONAL POWER must carry
insurance for the benefit of NAANOVO; and
(ii) shall not be relieved of its obligation to make payments of
Capacity Fees as provided in Clause 11.01 by the occurrence
of any Force Majeure mentioned in sub-paragraph (ii) of
Clause 16.01 whether affecting INTERNATIONAL POWER or
NAANOVO once the WTE plants are in operation.
15.03 The party invoking Force Majeure shall:
(i) notify the other parties as soon as reasonably possible by
letter or fax of the nature of the Force Majeure and the
extent to which the Force Majeure suspends the affected
party's obligations under this Agreement; and
(ii) resume performance of its obligations as soon as possible after
the Force Majeure condition no longer exists.
15.04 If Force Majeure applies prior to the Completion Date the
parties will meet to discuss a revised timetable for the completion of the
Project and if the Force Majeure has applied for a period in excess of 180 days
and such Force Majeure is mentioned in sub-paragraph (ii) of Clause 15.01, the
provisions of Clause 15.07 shall apply.
15.05 If Force Majeure applies by the occurrence of any Force Majeure
mentioned in sub-paragraph (1) of Clause 15.01 during the Co-operation Period,
the Co-operation Period shall be extended by a period equal to that during which
the effect of the Force Majeure applies provided that if such effect applies for
a period in excess of 180 days the parties hereto will meet to discuss the basis
and terms upon which the arrangements set out in this Agreement may be continued.
15.06 The parties hereto will consult with each other and take all
reasonable steps to minimize the losses of either party resulting from Force
Majeure.
15.07 If any event of Force Majeure occurs which causes damage to the Project or the WTE plant and such event or such damage would not ordinarily be insured against by INTERNATIONAL POWER then NAANOVO shall not be obliged to reinstate the WTE plant, or, as the case may be, complete the building of the same, until the parties hereto have agreed upon the terms for such reinstatement or completion in a manner which will ensure that NAANOVO's economic return on its investment is substantially maintained and not prejudiced in any material way and INTERNATIONAL POWER agrees that it shall promptly, and in good faith, enter into discussions with NAANOVO to reach such agreement.
16. Purchase Price
16.01 Upon receipt of payment in full of the agreed purchase price
of up to $300,000,000.00 (three hundred million dollars) on or before the
Transfer Dates, including the Initial Deposit of 20%, and all draw down payments
(to be negotiated before the Effective Dates) and the final hold back of 10% (the
terms to be negotiated by the Effective Dates), NAANOVO shall immediately cause
the Transfer of the WTE plant pursuant to Clause 13.
16.02 The purchase price in dollars, payable pursuant to Clause
16.01, will be the total amount payable as aforesaid, with the exception of any
outstanding amounts owing to NAANOVO during the Cooperation Period pursuant to
Clause 11, which shall also be paid within 30 days of the Transfer Date.
16.03 NAANOVO shall warrant that following receipt of the purchase
price and upon Transfer of the WTE plant, the WTE plant shall be free from any
lien or encumbrance created by NAANOVO.
16.06 In the event that the provisions of Clause 15.04 apply then
there shall be deducted from the sum payable pursuant to Clause 16.01 an amount
equal to the value, if any, of any insurance proceeds received by NAANOVO in
respect of the event leading to the operation of the provisions of Clause 15.04.
17. Change in Circumstances
In the event that as a result of any laws or regulations of the Republic
of Mexico, or any agency or other body under the control of the Government of the
Republic of Mexico or any regional or municipal authority thereof, coming into
effect after the date hereof, or as a result of any such laws or regulations
(including any official interpretation thereof which NAANOVO has relied upon in
entering into this Agreement) in force at the date hereof being amended, modified
or repealed or as a result of an increase in the cost of insurances or inability
to renew insurances (unless such increase is due solely to NAANOVO's prior
performance in the operation of the WTE plant) the interest of either NAANOVO or
INTERNATIONAL POWER in the Site, the Project or the WTE plant and/or NAANOVO's
expectation of its economic return (net of tax or other imposition) on its
investment is materially reduced, prejudiced or otherwise adversely affected,
then the parties hereto shall meet and endeavor to agree to amendments to this
Agreement and if after 90 days no such agreement has been reached the Party
negatively affected shall be free to pursue its legal remedies in a Court of Law
having applicable jurisdiction.
18. Benefit of Agreement
18.01 INTERNATIONAL POWER may not assign or transfer all or any part
of its rights, benefits or obligations hereunder Provided that this Clause shall
not prevent INTERNATIONAL POWER from merging or consolidating with any other
company which is wholly owned by the a parent company, where the surviving entity
adopts and becomes fully liable to perform INTERNATIONAL POWER's obligations
hereunder.
18.02 NAANOVO may not, subject to Clause 18.03, transfer all or any
of its obligations hereunder but may, for the purposes of arranging or
rearranging finance for the Project, assign or transfer to any person providing
finance to the Project all or any part of its rights and benefits hereunder but
not its obligations and INTERNATIONAL POWER shall duly acknowledge any such
assignment or transfer of which it is given notice.
18.03 The importation into the Republic of Mexico of all equipment
for the Project and all other work in connection with the Project which
necessarily has to be performed in the Republic of Mexico and which NAANOVO
agrees to be responsible for hereunder shall be carried out by NAANOVO MEXICO WTE
S.A. which shall undertake to perform NAANOVO's obligations to perform such work
and in consideration of which INTERNATIONAL POWER shall pay fees as provided in
Clause 11; NAANOVO MEXICO WTE S.A., in carrying out such work and receiving such
fees shall act on its own behalf and for its own benefit, and not as an agent or
representative of NAANOVO. For such purpose, NAANOVO, INTERNATIONAL POWER and
NAANOVO MEXICO WTE S.A. (whose participation NAANOVO shall procure) shall execute
and deliver the Accession Undertaking, upon the effectiveness of which NAANOVO
MEXICO WTE S.A. shall become a party hereto without the need for any further
action on the part of NAANOVO or INTERNATIONAL POWER and the rights and
obligations of INTERNATIONAL POWER and NAANOVO under this Agreement shall be
transferred and amended in accordance with the terms of the Accession
Undertaking, as if NAANOVO MEXICO WTE S.A. had executed this Agreement as amended
by the terms of the Accession Undertaking.
19. Warranty
NAANOVO hereby warrants that neither it nor its representatives have offered any
government officer and/or INTERNATIONAL POWER official or employee any
consideration or commission for this Agreement nor has it or its representatives
exerted or utilized any corrupt or unlawful influence to secure or solicit this
Agreement for any consideration or commission; that NAANOVO shall not subcontract
any portion or portions of the scope of the work of the Agreement awarded to any
official or employee of INTERNATIONAL POWER or to the relatives within the third
degree of consanguinity or affinity of INTERNATIONAL POWER officials who are
directly or indirectly involved in contract awards or project prosecution and
that if any commission is being paid to a private person, NAANOVO shall disclose
the name of the person and the amount being paid and that any violation of this
warranty shall constitute a sufficient ground for the rescission or cancellation
of this Agreement or the deduction from the contract price of the consideration
or commission paid without prejudice to the filing of civil or criminal action
under anti-graft laws and other applicable laws against NAANOVO and/or its
representatives and INTERNATIONAL POWER's officials and employees.
20. Notices
20.01 Unless otherwise stated, each communication to be made
hereunder shall be made in writing but, unless otherwise stated, may be made by
fax or letter.
20.02 Any communication or document to be made or delivered
by one party to another pursuant to this Agreement shall be made or delivered to
that other at its address specified herein or such other address notified by that
party to the other parties by giving not less than 15 days notice of such change
of address, and shall be deemed to have been made or delivered:
() in the case of any communication made by fax with correct answer back (at the number
identified with the relevant party's signature below), when dispatched; and
() in the case of any communication made by letter, when left at that address or otherwise
received by the addressee.
20.03 The addresses of the Parties for Notice purposes shall be
as follows:
For INTERNATIONAL POWER:
Xxxxx X. Xxxxxxx
0 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
For NAANOVO ENERGY USA, INC.:
c/o Xxxxx Xxxxxx Xxxxxx, President
Naanovo Energy USA, Inc.
0000 XX Xxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxx, 00000 XXX
21. Dispute Resolution
21.01 Throughout the term of this Agreement representatives of the
Directors of INTERNATIONAL POWER, NAANOVO and NAANOVO MEXICO WTE S.A. shall meet
regularly at not less than quarter-yearly intervals to discuss the progress of
the Project and the operation of the WTE plants in order to ensure that the
arrangements between the parties hereto proceed on a mutually satisfactory basis.
21.02 The parties hereto agree that in the event that there is any
dispute or difference between them arising out of this Agreement or in the
interpretation of any of the provisions hereof they shall endeavor to meet
together in an effort to resolve such dispute by discussion between them but
failing such resolution the Chief Executives of NAANOVO and INTERNATIONAL POWER
shall meet to resolve such dispute or difference and the joint decision of such
Chief Executives shall be binding upon the parties hereto and in the event that
a settlement of any such dispute or difference is not reached pursuant to this
sub-clause then the provisions of Clause 23 shall apply.
22. Law
This Agreement shall be governed by and construed in accordance with the laws of
the United States of America, State of Florida, Dade County.
23. Jurisdiction
23.01 The parties hereto submit to the non-exclusive jurisdiction of
the proper courts of the State of Florida, Dade County for the hearing and
determining of any action or proceeding arising out of or in connection with this
Agreement.
23.02 To the extent that INTERNATIONAL POWER may in any jurisdiction
claim for itself or its assets or revenues immunity from suit, execution,
attachment (whether in aid of execution, before judgment or otherwise) or other
legal process and to the extent that in any such jurisdiction there may be
attributed to itself or its assets or revenues such immunity (whether or not
claimed) INTERNATIONAL POWER agrees not to claim and irrevocably waives such
immunity to the full extent permitted by the laws of such jurisdiction.
24. Taxes
INTERNATIONAL POWER shall be responsible for the payment of:
(i) all taxes, import duties, fees, charges and other levies imposed
by the National Government of the Republic of Mexico or any
agency or instrumentality thereof to which NAANOVO or
NAANOVO MEXICO WTE S.A. may at any time be or become
subject in or in relation to the performance of their
obligations under this Agreement.
(ii) all real estate taxes and assessments, rates and other charges
in respect of the Site, the buildings and improvements
thereon and the WTE plant.
AS WITNESS the hands of the duly authorized representatives of the parties hereto on the 6th day of May, in the year two thousand and five.
FIRST SCHEDULE
PROJECT SCOPE AND SPECIFICATIONS
I. Scope of Agreement
NAANOVO shall be responsible for the design, development, delivery,
installation/erection including civil works except for that which INTERNATIONAL
POWER shall be required to provide, testing and commissioning of seventeen 180
ton per day WTE modules configured into WTE plants.
II. The Site
The plant each having twelve WTE modules are to be located near the City of
Ensenada, BC Norte, Mexico or any other site agreed to by NAANOVO and
INTERNATIONAL POWER to be determined on or before the Effective Date. A copy or
copies of the registered survey plans for the property shall be attached to this
Agreement as figure 1.
INTERNATIONAL POWER will clear and prepare the Sites for occupation and give
NAANOVO vacant possession. Any overhead obstructions, e.g., distribution
electricity lines, currently running across any Site will be relocated off the
Site by INTERNATIONAL POWER and INTERNATIONAL POWER will erect a temporary
security fence around the perimeter in accordance with generally accepted
construction security standards, as shown in figure 2, to be attached.
INTERNAIONAL POWER will provide NAANOVO with specific information regarding
potential interferences including height, width, length and locations.
INTERNATIONAL POWER will also supply Site drawings with interferences located.
NAANOVO will provide cost estimates for utilities and water piping required.
III. Extent of Works/Supply
In pursuance to its obligations under Section I, NAANOVO shall be responsible
for:
1. Complete design, development and construction on the Site
of the WTE plants based on the final mix of steam and low temperature (LTT)
turbine units decided upon by NAANOVO.
2. Civil Works
2.1 Site development including grading, gravel surfacing
and drainage of plants.
2.2 Construction of concrete foundations.
2.3 Construction of access road within the Site and
permanent fence around the Site.
2.4 Construction of cable trenches.
2.5 Pile driving, if required.
2.6 Construction of waste storage buildings with dumping
pits, primary combustor buildings, sound-insulated
primary and LTT turbine rooms, office, control room,
workshops, lavatories and other utility rooms.
2.7 Construction of yard weigh-scale.
2.8 Any paving in addition to a parking lot and access road
and landscaping desired by INTERNATIONAL POWER shall
be in accordance with additional costs to be
mutually agreed to by NAANOVO and INTERNATIONAL
POWER. This work shall be carried out by NAANOVO
and paid by INTERNATIONAL POWER above the stipulated
purchase price.
3. Electro-Mechanical Works
Supply, installation/erection, tests and commissioning to put
into operation the required number of generation units and its
corresponding minimum gross aggregate capacity of 6 MW per
installed WTE module.
3.1 Steam turbine packages, consisting of the turbine,
furnace, boiler, condenser and its auxiliaries,
including air intake system, exhaust system, cooling
system, lubricating oil system, municipal solid
waste fuel system, starting system.
3.2 Generator packages complete with necessary equipment
and accessories.
3.3 Electrical equipment; including main and auxiliary
transformers; metal clad switchgear, control
switchboard; motor control center, including control
panels, direct current system complete with battery
charger, inverters; required low and high voltage
equipment devices and accessories including
necessary cables and hardware for interconnection to
the switchyard; metering and line protection
compatible with the existing power grid system
(which will be notified to NAANOVO prior to the
Effective Date), to be shown in figure 1 attached.
3.4 The extent of the work and supply of NAANOVO
pursuant to 3.3 shall be in accordance with figure 3
attached.
3.5 Required instrumentation indicators, protection,
control and automation of steam and LTT turbine
units and their auxiliaries, complete with necessary
supervisory devices, electronic modules for control
and protection, data acquisition system, for safe
and reliable operation of the WTE plants.
3.6 Air conditioning system for the protection of
electrical equipment and instruments at the local
control room.
3.7 Fire protection and alarm systems.
3.8 Instrument air system (if necessary).
3.9 Handling plants for maintenance and repair.
3.10 Miscellaneous electrical works, including
lighting, grounding and lightning protection.
3.11 Voice and data communication systems in
accordance with figure 4 attached inside the WTE
plants and to and from the [ Air Quality Authority
], the details of which will be notified to NAANOVO
prior to the Effective Date.
3.72 Injection fuel oil or natural gas control system,
for occasional use in maintaining combustor
temperature control, including valves and piping
systems as shown in figure 5 attached.
3.13 Fire suppression system including emergency water
tank, hydrant and piping systems.
3.14 Special tools.
IV Design Criteria
1. Primary Steam Turbine and LTT Unit for Each Module
The primary steam turbine and LTT unit, with a combined capacity of
not less than 6MW shall be capable of delivering the said
output at mean and extreme Site conditions relative to
elevation, ambient air temperature, relative humidity,
temperature range and noise level.
2. Fuel
Fuel specifications will be in accordance with the Fourth
Schedule.
3. Metering
All primary operating systems and pollution control equipment
installed relative to each WTE module will monitored at all
times during the operation of each installed WTE module in
accordance with acceptable monitoring devices and monitoring
schedules, the details of which will be notified to
INTERNATIONAL POWER after the completion of preliminary
engeneering work and time indicated in figure 6, to be
attached.
4. System Fault Level
Must meet local standards and be shown in figure 7, to be
attached after preliminary engineering.
5. System Voltage Level
The following items are to be notified to INTERNATIONAL POWER
after the Effective Date and after the completion of
engineering. Such information will be shown in figure 8, to be
attached:
Generator terminal voltage: must meet voltage required by the low side of the transformer to meet high voltage output.
Main transformer:
High Voltage (Nominal): must meet transmission line voltage
. System Frequency: as required by the Mexico electricity
transmission grid.
7. Primary Generators and Accessories
The primary generators shall be designed to match the steam turbine unit for each installed WTE module to assume base and peak operating modes. The following items are to be shown in figure 9, to be attached. After preliminary site engineering, three phase WYE or delta grounded configuration as required, through resistance:
Rated terminal voltage must meet local standards
Rated power factor must meet local standards;
Short circuit ratio (saturated). The measured value of the
short circuit ratio at rated MVA and rated voltage shall be not
less than required by local standards.
8. Allowable voltage variations
At rated MVA, frequency, power factor and inlet air temperature,
the turbine-generator can operate satisfactorily even
though the terminal voltage may vary +/- 5% operated
value.
V. Utilities During Construction Period
Requirements Time of Supply
Electricity - 750 KW By 30 days after the
3 Phase Supply 220V, Effective Date
Telephone, cable, Internet access and fax
Water and Sewer - 3,000 gallons By 30 days after the
Per day - fresh potable quality Effective Date
3 Portable toilets By 30 days after the
Effective Date
VI. Utilities During Co-operation Period
Requirements Time of Supply
Water as required for adequate cooling throughout the
Fresh potable quality; Co-operation Period
Sewage piping and storm drains
from the side of the perimeter
fence nearest to the municipal
sewer or storm drain system.
VII. Standard Warranty
With respect to each WTE module installed, NAANOVO shall see to it that all contractors, material and equipment suppliers provide their usual warranties covering defects in performance, workmanship, materials, etc., which shall be notified to INTERNATIONAL POWER on or before the Completion Date, and any failure or defect encountered in the normal operation of each WTE module installed, not otherwise covered by such warranties in whole or in part, will be corrected by NAANOVO for a period of up to seven years after the Transfer Date.
SECOND SCHEDULE
OPERATING PARAMETERS
(All blanks to be filled as soon as possible after execution of this Agreement.)
I. Operating Parameters
NAANOVO MEXICO WTE S.A. shall operate the WTE plant in accordance with the
operating criteria and guidelines of this Agreement. Throughout the Cooperation
Period, NAANOVO shall cooperate with NAANOVO MEXICO WTE S.A. in establishing
operating and emergency plans including but not limited to recovery from a local
or widespread electrical blackout; voltage reduction to effect load curtailment
and other plans which may arise. NAANOVO shall make technical references
available to NAANOVO MEXICO WTE S.A. concerning start-up times and minimum load
carrying ability, broken down into:
1. Capacity
Subject to the provisions of Clause 5.04 and 9.06, the capacity of
each installed module of the WTE plant shall not be less than 6 MW
at normal Site conditions, as measured accumulatively at the
generator terminals. This capacity is subject to the provision by
INTERNATIONAL POWER of acceptable fuel as defined in the Fourth
Schedule. The capacity of each module may be modified if agreed in
writing by both NAANOVO and INTERNATIONAL POWER.
2. Frequency Limitation
The following items are to be notified to INTERNATIONAL POWER in
figure 10, to be attached after the completion of preliminary
engineering work:
The frequency limitations of the steam and low temperature turbines
set for continuous operation shall meet local standards.
The under frequency tripping relay shall be set at local standards.
The steam and low temperature turbine over-speed trips shall be set
at 10% above normal speed.
3. Normal Voltage
The normal voltage at the high side of the main power transformer shall
be determined during preliminary engineering and shown in figure 11, to
be attached, with allowance for plus or minus 5 percent.
4. Load Sharing Operation
The units shall operate satisfactorily and without structural damage in
daily load sharing from 100 per cent of the Normal Capacity to the
minimum capacity of the units depending on the power contract
requirements of NAANOVO MEXICO WTE S.A.
5. Normal Operating Capacity
At normal operation mode, except during start up and shut down, the
generating units for each module should be capable of being operated as
follows:
- Primary turbine and : 3.3 MW per hour
generator
- LTT unit and generator : 2.7 MW per hour
6. Operation Mode
The WTE plants shall be utilized as a base load plant and be expected
to be able to operate seven (7) days per week, 24 hours per day, 350
days per year.
7. Variation of Power Load
At any given load, it is estimated that the allowable load change per
unit should be not more than that to be determined during preliminary
engineering and compatible with local standards. This will be shown in
figure 12, to be attached, on a KW per minute basis.
8. Combustion Temperature
The desired combustion temperature of the WTE plants following
completion shall be maintained at 1200 (degrees) C (2192 (degrees) F)
reckoned at full load condition and normal fuel conditions in
accordance with the Certification Tests described in the Fourteenth
Schedule. The WTE plants will be tested under different fuel
conditions to ensure that automated fuel handling equipment succeeds in
maintaining the desired combustion temperature of 1200 (degrees) C
(2192 (degrees) F). If results of the Certification Tests show a
temperature fluctuations above or below the desired combustion
temperature of 1200 (degrees) C (2192 (degrees) F) that exceed
operating standards then NAANOVO shall endeavor to correct the fuel
handling equipment and/or burner air intake equipment accordingly in
order to achieve the desired combustion temperature. Prior to the
Completion Dates the parties hereto shall agree on the dates, time and
duration for the Certification Tests in accordance with the Fourteenth
Schedule. The operating temperature shall be at all times sufficient to
safely incinerate PCBs and other toxic waste.
II. Operating Procedures
. CONSISTENCY WITH FUEL DISPOSAL CONTRACTS
During the Cooperation Period, NAANOVO shall control and operate
the WTE plant consistent with the requirements of the waste
disposal contracts acquired for the WTE plant by INTERNATIONAL
POWER.
. ENGINEERING STANDARDS
The WTE plants including, but not limited to, the protective
apparatus shall be operated and maintained in accordance with
good engineering practices in respect of synchronizing, voltage
and reactive power control.
. PROTECTIVE DEVICES
The WTE plants shall be operated with all of its protective
apparatus in service whenever the plants are connected to or is
operated in parallel with the local grid. Any deviation during
the Cooperation Period for brief periods of emergency or
maintenance shall only be reported to INTERNATIONAL POWER by
mutual agreement.
. INTEGRITY LOSS
If, at any time, INTERNATIONAL POWER has reason to doubt the
integrity of any NAANOVO protective apparatus and suspects that
such loss of integrity could jeopardize the local grid, NAANOVO
shall demonstrate, to INTERNATIONAL POWER's satisfaction, the
correct calibration and operation of the equipment in question.
. TESTING OF PROTECTIVE DEVICES.
NAANOVO shall test all protective devices with qualified
personnel at intervals during the Cooperation Period not to
exceed one (6) months.
. NOTICE OF TESTS.
NAANOVO shall notify INTERNATIONAL POWER at least fourteen (14)
calendar days prior to: (1) the initial parallel operation of
each NAANOVO generator and (2) testing of all protective
apparatus. INTERNATIONAL POWER shall have the right to have a
representative present at such times.
. DOWNTIME DURING THE COOPERATION PERIOD
NAANOVO shall have the right at all times during the Cooperation
Period to invoke routine and emergency Downtime in order to make
adjustments to any of the WTE plant's primary systems and NAANOVO
shall make all reasonable efforts to notify INTERNATIONAL POWER
in a timely manner of each Downtime, whether occasioned by
emergency or for routine purposes.
. DAILY OPERATING REPORT FOR RECORD PURPOSES
During the Cooperation Period, NAANOVO shall keep INTERNATIONAL
POWER informed as to the daily operating schedule and generation
capability of the WTE plant, including, without limitation to,
any Forced Outages.
9. OPERATING AND MAINTENANCE RECORDS.
NAANOVO shall maintain the operating and maintenance records for
each generating unit at the WTE plant for the Cooperation Period
with records of: real and reactive power production, changes in
operating status, outages, protective apparatus operations and
any unusual conditions found during routine inspections. Changes
in the setting of protective apparatus shall also be logged. In
addition, NAANOVO shall maintain records applicable to the WTE
plant, including the electrical characteristics of the generators
and settings or adjustment of the generator control equipment and
protective devices. Such information shall be made available to
INTERNATIONAL POWER upon request.
THIRD SCHEDULE
PENALTY OF NAANOVO ON DELAY OF COMPLETION DATE
1. Penalty Formula
The following formula shall apply in computing the amount of
penalty to be paid by NAANOVO and/or its general contractor to
INTERNATIONAL POWER for failure to complete the construction of
the WTE plant on time due to delays:
P = number of days of delay
x ___ tons per day
x $ C/ton
C = tipping fee at landfill plus transportation cost
2. Payment of Penalty
Any penalty amount occasioned by delay of the completion of
construction shall be due and payable by NAANOVO on the last day
of each calendar month.
. Time for Completion
The time for completion of the construction of the WTE plants
shall be as per the Completion Date. NAANOVO shall have no
penalty for consideration of INTERNATIONAL POWER having no
penalty on Clause 7.04
FOURTH SCHEDULE
SPECIFICATIONS FOR FUEL SUPPLY
1. FULL SUPPLY SPECIFICATIONS
Plant performance may be affected by the composition of the fuel and
INTERNATIONAL POWER acknowledges that emissions may vary from
international standards and the power output per module may be adversley
affected if the BTU/ton is lowered. NAANOVO will use best efforts to
optimize both emissions and power output. The fuel may have up to a 4 to
1 ratio of toxic, PCBs and hazardous waste to MSW. The specifications for
the Fuel Supply will be as follows:
-Normal municipal solid waste from residential and commercial
waste stream;
- Hazardous substances, i.e., batteries, paints and thinners;
- Hospital (red bag) waste;
- Industrial waste;
- No concrete demolition waste;
- No heavy appliances and other large objects, e.g.,
refrigerators, stoves, dishwashers, bathtubs and toilets;
- Continuous moisture content of not more than 60%;
- Occasional moisture content of not more than 60%;
- No more volume to be delivered in any one day than there is
capacity left in the dumping pit and storage room (maximum
capacity at any one time is calculated as 3 days of 180
metric tons per day per module. For example if a plant has
12 modules, the maximum capacity is 3 X 12 X 180 = 6,480
metric tons).
2. SUPPLY ARRANGEMENTS AND DELIVERY
INTERNATIONAL POWER and NAANOVO will liaise to prepare weekly
fuel schedules showing anticipated times and quantities and
composition of fuel to be utilized by the WTE plants and
INTERNATIONAL POWER shall be responsible for ensuring the
availability of fuel supplies, for the payment therefore and for
all arrangements with the suppliers.
3. FUEL STORAGE
INTERNATIONAL POWER will arrange its municipal solid waste
contracts in such a manner as to allow for maximum fuel storage
at the WTE plants to be utilized at all times. Any over supply
which cannot be avoided will be the responsibility of
INTERNATIONAL POWER to store outside the Site in sufficient
covered plants to ensure that the over supply is not subject to
the adverse affects of rain and sunshine and excess moisture is
allowed to run off and be collected and disposed of in an
environmentally acceptable manner.
4. TESTING
If so required by NAANOVO during the design and the Cooperation
Periods, a suitable sample will be taken and analyzed jointly by
NAANOVO and INTERNATIONAL POWER to ensure that it meets the
specifications as shown above. The laboratory and method used in
analyzing the moisture content and caloric value of the fuel will
be agreed between NAANOVO and INTERNATIONAL POWER.
5. WEIGHT MEASURING
Accurate weigh scales will be provided by NAANOVO at the Site.
As a check, INTERNATIONAL POWER may utilize outside scaling
services during the Cooperation Period at its own cost, provided
such service is in close proximity to avoid discrepancies
associated with the consumption of automotive fuel during
transportation. Any discrepancies between the on Site scales and
that of an outside service will be analyzed by NAANOVO and
INTERNATIONAL POWER as they occur to determine the nature and
extent of the outages and an agreed compromise will be settled
upon until the on Site scales can be inspected and re-certified
by an independent, accredited weights and measures expert.
6. VARIATIONS
NAANOVO and INTERNATIONAL POWER will liaise with one another in
estimating the delivery of fuel required in order to make sure
NAANOVO MEXICO WTE S.A.'s and INTERNATIONAL POWER's annual,
monthly and weekly operating plans are compatible.
7. SECURITY
INTERNATIONAL POWER shall be responsible for all security and
safety arrangements in respect of the fuel off Site.
FIFTH SCHEDULE
TRANSMISSION LINE SPECIFICATIONS
(All blanks to be filled as soon as possible after execution of this Agreement.)
1. LOCATION
From the outgoing switching plant within the Site boundaries at
_____________________________________________________________________ (to be determined by INTERNATIONAL POWER in accordance
with NAANOVO and the agreed upon Site plans on or before the
Effective Date).
2. SPECIFICATIONS
The transmission line shall be capable of providing sufficient
electricity for testing, commissioning and starting the WTE plant
and shall be capable of taking the maximum output of the WTE
plant.
3. OTHER
(To be determined and attached as a part of this Schedule.)
SIXTH SCHEDULE
ELECTRICITY DELIVERY PROCEDURES
1. Definition
"Downtime" means the 360 hours NAANOVO MEXICO WTE S.A. is allowed
to take during its operation of each WTE plant, within the
Cooperation Period, for normal inspection, maintenance, repair
and routine overhaul at which time the WTE plant is required to
be shutdown and not able to process fuel or generate electricity.
"Forced Outage" is defined as the inability of the WTE plant to process fuel or generate
electricity as expected, within the Cooperation Period, due to
the fault of NAANOVO;
"Forced Outage Hour" means an hour during the whole of which electricity is not produced
due to Forced Outage and not Downtime.
2. Measurement of Power Generated
Measurement of power generated shall be made at the high voltage
side of the main power transformer.
3. Notice of Downtime
NAANOVO MEXICO WTE S.A. shall prepare monthly and weekly systems
operating plans and in so doing shall notify NAANOVO and
INTERNATIONAL POWER with respect to when it expects to incur
Downtime.
4. Coordination of Downtime
NAANOVO MEXICO S.A. will coordinate with NAANOVO and
INTERNATIONAL POWER to ensure that scheduled Downtime, as far as
practicable, does not adversely affect INTERNATIONAL POWER's fuel
contracts.
5. Availability Schedule
Whilst the annual, monthly, and weekly system operating plans
indicating availability will be prepared by NAANOVO MEXICO S.A.
in consultation with NAANOVO, it is agreed that the weekly plan
for the following seven days will be the control plan and will
be that plan referred to as the "normal operation plan".
6. Normal Operations
Normal operations of the steam and LTT turbines are as defined
below:
(1) Operating on a 24 hour, 7 days per week 350 days
per year basis in accordance with the weekly normal
operations plan as defined in Section 5 above.
(2) Operating with fuel within the specification set
out in the Fourth Schedule.
(3) Operating at a combined minimum of 6 MW per hour
per installed module within normal operating parameters
and with normal Site conditions.
(4) Operating with an adequate supply of water as
specified in Section VI of the First Schedule.
(7) Operating frequencies of the system to be within
the limits of the Operating Parameters.
(8) Operating at a system voltage to be determined by
the Effective Date, plus or minus 5%.
(9) Full access to the Site at all times for
materials and personnel.
SEVENTH SCHEDULE
MEASUREMENT AND RECORDING OF ELECTRICITY
1. The meter locations to record the KW and KWH delivered to the
grid shall be at the high voltage side of the power
transformer.
2. The quantity of power and energy delivered to the grid shall
be given by the meters required by the local power authority
and agreed to by NAANOVA and INTERNATIONAL POWER.
3. In order to verify the quantity of electricity delivered by
NAANOVO MEXICO WTE S.A. to the grid in each Month,
INTERNATIONAL POWER and NAANOVO shall at noon or at such other
time agreed between INTERNATIONAL POWER and NAANOVO on the
twenty fifth day of each month take a photograph of the
electricity meters in the Power Station recording the supply
of electricity by NAANOVO MEXICO WTE S.A., provided always
that if either party shall not be present at the relevant
meter or meters at the agreed time, the above mentioned
photograph shall be taken by the party present and shall be
binding on the party absent.
4. NAANOVO shall supply and install and NAANOVO MEXICO WTE S.A.
shall maintain as part of the interconnection plants, meters
and related equipment to be utilized for the measurement of
electric power and energy in determining the amount that
NAANOVO MEXICO WTE S.A. customers will be required to pay
pursuant to their power purchase agreements.
5. For the purpose of monitoring the WTE plants' operation,
INTERNATIONAL POWER shall have the right to require, at
NAANOVO's expense, the installation of metering devices at the
generation side which will be specified to NAANOVO prior to
the Effective Date.
6. The meters, installed pursuant to 5, above, shall be tested by
INTERNATIONAL POWER at its own expense at least twice during
the operation of the WTE Plants during the Cooperation Period.
Other tests may be conducted at any reasonable time upon
request by either party, at the requesting party's expense. If
NAANOVO makes such request, NAANOVO shall reimburse said
expense to INTERNATIONAL POWER within thirty (30) days after
presentation of a xxxx. INTERNATIONAL POWER's meter test
results shall be deemed final and conclusive.
7. The meters and metering transformers shall be in accordance
with INTERNATIONAL POWER's specifications.
8. Any metering equipment found to be inaccurate shall be
repaired, adjusted, or replaced by INTERNATIONAL POWER at
NAANOVO's expense such that the accuracy of said equipment
shall be 100%. If metering equipment inaccuracy exceeds plus
or minus two percent (2%), the correct amount of energy
delivered during the period of said inaccuracy shall be
estimated by INTERNATIONAL POWER and agreed by the parties.
Adjustment for meter inaccuracy shall cover only the current
Month and the Month immediately preceding it.
EIGHTH SCHEDULE
DELIVERY OF POWER
(All blanks to be filled as soon as possible after execution of this Agreement.)
1. OBLIGATIONS OF PARTIES
NAANOVO, through NAANOVO MEXICO WTE S.A., hereby agrees to
convert fuel supplied by INTERNATIONAL POWER de MEXICO into
electricity and INTERNATIONAL POWER de MEXICO hereby agrees to
arrange a power purchase contract for NAANOVO MEXICO WTE S.A. and
INTERNATIONAL POWER de MEXICO with a credible customer that will
take at the high voltage side of the step-up transformer, the
electric power and energy delivered by NAANOVO (through NAANOVO
MEXICO WTE S.A.) until the end of the Cooperation Period.
2. CAPACITY PROVISION
NAANOVO, through NAANOVO MEXICO WTE S.A., shall provide the
electric power output capacity provided in Section 4 of this
Schedule in respect of the combined amount of Normal Capacity,
which shall be the actual achieved net Kilowatt (KW) capability
of the WTE plants constructed by NAANOVO.
3. DELIVERED POWER
NAANOVO, through NAANOVO MEXICO WTE S.A., shall convert fuel
supplied by INTERNATIONAL POWER de MEXICO into electricity and
deliver it to the grid for the customer(s) to be arranged by
INTERNATIONAL POWER de MEXICO, and these customers by power
purchase agreement shall take such electricity from NAANOVO and
INTERNATIONAL POWER de MEXICO. The energy delivered shall be paid
for as per the power purchase agreement(s) pursuant to terms and
conditions similar to those provide in Section 4 of this
Schedule.
4. TERMS OF PAYMENT
NAANOVO uses the Co-operation Period for tuning the plant to the
available fuel and local conditions and for evaluation of the key
module components to ensure that they are operating at their
designed capabilities. Consequently, the capacity and delivered
power during this period may be less than the guaranteed module
output. No penalty shall be assessed against NAANOVO for fuel
processing and capacity and delivery of electricity during the
Co-operation Period. The Co-operation Period may be as long as
one year, but NAANOVO will apply its best effort to make the Co-operation Period as short as possible.
During the Co-operation period, the income earned from the sale
of delivered power of electricity to the grid shall be split by
NAANOVO and INTERNATIONAL POWER. The monthly cost of the
operation and maintenance shall be deducted before the split.
NINTH SCHEDULE
DOCUMENTARY REQUIREMENTS FOR THE EFFECTIVE DATE
1. Financing Documents for:
1.1 any financing to be made by NAANOVO to NAANOVO MEXICO WTE
S.A. and for the payment of interest thereon and
the payment of the principal thereof;
1.2 any financing made to NAANOVO from domestic or
international financial institutions or agencies,
for the purpose of repaying any financing extended
by NAANOVO or for meeting the balance of the
capital requirements of the Project;
2. Documentation evidencing Republic of Mexico Government
approval of the employment by NAANOVO MEXICO WTE S.A. of
foreign nationals in supervisory, technical and advisory
positions throughout the Co-operation Period.
3. Documentation evidencing other national and local approvals as
may be necessary to proceed with the Project.
4. Documentation evidencing that, under current Mexican law,
remittance of profits and dividends by NAANOVO MEXICO WTE S.A.
to NAANOVO during the Cooperation Period will not be subject
to double taxation of any nature, regardless of jurisdiction,
and in particular there will be no Mexican Withholding Tax in
excess of fifteen per cent of the amount remitted.
5. Documentation evidencing the approval by relevant government
agencies for the immediate importation into the Republic of
Mexico of all equipment, including the steam and LTT turbines,
for the WTE plant.
6. A "License to Construct" or similar document issued by the
appropriate authority in relation to the Project, confirming
that NAANOVO or NAANOVO MEXICO WTE S.A. satisfies all
governmental requirements and is authorized to proceed with
the construction of the WTE plant, containing conditions
acceptable to NAANOVO.
7. Other required licenses or certificates from government
agencies allowing NAANOVO or NAANOVO MEXICO WTE S.A. to
proceed with the erection and operation of the WTE plant, such
that the project may proceed.
TENTH SCHEDULE
INSURANCE
1. INSURANCES DURING CONSTRUCTION
From the Effective Date until the commissioning of the WTE plant,
NAANOVO shall, at its own expense, directly or through its
general contractor and equipment suppliers, obtain and maintain
in force the following insurances:
a. Marine insurance with respect to the plant and equipment
to be imported into Mexico shall be provided by the
suppliers;
. Performance, completion and liability bonding shall be
provided by the general contractor to cover the entire
works from any and all kinds of damages arising out of any
cause whatsoever including injury or death of persons
(including those of INTERNATIONAL POWER) or damages to
property caused by the works or by NAANOVO's vehicles,
tools and/or equipment or personnel including its sub-contractors; and
. "Workmen's Compensation Insurance" as required by law
will be provided by NAANOVO.
2. INSURANCE DURING COOPERATION PERIOD
During the Cooperation Period, NAANOVO shall at its own expense
keep the WTE plant insured against accidental damage from all
normal risks and to level normal for prudent operators of plants
similar to the WTE plant. In addition, NAANOVO shall secure
adequate insurance coverage for its employees as may be required
by law.
ELEVENTH SCHEDULE
(If Necessary)
FORM OF PERFORMANCE UNDERTAKING
(All blanks to be filled as soon as possible after execution of this Agreement.)
To: NAANOVO ENERGY INC. ("NAANOVO") and NAANOVO MEXICO WTE S.A.
(NAANOVO MEXICO) and, together with NAANOVO, the "Beneficiaries"
which expression includes each Beneficiary)
Dear Sirs,
We refer to the arrangements for NAANOVO to build plants to be built in the
Republic of Mexico recorded in a project agreement dated April 2, 2005 and made
between INTERNATIONAL POWER, INC. ("INTERNATIONAL POWER") (which is wholly-owned
by us) and NAANOVO and an accession undertaking dated ___________________,
whereby NAANOVO MEXICO WTE S.A. was joined as a party to the project agreement
(the project agreement, as supplemented by the accession undertaking and as
further supplemented and amended from time to time, the "Agreement"). We are
fully aware of the terms and conditions of the Agreement.
In order to facilitate these arrangements we hereby confirm that the obligations
of INTERNATIONAL POWER under the Agreement carry the full faith and credit of
this company and we will see to it that INTERNATIONAL POWER will be able to
discharge, at all times, such obligations as they fall due. Such obligations are
hereby affirmed and guaranteed by us.
Any dispute, controversy or claim arising out of or relating to this undertaking,
or the breach or termination thereof or the failure to pay or the late payment
of any sum due shall be settled by Arbitration in Florida in accordance with the
Florida Arbitration Rules in force at the date of this undertaking. The
appointing authority shall be the presiding Judge of a Dade County Court,
Florida, the number of arbitrators shall be three and the language to be used in
the arbitral proceeding shall be English. The parties exclude any right of
application or appeal to any courts in connection with any question of law
arising in the course of arbitration or with respect to any award made.
We wave for ourselves and our assets and revenues to the extent permitted by
applicable law any and all immunity from suit, execution or other legal process.
Yours faithfully,
Per: Xxxxx X. Xxxxxxx
______________________________ _______________________ _____________
President & C.E.O. Witness Date
International Power Group Ltd.
TWELFTH SCHEDULE
FORM OF ACCESSION UNDERTAKING
(All blanks to be filled as soon as possible after execution of this Agreement.)
THIS ACCESSION UNDERTAKING is made the ____ day of ________ 2005 at
______________
BY
NAANOVO ENERGY USA, INC., a private corporation, duly organized and
existing under the laws of the State of Nevada, with its registered
office at 0000 Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000 represented by
Xxxxxxx.xxx, Inc., who is duly authorized to represent it in this
Agreement, hereinafter referred to as "NAANOVO".
INTERNATIONAL POWER GROUP, LTD, a public corporation, duly organized
and existing under the laws of the State of Delaware, USA, with its
registered office at ________________________________ represented by
______________________, who is duly authorized to represent it in this
Agreement, hereinafter referred to as "INTERNATIONAL POWER".
INTERNATIONAL POWER de MEXICO, a private corporation incorporated in
Mexico and having its registered office at
___________________________________________ represented by
______________________, who is duly authorized to represent it in this
Agreement, hereafter referred to as "INTERNATIONAL POWER de MEXICO".
NAANOVO MEXICO WTE S.A., a private corporation incorporated in the the
Republic of Mexico and having its registered office at
___________________________________________ represented by
______________________, who is duly authorized to represent it in this
Agreement, hereinafter referred to as "NAANOVO MEXICO".
WHEREAS
(A) This Undertaking is supplemental to a project agreement (the "Project
Agreement") dated May 6, 2005 and made between (1) INTERNATIONAL POWER and (2)
NAANOVO whereby NAANOVO has agreed to design, build and operate a WTE plant in
Mexico and effectively transfer the same to INTERNATIONAL POWER on the Transfer
Date (as defined therein).
(B) NAANOVO MEXICO WTE S.A. is a Mexican corporation and a subsidiary of
NAANOVO.
(C) It is a condition precedent to the effectiveness of the Project Agreement
that the parties hereto enter into this Accession Undertaking.
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
(A) Terms defined in the Project Agreement shall bear the same
meaning herein.
(B) This Undertaking shall take effect on the Effective Date.
(C) Clause headings are for ease of reference only.
(D) In this Undertaking, the singular includes the plural and
vice versa.
2. Accession of NAANOVO MEXICO
(A) NAANOVO MEXICO shall become a party to the Project Agreement
and shall perform and comply with all obligations on the
part of NAANOVO under the Project Agreement which
necessarily have to be performed in respect of the
development, construction and operation of the Project,
including the importation into the Republic of Mexico of all
equipment for the Project and the operation of the WTE
plants and all references to "NAANOVO" in the Project
Agreement (including without limitation in Clauses 2, 3, 6,
8, 9, 10, new 11, 72, 14, 15 and 17 thereof) shall be
construed to be references to NAANOVO MEXICO to the full
extent necessary to give effect to the foregoing.
(B) NAANOVO MEXICO shall perform all obligations on its part
under the Project Agreement as if NAANOVO MEXICO were named
in the Project Agreement as a party thereto and NAANOVO
MEXICO shall be entitled to all the rights, benefits and
interest under the Project Agreement as if it were named as
a party thereto including (without limitation) the benefits
of all warranties and undertakings on the part of NAANOVO
and INTERNATIONAL POWER, respectively where so ever
applicable.
(C) NAANOVO shall be jointly and severally liable with NAANOVO
MEXICO for the performance of the obligations undertaken by
NAANOVO MEXICO under Clause 2(A) above, and undertakes to
INTERNATIONAL POWER that it shall, promptly upon its receipt
of written demand from INTERNATIONAL POWER, perform such
obligations in accordance with the provisions of the Project
Agreement.
(D) Subject only to the above provisions, the Project Agreement
and the respective rights and obligations of the parties
thereto under it shall continue in full force and effect.
(E) INTERNATIONAL POWER de MEXICO shall become a party to the
Project Agreement and shall perform and comply with all
obligations on the part of INTERNATIONAL POWER de Mexico
under the Project Agreement.
3. References in the Project Agreement
As from Effective Date, any reference in the Project Agreement to "this
Agreement" and any reference, whether express or implied, to a clause or
provision of the Project Agreement shall be deemed to be a reference to the
Project Agreement and to a clause or provision thereof as hereby supplemented and
amended.
4. Assignment
INTERNATIONAL POWER may for the purposes of arranging or rearranging finance for
the Project, assign or transfer all or any part of its rights and benefits under
the Project Agreement as hereby supplemented and NAANOVO AND NAANOVO MEXICO WTE
S.A. shall duly acknowledge any such assignment or transfer of which it is given
notice.
5. Law and Jurisdiction
The provisions of Clauses 22, 23 and 24 of the Project Agreement shall apply to
this undertaking as if the same were herein repeated in full mutatis mutandis.
NAANOVO ENERGY USA, INC.
By:
/s/Dr. J. Xxxxxx Xxxxxx, President
INTERNATIONAL POWER GROUP, LTD
By:
/s/ Xxxxx X. Xxxxxxx, President/CEO
NAANOVO MEXICO WTE S.A.
By:
______________________________________
THIRTEENTH SCHEDULE
TESTING PROCEDURES
I. GUARANTEE TESTS
(1) Purpose of the Guarantee Tests
To demonstrate to INTERNATIONAL POWER that the WTE plant generator
outputs are in accordance with the Specifications (the "Guarantee
Tests").
(2) Test Conditions
(a) All turbine generating units of the WTE plants
will be tested by NAANOVO and the weighted average
results compared to the Guaranteed generating capacity
described in the Specifications.
(b) The measuring points will be the fuel weigh
scales and the electricity billing meters.
(c) The WTE plants are to be tested when the units
are in clean condition and the tests will be conducted
within 100 hrs. of loaded operation of the unit, or of
cleaning, or as agreed between NAANOVO and INTERNATIONAL
POWER.
(d) Throughout the Guarantee Tests, measurements will
be taken while the WTE plant is operated at maximum
continuous rating ("MCR").
(e) If NAANOVO notifies INTERNATIONAL POWER that the
WTE plants are to be tested for partial completion (for
example, (6.6 MW of primary steam power) then the test
conditions above and the test procedures below shall
apply to such testing provided that (i) in respect of
generating capacity, NAANOVO shall only be required to
achieve the minimum capacity which is the object of the
test and (ii) in respect of the tested generating
capacity, a value in excess of the Guaranteed generating
capacity shall not mean a failure of the Guarantee Tests
for partial completion if, upon the weighted averaging
of the tested generating capacity with the results from
the Guarantee Tests for plant completion, such average
Tested generating capacity remains within the Guaranteed
generating capacity.
(f) If NAANOVO has successfully completed a partial
completion test, then the final Guarantee Test for plant
completion shall only be in respect of those units
tested.
(3) Test Procedures
(a) During testing, both INTERNATIONAL POWER and
NAANOVO will make every effort to maintain the
frequency, load, power factor and stator voltage steady
and as near possible to specified values.
(b) Electrical power output will be measured by a
three phase integrating watt hour meter (the Billing
meter), calibrated at a laboratory approved by NAANOVO
and INTERNATIONAL POWER immediately prior to the tests.
(c) Fuel flow will be measured by the conveyor weight
scale. The scale will be calibrated by an approved
establishment for the load range and calibration curves
will be produced for inspection.
(d) All tests points are to be taken under steady
state conditions. Steady-state conditions are assumed to
exist when the variation in steam turbine exhaust
temperatures and wheelspace temperatures reach a
minimum.
(e) When the following fluctuations are exceeded the
test results shall be considered by both INTERNATIONAL
POWER and NAANOVO to determine whether they are
acceptable or not. The term "fluctuation" is intended
to mean the difference between the maximum or minimum
value of a variable for a single test point and average
of the values recorded for that variable at the test
point.
(f) The tests will be conducted using normal
operating fuel with specifications in accordance with
the Fourth Schedule.
(g) Test readings for the Guarantee Tests will be
recorded at ten minutes intervals during one hour period
after the units have achieved a steady state condition.
(h) Instrumentation
Instruments used to measure performance are all panel
instruments unless otherwise mentioned.
Only those measurement items with an asterisk (see Table
I) are required for the Guarantee Tests.
Instruments used to measure the quantities required for
the Guarantee Tests will be calibrated over their
expected operating ranges.
In addition other instruments will be monitored to
ensure the units are operated under steady state
conditions.
(4) Tolerance
Only output and heat rate at MCR are guaranteed with tolerance.
The measuring tolerance values at MCR are as follows:
Tolerance of output : 1.75%
Tolerance of heat rate : 3.0%
Net Electrical output is measured by the KWh meter on the high voltage
side of the generator transformer.
Note: The Tested Plant Net Guaranteed Net Heat Rate is the weighted average of
the Tested Plant Net Heat Rates of the Guarantee Tests.
II. Information Tests
(1) Purpose of Information Tests
To provide information only on the operating characteristics of the WTE
plant and its performance at various conditions.
(2) Generator Tests
The following tests will be conducted at the time of the Guarantee
Tests or as agreed between NAANOVO and INTERNATIONAL POWER.
-----------------------------------------------------------------------------
No. Test items Symbol Remarks
-----------------------------------------------------------------------------
1 Insulation resistance test 0 By a 1.000V megger for
alternator armature windings.
By 500 V megger for field
-----------------------------------------------------------------------------
2 Temperature rise test 0 Temperature rise test
will be made with the
machine operating at
loading condition.
-----------------------------------------------------------------------------
3 Vibration test 0 Vibration will be
measured at
no-load and load.
-----------------------------------------------------------------------------
4 Insulation of bearing 0 Bearing insulation will
be checked at
installation.
-----------------------------------------------------------------------------
(3) Instrumentation
The measurement items which are not asterisked in Table I are to be
tested as part of the Instrumentation Tests.
In addition to the measurement items listed in Table I, the following
information will also be taken:
(i) Lube oil header pressure and temperature
(ii) Bearing drain temperature
(iii) Wheel space temperature
LOCATION PLAN
Fig. 1
[SURVEY PLAN]
(To be determined by INTERNATIONAL POWER and approved by NAANOVO)
TEMPORARY FENCE DETAIL
Fig. 2
[CHART]
(To be determined by INTERNATIONAL POWER and approved by NAANOVO)
SCOPE OF SUPPLY
Fig. 3
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
COMMUNICATION
Figure 4
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
INJECTION FUEL OIL ASSIST & CONTROL SYSTEM
SCHEMATIC DIAGRAM
Fig. 5
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
METERING
SCHEMATIC DIAGRAM
Fig. 6
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
SYSTEM FAULT LEVEL
Fig. 7
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
SYSTEM VOLTAGE LEVEL
SCHEMATIC DIAGRAM
Fig. 8
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
PRIMARY GENERATORS AND ACCESSORIES
SCHEMATIC DIAGRAM
Fig. 9
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
FREQUENCY LIMITATIONS
SCHEMATIC DIAGRAM
Fig. 10
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
NORMAL VOLTAGE
SCHEMATIC DIAGRAM
Fig. 11
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
VARIATION OF POWER LOAD
SCHEMATIC DIAGRAM
Fig. 72
[CHART]
(To be determined by NAANOVO and approved by INTERNATIONAL POWER)
SIGNATURE PAGE
NAANOVO ENERGY USA, INC.
SIGNED by Dr. J. Xxxxxx Xxxxxx, PE )
for and on behalf of )
NAANOVO ENERGY USA, INC. ) /s/Dr. J. Xxxxxx Xxxxxx
) Dr. J. Xxxxxx Xxxxxx
President & CEO
INTERNATIONAL POWER GROUP, LTD
SIGNED by Xxxxx X. Xxxxxxx )
for and on behalf of )
INTERNATIONAL POWER GROUP, LTD ) /s/Xxxxx X. Xxxxxxx
) Xxxxx X. Xxxxxxx
President & CEO
This Agreement was signed in the presence of:
--------------------------- ---------------------------
Witness Witness
(Naanovo) (INTERNATIONAL POWER)
