Exhibit 10.9
AMENDED AND RESTATED POWER SALES AGREEMENT
between
P.T. PUNCAKJJAYA POWER
and
P.T. FREEPORT INDONESIA COMPANY
dated as of December 18, 1997
Power Generation Facilities
Irian Jaya, Indonesia
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND USAGE................................1
SECTION 1.01. DEFINITIONS.....................................1
SECTION 1.02. USAGE...........................................2
SECTION 1.03. PARTIES.........................................3
ARTICLE II TERM................................................3
SECTION 2.01. INITIAL TERM; RENEWAL...........................3
ARTICLE III SALE AND PURCHASE OF CAPACITY AND ELECTRICITY......4
SECTION 3.01. CAPACITY SUPPLY OBLIGATIONS.....................4
SECTION 3.02. PURCHASE OBLIGATIONS............................4
SECTION 3.03. RISK OF LOSS....................................5
SECTION 3.04. THIRD PARTY SALES...............................5
SECTION 3.05. ADJUSTMENTS TO TARGET CAPACITY LEVELS...........6
SECTION 3.06. ADDITIONAL CAPACITY REQUIREMENTS BY PTFI........8
ARTICLE IV.....................................................9
ARTICLE IV SUPPLY OF FUEL......................................9
SECTION 4.01. OBLIGATION TO SUPPLY DIESEL FUEL................9
SECTION 4.02. ASSIGNMENT OF COAL SUPPLY AGREEMENT.............9
ARTICLE V COORDINATION OF PTFI'S PLANT AND FACILITIES.........10
SECTION 5.01. ADDITIONAL PTFI INTERCONNECTIONS...............10
SECTION 5.02. SCHEDULING OF CAPACITY DELIVERY................10
SECTION 5.03. USE OF COAL DOCK...............................11
ARTICLE VI METERING...........................................11
SECTION 6.01. OWNERSHIP AND MAINTENANCE......................11
SECTION 6.02. TESTING OF METERS..............................11
SECTION 6.03. ADJUSTMENTS FOR INACCURACY.....................12
ARTICLE VII BILLING AND PAYMENT...............................13
SECTION 7.01. (A) BILLING....................................13
SECTION 7.02. DISPUTED PAYMENT...............................14
SECTION 7.03. CHANGE IN LAW ADJUSTMENTS......................14
SECTION 7.04. ADJUSTMENTS TO CLOSING MODEL...................18
ARTICLE VIII OPERATION AND MAINTENANCE........................19
SECTION 8.01. OPERATION......................................19
SECTION 8.02. MAINTENANCE....................................19
SECTION 8.03. CERTAIN OPERATING MATTERS......................19
ARTICLE IX ALTERATIONS TO THE FACILITIES......................21
SECTION 9.01. ALTERATIONS TO THE FACILITIES BY PJP...........21
ARTICLE X INSURANCE; DAMAGE AND DESTRUCTION; EXPROPRIATION....22
SECTION 10.01. PJP'S INSURANCE COVERAGE......................22
SECTION 10.02. EVIDENCE OF COVERAGE..........................24
SECTION 10.03. WAIVER OF SUBROGATION; RELEASE................24
SECTION 10.04. DAMAGE AND DESTRUCTION........................24
SECTION 10.05. EXPROPRIATION AND OTHER LOSSES................25
SECTION 10.06. ADJUSTMENT OF EQUITY COMPONENT................26
ARTICLE XI ENVIRONMENTAL RESPONSIBILITY.......................26
SECTION 11.01. ENVIRONMENTAL INDEMNIFICATION BY PJP..........26
SECTION 11.02. ENVIRONMENTAL INDEMNIFICATION BY PTFI.........27
SECTION 11.03. NOTICE OR KNOWLEDGE RELATING TO POSSIBLE
CLAIMS........................................27
SECTION 11.04. RELEASE; WAIVER OF SUBROGATION................28
SECTION 11.05. SURVIVAL......................................28
ARTICLE XII ADDITIONAL AGREEMENTS.............................29
SECTION 12.01. RECORDS.......................................29
SECTION 12.02. ACCESS........................................29
SECTION 12.03. APPLICABLE PERMITS............................29
SECTION 12.04. WASTE HEAT....................................30
SECTION 12.05. NO OTHER CHARGES..............................30
SECTION 12.06. PENALTIES NOT ASSESSED AGAINST PJP............30
ARTICLE XIII FORCE MAJEURE AND LOCAL POLITICAL RISK...........33
SECTION 13.01. FORCE MAJEURE EVENT DEFINED...................33
SECTION 13.02. EFFECT OF FORCE MAJEURE EVENT.................33
SECTION 13.03. MITIGATION AND NOTICE.........................34
SECTION 13.04. LABOR DISPUTES................................34
SECTION 13.05. EXTENDED FORCE MAJEURE........................34
ARTICLE XIV PTFI'S RIGHTS OF ENTRY............................34
SECTION 14.01. ADVERSE CONDITIONS............................35
SECTION 14.02. EXTENDED FORCE MAJEURE........................35
SECTION 14.03. LOCAL POLITICAL RISK..........................36
SECTION 14.04. PJP DEFAULT...................................36
SECTION 14.05.ADVERSE EFFECTS; EFFECT ON OTHER RIGHTS AND
REMEDIES.....................................................37
ARTICLE XV ASSIGNMENT.........................................37
SECTION 15.01. PJP...........................................37
SECTION 15.02. PTFI..........................................37
ARTICLE XVI DEFAULT AND TERMINATION...........................38
SECTION 16.01. EVENTS OF DEFAULT.............................38
SECTION 16.02. [RESERVED]....................................43
SECTION 16.03.REMEDIES ON DEFAULT, APPOINTMENT OF SUCCESSOR
MINE OPERATOR. SUBJECT TO SECTION 16.03(F), .................43
ARTICLE XVII REPRESENTATIONS AND WARRANTIES...................45
SECTION 17.01. REPRESENTATIONS AND WARRANTIES OF PJP.........45
SECTION 17.02. REPRESENTATIONS AND WARRANTIES OF PTFI........46
ARTICLE XVIII INDEMNIFICATION/LIMITATION OF LIABILITY.........47
SECTION 18.01. INDEMNIFICATION BY PTFI.......................47
SECTION 18.02. INDEMNIFICATION BY PJP........................47
SECTION 18.03. LIMITATION OF LIABILITY.......................48
SECTION 18.04. NOTICE AND COOPERATION........................48
SECTION 18.05. DISPUTE OF OBLIGATION.........................49
SECTION 18.06. SURVIVAL......................................49
ARTICLE XIX DISPUTE RESOLUTION................................49
SECTION 19.01. NEGOTIATED RESOLUTION.........................49
SECTION 19.02. PROCEDURE FOR INITIATING ARBITRATION..........50
SECTION 19.03. GENERAL ARBITRATION RULES.....................50
SECTION 19.04. NECESSARY PARTIES.............................51
SECTION 19.05. FINALITY......................................51
SECTION 19.06. VENUE.........................................51
SECTION 19.07. TECHNICAL DISPUTE RESOLUTIONS.................51
SECTION 19.08. COSTS OF ARBITRATION..........................52
SECTION 19.09. PERFORMANCE OBLIGATIONS.......................52
ARTICLE XX MISCELLANEOUS......................................52
SECTION 20.01. APPENDICES AND SCHEDULES......................52
SECTION 20.02. INTENTION OF THE PARTIES......................53
SECTION 20.03. CONFIDENTIALITY...............................53
SECTION 20.04. GOVERNING LAW.................................54
SECTION 20.05. NOTICES.......................................54
SECTION 20.06. SEVERABILITY..................................55
SECTION 20.07. ENTIRE AGREEMENT..............................55
SECTION 20.08. AMENDMENT.....................................55
SECTION 20.09. WAIVER........................................55
SECTION 20.10. TABLE OF CONTENTS; HEADINGS...................55
SECTION 20.11. COUNTERPARTS..................................56
SECTION 20.12. METHOD OF PAYMENT.............................56
SECTION 20.13. DATE OF PAYMENT...............................56
SECTION 20.14. DEFAULT INTEREST..............................56
SECTION 20.15. ATTORNEYS' FEES...............................56
SECTION 20.16. THIRD-PARTY BENEFICIARIES.....................57
SECTION 20.17. FURTHER DOCUMENTS.............................57
SECTION 20.18. PERFORMANCE OF OBLIGATIONS....................57
SECTION 20.19. TAX COOPERATION...............................57
SECTION 20.20. SURVIVAL OF PAYMENT OBLIGATIONS...............57
APPENDIX A DEFINITIONS
APPENDIX B INTERCONNECTION POINTS
APPENDIX C PTFI'S PLANT
APPENDIX D TIMIKA FACILITY
APPENDIX E PTFI'S SITE
APPENDIX F MILL SITE FACILITY
APPENDIX G PORT SITE FACILITY
APPENDIX H ENGINEERING FIRMS
APPENDIX I TECHNICAL SPECIFICATIONS FOR ELECTRICITY AND
ELECTRIC CAPACITY
APPENDIX J COAL FACILITY
APPENDIX K LIP FACILITY
APPENDIX L TARGET CAPACITY LEVELS AND RELIABILITY
APPENDIX M FORM OF MONTHLY INVOICE
APPENDIX N OUTLINE OF SITE PROCEDURES
APPENDIX O OPERATOR'S PERSONNEL
SCHEDULE I SUMMARY OF CHARGES - INITIAL TERM
SCHEDULE II [RESERVED]
SCHEDULE III OUTSTANDING INVESTMENT AND OPTION PRICE
SCHEDULE IV PRINCIPLES GOVERNING USE BY THIRD PARTIES OF
PJP'S TRANSMISSION AND DISTRIBUTION LINES
SCHEDULE V LETTER AGREEMENT CONCERNING LIP FACILITY
DATED JUNE 20, 1995
SCHEDULE VI TAX INFORMATION AND ASSUMPTIONS
SCHEDULE VII TERMS OF SUBORDINATION
AMENDED AND RESTATED POWER SALES AGREEMENT
This AMENDED AND RESTATED POWER SALES AGREEMENT (as
hereafter amended, modified or supplemented in accordance with
the terms hereof, this "Agreement") is made as of December 18,
1997 between P.T. PUNCAKJAYA POWER, an Indonesian limited
liability company ("PJP"), and P.T. FREEPORT INDONESIA COMPANY,
an Indonesian limited liability company, acting in its individual
capacity and in its capacity as Mine Operator ("PTFI").
WHEREAS, PJP and PTFI entered into a Power Sales
Agreement dated as of December 27, 1994 (the "Original Power
Sales Agreement") pursuant to which PJP has produced and sold to
PTFI and PTFI has purchased from PJP electric capacity and
electricity from the Existing Facilities;
WHEREAS, PTFI is presently conducting exploration,
mining and milling operations as the Mine Operator;
WHEREAS, PJP has agreed to acquire from PTFI and PTFI
has agreed to sell to PJP the New Facilities (as hereinafter
defined), and in connection therewith PJP and PTFI desire to
amend and restate the Original Power Sales Agreement to set forth
the terms upon which PJP will sell to PTFI and PTFI will purchase
from PJP electric capacity and electricity from the Facilities;
and
NOW, THEREFORE, in consideration of the foregoing and
the mutual promises contained herein, the parties agree the
Original Power Sales Agreement is amended and restated in its
entirety as follows:
ARTICLE I
DEFINITIONS AND USAGE
Section 1.01. Definitions. Unless the express terms
of this Agreement shall otherwise provide, capitalized terms used
herein shall have the meanings ascribed to them in Appendix A.
Section 1.02. Usage. This Agreement shall be governed
by the following rules of usage:
(a) References to Persons. A reference herein to a
Person includes, unless the context otherwise requires, its
permitted assignees.
(b) References to Laws. A reference herein to an
Applicable Law includes any Governmental Authority's amendment
to, or modification or written interpretation of, such Applicable
Law.
(c) References to Divisions. A reference herein to an
article, section, exhibit, schedule or appendix is to the
article, section, exhibit, schedule or appendix hereto unless
otherwise indicated.
(d) References to Documents. References to any
document, instrument or agreement (a) shall be deemed to include
all appendices, exhibits, schedules and other attachments
thereto, and (b) shall mean such document, instrument or
agreement, as amended, modified and supplemented from time to
time in accordance with the terms thereof and as the same is in
effect at any given time.
(e) Use of "Herein". Unless otherwise specified, the
words "herein", "hereof", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision hereof.
(f) Use of "Including". The words "include" and
"including" do not limit the generality of any description
following such term, and, for such purposes, the rule of ejusdem
generis shall not be applicable to limit a general statement,
which is followed by or referable to an enumeration of specific
matters, to matters similar to the matters specifically
mentioned.
Section 1.03. Parties. (a) This Agreement is entered
into by PTFI, acting in its individual capacity and in its
capacity as Mine Operator.
(b) (i) No Person (other than PTFI) that participates
in COW Operations shall have any liability to PJP hereunder for
acts or omissions of PTFI which are outside the scope of actual
authority given by such Person to PTFI.
(ii) If any Person (other than PTFI) that
participates in COW Operations has any liability to PJP
for the acts or omissions of PTFI hereunder, such
liability shall be limited to such Person's Non-PTFI
Proportion of the liability for such act or omission.
"Non-PTFI Proportion" shall mean, with respect to any
Person other than PTFI, that proportion of the costs of
COW Operations which such Person is required to bear in
accordance with arrangements agreed between such Person
and PTFI, with a certificate from such Person as to
that proportion being conclusive for the purposes of
this Agreement.
(c) PTFI shall notify PJP of any other Person which is
participating at any time in COW Operations, including an address
for service of notices on such Person, but no failure to give
notice under this Section 1.03(c) shall constitute an Event of
Default for purposes of Section 16.01(b) or affect any rights of
such Person hereunder.
ARTICLE II
TERM
Section 2.01. Initial Term; Renewal. The term of this
Agreement shall commence on the Closing Date and, if not sooner
terminated pursuant to the terms hereof, shall terminate twenty
years thereafter (such period, the "Initial Term"); provided,
however, that PTFI shall have the option to extend the Initial
Term for up to an additional ten-year period (the "Renewal Term")
upon its delivery to PJP, no earlier than 730 days and no later
than 365 Days prior to the expiration of the Initial Term of a
written notice expressing its desire to extend the Term (as
defined below) by the Renewal Term. PJP shall have the right, if
PTFI shall have exercised its option to extend the Initial Term
for the Renewal Term, to cause PTFI to enter into a second
Renewal Term (the "Second Renewal Term") for an additional ten-
year period.
The Initial Term, the Renewal Term and the Second
Renewal Term shall be hereinafter collectively referred to as the
"Term".
ARTICLE III
SALE AND PURCHASE OF CAPACITY AND ELECTRICITY
Section 3.01. Capacity Supply Obligations. During the
Term, PJP shall, subject to the terms and conditions set forth
herein including, without limitation, Section 3.04 hereof, make
available, sell and deliver to PTFI, and to each Designated
PTFI-Related Entity, at the Interconnection Point for each
Facility (i) electric capacity in an aggregate amount equal to
the Target Capacity Level of such Facility, and (ii) Electricity
required by PTFI and each Designated PTFI-Related Entity at a
rate not exceeding such Target Capacity Level; provided, however,
that PJP shall use commercially reasonable efforts to satisfy
PTFI and each Designated PTFI-Related Entity's demand for
Electricity at the Interconnection Point for any Facility in
excess of its Target Capacity Level subject to Generally Accepted
Practices. PJP shall deliver all electric capacity and
Electricity pursuant to this Section 3.01 in accordance with the
technical specifications set forth in Appendix I.
Section 3.02. Purchase Obligations. Subject to the
following sentence, PTFI shall accept and purchase all of the
electric capacity and Electricity made available by PJP from the
Facilities and delivered to the Interconnection Points in
accordance with the terms hereof. PTFI shall have the right to
require PJP, by communicating such requirement to PJP through
SCADA or otherwise, to curtail or reduce its deliveries of
Electricity to any Interconnection Point whenever PTFI
determines, in its sole discretion, that such curtailment or
reduction is necessary for any reason; provided, however, that
the exercise of such right by PTFI will not diminish PTFI's
obligation to pay the Capacity Charge or the Fixed O&M Charge.
PTFI shall have the right to accept and purchase
electric energy from other sources, for its own use or the use of
any PTFI-Related Entity, only during such times and to such
extent as PJP is unable to satisfy PTFI's requirements for
electric energy and capacity, except as otherwise provided below.
In addition, PTFI shall have the right to produce, through the
use of energy recovered from its mining operations, up to 100 MW
of electric energy and capacity for its own use or the use of any
PTFI-Related Entity; provided, however, that the exercise of such
right by PTFI will not diminish PTFI's obligation to pay the
Capacity Charge or the Fixed O&M Charge. Except as provided in
this paragraph and in Section 3.06, PJP will be the only source
from which PTFI may procure Electricity and electric capacity.
Section 3.03. Risk of Loss. Risk of loss with respect
to all Electricity shall pass to PTFI upon the delivery by PJP of
such Electricity to the Interconnection Points in accordance with
the provisions of Appendix B hereto.
Section 3.04. Third Party Sales. PJP and PTFI agree
that sales of electric energy and capacity to third parties on
reasonable economic terms are to be encouraged on the terms and
conditions set forth herein. PJP shall give PTFI written notice
of any such proposed sale. PJP shall have the right to sell to
third parties electric energy and capacity produced at any of the
diesel generating units comprising the Facilities, including
those situated at the Mill Facility, the LIP Facility, the Port
Site Facility or the Timika Facility if either (a) PTFI consents
to such sale, which consent shall not be unreasonably withheld or
delayed or (b) PJP shall have demonstrated that (i) the proposed
sale will not impair PTFI's priority right to receive Electricity
from such Facility at the Target Capacity Level of such Facility
and (ii) PJP shall have funded any costs associated with such
sales. The exercise by PJP of its rights under this Section 3.04
shall not excuse or reduce PTFI's obligation to make payments in
respect of the Capacity Charge and the O&M Charges. PTFI's
written approval, which shall be at PTFI's sole discretion, shall
be required for the construction of a fourth Coal Unit and shall
be required for any sale by PJP to a third party of electric
energy or capacity produced at the Coal Facility. Unless
otherwise agreed by PTFI, all sales to third parties of electric
energy and capacity from a Facility of like Reliability and term
to the Electricity and capacity sold to PTFI from such Facility
hereunder shall be at prices equal to or higher than the price
charged to PTFI for Electricity and capacity from such Facility.
A term of at least five (5) years shall be deemed to be a "like
term" for purposes of the preceding sentence.
Section 3.05. Adjustments to Target Capacity Levels.
(a)The Target Capacity Level of any Facility shall be adjusted as
set forth below:
(i) when both the first and second Coal Units
have been Completed, the Target Capacity Level of the
Coal Facility shall be established as an amount
expressed in MW equal to the lower of the Unit Rating
of the first Coal Unit and the second Coal Unit, as
determined by the applicable procedures utilized to
determine Completion of such Coal Unit;
(ii) when the third Coal Unit has been
Completed, the Target Capacity Level of the Coal
Facility shall be increased to an amount expressed in
MW equal to the sum of the Unit Ratings of the two Coal
Units which have the lowest Unit Ratings of all three
Coal Units, as determined by the applicable procedures
utilized to determine Completion of such Coal Unit;
(iii) after the third Coal Unit has been
Completed and (x) at such time when the level of
electric demand for those portions of PTFI's Plant
intended to be served by the Coal Facility is such that
PJP may operate all three Coal Units at their Unit
Rating or (y) at PJP's option, at any time after
September 30, 1999, PJP shall conduct a capacity test
of the Coal Facility consisting of the operation of all
three Coal Units at their Unit Rating for a period of
seven consecutive days using procedures mutually
acceptable to PJP and PTFI (with the output corrected
to reflect actual expected conditions and fuel
specifications); provided, however, that if at the time
of such test PTFI's requirements for Electricity and
electric capacity are less than the amounts of
Electricity and electric capacity that the Coal
Facility is capable of generating while operating at
full load, PJP may, with respect to any test conducted
in accordance with clause (y) above, adjust the
procedures used to conduct such test to account for the
fact that the Coal Facility is operating at less than
full load. The Target Capacity Level shall be adjusted
to an amount expressed in MW equal to the sum of the
tested capacity levels of the two Coal Units which have
the lowest of the tested capacity levels of all three
Coal Units, as determined by the test described in the
preceding sentence and the Unit Rating of each Coal
Unit shall be adjusted to such tested capacity level of
such Coal Unit. Each of PJP and PTFI shall have a one-
time right to demand that the capacity test conducted
pursuant to this clause (iii) be readministered.
(iv) when each of the fourth and fifth units of
the LIP Facility has been Completed, the Target
Capacity Level of the LIP Facility shall be increased
by an amount expressed in MW equal to the tested
capacity of each such unit;
(v) upon the completion of any Required
Alteration, the Target Capacity Level of the relevant
Facility shall be adjusted to reflect any change in
PJP's ability to supply Electricity from such Facility
to the relevant Interconnection Point as a result
thereof;
(vi) upon PTFI's exercise of its rights under
Section 3.02 or 3.06 to produce electric energy and
capacity or to accept electric energy or capacity from
other sources, the Target Capacity Level of any
relevant Facility shall be adjusted to reflect any
change in PJP's ability to supply Electricity from such
Facility to the relevant Interconnection Point as a
direct result thereof;
(vii) upon PTFI's exercise of its rights under
Section 5.01 to interconnect PTFI's Plant with the
distribution and transmission lines of power suppliers
other than PJP (whether directly or indirectly by means
of interconnecting through PJP's transmission and
distribution lines), the Target Capacity Level of any
relevant Facility shall be adjusted to reflect any
change in PJP's ability to supply Electricity from such
Facility to the relevant Interconnection Point as a
direct result thereof;
(viii)upon PTFI's and PJP's establishment of
mutually agreeable terms and conditions relating to the
supply by PJP of additional electric capacity pursuant
to Section 3.06, the Target Capacity Level of the
relevant Facility shall be adjusted to reflect such
agreement; and
(ix) the Target Capacity Levels of the LIP
Facility and Power Plant C are subject to adjustment in
accordance with the Letter Agreement.
The Target Capacity Level of a Facility (other than the Coal
Facility) will be reduced by the Unit Rating of any unit of such
Facility which is taken out of service at the end of its useful
life. A unit (other than a Coal Unit) will be deemed to have
reached the end of its useful life upon achieving 120,000 hours
of operation, unless a test to be conducted upon a unit having
achieved such hours of operation indicates that such unit is
capable of additional hours of reliable operation on a cost
effective basis. The useful life of Power Plant A, and each
other unit which is continuing in service after having achieved
120,000 hours of operation, will be assessed on a year-by-year
basis. The adjustments to the Target Capacity Levels of the Coal
Facility described in clauses (i) and (ii) of this Section
3.05(a) shall not be effective until (a) the Coal Dock is
functionally complete and capable of receiving shipments of coal
on a continuous basis in amounts sufficient to operate the Coal
Facilities at the relevant adjusted Target Capacity Level and (b)
the New Transmission Line is functionally complete and capable of
continuously transmitting electricity at a rate equal to the
relevant adjusted Target Capacity Level. Notwithstanding the
timing of the establishment of or adjustment to the Target
Capacity Level of the Coal Facility in accordance with this
Section 3.05(a), for any period prior to January 1, 2000, for
purposes of assessing Curtailment Hours and Major Unexcused
Outages, the Target Capacity Level of the Coal Facility shall be
zero.
If as a result of any Change in Law the output of any
Facility is curtailed, the Target Capacity Level for such
Facility shall, during the period of such curtailment, be reduced
to reflect such curtailed output.
(b) Except as provided in clauses (a)(i), (ii), (iii),
(iv) or (x) above, PJP and PTFI shall make good faith efforts to
reach agreement on any proposed adjustment to a Target Capacity
Level pursuant to clauses (a)(v) through (ix). If PTFI and PJP
are unable to reach agreement within thirty (30) Days after any
adjustment in Target Capacity Level is proposed by either party,
the issue shall be submitted for resolution pursuant to Section
19.07.
(c) With respect to any adjustment of the Target
Capacity Level of any Facility pursuant to this Section 3.05,
such Target Capacity Level shall be adjusted so as to preserve
the Reliability (as described in Appendix L) applicable to the
Facilities.
Section 3.06. Additional Capacity Requirements by
PTFI. If PTFI shall require on an ongoing basis additional
electric capacity that PJP is not obligated to provide hereunder,
PTFI shall notify PJP of such need. PTFI and PJP shall negotiate
in good faith to establish mutually-agreeable terms and
conditions relating to the supply by PJP of such additional
electric capacity, including adjustments to the pricing and
operating parameters (including, without limitation, measures of
Reliability and Target Capacity Level as further described in
Appendix L), and the schedule for implementation of such supply
of additional electric capacity. If within 90 days of PJP's
receipt of PTFI's notification PJP and PTFI shall not have
reached agreement on such terms and conditions, PTFI shall have
the right to procure such additional electric capacity from other
sources.
ARTICLE IV
SUPPLY OF FUEL
Section 4.01. Obligation to Supply Diesel Fuel. PTFI
shall be obligated to deliver, or cause to be delivered, to PJP,
Diesel Fuel as provided in the Restated Services Agreement.
Section 4.02. Assignment of Coal Supply Agreement.
PTFI hereby assigns, contemporaneously with the execution and
delivery hereof, to PJP all of its right, title and interest in
and to the Coal Supply Agreement. Notwithstanding such
assignment, PTFI shall bear the risk of any failure by PT Kaltim
Prima (or by any other supplier under a Coal Supply Agreement) to
deliver Coal for use in the Coal Facility; provided that (i) PTFI
shall have no risk as to any failure by PT Kaltim Prima (or any
other supplier under a Coal Supply Agreement) to deliver Coal
when such failure to deliver results from PJP's own Fault or
Breach (excluding a PJP Breach under the Coal Supply Agreement
resulting from PTFI's failure to make payments due hereunder) and
(ii) PJP shall not be liable for the payment of any Penalty to
the extent attributable to a failure of the coal supplier to
deliver Coal meeting the specifications set forth in the Coal
Supply Agreement unless such failure results from PJP's own Fault
or Breach (excluding a PJP Breach under the Coal Supply Agreement
resulting from PTFI's failure to make payments due hereunder).
PJP shall not be deemed to be in breach of this Agreement during
any period in which it is unable to supply Electricity and
capacity from the Coal Facility at the levels required by PTFI as
a result of such failure to deliver Coal, no Curtailment Hours
shall accrue during such period and any such period shall be
excluded from any calculation of the Availability of the Coal
Facility for purposes of Schedule I hereto, unless PJP's
inability to supply such Electricity or capacity is a result of
its own Fault or Breach (excluding a PJP Breach under the Coal
Supply Agreement resulting from PTFI's failure to make payments
due hereunder).
ARTICLE V
COORDINATION OF PTFI'S PLANT AND FACILITIES
Section 5.01. Additional PTFI Interconnections. At
any time during the Term, PTFI shall have the right at its sole
cost and expense, upon at least one hundred eighty (180) Days'
prior written notice to PJP, to interconnect PTFI's Plant with
the distribution and transmission lines of PTFI or power
suppliers other than PJP (whether directly or indirectly by means
of interconnecting through PJP's transmission and distribution
lines); provided, however, that in the case of any such
interconnection through PJP's transmission and distribution
lines, PTFI or any such power supplier shall have entered into an
agreement with PJP regarding its right to use PJP's transmission
and distribution lines in accordance with the principles set
forth in Schedule IV hereto. In the event that PTFI exercises
its right pursuant to this Section 5.01 to interconnect PTFI's
Plant to PTFI's or other power suppliers' transmission or
distribution lines, PTFI shall pay all reasonable engineering,
capital and operating costs, if any, incurred by PJP as a result
thereof and take such other action, at its sole cost, as is
necessary to prevent any material interference by such
transmission or distribution lines with the ability of the
Facilities to operate in accordance with the terms hereof.
Section 5.02. Scheduling of Capacity Delivery. In the
absence of contrary notification by PTFI, PJP shall assume that
PTFI (together with any Designated PTFI-Related Entity) requires,
and PJP shall operate and maintain each Facility so as to make
available to PTFI or any Designated PTFI-Related Entity at the
relevant Interconnection Point as set forth in Appendix B hereto,
electric capacity and Electricity at the Target Capacity Level of
such Facility. PTFI shall, from time to time, notify PJP in
writing of the period during which PTFI will make material
alterations to its mining, mill processing or other operations,
which alterations it expects will result in electric capacity
requirement adjustments to the extent that PTFI desires that PJP
perform maintenance during the period of such reduced capacity
requirements. PJP shall perform maintenance to the extent
commercially practicable during any such designated period. No
Additional Output Bonuses or Curtailment Penalties shall be due
with respect to (i) the period of time specified in such notice
and (ii) provided that PJP has initiated startup of the Coal
Facility prior to the conclusion of the period of time specified
in such notice, the 24-hour period of time commencing immediately
following tthe conclusion of the period of time specified in such
notice.
Section 5.03. Use of Coal Dock. PJP hereby grants
PTFI the right to enter on to and use the Coal Dock located at or
near the Coal Facility for the purpose of loading and unloading
PTFI's ore concentrate products and/or Diesel Fuel during any
period during which PTFI's facilities normally used for such
purpose cannot be used. PJP shall not be obligated to make the
Coal Dock available to PTFI during any time when PJP is not
required to provide Electricity or electric capacity to PTFI due
to an Event of Default attributable or relating to PTFI. PJP
shall not be deemed to be in breach of this Agreement during any
period in which PJP is not able to operate the Coal Facility at
its Target Capacity Level as a result of PTFI's use of such Coal
Dock, no Curtailment Hours shall accrue during such period and
such period shall be excluded from any calculation of
Availability of the Coal Facility for purposes of Schedule I
hereto. PTFI shall pay or reimburse PJP for any costs incurred
by PJP as a result of the exercise by PTFI of its right to use
the Coal Dock.
ARTICLE VI
METERING
Section 6.01. Ownership and Maintenance. PJP shall
install, own and maintain one or more Meters to be located,
respectively, on PJP's side of each Interconnection Point to
determine accurately the kilowatt hours of Electricity delivered
to such Interconnection Point. The Meters shall be used as the
basis for billing for Electricity. All Meters shall be sealed to
the extent reasonably practicable. PTFI may install at its sole
cost and expense check meters on its side of each Interconnection
Point.
Section 6.02. Testing of Meters. PJP shall on an
annual basis inspect and test each Meter, and if any Meter
registers inaccurately by more than the Applicable Meter
Precision, PJP shall recalibrate each such inaccurate Meter. PJP
shall provide PTFI reasonable prior notice of, and PTFI shall
have the right to be present during, any occasion when PJP
cleans, changes, repairs, inspects, tests, calibrates or adjusts
a Meter hereunder, or intentionally breaks a seal on any Meter.
PTFI may, at its expense, cause the Meters to be inspected at
more frequent intervals.
Section 6.03. Adjustments for Inaccuracy (a) If any
Meter is out of service, measurement shall be determined by: (i)
a check meter installed by PTFI, if registering accurately at or
within the Applicable Meter Precision or (ii) in the absence of
any such accurately registering check meter, an estimate made by
PJP by reference to quantities measured by such Meter during
periods when the relevant Facility was operating at similar
levels and under similar conditions and the Meter in question was
registering accurately at or within the Applicable Meter
Precision. If PTFI disagrees with the estimate made by PJP and
the parties are not able to amicably resolve such disagreement,
then the issue shall be submitted for resolution pursuant to
Section 19.07.
(b) If, upon testing, a Meter is found to be
registering inaccurately by more than the Applicable Meter
Precision, measurement shall be determined by: (i) a check meter
installed by PTFI, if registering accurately at or within the
Applicable Meter Precision; (ii) in the absence of any such
accurately registering check meter and if upon a calibration test
of the Meter in question a percentage error is ascertainable, by
the amount measured by such Meter as adjusted to reflect such
percentage error; or (iii) in the absence of any such accurately
registering check meter or an ascertainable percentage of error,
an estimate made by PJP by reference to quantities measured by
such Meter during periods when the relevant Facility was
operating at similar levels and under similar conditions and the
Meter in question was registering accurately. If no reliable
information exists as to the period over which such Meter
registered inaccurately by an amount greater than the Applicable
Meter Precision, it shall be assumed for correction purposes
hereunder that such inaccuracy began at the later of (x) the
point in time midway between the testing date and the last
previous date on which such Meter's measurement was tested and
found to be registering accurately at or within the Applicable
Meter Precision and (y) the date one (1) year prior to the
testing date in question. Upon completion of such calibration
test such Meter shall be promptly adjusted, if so required, to
register accurately. If PTFI disagrees with the estimate made by
PJP and the parties are not able to amicably resolve such
disagreement, then this issue shall be submitted for resolution
to Section 19.07.
(c) If, in accordance with paragraph (b) above, a
Meter's measurement is found to register inaccurately by an
amount equal to or less than the Applicable Meter Precision, any
previous readings of such Meter submitted by PJP or PTFI before
such test shall be considered accurate. If, in accordance with
paragraph (b) above, a Meter's measurement is found to register
inaccurately by an amount greater than the Applicable Meter
Precision, any reading of such Meter since the previous test
thereof shall be adjusted to reflect the corrected measurements
determined pursuant to subsection (b) above. After making such
adjustments, any previous payment made by PTFI or PJP on the
basis of such reading shall be compared to the amount of such
payment as adjusted to reflect such reading as adjusted in
accordance with the preceding sentence, and the difference shall
be credited toward or added to the next payment or payments due
either party hereunder, as appropriate; provided that no payment
adjustment to be made under this paragraph (c) shall be made with
respect to the Debt Component of the Capacity Charge.
ARTICLE VII
BILLING AND PAYMENT
Section 7.01. (a) Billing. Throughout the Initial
Term, PTFI shall pay to PJP the amounts described in and
calculated in accordance with Schedule I hereto. Such amounts
shall be invoiced and shall be payable in accordance with
Schedule I and Appendix M hereto. It is the intent of the
parties to minimize PJP's working capital requirements, and the
timing of payments from PTFI to PJP hereunder (other than the
Capacity Charge) will be adjusted by mutual agreement as
necessary to ensure that funds are available to PJP to pay, when
due, operating costs contemplated hereby (excluding operating
costs relating to third party sales), and that excess working
capital funds are not unnecessarily retained by PJP. Throughout
the Renewal Term, PTFI shall pay PJP for Electricity and electric
capacity a price comprised of (i) an equity component to the
extent there remains Outstanding Investment and a debt service
component to the extent there remains Debt of PJP from the
Initial Term (other than Outstanding Investment or Debt allocable
to sales of electricity or electric capacity to third parties);
(ii) a fixed operation and maintenance charge and a variable
operation and maintenance charge (each as defined in Schedule I
hereto); (iii) a charge to fully reimburse PJP for the delivered
cost of fuel for the Facilities; and (iv) an additional amount
equal to the lesser of (x) U.S.$1,500,000 per annum (1998
Dollars, escalated each January 1, commencing January, 1999, by
the following renewal indices: 50% by the GDP Deflator, 33% by
the Copper Deflator and 17% by the Gold Deflator) and (y)
U.S.$0.001 per KWH (1998 Dollars, escalated each January 1,
commencing January, 1999, by the following renewal indices: 50%
by the GDP Deflator, 33% by the Copper Deflator and 17% by the
Gold Deflator). Throughout the Second Renewal Term, PTFI shall
pay PJP for Electricity and electric capacity an amount that is
equivalent to the then fair market value thereof as determined,
prior to the commencement of the Second Renewal Term, by an
independent appraiser to be appointed by PTFI with the reasonable
consent of PJP. The appraiser shall be instructed to assume that
fair market value is the equivalent of service fees paid by
service recipients with respect to similar facilities in similar
geographic localities.
(b) Capacity Charge. Throughout the Initial Term, the
Capacity Charge and Fixed O&M shall not vary according to the
amount of Electricity or electric capacity made available by PJP
or of Electricity taken by PTFI and shall be subject to
adjustment only in accordance with the express terms hereof.
Throughout the Renewal Term, the Capacity Charge and Fixed O&M
Charge will be paid in a manner as agreed by the parties.
Section 7.02. Disputed Payment. PTFI shall make each
payment calculated and invoiced by PJP in accordance herewith
when due, regardless of whether PTFI disputes the amount of such
statement or invoice. Any dispute regarding the amount of any
payment payable by either party hereunder shall be resolved
pursuant to the procedures set forth in Article 19. In the event
that it is determined through such procedures that either PTFI or
PJP is entitled to an adjustment in the amount previously paid,
the amount of such adjustment, together with interest thereon at
the Default Interest Rate from the date of payment of such
invoice until repaid, shall be paid in full in the currency in
which the disputed payment was originally made (i) in a lump sum
or (ii) at PJP's option, (A) during the Term (other than the last
Contract Year) in equal adjustments to the next four payments of
the Equity Component of the Capacity Charge due from PTFI to PJP
or (B) during the last Contract Year of the Term, in equal
adjustments to the remaining monthly payments payable by PTFI
prior to the expiration of the Term or earlier termination of
this Agreement. Payments to be made by PJP under this Section
7.02 shall be subordinated to payments to Senior Secured Lenders
and shall be payable only from and to the extent of amounts
otherwise available to PJP, pursuant to the terms of the
Financing Documents, for the payment of dividends. Interest
shall accrue at the Default Interest Rate on any such payments
which PJP has failed to make when due. This Section 7.02 shall
survive the expiration of the Term or earlier termination of this
Agreement.
Section 7.03. Change in Law Adjustments. (a) If any
Change in Law shall result in an increase or decrease in the cost
to PJP of operating and/or maintaining the Facilities (other than
to the extent such increases or decreases are allocable to sales
of electricity or electric capacity to third parties), then the
Capacity Charge, the Fixed O&M Charge, the Variable O&M Charge
and/or the Fuel Charge, as the case may be, shall be equitably
adjusted to reflect such increase or decrease. PJP and PTFI
shall make good faith efforts to agree on an equitable adjustment
("CIL Adjustment") to the components of the Capacity Charge, the
Fixed O&M Charge, the Variable O&M Charge and/or the Fuel Charge,
as the case may be, such that, after giving effect to such CIL
Adjustment, PJP will be in the same financial position (except to
the extent of any amounts borne by PJP pursuant to Section
7.03(d)) that it would have been had such Change in Law not
occurred; provided that no such CIL Adjustment or Tax Adjustment
(as defined in Section 7.03(b)) shall result in a reduction of
the Debt Component of the Capacity Charge (other than with
respect to any reduction in withholding taxes or similar amounts
included in the Debt Component of the Capacity Charge). If PJP
and PTFI, after making good faith efforts, are unable to agree on
a CIL Adjustment within thirty (30) days after any adjustment is
proposed by either party, the issue shall be submitted for
resolution pursuant to Section 19.07.
(b) If any Change in Law shall result in an increase
or decrease in the Indonesian Taxes payable by PJP (other than to
the extent such increases or decreases are allocable to sales of
electricity or electric capacity to third parties), then, in each
case, the Capacity Charge, the Fixed O&M Charge, the Variable O&M
Charge and/or the Fuel Charge, as the case may be, shall be
equitably adjusted to reflect such increase or decrease. PJP and
PTFI shall make good faith efforts to agree on an equitable
adjustment ("Tax Adjustment") to the components of the Capacity
Charge, the Fixed O&M Charge, the Variable O&M Charge and/or the
Fuel Charge, as the case may be, such that, after giving effect
to such Tax Adjustment, PJP will be in the saame financial
position (except to the extent of any amounts borne by PJP in
accordance with Section 7.03(d)), that it would have been had
such assumption or inaccuracy or Change in Law not occurred;
provided, that the Tax Adjustment with respect to interest on
Subordinated Loans, dividends and profits will be computed for
the Hypothetical Taxpayer with respect to its financial position
as presented in the Closing Model. If PJP and PTFI, after making
good faith efforts, are unable to agree on an adjustment within
thirty (30) days after an adjustment is proposed by either party,
the issue shall be submitted for resolution pursuant to Article
19, excluding Section 19.07.
(c) PJP shall use reasonable efforts to minimize the
detrimental effect to PTFI of any Change in Law on the Capacity
Charge, the O&M Charge and the Fuel Charge.
(d) (i) Subject to subparagraph (iii) of this Section
7.03(d), for each Change in Law PJP shall bear the first $100,000
of any increase in (x) the cost to PJP of operating and/or
maintaining the Facilities or (y) the Indonesian Taxes payable by
PJP, and PJP shall not be entitled to a CIL Adjustment or Tax
Adjustment in respect of such amount(s). For each Change in Law,
any increase in (1) the cost to PJP of operating and/or
maintaining the Facilities or (2) the Indonesian Taxes payable by
PJP, which is in excess of amount(s) borne by PJP pursuant to the
preceding sentence, shall result in a CIL Adjustment and/or Tax
Adjustment, as the case may be, to reflect such increased cost
and/or Indonesian Taxes payable; provided that no such CIL
Adjustment or Tax Adjustment shall result in a reduction of the
Debt Component of the Capacity Charge (other than with respect to
any reduction in withholding taxes or similar amounts included in
the Debt Component of the Capacity Charge).
(ii) Subject to subparagraph (iv) of this
Section 7.03(d), for each Change in Law (A) PJP shall
retain the benefit of the first $100,000 of any
decrease in (x) the cost to PJP of operating and/or
maintaining the (y) the Indonesian Taxes
payable by PJP, (B) PTFI shall continue to pay the
Capacity Charge, the O&M Charge and the Fuel Charge as
set forth in Schedule I hereto and (C) PTFI shall not
be entitled to a CIL Adjustment or Tax Adjustment in
respect of such amount(s). For each Change in Law, any
decrease in (1) the cost to PJP of operating and/or
maintaining the Facilities or (2) the Indonesian Taxes
payable by PJP, which is in excess of $100,000 (subject
to subparagraph (iv) below), shall result in a CIL
Adjustment and/or Tax Adjustment, as the case may be,
to reflect such decreased cost and/or decrease in (or
refund of) Indonesian Taxes.
(iii) At any time when PJP has borne in the
aggregate (x) $1,000,000, during the Initial Term, and
(y) $250,000, during the Renewal Term, of (A) increased
operating and maintenance costs resulting from Changes
in Law, (B) increased Indonesian Taxes resulting from
Changes in Law and (C) Life Cycle Costs, PJP shall be
entitled to CIL Adjustments and/or Tax Adjustments for
all subsequent (1) increases in the cost to PJP of
operating and/or maintaining the Facilities or in the
Indonesian Taxes payable by PJP, which result from a
Change in Law, and (2) Required Alterations. Solely
for purposes of calculating the maximum aggregate
amount which PJP is required to bear (without receiving
the benefit of a CIL Adjustment or Tax Adjustment)
pursuant to the preceding sentence, amounts borne by
PJP pursuant to subparagraph (i) of this Section
7.03(d) and subparagraph (ii) of Section 7.03(e) shall
be offset by amounts of decreases in respect of which
PJP retains the benefit pursuant to subparagraph (ii)
of this Section 7.03(d).
(iv) At any time when PJP has retained the
benefit of, and PTFI has borne, and has not received a
CIL Adjustment and/or Tax Adjustment for, in the
aggregate (x) $1,000,000, during the Initial Term, and
(y) $250,000, during the Renewal Term, of (A) decreased
operating and maintenance costs resulting from Changes
in Law and (B) decreased (or refunded) Indonesian Taxes
resulting from Changes in Law, PTFI shall be entitled
to CIL Adjustments and/or Tax Adjustments for all
subsequent decreases in (1) the cost to PJP of
operating and/or maintaining the Facilities or (2) the
Indonesian Taxes payable by PJP, which result from a
Change in Law. Solely for purposes of calculating the
maximum aggregate amount which PTFI is required to bear
(without receiving the benefit of a CIL Adjustment or
Tax Adjustment) pursuant to the preceding sentence,
amounts of decreases retained by PJP pursuant to
subparagraph (ii) of this Section 7.03(d) shall be
offset by amounts which PJP is required to bear
pursuant to subparagraph (i) of this Section 7.03(d)
and subparagraph (ii) of Section 7.03(e).
(e) Required Alterations. (i) PJP or PTFI shall
give notice to the other party of any Alteration that is required
by any Governmental Authority or by operation of any Governmental
Action pursuant to Applicable Law (a "Required Alteration") which
notice shall include in reasonable detail a description of the
Required Alteration and the projected Alteration Costs thereof.
PTFI shall, within thirty (30) Business Days of having given or
received such notice, either (x) consent to such Required
Alteration and elect to provide for the payment or financing,
which financing shall be in compliance with the terms of the
Financing Documents, of the Alteration Costs of such Required
Alteration as provided in paragraph (ii) of this Section 7.03(e)
or (y) propose to PJP that such Required Alteration be deferred
or not be performed, which proposal shall be accompanied by
proposed amendments hereto to either relieve PJP of, or
compensate PJP for, the increased risks to PJP of deferring or
not performing such Required Alteration. PJP shall consider
PTFI's proposal in good faith, provided, however, that PJP shall
not be required to defer or forego taking any action necessary to
prevent a violation of Applicable Law, in which case the
foregoing clause (x) shall apply. Any dispute as to PTFI's
proposal shall, at either party's request, be submitted to
technical dispute resolution in accordance with Section 19.07.
(ii) PTFI shall elect, within thirty (30)
Business Days of receipt or delivery of a notice of a
Required Alteration (or within fifteen (15) Business
Days following resolution of any matter described in
the last sentence of subparagraph (i) of this Section
7.03(e) that results in the making of a Required
Alteration), as the case may be, to (A) pay directly
the Life Cycle Costs of such Required Alteration (to
the extent not required to be paid by PJP as provided
below and to the extent not otherwise paid by PTFI), or
(B) agree to such modifications to the payments to be
made by PTFI hereunder as shall permit the financing,
which financing shall be in compliance with the terms
of the Financing Documents, of the Life Cycle Costs of
such Required Alteration (excluding any Life Cycle
Costs paid by PTFI pursuant to clause (A) above),
including a mutually acceptable return of and on any
investment made by Shareholders in respect thereof;
provided, however, that PJP shall bear the first
$100,000 of Life Cycle Costs in respect of each
Required Alteration. PTFI shall have no obligations
under this Section 7.03(e) to the extent that a
Required Alteration is attributable to any third party
sale. Upon termination of this Agreement, PTFI's
obligation to pay the Life Cycle Costs shall terminate.
(f) Notwithstanding the separate limits specified in
Sections 7.03(d)(iii) and (iv) and 7.03(e)(ii), it is understood
and agreed that the aggregate amount of costs borne, or benefits
retained, by PJP with respect to all CIL Adjustments, Tax
Adjustments and Life Cycle Costs in the aggregate shall be
limited to $1,000,000 during the Initial Term, and $250,000
during the Renewal Term, after giving effect to the offsetting
described in subparagraphs (d)(iii) and (iv) above, and once the
applicable limit has been reached, PJP or PTFI, as the case may
be, shall be entitled to CIL Adjustments, Tax Adjustments and
adjustments for Required Alterations without further limitation.
Section 7.04. Adjustments to Closing Model. The
Capacity Charge, as set forth in Section 1.2 of Schedule I hereto
has been calculated based in part on the assumptions set forth in
Schedule VI hereto. If the inaccuracy of any of the assumptions
set forth in Schedule VI hereto with respect to Indonesian Taxes
or tax attributes shall result in an increase or decrease in
Indonesian taxes payable by PJP (other than to the extent such
increases or decreases are allocable to sales of electricity or
electric capacity to third parties) or United States taxes
payable by the Shareholders (as assumed in the Closing Model),
then the Closing Model shall be amended to correct any
inaccuracies set forth therein and the Tax Gross-Up shall be
equitably adjusted to maintain the Closing Model's original
project internal rate of return (i.e. 16.65%), with differences
in prior period payments being subject to interest at the Default
Interest Rate.
ARTICLE VIII
OPERATION AND MAINTENANCE
Section 8.01. Operation. PJP shall operate, or cause
to be operated, the Facilities in accordance with Generally
Accepted Practices, the Site Procedures and Applicable Law and in
a manner which will not unreasonably or materially interfere with
the operation of PTFI's Plant. PJP shall not use or occupy, or
permit any portion of PJP's Site or the Facilities to be used or
occupied, in violation of any Applicable Law, or in any manner or
for any business or purpose that would constitute a nuisance.
PTFI shall, at its sole cost and expense, provide, maintain and
operate throughout the Term, in accordance with Generally
Accepted Practices and Applicable Laws, all interconnection and
other related electrical and fuel Equipment on its side of the
Interconnection Points and Diesel Fuel Interconnection Points to
the extent necessary to enable PJP to perform its obligations
hereunder and to operate the Facilities in accordance with
Generally Accepted Practices, the Site Procedures and Applicable
Law.
Section 8.02. Maintenance. PJP shall maintain, or
cause to be maintained, PJP's Site and the Facilities in good
condition and repair, normal wear and tear excepted, and in
accordance with Generally Accepted Practices and Applicable Law.
Without limiting the foregoing, PJP shall use commercially
reasonable efforts to maintain the Facilities so as to enable it
to perform its obligations hereunder and to operate the
Facilities in accordance with Generally Accepted Practices, the
Site Procedures and Applicable Law.
Section 8.03. Certain Operating Matters. Without
limiting the generality of Section 8.01 or Section 8.02, PJP's
operation and maintenance responsibilities shall include the
following:
(a) Site Procedures. Within 180 days after
achievement of the Completion Criteria for the third Coal Unit,
PJP shall prepare and deliver to PTFI detailed site procedures
substantially as outlined in Appendix N (the "Site Procedures"),
which procedures shall be (i) in accordance with all Applicable
Laws and Aplicable Permits and (ii) in accordance with Generally
Accepted Practicess.
(b) Operator's Personnel. PJP's organization
structure for operating and maintenance of the Facilities is set
forth in Exhibit O. PTFI shall be entitled to rely on the
authority of the General Manager to act on behalf of and commit
PJP in regard to matters involving day to day operation and
maintenance of the Facilities hereunder. PJP shall notify PTFI
of any material amendments, supplements or modifications to such
Exhibit O.
PJP shall cause to be present at each Facility at all
times at least one representative, who shall be qualified and
authorized to direct the operation and maintenance of such
Facility.
PJP shall provide and employ in connection with the
operation and maintenance of the Facilities (i) professional and
technically competent key personnel; (ii) qualified, skilled and
experienced supervising engineers and technical assistants to
provide functional direction of the performance of such
activities; and (iii) such skilled, semi-skilled and unskilled
labor as necessary for the proper operation and maintenance of
the Facilities.
(c) Reports. PJP shall orally advise PTFI of the
cause and expected duration of any Unexcused Outage that causes
PTFI to curtail its mining or mill processing operations or
shipping operations at PTFI's Site as soon as possible after its
occurrence. Within 10 days after the conclusion of any Unexcused
Outage, PJP shall deliver a report to PTFI describing the nature
of the Unexcused Outage and detailing any remedial measures
undertaken to correct such Unexcused Outage and to minimize
future Unexcused Outages.
(d) Outages. PJP shall provide, annually with
quarterly updates, notice to PTFI of any scheduled outage of a
Facility to occur during the period covered by such notice. PJP
shall use reasonable efforts to coordinate scheduled outages of
the Facilities with scheduled downtime or periods of diminished
operation of PTFI's Plant.
(e) Safety. Within 180 days after achievement of the
Completion Criteria for the third Coal Unit, PJP shall establish
and provide PTFI with a copy of a written program designed to
allow operation and maintenance of the Facilities in a safe
manner and in accordance with Generally Accepted Practices (the
"Safety Program"). PJP shall conduct its operations in
accordance with all Applicable Laws relating to safety and in
accordance with the Safety Program.
ARTICLE IX
ALTERATIONS TO THE FACILITIES
Section 9.01. Alterations to the Facilities by PJP.
PJP shall notify PTFI of PJP's intention to make or cause to be
made any Alteration, which notice shall state whether, in PJP's
opinion, the failure to make such Alteration would have a
material adverse effect on PJP's ability to perform its
obligations hereunder. If PTFI reasonably determines that such
Alteration would have a material adverse effect on PTFI's
operations or the operations of any PTFI-Related Entity at PTFI's
Site, then PTFI may object to PJP's making such Alteration by
notifying PJP in writing of such determination, describing the
reasons for such determination within thirty (30) days of such
notice. If, in PJP's reasonable judgment, PJP's failure to make
such Alteration would result in a material adverse effect on
PJP's ability to perform its obligations hereunder, and PTFI has
notified PJP of its objection to such Alteration pursuant to the
preceding sentence, the matter shall, at PJP's request, be
submitted to technical dispute resolution in accordance with
Section 19.07. If the Independent Engineer determines that the
failure to make such Alteration would result in a material
adverse effect on PJP's ability to perform its obligations
hereunder, then, subject to the immediately succeeding sentence,
PJP shall be permitted to make such Alteration and shall not be
liable for any Penalties otherwise payable by PJP during the
pendency of such determination. Notwithstanding (i) an agreement
by PTFI or (ii) a determination in accordance with Section 19.07
that PJP's failure to make an Alteration would have a material
adverse effect on PJP's ability to perform its obligations
hereunder, PTFI may propose to PJP that such Alteration be
deferred or not performed, which proposal shall be accompanied by
proposed amendments hereto to either relieve PJP of, or
compensate PJP for, the increased risk of PJP deferring or not
performing such alteration. PJP shall consider PTFI's proposal
in good faith. Any dispute as to PTFI's proposal shall, at
either party's request, be submitted to technical dispute
resolution in accordance with Section 19.07. PJP agrees that,
except with respect to Required Alterations, PJP shall bear all
Alteration Costs and related ownership, management, operation and
maintenance costs without requesting any increase in payments
from PTFI.
Nothing in this Section 9.01 shall be deemed to limit,
or construed as limiting, PJP's ability to make emergency
Alterations, without giving prior notice to PTFI, the failure of
which to make in a timely manner would have a material adverse
effect on PJP's ability to perform its obligations hereunder.
PJP shall notify PTFI in writing within 10 days of having made
any such emergency Alteration.
ARTICLE X
INSURANCE; DAMAGE AND DESTRUCTION; EXPROPRIATION
Section 10.01. PJP's Insurance Coverage.
(a) During the Term, PJP shall maintain with respect
to PJP's Site, the Facilities and the operation, maintenance,
management, repair, replacement, alteration and removal thereof
the following insurance coverage:
(i) Property insurance written in all risk
form, including coverage for earthquakes (subject to
availability on commercially reasonable terms) and
floods and boiler and machinery insurance, in amounts
not less than the full replacement cost of the
Facilities, including any increase in such replacement
costs. During the performance of any construction work
on PJP's Site, such insurance shall be in builder's
risk completed value form, or such other form as is
reasonably acceptable to the parties.
(ii) Business interruption insurance covering
actual business interruption loss sustained and
expediting expense for a period of at least one year.
(iii) Commercial general liability insurance
written on an occurrence basis and including coverage
for premises operations, contractual liability, broad
form property damage and independent contractors, in
the amount of at least $1,000,000 combined single
limits
(iv) If and for so long as PJP has any employees
(including non-Indonesian nationals) based at PJP's
Site, (x) Jamsostek as required by Indonesian law for
PJP's Indonesian employees, (y) worker's compensation
insurance with statutory limits and employer's
liability in the amount of $1,000,000 for any PJP
employee hired in the United States, and (z) other
similar coverage which may be required by law in the
country where any other expatriate employee of PJP is
hired.
(v) Automobile liability insurance, including
all owned, non-owned and hired vehicles, in the amount
of at least $1,000,000.
(vi) Excess liability umbrella insurance with
respect to liabilities covered by the insurance
required pursuant to clauses (iii) and (v) above, in
the amount of at least $25,000,000.
Notwithstanding the provisions of subparagraph (a) of
this Section 10.01, PTFI shall provide or, at its sole
discretion, cause to be provided, in accordance with the Restated
Services Agreement, the coverages specified in Section
10.01(a)(i) and 10.01(a)(ii) above. During any period of time
when PJP is unable to operate any part of the Facilities due to
PTFI's failure to provide, or cause to be provided, the coverage
specified in Section 10.01(a)(i), such period of time shall not
be included for purposes of calculating Unexcused Outages or
Availability. In the event PTFI is unable to provide, or cause
to be provided, the coverage specified in Section 10.01(a)(i),
PJP may obtain such insurance through alternative means, the cost
of which shall be borne by PTFI through the Pass-through O&M
Charge in accordance with Schedule I hereto.
(b) PJP shall carry all insurance required in Section
10.01(a)(iii), 10.01(a)(iv), 10.01(a)(v) and 10.01(a)(vi) above
with one or more good and solvent insurance companies licensed to
do business in Indonesia and reasonably satisfactory to PTFI,
shall endorse such insurance to (x) name PTFI as an additional
named insured thereunder and (y) provide that such insurance is
primary, without any right of contribution of or from any other
insurance carried by PTFI, and shall have a self insured
retention of no less than $50,000 per occurrence. In addition,
all insurance required under Section 10.01(a) shall be endorsed
to provide that such insurance shall not be cancelled, reduced in
amount or changed in any manner that affects the interest of PTFI
without the insurer having first provided written notice to PTFI
at least thirty (30) Days prior to any such change becoming
effective. PJP shall effect such changes in the form (but not
the amount or type) of such policies required pursuant to the
preceding paragraph as are typical for projects of this type,
provided such changes are commercially available at reasonable
rates. PJP shall not assign its interests in any insurance
policy (or any part or parts thereof) which PJP is required to
maintain under this Section, including the right to receive any
proceeds therefrom, except to a Senior Secured Lender. Any
coverage amounts specified in clauses (iii), (iv), (v) and (vi)
of the preceding paragraph shall be adjusted on each fifth
anniversary of the Closing Date by the GDP Deflator.
Section 10.02. Evidence of Coverage. On or before the
Closing Date and, thereafter, at least thirty (30) Days prior to
the expiration date of any such policies, PJP shall furnish PTFI
with a certificate evidencing or, if requested by PTFI, a
duplicate original or agent certified copy of, all insurance
policies PJP is required to maintain hereunder. PTFI shall
furnish PJP with a certificate evidencing or, if requested by
PJP, a duplicate original or agent certified copy of, all
insurance policies PTFI is required to provide or cause to be
provided hereunder.
Section 10.03. Waiver of Subrogation; Release. PTFI
and PJP each hereby release the other, each PTFI-Related Entity
and the officers, agents, Affiliates, commissioners, directors,
shareholders, employees and assignees of any of them from any and
all liability to the other or anyone claiming through or under
them by way of subrogation or otherwise, for any loss or damage
to the releasing party's property caused by any casualty insured
under insurance policies maintained by the releasing party to the
extent of the insurance proceeds received by PTFI or PJP,
respectively, even if such loss or damage results from the
negligence of the released party or anyone for whom the released
party may be responsible. PTFI and PJP shall each cause their
respective property insurance policies to provide that the
insurer waive all right to recover by way of subrogation against
the other party and its officers, agents, Affiliates,
commissioners, directors, shareholders, employees and permitted
assigns in connection with any such loss or damage and shall each
waive all right to recover against the other party and its
officers, agents, Affiliates, commissioners, directors,
shareholders, employees and permitted assigns in connection with
any such loss or damage relating to property damage to the extent
it is self-insured. This Section shall not enlarge, reduce or
otherwise alter the obligations set forth in Section 11.04.
Section 10.04. Damage and Destruction. If the
Facilities or any part thereof shall be damaged or destroyed by
fire or other casualty during the Term, and the proceeds of the
insurance coverage received by PJP requirred to be obtained
hereunder are sufficient to pay the costs of repairing or
restoring the same in a good and workmanlike manner and in
accordance with Generally Accepted Practices and Applicable Law,
as nearly as possible to its value, condition and character
immediately before such damage or destruction, then, subject to
the terms of the Financing Documents, PJP shall proceed with such
repair or restoration as soon as possible after the damage or
loss occurs and shall complete such repair or restoration with
due diligence and all due speed. In the event the proceeds of
the insurance coverage required to be obtained hereunder are not
sufficient to pay the costs of repairing or restoring the
Facilities or portion thereof as contemplated herein, subject to
the terms of the Financing Documents PTFI may require PJP to
proceed with the repair or restoration of such Facilities
(excluding any portion of such Facilities constituting an
Alteration made in connection with any sale approved or permitted
pursuant to Section 3.04 hereof) as contemplated herein, in which
event PTFI shall be obligated to pay all such costs in excess of
the insurance proceeds (other than any deductible amount, which
shall be borne by PJP). Of the total amount paid by PTFI
pursuant to the preceding sentence, an amount no greater than the
amount of the Outstanding Investment shall constitute PSA
Subordinated Debt owing by PJP to PTFI, and if the total amount
anticipated to be paid by PTFI pursuant to the preceding sentence
exceeds the amount of the Outstanding Investment, PTFI shall have
the option, exercisable within ninety (90) Days after the date on
which PTFI made the last payment towards such costs of repair or
restoration, to purchase all of the assets of PJP or all of the
Shares of PJP from the Shareholders for an amount equal to the
Outstanding Investment minus $250,000 in accordance with the
Option Agreement, provided that PTFI shall not have such option
if PJP shall pay the portion of such costs which exceeds the
amount of the Outstanding Investment. Upon such purchase, PTFI
shall pay or assume the obligation to pay in accordance with the
terms of agreements between PJP and Senior Secured Lenders all
outstanding principal, all interest thereon and all other amounts
payable to Senior Secured Lenders. Any excess insurance proceeds
remaining after the Facilities, or any portion thereof, have been
repaired or restored as contemplated above shall be given to
PTFI. However, in the event that the Facilities or any portion
thereof are not repaired or restored, as contemplated in the
second sentence of this Section 10.04, any insurance proceeds
received during the Initial Term shall be retained by PJP and any
insurance proceeds received during the Renewal Term shall be paid
to PTFI. Any decision not to repair or restore the Facilities or
portion thereof under this Section 10.04 shall not constitute an
abandonment of the Facilities or portion thereof for purposes
hereof.
Section 10.05. Expropriation and Other Losses. In the
event PJP receives compensation from any Governmental Authority
(including any Person acting on behalf of any such Governmental
Authority) in respect of any expropriation, condemnation or
similar action or in respect of a Local Political Risk Event, the
amount of such compensation shall be retained by PJP.
Section 10.06. Adjustment of Equity Component. Upon
any permanent loss of a portion of the Facilities, whether
through expropriation or casualty and the payment to PJP of the
full amount of the proceeds or compensation specified in Section
10.04 or Section 10.05, respectively, the amounts set forth in
Schedule III hereto shall each be adjusted by multiplying such
amounts by a percentage equal to one minus the Allocation
Percentage applicable to such portion of the Facilities subject
to permanent loss.
ARTICLE XI
ENVIRONMENTAL RESPONSIBILITY
Section 11.01. Environmental Indemnification by PJP.
Subject to Section 18.03, PJP hereby agrees to indemnify, defend
and hold harmless PTFI, all Persons participating from time to
time in COW Operations and all PTFI-Related Entities, their
respective officers, directors, employees, commissioners and
agents (each, a "PTFI Indemnitee") from and against any and all
losses, liabilities (including strict liability and liability to
third parties for toxic torts), damages, injuries, fines,
assessments, expenses, including reasonable attorneys' fees and
disbursements (except that PJP shall only bear the cost of
representation by one firm of attorneys in each jurisdiction as
is appropriate), (including any such losses, liabilities,
damages, injuries, expenses, costs, judgments or claims asserted
or arising under any law, statute, ordinance, code, rule,
regulation, order or decree regulating or imposing liability,
including strict liability, or standards of conduct concerning
any Hazardous Substance), costs of investigation and monitoring,
costs of remediation, costs of any lawsuit, settlement or
judgement and claims of any and every kind whatsoever paid,
incurred or suffered by, or asserted against, any PTFI Indemnitee
by any Person, for, with respect to, or as a direct or indirect
result of the escape, seepage, leakage, spillage, discharge,
emission, migration or release from PJP's Site or the Facilities
of any Hazardous Substance after the Closing Date, but only
the extent such escape, seepage, leakage, spillage, discharge,
emission, migration or release from PJP's Site or the Facilities
of any Hazardous Substance did not result from (i) with respect
to the New Facilities, a condition affecting the portion of PJP's
Site on which any component of the New Facilities is situated,
which condition existed prior to the date such component of the
New Facilities was Completed, or (ii) with respect to the
Existing Facilities, a condition arising on or prior to December
26, 1999 which is caused by any operational practice engaged in
by PTFI prior to its conveyance of the Existing Facilities to PJP
and continued thereafter by PJP with respect to the operation of
the Existing Facilities, which practice PTFI has not informed PJP
is in violation of Applicable Laws. Payments to be made by PJP
under this Section 11.01 shall be subordinated to payments to
Senior Secured Lenders and shall be payable only from and to the
extent of amounts otherwise available to PJP pursuant to the
terms of the Financing Documents for the payment of dividends,
and shall not be credited toward amounts owing from PTFI.
Interest shall accrue at the Default Interest Rate on any such
payments which PJP has failed to make when due.
Section 11.02. Environmental Indemnification by PTFI.
Subject to Section 18.03, PTFI hereby agrees to indemnify, defend
and hold harmless PJP, and its officers, directors,
commissioners, employees, shareholders and agents (each, a "PJP
Indemnitee") from and against any and all losses, liabilities
(including strict liability and liability to third parties for
toxic torts), damages, injuries, fines, assessments, expenses,
including reasonable attorneys' fees and disbursements (except
that PTFI shall only bear the cost of representation by one firm
of attorneys in each jurisdiction as is appropriate), (including
any such losses, liabilities, damages, injuries, expenses, costs,
judgment or claims asserted or arising under any law, statute,
ordinance, code, rule, regulation, order or decree regulating or
imposing liability, including strict liability, or standards of
conduct concerning any Hazardous Substance), costs of
investigation and monitoring, costs of remediation, costs of any
lawsuit, settlement or judgment and claims of any and every kind
whatsoever paid, incurred or suffered by, or asserted against,
any PJP Indemnitee by any Person for, with respect to, or as a
direct or indirect result of (i) with respect to the Existing
Facilities, the presence on or before December 26, 1994, on or
under such portion of PJP's Site on which any component of the
Existing Facilities is located, of any Hazardous Substance, (ii)
with respect to the New Facilities, the presence on or before the
date on which any component of the New Facilities is Completed,
on or under any portion of PJP's Site on which such component of
the New Facilities is situated, of Hazardous Substances (except
to the extent resulting from the acts or omissions of PJP or its
agents, contractors or employees) and (iii) the escape, seepage,
leakage, spillage, discharge, emission, migration or release of
any Hazardous Substance from the operations of PTFI or any
PTFI-Related Entity or PTFI's Site on or after the Closing Date.
Section 11.03. Notice or Knowledge Relating to Possible
Claims.
(a) If either party receives any notice of, or
knowledge of, an event, condition or occurrence which would
reasonably be expected to result in any claim for which
indemnification may be sought under the indemnification
provisions of this Article 11 from any Person, then such party
shall promptly notify the other party orally and in writing of
said notice; provided, however, that the failure by either party
to give the other party prompt notice shall not relieve the other
party from its indemnification obligations hereunder except to
the extent the rights of the other party are actually prejudiced
by such failure to give notice as required by this Section 11.03.
(b) The indemnified party may, at its own expense,
retain separate counsel and participate in the defense of any
such suit or action. The indemnified party shall not compromise
or settle a claim without the prior written consent of the
indemnifying party, which consent shall not be unreasonably
withheld.
Section 11.04. Release; Waiver of Subrogation. The
indemnity of the parties set forth in this Article 11 shall be
limited only to that portion of any such loss, damage, cost,
expense, fine, fee or claim which is not covered by insurance
maintained by or for the benefit of the PTFI Indemnitee or PJP
Indemnitee, as the case may be, seeking indemnification. PTFI
hereby releases each PJP Indemnitee and PJP hereby releases each
PTFI Indemnitee, in each case from any and all liability to PTFI
or PJP, as the case may be, or anyone claiming through or under
PTFI or PJP, as the case may be, by way of subrogation or
otherwise, for any loss, damage, cost, expense, fine, fee or
claim for which indemnification would otherwise be provided in
this Article 11 to the extent covered by insurance maintained by
or for the benefit of the releasing party to the extent such
release does not invalidate any insurance coverages. Each party
shall cause its insurance policies to provide that the insurer
waive all right to recover by way of subrogation or otherwise
against any PTFI Indemnitee or PJP Indemnitee, as the case may
be, for any such loss, damage, cost, expense, fine, fee or claim
under this Article 11 which is covered by such insurance policy.
Section 11.05. Survival. Any claims arising under this
Article 11 with respect to events occurring before the expiration
or termination of this Agreement shall survive the expiration or
earlier termination of this Agreement.
ARTICLE XII
ADDITIONAL AGREEMENTS
Section 12.01. Records. Each party shall keep complete
and accurate records appropriate for proper administration of
this Agreement. Without limiting the foregoing, PJP shall
maintain complete and accurate records of all O&M Charges, Fuel
Charges, amounts incurred in connection with CIL Adjustments, Tax
Adjustments, Required Alterations and all other amounts where one
party must pay the other and an accurate and up-to-date operating
log for each Facility, including records of electricity
production for each clock hour, changes in operating status,
maintenance periods and any unusual conditions found during
inspections. All such records shall be maintained for a minimum
of ten (10) years after the creation of such records and for any
additional length of time required by any Governmental Authority.
Either party shall have the right, upon fourteen (14) Days'
notice to the other party, at its own expense to examine and
audit the records of the other party relating to this Agreement.
Section 12.02. Access. (a) Each Facility shall be open
to PTFI or its agent for inspection at reasonable times and upon
reasonable notice to PJP, provideed that (i) PTFI or its agent
shall comply with all safety requirements imposed on PJP's
employees and contractors, and (ii) such access shall not
materially interfere with the operation, management and
maintenance of any Facility.
(b) Except as otherwise provided in this Agreement,
PTFI shall have no right to (x) direct the operations of any
Facility or any of the other ancillary assets comprising Property
or (y) control PJP or its respective agents, employees, or
independent contractors in the conduct of their duties. Any
rights created by this Agreement in PTFI to enter into or onto
the Property for purposes of reviewing the operation,
maintenance, efficiency or output of the Facilities or such other
assets are created by the express consent of PJP and are not
intended by such creation to transfer any rights or duties of
ownership, operation or control of the Property from PJP to PTFI.
Representatives of PTFI may enter into or onto the Property only
under the terms of this Agreement.
Section 12.03. Applicable Permits. Each of PTFI and
PJP shall use commercially reasonable efforts to cause to be
issued and maintained in full force and effect in its name all
Applicable Permits required or advisable under Applicable Laws
for the operation, maintenance and management, or in connection
with any Alteration, of any Facility or PTFI's Plant, as
applicable, and the consummation of any of the transactions
contemplated hereby and the performance of their respective
obligations hereunder. PTFI and PJP shall cooperate and, to the
extent necessary or appropriate, coordinate their efforts in
acquiring and maintaining all such Applicable Permits.
Section 12.04. Waste Heat. PTFI shall have the right
to utilize waste heat produced by the Coal Facility for use in
PTFI's concentrate drying operations. Upon PTFI's request, PJP
shall install such equipment as is necessary in order for PTFI to
utilize such waste heat. PTFI shall be responsible for all
incremental capital and operating costs incurred by PJP in making
such waste heat available to PTFI.
Section 12.05. No Other Charges. Except as expressly
provided herein, neither party shall be entitled to any charge,
fee, payment or other compensation for performing such party
obligations hereunder.
Section 12.06. Penalties Not Assessed Against PJP. The
parties agree that PJP shall not be liable for
(a) any Availability Penalty hereunder
(i) during the pendency of the Independent Engineer's
determination regarding the making of an
Alteration pursuant to Section 9.1;
(ii) during the pendency of a Force Majeure Event or a
Local Political Risk Event;
(iii) as a result of PJP's suspension of delivery
of Electricity due to an Event of Default by PTFI,
if such penalty would otherwise have arisen from
suspension of delivery of Electricity;
(iv) to the extent attributable to the failure of the
coal supplier to deliver Coal meeting the
specifications set forth in the Coal Supply
Agreement, unless such failure results from PJP's
own Fault or Breach (excluding a PJP Breach under
the Coal Supply Agreement resulting from PTFI's
failure to make payments due hereunder);
(v) resulting from PJP's inability to operate the Coal
Facility as a result of PTFI's use of the Coal
Dock;
(vi) to the extent attributable to the failure (1) of
PJP or any permitted assignee of PJP pursuant to
Section 11.7 of the Restated Services Agreement to
receive a service, or (2) of PTFI or any successor
or permitted assignee of PTFI to otherwise fulfill
an obligation, in each case, pursuant to the
Restated Services Agreement; or
(vii) if PJP is unable to operate the Facilities as
a result of PTFI's failure to provide, or cause to
be provided, the insurance coverage specified in
Section 10.01(a)(i);
(b) any Heat Rate Penalty hereunder
(i) at any time prior to January 1, 2000 with respect
to the Coal Facility;
(ii) during the pendency of the Independent Engineer's
determination regarding the making of an
Alteration pursuant to Section 9.1;
(iii) during the pendency of a Force Majeure Event
or a Local Political Risk Event;
(iv) as a result of PJP's suspension of delivery of
Electricity due to an Event of Default by PTFI, if
such penalty would otherwise have arisen from
suspension of delivery of Electricity;
(v) to the extent attributable to the failure of the
coal supplier to deliver Coal meeting the
specifications set forth in the Coal Supply
Agreement, unless such failure results from PJP's
own Fault or Breach (excluding a PJP Breach under
the Coal Supply Agreement resulting from PTFI's
failure to make payments due hereunder); or
(vi) to the extent attributable to the failure (1) of
PJP or any permitted assignee of PJP pursuant to
Section 11.7 of the Restated Services Agreement to
receive a service, or (2) of PTFI or any successor
or permitted assignee of PTFI to otherwise fulfill
an obligation, in each case, pursuant to the
Restated Services Agreement; or
(c) any Curtailment Penalty or Unexcused Outages assessed
hereunder
(i) during the pendency of the Independent Engineer's
determination regarding the making of an
Alteration pursuant to Section 9.1;
(ii) during the pendency of a Local Political Risk
Event;
(iii) as a result of PJP's suspension of delivery
of Electricity due to an Event of Default by PTFI,
if such penalty would otherwise have arisen from
suspension of delivery of Electricity;
(iv) to the extent attributable to the failure of the
coal supplier to deliver Coal meeting the
specifications set forth in the Coal Supply
Agreement, unless such failure results from PJP's
own Fault or Breach (excluding a PJP Breach under
the Coal Supply Agreement resulting from PTFI's
failure to make payments due hereunder);
(v) resulting from PJP's inability to operate the Coal
Facility as a result of PTFI's use of the Coal
Dock;
(vi) to the extent attributable to the failure (1) of
PJP or any permitted assignee of PJP pursuant to
Section 11.7 of the Restated Services Agreement to
receive a service, or (2) of PTFI or any successor
or permitted assignee of PTFI to otherwise fulfill
an obligation, in each case, pursuant to the
Restated Services Agreement;
(vi) if PJP is unable to operate the Facilities as a
result of PTFI's failure to provide, or cause to
be provided, the insurance coverage specified in
(vii) to the extent resulting from deficiencies in
the design of the New Transmission Line towers if
such deficiencies would reasonably have been
uncovered had a physical load test been performed
on the design of the towers.
ARTICLE XIII
FORCE MAJEURE AND LOCAL POLITICAL RISK
Section 13.01. Force Majeure Event Defined. As used
herein, "Force Majeure Event" shall mean any act, omission or
circumstance, including, without limitation, any event or
circumstances occasioned by or resulting from any acts of God,
acts of the public enemy, wars, blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, tornadoes,
windstorms, volcanoes, fires, storms, floods, disasters, civil
disturbances, explosions, sabotage, Governmental Actions, the
failure to act of any Governmental Authority, the inability to
obtain, maintain or renew any Applicable Permits, changes in
Applicable Laws, shortages of labor or materials, strikes or
other labor disputes, failures or partial failures of any
Equipment, failure of transportation which, in each case, is not
within the commercially reasonable control of a party hereto, is
not due to a Local Political Risk Event, and wholly or partially
prevents or delays such party from performing its obligations
hereunder; provided, however, that "Force Majeure Event" shall
not include an act, omission or circumstance arising from the
Fault or Breach of, or economic hardship affecting, the party
claiming that a Force Majeure Event has occurred.
Section 13.02. Effect of Force Majeure Event. The
parties shall be excused from performing any of their respective
obligations hereunder (excluding (i) payment obligations
established in Article 7, including, without limitation, payment
in all circumstances of the Debt Component of the Capacity
Charge, (ii) any other undisputed payment obligations arising out
of this Agreement and (iii) all obligations under this Article 13
and Articles 18 and 19) and shall not be liable in damages (other
than the Penalty amounts calculated in Schedule I hereto, if
applicable) or otherwise on account of the non-performance of any
such obligation, for so long as and to the extent that either
party is unable to perform such obligation as a result of any
Force Majeure Event. For purposes of this Section 13.02, a Local
Political Risk Event shall be deemed to be a Force Majeure Event
with respect to PJP.
Section 13.03. Mitigation and Notice. The occurrence
of a Force Majeure Event shall not relieve a party of its
obligations and liability hereunder to the extent such party
fails to use commercially reasonable efforts to remove the cause
and remedy or mitigate the effects of the Force Majeure Event if,
using commercially reasonable efforts, such party could have
removed such cause or remedied or mitigated such effects. In
addition, during the duration of any Force Majeure Event, PJP
shall exercise reasonable efforts to reduce costs included in the
Fixed O&M Charge, and shall reimburse to PTFI any such reduction
in cost, subject to PJP's right to apply such reduction first to
pay or reimburse any loss or expense (other than Penalties due
hereunder) arising from such Force Majeure Event not covered by
insurance or borne by PTFI through payments made hereunder. In
addition, no Force Majeure Event shall relieve a party of its
obligations or liability hereunder unless such party shall give
notice (including a reasonable description of such Force Majeure
Event) to the other party within five (5) Days of such party
becoming aware of the occurrence of such Force Majeure Event.
Upon request and within a reasonable time period, the party whose
obligations were suspended shall provide the other party with a
plan for remedying the effects of such Force Majeure Event.
Notwithstanding anything to the contrary in this Section 13.03,
in no event shall PTFI or PJP take any action which violates
Applicable Law. For purposes of this Section 13.03, a Local
Political Risk Event shall be deemed to be a Force Majeure Event
with respect to PJP.
Section 13.04. Labor Disputes. This Article 13 shall
not require the settlement of any strike, walkout, lockout, or
other labor dispute on terms which, at the discretion of the
party involved, is contrary in any material way to its interests.
It is understood and agreed that the settlement of such labor
disputes shall be at the sole discretion of the party involved.
Section 13.05. Extended Force Majeure. If an Extended
Force Majeure Event occurs, then PTFI may, upon ten (10) days
prior written notice, terminate this Agreement. Upon such
termination, PTFI shall (i) purchase the Shares at an amount
equal to the Outstanding Investment, in accordance with the
Option Agreement and (ii) pay or assume the obligation to pay in
accordance with the terms of agreements between PJP and Senior
Secured Lenders, all outstanding principal, all interest thereon
and all other amounts payable to Senior Secured Lenders.
ARTICLE XIV
PTFI'S RIGHTS OF ENTRY
Section 14.01. Adverse Conditions. PJP shall promptly
notify PTFI of any Adverse Conditions. Such notice shall contain
a description of such Adverse Condition in reasonable detail and
the steps PJP proposes to take in order to remedy such Adverse
Condition. If any Adverse Condition comes to PTFI's attention
concerning which PJP has not given PTFI notice, PTFI shall
promptly provide PJP with notice thereof. Promptly upon receipt
of such notice from PTFI, PJP shall provide PTFI with a
description of such Adverse Condition in reasonable detail and
the steps PJP proposes to take in order to remedy such Adverse
Condition. If PJP shall not have commenced to take steps
reasonably calculated to remedy such Adverse Condition within a
reasonable time (depending on the nature of the Adverse Condition
and the threat it poses to PTFI's operations or the operations of
a PTFI-Related Entity at PTFI's Site), PTFI shall have the right,
exercisable in its sole discretion, after providing PJP with
reasonable notice, to enter onto PJP's Site or the Facilities (as
the case may be) and take such action as it deems necessary or
advisable (including the operation of any or all of the
Facilities) to remedy such Adverse Condition. During any period
that PTFI has entered and remained on PJP's Site pursuant to this
Section 14.01, PTFI shall continue to pay, without any setoffs or
other deductions against such amounts, PJP all amounts due in
accordance with Article 7, including, without limitation, the
Debt Component of the Capacity Charge. PTFI shall quit PJP's
Site or the Facilities, as the case may be, promptly upon
remedying such Adverse Condition. If PTFI exercises its right of
reentry purssuant to this Section 14.01, PTFI may quit PJP's Site
at any time upon fifteen (15) Days' prior written notice. PTFI
may invoice PJP for costs incurred by PTFI in performing the
actions described above and PJP shall pay such costs within
twenty (20) Business Days. PJP's payment of such invoice shall
be subordinated to payments to Senior Secured Lenders to the
extent that such payment shall only be required to be made by PJP
from funds which, in accordance with the agreements between PJP
and Senior Secured Lenders, are available for PJP to pay
dividends or amounts due in respect of subordinated debt to
Shareholders or their Affiliates. Interest shall accrue at the
Default Interest Rate on any such payments which PJP has failed
to make within such 20 Business Day period. PJP may dispute the
necessity of the actions and reasonableness of any costs incurred
in performing necessary actions, and any reimbursement by PTFI of
payments by PJP shall include accrued interest at the Default
Interest Rate from the date of payment by PJP.
Section 14.02. Extended Force Majeure. Upon the
occurrence of an Extended Force Majeure or the reasonable
expectation of PTFI that a Force Majeure Event affecting PJP
shall become an Extended Force Majeure, PTFI shall have the
right, at its sole cost and exercisable in its sole discretion,
upon reasonable notice to PJP, to enter onto PJP's Site or the
Facilities (as the case may be) and take such action as it deems
necessary or advisable (including the operation of any or all of
the Facilities) to remove the cause and remedy or mitigate the
effects of such Extended Force Majeure or Force Majeure Event, as
the case may be. During any period that PTFI has entered and
remained on PJP's Site pursuant to this Section 14.02, PTFI shall
continue to pay, without any setoffs or other deductions against
such amounts, PJP all amounts due in accordance with Article 7,
including, without limitation, the Debt Component of the Capacity
Charge. If PTFI exercises its right of reentry pursuant to this
Section 14.02, PTFI may quit PJP's Site at any time upon fifteen
(15) Days' prior written notice to PJP but in no event shall PTFI
remain on PJP's Site or the Facilities for more than fifteen (15)
Days after the cessation of the Extended Force Majeure or Force
Majeure Event giving rise to PTFI's right of entry. For purposes
of this Section 14.02, "Force Majeure Event" shall have the
meaning given in Section 13.01 without giving effect to the
proviso in such Section.
Section 14.03. Local Political Risk. Upon the
occurrence of a Local Political Risk Event affecting PJP, PTFI
shall have the right, at its sole cost and exercisable in its
sole discretion, after providing PJP with reasonable notice, to
enter onto PJP's Site or the Facilities (as the case may be) and
take such action as it deems necessary or advisable (including
the operation of any or all of the Facilities) to remove the
cause and remedy or mitigate the effects of such Local Political
Risk Event. During any period in which PTFI has entered and
remains on PJP's Site in accordance with this Section 14.03, PTFI
shall continue to pay, without any setoffs or other deductions
against such amounts, PJP all amounts due in accordance with
Article 7, including, without limitation, the Debt Component of
the Capacity Charge. If PTFI exercises its right of reentry
pursuant to this Section 14.03 PTFI may quit PJP's Site at any
time upon fifteen (15) Days' prior written notice to PJP but in
no event shall PTFI remain on PJP's Site or the Facilities for
more than fifteen (15) Days after the cessation of the Local
Political Risk Event giving rise to PTFI's right of entry.
Section 14.04. PJP Default. Upon the occurrence of an
Event of Default by PJP pursuant to Section 16.01(d) or (e), PTFI
shall have the right, at PJP's cost, to enter PJP's Site and
operate any or all of the Facilities. During any period in which
PTFI has entered and remains on PJP's Site in accordance with
this Section 14.04, PTFI shall pay to PJP all amounts due in
accordance with Article 7, except that PTFI may offset any
reasonable costs referred to in the previous sentence against
such amounts other than the Debt Component of the Capacity
Charge. If PTFI exercises its right of reentry pursuant to this
Section 14.04, PTFI may quit PJP's Site at any time upon fifteen
(15) Days' prior written notice to PJP but in no event shall PTFI
remain on PJP's Site or the Facilities for more than fifteen (15)
Days after the cessation of the Event of Default giving rise to
PTFI's right of entry.
Section 14.05. Adverse Effects; Effect on Other Rights
and Remedies.
(a) PTFI shall use commercially reasonable efforts to
minimize any adverse effects on the operations of PJP's Site or
the Facilities caused by the exercise of any right of reentry it
may have under this Article 14.
(b) Except as expressly provided in this Article 14,
PTFI's exercise, or the failure by PTFI to exercise, any of its
rights under this Article 14 shall not relieve PJP of its
obligations hereunder nor limit any right or remedy otherwise
available to PTFI.
(c) Notwithstanding anything to the contrary in this
Article 14, during the Renewal Term PTFI shall bear all costs
incurred by PTFI in connection with the exercise of its rights
under this Article 14, without any right of reimbursement from
PJP.
ARTICLE XV
ASSIGNMENT
Section 15.01. PJP. PJP may not assign its rights or
obligations hereunder without the prior written consent of PTFI,
which consent shall not be unreasonably withheld; provided,
however, that PJP shall have the right to assign all right, title
and interest of PJP herein to a Senior Secured Lender as security
for the obligations of PJP to such Senior Secured Lender.
Section 15.02. PTFI. PTFI shall have the right, with
the prior written consent of PJP, to assign its rights or
obligations hereunder; provided, however, that notwithstanding
the foregoing, if such assignment is made pursuant to and in
accordance with the Default Remedies Co-ordination Agreement,
PJP's consent shall not be so required. PJP shall, in the case of
any such assignment, cooperate with PTFI and any assignee and
take such reasonable steps and execute all such documents and
deeds as PTFI or such assignee may request or as may be necessary
to effect any such assignment. Any assignee (other than a Senior
Secured Lender, as collateral assignee) of PTFI hereunder shall
assume in writing all existing payment obligations, and all other
obligations arising after such assignment, of PTFI with respect
to this Agreement, but no such assignment by PTFI of its rights
hereunder shall relieve PTFI of any of its obligations hereunder,
whether arising prior to or after such assignment. PTFI shall
pay any and all reasonable out-of-pocket costs incurred by PJP in
connection with any such assignment by PTFI.
ARTICLE XVI
DEFAULT AND TERMINATION
Section 16.01. Events of Default. The following shall
be events of default ("Events of Default") hereunder:
(a) with respect to either party hereto, the failure
by such party to pay any payment due hereunder (except, in the
case of PJP, payments to be made to PTFI which are subordinated
pursuant to the terms hereof), and the continuation of such
failure for fifteen (15) Days after receipt by the nonpaying
party of written notice of the failure to pay;
(b) except as set forth in Section 16.01(a), with
respect to either party hereto, the failure by such party to
comply with any other material term, provision or covenant of
this Agreement, the Restated Services Agreement or the New Asset
Sale Agreement, and the continuation of such failure for forty-
five (45) Days after notice thereof to the nonperforming party;
provided, however, if such failure cannot reasonably be cured
within such forty-five (45) Days and the nonperforming party
shall commence to cure such failure within such forty-five (45)
Day period and shall thereafter proceed with reasonable diligence
and good faith to cure such failure, then such forty-five (45)
Day period shall be extended for such longer period as would be
reasonably necessary for such party to cure the same with all
reasonable diligence and good faith;
(c) with respect to either party hereto, such party
shall file a voluntary petition in bankruptcy, or shall be
adjudicated bankrupt or insolvent, or shall file any petition or
answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under
any present or future statute or law relating to bankruptcy,
insolvency, or other relief for debtors under Applicable Law or
shall seek, consent to, or acquiesce in the appointment of any
trustee, receiver, conservator or liquidator of such party or all
or any substantial part of its properties, or a court of
competent jurisdiction shall enter an order, judgment or decree
approving a petition filed against such party seeking a
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute or law relating to bankruptcy, insolvency or other
relief for debtors, whether state or federal, and such party
shall consent to or acquiesce in the entry of such order,
judgment or decree, or the same shall remain unvacated and
unstayed for an aggregate of sixty (60) Days from the date of
entry thereof, or any trustee, receiver, conservator or
liquidator of such party or of all or any substantial part of its
properties shall be appointed without the consent or acquiescence
of such party and such appointment shall remain unvacated and
unstayed for an aggregate of sixty (60) Days. (The terms
"acquiesce" and "acquiescence" as used in this Section 16.01(c)
shall include, but not be limited to, the failure to file a
petition or motion to vacate or discharge any order, judgment or
decree providing for such appointment within the time specified
by law);
(d) with respect to PJP, the occurrence of one or more
Major Unexcused Outages resulting from other than a Force Majeure
Event;
(e) with respect to PJP, PJP shall abandon the
operation of any Facility, which abandonment is not due to PTFI's
Fault or Breach, with the intent that such abandonment be
permanent, it being understood that such intent shall be presumed
upon PJP's failure to resume operation of the abandoned
Facility(ies) within three (3) Days after receipt by PJP of
written notice from PTFI asserting that PJP has abandoned such
Facility; provided, however, that the discontinuation by PJP of
operations at any Facility shall not be considered an abandonment
if PJP is prevented from operating such Facility by reason of the
occurrence and continuance of a Force Majeure Event or a Local
Political Risk Event, and it being further understood that
nothing contained herein is intended to relieve PJP of its
obligations under Section 13.03; and
(f) with respect to PTFI, the occurrence of one or
more of the following and the notice to PJP and PTFI by or on
behalf of the Senior Secured Lenders that such event or
occurrence constitutes an "event of default" under the Financing
Documents:
(i) the occurrence of an Event of Resignation (as
defined in the PTFI Participation Agreement as in
effect on the date of the PJP Credit Agreement) under
Section 9.5 of the PTFI Participation Agreement as in
effect on the date of the PJP Credit Agreement;
(ii) the COW shall for whatever reason be
terminated or cease to be in full force and effect
other than pursuant to a Permitted Contract of Work
Substitution (as defined in the PJP Credit Agreement);
(iii) PTFI shall default in the performance of
any provision of the Chase Credit Agreements (as
defined in the PJP Credit Agreement) as in effect from
time to time (and without giving effect to any waivers
to or amendments of such provision following any such
default) which requires PTFI to maintain a specified
EBITDA Coverage Ratio (as defined in the Chase Credit
Agreement) or any successor provision which is designed
to measure the adequacy of PTFI's earnings or revenues
to debt services (including any debt service coverage
ratio or fixed charges ratio); or if at any time in the
future PTFI is not a party to a Chase Credit Agreement,
PTFI shall fail to comply with the requirements of such
provisions (if any) contained in the most recent Chase
Credit Agreement of which PTFI was a party;
(iv) an event of default with respect to any
Indebtedness (as defined in the PJP Credit Agreement)
of PTFI if the effect of such default shall result,
directly or through action taken by holder(s) or
obligee(s) of Indebtedness of PTFI, in acceleration (x)
of the stated maturity of any Indebtedness of PTFI in
an aggregate amount in excess of $50,000,000 or (ii) of
any Indebtedness outstanding of PTFI under the Chase
Credit Agreements (as defined in the PJP Credit
Agreement);
(v) any representation, warranty or certificate
made or deemed made by PTFI in any Financing Document
or in any certificate, financial statement or other
document furnished by PTFI to any Financing Entity or
any Agent (as defined in the PJP Credit Agreement)
shall prove to have been false or misleading in any
material respect as of the time made or furnished and
the facts or circumstances upon which such breach of
representation or warranty is based if not cured within
30 days could reasonably be expected to have a Material
Adverse Effect (as defined in the PJP Credit
Agreement);
(vi) PTFI shall admit in writing its inability to,
or be generally unable to, pay its debts as such debts
become due;
(vii) PTFI shall (1) apply for or consent to
the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (2) make
a general assignment for the benefit of its creditors,
(3) commence a voluntary case under the Bankruptcy Code
(as defined in the PJP Credit Agreement) (as now or
hereafter in effect) or any other law relating to
bankruptcy, insolvency, reorganization, winding-up or
composition, readjustment or moratorium of debts, (4)
file a petition seeking to take advantage of any law
relating to bankruptcy, insolvency, reorganization,
winding-up, or composition, readjustment or moratorium
of debts, (5) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to any
petition filed against it in an involuntary case under
the Bankruptcy Code of any other law relating to
bankruptcy, insolvency, reorganization, winding-up or
composition, readjustment or moratorium of debts, or
(6) take any corporate action for the purpose of
effecting any of the foregoing;
(viii) a proceeding or case shall be commenced
involving PTFI without the application or consent of
PTFI, seeking (1) its liquidation, reorganization,
dissolution, winding-up, or the composition,
readjustment or moratorium of its debts, (2) the
appointment of a trustee, receiver, custodian,
liquidator or the like of PTFI or of all or any
substantial part of its assets, or (3) similar relief
in respect of PTFI under any law relating to
bankruptcy, insolvency, reorganization, winding-up or
composition, adjustment or moratorium of debts, and
such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any
of the foregoing shall be entered and continue unstayed
and in effect, for a period of 60 or more days (or such
shorter period of time which such Person has pursuant
to such law to cause the dismissal of such proceeding
or case or stay the effectiveness of any such order,
judgment or decree); or an order for relief against
PTFI shall be entered in an involuntary case under the
Bankruptcy Code or any other law relating to
bankruptcy, insolvency, reorganization, winding-up or
composition, readjustment or moratorium of debts;
(ix) PTFI shall default in the performance of its
obligations under any Project Document (as defined in
the PJP Credit Agreement) to which it is a party, which
default could reasonably be expected to have or result
in a Material Adverse Effect;
(x) PTFI shall fail to obtain, renew, maintain or
comply in all material respects with all such Project
Governmental Approvals (as defined in the PJP Credit
Agreement) which shall at the time in question be
necessary (1) for the performance by PTFI of its
respective obligations under any Financing Document to
which it is party or for the performance by PTFI of its
respective material obligations under any Project
Documents to which it is party; or any such Project
Governmental Approval shall be revoked, terminated,
withdrawn, suspended, modified or withheld or shall
cease to be in full force and effect, and such failure
to obtain, renew, maintain or comply or such
revocation, termination or other event shall continue
unremedied for 30 days after receipt by PJP of written
notice from the Facility Agent or any Financing Entity
(through the Facility Agent (as defined in the PJP
Credit Agreement)); or any proceeding shall be
commenced by or before any Governmental Authority for
the purpose of so revoking, terminating, withdrawing,
suspending, modifying or withholding any such Project
Governmental Approval and such proceeding is not
dismissed or otherwise resolved favorably for PTFI
within 90 days;
(xi) any Project Document to which PJP and PTFI
are parties shall cease to be in full force and effect
against both PJP and PTFI, and such circumstance
results in a Material Adverse Effect; or
(xii) any Governmental Authority shall
condemn, seize, nationalize, assume the management of
or appropriate any material portion of the property,
assets or revenues of PTFI (without payment of
compensation adequate to repay all amounts outstanding
under the Financing Documents); or the Ministry of
Mines and Energy of Indonesia (or any successor entity)
or the Government of Indonesia (or any successor
entity, lawful or otherwise) shall have taken any
action (whether or not having the force of law) in
contravention of the COW which materially adversely
affects the ability of PJP or any Project Participant
(as defined in the PJP Credit Agreement) to perform its
obligations under any Major Document (as defined in the
PJP Credit Agreement) to which it is a party.
Section 16.02. [Reserved].Section 16.03. Remedies
on Default, Appointment of Successor Mine Operator. Subject to
Section 16.03(f), (a)upon the occurrence of an Event of Default
hereunder, the nondefaulting party may, at its option, (i)
terminate this Agreement as set forth in Section 16.03(b) or (c),
(ii) exercise any other right or remedy the nondefaulting party
may have hereunder or at law or in equity (subject to the
limitations on liability contained herein), or (iii) do any or
all of the foregoing. None of the remedies set forth herein
shall be exclusive of any of the other remedies, and all of them
shall be deemed cumulative. If, within 180 days of the
occurrence of an Event of Default by PJP pursuant to Section
16.01(d), PTFI fails to initiate action pursuant to this Section
16.03, PTFI shall be deemed to have waived such Event of Default
and any remedy it may otherwise have had pursuant to this Section
16.03. In the event of an Event of Default with respect to PTFI,
PJP, upon giving notice of such Event of Default to PTFI, (x)
shall have the right to suspend its deliveries of Electricity
hereunder, (y) shall not be liable for the payment of any Penalty
that would otherwise arise from suspension of delivery of
Electricity, and (z) shall have the right to terminate this
Agreement upon written notice to PTFI pursuant to subsection (b)
of this Section 16.03. In the event PJP shall terminate this
Agreement pursuant to Section 16.03(a)(i) above, PTFI shall have
the right to reenter the Facilities immediately upon satisfaction
of PTFI's payment obligations set forth in subsection (b) below.
The exercise by PJP of its right to suspend deliveries of
Electricity under this Section 16.03 shall not relieve PTFI of
its obligations hereunder, including the obligation to pay any
amounts payable by PTFI pursuant to Article 7 until such time as
this Agreement is terminated.
(b) Upon the occurrence of an Event of Default by
PTFI, PJP shall have the option, exercisable in its sole
discretion, to terminate this Agreement. Upon such termination,
PTFI shall be deemed to offer to acquire the Shares. If PJP
accepts such offer, PTFI shall immediately (in the case of an
Event of Default under Section 16.01(c)), within one hundred and
eighty (180) Days of such notice (in the case of an Event of
Default under Section 16.01(a) or (b), or within thirty (30) Days
of such notice (in the case of an Event of Default under Section
16.01(f)), (i) purchase, upon ten (10) Days' prior written notice
to PJP, the Shares in accordance with and for the amount set
forth in Article 4 of the Option Agreement and (ii) concurrently
with such purchase, pay, in the case of an Event of Default under
Section 16.01(a), (c) or (f), or assume the obligation to pay, in
the case of all other Events of Default hereunder, in accordance
with the terms of the agreements between PJP and Senior Secured
Lenders, all outstanding principal and all interest and other
amounts payable to Senior Secured Lenders.
(c) Within one hundred eighty (180) Days following an
Event of Default by PJP, PTFI shall have the option, exercisable
in its sole discretion, to terminate the Agreement, provided,
that, concurrently with such termination, PTFI shall (i) after
having so notified PJP in writing of its intent to do so,
purchase from PJP, in which case the Shareholders or PJP, as
applicable, shall sell to PTFI, all of the Shares or all of PJP's
right, title and interest in and to the Property for the amount
specified in Section 2.05 of the Option Agreement and in
accordance with the terms and conditions of the Option Agreement
and (ii) concurrently with such purchase, pay or assume the
obligation to pay, in accordance with the terms of agreements
between PJP and Senior Secured Lenders, all outstanding principal
and all interest and other amounts payable to Senior Secured
Lenders.
(d) If PTFI exercises its option to terminate this
Agreement in accordance with Section 16.03(c) by reason of an
Event of Default by PJP (other than an Event of Default under
Section 16.01(d)), PJP will be obligated to pay liquidated
damages to PTFI in an amount equal to twenty-five percent (25%)
of the Outstanding Investment as of the date of purchase referred
to in Section 16.03(c), which amount may, in the sole discretion
of PTFI, be offset against the purchase price of the Property or
the Shares, as the case may be. PJP and PTFI agree that the
exact amount of actual damages to PTFI would be difficult to
calculate in the event of such Event of Default and that the
liquidated damages provided for in this Section 16.03(d) are
reasonable considering the damage that PTFI would suffer and are
in lieu of any other damage payment.
(e) Upon the occurrence of an Event of Default by
PTFI, PJP shall have the option, exercisable in its sole
discretion, to require PTFI to offer to acquire the Shares. If
PJP accepts such offer, PTFI shall, within thirty (30) Days of
such notice, (i) purchase from PJP, upon ten (10) Days' prior
written notice to PJP, the Shares in accordance with and for the
amount set forth in Article 4 of the Option Agreement and (ii)
concurrently with such purchase, pay, in accordance with the
terms of the agreements between PJP and Senior Secured Lenders,
all outstanding principal and all interest and other amounts
payable to Senior Secured Lenders.
(f) All remedies of the parties set forth in this
Agreement shall be subject to the terms of the Default Remedies
Coordination Agreement.
ARTICLE XVII
REPRESENTATIONS AND WARRANTIES
Section 17.01. Representations and Warranties of PJP.
As of the date hereof, PJP hereby represents and warrants to PTFI
that:
(i) It is a limited liability company duly
organized and validly existing under the laws of
Indonesia;
(ii) It has the corporate power and authority to
execute this Agreement and perform its obligations
hereunder;
(iii) The execution and delivery of this
Agreement by PJP and the performance of its obligations
hereunder have been duly authorized by all necessary
corporate action and will not contravene any existing
law or statute or governmental regulation or decree
binding upon PJP or the Facilities, and will not
contravene or result in a breach of or default under
any indenture, mortgage, deed of trust, loan or credit
agreement, constituent document or other agreement or
instrument to which PJP is a party or by which it or
its property is bound;
(iv) This Agreement constitutes the legal, valid
and binding obligation of PJP, enforceable against it
in accordance with its terms;
(v) There is no claim, action, proceeding or
investigation pending or, to PJP's knowledge,
threatened against PJP before any Governmental
Authority reasonably likely to have a material adverse
effect on the business, operations, financial
condition, results of operations, or assets of PTFI or
PJP; and
(vi) It has obtained and complied with all
Applicable Permits necessary to conduct its business in
accordance with Applicable Laws and for the performance
of its obligations hereunder except to the extent that
the failure to obtain or maintain any such Applicable
Permit does not have a material adverse effect on PJP's
ability to conduct its business or perform its
obligations hereunder.
Section 17.02. Representations and Warranties of PTFI.
As of the date hereof, PTFI hereby represents and warrants to the
PJP that:
(i) It is a limited liability company duly
organized and validly existing under the laws of
Indonesia and the State of Delaware;
(ii) It has the corporate power and authority to
execute and deliver this Agreement and perform its
obligations hereunder;
(iii) The execution and delivery of this
Agreement by PTFI and the performance of its
obligations hereunder have been duly authorized by all
necessary corporate action and will not contravene any
Applicable Law, and will not contravene or result in a
breach of or default under any indenture, mortgage,
deed of trust, loan or credit agreement, corporate
charter or other agreement or instrument to which it is
a party or by which it or its property is bound;
(iv) This Agreement constitutes the legal, valid
and binding obligation of PTFI, enforceable against it
in accordance with its terms;
(v) There is no claim, action, proceeding or
investigation pending or, to PTFI's knowledge,
threatened against PTFI before any Governmental
Authority which is reasonably likely to have a material
adverse effect on the business, operations, financial
condition, results of operations, or assets of PTFI or
PJP; and
(vi) It has obtained and complied with all
Applicable Permits necessary to conduct its business in
accordance with Applicable Laws and for the performance
of its obligations hereunder except to the extent that
the failure to obtain or maintain any such Applicable
Permit does not have a material adverse effect on
PTFI's ability to conduct its business or perform its
obligations hereunder.
ARTICLE XVIII
INDEMNIFICATION/LIMITATION OF LIABILITY
Section 18.01. Indemnification by PTFI. Without
increasing or expanding the indemnity provided in Section 11.02,
PTFI shall defend, hold harmless, and indemnify each PJP
Indemnitee from and against all damages, liabilities, losses,
expenses including reasonable attorneys' fees and disbursements
(except that PTFI shall only bear the cost of representation by
one firm of attorneys in each jurisdiction as is appropriate) and
costs of investigation, costs, disputes, suits, claims, demands
or penalties of any kind or nature imposed upon or claimed
against any PJP Indemnitee by any third party (other than any
other PJP Indemnitee) caused by or on account of, or arising from
(i) the operation or use of PTFI's Plant or PTFI's Site; (ii) the
exercise by PTFI of any of its rights pursuant to the last
sentence of Section 3.02 or 3.06, or pursuant to Sections 5.01,
5.03, 14.01, 14.02, 14.03 or 14.04; or (iii) the performance by
PTFI of, or its unexcused failure to perform, its obligations
hereunder or under the Restated Services Agreement, except to the
extent resulting from the Fault of any of the PJP Indemnitees or
Fault or Breach of PJP. This Section shall be subject to the
terms of the waiver of subrogation provisions contained in
Sections 10.03 and 11.04. To the extent it does not invalidate
any required insurance coverage, PTFI's liability hereunder shall
be reduced to the extent PJP receives any insurance proceeds or
realizes any tax savings with respect to the indemnification
claim sought hereunder.
Section 18.02. Indemnification by PJP. Without
increasing or expanding the indemnity provided in Section 11.01,
PJP shall defend, hold harmless and indemnify each PTFI
Indemnitee from and against all damages, liabilities, losses,
expenses, including reasonable attorneys' fees and disbursements
(except that PJP shall only bear the cost of representation by
one firm of attorneys in each jurisdiction as is appropriate) and
costs of investigation, costs, disputes, suits, claims, demands
or penalties of any kind or nature imposed upon or claimed
against any such PTFI Indemnitee by any third party (other than
any other PTFI Indemnitee) caused by or on account of, or arising
from, (i) the use or operation of the Facilities (including any
sale of electric capacity and Electricity to parties other than
PTFI or any PTFI Related Entity), or (ii) the use by PJP, its
agents, subcontractors or invitees of PJPP's Site or any portion
of PTFI's Site or (iii) the performance by PJP of, or its
unexcused failure to perform, its obligations hereunder, except
to the extent resulting from the Fault of any of the PTFI
Indemnitees or the Fault or Breach of PTFI or, until five (5)
years from the date of transfer of any Existing Asset, from any
condition affecting any such Existing Asset which was in
existence on the date such asset was transferred to PJP pursuant
to the Original Asset Sale Agreement. This Section shall be
subject to the terms of the waiver of subrogation provisions
contained in Sections 10.03 and 11.04. To the extent it does not
invalidate any insurance coverage required hereunder, PJP's
liability hereunder shall be reduced to the extent PTFI receives
any insurance proceeds or realizes any tax savings with respect
to the indemnification claim sought hereunder. Payments to be
made by PJP under this Section 18.02 shall be subordinated to
payments to Senior Secured Lenders and shall be payable only from
and to the extent of amounts otherwise available to PJP pursuant
to the terms of the Financing Documents for the payment of
dividends, and shall not be credited toward amounts owing from
PTFI. Interest shall accrue at the Default Interest Rate on any
such payments which PJP has failed to make when due.
Section 18.03. Limitation of Liability.
Notwithstanding any other provision hereof (except as expressly
provided in the case of Penalties and the payment of interest on
certain amounts owed), or the failure of essential purposes of
any remedies set forth herein, each party shall only be liable
for direct damages resulting from or in connection with a breach,
misrepresentation or default by such party hereunder. In no
event shall either party (or their officers, shareholders,
directors, commissioners, employees or agents) be liable, whether
under contract, tort (including negligence), strict liability or
any other cause of or form of action whatsoever, for claims of
customers, cost of money, lost profits, loss of use of capital or
revenue, or any other incidental, special or consequential loss
or damage of any nature arising at any time or from any cause
whatsoever or for punitive or exemplary damages other than those
imposed for gross negligence or willful misconduct (collectively,
"Consequential Damages"); provided, however, that third-party
claims and associated recoveries (solely to the extent covered by
insurance of a party hereto) in connection with damages
proximately resulting from an act or omission of such party shall
not be deemed to be Consequential Damages. This Section shall
not be construed as providing any basis for liability of either
party.
Section 18.04. Notice and Cooperation.
(a) Each party shall promptly notify the other party
(but in no event later than ten (10) Business Days prior to the
time any response is required by law) after such party becomes
aware of any event or circumstance which might give rise to
indemnification under this Article; provided, however, the
failure of such party to give such notice shall not result in the
waiver of any of such party's rights under this Article, except
to the extent the rights of the other party are actually
prejudiced by such failure to give notice as required by this
Section 18.04(a).
(b) The indemnified party may, at its own expense,
retain separate counsel and participate in the defense of any
such suit or action. The indemnified party shall not compromise
or settle a claim hereunder without the prior written consent of
the indemnifying party.
Section 18.05. Dispute of Obligation. To the extent a
party disputes in good faith its obligation to indemnify the
other party pursuant to this Agreement, it shall not be
considered a breach of this Agreement for such party to fail to
perform under this Article until such time as such party is
determined to have the obligation to indemnify under this Article
pursuant to (i) an agreement reached by the parties or (ii) an
arbitration determination in accordance with the terms of Article
19.
Section 18.06. Survival. The provisions of this
Article 18 shall survive the expiration or earlier termination of
this Agreement with respect to events occurring before the
expiration or termination hereof.
ARTICLE XIX
DISPUTE RESOLUTION
Section 19.01. Negotiated Resolution. The parties
shall attempt in good faith to resolve all disputes arising
hereunder by mutual agreement in accordance with this Article.
If during the Term a dispute between PTFI and PJP arises, either
party wishing to resolve such dispute may give notice thereof to
the other party. Within five (5) Days after delivery of such
notice, each party's designated representative shall meet to
discuss and to attempt to resolve such dispute. If they are
unable to do so within fifteen (15) Days after delivery of such
notice, the dispute shall be referred to a Senior Officer of PJP
and a Senior Officer of PTFI for resolution or cure. Such Senior
Officers shall meet within five (5) Days of the expiration of
such 5-Day period to discuss and attempt to resolve such dispute.
If such Senior Officers are unable to agree on an appropriate
resolution within fifteen (15) Days after the dispute is
submitted to them, the dispute shall be resolved by binding
arbitration as hereinafter set forth. The failure or refusal of
either party to meet and discuss any dispute as provided in this
Section 19.01 shall entitle the other party to submit such
dispute immediately to arbitration pursuant to this Article 19.
Section 19.02. Procedure for Initiating Arbitration. A
party desiring to submit a dispute to arbitration pursuant to
this Article 19 shall serve notice to the other party (the
"Arbitration Notice"), stating that such party desires
arbitration of such dispute, setting forth a detailed description
of the nature and subject matter of the dispute, and a statement
of the amount involved, if the dispute involves sums of money,
the position on such issues of the party requesting arbitration
and the remedy sought by it, and the name of one independent
arbitrator recommended by the International Chamber of Commerce
("ICC"). Within twenty (20) Days after receipt of the
Arbitration Notice, the party receiving the same shall send a
notice to the notifying party containing (i) a response to the
claim, setting forth the responding party's position on the
matter and the remedy sought by it, if any, and (ii) an
acceptance of the arbitrator designated in the Arbitration Notice
or the designation of a second arbitrator recommended by the ICC.
If the parties designate separate arbitrators, the two
arbitrators shall designate a third independent arbitrator
recommended by the ICC, within ten (10) Days after the date of
the notice in response to the Arbitration Notice. If the two
arbitrators selected by the parties cannot or do not select a
third independent arbitrator within ten (10) Days of such second
notice, either party may apply to the ICC for the purpose of
appointing any person listed as an arbitrator with the ICC as the
third independent arbitrator. Each arbitrator appointed
hereunder shall be qualified by education or experience to decide
the particular matter submitted to arbitration, and shall not be
an employee or agent of either PJP or PTFI or any of their
Affiliates.
Section 19.03. General Arbitration Rules. A hearing
shall be held by the arbitrators (or arbitrator) promptly after
the selection thereof pursuant to Section 19.02, and a decision
of the matter submitted shall be rendered within thirty (30) Days
after the hearing. If the matter is heard by three arbitrators,
they shall act by the vote of a majority. The arbitration shall
be conducted pursuant to the commercial arbitration rules of the
ICC in effect on the date hereof, except to the extent such rules
conflict with the provisions hereof, in which case the provisions
hereof shall control. The parties specifically agree that, upon
application by each party, the arbitrators (or arbitrator) shall
set a reasonable limitation on the period for discovery related
to the arbitration. No party may present a position or make any
argument at the hearing that is not provided to the other party
in writing before the hearing, unless the arbitrators (or
arbitrator) determine that such position or argument could not
reasonably have been prepared in advance of such hearing. The
parties shall use all reasonable efforts, and shall instruct the
arbitrator or arbitrators to use all reasonable efforts, to
complete the arbitration and render a decision within sixty (60)
Days after appointment of the arbitrator or arbitrators pursuant
to Section 19.02. The parties specifically agree that all
arbitration proceedings brought under this Article 19 shall be
conducted in the English language.
Section 19.04. Necessary Parties. Any arbitration may
include any other person substantially involved in a common
question of fact or law whose presence is required if complete
relief is to be accorded in arbitration, provided that such other
person has agreed to be bound by such arbitration.
Section 19.05. Finality. The decision of an arbitrator
or arbitrators (including a decision pursuant to Section 19.07)
pursuant to this Article 19 shall be in writing (setting forth
the basis for the decision), final, binding, and conclusive upon
the parties and may be confirmed or embodied in any order or
judgment of any court having jurisdiction. The foregoing
agreement to arbitrate shall be specifically enforceable and the
award rendered by the arbitrators shall be final and judgment may
be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
Section 19.06. Venue. The venue of any arbitration
pursuant to this Article 19 shall be in Singapore or such other
place as is mutually agreed upon by the parties.
Section 19.07. Technical Dispute Resolutions. Any
dispute between PTFI and PJP over the determination of any
adjustment to the Target Capacity Level of any Facility pursuant
to Section 3.05 or in any amendment contemplated in Section 9.01;
any change in Reliability pursuant to Section 3.06; the matters
described in Section 9.01 as being subject to technical dispute
resolution; the appropriateness and magnitude of any adjustment
proposed pursuant to Section 7.03; the necessity of PTFI's entry
onto PJP's Site or the Facilities (as the case may be) in
connection with an Adverse Condition and the amount of costs
incurred by PTFI in respect of such entry; and other disputes
mutually agreed by the parties shall, instead of being submitted
to arbitration in accordance with Sections 19.01 through 19.06,
be submitted to an engineering firm unaffiliated with PTFI or PJP
which shall be selected by PTFI and PJP from the list attached
hereto as Appendix H or, if PTFI and PJP are unable to agree on
such selection, chosen by lot from such list. PTFI and PJP shall
submit all data, documents and other information supporting their
respective positions to the independent engineering firm within
30 Days of its selection. The independent engineering firm shall
render its determination within 30 Days following the submission
of such information.
Section 19.08. Costs of Arbitration. Each party shall
bear its respective costs incurred in connection with any
arbitration conducted pursuant to this Article 19 and fifty
percent (50%) of the fees and expenses of the arbitrators and the
other expenses of the arbitration; provided, however, that in the
event the arbitrator, or engineering firm, as the case may be,
determines that the non-prevailing claims or defenses were
substantially lacking in merit, the party who made such claims or
asserted such defenses shall pay all reasonable costs incurred by
the other party and all fees and expenses of the arbitrators and
the other expenses in connection with such arbitration.
Section 19.09. Performance Obligations. The pendency
of these dispute resolution procedures shall not in and of
themselves relieve either party of the duty to perform, or serve
to delay or suspend the performance of, its obligations
hereunder.
ARTICLE XX
MISCELLANEOUS
Section 20.01. Appendices and Schedules. All
appendices and schedules hereto shall be considered part hereof
as if fully set forth herein. In the event of a conflict between
the appendices and schedules to this Agreement and this Agreement
(exclusive of such appendices and schedules), this Agreement
(exclusive of such appendices and schedules) shall prevail. In
the event of a conflict among the appendices or schedules hereto,
the appendix or schedule which is of the latest date shall
prevail.
Section 20.02. Intention of the Parties. PJP and PTFI
intend and agree that PJP shall be treated as the owner of the
Facilities for all purposes and that PTFI shall not take any
position inconsistent with PJP's ownership of the Facilities.
Nothing in this Agreement or any other Transaction Document or
Financing Document is intended to convey ownership to, or vest
ownership in, any Person other than PJP. This Agreement is
intended to constitute a "service agreement", as that term is
defined in section 7701(e) of the Code (with PJP serving as the
"service provider" and PTFI serving as the "service recipient"),
and not a lease; the relationship which PJP and PTFI intend to
create hereunder is that of principal and independent contractor
and nothing contained herein nor the acts of the parties hereto
shall be construed to create the relationship of partners, or co-
venturers, or of lessee and lessor. PTFI shall not have the
right to direct or control the activities or practices of PJP.
Section 20.03. Confidentiality.
Each of PJP and PTFI and each of their respective Affiliates
will hold, and will use their reasonable efforts to cause their
respective officers, directors, employees, accountants, counsel,
consultants, advisers and agents to hold, in confidence for a
period of five (5) years commencing with the date of receipt
thereof, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all
documents and information furnished to PJP or PTFI, as
applicable, or any of its respective Affiliates in connection
with the transactions contemplated by this Agreement to the
extent that the documents or the context of their disclosure
indicate that they are intended to be confidential, except to the
extent that such information can be shown to have been (i)
previously known on a nonconfidential basis by it, (ii) in the
public domain through no fault of it, or (iii) later lawfully
acquired by it from sources other than PJP or PTFI, as
applicable; provided, that PJP may disclose such information to
its officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the
transactions contemplated by this Agreement and to prospective
lenders or purchasers of PJP debt instruments in connection with
obtaining the financing for the transactions contemplated by the
New Asset Sale Agreement and the refinancing of the Existing
Assets, so long as such Persons are informed by PJP of the
confidential nature of such information and are directed by PJP
to treat such information confidentially and, in the case of
prospective lenders or purchasers of PJP debt instruments, agree
in writing to be bound by the terms of this confidentiality
provision or other confidentiality provisions acceptable to PJP.
The obligation of PJP and its respective Affiliates to hold any
such information in confidence shall be satisfied if they
exercise the same care with respect to such information as they
would take to preserve the confidentiality of their own similar
information. If this Agreement is terminated, PJP and PTFI and
their respective Affiliates will, and will use their reasonable
efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to destroy
or deliver to PJP or PTFI, as applicable, upon request, all
documents and other materials, and all copies thereof, obtained
by either PJP or PTFI or its respective Affiliates or on their
behalf from PTFI or PJP, as applicable, in connection with this
Agreement that are subject to such confidence.
Section 20.04. Governing Law. This Agreement shall be
governed by and interpreted in accordance with the internal,
substantive laws of the State of New York without regard to its
conflict of laws provisions.
Section 20.05. Notices. All notices, consents,
directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be
given to any Person shall be in writing and shall be delivered by
hand or by an internationally recognized air courier service, or
by facsimile or telegram, directed to the address or facsimile
number of such Person as set forth on the signature page hereof
or, in the case of any notice or other communication to any
Person participating in COW Operations, to the address and
facsimile number of that Person as notified from time to time by
that Person to the parties. For the purposes of this Section
20.05, all notices or other communications to PT RTZ shall be
addressed to:
P.T. RTZ-CRA Indonesia
14th Floor, World Trade Centre
Xxxxx Xxxx Xxxxxxxx Xxx. 00-00
Xxxxxxx 00000
Xxxxxxxxx
Attention: President Director
Telecopy: 62-21-521-1760 or 00-00-000-0000
with a copy to:
Rio Tinto plc
0 Xx. Xxxxx' Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attention: Secretary
Telecopy: 00-000-000-0000
Any such notice shall be deemed effective when received, as
confirmed by receipt or other confirmation signed by the
receiving party or by printed confirmation of transmission if by
facsimile transmission. From time to time, any party hereto or
any Person identified to PJP by PTFI as a Person participating in
COW Operations may designate a new address or facsimile number
for purposes of notice hereunder by notice to each of the parties
or other parties hereto.
Section 20.06. Severability. Any provision hereof that
shall be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
To the extent permitted by Applicable Law, the parties hereto
hereby waive enforcement of any provision of law that renders any
provision hereof prohibited or unenforceable in any respect.
Section 20.07. Entire Agreement. This Agreement
(including all appendices and schedules hereto), constitutes the
entire agreement and understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
written and oral agreements and understandings with respect to
such subject matter, including without limitation, the Original
Power SSalleess Agreement.
Secction 20.08. Amendmment. Neither this Agreement nor
any of the terms hereof may be terminated, amended, supplemented,
waived or modified, except by a document in writing signed by the
party against which the enforcement of such termination,
amendment, supplement, waiver or modification is sought.
Section 20.09. Waiver. Except as expressly provided in
Section 16.03(a), no failure or delay of any party hereto to
exercise any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to
enforce such right or power, preclude any other or further
exercise thereof or the exercise of any other right or power.
Section 20.10. Table of Contents; Headings. The table
of contents, if any, and headings, if any, of the various
articles, sections and other subdivisions hereof are for
convenience of reference only and shall not modify, define or
limit any of the terms or provisions hereof.
Section 20.11. Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but
all such counterparts shall together constitute but one and the
same document. All signatures need not be on the same
counterpart.
Section 20.12. Method of Payment. All amounts required
to be paid by any party hereunder to any other party hereunder
shall be paid in such freely transferable coin or currency of the
United States of America or of the Republic of Indonesia,
respectively, as may be called for in Schedule I hereto, and as
at the time of payment shall be legal tender for the payment of
public and private debts, and shall be paid by wire transfer to
an account as such party may specify by notice to the other
parties, or by other acceptable method of payment of immediately
available funds. No amount paid by a Designated PTFI-Related
Entity or any third party as contemplated hereby shall be deemed
to be received by PJP for the purposes hereof until such amount
is deposited, in Dollars or Rupiah, respectively, as called for
in Schedule I hereto, in immediately available funds, in the
account of PJP referred to in the preceding sentence.
Section 20.13. Date of Payment. If any payment
hereunder is required to be made on a Day other than a Business
Day, the date of payment shall be extended to the next Business
Day.
Section 20.14. Default Interest. Except as expressly
provided herein, all payments due hereunder shall accrue interest
at the Default Interest Rate (or the maximum interest rate
permitted by law, if lower) commencing three (3) Days from and
after the date such payment was first due.
Section 20.15. Attorneys' Fees. If either party hereto
brings any proceeding for the judicial interpretation,
enforcement, termination, cancellation or rescission hereof, or
for damages for the breach thereof, the prevailing party in any
such proceeding or appeal thereon shall be entitled to its
reasonable attorneys' fees and court and other reasonable costs
incurred, to be paid by the losing party as fixed by the court in
the same or a separate proceeding, and whether or not such
proceeding is pursued to decision or judgment.
Section 20.16. Third-Party Beneficiaries. Except as
otherwise expressly stated herein, this Agreement is intended to
be solely for the benefit of the parties hereto and their
permitted assignees and is not intended to and shall not confer
any rights or benefits on any other third party not a signatory
hereto other than Persons expressly benefited by the
indemnification provisions hereof.
Section 20.17. Further Documents. The parties hereto
shall execute and deliver all further documents and perform all
further acts that may be reasonably necessary to consummate the
transactions contemplated hereby.
Section 20.18. Performance of Obligations. A party
shall be deemed to have satisfied an obligation of such party
hereunder if the obligated party performs such obligation or
causes such obligation to be performed; provided, however, this
provision shall not be deemed to permit an assignment of such
obligation not otherwise permitted hereunder, nor to relieve the
obligated party from liability arising from the performance of
such obligation.
Section 20.19. Tax Cooperation. PTFI and PJP agree to
furnish or cause to be furnished to each other, upon request, as
promptly as practicable, such information and assistance relating
to the transactions contemplated hereby as is reasonably
necessary for the filing of all Tax returns, the making of any
election related to Taxes, the preparation for any audit by any
taxing authority, and the prosecution or defense of any claim,
suit or proceeding relating to any Tax return. PTFI and PJP
shall cooperate with each other in the conduct of any audit or
other proceeding related to Taxes and each shall execute and
deliver such documents as are necessary to carry out the intent
of Section 20.02 and this Section 20.19.
Section 20.20. Survival of Payment Obligations. The
obligation of the parties hereto to make payments hereunder shall
survive the expiration or earlier termination of this Agreement
without limitation.
IN WITNESS WHEREOF, PJP and PTFI have caused this
Agreement to be executed as of the date first above written.
P.T. PUNCAKJAYA POWER,
an Indonesian limited liability
company
By: Signed
Name:
Title:
Address for Notice: P.T. Puncakjaya Power
Plaza 89, 6th Floor
Xx. X.X. Xxxxxx Xxxx Xxx. X-0 Xx. 0
Xxxxxxx 00000
XXXXXXXXX
Attention: President Director
Telecopy: 011-62-21-850-8178
and
P.T. Puncakjaya Power
c/o Duke Energy International LLC
Suite 1800
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Puncakjaya Power Project
Administrator
Telecopy: 000-000-0000
P.T. FREEPORT INDONESIA COMPANY,
an Indonesian limited liability
company
By: Signed
Name:
Title:
Address for Notice: P.T. Freeport Indonesia Company
Plaza 89, 5th Floor
Xx. X.X. Xxxxxx Xxxx, Xxx. X-0, Xx. 0
Xxxxxxx 00000
XXXXXXXXX
Attention: President Director
Telecopy: 011-62-21-850-4535
and
P.T. Freeport Indonesia Company
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Telecopy: 000-000-0000
APPENDIX A
DEFINITIONS
The terms defined below shall have the meanings set forth below
for all purposes, and such meanings are applicable equally to the
singular, plural and other conjugated forms of the terms defined.
"Acceptance Date" means, with respect to each item of
the New Facility, the date of Completion of such item.
"Acquired Shareholder" shall mean a Shareholder with
respect to whom a Change in Control has occurred.
"Actual Coal Price" has the meaning set forth in
Section 1.9 of Schedule I to the Restated Power Sales Agreement.
"Actual Generation from Coal" means, with respect to
any Coal Unit, for any period the amount of Electricity generated
by such Coal Unit during such period, as measured at the output
side of the main transformer of such Coal Unit.
"Actual Generation from Diesel Fuel" means for any
period the amount of Electricity generated at the Facilities
other than the Coal Facility during such period, as measured at
the relevant Interconnection Points.
"Actual Heat Rate" has the meaning set forth in Section
1.9 of Schedule I to the Restated Power Sales Agreement.
"Additional Output" means Electricity, measured in KWH,
generated in excess of the Nominal Capacity Level over the period
in question in effect at such time in response to a request by
PTFI or a PTFI-Related Entity for such additional Electricity
pursuant to Section 3.01 of the Restated Power Sales Agreement.
"Additional Output Bonus" means for any year, the
lesser of (i) the product of a) $0.02 and b) Additional Output
during such year, and (ii) $2,000,000.
"Administrative Services Agreement" means the Amended
and Restated Project Administrative Services Agreement dated as
of December 19, 1997 between PJP and DEII.
"Adverse Condition" means any condition arising on
PJP's Site or any of the Facilities which would, if not remedied,
be reasonably likely to have a material adverse effect on PTFI's
operations or the operations of a Designated PTFI-Related Entity
at PTFI's Site.
"Affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or
under common control with such Person; provided, that for
purposes of the Restated Power Sales Agreement, PJP shall not be
deemed an Affiliate of any Shareholder. For purposes of this
definition, "control", with respect to any Person, means the
power (a) to direct or cause the direction of the management of
such person, directly or indirectly, whether by contract or
otherwise, or (b) to vote more than 50% of the securities or
beneficial ownership interests (in each case, on a fully diluted
basis) having ordinary voting power for the election of directors
or managing general partners.
"Allocation Percentage" means with respect to any
portion of the Facilities, the aggregate historical cost (without
taking account of any depreciation) of such portion of the
Facilities to the aggregate historical cost (excluding
depreciation) of all of the Facilities. For purposes of
determining the Allocation Percentage, such historical costs
shall be those reflected in PJP's most recent quarterly balance
sheet which, if not audited, shall be audited if so requested by
PJP or PTFI.
"Alteration" means any addition to, or any retirement,
modification, replacement or alteration of, the Facilities or any
portion thereof, other than (x) retirements, modifications,
replacements or alterations in the ordinary course of operation
and maintenance of the Facilities and (y) repairs required to be
made as a result of any Casualty.
"Alteration Costs" means, with respect to any
Alteration, the costs of acquisition, design, development,
construction or retirement incurred in connection with such
Alteration, including the financing of the construction or
acquisition thereof.
"Applicable Law" means, with respect to any Person, any
law, ordinance, judgment, decree, injunction, writ, order, rule,
regulation, determination, license and permit (including
Applicable Permits) of any Governmental Authority applicable to
or binding upon such Person or any of its property.
"Applicable Meter Precision" means, with respect to PML
meters, 0.4%, and, with respect to all other meters, 2.0%.
"Applicable Permit" means any permit, consent,
authorization, license, franchise, variance, waiver or exemption
from any Governmental Authority having jurisdiction over the
matter in question which is required for the development,
operation, management, maintenance, repair or any Alteration of
any Facility or operation of PTFI's Plant, as applicable in
accordance with the terms of the Restated Power Sale Agreement.
"Arbitration Notice" has the meaning set forth in
Section 19.02 of the Restated Power Sales Agreement.
"Articles" means the Articles of Association of the
Company in the form approved by the Minister of Justice of the
Republic of Indonesia and in effect on the date of the Restated
Power Sales Agreement, as amended from time to time.
"Ash Disposal Facility" means a permanent, fully
permitted, operational ash disposal facility, located on PJP's
Site, which is capable of disposing of ash at the Coal Facility
for at least one year.
"Assumed Liabilities" has the meaning set forth in
Section 2.03 of the New Asset Sale Agreement.
"Attachments" means PTFI's cable television facilities,
telephone and other communications lines.
"Available PJP Shares " means the Shares proposed to
be the subject of a PJP Share Issuance.
"Available Property Interest" means the Property
proposed to be the subject of a Property Transfer.
"Available Shareholder Shares" means the Shares and
Subordinated Loans proposed to be the subject of a Shareholder
Share Transfer.
"Availability" means the availability of a Coal Unit as
calculated in accordance with Section 1.10 of Schedule I to the
Restated Power Sales Agreement.
"Availability Bonus" is described in Section 1.10 of
Schedule I to the Restated Power Sales Agreement.
"Availability Penalty" is described in Section 1.10 of
Schedule I to the Restated Power Sales Agreement.
"Base Unit Heat Rate" has the meaning set forth in
Section 1.9 of Schedule I to the Restated Power Sales Agreement.
"BKPM" means Badan Koordinasi Penanaman Modal (the
Foreign Investment Coordinating Board of the Indonesian
Government).
"Block" means, on any date, the number of Shares that
is equal to 12% of the total number of Shares on such date.
"Bonus" means an Additional Output Bonus, Availability
Bonus or Heat Rate Bonus.
"BPN" means Badan Pertanahan National (the Ministry of
Agrarian Affairs of the Indonesian Government).
"Breach", with respect to a party to any Transaction
Document, means the breach, after giving effect to any cure
period provided in this Agreement, by such party of its
obligations under such Transaction Document.
"Business Day" means any Day other than a Saturday,
Sunday, or other day on which banks are authorized to be closed
in Jakarta, Indonesia or New York, New York, as applicable.
"Capacity Charge" for any Quarter, means the amount
calculated in accordance with Section 1.2 of Schedule I to the
Restated Power Sales Agreement for such Quarter.
"Casualty" means any damage to or destruction of any
Power Asset or any other event giving rise to any claim under any
insurance policy covering any Power Asset.
"Change in Law" means (i) the enactment, adoption or
promulgation by any Indonesian Governmental Authority of any
Applicable Law of Indonesia after the date of the Restated Power
Sales Agreement; (ii) the amendment, modification, supplement or
repeal by any Indonesian Governmental Authority of any Applicable
Law of Indonesia in effect on the date of the Restated Power
Sales Agreement or (iii) any adoption, modification or repeal of
any written interpretation of any Applicable Law of Indonesia by
any Indonesian Governmental Authority, in each case not
attributable to the Fault of PJP.
"Change of Control" means:
(i) with respect to DIJ or any transferee of
all the shares of voting stock of DIJ, the transfer of
direct beneficial ownership of more than 50% of the
outstanding shares of voting stock of DIJ or such
transferee, or any Special Purpose Parent of DIJ (other
than to an Affiliate of DIJ or such transferee), other
than any such transfer resulting from any order or
request or other action of any utility regulatory
authority having jurisdiction over DEII (whether or not
having the force of law); and
(ii) with respect to WPI or any transferee of
all the shares of voting stock of WPI, the transfer of
direct beneficial ownership of more than 50% of the
outstanding shares of voting stock of WPI or any such
transferee, or any Special Purpose Parent of WPI (other
than to an Affiliate of WPI or such transferee), other
than any such transfer resulting from any order or
request or other action of any utility or regulatory
authority having jurisdiction over Westcoast (whether
or not having the force of law).
"CIL Adjustment" has the meaning set forth in Section
7.03 of the Restated Power Sales Agreement.
"Closing" means the consummation of the transactions
contemplated by the New Asset Sale Agreement.
"Closing Costs" means all transfer and other taxes, all
notarial and filing costs and fees, and all similar third party
costs which are incurred as a result of any Transaction.
"Closing Date" means the date on which the Closing
occurs.
"Closing Model" means the closing model attached as
Exhibit A to Schedule III to the Restated Power Sales Agreement.
"Coal" has the meaning set forth in the Coal Supply
Agreement.
"Coal Dock" means the coal unloading dock constructed
by PTFI, as more specifically described in the New Asset Sale
Agreement.
"Coal Facility" means the 3 x 65 MW coal-fired
electrical generation assets described as such on Appendix J to
the Restated Power Sales Agreement, and all additions to, and
modifications, replacements and alterations of, the foregoing or
any portion thereof.
"Coal Facility Interconnection Point" means the point
at which the equipment owned by PJP and used to transmit
electricity from the Coal Facility to PTFI's Plant meets the
other equipment owned by PTFI and used for such purposes, as more
fully described in Appendix B to the Restated Power Sales
Agreement.
"Coal Fuel Charge" is the category of payment described
in Section 1.5 of Schedule I to the Restated Power Sales
Agreement.
"Coal Supply Agreement" means the Coal Supply/Purchase
Agreement dated as of July 1, 1996 by and between PTFI and PT
Kaltim Prima, and any additional, successor or replacement
contract for Coal supply for the Coal Facility entered into by
PJP with the consent of PTFI.
"Coal Unit" means any one of the electrical generating
units of the Coal Facility consisting of a discrete boiler,
turbine and generator train.
"Code" means the United States Internal Revenue Code of
1986, as amended.
"Company" means PJP.
"Completed" means with respect to any component of the
New Facilities, the attainment of the Completion Criteria
therefor, as described in Schedule 2.01 of the New Asset Sale
Agreement, and "Completion" shall have its correlative meaning.
"Completion Criteria" has the meaning set forth in
Schedule 2.01 of the New Asset Sale Agreement.
"Completion Date" means, with respect to any of the New
Facilities, the date on which such New Facilities are Completed.
"Commissioner Nominee" has the meaning set forth in
Section 4.1(a) of the Restated Shareholders Agreement.
"Consequential Damages" has the meaning set forth in
Section 18.03 of the Restated Power Sales Agreement.
"Contract Year" means, (i) with respect to the first
Contract Year, the period from the commencement of the Term until
December 31 of that year, (ii) with respect to succeeding
Contract Years, the calendar year; provided, however, that, in
the event this Agreement terminates or the Term expires on a Day
other than December 31, the final Contract Year shall be the
period from the January 1 immediately preceding such termination
until such termination date.
"Contracts" means those contracts, agreements, leases,
licenses, commitments, sales and purchase orders and other
instruments included in the New Facilities.
"Copper Deflator" means, for any given year, the
quotient obtained by dividing (x) the average London Metals
Exchange price for Grade "A" copper (as published by the London
Metals Exchange) for the previous calendar year by (y) the
average London Metals Exchange price for Grade "A" copper for the
year 1998.
"Counted Curtailment Hour" shall mean, with respect to
any Quarter, each Curtailment Hour occurring after the number of
Curtailment hours having already occurred during such year shall
have exceeded the Curtailment Hour Allowance for such year.
"COW" means the Contract of Work entered into between
PTFI and the Indonesian Ministry of Mines and Energy acting for
and on behalf of the Government of the Republic of Indonesia,
dated December 30, 1991, pursuant to which PTFI has been granted,
inter alia, the right to enter, occupy, use and construct certain
facilities on and covered by such Contract of Work.
"COW Area" means the area of PTFI's mining and milling
operations in Irian Jaya, Indonesia.
"COW Operations" means all operations within the COW
Area.
"Curtailment Hour" has the meaning set forth in Section
1.11 of Schedule I to the Restated Power Sales Agreement.
"Curtailment Hour Allowance" has the meaning set forth
in Section 1.11 of Schedule I to the Restated Power Sales
Agreement.
"Curtailment Penalty" has the meaning set forth in
Section 1.11 of Schedule I to the Restated Power Sales Agreement.
"Day" means a calendar day, including Saturdays,
Sundays and holidays.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments and (iii) all Debt
of others guaranteed by such Person.
"Debt Component" has the meaning set forth in Section
1.2.1 of Schedule I to the Restated Power Sales Agreement.
"Default Interest Rate" means on any date the 3-month
LIBOR plus two percent (2%).
"Default Remedies Co-ordination Agreement" means that
certain Default Remedies Co-ordination Agreement dated as of
December 19, 1997 among PJP, PTFI, PT RTZ and Citicorp
International Limited, in its capacity as collateral agent for
the Secured Parties (as such term is defined in the PJP Credit
Agreement), as in effect on the date hereof.
"Default Notice" means the notice which shall be
provided by a party in default under the Administrative Services
Agreement to the non-defaulting party pursuant to Section 9.3
thereof.
"Definitive Documents" means the definitive documents
to be executed by the parties in connection with the Closing.
"DEII" means Duke Energy International, Inc., a North
Carolina corporation, and any successor corporation thereto.
"Designated PTFI-Related Entity" means a PTFI Related
Entity identified by PTFI in a written notice to PJP delivered
forty-five (45) Days prior to the proposed commencement of
deliveries of electric capacity and Electricity to such PTFI-
Related Entity, such notice to specify the amount of electric
capacity and Electricity to be made available to such PTFI-
Related Entity.
"Diesel Fuel" means diesel oil meeting the
specifications set forth in the Restated Services Agreement.
"Diesel Fuel Charge" is the category of payment
described in Section 1.5 of Schedule I to the Restated Power
Sales Agreement.
"Diesel Fuel Interconnection Points" means the points
shown on Appendix B to the Restated Power Sales Agreement at
which Diesel Fuel is delivered to PJP.
"DIJ" means Duke Irian Jaya, Inc., a Delaware
corporation.
"Director Nominee" has the meaning set forth in Section
4.1(a) of the Restated Shareholders Agreement.
"Dollars" or "$" means the lawful currency of the
United States of America.
"Electricity" means the electrical energy as measured
in kilowatt hours supplied to the Interconnection Point for each
Facility.
"Energy Price of Coal" has the meaning set forth in
Section 1.10 of Schedule I to the Restated Power Sales Agreement.
"Energy Price of Diesel Fuel" has the meaning set forth
in Section 1.10 of Schedule I to the Restated Power Sales
Agreement.
"Energy Price Delta" has the meaning set forth in
Section 1.10 of Schedule I to the Restated Power Sales Agreement.
"Equipment" means all equipment, materials, office
furnishings and equipment, apparatus, tools, instruments,
vehicles, software, structures, and other goods incorporated
into, or used for, or in connection with, the operation of the
Facilities or PTFI's Plant, as applicable, including spare parts
when incorporated into the Facilities or PTFI's Plant, as
applicable.
"Equity Component" has the meaning set forth in Section
1.2.2 of Schedule I to the Restated Power Sales Agreement.
"Evaluation Period" means the period beginning on the
Closing Date and ending on December 31, 1999.
"Event of Default" has the meaning set forth in Section
16.01 of the Restated Power Sales Agreement.
"Excluded Liabilities" has the meaning set forth in
Section 2.04 of the New Asset Sale Agreement.
"Existing Assets" means the existing electric power
assets owned by the Company as of the date of the Restated Power
Sales Agreement, which includes approximately 193 MW of diesel
and hydroelectric generating assets and related transmission and
other assets.
"Existing Facilities" means the collective reference to
the Mill Site Facility, the Timika Facility, the LIP Facility and
the Port Site Facility.
"Extended Force Majeure" means a Force Majeure Event
affecting PJP that remains in effect for more than six months,
during which PJP is not capable of producing Electricity at more
than 80% of the Target Capacity Level of all Facilities in the
aggregate, resulting in a continuous Milling Material Curtailment
or Shipping Material Curtailment during such period.
"Facility" means any of the Mill Site Facility, the
Coal Facility, the Timika Facility, the LIP Facility and the Port
Site Facility and "Facilities" means the collective reference to
the foregoing.
"Fair Market Value" means, on any date, the fair market
value of any asset (excluding any inventory of Diesel Fuel, Coal
or spare parts or equipment and any debt relating to such
inventory) as determined by an appraisal conducted by a qualified
independent appraiser selected by PTFI (with the reasonable
approval of PJP), which appraisal shall utilize the discounted
cash flow method of valuation.
"Fault" means negligence or willful misconduct.
"Financing Document" means any promissory note,
security document or other agreement pursuant to which PJP
obtains financing for the transactions contemplated by the New
Asset Sale Agreement or for any Alteration and the refinancing of
the Existing Assets.
"Financing Entities" means Senior Secured Lenders.
"Fixed O&M Charge" for any month, means the amount
calculated in accordance with Section 1.3 of Schedule I to the
Restated Power Sales Agreement for such month.
"Force Majeure Event" has the meaning set forth in
Section 13.01 to the Restated Power Sales Agreement.
"Fuel Charge" shall mean the sum of the Diesel Fuel
Charge and the Coal Fuel Charge.
"Fundamental Issue" has the meaning set forth in
Section 5.1 of the Restated Shareholders Agreement.
"Future Assets" means any assets owned by PJP
constructed, acquired, leased or otherwise obtained after the
Closing Date on the Untitled Land or the Land.
"GDP Deflator Index" means the United States Gross
Domestic Product Implicit Price Deflator Index published
quarterly by the Bureau of Economic Analysis of the U.S.
Department of Commerce or, if publication of that index ceases, a
similar index published by such other organization upon which PJP
and PTFI may mutually agree.
"GDP Deflator" means, for any given year, the ratio of
the last available GDP Deflator Index for the "III Quarter" of
the previous calendar year divided by that for the "III Quarter"
of the calendar year 1998.
"Generally Accepted Practices" means those practices,
methods, standards and acts approved or engaged in by a
substantial portion of Persons engaged in the construction,
operation and maintenance of sole-supplier electrical generating
facilities of a comparable nature, use and size as the
Facilities, which, in the exercise of reasonable judgment in
light of the facts known at the time a decision was made, would
have been expected to accomplish the desired result under the
circumstances with efficiency and dependability in accordance
with Applicable Law, safety and environmental protection;
provided, however, that, for a period of five (5) years from
Xxxxxxxx 00, 0000, XXX xxxxx xx presumed to have followed
Generally Accepted Practices to the extent that it engages in any
practices, methods, standards and acts engaged in by PTFI in the
ownership, operation and maintenance of the Existing Facilities
prior to December 26, 1994 (except to the extent PJP has actual
knowledge that any such practices, standards, methods or acts
would not otherwise constitute Generally Accepted Practices).
"General Manager" means the general manager of PJP,
which person shall be designated by PJP pursuant to Section 4.2
of the Technical Services Agreement and shall, among other
things, manage and administer PJP's affairs and act as liaison
with Contractor.
"Gold Deflator" means, for any given year, the quotient
obtained by dividing (x) the average of the daily "Final"
quotations for bullion quality gold on the London Free Bullion
Market (as published in "Metals Week") for the previous calendar
year by (y) the average of the daily "Final" quotations for
bullion quality gold on the London Free Bullion Market (as
published in "Metals Week") for the year 1998.
"Governmental Actions" means all proceedings, orders,
injunctions, authorizations, concessions, exceptions and other
similar actions of any Governmental Authority.
"Governmental Authority" means any federal, state,
local or foreign government, political subdivision, agency,
board, court, regulatory body or commission, any arbitrator with
authority to bind a party at law, any Person acting lawfully on
behalf of any of the foregoing, or any successor of any of the
foregoing.
"Hazardous Substances" means any pollutants,
contaminants, or toxic or hazardous substances or wastes
regulated under any Applicable Law now or hereafter in effect and
in each case as amended, and any judicial or administrative
interpretation thereof, or under any judicial or administrative
order, consent decree or judgment, relating to pollution, or the
environment, including laws relating to noise or to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, toxic or hazardous substances or wastes into the
workplace, the community or the environment (including air,
surface water, ground water, land surface or subsurface strata),
or otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, toxic or hazardous
substances or wastes.
"Heat Rate" means the amount of energy, expressed in
BTU/KWH, required to generate a kilowatt-hour of electricity.
"Heat Rate Bonus" has the meaning set forth in Section
1.9 of Schedule I to the Restated Power Sales Agreement.
"Heat Rate Penalty" has the meaning set forth in
Section 1.9 of Schedule I to the Restated Power Sales Agreement.
"HGB Title" means Hak Guna Bangunan title as provided
under Indonesian law.
"Hourly Availability" has the meaning set forth in
Section 1.10 of Schedule I to the Restated Power Sales Agreement.
"Hypothetical Taxpayer" means a hypothetical United
States corporation (i) whose taxable year is the calendar year,
(ii) that is subject to United States federal Taxes each taxable
year at the highest applicable marginal rate in effect for
calendar year corporations, (iii) that is a stand-alone United
States corporation not part of any consolidated, combined or
similar group with respect to United States federal Taxes and
that has no Affiliates, (iv) whose only assets consist of
Subordinated Loans to, and equity interests in, PJP, (v) whose
only income consists of income derived from the holding of
Subordinated Loans to, and equity interests in, PJP, (vi) whose
only expenses or other deductions for United States federal
income tax purposes each taxable year are (x) general and
administrative expenses equal to three percent (3%) of
distributions (gross of any Indonesian Taxes paid with respect to
such distributions) received from PJP during the year and (y)
interest expense for each quarter during the year equal to
1.23125% of the amount set forth on Schedule III to the Restated
Power Sales Agreement under the heading "Outstanding Investment"
with respect to such quarter, (vii) that makes an election under
section 1295 of the Code to treat PJP as a "qualified electing
fund" for the first taxable year for which it can make such
election, (viii) that is not subject to United States federal
alternative minimum tax under section 55 of the Code, as amended
from time to time, (ix) that is not an Indonesian resident
(unless the activities attributable to holding the Subordinated
Loans to, and equity interests in, PJP would cause such
corporation to be treated as an Indonesian resident), and (x)
that is treated as a corporation for United States federal income
tax purposes.
"ICC" means the "International Chamber of Commerce."
"Improvements" means all of the buildings, Facilities
and other structures, whether partially or fully completed as of
the date hereof or completed in the future pursuant to the New
Asset Sale Agreement or otherwise, located on, in or under the
Land and the Untitled Land, including, the Coal Facility, the
Coal Dock and the New Transmission Line (excluding the fiber
optics cable included in the New Transmission Line).
"Improvement-Related Property" means all plans,
specifications, surveys, contracts, permits, licenses, consents,
causes of action, books and records relating to the Improvements
to the extent they are assignable or transferable.
"Indemnified Party" has the meaning set forth in
Section 10.02 of the New Asset Sale Agreement.
"Indemnifying Party" has the meaning set forth in
Section 10.02 of the New Asset Sale Agreement.
"Independent Engineer" means any engineering firm
selected from the list on Appendix H to the Restated Power Sales
Agreement.
"Indonesian Government" means the government of the
Republic of Indonesia or any ministry, agency, department or
instrumentality thereof.
"Indonesian Inflation Index" means an index, to be
established in accordance with Section 1.7.3 of Schedule I to the
Restated Power Sales Agreement, that is intended to measure the
year-to-year change in per capita monetary compensation to
Indonesian nationals employed by PTFI.
"Indonesian Inflation Ratio" means, for any year, the
ratio of the Indonesian Inflation Index for the previous calendar
year divided by that for the calendar year 1997.
"Initial Term" has the meaning set forth in Section
2.01 of the Restated Power Sales Agreement.
"Interconnection Points" means, collectively, the Coal
Facility Interconnection Point, the Mill Site Interconnection
Point, the Port Site Interconnection Point, the LIP
Interconnection Point, and the Timika Interconnection Point, and
"Interconnection Point" means any one of the foregoing, each as
more fully described in Appendix B to the Restated Power Sales
Agreement.
"KWH" means kilowatt hours.
"Land" means the tract or parcel of land located in the
Province of Irian Jaya, Indonesia, shown on the map attached to
the New Asset Sale Agreement, as Exhibit A thereto, together with
all rights and appurtenances appertaining or belonging thereto.
"Letter Agreement" means that certain agreement dated
June 20, 1995 between PJP and PTFI, a copy of which is attached
to the Restated Power Sales Agreement as Schedule V.
"Letters" means (i) the letter from IR. Xxxx Xxxxxxx,
Minister for Agrarian Affairs/Head of BPN to the President
Director of PTFI concerning Landrights and
acknowledgments/Recognition Related to Sale and Transfer of
Infrastructure Assets, dated September 2, 1993, a copy of which
is attached to the New Asset Sale Agreement as Exhibit F-1, and
(ii) the letter from Xxx Xxxxx Xxxxxxx, Minister of Mines and
Energy to the President Director of PTFI concerning Consent to
the Sale of Supporting Infrastructure Assets, dated December 18,
1993, a copy of which is attached to the New Asset Sale Agreement
as Exhibit F-2.
"LIP Facility" means the electrical generation and
transmission assets described as such on Appendix K to the
Restated Power Sales Agreement, and all additions to, and
modifications, replacements and alterations of, the foregoing or
any portion thereof.
"LIP Interconnection Point" means the point at which
the equipment owned by PJP and used to transmit electricity from
the LIP Facility to PTFI's Plant meets the other equipment owned
by PTFI and used for such purposes.
"Lien" means, with respect to any property or asset,
any lien, mortgage, encumbrance, pledge, charge, lease, easement,
servitude, right of others or security interest of any kind,
including any of the foregoing arising under conditional sales or
other title retention agreements.
"Life Cycle Costs" means the incremental capital costs
and incremental operating costs of a Required Alteration over its
useful life.
"Local Political Risk Event" means any one of the
following events:
(i) ownership, operation or management of PJP or
the Facilities is adversely affected by a strike or
labor dispute involving laborers of PJP at PJP's Site
and laborers of PTFI at PTFI's Site;
(ii) ownership, operation or management of PJP or
the Facilities is adversely affected, directly or
indirectly, by any type of locally usurped power, local
insurrection, riot, civil strife or terrorism or
sabotage which, in any such case, occurs in Irian Jaya,
Indonesia;
(iii) the interruption or curtailment of the
operation of the Facilities or of PTFI's Plant as a
result of PTFI's noncompliance with any Applicable Law
or Applicable Permit of an Indonesian Governmental
Authority which renders PJP unable to fully perform its
obligations to deliver electric capacity or Electricity
under the Restated Power Sales Agreement.
"Loss" has the meaning set forth in Section 10.01 of
the New Asset Sale Agreement.
"Low Voltage Assets" means the low voltage distribution
assets of PTFI.
"Maintenance Agreement" means that certain Maintenance
Agreement dated as of December 19, 1997 between PJP and PTFI.
"Major Maintenance Outage" means a scheduled outage for
the purpose of inspecting a Coal Unit.
"Major Unexcused Outage" means an Unexcused Outage
during which (A)(i) the Mill Site Facility and the Coal Facility
in the aggregate produce Electricity at less than 80% of the
combined Target Capacity Levels for both such Facilities for any
continuous period of seventy-two (72) hours, or for one hundred
sixty-eight (168) hours in the aggregate during any Quarter, and
(ii) PTFI is caused to suffer and continues to suffer a Milling
Material Curtailment as a result of such Unexcused Outage; or
(B)(i) the Coal Facility produces Electricity at less than 80% of
its Target Capacity Level for any continuous 336-hour period, or
for four hundred eighty (480) hours in the aggregate during any
Quarter, and (ii) PTFI is caused to suffer a Shipping Material
Curtailment as a result of such Unexcused Outage.
"Mandatory Purchase Right" means the right granted by
PTFI to PJP requiring PTFI to offer to acquire all of the
Property, as more fully described in Section 4.01 of the Option
Agreement.
"Mandatory Purchase Right Exercise Notice" means the
written notice given by PJP to PTFI, as more fully described in
Section 4.04 of the Option Agreement.
"Mandatory Purchase Right Exercise Notice Date" means
the date of the Mandatory Purchase Right Exercise Notice.
"Mandatory Purchase Right Purchase Price" means the
price, as determined in accordance with Section 4.05 of the
Option Agreement, paid by PJP for the exercise of its Mandatory
Purchase Right.
"Material Adverse Effect" means (i) a material adverse
effect on the New Facilities, taken as a whole; and (ii) with
respect to the New Facilities, the inability of the New
Facilities to meet the respective Target Capacity Levels
applicable to such Facilities.
"Meters" means the metering and measurement devices
installed by PJP and used to measure the amount of Electricity
delivered by PJP to PTFI pursuant to Article VI of the Restated
Power Sales Agreement.
"Mill Site Facility" means the electrical generation
and transmission assets described as such on Appendix F to the
Restated Power Sales Agreement, and all additions to, and
modifications, replacements and alterations of, the foregoing or
any portion thereof.
"Mill Site Interconnection Point" means the point at
which the equipment owned by PJP and used to transmit electricity
from the Mill Site Facility to PTFI's Plant meets the other
equipment owned by PTFI and used for such purposes.
"Milling Material Curtailment" means a complete and
involuntary shutdown of any ball mill or any of the SAG xxxxx or
the crushing and screening plant at PTFI's Plant caused by an
Unexcused Outage.
"Mine Operator" means the Person who, at any time and
from time to time, is the operator of COW Operations.
"MOME" means Menteri Pertambangan Xxx Energi (the
Ministry of Mines and Energy of the Indonesian Government).
"MW" means megawatts.
"National Electrical Safety Code" shall mean the
National Electrical Safety Code of Indonesia.
"New Asset Sale Agreement" means that certain Second
Asset Sale Agreement, dated as of the date of the Restated Power
Sales Agreement, between PJP and PTFI.
"New Diesel Facilities" means the third, fourth and
fifth diesel generators installed or to be installed at the LIP
Facility.
"New Facilities" means (i) the Coal Facility; (ii) the
New Transmission Line; (iii) the Coal Dock; (iv) the New Diesel
Facilities; (v) the transmission line between the LIP Facility
and the substation at milepost 38/39; (vi) the Ash Disposal
Facility and (vii) any and all ancillary physical assets conveyed
under the New Asset Sale Agreement.
"New Transmission Line" means the new high voltage
230kv transmission line being constructed to connect the Coal
Facility and the Port Facility with the Mill Site Facility.
"Nominal Capacity Level" means 320MW, as adjusted
pursuant to the Letter Agreement.
"Nominee" means a Commissioner Nominee or a Director
Nominee.
"O&M Charge" means the Fixed O&M Charge and the
Variable O&M Charge.
"OM&M Termination Agreement" means the OM&M Termination
Agreement dated as of the date of the Restated Power Sales
Agreement, between PJP and P.T. Nusantara Power Services, which
terminates the Original OM&M Agreement.
"Option Agreement" means the Option, Mandatory Purchase
and Right of First Refusal Agreement between PTFI and PJP dated
the date of the Restated Power Sales Agreement pursuant to which
PTFI has the right, under certain circumstances, to repurchase
the Facilities in accordance with the terms thereof.
"Option Period" has the meaning set forth in Section
2.01 of the Option Agreement.
"Option Price" means, on any date, the amount set forth
on Schedule III to the Restated Power Sales Agreement under the
heading "Option Price" opposite the quarter in which such date
occurs.
"Original Asset Sale Agreement" means the Asset Sale
Agreement, dated as of December 27, 1994, between PTFI and PJP.
"Original OM&M Agreement" means the Operating,
Maintenance and Management Agreement dated December 27, 1994
between PJP and P.T. Nusantara Power Services as amended by First
Amendment to Operations, Maintenance and Management Agreement
dated as of April 15, 1996.
"Original Power Sales Agreement" means the Power Sales
Agreement dated December 27, 1994 between PJP and PTFI, as
amended by the First Amendment to the Power Sales Agreement dated
as of April 15, 1996.
"Original Services Agreement" means the Services
Agreement dated December 27, 1994 between PJP and PTFI.
"Original Shareholders" means DIJ, PIC, PTFI and PNJ.
"Original Shareholders Agreement" means the
Shareholders Agreement dated as of December 27, 1994 among the
Original Shareholders.
"Outstanding Investment" means, on any date, the amount
set forth on Schedule III to the Restated Power Sales Agreement
under the heading "Outstanding Investment" opposite the quarter
in which such date occurs.
"Penalty" means an Availability Penalty, Curtailment
Penalty or Heat Rate Penalty.
"Permit" has the meaning set forth in Section 3.08 of
the New Asset Sale Agreement.
"Permitted Lien" has the meaning set forth in Section
3.06(a) of the New Asset Sale Agreement.
"Person" means an individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, unincorporated organization, trust or other
entity or organization, including any Governmental Authority.
"PIC" means Powerlink Indonesia Company, L.L.C., a
Delaware limited liability company.
"PJP" means P.T. Puncakjaya Power, an Indonesian
limited liability company.
"PJP Credit Agreement" means that certain Credit
Agreement dated as of December 19, 1997 among PJP, each of the
financial institutions that is from time to time a Lender
thereunder, and Citicorp International Limited as Agent Bank and
Collateral Agent, as in effect on the date hereof.
"PJP Indemnitee" has the meaning set forth in Section
11.02 of the Restated Power Sales Agreement.
"PJP Share Issuance" shall mean each issuance of any
Shares of PJP, whether or not previously issued, which PJP
desires to issue, sell, convey, transfer or assign.
"PJP Share Issuance Intent Notice" means the written
notice given by PJP to PTFI stating PJP's intention to make a PJP
Share Issuance.
"PJP Share Sale Notice" has the meaning set forth in
Section 5.04 of the Option Agreement.
"PJP's Site" means the property described in Appendices
D, F, G, J and K to the Restated Power Sales Agreement, in the
aggregate.
"PLN" means PT PLN (Persero) (the national electric
company of the Indonesian Government).
"PNJ" means P.T. Prasarana Nusantara Jaya, an
Indonesian limited liability company, formerly P.T. Austindo
Nusantara Jaya.
"Pole Attachment Agreement" shall mean that certain
Pole Attachment Agreement dated as of December 19, 1997 between
PJP and PTFI.
"Port Site Facility" means the electrical generation
and transmission assets described as such on Appendix G to the
Restated Power Sales Agreement, and all additions to, and
modifications, replacements and alterations of, the foregoing or
any portion thereof.
"Port Site Interconnection Point" means the point at
which the equipment owned by PJP and used to transmit electricity
from the Port Site Facility to PTFI's Plant meet the equipment
owned by PTFI and used for such purposes, as more fully described
in Appendix B to the Restated Power Sales Agreement.
"Post-Closing Permit" has the meaning set forth in
Section 3.08 of the New Asset Sale Agreement.
"Post-Closing Tax Period" means, with respect to any of
the New Facilities, any and all Tax periods (or portion thereof)
ending after the Closing Date.
"Power Assets" means the collective reference to the
Existing Assets and the New Facilities.
"Power Plant A" means the 43.9 MW electric generating
facility consisting of sixteen (16) diesel generator sets and
forming part of the Mill Site Facility.
"Power Plant C" means the 72 MW electric generating
facility consisting of eighteen (18) diesel generator sets and
forming part of the Mill Site Facility.
"Pre-Approved Party" has the meaning set forth in
Sections 3.03, 5.03 and 7.03, respectively, of the Option
Agreement.
"Pre-Closing Tax Period" means any and all Tax periods
(or portions thereof) ending on or before the close of business
on the Closing Date.
"Project Area" means the area of PTFI's operations in
Irian Jaya, Indonesia.
"Project Services Fees" means those fees and expenses
for services performed and expenses incurred by DEII pursuant to
the Administrative Services Agreement.
"Property" means the Use Rights, the Land, the
Improvements and the Improvement-Related Property.
"Property Purchase Exercise Notice" means the written
notice given by PTFI to PJP pursuant to Section 2.04 of the
Option Agreement.
"Property Purchase Exercise Notice Date" means the date
of the Property Purchase Exercise Notice.
"Property Purchase Option" has the meaning set forth in
Section 2.01 of the Option Agreement.
"Property Purchase Option Price" means the amount, as
determined in accordance with Section 2.05 of the Option
Agreement, to be paid by PTFI to PJP for the sale and transfer of
the Property.
"Property Sale Notice" means the notice given by PJP to
PTFI of PJP's receipt of an offer from a Person to purchase all
or a portion of the Property and PJP's intent to accept such
offer.
"Property Transfer" means a sale, conveyance, transfer
or assignment of Property by PJP as described in Section 3.01 of
the Option Agreement.
"Property Transfer Intent Notice" means the written
notice given by PJP to PTFI stating PJP's intention to make a
Property Transfer.
"Proportionate Amount" means on any date, the
percentage derived by dividing (x) the number of Shares being
purchased, or sold, as the case may be, by a Shareholder by (y)
the total number of issued and outstanding Shares.
"Proposed Transferee" has the meaning set forth in
Section 3.4 of the Restated Shareholders Agreement.
"Prudent Utility Practices" means the practices,
methods and acts engaged in or internationally approved by the
majority of thermal electric generating companies that, at that
particular time, in the exercise of reasonable judgment in light
of the facts known or that reasonably should have been known at
the time a decision was made, would have been expected to
accomplish the desired result in a manner consistent with law,
regulation, reliability, safety, economy and environmental
protection.
"PSA Subordinated Debt" means debt of PJP to PTFI which
shall (i) bear interest at the Default Rate, (ii) be payable as
to principal and interest in quarterly installments equal to an
amount which, on the date of payment thereof, bears the same
ratio to the amount then being paid by PJP to its Shareholders as
dividends or in respect of Subordinated Loans, as the original
principal amount of the PSA Subordinated Debt bears to the
Outstanding Investment on the date the PSA Subordinated Debt is
made available, (iii) be payable by PJP solely from amounts
which, in accordance with the Financing Documents, are available
for PJP to pay dividends or amounts due in respect of
subordinated debt to Shareholders or their Affiliates, and (iv)
otherwise be subject and subordinate to all amounts owing by PJP
to Senior Secured Lenders on the basis set forth in Schedule VII
to the Restated Power Sales Agreement.
"PTFI" means P.T. Freeport Indonesia Company, an
Indonesian limited liability company, domesticated in the State
of Delaware, U.S.A.
"PTFI Indemnitee" has the meaning set forth in Section
11.01 of the Restated Power Sales Agreement.
"PTFI Participation Agreement" means that certain
Participation Agreement dated October 11, 1996 between PTFI and
PT RTZ, as amended, modified or supplemented from time to time.
"PTFI's Plant" means, collectively, the facilities
owned or operated by PTFI on PTFI's Site, any additions thereto,
and any modifications and replacements thereof, all as more
specifically described in Appendix C to the Restated Power Sale
Agreement.
"PTFI-Related Entity" means any Person conducting
business at PTFI's Site on or after the commencement of the Term,
as designated by PTFI from time to time.
"PTFI's Site" means the property set forth in Appendix
E to the Restated Power Sales Agreement.
"PT Kaltim Prima" means PT Kaltim Prima Coal, a company
incorporated under the laws of the Republic of Indonesia.
"PT RTZ" means P.T. RTZ-CRA Indonesia, an Indonesian
limited liability company.
"Purchase Price" has the meaning set forth in Section
2.01 of the New Asset Sale Agreement.
"Quarter" means each of the quarterly periods (or in
the case of the first and last thereof, the portion of such
period) ending on and including March 31, June 30, September 30
and December 31 of each Contract Year.
"Real Property" has the meaning set forth in Section
2.08 of the New Asset Sale Agreement.
"Refurbished Year" has the meaning set forth in Section
1.9 of Schedule I to the Restated Power Sales Agreement.
"Reliability" has the meaning set forth in Appendix L
to the Restated Power Sales Agreement.
"Renewal Term" has the meaning set forth in Section
2.01 of the Restated Power Sales Agreement.
"Representative" means, with respect to a party, any of
its or its Affiliates' officers, directors, employees, agents,
advisors or any Affiliate of such party.
"Required Alteration" has the meaning set forth in
Section 7.03(e) of the Restated Power Sales Agreement.
"Required Consent" has the meaning set forth in Section
3.05 of the New Asset Sale Agreement.
"Restated Power Sales Agreement" means the Amended and
Restated Power Sales Agreement dated as of December 18, 1997
between PJP and PTFI which amends and restates the Original Power
Sales Agreement.
"Restated Services Agreement" means that Amended and
Restated Services Agreement, dated as of the date of the Restated
Power Sales Agreement, between PTFI and PJP which amends and
restates the Original Services Agreement.
"Restated Shareholders Agreement" means that certain
Amended and Restated Shareholders Agreement, dated as of the date
of the Restated Power Sales Agreement, among DIJ, WPI, PNJ and
PJP.
"Restricted Transfer" has the meaning set forth in
Section 3.1 of the Restated Shareholders Agreement.
"Restricted Transfer Notice" has the meaning set forth
in Section 3.4 of the Restated Shareholders Agreement.
"Retained Right of Access" means any right of access
retained by PTFI to the Facilities, including, without
limitation, an easement in favor of PTFI with respect to the
Facilities and any right of reentry in favor of PTFI under the
Restated Power Sales Agreement.
"Right of First Refusal as to Portfolio Shares" has the
meaning set forth in Section 5.01 of the Option Agreement.
"Right of First Refusal as to Property" has the meaning
set forth in Section 3.01 of the Option Agreement.
"Rupiah" or "Rp" means the lawful currency of the
Republic of Indonesia.
"R.V." means the Reglement op de Rechtsvordering.
"Safety Program" has the meaning set forth in Section
8.03 of the Restated Power Sales Agreement.
"SCADA" means the computer management program known as
"supervisory control and data acquisition system."
"Second Renewal Term" has the meaning set forth in
Section 2.01 of the Restated Power Sales Agreement.
"Senior Officer" means any chief executive officer,
chief financial officer, president, executive vice president or
senior vice president.
"Senior Secured Lender" means any third party or
parties providing debt financing or refinancing for PJP's
acquisition of the Facilities or for any Alteration, including
any commercial banks, institutional lenders, holders of bonds, or
any trustee or collateral agent acting on behalf of any of the
foregoing.
"Services" means, collectively, those services that PJP
shall perform pursuant to Section 2.01 of the Maintenance
Agreement.
"Share" means any issued and outstanding share of
authorized share capital (voting common stock) of PJP.
"Shareholder" means each of DIJ, WPI and PNJ, in each
case for so long as it owns Shares, and its successors and, to
the extent permitted by the terms of the Restated Shareholders
Agreement and of the Articles, any transferee of any Shares it
owns.
"Shareholder Share Purchase Exercise Notice" means the
written notice given by PTFI to any Shareholder of PTFI's
election to exercise the Shareholder Share Purchase Option.
"Shareholder Share Purchase Exercise Notice Date" means
the date of the Shareholder Share Purchase Exercise Notice.
"Shareholder Share Purchase Option" has the meaning set
forth in Section 6.01 of the Option Agreement.
"Shareholder Share Purchase Option Price " means the
amount to be paid by PTFI to each Shareholder for the sale and
transfer of such Shareholder's Shares and Subordinated Loans, if
any, such amount to be determined in accordance with Section 6.05
of the Option Agreement.
"Shareholder Share Right of First Refusal" means the
exclusive right of first refusal granted by each of the
Shareholders to PTFI to acquire any Shares and Subordinated
Loans, if any, owned by such Shareholder which such Shareholder
desires to sell, convey, transfer or assign to any Person other
than a Shareholder or an Affiliate thereof.
"Shareholder Share Sale Notice" means the written
notice given by a Shareholder to PTFI of an offer from a Person
to purchase all or a portion of such Shareholder's Shares and
Subordinated Loans, as such notice is more fully described in
Section 7.04 of the Option Agreement.
"Shareholder Share Transfer" has the meaning set forth
in Section 7.01 of the Option Agreement.
"Shareholder Share Transfer Intent Notice" means the
written notice given by a Shareholder to PTFI of its intention to
make a Shareholder Share Transfer.
"Shipping Material Curtailment" means, with respect to
PTFI's shipping operations, any delay in the scheduled departure
of an ore transport ship from PTFI's port facilities caused by an
Unexcused Outage that results in PTFI incurring demurrage charges
not promptly reimbursed by PJP.
"Site Procedures" has the meaning set forth in Section
8.03(a) of the Restated Power Sales Agreement.
"Special Purpose Parent" means, with respect to DIJ or
WPI, or any transferee of either of them, any Person
substantially all of the assets of which consist of an indirect
ownership interest in PJP.
"Subordinated Loan" means a subordinated loan made by
any Shareholder to PJP and evidenced by one or more notes which
provide for the express subordination of such loans on the terms
and conditions set forth in Schedule VII to the Restated Power
Sales Agreement and are otherwise in form and substance
satisfactory to the parties to the Restated Shareholders
Agreement.
"Support Services" means those services identified in
Schedule 5.1 to the Restated Services Agreement.
"Target Capacity Level" means, with respect to the Port
Site Facility, 4.4 MW; with respect to the Coal Facility, 0 MW;
with respect to the Mill Site Facility, 125 MW; with respect to
the LIP Facility and the Timika Facility combined, 10.8 MW, in
each case at a generator power factor of not less than 0.85 as
such Target Capacity Levels are adjusted in accordance with
Section 3.05 of the Restated Power Sales Agreement.
"Target Heat Rate" has the meaning set forth in Section
1.9 of Schedule I to the Restated Power Sales Agreement.
"Tax" and "Taxes" means any and all present and future
taxes, charges, fees, levies, imposts, duties, and other
assessments, including, without limitation, any income,
alternative, minimum or add-on tax, gross income, gross receipts,
sales, use transfer, ad valorem, value added, franchise,
registration, title, license, capital, paid-up capital, profits,
withholding, payroll, employment, excise, severance, stamp,
occupation, premium, real property, personal property,
environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalties, or additions
to tax.
"Tax Adjustment" has the meaning set forth in Section
7.03(b) of the Restated Power Sales Agreement.
"Tax Gross-Up" has the meaning set forth in Schedule
III to the Restated Power Sales Agreement.
"Tax Indemnity Agreement" means the Amended and
Restated Tax Indemnity Agreement dated as of December 27, 1994
between PTFI and DIJ, as amended by that certain letter agreement
dated December 19, 1997 between PTFI and DIJ.
"Term" shall mean, collectively, the Initial Term and
any Renewal Term(s).
"Third Party Asset" means any Future Asset of PJP
constructed, acquired, leased or otherwise obtained by PJP for
the purpose of generating and selling electric energy or capacity
to a third party.
"Third Party Asset Price" means, on any date, with
respect to any Third Party Assets, the greater of (i) the Fair
Market Value of such Third Party Assets on such date and (ii) the
net book value of such assets as reflected in the most recent
balance sheet of PJP.
"Timika Facility" means the electrical generation and
transmission assets described as such on Appendix D to the
Restated Power Sales Agreement, and all additions to, and
modifications, replacements and alterations of, the foregoing or
any portion thereof.
"Timika Interconnection Point" means the point at which
the equipment owned by PJP and used to transmit electricity from
the Timika Facility to PTFI's Plant meets the equipment owned by
PTFI and used for such purposes.
"Transaction Documents" means the Restated Power Sales
Agreement, the Restated Services Agreement, the New Asset Sale
Agreement, the Restated Shareholders Agreement, the Option
Agreement, the Technical Services Agreement, the Share Purchase
Agreement, the Pole Attachment Agreement, the Maintenance
Agreement, the Administrative Services Agreement, the OM&M
Termination Agreement, the Default Remedies Co-ordination
Agreement and any other documents or agreements executed and
delivered as a part of the Closing.
"Transferor" shall mean the transferor of Shares or
Property, as the case may be.
"Unexcused Outage" means, with respect to a specific
Facility, any failure by PJP to maintain an operating level equal
to the Target Capacity Level of such Facility to the extent such
failure is not the result of (i) one or more Local Political Risk
Events, (ii) the making of any Required Alteration during the
period thereof, the failure to have made a Required Alteration as
a result of PTFI's failure to consent thereto as contemplated in
the Restated Power Sales Agreement, or any delay in making a
Required Alteration during the pendency of arbitration
proceedings related to such Required Alteration, (iii) the
failure of PJP or any permitted assignee of PJP pursuant to
Section 11.07 of the Restated Services Agreement, to receive a
service or of PTFI or any successor or permitted assignee of PTFI
to otherwise fulfill an obligation, in each case, pursuant to the
Restated Services Agreement, including, without limitation, the
failure of PJP to receive Diesel Fuel whether or not as a result
of a Force Majeure Event affecting PTFI, a Local Political Risk
Event or any failure of the coal supplier to deliver Coal under
the Coal Supply Agreement (except any failure of PJP to receive
Diesel Fuel or Coal to the extent resulting from PJP's Fault or
Breach (other than a PJP Breach under the Coal Supply Agreement
resulting from PTFI's failure to make payments due under the
Restated Power Sales Agreement)), (iv) any action taken at the
direction of, or taken by, PTFI (including, without limitation,
interconnections pursuant to Section 5.01 of the Restated Power
Sales Agreement, PTFI's installation of check meters pursuant to
Section 6.01 of the Restated Power Sales Agreement, or its
purchase from third parties, or production of, Electricity, or
the curtailment or reduction in deliveries of Electricity,
pursuant to Section 3.02 or 3.06 of the Restated Power Sales
Agreement) which has a material adverse effect on PJP's ability
to perform its obligations under the Restated Power Sales
Agreement, (v) any outage or failure of the New Transmission Line
during the Evaluation Period, (vi) failure of PTFI to obtain any
Post-Closing Permit as provided in the New Asset Sale Agreement
or (vii) PTFI's Fault or Breach.
"Unit Major Maintenance Outage Year" has the meaning
set forth in Section 1.9 of Schedule I to the Restated Power
Sales Agreement.
"Unit Rating" means the capacity level of a unit of any
Facility determined in accordance with the Completion Criteria
for such unit, as adjusted pursuant to Section 3.05 of the
Restated Power Sales Agreement.
"Untitled Land" means those tracts or parcels of Land
located in the Province of Irian Jaya, Indonesia as to which PJP
has Use Rights but as to which PJP does not have HGB Title.
"Use Rights" means the right to enter, use, occupy and
construct building facilities on the Untitled Land.
"Variable O&M Charge" for any month, means the amount
calculated in accordance with Schedule I to the Restated Power
Sales Agreement for such month.
"Vendor" shall mean a party, including PTFI, that
provides services to PJP that assist PJP in the performance of
its obligations under the Restated Power Sales Agreement.
"Westcoast" has the meaning set forth in the first
paragraph of the Restated Shareholders Agreement.
"WPI" has the meaning set forth in the first paragraph
of the Restated Shareholders Agreement.
THE REMAINING APPENDICES AND SCHEDULES LISTED BELOW HAVE BEEN OMITTED AND
WILL BE PROVIDED UPON REQUEST.
APPENDIX B INTERCONNECTION POINTS
APPENDIX C PTFI'S PLANT
APPENDIX D TIMIKA FACILITY
APPENDIX E PTFI'S SITE
APPENDIX F MILL SITE FACILITY
APPENDIX G PORT SITE FACILITY
APPENDIX H ENGINEERING FIRMS
APPENDIX I TECHNICAL SPECIFICATIONS FOR ELECTRICITY AND
ELECTRIC CAPACITY
APPENDIX J COAL FACILITY
APPENDIX K LIP FACILITY
APPENDIX L TARGET CAPACITY LEVELS AND RELIABILITY
APPENDIX M FORM OF MONTHLY INVOICE
APPENDIX N OUTLINE OF SITE PROCEDURES
APPENDIX O OPERATOR'S PERSONNEL
SCHEDULE I SUMMARY OF CHARGES - INITIAL TERM
SCHEDULE II [RESERVED]
SCHEDULE III OUTSTANDING INVESTMENT AND OPTION PRICE
SCHEDULE IV PRINCIPLES GOVERNING USE BY THIRD PARTIES OF
PJP'S TRANSMISSION AND DISTRIBUTION LINES
SCHEDULE V LETTER AGREEMENT CONCERNING LIP FACILITY
DATED JUNE 20, 1995
SCHEDULE VI TAX INFORMATION AND ASSUMPTIONS
SCHEDULE VII TERMS OF SUBORDINATION
