Exhibit 10.38
AMENDMENT
TO
THE POWER PURCHASE AND OPERATING AGREEMENT
BETWEEN
PANDA ENERGY CORPORATION
AND
VIRGINIA ELECTRIC AND POWER COMPANY
This Amendment No. 1 ( hereinafter the "Amendment")
effective as of October 24, 1989 is by and between PANDA
ENERGY CORPORATION (Operator), a Texas Corporation, and
VIRGINIA ELECTRIC AND POWER COMPANY ("North Carolina
Power" or "Virginia Power" or the "Company"), a Virginia
Public Service Corporation.
WHEREAS, Operator and the Company have entered into a
Power Purchase and Operating Agreement, dated January 24, 1989
(the "Agreement"); and
WHEREAS, Operator assigned all its rights, title and interest
in the Agreement to Panda-Xxxxxxxx Corporation ("Panda-Xxxxxxxx"),
with the consent of the Company, by a Consent and Agreement dated
May 15, 1989; and
WHEREAS, Operator and the Company now wish to amend
certain provisions of the Agreement;
NOW, THEREFORE, in consideration of the mutual
promises and obligations stated herein, Operator and the
Company do hereby agree as follows:
(1) The first paragraph on page 3 of the Agreement, first
sentence, fifth line down, after the phrase [or "the Company"],
add the phrase [or "Virginia Power"].
(2) The first Recital on page 3 of the Agreement, third line
down, delete the number "172.000" and replace it with the number
"180,000".
(3) The second Recital on page 3 of the Agreement at the end
of the second line, delete the date "June 14, 1990" and replace
it with the date "November 1, 1990".
(4) Section 1.10 "Design Limits" on page 6 of the
Agreement, first sentence, fourth line, delete the number
"170" and replace it with the number "180".
(5) Section 5.3 on page 18 of the Agreement, middle of
second line delete the words "by Operator".
(6) Insert the words "by Operator" after the word
"Failure" in Section 5.3(a) on page 18 of the Agreement.
(7) Section 5.3(b) on page 18 of the Agreement is amended
in its entirety to read as follows:
"(b) Failure by Operator to complete Financial Closing
by December 31, 1989, failure by Operator to commence
construction of the Facility by December 31, 1989.
Operator's abandonment of construction or operation of the
Facility at any time, failure by Operator to provide
evidence of reliable fuel supply by April 30, 1990, and
failure by Operator to reach the Commercial Operations Date by
the later of November 1, 1991 or thirty (30) Days after North
Carolina Power advises Operator that the Interconnection
Facilities are sufficient to accept deliveries up to the
Estimated Dependable Capacity unless excused by Force Majeure as
specified in Article 14; or
(8) Page 18 of the Agreement, Subsection 5.3(c), fifth line
down, delete the phrase "any breach of financial documents
associated with the performance of this Agreement;" and
replace it with the phrase "any termination for default
of financing agreements associated with the performance of
this Agreement or material breach thereof that could lead to the
termination of such financing agreements;"
(9) Subsection 5.3(e) of the Agreement is renumbered as
5.3(f) and the following new Subsection is added to Section 5.3
of the Agreement:
"5.3(e) The failure by the Company to make payments for
energy or capacity in accordance with this Agreement."
(10) Section 6.1 on page 20 of the Agreement is amended
in its entirety to read as follows:
"6.1 Operator represents and warrants that beginning with
the Commercial Operations Date and at all times thereafter
until the termination of this Agreement that it shall have
fuel oil stored at the Facility site in quantities
sufficient to operate the Facility for one hundred and
sixty-eight (168) consecutive hours at the Dependable
Capacity level determined in accordance with Article 11. From
time to time, as North Carolina Power may reasonably
request, Operator shall provide North Carolina Power
evidence of its compliance with this obligation. For purposes of
this provision, fuel oil will be deemed to be 'stored at the
Facility site' if such fuel oil is fully dedicated to the
Facility and stored in a storage tank or tanks that are
connected to the Facility by delivery pipelines capable of
delivering fuel oil to the Facility at a rate that will
support Facility operation at the Dependable Capacity determined
in accordance with Article ll.
(11) Add the following sentence to Section 7.1 on page 25 of
the Agreement: "In addition, prior to tenth (10th) of each
Month after the Commercial Operations Date, Operator shall
provide North Carolina Power with Facility generating,
performance and event data consistent with the format specified
in the NERC Generating Availability Data Systems (GADS) reporting
standards."
(12) Section 7.6 on page 27 of the Agreement, second line
from the bottom of the page, delete the phrase "pursuant to
(a), (b) and (c) above." and replace it with the phrase
"pursuant to (a) and (b) above."
(13) Section 8.1 on page 29 of the Agreement, middle of
sixth line down, delete the phrase "sixty (60) Days" and replace
it with "thirty (30) Days".
(14) Section 8.8(a) on page 31 of the Agreement is amended
in its entirety to read as follows:
"(a) Events of Force Majeure set forth in Article 14 of this
Agreement.
(15) The following sentence is inserted after the word
"month." on the third line of Subsection 10.15(a) on page 40 of
the Agreement:
"The Commercial Operations Date may not occur earlier than
thirty (30) days after completion of the Interconnection
Facilities if such earlier Commercial Operations Date would then
occur prior to November 1, 1990."
(16) Section 10.15(d) on page 42 of the Agreement, first
sentence, middle of third line of paragraph, delete the phrase
"Section 7.6(c)" and replace it with the phrase "Section 7.6(b)".
(17) Section 11.1 on page 44 of the Agreement is amended
in its entirety to read as follows:
"Section 11.1. Operator's original Estimated Dependable
Capacity is 150 MW for the Summer Period and 180 MW for the
Winter Period. "
(18) Section 13.5 on page 54 of the Agreement is amended
in its entirety to read as follows:
"13.5 Security for compliance with Section 13.4 above may
consist of an unconditional and irrevocable direct pay letter
of credit issued by a bank acceptable to North Carolina Power
in a form and with substance acceptable to North Carolina
Power. At North Carolina Power's option, security for
compliance with Section 13.4 may (in place of the letter of
credit) consist of one or more of the following:
(a) A payment or performance bond issued by a company
acceptable to North Carolina Power for payment to North
Carolina Power in the event of a material breach by
Operator in a form and with substance acceptable to North
Carolina power.
(b) A corporate guarantee which North Carolina Power, at
its discretion, deems to be equivalent in quality to the
security detailed above in this Section 13.5 in a form and
with substance acceptable to North Carolina Power. "
(19) Section 13.7 on page 58 of the Agreement is amended in
its entirety to read as follows:
"13.7 Neither Party shall be liable to the other Party for indirect,
incidental, or consequential damages arising out its failure to
deliver or purchase Dependable Capacity energy or hereunder or failure
to complete Interconnection Facilities by the date specified in Section 8.1,
irrespective the causes thereof, including fault or negligence.
Notwithstanding the above waiver of indirect, incidental, or
consequential damages, each Party to this Agreement shall be
liable for any obligations to pay damages to, or to reimburse or
indemnify the other Party as expressly set forth in this
Agreement."
(20) Sections 18.1(a) and (b) on page 64 of the Agreement
are amended in their entirety to read as follows: "(a) If the
Disallowance occurs before the sixteenth anniversary of the
Commercial Operations Date, North Carolina Power shall continue
to pay for Dependable Capacity at the Capacity Purchase Price
set forth in Article 10 through the sixteenth anniversary of
the Commercial Operations Date. Payments for Dependable
Capacity beginning on the sixteenth anniversary of the
Commercial Operations Date shall not exceed the amount
unaffected by the Disallowance. Further, "North Carolina Power
may, at its option, beginning on the sixteenth anniversary
of the Commercial Operations Date withhold up to seventy-five
(75) percent of the payments for Dependable Capacity until
the sooner of (i) the seventeenth anniversary of the Commercial
Operations Date or (ii) the entire amount of the
Disallowance is repaid with Interest from the date each part of
the Disallowance was paid to Operator. In the event that such
withholding does not fully repay the Disallowance and accrued
Interest by the seventeenth anniversary of the Commercial
Operations Date, the Operator shall pay the remainder to
North Carolina Power within twenty-eight (28) Days after the
seventeenth anniversary of the Commercial Operations Date in a
lump sum;
(b) If the Disallowance occurs after the sixteenth
anniversary of the Commercial Operations Date, all future
payments for Dependable Capacity shall not exceed the amount
unaffected by the Disallowance. Further, the Operator shall
repay the full amount of the Disallowance with Interest by the
later of (i) one year from the date of such Disallowance or (ii)
the seventeenth anniversary of the Commercial Operation Date."
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized
representatives, and it is effective as of the last day set forth
below:
VIRGINIA ELECTRIC AND POWER
COMPANY PANDA ENERGY CORPORATION
By: __________________________ By________________________
Xxxxx X. Xxxxx Xxxxxx X. Xxxxxx
Title: Vice-President, System Title: Chairman
Planning and Power Supply
Date: 10/24/89 Date: 10/23/89
EXHIBIT A
DATA REQUIRED TO PERFORM INTERCONNECTION STUDY
1. Electrical one-line of the Facility.
2. Explanation of proposed equipment protection and control
scheme (may be shown functionally on the one-line).
3. Site plan showing plant layout, property lines, access
roads and switchyard boundaries.
4. Preliminary equipment layout and arrangement for
switchyard and generator step-up transformer (GSU).
5. Estimated GSU impedance +/- 20 percent.
6. GSU connection and winding.
7. Estimated generator reactances +/- 20 percent.
8. Estimated generator kilowatt rating +/- 10 percent.
9. Estimated generator kilovar rating +/- 10 percent.
10. Explanation of proposed excitation system.
11. Estimated station auxiliary load +/- 20 percent.
12. Requirements for construction and start-up power.
13. Project schedule (I-J or bar chart format) including but not
limited to the following milestones:
- QF status obtained
- Engineering 30% complete
- One-line approved
- Financial Closing
- Major licenses/permits
- Major material procurement
- Start construction
- Engineering 70% complete
- Utility technical submittals complete
- Operating procedures finalized
- Start test and start-up
- Roll turbine
- Initial synchronizing date
- Capacity test complete
- Commercial operation
Data submitted in a preliminary or estimated form shall be
updated within 30 days after final equipment arrangements and
specifications are established.
