EXHIBIT 10.83
GENERAL INTERCONNECTION
AGREEMENT
PARTY A: North China Power Group Company
Party B: Tangshan Panda Heat and Power Co., Ltd.
Tangshan Pan-Western Heat and Power Co., Ltd.
Beijing
September 22, 1995
GENERAL INTERCONNECTION AGREEMENT
Two Parties of this Agreement:
North China Power Group Company (hereinafter referred to as
Party A); Tangshan Panda Heat and Power Co., Ltd. ("Panda") and
Tangshan Pan-Western Heat and Power Co., Ltd. ("Pan-Western")
(Panda and Pan-Western are hereinafter collectively referred to
as Party B).
Whereas, Party A and Party B intend to agree to interconnect
Panda's Power Plant (50 MW unit) and Pan-Western's power plant
(50 MW unit) (hereinafter referred to collectively as Power
Plants) to the Beijing-Tianjin-Tangshan Regional Grid of Party A
(hereinafter referred to as the Grid).
Whereas, for administrative convenience, Pan-Western has
appointed Panda as its agent with power-of attorney to represent
and bind Pan-Western on all matters herein or relating to its
Power Plant.
Whereas, in order to ensure the safety as well as the stable
and economic operation of both the Power Plants and the Grid, in
accordance with the Contract Law of the People's Republic of
China, "Regulation for Grid Dispatch Administration" and
implementation method relating thereto, "National Power Supply
and Consumption Regulation", "Grid Dispatch Administrative
Procedure for the Beijing-Tianjin-Tangshan Regional Grid", and
other relevant laws, regulations and rules, Party A and Party B
through friendly consultation and negotiation now sign this
Agreement regarding the interconnection.
Party A and Party B agree as follows:
ARTICLE ONE
DEFINITIONS AND EXPLANATIONS
1.1 "Sub Agreements" shall mean the Interconnection
Dispatch Agreement, and the Electric Energy Purchase and Sales
Agreement.
1.2 "Interconnection Point" shall mean the switch at the
location where the Power Plants and the Grid connect with each
other (the switch shall be specified in the Sub Agreements).
1.3 "Electric Energy Delivered" shall mean the amount of
electricity that Party B's Power Plants deliver to the Grid as
measured by the metering gauge at the Interconnection Point.
1.4 "Price for Electric Energy Delivered" shall mean Party
B's Power Plants weighted average (consisting of daily Trough
Hours, Non-Peak Hours and Peak Hours) electricity price for Party
B's Electric Energy Delivered to Party A's Grid (calculated for
different periods) set forth in the Pricing Document.
1.5 "Sales" shall mean Party B's Electric Energy Delivered
which Party A, based on the Document of promise issued by the
Tangshan Economic Commission, Planning Commission, and Price
Control Bureau, sells in the Tangshan region.
1.6 "Retail Price" shall mean the weighted average of Party
A's selling price for Party B's Electric Energy Delivered by the
Power Plants during different periods.
1.7 "Overdue Payment Interest Rate" shall mean an interest
rate equivalent to 0.05% per day which is applied during the past
due period stipulated in this Agreement or the Sub Agreements.
1.8 "Force Majeure" shall mean any event that is not
foreseeable and for which the damages caused by the event are not
reasonably preventable by the Party declaring Force Majeure and
cannot be overcome such that it adversely affects one Party's
performance of its obligations under this Agreement or the Sub
Agreements. Examples of Force Majeure events are as follows:
(1) Any natural disasters, such as fire, lightning,
earthquakes, damages caused by wind, (i.e., hurricane,
typhoon, etc.) and riot, war, or threat of war;
(2) After this Agreement becomes effective, any
modifications or changes of laws, regulations or rules made
by the Government of the People's Republic of China or any
other local government or their agencies which directly or
indirectly affects either Parties' performance of its
obligations under this Agreement or the Sub Agreements.
1.9 "Breach of Contract" shall be caused by any actions,
taken by any one of the Parties, resulting in non-performance of
obligations under this Agreement or the Sub Agreements.
1.10 "Commercial Operation Date" means the date upon which
Party B's Power Plants start regular delivery of their Electric
Energy Delivered to Party A's Grid which shall be determined by
Party A and Party B after approval of 72 hour full-load testing
operation by the generation units of Party B's Power Plants.
1.11 "Pricing Document" shall mean the document or documents
(issued by the Tangshan Price Control Bureau, Economic Commission
and Planning Commission) determining the Price for Electric
Energy Delivered, Retail Price and principles for adjustment.
1.12 "Trough Hours", "Non-Peak Hours" and "Peak Hours" shall
mean the respective 8 hour periods during each calendar day
designated as "Trough Hours", "Non-Peak Hours" and "Peak Hours"
by the Dispatch Department of the Grid (which designation shall
be made as specified in the Sub Agreements).
1.13 "Regulations" shall mean the Contract Law of the
People's Republic of China, "Regulation for Grid Dispatch
Administration" and implementation method relating thereto,
"National Power Supply and Consumption Regulation," "Grid
Dispatch Administration Procedure for the Beijing-Tangshan
Regional Grid" and other published relevant laws, regulations and
rules in China governing the Parties.
ARTICLE TWO
DOCUMENTS TO BE PROVIDED
Party B shall provide to Party A the following documents and
this shall be the precondition for signing the Sub Agreements:
2.1 The Power Project Proposal Approval (Exhibit 1);
2.2 The Project Feasibility Study and the Feasibility Study
Approval (Exhibit 2);
2.3 The Preliminary Design and the Preliminary Design
Approval (Exhibit 3, which shall be delivered to Party A as
soon as possible after execution of this Agreement).
2.4 The Heat Supply Project Approval (Exhibit 4);
2.5 The Heat Supply Agreements between the Power Plants and
heat users (Exhibit 5);
2.6 The Interconnection Design (first and secondary systems
and the Interconnection Design Approval) (Exhibit 6);
2.7 The document promising the investment for the Power
Plant's transmission and substation systems (Exhibit 7);
2.8 Power Plant's Application for Interconnection (Exhibit
8);
2.9 The Document of Promise for the Power Plant's
Electricity Output (Exhibit 9).
ARTICLE THREE
DISPATCH CONTROL
3.1 Starting from the Commercial Operation Date, Party B's
Power Plants must obey the dispatch control of the Grid and
conform to the peak regulation dispatch practice of the Grid, as
more fully specified in the Sub Agreements.
3.2 Party B shall guarantee that the Power Plants will have
the necessary equipment and control systems reasonably dictated
by the Grid's unified dispatch requirements, as more fully
specified in the Sub Agreements.
ARTICLE FOUR
PURCHASE AND SALE OF ELECTRIC ENERGY DELIVERED
4.1 Party A shall purchase the amount of Electric Energy
Delivered by the Power Plants in accordance with this Agreement
and the Sub Agreements. Party B may not sell any electric energy
directly to third parties without the consent of Party A.
Commencing on the Commercial Operation Date with respect to each
Power Plant, Party A shall purchase from Party B's Power Plants
Electric Energy Delivered, and shall pay Party B for such
Electric Energy Delivered.
4.2 Party A agrees to purchase Electric Energy Delivered
which is generated prior to the Commercial Operation Date for
start-up and testing purposes. Both Party A and Party B agree to
sign separately an agreement on purchase of such electric energy.
ARTICLE FIVE
PRICE OF ELECTRICITY AND ITS ADJUSTMENT
The price for Electric Energy Delivered and the Retail Price
and any adjustments to the Price for Electric Energy Delivered
and the Retail Price shall be set forth in the Pricing Document.
ARTICLE SIX
QUANTITY RECORD FOR ELECTRIC ENERGY DELIVERED
The quantity of Electric Energy Delivered to the Grid shall
be determined by having personnel from both Parties read and
record the meter gauge as more fully specified in the Sub
Agreements.
ARTICLE SEVEN
PAYMENT FOR ELECTRIC ENERGY DELIVERED TO POWER PLANTS
Party A shall, at the request of Party B, supply electric
energy to the Power Plants whenever required by Party B. Party B
shall purchase the electric energy at the then effective utility
retail price as charged by the Grid, which shall be paid to Party
A.
ARTICLE EIGHT
RESPONSIBILITY UNDER A BREACH OF CONTRACT
8.1 If, due to one Party's Breach of Contract, this
Agreement or the Sub Agreements cannot be performed or fully
performed in all material respects, the breaching Party shall
bear responsibility and shall in accordance with the requirements
stipulated in this Agreement, take measures to correct the
situation; if both Parties breach this Agreement or any Sub
Agreements, both Parties shall share the responsibilities for
breaching this Agreement or such Sub Agreements.
8.2 If Party B does not deliver the amount of electric
energy to Party A in accordance with this Agreement or the Sub
Agreements, based on paragraph 1.9 above, Party A shall have the
right to declare that a Breach of Contract has taken place. Party
B shall compensate Party A for all of the actual losses to Party
A caused by the Breach of Contract, which losses shall be limited
only to direct losses by Party A.
8.3 If, due to the fault of Party A, Party B is not able to
deliver the electric energy generated by the Power Plants to
Party A based on this Agreement or the Sub Agreements, in
accordance with paragraph 1.9 above, Party B shall have the right
to declare that a Breach of Contract has taken place. Party A
shall compensate Party B for all of the actual losses to Party B
caused by the Breach of Contract, which losses shall be limited
only to direct losses by Party B.
ARTICLE NINE
FORCE MAJEURE AND OBLIGATION RELIEF
When any one of the Parties is not able to perform or obey
any part of this Agreement or the Sub Agreements due to a Force
Majeure event, the other Party shall neither ask for compensation
from the Party encountering the Force Majeure event nor consider
the action as a Breach of Contract. The Party encountering the
Force Majeure event shall not be excused and released (based on
such force Majeure event) from its obligations to make payments
(existing prior to the occurrence of the Force Majeure event) in
accordance with this Agreement or the Sub Agreements. The Party
requesting to use the Force Majeure clause must notify the other
Party, as early as reasonably possible, of the nature of the
event and the degree of impact on the performance of the
obligations under this Agreement and the Sub Agreements, and
shall take measures to resume, as soon as possible, performance
of its obligations and to limit the damage caused to the other
Party.
ARTICLE TEN
AMENDMENT
Upon the occurrence of any one of the following events, this
Agreement and the Sub Agreements shall be amended:
10.1 Both Parties to this Agreement and the Sub Agreements
through consultation may agree in writing to change or amend this
Agreement and the Sub Agreements. Such amendment shall not
damage the interests of the State and the community.
10.2 In the event of a spin-off or merger of either Party to
this Agreement, the surviving Party or Parties respectively
shall assume the obligations of such Party under this Agreement
and the Sub Agreements.
10.3 In the event that a change in law or regulations
materially adversely affects the rights or obligations of any
Party under this Agreement or the Sub Agreements, the Parties
shall use good faith efforts to negotiate and execute amendments
to this Agreement and the Sub Agreements on a fair and equitable
basis that attempt to minimize the impact of the change in law or
regulations. Each Party agrees that it will not seek or lobby
for any change in law or regulations that adversely affects the
rights or obligations of the other Party hereto.
10.4 If due to an event of Force Majeure (excluding events
covered by paragraph 10.3) performance of a portion of this
Agreement or the Sub Agreements becomes impossible, the Parties
agree to negotiate and execute an amendment to this Agreement or
the Sub Agreements so that the unaffected portion can remain in
effect.
ARTICLE ELEVEN
TERMINATION
11.1 Both Parties to this Agreement, through consultation,
may agree in writing to terminate this Agreement or the Sub
Agreements provided such termination does not damage the State
and public interests.
11.2 Either Party may elect to terminate this Agreement and
the Sub Agreements (by written notice to the other Party) if a
Force Majeure is declared by the other Party and the Party
declaring the Force Majeure does not resume performance hereunder
and thereunder within 12 months after the date of such
declaration.
11.3 If a Breach of Contract as stipulated in paragraph 1.9
above has occurred, and if, within 30 days after written notice
(specifying in detail the nature of the Breach of Contract) is
received by the Breaching Party, the breaching Party neither
makes any payments required hereunder (excluding amounts in good
faith dispute, which shall not be a Breach of Contract hereunder
until such dispute is resolved) nor starts to take corrective
actions (which cure may take a longer period as long as it is
being pursued with diligence), the non-breaching Party shall have
the right to terminate this Agreement (under this circumstance,
the Sub Agreements shall also be terminated).
11.4 Prior to the Commercial Operation Date, in the event
Party B ceases the development of both Power Plants for a period
of at least 12 consecutive months, Party A may terminate this
Agreement and the Sub Agreements by written notice to Party B.
11.5 Except as specifically provided in this Article Eleven
and Article Twelve herein, this Agreement and the Sub Agreements
may not be terminated.
ARTICLE TWELVE
AMENDMENTS AND TERMINATION IN WRITING
Any agreement to amend or terminate this Agreement and the
Sub Agreement must be in writing and signed by both Parties to be
effective. The original agreements as previously amended, shall
remain in effect prior to the execution and delivery of such
written document by both Parties. Any such amendment or
termination of this Agreement shall also automatically amend or
terminate the Sub Agreements as necessary to reflect such action.
ARTICLE THIRTEEN
LIABILITY
13.1 In the event of the occurrence of any Breach of
Contract hereunder, the breaching Party shall not be relieved of
any of its liabilities or obligations hereunder, including its
liability for payment of the amounts in default and for payment
of damages whether becoming due before or after such Breach of
Contract, and the non-breaching party shall have the right to
recover from the breaching Party any and all such amounts.
13.2 The provisions contained in this Article Thirteen shall
survive termination of this Agreement and the Sub Agreements.
ARTICLE FOURTEEN
SCOPE OF THIS AGREEMENT
14.1 After signing this Agreement, both Parties shall sign
the Sub Agreements. This Agreement and the Sub Agreements
together make up the entire agreement between the Parties.
14.2 Anything not mentioned in this Agreement and the Sub
Agreements shall be determined through discussion between the two
Parties as supplemental agreements. Any supplemental agreements,
Sub Agreements and this Agreement shall have the same legal
effect.
ARTICLE FIFTEEN
TERM OF THIS AGREEMENT
This Agreement and the Sub Agreements shall be effective
upon being executed and stamped by both Parties. Unless this
Agreement and Sub Agreements are terminated pursuant to Article
Eleven, this Agreement and the Sub Agreements shall continue in
effect for a period ending on the 20th anniversary of the
Commercial Operation Date (with respect to each Power Plant);
provided, however, that if either Party desires to extend this
Agreement and the Sub Agreements, such Party shall notify the
other Party of its request for extension prior to the 19th
anniversary of the Commercial Operation Date. After receipt of
any such notice, the Parties will meet to determine whether this
Agreement and the Sub Agreements will be extended and the terms
of any such extension.
ARTICLE SIXTEEN
DISPUTE RESOLUTION
16.1 Except as otherwise provided in this Agreement or the
Sub Agreements, any dispute arising out of or in connection with
this Agreement or the Sub Agreements shall be settled through
friendly consultation or conciliation between the Parties
promptly upon the written request of one Party to the other
Party. If the Parties do not reach an amicable solution within
30 days from the notice of such dispute, either Party may submit,
with notice to the other Party, the dispute to the International
Chamber of Commerce's International Court of Arbitration for
binding arbitration to be held in Singapore under the Rules of
Conciliation and Arbitration of the International Chamber of
Commerce (the "ICC"). Except as otherwise provided in this
Agreement or the Sub Agreements, the Parties agree that any
unresolved dispute arising out of or in connection with this
Agreement or the Sub Agreements shall be submitted exclusively to
arbitration. Any settlement and award rendered through such an
arbitration proceeding shall be final and binding upon the
Parties. This Agreement and the Sub Agreements and the rights
and obligations of the Parties shall remain in full force and
effect pending the award in such arbitration proceeding, which
award shall determine whether and when any termination shall
become effective. The Parties agree that the arbitral award may
be enforced against the Parties or their assets wherever they may
be found, whether inside or outside of China, and that a judgment
upon such arbitral award may be entered in any court having
jurisdiction thereof, whether it is inside or outside of China.
16.2 The arbitration shall be conducted and the judgment
shall be rendered in both English and Chinese.
16.3 There shall be three arbitrators. Each Party shall
select one arbitrator within 30 days after giving or receiving
the demand for arbitration. Such arbitrators shall be freely
selected, and the Parties shall not be limited in their selection
to any prescribed list. The International Court of Arbitration
(the "ICA") of the ICC shall select the third arbitrator. If a
Party does not appoint an arbitrator who has consented to
participate within 30 days after the selection of the first
arbitrator, the relevant appointment shall be made by the ICA.
The costs of arbitration shall be borne by the Parties as
determined by the arbitration tribunal, taking into account the
relative merits of the positions of the Parties.
16.4 Each of the Parties is subject to civil and commercial
law and irrevocably agrees that this Agreement and the Sub
Agreements are a commercial rather than public or governmental
activity and neither Party is entitled to claim immunity from
legal proceedings with respect to itself or any of its assets on
the grounds of sovereignty or otherwise under any law or in any
jurisdiction where an action may be brought for the enforcement
of any of the obligations arising under or relating to this
Agreement or the Sub Agreements. Each Party hereby irrevocably
waives rights to immunity it may now have or later acquire with
respect to its obligations arising under or relating to this
Agreement or the Sub Agreements.
ARTICLE SEVENTEEN
GOVERNING LAW
This Agreement and all Sub Agreements are made under and
shall be governed in all respects by and interpreted in
accordance with the laws of the People's Republic of China.
ARTICLE EIGHTEEN
COMMUNICATIONS
For anything related to the rights and obligations of this
Agreement and any Sub Agreements, any one of this Agreement and
any Sub Agreements shall notify in writing the other Party. If
the address and telephone number of one Party are changed, this
party shall inform in writing the other Party of the change
within 10 business days after such change takes place (which new
address shall be the new address for notices addressed to such
Party). The following are the addresses and telephone and
facsimile numbers of both Parties:
(a) In the case of Party A, to:
North China Power Group Company
▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ Tanding
Facsimile No.: 3263377 ext. 2296
Telephone No.: ▇▇▇▇▇▇▇
(b) In the case of Party B, to:
Tangshan Panda Heat and Power Co., Ltd.
▇▇▇▇▇ ▇▇▇▇, Luannan County
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ Xiuchen
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE NINETEEN
DOCUMENT
There shall be six original copies of this Agreement. Party
A shall keep two copies and Party B shall keep four copies.
There shall be copies of this Agreement submitted to and filed
with the relevant authorities of the Government.
ARTICLE TWENTY
ASSIGNMENT
20.1 For the purpose of securing financing, Party B may,
without the consent of Party A, assign or create security over
its rights and interests under or pursuant to (a) this Agreement
and the Sub Agreements, (b) any other agreement related to the
Power Plants, (c) the Power Plants, and (d) the Power Plant
sites. Party A agrees to negotiate in good faith and on a fair
and equitable basis a Consent to Assignment with the lenders to
Party B. Such Consent to Assignment shall provide that any
person or entity which elects to assume any or all of the rights
of Party B under this Agreement and the Sub Agreements shall also
assume all of Party B's obligations hereunder and thereunder.
The Parties acknowledge and agree that any assignment to a
secured party pursuant to any financing agreements shall be
subject to, and shall not relieve either Party of their
performance obligations to each other under, this Agreement or
the Sub Agreements.
20.2 This Agreement and the Sub Agreements shall be binding
upon and shall inure to the benefit of the Parties and their
respective successors and permitted assigns.
ARTICLE TWENTY-ONE
REPRESENTATIONS
21.1 Each Party represents that this Agreement and all Sub
Agreements have been duly authorized, signed and delivered by it,
and are in full force and effect on the date hereof.
21.2 Each Party represents that this Agreement and all Sub
Agreements are valid, legal and binding obligations of it,
enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, moratorium or other
similar laws and general principles of equity.
ARTICLE TWENTY-TWO
OBLIGATIONS OF PARTY B
The obligations of this Agreement and each Sub Agreement
shall be joint and several as between Panda and Pan-Western. For
administrative convenience, Pan-Western hereby irrevocably
appoints Panda as its exclusive agent to operate its Power Plant,
make and receive all payments, administer this Agreement and all
sub Agreements on its behalf, and send and receive notices.
Panda is hereby granted an irrevocable power-of-attorney by Pan-
Western to enter into any agreement or document on behalf of Pan-
Western or to take any action on behalf of Pan-Western that
Panda, in its sole discretion, deems to be necessary or
desirable.
ARTICLE TWENTY-THREE
EXECUTION OF SUB AGREEMENTS
The Parties hereto agree to negotiate and execute, based on
principles of equality and mutual benefit and good faith, the
Electric Energy Purchase and Sales Agreement and the
Interconnection Dispatch Agreement specifying power purchase and
sales relationships and dispatch control relationships between
Party A's Grid and Party B's Power Plants.
ARTICLE TWENTY-FOUR
EXECUTION OF THIS AGREEMENT
This Agreement is executed in Beijing, People's Republic of
China on September 22, 1995.
Legal Representative of Party A Legal Representative of Party B
North China Power Group Company Tangshan Panda Heat and Power
Co., Ltd.
By: _________________________ By: __________________________
Name: Name:
Title: Title:
Tangshan Pan-Western Heat and Power Co., Ltd.,
By: _________________________
Name:
Title:
EXHIBITS TO THE GENERAL INTERCONNECTION AGREEMENT
TABLE OF CONTENTS
EXHIBIT DOCUMENT TAB
No. 1 Project Proposal for Tangshan Panda #682 II-4
Project Proposal for Tangshan Pan-Western #683 II-9
Project Proposal for Tangshan Cayman #684 II-14
Project Proposal for Tangshan Pan-Sino #470 II-19
No. 2 Feasibility Study IV-1
No. 3 Preliminary Design IV-2
Preliminary Design Approval #10 II-37
No. 4 Heat Supply Project Approval #57 II-39
No. 5 Heat Supply Agreements I-10
No. 6 Interconnection Design Approval ##65 II-42
No. 7 Supplemental Agreement I-25
Construction Agreement I-26
Loan Agreement I-27
No. 8 Application for Interconnection Permit #59 II-34
No. 9 Document of Promise #37 II-38
