(1) THE MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA for and on behalf of THE GOVERNMENT OF MONGOLIA ("GOVERNMENT"); and
(2) FIFTH COMBINED HEAT AND POWER PLANT LLC, a limited liability company incorporated under the Laws of Mongolia, with its principal office at 8F, Naiman Zovkhis Building, Seoul Street 21, Ulaanbaatar 14251, Mongolia ("Concessionaire").
A. The Government is encouraging private investment in the heating and electric power sector in Mongolia and in pursuit of this aim, the Government included the CHP5 Project in the list of concession items annexed to Government Resolution 198 of 2010.
(i) design, finance, construct, operate and maintain the Plant;
(ii) undertake all activities required for the implementation of the CHP5 Project; and
(iii) transfer the Plant back to Government at the end of the Term, which is the twenty-fifth (25th) anniversary of the Commercial Operations Date of the Plant,
together, the "Concession".
C. In December 2011, the Government (acting through the SPC) issued a request for proposal inviting pre-qualified persons to submit their proposal for the Concession, such request for proposal ("Request for Proposal") stating that Government’s aim is for the CHP5 Project to:
(i) meet the primary objectives of providing a cost efficient and reliable long term source of heat and power to meet the growing requirements of Ulaanbaatar;
(ii) be developed to the highest international standards based upon a bankable Public- Private Partnership project structure that ensures the generation of the required power and heat to agreed standards throughout the Term; and
(iii) provide a value-for-money solution.
D. In response to the Request for Proposal, a consortium comprising International Power plc, Sojitz Corporation, POSCO ENERGY Co. Ltd. and Newcom LLC (the "Consortium" and each a "Member of the Consortium") submitted a proposal dated 7 May 2012 which included a technical proposal, a financial proposal and proposed amendments to the drafts of the Concession Agreement and the other CHP5 Project Agreements included by the Government in the Request for Proposal.
E. The Government evaluated the proposals received from all bidders (including the Consortium’s proposal) and on 5 July 2012, the Government selected the Consortium as the preferred bidder.
F. From September 2012, the powers and responsibilities of the SPC with respect to the CHP5 Project were transferred to a joint working group which was established by the Ministry of Economic Development of Mongolia ("MED") and the Ministry of Energy to take responsibility, on behalf of MED and the Ministry of Energy, for the process of selecting the Concessionaire and finalising this Agreement and the other CHP5 Project Agreements.
G. Following the decision to change the location of the site for the Project to the Site (as stated in the Government’s Resolution 191 relating to the Government Cabinet meeting held on 22 December 2012), the Government sought clarifications on the proposals submitted by the bidders on 7 May 2012, and accordingly on 25 January 2013, the Government invited such bidders to each submit a revised proposal by way of a best and final offer which was submitted by the Consortium on 4 February 2013.
H. The Government and the Consortium met on 5 February 2013 to discuss the Consortium’s proposal set out in the Consortium’s best and final offer and recorded the discussions in the Minutes of Meeting.
I. The MED, the Ministry of Energy and the Consortium signed a memorandum of understanding on 26 August 2013 ("MOU") which, based on the Consortium’s best and final offer dated 4 February 2013 and the Minutes of Meeting, confirms the Consortium’s selection as the preferred bidder for the Concession.
The following capitalised terms when used in this Agreement including the Recitals above shall, unless the context otherwise requires, have the meanings stated below:
"Abandonment" means the voluntary cessation of construction or operation of the Plant (or a substantial part thereof) and the withdrawal of all or substantially all personnel (other than in accordance with the EPC Contract and/or Prudent Industry Practices) by the Concessionaire from the Site for reasons other than:
(a) Power Purchaser Event of Default;
(b) Government Event of Default ;
(c) Heat Purchaser Event of Default;
(d) Force Majeure Event;
(e) termination of the Land Use Agreement by the counterparty of the Concessionaire under the Land Use Agreement;
(f) termination of the Water Purchase Agreement by the Water Supplier; or
(g) termination of any Coal Supply Agreement by the relevant Coal Supplier;
"Additional Facilities" means any facilities that the Parties mutually agree may have to be provided by the Concessionaire and/or included as part of the Plant, which may include:
(a) facilities to protect the Site against flooding (including dams, dikes, diverting channels);
(b) facilities to compensate material stability issues on the Site impacting on the foundations of the Plant (including works to compensate permafrost conditions);
(c) change in technology used for the Plant cooling systems (including a change to air cooled condensers instead of cooling towers due to the risk of insufficient water available at the Site);
(d) interconnection facilities (either air insulated or gas insulated switchyard);
(e) Plant Ash handling facilities for transportation of such ash by railway;
(f) remote Plant Ash yard and related facilities (including unloading and water treatment facilities);
(g) main recirculation pumps (district heating side) and (if practicable) make-up water systems for the Heat Network; and
(h) railway interconnection facilities at and immediately outside the Plant boundaries;
"Affiliate" means any Person that directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, another Person;
"Agreement" means this Concession Agreement, together with all clauses, recitals and schedules, dated as of the date specified on the first page above, as may be amended by the Parties from time to time in accordance with this Agreement;
"Available Capacity" has the meaning given to it in the Power Purchase Agreement;
"Back-Up Metering System" has the meaning given to it in the Power Purchase Agreement;
"Baganuur Mine" means a coal mine located approximately 130 kilometres east of Ulaanbaatar in Baganuur District in Ulaanbaatar, Mongolia;
"Budget Law" means the Budget Law of Mongolia of 23 December 2011;
"Business Day" means any Day on which banks are open for business in Mongolia other than a Saturday or Sunday;
"Capacity Payments" has the meaning given to it in the Power Purchase Agreement; "Capacity Test" has the meaning given to it in the Power Purchase Agreement; "Change in Law" means:
(a) adoption, promulgation, repeal, modification or interpretation after the Cut-off Date by any Public Sector Entity of any Law of Mongolia (including a final, binding and non-appealable decision of any Public Sector Entity) including any change or amendment to the (i) Grid Code in existence at the Cut-off Date and (ii) ERC Waiver;
(b) imposition by a Relevant Authority of any term or condition in connection with the issuance, renewal, extension, replacement or modification of any Concessionaire Authorisation after the Cut-off Date; or
(c) imposition by a Relevant Authority of any additional Concessionaire Authorisations not required under the Laws of Mongolia as of the Cut-off Date,
that establishes either a change in cost or revenue due to a requirement for the activities required for the implementation of the CHP5 Project that is more or less restrictive than the most, or least restrictive requirements:
(i) in effect as of the Cut-off Date;
(ii) specified in any applications, or other documents filed in connection with such applications, for any Concessionaire Authorisation filed by the Concessionaire on or before the Commercial Operations Date for Unit 1; or
(iii) agreed to by the Concessionaire in any CHP5 Project Agreement, provided that:
(A) any change to the tariff formulae under the Power Purchase Agreement, the Heat Purchase Agreement and this Agreement for the sale of electrical energy (including Available Capacity and Net Electrical Output) and heat (including Heat Output) imposed by any Public Sector Entity (including the ERC) shall in any event be deemed to be a Change in Law;
(B) the adoption or imposition of any Laws of Mongolia, condition with respect to a Concessionaire Authorisation or additional Concessionaire Authorisation described in items (a), (b) and (c) above that is foreseeable at the Cut-off Date and set out in Schedule 13, shall not be a Change in Law; and
(C) the introduction of the Investment Law dated 3 October 2013 shall not be a Change in Law;
"CHP Mode" has the meaning given to it in the Power Purchase Agreement;
"CHP5 Financing Documents" means loan and/or facility agreements, all related notes, indentures, hedging agreements, security agreements, guarantees and documents, agreements or other instruments providing security to the Lenders (including consents and acknowledgements of assignment and tripartite financial agreements in respect of documents assigned as security to the Lenders and other security agreements) and other documents signed or to be signed by the Concessionaire with the Lenders in relation to the CHP5 Project, including the construction and permanent financing (including any refinancing) of the Plant (or any part thereof) and implementation of the CHP5 Project, as such agreements, instruments, guarantees and documents may be amended from time to time, provided, however, that the term "CHP5 Financing Documents" shall not include any documents, agreements or other instruments in relation to the financing of equity, including equity bridge loan agreements;
"CHP5 Project" means all activities required for the development and operation of the Plant, including the:
(a) possession of the Plant;
(b) design, engineering, financing, refinancing, construction, procurement, permitting and testing of the Plant and Commissioning;
(c) procurement, import, export (for repair, maintenance or refurbishment) and contracting for goods, equipment and services for the Plant;
(d) the insuring, operation, maintenance and repair of the Plant;
(e) the use of Coal as fuel for the Plant, the sale of Available Capacity and the generation and sale of Net Electrical Output and Net Heat Output; and
(f) the recruitment, employment and training of staff for the Plant;
"CHP5 Project Agreements" means: (a) this Agreement, (b) Power Purchase Agreement, (c) Heat Purchase Agreement, (d) Water Purchase Agreement, (e) Land Use Agreement, (f) Coal Supply Agreements, (g) EPC Contract, and (h) such other agreements signed in connection with the CHP5 Project as the Parties may agree;
"Closing Security" means the unconditional, irrevocable, on-demand bank guarantee or letter of credit (and any replacement guarantee or letter of credit) in favour of the Government in a form reasonably acceptable to the Government on or before signing of this Agreement and issued by a financial institution acceptable to the Government in an amount of [redacted information], to secure the Concessionaire's obligation under Clause 2.2 and the Concessionaire’s obligation to achieve the Effective Date and otherwise satisfy the conditions
"Coal" means coal to be used by the Plant which shall be supplied by the Coal Suppliers;
"Coal Suppliers" means the Baganuur Mine and the Shivee-Ovoo Mine, and any other Persons the Parties agree may supply Coal to the Plant ;
"Coal Supply Agreements" means the agreements between the Coal Suppliers and the Concessionaire for the long term supply of Coal to be used by the Plant as approved by the Government in accordance with this Agreement and as may be amended in accordance with its terms by the parties thereto, subject to the approval of the Government;
"Commercial Operations Date" means, in respect of any Unit, the Day immediately following the date on which such Unit is Commissioned (which, in the case of Unit 3 shall also be the date on which the Plant is Commissioned and "Commercial Operations Date for the Plant" shall be construed accordingly);
"Commercial Operations Period" means the period beginning on the Commercial Operations Date for Unit 1 and ending on the last Day of the Term;
"Commissioning" means for each Unit, the undertaking of the Commissioning Tests; "Commissioning Tests" has the meaning given to it in the Power Purchase Agreement; "Compensation Amounts" means the compensation amounts specified in Schedule 2; "Concession" has the meaning given in Recital B;
"Concessionaire" means the Party named at paragraph (2) on page 1 of this Agreement and its permitted successors and permitted assigns and any permitted transferee;
"Concessionaire Authorisations" means all approvals, consents, authorisations, notifications, concessions, acknowledgements, licences (including the Generation Licences and any construction licences), permits, decisions or similar items which is or are issued by a Relevant Authority and which the Concessionaire or any of its Contractors is required to obtain from any Relevant Authority and thereafter to continue to fulfil its obligations under this Agreement which for the avoidance of doubt shall not include the authorisations and approvals set out in Schedule 1, Part 1;
"Concessionaire’s BAFO" means the document annexed at Schedule 1, Part 1, as amended by the Minutes of Meeting, and accepted under the MOU;
"Concessionaire Interconnection Facilities" means the Concessionaire’s interconnection facilities provided under the Power Purchase Agreement and the Heat Purchase Agreement;
"Concessionaire Interconnection Works" means the Concessionaire’s interconnection works provided under the Power Purchase Agreement and the Heat Purchase Agreement;
"Consequential Loss" means in relation to this Agreement (including in respect of any claim made under or in connection with this Agreement), any indirect loss (including any costs, loss of production, loss of profit, loss of revenue, loss of contract, loss of goodwill, liability under
other agreements or to third parties suffered or incurred), whether or not the Party responsible knew (or ought to have known) that such indirect loss would likely be suffered;
"Construction Start Date" means the date on which the Concessionaire authorises the EPC Contractor to commence the EPC Works in accordance with the EPC Contract as evidenced by a copy of the unconditional notice to proceed, such copy to be provided by the Concessionaire to the Power Purchaser;
"Contractors" means any of the Concessionaire's direct contractors or suppliers for the CHP5 Project and any of their direct sub-contractors integrally involved in the CHP5 Project, including the Coal Suppliers, EPC Contractor and (if any) O&M Contractor;
"Control" means with respect to a Person that is a corporation, the ownership, directly or indirectly, of more than fifty (50) per cent of the voting securities of such Person, and, with respect to a Person that is not a corporation, the power to direct the management or policies of such Person, whether by operation of law, by contract, or otherwise, and "Controls" and "Controlled" shall be construed accordingly;
"Customs" means the General Customs Authority of Mongolia and its relevant customs offices responsible for the collection of Custom Duties and the release of plant, machinery and equipment following import into or export out of Mongolia;
"Custom Duties" means all Taxes on or relating to the import into or export from Mongolia of plant, machinery and equipment levied by the Government;
"Cut-off Date" means 5 February 2013 or the latest date of agreement between the Parties made from time to time before the Effective Date in respect of any changes to the tariff set out in the Concessionaire’s BAFO (or any subsequent document recording the tariff agreed between the Parties), such agreement to be the latest date of:
(i) any amendment to this Agreement; or
(ii) the Power Purchase Agreement or Heat Purchase Agreement (or any subsequent amendments to such agreements), which records such changes to the tariff;
"Day" means a period of twenty-four (24) hours, commencing at 00:00 of each day, and
"Daily" shall be construed accordingly;
"Delayed Payment Rate" means the Bank of Mongolia policy rate per annum published from time to time and applicable to each day of delay plus three per cent (3%) calculated for the actual number of Days which the relevant amount remains unpaid on the basis of a three hundred and sixty five (365) day year;
"Designated Bank Account" shall mean the bank account in the name of the ADB Account B, Bank account number 021080245, Receiver SWIFT FRNYUS33, Beneficiary SWIFT ASDBPHMM and FEDWIRE system via Type Code 15;
"Development Costs" means the amount of [redacted information] in respect of the costs of the Government relating to the preparation of the tender for and the implementation of the
CHP Project (including the costs, fees and expenses of financial, engineering, legal and other consultants engaged directly or indirectly by the Government);
"Dispatch" has the meaning given to it in the Power Purchase Agreement or the Heat Purchase Agreement, as applicable;
"Dispatched and Delivered Net Electrical Output" has the meaning given to it in the Power Purchase Agreement;
"Dispute" means any dispute, disagreement or difference arising under, in connection with or relating to this Agreement, including any dispute or difference concerning the existence, legality, validity or enforceability of this Agreement or any provision hereof, or the obligations or performance of a Party under any provision hereof;
"Dollars" or "$" and "US$" means the lawful currency of the United States of America;
"Environmental Expert" means a reputable environmental consulting firm selected by the Concessionaire and agreed to by the Government;
"Environmental Liabilities" means all Loss (including reasonable costs of investigation, testing, containment, removal, clean-up, abatement or remediation, whether or not quantified in an amount) relating to either (i) the presence in the environment of Hazardous Materials attributable to the Plant or the Site, or (ii) the performance of any obligation under any CHP5 Project Agreement, in violation of any Laws of Mongolia and/or any Environmental Standards;
"Environmental Standards" means, collectively, (i) World Bank Environmental Guidelines and (ii) all environmental guidelines and occupational health and safety standards promulgated by the Government or any other Public Sector Entity, including any environmental impact assessment or study and any related environmental management plan in respect of the CHP5 Project;
"EPC Contract" means the agreement or agreements to be signed by the Concessionaire and the EPC Contractor for the EPC Works or any part thereof as such agreement may, subject to this Agreement, be amended by the parties thereto;
"EPC Works" has the meaning given to it in the Power Purchase Agreement;
"ERC" means the Energy Regulatory Commission of Mongolia and any successor or substitute Public Sector Entity with power and jurisdiction over the electricity and power generation and distribution sectors in Mongolia;
"ERC Waiver" has the meaning given to it in the Power Purchase Agreement;
"Feasibility Studies" means the feasibility studies undertaken or to be undertaken by the Concessionaire as described in the Concessionaire’s BAFO and more particularly set out in Schedule 12Error! Reference source not found.;
"Foreign Currency" means any legal currency other than Togrogs;
"Generation Licences" means the licences issued by the ERC permitting the generation of heat and electricity by the Concessionaire from the Plant in accordance with the terms and conditions of each such licence;
"Government" means the Government of Mongolia;
"Government Bank Account" shall mean the bank account in the name of the MED, Beneficiary's bank Treasury fund, Beneficiary name Ministry of Finance, Bank account number 900036409;
"Grid Code" has the meaning given to it in the Power Purchase Agreement;
"Grid System" has the meaning given to it in the Power Purchase Agreement;
"Guaranteed Revenues" means all payments required to be made to the Concessionaire by the Power Purchaser and the Heat Purchaser under the Power Purchase Agreement and the Heat Purchase Agreement, respectively, as and when due thereunder;
"Hazardous Material" means any pollutant, contaminant, solid waste, hydrocarbon product, toxic or hazardous substance or waste, or any flammable, explosive or radioactive materials, in each case regulated under or subject to any Laws of Mongolia;
"Heat Network" means the district heating facilities owned by the Heat Purchaser for the transmission and distribution of heat;
"Heat Output" has the meaning given to it in the Heat Purchase Agreement;
"Heat Purchase Agreement" means the Heat Purchase Agreement in the form annexed at Schedule 6Error! Reference source not found., Part 2, to be signed by the Heat Purchaser and the Concessionaire for the purchase and sale of heat generated by the Plant, as may be amended (subject to this Agreement) in accordance with its terms by the parties thereto;
"Heat Purchaser" means the Ulaanbaatar Heat Network State-Owned Joint Stock Company, a joint-stock company incorporated under the Laws of Mongolia, with its principal office located at Ulaanbaatar, Mongolia and its successors and permitted assigns;
"Insolvency Event" means any of the Concessionaire, the Power Purchaser or the Heat Purchaser making a composition or arrangement with creditors or becoming bankrupt or insolvent or effecting a transfer of property to the creditors' advantage or signing a fiduciary agreement in the creditors' favour or being a company:
(a) making a proposal for a voluntary arrangement for a composition of debts or scheme of arrangement to be approved in accordance with relevant legislation; or
(b) having a provisional liquidator appointed; or
(c) having a winding up order made; or
(d) passing a resolution for voluntary winding up; or
(e) having an administrator or administrative receiver appointed; or
(f) having an application made for an inventory of its assets to be taken as part of, or as precursor to, any of the circumstances above; or
(g) being unable to pay its debts;
"Investor" means the holder, from time to time of Ordinary Share Capital, as well as the holders of any securities that are convertible at the option of the holder into Ordinary Share Capital;
"Land Use Agreement" means the land use agreement in the form annexed at Schedule 6, Part 4, to be signed by the counterparty to the Concessionaire under the Land Use Agreement (as lessor) and the Concessionaire (as lessee) in respect of the Site, as may be amended by the parties thereto from time to time;
"Lapse of Concessionaire Authorisation" means any Concessionaire Authorisation:
(a) ceasing to remain in full force and effect or not being renewed or replaced within the time period prescribed by the applicable Laws of Mongolia upon application in the Prescribed Form and payment of all Prescribed Fees having been properly and timely made and diligently pursued in accordance with the applicable Laws of Mongolia;
(b) not being issued upon application in the Prescribed Form and payment of all fees required under the applicable Laws of Mongolia having been properly and timely made and diligently pursued; or
(c) being made subject, upon renewal, amendment or otherwise, to any terms or conditions that materially and adversely affect a Party's ability to perform its obligations under any CHP5 Project Agreements notwithstanding such Party's compliance with the applicable procedural and substantive requirements of such Concessionaire Authorisation;
"Laws of Mongolia" means the national laws of Mongolia, international treaties ratified or acceded by Mongolia, the interpretation of laws made by the Supreme Court of Mongolia and all orders, resolutions, ordinances, rules, by-laws, regulations, procedures, guidelines, methodologies, decrees, judicial decisions, other legislative, executive or judicial normative acts, or other directives issued by any Public Sector Entity under the foregoing, in force from time to time;
"Lenders" means the financial institutions that are party to the CHP5 Financing Documents or subsequent financial institutions that become parties to the CHP5 Financing Documents as notified to the Government, together with their respective successors and assigns;
"Lien" means any mortgage, pledge, hypothecation, liens, security interests, conditional and instalment sales agreement, encumbrance, claim or charge of any kind;
"Long Stop Date" means [redacted information];
"Loss" means any loss, damage, liability, payment or obligation (excluding any Consequential Loss) and all costs and expenses incurred in connection therewith (including reasonable legal fees);
"MED" has the meaning given in Recital F;
"Member of the Consortium" has the meaning given in Recital D;
"Metering System" has the meaning given to it in the Power Purchase Agreement;
"Minimum Indemnification Amount" means the amount equal to US$200,000 (two hundred thousand United States Dollars);
"Ministry of Justice" means the Ministry of Justice of Mongolia;
“Minutes of Meeting” means the minutes of the meeting dated 5 February 2013 between the Concessionaire and the Government, annexed at Schedule 11, Part 2;
"Month" means a calendar month according to the Gregorian calendar, beginning at 24:00 on the last Day of the preceding month and ending at 24:00 on the last Day of that month and Monthly shall be construed accordingly;
"MW" means megawatt or one million (1,000,000) Watts;
"Net Electrical Output" has the meaning given to it in the Power Purchase Agreement; "Net Heat Output" has the meaning given to it in the Heat Purchase Agreement; "Notices" has the meaning given to it in Clause 17.1.1;
"O&M Agreement" means the agreement (if any) to be signed by the Concessionaire and the O&M Contractor for the operation and maintenance of the Plant, as may be amended (subject to this Agreement) in accordance with its terms by the parties thereto;
"Offtaker" means the Power Purchaser or the Heat Purchaser, and "Offtakers" means both of them;
"Ordinary Share Capital" means any shares of the Concessionaire with voting or other rights of management and control and any securities of the Concessionaire that are convertible into such shares at the option of the holder;
"Party" means each of the Government and the Concessionaire, and "Parties" means both of them;
"Performance Security" means an unconditional, irrevocable and transferable on demand bank guarantee in favour of the Government, the Power Purchaser and the Heat Purchaser substantially in the form set out in Schedule 5 and which is issued by a bank or other financial institution which is reasonably acceptable to the Government, the Power Purchaser and the Heat Purchaser as security for performance of the Concessionaire's obligations under the Power Purchase Agreement, the Heat Purchase Agreement and this Agreement in the amount of [redacted information], including any replacement of such guarantee;
"Person" means any person, firm, company, corporation, society, government, state-owned stock company, state or agency of a state (including any Public Sector Entity), or any association or partnership (whether or not having separate legal personality) of two or more of the foregoing;
"Plant" means the coal-fired combined heat and power generation plant located on the Site together with the Concessionaire Interconnection Facilities having a design gross power generation capacity in Condensing Mode of approximately 450 MW (gross) comprising the three (3) Units each with an electrical generation capacity of 135 MW in CHP Mode (at the Reference Condition) and design heat supply capacity in CHP Mode of 587 MWt to be designed financed, built, operated and maintained by the Concessionaire during the Term, whether completed or at any stage in its construction, including the design documents, all energy and heat producing equipment and auxiliary equipment, heat recovery steam generators and associated equipment, water transportation and treatment systems, the Metering System, Back-up Metering System and all spare parts and consumables (including Coal) stored at the Site, as further described in and complying with the Technical Specifications;
"Plant Ash" means the fly ash, bottom ash or other ash produced from the operation of the Plant (or any part thereof);
"Power Purchase Agreement" means the agreement in the form annexed at Schedule 6, Part 1, to be signed by the Power Purchaser and the Concessionaire for the purchase and sale of electrical energy and generating capacity from the Plant, as may be amended (subject to this Agreement) in accordance with its terms by the parties thereto;
"Power Purchaser" means the National Electricity Transmission Grid Joint Stock Company, a state-owned joint-stock company incorporated under the Laws of Mongolia, and any of its permitted successors and assigns;
"Power Purchaser Interconnection Facilities" has the meaning given to it in the Power Purchase Agreement;
"Prescribed Fee" means with respect to any Concessionaire Authorisation, the charge or fee, if any, prescribed by the Laws of Mongolia;
"Prescribed Form" means with respect to any Concessionaire Authorisation, the form, if any, (including all information and detail) prescribed by the Laws of Mongolia for the application for, or renewal of, such Concessionaire Authorisation;
"Protected Assets" means the Grid System, Heat Network, the electric generation assets and equipment owned by any Public Sector Entity (excluding the Plant), the electric distribution assets and such other assets agreed by the Parties;
"Prudent Industry Practices" means the exercise of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected in the heat and power generation industry generally from a prudent and experienced generator and operator engaged in the same or similar type of undertaking or activity under the same or similar circumstances and conditions to those pertaining in Mongolia and generally recognised by generators and operators internationally and, in doing so in the general conduct of its undertaking, seeking, in good faith, to perform its contractual obligations and complying with applicable laws, standards and regulations, including those pertaining to health, safety and the environment;
"Public Sector Entity" means:
(a) the Government, the Parliament of Mongolia, any subdivision of either or any local or municipal governmental authority with jurisdiction over the Concessionaire or the CHP5 Project;
(b) any department, authority, instrumentality, agency, or judicial body of any entity set out in (a) above;
(c) courts and tribunals in Mongolia;
(d) corporate entities which are wholly-owned by the Government; or
(e) any commission or regulatory agency, authority or body having jurisdiction over the Concessionaire, or the CHP5 Project;
"Reference Capital Cost Component" has the meaning given to it in Schedule 1 of the Power Purchase Agreement;
"Relevant Authority" means a Public Sector Entity from which a Concessionaire Authorisation is to be obtained or which otherwise has jurisdiction under the Laws of Mongolia with respect to the CHP5 Project, the Power Purchaser, the Heat Purchaser or this Agreement (as the case may be);
"Related Dispute" means any dispute arising under or in connection with any of the CHP5 Project Agreements that is related to any Dispute between the Parties under this Agreement;
"Required Commercial Operations Date" means in respect of:
(a) Unit 1, [redacted information];
(b) Unit 2, [redacted information]; and
(c) Unit 3, [redacted information],
from the Effective Date, as such dates may be extended under this Agreement or the Power Purchase Agreement;
"Required Effective Date" means [redacted information];
"Scheduled Outage" has a the meaning given to it in the Power Purchase Agreement;
"Shivee-Ovoo Mine" means a coal mine located 260 kilometers of south-east of Ulaanbaatar in Shiveegovi Soum in Govisumber Aimag, Mongolia;
"Site" has the meaning given to it in the Land Use Agreement;
"Site Access Date" means [redacted information];
"Site Baseline Report" means the report on the conditions of the Site produced by the Environmental Expert which describes the geological, geotechnical and environmental condition of the Site and highlights all material matters, including any Environmental Liabilities;
"SPC" has the meaning given in Recital B;
"Stabilisation Certificate" means the stabilisation certificate or similarly entitled document under the Investment Law of Mongolia dated 3 October 2013;
"System Operator" has the meaning given to it in the Power Purchase Agreement;
"Tax" means any tax, charge, impost, tariff, duty, basis for assessing taxes (including the rates of or periods for depreciation of assets for tax assessment purposes), fiscal concession or allowance imposed by or payable to a Public Sector Entity, including all direct or indirect, national or local taxes, charges, fees and payments as described in Article 5 of the General Taxation law of Mongolia and any value added tax, sales tax, water or environmental or energy tax, import or customs duty, withholding tax, excise tax, tax on Foreign Currency or foreign exchange transactions or property tax, but shall not include any fee or charge payable to a Public Sector Entity as consideration for goods or services provided by such Public Sector Entity in relation to a commercial activity carried out by such Public Sector Entity;
"Technical Specifications" means the technical requirements and specifications set out in this Agreement (including the document annexed at Schedule 3), together with the technical requirements set out in the Power Purchase Agreement and the Heat Purchase Agreement (including the Technical Specifications as defined in such agreements);
(a) all sales, value added, transfer or property taxes and any other costs imposed on the Concessionaire by any Public Sector Entity as a result of termination of this Agreement, transfer of the Concessionaire’s right, title and interest in the CHP5 Project to Government and payment of any Compensation Amount; and
(b) where termination of this Agreement occurs prior to the Commercial Operations Date for the Plant, all amounts outstanding and payable by the Concessionaire to the EPC Contractor but only (i) to the extent that the EPC Contract is terminated, and (ii) with respect to work completed by the EPC Contractor in accordance with the EPC Contract and not yet paid for by the Concessionaire and for which no amount under the CHP5 Financing Documents has been disbursed by the Lenders or equity commitments, individually and in total, of the Members of the Consortium or their Affiliates has been provided;
"Tripartite Financial Agreement" means the tripartite agreement to be signed under Article
28.2 of the Concessions Law between the Government, the Concessionaire and the Lenders (or their agent or trustee) in the agreed form under English law, such form to be consistent with the form required by international financial institutions for a project financing of a project similar to the CHP5 Project;
"Unit" has the meaning given to it in the Power Purchase Agreement;
"Unit 1" means the first Unit to successfully complete the Commissioning Tests; "Unit 2" means the second Unit to successfully complete the Commissioning Tests; "Unit 3" means the third Unit to successfully complete the Commissioning Tests;
"Water Purchase Agreement" means the agreement in the form annexed at Schedule 6, Part 3, to be entered into between the Water Supplier and the Concessionaire in respect of the water requirements of the Plant throughout the Term, as may be amended (subject to this Agreement) in accordance with its terms by the parties thereto;
"Water Supplier" means the counterparty to the Water Purchase Agreement, and its legal successors;
"World Bank Environmental Guidelines" means the latest published World Bank Group’s Environmental, Health and Safety Guidelines as in effect at the Cut-off Date; and
"Year" means each twelve (12) Month period commencing on 24:00 on the Commercial Operations Date for the Plant and ending on the Day before the anniversary thereof.
1.2 Rules of Interpretation
In this Agreement:
1.2.1 the headings are for convenience only and shall be ignored in construing this Agreement;
1.2.2 other than where the context determines otherwise, the singular includes the plural and vice versa;
1.2.3 references to Clauses, Recitals and Schedules are, unless otherwise specified references to clauses, recitals and schedules to this Agreement and references to a clause or Part in a schedule shall be a clause, paragraph or part to the respective schedules unless otherwise specified;
1.2.4 unless otherwise provided:
184.108.40.206 references to time are references to time in Ulaanbaatar, Mongolia; and
220.127.116.11 references to a time of Day are, unless otherwise stated, predicated on the 24 hour timing convention;
1.2.5 unless otherwise provided, any notice, consent, approval, waiver or direction permitted or required to be given under this Agreement shall be given in writing;
1.2.6 unless otherwise provided, whenever a consent or approval is required by a Party from the other Party, such consent or approval shall not be unreasonably withheld or delayed;
1.2.7 in carrying out its obligations and duties under this Agreement, each Party shall have an implied obligation of good faith;
1.2.8 the words "include," and "including" shall not be construed as limiting the generality of preceding words;
1.2.12 a reference to "judgment" (other than the "judgment" of a Party) includes any order, injunction, determination or award in any jurisdiction; and
1.2.13 a reference to a "law" includes civil, common or customary law and any constitutional decree, judgement, legislation, order, ordinance, regulation, statute, treaty or other legislative measure, in each case of any jurisdiction (and "lawful" and "unlawful" shall be construed accordingly).
waiver (by the Lenders) of the conditions precedent for the initial availability of funds under the CHP5 Financing Documents (except for those conditions precedent that are dependent on the Effective Date being achieved) and that such funds are available for disbursement;
3.1 Grant of Concession and Implementation of CHP5 Project
3.1.1 The Government grants a concession to the Concessionaire to undertake the CHP5 Project in accordance with the terms of this Agreement.
3.1.2 The Concessionaire shall design, finance, construct, Commission, operate and maintain the Plant in accordance with all applicable Laws of Mongolia, the Concessionaire Authorisations, the Environmental Standards, this Agreement, and the other CHP5 Project Agreements.
3.1.6 The Concessionaire shall be entitled to compensation with respect to the Concession and the CHP5 Project as provided in this Agreement, the Power Purchase Agreement and the Heat Purchase Agreement.
3.1.7 The Concessionaire shall meet the minimum capital and other requirements of the Laws of Mongolia with respect to an entity of its type. At the date of this Agreement, the amount of paid in capital of the Concessionaire is [redacted information].
(45) Days before the Closing Security End Date procure the issue of a replacement Closing Security with an expiry date no earlier than the Closing Security End Date from the same issuer (and in the same form) as the Closing Security to be replaced or from another financial institution acceptable to the Government.
3.2.3 The Government shall return the Closing Security to the Concessionaire no later than twenty (20) Business Days after the earlier to occur of the Effective Date and the Closing Security End Date.
18.104.22.168 the Concessionaire is liable to pay any amounts to the Government, the Power Purchaser or the Heat Purchaser, and the Concessionaire fails to make any such payments when due; or
22.214.171.124 each of the Government, the Power Purchaser or the Heat Purchaser is entitled to claim under the Performance Security,
the Government shall be entitled to draw or collect such amounts (including acting on behalf of the Power Purchaser and Heat Purchaser in respect of any such amounts which the Power Purchaser and/or Heat Purchaser is entitled to claim), from the Performance Security upon presentation of a certificate of an authorized officer of the Government stating that amounts shown in the invoice accompanying the certificate are due and payable by the Concessionaire to the Government, the Power Purchaser or the Heat Purchaser under this Agreement, the Power Purchase Agreement or the Heat Purchase Agreement, respectively, provided that receipt of such amounts by the Government which the Power Purchaser or Heat Purchaser is entitled to claim under the Power Purchase Agreement or Heat Purchase Agreement, respectively, shall be a valid discharge of the Concessionaire's liability in respect of any such claim but only to the extent of such amount received by the Government.
Upon the signing of this Agreement, the Parties shall set up a task force of members comprised of representatives of each Party who shall have no authority or power individually or collectively to make decisions or bind the Parties but who will establish facts to assist the Parties to resolve matters relating to the CHP5 Project that the Parties agree to refer to the task force (the "CHP5 Task Force").
3.5.1 The Parties agree that an effective arrangement for managing the relationship between them in relation to the CHP5 Project would be beneficial to both Parties provided that such arrangement does not create additional obligations on either Party or prevent a Party from exercising its rights under this Agreement.
3.5.2 The CHP5 Task Force shall explore the most appropriate arrangement for managing the relationship between the Parties and any arrangement agreed between the Parties shall be recorded in minutes of meeting of the CHP5 Task Force.
126.96.36.199 provide evidence demonstrating its compliance with its obligation to apply for, diligently pursue, procure the issue of and following receipt maintain the Concessionaire Authorisations (or cause its Contractors to procure and maintain, where applicable) together with a written explanation as to why it reasonably considers such Concessionaire Authorisation should have been issued or renewed (as applicable) on or before the date of such request;
188.8.131.52 notwithstanding the making of any such request, continue diligently to pursue the issue or renewal of any such Concessionaire Authorisation;
184.108.40.206 at the same time as it submits its request, disclose to the Government the full details of the actions which the Concessionaire has, taken and will continue to take to procure the issue of or renew such Concessionaire Authorisation;
220.127.116.11 provide the Government with such assistance and information as the Government may reasonably request; and
4.2.1 The Concessionaire shall provide to the Government, at least Monthly prior to the Commercial Operations Date for the Plant, and at least quarterly thereafter, reports:
18.104.22.168 listing its schedule for submitting Concessionaire Authorisation applications, including any renewal application;
22.214.171.124 on the status of any Concessionaire Authorisation applications then outstanding, notifications of the granting or denial of the issue on renewal of any Concessionaire Authorisation;
126.96.36.199 of notifications of any violations of any Concessionaire Authorisation.
4.2.2 Each report shall include copies of all applications and notifications referred to in the report not previously provided and shall summarise any problems regarding any Concessionaire Authorisation (or application therefor) that may materially affect the Concessionaire's obligations under this Agreement or any other CHP5 Project Agreement.
4.3 Notice of a Lapse of Concessionaire Authorisation
5.2.1 The Concessionaire shall commence and prosecute, or shall procure the commencement and prosecution of, the EPC Works as soon as reasonably practicable following the Effective Date.
5.2.2 The Concessionaire shall ensure that the EPC Works shall be carried out with all proper skill and care and in all material respects in accordance with the Technical Specifications, the Laws of Mongolia (including the Concessionaire Authorisations), the Environmental Standards and Prudent Industry Practices, so that the Plant has a useful life of not less than the Term.
5.2.3 The Concessionaire shall carry out and complete the EPC Works such that each Commercial Operations Date occurs on or before its corresponding Required Commercial Operations Date.
5.2.4 The Concessionaire shall cause all equipment which is permanently installed by the EPC Contractor as part of the Plant to be new and unused at the time of such installation and to otherwise comply with the requirements of Schedule 3 (Technical Specifications).
5.2.5 The Concessionaire shall at all times keep the Plant free and clear of all Liens except for Liens arising by operation of law.
5.3.2 Notwithstanding anything contained in this Clause 5 to the contrary, the Concessionaire shall be entitled to engage its own personnel and operate the Plant (or any part thereof) or, if the O&M Agreement then in effect has been terminated by the Concessionaire in accordance with its terms, engage some or all of the personnel of the former O&M Contractor and operate the Plant (or any part thereof), in either case with prior notice to the Government.
5.3.3 Without limiting its approval of the Power Purchase Agreement, the Government acknowledges and approves the right of the Power Purchaser under clause 5.14.1 of the Power Purchase Agreement to temporarily enter into and operate the Plant (or any part thereof).
5.4.1 The Concessionaire shall submit, or cause to be submitted, to the Government (with copies to each of the Offtakers) the following documents on or before the specified dates:
188.8.131.52 beginning from the Effective Date and ending on the expiry of the warranty period under the EPC Contract, Construction Reports (in such form and in such content as the Government may reasonably require detailing (i) all construction activities in respect of the CHP5 Project (including any updates to the construction milestone schedule) for each Month, delivered no later than ten (10) Days after expiry of each such Month and (ii) any condition or event and/or any change in such condition or event that could reasonably be expected to delay the occurrence of a Commercial Operations Date, promptly upon the Concessionaire becoming aware of such condition or event;
184.108.40.206 at least ten (10) Days prior to the scheduled commencement of testing of the Plant (or any part thereof) and Commissioning, a preliminary start-up and test schedule;
220.127.116.11 within twenty (20) Business Days of the Construction Start Date, a copy of the certificate of insurance for the 'EPC Contractor's All Risk Insurance Policy' and, as soon as available, a copy of such policy,
and as soon as is available but in any event on or before the Commercial Operations Date for Unit 1, copies of all insurance policies and certificates of insurance detailed in Schedule 10 together with all updates thereof promptly upon issue;
18.104.22.168 as soon as available, but no later than fifteen (15) Days following each Commissioning Test, two copies of all results of such Commissioning Test, including tests of major equipment included in the Plant (or any part thereof), tests of electricity metering equipment; and
22.214.171.124 no later than thirty (30) Days following each successful Commissioning Test, for the major items of plant incorporated into the Plant (or any part thereof), one copy, as received by the Concessionaire under the EPC Contract, of all the manufacturers' specifications and manufacturers' operation manuals.
5.4.2 The Concessionaire shall provide the Government with a copy of all notices and information required to be provided to the Heat Purchaser or the Power Purchaser under the Heat Purchase Agreement or the Power Purchase Agreement, respectively, during the period from the Effective Date until expiry of the Term or earlier termination of this Agreement.
5.5.1 The Government shall be entitled, from time to time upon reasonable prior notice to the Concessionaire, to observe the progress of the EPC Works (including the Concessionaire Interconnection Works) and the operation and maintenance of all or any part of the Plant.
5.5.2 The Government shall ensure that its officers, employees or authorised representatives shall not unreasonably cause any interference with or disruption to the activities of the Concessionaire or its Contractors on the Site and shall comply with the applicable safety regulations and procedures in force at the Site which are made available to the Government from time to time.
Without limiting the generality of Clauses 5.4 and 5.5, the Concessionaire shall deliver to the Government a copy of any notice or document delivered to the Power Purchaser and the Heat Purchaser under the Power Purchase Agreement or the Heat Purchase Agreement regarding any testing of the Plant (or any part thereof) and the Commissioning, and the Government shall be entitled to attend and observe any such testing and Commissioning.
per day or part of day of delay until the Commercial Operations Date for the applicable Unit or the Plant (as applicable) occurs:
126.96.36.199 [redacted information] for delay in the Commercial Operations Date for Unit 1 by the Required Commercial Operations Date for Unit 1;
188.8.131.52 [redacted information] for delay in the Commercial Operations Date for Unit 2 by the Required Commercial Operations Date for Unit 2; and
184.108.40.206 [redacted information] for delay in the Commercial Operations Date for the Plant by the Required Commercial Operations Date for the Plant,
(a) the Concessionaire shall not be liable for any contractual penalties that are due for the period of any delay to the Commercial Operations Date of any Unit or the Plant beyond the Long Stop Date; and
(10) Business Days of receipt of an invoice in respect of such amount, provided that if the Concessionaire fails to pay such amount, the Government and/or the Offtakers shall be entitled to set off any such amount from any payments due and/or payable by Government and/or the Offtakers under or in connection with this Agreement, the Power Purchase Agreement or the Heat Purchase Agreement or draw any such amount under the Performance Security until it has been fully drawn, provided that notwithstanding the Performance Security is fully drawn the Concessionaire shall remain liable for any such amount or any other amounts that remain due.
(14) Business Days from the date of the notification with a view to reaching agreement on the Proposed Material Amendment and if they fail to do so within such period and the Proposed Material Amendment is required for the implementation of the CHP5 Project then such Proposed Material Amendment shall be deemed to be agreed by the Government unless it relates to a change in the EPC Contractor in which event such Proposed Material Amendment shall not be agreed and the Concessionaire shall not be entitled to implement that Proposed Material Amendment.
5.8.4 Subject to Clauses 5.8.2 and 5.8.3, within fifteen (15) Days after the signing of any Proposed Material Amendment, the Concessionaire shall (i) deliver to the Government a copy of each such Proposed Material Amendment, as applicable, with information that is confidential or proprietary deleted therefrom and
5.9 Coordination among the Government, Power Purchaser and the Heat Purchaser
5.9.1 The Government shall procure that all notices and information required to be provided to the Concessionaire by the Power Purchaser under the Power Purchase Agreement and by the Heat Purchaser under the Heat Purchase Agreement and by the System Operator, including relating to:
220.127.116.11 dispatch (including load forecasts, planning, load curves, maintenance and other outages);
18.104.22.168 design and construction of the Plant (or any part thereof) and any interconnection facilities provided by the Offtakers (including construction and operation and maintenance reports);
22.214.171.124 maintenance requirements with respect to the Grid System, the Power Purchaser Interconnection Facilities, the Heat Network and the Heat Purchaser Interconnection Facilities, including details of the occurrence of conditions that could reasonably have an impact on the design, construction, operation and maintenance of the Plant (or any part thereof);
126.96.36.199 testing of the Plant (or any part thereof) and such interconnection facilities, including heat rate, output, and capacity tests; and
188.8.131.52 the amount and calculation of the Energy Payment (as defined in the Power Purchase Agreement) and Heat Payment (as defined in the Heat Purchase Agreement) payable under each of the Power Purchase Agreement and the Heat Purchase Agreement, respectively, and any supplementary charges payable, including details of the calculations, meter readings, fuel costs, and such other information needed or relevant in the determination of the amounts payable,
are provided by each Offtaker and the System Operator to the Concessionaire in a coordinated manner and within any times stipulated under the relevant CHP5 Project Agreements so as not to result in the Concessionaire being unable to comply with its obligations under this Agreement, the Power Purchase Agreement, the Heat Purchase Agreement and any applicable Laws of Mongolia (including the Grid Code) or to meet or comply with any requests of either of the Offtakers or the System Operator where to fail to so comply would result in the Concessionaire being in breach of its obligations to the applicable Offtaker or the System Operator, as the case may be.
neither Party shall be liable to the other Party, in contract, warranty or tort, including negligence or absolute or strict liability, breach of statutory duty or otherwise, for any matter arising out of or in connection with this Agreement in respect of Consequential Loss suffered by the other Party.
6.2.2 The Concessionaire shall fully indemnify and defend the Government, for itself and as trustee for every other Public Sector Entity and each of their officials, officers, directors and employees, against, and hold each Public Sector Entity, and each of their officials, officers, directors and employees, harmless from, at all times after the date hereof, any and all Loss (including any Environmental Liability) incurred, suffered, sustained or required to be paid, directly or indirectly, by, or sought to be imposed upon, any Public Sector Entity or its officials, officers, directors or employees for personal injury or death to persons or damage to property arising out of any negligent or intentional act or omission by the Concessionaire in connection with this Agreement or any other CHP5 Project Agreement, but only to the extent that the applicable Public Sector Entity or its officials, officers, directors or employees is not entitled to receive proceeds (including pursuant to any insurance) from another party in respect of such Loss.
Any fines or other penalties incurred by a Party for non-compliance with the applicable Laws of Mongolia, unless they result directly from an act or omission of the other Party (in which case, they shall be reimbursed by the other Party), shall not be reimbursed by the other Party but shall be the sole responsibility of the non-complying Party.
6.5.3 The indemnified Party shall provide the indemnifying Party and its advisers with such information and assistance relating to a claim, suit, action or proceeding as the indemnifying Party shall reasonably request, provided that the cost of the provision of information and assistance shall be at the indemnifying Party's expense.
184.108.40.206 the settlement or compromise of any action, claim, suit or proceeding brought against the indemnified Party;
220.127.116.11 the admission by the indemnified Party of any claim; or
18.104.22.168 the taking by the indemnified Party of any action (unless required by law or applicable legal process) which might reasonably be expected to prejudice the successful defence of the action or claim,
without, in any such case, the prior consent of the indemnifying Party.
6.5.5 Upon assumption by the indemnifying Party of the control of the defence of a claim, suit, action or proceeding, the indemnifying Party shall reimburse the indemnified Party for the reasonable costs and expenses of the indemnified Party in the defence of the claim, suit, action or proceeding prior to the indemnifying Party acknowledgment of the indemnification and assumption of the defence.
6.5.6 Neither Party shall be entitled to settle or compromise any claim, action, suit or proceeding without the prior consent of the other Party, provided, however, that after agreeing to indemnify the indemnified Party, the indemnifying Party may settle or compromise any claim without the approval of the indemnified Party.
6.5.7 For purposes of this Clause 6.5, the term "indemnified Party" includes each Person for whom the Government or the Concessionaire, as applicable, is acting as trustee in respect of indemnification.
6.7.1 Except Disputes or breaches related to clause 2.3 (Concessionaire Consents), clause 11 (Insurance), clause 13 (Taxes) and clause 15 (Termination) of the Power Purchase Agreement or the Heat Purchase Agreement, settlement or waiver by the Power Purchaser or the Heat Purchaser of any Dispute or breach under the Power Purchase Agreement or the Heat Purchase Agreement, as the case may be, shall be binding on the Government with respect to an issue or claim based on the same facts or acts or omissions by the Concessionaire. Settlement or waiver of any Dispute or breach related to clause 2.3 (Concessionaire Consents), clause 11 (Insurance), clause 13 (Taxes) and clause 15 (Termination) of the Power Purchase Agreement or the Heat Purchase Agreement shall be effective only if agreed by both the Power Purchaser or the Heat Purchaser, as the case may be, and the Government.
6.7.2 Notwithstanding any other provision in this Agreement to the contrary, the Power Purchaser or the Heat Purchaser, as the case may be, shall be responsible in the first instance for pursuing any claim against the Concessionaire based upon a failure of the Concessionaire to satisfy its obligations under the Power Purchase Agreement or the Heat Purchase Agreement, as the case may be. The Government shall not bring any proceedings (or other than through the Power Purchaser or Heat Purchaser, as the case may be, cause any proceedings to be brought) against the Concessionaire for any breach of its obligations under this Agreement if the Power Purchaser or the Heat Purchaser, as the case may be, has fully pursued, or is then pursuing, a claim or claims against the Concessionaire based upon an alleged breach of the Power Purchase Agreement or the Heat Purchase Agreement, as the case may be. A final, non-appealable order issued in a proceeding initiated by the Power Purchaser or the Heat Purchaser, as the case may be, and based upon a claim of a breach of the Power Purchase Agreement or the Heat Purchase Agreement, as the case may be, shall be with prejudice to, and shall, preclude any proceedings against the Concessionaire that the Government could otherwise bring for breach by the Concessionaire of substantially the same obligations under this Agreement.
7.1.1 Subject to the provisions of this Clause 7, the Concessionaire, at its sole cost and expense, shall obtain and maintain, or cause to be obtained and maintained, from the Effective Date (or, upon agreement of the Government, such date of commencement of the EPC Works) the policies of insurance set forth on Schedule 10 in the amounts set forth in this Agreement and during the periods specified in this Agreement, with financially sound insurer(s) satisfactory to the Government; provided, however, that such amounts may be changed from time to time with the prior consent of the Government; and provided, further, that the Concessionaire shall not be in breach of its obligations hereunder if and to the extent that (i) any particular insurance is not available to it under commercially reasonable terms and for commercially reasonable rates for reasons other than any negligence or default by, or condition (financial or otherwise) of, the Concessionaire or (ii) the Concessionaire is unable to obtain (having exercised all reasonable efforts) any endorsements or written acknowledgements required under this Agreement.
7.1.4 Any insurance policies or cover placed by the Concessionaire shall be placed through a competitive process and, if placed with local insurance companies, include reinsurance with reputable underwriters having satisfactory financial strength.
7.2 Maintenance of "Occurrence" Form Policies
The insurance coverage required under Clause 7.1 and any "umbrella" or excess coverage shall be "occurrence" form policies. In the event the Concessionaire has "claims made" form coverage, the Concessionaire must obtain prior approval of all "claims-made" policies from the Government.
22.214.171.124 the following cross liability clause shall be included in the liability insurance policy:
"In the event of claims being made by reason of:
(a) personal and/or bodily injuries suffered by any employee or employees of one insured hereunder for which another insured hereunder is or may be liable; or
(b) damage to property belonging to any insured hereunder for which another insured is or may be liable,
then this policy shall cover such insured against whom a claim is made or may be made in the same manner as if separate policies have been issued to each insured hereunder, except with respect to the limits of insurance".
The Concessionaire shall provide Government and Insured PSE, the Power Purchaser and the Heat Purchaser with copies of any underwriters’ reports or other reports received by the Concessionaire from any insurer.
7.7 Application of Proceeds
Subject to Clause 10.2, the requirements of the CHP5 Financing Documents, the Concessionaire shall promptly apply any and all insurance proceeds received by it in respect of damage to or loss of the Plant or any part thereof toward the repair, reconstruction or replacement of the Plant (or any part thereof).
8.2.1 The Government irrevocably and unconditionally guarantees to pay to the Concessionaire on demand, and in the currency in which the same falls due for payment, all amounts constituting Guaranteed Revenues which are at any time payable by the Power Purchaser or the Heat Purchaser to or in favour of the Concessionaire under or in connection with the Power Purchase Agreement or the Heat Purchase Agreement, respectively.
8.2.2 The Government irrevocably and unconditionally agrees to indemnify the Concessionaire in full on demand against any or all Loss, suffered or incurred by the Concessionaire arising from or in connection with the failure of either of the Power Purchaser or the Heat Purchaser fully and promptly to pay the Guaranteed Revenues when due and payable under the Power Purchase Agreement and the Heat Purchase Agreement, respectively.
8.2.3 The Government acknowledges and agrees that its obligations under this Clause
8.2 are and at all times shall be a continuing security and shall remain in full force and effect until the complete performance, observance and compliance by the Power Purchaser and the Heat Purchaser of all the terms and conditions of the Power Purchase Agreement and the Heat Purchase Agreement, respectively (including with respect to the payment of the Guaranteed Revenues) and none of
126.96.36.199 any amendments, alterations or supplements to the Power Purchase Agreement or the Heat Purchase Agreement, any extension of time for payment of any amounts due under the Power Purchase Agreement or the Heat Purchase Agreement or any concession, release, waiver or other indulgence granted to the Power Purchaser or the Heat Purchaser; or
188.8.131.52 any invalidity, illegality or unenforceability in or of the terms of any agreement or other commitment to which the Power Purchaser or the Heat Purchaser are or may become a party, including any invalidity in the Power Purchase Agreement or the Heat Purchase Agreement, their avoidance or their termination; or
184.108.40.206 any disability, incapacity, change in ownership, change in status or restructuring of the Power Purchaser or the Heat Purchaser; or
220.127.116.11 an Insolvency Event or a change in the constitution of the Power Purchaser or the Heat Purchaser; or
18.104.22.168 any forbearance, failure, omission or delay by or on the part of the Concessionaire in asserting any of its rights against the Power Purchaser or the Heat Purchaser; or
22.214.171.124 any other act or omission, which in the absence of this provision, might operate to exonerate the Government,
and the Government hereby waives any requirement for notice to it of any such event.
8.2.6 All sums payable under this Clause 8.2 shall be paid to the Concessionaire in full, free of any present or future taxes, levies, duties, charges, fees or withholdings and without any deduction, restriction, conditions, withholding, set-off or
counterclaim whatsoever; and if the Government is compelled by law to make any deduction or withholding, the Government will gross up the payment so that the net sum received by the Concessionaire will be equal to the full amount which the Concessionaire would have received had no such deduction or withholding been made.
8.4.1 The Government shall use reasonable efforts to assist, to the extent requested:
126.96.36.199 the Concessionaire in obtaining Customs clearance for the import of plant, machinery, equipment and materials whether by the Concessionaire or its Contractors for the CHP5 Project;
188.8.131.52 the foreign personnel staff of the Concessionaire and its Contractors to obtain visas and work permits required for entry into and departure from Mongolia for the CHP5 Project;
184.108.40.206 with the Concessionaire's engagement in discussion with the Ministry of Finance and any Relevant Authority in relation to payment, exemption or reimbursement of Taxes in respect of the CHP5 Project; and
220.127.116.11 to secure any available tax incentives and stabilisation benefits from any Relevant Authority, as required by the Concessionaire.
8.4.2 The Government shall provide such support and assistance to the Concessionaire as is specified in Schedule 1, Part 2 in respect of the availability of Foreign Currency in Mongolia, the convertibility of Togrog into Foreign Currency, the transfer of funds (including dividends) to and from Mongolia and the other matters specified in such part.
Unless otherwise agreed, all payments to be made under this Agreement, the Power Purchase Agreement and the Heat Purchase Agreement shall be made in Togrogs.
9.2 Taxes and Custom Duties
The Concessionaire shall pay all Taxes and Custom Duties in accordance with the Laws of Mongolia, subject to any exemptions, incentives, and other benefits granted to the Concessionaire from time to time.
For the purpose of financing or refinancing the Plant the Concessionaire may under the CHP5 Financing Documents assign to or create a security interest in favour of the Lenders in its rights and interests under:
10.2.1 this Agreement;
10.2.2 any agreement or document included within or contemplated by the CHP5 Project Agreements;
10.2.3 the Ordinary Share Capital;
10.2.4 any present and future movable, immovable and intellectual property owned by the Concessionaire;
10.2.5 the present and future revenues or any of the rights or assets of the Concessionaire, or actionable claims of the Concessionaire; and
10.2.6 any other present or future right, interest, property or asset of any kind of the Concessionaire wherever situated;
provided that it is acknowledged and agreed that unless otherwise agreed, the Concessionaire has no ownership interest in the Plant or, without prejudice to its rights under the Land Use Agreement, the Site, including any movable or immovable property related thereto, and may not grant to any Lender any assignment thereof or security interest therein (including any Lien).
(b) the maximum debt and principal amounts and interest rate or rates (or mark-up or other term denoting the return paid to lenders on debt);
(c) any schedules or formulae in the CHP5 Financing Documents for the computation of fees and charges payable to the Lenders upon the winding up for early termination of the loans under the CHP5 Financing Documents; and
10.3.4 The Concessionaire shall provide the Government with a copy of the loan agreements executed by the Concessionaire on or before the Effective Date, but no later than ten (10) Business Days after the Effective Date.
10.3.5 Following the Effective Date, the Concessionaire shall deliver to the Government, copies of any amendment to the executed CHP5 Financing Documents within ten
(10) Days of such amendment. The Concessionaire shall not execute any amendment affecting the repayment of principal (including any refinancing or restructuring of payment obligations under any CHP5 Financing Document) or enter into any loan agreement for secured debt or otherwise incur any additional secured debt without submitting to Government, no less than fifteen (15) Days prior to the signing of the instrument of such amendment or such new loan agreement, as applicable, a schedule ("Revised Schedule") setting forth the proposed revised principal repayment schedule and the other principal financial terms (including those terms referred to in Clauses 10.3.1.2(a) to 10.3.1.2(d), inclusive) and any material modifications related thereto. Any reduction in the principal repayment schedule or interest rate under the CHP5 Financing Documents shall be shared with the Power Purchaser and shall result in a reduction in the Reference Capital Cost Component to provide [redacted information] of the benefits of such reduction to the Power Purchaser. The Government shall notify the Concessionaire of any objections to the Revised Schedule within ten (10) Business Days of receipt of the Revised Schedule,
10.3.6 The Concessionaire shall be deemed to have submitted a Revised Schedule to the Government at the time that it submits terms and conditions for carrying out modification works under clause 13.6.1 of the Power Purchase Agreement or a Report under clause 14.5.5 of the Power Purchase Agreement. The Government shall be deemed to have consented to the Revised Schedule if the Concessionaire and the Power Purchaser agree to such terms and conditions or the Report (as applicable) in which event the principal repayment schedule in Schedule 4 shall be deemed to be amended to incorporate all agreed changes to such principal repayment schedule as proposed in such terms and conditions or the Report (as applicable).
11.1.2 Notwithstanding clause 11.1.1, nothing in this Agreement shall be construed as a waiver by the Government of the Government's exercise of its power of eminent domain exercised in accordance with the Laws of Mongolia.
11.2.2 The Concessionaire shall not issue any Ordinary Share Capital and shall ensure that each Member of the Consortium shall not transfer or otherwise dispose of the Ordinary Share Capital owned directly or through one or more Affiliates of each such member (including the Initial Shareholders) at any time:
18.104.22.168 prior to the Commercial Operations Date for the Plant, except for a transfer of Ordinary Share Capital:
(a) required by any Laws of Mongolia or by order of a court, tribunal, or other Public Sector Entity with appropriate jurisdiction;
(b) resulting from the creation or enforcement of a security interest in or over any Ordinary Share Capital in accordance with the CHP5 Financing Documents; or
(c) to which the Government has given its prior approval, such approval not to be unreasonably withheld; and
22.214.171.124 after the Commercial Operations Date for the Plant if following such issuance, transfer or disposal, such Members of the Consortium in aggregate own directly or through one or more Affiliates of each such member (including the Initial Shareholders) less than [redacted information] of the outstanding Ordinary Share Capital, except for a transfer of Ordinary Share Capital:
(a) required by any Laws of Mongolia or by order of a court, tribunal, or other Public Sector Entity with appropriate jurisdiction;
(b) resulting from the creation or enforcement of a security interest in or over any Ordinary Share Capital in accordance with the CHP5 Financing Documents; or
(c) to which the Government has given its prior approval, such approval not to be unreasonably withheld.
12.1.1 A "Force Majeure Event" shall mean any event or circumstance or combination of events or circumstances (including the effects thereof) that is beyond the reasonable control of a Party and that, materially and adversely affects the performance by such affected Party of its obligations under this Agreement (including the Concessionaire or the ability of the Power Purchaser or Heat Purchaser to deliver or receive energy or heat from the Plant (or any part thereof), as applicable) provided that such material and adverse effect could not have been prevented, overcome or remedied in whole or in part by the affected Party through the exercise of reasonable diligence and care, including in the case of the Concessionaire, taking action to protect the Plant (or any part thereof) that ought reasonably be taken in light of the probability of the occurrence of such event, the probable effect of such event if it should occur, and the likely efficacy of the protection measures. "Force Majeure Events" shall include each of the following events and circumstances (including the effects thereof) to the extent that each satisfies the above requirements:
(c) any strike, work-to-rule, go-slow, or analogous labour action that does not only affect the Party claiming such Force Majeure Event;
(d) the failure of any of the Coal Suppliers to supply Coal including as a result of the invalidity or unenforceability of the Coal Supply Agreement, breach, unavailability or shortage of Coal for any reason or any force majeure event (as defined in the relevant Coal Supply Agreement) affecting a Coal Supplier;
(e) failure by the Water Supplier to supply water including as a result of the invalidity or unenforceability of the Water Purchase Agreement, breach, unavailability or shortage of water for whatever reason (including by reason or any force majeure event (as defined in the Water Purchase Agreement) affecting the Water Supplier;
Subject to Clause 12.1.3, if by reason of any Force Majeure Event, a Party is wholly or partially unable to carry out its obligations under this Agreement, or in the case of the Concessionaire any of the CHP5 Project Agreements, such Party shall:
12.2.3 when appropriate or when reasonably requested to do so by the other Party, provide further notices to the other Party more fully describing such Force Majeure Event and its causes and providing or updating information relating to the efforts to avoid and/or to mitigate the effects thereof and estimates, to the extent practicable, of the time that it reasonably expects it shall be unable to carry out any of its affected obligations due to such Force Majeure Event;
12.2.4 notify the other Party of:
126.96.36.199 the cessation of such Force Majeure Event (where such event was of a type that was ongoing); and
188.8.131.52 its ability (or its inability, together with an estimate of the date it will be able) to recommence performance of its obligations under this Agreement,
as soon as possible and in any event not later than seven (7) Days after the cessation of such Force Majeure Event.
The Party affected by a Force Majeure Event, including a Change in Law, shall use all reasonable efforts (and shall ensure that its Contractors use all reasonable efforts) to promptly take steps to mitigate the effects of a Force Majeure Event, including a Change in Law, which shall include the payment of reasonable sums of money by or on behalf of such Party for such mitigation steps which are reasonable in light of the likely efficacy of such mitigation steps.
13.1.4 except for the purpose of amalgamation or reconstruction that does not affect the ability of the amalgamated or reconstructed entity, as the case may be, to perform its obligations under this Agreement, the occurrence of any of the following events:
(a) any proceeding being validly instituted under the Laws of Mongolia for the dissolution of the Concessionaire that is not stayed or suspended in sixty (60) days;
(b) the passing of a resolution by the shareholders of the Concessionaire for the winding up of the Concessionaire;
(c) the voluntary filing by the Concessionaire of a petition of bankruptcy, moratorium or other similar relief;
(d) the appointment of a provisional liquidator in a proceeding for the winding up of the Concessionaire after notice to the Concessionaire and due hearing, which appointment has not been set aside or stayed within sixty (60) Days of such appointment; and
(e) the making by a court with jurisdiction over the Concessionaire of an order winding up the Concessionaire that is not stayed or reversed by a court of competent authority within sixty (60) Days;
13.1.5 any statement, representation or warranty by the Concessionaire in this Agreement proving to have been incorrect, in any material respect, when made or when deemed to have been made and such failure or incorrect statement, representation or warranty having a material and adverse effect on the Concessionaire's ability to perform its obligations under this Agreement;
13.1.6 except for any breach otherwise addressed in this Clause 13.1, any material breach or default by the Concessionaire of this Agreement (including the purchase of Coal other than under a Coal Supply Agreement without the consent of the Government and/or the Power Purchaser or Heat Purchaser but without prejudice to the Concessionaire rights under clause 14.3 of the Coal Supply Agreements) that is not remedied within [redacted information] after notice from the Government stating that a material breach of this Agreement has occurred that could result in the termination of this Agreement, identifying such material breach in reasonable detail, [redacted information];
13.1.7 any default by the Concessionaire in the making of any undisputed payment or payments required to be made by it under this Agreement by the due date that continues unpaid for [redacted information];
13.1.8 any of the Power Purchase Agreement, the Heat Purchase Agreement, the Land Use Agreement or the Water Purchase Agreement is terminated as a result of a
breach or default by the Concessionaire under any such agreement, or any material undertaking of the Concessionaire under any such agreement becomes unlawful, unenforceable, invalid or void except as a result of a Force Majeure Event.
13.2.2 any material breach or default by the Government of or under this Agreement that is not remedied within [redacted information]after notice from the Concessionaire to the Government stating that a material breach of the Agreement has occurred that could result in the termination of this Agreement, identifying such material breach in reasonable detail and demanding remedy thereof, [redacted information];
13.2.3 any of the Power Purchase Agreement, the Heat Purchase Agreement, the Land Use Agreement, any Coal Supply Agreement or the Water Purchase Agreement is terminated as a result of a breach or default under any such agreement by the Power Purchaser, the Heat Purchaser, the counterparty of the Concessionaire under the Land Use Agreement, the Coal Supplier or the Water Supplier, respectively;
13.2.4 the expropriation, compulsory acquisition, or nationalization by the Government or any Public Sector Entity of (i) any Ordinary Share Capital, or (ii) any material asset or right of the Concessionaire (except as contemplated by the CHP5 Project Agreements), including any condemnation or expropriation of all or part of the Site under the Land Use Agreement;
13.2.5 any procurement by the Government or any Public Sector Entity of any Ordinary Share Capital if the result would be for the Government or any such Public Sector Entity to acquire Control of the Concessionaire or its management (and there shall be an irrebuttable presumption that the ownership by the Government or any such Public Sector Entity of more than twenty five (25%) per cent of the Ordinary Share Capital shall constitute such Control);
13.2.7 any statement, representation or warranty by the Government in this Agreement proving to have been incorrect, in any material respect, when made or when deemed to have been made and such failure or incorrect statement, representation
or warranty having a material and adverse effect on the Government’s ability to perform its obligations under this Agreement.
13.3.1 Upon the occurrence of a Government Event of Default or a Concessionaire Event of Default, as the case may be, that is not cured within the applicable cure period, if any, the non-defaulting Party may initiate termination of this Agreement by delivering a notice ("Notice of Intent to Terminate") of its intent to terminate this Agreement to the defaulting Party. The Notice of Intent to Terminate shall specify in reasonable detail the Concessionaire Event of Default or the Government Event of Default, as the case may be, giving rise to such notice.
The Concessionaire shall not seek to terminate the Power Purchase Agreement or the Heat Purchase Agreement without simultaneously providing to the Government a copy of any notice given to the Power Purchaser or the Heat Purchaser, as the case may be, under clauses
15.4 and 15.5 of the Power Purchase Agreement or the Heat Purchase Agreement, as the case may be.
13.5.1 If the Power Purchase Agreement or the Heat Purchase Agreement is terminated under clause 14.6 of the Power Purchase Agreement or the Heat Purchase Agreement as the result of an Other Force Majeure Event, this Agreement shall automatically terminate on the date of termination of the Power Purchase Agreement or Heat Purchase Agreement (as applicable).
13.5.2 Either Party may terminate this Agreement upon the occurrence of an Other Force Majeure Event that prevents either Party for a continuous period of nine (9) Months from performing a material obligation under this Agreement.
13.6.1 This Agreement shall terminate upon notice by either Party to the other:
184.108.40.206 if the Power Purchase Agreement or the Heat Purchaser Agreement is terminated under clause 14.6 of the Power Purchase Agreement or the Heat Purchase Agreement as the result of a MPFME or CLFME;
(a) any material undertaking of the Government, the counterparty to the Concessionaire under the Land Use Agreement, the Water Supplier, the Power Purchaser, the Heat Purchaser or any Coal Supplier under this Agreement, the Land Use Agreement, the Water Purchase Agreement, the Power Purchase Agreement, the Heat Purchase Agreement or Coal Supply Agreements, as applicable becomes unenforceable, invalid or void for any reason (including as a result of any Change in Law); or
(b) (A) it becomes unlawful for the Concessionaire, the Lenders or Investors to make or receive any payment, to perform any obligation or to enjoy or enforce any material right under any CHP5 Project Agreement to which they are a party, or (B) any such payment, the performance of any such material obligation or the enjoyment or enforcement of any such material right becomes unenforceable, invalid or void for any reason (including as a result of any Change in Law),
and in each case, any such effect of which continues for more than [redacted information] without such material undertaking or entitlement to make or receive any payment or perform any obligation or enjoy or enforce any material right being enforceable, valid, no longer void and/or lawful (as applicable),
220.127.116.11 any Change in Law places any material restrictions or limitations (beyond those restrictions or limitations that are in existence on the date of signing of this Agreement) on the ability of the Concessionaire to exchange Togrogs for Foreign Currency or for Investors to repatriate any capital, dividends, distributions or other proceeds from the Concessionaire (provided that such distributions do not arise in connection with a breach of this Agreement), and such restrictions or limitations remain in place for more than [redacted information] without an arrangement being provided to exempt the Concessionaire or its Investors from all such restrictions and limitations.
13.6.2 The Government may terminate this Agreement upon the occurrence of an MPFME or CLFME that prevents either Party for a continuous period of nine (9) Months from performing a material obligation under this Agreement.
13.8.2 Subject to Clause 6.1, the exercise of any right of a Party to terminate under this Agreement, does not preclude the Party from exercising other remedies that are provided in this Agreement or are available at law.
13.8.3 The Government acknowledges and agrees that damages alone may not be an adequate remedy for any breach of the terms of this Agreement by the Government and the Concessionaire shall therefore be entitled to the remedies of injunction, specific performance, interim order or other similar relief for any threatened or actual breach of the terms of this Agreement.
18.104.22.168 the Concessionaire shall perform the tests described in Schedule 8 ("End of Term Tests") and shall comply with the requirements set out in Error! Reference source not found. If the End of Term Test results demonstrate that the Plant requires repair and/or replacement of equipment and parts, the Concessionaire shall carry out such
corrective action as is required to meet the requirements of Schedule 9;
22.214.171.124 The Concessionaire shall provide its good faith estimate of the cost of the End of Term Tests and the final transfer overhaul described in Schedule 9 to the Government based on the plan described in Clause
15.1.4 During the period within which the Parties' representatives are meeting in good faith to resolve the Dispute, the Parties shall faithfully continue to perform their respective obligations under this Agreement that are not in Dispute.
(21) Days of the Expert's determination having been notified to it, stating its intention to refer the matter in Dispute to arbitration, and/or the notifying Party has failed to commence the procedure to
refer the Dispute to arbitration within a further ten (10) Day period after receiving such notice.
15.3.4 The arbitration award shall be final and binding on the Parties.
15.4 Related Disputes
15.4.1 If any Dispute has been referred to an Expert for a final and binding determination under Clause 15.2 or to arbitration under Clause 15.3 and such Dispute raises issues of fact or law that, in whole or in material part are, in the opinion of the arbitrators, substantially the same as issues of fact or law already pending in international arbitration proceedings in connection with any Related Dispute, such issues shall, to the extent permitted under the Laws of Mongolia, be consolidated with such Related Dispute, unless such consolidation would, in the opinion of the arbitrators, produce manifest injustice, substantial hardship to the Government or the Concessionaire or cause significant delay in the determination of the Dispute between the Government and the Concessionaire or in the determination of any Related Dispute in which the Government is involved.
The Government unconditionally and irrevocably (i) agrees that the signing, delivery and performance by it of this Agreement constitute private and commercial acts and (ii) waives any claim that the signing, delivery and performance by it of this Agreement constitutes by an administrative act.
The Concessionaire, as of the date of this Agreement, represents and warrants to the Government as follows:
16.1.1 it is duly organised, validly existing and in good standing under the laws of Mongolia and has the corporate power and lawful authority to carry on its business;
16.1.2 it has the full legal right, power and authority required to enter into this Agreement and the other CHP5 Project Agreements to which it is a party and to perform fully its obligations hereunder and thereunder;
16.1.3 it has obtained all required approvals necessary to authorise and enable it to sign, deliver and perform the terms of this Agreement;
16.1.4 no additional consent, approval, authorisation or order of any foreign governmental agency or body or any court is required for the signing of this Agreement, the Concessionaire's performance hereunder or for the consummation of the transactions contemplated hereby;
16.1.5 neither the signing of this Agreement nor the performance of the transactions contemplated under this Agreement will result in a violation of, or constitute a default under, any statute or regulation or any order or decree of any court or governmental authority binding upon the Concessionaire or its property, or violate or result in a default under any of the terms and provisions of its articles of association;
16.1.6 did not violate the Laws of Mongolia or submit false documents in connection with the tender process for the award of the Concession; and
16.1.7 this Agreement constitutes the legal, valid and binding obligations of the Concessionaire, enforceable against it in accordance with its terms.
The Government, as of the date of this Agreement, represents and warrants to the Concessionaire as follows:
16.2.1 the MED has been authorised by the Government to sign this Agreement and all other documents which the MED is required to sign in relation to the CHP5 Project on behalf of the Government and to perform the obligations hereunder and thereunder;
16.2.2 neither the signing of this Agreement nor the performance of the transactions contemplated under this Agreement will result in a violation of, or constitute a default under, any statute or regulation or any order or decree of any court or governmental authority binding upon the Government or its property;
16.2.3 the Government has taken all necessary actions and fulfilled all obligations required by the Government to ensure the due authorisation and authority to carry out the Government's obligations under this Agreement and the other CHP5 Project Agreements to which the Government is a party;
16.2.4 this Agreement and all of the other CHP5 Project Agreements executed by the Government have been duly authorised and approved in accordance with the Laws of Mongolia and comply with all requirements of the Laws of Mongolia, including the Law of Mongolia on Concessions, adopted on 28 January 2010 (as amended); and
16.2.5 this Agreement and all other CHP5 Project Agreement to which the Government is a party constitutes the legal, valid and binding obligation of the Government, enforceable against it in accordance with its terms; and
16.2.6 this Agreement constitutes the legal, valid and binding obligations of the Government, enforceable against it in accordance with its terms.
17.1.2 Either Party may change the address, addressee or facsimile number to which Notices are to be delivered to it by giving not less than five (5) Days' prior notice to the other Party.
17.1.3 No Notice shall be effective until received or deemed received. All Notices shall be deemed to have been received by the receiving Party:
126.96.36.199 when presented if personally delivered;
188.8.131.52 on the date shown by a facsimile transmission report or confirmation in the case of Notices sent by facsimile; or
184.108.40.206 five (5) Business Days after being delivered to a reputable international courier for express delivery.
17.2 Governing Law and Jurisdiction
This Agreement and any Dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual Disputes) shall be governed by and construed in accordance with the Laws of Mongolia.
An amendment or modification of this Agreement shall be effective or binding on a Party only if it is in writing and duly executed by or on behalf of each of the Parties. No amendment of the Heat Purchase Agreement or the Power Purchase Agreement shall increase the liability of the Government under this Agreement, unless such amendment is approved in writing by the Government.
17.4 Third Parties
Except for any rights expressly granted to the Lenders in this Agreement, this Agreement is intended solely for the benefit of the Parties and nothing in this Agreement shall be construed to create any rights in, duty to, standard of care to, or any liability to, any Person not a Party.
17.5 No Waiver
17.5.1 No default by either Party in the performance of or compliance with any provision of this Agreement shall be waived or discharged except with the express consent of the other Party.
17.5.2 No waiver by either Party of any default by the other in the performance of or compliance with any of the provisions of this Agreement shall operate or be construed as a waiver of any other or further default whether of a like or different character.
17.6 Relationship of the Parties
17.6.1 This Agreement shall not be interpreted or construed to create an association, joint venture or partnership between the Parties or to impose any partnership obligation or liability upon either Party.
17.6.2 Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, to act on behalf of, or be an agent or representative of, or to otherwise bind, the other Party, and neither Party shall hold itself out to any third- party as having such right, power or authority.
17.7 [redacted information]
17.7.1 [redacted information].
17.7.2 [redacted information].
17.7.3 [redacted information].
This Agreement and the documents to be signed or provided under it constitute the entire Agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior written or oral agreements between them with respect to such matter.
17.9.2 Notwithstanding the provision of Clause 17.9.1, for the purpose of financing the CHP5 Project, the Concessionaire may under the CHP5 Financing Documents, assign to, or create a security interest in favour of the Lenders in or over the Concessionaire's rights and interest under or under this Agreement.
17.10.3 and 17.10.4) such information shall not be disclosed in whole or in part by either Party.
17.10.2 This obligation does not apply to information that (when used or disclosed) has been made public other than through a breach of this Agreement, or has been, or could have been, lawfully acquired by the Party:
220.127.116.11 to directors, officers and employees of such Party or to any Person directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with, any Person;
18.104.22.168 to persons professionally engaged by or on behalf of such Party;
22.214.171.124 to any government department or any governmental or regulatory agency having jurisdiction over such Party but only to the extent that such Party is required by law to make such disclosure;
(a) any lending or other financial institution in connection with the financing of such Party’s operations; or
(b) any bona fide intended assignee or transferee of the whole or any part of the rights and interests of the disclosing Party under this Agreement,
but (in either case) only to the extent required in connection with obtaining such finance or in respect of such proposed assignment ; or
126.96.36.199 to any Expert or arbitrator appointed under the terms of this Agreement,
17.10.5 This Clause 17.10 shall survive termination or expiry of this Agreement for a period of thirty-six (36) Months from the date of such termination or expiry.
17.11 Successors and Assigns
This Agreement shall be binding upon, and inure to the benefit of, the Parties and their respective permitted successors and permitted assigns.
17.12 No Liability for Review
No review and approval by the Government or any Relevant Authority of any agreement, document, instrument, drawing, specifications or design proposed by the Concessionaire nor any inspection of the EPC Works or the Concessionaire Interconnection Works shall relieve the Concessionaire from any liability that it would otherwise have had for its negligence in the preparation of such agreement, document, instrument, drawing, specification or design or the carrying out of such works or failure to comply with the applicable Laws of Mongolia with respect thereto or to satisfy the Concessionaire's obligations under this Agreement, nor shall the Government be liable to the Concessionaire or any other Person by reason of its review or approval of an agreement document, instrument, drawing, specification or design or such inspection.
The Concessionaire hereby declares that it has not obtained or induced the procurement of this Agreement, the Power Purchase Agreement or the Heat Purchase Agreement or any contract, consent, approval, right, interest, privilege or other obligation or benefit related to this Agreement or the CHP5 Project from the Government or any Public Sector Entity through any corrupt or illegal business practice.
This Agreement may be executed any number of counterparts and this has the same effect as if signature on the counterparts were on a single copy of the Agreement.
17.15 Severability and Invalidity
17.15.1 If any term or provision of this Agreement is declared invalid, unenforceable or illegal by the courts of a jurisdiction to which it is subject, such provision shall be severed and, the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such determination in any way.
17.15.2 The illegality, invalidity or unenforceability of any provision of this Agreement in whole or in part under the law of any jurisdiction shall not affect its legality, validity or enforceability under the law of any other jurisdiction.