\ i THE GOVERNMENT OF THE UNITED REPUBLIC OF TANZANIA, SONGAS LIMITED, PA,EPANAFlUCAN ENERGY CORPORATION -AND- CDC GROUP PLC AMENDED AND RESTATED IMPLEMENTATION AGREEMENT RELATING TO THE SONGO SONGO GAS-To-ELECTRICITY PROJECT DARES SALAAM, TANZANIA Dated as of [ ", fqaiJ ], 2003 \~ \ AI( \ 0-./ I , ! TABLE OF CONTENTS ARTICLE I DEFINITIONS; RULES OF INTERPRETATION 1.1. Definitions ............................................................... , ........................................................... 2 1.2. Rules of Intemretation ....................................................................................................... 12 ARTICLE II IMPLEMENTATION OF THE PROJECT BY SONGAS 2.1. Compliance with Laws of Tanzania and Agreements ...................................................... 14 2.2. Contracting ......................... : .............................................................................................. 14 2.3. Required Arrangements .................................................................................................... 14 '1 2.4. Environmental Protection. Health and Safety ................................................................... 15 i . • IITTCI·If. ITT PEIIMITRANO APPBOV ALS 3.1. Applications by Songas for Consents ............................................................................... 16 3.2. Status of Consent Applications ......................................................................................... 16· 3.3. Support to Obtain Consents .............................................................................................. 16 3.4. . Conditions to Consents ..................................................................................................... 16 3.5. Liaison ............................................................................................................................... 17 ARTICLE IV REPRESENTATIONS AND WARRANTIES 4.1. GOT Representations and Warranties .............................................................................. 18 4.2. PanAfrican Representations and Warranties .............................. : ..................................... 18 4.3. CDCPLC Representations and Warranties ................. , ..................................................... 20 4.4. Songas Representations and Warranties ........................................................................... 21 ARTICLE V EMPLOYMENT, TRAINING AND TANZANIAN RESOURCES . 5.1. Employment of Tanzanians .............................................................................................. 23 5.2. Training ............................................................................................................................. 23 5.3 . Tanzanian Resources ........................................................................................................ 23 ARTICLE VI INSURANCE 6.1. Maintenance of Specified Policies .................................................................................... 24 6.2. Insurance Proceeds ................. : ...................................... , ................................................... 24 . ARTICLE VII PARENT COMPANY OBLIGATIONS 7.1. Organization of Subsidiaries ............................................................................................. 25 7.2. Equity Guarantee .............................................................................................................. 26 ii L LONDON -46792.03 7.3. Perfonnance Guarantee ..................................................................................................... 26 7.4. Emergency Maintenance Loan ......................................................................................... 27 7.5. Terms of Guarantee ........................................................................................................... 28 7.6. Obligations Unconditiona1. , ..................................................... , ........................................ 29 . ARTICLEVDI GOT PROJECT ASSISTANCE 8.1. Right to Proje.ct. ............................................. ; .......... , ....................................................... 30 . 8.2. Obligation to Lend ............................................................................................................ 30 8.3. Account Funding ............................................................................................................... 32 8.4. Return to Globeleg Somanga and Globeleg Tanzania ...................................................... 32 8.5. Investment and Tax Incentives .......................................................................................... 33 8.6. No Discrimination .............................................................................................................. 33 8.7.· Existence ofTANESCO and TPDC .................................................................................. 33 . 8.8. ICSID Effectiveness, Designation and Consent. .............................................................. 33 8.9. Obligations Unconditional .......... , .......................................................... , .......................... 34 8,10. Electricity Licence ........................................................................... ; ................................ 34 8.11. Obligation to Remedy Effects of an FTPA Order ...................... ~ ..................................... 34 ARTICLE IX FOREIGN CURRENCY EXCHANGE AND TRANSFER OF FUNDS 9.1. Foreign Exchange Regulation ................................ ; ........................................................... 35 9.2. Use of Tanzanian Bank Accounts: Exceptions ...................... , .......................................... 35 9.3. Consent to Foreign Currency Accounts ............................................................................ 35 9.4. Availability of Foreign Exchange ..................................................................................... 35 9.5. Free Transfer ofNecessarv Fimds.·, .................................................................................. 35 9.6. Expatriate Employees of Son gas and its Contractors ....................................................... 35 ARTICLE X EXPATRIATE EMPLOYEES OF SONGAS AND ITS CONTRACTORS 10.1. Right to Import .................................................................................................................. 37 10.2. Export and Reimport ................ ~ ........................................................................................ 37 10.3. Itilmigration .................................................................................................... ; ................... 37 10.4. Expatriate Employees.· ...................................... , ............................................................... 37 ARTICLE XI TAXATION 11.1. Taxation of Song as .......................................................... ; ................................................ 38 11.2. Expatriate Employee Income Tax Guarantee ...................... : ................................. ; .......... 38 ARTICLE XII sQNGAS FINANCIAL MATTERS 12.1, Subordination of GOT Indebtedness ..................................................................... , .......... 39 12.2. Additional Financing .................................................................................. , ..................... 39 12.3. Liguidated Damages .............................................. ~ ........................................................... 39 iii AK L LONDON· 46792.03 ARTICLE xm LIABILITY AND INDEMNIFICATION 13.1. Limitation ofLiability; ............................................... ~ ...................................................... 40 13.2. Indemnification ................................................................................................................. 40 13.3. Assertion of Claims to Exceed Minimum Amount... .... : ................................................... 41 13.4. Indemnification for Fines and Penalties .................................................................. : ........ 41 13.5. 'Notice of Proceedings ...... , ....................................... ; ........................................................ 41 13.6. Defence of Claims ................ , ........................................... , ........ ; ....... : ................................ 41 13.7. Subrogation ....................................................................................................................... 42 ARTICLE XIV FORCE MAJEURE 14.1. Definition of Force Majeure .............................................................................................. 43 14.2. Notification ObJigations ........................................................................... : ........................ 44 14.3. Duty to Mitigate ................................................................................................................ 44 14.4. Delay Caused by Force Majeure Events ............... , ....... , ................................................... 45 14.5~ folrdeal g'v€nts~ . .. ............ _ ...... _ ......... _~ .............................................. 45 ARTICLE XV RESOLUTION OF DISPUTES 15.1. Notice of Dispute .............................................................................................................. 46 15.2. Resolution by Parties ........................................................................................................ 46 15.3. Technical Disputes ................................................................... : ........................................ 46 15.4. Arbitration ......................................................................................................................... 47 ARTICLE XVI EVENTS OF DEFAULT; TERMINATION 16.1. Songas Events ofDefault. ................................................................................................. 50 16.2. GOT Special Events ............................... , .......................................................................... 51 16.3. Parent Company Event of Default. ................................................................................... 51 16.4. Tennination .................................................................. ; .................................................... 54 16.5. Notice to Interested Persons .............................................................................................. 55 16.6. Notice to GOT of a TANESCO Event of Default or a TPDC Deficiency ............... : ....... 55 16.7. Obligations Upon Termination. ...................... , ......................... , ....................................... 56 16.8. Other Remedies .................... , ...................................... ~ ..................................................... 56 ARTICLE XVII TERM 17.1. Tenn .................................................................................................................................. 57 ARTICLE XVIII MISCELLANEOUS 18.1. Expenses oithe' Parties .......................... , ..................... : .................................................... 58 18.2. Right to Specific Performance; Waivers ........................................................................... 58 . 18.3. Commercial Acts; Sovereign Immunity ... : ...................... ; ....................................... : ........ 58 18.4. Further Assurances .................................................................................................. : ......... 59 iv LONDON· 46792.03 18.5. Choice of Law ................................................................................................................... 59 IS.6. Entire Agreement. ............................................................................................................. 59 1S.7. Amendments ............................................................................................................ ; ....•... 59 18.8. Waiver ................................................. ; ............................................................................. 59 1S.9. Confidentiality .................................................................................................................. 60 18.10. Counterparts ...................................................................................................................... 60 lS.11. Severability ....................................................................................................................... 60 18.12. Assignment. ..................................... ; ................................................................................ 61 18.13. Relationship of the Parties ......................................... : ...................................................... 61 18.14. No Third Parties ................................................................................................................ 61 18.15. Language ........................................................................................................................... 61 18.16. Consents ..................................................................................... '" .................................... 61 18.17. Notices .............................................................................................................................. 62 18.18. Accounts and &;ports ....................................................................................................... 64 18.19. Limitation of Recourse. .................................................................................................... 65 v LONDON -46192, 3 .23 c... I I absence of the Interbank Rate on any Business Day, the Commercial Rate shall be determined in the following priority: accordance with (a) first, if Citioonk Tanzania (or in the event eitibank Tanzania is no longer the agent under the Liquidity Facility Agreement, thenthe successor agent therelUlder) has converted any Shillings into Dollars on the preceding Business Day, the weighted average rate of exchange on Business Day for transactions larger than US$l 00,000; and such preceding (b) second, the exchange rate generally applied by the Bank of Tanzania on such preceding Business Day to convert Shillings into Dollars for the purpose of servicing private foreign debt. . . the ordinary voting shares authorized to be issued by Songas. "Common Shares" means means the eleetric generating facilities at Uboogo in Dar es Salaam, Tanzania "Complex" are the subject of the transactions contemplated by the Power Purchase Agreement. that "Consents" means all consents, approvals, authorizations, notifications, conce.ssions, ac ow-- gnlen , - , '. ! -- '1 - ~ - - ---.~! ..t _ ...... - "J.....,;. __ I"Io'htolnpl't nv _ ~nnoAS GOT or any Government Entity for the desi~ construction. financing, ownership, operation and maintenance of the Project. . "Contractor" means any Person with whOm Songas. contracts (or any Person to whom such Person subcontracts) to provide goods or services relating to the desi~ construction, operation or maintenance of the Project. "Court Action" means a decision, preliminary injunction, permanent injunction or order by any court or triblUlal in Tanzania which decision. injunction or order (i) is. inconsistent with the rights and obligations of the parties pursuant to the Basic Agreement.'! or Financing Agreement.'!, (ii) has a Material Songas Effect and (iii) is not precipitated by the wrongful actions of Songas, its employees or agents. "Customs Duties" means those duties, taxes, charges or import fees imposed by the Laws ofTat17.ania on goods imported into, or exported from. Tanzania. "DFIs" means, together, CDC Financial Services (Mauritius) Ltd .. and Tanzania Development Finance Company Limited, each as defined individually in the Shareholders' Agreement. ~Debenture" means the agreement of that name by and between Songas and the agent named therein, dated as of the date of Financial Closing, as the same may be amended from time to time. "Deemed Commercial Operations Date" has the meaning established in the Power Purchase Agreement. "Development Licence" has the meaning established in the Gas Agreement. "Dollars"or "US$" means the enrrency that is the legal tender of the United State.'! of A/C America. ~ LONDON -46192.03 4 n "Downgrade Event means (i) the reduction of the interest held in CDCPLC by the Government of the United Kingdom to less than 51 % or the granting of a controlling interest in CDCPLC to investors; and (li) CDCPLC does not have. a ratio of (a) cash plus marketable securities on the balance sheet plus committed undrawn lines Of credit to (b) debt due in the 12 months after the date on which such ratio is measured that is 1 or more, provided. that, in the event that CDCPLC obtains and maintains a credit rating from either Standard & Poor's Corporation or Moody's Investors Services, lnc. of its senior debt equal to or g:reaterthan the credit rating of the senior debt of AES as of May 1, 2000, then CDCPLC shall be deemed to have a ratio of 1 or more for purposes of this clause (ii).. . "Electricity Licence" means the Licence in the form oiAnnex D, issued, or to be issued, in accordance With Section 4(1) of the Electricity Ordinance and pursuant to Section 8.10. "Electricity Ordinance" means. the Electricity Ordinance, 1957, a.<; amended, Of any successor or analogous legislation. "Emergency· Maintenance Loan" means amounts that CDCPLC is obligated to lend to Songas, from time to time, pursuant to Section 7.4. "Emergency Maintenance Loan Promissory Note" means a note in the form set out in Annex B evidencing the Emergency Maintenance Loan. "Escrow Account" means the account established by GOT pursuant to the Escrow Agreement. . "Escrow Agent" means Citibank Tanzania appointed pursuant to the Escrow Agreement or any successor agent thereunder. "Escrow Agreement" means· the Amended and Restated Escrow Agreement by and among GOT, Ocelot Tanzania (now Globeleq Somanga), AES Tanzania (now G10beleq Tanzania) and Citibank Tanzania. dated on or before the date of Financial Closing, as the same may be amended from time to time. "Estimated Shared Project Costs" has the meaning established in the Power Purcha.-;e Agreement.· . "Expatriate Employee" means any employee of Songas or its Contr.u:tors not normally resident in Tanzania as more particularly defined in the lncome Tax (Exemption) Expatriate Staff Engaged in the Petroleum and Mining Industry Order, Government Notice No. 411, in the Governrnent Gazette on August 15, 1986. published "Fair Trade Practices Act, 1994" or "FIPA" means the Fair Trade Practices Act, 1994. as amended, or any successor OT analogous legislation. . "Financial Closing" has the meaning established in the Shareholders' Agreement. "Financing Agreements" means the Escrow Agreement, Hard Currency Agreement, IDA Songo Songo Development Credit Agreement, Em Finance Contract, Loan Assumption Agreement, Liquidity Facility Agreement, Sinking Fund Agreement, Subsidiary· Loan Agreements, Debenture. Songas Project Agreement and any other agreement, other than the LONDON • 46192.03 5 ~ Basic Agreements, that is required to be executed at the Financial Closing in connection with the financing of the Project, as the same may be amended from time to time. "Force M;ycure Event" has the meaning established in Section 14.1. "FTPA Order" means an order issued by the applicable Government Entity pursuant to Sections 42 or 43 of the FTPA or any analogous provision therein, that .sets a ceiling on or otherwise limits the tariff and other amounts that Songas is permitted to charge T ANESCO or TANESCO is permitted to pay to Songas under the Power Purchase. Agreement, with the effect that TANESCO is prohibited from paying to Songas, in any given month, the full amount of the tariffand other amounts payable calculated In accordance· with Article IX and Annex F of the Power Purchase Agreement. "Gas Agreement" means theagreement.ofthat name by and among GOT, TPDC, Songas and PanAfrican Tanzania, dated as of 11 October 2001, as the same may be amended from time to time. means the Gas Production F acHities, the Processing Plant, the Pipeline and the "Gas Processing and Transportation Agreement" means the agreement of that name by and between SongaS and PanAfrican Tanzania, dated as of II October 2001, as the same may be amended from time to time. "Gas Production Facilities" means onshore and offshore production wells (including stepont wells, infill wells, delineation wells and exploratory wells), onshore and offshore flow lines and such other gas production facilities as may be necessary to supply the Protected Gas to the Processing Plant, all as more particularly described in Annex G to the Power Purchase Agreement. "Globeleg Q&M" means a limited liability company to be organised under the Laws of Tanzania to provide operations and maintenance services to Songas, which company shall. be a Songas Contractor. "GlobeJeg Somanga" means Globeleq Somanga Ltd., successor by change of name to Ocelot Tanzania, a corporation organized under the laws of Jersey, with its principal office located in. S1. Helier; Jersey, Channel Islands and any permitted transferee of its shares in accordance with the Shareholders' Agreement. "Globeleg Tanzania" means Globeleq Tanzania Limited, successor by change of name to AES Tanzania, a corporation organized under the laws of Bermuda. with its registered office in Hamilton, Bermuda, and any permitted transferee of its shares in accordance with the Shareholders' Agreement. "Good Oilfield Practices" means the oilfield practices (iricluding gas field practices) generally followed by the petroleum industry in the United Kingdom, as such practices may be applicable in Tanzania having regard to geology, marine science, engineering, environmentsl, safety and operational considerations. ~ Ak 6 LONOON ~ 46792.0,1 "Good Pipeline Practices" means fue pipeline practices normally followed byfue pipeline industry in fue United Kingdom., as such practices may be applicable in Tanzania, having regard to engineering, geology, topography, environmental, safety and operating considerations, including manufacturers' recommendations. . means the Government offue United Republic of Tanzania. "GOT' "GOT Action or Inaction" means fue action or inaction of GOT or any Government Entity, ofuer than a Change in Law, which actioil or inaction is inconsistent with the Basic Agreements or fue Financing Agreentents and which action or inaction has a. Material Songas Effect. . "GOT Special Event" has fue meaning established in Section 16.2. "Government Entity" means any central, local or other governmental authority (including regulatory authorities and administrative bodies) with jurisdiction over Songas, the Project or any part thereof, and any department, authority, ministry, commission, instrumentality or agency of GOT or any central, local, or other governmental authority and any subdivision of any such governmental authority . . "Hard Currency~ means Dollars, or in the event that Shillings carmot be converted into Dollars at the Commercial Rate, any of Swedish Krona, Norwegian Krone, Euras, Japanese Yen Pounds Sterling. or British "Hard' Currency Agreement" means the Amended and Restated Hard Currency Agreement by and among GOT, Ocelot Tanzania (now Globeleq Somanga), AES Tanzania (now GJobeleq Tanzania), Citibank Tanzania and Citibank, NA., dated on or before the date of Financial Closing, as the same may be amended from time.to time. "Hard' Currency Reguirentents"has the meaning established in the Shareholders' Agreement. "Initial Shareholders" has the meaning established in the Shareholders' Agreement. "Initial Term" has the meaning established in the Power Purchase Agreentent. "Insufficiency" means an insufficiency of the natural gas reserves available to supply Protected Gas pursuant to Section 13.2 of the Gas Agreentent. "Interbank Rate" means the mte designated as such by the Bank of Tanzania,. which rate reflects on each Bltsiness Day the weighted average rate at which Dollars and Shillings were converted into one another in the interbank foreign exchange market in Tanzania on the preceding Business Day, or any replacement therefor. "L1lJ!Se of Consent" means any Consent (i) ceasing to remain in full force and effe<--t or (n) not being issued or renewed upon application having been properly and timely made and diligently pursued or (iii) being made subject, subsequent to its grant, upon renewal or ofuerwise, to any terms or conditions that, in' any case, have a Material Songas Effect, in each of fue above instances furough no fault of Songas. .§\ Ak 7 c "Laws of Tanzania" means the laws of Tanzania, and all orders, rules, regulations and decrees thereunder, published written policies of any Government Entity, judgments and notifications made pursuant thereto, as such laws, orders, rules, regulations, decrees, policies, judgments and notifications may be modified, vacated or amended from time to time. "LIBOR" means the London Interbank Offered Rate tor six month deposits of Buro Dollars displayed on page "LffiOROl" of the Reuters Money Rates Service (or any other page that replaces page "Lffi ORO I "for the purposes of displaying the British Bankers Association (BBA) interest settlement rates for such deposits of Euro Dollars in the London Interbank market) on the date of cletermination, or in the event the Reuters Money Rates Service, or a successor thereto, no longer provides such information, such other service as may be agreed by the Parties that provides BBA interest settlement rates for such deposits of Buro Dollars in the London Interbank market and any other required information previously provided on the page "LffiORO!". "Liquidity Facility" means the account that '\\ill be established by GOT pursuant to the Liquidity Facility Agreement. • 1 Ul acll Songasand the Liquidity Facility agent named therein, dated as of II October 2001, as the same may be amended from time to time. "Loan Agreements" means each of the Subsidiary. Loan Agreements and the Loan Assumption Agreement. "Loan Assumption Agreement" means the agreement of that name by and among GOT, TANESCO and Songas, dated as of 11 October 2001, as the same may be amended. from time to time. "Loss" means any and all loss, damage, liability, payment or obligation (excluding any indirect or consequential loss, damage, liability, payment or obligation), and all expenses (including reasonable legal fees). - "Major Contract" means any contract entered into by Songas for goods or serviCes, under I~ which contract Songas' obligations in anyone calendar year exceed US$5 million. "Material Songas Effect" means a material and adverse effect on (i) Songas or its ability to perfurm its obligations or exercise its rights under any Basic Agreement or Financing Agreement, (ii) the design, construction, financing, ownership, operation or maintenance of the Project, or, in case of damage, the restoration ot: the Complex, the Gas Facilities or any filcilities needed for the operation of the Project or (iii) the interests of the Preferred Shareholders or the return (net of tax or other impositions) ofor on their investment in the Project. "Minister" means the minister of1he MinistrY. "Ministry" means the Ministry of Energy and Minerals of GOT or, in the event the name or responsibility of such MinistrY should be changed, whichever ministry (or regulatory body. as the context may require) of GOT is charged with the responsibility for petroleum resources or electricity, as the case may be. .§ AK 8 LONDON .46792.03 "Notice of Contract Event" means the notice given by one Party to the other Parties to Section 16.4(a). pursuant "Notice of Intent to Terminate" means the notice given by one Party to the other Parties pursuant to Section 16.4{b). "Notice of Termination" means the notice given by one Party to the other Parties pursuant to Section 14.5 or 16.4(d). ~ "Ocelot TanZAAia" means Ocelot International Tanzania Ltd., a corporation organized under the laws ofJersey, with its principal office located in St Helier, Jersey, Channel Islands, and any permitted transferee of its shares in accordance with the Shareholders' Agreement "PanAfrican Tanzllnia" means PanAfrican Energy Tanzania Limited, a corporation organised under the laWs of Jersey with its principal office located in St. Helier, Jersey; Channel Islands, and any permitted assignee of its rights under the (}dS Agreement "PanAfrican" means P AE PanAfrican Energy Corporation, a corporation organised under the laws of Mauritius, with its principal office located.in Port Louis, Mauritius. "PanAfrican Event QfDefaUlt" has the meaning established in Section 16.3(a). "Parastatal Action or Inaction" means the action or inaction of any Parastatal Entity, which action or inaction is Inconsistent with the Basic Agreements or the Financing Agreements and.'Which action or inaction bas a Material Songas Effect; provided; however, that no such action or inaction shall be considered a Parastatal Action or Inaction ifsuch Parastatal Entity is acting within the scope of its rights and obligati.oDS under the Basic Agreements and Financing Agreements or any transaction with Songas where Songas has chosen to enter into such transaction with the Paras1atal Entity notwithstanding the existence of commercially reasonable alternatives. "Parastatal Entity" means any Person owned or controlled by GOT or any Government Entity. "Parent Companies" means PanAincan and CDCPLC. "I1!ny" or "Parties" means any of the signatories to this Agreement. "Person" means an individual, corporation, partnership, joint venture, trust, unincorporated organization, Goveroment Entity or any other legal entity. "Pipeline" meanS the natural gas transportation pipeline to be constructed from the Processjng Plant to the Complex, as more particularly described in Aunex G to the Power Purchase Agreement. "Political Event" has the meaning established in Section 14.5. "Power Purchase AgreemenC means the agreement of that name by and between T ANESCO and Songas, dated as of 11 October 2001, as the same may be amended from time to ~. ~ AK- 9 C "Preferred Shares" means the Series A Preferred Shares and Series B Preferred Shares authorized to be issued by Songas. "Preferred Shareholders" means the holders of the Series A Preferred Shares and Series B Preferred Shares outstanding from time to time. "Prescribed Fee" means, v.-ith respect to any Consent, the charge or fee, if any, prescribed by the Laws of Tanzania. "Prescribed Form" means, with respect to any Consent, the form, if any, (including all infOrmation and detailS) presen'bed by the Laws of Tanzania for the application for, or renewal of, such Consent . . "Processing Plant" means the natural gas processing plant to be constructed on Songo Songo Island, as rnore particularly described in Annex G to the Power Purchase Agreement, or any replacement facility . . "Pro' eet"meansthedevelopment, design, construction, financing, ownership,· operation and maintenance of a unified gas an e ec c· . ,'. . Songa Gas-tO-Electri.city Project, including the transfer to Songas of certain ofTPDC's facilities on and around Songo Songa Island; the development, production and processing of ruituraI gas on and around Songo Songo Island under a Development Licence, certain rights under which are assigned by TPDC to Songas; the construction of a gas processing facility and a gas transportation pipeline from Songo Songo Island. to the Complex and the Wazo Hill Cement Plant; the conversion of the turbines at the Complex to natural gas operation; the transfer of the Complex from TANESCO to Songas; the operation of the Complex by Songas and the sale to T ANESCO of the capacity and. the electrical· output of the Complex; and the sale of natural gas by Songas to the Wazo Hill Cement Plant. "Promissory Notes" bas the meaning established in the Shareholders' Ag1"eernent "Prote<.ied Assets" means the Grid System (as soch term is defined in the Power Purchase Agreement), electric distn'bution assets, any other assets necessary for T ANESCO to fulfill. its duties under the Electricity Ordinance, and. assets protected by diplomatic and coosular privileges under the 1978 Immunity Act of the United Kingdom ami the 1976 Sovereign Immunities Act of the United States or any successor or analogous legislation . . "Protected Gas" bas the meaning established in the Gas Agreement "Prudent Utility Practices" means the prudent utility practices followed frorntirne to time by the electric utility industry in the United Kingdom, as such practices may be applicable in Tanzania, having regard to engineering, environmental, safety, reliability and operational considerations, including manufacturers' recommendations. "Required Commercial Operations Date" means the date that is 31 months after the date of F inandal Closing, as the sarne may be extended in accordance with the terms of the Power Purchase Agreement "Series A Preferred Shareholders" means the holders of the Series A Preferred Shares A J: outstanding from time to time. 3 10 C L I I "Series A Preferred Shares" means the Series A Preferred Shares authorized to be issued by Songas. "Series B Preferred Shareholders n means the holders of the Series B· Preferred Shares outstanding from time to time. "Series B Preferred· Shares" means tlie. Series B Preferred Shares authorized to be issued bySongas. "Shareholders" means those Persons holding Preferred Shares or Common Shares in Songas from time to time. "Shareholders' Agreement" means the agreement of that name by and among GOT, Songas andthe Initial Shareholders, dated as of 11 October 2001, as the same may be amended from time to time. . "Shilling" or "TSh" means the currency that is the legal tender of the United Rep)lblic of Tanzania. "Shortfall Amount" means for each month in which the FTPA Order is in effect, the difference between: (i) the tariff and other amounts due and payable pursuant to Article IX and Annex F of the Power Purchase Agreement, for such month, calculated as if the FTPA Order had not been made; and (ii) the amount that TANESCO is permitted to pay to Songas under the FTPA Order for such month. "Sinking Fund Agreement" means the agreement of that name by and among GOT, Songas, TANESCOand the Sinking Fund Agent named therein, substantially in the form of Annex J to the Power Purchase Agreement. "Songas" means Songas Limited, a limited liability company incorporated and organized under the Laws of Tanzania, with its principal office located in Dar es Salaam, Tanzania. "Songas Event ofDeflrult" has the meaning established in Section 16.1. "Songas Project Agreement" means the agreement of that name by and. between the International Development Association and Songas, dated as of 11 October 2001, as the same may be amended from time to time. "Songo Songo F acilities Transfer Agreement" means the agreement of that name by and between TPDC and Songas, dated as of 11 October 2001, as the same may be amended from time to time. "Sovereign Event" means the inability of Songas to convert sufficient Shillings into Hard Currency using normal commercial mechanisms to meet its Hard Currency Requirements at a time when there isinsnfficient Hard Currency in the Liquidity Facility to meet Songas' Hard Currency Requirements; provided,· however, that for purposes of this Agreement, Globeleq Somanga and Globeleq Tanzania shall not be required to use Hard Curreucy held in the Escrow Aecount to convert such unconverted Shillings. ~ LONDON ~ 46792,03 11 «Subsidiaty Loan Agreements" means the On-Lending Agreement (EIB) and the Subsidiary Loan Agreement (IDA) by and between GOT and Songas,dated as of 11 October 2001, as the same may be amended from time to time. "TANESCO" means the Tanzania Electric Supply Company Limited, a limited liability company incorporated under the Laws of Tanzania, with its principal office 10cated in Dar es . Salaam,Tanzania, and its permitted successors and assigns in accordance with Section 8.7 ofthls Agreement. "Target Equity" has the meaning established in the Shareholders' Agreement. "TllriffProject Costs" has the meaning established in the Power F'urchase Agreement. "Technical Dispute" means a dispute that relates to a technical, engineering, operational or accounting $lttterrelatedto this Agreement, that in any case, is of the type susceptible to resolution by an experi in the relevant field. "TIDC" means the Tanzania Petroleum Development Corporation, a statutory -" -- --' -,- t_ -:'-- _.- ;"L_ r _~. .....&'_-T ... _ ...... _~ unfl.. -it ""';n 1~1 off"'ice_ . Dar: es SallIl!!I4 Tanzania, and its permitted successors and assigns in accordance with Section 8.7 of this Agreement. "Transfer Date" means the last day of the month in which the Commercial Operations Date occurs. "Ubungo Complex Transfer Agreement" means the agreement of that name by and between TANESCO and Songas, dated as of 11 October 2001, as the same may be amended from time to time. "Uncured Political Event" means aPolitical Event that is not cured within the· time periods specified in Section 14.5. "WtlZQ Hill Cement Plant" bas the meaning established ill the .Power Purchase Agreement. "Wazo Hill Gas Sales Agreement" bas the meaning established in the Power Purchase Agreement. "w WzJ) Hill Lateral" means the natural gas transportation pipeline to be constructed from the Pipeline to the Wazo Hill Cement Plant, as described. in Annex G to the Power Purchase Agreement 1.2. Rules ofInterpretanon. In this Agreement, unless the context requires otherwise: (a) the headings are for convenience only and shall not be considered in construing this Agreement; (b) the singular includes the plural and vice versa; 12 I I (c) references to Articles, Sections, Schedules and Annexes are references to Articles and Sections of, and Schedules and Annexes to, this Agreement; (d) the tenns "include" and "including" mean without limitation; (e) the term "day" shall mean a 24-hour period starting and ending at .12:00 midnight Tanzania time; the term "week" shall mean a seven-day period beginning and ending on Sunday at 12:00 midnight Tanzania time; the term "month" shall mean a calendar month, and the term "year" shall mean a calendar year; .. . (f) . in the event of any conflict between the provisions of this Agreement and any Annex, the provisions of this Agreement shall prevail; and (g) the Parties acknowledge that all matters relating to the Implementation Agreement will be governed solely by the terms of this Amended and Restated Implementation Agreement .. LONDON -46792,OJ 13 ARTICLED IMPLEMENTATION OF THE PROJECI' BY SONGAS 2.1. Compliance with Laws of Tanzania and Agreements. Songas shall design. construct, own, operate and maintain the Project in aecordance with all applicable Laws. of T an:zania, all applicable Consents, and its obligations under the Power the Gas Agreement, the Gas Processing and Transportation Agreement, the Purchase Agreement, Songas Project Agreement, the Subsidiary Loan Agreements, the Loan Assumption Agreement and the Sinking Fund Agreement. In the event that an FTPA Order is issued, S()ngas shall: (I) notifY GOT of the issuance of such order within 5 Business Days of Songas becoming aware· of suchFTPA Order; and (ii) take colIlIliercially reasonable actions to have such order annulled, revoked or suspended; provi!fui, however, that no delay in providing such notice pursuant to the preceding clause (i) and nothing in the preceding clause (n) (including any delay in or failure to have. such order annulled, revoked Of suspended) shall suspend or otherwise affect. the GOT's obligations to compensate Songasfbr the monthly Shortfall Amount under Section 8.11 or limit or otherwise adversely affect the visions of Section 14.5. 2.2. Contracting. (a) Songas may delegate its responsibilities tv design, construct, operate and maintain the Project to one or more Contractors as provided in the Basic Agreements. (b) Songas shall submit to GOT its list of all pre-qualified or invited bidders selected by Songas for Major Contracts no later than 21 days prior to issuing an invitation to bid. GOT may advise Songa.~ of its objections to any bidder within seven days thereafter. Songas shall consider such objections but will be wder no obligation to disqualifY any bidder based on such objections. (c) Songas shall provide GOT with a copy of any Major Contract not later than 30 days following the execution thereof. Songas shall provide GOT with a copy of any amendment to any Major Contract that results in a material change or a change in a major piece of equipment as to either its company or country of manufacture not later than. 30 days following the eJ{ecution thereof: (d)Songas shall at all times remain liable for the performance of its ohligationsunder the Basic Agreements notwithstanding any delegation to any Contractor. 2.3. Required Arrangements. Except to the extent that the Basic Agreements or Financing Agreements specifically assign responsibilities or obligations to other Persons, Songas shall make all necessary arrangements to enable it to carry out its obligations under the Basic· Agreements and the Financing Agreements. LONDON" 46-191.03 14 2.4. Environmental Protection. Health and Safetv. (a) Songas shall at all times comply "lith all applicable Laws of Tanzania and the applicable requirements of Annex G to the Power Purchase Agreement regarding environmental protection, health and safety. (b) Songas shall promptly notify GOT of any enVironmental accidents or emergencies and shall report periodically, but in no event less frequently than annually. .on remediatioQ. programmes and emergency response plans fur envirorunentalirnpact from the operations of the Project. . (c).In the event of an environmental accident or emergency, Songas shall issue a report t'1 GOT, no less frequently than weekly, assessing the environmental damage and updating the status of the remediation programme until the completion of such remediation. AK 15 LONDON·46792,03 C AltTICLEID PERMITS AND APPROVALS 3.1. Applications by Songas for Consents. Songasshall make or cause to be made, in a timely fashion, all applications (whether . initial or renewal applieations) for all Consents listed on Annex A and for such Consents not listed on Annex A where, after the date of this Agreement, itis determined that such Consents are required. Such Consents shall be applied for as soon as reasollably practicable after learning of such requirement, and, in each case, shall be submitted in the Prescribed Formant! with the Prescribed Fee, to GOT and any relevant Government Entities, as appropriate,and Songas shall diligently pursue all such applications. The infonnationsupplied in the applications shall be complete and accurate .and shall satisfy the substantive and procedural requirements of the appli.cable Laws of Tanzania. 3.2. Status of Consent Applications. Date and at least quarterly thereafter, reports listing its schedule for submitting Consent application forms or renewal application forms, the status of anyConsentapplieations then outstanding, notifications of the grant, renewal or denial of any Consent and notifications of any violations of any Consent. Each report shall include copies of all applications and notifications discussed in the report. The first section of each report shall also summ~ any problems regarding any material Consent or Consent application that may affect Songas' performance under any Basic Agreement or Financing Agreement. In the event of any Lapse of Consent, Songas shall submit a report pursuant to this Section 3.2 within 10 Business Days thereof unless such Lapse of Consent could not reasonably be known toSongas without notification from the issuing Government Entity, in which case Songas shall submit a report pursuant to this Section 3.2 within 10 Business Days of such notification. 3.3. Support to Obtain Consents. Subject to Songas' timely submission of the reports required by Section 3.2, and upon request of Songas, GOT shall support and use all reasonable efforts to expedite and assist in resolving any difficulties with regard to the consideration of the applications for the Consents filed pursuant to Section 3.1 and the timely issuance thereof by GOT or other relevant Government Entity. Any request for support shall be accompanied by copies oftbe application for the Consent, any notice that the Consent was denied or deferred, and a statement of Songas' efforts to date to obtain the Consent. 3.4. Conditions to Consents. Subjed to the provisions of Section 8.6, GOT or relevant Government Entity may attach such terms and conditions to the issuance or renewal of any of the Consents as are in accordance with the Laws of Tanzania, and the attachment of such terms and conditions shall not in and of itself constitute a breach of this Agreement by GOT. Songas and the Contractors shall abide by all such terms and conditions. If Songas or any of the Contractors fails to abide by any term or condition of any Consent, then the exercise by GOT or relevant Government Entity of a power AI( 16 ~. L pursuant to the Laws of Tanzania in respect of such failure shall not of itself constitute a breach of this Agreement by GOT or a Force Majeure Event; provided, however, that if (i) within two years of the Transfer Date, Songas, GOT or any relevant Government Entity determines that a Consent not listed on Annex A is required to be obtained by Songas or its Contractors from GOT or such Government Entity or (Ii) there is a default in the compliance with any term or condition any Consent at .the time such Consent is transferred to Songas or its Contraetors or as a result of of a condition in existence at the Transfer Date, then to the fullest extent permiUed by the Laws of Tanzania; GOT shall not,and GOT shall ensure that no Government Entity shall, exercise any pursuant to the. Laws of Tanzania with respect to such failure (including the termination or power revocation of any existing Consent or the imposition of fines and penalties) unless Songas or such Contractor(s),· as the caSe. may be, shall have first been given written notice of such . requirement or failure (which notice shall specify, in reasonable detail, the nature of such requirement or failure) and Songas or such Contractor(s), as the case may be, are given the opportunity and fail within a reasonable period of time after receipt of such notice to so rectifY, remedy,. comply with or cure such requirement or failure; provided further, that nothing in this Section 3.4 shalllirnit GOT or any Government Entity from taking any aCtion in relation to such failure in accordance with the Laws of Tanzania to require Songas or its Contractors to cease operating the Project in the case of an imminent threat to the environment or to the health and of the public or of Songas' employees. safety 35. Liaison. (a) Songas shall appoint at least one member of its staff to be available to GOT and other Government Entities to consult on and expedite resolution of any problem or issue that may arise GOT or any Government Entity. relating to (b) 'The Ministry shallappoillt one senior employee and two alternate senior employees who shall act as liaison between Songas and each Government Entity that has obligations to Songas under any Basic Agreement or Financing Agreement or any of the Consents and who shall be charged with providing reasonable assistance to Songas in expediting resolution of any problem or issue that may arise relating to that Goveinment Entity. 17 ~ AK tONDON . 4619Z,/}3 C I I ARTICLE IV REPRESENTATIONS AND WARRANTIES 4.1. GOT Representations and W~es. As of the date hereof, GOT hereby represents and warrants to the other parties that: (a) The Ministet has the full power and authority to execute and deliver this Agreement on behalf of GOT. GOT has full power and authority to perform its obligations hereunder. The execution, delivery and performance of this Agreement by GOT (i) has been duly authorized by all requisite action on the part of GOT and any applicable Government Entity and (li) will not (A) violate the Laws of Tanzania or any applicable order of GOT, any Government Entity or court or (B) violate, be in conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any indenture, agreement for borrowed money, bond, note, instrument or other agreement to which GOT is a party or by which GOT or its property is . hound, excluding defaults or violations .that would not, individually or in the aggregate, have a materialllliverse effect on the properties or financial condition of GOT or on its ability to perform its obligations hereunder. s • • •. -, ..• L_ Minister on behalf of GOT. (b) Assuming it constitutes a legal, valid and binding obligation of each of the other Parties, this Agreement constitutes a legal, valid and binding obligation of GOT enforceable against it in accordance with its terms snbjectto general principles of equity. (c) No filing or registration with, no notice to and no permit, authori:r.ation, consent or approval of any Person is required for the execution, delivery or perfurmance of this Agreement by GOT except for such permits, authorizations, conscots or approvals as have.been obtained. (d) GOT is not in default under any agreement or instrument of aily nature whatsoever to which it is a party or by which it is bound in any manner that would have a material adverse effect on its ability to perform its obligations hereunder or the validity or enforceability of this Agreement. (e) Except as otherwise disclosed in writing on or prior to the date hereof, there is no action, suit, proceeding or investigation pending, or to GOT's knowledge, threatened, against GOT which, if adversely determined, would have a material adverse effect on its ability to perform its obligations hereunder or the validity or enforceability of this Agreement. 4.2. PanAfrican Representations and Warranties. As of the date hereof, PanAfrican bereby represents and warrants to the other Parties that: (a) PanAfrican is a corporation duly organized, validly existing under the laws of Mauritius and has all requisite corporate power and authority to own or lease and operate its properties and carry on its business as now being conducted and as presently proposed to be conducted. (b) PanAfrican has full corporate power and authority to execute and deliver this Agreement and to perfurm its obligations hereunder.· The execution, delivery and performance Ak' 18 ~ C of this Agreement by Pll1lAfrican (i) has been duly authorized by all requisite corporate action on the part of Pll1lAfrican, and no other proceedings on the part of PanAfrican or any other Person are necessary for such authorization and (ii) win not (A) 'violate (1) the Laws of Tanzania, any otherapplieable law, or any applicable order of any Govermnent· Entity or any other govermnental agency. authority or court having jurisdiction over PanAfrican or. its properties or (2) anypro'vision of the Memorandum and Articles of Association ofPanAfrican or (B) violate, be in conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a defirult under auy indenture, agreement for borrowed money, bond, note, instrument or other agreement to which itis a party or by which its properties are bound, excluding defaults or 'violations that would not, individually or in the aggregate, have a material adverse effect on the business, properties, financial condition or results of operation of PanAfrican or on its ability to perform its obligations under this Agreement This Agreement has been duly executed and delivered by PanAfrican .. (c) Assuming it constitutes a legal, valid and binding obligation of each of the other Parties, this Agreement constitutes a legal, valid and binding obligation of PanAfrican, enforceable against it· in accordance with its terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect relating to creditors' rights and (ii) to general principles of equity. ; (d) To the best of its knowledge, after fe-&SOnable inquiry, no filing or registration with, no notice to and no permit, authorization, consent or approval of any Person is required. for the execution, delivery or performance of this Agreementby PanAfrican, except for (i) such permits, authorizations, consents or approvals that have been obtained and are in full force and effect; (ii) Of approvals as may be required in the future, which will such permits, authorizations, consents be applied for in due course and diligently pursued; and (iii) such permits; authorizations, consent~or approvals that after the date of this Agreement are deterruinedto have been required, which permits, authorizations, consents or approvals PanAfrican shall apply for as soon· as practicable after learning of such requirement and diligently pursue. (e) ·PanAfrican is not in default under any agreement or instrument of any nature whatSoever to which it is a party or by which it is bound in any manner that would have a material adverse effect on its ability to perform its obligations hereunder or the validity or enforceability of this Agreement (f) Except as otherwise disclosed in writing on or prior to the date hereof. there is no action, suit, proceeding or investigation pending or, to the knowledge of PanAfrican, .threatened (i) for its dissolution or (ii) against it, which. if adverselydeterrnined, would have a material adverse effect on its ability to perform its obligations hereunder or the validity or enforceability of this Agreement. (g) PanAfrlcan represents that it has not paid or received, or undertaken to payor receive, any bribe, pay-off, kick-back. or unlawful commission and has not in any other way ormanner paid any sums, whether in Tanzanian Shillings or foreign currency and whether in Tanzania or abroad, given or offered to pay any gifts and presents ill Tanzania or abroad, to any Person to procure this Agreement. PanAfrican undertakes not to engage in any of these or similar acts during the term of this Agreement· . 19 Ale LONDON: 46192.Q3 4.3. CDCPLC Representations and Warranties. As of the date hereof, CDCPLC hereby represents and WlllTlIIlts to the other Parties that: (a) CDCPLC is a corporation du1y organized and validly existing under the laws of England and Wales and has all· requisite corporate power and. authority to own or lease and . operate its properties and carry on its business as now being condUcted and as presently proposed to be conducted. . . (b) CDCPLC has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution,. delivery and perfonnance of this Agreement by CDCPLC (i) has been du1y authorized. by all requisite corporate al-1.ion on the part of CDCPLC, and no other proceedings on the part of CDCPLC or any other Person are necessary for such authorization and (ti) will not (A) violate (1) the Laws ofTanzania, any other applicable law, or any applicable order of any Goverrunent Entity or any other governmental agency, authority or court having juriSdiction over CDCPLC or its properties or (2) any provision of the. Memorandum of Association or Articles of Association of CDCPLC or (8) . violate, be in conflict with, resu1t in a breach of or constitute (with due notice. or lapse of time or both) a defa t r any , agreemenn orr • , ~ __ L __ 4_, ,--~.- • ~ other agreement to which it is a party or by which its properties are bound, excluding defau1ts or violations that wou1d not, individually or in the aggregate, have a material adverse effect on the business, properties, financial condition or results of operation of CDCPLC or on its ability to perform its obligations under this Agreement. This Agreement has been duly executed and delivered by CDCPLC. . (c) Assuming it constitutes a legal, valid and binding obligation of each of the other Parties, this Agreement constitutes a legal, valid and binding obligation of CDCPLC. enforceable against it in accordance with its tenilS, subject to (i) bankruptcy, insolvency, reorganization, moratorium, or other similar laws nowor hereafter in effect relating to creditors' rights and (ii) to general principles of equity. (d) To the best of its knowledge, after reasonable inquiry, no tiling or registration with, no notice to and no permit, authorization, consent or approval of any Person is required for the execution, delivery or performance of this Agreement by CDCPLC, except for (i) such pennits, authorizations, consents or approvals that have been obtained. and are in full force and effect; (ii) such permits, authorizations, consents or approvals as may be required in the future, which will be applied for in due CO!I!se and diligently pursued; and (iii) such permits, authorizations, consents or approvals that after the date of this Agreement are determined to have been required, which permits, authorizations, consents or approvals CDCPLC shall apply. for as soon as practicable after learning of such requirement and diligently pUrsue. (e) CDCPLC is not in default under any agreement or instrument of any nature whatsoever to which it is a party or by which it is bound in any manner that would have a material adverse effi:ct on its ability to perform its obligations hereunder or the validity or enforceability of this Agreement. (f) Except as otherwise disclosed in writing on or prior to the date hereof, there is no investigation pending or, to the knowledge of CDCPLC, threatened (i) action, suit, proceeding or for its dissolution or (ii) against it, which, if adversely determined, would have a material adverse 20 ~ LONOON ~ 46792.03 ( effect on its ability to perform its obligations hereunder or the validity or enfurCeability of this Agreement. . (g) CDCPLC represents that it bas not paid or received, or undertaken to payor receive, any bribe, pay-off, kick-back, or unlawful commission and bas not in any other way or manner paid any sums, whether in Tanzanian Shillings or foreign. currency and whether in Tanzania or abroad, given or offered to pay any gifts and presents in Tanzania or abroad, to any Person to procure this Agreement CDCPLC undertakes not to engage in any of these or similar acts during the term of this Agreement 4.4. Songas Representations and Warranties. As of the date hereof, Songas hereby represents and warrants to the other Parties that: (a) Songas is a company limited by shares, duly organized, validly existing under the Laws of Tanzania, and has all requisite corporate power and authority to own. or . lease and operate its properties and to carry on its business as now being conducted and presently proposed to be conducted, (b) Songas has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance of this Agreement by Songas (i) bas been duly authorized by all requisite corporate action on the part of Songas, and· no other proceedings 00 the part of Soogas or any other Person are oecessary for such authorization, and (ii) will oot (A) violate (I) the Laws of Tanzania or any applicable order of GOT, any Goveroment Entity or court or (2) ·any provision of the Memorandum and Articles of Association of Songas or (B) violate,· be in conflict with, result in a breach of or constitute due notice or lapse of time or both) a defuuJt under any indenture, agreement for borrowed (with money, bond, note, instrument or other agreement to which Songas is a party or by which Songas or its property is. bound, excluding defaults or violations· that would not, individually or in the aggregate, have a material adverse effect on the business, properties, financial condition or results of operation of Songas, or on its ability to perform its obligations hereunder. This Agreement has been duly executed and delivered by Soogas. . (c) Assuming it constitutes a legal, valid and binding obligation of each of the other Parties, this Agreement constitutes a legal, valid and binding obligation of Soogas, enforceable against it in accordance with its terms, subj~ ,to (i) bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect reJating to creditors' rights and (ii) to general principles of equity. (d) To the best of its knowledge, after reasooable inquiry, no filiogor registration with, no notice to and no permit, authorization, consent or approval of any Person is required for the execution, delivery or performance of this Agreement by Songas, except for (i) .the Consents that bave been obtained and are in full force and effect; (ii) h-uch Consents as may be required in the future, which will be applied for in due course and diligently pursued; and (iii) such Consents not listed on Annex A to this Agreement thatafter the date of this Agreement are determined to have been required, which Coosents Songas shall apply for as sooo as practicable after learning of such requirement and diligently pursue. AK LONDON ~ 46791.03 21 c L (e) Songas is not in default under any agreement or instrument of any nature whatsoever to which it is a party or by which it is hound in any manner .that would have a material adverse effect on its ability to perform its obligations hereunder or the validity or enforceability oftrus Agreement. . (f) Except as oth.crwise disclosed in writing on ot prior to the date hereof, there is no action, suit, proceeding or investigation pending or, to Songas' knowledge, threatened (i) for the dissolution of Songas, or (ii). against Songas, which, if adversely determined, would have a material adverse effect on its ability to. perform its obligations hereunder or the validity or enforceability of this Agreement. .. 22 LONDON ~ 46192.03 L I I ARTICLE V EMPLOYMENT, TRAINING AND TANZANIAN RESouRcES 5.1. ElnploYmentofTanzanians. \a) The Panies recognize that training citizens ofT anzania in tl:lI': design, construction, instaJlation, operation, maintenance and management of the Project and maximizing technology transfer are central to the interests of GOT in the Project.. Songas shall therefore employ, and shall procure that Globeleq O&M and PanAfriean Tanzania (to the extent it is a Songas Contractor) employs citizens of Tanzania for the construction, installation, operation, maimenanceand management of the Project to the maximum extent reasonable, taking into consideration availability and the required skills. (b) Songas shall submit reports annually to the Ministry and to the Songas Board of Directors detailing the progress made toward meeting the objectives set forth in Section 5.1(a). 5 .2. Training. (a) In accordance with the Power Purchase Agreement and the Gas Agreement, Songas and Globeleq O&M and PanAfriean Tanzania, as applicable, shaUinclude employee training programmes as required in the normal conduct of its business, which training programmes shall from time to time include training in each of the skills used in the planning, design, construction, operation and maintenance of the Project and training in management for those employees qualified for management training. The training programmes shall from time to time focus.both on technicai and administrative matters, including contract administration. Consistent with the Fixed O&M expenses as defined in andestab1ished pursuant to Annex F to the Power Purchase Agreement, the cost of such employee training by Songas, Globeleq O&M Of.PanAfrican Tanzania, will be a normal cost of business included in such Fixed O&M expenses. (b) Soogas shall submit reports annually to the Ministry describing in detail its employee training programmes, the implementation of such training programmes and the amounts spent on such training programmes. 5.3. Tanzanian Resources. (a) Subject to the procurement requirements of lending and funding institutions, Songas shall give preference to the purchase of Tanzanian goods and materials fOf use in the Project; provided, however, that such goods and materials are of an acceptable quality and are available on a timely basis in the quantity required, on competitive terms. (b) Subject to the procurement requirements of lending and funding institutions, Songas shall also give preference to the employment of Tanzanian service contractors as far as they are· financiaily and technically competent, possess the necessary skills to perform the work required contractors are available ona timely basis and on competitive terms. by Songas and such (c) Songas shall establish appropriate tender procedures for Tanzanian goods, materials and services, taking into account Tanzanian local market conditions and enabling Tanzanian contractors to bid to supply such goods and ma1erials and to provide such services. ..5 AIL LONDON -46192,03 23 C ARTICLE VI INSURANCE 6.1. Maintenance of Specified Policies. Songas shall obtain and maintain insurance from financially strong and nationally or internationally reputable insurance companies in accordance with Article XI of the Power Purchase Agreement and Article XI of the Gas Agreement. To the extent that GOT· can be named as an additional insured on such insurancepoIicies covering the Project, GOT shall be so named by Songas. 6.2. Insurance Proceeds. All Insurance Proceeds (as dermed in the Subsidiary Loan Agreements)· shall be used to repair or restore the Project, except as otherwise provided in the Basic Agreements or the Subsidiary Loan Agreements. . 24 L ARTICLE VII PARENT COMPANY OBLIGATIONS 7.1. OrganiZf!tion of Subsidiaries. (a) PanAfrican has organized PanAfrican Tanzania, all the outstarJding stock of which is held directly or indirectly by PanAfrican. PanAfrican agrees that without the prior approval of GOT, it will not transfer its shares in PanAfrican Tanzania or any subsidiary which directly or indirectly holds shares in PanAfrican Tanzania; provided, however. that the foregoing shall not prohibit PanAfrican from (i) transferring the shares in PanAfrican Tanzania, or any subsidiary which directly or indirectly holds shares in PanAfrican Tanzania, to another subsidiary that is directly or indirectly wholly owned by PanAfrican, or (ii) the pledge of s~ of any subsidiary to the Multilateral Investment Guarantee Agency or otherwise if required in connection with obtaining political risk Of Currency convertibility risk insurance coverage. (b) CDCPLC is the Parent Company of GlobeJeq Tanunia and GJobeleqSomanga, all the outstanding stock of each being held directly or indirectly by CDCPLC. CDCPLC agrees that without the prior approval of GOT, it will not transfedtsshares in G1obeleq. Tanunia, Globeleq Somanga or any subsidiary which directly or indirectly. holds shares in Globeleq Tanzania or Globeleq Somanga; provided. however, that the foregoing shall not prohibit CDCPLC from (i) transferring the.shares in Globeleq Tanzania, Globeleq Somanga or any subsidiary which directly or indirectly holds shares in Globeleq Tanzania or GlobeJeq Somanga, to another subsidiary that is directly or indirectly wholly owned by CDCPLC, or (ii) the pledge of shares of any subsidiary to the Multilateral Investment Guarantee Agency or otherwise if required in connection with· obtaining political risk or' currency convertibility risk insurance coverage. (c) EXcept as provided pursuant to Sections 7.1(a) or 7.1(b), if either PanAfrican or CDCPLC desires to transfer its interests in PanAfrican Tanzania, or G10beleq Somanga, or G10beleq Tanzania, or any subsidiary which directly or indirectly holds shares in PanAfrican Tanzania, or GlobeJeq Somanga, or Globeleq Tanzania, as .thecase may be, itshall provide GOT with the following information shout the proposed purchaser: its name, nationality, . the names and nationalities of all natural Persons who directly or indirectly hold 10% or more of, or exercise influence or control over, the proposed purchaser, audited financial statements for the preceding five fiscal yeats, together with any more recent unaudited quarterly financial statements, a description of its business, specifically relating to its experience with oil and gas production and well operations and servicing (with respect to a proposed transfer by PanAfrican) and specifically relating to pipeline management. and power plant operation (with respect to a proposed transfer by CDCPLC). together with such additional. information as· GOT may reasonably request. GOT shall use such infurmation to evaluate the ability of the prospective transferee to fulfill its financial and managerial obligations, which shall .~ the basis for the approval or disapproval of the transfer. !lIld shall notify the proposed transferor onts approval or disapproval of the transfer within 90 days following its receipt of all the information requested pursuant to the preceding sentence. GOT may condition its consent to a transfer upon specified conditions, including a requirement that the proposed transferee execute an agreement with GOT whereby the transferee agrees to be bound by the substance of this Agreement. For the purposes of this Section 7.1. "transfer" means to sell, assign, pledge or transfer. A ~ LONDON ~46792.{).3 25 ~ 7.2. Equity Guarantee. (a) CDCPLC agrees that it will cause G10beleq Somangato provide equity capital, subject to Article vn of the Shareholders' Agreement, up to the full amount of Globeleq Somanga's equity obligations to Songas pursuant to Sections 2.3; 2.4, 2.6, and 2.7 of the Shareholders' Agreement; (b) CDCPLC hereby agrees that· it will cause GJobeleq Tanzania to provide equity capital, subject to Article vn of the Shareholders' Agreement, up to the full amount ()f G10beleq Tanzania'·s equity obligations to 80ngas pursuant to Sections 2.3, 2.4, 2.6 and 2.7 of the Shareholders' Agreement. 7.3. Pen01'llllUlce Guarantee. (a) Under the .. Shareholders' Agreement, Globeleq Solllilllga and Globeleq Tanzania have agreed to cause Songas to operate the Project in accordance with Good Oilfield Practices, Good Pipeline Practices, Prudent Utility Practices and the Laws of Tanzania, su~ect to the terms and conditions of the Basic Agreements and. Financing Agreements, and under the Gas Agreement, - ., ~ .. _- 'c -- -- ... ~ ~..;~_+~ t'hll.nn "~n on r,,,s Fi" dthe Production Facilities in accordance with Good Oilfield Practices and the Laws of Tanzania. To the extent there is a Loss arising from Songas' failure to operate the Project in accordance with Good Oilfield Practices, Good Pipeline Practices, Prudent Utility Practices and the Laws ()f Tanzania, subject to the terms and conditions of the Basic. Agreements and Financing Agreements, and the Loss is not fully c()mpensated by 8ongas, PanAfrican Tanzania, G10beleq Srnnanga ()f Globeleq Tanzania, or the operation of any applicable insurance coverage, then: . (i) PanAfricanliereby provides, subject to the terms of this Section 7.3(a)(i), a performance and operations guarantee in the amount of US$2,500,000 to ~'Ul'C any Loss where (A) the Loss is occasioned by the gross negligence ()f willful misconduct of PanAfrican, its subsidiaries or any employees of Songas who are or have been employees ofPanAfrican or any of its subsidiaries other than Songas within three years of the Loss and (B) Songas has insufficient funds (including any available insurance proceeds) to both cure such Loss and oper¢e the Proj eet Upon establishment of the amoulit of such Loss, PanAfrican shall pay, upon demand of GOT, an amount up to US$2,500,000 for purposes of curing the Loss; provided, however, that in no event shall the amount payable by PanAfrican pursuant to this Section 7.3(a)(i) with respect to any Loss exceed the amoWlt of such Loss, or with respect to all Losses, exceed in the aggregate US$2,5oo,000 .. (il) CDCPLC hereby provides, subject to the terms of this Section 7.3(a)(ii), a performance and operationS guarantee in the amount ofU8$7,5oo,000 to cure any Loss where (A) the Loss is occasioned by the gross negligence Of willful misconduct of CDCPLC, its subsidiaries or any emplOyees of Songas who are or have been employees of CDCPLC or any of its subsidiaries other than Songas within three years of the Loss and (B) Songas has insufficient funds (including any .availableinsurance proceeds) to both cure such Loss and operate the Project. Upon establishment of the amount of such Loss, CDCPLC shall pay, upon demand of GOT, an amOWlt up to U8$7,500,000 for purposes of curing the Loss; provided, however. that in no event shall the amount payable by CDCPLC pursuant to this Section 7.3(a)(il) with respect to any Loss exceed the A /C- 26. . .-3 LONOON ~ ·16791.,0:; c L amount of such Loss, or with respect to all Losses, ~ceed in the aggregate US$7,500,000. (h) At such titneas a Downgrade Event occurs, CDCPLCshall (i) provide written notice to GOT witlilii 5 Business Days of such event, and (li) unleSs otherwise waived in writing by GOT, within 30 days of such event. provide a letter of credit in favor of GOT, from a bank whose short-term and long-term unsecured deht obligations are rated in one of the two highest ratings categories by a nationally reCognized rating agency in the United States, in an amount sufficient to meet CDCPLC'smaximnm obligations under this Section 7.3 .. For purposes of monitoring the ratio referred to in clause (ii) of the definition of "Downgrade Event" and upon the occurrence of the event described in clause (i) of the definition of Downgrade Event, CDCPLC shall provide to GOT, no later than 60 days after the end of the second. and fourth quarter of each calendar year, CDCPLC group unaudited financial statements covering the previous two qusrters as wen as a certificate from CDCPLC's treasury setting forth and certifying CDCPLC's committed undrawn lines of credit at the time, provided, !!l.!l!, CDCPLC shall no longer provide such documents after it receives a credit rating from Standard & Poor's Corporation or Moody's Investors Services. Inc. . . 7.4. Emergency Maintenance Loan . . ,(a) CDCPLC agrees to loan to Songas ona revolving basis up toUS$4 million to fund emergency maintenance expenses during the Initial Term of the POWer Purchase Agreement, Each request by Songas to draw such funds shall be subject only to the requirements that (i) the proceeds of such loan. in combination with other funds available to Songas, would be sufficient to undertake and complete .the emergency maintenance, (ii) Songas has insufficient·· funds available or accessible to ondertake and complete the emergency maintenance and (iii) there is at the time no occurrence and coDtinuation of any (A) GOT Special Event under any of the Basic Agreements or Financing Agreements or (B) an Uncured Political Force Majeure Event under the Escrow Agreement or an Uncured Political Event. (h) Any amounts so .loaned shall be evidenced by an Emergency Maintenance Loan Promissory Note substantially in the form attached as Annex B. Songas shall repay in. Dollars the principal amount of Emergency MaIntenance Loans outstanding in 21 equal monthly installments commencing on the first Business Day of the fourth fun calendar month following· disbursement of any Emergency Maintenance Loan. and Songas shall, at the same time, . pay intereSt in DOllars on the unpaid principal amount of each Emergency Maintenance Loan. until such principal amount is paid in full, at a rate per annmn equal to the sum of (i) LIBOR on the day such Emergency Maintenance Loan is disbursed and (ii)the lesser of (A) 18% or (B) the commercial rate at which Songas is able to borrow funds on an unsecured basis on the day such Emergency Maintenance Loan is disbursed, with the sum divided by two. Songas may, without premium or penalty, prepay the outstanding amount of any Emergency Maintenance Loan, in whole or part, with accrued interest to the date of such prepayment on the amount prepaid and shall prepay such Emergency Maintenance Loan to the extent of any insurance proceeds it receives with respect to the event for which such. Emergency Maintenance Loan was provided. In the event of any draw of an Emergency Maintenance Loan, the repayment of principal and payment of interest shall be a Non-Subordinated Obligation under the other Basic Agreements and Financing Agreements. CDCPLC shall be liable for any applicable withholding taxes on the payment of interest on the Emergency Maintenance Loan at the rate in effect on the date that is one day prior to the date of Financial Closing. An increase or decrease in the applicable 27 ~ C L withholding tax rate shall be treated as a Change in Law pursuant to Article lX of the Power Purchase Agreement, and payments of interest on any Emergency Maintenance Loan shall be net such. increase .or decrease in the withholding tax rate. of (e) The Emergency Maintenance Loan will become immediately due and payable if there shall occur (i) a GOT Special Event under any of the Basic Agreements or Financing Agreements,.(ii) an Uncured Political Force Majeure Event under the Escrow Agreement, or an Uncured Political Event, where in. either case of (i) or (ii). for so long as the Escrow Account shall remain in effect, Globeleq Tanzania and Globeleq Somanga have delivered Certificates as defined in and pursuant to Section 4.3 or 4.4(a) or (b) of the Escrow Agreement or Certificates as defined in and pursuant to Section 4.2 or 4.3(a) or.(b} of the Hard Currency Agreement (or any similar terminating draw under the Escrow Agreement or the Hard Currency Agreement under any successor provisions) or (iii) an acceleration of payment under the Subsidiary Loan Agreements, the Loan Assumption Agreement or any other loan agreement . (d) If the repayment of the Emergency Maintenance Loan is accelerated pursuant to Section 7.4(c), then such repayment shall be made in accordance with Article V of thc Shareholders' Agreement. ... 7.5. Tenns of Guarantee. (a) The obligations set forth in Sections 7.2 and 7.3 shall be continuing and absolute guarantees, and the obligations set forth in this Article shall remain in full force and effect unless and until a Notice of Termination bas been issued pursuant to Section 14.5 or 16.4(d) or Globeleq Tanzania and Globeleq Somanga have delivered Certificates pursuant to Section 4.3 or 4.4(a) or (b) of the Escrow Agreement or pursuant to Section 4.2. or 4.3(a) or (b) of the Hard Currency Agreement, as such Certificates are defined therein; (or any similar terminating draw under the Escrow Agreement or the Hard Currency Agreement underany successor provisions) provided, however, that PanAfrican'sand CDCPLC's obligations pursuant to Section 7.3 shall survive only with respect to such obligations that occurred or arose prior to such termination or delivery if, within six months from the earlier of any such termination or delivery of such Certificates, GOT shall have notified the Parent Companies in writing of such a Loss and that it . is demanding or will be demanding payment pursuant to SeCtion 7.3. (b) The obligations set forth in SeCtions 7.2 and 7.3 are a guarantee of payment and not of collection, meaning that while such obligations are in full force and effect, GoT shall not be required to initiate, pursue or exhaust remedies against Globeleq Sornanga or G10beleq Tanzania pursuant to the. Shareholders' Agreement with respect to the guarantees provided pursuant to Section 7.2 or Sorigas for the obligations pursuant to Section 7.3 .before proceeding against PanAfrican or CDCPLC as the case may be. Each ofPanAfrican and CDCPLC expressly waives any right to require that any action be brought against their respective subsidiaries or to require that resort be had to any security. The terms oftrus Section 7.5(b) shall apply at such time as the conditions to each of the Parent Companies' respective obligations, as set forth in Sections 7.2 and 7.3, have been met. (c) If G10beleq Somanga or Globeleq Tanzania shall fail to make any required payment guaranteed.pursuant to Section 7.2 following demand therefor, CDCPLC shall, within 10 days following the giving of notice of such failure and the demaild by Songas for payment, promptly and fully make such payment. If such payment is not made within 10 days of such demand, AK- LONDON· 46192-.03 28 ~ L ! I CDCPLC shall pay all reasonable costs and expenses, including reasonable legal fees and expenses, paid or incumd by Songas in connection with the ellf'orrement of the obligations under this Article. Each defilillt in any obligation shall give rise to a separate cause of action hereunder, .and separate suits may be brought hereunder as each cause of action arises. 7.6. Obligations Unconditional. (a) The obligations of CDCPLC under Section 7.2 shall not .00 impaired, modified, released or limited by any occumnce or condition whatsoever, including any compromise, settlement, release, waiver, renewal, extension, indulgence, impairment, limitation of liability, change in or modification of any of the obligations and liabilities, either original or assumed, of its. respective subsidiaries contained in the Basic Agreements or Financing Agreements. No invalidity, irregularity Of unellf'orceahility of any obligation of the respective subsidiaries shall affect, imPair, or be a defence to the obligations of CDCPLC under this Article. (b) CDCPLC unconditionally waives notice of any of the matters referred to in Section 7.6(a). and each oithe Parent Companies unconditionally waives, except as specified in Sections 7.3 and 7.5, any demand or notice of default in the making of any payment hereunder or of any other default by its respective subsidiary under the Basic Agreements. (c) No lawful act of commission or omission of any kind or at any time upon the part of Songas Of. GOT in respect of any matter whatsoever shall in anyway affect or impair either Party's· rights to ellf'orce any right, power or benefit under this Article, and no set-off, claim, reduction or diminution of any obligation or any defence of any kind or nature which CDCPLC has or may have against Songas or GOT shall be available against Songas Of GOT, respectively, in any suit or action brought by Songas or GOT, as the case may be, to enforce any right, power or benefit under Section 7.2. (d) In the event that any payment pursuant to their obligationsilnder Section 7.3 should give rise to a right of subrogation, PanAfrican and CDCPLC hereby waive any and all rights of subrogation with respect to Songas until such time as Songas'. obligations for any indebtedness of the Financing Agreements have been satisfied in full. under any Ale. 29 c L ARTICLEVllI GOT PROJECT ASSISTANCE 8.1. Rightto Project, (a) Subject to the terms and conditions of the Basic Agreements and the Financing Agreements, GOT will assist in obtaining for Songas and PimAfrican Tanzania, or will itself grant to Songas and PanAfrican Tanzania, the exclusive rights to develop, own, operate and maintain the Project. Subject to the terinsand conditions of the Basic Agreements, for so long as this Agreement is in effect, GOT shall not grant to any Person other than Songas and PanAfrican Tanzania the rights provided under the Basic Agreements. (b) GOT shall cause T ANESCO and TPDC' to obtain all land or interests in land as necessary to fulfill their obligations under the Ubungo Complex Transfer Agreement and the Songo.Songo Facilities Transfer Agreement. (c) Songas may advise GOTftom time to time of any difficulties encountered in the activities it 18 req to orm un -er -ecnrt - - '" ~.~.u -- - .,L • ... _.1.:_. create a significant possibility that Songas will be prevented or materially impaired in meeting its obligations hereunder or under any other. Basic Agreement or the Financing Agreements, then, upon the request of Songas, GOT shall take such actions as are reasonable and appropriate under the circumstances to enable Songas to secure the necessary. property or' services; provided, however, that if GOT reasonably determines that Songas has failed in any material respect to comply with its obligations under this Agreement and thai such failure is the principal.cause of Songas' difficulties in performing such activities, GOT may advise Songas of such determination and GOT shall not be obligated to take any actions to assist· Songas pursuant to this Section 8.1 until such time as Songas has fully complied in all material respects with its obligations under this Agreement (d) Upon reasonable request by Songas, GOT shall use reasonable efforts to support Songas' perfonnance of its obligations to design, construct, install, operate and maintain the Project By agreeing to use reasonable efforts to support Songas' efforts, GOT has not relieved, and does not relieve in any way, Songas of its obligations or potential liability under the Basic Agreements. 8.2. Obligation to Lend. (a) GOT hereby agrees that it will, through its Ministry of Finance, take all actions as are reasonably appropriate to enable it to borrow funds from the International Development Association in the approximate amount as set out in Table 2 of Schedule 1 to Annex F to the Power Purchase Agreement and from the European Investment Bank in the approximate amount as set out in Table 2 of Schedule I to Annex F to the Power Purchase Agreement. Such funds, in combination with funds assumed pursuant to the Loan Assumption Agreement, are intended to cover the debt-funded portion of the Tariff Project Costs in a nominal ratio of 75% of the Tariff Project Costs. and will be loaned to Songas on the terms and conditions set forth in the Subsidiary Loan Agreements. . AlL 30 . (b) If Actual Shared Project Costs are Ie'S than Estimated Shared Project Costs, GOT's . obligation to lend pursuant to Section 8.2(a) shall be reduced by an amount equal to 75% of the difference between Estimated Shared Project Costs and Actual. Shared Project Costs. If the Actual .Pass-Through Project Costs are less than the. Budgeted Pass-Through Project Costs, GOT's obligation to lend pursuant to Section 8.2(a} shall be reduced by an amount equal to 100010 of the difference between. the Budgeted Pass-Through· Project· Costs and Actual Pass- Through Project Costs. If Estimated Shared Project Costs are less than Budgeted Shared Project Costs, escalated as provided in. Table 7 to Schedule I of Annex F to the Power Purchase Agreement, GOT's obligation to lend pursuant to Section 8.2(a) shall be reduced by an amount equal to.1 00% of· the difference between . the Budgeted Shared Project Costs, escalated. as provided in Table 7 to Schedule 1 of Annex F to the Power Purchase Agreement, and the Estimated Shared Project Costs. . (c) If Actual Shared Project Costs exceed Estimated Shared Proj ect CostS, GOT Will, in addition to any other obligation to lend. pursuant to this Section 8.2, lend to Songas from time to time as needed on the terms and conditions set forth in the Subsidiary Loan Agreements an amount equal to 37.5% of the amount by which Actual Shared Project Costs exceed Estimated Shared Project. Costs until Acfual Shared Project Costs equal 115% of Estimated Shared Project Costs. (d) If Estimated Shared Project Costs exceed Budgeted Shared Project Costs, escalated as provided in Table 7 to Schedule 1 of AnnexF to the Power Purchase Agreement, orActualPass- Through Project Costs exceed Budgeted. Pass-Through Project Costs,GOT shall, in addition to any other obligation to leud pursuant to this Section 8.2, lend to Sougas from time to time as needed, on the terms and conditions set forth in the Subsidiary Loan Agreements, an amount equal to )00% of such excess costs; provided. however, that GOT may determine, subject to Section 2.4(c) of the Shareholders' Agreement, at the time of funding not to fund 100% of such costs, in which event GOT shall lend to Songas an amount equal to 75% of such excess costs. (e) GOT shall, in addition to fulfilling any other obligation to lend pursuant to this Section 8.2, lend toSougas frpm time to time as needed, on the terms and conditions set forth in the Subsidiary Loan Agreements, an amount equal to 75% of costs incurred with respect to the development or construction of the Project as described in Annex G to the Power Purchase Agreement that are attributable to a Force Majeure Event under any of the Basic Agreements until Giobeleq Somanga,Globeleq Tanzania and the DFIs have reached their Target Equity (exclusive of the Project Management Fee), and 100% thereafter; provided, however, that the GOTmay determine, subject to Section 2.4(c) of the Shareholders' Agreement, at the time of funding not to fund 100% of such costs, in which event GOT shall lend to Songas an amount equal to 75% of such costs. (1) GOT will, in addition to. fulfilling any other obligation to lend pursuant to this Section 8.2, loan to Songas from time to time as needed, on the terms and conditions set forth in the Subsidiary Loan Agreements, an amount equal to the entire amount of any increased costs attributable to aPolitical Event. (g) In the case of any partial or totaIlnsufficiency, GOT agrees that it will either: (i) grant TANESCO a rate increase sufficient to enable TANESCO to meet its obligation to pay the Capacity Charge (as defined and established in the Power LONDON ~~192,03 31 ~ , I Purchase Agreement} that TANESCO must continue to pay to Songas pursuant to Section 9A(i) of the Power Purchase Agreement that is attributable to one minus that proportion of the Gas Facilities. the numerator of which is the actual total gas flow to the Complex and the denominator of which is the total gas flow that the Complex would have consumed had there been no Jnsufficiency, and assuming that the Weighted Average Complex .Heat Rate was as specified in Section 5 of Annex F .of the Power Purchase Agreement, that become unused by reason of the Insufficiency; or . (ii) forgive the amount of principal and interest otherwise due from Songas to GOT under the Subsidiary Loan Agreements and Loan Assumption Agreements attributable, based on the overall ratio of debt funding included· in the . Tariff Project Costs, to that proportion of the Gas Facilities, the numerator of which is the total gas flow to the Complex (as reduced by the lhsufficiency) and the denominator of which is the total gas flow that the Complex would have consumed had there been no lhsufficiency, and assuming that the Weighted Average Complex Heat Rate was as specified in Section 5 of Annex F of the Power Purchase Agreement, that become unused by reason of the Insufficiency. 8.3. Accoimt Funding. Ca) GOT hereby acknowledges its obligations under the Escrow Agreement (i) to fund the Escrow Account initially and from time to time thereafter until the amount on deposit therein equals the then Required Amount (as such term is defined in the Escrow Agreement), includir\g its obligation to restore the Escrow Account to such Required Am01,ll1t upon the occurrence of any currency exchange loss, (ii) to direct the investment of the funds in. the Escrow Account and (iii) to ensure that Shillings in the Escrow Account are converted to Hard Currency to the greatest extent feasible. (b) GOT hereby acktiowledges its obligations under the Liquidity Facility Agreement (i) to fund the Liquidity Facility initially and from time to time. thereafter until the amount on deposit therein equals the then Required Amount (as such term is defined in the Liquidity Facility Agreement), including the requirements to reStore the Liquidity Facility to such Required Amount upon the oecurrence of any currency exchange loss and (ii) to direct the investment of the fimds in the Liquidity Facility. . (c) GO,[, Songas and TANESCO shall meet each Agreement Year to establish the amount of the Sinking Fund Surcharge (as defined in the Power Purchase Agreement) for the ensuing Agreement Year. GOT agrees to execute the Sinking Fund Agreement, substantially in the form of Annex J to the Power Purchase Agreement, at such time as the Sinking Fund Surcharge (as defined in the Power Purchase Agreement) is other than US$O.OO per kWh. 8.4. Return to Globelea Somangaand Globelea Tanzania. GOT acknowledges that Globeleq Somanga and Globeleq Tanzania are making their investment in Songas based upon the expectation of receiving· dividends and stoCk redemption payments such that they will obtain an intcrual rate of return (after withholding taxes, before taking into account capital cost overruns or underruns and the. effects of bonuses and penalties under the Power Purchase Agreement) consistent with the rates established in Section 2.10 of the Shareholders' Agreement. ~ A 32 ~I(. LONDON-«1192.03 8.5. Investment and Tax fncentives. Subject to Article XI, Songas, Globeleq Tanzania, CHobeleq Somanga and PanAfrican Tanzania shall avail themselves of the incentives and assistance described in Annex C and granted by GOT or any Government Entity. Upon Songas' notification to GOT that Songas or another beneficiary is encoUntering difficulties in obtaining sUch incentives and assistance, GOT shall ensure the provision of such incentives; provided. however, that Songas, Globeleq Tanzania, Globeleq Somanga and PanAfrican Tanzania are in all respects in material compliance with the Basic Agreements, the Financing Agreements and fueLaWS of Tanzania. 8.6. No Discrimination. (a) GOT shall not take any actions that would. have any adverse impact on Songas or its . ability to fulfill its obligations under this Agreement, the other Basic Agreements or the Financing Agreements based upon reasons of foreign ownership or control of Songas. GOT shall provide national treatment to Songas as a corporation organized under the Laws of TanZania. . (b) Notwithstanding any other provision in this Agreement, neither GOT rior any Govemment Entity or. Parastatal Entity shall take· any· discriminatory action that materially and adversely affects the Project or the perfurmance by Songas of its obligations or the enjoyment of its rights or benefits orfue interests of the Shareholders therein or of PanAfrican Tanzania. Neither· GOT nor any Government. Entity or Parastata1 Entity shall expropriate, nationalize or, except as hereinafter provided, acquire the Project or Songas, whether in whole or in part; provided, however, that the foregoing shall not prohibit any actions taken by GOT, TANESCO, TPDC,.any other Parastatal Entity or any Government Entity pursuant to their respective rights and obligations arising under the Basic Agreements or the Financing Agreements. 8.7. Existence ofTANESCO and TPDC. Songas acknowledges that GOT intends to restructure andlor privatise the energy and electric industries in Tanzania. The timing, nature and stroctilre of the restructurlngfprivatisation have not been determined. but Songasacknowledges that an entity may assume TANESCO's and TPDC's obligations under the Basic Agreements and Financing Agreements, provided that (i) the successor in interest to TANESCO or TPDC has the ability and undertakes. to.· perform TANESCO's or TPDC's obligations under the Power Purchase Agreement or Gas Agreement, respectively, and (ii) GOT, without interruption in each case., retains its obligations under this Agreement and the Financing Agreements or such other commercial security is provided fur the obligations of the succeeding entity that in the reasonable commercial judgment of Songas provides an adequate alternative. Subject to the preceding proviso, Songas hereby consents to the assignment by T ANESCO andlor TPDC of their obligations, and agrees to execute such documents andlor instroments as may be necessary or appropriate to acknowledge such assignment. 8.8. ICSID Effectiveness. Designation and Consent. (a) GOT shall, as soon as practicable but in no event later than the Commercial Operations Date, undertake and complete any legislative or other measures as may be necessary to cause the ICSID Convention (as defined in Section 15.4)to have the force of law in Tanzania. 33 ~ LONDON -46791,03 (b) As soon as practicable but in no event later than the Commercial Operations Date, GOT shall designate T ANESCO and TPDC as agencies of GOT to the Centre in acCordance with Article 25(1) of the rCSID Convention (as defined in Section. 15.4). For the PUlJlOSC of ArtiCle 25(3) of the ICSID Convention,. GOT hereby approves each. of TANESCO's and TPDC's consents to arbitration under the ICSID Convention in each of the Basic Agreements and Financing Agreements to which T ANESCO or TPDC, as the case may be, is a party. 8.9. Obligations Unconditional. (a) Ine obligations of GOT hereunder shall notbe impaired, modified, released or limited by any. occurrence or condition whatsoever, including any compromise, settlement, release, waiver, renewal, extension, indulgence, impairment, limitation of liability, change in or modification of any of the obligations and liabilities, either original or assumed, of GOT or any Govemment Entity or Parastatal Entity contained in the Basic Agreements or the Financing .. No invalidity, irregularity or unenforeeability of any obligation of any Govemment Agreements Entity or Parastatal Entity shall affeet, impair, or be a defence to the obligations of GOT hereunder. (b) No lawful act of conmusslon or OIIDSSlon 0 -any' -' . •. -----" Songas or the Parent Companies in respect of any matter whatsoever shall· in. any way aftl.'Ct or impair its or their rights to enfurce any right, power or benefit under this Agreement. 8.10. Eleetricity Licence. Upon application in accordance with the Eleetricity Ordinance by Songas for an Eleetricity Licence, and payment of the Prescribed Fee, GOT shall, on or prior to Financial Closing, issue the Eleetricity Licence. The Parties agree that during any period that TANESCO operates the Complex pursuant to Seetion 6.11 of the Power PurChase Agreement, Songas sha1I not be determined to be in default under Seetion 72(1) of the Electricity Ordinance. 8.11. Obligation to Remedy Effeets of an FTPA Order. In the event of the issuance of an FTPA Order: (a) GOT shall, for each month during the period in which the FTPA Order is in effect, compensate Songas, as a direct contmctoal obligation under this Agreement; the monthly Shortfall Amount; by either, at GOT's e1eetion (i) forgiving an amount of principal and interest otherwise due from Songas to GOT in the next succeeding month Under the Subsidiary Loan Agreements or the Loan Assumption. Agreement equal to the monthly Shortfall Amount or. (Ii) paying to Songas the monthly Shortfall Amount; provided. however, that in the event that the Shortfall Amount in any month exceeds the amount of principal and interest otherwise due-from Songas to GOT in the next succeeding month under the Subsidiary Loan Agreements and the Loan Assumption Agreement, the GOT may elect to forgive· such amount of principal and interest and pay to Songas the balance of the monthly Shortfall Amount; (b) satisfaction of the monthly Shortfall Amount under Section 8.11(a) shall be made within the time peri ods and on the terms set forth in the Power Purchase Agreement. LONDON· 46192.03 34 I i ARTICLElX FOREIGN CURRENCY EXCHANGE AND TRANSFER OF FUNDS 9.1. Foreign Exchange Regulation. The foreign currency exchange and transfer abroad of all funds related to the Project shall be governed by the Foreign Exchange Act, 1992 and regulations promulgated thereunder, as· amended from time to time. 9.2. Use ofTailzanian Bank Accounts; Exceptions. GOT shall cause the Bank of Tanzania to give Songas consent to (i) hold foreign exchange (A) provided by the Parent Companies or their Affiliates or any of the DFIs, the International Development Association, the European Investment Bank, or, any other foreign sources provided for in the Basic Agreements or Financing· Agreements and (B) used to pay foreign contractors or vendors in respect of services provided or equipment or materials purchased outside ofTan7.ania, in one or more accounts outside Tanzania (ii) pay such foreign exchange directly to such foreign contractors and vendors without initiating such payments through bank accounts in Tanzania and (iii) make loans to its Shareholders pursuant to Section 4.14 of the Shareholders' Agreement. Nothing in this Agreement shall prevent Songasfrom opening, operating and retaining moneys in additional. foreign currency hank accounts outside Tanzania from time to time if and to the extent that it is or becomes otherwise permitted under the Laws \lfTanzania. . 9.3. Consent to Foreign Currency Accounts. GOT shall cause the Bank of Tanzania to give Songas and its Contractors. consent to open, operate and retain earnings from foreign currency bank accounts held in Tanzanian banks (including the payment of all foreign exchange that Songas receives under the Financing Agreements or otherwise into such accounts and withdrawals therefrom). 9.4. Availability of Foreign Exchange. GOT agrees that it shall not impose foreign exchange controls on Songa.~, its Contractors, the Parent Companies, the Shareholders, the Escrow Agent, the agent under the Liquidity Facility Agreement or the agent under the Sinking Fund Agreement more restrictive than those in effect on the date that is one day prior to the date of Financial Closing. 9.5. Free Transfer ofNecessarv Funds. Without prejudice to Section 9.1, GOT shall permit the free transfer of allfunds and financial settlements necessary to implement and carry out the· Project or the implementation of the Basic Agreements and the Financing Agreements and shall ensure full and unencumbered repatriation rights with respect to all foreign currency converted from Shillings. 9.6. Expatriate Employees of Songas and its Contractors. Subject to Section 9.1, Expatriate Employees of Songas and its Contractors shall be entitled: ~ 35 lONDON ~ 46192.03 i I (a) In respect of such portion of their salaries as may be paid in T /lIIZaIl.ia. to export freely from Tanzania, dnring each year of their employment their savings on salaries paid in Tanzania and export freely from Tanzania upon termination of their contract in Tanzania any balance of such savings in Tanzania as well as any sums paid to them from any provident or like fund on termination of their employment in Tanzania; and (b) To export "freely from Tanzania, upon termination of their employment in Tanzania; their personal property previously imported into Tanzania or purchased with their savings on salaries in Tanzania· " 36 Ale LOWDQN . 46792.03 C L ARTICLE X EXPATRJA TE EMPLOYEES OF SONGAS AND ITS CONTRACTORS 10.1. Right to Import. GOT encourages Songas and its Contractors to incorporate as much locally produced material, equipment, and supplies as possible in the construction and operation of the Complex and the Gas Facilities. Nonetheless, Songas and its Contractors shall be entitled to import without restriction, .and, prior to the date that is one year after the Transfer Date, without Customs Duties, all items required for the design, construction; installation, operation and maintenance of the Project, including spare parts and replacements to the spare pans inventory, subject to compliance with any other restrictions imposed by the Laws of Tanzania. All items not consumed or incorporated into the Project may be freely re-exported by Songas witho1,lt incurring liability for Customs Duties in Tanzania. GOT may, as provided by the Laws of Tanzania, require Songas to re-export any items or equipment used in the construction of the Project that are not reasonably required for Songas to operate and maintain the Project, unless Songas agrees to pay promptly the.normal Customs Duties for those. items and equipment. Songa'! shall be afforded a reasonable time, but not less than nine months following the Transfer Date, to re-export any such items or equipment required by GOT to be re-exported. 10.2. Export and Reimport. Songas shall be entitled to export without restriction all items of plant and machinery imported by it under Section 10.1 for permanent installation in the Complex or the Gas Facilities fur the purpose of repair or refurbishment outside Tanzania and to re-import the· same without payment of Customs Duties, and GOT shall, at the request of Songas, use reasonable measures to expedite the issuance of any Consent required for the export and re-import of such plant and machinery. 10.3. Immigration. to the applicable Laws of Tanzania relating to immigration; and provided Songas Subject and the Contractors materially comply with all applicable Laws of Tanzania relating to immigration and submit timely applications in the Prescribed Form and with the Prescribed Fee, GOT will expeditiously grant applications of Songas and the Contractors for work permits, employment passes, visas and other permits, as necessary, for individuals involved in the Project. Notwithstanding the foregoing, however, GOT may, in any individuslcase, decline to grant an appliCation; or expel a Person previously admitted, to protect the national security interests and public health and safety of Tanzania, as reasonably determined by GOT. 10.4. Expatriate Employees. Each Expatriate Employee of Songas and its Contractors shall be permitted to import into Tanzania free of import duty and other lases on first arrival their personal and household effects, including one automobile, sul:!iect to the limitations and conditions set out in the Customs Tariff Act, 1976; provided. however, that no property imported by such Expatriate Employee shall be resold by such person in Tanzania except in accordance with GOT regulations. 37 LONDON -46792.03 { ARTICLE XI TAXATION 11.1. Taxation of Songas. Songas shall be subject to all taxation in Tanzania applicable to a Tanzanian company, but, in order to minimize the price charged to TANESCO for the capacity of the Complex, shall take . all legally aVailable measures to ensure the most preferential incOme tax treatment, including availing itself of tax incentives, exemptioos and aIlowanees to the extent that such incentives, exemptions and allowances result in a lower tax liability than would otherwise be applicable. 11.2. Expatriate Employee Income Tax Guarantee. Where Songas by notice in writing to the Tanzania Revenue Authority has guaranteed the full and proper discharge by an Expatriate Employee of his liability for income tax under the Laws of TanzIlllia,including the provisions of the Income Tax (Exemption) Expatriate Staff e In ~ ~-- t. - -~-- ~_1 __ , __ ~ ____ ~_l\..f ...... " ... "",- l\..r...... 11, _ .... J..l:otreement or TPDC under.the Gas Agreement with the same effect as if the payment or act had been made or performed by T ANESCO or TPDC, as the case may be. If GOT fails to cure or is unable or unwilling to cure such event within the cure periods provided to TA.l\ffiSCO or TPDC under the Power Purchase Agrecment or the Gas Agreement, respectively, Songas shall have all of its rights and remedies with respect to such event as set forth in this Agreement, the Power Purchase Agreement or the Gas Agreement, as the case may be; provided. however,. that if GOT is diligently attempting to cure any event other than a failure of T ANESCO or TI'DC, as the case maybe, to make required payments, and demonstrable progress toward effecting such cure is being made, GOT shall be granted an additional period not exceeding 90 days to effect such cure before Songas may exereise its rights and remedies with respect to such event set forth in this and the Power Purchase Agreement or the Gas Agreement. $ Agreement 55 Ak LONDON -46192,03 C 16.7. Obligations Upon Termination. Upon expiration or tennination of this Agreement, the Parties shall have no further obligations hereunder except for obligations that arose prior to such expiration or termination, including payment and indemnification obligations, obligations that are expressly stated to survive such expiration or tennination pursuant to this Agreement and the obligation to maintain confidentiality under Section 18.9. 16.8. Other Remedies. The exercise of the right of a Party to terminate this Agreement, as provided herein, does not preclude such Party from exercising other remedies that are provided herein or. are available at law. Remedies are cumulative, and the exercise of, or fuilure to exercise, one or more remedy by a party shall not limit or preclude the. exercise of, or constitute a waiver ot:other remedies by such Party. LONDON" 46792JB 56 ARTICLEXV11 TERM 17.1. Tenn. This Agreement shall commence and be effective on the date on which it is made and shall, unless tenninated earlier in accordance with the terms of this Agreement, terminate upon the expiration of the Initial T enn or earlier termination of the Power Purchase Agreement. 57 LONDON -4679l.(13 · ! ARTICLEXVTII MISCELLANEOUS 18.1. Expenses of the Parties. (a) Except as otherwise agreed with respect to legal and technical due diligence review by the GOT and its advisors of the acquisition by affiliates of CDCPLC of AES' interests in' Songas and the Project, and with respect to the negotiation and preparation of the amendments made herein to certaio of the Basic Agreements and Financing Agreements, it being understood and agreed that PanAfrican is not a party to and has no liability under any such agreement, all ex:penses incurred by or on behalf of each of the Parties hereto, including all fees and expenses of agents, representatives, counsel and accountants employed by each of the Parties hereto in connection with the preparation of this Agreement and the consummation of the transactions contemplated by this Agreement, sball be borne solely by the Party who shall have incurred such expenses and the other Parties shall have,no liability in respect thereof. (b) Each of the Parent Companies agrees to hold GOT and Songas harmless from and against any expenses it or its AffIbates may have incl.lffed ill cuttneCtiuli witildn:y- liability for any brokerage or similar services in connection with the transactions contemplated' in this Agreement and the other Basic Agreements. GOT agrees to hold the Parent Companies and Songas harmless from any expenses GOT may have incurred in connection with any liability 'for any brokerage or similar services in connection with the transactions contemplated in this Agreement and the other Basic, Agreements. Songas agrees to' hold (JOT and the Parent Companies harmless from any expenses Songas may have incurred in connection with any liability for any brokerage or similar services in connection with the transactions contemplated in this Agreement and the other Basic Agreements. 18.2. Right to Specific Performance: Waivers. In the event any Party fails to perfonn its obligations hereunder after the satisfaction of all conditions precedent thereto, the other Parties shall have the right to require specific perfonnance of the obligation not perfonned. Any Party has the right to waive another Party's compliance with a condition to the waiving Party's obligations hereunder and, if all the conditions precedent to tbe other Party's obligations hereunder have been satisfied, to require I specific performance of this Agreement. Immunitv. 18.3. Commercial Acts: Sovereign I Each of GOT and CDCPLC unconditionally and irrevocably agrees that the execution, delivery and perfonnance by it of this Agreement constitutes a private and commercial act. In addition to the foregoing, each of GOT and CDCPLC unconditionally and irrevocably agrees I that: (i) should any proceeding (including any arbitration proceeding) be brought against it or its assets in relation to this Agreement or any transaction contemplated by this Agreement, no immunity from such proceedings shall be claimed by or on behalf of itself or with respect to its assets (other than the Protected Assets); (ii) it waives any right of immunity that it or any of its assets (other than the Protected Assets) now has or may acquire in the future in any jurisdiction in connection with any such proceedings; and (iii) it consents generally in respect of the enforcement of any judgment against it in any such proceedings (including any arbitration 58 ~ c proceedings) in any jurisdiction to Ute giving of any relief or the issue of any process in connection with such proceedings (including the making, enforcement or execution against or in respect of any assets whatsoever (other than the Protected Assets) irrespective of their use or intended use). Each of the Parent Companies and Songas hereby irrevocably waives any and all rights it may have to enforce any judgment or claim against the Protected Assets with respect to any claim against GOT under this Agreement or any transaction contemplated by this Agreement. To the fullest extent pennitted by law and without limiting the generality of the foregoing, GOT waives any right of immunity from court process, attachment or execution against its assets under the Government Proceedings Act, 1967, as amended. To the fullest extent permitted by law and without limiting the generality of the foregoing, CDCPLC waives any right of immunity from court process, attachment or execution against its assets. 18.4. Further Assurances. If it shall be necessary and proper after the execution hereof to execute any additional documents or take further action to effectuate the intent of this Agreement,. the. Parties agree to take such action. of Law. 18.5. Choice This Agreement shall be governed by and construed in accordance with Tanzanian law. Al!l'eement. 18.6. Entire SUbject to Section 1 &.1 with respect to expenses of the Parties, this Agreement, together with the other Basic Agreements and the Financing Agreements, is intended by the Parties as the final expression of their agreement and is intended also as a complete and exhaustive statement of their agreement with respect to the subject matter contained herein. 18.7. Amendments. This Agreement can be amended only by written agreement among the Parties. 18.8. Waiver. (a) No waiver by any Party of any defanlt., special event or defaults by another Party in performance of any of the provisions of this Agreement: the (i) shall operate or be construed as a waiver of any other or further default or defaults whether of a like or different character; or (ii) shall be effective unless in writing duly executed by a dnly authorized representative of such Party. (b) Neither the failure by a Party to insist on any occasion upon the performance of the terms, conditions and provisions of this Agreement nor time or other indulgence granted by one Party to another shall act as a waiver of any breach nor as an acceptance of any variation, or as the relinquishment of any right hereunder. 59 LONDON· 4679203 18.9. Confidentiality. (a) Each Party and its .employees, contractors, consultants and agents .shallhold in confidence all documents and other forms of information, including electronic communications, marked as contidential by or on behalf of the party providing the information relating to the design, construction, insurance, operation, maintenance, management and financing of the Project. Each Party undertakes that all information obtained by it under this Agreement shall only be made available to and used by its employees or staff having a need for such information in order to permit the Party to perform its obligations and exercise its rights under this Agreement and, except as may be required by law or appropriate regulatory authorities, shall not publish or otherwise disclose the same to third parties. Notwithstanding the foregoing; (i) any Party may disclose such information to its professional advisors and to prospective lenders or investors in such Party, to succeeding entities, to prospective transferees and assignees and their professiooal advisors that, in each case, have agreed to be bound by these confidentiality provisions; and (li) at the request of the Internatiooal Development Bank or the European Investment Bank, a Party shall disclose such requested information if such requesting party has agreed to be bound by these confidentiality provisions. (h) The provisions of Section 18.9(a) sliilll not apply to: . (i) any information in the public domain otherwise than by a breach of Section 18. 9( a) by the same Party; (li) information in the possession of the Party before divnIgence that was not obtained under an obligation of confidentiality; (iii) information obtained .from a third party who is free to divulge the same to other third parties and that was not obtained by any Party under an obligation of confidentiality; and (iv) information contained in a document that has been reviewed and cleared for public disclosure by the Party claiming confidentiality in the information. (c) The provisions of this Section 18.9 shall survive for a period of five years from the termination of this Agreement. 18.10. Counterparts. This Agreement may be executed in two or more counterparts, all of which will be considered one and the same Agreernent and each of which will be deeined an original. 18.11. Severabilitv. If any termor provision of this Agreement is held by a court or other authority of competent jurisdiction to be invalid, void, unenforceable or against the public policy, the rest of this Agreement will remain in fujI force and effect and will in no way be adversely affected; provided, however, that the severance of such term or provision does not render the performance of a Party's material obligations impracticable or impossible. ..§ AK 60 LONDON -46192,03 18.12. Assignment. (a) This Agreement binds and inures to the benefit of the Parties and their respective successors and peImitted assigns, but this Agreement may not be assigned by any Party without the prior written consent of the other Parties. (b) Notwithstanding the foregOing, Songas may assign or grant a security interest in this Agreement to GOT under the Debenture. (c) The Parties acknowledge that on 8 December 1999 CDCPLC, whilst remaining the same legal entity, was transformed from a statutory corporation to a public company limited by shares and registered in England and Wales under the UK Companies Act 1985 and changed its name from Commonwealth Development Corporation to CDC Group pic. (d) The Parties further acknowledge that it is. intended that a majority interest in CDCPLC will in due course be sold to private investors, restilting in a change of control of CDCPLC. CDCPLC agrees to give notice to GOT 90 days prior to the event whereby the Government of the United Kingdom sells or otherwise transfers any portion of its shares of CDCPLC to investors. Except as otherwise expressly provided in this Agreement, the Parties. agree that such change of control will neither affect in any way the rights or obligations of; nor give rise to any rights in favour of, any Party under this Agreement. 18.13. Relationship of the Parties. This Agreement shall not be interpreted or construed to create an association, joint venture, or partoership among the Parties or to impose any partoership obligation or liability upon any Party. No Party shall have any right, power, or authority to enter into any agreement or undertaking for, to act on behalf of, to act as or be an agent or representative of, or to otherwise bind, the other Parties. 18.14. No Third Parties. Other than as specified in Section 8.2(g), Section 16.5 and Section 18.9, this Agreement is intended solely for the benefit of the Parties and nothing in this Agreement shall be construed to create any duty to, standard of care with reference to, or any liability to, or confer any right of suit Of action on any Person not a Party to this Agreement. 18.15. Language. The language for the purpose of adminiStering and interpreting this Agreement shall be English. 18.16. Consents. Unless otherwise provided herein, whenever a. consent or approval is required by any Party from another Party, such consent or approval shall not be unreasonably withheld or delayed. 61 LONDON ~ 46792.03 18.17. Notices. (a) All notices or other communications to be given or made hereunder shall be in English and in writing, shall be addressed for the attention of the Persons indicated below and shall be delivered personally or sent by courier or facsimile. The addresses of the parties and their respective facsimile numbers shall be: 1f10GOT; The Permanent Secretary Ministry of Energy and Minerals Samora Avenue, P.O. Box 2000 Dar es Salaam, Tanzania Attn: Commissioner for Energy and Petroleum AffairS Facsimile: 255-22-2111749 or 2120799 or 2138949 Telephone: 255-22-2112793 or 2139455 or 2138944 or 2138947 with a copy to: The Permanent Secretary Ministry of Finance Madaraka Avenue!Shaaban Robert Comar, P.O. Box 9111 Dar es Salaam, Tanzania Facsimile: 255-22-2110326 or 2113334 or 2123924 Telephone: 255-22-2112856 or 2111174 through 211 J 176 and a copy to: The Attomey General Attomey General's Chambers Kivukoni Front P.O. Box 9050 Dar es Salaam, Tanzania Facsimile: 255-22-2113236 Telephone: 255-22-2111895 If to Songas: The General Manager Songas Limited 40 Ali Hassan Mwiniyi Road P.O. Box 6342 Dar es Salaam, Tanzania Facsimile: 255-22-266-7930 Telephone: 255-22-266-6130 AI< 62 C If to CDCPLC: General Counsel One Bessborough Gardens London SWI V 2JQ . . . England Facsimile: 44 (0)20 7828 6505 Telephone: 44 (0)20 7828 4488 with a copy to GJobeleq Advisers Limited One Bessborough Gardens London SWIV2JQ Attention: Paul Kunert Facsimile: 44(0)20 7963 3956 Telephone 44 (0)2078284488 If to PanA:frican: P AE PanAfrican Energy Corporation P.O. Box 332, Sir Walter Raleigh House 48-50 The Esplanade St. Helier, Jersey Channel Islands JE4 9YA Facsimile: 44-1534-700901 Telephone: 44-1534-700900 Except as otherwise expressly provided in this Agreement, all notices shall be deemed to be delivered (i) when delivered by hand Of by overnight courier, or (ii) if received during business hours on a business day for the receiving party, when transmitted by facsimile to the receiving party's facsimile number and, if received after business hours or on a day that is not a business day for the receiving party, on the receiving party's first business day following the date transmitted by facsimile to the receiving party's facsimile number. Any notice given by facsimile shall be confinned in writing, delivered personally or sent by courier, but the failure to so. confirm shall not void or invalidate the original notice if it is· in fact received by the party to which it is addressed. (b) Any party may by notice change the addresses, addressees andlor facsimile number to which such notices and communications to it are to be delivered or mailed. (c) Any notices required or permitted to be given hereunder to T ANESeO, TPDCor the Series B Preferred Shareholders shall be delivered as provided in the Shareholders' Agreement and any notices required or permitted to be given hereunder to the International Development Association and the European Investment Bank shall be delivered as provided in the SUbsidiary Loan Agreements. (d) For the purposes of this Agreement, prior to the later of (i) the. earlier of the Transfer Date and the Deemed Transfer Date; and (ii) the date on which the DFIs exchange their Promissory Notes for Shares in accordance with Section 2.7(e) of the Shareholders' Agreement, AK any references to the Series B Preferred Shareholders shall mean the DFIs. ~ LONDON .46792."3 63 L L 18.18. Accounts and Reports. (a) Songas shall make arrangements reasonably satisfactory to GOT with respect to the installation and operation of an accounting and cost control system and for the appointment as auditors of a firm of independent chartered accountants reasonably acceptable to GOT; provided, however, that if Songas appoints auditors from one or more intemational accounting .firms reasonably acceptable to GOT, each individual auditor shall be deemed satisfactory to GOT. On reasonable notice and for reasonable cause given to Songas, but in no event more than one time each year, GOT shall have the right to conduct additional verifications or audits of the Project or Songas by a firm of independent chartered accountants at GOT's expense, . unless such verifications· or audits results in the discovery of material discrepancies in Songas' books, invoices or records, in which event Songas shall be required to pay the reasonable expenses of such accountants. (b) Songas shall promptly furnish to GOT such information as GOT may from time to time reasonably request, and permit representatives of GOT, on reasonable notice, to enter upon and inspect the Project and the design, construction, operation, and maintenance thereof. SongaS .li H s' tai co nlete and accurate records in Dollars (and, to the extent required by the Laws of Tanzania or by the Board of Directors of Son gas, in ngs accoun g or a" . relating to the design, construction, operation, and maintenance of the Project, which records shall also be subject to inspection by GOT. SODgas shall maintain books and accounts in such a way that accounts related to its Project activities are kept separate from those related to any other activities it may undertake. (e) Songas shall, as soon as available but in any event withiri 90 days (or any shorter period required by the Laws of Tanzania) after the close of each fiscal year, furnish to GOT: (A) two copies of balance sheets of Song as as of the close of the fiscal year (on a consolidated basis.. if appropriate), denominated in Dollars (and, to the extent required by the Laws of Tanzania or by the Board of Directors of Songas, in ShilJing.~) and statements of income and retained earnings and changes in financial position of Songas for the fiscal year, in each case setting furth in comparative form the figures for the· preceding fiscal year, all in reasonable detail and accompanied by . an opinion thereon of its auditors, who shall be independent certified public accountants of recognized national or international standing selected by Songas, to the effect that the financial statements have been prepared in accordance with generally accepted accounting principles in Tanzania consistently applied and that the examination of the accounts in connection with the financial statements has been made by them in accordance with generally accepted auditing standards in Tanzania and. included such tests of the aCL'Ounting records and other auditing procedures as were considered necessary in the circumstances, all in aecordaace with the requirements of the Companies Ordinance, Cap. 212, as amended from time to time; (B) a copy of any management letter sent by the auditors to Songas or to its management in relation to Songas' financial condition together with the audited year end statements; and (C) a report by the auditors certifYing that, based on its audit of such financial statement~, Songas was in compliance in all material respects with its financial obligations (to the extent that such compliance is determined in the normal course of its audit) under the Subsidiary Loan Agreements and Loan Assumption Agreement as of the end of the relevant fiscal year or, as the ! case may be, detailing any noncompliance. ! I (d) Songas shall, as soon as available but in any event within 45 days (or any shorter AKI period required by the Laws of Tanzania) of the end of the first six-month period of each fiscal , LONDON -~792.03 64 ~ year, furnish to GOT: (A) two copies of the balance sheet of Songas as of the close of such period, and statements of sources and uses of income and retained earnings and changes in Songas' capital accounts and financial position, for such period and for the portion of the fiscal . year ending with such period, in each case setting forth in comparative form the figures for the corresponding period for the preceding fiscal year, all in reasonable detail and in accordance with generally accepted accounting principles in Tan.zania consistently applied and certified as complete and correct, subject to changes resulting from year-end adjustments, by the chief accounting officer of Songas; (B) a report identifying any factors materially and adversely affecting or that could reasonably be expected to materially and adversely affect the Project or Songas' business and operations or its fmancial condition; and (C) copies of the monthly progress. reports and any other construction-related reports given to T ANESCO pursuant to the Power Purchase Agreement. . (e) Songas shall, at least 14 days prior to.its becoming effectiVe, notifY the GOT of any contemplated (i) material change in its Memonmdum and Articles of Association; (ii) change in its fiscal year; (iii) change in the appointment of its Chief Executive Officer, Chief Financial Officer, or Company Secretary; and (iv) registration of a tranSfer of Common Sbares or Preferred Shares to any Person who thereby becomes a registered holder of greater than 5% thereof or from a Person who, immediately prior to such transfer, held greater than 5% of the outstanding Common Sbares or any Series of Preferred Shares, except with respect to Common Shares listed on the stock exchange in Tanzania. Songas shall, within 14 days following a change in the of its Board of Directors, notifY the GOT of such change. constitution 18.19. Limitation of Recourse. Except to the eXtent provided in Article VII, . the obligations of Songas hereunder and under the other Basic Agreements and Financing Agreements are obligations solely of Songas and shall not constitute a debt or obligation of either Parent Company or any other past, present or future shareholder or affiliate of Songas or any shareholder, partner, director, officer, employee or agent of the foregoing. Except as is expressly provided pursuant to Article VII of this Agreement, neither of the Parent Companies shall be liable for any amount due from Songas or the performance of any of Songas' obligations hereunder or under any other Basic Agreement . or Financing Agreement or for any Loss based hereon or thereon and no judgment or deficiency of the Parent Companies therefor. shall be sought against either Ak! LONDON ~ 46192.1)3 65 L. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their respective duly authorized officers or representatives as of the date fIrst above written. THE GOVERNMENT OF THE UNITED By: SONGAS LIMITED By: Title: PAE P ANAFRICAN ENERGY CORPORATION By: Nrune:~ ___ ~~-,~~~~~~~~ __ , Title: CDC GROUP PLC By: Name: Title: 66 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their respective duly authorized officers or representatives as of the date first above written. THE GOVERNMENT OF THE UNITED REPUBLIC OF TANZANIA By: Name: __________________________ ___ Title: Witness: SONGAS LIMITED By: Name: ____________________________ _ Title: PAE PANAFRICAN ENERGY CORPORATION By: Name: ____________________________ _ Title: CDC GROUP PLC By: WNOON "46792.03 L Implementation Agreement AnnexA Page 1 of2 CONSENTS PART I - Consents to be obtained prior to Financial Closing 1. Company Registration by the Registrar of Companies pursuant to the Companies Ordinance Cap 212. 2. Investment Incentives granted by the Minister for Finance (as approved by the Cabinet on June 6, 1997 and October 28, 1999) and published by Government Notice in the Government Gazette. 3. Environmental Impact Assessment (report including the mitigation plan, as amended) cleared by the National Environment Management Council. 4. Development Licence issued by the Minister for Energy and Minerals pursuant to the Petroleum (Exploration and Production) Act, 1980, 5. Electricity Generation, Transmission, Supply and Sale Licence issued by the Minister for Energy and Minerals pursuant the Electricity Ordinance, 1957 (as amended). 6. Business Licence issued by the Ministry of Industries and Cornmerce in conjunction with the relevant town, municipal or city council authority. 7. Way-Leave Certificate issued by the Ministry of Lands and Human Settlement Development, and published in the Government Gazette. 8. Value Added Tax Certificate issued by Commissioner General pursuant to the Tax Added Value Act, 1997 (as amended). 9. Aerodrome Operations Licence issued by the Ministry of Cornmunication and Transport under the Aerodrome Act, 1974 (as amended) and the Aerodromes Licencing Regulations, 1983 (as amended). 10. Plant Safety Inspection Permit issued by the Ministry of Labour, Youth Development and Sports. 11. Permission to carry out works within 1 km from the Songo Songo Aerodrome issued under the Petroleum (Exploration and Production) Act, 1980. AK Implementation Agreement AnnexA Page 2 of2 PART II - Consents to be obtained after Financial aosing 12. Building Pennits (in case erection of permanent buildings, shade or warehouse is required) by the relevant towns, municipals or Dar es Salaam City Council. 13. Contractors Registration (for contractors and sub-contractors to operate temporarily in Tanzania) by the Contractors Registration Board (CRB). 14. Engineers Registration (for engineers to practice in individual or consulting firm capacities) by the Engineers Registration Board (ERB). 15. Working Pennit(s) for employees (of Songas, Contractors and Sub-Contractors) issued by the Ministry of Labour, Youth Development and Sports on recommendations of the Immigration Department. 16. Relevant lnsurance(s) Policies during construction and operations pursuant to the Nationallnsurance Corporation Act, 1998 (as amended). by the Ministry of Works. 17. Road Crossing Pennit(s) for trunk roads issued 18. Pennission to cross Protected Forest(s) issued by the Ministry of Tourism and Natural Resources. 19. Railway Crossing Pennit issued by the Ministry of Transport and Communications on recommendations of Tanzania Railways Corporation (TRC) and Tanzania-Zambian Railway Authority (TAZARA). 20. Rufiji River Crossing Pennit issued by the Rufiji Basin Development Authority (RUBADA). 21. Marine Works Pennit (to allow the construction of marine pipeline across Songo Songo Island and Somanga Funga) issued by ihe Ministry of Tourism and Natural Resources. 22. Pennission to cross specific military ranges and barracks issued by the Ministry of Defence and National Services. 23. Pennission to cross the main water pipes issued by Ministry of Water on recommendations of the Dar es Salaam Water and Sewage Authority. AK l Implementation Agreement AnnexB Page 1 of 1 FORM OF PROMISSORY NOTE US$, ____ _ Dar es Salaam, Tanzania ____________ ,20 __ __ SONGAS LIMITED, a company limited by shares organized under the Laws of Tanzania, with its principal office located at Dar es Salaam, Tanzania ("S