Datedfhune 2011 PORTFOLIO GAS SUPPLY AGREEMENT between TANZANIA PETROLEUM DEVELOPMENT CORPORATION PANAFRICAN ENERGY TANZANIA LIMITED and TANZANIA ELECTRIC SUPPLY COMPANY LIMITED White & Case LLP 5 Old Broad' Street London EC2N lOW • I TABLE OF CONTENTS Page I. Definitions and Interpretation ....................................................................................... .4 2. Undertakings •............................................. _ ............................................................... 18 3. Conditions Precedent and Conditions Subsequent ...................................................... 18 4. Source of Supply .......................................................................................................... 20 5. Commencement, Duration and Supply Period ...................................... , '" ................... 21 6. Facilities ................................................................................ : ...................................... 21 7. Quantities ..................................................................................................................... 22 8. Forecasts ...................................................................................... : ............................... 24 i ......... ___ 9. __ Nominations ..............................•............•.......... , ................ _"': .. " .•. _.,,_ ............................. _ ... _~~ __ 1 O. Delivery ........................................................................................................................ 28 11. Delivery Point, Property and Risk ............................................................................... 35 12. New Delivery Points .......................... ; ......................................................................... 36 13. Intenuption & Songas Curtailment .............................................................................. 38 14. Specification ................................................................................................................ 40 15. Maintenance of Facilities ............................................................................................. 42 16. Operations .................................................................................................................... 43 17. Gas Insufficiency ......................................................................................................... 44 18. Measurement, Testing and Provision of Information .................................................. 44 19. Prices ............................................................................................................................ 48 i' 20. Billing and Payment ................................ ; .................................................................... 51 21. Taxes ............................................................................................................................ 56 22. Warranties & Covenants .............................................................................................. 56 23. Force Majeure .............................................................................................................. 59 24. Liability .........................................................................................................•.............. 62 25. Indemnities ................................................................................................................... 63 26. Default and Termination .............................................................................................. 64 27. Change in Law ............................................................................................................. 67 28. Performance Security ................................................................................................... 68 29. Assigoment .................................................................................................................. 70 30. Resolution of Disputes ................................................ : ................................................ 70 31. Confidentiality ............................................................................................................. 75 32. Notices ......................................................................................................................... 76 33. General ......................................................................................................................... 78 SCHEDULE 1 Specification ...................................................................................... 82 SCHEDULE 2 Delivery Pressure ............................................................................... 83 SCHEDULE 3 Delivery Point MDQs ........................................................................ 85 SCHEDULE 4 Delivery Points ................................................................................... 86 TIDS PORTFOLIO GAS SUPPLY AGREElI;U!:NT (hereinafter referred to as the "Agreement") is made and entered into this , 'XfF'- day of Jtme 2011 in Dar es Salaam, The United Republic of Tanzania. BETWEEN: (1) TANZANIA PETROLEUM DEVELOPMENT CORPORATION, a statutory corporation established under the laws of The United Republic of Tanzania, with its in Dar es Salaam, Tanzania (''TPDe"); principal office located (2) PANAFRICAN ENERGY TANZANIA LIMITED, a limited liability company organised under the laws of Jersey, Channel Islands, having its principal office located at Sir Walter Raleigh House, 2nd Floor, PO Box 332, 48-50 Esplanade, St Helier, Jersey JE4 9Y A, Channel Islands, being registered in the Commercial Register under No. 78852 and having its branch office at Barclays House, 5th floor, Ohio Street PO Box 80139, Dar es Salaam, Tanzania ("PAT") and together with TPDC 1. DEFINITIONS AND INTERPRETATION 1.1. Definitions The words and expressions below shall, unless the context otherwise requires, have the meaningHespectively assigned to them. "Act of Insolvency" shall mean, in respect of a Party the occurrence of any of the following: (a) the passing of a resolution for the bankruptcy, insolvency, winding up, liquidation of, or similar proceeding against or relating to such party; andlor (b) the appoin1ment of a trustee, liquidator, custodian or similar person in connection with any matter or proceeding referred to at (a) above, where the appointment is· not set aside or stayed within sixty (60) Days of such appointment; andlor (c) a court which has jurisdiction making an order to wind up or otherwise confirm the bankruptcy or insolvency of such Party, where the order is not set aside or stayed within sixty (60) Days; "Actual Additional Generation Facility Costs" shall have the meaning specified in Clause 12.1 (f); "Additional Facilities Project" shall mean (i) any expansion or upgrade to the Gas Facilities undertaken by the owners of the Gas Facilities andlor (ii) any new processing andlor transportation system which either individually or in aggregate in an aggregate gas processing and transportation capacity, at the Gas Facilities result and at any new processing andlor transportation system, at a level permanently above one hundred and fifteen thousand (115,000) mmBTU/per day and as notified to the Buyer pursuant to Clause 7.5(a); "Additional FacUlties Project Acceptance Certificate" shall mean a certificate issued by the owner of the Additional Facilities Project certifying that either (i) the acceptance tests for the Additional Facilities Project have been successfully completed Or (ii) or that the Additional Facilities Project is otherwise ready for commercial operations. "Additional Facilities Project Completion Notice" shall have the meaning specified in Clause 7.5(b); "Additional Gas" means all Natural Gas that is produced from the Songo Songo Gas Field that is in excess of Pro!ected Gas, including Complex Additional Gas; "Additional Gas Plan" shall have the meaning provided in the Gas Agreement; "Additional Generation Facility" shall have the meaning specified in Clause 12.1(a); "Additional Generation Facility Certificate" shall have the meaning specified in Clause 12.1(a)(iv); . "Additional Generation Facility Costs" shall have the meaning specified in Clause 12.1 (c)(ili); "Additional Profits Tax" shall have the meaning specified in the Production Sharing Agreement; "Adjusted Annual Take or Pay QuantIty"·or "Adjusted TOPQ" shall have the meaning specified in Clause 10.6(c); "Affiliate" shall mean either in which a Party holds directly or indirectly shares carrying at least (a) a company fifty per cent. (50%) of the votes at a general meeting of such company, corporation or other legal entity; or (b) a company holding directly or indirectly shares carrying at least :fifty per cent (50%) of the votes at a general meeting of such p~; or (c) a company of which shares carrying at least fifty per cent. (50"/0) of the vote at a general meeting of such company are held directly or indirectly by a company which also holds directly or indirectly shares carrying at least fifty per cent (50%) of the votes at a general meeting of such Party. "Aggregate Extra, Daily Excess & Hourly Oyertake Gas Quantity" shall have the meaning specified in Clause 1O.4(d); "Aggregate Total Hourly Nomination" shall have the meaning specified in Clause 9.I(a); "Amended and Restated Gas Agreement" shall mean the agreement of the same name to be entered into by GOT, Songas, TPDC and PAT as a Condition Subsequent to this Agreement; . "Annual Cap" shall have the meaning specified in Clause 24.1 (b); "Annual Contract Quantity" or "ACQ" shall mean for each Contract Year, the sum of the MDQs for each Day in that Contract Year; "Annual Deficiency Quantity" shall have the meaning specified in Clause 10.6(d); "Annual Deficiency Quantity Payment" shall have the meaning specified in Clause 10.6(e); "Annual Reconciliation Statement" shall have the meaning specified in Clause 20.2; "Bar" shall have the meaning specified in ISO 1000: 19921 Amendment I: 1998; "Basic Agreements" shall have the meaning specified in the Gas Agreement; "ReF" shall mean one billion (1,000,000,000) CF; ~~tt 1.:07(2X) "British Thermal Unit" or "BTU" shalt mean the amount of heat required to taise the temperature of one pound of pure water from fIfty uine degrees Fahrenheit (59°F) to sixty degrees Fahrenheit (60°F) at a constant pressure of fourteen decimal six uine six (14.696) pounds per square inch absolute; "Business Day" shall mean any day except Saturday or Sunday, any-public holiday Or -a-nay-on which the banks are anthorised by law or executive order to be closed in Dar es Salaam, The United Republic of Tanzania; "Buyer's Force Majeure" shall have the meauing specified in Clause 23.1 (b); "Carry Forward Gas" shall have the meaning specified in Clause 10.8(a); "Centre" shall have the meaning specified in Clause 30.4(a); "Change in Law" shall mean the occurrence of any of the following after the commencement of the Supply Period: (a) the enactment of any new Laws; (b) the modification or repeal of any Laws; of any new Laws; (c) the commencement (d) a change in interpretation, application or enforcement of any Laws; of any Governmental Authority; ( e) the action (f) the imposition of a reqnirement for a Consent of a Governmental Authority not required on or before the commencement of the Supply Period in each case where such change, fact, action or circumstance has the effect of a Material Adverse Change on the Seller; provided, however, that no change, fact or (A) relating to personnel, salaries or benefIts that apply to substantially circumstance all corporations in the United Republic of Tanzania; (B) relating to environmental Obligations in connection with the drilling of additional wells to develop further Natural Gas reserves provided that such change, fact or circumstance does not impose restrictions beyond those imposed by Section 22.1 of the Production Sharing Agreement; (C) relating to income taxes that apply similarly to other corporations in The United Republic of Tanzania or CD) relating to the Distribution Tariff or the Processing and Transportation Tariff; shall constitute a Change in Law. "Change in Law Cap" shall have the meaoing specified in Clause 27. 1 (c); "Cheek-Metering Equipment" shaIl mean the check metering equipment installed, owned and operated by the Buyer pursuant to Clause 18.1(f); "Claim" shall mean any claim, demand, investigation, action, suit or other legal proceeding made or instituted by any person; "Complex" means the electric generating facilities owned by Songas and located at Dar es Salaam, Tanzania; Ubungo, 07ID6J:lOII1R.j\71'11n "Complex Additional Gas" means fur any day during the term 19.5% of the volume of Natural Gas delivered to the Complex during such day, until 31 July 2024; "Conditions Precedent" shall have the meaning specified in Clause 3.1; "Complex-:Protected Gas" means for any day during the term 80.5% of the volume of Natural Gas delivered to the Complex during such day, until 31 July 2024; "Conditions Subsequent" shall have the meaning specified in Clause 3.5; "Conditions Subsequent Long Stop Date" shall have the meaning specified in Clause 3.7(a); "Confidential Information" shall have the meaning specified in Clause 31.1; "Consent" shall mean with respect to a Party any approval, authorisation, certificate, "Daily Excess Gas Quantity Price" shall have the meaning specified in Clause 19.2(b); "Day" shall mean twenty-four (24) consecutive Hours starting at 00:00 Hours; ''Delivery Point" shall mean the location at each Generation Facility where Natura! Gas passes the outlet flange of the Seller's Facilities and as indicated in Schedule 4 and any new location agreed by the Parties pursuant to Clause 12 at the lPTL Facility and each Additional Generation Facility; "Delivery Point MDQ" shall mean the maximum daily quantity for each Delivery Point as set out in Schedule 3 to this Agreement as amended to take account of any new Delivery Points or as agreed by the Parties pursuant to Clause 7.7(c); "Delivery Point MHQ" shall mean one twenty fourth (l/24) of Delivery Point MDQ; Point Schednle" shan have the meaning specified in Clause 9 .1 (b); "Delivery "Delivery Pressure" shall mean the minimum delivery pressure at which the Seller makes available and Buyer takes Natural Gas at each Delivery Point as specified in Schedule 2 as amended to take account of any neW Delivery Points; "Discovery Blocks" shall mean the two blocks of the Songo Songo Gas Field as designated in Annex A to the Gas Agreement; "Distribntion Tariff" shall mean the Seller's fixed and or variable costs per unit measure of Natura! Gas (mmBTU) incurred pursuant to this Agreement and relating to distribution costs in order to supply Natural Gas at a Delivery Point, including but not limited to metering, pipelines, filtration and pressure reduction costs associated with the connection and maintenance of such infrastructure, together with negotiations, marketing and administration costs determined by EWURA from time to time; "Escrow Account" shall mean the interest bearing escrow account established by the Parties in accordance with Clause 20.7; "Escrow Agreement" shall mean the agreement between the Parties and the Escrow Bank for the establishment of the Escrow Account; "Escrow Bank" shall have the meaning specified in Clause 20. 7( c); "EWURA" shall mean the Energy and Water Utilities Regulatory Authority as established by the EWURA Act; "EWURA Act" shall mean the Energy and Water Utilities Regulatory Authority Act, 2001; "Expert" shall mean a Person appointed as such pursuant to Clause 30.3; shall have the meaning specified in Clause 1 0.7(h)(i); "Extension Period" "Extra Gas Quantity" shall have the meaning specified in Clause I 0.2( a); "Facilities" shall mean the ·Seller's Facilities or the Generation Facilities, as the context requires; "Financial Closing" shall mean 11 October 2001; "Force Majeure" shall mean either Buyer's Force Majeure or Seller's Force Majeure as the context requires; "Force Majeure Notice" shall have the meaning specified in Clause 23.2(a); "Gas Agreement" shall mean the Gas Agreement dated 11 October 2001 and between GOT, Songas, TPDC and PAT; "Gas Developers Total Sales Commitments" shall have the meaniog provided in the Insufficiency Agreement; comrmSSlon, instrumentality or agency of GOT or any central, local or other and any subdivision of any such authority; governmental authority "High Heating Value" shall mean the quantity of heat, expressed in BTU per CF produced by the complete combustion of one (I) CF of Natural Gas at the standard temperature and pressure, when all of the products of combustion are cooled to the temperature existing before combustion, the water vapour formed during combustion is condensed, and all the necessary corrections have been made; "Hour" shall mean a period of sixty (60) consecutive minutes starting on the hour; "Hourly Overtake Gas Quantity" shall have the meaning specified in Clause 10.4(a); "Hourly Overtake Gas Quantity Price" shal1 have the meaning specified in Clause 19.2(a); "Hourly Overtake Gas Threshold" shall mean the prevailing MDQ for the Day multiplied by one decimal two five (1.25) divided by twenty four (24) per Hour. "ICC Centre for Expertise" shall have the meaning specified in Clause 30.3(b); "ICBm Convention" shall have the meaning specified in Clause 30.4(a); "ICBm Rules" shall have the meaning specified in Clause 30.4(a); "Implementation Agreement" shall mean the Implementation Agreement dated II October 200 I and between GOT, Songas, P AE PanAfrican Energy Corporation, Globeleq Generation Limited and CDC Group PLC as such agreement may be amended from time to time; "Indemnified Party" shall mean the party that receives the benefit of an indemnity pursuant to Clause 25.1, together with such Party's officers and employees. "Indirect Tax"· shall mean VAT, any tax replacing VAT, any excise tax and all other taxes of a similar nature imposed on the tumsactions under the Agreement The term "Indirect Tax" shall not be construed to include any type of direct taxes such as tax, Additional Profits Tax or corporate tax; income ''Initial Period Reference Required Amount" shall have the meaning specified in Clause 28.1 (i); "Initial Term" shall, subject to the proviSions of Clause l.4(a) of this Agreement, Gas Agreement; have the meaning provided in the "Insufficiency Account" shall have the meaning provided in the Insufficiency Agreement; Agreement" shall mean the agreement of the same name to be entered "Insufficiency into by GOT, TPDC, PAT, Songas and TANESCO as a Condition Subsequent to this Agreement; "Insufficiency Funding Trigger Event" shall have the meaning provided in the Insufficiency Agreement; "Interbank Rate" shall mean the rate designated as such by the Bank of Tanzania, which rate reflects on each Business Day the weighted average rate at which U.S. Dollars and Tanzanian Shillings were converted into one another in the interbank: foreign exchange market in Tanzania on the preceding Business Day, or any replacement thereof; "Interruption" shall have the meaning specified in Clause 132(a); "IPTL Facility" shall mean the IPTL converted gas engine plant at Tegeta (nominally one hundred (100) MW); "ISO" shall mean the International Organization for Standardization; "Laws" shall mean the laws of The United Republic of Tanzani!l, and all order~ rUies;-regumLfonrllIld "Maximum Daily Quantity or MDQ" shall mean for any Day in any Coutract Year the maximum daily quantity of Natural Gas available to the Buyer as set forth in Clause 7.7 or as uotified by Seller in accordance with Clauses 7.2, 10.9 and 17.I(c); "Maximum Hourly Quantity" or "MHQ" shall mean for any Hour in any Day in any Contract Year the applicable MDQ for that Day divided by twenty four; "MCF" shall mean orie thousand (1,000) CF; "MDQ Notice" shall have the meaning specified in Clause 7.6(b); "MDQ Reduction Notice" shall have the meaning specified in Clause 17 .1 (b); "Metering Faeilities" shaIl mean the measuring and testing equipment,. housings, devices and materials together with all related equipment and appliances owned and operated by the Seller which are required from time to time to measme and test the quantity, quality and calorific value ofNaturaI Gas delivered at each Delivery Point; "mmBTU" shall mean one million (1,000,000) BTUs; "Month" shall mean a period beginning at 00:00 hours on the first day of a calendar month and ending at 24:00 hours on the last day of that calendar month and .. "Monthly" shall be construed accordingly; "Monthly Statemenf' shall have the meaning specified in Clanse 20.1; ''Monthly Shortfall Quantity" shall have the meaning specified in Clause 10.5(1); "Natural Gas" shall mean any hydrocarbon or a mixture of hydrocarbons consisting principally of methane, other hydrocarbons and non-combustible gases, all of which are substantially in the gaseous phase at a pressure of one hundred and one decimal three two five (101.325) kilopascals absolute and at a temperature of fifteen (15) degrees Celsius; "New Generation Faeility" shall mean either the IP1L Facility or such other Additional Generation Facility or Additional Generation Facilities nominated by the Buyer in accordance with Clause 12.1; "New Generation Facility EPC Contractor" shall mean the contractor or contractors engaged by the Buyer (or if applicable the owner of the New Generation Facility) in connection with either the construction or conversion of the New Generation Facility; "New Generation Facility NTP" shall mean a notice to proceed provided by the Buyer (or if applicable the owner of the New Generation Facility) to the New Generation Facility EPC Contractor; "Non Power Additional Gas Sale Agreements" shall mean any agreement for the sale and purchase of Additional Gas from the Discovery Blocks by the Seller other than Power Gas Additional Sale Agreements; "Off-Specification Gas" shall have the meaning specified in Clause 14.2(a); "Operatorship Agreement" shall mean the Operatorship Agreement dated 11 October 2001 and between Songas and PAT as such agreement may be amended from time to time; "Other Buyers" shall mean any buyer of Natural Gas sourced from the Discovery Blocks and purchased from the Seller (-including, for the avoidance of.-doubt, any buyer of compressed Natural Gas) other than the Buyer; "Other Charges" sbaIl mean charges or levies that any Governmental Authority requires the Seller to include on the sale of Natural Gas pursuant to the terms of this Agreement; "Performance Security" sbaIl mean the letter of credit or bank guarantee provided by the Buyer in accordance with Clause 28; . "Person" means an individual, corporation, partnership, joint venture, trust, unincorporateci.organization, GOY.emm.entAuthority or.an)'..oth.erlegal entity; "Per Unit Insufficiency Premium" or "PUlP" shall have the meaning specified in the Insufficiency Agreement; "Pipeline" shall mean the Natural Gas transportation pipeline from the Processing Plant to the Ubungo Complex; "Pipeline Compression Facilities" shall have the meaning specified in Schedule 2; "Power Additional Gas Sale Agreements" shall mean any agreement for the sale and purchase of Additional Gas from the Discovery Blocks by the Seller to the power sector including this Agreement, the Amended and Restated Gas Agreement (upon the execution of such agreement) and any future agreement with the Buyer or any independent power producer who sells substantially all of its generated power to the Buyer or the Buyer's designated successor; "Processing and Transportation Tariff" shall mean (i) for Natural Gas transported through the Gas Facilities the gas processing and transportation tariff and other amounts determined by EWURA and charged by Songas pursuant to the Gas Processing and Transportation Agreement for the transportation and processing of Natural Gas which for the avoidance of doubt includes without limitation any amounts charged by Songas for the reservation by the Seller of capacity for processing and transporting quantities of Natural Gas to be delivered pursuant to the terms of this Agreement, or (ii) for Natural Gas transported through any new processing and/or transportation system the tariff and other amounts determined by EWURA and charged by the owner of any new processing and/or transportation system pursuant to the terms of any processing and transportation agreement for the transportation and/or processing of Natural Gas which for the avoidance of doubt includes without limitation any amounts charged by the owner of any new processing and/or transportation system for the reservation by the Seller of capacity for processing and/or transporting quantities of Natural Gas to be delivered pursuant to the terms of this Agreement; "Processing Plant" shall mean the Natural Gas processing plant constructed on Songo Songo Island including any increases to processing capacity and any future expansion or modification to the Processing Plant; "Production Plan" shall have the meaning provided in the Insufficiency Agreement; "Production Sharing Agreement" shall mean the-agreement of the same name dated 11 October 2001 and between GOT, TPDC and PAT; "Properly Nominated Quantity" and derivative expressions, includmg"Proper Nomination" shall mean, as regards any quantity of Natural Gas nominated under this Agreement by the Buyer for delivery by the Seller on any Hour, the quantity of Natural Gas nominated by the Buyer in accordance with Clause 9; "Protected Gas" shall mean as of the date of determination (i) Complex Protected Gas (ii) Natural Gas required to operate the Waw Hill Cement Plant at maximum capacity in substantially its initial configuration at Financial Closing, for the remaining Initial Term of the Power Purchase Agreement and (iii) Natural Gas required for the Village Programme, for the remaining Initial Term of the Power Purchase Agreement at a rate not to exceed 1.0 MMcfd; "Reasonable and Prudent Operator" shall mean a Party seeking, in good faith, to perform its contractual obligations and in so doing, and in the general conduct of its uodertaking, exercising that degree of skill, diligence, prudence aod foresight which would reasonably and ordinarily be expected from a skilled and experienced operator, complying with all applicable laws and international standards and practices, engaged in the same type of undertaking under the same or similar circumstances and conditions and any reference to the "standard of a Reasonable and Prndent Operator" shall be construed accordingly; "Red need MDQ" shall have the meaoing provided in Clause 17.1 (c); "Remediation" means remediation program implemented by the Seller in order to correct the corrosion and well integrity problems identified in the Corrosion and Well Integrity Review issued by Axis Well Technology on 12 December 2010 in respect of the Songo Songo Gas Field; "Reserved Gas" shall mean one hundred (100) BCF of Additional Gas from the Discovery Blocks; "Reqnired Amonnt" shall mean ao amount equal to: (a) from the date of execotion of the Agreement until the earlier to occur of the Seller serving the Buyer with (i) the Additional Facilities Project Completion Notice in accordance with Clause 7.5(b) or (ii) the MDQ Notice in accordance with Clause 7.6(b), U.S. Dollars three million six hundred thousand (3,600,000) Or such other amount as agreed by the Parties in accordance with Clause 28.1(i); (b) from the date of the MDQ Notice until the end of the Supply Period, ao amount specified in U.S. Dollars equal to sixty One multiplied by the MDQ established in the MDQ Notice multiplIed by the prevailing Contract Price; (c) from the date of the Additional Facilities Project Completion Notice until 30 June2017· U.S. Dollars ten million (10,000,000); and (d) from 1 July 2017 until 30 June 2023, U.S. Dollars eleven million (11,000,000); "Scheduled Maintenance" shall mean operations to maintain, repair, modify or replace the Seller Facilities as may be scheduled pursuant to Clause 152; "SeHer's Faeilities" shaIl mean: and (a) all Metering Facilities, wells, installations, pipelines and other equipment facilities upstream of the Processing Plant; and (b) all compression equipment and :facilities that become necessary as a result of decreases to the inlet pressure at the Processing Plant from the existing inlet pressure of 110 borg, regardless of whether such comEression equipment and facmties me instaH:ed upsbeam ill QuwilStieatil oftlie PIocesshig Plant; that in each case are required to enable the Seller to comply with its obligations under this Agreement, provided that, the term "Seller's Facilities" shall not be construed to include the Gas Facilities and for the pnrposes of Clause 6.1 and Clause 23.I(d) shall not be construed to include any plant, equipment or facilities not owned additionally by PAT; "Seller's Force Majeure" sha!l have the meaning specified in Clause 23.I(a); "Shortfall Gas" sha!l have the meaning specified in Clause 10.5(a); "Shortfall Gas Price" shall have the meaning specified in Clause 19.2(c); "Shortfall Gas Tolerance" shall have the meaning specified in Clause IO.5(b); "Songas" shall mean Songas Limited, a limited liability company incoIpOmted under the Laws ofTanzan;a; "Songo Songo Gas Field" sha!l mean the Natural Gas reserves in the Discovery Blocks; "Specification" sha!l have the meaning specified in Clause 14.1; "Supply Period" shall mean the period specified in Clause 5.2(a); "Symbion Gas Plant" shall mean the power plant located at Ubungo ;md owned by Symbion Power; "Tanzanian Shillings" shall mean the lawful currency of The United Republic of Tanzania; "TecllDieal Dispute" shall mean a dispute that relates to a technical, engineering, opemtional or accounting matter arising from this Agreement that, in any case, is of the type readily subject to resolution by an expert in the relevant field; 07t'01'i12OI11I::D7l2JCl "Tegeta Gas Plant" shall mean the gas engine plant at Tegeta (nominally 45 MW) operated by WilrtsiIii; "Term" shall have the meaning specified in Clause 5.1; "TOPQ" or "Annual Take or Pay Quantity" shall have the meaning specified in Clause 1O.6(b); "Ubungo Complex" shall mean the electric generating facilities owned and operated by Songas at Ubungo in Dar es Salaam, The United Republic of Tanzania; "US CPI" shall mean the Consumer Price Index For All Urban Consumers specified for all items published by the Bureau of Labour Statistics of The United States Department of Labour; or if such index is not then in use, by the index most nearly comparable thereto. "U.S. DoDan" shall mean the currency from time to time that is the legal tender of The United States of AmeriCa; "Ubnngo Gas Plant" shall mean the gas engine plant at Ubungo (nominally 100 . MW) owned by the Buyer; "Ubungoand Tegeta Gas Plants Supply Agreement" shall mean the gas supply agreement relating to the Ubuogo Gas and Tegeta Gas Plants dated II December 2009; "VAT" shall mean any form ofva!ue added tax, levy, import or duty or similar fee or charge, whether direct or indirect, of the Goveinment from time to time imposed on or payable by either Party relating to the sale and purchase of Natura! Gas pursuant to this Agreement; "Village Programme" means the programme of providing Natora! Gas and electric service as provided in accordance with the terms of the Gas Agreement, to Songo Songo Island and certain villages; "Wazo Hill Cement Plant" shall mean Tanzania Portland Cement Company Ltd's cement plant at W azo Hill, Dar es Salaam, Tanzania; "Wazo Hill Lateral" shall mean the Natura! Gas transportation pipeline constructed from the Pipeline to the WaztJ Hill Cement Plant located at WaN) Hill, Dar es Salaam, The United Republic of Tanzania; "Week" shall mean a period of seven (7) Days beginning at 00:00 hours on a Sunday and ending at 23:59.59 hours on the following Saturday; "WeUhead Charge" shall mean the wellhead charge for Natural Gas calculated pUrsuant to Clause 19.1(b); "Wilful Misconduct and/or Gross Negligence" shall mean any act or failure to act (whether sole, joint or concurrent) by any person, which was intended to cause, or which.was in reckless disregard of or wanton indifference to, harmful consequences such person knew, or should have known, such act or failure would have on the safety or property of another person. 12. Interpretation In this Agreement, unless the context.otherwise requires: (a) words imparting the singular shall inclnde the plural and vice versa; (b) words of any gender inclnde each other gender; , ( c) the headings in this Agreement shall not be deemed part of, or be taken into consideration in the interpretation or construction of, this Agreement and are for ease of reference only; included (d) all references to Clauses, sub-clauses and Schedules shall, unless otherwise stated, be references to Clauses, sub-clauses of and Schedu.\es to this Agreement; (e) all periods of time shall be based on, and compnted according to, the Gregorian calendar; (f) reference to a statute, by-law, regulation, rule, delegated legislation or order is to the same as amended, modified or replaced from time to time and to any by-law, regulation, rule, delegated legislation or order made thereunder; (g) reference to other agreements, documents and other instruments shall be deemed to be such agreements, documents and other instruments from time to time as amended, replaced, substitnted, assigned, novated, supplemented or otherwise transferred from time to time; (b) the terms "hereof, "herein", "hereunder" and similar words refer to this entire Agreement and not to any particular clause, Schednle or any other subdivision of the Agreement; (i) references to a time and date in connection with the performance of an obligatioI\ by a Party shall mean a reference to the time and the date in Dar es Salaam, The United Republic of Tanzania; (j) all Contract Price calculations performed pursuant to the terms of this Agreement shall be rounded to four decimal places; and (k) reference to a year is a reference to a calendar year unless otherwise defined. 1.3. References to the Insufficiency Agreement (a) The Parties agree that de£ned terms which are defined by reference to the Insufficiency Agreement shall not apply in the interpretatiOn of this Agreement until the execution and effectiveness of the Insufficiency Agreement. . , (b) The Parties also agree Clauses 17, 20.6(a)(iii), 2604 and 28.3 shall not have any effect or apply in the interpretation of this Agreement Until the execution of the Insufficiency Agreement 104. Amended and Restated Gas Agreement (a) The Parties acknowledge that the following defined terms (includedJn.(i)-(iv) below) are based upon the definitions provided to those terms in the Amended and Restated Gas Agreement which as of the date of this Agreement has not been executed The Parties agree that if there are any inconsistencies between the definitions provided to those defined telms in this Agreement and the definitions provided to those defined terms in the Amended and Restated Gas Agreement, the Parties shall amend this Agreement to ensure that the relevant defined terms in this Agreement are the same as the definitions given to those terms in the Aniended and Restated Gas Agreement. This provision applies to the following defined terms: (i) Additional Gas (including Complex Additional Gas); . Complex Protected Gas; (ii) (iii) Initial Term; and ... .liv) Protected Gas. 2. UNDERTAKINGS (a) Each of the Parties undertakes to the other to act at all times as a Reasonable and Prudent Operator in the performance of all its obligations under this Agreement. (b) Each of the Parties undertakes to the other to use reasonable endeavours acting as a Reasonable and Prudent Operator to provide such information as may be reasonably required by the other Party from time to time to assist that other Party to perfurm its obligations under this Agreement 3. CONDmONS PRECEDENT AND CONDITIONS SUBSEQUENT 3.1. Conditions Precedent The rights and obligation of the Parties under this Agreement are su~ect to and shall only become effective on the satisfaction or waiver of all of the following conditions Precedent"): precedent ("Conditions (a) Performance Security for an amount greater than or equal to the Required Amount shall have been issued in favour of the Seller in accordance with the provisions of Clause 28. (b) The establishment by the Parties of an Escrow Account in accordance with Clause 20.7. (c) The Parties shall have received any necessary consents and approvals from EWURA fur the sale ofNatura\ Gas pursuant to the teons of this Agreement. 3.2. Satisfaction of Conditions Precedent (a) The-Parties shall from time to time discuss and coordinate their plans for the satisfaction of the Conditions Precedent, aruh:ach party shall keep the other infOimed on a timely basis as to progress in relation to the satisfaction of the Conditions Precedent. (b) Each Party shall use reasonable endeavours to achieve the Conditions Precedent for which they are responsible in Clause 3.1 as soon as is reasonably . practicable and shall notifY the other Party immediately as each of fue Conditions Precedent for the satisfaction of which it is the responsible party have been achieved. Except for the provisionsofClaus\i-J, 3, 5, 6,_22,25,28,29,30,31. 32";"'.1 :33ih)ttIO of the Parties are obligated by thi;·' A;,reement Wrtfrthe Condttioiili P,,_ceuem have )een satisfied or waived in writing by the Parties. 3.4, Failure to Satisfy Conditions Precedent (a) . !ffue Conditions Precedent referred to in Clause 3.1 have not been satisfied or waived by forty-five (45) Days (or such later date as agreed by the Parties) aiter the execution of this Agreement (the "Long Stop Date"), the Buyer or the Seller may tenninate this Agreement forthwith by giving the other Party ten (IO) Days' written notice provided that neither Party shall be entitled to tenninate the Agreement if the Conditions Precedent which had not been satisfied or waived by the Long Stop Date are satisfied or waived during such 'on (10) Day period. < (b) Satisfuction of (i) the Condition Precedent referred to in Clause 3.l(a) may be waived only by the written waiver of the Seller; and (il') the Conditions Precedent referred to in Clauses 3.1(b) and (c) may be waived only by the written agreement ofboth Parties, (c) Termination of this Agreement pursuant to this Clause 3 shall be without prejndice to the rights. and remedies of either Party accrued before such tennination (mcluding a fuilure to use reasonable endeavours) to satisfY· any Conditions Precedent. 3.5. Conditions Subsequent The continued rights and obligations of the Parties uoder this Agreement are subject to the satisfaction or waiver of the following conditions subsequent ("Conditions Subsequent"): (a) The following agreements shall have been executed by the relevant Parties: (i) the Amended and Restated Gas Agreement; and 07J061'l(11l 18;07 mn (ii) the Insufficiency Agreement. (b) The approval by the relevant parties of a new Additional Gas Plan relating to the sale of Natural Gas sold pursnant to the terms of this Agreement. 3.6. Satisfaction of Conditions Subsequent (a) The Parties shall from time to time discuss and coordinate their plans for the satisfaction of the Conditions Subsequent, and each Party shall keep the other informed on a timely basis as to progress in relation to the satisfaction of the Conditions Subsequent. (b) The Parties to use reasonable endeavours to procure the assistance of the other relevant parties who are required to execute the agreements listed in Clause 3.5(a). 3.7. Failure to satisfy the Conditions Subsequent (a) If the Conditions Subsequent referred to in Clause 3.5 have not been satisfied or waived by 30 June 2012 (or such later date as agreed by the Parties) (the "Conditions Subsequent Long Stop Date"), the Seller shall have a right to suspend deliveries of Natural Gas in the circumstances set out in Clause 20.6. (b) If the Insufficiency Agreement is not executed by the Conditions Subseqnent Long Stop Date, the Parties shall meet in good faith in an attempt to reach agreement on an alternative insufficiency regime which is acceptable to all Parties. If the Parties cannot agree on an alternative insufficiency regime by 31 December 2012 either Party may tenninate this Agreement in writing and with immediate effect. The Parties agree that the Condition Subsequent relating to the execution of the Gas Agreement shall be deemed to be waived between the period commencing on the Conditions Snbsequent Long Stop Date and expiring on 31 December 2012, but only for so long during such period as the Parties continues to negotiate an alternative insufficiency regime that is acceptable to all Parties in good faith. (c) Termination of this Agreement pursuant to this Clause 3 shall be without prejudice to the rights and remedies of either Party accrued before such termination (including such rights and remedies as may have arisen as a resnlt of a failure to use reasonable endeavours to satislY any Conditions Subsequent or the failure to pay any outstanding amounts). 4. SOURCE OF SUPPLY 4.1. Source of Supply (a) The Seller will source the Natural Gas to be delivered to the Buyer in accordance with this Agreement from the Songo Songo Gas Field. (b) Notwithstanding Clause 4.1(a), the Seller has the right to source Natural Gas from sources other than the Songo Songo Gas Field at its sole discretion provided that such Natural Gas complies with the Specification. 5. COMMENCEMENT, DURATION AND SUPPLY PERIOD 5.1. Commencement and Duration This Agreement shall come-into force on the date hereof and shall, unless terminated earlier in accordance with the provisions of this Agreement, rem&n in force until the expiry of the Supply Period (the "Term"). 5.2. Supply Period (a) The supply period shall commence the day after the Seller (acting in good faith) has provided the Buyer with written notification that all of the Conditions Precedent ·have been satisfied or waived and shall end on the earlier to occur of: (i) 30 June 2023 (as such date may be extended pursuant to Clause 1O.7(i»; or (ii) the early termination of this Agreement in accordance with its terms (the "Supply Period"). 5.3. Obligation to Sell and Take or Pay During the Supply Period, Seller shall sell and deliver Natural Gas to· Buyer at the applicable Delivery Point as nominated. and agreed pursuant to the tenus of this Agreement and the Buyer shall take delivery of and pay for Natwal Gas, or pay for Natural Gas if not taken delivery 0:1; in accordance with the terms of this Agreement. 6. FAClLITmS 6.1. Seller Facilities (a) . During the Term, the Seller, at no cost to the Buyer, shall as a Reasonable and Prudent Operator and in accordance with the Laws operate,. maintain and repair the existing Seller's Facilities in a manner that Will enable the Seller. to comply with its obligations under this Agreement. (b) During the Term, the Seller, at no cost to the Buyer, shall engineer, procure, install, operate, maintain and repair such additional Seller's Facilities as are required to enable the Seller to continue to comply with its obligations under this Agreement, provided that doing so is required by Laws or by the standards of a Reasonable and Prudent Operatur. 6.2. Buyer Facilities (a) During the Term, the Buyer sha1l act as a Reasonable and Prudent Operator, in accordance with the Laws and in a manner that will enable the Buyer to comply with its obligations under this Agreement. (b) Other than in relation to the Metering Facilities pursuant to Clause 18, the Seller shall not be responsible for any costs and obligations associated with the construction, installation, maintenance and operation of' the Generation Facilities. 7. QUANTITIES 7.1. Quantities ofNamral Gas All quantities of Natural Gas supplied pursuant to this Agreement shall be expressed in mmBTU, on the basis of the High Heating Value of the Natural Gas. 7.2. Period prior to /he Additional Facilities Project Completion Notice or the MDQ Notice (a) From the commencement of the Supply Period and until the Seller has served either (i) the Additional Facilities Project Completion Notice pursuant to Clause 7.5(b) or (ii) /he MDQ Notice in accordance with Clause 7.6(b), the Seller shall, by n,otice to the Buyer given no later than 11:00 hours on the preceding Day, provide the Buyer with an indicative good faith best estimate of the available MDQ for the following Day. For the avoidance of doubt the Seller's obligation to supply the Buyer with Natural Gas in the period prior to the Additional Facilities Project Completion Notice or the MDQ Notice shall be on a reasonable endeavours basis and the Seller shall not be liable for any failure to make all or any part of the MDQ estimated by the Seller to be available in accordance with this Clause 7.2. (b) If the Seller fails to provide an indicative good faith estimate in accordance with Clause 7.2(a) for any Day, the Seller shall be deemed to have nominated an MDQ corresponding to the previous indicative good faith estimate MDQ provided by the Seller. (c) In determining each MDQ prior to the Additional Facilities Project Completion Notice, the Seller shall act as a Reasonable and Prudent Operator taking into . account available transportation and processing capacity, the priority regime described in Clause 7.3, and the Seller's obligations pursuant to Clause 7.5(a). (d) The Parties agree and acknowledge that the MDQ prior to the Additional Facilities Project Completion Notice shall, SUbject to Clause 7.2(a) not be greater than thirty six thousand seven hundred and ninety two (36,792) mmBTUfDay. 7.3. Priority Regime Sales of gas by the Seller to its customers (including to TANESCO under this Agreement) shall be prioritized as follows from the commencement of the Supply Period tmtil the Seller has served the Additional Facilities Project Completion Notice pursuant to Clause 7.5(b): (a) Complex Protected Gas, Protected Gas and Complex Additional Gas; (b) contracts the Seller has signed with non-power customers as of the date of the Re-Rating Agreement and contracts with non-power customers which were under negotiation by the Seller as of the date of the Re-Rating Agreement but were or are signed after the date of the Re-Rating Agreement (including, in each case, any amendments, extensions or renewals to such contracts) in quantities not exceeding 15,176.4 mmBTU per day; (c) sales to TANESCO pursuant to this agreement up to 36,792 mmBTU per day; and to non-TANESCO customers of the Sellers. (d) any sales 7.4. Modifications to this Agreement Related to the Additional Facilities The Parties agree to negotiate in good fuith any changes that are required to be made to this Agreement in order to facilitate the development, construction and financing of the Additional Facilities or the use of the Additional Facilities to process and transport Natura! Gas supplied pursuant to this Agreement; provided, however, that no PartY shall be obliged to accept any change to the telDlS and conditions of this Awement which mattaidllj Lfuruges the lists auU IewarUs dUit accrued w suclrParty aflfte execution of this Agreement. 7.5. Additional Facilities Project Completion Notice (a) The Seller shall keep the Buyer reasonably infonned as to the progression of the Additional Facilities Project and as to the anticipated date that the Seller shall be able to provide the Additional Facilities Project Completion Notice. (b) As soon as is reasonably practicable after the granting of the Additional Facilities Project Acceptance Certificate and in any event, within three (3) Business Days thereof, the Seller shall serve the Buyer with a written notice informing the Buyer of the occurrence of the completion of the Additional ("Additional Facilities Project Completion Notice"). Facilities Project 7.6. Failure to. serve the Additional Facilities Project Completion Notice In the event that: (a) (i) financial closing has not occurred with respect to the additional processing and/or transportation fucilities contemplated by clause (ii) of the definition of the Additional Facilities Project by 30 June 2012; or (ii) the Additional Facilities Project Completion Notice has not been delivered by 31 December 2013, then the Seller shall continue to supply Natural Gas in accordance with Clause 7.2. (b) If at any time during the Supply Period and in circwnstanees where the provisions set out in Clause 7.6(a) apply, the Buyer shall be entitled, upon written request to the Seller, to request the Seller to establish an MDQ that 07JWlOlllB:01(2JO shall, subject to the terms of the Agreement, apply for the remainder of the Supply Period. Within thirty (30) Days of receiving such request from the Buyer, the Seller shall provide the Buyer with a written notice establishing the MDQ for the remainder of the Supply Period ("MDQ Notice"). . Once the Seller has served the MDQ Notice the MDQ shall be set at the (e) in the MDQ Notice for the remainder of the Supply Period. amount stipulated 7.7. Maximum Quantities Following Completion of the Additional Facilities Project (a) With effect on and from the Day following the Day in which the Seller served the Buyer with the Additional Facilities Project Completion Notice and until the end of the Supply Period the Buyer may require the Seller, unless the Seller is excused by another provision of this Agreement, to make Natural Gas available at the Delivery Points and at each Delivery Point up to the following maximum quantities: (i) the Delivery Point MHQ; (ii) the MHQ; and (iii) 36,792 mmBTUlDay. (b) The Seller shall deliver On each Day at each Delivery Point, the quantity of Natural Gas nominated in accordance with Clause 9 ("Properly Nominated Quantity") by the Buyer in accordance with this Agreement for delivery on such Day. (c) If the MDQ is reduced in accordance with Clause 10.9 Or 17.1, the Parties shall meet to agree revisions to the Delivery Point MDQs. If, pursuant to Clause 10.9 (but for the avoidance of doubt not Clause 17.1), the Parties are unable to agree on any revisions to the Delivery Point MDQs within a period of sixty (60) Days, the Delivery Point MDQs shall be reduced on a pro rata basis to the reduction to the MDQ. . 7.8. Annual Contract Quantity In any Contract Year the Seller shall not be obliged to make a quantity of Natural Gas available above the Annual Contract Quantity. . 8. FORECASTS 8.1. Semi Annual Forecasts After either (i) the Additional Facilities Project Completion Notice has been served by the Seller pursuant to Clause 7.5 or (ii) the MDQ Notice has been served by the Seller in accordance with Clause 7.6(b), the Buyer shall make the following forecasts in respect of the quantity of Natural Gas it requires the Seller to deliver to each Delivery Point during each Contract Year: (a) In December and June of each Contract Year the Parties shall meet to discuss the: . . I /l,,,, (i) estimated Natural Gas cOllSlU1lPtion by the Buyer for the following twelve (12) Month period; (ii) Buyer's planned programmes and operations that would affect the Buyer's ability to nominate and take Natural Gas in accordance with this Agreement in each Month during the following twelve (12) MoJrth period; and (iii) Seller's planned programmes and operations and to the extent known by the Seller the planned programmes and operations of Songas that would affect the Seller's ability to make available N atnral Gas in accordance with this Agreement in each Month during the following (12) Month period. twelve (b) Within twenty (20) Days of the date of meeting which has occurred pursuant to Clause 8.1 (a), the Buyer shall give written notice to the Seller of its good faith _best .estimates of-its expected NatlL.~ Gas eonsUU.lption dut..ng the - following twelve (12) Month period. 8.2. Monthly Forecasts Not less than five (5) Days prior to the beginning of each Month occurrit!i after either (i) the Additional Facilities Project Completion Notice has been served in accordance with Clause 7.5, or (ii) the MOQ Notice has been served by the Seller in accordance with Clause 7.6(b), the Buyer shall give notice to the Seller of its good faith best estimates of the quantities of Natural Gas Buyer will require Seller to make available at each Delivery Point during the following Month on a Day by Day basis. 8.3. Weekly Forecasts Not less than forty eight (48) Hours prior to the beginning of each Week occurring after either 0) the Additional Facilities Project Completion Notice has been served in accordance with Clause 7.5 or (ii) the MDQ Notice has been served by the Seller in accordance with Clause 7.6(b), the Buyer shall give notice to the Seller of its good faith best estimates of the quantities of Natural Gas Buyer will request Seller to deliver during the full owing Week on an Hour by Hour basis. 8.4. Forecasts Not Binding The Seller acknowledges that the good faith best estimates provided by the Buyer pursuant to Clauses 8.1-8.3 shall not constitute binding estimates and that tl;te Buyer shall be entitled to make any re-nominations in accordance with Clause 9 notwithstanding any estim.ated nominations made provided that the Buyer shall not make any re-nominations after the expiry of the period referred to in Clause 9.3. 9. NOMINATIONS 9. L Nominations (a) On each Day during the Supply Period, by 17:00 hours on the Day immediately prior to the Day on which the Buyer requires Natural Gas to be delivered, the Buyer shall give notice to the Seller in writing or by electronic communication of the total quantity of Natura! Gas the Buyer will require for that following Day on an Hour by Hour basis (the "Aggregate Total Hourly Nomination'') which, subject to Clauses 10.2, 10.3 and 10.4, shall not exceed theMHQ. (b) .By 17:00 hours on the Day immediately prior to the Day on which the Buyer requires Natura! Gas and based on the Aggregate Total Hourly Nomination, the Buyer shall provide the Seller with a written communication setting out the amount of the Buyer's nomination for each Delivery Point on an Hour by Hour basis (the "Delivery Point Schedule"). (c) Except as a request for an Extra Gas Quantity, Daily Excess Gas Quantity or an Hourly Overtake Gas Quantity pursuant tu Clauses 10.2, 10.3 and 10.4, the Buyer shall have no right to nominate a quantity of Natura! Gas greater than: (i) in respect of each Delivery Point, the Delivery Point MHQ; (ii) the MHQ; Or (iii) the MDQ. (d) Subject to Clause 9.1(e) for any Day during the Supply Period, the Buyer shall have the right exercisable by notice to Seller tu request that Seller shall make available an Extra Gas Quantity, Daily Excess Gas Quantity or an Hourly Overtake Gas Quantity, which Buyer commits to pay On such Day and the Seller shall use reasonable endeavours to make available pursuant to Clauses 10.2,10.3 and 10.4. (e) The Seller shall, acting as a Reasonable and Prudent Operator, have the right on any Day during the Supply Period, to provide the Buyer with written or • electronic notice requiring the Buyer not tu take any quantity of Natura! Gas above the Delivery Point MHQ, the MHQ or the MDQ for a time period designated in such notice. 9.2 Deemed Nominations lfBuyer fails to make a Proper Nomination for any Day pursuant to Clause 9.1, then the Buyer shall be deemed to have nominated for such Day a quantity of Natura! Gas that corresponds to the quantity of Natural Gas most recently nominated by the Buyer in a Proper Nomination for the same Day of the Week. 9.3. Revised Nominations Subject to the quantity limitations of Clause 7.3 and 7.7 the Buyer may, on any Day upon one (1) Hour written or electronic notice to the Seller, vary the Delivery Point nominations notified in the Delivery Point Schedule provided that the Aggregate Total Hourly Nomination is not amended. (a) Subject to Clause 9.1(e), the Buyer may amend a Properly Nominated Quantity by written or electronic notice to the Seller, provided that any variation by the Buyer of the Aggregate Total Hourly Nomination in force is subject to the follOwing minimum periods of notice to the Seller: (i) for any increase exceeding zero (0%) and up to and including fifty (50%) per cent of the timely rate then in force, the Buyer shall give not less than two (2) Hours' notice; (ii) for any increase exceeding fifty (50%) per cent. of the timely rate then in force, the Buyer shall give not less than six (6) Hours' notice; (iii) for any decrease of the timely rete then in force for the Day, the Buyer shall give not less than one (1) Hour's notice; (b) Any revision to a Properly Nominated Quantity shall not become effective until the expiration of the minimum periods as set out in Clause 9.3(a). If the Seller does not receive the notice of revision within the relevant period set out in Clause 9.3(a), then the Proper Nominated Quantity for such Hour shall remain as the most recent Proper Nomination made under Clause 9.1. ta) '1'he=8eUer-shaJrurthe pefla/h,ntil=th&exprij afthe l'nit:ti:mum=periad afliatiec established in Clause 9.3(a), acting as a Reasonable and Prudent Operator, use reasonable endeavours, taking into account access to processing and transportation capacity and the Other Buyers,· to respond to such amended Proper Nominations prior to the expiration of the relevant time periods. (d) The Seller shall make available the revised quantity of Natural Gas requested by the Buyer set out in Clause 9.3(a) by the expization of the times indicated provided that the Seller shall have no obligation other than reasonable endeavours to make available any Extra Gas Quantity, Daily Excess Gas Quantity or Hourly Overtake Gas Quantity. (e) Within six (6) Months of the date of the Additional Facilities Project Completion Date the Parties shall meet to discuss the response times agreed pursuant to Clause 9.3(a). Either Party shall be entitled to make proposals to either increase or decrease the response times included pursuant to Clause 9.3(a). If the Parties are unable to agree on the minimum nomination response times achievable by a Reasonable and Prudent Operator within sixty (60) Days, either Party shall be entitled to refer such dispute to the Expert, who shall recommend appropriate response times, in accordance with Clause 30. 9.4. Period.ofInability (a) If during the Supply Period a Party anticipates that for any Day such Party, for any reason, will not be able to make available or take, as the case may be, the Properly Nominated Quantity, then such Party shall as soon as reasonably pzacticable before the commencement of such Day notifY the other Party of the quantity of Natural Gas, if any, which such Party expects to make available or take, as the case may be, during such Day and the reasons for such inability. (b) If due to Force Majeure, Interruption or Natural Gas failing to conform to the Specification during the Supply Period, which results in Seller being unable to 01/0612011 JI!.:Q7 on • A I: make the Properly Nominated Quantity available, or Bqyer being unable to take the Properly Nominated Qqantity then, (i) for the duration of the period covered by the then current Proper Nomination, the Properly Nominated Qqantity for each Day in such period shall continqe to be the quantity specified in sqch Proper . Nomination; and (ii) if such Inability continqes after the end of the period covered by the then current Proper Nomination, then for the continqation of sqch inability the' Properly Nominated Qqantity for each Day shall be limited to the Properly Nominated Qqantity for the Day immediately preceding the first Day of such underlying cause for such inability. 10. DELIVERY 10.1. Daily Delivery (a) Unless excused by another provision of this Agreement, on each Day during the Supply Period, the Seller shall make available, and Buyer shall take, in accordance with this Agreement, the Properly Nominated Ql!aUtity of Natural Gas. (b) Without prejudice to any other provision of this Agreement, the Parties recognise that given the construction of the gas transportation system and the Delivery Points, the Buyer has the capability to take quantities of Natural Gas withont the consent of the Seller. 10.2. Extra Gas Quantities (a) For any Hour of any Day in which the Buyer: (i) has requested a qqantity of Natural Gas pursuant to Clause 9.1(d), above the MHQ but below the Hourly Overtake Gas Threshold; or (ii) has taken a qqantity of Natural Gas above the MHQ bqt below the Hourly Overtake Gas Threshold ("Extra Gas Quantity") the Seller shall, acting as a Reasonable and Prudent Operator, where the Buyer has reqqestedthe Extra Gas Quantity, use reasonable endeavours, taking into account access to transportation and processing capacity and the Other Buyers, to make available such Extra Gas Quantity and provided that the Seller shall not be liable for any failure to make all Or any part of such El'lra Gas Ql!aUtity available. (b) In the Monthly Statement for the Month for which such Extra Gas Qqantity is delivered or taken by the Buyer, and provided that the Extra Gas Qqantity does not form part of the Daily Excess Gas Qqantity, then the Seller shall invoice the Buyer for such Extra Gas Quantities taken at the Contract Price. (c) Extra Gas Quantities delivered by the Seller and or taken by the Buyer in eXCesS of the MHQ sball count towards the TOPQ. 10.3. Daily Excess Gas Quantity (a) For any Day which the Buyer: (i) has requested a quantity of Natural Gas in excess of the MDQ; or (ii) has taken a quantity of Natural Gas in excess of the MDQ, (the "Daily Excess Gas Quantity") the Seller shan, acting as a Reasonable and Prudent Operator, where the Buyer has requested the Daily Excess Gas Quantity, use reasonable endeavours, taking into account access to transportation and processing capacity and the Other Buyers, to make available such Daily Excess Gas Quantity and provided ffiafFffie Seiler-shan (b) In the Monthly Statement fur the Month for which such Hourly Overtake Gas Quantity is requested or taken by the Buyer, the Seller shall invoice the Buyer fur the aggregate Hourly Overtake Gas Quantity taken during such Month at the Hourly Overtake Gas Quantity Price. (c) Hourly Overtake Gas Quantities delivered by the Seller and or taken by the Buyer shall count towards the TOPQ. (d) Extra Gas Quantities, Daily Excess Gas Quantities and Hourly Overtake Gas Quantities delivered by the Seller or taken by the Buyer in excess of the MHQ or the MDQ during the Supply Period ("Aggregate Extra, Daily Exeess & Hourly Overtake Gas Quantities") shall serve to reduce the MDQ for the final two (or more as the case may be) Contract Years of the Agreement in accordance with Clause 10.9. 10.5. Shortfall Gas (a) If the SeIler, on any Day in the Supply Period fails to deliver the Properly Nominated Quantity for delivery on that Day, the amount by which the Seller's deliveries full short of the Properly Nominated Quantity for such Day shall, subject to Clause IO.S(d), be classified as "Shortfall Gas" PROVIDED THAT the definition of Shortfall Gas shall not inclode any quantity of Natural Gas: (i) which the Seller has tendered for delivery to the Buyer in accordance with the Delivery Point Schedule but which the Buyer, for any reason other than Off-Specification Gas or failure to maintain the Delivery Pressure, has not accepted delivery; (ii) which the Seller is excused from making available by any provision of this Agreement including Force Majeure or Scheduled Maintenance or which the Seller is unable to deliver as a consequence of the action or inaction of the Buyer that is inconsistent with the terms of this Agreement; (iii) which the Seller has not delivered for a period of six (6) Hours after the Buyer has failed to comply with the notice issued by the Seller pursuant to Clause 9.1(e); (iv) which the Seller has not made available at a nominated Delivery Point as a consequence of the Buyer taking a quantity of Natural Gas at any other Delivery Point at a mte in excess of the mte nominated for such Delivery Point; or (v) not supplied due to the exercise by the Seller of its rights pursuant to Clause 13. (b) The "Shortfall Gas Tolerance" for each Month during the Supply Period shall be any quantity ofNaturaJ Gas which is equal to or less than two (2%) of the aggregate of quantities of Natural Gas delivered fur that Month. 01I06I2011 18:07 f2JO ( c) If, subsequent to the classification of any amount as ShortfaIl Gas, it is agreed or adjudged that the Seller was relieved from liability through Force Majeure in respect of1hat amount (or any part thereof), then such amount (or such part thereof) shall be removed from the said classification, the appropriate adjustment shall be made for the purposes of Clause 20 and the Buyer shall any necessary repayment to the Seller at the time of making-payment of-· make the ·first Monthly Statement submitted by the Seller after such agreement or adjustment. (d) In order for any quantity of Natural Gas to be classified as Shortfall Gas the Seller shall either have failed to maintain the Delivery Pressure for the relevant Delivery Point or the Buyer shall have rejected the Natural Gas in accordance with Clause 14.2. (e) In circumstances where the Seller has failed to maintain the Delivery Pressure at a Delivery Point which the Buyer has nominated pursuant to the terms of D.:livery Pressure than the Delivery Point nominated pursuant to the terms of the relevant Delivery Point Schedule and to the extent possible such quantities of Natural Gas shall not be classified as Shortfall Gas. (f) The total amount of ShortfaIl Gas classified in any Month, as adjusted to take account of the ShortfaII Gas Tolerance, shall be aggregated at the end of snch Month (such aggregate amount, together with any additions thereto, being referred to as the "Monthly Shortfall Quantity") and the first Natural Gas delivered in the following Month under this Agreement, up to an amount equal to the Monthly ShortfaIl Quantity, which would otherwise be paid for by the Buyer at the Contract Price shall be paid for by the Buyer at the Shortfall Gas Price. (g) other than the right to terminate this Agreement pursuant to Clause 26.5(c), the remedies set forth in this Clause 10.5 shall be the exclusive remedies available to the Buyer for the under delivery ofNatutiu Gas by the Seller. 10.6. Take or Pay Quantity (a) For the Supply Period, the Buyer shall.be obligated to take aod pay for, or to pay for if not taken, a quantity of Natural Gas at least equal to the Adjusted TOPQ which shall be the TOPQ for such Contract Year as adjusted pursuant to Clause 10.6(c). (b) The Aunual Take or Pay Quantity ("TOPQ") in any Contract Year shall be equal to the ACQ for such Contract Year multiplied by 0.875. (c) The "Adjusted Annual Take or Pay Quantity" for each such Contract Year means, the TOPQ minus the aggregate of the following: (i) any Shortfall Gas; 071G61Z011 18:0712X) (li) the aggregate quantity of Natural Gas not made available to the Buyer· due to Scheduled Maintenance by the Seller; (iii) the aggregate quantity of Natural Gas not made available or not taken M,yeure; due to Force Civ) the·-quantity of Carry Forward Gas which was generated in the Contract Year; previous (v) the aggregate quantities of Natural Gas not made available by the Seller for reasons of Interruption pursuant to Clause 13; and (vi) the aggregate quantities of Natural Gas rejected by the Buyer in accordance with Clause 14.2(f). (d) For each Contract Year, the Buyer shall (in accordance with Clauses 19 and 20) pay the Seller, at the Contract Price, for a quantity of Natural Gas (if any) equal to the quantity by which the Natural Gas taken and paid for by the Buyer in a Contract Year is less than the Adjusted Annual Take or Pay Quantity applicable to such Contract Year (the "Annual Deficiency Quantity"). Ce) The Buyer shall pay for any Annual Deficiency Quantity in the Contract Year following the Contract Year in which the Annual Deficiency Quantity arose ("AnnUal Deficiency Quantity Paymen!"). Payment for the Annual Deficiency Quantity shall be in accordance with Clause 20.3. (f) The Seller's sole remedy for the Buyer's failure to take quantities of Natural Gas required for the fulfilment of its obligations pursuant to this Clause 10.6 shall be to enforce the Buyer's obligation to pay the Annual Deficiency Quantity Payment, and if applicable, to terminate the Agreement pursuant to Clause 26.6(b). 10.7. Make-UpGas (a) If there is an Annual Deficiency Quantity in any Contract Year then such Annual Deficiency Quantity shall be treated as make-up gas ("Mak.".Up Gas") and in aggregate shall be referred to as the "Mak.".Up Gas Aggregate" and which shall be available to the Buyer in any of the follOwing five (5) Contract Years ("Make-Up Period"). (b) The SelIer shall supply Make-Up Gas to the Buyer provided that: (i) in any subsequent Contract Year the Buyer has taken and paid for a quantity ofN atural Gas equal to the TOPQ in that Contract Year; and Cii) the Make-Up Gas Aggregate has not been exceeded. (c) The Buyer shall take delivery of such Make-Up Gas in the reduction of any outstanding Make-Up Gas Aggregate in the order in which the Make-Up Gas which constitutes the outstanding ¥ake-Up Gas Aggregate was originally incurred. (d) Buyer must take any Make-Up Gas within the Make-Up Gas Period or the Buyer will lose its rights to such Make-Up Gas, except where: (i) Buyer has been unable to accept deliveries of Make-Up Gas for reasons of Force Majeure affecting either Party; (ii) Seller has been unable to deliver quantities of Make-Up- Gas for reasons ofInterrnption; (iii) Make-Up Gas which would have been delivered in respect of any Annual Deficiency Quantity is or would be Off-Specification Gas; (iv) Seller has failed to make available quantities of Make-Up Gas Properly Nominated by the Buyer; in which event such Make-Up Gas shall be carried forward and added to the quantity of Make-Up Gas Aggregate which Buyer shall be entitled to take (ii) the Seller is able to secure sufficient transportation and capacity arrangements to supply such outstanding Make-Up Gas Aggregate of the Supply Period; after the end (iii) the Buyer shall not be entitled to request a quantity of Natural Gas in excess of the MDQ that was applicable for the preceding Contract Year; (iv) the Buyer shall be responsible for any additional costs incurred in connection with the supply of the outstanding Make-Up Gas Aggregate including without ljrnitation any transportation and delivery costs incurred by the Seller; and (v) the Seller's gas supply obligations to the Other Buyers. (i) The Extension Period shall be deemed to commence at 00:00 Hours on the Day on which the Supply Period ends, and shall continue until the first to occur of the expiry of a period of one hundred and eighty (180) Days (such period to end at 00:00 Hours on the last Da;y of the one hundred and eighty (180) Day period) and the recovery by the Buyer of the ontstanding Make-Up Gas Aggregate. G) If at the end of the Extension Period the Buyer has failed to exercise its right to take up a quantity equivalent to the Make-Up Aggregate, the Seller pay the Buyer a cash value for the outstanding Make-Up Gas Aggregate which shall be calculated by multiplying the outstanding Make-Up Gas Aggregate at the end of the Extension Period by sixty (60%) per cent of the Contract Price applicable for the last Contract Year of the Supply Period minus the applicable Processing and Transportation Tariff and upon such payment by the Seller to the Buyer, the Buyer shall have no further liability to the Buyer fur the Make- Up Gas Aggregate. (k) Each recovery of Make-Up Gas by the Buyer will be detailed and implemented in the relevant Annnal Reconciliation Statement issued by the Seller. (I) Make-Up Gas recovered pursuant to this Clause 10.7 shall not be used for the purposes of Carry Forward Gas pursuant to Clause 10.8. 10.8. Carry Forward Gas (a) If, during any Contract Year, the Buyer takes deliVery of and pays for a quantity of Natural Gas in excess of the TOPQ, such excess quantities up to a maximum amount of the difference between the ACQ and the TOPQ for such Contract Year will be categorised as carry forward gas ("Carry Forward Gas"). (b) Carry Forward Gas (if any) shall be applied to reduce the TOPQ for the next Contract Year. In any Contract Year the Buyer has taken delivery of and has paid for a (c) quantity of Natural Gas equal to the TOPQ for that Contract Year and Buyer thereafter takes delivery of any further quantity of Natural Gas: (i) where there is an outstanding Make-Up Gas Aggregate then- such further quantity of NatoraHias-shall be.Make-Up Gas to the extent thereof; and (ii) where there is no outstanding Make-Up Gas Aggregate then such further quantity of Natural Gas shall be Carry Forward Gas. 10.9. Reduced MDQ (a) Where the Buyer has requested or the Buyer has taken Aggregate Extra, Daily Excess & Hourly Overtake Gas Quantities, the MDQ shall be revised in acCordance with Clause and (c) to take account of the Aggrelgate (b) Providing that the Aggregate Extra, Daily Excess & Hourly Overtake Gas Quantities are less than the sum in mmBTU of the relevant MDQ multiplied by three hundred and sixty five (365), then the MDQ for the final two Contract Years shall be rednced by the Aggregate Extra, Daily Excess & Hourly Overtake Gas Quantity divided by seven hundred and thirty (730) Days, subject to Clause 10.9(d) below. (c) If at any time during the Supply Period, the Aggregate Extra, Excess & Hourly Overtake Gas Quantity exceeds the sum in mmBTU of the relevant MDQ multiplied by three hundred and sixty five (365), then the MDQ for the remaining Contract Years shaIl be reduced by the Aggregate Extra, Excess & Hourly Overtake Gas Quantity divided by the remaining number of Days in the Supply Period. (d) To the extent that the Aggregate Extra, Excess & Hourly Overtake Gas Quantity reduces the MDQ pursuant to this Clause 10.9 to an amount that is less than six thousand seven hundred and fifty eight (6,758) mmBTU, the Seller agrees to provide an MDQ .,qual to six thousand seven hundred and fifty eight (6,758) mmBTU until the end of the Supply Period. 11. DELIVERY POINT, PROPERTY AND RISK 11.1. Delivery Point Natural Gas to be delivered pursuant to this Agreement shall be delivered by the Seller to the Buyer at the relevant Delivery Point for each Generation Facility, as nominated by the Buyer in the Delivery Point Schedule. 11.2. Title and Risk of Loss (a) Title to, custody of and risk of loss or damage to the Natural Gas delivered in accordance with this Agreement shall pass to the Buyer at the Delivery Point for the related Generation Facility. (b) Any liability in respect of such Natural Gas delivered to a particular Generation Facility shall also pass to the Buyer at the Delivery Point for that Generation Facility. (c) If and to the extent that the Buyer takes Natural Gas at another Delivery Point which is not accordance with the Delivery Schedule then title to, custody of, risk of loss and liability in respect of such Natural Gas shall be deemed to have passed to the Buyer at such Delivery Point. 12. NEW DELIVERY POINTS 12.1. Additional Generation Facihnes (a) Subject to the provisions of this Clause 12, during the Supply Period, the Buyer shall be entitled to request additional generation facilities (each an "Additional Generation Facility") be included as a Generation Facility provided that the Buyer shall not be entitled to request that the Ubungo Complex be included as a Generation Facility. (b) . The Buyer shall provide the Seller with a written notice identifying the Additional Generation Facility, the proposed date for delivery of first Natural Gas aud all other additional information as the Seller may reasonably require relating to the Additional Generation Facility. (c) Within thirty (30) Days of receipt by the Seller of the notice pursuant to Clause 12.1(b), the Parties shall meet to discuss in good faith the inclusion of the Additional Generation Facility as a Generation Facility and the following issues: (i) the proposed date on which the Seller could make Natural Gas available to the Additional Generation Facility; (ii) the Delivery Point, the proposed Delivery Pressure and the proposed Delivery Point MDQ for the Additional Generation Facility; (iii) to the extent not recovered through the Connection Charge, any reasonable costs that may be incurred by the Seller in making Natural Gas available at the Additional Generation Facility ("Additional Generation Facility Costs"); (iv) the proposed payment schedule for the Additional Generation Facility Costs including any requirement for Buyer pre-payment; aud (v) any amendments that may be required to the Agreement as a consequence of the inclusion of the Additional Generation Facility. (d) If the Parties are unable to agree on any of the issues included in Clause 12.1(cXi)-(v) within One hundred and eighty (180) Days of the meeting (or any later date the Parties may agree) the Buyer's request for the inclusion of the Additional Generation Facility shall be deemed to be rejected by the Seller. 1.'11' (e) If the Parties are able to agree on the issues iucluded iu Clause 12.1(c)(i)-(v), the Parties shall set out such agreement relating to the proposed Additional Generation Facility in a written statement signed by both Parties and which shall include the following information: (i) the Delivery Pressure and the location of the Delivery Poiut at the Additional Generation Facility and the proposedTIeliver)'-Poiut.MDQ; (ll) the proposed date on which the Seller could make Natural Gas available to the Additional Generation Facility; (iii) the estimated Additional Generation Facility Costs; (iv) the proposed payment schedule; and (v) (f) The Seller shall keep the Buyer reasonably informed of the Additional Facility Generation Costs. Upon completion of any iufrastrncture required to make Natural Gas available to the Buyer at the Additional Generation Facility, the Seller shall provide the Buyer with an iuvoice containing the amount of the actnal Additional Generation Facility Costs iucurred by the Seller, acting as a Reasonable and Prudent Operator and reasonable supporting documentary evidence ("Actual Additional Generation Facility Costs"). (g) The Seller shall not be obliged to deliver any quantity of Natural Gas to the Additional Generation Facility until: (i) to the extent not covered through the Connection Charge, the Buyer has paid the Seller iu full the Actual Additional Generation Facility Costs; (ll) the Seller has completed all infrastructure required to enable the delivery of Natural Gas to the Additional Generation Facility; of Clause 12.1 (k); and (iii) the Buyer has satisfied the provisions (iv) the Seller haS provided written notice to the Buyer that the conditions iu Clause l2.l(g)(i),(ri) and (ill) have been satisfied ("Additional Generation Facility .Certificate"). (h) If the Buyer considers at any thne that the conditions set out iu Clause 12.1 (g)(i)-(Ui) have been satisfied the BUyer shall provide the Seller with written notification stating that the Buyer, acting iu good faith, considers that the conditions iu Clause 12.1(g)(i)-(iii) have been satisfied and a request that the Seller should issue the Additional Generation Facility Certificate. (i) The Seller shall be obliged within ten (10) Days of the notice provided by the Buyer pursuant to Clause 12.1(h) to either: 1\ II /1/ (i) issue the Additional Generation Facility Certificate; or (ii) provide the Buyer with a written explanation as to why the SelIer is unable to issue the Additional Generation Facility Certificate. 6) The Buyer shaIl be entitled to refer any disputes relating to the issuing of the Additional Generation Facility Certificate to an Expert" pursuant to Clause 30.3. The Parties agree that the Expert determination shalI be through an expedited process. (k) The Buyer shall grant the SelIer, or shaH procure the grant of to the SeHer: (i) all necessary rights of way, easements and other real property rights in order for the Seller to instaII any new infrastructure required to :fucilitate the delivery of Natural Gas to the Additional Generation Facility; and (ii) aH necessary rights of way, easements and other real property rights required in order for the Seller to operate and maintain such Metering Facilities at the Additional Generation Facility. (I) If the Buyer wishes to nominate the IPTL Facility as a New Generation Facility or as an Additional Generation Facility, the Buyer shaH ensure that the IPTL Facility shall be capable of accepting Natural Gas at a Delivery Pressure within a range often (10) Bar to eighty seven (87) Bar. The Seller shall have no obligation to make Natural Gas available at the IPTL Facility at a Delivery of greater than ten (IO) Bar provided that Seller may in its discretion Pressure make Natural Gas available up to a maximum of eighty seven Bar. 13. INTERRUPTION & SONGAS CURTAILMENT 13.1. Notice of Interruption (a) In addition to the SelIer's rights pursuant to Clause 17 the Seller may at its sole discretion acting reasonably, interrupt or reduce the delivery of Natural Gas to the Buyer for reasons set out in Clause 13.2. (b) In the event that the SelIer wishes to interrupt the supply of Natural Gas to the Buyer pursuant to: (i) Clause 13.2(a)(i) and (ii) the Seller must give notice to the Buyer as soon as reasonably practical after Songas has provided notice of the Seller; and same to the (ii) Clause 13.2(aXiii)-(ix) the Seller must give notice to the Buyer as soon as reasonably practical. ( c) With each notice provided pursuant to Clause 13 .1 (b), the Seller shall also provide, where possible, the reason for such interruption as well as an estimate of the anticipated period ofinterruption. ..,.,.,.,......". , ............. - / 13.2. Interruption by Seller (a) The Seller may, at any time during the Supply Period, wholly or partially interrupt the supply of Natural Gas to the Buyer fur the following reasons ("Interruption"): . (i) in order to· facilitate the construction of the additional Natural Gas processing and/or transportation capacity, including any Additional Facilities Project; (ii) during any period in which the availability or capacity of the Gas Facilities, or the Sellers' access to the Gas Facilities (or any other facilities that are used in the production, processing, transportation or distribution of the Natural Gas supplied under this Agreement and are not owned by the Seller), is unavailable and/or curtailed (in whole or, subject to the priority regime described in Section 7.3, in part) for any Agreement or (ii) pursuant to any future allocation or reservation agreement relating to processing and transportation capacity; (x) where the Seller is unable to reserve capacity pursuant to any future allocation or reservation agreement relating to processing and transportation capacity; (xi) where the Pipeline is the cause of the Natural Gas being contaminated with contaminants including but not limited to black powder or particulates and where the Seller detennines in the accordance with the standard of a Reasonable and Prudent Operator that snch quantities of contaminants may cause damage to the Seller's or Buyer's equipment; or (xii) at any time before the earlier of (i) the successful completion of the Remediation, and (ii) 31 December 2012, if the delivery of Natural Gas is interrupted or curtailed as a consequence of the Seller implementing the Remediation. (b) The Seller shall not be liable for Shortfall Gas resulting from such Interruptions caused by the events set out in snb paragraphs (i) to (xii) above. (c) If there is an Interruption to the supply of Natural Gas pursuant to the terms of Clause 13.2 and the Seller has not provided the Bnyer with a reason for such Interruption pursuant to Clause 13.1 (c), the Seller shall provide the Buyer with a written explanation within ten (10) Business Days of the Interruption detailing the cause of the Interruption to the supply of Natural Gas. (d) If at any time during the Supply Petiod Songas agrees to accept liability for the quality of Natural Gas transported through the Pipeline, the Parties shall meet and discuss potential amendments to Clause 13.2(a)(v). 13.3. Songas Curtailment The Buyer acknowledges that in order to ensure that the Ubungo Complex: has a sufficient supply ofNaturaI Gas, Songas has the right to curtail sales of Natural Gas to the Seller's customers. The· Buyer hereby irrevocably waives (for the beuefit of Songas and the Seller) any and all legal or equitable rights or remedies against Songas or any of its affiliates or the Seller for any loss, damage, costs, expenses or other claims arising directly or indirectly from such curtailment. 14. SPECIFICATION 14.1. Specification Gas Natural Gas to be delivered under this Agreement shall, at each Delivery Point, comply with the standards of purity and other standards with respect to the properties, condition, composition and Delivery Pressure as set out in Schednles I and 2 (the n "Specificatiou ). 14.2. Off-Specification Gas (a) If Natural Gas offered for delivery hereunder fails to conform, or is deemed as aforesaid to have failed to conform, to the Specification ("Off-Specification ClIs''), the Seller· shall inform the Buyer as soon as reasonably practicable after it becomes aware thereof and the Buyer shall use reasonable endeavours to accept delivery of all or any part of such Off-Specification Gas, provided that doing so shall not: (i) jeopardize the safe operation of the Generation Facilities: (ii) violate applicable Laws, regulations or environmental standards; (iii) void or otherwise materially impair the warranties of the Buyer's major equipment; or (iv) have a significant negative impact upon the performance of or materiiiHy=inereasl!it!i9'(jll .. In circumstances where Natural Gas is contaminated with contaminants (f) including but not limited to black powder or particulates and where the Buyer, acting as a Reasonable Prudent Operator, determines that' the presence of contaminants including black powder or particulates may result in any of the consequences set out in Clause l4.2(a)(i)-(iv), the Buyer shall have the right to reject such quantities of Natural Gas. If the Buyer rejects such quantities of Natural Gas in accordance with this Clause 14:2(f) the Buyer shall be entitled to a reduction to the Adjusted Annual Take or Pay Quantity. (g) If the Buyer rejects Natural Gas in accordance With ClaUse l4.2(f), the Buyer shall provide the Seller with a written notice as to why the Buyer could not accept such quantities of Natural Gas. 15. MAINTENANCE OF FACILITIES 15.1. Control Centre . of the Parties shall establish a control centre, prior to the commencement (a) Each of the Supply Period, at and from which its operations for the purposes of this Agreement will be managed. Contscts on operational matters between the Parties shall take place between the Parties' control centres. During operations duly qualified personnel of the Parties shall be on duty at the respective control centres at all times on a twenty four (24) hours a day basis. The control centres shall be connected by a firil safe communications system including telephone, facsimile, electronic and any other means of communication agreed between Buyer and Seller. (b) Without prejudice to the rights and obligations of the Parties under any other provision of this Agreement, either party may take such action as it deems necessary or proper to prevent, avoid, control or bring to an end any situation of em,ergency or danger without having first to obtain the prior agreement of the other Party. If either Party takes such action, it shall inform the other Party as soon as practicable of the situation which gave rise to such action and of the action taken and shall give an estimate of the anticipated duration of such situation. 15.2. Scheduled Maintenance Period (a) If during the Supply Period, the Seller anticipates that the Seller'S Facilities will require Scheduled Maintenance which would reduce the amount of Naturai Gas that the Seller is able to make available at any or all of the Delivery Points on any Days during the Contract Year, then the Seller shall notify the Buyer at least thirty (30) Days prior to the commencement of the Scheduled Maintenance of the Days or partial Days on which it proposes to conduct such Scheduled Maintenance and the Delivery Points (if any) which the Seller can make Natural Gas available and provided that the Seller shall be entitled to reduce the applicable ACQ for reasons of Scheduled Maintenance by no more than three per cent (3%) of the applicable ACQ for such Contract Year. During any Day or Days where the Seller is undertaking Scheduled (b) Maintenance on the Seller's Facilities, the Seller shall notify the Buyer of the quanti1y ofNarural Gas (if any) that the Seller is able to make available to the Buyer on such Day or Days and the Buyer shall not be entitled to nolI!inate a quanti1y of Natoral Gas for such Days or Days in excesS of the amount of Natural Gas notified by the Seller to the Buyer pursuant to this Clause 15.2(b). (c) The Parties will liaise and co-operate together and the Seller will use reasonable endeavours to give reasonable notice to the Buyer of any interruptions for Scheduled Maintenance. (d) The Seller shall use reasonable endeavours to ensure any period of Scheduled Maintenance occurs during the period from I April to 31 May in any Contract Year and to the extent reasonably practicable co-ordinate any periods of Scheduled Maintenance with Songas' periods of scheduled maintenance at the Gas Facilities. (e) The Seller shall provide the Buyer with reasonable notice in circumstances where Songas intends to carry out scheduled maintenance of the Gas Facilities. 16. OPERATIONS 16.1. Co-ordinating Committee (a) Within thirty (30) Days following the commencement of the Supply Period, the Parties shall establish a coordinating committee for the purposes of coordinating the operations and activities of the Parties pursuant to the terms of this Agreement ("Co-ordinating Committee"). (b) TANESCO, TPDC and PAT shall designate two (2) members to represent it on the Coordinating Committee and either Parry may remove or replace any Coordinating Committee member appointed by it at any time upon notice to --~ the other Parry. '--~' ( c) Each Parry shall bear the costs of its participation in the Coordinating Committee. (d) The Coordinating Committee shall develop procedures for the holding of meetings, the keeping of minutes and the appointment and operation of sub- committees. (e) The Co-ordinating Committee shall meet at least every Month or more often if requested by the chairman. The chairmanship of the Co-ordinating Committee shall rotate each Contract Year among the Parties and the Parties agree that the first chairman shall be appointed by PAT. 16.2. Role ofCo-ominating Committee (a) The Co-ordinating Committee shall be responsible for managing the opemtional matters between the Parties including in connection with the nomination process pursuant to Clause 9. (b) The Parties shall instruct their representatives on the Co-ordinating Committee to act in good faith in dealing with matters considered by the Co-ordinating COmmittee. 17. GAS INSUFFICIENCY 17.1. Reduction to the MDQ (a) If following the occurrence of an Insufficiency Funding Trigger Event pursuant to the terms of the Insufficiency Agreement, the Seller detennines that it will curtail its deliveries to Additional Gas customers as part of its Production Plan, the Seller shall reduce existing Additional Gas supply obligations between Power Additional Gas Sales Agreements and Non Power Gas Sale Agreements on the basis of a pro rata reduction to the maximum aggregate daily quantity supplied pursuant to the Power Additional Gas Sale· Agreements and the maximum aggregate daily quantity supplied pursuant to the Non Power Additional Gas Sale Agreements provided that if the Seller has wilfully breached Section 2.I(a) of the Insufficiency Agreement and the Insufficiency Agreement is not terminated for breach of Section 2.1(a) thereunder, the reduction to the maximum aggregate daily quantity supplied pursuant to the Power Additional Gas Sale Agreements and the maximum aggregate daily quantity supplied pursuant to the Non Power Additional Gas Sale Agreements shall not be on a pro reta basis but on a basis to take account of the additional Natural Gas sales pursuant to the Non Power Additional Gas Sale Agreements. (b) The Seller shall notify the Buyer in writing and the Parties shall meet within twenty (20) Days of such notice ("MDQ Reduction Notice"). (c) If the Parties are unable to agree a reduction to the MDQ within forty (40) Days of the date of the MDQ Reduction Notice, the MDQ shall be reduced to an amount established by the Seller acting as a Reasonable and Prudent Operetor taking into account available transportation and processing capacity and the Seller's commitments to Other Buyers ("Reduced MDQ") . .. (d) In detemrining the Reduced MDQ the Seller shal! provide the Buyer with evidence reasonably satisfactory to the Buyer establishing the reason for the Reduced MDQ. (e) If the Buyer disagrees with the level of the Reduced MDQ, the Buyer shall be entitled to refer the matter to determination pursuant to Clause 30.3. 18. MEASUREMENT, TESTING AND PROVISION OF INFORMATION 18.1. Natural Gas Measurement and Testing (a) Natural Gas delivered under this Agreement at each Delivery Point shall be measured in mrnBTU applying the procedures set out in this Clause 18. (b) The Seller shall ensure that the quality of ail Natural Gas delivered by the Seller to the Buyer under this Agreement is, prior to the Delivery Point, subject to such quality control as would be implemented and exercised by a Reasonable and Prudent Operator in the circumstances (and with regard to good quality control practice prevailing from time to time during the Supply Period and, if applicable, any Extension Period). (c) All measuring and testing equipment, housings, devices and materials together with all related equipment, appliances and buildings which are required at or upstream of each Delivery Point to measure and test either or both of the quantity and quality of Natural Gas at each Delivery Point, shall be furnished and installed and (in accordance with the standard of a Reasonable and Prndent Operator) maintained and operated by the Seller at the Seller's expense, risk and liability. (d) The Seller shall own, operate and maintain the Metering Facilities in accordance with the standard of a Reasonable and Prudent Operator. The Buyer shall grant the Seller, or shall procure the grant to the Seller, all necessary rights of way, easements and other real property rights in order for 18.3 . Verification of Metering Facilities (a) The Seller shall he responsible for verifying all Metering Facilities in accordance with the manufacturers' guidelines. Depending on the actual performance of the Metering Facilities, the Parties may agree to adjust such interval. (b) If any verification test shows that any instrument comprising any of the· Metering Facilities is out of service or inaccurate in excess of the agreed tolerance Or the limits prescribed by the manufacturer, the Seller shall recalibrate the relevant instrument to measure and record within such agreed tolerance or limits as soon as is reasonably practicable. (cl The Buyer may require the Seller to carry out additional verification of the accuracy of the Metering Facilities at any time. If after such additional verification, the Metering Facilities are found to he measuring within the agreed tolerance or limits prescribed by the manufacturer and with a variance ofless than or equal to zero decimal five per cent. (0.5%) of the last preceding verification, then the costs of such additional verification shall be borne by the Buyer. If, however, the Metering Facilities are found to be measuring outside the agreed tolerance or limits prescribed by the manufacturer or with a variance of more than zero decimal five per cent. (0.5%) of the last preceding verification, then the costs of such additional verification shall be borne by the Seller. 18.4. Adjustments For billing putposes, an error of plus Or minus one zero decimal five percent. (0.5%) in the metered quantity of Natural Gas shall be considered acceptable and shall not require an adjustment in billing. If the error exceeds zero decimal five per cent. (0.5%), then adjustments shall be made as follows: (a) The Seller shall notify the Buyer in writing within one (I) week after such error is identified and shall make available to the Buyer such records as are relevant to determining the magnitude and duration of the error. The Seller shall determine or estimate the correct amount of Natural Gas actually delivered during the duration of the error which may be by reference to the records genemted by the Check Metering Equipment, if the Buyer has installed such Check Metering Equipment. The Seller shall provide the Buyer with its recommendation for billing adjustments to rectify the error. (b) If the Buyer agrees with the recommendation of the Buyer pursuant to 18 .4( a), the appropriate billing adjustments shall he made to the next Monthly Statement. (c) If the Buyer disagrees with the recommendation of the Seller pursuant to Clause I 8.4( a), the Parties shall meet in good faith to resolve such disagreement in accordance with Clause 18.6. (d) In the event that the Seller notifies the Buyer pursuant to Clause 18.4(a) and the Buyer does not express disagreement with the Seller'S recommendation for 07I06I2011 'K1J7t>r'I rectifying the error within two (2) Weeks of such notification, the Seller's recommendation shall become effective and appropriate billing adjus1ments shall be made in the next Monthly Statement. 18.5. Administration (a) ---:me Seller shall be responsible for the administration and reporting related to calibration, verification and recalibration of the Metering Facilities, including giving and receiving routine notices, scheduling and conducting tests, furnishing calibration and verification reports and making any corrections. (b) The Seller shall notify the Buyer in a timely manner of an planned calibrations, verifications and recalibrations of the Metering Facilities so that the Buyer may arrange to have a representative present. The Buyer may observe any measurement, test or adjustment to confinn that the Metering Facilities are accurate within agreed tolerances and that the determination of the g:uan1it:-L-and quality fif l-:Jatnra! r (d) The Buyer makes no representation or warranty as to the accuracy of the information provided to the Seller pursuant to Clause 18.7(c). Notwithstanding anything to the contrary herein, the Buyer shall not be liable to the Seller in contract, tort, warranty, strict liability or other legal theory for either failing to provide the Seller with dispatclt instructions pursuant to Clause 18.7(c) or for the accuracy of such information. 19. PRICES 19.1. Contract Price (a) The contract price for the Natural Gas payable by the Buyer ("Contract Price" or "CP") in each Contract Year shall be determined on the basis of High Heating VaIue and shall be calculated as follows: CP=A+B+C+D where: A = Wellhead Charge as calculated in accordance with Clause 19.1(b); B = Processing and Transportation Tariff as calculated m accordance with Clause 19.1(d); C = Distribution Tariff; D = Other Charges At the date of execution of this Agreement the indicative Contract Price shall equal: CP = 1.9845 + 0.5769 + 0 + 0 = US$2.5614 (b) On 1 July of each Contract Year the Wellhead Charge component of the Contract Price shall be recalculated and shall be the lower of the following two formulae: (i) Wellhead Charge component of the Contract Price = Po * (Average US CPI for 12 Months ending 30 June of the previous Contract Year I Average US CPI for 12 Months ending June 2007, which is agreed to be204.138; and (ii) Wellhead Charge component of the Contract Price = Po * 1.02 to the power of (Z-I), where Z is the Contract Year number, with the Contract Year beginning 1 July 2010 being Year 4; provided that if the lower of the two formulae set out in (i) and (li) above results in a reduction to the Contract Price in any Contract Year, the Contract Price shall not be reduced by more than two per cent (2%) of the Contract Price in the previous Contract Year. 07106f.l:Oll I.marl (c) For the Contract Years to 30 June 2012, the Contract Price "hall be calculated in accordance with Clause 19.1(b) using a Wellhead Charge component where Po shall equal 1.87 U.S. DoUarslmmBTU. For the Contract Years from I July 2012 onwards, the Contract Price shall be calculated in accordance with Clause 19.1(b) using a Wellhead Charge component where Po shall be 2.50 U.S. DollarslmmBTU. (d) The Processing and Transportation Tariff component of the Contract Price is U.S. Dollars 0.5900IMCF. Each Month, the Processing and Transportation Tariff shall be converted into U.S. DollarslmmBTU based on that Month's average High Heating Value for Natural Gas. For the purposes of the indicative Processing and Transportation Tariff component of the Contract Price used in the Contract Price calculation in Clause 19.1 (a), the Processing and Transportation Tariff component of the Contract Price was converted from U.S. Dollars 0.5900IMCF to U.S. Dollars 0.5759/mmBTU based on the average High Heating Value for Natural Gas in January 201 I of 1022.72 ·roint; (c) the MnQ for that Month; Shortfa1l Quantity, if any; (d) the Monthly ( e) the quantity of Off-Specification Gas, if any; (f) the quantity ofN atural Gas not delivered fur reasons of Foree Majeure; (g) the quantity of Natural Gas not delivered for reasons ofInterruption; (h) the Shortfall Gas Tolerance; (i) the Extra Gas Quantity, if any; 0) the Daily Excess Gas Quantity, if any; (k) the Hourly Overtake Gas Quantity, if any; (1) the Contract Price; (m) the Shortfall Gas Price; (n) the Daily Excess Gas Quantity Price; (0) the Hourly Overtake Gas Quantity Price; (P) Indirect Taxes; (q) any adjustments for metering corrections in accordance with Clause 18.4; (r) the sum expressed in 'U.S. Dollars due and owing to the Seller (calculated in accordance with all relevant provisions of this Agreement) in respect of Natoral Gas delivered during that Month, showing the respective apportionment (if applicable) of such sum at the respective prices applicable pursuant to this Agreement; (s) any other sum or sums due and owing expressed in U.S. Dollars at the end of that Month from one Party to the other under this Agreement; and (t) the net sum payable by one Party to the other, after taking account of all the foregoing matters set out in this Clause 20.1, (the "Monthly Statemenf'). 20.2. Annual Reconciliation Statement No later than fifteen (15) Business Days following the last Day of each Contract Year, the Seller shall render to the Buyer a statement (the "Annual Reconciliation Statement") and related supporting documentation which shall show for the preceding Contract Year the information specified below: (a) the total quantity of Natural Gas delivered during that Contract Year; (b) the aggregate qnantity of Shortfall Gas, if any; (c) the aggregate quantity of Off-Specification Gas and Natural Gas rejected pursuant to Clause l4.2(f), if any; (d) the aggregate quantity of Natural Gas not delivered for reasons of Force Majeure; (e) the aggregate quantity ofNatnral Gas not delivered for reasons ofInterruption; (f) the aggregate quantity of Daily Excess Gas Quantities, ifany; (g) the aggregate quantity of Extra Gas Quantities, if any; (h) the aggregate quantity of Hourly Overtake Gas Quantities, ifimy; (i) the Aggregate Extra, Daily Excess & Hourly Overtake Gas Quantity, if any; (j) the Adjusted TOPQ for such Contract Year, if appUcable; (k) the Annual Take or Pay Quantity for such Contract Year, if applicable; (1) the Annual Deficieney Quantity Payment for such Contract Year, if any; (m) Indirect Taxes; (n) any adjustments for metering corrections in accordance with Clause 18.4; (0) the Aggregate Make-Up Gas and/or Carry Forward Gas from previous Contract Years and showing in detail all reductions therefrom made in respect of the preceding Contract Year, together with a statement of the respective balances of Make-Up Gas and/or Carry Forward Gas (if any) to be carried forward; (p) the net sum (if any) payable by the Buyer to the Seller at the end of that Contract Year after taking account of all the foregoing matters set out in this Clause 20.2; (q) the aggregate amount of Natural Gas taken or accepted by the Buyer at the Delivery Points over that Contract Year and.ilLaggregate over the Supply Period; and (x) the TOPQ.forthenext Contract Year. 20.3. Payment Terms (a) No later than the last Business Day of every Month during which the Buyer has received the Monthly Statement, the Buyer shall pay to the Seller the sum set out in such Monthly Statement. (b) Within thirty (30) Days following the receipt of the Annual Reconciliation SfJltemen,¥ttie-ID-'YeJ7=At=tije;SelteF=@iS=tbe=sa-se=ma-yire)=S9mt-pay-m=(be=otiler the sum (if any) set out in such Annual Reconciliation Statement. ( c) Any mvoiced amount due and payable under this Agreement will be converted from u.S. Dollars to Tanzanian Shillings, using the futerbank Rate prevailing three (3) Days prior to the date of payment Payments under this Agreement shall be made in Tanzanian Shillings by direct bank transfer, or equivalent instantaneous transfer of funds, to the Party due to receive the same in such account as that Party may from time to time request. (d) If Buyer fails to pay an amount due and payable under any Monthly Statement or Annual Reconciliation Statement within five (5) Days of the due date the Seller shall be entitled to draw down an amount equal to the amount due and payable under the Monthly Statement or Annual Reconciliation Statement (as the case may be) from the Performance Security. (e) Should the due date for a payment not be a Business Day, then the due date for such payment shall be the next following Business Day. (f) Should either Party fail to make payment to the other of any sum due hereunder, interest thereon shaIl accrue at a rate per annum equal to 4% above LmOR (as in effect on the Day when such sum was originally due) on the amount due and payable denominated in U.S. DoIlars on and from the Day when payment was due until the date of payment or the date on which the on the Payment Security. Seller makes a draw down 2004. Disputed Amounts (a) If a dispute arises as to any amount reflected on the Monthly Statement or the Annual Reconciliation Statement (as the case may be), the Buyer shall provide the Seller with written notice of the disputed sum together with the basis for the dispute within twenty (20) Days of the Buyer's receipt of such Monthly or Annual Reconciliation Statement (as the case may be). Statement (b) If any portion or all of any statement is disputed, the party that is obligated to pay such amoWlt shan pay the Wlrlisputed amount set out in such Monthly Statement Or Annual Reconciliation Statement (as the case may be) on or before the due date. The disputed amount shall be deposited in the Escrow Account on or before the due date for such amoWlt and Wlill such date the dispute is resolved pursuantto Clause 20.4{ c) or (d). (c) The Parties shall try and resolve any disputed amount as quickly as possible and any adjustments necessary to reconcile the resolution of the dispute with the amount actoally paid shall be within ten (10) Business Days following the resolution of the disputed amount. (d) In the event any dispute arising as to any amount reflected in the Monthly Statement or Annual Reconciliation Statement cannot be resolved amicably, the matter shall be referred to an Expert in accordance with Clause 30.3. All such adjustments whether over payment or under payment, shall bear interest pursuant to Clause 20.3(f) from the date of over payment or under payment, as the case may be, until the date of payment. 20.5. Designated Bank Each Party shall designate a bank account for payments under this Agreement. A Party shall designate its bank by written notice to the other Party, initially not later than thirty (30) Business Days prior to the commencement of the Supply Period and thereafter not less than thirty (30) Business Days before any redesignation is to be effective. . 20.6. Seller's Right of Suspension (a) The Seller shall be entitled to suspend all or any portion of the quantity of Natural Gas deliveries to the Buyer where: (i) the Buyer: (A) fails to maintain or repleuish the Performance Security in accordance with Clause 28.1 or 28.2; (B) fails to increase the Required Amount of the Performance Security in accordance with the terms of this Agreement; (C) has failed to pay in full any outstanding amounts due and payable· by the due date and the Seller is unable to withdraw such outstanding amount from the Performance Security; CD) has breached its Obligations pursuant to Sections 2.3 or 2.4( d) of the Insufficiency Agreement; or (E) has failed to pay a disputed amount into the Escrow Account pursuant to Clause 20.4(b); (li) where there has been a Change in Law or the Change in Law Cap has been exceeded and in either case the Parties have been unable to reach agreement one hundred and five (105) Days (or such longer period as the Parties agree) after the Seller has notified the Buyer of such Change :in Law pursuant to Clauses 27.1(a) or 27.I(d) (as the case maybe); or the Insufficiency· Agreement (or any similar .agreement) has-not been (iii) executed by the Conditions Subsequent Long Stop Date :in accordance with Clause 3.7 and Songas requires the posting of security by the Seller pursuant to Section 32(b) of the Gas Agreement for sales of Additional Gas pursuant to this Agreement. (b) The Seller shall be.entitled to suspend all Or any portion of the quantity of Natural Gas delivenes to the Buyer until the earlier (or if there are multiple rights of Seller suspension the later) to occur of: (i) the Insufficiency Agreement (or any similar agreement) is executed; in full any outstanding amount and replenished the (iii) the Buyer has paid Performance Security to the Required Amount; (iv) the Buyer has deposited in full any disputed amount :into the Escrow Account; (v) the Buyer is no longer in breach of its obligations pursuant to Sections 23 or 2.4 of the lnsufficiency Agreement; (vi) the Parties have agreed a new Change in Law Cap; or (vii) the Seller exercises its right to terminate this Agreement pursuant to Clause 26. (c) The Buyer's obligation to take or pay for any quantities of Natural Gas under this Agreement shall not be suspended during any period of suspension for non-payment 20.7. Establishment ofE.crow Account (a) As a condition precedent to the effectiveness of this Agreement the Parties shall establish the Escrow Account. (b) The Escrow Account shal1 be established and maintained for the duration of the Supply Period in accordance with the terms of the Escrow Agreement. (c) The Escrow Account shall be established at a commercial bank with a branch located :in Dar es Salaam ("Escrow Bank"). (d) Any amount :in a Monthiy Statement or Annual Reconciliation Statement (as the case may be) which is disputed shall be paid by the disputing Party :into the Escrow Account on or before the due date for such disputed payment. . (e) The Parties shall then resolve any disputed amount pursuant to the provisions of Clause 20.4. Upon resolution of such dispute the Parties shall instruct the Escrow Bank to pay such disputed amount plus any accrued interest to the relevant Party. (f) The fees charged by the Escrow Bank shall be shared equally by the Seller and the Buyer. 21. TAXES 2J.J. Taxe. (a) The Seller sha1l pay, or cause to be paid, all royalties, taxes and other sums arising in respect of the production, gathering, procuring, transporting, processing and handling of Natural Gas on or before delivery by the Seller at each Delivery Point. (b) The Buyer shall pay, or cause to be paid all royalties, taxes and other sums arising after delivery of Natural Gas by the Seller at each Delivery Point in respect of the transportation, processing and handling of Natural Gas. ( c) The Buyer will be responsible for all Indirect Taxes imposed on :the transactions under this Agreement. (d) Each Party will be responsible for its own corporate and income taxes. 22. WARRANTIES & COVENANTS 22.1. PAT's Warranties (a) PAT warrants and undertakes to the Buyer that: (i) it shall have in place at the commencement of the Supply Period and shall maintain throughout the Supply Period and any Extension Period all Consents and as are necessary so as to enable it to observe and perform its obligations under this Agreement and shall use reasonable endeavours to preserve in full force and effect through the Supply Period and any Extension Period all such Consents as are necessary so as to enable it to perform its obligations under this Agreement; (li) the Seller will have good title to all Natural Gas delivered to the Buyer at each Delivery Point under this Agreement and that all such Natural Gas shall be free from a1lliens, charges and encumbrances and adverse of any and every kind; , interests (iii) the Seller shall pay, or cause to be paid, all royalties, taxes and other sums (other than Indirect Taxes) arising in respect of the production, gathering, procuring, transporting, processing and handling of Natural Gas on or before delivery by the Seller at each Delivery Point; (iv) it is duly organised and existing and in good standing under the laws of Jersey and has the right, power and authority to enter into this 1)7106;'2011 lIt:01 (1lq r ~ ~""_~. ~ ---~-- Agreement as is necessary to enable it to perform its obligations hereunder; (v) the execution, delivery and performance of this Agreement by it have been duly authorised by all necessary corporate action of PAT and this Agreement constitutes the valid binding and enforceable obligation of PAT;-and-- (vi) until the Additional Facilities Project Completion Notice, that it is compliance with its obligations contained in Clause 72(a)_ 22.2. TPDC's Warranties (a) TPDC warrants and undertakes to the Buyer that: (i) it shall have in place at the commencement of the Supply Period and shall maintain throughout the Supply Period and any Extension Period ii1F@0~g __ a!3F~~~ perform its obligations under this Agreement and shall use reasonable endeavours to preserve in full force and effect through the Supply Period and any Extension Period all such Consents as are necessary so as to enable it to perform its obligations under this Agreement; (ii) the Seller will have good title to all Natural Gas delivered to the Buyer at each Delivery Point under this Agreement and that all such Natural Gas shall be free from all liens, charges and encumbrances and adverse interests of any and every kind; (iii) the Seller shall pay, or cause to be paid, all royalties, taxes and other sums (other than Indirect Taxes) arising in respect of the production, gathering, procuring, transporting, processing and handling of Natural Gas on or before delivery by the Seller at the Delivery Point; (iv) it is duly organised and existing and in good standing under the Laws and has the right, power and anthority to enter into this Agreement as is necessary to enable it to perform its obligations hereunder; (v) the execution, delivery and performance of this Agreement by it have been duly authorised by all necessary corporate action of the Seller and this Agreement constitutes the valid binding and enforceable obligation of the Seller; and (vi) until the Additional Facilities Project Completion Notice, that it is compliance with its obligations contained in Clause 72(a). 22.3. Bnyer's Warranties ea) The Buyer warrants and undertakes to the Seller that: (i) it Shall have in place at the commencement of the Supply Period and Shall maintain throughout the Supply Period and any Extension Period all Consents and as are necessary so as to enable it to observe and 07/00011 J8:0,.,2IO perform its obligations under this Agreement and shall use reasonable endeavours to preserve in full force and effect through the Supply Period and any Extension Period all such Consents as are necessary sO as to enable it to perform its obligations under this Agreement; (ii) it shall pay, Or cause to be-paid-a11 Indirect Taxes, royalties, taxes and other sums arising after delivery of Natural Gas by the Seller at each Delivery Point in respect of the transportation, processing and handling of Natural Gas; (iii) it is duly organised and existing and in good standing under the Laws and has the right, power and authority to enter into this Agreement as is necessary to enable it to perform its obligations hereunder; (iv) the execution, delivery and performance of this Agreement by it have been duly authorised by all necessary COIporate action of the Buyer and this Agreement constitutes the valid binding and enforceable obligation of the Buyer; and (v) it shall not sell or otherwise supply Natural Gas purchased pursuant to the terms of this Agreement to any third party. 22.4. Duration of Representations and Warranties Each representation and warranty shall be true and accurate in all material respects when made and shall remain actionable for the period of the applicable statute. of limitations under applicable Laws. 22.5. Disclaimer of Other Representations and Warranties To the full extent permitted by applicable Law, except as expressly stated in this Agreement, the Parties negate any other representation or warranty, written or oral, express or implied, including any representation or warranty for merchantability, to samples, or fitness for any particular purpose. conformity 22.6. Mntual Covenants &ichParty covenants to the other that such Party: (a) shall comply with all applicable Laws and Consents goveining Or relating to its performance under this Agreement; (b) shall maintain its existence and good standing and its qualifications to do business in aU jurisdictions where performance under this Agreement is required; (c) shall maintain its corporate authority to perfonn its obligations under this Agreement; (d) shall not make, offer or authorise for the matters which are the subject of this Agreement, any payment, gift, promise or other advantage, whether directly or through any other person, to or for the use or benefit of any pUblic official (e.g. any individual holding a legislative, administrative or judicial office, including any individual employed by or acting on behalf of a public agency, public enterprise or public international organisation) or any political party or political party official or candidate fur office, where such payment, gift, promise or advantage would-violate: (i) the applicable Laws; or (ii) the laws of the country of furmation of such Party or such Party's ultimate parent company or of the principal place of business of such ultimate parent company; (e) shall maintain adequate internal controls, properly record and report all traosactions, and comply with the Laws applicable to such Party. Each Party must rely on the other Party's system of internal controls, and on the adequacy of full disclosure of the fucts, and of financial and other data regarding the deliveries 0-f Natum1-gas::::ur .. -ie. this---Arreemen-t--Nn Party is in an-y.=way authorised to take any action on behalf of another Party that would Illsult in an inadequate or inaccurate recording and reporting of assets, liabilities or any traosaction, or which would put such Party in violation of its obligations under the Laws applicable to the operations under this Agreement; and (f) shall on request of the other Party provide reasonable evidence of its compliance with such covenants withiIi a reasonable period of time. 23. FORCE MAJEURE 23.1. Force Majeure (a) The Seller shall not be in breach of any of its obligations under this Agreement, to the extent that its perfonnance is prevented, impeded or delayed by an act, event or circumstance, whether of the kind described herein or otherwise, which is not reasonably within the control of the Seller, acting as a Reasonable and Prudent Operator ("Seller's Force Majeure"). Acts,' events or circumstances which, subject as aforesaid, may constitute Seller's Force Majeure include but shall not be limited to: (i) fire, flood, drought, explosion, atmospheric disturbance, lightning, storm, tempest, hurricane, tsunami, cyclone, typhoon, tornado, earthquake, landslide, perils of the sea, soil erosion, subsidence, washout, epidemic or other acts of God; (ii) war (whether declared or undeclared), riot, civil war, blockade, insurrection, acts of public enemies, invasion, embargo, trade sanctions, revolution; (iii) strikes, lock-out, or other industrial disturbances; (iv) acts of sabotage or terrorism or the specific threat of such acts or events; (v) chemical or radioactive contamination or ionising radiation; . (vi) loss of, serious accidental damage to, or inoperability of the Seller's Facilities; (vii) loss of, serious accidental damage to, or inoperability of the Gas Facilities; (viii) any Change in Law which cannot be remedied through payment pursuant to Clause 27.1 ( c); and (ix) any event of Force Majeure in the Gas Processing and Transportation Agreement, Gas Agreement or the Operatorship Agreement. (b) Subject to Clause 23.1(c), the Buyer shall not be in breach of any of its obligations under this Agreement, to the extent that its performance is or circumstance whether of the prevented, impeded or delayed by an act, event kind described herein or otherwise, which is not reasonably within the control of the Buyer, acting as a Reasonable and Prudent Operator. ("Buyer's Force Majeure"), Acts, events or circumstances which, subject as aforesaid, may constitute Buyer's Force Majeure include but shall not be limited to: (i) fire, flood, drought, explosion, atmospheric disturbance, lightning, storm, tempest, hurricane, tsunami, cyclone, typhoon, tornado, earthquake, landslide, perils of the sea, soil erosion, subsidence, washout, epidemic or other acts of God; (ii) war (whether declared or undeclared), riot, civil war, blockade, insurrection, acts of public enemies, invasion, embargo, trade sanctions, revolution; (iii) strikes, lock-out, or other industrial disturbances; (iv) acts of sabotage or terrorism or the specific threat of· such acts or events; (v) chemical or radioactive contamination or ionising radiation; (vi) loss of, serious accidental damage to, or inoperability of the Generation Facilities. (0) NOtwithstanding Clause 23.1(b), the Buyer may only claim Buyer's Force Majeure where the Buyer's ability on any Day to take Natural Gas at the Generation Facilities is below a level equal to eighty seven point five (87.5%) per cent. of the MDQ for such Day. {d) For the avoidance of doubt, the following events shall not constitute Force Majeure: (i) breakdown or failure of equipment at the Generation Facilities or the Seller's Facilities caused by normal wear and tear, failure to properly maintain equipment or stock of spares; of funds to pay amounts when due; and (ii) unavailability , , 07I06I2011 18:07 (2Ii:) LONDON )74871.4 w; /'