{"id":42677,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/power-purchase-and-sale-contract-jiaozuo-wan-fang-power-co4.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"power-purchase-and-sale-contract-jiaozuo-wan-fang-power-co4","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/power-purchase-and-sale-contract-jiaozuo-wan-fang-power-co4.html","title":{"rendered":"Power Purchase and Sale Contract &#8211; Jiaozuo Wan Fang Power Co. Ltd. and Henan Electric Power Corp."},"content":{"rendered":"<pre>Information contained herein, marked with [***], is being filed pursuant to a \nrequest for confidential treatment.\n\n                        POWER PURCHASE AND SALE CONTRACT\n\n\n                                     BETWEEN\n\n\n\n                     JIAOZUO WAN FANG POWER COMPANY LIMITED\n\n\n                                       AND\n\n\n                        HENAN ELECTRIC POWER CORPORATION\n\n\n\n\n\n\n\n                           Dated as of April 25, 1996\n\n\n\n\n\n                                TABLE OF CONTENTS\n                                                                     Page\n\nSection 1.    Definitions And Explanation Of Terms.....................1\n\nSection 2.    Term Of Contract.........................................5\n\nSection 3.    Conditions To Obligations................................5\n\nSection 4.    Sale And Purchase........................................5\n\nSection 5.    Operation And Maintenance................................7\n\nSection 6.    Outages..................................................7\n\nSection 7.    Emergencies..............................................7\n\nSection 8     Interconnection..........................................8\n\nSection 9.    Measurement Of Electric Energy...........................8\n\nSection 10.   Change Of Law............................................10\n\nSection 11.   Method Of Payment........................................10\n\nSection 12.   Force Majeure............................................11\n\nSection 13.   Events Of Default........................................12\n\nSection 14.   Waiver...................................................13\n\nSection 15.   Conciliation And Arbitration.............................14\n\nSection 16.   Representations, Warranties And Undertakings.............15\n\nSection 17.   Liability Of Parties.....................................16\n\nSection 18.   Assignment...............................................17\n\nSection 19.   Amendment Of Contract....................................17\n\nSection 20.   Language.................................................17\n\nSection 21.   Notices..................................................17\n\nSection 22.   Applicable Law...........................................18\n\nSection 23.   Severability.............................................18\n\nSection 24.   Entire Agreement.........................................19\n\nSection 25.   No Third Party Beneficiaries.............................19\n\nAppendix A    Pricing\nAppendix B    Point Of Interconnection\nAppendix C    Technical Limits\nAppendix D    Capacity Test Procedures\n\n                                      (i)\n\n                        POWER PURCHASE AND SALE CONTRACT\n\n\n          This Power  Purchase and Sale Contract  (this  'Contract')  is entered\ninto as of April 25,  1996,  by and between  HENAN  ELECTRIC  POWER  CORPORATION\n('Purchaser') and JIAOZUO WAN FANG POWER COMPANY LIMITED ('Seller').\n\n\n                                    RECITALS\n                                    --------\n\n          A. Seller  intends to construct,  finance,  own,  manage,  operate and\nmaintain a  coal-fired  electric  generating  facility  to be located in Jiaozuo\nCity, Henan Province,  China, consisting of two 125 megawatt coal-fired electric\ngenerating units.\n\n          B. Seller wishes to make  available and sell and Purchaser  desires to\nreceive and purchase a portion of the energy produced by the Facility.\n\n\n                                    SECTION 1\n\n                      DEFINITIONS AND EXPLANATION OF TERMS\n\n          As used in this  Contract,  the  following  capitalized  terms (in the\nEnglish  version  hereof) and underlined  terms (in the Chinese  version hereof)\nshall have the meanings set forth below.\n\n          'Aluminum  Company' means Jiaozuo Aluminum Mill, a Chinese  enterprise\nregistered with the Jiaozuo  Municipal  Administration  of Industry and Commerce\nwith  its  principal  office  located  at 31 Tanan  Road,  Jiaozuo  City,  Henan\nProvince, China.\n\n          'Aluminum  Mill Power  Supply  Contract'  means the  contract  between\nSeller and the Aluminum Company pursuant to which Seller agrees to sell, and the\nAluminum  Company  agrees to purchase,  a portion of the energy  produced by the\nFacility.\n\n          'Bankruptcy'  means,  with  respect  to a party,  (i) a party  makes a\ngeneral  assignment  for the  benefit of its  creditors;  (ii) a party takes any\naction for its winding-up or  liquidation or for the  appointment of a receiver,\ntrustee or similar officer of it or of any of its revenues and assets;  or (iii)\na party  consents  to any of the  actions  described  in clause (ii) being taken\nagainst it.\n\n          'Business  Day' means any day on which the  Industrial  and Commercial\nBank of China is open for business in Jiaozuo City, Henan Province, China.\n\n                                       1\n\n\n          'Change in Law' has the meaning given such term in Section 10.\n\n          'Commercial  Operation Date' or 'COD' means either or both of the Unit\nOne COD and the Unit Two COD.\n\n          'Construction   Contract'   means  the   Contract   for   Engineering,\nProcurement  and  Construction  Services  to be  entered  into  for the  design,\nengineering and construction of the Facility.\n\n          'Dispatch Contract' has the meaning given that term in Section 3.\n\n          'Dollar'  or '$' means the lawful  currency  of the  United  States of\nAmerica.\n\n          'Emergency'  means a condition on Purchaser's  electrical system under\nwhich continued  deliveries of energy from the Facility will materially harm the\nsafe and  reliable  operation  of such  system or result  in  disruption  of its\nelectric service or create a danger to persons or property.\n\n          'Energy Payment' means the Energy Payment described in Appendix A.\n\n          'Facility'  means the coal-fired  electric  generating  facility to be\nconstructed, financed, owned and operated by Seller and located in Jiaozuo City,\nHenan  Province,  China  consisting  of two coal  boilers and two steam  turbine\ngenerating units each with an expected  capacity of approximately  125 megawatts\nand an aggregate expected capacity of approximately 250 megawatts as well as all\nassociated fuel handling and transport and generation equipment and components.\n\n          'Facility  Site'  means  the  land  located  in  Jiaozuo  City,  Henan\nProvince, China on which the Facility is to be located.\n\n          'FORCE MAJEURE' means any of the following events, which causes either\nor both of the  parties to be unable to perform its or their  obligations  under\nthis Contract: war, hostility, public disturbance, strikes, other labor disputes\nand  work  stoppages,   failure  or  interruption  of  transportation  or  other\nutilities, epidemic, fire, flood, earthquake, storm, tidal wave or other acts of\nnature,  and all other similar events beyond the control of the parties affected\nthereby.\n\n          'Governmental  Instrumentality'  means the  government of the People's\nRepublic of China or any province,  municipality or other political subdivision,\ninstrumentality,  ministry,  department,  agency, court, authority,  corporation\nwhich has authority to exercise  governmental  functions or commission under the\ndirect or indirect control of any such body.\n\n          'Grid'  means the power grid under the  control of the Henan  Electric\n\n                                       2\n\n\n[***]  Filed   separately  with  the  Commission   pursuant  to  a  request  for\nconfidential information Power Corporation.\n\n          'Joint Venture  Contract' means the Cooperative Joint Venture Contract\nfor the Jiaozuo Wan Fang Power Company Limited between the Aluminum  Company and\nJiaozuo Power Partners, L.P. ('Jiaozuo Power').\n\n          'Minimum  Take'  means (i) for the  period  beginning  on the Unit One\nTesting Date and ending on the date  immediately  preceding the Unit Two Testing\nDate, the  kilowatt-hour  amount equal to the sum of all energy  produced by the\nsecond 125  megawatt  unit of the  Facility to be  completed  and  delivered  to\nPurchaser  plus the  product  of (x) [***]  megawatts  MULTIPLIED  by (y) [***]%\nMULTIPLIED  by (z) the  number  of hours  in this  period;  (ii) for the  period\nbeginning  on the Unit Two Testing  Date (if such date is not the first day of a\ncalendar year) and ending on the last day of the calendar year in which the Unit\nTwo Testing Date occurs,  the  kilowatt-hour  amount equal to the product of (x)\n[***] megawatts  MULTIPLIED by (y) [***]%  MULTIPLIED by (z) the number of hours\nin this period;  and (iii) for each calendar year thereafter,  the kilowatt-hour\namount  equal to the  product  of (x) [***]  megawatts  MULTIPLIED  by (y) [***]\nhours,  except that for the calendar  year during which the  expiration  date of\nthis  Contract  occurs  (if  such  expiration  date is not the  last day of such\ncalendar  year),  the Minimum Take means the  kilowatt-hour  amount equal to the\nproduct of (x) [***]  megawatts  MULTIPLIED by (y) [***]%  MULTIPLIED by (z) the\nnumber of hours in such calendar  year prior to the  expiration  date;  provided\nthat Seller may adjust the Minimum Take for any year by  adjusting  the megawatt\nnumbers  in  clauses  (i),  (ii)  and  (iii)  above so long as  Seller  notifies\nPurchaser  in writing of such  adjustment  at least  twelve  months  before such\nadjustment  takes  effect.  In  addition,  the  Minimum  Take shall be  adjusted\npursuant to Section 4.1 (C) hereof or Section 4.2 of the Dispatch Contract.\n\n          'Permit'  means  any  permit,  license,  approval,   consent,  waiver,\nauthorization or other requirement  required in connection with the Project from\nany Governmental Instrumentality under applicable laws or regulations.\n\n          'Permit Event' means (i) any Permit not being granted upon application\nhaving  been duly  made;  (ii) any  Permit  ceasing  to remain in full force and\neffect,  or not being  renewed upon  application  having been duly made or being\nrenewed upon terms and conditions  which are less favorable to Seller than those\noriginally  imposed;  (iii) the attachment to any Permit subsequent to its grant\nof any terms or conditions  which adversely affect any of Seller's rights or the\nperformance by Seller of any of its obligations;  or (iv) the requirement of any\nPermit not required as of the date of this Contract.\n\n          'Point of  Interconnection'  means the physical  point as described in\nAppendix B at which interconnection is made between the Facility and Purchaser's\ntransmission facilities.\n\n          'Project'  means  the  Facility,  the  Facility  Site,  and all  other\nequipment and property that may become part of either of the foregoing.\n\n                                       3\n\n\n          'Prudent   Electrical   Practices'   means  those  codes,   rules  and\nregulations  stipulated  by the  Ministry  of  Electric  Power  of the  People's\nRepublic of China, other relevant Governmental Instrumentality or other relevant\nbodies duly authorized by the government in respect of power plant operation and\nmaintenance,  control or other related  matters.  Where there are no such codes,\nrules and regulations, 'Prudent Electrical Practices' means those practices that\nare generally  accepted for use in the  international  electric utility industry\nand  commonly  used  in  safe  and  prudent  electric  utility  engineering  and\noperations to design, engineer, construct, test, operate and maintain equipment.\n\n          'Purchaser  Energy Payment' means the Energy Payment per kilowatt hour\ndescribed  in Appendix A times the number of kilowatt  hours  delivered  for the\nrelevant period as measured pursuant to Section 9.\n\n          'Rated  Capacity' means the capacity  (expressed in kilowatts (kW)) of\nthe two 125 megawatt units of the Facility to generate energy,  as determined in\na completed  performance  test  conducted for each such unit prior to its COD in\naccordance with the test procedures contained in Appendix D.\n\n          'RMB or Renminbi' means the lawful  currency of the People's  Republic\nof China.\n\n          'Scheduled  Outage'  means a planned  interruption  of the  Facility's\ngenerating  capability that has been scheduled in advance in the manner provided\nin the Dispatch Contract and is for inspection, testing, preventive maintenance,\nrepairs or replacement.\n\n          'Technical  Limits' means the limits and  constraints  relating to the\noperation and maintenance of the Facility, as described in Appendix C.\n\n          'Testing  Date' means  either or both of the Unit One Testing Date and\nthe Unit Two Testing Date.\n\n          'Testing  Period'  means,  for each unit of the  Facility,  the period\ncommencing on the date on which,  in the opinion of Seller and as set forth in a\ncertificate  to be  delivered  by Seller to  Purchaser,  such unit is capable of\nproducing  energy for sale to Purchaser and ending on the  Commercial  Operation\nDate for such unit.\n\n          'Unit One Commercial Operation Date' or 'Unit One COD' means the first\ndate  following  the  Testing  Period for the first unit of the  Facility  to be\ncompleted  on which such unit,  in the opinion of Seller and as evidenced by the\ncompletion  of a  performance  test  during the  Testing  Period,  is capable of\nproducing  and  delivering,  and does  produce,  energy  for  sale to  Purchaser\npursuant  to the  terms  and  conditions  of this  Contract,  as set  forth in a\ncertificate to be delivered by Seller to Purchaser.\n\n          'Unit One Testing Date' means the date on which the Testing Period for\nthe first unit of the Facility to be completed commences.\n\n          'Unit Two Commercial Operation Date' or 'Unit Two COD' means the first\ndate  following  the Testing  Period for the second  unit of the  Facility to be\ncompleted  on which such unit,  in the opinion of Seller and as evidenced by the\ncompletion  of a  performance  test  during the  Testing  Period,  is capable of\nproducing  and  delivering,  and does  produce,  energy  for  sale to  Purchaser\npursuant  to the  terms and  conditions  of this  Contract,  as set forth in the\ncertificate to be delivered by Seller to Purchaser.\n\n          'Unit Two Testing Date' means the date on which the Testing\n\n                                       4\n\n[***]  Filed   separately  with  the  Commission   pursuant  to  a  request  for\nconfidential information Power Corporation.\n\n\nPeriod for the second unit of the Facility to be completed commences.\n\n\n                                    SECTION 2\n\n                                TERM OF CONTRACT\n\n          This  Contract  shall  become  effective  upon signing by the parties.\nUnless terminated pursuant to Section 13, this Contract shall continue in effect\nuntil the date that is [***] years after the Business License (as defined\nin the Joint Venture Contract) is issued to Seller.\n\n\n                                    SECTION 3\n\n                            CONDITIONS TO OBLIGATIONS\n\n          The  obligations  of  Purchaser  and Seller  under this  Contract  are\nconditioned  upon  (i)  execution  of  a  mutually   satisfactory  Dispatch  and\nInterconnection  Contract in respect of the Facility (the  'Dispatch  Contract')\nbetween  Seller and  Dispatcher  (as defined  therein)  and (ii)  receipt of all\napplicable  approvals from all relevant  Governmental  Instrumentalities  of the\nelectricity  pricing  formula set forth in Appendix A and, if required,  of this\nContract and the Dispatch Contract.\n\n\n                                    SECTION 4\n\n                                SALE AND PURCHASE\n\n4.1 (A) In accordance  with the terms and  conditions of this  Contract,  Seller\nagrees to sell, and Purchaser agrees to purchase,  energy produced and delivered\nto the Point of  Interconnection  by the  Facility.  From and after the Unit One\nTesting Date,  Purchaser shall pay Seller for energy by making  Purchaser Energy\nPayments in accordance with Section 11 and Appendix A.\n\n    (B) The parties acknowledge that the minimum output of energy to be\n\n\n                                       5\n\n[***]  Filed   separately  with  the  Commission   pursuant  to  a  request  for\nconfidential information Power Corporation.\n\n\npurchased by Purchaser will not be less than the Minimum Take. If for any reason\n(except a Force Majeure event affecting  Purchaser)  Purchaser does not purchase\nthe Minimum Take in any period,  Purchaser  shall  nevertheless  be obligated to\nmake  Purchaser  Energy  Payments to Seller in the amounts which would have been\ndue had  Purchaser  purchased the Minimum Take in such period,  i.e.,  Purchaser\nshall still pay the  Purchaser  Energy  Payment in respect of the amount of such\nshortfall,  provided  that when  calculating  such  shortfall  Purchaser  Energy\nPayment, the Energy Payment shall not include any amounts in respect of the Fuel\nCharge (as defined in Appendix A). The amount of such shortfall payment shall be\ncalculated  and made  within 30 days  after the end of a relevant  Minimum  Take\nperiod. If during the course of any period it could be reasonably  expected that\nSeller may have  difficulty  delivering  the  Minimum  Take as a result of Force\nMajeure,  Change in Law or an Emergency,  Purchaser  shall, in cooperation  with\nDispatcher,  revise the dispatch  schedule so as to permit  Seller to deliver as\nmuch energy as possible in order to achieve the Minimum Take.\n\n     (C) If Seller is unable to deliver  capacity to  Purchaser  pursuant to the\ndispatch curves specified in the dispatch  schedule because the Aluminum Company\nis taking capacity (in kilowatts) in excess of its entitlement  specified in the\nAluminum Mill Power Supply  Contract,  such excess  amount of energy (i.e.,  the\namount of energy in kilowatt  hours equal to the product of the excess  capacity\nmultiplied  by the number of hours the  Aluminum  Company is taking  such excess\ncapacity)  taken by the  Aluminum  Company  shall be deducted in  computing  the\nMinimum Take.  Seller shall provide one month prior written  notice to Purchaser\nof any planned increase or decrease in the Aluminum Company's use of electricity\nexceeding 10 megawatts.\n\n     (D) Seller may sell and  Purchaser  may purchase  energy in addition to the\nMinimum  Take at the price set forth in Appendix A.  Starting  from the Unit One\nTesting Date, for each  kilowatt-hour  of such  additional  energy  purchased by\nPurchaser above the Minimum Take,  Seller shall pay an Excess  Generation Fee to\nPurchaser equal to [***]% of the profits,  as specified in the pricing  formula,\nprior to paying income taxes from sales of energy to Purchaser  above and beyond\nthe Minimum Take. If the Seller is required by relevant  government  authorities\nto pay any taxes,  including  income  taxes,  or any amount put into the reserve\nfunds,  including  income  taxes on the amounts put into the reserve  funds,  on\naccount of the amount paid to Purchaser as an Excess  Generation  Fee,  then the\ntotal of such taxes and reserve fund payments shall be subtracted in calculating\nthe Excess  Generation  Fee.  The amount of such  payment by Seller to Purchaser\nshall be calculated  and such payment shall be made within 60 days after the end\nof each Minimum  Take  period.  If such payment is not made in full to Purchaser\nprior to the end of this  60-day  period,  a late fee will be  payable by Seller\nequal to 0.04% of such  unpaid  amount  for each day in the  first 60 days  such\namount remains unpaid and equal to 0.08% for each day thereafter. Any payment of\nsuch  unpaid  amounts  shall be applied  first to  payment  of the late  payment\ninterest charge and then to the principal amount outstanding.\n\n                                       6\n\n[***]  Filed   separately  with  the  Commission   pursuant  to  a  request  for\nconfidential information Power Corporation.\n\n\n4.2 To the extent energy is generated prior to the Unit One Testing Date, Seller\nagrees to sell and Purchaser agrees to purchase all such energy. Purchaser shall\npay the Purchaser Energy Payment for such energy.  Seller shall pay to Purchaser\na per kWh fee for  coordinating  receipt of such energy  equal to RMB [***] yuan\nwithin 20 days after the end of any month in which such energy is purchased.  If\nsuch  payment is not made in full to  Purchaser  prior to the end of this 20-day\nperiod,  a late fee will be  payable  by  Seller  equal to 0.04% of such  unpaid\namount for each day in the first 60 days such amount remains unpaid and equal to\n0.08% for each day  thereafter.  Any  payment of such  unpaid  amounts  shall be\napplied  first to payment of the late  payment  interest  charge and then to the\nprincipal amount outstanding.\n\n4.3  Purchaser  may reject and choose not to make any payment for energy that is\nproduced by Seller in willful violation of the Dispatch Contract.\n\n\n                                    SECTION 5\n\n                            OPERATION AND MAINTENANCE\n\n5.1 Seller shall be subject to dispatch by  Dispatcher  pursuant to the Dispatch\nContract.\n\n5.2 Seller shall cause the Facility to be operated and  maintained in accordance\nwith Prudent Electrical Practices and this Contract.\n\n5.3 Seller  shall  establish  and  provide to  Purchaser  a copy of the  initial\nTechnical  Limits 30 days prior to the expected  Unit One Testing Date and shall\nnotify Purchaser as soon as practicable of any change to the Technical Limits.\n\n\n                                    SECTION 6\n\n                                     OUTAGES\n\n          Provisions  regarding  outages of the  Facility  and power  supply for\nstarting, testing and restarting the Facility shall be specified in the Dispatch\nContract.  To the extent  Seller  needs power from  Purchaser,  Purchaser  shall\nprovide  such power to Seller  pursuant to a power sale  agreement to be entered\ninto between Seller and Purchaser.\n\n\n                                    SECTION 7\n\n                                   EMERGENCIES\n\n          Emergencies  shall be handled  pursuant to  provisions of the Dispatch\nContract.\n\n\n                                       7\n\n\n                                    SECTION 8\n\n                                 INTERCONNECTION\n\n8.1 Energy  produced by Seller and sold to Purchaser  pursuant to this  Contract\nshall be made  available  and  delivered  by Seller to Purchaser at the Point of\nInterconnection.\n\n8.2  Purchaser  shall  design,  control,  operate  and own  all  interconnection\nequipment  (necessary for its system to accept  capacity and energy from Seller)\nlocated at the Point of  Interconnection.  Such equipment  shall be designed and\nconstructed pursuant to an interconnection  construction contract.  Seller shall\nprovide  Purchaser a loan in the amount of [RMB 82 million]  yuan for such work.\nThe term  and  interest  rate  for  such  loan,  together  with  other  relevant\nprovisions,  shall be  specified  in a separate  agreement  to be  entered  into\nbetween Seller and Purchaser. Such interconnection will be completed and capable\nof  transmitting  electricity  at least 150 days  prior to the Unit One  Testing\nDate.  The cost of  additions  or  changes  to any of  Purchaser's  substations,\ntransformers,  transmission lines, or any other portions of Purchaser's electric\nsystem as a result of Purchaser's  load  additions or other changes  required by\nPurchaser  shall be borne entirely by Purchaser.  Purchaser shall also cooperate\nwith  Seller  and the  Aluminum  Company  in order to  switch  the  lines  which\ncurrently  provide power to the Aluminum  Company to Seller's  lines so that the\nAluminum  Company can accept power  directly from Seller  starting from the Unit\nOne Testing Date.\n\n8.3 Subject to the  provisions  of the  Construction  Contract,  Seller shall be\nresponsible at its own expense for the  engineering,  design and construction of\nthe interconnection from the Facility to the Point of Interconnection.\n\n8.4 Purchaser  shall be responsible at its own expense for making all changes to\nits system necessary to accept capacity and energy from Seller.  Purchaser shall\nat its own expense design,  construct,  maintain and repair all  interconnection\nfacilities from its system to the Point of Interconnection.\n\n\n                                    SECTION 9\n\n                         MEASUREMENT OF ELECTRIC ENERGY\n\n9.1 All measurements of energy delivered by Seller to Purchaser shall be made at\nvarious outlet lines at the high-voltage side of the Point of Interconnection by\nsuitable  kilowatt and  dual-direction  active and reactive power  kilowatt-hour\nmeters.  Seller shall install,  own and operate two sets of meters in conformity\nwith  Purchaser's  metering  standards  and  operating  procedures  and  Prudent\nElectrical Practices (except that Purchaser shall be responsible for reading the\nmeters at midnight 12 o'clock on the last day of each month with\n\n\n                                       8\n\n\nrepresentatives of Seller being present).  Purchaser's representative shall sign\na written statement of each meter reading at the time of reading the meters. One\nset of such  meters  will be the  primary  meters  and the other set will be the\nback-up meters. Readings on the primary meters will be the measurement of energy\ndelivered.  Testing, calibrating and recalibrating of metering equipment will be\nin  accordance  with  Prudent  Electrical  Practices  and  performed  jointly by\nrepresentatives  of Purchaser and Seller under the  supervision and direction of\nthe electric  energy  measurement  authority of Henan Province,  China.  Neither\nSeller nor Purchaser may change the metering facilities for the Facility without\nthe consent of the other party.\n\n9.2 If either party disputes a meter's accuracy or condition, it shall so advise\nthe  other  party in  writing.  The other  party  shall,  within  15 days  after\nreceiving such notice,  advise the disputing party in writing as to its position\nconcerning  the meter's  accuracy.  If the  parties are unable to resolve  their\ndisagreement,  then they shall  engage  either the electric  energy  measurement\nauthority of Henan Province, China or an unaffiliated,  qualified third party to\ntest  the  meter.  Should  the  meter be found  in good  order  and  registering\naccurately  (within the standard set forth in Section 9.4), the disputing  party\nshall  bear the cost of  inspection;  otherwise  the cost  shall be borne by the\nowner of the meter.\n\n9.3 Seller agrees to repair and recalibrate any malfunctioning  meter at its own\nexpense as soon as reasonably possible.\n\n9.4 If the primary meter used to measure  energy fails to register,  the back-up\nmeter will be used to measure energy.  If the difference in measurements made by\nthe  primary  meter and the  back-up  meter  exceeds  0.5  percent of the energy\nmeasured by the primary  meter in any month,  the meters  shall be repaired  and\nrecalibrated and an adjustment shall be made correcting all measurements made by\nthe  inaccurate  or  defective  meter for the amount of the  inaccuracy  in that\nmonth, in the following manner:\n\n     (A) As may be agreed upon by the parties, or\n\n     (B) In the  event  that  the  parties  cannot  agree on the  amount  of the\nadjustment  necessary  to correct the  measurements  made by any  inaccurate  or\ndefective  meter,  the parties  shall use the back-up  meter,  if installed  and\nregistering  accurately,  to determine the amount of such inaccuracy,  provided,\nhowever,  that such meter is tested in the same manner as the primary meter.  In\nthe event that the back-up meter is also found to be inaccurate by more than 0.5\npercent,  then the parties shall use the Purchaser's meter on the far end of the\ninterconnection  line,  if such meter is believed by the parties to be operating\nproperly,  adjusted  for  reasonable  line  losses.  In the  event  there is not\nagreement as to the accuracy of this set of meters,  the parties shall  estimate\nthe amount of the necessary adjustment referring to operating data maintained in\nthe Facility's control system.\n\n     (C) In the event the parties cannot agree on the actual period during\n\n                                       9\n\n\nwhich  the  inaccurate   measurements  were  made,  the  period  for  which  the\nmeasurements  are to be adjusted  shall be the last  one-half of the period from\nthe last previous test of the meter.\n\n     (D) To the extent the  adjustment  period covers a period of deliveries for\nwhich payment has already been made by Purchaser, Seller shall use the corrected\nmeasurements to recompute the amount due and Seller or Purchaser, as applicable,\nshall make up the difference between the paid and recomputed amounts. Payment of\nsuch  difference  by the owing  party shall be made not later than 30 days after\nsuch party  receives  notice of the amount due.  If such  payment is not made in\nfull prior to the end of this 30-day  period,  a late fee will be payable by the\nowing party  equal to 0.04% of such  unpaid  amount for each day in the first 60\ndays such amount remains unpaid and equal to 0.08% for each day thereafter.  Any\npayment of such  unpaid  amounts  shall be applied  first to payment of the late\npayment interest charge and then to the principal amount outstanding.\n\n\n                                   SECTION 10\n\n                                  CHANGE OF LAW\n\n          If a Change in Law occurs which requires new capital  expenditures for\nthe  Project,  increases  Seller's  operating  costs  of  the  Project,  imposes\nrestrictions  upon Seller's  operation of the Project which deny Seller the full\neconomic benefit of this Contract or interferes with Seller's performance of its\nobligations  hereunder,  the price of energy  shall be adjusted  pursuant to the\nformula  set forth in  Appendix  A so as to place  Seller  in the same  economic\nposition  as if such Change in Law had not  occurred.  A  certificate  of Seller\nsetting forth the basis for  determination  of such payment  adjustment shall be\ndelivered to  Purchaser.  As used herein,  'Change in Law' shall mean any Permit\nEvent, any change in any law, statute,  ordinance,  rule,  regulation or Prudent\nElectrical Practices (including the adoption of any new law, statute, ordinance,\nrule, regulation or Prudent Electric Practices) or interpretation thereof by any\nGovernmental  Instrumentality  from those in effect on the date of  execution of\nthis Contract,  or any  prohibition or acts by government or public agency which\ncauses  either  or both of the  parties  to be unable  to  perform  its or their\nobligations hereunder.\n\n\n                                   SECTION 11\n\n                                METHOD OF PAYMENT\n\n11.1 On or before the fifth Business Day of each calendar  month  beginning with\nthe first full  calendar  month after the Unit One Testing  Date,  Seller  shall\nsubmit to Purchaser a billing  statement showing the amount payable by Purchaser\nhereunder  as Purchaser  Energy  Payments,  and the  calculation  thereof,  with\nrespect to the  immediately  preceding  month.  Purchaser shall pay\n\n\n                                       10\n\n\nsuch amounts  within 20 calendar days after  Purchaser's  receipt of the billing\nstatement. Payment shall be made by transfer to Seller's account in a bank to be\ndesignated by Seller.\n\n11.2 Notwithstanding the foregoing, if a Purchaser Energy Payment is not paid in\nfull to Seller on or before  the close of  business  on the date due, a late fee\nwill be payable by Purchaser  equal to 0.04% of such unpaid  amount for each day\nin the first  sixty days such amount  remains  unpaid or equal to 0.08% for each\nday  thereafter.  Any payments of such unpaid  amount shall be applied  first to\npayment of any late payment  interest  charge and then to the  principal  amount\noutstanding.\n\n11.3  In  the  event  Purchaser  disputes  all  or any  portion  of any  billing\nstatement,  Purchaser shall  nevertheless pay the full amount when due and shall\ngive written  notice of the dispute to Seller.  Such notice  shall  identify the\ndisputed  bill and contain a detailed  statement of the amount and nature of the\ndispute. No adjustment shall be made for disputed amounts unless notice is given\ntogether with a detailed  statement of the claim. A billing  statement  shall be\ndeemed  final and not  subject to  dispute by  Purchaser  if  Purchaser  has not\ndelivered a notice  disputing such billing  statement  within three months after\nPurchaser's  receipt  of  such  billing  statement.  Seller  shall  give  prompt\nconsideration  to any dispute and shall notify  Purchaser of its position within\n30 days following  receipt of Purchaser's  written  notice.  If Seller shall not\nhave responded to Purchaser within such 30 day period, Seller shall be deemed to\nhave accepted  Purchaser's  position.  Upon final  determination  of the correct\namount and all necessary  adjustments,  any  overpayment by Purchaser  (together\nwith  interest  thereon  at a rate of  0.04%  per  day),  shall be  credited  to\nPurchaser in the monthly billing statement next submitted to Purchaser.\n\n11.4 All payments under this Contract shall be made in Renminbi.\n\n\n                                   SECTION 12\n\n                                  FORCE MAJEURE\n\n12.1 If a party is wholly or partially unable to perform its obligations arising\nunder this Contract due to Force Majeure, the party claiming Force Majeure shall\ngive the other party written notice  describing the Force Majeure event together\nwith a  certificate  stating  that such party is wholly or  partially  unable to\nperform its  obligations  under this  Contract as a result of such Force Majeure\nevent.\n\n12.2 If, as a result of Force Majeure,  a party is rendered  wholly or partially\nunable to perform  its  obligations  under this  Contract,  that party  shall be\nexcused to the extent so affected; provided that:\n\n     (A) the  suspension of  performance  shall be of no greater scope and of no\nlonger duration than is required by the Force Majeure event;\n\n                                       11\n\n\n     (B) no  obligations  under this Contract which shall have arisen before the\nForce Majeure event shall be excused as a result of the Force Majeure event;\n\n     (C) no  payment  obligations  shall be  excused  as a result  of the  Force\nMajeure event; and\n\n     (D) the party claiming  Force Majeure shall use its  reasonable  efforts to\nremedy its inability to perform.\n\n\n                                   SECTION 13\n\n                                EVENTS OF DEFAULT\n\n13.1  Purchaser  may give a notice  of  termination  of this  Contract  upon the\noccurrence and continuance of any of the following events of default:\n\n     (A) Bankruptcy of Seller;\n\n     (B) Seller abandons the Project for a period of 12 consecutive months; or\n\n     (C) Seller  fails to perform  any of its  material  obligations  under this\nContract which continues  unremedied for 30 days after notice from Purchaser (or\nif such failure  cannot be remedied  within 30 days,  such longer  period not to\nexceed six months as may be reasonably necessary to remedy such failure);\n\nprovided, however, that Purchaser may not terminate this Contract as a result of\nany event listed above which is caused  directly or  indirectly by any action or\nomission by Purchaser or any Governmental  Instrumentality  (including breach by\nPurchaser of its obligations  under this Contract or breach by Dispatcher of its\nobligations under the Dispatch Contract).\n\n13.2  Seller  may  give a  notice  of  termination  of this  Contract  upon  the\noccurrence and continuance of any of the following events of default:\n\n     (A) Bankruptcy of Purchaser;\n\n     (B) a Permit Event;\n\n     (C) any Governmental  Instrumentality fails to perform or repudiates any of\nits obligations under any of the documents set forth in Section 3 or any Permit;\n\n     (D)  any   Governmental   Instrumentality   expropriates  or  threatens  to\nexpropriate  Seller or any assets or rights of Seller or takes other action that\nadversely  affects the enjoyment by Seller of its rights,  or the performance by\nSeller of any of its obligations under this Contract;\n\n                                       12\n\n\n     (E) Purchaser  fails to pay when due any amount payable by Purchaser  under\nthis Contract;\n\n     (F) Purchaser fails to perform any of its material  obligations (other than\npayment  obligations  referred to in clause (E) above) under this Contract which\ncontinues unremedied for 30 days after notice from Seller; or\n\n     (G) any Governmental  Instrumentality  imposes restrictions  prohibiting or\nmaterially limiting Seller's or its principals' ability to repatriate profits or\nrevenues from the Project outside China.\n\nNothing in this  Section 13 shall  preclude  Seller from  exercising  its rights\nunder Section 10, if applicable, or any other rights or remedies hereunder.\n\n13.3 Any  termination  notice shall specify the event of default  giving rise to\nthe  termination  notice.  Following the termination  notice,  the parties shall\nconsult  for a period of up to 90 days as to what steps  shall be taken.  At the\nexpiration  of the 90 day period and unless  the  parties  shall have  otherwise\nagreed or the event of default giving rise to the termination  notice shall have\nbeen remedied,  the party having given the termination notice may terminate this\nContract by giving  written  notice to the other party,  whereupon this Contract\nshall terminate on the date specified for termination in such notice.\n\n13.4 Following termination of this Contract by Seller due to Purchaser's default\nhereunder,  Purchaser shall, to the extent permitted by law, transmit any energy\nproduced by Seller to any entity  designated  by Seller which is  interconnected\nwith Purchaser.  Purchaser shall be paid its reasonable  costs for  transmitting\nsuch energy.\n\n13.5 In the event of any breach or  default  under  this  Contract  other than a\ndefault  referred to in Section 13.1,  Purchaser shall not be relieved of any of\nits  liabilities  or  obligations  hereunder,  including its  obligation to make\nPurchaser  Energy Payments  whether  becoming due before or after such breach or\n\n13.6 The rights upon default provided herein are cumulative and not exclusive of\nany other rights upon default available under Chinese law; provided that neither\nparty  shall  have any right to  terminate  this  Contract  except as  expressly\nprovided in this Section 13.\n\n\n                                   SECTION 14\n\n                                     WAIVER\n\n          Failure  by either  party to  exercise  any of its  rights  under this\nContract  shall not  constitute a waiver of such rights.  Neither party shall be\ndeemed to\n\n                                       13\n\n\nhave waived any right  resulting  from any failure to perform by the other party\nunless it has made such waiver specifically in writing.\n\n\n                                   SECTION 15\n\n                          CONCILIATION AND ARBITRATION\n\n15.1 Dispute  Settlement.  Except as otherwise  provided in this  Contract,  the\nparties shall attempt to settle any dispute arising out of or in connection with\nthis  Contract   through  friendly   consultation   between   themselves.   Such\nconsultation  shall begin  promptly  after one party has  delivered to the other\nparty a written request for such  consultations.  If the parties do not reach an\namicable  solution  within 30 days of receipt of such notice,  either party may,\nwith notice to the other party,  submit the dispute for binding  arbitration  in\nBeijing, China, under the auspices of the China international Economic and Trade\nArbitration  Commission  ('CIETAC')  in accordance  with the CIETAC  Arbitration\nRules as in effect  on the date of this  Contract  (except  to the  extent  this\nSection 15 specifies different procedures,  in which event such procedures shall\ngovern the arbitration,  including the selection of the arbitration  panel). The\nparties  agree  that any  dispute  arising  out of or in  connection  with  this\nContract  shall be  submitted  exclusively  to  arbitration  as provided in this\nSection  15. Any  settlement  and award  rendered  through  such an  arbitration\nproceeding  shall be final and binding  upon the  parties if the  decision is in\nwriting and contains a reasoned analysis explaining the arbitrators' reasons for\nrendering the award.  The parties agree that the arbitral  award may be enforced\nagainst  the  parties  or their  assets  wherever  they may be found  and that a\njudgment upon the arbitral award may be entered in any court having jurisdiction\nthereof.  Accordingly,  the parties irrevocably agree that any action to enforce\nsuch  judgment  may be  instituted  wherever  appropriate  and each party hereby\nirrevocably  waives, to the fullest extent permitted by law, any objection which\nit may have now or hereafter to the laying of the venue or the  jurisdiction  or\nthe  convenience  of the  forum  of any  such  action  and  irrevocably  submits\ngenerally and  unconditionally to the jurisdiction of any such court in any such\naction.\n\n15.2 Language. The arbitration shall be conducted in English and Chinese and the\narbitration shall refer to the English and Chinese texts of this Contract.\n\n15.3  Arbitrators.  There shall be three  arbitrators.  The  parties  shall each\nselect one  arbitrator  within 30 days after giving or receiving  the demand for\narbitration.  The two arbitrators selected by the parties shall select the third\narbitrator.  If a party does not  appoint an  arbitrator  who has  consented  to\nparticipate  within 30 days after the  selection  of the first  arbitrator,  the\nrelevant  appointment  shall be made by the  arbitrating  body. The costs of the\narbitration  shall be borne by the  parties  as  determined  by the  arbitration\ntribunal,  taking  into  account the  relative  merits of the  positions  of the\nparties.\n\n                                       14\n\n\n15.4 Submission to  Jurisdiction;  Defenses.  Each party is subject to civil and\ncommercial law and irrevocably  agrees that this Contract is a commercial rather\nthan a public or  governmental  activity and neither  party is entitled to claim\nimmunity from legal  proceedings  with respect to itself or any of its assets on\nthe grounds of  sovereignty  or otherwise  under any law or in any  jurisdiction\nwhere an action may be brought  for the  enforcement  of any of the  obligations\narising under or relating to this Contract. To the extent that a party or any of\nits assets has or hereafter  may acquire any right to immunity from any set-off,\nlegal  proceedings,  attachment  or  execution  of  judgment  on the  grounds of\nsovereignty  or otherwise,  each party hereby  irrevocably  waives such right to\nimmunity  in  respect  of its  obligations  arising  under or  relating  to this\nContract.\n\n15.5  Continued  Performance.  The  parties  hereby  agree  to carry  out  their\nrespective  obligations under this Contract,  including  without  limitation all\npayment obligations, notwithstanding any pending dispute or controversy.\n\n\n                                   SECTION 16\n\n                  REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS\n\n16.1 Seller represents and warrants as follows:\n\n     (A) it is a  Sino-foreign  cooperative  joint  venture duly  organized  and\nexisting under the laws of the People's Republic of China;\n\n     (B) it has full legal right,  power and  authority to execute,  deliver and\nperform  this  Contract  and the  contracts  and  documents  referred to in this\nContract to which it is a party;\n\n     (C) it has taken all  appropriate  and  necessary  action to authorize  the\nexecution,  delivery and  performance  of this  Contract and the  contracts  and\ndocuments referred to in this Contract to which it is a party; and\n\n     (D) it has obtained all consents,  approvals and  authorizations  necessary\nfor the valid  execution,  delivery  and  performance  of this  Contract and the\ncontracts  and  documents  referred to in this  Contract to which it is a party,\nprovided,  however,  that Appendix A to this Contract is subject to the approval\nof the relevant  price  approval  authorities  before this Contract shall become\neffective.\n\n16.2 Purchaser represents and warrants as follows:\n\n     (A) it is a Chinese  enterprise  duly organized and existing under the laws\nof the People's Republic of China;\n\n     (B) it has full legal right,  power and  authority to execute,  deliver and\nperform  this  Contract  and the  contracts  and  documents  referred to in this\nContract to which it is a party;\n\n                                       15\n\n\n     (C) it has taken all  appropriate  and  necessary  action to authorize  the\nexecution,  delivery and  performance  of this  Contract and the  contracts  and\ndocuments referred to in this Contract to which it is a party; and\n\n     (D) it has obtained all consents,  approvals and  authorizations  necessary\nfor the valid  execution,  delivery  and  performance  of this  Contract and the\ncontracts  and  documents  referred to in this  Contract to which it is a party,\nprovided,  however,  that Appendix A to this Contract is subject to the approval\nof the relevant  price  approval  authorities  before this Contract shall become\neffective.\n\n16.3 If from time to time a financial  institution  which is proposing to extend\nloan facilities or credit support to Seller reasonably requests any financial or\nother information, Purchaser will promptly provide such information.\n\n                                   SECTION 17\n\n                              LIABILITY OF PARTIES\n\n17.1 Seller shall indemnify Purchaser and its officers,  principals,  directors,\nagents and employees  from and against all direct  damages to the extent arising\nfrom third party  claims and losses for damage to property or injury to or death\nof persons  arising  from the  negligence,  bad faith or willful  misconduct  of\nSeller or its officers, principals, directors, agents or employees in connection\nwith the  performance of Seller's  duties under this Contract or Seller's breach\nof this Contract.  Such indemnity  shall not apply to the extent that any claims\nor losses  are caused by or arise out of any  intentional  or  negligent  act or\nomission,  bad  faith  or  willful  misconduct  by  Purchaser  or its  officers,\nprincipals, directors, employees or agents.\n\n17.2 Purchaser shall indemnify Seller and its principals,  officers,  directors,\nemployees and agents from and against all direct  damages to the extent  arising\nfrom third party  claims and losses for damage to property or injury to or death\nof persons  arising  from the  negligence,  bad faith or willful  misconduct  of\nPurchaser  or its  officers,  principals,  directors,  employees  or  agents  in\nconnection  with the  performance of  Purchaser's  duties under this Contract or\nPurchaser's  breach  of this  Contract.  Such  indemnity  shall not apply to the\nextent  that any claims or losses are caused by or arise out of any  intentional\nor negligent act or omission,  bad faith or willful  misconduct by Seller or its\nprincipals, officers, directors, employees or agents.\n\n17.3 Neither party nor its officers, principals,  directors, employees or agents\nshall be liable  to the  other  party or its  officers,  principals,  directors,\nemployees or agents for claims for incidental, consequential or indirect damages\nto  persons  or  property,  whether  arising  in tort,  contract  or  otherwise,\nconnected  with or resulting  from  performance  or  non-performance  under this\nContract.\n\n                                       16\n\n\n                                   SECTION 18\n\n                                   ASSIGNMENT\n\n          Assignments by either party of this Contract shall require the consent\nof the other party,  provided,  however,  such consent shall not be unreasonably\nwithheld.\n\n\n                                   SECTION 19\n\n                              AMENDMENT OF CONTRACT\n\n          This  Contract  may be amended or modified  only by an  instrument  in\nwriting signed by both parties.\n\n\n                                   SECTION 20\n\n                                    LANGUAGE\n\n          This  Contract will be executed in four  counterparts  in both Chinese\nand English versions. Each version shall be of equal force and effect.\n\n                                   SECTION 21\n\n                                     NOTICES\n\n          Any notice  required or  permitted to be given  hereunder  shall be in\nwriting  and shall be (i)  personally  delivered,  (ii)  transmitted  by postage\nprepaid  registered  mail  (airmail  if  international),  (iii)  transmitted  by\ninternationally  recognized courier service, or (iv) transmitted by facsimile to\nthe parties as follows, as elected by the party giving such notice:\n\n\n                  (A)      In the case of Purchaser, to:\n\n                           Henan Electric Power Corporation\n                           No. 11 South Songshan Road\n                           Zhengzhou, Henan, China 450052\n\n                           Attention:  Xu Xing Long\n                           Facsimile No.:  86-371-790-5034\n                           Telephone No.: 86-371-790-5015\n\n                                       17\n\n\n                  (B)      In the case of Seller, to:\n\n                           Jiaozuo Wan Fang Power Company Limited\n                           Dai Wang Zheng\n                           Jiaozuo City, Henan, China\n\n                           Attention:       Edward C. Hall III\n                           Facsimile No.:   N\/A\n                           Telephone No.:   N\/A\n\n                           and\n\n                           AES China Generating Co., Ltd.\n                           9\/F, Allied Capital Resources Building\n                           32-38 Ice House Street\n                           Central, Hong Kong\n\n                           Attention:       Paul Hanrahan\n                           Facsimile No.:     852-2530-1673\n                           Telephone No.:   852-2842-5111\n\nExcept as otherwise specified herein, all notices and other communications shall\nbe  deemed  to have  been duly  given on (i) the date of  receipt  if  delivered\npersonally,  (ii) 7 days after the date of posting if transmitted by mail, (iii)\n3 days after delivery to the courier if transmitted by courier, or (iv) the date\nof  transmission  with  confirmed  answer  back  if  transmitted  by  facsimile,\nwhichever  shall first  occur.  Any party may change its  address  for  purposes\nhereof by notice to the other party.  All notices  hereunder shall be in English\nand Chinese.\n\n\n                                   SECTION 22\n\n                                 APPLICABLE LAW\n\n          This Contract  shall be governed by and  construed in accordance  with\nthe laws of the People's Republic of China.\n\n\n                                   SECTION 23\n\n                                  SEVERABILITY\n\n          The  invalidity  of any provision or portion of this Contract will not\naffect the validity of the remainder of this Contract.\n\n\n                                       18\n\n\n                                   SECTION 24\n\n                                ENTIRE AGREEMENT\n\n          This Contract contains the complete agreement between the parties with\nrespect to the matters  contained  herein and supersedes  all other  agreements,\nwhether written or oral, with respect to the matters contained herein.\n\n\n                                   SECTION 25\n\n                          NO THIRD PARTY BENEFICIARIES\n\n          Except as otherwise expressly stated herein, this Contract is intended\nto be solely for the  benefit  of  Purchaser  and  Seller  and their  respective\nsuccessors and permitted assigns and is not intended to and shall not confer any\nrights or benefits on any third party not a signatory hereto.\n\n\n          IN WITNESS WHEREOF,  the parties,  intending to be legally bound, have\ncaused this Contract to be executed by their duly authorized  representatives as\nof the day and year written above.\n\n\n                                             HENAN  ELECTRIC  POWER  CORPORATION\n\n\n                                             By: \/s\/ [SIGNATURE ILLEGIBLE]\n                                                ------------------------------- \n                                             Name:\n                                             Title:\n\n\n                                             JIAOZUO  WAN  FANG  POWER COMPANY \n                                             LIMITED\n\n                                             By: \/s\/ Edward C. Hall, III\n                                                ------------------------------- \n                                             Name: \n                                             Title:\n\n\n                                       19\n\n\n                                   APPENDIX A\n\n\n\n     Unless otherwise defined herein, capitalized terms (in the English version\nhereof) and underlined terms (in the Chinese version hereof) used but not\ndefined in this Appendix A shall have the same meanings set forth in the Power\nPurchase and Sale Contract to which this Appendix A is attached.\n\n     Energy Payment ('SP') shall be expressed in RMB per kilowatt hour. For each\nBase Output Period, as herein defined, the Energy Payment shall be calculated\nannually on the date which is 60 days prior to the end of each Calendar Year and\nshall be in accordance with the following formula:\n\n         SP = (PC + FC + EC + QC + TC) x [1 + VAT Rate x (1 + OT Rate)]\n\n     (1) 'PC' is the Unit Production Charge which shall be expressed in RMB per\nkilowatt hour and shall be caluclated pursuant to the following formula:\n\nPC = RMB Operation and Maintenance Costs + ($ Operation and Maintenance Costs x\nConversion Factor)\n- --------------------------------------------------------------------------------\n                                  Base Output\n\n\n               +    Annual Depreciation Amount + Fuel Expenses\n                   --------------------------------------------\n                                    Base Output\n \nWhere:\n\nThe Unit Production Charge does not include VAT credit.\n\n'Operation and Maintenance Costs' shall be, for each period referred to in the\ndefinition of Base Output below (each such period, a 'Base Output Period'), all\nRMB and Dollar operation and maintenance costs of the Project for such period\nand shall include, without limitation, all costs of salaries, wages and benefits\nfor the Chinese and foreign employees (including trade union contributions and\nrelevant allocations not covered in After Tax Enterprise Profit Retention),\nmanagement (including the management of Seller), maintenance, water, ash\ndisposal, materials, dispatch service fee, environmental compliance, insurance\npremiums, land use, administration, ratable funding for major maintenance\noverhauls, interest on working capital, costs associated with the exchange of\nRMB for Dollars, and amortization of deferred expenses*. All costs will include\nestimates of price escalation for the applicable period.\n\n     Operation and Maintenance Costs will be separated into costs budgeted to be\nactually incurred and payable in RMB (RMB Operation and Maintenance Costs) and\nin Dollars ($ Operation and Maintenance Costs) to be used in the formula for the\nUnit Production Charge.\n\n\n                                      1\n\n[*** Filed separately with the Commission pursuant to a request for\nconfidential treatment.]\n\n\n- ----------\n*    Deferred expenses will include costs to establish Seller, etc.\n\n\n'Fuel Expenses' shall be, for each Base Output Period,  budgeted amounts for all\nfuel costs,  including  all costs of fuel supply,  transportation,  exchange and\nstorage,  necessary for the Facility to produce the Base Output.  All costs will\ninclude estimates of price escalation for the applicable period. The budgets for\nFuel  Expenses  will  include  assumptions  of the coal price per ton, the plant\naverage  consumption  rate (in  grams\/kWh),  coal  quality and heat  content and\nassumptions  of the oil price per ton,  oil  quality  and heat  content  and the\nannual oil consumption  determined by the number of annual unit starts and other\noperations requiring oil.\n\n         'Annual Depreciation Amount' =\n         ------------------------------\n\n              (Fixed Asset Total Book Value)  x  Classified Depreciation Rate;\n\nWhere:\n\n'Fixed Asset Total Book Value' equals the total project cost to complete the\nProject including all compensation made in accordance with the construction\ncontracts, construction management costs, any taxes or fees imposed on the\nProject, working capital, debt service reserves and all development fees\nunanimously agreed to by the investors in Seller. Also included in the total\nProject cost which is required for the completion of Project construction will\nbe the interest accrued on all debt during construction and other relevant\nexpenses.\n\n'Classified  Depreciation  Rate'  shall mean the  depreciation  rate  determined\naccording to the classified service life provided in the relevant document.\n\n'Base  Output'  shall mean (i) for the period  beginning on the Unit One Testing\nDate and ending on the date immediately preceding the Unit Two Testing Date, the\nkilowatt-hour  amount  equal to the  product of the Rated  Capacity of the first\nunit of the Facility  multiplied by [***] % multiplied by the number of hours in\nthis period; (ii) for the period beginning on the Unit Two Testing Date (if such\ndate is not the first day of a calendar  year) and ending on the last day of the\ncalendar  year in which the Unit Two  Testing  Date  occurs,  the  kilowatt-hour\namount  equal to the  product  of the  Rated  Capacity  of the two  units of the\nFacility multiplied by [***] % multiplied by the number of hours in this period;\nand (iii) for each calendar year thereafter,  the kilowatt-hour  amount equal to\nthe product of the Rated Capacity of the two units of the Facility multiplied by\n[***] hours,  except that for the calendar year during which the expiration date\nof the Power Purchase and Sale Contract  occurs (if such  expiration date is not\nthe last day of such calendar year), the Base Output shall be the  kilowatt-hour\namount  equal to the  product  of the  Rated  Capacity  of the two  units of the\nFacility  multiplied  by  [***] %  multiplied  by the  number  of  hours in such\ncalendar year prior to the expiration date.\n\n'Conversion Factor' shall equal\n                                      2\n\n\n[*** Filed separately with the Commission pursuant to a request for confidential\ntreatment.]\n\n                                        (Average  Conversion  Rate(t) - \n                                         Average  Conversion Rate(m - 1)\nAverage Conversion Rate(m) x [1 +  (-------------------------------------------]\n                                           Average Conversion Rate(m - 1)\n\nwhere:\n\n  (m)     shall mean the 30 day period immediately preceding the date of\n          calculation\n\n  (t)     shall mean the 12 month period immediately prior to the date of\n          calculation\n\n  (m - 1) shall mean the 30 day period immediately preceding the 12 month period\n          prior to the date of calculation\n\n'Average Conversion Rate' shall equal the average of the Conversion Rate for\neach day over the applicable period.\n\n'Conversion Rate' shall mean the closing selling exchange rate of Renminbi for\nDollars published by the People's Bank of China (or any successor entity\npublishing such rate).\n\nAt such time as the Renminbi is freely  convertible and an international  market\nbased forward rate is  available,  the  Conversion  Factor shall be set equal to\nsuch quoted  forward  exchange  rate of Renminbi for Dollars which is six months\nfrom the beginning of each Base Output Period.\n\n         (2) 'FC' is the Unit Profit Charge Before Tax which shall be expressed\nin RMB per kilowatt hour and shall be calculated pursuant to the following\nformula:\n\n                      FC =       Unit Profit\n                               --------------\n                             1 - Income Tax Rate\n\n\nUnit Profit = (Foreign Party's Annual Profit          Chinese Party's\n               x Conversion  Factor)                   Annual Profit\n              -------------------------------  +  -----------------------  +\n                       Base  Output                     Base Output   \n                                                 \n\n(Annual $ Debt Service  Payment x  Conversion  Factor) + Annual RMB Debt \n Service Payment\n- -------------------------------------------------------------------------  +\n                                   Base Output\n\n\nAnnual  Depreciation  Loan  Repayment     After Tax Enterprise Profit Retention\n- -------------------------------------  +  ------------------------------------- \n            Base  Output                              Base Output         \n                                          \n\n\nWhere:\n\n'Annual  Profit'  shall be the annual  amounts  listed on Exhibit A-1 which have\nbeen calculated to yield a projected  [***] % financial  internal rate of return\non registered capital over the joint venture term of Seller.\n\n'Registered  Capital  Contribution'  shall  be  equal  to the  total  registered\ncapital, denominated in RMB, provided by Seller's joint venture partners through\nthe Unit Two Commercial Operation Date.\n\n\n                                      3\n\n\n'Annual $ Debt Service  Payment'  shall be an annual Dollar payment in an amount\nequal  to  the  annual  amount  required  to pay  all  principal  on the  Dollar\ndenominated debt financing for the Project.\n\n'Annual RMB Debt Service Payment' shall be an annual RMB payment in an amount\nequal to the annual amount required to pay all principal on the RMB denominated\ndebt financing for the Project.\n\n'After Tax Enterprise Profit Retention' shall be all amounts required pursuant\nto law to be set aside by Seller from the after-tax profits of the Project\ndeposited in the Reserve Fund, Enterprise Development Fund and the Bonus and\nWelfare Fund for Staff and Workers,  and any other similar funds  required to be\nset up and  funded  by any other  government  entity  in the  future.  After Tax\nEnterprise  Profit Retention for each annual period shall be determined for each\nBase Output Period based on the amount of after-tax  profits estimated by Seller\nfor each such year.\n\n'Income Tax Rate' shall be the actual  percentage  tax rate that will be applied\nto Seller in the Base Output Period.\n\n'Annual  Depreciation  Loan  Repayment'  shall equal that  portion of the annual\ndepreciation fund which is used to pay the principal of the debt.\n\n     (3) 'OT Rate' is the  Other Tax Rate  which  shall be the rate  payable  in\nrespect  of any  taxes  that  Seller  is  obligated  to pay  other  than  VAT on\nproduction  sales.  Details  of this  component  would be  established  upon the\nintroduction of those new taxes. **\n\n* Purchaser  recognizes that the intent of this provision is to cause the Energy\nPayment to Seller to be adjusted so that the net amount  received  after payment\nof all taxes and fees other than VAT equals the net amount  that would have been\nreceived had the taxes and fees not been imposed.\n\n     (4) 'VAT Rate' shall be the actual VAT rate  applicable  to Seller's  sales\nrevenues at Base Output.\n\n     (5) 'EC' is the Unit  Financial  Charge which shall be expressed in RMB per\nkilowatt hour and shall be calculated pursuant to the following formula:\n\n                       EC =   Financial Expenses\n                              ------------------\n                                  Base Output\n\n'Financial Expenses' shall mean, during the operation period of the Project, the\ninterest of the loan for the construction of, and expenses incurred in financing\nthe operations of the Project,  projected on an annual basis. Financial Expenses\nrelated to the Dollar debt shall include interest,  related fees and withholding\ntaxes\n\n\n                                      4\n\n[***  Filed   separately  with  the  Commission   pursuant  to  a  request  for\nconfidential treatment.]\n\n\n(grossed up for taxes payable by Seller)  imposed  pursuant to relevant  Chinese\nregulations on the Dollar  denominated debt financing for the Project multiplied\nby Conversion Factor, that is:\n\n\n     Financial Expenses related to the $ Debt Financing x Conversion Factor\n\nRMB  Financial   Expenses  shall  include  interest  and  related  fees  on  RMB\ndenominated debt financing for the Project.\n\n     (6) 'QC' is the Unit Net Non-Business Expenditures which shall be expressed\nin RMB per  kilowatt  hour and shall be  calculated  pursuant  to the  following\nformula:\n\n        QC = Non-Business Expenditures - Non-Business Income\n             -----------------------------------------------\n                              Base Output\n\n'Non-Business  Expenditures'  and  'Non-Business  Income'  mean  the  amount  of\nexpenditures and income,  respectively,  of Seller which have no direct relation\nto the operation of the Project.\n\n     (7) The Unit True-Up  Charge  ('TC') shall be expressed in RMB per kilowatt\nhour and shall be calculated pursuant to the following formula:\n\nTC =    Cost Recovery Balance at the Time of Price Calculation X \n         (1 + True-up Charge Interest Rate\/2)\n        --------------------------------------------------------\n                               Base Output\n\nWhere:\n\n'Cost  Recovery  Balance' for any given month,  shall be equal to Cost  Recovery\nBalance for the previous month x (1 + True-up Charge Interest Rate\/12)\n\n+ Cost Recovery for the month\n\n- - Cost Recovery  Balance that has been absorbed in the Energy Payment,  pursuant\nto a power price adjustment provided in this section.\n\n'True-up Charge Interest Rate' shall equal [***] % per annum.\n\n'Cost Recovery'  shall equal the difference  between the total sum of the actual\ncosts and the total sum of the budgeted costs of all of the components contained\nin this  price  formula,  which  reflects  economic  changes  in the  underlying\nassumptions  contained in the price formula.  Factors which affect components in\nthis price  formula  include,  but are not  limited  to: (i) fuel price  changes\naffecting Fuel Expenses; (ii) raw material price changes affecting Operation and\nMaintenance Costs; (iii) changes in the Conversion Rate affecting the Conversion\nFactor;  (iv) changes to the type or rate of taxes affecting the Other Tax Rate,\nIncome  Tax Rate or VAT Rate,  (v)  changes  in various  funds  which  Seller is\n   \n                                        5\n\nrequired to maintain  affecting  After Tax  Enterprise  Profit  Retention;  (vi)\npolicy-related changes in expenditures (including a Change in Law) affecting any\nof the price  formula  components;  and (vii) any  other  costs not  within  the\ncontrol of Seller (except for increased costs due solely to operations in excess\nof the Base Output).\n\nReferences in this Appendix A to annual  periods shall be deemed to refer to the\nactual length of the relevant Base Output Period.\n\n\n\n\n\n\n\n                                        6\n\n[***  Filed   separately  with  the  Commission   pursuant  to  a  request  for\nconfidential treatment.]\n\n\n\n                                   APPENDIX A1\n                                     PROFIT\n\n\nChinese Party Registered Capital                     132,911 (000 RMB)\n\nForeign Party Registered Capital                     37,364 (000 USD)\n\nRegistered Capital Contribution Date                 1-Jun-96\n\nCommercial Operation Date                            1-Jun-96\n\nReturn on Investment During  Construction = \n\n          Registered Capital Contributed X ([***] ^L)\n\n\nWhere: L equals the number of years of construction\n\nAnnual Profit = (Registered Capital contributed + Return on Investment During\nConstruction) x IRR Factor\n\nWhere:\n\nIRR FACTOR =       20          1\n                   E     --------------\n                   n=1   1\/(1 - [***])n\n\n\n- --------------------------------------------------------------------------------\n\n     Foreign Party Annual Profit                 Chinese Party Annual Profit\n  Year                 Amount (000 USD)       Year              Amount (000 RMB)\n\n\n\n [***]                      [***]             [***]                  [***]\n\n\n\n\nThe above  numbers  shall be adjusted to reflect the actual amount of Registered\nCapital Contributed,  the actual date of Registered Capital Contribution and the\nactual Commercial Operation Date.\n\n\n                                   APPENDIX B\n\n                            POINT OF INTERCONNECTION\n\n     The  Point of  Interconnection  shall be at the last transmission line\ntower located outside the fence of the Seller's 220 kV switchyard.\n\n\n\n                                   APPENDIX C\n\n                                TECHNICAL LIMITS\n\n1.   Electrical System Characteristics\n\n     (a)  Voltage:            220 kV (equipment should be suitable for grid\n                              voltage variations from 213 kV - 252 kV)\n\n     (b)  Power Factor:       Power factor operating range at the 220 kV Point\n                              of Interconnection is 0.85 (lag) to 1.0 power\n                              factor\n\n     (c)  Grid Frequency:     50 Hertz + 1.0 Hertz to - 2.0 Hertz\n\n\n2.   Individual Generating Unit Characteristics.  The values contained in this\n     Appendix C are based on acheiving an installed capacity of 115 MW net per\n     Unit. (Parasitic load has beed deducted)\n\n     (a)  Capacity of Generating Equipment.\n\n          (i)       147 MVA generating capacity\n\n          (ii)      125 MW continuous capacity\n\n          (iii)     Generator step-up transformers are rated 150 MVA.\n\n     (b)  Minimum Stable Load.  The Parties agree not to dispatch the Facility\n          below 72% load.  If the performance test demonstrates that the unit \n          cannot maintain a stable operation at 72% dispatch without the use of\n          oil, the Parties will explore whether technological modifications to \n          the boiler are possible.  If such modification is technically \n          certified that it will not cause damage to the operation of the \n          boiler, Seller shall make the technological modification to the \n          Facility, provided, however, if the costs of such modification exceeds\n          0.1% of the total investment, the Parties agree to settle the problem\n          through mutual negotiations in the spirit of equality and mutual\n          respect.\n\n     (c)  Start-up Times.  Start-up times are from boiler light-off to full\n          load, and do not include time for mobilization and purging, for which\n          fifteen (15) minutes minimum is required.  Start-up times are minimum.\n\n\n\n\n\n                                       1\n\n\n          Normal Operation\n\n          Coal Start from Ambient       10 hours\n          Warm Start after 40 hours      7 hours\n          shutdown\n          Hot Start after 10 hours       4 hours\n          shutdown\n\n\n     (d)  Maximum Loadong and Deloading Rates.\n\n          Mode      Load      Ramp Rate\n                    (MW)      (MW\/min.)\n          ----      ----      ---------\n\n          Cold     0 - 20       0.17\n          Cold    20 - 125      0.39\n\n\n\n\n\n\n\n\n\n                                       2\n\n                                   APPENDIX D\n\n                            CAPACITY TEST PROCEDURES\n\n\n1.   Guidelines\n     ----------\n\n     After a unit is  sufficiently  complete  so that such unit and all  systems\n     associated with it are capable of safe operation in accordance with Prudent\n     Electrical  Practices,  Seller shall  conduct a capacity  test as described\n     below.  Seller  shall give  Purchaser  and the  engineer at least five days\n     prior written  notice of the date on which a capacity  test will  commence.\n     Purchaser  may for  reasonable  cause defer a capacity  test for up to five\n     days fom the date requested by Seller.  Seller,  Purchaser and the engineer\n     shall  each   designate  and  make   available   qualified  and  authorized\n     representatives to observe a capacity test as described in this Appendix D,\n     and to  monitor  the  taking  of  measurements  to  determine  the level of\n     achievement. Testing and measuring procedures used in a capacity test shall\n     be in accordance with Chinese standards and codes. A capacity test may, but\n     is not required to be, run  concurrently  with the performance  tests under\n     the construction contracts.\n\n\n2.   Capacity Test.\n     --------------\n\n     A capacity  test shall  establish  the Rated  Capacity for a Unit and shall\n     consist of  continuous,  full load  operation for  twenty-four  hours.  The\n     result of any capacity test shall be the net electrical  capacity  averaged\n     over the duration of the capacity test, expressed in MW and measured at the\n     Point of Interconnection. Upon the conclusion of the initial capacity test,\n     Seller may elect to either (a) within  five days submit the results of such\n     capacity  test to Purchaser,  witha copy to the engineer,  or (b) deliver a\n     notice to Purchaser with a copy to the engineer stating Seller's  intention\n     to perform a second  capacity  test no  earlier  than two days and no later\n     than seven days after the  Purchaser's  receipt of such  notice.  If Seller\n     electes to perform such second  capacity  test,  Seller shall,  within five\n     days  after the  conclusion  of such  capacity  test  submit  to  Purchaser\n     ('Sellers  Notice') with a copy to the engineer,  the results of either the\n     initial capacity test or the second capacity test, as Seller may elect.\n\n\n3.   Notice of Results.\n     ------------------\n\n     If Purchaser concurs with the information in Seller's Notice,  the engineer\n     shall,  within five days of receipt of  Seller's  Notice,  provide  written\n     notice to Seller and  Purchaser  certifying  the  results  of the test.  If\n     Purchaser  disputes any or all of the results contained in Seller's notice,\n     representatives  of Seller,  Purchaser,  and the  engineer  shall meet at a\n     mutually  acceptable  location to review and discuss  the  dispute.  Within\n     fourteen days of receipt of Seller's Notice, the engineer shall decide what\n     the disputed levels of capacity were.\n\n\n                                       1\n\n\n     Such  decision  shall be certified in a notice to Seller and  Purchaser and\n     shall be binding.\n\n\n\n4.   Achievement of Testing Date.\n     ----------------------------\n\n     The testing  date of a unit shall be deemed to have  occured as of the date\n     such unit has completed a capacity test, as certified by the engineer.\n\n\n\n5.   Disposition of Output.\n     ----------------------\n\n     At all times during start-up, preliminary testing, capacity tests, or other\n     operations of a unit in  furtherance  of achieving the Testing Date of such\n     unit, Purchaser shall, at no expense to Seller, arrange for the disposition\n     of each unit's output of electricity.\n\n\n\n\n\n\n\n\n\n\n\n                                       2\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6585],"corporate_contracts_industries":[9534],"corporate_contracts_types":[9613,9619],"class_list":["post-42677","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-aes-china-generating-co-ltd","corporate_contracts_industries-utilities__electric","corporate_contracts_types-operations","corporate_contracts_types-operations__sales"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42677","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42677"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42677"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42677"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42677"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}