NOBLE ENERGY MEDITERRANEAN LTD.
Except where the context otherwise indicates or requires the following terms in this Agreement shall have the following meanings:
In this Agreement, Article headings and the index are inserted for convenience only and do not affect the interpretation of this Agreement; and unless the context indicates a contrary intention:
If the Anti-trust Consent is not obtained before the Approval Date, or such condition is not waived by both Parties:
If the Governmental Approval is not obtained before the Approval Date, or such condition precedent is not waived by the Buyer:
If the PUA Approval is not obtained before the Approval Date, or such condition precedent is not waived by the Buyer:
Subject to the terms of this Agreement, the Sellers agree to deliver and sell and the Buyer agrees to take and pay for or, if not taken, pay for Gas, in such quantities, at such times and in such manner as shall from time to time be provided for under this Agreement.
For the Price Periods commencing on January 1, 2012 and ending on December 31, 2019 (i.e.: The Price Periods for the Calendar Years 2012 through 2019):
For the Price Periods from January 1, 2020 (i.e.: The Price Periods for the Calendar Years 2020 until the end of the Contract Period):
For example: if with respect to the Month the rebasing became effective the CPI is equal to 190 and the new value of the CPI for such Month calculated in accordance with the base in effect from the rebasing is equal to 100, then the conversion factor will be equal to 1.9 (190/100) and each new CPI published under the new base will be multiplied by a factor equal to 1.9.
and until the Contract Price can be calculated and subject to retrospective adjustment as hereinafter provided, the Provisional Contract Price for such Price Period shall be deemed to be the Contract Price for such Price Period for all purposes of this Agreement.
| | 11.4.2 | In the event any Seller requests that any payments to be made by the Buyer to such Seller hereunder be made in Israeli currency it shall submit its invoice in Israeli currency calculated in accordance with the Representative Rate known at the date of the invoice and Buyer shall comply with such request and make such payment in Israeli currency. |
| | 11.4.3 | If the due date as specified above is not a banking day (i.e. a day on which banks are open for business) at the place of payment or place of receipt, then the due date shall be deferred to the next banking day. |
| | 11.4.4 | Subject to the timely provision to the paying Party (which for the purposes of this Article will include the Buyer or each of the Sellers, as applicable) of appropriate withholding tax exemptions approvals, all payments made under this Agreement shall be made without withholding or deduction for, or on account of any taxes, duties, assessments or governmental charges of any nature imposed or levied by or on behalf of any authority having power to tax, unless such withholding or deduction is required by law. |
| | 11.4.5 | In the event that any payments due to be paid by a Party hereunder are subject to Value Added Tax under Israeli Law, such Value Added Tax will be paid by such Party to the other Party at the prevailing legal rate, against procurement of a tax invoice (heshbonit mas) as required by Israeli law, by no later than one (1) Business Day prior to the date on which such Value Added Tax must be paid to the taxation authorities under the applicable law. |
| | 11.5.1 | Should either the Buyer or any of the Sellers fail to make payment to the other of any sum due hereunder, interest thereon shall accrue at the rate per annum equal to LIBOR (**) (compounded annually) from the date when such payment is due hereunder until the same is made. |
| | 11.5.2 | In the event of failure to pay any sum due pursuant to this Agreement which is not the subject of a dispute under Article 11.6.1 for seven (7) days from the applicable due date, then the Party to whom the same is due and owing may on fourteen (14) days prior notice to the other Party of the intention so to do, suspend delivery or receipt, as the case may be, of Specification Gas hereunder, and if such failure to pay continues for one hundred and twenty (120) days from the applicable due date, the Party to whom the same is due and owing may also, on fourteen (14) days prior notice to the other Party, terminate this Agreement, but the exercise of such right shall not constitute a waiver of, nor in any way prejudice, other remedies available to such Party. |
| | 11.6.1 | In the event that the Buyer disputes any matter or sum set out in any Monthly Statement or any Annual Reconciliation Statement or the Sellers dispute any matter or sum set out in any Annual Reconciliation Statement prepared by the Buyer in accordance with Article 11.2.3, the Party disputing such matter or sum shall no later than three (3) Business Days before the due date for payment give notice to the other Party of the nature and extent of such dispute and of its election pursuant to Article 11.6.2 and the disputing Party shall (**). |
| | 11.6.2 | The disputing Party shall be entitled (**). |
| | 11.6.3 | Within fourteen (14) days after such payment due date, the Parties shall meet to seek to resolve such dispute, but if within thirty (30) days after such payment due date the Parties have not resolved such dispute, then either Party may refer such dispute to Arbitration in accordance with Article 19. |
| | 11.6.4 | Within seven (7) Business Days after such dispute is agreed or determined, the corresponding payment or repayment (as the case may be) due from one Party to the other shall be made together with interest at the rate set out in Article 11.5 from the applicable due date to the date of such payment or repayment. |
The Parties shall each have the right, upon reasonable notice and at reasonable hours, to examine the books, records and charts of the other Party relevant to this Agreement to the extent necessary to verify the accuracy of any accounting statement, charge, calculation, determination or claim made pursuant to any of the provisions of this Agreement subject to the following:
| | 11.7.1 | Such books, records and charts need not be preserved longer than a period of twenty-four (24) Months after the end of the Contract Year to which such books records or charts refer unless they relate to an outstanding bona fide dispute. |
| | 11.7.2 | If any such verification involves the examination of confidential documents not solely relating to the sale of Specification Gas hereunder, the requesting Party shall have the right to require the auditors of the other Party to provide a certified extract of the documents excluding such non-relating matters and the costs of preparing such extract shall be borne by the requesting Party unless it is established that there was an error in any such accounting statement, charge, computation or claim in which event the cost thereof shall be borne by the other Party. |
| | 11.7.3 | If any such examination reveals any inaccuracy in any invoice or financial statement theretofore rendered, the Party to whom the resulting payment or repayment is due shall within seven (7) Business Days after the date that such inaccuracy is discovered but not later than two (2) years after the date of the relevant statement or invoice, submit to the other Party a statement showing all necessary adjustments to the former bill or financial statement. Within fourteen (14) Business Days after the amount due is established (by agreement or determination by Arbitration in accordance with Article 19) the Party from whom payment is due shall make payment or repayment (in accordance, mutatis mutandis, with the provisions of Articles 11.4 and 11.5 above) of the sum so due. |
| | 11.7.4 | Such right to examine must be exercised within twenty-four (24) Months after the end of the Contract Year to which the books, records or charts being examined refer. |
ARTICLE 12
Quality
| | 12.1.1 | Natural Gas tendered for delivery under this Agreement shall at the Delivery Point be in accordance with the specification set out in part 1 of Schedule 5 ("Specification"). |
| | 12.1.2 | If Natural Gas tendered for delivery hereunder forms part of a commingled stream, which at the Delivery Point fails to conform to the Specification, then whatever may be the reason for such failure, the Natural Gas tendered for delivery hereunder shall be deemed not to conform to the Specification. |
| | 12.2.1 | If at any time the Natural Gas tendered for delivery at the Delivery Point is Off-Spec Gas, any Party that becomes aware that such Natural Gas is Off-Spec Gas shall promptly notify the Transporter and the other Party in accordance with Article 12.3. The Buyer shall have the right to accept or reject such Off-Spec Gas subject to the following provisions of this Article 12.2. |
| | 12.2.2 | Upon becoming aware that the Natural Gas tendered for delivery at the Delivery Point is Off-Spec Gas, the Sellers shall promptly use reasonable endeavors to remedy such failure so as to make available Specification Gas. |
| | 12.2.3 | The Buyer may refuse to take all or any part of the Off-Spec Gas until the deficiency has been remedied, but any such refusal shall not constitute a waiver of nor affect any other rights or remedies of the Buyer in respect of such failure on the part of the Sellers to deliver Specification Gas. |
| | 12.2.4 | If the Buyer knowingly takes Off-Spec Gas (i.e. after having being notified by the Sellers or the Transporter that it is Off-Spec Gas) (**): |
provided however, that the Sellers’ total liability with regard to any and all costs and expenses with respect to the circumstances set out in Article 12.2.4, shall be limited to (**).
| | (a) | takes Off-Spec Gas not being aware that it is Off-Spec Gas; or |
then, (**).
The Sellers shall notify the Buyer as soon as reasonably practicable after becoming aware of any failure or anticipated failure in the quality of the Natural Gas giving details of the cause of the failure (including the type and degree of such non-conformance) and an estimate of the probable duration of the failure.
| | 12.4.1 | Any difference between the Parties, which may arise in respect of the quality of the Natural Gas, shall (at the request of either Party) be referred to the Expert for determination in accordance with Article 19.3. |
| | 12.4.2 | Any difference between the Parties, which may arise in respect of any liabilities, costs, claims and expenses incurred under Article 12.2, shall (at the request of either Party) be referred for determination in accordance with Article 19.4. |
ARTICLE 13
Delivery Point
| | 13.1.1 | "Delivery Point" means the Ashdod Delivery Point or the Additional Delivery Point as applicable. |
| | 13.1.2 | The "Ashdod Delivery Point" is the point at the flange between the receiving terminal operated by the Yam-Tethys Partners in Ashdod and the Transporter’s receiving terminal in Ashdod (being the entry point to the Downstream System) as identified in the diagram set out in Schedule 9. |
| | 13.1.3 | In addition to the Ashdod Delivery Point, the Sellers will have the right to designate additional Delivery Points which will be the point at the flange between a suppliers' receiving terminal and the Transporter’s receiving terminal near Ashkelon (being an entry point to the Downstream System) or at any such other entry points to the Downstream System as may be agreed by the Parties (each an "Additional Delivery Point"). |
| | 13.1.4 | In the event there is more than one Delivery Point, the Sellers will have the right to deliver Gas hereunder at any one or more Delivery Points at their discretion and the term Delivery Point shall be construed to mean any Delivery Point. |
| | 13.1.5 | Specification Gas to be delivered under the terms of this Agreement shall be tendered for delivery by the Sellers to the Buyer at the Delivery Point. |
Title to Specification Gas and risk of loss of or damage to Specification Gas delivered in accordance with the terms of this Agreement shall pass from the Sellers to the Buyer at the Delivery Point and any liability in respect of such Specification Gas shall also pass at the Delivery Point.
ARTICLE 14
Pressure
| | 14.1.1 | The "Delivery Pressure" shall be a pressure sufficient to allow Natural Gas Properly Nominated by Buyer to enter the Downstream System, it being agreed that the pressure in the Downstream System will not exceed a Gauge maximum pressure of eighty (80) Bar. |
| | 14.1.2 | The Sellers shall deliver Specification Gas at the Delivery Point at the Delivery Pressure. |
| | 14.1.3 | For the avoidance of doubt, if the Sellers, acting as a Reasonable and Prudent Operator, tender the quantity of Specification Gas Properly Nominated for delivery in accordance with Article 14.1.2 above and that quantity is not delivered because the pressure downstream of the Delivery Point was higher than eighty (80) Bar (or such higher pressure agreed to by Sellers), then this event will be included in the circumstances of Buyer’s failure to take delivery of Specification Gas and the Sellers shall have no liability for such failure to deliver the quantity Properly Nominated. |
ARTICLE 15
Measurement
Buyer and Sellers agree to determine measurement procedures in consultation with the relevant Transporter procedures and application of good oil and gas industry practices in accordance with the American Gas Association (or European equivalent) codes and specifications and in accordance with part 2 of Schedule 5.
Sellers shall supply, operate and maintain, or cause to be supplied, operated and maintained, suitable gas volume, pressure and temperature measuring devices, and sampling systems and analytical equipment required for collecting samples and for determining quality and composition of the Natural Gas. Such metering station will be located at or near the Delivery Point. If the Sellers supply such measuring devices, they shall do so in accordance with the American Gas Association (or European equivalent) codes and specifications and in accordance with part 2 of Schedule 5.
In the event of any dispute concerning the subject matter of this Article 15, including but not limited to, disputes over the accuracy of measuring devices, their calibration, the result of a measurement, sampling, analysis, computation or method of calculation, such dispute shall be settled in good faith as mutually agreed between the Parties and in consultation with the Transporter, if appropriate. In the absence of such agreement the dispute shall be submitted to the Expert for determination pursuant to Article 19.3.
| 15.4 | Costs and Expenses of Test and Verification |
All costs and expenses for testing and verifying Sellers’ measurement devices shall be borne by Sellers, provided that if Buyer requests testing or verification of measurement devices, the costs for such action shall be borne by Buyer unless such devices are found to be outside tolerance limits. When the services of a competent impartial authority are required and selected by mutual agreement, then the fees and charges of such authority shall be borne equally by Sellers and Buyer.
ARTICLE 16
Force Majeure
The expression "Force Majeure" means any event or circumstance (including (**)), which is beyond the control of the Buyer or the Sellers (as the case may be) (acting and having acted as a Reasonable and Prudent Operator) resulting in or causing:
| | 16.1.1 | the failure or inability by the Buyer or the Sellers (as the case may be) to perform any one or more of their respective obligations (including obligations of reasonable endeavors) under this Agreement; or |
| | 16.1.2 | in the case of the Buyer, the occurrence of all or any of the circumstances specified in Article 16.4.2(d), |
and which failure, inability or occurrence (as applicable) could not have been prevented or overcome by the exercise by the Buyer or the Sellers (as the case may be) of such action as would have been taken by a Reasonable and Prudent Operator.
| | For the avoidance of doubt, changes in market conditions, including changes that directly or indirectly affect the demand for or price of electricity and/or Gas, including inter alia, loss of customers, shall not constitute a Force Majeure event. |
Notwithstanding anything in Article 16.1 (and without prejudice to the generality thereof):
| | 16.2.1 | The Sellers shall not be entitled to claim relief through Force Majeure for any failure to perform their obligations hereunder to the extent that such failure was caused by a (**). |
| | 16.2.2 | The Buyer shall not be entitled to claim relief through Force Majeure in the event of any failure to perform its obligations hereunder to the extent that such failure was caused by any one or more of the following events or circumstances: |
| | (a) | The failure to renew, extend or obtain any of Buyer’s Generation Licenses; or |
| | (b) | Any requirement pursuant to Section 92 of the Israel Natural Gas Sector Law, 2002, to purchase Natural Gas from other producers or sources. |
Notwithstanding anything in Article 16.1 (and without prejudice to the generality thereof) failure by either the Buyer or the Sellers (as the case may be) to pay money which is due shall not be treated as being Force Majeure or caused thereby unless such failure was due to Force Majeure affecting all reasonable means of payment in which event upon the cessation of such Force Majeure the Buyer or the Sellers (as the case may be) shall pay in addition to the above, interest on any amounts due hereunder at the rate of LIBOR (**) calculated from the due date to the date of payment.
The Buyer or the Sellers (as the case may be) shall, subject to Article 16.5 and Article 16.6, be relieved from liability under this Agreement as follows:
| | 16.4.1 | In the case of the Sellers, to the extent that by reason of Force Majeure, the Sellers: |
| | (a) | fail to deliver the quantities of Specification Gas Properly Nominated for delivery under this Agreement; |
| | (b) | fail to perform any of their other obligations under this Agreement; or |
| | (c) | are otherwise in breach of any covenant under this Agreement. |
| | 16.4.2 | In the case of the Buyer, to the extent that by reason of Force Majeure, the Buyer: |
| | (a) | fails to take delivery of Specification Gas Properly Nominated for delivery and properly tendered for delivery under this Agreement; |
| | (b) | fails to perform any of its other obligations under this Agreement; |
| | (c) | is otherwise in breach of any covenant under this Agreement; or |
| | (i) | accept Natural Gas at Buyer's Facilities and/or use Natural Gas to generate electricity at and/or transmit electricity from any of the Buyer’s Facilities; or |
| | (ii) | transport or have transported in the Downstream System to any of Buyer’s Facilities the whole or any part of the Natural Gas which was to have been transported therein (pursuant to the Transportation Agreement) owing to the inoperability of the Downstream System caused by an event or circumstance beyond the control of the Transporter (acting and having acted as a Reasonable and Prudent Operator) and which could not have been prevented or overcome by the exercise by the Transporter of the standard of a Reasonable and Prudent Operator. |
| | 16.4.3 | In the event that either the Buyer or the Sellers shall exercise their respective rights (pursuant to Article 23.1) to perform any obligations under this Agreement by procuring that such obligations are performed by a third party, then the Buyer or the Sellers (as the case may be) shall only be entitled to be relieved from liability for reasons of Force Majeure to the extent that they acted as a Reasonable and Prudent Operator in appointing such third party and such third party would have been so entitled to such relief if such third party had been the Buyer or the Sellers (as the case may be) under this Agreement. For the avoidance of doubt, any Force Majeure event relating to the Yam-Tethys Facilities shall constitute a Force Majeure event under this Agreement provided that the inoperability of the Yam-Tethys Facilities would have entitled the Yam-Tethys Partners to such relief if Yam-Tethys Partners had been the Sellers under this Agreement. |
Relief under Article 16.4 shall not be given to the Buyer or the Sellers unless such Party has:
| | 16.5.1 | By notice to the other Party (served as soon as reasonably possible and in no event later than seven (7) Days after becoming aware of the failure, inability or occurrence) that it intends to claim relief (and such notice shall contain such relevant information relating to such failure, inability or occurrence as is available including (without limitation) (**); and |
| | 16.5.2 | Given (as soon as reasonably possible after the service of the notice under Article 16.5.1 but in any event not later than fifteen (15) Days thereafter) (**). |
As soon as practicable after the occurrence of an event of Force Majeure, the Party claiming relief shall take all reasonable steps necessary in the applicable circumstances to remedy the failure, inability or occurrence. Relief under this Article 16 shall cease to be available if the Party claiming relief (or, as applicable, such third party) fails to so take all necessary steps in the applicable circumstances to remedy the failure, inability or occurrence but such Party claiming relief shall not be obliged to settle any labor dispute except, in such manner as it shall in its own judgment consider fit.
Upon request from the other, the Party claiming relief shall as soon as reasonably possible to the extent it is entitled to do so give or procure access or if it is not so entitled shall use reasonable endeavors to procure access (subject in each case to operational constraints) for a reasonable number of representatives of the other Party to examine the scene (if any) of the event or circumstance causing the failure, inability or occurrence (such access to be at the sole risk and cost of the Party seeking access).
| 16.8 | Extended Force Majeure |
If by reason of an event of Force Majeure any Party ("Affected Party") is unable to perform any material obligation required to be performed under this Agreement and such inability to perform continues for a period of (**), the other Party may terminate this Agreement by giving at least ninety (90) days' notice in writing to the Affected Party at the expiry of which this Agreement will terminate without prejudice to any rights of the Parties that have accrued prior to the date of termination.
ARTICLE 17
Default
| | 17.1.1 | With effect from the later of the Commencement Date and October 1, 2013, if the Sellers fail in respect of any Hour to deliver the quantity of Specification Gas Properly Nominated for delivery for any reason other than the Buyer's failure to take Specification Gas otherwise properly tendered for delivery in accordance with this Agreement, such amount will be "Shortfall Gas", provided however that (**). |
| | 17.1.2 | Notwithstanding the above, for the purposes of calculating Shortfall Gas, a Proper Nomination in respect of any Hour shall not include any quantity of Specification Gas: |
| | (a) | which exceeds the quantity taken by the Buyer in respect of the immediately preceding Hour (other than by reason of Sellers’ failure to tender for delivery Properly Nominated Gas in such preceding Hour) by more than: (i) (**) MMBTU if the quantity taken by the Buyer in the preceding Hour was equal to or lower than (**) MMBTU; (ii) (**) MMBTU if the quantity taken by the Buyer in the preceding Hour was higher than (**) MMBTU (**) or (**) MMBTU if the quantity taken by the Buyer in the preceding Hour was higher than (**) MMBTU (**). |
| | (c) | which exceeds zero (0) during the first three (3) Hours after a Cold Start (**); or |
| | (d) | which exceeds (**) during the first (**) Hours after any Hour in which the Buyer and others nominated a total quantity of less than (**) MMBTU for delivery from the Reservoir to the Delivery Point or from the fourth Hour after such Hour quantities which exceeds the rates as set out in Article 17.1.2(a) above. |
| | 17.1.3 | If any correction of quantities delivered in any Hour is made under the provisions of Article 15, then the actual amount of any Shortfall Gas accrued shall be adjusted when the corrected amounts are available under the provisions of Article 15 and the appropriate adjustments shall be made for the purposes of Article 17.2. |
| | 17.1.4 | In order to avoid any doubt, Shortfall Gas shall not include any quantity for which the Sellers are relieved from liability in accordance with Article 16. |
| | 17.1.5 | It is agreed that the provisions of Article 17.1 shall not apply in circumstances where in any Hour, the quantity of Gas delivered by the Sellers in respect of that Hour, is within the (**). |
| | 17.1.6 | In respect of each Day and each Week, if the aggregate quantity of Gas delivered by the Sellers in respect of such periods, is not within the (**), respectively, then the extent to which the aggregate delivery falls short of the aggregate Proper Nominations for the applicable period ("Period Shortfall") will be Shortfall Gas in respect of the Month in which such period falls. It is agreed that each such quantity of Period Shortfall will be reduced by any quantities of Shortfall Gas already taken into account in respect of any Hour or Day falling within any longer aforesaid period. For the purposes of calculating the Week periods in any Month, there shall be included only those whole Weeks which end in that Month. |
| 17.2 | Monthly Shortfall Aggregate |
| | 17.2.1 | The total of Shortfall Gas, in respect of any Month shall be aggregated as at the end of that Month (such aggregate amount together with any additions thereto pursuant to Article 17.2.3 being herein referred to as the "Shortfall Aggregate"). |
| | 17.2.2 | The first Specification Gas delivered after the end of that Month under this Agreement up to an amount equal to the Shortfall Aggregate which would otherwise be paid for by the Buyer at the Contract Price, shall be paid for at the Shortfall Price. The Shortfall Aggregate shall be reduced by the amount of Specification Gas which is paid for at the Shortfall Price. |
| | 17.2.3 | To the extent that at the end of any Month the Shortfall Aggregate exceeds the amount of Specification Gas which is delivered in the next succeeding Month and paid for at the Shortfall Price, the balance shall be carried forward and be added to the Shortfall Aggregate for the next succeeding Month or Months (as the case may require). |
| | 17.2.4 | If at any time or from time to time during the Contract Period the aggregate money value of the product of the Shortfall Aggregate and the difference between the applicable Shortfall Price and the Contract Price exceeds (**), then the Buyer may by notice to the Sellers elect that, subject to the limitations of liability under Article 17.4.8, the Sellers shall pay to the Buyer a sum of money equal to such aggregate money value and the Shortfall Aggregate shall be adjusted accordingly. |
| | 17.2.5 | If at the end of the Contract Period there is any quantity of Shortfall Aggregate which has not been discharged then, subject to the limitations of liability under Article 17.4.8, the Sellers shall pay to the Buyer at such date of termination a sum of money equal to the product of the Shortfall Aggregate and the difference between the applicable Shortfall Price and the Contract Price at the end of the final Contract Year of the Contract Period. |
| 17.4 | Limitations of Liability |
| | 17.4.1 | The payment by the Buyer to the Sellers for a quantity of Specification Gas equal to the Minimum Bill Quantity for each Contract Year of the Take or Pay Period shall be the exclusive remedy and the limit of all and any liability of the Buyer in respect of any failure to take Specification Gas in that Contract Year, and shall be in full satisfaction of all rights, costs, claims, and damages (whether direct, indirect, consequential or otherwise and howsoever arising) of the Sellers in respect thereof, including as a result of a breach of Article 7.2. |
| | 17.4.2 | Subject to the provisions of Article 17.4.1 above, Buyer’s total liability for any breach of any of its other undertakings and obligations under this Agreement shall not exceed an amount equal to (**) in any Contract Year, excluding the final Contract Year, and a total amount equal to (**) for the whole Contract Period (including the final Contract Year). This limitation of liability shall not apply to (**). |
| | 17.4.3 | The Buyer shall not be liable to the Sellers and the Sellers shall not be liable to the Buyer for any indirect (which includes loss of profit and business interruption claims), consequential, exemplary or punitive losses or damages. To the extent any damages are required to be paid hereunder are liquidated, the Parties hereby acknowledge and agree that the liquidated damages constitute an adequate compensation and shall be the exclusive remedy in such circumstances. |
| | 17.4.4 | The delivery by the Sellers of a quantity of Specification Gas to be paid for by the Buyer at the Shortfall Price or payments made according to the provisions of Article 17.2.4 and 17.2.5 (if applicable), shall be the exclusive remedy and the limit of and the sole damages to which the Buyer may be entitled from the Sellers (whether direct, indirect, consequential or otherwise and howsoever arising) in respect of Sellers’ failure to deliver Properly Nominated Specification Gas to the Buyer in any Hour, including as a result of a breach of Articles 6.5, 6.6.3, and 7.1. |
| | 17.4.5 | The delivery by the Sellers of a quantity of Specification Gas to be paid for by the Buyer at the applicable Shortfall Price, shall be the exclusive remedy and the limit of and the sole damages to which the Buyer may be entitled from the Sellers (whether direct, indirect, consequential or otherwise and howsoever arising) in respect of Sellers’ failure to deliver Properly Nominated Specification Gas to the Buyer in any Hour in the circumstances described in Article 17.3 and the Sellers failure to comply with the provisions of Article 6.4.11. Notwithstanding the aforesaid, in the event that the Sellers are in breach of their undertakings under Article 6.6.3, the Buyer shall have the right to seek specific performance of such undertakings. |
| | 17.4.6 | The Payment of any amount due pursuant to Article 12, shall be the sole damages to which the Buyer may be entitled from the Sellers (whether direct, indirect, consequential or otherwise and howsoever arising) in respect of Sellers’ failure to deliver Properly Nominated Specification Gas to the Buyer in any Hour (in the circumstances of Article 12). |
| | 17.4.7 | The payment by Sellers to Buyer of the amounts to which Buyer may be entitled under Article 2.3 up to a maximum of (**) shall be the limit of Sellers' liability and Buyer’s exclusive remedy in such circumstances, other than termination rights pursuant to Article 2.3.4. |
| | 17.4.8 | Notwithstanding anything to the contrary in this Agreement, Sellers total liability for any failure to deliver Specification Gas and all other breaches of any or all of their undertakings and obligations under this Agreement, including as a result of a breach of Articles (**), and 7.1, shall not exceed an amount equal to (**), and a total amount equal to (**) for the whole Contract Period (including the final Contract Year). |
| | (a) | The limitation of liability under Article 17.4.8 above shall not apply to (**). |
| | (b) | For the avoidance of doubt, the limitation of liability set out in this Article 17.4.8 will apply in respect of (**). |
ARTICLE 18
Assignment and Security Interests
| | 18.1.1 | For the purposes of this Article 18, the expression "Party" means the Buyer of the one part and each of the Sellers of the other part, as appropriate. |
| | 18.1.2 | No Party shall assign or transfer its rights and/or obligations under this Agreement or any part thereof except in accordance with the provisions of this Article 18. Any assignment or transfer made without fulfilling the provisions of this Article 18 shall be of no effect. |
| 18.2 | Transfer Among Sellers or to Affiliates |
| | 18.2.1 | The Buyer and each of the Sellers may assign or transfer all or any portion of its rights and obligations under this Agreement (in this Article 18 "transfer") to an Affiliate without the consent of the other Party, subject to the following: |
| | (a) | Prior to such transfer, the transferring Party shall provide to the other Party details of the rights and obligations to be transferred and the name of the Affiliate (or if a transfer between Sellers, the name of the Seller to which the interest is to be transferred); and |
| | (b) | At the time of such transfer, the transferring Party shall: |
| | (i) | if the transferring Party is a Seller, transfer to the transferee a corresponding portion of the Seller’s Percentage; |
| | (ii) | obligate the transferee to observe and perform the obligations under this Agreement transferred to it, including in the case of a transfer by a Seller, the obligation by the transferee to assume liability (commensurate with the interest transferred) in respect of all and any Make-Up Aggregate, Carry Forward Aggregate and Shortfall Aggregates accrued at the time of such transfer. |
| | (iii) | if the transferring Party is a Seller, replace the Credit Cover provided to the Buyer pursuant to Article 20 with a new Credit Cover on the same terms (mutatis mutandis) as the existing Credit Cover; |
| | (c) | Within seven (7) days after such transfer, the transferring Party shall give to the other Party notice of such transfer together with documentation regarding fulfillment of the provisions of Article 18.2.1(a) and (b) above. |
| | 18.2.2 | It is agreed that in the event of a transfer in accordance with the provisions of Article 18.2.1 above, the transferring Party shall remain fully liable to the other Party for the performance by the transferee of its obligations and discharge of its liabilities under this Agreement, except where the transferee has fulfilled the additional provisions of Article 18.4.1, in which case the transferring Party will be relieved of liability upon fulfillment of such provisions. |
| | 18.2.3 | The provisions of Article 18.2.1 and 18.2.2 above will also apply to the transfer of rights and obligations from any of the Sellers to another Seller. Notwithstanding the provisions of Article 18.2.2, in the event of a transfer from any of the Sellers to another Seller, the transferring Seller will be relieved from liability to the Buyer for the performance of its obligations and discharge of its liabilities under this Agreement provided the transfer does not exceed in aggregate (**) of the transferring Seller’s Percentage. |
| 18.3 | Buyer's Structural Reform |
| | 18.3.1 | Notwithstanding the provisions of Article 18.1 above, Buyer may transfer all of its rights and obligations under this Agreement to an Affiliate, without the prior consent of the Sellers, subject to; (i) such Affiliate providing to Sellers a written undertaking to be bound by all the terms and conditions of this Agreement, such undertaking to be in a form reasonably satisfactory to Sellers; and (ii) the Buyer remaining fully liable to Sellers for the performance by the Affiliate of its obligations and discharge of its liabilities under this Agreement. |
| | 18.3.2 | Buyer shall be entitled to transfer Buyer’s rights and obligations under this Agreement to an Affiliate pursuant to the Electricity Sector Act 1996, the Government Companies Act 1975 and/or an Israeli Government decision to carry out with respect to Buyer any solvent re-organization, merger or de-merger, privatization or other structural reform provided that any such proposed transfer shall be subject to the provisions of Article 18.2 or 18.4 (as the case may be). |
| | 18.4.1 | Any transfer by the Buyer, or by each of the Sellers to a third party (other than to an Affiliate or among Sellers as set out in Article 18.2), may only be made if the transferring Party shall: |
| | (a) | reasonably satisfy the other Party that such proposed transferee has the financial and the technical status and ability to observe and perform the obligations to be transferred (regardless of any comparison with the corresponding status and ability of the transferring Party), and the Party wishing to transfer has given notice to that effect to the other and with such notice has given any necessary information to show such financial and technical status and ability of the proposed transferee. In such event, unless the Party to whom the notice has been given has within thirty (30) days given notice that it is not satisfied (stating the reasons therefore), it shall be deemed to be satisfied; and |
| | (i) | where the transferring Party is the Buyer, the other Party (acting reasonably) will also be entitled to require from the transferee appropriate financial securities or guarantees and appropriate technical assurances in connection with such transfer and that the transfer be made together with a transfer to the transferee of a corresponding portion of Buyer’s rights in the generating units at Buyer’s Facilities (such portion to be determined by the Expert pursuant to Article 19.3, in the event of disagreement between Parties regarding the portion to be transferred); and |
| | (b) | provide to the other Party, details of the rights and obligations to be transferred; |
| | (c) | if and to the extent applicable, provide to the other Party a new Credit Cover to replace the Credit Cover provided pursuant to Article 20, in respect of the obligations to be transferred to the proposed transferee on the same terms (mutatis mutandis) as the existing Credit Cover; |
| | (d) | if the transferring Party is a Seller, transfer to the transferee a corresponding portion of the Seller’s Percentage; and |
| | (e) | obligate the transferee to observe and perform all the obligations of this Agreement transferred to it, including in the case of a transfer by a Seller, the obligation by the transferee to assume liability (commensurate with the interest transferred) in respect of all and any Make-Up Aggregate, Carry Forward Aggregate and Shortfall Aggregates accrued at the effective date of such transfer. |
| | 18.4.2 | In the event that the Sellers' Lenders, acting reasonably, do not approve Buyer's proposed transferee, the Buyer will be deemed not to have reasonably satisfied the Sellers in accordance with the provisions of Article 18.4.1. |
| | 18.4.3 | With effect from the effective date of a transfer pursuant to this Article 18.4, the transferring Party shall, to the extent that it has transferred its obligations under this Agreement, be relieved from its obligations hereunder, but (except for the obligations assumed by the transferee of a Seller pursuant to Article 18.4.1(e)) no such transfer shall operate to relieve the transferring Party of any liability accrued under or pursuant to the terms of this Agreement prior to the effective date of such transfer. |
| | 18.4.4 | Within seven (7) Days after such transfer, the transferring Party, jointly with the transferee, shall give to the other Party notice of such transfer. |
| | 18.5.1 | The Seller’s Percentage of each of the Sellers as of the date hereof is set out in Schedule 2. |
| | 18.5.2 | A Seller shall not transfer its Seller’s Percentage (or any part thereof) unless at the same time it (**). |
| 18.6 | Security for Financing |
| | 18.6.1 | Notwithstanding the foregoing, a Seller may at any time (upon giving the Buyer not less than thirty (30) days prior notice thereof) assign its rights to the receipt of any monies due or to become due from the Buyer to it under this Agreement to or in favor of banks, bona fide financial entities or other lenders (in this Article 18.6 together called "Banks") as security for any financing, provided that the Buyer shall not be required or entitled to act on such assignment and make payment to the Banks unless: |
| | (a) | the assignment contains an acknowledgement from the Banks that their rights to receive monies under the assignment are subject to the terms of this Agreement; and |
| | (b) | the Seller has provided the Buyer with a certified copy of an extract (referring to the above acknowledgement) from such assignment; and |
| | (c) | the Seller has confirmed to the Buyer that the Buyer shall be entitled to rely on the receipt by such Banks of any monies paid by the Buyer to such Banks pursuant to such assignment as being due payment to the Seller hereunder. |
| | 18.6.2 | The authority given by the Seller to the Buyer (consequent upon an assignment which has been made under the provisions of Article 18.6.1) to make payment of monies due hereunder to the Banks may be revoked by a notice given to the Buyer by the Seller which complies with the provisions of Article 11.4 and which expressly revokes such authority. |
| | 18.6.3 | Notwithstanding the foregoing, a Seller may at any time (upon giving the Buyer not less than thirty (30) day prior notice thereof) create, subject to the terms of this Article 18.6.3, any security over all or any of its rights under this Agreement (the "Charged Assets") (except for the creation of security in respect of its rights hereunder to receive monies in respect of which rights the terms of Article 18.6.1 apply in relation to creation of security), the Seller’s Interest, the Seller’s Percentage of the Sellers’ Agreements and/or its interest in the Sellers’ Facilities in favor of Banks as security for any financing, but the creation of such security over the Charged Assets shall only be permitted and be effective against the Buyer if at the time of the creation of the security over the Charged Assets, such Banks shall covenant directly with the Buyer (i) to procure that upon the enforcement of such security, they or any receiver appointed pursuant to the instrument creating the security or other Person enforcing the security or having control over the Charged Assets or any purchaser of the Charged Assets, shall accept and comply with the obligations and covenants of the Seller in relation to the Charged Assets contained in this Agreement; and (ii) not to sell the Charged Assets to any purchaser, unless there shall simultaneously be an assignment of all the rights and obligations of the Seller in relation to the Charged Assets under this Agreement to such purchaser in accordance (mutatis mutandis) with the provisions of Article 18.4. |
| | 18.6.4 | The Buyer agrees, if required by any Lender of any Seller (individually and collectively referred to as "Sellers' Lenders"), to provide Sellers' Lenders with acknowledgments evidencing its consent to creating a security interest over the Charged Assets which shall include reasonable terms and conditions customary for an acknowledgement of this type, substantially in the form attached as Schedule 10 hereto. |
ARTICLE 19
Governing Law and Dispute Resolution
This Agreement shall be governed by and construed in accordance with the substantive laws of Israel. In resolving any Dispute, the Expert or the arbitrator(s) shall take into account international petroleum industry practices.
Any dispute, claim, or controversy arising out of or relating to this Agreement, including without limitation any issue regarding the existence, validity, enforceability, interpretation, application, performance, breach, formation or termination of this Agreement (each a "Dispute"), shall be resolved exclusively and finally in accordance with the provisions of this Article 19.
| | 19.2.1 | Disputes that are to be submitted to Expert determination in accordance with Articles 6.8.10, 9.4.3, 10.4.3, 12.4.1, 15.3, 17.3.3(d) and 18.4.1(a)(i) shall be resolved by Expert Determination in accordance with the provisions of Article 19.3; and |
| | 19.2.2 | Any Dispute (other than those referred to in Article 19.2.1 but including any Dispute regarding the conduct, interpretation, enforcement or application of the Expert Determination), shall be resolved by Arbitration in accordance with the provisions of Article 19.4. |
| | 19.3.1 | Procedure for Appointment |
| | The procedure for the appointment of the Expert shall be as follows: |
| | (a) | The Party initiating Expert Determination shall give written notice to that effect to the other Party and with such notice shall give specific details of the Dispute to be resolved by the Expert. |
| | | The Parties shall endeavor to agree on a Person to act as the Expert to whom the Dispute shall be referred for determination. |
| | (c) | Notwithstanding the provisions of Article 19.3.1(b), if within fourteen (14) days from the delivery of the notice initiating the Expert Determination, the Parties have failed to agree upon the Expert to be appointed pursuant to Article 19.3.1(b), then the LCIA shall serve as appointing authority to appoint the Expert. Either Party may submit a written application to the LCIA, with a copy to the other Party, detailing the nature of the Dispute and the issues to be determined, setting out any matters the applicant may wish to bring to the attention of the LCIA for the purposes of making the appointment. Within ten (10) days of the submission of the Application to the LCIA, the other Party shall submit to the LCIA a reply to the Application. Within fourteen (14) days from the time of the reply to the application, the LCIA shall appoint a person to act as Expert, and in so doing the LCIA may take such independent advice as it thinks fit. |
| | (d) | The Expert Determination shall be administered by the LCIA, which shall act as appointing authority and determine any challenges brought to the Expert. The LCIA's charges shall be in accordance with its schedule of arbitration fees and costs (Schedule of Fees) as in effect at the time the Expert Determination proceeding is initiated. |
| | (e) | Prior to his appointment, the Expert shall provide the LCIA with a resumé of his experience, qualifications, and prior and present professional positions; shall agree in writing to a fee rate in accordance with the LCIA Schedule of Costs as then in effect; and shall sign a declaration to the effect that there are no circumstances known to him likely to give rise to any reasonable doubt regarding his independence and impartiality. The expert shall undertake a continuing obligation to disclose to the LCIA and the Parties any circumstances which may give rise to any reasonable doubt regarding his independence and impartiality after his appointment and before the conclusion of the Expert Determination. |
| | (f) | If circumstances exist giving rise to justifiable doubts about the Expert’s independence or impartiality, a Party may challenge the appointment or continued service of the Expert by giving written notice to the LCIA within thirty (30) days of the appointment or within thirty (30) days of the challenging Party becoming aware of the circumstances giving rise to such doubts. Unless the challenged Expert withdraws or the other Parties agree to the challenge, the LCIA shall, within thirty (30) days, decide the challenge. If the challenge is sustained, the LCIA shall thereafter appoint a replacement Expert. |
| | (g) | If the Expert is either unwilling or unable to accept such appointment or has not confirmed his willingness and ability to accept such appointment within the said period of fourteen (14) days, then either Party may request the LCIA to appoint another Person as the Expert and the process shall be repeated until an Expert is found who accepts appointment. |
| | (h) | The Parties shall cooperate with each other to ensure that the terms and conditions of the contract of appointment of the Expert are agreed with such Person as soon as possible. |
| | 19.3.2 | Nature of Proceeding, Qualifications, and Confidentiality |
| | (a) | The Expert shall act as an expert and not as an arbitrator. The law relating to arbitration shall not apply to the Expert or his determination or the procedure by which he reaches his determination. |
| | (b) | The Expert Determination proceedings shall be conducted in the English language. |
| | | The failure of any Party to participate in the Expert Determination or to comply with any of the requirements of this Article shall not prevent the Expert Determination from proceeding or impair the validity and enforceability of the Expert Determination. |
| | (d) | The determination of the Expert shall be final and binding upon the Parties, save in the event of fraud or manifest error. |
| | (e) | No Person shall be appointed as the Expert unless such Person shall be qualified by education, experience, and training to determine the Dispute. |
| | (f) | No Person shall be appointed as the Expert who at the time of appointment is (or within two (2) Calendar Years before such appointment has been) a director, office holder or an employee of, or directly or indirectly retained as consultant to, either Party or any Affiliate of either Party or is the holder of shares directly or indirectly in a Party. |
| | (g) | Any Person appointed as the Expert shall not be entitled to act as the Expert and shall promptly resign, if, at the time of the appointment or at any time before giving any determination under such appointment, such Person has or may have some interest or duty which materially conflicts or may materially conflict with such Person’s function under such appointment. |
| | (h) | All information, data or documentation disclosed or delivered to the Expert in consequence of or in connection with the Expert’s appointment hereunder, shall be treated as confidential. Except for disclosure to technical or professional advisors under Article 19.3.3(a)(iii), the Expert shall not disclose to any Person any such information, data or documentation and all such information data and documentation shall remain the property of the Party disclosing or delivering the same and all copies thereof shall be returned on completion of the Expert's work. |
| | (i) | Copies of all submissions and communications shall be provided to the LCIA, and once appointed, to the Expert, and to all other Parties. |
| | (j) | The terms of appointment of the Expert shall contain an obligation on the part of the Expert to comply with such obligations as aforesaid. |
| | 19.3.3 | Terms of Reference of the Expert |
| | (a) | The terms of reference of the Expert shall contain (inter alia) provisions that: |
| | (i) | the Expert shall not later than twenty-one (21) days after his appointment call the Parties to a meeting in Israel or such other place as the Parties may agree at which he shall raise any matters requiring clarification (whether arising out of his contract of appointment, the Dispute, or otherwise) and lay down the timetable and procedural rules to be applied, which timetable and rules shall not be inconsistent with the terms of this Article; |
| | (ii) | the Parties shall be entitled and required to supply data, documentation, and information and make written submissions to the Expert as the Expert deems necessary and appropriate for determining the Dispute; |
| | (iii) | the Expert shall be entitled to obtain such independent professional and/or technical advice as he may reasonably require; |
| | (iv) | any and all communications between and submissions made by either of the Parties and the Expert shall be made in English in writing and a copy thereof provided simultaneously to the other Party. The Expert shall not engage in any ex parte communications with any of the Parties. No meeting between the Expert and the Parties or either of them shall take place unless both Parties have a reasonable opportunity to attend any such meeting; |
| | (v) | the Expert may adopt such procedures and may conduct the Expert Determination in such manner as he deems appropriate, consistent with the provisions of this Article. The Expert may hold an evidentiary hearing and require the Parties to attend and present evidence if he deems it reasonably necessary for the determination of the Dispute; |
| | (vi) | the Expert shall issue his Determination within ninety (90) days of his appointment, or as soon thereafter as reasonably practicable or the Parties may agree in writing. The Expert’s Determination shall be in writing and shall state the reasons therefore. The Expert shall provide to the Parties a draft of his proposed Determination in respect of which both Parties shall be entitled to respond and make representations to the Expert within twenty-one (21) days after receipt of the draft Determination; and |
| | (vii) | as soon as possible after the twenty-one (21) day period referred to in Article 19.3.3(a)(v), the Expert shall issue his final Determination. |
| | (b) | If the Expert fails or refuses to comply with the terms of reference or to timely issue the Determination, then the Dispute shall be submitted to arbitration as provided in Article 19.4. |
| | (c) | Each Party shall bear the costs of providing all data, information and submissions given by it and the costs and expenses of all witnesses and Persons retained by it. The costs and expenses of the Expert and any independent advisers to the Expert shall be borne in the manner determined by the Expert and, failing such determination, one half by the Buyer and one half by the Sellers. |
| | (d) | Unless otherwise agreed by the Parties or as determined by the Expert, all meetings and hearings with the Expert shall be held in Israel. |
| | 19.4.1 | Except as referred to an Expert as set forth in Articles 19.2 and 19.3, any Dispute shall be referred to and finally and exclusively resolved by arbitration in accordance with this Article 19.4. |
| | 19.4.2 | Disputes relating to matters with an amount in controversy of less than (**) shall be determined by a single arbitrator, in accordance with the Rules of Arbitration of the Israeli Institute of Commercial Arbitration. The seat of the arbitration shall be (**). If the Parties do not agree that the amount in controversy does not exceed (**), or if the Dispute involves a claim for relief other than monetary relief, then the arbitration shall be heard and determined by a tribunal of three (3) arbitrators in accordance with the provisions of Article 19.4.3 or 19.4.4 (as applicable). |
| | 19.4.3 | Disputes relating to matters with an amount in controversy of (**) or more, but less than (**) shall be heard and determined by a tribunal of three (3) arbitrators. The arbitration shall be conducted pursuant to the Rules of Arbitration of the London Court of International Arbitration ("LCIA Rules"). The seat of the arbitration shall be (**). If the Parties do not agree that the amount in controversy is less than (**), then the arbitration shall be heard and determined by a tribunal of three (3) arbitrators in accordance with the provisions of Article 19.4.4. |
| | 19.4.4 | Disputes relating to matters with an amount in controversy of (**) or more shall be heard and determined by a tribunal of three (3) arbitrators. The arbitration shall be conducted pursuant to the LCIA Rules. The seat of arbitration shall be London, England. |
| | 19.4.5 | With respect to any Dispute, the amount in controversy shall be based upon the amount claimed in the proceeding in all claims in the aggregate, but with claims and counterclaims being counted separately, exclusive of interest or attorneys’ fees, and including the actual or potential value to the Parties of any matters for which a declaration of the meaning, effect, or application of any terms, rights, or obligations arising out of or relating to this Agreement is requested, or for which other non-monetary relief is sought. |
| | 19.4.6 | If a single arbitrator is to determine the Dispute, the Parties shall endeavour to agree on the arbitrator. If the Parties are unable to agree on the arbitrator within thirty (30) days of the date for the Respondent’s Response to the request for arbitration, then the arbitrator shall be appointed by the Israeli Institute of Commercial Arbitration in accordance with its Rules. The arbitrator shall be qualified by experience and education to determine matters in the nature of the Dispute. |
| | 19.4.7 | If the Dispute is to be determined by a tribunal of three (3) arbitrators, the Claimant(s) and Respondent(s) shall each nominate a person to serve as arbitrator as provided in the LCIA Rules. The two arbitrators so appointed and confirmed shall, within thirty (30) days of their confirmation or such other time as the Parties may agree in writing, nominate a third person as arbitrator, who upon confirmation shall serve as the Chair of the Tribunal. The arbitrators so appointed shall be qualified by education and experience to determine matters in the nature of the Dispute. |
| | 19.4.8 | No person shall be appointed as an arbitrator under this Agreement if at the time of appointment he is (or within three (3) years before such appointment has been) a director, office holder, or an employee of, or directly or indirectly retained as consultant to, either Party or any Affiliate of either Party or is the holder of shares directly or indirectly in a Party. |
| | 19.4.9 | Any person appointed as an arbitrator shall not be entitled to act as an arbitrator if, at the time of the appointment or at any time before giving the award under the arbitration, such person has or may have some interest or duty which materially conflicts or may materially conflict with his function under such appointment. |
| | | The arbitration proceedings shall be held as promptly as possible at such place in Israel or England (as applicable) (or other place agreed to by both Parties) and at such time as the arbitrator(s) shall determine. |
| | | The Parties hereby waive any reference to the courts under Sections 45 and 69 of the Arbitration Act 1996, and under Sections 21A and 29B of the Israeli Arbitration Law – 1968 and the first supplement thereto. |
| | | All arbitration proceedings shall be conducted in and all awards rendered in the English language. |
| | | The arbitrator(s) shall not be bound by the rules of evidence and civil procedure. The arbitrators shall not act as amiable compositeur or ex aequo et bono. |
| | | The Award shall be final and binding upon the Parties, and shall be without right of appeal. Judgment on the award may be entered in any court having jurisdiction. |
| | | The Arbitral Tribunal has the power and authority to award actual money damages, and to award declaratory, injunctive, or mandatory relief, including ordering specific performance. Any award of monetary damages shall be made in U.S. dollars, and shall include interest thereon from the date of breach until paid. The arbitrators shall have no power to award, and the Award shall not include consequential, punitive, or other special damages. |
| | | The fees of the arbitrator(s) and costs incidental to arbitration proceedings, including legal expenses of the Parties, shall be borne in accordance with the determination of the arbitrator(s). |
| | | The Parties shall conduct the arbitration proceedings in a fair, efficient and expeditious manner. |
| | | Any arbitration rendered pursuant to this Article 19 is an international arbitration for the purposes of Israeli law, English law, United States law, and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958. |
| | | This Article constitutes an arbitration agreement between the Parties as defined in the Israeli Arbitration Law-1968. |
| | 19.5.1 | Subject to the above mentioned dispute resolution mechanism and the arbitration provisions set forth above in this Article, non-exclusive jurisdiction in respect of any matter relating to this Agreement shall be vested: (i) with respect to any Dispute pursuant to Articles 19.4.2 and 19.4.3 - in the competent courts of Tel Aviv – Jaffa; and (ii) with respect to any Dispute pursuant to Article 19.4.4 - in the courts of London, England. |
ARTICLE 20
Security and Credit Cover
Dor Gas Exploration Limited Partnership (in this Article 20, "Dor") shall provide and maintain Credit Cover for the benefit of the Buyer, as follows:
| | 20.1.1 | Dor shall, by October 1, 2013, provide the Buyer with a Credit Cover in the total amount of (**), which shall be maintained in force for the First Period to be increased within 30 Days from the commencement of the Second Period (if applicable) to an amount of (**), to be maintained until the end of the entire Contract Period. |
| | 20.1.2 | In the event that Dor provides the Buyer with a Corporate Guarantee as its Credit Cover in any Contract Year, Buyer will be entitled to instruct Dor in respect of the following Contract Year, to replace the Corporate Guarantee with another type of Credit Cover (Bank Guarantee or Letter of Credit, at Dor's discretion) by written notice to Dor at least thirty (30) days prior to the latest date on which Credit Cover must be provided in respect of the following Contract Year in accordance with Article 20.1.1. Buyer's right to so instruct Dor will only apply in the following circumstances: (i) the guarantor under the Corporate Guarantee defaulted on any payment due under the Corporate Guarantee; or (ii) where there has been an adverse material change in the financial standing of the guarantor under such Corporate Guarantee which may reasonably be expected to impair such guarantor’s ability to make all payments under the Corporate Guarantee. |
| | 20.1.3 | The Buyer shall be entitled to call on and draw down against the Credit Cover which is in the form of a Corporate Guarantee to the extent that, and at such time as, Dor has failed to meet its payment obligations in respect of all amounts which Dor owes to Buyer pursuant to this Agreement. The Buyer shall give Dor notice of not less than fourteen (14) days of its intention to call on and draw down against the Credit Cover (any such Corporate Guarantee) provided by Dor. |
| | 20.1.4 | Dor may at anytime during the Contract Period choose to replace the Corporate Guarantee with any other type of Credit Cover (Bank Guarantee or Letter of Credit, at Dor's sole discretion) by written notice to the Buyer at least 30 (thirty days) prior to the latest date on which Credit Cover must be provided in respect of following Contract Year. |
| | 20.1.5 | The Buyer shall be entitled to draw down against Credit Cover which is in the form of a bank guarantee or a letter of credit to the extent that, and at such time as, Dor has failed to meet its payment obligations in respect of undisputed amounts or amounts determined under Article 19 (whether in whole or in part) under this Agreement. The Buyer shall give to Dor a notice of not less than seven (7) days of its intention to draw down against any such Credit Cover provided by Dor. |
ARTICLE 21
Relationship and Sellers’ Coordinator
| 21.1 | Relationship of Sellers |
| | 21.1.1 | The Sellers are acting jointly in relation to matters such as the development of the Reservoir, the Sellers’ Facilities and the production, transportation and delivery of Specification Gas under this Agreement (and acting through the Sellers’ Coordinator in the circumstances set out in Article 21.2), but it is acknowledged by the Buyer (notwithstanding that this Agreement is entered into by all the Sellers with the Buyer) that nothing in this Agreement shall be deemed to constitute as between the Sellers any joint liability and each of the Sellers shall be liable to the Buyer only in respect of its Seller’s Percentage of such liability of Sellers as may arise under this Agreement. |
| | 21.1.2 | Notwithstanding that the Buyer may make nominations for the delivery of Specification Gas under this Agreement in an aggregate nomination in a single notice delivered to the Sellers’ Coordinator pursuant to Article 21.2.1, the quantity deemed to have been nominated for delivery by each Seller shall be its respective Seller’s Percentage of the aggregate quantity so nominated. |
| | 21.1.3 | The quantity of Specification Gas deemed to have been delivered at the Delivery Point by each of the Sellers in respect of each Hour shall be its respective Seller’s Percentage of the aggregate quantity of Specification Gas delivered by the Sellers at the Delivery Point in response to the Buyer’s nomination. To the extent that such aggregate quantity falls short of the Proper Nomination, such shortfall shall be attributed to each of the Sellers in proportion to its respective Seller’s Percentage. |
| | 21.2.1 | The Sellers hereby appoint Noble Energy Mediterranean Ltd. as their representative (herein called the "Sellers' Coordinator", which expression shall include any successor appointed as provided herein) who shall be authorized to and shall act as the representative for the Sellers under this Agreement for the following purposes (provided that the authority hereby given to the Sellers' Coordinator relating to the giving of notices, nominations, statements and estimates shall not preclude the Sellers from giving any notices, nominations, statements and estimates which are within the scope of such authority): |
| | (a) | the giving and receiving of all notices, nominations, estimates, and requests, provided that such authority shall not extend to a notice of termination of this Agreement; |
| | (b) | the giving and receiving of all financial and other statements, reports and information hereunder; |
| | (c) | the making and witnessing of the measurement and testing of Specification Gas delivered to the Buyer under this Agreement and of the measuring equipment and adjustments to such equipment; and |
| | (d) | the settling with the Buyer of all disputes or differences between the Parties hereunder: |
| | (i) | in relation to the applicable DCQ; |
| | (ii) | arising under Article 15 or in relation to the volume and/or Higher Heating Value of Gas delivered in any Hour to the Buyer hereunder; |
| | (iii) | arising under Article 12; and |
| | (iv) | as to whether the Sellers are entitled to relief under Article 16 in respect of any underdelivery of Gas to the Buyer in any Hour. |
| | 21.2.2 | The Sellers agree that the Buyer shall be entitled to act upon any or all acts or things done or performed or nominations, notices or statements given or received or agreements made from time to time in respect of the above matters or within the scope of its authority by the Sellers' Coordinator as fully and effectively as though the Sellers had themselves done or performed the same. |
| | 21.2.3 | The Sellers may at any time change the Sellers' Coordinator provided that at all times during the Contract Period a Sellers' Coordinator is appointed. The Sellers shall notify the Buyer of any change of the Sellers' Coordinator. |
| | 21.2.4 | In the event that the Buyer considers the Sellers to be in breach of this Agreement as a result of an alleged failure of the Sellers' Coordinator to perform its duties described in this Agreement, the Buyer shall give the Sellers notice thereof and also give the Sellers a period of sixty (60) days to enable the Sellers to rectify or cause to be rectified the alleged breach before the Buyer institutes any legal proceedings in respect thereof. |
ARTICLE 22
Immunity
Each of the Parties is subject to civil and commercial law with respect to its obligations under this Agreement, and the signing and performance of this Agreement by such Party constitute private and commercial acts rather than governmental and public acts. Each of the Parties irrevocably represents, warrants and agrees that this Agreement is a commercial rather than a public or governmental activity and that each such Party is not entitled to claim immunity from legal proceedings with respect to itself or any of its assets on the grounds of sovereignty or otherwise under any law or in any jurisdiction where an action may be brought for the enforcement of any of the obligations arising under or relating to this Agreement. To the extent that any of the Parties or any of their assets has or hereafter may acquire any right to immunity from set-off, legal proceedings, attachment prior to judgment, other attachment or execution of judgment on the grounds of sovereignty or otherwise, such Party irrevocably waives such rights to immunity in respect of its obligations arising under or relating to this Agreement.
ARTICLE 23
Miscellaneous Provisions
| 23.1 | Performance of Obligations |
Each Party shall be entitled to perform any of its obligations under this Agreement by procuring that such obligations are performed on its behalf by a third party, but such Party shall remain responsible to the other for the due performance of such obligations and for any failure or non-performance of such third party or any operator agents contractors or employees of such third party, as if such Party itself had failed to fulfill the relevant obligations.
No waiver by any Party of any default or defaults by the other in the performance of any of the provisions of this Agreement shall operate or be construed as a waiver of any other or further default or defaults, whether of a like or different character.
This Agreement shall bind and inure to the benefit of the Buyer and each of the Sellers and their respective successors and permitted assigns.
| | 23.4.1 | Any notice to be given by one Party to another under this Agreement shall be in writing and shall be delivered by hand to the Party in question or sent to such Party by registered delivery, letter or facsimile or electronic transmission addressed to that Party at such address (or as the case may be, such facsimile transmission number or electronic mail address) as the Party in question may from time to time designate by written notice. |
| | 23.4.2 | Until such notice shall be given, the addresses of the Parties shall be those which appear in this Agreement. |
| | 23.4.3 | All notices delivered by recorded delivery or hand or sent by facsimile or electronic transmission shall be deemed to be effective when received at the recipient's address as aforesaid. |
| | 23.4.4 | Any notice (other than routine notices and communications) given or facsimile or electronic transmission shall, unless already acknowledged, be subsequently confirmed by letter sent by registered delivery or delivered by hand, but without prejudice to the validity of the original notice, if received. |
This Agreement shall constitute the entire agreement between the Parties as to the matters addressed herein and shall supersede and take the place of all documents, minutes of meetings, letters or notes which may be in existence at the date hereof, and of all written or oral statements, representations and warranties which may have been made by or on behalf of the Parties as to such matters.
The provisions of Article 8.5, Article 11 (to the extent necessary to finalize accounts) and Article 19 shall survive the termination of this Agreement.
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IN WITNESS of their agreement, each of the Parties have caused their respective duly authorized representative to sign this instrument in Tel Aviv, on March 14, 2012.
THE ISRAEL ELECTRIC CORPORATION LIMITED Name: Eli Glickman Title: President & CEO /s/ Eli Glickman Name: Harel Blinde Title: Senior Vice President & CFO /s/ Harel Blinde | | NOBLE ENERGY MEDITERRANEAN LTD. Name: Lawson Freeman Title: Vice President /s/ Lawson Freeman |
AVNER OIL EXPLORATION LIMITED PARTNERSHIP Avner Oil and Gas Limited, General Partner Name: Gideon Tadmor Title: CEO & Director /s/ Gideon Tadmor Name: Gabriel Last Title: Director /s/ Gabriel Last | DELEK DRILLING LIMITED PARTNERSHIP Delek Drilling Management (1993) Ltd., General Partner Name: Gideon Tadmor Title: Chairman /s/ Gideon Tadmor Name: Yossi Abu Title: CEO /s/ Yossi Abu |
ISRAMCO NEGEV-2 LIMITED PARTNERSHIP Isramco Oil and Gas Ltd., General Partner Name: Avi Geffen Title: CEO /s/ Avi Geffen | DOR GAS EXPLORATION LIMITED PARTNERSHIP Alon Gas Exploration Management Ltd. General Partner Name: Eli Misgav Title: CEO /s/ Eli Misgav Name: Zvi Greenfeld /s/ Zvi Greenfeld |
SCHEDULE 1
Sellers' Petroleum Rights
Petroleum Lease I/12 "Tamar" granted on December 2, 2009 pursuant to section 26 of the Petroleum Law, 5712-1952.
SCHEDULE 2
Seller’s Percentages and Sellers’ Interest
| Noble Energy Mediterranean Ltd. | | | 36.000 | % |
| Delek Drilling Limited Partnership | | | 15.625 | % |
| Avner Oil Exploration Limited Partnership | | | 15.625 | % |
| Isramco Negev2 Limited Partnership | | | 28.750 | % |
| Dor Gas Exploration Limited Partnership | | | 4.000 | % |
| Total | | | 100.000 | % |
Joint Operating Agreement dated November 16, 1999, as amended, governing Sellers' Petroleum Rights
List of Charges on Sellers' Petroleum Rights
| | 1. | Delek Drilling Limited Partnership hereby warrants and represents to the Buyer that as of the Effective Date, (**). |
| | 2. | Avner Oil Exploration Limited Partnership hereby warrants and represents to the Buyer that as of the Effective Date, (**). |
| | 3. | Dor Gas Exploration Limited Partnership hereby warrants and represents to the Buyer that as of the Effective Date, (**). |
| | 4. | Isramco Negev-2 Limited Partnership hereby warrants and represents to the Buyer that as of the Effective Date, (**). |
SCHEDULE 5
Specification for Gas Quality
Natural Gas tendered for delivery under this Agreement shall at the Delivery Point comply with the following requirements and the requirements of the Transporter as at the date of this Agreement.
| 1. | Gas made available for transport shall be free from odors, foreign materials, dust or other solid and liquids, waxes, gums and gum forming constituents. The Sellers shall furnish, install, maintain and operate such drips, separators, heaters and other devices as the Seller may deem necessary or desirable to effect compliance with this requirement |
| 2. | For the avoidance of doubt, it is agreed that the Sellers may (acting as a Reasonable and Prudent Operator) inject substances while processing the Natural Gas provided that the Sellers are able to and do, in fact, remove all of such substances prior to the Delivery Point until the gas meets the current specification. On Buyer's request, the list of treatment substances shall be made available to the Buyer. If the Sellers fail to so comply, the Buyer may at any time require the Sellers to cease injection of such substances. |
| 3. | Without prejudice to the generality of the provisions of Paragraph 1 & 2 above, gas at the Delivery Point shall conform to the parameters of Table 1. |
| 4. | Sampling: Sampling of natural gas for continuous automatic and periodic laboratory analysis shall be in accordance with ISO 10715. |
No material may be added to the stream being tested which will alter the tests results or cause the test to be non-representative of the moisture or liquefiable hydrocarbon content of the stream being tested.
| 5. | Gas Chromatography, Energy Calculations & Reports: Natural gas composition shall be continuously monitored using a gas-chromatograph measuring up to at least C6-plus and compatible with ISO 6974-5. Gas analysis shall be used for further calculations of gas mixture molecular weight, Higher Heating value, density, compressibility, energy & Wobbe Index at reference conditions and at actual line conditions (according to relevancy). Physical properties used to configure chromatographs and perform calorific value and relative density calculations shall be derived from the latest version of GPA Standard 2145/ISO 6976 |
Gas analysis shall be used for further calculations at the Metering Line Flow Computer:
| | · | Gas density at Standard Conditions shall be calculated in accordance with AGA Report No.8:1994/ISO-12213-1:1997 |
| | · | Gas density at Line Conditions shall be calculated in accordance with AGA Report No.8:1994/ISO-12213-1:1997 |
| 6. | The heating value of C6 shall be applied for all C6-plus compounds as long as laboratory measurements justify this simplicity. The Buyer shall be notified at any change. |
| 7. | Calorific value in MJ/m3 units shall be reported to the 2nd decimal. A factor of 1055.056 MJ/MMBTU shall be used for unit conversion (AGA Report No. 8 & GPA 2172). Values in MMBTU/m3 shall be reported to the 5th decimal figure. (Wobbe index shall be reported accordingly). Compression factor, density and relative density shall be reported (If required) to the 4th decimal figure. |
| 8. | Average values of continuously measured parameters in Table 1 shall be reported daily. Intermittent measurements shall be reported after completion. |
Table 1: Parameters limits
| Parameter | Requirement | Units | Methods & Remarks |
Water Dew Point (WDP) At any pressure up to and including 80 bar (g) | ≤ 0 (Zero) | ( oC ) | (a) |
Hydrocarbon Dew Point (HCDP) At any pressure up to and including 80 bar(g) | ≤ 5 | ( oC ) | (b) |
Total Sulphur (as S) | < 100 | (ppm Weight) | (c) |
Hydrogen Sulphide (as H2S) | < 5 | (ppm Volume) | (d) |
| Carbon Dioxide | ≤ 3.0 | (Mole percent) | (e) |
Total Inerts [N2+CO2+Ar] | ≤ 5.0 | (Mole percent) | (f) |
| Oxygen | ≤ 0.01 | (Mole percent) | (g) |
| Methane | ≥ 92 | (Mole percent) | (h) |
Glycol | No free liquid to be present in gas at Delivery Point | -- | (i) |
| Methanol | ≤ 100 | (ppm volume) | (j) |
Table 1 (cont.): Parameters limits
| Parameter | Requirement | Units | Methods & Remarks |
Higher Heating Value @ 15/15 oC & 101.325 Kpa | 0.03460 - 0.03950 | MMBTU/Cubic Meter | (k) |
Wobbe Index @ 15/15 oC & 101.325 Kpa | 0.04620 - 0.05090 | MMBTU/Cubic Meter | (l) |
| Supplied gas temperature | 5 – 38 But at least 10.0 oC above the actual WDP at least 5.0 oC above the actual HCDP and at least 10.0 oC at the PRMS Eshkol inlet | ( oC ) | -- |
Pressure | 60-80 Seller shall supply sufficient pressure to allow nominated gas volumes to enter the INGL, transportation system, subject to the maximum pressure not exceeding 80 bar at the Delivery Point. | bar(a) | -- |
Methods & Remarks
a) Water Dew Point (WDP)
Moisture shall be measured continuously according to ASTM D 5454 - using a water concentration analyzer. The sensor should operate at a fixed controlled temperature greater than the maximum gas stream temperature. The gas sample stream should operate at a controlled pressure no greater than 3 bar (g). Calculation of WDP from the measured water concentration shall be based on equations (or commercial calculators) which produce results that are in agreement with the data given in table C.1 of appendix C to ISO 18543:2004; Natural gas — Correlation between water content and water dew point. Direct measurement of WDP according to ISO 6327-1981 (E) is permitted. Manual measurement according to ASTM D 1142 (chilled mirror) shall be the reference method.
b) Hydrocarbon Dew Point (HCDP)
HCDP shall be measured continuously by a chilled mirror instrument working in pressure ranges of 28 ± 3 bar(g), capable of measuring HCDP up to +20 deg C. Manual measurement according to ASTM D 1142 shall be the reference method.
Gas chromatographic laboratory analysis complying with ISO 23874 (and measuring until C12) may serve for research purposes.
c) Total Sulfur and Sulfur species.
Total Sulfur shall be analyzed quarterly in a certified laboratory during the first year of supply. Sulfur species concentrations shall be identified and compared with the concentration of total sulfur. After typical values are determined and no corrosive sulfur is present - then the frequency can be lowered (twice a year in the second year and annually afterwards).
If, however, concentrations greater than 6 mg/m3 of COS or RHS or any corrosive sulfur species (as S) shall be found at any time then total Sulfur shall be measured continuously using an ASTM standard (ASTM D7493 or ASTM D7165 – 10).
A full laboratory Sulfur species analysis shall be performed with any significant change of gas quality.
d) Hydrogen Sulphide
H2S shall be continuously monitored by automatic instruments complying with ASTM D4084 (Lead acetate reaction rate method).
e, f & g) Oxygen and Total Inerts (N2+CO2+Ar)
N2, O2, Ar & CO2 shall be continuously measured by a GC with a lower detection limit not greater 0.005 % mole, using Helium as a carrier and a suitable column to split N2 and O2.
The limiting value for Oxygen in Table 1 is required during normal operations. Higher values are allowed during commissioning of new pipelines. Such values and durations of irregularity shall be agreed upon by all parties before commissioning.
h) Methane
Methane (and all typical natural gas components) shall be continuously monitored by GC according to ISO 6974-5. The limiting values of Table 1 are valid for the normal routine.
i) Glycol
No free liquid glycol shall be detected while determining the water and/or hydrocarbon dew point using the Bureau of Mines/chilled mirror device.
j) Methanol
Analysis for methanol content will only be required during periods when methanol is being injected for operational reasons. Buyer will be advised when used. Methanol content will be determined using a mutually agreed procedure. .
k) Higher Heating Value
Higher Heating Value - means the superior calorific value calculated as described in ISO: 6976:1995 (E) of one Cubic Meter of Natural Gas at the reference condition of 15/15 Degrees Celsius and 1.01325 Bar(a) for the actual natural gas in the real state. Full precision, definitive mode shall be used.
l) Wobbe Index
Wobbe Index shall be calculated according to ISO: 6976:1995 (E) at the reference condition of 15/15 Degrees Celsius and 1.01325 Bar (a) for the actual natural gas in the real state.
SCHEDULE 5
Specification for Measurement
Measurements Codes & Specifications
Measuring devices shall be installed in accordance with the latest edition (at the time of installation) of American Gas Association standards AGA 7, AGA 8, AGA 9, AGA 10, and API 21.1. Chemical analyses shall be performed in accordance with ASTM, GPA or ISO/European equivalent mentioned in this document.
Measurement System
1. The measurement system shall be designed with sufficient redundancy (3x50 %) such that the failure of a single meter run does not shut down the whole measurement system. Each of these meter runs shall incorporate a single turbine meter and a single multipath ultrasonic meter in series in full compliance with above listed standards.
Double block and bleed valves shall be provided upstream and downstream of each meter run to allow switching from one run to another without compromising measurement performance and to ensure no gas bypasses the intended meter runs.
2. Each custody transfer meter run shall also include adequate flow conditioning meeting manufacturers' recommendations and the recommendations of the appropriate AGA standard. Flow conditioning must also eliminate the possibility of one meter affecting the performance of the other meter in series.
3. Each measurement system shall include an on-stream analyzer (gas chromatograph) and its associated sampling, calibration and carrier gas equipment. Where significant ultrasonic noise exists, “U” shaped piping shall be included upstream and downstream of the ultrasonic meter to isolate the meter from the noise.
“Significant” noise shall be as defined in AGA Report No. 9, meaning noise levels sufficient to degrade meter performance significantly.
4. The primary components of the metering system, turbine meter, and ultrasonic meter, flow computer and gas chromatograph, should have approval for custody transfer by Nederlands Meetinstituut (NMi) or equivalent
5 The entire system must meet appropriate standards reflecting the area classification for the skid location, but Class 1 Group D Division II at a minimum.
6. The meters should be operated within the manufacturers recommended specific flow range and operating conditions to achieve the desired accuracy and normal life time.
7. The Sellers shall submit lists of selected equipment, drawings, standards and certifications of the selected equipment for measuring at the delivery points.
8. Seller shall nominate which volume metering device is to be utilised as the primary device (for custody transfer) and which device is to be utilised as the secondary (check) device.
9. Total measurement uncertainty of energy shall be +/-1% and shall be calculated according to ISO 5168.
The seller shall demonstrate that the metering system meets the agreed upon total uncertainty and the individual total uncertainties of the separate components.
1. Each meter shall be flow certified prior to final delivery to Israel by an internationally recognized flow facility. During certification, the entire engineered meter run assembly shall be certified, at high pressure, in the exact configuration as the final installed configuration.
The Sellers shall invite the Buyer and the Transporter to witness onsite calibrations and/or verification of measurements by giving seven days notice, and shall make necessary arrangements for the participation of the Buyer/ Transporter or their formal representative. Buyer and Transporter will be responsible for all costs associated with the attendance of their personnel or representatives.
2. Once in normal operation, turbine meters will need to be recertified whenever their performance is suspect, whenever they fail spin tests or whenever they have been repaired. Ultrasonic meters are not generally recertified unless internal physical dimensions or transducer types are altered.
3. The results of the flow certifications and instrument calibrations shall be available upon request, together with a statement of conditions under which the calibration took place.
| Ultrasonic meters | Not required unless internal dimensions and/or transducer type changes |
| Spin tests for turbine meters | Not required unless the comparison between the Ultrasonic and Turbine meters exceeds ½% and no other solution can be identified. |
| Turbine meters proving | Not required when in series with USM |
Flow tests at traceable flow labs (turbine meters) | Every 16 years |
| Flow computers | Quarterly |
| Pressure and Temperature Measuring Device | Quarterly |
| Difference between ultrasonic meter and the turbine meter in series | Collected continuously & reported quarterly. Difference of greater than 1/2% shall be reported within 7 days, differences greater than 1% will also require a plan for remediation to be submitted by the Seller’ |
Gas chromatographs | Daily - By local automatic reference gas mixture. Quarterly - By analysis of a reference gas mixture (not in current use as calibration). All reference gas mixtures shall be certified by an accredited calibration laboratory. |
| Moisture analyzer | Monthly |
| HCDP analyzer | Monthly |
H2S analyzer | Monthly |
4. Calibration procedures shall be updated for new installation and transmitted to the Buyer and the Transporter. A report shall be sent to the Buyer and the Transporter following every calibration.
Requirements for Off-Line measurements
1. Verification of the accuracy of online chemical parameter measurements (from which physical property are determined) shall be carried out according to the instructions of the instrument's manufacturers. Where such instructions are missing or where they are found to be not sufficient, then by means of laboratory analysis of samples taken at appropriate time intervals and at least Quarterly (and where statutory requirements exist according to such requirements). In the event of discrepancy between the online facilities and the laboratory analysis, the measurement equipment shall be recalibrated. Shippers, Sellers and Transporters shall be notified should the discrepancy force a change in future or previous calculations of +/- 1/4% or greater.
SCHEDULE 6
CORPORATE GUARANTEE
(date)
The Israel Electric Corporation Limited
…………………………………………
…………………………………………
| 1. | At the request of [Dor Gas Exploration Limited Partnership] ("Debtor") we Alon Natural Gas Exploration Ltd. ("the Guarantor") hereby unconditionally and irrevocably guarantee the payment to the Israel Electric Corporation Limited ("IEC") of all amounts which the Debtor owes to IEC pursuant to the Gas Sale and Purchase Agreement dated [insert date] between the Debtor and others and IEC ("GSPA"), up to the total sum of [insert amount] in the aggregate (“Guarantee Amount") including without limitation amounts payable pursuant to the GSPA as damages in the event of a breach by the Debtor of any obligation under the GSPA. We confirm that we are familiar with the terms of the GSPA. |
| 2. | Accordingly, we hereby undertake to pay IEC within seven (7) banking days any amount, not exceeding in the aggregate the Guarantee Amount, due to IEC from the Debtor pursuant to the GSPA which IEC claims from us from time to time, but prior to the Expiry Time, by written demand substantially in the form set out in Appendix A ("Payment Demand"). Except for the Payment Demand, IEC will not be required to provide any proof or other justification to its claim hereunder or to substantiate its demand in any way nor will it be required to first seek payment of the amount claimed from the Debtor or any other person. |
| 3. | The obligations and liability of the Guarantor hereunder shall in no way be discharged, impaired or otherwise affected by the following (without limitation): |
| | a. | any amendment to the GSPA, or any compromise, variation, total or partial release, discharge or waiver of any obligations under the GSPA (save, for the removal of doubt, the right to assert any defense which may be available to Debtor); |
| | b. | failure to make prior demand on the Debtor or any other guarantors or to proceed against the Debtor in any legal, judicial or arbitral forum or failure to enforce or seek to enforce any other security taken in respect of the Debtor’s obligations under the GSPA, before proceeding against the Guarantor to enforce or collect under this Guarantee; |
| | c. | bankruptcy, insolvency, merger, administration, reorganization, liquidation, arrangement with creditors or any similar act, event or proceedings affecting the Debtor, or any change in Debtor’s status, function, control or ownership; |
| | d. | arrangements entered into between IEC and any other creditors of the Debtor; |
| | e. | failure by IEC to give notice to the Guarantor of the occurrence of any of the events detailed in this clause 3; or |
| | f. | any failure to realize or fully to realize the value of, or any release, discharge, exchange or substitution of, any security taken in respect of Debtor’s obligations under the GSPA. |
| 4. | Without derogating from any other provisions of this guarantee which exclude the application of, or constitute a waiver by the Guarantor, of certain defenses or rights under the Israel Guarantee Law, 1967 (“the Guarantee Law”) (which defenses or rights would, but for such provision, have been available to the Guarantor), the Guarantor hereby waives all rights and defenses under the Guarantee Law (save, for the removal of doubt, the right to assert any defense which may be available to Debtor under the GSPA) and confirms that the provisions of the Guarantee Law affording such rights or defenses to a guarantor shall not apply to this guarantee. |
Notwithstanding anything to the contrary or otherwise contained in this Guaranty, it is hereby expressly stipulated that the Guarantor's total liability hereunder shall be subject to the limitations of liabilities applicable to the Debtor included in Article Article 17 of the GSPA.
| 5. | This Guarantee shall not be terminated by the dissolution, merger, reorganization or consolidation of the Guarantor, or the sale of any assets of the Guarantor, but shall be binding upon it and its successors and shall inure to the benefit of IEC and its successors. |
| 6. | The Guarantor represents and undertakes that: |
| | a. | the execution, delivery and performance of this Guarantee by the Guarantor will not cause the Guarantor to be in breach of or default under any law it is subject to, or under any agreement binding on it or any of its assets and no material litigation or administrative proceeding before, by or of any court or governmental authority is pending or (so far as the Guarantor is aware) threatened against it or any of its assets; |
| | b. | the Guarantor is a company limited by shares, duly incorporated under the laws of the State of Israel with power to enter into this Guarantee and to exercise its rights and perform its obligations hereunder and all corporate and other actions required to authorize its execution of this Guarantee and the performance by it of its obligations hereunder have duly been taken; |
| | c. | the obligations of the Guarantor under this Guarantee are legal and valid obligations binding on the Guarantor and enforceable in accordance with the terms hereof; |
| | d. | the entering into of this Guarantee by the Guarantor and the exercise of the Guarantor’s rights and performance of the Guarantor’s obligations hereunder do not and will not: (a) conflict with any agreement, charge or other instrument or document to which it is a party or which is binding upon it or any of its assets, (b) conflict with its documents of incorporation or constitutive documents, or (c) conflict with any applicable law, regulation or official judicial order; |
| 7. | This Guarantee is not assignable or transferable by Guarantor or IEC except together with an assignment of the GSPA and in accordance with its terms. In the event of Assignment of Buyer's rights and obligations in accordance with the provisions of the GSPA, this Guarantee will inure to the benefit of said permitted assignees of Buyer. |
| 8 | This Guarantee shall be binding upon and inure solely to the benefit of IEC or its assignees under section 7 above, and nothing in this Guarantee, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Guarantee. |
| 9. | This Guarantee shall be governed by Israeli Law and the courts of Israel shall have exclusive jurisdiction in all matters arising therefrom and the Guarantor hereby submits irrevocably to the jurisdiction of the said courts. |
| 10. | This Guarantee constitutes the entire agreement between the parties and supersedes and replaces any prior written or oral agreement, representations or undertaking between them relating to the subject matter of this Guarantee. Any addition or amendment to this Guarantee shall not be effective unless in writing and signed by the Parties’ authorized signatories. |
| 11. | This Guarantee shall remain in force from the date hereof until noon on [--] ("Expiry Time"), whereupon this Guarantee shall expire and become null and void and have no further force or effect. Any Payment Demand must be delivered to Guarantor at the above address of our branch, by not later than the Expiry Time. Any Payment Demand submitted to us after the Expiry Time will not be entertained. For the removal of doubt, notwithstanding anything to the contrary in this Article 11, in event that a Payment Demand is submitted prior to the Expiry Time, this guarantee shall remain in full force and effect in respect of such Payment Demand. |
IN WITNESS WHEREOF, Signed in ____ this __ day of _____ in the year ______
(parent)
Appendix A
Form of Payment Demand
THE ISRAEL ELECTRIC CORPORATION LIMITED
Messrs.
………..[the Guarantor]……..
…………………………
Re: Payment Demand pursuant to your Guarantee
No. …..……… (the "Guarantee") dated ………………
I THE UNDERSIGNED the Chief Executive Officer [or Chief Financial Officer], of Israel Electric Corporation Limited (“IEC”) hereby demand payment on behalf of IEC of the sum of ___________ US Dollars (US$ _________) under the above Guarantee.
I hereby confirm and certify that –
| (i) | the above amount claimed by IEC in this Payment Demand is due and payable to IEC by the Debtor under the Gas Sale and Purchase Agreement dated [--] between the Debtor and others and IEC (the “GSPA”); and |
| (ii) | IEC has given the Debtor not less than fourteen (14) days written notice of its intention to demand payment of the above amount under the Guarantee in accordance with Article 20.1.3 of the GSPA. |
SIGNED, this ____ day of _________, in the year _________
By: _____________________________________________
CEO / CFO of the Israel Electric Corporation Limited
SCHEDULE 7
Form of Bank Guarantee
(bank)
(date)
The Israel Electric Corporation Limited
…………………………………………
…………………………………………
Gentlemen:
Bank Guarantee No. ………………….
1. At the request of [[Dor Gas Exploration Limited Partnership] ("Debtor") we hereby unconditionally and irrevocably guarantee the payment to The Israel Electric Corporation Limited ("IEC") of all amounts which the Debtor owes to IEC pursuant to the Gas Sale and Purchase Agreement dated [insert Date] between the Debtor and others and IEC ("GSPA"), up to the total sum of [insert Amount] in the aggregate (“Guarantee Amount").
2. Accordingly, we hereby undertake to pay IEC within [seven (7)] banking days any amount, not exceeding in the aggregate the Guarantee Amount, which IEC claims from us from time to time, but prior to the Expiry Time, by written demand substantially in the form set out in Appendix A ("Payment Demand"). Except for the Payment Demand, IEC will not be required to provide any proof or other justification to its claim hereunder or to substantiate its demand in any way nor will it be required to first seek payment of the amount claimed from the Debtor or any other person.
3. This Guarantee is not assignable or transferable.
4. This Guarantee shall be governed by Israeli Law and the courts of Israel shall have exclusive jurisdiction in all matters arising therefrom.
5. This Guarantee shall remain in force from the date hereof until noon on [_________] ("Expiry Time"), whereupon this Guarantee shall expire and become null and void and have no further force or effect. Any Payment Demand must be delivered to us at the above address of our branch, by not later than the Expiry Time. Any Payment Demand submitted to us after the Expiry Time will not be entertained.
IN WITNESS WHEREOF, Signed in ____ this __ day of _____ in the year ______
(bank)
Appendix A
Form of Payment Demand
THE ISRAEL ELECTRIC CORPORATION LIMITED
Messrs.
………..[the bank]……..
…………………………
Re: Payment Demand pursuant to your Bank Guarantee
No. …..……… (the "Guarantee") dated ………………
I THE UNDERSIGNED the Chief Executive Officer [or Chief Financial Officer], of Israel Electric Corporation Limited (“IEC”) hereby demand payment on behalf of IEC of the sum of ___________ US Dollars (US$ _________) under the above Guarantee.
I hereby confirm and certify that –
(i) the above amount claimed by IEC in this Payment Demand is undisputed and is due and payable to IEC by the Debtor under the Gas Sale and Purchase Agreement dated [Insert Date] between the Debtor and others and IEC (the “GSPA”), or has been determined as due to IEC pursuant to Article 19 of the GSPA, and is unpaid as of the time that this Payment Demand is delivered to you; and
(ii) IEC has given the Debtor not less than seven (7) days written notice of its intention to demand payment of the above amount under the Guarantee in accordance with Article 20.1.5 of the GSPA.
SIGNED, this ____ day of _________, in the year _________
By: _____________________________________________
CEO / CFO of The Israel Electric Corporation Limited
SCHEDULE 8
Form of Letter of Credit
SAMPLE
THE ISRAEL ELECTRIC CORPORATION LIMITED
(full address)
DEAR SIRS,
RE: IRREVOCABLE STANDBY LETTER OF CREDIT NO. (insert number)
AT THE REQUEST OF [DOR GAS EXPLORATION LIMITED PARTNERSHIP] (“DEBTOR”) WE, (full name and address of issuing bank), HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO……. IN YOUR FAVOUR TO GUARANTEE THE PAYMENT TO THE ISRAEL ELECTRIC CORPORATION LIMITED (‘IEC”) OF ALL AMOUNTS WHICH THE DEBTOR OWES TO IEC PURSUANT TO THE GAS SALE AND PURCHASE AGREEMENT DATED [insert date] BETWEEN THE DEBTOR AND OTHERS AND IEC (“GSPA”), UP TO THE TOTAL SUM OF [USD ___________] (US DOLLARS _________ MILLION) IN THE AGGREGATE (“GUARANTEE AMOUNT”).
ACCORDINGLY, WE (full name of issuing bank), HEREBY UNDERTAKE TO PAY IEC WITHIN FOURTEEN (14) BANKING DAYS ANY AMOUNT, NOT EXCEEDING IN THE AGGREGATE THE GUARANTEE AMOUNT, WHICH IEC CLAIMS FROM US FROM TIME TO TIME, BUT PRIOR TO THE EXPIRY TIME, BY WRITTEN DEMAND AS FOLLOWS:
QUOTE
THE ISRAEL ELECTRIC CORPORATION LIMITED
SRS.
___________(Full name and address of the issuing bank)
RE: PAYMENY DEMAND PURSUANT TO YOUR STANDBY LETTER OF
CREDIT NO… DATED…
I THE UNDERSIGNED THE CHIEF EXECUTIVE OFFICER (OR CHIEF FINANCIAL OFFICER), OF THE ISRAEL ELECTRIC CORPORATION LIMITED (“IEC”) HEREBY DEMAND PAYMENT ON BEHALF OF IEC OF THE SUM OF US DOLLARS (US $……………….) UNDER THE ABOVE STANDBY LETTER OF CREDIT.
I HEREBY CONFIRM AND CERTIFY THAT –
(I) THE ABOVE AMOUNT CLAIMED BY IEC IN THIS PAYMENT DEMAND IS UNDISPUTED AND IS DUE AND PAYABLE TO IEC BY [DOR GAS EXPLORATION LIMITED PARTNERSHIP] (the “DEBTOR”) UNDER THE GAS SALE AND PURCHASE AGREEMENT DATED [insert date] BETWEEN THE DEBTOR AND OTHERS AND IEC (“GSPA”), OR HAS BEEN DETERMINED AS DUE TO IEC PURSUANT TO ARTICLE 19 OF THE GSPA, AND IS UNPAID AS OF THE TIME THAT THIS PAYMENT DEMAND IS DELIVERED TO YOU; AND THAT
(II) IEC HAS GIVEN THE DEBTOR NOT LESS THAN SEVEN (7) DAYS WRITTEN NOTICE OF ITS INTENTION TO DEMAND PAYMENT OF THE ABOVE AMOUNT UNDER THE STANDBY LETTER OF CREDIT IN ACCORDANCE WITH ARTICLE 20.1.5 OF THE GSPA.
SIGNED, THIS_____ DAY OF_____, IN THE YEAR_____
BY: __________________________________________________________
CEO/CFO OF THE ISRAEL ELECTRIC CORPORATION LIMITED
END QUOTE
EXCEPT FOR THE PAYMENT DEMAND IEC WILL NOT BE REQUIRED TO PROVIDE ANY PROOF OR OTHER JUSTIFICATION TO ITS CLAIM HEREUNDER OR TO SUBSTANTIATE ITS DEMAND IN ANY WAY NOR WILL IT BE REQUIRED TO FIRST SEEK PAYMENT OF THE AMOUNT CLAIMED FROM THE DEBTOR OR ANY OTHER PERSON.
THIS STANDBY LETTER OF CREDIT IS NEITHER ASSIGNABLE NOR TRANSFERABLE.
THIS STANDBY LETTER OF CREDIT IS SUBJECT TO UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION) INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500.
THIS STANDBY LETTER OF CREDIT IS AVAILABLE WITH US AND SHALL REMAIN IN FORCE FROM THE DATE HEREOF UNTIL NOON ON (insert validity date) (“EXPIRY TIME”), WHEREUPON THIS STANDBY LETTER OF CREDIT SHALL EXPIRE AND BECOME NULL AND VOID AND HAVE NO FURTHER FORCE OR EFFECT WHETHER OR NOT THIS INSTRUMENT HAS BEEN RETURNED TO US FOR CANCELLATION. ANY PAYMENT DEMAND MUST BE DELIVERED TO US AT THE ABOVE ADDRESS OF OUR BRANCH, BY NOT LATER THAN THE EXPIRY TIME. ANY PAYMENT DEMAND SUBMITTED TO US AFTER THE EXPIRY TIME WILL NOT BE ENTERTAINED.
SCHEDULE 9
ASHDOD DELIVERY POINT DIAGRAM
(**)
SCHEDULE 10
FORM OF BUYER'S CONSENT
(**)
