Po$rERSAr.

BsCorrnecr

between

I(3PCO SFC Powrn ConPoffAnor

&rd

BOIIOL TIGHT CO}TPANY INC.

trk

tf
 This PowDn SALES Co TBAm (the "PSC") is executed and entered into this _6 day of
by and between:

I(EPCO SPC PowER ConPon TroN, a corporation duly organized and existing
under and by virtue of the laws ofthe Republic of the Philippines with principal
office address at the 76 Floor, Cebu Holdings Center, Cebu Business Park, Cebu
City, Philippines, represented herein by its President and Chief Executive Officer,
CHOI BONG ,OO, hereinafter referred to as the 'Seller';

-and-

BOHOL LIGHT COMPANY INC, [BLCI), a franchised distribution utility duly

organized and existing under and by virtue of the laws of the Republic of tJle
Philippines with principal office address at Ramon Enerio Street, Tagbilaran City,
Bohol, Philippines, represented herein by its Presidenb DENNTS T. VILLAREAL,
hereinafter referred to as the "Buyer".

The Seller and the Buyer are at times individually referred to herein as a 'Party'
and collectively, as the "Pardes."

RECITALS
WHEREAS, the Buyer is a duly franchised Distribution Utility engaged in the distribution of
elect'icity with its hanchise area in the Visayas, Philippines.

I
W|IEREAS,the Seller constructed, owns, and maintains a 2x100 MW Circulating Fluidized Bed
Combustor (CFBC) Boiler Coal-Fired base load power plant in the City of Naga, Cebu, which
became operational by the year 2011,

WHEnEAS, the Buyer wishes to buy electric enerry from the Seller, and the Seller desires to
deliver such electricity to the Buyer, under the terms and conditions specified herein.

Now, THEnEFonE, in view of the foregoing premises, the Parties agree as follows:

ARTICLE 1 - DEFINITIONS AND INTERPRETATION

1.1 Definitions.

The following terms, when used in this PSC, shall have the following meanings:

"Allowed Forced Outage' means in respect of each of Unit 1 and Unit 2, a total of 28 days
(equivalent to 1,680,000 kwh) of Forced outage to which the Seller shall be entitled in any
Contract Year.

"Anclllary Servlces" means those services defined in Section 1.4 of ERC Order dated October 11,
2006 in ERC Case No. 2006-049 RC.

"Appltcable lanrf means [i) the Philippine Consutution, (ii) all laws, statutes, Eeaties, rules,
codes, ordinances, regulafions, certificates, decisions, orders, memoranda, circulars, decrees,
resolutions. directives, rulings, interpr€tations, approvals, licenses, and permits of any
Governmental Authority (including any legislative franchise granted to the Buyer), (iii)
iudgm.ents, decrees, injunctions, writs, orders or like actions of any court, arbitrator or other
administrative, judicial or quasi-judicial tribunal or agency that are binding on a Party as they
t
7
t-1,
I
 may be amended, supplemented, replaced or reinterpretd by a duly authorized Governmental
Authority or otherwise modified from time to time.

"Bllateral Conu?ct Quandqtt' means the amount of eners/ nominated or submitted to the
Market Operator pursuant to Article 6.2.1[b)(ii) (Dispatch - During the Opemtion of the WESM)
by the Seller, which shall be equivalent to the amount of Final HCQ reduced by such amounts of
energl to be determined by the Seller, in its sole discredo& consisting of enerry not delivered
by the Seller or taken by the Buyer due to Force Maieure.

"Bllllng Month'means the period beginning Effective Date on the 26tt'day of a calendar month
and ending on the 25tt day of the succeeding calendar month; Wyidell that the last Billing
Month shall be the period beginning on the 26d, day of the calendar month preceding the
Scheduled Termination Date and ending on the Scheduled Termination Date.

"Buyer" has the meaning set fortl in the preamble.

"Buyer Events of Default' has the meaning set forth in Article 12.2 (Buyer Evena of Default).

"Cebu Power Plan4 means the 2x100 MW Circulating Fluidized Bed Combustor (CFBC) Boiler
Coal-Fired base load power plant in t}re City of Naga, Cebu, including all assoclated equipment
i and accessories to be installed therein,

'CFR' means, with respect to a destination port, "Cost and Freight" as defined under
INCOTERMS 2010.

"Change ln Clrornstance" means the changes set out in Article 7.6 (Change ln Circumstances).

"Coal Refercnce Price" or 'CRP| means a coal price, including any and/or all price changes,
imposable taxes, fees, imposts, charges, othe$ associated costs, as required by the MEMR of
lndonesia or any other government authority of any country affecting t]le Selle/s coal supply
contracts.

"Commerclal Operadons Date" means with respect to Unit 1, February 28, 20ll and with
respect to Unit 2,May 37,2017.

^Condidons Precedenf means the conditions specified in Article 3.1 (Effectiveness; Efective
Dau).

"Conracf means this Power Sales Contracq including all annexes hereto, as may hereafter be
amended or supplemented from time to time in accordance with the provisions of tlis ConEact

'Confact QuaBdV' has the meaning set forth in Articl e 6.1[a) (Contract Quantity).

"Confact Yeat' means any successive 12-month period commencing on the Effective Date;
plgidgd-hgweygL that if the PSC terminates before the end of any such 12-month period, t]le
Contract Year with respect to such period shall mean that period commencing on the day
immediately succeeding the end of the immediately preceding Contract Year and ending on such
termination date.

I "Dispute" has the meaning set forth in Article 17.1 (Amicoble Settlement).

"IXstrlbudon Gode" means the rules governing the construction, operation and maintenance of
disribution systems promulgated by the ERC in ERC Resolution No. 115 dated December 2001,
and its amendments.

fiw
)
 "Dollars" and the symbol '$" mean the lawful currency of the United States of America.

"Effeclive Date" has the meaning set forth in Ardcl e 3.1 (Effectiveness; Effective Date).

"EPC Contmcd means the cont?ct for the engineering, procurement and construction of the
I
Cebu Power Plang to wiB (a) tlle Construction Contract dated December 10, 2007 by and
between the Seller and Doosan Heary Industries & Consruc6on Company Ltd., (b) the
Equipment Supply Contmct dated December lO, Z0O7 between the Seller and Doosan Heavy
Industries & Construction Co., Ltd., and (c) the Supplemental Agreement dated December 10,
2007 between Seller and Doosan Heary Industries & Construction ComPany Ltd.

"ERG" means the Energr Regulatory Commission of the Republic of the Philippines, or its
successor agency.

"Flnal HCQ" means: (i) the HCQ submitted and confirmed by the Buyer to the Seller pursuant to
Article 6.2.1[a)(i) or 5.2.1(a)(iv) {Dispotch - During the 0peration of the WESM), as such HCQ
may be revised by the Buyer pursuant to Articles 6.2.1(a)(ii) (Disparch - During the Opemtion of
t the WESM) or 6.2.1(a)(iii) (Dispauh - During the Operotion of the WESM). (ii) the HCQ reduced
by the actual undeliyered enerry in the event ofForced Outage and Planned Outage.

"Flrst Delivery llate" has the meaning given to that term in the coal supply contracts entered
into by the Seller with its coal suppliers; plQyitrlg4 that where there are different First Delivery
Dates under such coal supply contracts, the latest of such dates shall be the First Delivery Date
for purposes of the PSC.
I

"Force Maieure' means an event or occurrence specified in Article l1,L Unstances of Force
Majeure).

"Forced Outage" means the inability of the Cebu Power Plant to supply power in accordance
with the PSC, whether due to unplanned partial or total plant shutdown for reasons other than
Force Majeure or any event, occulTence or circumstance affecting the Buyer or the Buyefs
facilities.

"Governmental Authorlt/means the Republic of the Philippines, any province, city,

municipality or other political subdivision, agency, authority, board, bureau, commissio& court,
departnent instrumentality of any country or any other foreigr Governmental Authority
having iurisdlction or relation over eitler of the Parties, their respective property and assets,
the performance of obligations under tJre PSC or having tJle power or authority to affect any
aspect of the PSC.

"Grid" means the high voltage backbone transmission system of the Philippines.

"Gr{d Code" means t}e rules governing the consrucHon, operation and maintenance of the Grid
promulgated by the ERC in Resolution No. 115 dated December 2001, and its amendmenb.

"HCQ" means the total energr (in kWh) and demand (in kW) requirements of the Buyer for
each hour submitted by the Buyer to the Seller on a day-ahead or week'ahead basis, pursuant to
the Grid Code or the WESM Rules.

'I(SPC Capadty Cap" means 5,0O0 kWl. proviiled, that during any period of Planned Outage, the
KSPC Capacity Cap shall be 2,500 kW.

"KSFC hce" means a flat rate of 14 .zstvkylll

k0
3
"Land Leese Agreement' means that land Lease Agreement entered into among NPC, PSALM
and SPC dated December 23, 2005.

"LllPcx" means the locational mar$nal price at generator node as defined in the WESM Rules.

"llarket Operator" means the entity designated as the market operator of the WESM and
tasked to administer the operation of the WESM in accordance with Republic Act No. 9136 and
the WESM Rules.

"Metertng SeMce Provlde/ has t}le meaning set forth in Article lO.4 (Meter Tesa).

"MfnlrEy of Energy atrd Mlneral Resourtes- or "MEMP means t}te political subdivision,
agency, board, bureau, commission, departmenq instrumentality or Governmental Authority in
Indonesia, having jurisdiction over the coal supply amngements between the Seller and its coal
suppliers and tJre performance of their respective obligations under said coal supply
arrangements, or any otler successor Governmental Authority having the same jurisdiction or
exercising the same powers;

"Monthly Paymen(, has the meaning set forth in Arti cle 7 .2(a) (Monthly Payment).

"NGCP" means the National Grid Corporation ofthe Philippines or its successors and assigrs.

"Nodce of Buyer Defauld has the meaning set forth in Article L2.4 (Remedies ofthe Seller upon
the Occun'ence of a Buyer Event of Defuult).

"Nodce of Seller DehulC' has t}le meaning set forth in Afiicle t2.3 {Remedies of the Buyer uryn
the Occurrence of a Seller Event of Defau$.

'llPrC' means the NaHonal Power Corporation or its successor agency or successor generating
companies.

"OATS Rules" shall mean the Rules, Terms and Conditions for the Provision of Open Access
Transmission Sewice promulgated by the ERC in ERC Case No. 2002-253, as amended.

'Party" and "Pardes" have the meaning set forth in the preamble.

"Payment Due Date" has the meaning set forth in Article 7.4{a) (Payment Due Date; Overdue
Charges).

"Person" means an individual, parbership, corporation, business trust, ioint stock company,
trust, unincorporated associatiorl ioint venture, Governmental Authority, limited liability
company or other entity having legal personality.

"Pesos" and the symbol "Il mean the lawful currenry ofthe Philippines.

"Planned Outage" means, in respect of Unit 1 and Unit 2, a total of 80 days (equivalent to
4,800,000 kWh) for every Contract Year allowed to the Seller to undertake the normal
inspection, maintenance, repair and overhaul of the Cebu Power Plant; orovided. that only one
Unit shall be under Planned Outage at any one time.

"Prolecf' means t}le design, engineering development, consh'uGion, completion, testing

commissioning financing, operation and maintenance of the Cebu Power Plant and all activities
related or incidental thereto.

l*l{
4
 "PSALM' means the Power Sector Assets and Liabillties Management Corporation, or its
successors and assigns.

"PSC' means tie Power Sales ConEac! including all annexes hereto as may hereafter be
amended or supplemented from time to dme in accordance with the provisions ofthis Contract

"Recelvlng Point' has the meaning set forth in Arti cle 5.7 (ReceMng Point).

'Scheduted Termlnatson Date" means (i) the date which is ten (10) years after the Effective
Date of PSC, or (ii) such later date as may be allowed in accordance with Article 11.3 (Exunded
Force Majeure Evert), or (iii) should the PSC be otherwise earlier terminated in accordance wit}
the terms hereof, the date on which the PSC is so earlier terminated.

"Secrrrity Deposif has the meaning set forth in Article 7.1(a) (Security Deposit).

"Seller Events of Default' has the meaning set forth in Article L2.l (Seller EvenB of
Default)."Slte" means that certain parcel of land located in the City of Naga, Cebu where the
Cebu Power Plant will be constructed.

"SPC" means SPC Power Corporation (formerly Salcon Power Corporation) or its successor':s or
assigns,

"Systcm Emer3ency' means any unforeseeable condition affecting the Philippine uansmission
system, which may cause (a) tJle disconnection of tJle Cebu Power Plant from such transmission
system or any disruption in the supply of electricity from the Cebu Power Plant (b) an inability
on the part of the System Operator to accept all or a portion of the elecffical generation of the
Cebu Power Plant (c) the suspension of electricity off-take from tire Cebu Power Plant in order
I
to prevent or avoid significant disruption of service to tJte Buyer's or the System Operato/s
customers or danger to life or property, or (d) any event described under Section 6.7.1 and
Section 6.7.2 of the WESM Rules, and (e) disruption of Visayas grid or transmission lines which
i hampers the delivery of Electricity to Buyer.

"Syst€B Op€rato/ means the entity tasked to operate and maintain t}le Grid pursuant to
Republic Act No. 9136 and the Grid Code.

.T-Bill Rete" means, in respect of any day for which interest based on such rate is being
I
calculated under t}te PSC fin this definition tlle "Interest Calculadon Date'), the rate per
annum at which Philippine Tr€asury Bills fwith terms of 91 days, or if no such Treasury Bill is
issued, such Treasury Bill which is issued having a term nearest to 91 days), were issued by the
Government of the Republic of the Philippines on the Wednesday immediately preceding the
InGrest Calculation Date as published in the Philippine Bureau of Treasury websitg or, if there
were no Treasury Bills issued on such Wednesday, then the last'T-Bill Rate" published during
the 60-day period preceding the Interest Calculation Date. If no such 'T-Bill Rate' is available
I

then the parties shall meet to discuss and agree on a rate but if no agreement is reached, then
t}le rate per annum certified and evidenced by the Seller to be its effective cost of borrowing at

I such time.

"Temr" has the meaning set forth in Article 3.2 (Ierm).

i "Transmlsslon Costs" means all fees, costs and expenses for t}te transmission of electricity
under the PSC, including but not limited to, power delivery services, system operator charges,
and supply and metering charges.

'TSA" has the meaning set forth in Article 5.3 (Tiansmission Services).

lfi,t/
5

t
 "UNCITRAL Altttra(on Rules" mean the Arbitration Rules of the United Nations Commission
on lnternational Trade Law as then in force.

"Unlts" means Unit 1 and Unit 2.

"Unlt 1" means tle first generating unit of the Cebu Power Plant scheduled by the Seller for
commercial operation.

"Untt 2" means t}re second generating unit of tJre Cebu Power Plant scheduled by the Seller for
commercial operation.

"WESM" means the wholesale electricity spot market created in accordance with Republic Act
No.9136.

"WESM Rules" means the rules and rcgulations promulgated by the Departlent of Energy
governing the establishment and operation of the WESM and amendments t}ereto, including
guidelines, manuals, procedures and rules issued by the entity operating the WESM.
t
L.2 Interpretation.

I
Unless the context otherwise requires -
[a) words denoting the singular number shall include the plural and wce verso.

tb) all references to Applicable [.aw or to a pardcular Applicable Law includes a reference to
any measures amending, supplementing or repealing any relevant Applicable Law from
time to time;

(c) all references to any contract or agfeement mean such contract or agreement and all
schedules, appendiceg exhibis and attachments ther€to es amended supplemented or
otherwise modified and in effect frDm time to time, and shall include a reference to any
document which amends, supplements or replaces ig or is entered into, made or given
pursuant to or in accordance with its terms;

(d) any reference to a person or entity includes such person or entity's permitted
successor: and assigns;

(e) tlle terms "include" and "including" shall be construed as being at all 6mes followed by
the words 'without limitadon" unless the context specifically indicates otherwisg
whether or not tJle words 'without limitation' are expressly stated in any particular
insance in the PSC; and

(D in resp€ct oftlre performance of the obligations under the PSC, references to the "Buye/
shall be deemed to include the Buyer and all of its subcontracors.

1.3 TechnicalMeaninEs.

Words not otherwise defined in this PSC that have well tnown and generally accepted technical
or rade meanings are used herein in accordance with such recogaized meanings. Unless
otherwise agreed b by the Parties, all units of measurement shall be stated in the metric unit (SI)
system.

t
lrrrl

6
7,4 Headings: Article References.

Articte headings are for convenience of reference only, do not form part of this PSC and shall not
be deemed to limit or otherwise affect any of the provisions hereofl References to Articles,
paragraph+ annexes and schedules, unless otherwise indicated, are references to Articles,
paragraphs, annexes and schedules of t}tis PSC.

1.5 Precedence,

(a) In case of conflict between provisions of the Articles and the Annexes of this PSC, the
Articles shall take precedence in t}le construcdon and interpretation ofsuch provisions.

(b) Subiect to the foregoingifany requirements specified in any Article conflict with those
of any other Articlg or if any requirements specified in any Annex conflict with any
otler requirements in such Anne+ the more detailed requirements shall prevail,
Notwithstanding the above, the provisions of tJris PSC, including all Annexes shall be as
far as reasonably practicable, construed as complementary rather than conflicting.

ARTICLE 2. NEPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties ofthe Buyer.

The Buyer hereby represents and warrants to tlre Seller as follows:

(a) The Buyer is a distribution utility organized, validly existing, in good standing and
qualified to engage in the distribution of electricity under Philippine laws and possesses
all the requisite power and authority to enter into and perform and carry out all its
covenants and obligations under and pursuant to this PSC.

tb) The exeortion, delivery and per{ormance by the Buyer of this PSC have been duly
approved and authorized by all necessary corporate actions on the part of the Buyer,
and this PSC has been duly executed and delivered by the Buyer and constitutes its legal,
valid and binding obligatioq enforceable in accordance with its terms.

G) The execution, delivery and performance by the Buyer ofthis PSC will not result in any
breach of. or constitute a default under, any agreemeng contract or instrument to which
it is a party or by which it or its properties may be bound or affected.

(d) No suiq action or arbilation or other legal, administrative or other proceeding is

pending or has been tJrreatened against the Buyer that could (i] affect the validity,
binding effect or enforceability of this PSC, (ii) adversely affect t}re ability of the Buyer to
fulfill its covenants and obligadons under this PSC, or (iii) have a material adverse effect
on tlte condidon, financial or otherwise, business or operadons ofthe Buyer.

2,2 Representations and Warranties ofthe Seller.

The Seller hereby represents and warrants to the Buyer as follows:

(a) The Seller is a corporation duly organized, validly edsting and qualified to engage in the
supply of electricity under Philippine laws and possesses all the requisite power and
autlority to enter into and perform and carry out all its covenants and obligations under
and pursuant to this PSC.

tb) The execution, delivery and performance by the Seller of this PSC have been duly
approved and authorized by all necessary corporate actions on the part ofthe Seller, and

ktl
 this PSC has been duly executed and delivered by the Seller and constitutes its legal,
valid and binding obligation, enforceable in accordance with its terms.
I
Ic) The execution, delivery and performance by the Seller of this PSC will not result in any
breach of, or constitute a default under, any agreement, conmct or instrument to which
it is a party or by which it or is properties may be bound or affected.
I

(d) No suit, action or arbitration or otler legal, administrative or other proceeding is

pending or has been threatened against the Seller that could (i) affect the validity,
binding effect or enforceability ofthis PSC, (ii) adversely affect the ability of the Seller to
fulfill its covenants and obligations under t}tis PSC or (iii) have a material adverse effect
on the condition, financial or otherwlse, business or operations of the Seller.

ARTICLE 3 . EFTECTIVENESS, EFFESTIVE I'ATE /IND TEn"ltI

3.1 Effectiveness: Effective Date.

This Conract shall become effective on the date fthe "Effecdve Dat€") all of the following
conditions fthe "Co[dldom Precedenf) have been satisfied:

(a) the Parties shall have obtained their respective corporate approvals including where
necessary, the approval of the parties' respective shareholders and Board of Directors,
to enter into this Contract and to perform their respective obligations hereunder, and

(b) the ERC shall have approved this PSC, including the pricing strucnrre set out herein, and
the order approving this PSC and the pricing stmcture set out hereunder shall have
become final and not subiect to reconsideration or appeal.

The Seller shall deliver written notice to the Buyer of the satisfaction of the Condidons
Precedent and the achievement of the Effective Date.

3.2 lem.
The PSC shall be effective for a term ofTen [10) years that shall commence on the Effective Date
and end on the Scheduled Termination Date.

ARTICLE 4. GENERAL OBLIGATIONS OF THE SELLER

+.1 Deliveries of Contract quantity.

Commencing on tJte Effective Date and continuing throughout the Term, the Seller shall supply
or cause the supply to the Buyer of the Contract Quantity upon the terms and subject to t}le
conditions set out in the PSC.

4.2 ElectricalCharacterisdcs.

The Contract Quantity shall meet t}le electricity characteris6cs requirements set out in Annex
"A."

lr//

8
 ARTICLE S . GENERAL OBLIGATIONS OF THE BTIYER

I
5.1 ERC Approval

Within seven (7) days after the execution of the PSC, the Buyer shall file with the ERC the
t necessary applications for the approval of tlte PSC and ofthe pricing structure set out in Annex
'8" (2008 Long Run Avoidable Cost (LRAC) for the Best New Entrant in the Visayas) as an
automafic generation cost pass-tlrough of the retail rates charged by the Buyer, and shall exert
its best effort to obtain such approval as promptly as practicable following the submission of
its application. The Buyer shall comply with all the applicable procedural requirements
governing such applications under the Implemen6ng Rules and Regulations of Republic Act No.
9136. This Article 5.1 (ERC Approvol) is effective upon the execution of this Contract
notwithstanding that the Conditions Precedent may not have been satisfied then.

5.2 TransmissionConnection.

Each Party shall be responsible for the connection ofits facilities to the Grid, in accordance witi
the Grid Code and the Distribution Code. Each Party shall bear its own fees, costs and expenses
incurred for such connection.

I
5.3 TransmissionServices.

The Buyer and the Seller shall, in accordance with the OATS Rules, separately enter into a
Transmission Services Agreement (TSA') with NGCP. AJI Transmission Costs shall be billed and
settled directly between NGCP and the Buyer in accordance with the OATS Rules.

5.4 Ancillary Services.

Subiect to the provisions of Article 6.6 (Forced Outoge; Allowed Outage Hours), the Buyer and
the Seller shall separately procure their respective applicable Ancillary Services from NGCP,
WESM or any alternative ancillary service providers, in accordance with Applicable Law. All
fees, costs and expenses incurred by the Buyer in connection with procuring such service shall
be for the account of fte Buyer. All fees, cosB and expenses incurred by the Seller in connection
with procuring such seMce shall be a pass-through cost to tJre Buyer.

5.5 SubstationMaintenance.

The Buyer shall, at its own cost and responsibility, install, operate and maintain such facilities
and equipment as will permit it to receive the Contract Quantity.

5.5 Buyefs Facilities.

The Buyer shall at all times maintain all of its facilities in accordance with good utility practices
and comply with all the requirements of the Disuibution Code and the Grid Code in order to
receive the Contrad Quantity or any additional enerry conEacted from the Seller under Article
6.7 (Electricity in Excess of Contra* Quantity) of this PSC. In the event of any failure of t}re Buyer
to comply with this Article 5.6 (Buyet's Facilittes), or any otler rtfusal, failure or inability of the
Buyer to accept the Contract Quantity or any enerry confacted from the Seller other than as
otherwise expressly provided in the PSC, the Buyer shall nevertheless be obligated to pay to the
Seller for such Contract Quantity or enerry contracted from the Seller,

5.7 Receiving Point

I
The Buyer shall take delivery of the Contract Quantity at the high volage side of the main
transformer of the Cebu Power Plant at 138 kV or 69 kV or 13.2kV ('Recelving Polnf). Any

9 W
 line rental such as transmission line losses and congestion charges from the Receiving Point to
the Buye/s substation shall be for t}le account ofthe Buyer.

5.8 Direct WESM Membership.

The Buyer is obligated to become a direct member of the WESM in relation to the transactions
contemplated under Article 6.2.L (Dispatch-During the Opemtion of WESM). The Buyer agrees
to file the application for and comply with all the requirements to become a direct WESM
Member on or before the Effective Date.

ARTICTE 6 - SUPPLY OF ELECTRICITY

6.1. ContractQuantity.

(a) Upon the terms and subiect to the condidons set out herein, commencing on the
Effective Date and until the Scheduled Termination Date, the Seller shall deliver or cause
the delivery to the Buyer, and the Buyer shall pay for, in each Contract Year, a minimum
number in kWh of energr ("GonEact (luandt5/) as set forth in Annex "C.'

tb) The Contract Quantity may be reduced by Force Majeure as provided in Article 11.1
(lnstances of Force Majeure).

(c) The Conts-act Quantity shall be reduced by the actual undelivered energl in the event of
Forced Outage and Planned Outage.

6.2 Dispatch.

The Parties agree on the following dispatch and nomination procedures:

6.2.1 During the Operation of the WESM

The Parties agree that the following shall be tJre nomination and dispatch procedures that will
be followed during the operation of the WESM.

(a) Responsibilities ofthe Buyer

tD The Buyer shall submit its day-ahead and week-ahead HCQ to the Seller with
I
respect to its day-ahead HCq at least one day prior to the relevant trading day,
and with respect to its week-ahead HCq at least two days prior to tJre relevant
trading week The day-ahead HCQ shall be based on the average daily conract
quantity as specified in Annex "C" and shall not exceed the I6PC Capacity Cap.
I

(iD The Buyer may submit revisions to the HCQ on a day-ahead or week-ahead basiq
provided that the HCQ shall not be revised to take into account any reduction
I
due to Force Maieure. For revisions of the day-ahead HCO the Buyer shall
submit tile notice of revisions to the Seller on or before 4:00 p.m. (or such earlier
time as the Seller may reasonably determine and confirm to the Buyer in writing)
of the day before the relevant rading day. For revisions of week-ahead HCQ t}te
notice of revisions must be submitted at least one day prior to the relevant
trading week

lfli,
10
 (iiD During each trading day, the Buyer may submit to the Seller on or before 8:00
a.m. of tJrat trading day any revisions to the HCQ occurring between 1:00 p.m.
I
and 11:59 p.m. of the said trading day.

(iv) Ifthe Buyer fails to submit its day-ahead HCQ for any trading day, the Seller shall
consider the relevant day-ahead HCQ in the latest week-ahead HCQ submitted by
the Buyer as the find HCQ for that trading day.

I (") The Buyer shall confirm, for purposes of the WESM Rules, that it is the
counter-parfy to a bilateral contract involvilg the Bilateral Conract Quantity.

(b) Responsibilities ofthe Seller

(D The Seller shall comply with all applicable requirements of the WESM Rules.

(ir) The Selter shall, after each trading day, submit a schedule to the Market Operator
specifying Ole Bilateral Contract Quantity as its bilateral sell quandty at the
relevant generator node for the Cebu Power Plant

6.3 Settlement

6.3.1 During the Operation of the WESM

(a) The Final HCQ shall be the basis of settlement of tle Buyer with the Seller for the
relevant trading interval.

(bl If the actual enerry taken by the Buyer in any trading interval is greater than the Final
HCQ for that trading interval, the Buyer shall settle the Final HCQ with the Seller outside
the WESM in accordance with Article 7.2 (Monthly Paymen*), without prejudice to
Article 6.7 {Electricity in Excess of Contract Quantif), excess energr taken over the Final
HCQ shall be deemed taken from the spot market and shall be for the account of the
Buyer and paid by the Buyer directly to the Market Operator.

(c) If, due to reasons otJrer t}ran Force Maieure, the actual energl taken by the Buyer for any
trading interval is less than the Final HCQ for that trading interval, then: (i) the Final
HCQ shall be deemed to have been taken by the Buyer, and the Buyer shall settle and pay
for the entire amount of t}te Final HCQ (including the shortfall not taken) in accordance
with Article 7.2 (Monthly Paymena), and (ii) the Buyer may, in accordance with the
WESM Rules, claim reimbursement for tlle amount paid on such shordall hom the
Market Operator.

(d) lf, due to reasons other than Force Maieure, the actual energr delivered by the Seller for
any trading interval is less tltan the Final HCQ for that trading interval and the Buyer
was able to r€ceive the full Final HCQ for such trading interval, then: (i) Buyer shall
settle the Final HCQ with the Seller outside the WESM in accordance with Article 7.2
(Monthly Poymenu), and (ii) the Seller shall, subiect to Article 6.6 (Forced Outage;
Allowed Outage Hourc), pay the Market operator for the difference in the quantity of
energr delivered by the Seller and the Bilateral Contract Quantity at LMPor in
accordance with the WESM Rules.

I
ftr,lk

11

I
 6.3.2 Colculation of Monthly Pryment

After the review and reconciliations described under Article 6.3.L (Settlement - During the
Operation of the WESM), the Seller shall calculate the Monthly Payment in accordance wit}l
Ar+icle 7 .2 (Monthly Paymen*).
i

6.3.3 Annual Reconciliotlon

The Parties shall, within 20 days after the end of each Contract Year, reconcile the aggregate
Final HCQ during such preceding Conh?ct Year with the Contract Quantity for that Contract
Year. lf, for reasons other tJran Force Majeure, t}le aggregate Final HCQ during the preceding
Contract Year is less than the Contract Quantity for such Contract Year, then the unnominated
Contract Quantity shall be deemed to have been delivered to tle Buyer and the Buyer shall pay
for such Contract Qua tity deemed delivered at a price equal to seventy-five percent [75%) of
the adjusted KSPC Price for the last Billing Month of the Contract Year, as computed in
accordance with Annex "E.' Any value-added tax, fees and other applicable charges shall be for
the account of the Buyer.

6.4 Additional Procedures and Periodic Review

The Seller and the Buyer shall agree on any necessary additional detailed billing and settlement
procedures to comply with the WESM Rules. The Parties shall, foom time to time, review the
agreed billing and settlement procedures to ensure compliance with the WESM Rules.

I
6.5 Planned Outages.

(a) The Seller shall provide the Buyer its Planned Ouage cycle as indicated in Annex "G." At
any time within the last three (3) months of a Contract Year, the Seller shall notify the
Buyer of any Planned Ouage to be undertaken by it in the succeeding ConEact Year,
indicating the particular duration thereof. The Seller may, from time to time, submit any
modificadon to such Planned Ouage cycle as it may deem necessary. The Seller shall
deliver to the Buyer at least 15 days'notice ofany period of Planned Outage.

ib) The Buyer shall independently purchase energy from other sources during Planned
Outage. The Seller shall have no obligation to cause the delivery of or make
arrangements for the delivery of enerry to the Buyer. Nevertheless, the Seller shall
make best effort to arrange annual Planned Outages schedule at the period preferred by
the Buyer. Any and all costs that the Buyer may incur in purchasing enerry ftom such
otler sources shall be for the sole account of and borne by the Buyer.

6.6 Forced Ouage: Allowed Outage Hours.

(a) Any and all costs that the Buyer may incur in purchasing energ/ from such other
sources when the Cebu Power Plant is under Forced Outage shall be for the
account of the Buyer for as long as the Seller shall have any Allowed Forced
Outage available. The Buyer shall independently source any alternate enerry and
the Seller shall not be obliged to cause the delivery of or make arrangements for
the delivery of alternate energy to the Buyer.
I

[b) Subject to Arti cle 6.5 (Planned Outqge.), lf the Cebu Power Plant shall be unable to
supply power for an aggregate period in excess of 80 days[1920 hours) in a
Contract Year due to the Selley's undertaking the inspection, maintenance, repair
or overhaul of the Cebu Power Planq then (provided that such inability is due to
reasons other than Force Maieure affecting the Cebu Power Plant or an evenB

"12 l4t,
 occurrence or circumstance affecting the facilities of the Buyer for the receipt of
electricity) the Cebu Power Plant shall be considered as being under Forced
Outage during such excess period,

6.7 ElecBcity in Excess of Contract Quantity.

The Seller may, but is not obliged to, make available to the Buyer enerry in excess of the KSPC
Capacity Cap or the Contract Quantity, as the case may be, upon written request of the Buyer. If
the Seller agrees to grant such request and makes available to the Buyer the energy requested in
excess of the KSPC Capacity Cap or the Contract Quantity, the Buyer shall pay therefor an
amount computed in accordance with Article 7.2.

6.8 Reduction in Contract Quanuty

The Buyer shall be entitled to a reduction in its Contract Quantity as a result of tlre transfer of
any of the Buyefs contestable market customers upon written applicadon by the Buyer to the
Seller at least 60 days prior to such re tdon; provided, that the reduction shall be allowed only
in case (i) the transfer is direct to the Seller, or (ii) if the Seller is able to flnd an alternative
market to sell the transferred Contract Quantity. Both parties shall cooperate to minimize the
impact of such reduction,

ARTICLE 7. PAYMENTS

7 .l SecuriV Deposit

(a) The Buyer shall, prior to the Effective Date, deliver to the Seller security (the 'Sectrity
Deposif) in an initial amount equivalent to its payment obligation for the average
monthly Contsact Quantity fas set forth in Annex "CJ based on the KSPC Price (taking
into account value added tax and relevant adjustments) and calculated in accordance
with Annex "D". Such Security Deposit shall be by way of a cash deposi! or in the form
of a surety bond, manage/s check cashie/s check, certified check or irrevocable letter
of credit or guarantee, in a form and (if such security is other tlnn in cash), from a bank,
irtsurance company, bonding company or other financial institution acceptable to t]e
Seller.

(b) Within 15 days after the Selter has drawn on the Security Deposit, the Buyer shall
provide such addidonal security or securities as may be sufEcient in order to restore the
Security Deposit to its original amount

(c) On each anniversary of the Effective Date, the Buyer shall cause the amount of t}re
Security Deposit to be increased to an amount reflecting the payments made by it in
I

consideration of the ConEact Quantity delivered, and of Transmission Costs, market fees
and Ancillary Services charges incurred, in the last month of the preceding Contract Year,
plus the value added tax paid on each such amount

(dl The Security Deposit shall stand as security for the faithful and proper compliance by
the Buyer with its obligations under the PSC. Within 60 days after the Scheduled
Terminauon Date or such other date as the PSC may be terminated as provided in
Article 16 (Termlnation) hereof, the Seller shall return to the Buyer tJle Security Deposit
t less any amount properly due and owing from the Buyer to the Seller under the PSC.

I lrtfl
13
 7.2 Monthlv PaJrments.

[a) Commencing on the Effective Date and continuing throughout the Term, the Buyer shall
pay to the Seller an amount (the "Monthly Payment'-) calculated in accordance with
formula set out in Annex "E," exclusive of value added taxes and any other applicable
taxes, fees and charges. The billings shall be based on tJre toal Final HCQ for the Billing
Mont}.

tb) The line rental fees, tJte market fees and all other costs associated with the Parties'
participation in the WESM, shall be a pass-through cost to be shouldered by the Buyer
which shall be included in the monthly billings, except for costs relating to WESM
prudential requirements, which shall be paid by the Buyer to the Market Operator upon
the Buye/s registration as a direct WESM member. AII ancillary service charges, taxes,
fees, imposts and other similar charges shall also be included in the monthly billing.

(c) The Monthly Payment shall be subject to adiusunent in accordance with the provisions
of Annex "F" and shall be subject to further adiustments if there are new taxes, fees,
imposts and similar charges or any increase in existing taxes, fees, imposts and charges.

(d) The Monthly Payment shall be subject to any and all adiustrnent on the Base Prlce for
coal. In case any price chan8es, taxes, fees, imposts, charges or other associated costs is
implemented under any new contract, or under any law, ordinance or regulation by any
Govemment Authority or any agency or instrumentality of any country affecting the
Seller's coal supply conuacts or the applicadon of and computation applicable to the
coal pricg such price changes, taxes, fees, imposts, charges, fees and otJrers associated
costs shall, upon the giving of notice by the Seller to the Buyer, be deemed incorporated
to this Power Sales Contract and shall entitle the Seller, without need ofany further act
or notice or action to, or any approval or consent by, the Buyer to adiust $e Monthly
Payment in accordance with this paragraph and under Annex F based on such changes;
provided further, that the Base Price for coal shall include the shipment's insurance cost
while the Transportation Base Price for coal shall include the cost ofwharfage.

7.3 Invoicing.

(a) The Seller shall send a preliminary invoice to the Buyer within seven days after the end of
I each Billing Month, setting forth the Monthly Payment due for that Billing Month, together with
value added taxes and other applicable taxes, fees and charges due thereon. Such invoices shall
be denominated in Pesos,

@l If the Buyer does not dispute the preliminary invoice, the Seller shall deliver to the Buyer,
within 11 days after the delivery of the preliminary invoice, a final invoice confirming t}te
Monthly Payment and the other amounts set out in the preliminary invoice. lf the Buyer
disputes all or a portion of the Monthly Payment or other amounts set out in the preliminary
invoice, then tJre provisions of Article 7.5 tD@uted Invoices) shall apply.

7.4 PaJrment Due Date: Overdue Charges.

(a) The Buyer shall pay the Seller the Monthly Payment due, together with value added
taxes, other applicable taxes, fees and charges due thereon, and other amounts as
indicated in the final invoice without deduction, set-off or counterclaim of any nature
whatsoever, (iJ by wire transfer to the bank account or accounts specified by the Seller
in the final invoice, or (ii) by check at the omces of the Seller identified in the final
invoice, in each case within 12 days after receipt by t}te Buyer ofthe final invoice from

'l_4
l/{
 the Seller (hereinafter referred to as the "Paymetrt Due Date"J. Any amounts not paid
on or after the Payment Due Date shall earn interest at the 91-day T-Bill Rate, plus three
percent [3%) per annum.

(b) Upon receipt of payment from the Buyer, the Seller shall issue to the Buyer a VAT official
receipt covering the Conrad Quantity.

7.5 Disputed Invoices.

If the Buyer disputes amounts due from it as set out in the preliminary invoice delivered by the
Seller pursuant to Article 7.3 (lnvoicing),the Buyer shall, within fifteen (15) days from receipt of
such invoice from the Seller, provide written notice ("Nodce of Dispute") to the Seller
indicating the amount disputed and sating the basis of such dispute in reasonable detail. The
Buyer shall pay the amount not disputed by it (in accordance with Article 7.3 (lnvoicing) and
Article 7.4 (Payment Due Date; berdue Charyes)), and the Parties shall endeavor to settle the
dispute within 30 days from the Selle/s receipt of such written notice from the Buyer. If the
I
Parties agree on a settlement amount, the Seller shall issue the final invoice reflecting the
settlement amount lvithin three (3) days tsom settlement, and the Buyer shall pay such amount
within two (2) days from receipt of final invoice, together with interest thereon as set out in
Article 7.4 fPayment Due Date; Overdue Chorges) above from the date on wNch such amount
should have been paid up to the date on which payment is made.

If no Notice of Dispute is received by the Seller fmm the Buyer within the fifteen-day period
t
mentioned above, the Buyer shall not be deemed to have absolutely and unconditionally
accepted the accuracy ofthe invoice. Amounts not disputed shall be due and payable on the
Payment Due Date.

7.6 Change in Circumstances.

If, as a result of any Applicable Law coming into effect after the signing of the PSC, or as a result
of any such Applicable Law (including any official interpretation thereof which the Seller has
t relied upon in entering into the PSC) in force at the date hereof being amended, modified or
repealed (any such eveng a "Change in Circumstance"), the interest ofthe Seller in the Site, the
Proiect or the Cebu Power Plant or the Sellerrs economic return (net of tax or other imposition,
I
including without limitation, any withholding or remittance tax on the payments of dividends)
on its invesunent is materially reduced, preiudiced or otherwise adversely affecte4 then the
ParHes hereto shall meet and endeavor to agFee on the necessary amendments to the PSC, and if
I
after 60 days no such agreement has been reached then either Party may, upon giving to the
other not less than 30 days' noticg terminate the PSC.

I
ARTICLE I - REPORTING OF INFORMATION; OUTAGES

The Seller shall, upon the occurrence of any Forced Outage, immediately report the following
information to the Buyer:

(al a preliminary assessment of the Forced Outage event and to be confirmed in a more
definitive notice within ,[8 hours of such occurrence;

(b) the cessation of any period of Forced Outage affecting the Cebu Power Plant and the
resumption of the regular supply of Contract Quantity, such notice to be delivered in
writing within 24 hours ofsuch occurrencei and

w
15
 (c) any changes to the Seller's annual Planned Outage cyclg as may have been previously
communicated to tlre Buyer pursuant to Article 6.5 {Plonned Outages) hereof.
t

ARTICLE 9. SUSPENSION OF ACCEPTANCE OF DELIVERIES

t
9.1 Buyey's Notice.

The Buyer shall notift the Seller immediately of the occurrence of any event which results or
may reasonably be expected to result in the Buyer being physlcally precluded from accepting
delivery of enerry from the Seller. Such notice shall include a description of the event and the
measunes taken by t}le Buyer to remedy the event or to mitigate its effects. The Buyer shall also
comply with all other requiremen8 under the WESM Rules, the Grid Code, the Distribution Code
and the oATS Rules.

9.2 Restoration of Dellverv.

During any period of suspension of acceptance of dellveries, including any disconnection, the
Parties shall use their best efforts to restore delivery as promptly as possible,

ARTICLE 10- METERING

10.1 Meters.

The Contract Quantity delivered by the Seller shall be measured by a time-of-use, WESM-ready
meter of a type approved by the ERC and otherwise compliant with the WESM Rules and other
applicable laws and regulations.

lO.2 Measurement ofEnergy Consumed by Buyer.

The actual energ/ taken by the Buyer under the PSC shall be measured during the operation of
tJle WESM in the Visayas, using metering facilities provided by a Metering Sewice Provider.

10.3 Meter Readins and Verification.

In order to verift the quantity of electricity delivered by the Seller to the Buyer for each Billing
Month, the Seller and the Buyer shall adopt the existing or the new remote metering procedure,
once availablg in getting the reading from the electricity meters at the Receiving Point at 12:00
a.m. on the twenty-sixth day of each month.

10.4 Meter Tests.

The billing meters used or to be used shall be calibrated every six months by an ERC-accredited
metering service provider ("Metering Servlce Provider/) and witrressed by the Parties or their
representatives. Any calibration made on the billing meter other than the regularly scheduled
calibration shatl be for the account of the Party requesting calibration ofthe billing meter.

10.5 Meter Accuracy

The accuracy of the billing meter shall be 0.396 accuracy class in accordance with the Grid Code.
Billing adjustnents for meter inaccurary shall cover only the current Billing Month and the
immediately preceding Billing Month

kry
76

t
I
10.6 Meter Seals and Insnection.

I The billing meter shall be sealed by the Metering Service Provider and the seals shall be broken
only when the meter is to be inspected or tested pursuant to Article 10.4 (Meter Tesb) above.

I The Seller and/or Buyer shall be given reasonable notice of such occasions and shall have the
right to be present during the inspection. The absence of a representative of a Party shall not
prevent the inspection and testing from proceeding

! 10,7 MeasurementModification.

The requesting Party shall be responsible for the cost of replacing, modifying upgrading or
I transferring the billing meter or its instrument transformers in order to achieve higher accuracy,
efficiency, convenience and/or economy in the measurement ofdelivered Contract Quantity.

I 10.8 Metering Costs.

Special services provided by the Metering Service Provider to the Buyer other than standard
I metering services :rnd rates approved by the ERC, shall be for the account ofthe Buyer.

I ARTICLE 11 - FORCE MA'EURE

11.1 Instances of Force M4eure.

I "Force Maieure" shall mean any event not within the reasonable control, directly or indirectly,
of the Party affected, but only if and to the extent that (i) such event, despite the exercise of

I reasonable diligence, cannot be or be caused to be prevented, avoided or removed by the Party

affected, (iiJ the Party affected has taken all reasonable precautions, due care and reasonable
altemative measures in order to avoid the effect of such event on the Parg/s ability to perform
its obligation under the PSG and to mitigate the consequences thereof, and (iii) such event is not
I the direct or indirect result of a Par1y's negligence or the failure of such Party to perform any of
its obligations under the PSC. An event of Force Maieure shall include, but not be limited to, any
of the following:
I (a) acts ofGod, war or acts ofthe public enemy, whether war be declared or not

I (b) public disorders, civil disturbance, insurrectio& rebellion, sabotage, acts of terrorism,
riots, violent demonstations, blockade revolution, expropriation, requisidon,
confiscation, nationalizadon, export or import restriction or otJrer restrictions, rationing
I or allocations imposed by any Governmental Authority;

(c) any effect of unusual elements, including fire, volcanic eruption, landslide, earthquakes,

t floods, lightning typhoons, tsunami, perils ofsea, or other unusual natural calamities;

(d) strikes or lockouts or other collective or indusEial action by workers or employees

I other than non-manual personnel {provideil, tiat any Party that seeks to invoke such a
strike or labor acdon as a Force Maieure must first utilize all reasonable efforts to
maintain performance udlizing management personnel);

I (e) air crash, train wrecks or accidents of navigadon or breakdown or injury of vessels,
accidents to airports, harbors, docls, canals or other assistance to or adiuncts ofairline,
shipping or navigation; epidemic or quarantine, including failures or delays in
I mnsportation;

t0 with respect to the Seller only, any Change in Circumstances;

I
17
W
I
 G) radioactive contamination or ionizing radiationj

(h) any System Emergency;

(l) with respect to the Seller only, any construction-related Force Majeure conditions that
affect the Proiecq or

(j) unavailability or insuffrciency of alternate energ$/ in the system.

L1.2 Effect of Force M4eure.

Except for the obligations of either Party to make any required payments which are already due
and demandable under the PSC, the Parties shall be excused from performing their respective
obligations under the PSC, and shall not be liable for damages or otherwise if and only to the
extent that they are unable to so perform or are prevented from performing by reason of the
Force Majeure; !r!y&k L that:

(a) tlte non-performing Party, immediately after tlle occurrence ofthe Force Maieure (in the
case of the Buyer) or in no event later than three days thereafter or as soon thereafter as
may be reasonably practicable under the circumstances (in the case of t}te Seller), gives
I
tlle other Party written notice describing the eveng the effect thereof and the actions
being taken in response thereto;

I
tb) the suspension of performance is ofno greater scope and or ofno longer duration than
is reasonably required by the event of Forre Maieure; and

I
G) no obligation of either Party, which arose before tle occurrence of the event that caused
the suspension ofperformancg shall be excused as a result ofthe Force Majeure.

11.3 Extended Force Maieure Event

tf an event of Force Maieure occurs after the Effecllve Date, the Term shall be extended by a
period equal to that during which the effect of the Force Majeure applies; p43y&legl that if such
effect applies for a continuous period in excess of 180 days, the parties hereto will meet to
discuss the basis and terms upon which the arrangements set out in the PSC may be continued,
I
If no agreement is reached within 60 days from the end ofthe 180-day period, then either Party
may, upon giving to the other not less than 30 days' notice, terminate the PSC.

I1..4 Settlement oflabor Disputes.

Neither Party shall be required to settle any strike, walkou! lockout or other labor dispute on
terms which, in the sole iudgment of the Party involved in the dispute, are contrary to its
interesq it being understood and agreed that tlle settlement of sEikes, walkouts, lockouts or
other labor disputes shall be entirely within the discretion of the Party having such dispute.

ARTICLE 12 - EYENTS OF DEFAT'LT

72.1 Seller Events of Default.

Each of the following events shall constitute an event of default by the Seller (hereinafter
referred to as the 'Seller Events of Def'aulf):

l4,t/
18
 (a) The Seller fails to perform any material obligation under the PSC, which hilure has not
been remedied within 60 days after receipt from the Buyer ofa Notice of Seller Default
as hereinafter defined,

(b) A receiver or liquidator or trustee of t}re Seller or of any of the properry of the Seller is
appointed and not discharged within a period of 60 days; or the Seller is adiudicated
banlrupt or insolvent or placed under rehabilitation, or any substantial part of the
property of the Seller is sequestered and such decree con6nues undischarged and
unstayed for a period of 60 days after the enuy thereof; or a petition to declare
bankruptry or rehabilitation or to reorganize the Seller pursuant to any of the
provisions of any applicable bankruptcy or rehabilitadon law or any other similar
statute is filed and is not dismissed within 60 days after such filing

(c) The Seller files a volunary petition for banlruptcy or rehabilitation under any
provisions of any bankruptcy or rehabilitation law or consents to the filing of any
bankruptcy, rehabilitation or reorganization petidon against it under any similar law,
which has not been dismissed within 60 days from the filing thereof; or the Seller files a
I
petition or answer or consent seeking relief or assists in seeking relief in a proceeding
under any of the provisions of any applicable bankruptry law or any other similar
statute, or an answer admitting the material allegations of a petition filed against it in
such a proceedins or the Seller makes a general assignment for the benefit of its
I
creditors; or the Seller admits in writing its inability to pay its debts generally as t]ley
become due.

12.2 Bqvef Events of Default

Each of the following events shall constitute an event of default by the Buyer (hereinafter
referred to as the "Buyer Eve[ts of Defaulf) :

(a) The Buyer fails to make payment of any amount under the PSC on the Payment Due
Date.

tb) The Buyer fails to perform any material obligation under the PSC which failure has not
been remedied within 60 days after receipt from the Seller of a Notice of Buyer Default
as hereinafter defined.
I

(c) A receiver or liquidator or trustee of the Buyer or of any of the property of the Buyer is
appointed and not discharged within a period of 60 days; or the Buyer is adiudicated
banlcupt or insolvent or placed under rehabilitation, or any substantial part of tJle
property of the Buyer is sequestered and such decree continues undischarged and
unstayed for a period of 60 days after the entry thereof; or a petition to declare
bankruptcy or rehabilitation or to reorganize the Buyer pursuant to any of the
provisions of any applicable banlauptcy or rehabilitation law or any other similar
statute is filed and is not dismissed within 60 days after such filing.

(d) The Buyer files a volunary petition for banliruptcy or rehabilitation under any
provisions of any banlcuptcy or rehabilitation law or consents to the filing of any
banlcuptcy, rehabilitation or reorganization petition against it under any similar law,
which has not been dismissed within 60 days from the filing thermf; or the Buyer files a
petition or answer or consent seeking relief or assists in seeking relief in a proceeding
under any of the provisions of any applicable banlauptcy law or any other similar
statute, or an answer admitting the material allegations of a pedtion filed against it in
such a proceeding or the Buyer makes a general assignment for the benefit of its

19
t/
 creditors; or the Buyer admiB in writing its inability to pay its debts generally as they
become due.

(e) The Security Deposit ceases to be valid or t}re Buyer fails to replenish the Security
Deposit pursuant to the second paragraph of Article 7.1 (Secunv Deposie); or the party
that issued it for the account of the Buyer claims that it is, or becomes endtled, to revoke,
cancel or suspend the Security Deposit or does revoke, cancel, suspend or otherwise
repudiate the Security Deposiq or the circumsances described in Articles 12.2(c) and (d)
(Buyer Events of Default) above apply to the party providing tle Security Deposit, and
the Buyer fails, vvithin fifteen days after tJre happening of any of the aforementioned
events, fails to provide substitute security or securities to replace the Security Deposit

(0 The franchise of the Buyer is revoked or suspended before the end of the term of the
PSC.

(e) The Buyer fails to become a direct WESM member on or before Effective Date.

12.3 Remedies of the Buyer uoon the occurrence of a Seller Event of Default

Upon the occurrence of a Seller Event of Defaul! the Buyer may deliver written notice to the
Seller specifuing in reasonable detail the Seller Event ofDefault (the "Nodce of Seller Defaulf).
If, within 60 days after receipt of the Notice of Seller Default by the Seller, the Seller Event of
I

Default has not been remedied by the Seller, the Buyer may terminate the PSC and pursue any
remedy available to it under the PSC, at law or in equity.
I

12,4 Remedies ofthe Seller upon the Occurrelce ofa Br{rer Event of Default
I
Upon the occurrence of a Buyer Event of Defauli the Seller may deliver notice to the Buyer
speciffing in reasonable detail t}re Buyer Event of Default fthe "Nodce of Buyer Defauld). lf,
within 60 days after receipt of the Notice of Buyer Default by the Buyer, the Buyer Event of
I Default has not been remedied by the Buyer, the Seller may terminate with immediate effect the
PSC and puNue any remedy available to it under the PSC, at law or in equity. In addition, the
Buyer, immediately upon receipt of written demand from the Seller (the "Buyout Payment
I Date), shall pay the Seller a buy-out fee equivalent to seventy-five percent (75%) ofthe present
value of the adiusted KSPC Price multiplied by the Contract Quandty for the remaining term of
the PSC had the same not been terminated. The adiusted KSPC Price shall be the I6PC Price for
I
the Billing Month when the PSC is terminated as adiusted for that Billing Month pursuant to
Annex 'F". For the purpose of computing tie present values, a discount rate equivalent to the
prevailing T-Bill Rate shall be applied. The buy-out fee shall be computed using the standard
present value formula, as follows:

P I
J=l
A X l+ t
t2 ]-')
where:

I
P buy-out fee that the Buyer must pay to the Seller;

Aj seventy-five percent [75%) of the projected invoice of the

I Seller to the Buyer for month j, using the adiusted XSPC Price
applicable for the month in which the PSC is terminated
multiplied by the average monthly Contract Quantity, as set
out in Annex "C," and adiusted in accordance with Annex "F";

I discount rate equivalent to the prevailing T-Bill Rate;

m /w
 ) monttE one to n' and
I

n total number ofmonths remaining in the term of the PSC.

ARTICLE 13 . INDEMNIFICATION

13.1 FullResponsibility.

Each Party shall indemnifu the sthsl egeinst all claims, or otler liabilities due to (i) loss, or [ii)
death or iniury to persons or (iii) damage to property, arising out of or in connection with the
performance, or any delay, failure to perform or breach of performance, of its obligadons
hereunder, except to the extent that such claim or liability arises from the other Parqy's gross
negligence or willful misconduct

13.2 Notice.

Notice of any claim for indemnification shall be given within 60 days from the earlier of (i) the
commencement and (ii) actual linowledge of the event or circumstance that gives rise to such
claim. No claim for indemnification shall be allowed if such notice requirement is not complied
with.

1 3.3 Limitetion of Liability.

The liabllity of the Parties under the PSC shall not include any indirec! punidve, incidenal or
consequential cosg expense or damage.

13.4 IndependentParties.

The Seller and the Buyer shall not be considered as joint ventur€rs, partners or agents of each
other and neither shall have the power to bind or obligate the other.

ARTICLE 14.INSURANCE

Each Party shall be responsible for obtaining and maintaining such policies of insurance as are
required to be obtained and maintained by it in connection with its operations.

ARTICLE 15. ASSIGNMENT

(a) Neither Party may assign the PSC without the prior written consent of the other Party.
(b) Notwithstanding the provisions of Article 15(a) (esslgnment), the Seller may, without
the prior written consent of the Buyer, assign the PSC, and its rights and interests
hereunder to investoF and lenders providing finaucing for the Cebu Power Plang The
Seller shall issue a written notice to the Buyer of such assignment within 15 days
therefrom.

(c) The Buyer hereby consents to any assignment by the Seller of the PSC to such investors
and lenders.

(d) The Buyer fur*rer consents, if required by t}le investors or lenders, to afford tJle
investors and lenders an opportunity to remedy any event of default or potential default
by the Seller prior to giving effect to any termination of the PSC among other
requircments. The Buyer shall confirm t}le consents under tlis section in a written

n /w
 consent and agreement to be entered into by the Buyer with the investons and lenders
providing financing to the Proiect, which consent and agreement may contain other
reasonable provisions customary in the financing of international power proiects. The
Buyer further agrees to provide all further assurances and to execute any addidonal
documents as the investors or the lenders may reasonably require.

ARTTCLE 16. TERMINATION

t
16.l Generdly.

I The PSC shall terminate on the Scheduled Termination Date unless otherwise renewed by
mutual agreement of the Parties in writing The PSC may also be terminated in any of the
following instances:

(a) bywritten agreement ofthe Parties;

O) if a Change- in Circumstance shall have occurred and the Parties fail to agree on
amendments to the PSC as provided in Article 7.6 (Cfi ange in Circumsances);

Ic) ifa Party is prevented from the performance of its obligations on account ofan extended
event of Force Majeure, as provided in Article 17.3 (Extended Force Majeure Event);

(d) by the Buyex if the Seller fails to remedy a Seller Event of Default, as provided in Article
12.3 (Remedies of the Buyer upon the Occunence of a Seller Event of Default); or

Ie) by the Seller, if the Buyer fails to remedy a Buyer Event of Default, as provided in Anicle
12.4 (Remedi* of the Seller upon the Occurrence of a Buyer Event of Defoult).

I L6.2 Conseouences of Termination.

Upon any termination of the PSC and without preiudice to Article 12.4 (Remedies of the Seller
upon the Occurrence of o Buyer Event of Defuult), each Party shall cease to have any further
obligationq responsibilities or liabilities hereunder, otler than for such obligations or Iiabilities
that have accmed prior to the date of t€rmination hereof and remain undischarged as of the
date of termination.

ARTICLE 17. DISPUTES

17.7 AmicableSettlement

Both Parties agree that any dispute arising out of or relating to the PSC (the 'Irlspute') shall, as
much as practicable, be settled amicably. If resolution of a Dispute by such means is not
achieved within 30 days after the service by either Party to the other Party of written nouce of
the existence of a Dispute, either Party ma, by giving further written notice to the other Party,
require that t}le Dispute be referred to tleir respective chief executive officers or, should
circumstances warrant, person(s) authorized by such chief executive officers, for resolution and
each Party shall procure that its chief executive officer or representadve seeks in good faith to
resolve the matter by discussion with the other.

W,
 L7.Z Arbitration.
I
A Dispute that is not resolved within 30 days from t}re referral thereof to the respective chief
executive officers or representatives of the Parties in accordance wit}r Article 17.1 (Amicable
Settlement) above may be referred by either Party to arbitration under and in accordance with
i the UNCITRAL Arbitration Rules as then in force. ln case of conflict between the PSC and the
UNCITRAL Arbitration Rules, the PSC shall prevail. The Parties agree that: (i) the seat of
arbitration proceedings shall be held in Singapore under the administration of the Singapore
International Arbib:afion Center; (iiJ there shall be three arbitrators, the first to be appointed by
the Seller, the second by the Buyer, and the third appointed by the two arbitrators thus choseu
(iii) the language of arbitration shall be English; (iv) the award shall apportion the costs of the
arbitration in accordance with the responsibility and liability for the Dispute as determined by
the arbitrators; (v) the award shall be in writing and shall set forrh in reasonable detail the facts
of the Dispute and the reasons for the u"ibunal's decision; and (vi) the award shall be final and
binding upon the Parties and judgment thereon may be entered in any court having jurisdiction
for its enforcement and the Partie renounce any right of appeal from the decision of the
tribunal insofar as such renunciation can validly be made.

ARTICLE 18. COOPERATION

18.1 Generally.

The Parties agree to cooperate with each other, to act with the utsrost Sood faitll, and to
promptly execute, aclixrowledge, and deliver any such further assurances, documents or
instruments, and to do all such further acb and things, in each case as the other Party may
reasonably request and as may be reasonably necessary for the purpose of carrlng out tlre
intent and purpose of the PSC.

18.2 Seller's Investors and Lenders,

The PSC is subiect to review by prospective investors and lenders of the Seller. The Buyer
agrees to (a) negotiate in good faith any changes to the PSC requested by such prospective
investors and lenders, and O) provide such further assistance and execute such documents as
may be required by such inve$ors or lenderc consistent with the PSC.

ARTICLE 19. MISCELLANEOUS PROVISIONS

19.1 Entire Agreement

This PSC constitutes the entire and new agreement of the Parties, repeals the old PSC and
supersedes any and all other agreements of the Parties with respect to the subiect matter
I
hereof.

19.2 Binding Effect: Successors and Assigns.

I

This PSC and all its terms and conditions shall bind and inure to the benefit of the Parties and
their respective successors and duly permitted assigns. This PSC may be executed in
counterparts but all such counterparts shall constitute one and the same instrumenL

19.3 Governing law.

This PSC shall be governed in all respects, including validity, consruction, performance and
effecq by the laws of the Philippines.
t
23
ln
 19,4 Amendments.

No change or variadon in tle PSC shall be effective unless executed in writing by the Parties.

19.5 Waiver. Cumuladve Rights.

righ! power or remedy accruing to it

No failure or delay on the part of a Party in exercising any
upon any breach or default by the other Party under the PSC shall impair any such right, power
or remedy, nor shall any such failure or delay be construed as a waiver of any such breach or
default thereafter occurring, nor shall a waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or tlereafter occurring nor shall any single or
partial exercise ofany such right or power preclude any other or further exercise thereof or the
exercise of any other right or power hereunder. Unless the context otherwise provides, all
remedies, either under tle PSC, or by law or otherwise afforded the Parties shall be cumulative
and not alternative. No notice to or demand on any Party in any case shall entitle it to any otler
or further notice or demand in similar or other circumstances.

19.6 Notices.

All notices, requests and other communications required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given if delivered personally, sent by
telefax or mailed first class, airmail, postage prepaid, registered or certified as follows:

For the Seller:

Address: 7tr Floor, Cebu Holdings Center,
Cebu Business Park
Cebu City, Philippines

Attention: The President

Telephone No.: (O32) 23L-937 L

Fax No:

For the Buyer:

Address: Ramon Enerio Street

Attention: The General Manager

Telephone No.: (038) S0L-7 7 62

I
FaxNo.: (038)S0L-7762

L9.7 Severability.

In case any one or more of the provisions contained in the PSC shall be invalid, illegal or
unenforceable in any respecq the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby.

irrt
24
 19.8 Breach ofSellefs Coal Suoplier.

If there is a failure or breach by Selle/s supplier of coal of its obligation to supply coal to the
Seller pursuant to the coal supply conEact between the Seller and such supplier, the Parties
shall promptly meet to discuss how tJre situation may be addressed. In case the Seller decides to
procure coal ftom a different supplier, the Parties shall negofiate in good faitlt any adiustment
to the KSPC Price.

ARTICLE 20 - CONFIDENTIALITY

Except where required by law or authorized by the other Party in wriun& a Party shall not
disclose the provisions of the PSC to any third person without the prior written consent of the
other Party, except disclosures (i) to a Pafiy's advisors, agents, counsels and other similar
persons or [ii) to prospective investors and lenders ofthe Seller.

IN WITNESS WHEREOF, the Parties have signed this PSC on this day of
- in Makati Ci ty, Philippines -*
I

XEPCO SPC POWER CORPORATION BOHOL LIGHT COMPANY INC.

BY: BY

A-qO/,ur;t
tHor s6,rtcloo D T.VILLAREAL
President and CEO President

SIGNED IN THE PRESENCE OF:

7/,loiL l,lnrr>-
I

25
 REPUBLIC OF THE PHILIPPINES )
Q.bw oA/ ) SS
I
ACKNOWLEDGMENT

BEFORE ME, a notary public in and for the city named above personally appeared:

Name Community Tax Certificate/ Date and Place of Issue

PassPort No.

cHoIBoNGJoo GM+?1sl< Wewbc lt, zpe/ UDaEA

DENNIS T. VILLAREAI Ea o%1&9 fiM)ft 20,Jnp/nANra

who were identified by me through competent evidence of identity to be the same peBons
described in the foregoing Power Sales Conts?ct PSC, who acknowledged before me that their
respective signatures on the instrument were voluntarily affixed by them for the purposes
stated therein, and who declared to me that t]ley have executed the instmment as their free and
voluntary act and deed and that they have the authority to sign on behalf of their respective
principals.

WITNESS MY HAND AND SEAL this [0cr r 2 2012

2012.

JULIUS CR L, REYES
NO

Doc.No. tB No.
efd2
PageNo Ol : Com 2009
BookNo Cebu
-L-; PIR
IBP
Series of 2012. fJ-Iltr.tb., City
IBP No._.
[address]

-20_._Chapter
1,4

!
 ANNEX'A"

ELECTRICITY CHARAGTERISTTCS OF COI{TRACT QUANTTTY

The Seller shall supply the Contract Quantity in accordance with good utility practice and in
compliance with appropriate rules and regulations such as the Grid Code, the Distribution Code,
the WESM Rules and the OATS Rules.

Electricity Delivery Requirements:

The Seller shall:

a) supply elrtricity at the Receiving Point

i
bl continuously supply active power output within the system frequenry range of 59.7 to
60,3H2 and a reactive power output under steady state conditions within the voltage
range + 57o of nominal value at the connection poinl

The Seller shall cooperate with the Buyer in establishing emergency plans includin& but not
limited to, recovery from local or widespread electrical blackoug voltage regulation to effect
load curtailment, and such other plans as may be necessary."

l'///

I
 ANNEX'B'

COMPUTATTON OFTEE ZOOS LRAC RATES

Computation of2re LRAC price I+6/Sdodr iE€.

Coal 2OO MW
EPC 1.fiz
1327{
c.Ill.] Co.l uEl qllt
I EPC COSTS (.pemodh.t lyrt or rCO qtaa t 312g,4
2$e 23-St t 1,!o6t
3 Sit Co* o.c6* t 4s
OII,t
! L.g.l.Dd 6hpli.no. 6*, InC{dlng EIA(E{ r.Bt t a.o.x!
ttrxt I 6o.Gt
7 CodioC.nqt lt6 2.r2r l--------_---1qEq
A TotIl C.9iLl C..B TCC 5€.A
c Tcc p.r (Yr(o'6) 2.fif
10 rOH tl! p.rr... m11

12 LaRrtna Olo- C.tr.ry 2m

13 Crp.dt, D.r.tnt oEt
t4 Ell.dlr Lr< R.!ng Orr N
16 A.rdlll.ry Lo:.I loIlt
Irto 1@

lO Hidr H..t r.t rrlu. Lrnutloaurt 14,417

't7 HGrt Rrt D.gr.drlio. DliB. t 51a
€ ,r.rrr. taET H.rr r.t HHvLT 'ro5r5
19 Vrd.bl. Oitaa p.r ra! gtE 4.fr:e
20 V.ri.bl. OlL D.r ll!..ta.^.r:non \rOIc il,/OIG(l' |to 4.On3S

21 Co.l Cod ?..lon. ?ton

22 Conv.Ei.n f.d.r
23 Cort {r [o.l I 9J ..,. t P.l 3I}2
24 Co{t Of fq.l / Ith Orr g.n.r.ton. lrflh HHVLI 'F. , t(El
26 Co6t a, f!.1.t Llh l..l O...rrtoD- 3X!ll XHVLT raoI l(m,(l-aud 3r t0
20 Tot t ra.t O.rd:ti.n V.d.bl. Codr, l/rrh 2+L'
O.tol. t rllom.li,
2 A.q{iEd R.tuh on Totrl lnvdn.lll Cotl 71,#274
29 Fix.d .nn.r.l Co6l r5_341250
I
O Trt l Crplt l .nd risd 6.618524
31 forc.d Out e. to 3f,4,
tao to.st
<l ,flllrlillt F.drr r r(r-rOEo) 452,t r
ct ot
35 rl.l E.rn Od G.n.rrnon Crrrdt |..t<, rgo
I ldt l O.n.r,tion {nt od no srid Lltr TOTgt- l{rlg' Ct'8r.7@ 1A1,4
37 Ar.r.O. tot lrlx.d 6rt p.r XItr AfTC 6A.@
39 lol.l V.d!bl. c.6t 3at.94
3C C.d p.r YqH o, n.l .n..ey g!o.rr.d t04.@
orE*
4l Tr.ftrromc, Los Lt OIDI
Itz Co6t P.r Yli O.ltvrl.d to4.!@
rEl CoculiBr df D.r.nggv !.o...t d of O.tlurbin.
lc-tIrTOTg,.TCqOT)
,E lEr.nc. Co* P.r lai D.lr{..d lc tore.
4 LA C_ UsaillHr 104.629
PHP. .E-SO
'US
iF 42511
tP Hrrlcin! Pr.hiuh
50 Tot l Par Coi
5t O$..Ad,urtn.nt \82
2.7qlt
Va.id. C.cl. Pfttlh t arSto

le
x
 ANNH"C"
I
CONTRAMQUANTTfi

Annual Contract Quandty, Ave. Monthly Conts'act Ave. Dally Contract

Year
kwh Quandty,kWh Quantity, kWh

I
1st 43.800,000 3.650,000 120,000
Znd 43,800,000 3,650,000 120,000
I 3rd ,13,800,000 3,650,000 120,000
Ath 43,800,000 3.650,000 120,000
5th _ 43,800,000 3,650,000 120,000
6th 43,800,000 3,650,000 120,000
7th 43,800,000 3,650,000 120,000
8th 43,800,000 3,650,000 120,000
I
9th 43,800,000 3,650,000 120,000
10th 43,800,000 3,650,000 120,000
11th 43.800,000 3,650,000 120,000

TOTAL

/tt

29
 ANNEX'D"

SECURI'IY DEPosrT

Sample:

Conracted Monthly Enerry 3,650,000 kwh

ContrectPrice : *+.2511/klArh plus adjustsnents as in Annex "F"

VAT : Twelve percent (12%)

Amount ofsecurity Deposit = (3,650,000 x P4.2511) x 112% + other applicable charges

I 11,378,496.A (in such form as indicated in Article 7.1J
+ other applicable charges

fury

30
T
ANNE("E"

I CoMPUTATIoN oT MoMnLY PAYUENTS

GCnonat = R+T
T
GCnollth = the generation charge or Monthly Paymenq in Peso.
I K
T
= Selle/s generation charge for the month; in Peso.
= annual compensation charge for the unnominated Contract Quantity by the Buyer;
in Peso,

I l. Computation of 'K1

I "
= I ij-l ((rlc e
i=26
s - FMe,\x P*\x x*

I Where:

HCAt = Final HCQ for the relevant day i and relevant hourl ofthe Billing Month, kWh.

t FMQt : Quandt! of enerry not deliverable due to Porce Majeure for the relevant day i and
relevant hour j of the Billing Month, kWh.
Px = KSPC Price, Pesor/kwh.
T tGq = KSPC Price adjustment for the month.
n25 = means up to the 25dt day of the current month
I I = represents the relevant day ofthe Billing Month .

j = represents tlte relevam hour of the trading day.

t 2, Computadon of"T"

I r = I c8, -fl{ncQ
t2

) \x Pr xK
* x0.75
I Wherc:

I cQt

HCQ^
= tlte I(SPC Annual Contract QuanEty for the relevant yeary based on Annex "C," kWh.

Total Final HCQ for the month m, klA/h.

=

I Px = IGPC Price, Peso/kWh.

I Kadj

v
= KSPTC Price adjustsnent for t}le month.

= repnesenB the relevant contTact Year of the contract Period.

m = tepresen5 the relorant Billing Month of the Contract Year.
I Note:
lf Billing Month is other than last Billing Month of contmct year, or
t t2
cg<2(Hc8,),then T=o

t 1.,/
31

I
t

ANNEX F

PRrcE ADlusluENTs

,CF,,F.lgJt. LCl
0.540 + o.oasrFC4 + 0.305 I 0.090 ,
'"={[ FC\ cF" 'JFX") L LCl

Kut Adiustment factor ofKSPC during the Billing Month

The Arithmetic average of the values of the Unid States Producers' Price lndex for all
I
FCP,
items and the Unid States Consumer Price Index for all items, both as last published
I
on or before the Adiustnent Date (the last day of the billing monthJ by Intemational
Monetary Fund; pmvided that if the InErnational Monetary Fund ceases to publish
sudr indices, the r€levant indices published by the U.S. Departnent of Labor Buneau of
Labor Statistics shall apply.
I
FCP, The Arithmetic average of the values as of January 2008 of the United States
Producers' Price Index for all items and the United States Consumer Price Index
for all items, both as published on by Intemational Monetary Fund; provided that if
the tnternational Monetary Fund ceases to publish such indices, the relevant indicts
published by the U.S. Departnent of Iabor Bureau of labor Statistics shall apply.

CF, BP, + TBP|

CF, BPo + TBP|

Whele:

BPo = shall be the blended rate [FoB + insurance) ofthe new Coal Supply Conuactst.

TBP, = shall be the blended transporation rate (ransportation + wharfage) of the new
Coal Supply Contracts2.

F1 Fuel Base Price Fa*or = (FBP^/FBP,)

Where:
FBP, New Fuel Base Priceq.
FBPO Old Fuel Base Pricea.

FX, = Philippines Peso vs. US Dollar exchange rate as published by the Songko Sentml ng
Pilrpfnas at the last working day of the Billing Month

FX" = An exchange rate of40.65 Philippine Peso vs. 1.00 US Dollar.

LCP, = The Arithmetic average ofthe values of the Consumer Price Index in Philippines for
all items and General Wholesale Price Index in Metro Manila for Mineral fuels,
lubricant and related materials, both as last published on or before the Adiustment
Date (the last day of the billing month) by the Nafional Statistics Office (NSO).

I Curr€nt BPo mte as of 4ft Q 2011: USD1Z3S

/W
2 Current TBpo ra* * o1 4r, g 2011 : USD 21 ,14
r Currmt Nevv Fuel Base Price of 46 Q 2O11: USD 63.52
a Old FueI Base Price as of 4s
Q 2fi)7: USD 52.57

37
LCP" = The Arithmetic average of the values as of January 2008 of the Consumer Price lndex
in Philippines for all items and General Wholesale Price Index in Metro Manila for
Mineral fuels, lubricant and related materials, both as published by the National
Statistics Office(NSO).

Where:

a Adiustxnents to Base Price [B&)

The B& shall be adiusted quarterly to reflect the increase or decrease of tJre price of Global Coal
FOB Newcasde as of the first day of loading as per the formula stated below:

BP B1_, x (W)**. > CXP

Where:

BP, = Base Price as of current quarter; computed as per formula above, or the current
CRP. whichever is higher
BP,, = Base Price as of preceding quarters. In case ofa new Coal Supply Contracg the
initial BP,.r shall be the blended rate (FOB + insurance)oftlre new CSC.
BIP,1 = Base lndex Price as of preceding quarter
BIP*z = Base Index Price as of preceding quarter to BIP'.I
CRP = the CRP provided by the MEMR as determined annually per CSC anniversary
date, which is FOB only.

. the quarter shall refer to a calendar quarEr.

o Base Index Price shall be the quarterty average of the Global coal physical inde* FOB
Newcastle. For the reftrence, the initial B/Pn-: shall be USDSLZ! per ton
o The initial pricr adjustnent shall be made on the Flrst Delivery Date and which shall be
effective until the end ofthe quarEr of the First Delivery Date,
o The next price adiusfnent afur the First Deli\rery Date will be on the next calendar quarter
and the price shaU be adjused on the first day of every quarter thereafur.
. Any applicable and export-relad taxes, duties, and other charges imposed by the respective
governments of the exporters shall be added b the oal Base Price of each suPPlier/expor&r
under the CSC's while any applicable and related axeq duties, and other charges imposed by
any Government Authority having iurisdiction over either ofthe partjes shall be added to the
blended Base Price as of current quar@r @Pa)
o The coal Base Price for each shipment of coal supplied by the supplier CFR hereunder to
the Selley's delivery point at the Cebu Power Plant shall be the Base Price, as applicable
to that shipment and adiusted in accordance with t}le immediately preceding formula
under this Annex F (the "Base Price"); provided, however, tJrat if such coal Base Price is
less than the applicable Coal Reference Price, the coal Base Price shall be equivalent to
the applicable Coal Reference Price.

b. Adiustment ofTransportation Base Price ["78&')

The TBP, shall be adiusted quarterly to reflect the increase or decrease of the price of
Marine Diesel Oil as of the first day of loading as per tJre formula stated below:

W
s lnitiat BPa for the current CSC as of # Q 2011: UsD,[2.38.
 Formurai rBp, = ?Bn-, ,.o.zs)*{rra=,,,
I
[ffi)'r."]
Where:

I
TBP" TBP as of current quarter
TBPn.t TBP as of preceding quarter6. In case of a new Coal Supply Contracq the iniHal
TBP,.r shall be the blended transportation rate ftransportation + wharhge) of
tle nera Coal Supply Contracts.
BBPN.1 Bunker Basis Price in US cents as of preceding quarter
BBP,.2 Bunker Basis Price in US cents as ofpreceding quarter to BB&-r
I 75o/o Fixed Cost
25% Variable Cost

o The quarter shall refer to a calendar quarar.

o Bunker Basis Price shall be the quarterly average of the Pertamina Publicly Lised Price
Inde:< for Marine Diesel Oil ("ltlD0'l posted in FI. Pertamina website
(www.oertamina-brlnkersom). For the reference, the initial BBP,.z shall be US 0.8018 per
liter
o The lnitial price adiustrnent shall be made on the Firct Delivery Date and which shall be
I
effective until the end ofthe quarter on tte First Delivery Date.
o the next price adiustsnent after the First Delivery Date will be on the next calendar quar@r
and the price shall be adiusted on the first day of wery quarter thereafter.
r The Transportation Base Price for coal I"TBPJ shall include the cost ofwharfage.

I
/r1
I

s lrlr(nl TBPatfor the current CSC as of 4n Q 2011: uSD21,14.

v
 ITNNEX'G'

ANI{UAL PIANNED OUTAGE CYCLE

Planned Outage Cycle Per Unit (A--+B--+A---rB-+A): at two-year cycle at eight-month

intervals

A (45 days)--+ PM(20 ilays) --+ PM(20 days)--+ BBS days) '--+ PM{20 days)--+ PM(20 days) "+A (45
doys)
I

Average planned outage per unit per year = 40 days

Toal Planned Ouage for both units per year = 80 days

tn
I

35