DRAFT CAPACITY USER PURCHASE AGREEMENT
Channel Cable Ltd
-and-
Capacity Holder
CAPACITY USER PURCHASE AGREEMENT
TABLE OF CONTENTS
1Definitions and interpretation......
2Commencement and Duration......
3Actual Date of Commercial Operation......
4Liquidated Damages for delay in the Actual Date of Commercial Operation......
5Channel Cable Access Rules......
6Warranties......
7Payment of Capacity Charges......
8Invoices for Capacity Charges......
9Financial Security......
10Availability Adjustment......
11Electrical Loss Adjustment......
12Assignment, Agency and Subcontracting......
13Force Majeure......
14Default and Termination......
15Dispute Resolution......
16Liability......
17Assignment and Novation......
18Confidentiality......
19General......
SCHEDULE I: CAPACITY CONFIRMATION
SCHEDULE II: AVAILABILITY AND ELECTRICAL LOSS ADJUSTMENT;
SCHEDULE III: FINANCIAL SECURITY;
SCHEDULE IV: EXPERTDETERMINATION;
SCHEDULE V: DELAY IN THE ACTUAL DATE OF COMMERCIAL OPERATION;
SCHEDULE VI: TRANSFER CAPABILITY ADJUSTMENT.
This Agreement (“USER AGREEMENT”) is made the __ day of _____2013 (“the Commencement Date”).
BETWEEN:
(1) CHANNEL CABLE LIMITED, whose registered office is at Bryden Johnson, Kings Parade, Lower Coombe Street, Croydon CR0 1AA, United Kingdom (which expression shall where the context reasonably requires or permits include its assigns and legal successors in title hereinafter referred to as “Channel Cable”);
and
(2) The CAPACITY HOLDER, whose registered office is at [insert address];
Channel Cable and the Capacity Holder are hereinafter collectively referred to as the “Parties” and each as a “Party”.
RECITALS:
(A) Channel Cable Limited, is the owner and the operator of the Channel Cable Interconnector and wishes to sell the right to use capacity on the Channel Cable.
(B) The Capacity Holder is interested in acquiring the right to use capacity on the Channel Cable pursuant to the terms of this Agreement and the Channel Cable Access Rules.
(C) The Parties are entering into this Agreement for the purposes of giving effect to and binding themselves to the Channel Cable Access Rules and the terms and conditions upon which the Capacity Holder may use Contracted Capacity on the Channel Cable.
NOW IT IS HEREBY AGREED as follows:
1Definitions and interpretation
1.1In this Agreement including the recitals and the schedules, capitalised words and phrases have the meaning given to them below except where the context requires otherwise:
1.2Accord de Participation means an Accord de Participation signed by the Capacity Holder and RTE by which the Capacity Holder agrees to abide by the Règles d'Accès au Réseau Public de Transport Français pour des Importations et des Exportations;
1.3“Actual Availability” means, for any month, the actual availability, expressed as a percentage, of the Channel Cable to transfer electricity during that month, calculated in manner to exclude (a) the reduction in availability arising from up to 10 days of scheduled maintenance, during off-peak months and (b) any curtailment or reduction in the capability of the Channel Cable to transfer electricity if such curtailment or reduction arises from conditions on the UK or French electricity grid. For any month prior to the Actual Date of Commercial Operation, the Actual Availability for that month will be deemed to be equal to the Target Availability.
1.4“Actual Trailing Availability” means, for any month, the arithmetic average of the Actual Availabilities for the twelve (12) months.
1.5“Actual Full Load Electrical Losses” means the actual electrical losses over the Channel Cable during full load operation, as determined pursuant to the provisions of Schedule II.
1.6“Actual Capacity of the Channel Cable” shall have the meaning given to that term in Schedule VI of this Agreement.
1.7“Actual Date of Commercial Operation” means the date upon which the Interconnector is available for physical flow of electricity on the market.
1.8“Applicable Law”all relevant industry codes of practice, laws, permissions (including any relevant planning permission), consents, bye-laws, rules and regulations, all relevant EU legislation (and/or French and Great Britain legislation intended to bring into legal effect such EU legislation) and the requirements of any Competent Authority, as the same may be modified and amended from time to time during the term of this Agreement;
1.9“Agreement” means this User Agreement;
1.10“Approved Credit Rating” means a minimum medium term rating of BBB by Standard and Poor's or of Baa2 by Moody's Investor Service and in either case is not on credit watch with a negative outlook; provided that a Capacity Holder who does not have such credit rating shall nevertheless be deemed to have an Approved Credit Rating if Channel Cable is satisfied, at its absolute discretion, that the Capacity Holder has a level of financial strength;
1.11"Availability Period" means for any month the immediately preceding twelve consecutive months.
1.12 “Base Capacity Charge Rate” mean for any month the value determined for that month pursuant to the provisions of Schedule II.
1.13“Business Day” means a week-day on which banks are open for business and for dealings in sterling and euro deposits in both Paris and London;
1.14“Capacity Subcontracting Arrangement” means any arrangement between the Capacity Holder and another person under which the Capacity Holder allows the person, either directly or indirectly, to use the Contracted Capacity of the Capacity Holder;
1.15“Capacity Charges” means in respect of a Payment Period, the aggregate of the product of (a) the Final Capacity Charge Rate applicable to that Payment Period multiplied by (b) the Contracted Capacity applicable for that Payment Period (and so that, for the purposes of Clause 7 the Capacity Charges applicable to a settlement period in a given Payment Period shall be the Capacity Charges for that Payment Period, divided by the number of settlement periods in such Payment Period);
1.16“Capacity Confirmation” means the document(s) issued by Channel Cable appended to this Agreement at Schedule I, (which shall incorporate the provisions of this Agreement as if they were set out in full), evidencing the terms and conditions for the acquisition of the Contracted Capacity;
1.17“Competent Authority” means the UK Regulator, the French Regulator and any local, national or supra-national agency, authority, department, inspectorate, minister, ministry, official or public or statutory person (whether autonomous or not) of, or of the government of, the United Kingdom, France or the European Union;
1.18“Confidential Information” means any item of information, regardless of its form, disclosed under or in relation to this Agreement, other than:
(a)any item of information which is in the public domain; or
(b)any item of information which not being in the public domain, enters the public domain otherwise than as a result of a breach of confidentiality obligation owed in relation to that item of information of which the Recipient (as defined in Clause 18.1) is aware;
(c)was already known to the Recipient or was independently (of the Disclosing Party) acquired or developed by the Recipient without being in breach of its obligations under this Agreement;
1.19“Channel Cable Access Rules” means the rules, as amended from time to time, of that name established by Channel Cable providing inter alia for the operation and use of Contracted Capacity on the Interconnector, for simplicity and understanding the initial Access Rules are a direct mirror of IFA Access Rules Issue 8.0;
1.20“Channel Cable” means the rights to the electric transmission cable between the United Kingdom and France.
1.21“Control, Controlling or Controlled” means, in respect of any legal entity, either the direct or the indirect ownership of 51% of the voting rights or the right to appoint the majority of the members of the managing body;
1.22“Final Target Date of Commercial Operation” shall have the meaning given to such term in clause 3.2.
1.23“Final Capacity Charge Rate” means the capacity charge rate determined in accordance with the provisions of Schedule II.
1.24“Financial Security” means security for payment of amounts owed under this Agreement provided under clause 9;
1.25“Force Majeure” means in relation to a Party, any event or circumstance, or series of events or circumstances, beyond the reasonable control of that Party (“Affected Person”) which results in or causes the failure of that Affected Person to perform any of its obligations under this Agreement including strike, lockout or other industrial disturbance, act of the public enemy, war (declared or undeclared), threat of war, terrorist act, blockade, revolution, riot, insurrection, civil commotion, public demonstration, sabotage, act of vandalism, lightning, fire, storm, flood, earthquake, drought, unusually heavy or prolonged accumulation of snow or ice, explosion, fault or failure of plant and apparatus (which could not have been prevented by the conduct of a Reasonable and Prudent Operator) and acts of government such as but not limited to governmental restraint and application of any Applicable Law, cancellation of any permits, licences, authorisations and similar instruments (including the Exemption) by the relevant authorities.
1.26“Initial Target Date of Commercial Operation” shall have the meaning given to such term in clause 3.1.
1.27“Interconnector” means the “Channel Cable”.
1.28"Lender" means any person or agent or trustee of such who agrees to provide financing to Channel Cable for the Channel Cable.
1.29“Letter of Credit” shall have the meaning given to such term in Schedule III.
1.30“Material Breach” means any failure by either Party to substantially perform any material obligation under this Agreement, where such failure arises from negligence or intentional acts or omissions, and such failure is not otherwise excused under this Agreement.
1.31“NGET Grid Code” means the document referred to as the Grid Code in the National Grid Transmission Licence as in effect from time to time;
1.32“Payment Period” means a calendar month or part thereof.
1.33“Qualifying Issuer” means a legal person which possesses a current A rating or better awarded by Standard & Poor’s Rating Services or a current A3 rating or better awarded by Moody’s Investors Service Inc. in respect of its most recent unsecured (and unsubordinated) long term debt issue on any capital market, or, if the said agencies should both cease to publish such ratings, possesses an equivalent rating from another ratings agency of equal repute.
1.34“Contracted Capacity” means rights to use capacity on the Channel Cable allocated to the Capacity Holder as determined under and subject to this Agreement.
1.35“Reasonable and Prudent Operator” means an operator of an electricity transmission undertaking in good faith performing its obligations and in the conduct of its undertaking exercising that degree of skill, diligence, prudence and foresight which would reasonably be expected from a skilled and experienced operator with sufficient financial resources complying with the Applicable Law and any reference to the standard of a Reasonable and Prudent Operator shall be a reference to such degree of skill, diligence, prudence and foresight.
1.36“Règles d'Accès au Réseau Public de Transport Français pour des Importations et des Exportations” means the Règles d'Accès au Réseau Public de Transport Français pour des Importations et des Exportations established by RTE in the version published on RTE’s web site from time to time. These rules define the conditions to access RTE Transmission System to do exports and imports;
1.37“Related Party” means in relation to any individual or legal entity, any other legal entity which is under common Control with such legal entity, any other individual or legal entity Controlling such legal entity, or any other legal entity Controlled by such individual or legal entity;
1.38“RTE” means the “Réseau de Transport d’Electricité”;
1.39“RTE Grid Code” means the rules, including technical rules, establishing the minimum technical design and operation requirements for connection to the RTE Transmission System or to be established under Article 14 of the Law no. 2000-108 of 10 February 2000 as amended by the Law no. 2003-08 of 3 January 2003 relating to the modernisation and development of public electricity services;
1.40“Target Availability” shall have the meaning given to that term in Schedule II of this Agreement.
1.41“Target Full Load Electrical Loss” means the target electrical loss specified in clause 11.1 of this Agreement.
1.42The definitions and rules of interpretation in the Channel Cable Access Rules apply to this Agreement.
2Commencement and Duration
2.1Subject to clause 2.5, this Agreement shall commence on the date of execution of this Agreement by both Parties and shall continue in full force and effect until the earlier of (a) the latest date specified in paragraph 1(b) of the relevant Capacity Confirmation or (b) the date of any termination pursuant to clause 14.
2.2The expiry or termination of this Agreement (or the Capacity Confirmation) does not affect any rights or obligations which may have accrued prior to such expiry or termination and does not affect continuing obligations of each of the Parties under this Agreement which are expressed to continue after such expiry or termination.
2.3 Without limitation to the generality of clause 2.2, applicable provisions of this Agreement shall continue in effect after the date of termination of this Agreement only to the extent necessary (i) to provide for final billings and adjustments related to the period prior to such date of termination or as may be otherwise applicable after such date and (ii) to give effect to a Party's surviving rights and remedies under clauses 7, 8, 12, 14, 15, 16, 17, 18 and 19;
2.4Each capacity period shall commence at the time and date specified in paragraph 1(a) of the Capacity Confirmation as set out in Schedule 1 of this User Agreement, and expire at the time and date specified in paragraph 1(b) of the relevant Capacity Confirmation.
2.5Notwithstanding clause 2.1, the Parties’ respective obligations in respect of the sale of Contracted Capacity and the payment of the Capacity Charges shall commence upon the Actual Date of Commercial Operation as specified herein in clause 3.
3Actual Date of Commercial Operation
3.1No later than [insert date], Channel Cable shall provide written notice to the Capacity Holder specifying the initial target date of commercial operation (the “Initial Target Date of Commercial Operation”). The Initial Target Date of Commercial Operation shall be no earlier than [insert date], and no later than [insert date]. In the event that Channel Cable fails to provide such notice by [insert date], then the Initial Target Date of Commercial Operation shall be deemed to be [insert date].
3.2No later than six (6) months prior to the Initial Target Date of Commercial Operation, Channel Cable shall provide written notice to the Capacity Holder establishing the final target date of commercial operation (the “Final Target Date of Commercial Operation”). The Final Target Date of Commercial Operation shall be no earlier than three (3) months prior to the Initial Target Date of Initial Commercial Operation, and no later than six (6) months after the Initial Target Date of Initial Commercial Operation. In the event that Channel Cable fails to provide such notice to the Capacity Holder by the date that is six (6) months prior to the Initial Target Date of Commercial Operation, then the Final Target Date of Commercial Operation shall be deemed to be the Initial Target Date of Commercial Operation.
3.3No less than three (3) months prior to the anticipated Actual Date of Commercial Operation, Channel Cable shall provide written notice to Capacity Holder regarding the anticipated Actual Date of Commercial Operation.
3.4Channel Cable shall use reasonable commercial efforts to cause the Actual Date of Commercial Operation to occur on or before the Final Target Date of Commercial Operation
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DRAFT CAPACITY USER PURCHASE AGREEMENT
4Liquidated Damages for delay in the Actual Date of Commercial Operation
4.1If the Actual Date of Commercial Operation does not occur on or before the Final Target Date of Commercial Operation, then Channel Cable shall owe the Capacity Holder liquidated damages (“LD”) calculated pursuant to Schedule V of this Agreement.
4.2The Parties understand and agree that: (a) Capacity Holder's loss from a breach by Channel Cable under clause 3.3 and 3.4 of this Agreement would be uncertain and impossible to determine with precision; (b) the provisions set forth in this clause 4 limit the liability of Channel Cable and establish agreed-upon compensation and damages; (c) such provisions represent a reasonable endeavour on the part of Channel Cable and the Capacity Holder to estimate fair and reasonable compensation as liquidated damages for the damages sustained in those circumstances and do not constitute a penalty imposed on Channel Cable and (d) Channel Cable shall have no further obligations or liability to the Capacity Holder.
5Channel Cable Access Rules
5.1The Channel Cable Access Rules are hereby given effect between and made binding upon each Party with effect from the date of execution of this Agreement by both Parties.
5.2With effect from the date of execution of this Agreement by both Parties, each Party undertakes to the other Party to comply with and perform its obligations under this Agreement in accordance with and subject to the Channel Cable Access Rules.
6Warranties
6.1Each of the Party warrants to the other Party at the time of entering into this Agreement and during the term of this Agreement that to the best of its knowledge, information, and belief:
6.1.1the information and data provided by each of the Party to the other Party are true, accurate and complete in all respects;
6.1.2it will not by entering into this Agreement and the Channel Cable Access Rules infringe any anti-trust or competition legislation or any undertaking or other obligation arising under any anti- trust or competition legislation;
6.1.3it is duly incorporated and validly existing under the laws of its country of incorporation;
6.1.4it has full power and authority to enter into and perform this Agreement and the Channel Cable Access Rules and all necessary action has been taken on its part to authorise entry into and performance of this Agreement and the Channel Cable Access Rules;
6.1.5that this Agreement and the Channel Cable Access Rules constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms;
6.1.6that it is not insolvent and that it has no knowledge of any possible insolvency proceedings that may be brought against it in the immediate future.
6.2Without prejudice to clause 6.1, the Capacity Holder additionally warrants to Channel Cable that at the time of entering into this Agreement and during the term of this Agreement, that to the best of its knowledge, information, and belief:
6.2.1the Capacity Holder has taken the steps necessary to ensure that it has access to all the relevant documentation issued by Channel Cable including but not limited to the Channel Cable Access Rules.
6.2.2it is taking or will be taking all necessary steps to ensure that the following agreements are in place by the time the Capacity Holder is to be granted access to the Interconnector:
(i) a Use of System Interconnector Offer and Confirmation Notice with National Grid and if required by National Grid, must be party to the Framework Agreement established under CUSC;
(ii) a Framework Agreement as defined in the Balancing and Settlement Code; and
(iii) an Accord de Participation with RTE.
6.3If any of the above ceases to be true with regard to any of the Party at any time prior to termination of this Agreement, the Party shall promptly notify the other Party of that fact and shall provide full details.