EXHIBIT NO. 10.151
SHAREHOLDERS' AGREEMENT
among
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED,
HIMAL INTERNATIONAL POWER CORPORATION PVT. LTD.,
PANDA OF NEPAL,
RDC OF NEPAL,
and
INTERNATIONAL FINANCE CORPORATION
Dated as of the Closing Date
INDEX
Page No.
ARTICLE 1
Definitions
Section 1.1 Definitions 1
Section 1.2 Principles of Construction 3
ARTICLE 2
The Company
Section 2.1 Shareholding of the Company and the Sponsor
Shareholders. 4
Section 2.2 Ownership Free and Clear 5
Section 2.3 Boards of Directors 5
Section 2.4 Charter Documents; Other Actions 6
Section 2.5 Indemnification of Directors 8
Section 2.6 Dividend Policy 8
ARTICLE 3
Transfer of Shares
Section 3.1 Transferability of Shares 9
Section 3.2 HMGN Buyout 9
Section 3.3 Tag-Along Rights 10
Section 3.4 Legend 11
Section 3.5 Registration and Other Rights 11
ARTICLE 4
Miscellaneous
Section 4.1 No Inconsistent Agreements 14
Section 4.2 Recapitalization Exchanges, Etc 15
Section 4.3 Remedies 15
Section 4.4 Notices 15
Section 4.5 Benefit of Agreement 17
Section 4.6 No Waiver; Remedies Cumulative 17
Section 4.7 Documents 17
Section 4.8 Governing Law 17
Section 4.9 Counterparts; Integration 18
Section 4.10 Heading Descriptive 18
Section 4.11 Amendment or Waiver 18
Section 4.12 Severability 18
Section 4.13 Termination 18
Section 4.14 Expenses 18
Section 4.15 Joint Venture Agreement 18
EXHIBIT A
CERTIFICATE OF REGISTRATION OF THE COMPANY A-1
EXHIBIT B
MEMORANDUM AND ARTICLES OF ASSOCIATION,
as amended and as in effect, of the Company B-1
EXHIBIT C
REGISTRATION RIGHTS C-1
Section 1 Piggy-Back Rights C-1
Section 2 Indemnification C-2
Section 3 Restriction on Sale by the Company and
Sponsor Shareholders C-3
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "Agreement") is made and
entered into as of the Closing Date among BHOTE KOSHI POWER
COMPANY PRIVATE LIMITED, a private limited liability company
organized and existing under the Nepalese Company Act, 2021 (the
"Company"), HIMAL INTERNATIONAL POWER CORPORATION PVT. LTD., a
corporation organized and existing under the laws of Nepal
("HIPC"), PANDA OF NEPAL, a corporation organized and existing
under the laws of the Cayman Islands ("Panda of Nepal"), RDC OF
NEPAL, an exempted company with limited liability organized and
existing under the laws of the Cayman Islands ("RDC of Nepal"),
and INTERNATIONAL FINANCE CORPORATION, an international
organization established by Articles of Agreement among its
member countries ("IFC"). Each of HIPC, Panda of Nepal, RDC of
Nepal and IFC and any other Person who shall become a party to or
agree to be bound by the terms of this Agreement after the date
hereof and who shall own Shares directly in the Company is
sometimes hereinafter referred to individually as a "Shareholder"
and collectively as "Shareholders."
W I T N E S S E T H:
WHEREAS, IFC has entered into a certain IFC Investment
Agreement dated as of the Closing Date between the Company and
IFC (the "IFC Investment Agreement");
WHEREAS, the Company, IFC and DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH have entered into that certain
Investment Agreement General Conditions dated as of the Closing
Date (the "General Conditions"); and;
WHEREAS, it is a condition of the subscriptions and
disbursements under the IFC Investment Agreement that the parties
hereto shall have entered into this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. For all purposes of this
Agreement, capitalized terms used but not otherwise defined
herein shall have the meanings set forth in Schedule A to the
General Conditions. In addition, the following terms as used
herein have the following meanings:
"Accounting Firm" means an accounting firm to be mutually
agreed upon by the Lenders and the Company;
"Buyout" has the meaning set forth in Section 3.2;
"Change of Control" means, in respect of the Company, the
occurrence of one or more of the following
events: (i) an event or a series of events
occurs by which any Person or group of
Persons acting in concert (other than one or
more of the Sponsor Shareholders) shall have
become the beneficial owner (within the
meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of shares
of the Company, representing a majority of
the combined voting power of the outstanding
shares of the Company ordinarily having the
right to vote in the elections of directors
or (ii) directors nominated or elected by a
Person or a group of Persons acting in
concert (other than one or more of the
Sponsor Shareholders) shall constitute a
majority of the board of directors of the
Company or (iii) any direct or indirect sale,
lease, exchange or other transfer (in one
transaction or a series of related
transactions) of all, or substantially all,
of the assets of the Company to any Person or
group of Persons; provided, however, that
none of the events set forth in the preceding
clauses shall constitute a "Change of
Control" if caused directly by creditors
exercising remedies pursuant to any of the
Loan Documents;
"Charter Documents" means, with respect to any Person, (i) the
Certificate of Incorporation of such Person
and (ii) the Memorandum and Articles of
Association of such Person, as amended and as
in effect on the date of this Agreement;
copies of the Charter Documents of the
Company are attached hereto as Exhibits A and
B;
"Company" has the meaning set forth in the first
paragraph of this Agreement;
"Harza LP" means Harza Engineering Company
International L.P., a limited partnership
organized and existing under the laws of the
State of Delaware;
"Harza LLC" means Harza Engineering Company
International, a limited liability company, a
limited liability company organized and
existing under the laws of the State of
Wyoming;
"HIPC Shareholders" means Soaltee Enterprises, Soaltee Hotel
and Surya.
"IFC Nominee" has the meaning set forth in Section 2.3(b);
"Indemnitees" has the meaning set forth in Section 2.5;
"Issuer Offering" has the meaning set forth in Section 1(a) of
Exhibit C hereto;
"Joint Venture
Agreement" shall mean the Amended and Restated
Joint Venture Agreement among Himal
International Power Corporation Pvt. Ltd.,
Panda of Nepal, RDC of Nepal and
International Finance Corporation dated as of
the Closing Date;
"Panda" means Panda Energy International, Inc.,
a corporation organized and existing under
the laws of the State of Texas;
"Piggy-Back
Registration" has the meaning set forth in Section
1(a) of Exhibit C hereto;
"Public Offering" means any underwritten public offering of
equity securities or shares in the Company on
a firm commitment basis in accordance with
applicable securities regulations of any
stock exchange;
"Shareholder" has the meaning set forth in the first
paragraph hereof;
"Shareholder
Offering" has the meaning set forth in Section
1(a) of Exhibit C hereto;
"Sponsor" has the meaning set forth in the IFC
Investment Agreement;
"Sponsor
Shareholder" means, each of HIPC, Panda of Nepal and
RDC of Nepal and any transferees or assignees
thereof; provided, however, that HIPC, Panda
of Nepal and RDC of Nepal may only transfer
or assign shares in the Company or rights or
obligations hereunder to the extent and
subject to the conditions provided in
Section 4.6 hereof, and provided further that
IFC (or its assignees or designees) shall in
no event be a Sponsor Shareholder;
"Sponsor Transfer" has the meaning set forth in Section 3.3(a);
"Soaltee Enterprises" means Soaltee Enterprises Private Ltd.,
a private company organized and existing
under the laws of Nepal;
"Soaltee Hotel" means Soaltee Hotel Ltd., a public company
organized and existing under the laws of
Nepal;
"Surya" means Surya Enterprises Private Ltd., a
private company organized and existing under
the laws of Nepal;
"Tag-Along Notice" has the meaning set forth in Section 3.3(b);
"Transfer" means, with respect to any security or
shares, any direct or indirect transfer,
sale, assignment, pledge, hypothecation,
encumbrance or other disposition by any
Person of such security or shares (other than
the pledge of shares in the Company or any
other shares to IFC or the Trustee for the
benefit of the Lenders pursuant to the Share
Pledge Agreements);
"Transferring Sponsor
Shareholder" has the meaning set forth in Section 3.3(a).
Section 1.2 Principles of Construction. For all purposes
of this Agreement, the principles of construction set forth in
Schedule A to the General Conditions shall apply.
ARTICLE 2
The Company
Section 2.1 Shareholding of the Company and the Sponsor
Shareholders.
(a) Shareholding of the Company. The Company represents
and warrants that, as of the date hereof, the total amount of
issued, fully paid up and outstanding Shares, which is the only
class of shares authorized by its Charter Documents as of the
date hereof, is owned of record as follows:
Name Percentage of Share
Ownership
Panda of Nepal 75 %
RDC of Nepal 5 %
Himal International Power Corporation Pvt. Ltd. 10 %
International Finance Corporation 10 %
(b) Shareholding of Panda of Nepal. Panda of Nepal
represents and warrants that, as of the date hereof, the total
amount of issued, fully paid up and outstanding shares of Panda
of Nepal, which is the only class of shares authorized by its
Charter Documents as of the date hereof, is owned of record as
follows:
Name Percentage of Share
Ownership
Panda Bhote Koshi 100 %
(c) Shareholding of RDC of Nepal. RDC of Nepal represents
and warrants that, as of the date hereof, the total amount of
issued, fully paid up and outstanding shares of RDC of Nepal,
which is the only class of shares authorized by its Charter
Documents as of the date hereof, is owned of record as follows:
Name Percentage of Share
Ownership
Resource Development Consultants,
a limited liability company 50 %
Harza Engineering Company International L.P. 50 %
(d) Shareholding of HIPC. HIPC represents and warrants
that, as of the date hereof, the total amount of issued, fully
paid up and outstanding shares of HIPC, which is the only class
of shares authorized by its Charter Documents as of the date
hereof, is owned of record as follows:
Name Percentage of Share
Ownership
Soaltee Hotel Ltd. 3.00%
Surya Enterprises Private Ltd. 96.75%
Soaltee Enterprises Private Ltd. 0.25%
(e) It is expressly acknowledged and agreed that IFC's
subscription obligations shall be subject to the terms and
conditions of the IFC Investment Agreement.
(f) Each subscription and payment by the Sponsor
Shareholders in respect of Shares shall be made at such time as
may be determined by the Company.
The Company agrees with IFC that the Company will require
subscriptions and payments at such times as may be necessary to
ensure that the Company is able to fulfill the condition
contained in Section 3.5(i) of the General Conditions and
Article 2 of the Subscription Agreements so as to enable it to
utilize the Loans and IFC Subscription made available to it under
the Investment Agreement in order to continue to finance in a
timely manner the procurement, supply, construction and
installation of the Plant.
Section 2.2 Ownership Free and Clear. As of the date
hereof, each of the Company, and each of the Sponsor
Shareholders, represents and warrants to IFC, as to itself, that
no Person other than the respective Shareholders identified in
Section 2.1 hereof (and as so identified, limited to the shares
set forth adjacent to such shareholder's name), has any right,
title or interest in or to the shares described in Section 2.1
hereof, and that such shares have not been pledged, hypothecated
or encumbered by such shareholder (other than pursuant to the
Security Documents).
As of the date hereof, and deemed repeated and made by the
Company and each of the Sponsor Shareholders as of each date of
subscription and purchase of shares in the Company by each of the
Sponsor Shareholders, each of the Sponsor Shareholders represents
and warrants to IFC, as to itself, that no other Person has any
right, title or interest in or to the shares described in Section
2.1(b), (c) and (d), as the case may be, subscribed by it, and
that such shares have not been pledged, hypothecated or otherwise
encumbered by such Sponsor Shareholders (other than pursuant to
the Security Documents); and the Company represents and warrants
to IFC that it has no notice of any factual information to the
contrary. As of the date hereof, and deemed repeated and made by
the Company and each of the Sponsor Shareholders as of each date
of subscription and purchase of shares in the Company by each of
the Sponsor Shareholders, the Company and each of the Sponsor
Shareholders represents and warrants that, except for the rights
under this Agreement, the Investment Agreement or the Security
Documents, no options, warrants or rights to purchase shares in
the Company or securities or shares convertible into or
exchangeable for, any class of shares in the share capital of the
Company have been issued by it or are outstanding.
Section 2.3 Boards of Directors
(a) As provided in Section 17.2 of the Company's Articles
of Association, IFC shall have the right to appoint one (1)
Director. IFC shall have such other rights in connection
therewith (including, without limitation, the right to remove and
reappoint Directors and the right to appoint an alternate
Director) as may be provided in the Company's Articles of
Association or the Joint Venture Agreement or may otherwise be
available under applicable law.
(b) If and for so long as IFC owns five percent (5%) or
more of the Shares of the Company, to the extent a vote of the
Shareholders is legally required to appoint a Director, each of
the Sponsor Shareholders agrees to vote (whether directly or by
proxy) a sufficient number of shares of the Company owned or held
of record by it at any general or extraordinary meeting of the
shareholders of the Company called for the purpose of electing
Directors, and agrees to take all actions otherwise necessary, to
ensure the election of the Director nominated by IFC (the "IFC
Nominee") to the Company's Board of Directors. If an IFC Nominee
resigns, dies or otherwise is rendered unable to fulfill his
obligation as a Director of the Company, then, to the extent the
vote of remaining Directors is required to fill such vacancy,
each of the Sponsor Shareholders shall cause each remaining
Director who was a nominee of such Sponsor Shareholder to, and
such Director shall, vote to fill such vacancy with a person then
nominated by IFC to be the IFC Nominee on the Board of Directors
of the Company. Nothing contained herein shall require a
Director to take any action which is illegal under applicable
law.
(c) Each Sponsor Shareholder hereby agrees that, at any
time (if at all) that it is then entitled to vote for the
election or removal of an IFC Nominee or a Director appointed by
IFC, it will not vote in favor of the removal of such IFC Nominee
or Director unless such removal shall be (i) at the request of
IFC or (ii) for Cause as hereinafter defined. For the purposes
of this Section 2.3(b), "Cause" shall mean (A) the continued
failure by a Director substantially to perform his duties as a
Director of the Company (as relevant), the engaging by a Director
in conduct which is demonstrably and materially injurious to the
Company (as relevant) or the Director's conviction of any crime
constituting a felony or (B) the disqualification of such
Director to serve as a Director under applicable Nepalese law.
Section 2.4 Charter Documents; Other Actions.
(a) The Company represents and warrants that, as of the
date hereof, Exhibits A and B set forth accurate and complete
copies of its Charter Documents and the Joint Venture Agreement
as in full force and effect on the date hereof.
(b) The Company covenants that it will act in accordance
with its Charter Documents and the Joint Venture Agreement.
(c) So long as IFC owns five percent (5%) or more of the
Shares of the Company (but provided that the outside date by
which IFC may possibly put Shares pursuant to Section 3.5(b)
hereof has not occurred), then except as otherwise prohibited by
applicable law, the Company shall not, and each Sponsor
Shareholder shall ensure that the Company shall not, take any
action regarding the following matters without either the
affirmative vote of the IFC Nominee on the Board of Directors of
the Company or the affirmative vote of IFC at a meeting of the
Shareholders of the Company:
(i) any material amendment of the Charter
Documents of the Company or the Joint Venture
Agreement, unless expressly permitted by this
Agreement,
(ii) any merger, consolidation,
recapitalization or other reorganization of the
Company with or into any other Person,
(iii) the taking of any corporate or
other action by the Company for the (A)
commencement of a voluntary winding up under any
applicable bankruptcy, insolvency or similar law
now or hereafter in effect, (B) consent to the
entry of any order for relief in winding up by a
court or under the supervision of a court under
any such law, (C) consent to the appointment or
taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or
similar official of the Company or of any
substantial part of the property of the Company or
(D) making by the Company of a general assignment
for the benefit of creditors,
(iv) any sale, lease, exchange, transfer,
pledge, contribution to a joint venture or other
disposition of assets resulting in the diminution
of assets or other properties, or the incurrence
or exposure, contingently or directly, of
liability, which individually or in the aggregate
would materially impair the ability of the Company
to construct, own and operate the Plant in
accordance with the scope of the Project,
(v) any transaction between the Company and
any Affiliate, any officer or director of the
Company or any Shareholder (or any Affiliate of
any of them), except future arm's length
transactions and except the performance of the
Principal Documents, as applicable, in accordance
with the terms thereof,
(vi) any change in the Company's line of
business from the Project,
(vii) any change in any of the Sponsor
Shareholders' line of business from the holding of
shares in the Company and matters related thereto,
(viii) the entering into of any contract
which individually provides for aggregate payments
in excess of $10,000 or together with all other
contracts provides for aggregate payments in
excess of $100,000 and which is not in the
ordinary course of business or is on terms less
favorable to the Company than those available in
arm's length transactions between unrelated
parties, or
(ix) any expansion of the Project,
(x) for such time that any portion of the
IFC Loans is outstanding or during which IFC has
any commitment with respect to the IFC Loans, the
appointment of a replacement firm of Auditors in
the event the firm then engaged resigns its
engagement or such engagement is proposed to be
terminated by the Company,
(xi) except as required by the Share
Retention and Project Funds Agreement, any (A)
increase or reduction in the authorized share
capital of the Company, or (B) issuance, sale or
reduction by the Company of share capital or
securities convertible into, exchangeable for or
otherwise granting the right to acquire share
capital (including options, warrants and other
rights), and
(xii) any creation, grant, incurrence or
sufferance of any Liens other than as permitted by
the Investment Agreement (except that the
affirmative vote of the IFC Nominee on the Board
of Directors or the affirmative vote of IFC at a
meeting of Shareholders shall not be required for
the creation of a Lien in connection with the
refinancing of the Loans);
provided, that in the event IFC is entitled to nominate an IFC
Nominee as a Director of the Company, but has not nominated such
a Director as of the time of a meeting of the Board of Directors
called to consider any of the foregoing matters, the affirmative
vote of a Director who is an IFC Nominee shall not be required in
order for any of such actions to be validly taken by the Board of
Directors, but the affirmative vote of IFC as a Shareholder will
nonetheless be required in all events for the Company to take any
of the actions described above in this Section 2.4(c).
(d) With respect to clause (ix) of Section 2.4 (pertaining
to expansion of the Project), in the event that IFC, in its
capacity as a Shareholder, casts a negative vote but all other
necessary votes and corporate action have been taken to enable
the Company to take the action specified in said clause (ix) were
it not for the negative vote of IFC (in its capacity as a
Shareholder), then the Company may give notice to IFC that,
unless IFC changes its negative vote to an affirmative vote, the
Company, if and to the extent permitted by applicable law, will
elect to purchase IFC's Shares (the "Election Notice"). If,
within thirty (30) days after IFC receives the Election Notice
(such thirty (30) day period referred to herein as the "Initial
Thirty Day Period"), IFC changes the aforesaid negative vote to
an affirmative vote, then the Company shall not have the right to
purchase IFC's Shares. If, within the Initial Thirty Day Period,
IFC does not change the aforesaid negative vote to an affirmative
vote, then the Company, if and to the extent permitted by
applicable law, shall have the right, which must be exercised (if
at all) within sixty (60) days after the expiration of the
Initial Thirty Day Period, to purchase all (but not less than
all) of IFC's Shares at a purchase price per share that will
provide to IFC a return on equity calculated on the same basis as
the calculation provided in Section 3.5(b)(3) hereof. It is
expressly acknowledged and agreed that IFC's failure to approve
any expansion of the Project in IFC's capacity as a lender shall
not trigger any rights of the Company to purchase IFC's Shares as
set forth in this Section 2.4(d). In the event the Company is
not legally permitted to purchase the Shares or if the
Shareholders (other than IFC) so decide even if the Company is
legally permitted to purchase the Shares, the right of the
Company contemplated in this Section 2.4(d) to purchase all of
IFC's Shares may be exercised by the Shareholders (other than
IFC), pro rata to their then existing holdings of Shares or in
such other proportion as they may agree.
(e) Each Shareholder shall be permitted, at its own expense
(if acting then solely in its capacity as a Shareholder), to
visit during regular business hours any of the premises where the
business of the Company is conducted and to have access to its
books of account and records.
Section 2.5 Indemnification of Directors. Each Person
and each of its officers, directors, agents, nominees, designees
and employees (collectively, such Person and such others, the
"Indemnitees") who was or is at any time a party or is threatened
to be made a party to, or is involved in, any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such
Indemnitee is or was a Director of the Company, or acted or is
acting on behalf, or at the request or direction, of such
Director, shall be indemnified and held harmless by the Company
to the fullest extent permitted by applicable law, except to the
extent that any loss or expense incurred by such Indemnitee is
determined by a court of competent jurisdiction to have directly
and solely resulted from such Indemnitee's gross negligence or
willful misconduct. The right to indemnification conferred in
this Section 2.5 shall also include the payment by the Company of
expenses incurred in connection with any such action, suit or
proceeding in advance of its final disposition to the fullest
extent permitted by applicable law (except as aforesaid). The
obligations of the Company under this Section 2.5 shall survive
the termination of (i) any Person's role or status as a Director
of the Company or (ii) this Agreement.
Section 2.6 Dividend Policy. It is the Shareholders'
intention that the Company declare and pay semi-annual dividends
to the extent, and in the amounts, permitted by Section 6.3 of
the General Conditions and any other applicable provisions of the
Loan Documents, subject to and in accordance with the Company's
determination of prudent and sound business practices in relation
to the other needs or uses of capital for the construction,
ownership and operation of the Plant and subject to applicable
law.
ARTICLE 3
Transfer of Shares
Section 3.1 Transferability of Shares.
(a) (i) No Sponsor Shareholder shall (whether in
a single transaction or in a series of
transactions) Transfer any shares in the Company
directly or indirectly owned by it (beneficially
or otherwise) if, after giving effect to such
Transfer, a Change of Control of the Company would
occur, unless prior to such Transfer, the proposed
transferee of such shares enters into an agreement
in form and substance satisfactory to IFC whereby
such transferee covenants and agrees to be bound
to this Agreement to the same extent as a Sponsor
Shareholder; provided, however, that the entering
into of such agreement by such transferee shall
not be deemed to cure or otherwise waive the
occurrence of such Change of Control, and shall
not prejudice or impair the right of IFC to
exercise its option, and the obligation of each
Sponsor Shareholder to perform its obligations,
pursuant to Section 3.5(b) hereof upon the
occurrence thereof; and provided further that no
such agreement shall be required of Panda of Nepal
and/or RDC of Nepal in connection with any
Transfer by HIPC of Shares pursuant to Section
2.1(a)(iv) of the Share Retention and Project
Funds Agreement, it being acknowledged and agreed
that Panda of Nepal and RDC of Nepal, as parties
hereto, are bound to this Agreement.
(ii) None of Panda, Harza LLC, Harza LP,
Soaltee Enterprises, Soaltee Hotel or Surya shall
(whether in a single transaction or a series of
transactions) Transfer any shares in any of Panda
of Nepal, RDC of Nepal or HIPC, as the case may
be, directly or indirectly owned by it
(beneficially or otherwise) if, after giving
effect to such Transfer, any of the provisions of
Article 2 of the Share Retention and Project Funds
Agreement would be violated (regardless of whether
any of the Loans are outstanding or any commitment
remains with respect thereto).
(b) No provision of this Agreement shall be construed to
permit any Sponsor Shareholder or any of Panda, Harza LLC, Harza
LP, Soaltee Enterprises, Soaltee Hotel or Surya to Transfer any
of its shares in the Company, Panda of Nepal, RDC of Nepal or
HIPC, as the case may be, directly or indirectly owned by it
(beneficially or otherwise) in violation or contravention of any
provision of the Share Retention and Project Funds Agreement, the
Investment Agreement or any other Loan Document, from time to
time and as in effect, which provisions may prohibit, limit or
otherwise restrict the Transfer of any such shares, it being
acknowledged and agreed that in the event of any conflict between
those provisions and any provisions of this Agreement, such
provisions of the Share Retention and Project Funds Agreement,
the Investment Agreement and other Loan Documents shall control.
Section 3.2 HMGN Buyout. If HMGN shall purchase all of
the Company's right, title and interest in and to the Project
pursuant to the terms of Section 6 of the Project Agreement (a
"Buyout"), each Sponsor Shareholder shall, promptly following
receipt by the Company, the Trustee or the Agent, as applicable,
of the proceeds of the Buyout, cause the Company, in all events
subject to the provisions of the Loan Documents (including the
prepayment of all outstanding Obligations), to (i) declare and
pay as promptly as practicable a dividend in the maximum amount
permitted by applicable law, (x) to IFC in the event the Buyout
results from the Company's intentional or grossly negligent
actions as more particularly set forth in Sections 6.2(a) and (b)
of the Project Agreement and (y) otherwise to all Shareholders,
and (ii) immediately following payment of any dividend referred
to in clause (i) above, wind up the Company's operations,
liquidate and distribute proceeds and amounts therefrom in
accordance with applicable law and subject to the provisions of
the applicable Loan Documents and the Project Agreement.
Section 3.3 Tag-Along Rights.
(a) No Sponsor Shareholder shall Transfer any shares in the
Company other than for cash in an arm's length transaction in
accordance with this Agreement, the Share Retention and Project
Funds Agreement, the Investment Agreement, and the other Loan
Documents. If, at any time, any Sponsor Shareholder (a
"Transferring Sponsor Shareholder") proposes to Transfer shares
in the Company to any proposed transferee in any transaction or
series of related or similar transactions (such proposed Transfer
by a Transferring Sponsor Shareholder, a "Sponsor Transfer"),
such Transferring Sponsor Shareholder shall afford IFC the
opportunity to participate proportionately in such Sponsor
Transfer in accordance with this Section 3.3.
(b) IFC shall have the right to Transfer, at the same price
and upon identical terms and conditions as such proposed Sponsor
Transfer, such percentage of IFC's shares in the Company as shall
equal the following percentage: the percentage of the Company
being Transferred by the Transferring Sponsor Shareholder
multiplied by the quotient of 100 divided by 90. Thus, for
example, if RDC of Nepal Transfers five percent (5%) of the total
shares in the Company and IFC owns one hundred (100) shares in
the Company, IFC would be entitled to sell on account thereof the
following number of shares in the Company: (5% x 100/90) of 100
shares, which equals 5.56 shares. At the time of any such
proposed Sponsor Transfer, such Transferring Sponsor Shareholder
shall give notice to IFC of its right to sell shares in the
Company hereunder (a "Tag-Along Notice"), which notice shall
identify the proposed purchaser and state the number of shares in
the Company proposed to be Transferred in such Sponsor Transfer,
the proposed offering price and any other material terms and
conditions of the proposed Sponsor Transfer. The Tag-Along
Notice shall also contain a true and correct copy of any offer to
the Transferring Sponsor Shareholder by the proposed purchaser to
purchase such shares in the Company.
(c) Within forty-five (45) calendar days after the date of
delivery of a Tag-Along Notice, IFC may elect to participate in
such Sponsor Transfer pursuant to the terms and conditions of
such Tag-Along Notice by delivery of a notice to the Transferring
Sponsor Shareholder. IFC shall not be required to make any
representations and warranties to any Person in connection with
such Transfer except as to the existence of its legal title in,
and the absence of security interests created by IFC in, IFC's
shares in the Company and the authority for and the validity and
binding effect, against IFC, of any normal and customary
agreements entered into by IFC in connection with such Transfer.
(d) Notwithstanding anything to the contrary contained in
Section 3.3(a), (b) or (c), the provisions of such sections shall
not apply to the Transfer by HIPC of an amount of Shares of the
Company not to exceed five percent (5%) to Panda of Nepal and/or
RDC of Nepal in accordance with Section 2.1(a)(iv) of the Share
Retention and Project Funds Agreement. This Section 3.3(d) shall
not apply to a Transfer by a transferee or assignee of HIPC with
respect to such Shares.
Section 3.4 Legend. Each of the Company and the Sponsor
Shareholders agrees that each certificate representing shares in
the Company issued to the Sponsor Shareholder or any certificates
issued in exchange for or in replacement of any similarly
legended certificates, shall bear, to the extent permitted by
applicable law the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO RESTRICTIONS ON TRANSFER SET FORTH IN (i) THE SHARE
RETENTION AND PROJECT FUNDS AGREEMENT DATED AS OF THE
CLOSING DATE, AND (ii) THE SHAREHOLDERS' AGREEMENT
DATED AS OF THE CLOSING DATE, COPIES OF WHICH MAY BE
OBTAINED FROM THE COMPANY."
Section 3.5 Registration and Other Rights.
(a) The Company and each Sponsor Shareholder hereby grant
to IFC the registration and other rights set forth in Exhibit C
hereto, which is incorporated by reference herein as if fully set
forth herein. In furtherance of the foregoing (but not in
limitation thereof), each of the Company and each Sponsor
Shareholder agrees that, in connection with any Public Offering,
IFC shall have the right to approve, in advance of their use, all
terms and provisions that describe, refer to or make
representations with respect to IFC.
(b) Put Option.
(1) In the event that:
(A) on or before the Ten Year
Anniversary, any Sponsor shall have breached
any of its material obligations under the
Share Retention and Project Funds Agreement
and such breach shall not have been cured
within ten (10) days following its
occurrence; or
(B) on or before the Ten Year
Anniversary, the Company shall have
materially amended or altered its Charter
Documents (other than to increase its
authorized share capital) or the Joint
Venture Agreement without the prior written
consent of IFC; or
(C) on or before the Ten Year
Anniversary, the Company shall not have (i)
listed all outstanding shares of the Company
and all of IFC's shares in the Company and
(ii) registered fifty percent (50%) of all
outstanding shares of the Company, with such
registration including all of IFC's shares in
the Company, or such higher amount as
required by law, on the Nepal Stock Exchange
or another stock exchange, such as the Bombay
Stock Exchange, the Hong Kong Stock Exchange,
the Jakarta Stock Exchange, the Singapore
Stock Exchange and the Kuala Lumpur Stock
Exchange (if such registration is required
for listing by the rules applicable to such
other stock exchange), reasonably acceptable
to IFC; or
(D) on or before the Ten Year
Anniversary, a Change of Control specified in
Section 3.1(a)(i) shall have occurred and
such breach shall not have been cured within
ten (10) days following its occurrence, or
there shall have occurred a breach of the
obligations under Article 2 of the Share
Retention and Project Funds Agreement and
such breach shall have not have been cured
within ten (10) days following its
occurrence; or
(E) on or before the Ten Year
Anniversary, Panda sells or transfers its
direct or indirect beneficial ownership
interest in the Company; Harza LP and/or
Harza LLC sell or transfer their direct or
indirect beneficial ownership interest in the
Company; or any or all of the HIPC
Shareholders sell or transfer their direct or
indirect beneficial ownership interest in the
Company (except for any transfer expressly
permitted by Section 3.3(d), as to which this
Section 3.5(b)(1)(E) shall not apply),
then (i) the Company agrees (with respect to clauses (B) and (C)
above) that, if and to the extent permitted by law, it shall, at
the option of IFC (which option, in the case of clause (B), shall
expire two hundred seventy (270) days after IFC has received
written notice from the Company or a Sponsor Shareholder that the
events specified in such clause which trigger the option have
occurred; and in the case of clause (C), shall expire two hundred
seventy (270) days after IFC has received written notice from the
Company or a Sponsor Shareholder that the events specified in
such clause which trigger the option have occurred), purchase
some or all (at IFC's option) of IFC's shares in the Company;
provided, however, that the failure of the Company or a Sponsor
Shareholder to deliver any of the aforesaid notices (or any other
notices under this Section 3.5(b)) to IFC shall not preclude IFC
from exercising its option to put its shares to the Company upon
the occurrence of the event specified in any applicable clause
under this Section 3.5(b) which triggers the option, and
provided, further, that the Company may purchase such shares of
IFC only with funds available to the Company for the distribution
of dividends pursuant to the Investment Agreement, and (ii) each
of Panda of Nepal, RDC of Nepal, and HIPC agrees (with respect to
clauses (D) and (E) above) that it shall, at the option of IFC
(which option, in the case of clause (D), shall expire two
hundred seventy (270) days after IFC has received written notice
from the Company or a Sponsor Shareholder that the events
specified in such clause which trigger the option have occurred;
and in the case of clause (E), shall expire forty-five (45) days
after IFC has received written notice from the Company or a
Sponsor Shareholder that the events specified in such clause
which trigger the option have occurred), purchase some or all (at
IFC's option) of IFC's shares in the Company; provided, however,
that in the case of clause (E), Panda of Nepal, RDC of Nepal, or
HIPC (as the case may be) shall only be required to purchase such
percentage of IFC's shares in the Company as shall equal the
following percentage: the percentage of the Company being
Transferred beneficially, directly or indirectly, by Panda, Harza
LP and Harza LLC, or the HIPC Shareholders (as the case may be)
multiplied by the quotient of 100 divided by 90; it being
understood that with respect to clause (E), Panda of Nepal shall
only be obligated to purchase IFC's shares in the event of a
direct or indirect Transfer by Panda, RDC of Nepal shall only be
obligated to purchase IFC's shares in the case of a direct or
indirect Transfer by Harza LP and/or Harza LLC, and HIPC shall
only be obligated to purchase IFC's shares in the case of a
direct or indirect Transfer by any of the HIPC Shareholders)
(except for any transfer expressly permitted by Section 3.3(d));
and provided further, that in the case of a Transfer by Panda
under clause (E), Panda of Nepal shall not be required on account
thereof to purchase IFC's shares to the extent the Transfer by
Panda involves shares which are not required to keep Panda's
beneficial ownership in the Company above fifty-one percent (51%)
of the total ownership interest in the Company; and provided
further, that in the case of clause (D), each Sponsor Shareholder
shall only be required to purchase its Sponsor Share of IFC's
shares in the Company, and (iii) with respect to clause (A),
Panda of Nepal, RDC of Nepal or HIPC, whichever has breached (or
has had a direct or indirect parent Sponsor breach) the material
obligation under the Share Retention and Project Funds Agreement,
agrees that it shall, at the option of IFC (which option, in the
case of said clause (A), shall expire two hundred seventy (270)
days after IFC has received written notice from the Company or
the breaching Sponsor Shareholder that the events specified in
such clause which trigger the option have occurred), purchase
such percentage of IFC's shares in the Company as shall equal the
following percentage: the percentage of the Company owned by the
breaching Sponsor Shareholder multiplied by the quotient of 100
divided by 90. Thus, for example with respect to clause (A), if
RDC of Nepal is the breaching Sponsor Shareholder and owns five
percent (5%) of the total shares in the Company and IFC owns one
hundred (100) shares in the Company, IFC would be entitled to
sell on account of the breach by RDC of Nepal under clause (A)
the following number of shares in the Company: (5% x 100/90) of
100 shares, which equals 5.56 shares. Furthermore, for example
with respect to clause (E), if Panda were to own fifty percent
(50%) of the total shares in Panda of Nepal, and Panda of Nepal
were to own fifty percent (50%) of the Shares in the Company, and
Panda were to Transfer to an entity (the "Panda Transferee")
which is not owned by Panda fifty percent (50%) of Panda's shares
in Panda of Nepal (thereby resulting in a Transfer by Panda of a
twelve and one-half percent (12.5%) indirect beneficial ownership
interest in the Company) and IFC owns one hundred (100) shares in
the Company, IFC would have the option to sell to Panda of Nepal
on account of the Transfer by Panda under clause (E) the
following number of shares in the Company: (12.5% x 100/90) of
100 shares, which equals 13.89 shares.
(2) In the event the Company is not legally
permitted to purchase, does not have sufficient
funds which would otherwise be available for
distribution of dividends, or otherwise fails to
purchase, IFC's shares in the Company in
connection with clause (B) or (C) of
Section 3.5(b)(1) within sixty (60) days after IFC
has given notice of its exercise of its option to
put such shares to the Company, then each Sponsor
Shareholder agrees that it shall, at the option of
IFC, purchase its Sponsor Share of IFC's shares in
the Company.
(3) Any purchase of IFC's shares in the
Company by the Company or by any Sponsor
Shareholder in connection with clause (1)(A), (B),
(C), or (D) of Section 3.5(b)(1) or in connection
with Section 3.5(b)(2) shall be at a price per
share that will provide a return on equity, taking
into account dividends paid and any prior return
of capital, for IFC of twelve percent (12%) per
annum calculated for the period from the date on
which IFC acquired its shares through the date on
which IFC's shares are purchased and measured in
constant Dollars by adjusting all Dollar amounts
by the rate of change during the foregoing
calculation period in the U.S. Consumer Price
Index for all urban consumers.
(4) In the event any Sponsor Shareholder is
required to purchase IFC's shares in the Company
pursuant to clause (E) of Section 3.5(b)(1), the
parties shall in good faith promptly attempt to
reach mutual agreement on the price to be paid for
such IFC shares (the "Purchase Price"). If the
parties are unable to mutually agree on the
Purchase Price within thirty (30) days after IFC
has given notice of its option to put the IFC
shares in the Company to the Sponsor Shareholders
(the "Put Notice"), the parties shall in good
faith promptly attempt to reach mutual agreement
on an appraiser to determine the Purchase Price.
If the parties are unable to mutually agree on an
appraiser within fifteen (15) days, the parties
shall request that the Secretary General of the
Permanent Court of Arbitration at The Hague
appoint such appraiser. The appraiser shall be
directed to make his valuation within thirty (30)
days after his appointment and the Purchase Price
shall be the Purchase Price determined by such
appraiser. The appraiser appointed pursuant to
this clause (4) shall be an independent certified
public accountant or investment banker with at
least ten (10) years' experience in valuing
independent power projects and shall not be a
present employee or agent of, or consultant or
counsel to, any party to any Principal Document or
any affiliate of any such party. The valuation of
the Purchase Price shall be in writing. The
expenses of the appraiser appointed pursuant to
this clause (4) shall be borne by the Company.
(i) IFC shall not exercise its
option to put its shares in the Company to
the Company or to the Sponsor Shareholders in
the case of clause (C) above in the event
that IFC has foreclosed upon the Project
pursuant to the Investment Agreement and the
Security Documents.
(ii) IFC hereby agrees that it
will, at the written request of the Company
but at no cost or expense to IFC, reasonably
cooperate with the Company to establish a
holding company for the purpose of the
listing of the Shares; provided, however,
that the foregoing shall not require IFC to
take any action which it, in its good faith
judgment, believes (A) may impair its
security interest or other Lien on any
Collateral or (B) is contrary to applicable
law.
ARTICLE 4
Miscellaneous
Section 4.1 No Inconsistent Agreements. Each Sponsor and
the Company represents and warrants to IFC that none of them or
their Affiliates has entered, and each Sponsor and the Company
agrees with IFC that, without IFC's consent, none of them or
their Affiliates will hereafter enter, into any agreement with
respect to the shares in the Company or securities of the Company
that is inconsistent with the rights granted to any of the
Shareholders in this Agreement.
The Company represents and warrants to each Shareholder that it
has not entered into any agreement (other than this Agreement)
with respect to any of its debt or equity securities granting to
any Person rights similar to those described in Exhibit C.
Section 4.2 Recapitalization Exchanges, Etc. In the
event that any share capital or other securities or shares are
issued in respect of, in exchange for, or in substitution of, any
Shares by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or
complete liquidation, bonus shares, split-up, sale of assets,
distribution to shareholders or combination of the Shares or any
other change in capital structure of the Company (including the
increase in authorized capital thereof), appropriate adjustments
shall be made with respect to the relevant provisions of this
Agreement so as to fairly and equitably preserve, as far as
practicable, the original rights and obligations of the parties
hereto under this Agreement and the term "Shares," as used
herein, and references herein to shares in the Company shall be
deemed to include shares of such share capital or other
securities or shares, as appropriate.
Section 4.3 Remedies. Each of the Company and the
Sponsor Shareholders acknowledges and agrees that in the event of
any breach of this Agreement by any one of them, IFC would be
irreparably harmed and could not be made whole solely by monetary
damages. Each of the Company and the Sponsor Shareholders
accordingly agrees (i) to waive the defense that in any action
for specific performance a remedy at law would be adequate, and
(ii) that IFC, in addition to any other remedy to which it may be
entitled at law or in equity, shall be entitled to compel
specific performance of this Agreement in any action instituted
in the Courts of the State of New York in the Borough of
Manhattan or of the United States District Court for the Southern
District of New York or in any court of competent jurisdiction in
Nepal or elsewhere. Each of the Company and the Sponsor
Shareholders irrevocably submits to the nonexclusive jurisdiction
of any State or Federal court sitting in New York City over any
suit, action or proceeding arising out of or relating to this
Agreement. Each of the Company and the Sponsor Shareholders
waives, to the fullest extent permitted by law, any objection it
may now or hereafter have to the laying of venue of any such
suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding has been brought
in an inconvenient forum. Each of the Company and the Sponsor
Shareholders agrees that a final judgment in any such suit,
action or proceeding brought in any such court shall be
conclusive and binding upon it and may be enforced in any other
courts to the jurisdiction of which it is or may be subject, by
suit upon such judgment or by any other procedure applicable in
that jurisdiction. Each of the Company and the Sponsor
Shareholders hereby irrevocably designates, appoints and empowers
CT Corporation System, with offices on the date hereof at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its designee,
appointee and agent to receive, accept and acknowledge for and on
its behalf, and in respect of its property, service of any and
all legal process, summons, notices and documents which may be
served in any such action or proceeding. If for any reason such
designee, appointee and agent shall cease to be available to act
as such, the Company and each of the Sponsor Shareholders agrees
to designate a new designee, appointee and agent in New York
City. The Company and each of the Sponsor Shareholders further
irrevocably consents to the service of process in any such action
or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it, at its address set forth
below, such service to become effective fifteen (15) days after
such mailing. Nothing herein shall affect the right of any party
to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the
Company or the Sponsors in Nepal or in any other jurisdiction.
Section 4.4 Notices. Each communication given pursuant
to or in accordance with the provisions of this Agreement shall
be made by facsimile transmission or telex, courier or otherwise
in writing. Each communication or document to be delivered to
any party under this Agreement shall be sent to that party at the
facsimile number or telex number or address, and marked for the
attention of the Person (if any), from time to time designated by
that party to IFC (or, in the case of IFC, by it to each other
party) for the purpose of this Agreement. Notice shall be deemed
to have been given (a) (i) when sent by overnight courier
service, on the Business Day following the date of delivery to
such courier service, or such later day as demonstrated by a bona
fide receipt therefor or (ii) in the case of deliveries by
courier service to Nepal or the Cayman Islands, on the seventh
(7th) day following the date of delivery to such courier service,
or such later date as demonstrated by a bona fide receipt
therefor, (b) when presented personally, or (c) when transmitted
by facsimile, upon receipt of confirmation. Any party may
designate from time to time by written notice to the other
parties another address to which notices are to be sent.
For the Company:
Address: c/o Panda Energy International Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
For HIPC:
Address: x/x Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxx
Xxxxx
Attention: Chairman
Facsimile: 011 977-1-272201
For Panda of Nepal:
Address: c/o Panda Energy International, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000 0000
For RDC of Nepal:
Address: c/o Harza Engineering Company International X.X.
Xxxxx Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
For IFC:
Address: International Finance Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Director, Power Department
Facsimile: (000) 000-0000
Section 4.5 Benefit of Agreement. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by
the parties hereto and their respective successors and permitted
assigns and the Indemnities referred to in Section 2.5; provided,
however, that none of the Sponsor Shareholders nor the Company
may assign or transfer any of its respective rights or
obligations hereunder without the prior written consent of IFC
except as expressly permitted herein, in the Investment
Agreement, the Share Retention and Project Funds Agreement and
the other Loan Documents. At its election, IFC may transfer,
assign or grant its rights hereunder in connection with a
Transfer of any or all of its then owned shares in the Company,
and in connection therewith, each Sponsor Shareholder and the
Company agree to and shall join in a written acknowledgement that
all such rights extend in favor of such IFC transferee; provided,
however, that any such IFC transferee shall not have the
following special rights hereunder which extend in favor of IFC
but not to any of the other Sponsor Shareholders: the right to
affirmatively approve certain actions as set forth in Section 2.4
hereof, the tag-along rights as set forth in Section 3.3 hereof,
and the registration rights and the put option set forth in
Section 3.5 hereof. Any assignee of rights or obligations, or
both as applicable, of any Sponsor Shareholder hereunder will be
required by the assignor and each other Sponsor Shareholder to
enter into an agreement (acceptable in form and substance to IFC)
to be bound by the terms of this Agreement.
Section 4.6 No Waiver; Remedies Cumulative. No failure
or delay on the part of any party hereto in exercising any right,
power or privilege hereunder and no course of dealing between the
parties hereto shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The
rights, powers and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers and remedies
which the parties hereto would otherwise have. No notice to or
demand on any party hereto in any case shall entitle any party
hereto to any other or further notice or demand in similar or
other circumstances (other than as specifically required pursuant
to the provisions of this Agreement) or constitute a waiver of
the rights of any party hereto to any other or further action in
any circumstances without notice or demand.
Section 4.7 Documents. All documents to be furnished or
communications to be given or made under this Agreement shall be
in the English language or, if in another language, shall be
accompanied by a translation into English certified as to
accuracy and completeness by a representative of the Company,
which translation, subject to its acceptance by IFC, shall be the
governing version among the Sponsors, the Company and IFC.
Section 4.8 Governing Law. This Agreement and the rights
and obligations of the parties hereunder shall be construed in
accordance with and be governed by the law of the State of New
York without regard to the conflicts of laws provisions thereof
(other than Sections 5-1401 and 5-1402 of the General Obligations
Law of the State of New York), save and except (for avoidance of
doubt), the application of the Nepalese Company Act, 2053 as it
may or shall apply to the powers of the Company and the internal
management of its affairs.
Section 4.9 Counterparts; Integration. This Agreement
may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A
set of counterparts executed by all the parties hereto shall be
lodged with the Company. This Agreement (together with the
Memorandum of Association and the Articles of Association and the
Joint Venture Agreement) constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to
the subject matter hereof.
Section 4.10 Heading Descriptive. The headings of the
several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the meaning
or construction of any provision of this Agreement.
Section 4.11 Amendment or Waiver. Neither this Agreement
nor any of the terms hereof may be amended, changed, waived,
discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing signed by all of the
parties hereto.
Section 4.12 Severability. If any provision hereof is
invalid or unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions
of the parties hereto as nearly as may be possible; and (ii) the
invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
Section 4.13 Termination. This Agreement shall terminate
upon the earliest of (i) the purchase of all of the shares in the
Company of IFC pursuant to the exercise by IFC of the put option
or options granted pursuant to Section 3.5(b) hereof, and (ii)
the date of consummation of a Full Transfer which does not
include the transfer by IFC of its rights under this Agreement.
For the purposes of this Section 4.13, a Full Transfer means a
Transfer of all (but not less than all) of its then owned shares
in the Company; provided, however, that any indemnities provided
hereunder for the benefit of IFC or the Trustee shall survive any
termination.
Section 4.14 Expenses. Without in any way limiting the
generality of the Investment Agreement, the Company agrees to pay
to IFC or as IFC may direct all fees and expenses of IFC
(including legal and other) incurred in connection with this
Agreement.
Section 4.15 Joint Venture Agreement. The parties hereto
acknowledge and agree that nothing contained in the Joint Venture
Agreement or the Company's Memorandum of Association or Articles
of Association is intended to diminish in any way the rights of
IFC under this Agreement or the obligations of any of the Sponsor
Shareholders or the Company under this Agreement. In the event,
however, that anything contained in the Joint Venture Agreement
or such Memorandum of Association or Articles of Association
would at any time so diminish the rights of IFC under this
Agreement or the obligations of any of the Sponsor Shareholders
or the Company under this Agreement, the Sponsor Shareholders and
the Company shall promptly amend the Joint Venture Agreement and
such Memorandum of Association and Articles of Association in
order to eliminate the aforesaid diminishment in rights and
obligations under this Agreement, to the extent permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the date first above written.
ATTESTATION OF WITNESSES:
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
Name: By:
Occupation: Name:
Address: Title:
HIMAL INTERNATIONAL POWER CORPORATION
PVT. LTD.
Name: By:
Occupation: Name:
Address: Title:
PANDA OF NEPAL
Name: By:
Occupation: Name:
Address: Title:
RDC OF NEPAL
Name: By:
Occupation: Name:
Address: Title:
INTERNATIONAL FINANCE CORPORATION
Name: By:
Occupation: Name:
Address: Title:
EXHIBIT A
CERTIFICATE OF REGISTRATION OF THE COMPANY
EXHIBIT B
MEMORANDUM AND ARTICLES OF ASSOCIATION,
as amended and as in effect, of the Company
EXHIBIT C
REGISTRATION RIGHTS
Section 1. Piggy-Back Rights.
If at any time the Company or any Sponsor Shareholder
proposes to make a Public Offering, the Company or such Sponsor
Shareholder, as applicable, shall give written notice to IFC of
such proposed Public Offering as soon as practicable but in no
event less than sixty (60) calendar days prior to any proposed
filing with applicable regulatory authorities in connection with
such proposed Public Offering (a "Piggy-Back Registration"). IFC
shall have the opportunity to sell in such proposed Public
Offering, and register with applicable regulatory authorities,
such number of shares in the Company as hereinafter provided. A
Public Offering in which the Company offers shares is sometimes
hereinafter referred to as an "Issuer Offering" and a Public
Offering in which the Company does not offer shares is sometimes
hereinafter referred to as a "Shareholder Offering." The Company
or such Sponsor Shareholder shall cause the managing underwriter
or underwriters of the proposed Public Offering to include in
such Public Offering the shares requested to be included by IFC
on the same terms and conditions as the Company's or such Sponsor
Shareholder's shares in the Company. IFC may withdraw its
request for inclusion of shares in the proposed Public Offering
at any time prior to ten (10) days before the commencement of the
Public Offering by giving written notice to the Company of its
request to withdraw. The Company may withdraw a Piggy-Back
Registration at any time prior to the time it becomes effective
under applicable law, provided that the Company shall reimburse
IFC for all reasonable out-of-pocket expenses (including legal
fees and expenses) incurred prior to such withdrawal.
(a) Number of Shares and Apportionment in an Issuer
Offering. In an Issuer Offering, IFC may include such number of
shares in the Company as it may request. If the managing
underwriter of such Issuer Offering shall inform the Company and
the holders of shares requesting such registration by letter of
its opinion that the number of shares requested to be included in
such registration exceeds the number which can be sold in such
Issuer Offering or that the inclusion would adversely affect the
marketing of the securities to be sold by the Company therein,
then the Company may include all securities proposed by the
Company to be sold for its own account and may decrease the
number of shares so proposed and so requested to be included in
such Public Offering to the extent necessary to reduce the number
of shares to be included in the registration to the level
recommended by the managing underwriter. In the event of such a
reduction, the number of shares to be sold by Sponsor
Shareholders and IFC shall be reduced (including to zero) on a
pro rata basis in relation to the number of shares proposed to be
offered for sale by each of them.
(b) Number and Apportionment of Shares in Shareholder
Offerings. In a Shareholder Offering, IFC may include a number
of shares in the Company equal to or less than the number
(rounded upward to the nearest whole number) determined by
multiplying the number of shares in the Company then owned by IFC
by a fraction (i) the numerator of which is the number of shares
in the Company owned by Sponsor Shareholders requested to be
included in such Shareholder Offering and (ii) the denominator of
which is the total number of shares in the Company then owned by
all Sponsor Shareholders. If the managing underwriter of such
Shareholder Offering shall inform the holders of shares
requesting such registration by letter of its opinion that the
number of shares requested to be included in such registration
exceeds the number which can be sold in such Shareholder
Offering, the number of shares so proposed and so requested to be
included in such Public Offering shall be decreased to the extent
necessary to reduce the number of shares to be included in the
registration to the level recommended by the managing
underwriter. In the event of such a reduction, the number of
shares to be sold by Sponsor Shareholders and IFC shall be
reduced on a pro rata basis in relation to the number of shares
proposed to be offered for sale by each of them.
(c) To the extent consistent with the tax objectives of the
Sponsor Shareholders, the Company will use all reasonable efforts
to cause all shares included in the Piggy-Back Registration to be
listed on the Nepalese stock exchange or another stock exchange,
such as the Bombay Stock Exchange, the Hong Kong Stock Exchange,
the Jakarta Stock Exchange, the Singapore Stock Exchange and the
Kuala Lumpur Stock Exchange, reasonably acceptable to IFC.
(d) In connection with any Piggy-Back Registration, each
Sponsor Shareholder selling in the Public Offering shall pay all
out-of-pocket expenses (including fees and disbursements of its
counsel) incurred by it (including underwriting discounts and
commissions applicable to its sold Shares). The Company will pay
all other expenses of the Public Offering, including, without
limitation, all registration, filing and National Association of
Securities Dealers, Inc. (or similar body) fees, all fees and
expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and
delivery expenses, the reasonable fees and disbursements of
counsel for IFC, the Company and of the Company's independent
accountants, including the expenses of any special audits or
"cold comfort" letters required by or incident to such
performance and compliance and premiums and other costs of
policies of insurance obtained by the Company against liabilities
arising out of the Public Offering.
Section 2. Indemnification.
(a) The Company (and each of Panda of Nepal, RDC of Nepal
and HIPC with respect to its own statements or other actions)
agree to indemnify and hold harmless IFC, its officers,
directors, employees and agents, and each Person, if any, who
controls IFC (each, an "Indemnified Party") from and against any
loss, claim, damage or liability and any action in respect
thereof to which such Indemnified Party may become subject under
applicable securities laws or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or
prospectus relating to the shares in the Company (as amended or
supplemented if the Company shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or arises
out of, or is based upon, any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
shall reimburse each Indemnified Party for any legal and other
expenses reasonably incurred by that Indemnified Party in
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action; provided however,
none of the Company, Panda of Nepal, RDC of Nepal or HIPC shall
have any indemnification obligations pursuant hereto to the
extent that any such loss, claim, damage or liability, or such
action, suffered or incurred by the Indemnified Party is
determined by a court of competent jurisdiction to have directly
and solely resulted from such Indemnified Party's gross
negligence or willful misconduct.
(b) If the indemnification provided for in paragraph (a)
above is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to therein, then
the Company (and each of Panda of Nepal, RDC of Nepal and HIPC
with respect to its own statements or other actions)
(collectively, the "Indemnifying Party"), in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities as between the Indemnifying Party
on the one hand and the Indemnified Party on the other, in such
proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and of the Indemnified Party in connection
with statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such party, and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
Section 3. Restriction on Sale by the Company and Sponsor
Shareholders. Each of the Company and the Sponsor Shareholders
agrees not to effect any sale or distribution of any shares in
the Company, or any shares or securities similar to shares in the
Company, or any shares or securities convertible into or
exchangeable or exercisable for shares in the Company, during the
fourteen (14) calendar days prior to, and during the 180-day
period beginning on, the later of (x) the effective date of any
registration statement (except as part of such registration
statement) and (y) the commencement of a public distribution of
shares in the Company, except shares included in the Public
Offering.
