EXHIBIT NO. 10.143.02
INVESTMENT NUMBER 7365
Special Conditions
between
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
and
INTERNATIONAL FINANCE CORPORATION
Dated as of the Closing Date
TABLE OF CONTENTS
PAGE NOS.
ARTICLE 1
Special Conditions and General Conditions; Definitions
Section 1.1Special Conditions and General Conditions 1
Section 1.2 General Definitions. 1
ARTICLE 2
The Project and Financial Plan
Section 2.1 The Project. 1
Section 2.2 Financial Plan - Estimated Project Cost. 2
ARTICLE 3
Agreement for the IFC Loans
Section 3.1 The IFC Loans. 2
Section 3.2 Disbursement Procedure. 2
Section 3.3 Interest. 3
Section 3.4 Fees. 4
Section 3.5 Repayment. 6
Section 3.6 Voluntary Prepayment. 8
Section 3.7 Mandatory Prepayment. 9
Section 3.8 Prepayment Premium. 13
Section 3.9 Additional Interest. 14
Section 3.10 Payments in Dollars. 14
Section 3.11 Allocation of Partial Payments 15
Section 3.12 Suspension or Cancellation of Disbursements by IFC 15
Section 3.13 Termination of Commitment. 16
Section 3.14 Cancellation by the Company 16
Section 3.15 Illegality of Participation 16
Section 3.16 Funding Costs 17
Section 3.17 Maintenance Amount 17
ARTICLE 4
IFC Subscription
Section 4.1 Subscription and Disbursement 17
Section 4.2 Actions Prohibited until IFC Shares Issued 18
Section 4.3 Suspension and Cancellation of IFC Subscription 19
Section 4.4 Agreement to Cooperate. 20
Section 4.5 IFC Board Seat 20
ARTICLE 5
Representations and Warranties
Section 5.1 Representations and Warranties Contained in
General Conditions. 20
Section 5.2 Rights and Remedies not Limited 21
ARTICLE 6
Conditions of Disbursement
Section 6.1 Conditions of Initial Disbursement 21
Section 6.2 Conditions of All Disbursements and Subscriptions
and Disbursements under the IFC Subscription 21
Section 6.3 Disbursement Relationship Among IFC Loans and the
IFC Subscription 22
Section 6.4 No Waivers 22
ARTICLE 7
Particular Covenants
Section 7.1 Particular Covenants. 23
ARTICLE 8
Events of Default
Section 8.1 Events of Default 23
ARTICLE 9
Miscellaneous
Section 9.1 Notices 23
Section 9.2 English Language 23
Section 9.3 Expenses 24
Section 9.4 Jury Trial 24
Section 9.5 Confidential Information 24
SCHEDULE 2.2(a)
FINANCING PLAN 26
SCHEDULE 2.2(b)
PROJECT COSTS 27
SCHEDULE 3.2(a)(i)
FORM OF IFC DISBURSEMENT REQUEST 28
SCHEDULE 3.2(a)(ii)
FORM OF IFC LOANS DISBURSEMENT RECEIPT 31
SCHEDULE 4.1(b)
FORM OF SUBSCRIPTION REQUEST 32
ANNEX A
METHODOLOGY FOR TRANCHE RATE PRICING CALCULATION 35
AGREEMENT, dated as of the Closing Date, between BHOTE KOSHI
POWER COMPANY PRIVATE LIMITED, a private limited liability
company organized and existing under the laws of the Kingdom of
Nepal (the "Company") and INTERNATIONAL FINANCE CORPORATION, an
international organization established by Articles of Agreement
among its member countries ("IFC"). (Capitalized terms used
herein shall be defined as provided in Section 1.2 hereof).
WHEREAS, the Company has requested IFC to make term loans to
it, in each case on the terms and subject to the conditions set
forth in this Agreement, for the purpose of financing a portion
of the costs of construction of the Company's proposed run of the
river hydroelectric power facility with a rated capacity of 36 MW
(nominal net) and a 25 km transmission line, the Upper Bhote
Koshi electric power project, in the Sindhupalchok District of
Nepal;
WHEREAS, IFC proposes to acquire shares of the Company
pursuant to Article 4 hereof;
WHEREAS, IFC is willing to make such term loans to the
Company and to subscribe for such shares of the Company on the
terms and subject to the conditions set forth in this Agreement,
for the purpose described above;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Special Conditions and General Conditions; Definitions
Section 1.1 Special Conditions and General Conditions.
This document is entitled "IFC Special Conditions". A document
entitled "Investment Agreement General Conditions" (the "General
Conditions") is appended hereto. Such two documents together
constitute the IFC Investment Agreement, dated the date of the
IFC Special Conditions between IFC and the Company (collectively,
this "Agreement"). If any provision of the General Conditions is
inconsistent with a provision of the IFC Special Conditions, the
provision of the IFC Special Conditions shall prevail.
Section 1.2 General Definitions. For all purposes of
this Agreement, (i) capitalized terms used but not otherwise
defined herein shall have the meanings set forth in Schedule A to
the General Conditions (as amended or supplemented from time to
time) and (ii) the principles of construction set forth in
Schedule A to the General Conditions shall apply.
ARTICLE 2
The Project and Financial Plan
Section 2.1 The Project. The project to be financed is
the Facility, the Site, all auxiliary facilities, utilities and
the sites thereof, the construction, equipping, placing into
operation, and operation of the Facility, and as otherwise
described in the Letter of Information.
Section 2.2 Financial Plan - Estimated Project Cost.
(a) The proposed sources of financing for the Project are
set forth on Schedule 2.2(a) hereof.
(b) As of the date hereof, the total estimated cost of the
Project is set forth on Schedule 2.2(b) hereof.
ARTICLE 3
Agreement for the IFC Loans
Section 3.1 The IFC Loans.
(a) On the terms and subject to the conditions of this
Agreement, IFC agrees to lend to the Company the amount of up to
fifty-seven million dollars ($57,000,000), consisting of:
(i) the A Loan in the principal amount of up
to twenty-one million Dollars ($21,000,000),
divided initially into Tranches with each
Disbursement constituting a separate Tranche; and
(ii) the B Loan in the principal amount of up
to thirty-six million Dollars ($36,000,000), which
consists of B Loan 1 ("B Loan 1") and B Loan 2 ("B
Loan 2"), each in the principal amount of up to
ten million Dollars ($10,000,000) and B Loan 3 ("B
Loan 3") in the principal amount of up to sixteen
million Dollars ($16,000,000).
(b) The IFC Loans are not revolving in nature, and any
amounts repaid, prepaid or canceled pursuant to the terms of this
Agreement may not be re-borrowed.
Section 3.2 Disbursement Procedure.
(a) The Company may request Disbursements of the IFC Loans
by delivering to IFC, at least ten (10) Business Days prior to
the proposed date of Disbursement, an IFC Disbursement Request
substantially in the form of Schedule 3.2(a)(i) hereof, and a
receipt substantially in the form of Schedule 3.2(a)(ii) hereof.
(b) In the IFC Disbursement Request, in respect of any A
Loan Disbursement, the Company shall also propose a date to be
the Rate Setting Date for the Tranche which corresponds to the
relevant Disbursement. Such date shall be the Rate Setting Date
unless the conditions of disbursement applicable to the relevant
Disbursement have not by then been fulfilled to IFC's
satisfaction or waived by IFC, in which case the Rate Setting
Date shall be that date which is two (2) Business Days after IFC
has notified the Company that the relevant conditions of
disbursement have been so fulfilled or waived. In no case,
however, shall the Rate Setting Date be less than five (5)
Business Days after IFC receives the IFC Disbursement Request nor
less than two (2) Business Days before the date of the relevant
Disbursement, unless IFC otherwise agrees.
(c) In preparation for an IFC Disbursement Request, in
respect of any A Loan Disbursement, the Company may at any time
(but not more often than once in any calendar month) ask IFC
which rate service (among those listed in the definition of Fixed
Rate Swap Equivalent) IFC intends to use to determine the Tranche
Interest Rate and an indication of what the Tranche Interest Rate
would be as of the date of such IFC Disbursement Request. As
promptly as practicable after such inquiry, IFC shall advise the
Company of the relevant rate service (and if such rate service
displays information which changes during the course of the day,
rather than staying fixed for the whole day, as of what time the
relevant information would be obtained) and the indicative
Tranche Interest Rate.
(d) IFC shall make Disbursements of the IFC Loans to the
credit of the Company into the Offshore Retention Account in
accordance with the provisions of the Trust and Retention
Agreement.
(e) Each Disbursement of the IFC Loans shall be made in an
aggregate amount (except with respect to the last Disbursement
thereof) of not less than four million Dollars ($4,000,000), and
there shall be no more than eight (8) Disbursements of the IFC
Loans. The disbursement ratio between the A Loan and the B Loan
shall be pro rata in accordance with the maximum amount of such A
Loan and B Loan set forth in Section 3.1(a) above.
Section 3.3 Interest.
(a) Subject to Section 3.9 hereof, the Company shall pay
interest on the A Loan from time to time outstanding in
accordance with this Section 3.3(a).
(i) Interest shall accrue from day to day
and shall be payable on the Interest Payment
Dates. Interest shall be pro-rated on the basis
of a 360-day year and 30 day months in the
relevant interest period.
(ii) Until and including the Consolidation
Date, the Company shall pay interest on the amount
of each Tranche outstanding from time to time at
the Tranche Interest Rate applicable to that
Tranche. IFC shall determine the Tranche Interest
Rate applicable to each Tranche on the relevant
Rate Setting Date and shall promptly notify the
Company of such rate.
(iii) With effect from the day after the
Consolidation Date, the Company shall pay interest
at the A Loan Interest Rate on the full amount of
the A Loan outstanding from time to time. IFC
shall determine the A Loan Interest Rate not less
than two (2) Business Days before the
Consolidation Date, and shall promptly notify the
Company of such rate.
(iv) The determination by IFC, from time to
time, of each Tranche Interest Rate or the A Loan
Interest Rate, as the case may be, shall be final
and conclusive and shall bind the Company (unless
the Company shows to IFC's satisfaction that any
such determination involved clerical error).
(b) Subject to Section 3.9 hereof, the Company shall pay
interest on the B Loan from time to time outstanding in
accordance with this Section 3.3(b).
(i) The Company shall pay interest on the
principal amount of the B Loan from time to time
outstanding during the relevant B Loan Interest
Period.
(ii) Interest shall accrue from day to day,
be pro-rated on the basis of a 360-day year for
the actual number of days in the relevant B Loan
Interest Period and be due and payable in Dollars
on the Interest Payment Date immediately following
the end of the relevant B Loan Interest Period.
(iii) The interest rate on each of B Loan
1 and B Loan 2 shall be three and one-half percent
(3.50%) per annum and the interest rate on B Loan
3 shall be three and one quarter percent (3.25%)
per annum, above the rate which appears on the Dow
Xxxxx Market Screen Page the column headed "USD"
as of 11.00 a.m., London time, on the relevant B
Loan Interest Determination Date for one month,
two months, three months or six months, whichever
period is closest to the duration of the relevant
B Loan Interest Period (or, if two periods are
equally close to the duration of the relevant B
Loan Interest Period, the longer one) (the "B Loan
Floating Rate").
(iv) If, for any reason, the B Loan Floating
Rate cannot be determined by reference to the Dow
Xxxxx Market Screen Page on any B Loan Interest
Determination Date, IFC shall so notify the
Company and the Participants forthwith and shall
determine the B Loan Floating Rate on that B Loan
Interest Determination Date in accordance with
subsection (iii) above mutatis mutandis, using
rates advised to IFC by any two (2) of the banks
(or by the bank if only one) whose rate(s) were
last quoted on the Dow Xxxxx Market Screen Page.
If the services of the Dow Xxxxx Market Screen
Page cease to be available as a result of
discontinuation of such service, IFC shall notify
the Company and the Participants forthwith and
shall determine the B Loan Floating Rate on any
relevant B Loan Interest Determination Date in
accordance with subsection (iii) above mutatis
mutandis, using rates advised to IFC by three (3)
major banks active in the eurodollar interbank
market in London selected by IFC after
consultation with the Company and the
Participants.
(v) The determination by IFC, from time to
time, of the B Loan Floating Rate shall be final
and conclusive and shall bind the Company (unless
the Company shows to IFC's satisfaction that any
such determination involved clerical error).
Section 3.4 Fees.
(a) The Company shall pay to IFC in Dollars:
(i) a commitment fee at the rate of:
(A) one percent (1.0%) per annum
on that part of the A Loan as shall not, from
time to time, have been canceled by IFC or
disbursed to the Company, and in accordance
with subsection (b) below; and
(B) one-half of one percent (.5%)
per annum on that part of the B Loan as shall
not, from time to time, have been cancelled
by IFC or disbursed to the Company, and in
accordance with subsection (b) below;
(ii) (A) a front-end fee for the A Loan
of an amount of one percent (1.0%) of the
total amount of the A Loan, to be paid within
thirty (30) days after the date of this
Agreement, but in any event prior to the date
of the first A Loan Disbursement; and
(B) a front-end fee for the B Loan
of an amount of one percent (1.0%) of the
total amount of the B Loan, to be paid within
thirty (30) days after the date of each
Participation Agreement, but in any event
prior to the date of the first B Loan
Disbursement;
(iii) an annual fee equal to twenty-five
thousand six hundred twenty-five Dollars
($25,625), to be paid on the first Interest
Payment Date and every second Interest Payment
Date thereafter;
(iv) a syndication fee of three hundred
thirty thousand Dollars ($330,000), to be paid
within thirty (30) days after the date of the
first Participation Agreement, but in any event
prior to the date of the first B Loan
Disbursement;
(v) a fee of fifty eight thousand seven
hundred fifty Dollars ($58,750) to be paid within
thirty (30) days after the execution of the DEG
Investment Agreement;
(vi) an annual loan administration fee of
five thousand Dollars ($5,000) for each
Participant, the first such payment being due
within thirty (30) days after the date of the
first Participation Agreement to be signed (but in
any event prior to the first B Loan Disbursement)
and subsequent payments being due on every second
Interest Payment Date thereafter until the B Loan
is repaid in full.
(b) The commitment fee specified in subsection (a)(i) above:
(i) (A) in respect of the A Loan,
commences to accrue on the date this
Agreement is executed; and
(B) in respect of the B Loan or
relevant part thereof, commences to accrue on
the date each Participation Agreement is
executed;
(ii) is pro-rated on the basis of a 360-day
year for the actual number of days elapsed; and
(iii) is payable by the Company with
respect to the IFC Loans, semi-annually in
arrears, on March 15 and September 15 in each
year; the first such payment to be made on
March 15, 1998.
Section 3.5 Repayment.
(a) The Company shall repay the A Loan on each Principal
Payment Date in accordance with the following loan repayment
schedule.
Date Payment Due Principal Amount Due
1. March 15, 2001 $ 550,955.35
2. September 15, 2001 $ 578,029.29
3. March 15, 2002 $ 606,433.65
4. September 15, 2002 $ 636,233.80
5. March 15, 2003 $ 667,498.33
6. September 15, 2003 $ 700,299.20
7. March 15, 2004 $ 734,711.90
8. September 15, 2004 $ 770,815.64
9. March 15, 2005 $ 808,693.53
10. September 15, 2005 $ 848,432.73
11. March 15, 2006 $ 890,124.71
12. September 15, 2006 $ 933,865.44
13. March 15, 2007 $ 979,755.59
14. September 15, 2007 $1,027,900.77
15. March 15, 2008 $1,078,411.82
16. September 15, 2008 $1,131,404.98
17. March 15, 2009 $1,187,002.22
18. September 15, 2009 $1,245,331.51
19. March 15, 2010 $1,306,527.10
20. September 15, 2010 $1,370,729.84
21. March 15, 2011 $1.438.087.50
22. September 15, 2011 $1,508,755.12
TOTAL $ 21,000,000
(b) (i) The Company shall repay B Loan 1 on each Principal
Payment Date in accordance with the following loan repayment
schedule.
Date Payment Due Principal Amount Due
1. March 15, 2001 $262,359.69
2. September 15, 2001 $275,252.04
3. March 15, 2002 $288,777.93
4. September 15, 2002 $302,968.48
5. March 15, 2003 $317,856.35
6. September 15, 2003 $333,475.81
7. March 15, 2004 $349,862.81
8. September 15, 2004 $367,055.07
9. March 15, 2005 $385,092.16
10. September 15, 2005 $404,015.58
11. March 15, 2006 $423,868.91
12. September 15, 2006 $444,697.83
13. March 15, 2007 $466,550.28
14. September 15, 2007 $489,476.56
15. March 15, 2008 $513,529.44
16. September 15, 2008 $538,764.27
17. March 15, 2009 $565,239.15
18. September 15, 2009 $593,015.00
19. March 15, 2010 $622,155.76
20. September 15, 2010 $652,728.49
21. March 15, 2011 $684,803.57
22. September 15, 2011 $718,454.82
TOTAL $ 10,000,000
(ii) The Company shall repay B Loan 2 on each
Principal Payment Date in accordance with the following loan
repayment schedule.
Date Payment Due Principal Amount Due
1. March 15, 2001 $262,359.69
2. September 15, 2001 $275,252.04
3. March 15, 2002 $288,777.93
4. September 15, 2002 $302,968.48
5. March 15, 2003 $317,856.35
6. September 15, 2003 $333,475.81
7. March 15, 2004 $349,862.81
8. September 15, 2004 $367,055.07
9. March 15, 2005 $385,092.16
10. September 15, 2005 $404,015.58
11. March 15, 2006 $423,868.91
12. September 15, 2006 $444,697.83
13. March 15, 2007 $466,550.28
14. September 15, 2007 $489,476.56
15. March 15, 2008 $513,529.44
16. September 15, 2008 $538,764.27
17. March 15, 2009 $565,239.15
18. September 15, 2009 $593,015.00
19. March 15, 2010 $622,155.76
20. September 15, 2010 $652,728.49
21. March 15, 2011 $684,803.57
22. September 15, 2011 $718,454.82
TOTAL $ 10,000,000
(iii) The Company shall repay B Loan 3 on each
Principal Payment Date in accordance with the following loan
repayment schedule.
Date Payment Due Principal Amount Due
1. March 15, 2001 $ 690,192.87
2. September 15, 2001 $ 722,973.58
3. March 15, 2002 $ 757,311.21
4. September 15, 2002 $ 793,279.71
5. March 15, 2003 $ 830,956.53
6. September 15, 2003 $ 870,422.81
7. March 15, 2004 $ 911,763.54
8. September 15, 2004 $ 955,067.75
9. March 15, 2005 $ 1,000,428.69
10. September 15, 2005 $ 1,047,944.05
11. March 15, 2006 $ 1,097,716.15
12. September 15, 2006 $ 1,149,852.18
13. March 15, 2007 $ 1,204,464.41
14. September 15, 2007 $ 1,261,670.45
15. March 15, 2008 $ 1,321,593.49
16. September 15, 2008 $ 1,384,362.58
TOTAL $16,000,000.00
(c) The dates for payment of principal of the IFC Loans
are intended to coincide with the relevant Interest Payment
Dates.
(d) From time to time while the IFC Loans are being
disbursed, any part of the IFC Loans which has been disbursed
shall be allocated for repayment on each of the dates set out in
subsections (a) and (b) above, in amounts which are pro rata to
the amounts of the respective repayment installments (with IFC
adjusting those allocations as necessary so as to achieve whole
numbers in each case).
(e) Notwithstanding the amortization schedules set out in
subsections (a) and (b) above, if the full amount of the IFC
Loans is not disbursed, (i) IFC shall recalculate the
amortization schedules in order to provide for repayment of the
IFC Loans on the same dates and on the basis of the amortization
set out above and shall deliver such amortization schedules to
the Company, and (ii) upon delivery to the Company of the
properly recalculated amortization schedules, this Agreement will
be deemed to have been amended to substitute such recalculated
amortization schedules for subsections (a) and (b) above.
Section 3.6 Voluntary Prepayment.
(a) The Company may, on any Interest Payment Date, prepay
all or any part of the IFC Loans then outstanding, on not less
than thirty (30) days' written notice to IFC, but only if:
(i) the Company simultaneously pays the
prepayment premium specified in Section 3.8
hereof (x) in respect of any outstanding balance
of the A Loan, with respect to the portion of the
A Loan so prepaid;
(ii) the Company simultaneously pays (x)
all accrued interest on the amount of the IFC
Loans to be prepaid, and (y) all other amounts
then payable under this Agreement;
(iii) for a partial prepayment, such
prepayment is in an aggregate amount of not less
than six million Dollars ($6,000,000);
(iv) the Company simultaneously prepays,
pro rata, the outstanding principal amount of the
DEG Loan (or portions thereof, as applicable),
together with all accrued interest on the
principal amounts of the Loans (or portions
thereof, as applicable), the Maintenance Amount
(if any) on the Loans (or portions thereof, as
applicable) and all other amounts then due
hereunder or under any of the Loan Documents; and
(v) if IFC so requires, the Company delivers
to IFC, prior to the date of prepayment, evidence
satisfactory to IFC that all Governmental
Approvals necessary in respect of the prepayment
have been obtained or an opinion of counsel, in
form and substance reasonably satisfactory to
IFC, that none are required.
(b) Amounts prepaid under this Section:
(i) shall be allocated by IFC pro rata
between the A Loan and the B Loan in proportion
to their respective principal amounts outstanding
on the date of any such prepayment; and
(ii) shall then be applied by IFC to the
respective outstanding repayment installments of
the A Loan and the B Loan on a pro rata basis.
(c) Upon delivery of a notice in accordance with
subsection (a) above, the Company shall make the prepayment in
accordance with the terms of that notice.
(d) The Company may not request Disbursement of amounts
prepaid under this Agreement.
Section 3.7 Mandatory Prepayment.
(a) On the Purchase Date, all Obligations owing to IFC
relating to the IFC Loans hereunder and under the Loan Documents
shall become immediately due and payable without any action on
the part of IFC, and the Company shall pay to IFC an amount equal
to all such Obligations due and owing to IFC, including, without
duplication, all accrued interest on the principal amount of the
IFC Loans to be prepaid and all other amounts then due to IFC
hereunder. Amounts prepaid under this subsection (a) shall be
allocated and applied as provided in Section 3.7(c)(iii).
(b) The Company shall prepay, pro rata, the outstanding
principal amount of the IFC Loans (or portions thereof, as
applicable), upon the prepayment by the Company of any of the
other Loans (or portions thereof, as applicable), together with
all accrued interest on the principal amount of the IFC Loans (or
portions thereof, as applicable), the Maintenance Amount (if any)
on the IFC Loans (or portions thereof, as applicable) and all
other amounts then due hereunder or under any of the other Loan
Documents. Amounts prepaid under this subsection (b) shall be
allocated and applied as provided in Section 3.7(c)(iii).
(c) Insurance Proceeds shall be applied as follows:
(i) All Insurance Proceeds relative to any
single loss in excess of seven hundred fifty
thousand Dollars ($750,000) shall be paid by the
respective insurers directly to the Trustee. All
Insurance Proceeds relative to a single recovery
of seven hundred fifty thousand Dollars
($750,000) or less shall be paid directly to the
Company. If any Insurance Proceeds relative to
any single loss in excess of seven hundred fifty
thousand Dollars ($750,000), or, during the
occurrence and continuation of an Event of
Default, relative to any loss are paid to the
Company, such Insurance Proceeds shall be
received only in trust for the Lenders, shall be
segregated from other funds of the Company, and
shall be promptly paid over to the Trustee in the
same form as received (with any necessary
endorsement) for deposit in the Insurance
Proceeds Sub-Account. If any Insurance Proceeds
are paid to IFC, IFC shall promptly pay over such
Insurance Proceeds to the Trustee for deposit in
the Insurance Proceeds Sub-Account.
(A) If there does not exist an Event
of Default, Insurance Proceeds relative to a
single loss of seven hundred fifty thousand
Dollars ($750,000) or less shall be applied
by the Company to pay the necessary costs of
repair, restoration or replacement of the
Project (in each case, to the extent such
Insurance Proceeds were paid in respect of
physical loss or damage thereto). After
applying such amount, any excess Insurance
Proceeds shall be delivered to the Trustee
for deposit in the Revenue Sub-Account.
(B) If there does not exist an Event
of Default and if there shall occur damage,
destruction or casualty with respect to which
Insurance Proceeds in excess of seven hundred
fifty thousand Dollars ($750,000) but less
than five million Dollars ($5,000,000) are
payable, and if (I) the Company promptly
(and, in any event, within 30 days after the
occurrence of such damage, destruction or
casualty) gives written notice to IFC that
the Company wishes to repair, restore or
replace the Project to the condition that it
was in immediately prior to such damage,
destruction or casualty, (II) the Insurance
Proceeds received by the Company or the
Trustee together with funds otherwise
available to the Company, will be sufficient
to cover all costs and expenses necessary to
repair, restore or replace the Project and to
cover the Operating and Maintenance Costs and
the Debt Service payable by the Company
during the period necessary to repair,
restore or replace the Project, (III) the
repair, restoration or replacement of the
Project is technically and economically
feasible, (IV) after giving effect to any
proposed repair, restoration or replacement,
no Default or Event of Default or a default
under any Principal Document shall exist, (V)
IFC shall receive an opinion of counsel in
form and substance reasonably satisfactory to
IFC or other evidence satisfactory to IFC
that neither any applicable Governmental
Approval nor any Principal Document (other
than Non-Material Agreements) will terminate
during the period necessary to repair,
restore or replace the Project and no
applicable Governmental Approval, or
amendment to this Agreement or the Security
Documents or any other instrument, is
necessary for the purpose of subjecting the
repair, restoration or replacement to the
Liens of the Security Documents except such,
if any, as shall have been delivered to IFC,
and (VI) IFC shall have received from the
Company and the Independent Engineer such
certificates or other evidence as IFC may
reasonably require regarding the foregoing
matters, then IFC shall direct the Trustee in
a written notice to deliver the Insurance
Proceeds received in connection with the
damage, destruction or casualty to the
Project to the Company and the Company shall
apply such Insurance Proceeds to pay for the
necessary costs of repair, restoration or
replacement of the Project and to pay for
Operating and Maintenance Costs and Debt
Service when due. After making such payments
to the Company, any excess Insurance Proceeds
shall be deposited in the Revenue Sub-
Account.
(ii) If there shall occur damage,
destruction or casualty with respect to which
Insurance Proceeds in excess of five million
Dollars ($5,000,000) are payable, IFC may, after
consulting with the Company during the 30-day
period following such damage, destruction or
casualty, choose to apply the Insurance Proceeds
to prepay a principal amount of the IFC Loans at
the time outstanding, pro rata with prepayment of
the DEG Loan, together with interest accrued
thereon or fees accrued in connection therewith
to the prepayment date. In addition, if
Insurance Proceeds have been paid pursuant to
clause (c)(i)(B) above and the Company (I) has
not notified IFC promptly that it wishes to
repair, restore or replace the Project or (II)
has not otherwise complied with the provisions of
clause (c)(i) above relative to the repair,
restoration or replacement of the Project, IFC
may choose to apply the Insurance Proceeds to
prepay the IFC Loans, pro rata with prepayment
of the DEG Loan, together with accrued interest.
(iii) Amounts prepaid under this
subsection (c) and under subsection (e):
(A) shall be allocated by IFC pro
rata between the A Loan and the B Loan in
proportion to their respective principal
amounts outstanding on the date of such
prepayment; and
(B) shall then be applied by IFC to
all respective outstanding repayment
installments of the A Loan and the B Loan on
a pro rata basis.
(d) Upon the occurrence of a Capacity Shortfall, the
Company shall pay, or cause to be paid, to IFC the Performance
Liquidated Damages paid by the EPC Contractor under the EPC
Contract with respect to such Capacity Shortfall to prepay a
principal amount of the IFC Loans equal to (i) the principal
amount of all outstanding IFC Loans, multiplied by (ii) the
Capacity Shortfall Percentage and shall pay, or cause to be paid,
to DEG the Performance Liquidated Damages paid by the EPC
Contractor under the EPC Contract with respect to such Capacity
Shortfall to prepay a principal amount of the DEG Loan equal to
(i) the principal amount outstanding under the DEG Loan
multiplied by (ii) the Capacity Shortfall Percentage. Such
prepayment of the IFC Loan shall be applied as provided in
Section 3.7(c)(iii) hereof. To the extent there are excess
Performance Liquidated Damages which have been paid by the EPC
Contractor and are remaining after the above-referenced
prepayment to IFC and DEG, such excess shall be applied to repay
equity in an amount equal to (x) the Dollar amount which has then
been paid in to the Company for the purchase of Shares,
multiplied by (y) the Capacity Shortfall Percentage. Such amount
shall be divided pro rata among all shareholders of the Company.
After such application, any remaining Performance Liquidated
Damages shall be transferred to the Revenue Sub-Account and
applied in accordance with the Trust and Retention Agreement.
(e) The Company shall prepay the outstanding principal
amount of the IFC Loans upon the occurrence of the Event of
Default described in Section 7.1(k) of the General Conditions,
together with accrued interest on the principal amount of the IFC
Loans to be prepaid and all other amounts then due to IFC
hereunder.
(f) The Company shall pay the prepayment premium as
specified in Section 3.8 hereof in connection with any mandatory
prepayments pursuant to Sections 3.7(a) (but only if and to the
extent that there remains any proceeds of the Purchase Price paid
by HMGN and received by the Company after (i) the aggregate
amount of all Obligations owing to IFC have been paid in full and
(ii) the shareholders of the Company at such time have recovered
the aggregate amount of their total paid in equity of the Company
to the extent provided in Section 6.3 of the Project Agreement),
and Sections 3.7(b) and 3.7(e) hereof.
Section 3.8 Prepayment Premium.
(a) On the date of any prepayment of the A Loan in
accordance with Section 3.6, 3.7(a), 3.7(b), or 3.7(e) hereof,
the Company shall pay a premium of an amount in Dollars equal to
the difference between the Net Present Value of the Anticipated
Income Stream and the Net Present Value of the Available Income
Stream or in the case of a partial prepayment, the same
proportion of such difference as the proportion which the amount
of the A Loan to be prepaid bears to the amount of the A Loan
then outstanding, all as more particularly described below.
For the purposes of this subsection (a), "Anticipated
Income Stream" means the aggregate interest payments which would
have been due on the A Loan at the applicable Tranche Interest
Rate(s) (in the case of a prepayment prior to the Consolidation
Date) or at the A Loan Interest Rate (in the case of a prepayment
on or subsequent to the Consolidation Date) for the period from
the prepayment date until the final scheduled maturity date
assuming that no prepayment had taken place and further assuming
that the A Loan repayment schedule set forth in Section 3.5
hereof had been adhered to and that all payments had been made on
their due dates.
For the purposes of this subsection (a), "Available Income
Stream" means the interest payments which would have been due on
the A Loan at a rate per annum equal to the aggregate of the A
Loan Spread and the Fixed Rate Swap Equivalent for the period
from the prepayment date until the final scheduled maturity date
assuming that no prepayment had taken place and further assuming
that the A Loan repayment schedule set forth in Section 3.5
hereof had been adhered to and that all payments had been made on
their due dates.
For the purposes of this subsection (a), the "Net Present
Value" means the value of the relevant Income Stream discounted
(with stops on the same dates as would have been Interest Payment
Dates) back to the prepayment date from each of the relevant
Interest Payment Dates at a discount rate equal to the Fixed Rate
Swap Equivalent.
(b) The determination by IFC of the prepayment premium
under subsection (a) above shall be final and conclusive unless
the Company shows, to the satisfaction of IFC, that such
determination involved clerical error.
Section 3.9 Additional Interest.
(a) Without limiting the remedies available to IFC under
this Agreement or otherwise and to the maximum extent permitted
by applicable law, if the Company fails to make any payment of
principal or interest (including interest payable pursuant to
this Section) or any other payment on or before its due date as
specified in this Agreement (whether at stated maturity or upon
prematuring by acceleration or otherwise) or, if not so
specified, as notified by IFC to the Company, the Company shall
pay in US Dollars, by way of liquidated damages, in respect of
the amount of (i) any A Loan payment due and unpaid, interest at
the relevant Tranche Interest Rate(s) or A Loan Interest Rate in
effect from time to time plus two percent (2.0%) per annum from
the date any such payment became due and (ii) any B Loan payment
due and unpaid, interest at the B Loan Floating Rate in effect
from time to time plus two percent (2.0%) per annum from the date
any such payment became due. Such interest is payable on demand,
or if not demanded, on each Interest Payment Date after such
failure.
(b) The obligation of the Company to pay liquidated
damages as provided in paragraph (a) above shall be without
prejudice to its obligation to pay principal and interest in
accordance with Sections 3.5 and 3.3 hereof and any other amounts
payable under this Agreement.
Section 3.10 Payments in Dollars.
(a) The Company shall make all payments of principal,
interest, fees, and any other payment due to IFC under this
Agreement in Dollars, no later than 2:00 p.m. (New York City
time) on the date when due, in immediately available funds, at
Northern Trust International Banking Corporation, New York, New
York (Account No. CHIPS ID 142255, in favor of International
Finance Corporation) or at such other bank in New York, New York
as IFC from time to time designates to the Company and the
Trustee.
(b) If any date for payment under this Agreement shall not
be a Business Day, then such payment shall be made on or by the
next succeeding Business Day unless, in the case of payments of
principal or interest, that next succeeding Business Day falls in
a different calendar month, in which case that payment shall be
made on the immediately preceding Business Day. Interest, fees,
including, without limitation, commitment fees, and charges (if
any) shall continue to accrue for the period from the due date
which is not a Business Day to that next succeeding Business Day.
(c) The tender or payment of any amount payable under this
Agreement (whether or not by recovery under a judgment) in any
currency other than Dollars does not novate, discharge or satisfy
the obligation of the Company to pay in Dollars all amounts
payable under this Agreement except to the extent IFC actually
receives Dollars in its account in New York, New York.
(d) If a currency other than Dollars is tendered or paid
(or recovered under any judgment) and the amount IFC receives at
its designated account in New York, New York, upon conversion at
the then-market rate of exchange, falls short of the full amount
of Dollars owed to IFC, then the Company shall continue to owe
IFC, as a separate obligation, the amount of the shortfall
(regardless of any judgment for any other amounts due under this
Agreement).
(e) Notwithstanding subsections (a) through (d) above, IFC
may require the Company to pay (or reimburse IFC) in any currency
other than Dollars for:
(i) any taxes and other amounts payable under
the provisions of this Agreement; and
(ii) any fees, costs and expenses payable
under Section 9.3 hereof and Section 8.1 of the
General Conditions;
to the extent those taxes, amounts, fees, costs, and expenses are
payable in that other currency.
Section 3.11 Allocation of Partial Payments. If IFC at
any time receives less than the full amount then due and payable
to it under this Agreement, IFC may allocate and apply such
payment in any way or manner and for such purpose or purposes
under this Agreement as IFC in its sole discretion determines,
notwithstanding any instruction that the Company may give to the
contrary.
Section 3.12 Suspension or Cancellation of Disbursements
by IFC.
(a) IFC may, by notice to the Company, suspend or cancel
the right of the Company to Disbursements of the IFC Loans, in
whole or in part:
(i) if the first Disbursement has not been
made by June 1, 1998, or such other date as the
parties agree;
(ii) if IFC cancels the subscription or
acquisition by it of any Shares or any
disbursement on account thereof as provided in
Section 4.3 hereof;
(iii) if any Event of Default or Default
shall have occurred and be continuing, or if an
expropriation, condemnation, requisition,
confiscation, seizure or nationalization of all
or any substantial part of the Project or other
assets of the Company or of its share capital or
the dissolution or disestablishment of the
Company or other action that would prevent the
Company or its officers from carrying on all or a
substantial part of the Company's business or
operations shall, in the reasonable opinion of
IFC, be imminent;
(iv) if, at any time in the reasonable
opinion of IFC, there shall exist any situation
which indicates that performance by the Company
of any of its obligations under this Agreement
cannot be expected; or
(v) if the DEG Loan has been suspended or
cancelled; or
(vi) on or after September 30, 2000.
(b) Upon the giving of any such notice, the right of the
Company to receive, and the obligation of IFC to disburse, the
undisbursed part of the IFC Loans shall be suspended or canceled,
as the case may be. The exercise by IFC of its right of
suspension does not preclude IFC from exercising its right of
cancellation, either for the same or any other reason. A
suspension does not limit any other provision of this Agreement.
Section 3.13 Termination of Commitment. The commitment of
IFC to make any Disbursement of the IFC Loans hereunder shall
automatically terminate in accordance with the provisions of
Article 7 of the General Conditions.
Section 3.14 Cancellation by the Company. The Company
may, by notice to IFC, irrevocably request IFC to cancel the
undisbursed portion of the IFC Loans on the date specified in
such request (which shall be an Interest Payment Date no earlier
than thirty (30) Business Days after the date of the request). If
IFC is reasonably satisfied that the Company has sufficient long-
term funding available, on terms satisfactory to IFC, to satisfy
the Financial Plan, and IFC receives, all fees payable under
Section 3.4 hereof, all breakage or similar costs, expenses or
losses arising out of such cancellation, and all other amounts
then due and payable under this Agreement, IFC shall cancel the
entire undisbursed portion of the IFC Loans effective as of that
Interest Payment Date.
Section 3.15 Illegality of Participation. If, after the
date of this Agreement, any change made in any applicable law or
regulation or official directive (or its interpretation or
application by any Authority charged with its administration),
makes it unlawful for any Participant to continue to maintain or
to fund its Participation, then the Company shall, upon request
by IFC (but subject to the approval of the Nepal Rastra Bank,
which the Company agrees to take all reasonable steps to obtain
as quickly as possible, if such approval is then required),
prepay immediately in full that part of the B Loan which IFC
advises corresponds to that Participation, together with all
accrued interest and the Maintenance Amount (if any) on that part
of the B Loan (and, if such prepayment is not made on an Interest
Payment Date, any amount payable in respect of the prepayment
under Section 3.16 hereof). In addition, upon receipt of such
request from IFC, the Company shall have no further right to
disbursement of the undisbursed portion of the B Loan
corresponding to that Participation.
Section 3.16 Funding Costs.
(a) If the Company:
(i) fails to pay any amount due under this
Agreement on its due date, or to borrow in
accordance with an IFC Disbursement Request or to
prepay in accordance with a notice of prepayment;
or
(ii) prepays all or any portion of the IFC
Loans on a date other than an Interest Payment
Date;
and as a result IFC or any Participant incurs any cost, expense
or loss, then the Company shall immediately pay to IFC the amount
which IFC from time to time notifies to the Company as being the
aggregate of those costs, expenses and losses incurred.
(b) For the purposes of this Section 3.16 and Section 3.14
hereof, "cost, expense or loss" include any interest paid or
payable to carry any unpaid amount and any premium, penalty or
expense incurred to liquidate or obtain third party deposits or
borrowings in order to make, maintain or fund all or any part of
the IFC Loans (but in the case of a late payment, after taking
into account any additional interest received under Section 3.9
hereof).
Section 3.17 Maintenance Amount. On each Interest Payment
Date, the Company shall pay, in addition to interest, the amount
which IFC from time to time notifies to the Company in a
Maintenance Amount Certification as being the aggregate
Maintenance Amount of IFC and each Participant accrued and unpaid
prior to that Interest Payment Date.
ARTICLE 4
IFC Subscription
Section 4.1 Subscription and Disbursement.
(a) On the terms and subject to the conditions of this
Agreement, IFC agrees to subscribe and pay for ten percent (10%)
of the ordinary shares of the Company, par value Rs. 100 per
share (the "IFC Shares") at a purchase price of ten Dollars
($10.00) per share at the time of subscription of each share;
provided, however, that IFC shall not be obligated to subscribe
and pay for any IFC Shares unless the Sponsor Shareholders shall
have, prior to IFC's Subscription, subscribed and paid into the
Company all of the Sponsor Shareholders' equity then due under
the Financial Plan in accordance with Section 2.1 of their
respective Subscription Agreements at the purchase price of ten
Dollars ($10.00) per share; and provided further, that the
aggregate purchase price of the IFC Shares which IFC may
subscribe pursuant to this Section 4.1 shall not exceed three
million Dollars ($3,000,000) (the "Aggregate Purchase Price") or
300,000 shares.
(b) The Company may request IFC to subscribe for the IFC
Shares by delivering to IFC, at least ten (10) Business Days
prior to the proposed date of subscription, a Subscription
Request in the form of Schedule 4.1(b) hereof.
(c) IFC shall disburse funds under the IFC Subscription to
the credit of the Offshore Retention Account in accordance with
the provisions of the Trust and Retention Agreement.
(d) Each request shall be for a subscription of an amount
(except with respect to the last such request) of not less than
two hundred seven thousand Dollars ($207,000), and there shall be
no more than eight (8) Subscriptions.
(e) Notwithstanding anything contained in this Agreement,
IFC may, at any time and from time to time, in its discretion and
without request by the Company, subscribe and pay, on the terms
set out in subsection (a) above, for any or all of the IFC
Shares.
(f) Upon each subscription and payment by IFC under this
Section 4.1, the Company shall:
(i) issue to IFC, or as IFC directs, the
number of IFC Shares so subscribed free of all
Liens, charges and encumbrances and which shall
rank pari passu in all respects with all other
Shares, and deliver to IFC, or as IFC directs, a
share certificate evidencing valid legal and
beneficial title to such number of IFC Shares;
(ii) furnish to IFC evidence satisfactory
to IFC that such number of IFC Shares has been
duly and validly authorized, issued and
delivered; are freely transferable; that all
requisite corporate formalities and legal
requirements in connection with the
authorization, issue and delivery thereof have
been duly satisfied; all the information and
documents necessary for the issuance of all
Governmental Approvals required for the
subscription of, and remittance of, the IFC
Shares have been obtained; and
(iii) use the net proceeds of the IFC
Subscription to subscribe for ordinary shares of
the Company.
Section 4.2 Actions Prohibited until IFC Shares Issued.
Until all of the IFC Shares have been subscribed or the right of
the Company to further subscriptions has been canceled as
provided in Section 4.3 below, whichever first occurs:
(a) the Company shall, from and after the date of the
initial IFC Subscription, maintain a sufficient number of
authorized and unissued Shares to satisfy in full the exercise of
IFC's rights under the IFC Subscription; and
(b) the Company shall not, unless IFC otherwise agrees:
(i) issue any Shares of any class, except (A)
in accordance with the Financial Plan or (B) as
permitted by this Agreement, the Share Retention
and Project Funds Agreement, the Subscription
Agreements, and the Shareholders' Agreement;
(ii) increase its respective authorized
share capital except in accordance with the
provisions of this Agreement, the Share Retention
and Project Funds Agreement, the Subscription
Agreements and the Shareholders' Agreement; or
(iii) change the par value of, or the
rights attached to, any of the Shares of any
class;
(iv) issue Shares with more privileged
rights than the IFC Shares;
(v) reduce its respective share capital
through the redemption (or otherwise) of Shares;
(vi) issue any options or warrants with
respect to its share capital; or
(vii) take any other action by amendment of
its respective Charter Documents or through
reorganization, consolidation, sales of share
capital (other than sales to Sponsors as
contemplated by the Subscription Agreements and
the Share Retention and Project Funds Agreement),
merger or sale of assets, or otherwise which
could reasonably be expected to result in a
dilution of the interest in the Company
represented by the IFC Shares.
Section 4.3 Suspension and Cancellation of IFC
Subscription.
(a) IFC may, by notice to the Company, suspend or cancel
the right of the Company to the IFC Subscription:
(i) if the first subscription and
disbursement has not been made by June 1, 1998,
or such other date as the parties agree;
(ii) if the right of the Company to
disbursements of the IFC Loans is suspended or
canceled as provided in Section 3.12 hereof;
(iii) if any Event of Default or Default
shall have occurred and be continuing, or if an
expropriation, condemnation, requisition,
confiscation, seizure or nationalization of all
or any substantial part of the Project or other
assets of the Company or of its share capital or
the dissolution or disestablishment of the
Company or other action that would prevent the
Company or its officers from carrying on all or a
substantial part of the Company's business or
operations shall, in the reasonable opinion of
IFC, be imminent;
(iv) if, at any time in the reasonable
opinion of IFC, there shall exist any situation
which indicates that performance by the Company
of any of its Obligations under this Agreement
cannot be expected;
(v) if the DEG Loan has been suspended or
cancelled; or
(vi) on or after September 30, 2000.
(b) Upon the giving of any such notice, the right of the
Company to the IFC Subscription shall be suspended or canceled,
as the case may be. The exercise by IFC of its right of
suspension does not preclude IFC from exercising its right of
cancellation, either for the same or another reason. A
suspension does not limit any other provision of this Agreement.
Section 4.4 Agreement to Cooperate. The Company shall
fully cooperate with IFC and shall provide all the information
and documents necessary for the issuance of all Governmental
Approvals required for the subscription by IFC of the IFC Shares
and for the remittance of the proceeds of the sale of the IFC
Shares and dividends.
Section 4.5 IFC Board Seat. Following subscription by
IFC of the IFC Shares, the Company shall, to the extent permitted
by applicable law, take such action that will enable IFC an
opportunity to elect one representative to the board of directors
of the Company.
ARTICLE 5
Representations and Warranties
Section 5.1 Representations and Warranties Contained in
General Conditions.
(a) The Company confirms the representations and
warranties set forth in Article 4 of the General Conditions as if
made as of the date hereof, which representations and warranties
are incorporated by reference herein as if fully set forth
herein.
(b) The Company warrants to IFC that each of such
representations is true and correct in all material respects as
of the date of this Agreement and that none of them omits any
matter the omission of which makes any of such representations
misleading in any material respect. The representations referred
to in Section 5.1 hereof shall survive the execution and delivery
of this Agreement, any Disbursement of the IFC Loans or any
subscription and disbursement under the IFC Subscription.
Section 5.2 Rights and Remedies not Limited. IFC's
rights and remedies in relation to any misrepresentation or
breach of warranty on the part of the Company are not prejudiced:
(a) by any investigation by or on behalf of IFC (or the
Participants) into the affairs of the Company;
(b) by the execution or the performance of this Agreement
(or the Participation Agreements) or any other Principal
Document;
(c) by any other act or thing which may be done by or on
behalf of IFC in connection with this Agreement (or the
Participation Agreements) or any other Principal Document and
which might, apart from this Section, prejudice such rights or
remedies.
ARTICLE 6
Conditions of Disbursement
Section 6.1 Conditions of Initial Disbursement. The
obligation of IFC to make the initial Disbursement of the IFC
Loans or the initial subscription and disbursement under the IFC
Subscription shall be subject to the fulfillment, in a manner
satisfactory to IFC, prior to or concurrently with the making of
such initial Disbursement or subscription and disbursement of the
IFC Subscription, of the conditions set forth in Section 3.1 of
the General Conditions.
Section 6.2 Conditions of All Disbursements and
Subscriptions and Disbursements under the IFC Subscription. The
obligation of IFC to make any Disbursement of the IFC Loans or
any subscription and disbursement under the IFC Subscription
shall also be subject to the fulfillment, in a manner
satisfactory to IFC, prior to or concurrently with the making of
such Disbursement or subscription and disbursement under the IFC
Subscription, of the conditions set forth in Sections 3.2, 3.3,
3.4 and 3.5 of the General Conditions, and to the fulfillment of
the further condition that the proceeds of such Disbursement or
subscription and disbursement under the IFC Subscription will not
be in reimbursement of, or used for, expenditures in the
territories of any country which is not a member of IFC (other
than any country which is a member of the International Bank for
Reconstruction and Development) or for goods produced in or
services supplied from such territories.
Section 6.3 Disbursement Relationship Among IFC Loans and
the IFC Subscription.
(a) The obligation of IFC to make any Disbursements of
the IFC Loans or subscription and disbursement under the IFC
Subscription shall also be subject to compliance by the Sponsor
Shareholders with their obligations described in Section 2.1 of
the Subscription Agreements.
(b) Notwithstanding anything provided in this Agreement,
the A Loan and the B Loan shall be disbursed pro rata in
accordance with the maximum respective principal amounts of such
A Loan and B Loan set forth in Section 3.1(a) hereof, and IFC
shall not in any event be obliged to make any Disbursement of the
B Loan except to the extent that funds shall be provided therefor
by the Participants under their respective Participation
Agreements.
(c) The obligation of IFC to make any subscription or
disbursement under the IFC Subscription is also subject to the
conditions that immediately after such subscription or
disbursement (i) IFC would not have subscribed or paid for a
higher proportion of the IFC Shares than the proportion which
each of the Company's other shareholders has by then subscribed
or paid for of the total number of Shares to be subscribed by
such shareholder in accordance with the Financial Plan, and (ii)
IFC would not have subscribed or paid a higher proportion of the
IFC Subscription to the outstanding amount under the IFC Loans
than the proportion which the IFC Subscription bears to the IFC
Loans as set forth in the Financial Plan.
Section 6.4 No Waivers.
(a) The rights and remedies of IFC in relation to any
misrepresentations or breach of warranty on the part of the
Company shall not be prejudiced by any investigation by or on
behalf of IFC (or the Participants) into the affairs of the
Company, by the execution or the performance of this Agreement
(or the Participation Agreements) or by any other act or thing
which may be done by or on behalf of IFC (or the Participants) in
connection with this Agreement (or the Participation Agreements)
and which might, apart from this Section, prejudice such rights
or remedies.
(b) No course of dealing or waiver by IFC in connection
with any condition of Disbursement or subscription and
disbursement under the IFC Subscription under this Agreement
shall impair any right, power or remedy of IFC with respect to
any other condition of Disbursement or subscription and
disbursement under the IFC Subscription, or be construed to be a
waiver thereof; nor shall the action of IFC in respect of any
Disbursement or subscription and disbursement under the IFC
Subscription affect or impair any right, power or remedy of IFC
in respect of any other Disbursement or subscription and
disbursement under the IFC Subscription.
(c) Unless otherwise notified to the Company by IFC and
without prejudice to the generality of paragraph (a) above, the
right of IFC to require compliance with any condition under this
Agreement which may be waived by IFC in respect of any
Disbursement or subscription and disbursement under the IFC
Subscription is expressly preserved for the purposes of any subse
quent Disbursement or subscription and disbursement under the IFC
Subscription.
ARTICLE 7
Particular Covenants
Section 7.1 Particular Covenants.
(a) The Company shall observe and perform the covenants
set forth in Articles 5 and 6 of the General Conditions.
(b) The Company shall make promptly all required filings
with Governmental Authorities, or financial institutions, in
Nepal to permit IFC to remit to the United States in Dollars any
amounts paid to IFC in connection with the IFC Shares.
ARTICLE 8
Events of Default
Section 8.1 Events of Default. If one or more of the
Events of Default specified in Article 7 of the General
Conditions shall have occurred and be continuing, IFC shall have
the rights and remedies set forth in said Article 7 and the other
Principal Documents, all of which rights and remedies are
incorporated by reference herein, and all other rights and
remedies which may be available at law or in equity.
ARTICLE 9
Miscellaneous
Section 9.1 Notices. Any notice, request or other
communication to be given or made under this Agreement shall be
in writing and shall be given or made in the manner set forth in
the General Conditions.
Section 9.2 English Language. 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
satisfactory to IFC certified by an authorized representative of
the Company, which translation shall be the governing version
between the Company and IFC.
Section 9.3 Expenses. If any amount owing to IFC under
this Agreement shall be collected through any process of law or
shall be placed in the hands of attorneys for collection, the
Company shall pay (in addition to all monies then due in respect
of the IFC Loans, the IFC Shares or otherwise payable under this
Agreement), professional consultant and attorneys' and other fees
and expenses incurred in respect of such collection.
Section 9.4 Jury Trial.
(a) The Company hereby acknowledges that IFC shall be
entitled under applicable law, including the provisions of the
International Organizations Immunities Act, to immunity from a
trial by jury in any action, suit or proceeding arising out of or
relating to this Agreement or any Principal Document or the
transactions contemplated hereby or thereby, brought against IFC
in any Federal District Court of the United States of America.
(b) The Company hereby waives any and all rights to demand
a trial by jury in any action, suit or proceeding arising out of
or relating to this Agreement or any Principal Document or the
transactions contemplated hereby or thereby, brought against IFC
in any forum in which IFC is not entitled to immunity from a
trial by jury.
Section 9.5 Confidential Information.
(a) IFC may (i) disclose to any participant in the IFC
Loans, or (ii) disclose to any person for the purpose of
exercising any power, remedy, right, authority, or discretion
under this Agreement or any other Principal Document in
connection with a Default or Event of Default, any documents or
records of, or information about, any Principal Document, or the
assets, business or affairs of the Company.
(b) The Company acknowledges and agrees that,
notwithstanding the terms of any other agreement between the
Company and IFC, a disclosure of information by IFC in the
circumstances contemplated by this subsection does not violate
any duty owed to the Company or agreement between IFC and the
Company.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed in their respective names as of the date first above
written.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By: ____________________________________
Authorized Representative1
INTERNATIONAL FINANCE CORPORATION
By: ____________________________________
Authorized Representative
SCHEDULE 2.2(a)
FINANCING PLAN
Equity US$$
IFC $ 2,949,500
Sponsors' Equity $26,545,500
Total Equity $29,495,000
Loans US$$ DM
IFC A Loan $21,000,000
IFC B Loan $36,000,000
DEG Loan DM21,000,000
Total Loans $57,000,000 DM21,000,000
Total Financing $98,245,000 2/
SCHEDULE 2.2(b)
PROJECT COSTS*
Amount (US$)
EPC Plant and T-Line $46,340,000
EPC Miscellaneous Change Orders 600,000
Taxes & Duties 411,000
Land and Access Road 650,000
Preliminary Investigation 2,438,000
Engineering - Harza 5,290,000
Spare Parts and Start-up Testing 1,000,000
Development Costs 2,963,000
Construction Management & Supervision 2,653,000
Costs
Legal Fees 3,026,800
Insurance Premiums 1,558,000
GLOF Survey/Warning System 600,000
Environ. Mitigation and Community 550,000
Development
Engineering/Consulting (Lenders) 545,000
O&M/Training Costs during Construction 450,000
Contingency 12,228,476
Working Capital 1,500,000
Commitment Fee 671,478
Financing Fees 2,437,000
Interest During Construction, net 7,033,246
Debt Service Reserve 5,300,000
TOTAL PROJECT COSTS $98,245,000
* Project costs shall not include any termination or similar
fees in connection with any financing or contemplated financing
for the Project from sources other than the Lenders.
SCHEDULE 3.2(a)(i)
FORM OF IFC DISBURSEMENT REQUEST
[COMPANY LETTERHEAD]
[Date]
International Finance Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Washington, D.C. 20433
United States of America
Attention: Director, Power Department
Ladies and Gentlemen:
Investment No. 7365
Request for Loan Disbursement No. [ ]*
1. Please refer to the IFC Investment Agreement (the "IFC
Investment Agreement") dated as of the Closing Date between Bhote
Koshi Power Company Private Limited (the "Company") and
International Finance Corporation ("IFC"). Terms defined in the
IFC Investment Agreement have their defined meanings whenever
used in this request.
2. The Company irrevocably requests the disbursement on
________, 19 (or as soon as practicable thereafter) of the
amount of _______________________________ ($__________) under the
A Loan, and of the amount of
______________________________________ ($____________) under the
B Loan** (the "Disbursement") in accordance with the provisions
of Section 3.2 of the IFC Special Conditions. With respect to
the A Loan, the Company proposes [insert date] to be the Rate
Setting Date for the requested Tranche. You are requested to pay
such amount to the credit of the Offshore Retention Account in
accordance with the Trust and Retention Agreement.
3. IFC has heretofore disbursed the sum of __________________
Dollars ($__________) under the A Loan, and the sum of
_______________________________ ($_______________) under the B
Loan pursuant to the IFC Investment Agreement. Following the
Disbursement of the amount requested hereby, there will remain
undisbursed _________________ Dollars ($__________) under the A
Loan and __________________________________ Dollars
($__________________) under the B Loan.
4. Attached hereto are (i) a signed but undated receipt*** for
the amount hereby requested to be disbursed and the Company
hereby authorizes IFC to date such receipt as of the date of
actual disbursement by IFC of the funds hereby requested to be
disbursed and (ii) a copy of the report referred to in Section
3.5(b) of the General Conditions and the certification referred
to in Section 3.1(x) of the General Conditions.
5. For the purpose of Article 6 of the IFC Special Conditions
and Article 3 of the General Conditions, the Company hereby
certifies the following:
(a) on the date hereof, (1) all representations and
warranties contained in the General Conditions (other
than the representations made pursuant to Section
4.1(e)(ii) of the General Conditions) and in the other
Loan Documents to which the Company is a party are true
and correct in all material respects with the same
effect as though such representations and warranties
had been made on and as of the date hereof except where
expressed to be made on a specified date, (2) the
representations and warranties referred to in
Section 4.1(e)(ii) of the General Conditions are true
and correct in all material respects in the manner and
on the basis as contemplated by the said Section
4.1(e)(ii), in each case, both immediately before and
after giving effect to the disbursement requested
hereby, and (3) except as fully reflected in the
financial statements delivered to date pursuant to
Sections 5.1(a) and (b) of the General Conditions,
there are as of the date of such financial statements,
no liabilities or obligations with respect to the
Company of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not
due) which, either individually or in the aggregate,
could constitute a Material Adverse Change;
(b) no Event of Default or Default has occurred and is
continuing;
(c) since the date of the IFC Investment Agreement
nothing has occurred which is reasonably likely to
materially and adversely affect the carrying out of the
Project or the Company's ability to fulfill any
material obligation under the IFC Investment Agreement;
(d) no Force Majeure Event has occurred and is
continuing;
(e) the proceeds of the requested disbursement will
not be in reimbursement of, or used for, expenditures
in the territories of any country which is not a member
of IFC (other than any country which is a member of the
International Bank for Reconstruction and Development)
or for goods produced in or services supplied from such
territories;
(f) the proceeds of the requested disbursement are
promptly needed by the Company to pay Project Costs;
(g) since the date of the IFC Investment Agreement,
the Company has not incurred any material loss or
liability (except such liabilities as may be incurred
by the Company in accordance with Section 6.5 of the
General Conditions; and
(h) the Company has the authority to request the
amount requested to be disbursed and the amount
requested to be disbursed is within the Company's
available borrowing power. The Company shall not be in
violation of (A) its Charter Documents, (B) any
covenant or agreement contained in any document to
which the Company is a party, or (C) any law, rule or
regulation, directly or indirectly, limiting or
otherwise restricting the Company's borrowing power or
authority or its ability to borrow.
The above certifications are effective as of the date of
this IFC Disbursement Request and will continue to be effective
as of the date of the disbursement hereby requested. If any of
these certifications is no longer valid as of or prior to the
date of disbursement hereby requested, the Company will
immediately notify IFC and will repay the amount disbursed upon
demand by IFC if disbursement is made prior to the receipt of
such notice.
Yours truly,
BHOTE KOSHI POWER
COMPANY PRIVATE LIMITED
By:___________________________________
Authorized Representative
Copy to: Manager, Accounting Division
International Finance Corporation
SCHEDULE 3.2(a)(ii)
FORM OF IFC LOANS DISBURSEMENT RECEIPT
[COMPANY LETTERHEAD]
[Date]
International Finance Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Washington, D.C. 20433
United States of America
Attention: Manager, Accounting Division
Ladies and Gentlemen:
Investment No. 7365
Disbursement Receipt No. [ ]* (Loan)
We, Bhote Koshi Power Company Private Limited (the
"Company"), hereby acknowledge receipt on the date hereof, of the
sum of , disbursed to us by International Finance
Corporation ("IFC") under the IFC Loans, consisting of the sum of
______________________ Dollars ($________________) under the A
Loan and the sum of ___________________________ Dollars
($________________) under the B Loan, provided for in the IFC
Investment Agreement dated as of the Closing Date between the
Company and International Finance Corporation.
Yours truly,
BHOTE KOSHI POWER
COMPANY PRIVATE LIMITED
By:_____________________________
Authorized Representative**
SCHEDULE 4.1(b)
FORM OF SUBSCRIPTION REQUEST
[LETTERHEAD OF THE COMPANY]
[ Date ]*
International Finance Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Washington, D.C. 20433
United States of America
Gentlemen:
Investment No.7365
Subscription Request No. [**]
1. Please refer to the IFC Investment Agreement dated as
of the Closing Date (the "IFC Investment Agreement"), between
Bhote Koshi Power Company Private Limited (the "Company") and
International Finance Corporation ("IFC"). All terms used but
not defined herein are used as defined in the IFC Investment
Agreement.
2. The Company hereby irrevocably requests the
subscription and disbursement, on or before ________________ ,
199 ___ (or as soon as practicable thereafter), of the amount of
US$ _____________ , in respect of the IFC Subscription, in
accordance with the provisions of Section 4.1 of the IFC Special
Conditions. You are requested to pay such amount to the credit
of the Offshore Retention Account in accordance with the
provisions of the Trust and Retention Agreement.***
3. Against disbursement by IFC in accordance with Section
4.1 of the IFC Special Conditions, the Company will deliver to
you a share certificate representing the Shares purchased by IFC
at par with such subscription monies.
4. For the purposes of Article 6 of the IFC Special
Conditions and Article 3 of the General Conditions, the Company
hereby certifies as follows:
(a) on the date hereof, (1) all representations and
warranties contained in the General Conditions (other
than the representations made pursuant to Section
4.1(e)(ii) of the General Conditions) and in the other
Loan Documents to which the Company is a party are true
and correct in all material respects with the same
effect as though such representations and warranties
had been made on and as of the date hereof except where
expressed to be made on a specified date, (2) the
representations and warranties referred to in
Section 4.1(e)(ii) of the General Conditions are true
and correct in all material respects in the manner and
on the basis as contemplated by the said Section
4.1(e)(ii), in each case, both immediately before and
after giving effect to the disbursement requested
hereby, and (3) except as fully reflected in the
financial statements delivered to date pursuant to
Sections 5.1(a) and (b) of the General Conditions,
there are as of the date of such financial statements,
no liabilities or obligations with respect to the
Company of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not
due) which, either individually or in the aggregate,
could constitute a Material Adverse Change;
(b) no Event of Default or Default has occurred and is
continuing;
(c) since the date of the IFC Investment Agreement,
nothing has occurred which is reasonably likely to
materially and adversely affect the carrying out of the
Project or the Company's ability to fulfill any
material obligation under the IFC Investment Agreement;
(d) no Force Majeure Event has occurred and is
continuing;
(e) the proceeds of the requested disbursement will be
used to subscribe and purchase shares in the issued
share capital of the Company, and such amounts are
promptly needed by the Company for purposes of the
Project;
(f) after giving effect to the subscription requested
herein, (i) IFC will not have subscribed or paid for a
higher proportion of the IFC Shares than the proportion
which each other shareholder of the Company has
subscribed or paid for of the total number of Shares to
be subscribed by such shareholder in accordance with
the Financial Plan, and (ii) IFC will not have
subscribed or paid a higher proportion of the IFC
Subscription to the outstanding amount under the IFC
Loans than the proportion which the IFC Subscription
bears to the IFC Loans as set forth in the Financial
Plan;
(g) as of the date of this request, (1) the Sponsor
Shareholders have subscribed and paid _____ ordinary
shares of the Company at a purchase price of __________
Dollars ($ __________ ) per share at the time of
subscription of each ordinary share and (2) once the
subscription requested hereby has been paid, the
subscribed and paid share capital of the Company shall
be ______ ordinary shares;
(h) the proceeds of the requested disbursement will
not be in reimbursement of, or used for, expenditures
in the territories of any country which is not a member
of IFC (other than any country which is a member of the
International Bank for Reconstruction and Development)
or for goods produced in or services supplied from such
territories; and
(i) since the date of the IFC Investment Agreement,
the Company has not incurred any material loss or
liability (except such liabilities as may be incurred
by the Company in accordance with Section 6.5 of the
General Conditions).
5. Attached hereto is a copy of the certification referred
to in Section 3.1(x) of the General Conditions.
The above certifications are effective as of the date of
this Subscription Request and will continue to be effective as of
the date of the disbursement hereby requested. If any of these
certifications is no longer valid as of or prior to the date of
disbursement hereby requested, the Company will immediately
notify IFC and will repay the amount disbursed upon demand by IFC
if disbursement is made prior to the receipt of such notice.
Yours truly,
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:
Authorized Representative****
Copy to: Manager, Accounting Division
International Finance Corporation
ANNEX A
METHODOLOGY FOR TRANCHE RATE PRICING CALCULATION
The Base Fixed Rate (i.e. the rate to which the A Loan
Spread is applied) illustrated on the following table is a
weighted average calculation that uses two variables to weight
the Applicable Swap Rates quoted by the swap market. These
variables are: (i) the amortization amount and (ii) the period
for which the amortization amount will be outstanding. In
essence, each Tranche is treated as a series of bullet tranches
in amounts equal to the amounts of the relevant Disbursement
which are allocated for repayment on the respective repayment
dates and outstanding for lengths of time corresponding to the
relevant repayment dates. The terms used in the illustration are
defined below.
Definitions:
1. Applicable Swap Rates: The fixed-rate bullet swap-
equivalents of LIBOR (i.e. the fixed rate payable in the
swap market in exchange for receipt of LIBOR) obtained from
a market source as specified by IFC. The rates will provide
the basis for calculation of the Base Fixed Rate for each
Loan Disbursement. The example on the next page illustrates
swap rates quoted in the market on February 9th 1996. IFC
obtains these rates from Dow Xxxxx, Reuters or Bloomberg
market data sources. Upon request (up to once per month)
borrowers will be informed of the service and the page from
which relevant pricing quotes have been obtained.
2. Tenor: The period in years until a specific repayment date
occurs, calculated from the drawdown date of the relevant
Disbursement.
3. Tenor Amount: The product of the amount allocated to a
repayment date and the Tenor of that amount.
4. Amortization Weight: The percentage which a specific Tenor
Amount represents of the sum of all Tenor Amounts.
5. Weighted Average Swap Rate: The product of the Applicable
Swap Rate for an allocated amount and the Amortization
Weight applicable to that amount.
6. Base Fixed Rate: The total of all the Weighted Average Swap
Rates converted to the rate basis used for the Loan, and
rounded up to two decimal points.
7. Tranche: The sum of the Base Fixed Rate and the A Loan
Spread.
Applicable Swap Rates
Quote Date: 9 Feb 1996 Effective Date: 13 Feb 1996
Quote Basis: Semi Annual, 30/360 (by market convention)
Maturity Offered Rate
2 years 5.010%
3 years 5.190%
4 years 5.370%
5 years 5.540%
Interpolated 6 years 5.655%
7 years 5.770%
Interpolated 8 years 5.867%
Interpolated 9 years 5.963%
10 years 6.060%
Base Fixed Rate for a Tranche of $15,000,000
with 3 Years Grace and 10 Years Final Maturity
Disbursement Date: 13 February 1996
6 = 5 as %
Column # 1 2 3 4 5 = 1x3 of (total 5) 7 = 4 x6
Interpolated Weighted
Tenor Outstanding Amortization Offer Tenor Amortization Average
Date (Years) Principal Schedule Swap Rates Amounts Weights Swap Rate
13 Feb 1996 0 15,000,000 0
13 Aug 1996 0.5 15,000,000 0
13 Feb 1997 1 15,000,000 0
13 Aug 1997 1.5 15,000,000 0
13 Feb 1998 2 15,000,000 0
13 Aug 1998 2.5 15,000,000 0
13 Feb 1999 3 14,000,000 1,000,000 5.190% 3,000,000 3.0769% 0.1597%
13 Aug 1999 3.5 13,000,000 1,000,000 5.280% 3,500,000 3.5897% 0.1895%
13 Feb 2000 4 12,000,000 1,000,000 5.370% 4,000,000 4.1026% 0.2203%
13 Aug 2000 4.5 11,000,000 1,000,000 5.455% 4,500,000 4.6154% 0.2518%
13 Feb 2001 5 10,000,000 1,000,000 5.540% 5,000,000 5.1282% 0.2841%
13 Aug 2001 5.5 9,000,000 1,000,000 5.598% 5,500,000 5.6410% 0.3158%
13 Feb 2002 6 8,000,000 1,000,000 5.655% 6,000,000 6.1538% 0.3480%
13 Aug 2002 6.5 7,000,000 1,000,000 5.713% 6,500,000 6.6667% 0.3808%
13 Feb 2003 7 6,000,000 1,000,000 5.770% 7,000,000 7.1795% 0.4143%
13 Aug 2003 7.5 5,000,000 1,000,000 5.818% 7,500,000 7.6923% 0.4476%
13 Feb 2004 8 4,000,000 1,000,000 5.867% 8,000,000 8.2051% 0.4814%
13 Aug 2004 8.5 3,000,000 1,000,000 5.915% 8,500,000 8.7179% 0.5157%
13 Feb 2005 9 2,000,000 1,000,000 5.963% 9,000,000 9.2308% 0.5505%
13 Aug 2005 9.5 1,000,000 1,000,000 6.012% 9,500,000 9.7436% 0.5858%
13 Feb 2006 10 0 1,000,000 6.060% 10,000,000 10.2564% 0.6215%
TOTALS $15,000,000 97,500,000 100.0000% 5.7666%
The Base Fixed Rate for the tranche 5.69% on a 30/360 semi-annual
basis.
_______________________________
1 As named in the Company's Certificate of Incumbency and
Authority (see Schedule 3.1(i) to the General Conditions).
2 For purposes of this Schedule 2.2(a), an exchange rate of
DM1.7872 = $1US has been assumed.
* Each to be numbered in series.
** Disbursements of the IFC Loans must be made in the
ratios and in accordance with the other requirements set out in
the IFC Investment Agreement and the Subscription Agreements.
*** See Schedule 3.2(a)(ii) for form of receipt.
* Each to be numbered in series.
** As named in the Company's Certificate of Incumbency and
Authority (see Schedule 3.1(i) to the General Conditions).
* To be dated ten (10) Business Days before the date of any
proposed subscription and disbursement of IFC Subscription.
** Each to be numbered in series. To correspond with number of
the Disbursement Request. See Schedule 3.2(a)(i).
*** Any exchange control consents, if required, must be provided
by the Company to IFC prior to disbursement.
**** As named in the Company's Certificate of Incumbency and
Authority (see Schedule 3.1(i) to the General Conditions).
