EXHIBIT 10.110
Execution Copy
PANDA GLOBAL ENERGY COMPANY
$155,200,000 12 1/2% Senior Secured Notes due 2004
PURCHASE AGREEMENT
April 11, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Each of Panda Global Energy Company, a Cayman Islands
exempted company (the "Issuer"), Panda Global Holdings, Inc., a
Delaware corporation (the "Company"), and Panda Energy
International, Inc., a Texas corporation ("PEI") (but for the
Company and PEI only with respect to Sections 4(f), 5, 6 and 9
herein) agrees with you as follows:
1. The Note Offering and Related Transactions. The
Issuer proposes to offer and sell (the "Offering") to Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation (the "Initial
Purchaser"), $155,200,000 aggregate principal amount of its 12
1/2% Senior Secured Notes due 2004 (the "Notes"). The Notes are
to be issued pursuant to the provisions of an Indenture to be
dated as of April 22, 1997 as supplemented by the First
Supplemental Indenture thereto, to be dated as of April 22, 1997
(the "Senior Secured Notes Indenture"), between the Issuer and
Bankers Trust Company, as Trustee (the "Trustee"). The Senior
Secured Notes will be guaranteed (the "Guarantee") by the Company
pursuant to a Guarantee issued under an Indenture to be dated as
of April 22, 1997 as supplemented by the First Supplemental
Indenture thereto, to be dated as of April 22, 1997 (the "Company
Indenture" and together with the Senior Secured Notes Indenture,
the "Indentures"), between the Company and the Trustee.
Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Offering Memorandum
(as hereinafter defined) unless otherwise indicated.
The Notes will be offered and sold to you pursuant to
an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "Securities Act"), and
may be offered and sold outside the United States in reliance on
Regulation S under the Securities Act. The Issuer has prepared a
preliminary offering memorandum, dated March 31, 1997 and
supplemented on April 9, 1997 (the "preliminary Offering
Memorandum"), and a final offering memorandum, dated April 11,
1997 (the "Offering Memorandum"), relating to the Company, the
Issuer, the Joint Ventures and the Notes.
Upon original issuance thereof, and until such time as
the same is no longer required under the applicable requirements
of the Securities Act, the Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the
following legend:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM, REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THE NOTE EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT:
(A) SUCH NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE
UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON
AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS),
(2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION; AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
You have advised the Issuer that you will make offers
(the "Exempt Resales") of the Notes purchased hereunder on the
terms set forth in the Offering Memorandum, as amended or
supplemented, solely to persons whom you reasonably believe to be
"qualified institutional buyers," as defined in Rule 144A under
the Securities Act ("QIBs") and to a limited number of
institutional "accredited investors" referred to in Rule
501(a)(1), (2), (3) or (7) under the Act (each, an "Accredited
Investor"). The QIBs and the Accredited Investors are sometimes
referred to herein as the "Eligible Purchasers." You will offer
to such QIBs and Accredited Investors the Notes initially at a
price equal to 93.444% of the principal amount thereof. Such
prices may be changed by you at any time without notice.
Holders (including subsequent transferees) of the Notes
will have the registration rights set forth in the registration
rights agreement relating thereto (the "Registration Rights
Agreement"), to be dated the Closing Date (as defined herein), in
substantially the form of Exhibit A hereto, for so long as such
Notes constitute "Transfer Restricted Securities" (as defined in
the Registration Rights Agreement). Pursuant to the Registration
Rights Agreement, the Issuer and the Company will agree to file
with the Securities and Exchange Commission (the "Commission"),
under the circumstances set forth therein (i) a registration
statement under the Securities Act (the "Exchange Offer
Registration Statement") relating to the issue of senior secured
notes (the "Registered Notes"; the Notes and the Registered Notes
are collectively referred to as the "Securities") of the Issuer
together with a new guarantee by the Company of such new notes to
be offered in exchange for an equal principal amount of the Notes
(and the related Guarantee by the Company of the Issuer's
obligations under the Notes) (the "Exchange Offer"), and (ii) a
shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement" and together
with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the
Notes, and to use its best efforts to cause such Registration
Statements to be declared effective. This Purchase Agreement
(this "Agreement"), the Securities, the Indentures, the
Guarantee, the Registration Rights Agreement, the Luannan
Financing Agreements, the Luannan Project Documents that have
been duly authorized, executed and delivered on or before the
date hereof and the Collateral Documents are hereinafter
sometimes referred to collectively as the "Operative Documents."
As used herein, the terms Notes and Securities shall include the
Guarantee thereof whenever the context permits.
2. Agreements to Sell and Purchase. On the basis of
the representations and warranties contained in this Agreement,
and subject to its terms and conditions, the Issuer agrees to
issue and sell to you and you agree to purchase from the Issuer,
$155,200,000 aggregate principal amount of Notes together with
the related Guarantee issued by the Company. The purchase price
for the Notes shall be $140,674,335, net of discount.
3. Delivery and Payment. Delivery to the Initial
Purchaser of, and payment for, the Notes shall be made at 10:00
a.m., New York City time, on April 22, 1997 (the "Closing Date")
at the offices of Xxxxxxxxxx & Xxxxx LLP, 30 Rockefeller Plaza,
New York, New York, or such other time or place as you and the
Issuer shall designate.
Payment for the Notes shall be made by the Initial
Purchaser to the Issuer or its order by wire transfer in U.S.
dollars in immediately available funds to an account at a bank in
New York City designated in writing by the Issuer prior to the
Closing Date. Such payment shall be made against delivery at the
place or places and in the principal amounts of Notes specified
by the Initial Purchaser to (a) the Trustee, on behalf of The
Depository Trust Company ("DTC"), on behalf of The Euroclear
System ("Euroclear") and Cedel Bank, societe anonyme ("Cedel
Bank"), of a global certificate registered in the name of Cede &
Co., as nominee of DTC, in respect of the Notes sold pursuant to
Regulation S, (b) the Trustee, on behalf of DTC, of a global
certificate registered in the name of Cede & Co., as nominee of
DTC, in respect of the Notes sold pursuant to Rule 144A and (c)
the Trustee of certificates in permanent certificated form and
bearing the restrictive legend specified in the Offering
Memorandum in respect of the Notes sold to institutional
Accredited Investors.
4. Agreements of the Issuer, the Company and PEI.
The Issuer, the Company and (as to Section 4(f) only) PEI each
agree with the Initial Purchaser as follows:
(a) Before completion of the distribution of the Notes
by you, to advise you promptly and, if requested by you,
confirm such advice in writing, (i) of the issuance by any
state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the
Notes for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purpose by any state
securities commission or other regulatory authority, and
(ii) before the completion of the Exchange Offer, to advise
you promptly, and if requested by you, confirm such advice
in writing, of (A) the happening of any event that makes any
statement of a material fact made in the Offering Memorandum
untrue or that requires the making of any additions to or
changes in the Offering Memorandum in order to make the
statements therein, in the light of the circumstances under
which they are made, not misleading and (B) the issuance of
any quarterly or annual financial statements by the Issuer
or the Company (copies of which shall be delivered to you
within one business day after issuance). The Issuer and the
Company shall use their best efforts to prevent the issuance
of any stop order or order suspending the qualification or
exemption of any of the Notes under any state securities or
Blue Sky laws, and if at any time any state securities
commission or other regulatory authority shall issue an
order suspending the qualification or exemption of any of
the Notes under any state securities or Blue Sky laws, the
Issuer and the Company shall use their best efforts to
obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish you, without charge, as many copies of
the preliminary Offering Memorandum and the Offering
Memorandum, and any amendments or supplements thereto, as
you may reasonably request. The Issuer and the Company
consent to the use of the preliminary Offering Memorandum
and the Offering Memorandum, and any amendments and
supplements thereto, by you in connection with Exempt
Resales; provided, however, that the Initial Purchaser shall
discontinue using such preliminary Offering Memorandum or
Offering Memorandum if advised by the Issuer or the Company
that the preliminary Offering Memorandum or Offering
Memorandum is to be amended or supplemented until such
document is so amended or supplemented.
(c) Not to amend or supplement the preliminary
Offering Memorandum or the Offering Memorandum prior to the
Closing Date unless you shall previously have been advised
thereof and shall not have objected thereto in writing
within five business days after being furnished a copy
thereof. The Issuer and the Company shall promptly prepare,
upon your request, any amendment or supplement to the
preliminary Offering Memorandum or the Offering Memorandum
that may be necessary or advisable in connection with Exempt
Resales.
(d) If, after the date hereof and prior to
consummation of any Exempt Resales, any event shall occur as
a result of which, in the judgment of the Issuer and its
counsel or in the reasonable opinion of your counsel, it
becomes necessary to amend or supplement the Offering
Memorandum in order to make the statements therein, in the
light of the circumstances when the Offering Memorandum is
delivered to an Eligible Purchaser which is a prospective
purchaser, not misleading, or if it is necessary to amend or
supplement the Offering Memorandum to comply with applicable
law, promptly to prepare an appropriate amendment or
supplement to the Offering Memorandum so that the statements
therein as so amended or supplemented will not, in the light
of the circumstances when the Offering Memorandum is so
delivered, be misleading, or so the Offering Memorandum will
comply with applicable law.
(e) To cooperate with you and your counsel in
connection with the qualification of the Notes under the
state securities or Blue Sky laws of such jurisdictions in
the United States as you may request and to continue such
qualification in effect so long as required for the Exempt
Resales; provided, however that neither the Issuer nor the
Company shall be required in connection therewith to
register or qualify as a foreign corporation where it is not
now so qualified or to take any action that would subject it
to the service of process in suits or taxation, other than
as to matters and transactions relating to the Exempt
Resales, in any jurisdiction where it is not now so subject.
The Issuer and the Company will continue such qualification
in effect so long as required by law for distribution of the
Notes.
(f) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is
terminated, and as except as otherwise may have been agreed
in writing, to pay all costs, expenses, fees and taxes
incident to and in connection with: (i) the preparation,
printing, processing, distribution and delivery of the
preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements and
exhibits) and all amendments and supplements thereto,
(ii) the preparation (including, without limitation, word
processing and duplication costs) printing, processing,
distribution and delivery of this Agreement and the other
Operative Documents, and all preliminary and final Blue Sky
memoranda and all other agreements, memoranda,
correspondence and other documents prepared and delivered in
connection herewith and with the Exempt Resales, (iii) the
issuance and delivery by the Issuer of the Notes and the
Company of the Guarantee, (iv) the qualification of the
Securities for offer and sale under the securities or Blue
Sky laws of the several states (including, without
limitation, the reasonable fees and disbursements of your
counsel relating to such registration or qualification), (v)
furnishing such copies of the preliminary Offering
Memorandum and the Offering Memorandum, and all amendments
and supplements thereto, as may be reasonably requested for
use in connection with Exempt Resales, (vi) the preparation
of certificates for the Notes (including, without
limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Issuer's and the Company's
counsel and accountants, (viii) the fees and expenses of the
Trustees and their counsel under the Indentures, (ix) all
expenses and listing fees in connection with the application
for designation of the Notes in the National Association of
Securities Dealers, Inc. ("NASD") Private Offerings, Resales
and Trading through Automated Linkages Market ("PORTAL"),
(x) all fees and expenses (including fees and expenses of
counsel) of the Issuer in connection with approval of the
Securities by DTC for "book-entry" transfer, (xi) any fees
charged by rating agencies for rating the Securities, (xii)
all "road show" and other marketing expenses related to the
preparation of slides, videotapes and printed marketing
materials, and travel, hotel, food and entertainment
expenses of affiliates of the Issuer and the Company, (xiii)
the performance by each of the Issuer and the Company of its
other obligations under this Agreement and the other
Operative Documents and (xiv) any fees and expenses of the
Issuer in connection with approval of the Notes by DTC,
Euroclear and Cedel Bank for "book-entry" transfer.
(g) To use the proceeds from the sale of the Notes in
the manner described in the Offering Memorandum under the
caption "Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively
any attempts to claim, the benefit of any usury laws against
the holders of any Notes.
(i) To do and perform all things required to be done
and performed under this Agreement by them prior to or after
the Closing Date and to satisfy all conditions precedent on
their part to the delivery of the Notes that are within
their control.
(j) Not to sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) that would be integrated with
the sale of the Notes in a manner that would require the
registration under the Securities Act of the sale to you or
Eligible Purchasers of the Notes.
(k) For so long as any of the Securities remain
outstanding and during any period in which the Issuer and
the Company are not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to make available to any QIB or beneficial owner of
the Notes in connection with any sale thereof and any
prospective purchaser of such Notes from such QIB or
beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act.
(l) To use its best efforts as provided in the
Registration Rights Agreement to cause the Exchange Offer to
be made in the appropriate form to permit registration of
the Registered Notes to be offered in exchange for the Notes
and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.
(m) To use their best efforts to effect the inclusion
of the Notes in PORTAL.
(n) During a period of five years following the date
of this Agreement, to deliver to you promptly upon their
becoming available, copies of all current, regular and
periodic reports filed by the Issuer or the Company with the
Commission or any securities exchange or with any
governmental authority succeeding to any of the Commission's
functions and such other publicly available information
concerning the Issuer and the Company as the Initial
Purchaser shall reasonably request.
(o) Not to, and to use its reasonable best efforts to
cause its affiliates not to, offer, sell, contract to sell
or grant any option to purchase or otherwise transfer or
dispose of any preferred stock or debt security issued or
guaranteed by the Issuer or the Company (other than (i) the
Notes and (ii) the Registered Notes issuable in the Exchange
Offer), or any security convertible into or exchangeable or
exercisable for any such preferred stock or debt security,
for a period of 90 days after the Closing Date, without your
prior written consent.
(p) Prior to or concurrently with the Closing, to
enter into the Registration Rights Agreement in
substantially the form attached hereto as Exhibit A in order
to permit registration of the Registered Notes to be offered
in exchange for the Notes as contemplated thereby.
(q) To comply with the requirements of DTC, Euroclear
and Cedel Bank relating to the approval of the Notes for
"book-entry" transfer.
(r) During the two year period following the Closing
Date, neither the Company nor the Issuer will, nor will they
permit any of their affiliates (as defined for the purposes
of Rule 144 under the Securities Act) to, resell any of the
Notes that may be acquired by any of them.
(s) Not to engage, directly or indirectly through any
agent (provided that no agreement is made as to the Initial
Purchaser or any person acting on its behalf), in any
"directed selling efforts" (as defined in Regulation S) with
respect to the Notes, and to comply and cause any person
acting on its behalf to comply with the offering
restrictions requirement of Regulation S.
5. Representations and Warranties. (a) Each of the
Issuer, the Company and PEI represents and warrants, jointly and
severally, to you that:
(i) The preliminary Offering Memorandum and the
Offering Memorandum do not, and any supplement or amendment
to them will not, contain any untrue statement of a material
fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
except that the representations and warranties contained in
this paragraph (i) shall not apply to statements in or
omissions from the preliminary Offering Memorandum and the
Offering Memorandum (or any supplement or amendment thereto)
made in reliance upon and in conformity with information
furnished to the Issuer or the Company in writing by you
expressly for use therein, which information is specified in
the second paragraph of Section 6(c). There are no
agreements, contracts, indentures, leases or other documents
or instruments of the Issuer, the Joint Ventures or the
Company that are required to be described in the Offering
Memorandum in order that the statements made therein are not
misleading in any material respect or in order that there
are no material omissions therefrom. No stop order
preventing the use of the preliminary Offering Memorandum or
the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the
registration requirements of the Securities Act, has been
issued. Each of the preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the
information specified in, and meeting the requirements of,
Rule 144A(D)(4) under the Securities Act.
(ii) When the Notes and Guarantee are issued and
delivered pursuant to this Agreement, none of the Notes or
the Guarantee will be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of the
Issuer or the Company that are listed on a national
securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(iii) Each of the Issuer, the Company and their
respective Subsidiaries (other than the Joint Ventures) is a
corporation, partnership or exempted company, as the case
may be, duly organized or formed, validly existing and in
good standing under the laws of its respective jurisdiction
of incorporation or formation with full power and authority
to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum, and is
duly authorized, registered and qualified to conduct its
business and is in good standing in each jurisdiction or
place where the nature or location of its properties (owned
or leased) or the conduct of its business requires such
registration or qualification, except where the failure to
so register or qualify would not have a Material Adverse
Effect (as defined below). The Issuer has not engaged in
any business or activity other than in connection with the
development, construction, ownership and financing of the
Luannan Facility.
(iv) The entities listed on Schedule I hereto
are the only subsidiaries, direct or indirect, of the
Company. The Company owns, directly or indirectly through
other subsidiaries, the percentage listed in Schedule I
hereto of the outstanding capital stock or other securities
evidencing equity ownership of such subsidiaries, free and
clear of any security interest, claim, lien, limitation on
voting rights or encumbrance (except for those arising
pursuant to state and federal securities laws and those
described in Schedule I or the Offering Memorandum); and all
of such securities have been duly authorized, validly
issued, are fully paid and nonassessable and were not issued
in violation of any preemptive or similar rights. There are
no outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, or any agreements
providing for the issuance (contingent or otherwise) of, any
such shares of capital stock or other equity interest of
such subsidiaries other than those described in Schedule I
or the Offering Memorandum. Neither the Company nor any of
its subsidiaries has any investments in the securities of
other persons and there are no outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to
acquire, or instruments convertible into or exchangeable
for, any such securities of such person.
(v) All of the outstanding capital stock of the
Issuer is owned by the Company, and all of the outstanding
capital stock of the Company is owned by PEI. Except as
disclosed in the Offering Memorandum, there are no
outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any such shares of
capital stock or other equity interest of the Issuer or the
Company.
(vi) Each Joint Venture is a Sino-foreign joint
venture duly organized, validly existing and in good
standing under the laws and the regulations of the People's
Republic of China, with full corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum, and is
duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the
nature or location of its properties (owned or leased) or
the conduct of its business requires such registration or
qualification, except where the failure to so register or
qualify would not have a Material Adverse Effect. All joint
venture interests in the Joint Ventures have been duly and
validly authorized and issued; and the indirect ownership of
joint venture interests by the Issuer in each of the Joint
Ventures conforms to the descriptions thereof contained in
the Offering Memorandum; Pan-Western has good and valid
title to the joint venture interests in each of the Joint
Ventures as described in the Offering Memorandum, free and
clear of all encumbrances or claims, except for restrictions
under the Indentures and the Collateral Documents and except
as described in the Offering Memorandum. On the Closing
Date, the Joint Ventures will not have outstanding any
certificates or securities that evidence interests in the
Joint Ventures, or any securities convertible into or
exchangeable for any joint ventures interests or any rights
to subscribe for or to purchase, or any warrants or options
for the purchase of, or any agreements providing for the
issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, any such
joint venture interests except for those rights established
by the Joint Venture Agreements or restrictions under the
Indentures. None of the Joint Ventures own or holds any
capital stock or any other securities of any corporation or
has any equity interest in any firm, partnership,
association or other entity. None of the Joint Ventures has
engaged in any business or activity other than in connection
with the development, construction, ownership and financing
of the Luannan Facility.
(vii) Each of the Issuer, the Company and PEI has
full corporate power and authority to execute and enter
into, deliver and perform its obligations under this
Agreement, the Securities, the Guarantee, and the Collateral
Documents to which it is a party and each of the Joint
Ventures has full corporate power and authority to execute
and enter into, deliver and perform its obligations under
the Operative Documents to which it is a party. This
Agreement and the Luannan Project Documents have been duly
authorized, executed and delivered by each of the Issuer,
the Company and PEI that is a party thereto, and the other
Operative Documents have been or will be duly authorized,
executed and delivered by or on the Closing Date and,
assuming due authorization, execution and delivery by the
parties thereto (other than the Issuer, the Company, PEI and
the Joint Ventures) each of this Agreement and the other
Operative Documents constitutes, or when executed and
delivered will constitute, the valid and legally binding
obligation of each of the Issuer, the Company, PEI and the
Joint Ventures that is a party thereto, enforceable against
each such party in accordance with its terms, except as the
enforcement hereof and thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement
of creditors' rights generally and subject to the
applicability of general principles of equity; no
qualification of the Indentures under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act") is
required in connection with the offer and sale of the Notes
contemplated thereby or in connection with the Exempt
Resales; and the Operative Documents conform in all material
respects to the descriptions thereof in the Offering
Memorandum.
(viii) The execution and delivery of the Operative
Documents, and the performance by the Issuer, the Company
and the Joint Ventures are within such parties' corporate or
other powers, have been or will be on or before the Closing
Date duly authorized by all necessary corporate and other
actions, require no action by or in respect of, or filing
with, any governmental body, agency or official (except such
as have been obtained or made and are in full force and
effect and as otherwise described in the Offering
Memorandum); to the best of the Issuer's and the Company's
knowledge and belief after reasonable investigation, on or
before the Closing Date, each of the Operative Documents
will be duly executed and delivered by the parties thereto
(other than the Issuer, the Company and PEI) and will
constitute a valid and binding agreement of each of such
parties, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and
subject to the applicability of general principles of
equity.
(ix) All Permits required to be obtained by or
on behalf of the Issuer and the Joint Ventures in connection
with (i) the due execution, delivery and performance by the
Issuer or any of the Joint Ventures of the Operative
Documents to which it is a party and (ii) the use,
ownership, occupancy, operation, or maintenance of the
Luannan Facility that are required to be obtained on or
prior to the date hereof have been duly obtained, have been
validly issued, and are in full force and effect. None of
the Company or the Issuer has any reason to believe that any
of such Permits that are not required to be obtained on or
prior to the date hereof will not be obtained. To the best
knowledge of the Issuer and the Company, all permits that
are required to be obtained on or prior to the date hereof
in the name of any of the County Partners (as such term is
defined in the Offering Memorandum) in connection with the
matters described in clauses (i) and (ii) of the first
sentence of this paragraph, have been duly obtained, have
been validly issued and are in full force and effect and
final determination has been made thereon.
(x) Each of the Issuer, the Company and the
Joint Ventures maintains a system of internal accounting
controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally
accepted accounting principles in the United States, the
Cayman Islands or the People's Republic of China, as the
case may be, and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is
taken with respect to any difference.
(xi) The easements, licenses and other rights
granted or to be granted to the Joint Ventures pursuant to
the terms of the relevant Operative Documents are not
subject to any Liens (other than Permitted Liens) and
provide or will provide the Joint Ventures with all rights
and property interests required to enable the Joint Ventures
to obtain all services, materials or rights (including
access) required for the operation and maintenance of the
Luannan Facility, including the Joint Ventures' full and
prompt performance of their obligations, and full and timely
satisfaction of all conditions precedent to the performance
by others of their obligations under the Operative
Documents, other than those services, materials or rights
that reasonably can be expected to be obtainable in the
ordinary course of business.
(xii) Each of the Issuer, the Company and their
respective subsidiaries has good, marketable and valid title
in and to all of the Collateral which it purports to own
free and clear of all Liens other than Permitted Liens.
With respect to the personal property forming a part of the
Collateral, all filings, recordings, registrations and other
actions have been made, obtained and taken in all relevant
jurisdictions that are necessary to create and perfect the
Liens in all right, title, estate and interest of the
Issuer, the Company and their respective Subsidiaries, in
the Collateral covered thereby, subject to no prior, equal
or junior Liens other than Permitted Liens. The Collateral
Documents create, in favor of the Trustees for the benefit
of the Holders, a legally valid, first priority security
interest and upon delivery of the Collateral to the Trustee
pursuant to the Collateral Documents, such security interest
will be perfected. No financing statement or other document
creating, perfecting or recording any Lien on any Collateral
(other than Permitted Liens and the Lien of the Collateral
Documents) is on file in any jurisdiction.
(xiii) To the best of the Issuer's knowledge,
neither any County Partner nor any Joint Venture Company is
in default in the performance of any material term, covenant
or obligation under any Luannan Project Document. To the
best of the Issuer's knowledge, there is no dispute between
any Joint Venture Company and any County Partner with
respect to any Luannan Project Document.
(xiv) Except as disclosed in the Offering
Memorandum, subsequent to the date as of which such
information is given in the Offering Memorandum, neither the
Issuer, the Company nor any of the Joint Ventures has
incurred any liability or obligation, direct or contingent,
or entered into any transaction, in each case that is
material to the Issuer, the Company or any of the Joint
Ventures, and there has not been any change in the capital
stock or equity, or material increase in the short-term or
long-term debt, of the Issuer, the Company or any of the
Joint Ventures or any event or circumstance that has had, or
reasonably could be expected to have, a Material Adverse
Effect.
(xv) The execution and delivery of this
Agreement, the other Operative Documents and the sale of the
Notes to the Initial Purchaser by the Issuer or by the
Initial Purchaser to Eligible Purchasers will not involve
any prohibited transaction within the meaning of Section 406
of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or Section 4975 of the Internal Revenue
Code of 1986. The representation made by the Issuer and the
Company in the preceding sentence is made in reliance upon
and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the
Eligible Purchasers as set forth in the Offering Memorandum
under the Section entitled "Notice to Investors."
(xvi) Each Luannan Project Document and Luannan
Financing Agreement is (or will be when executed and
delivered by all parties thereto) in full force and effect
and constitutes or will constitute a valid and legally
binding obligation of the Joint Ventures enforceable in
accordance with its terms and, to the best knowledge of the
Issuer and the Company, constitutes a validly and legally
binding obligation of each other party that is a party
thereto enforceable against each such party, to the extent
they are parties thereto, in accordance with the terms
thereof, except in each case as such enforceability may be
limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and
subject to the applicability of general principles of
equity. After giving effect to the transactions
contemplated by this Agreement, the Luannan Project
Documents and the Luannan Financing Agreements, none of the
Joint Ventures will be in default (and no event has occurred
which with lapse of time or notice or action by a third
party could reasonably be expected to result in a default)
in the performance of or compliance with any term or
provisions of any Luannan Project Documents and Luannan
Financing Agreements and, to the best knowledge of the
Issuer, no force majeure has occurred and is continuing
under any Luannan Project Document and Luannan Financing
Agreement.
(xvii) The Issuer and the Company have reviewed
the financial projections for the Luannan Facility contained
in the Luannan Engineering Report (the "Projections") and
believe that the Projections are based on assumptions that,
to the extent material for purposes of consideration of the
Projections taken as a whole, are accurately disclosed in
all material respects in the Offering Memorandum. The
Issuer and the Company believe the Projections to be
reasonable in light of the assumptions made therein. The
Issuer and the Company have reviewed the assumptions
contained in the Luannan Coal Consultant's Report prepared
by Xxxxxxx & Xxxxxxx, Inc., and the Issuer and the Company
believe such assumptions to be reasonable.
(xviii) The capitalization of the Issuer and its
consolidated subsidiaries as of December 31, 1996 is as set
forth in the Offering Memorandum in the section titled
"Capitalization" under the column titled "Actual."
(xix) Xxxxx'x Investors Service, Inc. has
assigned a rating of B2 to the Notes; Standard & Poor's
Ratings Service has assigned a rating of B- to the Notes and
Duff & Xxxxxx Credit Rating Co. has assigned a rating of B
to the Notes. No downgrade of such ratings has occurred as
of the date hereof, and to the best knowledge of the Issuer
and the Company none is contemplated.
(xx) The Luannan Power Purchase Agreement
provides that NCPGC shall purchase and take all net
electrical output delivered by (i) the Luannan Facility
during Peak Hours; (ii) the first unit of the Plants, up to
a maximum of 260,000 kWh during Non-Peak Hours; (iii) the
first unit of the Plants, up to a maximum of 240,000 kWh
during Trough Hours; (iv) the second unit of the Plants, up
to a maximum of 520,000 kWh during Non-Peak Hours and (v)
the second unit of the Plants, up to a maximum of 480,000
kWh during Trough Hours.
(xxi) Except as set forth in the Offering
Memorandum, the pricing formula set forth in the Pricing
Document does not require PRC central government approval.
(xxii) The Notes have been duly and validly
authorized for issuance and sale to you by the Issuer
pursuant to this Agreement and, when issued and
authenticated in accordance with the terms of the Senior
Secured Notes Indenture and delivered against payment
therefor in accordance with the terms hereof, will be the
legally valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their
terms (except as such enforceability may be limited by any
exceptions to enforceability of the type set forth in the
legal opinions delivered to you pursuant to Section 7(g)
hereof) and entitled to the benefits of the Senior Secured
Notes Indenture. The Notes when issued, authenticated and
delivered, will conform to the descriptions thereof in the
Offering Memorandum.
(xxiii) The Guarantee has been duly and validly
authorized and, when duly executed and delivered by the
Company and endorsed upon a duly issued and authenticated
Note in accordance with the terms of the Company Indenture
will be the legally valid and binding obligations of the
Company, enforceable against the Company in accordance with
their terms (except as such enforceability may be limited by
any exceptions to enforceability of the type set forth in
the legal opinions delivered to you pursuant to Section 7(g)
hereof) and entitled to the benefits of the Company
Indenture. The Guarantee, when executed and delivered, will
conform to the description thereof in the Offering
Memorandum.
(xxiv) The Company Indenture will have been duly
and validly authorized by the Company on or before the
Closing Date and, when duly executed and delivered by the
Company (assuming the due execution and delivery thereof by
the Trustee), will be the legally valid and binding
obligation of the Company, enforceable against the Company
in accordance with its terms (except as such enforceability
may be limited by any exceptions to enforceability of the
type set forth in the legal opinions delivered to you
pursuant to Section 7(g) hereof). The Senior Secured Notes
Indenture has been duly and validly authorized by the Issuer
and, when duly executed and delivered by the Issuer
(assuming the due execution and delivery thereof by the
Trustee), will be the legally valid and binding obligation
of the Issuer, enforceable against the Issuer in accordance
with its terms (except as such enforceability may be limited
by any exceptions to enforceability of the type set forth in
the legal opinions delivered to you pursuant to Section 7(g)
hereof). The Indentures, when executed and delivered, will
conform to the descriptions thereof in the Offering
Memorandum and will conform to the requirements of the Trust
Indenture Act.
(xxv) The Registration Rights Agreement will have
been duly and validly authorized by the Issuer and the
Company on or before the Closing Date and, when duly
executed and delivered by the Issuer and the Company
(assuming the due execution and delivery thereof by you),
will be the legally valid and binding obligation of the
Issuer and the Company, enforceable against the Issuer and
the Company in accordance with its terms (except as such
enforceability may be limited by any exceptions to
enforceability of the type set forth in the legal opinions
delivered to you pursuant to Section 7(g) hereof). The
Registration Rights Agreement, when executed and delivered,
will conform to the description thereof in the Offering
Memorandum.
(xxvi) The Registered Notes have been duly and
validly authorized for issuance by the Issuer, and if and
when issued and authenticated in accordance with the terms
of the Issuer Indentures and the Registration Rights
Agreement, will be the legally valid and binding obligations
of the Issuer, enforceable against the Issuer in accordance
with their terms (except as such enforceability may be
limited by any exceptions to enforceability of the type set
forth in the legal opinions delivered to you pursuant to
Section 7(g) hereof) and entitled to the benefits of the
Issuer Indentures. The Registered Notes, if and when
issued, authenticated and delivered, will conform to the
descriptions thereof in the Offering Memorandum.
(xxvii) None of the Issuer, the Company or the
Joint Ventures or any of their subsidiaries is (A) in
violation of its respective charter or bylaws or other
organizational documents, (B) in default in the performance
of any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which it is a
party or by which it is bound or to which any of its
properties is subject, or (C) is in violation of any law,
statute, rule, regulation, judgment or court decree
applicable to the Issuer, the Company or the Joint Ventures,
any of their subsidiaries or their assets or properties that
in the case of clauses (A), (B) and (C) above, (x) would
reasonably be expected, individually or in the aggregate, to
result in a material adverse effect on the assets,
properties, business, results of operations, condition
(financial or otherwise) or business prospects of the Issuer
or the Company or the Joint Ventures and their subsidiaries,
taken as a whole, (y) would materially interfere with or
adversely affect the issuance of the Notes and the Guarantee
or (z) in any manner draw into question the validity of this
Agreement or any other Operative Document (any of the events
set forth in clauses (x), (y) or (z), a "Material Adverse
Effect"). To the best knowledge of the Issuer and the
Company, there exists no condition that, with notice, the
passage of time or otherwise, would constitute a default
under any such document or instrument which would reasonably
be expected to have a Material Adverse Effect.
(xxviii) The execution, delivery and performance by
each of the Issuer, the Company, PEI and the Joint Ventures
of this Agreement and the other Operative Documents to which
it is a party, the issuance and sale of the Securities by
the Issuer, the execution, delivery and performance of the
Guarantee by the Company, and the consummation of the
transactions contemplated hereby and thereby, will not
violate, conflict with or constitute a breach of any of the
terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute
a default), or require consent under, or result in the
imposition of a lien or encumbrance (except Liens
contemplated by the Collateral Documents) on any properties
of the Issuer, the Company, PEI or any of their
subsidiaries, or an acceleration of indebtedness pursuant
to, (i) the charter or bylaws of the Issuer, the Company,
PEI or any of their subsidiaries, (ii) any bond, debenture,
note, indenture, mortgage, deed of trust or other agreement
or instrument to which the Issuer, the Company, PEI or any
of their subsidiaries is a party or by which any of them or
their property is or may be bound, (iii) any statute, rule
or regulation applicable to the Issuer, the Company, PEI,
any of their subsidiaries or any of their assets or
properties, or (iv) any judgment, order or decree of any
court or governmental agency or authority having
jurisdiction over the Issuer, the Company, PEI, any of their
subsidiaries or their assets or properties, except insofar
as any of (ii), (iii) or (iv) above would not reasonably be
expected, individually or in the aggregate, to result in a
Material Adverse Effect. No consent, approval,
authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or
governmental agency, body or administrative agency is
required for the execution, delivery and performance of this
Agreement and the other Operative Documents, the issuance
and sale of the Securities, the execution, delivery and
performance of the Guarantee, and the consummation of the
transactions contemplated hereby and thereby, except such as
have been obtained and made (or, in the case of the
Registration Rights Agreement, will be obtained and made)
under the Securities Act, the Trust Indenture Act and state
securities or Blue Sky laws and regulations or such as may
be required by the NASD, except insofar as the failure to
obtain such consent, appraisal, authorization or order of,
or filing, registration, qualification, license or permit
would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(xxix) No consents or waivers from any other
person are required for the execution, delivery and
performance of this Agreement and, except as disclosed in
the Offering Memorandum, the other Operative Documents or
for the issuance and sale of the Securities, the execution,
delivery and performance of the Guarantee and the
consummation of the transactions contemplated hereby and
thereby, other than such consents and waivers as have been
obtained (or, in the case of the Registration Rights
Agreement, will be obtained), except where the failure to
have obtained any of the foregoing would not reasonably be
expected to have a Material Adverse Effect.
(xxx) Except as disclosed in the Offering
Memorandum, there is (i) no action, suit or proceeding
before or by any court, arbitrator or governmental agency,
body or official, domestic or foreign, now pending or, to
the best knowledge of the Issuer or the Company, threatened
or contemplated to which the Issuer, the Company or the
Joint Ventures or any of their subsidiaries or any benefit
plan maintained thereby is or may be a party or to which the
business or property of the Issuer, the Company or the Joint
Ventures or any of their subsidiaries is or may be subject,
(ii) no statute, rule, regulation or order that, to the best
knowledge of the Issuer and the Company, has been enacted,
adopted or issued by any governmental agency or that, to the
best knowledge of the Issuer and the Company, has been
proposed by any governmental body, (iii) no injunction,
restraining order or order of any nature by a federal or
state court or foreign court of competent jurisdiction to
which the Issuer, the Company, the Joint Ventures or any of
their subsidiaries is or may be subject or to which the
business, assets or property of the Issuer, the Company, the
Joint Ventures or their subsidiaries are or may be subject
issued that would, in the case of clauses (i), (ii) and
(iii) above, reasonably be expected to, individually or in
the aggregate, result in a Material Adverse Effect.
(xxxi) No action has been taken and no statute,
rule or regulation or order has been enacted, adopted or
issued by any governmental agency that prevents the issuance
of the Securities; no injunction, restraining order or order
of any nature by a federal or state court of competent
jurisdiction has been issued that prevents the issuance of
the Securities or suspends the sale of the Securities in any
jurisdiction referred to in Section 4(e) hereof; and no
action, suit or proceeding is pending against or affecting
or, to the best knowledge of the Company, threatened
against, the Company or any of its subsidiaries before any
court or arbitrator or any governmental body, agency or
official which, if adversely determined, would prohibit,
interfere with or adversely affect the issuance or
marketability of the Securities or in any manner draw into
question the validity of any Operative Document; and every
request of any securities authority or agency of any
jurisdiction for additional information of which the Company
or the Issuer has been notified, has been complied with in
all material respects.
(xxxii) There is (i) no significant unfair labor
practice complaint pending against the Company, the Issuer,
the Joint Ventures or any of their subsidiaries nor, to the
best knowledge of the Company and the Issuer, threatened
against any of them, before the National Labor Relations
Board, any state or local labor relations board or any
foreign labor relations board, and no significant grievance
or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending
against the Company, the Issuer, the Joint Ventures or any
of their subsidiaries or, to the best knowledge of the
Company and the Issuer, threatened against any of them, (ii)
no significant strike, labor dispute, slowdown or stoppage
pending against the Company, the Issuer, the Joint Ventures
or any of their subsidiaries nor, to the best knowledge of
the Company and the Issuer, threatened against the Company,
the Issuer, the Joint Ventures or any of their subsidiaries
and (iii) to the best knowledge of the Company and the
Issuer, no union representation question exists with respect
to the employees of the Company, the Issuer, the Joint
Ventures and their subsidiaries and, to the best knowledge
of the Company and the Issuer, no union organizing
activities are taking place, except insofar as any of the
foregoing would not reasonably be expected, either
individually or in the aggregate, to have a Material Adverse
Effect. None of the Company, the Issuer, the Joint Ventures
or any of their subsidiaries has violated any federal, state
or local law or foreign law relating to discrimination in
hiring, promotion or pay of employees, nor any applicable
wage or hour laws, nor any provision of ERISA, or the rules
and regulations thereunder, or analogous foreign laws and
regulations, which would reasonably be expected, either
individually or in the aggregate, to have a Material Adverse
Effect.
(xxxiii) Each of the Company, the Issuer, the Joint
Ventures and their subsidiaries is in compliance with all
applicable existing federal, state, local and foreign laws
and regulations relating to the protection of human health
or the environment or imposing liability or standards of
conduct concerning any Hazardous Material (as defined below)
(collectively, "Environmental Laws"), except for such
instances of noncompliance that, either singly or in the
aggregate, would reasonably be expected to have a Material
Adverse Effect. The term "Hazardous Material" means (i) any
"hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended, (ii) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act of 1976, as
amended, (iii) any petroleum or petroleum product (iv) any
polychlorinated biphenyl and (v) any pollutant or
contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the
meaning of any other Environmental Law. There is no alleged
liability of which the Company, the Issuer, the Joint
Ventures or any of their subsidiaries has received notice,
or, to the best knowledge and information of the Company and
the Issuer, potential liability (including, without
limitation, alleged or potential liability for investigatory
costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or
penalties) of the Company, the Issuer or any of their
subsidiaries arising out of, based on, or resulting from (A)
the presence or release into the environment of any
Hazardous Material at any location currently or previously
owned by the Company, the Issuer or any of their
subsidiaries or at any location currently or previously used
or leased by the Company, the Issuer or any of their
subsidiaries or (B) any violation or alleged violation of
any Environmental Law, except in each case with respect to
clauses (A) and (B), alleged or potential liabilities that,
singly or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.
(xxxiv) Each of the Company, the Issuer and the
Joint Ventures and their subsidiaries has (i) good and
marketable title to all of the properties and assets
described in the Offering Memorandum as owned by it, free
and clear of all liens, charges, encumbrances and
restrictions, except such as are described in the Offering
Memorandum or for liens for taxes not yet due and payable or
as would not reasonably be expected, either individually or
in the aggregate, to have a Material Adverse Effect,
(ii) peaceful and undisturbed possession under all leases to
which it is party as lessee, except where the failure to
have such possession would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect, (iii) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from,
and has made all declarations and filings with, all federal,
state, local and foreign authorities, all self-regulatory
authorities and all courts and other tribunals (each an
"Authorization") necessary to engage in the business
currently conducted by it in the manner described in the
Offering Memorandum, except where failure to hold such
Authorizations would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect and (iv) no reason to believe that any governmental
body or agency is considering limiting, suspending or
revoking any such Authorization. All such Authorizations
are valid and in full force and effect and the Company, the
Issuer, the Joint Ventures and their subsidiaries are in
compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having
jurisdiction with respect thereto, except insofar as the
failure to have any of the foregoing would not reasonably be
expected either individually or in the aggregate, to have a
Material Adverse Effect. All leases to which the Company,
the Issuer, the Joint Ventures or any of their subsidiaries
is a party are valid and binding and to the knowledge of the
Company and the Issuer no material defaults by the landlord
are existing under any such lease.
(xxxv) Each of the Company, the Issuer and the
Joint Ventures and their subsidiaries owns or possesses or
has the right to use all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, the
"Intellectual Property") presently employed by it in
connection with the businesses now operated by them as
described in the Offering Memorandum, except insofar as
failure to have any of the foregoing would not reasonably be
expected to have a Material Adverse Effect, and none of the
Company, the Issuer, the Joint Ventures or any of their
subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any
of the foregoing which would have a Material Adverse Effect.
The use of the Intellectual Property in connection with the
business and operations of the Issuer and its subsidiaries
does not infringe on the rights of any person, except
infringements which would not reasonably be expected, either
individually or in the aggregate, to have a Material Adverse
Effect.
(xxxvi) All tax returns required to be filed by the
Company, the Issuer and the Joint Ventures or any of their
subsidiaries, in all jurisdictions, have been so filed. All
taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due
from such entities or that are due and payable have been
paid, other than those being contested in good faith and for
which adequate reserves have been provided or those
currently payable without penalty or interest. None of the
Company, the Issuer, the Joint Ventures or any of their
subsidiaries knows of any material proposed additional tax
assessments against it or any of its subsidiaries or the
assets or property of the Issuer or any of its subsidiaries.
(xxxvii) None of the Company, the Issuer, the Joint
Ventures or any of their subsidiaries is (i) an "investment
company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"), or
analogous Cayman Islands or People's Republic of China laws
and regulations, or (ii) a "holding company" or a
"subsidiary company" or an "affiliate" of a holding company
within the meaning of the Public Utility Holding Company Act
of 1935, as amended (the "Public Utility Holding Company
Act"), or analogous Cayman Islands or People's Republic of
China laws and regulations.
(xxxviii) There are no holders of securities of the
Company, the Issuer, the Joint Ventures or any of their
subsidiaries who, by reason of the execution by the Issuer
and the Company of this Agreement or any other Operative
Document to which either is a party or the consummation of
the transactions contemplated hereby and thereby, have the
right to request or demand that the Issuer or the Company
register under the Securities Act or analogous foreign laws
and regulations securities held by them.
(xxxix) Each certificate signed by any officer of
the Issuer or the Company and delivered to the Initial
Purchaser or counsel for the Initial Purchaser shall be
deemed to be a representation and warranty by the Issuer or
the Company, as the case may be, to the Initial Purchaser as
to the matters covered thereby.
(xl) The Company, the Issuer and the Joint
Ventures and each of their subsidiaries maintains insurance
covering their properties, operations, personnel and
businesses. Such insurance insures against such losses and
risks as are believed by them to be adequate in accordance
with customary industry practice to protect the Company, the
Issuer, the Joint Ventures and their subsidiaries and their
businesses. None of the Company, the Issuer, the Joint
Ventures nor any of their subsidiaries has received notice
from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be
made in order to continue such insurance. All such
insurance is outstanding and duly in force on the date
hereof and will be outstanding and duly in force on the
Closing Date.
(xli) Neither the Issuer, the Company nor PEI has
(i) taken (or will take), directly or indirectly, any action
designed to, or that might reasonably be expected to, cause
or result in stabilization or manipulation of the price of
any security of the Issuer, the Company or any of their
subsidiaries to facilitate the sale or resale of the
Securities or (ii) since the date of the preliminary
Offering Memorandum (A) sold, bid for, purchased or paid any
person any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other
securities of the Issuer, the Company or any of their
subsidiaries.
(xlii) No registration under the Securities Act of
the Notes is required for the sale of the Notes to the
Initial Purchaser as contemplated hereby or for the Exempt
Resales assuming (i) that the purchasers who buy the Notes
in the Exempt Resales are either QIBs or Accredited
Investors and (ii) the accuracy of the Initial Purchaser's
representations in Section 5(b) hereof. No form of general
solicitation or general advertising was used by the Company,
the Issuer or any of their representatives in connection
with the offer and sale of any of the Notes or in connection
with Exempt Resales, including, but not limited to,
articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or
general advertising. No securities of the same class or
series as the Notes have been issued and sold by the Issuer
or the Company within the six-month period immediately prior
to the date hereof. Neither the Issuer nor the Company has
entered into any contractual arrangement with respect to the
distribution of the Notes except for this Agreement.
(xliii) The Issuer and the Company, directly or
through any agent, have not engaged or will not engage in
any activity for the purpose of, or that could reasonably be
expected to have the effect of, conditioning the market in
the United States for the Notes and the Issuer and the
Company, and any person acting on their behalf, have
complied and will comply with the offering restrictions
requirement of Regulation S; provided, however, that the
Issuer and the Company make no representation or warranty as
to any actions taken by the Initial Purchaser or any person
acting on its behalf in respect of the transactions
contemplated by this Agreement.
(xliv) Each of the preliminary Offering Memorandum
and the Offering Memorandum, as of its date, and each
amendment or supplement thereto, as of its date, contains or
will contain all the information specified in, and meets or
will meet the requirements of, Rule 144A(d)(4) under the
Securities Act.
(xlv) Subsequent to the respective dates as of
which information is given in the Offering Memorandum and up
to the Closing Date, except as set forth in the Offering
Memorandum, none of the Company, the Issuer, the Joint
Ventures and their subsidiaries has incurred any liabilities
or obligations, direct or contingent, which are material to
the Company and its subsidiaries taken as a whole, nor
entered into any transaction not in the ordinary course of
business, nor has there been, singly or in the aggregate,
any material adverse change, or any development which may
reasonably be expected to involve a material adverse change,
in the assets, properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of
the Company and its subsidiaries, taken as a whole (a
"Material Adverse Change") and there have not been dividends
or distributions of any kind declared, paid or made by the
Company or any of its subsidiaries on any class of its
capital stock.
(xlvi) None of the Issuer, the Company or any
agent thereof acting on behalf of the Issuer or the Company
has taken, and none of them will take, any action that would
reasonably be expected to cause this Agreement or the
issuance or sale of the Notes to violate Regulation G (12
C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R.
Part 224) of the Board of Governors of the Federal Reserve
System or analogous Cayman Islands or People's Republic of
China laws and regulations.
(xlvii) The accountants who have certified or shall
certify the financial statements and supporting schedules
included or to be included as part of the Offering
Memorandum are independent accountants under Rule 101 of
AICPA's Code of Professional Conduct and its interpretations
and rulings. The consolidated historical statements fairly
present the consolidated financial condition and results of
operations of the Company, the Issuer and their consolidated
subsidiaries at the respective dates and for the respective
periods indicated, in accordance with generally accepted
accounting principles consistently applied throughout such
periods, except as stated therein. The pro forma financial
statements included in the Offering Memorandum have been
prepared on a basis consistent with such historical
statements, except for the pro forma adjustments specified
therein, and give effect to assumptions made on a reasonable
basis and present fairly the historical and proposed
transactions contemplated by this Agreement and the other
Operative Documents. Other financial and statistical
information and data included in the Offering Memorandum,
historical and pro forma, are accurately presented and
prepared on a basis consistent with such financial
statements and the books and records of the Company, the
Issuer, and their subsidiaries.
(xlviii) Neither the Company, the Issuer nor the
Joint Ventures intends to, nor does it believe that it will,
incur debts beyond its ability to pay such debts as they
mature. The Company and the Issuer believe that the present
fair saleable value of the assets of each of the Company,
the Issuer and the Joint Ventures will exceed the amount
that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent
liabilities) of such person as they become absolute and
matured. The assets of each of the Company, the Issuer and
the Joint Ventures will not constitute unreasonably small
capital to carry out their respective businesses as now
conducted, including the capital needs of each of the
Company, the Issuer and the Joint Ventures, taking into
account their respective projected capital requirements and
capital availability. Each of the Company, the Issuer and
the Joint Ventures currently believes that it is, and
immediately after the Closing Date will be, Solvent. As
used herein, the term "Solvent" means, with respect to a
person on a particular date, that on such date (A) the fair
market value of the assets of such person is greater than
the total amount of liabilities (including contingent
liabilities) of such person, (B) the present fair saleable
value of the assets of such person is greater than the
amount that will be required to pay the probable liabilities
of such person on its debts as they become absolute and
matured, (C) such person is able to realize upon its assets
and pay its debts and other liabilities, including
contingent obligations, as they mature and (D) such person
does not have an unreasonably small capital.
(xlix) Except for this Agreement, there are no
contracts, agreements or understandings between the Issuer
or the Company or any of their subsidiaries and any person
that would give rise to a valid claim against the Issuer or
the Company, its subsidiaries or the Initial Purchaser for a
brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the
Securities.
(l) Prior to the Exchange Offer or the
effectiveness of the Shelf Registration Statement, none of
the Indentures are required to be qualified under the Trust
Indenture Act.
The Company and the Issuer acknowledge that the Initial
Purchaser and, for purposes of the opinions to be delivered to
the Initial Purchaser pursuant to Section 7 hereof, counsel to
the Company and the Issuer and counsel to the Initial Purchaser,
will rely upon the accuracy and truth of the foregoing
representations and hereby consent to such reliance.
(b) The Initial Purchaser represents and warrants to
the Issuer and the Company and agrees that:
(i) The Initial Purchaser is a QIB, with such
knowledge and experience in financial and business matters
as are necessary in order to evaluate the merits and risks
of an investment in the Notes and acknowledges that none of
the Notes or the Guarantee has been registered under the
Securities Act and that such securities may not be offered
or sold within the United States or to, or for the account
or benefit of, U.S. persons (as defined in Regulation S
under the Securities Act) except pursuant to an exemption
from the registration requirements of the Securities Act.
(ii) The Initial Purchaser (A) is not acquiring
the Notes with a view to any distribution thereof that would
violate the Securities Act or the securities laws of any
state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the
Notes only (1) inside the United States to QIBs in reliance
on the exemption from the registration requirements of the
Securities Act provided by Rule 144A, (2) inside the United
States to Accredited Investors that execute and deliver a
letter containing representations and agreements in the form
attached as Annex A to the Offering Memorandum in a private
placement exempt from the registration requirements of the
Securities Act and (3) outside the United States in
compliance with Regulation S.
(iii) No form of general solicitation or general
advertising has been or will be used by the Initial
Purchaser or any of its representatives in connection with
the offer and sale of any of the Notes, including, but not
limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general
solicitation or general advertising.
(iv) The Initial Purchaser agrees that, in
connection with the Exempt Resales, it will solicit offers
to buy the Notes only from, and will offer to sell the Notes
only (A) inside the United States to QIBs and a limited
number of institutional Accredited Investors and (B) outside
the United States in compliance with Regulation S. The
Initial Purchaser further agrees (C) that it will offer to
sell the Notes only to, and will solicit offers to buy the
Notes only from (l) QIBs who in purchasing such Notes will
be deemed to have represented and agreed that they are
purchasing the Notes for their own accounts or accounts with
respect to which they exercise sole investment discretion
and that they or such accounts are QIBs and (2)
institutional Accredited Investors who make the
representations contained in, and execute and return to the
Initial Purchaser, a certificate in the form of Appendix H
attached to the Offering Memorandum and (D) that, in the
case of such QIBs and Accredited Investors, acknowledges and
agrees that such Notes will not have been registered under
the Securities Act and may be resold, pledged or otherwise
transferred only (x)(I) to a person who the seller
reasonably believes is a QIB in a transaction meeting the
requirements of Rule 144A, (II) in a transaction meeting the
requirements of Rule 144, (III) to a foreign person in a
transaction meeting the requirements of Rule 904 under the
Securities Act or (IV) in accordance with another exemption
from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Issuer so
requests), (y) to the Issuer, or (z) pursuant to an
effective registration statement under the Securities Act
and, in each case, in accordance with any applicable
securities laws of any state of the United States or any
other applicable jurisdiction and (C) that the holder will,
and each subsequent holder is required to, notify any
purchaser from it of the security evidenced thereby of the
resale restrictions set forth in (B) above.
(v) The Initial Purchaser will have provided
each Eligible Purchaser with a copy of the Offering
Memorandum prior to or concurrent with settlement of each
initial resale pursuant to Rule 144A, either with the
confirmation of such initial resale or otherwise.
(vi) The Initial Purchaser (A) has not
solicited, and will not solicit, offers to purchase any of
the Notes from, (B) it has not sold, and will not sell, any
of the Notes to, and (C) it has not distributed and will not
distribute, the Offering Memorandum to, any person or entity
in any jurisdiction outside of the United States except, in
each case, in compliance in all material respects with all
applicable laws.
(vii) The Initial Purchaser also understands that
the Issuer and the Company and, for purposes of the opinions
to be delivered to you pursuant to Section 7 hereof, counsel
to the Issuer and the Company and counsel to the Initial
Purchaser, will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such
reliance.
(viii) The Initial Purchaser, and each of its
affiliates and any person acting on its behalf, has not
engaged and will not engage in any "directed selling
efforts" (as defined in Regulation S) with respect to the
Notes, and it and they have complied and will comply with
any applicable offering restrictions requirement of
Regulation S with respect to the Notes.
6. Indemnification.
(a) The Issuer, the Company and Panda Energy
International, Inc. ("PEI"), jointly and severally, agree to
indemnify and hold harmless the Initial Purchaser and each
person, if any, who controls (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) the Initial
Purchaser (any of such persons hereinafter referred to as a
"controlling person"), and the officers, directors, partners,
employees, representatives and agents of the Initial Purchaser or
any controlling person (each such entity or person an
"Indemnified Person") to the fullest extent lawful, from and
against any and all losses, claims, damages, assessments,
judgments, actions and other liabilities (collectively,
"Liabilities"), and will reimburse each Indemnified Person for
all fees and expenses (including without limitation, the
reasonable fees and expenses of counsel to any Indemnified
Person) (collectively, "Expenses") as they are incurred in
investigating, preparing, pursuing or defending any claim or
action, or any investigation or proceeding by any governmental
agency or body, whether or not in connection with pending or
threatened litigation and whether or not any Indemnified Person
is a party (collectively, "Securities Actions"), directly or
indirectly caused by, related to, based upon, arising out of or
in connection with any untrue statement or alleged untrue
statement of a material fact contained in the preliminary
Offering Memorandum or the Offering Memorandum (or any amendment
or supplement thereto), or by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
insofar as such Liabilities or Expenses are caused by an untrue
statement or omission or alleged untrue statement or omission (i)
that is made in reliance upon and in conformity with information
furnished in writing to the Issuer and the Company by the Initial
Purchaser expressly for use therein, which information is
specified in the second paragraph of Section 6(c) or (ii) that is
made in any preliminary Offering Memorandum if a copy of the
Offering Memorandum (as then amended or supplemented) was not
sent or given by or on behalf of the Initial Purchaser to the
person asserting any such loss, claim, damage, liability or
expense at or prior to the written confirmation of the sale of
the Notes and the Offering Memorandum (as then amended or
supplemented) would have corrected each untrue statement or
omission. The Issuer, the Company and PEI will also reimburse
each Indemnified Person for all Expenses as incurred in
connection with enforcing such Indemnified Person's rights under
this Agreement; provided, that if the Issuer, the Company or PEI
reimburses the Initial Purchaser hereunder for any Expenses, the
Initial Purchaser hereby agrees to refund such reimbursement of
Expenses to the extent that the Initial Purchaser is not entitled
to be indemnified hereunder. The Issuer and the Company shall
notify the Initial Purchaser promptly of the institution, threat
or assertion of any Securities Action in connection with the
matters addressed by this Agreement which involves the Issuer,
the Company or an Indemnified Person.
(b) Upon receipt by an Indemnified Person of notice of
a Securities Action against such Indemnified Person with respect
to which indemnity may be sought under Section 6(a), such
Indemnified Person shall promptly notify the Issuer, the Company
and PEI in writing, provided that the failure to so notify the
Issuer, the Company and PEI shall not relieve the Issuer, the
Company or PEI from any liability which the Issuer, the Company
or PEI may have on account of this indemnity or otherwise, except
to the extent the Issuer, the Company and PEI shall have been
materially prejudiced by such failure. The Issuer, the Company
and PEI shall, if requested by such Indemnified Person, assume
the defense of any such Securities Action including the
employment of counsel reasonably satisfactory to such Indemnified
Person. Any Indemnified Person shall have the right to employ
separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person, unless: (i) the
Issuer, the Company and PEI have failed promptly to assume the
defense and employ counsel reasonably satisfactory to such
indemnified party, (ii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of
the indemnifying party or (iii) the named parties to any such
Securities Action (including any impleaded parties) include such
Indemnified Person and the Issuer, the Company or PEI, and such
Indemnified Person shall have been advised by counsel that there
may be one or more legal defenses available to it which are
different from or in addition to those available to the Issuer,
the Company, or PEI, provided that the Issuer, the Company and
PEI shall not in such event be responsible hereunder for the fees
and expenses of more than one firm of separate counsel in
connection with any Securities Action in the same jurisdiction,
in addition to any local counsel. None of the Issuer, the
Company or PEI shall be liable for any settlement of any
Securities Action effected without written consent of the Issuer,
the Company and PEI (which shall not be unreasonably withheld)
and the Issuer, the Company or PEI agree to indemnify and hold
harmless any Indemnified Person from and against any Liability or
Expense by reason of any settlement of any Securities Action
effected with the written consent of the Issuer. Notwithstanding
the immediately preceding sentence, if at any time an Indemnified
Person shall have requested the Issuer, the Company or PEI to
reimburse the Indemnified Person for fees and expenses of counsel
as contemplated by the third sentence of this paragraph, each of
the Issuer, the Company and PEI agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than sixty
(60) business days after receipt by the Issuer, the Company and
PEI of the aforesaid request and (ii) the Issuer, the Company and
PEI shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such
settlement. In addition, the Issuer, the Company and PEI will
not, without the prior written consent of each Indemnified
Person, settle any pending or threatened Securities Action in
respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Person is a party
thereto), unless such settlement includes an unconditional
release of each Indemnified Person from all Liabilities on claims
that are the subject matter of such proceedings.
(c) The Initial Purchaser agrees to indemnify and hold
harmless each of the Issuer, the Company and PEI, and its
directors, officers and any person controlling (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) the Issuer, the Company and PEI, and the officers,
directors, partners, employees, representatives and agents of
each such person, to the same extent as the foregoing indemnity
from the Issuer and the Company to each of the Indemnified
Persons, but only with respect to Liabilities and Expenses
incurred in investigating, preparing, pursuing or defending
Securities Actions directly or indirectly caused by, related to,
based upon, arising out of or in connection with any untrue
statement or omission or alleged untrue statement or omission of
a material fact contained in the preliminary Offering Memorandum
or the Offering Memorandum that was made in reliance upon and in
conformity with information relating to the Initial Purchaser
furnished in writing by or on behalf of the Initial Purchaser to
the Issuer, the Company and PEI expressly for use in the
preliminary Offering Memorandum, the Offering Memorandum or any
amendment or supplement thereto, which information is specified
in the second paragraph of this Section 6(c). In case any
Securities Action shall be brought against the Issuer, the
Company or their directors or officers or any such controlling
person in respect of which indemnity may be sought against the
Initial Purchaser, the Initial Purchaser shall have the rights
and duties given the Issuer, the Company and PEI, and the Issuer,
the Company and PEI or their directors or officers or such
controlling person shall have the rights and duties given to the
Initial Purchaser by the preceding paragraph. In no event shall
the liability of the Initial Purchaser hereunder be greater, in
the aggregate, than the amount by which the total discounts and
commissions received by the Initial Purchaser with respect to the
Notes exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of a claim
or action based on such information.
The statements in the preliminary Offering Memorandum
and the Offering Memorandum set forth in the last paragraph on
the cover page, the third paragraph on page (i), the third
paragraph (other than the final sentence thereof) and the third,
fourth, fifth and sixth sentences of the fourth paragraph under
"Plan of Distribution" constitute the only information heretofore
furnished to the Issuer, the Company and PEI in writing by the
Initial Purchaser expressly for use in the preliminary Offering
Memorandum or the Offering Memorandum, or any amendment or
supplement thereto.
(d) If the indemnification provided for in this
Section 6 is unavailable to an indemnified party under Section
6(a), (b) and (c) hereof (other than by reason of exceptions
provided in those Sections) in respect of any Liabilities or
Expenses referred to therein, then each 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 Liabilities and Expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on
the other hand from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
but also the relative fault of the indemnifying party and the
indemnified party, as well as any other relevant equitable
considerations. The relative benefits received by the Issuer,
the Company and PEI on the one hand and the Initial Purchaser on
the other hand, shall be in the same proportion as the total
proceeds from the sale of the Notes (net of discounts and
commissions but before deducting expenses) received by the
Issuer, the Company and PEI on the one hand and the total
discounts and commissions received by the Initial Purchaser on
the other hand, bear to the total price of the Notes, in each
case, as set forth in the table on the covering page of the
Offering Memorandum. 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 the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
The Issuer, the Company, PEI and the Initial Purchaser
agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by
an indemnified party as a result of the Liabilities or Expenses
referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above,
any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending
any Securities Action. Notwithstanding the provisions of this
Section 6, the Initial Purchaser (and its related Indemnified
Persons) shall not be required to contribute, in the aggregate,
any amount in excess of the amount by which the total discounts
and commissions received by the Initial Purchaser with respect to
the Notes, exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
7. Conditions of Initial Purchaser's Obligations.
The obligations of the Initial Purchaser under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All of the representations and warranties of the
Issuer, the Company and PEI contained in this Agreement
shall be true and correct on the date hereof and on the
Closing Date with the same force and effect as if made on
and as of the date hereof and the Closing Date,
respectively. The Issuer, the Company and PEI shall have
performed or complied with all of the agreements herein
contained and required to be performed or complied with by
them at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed
and copies distributed to the Initial Purchaser not later
than 10:00 a.m., New York City time, on the date of this
Agreement or at such later date and time as to which you may
agree.
(c) No stop order suspending the qualification or
exemption from qualification of any of the Notes in any
jurisdiction referred to in Section 4(e) shall have been
issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(d) No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted
or issued by any governmental agency which would, as of the
Closing Date, prevent the issuance or sale of any of the
Notes; no action, suit or proceeding shall be pending
against or affecting or, to the knowledge of the Issuer or
the Company, threatened against, the Issuer, the Company or
any of their respective subsidiaries before any court or
arbitrator or any governmental body, agency or official
that, if adversely determined, would have a Material Adverse
Effect; and no stop order preventing the use of the Offering
Memorandum, or any amendment or supplement thereto, or any
order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements
of the Securities Act shall have been issued.
(e) Since the dates as of which information is given
in the Offering Memorandum, (i) there shall not have been
any material change, or any development that is reasonably
likely to result in a material change, in the capital stock,
or material increase in the short-term debt or the long-term
debt, of the Company, the Issuer or any of their
subsidiaries from that set forth in the Offering Memorandum,
(ii) no dividend or distribution of any kind shall have been
declared, paid or made by the Company, the Issuer or any of
their subsidiaries on any class of its capital stock, and
(iii) none of the Company, the Issuer nor any of their
subsidiaries shall have incurred any liabilities or
obligations, direct or contingent, that are material,
individually or in the aggregate, to the Company, the Issuer
and their subsidiaries, taken as a whole, and that are
required to be disclosed on a balance sheet in accordance
with generally accepted accounting principles and are not
disclosed on the latest balance sheet included in the
Offering Memorandum. Since the date hereof and since the
dates as of which information is given in the Offering
Memorandum, there shall not have been any Material Adverse
Change.
(f) You shall have received certificates, dated the
Closing Date, signed by (i) the Chief Executive Officer or
any Vice President and (ii) a principal financial or
accounting officer of the Issuer, as of the Closing Date,
confirming the matters set forth in paragraphs (a), (b),
(c), (d) and (e) of this Section 7.
(g) The Notes (other than then Notes being sold to
Institutional Accredited Investors) shall have been approved
or designated for "book-entry" settlement through the
facilities of DTC, Euroclear and Cedel Bank.
(h) You shall have received on the Closing Date an
opinion (satisfactory to you and your counsel), dated the
Closing Date, of Xxxxxxxxxx & Xxxxx LLP, counsel for the
Issuer and the Company, to the effect that:
(1) Each of the Company and its subsidiaries
(other than those entities organized in the Cayman
Islands, the People's Republic of China or the State of
Texas) has been duly organized and is validly existing
in good standing under the laws of its respective
jurisdiction of organization. Each of the Company and
its subsidiaries (other than those entities organized
in the Cayman Islands, the People's Republic of China
or the State of Texas) has the requisite corporate or
company power and authority to own, lease and operate
its properties and to conduct its business as described
in the Offering Memorandum, and each of the Company is
duly qualified as a foreign entity and in good standing
in each jurisdiction in which the ownership, leasing
and operation of its property and the conduct of its
business requires such qualification except where the
failure to so qualify would not have a Material Adverse
Effect.
(2) (i) All of the issued and outstanding
shares of capital stock of each of the Company and its
subsidiaries (other than those entities organized in
the Cayman Islands, the People's Republic of China or
the State of Texas) have been duly and validly
authorized and issued is fully paid and nonassessable
and was not issued in violation of or subject to
preemptive or similar rights; (ii) the capital stock of
each of the Issuer, the Company and their respective
subsidiaries is owned of record as described in the
Offering Memorandum; and (iii) the Issuer and the
Company have the authorized and outstanding
capitalization as set forth in the Offering Memorandum.
(3) The Company has the requisite corporate
power and authority to execute, deliver and perform its
obligations under this Agreement, the Indentures, the
Registration Rights Agreement and the other Operative
Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby,
including, without limitation, with respect to the
Issuer, the corporate power and authority to issue,
sell and deliver the Securities as contemplated by this
Agreement. The Company has the requisite corporate
power and authority to execute, deliver and perform its
obligations under the Guarantee and, if and when it is
issued, the Registered Guarantee.
(4) Each of this Agreement, the Notes, the
Issuer Indentures and the other Operative Documents to
which it is a party has been duly and validly executed
and delivered by the Issuer. Each of this Agreement,
the Guarantee, the Company Indentures and the other
Operative Documents to which it is a party has been
duly and validly authorized, executed and delivered by
the Company. The Registered Guarantee has been duly
and validly authorized for issuance by the Company.
(5) When issued and authenticated in
accordance with the terms of the Issuer Indentures and
delivered against payment therefor in accordance with
the terms of this Agreement, the Notes will constitute
legally valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their
terms and entitled to the benefits of the Issuer
Indentures.
(6) When endorsed upon duly issued and
authenticated Notes in accordance with the terms of the
Indentures and delivered against payment therefor in
accordance with the terms of this Agreement, the
Guarantee will constitute the valid and legally binding
obligation of the Company, enforceable against the
Company in accordance with their terms and entitled to
the benefits of the Indentures.
(7) When issued and authenticated in
accordance with the terms of the Issuer Indentures, the
Registration Rights Agreement and the Exchange Offer,
the Registered Notes will constitute legally valid and
binding obligations of the Issuer, enforceable against
the Issuer in accordance with their terms and entitled
to the benefits of the Issuer Indentures.
(8) The Company Indentures, assuming due
authorization, execution and delivery thereof by the
trustee named therein, constitute legally valid and
binding obligations of the Company, enforceable against
the Company in accordance with their terms. Each of
the Indentures conforms to the requirements of the
Trust Indenture Act.
(9) The Issuer Indentures, assuming due
authorization, execution and delivery thereof by the
trustee named therein, constitute legally valid and
binding obligations of the Issuer, enforceable against
the Issuer in accordance with their terms.
(10) The Registration Rights Agreement has
been duly and validly executed and delivered by the
Issuer and the Company and constitutes a valid and
legally binding agreement of each of the Issuer and the
Company, enforceable against each of the Issuer and the
Company in accordance with its terms.
(11) The Securities, the Guarantee, the
Registered Guarantee, the Indentures, the Registration
Rights Agreement, and the other Operative Documents
conform in all material respects to the descriptions
thereof contained in the Offering Memorandum.
(12) When the Notes and the Guarantee are
issued and delivered pursuant to this Agreement, the
Notes and the Guarantee will not be of the same class
(within the meaning of Rule 144A under the Securities
Act) as securities of the Issuer or the Company that
are listed on any national securities exchange
registered under Section 6 of the Exchange Act or that
are quoted in a United States automated inter-dealer
quotation system.
(13) No registration under the Securities
Act of the Notes or the Guarantee is required for the
sale of the Notes to you as contemplated hereby or for
the Exempt Resales, and prior to the commencement of
the Exchange Offer or the effectiveness of the Shelf
Registration Statement, none of the Indentures are
required to be qualified under the Trust Indenture Act,
assuming (i) that Eligible Purchasers acquire the Notes
in the Exempt Resales; (ii) the accuracy of the Initial
Purchaser's representations regarding the absence of
general solicitation in connection with the Exempt
Resales contained herein and (iii) the accuracy of the
representations made by each Accredited Investor who
purchases Notes pursuant to an Exempt Resale as set
forth in the letter of representation executed by such
Accredited Investor in the form of Appendix H to the
Offering Memorandum.
(14) Each of the preliminary Offering
Memorandum and the Offering Memorandum, as of its date,
and each amendment or supplement thereto, as of its
date (except for the financial statements and the notes
thereto and schedules and other financial and
accounting data included therein, as to which no
opinion need be expressed), complied in all material
respects with the information requirements of Rule
144A(d)(4) of the Securities Act.
(15) None of the Issuer or the Company, or
any of their subsidiaries, is an "investment company"
or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act, or a
"holding company" or a "subsidiary company" or an
"affiliate" of a holding company within the meaning of
the Public Utility Holding Company Act.
(16) The execution, delivery and performance
by each of the Issuer and the Company of this Agreement
and the other Operative Documents to which it is a
party, the execution, delivery and performance of the
Guarantee and the Registered Guarantee, the issuance
and sale of the Securities and the consummation of the
transactions contemplated hereby and thereby, will not
violate, conflict with or constitute a breach of any of
the terms or provisions of, or a default under (or an
event that with notice or the lapse of time, or both,
would constitute a default) or require consent under,
or result in the imposition of a Lien on any properties
of the Issuer or the Company or any of their
subsidiaries (except for Liens contemplated by the
Collateral Documents), or an acceleration of
indebtedness pursuant to, (i) the charter or bylaws of
the Company or any of its subsidiaries (other than the
Joint Ventures, the Issuer and the other subsidiaries
of the Company which are incorporated in the Cayman
Islands), (ii) any material bond, debenture, note,
indenture, mortgage, deed of trust or other agreement
or instrument identified as such to such counsel to
which the Issuer, the Company or any of their
subsidiaries is a party or by which any of them or
their property is bound, (iii) any statute, rule or
regulation applicable to the Issuer, the Company or any
of their subsidiaries or any of their assets or
properties or (iv) any judgment, order or decree known
to such counsel of any court or governmental agency or
authority having jurisdiction over the Issuer, the
Company or any of their subsidiaries or any of their
assets or properties. No consent, approval, authoriza
tion or order of, or filing, registration,
qualification, license or permit of or with, any U.S.
federal or New York court or governmental agency, body
or administrative agency is required for the execution,
delivery and performance of this Agreement and the
other Operative Documents, the execution, delivery and
performance of the Guarantee, the issuance and sale of
the Notes and the consummation of the transactions
contemplated hereby and thereby, except such as may be
required under state securities or Blue Sky laws and
regulations (as to which such counsel may express no
opinion), the Securities Act and the Trust Indenture
Act or such as may be required by the NASD.
(17) To the best knowledge of such counsel,
no injunction, restraining order or order of any nature
by a United States federal, New York or Delaware state
court of competent jurisdiction has been issued that
prevents or suspends the use of the Offering
Memorandum.
(18) To the best knowledge of such counsel,
there are no holders of securities of the Issuer or the
Company who, by reason of the execution by the Issuer
and the Company of this Agreement or any other
Operative Document to which it is a party, or the
consummation of the transactions contemplated hereby
and thereby, have the right to request or demand that
the Issuer or the Company register under the Securities
Act securities held by them.
(19) Each of the Issuer, the Company and
their subsidiaries has (i) all licenses, certificates,
permits, authorizations, approvals, franchises and
other rights from, and has made all declarations and
filings with, all U.S. federal, New York state and
local authorities, all U.S. federal self-regulatory
authorities and all U.S. federal and New York State
courts and other tribunals (each a "Permit") necessary
to engage in the business currently conducted by it in
the manner described in the Offering Memorandum, except
where failure to hold such Permit would not have a
Material Adverse Effect.
(20) The statements made in the Offering
Memorandum under the captions "Notice to Investors" and
"Certain Federal Income Tax Considerations", insofar as
such statements purport to constitute statements of law
or legal conclusions, are accurate in all material
respects.
In addition, counsel for the Issuer and the Company
shall state that such counsel has participated in conferences
with officers and other representatives of the Issuer and the
Company, representatives of the independent certified public
accountants for the Issuer and the Company, PRC Counsel to the
Issuer and the Company, representatives and counsel to the
Initial Purchaser in connection with the preparation of the
Offering Memorandum and any amendment thereof or supplement
thereto and has considered the matters required to be stated
therein and the statements contained therein, although such
counsel has not independently verified the accuracy, completeness
or fairness of such statements and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum and any amendment
thereof or supplement thereto (except as indicated above); and
such counsel advises you that, on the basis of the foregoing, no
facts came to such counsel's attention that caused such counsel
to believe that the Offering Memorandum (as amended or
supplemented, if applicable), as of the date thereof or on the
Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it
being understood such counsel need express no belief or opinion
with respect to the financial statements, notes and schedules
thereto and other financial data included therein, the reports of
independent engineers and consultants or other financial and
engineering data included therein).
In rendering such opinion, counsel for the Issuer and
the Company shall opine as to the laws of the State of New York,
the General Corporation Law of the State of Delaware and the
federal laws of the United States. Counsel for the Issuer and
the Company will be permitted to except from its opinions with
respect to enforceability: (A) the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws now
or hereafter in effect relating to or affecting the rights and
remedies of creditors; (B) the effect of general equitable
principles, whether such enforceability is considered in a
proceeding in equity or at law, and the discretion of the court
before which any proceeding therefor may be brought; and (C) the
unenforceability of any provision requiring the payment of
attorney's fees, except to the extent that a court determines
such fees to be reasonable.
(i) You shall have received on the Closing Date an
opinion (satisfactory to you and your counsel), dated the
Closing Date, of the Vice President and General Counsel of
the Issuer and the Company, in his capacity as such officer,
to the effect that:
(1) (i) all issued and outstanding shares
of capital stock of each of the Issuer, the Company and
their respective subsidiaries are owned free and clear
of any Lien other than the Liens created pursuant to
the Collateral Documents and Liens created pursuant to
the Luannan Financing Agreements and were not issued in
violation of any preemptive or similar rights; (ii)
except as described in the Offering Memorandum, each of
the Issuer, the Company and their respective
subsidiaries has no other direct or indirect
subsidiaries; (v) there are no outstanding
subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or Liens
related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock
of, or other ownership interest in, any of the Issuer,
the Company, or any subsidiary, except as set forth in
the Offering Memorandum;
(2) Neither PEC nor, to the best knowledge
of such counsel, the Issuer, the Company, the Joint
Ventures or any of their subsidiaries is (A) in
violation of its respective charter or bylaws or other
organizational documents, (B) in default in the
performance of any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or
instrument to which it is a party or by which it is
bound or to which any of its properties is subject, or
(C) is in violation of any law, statute, rule,
regulation, judgment or court decree applicable to the
Issuer, the Company, the Joint Ventures, any of their
subsidiaries or their assets or properties that in the
case of clauses (A), (B) and (C) above, (x) would
reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
There exists no condition that, with notice, the
passage of time or otherwise, would constitute a
default under any such document or instrument.
(3) PEI has the requisite corporate power
and authority to execute, deliver and perform its
obligations under this Agreement and the Operative
Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby.
(4) No consents or waivers from any other
person are required for the execution, delivery and
performance of this Agreement and the other Operative
Documents, the issuance and sale of the Notes, the
execution, delivery and performance of the Guarantee
and the consummation of the transactions contemplated
hereby and thereby, other than such consents and
waivers as have been obtained (or, in the case of the
Registration Rights Agreement, will be obtained),
except where the failure to have obtained any of the
foregoing would not reasonably be expected to have a
Material Adverse Effect.
(5) There is (i) no action, suit or
proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or
foreign, now pending or, to the best knowledge of such
counsel, threatened or contemplated to which the
Issuer, the Company or any of their subsidiaries is or
may be a party or to which the business or property of
the Issuer, the Company or any of their subsidiaries is
or may be subject, (ii) to the best of such counsel's
knowledge no statute, rule, regulation or order that
has been enacted, adopted or issued by any governmental
agency or that has been proposed by any governmental
body, (iii) no injunction, restraining order or order
of any nature by a federal or state court or foreign
court of competent jurisdiction to which the Issuer,
the Company or any of their subsidiaries is or may be
subject or to which the business, assets or property of
the Issuer, the Company or their subsidiaries are or
may be subject issued that would, in the case of
clauses (i), (ii) and (iii) above, reasonably be
expected to, individually or in the aggregate, result
in a Material Adverse Effect.
(6) Each of the Company, the Issuer, the
Joint Ventures and their subsidiaries has (i) to the
best of such counsel's knowledge, good and marketable
title to all of the properties and assets described in
the Offering Memorandum as owned by it, free and clear
of all liens, charges, encumbrances and restrictions,
except such as are described in the Offering Memorandum
or for liens for taxes not yet due and payable or as
would not reasonably be expected, either individually
or in the aggregate, to have a Material Adverse Effect,
(ii) to the best of such counsel's knowledge, peaceful
and undisturbed possession under all leases to which it
is party as lessee, except where the failure to have
such possession would not reasonably be expected,
individually or in the aggregate, to have a Material
Adverse Effect, (iii) all licenses, certificates,
permits, authorizations, approvals, franchises and
other rights from, and has made all declarations and
filings with all federal, state and local authorities,
all self-regulatory authorities and all courts and
other tribunals (other than authorities, courts and
tribunals in the People's Republic of China) (each an
"Authorization") necessary to engage in the business
currently conducted by it in the manner described in
the Offering Memorandum, except where failure to hold
such Authorizations would not reasonably be expected,
individually or in the aggregate, to have a Material
Adverse Effect and (iv) such counsel has no reason to
believe that any governmental body or agency is
considering limiting, suspending or revoking any such
Authorization. All such Authorizations are valid and
in full force and effect and the Company, the Issuer,
the Joint Ventures and their subsidiaries are in
compliance in all material respects with the terms and
conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities
having jurisdiction with respect thereto, except
insofar as the failure to have any of the foregoing
would not reasonably be expected either individually or
in the aggregate, to have a Material Adverse Effect.
All leases to which the Company, the Issuer, the Joint
Ventures or any of their subsidiaries is a party are
valid and binding and to the knowledge of such counsel
no material defaults by the landlord are existing under
any such lease.
(7) To the best of such counsel's knowledge,
each of the Company, the Issuer, the Joint Ventures and
their subsidiaries is in compliance with all applicable
existing Environmental Laws, except for such instances
of noncompliance that, either singly or in the
aggregate, could not have a Material Adverse Effect.
There is no alleged liability, or, to the best
knowledge and information of such counsel, potential
liability (including, without limitation, alleged or
potential liability for investigatory costs, cleanup
costs, governmental response costs, natural resources
damages, property damages, personal injuries, or
penalties) of the Company, the Issuer or any of their
subsidiaries arising out of, based on, or resulting
from (A) the presence or release into the environment
of any Hazardous Material at any location currently or
previously owned by the Company, the Issuer or any of
their subsidiaries or at any location currently or
previously used or leased by the Company, the Issuer or
any of their subsidiaries or (B) any violation or
alleged violation of any Environmental Law, except in
each case with respect to clauses (A) and (B), alleged
or potential liabilities that, singly or in the
aggregate, could not have a Material Adverse Effect.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other
representatives of the Issuer and the Company, representatives of
the independent certified public accountants for the Issuer and
the Company, representatives and counsel to the Initial Purchaser
in connection with the preparation of the Offering Memorandum and
any amendment thereof or supplement thereto and has considered
the matters required to be stated therein and the statements
contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such
statements and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in
the Offering Memorandum and any amendment thereof or supplement
thereto; and such counsel advises you that, on the basis of the
foregoing, no facts came to such counsel's attention that caused
such counsel to believe that the Offering Memorandum (as amended
or supplemented, if applicable), as of the date thereof or on the
Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it
being understood that such counsel need express no belief or
opinion with respect to the financial statements, notes and
schedules thereto and other financial data included therein).
(j) You shall have received an opinion, dated the
Closing Date, of Xxxxxxx Xxxxxxx & Xxxxxxxx, your counsel,
in form and substance reasonably satisfactory to you,
covering such matters as are customarily covered in such
opinions.
(k) You shall have received an opinion, dated the
Closing Date, of Cai, Zhang & Lan, People's Republic of
China ("PRC") Counsel to the Company and the Issuer, in form
and substance reasonably satisfactory to you, covering
matters including, but not limited to, the Luannan Project
Documents and government approvals required by the PRC.
(l) You shall have received an opinion, dated the
Closing Date, of Xxxxxx & Calder, Cayman Islands counsel to
the Company and the Issuer, in form and substance reasonably
satisfactory to you, covering matters relating to Cayman
Islands law.
(m) You shall have received an opinion, dated the
Closing Date, of Gong Cheng, your PRC counsel, in form and
substance reasonably satisfactory to you, covering matters
relating to PRC law.
(n) The Initial Purchaser shall have received copies
of all Permits [set forth on Part A of Section 5(1),]
certified by authorized officers of the Issuer and the Joint
Ventures as being complete and in full force and effect.
(o) The Initial Purchaser shall have received (i) a
certified copy of, or binder for, each of the insurance policies
required by the Indentures, together with evidence satisfactory
to the Initial Purchaser that such insurance complies with the
provisions of the Indentures and with the provisions of each of
the Operative Documents, and that all premiums then due with
respect to such insurance have been paid, and (ii) a written
report of the Insurance Consultant describing the insurance
obtained by the Joint Ventures as of the Closing Date with
respect to the Project and stating that the insurance required to
be obtained as of the Closing Date pursuant to the Operative
Documents is in full force and effect and provides reasonable and
adequate coverage for the Project.
(p) No law, regulation, ruling, guideline or other
governmental action or inaction or any Permit shall be in effect
or shall have occurred (or be proposed if such proposal has a
reasonable likelihood of being enacted and, if enacted, would
have a Material Adverse Effect), the effect of which is to
prevent, directly or indirectly, the Trustees, the Issuer, the
Joint Ventures or any other party to any Luannan Project Document
from fulfilling its respective obligations thereunder.
(q) Xxxxxxx Xxxxxxxxxxxx Energy Services, Inc. shall
have consented to the references to it in the Offering Memorandum
and the use of the Luannan Engineering Report in the Offering
Memorandum, and since the date of the Luannan Engineering Report,
no event affecting the Luannan Engineering Report or the matters
referred to therein shall have occurred (i) which shall make
untrue or incorrect in any material respect, as of the Closing
Date, any information or statement contained in the Luannan
Engineering Report or in the Offering Memorandum under the
caption "Offering Memorandum Summary--Luannan Engineering Report"
or (ii) which shall not be reflected in the Offering Memorandum
but should be reflected therein in order to make the statements
and information contained in the Luannan Engineering Report, or
in the Offering Memorandum relating to matters referred to in the
Luannan Engineering Report, in light of the circumstances under
which they were made, not misleading, as evidenced by a
certificate satisfactory to the Initial Purchaser of an
authorized officer of Xxxxxxx Brinckerhoff Energy Services, Inc.,
dated the Closing Date.
(r) Xxxxxxx & Xxxxxxx, Inc. shall have consented to
the references to it in the Offering Memorandum and the use of
the Luannan Coal Consultant's Report in the Offering Memorandum;
and since the date of the Luannan Coal Consultant's Report, no
event affecting the Luannan Coal Consultant's Report or the
matters referred to therein shall have occurred (i) which shall
make untrue or incorrect in any material respect, as of the
Closing Date, any information or statement contained in the
Luannan Coal Consultant's Report or in the Offering Memorandum
under the caption "Offering Memorandum Summary--Luannan Coal
Consultant's Report" or (ii) which shall not be reflected in the
Offering Memorandum but should be reflected therein in order to
make the statements and information contained in the Luannan Coal
Consultant's Report, or in the Offering Memorandum relating to
matters referred to in the Luannan Coal Consultant's Report, in
light of the circumstances under which they were made, not
misleading, as evidenced by a certificate satisfactory to the
Initial Purchaser, of an authorized officer of Xxxxxxx & Xxxxxxx,
Inc., dated the Closing Date.
(s) The Initial Purchaser shall have received an
opinion, dated the Closing Date from White & Case, counsel to the
Trustee, in respect of the enforceability of the Luannan
Financing Agreements and the Collateral Documents to which the
Trustee is a party.
(t) You shall have received, in form and substance
satisfactory to you.
(i) certified copies of the (A) Memorandum of
Association, business certificates, by-laws, joint venture
agreement or other organizational documents of each of the
Issuer, the Joint Ventures and the Company as requested by
the Initial Purchaser and (B) resolutions of the board of
directors (or other equivalent body) of each of the Joint
Ventures, the Issuer, the Company and PEI, authorizing the
execution, delivery and performance of each Operative
Document to which such Person is a party and of all
documents evidencing other necessary action with respect
thereto;
(ii) certificates signed by an authorized
officer of each such Person certifying the name, incumbency
and signature of each individual authorized to sign the
Operative Documents to which such Person is a party and the
other documents of certificates to be delivered pursuant
hereto and thereto, which may be conclusively relied upon
until a revised certificate is similarly so delivered; and
(iii) long form good standing certificates,
certificates of authority to transact business as a foreign
corporation or partnership, as applicable, with respect to
each of the Issuer and the Company, together with bring-down
good standing certificates, dated the date of the Closing.
(iv) The Issuer and the Company shall have paid in
full on the Closing Date the fees and expenses payable to
counsel for the Initial Purchaser pursuant to clause (iv) of
Section 4(f) hereof by delivering to counsel for the Initial
Purchaser on such date a check payable to such counsel in
the requisite amount, or wiring such amount to such counsel.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
reasonably satisfactory in form and substance to the Initial
Purchaser and counsel for the Initial Purchaser.
Any certificate signed by any officer of the Issuer and
delivered to the Initial Purchaser pursuant to this Agreement
shall be deemed a representation and warranty by the Issuer to
the Initial Purchaser as to the statements made therein.
(u) At the time this Agreement is executed and
delivered by the Issuer and on the Closing Date, you shall
have received letters, substantially in the form previously
approved by you, from Deloitte & Touche LLP, independent
public accountants, with respect to the financial statements
and certain financial information contained in the Offering
Memorandum.
(v) Subsequent to the execution and delivery of this
Agreement, there shall not have been any downgrading, nor
shall have any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded to any securities of the Company or
the Issuer by any "nationally recognized statistical rating
organization," as such term is defined for the purposes of
Rule 436(g)(2) under the Securities Act.
(w) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have been
furnished with such documents and opinions, in addition to
those set forth above, as they may reasonably require for
the purpose of enabling them to review or pass upon the
matters referred to in this Section 7 and in order to
evidence the accuracy, completeness or satisfaction in all
material respects of any of the representations, warranties
or conditions herein contained.
(x) Prior to the Closing Date, the Company and the
Issuer shall have furnished to you such further information,
certificates and documents as you may reasonably request;
(y) The Issuer, the Company and the Trustee shall have
entered into the Senior Secured Notes Indenture; the Company
and the Trustee shall have entered into the Company
Indenture; and you shall have received counterparts,
conformed as executed, of each of the Indentures.
(z) The Issuer and the Company shall have entered into
the Registration Rights Agreement and you shall have
received counterparts, conformed as executed, thereof.
(aa) The Approved Construction Budget and Schedule
shall have been prepared and submitted by the Issuer to you.
(bb) All Operative Documents shall have been entered
into by all of the relevant parties thereto and you shall
have received counterparts, conformed as executed, thereof.
(cc) Prior to the Closing Date, the Company, the
Issuer and their subsidiaries shall have furnished to you
such further information, certificates and documents as you
may reasonably request, including any such information,
certificates and documents required in connection with the
legal opinions to be furnished by your counsel as set forth
above.
All opinions, certificates, letters and other documents
required by this Section 7 to be delivered by the Company and the
Issuer will be in compliance with the provisions hereof only if
they are reasonably satisfactory in form and substance to you.
The Company and the Issuer will furnish the Initial Purchaser
with such conformed copies of such opinions, certificates,
letters and other documents as they shall reasonably request.
8. Conditions to the Obligations of the Issuer and
the Company. All of the representations and warranties of the
Initial Purchaser contained in this Agreement shall be true and
correct as of the Closing Date with the same force and effect as
if made on and as of the Closing Date.
9. Effective Date of Agreement and Termination. This
Agreement shall become effective upon the execution hereof.
This Agreement may be terminated at any time on or
prior to the Closing Date by you by notice to the Issuer and the
Company if any of the following has occurred: (i) subsequent to
the date information is provided in the Offering Memorandum, any
Material Adverse Change which, in your judgment, materially
impairs the investment quality of any of the Notes, (ii) any
outbreak or escalation of hostilities or other national or
international calamity or crisis or material adverse change in
the financial markets of the United States or elsewhere, or any
other substantial national or international calamity or emergency
if the effect of such outbreak, escalation, calamity, crisis,
material adverse change or emergency would, in your judgment,
make it impracticable or inadvisable to market any of the Notes
or to enforce contracts for the sale of any of the Notes, (iii)
any suspension or limitation of trading generally in securities
on the New York Stock Exchange or in the Nasdaq National Market
System or any setting of minimum prices for trading on such
exchange or markets, (iv) any declaration of a general banking
moratorium by either federal or New York authorities, (v) the
taking of any action by any federal, state or local government or
agency in respect of its monetary or fiscal affairs that in your
judgment has a material adverse effect on the financial markets
in the United States, and would, in your judgment, make it
impracticable or inadvisable to market any of the Notes or to
enforce contracts for the sale of any of the Notes, (vi) the
enactment, publication, decree, or other promulgation of any
federal or state statute, regulation, rule or order of any court
or other governmental authority which, in your judgment, would
have a Material Adverse Effect, or (vii) any securities of the
Issuer or the Company or any of their subsidiaries shall have
been downgraded or placed on any "watch list" for possible
downgrading by any nationally recognized statistical rating
organization.
The indemnities and contribution provisions and the
other agreements, representations and warranties of the Issuer,
the Company, PEI their respective officers and directors and of
the Initial Purchaser set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Notes
regardless, of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Initial Purchaser or
by or on behalf of the Issuer, the Company, PEI, the officers or
directors of the Issuer, the Company, PEI or the controlling
person of the Issuer, the Company or PEI, (ii) acceptance of the
Notes and payment for them hereunder and (iii) termination of
this Agreement.
If this Agreement shall be terminated by the Initial
Purchaser pursuant to clause (i) of the second paragraph of this
Section 9 or because of the failure or refusal on the part of the
Issuer, the Company or PEI to comply with the terms or to fulfill
any of the conditions of this Agreement, the Issuer, the Company
and PEI agree jointly and severally to reimburse you for all
out-of-pocket expenses (including the fees and disbursements of
counsel) incurred by you, except as otherwise agreed in writing.
Notwithstanding any termination of this Agreement, the Issuer,
the Company and PEI shall be jointly and severally liable for all
expenses which they have agreed to pay pursuant to Section 4(f)
hereof. If the transactions contemplated hereby are consummated,
each of the parties shall pay its own expenses in connection with
the offering and sale of the Notes, including the costs and
expenses of its counsel, except as otherwise provided in Section
4(f) hereof.
Except as otherwise provided, this Agreement has been
and is made solely for the benefit of and shall be binding upon
the Issuer, the Company, PEI, the Initial Purchaser, any
Indemnified Person referred to herein and their respective
successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The terms "successors and
assigns" shall not include a purchaser of any of the Notes from
the Initial Purchaser merely because of such purchase.
10. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows:
(i) if to PEI, the Issuer or the Company:
Panda Energy International, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
with copy to:
Xxxxxxxxxx & Xxxxx LLP
0000 Xxxxxxx Xxx., X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxx X. Xxxxxx, Xx.
Telecopier: (000) 000-0000
(ii) if to the Initial Purchaser:
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
(iii) or in any case to such other address as the
person to be notified may have requested in
writing.
This Agreement shall be governed and construed in
accordance with the internal laws of the State of New York as
applied to contracts made and performed entirely within the State
of New York, without regard to the conflicts of laws and
principles thereof. This Agreement may be signed in various
counterparts which together shall constitute one and the same
instrument.
Please confirm that the foregoing correctly sets forth
the Agreement among PEI, the Issuer, the Company and the Initial
Purchaser.
Very truly yours,
PANDA GLOBAL ENERGY COMPANY
By:
Name:
Title:
PANDA GLOBAL HOLDINGS, INC.
By:
Name:
Title:
PANDA ENERGY INTERNATIONAL,
INC.
By:
Name:
Title:
Accepted and agreed to as of
the date first above written:
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
By: __________________________
Name:
Title:
SCHEDULE I
Subsidiaries of the Company
Panda Energy Corporation (a Texas corporation)
Panda Global Energy Company
Panda Interfunding Corporation
Lakeland Water Company
Panda-Xxxxxxxx Corporation
Panda/Live Oak Corporation
Panda Interholding Corporation
Panda Funding Corporation
Panda Cayman Interfunding Corporation
Panda-Xxxxxxxx Corporation
PRC II Corporation
Panda Brandywine Corporation
Panda Energy Corporation (a Delaware corporation)
Brandywine Water Company
Pan-Sino Energy Development Company LLC
Pan-Western Energy Corporation LLC
Tangshan Panda Heat and Power Co., Ltd.
Tangshan Pan-Western Heat and Power Co., Ltd.
Tangshan Cayman Heat and Power Co., Ltd.
Tangshan Pan-Sino Heat Co., Ltd.
Exhibit A
Form of Registration Rights Agreement
[See Exhibit 4.14 to this Registration Statement on Form S-1]
