EXHIBIT NO. 147
SHARE RETENTION AND
PROJECT FUNDS AGREEMENT
among
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED,
PANDA ENERGY INTERNATIONAL, INC.,
PANDA BHOTE KOSHI,
PANDA OF NEPAL,
HARZA ENGINEERING COMPANY INTERNATIONAL,
A LIMITED LIABILITY COMPANY,
HARZA ENGINEERING COMPANY INTERNATIONAL L.P.,
RESOURCE DEVELOPMENT CONSULTANTS,
A LIMITED LIABILITY COMPANY,
RDC OF NEPAL,
SOALTEE ENTERPRISES PRIVATE LTD.,
SOALTEE HOTEL LTD.,
SURYA ENTERPRISES PRIVATE LTD.,
HIMAL INTERNATIONAL POWER CORPORATION PVT. LTD.,
INTERNATIONAL FINANCE CORPORATION, and
DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH
Dated as of the Closing Date
TABLE OF CONTENTS
ARTICLE 1.
DEFINITIONS 2
ARTICLE 2.
SHARE RETENTION
Section 2.1 Restriction on Transfers 2
Section 2.2 Share Registry; Legends on Shares;
Notice of Transfers 4
ARTICLE 3.
DEFICIENCY FINANCING
Section 3.1 Notice of Deficiency 5
Section 3.2 Deficiency Fundings 5
Section 3.3 Deficiency Subscriptions 6
Section 3.4 Maximum Liability 8
Section 3.5 Terms of Obligations 9
ARTICLE 4.
ADDITIONAL COVENANTS
Section 4.1 Sponsors' Covenants 10
Section 4.2 Panda Guarantee 11
Section 4.3 Harza LP, RDC Wyoming and Harza LLC Guarantee 14
Section 4.4 Soaltee Enterprises, Soaltee Hotel and Surya
Guarantee 18
ARTICLE 5.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1 Representations, Warranties and Covenants of
the Sponsors 21
Section 5.2 Additional Representations, Warranties and
Covenants of Panda 23
ARTICLE 6.
FURTHER ASSURANCE
Section 6.1 Additional Approvals 24
Section 6.2 Exercise of Rights 24
ARTICLE 7.
PANDA PERFORMANCE GUARANTEE
Section 7.1 Performance Guarantee 25
ARTICLE 8.
MISCELLANEOUS
Section 8.1 Deficiency Notices; Guarantee Notices;
Funding Obligations; Etc 29
Section 8.2 No Waivers; Obligations Absolute 30
Section 8.3 Notices 31
Section 8.4 Governing Law Submission to
Jurisdiction; Venue 36
Section 8.5 Successors or Assigns 37
Section 8.6 No Waiver; Remedies Cumulative 38
Section 8.7 Severability 38
Section 8.8 Documents 38
Section 8.9 Headings Descriptive 39
Section 8.10 Amendment or Waiver 39
Section 8.11 Counterparts 39
Section 8.12 Limitation on Recourse 39
EXHIBIT A Terms and Conditions of Deficiency Loans A-1
EXHIBIT B Instructions to Bankers Trust Company B-1
EXHIBIT C Permitted Uses of Issuer Equity Distribution Fund
and Company Equity Distribution Fund C-1
SHARE RETENTION AND
PROJECT FUNDS AGREEMENT
SHARE RETENTION AND PROJECT FUNDS AGREEMENT, (this
"Agreement") dated as of the Closing Date, among BHOTE KOSHI
POWER COMPANY PRIVATE LIMITED, a private limited liability
company organized and existing under the Nepal Company Act, 2021
(the "Company"), PANDA ENERGY INTERNATIONAL, INC, a corporation
organized and existing under the laws of the State of Texas
("Panda"), PANDA BHOTE KOSHI, an exempted company with limited
liability organized and existing under the laws of the Cayman
Islands ("Panda Bhote Koshi"), PANDA OF NEPAL, an exempted
company with limited liability organized and existing under the
laws of the Cayman Islands ("Panda of Nepal"), HARZA ENGINEERING
COMPANY INTERNATIONAL, A LIMITED LIABILITY COMPANY, a limited
liability company organized and existing under the laws of the
State of Wyoming ("Harza LLC"), HARZA ENGINEERING COMPANY
INTERNATIONAL L.P., a limited partnership organized and existing
under the laws of the State of Delaware ("Harza LP"), RESOURCE
DEVELOPMENT CONSULTANTS, A LIMITED LIABILITY COMPANY, a limited
liability company organized and existing under the laws of the
State of Wyoming ("RDC Wyoming"), RDC OF NEPAL, an exempted
company with limited liability organized and existing under the
laws of the Cayman Islands ("RDC of Nepal"), SOALTEE ENTERPRISES
PRIVATE LTD., a private company organized and existing under the
laws of Nepal ("Soaltee Enterprises"), SOALTEE HOTEL LTD., a
public company organized and existing under the laws of Nepal
("Soaltee Hotel"), SURYA ENTERPRISES PRIVATE LTD., a private
company organized and existing under the laws of Nepal ("Surya"),
HIMAL INTERNATIONAL POWER CORPORATION PVT. LTD, a private limited
company organized and existing under the laws of Nepal ("HIPC",
and together with Panda, Harza LP, Harza LLC, HIPC, Panda of
Nepal, Panda Bhote Koshi, RDC Wyoming, RDC of Nepal, Soaltee
Enterprises, Soaltee Hotel and Surya, the "Sponsors"), DEG-
DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH, a company
organized and existing under the laws of the Federal Republic of
Germany ("DEG"), and INTERNATIONAL FINANCE CORPORATION, an
international organization organized and existing by virtue of
the Articles of Agreement among its member countries ("IFC")(both
DEG and IFC hereinafter being collectively referred to as the
"Lenders").
PRELIMINARY STATEMENTS:
The Company has been granted the right to build, own,
and operate a 36 MW (nominal net) hydroelectric power plant in
the Sindhupalchok District in Nepal.
IFC is willing to provide financing for the power plant
pursuant to that certain IFC Investment Agreement dated as of the
Closing Date (the "IFC Investment Agreement").
DEG is willing to provide financing for the power plant
pursuant to that certain DEG Investment Agreement dated as of the
Closing Date (the "DEG Investment Agreement," and together with
the IFC Investment Agreement, the "Investment Agreement").
The Company, IFC and DEG have entered into that certain
Investment Agreement General Conditions dated as of the Closing
Date (the "General Conditions").
The Investment Agreement, requires, inter alia, as a
condition precedent to the obligations of each of the Lenders
thereunder, the execution of this Agreement to provide for
certain covenants and agreements of the Sponsors in support of
the project and such financing.
In consideration of the Lenders entering into the
Investment Agreement, and to induce each of the Lenders to make
disbursements thereunder, the Sponsors and the Company have
agreed to enter into this Agreement and be bound by all covenants
and obligations provided for herein.
NOW, THEREFORE, IT IS AGREED:
ARTICLE 1.
DEFINITIONS
For all purposes of this Agreement, (i) capitalized
terms not otherwise defined herein shall have the meanings set
forth in Schedule A to the General Conditions and (ii) the
principles of construction set forth in Schedule A to the General
Conditions shall apply.
ARTICLE 2.
SHARE RETENTION
Section 2.1 Restriction on Transfers.
(a) From the date hereof until the Project Completion Date:
(i) Soaltee Enterprises, Soaltee Hotel
and Surya (the "HIPC Shareholders") shall at
all times own in the aggregate 100.0% of the
total shares of HIPC, of which at least 3.0%
of such 100.0% shall be owned by Soaltee
Hotel; provided, however, that the HIPC
Shareholders may from time to time Transfer
among the HIPC Shareholders an amount of
shares of HIPC not to exceed five percent
(5%) of the total shares of HIPC and provided
further that Soaltee Hotel shall at all times
own at least 3% of the total shares of HIPC.
(ii) Panda and/or a substitute
acceptable to the Lenders shall have the
right to effect a Transfer of shares held by
it from time to time in Panda of Nepal;
provided, however, that Panda and/or such
substitute must at all times own
(beneficially through Panda's and/or such
substitute's ownership interest in Panda of
Nepal) at least fifty-one percent (51%) of
the total Shares of the Company and provided
further that if such Transfer of shares is
not effected in connection with a Public
Offering, the Lenders shall have the right to
approve any proposed transferee. For
purposes of this Section 2.1, Public Offering
shall mean any underwritten public offering
of equity securities or shares in Panda of
Nepal on a firm commitment basis in
accordance with applicable securities
regulations of any stock exchange.
(iii) Harza LP and RDC Wyoming shall
at all times own one hundred percent (100%)
of the total shares of RDC of Nepal.
(iv) Each of HIPC, Panda of Nepal and
RDC of Nepal shall not effect any Transfer of
Shares held by it, except (A) for the
creation of the Lien in favor of the Trustee
for the benefit of the Lenders pursuant to
its Share Pledge Agreement, and (B) that HIPC
may, up to one and one half (1-1/2) years
from the date hereof, Transfer an amount of
Shares not to exceed five percent (5%) of the
total Shares of the Company to Panda of Nepal
and/or RDC of Nepal; provided, however, that
in the case of clause (B) RDC of Nepal shall
purchase a minimum of one-half of the Shares
being Transferred by HIPC.
(b) From the Project Completion Date until five (5)
years thereafter (or, if earlier, the Termination Date), Panda
and/or a substitute acceptable to the Lenders (beneficially
through Panda's and/or such substitute's ownership interest in
Panda of Nepal), the HIPC Shareholders (beneficially through
their ownership interests in HIPC), and Harza LP and Harza LLC
(beneficially through their ownership interests in RDC of Nepal),
in the aggregate, must at all times own at least fifty-one
percent (51%) of the total Shares of the Company. Panda and/or a
substitute acceptable to the Lenders (beneficially through
Panda's and/or such substitute's ownership interest in Panda of
Nepal) must at all times during such period own at least thirty
percent (30%) of the total Shares of the Company. If the HIPC
Shareholders own (beneficially through their ownership interests
in HIPC) any of the aforesaid fifty-one percent (51%) of the
total Shares of the Company, then Soaltee Hotel must retain at
least the same percentage of the aggregate HIPC Shareholder
ownership (beneficially through its ownership interest in HIPC)
of the Shares in the Company which Soaltee Hotel currently
maintains.
(c) At all times after the expiration of such five (5)
year period following the Project Completion Date and until the
Termination Date, Panda and/or a substitute acceptable to the
Lenders (beneficially through Panda's and/or such substitute's
ownership interest in Panda of Nepal), must own at least thirty
percent (30%) of the total Shares of the Company. For purposes
of this Section 2.1, Termination Date shall mean the last date on
which the following occurs: (x) payment in full of all
Obligations has been made, and all obligations of the Lenders
under the Loan Documents have terminated or expired, and (y) a
period of one hundred twenty (120) days (or such other period as
may be applicable under applicable bankruptcy, insolvency or
similar laws) has elapsed since the condition set out in
clause (x) is satisfied without any court determining that the
Company is insolvent or, if such determination is made within
that time, the Lenders are reasonably satisfied that no payment
made to the Lenders or the Trustee by the Company will be set
aside as a consequence thereof under any law relating to
bankruptcy, insolvency or similar matters.
(d) For the avoidance of doubt and by way of example,
if Panda and/or a substitute acceptable to the Lenders were to
own fifty percent (50%) of the shares in Panda of Nepal, and
Panda of Nepal were to own fifty percent (50%) of the Shares of
the Company, then, for purposes of this Section 2.1, Panda and/or
such substitute would own (beneficially through Panda's and/or
such substitute's ownership interest in Panda of Nepal) twenty-
five percent (25%) of the total Shares of the Company.
Section 2.2 Share Registry; Legends on Shares;
Notice of Transfers. The Company shall (i) to the extent
permitted by law, record in the share registry of the Company the
restrictions on Transfer of the Shares set forth in Section 2.1
and in the Company's governing documents and shall note such
restrictions on Transfers on the stock certificate(s) for Shares
issued by the Company, (ii) to the extent permitted by law, not
register any Transfer of Shares to any Person if the result of
such Transfer would contravene the provisions of Section 2.1, and
(iii) promptly give notice to the Lenders of any request received
by the Company to effect any Transfer of Shares held or owned by
any of the Sponsors, together with details of such request.
ARTICLE 3.
DEFICIENCY FINANCING
Section 3.1 Notice of Deficiency. If at any time
and from time to time prior to the Project Completion Date, a
Project Funds Shortfall exists, either of the Lenders may issue a
Deficiency Notice to the Company and the Sponsors specifying the
amount of such Deficiency. In addition, in support of Panda's
Deficiency funding obligations hereunder, either of the Lenders
may issue a Deficiency Notice to Bankers Trust Company, as the
trustee for the Issuer Equity Distribution Fund and the Company
Equity Distribution Fund specifying the amount of such
Deficiency.
Section 3.2 Deficiency Fundings.
(a) Each Sponsor hereby agrees that each Deficiency
shall be funded by the Sponsors on the following pro rata basis:
(i) RDC of Nepal, jointly and severally with Harza LP, RDC
Wyoming and Harza LLC, shall be responsible for funding 5.56% of
any Deficiency, (ii) Panda of Nepal, jointly and severally with
Panda and Panda Bhote Koshi, shall be responsible for funding
83.33% of any Deficiency, and (iii) HIPC, jointly and severally
with Soaltee Enterprises, Soaltee Hotel and Surya, shall be
responsible for funding 11.11% of any Deficiency, provided that
if HIPC Transfers any of its Shares in the Company to Panda of
Nepal and/or RDC of Nepal as permitted under Section 2.1(a)(iv)
hereof, or if Shares in the Company are issued to Panda of Nepal
or RDC of Nepal pursuant, respectively, to Sections 4.2(a)(ii)
and 4.3(a)(ii) hereof, the foregoing percentages shall be
adjusted to equal the percentages of the total Shares of the
Company owned by each of Panda of Nepal, RDC of Nepal and HIPC
calculated by dividing the total number of Shares of the Company
owned by each of Panda of Nepal, RDC of Nepal and HIPC
immediately following the Transfer by the total number of Shares
of the Company owned by Panda of Nepal, RDC of Nepal and HIPC in
the aggregate. The percentages specified under this Section 3.2
to be applicable to each Sponsor, as aforesaid and as adjusted,
as applicable, based on the proviso contained in the preceding
sentence, are referred to herein with respect to such Sponsor as
its "Sponsor Share." Each Deficiency to be funded hereunder
shall be in the form of (x) a Deficiency Subscription in
accordance with the provisions of this Article 3, or (y) with the
consent of the Lenders, by Deficiency Loans in accordance with
the provisions of, and subject to the terms contained in this
Article 3 and Exhibit A hereto.
(b) Upon issuance to Panda and Bankers Trust Company,
as the trustee for the Issuer Equity Distribution Fund and the
Company Equity Distribution Fund by either of the Lenders of any
Deficiency Notice from time to time, Panda shall (i) subject to
Section 4.7(a)(i) and 4.7(b) of the Panda Global Energy
Indenture, cause Panda Global Energy to submit one or more Panda
Global Energy Officer's Certificates to Bankers Trust Company, as
trustee under the Panda Global Energy Indenture, pursuant to
Section 4.7(a)(ii) of the Panda Global Energy Indenture,
authorizing the transfer of monies on deposit in the Issuer
Equity Distribution Fund to the Deficiency Sub-Account, and (ii)
subject to Sections 4.5(a)(i) and 4.5(b) of the Panda Global
Holdings Indenture, cause Panda Global Holdings to submit one or
more Panda Global Holdings Officer's Certificates to Bankers
Trust Company, as trustee under the Panda Global Holdings
Indenture, pursuant to Section 4.5(a)(ii) of the Panda Global
Holdings Indenture, authorizing the transfer of monies on deposit
in the Company Equity Distribution Fund to the Deficiency Sub-
Account, up to an aggregate amount equal to the lesser of
(x) Panda's Sponsor Share of the amount of the Deficiency and
(y) Panda's Sponsor Share of ten million Dollars ($10,000,000),
and upon receipt of such Panda Global Energy Officer's
Certificates and Panda Global Holdings Officer's Certificates,
Bankers Trust Company shall transfer from time to time up to such
amount to the Deficiency Sub-Account. In the event that the
Senior Secured Notes issued under the Panda Global Energy
Indenture and the Panda Global Holdings Indenture are repaid
prior to the Project Completion Date or the Issuer Equity
Distribution Fund and the Company Equity Distribution Fund are
otherwise no longer in place, Panda shall deliver to the Trustee
an irrevocable standby letter of credit issued in favor of the
Trustee by an Approved Bank in an amount at least equal to the
lesser of (i) Panda's Sponsor Share of the amount of the
Deficiency and (ii) Panda's Sponsor Share of ten million Dollars
($10,000,000), and in form and substance satisfactory to the
Lenders (including, without limitation, evidence satisfactory to
the Lenders that the issuer thereof has no recourse against the
Company or any of its assets) (the "Panda Letter of Credit"). In
the event that the Panda Letter of Credit is in an amount less
than Panda's Sponsor Share of ten million Dollars ($10,000,000)
and any further Deficiency Notice is delivered from time to time,
the Panda Letter of Credit shall be increased such that it is at
all times in an amount at least equal to Panda's Sponsor Share of
the Deficiency existing from time to time.
Section 3.3 Deficiency Subscriptions.
(a) If the Sponsors elect to, or if the Lenders
require the Sponsors to, make a Deficiency Subscription to fund a
Deficiency, the Sponsors shall, within seven (7) Business Days of
receipt of the Deficiency Notice, provide notice to the Company
and the other shareholders of the Company of such election or
requirement. The Company agrees to take all actions (corporate
or otherwise) necessary to authorize and offer for subscription
to its shareholders, during the Offering Period, a number of
Shares at a purchase price of not less than Ten Dollars
(US$10.00) per Share, payable in cash, that will enable the
Company to receive a net subscription price equal to the amount
of the relevant Deficiency, subject to Section 3.4 hereof. Each
Sponsor hereby agrees to subscribe and pay, at a purchase price
of not less than Ten Dollars ($10.00) per Share, for its Sponsor
Share of such Shares within fifteen (15) days following the
Offering Period; it being understood and agreed that (i) RDC of
Nepal shall be jointly and severally obligated with Harza LP, RDC
Wyoming and Harza LLC, (ii) Panda of Nepal shall be jointly and
severally obligated with Panda and Panda Bhote Koshi, and (iii)
HIPC shall be jointly and severally obligated with Soaltee
Enterprises, Soaltee Hotel and Surya for the portion or portions
of any Deficiency as provided in this Section 3.3(a) or in
Section 3.3(b) hereof. The Company agrees to issue and deliver
all such Shares against payment therefor.
(b) Deficiency Loans. If the Sponsors elect to make
Deficiency Loans to fund the Deficiency, and the Lenders consent
to such election, such Deficiency Loans shall be provided to the
Company, subject to Section 3.4 hereof, within the Offering
Period in U.S. Dollars (or such other currency as may be approved
by the Lenders) in the form of unsecured loans subordinated in
payment, liquidation and enforcement of remedies to the Loans, as
evidenced by written instruments in form and substance
satisfactory to the Lenders, on the terms and conditions
(including subordination provisions) set forth in Exhibit A
hereto. All such written instruments evidencing the Deficiency
Loans shall be delivered to the Trustee and the Lenders and held
until (x) payment in full of all Obligations has been made, and
all obligations of the Lenders under the Loan Documents have
terminated or expired, and (y) a period of one hundred twenty
(120) days (or such other period as may be applicable under
applicable bankruptcy, insolvency or similar laws) has elapsed
since the condition set out in clause (x) is satisfied without
any court determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters.
(c) Application of Deficiency Fundings.
(i) The Company shall apply the
proceeds of any Deficiency Subscription or
Deficiency Loan in accordance with the
Investment Agreement and the Trust and
Retention Agreement.
(ii) On the Business Day immediately
following the Commercial Operation Date, the
balance remaining, if any, of any proceeds of
any Deficiency Loan or Deficiency
Subscription on deposit in the Construction
Sub-Account shall be applied pursuant to
Section 4.7(d) of the Trust and Retention
Agreement. Notwithstanding any such
application, the Lenders shall maintain the
right to issue a Deficiency Notice (and the
Sponsors shall be bound thereby) in respect
of any future Project Funds Shortfall at any
time thereafter in accordance with the terms
of this Agreement. On the Business Day
immediately following the Project Completion
Date, the balance remaining, if any, of any
proceeds of any Deficiency Loan or Deficiency
Subscription on deposit in the Construction
Sub-Account shall be applied pursuant to
Section 4.7(d) of the Trust and Retention
Agreement.
(iii) On the Business Day
immediately following the Project Completion
Date, after making any payments required
pursuant to the last sentence of
Section 3.3(c)(ii) hereof, the balance
remaining, if any, of all amounts paid
pursuant to Section 2.1(a) or 2.1(b) of the
Subscription Agreements and loan and equity
disbursements made pursuant to the Investment
Agreement on deposit in the Construction Sub-
Account shall be applied pursuant to
Section 4.7(d) of the Trust and Retention
Agreement.
(iv) Prior to the Project Completion
Date, amounts then deposited in the
Deficiency Sub-Account pursuant to
Section 3.2(b) hereof shall be transferred to
Panda provided that (i) Panda has delivered
to the Trustee an irrevocable standby letter
of credit issued in favor of the Trustee by
an Approved Bank in the amount to be
transferred to Panda and in form and
substance satisfactory to the Lenders
(including, without limitation, evidence
satisfactory to the Lenders that the issuer
thereof has no recourse against the Company
or any of its assets) (the "Panda Project
Completion Letter of Credit") and, (ii) to
the extent the Panda Project Completion
Letter of Credit is at such time not issued
in the maximum amount which may be required
by Section 3.2(b) hereof (i.e., Panda's
Sponsor Share of ten million Dollars
($10,000,000)), Panda shall have made
arrangements satisfactory to the Lenders
whereby (x) the face amount of the Panda
Project Completion Letter of Credit shall be
increased up to the maximum amount which may
be required by Section 3.2(b) hereof as cash
flow is generated by the Panda Projects or
(y) the Deficiency Sub-Account shall continue
to be funded by monies transferred from the
Issuer Equity Distribution Fund and the
Company Equity Distribution Fund up to the
maximum amount which may be required by
Section 3.2(b) hereof.
(v) On the Business Day immediately
following the Project Completion Date, the
balance remaining, if any, in the Deficiency
Sub-Account shall be transferred to Panda and
the Panda Project Completion Letter of Credit
shall be delivered to Panda if and to the
extent such letter of credit has not been
drawn upon in full.
Section 3.4 Maximum Liability. Notwithstanding any
provision of this Agreement or any other Principal Document to
the contrary, the aggregate amount of Deficiency Loans and
Deficiency Subscriptions to be provided by the Sponsors pursuant
to this Article 3, together with other amounts expended by the
Sponsors to comply with other obligations under this Agreement
(other than under Sections 4.2, 4.3 and 4.4 and Article 7 of this
Agreement), shall not exceed ten million Dollars ($10,000,000),
it being expressly acknowledged and agreed that any amounts
returned to the Sponsors in accordance with Section 3.3(c)(ii),
3.3(c)(iv) hereof or Section 4.7(d) of the Trust and Retention
Agreement shall not be credited toward (and thus not reduce) the
aforesaid ten million Dollar ($10,000,000) maximum liability. It
is understood and agreed that (i) RDC of Nepal shall be jointly
and severally obligated with Harza LP, RDC Wyoming and Harza LLC,
(ii) Panda of Nepal shall be jointly and severally obligated with
Panda and Panda Bhote Koshi, and (iii) HIPC shall be jointly and
severally obligated with Soaltee Enterprises, Soaltee Hotel and
Surya for the funding of the portion or portions of any
Deficiency as provided in Sections 3.2(a)(i), 3.2(a)(ii) and
3.2(a)(iii), respectively.
Section 3.5 Terms of Obligations. The obligation of
each Sponsor under this Article 3 shall commence upon the initial
Disbursement under the Investment Agreement and shall terminate
for such Sponsor upon the earliest to occur of the following four
events: (i) with respect to such Sponsor, (x) the payment in full
of the maximum liability of such Sponsor specified in Section 3.4
hereof, and (y) a period of one hundred twenty (120) days (or
such other period as may be applicable under applicable
bankruptcy, insolvency or similar laws) has elapsed since the
condition set out in clause (i) (x) is satisfied without any
court determining that the Sponsor is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Sponsor will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters; (ii) the date on which (x) the payment in full by HMGN
of the Purchase Price (as defined in the Project Agreement)
pursuant to Section 6 of the Project Agreement and receipt
thereof by the Lenders and (y) a period of one hundred twenty
(120) days (or such other period as may be applicable under
applicable bankruptcy, insolvency or similar laws) has elapsed
since the condition set out in clause (ii) (x) is satisfied
without any court determining that HMGN is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made by HMGN will be set
aside as a consequence thereof under any law relating to
bankruptcy, insolvency or similar matters; (iii) (x) payment in
full of all Obligations has been made, and all obligations of the
Lenders under the Loan Documents have terminated or expired, and
(y) a period of one hundred twenty (120) days (or such other
period as may be applicable under applicable bankruptcy,
insolvency or similar laws) has elapsed since the condition set
out in clause (iii) (x) is satisfied without any court
determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters; or (iv) the occurrence of the Project Completion Date.
ARTICLE 4.
ADDITIONAL COVENANTS
Section 4.1 Sponsors' Covenants.
(a) Each Sponsor hereby agrees (i) not to abandon or
agree to abandon the Project at any time from the date hereof
until (x) payment in full of all Obligations has been made, and
all obligations of the Lenders under the Loan Documents have
terminated or expired, and (y) a period of one hundred twenty
(120) days (or such other period as may be applicable under
applicable bankruptcy, insolvency or similar laws) has elapsed
since the condition set out in clause (x) is satisfied without
any court determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters; (ii) to use its best efforts to cause the Commercial
Operation Date to occur by December 31, 1999; (iii) to vote its
Shares so as to direct or cause the Company to timely perform its
obligations under the Principal Documents, and (iv) if either of
the Lenders shall have exercised remedies upon an Event of
Default and for so long as such Sponsor continues to hold voting
rights in respect of its Shares after such Event of Default, to
exercise such voting rights as directed by either Lender.
(b) Each Sponsor hereby further covenants and agrees
that it shall not authorize or permit the commencement of any
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or the
Company or its debts or the debts of the Company under any
bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official over it or the
Company or any substantial part of its or the Company's property
or to consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or
other proceeding commenced against it or the Company, or to make
a general assignment for the benefit of its creditors or the
creditors of the Company. Each Sponsor agrees not to commence or
join with any other Person (other than the Lenders) in commencing
any proceeding against the Company under any bankruptcy,
reorganization, liquidation or insolvency law or statute now or
hereafter in effect in any jurisdiction.
(c) Each of the Sponsors hereby acknowledges and
agrees that the rights of such Sponsor to receive any payments
from the Company on account of Indebtedness incurred by the
Company to the Sponsor, or arising out of or in connection with
the Sponsor's interest in the Company or its rights under this
Agreement, shall be payable by the Company only from funds
available to the Company in the Holding Account or the Nepal
Holding Account (and not otherwise committed by the Company).
Each Sponsor agrees that any distributions made by the Company to
such Sponsor in its capacity, directly or indirectly, as a
shareholder of, or lender to, the Company with funds other than
funds available to the Company in the Holding Account or the
Nepal Holding Account shall be restored to the Company by such
Sponsor by deposit into an account designated by the Lenders,
promptly upon demand by the Lenders or the Company or upon such
Sponsor becoming aware of receipt of such noncomplying
distribution.
(d) Each of Panda and Harza LP hereby further
covenants and agrees that, from the date hereof until the Project
Completion Date, it shall furnish to each of the Lenders its
Financial Statements for the most recent Quarter.
(e) Each of Panda and Harza LP hereby further
covenants and agrees that after the date hereof, it shall furnish
to each of the Lenders its Annual Financial Statements for the
most recent Fiscal Year.
Section 4.2 Panda Guarantee.
(a) Panda hereby unconditionally and irrevocably
guarantees, to and for the benefit of the Lenders and the
Trustee:
(i) payment and performance of all
obligations and liabilities of Panda of Nepal
under the Shareholders' Agreement, including,
without limitation, the obligations to buy IFC's
shares in the Company as provided in
Section 3.5(b) thereof, and all obligations and
liabilities of Panda of Nepal under the
Subscription Agreement between Panda of Nepal and
the Company, except the obligations and
liabilities of Panda of Nepal under Sections
2.1(a), (c) and (d) thereof and Section 3.2
thereof, insofar as such Section 3.2 relates to
the provisions of such Sections 2.1(a), (c) and
(d) (collectively, the "Panda Guaranteed
Obligations"); and
(ii) payment and performance of all
obligations and liabilities of HIPC under Sections
2.1(a) and (c) of the Subscription Agreement
between HIPC and the Company and Section 3.2 (to
the extent that Section 3.2 relates to the
provisions of such Sections 2.1(a) and (c)) of the
Subscription Agreement between HIPC and the
Company (collectively, the "Panda-HIPC Guaranteed
Obligations"); provided, however, that Panda's
maximum liability under this Section 4.2(a)(ii)
shall not exceed one million one hundred seventy-
nine thousand eight hundred Dollars ($1,179,800).
In the event that Panda is required to pay any of
HIPC's obligations pursuant to the guarantee
contained in this Section 4.2(a)(ii), all of the
shares in the Company corresponding to such
payment that otherwise would have been issued in
favor of HIPC shall instead be issued in favor of
Panda of Nepal.
The obligations of Panda under this Section 4.2 are
irrevocable, absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of any
Principal Document or any other agreement or instrument referred
to herein or therein, or any substitution, release or exchange of
any other guarantee of or security for the Panda Guaranteed
Obligations or the Panda-HIPC Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.2 that the obligations of
Panda hereunder shall be absolute and unconditional under any and
all circumstances. The obligations of Panda under this
Section 4.2 shall not be subject to any abatement, reduction,
limitation, impairment, termination, set-off, defense,
withholding, counterclaim or recoupment whatsoever or any right
of Panda of Nepal or HIPC to any of the same, and shall not be
released or discharged until the later of (i) the date on which
(x) payment in full of all Obligations has been made, and all
obligations of the Lenders under the Loan Documents have
terminated or expired, and (y) a period of one hundred twenty
(120) days (or such other period as may be applicable under
applicable bankruptcy, insolvency or similar laws) has elapsed
since the condition set out in clause (x) is satisfied without
any court determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters or (ii) the date on which the obligations of Panda of
Nepal to purchase the applicable IFC's shares in the Company
pursuant to Section 3.5(b) of the Shareholders' Agreement have
been satisfied and the outside time by which such obligations to
buy IFC's shares in the Company could exist pursuant to such
Section 3.5(b) has passed. Without limiting the generality of
the foregoing, it is agreed that the occurrence of any one or
more of the following (without notice to Panda) shall not alter
or impair the liability of Panda hereunder, which shall remain
absolute and unconditional as described above:
(A) at any time or from time to
time, the time for any performance of or
compliance by any Person with the Panda
Guaranteed Obligations or the Panda-HIPC
Guaranteed Obligations shall be extended, or
such performance or compliance shall be
waived;
(B) any of the acts mentioned in
any of the provisions of any of the Principal
Documents or any other agreement or
instrument referred to herein or therein
shall be done or omitted by any Person;
(C) the maturity of the Panda
Guaranteed Obligations or the Panda-HIPC
Guaranteed Obligations shall be accelerated,
or the Panda Guaranteed Obligations or the
Panda-HIPC Guaranteed Obligations shall be
modified, supplemented or amended in any
respect, or any right under any Principal
Document or any other agreement or instrument
referred to herein or therein shall be waived
or any other guarantee of the Panda
Guaranteed Obligations or the Panda-HIPC
Guaranteed Obligations or any security
therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(D) any Lien granted to, or in
favor of, the Trustee or any other Person as
security for the Panda Guaranteed Obligations
or the Panda-HIPC Guaranteed Obligations
shall fail to be created or perfected or have
the priority contemplated therefor;
(E) the bankruptcy or insolvency
of the Company, Panda of Nepal, HIPC or any
other Person or any reorganization,
arrangement, compromise, composition or plan
affecting the Company, Panda of Nepal, HIPC
or any other Person shall occur; or
(F) this Agreement or any other
agreement referred to herein shall be
rejected in any bankruptcy, insolvency or
similar proceeding (nothing herein being an
admission that any obligation hereunder or
thereunder is properly classifiable as an
executory obligation).
(b) To the fullest extent permitted by applicable law,
Panda hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement
that the Trustee, the Lenders or any other Person exhaust any
right, power or remedy or proceed against any other Person under
any Principal Document or any other agreement or instrument
referred to herein or therein, or against any other Person or
against any collateral under any other guarantee of, or security
for, the Panda Guaranteed Obligations or the Panda-HIPC
Guaranteed Obligations.
(c) The obligations of Panda shall be automatically
reinstated if, and to the extent that, for any reason any payment
by or on behalf of Panda in respect of the Panda Guaranteed
Obligations or the Panda-HIPC Guaranteed Obligations is rescinded
or must be otherwise restored by the Trustee, the Lenders or any
other Person, whether as a result of any proceedings under
bankruptcy, insolvency or similar laws, reorganization or
otherwise.
(d) Until payment and satisfaction in full of the Panda
Guaranteed Obligations, the Panda-HIPC Guaranteed Obligations and
all Obligations and the expiration or termination of the
Commitment, Panda shall not exercise any claim, right or remedy
that it may now have or may hereafter acquire against Panda of
Nepal, HIPC or the Company arising under or in connection with
this Agreement, including, without limitation, any claim, right
or remedy of subrogation, contribution, reimbursement,
exoneration, indemnification or participation arising under
contract, by law or otherwise in any claim, right or remedy of
the Trustee, the Lenders or any other Person against the Company,
Panda of Nepal or HIPC or any other Person or any Security. If,
notwithstanding the preceding sentence, any such amount shall be
paid to Panda at any time when the Obligations and Commitment
shall not have been paid in full, expired or terminated (as
applicable), such amount shall be held by Panda, in trust for the
Trustee and the Lenders, segregated from other funds of Panda,
and be turned over to the Trustee in the exact form received by
Panda (duly endorsed by Panda to the Trustee, if required), to be
applied against the Obligations, whether matured or unmatured, in
accordance with the Investment Agreement and the other Loan
Documents.
(e) Each of Panda of Nepal, HIPC and Panda agrees that, as
between Panda and the Trustee, the obligations of Panda under
this Section 4.2 may become, or may be declared to be, forthwith
due and payable as provided herein notwithstanding any stay,
injunction or other prohibition preventing such declaration (or
such obligations from becoming automatically due and payable) as
against Panda of Nepal or HIPC and that, in the event of such
declaration (or such obligations becoming automatically due and
payable), such obligations (whether or not due and payable by
Panda) shall forthwith become due and payable by Panda for
purposes of this Section 4.2.
(f) The guarantees in this Section 4.2 are continuing
guarantees and shall apply to any Panda Guaranteed Obligations or
Panda-HIPC Guaranteed Obligations whenever arising. The
obligations of Panda of Nepal, HIPC and Panda hereunder shall
remain unchanged and in full force and effect in accordance with
the terms hereof notwithstanding any transfer of any interest
(whether direct or indirect) in the Company, Panda, Panda of
Nepal or HIPC.
Section 4.3 Harza LP, RDC Wyoming and Harza LLC Guarantee.
(a) Harza LP, RDC Wyoming and Harza LLC hereby jointly and
severally unconditionally and irrevocably guarantee, to and for
the benefit of the Lenders and the Trustee:
(i) payment and performance of all
obligations and liabilities of RDC of Nepal under
the Shareholders' Agreement, including, without
limitation, the obligations to buy IFC's shares in
the Company as provided in Section 3.5(b) thereof,
and all obligations and liabilities of RDC of
Nepal under the Subscription Agreement between RDC
of Nepal and the Company, except the obligations
and liabilities of RDC of Nepal under Sections
2.1(a), (c) and (d) thereof and Section 3.2
thereof, insofar as such Section 3.2 relates to
the provisions of such Sections 2.1(a), (c) and
(d) (collectively, the "RDC Guaranteed
Obligations"); and
(ii) payment and performance of all
obligations and liabilities of HIPC under Sections
2.1(a) and (c) of the Subscription Agreement
between HIPC and the Company and Section 3.2 (to
the extent that Section 3.2 relates to the
provisions of such Sections 2.1(a) and (c)) of the
Subscription Agreement between HIPC and the
Company (collectively, the "Harza-HIPC Guaranteed
Obligations"); provided, however, that the maximum
collective liability of Harza LP, RDC Wyoming and
Harza LLC under this Section 4.3(a)(ii) shall not
exceed two hundred ninety-four thousand nine
hundred fifty Dollars ($294,950). In the event
that Harza LP, RDC Wyoming and Harza LLC are
collectively required to pay any of HIPC's
obligations pursuant to the guarantee contained in
this Section 4.3(a)(ii), all of the shares in the
Company corresponding to such payment that would
have been issued in favor of HIPC shall instead be
issued in favor of RDC of Nepal.
The obligations of each of Harza LP, RDC Wyoming and
Harza LLC under this Section 4.3 are irrevocable, absolute and
unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any Principal Document or any
other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of
or security for the RDC Guaranteed Obligations or the Harza-HIPC
Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge
or defense of a surety or guarantor, it being the intent of this
Section 4.3 that the obligations of each of Harza LP, RDC Wyoming
and Harza LLC hereunder shall be absolute and unconditional under
any and all circumstances. The obligations of each of Harza LP,
RDC Wyoming and Harza LLC under this Section 4.3 shall not be
subject to any abatement, reduction, limitation, impairment,
termination, setoff, defense, withholding, counterclaim or
recoupment whatsoever or any right of RDC of Nepal or HIPC to any
of the same, and shall not be released or discharged until the
later of (i) the date on which (x) payment in full of all
Obligations has been made, and all obligations of the Lenders
under the Loan Documents have terminated or expired, and (y) a
period of one hundred twenty (120) days (or such other period as
may be applicable under applicable bankruptcy, insolvency or
similar laws) has elapsed since the condition set out in clause
(x) is satisfied without any court determining that the Company
is insolvent or, if such determination is made within that time,
the Lenders are reasonably satisfied that no payment made to the
Lenders or the Trustee by the Company will be set aside as a
consequence thereof under any law relating to bankruptcy,
insolvency or similar matters or (ii) the date on which the
obligations of RDC of Nepal to purchase the applicable IFC's
shares in the Company pursuant to Section 3.5(b) of the
Shareholders' Agreement have been satisfied and the outside time
by which such obligations to buy IFC's shares in the Company
could exist pursuant to such Section 3.5(b) has passed. Without
limiting the generality of the foregoing, it is agreed that the
occurrence of any one or more of the following (without notice to
any of Harza LP, RDC Wyoming or Harza LLC) shall not alter or
impair the liability of any of Harza LP, RDC Wyoming or Harza LLC
hereunder, which shall remain absolute and unconditional as
described above:
(A) at any time or from time to
time, the time for any performance of or
compliance by any Person with the RDC
Guaranteed Obligations or the Harza-HIPC
Guaranteed Obligations shall be extended, or
such performance or compliance shall be
waived;
(B) any of the acts mentioned in
any of the provisions of any of the Principal
Documents or any other agreement or
instrument referred to herein or therein
shall be done or omitted by any Person;
(C) the maturity of the RDC
Guaranteed Obligations or the Harza-HIPC
Guaranteed Obligations shall be accelerated,
or the RDC Guaranteed Obligations or Harza-
HIPC Guaranteed the Obligations shall be
modified, supplemented or amended in any
respect, or any right under any Principal
Document or any other agreement or instrument
referred to herein or therein shall be waived
or any other guarantee of the RDC Guaranteed
Obligations or Harza-HIPC Guaranteed
Obligations or any security therefor shall be
released or exchanged in whole or in part or
otherwise dealt with;
(D) any Lien granted to, or in
favor of, the Trustee or any other Person as
security for the RDC Guaranteed Obligations
or the Harza-HIPC Guaranteed Obligations
shall fail to be created or perfected or have
the priority contemplated therefor;
(E) the bankruptcy or insolvency
of the Company, RDC of Nepal, HIPC or any
other Person or any reorganization,
arrangement, compromise, composition or plan
affecting the Company, RDC of Nepal, HIPC or
any other Person shall occur; or
(F) this Agreement or any other
agreement referred to herein shall be
rejected in any bankruptcy, insolvency or
similar proceeding (nothing herein being an
admission that any obligation hereunder or
thereunder is properly classifiable as an
executory obligation).
(b) To the fullest extent permitted by applicable law, each
of Harza LP, RDC Wyoming and Harza LLC hereby expressly waives
diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Trustee, the
Lenders or any other Person exhaust any right, power or remedy or
proceed against any other Person under any Principal Document or
any other agreement or instrument referred to herein or therein,
or against any other Person or against any collateral under any
other guarantee of, or security for, the RDC Guaranteed
Obligations.
(c) The obligations of each of Harza LP, RDC Wyoming and
Harza LLC shall be automatically reinstated if, and to the extent
that, for any reason any payment by or on behalf of any of Harza
LP, RDC Wyoming or Harza LLC in respect of the RDC Guaranteed
Obligations or the Harza-HIPC Guaranteed Obligations is rescinded
or must be otherwise restored by the Trustee, the Lenders or any
other Person, whether as a result of any proceedings under
bankruptcy, insolvency or similar laws, reorganization or
otherwise.
(d) Until payment and satisfaction in full of the RDC
Guaranteed Obligations, the Harza-HIPC Guaranteed Obligations and
all Obligations and the expiration or termination of the
Commitment, none of Harza LP, RDC Wyoming or Harza LLC shall
exercise any claim, right or remedy that it may now have or may
hereafter acquire against RDC of Nepal, HIPC or the Company
arising under or in connection with this Agreement, including,
without limitation, any claim, right or remedy of subrogation,
contribution, reimbursement, exoneration, indemnification or
participation arising under contract, by law or otherwise in any
claim, right or remedy of the Trustee, the Lenders or any other
Person against the Company, RDC of Nepal, or HIPC or any other
Person or any Security. If, notwithstanding the preceding
sentence, any such amount shall be paid to Harza LP, RDC Wyoming
and/or Harza LLC (as the case may be) at any time when the
Obligations and Commitment shall not have been paid in full,
expired or terminated (as applicable), such amount shall be held
by Harza LP, RDC Wyoming and/or Harza LLC (as the case may be),
in trust for the Trustee and the Lenders, segregated from other
funds of Harza LP, RDC Wyoming and/or Harza LLC (as the case may
be), and be turned over to the Trustee in the exact form received
by Harza LP, RDC Wyoming and/or Harza LLC (as the case may be)
(duly endorsed by Harza LP, RDC Wyoming and/or Harza LLC (as the
case may be) to the Trustee, if required), to be applied against
the Obligations, whether matured or unmatured, in accordance with
the Investment Agreement and the other Loan Documents.
(e) Each of RDC of Nepal, Harza LP, RDC Wyoming, Harza LLC
and HIPC agrees that, as between Harza LP, RDC Wyoming and Harza
LLC and the Trustee, the obligations of Harza LP, RDC Wyoming and
Harza LLC under this Section 4.3 may become, or may be declared
to be, forthwith due and payable as provided herein
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against RDC of Nepal or HIPC
and that, in the event of such declaration (or such obligations
becoming automatically due and payable), such obligations
(whether or not due and payable by Harza LP, RDC Wyoming and
Harza LLC) shall forthwith become due and payable by Harza LP,
RDC Wyoming and Harza LLC for purposes of this Section 4.3.
(f) The guarantees in this Section 4.3 are continuing
guarantees and shall apply to any RDC Guaranteed Obligations or
Harza-HIPC Guaranteed Obligations whenever arising. The
obligations of RDC of Nepal, HIPC, Harza LP, RDC Wyoming and
Harza LLC hereunder shall remain unchanged and in full force and
effect in accordance with the terms hereof notwithstanding any
transfer of any interest (whether direct or indirect) in the
Company, Harza LP, RDC Wyoming, Harza LLC, RDC of Nepal or HIPC.
Section 4.4 Soaltee Enterprises, Soaltee Hotel and Surya Guarantee.
(a) Soaltee Enterprises, Soaltee Hotel and Surya hereby
jointly and severally unconditionally and irrevocably guarantee,
to and for the benefit of the Lenders and the Trustee:
(i) payment and performance of all
obligations and liabilities of HIPC under the
Shareholders' Agreement, including, without
limitation, the obligations to buy IFC's shares in
the Company as provided in Section 3.5(b) thereof,
and all obligations and liabilities of HIPC under
the Subscription Agreement between HIPC and the
Company, except (other than as provided in Section
4.4(a)(ii) below) the obligations and liabilities
of HIPC under Sections 2.1(a) and (c) thereof and
Section 3.2 thereof, insofar as such Section 3.2
relates to the provisions of such Sections 2.1(a)
and (c) (collectively, the "HIPC Guaranteed
Obligations").
(ii) payment and performance of all
obligations and liabilities of HIPC under Sections
2.1(a) and (c) of the Subscription Agreement
between HIPC and the Company and Section 3.2 (to
the extent that Section 3.2 relates to the
provisions of such Sections 2.1(a) and (c)) of the
Subscription Agreement between HIPC and the
Company (collectively, the "Soaltee-HIPC
Guaranteed Obligations"); provided, however, that
the maximum collective liability of Soaltee
Enterprises, Soaltee Hotel and Surya under this
Section 4.4(a)(ii) shall not exceed one hundred
ninety two thousand one hundred and thirty two
Dollars ($192,132).
The obligations of each of Soaltee Enterprises, Soaltee
Hotel and Surya under this Section 4.4 are irrevocable, absolute
and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any Principal Document
or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other
guarantee of or security for the HIPC Guaranteed Obligations or
the Soaltee-HIPC Guaranteed Obligations, and, to the fullest
extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor, it
being the intent of this Section 4.4 that the obligations of each
of Soaltee Enterprises, Soaltee Hotel and Surya hereunder shall
be absolute and unconditional under any and all circumstances.
The obligations of each of Soaltee Enterprises, Soaltee Hotel and
Surya under this Section 4.4 shall not be subject to any
abatement, reduction, limitation, impairment, termination,
setoff, defense, withholding, counterclaim or recoupment
whatsoever or any right of HIPC to any of the same, and shall not
be released or discharged until the later of (i) the date on
which (x) payment in full of all Obligations has been made, and
all obligations of the Lenders under the Loan Documents have
terminated or expired, and (y) a period of one hundred twenty
(120) days (or such other period as may be applicable under
applicable bankruptcy, insolvency or similar laws) has elapsed
since the condition set out in clause (x) is satisfied without
any court determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters or (ii) the date on which the obligations of HIPC to
purchase the applicable IFC's shares in the Company pursuant to
Section 3.5(b) of the Shareholders' Agreement have been satisfied
and the outside time by which such obligations to buy IFC's
shares in the Company could exist pursuant to such Section 3.5(b)
has passed. Without limiting the generality of the foregoing, it
is agreed that the occurrence of any one or more of the following
(without notice to any of Soaltee Enterprises, Soaltee Hotel and
Surya) shall not alter or impair the liability of any of Soaltee
Enterprises, Soaltee Hotel or Surya hereunder, which shall remain
absolute and unconditional as described above:
(A) at any time or from time to time, the
time for any performance of or compliance by any
Person with the HIPC Guaranteed Obligations or the
Soaltee-HIPC Guaranteed Obligations shall be
extended, or such performance or compliance shall
be waived;
(B) any of the acts mentioned in any of the
provisions of any of the Principal Documents or
any other agreement or instrument referred to
herein or therein shall be done or omitted by any
Person;
(C) the maturity of the HIPC Guaranteed
Obligations or the Soaltee-HIPC Guaranteed
Obligations shall be accelerated, or the HIPC
Guaranteed Obligations or Soaltee-HIPC Guaranteed
Obligations shall be modified, supplemented or
amended in any respect, or any right under any
Principal Document or any other agreement or
instrument referred to herein or therein shall be
waived or any other guarantee of the HIPC
Guaranteed Obligations or the Soaltee Guaranteed
Obligations or any security therefor shall be
released or exchanged in whole or in part or
otherwise dealt with;
(D) any Lien granted to, or in favor of, the
Trustee or any other Person as security for the
HIPC Guaranteed Obligations or the Soaltee-HIPC
Guaranteed Obligations shall fail to be created or
perfected or have the priority contemplated
therefor;
(E) the bankruptcy or insolvency of the
Company, HIPC or any other Person or any
reorganization, arrangement, compromise,
composition or plan affecting the Company, HIPC or
any other Person shall occur; or
(F) this Agreement or any other agreement
referred to herein shall be rejected in any
bankruptcy, insolvency or similar proceeding
(nothing herein being an admission that any
obligation hereunder or thereunder is properly
classifiable as an executory obligation).
(b) To the fullest extent permitted by applicable law, each
of Soaltee Enterprises, Soaltee Hotel and Surya hereby expressly
waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Trustee, the
Lenders or any other Person exhaust any right, power or remedy or
proceed against any other Person under any Principal Document or
any other agreement or instrument referred to herein or therein,
or against any other Person or against any collateral under any
other guarantee of, or security for, the HIPC Guaranteed
Obligations or the Soaltee-HIPC Guaranteed Obligations.
(c) The obligations of each of Soaltee Enterprises, Soaltee
Hotel and Surya shall be automatically reinstated if, and to the
extent that, for any reason any payment by or on behalf of any of
Soaltee Enterprises, Soaltee Hotel or Surya in respect of the
HIPC Guaranteed Obligations is rescinded or must be otherwise
restored by the Trustee, the Lenders or any other Person, whether
as a result of any proceedings under bankruptcy, insolvency or
similar laws, reorganization or otherwise.
(d) Until payment and satisfaction in full of the HIPC
Guaranteed Obligations, the Soaltee-HIPC Guaranteed Obligations
and all Obligations and the expiration or termination of the
Commitment, none of Soaltee Enterprises, Soaltee Hotel or Surya
shall exercise any claim, right or remedy that it may now have or
may hereafter acquire against HIPC or the Company arising under
or in connection with this Agreement, including, without
limitation, any claim, right or remedy of subrogation,
contribution, reimbursement, exoneration, indemnification or
participation arising under contract, by law or otherwise in any
claim, right or remedy of the Trustee, the Lenders or any other
Person against the Company or HIPC or any other Person or any
Security. If, notwithstanding the preceding sentence, any such
amount shall be paid to any of Soaltee Enterprises, Soaltee Hotel
and/or Surya at any time when the Obligations and Commitment
shall not have been paid in full, expired or terminated (as
applicable), such amount shall be held by Soaltee Enterprises,
Soaltee Hotel and/or Surya (as the case may be) in trust for the
Trustee and the Lenders, segregated from other funds of Soaltee
Enterprises, Soaltee Hotel and/or Surya (as the case may be) and
be turned over to the Trustee in the exact form received by
Soaltee Enterprises, Soaltee Hotel and/or Surya (as the case may
be) (duly endorsed by Soaltee Enterprises, Soaltee Hotel and/or
Surya (as the case may be) to the Trustee, if required), to be
applied against the Obligations, whether matured or unmatured, in
accordance with the Investment Agreement and the other Loan
Documents.
(e) Each of HIPC, Soaltee Enterprises, Soaltee Hotel and
Surya agrees that, as among Soaltee Enterprises, Soaltee Hotel
and Surya and the Trustee, the obligations of Soaltee
Enterprises, Soaltee Hotel and Surya under this Section 4.4 may
become, or may be declared to be, forthwith due and payable as
provided herein notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against HIPC and that,
in the event of such declaration (or such obligations becoming
automatically due and payable), such obligations (whether or not
due and payable by Soaltee Enterprises, Soaltee Hotel or Surya)
shall forthwith become due and payable by Soaltee Enterprises,
Soaltee Hotel and Surya for purposes of this Section 4.4.
(f) The guarantees in this Section 4.4 are continuing
guarantees and shall apply to any HIPC Guaranteed Obligations or
Soaltee-HIPC Guaranteed Obligations whenever arising. The
obligations of HIPC, Soaltee Enterprises, Soaltee Hotel and Surya
hereunder shall remain unchanged and in full force and effect in
accordance with the terms hereof notwithstanding any transfer of
any interest (whether direct or indirect) in the Company, Soaltee
Enterprises, Soaltee Hotel, Surya, or HIPC.
ARTICLE 5.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1 Representations, Warranties and Covenants of
the Sponsors. Each of the Sponsors represents, warrants, and
covenants that:
(a) this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms, except as
the enforceability thereof may be limited by applicable
bankruptcy, insolvency or other similar laws affecting
enforcement of creditors rights generally;
(b) the execution, delivery and performance of this
Agreement will not conflict with or result in a breach of any of
the terms, conditions or provisions of, or constitute a default
or require any consent under, any indenture, mortgage, agreement
or other instrument or arrangement to which it is a party or by
which it is bound, or violate any of the terms or provisions of
its articles of incorporation, by-laws or other governing
documents, or any judgment, decree or order or any law, statute,
rule or regulation applicable to it which would be reasonably
likely to constitute a Material Adverse Change;
(c) by the Financial Closing Date, it will have obtained
all consents, licenses and authorizations of all governmental
authorities required under applicable laws, regulations, decrees
or orders of or in any applicable jurisdiction (which may legally
be obtained as of such date) in connection with the execution,
delivery, performance, validity or enforceability of this
Agreement and, if applicable, the disbursement of any Deficiency
Subscription or Deficiency Loans or the making of any other
payments to the Company in accordance with this Agreement and
that such consents, licenses and authorizations will by such date
be in full force and effect;
(d) (i) the most recent audited statements and
unaudited "group" statements of financial
condition of each Sponsor, in each case
heretofore furnished to the Lenders, present
fairly the financial condition of each Sponsor
at the date of such statements and the results
of the operations of the relevant entity for the
relevant period. Such financial statements have
been prepared in accordance with U.S. GAAP, and
Nepalese accounting principles and practices
consistently applied in the case of HIPC. Since
the date of the most recent audited financials
of such Sponsor furnished to the Lenders, no
Material Adverse Change in respect of such
Sponsor has occurred; and
(ii) except as fully reflected in the
financial statements referred to in
Section 5.1(d)(i) hereof there are no
liabilities or obligations with respect to such
Sponsor of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and
whether or not due) for the period to which such
financial statements relate which, either
individually or in the aggregate, would be
material to such Sponsor. Such Sponsor does not
know of any reasonable basis for the assertion
against it of any liability or obligation of any
nature whatsoever for such relevant period that
is not fully reflected in the financial
statements referred to in Section 5.1(d)(i)
which, either individually or in the aggregate,
could constitute a Material Adverse Change;
(e) (i) each of Panda and Panda Bhote Koshi
represents and warrants to the Lenders that
(A) Panda owns beneficially and indirectly 100%
of the issued and outstanding shares of Panda of
Nepal, and (B) Panda Bhote Koshi owns 100% of
the issued and outstanding shares of Panda of
Nepal;
(ii) each of Harza LP and RDC Wyoming
represents and warrants to the Lenders that
Harza LP and RDC Wyoming each owns 50% and 50%,
respectively, of the issued and outstanding
shares of RDC of Nepal;
(iii) each of Soaltee Enterprises,
Soaltee Hotel and Surya represents and warrants
to the Lenders that each of Soaltee Enterprises,
Soaltee Hotel and Surya each owns .25%, 3.0% and
96.75%, respectively, of the issued and
outstanding shares of HIPC;
Section 5.2 Additional Representations, Warranties and
Covenants of Panda. Panda further represents, warrants and
covenants that:
(a) in the event either of the Lenders issues a Deficiency
Notice or a Guarantee Notice to Panda and Bankers Trust Company
in accordance with Section 3.1 or Article 7 hereof, Panda shall,
subject to Sections 4.7(a)(i) and 4.7(b) of the Panda Global
Energy Indenture and Sections 4.5(a)(i) and 4.5(b) of the Panda
Global Holdings Indenture, cause Panda Global Energy and Panda
Global Holdings, respectively, to issue Officer's Certificates to
Bankers Trust Company pursuant to Section 4.7(a)(ii) of the Panda
Global Energy Indenture and Section 4.5(a)(ii) of the Panda
Global Holdings Indenture, respectively, authorizing Bankers
Trust Company, as trustee for the Issuer Equity Distribution Fund
and the Company Equity Distribution Fund, to transfer monies in
such funds to either the Deficiency Sub-Account or the Cash Sub-
Account in accordance with Section 3.2(b) or Article 7 hereof,
as applicable;
(b) it has caused each of Panda Global Energy and Panda
Global Holdings to issue irrevocable instructions to Bankers
Trust Company, in the form of Exhibit B hereto authorizing and
requesting that in the event either of the Lenders issues a
Deficiency Notice or a Guarantee Notice to Panda and Bankers
Trust Company in accordance with Section 3.1 or Article 7 hereof,
Bankers Trust Company, as trustee for the Issuer Equity
Distribution Fund and the Company Equity Distribution Fund will,
subject to Sections 4.7(a)(i) and 4.7(b) of the Panda Global
Energy Indenture and Sections 4.5(a)(i) and 4.5(b) of the Panda
Global Holdings Indenture, including, without limitation, receipt
of an Officer's Certificate as provided therein, transfer monies
in such funds, as directed by the Lenders, to either the
Deficiency Sub-Account or the Cash Sub-Account in accordance with
Section 3.2(b) or Article 7 hereof, as applicable;
(c) transfers from the Issuer Equity Distribution Fund and
the Company Equity Distribution Fund into either the Deficiency
Sub-Account or the Cash Sub-Account are permitted uses of such
funds pursuant to the loan documents relating to the Senior
Secured Notes, provided that the conditions set forth in Sections
4.7(a)(i) and 4.7(b) of the Panda Global Energy Indenture and
Sections 4.5(a)(i) and 4.5(b) of the Panda Global Holdings
Indenture, respectively, are satisfied. All other permitted uses
of such funds pursuant to the loan documents relating to the
Senior Secured Notes are specified in Exhibit C hereto;
(d) the documents delivered to each of the Lenders in
connection with the Panda Global Energy Indenture and the Panda
Global Holdings Indenture constitute all the relevant documents
in connection with the ability of Panda Global Energy and Panda
Global Holdings to transfer funds from the Issuer Equity
Distribution Fund or the Company Equity Distribution Fund, as the
case may be, to the Deficiency Sub-Account and the Cash Sub-
Account;
(e) upon issuance by the Trustee or either Lender to Panda
of a Deficiency Notice or a Guarantee Notice, Panda shall
thereafter not instruct and shall ensure that neither Panda
Global Energy nor Panda Global Holdings delivers to Bankers Trust
Company, as the trustee for the Issuer Equity Distribution Fund
and the Company Equity Distribution Fund, any Panda Global Energy
Officer's Certificate or Panda Global Holdings Officer's
Certificate that would result in a diversion of funds from the
Issuer Equity Distribution Fund or the Company Equity
Distribution Fund to a source other than any funding of the
Deficiency Sub-Account or the Cash Sub-Account, as the case may
be, which is contemplated hereunder;
(f) following issuance by the Trustee or either Lender to
Panda of a Deficiency Notice or a Guarantee Notice and until the
Project Completion Date, Panda shall deliver to each of the
Lenders copies of all Panda Global Energy Officer's Certificates
and Panda Global Holdings Officer's Certificates delivered to
Bankers Trust Company, as the trustee for the Issuer Equity
Distribution Fund and the Company Equity Distribution Fund.
ARTICLE 6.
FURTHER ASSURANCE
Section 6.1 Additional Approvals. In the event that any
additional consents, licenses or authorizations may be required
in connection with the execution, delivery or performance by any
Sponsor, or the validity or enforceability, of this Agreement or
the disbursement of any Deficiency Subscription or Deficiency
Loan or the making of any other payment, each of the Sponsors and
the Company shall obtain all such consents, licenses or
authorizations so that on or before the disbursement of any
Deficiency Subscription or Deficiency Loan or the making of any
other payment, the Company may validly accept and the Sponsor may
validly make such Deficiency Subscription, Deficiency Loan or
other payment.
Section 6.2 Exercise of Rights. The Company agrees to
take all actions required to claim monies to which it is entitled
hereunder, in a due and expeditious manner. If the Company fails
to exercise any of its rights under this Agreement in a due and
expeditious manner, the Company and each Sponsor hereby agrees
that each of the Lenders shall have the right to enforce any such
right of the Company and claim all monies to which the Company is
entitled hereunder.
ARTICLE 7.
PANDA PERFORMANCE GUARANTEE
Section 7.1 Performance Guarantee.
(a) Panda hereby unconditionally and irrevocably
guarantees, to and for the benefit of the Lenders and the
Trustee, the due and punctual payment of all sums whatsoever due
and owing by the EPC Contractor under the EPC Contract up to an
amount equal to fifteen percent (15%) of the EPC contract price
as the same may be adjusted from time to time pursuant to Change
Order (as such term is defined in the EPC Contract) (the "EPC
Contract Price") plus one hundred fifty thousand Dollars
($150,000) (the "EPC Contractor Guaranteed Obligations") in
accordance with the terms and conditions set forth in this
Article 7.
(b) If at any time, and in accordance with the Performance
Guarantee, a written demand(s) has been issued for payment under
the Performance Guarantee (which written demand the Company shall
issue upon request by either of the Lenders or the Trustee) in
amounts equal to, in the aggregate, at least fifteen percent
(15%) of the EPC Contract Price and payments under the
Performance Guarantee have been made in amounts equal to, in the
aggregate, at least fifteen percent (15%) of the EPC Contract
Price, either of the Lenders may issue a notice to Panda and
Bankers Trust Company, as the trustee for the Issuer Equity
Distribution Fund and the Company Equity Distribution Fund (the
"Guarantee Notice") and Panda shall (i) subject to Sections
4.7(a)(i) and 4.7(b) of the Panda Global Energy Indenture, cause
Panda Global Energy to submit one or more Panda Global Energy
Officer's Certificates to Bankers Trust Company, as trustee under
the Panda Global Energy Indenture, pursuant to Section 4.7(a)(ii)
of the Panda Global Energy Indenture, authorizing the transfer of
monies on deposit in the Issuer Equity Distribution Fund to the
Cash Sub-Account, and (ii) subject to Sections 4.5(a)(i) and
4.5(b) of the Panda Global Holdings Indenture, cause Panda Global
Holdings to submit one or more Panda Global Holdings Officer's
Certificates to Bankers Trust Company, as trustee under the Panda
Global Holdings Indenture, pursuant to Section 4.5(a)(ii) of the
Panda Global Energy Indenture, authorizing the transfer of monies
on deposit in the Company Equity Distribution Fund to the Cash
Sub-Account, up to an aggregate amount equal to fifteen percent
(15%) of the EPC Contract Price plus one hundred fifty thousand
Dollars ($150,000), and upon receipt of such Panda Global Energy
Officer's Certificates and Panda Global Holdings Officer's
Certificates, Bankers Trust Company shall transfer such amount to
the Cash Sub-Account. Notwithstanding the foregoing, (i) if
either of the Lenders has issued a Deficiency Notice to Bankers
Trust Company pursuant to Section 3.1(a) hereof at any time prior
to the issuance of a Guarantee Notice, Bankers Trust Company, as
trustee for the Issuer Equity Distribution Fund and the Company
Equity Distribution Fund shall be authorized to only deposit in
the Cash Sub-Account all funds remaining in the Issuer Equity
Distribution Fund or the Company Equity Distribution Fund from
time to time after the deposit of funds into the Deficiency Sub-
Account in accordance with Section 3.2(b) hereof, and (ii) if
either of the Lenders issues a Deficiency Notice at any time
after the issuance of a Guarantee Notice, the Lenders, at their
option at any time and from time to time, may direct the Trustee
to withdraw any funds previously deposited in the Cash Sub-
Account and deposit such funds in the Deficiency Sub-Account to
the extent that such Deficiency Sub-Account is not funded up to
the maximum amount required by Section 3.2(b) hereof. The
Company shall not have any rights of withdrawal of amounts
deposited in the Cash Sub-Account. In the event that the Senior
Secured Notes issued under the Panda Global Energy Indenture and
the Panda Global Holdings Indenture are repaid prior to Final
Acceptance or the Issuer Equity Distribution Fund and the Company
Equity Distribution Fund are otherwise no longer in place, Panda
shall deliver to the Trustee an irrevocable standby letter of
credit issued in favor of the Trustee by an Approved Bank in an
amount equal to fifteen percent (15%) of the EPC Contract Price
plus one hundred fifty thousand Dollars ($150,000), and in form
and substance satisfactory to the Lenders (including, without
limitation, evidence satisfactory to the Lenders that the issuer
thereof has no recourse against the Company or any of its assets)
(the "Panda Guarantee Letter of Credit").
(c) After the aggregate payment of an amount equal to
thirty-five percent (35%) of the EPC Contract Price under the
Performance Guarantee, Panda shall be obligated to deposit from
time to time in such of the Revenue Sub-Account, the Liquidated
Damages Sub-Account or the Construction Sub-Account as the
Lenders direct an amount equal to the amount then due and owing
by the EPC Contractor under the EPC Contract and which the EPC
Contractor has failed to pay, which amount shall not exceed in
the aggregate fifteen percent (15%) of the EPC Contract Price
plus one hundred fifty thousand Dollars ($150,000).
(d) If prior to Final Acceptance (as such term is defined
in the EPC Contract), (i) the requirements specified in the
Specified EPC Clauses (as hereinafter defined) shall have been
satisfied, (ii) as contemplated by any Deficiency Notice which
has then been issued, the Deficiency Sub-Account contains an
amount equal to the lesser of (x) Panda's Sponsor Share of the
amount of the Deficiency and (y) Panda's Sponsor Share of ten
million Dollars ($10,000,000), and (iii) the Lenders and the
Independent Engineer determine, in their reasonable discretion,
that the amount of funds in the Cash Sub-Account is in excess of
(A) the amount of remaining funds required to achieve Final
Acceptance less (B) the undrawn amount of the Performance
Guarantee and the available amounts of the Retainage (as defined
in the EPC Contract) (the aforesaid excess referred to herein as
the "Cash Sub-Account Excess"), the amount of such Cash Sub-
Account Excess shall be withdrawn from the Cash Sub-Account and
delivered to Panda; provided, however, that the Lenders and the
Independent Engineer shall have the right to re-evaluate, on a
quarterly basis, the amount specified in clauses (A) and (B) and
determine, in their reasonable discretion, whether any Cash Sub-
Account Excess exists at such time, and, to the extent no such
Cash Sub-Account Excess exists at such time, Panda shall cause,
to the extent provided in Section 3.2(b) hereof, funds to
continue to flow into the Cash Sub-Account in accordance with
Section 7.1(b) hereof and will not be delivered to Panda unless
and until there is again a Cash Sub-Account Excess. For purposes
hereof, "Specified EPC Clauses" shall mean all of the following:
items (i) through and including (x) and items (xii) and (xiii) of
the definition of First Unit Delivery contained in the EPC
Contract, items (ii) through and including (xi) and item (xvi) of
the definition of Second Unit Delivery contained in the EPC
Contract, and item (ii) of the definition of Final Acceptance
contained in the EPC Contract.
(e) Following Final Acceptance, the balance remaining, if
any, of all amounts in the Cash Sub-Account shall be transferred
to Panda; provided, however, that if a Deficiency Notice has been
issued and the Deficiency Sub-Account is not funded in an amount
equal to the lesser of (x) Panda's Sponsor Share of the amount of
the Deficiency and (y) Panda's Sponsor Share of ten million
Dollars ($10,000,000), then the balance remaining in the Cash Sub-
Account, if any, shall be deposited in the Deficiency Sub-Account
to the extent of such shortfall.
(f) The obligations of Panda under this Article 7 are
irrevocable, absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of any
Principal Document or any other agreement or instrument referred
to herein or therein, or any substitution, release or exchange of
any other guarantee of or security for the EPC Contractor
Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge
or defense of a surety or guarantor, it being the intent of this
Article 7 that the obligations of Panda hereunder shall be
absolute and unconditional under any and all circumstances. The
obligations of Panda under this Article 7 shall not be subject to
any abatement, reduction, limitation, impairment, termination,
set-off, defense, withholding, counterclaim or recoupment
whatsoever or any right of the Company to any of the same.
Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following (without
notice to Panda) shall not alter or impair the liability of Panda
hereunder, which shall remain absolute and unconditional as
described above:
(i) at any time or from time to time, the
time for any performance of or compliance by any
Person with the EPC Contractor Guaranteed
Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of
the provisions of any of the Principal Documents
or any other agreement or instrument referred to
herein or therein shall be done or omitted by
any Person;
(iii) the maturity of the EPC
Contractor Guaranteed Obligations shall be
accelerated, or the EPC Contractor Guaranteed
Obligations shall be modified, supplemented or
amended in any respect, or any right under any
Principal Document or any other agreement or
instrument referred to herein or therein shall
be waived or any other guarantee of the EPC
Contractor Guaranteed Obligations or any
security therefor shall be released or exchanged
in whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of,
the Trustee or any other Person as security for
the EPC Contractor Guaranteed Obligations shall
fail to be created or perfected or have the
priority contemplated therefor;
(v) the bankruptcy or insolvency of the
Company or any other Person or any
reorganization, arrangement, compromise,
composition or plan affecting the Company or any
other Person shall occur; or
(vi) this Agreement or any other agreement
referred to herein shall be rejected in any
bankruptcy, insolvency or similar proceeding
(nothing herein being an admission that any
obligation hereunder or thereunder is properly
classifiable as an executory obligation).
(g) To the fullest extent permitted by applicable law,
Panda hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement
that the Trustee, the Lenders or any other Person exhaust any
right, power or remedy or proceed against any other Person under
any Principal Document or any other agreement or instrument
referred to herein or therein, or against any other Person or
against any collateral under any other guarantee of, or security
for, the EPC Contractor Guaranteed Obligations.
(h) The obligations of Panda shall be automatically
reinstated if, and to the extent that, for any reason any payment
by or on behalf of Panda in respect of the EPC Contractor
Guaranteed Obligations is rescinded or must be otherwise restored
by the Trustee, the Lenders or any other Person, whether as a
result of any proceedings under bankruptcy, insolvency or similar
laws, reorganization or otherwise.
(i) Until payment and satisfaction in full of the EPC
Contractor Guaranteed Obligations and all Obligations and the
expiration or termination of the Commitment, Panda shall not
exercise any claim, right or remedy that it may now have or may
hereafter acquire against the EPC Contractor or the Company
arising under or in connection with this Agreement, including,
without limitation, any claim, right or remedy of subrogation,
contribution, reimbursement, exoneration, indemnification or
participation arising under contract, by law or otherwise in any
claim, right or remedy of the Trustee, the Lenders or any other
Person against the Company or the EPC Contractor or any other
Person or any Security. If, notwithstanding the preceding
sentence, any such amount shall be paid to Panda at any time when
the Obligations and Commitment shall not have been paid in full,
expired or terminated (as applicable), such amount shall be held
by Panda, in trust for the Trustee and the Lenders, segregated
from other funds of Panda, and be turned over to the Trustee in
the exact form received by Panda (duly endorsed by Panda to the
Trustee, if required), to be applied against the Obligations,
whether matured or unmatured, in accordance with the Investment
Agreement and the other Loan Documents.
(j) The guarantee in this Article 7 is a continuing
guarantee and shall apply to any EPC Contractor Guaranteed
Obligations whenever arising. The obligations of Panda hereunder
shall remain unchanged and in full force and effect in accordance
with the terms hereof notwithstanding any transfer of any
interest (whether direct or indirect) in the Company or Panda.
ARTICLE 8.
MISCELLANEOUS
Section 8.1 Deficiency Notices; Guarantee Notices;
Funding Obligations; Etc.
(a) Only either Lender may issue and deliver to the
Company, a Sponsor, Panda or to Bankers Trust Company, as trustee
for the Issuer Equity Distribution Fund and the Company Equity
Distribution Fund a Deficiency Notice and to Bankers Trust
Company, as trustee for the Issuer Equity Distribution Fund and
the Company Equity Distribution Fund a Guarantee Notice
hereunder, and either Lender may do so on one or more occasions.
Each Sponsor and the Company agree that while it is the right of
either Lender to call for the provision of funds hereunder to
meet a Deficiency or an EPC Contractor Guaranteed Obligation,
neither Lender shall have any obligation to make such a call, nor
shall either Lender be liable to any party hereto for any action
taken or not taken by either Lender hereunder.
(b) The funds provided by each Sponsor in accordance with
the provisions of this Agreement shall be additional to any funds
that may be provided to the Company under any other agreement to
which such Sponsor is a party.
(c) The obligations of each Sponsor under Articles 2 and 4
of this Agreement shall remain in full force and effect until the
later of (i) the date on which (x) payment in full of all
Obligations has been made, and all obligations of the Lenders
under the Loan Documents have terminated or expired, and (y) a
period of one hundred twenty (120) days (or such other period as
may be applicable under applicable bankruptcy, insolvency or
similar laws) has elapsed since the condition set out in clause
(x) is satisfied without any court determining that the Company
is insolvent or, if such determination is made within that time,
the Lenders are reasonably satisfied that no payment made to the
Lenders or the Trustee by the Company will be set aside as a
consequence thereof under any law relating to bankruptcy,
insolvency or similar matters or (ii) the date on which the
obligations to purchase the applicable IFC's shares in the
Company pursuant to Section 3.5(b) of the Shareholders' Agreement
have been satisfied and the outside time by which such
obligations to buy IFC's shares in the Company could exist
pursuant to such Section 3.5(b) has passed.
Section 8.2 No Waivers; Obligations Absolute.
(a) No compromise, alteration, amendment, modification,
extension, renewal, release or other change of, or waiver,
consent or other action in respect of any liability or obligation
under or in respect of, or of any of the terms, covenants or
conditions of, any Loan Document or any other Principal Document,
or any Security, shall in any way alter or affect any of the
obligations hereunder of the Company or any Sponsor (other than a
written waiver of any obligation hereunder executed by the
Lenders).
(b) (i) The obligations of each Sponsor under
this Agreement are absolute and unconditional and
shall not be affected by (x) any default by the
Company in the performance or observance of any of
its agreements or covenants in any Loan Document,
this Agreement or any other Principal Document,
(y) the bankruptcy, insolvency, winding up or
other similar proceeding of the Company or any of
the Sponsors, or (z) any other circumstance,
happening, condition or event whatsoever, whether
or not similar to any of the foregoing. The
obligations of each Sponsor under this Agreement
shall not be subject to any abatement, reduction,
limitation, impairment, termination, set-off,
defense, counterclaim or recoupment whatsoever or
any right to any thereof, and shall not be
released, discharged or in any way affected by any
reorganization, arrangement, compromise,
composition or plan affecting the Company or by
any lack of validity or enforceability of any Loan
Document or any document executed in connection
therewith, whether or not the Sponsors or the
Company shall have notice or knowledge of any of
the foregoing.
(ii) If the obligations of the Sponsors under
Articles 3 and 7 are unenforceable by reason of
the insolvency, bankruptcy or reorganization of
the Company, each Sponsor shall nonetheless pay
directly to the Trustee the amount of each
Deficiency determined in accordance with
Articles 3 and 7 for application by the Trustee in
accordance with the Trust and Retention Agreement.
(c) Each of the Sponsors and the Company hereby irrevocably
waives, to the extent that it may do so under applicable law, any
defense based on the adequacy of a remedy at law which may be
asserted as a bar to the remedy of specific performance in any
action brought against it.
(d) Each of the Sponsors hereby irrevocably waives, to the
extent it may do so under applicable law, any protection to which
it may be entitled under bankruptcy, insolvency or similar laws
of any jurisdiction in the event of a Company Bankruptcy or
insolvency. In the event a trustee in bankruptcy or the debtor-
in-possession takes any action (including without limitation the
institution of any action, suit or other proceeding) in a Company
Bankruptcy or insolvency for the purpose of enforcing the
obligations of the Sponsors under this Agreement, each Sponsor
hereby agrees, to the extent that it may do so under applicable
law, that it will not assert any defense, claim or counterclaim
denying liability thereunder on the basis that this Agreement is
an executory contract that cannot be assumed, assigned or
enforced. If a Company Bankruptcy shall occur, each Sponsor, to
the extent it may do so under applicable law, shall reconfirm its
pre-petition waiver of any protection to which it may be entitled
under any such laws and, to give effect to such waiver, each
Sponsor consents to the assumption and enforcement of each
provision of this Agreement by the debtor-in-possession or the
Company's trustee in bankruptcy, as the case may be.
(e) Notwithstanding anything to the contrary herein, but
subject to the provisions set forth in Exhibit A in the case of
Deficiency Loans, each Sponsor hereby irrevocably waives all
rights of subrogation which may have arisen or may hereafter
arise in connection with this Agreement to the claims of the
Lenders against the Company and all contractual, statutory or
common law rights of reimbursement, contribution or indemnity or
any similar such right from the Company which may otherwise have
arisen in connection with this Agreement, until (x) payment in
full of all Obligations has been made, and all obligations of the
Lenders under the Loan Documents have terminated or expired, and
(y) a period of one hundred twenty (120) days (or such other
period as may be applicable under applicable bankruptcy,
insolvency or similar laws) has elapsed since the condition set
out in clause (x) is satisfied without any court determining that
the Company is insolvent or, if such determination is made within
that time, the Lenders are reasonably satisfied that no payment
made to the Lenders or the Trustee by the Company will be set
aside as a consequence thereof under any law relating to
bankruptcy, insolvency or similar matters.
Section 8.3 Notices. All notices, demands, requests and
other communications provided for hereunder shall be in writing
and shall be deemed to have been given (a) when presented
personally, (b) when sent by overnight courier service, on the
Business Day following the date of delivery to such courier
service, or such later day as demonstrated by a bona fide receipt
therefor, or (c) when transmitted by facsimile, upon
acknowledgement of receipt by the recipient. Any party may
designate from time to time by written notice to the other
parties another address to which notices are to be sent.
For the Company:
Address: Bhote Koshi Power Company Private Limited
KHA-1-960
Kalimati, Tahachal
Kathmandu, Nepal
Attention: Project Manager
Facsimile: 011 977 1 270027
With a copy to:
Address: c/o Panda Energy International, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000 0000
For Panda:
Address: 0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
For Panda Bhote Koshi:
Address: x/x Xxxxxx & Xxxxxx
X. X. Xxx 000
Xxxxxx House, South Church Street
Grand Cayman, Cayman Islands
British West Indies
Attention: Xxxxxx Xxxxxxx
Facsimile: 000 000 0000
With a copy to:
Address: c/o Panda Energy International, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000 0000
For Harza LP:
Address: Sears Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
For RDC Wyoming:
Address: c/o Harza Engineering Company International X.X.
Xxxxx Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
For HIPC:
Address: x/x Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxx
Xxxxx
Attention: Chairman
Facsimile: 011 977-1-272201
For Panda of Nepal:
Address: x/x Xxxxxx & Xxxxxx
X. X. Xxx 000
Xxxxxx House, South Church Street
Grand Cayman, Cayman Islands
British West Indies
Attention: Xxxxxx Xxxxxxx
Facsimile: 000 000 0000
With a copy to:
Address: c/o Panda Energy International, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000 0000
For Harza LLC:
Address: Sears Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
For RDC of Nepal:
Address: x/x Xxxxxx & Xxxxxx
X.X. Xxx 000
Xxxxxx House, South Church Street
Grand Cayman, Cayman Islands
British West Indies
Attention: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Address: c/o Harza Engineering Company International X.X.
Xxxxx Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
For Soaltee Enterprises:
Address: x/x Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxx
Xxxxx
Attention: Chairman
Facsimile: 011 977-1-272201
For Soaltee Hotel:
Address: x/x Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxx
Xxxxx
Attention: Chairman
Facsimile: 011 977-1-272201
For Surya:
Address: x/x Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxx
Xxxxx
Attention: Chairman
Facsimile: 011 977-1-272201
For IFC:
Address: International Finance Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Director, Power Department
Facsimile: (000) 000-0000
For DEG:
Address: DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH
Xxxxxxxxxxxxxxxx 00
X-00000
Xxxxx (Mungersdorf)
Federal Republic of Germany
Attention: Infrastructure Department
Facsimile: 011 49 221 4986-107
Section 8.4 Governing Law Submission to Jurisdiction;
Venue.
(a) This Agreement and the rights and obligations of the
parties hereunder shall be construed in accordance with and be
governed by the law of the State of New York without regard to
the conflicts of laws provisions thereof (other than Sections 5-
1401 and 5-1402 of the General Obligations Law of the State of
New York). Any legal action or proceeding against the Company or
the Sponsors with respect to this Agreement or any Principal
Document to which the Company, any Sponsor or any Lender is a
party may be brought by IFC and/or DEG in the courts of the State
of New York in the Borough of Manhattan or of the United States
for the Southern District of New York and, by execution and
delivery of this Agreement, the Company and each Sponsor hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid
courts. The Company and each Sponsor agrees that a judgment in
any such action or proceeding shall be conclusive and binding
upon it, and may be enforced in any other jurisdiction, including
without limitation in Nepal, by a suit upon such judgment, a
certified copy of which shall be conclusive evidence of the
judgment. The Company and each of the Sponsors hereby
irrevocably designates, appoints and empowers CT Corporation
System with offices on the date hereof at 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and in
respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such
action or proceeding. If for any reason such designee, appointee
and agent shall cease to be available to act as such, the Company
and each Sponsor agrees to designate a new designee, appointee
and agent in New York City on the terms and for the purposes of
this provision satisfactory to the Lenders. The Company and each
Sponsor further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it, at its address set forth
in Section 8.3, such service to become effective ten (10) days
after such mailing. Nothing herein shall affect the right of the
Lenders to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the
Company or any of the Sponsors in Nepal or in any other
jurisdiction.
(b) The Company and each Sponsor hereby irrevocably waives
any objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement or any other Principal
Document to which it is a party brought in the courts referred to
in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any action or
proceeding brought by any of the Lenders in any such court has
been brought in an inconvenient forum.
(c) The Company and each Sponsor acknowledges and agrees
that the activities contemplated by this Agreement are commercial
in nature rather than governmental or public, and therefore
acknowledges and agrees that the right of immunity does not and
will not arise with respect to such activities or in any legal
action or proceeding arising out of or relating to this Agreement
in respect of itself and its properties.
Section 8.5 Successors or Assigns. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto;
provided, however, that, except in connection with a Transfer of
Shares permitted under Section 2.1, neither the Company nor any
Sponsor may assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Lenders. Upon
any assignment and transfer of rights and obligations made in
connection with a Transfer of Shares in accordance with
Section 2.1, the transferring Sponsor shall be released from the
obligation to perform all obligations pertaining to the Shares
which are so Transferred, to the extent the transferee expressly
assumes such obligations pursuant to an assumption agreement in
form and substance reasonably satisfactory to the Lenders.
Notwithstanding any of the foregoing, regardless of whether there
has been any Transfer of Shares, no Sponsor shall be released
from its obligations and liabilities set forth in Article 3 or
Article 7 hereof or Sections 4.2, 4.3 or 4.4 hereof. IFC may
transfer, assign or grant its rights hereunder in connection with
an assignment or transfer of all or any part of its interest in
its Commitment or the IFC Loans and DEG may transfer, assign or
grant its rights hereinunder in connection with an assignment or
transfer of all or any part of it its interest in its Commitment
or the DEG Loan.
Section 8.6 No Waiver; Remedies Cumulative. No failure
or delay on the part of either Lender in exercising any right,
power or privilege hereunder or under any other Loan Document,
and no course of dealing between the Company or any Sponsor and
either Lender, shall impair any such right, power or privilege or
operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any
other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein
or provided in any other Loan Document are cumulative and not
exclusive of any rights, powers or remedies which either Lender
would otherwise have. No notice to or demand on the Company or
any Sponsor in any case shall entitle the Company or any Sponsor
to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of either
Lender to any other or further action in any circumstances
without notice or demand.
Section 8.7 Severability. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability but shall not
invalidate the remaining provisions of this Agreement or affect
such provision in any other jurisdiction.
Section 8.8 Documents. All documents to be furnished or
communications to be given or made under this Agreement shall be
in the English language, or, if in another language, shall be
accompanied by a translation into English certified by a
representative of the Company, the Sponsor or the Lenders, as the
case may be, which translation shall be the governing version
between the Company, each Sponsor and the Lenders.
Section 8.9 Headings Descriptive. The headings of the
several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the meaning
or construction of any provision of this Agreement.
Section 8.10 Amendment or Waiver. Neither this Agreement
nor any of the terms hereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination
is in writing signed by all of the parties hereto.
Section 8.11 Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto
in separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together
constitute one and the same instrument.
Section 8.12 Limitation on Recourse. Notwithstanding
anything to the contrary contained in this Agreement or in any
other Principal Document, the Lenders hereby acknowledge and
agree that no Sponsor shall have any liability to the Lenders or
the Trustee for the payment of any sums now or hereafter owing by
the Company, or any other obligation or liability of the Company,
under any Principal Document to which the Company is a party
except as expressly provided in this Agreement or the other
Principal Documents to which such Sponsor is a party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and acknowledged by their respective
officers or representatives hereunto duly authorized as of the
date first above written.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:
Name:
Title:
PANDA ENERGY INTERNATIONAL, INC.
By:
Name:
Title:
HARZA ENGINEERING COMPANY INTERNATIONAL L.P.
By:
Name:
Title:
HIMAL INTERNATIONAL POWER CORPORATION PVT. LTD.
By:
Name:
Title:
HARZA ENGINEERING COMPANY INTERNATIONAL,
A LIMITED LIABILITY COMPANY
By:
Name:
Title:
PANDA OF NEPAL
By:
Name:
Title:
RDC OF NEPAL
By:
Name:
Title:
PANDA BHOTE KOSHI
By:
Name:
Title:
RESOURCE DEVELOPMENT CONSULTANTS,
A LIMITED LIABILITY COMPANY
By:
Name:
Title:
SOALTEE ENTERPRISES PRIVATE LTD.
By:
Name:
Title:
SOALTEE HOTEL LTD.
By:
Name:
Title:
SURYA ENTERPRISES PRIVATE LTD.
By:
Name:
Title:
INTERNATIONAL FINANCE CORPORATION
By:
Name:
Title:
Authorized Signatory
DEG-DEUTSCHE INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH
By:
Name:
Title:
Authorized Signatory
EXHIBIT A
Terms and Conditions of Deficiency Loans
Section 1. Interest Rate. Subject to the
provisions of Section 7 below, the principal amount of each
Deficiency Loan from time to time outstanding shall bear interest
at the rate of twelve percent (12%) per annum, and any interest
which is not payable due to the provisions of Section 7 shall
accumulate and be automatically deferred to the next following
Interest Payment Date. Any amount of interest so deferred shall
accrue interest at the rate specified herein. Subject to
Section 7, interest shall be paid in U.S. Dollars semi-annually
on each Interest Payment Date and shall accrue interest from day
to day and be prorated on the basis of a 360-day year for the
number of days in the relevant interest period.
Section 2. Repayment. Subject to the provisions of
Section 7, each Deficiency Loan shall be repaid in ten (10) equal
semi-annual installments on Interest Payment Dates, commencing on
the first Interest Payment Date following the expiration of the
date which is twelve months after the Project Completion Date,
and any repayment of principal which is not payable due to the
provisions of Section 7 shall be automatically deferred to the
next following date for repayment of principal.
Section 3. Prepayments. Neither the outstanding
principal amounts of Deficiency Loans nor the accrued interest
(or other amounts owing) thereon may be prepaid or paid (as
applicable), except with funds in the Holding Account or the
Nepal Holding Account, provided, that the outstanding principal
amounts of Deficiency Loans and the accrued interest (or other
amounts owing) thereon shall be prepaid or paid (as applicable)
on (x) the date which is thirty (30) days following the
prepayment or repayment of all Obligations and the termination or
expiration of all obligations of the Lenders under the Loan
Documents and (y) a period of one hundred twenty (120) days (or
such other period as may be applicable under applicable
bankruptcy, insolvency or similar laws) has elapsed since the
condition set out in clause (x) is satisfied without any court
determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters.
Section 4. Payments. All payments of principal of
and interest on Deficiency Loans shall be made in U.S. Dollars,
subject to the provisions of Section 7, on the date when due in
immediately available funds at a bank specified by the Lenders
from time to time. Any payment by the Company shall be without
set-off, deduction or counterclaims of any nature. Whenever any
payment of principal of, or interest on, Deficiency Loans shall
be due on a day which is not a Business Day, the date for payment
thereof shall be extended to the next succeeding Business Day.
Section 5. Taxes. Subject to Section 7, the
Company shall pay or cause to be paid all present and future
taxes, duties, fees and other charges of whatsoever nature, if
any, now or at any time hereafter levied or imposed by HMGN or by
any department, agency, political subdivision, taxing or other
authority thereof or therein or by any organization of which
Nepal is a member on or in connection with the payment of any
amounts hereunder, and all amounts due in respect of Deficiency
Loans shall be made without deduction for or on account of any
such taxes, duties, fees and other charges; provided, however,
that in the event the Company is prevented by operation of law or
otherwise from paying or causing to be paid such taxes, duties,
fees or other charges as aforesaid, the principal, or interest
due in respect of Deficiency Loans shall be increased to such
amount as may be necessary to yield and remit to the applicable
Sponsor the full amount it would have received had such payments
been made without deduction of such taxes, duties, fees or other
charges.
Section 6. Events of Default and Remedies.
(a) The Events of Default specified in Article 7 of
the General Conditions of the Investment Agreement are
incorporated by reference herein as if fully set forth herein,
provided that prior to the payment in full of all Obligations
owing to the Lenders under the Loan Documents and termination or
expiration of all obligations of the Lenders thereunder, the
Deficiency lenders may not declare an Event of Default or declare
the unpaid principal amount of any Deficiency Loans and interest
accrued thereon immediately due and payable as a result of any
Event of Default; provided that any delay or forbearance of its
right to declare the amount of its Deficiency Loans and interest
accrued thereon due and payable shall not constitute a waiver of
such rights as between the Deficiency lender and the Company
(subject to the provisions of Section 7).
(b) If an Event of Default specified in Article 7.1(k)
of the General Conditions shall have occurred, the unpaid
principal amount of Deficiency Loans made by each Deficiency
lender and the accrued interest thereon shall be automatically
converted to equity interests in the Company, and no Deficiency
lender thereafter shall have or shall exercise any rights or
remedies as a lender to or creditor of the Company.
Section 7. Subordination.
(a) Anything in this Agreement to the contrary
notwithstanding, the Deficiency lenders and the Company hereby
agree that all Deficiency Loans and interest thereon and all
other amounts payable in respect thereof are and shall be
subordinate, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full in cash
of all Obligations of the Company now or hereafter existing under
the Loan Documents, whether for principal, interest (including
without limitation Post-petition Interest), fees, expenses or
otherwise.
(b) No payment of principal, interest or any other
amount owing by the Company in respect of the Deficiency Loans
shall be made by the Company except from funds on deposit in the
Holding Account or the Nepal Holding Account.
(c) In the event of any liquidation, dissolution or
other proceeding for the winding-up of the Company, or in the
event of any proceeding for receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization or
arrangement with creditors, whether or not pursuant to the
bankruptcy or similar laws of any jurisdiction, or the sale of
all or substantially all of the assets or any other marshaling or
ranking or ordering by an administrator of the assets and
liabilities of the Company, the Deficiency lenders shall have no
rights or interest other than as equity participants in the
Company and (a) amounts due and owing with respect to the
Obligations under the Loan Documents shall first be paid in full
in cash to the Lenders before the Deficiency lenders shall be
entitled to receive any payment on account of its interests in
the Company, whether in cash, securities or other assets, and (b)
at the request of the Lenders, the Deficiency lenders will file
documents or instruments necessary or advisable to give effect to
these subordination provisions and will hold in trust for the
holders of the Obligations under the Loan Documents and pay over
to the Trustee, in the form received, to be applied to the
payment of the Obligations under the Loan Documents (including,
without limitation, Post-petition Interest), any and all cash,
securities or other assets received on account of their
interests, unless and until (x) payment in full of all
Obligations has been made, and all obligations of the Lenders
under the Loan Documents have terminated or expired, and (y) a
period of one hundred twenty (120) days (or such other period as
may be applicable under applicable bankruptcy, insolvency or
similar laws) has elapsed since the condition set out in clause
(x) is satisfied without any court determining that the Company
is insolvent or, if such determination is made within that time,
the Lenders are reasonably satisfied that no payment made to the
Lenders or the Trustee by the Company will be set aside as a
consequence thereof under any law relating to bankruptcy,
insolvency or similar matters. In the event that the Deficiency
lenders shall fail to take such action requested by the Lenders,
IFC and/or DEG may, as attorney-in-fact for the Deficiency
lenders, take such action on behalf of the Deficiency lenders,
and the Deficiency lenders hereby appoint each of the Lenders as
attorney-in-fact for the Deficiency lenders to demand, xxx for,
collect and receive any and all such cash, securities or other
assets and give acquittance therefor and to file any instrument
and to take such other action in the name of IFC and/or DEG or
in the name of the Deficiency lenders as IFC and/or DEG may deem
necessary or advisable for the enforcement of this Agreement; and
the Deficiency lenders will execute and deliver to each of the
Lenders such other and further powers of attorney or other
instruments as may be requested in order to accomplish the
foregoing. Anything in this Agreement to the contrary
notwithstanding, no payment or delivery shall be made to the
Deficiency lenders of securities or other obligations which are
issued upon any merger, consolidation, sale, lease, transfer or
other disposal by any corporation succeeding to the Company or
acquiring the Company's property and assets, unless such
securities or obligations are subordinate and junior at least to
the extent provided in this Agreement to the payment in full in
cash of all Obligations under the Loan Documents and to the
payment of any stock or obligations which are issued in exchange
or substitution for any such Obligations.
(d) The Deficiency lenders will not take any action,
or commence any action or proceeding against the Company, to
recover all or any part of the Deficiency Loans, or join with any
creditor in bringing any proceedings against the Company under
any bankruptcy or similar laws of any jurisdiction to recover all
or any part of the Deficiency Loans, unless and until (x) payment
in full of all Obligations has been made, and all obligations of
the Lenders under the Loan Documents have terminated or expired,
and (y) a period of one hundred twenty (120) days (or such other
period as may be applicable under applicable bankruptcy,
insolvency or similar laws) has elapsed since the condition set
out in clause (x) is satisfied without any court determining that
the Company is insolvent or, if such determination is made within
that time, the Lenders are reasonably satisfied that no payment
made to the Lenders or the Trustee by the Company will be set
aside as a consequence thereof under any law relating to
bankruptcy, insolvency or similar matters, except that, at the
request of the Lenders, the Deficiency lenders will join with the
Lenders in bringing proceedings against the Company under
bankruptcy, winding up or similar laws.
(e) In the event that any Deficiency lender shall
receive any payment, whether in cash, securities or other
property, on account of the Deficiency Loans which such
Deficiency lender is not entitled to receive under the provisions
of paragraphs (b), (c) or (d) hereof, such Deficiency lender will
hold any amount so received in trust for the Lenders and will
forthwith turn over such payment to the Trustee in the form
received to be applied to the payment of the Obligations under
the Loan Documents.
(f) Either Lender may, at any time and from time to
time, without the consent of or notice to the Deficiency lenders,
without incurring responsibility to the Deficiency lenders, and
without impairing or releasing any of the rights of the Lenders,
or any of the obligations of the Deficiency lenders, hereunder:
(i) Agree to change the amount, manner,
place or terms of payment or change or extend
the time of payment of or renew or alter any
Obligations under the Loan Documents or amend
the Loan Documents in any manner or enter
into or amend in any manner any other
agreements relating to such Obligations (but
not so as to restrict further the payment of
the Deficiency Loans);
(ii) Sell, exchange, release or
otherwise deal with any property by
whomsoever at any time pledged or mortgaged
to secure, or howsoever securing, such
Obligations;
(iii) Release anyone liable in any manner
for the payment or collection of such
Obligations;
(iv) Exercise or refrain from exercising
any rights against the Company and others
(including the Deficiency lenders); and
(v) Apply any sums by whomsoever paid
or howsoever realized to such Obligations.
(g) The Deficiency lenders and the Company shall xxxx
their books to reflect that the Deficiency Loans are subordinated
to the Obligations under the Loan Documents.
EXHIBIT B
Instructions to Bankers Trust Company
[Date]
Bankers Trust Company
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
International Finance Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH
Xxxxxxxxxxxxxxxx 00
X-00000
Xxxxx (Mungersdorf)
Federal Republic of Germany
Re: Upper Bhote Koshi Hydroelectric Project
Gentlemen:
We hereby irrevocably authorize and request that upon
delivery by International Finance Corporation ("IFC") or DEG-
Deutsche Investitions-und Entwicklungsgesellschaft mbH ("DEG") to
Panda Energy International, Inc. ("Panda") and Bankers Trust
Company, as trustee for the Issuer Equity Distribution Fund and
the Company Equity Distribution Fund ("Bankers Trust") of a
Deficiency Notice or a Guarantee Notice pursuant to the Share
Retention and Project Funds Agreement among Bhote Koshi Power
Company Private Limited, Panda, IFC and DEG among others, and
subject to the requirements of Sections 4.7(a)(i) and 4.7(b) of
the Panda Global Energy Indenture and Sections 4.5(a)(i) and
4.5(b) of the Panda Global Holdings Indenture (including, without
limitation, receipt of an Officer's Certificate as provided
therein), Bankers Trust transfer monies in the Issuer Equity
Distribution Fund and the Company Equity Distribution Fund
pursuant to Section 4.7(a)(ii) of the Panda Global Energy
Indenture and Section 4.5(a)(ii) of the Panda Global Holdings
Indenture into such accounts and in such amounts as directed by
IFC or DEG. A copy of the Share Retention and Project Funds
Agreement is attached hereto.
This irrevocable instruction is intended to benefit,
and to be relied upon by, IFC, DEG and their respective
successors, assigns and participants.
Yours truly,
Panda Global Energy Company
Panda Global Holdings, Inc.
EXHIBIT C
Permitted Uses of Issuer Equity Distribution Fund and Company
Equity Distribution Fund
1. Under Section 4.7(a) of the Global Energy Indenture, the
Trustee is irrevocably authorized, from moneys then on
deposit in the Issuer Equity Distribution Fund, to pay any
deficiency in an Issuer Fund pursuant to Section 4.14 of the
Global Energy Indenture. Section 4.14(a) of the Global
Energy Indenture requires the Trustee, in the event on any
Payment Date with respect to the Senior Secured Notes, the
moneys available to the Issuer in the Senior Secured Notes
Interest Account are not sufficient to pay in full the
interest (including Liquidated Damages and Additional
Amounts, if any) with respect to the Senior Secured Notes,
to withdraw moneys from certain funds as set forth therein,
including the Issuer Equity Distribution Fund, and to notify
the Trustee under the Global Holdings Indenture (which is
also Bankers Trust Company) in order that such Trustee shall
provide moneys pursuant to the terms of the Global Holdings
Indenture and the Senior Secured Notes Guarantee, for the
correction of such deficiency. Section 4.14(b) of the
Global Energy Indenture requires the Trustee, in the event
on any Payment Date with respect to the Senior Secured
Notes, the moneys available to the Issuer in the Senior
Secured Notes Principal Account are not sufficient to pay in
full the principal and premium, if any, with respect to the
Senior Secured Notes, to withdraw moneys from certain funds
as set forth therein, including the Issuer Equity
Distribution Fund, and to notify the Trustee under the
Global Holdings Indenture in order that such Trustee shall
provide moneys pursuant to the terms of the Global Holdings
Indenture and the Senior Secured Notes Guarantee, for the
correction of such deficiency. Section 3.3 of the Global
Energy Indenture establishes a reserve fund designated the
"Senior Secured Notes Debt Service Reserve Fund," the
funding requirements for which and uses thereof are set
forth in Section 4.3 of the Global Energy Indenture.
2. Under Section 4.5(a) of the Global Holdings Indenture, the
Trustee is irrevocably authorized, from moneys then on
deposit in the Company Equity Distribution Fund, to pay any
deficiency in a fund pursuant to Section 4.7 of the Global
Holdings Indenture. Section 4.7 of the Global Holdings
Indenture requires the Trustee, in the event on any Payment
Date with respect to the Senior Secured Notes, the moneys
available to Panda Global Energy in the Issuer Funds are
insufficient to make a payment of principal, premium, if
any, or interest (including Liquidated Damages and
Additional Amounts, if any) with respect to the Senior
Secured Notes, to withdraw moneys from certain funds as set
forth therein, including the Company Equity Distribution
Fund. Section 3.3 of the Global Holdings Indenture
establishes a reserve fund designated the "Notes Guarantee
Service Reserve Fund," the requirements for which and uses
thereof are set forth in Section 4.3 of the Global Holdings
Indenture.
3. Under Section 7.25 of the Global Energy Indenture and the
Global Holdings Indenture, Panda Global Energy and Panda
Global Holdings, respectively, and their Subsidiaries are
permitted to make certain types of Investments, including,
without limitation, Investments in Permitted Projects
(including Permitted Projects which are not wholly owned by
Panda Global Energy or Panda Global Holdings, as the case
may be). The Indenture defines "Investments" to include,
among other things, direct or indirect loans, advances and
capital contributions. Under Section 7.14 of the Global
Energy Indenture and the Global Holdings Indenture, Panda
Global Energy and Panda Global Holdings, respectively, and
their Subsidiaries are permitted to make capital
expenditures as specified therein, including with respect to
the Luannan, Xxxxxxxx and Brandywine Facilities and in
connection with Permitted Projects. Under Section 7.24 of
the Global Energy Indenture and the Global Holdings
Indenture, Panda Global Energy and Panda Global Holdings,
respectively, and their Subsidiaries are permitted to engage
in transactions with Affiliates as specified therein,
including without limitation, the making of payments
pursuant to the Administrative Services Agreement and the
Development Services Agreement. Under Section 7.19 of the
Global Energy Indenture and the Global Holdings Indenture,
Panda Global Energy and Panda Global Holdings, respectively,
and their Subsidiaries are permitted to engage in sale and
leaseback transactions as specified therein. Under Section
7.15 of the Global Energy Indenture and the Global Holdings
Indenture, Panda Global Energy and Panda Global Holdings,
respectively, and their Subsidiaries are permitted to
develop, construct, own, operate and finance Permitted
Projects. Under Section 7.12 of the Global Energy Indenture
and the Global Holdings Indenture, respectively, Panda
Global Energy and Panda Global Holdings, respectively, and
their Subsidiaries are permitted to incur certain
Indebtedness as specified therein. Pursuant to Section
4.7(a)(ii) of the Global Energy Indenture and Section
4.5(a)(ii) of the Global Holdings Indenture, respectively,
funds in the Issuer Equity Distribution Fund and the Company
Equity Distribution Fund may be used for any of the
foregoing purposes.
