EXHIBIT 10.74
$105,525,000
Panda Funding Corporation
11-5/8% Pooled Project Bonds, Series A due 2012
PURCHASE AGREEMENT
July 26, 1996
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Panda Funding Corporation, a Delaware corporation ("PFC"),
proposes, upon the terms and conditions set forth in this
Purchase Agreement (this "Agreement"), to issue and sell to
Xxxxxxxxx & Company, Inc. (the "Initial Purchaser"), $105,525,000
aggregate principal amount of its 11-5/8%% Pooled Project Bonds,
Series A due 2012 (the "Bonds"). The Bonds will be issued
pursuant to the provisions of a Trust Indenture, to be dated as
of July 31, 1996 (the "Indenture"), among PFC, Panda Interfunding
Corporation, a Delaware corporation, which will be the sole
stockholder of PFC on the Closing Date (the "Company" and,
together with PFC, the "Issuers"), and Bankers Trust Company, as
Trustee (the "Trustee"). The Bonds will be unconditionally and
irrevocably guaranteed as to principal, premium, if any, and
interest by the Company pursuant to the Company Guaranty (the
"Company Guaranty" and, together with the Bonds, the
"Securities"). Capitalized terms used but not defined herein
have the meanings assigned to them in the Indenture. Capitalized
terms used but not defined herein or in the Indenture have the
meanings assigned to them in the Offering Circular (defined
below).
PFC, the Company and Panda Energy International, Inc., a
Texas corporation ("Panda International"), wish to confirm as
follows their agreement with the Initial Purchaser in connection
with the purchase and resale of the Securities.
1. Preliminary Offering Circular and Offering Circular.
The Securities will be offered and sold to the Initial Purchaser
without registration under the Securities Act of 1933, as amended
(the "Act"), in reliance on an exemption pursuant to Section 4(2)
under the Act. The Issuers have prepared a preliminary Offering
Circular, dated July 5, 1996 (the "Preliminary Offering
Circular"), and an Offering Circular, dated July 26, 1996 (the
"Offering Circular"), setting forth information regarding the
Issuers and the Securities. Any references herein to the
Preliminary Offering Circular and the Offering Circular shall be
deemed to include all amendments and supplements thereto. The
Issuers hereby confirm that they have authorized the use of the
Preliminary Offering Circular and the Offering Circular in
connection with the offering and resale of the Securities by the
Initial Purchaser.
The Issuers understand that the Initial Purchaser proposes
to make offers and sales (the "Exempt Resales") of the Securities
purchased by the Initial Purchaser hereunder only on the terms
and in the manner set forth in the Offering Circular and
Section 2 hereof, as soon as the Initial Purchaser deems
advisable after this Agreement has been executed and delivered,
(a) to persons whom the Initial Purchaser reasonably believes to
be qualified institutional buyers ("Qualified Institutional
Buyers") as defined in Rule 144A under the Act, as such rule may
be amended from time to time ("Rule 144A"), in transactions
satisfying the conditions set forth in Rule 144A and (b) to a
limited number of other institutional "accredited investors," as
defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of
the Act ("Accredited Investors"), in private sales exempt from
registration under the Act (such persons specified in clauses (a)
and (b) being referred to herein as the "Eligible Purchasers").
It is understood and acknowledged that upon original
issuance thereof, and until such time as the same is no longer
required under the applicable requirements of the Act, each of
the Bonds (and each security issued in exchange therefor or in
substitution thereof) shall bear a legend substantially the same
as the following legend:
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (i) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER REGULATION D OF
THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR"), (ii) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS BOND RESELL
OR OTHERWISE TRANSFER THIS BOND EXCEPT (A) TO PANDA
FUNDING CORPORATION, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO BANKERS TRUST
COMPANY, AS TRUSTEE, OR ITS SUCCESSOR TRUSTEE, A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS BOND (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES TO
FOREIGN PURCHASERS IN OFFSHORE TRANSACTIONS MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(iii) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS BOND IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS BOND WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS BOND, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THE
CERTIFICATE TO BANKERS TRUST COMPANY, AS SECURITIES
REGISTRAR. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO PANDA FUNDING
CORPORATION, PANDA INTERFUNDING CORPORATION AND BANKERS
TRUST COMPANY, AS TRANSFER AGENT, SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL
BE REMOVED AFTER THE EXPIRATION OF THREE YEARS FROM THE
ORIGINAL ISSUANCE OF THIS BOND. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM IN
REGULATION S UNDER THE SECURITIES ACT.
It is also understood and acknowledged that holders
(including subsequent transferees) of the Securities will have
the registration rights set forth in the registration rights
agreement (the "Registration Rights Agreement") substantially in
the form attached hereto as Exhibit A, to be dated the date
hereof among the Issuers and the Initial Purchaser.
2. Agreements to Sell, Purchase and Resell. (a) The
Issuers hereby agree, subject to the terms and conditions set
forth herein, to issue and sell to the Initial Purchaser and,
upon the basis of the representations, warranties and agreements
of the Issuers and Panda International contained herein and
subject to the terms and conditions set forth herein, the Initial
Purchaser agrees to purchase from the Issuers, at a purchase
price of 98% of the principal amount thereof, $105,525,000
principal amount of Bonds (together with the Company Guaranty).
(b) The Initial Purchaser has advised the Issuers that
it proposes to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and in the Offering
Circular. The Initial Purchaser hereby represents and warrants
to, and agrees with, the Issuers that the Initial Purchaser
(i) is an Accredited Investor, (ii) will not solicit offers for,
or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of
Rule 502(c) under the Act and (iii) will solicit offers for the
Securities only from, and will offer, sell or deliver the
Securities, as part of their initial offering, only to
(A) persons whom the Initial Purchaser reasonably believes to be
Qualified Institutional Buyers or, if any such person is buying
for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has
represented to the Initial Purchaser that each such account is a
Qualified Institutional Buyer, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and,
in each case, in transactions entered into in reliance upon the
exemption from the registration requirements of the Act set forth
in Rule 144A and (B) to a limited number of other institutional
investors who represent to the Initial Purchaser that they are
Accredited Investors. The Initial Purchaser has advised the
Issuers that it will offer the Securities at a price initially
equal to 100% of the principal amount thereof, plus accrued
interest, if any, from the date of issuance of the Securities.
Such price may be changed by the Initial Purchaser at any time
thereafter without notice.
3. Delivery of the Securities and Payment Therefor.
Delivery to the Initial Purchaser of and payment for the
Securities (the "Closing") shall be made at the office of
Xxxxxxxxx & Company, Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at 10:00 a.m., New York City time, on July 31, 1996 (the "Closing
Date"). The place of the Closing and the Closing Date may be
varied by agreement among the Initial Purchaser and the Issuers.
The Securities will be delivered to the Initial Purchaser
against payment of the purchase price therefor by means of a wire
transfer of same day funds in accordance with written
instructions from PFC. The Issuers will reimburse the Initial
Purchaser for its costs of obtaining such same day funds. The
Securities will be evidenced by a single global security in
definitive form (the "Global Security") and/or by additional
certificated securities, and will be registered, in the case of a
Global Security, in the name of Cede & Co. as nominee of The
Depository Trust Company ("DTC"), and in the other cases, in such
names and in such denominations as the Initial Purchaser shall
request prior to 9:30 a.m., New York City time, on the second
business day preceding the Closing Date. The Securities to be
delivered to the Initial Purchaser shall be made available to the
Initial Purchaser in New York City for inspection and packaging
not later than 9:30 a.m., New York City time, on the business day
next preceding the Closing Date.
4. Agreements of the Issuers and Panda International. The
Issuers and Panda International agree with the Initial Purchaser
as follows:
(a) Until the completion of the distribution of the
Securities by the Initial Purchaser to Eligible Purchasers, the
Issuers and Panda International will advise the Initial Purchaser
promptly, and if requested by the Initial Purchaser, will
promptly confirm such advice in writing of any change in the
condition (financial or other), business, prospects, properties
or results of operations of PFC, the Company and any of the
Projects described in the Offering Circular, or of the happening
of any event or the existence of any condition which requires any
amendment or supplement to the Offering Circular so that the
Offering Circular (x) will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading or (y) will comply with applicable law.
(b) The Issuers will furnish to the Initial Purchaser,
without charge, as of the date of the Offering Circular, such
number of copies of the Offering Circular as may then be amended
or supplemented as the Initial Purchaser may request.
(c) The Issuers will not make any amendment or supple
ment to the Preliminary Offering Circular or to the Offering
Circular of which the Initial Purchaser shall not previously have
been advised or to which the Initial Purchaser shall reasonably
object after being so advised.
(d) Prior to the execution and delivery of this
Agreement, the Issuers have delivered, and after the date hereof
the Issuers will deliver, to the Initial Purchaser, without
charge, in such quantities as the Initial Purchaser has requested
or may request, copies of the Preliminary Offering Circular. The
Issuers consent to the use, in accordance with the securities or
Blue Sky laws of the jurisdictions in which the Securities are
offered by the Initial Purchaser and by dealers, prior to the
date of the Offering Circular, of each Preliminary Offering
Circular so furnished by the Issuers. The Issuers consent to the
use of the Offering Circular in accordance with the securities or
Blue Sky laws of the jurisdictions in which the Securities are
offered by the Initial Purchaser and by all dealers to whom
Securities may be sold, in connection with the offering and sale
of the Securities.
(e) If, at any time prior to completion of the
distribution of the Securities by the Initial Purchaser to
Eligible Purchasers, any event shall occur or otherwise exist
that in the judgment of the Issuers or in the opinion of the
Initial Purchaser should be set forth in the Offering Circular so
that the Offering Circular (x) will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading or (y) will comply with applicable law, the
Issuers will forthwith prepare an appropriate supplement or
amendment thereto, and will expeditiously furnish to the Initial
Purchaser the number of copies thereof as the Initial Purchaser
shall reasonably request.
(f) The Issuers will cooperate with the Initial
Purchaser and with its counsel in connection with the
qualification of the Securities for offering and sale by the
Initial Purchaser and by dealers under the securities or Blue Sky
laws of such jurisdictions as the Initial Purchaser may designate
and will file such consents to service of process or other
documents necessary or appropriate in order to effect such
qualification; provided that in no event shall the Issuers be
obligated to qualify to do business in any jurisdiction where
they are not now so qualified or to take any action which would
subject them to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where they are not now so subject.
(g) For a period of three years beginning on the date
of this Agreement, the Issuers will furnish to the Initial
Purchaser (i) as soon as available, a copy of each report of the
Issuers mailed to stockholders or filed with the Securities and
Exchange Commission (the "Commission") and (ii) from time to time
such other information concerning the Issuers as the Initial
Purchaser may reasonably request.
(h) The Issuers and Panda International will apply the
net proceeds from the sale of the Securities in accordance with
the description set forth under "Use of Proceeds" in the Offering
Circular.
(i) Without the prior consent of the Initial
Purchaser, prior to the expiration of 180 days after the date of
the Offering Circular, neither of the Issuers will offer, sell,
contract to sell or otherwise dispose of any fixed income
obligation having a maturity of more than one year, other than
fixed income obligations issued under the Indenture.
(j) Neither of the Issuers or Panda International have
taken, nor will they take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of the Securities.
Except as permitted by the Act, neither of the Issuers or Panda
International will distribute any offering material in connection
with the offering and sale of the Securities or Exempt Resales
other than the Offering Circular. Neither of the Issuers or
Panda International will solicit any offers to buy or offers to
sell the Securities by means of any form of general solicitation
or general advertising (within the meaning of Rule 502(c) under
the Act).
(k) From and after the Closing Date, so long as any of
the Securities are outstanding and are "restricted securities"
within the meaning of the Rule 144(a)(3) under the Act or, if
earlier, until three years after the Closing Date, and during any
period in which the Issuers are not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Issuers will furnish to holders of the
Securities and prospective purchasers of Securities designated by
such holders, upon request of such holders or such prospective
purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Act to permit compliance with Rule 144A
in connection with resales of the Securities.
(l) The Issuers have complied, and will continue to
comply in connection with the Exempt Resales, with all provisions
of Florida Statutes Section 517.075 relating to the Issuers doing
business with Cuba.
(m) The Issuers agree to not sell, offer for sale or
solicit offers to buy or otherwise negotiate with respect to any
security (as defined in the Act) that could be integrated with
the sale of the Securities in a manner that could require the
registration under the Act of the sale of the Securities by the
Issuers to the Initial Purchaser or by the Initial Purchaser to
the Eligible Purchasers.
(n) The Issuers agree to comply with all of the terms
and conditions of the Registration Rights Agreement and all
agreements set forth in the representation letters of the Issuers
to DTC relating to the approval of the Securities by DTC for
"book entry" transfer.
(o) The Issuers agree that, prior to any registration
of the Securities pursuant to the Registration Rights Agreement,
or at such earlier time as may be so required, the Indenture
shall be qualified under the Trust Indenture Act of 1939 (the
"1939 Act") and they will cause to be entered into any necessary
supplemental indentures in connection therewith.
5. Representations and Warranties of the Issuers and Panda
International. The Issuers and Panda International, jointly and
severally, represent and warrant to the Initial Purchaser that:
(a) The Preliminary Offering Circular and Offering
Circular with respect to the Securities have been prepared by the
Issuers for use by the Initial Purchaser in connection with the
Exempt Resales. No order or decree preventing the use of the
Preliminary Offering Circular or the Offering Circular, or any
order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the
Act, has been issued and no proceeding for that purpose has
commenced or is pending or, to the knowledge of the Issuers and
Panda International, is contemplated.
(b) The Preliminary Offering Circular and the Offering
Circular as of their respective dates and the Offering Circular
as of the Closing Date, did not or will not at any time contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, except that this representation
and warranty does not apply to statements in or omissions from
the Preliminary Offering Circular and Offering Circular made in
reliance upon and in conformity with information relating to the
Initial Purchaser furnished to the Issuers in writing by or on
behalf of the Initial Purchaser expressly for use therein, and
PFC, the Company and Panda International agree that the only such
information provided in writing by or on behalf of the Initial
Purchaser, expressly for use in the Preliminary Offering Circular
or Offering Circular, is that information contained in the
section entitled "Plan of Distribution."
(c) The Indenture has been duly and validly authorized
by each of the Issuers and, upon its execution and delivery by
the Issuers and assuming due authorization, execution, delivery
and performance by the Trustee, will be a valid and binding
agreement of each of the Issuers, enforceable against each of the
Issuers in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar
laws affecting creditors' rights generally and subject to the
applicability of general principles of equity; no qualification
of the Indenture under the 1939 Act is required in connection
with the offer and sale of the Securities contemplated hereby or
in connection with the Exempt Resales; and the Indenture conforms
in all material respects to the description thereof in the
Offering Circular.
(d) The Bonds and the Company Guaranty have been duly
authorized by PFC and the Company, respectively, and, when
executed and delivered by PFC and the Company, respectively, and,
in the case of the Bonds, authenticated by the Trustee in
accordance with the Indenture and delivered to the Initial
Purchaser against payment therefor in accordance with the terms
hereof, will have been validly issued and delivered, and will
constitute valid and binding obligations of PFC and the Company,
respectively, entitled to the benefits set forth in the Indenture
and enforceable against the Issuers in accordance with their
respective terms, and on the Closing Date the issuance and sale
of the securities to be exchanged for the Securities (the
"Exchange Securities") will have been duly authorized by PFC and
the Company and, when issued, authenticated and delivered in
accordance with the terms of the Indenture and the Registration
Rights Agreement, the Exchange Securities will constitute valid
and legally binding obligations of PFC and the Company, and will
be entitled to the benefits provided in the Indenture and
enforceable in accordance with their terms, except in each case
as enforcement thereof may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditors'
rights generally and subject to the applicability of general
principles of equity; and the Securities conform in all material
respects to the description thereof in the Offering Circular.
(e) PFC is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Offering Circular, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature or location of its
properties (owned or leased) or the conduct of its business
requires such registration or qualification, except where the
failure to so register or qualify would not have an adverse
effect on the condition (financial or other), business,
prospects, properties or results of operations of PFC, the
Company, or any subsidiary of the Company that is or would be,
singly or in the aggregate, material to PFC, the Company and any
such subsidiary, taken as a whole, whether or not occurring in
the ordinary course of business (a "Material Adverse Effect").
PFC does not own or hold any capital stock or any other equity
securities of any corporation or have any equity interest in any
firm, partnership, association or other entity. The authorized
capital stock of PFC consists of 1,000 shares of Common Stock,
par value $0.01 per share, all of which is issued and
outstanding. All of PFC's issued and outstanding shares of
capital stock are owned by the Company and have been duly
authorized and validly issued, are fully paid and non-assessable
and are not subject to any preemptive or similar rights. All
such capital stock is free and clear of any Lien and upon Closing
will be free and clear of any Lien except for the restrictions
under the Indenture and the Liens created by the Company Stock
Pledge Agreement. PFC does not have outstanding any securities
convertible into or exchangeable for any of its capital stock or
any rights to subscribe for or to purchase, or any warrants or
options for the purchase of, or any agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments
or claims of any character relating to, any such capital stock.
(f) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Offering Circular, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature or location of its
properties (owned or leased) or the conduct of its business
requires such registration or qualification, except where the
failure to so register or qualify would not have a Material
Adverse Effect. The authorized capital stock of the Company
consists of 1,000 shares of Common Stock, par value $0.01 per
share, all of which will be issued and outstanding at the
Closing. All of the Company's issued and outstanding shares of
capital stock are owned by PEC and have been duly authorized and
validly issued, are fully paid and non-assessable and are not
subject to any preemptive or similar rights. All such capital
stock is free and clear of any Lien and upon Closing will be free
and clear of any Lien except for the restrictions under the
Indenture and the Liens created by the PEC Stock Pledge
Agreement. The Company does not have outstanding any securities
convertible into or exchangeable for any of its capital stock or
any rights to subscribe for or to purchase, or any warrants or
options for the purchase of, or any agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments
or claims of any character relating to, any such capital stock.
(g) PEC is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Texas, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described
in the Offering Circular, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction
or place where the nature or location of its properties (owned or
leased) or the conduct of its business requires such registration
or qualification, except where the failure to so register or
qualify would not have a Material Adverse Effect. All of PEC's
issued and outstanding shares of capital stock are owned by Panda
International and have been duly authorized and validly issued.
(h) Panda International is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Texas, with full corporate power and
authority to own, lease and operate its properties and to conduct
its business as presently conducted or as proposed to be
conducted, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place
where the nature or location of its properties (owned or leased)
or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify
would not have a Material Adverse Effect.
(i) Panda-Brandywine, L.P. ("PBLP") is a limited
partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full partnership
power and authority to own, lease and operate its properties and
to conduct its business as described in the Offering Circular,
and is duly registered and qualified to conduct its business and
is in good standing in each jurisdiction or place where the
nature or location of its properties (owned or leased) or the
conduct of its business requires such registration or
qualification, except where the failure to so register or qualify
would not have a Material Adverse Effect. All the partnership
interests in PBLP have been duly and validly authorized and
issued and Panda-Brandywine Corporation, a Delaware corporation
("PBC"), owns the sole general partner interest in the
Partnership and Panda Energy Corporation, a Delaware corporation
("PECD"), owns the sole limited partner interest in PBLP, free
and clear of any Lien on such general or limited partner
interests except for restrictions under the partnership agreement
of PBLP and Liens under the Brandywine Financing Documents. PBLP
does not have outstanding any certificates or securities that
evidence interests in PBLP, or any securities convertible into or
exchangeable for any of its partnership interests or any rights
to subscribe for or to purchase, or any warrants or options for
the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, any such partnership interests
except for those rights established by the partnership agreement
of PBLP and the Liens under the Brandywine Financing Documents.
PBLP does not own or hold any capital stock or any other
securities of any corporation or have any equity interest in any
firm, partnership, association or other entity.
(j) PBC is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease
and operate its properties as presently conducted or as proposed
to be conducted, and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or
place where the nature or location of its properties (owned or
leased) or the conduct of its business requires such registration
or qualification, except where the failure to so register or
qualify would not have a Material Adverse Effect. PBC is the
sole general partner of PBLP. PBC does not conduct any business
or participate in any activities other than those necessary to
perform its duties and obligations as the sole general partner of
PBLP. The authorized capital stock of PBC consists of 1,000
shares of Common Stock, par value $0.01 per share, all of which
are issued and outstanding and owned by PEC. Upon Closing, all
of such shares will be owned by Panda Interholding Corporation, a
Delaware corporation ("Interholding"). All of the outstanding
shares of capital stock of PBC have been duly authorized and
validly issued, are fully paid and non-assessable and are not
subject to any preemptive or similar rights. Such capital stock
is free and clear of any Lien except for the Liens under the
Brandywine Financing Documents. PBC does not have outstanding
any securities convertible into or exchangeable for any of its
capital stock or any rights to subscribe for or to purchase, or
any warrants or options for the purchase of, or (except for the
Liens under the Brandywine Financing Documents) any agreements
providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, any
such capital stock. Except for the general partner interest in
the Panda-Brandywine Partnership, PBC does not own or hold any
capital stock or any other securities of any corporation or have
any equity interest in any firm, partnership, association or
other entity.
(k) PECD is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease
and operate its properties as presently conducted or as proposed
to be conducted, and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or
place where the nature or location of its properties (owned or
leased) or the conduct of its business requires such registration
or qualification, except where the failure to so register or
qualify would not have a Material Adverse Effect. PECD is the
sole limited partner of PBLP. PECD does not conduct any business
or participate in any activities other than those necessary to
perform its duties and obligations as a limited partner of PBLP.
The authorized capital stock of PECD consists of 1,000 shares of
Common Stock, par value $0.01 per share, all of which are issued
and outstanding and owned by PEC. Upon Closing, all of such
issued and outstanding shares will be owned by Interholding. All
of the outstanding shares of capital stock of PECD have been duly
authorized and validly issued, are fully paid and non-assessable
and are not subject to any preemptive or similar rights. Such
capital stock will be free and clear of any Lien except for the
Liens under the Brandywine Financing Documents. PECD does not
have outstanding any securities convertible into or exchangeable
for any of its capital stock or any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise)
of, or (except for the Liens under the Brandywine Financing
Documents) any calls, commitments or claims of any character
relating to, any such capital stock. Except for its limited
partner interest in PBLP, PECD does not own or hold any capital
stock or any other securities of any corporation or have any
equity interest in any firm, partnership, association or other
entity.
(l) Brandywine Water Company ("BWC") is a corporation
duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, with full corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Offering Circular, and is duly
registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature or
location of its properties (owned or leased) or the conduct of
its business requires such registration or qualification, except
where the failure to so register or qualify does not have a
Material Adverse Effect. The authorized capital stock of the
Company consists of 1,000 shares of Common Stock, par value $0.01
per share, all of which are issued and outstanding and owned by
PEC. Upon Closing, all of such issued and outstanding shares
will be owned by Interholding. All of the outstanding shares of
capital stock of BWC have been duly authorized and validly
issued, are fully paid and non-assessable and are not subject to
any preemptive or similar rights. Upon Closing, such capital
stock will be free and clear of any Lien except for the Liens
under the Brandywine Financing Documents. BWC does not have
outstanding any securities convertible into or exchangeable for
any of its capital stock or any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise)
of, or any calls, commitments, or claims of any character
relating to, any such capital stock except under the Brandywine
Financing Documents.
(m) Interholding is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Offering Circular, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature or location of its
properties (owned or leased) or the conduct of its business
requires such registration or qualification, except where the
failure to so register or qualify would not have a Material
Adverse Effect. The authorized capital stock of Interholding
consists of 1,000 shares of Common Stock, par value $0.01 per
share, all of which will be issued and outstanding and owned by
the Company upon Closing. Upon Closing all of Interholding's
outstanding shares of capital stock will have been duly
authorized and validly issued, will be fully paid and non-
assessable and will not be subject to any preemptive or similar
rights. Upon Closing such capital stock will be free and clear
of any Lien except for the restrictions under the Indenture and
the Liens created by the Company Stock Pledge Agreement.
Interholding does not have outstanding any securities convertible
into or exchangeable for any of its capital stock or any rights
to subscribe for or to purchase, or any warrants or options for
the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments, or
claims of any character relating to any such capital stock
except, upon Closing, for restrictions under the Indenture and
Liens created by the Company Stock Pledge Agreement.
(n) Panda Cayman Interfunding Company ("PIC (Cayman)")
is a Cayman Islands exempted company duly formed and validly
existing under the laws of the Cayman Islands, British West
Indies with full power and authority to own, lease and operate
its properties and to conduct its business as described in the
Offering Circular, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction
or place where the nature or location of its properties (owned or
leased) or the conduct of its business requires such registration
or qualification, except where the failure to so register or
qualify would not have a Material Adverse Effect. The authorized
share capital of PIC (Cayman) consists of 50,000 shares with a
nominal or par value of $1.00 each, 100 shares of which will be
issued and outstanding upon Closing. Upon Closing, all of PIC
(Cayman)'s issued and outstanding shares will be owned by the
Company and will have been duly authorized and validly issued.
Such shares are free and clear of any Lien except, upon Closing,
for restrictions under the Indenture and Liens created by the
Company Stock Pledge Agreement. PIC (Cayman) does not have
outstanding any securities convertible into or exchangeable for
any of its share capital or any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise)
of, or any calls, commitments, or claims of any character
relating to any such share capital, except for Liens created by
the Company Stock Pledge Agreement upon Closing. Each of
Interholding, PIC (Cayman), PBC, PECD, BWC, PBLP, PR Corp., PRC
II, the Panda-Xxxxxxxx Partnership and Panda-Xxxxxxxx Funding
Corporation, a Delaware corporation are herein referred to as a
"Subsidiary" or collectively as the "Subsidiaries".
(o) Each of PFC, the Company and the Subsidiaries has
all authorizations, approvals, orders, licenses, franchises,
certificates and permits (collectively, "Permits") of and from,
and has made all filings with, all regulatory or governmental
officials, bodies and tribunals necessary to own or lease its
respective properties and to conduct its respective businesses
described in the Offering Circular, except as otherwise described
in the Offering Circular or where failure to have obtained or
made the same will not have a Material Adverse Effect, and none
of PFC, the Company, any Subsidiary and Panda International has
received any notice of proceedings relating to the revocation or
modification of any such Permits or filings; each of PFC, the
Company and the Subsidiaries has fulfilled and performed all its
current material obligations with respect to such Permits and
filings and no event has occurred which allows, or after notice
or lapse of time, or both, would allow, revocation or termination
thereof or result in any other material impairment of the rights
of the holder of any such Permit, subject in each case to such
qualification as may be set forth in the Offering Circular,
except where the failure to so do will not have a Material
Adverse Effect; and, except as described in the Offering
Circular, such Permits and filings contain no restrictions that
are materially burdensome to PFC, the Company and the
Subsidiaries taken as a whole; and each of PFC, the Company and
the Subsidiaries is in compliance with all applicable laws,
rules, regulations, orders and consents, the violation of which
would have a Material Adverse Effect. The property and business
of PFC, the Company and the Subsidiaries conform in all material
respects to the descriptions thereof contained in the Offering
Circular.
(p) Each of PFC, the Company and the Subsidiaries has
good and marketable title to all of its respective properties and
assets described in the Offering Circular as owned by it, free of
all Liens, except such as are described in the Offering Circular
or such as are not burdensome and do not interfere with the use
of the property or the conduct of the business of PFC, the
Company or such Subsidiary in a manner that is or would be
material to the business of PFC, the Company and the Subsidiary
taken as a whole. Each of PFC, the Company and the Subsidiaries
has valid, subsisting and enforceable leases for the properties
described in the Offering Circular as leased by it, with such
exceptions as are described in the Offering Circular or such as
in the aggregate are not burdensome and do not interfere with the
conduct of the business of the Company or such Subsidiary in a
manner that is or would be material to the Company and the
Subsidiaries taken as a whole.
(q) All Permits required to be obtained by or on
behalf of PFC, the Company or any of the Subsidiaries in
connection with (i) the due execution, delivery and performance
by the Company or the Subsidiaries of the Project Agreements
(defined below) to which it is a party and (ii) the use,
occupancy, operation, or maintenance of the Panda-Brandywine
Facility, are set forth on Schedule 5(q) attached hereto. To the
best knowledge of the Issuers and Panda International (i) all of
the Permits that are required to be obtained in the name of any
of the Subsidiaries on or prior to the date hereof are listed on
Part A of Schedule 5(q) and have been duly obtained, have been
validly issued and are in full force and effect and (ii) none of
the Permits listed on Part B of Schedule 5(q) is required to be
obtained by any Subsidiary as of the Closing. None of the
Issuers and Panda International has any reason to believe that
the Permits set forth in Part B of Schedule 5(q) will not be
obtained by the Subsidiaries.
(r) Each of the representations and warranties
contained the Purchase Agreement dated July 26, 1996 by and among
the Initial Purchaser, Panda-Xxxxxxxx Funding Corporation, Panda-
Xxxxxxxx, L.P. and Panda International relating to $111,400,000
principal amount of 8-5/8% First Mortgage Bonds Due 2016 is true and
correct.
(s) The Panda-Brandywine Facility is a "qualifying
cogeneration facility" under the Federal Power Act ("FPA"), as
amended by Section 201 of the Public Utility Regulatory Policies
Act of 1978 ("PURPA") and the regulations of the Federal Energy
Regulatory Commission ("FERC") promulgated thereunder, and the
Panda Brandywine Facility's current intended use, operation and
ownership are consistent with such facility's status as a
"qualifying cogeneration facility."
(t) Attached hereto as Schedules 5(t)-1 and 5(t)-2,
respectively, are lists of all agreements relating to the Panda-
Xxxxxxxx Facility (the "Panda-Xxxxxxxx Project Agreements") and
the Panda-Brandywine Facility (the "Panda-Brandywine Project
Agreements", and collectively with the Panda-Xxxxxxxx Project
Agreements, the "Project Agreements"), other than those that are
not material to the ownership or the current or future
construction, operation, maintenance or results of operation of
either the Panda-Xxxxxxxx Facility or the Panda-Brandywine
Facility. None of the Project Agreements has been amended,
modified or terminated. None of the Company, PFC and any
Subsidiary is, or, except as permitted in accordance with Section
6.26 of the Xxxxxxxx Indenture and any similar provisions in the
Brandywine Financing Documents, will be, as a result of the
construction, ownership, operation or maintenance of the Panda-
Xxxxxxxx Facility or the Panda-Brandywine Facility in accordance
with the Project Agreements, subject to regulation (i) under
PUHCA as a "public utility company" or an "affiliate" or
"subsidiary company" or a "holding company" or a "registered
holding company" or a company subject to registration under
PUHCA, (ii) under the Federal Power Act, as amended, as a "public
utility" or an "electric utility" or a "transmitting utility"
other than as contemplated by 18 C.F.R. Section 292.601,
(iii) under any other similar federal law regulating the
generation, transmission or sale of electricity under which the
Company or any Subsidiary would be deemed to be the generator,
transmitter or seller of such electricity (including, but not
limited to, treatment as an "electric utility," "electric
corporation," "electrical company," "public utility," "public
utility holding company" or any similar entity under any existing
law or an "affiliate" or "subsidiary company" of a "registered
holding company"), (iv) respecting the rates or the financial and
organizational regulations of electric utilities under any state
law or regulation or (v) the equivalent under the applicable laws
of any state relating to public utilities and/or public service
corporations or any similar entity, except that Panda-Xxxxxxxx
Funding Corporation and the Panda-Xxxxxxxx Partnership are
subject to continuing oversight by the NCUC, and the jurisdiction
of the NCUC, particularly with regard to organizational and
operational matters, under N.C.G.S. 62-110.1 and 156 and NCUC
Rule R1-37(d)(3), under the terms and conditions imposed by the
NCUC in the CPCNs issued or transferred to them, and the terms
and conditions imposed by the NCUC in its Order Not to Reconsider
but to Impose New Conditions issued regarding PR Corp. in NCUC
Docket No. SP-73, Sub 1 on October 2, 1989.
(u) None of the Trustee, the Collateral Agent or any
holder of the Securities will, solely by reason of (i) the
ownership, operation and maintenance of a Project by a
Subsidiary, (ii) the purchase and ownership of the Securities or
(iii) any other transaction contemplated by the Indenture (except
foreclosure which results in any such person owning or operating
any facility), be deemed by any governmental authority having
jurisdiction to be, or to be subject to financial, organizational
or rate regulation as, (A) a "public utility" under the North
Carolina Public Utilities Act, N.C.G.S. 62-3(23), (B) a "natural
gas company" under the Natural Gas Act of 1938, as amended, or
(C) an "electric utility," "electric corporation," "electrical
company," "public utility," "public utility holding company," an
"affiliate," a "subsidiary company" or any similar entity under
any existing law (including, but not limited to, the laws of the
States of North Carolina and Maryland).
(v) The easements, licenses and other rights granted
or to be granted to the Subsidiaries pursuant to the terms of the
Project Agreements are not subject to any Liens (other than Liens
permitted by such Project Agreements) and provide or will provide
the Subsidiaries with all rights and property interests required
to enable the Subsidiaries to obtain all services, materials or
rights (including access) required for the design, construction,
start-up, operation and maintenance of the Panda-Xxxxxxxx
Facility and the Panda-Brandywine Facility, including the
Subsidiaries' full and prompt performance of their obligations,
and full and timely satisfaction of all conditions precedent to
the performance by others of their obligations, under the Project
Agreements, other than those services, materials or rights that
reasonably can be expected to be obtainable in the ordinary
course of business.
(w) PFC, the Company and the Subsidiaries own, or
possess adequate rights to use, all trademarks, service marks and
other rights necessary for the conduct of their business as
described in the Offering Circular, and none of PFC, the Company,
any Subsidiary and Panda International has received any notice of
conflict with the asserted rights of others in any such respect
that would materially adversely affect the business of PFC, the
Company or any Subsidiary, and none of PFC, the Company, any
Subsidiary and Panda International know of any basis therefor.
(x) Price Waterhouse LLP, who have certified the
financial statements included in the Offering Circular, are
independent accountants with respect to PFC and the Company as
required by the Act.
(y) None of PFC, the Company, any Subsidiary and Panda
International is in violation of its respective charter or
by-laws or similar organizational documents, or of any law,
ordinance, administrative or governmental rule or regulation
applicable to PFC, the Company, such Subsidiary or Panda
International or of any Permit, judgment or any decree of any
court or governmental agency or body having jurisdiction over
PFC, the Company, the Subsidiaries or Panda International that is
not accurately described in the Offering Circular in all material
respects or that would have a Material Adverse Effect, or in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease, bond,
debenture, bank loan, credit agreement or other agreement,
instrument or evidence of indebtedness to which PFC, the Company,
any Subsidiary or Panda International is a party or by which any
of them may be bound, or to which any of their respective
property or assets is subject, that is not accurately described
in the Offering Circular in all material respects or that would
have a Material Adverse Effect.
(z) There are no legal or governmental proceedings
pending or, to the knowledge of PFC or the Company, threatened,
against PFC, the Company, any Subsidiary or Panda International,
or to which any of their respective properties is subject, that
are not accurately disclosed in all material respects in the
Offering Circular or that, if resolved adversely to PFC, the
Company, such Subsidiary or Panda International, could reasonably
be expected to have a Material Adverse Effect or to materially
affect the issuance of the Securities or the consummation of the
transactions contemplated by this Agreement or the Transaction
Documents (defined below). There are no agreements, contracts,
indentures, leases or other documents or instruments of PFC, the
Company, any Subsidiary or Panda International that are required
to be described in the Offering Circular in order that the
statements made therein are not misleading in any material
respect or in order that there are no material omissions
therefrom, that are not described in the Offering Circular.
(aa) None of PFC, the Company, any Subsidiary or Panda
International is involved in any labor dispute or, to the
knowledge of PFC, the Company or Panda International, is any such
dispute threatened, other than a charge of discrimination in
violation of Title VII of the Civil Rights Act of 1964, as
amended, filed against Panda International by Xxx. Xxxxxx X.
Xxxxxxx with the Equal Employment Opportunity Commission, which
charge could not reasonably be expected to result in a Material
Adverse Effect.
(bb) Each of PFC, the Company and the Subsidiaries has
filed all federal, state and local tax returns that are required
to be filed (other than returns with respect to which failure to
so file would not have a Material Adverse Effect) or has obtained
extensions thereof and has paid all taxes shown on such returns
and all assessments received by it to the extent that the same
have become due.
(cc) None of the issuance, offer, sale or delivery of
the Securities, the execution, delivery or performance of this
Agreement, or any of the Transaction Documents by the Issuers,
PEC or Panda International or the consummation by the Issuers,
PEC or Panda International of the transactions contemplated
hereby or thereby (i) requires any consent, approval,
authorization or other order of, or registration or filing with
(based on the assumptions set forth in paragraph (nn) below with
respect to registration under the Act), any court, regulatory
body, administrative agency or other governmental body, agency or
official except for such as may have been obtained or may be
required in connection with the registration under the Act of the
Securities or the Exchange Bonds in accordance with the
Registration Rights Agreement, the qualification of the Indenture
under the 1939 Act and except for such as may be required in
connection with registration under the Act of the Securities or
the Exchange Bonds in accordance with the Registration Rights
Agreement and compliance with the securities or Blue Sky laws of
certain jurisdictions and to perfect security interests as
contemplated by the Security Documents, (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a
default under, the certificate or articles of incorporation or
bylaws, or other organizational documents, of the Issuers, the
Subsidiaries, PEC or Panda International, (iii) after giving
effect to the transactions contemplated by this Agreement and the
Transaction Documents (other than the Project Agreements)
conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, any agreement, indenture, lease
or other instrument to which the Issuers, the Subsidiaries, PEC
or Panda International is a party or by which any of them or any
of their respective properties may be bound, other than
conflicts, breaches or defaults that could not reasonably be
expected to result in a Material Adverse Effect or to materially
affect the issuance of the Securities or the consummation of the
transaction contemplated by this Agreement or the Transaction
Documents, (iv) based on the assumptions set forth in paragraph
(nn) below with respect to registration under the Act, and except
for compliance with the securities laws or Blue Sky laws of
certain jurisdictions (as to which no representation or warranty
is given), violates or will violate any statute, law, regulation
or filing or judgment, injunction, order or decree applicable to
the Issuers, the Subsidiaries, PEC or Panda International or any
of their respective properties, other than violations that could
not reasonably be expected to result in a Material Adverse Effect
or to materially affect the issuance of the Securities or the
consummation of the transaction contemplated by this Agreement or
the Transaction Documents, or (v) except as contemplated by the
Indenture and the Security Documents, will result in the creation
or imposition of any Lien upon any property or assets of the
Issuers, the Subsidiaries, PEC or Panda International pursuant to
the terms of any agreement or instrument to which any of them is
a party or by which any of them may be bound or to which any of
the property or assets of any of them is subject.
(dd) The financial statements, together with the notes
thereto, included as part of the Offering Circular, present
fairly the financial position, results of operations and changes
in partners' equity and cash flows of the Company on the basis
stated in the Offering Circular at the respective dates or for
the respective periods to which they apply, and have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved.
The other financial and statistical information and data set
forth in the Offering Circular (other than the Projections, as
defined in paragraph (qq) below) are accurate in all material
respects and, to the extent such information and data is derived
from the financial books and records of the Issuers, present
fairly in all material respects the information purported to be
shown thereby at the respective dates or for the respective
periods for which they apply and is prepared on a basis
consistent with such financial statements and the books and
records of the Issuers.
(ee) The pro forma financial data included in the
Offering Circular include all material adjustments to the
historical data required to reflect the issuance of the
Securities and the other transactions described in the notes
related to such pro forma financial data contained in the
Offering Circular and the pro forma adjustments and assumptions
used in the preparation of such pro forma data in the Offering
Circular are reasonable.
(ff) The Company's capitalization as of March 31, 1996
was as set forth in the Offering Circular in the section titled
"Capitalization" under the column titled "Actual."
(gg) Except as disclosed in the Offering Circular,
subsequent to the date as of which such information is given in
the Offering Circular, neither the Issuers nor any Subsidiary has
incurred any liability or obligation, direct or contingent, or
entered into any transaction that is in each case material to the
Issuers and the Subsidiaries taken as a whole, and there has not
been any change in the capital stock, or material increase in the
short-term or long-term debt, of the Issuers or any Subsidiary
or any event or circumstance that has had, or reasonably could be
expected to have, a Material Adverse Effect.
(hh) This Agreement, the Registration Rights Agreement,
the Indenture, the Security Documents, the Additional Projects
Contract and the Project Agreements are collectively referred to
as the "Transaction Documents". The Issuers, PEC, Panda
International and the Subsidiaries are collectively referred to
as the "Panda Parties". Each of the Panda Parties has full
corporate or partnership power and authority, as the case may be,
to execute and enter into, and deliver and perform its
obligations under the Transaction Documents to which it is a
signatory. The execution and delivery of, and the performance by
each of the Panda Parties of its obligations under the
Transaction Documents to which it is a signatory have been duly
and validly authorized by such party. The Transaction Documents
either are, or at the Closing shall have been, duly executed and
delivered by each of the Panda Parties that is a signatory
thereto, and constitute, or at the Closing will constitute, the
valid and legally binding agreement of each of the Panda Parties
that is a signatory thereto, enforceable against each of the
Panda Parties that is a signatory thereto in accordance with its
terms, except as the enforcement hereof and thereof may be
limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally and subject to the
applicability of general principles of equity.
(ii) The execution and delivery of each of the Security
Documents to which PFC or the Company is a party or will be a
party on the Closing Date will be effective to create in favor of
the Collateral Agent for the benefit of the Secured Parties, as
security for payment and performance of the obligations secured
thereby, a valid and enforceable security interest in the
Collateral covered or purported to be covered thereby upon the
delivery of stock certificates representing certain Collateral
and upon filing of the appropriate UCC-1 financing statements
(the "Financing Statements"), with the first priority purported
to be created thereby. The Financing Statements on the Closing
Date will be in appropriate form for filing (including the
description of the collateral set forth therein) in each office
and in each jurisdiction where required to create and perfect the
lien and security interest described above.
(jj) Except as permitted by the Act, none of the
Issuers or Panda International have distributed any offering
material in connection with the offering and sale of the
Securities other than the Preliminary Offering Circular and the
Offering Circular.
(kk) Each of the Issuers is not and, upon sale of the
Securities to be issued and sold thereby in accordance herewith
and the application of the net proceeds to the Issuers of such
sale as described in the Offering Circular under the caption "Use
of Proceeds," will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(ll) When the Securities are issued and delivered
pursuant to this Agreement, such Securities will not be of the
same class (within the meaning of Rule 144A(d)(3) under the Act)
as any security of the Issuers that is listed on a national
securities exchange registered under Section 6 of the Exchange
Act or that is quoted in a United States automated interdealer
quotation system.
(mm) Neither the Issuers nor any of their affiliates
(as defined in Rule 501(b) of Regulation D ("Regulation D") under
the Act) has directly, or indirectly through any agent or
otherwise, (1) sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any security (as defined
in the Act) which is or will be integrated with the offering and
sale of the Securities in a manner that would require the
registration of the Securities under the Act or (2) engaged in
any form of general solicitation or general advertising (within
the meaning of Rule 502(a) of Regulation D under the Act) in
connection with the offering of the Securities.
(nn) Assuming (1) that the representations and warranties
of the Initial Purchaser in Section 2 hereof are true and
correct in all material respects, (2) the Initial Purchaser
complies in all material respects with the covenants set forth in
Section 2 hereof, (3) compliance by the Initial Purchaser in all
material respects with the offering and transfer procedures and
restrictions described in the Offering Circular, (4) the accuracy
in all material respects of the representations and warranties
made in accordance with this Agreement and the Offering Circular
by Eligible Purchasers to whom the Initial Purchaser initially
resells Securities and (5) Eligible Purchasers to whom the
Initial Purchaser initially resells Securities receive a copy of
the Offering Circular prior to such sale, the purchase and sale
of the Securities pursuant hereto (including the Initial
Purchaser's proposed offering of the Securities on the terms and
in the manner set forth in the Offering Circular and Section 2
hereof) do not require registration under the Act.
(oo) The execution and delivery of this Agreement and
the sale of the Securities to the Initial Purchaser by the
Issuers, Panda International or by the Initial Purchaser to
Eligible Purchasers will not involve any prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the
Code. The representation made by the Issuers and Panda
International in the preceding sentence is made in reliance upon
and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible
Purchasers as set forth in the Offering Circular under the
section entitled "Transfer Restrictions."
(pp) Each Project Agreement is in full force and effect
and constitutes a valid and legally binding obligation of the
Subsidiaries that are parties thereto and, to the best knowledge
of PFC, the Company and Panda International, of each person other
than the Subsidiaries that is party thereto, enforceable against
the Subsidiaries and each person other than the Subsidiaries that
is a party thereto, in accordance with the terms thereof, except
as such enforceability may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditors'
rights generally and subject to the applicability of general
principles of equity. After giving effect to the transactions
contemplated by this Agreement and the Transaction Documents
(other than the Project Agreements), except as set forth in the
Offering Circular, to the best knowledge of the Issuers and Panda
International, the Subsidiaries and such other parties are not in
default (and no event has occurred which with lapse of time or
notice or action by a third party could result in a default) in
the performance of or compliance with any term or provision of
any Project Agreement and, to the best knowledge of PFC and the
Company, no force majeure has occurred and is continuing under
any Project Agreement.
(qq) The Issuers and Panda International have reviewed
the financial projections for the Panda-Xxxxxxxx Facility
contained in the Panda-Xxxxxxxx Cogeneration Project Condition
Assessment Report for Potential Investors at the Request of Panda
Energy Corporation prepared by Xxxxx & XxXxxxxxx included in the
Offering Circular as Appendix C thereto, the financial
projections for the Panda-Brandywine Facility contained in the
Independent Panda-Brandywine Pro Forma Projections prepared for
Panda International by ICF included in the Offering Circular as
Appendix E and the consolidated projections contained in the
Summary of the Consolidated Pro Forma of the Panda-Xxxxxxxx and
Panda Brandywine Power Projects prepared for Panda International
by ICF included in the Offering Circular as Appendix B thereto
(collectively, the "Projections") and believe that the
Projections are based upon assumptions that, to the extent
material for purposes of consideration of the Projections taken
as a whole, are accurately disclosed in all material respects in
the Offering Circular. The Issuers and Panda International
believe the Projections to be reasonable in light of the
assumptions made therein. The Issuers and Panda International
have reviewed the assumptions contained in (1) the Assessment of
Fuel Price, Supply and Delivery Risks for Panda-Xxxxxxxx
Cogeneration Project prepared by Xxxxxxxx Xxxxxxxxxxx and
Associates, Inc., included in the Offering Circular as Appendix D
thereto, (2) the Independent Engineer's Report Panda-Brandywine
Cogeneration Project prepared by Pacific Energy Systems, Inc.,
included in the Offering Circular as Appendix G thereto and
(3) the Panda-Brandywine, L.P. Generating Facility Fuel
Consultant's Report prepared by X. X. Xxxx Resources, Inc.
included in the Offering Circular as Appendix H thereto, and the
Issuers and Panda International believe such assumptions to be
reasonable. The reports described in this paragraph are
collectively referred to as the "Independent Engineers' Reports."
Xxxxx & XxXxxxxxx, ICF, Xxxxxxxx Xxxxxxxxxxx & Associates, Inc.,
Pacific Energy Systems, Inc. and X. X. Xxxx Resources, Inc. are
collectively referred to as the "Independent Engineers."
(rr) Except as disclosed in the Offering Circular, PFC,
the Company and the Subsidiaries are in compliance with all
applicable federal, state and local laws (including common law)
and regulations, ordinances, permits, approvals and consent
decrees relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively "Safety and
Environmental Laws"), except for such noncompliance as could not
reasonably be expected to have a Material Adverse Effect. Except
as disclosed in the Offering Circular (as it may be amended or
supplemented), compliance with Safety and Environmental Laws
currently in effect is not expected to have a material effect
upon the capital expenditures, earnings and competitive position
of PFC and the Company, there are not any material estimated
capital expenditures for environmental control facilities for the
current and succeeding fiscal year and, to the best knowledge of
the Issuers and Panda International, there are not any past or
present actions, activities, circumstances, events or incidents
with respect to environmental matters, including releases of any
material into the environment, that could reasonably be expected
to have a Material Adverse Effect. Except as disclosed in the
Offering Circular, there is no claim under any Safety and
Environmental Law, including common law, pending or, to the best
knowledge of the Issuers and Panda International, threatened
against the Issuers, the Company or any Subsidiary ("Claim") that
would have a Material Adverse Effect and, to the best of the
knowledge of the Issuers and Panda International, under
applicable law there are not any past or present actions,
activities, circumstances, events or incidents, including
releases of any material into the environment, that would be
reasonably likely to form the basis of any Claim against the
Issuers or any Subsidiary that would have a Material Adverse
Effect.
(ss) None of Panda International, the Company or any of
the Subsidiaries has violated any U.S. or foreign federal, state
or local laws applicable to its business relating to
discrimination in the hiring, promotion or pay of employees or
any applicable federal or state wages and hours laws, or any
provisions of the Employee Retirement Income Security Act of 1974
or the rules and regulations promulgated thereunder, which in
each case could result in any Material Adverse Effect.
6. Indemnification and Contribution. (a) PFC, the Company
and Panda International agree, jointly and severally, to
indemnify, defend and hold harmless the Initial Purchaser and its
officers, shareholders, employees and directors and any person
who controls the Initial Purchaser within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against
any loss, expense, liability or claim (including the reasonable
cost of investigating such claim) which, jointly or severally,
such Initial Purchaser or any such officer, shareholder,
employee, director or controlling person may incur under the Act,
the Exchange Act or otherwise, as such expenses are incurred,
insofar as such loss, expense, liability or claim arises out of
or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Offering Circular
or Offering Circular, as amended or supplemented, or arises out
of or is based upon any omission or alleged omission to state a
material fact required to be stated in the Preliminary Offering
Circular or Offering Circular, as amended or supplemented, or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except
insofar as any such loss, expense, liability or claim arises out
of or is based upon any untrue statement or omission or alleged
untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the
information provided in writing to PFC or the Company by or on
behalf of the Initial Purchaser, expressly for use in the
Preliminary Offering Circular or Offering Circular, and PFC, the
Company and Panda International agree that the only such
information provided in writing by or on behalf of the Initial
Purchaser, expressly for use in the Preliminary Offering Circular
or Offering Circular, is that information contained in the
section entitled "Plan of Distribution." The foregoing indemnity
agreement shall be in addition to any liability which PFC, the
Company and Panda International may otherwise have. The
indemnification contained in this Section 6(a) with respect to
untrue statements made in, or omissions or alleged omissions
from, the Preliminary Offering Circular shall not inure to the
benefit of the Initial Purchaser or the other persons entitled to
indemnification as described above on account of any loss,
expense, liability or claim arising from the resale of the
Securities by the Initial Purchaser if (1) the Company and PFC
shall have complied with their obligations under Sections 4(b),
4(c), 4(d) and 4(e) hereof, (2) a copy of the Offering Circular
(as amended or supplemented if any amendments or supplements
thereto shall have been furnished to the Initial Purchaser prior
to the written confirmation of such resale) shall not have been
given or sent to such person by or on behalf of the Initial
Purchaser prior to the written confirmation of such resale and
(3) the untrue statement or alleged untrue statement of, or
omission or alleged omission of, a material fact contained in the
Preliminary Offering Circular, or any amendment or supplement
thereto, that is the basis for the loss, expense, liability or
claim as to which such claim for indemnification is made was
corrected in the Offering Circular (as amended or supplemented
and delivered to the Initial Purchaser prior to the written
confirmation of such resale).
If any notice of claim is received by or any action is
brought against the Initial Purchaser or its officers,
shareholders, employees, directors or persons who control the
Initial Purchaser (as described above) in respect of which
indemnity may be sought against PFC, the Company and Panda
International pursuant to the foregoing paragraph, the Initial
Purchaser shall promptly notify PFC, the Company or Panda
International in writing of such notice of claim or the
institution of such action (provided, that the failure to give
such notice shall not relieve either PFC, the Company or Panda
International of any liability which they may have pursuant to
this Agreement, except to the extent that it shall have been
determined by a court of competent jurisdiction by final judgment
that such failure has resulted in the forfeiture of substantive
rights or defenses by the indemnifying party) and PFC, the
Company or Panda International shall assume the defense of such
action, including the employment of counsel and payment of
reasonable expenses. The Initial Purchaser or such officer,
shareholder, employee, director or person who controls the
Initial Purchaser (as described above) shall have the right to
employ its or their own counsel in any such case (but not to
direct the defense), but the fees and expenses of such counsel
shall be at the expense of the Initial Purchaser or of such
persons unless (i) the employment of such counsel shall have been
authorized in writing by PFC, the Company or Panda International
in connection with the defense of such action, (ii) PFC, the
Company or Panda International shall not have employed counsel
reasonably satisfactory to the Initial Purchaser to have charge
of the defense of such action or (iii) such indemnified party or
parties shall have been advised by counsel that there may be
defenses available to it or them that are different from or in
addition to those available to PFC, the Company and Panda
International (and, in the case of clause (i), (ii) or (iii)
above, the Company, the Partnership and Panda International shall
not have the right to direct the defense of such action on behalf
of such indemnified party or parties and such fees and expenses
shall be borne, jointly and severally, by PFC, the Company and
Panda International and paid as incurred, provided that PFC, the
Company and Panda International shall only be responsible for the
fees and expenses of one counsel for the indemnified parties
hereunder). Anything in this paragraph to the contrary
notwithstanding, none of PFC, the Company and Panda International
shall be liable for any settlement of any such claim or action
effected without its written consent, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the
immediately preceding sentence, if at any time the Initial
Purchaser shall have requested PFC, the Company or Panda
International to reimburse the Initial Purchaser for fees and
expenses of counsel required to be paid by the Company, the
Partnership or Panda International, each of PFC, the Company and
Panda International shall be liable for any settlement of such
claim or action effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by
PFC, the Company or Panda International of such request,
(ii) PFC, the Company or Panda International shall not have
reimbursed the Initial Purchaser in accordance with such request
prior to the date of such settlement and (iii) the Initial
Purchaser shall have given PFC, the Company or Panda
International at least 30 days' prior notice of its intention to
settle.
(b) The Initial Purchaser agrees to indemnify, defend
and hold harmless PFC and the Company, each of their respective
directors, officers and employees and any person who controls PFC
or the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any loss,
expense, liability or claim (including the reasonable cost of
investigating such claim) which PFC, the Company or any such
person may incur under the Act, the Exchange Act or otherwise,
insofar as such loss, expense, liability or claim arises out of
or is based upon any untrue statement or alleged untrue statement
or omission of a material fact or alleged omission of a material
fact which has been made in or omitted from the Preliminary
Offering Circular or Offering Circular in reliance upon and in
conformity with the information relating to the Initial Purchaser
furnished in writing by or on behalf of the Initial Purchaser to
PFC and the Company. PFC, the Company and Panda International
agree that the only information provided in writing by or on
behalf of the Initial Purchaser to PFC and the Company, expressly
for use in the Preliminary Offering Circular or Offering
Circular, is that information contained in the section entitled
"Plan of Distribution." The foregoing indemnity agreement shall
be in addition to any liability which the Initial Purchaser may
otherwise have.
If any notice of claim is received by or any action is
brought against PFC, the Company or any such person in respect of
which indemnity may be sought against the Initial Purchaser
pursuant to the foregoing paragraph, PFC, the Company, Panda
International or such person shall promptly notify the Initial
Purchaser in writing of such notice of claim or the institution
of such action (provided, that the failure to give such notice
shall not relieve the Initial Purchaser of any liability which it
may have pursuant to this agreement, except to the extent that it
shall have been determined by a court of competent jurisdiction
by final judgment that such failure has resulted in the
forfeiture of substantive rights or defenses by the indemnifying
party) and the Initial Purchaser shall assume the defense of such
action, including the employment of counsel and payment of
reasonable expenses. PFC, the Company, Panda International or
such person shall have the right to employ its or their own
counsel in any such case (but not to direct the defense), but the
fees and expenses of such counsel shall be at the expense of PFC,
the Company or such person unless (i) the employment of such
counsel shall have been authorized in writing by the Initial
Purchaser in connection with the defense of such action, (ii) the
Initial Purchaser shall not have employed counsel reasonably
satisfactory to the Issuers or Panda International to have charge
of the defense of such action or (iii) such indemnified party or
parties shall have been advised by counsel that there may be
defenses available to it or them which are different from or
additional to those available to the Initial Purchaser (and, in
the case of clause (i), (ii) or (iii) above, the Initial
Purchaser shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties) and such
fees and expenses shall be borne by the Initial Purchaser and
paid as incurred, provided that the Initial Purchaser shall only
be responsible for the fees and expenses for one counsel for all
persons in respect of which indemnity may be sought against the
Initial Purchaser). Anything in this paragraph to the contrary
notwithstanding, the Initial Purchaser shall not be liable for
any settlement of any such claim or action effected without the
written consent of the Initial Purchaser, which consent shall not
be unreasonably withheld or delayed. Notwithstanding the
immediately preceding sentence, if at any time the Issuers and
Panda International shall have requested the Initial Purchaser to
reimburse such indemnified party for fees and expenses of counsel
required to be paid by the Initial Purchaser, the Initial
Purchaser agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by the
Initial Purchaser of such request, (ii) the Initial Purchaser
shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the Initial
Purchaser at least 30 days' prior notice of its intention to
settle.
(c) If the indemnification provided for in this
Section 6 is unavailable to an indemnified party under subsection
(a) or (b) of this Section 6 in respect of any losses, damages,
expenses, liabilities or claims referred to therein, then each
applicable indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses,
expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by PFC, the
Company and Panda International on the one hand and the Initial
Purchaser on the other hand from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of PFC, the Company and
Panda International on the one hand and the Initial Purchaser on
the other in connection with the statements or omissions which
resulted in such losses, expenses, liabilities or claims, as well
as any other relevant equitable considerations. The relative
benefits received by PFC, the Company and Panda International on
the one hand and the Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but
before deducting expenses) received by PFC, the Company and Panda
International bear to the total discounts and commissions
received by the Initial Purchaser. The relative fault of PFC,
the Company and Panda International on the one hand and of the
Initial Purchaser on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied
by PFC, the Company or by the Initial Purchaser and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, expenses,
liabilities and claims referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any
claim or action.
(d) PFC, the Company, Panda International and the
Initial Purchaser agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in
Section 6(c) above. Notwithstanding the provisions of this
Section 6, the Initial Purchaser shall not be required to
contribute any amount in excess of the difference between the
consideration paid to PFC by such Initial Purchaser for the
Securities purchased by it and the consideration received by such
Initial Purchaser upon the resale of such Securities by reason of
such untrue statement or alleged untrue statement or omission or
alleged omission.
(e) The indemnity and contribution agreements
contained in this Section 6 and the covenants, warranties and
representations of PFC, the Company and Panda International
contained in this Agreement shall remain in full force and effect
irrespective of any investigation made by or on behalf of the
Initial Purchaser, or any of its officers, employees, directors,
shareholders or persons who control the Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, or by or on behalf of PFC, the Company, Panda
International, their respective directors, officers, employees or
any person who controls PFC, the Company or Panda International
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement
or the issuance and delivery of the Securities. PFC, the
Company, Panda International and the Initial Purchaser agree
promptly to notify the others of the commencement of any
litigation or proceeding against it and, in the case of PFC, the
Company or Panda International, against any of their respective
officers and directors in connection with the issuance and sale
of the Securities, or in connection with the Preliminary Offering
Circular or Offering Circular.
7. Conditions of the Initial Purchaser's Obligations. The
obligations of the Initial Purchaser to purchase the Securities
on the Closing Date hereunder is subject to the fulfillment or
waiver, in the Initial Purchaser's sole discretion, of the
following conditions:
(a) At the time of execution of this Agreement and on
the Closing Date, no order or decree preventing the use of the
Offering Circular or any amendment or supplement thereto, or any
order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the Act
shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending or, to the knowledge of
the Issuers and Panda International, be contemplated. No order
suspending the sale of the Securities in any jurisdiction
designated by the Initial Purchaser shall have been issued and no
proceedings for that purpose shall have been commenced or shall
be pending or, to the knowledge of the Issuers and Panda
International, shall be contemplated.
(b) Subsequent to the date hereof, there shall not
have occurred any change, or any development involving a
prospective change, in or affecting the condition (financial or
other), business, prospects, properties or results of operations
of PFC, the Company, PEC, Panda International or any of the
Subsidiaries, which in the opinion of the Initial Purchaser,
singly or in the aggregate, would materially adversely affect the
market for the Securities.
(c) The Initial Purchaser shall not have been advised
by the Issuers or Panda International or shall not have concluded
and disclosed to PFC or the Company that the Offering Circular
contains an untrue statement of a fact which in the opinion of
the Initial Purchaser or its counsel is material or omits to
state a fact which in the opinion of the Initial Purchaser or its
counsel, is material and is required to be stated therein or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(d) PFC and the Company shall have furnished to the
Initial Purchaser:
(i) the opinion of Xxxxxxxxxx & Xxxxx LLP, dated
the Closing Date and addressed to the Initial Purchaser,
substantially in the form of Exhibit B-1 hereto;
(ii) the opinion of Xxxxxxxxxx & Xxxxx LLP, dated
the Closing Date and addressed to the Initial Purchaser,
substantially in the form of Exhibit B-2 hereto;
(iii) the letter of Xxxxxxxxxx & Xxxxx LLP, dated
the Closing Date and addressed to the Initial Purchaser,
substantially in the form of Exhibit B-3 hereto;
(iv) the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx,
dated the Closing Date and addressed to the Initial
Purchaser, substantially in the form of Exhibit C hereto;
(v) the opinion of Xxxxxx & Calder, dated the
Closing Date and addressed to the Initial Purchaser,
substantially in the form of Exhibit D hereto;
(vi) the opinion of Xxxxxxx, Xxxxxxx & Xxxxxx,
LLP, dated the Closing Date and addressed to the Initial
Purchaser, substantially in the form of Exhibit E-1 hereto;
(vii) the opinion of Xxxxxxx, Baetjer & Xxxxxx,
LLP, dated the Closing Date and addressed to the Initial
Purchaser, substantially in the form of Exhibit E-2 hereto;
(viii) the opinion of McGuire, Woods, Battle &
Xxxxxx, LLP, dated the Closing Date and addressed to the
Initial Purchaser, substantially in the form of Exhibit F
hereto;
(ix) the opinion of Canterbury, Stuber, Pratt,
Elder & Xxxxx, P.C., dated the Closing Date and addressed to
the Initial Purchaser, substantially in the form of Exhibit
G hereto; and
(x) the opinion of Xxxxx and Xxxxxx, dated the
Closing Date and addressed to the Initial Purchaser,
substantially in the form of Exhibit H hereto.
(e) The Initial Purchaser shall have received on the
Closing Date an opinion of Xxxxxx & Xxxxxx L.L.P., counsel for
the Initial Purchaser, dated the Closing Date, and addressed to
the Initial Purchaser, with respect to such matters as the
Initial Purchaser may request.
(f) The Initial Purchaser shall have received letters
addressed to the Initial Purchaser, and dated the date hereof and
the Closing Date from Price Waterhouse LLP, independent public
accountants, substantially in the forms heretofore approved by
the Initial Purchaser.
(g) (i) There shall not have been any change in the
capital stock of the Issuers nor any material increase in the
short-term or long-term debt of the Issuers (other than in the
ordinary course of business) from that set forth or contemplated
in the Offering Circular (or any amendment or supplement
thereto); (ii) there shall not have been, since the respective
dates as of which information is given in the Offering Circular,
except as may otherwise be stated in the Offering Circular, any
Material Adverse Change; (iii) PFC, the Company and the
Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of
business), that are material to PFC, the Company and the
Subsidiaries, taken as a whole, other than those reflected in the
Offering Circular (or any amendment or supplement thereto); and
(iv) all the representations and warranties of the Issuers and
Panda International contained in this Agreement and the Indenture
shall be true and correct in all material respects on and as of
the date hereof and on and as of the Closing Date as if made on
and as of the Closing Date, and the Initial Purchaser shall have
received a certificate, dated the Closing Date and signed by the
chief executive officer and the chief accounting officer of the
Issuers and Panda International (or such other officers as are
acceptable to the Initial Purchaser), to the effect set forth in
this Section 7(g) and in Section 7(h) hereof.
(h) The Issuers and Panda International shall not have
failed at or prior to the Closing Date to have performed or
complied in all material respects with any of their respective
agreements herein contained and required to be performed or
complied with by them hereunder at or prior to the Closing Date.
(i) The Issuers and Panda International shall have
furnished or caused to be furnished to the Initial Purchaser such
further certificates and documents as the Initial Purchaser shall
have reasonably requested.
(j) The Initial Purchaser shall have received copies
of all Permits set forth on Part A of Schedule 5(q), certified by
an authorized officer of the Company as being complete and in
full force and effect.
(k) On or prior to the Closing Date, the Financing
Statements shall have been delivered for filing, recordation
and/or registration in each office and in each jurisdiction where
required to create and perfect a valid and enforceable security
interest in the Collateral covered or purported to be covered by
the Security Documents, with the priority purported to be created
thereby. All filing fees required to be paid with respect to the
execution, recording or filing of the Financing Statements shall
have been paid or provided for.
(l) No law, regulation, ruling guideline or other
governmental action or inaction shall have occurred (or be
proposed if such proposal has a reasonable likelihood of being
enacted and, if enacted, would have a Material Adverse Effect),
the effect of which is to prevent, directly or indirectly, the
Trustee, any Secured Party, the Issuers or any other party to any
Project Agreement from fulfilling its respective obligations
thereunder, or which would subject any Secured Party to any
unreimbursed liability by reason of the performance of its
obligations under the Indenture (other than taxes levied on the
income of such Secured Party).
(m) The conditions to closing set forth in Section 7
of that certain Purchase Agreement dated as of the date hereof,
by and among the Initial Purchaser, Panda-Xxxxxxxx Funding
Corporation and Panda-Xxxxxxxx, L.P. (relating to the offering
and sale by Panda-Xxxxxxxx Funding Corporation of its 8-5/8% First
Mortgage Bonds Due 2016) shall have been satisfied or waived by
the Initial Purchaser.
(n) The Independent Engineers will have consented to
the references to them in the Offering Circular and the use of
the Independent Engineer's Reports prepared by the Independent
Engineers and contained in Appendices B, C, D, E, G and H to the
Offering Circular, and since the dates of the Independent
Engineer's Reports, no event affecting the Independent Engineers'
Reports or the matters referred to therein shall have occurred
(i) which shall make untrue or incorrect in any material respect,
as of the Closing Date, any information or statement contained in
the Independent Engineers' Reports or in the Offering Circular
under the caption "Offering Circular Summary - Independent
Engineers' and Consultants' Reports" or (ii) which shall not be
reflected in the Offering Circular but should be reflected
therein in order to make the statements and information contained
in the Independent Engineers' Reports, or in the Offering
Circular relating to matters referred to in the Independent
Engineers' Reports, in light of the circumstances under which
they were made, not misleading, as evidenced by a certificate
satisfactory to the Initial Purchaser of an authorized officer of
each of the Independent Engineers, dated the Closing Date.
(o) The Initial Purchaser shall have received an
opinion, dated the Closing Date from Xxxxx, Xxxx & Xxxxxx,
counsel to the Trustee, the Collateral Agent and the Depositary
Agent, in respect of the enforceability of the Transaction
Documents to which the Trustee, the Collateral Agent and the
Depositary Agent are parties.
(p) The Initial Purchaser shall have received, in form
and substance satisfactory to the Initial Purchaser:
(i) certified copies of the (A) certificate of
incorporation and by-laws, of each of PFC and the Company
and (B) resolutions of the board of directors of each of
PFC, the Company, PEC and Panda International authorizing
the execution, delivery and performance of each Security
Document to which such Person is a party and of all
documents evidencing other necessary action with respect
thereto;
(ii) certificates signed by an authorized officer
of each such Person certifying the name, incumbency and
signature of each individual authorized to sign the Security
Documents to which such Person is a party and the other
documents or certificates to be delivered pursuant hereto
and thereto, which may be conclusively relied upon until a
revised certificate is similarly so delivered; and
(iii) good standing certificates, certificates of
authority to transact business as a foreign corporation, as
applicable, and franchise tax certificates with respect to
each such Person.
(q) The Issuers and Panda International shall have
paid in full on the Closing Date the fees and expenses referred
to in clause (v) of Section 8 by delivering to counsel for the
Initial Purchaser on such date a check payable to such counsel in
the requisite amount.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
reasonably satisfactory in form and substance to the Initial
Purchaser and counsel for the Initial Purchaser.
Any certificate or document signed by any officer of an
Issuer pursuant to this Agreement shall be deemed a
representation and warranty by the Issuers to the Initial
Purchaser as to the statements made therein.
8. Expenses. (a) Whether or not the purchase and sale of
the Securities hereunder is consummated or this Agreement is
terminated pursuant to Section 9 hereof, the Issuers and Panda
International agree, jointly and severally, to pay the following
costs and expenses and all other costs and expenses incident to
the performance by them of their obligations hereunder: (i) the
preparation, printing or reproduction of the Preliminary Offering
Circular and the Offering Circular (including financial
statements thereto), this Agreement, the Registration Rights
Agreement, the Indenture and the other Transaction Documents;
(ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and
packaging) of such copies of the Offering Circular and the
Preliminary Offering Circular as may be requested for use in
connection with the offering and sale of the Securities;
(iii) the preparation, printing (or reproduction),
authentication, issuance and delivery of certificates for the
Bonds including any stamp taxes in connection with the original
issuance and sale of the Bonds; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection
with the offering of the Securities; (v) the qualification of the
Securities for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 4(f) hereof
(including the fees, expenses and disbursements of counsel for
the Initial Purchaser relating to the preparation, printing or
reproduction and delivery of the preliminary and supplemental
Blue Sky Memoranda and such qualification in the amount of
$15,000); (vi) the performance by the Issuers of their
obligations under this Agreement, the Registration Rights
Agreement and the Transaction Documents.
(b) If the purchase and sale of the Securities
hereunder is not consummated because of any failure, refusal or
inability on the part of the Issuers or Panda International to
perform all obligations on their part to be performed hereunder
other than by reason of a default by the Initial Purchaser in
payment for the Securities on the Closing Date, the Issuers shall
reimburse the Initial Purchaser promptly upon demand for all out-
of-pocket expenses (including fees and disbursements of counsel)
that shall have been incurred by it in connection with the
proposed purchase and sale of the Securities and the other
transactions contemplated hereby.
(c) Except as otherwise expressly provided in this
Agreement, each party hereto shall bear its own expenses in
connection with the transactions contemplated by this Agreement
(including the fees and disbursements of its counsel).
9. Termination of Agreement. This Agreement shall be
subject to termination in the absolute discretion of the Initial
Purchaser, without liability on the part of the Initial Purchaser
to the Issuers or Panda International, by notice to the Issuers
and Panda International, if prior to the Closing Date (a) there
shall occur any default or breach by PFC, the Company or Panda
International hereunder or the failure to satisfy any of the
conditions contained in Sections 4 or 7 hereof or (b) if, since
the date of this Agreement and prior to the Closing Date,
(i) there has occurred any material adverse change in the
financial markets of the United States or any outbreak of
hostilities or other calamity or crisis, the effect of which on
the financial securities markets of the United States is such as
to make it, in the reasonable good faith judgment of the Initial
Purchaser, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (ii) trading
generally on the New York Stock Exchange or the American Stock
Exchange has been suspended (other than by limitation on hours or
number of days of trading), or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for
securities have been required, by the New York Stock Exchange or
the American Stock Exchange or by order of the Commission or any
other governmental authority, (iii) a banking moratorium has been
declared by any federal or state authorities, (iv) there shall
have occurred any downgrading in the rating of the Securities by
Xxxxx'x Investors Service, Inc., Duff & Xxxxxx Credit Rating Co.
or any public announcement that such organization has under
surveillance or review its rating of the Securities or (v) any
invalidation of Rule 144A by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Act or
the Exchange Act by the Commission or any amendment or proposed
amendment thereof by the Commission which in the Initial
Purchaser's judgment, would materially impair the Initial
Purchaser's ability to purchase, hold or effect resales of the
Securities as contemplated hereby or the ability of holders of
the Securities to effect resales as currently contemplated by
Rule 144A and Regulation S.
If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any
other party except as provided in Section 8.
10. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Initial Purchaser shall be
directed to the Initial Purchaser, c/x Xxxxxxxxx & Company, Inc.,
00000 Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000, attention: Syndication Department, notices to PFC, the
Company and Panda International shall be directed to 0000 Xxxxxx
Xxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: General
Counsel.
11. Parties. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchaser, PFC, the Company,
Panda International and their respective successors and legal
representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to provide any
person, firm or corporation, other than the Initial Purchaser,
PFC, the Company, Panda International and their respective
successors and legal representatives and the controlling persons
and officers, employees, directors and shareholders referred to
in Section 6 and their respective heirs and legal
representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive
benefit of the Initial Purchaser, PFC, the Company, Panda
International and their respective successors and legal
representatives, and said controlling persons, shareholders,
employees, officers and directors and their respective heirs and
legal representatives, and for the benefit of no other person,
firm or corporation. No purchaser of Securities from the Initial
Purchaser shall be deemed to be a successor by reason merely of
such purchase.
12. Governing Law and Time. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be
performed in said State. Specified times of day refer to New
York time, unless otherwise specified.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to PFC, the Company and
Panda International a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding
agreement among the Initial Purchaser, PFC, the Company and Panda
International in accordance with its terms.
Please confirm that the foregoing correctly sets forth the
agreement between the Issuers, Panda International and the
Initial Purchaser.
Very truly yours,
Panda Funding Corporation
By:
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Panda Interfunding Corporation
By:
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice Presidnet
Panda Energy International, Inc.
By:
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Confirmed as of the date first
above mentioned.
XXXXXXXXX & COMPANY, INC.
By: XXXXXXXXX & COMPANY, INC.
By:
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Executive Vice President
