EXHIBIT 10.98
AMENDED AND RESTATED SHAREHOLDER LOAN AGREEMENT
between
PAN-WESTERN ENERGY CORPORATION LLC
as Lender
and
TANGSHAN CAYMAN HEAT AND POWER CO., LTD.
as Borrower
Dated as of April 1, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 - DEFINITIONS 1
1.1 Definitions 1
ARTICLE 2 - THE CREDIT FACILITY 13
2.1 Credit Facility 13
2.2 Interest Payments 13
2.2.1 Interest Payment Dates 13
2.2.2 Interest 13
2.3 Project Note 13
2.4 Repayment of the Loans 14
2.4.1 Payments 14
2.4.2 Application of Payments 14
2.5 Prepayments 14
2.5.1 Voluntary Prepayments 14
2.5.2 Certain Mandatory Prepayments 14
2.5.3 Expropriation Event; Event of Loss 14
2.6 Fees 15
ARTICLE 3 - CONDITIONS PRECEDENT 16
3.1 Borrower's Certificate 16
(a) Representations and Warranties 16
(b) No Event of Default 16
(c) Governmental Authorizations and other consents
and approvals 16
(d) Facility Costs 16
3.2 On-Shore Accounts 16
3.3 Evidence of Facility Costs and Other Expenses 16
3.4 Progress Report; Project Engineer 16
3.5 Registration Certificate 17
3.6 Equity Contributions; Real Estate Transfers 17
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES 17
4.1 Organization 17
4.2 Authorization; No Conflict 17
4.3 Legality, Validity and Enforceability 17
4.4 Compliance with Law, Governmental Authorizations
and Project Documents 17
4.5 Governmental Authorizations 18
4.6 Litigation 18
4.7 Existing Defaults 18
4.8 Taxes 18
4.9 Contingent Liabilities 18
4.10 Business, Debt, Contracts, Etc. 18
4.11 Representations and Warranties 18
4.12 Utilities 18
4.13 Project Documents 19
4.14 Fees and Enforcement 19
4.15 Immunity 19
4.16 Subsidiaries and Beneficial Interest 19
4.17 No Other Powers of Attorney, etc. 19
4.18 Liens 19
4.19 Regulation of Parties 19
4.20 Transactions with Affiliates 19
ARTICLE 5 - AFFIRMATIVE COVENANTS OF THE BORROWER 20
5.1 Repayment of Indebtedness 20
5.2 Existence, Conduct of Business, Properties, Etc. 20
5.3 Performance of Covenants and Obligations 20
5.4 Use of Funds 20
5.5 Accounts 20
5.6 Compliance with Legal Requirements 21
5.7 Operating Budgets 21
5.8 Books, Records, Access 22
5.9 Financial Statements 22
5.10 Insurance 22
5.11 Reports; Cooperation 23
5.12 Taxes and Other Governmental Charges 23
5.13 Notices 24
5.14 Expropriation Event 24
5.15 Increased Costs 24
5.16 Taxes 25
5.17 Registration of the Loans; Other Foreign
Exchange Matters 25
5.18 Loan Payment Reserve 25
ARTICLE 6 - NEGATIVE COVENANTS 25
6.1 Indebtedness 26
6.2 Limitations on Liens 26
6.3 Nature of Business 26
6.4 Sale or Lease of Facility Assets 26
6.5 Merger, Consolidation, Liquidation, Dissolution 26
6.7 Loans, Advances or Investments 27
6.8 Immunity 27
6.9 Distributions 27
6.10 Transactions With Affiliates 27
6.11 Partnerships; Subsidiaries 27
6.12 Assignment 27
6.13 Abandonment of Project 28
6.14 Improper Use 28
6.15 Regulation of Parties 28
6.16 Amendments 28
ARTICLE 7 - EVENTS OF DEFAULT; CURE RIGHTS; REMEDIES 28
7.1 Events of Default; Cure Rights 28
7.1.1 Failure to Make Payments 28
7.1.2 Misstatements; Omissions 28
7.1.3 Affirmative Covenants 28
7.1.4 Negative Covenants 29
7.1.5 Breach of Material Project Documents 29
7.1.6 Bankruptcy; Insolvency 29
7.1.7 Judgments 30
7.1.8 Other Indebtedness 30
7.1.9 Termination or Invalidity of Certain
Project Documents; Abandonment of Project 30
7.1.10 Commercial Operation Date 30
7.1.11 Government Authorizations 31
7.1.12 Destruction of Project 31
7.1.13 Change of Law 31
7.1.14 Remedies 31
ARTICLE 8 - SCOPE OF LIABILITY 31
ARTICLE 9 - MISCELLANEOUS 32
9.1 Addresses 32
9.2 Delay and Waiver 32
9.3 Entire Agreement 32
9.4 Governing Law 32
9.5 Severability 33
9.6 Headings 33
9.7 No Partnership, Etc. 33
9.8 Consent to Jurisdiction 33
9.9 Successors and Assigns 33
9.10 Counterparts 33
TABLE OF SCHEDULES AND EXHIBITS iv
TABLE OF SCHEDULES AND EXHIBITS
Exhibit A Form of Project Note
Schedule 5.8 Insurance
Schedule A Interest Payment Schedule
Schedule B Amortization Schedule
THIS AMENDED AND RESTATED SHAREHOLDER LOAN AGREEMENT (this
"Agreement") dated as of April 1, 1997, by and between Pan-
Western Energy Corporation LLC (the "Lender"), a company with
limited liability organized under the laws of the Cayman Islands,
and Tangshan Cayman Heat and Power Co., Ltd. (the "Borrower"), a
Sino-foreign equity joint venture with limited liability
organized under the laws of the People's Republic of China (the
"PRC" or "China").
W I T N E S S E T H :
WHEREAS, the Borrower has developed, and desires to obtain,
own and operate certain water xxxxx and pipeline systems, heat,
steam and hot water system facilities (the "Facility") and to
provide services related thereto, in conjunction with certain
other facilities including two 50 MW coal-fired thermal power
generation facilities and a steam and hot water distribution
system (collectively referred to herein as the "Project"); and
WHEREAS, the Lender, as the owner of approximately 88% of
the aggregate ownership interest in the Borrower, can be expected
to derive certain benefits as a result of this Agreement and
desires to lend certain funds to the Borrower on commercial terms
negotiated at arms length by and between the Borrower and the
Lender pursuant to, and upon the term and conditions contained
in, this Agreement and for the benefit of the Borrower;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 Definitions. The following terms, as used herein, have
the following meanings:
"Affiliate" of a specified Person means any other
Person or Persons that directly, or indirectly through one or
more intermediaries, controls, is controlled by or is under
common control with the Person specified, or who holds or
beneficially owns 10% or more of the equity interest in the
Person specified or 10% or more of any class of voting securities
of the Person specified.
"Asset Sale" means sale, transfer or other disposition
(including any sale and leaseback of assets and any sale of
accounts receivable in connection with a receivable financing
transaction) by the Borrower or any of its Subsidiaries of any
property of the Borrower or any such Subsidiary, other than as
permitted pursuant to subsection 2.5.2.
"Authorized Representative" means as to any Person, its
president, chief executive officer or any senior vice president
or any other person specifically identified as such in a
certificate of such Person delivered to the Lender.
"Banking Day" means any day other than (i) a Saturday
or Sunday or (ii) a day on which banks in New York, New York,
Xxxxxx Town, Grand Cayman, Cayman Islands or Zhongdajie,
Bencheng, Luannan County, Hebei Province, China, are authorized
or required to be closed.
"Bankruptcy Law" means any insolvency, reorganization,
moratorium or similar law for the general relief of debtors in
any relevant jurisdiction.
"Basic Settlement Account" shall have the meaning
ascribed to it in subsection 5.5.
"Borrower" means Tangshan Cayman.
"Business Day" means any day other than (i) a Saturday
or Sunday or (ii) a day on which banks in New York, New York,
Xxxxxx Town, Grand Cayman, Cayman Islands or Zhongdajie,
Bencheng, Luannan County, Hebei Province, China, are authorized
or required to be closed.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent ownership
interests in a Person (other than a corporation) and any and all
warrants or options to purchase any of the foregoing.
"Capitalized Lease" means as to any Person, any lease
of any property of which the discounted present value of the
rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such
Person, and "Capitalized Lease Obligation" means the rental
obligations, as aforesaid, under any such lease.
"Cash Equivalents" means, at any time (i) any evidence
of Indebtedness with a maturity of 180 days or less issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal Reserve System, whose
rating is AA or higher from Standard & Poor's or Aa2 or higher
from Moody's, having combined capital and surplus and undivided
profits of not less than $500 million; (iii) commercial paper
with a maturity of 180 days or less issued by a corporation
(except an Affiliate of the Company) organized under the laws of
any state of the United States or the District of Columbia and
having the highest rating obtainable from Standard & Poor's or
Moody's; and (iv) repurchase obligations for a term of not more
than seven days for underlying securities of the types described
in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above.
"Cash Flow Available for Debt Service" means, for any
period, (i) the sum of all revenues (including interest and fee
income and any principal payments received by the Borrower on the
Transmission Loan for such period, but excluding any insurance
proceeds, other than business interruption insurance proceeds,
and other similar non-recurring receipts) of the Borrower for
such period minus (ii) the aggregate amount of O&M Costs for such
period as determined on a cash basis and otherwise in accordance
with GAAP).
"Change of Law" means after the date of this Agreement,
the adoption of any Legal Requirement, any change in any Legal
Requirement or the application or requirements thereof, any
change in the interpretation or administration of any Legal
Requirement by any Governmental Instrumentality, or compliance by
the Lender or the Borrower with any request or directive (whether
or not having the force of law) of any Governmental
Instrumentality.
"CHEXIM" means the Export-Import Bank of China, a
company organized under the laws of PRC.
"CHEXIM Guarantee" means the guarantee to be given by
CHEXIM as required pursuant to the EPC Contract in respect of the
EPC Contractor's obligations under the EPC Contract, as the same
may from time to time be amended, supplemented or otherwise
modified.
"Coal Supply Agreements" means all agreements entered
into by the Joint Venture Companies for the supply of coal to the
Project.
"Coal Transportation Agreements" means all agreements
entered into by the Joint Venture Companies for the
transportation of coal to the Project.
"Commercial Operation Date" means that date by which
both of the following have occurred: (i) the Project Engineer
has certified that the Project has achieved commercial operations
and (ii) the Commercial Operation Date, as such term is used in
the General Interconnection Agreement, has occurred.
"Commercially Feasible Basis" means that, following an
Event of Loss or an Expropriation Event, (i) the sum of the
proceeds of business interruption insurance, any funds available
to be applied to the rebuilding, repair or restoration pursuant
to subsection 2.5.3(e), any amounts that the shareholders of all
the Joint Venture Companies are irrevocably committed to
contribute and the anticipated revenues of the Project during the
estimated period of rebuilding, repair or restoration will be
sufficient to pay all Debt Service and O&M Costs of the Project
during the estimated period of rebuilding, repair or restoration
and (ii) the Project upon being rebuilt, repaired or restored can
reasonably be expected to produce revenues adequate to pay all
Debt Service and O&M Costs of all Joint Venture Companies
pursuant to each such Joint Venture Company's respective
Shareholder Loan Agreement over the remaining terms of the Loans
outstanding of each Joint Venture Company, taking into account
any change in projected operating results due to the impairment
of any portion of the Project, all without materially affecting
the Borrower's Debt Service Coverage Ratio.
"Covered Taxes" means taxes, levies, imposts,
deductions, charges, withholdings and liabilities imposed on or
measured by the net income or capital of a Person by any
jurisdiction or any political subdivision or taxing authority
thereof or therein solely as a result of a permanent
establishment of such Person in such jurisdiction or political
subdivision.
"Debt Service" means, for any period, an amount equal
to the aggregate of, without duplication all payments of
principal and interest (including any adjustment for withholding
taxes or similar taxes) due and payable on Indebtedness during
such period.
"Debt Service Coverage Ratio" means, for any period,
and, if the transaction giving rise to the need to calculate Debt
Service Coverage Ratio is an incurrence of Indebtedness,
calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been incurred or made on
the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period, means the
ratio of (A) Cash Available for Debt Service to (B) Net Debt
Service for such period.
"Debt Service Reserve Requirement" means US$1,000,000
less the amount of any Performance Bonus Payment paid by the
Borrower.
"Development Expenses" shall mean all reasonable out-of
pocket expenses related to the Facility that have been incurred
by the Borrower, Panda International or their Affiliates in the
development of the Facility prior to the date of this Agreement.
"Disqualified Stock" means, with respect to any Person,
any Capital Stock which, by its terms (or by the terms of any
security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is exchangeable for Indebtedness, or is redeemable
at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Loans, as the case may be.
"Dollar Equivalent" means, with respect to any monetary
amount in Renminbi, at any time for the determination thereof,
the amount of Dollars obtained by converting the amount of
Renminbi involved in such computation into Dollars at the spot
rate at which Renminbi are offered for sale against delivery of
Dollars by leading banks in Tangshan City on the date of
determination thereof as determined by the Lender in its
reasonable judgement. If for any reason the Dollar Equivalent
cannot be calculated as provided in the immediately preceding
sentence, the Lender shall calculate the Dollar Equivalent on
such basis as it deems fair and equitable.
"Dollar Permitted Investments" means investments which
are denominated and payable in U.S. Dollars (a) with respect to
funds in the On-Shore Accounts, deposits denominated in U.S.
Dollars maintained at, or certificates of deposit insured, or
obligations insured or guaranteed by, the Bank of China, The
China Construction Bank, the Communication Bank, the China
Farmers Bank or China International Trust and Investment
Corporation, or any branch of a commercial bank organized under
the laws of the United States or any political subdivision
thereof having a combined capital and surplus of at least
$500,000,000 and having long-term unsecured debt securities
having a rating assigned by each of Standard & Poor's and Moody's
equal to the highest rating assigned thereby to long-term
unsecured debt securities; and (b) means any of the following
securities: (i) direct obligations of the Department of the
Treasury of the United States of America; (ii) obligations of any
of the following federal agencies which obligations represent
full faith and credit of the United States of America, including:
Export-Import Bank, Farmers Home Administration, General Services
Administration, U.S. Maritime Administration, Small Business
Administration, Government National Mortgage Associate (GNMA),
U.S. Department of Housing & Urban Development (PHA's) and
Federal Housing Administration; (iii) bonds, notes or other
evidences of indebtedness rated "AAA" by Standard & Poor's and
"Aaa" by Moody's issued by the Federal Home Loan Bank, the
Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation; (iv) commercial paper rated in any one of
the two highest rating categories by Moody's or Standard &
Poor's; (v) investment agreements with banks (foreign &
domestic), broker/dealers, and other financial institutions rated
at the time of bid in any one of the three highest rating
categories by Moody's and Standard & Poor's; (vi) repurchase
agreements with banks (foreign & domestic), broker/dealers, and
other financial institutions rated at the time of bid in any one
of the three highest rating categories by each of Standard &
Poor's and Moody's, provided: (1) collateral is limited to (i),
(ii) and (iii) above, (2) the margin levels for collateral must
be maintained at a minimum of 102% including principal and
interest, (3) the Lender shall have a first perfected security
interest in the collateral, (4) the collateral will be delivered
to a third party custodian, designated by the Lender and all fees
and expenses related to collateral custody will be the
responsibility of the Lender, (5) the collateral must have been
or will be acquired at the market price and marked to market
weekly and collateral level shortfalls cured within 24 hours, (6)
unlimited right of substitution of collateral is allowed provided
that substitution collateral must be permitted collateral
substituted at a current market price and substitution fees of
the custodian shall be paid by the Lender; (vii) forward purchase
agreements delivering securities outlined in (i) and (iv) above
with banks (foreign and domestic), broker/dealers, and other
financial institutions maintaining a long-term rating on the day
of bid no lower than investment grade by each of Standard &
Poor's and Moody's (such rating may be at either the parent or
subsidiary level).
"Dollars," "U.S. Dollars" and "US$" mean lawful
currency of the United States of America.
"Energy Purchase Agreement" means Electric Energy
Purchase and Sales Agreement, dated September 22, 1995, between
NCPGC and Tangshan Panda and Tangshan Pan-Western, as the same
may from time to time be amended, supplemented or otherwise
modified.
"EPC Contract" means the Engineering, Procurement and
Construction Contract, dated as of April 24, 1996 between the EPC
Contractor and Tangshan Panda and Tangshan Pan-Western, as the
same may from time to time be amended, supplemented or otherwise
modified.
"EPC Contractor" means Harbin Power Engineering Company
Limited, a company organized under the laws of the PRC and a
wholly owned subsidiary of Harbin Power.
"EPC Contract Liquidated Damages" means liquidated
damages as defined in the EPC Contract.
"EPC Contractor Parent Guarantee" means the guarantee
to be given by Harbin Power in favor of Tangshan Panda and
Tangshan Pan-Western in respect of the EPC Contractor's
obligations under the EPC Contract, as the same may from time to
time be amended, supplemented or otherwise modified.
"Event of Default" shall have the meaning given to such
term in Section 7.1.
"Event of Loss" means an event which causes all or a
portion of the Facility to be damaged, destroyed or rendered
unfit for normal use for any reason whatsoever, other than an
Expropriation Event.
"Expropriation Event" means any condemnation,
nationalization, seizing, or expropriation by any Government
Instrumentality of all or a substantial portion of the Project or
the property or assets of the Borrower or of its share capital,
or any Government Instrumentality shall have assumed custody or
control of such property or other assets or business operations
of the Borrower or of its share capital, or shall have taken any
action for the dissolution or disestablishment of the Borrower or
any action that would prevent the Borrower or its officers from
carrying on its business or operations or a substantial part
thereof.
"Expropriation Proceeds" means any proceeds received by
the Borrower as a result of the occurrence of an Expropriation
Event.
"Facility" shall have the meaning stated in the first
WHEREAS clause of this Agreement.
"Facility Budget" means the construction budget and
schedule provided by the Lender (containing customary assumptions
and qualifications) approved as reasonable by the Project
Engineer prior to the making of the first Loan pursuant to this
Agreement, and as it thereafter may be amended with the approval
of the Lender.
"Facility Costs" means all costs incurred, or to be
incurred, in connection with the development, design,
engineering, procurement, construction and commissioning of the
Facility, which costs shall include, but not be limited to: (a)
all costs incurred under the EPC Contract, (b) Development
Expenses, (c) O&M Costs incurred in connection with the start up
of the Facility or otherwise prior to the Commercial Operation
Date, (d) actual interest costs (including, prior to Commercial
Operation, interest due and payable on the Loans) and amounts
required pursuant to the Debt Service Reserve Requirement,
closing and administration costs related to the Facility until
the Commercial Operation Date, (e) the costs of acquiring
Governmental Authorizations for the Facility prior to the
Commercial Operation Date and (f) without duplication, working
capital costs.
"Fair Market Value" or "fair value" means, with respect
to any asset or property, the price which could be negotiated in
an arm's-length market transaction, for cash, between a willing
seller and a willing buyer, neither of whom is under undue
pressures or compulsion to complete the transaction. Fair Market
Value shall be determined by the board of directors of the
Borrower acting in good faith and shall be evidenced by a board
resolution delivered to the Lender except that any determination
of Fair Market Value made with respect to any parcel of real
property shall be made by an independent appraiser.
"Financing Agreements" means, collectively, this
Agreement, the Guarantees, the Project Notes, the other
Shareholder Loan Agreements, each individually a "Financing
Agreement".
"Foreign Debt Account" shall have the meaning ascribed
to it in Section 5.5.
"Foreign Debt Repayment Account" shall have the meaning
ascribed to it in Section 5.5.
"FPA" means the United States Federal Power Act, as
amended, excluding Sections I-18, 21-30, 202(c), 210, 211, 212,
305(c) and any necessary enforcement provision of Part III of the
Act with regard to the foregoing sections.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession of the United States, which are applicable
as of the date hereof.
"Governmental Authorizations" means all authorizations,
consents, decrees, permits, waivers, privilege approvals from and
filings with all Governmental Instrumentalities necessary for the
realization of the Project in accordance with the Project
Documents.
"Governmental Instrumentality" of any country shall
mean such country and its government and any ministry,
department, political subdivision, instrumentality, agency,
corporation or commission under the direct or indirect control of
such country.
"Guarantees" means collectively, the undertakings by
Tangshan Panda, each executed as of the 22nd day of September,
1996 to unconditionally and irrevocably guarantee to the Lender
the prompt payment and performance by each of Tangshan Pan-
Western, Tangshan Cayman and Tangshan Pan-Sino of their
individual obligations to Lender pursuant to any Indebtedness
obligation then or thereafter due and owing by any such party to
Lender; the undertakings by Tangshan Pan-Western, each executed
as of the 22nd day of September, 1996, to unconditionally and
irrevocably guarantee to the Lender the prompt payment and
performance by each of Tangshan Panda, Tangshan Cayman, and
Tangshan Pan-Sino of their individual obligations to Lender
pursuant to any Indebtedness obligation then or thereafter due
and owing by any such party to Lender; the undertakings by
Tangshan Cayman, each executed as of the 22nd day of September,
1996 to unconditionally and irrevocably guarantee to the Lender
the prompt payment and performance by each of Tangshan Panda,
Tangshan Pan-Western and Tangshan Pan-Sino of their individual
obligations to Lender pursuant to any Indebtedness obligation
then or thereafter due and owing by any such party to Lender; and
the undertakings by Tangshan Pan-Sino, each executed as of the
22nd day of September, 1996 to unconditionally and irrevocably
guarantee to the Lender the prompt payment and performance by
each of Tangshan Panda, Tangshan Pan-Western and Tangshan Cayman
of their individual obligations to Lender pursuant to any
Indebtedness obligation then or thereafter due and owing by any
such party to Lender.
"Harbin Power" means Harbin Power Equipment Group
Company, a PRC Company.
"Heat Supply Contracts" means the contracts to supply
steam and hot water to various PRC industrial and commercial
users that have been assigned by Luannan Heat and Power Plant to
Tangshan Pan-Sino, or any similar contracts in addition to or in
replacement thereof.
"Indebtedness" means, with respect to any Person,
without duplication, (i) any liability, contingent or otherwise,
of such Person (A) for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (B) evidenced by a note,
debenture or similar instrument or letters of credit (including a
purchase money obligation) or (C) for the payment of money
relating to a capitalized lease obligation or other obligation
relating to the deferred purchase price of property; (ii) any
obligation secured by a Lien to which the property or assets of
such Person are subject, whether or not the obligations secured
thereby shall have been assumed by or shall otherwise be such
Person's legal liability; (iii) the maximum fixed repurchase
price of any redeemable or putable Disqualified Stock; (iv)
contractual obligations to repurchase goods sold or distributed;
(v) obligations of a Person in respect of interest rate or
currency exchange agreements to the extent they appear on the
balance sheet; (vi) any and all deferrals, renewals, extensions
and refundings of, or amendments, modifications or supplements
to, any liability of the kind described in any of the preceding
clauses (i) - (v); and (vii) any liability of others of the kind
described in clauses (i) - (vi) which the Person has guaranteed
or which is otherwise directly or indirectly its legal liability.
"Independent Accountants" means an internationally
recognized accounting firm.
"Independent Insurance Consultant" means Sedgwick, PLC,
a corporation incorporated in accordance with the laws of the
United Kingdom, or its successors.
"Inter-Company Steam Sales Agreement" means the Water,
Heat, Steam and Hot Water Supply and Usage Agreement, dated as of
October 3, 1996 between Tangshan Cayman and Tangshan Panda.
"Interconnection Agreement" means the General
Interconnection Agreement dated September 22, 1995, between NCPGC
and Tangshan Panda and Tangshan Pan-Western, as the same may from
time to time be amended, supplemented or otherwise modified.
"Interconnection Dispatch Agreement" means the
agreement to be negotiated among Tangshan Power Supply Bureau of
NCPGC, Tangshan Panda and Tangshan pan-Western shortly prior to
the Commercial Operation Date of the Project concerning specific
details as to the dispatch of the Luannan Facility.
"Interest Expense" means, for any period, the sum of
(a) the total interest expense of the Person in question for such
period as determined in accordance with GAAP, including, without
limitation, (i) amortization of debt issuance costs or of
original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in
accordance with the effective interest method of accounting, (ii)
accrued interest, (iii) noncash interest payments, (iv)
commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing,
(v) interest actually paid by the Person in question under any
guarantee of Indebtedness or other obligation of any other Person
and (vi) net costs associated with interest rate agreements
(including amortization of discounts) and currency agreements,
plus (b) capitalized interest plus (c) dividends paid in respect
of preferred stock of the Person in question, held by Persons
other than the Person in question.
"Joint Venture Companies" means, collectively Tangshan
Panda, Tangshan Pan-Western, Tangshan Cayman and Tangshan Pan-
Sino.
"Legal Requirements" means all laws, statutes, orders,
decrees, injunctions, licenses, permits, approvals, agreements
and regulations of any Governmental Instrumentality having
jurisdiction over the matter in question.
"Lender" means Pan-Western Energy Corporation LLC, a
Cayman Islands corporation.
"Lien" means any mortgage, lien (statutory or other),
pledge, security interest, encumbrance, claim, hypothecation,
assignment for security, deposit arrangement or preference or
other security agreement of any kind or nature whatsoever. For
purposes of this Agreement, a Person shall be deemed to own
subject to a lien any property which it has acquired or holds
subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement relating to such Person.
"Loans" means the loans made under this Agreement.
"Luanhua Co." means Tangshan Luanhua (Group) Co., a
company organized under the laws of the PRC.
"Luannan Government" means the government of Luannan
County, Tangshan City, Hebei Province, PRC.
"Luannan Heat Company" means Luannan County Heat
Company, Ltd. a company organized under the laws of the PRC.
"Luannan Heat & Power" means Luannan County Heat &
Power Plant, a company organized under the laws of the PRC.
"Major Maintenance Reserve Account" shall have the
meaning ascribed to it in subsection 5.5.
"Major Maintenance Reserve Requirement" means, with
respect to any month, an amount established periodically by the
Project Engineer, based on anticipated major maintenance
requirements for the next five years, to constitute the Major
Maintenance Reserve Requirement for the Facility for such month.
"Material Adverse Effect" means (i) a material adverse
change in the financial condition of the Joint Venture Companies
taken as a whole or (ii) any event or occurrence which could
reasonably be expected to materially and adversely affect: (a)
the construction or operation of the Project or (b) the Joint
Venture Companies' ability (taken as a whole) to perform any of
their obligations under the Project Documents.
"Material Project Documents" means, collectively, the
Power Purchase Agreement, the EPC Contract, the Transmission
Facilities Construction Agreement, the O&M Agreement, the Coal
Supply Agreements, the Coal Transportation Agreement and all
other instruments, agreements or other documents arising from or
related to the Project, but shall not include any Financing
Agreement.
"Maturity Date" means April 1, 2004.
"Moody's" means Xxxxx'x Investors Services.
"NCPGC" means North China Power Group Company, a
company organized under the laws of the PRC.
"Net Cash Proceeds" in connection with (a) any Asset
Sale, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of
deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise,
but only as and when received) of such Asset Sale, net of
attorneys' fees, accountants' fees, investment banking fees,
survey costs, title insurance premiums, amounts required to be
applied to the repayment of Indebtedness secured by a Lien
expressly permitted hereunder on any asset which is the subject
of such Asset Sale and other customary fees and expenses actually
incurred in connection therewith, net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax
sharing arrangements) and net of purchase price adjustments
reason.
"Net Debt Service" means the sum of (i) (a) Interest
Expense less (b) non-cash Interest Expense plus (ii) all payments
of scheduled and overdue principal of, and premium, if any, on
Indebtedness plus (iii) without duplication, all rental payments
in respect of Capitalized Lease Obligations paid, accrued, or
scheduled to be paid or accrued.
"Non-Excluded Taxes" shall have the meaning ascribed to
it subsection 5.16.
"Nonrecourse Persons" shall have the meaning ascribed
to it in Article 8.
"O&M" means operation and maintenance services.
"O&M Agreement" means the Amended and Restated
Operation and Maintenance Agreement, dated as of March 6, 1997,
among the Joint Ventures and Duke/Fluor Xxxxxx Xxxx, Inc., a
California corporation.
"O&M Costs" means all amounts disbursed by or on behalf
of the Borrower for operation, maintenance, repair, or
improvement of the Facility, including, without limitation,
premiums on insurance policies, property, income and all other
taxes to the extent paid, and payments under the relevant
operating and maintenance agreements, leases (including Operating
Lease Obligations), royalty and other land use agreements, and
any other payments required under the Project Documents, each as
determined on a cash basis and otherwise in accordance with GAAP.
"Obligations" means all loans, advances, debts,
liabilities, and obligations, howsoever arising, owed by the
Borrower to the Lender or existing or hereafter arising hereunder
or pursuant to the terms of any of the Financing Agreements or
any of the other Project Documents, including all interest, fees,
charges and expenses chargeable to the Borrower; and in the event
of any proceeding for the collection or enforcement of the
Obligations, after an event of default shall have occurred and be
continuing, any exercise by the Lender, together with reasonable
attorney's fees and court costs.
"Officer's Certificate" means a certificate of an
authorized representative of the Borrower, signed by the
Chairman, the President, a Vice President, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of
the Borrower.
"On-Shore Accounts" has the meaning set forth in
subsection 5.5.
"Operating Lease Obligations" means any obligation of
the Person in question incurred or assumed under or in connection
with any lease of real or personal property which, in accordance
with GAAP, is not required to be classified and accounted for as
a capital lease.
"Other Taxes" means any other excise or property taxes,
charges or similar levies that arise under the laws of any
jurisdiction on any payment made under this Agreement or under
any other Financing Agreement or from the execution or delivery
or otherwise with respect to this Agreement or any other
Financing Agreement.
"Panda International" means Panda Energy International
Inc., a Texas corporation.
"Performance Bonus Payment" means an amount payable to
the EPC Contractor pursuant to subsections 13.3 and 13.4 of the
EPC Contract.
"Permitted Indebtedness" has the meaning set forth in
subsection 6.1.
"Permitted Liens" means (a) Liens for any tax,
assessment or other governmental charge not yet due, due but
payable without penalty or being contested in good faith and by
appropriate proceedings, (b) retentions of title in favor of
materialmen, workers or repairmen, or other like Liens arising in
the ordinary course of business or in connection with the
construction of the Project, (c) Liens arising out of judgments
or awards so long as an appeal or proceeding for review is being
prosecuted in good faith, (d) mineral rights the use and
enjoyment of which do not materially interfere with the use and
enjoyment of the Facility, (e) Liens, deposits or pledges to
secure statutory obligations or performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or
leases, or for purposes of like general nature in the ordinary
course of the Borrower's business and affecting property with a
value not exceeding the equivalent of US$250,000 at any one time,
(f) involuntary Liens (including a Lien of an attachment,
judgment or execution) securing a charge or obligation, on any of
the Borrower's property, real or personal, whether now or
hereafter owned with a value not exceeding the equivalent of
US$250,000 at any one time, (g) rights of any party pursuant to
any Project Document, (h) Liens securing workers' compensation,
unemployment insurance or other social security or pension
obligations, (i) Liens securing Indebtedness permitted pursuant
to Section 6.1 (to the extent not required by Section 6.1 to be
unsecured), (j) Liens securing the purchase price of property
having an aggregate value not exceeding the equivalent of
US$1,000,000 at any one time an (k) Liens securing other
obligations not constituting Indebtedness none of which could
reasonably be expected to have a Material Adverse Effect.
"Person" means any natural person, corporation,
partnership, firm, association, Governmental Instrumentality or
any other entity whether acting in an individual, fiduciary or
other capacity.
"PRC" or "China" means the People's Republic of China.
"PRC Shareholders" means collectively, Luannan Heat and
Power and Luanhua Co.
"Pricing Document" means the document or documents
(issued by the Tangshan Municipal Price Bureau) determining the
price for electric energy delivered, retail price and principals
for adjustment.
"Project" shall have the meaning stated in the first
WHEREAS clause of this Agreement.
"Project Documents" means this Agreement and all
instruments, contracts, agreements or other documents arising
from or related to the Project, including all Financing
Agreements, each individually a "Project Document".
"Project Engineer" means Xxxxxxx Brinckerhoff Energy
Services Inc., or its successor.
"Project Note" has the meaning given that term in
Section 2.3.
"Power Purchase Agreement" means, collectively, the
Energy Purchase Agreement, the Interconnection Agreement and the
Supplemental Agreement (and, after execution thereof, the
Interconnection Dispatch Agreement).
"PUHCA" means the United States Public Utility Holding
Company Act of 1935, as amended, and all rules and regulations
adopted thereunder.
"Registered Capital Account" shall have the meaning
ascribed to it in Section 5.5.
"Registration Certificate" has the meaning given to
such term in Section 3.5.
"Renminbi" or "RMB" means lawful currency of the PRC.
"Registered Capital Contribution and Agency Agreement"
means the agreement among each of the Joint Venture Companies and
their respective shareholders, dated as of March 26, 1997 (as
amended, modified and supplemented from time to time) pursuant to
which the Joint Venture Companies are entitled to receive equity
contributions.
"RMB Permitted Investments" means deposit accounts
denominated and payable in RMB to be maintained at, certificates
of deposit issued, or obligations issued or guaranteed by, one of
the following policy or commercial banks in the PRC: (i) the
Bank of China, (ii) the China Construction Bank, (iii) the
Communication Bank, (iv) the China Farmers Bank, (v) the China
International Trust and Investment Corporation (vi) any foreign
bank or branch of any foreign bank authorized and licensed to
conduct business in the PRC, including without limitation, the
establishment and maintenance of RMB and foreign currency
accounts and exchange functions having a combined capital and
surplus of at least $500,000,000 and having at least an
investment grade rating assigned to its long-term unsecured debt
securities by each of Standard & Poor's and Moody's.
"RMB Revenue Account" shall have the meaning ascribed
to it in Section 5.5.
"RMB Checking Account" shall have the meaning ascribed
to it in Section 5.5.
"SAFE" means the State Administration of Foreign
Exchange of the PRC.
"Shareholder Loan Agreements" means, collectively, this
Agreement and the Shareholder Loan Agreements, each dated as of
September 24, 1996, between the Lender and (i) Tangshan Pan-
Western, (ii) Tangshan Cayman and (iii) Tangshan Pan-Sino, as the
same may from time to time be amended, supplemented or otherwise
modified.
"Shareholders" means the Lender and the PRC
Shareholders.
"Site" means the approximately 200 square meters of
land on which the Facility is to be located.
"Standard & Poor's" means Standard & Poor's Ratings
Service.
"Steam Sales Agreements" means the Heat Supply
Contracts and the Inter-Company Steam Sales Agreement.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a)
the sole general partner or the managing general partner of which
is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Supplemental Agreement" means Supplemental Agreement
for General Interconnection Agreement and Electric Energy
Purchase and Sales Agreement, dated February 10, 1996, among
NCPGC, Tangshan Panda and Tangshan Pan-Western, as the same may
from time to time be amended, supplemented or otherwise modified.
"Tangshan Cayman" means Tangshan Cayman Heat and Power
Co., Ltd., a Sino-foreign equity joint venture with limited
liability organized under the laws of the PRC.
"Tangshan Panda" means Tangshan Panda Heat and Power
Co., Ltd., a Sino-foreign equity joint venture with limited
liability organized under the laws of the PRC.
"Tangshan Pan-Sino" means Tangshan Pan-Sino Heat Co.,
Ltd., a Sino-foreign equity joint venture with limited liability
organized under the laws of the PRC.
"Tangshan Pan-Western" means Tangshan Pan-Western Heat
and Power Co., Ltd., a Sino-foreign equity joint venture with
limited liability organized under the laws of the PRC.
"Transmission Facilities" means three new substations,
the upgrades of both an existing substation and an existing
switching station and approximately 43 km of 110 KV transmission
lines to interconnect the Project to the Xxxx-Xxx-Xxxx Grid.
"Transmission Facilities Construction Agreement" means
the construction agreement, dated February 10, 1996, among
Tangshan Panda, Tangshan Pan-Western and NCPGC.
"Transmission Loan" means the loan made by Tangshan Pan-
Sino to NCPGC through a PRC financial intermediary for the
construction cost of the Transmission Facilities, in the amount
of RMB 78,218,000, to be adjusted for inflation from December 31,
1994 to the date of issuance of the notice to proceed with
preliminary design and for accrued interest during the
construction period.
ARTICLE 2 - THE CREDIT FACILITY
2.1 Credit Facility. Subject to the terms and conditions
set forth in Article 3, the Lender shall from time to time make
shareholder loans to the Borrower in an aggregate amount of
US$17,664,000 (the "Loans").
2.2 Interest Payments.
2.2.1 Interest Payment Dates. The Borrower shall
pay accrued interest on the unpaid principal amount of the Loans
semiannually in arrears on each June 30 and December 31,
commencing June 30, 1997, until the first such date to occur not
less than six months after the Commercial Operation Date, and on
the last day of each month thereafter.
2.2.2 Interest. The Borrower shall pay accrued
interest on the unpaid principal amount of the Loans from the
date of this Agreement (i) through the first June 30 or December
31 to occur not less than six months after the Commercial
Operation Date, at a rate per annum of 13.75%, subject to a
maximum applicable to all interest accrued in respect of such
period and all amounts due in respect thereof pursuant to Section
5.16 hereof of $4,010,273, and (b) thereafter until the maturity
thereof at a rate per annum equal to 12.75%.
2.3 Project Note. The obligation of the Borrower to repay
the Loans and to pay interest thereon at the rate provided herein
shall be evidenced by a promissory note substantially in the form
of Exhibit A, payable to the order of the Lender and in the
principal amount of SEVENTEEN MILLION SIX HUNDRED SIXTY-FOUR
THOUSAND DOLLARS (US$17,664,000) (the "Project Note"). The
Borrower authorizes the Lender to record on the schedule annexed
to the Project Note, each payment or prepayment of principal of
the Loans and agrees that all such notations shall be prima facie
evidence of the information recorded. The Borrower further
authorizes the Lender to attach to and make a part of the Project
Note continuations of the schedule attached thereto as necessary.
No failure to make any such notations, nor any errors in making
any such notations, shall affect the validity of the Borrower's
obligations to repay the full unpaid principal amount of the
Loans or the duties of the Borrower hereunder or thereunder.
2.4 Repayment of the Loans.
2.4.1 Payments. The Borrower shall make all
payments hereunder to an account which the Lender shall specify
by notice to Borrower prior to the date of the first payment of
interest hereunder. The aggregate unpaid principal amount of the
Loans shall be payable in installments on or before 10:00 A.M.,
Beijing time, on each Repayment Date in accordance with the
amortization schedule set forth on Schedule B, and any remaining
unpaid principal, interest, fees and costs shall be due and
payable on the Maturity Date.
2.4.2 Application of Payments. If the amount of
any payment made by the Borrower hereunder is less than the total
amount due and payable by the Borrower to the Lender as of the
date on which such payment is actually made by the Borrower, such
payment shall be applied: (i) first, against charges, fees,
costs and expenses due hereunder; (ii) second, if the principal
of the Loans shall not have become or be then due and payable,
against interest on the overdue principal of the Loans (including
amounts payable in respect thereof pursuant to Section 5.16) in
order of maturity of such installments of interest and against
interest on such overdue interest; (iii) third, if the principal
of the Loans shall have become or shall be then due and payable,
against the whole amount of all such principal, interest on
overdue principal of the Loans (including amounts payable in
respect thereof pursuant to Section 5.16) and interest on such
overdue interest; and (iv) fourth, against all other amounts then
due and payable to the Lender hereunder.
2.5 Prepayments.
2.5.1 Voluntary Prepayments. Except as required by
this Agreement, the Borrower may not prepay Loans without the
permission of the Lender.
2.5.2 Certain Mandatory Prepayments. In addition
to other amounts which shall be applied to the prepayment of
Loans as provided in this Agreement, the Borrower shall apply to
prepayment of the principal of the Loan, within ten Business Days
following receipt thereof, (i) all Net Cash Proceeds from the
sale or other disposition of all or any part of the assets or
other rights of the Borrower, other than in the ordinary course
of business and permitted pursuant to the terms of the Financing
Agreements, having a value, individually in excess of US$100,000
and in the aggregate in any year, in excess of US$250,000, and
(ii) any Liquidated Damages which shall have been made by the EPC
Contractor to the Borrower under the EPC Contract.
2.5.3 Expropriation Event; Event of Loss. (a) If
an Expropriation Event shall occur with respect to the Facility
or any part thereof, the Borrower shall (i) diligently pursue all
of its rights to compensation against the appropriate
Governmental Instrumentality in respect of such event, (ii) not
compromise, settle or consent to the settlement of any claim in
respect thereof without the consent of the Lender, and (iii)
promptly deposit all proceeds received in respect of any
Expropriation Event (after deducting all reasonable expenses) (A)
in the RMB Revenue Account if denominated in RMB or (B) in the
Foreign Debt Repayment Account if denominated in Dollars, in each
case segregated from all other moneys pending the determination
pursuant to paragraph (c) below.
(b) If an Event of Loss shall occur with respect
to the Facility or any part thereof, the Borrower shall (i)
diligently pursue all its rights to compensation with respect to
such Event of Loss, (ii) not compromise, settle or consent to the
settlement of any claim exceeding $250,000 in respect thereof
without the consent of the Lender, and (iii) promptly deposit all
proceeds received in respect of any Event of Loss (after
deducting all reasonable expenses) which are denominated in RMB
in the RMB Revenue Account, and transfer to the Lender any such
proceeds which are denominated in U.S. Dollars, to be held by the
Lender and segregated from all other moneys pending the
determination pursuant to paragraph (c) below.
(c) If such Expropriation Event or an Event of
Loss shall occur, as soon as reasonably practicable, but no later
than fifteen (15) days after the date of receipt by the Borrower
of any proceeds in respect thereof, the Borrower shall make a
reasonable good faith determination as to whether (i) the
Facility can be rebuilt, repaired or restored to permit operation
of the entire Project on a Commercially Feasible Basis, and (ii)
the proceeds thereof, together with any other amounts that the
Borrower has available to commit to such rebuilding, repair or
restoration, are sufficient to pay for such rebuilding, repair or
restoration of the Facility. The determination of the Borrower
shall be evidenced by a certificate filed with the Lender which,
in the event the Borrower determines that the Facility can be
rebuilt, repaired or restored to permit operation of the entire
Project or a portion thereof on a commercially feasible basis,
shall also certify that such proceeds, together with any other
amounts that the Borrower is willing to commit to such
rebuilding, repair or restoration, are sufficient to pay the
costs thereof, and shall also set forth a reasonable good faith
estimate by the Borrower of such costs. If the amount of such
costs exceeds $500,000, such certificate shall be accompanied by
a Project Engineer's certificate, dated within five (5) days of
the date of the Borrower's certificate, stating that, based upon
reasonable investigation and a review of the determination made
by the Borrower, the Project Engineer believes that the
determination and the estimate of the total cost, if any, set
forth in the Borrower's certificate to be reasonable.
(d) In the event that the Borrower determines not
to rebuild, repair or restore the Facility, all of the proceeds
of such Expropriation Event or Event of Loss shall be transferred
within ten Business Days after the date of such determination to
the Lender and applied to prepayment of the Loans.
(e) In the event that the determination is made
to rebuild, repair or restore the Facility, all of the proceeds
of such Expropriation Event or Event of Loss on deposit in the
RMB Revenue Account shall be transferred to the RMB Checking
Account and, together with the amounts (if any) previously
transferred to the Lender in connection with such Expropriation
Event or Event of Loss and such other amounts as the Borrower has
available for such rebuilding, repair or restoration (which also
shall be transferred to the Lender prior to any disbursement for
rebuilding, repair or restorations), shall be used to pay the
costs of such rebuilding, repair or restoration, and any excess
shall, upon completion of such rebuilding, repair or restoration,
be applied to the prepayment of the Loans within 15 days of the
completion of such rebuilding, repair or restoration as certified
by the Project Engineer.
2.6 Fees. Not more than thirty (30) days following the
making of the first Loan hereunder, the Borrower shall reimburse
the Lender for its reasonable costs other than interest costs
incurred in funding the Loans.
ARTICLE 3 - CONDITIONS PRECEDENT
The obligation of the Lender to make each Loan shall be
subject to the fulfillment or waiver of each of the following
conditions precedent:
3.1 Borrower's Certificate. The Lender shall have received
from the Borrower a certificate dated the date of the request for
such Loan, certifying the following:
(a) Representations and Warranties. The
representations and warranties made by the Borrower herein or in
any other Project Document to which it is a party, or which are
contained in any certificate, document, financial or other
statement furnished by the Borrower hereunder or thereunder or in
connection herewith or therewith, are true and correct in all
material respects on and as of such date as if made on and as of
such date, except as affected by the consummation of the
transaction contemplated thereby or to extent that such
representations and warranties relate solely to an earlier date;
(b) No Event of Default. No Event of Default is in
existence on such date, or shall occur after giving effect to the
Loan to be made on such date;
(c) Governmental Authorizations and other consents and
approvals. All Governmental Authorizations which are required to
be obtained on or prior to the date of the making of such Loan
have been duly obtained or maintained and are in full force and
effect, except for Governmental Authorizations which have not
been obtained at such time but which the Borrower has no reason
to believe will not be obtained in the normal course of business
prior to the date such Governmental Authorizations are required;
and
(d) Facility Costs. The costs for the payment of
which the borrowing is being made are Facility Costs and payment
of such costs is in accordance with the Facility Budget.
3.2 On-Shore Accounts. The On-Shore Accounts shall have
been established pursuant to Section 5.5.
3.3 Evidence of Facility Costs and Other Expenses. At
least 10 Business Days prior to each such Loan, the Lender shall
have received a copy of the EPC Contractor's application for
payment under the EPC Contract or evidence of or application for
other expenses in connection with the construction and
development of the Facility (together with all supplemental
reports required to be furnished thereunder), and copies of all
invoices and other statements of charges with respect to the
payments to be made to the EPC Contractor pursuant to the EPC
Contract or to the recipient of such other expenses on the date,
or expected to be due and payable within 30 days of, such Loan
and with respect to all other items of Facility Costs to be paid
on such date, or expected to be due and payable within 30 days of
such Loan.
3.4 Progress Report; Project Engineer. The Lender shall
have received a report signed by the Authorized Representative of
the Borrower on the date of each such Loan to the effect that
construction of the Facility is proceeding satisfactorily in
accordance with the EPC Contract and the Facility Budget and the
Facility Budget sets forth accurately the estimated costs to
complete the Facility, and such confirmation thereof from the
Project Engineer as the Lender reasonably deems necessary.
3.5 Registration Certificate. The Lender shall have
received a registration certificate of the Tangshan Municipal
Bureau for Exchange Control (a "Registration Certificate")
evidencing that a Registration Certificate has been obtained for
the full aggregate amount of the Loans to be made hereunder
pursuant to subsection 2.1.
3.6 Equity Contributions; Real Estate Transfers. It shall
be a condition to any Loan hereunder which increases the
aggregate of all loans made under all of the Shareholder Loan
Agreements to more than $15,000,000 that (A) the Borrower shall
have received the full amount of the equity contributions to
which the Borrower is then entitled pursuant to the Registered
Capital Contribution and Agency Agreement (B) all transfers of
land use rights relating to the Site shall have been completed.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
The Borrower makes all of the following representations
and warranties to and in favor of the Lender the date on which
any Loan is made hereunder, except as such representations relate
to an earlier date.
4.1 Organization. The Borrower (a) is a Sino-foreign
equity joint venture with limited liability duly organized and
validly existing under the laws of the PRC, (b) is duly
authorized to do business in the PRC, and (c) has all requisite
power and authority to (i) own or hold under land use right or
lease and operate the property it purports to own or hold under
land use right or lease, (ii) carry on its business as now being
conducted and as now proposed to be conducted in respect of the
Project, (iii) incur Indebtedness, and (iv) execute, deliver and
perform its obligations under each of the Project Documents to
which it is a party. The sole shareholders of the Borrower are
the Lender and the PRC Shareholders.
4.2 Authorization; No Conflict. The Borrower has duly
authorized, executed and delivered the Project Documents to which
it is a party, and neither its execution and delivery thereof nor
its consummation of the transactions contemplated thereby nor its
compliance with the terms thereof (a) does or will contravene its
formation documents or any other Legal Requirement then
applicable to or binding on it, (b) does or will contravene or
result in any breach or constitute any default under, or result
in or require the creation of any Lien upon any of its property
or under any agreement or instrument to which it is a party or by
which it or any of its properties may be bound, or (c) does or
will require the consent or approval of any Person.
4.3 Legality, Validity and Enforceability. Each of the
Project Documents to which the Borrower is a party is a legal,
valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, subject to bankruptcy
laws or principles of equity, to the extent applicable to the
Borrower. None of the Project Documents to which the Borrower is
a party has been amended or modified except in accordance with
this Agreement.
4.4 Compliance with Law, Governmental Authorizations and
Project Documents. The Borrower is in compliance in all material
respects with all Legal Requirements and Governmental
Authorizations and Project Documents to which it is a party, and
no notices of violation of any Governmental Authorization or
Project Document relating to the Project have been issued,
entered or received by the Borrower.
4.5 Governmental Authorizations. There are no Governmental
Authorizations under Legal Requirements existing as of the date
of this Agreement that are required or will become required,
other than the Governmental Authorizations (a) which have been
obtained or granted and are in full force and effect, or (b)
which the Borrower has no reason to believe will not be obtained
before they become necessary for the ownership, construction,
financing or operation of the Facility. To the best of its
knowledge, the Borrower is not in violation of any condition in
any Governmental Authorization.
4.6 Litigation. There are no pending or, to the Borrower's
knowledge, threatened actions, suits, proceedings or
investigations of any kind, including actions or proceedings of
or before any Governmental Instrumentality, to which the Borrower
or any Shareholder or, to the knowledge of the Borrower, is a
party or is subject, or by which any of them or any of their
properties are bound.
4.7 Existing Defaults. There is no Event of Default by the
Borrower under any of the Material Project Documents. To the
best of the Borrower's knowledge, there is no event of default
under any Material Project Document by any party to such Material
Project Document.
4.8 Taxes. The Borrower has filed, or caused to be filed,
all tax and informational returns that are required to have been
filed by it in any jurisdiction, and has paid all taxes shown to
be due and payable on such returns and all other taxes and
assessments payable by it, to the extent the same have become due
and payable (other than those taxes that it is contesting in good
faith and by appropriate proceedings, with adequate, segregated
reserves established for such taxes) and, to the extent such
taxes are not due, has established reserves that are adequate for
the payment thereof and are required by the GAAP.
4.9 Contingent Liabilities. The Borrower has no material
contingent liabilities or obligations except those authorized
under and permitted by the Project Documents and the Financing
Agreements.
4.10 Business, Debt, Contracts, Etc. The Borrower has not
conducted any business other than the business contemplated by
the Project Documents to which it is a party, has no outstanding
Indebtedness other than Indebtedness incurred under the Financing
Agreements or permitted under Section 6.1 and has no other
liabilities other than those incurred under the Project Documents
or permitted under this Agreement, and is not a party to or bound
by any contract other than as contemplated by the Project
Documents to which Borrower is a party and those contracts
permitted under this Agreement. The Borrower has established
offices in the PRC only.
4.11 Representations and Warranties. All representations
and warranties of the Borrower contained in the Project Documents
are true and correct in all material respects and the Borrower
hereby confirms each such representation and warranty of the
Borrower with the same effect as if set forth in full herein.
4.12 Utilities. All utility services and easements
necessary for the construction and the operation of the Facility
for its intended purposes, are or will be available at the Site
as and when required on commercially reasonable terms.
4.13 Project Documents.
4.13.1 The Lender has received a true, complete and
correct copy of each of the Project Documents in effect or
required to be in effect as of the date this representation is
made or deemed made (including all exhibits, schedules, side
letters and disclosure letters to therein or delivered pursuant
thereto, if any).
4.13.2 All conditions precedent to the obligations
of the respective parties under the Material Project Documents
have been satisfied or waived in accordance with the provisions
thereof and hereof, except for such conditions precedent which by
their terms cannot be met until a later stage in the construction
or operation of the Facility, and the Borrower has no reason to
believe that any such condition precedent cannot be satisfied on
or prior to the appropriate stage in the construction or
operation of the Facility.
4.14 Fees and Enforcement. Other than amounts that have
been paid in full, no fees or taxes, including without limitation
stamp, transaction, registration or similar taxes, are required
to be paid for the legality, validity, or enforceability of this
Agreement or any of the other Project Documents.
4.15 Immunity. In any proceedings in the PRC or elsewhere
in connection with any of the Project Documents to which the
Borrower is a party, the Borrower will not be entitled to claim
for itself or any of its assets immunity from suit, execution,
attachment or other legal process.
4.16 Subsidiaries and Beneficial Interest. The Borrower has
no subsidiaries and does not beneficially own the whole or any
part of the issued share capital or other ownership interest of
any other company or corporation or other Person.
4.17 No Other Powers of Attorney, etc. The Borrower has not
executed and delivered any powers of attorney, fiduciary transfer
agreements or similar documents, instruments or agreements,
except for powers authorizing signatures of various Project
Documents.
4.18 Liens. The Borrower has not secured or agreed to
secure any Indebtedness by any Lien upon any of its present or
future revenues or assets or capital stock except Permitted
Liens. The Borrower does not have any outstanding Lien or
obligation to create Liens on or with respect to any of its
properties or revenues except Permitted Liens.
4.19 Regulation of Parties. The Borrower is not nor will it
be, solely as a result of its participation in the transactions
contemplated hereby or by any other Project Document, or as a
result of the ownership, use or operation of the Facility,
subject to regulation by any Governmental Instrumentality of the
United States as a "public utility," an "electric utility," an
"electric utility holding company" or a "public utility holding
company." The Borrower is not subject to regulation as a
"subsidiary company" or an "affiliate" of a "holding company"
under (and as defined in) PUHCA.
4.20 Transactions with Affiliates. Except as otherwise
permitted under Section 6.10, the Borrower is not a party to any
contracts or agreements with, or any other commitments to,
whether or not in the ordinary course of business, any Affiliate
of the Borrower.
ARTICLE 5 - AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that until all
Obligations owed to the Lender are paid in full it will:
5.1 Repayment of Indebtedness. Repay in accordance with
its terms, all Indebtedness, including without limitation, all
sums due under this Agreement and the other Financing Agreements
but, in the case of any such Indebtedness with a repayment that
is limited by any term of any Financing Agreement, repay subject
to such limitation.
5.2 Existence, Conduct of Business, Properties, Etc.
Except as otherwise expressly permitted under this Agreement,
(i) maintain and preserve its existence as a Sino-foreign joint
venture with limited liability and all rights, privileges and
franchises necessary or desirable in the normal conduct of its
business, and (ii) engage only in the business contemplated by
the Financing Agreements and the Project Documents.
5.3 Performance of Covenants and Obligations. The Borrower
shall perform and observe in all material respects, its covenants
and obligations under all Material Project Documents.
5.4 Use of Funds. The Borrower shall use the proceeds of
the Loans only for deposit in the On-Shore Accounts pending
disbursement for the payment of Facility Costs as provided
herein.
5.5 Accounts. (a) On or prior to the date of the making
of the first Loan, the Borrower shall establish the following
accounts with banks or financial institutions in the PRC in
accordance with applicable PRC laws and regulations: (i) the
Registered Capital Account denominated in U.S. Dollars (the
"Registered Capital Account"), (ii) the Foreign Debt Account
denominated in U.S. Dollars (the "Foreign Debt Account"), (iii)
the Foreign Debt Repayment Account denominated in U.S. Dollars
(the "Foreign Debt Repayment Account"), (iv) the Basic Settlement
Account denominated in U.S. Dollars (the "Basic Settlement
Account"), (v) the RMB Revenue Account denominated in Renminbi
(the "RMB Revenue Account"), (vi) the RMB Checking Account
denominated in Renminbi (the "RMB Checking Account"), and (vii)
the Major Maintenance Reserve Account denominated in Renminbi
(the "Major Maintenance Reserve Account") (collectively, the "On-
Shore Accounts").
(b) The proceeds of all Loans shall be deposited in
the Foreign Debt Account. Funds in the Foreign Debt Account
shall not be used for any purpose other than disbursement of
Facility Costs denominated in U.S. Dollars or funding of reserves
for the payment of principal and interest on the Loans, or, after
conversion into RMB, transfer to the RMB Checking Account for
disbursement of Facility Costs denominated in RMB.
(c) All funds received by the Borrower constituting
capital contributions from any shareholder shall be deposited in
the Registered Capital Account. Until after Commercial Operation
Date, funds in the Registered Capital Account shall not be used
for any purpose other than disbursement of Facility Costs
denominated in the U.S. Dollars or, after conversion into RMB,
transfer to the RMB Checking Account for disbursement of Facility
Costs denominated in RMB.
(d) All revenues received by the Borrower from any
source whatsoever shall be deposited (after conversion into
Renminbi, if necessary) into the RMB Revenue Account. The
Borrower shall instruct NCPGC, the EPC Contractor and other
participants in the Project to deposit revenues, penalties or
other payments owing to the Borrower in RMB directly into the RMB
Revenue Account. The RMB Revenue Account shall not be used for
any purpose other than (and in accordance with the following
priority): (i) the transfer of funds to the RMB Checking Account
for the payment of O&M Costs and (ii) after conversion into U.S.
Dollars, the transfer of funds to the Foreign Debt Repayment
Account for the payment of the principal of and interest on the
Loans or reserves in respect thereof.
(e) Amounts remaining in the RMB Revenue Account
subsequent to disbursement in accordance with clause (d) hereof
shall be deposited into the Major Maintenance Reserve Account in
an amount equal to the Major Maintenance Reserve Requirement.
Disbursement shall be made from the Major Maintenance Reserve
Account only to pay for major maintenance costs of the Facility
upon a certification of the Project Engineer that after
withdrawal of such funds for such purpose, the amounts remaining
in the Major Maintenance Reserve Account (including anticipated
future funding thereof) shall be adequate to meet the anticipated
needs of the Facility for major maintenance for the next five
years.
(f) Amounts remaining in the RMB Revenue Account
subsequent to disbursements in accordance with clauses (d) and
(e) hereof shall be retained in the RMB Revenue Account pending
disbursement to the Borrower's Shareholders in the form of
dividends. The amount designated for the payment of dividends to
the Lender in its capacity as a shareholder of the Borrower shall
be transferred from the RMB Revenue Account (after conversion to
U.S. Dollars) to the Basic Settlement Account and then to the
Lender. The corresponding amount designated for the payment of
dividends to the PRC Shareholders shall be distributed from the
RMB Revenue Account directly to the PRC Shareholders in RMB.
(g) The funds in the Foreign Debt Repayment Account
shall not be used for any purpose other than the payment of
amounts due hereunder pursuant to Subsection 2.4 to an off-shore
account maintained by the Lender.
(h) The funds in the Basic Settlement Account shall
not be used for any purpose other than remittance after the
Commercial Operation Date to an off-shore equity distribution
account approved by the Lender.
5.6 Compliance with Legal Requirements. Promptly and
diligently (i) own, construct, maintain and operate the Facility
in compliance with all applicable Legal Requirements, and
(ii) procure, maintain and comply, or cause to be procured,
maintained and complied with all Governmental Authorizations
required for the ownership, construction, financing, maintenance
or operation of the Facility or any part thereof at or before the
time such Governmental Authorization becomes necessary for the
ownership, construction, financing, maintenance or operation of
the Facility, as the case may be, as contemplated by the Project
Documents and except that the Borrower may, at its expense,
contest by appropriate proceedings conducted in good faith the
validity or application of any such Legal Requirements, provided
that, in either case, (x) neither the Lender nor the Borrower
would be subject to any criminal liability for failure to comply
therewith and (y) all proceedings to enforce such Legal
Requirements against the Lender, the Borrower or the Project or
any part thereof, shall have been duly and effectively stayed
during the entire pendency of such contest.
5.7 Operating Budgets. On or before the anticipated
Commercial Operation Date, deliver to the Lender an annual
operating budget, certified by the Project Engineer as being a
reasonable estimate of projected costs, expenses and revenues of
the Borrower, for the period commencing on the anticipated
Commercial Operation Date, and continuing until the end of the
first full calendar year thereafter, in substantially the same
form as the initial annual operating budget. In advance of each
calendar year thereafter, the Borrower shall adopt and deliver to
the Lender an annual operating budget, certified by the Project
Engineer as being a reasonable estimate of projected costs,
expenses and revenues of the Borrower, for the ensuing calendar
year.
5.8 Books, Records, Access. Maintain adequate books,
accounts and records with respect to the Borrower and the
Facility in compliance with the regulations of any Governmental
Instrumentality having jurisdiction thereof, and, with respect to
financial statements, in accordance with the GAAP and, subject to
reasonable safety requirements, permit employees or designees of
the Lender and the Project Engineer, at any reasonable time and
upon reasonable prior notice to inspect the Facility, and to
examine or audit all of Borrower's books, accounts and records
pertaining or related to the Facility and make copies and
memoranda thereof.
5.9 Financial Statements.
5.9.1 Provide the Lender with:
(a) As soon as available and in any event
within one hundred thirty five (135) days after the close of each
fiscal year commencing with the fiscal year ended after the date
of this Agreement, audited financial statements of the Borrower
including a statement of equity, a balance sheet as of the close
of such year, an income and expense statement, reconciliation of
capital accounts and a statement of sources and uses of funds,
all prepared in accordance with the GAAP and certified by
Independent Accountants.
(b) As soon as available and in any event
within ninety (90) days after the end of each of the quarterly
accounting periods of its fiscal year commencing with the quarter
ending after the date of this Agreement, unaudited financial
statements of the Borrower, including without limitation, an
unaudited balance sheet of the Borrower as of the last day of
such quarterly period, the related statements of income and cash
flows for such quarterly period and (in the case of second, third
and fourth quarterly periods) for the portion of the fiscal year
ending with the last day of such quarterly period, setting forth
in each case in comparative form corresponding unaudited figures
from the preceding fiscal year.
5.9.2 Each time the financial statements of the
Borrower are delivered under this subsection 5.9, a certificate
signed by an Authorized Representative of the Borrower shall be
delivered along with such financial statements, certifying that
such officer has made or caused to be made a review of the
transactions and financial condition of the Borrower during the
relevant fiscal period and that such review has not, to the best
of such Authorized Representative's knowledge, disclosed the
existence of any event or condition which constitutes an Event of
Default under this Agreement, or if any such event or condition
existed or exists, the nature thereof and the corrective actions
that Borrower has taken or proposes to take with respect thereto,
and also certifying that the Borrower is in compliance in all
material respects with its obligations under this Agreement and
each other Financing Agreement to which it is a party or, if such
is not the case, stating the nature of such non-compliance and
the corrective actions which the Borrower has taken or proposes
to take with respect thereto.
5.10 Insurance. The Borrower shall maintain, or cause to be
maintained, adequate insurance with respect to its Facility
satisfactory to the Lender in its reasonable judgment, based upon
the advice of the Independent Insurance Consultant. All
insurance other than third party liability insurance shall name
the Lender as an insured and the sole loss payee thereunder.
Policies for third party liability insurance shall name the
Lender as an additional insured.
5.11 Reports; Cooperation.
5.11.1 Deliver to the Lender on each anniversary of
the date of this Agreement a certificate from the Borrower's
insurers or insurance agents (i) evidencing that the insurance
policies in place satisfy the requirements specified in Section
5.10 (including, without limitation, listing all insurance being
carried by or on behalf of the Borrower pursuant to the Project
Documents and certifying that all insurance required to be
maintained by the Borrower pursuant to the Project Documents is
in full force and effect and all premiums therefore have been
paid in full), and (ii) setting forth a summary of all losses in
excess of US$250,000 (or the equivalent thereof) incurred with
respect to the Project in the preceding year.
5.11.2 Deliver to the Lender within thirty (30) days
following the end of each calendar quarter a quarterly status
report describing in reasonable detail the progress of the
construction of the Facility since the immediately preceding
report hereunder, including without limitation, the cost incurred
to the end of such quarter, an estimate of the time and cost
required for completion of the Facility and such other
information which the Lender may reasonably request.
5.11.3 Prior to the Commercial Operation Date,
deliver to the Lender, within thirty (30) days following the end
of each calendar quarter an update of the Facility Budget,
including but not limited to an explanation or other
reconciliation of differences between such report and previous
reports.
5.11.4 From and after the Commercial Operation Date,
deliver to the Lender within ninety (90) days following each
calendar year, a summary operating report, which shall include,
unless otherwise agreed to by the Lender, a numerical and
narrative assessment of (i) the Project's compliance with each
category in the annual operating budget, (ii) statistical data
relating to the Facility, including heat rate, net electrical and
scheduled and unscheduled outages, (iii) fuel deliveries and use,
(iv) major maintenance activity, (v) casualty losses of value in
excess of US$250,000 or the equivalent thereof in other
currencies (whether or not covered by insurance), (vi) disputes
with any other Major Project Participant, materialman, supplier
or other Person and any related claims against the Borrower,
(vii) pricing information disclosed or made available under the
agreements pertaining to the supply of coal for the Facility and
(viii) compliance with the Governmental Authorizations.
5.11.5 No later than five Business Days following
the receipt thereof, deliver to the Lender all progress reports
provided by the EPC Contractor to the Borrower pursuant to the
EPC Contract and all progress reports prepared under the Power
Purchase Agreement.
5.11.6 Deliver to the Lender any such other
information or data with respect to its business or operations
(including supporting information as to compliance with this
Agreement) as the Lender may reasonably request from time to
time.
5.12 Taxes and Other Governmental Charges. Before the same
become delinquent, pay and discharge or cause to be paid and
discharged all taxes, assessments and governmental charges or
levies lawfully imposed upon the Borrower or its income or
profits or upon the Facility, all utility and other governmental
charges incurred in the ownership, operation, maintenance, use,
occupancy and upkeep of the Facility. However, the Borrower may
contest in good faith any such taxes, assessments and other
charges and, in such event, may permit the taxes, assessments or
other charges so contested to remain unpaid during any period,
including appeals, when the Borrower is in good faith contesting
the same, so long as (a) adequate cash reserves have been
established in an amount sufficient to pay any such taxes,
assessments or other charges, accrued interest thereon and
potential penalties or other costs relating thereto, or other
adequate provision for the payment thereof shall have been made,
(b) enforcement of the contested tax, assessment or other charge
is effectively stayed for the entire duration of such contest,
and (c) any tax, assessment or other charge determined to be due,
together with any interest or penalties thereon, is promptly paid
after resolution of such contest.
5.13 Notices. Promptly, upon acquiring notice or giving
notice, or obtaining knowledge thereof, as the case may be,
provide to the Lender written notice of:
5.13.1 Any Event of Default which it has knowledge,
specifically stating that an Event of Default has occurred and
describing such an Event of Default and any action being taken or
proposed to be taken with respect to such Event of Default;
5.13.2 Any termination or event of default or notice
thereof under the Power Purchase Agreement; and
5.13.3 Any litigation pending against the Borrower or
any other party of which the Borrower has actual knowledge, which
is or could reasonably be expected to have a Material Adverse
Effect.
5.14 Expropriation Event. If an Expropriation Event shall
occur with respect to the Project, (a) promptly upon discovery or
receipt of notice of any occurrence thereof, provide written
notice thereof to the Lender, (b) diligently pursue all its
rights to compensation against the relevant Governmental
Instrumentality in respect of such Expropriation Event, and
(c) hold any Expropriation Proceeds received in respect of such
event (after deducting all reasonable expenses incurred by it in
litigating, arbitrating, compromising, settling or consenting to
the settlement of any claims) in trust for the benefit of the
Lender separated from other funds of the Borrower, (d) promptly
deposit all Expropriation Proceeds in (i) the RMB Revenue Account
if denominated in RMB or (ii) in the Foreign Debt Repayment
Account if denominated in Dollars. The Borrower consents to the
participation of the Lender in any proceedings regarding an
Expropriation Event, and the Borrower shall from time to time
deliver to the Lender all documents and instruments requested by
it to permit such participation. Nothing in this Section 5.14
shall be deemed to impair any rights which the Lender may have
with respect to any such Expropriation Event.
5.15 Increased Costs. If, after the date of this Agreement,
any Change of Law:
(a) shall subject the Lender to any tax, duty or other
charge with respect to the
Loans, or shall change the basis of taxation of payments by the
Borrower to the Lender on the Loans (except for Covered Taxes,
Other Taxes or changes in the rate of taxation on the overall net
income of the Lender); or
(b) shall impose on the Lender any other condition
directly related to the Loans;
and the effect of any of the foregoing is to increase the cost to
the Lender of making, issuing, creating, renewing, participating
in or maintaining the Loans or to reduce any amount receivable by
the Lender hereunder, then the Borrower shall from time to time,
upon demand by the Lender, pay to the Lender additional amounts
sufficient to reimburse the Lender for such increased costs or to
compensate the Lender for such reduced amounts.
5.16 Taxes. All payments made by the Borrower under this
Agreement and the Project Note shall be made free and clear of,
and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
Governmental Instrumentality, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on
the Lender as a result of a present or former connection between
the Lender and the jurisdiction of the Governmental
Instrumentality imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such
connection arising solely from the Lender having executed,
delivered or performed its obligations or received a payment
under, or enforced, this Agreement or the Project Note). If any
such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to the Lender hereunder or
under the Project Note, the amounts so payable to the Lender
shall be increased to the extent necessary to yield to the Lender
(after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts
specified in this Agreement. Whenever any Non-Excluded Taxes are
payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Lender for its own account a certified
copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-
Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Lender the required receipts or other
required documentary evidence, the Borrower shall indemnify the
Lender for any incremental taxes, interest or penalties that may
become payable by the Lender as a result of any such failure.
The agreements in this subsection 5.16 shall survive the
termination of this Agreement and the payment of the Loans, the
Project Note and all other amounts payable hereunder.
5.17 Registration of the Loans; Other Foreign Exchange
Matters.
5.17.1 Prior to any due date for any repayment of
the principal of and/or the payment of interest on the Loans, the
Borrower shall (i) use the Registration Certificate and the
notice regarding such repayment and/or payment to obtain from the
registration department a verification and approval certificate
with respect to such repayment and/or payment and (ii) use such
verification and approval certificate and the Registration
Certificate to handle matters regarding the remittance from its
foreign debt account of the principal of and interest on the
Loans outside of China at the relevant bank.
5.17.2 At the beginning of each year, the Borrower
shall submit to the local foreign exchange administration a
report stating the amount of foreign currency purchased in the
preceding year for the purpose of repaying the principal of
and/or paying the interest on the Loans and a plan regarding the
purchase of foreign currency for the current year.
5.18 Loan Payment Reserve. At the time of the final drawing
under this Agreement, the Borrower shall deposit an amount equal
to the Debt Service Reserve Requirement in the Debt Service
Reserve Fund.
ARTICLE 6 - NEGATIVE COVENANTS
The Borrower covenants and agrees for the benefit of the
Lender that until all Obligations owed to the Lender are paid in
full, without the consent of the Lender, the Borrower shall not:
6.1 Indebtedness. Incur, create, assume or be liable for
any Indebtedness, except:
(a) the Loans and additional loans from the Lender;
(b) debt incurred to finance working capital
requirements; provided that after giving effect to such
additional debt, (i) the minimum (or lowest) projected Debt
Service Coverage Ratio for any calendar year will not be
less than 1.5 to 1 and (ii) the average projected Debt
Service Coverage Ratio for any calendar year will not be
less than 1.7 to 1; provided further, however, that the
amount of such debt shall not at any time exceed
US$1,000,000;
(c) purchase money or Capital Lease Obligations
incurred to finance assets of the Borrower that are readily
replaceable personal property with a principal amount or
capitalized portion not exceeding US$1,000,000 in the
aggregate outstanding at any time;
(d) trade accounts payable (other than for borrowed
money) due within 90 days arising, and accrued expenses
incurred, in the ordinary course of business of
constructing, operating or maintaining the Facility on
customary terms;
(e) interest or currency exchange rate protection
agreements;
(f) Indebtedness under the Guarantees to which the
Borrower is a party and any other guarantees of the
obligations of any other Joint Venture Company permitted
under the Financing Agreements.
(g) any debt to any other Joint Venture Company, ((a)
through (g), collectively "Permitted Indebtedness").
6.2 Limitations on Liens. Create, assume or permit to
exist any Lien upon any of the Borrower's assets or properties
including without limitation the Facility, whether now owned or
hereafter acquired, other than Permitted Liens.
6.3 Nature of Business. Amend or modify its Articles of
Association without the prior written consent of the Lender, or
engage in any business other than the ownership and operation of
the Facility.
6.4 Sale or Lease of Facility Assets. Sell, lease, assign,
transfer or otherwise dispose of the Facility or other assets
unless (a) such sale, lease, assignment or other disposition
relates only to property that is worn out or no longer useful or
usable in connection with the operation of the Facility or such
property is replaced by property having a Fair Market Value equal
to or greater than the Fair Market Value of the property being
leased or transferred or such lease or transfer is required to
comply with law or to obtain or maintain any Governmental
Authorization, (b) with respect to any other sales, leases,
assignments or other dispositions, the aggregate amount thereof
does not exceed US$250,000 in any given year or US$1,000,000 in
the aggregate since the date of this Agreement, or (c) such sale,
lease, assignment or other disposition is made in the ordinary
course of business in accordance with the Project Documents.
6.5 Merger, Consolidation, Liquidation, Dissolution. Merge
or consolidate with or into any other Person, other than any of
the other Joint Venture Companies or other Sino-foreign joint
ventures with no material liabilities and no material activities
unrelated to the Project, or liquidate, wind up, dissolve, or
otherwise transfer or dispose of all or any substantial part of
its property, assets or business, or change its legal form, or
purchase or otherwise acquire any assets of any Person unless
such purchase or acquisition of assets is reasonably necessary
for the operation of the Facility or in the ordinary course of
business.
6.6 Contingent Liabilities. Become liable as a surety,
guarantor, accommodation endorser or otherwise, for or upon the
obligation of any other Person; provided, however, that the
Borrower may guarantee or otherwise become liable in respect of
any Indebtedness incurred by any other Person (on its behalf) in
connection with or relating to incurrence of Indebtedness
permitted under Section 6.1; and provided, further, however, that
this Section 6.6 shall not be deemed to prohibit (i) the
acquisition of goods, supplies or merchandise in the normal
course of business on normal trade credit, or (ii) the
endorsement of negotiable instruments received in the normal
course of business; or (iii) the obligations hereunder and under
the Guarantees or any other guarantee of any obligation of any
other Joint Venture Company if such guarantee is required for the
development and construction of the Project and is not contrary
to any Legal Requirements.
6.7 Loans, Advances or Investments. Make or permit to
remain outstanding any loans, extensions of credit or advances to
or investments in (whether by acquisition of any stocks, notes or
other securities or obligations) any Person except RMB Permitted
Investments with respect to the On-Shore Accounts denominated in
Renminbi or Dollar Permitted Investments with respect to the On-
Shore Accounts denominated in the U.S. Dollars or as expressly
provided in the Project Documents.
6.8 Immunity. In any proceedings in China or elsewhere in
connection with any of the Financing Agreements to which the
Borrower is a party, claim for itself or any of its assets
immunity from suit, execution, attachment or other legal process.
6.9 Distributions. Agree to any restriction on its ability
to pay dividends (excluding restrictions imposed by law).
6.10 Transactions With Affiliates. Except for the Project
Documents, directly or indirectly: (i) enter into any
transaction with any Person (including any Affiliate) other than
in the ordinary course of business, or (ii) enter into any
transaction with any Person, including any Affiliate, on terms
less favorable to those available from independent third parties
or (ii) establish any sole and exclusive purchasing or sales
agency, or enter into any transaction whereby the Borrower might
receive less than the full commercial price (subject to normal
trade discounts) for electricity or pay more than the commercial
price for products of others.
6.11 Partnerships; Subsidiaries. Except as contemplated by
the Project Documents, become a general or limited partner in any
partnership or a joint venturer in any joint venture, acquire any
ownership interest in any other Person or enter into any profit-
sharing or royalty agreement or other similar arrangement whereby
the Borrower's income or profits are, or might be, shared with
any other Person, or enter into any management contract or
similar arrangement whereby its business or operations are
managed by any other Person (other than any agreement under which
the Borrower may provide operation and management consulting or
other similar services), or form any Subsidiary.
6.12 Assignment. Assign or otherwise transfer its rights
under any of the Project Documents to which it is a party, or
Governmental Authorizations for its benefit, to any Person
without the prior written consent of the Lender.
6.13 Abandonment of Project. Voluntarily cease or abandon
the development, construction or operation of the Project.
6.14 Improper Use. Use, maintain, operate or occupy, or
allow the use, maintenance, operation or occupancy of, any
portion of the Site or Facility for any purpose which: (a) may
be dangerous, unless safeguarded as required by any Legal
Requirement or Government Instrumentality; (b) may constitute a
public or private nuisance resulting in a Material Adverse
Effect; or (c) may make void, voidable or cancelable, or
materially increase the premium of, any insurance then in force
with respect to the Site or Project or any part thereof.
6.15 Regulation of Parties. Take any action which could
reasonably be expected to result in (a) the Borrower being
subject to regulation by any Governmental Instrumentality of the
United States as a "public utility," an "electric utility," an
"electric utility holding company" or a "public utility holding
company", (b) the Borrower being subject to regulation as a
"subsidiary company" or an "affiliate" of a "holding company"
under (and as defined in) PUHCA or (c) any Person who by reason
of its or their ownership or operation of the Facility upon the
exercise of remedies hereunder or under the Guarantees, being
subject to regulation by any Governmental Instrumentality of the
United States as a "public utility," an "electric utility," an
"electric utility holding company" or a "holding company" or a
subsidiary or Affiliate of any of the foregoing under any Legal
Requirement of the United States (including, without limitation,
PUHCA and the FPA).
6.16 Amendments. Amend any of the Project Documents without
the prior written consent of the Lender.
ARTICLE 7 - EVENTS OF DEFAULT; CURE RIGHTS; REMEDIES
7.1 Events of Default; Cure Rights. The occurrence of any
of the following events shall constitute an event of default
("Event of Default") hereunder:
7.1.1 Failure to Make Payments. Payment shall not
have been made of any principal of or any interest on the Loans
or other amounts owed by the Borrower to the Lender within 15
Banking Days after such amounts are due.
7.1.2 Misstatements; Omissions. Any representation
or warranty confirmed or made in any Project Documents by the
Borrower or in any writing provided by the Borrower in connection
with the transactions contemplated by this Agreement shall be
found to have been incorrect in any material respect when made or
deemed to be made; provided, however, that no Event of Default
shall occur if within sixty (60) days after the date on which the
General Manager of the Borrower has actual notice that such
incorrect statement has occurred, the Borrower shall deliver in
good faith, to the Lender an Officer's Certificate stating in
reasonable detail that either (i) the Borrower has eliminated any
adverse effect relating to such incorrect statement or (ii) that
the Borrower has taken action that it reasonably believes will
eliminate the adverse effect relating to such incorrect statement
within a reasonable specified time.
7.1.3 Affirmative Covenants. The Borrower shall
fail to perform or observe any of its obligations under (a)
Sections 5.4 and 5.5 or (b) any other term, covenant or agreement
set forth in Article 5 hereof, where such default shall not have
been remedied within fifteen (15) days after notice of such
failure.
7.1.4 Negative Covenants. The Borrower shall fail
to perform or observe any of its obligations under any term,
covenant or agreement set forth in Article 6 hereof other than
Section 6.2, where such default shall not have been remedied
within fifteen (15) days after the Borrower has received notice
of such failure.
7.1.5 Breach of Material Project Documents. The
Borrower or any other party thereto shall breach or default under
any term, condition, provision, covenant, representation or
warranty contained in any of the Material Project Documents and
the Financing Agreements to which the Borrower is a party if such
breach or default shall continue unremedied for fifteen (15) days
after notice to the Borrower from the Lender; provided, however,
that in the case of any of the EPC Contract, the CHEXIM Guarantee
or the Transmission Facilities Construction Agreement, if the
breach or default cannot be remedied within such fifteen (15)
days despite the Borrower's and/or such other party's, as the
case may be, good faith and diligent efforts to do so, but is
susceptible to cure within a longer period, the Borrower or such
party shall continue diligently such efforts to cure such breach
or default until cured (but in no event longer than sixty (60)
days in the aggregate.
7.1.6 Bankruptcy; Insolvency.
(a) The Borrower or any other Joint Venture Company
shall institute a voluntary case or undertake actions to form an
arrangement with creditors for the purpose of paying past due
debts, seeking liquidation, reorganization or moratorium of
payments, under any Bankruptcy Law (or any successor statute or
similar statute in any relevant jurisdiction), or shall consent
to the institution of an involuntary case thereunder against it;
or the Borrower shall file a petition, answer or consent or shall
otherwise institute any similar proceeding under any other Legal
Requirements, or shall consent thereto; or the Borrower or any
other Joint Venture Company shall apply for, or by consent or
acquiescence there shall be an appointment of, a receiver,
liquidator, sequestrator, trustee or other officer with similar
powers; or the Borrower or any other Joint Venture Company shall
make an assignment for the benefit of creditors; or the Borrower
or any other Joint Venture Company shall admit in writing its
inability to pay its debts generally as they become due; or if an
involuntary case shall be commenced seeking the liquidation or
reorganization of the Borrower or any other Joint Venture Company
under any Bankruptcy Law (or any successor statute or similar
statute under any relevant jurisdiction) or any similar
proceeding shall be commenced against the Borrower or any other
Joint Venture Company under any other Legal Requirements and (i)
the petition commencing the involuntary case is not timely
controverted, (ii) the petition commencing the involuntary case
is not dismissed within sixty (60) days of its filing, (iii) an
interim trustee is appointed to take possession of all or a
portion of the property, and/or to operate all or any part of the
business of the Borrower or any other Joint Venture Company and
such appointment is not vacated within sixty (60) days, or
(iv) an order for relief shall have been issued or entered
therein; or a decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator,
sequestrator, trustee or other officer having similar powers of
the Borrower or any other Joint Venture Company of all or a part
of their property, shall have been entered; or any other similar
relief shall be granted against the Borrower or any other Joint
Venture Company under any Legal Requirements; and
(b) NCPGC, the EPC Contractor, or Harbin Power shall
institute a voluntary case or undertake actions to form an
arrangement with creditors for the purpose of paying past due
debts, seeking liquidation, reorganization or moratorium of
payments, under any Bankruptcy Law (or any successor statute or
similar statute in any relevant jurisdiction), or shall consent
to the institution of an involuntary case thereunder against it;
or shall file a petition, answer or consent or shall otherwise
institute any similar proceeding under any other Legal
Requirements, or shall consent thereto; or shall apply for, or by
consent or acquiescence there shall be an appointment of, a
receiver, liquidator, sequestrator, trustee or other officer with
similar powers; or shall make an assignment for the benefit of
creditors; or shall admit in writing its inability to pay its
debts generally as they become due; or if an involuntary case
shall be commenced seeking the liquidation or reorganization of
NCPGC, the EPC Contractor, or Harbin Power under any Bankruptcy
Law (or any successor statute or similar statute under any
relevant jurisdiction) or any similar proceeding shall be
commenced against NCPGC, the EPC Contractor, or Harbin Power
under other Legal Requirements and (i) the petition commencing
the involuntary case is not timely controverted, (ii) the
petition commencing the involuntary case is not dismissed within
sixty (60) days of its filing, (iii) an interim trustee is
appointed to take possession of all or a portion of the property,
and/or to operate all or any part of the business of any of
NCPGC, the EPC Contractor, or Harbin Power and such appointment
is not vacated within sixty (60) days, or (iv) an order for
relief shall have been issued or entered therein; or a decree or
order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee or
other officer having similar powers of any of NCPGC, the EPC
Contractor, or Harbin Power of all or a part of any of their
respective property, shall have been entered; or any other
similar relief shall be granted against the NCPGC, the EPC
Contractor, or Harbin Power under any Legal Requirements.
7.1.7 Judgments. A final judgment or judgments
shall be entered (i) against the Borrower in the aggregate amount
of US$1,000,000 (or the equivalent thereof in other currencies)
(exclusive of judgment amounts fully covered by insurance where
the insured has admitted liability), other than a judgment, the
execution of which is effectively stayed within sixty (60) days
after its entry but only for no more than ninety (90) days after
the date on which such stay is terminated or expires; or (ii) in
the form of an injunction or similar form of relief requiring
suspension or abandonment of construction or operation of the
Facility on grounds of violation of a Legal Requirement and
failure of the Borrower to have such injunction or similar form
of relief stayed or discharged within ninety (90) days.
7.1.8 Other Indebtedness. The Borrower shall
default for a period beyond any applicable grace period in the
payment of any principal, interest or other amount due under any
agreement involving the borrowing of money or the advance of
credit and the outstanding amount or amounts payable under such
agreement equals or exceeds US$250,000 (or the equivalent thereof
in other currencies) in the aggregate.
7.1.9 Termination or Invalidity of Certain Project
Documents; Abandonment of Project.
(a) Any of the Project Documents or the Financing
Agreements shall have become invalid, illegal or unenforceable;
(b) The Borrower shall cease to have the right to use
the Site for the purpose of owning, constructing, maintaining and
operating the Facility in the manner contemplated by the Project
Documents (or to obtain sufficient water for its operations); or
(c) The Borrower shall abandon the Project or
otherwise cease to pursue the operations of the Project in
accordance with standard industry practice or shall (except as
permitted by Section 6.4) sell or otherwise dispose of its
interest in the Project.
7.1.10 Commercial Operation Date. The Commercial
Operation Date shall not have occurred by December 31, 1999.
7.1.11 Government Authorizations. Any Governmental
Authorization, approval or permit (whether central, provincial,
municipal, local or otherwise) necessary for (a) the
establishment of the Borrower (b) the ownership, construction,
maintenance, financing or operation of the Project, (c) the
setting or adjustment of the electricity price for the Project in
accordance with the method of calculation set forth in the
attachments to the Pricing Document or (d) the conversion or
transfer of any foreign currency shall not be obtained if and
when required, or shall be modified, revoked or cancelled, or a
notice of violations is issued under any Governmental
Authorization on grounds of, or illegality or the absence of any
required authorization, by the issuing agency or other
Governmental Instrumentality having jurisdiction or any
proceeding is commenced by any Governmental Instrumentality for
the purpose of modifying, revoking or cancelling any Governmental
Authorization.
7.1.12 Destruction of Project. The Facility is
destroyed, or suffers an actual or constructive total loss or
damage.
7.1.13 Change of Law. The occurrence of any adverse
Change of Law of the PRC.
7.1.14 Remedies. Upon the occurrence of any of the
Events of Default, the Lender may, by written notice to the
Borrower and the other Joint venture Companies, declare the Loans
to be immediately due and payable and pursue any and all remedies
available for the non-payment of debts.
ARTICLE 8 - SCOPE OF LIABILITY
The Lender shall have no claims with respect to the
transactions contemplated by the Project Documents against any
Person other than the Borrower including, but not limited to, the
Panda International and the Luannan Government or any of their
respective Affiliates (other than the Borrower) or direct or
indirect parents, or to the shareholders, officers, directors,
employees, or other controlling persons (including members of the
management committee) of the Panda International and the Luannan
Government, their respective Affiliates (other than the
Borrower), or their direct or indirect parents (collectively the
"Nonrecourse Persons"), subject to the exceptions set forth below
in this Article 8; provided that (a) the foregoing provision of
this Article 8 shall not constitute a waiver, release or
discharge of any of the indebtedness, or of any of the terms,
covenants, conditions, or provisions of this Agreement, any other
Financing Agreement and the same shall continue until fully paid,
discharged, observed, or performed; (b) the foregoing provision
of this Article 8 shall not limit or restrict the right of the
Lender, to name the Borrower or any other Person as a defendant
in any action or suit for a judicial foreclosure or for the
exercise of any other remedy under or with respect to this
Agreement or any other Financing Agreement, or for injunction or
specific performance, so long as no judgement in the nature of a
deficiency judgement shall be enforced against any Nonrecourse
Persons, except as set forth in this Article 8; (c) the foregoing
provision of this Article 8 shall not affect or diminish or
constitute a waiver, release or discharge of any specific written
obligation, covenant, or agreement in respect to the Project made
by any of the Nonrecourse Persons; and (d) nothing contained
herein shall limit the liability of any Person who is a party to
any Project Document or has issued any certificate or other
statement in connection therewith with respect to such liability
as may arise by reason of the terms and conditions of such
Project Document, certificate or statement, or otherwise, in each
case under this clause (d) relating solely to such liability of
such Person as may arise under such referenced agreement,
instrument or opinion. The limitations on recourse set forth in
this Article 8 shall survive the termination of this Agreement
and the full payment and performance of the Obligations hereunder
and under the other Project Documents.
ARTICLE 9 - MISCELLANEOUS
9.1 Addresses. Any communications between the parties
hereto or notice provided herein to be given may be given to the
following addresses.
If to the Lender: Pan-Western Energy Corporation, LLC
x/x Xxxxxx xxx Xxxxxx
X.X. Xxx 000
Xxxxx Xxxxxx Street
Xxxxxx Town, Grand Cayman
Cayman Islands, British West Indies
If to the Borrower: Tangshan Cayman Heat and Power Co.,
Ltd.
Zhongdajie, Bencheng
Luannan County
Hebei Province, China
in either case,
with a copy to: Panda Energy Industrial Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
9.2 Delay and Waiver. No delay or omission to exercise any
right, power or remedy accruing to the Lender upon the occurrence
of any Event of Default or any breach or default of the Borrower
under this Agreement shall impair any such right, power or remedy
of the Lender, nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring, nor shall any
waiver of any single Event of Default, or other breach or default
be deemed a waiver of any other Event of Default, or other breach
or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part
of the Lender of any Event of Default, or other breach or default
under this Agreement, or any waiver on the part of the Lender of
any provision or condition of this Agreement, must be in writing
and shall be effective only to the extent in such writing
specifically set forth. All remedies, either under this
Agreement or by law or otherwise afforded to the Lender shall be
cumulative and not alternative.
9.3 Entire Agreement. This Agreement and any agreement,
document or instrument attached hereto or referred to herein
integrate all the terms and conditions mentioned herein or
incidental hereto and supersede all oral negotiations and prior
writings in respect to the subject matter hereof. In the event
of any conflict between the terms, conditions and provisions of
this Agreement and any such agreement, document or instrument,
the terms, conditions and provisions of this Agreement shall
prevail. This Agreement may only be amended or modified by an
instrument in writing signed by the Borrower, the Lender and any
other parties to be charged.
9.4 Governing Law. This Agreement shall be governed by,
and be construed and interpreted in accordance with, the law of
the Cayman Islands.
9.5 Severability. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
9.6 Headings. Paragraph headings have been inserted in
this Agreement as a matter of convenience for reference only and
it is agreed that such paragraph headings are not a part of this
Agreement and shall not be used in the interpretation of any
provision of this Agreement.
9.7 No Partnership, Etc. The Lender and the Borrower
intend that the relationship between them shall be solely that of
creditor and debtor. Nothing contained in this Agreement or the
Project Note shall be deemed or construed to create a
partnership, tenancy-in-common, joint tenancy, joint venture or
co-ownership by or between the Lender, on the one hand, and the
Borrower or any other Person, on the other hand. The Lender
shall not be in any way responsible or liable for the debts,
losses, obligations or duties of the Borrower or any other Person
with respect to the Project or otherwise. All obligations to pay
real property or other taxes, assessments, insurance premiums,
and all other fees and charges arising from the ownership,
operation or occupancy of the Project and to perform all
obligations under the agreements and contracts relating to the
Project shall be the sole responsibility of the Borrower.
9.8 Consent to Jurisdiction. The Lender and the Borrower
agree that any legal action or proceeding by or against the
Borrower or with respect to or arising out of this Agreement the
Project Note may be brought in or removed to the courts of the
Cayman Islands. By execution and delivery of this Agreement, the
Lender and the Borrower accept, for themselves and in respect of
their property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The Lender and the Borrower irrevocably
consent to the service of process out of any of the
aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified airmail,
postage prepaid, to the Lender or the Borrower, as the case may
be, at their respective addresses for notices as specified herein
and that such service shall be effective five (5) Banking Days
after such mailing. Nothing herein shall affect the right to
serve process in any other manner permitted by law or the right
of the Lender to bring legal action or proceedings in any other
competent jurisdiction. The Lender and the Borrower further
agree that the aforesaid courts of the Cayman Islands shall have
exclusive jurisdiction with respect to any claim or counterclaim
of the Borrower based upon the assertion that the rate of
interest charged by the Lender on or under this Agreement and/or
the Project Note is usurious. The Lender and the Borrower hereby
waive any right to stay or dismiss any action or proceeding under
or in connection with any or all of the Project or this Agreement
brought before the foregoing courts on the basis of forum non-
conveniens.
9.9 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The
Borrower may not assign or otherwise transfer any of its rights
under this Agreement.
9.10 Counterparts. This Agreement may be executed in one or
more duplicate counterparts and when signed by all of the parties
listed below shall constitute a single binding agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their officers or partners
thereunto duly authorized as of the day and year first above
written.
PAN-WESTERN ENERGY CORPORATION LLC
By:
Name:
Title:
TANGSHAN CAYMAN HEAT AND POWER CO., LTD.
By:
Name:
Title:
Schedule 5.8
[TO COME]
EXHIBIT A
FORM OF PROJECT NOTE
$ New York, New York
, 199
FOR VALUE RECEIVED, the undersigned,
, a Sino-foreign equity joint venture with limited liability
organized under the laws of the People's Republic of China, (the
"Borrower"), hereby unconditionally promises to pay to the order
of Pan-Western Energy Corporation LLC (the "Lender") at the
office of [ ] in lawful money of the United
States of America and in immediately available funds, the
principal amount of DOLLARS ($ ),
or, if less, the unpaid principal amount of the Loans made by the
Lender pursuant to the Shareholder Loan Agreement, as hereinafter
defined. The principal amount shall be paid in the amounts and
on the dates specified in the Shareholder Loan Agreement. The
Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in the
Shareholder Loan Agreement.
The holder of this Note is authorized to endorse on the
schedule annexed hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a
part hereof the date and amount of the Loans and the date and
amount of each payment or prepayment of principal with respect
thereto. Each such endorsement shall constitute prima facie
evidence of the accuracy of the information endorsed. The
failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loans.
This Note (a) is the Project Note referred to in the
Shareholder Loan Agreement dated as of September 24, 1996 (as
amended, supplemented or otherwise modified from time to time,
the "Shareholder Loan Agreement"), between the Borrower and the
Lender, (b) is subject to the provisions of the Shareholder Loan
Agreement and (c) is subject to optional and mandatory prepayment
in whole or in part as provided in the Shareholder Loan
Agreement. This Note is guaranteed as provided in the Financing
Agreements. Reference is hereby made to the Financing Agreements
for a description of the terms and conditions upon which each
guarantee was granted and the rights of the holder of this Note
in respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable,
all as provided in the Shareholder Loan Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or
otherwise, hereby waive presentment, demand, protest and all
other notices of any kind.
Unless otherwise defined herein, terms defined in the
Shareholder Loan Agreement and used herein shall have the
meanings given to them in the Shareholder Loan Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE CAYMAN ISLANDS.
[BORROWER]
By:
Name:
Title:
SCHEDULE A
INTEREST PAYMENT SCHEDULE
[***] FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT.
SCHEDULE B
AMORTIZATION SCHEDULE
[***] FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT.
