EXHIBIT NO. 145
INVESTMENT NUMBER 7365
Participation Agreement
in respect of
a B Loan to
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
between
BAYERISCHE VEREINSBANK AG
and
INTERNATIONAL FINANCE CORPORATION
Dated as of the Closing Date
TABLE OF CONTENTS
ARTICLE I
Definitions and Interpretation
Section 1.1. Definitions 2
Section 1.2. Interpretation 2
ARTICLE II
Terms of Participation
Section 2.1. Amount and Interest Rate 3
Section 2.2. Prepayment 4
Section 2.3. Balance of Loan 4
Section 2.4. Disbursements 4
Section 2.5. Commitment Fee 5
Section 2.6. Front-end Fee 5
Section 2.7. Annual Fee. 5
Section 2.8. Maintenance Amount 5
Section 2.9. Additional (Default Rate) Interest 6
Section 2.10. Funding Costs 6
Section 2.11. Illegality 6
Section 2.12. Taxes 7
Section 2.13. Payments 7
ARTICLE III
Allocation
Section 3.1. Obligation to Allocate 7
Section 3.2. Pre-Bankruptcy or Liquidation
Allocation 7
Section 3.3. Post-Bankruptcy or Liquidation
Allocation 8
ARTICLE IV
Other Aspects of Administration
Section 4.1. Consent for Amendments and Waivers
Conditions of Disbursement and
Payments 8
Section 4.2. Consent for Amendments and Waivers
Project Funds Agreement 8
Section 4.3. Consultation for Amendments and
Waivers - Covenants 8
Section 4.4. Consent and Consultation for
Amendments and Waivers - Security 9
Section 4.5. Exercise of Other Rights 9
Section 4.6. Events of Default: Notification 9
Section 4.7. Voluntary Acceleration 9
Section 4.8. Mandatory Acceleration 10
Section 4.9. Payments With Regard to Security
and Insurance. 10
Section 4.10. Costs and Expenses 10
Section 4.11. Refund of Distributions 11
ARTICLE V
Miscellaneous
Section 5.1. Reduction of Commitment 12
Section 5.2. Financial Statements and Reports 12
Section 5.3. Confidential Information 12
Section 5.4. No Representations 12
Section 5.5. IFC's Standard of Care 13
Section 5.6. Assignment 13
Section 5.7. IFC's Rights not affected by
other Investments and Loans 14
Section 5.8. Reliance on Notices 14
Section 5.9. Applicable Law 14
Section 5.10. Notices 14
Section 5.11. Counterparts 15
PARTICIPATION AGREEMENT
AGREEMENT, dated as of the Closing Date, between Bayerische
Vereinsbank AG, a company organized and existing under the laws
of the Federal Republic of Germany (herein called the
"Participant") and International Finance Corporation (herein
called "IFC").
WHEREAS:
(A) Pursuant to an investment agreement (herein called the "IFC
Investment Agreement") dated as of the Closing Date, between
Bhote Koshi Power Company Private Limited (herein called the
"Company") and IFC, IFC has agreed to make a loan (the
"Loan") to the Company, the Loan being composed of two
portions (the "A Loan" and the "B Loan", respectively), in
the amounts, for the purpose and on the terms and conditions
set forth in the IFC Investment Agreement.
(B) Pursuant to a Share Retention and Project Funds Agreement
(the "Project Funds Agreement") dated as of the Closing
Date, between Panda Energy International, Inc., Harza
Engineering Company International L.P., Harza Engineering
Company International, a limited liability company, Himal
International Power Corporation Pvt. Ltd., Panda of Nepal,
RDC of Nepal, Panda Bhote Koshi Company, Resource
Development Consultants, a limited liability company,
Soaltee Enterprises Private Ltd., Soaltee Hotel Ltd. and
Surya Enterprises Private Ltd. (the "Sponsors"), the
Company, IFC and DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH ("DEG"), the Sponsors have, on
the terms and conditions set forth therein, undertaken to
provide additional funds to enable the Company to complete
the Project and meet certain of its financial obligations as
they fall due.
(C) Xerox copies of the signed IFC Investment Agreement and the
Project Funds Agreement have been provided to the
Participant.
(D) The Participant has agreed to purchase a participation in
the B Loan in the amount of ten million Dollars
($10,000,000) (and to pay for such participation a
corresponding sum in Dollars, payable upon request by IFC
and otherwise as provided below), and in consideration
thereof IFC has agreed to sell to the Participant a
participation in the B Loan, on the terms and conditions set
out in this Participation Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions and Interpretation
Section 1.1. Definitions. Wherever used in this Agreement
and unless the context otherwise requires:
(a) the terms defined in Schedule A to the IFC Investment
Agreement and not defined herein shall have the same meanings
when used herein. In particular and as defined in Schedule A to
the IFC Investment Agreement, the term "Participants" means the
Participant and the other participants in the B Loan (or their
successors and assignees) and the term "Participations" means the
Relevant Participation and the participations of the other
Participants in the B Loan.
(b) In addition the following terms shall have the
following meanings:
(i) the terms "A Loan", "B
Loan", "Company", "Project Funds
Agreement", "IFC", "IFC Investment
Agreement", "Loan", "Participant"
and "Sponsors" have the respective
meanings already given to them; and
(ii) the term "Relevant
Participation" means the
participation of the Participant in
the B Loan in the amount referred
to in Section 2.01 below, or, as
the context may require, the
principal amount thereof from time
to time outstanding.
Section 1.2. Interpretation. In this Agreement, unless the
context otherwise requires:
(a) headings and underlinings are for convenience only and
do not affect the interpretation of this Agreement;
(b) words importing the singular include the plural and
vice versa;
(c) an expression importing a natural person includes any
company, partnership, trust, joint venture, association,
corporation or other body corporate and any governmental
authority or agency;
(d) a reference to a Section, Article or Annex is a
reference to that Section or Article of, or that Annex to, this
Agreement;
(e) a reference to a document includes an amendment or
supplement to, or replacement or novation of, that document but
disregarding any amendment, supplement, replacement or novation
made in breach of this Agreement; and
(f) a reference to a party to any document includes that
party's successors and permitted assigns.
ARTICLE II
Terms of Participation
Section 2.1. Amount and Interest Rate. (a) The Relevant
Participation which the Participant has agreed to purchase and
which IFC has agreed to sell is in the amount of ten million
Dollars ($10,000,000), representing a part of the B Loan as and
when it is disbursed, and shall be repayable in the principal
amounts and on the maturity dates as set forth below:
Principal
Amount Maturity Date
$262,359.69 March 15, 2001
$275,252.04 September 15, 2001
$288,777.93 March 15, 2002
$302,968.48 September 15, 2002
$317,856.35 March 15, 2003
$333,475.81 September 15, 2003
$349,862.81 March 15, 2004
$367,055.07 September 15, 2004
$385,092.16 March 15, 2005
$404,015.58 September 15, 2005
$423,868.91 March 15, 2006
$444,697.83 September 15, 2006
$466,550.28 March 15, 2007
$489,476.56 September 15, 2007
$513,529.44 March 15, 2008
$538,764.27 September 15, 2008
$565,239.15 March 15, 2009
$593,015.00 September 15, 2009
$622,155.76 March 15, 2010
$652,728.49 September 15, 2010
$684,803.57 March 15, 2011
$718,454.82 September 15,2011
Total $10,000,000.00
(b) The interest rate on the Relevant Participation shall
be three and one-half percent (3.50%) per annum above the rate
which appears on the Dow ▇▇▇▇▇ Market Screen Page the column
headed "USD" as of 11:00 a.m., London time, on the B Loan
Interest Determination Date for one month, two months, three
months or six months, whichever period is closest to the duration
of the B Loan Interest Period (or, if two periods are equally
close to the duration of the B Loan Interest Period, the longer
one) (the "B Loan Floating Rate"), and shall be payable in
Dollars on the dates provided for in the Special Conditions of
the IFC Investment Agreement and shall otherwise be in accordance
with Sections 3.3(b)(i), (ii), (iv) and (v). IFC shall promptly
advise the Participants of the B Loan Floating Rate each time
that it is determined.
Section 2.2. Prepayment. The B Loan (and in certain
circumstances, just the part of the B Loan represented by the
Relevant Participation) is subject to prepayment as provided in
the IFC Investment Agreement.
Section 2.3. Balance of Loan. IFC reserves the right to
allot, assign or transfer any part of the Loan which is not
represented by the Relevant Participation; provided, however,
that IFC shall at all times retain not less than 25% of the A
Loan for its own account. In addition, IFC shall not assign or
transfer its right (as lender of the B Loan) to receive from the
Company payments on or with respect to the B Loan.
Section 2.4. Disbursements. (a) IFC shall request
remittance by the Participant on account of the Relevant
Participation (in an aggregate amount up to the full amount of
the Relevant Participation) only as needed to meet B Loan
Disbursements to the Company. IFC shall give the Participant not
less than three (3) Business Days' notice of the date when any
such remittance is due. The Participant shall remit the amount
specified in the said notice to Northern Trust International
Banking Corporation, New York (or such other bank in New York as
IFC may notify the Participant from time to time) for credit to
IFC's account on or before 11:00 a.m. (New York time) on the date
specified in the said notice for value that date. Provided that
the funds are received by IFC in good time on the date so
specified, then unless any event occurs which would justify IFC
in not making the relevant Disbursement to the Company, IFC shall
disburse those funds as part of the relevant B Loan Disbursement
for value the same day that they are remitted to IFC by the
Participant.
(b) Upon receipt from Northern Trust International Banking
Corporation (or such other bank as aforesaid) of advice that
IFC's account has been credited with such remittance and after
having effected the relevant Disbursement to the Company, IFC
shall, if so requested by the Participant, deliver to the
Participant a receipt substantially in the form of Annex A, dated
the date of such Disbursement and in the amount of such
remittance. After the final Disbursement of the B Loan or
cancellation of the undisbursed portion thereof, the Participant
may request IFC to deliver to the Participant a Participation
Certificate substantially in the form of Annex B, in the
aggregate amount of all such remittances made to IFC by the
Participant hereunder and disbursed by IFC to the Company. IFC
shall then deliver such Participation Certificate to the
Participant which shall return to IFC any receipts previously
delivered to the Participant evidencing such remittances.
(c) All Disbursements of the B Loan shall be made as set
out in Section 3.2 of the Special Conditions of the IFC
Investment Agreement and pro rata with Disbursements of the A
Loan (as provided in such Section 3.2). IFC shall request
remittances from each of the Participants to meet each B Loan
Disbursement in proportion (as nearly as practicable) to the
amounts of their respective Participations. The Participant
acknowledges that IFC may however make a B Loan Disbursement on a
relevant Disbursement date even if the amount disbursed is less
than the full aggregate amount whose remittance was requested by
IFC, due to the fact that (for whatever reason) not all of the
Participants have remitted their funds in time.
(d) At the request of the Participant on or after
September 30, 2000, IFC shall cancel the right of the Company to
request Disbursements in respect of the undisbursed portion of
the B Loan which is represented by the undisbursed portion of the
Relevant Participation.
Section 2.5. Commitment Fee. IFC shall also pay to the
Participant (but only proportionately out of amounts received by
IFC by way of the commitment fee for the B Loan pursuant to
Section 3.4(a)(i)(B) of the Special Conditions of the IFC
Investment Agreement) a commitment fee at the rate of one-half of
one percent (0.5%) per annum on so much of the Relevant
Participation as from time to time remains unremitted by the
Participant. The commitment fee shall accrue from the date of
this Participation Agreement and with regard to each Disbursement
of the B Loan, shall cease to accrue as of the date on which a
remittance is due from the Participant as provided in Section
2.04 (a) above with respect to the amount of the remittance then
due. The commitment fee shall be payable semi-annually on March
15 and September 15 in each year; the first such payment to be
made on March 15, 1998.
Section 2.6. Front-end Fee. IFC shall also pay to the
Participant (but only proportionately out of the amounts received
by IFC pursuant to Section 3.4(a)(ii)(B) of the Special
Conditions of the IFC Investment Agreement) a front-end fee of
one percent (1%) of the amount of the Relevant Participation.
Section 2.7. Annual Fee. IFC shall also pay to the
Participant (but only proportionately out of the amounts received
by IFC pursuant to Section 3.4(a)(iii) of the Special Conditions
of the IFC Investment Agreement) an annual fee of six thousand
two hundred fifty Dollars ($6,250.00), to be paid on the first
Interest Payment Date and every second Interest Payment Date
thereafter until the B Loan is repaid in full.
Section 2.8. Maintenance Amount. IFC shall request the
Company to remit to IFC, in accordance with Section 3.17 of the
Special Conditions of the IFC Investment Agreement, such amounts
as the Participant shall from time to time certify to IFC as
being its Maintenance Amount as specified in that Section. The
Participant shall take all steps necessary to enable IFC to
comply with all the requirements on IFC's part contained in that
Section (and the related definitions) with respect to any claim
to be made by IFC thereunder in respect of the Relevant
Participation. IFC shall pay to the Participant (but only out of
any amounts received by it under that Section) such amounts as
are received by IFC under that Section in respect of the Relevant
Participation.
Section 2.9. Additional (Default Rate) Interest. IFC shall
pay to the Participant (but only proportionately out of any
amounts received by IFC under Section 3.9 of the Special
Conditions of the IFC Investment Agreement) such amounts of
interest at the default rate specified in that Section as are
attributable to the Relevant Participation.
Section 2.10. Funding Costs. With regard to amounts
payable by the Company pursuant to Section 3.16 of the Special
Conditions of the IFC Investment Agreement, IFC shall pay to the
Participant (but only out of any amounts received by IFC
thereunder) such amounts as are attributable to the Relevant
Participation. The Participant agrees to use reasonable efforts,
in its discretion, to minimize any costs, expenses or losses of
the nature referred to in the said Section 3.16 and relevant to
the Relevant Participation, and the Participant agrees that
promptly after any such costs, expenses or losses have been
incurred, it will notify IFC of such fact and the amount and
calculation thereof.
Section 2.11. Illegality. With respect to Section 3.15 of
the Special Conditions of the IFC Investment Agreement:
(a) the Participant shall give notice to IFC of (i) any new
legislation or regulation and/or amendment to existing
legislation or regulation or the interpretation or application
thereof which would make it unlawful for the Participant to
maintain or to fund the Relevant Participation and (ii) any
proposal or action which might result in the legal changes
referred to in (i) above, promptly after the relevant event or
proposal has become known to the Participant;
(b) the Participant shall not request IFC to call upon the
Company for the repayment of the portion of the B Loan
represented by the Relevant Participation until all applicable
grace periods granted by the new law or regulation (or its
interpretation or application) have expired;
(c) at the request of IFC, the Participant shall use
reasonable efforts, but without prejudice to it, to seek
extensions of the said applicable grace periods and shall submit
the necessary application to the competent authorities requesting
that the Relevant Participation be exempted from the application
of the new law or regulation or its interpretation, if there are
reasonable grounds for such application;
(d) the Participant shall use reasonable efforts (but
without prejudice to it) to assign and transfer the Relevant
Participation and shall collaborate with IFC in seeking
appropriate transferee(s) of the Relevant Participation; and
(e) in the event that the reasonable efforts of the
Participant under sub-sections (c) and (d) above are of no avail
and it has become unlawful for the Participant to maintain or to
fund the Relevant Participation, then upon written notice to IFC
from the Participant, IFC shall promptly request the Company to
prepay the portion of the B Loan represented by the Relevant
Participation, together with all interest and Maintenance Amount
(if any) accrued thereon, in accordance with the provisions of
the said Section 3.15.
Section 2.12. Taxes. If the Company is required under the
terms of Section 5.9 of the General Conditions of the IFC
Investment Agreement to gross-up the amount of any payment and
then to deduct or withhold tax from such grossed-up payment, IFC
shall endeavor to pass on to the Participant, to the extent
practicable, its proportionate share of the tax receipt or other
evidence of deduction or withholding which the Company sends to
IFC.
Section 2.13. Payments. (a) IFC shall pay to the
Participant all amounts payable in respect of the Relevant
Participation promptly after it receives the corresponding amount
itself, whether from the Company or otherwise. All payments made
to the Participant by IFC shall be made in same day funds
(together with any interest actually earned by IFC on such funds
from the date of receipt by IFC to the date of payment to the
Participant) to such account as the Participant may advise IFC
from time to time.
(b) Any taxes or other charges which may be applicable to
any payments made in respect of the Relevant Participation and
which for whatever reason are not paid or reimbursed by the
Company pursuant to the IFC Investment Agreement, shall be for
the account of the Participant.
ARTICLE III
Allocation
Section 3.1. Obligation to Allocate. If IFC should receive
less than the full amount then due and payable to IFC under the
IFC Investment Agreement, then notwithstanding any of the other
provisions of this Agreement, IFC shall (unless it is prevented
by applicable law or by the order of a court of competent
jurisdiction) apply and allocate such amounts between the A Loan
and the B Loan and among the various Participants as set forth in
Sections 3.2 and 3.3 below and in accordance with the Trust and
Retention Agreement.
Section 3.2. Pre-Bankruptcy or Liquidation Allocation.
Unless the Company becomes bankrupt or insolvent or goes into
liquidation (or any analogous event occurs):
(a) such monies shall be applied first to costs and
expenses (if any), secondly to interest and any other sums
besides principal then due and payable and thirdly to any
principal of the A Loan and the B Loan then due and payable;
(b) such monies shall be allocated between the A Loan and
the B Loan in proportion to the respective amounts of interest
and other sums besides principal, or (as the case may be) of
principal, then due and payable on and in respect of the A Loan
and the B Loan respectively; and
(c) monies allocated to the B Loan shall be applied among
the Participants in proportion to the respective amounts of
interest and other sums besides principal, or (as the case may
be) of principal then due and payable in respect of their
respective Participations.
Section 3.3. Post-Bankruptcy or Liquidation Allocation. If
the Company becomes bankrupt or insolvent or goes into
liquidation (or an analogous event occurs):
(a) such monies shall be applied first to costs and
expenses (if any) and then to the principal of, interest on and
any other sums due and payable in respect of the A Loan and the B
Loan;
(b) such monies shall be allocated between the A Loan and
the B Loan in proportion to the respective aggregate amounts then
due and payable on and in respect of the A Loan and the B Loan,
respectively; and
(c) monies allocated to the B Loan shall be applied among
the Participants in proportion to the respective aggregate
amounts then due and payable in respect of their respective
Participations.
ARTICLE IV
Other Aspects of Administration
Section 4.1. Consent for Amendments and Waivers -
Conditions of Disbursement and Payments. IFC shall not, without
the consent of the Participant:
(a) amend or waive any condition of Disbursement contained
in Article 3 of the General Conditions or Article 6 of the
Special Conditions which is relevant to a Disbursement of the B
Loan; or
(b) amend or waive the obligations of the Company to pay,
in the specified currency and (where specified) on the relevant
due dates and in the relevant place(s), the amounts of principal,
interest or any other payments due on or in respect of the B Loan
in accordance with the provisions of the IFC Investment Agreement
(or, for the avoidance of doubt, increase the amount of the B
Loan provided for in the IFC Investment Agreement).
Section 4.2. Consent for Amendments and Waivers - Project
Funds Agreement. IFC shall also not, without the consent of the
Participant, agree to any amendments to, or grant any waivers in
respect of, any of the obligations on the part of the Sponsors
contained in the Project Funds Agreement if those amendments or
waivers would, in the reasonable opinion of IFC, materially and
adversely affect the interests of the Participants (as
Participants).
Section 4.3. Consultation for Amendments and Waivers -
Covenants. IFC shall consult with the Participants before
agreeing to any amendment or granting any waiver or consent with
respect to any of the covenants contained in Articles 5 and 6 of
the General Conditions of the IFC Investment Agreement or Article
7 of the Special Conditions of the IFC Investment Agreement, if
such amendment, waiver or consent would, in the reasonable
opinion of IFC, materially and adversely affect the interests of
the Participants (as Participants).
Section 4.4. Consent and Consultation for Amendments and
Waivers - Security. If, in the reasonable opinion of IFC, any
release, amendment, waiver or consent referred to below would
materially and adversely affect the interests of the Participants
(as Participants):
(a) IFC shall not without the consent of Participants
holding Participations which in the aggregate represent sixty-
seven per cent (67%) or more of the outstanding principal amount
of the B Loan agree to release any part of the Security; and
(b) IFC shall consult with the Participants before agreeing
to any amendment or granting any other waiver or consent with
respect to any of the Security Documents.
Section 4.5. Exercise of Other Rights. Subject to the
preceding provisions of this Article and subject to the other
provisions of this Agreement:
(a) the administration and exercise of rights under the IFC
Investment Agreement and the Project Funds Agreement, including
all matters provided for or contemplated by any provision of the
IFC Investment Agreement and the Project Funds Agreement, shall
be handled solely by IFC; and
(b) IFC specifically reserves the right, in its discretion
and without notice to the Participants, to exercise, refrain from
exercising or waive any rights under or in relation to the IFC
Investment Agreement or any other agreement with the Company or
under or in relation to the Project Funds Agreement or to modify
any provisions of any of them.
Section 4.6. Events of Default: Notification. As promptly
as practicable but, in any event, within fifteen (15) days after
the occurrence of an Event of Default shall become known to IFC,
IFC shall advise the Participants of the occurrence of such Event
of Default and shall consult with the Participants on the course
of action which IFC intends to take with respect to such Event of
Default. Except in the case of payment defaults, IFC shall not be
deemed to have knowledge of any Event of Default unless notified
in writing thereof by the Company or the Participant.
Section 4.7. Voluntary Acceleration. (a) At any time
after the occurrence of an Event of Default IFC may, at its
discretion (but after consultation with the Participants, if time
permits), declare the principal of, all accrued interest on and
any other amounts payable in respect of, the A Loan and/or the B
Loan to be immediately due and payable and make demand on the
Company for the payment thereof pursuant to the terms of the IFC
Investment Agreement.
(b) If IFC declares the principal of, all interest accrued
on and any other amounts payable in respect of, the A Loan to be
due and payable as a result of the happening of an Event of
Default, IFC shall concurrently therewith declare the principal
of, all interest accrued on and any other amounts payable in
respect of, the B Loan to be due and payable.
Section 4.8. Mandatory Acceleration. If the Event of
Default is for non-payment of the principal of, or interest on,
the B Loan and if the Participants do not agree with IFC on IFC's
proposed course of action within thirty (30) days after the
commencement of IFC's consultation with the Participants, IFC,
shall at the written request of Participants holding
Participations which in the aggregate represent sixty-seven per
cent (67%) or more of the outstanding principal amount of the B
Loan sent to IFC at any time after the said period of thirty (30)
days has elapsed, if the said Event of Default is still then
continuing, declare the principal of, all accrued interest on and
any other amounts payable in respect of, the B Loan to be
immediately due and payable and make demand on the Company for
payment thereof pursuant to the IFC Investment Agreement.
Section 4.9. Payments With Regard to Security and
Insurance. (a) If the Security is enforced in whole or in part,
IFC shall account to the Participants for the proceeds which IFC
receives of any property which is charged or pledged as part of
the Security in the same way as it accounts for monies received
by it under the IFC Investment Agreement.
(b) If in accordance with and subject to the applicable
provisions of the IFC Investment Agreement and the Security
Documents, IFC receives (or is entitled to receive) the proceeds
of any insurance coverage (as loss payee or assignee or
otherwise) and IFC has the right to apply such proceeds to prepay
all or part of the Loan, it is expressly agreed that IFC may,
after consultation with the Participants, return to the Company
up to the full amount of any insurance proceeds if, in IFC's
reasonable opinion, the Company should be allowed to use the said
proceeds to replace or repair the relevant loss or destruction
and carry on with the Project; provided, however, that if the
Loan has been accelerated or the Security enforced, IFC shall
account to the Participants for all the insurance proceeds which
it receives in the same way as it accounts for any other monies
which it receives from the Company or as part of the proceeds of
the enforcement of the Security.
Section 4.10. Costs and Expenses. (a) The Participant
shall indemnify and keep IFC indemnified against, and promptly
upon demand by IFC pay to IFC, its pro rata share (in the same
proportion as the Relevant Participation bears to the whole of
the B Loan), of any liabilities, costs, damages and reasonable
expenses incurred by IFC in respect of the B Loan in connection
with the implementation or enforcement of the IFC Investment
Agreement or any other agreement with the Company, or the Project
Funds Agreement or the Security, or the protection or
preservation of rights thereunder or in connection with any
matter arising therefrom and against any sums in respect of the B
Loan which IFC may be required to pay to any person thereunder
(and which are not the result of IFC's own gross negligence or
willful misconduct). IFC acknowledges, however, that it will seek
reimbursement of any such costs and expenses from the Company in
the first instance (without being under any obligation to
commence legal proceedings or take any other action beyond making
demand for such reimbursement), that any monies received from the
Company will be allocated pro rata to costs and expenses
attributable to the A Loan and the B Loan, and that it will only
ask the Participants for reimbursement of a pro rata share of
such costs and expenses if and to the extent that the Company
does not reimburse the full amount of such costs and expenses to
IFC. Any request for reimbursement will provide reasonable
details of the costs and expenses involved.
(b) Without prejudice to the foregoing, IFC shall be
entitled, before exercising any discretion or performing any
duties in respect of the B Loan under this Agreement, the IFC
Investment Agreement, or any other agreement with the Company or
the Project Funds Agreement or the Security to be indemnified by
the Participants (pro rata to the participation in the B Loan of
each of the Participants) against any liability directly
resulting from such exercise on such terms as IFC may reasonably
require.
(c) Any costs and/or expenses which apply to the
preservation or protection of both the A Loan and the B Loan and
their respective rights or which arise in respect of both the A
Loan and the B Loan shall be allocated pro rata between the A
Loan and the B Loan; and the Participants shall bear their
respective shares of the portion allocated to the B Loan, as
provided in subsections (a) and (b) above.
Section 4.11. Refund of Distributions. (a) If for any
reason IFC is required by law to refund to any person any payment
in respect of the Loan received by IFC under the IFC Investment
Agreement or the Security Documents or any other agreement
contemplated by the IFC Investment Agreement and IFC has already
made a corresponding payment of all or any part of such receipt
to the Participant (whether by way of the repayment of principal
, payment of interest thereon or otherwise), then IFC shall give
notice of such requirement to the Participant as promptly as
practicable after IFC becomes aware thereof. The Participant
shall pay to IFC (pro rata to the payment received by it to which
the refund or payment relates) a sum in Dollars equivalent to
such refund or payment, together with a similar pro rata portion
of the interest and other costs (if any) required by law to be
paid by IFC to such person in relation to such refund or payment.
(b) IFC shall endeavor to minimize the amount of any sums
which it may be required to refund as aforesaid and shall only
refund to the Company or such other person the minimum amount
required by, and at latest time permitted by, law. If, subsequent
to such refund, IFC shall recover from any person (other than a
Participant) any amount on account of a refund payment made by
IFC in respect of the Loan of the sort contemplated in this
Section, then IFC shall pay to the Participant (but only
proportionately out of those amounts so received or recovered by
IFC in respect of the Loan and then pro rata to the entitlement
of the Participant to the amount so received or recovered by IFC
in respect of the Loan) an amount in Dollars equal to the
Participant's entitlement to any such amount.
ARTICLE V
Miscellaneous
Section 5.1. Reduction of Commitment. If the whole or any
part of the B Loan is cancelled pursuant to Section 3.14 of the
Special Conditions of the IFC Investment Agreement (except at the
request of the Participant pursuant to Section 2.4 (d) of this
Agreement, or of any other Participants pursuant to similar
provisions in their Participation Agreements), the amounts of the
Participations which the Participants have agreed to acquire
shall be reduced pro rata. In addition, if the Participant is
unreasonably refusing to respond to any request to remit funds to
meet a B Loan Disbursement, IFC may, by notice to the
Participant, reduce the principal amount of the Relevant
Participation, except in respect of amounts previously remitted
by the Participant. In any such case, the commitment fee shall
immediately cease to accrue as to the amount by which the
Relevant Participation is reduced.
Section 5.2. Financial Statements and Reports. IFC shall
deliver to the Participant as promptly as practicable copies of
(a) all financial statements and Project progress reports
received by IFC from the Company in accordance with the IFC
Investment Agreement and (b) such other periodic reports and
certificates as IFC may receive from the Company under the IFC
Investment Agreement.
Section 5.3. Confidential Information. Notwithstanding
anything to the contrary expressed or implied in this Agreement,
IFC shall not be bound to disclose to any other person
information relating to the Company or the Sponsors if such
disclosure would or might in IFC's reasonable opinion constitute
a breach of any law or regulation or be otherwise actionable at
the suit of any person.
Section 5.4. No Representations. (a) IFC makes no
representation or warranty as to the merits of the investment,
the financial condition of the Company, the Sponsors or of any
other Project participants, the validity or enforceability of the
IFC Investment Agreement (or any related agreements) or the
Project Funds Agreement or the performance by the Company, the
Sponsors or of any other Project participants of their
obligations contained in the IFC Investment Agreement (or any
related agreements), the Project Funds Agreement or of any other
agreements executed in connection with the Project respectively.
(b) The Participant confirms that it is not entering into
this Agreement in reliance on any statement, representation or
warranty by IFC and confirms that: (i) it has itself been, and
will continue to be, responsible for making its own independent
appraisal of and investigations into the financial condition,
creditworthiness, affairs, status and nature of the Company, the
Sponsors and of any other Project participants; and (ii) it has
not solely relied, and will not solely rely, on IFC to appraise
or keep under review on its behalf the financial condition,
creditworthiness, affairs, status or nature of the Company, the
Sponsors or of any other Project participant.
(c) The Participant acknowledges that IFC makes no
representation or warranty, express or implied, as to, and
assumes no responsibility for, or with respect to, the accuracy
or completeness of the Information Memorandum dated April 1997 or
the other documents distributed in connection with the financing
hereby contemplated.
Section 5.5. IFC's Standard of Care. IFC shall exercise
the same care in the administration and enforcement of rights
under or in relation to the IFC Investment Agreement and the
Project Funds Agreement so far as the B Loan is concerned as it
exercises with respect to the A Loan or any other loans which are
for its own account. Nonetheless IFC shall not in the
administration of the Loan, be liable for any loss, costs,
damages or otherwise which may result from any act or omission on
the part of IFC unless caused by its gross negligence or willful
misconduct.
Section 5.6. Assignment. (a) The Participant represents
that it is acquiring the Relevant Participation for its own
account and not with a view to resale or distribution. The
Participant shall consult with IFC prior to any proposed sale,
transfer or other disposal ("assignment") of the whole or any
part of the Relevant Participation. It is however expressly
agreed that without the express consent of IFC (such consent not
to be unreasonably withheld or delayed), the Participant may not:
(i) assign the Relevant Participation before the full
Disbursement of the B Loan (or the cancellation of any
undisbursed balance); (ii) assign less than the whole of the
Relevant Participation or to more than one transferee; or (iii)
assign the whole or any part of the Relevant Participation to a
transferee which is not a financial institution or which is
incorporated or resident (as a branch or otherwise) in Nepal.
(b) Until such time as IFC has received written notice of
assignment (after IFC's consent has been obtained, if such
consent is required), IFC may deem and treat the Participant as
the absolute owner of the Relevant Participation for all
purposes, notwithstanding any notice to the contrary, and any
payment made to or on the order of the Participant shall
discharge the liability of IFC to the extent of the payment so
made. The provisions of this subsection are however expressly
subject to the provisions of any Participation Certificate which
may be issued, as provided in Section 2.4 (b) above.
(c) If the Participant does make any such assignment (with
IFC's consent, if so required), any assignee of the whole or any
part of the Relevant Participation shall be bound by the terms of
this Agreement as if references to the Participant and the
Relevant Participation were references to the assignee and its
Participation and otherwise mutatis mutandis.
(d) Solely for the purposes of item (iii) of subsection (a)
above it is expressly agreed and understood: (i) that a transfer
from one office or branch to another office or branch of the
Participant shall be treated as an assignment and accordingly
that no assignment to an office or branch resident in Nepal shall
be permitted without the express consent of IFC; and (ii) that
the Participant is initially taking the Relevant Participation
for the account of the office or branch disclosed in the Notices
Section of this Agreement (Section 5.10) and that the Participant
will inform IFC forthwith of any change in such office or
account.
Section 5.7. IFC's Rights not affected by other Investments
and Loans. The Participant expressly acknowledges that although
IFC may make other loans to and investments in the Company in the
future, that shall not diminish in any respect: (a) any of IFC's
rights, authority or discretion with respect to the
administration of the Loan or (b) IFC's freedom to exercise any
of such rights, authority or discretion in the manner it deems
appropriate under the terms of this Agreement.
Section 5.8. Reliance on Notices. In the absence of
manifest error, IFC may rely on any notice or other communication
received from the Participant, the Company or any other person as
contemplated in this Agreement which IFC reasonably believes to
be genuine and correct and to have been communicated or signed by
the person by whom it purports to be communicated or signed, and
IFC shall not be liable to the Participant for any of the
consequences of such reliance.
Section 5.9. Applicable Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PROVISIONS THEREOF (OTHER THAN SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK).
Section 5.10. Notices. Any notice or other communication
hereunder shall be in writing and may be delivered by hand, mail
(if the Participant has an address in the United States of
America), airmail, facsimile or telex and may be sent by either
party to the other at its address specified below (or by SWIFT or
by any other means in common usage, if agreed by the parties) or
to such other address as either party by notice shall have
designated. Any such notice or other communication shall be
effective upon receipt.
For the Participant:
__________________________
__________________________
__________________________
__________________________
Alternative address for communications by telex:
__________________________
__________________________
Alternative address for communications by facsimile:
__________________________
__________________________
For IFC:
International Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Alternative address for communications by telex:
248423 - World Bank
64145 - World Bank
197688 - World Bank
82987 - World Bank
Alternative address for communications by facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Section 5.11. Counterparts. This Agreement may be executed
in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto, acting through their
respective duly authorized representatives, have caused this
Agreement to be signed in their respective names, as of the date
and year first above written.
BAYERISCHE VEREINSBANK AG
By:_________________________________________
Authorized Representative
INTERNATIONAL FINANCE CORPORATION
By:_________________________________________
Authorized Representative
ANNEX A
Page 1 of 1
RECEIPT
International Finance Corporation ("IFC") has received from
Bayerische Vereinsbank AG (the "Participant") the principal
amount of _____________________ Dollars ($__________) and has
registered on its books in the name of the Participant a
participation of that amount in the B Loan provided by IFC to
Bhote Koshi Power Company Private Limited (the "Company")
pursuant to an IFC Investment Agreement dated as of the Closing
Date, between the Company and IFC.
Such participation is subject to the terms of the Participation
Agreement between IFC and the Participant, dated as of the
Closing Date.
THIS RECEIPT IS NOT AN OBLIGATION OF THE INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT OR OF ANY GOVERNMENT.
INTERNATIONAL FINANCE CORPORATION
By:__________________________________________
Authorized Signature
ANNEX B
Page 1 of 5
PARTICIPATION CERTIFICATE
THIS IS TO CERTIFY that International Finance Corporation
("IFC") for value received has registered on its books in the
name of Bayerische Vereinsbank AG (the "Participant") a
participation (the "Relevant Participation") in the principal
amount of __________________ Dollars ($__________) in the B Loan
(the "B Loan"), which together with the A Loan (the "A Loan"),
was provided by IFC to Bhote Koshi Power Company Private Limited
(the "Company"), pursuant to the IFC Investment Agreement (the
"IFC Investment Agreement") dated as of the Closing Date, between
the Company and IFC.
ANNEX B
Page 2 of 5
1. The Relevant Participation shall be repayable in the
principal amounts and on the maturity dates, and shall bear
interest at the rate per annum all as set forth below:
Principal
Amount Maturity Date Interest
$__________ ________________ The B Loan Floating
$__________ ________________ Rate, and as otherwise
$__________ ________________ in accordance with
$__________ ________________ Sections 3.3(b)(i), (ii),
$__________ ________________ (iv) and (v) of the
$__________ ________________ Special Conditions of
$__________ ________________ the IFC Investment
$__________ ________________ Agreement, payable
$__________ ________________ in Dollars on the
$__________ ________________ dates provided for in
$__________ ________________ the IFC Investment
$__________ ________________ Agreement.
$__________ ________________
$__________ ________________
$__________ ________________
$__________ ________________
$__________ ________________
Total $__________
The Relevant Participation is limited to the principal and
interest specified above and does not include the A Loan or any
other part of any other investment by IFC in the Company.
ANNEX B
Page 3 of 5
2. This Participation Certificate is transferable by the
Participant, or by the Participant's attorney duly authorized in
writing, upon presentation and surrender thereof for
cancellation, duly endorsed, or accompanied by a proper
instrument of assignment and transfer. Upon such transfer, a new
certificate of the same tenor shall be issued to the transferee.
IFC may deem and treat the person in whose name this
Participation Certificate is registered on the books of IFC as
the absolute owner thereof for all purposes, notwithstanding any
notice to the contrary; and any payment to or on the order of
such person shall discharge the liability of IFC to the extent of
the payment so made.
3. Payment of all sums payable by IFC hereunder shall be
made in accordance with the provisions of the Participation
Agreement referred to below.
4. This Participation Certificate is issued pursuant to
the Participation Agreement dated as of the Closing Date, between
IFC and Bayerische Vereinsbank AG, and is subject to the
provisions of that Agreement.
ANNEX B
Page 4 of 5
5. This Participation Certificate shall be surrendered to
IFC upon payment in full of all sums due hereunder.
THIS PARTICIPATION CERTIFICATE IS NOT AN OBLIGATION OF THE
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT OR OF ANY
GOVERNMENT.
INTERNATIONAL FINANCE CORPORATION
By:___________________________________________
Authorized Signature
ANNEX B
Page 5 of 5
Date:
FOR VALUE RECEIVED (I) (we) hereby sell, assign and transfer
to
_________________________________________________________________
_________________________________________________ the certificate
issued by International Finance Corporation to which this form of
transfer is attached; and we hereby irrevocably authorize
International Finance Corporation to transfer such certificate on
its books.
Dated
Witness: