EXHIBIT NO. 10.159
SECURITY AGREEMENT AND ASSIGNMENT
among
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
INTERNATIONAL FINANCE CORPORATION
DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH
and
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Trustee
under the Trust and Retention Agreement
Dated as of the Closing Date
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION 2
ARTICLE 2
GRANT OF SECURITY INTEREST
Section 2.1. Grant of Security Interest. 2
Section 2.2. Maintenance of Records. 3
ARTICLE 3
PROVISIONS REGARDING ASSIGNED CONTRACTS
Section 3.1. Performance of Obligations. 4
Section 3.2. Signed Counterparts. 4
Section 3.3. Representations and Warranties as to Assigned
Contracts and other Collateral. 4
Section 3.4. Instructions with Respect to Future Third
Party Agreements and other Collateral 5
Section 3.5. No Obligation of the Trustee. 5
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties. 6
ARTICLE 5
FURTHER ASSURANCES
Section 5.1. Further Documentation; Pledge of Instruments. 6
ARTICLE 6
INDEMNIFICATION, ETC.
Section 6.1. Indemnification. 7
Section 6.2. Further Indemnification. 7
Section 6.3. Equipment. 7
Section 6.4. Continuous Perfection. 7
ARTICLE 7
ATTORNEY-IN-FACT
Section 7.1. Trustee's Appointment as Attorney-in-Fact. 8
Section 7.2. Performance by the Trustee of the Company's
Obligations. 10
ARTICLE 8
RIGHTS AND REMEDIES OF COLLATERAL AGENT UPON DEFAULT
Section 8.1. Payments Received. 11
Section 8.2. Remedies. 11
Section 8.3. Waivers. 12
Section 8.4. Reasonable Care. 13
Section 8.5. The Trustee. 13
ARTICLE 9
EXPENSES; INDEMNIFICATION; FEES
Section 9.1. Expenses. 13
Section 9.2. Indemnification. 13
ARTICLE 10
SATISFACTION AND DISCHARGE OF TRUST
Section 10.1. Satisfaction and Discharge of Trust. 14
ARTICLE 11
MISCELLANEOUS PROVISIONS
Section 11.1. Benefit of Agreement. 15
Section 11.2. Successors or Assigns. 15
Section 11.3. Notices. 15
Section 11.4. Counterparts. 16
Section 11.5. Headings Descriptive. 17
Section 11.6. Governing Law; Submission to
Jurisdiction; Venue. 17
Section 11.7. Survival. 17
Section 11.8. No Waiver; Cumulative Remedies. 18
Section 11.9. Severability. 18
Section 11.10. Communications. 18
Section 11.11. Amendments. 18
EXHIBIT A Assigned Contracts 1
EXHIBIT B Financing Statement Filings 1
SECURITY AGREEMENT AND ASSIGNMENT
SECURITY AGREEMENT AND ASSIGNMENT, dated as of the Closing
Date (this "Agreement"), among BHOTE KOSHI POWER COMPANY PRIVATE
LIMITED, a private limited liability company registered under the
Nepalese Company Act, 2021 (the "Company"), INTERNATIONAL FINANCE
CORPORATION, an international organization organized and existing
by virtue of the Articles of Agreement among its member countries
("IFC"), DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT
mbH, a company organized and existing under the laws of the
Federal Republic of Germany ("DEG") (IFC and DEG are hereinafter
referred to collectively as the "Lenders" and individually as a
"Lender"), and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, not in its individual capacity but solely as Trustee
under the Trust and Retention Agreement (the "Trustee").
PRELIMINARY STATEMENTS
The Company has been granted the right to build, own and
operate a 36 MW (nominal net) hydroelectric power plant in the
Sindhupalchok District in Nepal.
IFC is willing to provide financing for the power plant
pursuant to the terms of that certain IFC Investment Agreement
dated as of the Closing Date between the Company and IFC (the
"IFC Investment Agreement").
DEG is willing to provide financing for the power plant
pursuant to the terms of that certain DEG Investment Agreement
dated as of the Closing Date between the Company and DEG (the
"DEG Investment Agreement," and together with the IFC Investment
Agreement, the "Investment Agreement").
The Company, IFC and DEG have entered into that certain
Investment Agreement General Conditions dated as of the Closing
Date (the "General Conditions").
It is a condition precedent to the obligations of each of
IFC and DEG under the Investment Agreement that this Agreement
shall have been entered into by the parties hereto.
NOW, THEREFORE, IT IS AGREED:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
For all purposes of this Agreement, (i) capitalized terms
not otherwise defined herein shall have the meanings set forth in
Schedule A to the General Conditions and (ii) the principles of
construction set forth in Schedule A to the General Conditions
shall apply.
ARTICLE 2
GRANT OF SECURITY INTEREST
Section 2.1. Grant of Security Interest. As security for
the prompt and complete payment and performance when due of all
the Obligations, and in order to induce each of the Lenders to
make the Loans, the Company hereby assigns, conveys, mortgages,
pledges, hypothecates and transfers to the Trustee, and hereby
grants to the Trustee for the benefit of the Lenders, a
continuing security interest in and Lien on all the Company's
right, title and interest in, to and under the following (all of
such right, title and interest being hereinafter collectively
called the "Collateral"):
(i) the Assigned Contracts listed in Exhibit A hereto,
including, without limitation, (a) all rights of the Company
to receive moneys due and to become due thereunder or
pursuant thereto, (b) all rights of the Company to receive
proceeds of any insurance, indemnity, warranty, letter of
credit, surety bond, performance bond or guaranty with
respect thereto and (c) all claims of the Company for
damages for breach thereof or default thereunder and,
subject to the Investment Agreement, (d) the right of the
Company to terminate, amend, supplement or otherwise modify
any such agreement;
(ii) the Accounts;
(iii) the Equipment;
(iv) the Supplies and Raw Materials;
(v) the Inventory;
(vi) the General Intangibles;
(vii) all rights and claims of the Company, now or hereafter
existing, under any indemnity, warranty or guaranty provided
for or arising out of or in connection with the EPC
Contract, any Equipment or otherwise, and any performance
bonds, letters of credit or other support delivered by the
EPC Contractor or any other equipment supplier or contractor
to the Company (including, without limitation, the EPC
Performance Guarantees);
(viii) all Assigned Approvals;
(ix) any and all cash, investments and securities from time
to time on deposit (including all income or gain earned
thereon) in the accounts (other than the Holding Account or
the Nepal Holding Account) of the Company created pursuant
to the Trust and Retention Agreement or the Nepal Agency and
Retention Agreement;
(x) any and all other drafts, acceptances, contract
rights, accounts receivable, documents, letters of credit
(including, without limitation, the NEA Letter of Credit,
the Panda Letter of Credit, the Panda Project Completion
Letter of Credit and the Equity Letters of Credit), deposit
accounts, instruments, chattel paper, rights, interests,
general intangibles and assets owned by the Company on the
date hereof or hereafter arising or acquired, including,
without limitation, designs, plans and specifications
relating to the Project; and
(xi) to the extent not otherwise included in the
foregoing, all proceeds and products (including,
without limitation, power generated by operation of the
Project) of all of the foregoing Collateral;
BUT EXCLUDING, in any case, the Company's right, title and
interest in and to the Holding Account or the Nepal Holding
Account and any cash, investments and securities on deposit
therein (the "Excluded Accounts").
The Collateral is intended to include all of the above-
described assets, wheresoever the same may be now or hereafter
located.
It is the intention of the parties that the foregoing description
of the Collateral be sufficient, together with the description of
the "Collateral" under the Mortgage, to enable the Trustee, upon
the occurrence and continuance of an Event of Default, to take
possession of, and foreclose upon, all of the respective
interests of the Company in and to the Project Site, the Project
and any and all real property and personal property, tangible and
intangible, used or usable in connection therewith and to enable
the Trustee to operate, sell or otherwise dispose of the entire
interest of the Company in and to the Project Site, the Project
or any part thereof, but, in each case, excluding the Excluded
Accounts.
Section 2.2. Maintenance of Records. The Company will
keep and maintain at its own cost and expense customary business
records in respect of the Collateral. Such records shall be kept
at the Company's chief executive office.
ARTICLE 3
PROVISIONS REGARDING ASSIGNED CONTRACTS
Section 3.1. Performance of Obligations. The Company will
comply with all requirements of applicable law and Assigned
Approvals and, except as otherwise expressly permitted in the
Investment Agreement, will duly perform and observe in all
material respects all of the covenants, agreements and conditions
on its part to be performed or observed under the Assigned
Contracts to which it is a party.
Section 3.2. Signed Counterparts. Except as otherwise
expressly permitted in the Investment Agreement, the Company
agrees that it will not waive any default under or breach of any
of the Assigned Contracts to which it is a party or waive, fail
to enforce, forgive or release any right, interest or entitlement
of any kind, however arising, under or in respect of any Assigned
Contract, or agree or consent to the variation in any provision
of any Assigned Contract or in the performance of any Person
required thereunder. The Company will deliver to the Trustee
promptly upon receipt thereof a copy of any notice or other
document issued or received by the Company pursuant to any
Assigned Contract. The Company agrees to furnish to the Trustee
as soon as possible (and in any event within ten (10) days after
the execution thereof) a signed counterpart of each amendment,
modification or supplement to any Assigned Contract and a copy of
each Third Party Agreement executed after the date hereof (other
than Non-Material Agreements).
Section 3.3. Representations and Warranties as to Assigned
Contracts and other Collateral. The Company hereby represents
and warrants as of the date hereof:
(a) Each of the Assigned Contracts in effect on the date
hereof, a true and complete copy of which has been furnished
to the Trustee, has been duly authorized, executed and
delivered by the Company, and, to the knowledge of the
Company, each of the other parties thereto, and is in full
force and effect; and is binding upon the Company and, to
the knowledge of the Company, each of the other parties
thereto;
(b) None of the Assigned Contracts has heretofore been
amended, modified, suspended, canceled or terminated, except
as set forth in Exhibit A hereof; none of the Company nor,
to the knowledge of the Company, the other parties thereto
is currently in default in any material respect under any of
the terms thereunder;
(c) None of the Assigned Contracts has been transferred or
assigned by the Company, or, to the knowledge of the
Company, any other party thereto, except to the Trustee as
expressly provided herein;
(d) The Company has given to each other party to any
of the Assigned Contracts executed on or before the
date hereof notice of an assignment of such Assigned
Contract to the Trustee and has obtained a consent of
each such other party to such assignment. The Company
has directed each such other party to make payments due
or to become due and all amounts payable to the Company
thereunder directly to the Trustee or the Designee; and
(e) As of the Financial Closing Date the Company will have
delivered possession to the Trustee of the complete
originals of the Equity Letters of Credit and the EPC
Performance Guarantee.
Section 3.4. Instructions with Respect to Future Third
Party Agreements and other Collateral.
(a) The Company will give instructions similar to those
referenced in Section 3.3(d) hereof to the other parties to
Third Party Agreements (other than Non-Material Agreements)
executed after the date hereof.
(b) The Company shall deliver possession to the Trustee
promptly upon the Company's receipt of the executed NEA
Letter of Credit, Panda Letter of Credit, Panda Project
Completion Letter of Credit and EPC Warranty Performance
Guarantee together with, in the case of the NEA Letter of
Credit and the EPC Warranty Performance Guarantee, an
acknowledgement and consent executed by the respective
issuers thereof in form and substance satisfactory to the
Lenders providing in each case, among other things, that the
issuer of each of the NEA Letter of Credit and the EPC
Warranty Performance Guarantee acknowledges and consents (i)
to the assignment by way of security of the NEA Letter of
Credit and the EPC Warranty Performance Guarantee by the
Company to the Trustee, (ii) that upon delivery by the
Trustee or either of the Lenders of notice of an Event of
Default, the Trustee will thereafter be the beneficiary for
all purposes under the NEA Letter of Credit and the EPC
Warranty Performance Guarantee and shall be entitled to all
rights and remedies thereunder or in connection therewith,
including, without limitation, the right to claim, draw,
request or demand payment under the NEA Letter of Credit and
the EPC Warranty Performance Guarantee.
Section 3.5. No Obligation of the Trustee. Anything
herein to the contrary notwithstanding, the Company shall remain
liable under the Assigned Contracts to perform all the
obligations assumed by it thereunder and the Trustee shall have
no obligation or liability thereunder by reason of or arising out
of the assignments herein provided for, nor shall the Trustee be
required or obligated in any manner to perform or fulfill any
obligations of the Company under the Assigned Contracts or
pursuant thereto, or to make any payment thereunder, or, unless
and until indemnified to its satisfaction, to present or file any
claim or to take any other action to enforce any right assigned
to it hereunder or to which it may be entitled pursuant hereto at
any time or times.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties. The
Company hereby represents and warrants, as of the date hereof,
that:
(a) The Company is the sole owner of each item of
Collateral in existence on the date hereof and will be the sole
owner of each item of Collateral hereafter acquired, having good
and valid title thereto, free and clear of Liens, except
Permitted Liens.
(b) No security agreement, financing statement,
mortgage, equivalent security or lien instrument or continuation
statement covering all or any part of the Collateral is on file
or of record in any public office, except those in favor of the
Trustee pursuant to this Agreement or the Mortgage.
(c) Financing statements or other appropriate
instruments having been filed in the public offices listed on
Exhibit B hereto, (i) this Security Agreement constitutes a valid
and continuing lien on and (to the extent possible under
applicable law) perfected security interest in the Collateral in
favor of the Trustee, for the benefit of the Lenders, and is
enforceable as such against creditors of and purchasers from the
Company against any owner or mortgagee of the real property where
any of the equipment is located, and against any purchaser of
such real property and any present or future creditor obtaining a
Lien on such real property, and (ii) all action currently
necessary to protect and perfect such Lien on and security
interest in each item of such Collateral has been duly taken.
(d) The Company's chief executive office and principal
place of business and the place where its records concerning the
Collateral are kept is: KHA ▇-▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇. The Company does not have a place of business
or residence in the United States of America.
ARTICLE 5
FURTHER ASSURANCES
Section 5.1. Further Documentation; Pledge of
Instruments. At any time and from time to time, upon the written
request of the Trustee, and at the sole expense of the Company,
the Company shall duly execute and deliver promptly any and all
such further instruments and documents and take such further
action as the Trustee may deem necessary in order to obtain the
full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, marking its books
and records or providing notice to perfect or evidence the
Trustee's security interest in such part of the Collateral, if
any, in which the Trustee's security interest cannot be perfected
by filing, placing the interest of the Trustee as lienholder on
motor vehicle certificates of title and the filing of any
financing or continuation statements under the Code in effect in
any jurisdiction with respect to the Liens and security interests
granted hereby. The Company also hereby authorizes the Trustee
to file any such financing or continuation statement without the
signature of the Company to the extent permitted by applicable
law. The Trustee agrees to deliver copies of any such filing to
the Company. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument
shall be immediately pledged to the Trustee hereunder, duly
endorsed in a manner satisfactory to the Trustee.
ARTICLE 6
INDEMNIFICATION, ETC.
Section 6.1. Indemnification. In any suit,
proceeding or action brought by the Trustee, after the occurrence
and during the continuation of an Event of Default, under any
Account or Assigned Contract or for any sum owing thereunder, or
to enforce any provisions of such Account or Assigned Contract,
the Company will save, indemnify and hold the Trustee harmless
from and against any and all expenses, losses or damages suffered
by reason of any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the Account debtor or the
other party under such Assigned Contract, arising out of a breach
by the Company of any obligation to the Account debtor or to the
other party under such Assigned Contract or arising out of any
other agreement, indebtedness or liability at any time owing to
or in favor of such other party or its successors from the
Company, and all such obligations of the Company shall be and
remain enforceable against and only against the Company and shall
not be enforceable against the Trustee. The foregoing is not
intended to indemnify any party for any expense, loss, damage,
claim or liability resulting from its gross negligence or willful
misconduct.
Section 6.2. Further Indemnification. The
Company will furnish to the Trustee from time to time statements
and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the
Trustee may reasonably request, all in reasonable detail.
Section 6.3. Equipment. No Equipment shall be
removed from the Site, except in the ordinary course of the
Company's business or in connection with the repair,
refurbishment or replacement of such Equipment, without the
express prior written consent of the Trustee.
Section 6.4. Continuous Perfection. The Company
will not change its name or identity or change the location of
its principal place of business or chief executive office, or
conduct any regular or substantial business or operations in or
from any office or location other than that set forth in Section
4.1(d) hereof unless the Company shall have given the Trustee at
least sixty (60) days' prior written notice thereof and shall
have taken, at the Company's expense, all action necessary in
order to continue the perfection and priority of the Liens and
security interests in the Collateral intended to be created by
this Agreement.
ARTICLE 7
ATTORNEY-IN-FACT
Section 7.1. Trustee's Appointment as Attorney-in-Fact.
(a) The Company hereby irrevocably constitutes and
appoints the Trustee and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead
of the Company and in the name of the Company or in its own name,
from time to time, for the purpose of carrying out the terms of
and in a manner consistent with the terms of this Agreement, to
take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement. The Company hereby
gives the Trustee the power and right, on behalf of the Company,
without notice to or assent by the Company, upon the occurrence
and continuance of an Event of Default, to do the following:
(i) to pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or
threatened against the Collateral, to effect any
repairs or obtain any insurance called for by the terms
of this Agreement or the Investment Agreement and to
pay all or any part of the premium therefor and the
costs thereof;
(ii) to ask, demand, collect, receive and give
acquittances and receipts for any and all moneys due
and to become due under any Collateral and, in the name
of the Company or its own name or otherwise, to take
possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the
payment of moneys due under any Collateral;
(iii) to file any claim, institute any proceeding in
any court of law or equity, or take any other action
deemed appropriate by the Trustee for the purpose of
collecting any and all such moneys due under any
Collateral whenever payable and to enforce any other
right in respect of any Collateral;
(iv) to direct any party liable for any payment under
any Collateral to make payment of any and all moneys
due and to become due thereunder directly to the
Trustee or as the Trustee shall direct;
(v) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts
and other documents relating to the Collateral;
(vi) to defend any suit, action or proceeding brought
against the Company with respect to any Collateral;
(vii) to settle, compromise or adjust any suit, action
or proceeding described above and, in connection
therewith, to give discharges or releases;
(viii) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of
the Collateral as fully and completely as though the
Trustee were the absolute owner thereof for all
purposes, and to do, at the Trustee's option and the
Company's expense, at any time, or from time to time,
all acts and things which the Trustee deems necessary
to protect, preserve or realize upon the Collateral and
the Trustee's security interest therein, in order to
effect the intent of this Agreement, all as fully and
effectively as the Company might do;
(ix) to claim, request, draw or demand payment under
the Equity Letters of Credit, the NEA Letter of Credit,
the Panda Project Completion Letter of Credit, the
Panda Letter of Credit and the EPC Performance
Guarantees; and
(x) to take possession of all or any part of the
Collateral, and to exclude the Company and all Persons
claiming under the Company wholly or partly therefrom,
and thereafter to hold, store, use, operate, manage and
control the same, and upon any such taking of
possession, at the expense of the Company, to make all
such repairs, replacements, alterations, additions and
improvements to and of the Collateral as the Trustee
may deem proper, and to manage and control the
Collateral and to carry on the business of, and to
exercise all rights and powers of, the Company in
respect thereto as the Trustee shall deem best,
including the right to enter into any and all such
agreements with respect to the leasing and/or operation
of the Collateral or any part thereof as the Trustee
may see fit, and to collect and receive all rents,
issues, profits, fees, revenues and other income of the
same and every part thereof, with such rents, issues,
profits, fees, revenues and other income being applied
to pay the expenses of holding and operating the
Collateral, of conducting the business thereof and of
all maintenance, repairs, replacements, alterations,
additions and improvements with respect thereto, and to
make all payments which the Trustee may be required or
may elect to make, if any, for taxes, assessments,
insurance and other charges upon the Collateral or any
part thereof, and all other payments which the Trustee
may be required or authorized to make under any
provision of this Agreement (including, without
limitation, legal costs and attorneys' fees).
Any surplus received in respect of the
Collateral after payment in full of the
Obligations will be paid to the Company or
such other Person as may be lawfully entitled
thereto.
The Company hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof and in
accordance herewith. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(b) The powers conferred on the Trustee hereunder are
solely to protect its interests in the Collateral and shall not
impose any duty upon it to exercise any such powers. The Trustee
shall be accountable only for such amounts as the Trustee shall
actually receive as a result of the exercise of such powers and
neither the Trustee nor any of its officers, directors, employees
or agents shall be responsible to the Company for any act or
failure to act, except for their own gross negligence or willful
misconduct.
(c) The Company also authorizes the Trustee, during
the continuation of an Event of Default, (i) to communicate in
its own name with any party to any contract, agreement or
instrument included in the Collateral, at any time, with regard
to any matter relating to such contract, agreement or instrument,
and (ii) to execute, in connection with any sale provided for in
Section 8.2 hereof, any endorsements, assignments, bills of sale
or other instruments of conveyance or transfer with respect to
the Collateral.
Section 7.2. Performance by the Trustee of the
Company's Obligations. If the Company fails to perform or comply
with any of its agreements contained herein and the Trustee, as
authorized by the terms of this Agreement, shall perform or
comply, or otherwise cause the performance of or compliance with,
any such agreements, the expenses of the Trustee incurred in
connection with such performance or compliance, together with
interest thereon, shall be payable by the Company to the Trustee
on demand and shall constitute part of the Obligations secured
hereby.
ARTICLE 8
RIGHTS AND REMEDIES OF COLLATERAL AGENT UPON DEFAULT
Section 8.1. Payments Received. If an Event of
Default shall occur and be continuing, all payments received by
the Company under or in connection with any of the Collateral
shall be held by the Company in trust for the Trustee, shall be
segregated from other funds of the Company and shall, forthwith
upon receipt by the Company, be turned over to the Trustee or the
Designee in the same form as received by the Company (duly
endorsed by the Company to the Trustee or the Designee).
Section 8.2. Remedies. If an Event of Default
shall occur and be continuing, the Trustee may exercise, in
addition to all other rights and remedies granted to it in this
Agreement and in any other Security Document or other instrument
or agreement securing, evidencing or relating to the Obligations,
all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the Company
expressly agrees that in any such event the Trustee, without
demand of performance or other demand, advertisement or further
notice of any kind (except the notice specified below with
respect to a public or private sale) to or upon the Company or
any other Person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Collateral or
any part thereof, and/or sell, lease, assign, give options to
purchase or sell, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do so), in one or
more parcels at public or private sale or sales, at any exchange,
broker's board or at any of the Trustee's offices or elsewhere at
such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The
Trustee and each of the Lenders shall have the right upon any
such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any
part of the Collateral so sold, free of any right or equity of
redemption in the Company, which right or equity of redemption is
hereby expressly waived and released. The Company further
agrees, at the Trustee's request, to assemble the Collateral, and
make it available to the Trustee at such places as the Trustee
reasonably shall select, whether at the Company's premises or
elsewhere. The Trustee shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale
toward payment of the Obligations (in such order as the Lenders
shall direct in the event such net proceeds are not sufficient to
pay the Obligations in full), and then any surplus shall be paid
to such Persons as may be lawfully entitled thereto. The Company
agrees that the Trustee need not give more than ten (10) days'
notice of the time and place of any public sale or of the time
after which a private sale may take place and that such notice is
reasonable notification of such matters.
Section 8.3. Waivers.
(a) The Company hereby waives presentment, demand,
protest and, except as otherwise expressly provided herein and to
the extent permitted by applicable law, notice of any kind in
connection with this Agreement or any Collateral.
(b) Except as otherwise required by applicable law,
the Trustee shall not be required to ▇▇▇▇▇▇▇▇ any Collateral or
to resort to any item of Collateral in any particular order; and
all of its rights hereunder and in respect of the Collateral
shall be cumulative and in addition to all other rights, however
existing or arising. To the extent that it lawfully may, the
Company (i) hereby agrees that it will not invoke any law
relating to the marshaling of collateral which might cause delay
in or impede the enforcement of the Trustee's rights under this
Agreement or under any other Security Document, and (ii) hereby
irrevocably waives the benefits of all such laws and any and all
rights to equity of redemption or other rights of redemption that
it may have in equity or at law with respect to the Collateral.
(c) Except as otherwise provided in this Agreement,
THE COMPANY HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, JUDICIAL HEARING IN CONNECTION WITH THE TRUSTEE'S
TAKING POSSESSION OR THE TRUSTEE'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY HEARING FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE
COMPANY WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY
STATUTE OF THE UNITED STATES OR NEPAL OR ANY POLITICAL
SUBDIVISION OF ANY SUCH JURISDICTION, and the Company hereby
further waives, to the maximum extent permitted by applicable
law:
(i) all damages occasioned by such taking of
possession, except any damages which are the direct
result of the gross negligence or willful misconduct of
the Trustee or any person acting on its behalf or
instruction;
(ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the
enforcement of the Trustee's rights hereunder; and
(iii) all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or
hereafter in force under any applicable law in order to
prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion
thereof, and the Company, for itself and all who may
claim under it, insofar as it or they now or hereafter
lawfully may, hereby waives the benefit of all such
laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all
right, title, interest, claim and demand, either at law or in
equity, of the Company therein and thereto, and shall be a
perpetual bar both at law and in equity against the Company and
against any and all persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part
thereof, from, through and under the Company.
Section 8.4. Reasonable Care. The Trustee shall
be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that
which the Trustee accords its own property.
Section 8.5. The Trustee. In connection with its
power and functions hereunder, the Trustee shall act solely as
the trustee of the Lenders and shall not assume or be deemed to
have assumed any relationship of agency or other fiduciary
relationship with the Company. Wilmington Trust Company in
acting hereunder shall be entitled to the rights, protections and
immunities of the Trustee under the Trust and Retention
Agreement.
ARTICLE 9
EXPENSES; INDEMNIFICATION; FEES
Section 9.1. Expenses. The Company agrees to pay
or reimburse within thirty (30) days of demand therefor all out-
of-pocket expenses of the Trustee (including expenses for legal
services) in respect of, or incident to, the preparation,
execution and delivery of this Agreement, the administration of
this Agreement and the Collateral, the enforcement of any of the
provisions of this Agreement or in connection with any amendment,
waiver or consent relating to this Agreement (which shall be
reasonable other than upon the occurrence and during the
continuance of an Event of Default or any event which would
become (with the expiration of any applicable grace periods or
the giving of notice or both) an Event of Default), provided that
any such demand is accompanied by invoices pertaining thereto.
Section 9.2. Indemnification. The Company agrees
to indemnify and hold harmless the Trustee, its directors,
officers, employees, agents and representatives (the Trustee and
its directors, officers, employees, agents and representatives
each an "Indemnified Party") from and against any and all claims,
losses and liabilities growing out of or resulting from or in any
way related to (i) this Agreement and the transactions hereunder
(including, without limitation, enforcement of this Agreement,
but excluding any such claims, losses or liabilities resulting
from the Indemnified Party's gross negligence or willful
misconduct) or (ii) any refund or adjustment of any amount paid
or payable to the Trustee or any other Indemnified Party under or
in respect of this Agreement which may be ordered or otherwise
required by any Person.
ARTICLE 10
SATISFACTION AND DISCHARGE OF TRUST
Section 10.1. Satisfaction and Discharge of Trust.
(a) If (i) at any time all Obligations owing to the
Lenders have been paid in full and (ii) a period of one hundred
twenty (120) days (or such other period as may be applicable with
respect to preference or similar periods under applicable
bankruptcy, insolvency or similar laws) has elapsed since the
condition set out in clause (i) is satisfied without any court
determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters, then this Agreement shall terminate; provided that the
provisions of Article 9 shall survive such termination.
(b) If at any time the Trustee shall have received a
notice from the Lenders that all Obligations owing to the Lenders
have been paid in full and (ii) a period of one hundred twenty
(120) days (or such other period as may be applicable with
respect to preference or similar periods under applicable
bankruptcy, insolvency or similar laws) has elapsed since the
condition set out in clause (i) is satisfied without any court
determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters, then, upon payment in full of all amounts payable to the
Trustee pursuant to Section 9.1 hereof, this Agreement shall
cease to be of further effect and the Trustee, at the cost and
expense of the Company, upon delivery to the Trustee of a
certificate signed by two officers of the Company and concurred
in by the Lenders stating that all conditions precedent to the
satisfaction and discharge of this Agreement and the other
Security Documents have been complied with, shall execute proper
instruments acknowledging the satisfaction and discharge of this
Agreement, and shall duly assign, transfer and deliver to the
Company such of the Collateral as has not theretofore been sold
or otherwise applied or released pursuant to this Agreement,
together with any moneys at the time held by the Trustee
hereunder. The Lenders agree to give the notice provided for in
this paragraph without unreasonable delay.
ARTICLE 11
MISCELLANEOUS PROVISIONS
Section 11.1. Benefit of Agreement. Nothing in this
Agreement, expressed or implied, shall give or be construed to
give to any Person other than the parties hereto any legal or
equitable right, remedy or claim under this Agreement, or under
any covenant or provision herein contained, all such covenants
and provisions being for the sole benefit of the parties herein.
Section 11.2. Successors or Assigns. This Agreement
shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the
parties hereto; provided, however, that the Company may not
assign or transfer any of its rights or obligations hereunder
without the prior written consent of the Lenders. Each of the
Lenders may transfer, assign or grant its rights hereunder in
connection with an assignment or transfer of all or any part of
its interest in its Commitment or the IFC Loans or the DEG Loan,
as the case may be, in accordance with the Investment Agreement.
Section 11.3. Notices. All notices, demands, requests
and other communications provided for hereunder shall be in
writing and shall be deemed to have been given (a) when presented
personally, (b) when sent by overnight courier service, on the
Business Day following the date of delivery to such courier
service, or such later day as demonstrated by a bona fide receipt
therefor, or (c) when transmitted by facsimile, upon
acknowledgment of receipt by the recipient. Any party may
designate from time to time by written notice to the other
parties another address to which notices are to be sent.
Addresses:
Bhote Koshi Power Company Private Limited
Address: KHA ▇-▇▇▇
▇▇▇▇▇▇▇▇, Tahachal
Kathmandu, Nepal
Attention: Project Manager
Facsimile: ▇▇▇-▇-▇▇▇▇▇▇
with a copy to:
Panda Energy International, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IFC
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Director, Power Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
DEG
Address: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇
▇▇▇▇▇ (Mungersdorf)
Federal Republic of Germany
Attention: Infrastructure Department
Facsimile: 011 49221 4986 107
Wilmington Trust Company
Address: ▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 11.4. Counterparts. This Agreement may be
executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
Section 11.5. Headings Descriptive. The headings of
the several Articles of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
Section 11.6. Governing Law; Submission to
Jurisdiction; Venue. (a) This Agreement is a contract made under
the laws of the State of New York of the United States of America
and shall for all purposes be governed by and construed in
accordance with the laws of such State without regard to the
conflicts of laws provisions thereof (other than Section 5-1401
and 5-1402 of the General Obligations Law of the State of New
York). Any legal action or proceeding against the Company with
respect to this Agreement or any other Loan Document may be
brought in the courts of the State of New York in the County of
New York or of the United States for the Southern District of New
York and, by execution and delivery of this Agreement, the
Company hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of
the aforesaid courts. The Company agrees that a judgment in any
such action or proceeding shall be conclusive and binding upon
itself, and may be enforced in any other jurisdiction, including
without limitation Nepal, by a suit upon such judgment, a
certified copy of which shall be conclusive evidence of the
judgment. The Company hereby irrevocably designates, appoints
and empowers CT Corporation System, with offices on the date
hereof at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its
designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents which
may be served in any such action or proceeding. If for any
reason such designee, appointee and agent shall cease to be
available to act as such, the Company agrees to designate a new
designee, appointee and agent in New York City on the terms and
for the purposes of this provision satisfactory to the Lenders.
The Company further irrevocably consents to the service of
process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at its
address set forth in Section 11.3 hereof, such service to become
effective ten (10) days after such mailing. Nothing herein shall
affect the right of the Trustee or either of the Lenders to serve
process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Company in Nepal or
in any other jurisdiction.
(b) The Company hereby irrevocably waives any
objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement or any other Loan
Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or
claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient
forum.
Section 11.7. Survival. All indemnities, agreements,
representations and warranties made herein shall survive the
execution and delivery of this Agreement and the making and
repayment of the Obligations.
Section 11.8. No Waiver; Cumulative Remedies. No
failure or delay on the part of the Trustee or either of the
Lenders in exercising any right, power or privilege hereunder or
under any other Loan Document, and no course of dealing between
the Company and the Trustee or either of the Lenders, shall
impair any such right, power or privilege or operate as a waiver
thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Loan Document
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or provided in any other Loan
Document are cumulative and not exclusive of any rights, powers
or remedies which the Trustee or either of the Lenders would
otherwise have. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or
demand in similar or other circumstances or constitute a waiver
of the rights of the Trustee or either of the Lenders to any
other or further action in any circumstances without notice or
demand.
Section 11.9. Severability. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability but that shall
not invalidate the remaining provisions of this Agreement or
affect such provision in any other jurisdiction.
Section 11.10. Communications. All documents to be
furnished or communications to be given or made under this
Agreement shall be in the English language or, if in another
language, shall be accompanied by a translation into English
certified by a representative of the Company, which translation
shall be the governing version between the Company, the Lenders
and the Trustee.
Section 11.11. Amendments. Neither this Agreement nor
any of the terms hereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination
is in writing signed by all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers on the
date first set forth above.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By: _________________________
Name:
Title:
INTERNATIONAL FINANCE CORPORATION,
as Lender
By: ____________________________
Name:
Title:
Authorized Signatory
DEG-DEUTSCHE INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH,
as Lender
By: ____________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in
its individual capacity but
solely as Trustee under the
Trust and Retention Agreement
By: ____________________________
Name:
Title: Vice President
EXHIBIT A
Assigned Contracts
As each of the following may be amended, supplemented, modified
or restated:
1. Project Licenses issued by HMGN, dated
November 28, 1996, as amended.
2. Project Agreement, dated 21 July 1996,
between HMGN and the Company.
3. Power Purchase Agreement, dated 21 July
1996, between NEA and the Company.
4. Amended and Restated Contract for the
Engineering, Procurement and Construction of the
Upper Bhote Koshi Hydroelectric Project, dated as of
19 December 1996, between the Company and China
Gezhouba Construction Group Corporation for Water
Resources and Hydropower.
5. Operations and Maintenance Agreement dated
as of April 24, 1997 between the Company and the O&M
Operator.
6. Amended and Restated Services Agreement
dated July 11, 1997 between Panda of Nepal and Harza
Engineering Company International L.P., as amended by
that certain Amendment No. 1 dated December 5, 1997,
for services provided outside Nepal, and the Amended
and Restated Services Agreement dated July 11, 1997
between the Company and Harza Engineering Company
International L.P. for services provided inside
Nepal.
7. Agreement between HMGN, Ministry of Forest
and Soil Conservation, Department of Forest and the
Company, dated February 27, 1997, concerning granting
a lease on certain land referred to therein.
8. Equity Subscription Agreement, dated as of
the Closing Date, among the Company, Himal
International Power Corporation Pvt. Ltd. and the
Trustee.
9. Equity Subscription Agreement, dated as of
the Closing Date, among the Company, Panda of Nepal
and the Trustee.
10. Equity Subscription Agreement, dated as of
the Closing Date, among the Company, RDC of Nepal and
the Trustee.
11. Land Leases.
EXHIBIT B
Financing Statement Filings
1. UCC-1 Financing Statement filed at the Secretary of
State of Delaware, showing Wilmington Trust Company, as
Trustee, with respect to the Collateral created under the
Trust and Retention Agreement.
2. UCC-1 Financing Statement filed at the Secretary of
State of New York, showing Wilmington Trust Company, as
Trustee, with respect to the Collateral created under the
Trust and Retention Agreement.