EXHIBIT NO. 10.143
INVESTMENT AGREEMENT
General Conditions
AGREEMENT AS TO CERTAIN REPRESENTATIONS,
WARRANTIES, COVENANTS AND OTHER TERMS
among
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED,
INTERNATIONAL FINANCE CORPORATION,
and
DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH
Dated as of the Closing Date
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION;
GENERAL CONDITIONS AND SPECIAL CONDITIONS
Section 1.1. Special Conditions and General Conditions 1
Section 1.2. Definitions 1
ARTICLE 2.
ROLE OF INDEPENDENT ENGINEER
Section 2.1. Independent Engineer 1
ARTICLE 3.
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to Initial Disbursement 1
Section 3.2. Conditions Precedent to Certain Disbursements 8
Section 3.3. Conditions Precedent to All Disbursements On
or After May 31, 1998 9
Section 3.4. Conditions Precedent to Disbursements On or
After the Date Which is 180 Days Prior to the
Scheduled First Unit Delivery Date for the
First Unit and to Disbursements On or After
the First Unit Delivery Date 9
Section 3.5. Conditions Precedent to All Disbursements 9
Section 3.6. No Waiver, Etc 11
ARTICLE 4.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 4.1. Company Representations and Warranties 12
Section 4.2. Lenders' Reliance 18
ARTICLE 5.
AFFIRMATIVE COVENANTS
Section 5.1. Information Covenants. 18
Section 5.2. Books, Records and Inspections; Accounting
and Auditing Matters. 23
Section 5.3. Insurance. 24
Section 5.4. Corporate Franchises; Enforcement of
Principal Documents. 26
Section 5.5. Hedging Transactions. 27
Section 5.6. Compliance with Laws. 27
Section 5.7. Project Implementation; Use of Project Funds. 27
Section 5.8. Repair of Roads. 28
Section 5.9. Taxes; Duties; Proper Legal Form. 28
Section 5.10. Performance of Obligations. 29
Section 5.11. Further Assurances. 29
Section 5.12. Deposit of Revenues and Funding of Accounts. 29
Section 5.13. Security of the Site. 30
Section 5.14. Environmental Compliance. 30
Section 5.15. Additional Sponsor Contributions. 30
Section 5.16. Equity Letters of Credit. 31
Section 5.17. Default under EPC Contract 31
Section 5.18. Spare Parts 31
Section 5.19. Panda of Nepal; Harza Engineering Company
International L.P. 31
ARTICLE 6.
NEGATIVE COVENANTS
Section 6.1. Liens. 31
Section 6.2. Consolidation, Merger, Sale of Assets, Etc. 31
Section 6.3. Dividends; Restricted Payments. 32
Section 6.4. Leases. 33
Section 6.5. Indebtedness. 33
Section 6.6. Contingent Obligations; Guarantees. 33
Section 6.7. Investments; Subsidiaries. 33
Section 6.8. Arm's-Length Transactions. 33
Section 6.9. Other Transactions. 33
Section 6.10. No Modifications. 34
Section 6.11. No Other Business. 36
Section 6.12. Abandonment. 36
Section 6.13. Improper Use. 36
Section 6.14. Expenditures. 36
Section 6.15. Approvals. 37
ARTICLE 7.
EVENTS OF DEFAULT
Section 7.1. Events of Default 37
Section 7.2. Acceleration on Default 44
Section 7.3. Right to Cure. 44
ARTICLE 8.
MISCELLANEOUS
Section 8.1. Payment of Fees and Expenses. 44
Section 8.2. Right of Setoff. 46
Section 8.3. Notices. 46
Section 8.4. Successors or Assigns. 48
Section 8.5. Remedies Cumulative. 48
Section 8.6. Severability. 48
Section 8.7. Documents. 48
Section 8.8. Calculations, Computations. 48
Section 8.9. Governing Law; Submission to Jurisdiction; Venue. 48
Section 8.10. Execution in Counterparts. 49
Section 8.11. Headings. 49
Section 8.12. Amendments. 49
Section 8.13. Survival. 49
SCHEDULE 3.1(c)
"IN-PRINCIPLE" COMMITMENT LETTERS 51
SCHEDULE 3.1(e)
TITLE TO THE SITE 60
SCHEDULE 3.1(f)(i)
MINIMUM INSURANCE REQUIREMENTS 61
SCHEDULE 3.1(i)
CERTIFICATE OF AUTHORIZED OFFICER
OF COMPANY, SPONSOR, O&M OPERATOR,
OR OWNER'S ENGINEER 71
SCHEDULE 3.1(i)
CERTIFICATE OF AUTHORIZED OFFICER
OF EPC CONTRACTOR 73
SCHEDULE 3.1(j)
CERTIFICATE OF INDEPENDENT ENGINEER 75
SCHEDULE 3.1(j)(ii)
DISBURSEMENT SCHEDULE 76
SCHEDULE 3.1(u)
CERTIFICATE OF THE COMPANY
REGARDING THE PROTECTION DEVICES
REQUIRED BY THE PPA 77
SCHEDULE 3.1(x)
CERTIFICATE OF AUTHORIZED OFFICER OF COMPANY
CONCERNING CONDITIONS PRECEDENT TO EACH
DISBURSEMENT 78
SCHEDULE 4.1(d)
GOVERNMENTAL OR OTHER APPROVALS 81
SCHEDULE 5.2(c)
CERTIFICATE OF AUTHORIZED OFFICER OF
COMPANY REGARDING AUTHORIZATION TO AUDITORS 84
SCHEDULE 6.10(e)
SUBSTANTIAL SUBCONTRACTORS AND SUBSTANTIAL VENDORS 86
ARTICLE 1.
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION;
GENERAL CONDITIONS AND SPECIAL CONDITIONS
Section 1.1. Special Conditions and General Conditions.
This document is entitled "Investment Agreement General
Conditions" (the "General Conditions"). It is appended to a
document entitled "IFC Special Conditions" between International
Finance Corporation ("IFC") and Bhote Koshi Power Company Private
Limited ("the Company") dated as of the date hereof (the General
Conditions and the IFC Special Conditions together constitute the
IFC Investment Agreement) and a document entitled "DEG Special
Conditions" between DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH ("DEG") and the Company dated as of
the date hereof (the General Conditions and the DEG Special
Conditions together constitute the DEG Investment Agreement).
The IFC Investment Agreement and the DEG Investment Agreement
together constitute the "Investment Agreement," dated as of the
date of the IFC Special Conditions and the DEG Special Conditions
(collectively, this "Agreement"). If any provision of the
General Conditions is inconsistent with a provision of the IFC
Special Conditions or the DEG Special Conditions, the provision
of the IFC Special Conditions or the DEG Special Conditions, as
the case may be, shall prevail.
Section 1.2. Definitions. For all purposes of this
Agreement, (a) capitalized terms not otherwise defined herein
shall have the meanings set forth in Schedule A hereto, and (b)
the principles of construction set forth in Schedule A shall
apply.
ARTICLE 2.
ROLE OF INDEPENDENT ENGINEER
Section 2.1. Independent Engineer. It is acknowledged and
agreed that, in each case where the approval of any matter by the
Independent Engineer is required hereunder, the Independent
Engineer shall be deemed to be acting on behalf of the Lenders.
ARTICLE 3.
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to Initial Disbursement.
The obligation of each of the Lenders to make an initial
Disbursement shall be subject to the fulfillment in all respects,
prior to or on the Financial Closing Date, demonstrated in a
manner, and otherwise in form and substance, satisfactory to each
of the Lenders of the conditions set forth below:
(a) Each of the following documents shall have been entered
into by the respective parties thereto, shall be unconditional,
except for the condition that the conditions precedent set forth
in this Section 3.1 have been satisfied, and fully effective in
accordance with its terms, and no party shall be in default
thereunder:
(i) this Agreement;
(ii) the Hedging Documents;
(iii) the Intercreditor Agreement;
(iv) Participation Agreements;
(v) the Security Documents (other than the NEA Letter
of Credit, the Panda Letter of Credit, the Panda Project
Completion Letter of Credit and the EPC Warranty Performance
Guarantee);
(vi) Joint Venture Agreement;
(vii) Subscription Agreements;
(viii) Share Retention and Project Funds Agreement;
(ix) PPA;
(x) Project Agreement;
(xi) EPC Contract;
(xii) Operations and Maintenance Agreement;
(xiii) Services Agreements;
(xiv) Project Licenses;
(xv) Real Estate Documents;
(xvi) Shareholders' Agreement;
(xvii) Independent Engineer's Agreement;
(xviii) Insurance Consultancy Services Agreement;
(xix) EPC Performance Guarantee;
(xx) Equity Letters of Credit;
(xxi) HSE Plan (for the construction period and an outline
for the operations phase of the Project);
(xxii) EMMP;
(xxiii) Resettlement Plan;
(xxiv) detailed outline of the Facility Procedures Manual;
(xxv) detailed outline of the scope of the Operations and
Maintenance Plan; and
(xxvi) all Government Approvals;
and each of the Lenders has received a true, complete and correct
copy, certified as such by an Authorized Officer of the Company,
of each of the foregoing Principal Documents, and any other
Principal Document existing on the Financial Closing Date.
(b) All of the conditions precedent under the Project
Agreement and PPA (other than the occurrence of the Loan Signing
Date referred to in Section 3.1 of the PPA) shall have been
satisfied or waived.
(c) "In-principle" commitment letters substantially in the
form of Schedule 3.1(c) hereto, shall have been obtained from a
bank acceptable to the Lenders for the establishment of the NEA
Letter of Credit.
(d) The EPC Performance Guarantee and the Equity Letters of
Credit shall have been issued by banks acceptable to the Lenders
and delivered to the Trustee.
(e) Each of the Lenders shall have received satisfactory
certified copies of certificates of title and leases evidencing
that the Company has acquired all necessary rights to the Site
(other than title to the portions of the Site listed on Part II
of Schedule 3.1(e) to the General Conditions) and all other
rights necessary to the construction of the Project (including,
without limitation, water and other items described in the
Project Agreement), and the original land ownership certificates
relating to portions of the Site shall have been received by the
Trustee. The Company shall have made any and all payments
required to be made by the Company to the lessors during the
entire term of the Leases.
(f) (i) The Company shall have obtained the insurance
coverages described in, and meeting the requirements of, Schedule
3.1(f)(i) to the General Conditions and shall have furnished to
each of the Lenders and the Insurance Consultant a certificate
from the Company's insurers or insurance brokers (including
confirmation of the payment of all premiums then due in respect
of insurance policies set forth in Schedule 3.1(f)(i) to the
General Conditions), indicating the properties insured, amounts
and risks covered, names of the beneficiaries, loss payees, and
additional insureds, expiration dates, names of the insurers, and
special features of the insurance policies in effect on the date
of such certificate. The Trustee shall have received original
binders (with copies received by the Insurance Consultant and
each of the Lenders) of the insurance policies set forth in
Schedule 3.1(f)(i) to the General Conditions, such binders to be
issued on behalf of companies acceptable to the Lenders.
(ii) The EPC Contractor shall have obtained the
insurance coverages described in, and meeting the requirements
of, Schedule 3.1(f)(i) to the General Conditions, and required to
be in effect on the Financial Closing Date, and shall have
furnished to each of the Lenders and the Insurance Consultant a
certificate from the EPC Contractor's insurers or insurance
brokers (including confirmation of the payment of all premiums
then due in respect of insurance policies set forth in Schedule
3.1(f)(i) to the General Conditions), indicating the properties
insured, amounts and risks covered, names of beneficiaries, loss
payees, and additional insureds, expiration dates, names of the
insurers, and special features of the insurance policies in
effect on the date of such certificate. The Trustee shall have
received original binders (with copies thereof received by the
Insurance Consultant and each of the Lenders) of the insurance
policies set forth in Schedule 3.1(f)(i) to the General
Conditions, such binders to be issued on behalf of companies
acceptable to the Lenders.
(iii) The Trustee and each of the Lenders shall
each have been named as an additional insured, loss payee,
assignee or beneficiary, as applicable, in respect of the
Company's and the EPC Contractor's insurance policies set forth
in Schedule 3.1(f)(i) to the General Conditions.
(iv) The Insurance Consultant shall have issued an
opinion with respect to the adequacy and effectiveness of the
insurance coverages set forth in Schedule 3.1(f)(i) to the
General Conditions, and with respect to such other matters as the
Lenders may request, including an opinion that the Company has
made adequate arrangements for insurance in accordance with the
requirements of all the Principal Documents to which the Company
is a party.
(g) The Security shall have been created and (except as
otherwise specifically approved in writing by the Lenders)
perfected, each of the Security Documents shall be effective and
shall constitute the valid, binding and enforceable obligations
of the Company or, in the case of the Pledged Shares, the
Sponsors (other than Panda Energy International, Inc. and Harza
Engineering Company International, a limited liability company),
and all expenses in respect thereof shall have been paid. The
share certificates in respect of the Pledged Shares theretofore
acquired by the Sponsors (other than Panda Energy International,
Inc. and Harza Engineering Company International, a limited
liability company), shall have been delivered to the Trustee
(marked by the Company to acknowledge the pledge thereof to the
Trustee for the benefit of the Lenders), together with executed
and undated stock powers.
(h) On or before the date of the first Disbursement of the
Loans the Sponsor Shareholders shall have subscribed and paid
into the Company all of the Sponsor Shareholders' equity then due
under the Financial Plan in accordance with Section 2.1 of their
respective Subscription Agreements and such equity shall have
been applied to pay Project Costs.
(i) (i) Each of the Lenders shall have received
a certificate, dated the Financial Closing Date,
signed by an Authorized Officer of the Company,
and attested to by the secretary of the Company,
substantially in the form of Schedule 3.1(i) to
the General Conditions, together with evidence
that the Company is a company duly registered
under the laws of Nepal, validly existing and in
good standing under the laws of Nepal. Copies of
the Charter Documents of the Company and the
resolutions of the Company referred to in such
certificate shall be attached to such certificate.
(ii) Each of the Lenders shall have received
a certificate, dated the Financial Closing Date,
signed by an Authorized Officer of each Sponsor
and attested to by the secretary of such Sponsor,
substantially in the form of Schedule 3.1(i) to
the General Conditions, together with evidence
that each such Sponsor is a duly constituted and
validly existing company in good standing under
the laws of its jurisdiction of organization, and
is duly authorized and qualified to conduct
business in Nepal to the extent required by law.
Copies of the Charter Documents of such Sponsor,
and the resolutions of such Sponsor pursuant to
which each such Sponsor is authorized to perform
its obligations under the Principal Documents to
which it is party shall be attached to the
certificate.
(iii) Each of the Lenders shall have
received a certificate, dated the Financial
Closing Date, signed by an Authorized Officer of
each of the EPC Contractor, the Owner's Engineer,
and the O&M Operator and attested to by the
secretary of each such entity, as applicable,
substantially in the form of Schedule 3.1(i) to
the General Conditions, together with evidence
that each of the EPC Contractor, the Owner's
Engineer, and the O&M Operator, respectively, is a
duly constituted and validly existing company in
good standing under the laws of its jurisdiction
of organization, and, with respect to the EPC
Contractor and the Owner's Engineer, is duly
authorized and qualified to conduct business in
Nepal. Copies of the Charter Documents of each of
the EPC Contractor, the Owner's Engineer, and the
O&M Operator and the resolutions of each such
Person pursuant to which each such Person is
authorized to perform its obligations under the
Principal Documents to which it is party shall be
attached to the certificate.
(j) (i) Arrangements shall have been made (A)
for the Company and the Project to comply with,
and for the implementation of, the EMMP, the
Resettlement Plan, and the HSE Plan for the
construction period, and (B) for the Company and
the Project to comply with all applicable Nepalese
environmental laws, statutes, rules and
regulations and all other Environmental Laws.
(ii) Each of the Lenders shall have received
a certificate of the Independent Engineer,
substantially in the form of Schedule 3.1(j) to
the General Conditions, stating that it has (x)
reviewed and found acceptable the Disbursement
Schedule attached to the General Conditions as
Schedule 3.1(j)(ii), and (y) reviewed and found
reasonable and acceptable the HSE Plan for the
construction period, and (z) reviewed and found
reasonable and acceptable the outline of the HSE
Plan for the operations phase of the Project, the
detailed outline of the Facility Procedures
Manual, the outline of the Operations and
Maintenance Plan and the matters referred to in
Section 3.1(j)(i) above.
(k) (i) The Company shall have received
satisfactory confirmation from the relevant
Governmental Authority that the Company has the
authority to establish U.S. Dollar bank accounts
within and outside of Nepal and concessions with
respect to import duties on plant and equipment
imported in the name of the Company such that the
amount thereof does not exceed 1% of the value of
such plant and equipment and from income Taxes
(for a period of 15 years from the first Unit
Delivery Date (as defined in the PPA)) and stamp
taxes, and repatriation and remittance rights of
the IFC Subscription and the Loans.
(ii) The Company has obtained, or made
arrangements satisfactory to the Lenders for
obtaining, all Governmental Approvals for:
(A) the Loans and IFC
Subscription;
(B) the carrying on of the
business of the Company as it is contemplated
to be carried on;
(C) the carrying out of the
Project and the implementation of the
Financing Plan;
(D) the due execution, delivery,
validity and enforceability of, and
performance under, this Agreement and each
other Principal Document; and
(E) the remittance to each of the
Lenders or its assigns in US Dollars or
Deutsche Marks, as the case may be, of all
monies payable in respect of the Principal
Documents and the IFC Shares;
and has provided each of the Lenders with copies
of those Governmental Approvals, certified as true,
complete and correct copies by an Authorized Officer of
the Company, if the Lenders so require;
(l) The Company shall have (i) appointed Auditors approved
by the Lenders and each of the Lenders shall have received a copy
of the authorization to such Auditors pursuant to Section 5.2(c)
of the General Conditions, and (ii) the Company shall have
established an accounting, cost control and management
information system (in accordance with U.S. GAAP).
(m) Each of the Lenders shall have received (i) the
Financial Statements for the most recent Quarter and Fiscal Year
of the Company, and (ii) the Financial Statements for the most
recent Quarter and Fiscal Year of the EPC Contractor, the O&M
Operator, the Owner's Engineer and each Sponsor (other than Panda
of Nepal, RDC of Nepal, Panda Bhote Koshi, Harza Engineering
Company International, a limited liability company and Resource
Development Consultants, a limited liability company).
(n) NEA shall have delivered a letter, satisfactory in form
and substance to the Lenders and the Independent Engineer,
regarding the installation of the NEA Interconnection Facilities.
(o) Each of the Company, each Sponsor, the EPC Contractor,
the O&M Operator and the Owner's Engineer shall have appointed,
with respect to each of the Principal Documents (other than Non-
Material Agreements) to which it is party, an agent for service
of process in the State of New York, and such other jurisdictions
as may be required by the Lenders, as such Person's agent to
receive service of process, and each of the Lenders shall have
received satisfactory letters from such process agents indicating
its consent to each such appointment without reservation until
six months after all Obligations have been indefeasibly paid in
full.
(p) Each of the Lenders shall have received at no expense
to the Lenders the following legal opinions, in form and
substance satisfactory to the Lenders:
(i) an opinion of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP,
New York counsel to the Company and the Sponsors;
(ii) an opinion of Panth, Panth & ▇▇▇▇▇▇,
Nepalese counsel to the Company and the Sponsors
(other than Himal International Power Corporation
Pvt. Ltd., Soaltee Hotel Ltd., Soaltee Enterprises
Private Ltd. and Surya Enterprises Private Ltd.);
(iii) an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇, Texas
counsel to Panda Energy International, Inc.;
(iv) an opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, in-
house counsel to Harza Engineering Company
International L.P.;
(v) an opinion of Holland & ▇▇▇▇, L.L.P.,
Wyoming counsel, and an opinion of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, in-house counsel to Harza Engineering
Company International, a limited liability
company;
(vi) an opinion of Beijing Xie Zhao Hua Law
Firm, Chinese counsel to the EPC Contractor;
(vii) an opinion of the Ministry of Law
and Justice, His Majesty's Government of Nepal;
(viii) an opinion of Morris, Nichols,
Arsht & Tunnells, Delaware counsel to the Company
and to Harza Engineering Company International
L.P.;
(ix) an opinion of the Legal Counsel of NEA,
counsel to NEA;
(x) an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger
P.A., counsel to the Trustee;
(xi) an opinion of ▇▇▇▇▇▇▇ & Company, counsel
to the Company, Himal International Power
Corporation Pvt. Ltd., Soaltee Hotel Ltd., Soaltee
Enterprises Private Ltd. and Surya Enterprises
Private Ltd.;
(xii) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in-
house counsel to the Agent;
(xiii) an opinion of Pioneer Law
Associates, Nepalese counsel to the Lenders;
(xiv) an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
Singapore counsel to the Lenders;
(xv) an opinion of ▇▇▇▇▇▇ & Calder, Cayman
Islands counsel to Panda of Nepal;
(xvi) an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Cayman Islands counsel to RDC of Nepal;
(xvii) an opinion of ▇▇▇▇▇▇ & Calder,
Cayman Islands counsel to Panda Bhote Koshi;
(xviii) an opinion of Read & ▇▇▇▇▇▇▇, New
York counsel to Harza Engineering Company
International L.P.; and
(xix) an opinion of Holland & ▇▇▇▇,
L.L.P., Wyoming counsel, and an opinion of ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, in-house counsel to Resource
Development Consultants, a limited liability
company.
(q) The Company shall have delivered to each of the Lenders
a Letter of Information providing a detailed description of the
Company, the Project, the Sponsors, the Financing Plan, the award
of the Project by HMGN to the Sponsors and any specific
concessions related to the award, actions taken or to be taken by
the Company and the Sponsors regarding the environmental and
socio-economic impact of the Project and such other matters as
the Lenders may request.
(r) Each of the contracts to which the Company is a party
shall contain environmental mitigation clauses that ensure
compliance with the EMMP, if applicable to such contract.
(s) The Lenders shall have approved the Company's detailed
breakdown of Project Costs and the Base Case Financial
Projections for the Project.
(t) The Lenders shall have received a favorable Independent
Engineer's Report addressing, among other things, Project design,
Project performance, Project Costs, Construction Schedule, Annual
Budgets for the construction period, and the technical and
economic feasibility of the Project.
(u) The Company shall have delivered to each of the Lenders
a certificate signed by an Authorized Officer of the Company,
substantially in the form of Schedule 3.1(u) to the General
Conditions, certifying that the protection devices required under
Section 7.4 of the PPA have been approved by NEA in accordance
with such Section.
(v) The Company shall have delivered written instructions
to the EPC Contractor to the effect that the Company shall manage
and administer all insurance policies set forth in Article 9 of
the EPC Contract (other than those insurances required of the EPC
Contractor under Article 9.2 of the EPC Contract) and including
the filing of all claims and the taking of all necessary or
appropriate actions to collect any proceeds on behalf of the
relevant insured party.
(w) The Company shall have delivered to the Trustee and to
each of the Lenders the insurance certificates or other evidence
required pursuant to Section 5.3(c) of the General Conditions
that the insurances are maintained in accordance with Schedule
3.1(f)(i) to the General Conditions.
(x) Each of the Lenders shall have received a certificate
of the Company substantially in the form of Schedule 3.1(x) to
the General Conditions, signed by an Authorized Officer of the
Company, stating that all of the foregoing conditions have been
satisfied.
(y) IFC shall have entered into Participation Agreements
with Participants for the acquisition by them of Participations
in an aggregate amount equal to the full amount of the B Loan and
those commitments are in full force and effect.
(z) The Company shall have delivered to each of the Lenders
the Panda Bhote Koshi Documents.
(aa) The Company shall have delivered to each of the Lenders
a clarification letter from the NEA in form and substance
satisfactory to the Lenders with respect to the applicability of
Section 9.5 of the PPA to the DEG Loan.
Section 3.2. Conditions Precedent to Certain
Disbursements.
(a) The obligation of each of the Lenders to make its first
Disbursement following Disbursements aggregating 50% of the
aggregate Commitments shall be subject to fulfillment, prior to
or concurrently with such Disbursement, in a manner satisfactory
to the Lenders, of the condition that NEA shall have made all
necessary arrangements (in each case satisfactory in form and
substance to the Lenders) for installation of the NEA
Interconnection Facilities.
(b) The obligations of each of the Lenders to make the
second Disbursement shall be subject to the Company obtaining all
Governmental Approvals, if any, which may be required for the
Hedging Transactions contemplated to be entered into under the
Hedging Documents.
Section 3.3. Conditions Precedent to All Disbursements On
or After May 31, 1998. The obligations of each of the Lenders to
make any Disbursement on or after May 31, 1998 shall be subject
to each of the Lenders receiving evidence in form and substance
satisfactory to the Lenders that the Company has established and
implemented a GLOF early warning system which is satisfactory to
the Lenders.
Section 3.4. Conditions Precedent to Disbursements On or
After the Date Which is 180 Days Prior to the Scheduled First
Unit Delivery Date for the First Unit and to Disbursements On or
After the First Unit Delivery Date.
(a) The obligation of each of the Lenders to make any
Disbursement on or after the date which is 180 days prior to the
Scheduled First Unit Delivery Date for the First Unit shall be
subject to fulfillment, prior to or concurrently with such
Disbursement, of the condition that each of the Lenders shall
have received a certificate, signed by an Authorized Officer of
the O&M Operator and attested to by the secretary of such entity,
substantially in the form of Schedule 3.1(i) to the General
Conditions, together with evidence that the O&M Operator is duly
authorized and qualified to conduct business in Nepal.
(b) The obligation of each of the Lenders to make any
Disbursement on or after the First Unit Delivery Date shall be
subject to fulfillment, prior to or concurrently with such
Disbursement, of the condition that the NEA Letter of Credit, in
form and substance satisfactory to the Lenders, shall have been
issued by a bank acceptable to the Lenders and delivered to the
Trustee, and a true, complete and correct copy thereof, certified
as such by an Authorized Officer of the Company, shall have been
delivered to each of the Lenders.
Section 3.5. Conditions Precedent to All Disbursements.
The obligation of each of the Lenders to make any Disbursement
shall be subject to the fulfillment, prior to or concurrently
with each such Disbursement, demonstrated in a manner, and
otherwise in all respects in form and substance, satisfactory to
the Lenders, of the conditions set forth below:
(a) The Company and each of the Sponsors shall have
performed in all material respects all of its obligations
theretofore to be performed under this Agreement and the other
Principal Documents to which it is a party.
(b) Each of the Lenders shall have received quarterly
written progress reports in form and substance satisfactory to
the Lenders from the Independent Engineer.
(c) The proceeds of the Disbursement shall be needed by the
Company to pay Project Costs.
(d) Immediately before and after giving effect to such
Disbursement:
(i) there shall be no existing Default or
Event of Default which has not been cured or
waived; and
(ii) all representations and warranties
contained herein and in the other Principal
Documents shall be true and correct in all
material respects with the same effect as though
such representations and warranties had been made
on and as of the date of such Disbursement, except
where expressed to be made on a specified date.
(e) The Security Documents shall create a first priority
(except as otherwise specifically approved in writing by the
Lenders) security interest and charge over the Collateral in
existence at the date of such Disbursement, and each of the
Lenders shall have received satisfactory evidence that all
actions necessary or appropriate to perfect (except as otherwise
specifically approved in writing by the Lenders) and protect the
security interests purported to be created by the Security
Documents have been taken.
(f) All Governmental Approvals and each relevant
shareholder's and creditor's permit, license and consent,
including, without limitation, all Repatriation and Remittance
Approvals, necessary for the then-current stage of implementation
of the Project shall have been obtained or made, shall be validly
issued, shall be in full force and effect and shall not be the
object of a currently pending action or appeal.
(g) No Material Adverse Change shall have occurred, and no
Force Majeure Event shall have occurred, and the effect of either
of which has not been cured.
(h) Each of the Lenders shall have received, at least ten
(10) Business Days prior to the date of any Disbursement, an IFC
Disbursement Request or DEG Disbursement Request, as the case may
be, signed by an Authorized Officer of the Company, together with
a certificate of the Independent Engineer which shall confirm
that (A) the work scheduled to be completed by the relevant dates
has been completed in a manner satisfactory to the Independent
Engineer, and (B) the expenditures reflected in the disbursement
request (which shall be set forth in a certificate of the Company
attached to the disbursement request) have been properly incurred
under the EPC Contract and the Services Agreements or are
scheduled to be properly incurred as anticipated on the
construction schedule.
(i) All funds required to be paid or advanced by the
Sponsors under the Subscription Agreements or the Share Retention
and Project Funds Agreement prior to the Disbursement shall have
been paid or advanced and applied in accordance with the Trust
and Retention Agreement, and each of the Lenders shall have
received evidence thereof, satisfactory in form and substance to
the Lenders.
(j) The Company shall have paid all fees, expenses and
other charges then payable by it under the Loan Documents,
including, without limitation, fees, expenses and other charges
of each of the Lenders' legal counsel, the Independent Engineer,
the Insurance Consultant, and, with the prior consultation of the
Company, other consultants.
(k) The Company shall have the corporate authority to
borrow the amount requested to be disbursed.
(l) After giving effect to the Disbursement the Company
shall not be in violation of its Articles of Association or
Memorandum of Association, any provision contained in any
agreement to which the Company is a party (including this
Agreement) or by which the Company is bound, or any law, rule,
regulation or Governmental Approval directly or indirectly
limiting or otherwise restricting the Company's borrowing power
or authority or its ability to borrow.
(m) All corporate and legal proceedings necessary to
authorize the borrowing and the other transactions contemplated
in this Agreement shall have been obtained or made.
(n) Each of the Lenders shall have received satisfactory
certificates of land ownership and copies of all Leases
evidencing that the Company has acquired all necessary rights for
each portion of the Site, each portion of the Site and each Lease
being listed in Schedule 3.1(e) hereto; provided, however, that
title to those portions of the Site listed in Part II of such
Schedule 3.1(e) are not required to be obtained by the Financial
Closing Date but must be obtained by no later than the date
specified on Part II of Schedule 3.1(e).
(o) All fees, charges, Taxes, or expenses in respect of the
Security Documents shall have been indefeasibly paid in full.
(p) Each of the Security Documents shall have been duly
filed and registered or recorded in every jurisdiction in which
such filing and registration or recording is necessary to make
valid, effective, and enforceable the Liens intended to be
created thereby, and the rights of the Trustee and the Lenders
thereunder. Each of the Lenders and the Trustee shall have
received evidence that such filing and registration or recording
has been made and that all fees and expenses required in
connection with such registration or recording have been paid.
(q) The Company shall have delivered to the Trustee and
each of the Lenders a certification, substantially in the form of
Schedule 3.1(x) of the General Conditions, signed by an
Authorized Officer of the Company and expressed to be effective
as of the date of the relevant Disbursement, certifying that all
the foregoing conditions to Disbursement have been satisfied, and
stating that the receipt of the Disbursement will not result in
the violation of any agreement, instrument, note or contract to
which the Company is a party or by which it is bound or of any
law, statute, ordinance, rule, regulation or judgment to which it
is subject, or any Governmental Approval relating to the Company
or the Project.
(r) Each Lender is satisfied that the other Lender is
prepared to make its Disbursement.
Section 3.6. No Waiver, Etc. No course of dealing or
waiver by either of the Lenders or the Trustee (other than a
written waiver signed by each of the Lenders and only with
respect to the particular matter stated therein) in connection
with any condition of Disbursement under this Agreement or any
Loan Document shall impair any right, power or remedy of the
Trustee or the Lenders with respect to any condition of
Disbursement, or be construed to be a waiver thereof, nor shall
the action of any Lender in respect of any Disbursement affect or
impair any right, power or remedy of the Trustee or any other
Lender in respect of the same or any other Disbursement. One or
both of the Lenders, acting together or independently, may
exercise any or all rights and remedies available at law or in
equity under this Agreement or under any Loan Document without
prejudice to the rights and remedies of or on behalf of the other
Lender. Notwithstanding anything which may be contained herein
to the contrary, any approval, consent, waiver or similar action
which is required, or which may be given in connection with this
Agreement by the Lenders must, in order to be effective and
binding on all the Lenders, be given in writing by all of the
Lenders. Any policies or other information required to be given
under or in connection with this Agreement to the Lenders must be
given to all of the Lenders. The right of the Trustee or the
Lenders to require compliance with any condition under this
Agreement which may be waived by the Lenders in respect of any
Disbursement is expressly preserved for the purposes of any
subsequent Disbursement, unless such condition shall have been
permanently waived in writing by the Lenders. All the
certificates, legal opinions, bylaws or articles of association,
articles of incorporation and other documents and papers referred
to in this Article 3, unless otherwise specified, shall be
delivered to the Trustee and each of the Lenders at their
addresses specified in Section 8.3 of the General Conditions, or
at such other office as any of them may hereafter designate in
writing to the other parties hereto, in sufficient counterparts
for the Trustee and the Lenders, and shall be satisfactory in
form and substance to the Lenders.
ARTICLE 4.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 4.1. Company Representations and Warranties. In
order to induce each of the Lenders to enter into this Agreement
and the other Loan Documents to which it is a party and to make
the Loans, the Company makes the following representations,
warranties and agreements:
(a) Corporate Status. The Company (i) is a private limited
liability company duly incorporated and registered under the
Company Act of Nepal 2021, validly existing and in good standing
under the laws of Nepal and (ii) has the power and authority to
own its property and assets and to transact the business in which
it is engaged or proposes to be engaged and to do all things
necessary or appropriate in respect of the Project and to
consummate the transactions contemplated by the Principal
Documents.
(b) Corporate Power and Authority. The Company has the
corporate power to execute, deliver and perform the terms and
provisions of each of the Principal Documents to which it is a
party and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of such
Principal Documents. The Company has duly executed and delivered
each of the Principal Documents to which it is a party, and each
such Principal Document constitutes its legal, valid and binding
obligation enforceable in accordance with its terms.
(c) No Violation. Neither the execution and delivery by
the Company of the Principal Documents to which it is a party,
nor the Company's compliance with or performance of the terms and
provisions thereof, nor the use of the proceeds of the Loans as
contemplated by this Agreement and the other Loan Documents
(i) will contravene any provision of any applicable law, statute,
rule or regulation or any order, writ, injunction or decree of
any court or governmental instrumentality or any Governmental
Approval relating to the Company or the Project, including,
without limitation, any Remittance and Repatriation Approval,
(ii) conflicts or is inconsistent with or results in any breach
of any of the terms, covenants, conditions or provisions of, or
constitutes a default under, or results in the creation or
imposition of (or the obligation to create or impose) any Lien
(except Permitted Liens) upon any of the property or assets of
the Company pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement, Loan Document, Principal
Document or any other material agreement, contract or instrument
to which the Company is a party or by which it or any of its
property or assets is bound or to which it may be subject or
(iii) violates any provision of the Memorandum of Association or
Articles of Association of the Company.
(d) Governmental or Other Approvals. No Governmental
Approval nor any relevant shareholder's or creditor's permit,
license or consent, except those which are listed in
Schedule 4.1(d) to the General Conditions, is required to
authorize, or is required in connection with (i) the execution,
delivery or performance of any Principal Document to which the
Company is a party or (ii) the legality, validity, binding effect
or enforceability of any such Principal Document. All such
Governmental Approvals and relevant shareholders' and creditor's
permits, licenses and consents, including, without limitation,
all Remittance and Repatriation Approvals, obtained or to be
obtained or made are set forth in Schedule 4.1(d) to the General
Conditions and each such Governmental Approval and relevant
shareholders' and creditor's permit, license or consent is not
the object of a currently pending action or appeal.
(e) Financial Statements.
(i) The statements of financial condition of
the Company at September 30, 1997 heretofore
furnished to the Lenders present fairly the
financial condition of the Company at the date of
such statements of financial condition and the
results of the operations of the Company for the
Fiscal Year then ended. Such financial statements
have been prepared in accordance with U.S. GAAP.
Since September 30, 1997, no event, condition or
circumstance has existed or has occurred which
would be reasonably likely to constitute a
Material Adverse Change.
(ii) Except as fully reflected in the
financial statements delivered pursuant to
Section 4.1(e)(i) hereof, there are no liabilities
or obligations with respect to the Company of any
nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due)
for the period to which such financial statements
relate which, either individually or in the
aggregate, would be material to the Company. The
Company does not know of any reasonable basis for
the assertion against the Company of any material
liability or obligation of any nature whatsoever
for such relevant period that is not fully
reflected in the financial statements delivered
pursuant to Section 4.1(e)(i) hereof which, either
individually or in the aggregate, could constitute
a Material Adverse Change.
(f) Litigation. There are no actions, suits or proceedings
pending, or, to the best knowledge of the Company, threatened (i)
to the Company's best knowledge after due inquiry, with respect
to any Sponsor, the EPC Contractor, the O&M Operator or the
Owner's Engineer which could be material to the Company or the
Project, or (ii) with respect to the Company or the Project.
(g) True and Complete Disclosure.
(i) All information (taken as a whole)
furnished by or on behalf of the Company, the
Sponsors, the O&M Operator or the Owner's Engineer
in writing to the Lenders is true and accurate in
all material respects on the date hereof and does
not contain any untrue statement of a material
fact or omit any material fact necessary in order
to make such information (taken as a whole) not
misleading in any material respect.
(ii) To the Company's knowledge after due
inquiry, all information (taken as a whole)
furnished by or on behalf of the EPC Contractor in
writing to the Lenders is true and accurate in all
material respects on the date hereof and does not
contain any untrue statement of a material fact or
omit any material fact necessary in order to make
such information (taken as a whole) not misleading
in any material respect.
(iii) Without limiting the foregoing
clauses (g)(i) and (g)(ii), the Financing Plan set
forth in Schedule 2.2(a) of each of the IFC
Special Conditions and the DEG Special Conditions
and the statement of Project Costs set forth in
Schedule 2.2(b) of each of the IFC Special
Conditions and the DEG Special Conditions are true
and accurate in all material respects on the date
hereof and do not omit any fact necessary to make
the same not misleading in any material respect.
There are in existence no documents or agreements
which have not been disclosed to the Lenders the
performance or non-performance of which would
result in a Material Adverse Change or which could
reasonably be expected to have the effect of
varying any of the Principal Documents (other than
Non-Material Agreements).
(h) Tax Returns and Payments. The Company has filed all
Tax returns required by law to be filed by it and has paid or
caused to be paid all income Taxes payable by it which have
become due and payable pursuant to such Tax returns and all other
Taxes payable by it which have become due, other than those not
yet delinquent and except for those contested in good faith and
for which adequate reserves have been established.
(i) Capitalization. As of the date of this Agreement the
authorized share capital of the Company consists of
Rs. 5,414,500,000, divided into 54,145,000 shares, Rs. 100 par
value per share.
(j) Subsidiaries; Investments. The Company has no
subsidiaries, owns no equity interest in any other Person and is
not a party to any agreement to purchase or acquire any stock,
obligations or securities of or any other interest in, or make
any capital contribution to, any other Person. The Company has
no investments other than Permitted Investments.
(k) Compliance with Laws.
(i) The Company is in compliance with all
applicable laws, statutes, regulations,
authorizations and orders of, and all applicable
restrictions imposed by, all Governmental
Authorities in respect of the conduct of its
business and the ownership of its property
(including all Environmental Laws) and all
Governmental Approvals relating to the Company or
the Project, including, without limitation, all
Remittance and Repatriation Approvals.
(ii) Without limitation to the foregoing
clause (i), the Company's business and the Project
are being carried out in compliance with the EMMP.
(l) Patents, Licenses, Franchises and Formulas. The
Company owns or has the right to use all the patents, trademarks,
permits, service marks, trade names, copyrights, licenses,
franchises and formulae, or rights with respect thereto, and has
obtained assignments of all leases and other rights of whatever
nature, necessary for the present and proposed conduct of its
business and the carrying out of the Project, without any known
conflict with the rights of others which, or the failure to
obtain which, as the case may be, would constitute a Material
Adverse Change.
(m) Governing Law and Submission to Jurisdiction. The
choice of governing law for each of the respective Principal
Documents will be recognized in the courts of Nepal.
(n) Indebtedness. The Obligations constitute direct,
unconditional, and general obligations of the Company and are
superior in priority of payment to all other Indebtedness of the
Company. The Company has no Indebtedness other than Permitted
Indebtedness and the Company has not secured or agreed to secure
any Indebtedness (other than the Obligations) by any Lien (other
than a Permitted Lien) upon any of its present or future revenues
or assets or capital stock.
(o) Fees and Enforcement. Other than amounts that have
been paid in full, no fees or Taxes, including without limitation
stamp, transaction, registration or similar Taxes, are required
to be paid for the legality, validity or enforceability of this
Agreement or any of the Principal Documents. This Agreement and
the other Principal Documents (other than Non-Material
Agreements) are each in proper legal form under the laws of
Nepal, and under the respective governing law selected in each
such Principal Document, for the enforcement thereof in such
jurisdiction without any further action on the part of the
Trustee or any of the Lenders.
(p) Availability and Transfer of Foreign Currency. All
Remittance and Repatriation Approvals have been validly obtained
and are in full force and effect, to the extent required to
assure the availability of U.S. Dollars to enable the Company to
perform all of its obligations under this Agreement or any of the
other Principal Documents, in accordance with their respective
terms.
(q) Title and Rights to Property. The Company has obtained
(or will obtain prior to the Financial Closing Date), or, with
respect to portions of the Site listed in Part II of Schedule
3.1(e) to the General Conditions, will obtain on or before the
date specified on Part II of Schedule 3.1(e), all necessary
rights to the Site and other rights necessary to the
construction, use and operation of the Project. The Company has,
or when obtained will have, good title to all portions of the
Site other than portions which have been leased by the Company,
free and clear of Liens other than the Liens created under the
Security Documents and Permitted Liens. Each of the Leases is in
full force and effect. The Company represents and warrants that
the portions of the Site listed on Part I of Schedule 3.1(e) to
the General Conditions constitute the only real property which is
required for the construction, use and operation of the Project
and that the failure to have title or other rights to or in those
portions of the Site listed on Part II of Schedule 3.1(e) will
not result in any interruption of construction of the Project or
interference with the use or operation of the Project.
(r) Labor. There are no strikes, slowdowns, or work
stoppages by the employees of the Company, any Sponsor, the EPC
Contractor, the Owner's Engineer, the O&M Operator, or any other
Person on-going, or threatened, which have caused or could be
expected to cause a Material Adverse Change.
(s) Liens and Indebtedness. The Security Documents create
in favor of the Lenders and/or the Trustee legal, valid, and
enforceable first priority Liens (except as otherwise
specifically approved in writing by the Lenders) on all of the
Collateral, are in full force and effect and enforceable against
the Company, the Sponsors, any subsequent holder of a Lien
(including a judgment lienor), any third party, any holder of a
fixed or floating charge, or any transferee for or not for value,
in bulk, by operation of law, for the benefit of creditors, or
otherwise. Prior to the Financial Closing Date, all fees,
charges, Taxes or expenses in respect of the Security Documents
will have been paid in full. Each of the Security Documents has
been duly executed, become effective, and constitutes the valid,
binding and enforceable obligations of the Company, and, in the
case of the Pledged Shares, of the Sponsors (other than Panda
Energy International, Inc. and Harza Engineering Company
International, a limited liability company). Each of the
Security Documents has been duly filed and registered and
recorded in every jurisdiction in which such filing and
registration or recording is necessary to make valid and
effective the Liens created thereby, and the rights of the
Lenders thereunder.
(t) Environmental Matters. The Company has duly complied
with, and the Project is in compliance with, the provisions of
the HMGN License, the HSE Plan, the EMMP, the Resettlement Plan,
and all Environmental Laws, health and safety laws, codes and
ordinances, and all rules and regulations promulgated thereunder.
(u) Regulatory Matters.
(i) The Company is a "foreign utility
company" under Section 33 of PUHCA and, as such,
is not considered to be an "electric utility
company" or a "public utility company" under PUHCA
and is exempt from all provisions of PUHCA except
as otherwise provided under Section 33 of PUHCA
with respect to certain reporting requirements
under PUHCA. The Company does not sell or
transmit electric power in the United States,
including the District of Columbia, or any
organized territory of the United States, nor is
it subject to regulation as a "public utility," an
"electric utility," or an entity primarily engaged
in the generation or sale of electric power under
the FPA. As such, none of the Company's
Affiliates (as such term is defined in PUHCA) nor
DEG and IFC (and their participants, if any) is or
will be, solely as a result of the participation
by such parties individually or as a group in the
ownership of the Company and the Company's use or
operation of the Project and sale of power
generated by the Project, subject to regulation as
a "public utility company," an "electric utility
company," or a Subsidiary or Affiliate (as such
terms are defined in PUHCA) of any of the
foregoing, under PUHCA, nor as a "public utility,"
an "electric utility," or an entity primarily
engaged in the generation or sale of electric
power under FPA.
(ii) So long as the Company is a "foreign
utility company" under Section 33 of PUHCA and no
electric power from the Project is sold or
transmitted in the United States, including the
District of Columbia, or any organized territory
of the United States, the Lenders (and their
participants, if any) shall not, solely by reason
of their ownership or operation of the Project
upon the exercise of remedies under the Security
Documents, be subject to regulation as a "public
utility company," an "electric utility company,"
or a "holding company," or a Subsidiary or
Affiliate (as such terms are defined in PUHCA) of
any of the foregoing, under PUHCA, nor as a
"public utility," an "electric utility" or an
entity primarily engaged in the generation or sale
of electric power under the FPA.
(v) Insurance.
(i) The Company has obtained the insurance
coverages described in, and meeting the
requirements of, Schedule 3.1(f)(i) to the General
Conditions and has furnished to each of the
Lenders and the Insurance Consultant a certificate
from the Company's insurers or insurance brokers
(including confirmation of the payment of all
premiums then due in respect of insurance policies
set forth in Schedule 3.1(f)(i) to the General
Conditions), indicating the properties insured,
amounts and risks covered, names of the
beneficiaries, loss payees, and additional
insureds, expiration dates, names of the insurers,
and special features of the insurance policies in
effect on the date of such certificate. The
Trustee has received original binders (with copies
received by the Insurance Consultant and each of
the Lenders) of the insurance policies set forth
in Schedule 3.1(f)(i) to the General Conditions,
such binders issued on behalf of companies
acceptable to the Lenders (and such companies are
authorized agencies, such as Lloyds or LIRMA).
(ii) The EPC Contractor has obtained the
insurance coverages described in, and meeting the
requirements of, Schedule 3.1(f)(i) to the General
Conditions, and required to be in effect on the
Financial Closing Date, and has furnished to each
of the Lenders a certificate from the EPC
Contractor's insurers or insurance brokers
(including confirmation of the payment of all
premiums then due in respect of insurance policies
set forth in Schedule 3.1(f)(i) to the General
Conditions), indicating the properties insured,
amounts, and risks covered, names of
beneficiaries, loss payees, and additional
insureds, expiration dates, names of the insurers,
and special features of the insurance policies in
effect on the date of such certificate. The
Trustee has received original binders (with copies
thereof received by each of the Lenders) of the
insurance policies set forth in Schedule 3.1(f)(i)
to the General Conditions, such binders issued on
behalf of companies acceptable to the Lenders.
(iii) The Trustee and each of the Lenders
have been named as an additional insured, loss
payee, assignee or beneficiary, as applicable, in
respect of the Company's and the EPC Contractor's
insurance policies set forth in Schedule 3.1(f)(i)
to the General Conditions.
(iv) The Insurance Consultant has issued an
opinion with respect to the adequacy and
effectiveness of the insurance coverages set forth
in Schedule 3.1(f)(i) to the General Conditions,
and with respect to such other matters as the
Lenders have reasonably requested, including an
opinion that the Company has made adequate
arrangements for insurance in accordance with the
requirements of all the Project Documents to which
the Company is a party.
Section 4.2. Lenders' Reliance. The Company acknowledges
that it makes the representations in this Agreement with the
intention of persuading each of the Lenders to enter into this
Agreement (and the Participants to enter into the Participation
Agreements) and the other agreements referred to herein and make
the Loans and the subscription and disbursement under the IFC
Subscription, and that the Lenders enter into this Agreement (and
the Participants will enter into the Participation Agreements)
and such other agreements on the basis of, and in full reliance
on, each of such representations. The Company warrants to each
of the Lenders (for itself and for the benefit of the
Participants) that each of such representations is true and
correct as of the date of this Agreement and that none of them
omits any matter necessary to make such representation not
misleading in any material respect. The rights and remedies of
the Lenders in relation to any misrepresentations or breach of
warranty on the part of the Company shall not be prejudiced by
any investigation by or on behalf of the Lenders (or the
Participants) into the affairs of the Company, by the execution,
delivery or performance of this Agreement (or the Participation
Agreements) or any other Principal Document or by any other act
or thing which may be done by or on behalf of the Lenders in
connection with this Agreement (or the Participation Agreements)
or any other Loan Document and which might, apart from this
Section, prejudice such rights or remedies.
ARTICLE 5.
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, until all of the
Obligations are paid in full and the obligations of the Lenders
under the Loan Documents have terminated, and unless otherwise
permanently waived in writing by the Lenders:
Section 5.1. Information Covenants. The Company shall
furnish to each of the Lenders, the Trustee and, prior to the
Project Completion Date, the Independent Engineer:
(a) As soon as available but, in any event within forty-
five (45) days after the close of each quarterly accounting
period in each Fiscal Year,
(i) two copies of complete unaudited
statements of financial condition of the Company
as at the end of such quarterly period, with a no
default certification signed by an Authorized
Officer of the Company, and with related
statements of income and retained earnings and
statements of changes in cash flow for such
quarterly period and for the elapsed portion of
the Fiscal Year ending on the last day of such
quarterly period, in each case setting forth
comparative figures for the related periods in the
prior Fiscal Year, all of which shall be in
agreement with the Company's books of account,
subject to normal year-end audit adjustments, and
certified by an Authorized Officer of the Company;
(ii) a report on any event or condition which
constitutes or is reasonably likely to constitute
a Material Adverse Change; and
(iii) a statement of all financial
transactions in such quarterly period between the
Company and any Affiliate of the Company,
including a certification that such transactions
were on ordinary commercial terms negotiated on an
arms-length basis.
(b) As soon as available but, in any event, within one
hundred twenty (120) days after the close of each Fiscal Year,
two copies of the following, all in form satisfactory to the
Lenders:
(i) statements of financial condition of the
Company, approved by the Board of Directors of the
Company, as at the end of such Fiscal Year with
the related statements of income and retained
earnings, statements of changes in cash flow for
such Fiscal Year, in each case with supporting
schedules and setting forth comparative figures
for such Fiscal Year and certified by the Auditors
and Deloitte & Touche (all such statements being
in agreement with the Company's books of account
and prepared in accordance with U.S. GAAP
consistently applied);
(ii) the Auditor's and Deloitte &
Touche's statements setting forth all transactions
of the Company with Affiliates for such Fiscal
Year, other than (A) any transaction under a
Principal Document or (B) any transaction having a
price or value less than fifty thousand Dollars
($50,000) or (C) any series of transactions having
an aggregate price or value of less than three
hundred thousand Dollars ($300,000); and
(iii) a report of the Auditors and
Deloitte & Touche stating that in the course of
its regular audit of the financial statements of
the Company, which audit was conducted in
accordance with U.S. GAAP, the Auditors and
Deloitte & Touche obtained no knowledge of any
Default or Event of Default which has occurred and
is continuing or, if in the opinion of the
Auditors and Deloitte & Touche such a Default or
Event of Default has occurred and is continuing, a
statement as to the nature thereof, and a copy of
any "management letter" or other similar
communication received by the Company from the
Auditors and Deloitte & Touche in relation to the
Company's financial, accounting and other systems,
management and accounts.
(c) Without limiting any other requirement herein, with
each request for Disbursement, the Company shall submit to each
of the Lenders a detailed line item budget relating to Project
Costs other than those Project Costs payable pursuant to the EPC
Contract showing the budgeted amount of each line item, the
cumulative amount of each line item used through the date of the
request for Disbursement and the amounts being requested from the
Disbursement for application to each line item. The consent of
each of the Lenders shall be required in order to exceed the
budgeted amount for any such line item or to apply the amounts
budgeted for any such line item toward another line item. As
soon as available, but in any event within sixty (60) days prior
to the first day of each Fiscal Year, an Annual Budget (including
budgeted statements of income, a schedule of capital
expenditures, sources and applications of funds statement and
balance sheets) prepared by the Company for each of the four
fiscal quarters of such Fiscal Year and accompanied by (i) a
statement of the Independent Engineer approving the assumptions
upon which such Annual Budget was based and (ii) a statement of
an Authorized Officer of the Company to the effect that, to the
best of his knowledge, the budget is a reasonable estimate for
the period covered thereby. The Annual Budget shall be
accompanied by the Company's cash flow projections for such
Fiscal Year and the Company's calculation of the Debt Service
Coverage Ratio (calculated on the basis of assumptions developed
by the Company and approved by the Lenders (after consultation
with the Independent Engineer)) for the preceding and upcoming 12-
month periods. The Annual Budget will be subject to approval by
the Lenders and the Independent Engineer, which approval will not
be unreasonably withheld or delayed. If the Lenders and the
Company fail to agree on any Annual Budget prior to the
commencement of the relevant Fiscal Year, the Annual Budget for
the immediately preceding Fiscal Year shall be used until the
Lenders and the Company agree, with the amounts adjusted in
accordance with the increase in the U.S. Consumer Price Index.
(d) At the time of the delivery of the financial statements
in accordance with Section 5.1(a) or (b) hereof, a certificate of
an Authorized Officer of the Company to the effect that, to the
best of his knowledge, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default
has occurred and is continuing, specifying the nature and extent
thereof and what action the Company is taking or proposes to take
in response thereto.
(e) (i) Immediately upon obtaining knowledge
thereof, notice, by facsimile, cable or telex, of
any event which constitutes a Default or Event of
Default, specifying the nature of such Default or
Event of Default and any steps the Company is
taking to remedy the same, and (ii) promptly, and
in any event within five (5) Business Days after
the Company obtains knowledge thereof, notice of:
(A) any litigation or governmental
proceeding pending (x) against the Company
(or against a Person whom the Company must
indemnify) involving a claim in excess of one
hundred thousand Dollars ($100,000), or
against the O&M Operator or any Sponsor, or,
prior to the later of the date of expiration
of the Defects Liability Period and the
Project Completion Date, the EPC Contractor
or the Owner's Engineer involving a claim in
excess of two hundred fifty thousand Dollars
($250,000) or which could constitute a
Material Adverse Change or (y) with respect
to any Principal Document;
(B) any proposal by any
Governmental Authority to acquire
compulsorily the Company or any of the
Collateral;
(C) any substantial dispute
between (x) the Company, the O&M Operator or
any Sponsor, or, prior to the later of the
date of expiration of the Defects Liability
Period and the Project Completion Date, the
EPC Contractor or the Owner's Engineer and
(y) any Governmental Authority or other
Person relating to the Project;
(D) any actual or proposed
termination, rescission, discharge (otherwise
than by performance) or amendment of, or
waiver or indulgence under, any material
provision of any Principal Document;
(E) any material notice, or
correspondence outside the ordinary course,
received from or initiated by the Company,
the O&M Operator or any Sponsor, or, prior to
the later of the date of expiration of the
Defects Liability Period and the Project
Completion Date, the EPC Contractor or the
Owner's Engineer relating to a Governmental
Approval, including, without limitation, a
Remittance and Repatriation Approval,
necessary for the performance by it of its
obligations under the Principal Documents;
(F) any Lien becoming enforceable
over any of the Company's assets;
(G) any one or more events,
conditions or circumstances that exist or
have occurred which would reasonably be
expected to constitute a Material Adverse
Change or a Force Majeure Event;
(H) any pending investigation of
the Company, the O&M Operator or any Sponsor,
or, prior to the later of the date of
expiration of the Defects Liability Period
and the Project Completion Date, the EPC
Contractor or the Owner's Engineer or any of
the principals, directors, officers or direct
or indirect shareholders, other than natural
persons, of the Company, the O&M Operator or
any Sponsor, or, prior to the later of the
date of expiration of the Defects Liability
Period and the Project Completion Date, the
EPC Contractor or the Owner's Engineer;
(I) any default by NEA or HMGN
under any Principal Document whether or not
such default is cured by NEA or HMGN; or
(J) any damage or casualty to the
Project in excess of five hundred thousand
Dollars ($500,000).
(f) At least 10 Business Days prior to the first Payment
Date specified in this Agreement, a certificate of an Authorized
Officer of the Company to the effect that no Default or Event of
Default has occurred and is continuing, or, if any Default or
Event of Default has occurred or is continuing, specifying the
nature and extent thereof and what action the Company is taking
in response thereto.
(g) Prior to the Project Completion Date, within 30 days of
the end of each Quarter, a report, in form and substance
satisfactory to the Lenders and the Independent Engineer, on the
implementation and progress of the Project, including (i) a
comparison between actual expenditures and construction progress
with that anticipated in the then-current Annual Budget and the
approved schedule, (ii) any factors materially and adversely
affecting or which might reasonably be expected to materially and
adversely affect the carrying out of the Project or the
implementation of the Financing Plan and any proposed cure plan,
and (iii) copies of any reports received by the Company from any
outside technical consultant identifying any matter that is of
material adverse significance to the operation of the Project.
(h) Contemporaneously with delivery to the Company's
shareholders, a copy of each notice of a shareholders' meeting,
together with the meeting agenda. Promptly, and in any event
within five (5) Business Days after each shareholders' meeting,
the Company shall deliver to each of the Lenders a true, complete
and correct copy of the minutes of such meeting.
(i) Promptly, and in any event within five (5) Business
Days after receipt by the Company thereof, copies of all notices,
reports, or other information given to or by the Company pursuant
to Sections 3.16, 3.3.11, 3.32.2, 3.32.14, and 3.33 of the EPC
Contract.
(j) Promptly, and in any event within five (5) Business
Days after receipt by the Company thereof, the Company shall
cause the EPC Contractor to deliver to each of the Lenders and
the Independent Engineer (in addition to delivery to the
Company), copies of all notices, reports, or other information
given by the EPC Contractor pursuant to Sections 3.3.10, 3.9,
3.19, 5.2, 5.2.3, 6.2.2, 10, and 11.12 of the EPC Contract.
(k) Immediately upon obtaining knowledge thereof, the
Company shall deliver to each of the Lenders a notice, signed by
an Authorized Officer of the Company, with a copy to the
Independent Engineer, of any event, condition or circumstances
which could reasonably be expected to lead to a violation of
Environmental Laws.
(l) Promptly, and in any event within five (5) Business
Days after receipt by the Company thereof, the Company shall
deliver to each of the Lenders and the Independent Engineer a
copy of any complaint (other than an inconsequential complaint),
order, directive, claim, citation, or notice by any Governmental
Authority or any Person with respect to: (A) solid or liquid
waste disposal, (B) the use, generation, storage, transportation,
or disposal of toxic or Hazardous Materials, (C) rare or
endangered species, or (D) other environmental, health or safety
matters, including Environmental Laws.
(m) The Company will cause each of Panda Energy
International, Inc. and Harza Engineering Company International
L.P. to deliver to each of the Lenders the financial statements
specified in Sections 4.1(d) and (e) of the Share Retention and
Project Funds Agreement.
(n) From time to time, such other information or documents
(financial or otherwise) as either of the Lenders may reasonably
request.
Section 5.2. Books, Records and Inspections; Accounting
and Auditing Matters.
(a) The Company shall keep proper books of record and
account adequate to reflect truly and fairly the financial
condition and results of operations of the Company (including the
progress of the Project) in which full, applicable, true and
correct entries in conformity with U.S. GAAP and all requirements
of law shall be made of all dealings and transactions in relation
to its business and activities. The Company will permit officers
and designated representatives of the Lenders to visit and
inspect, under guidance of officers of the Company, any of the
properties of the Company, and to examine and make copies of the
books of record and account of the Company and discuss the
affairs, finances and accounts of the Company with, and be
advised as to the same by, its and their officers. Any such
visits will be made during normal business hours and with
reasonable advance notice, and all visitors to the Site will
comply with the Company's safety programs while present at the
Site.
(b) The Company shall (i) maintain cost control and
management information systems and (ii) maintain a system of
accounting and prepare its financial statements in accordance
with U.S. GAAP, all as required in the Facility Procedures
Manual.
(c) The Company shall authorize the Auditors (whose fees
and expenses shall be for the account of the Company) to
communicate directly with each of the Lenders at any time
regarding the Company's accounts and operations and furnish to
each of the Lenders a copy of such authorization, which shall be
substantially in the form of Schedule 5.2(c) to the General
Conditions. The Lenders shall provide the Company with prior
notice of its intent to communicate with the Auditors unless the
Lenders, under the circumstances at such time, determine in good
faith that it would not be prudent to provide such notice.
(d) The Company shall permit representatives of the Lenders
(including, without limitation, the Independent Engineer) to
visit the Site and all other premises of the Company and to have
access to its outside advisors, contractors and employees. Any
such visits by such representatives shall be conducted during
normal business hours and with reasonable advance notice. All
such representatives shall comply with the Company's safety
program while present at the Site.
(e) In the event that ▇.▇. ▇▇▇▇▇▇▇ & Company should cease
to be the Auditors of the Company for any reason, the Company
shall appoint and maintain as the Auditors another firm of
independent public accountants approved by the Lenders.
(f) The Company shall provide to the Nepal Rastra Bank all
bank statements required pursuant to all approvals issued by the
Nepal Rastra Bank for the Offshore Retention Account and the
Nepal Retention Account as and when required pursuant to such
approvals.
Section 5.3. Insurance.
(a) Unless the Lenders otherwise agree, the Company shall
maintain at all times (in a manner appropriate for the stage of
completion of the Project) insurance of its properties and
business with financially sound and reputable insurers against
loss or damage in such manner and to the same extent as shall be
no less than generally accepted as customary in regard to
property and business of like character (including, without
limitation to the generality of the foregoing, the requirements
of Schedule 3.1(f)(i) to the General Conditions).
(b) Insurance Proceeds shall be applied as follows:
(i) All Insurance Proceeds relative to any
single loss in excess of seven hundred fifty
thousand Dollars ($750,000) shall be paid by the
respective insurers directly to the Trustee. All
Insurance Proceeds relative to a single loss of
seven hundred fifty thousand Dollars ($750,000) or
less shall be paid directly to the Company. If
any Insurance Proceeds relative to any single loss
in excess of seven hundred fifty thousand Dollars
($750,000), or, during the occurrence and
continuation of an Event of Default, relative to
any loss are paid to the Company, such Insurance
Proceeds shall be received only in trust for the
Lenders, shall be segregated from other funds of
the Company, and shall be promptly paid over to
the Trustee in the same form as received (with any
necessary endorsement) for deposit in the
Insurance Proceeds Sub-Account. If any Insurance
Proceeds are paid to any Lender, such Lender shall
promptly pay over such Insurance Proceeds to the
Trustee for deposit in the Insurance Proceeds Sub-
Account.
(A) If there does not exist an
Event of Default, Insurance Proceeds relative
to a single loss of seven hundred fifty
thousand Dollars ($750,000) or less shall be
applied by the Company to pay the necessary
costs of repair, restoration or replacement
of the Project (in each case, to the extent
such Insurance Proceeds were paid in respect
of physical loss or damage thereto). After
applying such amount, any excess Insurance
Proceeds shall be delivered to the Trustee
for deposit in the Revenue Sub-Account.
(B) If there does not exist an
Event of Default and if there shall occur
damage, destruction or casualty with respect
to which Insurance Proceeds in excess of
seven hundred fifty thousand Dollars
($750,000) but less than five million Dollars
($5,000,000) are payable, and if (I) the
Company promptly (and, in any event, within
30 days after the occurrence of such damage,
destruction or casualty) gives written notice
to each of the Lenders that the Company
wishes to repair, restore or replace the
Project to the condition that it was in
immediately prior to such damage, destruction
or casualty, (II) the Insurance Proceeds
received by the Company or the Trustee
together with funds otherwise available to
the Company, will be sufficient to cover all
costs and expenses necessary to repair,
restore or replace the Project and to cover
the Operating and Maintenance Costs and the
Debt Service payable by the Company during
the period necessary to repair, restore or
replace the Project, (III) the repair,
restoration or replacement of the Project is
technically and economically feasible, (IV)
after giving effect to any proposed repair,
restoration or replacement, no Default or
Event of Default or a default under any
Principal Document shall exist, (V) each of
the Lenders shall receive an opinion of
counsel in form and substance reasonably
satisfactory to the Lenders or other evidence
satisfactory to the Lenders that neither any
applicable Governmental Approval nor any
Principal Document will terminate during the
period necessary to repair, restore or
replace the Project and no applicable
Governmental Approval, or amendment to this
Agreement or the Security Documents or any
other instrument, is necessary for the
purpose of subjecting the repair, restoration
or replacement to the Liens of the Security
Documents except such, if any, as shall have
been delivered to the Lenders, and (VI) each
of the Lenders shall have received from the
Company and the Independent Engineer such
certificates or other evidence as the Lenders
may reasonably require regarding the
foregoing matters, then the Lenders shall
direct the Trustee in a written notice to
deliver the Insurance Proceeds received in
connection with the damage, destruction or
casualty to the Project to the Company and
the Company shall apply such Insurance
Proceeds to pay for the necessary costs of
repair, restoration or replacement of the
Project and to pay for Operating and
Maintenance Costs and Debt Service when due.
After making such payments to the Company,
any excess Insurance Proceeds shall be
deposited in the Revenue Sub-Account.
(ii) If there shall occur damage, destruction
or casualty with respect to which Insurance
Proceeds in excess of five million Dollars
($5,000,000) are payable, the Lenders may, after
consulting with the Company during the 30-day
period following such damage, destruction or
casualty, choose to apply the Insurance Proceeds
to prepay a principal amount of the Loans at the
time outstanding, such prepayment to be made pro
rata between the IFC Loans and the DEG Loan,
together with interest accrued thereon or fees
accrued in connection therewith to the prepayment
date. In addition, if Insurance Proceeds have
been paid pursuant to Section 5.3(b)(i)(B) above,
and the Company (I) has not notified the Lenders
promptly that it wishes to repair, restore or
replace the Project or (II) has not otherwise
complied with the provisions of Section 5.3(b)(i)
above relative to the repair, restoration or
replacement of the Project, the Lenders may choose
to apply the Insurance Proceeds to prepay the
Loans, pro rata between the IFC Loans and the DEG
Loan, together with accrued interest.
(c) On or before the date of the first Disbursement under
this Agreement and thereafter at intervals of not more than
twelve (12) calendar months (or fewer at the request of the
Lenders) until all obligations of the Company under the Loan
Documents shall have been indefeasibly paid in full, the Company
shall furnish to each of the Lenders a certificate signed by a
duly authorized representative of each insurer, showing the
insurance then maintained by the Company pursuant to this
Section 5.3 and stating that such insurance complies with the
terms hereof. The Company shall cause the insurers with whom it
maintains such insurance to agree to advise the Company and each
of the Lenders in writing promptly of any default in the payment
of any premiums or any other act or omission on the part of the
Company of which they have knowledge and which might invalidate
or render unenforceable, in whole or in part, any such insurance.
(d) The Company shall manage and administer all insurance
policies set forth in Article 9 of the EPC Contract (other than
those insurances required of the EPC Contractor under Article 9.2
of the EPC Contract) and including the filing of all claims and
the taking of all necessary or appropriate steps to collect any
proceeds on behalf of the relevant insured party.
(e) In the event that the Lenders shall determine that it
would be customary or reasonable for a project with
characteristics such as the Project to have additional or
supplemental insurance coverage, in respect of rights or
liabilities not covered by the insurance requirements set forth
in Schedule 3.1(f)(i) to the General Conditions, then upon the
request of the Lenders, the Company shall obtain and maintain
such coverage to the extent such coverage is available on
commercially reasonable terms.
Section 5.4. Corporate Franchises; Enforcement of
Principal Documents. The Company:
(a) will take, and will cause to be taken, all actions
necessary or desirable, or as reasonably requested by the
Lenders, to obtain in a timely manner all consents, approvals
(including, without limitation, Governmental Approvals) or
waivers of, and will promptly make, or will promptly cause to be
made, all required filings with Governmental Authorities
applicable to the Company or the Project or similar authorities
or agencies or financial institutions in Nepal, to preserve,
renew and keep in full force and effect its existence and its
material rights, franchises, licenses and patents;
(b) will obtain and maintain in full force and effect all
rights, franchises, licenses, consents or approvals (including,
without limitation, Governmental Approvals applicable to the
Company or the Project and Remittance and Repatriation Approvals)
necessary or desirable for the carrying out of the Project or in
connection with any Loan Document or the transactions
contemplated thereby or the issuance of Shares;
(c) will, with due diligence and in a reasonable and
prudent manner, enforce (including, as necessary, through
negotiation, litigation or other reasonable means) the rights
granted to it under or in connection with the Project Agreement,
the PPA and the other Principal Documents.
Section 5.5. Hedging Transactions. The Company shall
enter into interest rate swaps with respect to the B Loan
pursuant to the Hedging Documents, which swaps shall be executed
on or before full Disbursement of the B Loan. If at any time
prior to the repayment in full of the DEG Loan, the equivalent of
Deutsche ▇▇▇▇ 21,000,000 or the respective Euro amount exceeds
$14,300,000 (which amount represents on the date hereof a twenty
percent (20%) appreciation of the Deutsche ▇▇▇▇ against the U.S.
Dollar), the Company, in order to manage its currency exposure,
shall enter into currency swaps with IFC (provided IFC, in its
sole discretion, is agreeable to entering into such swaps) which
swaps shall be governed by the terms and conditions of the
Hedging Documents, and if IFC elects not to enter into such swaps
with the Company, the Company shall enter into currency swaps
with another counterparty on terms and conditions acceptable to
each of the Lenders.
Section 5.6. Compliance with Laws. The Company will
comply with all applicable laws, statutes, regulations,
authorizations and orders of, and all applicable restrictions
imposed by, all Governmental Authorities, domestic or foreign, in
respect of the conduct of its business and the ownership of its
property (including all Environmental Laws) and with the EMMP and
the HSE Plan.
Section 5.7. Project Implementation; Use of Project Funds.
The Company shall:
(a) cause the proceeds of all funds referred to in the
Financing Plan to be applied exclusively to pay or reimburse
Project Costs;
(b) cause the Project to be completed in accordance with
the plans and specifications set forth in the EPC Contract (other
than change orders made pursuant to Section 6.10(b) of the
General Conditions) and with all requirements of the PPA and the
Project Agreement;
(c) use its best efforts (but without increasing the
financial obligations of the Company under the EPC Contract) to
cause the Commercial Operation Date to occur by December 31, 1999
(and promptly notify each of the Lenders if the Company becomes
unable to achieve the Commercial Operation Date on or before such
date);
(d) promptly arrange subordinated financing from, or sales
of Shares to, the Sponsors in accordance with the Share Retention
and Project Funds Agreement in the event of a Project Funds
Shortfall, so that all work required to achieve the Commercial
Operation Date and the Project Completion Date can proceed
without delay;
(e) carry out the Project and conduct its business in
accordance with sound financial practices and Prudent Utility
Practices, and limit expenditures in any year (including, without
limitation, expenditures for fixed and other non-current assets)
to amounts in the applicable Annual Budget, except that
expenditures for Operation and Maintenance Costs in any Quarter
may exceed by 15% the amount budgeted for any item of expenditure
or by 10% the amount budgeted for total expenditures in the
applicable Annual Budget;
(f) prepare the Operations and Maintenance Plan, reasonably
satisfactory in form and substance to the Lenders and the
Independent Engineer, at least six (6) months prior to
synchronization of the First Unit of the Facility, and cause the
O&M Operator to operate the Project in accordance with the
Operations and Maintenance Agreement, the Operations and
Maintenance Plan, the standards described in the PPA, and,
subject to Prudent Utility Practices, generally in a manner
reasonably designed to maximize the Plant's electricity output
and the Project's revenues and consistent with the long-term plan
for utilization of the Project;
(g) install and maintain a GLOF early warning system,
satisfactory in form and substance to the Lenders and the
Independent Engineer;
(h) implement and enforce the procedures set forth in the
approved Facility Procedures Manual approved by the Lenders;
(i) maintain a projected Debt Service Coverage
Ratio (calculated on the basis of assumptions developed by the
Company and approved by the Lenders) for each 12-month period (or
portion thereof) remaining prior to the last scheduled Payment
Date of at least 1.0:1.0; and
(j) acquire, and deliver to the Trustee, land certificates
in respect of all necessary rights for each portion of the Site
prior to the Financial Closing Date (each portion of the Site
being listed in Schedule 3.1(e) of the General Conditions);
provided, however, that title to those portions of the Site
listed on Part II of Schedule 3.1(e) are not required to be
obtained by the Financial Closing Date but must be acquired and
delivered to the Trustee no later than the date specified on Part
II of Schedule 3.1(e).
Section 5.8. Repair of Roads. In the event of the
destruction of, or damage to, roadways and bridges necessary for
the development, construction and operation of the Project, the
Company shall notify each of the Lenders as soon as practicable
of the occurrence of such destruction or damage and shall in
accordance with the PPA repair or cause to be repaired all
roadways and bridges damaged in connection with the construction
of the Project.
Section 5.9. Taxes; Duties; Proper Legal Form.
(a) The Company shall pay or cause to be paid, or upon
notice from either of the Lenders, reimburse such Lender or its
assigns for all Taxes (including stamp Taxes and any withholding
Tax which may be imposed in the future on the Loans), duties,
fees, or other charges payable on or in connection with the
execution, issue, delivery, registration or notarization, or for
the legality, validity or enforceability, or the enforcement, of
this Agreement, the Loan Documents and the other Principal
Documents and any other documents related to this Agreement or
the issuance or sale of any Shares, and shall, upon notice from
either of the Lenders, reimburse such Lender or its assigns for
any such Taxes, duties, fees or other charges paid by such Lender
or its assigns thereon.
(b) All sums payable by the Company to each of the Lenders
under any Principal Document, whether principal, interest, fees,
expenses, or otherwise, shall be indefeasibly paid in full, free
of any deductions or withholdings for any and all present and
future Taxes.
(c) In the event that the Company is prohibited by law from
making payments to either of the Lenders under any Principal
Document free of such deductions or withholdings, then the
Company shall pay such additional amount as may be necessary in
order that the actual amount received after such deduction or
withholding shall equal the full amount stated to be payable
under such Principal Document and, upon request from either
Lender, the Company shall deliver to such Lender official tax
receipts evidencing payment (or certified copies of such receipts
or other documentation in form and substance satisfactory to such
Lender) within thirty (30) days of the date of payment of such
Taxes. If any amount due in respect of the Loans under this
Agreement is increased pursuant to this Section 5.9(c), the
Company may, upon thirty (30) days' prior written notice to each
of the Lenders and subject to any necessary governmental
(including Nepal Rastra Bank) or other approval having been
obtained, prepay the portion of the outstanding principal amount
of the Loans, with respect to which such increased payment is
attributable, together with accrued interest thereon and all
other amounts then due hereunder.
(d) The Company shall take all action within its control
required or in the reasonable opinion of either of the Lenders
advisable to ensure that each of the Principal Documents is in
proper legal form under the laws of Nepal or under the respective
governing laws selected in such Principal Documents, for the
enforcement thereof in such jurisdictions without any further
action on the part of either Lender.
(e) Subsections (a) and (b) above do not apply to Taxes,
duties, fees and other charges which directly result from a
Participant having its principal office in Nepal or having or
maintaining a permanent office or establishment in Nepal, if and
to the extent that such permanent office or establishment
acquires the relevant Participation.
Section 5.10. Performance of Obligations. The Company
shall perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument
by which it is bound and will perform all of its obligations
under the terms of the Loan Documents and the other Principal
Documents.
Section 5.11. Further Assurances. The Company shall do all
things necessary in the reasonable judgment of the Lenders or the
Trustee to (i) create and (except as otherwise specifically
approved in writing by the Lenders) perfect the Security with
respect to future assets covered or purported to be covered by
the Security Documents (including, without limitation, any
further registration of the Mortgage (including any registration
in respect of supplements to the Mortgage) in accordance with the
requirements of Nepalese law), (ii) maintain the Security in full
force and effect at all times (including the priority thereof),
and (iii) preserve and protect the Collateral and protect and
enforce its rights and title, and the rights and title of the
Lenders and the Trustee, in and to the Collateral.
Section 5.12. Deposit of Revenues and Funding of Accounts.
The Company shall deposit, or cause to be deposited, revenues and
other amounts owed to the Company, fund the Debt Service Reserve
Sub-Account with an amount equal to the Debt Service Reserve
Requirement, and fund the Debt Payment Sub-Account, the
Maintenance Reserve Sub-Account and the Operations and
Maintenance Sub-Account in accordance with, and otherwise comply
with, the provisions of the Trust and Retention Agreement and the
Nepal Agency and Retention Agreement. The Company shall deposit
in the Revenue Sub-Account $1,500,000 in working capital on or
before the Commercial Operation Date. Without limiting the
foregoing, the Company shall instruct the Trustee to direct its
agent to exchange all Rupees received under the PPA (other than
amounts required from time to time to satisfy the Company's Rupee-
denominated obligations determined according to the applicable
Annual Budget) to US Dollars promptly and to transfer such US
Dollars to be deposited forthwith upon such conversion in the
Offshore Retention Account, as contemplated in the Nepal Agency
and Retention Agreement.
Section 5.13. Security of the Site. The Company shall take
all actions reasonably necessary to ensure the security of the
Site and the safety of persons working or living at the Site,
including, without limitation, proper fencing, lighting, guarding
and surveillance of the Project and the Site.
Section 5.14. Environmental Compliance.
(a) The Company shall design, construct, operate and
maintain the Plant in compliance with requirements relating to
environmental matters set forth in the EPC Contract, the
Operations and Maintenance Agreement, the HMGN Project License,
the HSE Plan, the EMMP, and all Environmental Laws, and within
ninety (90) days after the end of each Fiscal Year, deliver to
each of the Lenders an annual monitoring report, signed by an
Authorized Officer of the Company, based on the requirements
outlined in the EMMP, confirming compliance with such
requirements of the EPC Contract, the Operations and Maintenance
Agreement, the EMMP, the HMGN Project License, the HSE Plan, and
applicable Environmental Laws or, as the case may be, detailing
any non-compliance, or any complaint with respect to any of the
foregoing matters, together with the action being taken to remedy
such failure, or address such complaint, and ensure future
compliance. To the extent required by the Lenders, the Company
shall implement remedial action plans acceptable to the Lenders
in connection with any aforesaid failure or complaint, or any non-
compliance identified by the Lenders or the Independent Engineer.
The aforesaid report shall be satisfactory in form and substance
to the Lenders and shall provide sufficient information to
monitor the performance of the Project over the preceding year
with respect to environmental protection and, at a minimum, shall
include narrative summaries of (i) the results of environmental
monitoring or sampling activity (as detailed in the EMMP); (ii)
Project-related accidents materially adversely impacting the
environment or resulting in the loss of life; (iii) environmental
deficiencies identified by Governmental Authorities and any
remedial actions taken in respect thereof; and (iv) any event,
condition or circumstance which could reasonably be expected to
lead to a violation of the Environmental Laws. For the purposes
of this Section 5.14(a), the Company may submit to the Lenders a
report prepared to fulfill Nepalese regulatory requirements,
provided such report satisfies the minimum requirements listed in
this Section 5.14(a).
(b) The HSE Plan relating to the operating period of the
Project shall be prepared and submitted to each of the Lenders
and the Independent Engineer for their approval at least one
hundred twenty (120) days prior to First Unit Delivery, and the
HSE Plan relating to the construction period of the Project shall
be finalized, in a form acceptable to the Lenders and the
Independent Engineer, prior to the Financial Closing Date.
Section 5.15. Additional Sponsor Contributions. Promptly,
but in all events within five (5) Business Days after becoming
aware of a Deficiency, the Company shall direct each Sponsor to
fund such Deficiency in accordance with the Share Retention and
Project Funds Agreement.
Section 5.16. Equity Letters of Credit. If a Sponsor
Shareholder fails to make any Subscription Amount Payment as and
when required under the Sponsor Shareholder's Subscription
Agreement, the Company shall (in writing) instruct the Trustee to
demand payment under the Equity Letter of Credit provided by such
Sponsor Shareholder (other than Himal International Power
Corporation Pvt. Ltd.) of an amount equal to such Subscription
Amount Payment and deposit, or direct the letter of credit bank
to deposit, such amount in the appropriate sub-account under the
Trust and Retention Agreement.
Section 5.17. Default under EPC Contract. If the EPC
Contractor fails to make any payment to the Company due under the
EPC Contract, including Performance Liquidated Damages or
Schedule Liquidated Damages, the Company shall promptly, but in
all events within five (5) Business Days, notify the Trustee and
each of the Lenders.
Section 5.18. Spare Parts. The Company shall order and
obtain, prior to the First Unit Delivery, those spare parts
necessary for the operation of the First Unit, and prior to
Second Unit Delivery, those parts necessary for the operation of
the Facility, in each case, as approved in writing by the
Independent Engineer.
Section 5.19. Panda of Nepal; Harza Engineering Company
International L.P.
(a) The Company shall cause Panda of Nepal to execute the
Panda of Nepal Consent, the Assignment Agreement and any
financing statements in connection with such Assignment
Agreement.
(b) The Company shall cause Panda of Nepal and Harza
Engineering Company International L.P. to provide prior written
notice to the Lenders of any substitution of the services of ▇.
▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇ or ▇. ▇▇▇▇▇▇▇▇ pursuant to the Amended and
Restated Services Agreement dated July 11, 1997, between Panda of
Nepal and Harza Engineering Company International L.P.
ARTICLE 6.
NEGATIVE COVENANTS
The Company covenants and agrees that until all of the
Obligations are paid in full and the obligations of each of the
Lenders under the Loan Documents have terminated, and unless
otherwise permanently waived in writing by the Lenders:
Section 6.1. Liens. The Company will not, and will not
agree to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real, personal or
mixed, tangible or intangible) of the Company, whether now owned
or hereafter acquired, other than Permitted Liens.
Section 6.2. Consolidation, Merger, Sale of Assets, Etc.
The Company will not:
(a) wind up, liquidate or dissolve its affairs or enter
into any transaction of merger or consolidation;
(b) convey, sell, lease or otherwise dispose of (or agree
to do any of the foregoing at any future time) all or any part of
its property or assets (other than electricity produced by the
Project) except in the ordinary course of business; or
(c) purchase or otherwise acquire (in one or a series of
related transactions) any part of the property or assets of any
Person (other than purchases or other acquisitions of inventory
or materials or capital expenditures, each in accordance with the
applicable Annual Budget).
Section 6.3. Dividends; Restricted Payments. The Company
will not declare or pay any dividends, or return any capital, to
its shareholders or authorize or make any other distribution,
payment or delivery of property or cash to its shareholders as
such, or redeem, retire, purchase or otherwise acquire, directly
or indirectly, for consideration, any Shares (or any options or
warrants issued by the Company with respect to its share
capital), or set aside any funds for any of the foregoing
purposes, until after the Project Completion Date (subject to the
following sentence) and then only as permitted by applicable law
and this Section 6.3. For purposes of this Section 6.3 only, the
failure to achieve the following components of the Project
Completion Date shall not, in and of themselves (and provided
that all the other conditions set forth herein are satisfied),
preclude the declaration or payment of dividends to the Company's
shareholders: (i) the achievement of the Punch List (as such term
is defined in the EPC Contract) required for Final Acceptance to
the extent the cost to complete such Punch List has been reserved
by the Company in a manner and an amount satisfactory to the
Lenders and milestones acceptable to the Lenders have been
established for the purpose of completing such Punch List; it
being understood and agreed that if at the end of any such
milestone, the applicable Punch List has not been completed to
the satisfaction of the Lenders, the Company shall thereafter be
prohibited from declaring or paying dividends to its shareholders
unless and until, among other things, Final Acceptance has been
achieved (including completion of the aforesaid Punch List),
(ii) the existence of any immaterial actions, suits, or
proceedings with respect to the Company, the O&M Operator, the
EPC Contractor, the Owner's Engineer or the Project, provided
that the Company has established reserves with respect thereto in
a manner and an amount satisfactory to the Lenders, (iii) the
issuance of the EPC Warranty Performance Guarantee if the Company
has established reserves with respect thereto in a manner and an
amount satisfactory to the Lenders, (iv) the nonpayment of the
amounts specified in the definition of "Company Completion
Certificate" contained in Schedule A to the extent such amounts
are immaterial, provided the Company has established reserves
with respect thereto in a manner and an amount satisfactory to
the Lenders, and (v) to the extent a Final Acceptance
Certificate, a Company Completion Certificate or an Independent
Engineer's Certificate would otherwise be required to be
delivered and the Lenders, in the exercise of their good faith
judgment, determine that the sole reason that such certificates
are not delivered is due to an exclusion from the requirements
of Project Completion Date specified in subsections (i)-(iv),
then provided the conditions set forth in said subsections (i)-
(iv) have been satisfied, the failure to deliver any such
certificates in and of itself shall not preclude the declaration
or payment of dividends to the Company's shareholders. The
Company will not request that the Trustee transfer funds to the
Holding Account unless:
(a) no Default or Event of Default shall have occurred and
be continuing, no Force Majeure Event shall have occurred and be
continuing, and no event of default or default under any other
Indebtedness of the Company shall occur as a result of such
transfer;
(b) the Debt Service Reserve Sub-Account is funded with an
amount equal to the Debt Service Reserve Requirement, and the
Debt Payment Sub-Account, the Maintenance Reserve Sub-Account,
the Operations and Maintenance Sub-Account, the Nepal Operations
and Maintenance Sub-Account, the Nepal Reserve Sub-Account, the
Deficiency Sub-Account, the Cash Sub-Account, the Nepal Dollar
Sub-Account and all other Sub-Accounts under the Trust and
Retention Agreement and the Nepal Agency and Retention Agreement
are funded to the extent then required under the Trust and
Retention Agreement and the Nepal Agency and Retention Agreement;
(c) the Debt Service Coverage Ratio for the preceding 12-
month period equaled or exceeded 1.20:1, and, based on the
Company's projections (calculated on the basis of assumptions
developed by the Company and approved by the Lenders), the Debt
Service Coverage Ratio for the following 12-month period will
remain above 1.20:1; and
(d) if IFC shall then be a shareholder of the Company, the
Person nominated by IFC in accordance with the Shareholders'
Agreement shall be a member of the board of directors of the
Company unless such Person has resigned from the Board of
Directors of the Company and IFC has not nominated a replacement
therefor.
Section 6.4. Leases. The Company will not enter into any
lease (other than the Leases) of, or agreement or arrangement to
acquire by lease, the use of any real or personal property or
equipment of any kind, except leases of operating equipment,
office equipment, computers and similar equipment, under which
the aggregate rental payments during the entire terms of all such
leases in effect at any one time do not exceed $200,000 (which
aggregate amount shall be increased each year in accordance with
increases in the U.S. Consumer Price Index).
Section 6.5. Indebtedness. The Company will not contract,
create, incur, assume or suffer to exist any Indebtedness, except
Permitted Indebtedness.
Section 6.6. Contingent Obligations; Guarantees. Without
limitation to the restrictions of Section 6.5 above, the Company
will not enter into any Contingent Obligations, including without
limitation any agreement or arrangement to guarantee or, in any
way or under any condition, become obligated for all or any part
of any Indebtedness or other obligations of another Person other
than the Operations and Maintenance Agreement and the Services
Agreements.
Section 6.7. Investments; Subsidiaries. The Company will
not form or have any subsidiaries, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other Person other than
Permitted Investments.
Section 6.8. Arm's-Length Transactions. The Company will
not enter into any transaction or series of related transactions
with any Person other than in the ordinary course of business and
on an arm's-length basis.
Section 6.9. Other Transactions. The Company will not
enter into any partnership, profit-sharing or royalty agreement
or other similar arrangement whereby the Company's income or
profits are, or might be, shared with any other Person, or enter
into any management contract or similar arrangement whereby its
business or operations are managed by any Person, or make any
investments except in accordance with the Trust and Retention
Agreement.
Section 6.10. No Modifications. The Company will not:
(a) amend or modify its Memorandum of Association or
Articles of Association (other than to increase its authorized
share capital or as may be required by law, provided that in
either such case prior notice shall be given to each of the
Lenders), change its Fiscal Year, or materially change or consent
to change the nature or scope of the Project, or issue Shares
prior to the Project Completion Date to any Person other than a
Sponsor or IFC;
(b) assign or otherwise transfer, terminate or amend, or
consent to any amendment of, any Principal Document, or grant or
consent to any grant of any waiver or forbearance, or exercise
any election in respect of any material provision of any
Principal Document, provided that the Company may enter into
change orders relating to the EPC Contract as follows:
(i) without the prior review and consent of
the Lenders or the Independent Engineer, any
single change order having a price or value of
fifty thousand Dollars ($50,000) or less, provided
that the aggregate of all change orders entered
into pursuant to this Section 6.10(b)(i) may not
exceed two hundred fifty thousand Dollars
($250,000); provided further that where any such
change orders would increase the price of the EPC
Contract, the certificate required under Paragraph
2 of the EPC Performance Guarantee shall have been
delivered by the Company to the issuer of such
Performance Guarantee; provided further that such
change order shall not materially adversely affect
the performance, design, or reliability of the
Project or the schedule for First Unit Delivery,
Second Unit Delivery or Final Acceptance (any
delay in any such scheduling in excess of fourteen
(14) days in the aggregate, whether consecutive or
otherwise, on account of all change orders entered
into pursuant to this Section 6.10(b)(i) in all
events being deemed to be materially adverse for
purposes of this Section 6.10(b)(i)); and provided
further that this Section 6.10(b)(i) shall not
apply to any change order entered into pursuant to
Section 3.33.3(e) of the EPC Contract;
(ii) with the prior review and consent of the
Independent Engineer (which consent shall be
deemed given if the Independent Engineer does not
object to the terms of the proposed change order
within fifteen (15) days following receipt of the
proposed change order by the Independent
Engineer), any single change order having a price
or value in excess of fifty thousand Dollars
($50,000) but less than two hundred thousand
Dollars ($200,000), provided that the aggregate of
all change orders entered into pursuant to clause
(i) above and this clause (ii) may not exceed two
million Dollars ($2,000,000); and provided further
that where any such change orders would increase
the price of the EPC Contract, the certificate
required under Paragraph 2 of the EPC Performance
Guarantee shall have been delivered by the Company
to the issuer of such Performance Guarantee;
(iii) with the prior review and consent
of the Lenders and the Independent Engineer, any
change order not expressly contemplated by the
preceding clause (i) or (ii); provided further
that where any such change orders would increase
the price of the EPC Contract, the certificate
required under Paragraph 2 of the EPC Performance
Guarantee shall have been delivered by the Company
to the issuer of such Performance Guarantee; or
(c) enter into any material agreement other than the
Principal Documents, except (i) as permitted under Section 6.4 or
6.9 of the General Conditions, or (ii) if the aggregate amount
payable under such agreement is less than $50,000 per year, or
(iii) if the amount payable under such agreement, together with
the amounts payable under all other Third Party Agreements (other
than the Project Agreement, the PPA, the EPC Contract and the
Services Agreements) is less than $200,000; or (iv) the amounts
payable under the agreement have been included in the applicable
Annual Budget approved by the Lenders; or (v) such agreement is
required in connection with extraordinary circumstances and is
approved by the Lenders; or
(d) suspend performance by the EPC Contractor, the O&M
Operator or the Owner's Engineer for a period of more than 30
days except with the prior approval of the Lenders; or
(e) approve any Substantial Subcontractors or Substantial
Vendors in addition to or in replacement of those Substantial
Subcontractors and Substantial Vendors set forth on
Schedule 6.10(e) hereof pursuant to the EPC Contract, or any
single subcontract exceeding $200,000, or subcontracts exceeding
$500,000 in the aggregate pursuant to the Amended and Restated
Services Agreement dated July 11, 1997, between the Company and
Harza Engineering Company International L.P., and the Company
shall cause Panda of Nepal not to approve any single subcontract
exceeding $200,000 or subcontracts exceeding $500,000 in the
aggregate pursuant to the Amended and Restated Services Agreement
dated July 11, 1997 between Panda of Nepal and Harza Engineering
Company International L.P. unless, with respect to any such
proposed additional or replacement Substantial Subcontractor or
Substantial Vendor or proposed subcontract, as the case may be,
the Lenders do not object to such proposed Substantial
Subcontractor or Substantial Vendor or proposed subcontract, as
the case may be, within fifteen (15) days following receipt by
each of the Lenders of the written proposal pertaining thereto.
It is expressly understood and agreed that the Lenders shall have
the right to reject the proposed Substantial Subcontractor or
Substantial Vendor or proposed subcontract, as the case may be,
if the Lenders determine in good faith that they do not have
sufficient information to make a decision and explain in writing
what additional information is required; or
(f) approve the date of First Unit Delivery, Second Unit
Delivery, or Final Acceptance, in each case pursuant to the EPC
Contract; or
(g) exercise its right to operate unsatisfactory Equipment
(as such term is defined in the EPC Contract) pursuant to
Section 11.19 of the EPC Contract, unless the Lenders do not
object to the Company's proposed operation of unsatisfactory
Equipment within fifteen (15) days following the Lenders' receipt
of notice from the Company that it intends to operate
unsatisfactory Equipment.
Section 6.11. No Other Business. The Company will not
carry on any business other than in connection with the
completion and operation of the Project and will take no action
whether by acquisition or otherwise which would constitute or
result in any material alteration to the nature of that business.
Section 6.12. Abandonment. The Company will not abandon or
agree to abandon the Project or place the Project or agree to
place the Project on a "care and maintenance" basis for more than
thirty (30) consecutive days in any calendar year; provided,
however, that (a) nothing in this Section 6.12 shall prevent the
Company from shutdowns necessary for repairs and maintenance of
the Project or from putting the Project on a "care and
maintenance basis" to the extent necessitated by a Force Majeure
Event or from putting the Project on a "care and maintenance
basis" during any period of delay on the part of NEA in building
the NEA Interconnection Facilities, and (b) nothing in this
Section 6.12 shall be deemed to waive or limit in any way the
right of the Lenders to declare an Event of Default as provided
in Article 7 of the General Conditions, including without
limitation Sections 7.1(f) and 7.1(g) of the General Conditions.
"Care and maintenance basis" means maintaining the Plant on the
basis that it will not generate electricity and will be or remain
decommissioned on a long-term basis all in accordance with
prudent operating and maintenance practices and methods and
standards generally followed from time to time by the electrical
utility industry in connection with maintaining electric
generating and transmission equipment of the type applicable to
the Project.
Section 6.13. Improper Use. The Company will not use,
maintain, operate or occupy, or allow the use, maintenance,
operation or occupancy of, any portion of the Site or the Project
for any purpose which:
(a) may be dangerous, unless safeguarded as required by law
(provided, however, that this clause (a) shall not be deemed to
prohibit the Company from carrying out the Project in accordance
with the terms of the Project Agreement, the PPA, the EPC
Contract and the Services Agreements in a reasonable and prudent
manner);
(b) violates any applicable law, Environmental Law or any
applicable Governmental Approval in any material respect;
(c) may constitute a public or private nuisance resulting
in a Material Adverse Change; or
(d) may (i) make voidable or cancelable any warranties
given by the EPC Contractor under Section 11.1 of the EPC
Contract, or (ii) make void, voidable or cancelable, or increase
the premium of, any insurance then in force with respect to the
Site or Project or any part thereof unless, in the case of an
increase in premium, the Company gives proof of payment of such
increase.
Section 6.14. Expenditures. The Company will not make
expenditures for fixed and other non-current assets in excess of
the amounts budgeted therefor in the applicable Annual Budget.
The Company will not make expenditures for Operation and
Maintenance Costs in any Quarter which exceed by 15% the amount
budgeted for any item of expenditure in the Annual Budget or by
10% the amount budgeted for total expenditures in the Annual
Budget.
Section 6.15. Approvals. The Company will not permit any
commissioning, performance, or acceptance tests or final
inspection (as such final inspection is referred to in
Section 10.10 of the EPC Contract) to be conducted except after
twenty-one (21) days prior notice thereof to the Independent
Engineer and the Lenders (with an additional seven (7) days
notice of the actual day of the test) and provided such test
occurs in the fourth or fifth week following the first notice to
the Independent Engineer and the Lenders, and will not approve or
adopt the Facility Procedures Manual, Performance Testing
Procedures, Performance Test Guidelines, the HSE Plan, the
Operations and Maintenance Plan or the detailed operating manuals
for the Project unless and until the Independent Engineer shall
have recommended approval thereof to the Lenders, and the Lenders
have given approval of such document. The Company will not
issue, or permit any party to issue, the Final Acceptance
Certificate under the EPC Contract except with the prior approval
of the Independent Engineer and the Lenders. Within ten (10)
days following a final inspection of the Facility (as such final
inspection is referred to in Section 10.10 of the EPC Contract
and which final inspection shall be attended by the Independent
Engineer and by the Lenders if the Lenders so wish), the Lenders
and the Independent Engineer shall notify the Company in writing
whether the Final Acceptance Certificate should be issued to the
EPC Contractor. If at the end of the 10-day period: (i) the
Lenders and the Independent Engineer do not notify the Company as
to whether the Final Acceptance Certificate should be issued, or
(ii) either the Lenders or the Independent Engineer do not notify
the Company as to whether the Final Acceptance Certificate should
be issued and the other party (i.e., the Independent Engineer or
the Lenders, as the case may be) has accepted in writing the
issuance of the Final Acceptance Certificate, then the Lenders
and/or the Independent Engineer shall be deemed to have approved
the issuance of such Final Acceptance Certificate. It is
expressly understood and agreed that by the end of the aforesaid
ten (10) day period the Lenders and the Independent Engineer
shall have the right to reject the issuance of the Final
Acceptance Certificate if the Lenders or the Independent Engineer
(as the case may be) determine in good faith that it does not
have sufficient information to make a decision and explains in
writing what additional information is required.
ARTICLE 7.
EVENTS OF DEFAULT
Section 7.1. Events of Default. It is an Event of Default
if:
(a) Payments. The Company shall (i) default in the payment
when due of any principal of any of the Loans or (ii) default in
the payment when due of any interest, fees or other amounts in
respect of any of the Loans or under any Loan Document and such
default shall continue for at least five (5) days or (iii)
default in the payment required under the Hedging Documents and
such default shall continue after any grace period provided
therein; or
(b) Representations, Etc. Any representation, warranty or
certification confirmed or made in any Principal Document (other
than any Non-Material Agreement) or the Letter of Information by
the Company, the Sponsors or any Affiliate of any of them, or in
any writing provided by any of them in connection with the
execution, delivery or performance of, or in connection with any
request for a Disbursement under, the Loan Documents or any other
Principal Documents (other than Non-Material Agreements) or for a
payment of monies from any account created under the Trust and
Retention Agreement or the Nepal Agency and Retention Account
(including, without limitation, any certification of an
Authorized Officer of the Company set forth in a Payment
Requisition, Insurance Proceeds Request, Debt Service and Reserve
Deposit Certificate), shall be found to have been incorrect in
any material respect when made or deemed to be made and the fact,
circumstance or condition that is the subject matter of such
representation or warranty is not corrected to conform to such
representation or warranty within thirty (30) days after the
Company becomes aware thereof; or
(c) Loan Document Covenants. The Company shall (i) default
in the due performance or observance by it of any term, covenant
or agreement (other than those referred to in Section 7.1(a) and
(b) above and other than the covenants set forth in Sections 5.3
, 5.6 and 5.7(j) of the General Conditions) contained in this
Agreement or in any other Loan Document and such default shall
remain unremedied for a period of thirty (30) days (or for such
shorter period as may be specified in such agreement) or, in the
case of a default occurring as a result of the Company's failure
to perform or observe any term, covenant or agreement which
expressly requires that the Lenders be satisfied with such
performance or observance or otherwise exercise their discretion,
for a period of thirty (30) days (or for such shorter period as
may be specified in such agreement) after notice by the Lenders
of any failure by the Company to so perform or observe; or (ii)
default in the due performance or observance by it of the
covenants set forth in Sections 5.3 and 5.7(j) of the General
Conditions; or (iii) default in the due performance or observance
by it of the covenants set forth in Section 5.6 hereof and with
respect to compliance with inconsequential laws, other than
Environmental Laws, such default shall continue for a period of
thirty (30) days; or
(d) Principal Document Covenants. Except with respect to
those matters referred to in any other Section of this Article 7,
any party (other than the Lenders or their advisors or
consultants or the Trustee) shall default in the due performance
or observance by it of any covenant or agreement under a
Principal Document (other than a Third Party Agreement and other
than a Non-Material Agreement) and such default shall remain
unremedied for a period of thirty (30) days after the Company
becomes aware thereof (or for such shorter period of cure as may
be specified in such Principal Document); or
(e) Third Party Agreement Covenants. Except with respect
to those matters referred to in Sections 7.1(f), (g) and (h) of
the General Conditions, any party shall default in the due
performance or observance by it of any material term, covenant or
agreement under a Third Party Agreement (other than Non-Material
Agreements) and such default shall remain unremedied for a period
of thirty (30) days after the Company becomes aware thereof (or
for such shorter period of cure as may be allowed in such Third
Party Agreement); provided, however, that if the Company is
diligently pursuing a cure of such default, the Company shall
have an additional thirty (30) days to obtain a cure of such
default if such additional period is reasonably required to
obtain a cure of such default and such additional thirty (30)
days would not extend the cure period for a longer period than is
allowed in such Third Party Agreement; or
(f) NEA Default.
(i) NEA shall default in any payment
obligation under the PPA (and HMGN shall not have
honored a demand under the Project Agreement in
respect thereof within the period specified in the
Project Agreement) beyond any period of grace
provided therein; or
(ii) NEA shall default in any material
respect in the due performance or observance by it
of any other term, covenant or agreement contained
in the PPA (and HMGN shall not have honored a
demand under the Project Agreement in respect
thereof within the period specified in the Project
Agreement), and such default shall remain
unremedied for a period of thirty (30) days (or
for such shorter period of cure as may be
specified in the PPA); or
(iii) The Lenders shall not have received
the NEA Letter of Credit from a bank satisfactory
to the Lenders on the first Unit Delivery Date (as
such term is defined in the PPA) or, in the event
the financial condition of the bank issuing the
NEA Letter of Credit falls below a level
satisfactory to the Lenders, the Company shall not
have delivered within thirty (30) days thereafter
a replacement letter of credit from a bank
reasonably satisfactory to the Lenders and in form
and substance satisfactory to the Lenders; or
(iv) At any time prior to the payment in full
of all Obligations of the Company under this
Agreement, the NEA Letter of Credit shall not be
renewed or reinstated in the required amount
before the expiration date thereof.
(g) HMGN Default; Exercise of Obligations.
(i) HMGN shall default in the due
performance or observance of its obligations under
Article 5 of the Project Agreement; or
(ii) HMGN shall fail to perform any of its
material obligations under the Project Agreement,
and such default shall remain uncured or
unremedied for a period of ninety (90) days; or
(iii) HMGN shall fail to meet its
obligation under Article 6 of the Project
Agreement to purchase the assets of the Company.
(h) EPC Contract, Operations and Maintenance Agreement and
Services Agreements Covenants. Any party to the EPC Contract,
the Operations and Maintenance Agreement or the Services
Agreements shall default in the due performance or observance of
any material term, covenant or agreement contained in such
agreements, and such default remains unremedied for a period of
thirty (30) days after notice thereof is delivered to the
defaulting party (or for such shorter period of cure as may be
allowed in the EPC Contract, the Operation and Maintenance
Agreement or the Services Agreements, as the case may be);
provided, however, that if the Company is diligently pursuing a
cure of any such default, the Company shall have an additional
thirty (30) days to obtain a cure of such default if such
additional period is reasonably required to obtain a cure of such
default and such additional thirty (30) days would not extend the
cure period for a longer period than is allowed in such Third
Party Agreement; or
(i) Sponsors. (A) Any Sponsor shall fail to deliver, or
cause the Company to deliver, to the Trustee stock certificates
representing Pledged Shares (marked by the Company to acknowledge
the pledge thereof to the Trustee for the benefit of the
Lenders), with stock powers executed in blank, within ten (10)
Business Days following the acquisition by such Sponsor of such
Pledged Shares under the Share Retention and Project Funds
Agreement or the Subscription Agreement to which it is a party;
or (B) any Sponsor shall default in the due performance or
observance of any term, covenant or agreement (except as
otherwise provided in clause (i)(A) above) contained in the Share
Retention and Project Funds Agreement or the Subscription
Agreement to which it is a party, and such failure shall continue
for a period of thirty (30) days; or (C) any Equity Letter of
Credit shall expire prior to the occurrence of the Project
Completion Date under this Agreement and any remaining
obligations of the Sponsor Shareholder which has provided such
Equity Letter of Credit under its Subscription Agreement shall
not be fully secured by cash collateral in favor of the Trustee
for the benefit of the Lenders, in form and substance
satisfactory to the Lenders; or
(j) Indebtedness.
(i) The Company shall (A) default in any
payment of any Indebtedness (other than the Loans)
with an aggregate principal amount of US$250,000
or more, and such default shall continue for a
period of thirty (30) days or such shorter period
of grace (and any extension of the period of grace
granted by the holder of such Indebtedness), if
any, provided in the instrument or agreement under
which such Indebtedness was created or (B) default
(other than in the manner referred to in clause
(A)) in the observance or performance of any
agreement or condition relating to any
Indebtedness with an aggregate principal amount of
US$250,000 (other than the Loans) or contained in
any instrument or agreement evidencing, securing
or relating thereto, and such default shall
continue for a period of thirty (30) days or such
shorter period of grace provided, if any, in the
instrument or agreement under which such
Indebtedness was created, or any other event shall
occur or condition exist the effect of which is to
cause any such Indebtedness to be declared or to
become due prior to its stated maturity; or
(ii) Any Indebtedness of the Company shall be
declared to be due and payable, or required to be
prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity
thereof; or
(k) Bankruptcy, Etc.
(i) There shall have been entered against
the Company, any Sponsor, the O&M Operator, or,
prior to the later of the date of expiration of
the Defects Liability Period or the Project
Completion Date, the EPC Contractor or the Owner's
Engineer, a decree or order by a court adjudging
the Company, any Sponsor, the O&M Operator, or,
prior to the later of the date of expiration of
the Defects Liability Period or the Project
Completion Date, the EPC Contractor or the Owner's
Engineer, bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in
respect of the Company, any Sponsor, the O&M
Operator, or, prior to the later of the date of
expiration of the Defects Liability Period or the
Project Completion Date, the EPC Contractor or the
Owner's Engineer, under any applicable law; or
appointing a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official)
of the Company, any Sponsor, the O&M Operator, or,
prior to the later of the date of expiration of
the Defects Liability Period or the Project
Completion Date, the EPC Contractor or the Owner's
Engineer, or of any substantial part of its
property or other assets, or ordering the winding
up or liquidation of its affairs; or any other
event shall have occurred which under any
applicable law would have an effect analogous to
any of those events listed above in this Section
with respect to the Company, any Sponsor, the O&M
Operator, or, prior to the later of the date of
expiration of the Defects Liability Period or the
Project Completion Date, the EPC Contractor or the
Owner's Engineer (all such actions being defined
in this Agreement as an "Involuntary Bankruptcy"),
and such Involuntary Bankruptcy shall not have
been discharged within thirty (30) days of
institution; or
(ii) There shall have been instituted by the
Company, any Sponsor, the O&M Operator, or, prior
to the later of the date of expiration of the
Defects Liability Period or the Project Completion
Date, the EPC Contractor or the Owner's Engineer,
proceedings to be adjudicated bankrupt or
insolvent, or the consent by it to the institution
of bankruptcy or insolvency proceedings against
it; or the filing by it of a petition or answer or
consent seeking reorganization or debt relief
under any applicable law; or the consent by it to
the filing of such a petition or to the
appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official)
of the Company, any Sponsor, the O&M Operator, or,
prior to the later of the date of expiration of
the Defects Liability Period or the Project
Completion Date, the EPC Contractor or the Owner's
Engineer, or of any substantial part of its
property; or the making by it of an assignment for
the benefit of creditors; or the admission by it
in writing of its inability to pay its debts
generally as they become due; or any other event
shall have occurred which under any applicable law
would have an effect analogous to any of those
events listed above in this Section with respect
to the Company, any Sponsor, the O&M Operator, or,
prior to the later of the date of expiration of
the Defects Liability Period or the Project
Completion Date, the EPC Contractor or the Owner's
Engineer; or any corporate or other action is
taken by the Company, any Sponsor, the O&M
Operator, or, prior to the later of the date of
expiration of the Defects Liability Period or the
Project Completion Date, the EPC Contractor or the
Owner's Engineer, for the purpose of effecting any
of the foregoing.
(l) Security Documents, Project Events.
(i) Any Security Document which creates, or
purports to create, a Lien on the Collateral or
any portion thereof shall fail to provide, or
cease to be effective to grant, to the Lenders or
the Trustee, as applicable, a Lien on such
Collateral superior to all other Liens, any such
Lien shall cease to be perfected (except as
otherwise specifically approved in writing by the
Lenders), or any Security Document shall cease to
be in full force and effect or shall not be
reinstated or renewed as required hereunder or
under any other applicable Principal Document, or
the validity thereof or the applicability thereof
to the Loans or the other Obligations or any part
thereof shall be disaffirmed by or on behalf of
the Company or a party thereto, or any party to a
Security Document (other than the Lenders or the
Trustee) shall fail to perform or observe, or
cause to be performed or observed, any covenant,
term or agreement contained in any Security
Document; or
(ii) Without limiting the other provisions of
this Article 7, any Principal Document (other than
any Non-Material Agreement) shall cease to be
valid and binding or in full force and effect
(except upon expiration of its stated term if not
required to be reinstated or renewed under any
other applicable Principal Documents) or shall be
declared to be null and void and such Principal
Document shall not have been replaced (with a
document containing only the same parties and only
the same terms, conditions and other provisions of
the document being replaced) or reinstated or
novated to the satisfaction of the Lenders within
thirty (30) days from the date such Principal
Document ceased to be valid or binding or in full
force and effect or declared null and void; or
(iii) Any Principal Document shall be
assigned or amended, except to the extent
expressly permitted under this Agreement, without
the written consent of the Lenders; or
(iv) Without limiting the other provisions of
this Article 7, any material Governmental Approval
other than the Project Licenses (including,
without limitation any Remittance and Repatriation
Approval) required in connection with the Loans,
this Agreement, any other Principal Document or
the Project shall not be obtained or shall be
rejected or denied or shall expire without being
renewed in a timely manner or shall be revoked,
suspended, held invalid or limited in effect and
such Governmental Approval shall not be obtained
or renewed within thirty (30) days from the date
it was necessary or expired, as the case may be,
or any Project License shall be rejected, or
revoked, suspended, held invalid or limited in
effect, except (as to any event described in this
clause (d)) to the extent constituting a Special
Buyout Event; or
(v) The Company shall cease to have the
right to possess and use the Site (other than an
immaterial portion thereof); or
(vi) Without limiting the other provisions of
this Article 7, a Special Buyout Event shall occur
and the Company shall fail to pay in full all of
the Obligations on or before the Purchase Date;
or, except to the extent any such action
constitutes a Special Buyout Event, HMGN or any
other Governmental Authority shall take any action
to dissolve or disestablish the Company, or shall
take any action that prevents the Company from
operating the Project or prevents the Company or
any other party from performing its obligations
under any of the Principal Documents (provided
that, if any such action of HMGN or any other
Governmental Authority was not taken in response
to an act or omission of the Company, such action
shall not constitute an Event of Default until
such action or the effects thereof on the Company
or other party shall continue for thirty (30)
days); or
(vii) the Company or the Sponsors (in
their capacities as Sponsors) shall abandon the
Project or shall fail to construct, operate or
maintain the Project in accordance with the
Principal Documents; or
(viii) the Company shall fail to maintain
any insurance policies required under Section 5.3
of, or Schedule 3.1(f)(i) to, the General
Conditions; or
(ix) the Commercial Operation Date shall not
have occurred by the date which is six months
after the Required Commercial Operation Date (as
defined in, and as extended in accordance with the
terms of, the PPA), or the Project Completion Date
shall not have occurred by the date which is
twelve (12) months after the Commercial Operation
Date; or the Project shall not have achieved at
least 36MW nominal net capacity by the Commercial
Operation Date; or
(m) Material Adverse Change. One or more events,
conditions or circumstances shall exist or shall have occurred
which, alone or taken together, constitutes a Material Adverse
Change and such Material Adverse Change is not cured within
thirty (30) days after its occurrence; or
(n) Debt Service Coverage Ratio. The Company shall fail to
maintain a projected Debt Service Coverage Ratio (calculated on
the basis of assumptions developed by the Company and approved by
the Lenders) of at least 1.0:1.0 for each 12-month period (or
portion thereof) prior to the last scheduled Payment Date, and
within the first thirty (30) day period following such failure
the Company shall fail to deliver a plan reasonably satisfactory
to the Lenders designed to achieve a projected Debt Service
Coverage Ratio (calculated on such basis) of at least 1.0:1.0 or
within the second thirty (30) day period following such failure
the Company shall fail to implement such plan and achieve a
projected Debt Service Coverage Ratio of at least 1.0:1.0; or
(o) Share Retention. The Sponsors cease to hold the legal
and beneficial title to Shares in the percentages required by
Article 2 of the Share Retention and Project Funds Agreement; or
(p) Judgments. Any final judgment or judgments for the
payment of money in an aggregate amount in excess of one hundred
thousand Dollars ($100,000) or its equivalent in another currency
are rendered against the Company, and such judgment or judgments
are not satisfied or discharged within thirty (30) days of entry
or, provided that the Company has posted such bonds and other
security as are satisfactory to the Lenders, after all appeal
rights with respect to such judgment or judgments have been
exhausted.
Section 7.2. Acceleration on Default. Upon the occurrence
of an Event of Default, and at any time thereafter, if such Event
of Default is continuing, (i) either Lender shall have the right,
by notice to the Company and independent of any action by the
other Lender or any other Person, to (x) declare all outstanding
principal of, and all accrued interest and other fees and charges
on, its Loans, together with all other Obligations, to be
immediately due and payable, whereupon the same shall become due
and payable forthwith and (y) terminate its Commitment to make
its Loans to the Company, and (ii) each of the Lenders and the
Trustee shall have such other rights with respect to the
occurrence of an Event of Default as are provided in the Loan
Documents or as are available to them at law or in equity. If an
Event of Default specified in Section 7.1(k)(ii) of the General
Conditions shall have occurred with respect to the Company,
(i) the outstanding principal of, and all accrued interest and
other fees and charges on the Loans (together with all other
Obligations) shall thereupon become immediately due and payable
(anything in this Agreement to the contrary notwithstanding)
without any presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived by the Company, and (ii)
the Commitment of the Lenders to make the Loans to the Company
shall terminate immediately (anything in this Agreement to the
contrary notwithstanding) without any presentment, demand,
protest or notice of any kind, all of which are hereby expressly
waived by the Company, and (iii) each of the Lenders and the
Trustee shall have such other rights with respect to the
occurrence of such Event of Default as are provided in the Loan
Documents or as are available to them at law or in equity.
Section 7.3. Right to Cure. Notwithstanding anything in
Article 7 of the General Conditions, each of the Lenders reserves
the right to cure any default by the Company under any of the
Principal Documents.
ARTICLE 8.
MISCELLANEOUS
Section 8.1. Payment of Fees and Expenses.
(a) The Company shall, whether or not the transactions
herein contemplated are consummated, pay (i) the fees and
expenses of each of the Lenders' counsel (as evidenced by
invoices) in connection with (A) the preparation, review,
execution, and, where appropriate, registration, delivery and
translation of this Agreement, the Security (and any renewal or
extension thereof), each Principal Document and any other
documents related to this Agreement, (B) the administration by
the Lenders of the Loans and by IFC of the IFC Subscription
provided for in this Agreement, (C) the giving of any legal
opinion required by the Lenders under this Agreement and/or any
Principal Document, (D) any amendment or modification to,
preservation of rights under, or waiver in connection with, or
waiver under, this Agreement, the Security or any Principal
Document, (E) the registration (where appropriate) and the
delivery of the evidences of indebtedness and other obligations
relating to the Loans, the IFC Subscription and the disbursements
thereof, (F) the exercise by either of the Lenders of its rights
or powers consequent upon or arising out of the occurrence of any
Event of Default or Default, and (G) matters pertaining to the
Lenders' rights under any Principal Document; (ii) the fees and
expenses of any consultant or advisor to the Lenders or the
Trustee, including, without limitation, the Independent Engineer
and the Insurance Consultant, provided that all such fees and
expenses shall be evidenced by invoices and other supporting
documentation; and (iii) any costs or expenses incurred by the
Lenders in enforcing any provision of this Agreement or any other
Principal Document.
(b) The Company shall, whether or not the transactions
herein contemplated are consummated, (i) pay and hold each of the
Lenders and the Trustee harmless from and against any and all
present and future stamp and other similar Taxes with respect to
the transactions contemplated hereby and save the Lenders and the
Trustee harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such
Taxes; and (ii) indemnify the Trustee and each of the Lenders and
each of their respective officers, directors, employees,
representatives, attorneys and agents from and hold each of them
harmless against any and all liabilities (including removal and
remedial actions), obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses and
disbursements (including attorneys' and consultants' fees and
disbursements) (each a "Loss") incurred by any of them as a
result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding
(whether or not the Trustee or either of the Lenders is a party
thereto) related to the entering into and/or performance of this
Agreement or any other Principal Document or the use of the
proceeds of the Loans or the consummation of any transactions
contemplated herein or in any other Principal Document,
including, without limitation, the fees and disbursements of
counsel selected by such indemnified party incurred in connection
with any such investigation, litigation or other proceeding, or
in connection with enforcing the provisions of this Section 8.1
(but excluding any such Losses to the extent that a court or
arbitral tribunal with jurisdiction over the subject matter of
the Loss renders a final determination that such Loss was based
solely on the gross negligence or willful misconduct of the
Person to be indemnified or of its officers, directors,
employees, representatives, attorneys or agents, as the case may
be, as determined by a court of competent jurisdiction).
(c) Without limitation to the provisions of paragraph (b)
above, the Company agrees to defend, protect, indemnify and hold
harmless each of the Lenders and the Trustee and each of their
respective officers, directors, employees, representatives,
attorneys and agents from and hold each of them harmless against
any and all Losses imposed on or asserted against any such
Persons directly or indirectly based on, or arising or resulting
from, (i) the actual or alleged presence of Hazardous Materials
on, under or at the Project or the Site, (ii) any environmental
claim relating to the Company or the Project or arising out of
the use of the Project or the Site, or (iii) the exercise of the
Trustee's or the Lenders' rights under any of the provisions of
this Agreement or the other Loan Documents, regardless of when
any such matters arise, but excluding any matter to the extent
that a court or arbitral tribunal with jurisdiction over the
subject matter of the Loss renders a final determination that
such Loss was based solely on the gross negligence or willful
misconduct of the Trustee or either of the Lenders or of their
respective officers, directors, employees, representatives,
attorneys or agents, as the case may be.
(d) All sums paid and costs incurred by either of the
Lenders with respect to any matter indemnified hereunder shall
bear interest at the default rate applicable to the Loans from
the date which is fifteen (15) days after such Lender requests
reimbursement thereof from the Company, and all such sums and
costs shall be Obligations secured by the Security Documents
until so reimbursed.
(e) Nothing contained in Sections 8.1(b) or (c) above shall
vest in the Company any right or power to control the defense of
any Person indemnified by the Company thereunder. The Company
also agrees not to assert, on any theory of liability, any claim
against any Person indemnified by the Company under
Sections 8.1(b) or (c) above for special, indirect,
consequential, or punitive damages arising out of or otherwise
relating to this Agreement, or to any of the transactions
contemplated in this Agreement or the actual or proposed use of
proceeds of the Loans.
Section 8.2. Right of Setoff. In addition to any rights
now or hereafter granted under applicable law or otherwise, and
not by way of limitation of any such rights, upon the occurrence
of an Event of Default, each of the Trustee and each of the
Lenders is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind
to the Company or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other
Indebtedness at any time held or owing by each of the Lenders
(including without limitation by any branches and agencies of the
Lenders wherever located) to or for the credit or the account of
the Company against and on account of the Obligations and the
liabilities of the Company to each of the Lenders or the Trustee
under this Agreement or under any other Loan Document, and all
other claims of any nature or description arising out of or
connected with this Agreement or any other Loan Document,
irrespective of whether either of the Lenders or the Trustee
shall have made any demand with respect thereto.
Section 8.3. Notices. All notices, demands, requests and
other communications provided for hereunder shall be in writing
and shall be deemed to have been given (a) when presented
personally, (b) when sent by overnight courier service, on the
Business Day following the date of delivery to such courier
service, or such later day as demonstrated by a bona fide receipt
therefor, or (c) when transmitted by facsimile, upon
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.
For Bhote Koshi Power Company Private Limited:
Address: c/o Panda Energy International, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
For IFC:
Address: International Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Director, Power Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For DEG:
Address: DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇
▇▇▇▇▇ (Mungersdorf)
Federal Republic of Germany
Attention: Infrastructure Department
Facsimile: 011 49 221 4986 107
For the Trustee:
Address: Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇
Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For the Insurance Consultant:
Address: INDECS, Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
England
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇) ▇▇▇ ▇▇▇ ▇▇▇▇
For the Independent Engineer:
Address: Stone & ▇▇▇▇▇▇▇ Engineering Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Field
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.4. 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. IFC and/or DEG, as the case may be, will give the Company
prompt notice after the occurrence of any such transfer,
assignment or grant.
Section 8.5. Remedies Cumulative. 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 8.6. 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 8.7. Documents. All documents to be furnished or
communications to be given or made under this Agreement shall be
in the English language or, if in another language, shall be
accompanied by a translation into English certified by a
representative of the Company, which translation shall be the
governing version between the Company and the Lenders and the
Trustee.
Section 8.8. Calculations, Computations. All financial
calculations to be made under, or for the purpose of, the
Investment Agreement shall be determined in accordance with U.S.
GAAP, applied on a consistent basis and, except as otherwise
required to conform to the definitions contained in Schedule A to
the General Conditions or any other provision of the Investment
Agreement, shall be calculated from the then most recently issued
quarterly financial statements which the Company is obligated to
furnish to the Lenders from time to time, as provided hereunder;
provided, however, that (a) if the relevant quarterly financial
statements should be in respect of the last quarter of a Fiscal
Year then, at the option of the Lenders, such calculations may
instead be made from the audited financial statements for the
relevant Fiscal Year, and (b) if there should occur any material
adverse change in the financial condition or results of
operations of the Company after the end of the period covered by
the relevant financial statements, then such material adverse
change shall also be taken into account in calculating the
relevant figures.
Section 8.9. 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 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 Sections 5-1401 and 5-1402 of the General Obligations
Law of the State of New York). Any legal action or proceeding
against the Company 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 the Company, 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 the Company, at its address set forth in
Section 8.3 of the General Conditions, such service to become
effective ten (10) days after such mailing. Nothing herein shall
affect the right of the Trustee or 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 8.10. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which
when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
Section 8.11. Headings. The headings of the several
Articles, Sections and sub-sections of this Agreement are
inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
Section 8.12. 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 and signed by all of the parties hereto, and to the
extent any amendments to any of the financial terms contained
herein would have a material adverse impact on the Ministry of
Industries, approved by the Ministry of Industries.
Section 8.13. Survival. All indemnities set forth herein
including, without limitation, in Sections 5.9 and 8.1 of the
General Conditions, shall survive the making and repayment of the
Loans.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed in their respective names as of the date first
written above.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:
Authorized Representative1
INTERNATIONAL FINANCE CORPORATION
By:
Authorized Representative
DEG-DEUTSCHE INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH,
By:
Authorized Representative
SCHEDULE 3.1(c)
"IN-PRINCIPLE" COMMITMENT LETTERS
See Attached.
SCHEDULE 3.1(e)
TITLE TO THE SITE
Part I
Details of Land owned by Bhote Koshi Power Company Private Limited
Location of Land:
Zone: Bagmati, District: Sindhupalchowk, V.D.C.: Phulphingkatti
Land ▇.▇▇. ▇▇▇▇ Plot Area Date of issue of
Ownership No. No. Ropani Land Ownership
Certificate Certificate
Nepali Date
Gregorian Date
1 1 1 411 2-3-2-1 2053-6-11 1996-09-27
" 2 1 413 1-14-3-1 2053-6-11 1996-09-27
" 3 1 499 4-1-1-0 2053-6-11 1996-09-27
" 4 1 500 20-0-0-0 2053-6-11 1996-09-27
" 5 1 462 3-9-1-1 2053-6-28 1996-10-14
" 6 1 465 0-5-0-3 2053-6-28 1996-10-14
" 7 1 433 1-5-1-0 2053-9-04 1997-12-19
" 8 2 217 1-9-3-1 2053-10-17 1997-01-30
" 9 2 215 3-5-1-3 2053-10-17 1997-01-30
" 10 2 11 12-8-2-2 2053-10-17 1997-01-30
" 11 2 4 7-7-0-3 2053-10-17 1997-01-30
" 12 2 13 13-4-0-0 2053-10-17 1997-01-30
" 13 2 1 4-8-2-2 2053-10-17 1997-01-30
" 14 1 490 0-12-2-3 2053-10-17 1997-01-30
" 15 1 489 0-12-2-1 2053-10-17 1997-01-30
" 16 1 263 3-0-1-3 2053-10-17 1997-01-30
" 17 1 262 3-8-2-2 2053-11-9 1997-02-20
" 18 1 468 6-0-0-0 2053-11-9 1997-02-20
" 19 2 6 1-6-1-1 2054-2-30 1997-06-12
" 20 2 5 1-9-2-0 2054-2-30 1997-06-12
" 21 2 216 1-4-3-1 2054-2-30 1997-06-12
2 1 1 443 0-8-0-0 2053-6-11 1996-09-27
" 2 1 474 0-2-1-3 2053-6-11 1996-09-27
" 3 1 428 1-9-0-3 2053-6-11 1996-09-27
" 4 1 429 0-9-3-3 2053-6-11 1996-09-27
" 5 1 444 9-12-0-2 2053-6-11 1996-09-27
" 6 1 438 0-3-1-1 2053-6-11 1996-09-27
" 7 1 459 0-2-0-0 2053-6-11 1996-09-27
" 8 1 423 0-8-0-3 2053-6-11 1996-09-27
" 9 1 432 0-13-2-0 2053-6-11 1996-09-27
" 10 1 441 2-6-1-2 2053-6-11 1996-09-27
" 11 1 426 0-3-0-0 2053-6-11 1996-09-27
" 12 1 412 12-3-1-1 2053-6-11 1996-09-27
" 13 1 415 3-0-1-3 2053-6-11 1996-09-27
" 14 1 417 2-6-1-2 2053-6-11 1996-09-27
" 15 1 430 0-6-2-2 2053-6-11 1996-09-27
" 16 1 448 0-1-2-1 2053-6-11 1996-09-27
" 17 1 461 0-1-2-0 2053-6-11 1996-09-27
" 18 1 447 0-1-2-1 2053-6-11 1996-09-27
" 19 1 427 0-9-3-3 2053-6-11 1996-09-27
" 20 1 425 0-3-0-0 2053-6-11 1996-09-27
" 21 4 357 1-3-2-3 2053-6-11 1996-09-27
22 1 422 1-6-2-2 2053-6-11 1996-09-27
3 1 1 419 1-2-2-3 2054-3-18 1997-07-02
" 2 1 418 1-10-3-0 2054-3-18 1997-07-02
" 2 4 358 0-9-1-3 2054-8-20 1997-12-05
" 3 1 420 4-12-0-2 2054-3-18 1997-07-02
" 4 1 502 18-2-3-3 2054-3-18 1997-07-02
" 5 1 504 9-5-3-3 2054-3-18 1997-07-02
" 6 1 463 0-1-0-0 2054-7-26 1997-11-11
4 1 1 464 0-3-0-0 2054-2-30 1997-06-12
" 2 1 501 1-0-0-0 2054-2-30 1997-06-12
" 3 1 503 4-14-0-0 2054-2-30 1997-06-12
Total - 53 175-2-2-1
Description of Leasehold Interests of Bhote Koshi Power Company Private Limited
A. Leasehold interests pursuant to HMGN Lease
Serial Location of land Government Plot Area in Purpose Term of
No. to be Leased Measurement No. Ropani Lease
Map Nos. (Hectare)*
1 Surge Tank and 157-0396 1 105-0-0- Surge Shaft 40 yrs.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ (5.25) Construction
district,
Phulpingkatti
VDC ▇▇▇▇ No. 1,
Forest land with
bushes and
grass.
2 Surge Tank and 157-0396 410 2-2-3-0 Slope 40 yrs.
Powerhouse Area (0.13) Protection
Sindhupalchowk
district,
Phulpingkatti
VDC ▇▇▇▇ No. 1,
Forest land with
bushes and
grass.
3 Surge Tank and 157-0396 "A" in 16-0-0- Powerhouse 40 yrs.
Powerhouse Area Project 0 slope
Sindhupalchowk map, no (0.80) protection
district, num. on
Phulpingkatti govt
VDC ▇▇▇▇ No. 1, map
HMGN, riverbed
4 Surge Tank and 157-0396 359 11-0-0- Powerhouse 40 yrs.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇ access &
Sindhupalchowk (0.55) construction
district, use
Phulpingkatti
VDC ▇▇▇▇ No. 1,
HMGN, barren
land
5 Surge Tank and 157-0396 421 0-9-1-3 Operators 40 yrs.
Powerhouse Area (0.03) village &
Sindhupalchowk construction
district,
Phulpingkatti
VDC ▇▇▇▇ ▇▇. ▇,
▇▇▇▇, ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Government 272 71-0-0- Spoil and 3 yrs.
Sindhupalchowk map number ▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, yet to be (3.55) construction
Phulpingkatti identified material
VDC ▇▇▇▇ No. 1, . storage
HMGN, riverbed &
barren land
7 Headworks Area 157-0317 ▇▇ ▇▇-▇-▇- ▇▇▇, ▇▇ yrs.
Sindhupalchowk 0 spillway,
district, (2.80) desander, &
Phulpingkatti construction
VDC ▇▇▇▇ No. 2,
Forest land,
with grass &
bushes
8 Headworks Area 157-0317 14 10-0-0- Access to 3 yrs.
Sindhupalchowk 0 (0.5) head works &
district, spoils area
Phulpingkatti
VDC ▇▇▇▇ No. 2,
Forest land
along riverbed
with bushes
9 Headworks Area 157-0317 12 3-13-3- Access & 3 yrs.
Sindhupalchowk 3 spoils area
district, (0.2)
Phulpingkatti
VDC ▇▇▇▇ ▇▇. ▇,
▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 157-0278 ▇▇▇ ▇▇-▇-▇- ▇▇▇ ▇▇ yrs.
Sindhupalchowk 0 construction
district, (1.15)
Tatopani VDC
▇▇▇▇ ▇▇. ▇,
▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 157-0278 113 37-0-0- Construction 3 yrs.
Sindhupalchowk 0 Camp Site
district, (1.85)
Tatopani VDC
▇▇▇▇ No. 4,
HMGN, barren
land
*Area in hectares is approximate
Total Land Required
a) HMGN land for 40 years = 50-9-1-3 Ropani (2.53 Hectares)
b) HMGN land for 40 years = 163-2-3-0 Ropani (8.16 Hectares)
SubTotal = 213-12-0-3 Ropani (10.69 Hecatres)
c) HMGN land for 3 years = 111-13-3-3 Ropani (5.59 Hectares)
d) Forest land for 3 years = 10-0-0-0 Ropani (0.50 Hectares)
SubTotal = 121-13-3-3 Ropani (6.09 Hecatres)
TOTAL land to be leased = 335-10-0-2 Ropani (16.78 Hectares)
B. Leasehold interests pursuant to Land Leases other than the HMGN Leases
See Attached.
SCHEDULE 3.1(e)
TITLE TO THE SITE
Part II
1. Property at the cutoff wall, right bank to be purchased or
leased by January 30, 1998. Such property to include any or all
of plots No. 107, part of No. 111 and/or part of No. 112 as shown
on the Land Inventory Map dated July 1997.
2. Right-of-way and tower pad locations at the end of the
transmission line at the point where the Company line will tie in
with the NEA substation. To be determined and purchased by March
30, 1998.
SCHEDULE 3.1(f)(i)
MINIMUM INSURANCE REQUIREMENTS
The Company shall effect and maintain (or procure that the
EPC Contractor and the O&M Operator, as applicable, shall effect
and maintain) the following insurance covers at all applicable
times under forms and policies and with insurers and reinsurers
acceptable to the Lenders in the following terms:
A. COMPANY'S INSURANCE DURING THE CONSTRUCTION PERIOD
1. MARINE AND TRANSIT INSURANCE:
Cover: All materials, equipment, machinery,
spares and other items for incorporation in the
Facility against all risks of physical loss or
damage while in transit by sea, air or land
portion of the journey from country of origin
anywhere in the world to the Site in Nepal,
or vice versa, from the time of the insured
items leaving warehouse or factory for
shipment to the Site in Nepal,
"Subject to;-
Institute Cargo Clauses (A) 1.1.82
Institute War Clauses (Cargo) 1.1.82
Institute Strikes Clauses (Cargo) 1.1.82
Institute War Clauses (sendings by Post) 1.1.82
Institute Cargo Clause (Air) (excl. sendings by Post) 1.1.82
Institute War Clauses (air Cargo) (excl. sendings by Post) 1.1.82)
Institute Strikes Clauses (Air Cargo) 1.1.82 or equivalent.
The MAR Form is deemed incorporated to the
extent that any of the above clauses apply.
Sum
Insured : An amount
equal to the replacement value of any
property being shipped.
Deductible : Generally
nil (but some property may attract a small
deductible).
Insured : The
Company, the EPC Contractors and suppliers to
the Company and suppliers to the EPC
Contractors, each of the Lenders and the
Trustee.
2. MARINE DELAY IN START-UP:
Cover :
Standing charges following delay in start of
commercial operation of the Facility as a
direct result of physical loss or damage
covered under the Marine and Transit
insurance (see Clause I above), application
of any deductible thereunder notwithstanding.
Sum
Insured : As a
minimum an amount equal to the estimated Debt
Service and fixed expenses during the
Indemnity Period.
Indemnity
Period : 24
months from the anticipated delivery date of
each Unit or the Project Completion Date, as
applicable.
Deductible : Not more
than 30 days, or such other period as may be
agreed by the Lenders and the Insurance
Consultant.
Insured : The
Company, each of the Lenders and the Trustee.
3. CONSTRUCTION "ALL RISKS":
Cover : The
contract works executed and in the course of
execution, materials and temporary works,
while on the Site in Nepal, against "all
risks" of physical loss or damage, except as
may be excluded in the policy.
Sum
Insured : An amount
sufficient to pay claims on a reinstatement
basis and not less than US$66,525,000 million
or as may be sub-limited therein.
Deductibles: In respect of
any one occurrence, arising during the
Construction and Testing Period;
(i) from ▇▇▇▇▇, ▇▇▇▇▇▇▇, Flood, Not more than US$100,000
Water Damage, Tsunami,
Subsidence and Collapse
(ii) from testing/commissioning Not more than and claims arising during
the Defects Liability Period
US$100,000
(iii) 10% for each and every loss in respect of GLOF, minimum $100,000 and
maximum $500,000
(iv) from any other cause Not more than $50,000
Period of
Cover : From
the Notice to Proceed as defined in the EPC
Contract and during the design, engineering,
procurement, site preparation, construction,
testing and commissioning and start-up and
until entry into Commercial Service, plus 24
months warranty period of the EPC Contractor.
Insured : The
Company, the EPC Contractors and Suppliers to
the Company and to the EPC Contractors, each
of the Lenders and the Trustee.
General : Cover
shall include transit within Nepal of locally
procured goods and materials.
Claims will be paid in the currency in which
the cost is incurred, i.e. pound, US$ or local
currency.
The insurers and reinsurers to waive all
rights of subrogation against each insured
party hereunder.
Main
Exclusions : War and
kindred risks, nuclear risks, unexplained
shortage, cost of replacing or repairing
items which are defective in workmanship,
material or design; contractual penalties and
consequential losses; cash; vehicles;
vessels; aircraft.
4. ADVANCE LOSS OF PROFITS:
Cover :
Standing charges following delay in start of
commercial operations as a direct result of
physical loss or damage covered under the
Construction "All Risks" policy.
Sum
Insured : As a
minimum, an amount equal to the estimated
Debt Service and fixed expenses.
Indemnity
Period : 24
months from the anticipated delivery date of
each Unit, the Project Completion date, as
applicable.
Insured : The
Company, each of the Lenders and the Trustee.
Deductible : Not more
than 60 days.
General : Cover to
include denial of access; customers and
suppliers extensions as applicable.
5. THIRD PARTY LIABILITY:
Cover : Legal
liability to third parties for death or
bodily injury or loss or damage to their
property arising out of all activities of the
insured parties in Nepal, arising in
connection with the construction, testing and
commissioning and start-up of the Facilities.
Limit of
Indemnity : US$30,000,000
any one occurrence (in the aggregate in
respect of Products Liability and Pollution
Risks).
Deductibles : Not to exceed
US$10,000 for each claim for loss or damage
to property. None for injury to persons.
Insured : The
Company, the EPC Contractors and Suppliers to
the Company and to the EPC Contractors, each
of the Lenders and the Trustee.
Period of
Cover : From
the Notice to Proceed as defined in the EPC
Contract and during the design, engineering,
procurement, site preparation, construction,
testing and commissioning and start-up and
until the Commercial Operation date plus 24
months warranty period of the EPC Contractor.
Cover : To
include a waiver of the rights of subrogation
against each party insured hereunder by the
insurers and reinsurers;
worldwide jurisdiction clause;
cross liability clause;
sudden and accidental seepage, pollution and
contamination and the costs incurred of
cleaning up; non-owned aviation liability.
6. MISCELLANEOUS:
Other insurance as is customary, desirable or necessary to
comply with local or other requirements, such as contractual
insuring responsibility, workmen compensation and employers'
liability insurance in relation to all workmen employed in
the construction of the Project and motor vehicle liability
insurance for all vehicles owned, hired, leased, used or
borrowed for use in Nepal in connection with the Facilities.
B. CONTRACTORS' INSURANCE DURING THE CONSTRUCTION PERIOD:
1. CONTRACTORS' INSURANCE
Without limiting the contractor's obligations,
responsibilities and liabilities under Article 4 of the
EPC Contract the contractor shall effect and maintain at
its own expense for the benefit of and in the joint names
of the Company, the contractor and sub-contractor and such
other persons as the employer may elect, the following
insurances (as defined in Article 9 of the EPC Contract);-
a) Construction Equipment
Insurance against all loss or damage from
whatsoever cause arising in respect of Construction
Equipment brought onto or destined for the Site for use
in the execution of the Works to the full replacement
value of such equipment.
b) Insurance against Accidents to Work Site
Insurance in respect of its liability as
defined in the EPC Contract during the whole time that
any persons are employed by it on Site in connection
with the Works.
c) Motor and Marine Insurances
The Contractor shall at all material times
keep in force the following additional insurances in as
far as they may be applicable:-
i) Policies of motor
insurance in respect of all mechanically propelled
vehicles used on public highways or in any
circumstances such as to be liable for compulsory
motor insurance in accordance with the laws of
Nepal.
ii) Marine Policies in respect
of all floating craft and plant or marine platforms
covering loss of or to such items and liability
arising out of their use to include not only the
hull value thereof but also the cost of removing
the same in the event of sinking whether or not the
same is declared a total loss and including
protection and indemnity and third party liability
cover to an amount equal to the hull value and
estimated cost of removal in the event of sinking
or US$5,000,000 whichever be the greater.
d) Indemnity to Company
All insurances referred to in this clause as
being kept in force by the Contractor shall be endorsed
to the effect that the Employer, Company, the Lenders
and the Trustee and such other persons as the Company
may specify in writing shall be included as named
insureds thereon and fully indemnify them in respect of
claims that may be made against them arising out of the
execution of the works or in connection with the EPC
Contract.
e) Sub-Contractors Insurance
In respect of any Sub-Contractor or in
respect of the use by a Sub-contractor of Construction
Equipment, the Contractor's obligation to insure itself
shall be satisfied by the Sub-Contractor having
effected such insurance endorsed as required by Article
9 of the EPC Contract but the Contractor shall require
such Sub-Contractor to provide to the Company or the
Company's representative when required all such
policies and receipts for payment of the premium or
satisfactory evidence of insurance cover.
C. OPERATIONAL INSURANCE
1. "ALL RISKS" INSURANCE:
Cover : All
assets comprising the Facilities, including
but not limited to, buildings and their
contents, machinery, stock, fixtures,
fittings and all other personal property,
against "all risks" of physical loss or
damage.
Sum
Insured : An amount
sufficient to reinstate the property [to be
determined nearer the time].
Deductibles: To be agreed
with the Lenders nearer the time.
Insured : The
Company, each of the Lenders and the Trustee.
General : To include
a waiver of subrogation in favor of each
party insured hereunder from the insurers and
the reinsurers.
2. BUSINESS INTERRUPTION:
Cover : Loss
of revenue as a direct consequence of loss of
or damage to the Facilities insured under
Clause 1 above.
Sum
Insured : As a
minimum, an amount equal to the estimated
Debt Services due and fixed expenses incurred
during the Indemnity Period.
Indemnity
Period : 24 months.
Deductibles : Not more than
30 days, or such other period as may be
agreed by the Lenders and the Insurance
Consultant.
Insured : The
Company, each of the Lenders and the Trustee.
General : To include
a waiver of subrogation in favor of each
party insured hereunder from the insurers and
the reinsurers.
Supplier and customer extensions, as
appropriate.
3. MACHINERY BREAKDOWN:
Cover : All
machinery, plant, boilers and auxiliary
equipment forming part of the Facilities
against sudden and unforeseen physical loss
or damage resulting from mechanical and
electrical breakdown or derangement,
explosion or collapse of boilers and pressure
vessels, electrical short circuits,
vibration, misalignment, excessive current or
voltage, abnormal stresses, centrifugal
forces, failure of protective or regulating
devices, overheating, entry of foreign
bodies, and other similar causes.
Sum Insured: To be determined
nearer the time but not less than the
replacement value of item(s) to be insured.
Deductibles : To be agreed
with the Lenders nearer the time.
Insured : The
Company, each of the Lenders and the Trustee.
General : To include
a waiver of subrogation in favor of each
party insured hereunder from the insurers and
the reinsurers.
4. CONSEQUENTIAL LOSS FOLLOWING MACHINERY BREAKDOWN:
Cover : Loss
of revenue as a direct consequence of loss or
damage to the Complex insured under Clause 3
above.
Sum Insured : To be determined
nearer the time, but as a minimum, an amount
equal to the estimated Debt Service and fixed
expenses which will be due during the
Indemnity Period.
Indemnity
Period : 15 months.
Deductibles : Not more than
30 days, or such other period as may be
agreed by the Lenders and the Insurance
Consultant.
Insured : The
Company, each of the Lenders and the Trustee.
General : To include
a waiver of subrogation in favor of each
party insured hereunder from the insurers and
the reinsurers.
5. THIRD PARTY/PUBLIC LIABILITY:
Cover : Legal
liability of the Insured parties for death or
bodily injury to third parties or loss or
damage to their property arising out of the
ownership, operation, use or maintenance of
the Facilities.
Limit of
Indemnity : To be agreed
with the Lenders nearer the time but not less
than US$30,000,000 each occurrence (in the
aggregate in respect of Products Liability
and Pollution Risks).
Deductibles : To be agreed
with the Lenders nearer the time.
Insured : The
Company, each of the Lenders and the Trustee.
Cover : To
include:
a waiver of subrogation in favor of each
party insured hereunder from the insurers and
the reinsurers;
a cross liability clause;
worldwide jurisdiction clause;
sudden and accidental seepage, pollution and
contamination, and the costs incurred of
cleaning up.
6. MISCELLANEOUS:
Other insurance which,
a) is customary or necessary to comply with local or
other requirements, such as contractual insuring
responsibility, workmen compensation and employers'
liability insurances in relation to all workmen employed
in the Facilities or in connection with its operation;
motor vehicle liability insurance for all vehicles
owned, hired, leased, used or borrowed for use in Nepal
in connection with the Facilities, and
b) is considered by the Company to be desirable or
prudent, or required by the Lenders after consultation
with the Company, such as Directors' and Officers'
insurance.
7. GENERAL:
a) The Company shall notify each of the Lenders of any
insurances affected by it in accordance with Clause 6
above.
b) The Company shall procure that each policy effected by
the Company pursuant to this Schedule shall provide;-
i) notice of assignment of the policies to
each of the Lenders and/or Trustee;
ii) cut-through clauses where required;
iii) that policies are not to be canceled, lapsed,
suspended or changed in any material respect without
prior written notice (at least 30 days) to each of the
Lenders and their agreement obtained, or such lesser
period as may be specified from time to time in respect
of war and kindred perils;
iv) that the protection which is granted to the
Lenders under the policies is not to be invalidated by
any act or failure to act on the part of the Company or
it's Construction Contractors or subcontractors to the
extent that such protection is agreed by the Insurance
Consultant as being reasonably available;
v) that the Lenders are not responsible to the
insurers or reinsurers for the payment of insurance
premiums or any other obligations of the Company;
vi) that the Trustee be named sole loss payees in
respect of all losses in excess of US$500,000 per
occurrence.
c) Each policy affected pursuant to this Schedule;-
i) shall be maintained with such reputable
insurers and reinsurers as may be approved by the
Lenders;
ii) shall be in such form and substance as is
consistent with the obligations of the Company under
this Schedule, as may be approved by the Lenders; and
iii) shall not include any provision for self-
insurance, or any self-insurance retention except to
the extent of the deductible as are specified in this
Schedule.
d) The Company shall provide to each of the Lenders letters
of undertaking from the insurers and their reinsurance
brokers which addresses such things as notifying the Lenders
in the event that the insurers become aware of any fact
which may affect the coverage under the policy and such
other undertaking as the Lenders may reasonably require.
e) This Company shall provide to each of the Lenders such
information (including without limitation original policy
documents and evidence of premium payment) as may be
reasonably required.
f) If at any time and for any reason any insurance required
to be maintained under this Schedule is not in full force
and effect then, without prejudice to the rights of the
Lenders, the Lenders shall be entitled thereupon, or at any
time whilst the same is continuing, to procure such
insurance at the expense of the Company.
g) If the Lenders reasonably consider that, as a result of a
material change in the identified risk exposure, any of the
terms, conditions, amounts and deductibles of insurances
procured pursuant to this Schedule are inadequate or
inappropriate, the Lenders may require that the Company
procure such amended and/or additional insurances as may be
reasonably required to cover such material change.
SCHEDULE 3.1(i)
CERTIFICATE OF AUTHORIZED OFFICER
OF COMPANY, SPONSOR, O&M OPERATOR,
OR OWNER'S ENGINEER
The undersigned, [________________], HEREBY CERTIFIES that
(s)he is the [______________] of [Company], a [_______________]
company (the "Company"). Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in Schedule A to
that certain Investment Agreement General Conditions, dated as of
the Closing Date among BHOTE KOSHI POWER COMPANY PRIVATE LIMITED,
a private limited liability company organized and existing under
the laws of the Kingdom of Nepal, INTERNATIONAL FINANCE
CORPORATION, an international organization established by
Articles of Agreement among its member countries ("IFC"), and DEG-
DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH, a company
organized and existing under the laws of the Federal Republic of
Germany ("DEG"). The undersigned HEREBY CERTIFIES FURTHER as
follows:
1. Attached hereto as Exhibit A is a true and complete
copy of the Charter Documents of the Company. Such Charter
Documents have not been modified or amended in any respect and
are in full force and effect on the date hereof.
2. The Company is a duly constituted and validly
existing company in good standing under the laws of its
jurisdiction of organization and of each jurisdiction where
failure to so qualify would constitute a Material Adverse Change.
Attached hereto as Exhibit B are the good standing certificates
or equivalent issued by such jurisdictions. The Company is duly
authorized and qualified to conduct business in Nepal [with
respect to a Sponsor only, to the extent required by law; with
respect to the O&M Operator only, by the date which is 180 days
prior to the Scheduled First Unit Delivery Date for the First
Unit].
3. Attached hereto as Exhibit C are true and complete
copies of the resolutions duly adopted by the Board of Directors
of the Company authorizing execution, delivery and performance of
the Principal Documents. Such resolutions have not been modified
or amended in any respect and are in full force and effect on the
date hereof.
4. Each of the following persons is a duly elected,
qualified and acting officer of the Company, holds the office or
offices in the Company indicated opposite his or her name, and
has held such office or offices continuously since __________,
19___, and the signature appearing opposite his or her name is
his or her genuine signature.
Name Office Signature
5. There is no proceeding seeking the dissolution or
liquidation of the Company or threatening the existence of the
Company.
6. On the date hereof, there exists no default or event
of default on the part of the Company, or, to the actual
knowledge of the Company's officers, on the part of any other
party, which has not been cured or waived under any of the
Principal Documents to which the Company is a party (the
foregoing described Principal Documents being collectively
referred to as the "Agreements"). All conditions to the
Company's obligations under the Agreements have been fulfilled or
satisfied on or prior to the date hereof.
7. On the date hereof, all of the representations and
warranties of the Company contained in any of the Agreements or
in the Letter of Information are true and correct in all material
respects with the same force and effect as though such
representations or warranties had been made on and as of the date
hereof, except to the extent that such representations and
warranties related only to a specific date (it being confirmed
that such representations and warranties were true and correct as
of such specific date).
WITNESS my hand this _____ day of ____________, 199___.
By:
Title:
The undersigned, the duly elected Secretary of the Company,
certifies that the above referenced signature is the true,
correct and genuine signature of _____________, the duly elected
____________ of the Company.
By:
[Title]
SCHEDULE 3.1(i)
CERTIFICATE OF AUTHORIZED OFFICER
OF EPC CONTRACTOR
The undersigned, [________________], HEREBY CERTIFIES that
(s)he is the [______________] of China Gezhouba Construction
Group Corporation for Water Resources and Hydropower, a
[corporation owned and controlled by the People's Republic of
China] organized and existing under the laws of the People's
Republic of China (the "EPC Contractor"). For all purposes of
this certificate, (a) capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in Schedule 1 to
the EPC Contractor's and Financing Parties' Acknowledgement and
Consent (the "Acknowledgement and Consent") dated as of the
Closing Date by and among the EPC Contractor, International
Finance Corporation, and Wilmington Trust Company, as Trustee,
and (b) capitalized terms not otherwise defined in Schedule 1 to
the Acknowledgement and Consent shall have the meanings ascribed
to them in the Amended and Restated Contract for the Engineering,
Procurement and Construction of the Upper Bhote Koshi
Hydroelectric Project (the "EPC Contract") dated as of December
19, 1996, by and between the EPC Contractor and Bhote Koshi Power
Company Private Limited. The undersigned HEREBY CERTIFIES
FURTHER as follows:
1. Attached hereto as Exhibit A is a true and complete
copy of the Charter Documents of the EPC Contractor. Such
Charter Documents have not been modified or amended in any
respect and are in full force and effect on the date hereof.
2. The EPC Contractor is a [corporation owned and
controlled by the People's Republic of China] duly incorporated
and registered under the laws of its jurisdiction of
incorporation and registration. The EPC Contractor is duly
authorized to do business in each jurisdiction in which the EPC
Contractor is party to construction contracts. Attached hereto
as Exhibit B are the good standing certificates or equivalent
issued by such jurisdictions. The EPC Contractor is duly
authorized and qualified to conduct business in Nepal.
3. Attached hereto as Exhibit C are true and complete
copies of the resolutions duly adopted by the [board of
directors] of the EPC Contractor authorizing execution, delivery
and performance of the EPC Documents. Such resolutions have not
been modified or amended in any respect and are in full force and
effect on the date hereof.
4. Each of the following persons is a duly elected,
qualified and acting officer of the EPC Contractor, holds the
office or offices in the EPC Contractor indicated opposite his or
her name, and has held such office or offices continuously since
__________, 19___, and the signature appearing opposite his or
her name is his or her genuine signature.
Name Office Signature
5. There is no proceeding seeking the dissolution or
liquidation of the EPC Contractor or threatening the existence of
the EPC Contractor.
6. On the date hereof, there exists no default or event
of default on the part of the EPC Contractor, or, to the actual
knowledge of the EPC Contractor's officers, on the part of any
other party, which has not been cured or waived under any of the
EPC Documents. All conditions to the EPC Contractor's
obligations under the EPC Documents have been fulfilled or
satisfied on or prior to the date hereof.
7. On the date hereof, all of the representations and
warranties of the EPC Contractor contained in any of the EPC
Documents are true and correct in all material respects with the
same force and effect as though such representations or
warranties had been made on and as of the date hereof, except to
the extent that such representations and warranties related only
to a specific date (it being confirmed that such representations
and warranties were true and correct as of such specific date).
WITNESS my hand this _____ day of ____________, 199___.
By:
Title:
The undersigned, the duly elected [Secretary] of the EPC
Contractor, certifies that the above referenced signature is the
true, correct and genuine signature of _____________, the duly
elected ____________ of the EPC Contractor.
By:
[Title]
SCHEDULE 3.1(j)
CERTIFICATE OF INDEPENDENT ENGINEER
THIS CERTIFICATE is delivered pursuant to Section 3.1(j)
of that certain Investment Agreement General Conditions (the
"General Conditions"), dated as of the Closing Date by and among
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED, a private limited
liability company organized and existing under the laws of the
Kingdom of Nepal (the "Company"), INTERNATIONAL FINANCE
CORPORATION, an international organization organized and existing
by virtue of the Articles of Agreement among its member countries
("IFC"), and DEG-DEUTSCHE INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH, a company organized and existing
under the laws of the Federal Republic of Germany ("DEG").
Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in Schedule A of the General Conditions
and the principles of interpretation set forth in such Schedule A
shall apply to this Certificate.
On the date hereof, the undersigned, a duly authorized
representative of Stone & ▇▇▇▇▇▇▇ Engineering Corporation (the
"Independent Engineer"), HEREBY CERTIFIES that:
1. The Independent Engineer has reviewed and finds
acceptable the Disbursement Schedule attached as Schedule
3.1(j)(ii) to the General Conditions.
2. The Independent Engineer has reviewed and finds
reasonable and acceptable the HSE Plan for the construction
period, and has reviewed and finds reasonable and acceptable the
outline of the HSE Plan for the operations phase of the Project,
the detailed outline of the Facility Procedures Manual, the
outline of the Operations and Maintenance Plan and the Company's
arrangements for the Company and the Project (i) to comply with,
and for the implementation of, the EMMP, the Resettlement Plan
and the HSE Plan for the construction period, and (ii) to comply
with all applicable Nepalese environmental laws, statutes, rules
and regulations and all other Environmental Laws.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this ________ day of ______________, 1997.
Stone & ▇▇▇▇▇▇▇ Overseas
Consultants, Inc.
By: ___________________________
Name:
SCHEDULE 3.1(j)(ii)
DISBURSEMENT SCHEDULE
Total
Total Cumula- Current Cumulative Remaining
Budget tive Prior Disbursement Disbursements Budget
Disburse-
ments
EPC Plant and T-Line $46,340,000 $ $9,379,678 $9,379,678 $36,960,322
-
EPC Miscellaneous Change 600,000 - 600,000 600,000 -
Orders
Taxes and Duties 411,000 - 40,687 40,687 370,313
Land and Access Roady 650,000 - 650,000 650,000 -
Preliminary Investigation 2,438,000 - 2,438,000 2,438,000 -
Engineering - Harza 5,290,000 - 2,478,313 2,478,313 2,811,687
Spare Parts and Start-up 1,000,000 - - - 1,000,000
Testing
Development Costs 2,963,000 - 2,963,000 2,963,000 -
Construction Mgmt. & 2,653,000 - 404,417 404,417 2,248,583
Supervision Costs
Legal Fees 3,026,800 - 2,738,800 2,738,800 288,000
Insurance Premiums 1,558,000 - 541,000 541,000 1,017,000
GLOF Survey/Warning System 600,000 - 72,000 72,000 528,000
Environ. Mitigation & 550,000 - 66,000 66,000 484,000
Community Development
Engineering/Consulting 545,000 - 234,841 234,841 310,159
(Lenders)
O&M/Training Costs during 450,000 - - - 450,000
Construction
Contingency 12,228,476 - - - 12,228,476
Working Capital 1,500,000 - - - 1,500,000
Commitment Fee 671,478 - 117,024 117,024 554,454
Financing Fees 2,437,000 - 2,388,197 2,388,197 48,803
Interest During 7,033,246 - 424,636 424,636 6,608,610
Construction, net
Debt Service Reserve 5,300,000 - - 5,300,000
-
TOTAL $98,245,000 $ $25,536,594 $25,536,594 $72,708,406
-
SCHEDULE 3.1(u)
CERTIFICATE OF THE COMPANY
REGARDING THE PROTECTION DEVICES
REQUIRED BY THE PPA
THIS CERTIFICATE is delivered pursuant to Section 3.1(u)
of that certain Investment Agreement General Conditions (the
"General Conditions"), dated as of the Closing Date by and among
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED, a private limited
liability company organized and existing under the laws of the
Kingdom of Nepal (the "Company"), INTERNATIONAL FINANCE
CORPORATION, an international organization organized and existing
by virtue of the Articles of Agreement among its member countries
("IFC"), and DEG-DEUTSCHE INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH, a company organized and existing
under the laws of the Federal Republic of Germany ("DEG").
Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in Schedule A to the General Conditions,
and the principles of interpretation set forth in such Schedule A
shall apply to this Certificate.
The undersigned, [___________________], HEREBY CERTIFIES
that (s)he is the [___________________] of the Company and as
such (s)he is authorized to execute and deliver this Certificate
on behalf of the Company and the undersigned HEREBY CERTIFIES
FURTHER as follows:
All protection devices required under Section 7.4 of the
PPA have been approved by NEA in accordance with such Section
7.4.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this ________ day of ______________, 1997.
By:__________________________________
Title:
The undersigned, the duly elected Secretary of the Company,
certifies that the above-referenced signature is the true,
correct and genuine signature of ____________________________,
the duly elected ________________________________ of the Company.
By:_________________________________
Secretary
SCHEDULE 3.1(x)
CERTIFICATE OF AUTHORIZED OFFICER OF COMPANY CONCERNING
CONDITIONS PRECEDENT TO EACH DISBURSEMENT
THIS CERTIFICATE is delivered pursuant to Section [3.1(x)]
[3.5(q)] of that certain Investment Agreement General Conditions
(the "General Conditions") dated as of the Closing Date among
Bhote Koshi Power Company Private Limited, a private limited
liability company organized and existing under the laws of the
Kingdom of Nepal (the "Company"), International Finance
Corporation, an international organization established by
Articles of Agreement among its member countries ("IFC"), and DEG-
Deutsche Investitions-und Entwicklungsgesellschaft mbH, a company
organized and existing under the laws of the Federal Republic of
Germany ("DEG"). Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in Schedule A to the
General Conditions.
The undersigned HEREBY CERTIFIES that (s)he is an
Authorized Officer of the Company, and as such (s)he is
authorized to execute and deliver this Certificate on behalf of
the Company, and the undersigned FURTHER CERTIFIES, as follows:
1. [Conditions Precedent to Initial Disbursement. All
of the conditions set forth in Article 3, Section 3.1 of the
General Conditions which are required to be satisfied on or
before the date hereof have been satisfied or complied with on or
prior to this date.
(a) Assigned Contracts and Closing Documents.
Attached hereto as Attachments 1-1 through 2-[ ] are true,
complete and correct copies of each of the following Principal
Documents, which comprise all of the Principal Documents existing
on the Financial Closing Date:
[List all contracts to be assigned to the Lenders and
to be provided pursuant to Section 3.1 of the General
Conditions.]
(b) Each of the above-referenced documents has been
duly authorized, executed and delivered by the parties thereto
(such certification as to parties other than the Company[, the
O&M Operator, the Company Engineer, or any Sponsor] [or any of
its Affiliates] is to the best of the Company's knowledge [after
due inquiry]) and is in full force and effect.
(c) All of the conditions precedent under the
Project Agreement and PPA (other than the occurrence of the Loan
Signing Date referred to in Section 3.1 of the PPA) have been
satisfied or waived.
(d) Authorizations. Attached hereto as Attachment 2
are true, complete and correct copies of each Governmental
Approval referenced in Section 3.1(k)(ii) of the General
Conditions.]
2. [Conditions Precedent to Certain Disbursements. All
of the conditions set forth in Article 3, Section 3.2 of the
General Conditions which are required to be satisfied on or
before the date hereof have been satisfied or complied with on or
prior to this date.]
3. [Conditions Precedent to All Disbursements On or
After May 31, 1998. All of the conditions set forth in Article
3, Section 3.3 of the General Conditions which are required to be
satisfied on or before the date hereof have been satisfied or
complied with on or prior to this date.]
4. [Conditions Precedent to Disbursements On or After
the Date Which is 180 Days Prior to the Scheduled First Unit
Delivery Date for the First Unit and to Disbursements On or After
the First Unit Delivery Date. All of the conditions set forth in
Article 3, Section 3.4 of the General Conditions which are
required to be satisfied on or before the date hereof have been
satisfied or complied with on or prior to this date.]
5. Conditions Precedent to All Disbursements. All of
the conditions set forth in Article 3, Section 3.5 of the General
Conditions which are required to be satisfied on or before the
date hereof have been satisfied or complied with on or prior to
this date. The receipt of the Disbursement by the Company will
not result in the violation of any agreement, instrument, note or
contract to which the Company is a party or by which it is bound
or of any law, statute, ordinance, rule, regulation or judgment
to which it is subject, or any Governmental Approval relating to
the Company or the Project.
6. Governmental Approvals.
(a) Attached hereto as Attachment [___] are true,
correct and complete copies of all Governmental Approvals, and
each shareholder's and creditor's permit, license and consent,
including, without limitation, all Repatriation and Remittance
Approvals, and any other consents and approvals, obtained by the
Company, and there are no other Governmental Approvals necessary
for the current stage of implementation of the Project.
(b) All such Governmental Approvals and other
permits, licenses, consents and approvals (i) are in full force
and effect, (ii) have been validly issued in compliance with all
requirements of law and (iii) are not the object of a currently
pending action or appeal.
7. Representations and Warranties. On the date hereof,
all of the representations and warranties of the Company
contained in any of the Principal Documents or in any writing
delivered to the Lenders by the Company are true and correct in
all material respects with the same force and effect as though
such representations or warranties have been made on the date
hereof, except to the extent that such representations and
warranties related only to a specific date.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this _____ day of _________________ 1997
BHOTE KOSHI POWER COMPANY
PRIVATE LIMITED
By:
Name:
Title:
SCHEDULE 4.1(d)
GOVERNMENTAL OR OTHER APPROVALS
REQUIRED PRIOR TO FINANCIAL CLOSING
LICENSE/PERMIT/ REFERENCE
APPROVAL
1. Company Company ▇▇▇ ▇▇▇▇
Registration
2. Production License Section 4 of the Electricity Act,
2049 issued by the Ministry of
Water Resources.
3. Transmission License Section 4 of the Electricity Act,
2049 issued by the Ministry of
Water Resources.
4. Approval to Borrow Sec. 3.1 of the Foreign Investment
from Foreign Lenders and Technology Transfer Act, 2049
and to Invest in issued by the Department of
Share Capital of Industry. Documents to be
Company by Foreign approved: IFC Investment Agreement,
Investors DEG Investment Agreement, All
Equity Subscription Agreements,
Trust and Retention Agreement,
Nepal Agency and Retention
Agreement, Share Retention and
Project Funds Agreement,
Shareholders Agreement, Amended and
Restated Joint Venture Agreement,
O&M Agreement, Share Pledge
Agreement of each Sponsor
Shareholder, Share Pledge Agreement
of each of Soaltee Enterprises
Private Ltd., Soaltee Hotel Ltd.
and Surya Enterprises Private Ltd.
5. Company Income Tax Section 5(a) of the Income Tax Act,
Registration 2031 issued by Kathmandu Tax Office
Certificate
6. Permit to Mortgage Muluki Ain (Civil Code), 2020
Assets of a Nepali issued by the Ministry of Finance.
Company in favor of EDC letter dated November 24, 1997
Foreign Lenders to the Land Revenue Office,
Sindhupalchowk
7. Permit to Open and Sec. 16 of the Foreign Exchange
Maintain Bank (Regulation) Act, 2019 issued by
Accounts in a Foreign the Nepal Rastra Bank.
Country in Foreign
Currency
8. Permit to Open and Sec. 4(a) of the Foreign Exchange
Maintain Bank (Regulation) Act, 2019 issued by
Accounts in Nepal in Nepal Rastra Bank.
Foreign Currency
9. Permit to Pledge Sec. 10 of the Foreign Exchange
Shares of a Nepali (Regulation) Act, 2019 issued by
Company to Foreigners the Nepal Rastra Bank.
10. Permit for a Nepali Foreign Exchange (Regulation) Act,
Shareholder to Invest 2019 issued by Nepal Rastra Bank.
Foreign Currency in a
Nepali Company
11. Exemption from Sec. 11.6 of the Finance Act,
Registration Fee Issued by the Ministry of Finance.
(including Mortgage Nepal Gazette Publication.
Fees)
12. Income Tax For each Contractor as per Section
Registration 5(a) of the Income Tax Act, 2031
Certificate issued by Kathmandu Tax Office.
13. Approval for Change
in Ownership of the
Company (re IFC's
acquisition of shares
in the Company)
14. Permit for HIPC to
open Onshore Dollar
Account
REQUIRED AFTER FINANCIAL CLOSING BY THE EPC CONTRACTOR
LICENSE/PERMIT REFERENCE
APPROVAL
1. Permit to Fell Sec. 22 of the
Trees and Forest Act, 2049
Permits issued by the
regarding District Forest
Timber Office/Department
Excavation of Forest.
2. Permit to Sec. 4 of the
Import, Explosives Act,
Transport and 2012 issued by the
Store Home Ministry.
Explosives
3. Permit to Use Sec. 16(a) of
Roads for Public Roads Act,
Transport of 2031 issued by the
Heavy Loads respective
district units of
the Road
Department.
4. Permit to Issued by the
Import, Ministry of
Install and Communications and
Use the Nepal
Communications Telecommunications
Equipment at Corporation.
the Site
5. Permit to Rule 6 of the
Employ Labor regulation,
Foreigners by 2050 issued by the
the Contractor Department of
Labor.
6. Visas for Rule 8(e) of the
Project Staff Immigration Rules,
2051 issued by the
Immigration
Office.
7. Approvals for
Hedging
Transactions
and Hedging
Documents
SCHEDULE 5.2(c)
CERTIFICATE OF AUTHORIZED OFFICER OF
COMPANY REGARDING AUTHORIZATION TO AUDITORS
[On Bhote Koshi Power Company Private Limited Letterhead]
[Date]
____________________
____________________
____________________
____________________
Re: Upper Bhote Koshi Hydroelectric Project
Gentlemen:
We hereby authorize and request you to give to International
Finance Corporation of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America ("IFC") and DEG-Deutsche
Investitions-und Entwicklungsgesellschaft mbH, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇, ▇-▇▇▇▇▇, ▇▇▇▇▇ (Mungersdorf), Federal Republic of Germany
("DEG") (IFC and DEG hereinafter collectively referred to as the
"Lenders"), all such information as the Lenders may reasonably
request with regard to the financial statements of the
undersigned Company. We have agreed to supply that information
and those statements under the terms of that certain IFC
Investment Agreement between the undersigned Company and IFC
dated as of the Closing Date (the "IFC Investment Agreement") and
under the terms of that certain DEG Investment Agreement between
the undersigned Company and DEG dated as of the Closing Date (the
"DEG Investment Agreement") (the IFC Investment Agreement and the
DEG Investment Agreement are collectively referred to herein as
the "Investment Agreement"). For your information, we enclose a
copy of the Investment Agreement.
We authorize and request you to send two copies of the
audited financial statements of this Company to each of the
Lenders to enable us to satisfy our obligations to each of the
Lenders under Section 5.1 of that certain Investment Agreement
General Conditions dated as of the Closing Date among the
undersigned Company, IFC and DEG. When submitting the same to
the Lenders, please also send at the same time a copy of your
full report on such financial statements.
Please note that under the Investment Agreement, we are
obliged to provide each of the Lenders, among other information,
with a copy of the final version of each management letter sent
by you to the Company or its management commenting on, among
other things, the adequacy of the Company's financial control
procedures and accounting and management information systems. In
addition, we are obliged to provide each of the Lenders with a
report by you certifying that, based upon its audited financial
statements, the Company is in compliance with the financial
covenants contained in the Investment Agreement as at the end of
the relevant Fiscal Year or, as the case may be, detailing any
non-compliance. Please also submit each such communication and
report to each of the Lenders with the audited financial
statements.
Yours truly,
Bhote Koshi Power Company Private Limited
_______________________________
We have read this letter and we agree to abide by the
conditions stated therein.
Certified Accountants
SCHEDULE 6.10(e)
SUBSTANTIAL SUBCONTRACTORS AND SUBSTANTIAL VENDORS
1. Supplied Equipment: Hydraulic Turbine, Inlet Valve,
Generator, Governing System and Excitation System
The name of the Manufacturer: Harbin Electric Machinery
Company Ltd.
Address of the Manufacturer: ▇▇. ▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇. Supplied Equipment: Main Power Transformer
The name of the Manufacturer: Xi'an Electric Manufacturing
Corp., Xi'an Electric Group
Address of the Manufacturer: ▇▇. ▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇'▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇. Supplied Equipment: Gate Equipment
The name of the Manufacturer: Mechanical-Electrical
Installation Company, China Gezhouba Group Corporation
Address of the Manufacturer: ▇▇. ▇▇, ▇▇. ▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ City, Hubei Province
4. Supplied Equipment: Powerhouse and Draft Tube Crane
The name of the Manufacturer: Taiyuan Heavy Machinery Plant
Address of the Manufacturer: ▇▇. ▇▇, ▇▇▇▇ ▇▇▇▇▇▇, Hexi
District, Taiyuan City, Shanxi Province
5. Supplied Equipment: Mobile Crane
The name of the Manufacturer: Xuzhou Heavy Machine Works
Address of the Manufacturer: ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_______________________________
1 As named in the Company's Certificate of Incumbency and
Authority (see Schedule 3.1(i) of the General Conditions).