EXHIBIT NO. 10.155
INVESTMENT NUMBER 7365
Risk Management Facility Agreement
between
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
and
INTERNATIONAL FINANCE CORPORATION
Dated as of the Closing Date
TABLE OF CONTENTS
ARTICLE 1
Definitions
Section 1.2. Interpretation 5
Section 1.3. Business Day Adjustment 6
ARTICLE 2
Risk Management Facility
Section 2.1. Risk Management Facility 6
Section 2.2. Purposes and Criteria 6
Section 2.3. Master Agreement 6
Section 2.4. Front-End Fee; Commitment Fee; Fees
for Eligible Transactions 7
Section 2.5. Calculation of Fees 7
Section 2.6. Security 7
ARTICLE 3
Payments
Section 3.1. Form of Payment 8
Section 3.2. No Deduction for Taxes 8
Section 3.3. Survival of Provisions 8
Section 3.4. Additional Costs, Expenses or Losses 8
Section 3.5. Default Interest 9
ARTICLE 4
Representations and Warranties
Section 4.1. Representations and Warranties 9
Section 4.2. Repetition of Representations 10
Section 4.3. IFC Reliance 10
Section 4.4. Rights and Remedies Not Limited 10
ARTICLE 5
Conditions of Effectiveness
Section 5.1. Initial Conditions 11
Section 5.2. Conditions to all Eligible Transactions 12
Section 5.3. Certificate of BKPC 13
Section 5.4. No Implied Waiver 13
ARTICLE 6
Particular Covenants
Section 6.1. Affirmative Covenants 14
Section 6.2. Negative Covenant 15
Section 6.3. Taxes on Documents 15
ARTICLE 7
Events of Default
Section 7.1. Consequences of Events of Default 15
Section 7.2. Events of Default 16
Section 7.3. Notice of Event 17
Section 7.4. Saving of Rights 17
ARTICLE 8
MISCELLANEOUS
Section 8.1. Communications 17
Section 8.2. Termination of Agreement 18
Section 8.3. English Language 18
Section 8.4. Expenses 19
Section 8.5. Governing Law, Choice of Forum. 19
Section 8.6. General Indemnity 20
Section 8.7. Prohibition and Enforceability 20
Section 8.8. Successors and Assigns 20
Section 8.9. Amendments 21
Section 8.10. Remedies and Waivers 21
Section 8.11. No Other Agreements 21
Section 8.12. Counterparts 21
SCHEDULE 1
Form of Certificate of Bhote Koshi Power Company Private Limited
RISK MANAGEMENT FACILITY AGREEMENT
AGREEMENT dated as of the Closing Date, between BHOTE KOSHI
POWER COMPANY PRIVATE LIMITED ("BKPC") a private limited
liability company organized and existing under the laws of the
Kingdom of Nepal ("Nepal") and INTERNATIONAL FINANCE CORPORATION
("IFC").
WHEREAS:
(A) Pursuant to the terms of that certain IFC Special
Conditions dated as of the date hereof between BKPC and IFC and
that certain Investment Agreement General Conditions dated as of
the date hereof among BKPC, IFC and DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH (the "General Conditions," and
together with the IFC Special Conditions, the "IFC Investment
Agreement"), IFC has agreed, inter alia, to make a loan to BKPC
in the aggregate principal amount of fifty-seven million Dollars
($57,000,000), comprised of an A Loan for IFC's own account in
the principal amount of twenty-one million Dollars ($21,000,000),
and a B Loan for the account of Participants in the principal
amount of thirty-six million Dollars ($36,000,000) for the
purpose and on the terms and conditions set forth in the IFC
Investment Agreement;
(B) BKPC has requested IFC to establish a risk management
facility in favor of BKPC to enable BKPC to engage in risk
management transactions with a final maturity of up to fifteen
(15) years from the date hereof; and
(C) IFC has agreed to make available to BKPC various
financial risk management instruments for the purpose of enabling
BKPC to manage its interest rate exposure, all on the terms and
conditions as set forth in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 General Definitions. Wherever used in this
Agreement and the Schedules hereto, unless the context otherwise
requires, the following terms have the following meanings:
"Aggregate ▇▇▇▇-to-Market Value" means, at the time of
determination, the aggregate of the ▇▇▇▇-to-Market Value of all
Eligible Transactions entered into under the Master Agreement at
such time outstanding;
"Aggregate Risk Exposure" means, at the time of
determination, the aggregate of IFC's Risk Exposures for all
Eligible Transactions entered into under the Master Agreement at
such time outstanding;
"Applicable Rate" means, with respect to any date of
determination, a rate of interest determined by IFC equal to the
aggregate of:
(i) five percent (5%) per annum; plus
(ii) the average, rounded up, if necessary, to the
nearest one-sixteenth (1/16th) of one percent, of the London
Interbank Offered Rates (commonly known as "LIBOR") quoted by
major banks for six-month Dollar deposits on the Dow ▇▇▇▇▇ Market
Screen Page as of 11:00 a.m., London time on such date of
determination, or if such rate cannot be so determined or only
one such bank is quoted on such date, the average of the rates
for such deposits quoted on such date by three (3) such major
banks active in the Eurodollar interbank market in London;
"Auditors" means a firm of independent public accountants as
BKPC may, with the consent of IFC (consent shall be deemed given
by IFC if IFC does not object to a proposed auditor within thirty
(30) days of IFC's receipt of the request for consent accompanied
by adequate supporting documentation), from time to time appoint
as auditors of BKPC. The Auditors shall be capable of auditing
to U.S. GAAP standards.
"Authority" means any government or governmental,
administrative, fiscal, judicial or government-owned body,
department, commission, authority, tribunal, agency or entity;
"Authorization" means any consent, registration, filing,
agreement, notarization, certificate, license, approval, permit,
authority or exemption from, by or with any Authority, whether
given by express action or deemed given by failure to act within
any specified time period and all corporate, creditors' and
shareholders' approvals or consents;
"Authorized Officer" means the officers of BKPC specified in
its Board Resolution delivered to IFC, and, for purposes of
certificates or other documents relating to financial matters,
the financial controller;
"Business Day" means a day on which banks are open for
business in the City of New York, New York, the United States of
America, or any other place that may be specified by IFC for any
particular Eligible Transaction and, for purposes of the
definition of "Applicable Rate", a day on which banks are open
for business in the Eurodollar interbank market in London,
England;
"Closing Date" means December 12, 1997;
"Commitment Period" means the period commencing with the
date of this Agreement and ending on the earlier of
(i) the third anniversary of the date of this
Agreement (or such later date as IFC may designate); or
(ii) the termination date referred to in Section 7.1
(Consequences of Events of Default);
"Confirmation" means, in respect of any Eligible Transaction
entered into under the Master Agreement, the confirmation issued
pursuant to the Master Agreement;
"Dollars" and the sign "$" means the lawful currency of the
United States of America;
"Dow ▇▇▇▇▇ Market Screen Page" means the display of interest
settlement rates (commonly known as LIBOR) for Dollar deposits in
London designated as page 3750 on the service formerly known as
the Dow ▇▇▇▇▇ Telerate Service (or any other page that replaces
3750 and displays London interbank settlement rates for Dollar
deposits);
"Eligible Currency" means, as long as in IFC's judgment the
relevant risk management instrument is readily available to IFC
in the major financial markets in each of these currencies,
Dollars, Deutsche ▇▇▇▇, Japanese Yen, British Pounds, French
Francs, Swiss Francs and Dutch Guilders, and such other
currencies as IFC may agree from time to time;
"Eligible Transaction" means
(i) any transaction which is a rate swap transaction,
a basis swap transaction, a collar transaction, a currency swap
transaction, a cross-currency rate swap transaction, or any other
similar transaction (including any option with respect to any of
these transactions), all in and between Eligible Currencies as
contemplated by the 1991 ISDA Definitions published by the
International Swaps and Derivatives Association, Inc. ("ISDA"),
as modified or amended from time to time by ISDA;
(ii) any combination of these transactions; and
(iii) any other hedging transactions as IFC and
BKPC may from time to time agree;
"Event of Default" means any event specified in Section 7.2;
"Face Value" means
(i) for any Eligible Transaction which is not an
option of another Eligible Transaction, the amount stated in the
Confirmation of the Eligible Transaction as being the "Notional
Amount" or the "Initial Exchange Amount" for that Eligible
Transaction; and
(ii) for any Eligible Transaction which is an option,
the "Notional Amount" or the "Exchange Amount" of the Eligible
Transaction to which that option relates;
"Fiscal Year" means the accounting year of BKPC commencing
each year on July 16 and ending on the following July 15, or such
other period (of at least 52 consecutive weeks) as BKPC with
IFC's consent, from time to time designates as its accounting
year;
"▇▇▇▇-to-Market Value" means, at the time of determination
and with respect to any Eligible Transaction entered into under
the Master Agreement, the amount expressed in Dollars, determined
by IFC in good faith and in accordance with market practice, that
an independent third party would require to be paid to it to
assume the rights and obligations of BKPC under such Eligible
Transaction effective as of such time of determination or, if IFC
determines that an independent third party would not require any
payment to it to assume BKPC's rights and obligations under such
Eligible Transaction, the ▇▇▇▇-to-Market Value shall be zero
($0);
"Master Agreement" means the Master Agreement (Multicurrency-
Crossborder) between BKPC and IFC dated as of the Closing Date
including the Schedule attached thereto and the Confirmations
issued thereunder from time to time, a form of which is attached
as Exhibit A hereto; and as such Agreement may be amended,
supplemented or modified from time to time;
"Operating Guidelines" means a document, prepared by BKPC
and approved by IFC, setting out guidelines for the performance,
by BKPC, of its obligations under this Agreement and otherwise
implementing this Agreement;
"Price" means, with respect to any Eligible Transactions
executed under the Master Agreement, the payment schedule quoted
by IFC to BKPC on an "all-in" basis and specified in the
Confirmation related to such Eligible Transaction, which payment
schedule will reflect IFC's cost of entering into a matching
transaction with a market counterparty and will compensate IFC
for its risk margin, determined by IFC in its sole discretion
with respect to such Eligible Transaction;
"Risk Exposure" means, at the time of determination and with
respect to any Eligible Transaction entered into under the Master
Agreement, an amount, expressed in Dollars, equal to a percentage
of the Face Value of that Eligible Transaction which reflects the
risk to IFC of such Eligible Transaction, as determined by IFC in
its sole discretion and advised to BKPC on or before the trade
date of such Eligible Transaction, such determination being made
using the same methodology as is used from time to time by IFC to
determine the risk of transactions in its portfolio which are
similar to the relevant Eligible Transaction;
"Risk Management Facility" means the facility made available
to BKPC under Article 2;
Section 1.2. Interpretation. In this Agreement, unless the
context otherwise requires:
(a) headings and underlinings are for convenience only and
do not affect the interpretation of this agreement;
(b) words importing the singular include the plural and
vice versa;
(c) words importing a gender include any gender;
(d) an expression importing a natural person includes any
company, partnership, joint venture, association, corporation or
other body corporate and any government agency;
(e) a reference to an Article, Section, party, Annex,
Exhibit or Schedule (other than the Schedule to the Master
Agreement) is a reference to an Article and Section of, and a
party, Annex, Exhibit and Schedule of, this Agreement;
(f) a reference to any statute, regulation, proclamation,
ordinance or by-law includes all statutes, regulations,
proclamations, ordinances or by-laws varying, consolidating or
replacing them, and a reference to a statute includes all
regulations, proclamations, ordinances and by-laws issued under
that statute;
(g) a reference to a document includes an amendment or sup
plement to, or replacement or novation of, that document other
than any amendment, supplement, replacement or novation made in
breach of this agreement;
(h) a reference to a party to any document includes that
party's successors and permitted assigns by this agreement;
(i) the words "include" or "including" do not imply an
exhaustive listing of all things to which the relevant word
relates;
(j) a reference to an agreement includes an undertaking,
deed, agreement or legally enforceable arrangement or under
standing whether or not in writing;
(k) a reference to a document includes any agreement in
writing, or any certificate, notice, instrument, or other
document of any kind; and
(l) no rule of construction applies to the disadvantage of
a party because that party was responsible for the preparation of
this agreement or any part of it.
Section 1.3. Business Day Adjustment.
(a) Subject to subsection (b) below, where the day on or by
which an act or obligation is to be performed or a payment is due
to be made under this Agreement is not a Business Day, such
performance or payment must be done or made on or by the next
succeeding Business Day; and in the case of interest, fees and
charges, those amounts continue to accrue for the period from and
including that due date to that next succeeding Business Day.
(b) Notwithstanding subsection (a), (i) if the effect of
applying subsection (a) would be for the relevant performance to
be done or payment due as the case may be in a different calendar
month, that performance or payment must be made on the Business
Day preceding the due date; and (ii) if there is a conflict
between any Business Day Adjustment in accordance with this
Section 1.3 and a business day adjustment provided under the
Master Agreement, then the provision under the Master Agreement
shall govern.
ARTICLE 2
Risk Management Facility
Section 2.1. Risk Management Facility. Subject to the terms
and conditions of this Agreement, IFC hereby establishes the Risk
Management Facility under which it will enter into Eligible
Transactions with BKPC as agreed by IFC.
Section 2.2. Purposes and Criteria. The Risk Management
Facility may be used only by BKPC and only for the purpose of its
financial risk management and genuine hedging operations of BKPC,
and not for any speculative purpose (as determined by IFC in its
sole discretion). Each Eligible Transaction will be reviewed and
approved by IFC in accordance with the provisions of this
Agreement.
Section 2.3. Master Agreement. All Eligible Transactions
with IFC shall be executed pursuant to the Master Agreement.
Section 2.4. Front-End Fee; Commitment Fee; Fees for
Eligible Transactions. BKPC shall pay the following fees in
respect of the Risk Management Facility and each Eligible
Transaction with IFC:
(a) Front-End Fee. Upon execution and delivery of this
Agreement, BKPC shall pay to IFC a front-end fee in the amount of
twenty-five thousand Dollars (US$25,000).
(b) Commitment Fee. During the Commitment Period, BKPC
shall pay IFC in arrears an annual commitment fee equal to one
quarter of one per cent (0.25%) of the unused portion of the
Facility, i.e., an amount representing the average daily
difference between three million Dollars ($3,000,000) and the
Aggregate Risk Exposure outstanding during the covered period, as
determined by IFC and advised to BKPC from time to time. The
Commitment Fee shall begin to accrue upon execution and delivery
of this Agreement and shall be payable in Dollars annually on
each anniversary of such date. The Commitment Fee for any period
less than a year shall accrue and be prorated on the basis of a
360-day year for the actual number of days elapsed.
(c) Transaction Fees. With respect to each Eligible Transac
tion, BKPC shall pay the Price advised to BKPC not later than the
trade date of such Eligible Transaction, payable in such amounts
and currency and on such payment dates as are specified in the
Confirmation issued in respect of such Eligible Transaction under
the Master Agreement.
Section 2.5. Calculation of Fees. Any and all fees payable
hereunder (other than payments in connection with Eligible
Transactions specified in the related Confirmation issued under
the Master Agreement) shall accrue from day to day and, in the
case of annual fees for a period of less than a full year, be pro-
rated on the basis of a 360-day year for the actual number of
days elapsed and, unless otherwise specified in this Agreement or
agreed by the parties in writing, shall be payable on the dates
specified herein or in the Confirmation for the relevant Eligible
Transaction.
Section 2.6. Security. BKPC acknowledges and agrees that,
to secure the prompt and complete payment and performance when
due of BKPC's obligations (now existing or hereafter arising)
hereunder, BKPC has granted to IFC a security interest and lien
in and to all of the same property and assets of BKPC as
contemplated by the IFC Investment Agreement, which security
interest and lien has been granted pursuant to the Security
Documents, as such term is defined in the IFC Investment
Agreement, and IFC shall be entitled to exercise all rights and
remedies against such Security as contemplated by the IFC
Investment Agreement and the Security Documents.
ARTICLE 3
Payments
Section 3.1. Form of Payment.
(a) BKPC shall pay all amounts due to IFC under this
Agreement in the specified currency in immediately available
funds at such bank in such place as IFC shall designate. If no
currency is specified and IFC does not advise otherwise then all
such payments shall be made in Dollars, in immediately available
funds, at IFC's account at the Citibank N.A., New York, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Account Number 3608-5579 for
the account of International Finance Corporation).
(b) The obligation of BKPC to pay any amount payable under
this Agreement or the Master Agreement in a specified currency
shall not be novated, discharged or satisfied by tender or by
payment (whether or not by recovery under a judgment) in any
other currency, except to the extent to which such tender,
payment or recovery shall result in the effective payment of the
total amount due in the specified currency to IFC's account in
the designated place of payment. Accordingly, the amount (if
any) by which that tender, payment or recovery in a currency
other than the specified currency or Dollars, as the case may be,
falls short of the total amount due to IFC, is and remains due to
IFC as a separate obligation (regardless of any judgment for any
other amounts due under or in respect of this Agreement or the
Master Agreement).
Section 3.2. No Deduction for Taxes. BKPC shall pay all
amounts due under this Agreement or the Master Agreement without
set-off and without deducting any taxes, duties, fees or other
charges of whatever nature. If BKPC is prevented by law or
otherwise from so paying without deduction, then BKPC must
instead pay IFC an increased amount so that, after such
deduction, IFC receives the full amount it would have received
had the payments been made without the deduction.
Section 3.3. Survival of Provisions. BKPC's obligations
under (i) this Article 3 and under Sections 8.4 (Expenses) and
8.6 (General Indemnity) and (ii) the Master Agreement shall
survive the termination of this Agreement.
Section 3.4. Additional Costs, Expenses or Losses. If, as a
result of any failure by BKPC to pay any sums due under this
Agreement or the Master Agreement on the due date therefor IFC
shall incur costs, expenses or losses, BKPC shall promptly pay to
IFC, in Dollars, upon IFC's request, the amount which IFC shall
notify to BKPC as being the aggregate of such costs, expenses and
losses. For the purposes of the preceding sentence, "costs,
expenses or losses" shall include, without limitation, any
interest paid or payable to carry any unpaid amount and any loss,
premium, penalty or expense which may be incurred in liquidating
or employing deposits of or borrowings from third parties in
order to make, maintain or fund IFC's obligation to a market
counterparty in a matched transaction or any portion thereof (but
in the case of a late payment under this Agreement, after
deducting any late payment interest received by IFC in respect
thereof, pursuant to Section 3.5).
Section 3.5. Default Interest. Without prejudice to the reme
dies available to IFC under this Agreement, the Master Agreement,
the IFC Investment Agreement and the Security Documents or
otherwise, if BKPC fails to make any payment on or before its due
date as specified in this Agreement (or, if not so specified, as
notified by IFC to BKPC), BKPC shall pay, in Dollars, upon demand
in respect of the amount of such payment due and unpaid, interest
at the Applicable Rate for such due date or, if such due date is
not a Business Day, for the Business Day immediately preceding
such due date, from the date any such amount became due until the
date of actual payment (as well after as before judgment).
ARTICLE 4
Representations and Warranties
Section 4.1. Representations and Warranties. BKPC represents
and warrants as of the date of this Agreement as follows:
(a) it is a private limited liability Company duly
organized and validly existing under the laws of Nepal and has
the power to own its properties, to conduct its business as
presently conducted, to enter into this Agreement, the Master
Agreement and any Confirmation thereunder and to perform its
obligations hereunder and thereunder;
(b) each of this Agreement, the Master Agreement and any
Confirmation under such Master Agreement has been and, in the
case of each Confirmation will be, duly authorized, and when
executed and delivered by the parties thereto each such Agreement
and Confirmation will constitute the legal, valid and binding
obligations of BKPC, enforceable against BKPC in accordance with
its terms;
(c) neither the making of this Agreement, the Master
Agreement or any Confirmation, nor (when all the consents
referred to in Section 5.1(a) have been obtained) the compliance
with the terms hereof or thereof, nor the performance by BKPC of
its obligations hereunder or thereunder, will conflict with or
result in a breach of any of the terms, conditions or provisions
of, or constitute a default under, any indenture, mortgage,
decree, court or administrative order, agreement or other
instrument or arrangement to which BKPC is a party or by which it
is bound, or require any consent or waiver which has not been
obtained from any Authority or regulatory body having
jurisdiction over BKPC or any of its businesses and activities,
or violate any of the terms or provisions of BKPC's
organizational documents or any judgment, decree or order or any
statute, rule or regulation applicable to BKPC;
(d) that it is and will be acting as principal, and not as
agent for another party, and will be solely responsible for the
decision to enter into the transactions under the Risk Management
Facility; and
(e) that it is fully aware of the risks involved in the
transactions to be entered into under the Risk Management
Facility and it accepts full and sole responsibility for all the
consequences of such transactions.
Section 4.2. Repetition of Representations. The representa
tions and warranties in this Agreement, the Master Agreement and
the IFC Investment Agreement are deemed repeated on the trade
date and the effective date specified in each Confirmation
providing for an Eligible Transaction, except to the extent
amended, supplemented or modified by BKPC in its certificate to
be delivered in accordance with Section 5.3 of this Agreement.
Section 4.3. IFC Reliance.
(a) BKPC acknowledges that it has made the representations
and warranties in or referred to in Section 4.1 (Representations
and Warranties) with the intention of persuading IFC to enter
into this Agreement, the Master Agreement and each Eligible
Transaction, as the case may be, and that IFC is entering into
such Agreements and will enter into such Eligible Transactions on
the basis of, and in full reliance on, each of those
representations and warranties.
(b) BKPC warrants to IFC that each of the representations
and warranties in this Article 4 is true and correct in all
respects as of the date of this Agreement and when repeated
pursuant to Section 4.2, and that none of them omits or will omit
any matter the omission of which makes or will make any of the
representations false or misleading in any material respect.
Section 4.4. Rights and Remedies Not Limited. The rights and
remedies of IFC in relation to any misrepresentation or breach of
warranty on the part of BKPC is not limited by any investigation
by or on behalf of IFC into the affairs of BKPC, by the execution
or the performance of this Agreement, the Master Agreement, or
any Eligible Transaction or by any other act or thing which may
be done by or on behalf of IFC in connection with such Agreements
or such Eligible Transactions and which might, apart from this
Article, limit such rights or remedies.
ARTICLE 5
Conditions of Effectiveness
Section 5.1. Initial Conditions. Subject to Sections 5.2 and
5.3, the obligation of IFC to enter into the initial Eligible
Transaction under the Master Agreement for the benefit of BKPC
shall be subject to the performance by BKPC of all its
obligations to be performed under this Agreement prior to that
date and to the fulfillment, in a manner satisfactory to IFC, of
the following further conditions:
(a) BKPC has obtained, or has made arrangements satisfactory
to IFC for obtaining, all governmental, corporate, creditors' and
other necessary licenses, approvals, waivers or consents for:
(i) the carrying on of the business of BKPC as it is
presently carried on and is contemplated to be carried on;
(ii) the due authorization, execution and delivery of,
and performance under, this Agreement, the Master Agreement and
any Confirmation evidencing an Eligible Transaction under it; and
(iii) the repatriation by IFC, and the remittance
to IFC or its assigns, of all monies payable in respect of this
Agreement and any Eligible Transaction executed under the Master
Agreement in the currency in which the relevant payment is
expressed to be payable;
(b) IFC has received a legal opinion or opinions, in form
and substance satisfactory to it, of counsel in Nepal and the
United States acceptable to IFC, and concurred in by counsel for
BKPC, with respect to:
(i) the organization, existence and operations of BKPC
and its authorized and subscribed share capital;
(ii) the matters referred to in subsection (a) above;
(iii) the authorization, execution, delivery,
legality, validity and enforceability of this Agreement the
Master Agreement, any Confirmation under the Master Agreement and
any other documents in implementation thereof;
(iv) the compliance with all obligations referred to in
Sections 3.2 (No Deduction for Taxes) and 6.3 (Taxes on
Documents);
(v) the priorities or privileges, if any, that
creditors of BKPC, other than IFC, may have by reason of law; and
(vi) such other matters incident to the transactions
contemplated by this Agreement, the Master Agreement or, any
Confirmation under the Master Agreement as IFC reasonably
requests;
(c) the evidence of signature authority and specimen sig
natures referred to in Schedule 3.1(i) of the IFC Investment
Agreement has been supplied to IFC;
(d) organizational arrangements satisfactory to IFC have
been made for the administration of the Risk Management Facility;
(e) receipt of evidence that BKPC has appointed agents for
the service of process pursuant to Section 8.5 and under the
Master Agreement; and
(f) the Conditions Precedent to Initial Disbursement
specified in Section 3.1 of the General Conditions have been
satisfied or waived.
Section 5.2. Conditions to all Eligible Transactions. The
obligation of IFC to enter into any Eligible Transaction under
the Master Agreement is subject to the conditions that:
(a) the Face Value of such Eligible Transaction is not less
than two million Dollars ($2,000,000) or its equivalent, if such
Eligible Transaction does not have an amortizing maturity
schedule, or five million Dollars ($5,000,000) or its equivalent,
if it has an actual or notional amortizing maturity schedule;
(b) the maturity of such Eligible Transaction shall not
exceed fifteen (15) years from the effective date of such
Eligible Transaction and shall not be less than six (6) months
from such effective date;
(c) after giving effect to such Eligible Transaction the
Aggregate Risk Exposure of IFC at such time does not exceed three
million Dollars ($3,000,000) or its equivalent; and the Aggregate
▇▇▇▇-to-Market Value of all Eligible Transactions then
outstanding does not exceed three million Dollars ($3,000,000) or
its equivalent;
(d) the relevant Eligible Transaction is entered into not
later than the third anniversary of the date of this Agreement;
(e) such Eligible Transaction is of the same type as
transactions readily available to IFC in the international swap
or derivatives markets;
(f) BKPC has obtained, or has made arrangements satisfac
tory to IFC for obtaining, all governmental, corporate,
creditors' and other necessary licenses, approvals, waivers or
consents for:
(i) entering into and performing under that Eligible
Transaction; and
(ii) remitting to IFC or its assigns all moneys payable
in respect of that Eligible Transaction in the currency in which
those moneys are expressed to be payable;
(g) no Event of Default and no event which with notice,
lapse of time or both would become an Event of Default in
accordance with Section 7.2 (Events of Default) has occurred and
is continuing;
(h) nothing has occurred which might make it improbable
that BKPC will be able to fulfill or perform any of its obli
gations under this Agreement, the Master Agreement or any
Eligible Transaction, nor shall BKPC have incurred or suffered
any material loss or liability;
(i) the representations and warranties confirmed or made in
Article 4, amended, modified or supplemented as necessary or
appropriate in accordance with Section 4.2, are true and correct
on and as of the trade date and the settlement date of the
Eligible Transaction with the same effect as though such
representations and warranties had been made on and as of that
date (but in the case of Section 4.1(c), without the words in
parentheses); and
(j) after giving effect to the Eligible Transaction, BKPC
will not be in violation of its organizational documents, its
Board authority for entering into Eligible Transactions or any
document to which BKPC is a party (including this Agreement) or
by which it is bound, nor any law, rule or regulation of the
relevant Nepalese Authorities (including, without limitation,
monetary authorities) or otherwise directly or indirectly
limiting or otherwise restricting BKPC's power or authority or
its ability to enter into hedging or risk management
transactions.
Section 5.3. Certificate of BKPC. With each request that IFC
enter into a Eligible Transaction, BKPC must deliver to IFC a
certification, in the form of Schedule 1, with respect to the
foregoing conditions, signed by an authorized representative of
BKPC and expressed to be effective as of the trade date and the
effective date of the relevant Eligible Transaction.
Section 5.4. No Implied Waiver.
(a) No course of dealing or waiver by IFC in connection
with any condition in Sections 5.1 (Initial Conditions), 5.2
(Conditions to all Eligible Transaction) or 5.3 (Certificate of
BKPC) shall impair any right, power or remedy of IFC with respect
to any other condition, or shall be construed to be a waiver of
such other condition. The action of IFC in respect of any such
condition shall not affect or impair any right, power or remedy
of IFC in respect of any other condition.
(b) Unless otherwise notified to BKPC by IFC and without
prejudice to subsection (a) above, the right of IFC to require
compliance with any condition under this Agreement which is
waived by IFC in respect of any Eligible Transaction is expressly
preserved for the purposes of any other Eligible Transaction.
ARTICLE 6
Particular Covenants
Section 6.1. Affirmative Covenants. Unless IFC otherwise
agrees, BKPC shall:
(a) utilize the Risk Management Facility and any Eligible
Transaction thereunder, exclusively to manage BKPC's interest
rate and other financial risks permitted under Section 2.2, and
not for any speculative purpose;
(b) comply with the particular covenants enumerated in
Section 5.2 of the General Conditions which are hereby
incorporated herein by reference;
(c) furnish promptly to IFC such information as IFC may
from time to time reasonably request;
(d) obtain and maintain in force (or where appropriate,
promptly renew) all licenses, approvals, waivers or consents
necessary for carrying out its obligations under this Agreement,
the Master Agreement, each Eligible Transaction, and BKPC's
business and operations generally;
(e) perform and observe all the conditions and restrictions
contained in, or imposed on BKPC by, any such licenses,
approvals, waivers or consents;
(f) as soon as practicable, after becoming available,
furnish to IFC a copy of the minutes of all its shareholders'
meetings in which resolutions are taken involving any action
materially and adversely affecting the ability of BKPC to meet
its obligations under this Agreement, the Master Agreement or in
connection with any Eligible Transaction at such time
outstanding;
(g) promptly inform IFC of any proposed changes in the
nature or scope of the business or operations of BKPC, of any
notice, claim or demand from creditors of BKPC pursuant to
applicable provisions of the Nepalese Bankruptcy Code (or similar
or successor provisions under such legislation or a similar or
successor legislation) and decrees or regulations thereunder
received by BKPC (whether or not such notice, claim or demand has
merit), which would result in or could potentially result in the
initiation of a bankruptcy or insolvency proceeding against BKPC
and of any event or condition which might materially and
adversely affect the carrying on of BKPC's business or operations
(including without limitation any action by BKPC's management to
initiate or which could result in the initiation of a bankruptcy
or insolvency proceeding of BKPC).
Section 6.2. Negative Covenant. Unless IFC otherwise con
sents, which consent will not be unreasonably withheld, BKPC
shall not:
(a) change the nature of its present business or operations
in any manner which would be inconsistent with the provisions of
this Agreement or the Master Agreement and would adversely affect
the ability of BKPC to perform its obligations under this
Agreement, the BKPC Master Agreement, or any Eligible Transaction
at any time outstanding; or
(b) change its organizational documents in any manner which
would be inconsistent with the provisions of this Agreement or
the Master Agreement.
Section 6.3. Taxes on Documents.
(a) BKPC must pay all taxes (including stamp taxes),
duties, fees or other charges, if any, payable on or in
connection with the execution, issue, delivery, registration or
notarization of this Agreement, the Master Agreement and any
Eligible Transaction and must, upon notice from IFC, reimburse
IFC or its assigns for any such taxes, duties, fees or other
charges paid by IFC or its assigns.
(b) BKPC must pay all present and future taxes, duties,
fees and all other charges of any nature, if any, levied or
imposed by His Majesty's Government of Nepal on or in connection
with the payment of any and all amounts due IFC under this
Agreement or the Master Agreement.
ARTICLE 7
Events of Default
Section 7.1. Consequences of Events of Default. Without
limiting IFC's rights under the Master Agreement, if an Event of
Default occurs and is continuing IFC may, (i) by notice to BKPC,
cancel its commitments to enter into Eligible Transactions from
the termination date specified in that notice and from that date
IFC shall have no further obligations under this Agreement; and
(ii) exercise all rights and remedies against the Security
granted herein and pursuant to the Security Documents, as such
rights and remedies are set forth in the IFC Investment Agreement
and the Security Documents.
Section 7.2. Events of Default. It is an Event of Default if:
(a) BKPC fails to pay any amount payable under this
Agreement or the Master Agreement when due and such failure shall
have continued unremedied for three (3) Business Days after
notice;
(b) BKPC fails to perform any of its other obligations
under this Agreement or any other agreement between BKPC and IFC
(including the Master Agreement or any Eligible Transaction
thereunder), and any such failure continues for a period of
thirty (30) days after IFC notifies BKPC of that failure;
(c) any representation or warranty confirmed or made in
Article 4 or in connection with the execution and delivery of
this Agreement, as amended, modified or supplemented as provided
in Section 4.2, is found to have been incorrect in any material
respect;
(d) any Authority condemns, nationalizes, seizes, or
otherwise expropriates all or any substantial part of the
property or other assets of BKPC or of its share capital or
assumes custody or control of such property or other assets or of
the business or operations of BKPC or of its share capital or
takes any action for the dissolution or disestablishment of BKPC
or any action that would prevent BKPC or its officers from
carrying on all or a substantial part of its business or
operations;
(e) any Authorization necessary or required in respect of
this Agreement, the Master Agreement or any Eligible Transaction
thereunder is rescinded, terminated, not available, lapses or
otherwise ceases to be of full force and effect, including in
respect of the remittance to IFC or its assigns in Dollars or
other specified currencies of any amounts payable under any such
document;
(f) any material Authorization necessary or required to
permit BKPC to own its properties or carry out its principal
business is rescinded, terminated, not available, lapses or
otherwise ceases to be in full force or effect;
(g) BKPC changes its organizational documents in any manner
which would be inconsistent with the provisions of this Agreement
or the Master Agreement or would adversely affect the ability of
BKPC to perform its obligations under this Agreement, the Master
Agreement or any Eligible Transaction thereunder;
(h) BKPC changes the nature of its present business or
operations in any manner which would be inconsistent with the
provisions of this Agreement or the Master Agreement or would
adversely affect the ability of BKPC to perform its obligations
under this Agreement, the Master Agreement or any Eligible
Transaction thereunder;
(i) notwithstanding anything in this Section 7.2 to the
contrary, including without limitation any grace period specified
herein otherwise applicable thereto, there exists and is
continuing any "Event of Default" or "Potential Event of Default"
(as such expressions are defined in the Master Agreement) under
the Master Agreement or any Eligible Transaction; or
(j) there exists an Event of Default (as such term is
defined in the IFC Investment Agreement) under the IFC Investment
Agreement or any Security Document.
Section 7.3. Notice of Event. If any Event of Default or any
event which, with lapse of time or notice or both, would become
an Event of Default happens, BKPC must immediately notify IFC by
telex or facsimile specifying the nature of that Event of Default
or other event and any steps BKPC is taking to remedy the same.
Section 7.4. Saving of Rights. No course of dealing and no
delay in exercising, or omission to exercise, any right, power or
remedy accruing to IFC upon any default under this Agreement or
the Master Agreement shall impair any such right, power or remedy
or may be construed to be a waiver thereof or an acquiescence
therein. No action or acquiescence of IFC in respect of any such
default shall affect or impair any right, power or remedy of IFC
in respect of any other default.
ARTICLE 8
Miscellaneous
Section 8.1. Communications. Any notice, request or other
communication to be given or made under this Agreement to any
party must be in writing. Subject to Section 7.3 (Notice of
Event), the notice, request or other communication may be
delivered by hand, registered mail, facsimile or telex to the
party's address specified below or at any other address that
party notifies to the other party from time to time.
For BKPC:
c/o Panda Energy International, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
For IFC:
International Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Attention: Director, Treasury Department
(Client Risk Management Unit)
Cable: CORINTFIN
Washington, D.C.
Telex: 248423 - World Bank
64145 - World Bank
197688 - World Bank
82987 - World Bank
Facsimile: Treasury: (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.2. Termination of Agreement. Notwithstanding the
expiration of the Commitment Period and subject to Section 3.3 of
this Agreement, this Agreement shall remain in full force and
effect until all Eligible Transactions have been terminated in
accordance with the Master Agreement.
Section 8.3. English Language. All documents to be furnished
or communications to be given or made under this Agreement must
be in the English language or, if in another language, must be
accompanied by a translation into English certified by a
representative of BKPC, which will be the governing version
between BKPC and IFC.
Section 8.4. Expenses. BKPC must pay to IFC, or as IFC
directs:
(a) upon demand, all fees and expenses of IFC's local
counsel in Nepal and other professional fees, and all incidental
fees and expenses incurred in connection with:
(i) the preparation, execution and delivery of this
Agreement and the Master Agreement;
(ii) the opinions required by IFC hereunder;
(iii) the preparation, execution and, as relevant,
notarization, consularization, translation and registration of
this Agreement, the Master Agreement and any other documents
related to this Agreement; and
(iv) any amendment or modification to, or waiver under,
this Agreement, the Master Agreement or any such other document.
(b) If any amount owing to IFC under this Agreement or the
Master Swap Transaction or in connection with transactions
contemplated hereunder or thereunder shall be collected through
any process of law or shall be placed in the hands of attorneys
for collection, BKPC shall pay reasonable attorneys' and other
fees and expenses incurred in respect of such collection.
Section 8.5. Governing Law, Choice of Forum.
(a) This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York,
without regard to the conflicts of laws provisions thereof (other
than Sections 5-1401 and 5-1402 of the New York General
Obligations Law).
(b) For the benefit of IFC, BKPC:
(i) irrevocably agrees that any legal action or
proceeding arising out of or relating to this Agreement or the
Master Agreement may be brought and enforced in the courts of the
State of New York and hereby irrevocably submits to such
jurisdiction;
(ii) hereby designates, appoints, and empowers CT
Corporation System, with offices on the date hereof at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its authorized agent to
receive service of process and any other legal summons in the
City of New York for purposes of any such action or proceeding;
(iii) irrevocably consents to the service of
process or any other legal summons out of said courts by mailing
copies thereof by registered airmail postage prepaid to the
address specified herein;
(iv) irrevocably agrees that final judgment against it
in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive
evidence of the fact; and
(v) irrevocably agrees that nothing herein shall
affect the right of IFC to commence legal action or proceedings
or otherwise ▇▇▇ it in any other country which may have
jurisdiction (including the courts of New York to whose
jurisdiction BKPC irrevocably submits), or to serve process upon
it in any manner authorized by the laws of any such jurisdiction.
Section 8.6. General Indemnity.
(a) BKPC shall indemnify and will keep indemnified, IFC,
its officers, directors, employees and/or agents against any
action, damage, loss, liability, cost, charge, expense, or
payments (including legal fees and expenses) which IFC, or any
such person, pays, suffers or incurs or is liable for, in respect
of any of the following:
(i) the occurrence of any Event of Default or any
event which, with notice, lapse of time or both would become an
Event of Default in accordance with Section 7.2 (Events of
Default);
(ii) IFC exercising its rights or powers consequent
upon or arising out of the occurrence of any Event of Default or
other event.
(b) BKPC shall pay and reimburse IFC for all costs and
expenses in relation to the enforcement or protection or
attempted enforcement or protection of any of IFC's rights under
this Agreement and/or the Master Agreement including, but not
limited to, external legal costs and expenses and any pro
fessional consultants fees on a full indemnified basis.
Section 8.7. Prohibition and Enforceability. Any provision
of, or the application of any provision of, this Agreement which
is void, illegal, or unenforceable in any jurisdiction does not
affect the validity, legality or enforceability of that provision
in any other jurisdiction.
Section 8.8. Successors and Assigns. This Agreement binds
and benefits the respective successors and assigns of its
parties, except that BKPC may not assign or delegate any of its
rights or obligations under this Agreement.
Section 8.9. Amendments. No variation of any term of this
Agreement or amendments thereto shall be effective except in
writing and signed by the parties.
Section 8.10. Remedies and Waivers. No failure or delay by
IFC in exercising any power, remedy, discretion, authority or
other rights under this Agreement or the Master Agreement shall
impair or constitute a waiver in respect of that or any other
right. No single or partial exercise of such a right, precludes
its additional or future exercise. No waiver by IFC of any right
under this Agreement or the Master Agreement shall constitute a
waiver of any other right under this Agreement or the Master
Agreement. All waivers or consents given under this Agreement
must be in writing.
Section 8.11. No Other Agreements. This Agreement and the
Master Agreement (including without limitation, the Schedules
hereto and thereto), together with the related letter agreement
dated the date hereof between BKPC and IFC, contain the entire
agreement of BKPC and IFC relating to its subject matter and
supersede all oral statements and prior writings concerning that
subject matter.
Section 8.12. Counterparts. This Agreement may be executed
in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto, acting through their
duly authorized representatives, have caused this Agreement to be
signed in their respective names, as of the date first above
written.
BHOTE KOSHI POWER COMPANY
PRIVATE LIMITED
By:________________________________
Authorized Representative
INTERNATIONAL FINANCE
CORPORATION
By:________________________________
Authorized Representative
SCHEDULE 1
Page 1 of 2
Form of Certificate of Bhote Koshi Power Company Private Limited
(as referred to in Section 5.3 of the
Risk Management Facility Agreement)
[LETTERHEAD OF BHOTE KOSHI POWER COMPANY PRIVATE LIMITED]
[Date]
International Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Dear Sirs:
Certificate of BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
1. Please refer to the Risk Management Facility Agreement
signed between us, dated as of the Closing Date (the "Risk
Management Facility Agreement").
2. Expressions defined in the Risk Management Facility
Agreement shall bear the same meaning herein.
3. Pursuant to BKPC's request that IFC enter into an Eligible
Transaction with BKPC and for the purpose of Article 5 of the
Risk Management Facility Agreement, BKPC hereby certifies that
all conditions to the obligation of IFC to enter into the
Eligible Transaction set forth in Sections 5.1 and 5.2 of the
Risk Management Facility Agreement, have been and remain
satisfied.
SCHEDULE 1
Page 2 of 2
4. The certification in paragraph 3 above is effective as of
the date of this Confirmation and will continue to be effective
as of the effective date of the relevant Eligible Transaction. If
the certification is no longer valid, BKPC will immediately
notify IFC.
Yours faithfully,
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By ________________________
Authorized Representative1
_______________________________
1 As named in BKOC's Certificate of Incumbency and
Authority.