EXHIBIT 10.06
SECURITY AGREEMENT
Between
PANDA CAYMAN INTERFUNDING COMPANY,
as Debtor
and
PANDA INTERFUNDING CORPORATION, as Secured Party
Dated as of July 31, 1996
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made as of
July 31, 1996, by Panda Cayman Interfunding Company, a Cayman
Islands exempted company with a principal address in care of
▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇▇▇▇ House, South Church Street, Grand
Cayman, Cayman Islands, British West Indies ("Debtor"); for Panda
Interfunding Corporation, with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (as hereinafter defined)
and for the Letter of Credit Provider (as hereinafter defined),
if any, (collectively, the "Secured Party").
RECITALS
A. On even date herewith, the Secured Party and Panda
Funding Corporation, a Delaware corporation (hereinafter called
"Panda Funding"), and Bankers Trust Company, a New York banking
corporation, as Trustee (hereinafter called the "Trustee") are
executing a Trust Indenture (such agreement, as may from time to
time be amended, supplemented or otherwise modified, being
hereinafter called the "Indenture") providing, subject to the
terms and conditions stated therein, for the issuance by Panda
Funding from time to time of certain Pooled Project Bonds (the
"Bonds"), including without limitation, $105,525,000 in initial
aggregate principal amount of 11 5/8% Pooled Project Bonds,
Series A due 2012 (the "Series A Bonds").
B. Panda Funding will loan the entire proceeds of the
issuance of the Series A Bonds to the Secured Party (the "PIC
Loan"), which Loan will be made under a Loan Agreement dated as
of even date with this Agreement by and between Panda Funding and
Secured Party (the "PIC Loan Agreement") and evidenced by a
promissory note (the "Initial PIC Note") of Secured Party dated
July 31, 1996, and payable to Panda Funding.
C. Panda Funding may from time to time loan the proceeds
of subsequent series of Bonds (the "Additional PIC Loans") to the
Secured Party, which Additional Loans will be made under the PIC
Loan Agreement and evidenced by promissory notes of Secured Party
payable to Panda Funding (the "Additional PIC Notes").
D. The Secured Party and Debtor have entered into a Loan
Agreement dated as of July 31, 1996 (the "Cayman Loan
Agreement"), pursuant to which the Secured Party may from time to
time make loans to Debtor.
E. The Secured Party, as a precondition to making any
loans under the Cayman Loan Agreement requires that Debtor
execute and deliver this Agreement.
G. To induce the purchase from time to time of the Bonds,
which Debtor acknowledges is of substantial benefit to it (as
the ultimate recipient of the proceeds of the Bonds in the form
of the Loans pursuant to the Cayman Loan Agreement) and to secure
Debtor's obligations to Secured Party under the Cayman Loan
Agreement, Debtor desires to enter into this Agreement with
Secured Party.
H. It is a condition precedent to the issuance and
purchase of the Series A Bonds that Debtor shall have pledged the
Collateral as defined in this Agreement to the Secured Party.
I. Therefore, in order to comply with the terms and
conditions of the Cayman Loan Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Debtor hereby agrees with the Secured Party
as follows:
ARTICLE 1
SECURITY INTEREST
Section 1.01 Grant of Security Interest. Debtor hereby
pledges, assigns and grants to the Secured Party a security
interest in and right of set-off against all of the Debtor's
right, title and interest in the assets referred to in
Section 1.02 (the "Collateral") to secure the prompt payment and
performance of the "Obligations" (as defined in Section 2.02) and
the performance by Debtor of this Agreement.
Section 1.02 Collateral. The Collateral consists of the
following types or items of property:
(a) All of Debtor's rights and interests in the
following International Accounts and Funds established
under the Indenture: the International Project Account; the
International Distribution Suspense Fund; the International
Mandatory Redemption Account; and the International
Extraordinary Distribution Account (all as defined in the
Indenture);
(b) (i) All deposit accounts, passbooks, certificates
of deposit, commercial paper and other instruments relating
to the Accounts and Funds referred to in this Section 1.02;
(ii) all sums now or at any time hereafter on deposit in
such Accounts or Funds or evidenced by such passbooks,
certificates of deposit or other instruments; (iii) any and
all renewals, rearrangements or reissues thereof, whether
in respect of the value thereof, interest paid thereon,
dividends declared thereon or otherwise together with all
shares, deposits and interests of every kind of Debtor
therein and all investments made therefrom; and (iv) all
interest, dividends, income and profits from any of the
property referred to in Section 1.02(a) and other sums due
or to become due on account of any of the property referred
to in Section 1.02(a);
(c) All of Debtor's rights and interest in and to (i)
all distributions and other amounts received by any PIC
International Entity or any other Person on behalf of any
PIC International Entity from, or in connection with, the
Non-U.S. Projects that may be legally distributed or paid
to any PIC International Entity without contravention of
any Project Agreement, including (A) all distributions,
either directly or indirectly, from International Project
Entities to any PIC International Entity and (B) all
amounts received by any PIC International Entity or any
other Person on behalf of any PIC International Entity in
respect of such PIC International Entity's investments in
or loans to International Project Entities, in each case
other than Extraordinary Financial Distributions and
distributions received by or on behalf of any PIC
International Entity that are required to be deposited in
the International Mandatory Redemption Account pursuant to
Section 4.8(a) and (ii) all interest earned on the amounts
on deposit in the International Accounts and Funds, but
only to the extent such interest has been received.
(d) All of the Debtor's general intangibles relating
to the Debtor's personal property described in Sections
1.02(c) and (d) above, including, without limitation, any
of the foregoing which may be more specifically indicated
in the remainder of this Section 1.02.
(e) (i) Any related or additional property from time
to time delivered to or deposited by or for the account of
Debtor; (ii) all property used or usable in connection with
any property referred to in this Section 1.02; (iii) all
proceeds, replacements, additions to and substitutions for
any of the property referred to in this Section 1.02 and
claims against third parties; and (iv) all books and
records related to any of the property referred to in this
Section 1.02.
(f) All general intangibles related to any property
referred to in this Section 1.02, including, without
limitation, all (i) letters of credit, bonds, guaranties,
purchase or sales agreements and other contractual rights,
rights to performance, and claims for damages, refunds
(including tax refunds) or other monies due or to become
due; (ii) orders, franchises, permits, certificates,
licenses, consents, exemptions, variances, authorizations
or other approvals by any governmental agency or court;
(iii) business records, computer tapes and computer
software; (iv) goodwill; and (v) other intangible personal
property, whether similar or dissimilar to the property
referred to in this Section 1.02.
It is expressly contemplated that additional securities or other
property may from time to time be pledged, assigned or granted to
Secured Party as additional security for the Obligations, and the
term "Collateral" as used herein shall be deemed for all purposes
hereof to include all such additional securities and property,
together with all other property of the types described above
related thereto.
Section 1.03 Transfer of Collateral. All passbooks,
certificates of deposit and instruments representing or
evidencing the Collateral shall be delivered to the Secured
Party.
Section 1.04 Institutions Holding Deposits. If the
Collateral consists of any deposit accounts, passbooks,
certificates of deposit or other instruments issued by one or
more depository institutions other than the Secured Party
("Institutions"), then the remaining provisions contained in this
Section 1.04 shall apply. Debtor hereby irrevocably authorizes
and directs each Institution to hold such Collateral as bailee
and custodian for the benefit of the Secured Party, to indicate
on such Institution's records this assignment of the Collateral
in favor of the Secured Party, with information concerning the
amount on deposit in the accounts, passbooks, certificates of
deposit and other instruments constituting such Collateral,
(without notice to or further consent from Debtor) to deliver to
the Secured Party any or all funds representing such Collateral.
The Institutions shall have no duty to make any inquiry as to the
status of or the amount owing in respect of the Obligations.
Debtor hereby agrees to indemnify each Institution and hold it
harmless from all expenses and losses it incurs or suffers as a
result of any delivery to the Secured Party of funds in respect
of such Collateral. The Secured Party is authorized to notify
the Institutions of the Secured Party's interest in such
Collateral under this Agreement.
ARTICLE 2
DEFINITIONS
Section 2.01 Terms Defined Above. As used in this
Agreement, the terms defined above shall have the meanings
respectively assigned to them. Other capitalized terms that are
defined in the Cayman Loan Agreement but that are not defined
herein shall have the same meanings as defined in the Cayman Loan
Agreement.
Section 2.02 Certain Definitions. As used in this
Agreement, the following terms shall have the following meanings,
unless the context otherwise requires:
"Agreement" means this Security Agreement, as the same
may from time to time be amended or supplemented.
"Code" means the Uniform Commercial Code as presently
in effect in the State of New York. Unless otherwise
indicated by the context herein, all uncapitalized terms
which are defined in the Code shall have their respective
meanings as used in Articles 8 and 9 of the Code.
"Event of Default" means any event specified in the
Cayman Loan Agreement.
"Highest Lawful Rate" means the lesser of 15% per
annum and the maximum rate of nonusurious interest allowed
from time to time by applicable law.
"Obligations" means all indebtedness, liabilities and
other obligations of Debtor (including, but not limited to,
all such obligations in respect of principal, premiums,
interest, fees, penalties, indemnities, costs and other
expenses, whether due after acceleration or otherwise) to
the Secured Party (of whatsoever nature and howsoever
evidenced) under and pursuant to the Cayman Loan Agreement,
the Notes and this Agreement, in each case, direct or
indirect, primary or secondary, fixed or contingent, now or
hereafter arising therefrom or relating thereto.
"Obligor" means any Person, other than Debtor, liable
(whether directly or indirectly, primarily or secondarily)
for the payment or performance of any of the Obligations
whether as maker, co-maker, endorser, guarantor,
accommodation party, general partner or otherwise.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Debtor represents and warrants to the Secured Party (which
representations and warranties will survive the creation and
payment of the Obligations) that:
Section 3.01 Ownership of Collateral; Encumbrances.
Debtor is the owner of, and has good and marketable title to, the
Collateral free and clear of any Lien except for the pledge and
security interest granted to the Secured Party and Liens for
Taxes not yet due or that are subject to a Good Faith Contest.
No financing statement covering the Collateral is on file in any
public office other than terminated financing statements and the
financing statements filed pursuant to this Agreement or in
connection with the transactions contemplated by the Cayman Loan
Agreement. The Collateral is not subject to any law (except as
may be required in connection with any disposition of the
Collateral by laws affecting the offering and sale of securities
generally) or contractual obligation that would be violated by or
that would prohibit the grant of the security interest in the
Collateral granted pursuant hereto or the disposition of the
Collateral by or to the Secured Party upon the occurrence and
continuance of an Event of Default.
Section 3.02 Debtor. Debtor is an exempted company duly
organized and validly existing under the laws of the Cayman
Islands. Debtor has full power, authority and legal right to
enter into this Agreement and perform hereunder and to pledge and
deliver all of the Collateral pursuant to this Agreement. The
pledge of the Collateral and the granting of a security interest
in the Collateral has been duly authorized by Debtor and this
Agreement has been duly authorized, executed and delivered by
Debtor and constitutes the legal, valid and binding obligation of
Debtor enforceable against Debtor in accordance with its terms
except as enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting creditor's
rights generally and except as enforceability may be limited by
general principles of equity (whether considered in a suit at law
or in equity).
Section 3.03 No Required Consent. No authorization,
consent, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required
that has not been obtained for (i) the due execution, delivery
and performance by Debtor of this Agreement, (ii) the grant by
Debtor of the security interest granted by this Agreement,
(iii) the perfection of such security interest or (iv) the
exercise by the Secured Party of its rights and remedies under
this Agreement
The execution, delivery and performance of this Agreement
will not (i) require any consent or approval of the Board of
Directors or stockholders of Debtor that has not been obtained;
(ii) violate the provisions of Debtor's Memorandum of Association
or Articles of Association; (iii) violate the provisions of any
law (including, without limitation, any usury law), regulation or
order of any governmental authority applicable to Debtor or any
of its subsidiaries; (iv) conflict with, result in a breach or
constitute a default under any agreement relating to the
management or affairs of Debtor or any of its subsidiaries, or
any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which Debtor is a party or by
which Debtor or any of its subsidiaries or any of their material
properties may be bound; or (v) result in or create any Lien
(other than Excepted Liens) under, or require any consent under,
any indenture or loan or credit agreement or any other material
agreement, instrument or award of any governmental authority
binding upon Debtor or any of its subsidiaries or any of their
properties.
Section 3.04 Genuineness of Collateral; Descriptions.
Each deposit account, passbook, certificate of deposit,
commercial paper or other instrument constituting Collateral
hereunder is genuine in all respects and what it purports to be,
and any representation made by Debtor to the Secured Party
concerning the principal balance of and interest, dividends or
other income accrued or payable on the deposit accounts,
passbooks, certificates of deposit, commercial paper or other
instruments representing the Collateral are true and correct.
Section 3.05 First Priority Security Interest. The grant
of the security interest in the Collateral pursuant to this
Agreement creates a valid and enforceable first priority security
interest in the Collateral, enforceable against Debtor and all
third parties and securing payment of the Obligations subject to
no Liens other than the Liens created by this Agreement.
Section 3.06 No Name Changes. Debtor has not, during the
preceding five years, entered into any contract, agreement,
security instrument or other document using a name other than, or
been known by or otherwise used any name other than, the name
used by Debtor herein.
Section 3.07 Location of Debtor. Debtor's chief
executive office and Debtor's records concerning the Collateral
are located at the address or location set forth in the opening
paragraph hereof.
Section 3.08 No Suits. There is no action, suit or
proceeding at law or in equity or by or before any governmental
authority, arbitral tribunal or other body now pending or, to the
best knowledge of Debtor, threatened against Debtor or its
subsidiaries that question the validity or legality of or seeks
damages in connection with this Agreement or any action to be
taken pursuant to this Agreement that could reasonably be
expected to have a material adverse effect on Debtor.
Section 3.09 Regulatory Status. Debtor is not (i) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of
1940, as amended, or (ii) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding
company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended ("PUHCA")
or (iii) a "registered holding company" or a "subsidiary company"
of a "registered holding company" or an "affiliate" of a
"registered holding company" or a "subsidiary company" of a
"registered holding company" within the meaning of PUHCA.
Section 3.10 Benefits. Debtor has derived and will
continue to derive direct and indirect benefits from the
incurrence of its obligations under this Agreement.
Section 3.11 Collateral. All statements or other
information provided by Debtor to the Secured Party describing or
with respect to the Collateral is or (in the case of subsequently
furnished information) will be when provided correct and complete
in all material respects. The delivery at any time by Debtor to
the Secured Party of additional Collateral or of additional
descriptions of Collateral shall constitute a representation and
warranty by Debtor to the Secured Party hereunder that the
representations and warranties of this Article 3 are correct
insofar as they would pertain to such Collateral or the
descriptions thereof.
Section 3.12 Delivery of Letters of Credit. With respect
to any Collateral supported by letters of credit, each of such
letters of credit has been delivered to the Secured Party
(provided that all letters of credit referred to in Section 1.02
shall be subject to the security interest created by this
Agreement irrespective of whether or not such delivery shall have
been made).
ARTICLE 4
COVENANTS AND AGREEMENTS
Debtor will at all times comply with the covenants and
agreements contained in this Article 4, from the date hereof and
for so long as any part of the Obligations are outstanding.
Section 4.01 Change in Location of Debtor. Debtor will
give the Secured Party 30 days' prior written notice of (i) the
opening or closing of any place of Debtor's business or (ii) any
change in the location of Debtor's chief executive office or
address.
Section 4.02 Change in Debtor's Name or Corporate
Structure. Debtor will not change its name, identity or
corporate structure (including, without limitation, any merger,
consolidation or sale of substantially all of its assets) without
notifying the Secured Party of such change in writing at least 30
days prior to the effective date of such change. Without the
express written consent of the Secured Party, however, Debtor
will not engage in any other business or transaction under any
name other than Debtor's name hereunder.
Section 4.03 Delivery of Letters of Credit and
Instruments. Debtor will deliver each letter of credit, if any,
included in the Collateral to Secured Party, in each case
forthwith upon receipt by or for the account of Debtor.
Section 4.04 Sale, Disposition or Encumbrance of
Collateral. Debtor will not in any way encumber any of the
Collateral (or permit or suffer any of the Collateral to be
encumbered) or sell, pledge, assign, lend or otherwise dispose of
or transfer any of the Collateral to or in favor of any Person
other than the Secured Party, except for Excepted Liens. Except
with the prior written consent of the Secured Party or as
permitted pursuant to the terms of the Indenture or the Cayman
Loan Agreement, Debtor will not execute any check, instrument or
other document relating to and will not otherwise make or attempt
to make any withdrawal from any Account, Fund, deposit account,
passbook, certificate of deposit or other instrument evidencing
the Collateral.
Section 4.05 Proceeds of Collateral. Debtor will deliver
to the Secured Party promptly upon receipt all proceeds delivered
to Debtor from the sale or disposition of any Collateral. If
chattel paper, documents or instruments are received as proceeds,
which are required to be delivered to the Secured Party, they
will be, immediately upon receipt, properly endorsed or assigned
and delivered to the Secured Party as Collateral. This
Section 4.05 shall not be construed to permit sales or
dispositions of Collateral except as may be elsewhere expressly
permitted by this Agreement.
Section 4.06 Records and Information. Debtor shall keep
accurate and complete records of the Collateral (including
proceeds, payments, distributions, income and profits). The
Secured Party may at any time have access to, examine, audit,
make extracts from and inspect without hindrance or delay
Debtor's records, files and the Collateral. Debtor will promptly
provide written notice to the Secured Party of all information
which in any way relates to or affects the filing of any
financing statement or other public notices or recordings, or the
delivery and possession of items of Collateral for the purpose of
perfecting a security interest in the Collateral. Debtor will
also promptly furnish such information as the Secured Party may
from time to time reasonably request regarding (i) the business,
affairs or financial condition of Debtor or (ii) the Collateral
or the Secured Party's rights or remedies with respect thereto.
Section 4.07 Reimbursement of Expenses. Debtor will pay
to the Secured Party all advances, charges, costs and expenses
(including, without limitation, all reasonable costs and expenses
of holding, preparing for sale and selling, collecting or
otherwise realizing upon the Collateral if an Event of Default
occurs and all reasonable attorneys' fees, legal expenses and
court costs) incurred by the Secured Party in connection with the
exercise of the Secured Party's rights and remedies hereunder.
Debtor agrees to indemnify and hold the Secured Party harmless
from and against and covenants to defend the Secured Party
against any and all losses, damages, claims, costs, penalties,
liabilities and expenses, including, without limitation, court
costs and attorneys' fees, incurred because of, incident to, or
with respect to the Collateral (including, without limitation,
any exercise of rights or remedies in connection therewith). All
amounts for which Debtor is liable pursuant to this Section 4.07
shall be due and payable by Debtor to the Secured Party upon
demand. If Debtor fails to make such payment upon demand (or if
demand is not made due to an injunction or stay arising from
bankruptcy or other proceedings) and the Secured Party pays such
amount, the same shall be due and payable by Debtor to the
Secured Party, plus interest thereon from the date of Secured
Party's demand (or from the date of the Secured Party's payment
or such Secured Party's payment if demand is not made due to such
proceedings) at the Highest Lawful Rate.
Section 4.08 Further Assurances. Upon the request of the
Secured Party, Debtor shall (at Debtor's expense) execute and
deliver all such assignments, certificates, instruments,
securities, financing statements, notifications to financial
intermediaries, clearing corporations, issuers of securities or
other third parties or other documents and give further
assurances and do all other acts and things as the Secured Party
may reasonably request to perfect the Secured Party's interest in
the Collateral or to protect, enforce or otherwise effect the
Secured Party's rights and remedies hereunder.
Section 4.09 Investments. No investments will be made
from the Collateral except as permitted and directed by the
Indenture and the Cayman Loan Agreement. All income,
distributions, profits and proceeds of such investments shall be
part of the Collateral and may be credited to any deposit account
included in the Collateral.
ARTICLE 5
RIGHTS, DUTIES AND POWERS OF SECURED PARTY
The following rights, duties and powers of the Secured
Party are applicable irrespective of whether an Event of Default
occurs and is continuing:
Section 5.01 Discharge Encumbrances. The Secured Party
may, at its option, discharge any taxes, liens, security
interests or other encumbrances at any time levied or placed on
the Collateral. Debtor agrees to reimburse the Secured Party
upon demand for any payment so made, plus interest thereon from
the date of the Secured Party's demand at the Highest Lawful
Rate.
Section 5.02 Transfer of Collateral. The Secured Party
may transfer any or all of the Obligations, and upon any such
transfer the Secured Party may transfer its interest in any or
all of the Collateral and shall be fully discharged thereafter
from all liability therefor. Any transferee of the Collateral
shall be vested with all rights, powers and remedies of the
Secured Party hereunder.
Section 5.03 Cumulative and Other Rights. The rights,
powers and remedies of the Secured Party hereunder are in
addition to all rights, powers and remedies given by law or in
equity. The exercise by the Secured Party of any one or more of
the rights, powers and remedies herein shall not be construed as
a waiver of any other rights, powers and remedies, including,
without limitation, any other rights of set-off. If any of the
Obligations are given in renewal, extension for any period or
rearrangement, or applied toward the payment of debt secured by
any lien, the Secured Party shall be, and is hereby, subrogated
to all the rights, titles, interests and liens securing the debt
so renewed, extended, rearranged or paid.
Section 5.04 Disclaimer of Certain Duties.
(a) The powers conferred upon the Secured Party by this
Agreement are to protect its interest in the Collateral and shall
not impose any duty upon the Secured Party to exercise any such
powers. Debtor hereby agrees that the Secured Party shall not be
liable for, nor shall the indebtedness evidenced by the
Obligations be diminished by, the Secured Party's delay or
failure to collect upon, foreclose, sell, take possession of or
otherwise obtain value for the Collateral.
(b) The Secured Party shall be under no duty whatsoever
to make or give any presentment, notice of dishonor, protest,
demand for performance, notice of non-performance, notice of
intent to accelerate, notice of acceleration, or other notice or
demand in connection with any Collateral or the Obligations, or
to take any steps necessary to preserve any rights against any
Obligor or other Person. Debtor waives any right of marshaling
in respect of any and all Collateral, and waives any right to
require the Secured Party to proceed against any Obligor or other
Person, exhaust any Collateral or enforce any other remedy which
the Secured Party now has or may hereafter have against any
Obligor or other Person.
Section 5.05 Modification of Obligations; Other Security.
Debtor waives (i) any and all notice of acceptance, creation,
modification, rearrangement, renewal or extension for any period
of any instrument executed by any Obligor in connection with the
Obligations and (ii) any defense of any Obligor by reason of
disability, lack of authorization, cessation of the liability of
any Obligor or for any other reason. Debtor authorizes the
Secured Party, without notice or demand and without any
reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Obligations, from time to
time to (x) take and hold other property, other than the
Collateral, as security for the Obligations, and exchange,
enforce, waive and release any or all of the Collateral,
(y) apply the Collateral in the manner permitted by this
Agreement and (z) renew, extend for any period, accelerate, amend
or modify, supplement, enforce, compromise, settle, waive or
release the obligations of any Obligor or any instrument or
agreement of such other Person with respect to any or all of the
Obligations or Collateral.
Section 5.06 Custody and Preservation of the Collateral.
The Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially
equal to that which comparable Secured Party accord comparable
collateral, it being understood and agreed, however, that neither
the Secured Party shall have responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral,
whether or not the Secured Party has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against Persons or entities with respect to any
Collateral.
ARTICLE 6
REMEDIES
Section 6.01 Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Secured Party may take
any or all of the following actions without notice (except where
expressly required below or in the Indenture) or demand to
Debtor:
(a) Declare all or part of the indebtedness pursuant
to the Obligations immediately due and payable and enforce
payment of the same by Debtor or any Obligor.
(b) Sell, in one or more sales and in one or more
parcels, or otherwise dispose of any or all of the
Collateral in any commercially reasonable manner as the
Secured Party may elect, in a public or private
transaction, at any location as deemed reasonable by the
Secured Party either for cash or credit or for future
delivery at such price as the Secured Party may deem fair,
and (unless prohibited by the Code, as adopted in any
applicable jurisdiction) the Secured Party may be the
purchaser of any or all Collateral so sold and may apply
upon the purchase price therefor any Obligations secured
hereby. Any such sale or transfer by the Secured Party
either to itself or to any other Person shall be absolutely
free from any claim of right by Debtor, including any
equity or right of redemption, stay or appraisal which
Debtor has or may have under any rule of law, regulation or
statute now existing or hereafter adopted. Upon any such
sale or transfer, the Secured Party shall have the right
to deliver, assign and transfer to the purchaser or
transferee thereof the Collateral so sold or transferred.
If the Secured Party deems it advisable to do so, it may
restrict the bidders or purchasers of any such sale or
transfer to Persons or entities who will represent and
agree that they are purchasing the Collateral for their own
account and not with the view to the distribution or resale
of any of the Collateral. The Secured Party may, at its
discretion, provide for a public sale, and any such public
sale shall be held at such time or times within ordinary
business hours and at such place or places as the Secured
Party may fix in the notice of such sale. The Secured
Party shall not be obligated to make any sale pursuant to
any such notice. The Secured Party may, without notice or
publication, adjourn any public or private sale by
announcement at any time and place fixed for such sale, and
such sale may be made at any time or place to which the
same may be so adjourned. If sale or transfer hereunder is
not completed or is defective in the opinion of the Secured
Party, such sale or transfer shall not exhaust the rights
of the Secured Party hereunder, and the Secured Party shall
have the right to cause one or more subsequent sales or
transfers to be made hereunder. If only part of the
Collateral is sold or transferred such that the Obligations
remain outstanding (in whole or in part), the Secured
Party's rights and remedies hereunder shall not be
exhausted, waived or modified, and the Secured Party is
specifically empowered to make one or more successive sales
or transfers until all the Collateral shall be sold or
transferred and all the Obligations are paid. If the
Secured Party elects not to sell the Collateral, the
Secured Party retains its rights to dispose of or utilize
the Collateral or any part or parts thereof in any manner
authorized or permitted by law or in equity, and to apply
the proceeds of the same towards payment of the
Obligations. Each and every method of disposition of the
Collateral described in this subsection or in
subsection (d) shall constitute disposition in a
commercially reasonable manner.
(c) Take possession of all books and records of
Debtor pertaining to the Collateral. The Secured Party
shall have the authority to enter upon any real property or
improvements thereon in order to obtain any such books or
records, or any Collateral located thereon, and remove the
same therefrom without liability.
(d) Apply proceeds of the disposition of the
Collateral to the Obligations in any manner elected by the
Secured Party and permitted by the Code or otherwise
permitted by law or in equity. Such application may
include, without limitation, the reasonable attorneys' fees
and legal expenses incurred by the Secured Party.
(e) Appoint any Person as agent to perform any act or
acts necessary or incident to any sale or transfer by the
Secured Party of the Collateral.
(f) Receive or withdraw any or all funds in any
Accounts or Funds or any deposit account, passbook,
certificate of deposit, commercial paper or other
instrument representing the Collateral and apply such funds
towards the Obligations.
(g) Receive, change the address for delivery, open
and dispose of mail addressed to Debtor, and to execute,
assign and endorse negotiable and other instruments for the
payment of money, documents of title or other evidences of
payment, shipment or storage for any form of Collateral on
behalf of and in the name of Debtor.
(h) Exercise all other rights and remedies permitted
by law or in equity.
Section 6.02 Attorney-in-Fact. Debtor hereby irrevocably
appoints the Secured Party as Debtor's attorney-in-fact, with
full authority in the place and stead of Debtor and in the name
of Debtor or otherwise, from time to time in the Secured Party's
discretion upon the occurrence and during the continuance of an
Event of Default, but at Debtor's cost and expense and without
notice to Debtor, to take any action and to execute any
assignment, certificate, financing statement, stock power,
notification, document or instrument that the Secured Party may
deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, to receive, endorse and
collect all instruments made payable to Debtor representing any
dividend, interest payment or other distribution in respect of
the Collateral or any part thereof and to give full discharge for
the same.
Section 6.03 Liability for Deficiency. If any sale or
other disposition of Collateral by the Secured Party or any
other action of the Secured Party hereunder results in reduction
of the Obligations, such action will not release Debtor from its
liability to the Secured Party for any unpaid Obligations,
including costs, charges and expenses incurred in the liquidation
of Collateral, together with interest thereon, and the same shall
be immediately due and payable to the Secured Party at the
Secured Party's address set forth in the opening paragraph
hereof.
Section 6.04 Reasonable Notice. If any applicable
provision of any law requires the Secured Party to give
reasonable notice of any sale or disposition or other action,
Debtor hereby agrees that five days' prior written notice shall
constitute reasonable notice thereof. Such notice, in the case
of public sale, shall state the time and place fixed for such
sale and, in the case of private sale, the time after which such
sale is to be made.
Section 6.05 Non-judicial Enforcement. The Secured Party
may enforce its rights hereunder without prior judicial process
or judicial hearing, and to the extent permitted by law Debtor
expressly waives any and all legal rights which might otherwise
require the Secured Party to enforce its rights by judicial
process.
ARTICLE 7
MISCELLANEOUS PROVISIONS
Section 7.01 Notices. Any notice required or permitted
to be given under or in connection with this Agreement shall be
given in accordance with the notice provisions of the Indenture
with respect to Debtor and in accordance with the notice
provisions of the International Collateral Agency Agreement with
respect to the Secured Party.
Section 7.02 Amendments and Waivers. The Secured Party's
acceptance of partial or delinquent payments or any forbearance,
failure or delay by the Secured Party in exercising any right,
power or remedy hereunder shall not be deemed a waiver of any
obligation of Debtor or any Obligor, or of any right, power or
remedy of the Secured Party; and no partial exercise of any
right, power or remedy shall preclude any other or further
exercise thereof. The Secured Party may remedy any Event of
Default hereunder or in connection with the Obligations without
waiving the Event of Default so remedied. Debtor hereby agrees
that if the Secured Party agrees to a waiver of any provision
hereunder, or an exchange of or release of the Collateral, or the
addition or release of any Obligor or other Person, any such
action shall not constitute a waiver of any of the Secured
Party's other rights or of Debtor's obligations hereunder. This
Agreement may be amended only by an instrument in writing
executed jointly by Debtor and the Secured Party and may be
supplemented only by documents delivered or to be delivered in
accordance with the express terms hereof.
Section 7.03 Copy as Financing Statement. A photocopy or
other reproduction of this Agreement or any financing statement
covering the Collateral is sufficient as a financing statement,
and the same may be filed with the appropriate filing authority
for the purpose of perfecting the Secured Party's security
interest in the Collateral.
Section 7.04 Possession of Collateral. The Secured Party
shall be deemed to have possession of any Collateral in transit
to it or set apart for it (or, in either case, any of its agents,
affiliates or correspondents).
Section 7.05 Redelivery of Collateral. If any sale or
transfer of Collateral by the Secured Party results in full
satisfaction of the Obligations, and after such sale or transfer
and discharge there remains a surplus of proceeds, the Secured
Party will deliver to Debtor such excess proceeds in a
commercially reasonable time; provided, however, that neither the
Secured Party shall have any liability for any interest, cost or
expense in connection with any delay in delivering such proceeds
to Debtor.
Section 7.06 Governing Law; Jurisdiction. This Agreement
and the security interest granted hereby shall be construed in
accordance with and governed by the laws of the State of New York
(except to the extent that the laws of any other jurisdiction
govern the perfection and priority of the security interests
granted hereby).
Section 7.07 Continuing Security Agreement.
(a) Except as may be expressly applicable pursuant to
Section 9-505 of the Code, no action taken or omission to act by
the Secured Party hereunder, including, without limitation, any
exercise of voting or consensual rights pursuant to Section 4.07
or any other action taken or inaction pursuant to Section 6.02,
shall be deemed to constitute a retention of the Collateral in
satisfaction of the Obligations or otherwise to be in full
satisfaction of the Obligations, and the Obligations shall remain
in full force and effect, until the Secured Party shall have
applied payments (including, without limitation, collections from
Collateral) towards the Obligations in the full amount then
outstanding or until such subsequent time as is hereinafter
provided in subsection (b) below.
(b) To the extent that any payments on the Obligations or
proceeds of the Collateral are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be
repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause,
then to such extent the Obligations so satisfied shall be revived
and continue as if such payment or proceeds had not been received
by the Secured Party and the Secured Party's security interests,
rights, powers and remedies hereunder shall continue in full
force and effect. In such event, this Agreement shall be
automatically reinstated if it shall theretofore have been
terminated pursuant to Section 7.08.
Section 7.08 Termination. The grant of a security
interest hereunder and all of the Secured Party's rights, powers
and remedies in connection therewith shall remain in full force
and effect until the Secured Party has (i) retransferred and
delivered all Collateral in its possession to Debtor, and (ii)
executed a written release or termination statement and
reassigned to Debtor without recourse or warranty any remaining
Collateral and all rights conveyed hereby. Upon the complete
payment of the Obligations and the compliance by Debtor with all
covenants and agreements hereof, the Secured Party, at the
written request and expense of Debtor, and upon receipt of an
Officer's Certificate of Debtor stating that all conditions
precedent have been complied with, will release, reassign and
transfer the Collateral to Debtor and declare this Agreement to
be of no further force or effect. Notwithstanding the foregoing,
the reimbursement and indemnification provisions of Section 4.04
and the provisions of subsection 7.07(b) shall survive the
termination of this Agreement.
Section 7.09 Counterparts, Effectiveness. This Agreement
may be executed in two or more counterparts, and it shall not be
necessary that the signatures of all parties hereto be contained
on any one counterpart hereof. Each counterpart is deemed an
original, but all such counterparts taken together constitute one
and the same instrument.
DEBTOR:
PANDA CAYMAN INTERFUNDING COMPANY
By:_______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board, President
and Chief Executive Officer
SECURED PARTY:
PANDA INTERFUNDING CORPORATION
By:_______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board, President
and Chief Executive Officer