EXHIBIT 10.120
PAN-WESTERN CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT dated as of April 22, 1997,
between PAN-WESTERN ENERGY CORPORATION LLC, a Cayman Islands
exempted company (the "Pledgor") and BANKERS TRUST COMPANY, as
Trustee (in such capacity, the "Trustee") for the Holders of the
12-1/2% Senior Secured Notes due 2004 (the "Senior Secured
Notes") of Panda Global Energy Company (the "Issuer") issued
pursuant to the terms and subject to the conditions of the Trust
Indenture, dated as of April 22, 1997 (as amended, supplemented
or otherwise modified from time to time, the "Indenture"),
between the Issuer and the Trustee and fully and unconditionally
guaranteed by Panda Global Holdings, Inc. (the "Company").
W I T N E S S E T H:
WHEREAS, pursuant to the Indenture, the Trustee has
agreed to act on behalf of the Holders of the Senior Secured
Notes upon the terms and subject to the conditions set forth
therein; and
WHEREAS, the Pledgor is an indirect Subsidiary of the
Issuer, and substantially all of the proceeds of the Senior
Secured Notes are being loaned to the Pledgor pursuant to the
Issuer Loan Agreement; and
WHEREAS, in order to receive more favorable financing
terms for the sale of the Senior Secured Notes the Pledgor has
agreed to assign its rights to certain assets to the Trustee.
NOW, THEREFORE, in consideration of the premises and to
induce the Trustee to enter into the Indenture and to induce the
Initial Purchaser of the Senior Secured Notes to purchase the
Senior Secured Notes under the Purchase Agreement dated April 11,
1997 (as it may be amended, supplemented or otherwise modified
from time to time, the "Purchase Agreement") with the Issuer, the
Company and Panda Energy International, Inc., the Pledgor hereby
agrees with the Trustee, for the ratable benefit of the Holders
of the Senior Secured Notes, as follows:
1. Defined Terms. (a) Unless otherwise defined
herein, terms defined in the Indenture and used herein shall have
the meanings given to them in the Indenture.
(b) The following terms shall have the following
meanings:
"Agreement": this Pan-Western Cash Collateral
Agreement, as the same may be amended, modified or otherwise
supplemented from time to time.
"Cash Collateral": the collective reference to:
(a) all cash, instruments, securities and funds
deposited from time to time in the Cash Collateral Accounts,
including, without limitation, all cash or other money proceeds
of any property of the Pledgor that constitutes collateral
subject to a security interest for the benefit of the Trustee
under any Collateral Document;
(b) all investments of funds in the Cash
Collateral Accounts and all instruments and securities evidencing
such investments; and
(c) all interest, dividends, cash, instruments,
securities and other property received in respect of, or as
proceeds of, or in substitution or exchange for, any of the
foregoing.
"Cash Collateral Accounts": the Pan-Western Revenue
Fund, the Pan-Western Operating Fund and the Pan-Western Equity
Distribution Fund.
"Code": the Uniform Commercial Code from time to time
in effect in the State of New York.
"Collateral": the collective reference to: (a) the
Cash Collateral, (b) the Cash Collateral Accounts and (c) all of
the Pledgor's rights and interest in and under the Shareholder
Loan Agreements and the Joint Venture Guarantees.
"Obligations": (i) the collective reference to the
unpaid principal, interest and premium, if any (including
Liquidated Damages and Additional Amounts, if any), on the Senior
Secured Notes and all other obligations and liabilities of the
Issuer to the Trustee and the Holders of Senior Secured Notes
(including, without limitation, interest accruing after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Issuer whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or
in connection with, Senior Secured Notes; and
(ii) all obligations and liabilities of the
Pledgor which may arise under or in connection with this
Agreement or any other Transaction Document to which the Pledgor
is a party;
in each case, whether on account of reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of
counsel to the Trustee or counsel to the Initial Purchaser that
are required to be paid by the Pledgor pursuant to the terms of
this Agreement or any other Transaction Document. Anything
herein to the contrary notwithstanding, the maximum liability of
the Pledgor hereunder shall in no event exceed the amount which
can be guaranteed by the Pledgor under applicable federal and
state laws relating to the insolvency of debtors.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and section and paragraph references are to
this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
2. Grant of Security Interest. As collateral security
for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of
the Obligations, the Pledgor hereby grants to the Trustee, for
the ratable benefit of the Holders of Senior Secured Notes, a
security interest in the Collateral.
3. Maintenance of Cash Collateral Accounts. (a) The
Cash Collateral Accounts shall be maintained until the
Obligations have been paid and performed in full.
(b) The Collateral shall be subject to the exclusive
dominion and control of the Trustee, which shall hold the Cash
Collateral and administer the Cash Collateral Accounts subject to
the terms and conditions of this Agreement and the Indenture.
The Pledgor shall have no right of withdrawal from the Cash
Collateral Accounts nor any other right or power with respect to
the Collateral, except as expressly provided herein and therein.
4. Deposit of Funds. The Pledgor will make deposits
to the Cash Collateral Accounts in accordance with the terms of
the Indenture.
5. Representations and Warranties. The Pledgor
represents and warrants to the Trustee that:
(a) The Pledgor has the corporate power and authority
and the legal right to execute and deliver, to perform its
obligations under, and to grant the security interest in the
Collateral pursuant to, this Agreement and has taken all
necessary corporate action to authorize its execution, delivery
and performance of, and grant of the security interest in the
Collateral pursuant to, this Agreement.
(b) This Agreement constitutes a legal, valid and
binding obligation of the Pledgor enforceable in accordance with
its terms and creates in favor of the Trustee a perfected, first
priority security interest in the Collateral, enforceable in
accordance with its terms, except in each case as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(c) The execution, delivery and performance of this
Agreement will not violate any provision of any Requirement of
Law or Contractual Obligation of the Pledgor and will not result
in the creation or imposition of any Lien on any of the
properties or revenues of the Pledgor pursuant to any Requirement
of Law or Contractual Obligation of the Pledgor, except as
contemplated hereby.
(d) No consent or authorization of, filing with, or
other act by or in respect of, any arbitrator or Governmental
Authority and no consent of any other Person (including, without
limitation, any stockholder or creditor of the Pledgor), is
required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement.
(e) No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to
the knowledge of the Pledgor, threatened by or against the
Pledgor or against any of its properties or revenues with respect
to this Agreement or any of the transactions contemplated hereby.
6. Covenants. The Pledgor covenants and agrees with
the Trustee for the benefit of the Holders of the Senior Secured
Notes that, except as the Trustee may otherwise consent in
accordance with the terms of the Indenture:
(a) The Pledgor will not (1) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral, or (2) create, incur or permit to
exist any Lien or option in favor of, or any claim of any Person
with respect to, any of the Collateral, or any interest therein,
except for the security interest created by this Agreement.
(b) The Pledgor will maintain the security interest
created by this Agreement as a first, perfected security interest
and will defend the right, title and interest of the Trustee in
and to the Collateral against the claims and demands of all
Persons whomsoever. At any time and from time to time, upon the
written request of the Trustee, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver
such further instruments and documents and take such further
actions as the Trustee reasonably may request for the purposes of
obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, including, without
limitation, financing statements under the Code.
7. Investment of Cash Collateral. Collected funds on
deposit in the Cash Collateral Accounts shall be invested by the
Trustee pursuant to the terms of the Indenture.
8. Release of Cash Collateral. The Trustee shall
release the Cash Collateral in accordance with the terms of the
Indenture.
9. Remedies. (a) Upon the occurrence of an Event of
Default, the Trustee may, without notice of any kind, except for
notices required by law which may not be waived, apply the
Collateral, after deducting all reasonable costs and expenses of
every kind incurred in respect thereof or incidental to the care
or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Trustee hereunder, including,
without limitation, reasonable attorneys' fees and disbursements
of counsel to the Trustee, to the payment in whole or in part of
the Obligations, in such order as the Trustee in its sole
discretion may elect, and only after such application and after
the payment by the Trustee of any other amount required by any
provision of law, including, without limitation, Section 9-
504(1)(c) of the Code, need the Trustee account for the surplus,
if any, to the Pledgor. In addition to the rights, powers and
remedies granted to it under this Agreement and in any other
agreement securing, evidencing or relating to the Obligations,
the Trustee shall have all the rights, powers and remedies
available at law, including, without limitation, the rights and
remedies of a secured party under the Code. To the extent
permitted by law, the Pledgor waives presentment, demand, protest
and all notices (except notices specifically provided for in any
agreement securing, evidencing or relating to the Obligations),
of any kind and all claims, damages and demands it may acquire
against the Trustee or any Holder arising out of the exercise by
them of any rights hereunder.
(b) The Pledgor waives and agrees not to assert any
rights or privileges which it may acquire under Section 9-112 of
the Code. The Pledgor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Trustee to collect
such deficiency.
10. No Subrogation. Notwithstanding any payment or
payments made by the Pledgor hereunder, or any setoff or
application of funds of the Pledgor by any Holder, or the receipt
of any amounts by the Trustee or any Holder with respect to any
of the Collateral, the Pledgor shall not be entitled to be
subrogated to any of the rights of the Trustee or any Holder
against the Issuer or against any other collateral security held
by the Trustee or any Holder for the payment of the Obligations,
nor shall the Pledgor seek any reimbursement from the Issuer in
respect of payments made by the Pledgor in connection with this
Agreement, or amounts realized by the Trustee or any Holder in
connection with the Collateral, until all amounts owing to the
Trustee and the Holders of Senior Secured Notes on account of the
Obligations are paid in full. If any amount shall be paid to the
Pledgor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such
amount shall be held by the Pledgor in trust for the Trustee,
segregated from other funds of the Pledgor, and shall, forthwith
upon receipt by the Pledgor, be turned over to the Trustee in the
exact form received by the Pledgor (duly indorsed by the Pledgor
to the Trustee, if required) to be applied against the
Obligations, whether matured or unmatured, in such order as the
Trustee may determine.
11. Amendments, etc. with respect to the Obligations;
Waiver of Rights. The Pledgor shall remain obligated hereunder,
and the Collateral shall remain subject to the security interest
created hereby, notwithstanding that, without any reservation of
rights against the Pledgor, and without notice to or further
assent by the Pledgor, any demand for payment of any of the
Obligations made by the Trustee or any Holder may be rescinded by
the Trustee or such Holder, and any of the Obligations continued,
and the Obligations, or the liability of the Issuer or any other
Person upon or for any part thereof, or any collateral security
or guarantee therefor or right of offset with respect thereto,
may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived,
surrendered, or released by the Trustee or any Holder, and the
Indenture, the Senior Secured Notes, the Shareholder Loan
Agreements, the Project Notes and the other Transaction Documents
executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in accordance with their
terms, and any guarantee, right of offset or other collateral
security at any time held by the Trustee or any Holder for the
payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Trustee nor any Holder
shall have any obligation to protect, secure, perfect or insure
any other Lien at any time held by it as security for the
Obligations or any property subject thereto. The Pledgor waives
any and all notice of the creation, renewal, extension or accrual
of any of the Obligations and notice of or proof of reliance by
the Trustee or any Holder upon this Agreement; the Obligations,
and any of them, shall conclusively be deemed to have been
created, contracted or incurred in reliance upon this Agreement;
and all dealings between the Issuer and the Pledgor, on the one
hand, and the Trustee and the Holders of Senior Secured Notes, on
the other, shall likewise be conclusively presumed to have been
had or consummated in reliance upon this Agreement. The Pledgor
waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Issuer or the
Pledgor with respect to the Obligations. When pursuing its
rights and remedies hereunder against the Pledgor, the Trustee
may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Issuer or any other Person or
against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by
the Trustee to pursue such other rights or remedies or to collect
any payments from the Issuer or any such other Person or to
realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Issuer
or any such other Person or of any such collateral security,
guarantee or right of offset, shall not relieve the Pledgor of
any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a
matter of law, of the Trustee or any Holder against the Pledgor
or the Collateral.
12. Trustee's Appointment as Attorney-in-Fact. (a)
The Pledgor hereby irrevocably constitutes and appoints the
Trustee and any officer or agent of the Trustee, with full power
of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of
the Pledgor and in the name of the Pledgor or in the Trustee's
own name, from time to time in the Trustee's discretion, for the
purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents
and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, including, without limitation,
any financing statements, endorsements, assignments or other
instruments of transfer.
(b) The Pledgor hereby ratifies all that said
attorneys shall lawfully do or cause to be done pursuant to the
power of attorney granted in paragraph 12(a). All powers,
authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are
released.
13. Duty of Trustee. The Trustee's sole duty with
respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the Code
or otherwise, shall be to comply with the specific duties and
responsibilities set forth herein and in the Indenture. The
powers conferred on the Trustee in this Agreement are solely for
the protection of the Trustee's and the Holders of Senior Secured
Notes' interests in the Collateral and shall not impose any duty
upon the Trustee or any Holder to exercise any such powers.
Neither the Trustee nor any Holder nor its or their directors,
officers, employees or agents shall be liable for any action
lawfully taken or omitted to be taken by any of them under or in
connection with the Collateral or this Agreement, except for its
or their gross negligence or willful misconduct.
14. Execution of Financing Statements. Pursuant to
Section 9-402 of the Code, the Pledgor authorizes the Trustee to
file financing statements with respect to the Collateral without
the signature of the Pledgor in such form and in such filing
offices as the Trustee reasonably determines appropriate to
perfect the security interests of the Trustee under this
Agreement. A carbon, photographic or other reproduction of this
Agreement shall be sufficient as a financing statement for filing
in any jurisdiction.
15. Authority of Trustee. The Pledgor acknowledges
that the rights and responsibilities of the Trustee under this
Agreement with respect to any action taken by the Trustee or the
exercise or non-exercise by the Trustee of any option, right,
request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the
Trustee and the Holders of Senior Secured Notes, be governed by
the Indenture and by such other agreements with respect thereto
as may exist from time to time among them, but, as between the
Trustee and the Pledgor, the Trustee shall be conclusively
presumed to be acting as agent for the Holders of Senior Secured
Notes with full and valid authority so to act or refrain from
acting, and the Pledgor shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
16. Indemnity of Trustee. The Pledgor shall indemnify
the Trustee, its officers, agents, employees, directors for, and
to hold each such person harmless against any and all losses,
liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties
under this Agreement, including the costs and expenses of
enforcing this Agreement against the Pledgor or any other Person
and investigating or defending itself against any claim (whether
asserted by the Pledgor or any Holder of Senior Secured Notes or
any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall
notify the Pledgor promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Pledgor shall
not relieve the Pledgor of its obligations hereunder. The
Pledgor shall defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and, if
Pledgor's counsel is not diligently prosecuting or defending the
matter, or in the event that there may be a conflict between the
positions of the Pledgor and Trustee in conducting the defense,
the Pledgor shall pay the reasonable fees and expenses of such
counsel. The Pledgor need not pay for any settlement made
without its consent, which consent shall not be unreasonably
withheld.
17. Notices. All notices, requests and demands to or
upon the Trustee or the Pledgor to be effective shall be in
writing (or by telex, fax or similar electronic transfer
confirmed in writing) and shall be deemed to have been duly given
or made (a) when delivered by hand or (b) if given by mail, when
deposited in the mails by certified mail, return receipt
requested, or (c) if by telex, fax or similar electronic
transfer, when sent and receipt has been confirmed, as follows:
(1) if to the Trustee, at its address or transmission
number for notices provided in the recitals of the Indenture; and
(2) if to the Pledgor, at its address or transmission
number for notices set forth under its signature below.
The Trustee and the Pledgor may change their addresses
and transmission numbers for notices by notice in the manner
provided in this paragraph.
18. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
19. Integration. This Agreement represents the
agreement of the Pledgor with respect to the subject matter
hereof and there are no promises or representations by the
Trustee or any Holder relative to the subject matter hereof not
reflected herein.
20. Amendments in Writing; No Waiver; Cumulative
Remedies. (a) None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by the Pledgor and the Trustee,
provided that any provision of this Agreement may be waived by
the Trustee in a letter or agreement executed by the Trustee or
by telex or facsimile transmission from the Trustee.
(b) Neither the Trustee nor any Holder shall by any
act (except by a written instrument pursuant to paragraph 20(a)
hereof), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any
delay in exercising, on the part of the Trustee, any right, power
or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by
the Trustee of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the
Trustee would otherwise have on any future occasion.
(c) The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
21. Section Headings. The section headings used in
this Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration
in the interpretation hereof.
22. Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of the Pledgor and shall
inure to the benefit of the Trustee and the Holders of Senior
Secured Notes and their successors and assigns.
23. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
24. Submission To Jurisdiction; Waivers. The Pledgor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement, or for
recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the Courts of the
State of New York sitting in the Borough of Manhattan, the courts
of the United States of America for the Southern District of New
York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the
same;
(c) designates, appoints and empowers CT Corporation
Systems, at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇ as its authorized
agent to receive for and on its behalf service of any summons,
complaint or other legal process in any such action, suit or
proceeding in the State of New York;
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by law
or shall limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this paragraph any special,
exemplary, punitive or consequential damages.
25. WAIVERS OF JURY TRIAL. THE PLEDGOR AND, BY ITS
ACCEPTANCE HEREOF, THE TRUSTEE HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
IN WITNESS WHEREOF, the Pledgor and the Trustee have
caused this Cash Collateral Agreement to be duly executed and
delivered as of the date first above written.
PAN-WESTERN ENERGY CORPORATION LLC
By:
Title:
Address:
Pan-Western Energy Corporation LLC
c/▇ ▇▇▇▇▇▇ and Calder
▇▇▇▇▇▇ House
P.O. Box 309
South Church Street
▇▇▇▇▇▇ Town, Grand Cayman
Cayman Islands, British West Indies
with a copy to: Panda Energy International Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANKERS TRUST COMPANY, as Trustee
By:
Title: