EXHIBIT NO. 10.156
TRUST AND RETENTION AGREEMENT
among
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
INTERNATIONAL FINANCE CORPORATION
DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH
and
WILMINGTON TRUST COMPANY
Dated as of the Closing Date
TRUST AND RETENTION AGREEMENT
TRUST AND RETENTION AGREEMENT, dated as of the Closing Date (this
"Agreement"), among BHOTE KOSHI POWER COMPANY PRIVATE LIMITED, a
private limited liability company registered under the Nepalese
Company Act, 2021 (the "Company"), INTERNATIONAL FINANCE
CORPORATION, an international organization organized and existing
by virtue of the Articles of Agreement among its member countries
("IFC"), DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT
mbH, a company organized and existing under the laws of the
Federal Republic of Germany ("DEG") (both DEG and IFC hereinafter
being collectively referred to as the "Lenders") and WILMINGTON
TRUST COMPANY, a Delaware banking corporation (the "Trustee").
PRELIMINARY STATEMENTS
The Company has been granted the right to build, own and
operate a 36 MW (nominal net) hydroelectric power plant in the
Sindhupalchok District in Nepal.
IFC is willing to provide financing for the Project pursuant
to the terms of that certain IFC Investment Agreement dated as of
the Closing Date between the Company and IFC (the "IFC Investment
Agreement").
DEG is willing to provide financing for the Project pursuant
to the terms of that certain DEG Investment Agreement dated as of
the Closing Date between the Company and DEG (the "DEG Investment
Agreement", and together with the IFC Investment Agreement, the
"Investment Agreement")).
The Company, IFC and DEG have entered into that certain
Investment Agreement General Conditions dated as of the Closing
Date (the "General Conditions").
It is a condition precedent to the obligations of each of
the Lenders under the Investment Agreement that this Agreement
shall have been entered into by the parties hereto.
NOW, THEREFORE, IT IS AGREED:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
For all purposes of this Agreement, (i) capitalized terms
not otherwise defined herein shall have the meanings set forth in
Schedule A to the General Conditions and (ii) the principles of
construction set forth in Schedule A to the General Conditions
shall apply.
ARTICLE 2
APPOINTMENT OF TRUSTEE
ESTABLISHMENT OF THE TRUST AND THE OFFSHORE RETENTION ACCOUNT
Section 2.1 Acceptance of Appointment ofTrustee.
(a) The Lenders hereby appoint Wilmington Trust Company to
act as trustee hereunder in accordance with the terms hereof for
the benefit of the Lenders. The Trust Agreement dated as of
November 7, 1997 by and between Wilmington Trust Company and IFC
is hereby superseded by this Agreement. Wilmington Trust Company
hereby agrees to act as trustee hereunder, in accordance with the
terms set forth herein, and to accept all cash, payments, other
amounts and investments delivered to or held by the Trustee
pursuant to the terms of this Agreement, or through the Trustee's
Designee, pursuant to the terms of the Nepal Agency and Retention
Agreement. The Trustee shall hold and safeguard the Offshore
Retention Account and, through its Designee, shall hold the Nepal
Retention Account during the term of this Agreement or the Nepal
Agency and Retention Agreement (as applicable) and shall treat
the cash, instruments and securities in the Offshore Retention
Account or the Nepal Retention Account as funds, instruments and
securities owned and pledged by the Company to the Trustee for
the benefit of the Lenders, pursuant to this Agreement and the
other Security Documents, to be held in the custody of the
Trustee, as trustee solely for the benefit of the Lenders, in
trust in accordance with the provisions of this Agreement or the
Nepal Agency and Retention Agreement (as applicable).
(b) Wilmington Trust Company accepts the trust hereby
created and agrees to perform its duties hereunder with respect
to the same but only in accordance with the terms of this
Agreement and the Security Documents. Wilmington Trust Company
shall not be answerable or accountable except (i) for its or the
Trustee's own willful misconduct, bad faith, gross negligence,
simple negligence in the handling of funds or material breach of
its obligations, (ii) in the case of the inaccuracy of any
representation or warranty, or in the case of its failure to
perform any covenant made by Wilmington Trust Company in its
individual capacity, contained in Section 2.2(e) or Section 10.2
hereof, or (iii) for taxes, fees or other charges based on or
measured by any fees, commissions or compensation received by the
Trustee in connection with any of the transactions contemplated
by this Agreement. Without limiting the obligations and
liabilities of Wilmington Trust Company to the Lenders and the
Company under the preceding sentence, in performing its functions
and duties under this Agreement, the Trustee shall act solely as
trustee for the Lenders and does not assume and shall not be
deemed to have assumed any obligation toward the Company except
as expressly contemplated by this Agreement or any relationship
of agency or trust with or for the Company or any Affiliate of
the Company.
(c) Neither the Company nor any Affiliate of the Company
shall have any rights against the Trustee hereunder, as a third
party beneficiary or otherwise, including, without limitation,
any right to direct the Trustee to distribute or allocate any
funds in the Offshore Retention Account or the Nepal Retention
Account, except as provided in the following sentence and except
with respect to amounts deposited in the Holding Account. Any
withdrawal, transfer or investment made or caused to be made by
the Company in accordance with the provisions hereof is expressly
understood to be made with the permission of the Lenders in the
exercise of its exclusive possession of, and dominion and control
over, the Offshore Retention Account and the Nepal Retention
Account, through its agent, the Trustee.
(d) It is agreed by and among the Company, the Lenders and
the Trustee that, in the absence of an express provision to the
contrary contained in a Security Document, the Lenders (or either
Lender in the case of an affirmative instruction to exercise a
Post-Default Remedy) shall have exclusive authority to give
instructions to the Trustee. For purposes of this Section
2.1(d), "Post-Default Remedy" shall mean any right or remedy
provided to the Trustee under a Security Document that may be
exercised by the Trustee only following the occurrence of a
Default or an Event of Default.
Section 2.2 Establishment of Offshore Retention Account.
(a) The Trustee hereby establishes in the Company's name a
special, segregated and irrevocable cash collateral account with
the Trustee at its office in Wilmington, Delaware entitled "Bhote
Koshi Power Company Private Limited Offshore Retention Account"
(Account Number 43370-0) (the "Offshore Retention Account") and
the following sub-accounts:
(i) a sub-account entitled "Bhote Koshi
Power Company Private Limited Revenue Sub-Account"
(Account Number 43370-1) (the "Revenue Sub-
Account");
(ii) a sub-account entitled "Bhote Koshi
Power Company Private Limited Operations and
Maintenance Sub-Account" (Account Number 43370-2)
(the "Operations and Maintenance Sub-Account");
(iii) a sub-account entitled "Bhote Koshi
Power Company Private Limited Debt Payment Sub-
Account" (Account Number 43370-3) (the "Debt
Payment Sub-Account");
(iv) a sub-account entitled "Bhote Koshi
Power Company Private Limited Debt Service Reserve
Sub-Account" (Account Number 43370-4) (the "Debt
Service Reserve Sub-Account");
(v) a sub-account entitled "Bhote Koshi
Power Company Private Limited Maintenance Reserve
Sub-Account" (Account Number 43370-5) (the
"Maintenance Reserve Sub-Account");
(vi) a sub-account entitled "Bhote Koshi
Power Company Private Limited Construction Sub-
Account" (Account Number 43370-6) (the
"Construction Sub-Account"), which shall be
maintained until the Trustee receives from the
Lenders a Lender Completion Notice;
(vii) a sub-account entitled "Bhote Koshi
Power Company Private Limited Insurance Proceeds
Sub-Account" (Account Number 43370-7) (the
"Insurance Proceeds Sub-Account");
(viii) a sub-account entitled "Bhote Koshi
Power Company Private Limited Liquidated Damages
Sub-Account" (Account Number 43370-8) (the
"Liquidated Damages Sub-Account");
(ix) a sub-account entitled "Bhote Koshi
Power Company Private Limited Deficiency Sub-
Account" (Account Number 43370-9) (the "Deficiency
Sub-Account"); and
(x) a sub-account entitled "Bhote Koshi
Power Company Private Limited Cash Sub-Account"
(Account Number 43371-0) (the "Cash Sub-Account").
(b) All right, title and interest in and to the Offshore
Retention Account and the funds in the Offshore Retention Account
and investments made with funds from the Offshore Retention
Account, including all income or gain thereon, shall be vested in
the Trustee for the benefit of the Lenders and, upon payment in
full of all Obligations and termination of all obligations of the
Lenders under the Loan Documents, the Company. Amounts deposited
in the Offshore Retention Account shall be applied by the Trustee
as provided in this Agreement. All such amounts shall constitute
a part of the Collateral and shall not constitute payment of any
of the Obligations under the Loan Documents (including, without
limitation, any obligation in respect of principal, interest,
premium, fees or expenses) until received by the Lenders as
hereinafter provided.
(c) (i) The Trustee shall deposit all Proceeds, proceeds
of Disbursements and any other amounts (other than Rupees)
received by the Trustee (or transferred to the Trustee from the
Nepal Retention Account) in respect of the Company or the Project
into the Offshore Retention Account on the day such amounts are
received. If any such amounts are received in any currency other
than Dollars, the Trustee shall convert such amounts to Dollars
at the then applicable exchange rate available to the Trustee in
the normal course of business. Additionally, the Trustee shall
convert any payments required to be made to any Lender hereunder
in any currency other than Dollars at the then applicable
exchange rate available to the Trustee in the normal course of
business. All monies in the Offshore Retention Account shall, to
the extent possible, be invested in the name of the Trustee in
such Cash Equivalents denominated in Dollars as the Company
directs in writing. Failing such direction or in the event the
Trustee receives monies after 12:00 p.m. (Wilmington, Delaware
time) on any day, such monies shall be invested daily on an
overnight basis in Default Investments (as hereinafter defined)
or such other investments as may be approved by the Lenders.
("Default Investments" means United States Securities and
Exchange Commission registered money market mutual funds
conforming to Rule 2a-7 of the Investment Company Act of 1940,
15 U.S.C. 80a1, et seq., as from time to time amended, that
invest primarily in direct obligations backed by those
obligations, including funds for which the Trustee or an
Affiliate of the Trustee acts as an advisor, and rated in the
highest category by a nationally recognized rating agency.)
Interest and other income or gain earned in respect of any monies
deposited in a sub-account shall be credited to the same sub-
account.
(ii) All monies and Cash Equivalents shall be
"Delivered" to the Trustee for deposit in the Offshore Retention
Account in accordance with the following procedures:
1. with respect to banker's acceptances, commercial
paper, negotiable certificates of deposits and other obligations
that constitute "instruments" within the meaning of Section 9-
105(1)(ii) of the Uniform Commercial Code of any applicable
jurisdiction (the "UCC") and are susceptible to physical delivery
and certificated securities, transfer thereof to the Trustee or
its nominee or custodian by physical delivery to the Trustee or
its nominee or custodian endorsed to, or registered in the name,
of, the Trustee or its nominee or custodian or endorsed in blank,
and, with respect to a certificated security (as defined in
Section 8-102 of the UCC), transfer thereof (i) by delivery of
such certificated security endorsed to, registered in the name
of, the Trustee or its nominee or custodian or endorsed in blank
to a securities intermediary (as defined in Section 8-313 of the
UCC) and the making by such securities intermediary of entries on
its books and records identifying such certificated securities as
belonging to the Trustee or its nominee or custodian and the
sending by such securities intermediary of a confirmation of the
purchase of such certificated security by the Trustee or its
nominee or custodian, or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102(3) of the UCC) and the
making by such clearing corporation of appropriate entries on its
books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of
a securities intermediary by the amount of such certificated
security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the
securities intermediary, the maintenance of such certificated
securities by such clearing corporation or a "custodian bank" (as
defined in Section 8-102(4) of the UCC) or the nominee of either
subject to the clearing corporation's exclusive control, the
sending of a confirmation by the securities intermediary of the
purchase by the Trustee or its nominee or custodian (all of the
foregoing "Physical Property"), and, in any event, any such
Physical Property in registered form shall be in the name of the
Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Collateral
or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof:
2. with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the
Federal National Mortgage Association that is a book-entry
security held through the Federal Reserve System pursuant to
Federal book-entry regulations (all of the foregoing "Government
Book-Entry Securities"), the following procedures, all in
accordance with applicable law, including applicable Federal
regulations and Articles 8 and 9 of the UCC: book-entry
registration of such Government Book-Entry Securities to an
appropriate book-entry account maintained with a Federal Reserve
Bank by a securities intermediary which is also a "depository"
pursuant to applicable Federal regulations and issuance by such
securities intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Trustee or
its nominee or custodian of the purchase by the Trustee or its
nominee or custodian of such book-entry securities; the making by
such securities intermediary of entries in its books and records
identifying such book-entry security held through the Federal
Reserve System pursuant to Federal book-entry regulations as
belonging to the Trustee or its nominee or custodian and
indicating that such custodian holds such Government Book-Entry
Securities solely as agent for the Trustee or its nominee or
custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of
ownership of any such trust account property to the Trustee or
its nominee or custodian, consistent with changes in applicable
law or regulations or the interpretation therein;
3. the perfection and priority of a security interest
in certificated or uncertificated securities which is governed by
the law of a jurisdiction which has adopted the 1994 Revision to
Article 8 of the UCC:
(a) with respect to Physical Property (other than
certificated securities), transfer thereof to the Trustee by
physical delivery to the Trustee, endorsed to, or registered
in the name of, the Trustee or its nominee or endorsed in
blank and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer
of ownership of any such Physical Property to the Trustee
free and clear of any adverse claims, consistent with
changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to a "certificated security" (as
defined in Section 8-102(a)(4) of the UCC), transfer
thereof:
(i) by physical delivery of such
certificated security to the Trustee, provided that if
the certificated security is in registered form, it
shall be endorsed to, or registered in the name of, the
Trustee or endorsed in blank; or
(ii) by physical delivery of such
certificated security in registered form to a
"securities intermediary" (as defined in Section 8-
102(a)(14) of the UCC) acting on behalf of the Trustee
if the certificated security has been specially
endorsed to the Trustee by an effective endorsement.
(c) with respect to any Government Book-Entry
Security, the following procedures, all in accordance with
applicable law, including applicable federal regulations and
Article 8 and 9 of the UCC: book-entry registration of such
property to an appropriate book-entry account maintained
with a Federal Reserve Bank by a securities intermediary
which is also a "depository" pursuant to applicable federal
regulations and issuance by such securities intermediary of
a deposit advice or other written confirmation of such book-
entry registration to the Trustee of the purchase by the
securities intermediary on behalf of the Trustee of such
book-entry security; the making by such securities
intermediary of entries in its books and records identifying
such book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations as
belonging to the Trustee and indicating that such securities
intermediary holds such book-entry security solely as agent
for the Trustee; and such additional or alternative
procedures as may hereafter become appropriate to effect
complete transfer of ownership of any such Government Book-
Entry Securities to the Trustee free of any adverse claims,
consistent with changes in applicable law or regulations or
the interpretation thereof;
(d) with respect to any item of Collateral that
is an "uncertificated security" (as defined in Section 8-
102(a)(18) of the UCC) (an "Uncertificated Security") and
that is not governed by clause (c) above, transfer thereof:
(i)(A) by registration to the Trustee
as the registered owner thereof, on the books and
records of the issuer thereof; or
(B) by another Person (not a
securities intermediary) that either becomes the
registered owner of the uncertificated security on
behalf of the Trustee, or having become the registered
owner acknowledges that it holds for the Trustee; or
(ii) the issuer thereof has agreed that
it will comply with instructions originated by the
Trustee without further consent of the registered owner
thereof.
(e) in each case of delivery contemplated herein,
the Trustee shall make appropriate notations on its records,
and shall cause same to be made of the records of its
nominees, indicating that securities are held in trust
pursuant to and as provided in this Agreement;
(f) with respect to a "security entitlement" (as
defined in Section 8-102(a)(17) of the UCC)
(i) if a securities intermediary (A)
indicates by book entry that a "financial asset" (as
defined in Section 8-102(a)(9) of the UCC) has been
credited to the Trustee's "securities account" (as
defined in Section 8-501(a) of the UCC), (B) receives a
financial asset (as so defined) from the Trustee or
acquires a financial asset for the Trustee, and in
either case, accepts it for credit to the Trustee's
securities account (as so defined), (C) becomes
obligated under other law, regulation or rule to credit
a financial asset to the Trustee's securities account,
or (D) has agreed that it will comply with "entitlement
orders" (as defined in Section 8-102(a)(8) of the UCC)
originated by the Trustee without further consent by
the "entitlement holder" (as defined in Section 8-
102(a)(7) of the UCC), of a confirmation of the
purchase and the making by such securities intermediary
of entries on its books and records identifying as
belonging to the Trustee of (I) a specific certificated
security in the securities intermediary's possession,
(II) a quantity of securities that constitute or are
part of a fungible bulk of certificated securities in
the securities intermediary's possession, or (III) a
quantity of securities that constitute or are part of a
fungible bulk of securities shown on the account of the
securities intermediary on the books of another
securities intermediary.
4. with respect to any Uncertificated Security (i) if the
issuer of the Uncertificated Security is organized under the laws
of an Old Article 8 Jurisdiction, registration on the books and
records of the issuer thereof in the name of the securities
intermediary, the sending of a confirmation by the securities
intermediary of the purchase by the Trustee or its nominee or
custodian of such uncertificated security, the making by such
securities intermediary of entries on its books and records
identifying such uncertificated certificates as belonging to the
Trustee or its nominee or custodian; and (ii) if the issuer of
the Uncertificated Security is organized under the laws of a
jurisdiction that has adopted Revised Article 8, (A) the issuer
registers the Trustee as the registered owner thereof or (B) the
Trustee otherwise satisfies the requirements of Section 8-106(c)
of Revised Article 8.
For purposes of this Agreement, (i) "Financial Asset" means
a "financial asset" within the meaning of Section 8-102(a)(9) of
Revised Article 8 of the UCC; (ii) "Revised Article 8" means
Revised Article 8 (1994 Version) (and corresponding amendments to
Article 9) as promulgated by the National Conference of
Commissioners on Uniform State Laws; (iii) "Securities
Intermediary" means a "securities intermediary" within the
meaning of Sections 8-102(a)(14) of Revised Article 8; (iv)
"Security Certificate" means a "securities certificate" within
the meaning of Section 8-102(a)(16) of Revised Article 8; and (v)
"Security Entitlement" means a "securities entitlement" within
the meaning of Section 8-102(a)(17) of Revised Article 8.
(iii) Each of Wilmington Trust Company and the Trustee
agrees that it will comply with instructions or entitlement
orders of IFC or DEG without further consent of the Company as
registered owner or entitlement holder of any Uncertificated
Securities and investment property held in the Offshore Retention
Account.
(d) The Trustee shall (i) within five (5) Business Days
after receipt of any written request by the Company or the
Lenders, provide the Company or each of the Lenders with such
information as the Company or the Lenders may specify regarding
all Cash Equivalents (including, without limitation, categories,
amounts, maturities and issuers) and any other investments made
by the Trustee pursuant hereto and regarding amounts available in
the Offshore Retention Account for Debt Service or otherwise and
(ii) upon the written request and at the expense of the Company,
arrange with the Company for a mutually convenient time for a
financial officer or an authorized representative of the Auditors
to visit the office of the Trustee to examine and take copies of
records relating to and instruments evidencing the Cash
Equivalents held by the Trustee pursuant hereto.
(e) Each of Wilmington Trust Company and the Trustee
agrees, for itself only, for the benefit of the Lenders and the
Company that it shall not create or incur any Lien (i) upon or
with respect to the Collateral, including without limitation, the
Offshore Retention Account or the Nepal Retention Account, except
the Lien of the Security Documents, or (ii) upon or with respect
to the Holding Account, and that it will take such action, at its
own expense, as shall be necessary to duly discharge any such
Lien.
(f) The Company shall forthwith from time to time upon
request deliver to the Trustee such resolutions, mandates,
authorities, documents, specimen signatures and other matters as
the Trustee may require and which are for the time being in
effect to enable the Offshore Retention Account, including all
sub-accounts, and the Holding Account to be opened, maintained
and operated in accordance with this Agreement. The Company
hereby appoints the Trustee and each of the Lenders as its
attorneys-in-fact to act on the Company's behalf and in the
Company's name or otherwise, at such time and in such manner as
either the Trustee or either of the Lenders may think fit, to do
anything which the Company is required to do under this Agreement
in relation to the creation, protection, preservation or
enforcement of the Security and which the Company fails duly to
do. The Company hereby ratifies and confirms and agrees to
ratify and confirm whatever the Trustee or either of the Lenders
shall do in the exercise or purported exercise in good faith of
any such power of attorney.
Section 2.3 Establishment of the Holding Account. The
Trustee hereby establishes in the Company's name a special and
segregated account with the Trustee at its office in Wilmington,
Delaware entitled "Bhote Koshi Power Company Private Limited
Holding Account" (Account Number 43372-0) (the "Holding
Account"). The Holding Account shall not be subject to any Lien
in favor of, or subject to any restriction whatsoever benefiting,
the Lenders and amounts deposited in the Holding Account may be
used by the Company for any purpose the Company wishes. The
Trustee shall apply amounts on deposit in the Holding Account
from time to time as directed by the Company in a written notice
to the Trustee.
Section 2.4 Description of the Collateral; Security
Interest in the Offshore Retention Account. Pursuant to the
Security Agreement and Assignment, the Company has assigned,
mortgaged or pledged to the Trustee, for the benefit of the
Lenders, the Collateral, including without limitation: (i) all of
the right, title and interest of the Company in, to, or under the
assignable assets of the Company relating to the Project,
including without limitation the PPA, the Project Agreement, the
Operations and Maintenance Agreement, the Services Agreements,
the EPC Contract and all other Principal Documents; (ii) all of
the right, title and interest of the Company to or under the
mortgageable assets of the Company relating to the Project,
including without limitation the mortgageable immovable assets of
the Company and the Company's right of use of the Site; (iii) the
Pledged Shares and other Pledged Collateral and all proceeds
thereof; and (iv) the Offshore Retention Account and the Nepal
Retention Account and all cash, investments and securities at any
time on deposit in the Offshore Retention Account or the Nepal
Retention Account, including all income or gain earned thereon.
The Company hereby confirms such assignment, mortgage and pledge
to the Trustee, for the benefit of the Lenders, of all of the
Company's right, title and interest in and to the Offshore
Retention Account and the Nepal Retention Account, and all cash,
investments and securities at any time on deposit therein, as
security for the payment of the Obligations. The Trustee is the
trustee of the Lenders under the Security Documents for the
purpose of receiving payments contemplated hereunder and, through
its Designee, contemplated under the Nepal Agency and Retention
Agreement and is also the trustee on behalf of the Lenders for
the purpose of perfecting the security interest of the Lenders in
and creating in favor of the Trustee and/or the Lenders legal,
valid, and enforceable first priority Liens on all of the
Collateral, including, without limitation, the Offshore Retention
Account and the Nepal Retention Account and all cash, investments
and securities and any proceeds thereof at any time on deposit in
the Offshore Retention Account or the Nepal Retention Account.
Until (x) all of the Obligations owing to the Lenders are paid in
full and all obligations of the Lenders under the Loan Documents
are terminated, and (y) a period of one hundred twenty (120) days
(or such other period as may be applicable with respect to
preference or similar periods under applicable bankruptcy,
insolvency or similar laws) has elapsed since the condition set
out in clause (x) is satisfied without any court determining that
the Company is insolvent or, if such determination is made within
that time, the Lenders are reasonably satisfied that no payment
made to either of the Lenders or the Trustee by the Company will
be set aside as a consequence thereof under any law relating to
bankruptcy, insolvency or similar matters, the Offshore Retention
Account and the Nepal Retention Account shall at all times be in
the exclusive possession of, and under the exclusive dominion and
control of, the Trustee (or the Trustee's Designee), as trustee
for the Lenders.
Section 2.5 Rupee Deposits. The Company agrees to cause
all amounts payable to or for the benefit of the Company in
Rupees (including, without limitation, all revenues under the PPA
and all refunds of import duties received by the Company in
Rupees) to be deposited initially in the Nepal Retention Account.
The Trustee shall cause the Designee, as trustee under the Nepal
Agency and Retention Agreement, to deposit all such amounts in
the Nepal Retention Account. To the extent amounts in the Nepal
Retention Account exceed the amount of Rupees which the Company
requires to pay Operating and Maintenance Costs payable in Rupees
for the following Quarter, determined on the basis of the Annual
Budget, and the amount of Rupees required to be deposited in the
Nepal Reserve Sub-Account pursuant to Section 3.2(a)(ii) of the
Nepal Agency and Retention Agreement, the Trustee shall cause the
Designee to convert the excess Rupee amount into Dollars or if
Dollars are unavailable, other convertible currencies (in
accordance with the procedures set forth in the Nepal Agency and
Retention Agreement) and transfer such Dollars or other
convertible currencies to (i) the Nepal Dollar Sub-Account, to
the extent requested by the Company in a Payment Requisition, or
(ii) to the Trustee for deposit in the Offshore Retention
Account. If any excess Rupee amount (excluding Rupees deposited
in the Nepal Reserve Sub-Account) is not converted to Dollars or
other convertible currencies within 90 days of deposit in the
Nepal Retention Account under circumstances in which Nepal Rastra
Bank, HMGN or another Governmental Authority in Nepal having
power to regulate foreign exchange is not generally permitting
conversion of Rupees into Dollars or other convertible currencies
or remittance thereof in order to pay obligations denominated in
convertible currencies, the Trustee shall cause the Designee, at
the request of the Lenders, to withdraw and transfer to the
Lenders such excess Rupee amount. Upon receiving Rupees pursuant
to this Section 2.5, the Lenders will, if they are able, convert
such Rupees to Dollars or other convertible currencies and apply
such amount to pay Obligations owing to the Lenders from time to
time in accordance with the terms of the Intercreditor Agreement.
ARTICLE 3
DEPOSITS INTO THE OFFSHORE RETENTION ACCOUNT
Section 3.1 Revenue Sub-Account Deposits.
(a) All amounts (other than Rupees) received by the Trustee
in respect of the Company or the Project shall be deposited on
the day of receipt in the Offshore Retention Account and, unless
otherwise specified in this Article 3, into the Revenue Sub-
Account. If any such amounts are received in any currency other
than Dollars, the Trustee shall convert such amounts to Dollars
at the then applicable exchange rate available to the Trustee in
the normal course of business. The Company agrees, and confirms
that it has so instructed each of the other parties to the Third
Party Agreements, the Share Retention and Project Funds Agreement
and each of the Subscription Agreements, that all payments due or
to become due to the Company under each such agreement (except
for payments contemplated to be deposited in the Nepal Retention
Account) shall be made directly to the Trustee for deposit in the
Revenue Sub-Account (except as otherwise specified in this
Article 3). The Company agrees to cause all other amounts
payable to or for the benefit of the Company (including without
limitation Sales Proceeds, amounts received in respect of a
Special Buyout Event and cash on hand on the Financial Closing
Date) to be made directly to the Trustee for deposit in the
Revenue Sub-Account, except as otherwise specified hereunder or
in the Nepal Agency and Retention Agreement. In the event that,
notwithstanding the foregoing, any such payments or other amounts
are received by the Company, the Company shall promptly pay,
endorse, transfer and deliver such payments or other amounts, as
the case may be, to the Trustee for deposit in the Revenue Sub-
Account, and, until such delivery, the Company shall hold such
payments and other amounts, as the case may be, in the same form
as received in trust for the Trustee.
(b) On the Commercial Operation Date, the Trustee shall
withdraw from the Construction Sub-Account and deposit in the
Revenue Sub-Account $1,500,000.
(c) The Trustee shall deposit any Liquidated Damages
Proceeds received in respect of delays pursuant to the EPC
Contract or the EPC Performance Guarantees and all Insurance
Proceeds relating to delays (including proceeds of any claim
under Delay in Start-Up or Advance Loss of Profits or Business
Interruption coverages) in the Revenue Sub-Account immediately
upon receipt thereof.
(d) After the Commercial Operation Date, the Trustee shall
deposit in the Revenue Sub-Account all refunds of import duties
received by the Company in Dollars.
Section 3.2 Operations and Maintenance Sub-Account
Deposits. On the first Business Day of each Quarter commencing
after the Commercial Operation Date, the Trustee shall withdraw
from the Revenue Sub-Account and deposit in the Operations and
Maintenance Sub-Account an amount equal to (i) the product of
(x) Operating and Maintenance Costs payable in currencies other
than Rupees budgeted for such Quarter in the Annual Budget,
multiplied by (y) 1.10, minus (ii) the amount then on deposit in
the Operations and Maintenance Sub-Account, as set forth in a
Debt Service and Reserve Deposit Certificate or Correction
Notice. The Trustee shall promptly notify each of the Lenders
and the Company if, according to a calculation made by the
Trustee based on the most recent Annual Budget delivered to the
Trustee under Section 9.1(a) hereof, the amount set forth in a
Debt Service and Reserve Deposit Certificate for deposit in the
Operations and Maintenance Sub-Account is incorrect and stating
the reasons therefor. No transfer shall be made until such
amount is corrected.
Section 3.3 Debt Payment Sub-Account Deposits.
(a) On the first Business Day of each Month commencing
after the earlier to occur of the Commercial Operation Date and
September 15, 1999 after making any withdrawal required on such
date pursuant to Section 3.2 hereof, the Trustee shall withdraw
from the Revenue Sub-Account and deposit in the Debt Payment Sub-
Account an amount equal to one-sixth (1/6) of the aggregate Debt
Service payable on the Loans on the next scheduled Payment Date,
as set forth in a Debt Service and Reserve Deposit Certificate or
Correction Notice, until the balance therein equals aggregate
Debt Service payable on the Loans on the next scheduled Payment
Date. The amount required to be deposited in the Debt Payment
Sub-Account pursuant to this Section 3.3(a) in connection with
the DEG Loan shall be calculated on a semi-annual basis at the
time of the preceding Interest Payment Date or at such other time
as a Debt Service and Reserve Deposit Certificate or Correction
Notice is delivered to the Trustee on the basis of the Deutsche
▇▇▇▇ to US$ exchange rate available to the Trustee in the normal
course of business. Notwithstanding anything contained herein to
the contrary, the amount required to be retained in the Debt
Payment Sub-Account in connection with the B Loan pursuant to
this Section 3.3(a) shall be determined on the basis of any
Hedging Transactions plus the B Loan Spread made by the Company,
and the Debt Service and Reserve Deposit Certificate or
Correction Notice of any Lender shall specify an amount to be
retained in accordance with this Section 3.3(a).
(b) At the direction of the Lenders, the Trustee shall
deposit in the Debt Payment Sub-Account any or all proceeds of
any Deficiency Loan or Deficiency Subscription received in
respect of a Project Funds Shortfall.
Section 3.4 Maintenance Reserve Sub-Account Deposits. On
the Commercial Operation Date, the Company shall deposit into the
Maintenance Reserve Sub-Account $55,000. On the first Business
Day of January of each year thereafter, after making any
withdrawal required on such date pursuant to Section 3.2 or 3.3
hereof, the Trustee shall withdraw from the Revenue Sub-Account
and deposit in the Maintenance Reserve Sub-Account an amount
equal to the Maintenance Reserve Requirement. In addition, the
Trustee shall withdraw from the Revenue Sub-Account and deposit
in the Maintenance Reserve Sub-Account from time to time an
amount sufficient to replenish any funds withdrawn from the
Maintenance Reserve Sub-Account pursuant to Section 4.6(b)
hereof, subject to and in accordance with the priorities set
forth in Section 4.2 hereof.
Section 3.5 Debt Service Reserve Sub-Account Deposits.
On the earlier to occur of the Commercial Operation Date and
February 15, 2000 and on the first Business Day of each Month
thereafter, after making any withdrawal required on such date
pursuant to Section 3.2, 3.3 or 3.4 hereof, the Trustee shall
withdraw from the Revenue Sub-Account and deposit in the Debt
Service Reserve Sub-Account an amount equal to (i) the Debt
Service Reserve Requirement, less (ii) the amount then on deposit
in the Debt Service Reserve Sub-Account, as set forth in a Debt
Service and Reserve Deposit Certificate or Correction Notice.
The amount required to be deposited in the Debt Service Reserve
Sub-Account pursuant to this Section 3.5 in connection with the
DEG Loan shall be calculated on a semi-annual basis at the time
of the preceding Interest Payment Date or at such other time as a
Debt Service and Reserve Deposit Certificate or Correction Notice
is delivered to the Trustee on the basis of the Deutsche ▇▇▇▇ to
US$ exchange rate available to the Trustee in the normal course
of business. Notwithstanding anything contained herein to the
contrary, the amount required to be retained in the Debt Service
Reserve Sub-Account in connection with the B Loan pursuant to
this Section 3.5 shall be determined on the basis of any Hedging
Transactions plus the B Loan Spread made by the Company, and the
Debt Service and Reserve Deposit Certificate or Correction Notice
of any Lender shall specify an amount to be retained in
accordance with this Section 3.5.
Section 3.6 Holding Account Deposits. Provided (i) the
Trustee has not received from either of the Lenders a written
notice stating that the Company is not permitted, under
Section 6.3 of the General Conditions, to make distributions
(unless the Trustee shall have received subsequently written
notice from such Lender that distributions may recommence), (ii)
each of the Operations and Maintenance Sub-Account, the Debt
Payment Sub-Account, the Maintenance Reserve Sub-Account, the
Debt Service Reserve Sub-Account, the Nepal Operations and
Maintenance Sub-Account and the Nepal Reserve Sub-Account
contains funds equal to the maximum amount that would be required
to be funded hereunder and under the Nepal Agency and Retention
Agreement at the time of the next Payment Date (and prior to
making any withdrawals on such Payment Date) (such maximum amount
referred to herein as the "Maximum Amount"), (iii) the Operations
and Maintenance Sub-Account and the Nepal Operations and
Maintenance Sub-Account contain sufficient funds to pay Operating
and Maintenance Costs budgeted for the following two (2)
Quarters, and (iv) all Sub-Accounts hereunder and under the Nepal
Agency and Retention Agreement other than those Sub-Accounts
referenced in clauses (ii) and (iii) are funded to the full
amount then required to be funded hereunder and under the Nepal
Agency and Retention Agreement, at the request of the Company set
forth in a Payment Requisition (which may not be delivered prior
to the Project Completion Date and thereafter may be delivered on
a monthly basis after the Project Completion Date), the Trustee
shall withdraw from the Revenue Sub-Account and deposit in the
Holding Account funds which are in excess of the amounts required
to be on deposit as specified in this Section 3.6, and shall
direct the Designee to withdraw from the Nepal Reserve Sub-
Account and deposit in the Nepal Holding Account funds which are
in excess of the amounts required to be on deposit as specified
in this Section 3.6, as specified in a Payment Requisition.
After any deposits of funds in the Holding Account or the Nepal
Holding Account during a period between Payment Dates, then until
the next Payment Date the Maximum Amount shall be required to be
maintained as described above, and such funding shall be in
addition to the other funding requirements hereunder (including
those set forth in clauses (i), (iii), and (iv) of this Section
3.6).
Section 3.7 Construction Sub-Account Deposits.
(a) The Trustee shall deposit in the Construction Sub-
Account the proceeds of each Disbursement delivered to the
Trustee.
(b) Except as provided in Section 3.3(b) hereof, the
Trustee shall deposit in the Construction Sub-Account the
proceeds of any Deficiency Loan or Deficiency Subscription
received in respect of a Project Funds Shortfall delivered to the
Trustee.
(c) The Trustee shall deposit in the Construction Sub-
Account all amounts paid pursuant to Section 2.1(a) of any
Subscription Agreement and delivered to the Trustee.
(d) The Trustee shall deposit in the Construction
Sub-Account any contractual damages or other amounts (other than
Liquidated Damages Proceeds) paid by or on behalf of the EPC
Contractor under the EPC Contract, including amounts received
from draws under the EPC Performance Guarantee (other than such
draws which are in respect of liquidated damages owed by the EPC
Contractor under the EPC Contract).
(e) Prior to the Commercial Operation Date, the Trustee
shall, from time to time, withdraw from the Revenue Sub-Account
and deposit in the Construction Sub-Account all amounts received
from the NEA pursuant to the PPA.
(f) Prior to the Commercial Operation Date, the Trustee
shall deposit in the Construction Sub-Account all refunds of
import duties received by the Company in Dollars.
Section 3.8 Insurance Proceeds Sub-Account Deposits.
Except as otherwise provided in Section 3.1(c) hereof, the
Company shall remit (or cause to be remitted) to the Trustee for
deposit in the Insurance Proceeds Sub-Account all Insurance
Proceeds (i) relating to each claim or, if related, aggregate
claims in excess of seven hundred fifty thousand Dollars
($750,000) or (ii) received during the occurrence and
continuation of an Event of Default, relating to any loss. In
addition, the Company shall remit to the Trustee for deposit in
the Revenue Sub-Account all Insurance Proceeds relating to any
single loss of seven hundred fifty thousand Dollars ($750,000) or
less to the extent such Insurance Proceeds are not applied by the
Company to repair, restore or replace the Project. The Trustee
shall deposit in the Insurance Proceeds Sub-Account all Insurance
Proceeds received by the Trustee pursuant to any insurance
policies in respect of the Project, except as otherwise provided
in this Section 3.8 or Section 3.1(c) hereof. The Trustee shall
promptly notify each of the Lenders and the Company of its
receipt of Insurance Proceeds.
Section 3.9 Liquidated Damages Sub-Account Deposits. The
Trustee shall deposit in the Liquidated Damages Sub-Account all
Liquidated Damages Proceeds (other than Liquidated Damages
Proceeds received in respect of delays pursuant to the EPC
Contract or the EPC Performance Guarantees) received by the
Trustee, including amounts received from draws under the EPC
Performance Guarantees to the extent such draws are in respect of
liquidated damages (other than for delay) owed by the EPC
Contractor under the EPC Contract.
Section 3.10 Deficiency Sub-Account Deposits. The Trustee
shall deposit in the Deficiency Sub-Account all amounts received
by the Trustee pursuant to Section 3.2(b) of the Share Retention
and Project Funds Agreement.
Section 3.11 Cash Sub-Account Deposits. The Trustee shall
deposit in the Cash Sub-Account all amounts received by the
Trustee pursuant to Article 7 of the Share Retention and Project
Funds Agreement.
ARTICLE 4
WITHDRAWALS FROM ACCOUNTS AND FUNDING REQUIREMENTS
Section 4.1 Special Buyout Event.
(a) Upon the occurrence and during the continuation of a
Special Buyout Event, the Trustee shall accumulate all monies
then held by the Trustee and, unless the Lenders shall otherwise
direct in writing, shall not pay to the Company or any other
Person other than the Lenders any amounts of money held by the
Trustee pursuant to this Agreement; provided, however, that the
Trustee (i) shall continue to make regularly scheduled payments
of Debt Service and (ii) shall make the payments described in
priority First set forth in Section 4.2 hereof until the Trustee
receives from HMGN the Purchase Price (as defined in Section 6.2
of the Project Agreement), identified as such to the Trustee.
(b) The Trustee shall notify each of the Lenders
immediately of the Trustee's receipt of the Purchase Price and
shall apply the Purchase Price and all other funds in the
Offshore Retention Account in accordance with instructions of the
Lenders (it being expressly acknowledged and agreed that such
application of the Purchase Price may include the repayment of
the Loans and the IFC equity) within three (3) Business Days of
the Trustee's receipt of such instructions.
Section 4.2 Revenue Sub-Account Withdrawals. Subject to
Section 4.1 hereof and provided that the Trustee shall not have
received a Notice of Default specifying an Event of Default
(unless the Trustee shall have subsequently received written
notice of the cure or waiver of such Event of Default from the
Lenders), the Trustee is hereby authorized to make withdrawals
from the Revenue Sub-Account pursuant to the applicable Payment
Requisition or Correction Notice, in the following order of
priority:
(a) First: On the first Business Day of each
Quarter commencing after the Commercial Operation Date, withdraw
and transfer for deposit in the Operations and Maintenance Sub-
Account the amount required to be deposited therein pursuant to
Section 3.2 hereof;
(b) Second: On the first Business Day of each Month
commencing after the earlier to occur of the Commercial Operation
Date and September 15, 1999, withdraw and transfer for deposit in
the Debt Payment Sub-Account the amount required to be deposited
therein pursuant to Section 3.3(a) hereof;
(c) Third: On the first Business Day of each
January, withdraw and transfer for deposit in the Maintenance
Reserve Sub-Account the amount, if any, required to be deposited
therein pursuant to Section 3.4 hereof;
(d) Fourth: On the earlier to occur of the Commercial
Operation Date and February 15, 2000, and the first Business Day
of each Month thereafter, withdraw and transfer for deposit in
the Debt Service Reserve Sub-Account, the amount, if any,
required to be deposited therein pursuant to Section 3.5 hereof;
(e) Fifth: On a monthly basis after the Project
Completion Date, withdraw and transfer for deposit in the Holding
Account the amount, if any, permitted to be deposited therein
pursuant to Section 3.6 hereof and Section 6.3 of the General
Conditions.
If, on any date on which funds were required to be deposited in a
sub-account pursuant to priorities First through Fourth above,
the available funds in the Revenue Sub-Account were insufficient
to make some or all of any such deposit, then, subject to and in
accordance with the priorities set forth above, on the first day
of each Month thereafter the Trustee shall withdraw from the
Revenue Sub-Account and deposit into each such sub-account such
shortfall, in addition to any amount required to be deposited in
such sub-account on such date.
Section 4.3 Operations and Maintenance Sub-Account
Withdrawals. Within two (2) Business Days following a request of
the Company pursuant to a Payment Requisition (or a Correction
Notice), the Trustee shall withdraw from the Operations and
Maintenance Sub-Account the amounts set forth in such Payment
Requisition (or Correction Notice) and transfer such amounts to
the payees or to the Nepal Retention Account as specified in such
Payment Requisition or Correction Notice.
Section 4.4 Debt Payment Sub-Account Withdrawals. On
each Payment Date, or, at the request of the Lenders on any other
date on which Debt Service is due and owing to the Lenders, the
Trustee shall withdraw from the Debt Payment Sub-Account and
transfer to the Lenders an amount equal to Debt Service due and
owing to the Lenders, as set forth in a Debt Service and Reserve
Deposit Certificate or Correction Notice.
Section 4.5 Debt Service Reserve Sub-Account Withdrawals.
(a) The Trustee shall, after application to the payment of
Debt Service due and owing to the Lenders of all funds on deposit
in the Debt Payment Sub-Account, withdraw from the Debt Service
Reserve Sub-Account and pay over to the Lenders an amount equal
to the balance of Debt Service then due and owing to the Lenders.
(b) If funds on deposit in the Operations and Maintenance
Sub-Account are insufficient to pay Operating and Maintenance
Costs on the date specified in a Payment Requisition delivered
pursuant to Section 4.3 hereof, before making any withdrawal
required on such date pursuant to Section 4.5(a) hereof, the
Trustee shall withdraw from the Debt Service Reserve Sub-Account
and transfer to the Operations and Maintenance Sub-Account funds
up to the amount of such deficiency, as set forth in a Payment
Requisition or Correction Notice. The Trustee shall notify each
of the Lenders of any withdrawal of funds pursuant to this
Section 4.5(b).
(c) Whenever funds on deposit in the Debt Service Reserve
Sub-Account are in excess of the Debt Service Reserve Requirement
(as specified in the most recent Debt Service and Reserve Deposit
Certificate (or Correction Notice) delivered to the Trustee), the
Trustee shall withdraw such excess funds from the Debt Service
Reserve Sub-Account and transfer such excess funds to the Revenue
Sub-Account.
Section 4.6 Maintenance Reserve Sub-Account Withdrawals.
(a) The Trustee shall withdraw from the Maintenance Reserve
Sub-Account to pay when due costs of scheduled major maintenance
or extraordinary repair or replacement of the Project, in
accordance with a Payment Requisition (delivered to the Trustee
and each of the Lenders at least thirty (30) Business Days prior
to the proposed transfer date) or a Correction Notice.
(b) The Trustee shall, after application to the payment of
Debt Service due and owing on the Loans of all funds on deposit
in the Debt Payment Sub-Account and the Debt Service Reserve Sub-
Account, withdraw from the Maintenance Reserve Sub-Account and
pay over to the Lenders an amount equal to Debt Service then due
and owing to the Lenders. Funds so transferred shall be
replenished on the earliest possible date from available funds in
the Revenue Sub-Account, subject to and in accordance with the
priorities set forth in Section 4.2 hereof.
(c) The Trustee shall notify each of the Lenders of each
withdrawal of funds from the Maintenance Reserve Sub-Account.
Section 4.7 Construction Sub-Account Withdrawals.
(a) Prior to the Project Completion Date and provided that
the Trustee shall not have received a Notice of Default
specifying an Event of Default (unless the Trustee shall have
received subsequently written notice from the Lenders of the
waiver of such Event of Default, and the Lenders shall not have
delivered to the Trustee a Notice of Default specifying an Event
of Default within the 30-day period following receipt of such
notice(s) of waiver), the Company may from time to time request
that funds be withdrawn from the Construction Sub-Account to pay
Project Costs in accordance with a Payment Requisition or
Correction Notice, and the Trustee shall make such withdrawals
and payments as are specified in such Payment Requisition or
Correction Notice.
(b) Prior to the Commercial Operation Date, the Company may
from time to time request that funds be withdrawn from the
Construction Sub-Account to pay Operating and Maintenance Costs
in accordance with a Payment Requisition or Correction Notice,
and upon the Lenders' prior approval thereof, the Trustee shall
make such withdrawals and payments as are specified in such
Payment Requisition or Correction Notice.
(c) From September 15, 1999 until the Commercial Operation
Date, the Company may from time to time request that funds be
withdrawn from the Construction Sub-Account to fund the Debt
Payment Sub-Account pursuant to Section 3.3 hereof in accordance
with a Payment Requisition or Correction Notice, and upon the
Lenders' prior approval thereof, the Trustee shall make such
withdrawals from the Construction Sub-Account and payments into
the Debt Payment Account as are specified in such Payment
Requisition or Correction Notice.
(d) On the Business Day immediately following the
Commercial Operation Date, the balance remaining, if any, of any
proceeds of any Deficiency Loan or Deficiency Subscription on
deposit in the Construction Sub-Account shall, upon the Lenders'
instructions, be transferred to the Persons that provided such
Deficiency Loans or Deficiency Subscriptions (pro rata based on
the relative amounts of such funds provided by such Persons) if
either Lender determines in its good faith judgment that a
Project Funds Shortfall no longer exists. Notwithstanding the
foregoing, each Lender shall maintain the right to issue a
Deficiency Notice (and the Sponsors shall be bound thereby) in
respect of any future Project Funds Shortfall at any time
thereafter in accordance with the Project Funds and Share
Retention Agreement. Upon receipt of a Lender Completion Notice
from the Lenders, the balance remaining, if any, of any proceeds
of any Deficiency Loan or Deficiency Subscription on deposit in
the Construction Sub-Account shall, upon the Lenders'
instructions, be transferred to the Persons that provided such
Deficiency Loans or Deficiency Subscriptions (pro rata based on
the relative amounts of such funds provided by such Persons).
(e) Upon receipt of a Lender Completion Notice from the
Lenders, after making any payments required pursuant to the last
sentence of Section 4.7(c) hereof, the balance remaining, if any,
of all amounts paid pursuant to Section 2.1(a) of the
Subscription Agreements and loan and equity disbursements made
pursuant to the Investment Agreement on deposit in the
Construction Sub-Account shall, upon the Lenders' instructions,
be transferred to the Persons that provided such funds (pro rata
based on the relative amounts of such funds provided by such
Persons).
Section 4.8 Insurance Proceeds Sub-Account Withdrawals.
(a) If, within 30 days of receipt of the Company's notice
that the Project has been damaged or destroyed (and that the
amount of the Company's claim or, if related, aggregate claims is
more than seven hundred fifty thousand Dollars ($750,000) and
less than five million Dollars ($5,000,000)), the Company has
delivered to the Trustee and each of the Lenders a notice that it
wishes to repair, reinstate or make good the loss and the Lenders
have delivered to the Trustee notice that all conditions set
forth in Section 5.3(b)(i)(B) of the General Conditions have been
met, funds on deposit in the Insurance Proceeds Sub-Account shall
be released to the Company from time to time to pay costs of
repair, reinstatement or making good the loss or damage within
ten (10) Business Days following receipt of an Insurance Proceeds
Request. Upon receipt of written notice from the Company that
the repair, reinstatement or making good of the loss or damage
has been completed, the Trustee shall withdraw and transfer from
the Insurance Proceeds Sub-Account any remaining Insurance
Proceeds for deposit in the Revenue Sub-Account (if on or after
the Commercial Operation Date) or the Construction Sub-Account
(if prior to the Commercial Operation Date).
(b) If the Trustee does not receive the notices described
in subsection (a) above or if the Trustee shall have received a
written notice that the amount of the claim or, if related,
aggregate claims with respect to which Insurance Proceeds were
received is five million Dollars ($5,000,000) or more and
following expiration of any consultation period set forth in
Section 5.3(b)(ii) of the General Conditions, funds on deposit in
the Insurance Proceeds Sub-Account shall be released in
accordance with the written instructions of the Lenders.
Section 4.9 Liquidated Damages Sub-Account Withdrawals.
To the extent there is on deposit in the Liquidated Damages Sub-
Account excess Performance Liquidated Damages which have been
paid by the EPC Contractor and are remaining after the payment to
the Lenders specified in Section 3.7(c) of the IFC Special
Conditions and Section 3.7(d) of the DEG Special Conditions, such
excess shall be withdrawn by the Trustee and applied to repay
equity in an amount equal to (x) the Dollar amount which has then
been paid in to the Company for the purchase of Shares,
multiplied by (y) the Capacity Shortfall Percentage. Such amount
shall be divided pro rata (based on the amount of equity
contributed) among all shareholders of the Company. After such
application, any remaining Performance Liquidated Damages shall
be transferred to the Revenue Sub-Account.
Section 4.10 Deficiency Sub-Account Withdrawals.
(a) The Trustee shall apply the amounts in the Deficiency
Sub-Account as directed by the Lenders. On the Business Day
immediately following the Project Completion Date, the balance
remaining, if any, after the application of amounts on deposit in
the Deficiency Sub-Account as directed by the Lenders, of amounts
in such Deficiency Sub-Account shall be transferred to Panda
Energy International, Inc.
(b) The Trustee shall apply the amounts in the Deficiency
Sub-Account as directed by the Lenders. Prior to the Project
Completion Date, the balance remaining, if any, after the
application of amounts on deposit in the Deficiency Sub-Account
as directed by the Lenders, of amounts in such Deficiency Sub-
Account shall be transferred to Panda Energy International, Inc.
in accordance with Section 3.3(c)(iv) of the Share Retention and
Project Funds Agreement.
Section 4.11 Cash Sub-Account Withdrawals.
(a) The Trustee shall apply the amounts in the Cash Sub-
Account as directed by the Lenders. Prior to Final Acceptance,
after the application of amounts on deposit in the Cash Sub-
Account as directed by the Lenders, the Cash Sub-Account Excess
(as such term is defined in the Share Retention and Project Funds
Agreement) shall be transferred to Panda Energy International,
Inc. in accordance with Section 7.1(d) of the Share Retention and
Project Funds Agreement.
(b) The Trustee shall apply the amounts in the Cash Sub-
Account as directed by the Lenders. Following Final Acceptance,
the balance remaining, if any, after the application of amounts
on deposit in the Cash Sub-Account as directed by the Lenders, of
amounts in such Cash Sub-Account shall be transferred to Panda
Energy International, Inc. in accordance with Section 7.1(e) of
the Share Retention and Project Funds Agreement. The Trustee
shall apply such amounts as directed by the Lenders.
Section 4.12 No Other Rights of Withdrawal. Except as
specifically set forth in this Article 4 or in Section 7.4
hereof, the Company shall have no right to request withdrawals in
respect of the Offshore Retention Account.
ARTICLE 5
REMEDIES ON DEFAULT
Section 5.1 Action by the Trustee. If the Trustee
receives a Notice of Default specifying an Event of Default from
the Company or either Lender, then the Trustee shall take such
action or shall refrain from taking such action with respect to
such Event of Default as the Trustee shall be directed in writing
by such Lender. Such actions may include proceeding to protect
and enforce the rights vested in the Trustee by the Loan
Documents (including, without limitation, bringing appropriate
judicial proceedings or taking any of the actions as shall be
provided for in the Loan Documents). Without limiting the
foregoing, if the Trustee receives a Notice of Default specifying
an Event of Default from the Company or either Lender, the
Trustee shall accumulate all monies then held by the Trustee and,
unless the Lenders shall otherwise direct in writing, shall not
pay to the Company or any other Person other than the Lenders any
amounts of monies held by the Trustee pursuant to this Agreement;
provided, however, that the Trustee (i) shall continue to make
regularly scheduled payments of Debt Service, and (ii) unless
otherwise directed in writing by the Lenders, shall make the
payments described in priority First set forth in Section 4.2
hereof.
Section 5.2 For Benefit of the Lenders Only. The
provisions of this Article Five are for the benefit of the
Lenders and the Trustee only and may be enforced only by the
Lenders or the Trustee.
ARTICLE 6
THE TRUSTEE
Section 6.1 Appointment of Trustee; Powers and
Immunities. The Lenders hereby appoint and authorize Wilmington
Trust Company to act as their trustee with respect to the
Collateral as provided herein and in the other Security
Documents, and as their trustee, through its Designee, under the
Nepal Agency and Retention Agreement, with such powers as are
expressly delegated to the Trustee by the terms of this
Agreement, the other Security Documents or the Nepal Agency and
Retention Agreement, as applicable, together with such other
powers as are reasonably incidental thereto. The Trustee shall
not bear any duties or responsibilities except those expressly
set forth in this Agreement, the Nepal Agency and Retention
Agreement and the other Security Documents to which it is a
party, and those necessarily incidental thereto. Except with
respect to the Holding Account or as otherwise expressly provided
herein, the Trustee shall only take such action under this
Agreement as it shall be directed in writing by the Lenders. The
Trustee shall have the right at any time to seek instructions
concerning the administration of this Agreement, the other
Security Documents to which it is a party or the Nepal Agency and
Retention Agreement from the Lenders or any court of competent
jurisdiction. Wilmington Trust Company hereby accepts such
appointment as trustee for the Lenders. In the event (i) a
Sponsor Shareholder fails to make any Subscription Amount Payment
or other payment as and when required under such Sponsor
Shareholder's Equity Subscription Agreement, and/or (ii) Panda
Energy International, Inc. fails to make any Deficiency payment
as and when required under the Share Retention and Project Funds
Agreement, and/or (iii) the Trustee and/or the Lenders receive
notice (x) under any of the Equity Letters of Credit that any
such Equity Letter of Credit will not be extended beyond the
Stated Expiration Date or the New Stated Expiration Date (as such
terms are defined in the Equity Letters of Credit), as the case
may be, or (y) under either the Panda Letter of Credit or the
Panda Project Completion Letter of Credit that such Panda Letter
of Credit or Panda Project Completion Letter of Credit will not
be extended beyond the then applicable expiration date thereof,
the Trustee or the Lenders shall have the right at any time prior
to the Stated Expiration Date, the New Stated Expiration Date or
any other expiration date, as the case may be, to draw the full
amount then available under such Equity Letter of Credit, Panda
Letter of Credit or Panda Project Completion Letter of Credit, as
the case may be. Any amounts so drawn shall be deposited in
accordance with this Agreement or the Nepal Agency and Retention
Agreement, as applicable.
Section 6.2 Reliance by Trustee. The Trustee shall be
entitled to rely upon any signature, certificate, notice or other
document (including any cable, telegram, telecopy or telex)
reasonably believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or
Persons, and shall have no liability for its actions taken
thereupon, unless due to the Trustee's gross negligence or
willful misconduct. As to any matters not expressly provided for
by this Agreement, the Trustee shall not be required or
authorized to take any action or exercise any discretion, but
shall be required to act or to refrain from acting upon
instructions of the Lenders, and shall in all such cases be fully
protected in acting, or in refraining from acting, hereunder in
accordance with such instructions, and any action taken or
failure to act pursuant thereto, shall be binding on the Lenders.
Section 6.3 Court Orders. The Trustee is hereby
authorized, in its exclusive discretion, to obey and comply with
all writs, orders, judgments or decrees issued by any court or
administrative agency affecting any money, documents or things
held by the Trustee, provided the Trustee has notified each of
the Lenders in advance of any such writ, order, judgment or
decree and the Trustee's proposed actions in connection
therewith. The Trustee shall not be liable to any of the parties
hereto, their successors, heirs or personal representatives by
reason of the Trustee's compliance with such writs, orders,
judgments or decrees, notwithstanding such writ, order, judgment
or decree is later reversed, modified, set aside or vacated.
Section 6.4 Concerning The Trustee.
(a) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.4.
(b) Any request, direction or authorization by the Company
or the Lenders shall be sufficiently evidenced by a request,
direction or authorization in writing, delivered to the Trustee,
signed in the name of any such party by any duly authorized
officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be
sufficiently evidenced by a copy of such resolution certified by
the Secretary or an Assistant Secretary of such party, to have
been duly adopted and to be in full force and effect on the date
of such certification, and delivered to the Trustee; provided
that, in the case of any requisition, request or certificate
which by any provision hereof is specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether it conforms on its face to
the requirements of this Agreement.
(c) Whenever in the administration of this Agreement the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder or under any other agreement, the Trustee (unless other
evidence be herein or therein specifically prescribed), absent
actual knowledge to the contrary, may rely in good faith upon a
certificate in writing, delivered to the Trustee and signed by
any duly authorized officer of the Company (provided copies
thereof have been delivered to each of the Lenders) and notice of
such need for such proof or establishment shall be delivered to
the Company and the Lenders, who may advise the Trustee in
respect of such matter and the Trustee shall act in conformity
with such advice.
(d) The Trustee may rely upon the advice of counsel
reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done
in accordance with such advice.
(e) The Trustee shall not be under any obligation to take
any action under this Agreement or under any other agreement at
the request or direction of the Company or the Lenders unless
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by the Trustee in compliance
with such request or direction shall have been offered to the
Trustee; nor shall the Trustee be required to take any action nor
shall any provision of this Agreement be deemed to impose on the
Trustee any obligation to take any action, if the Trustee shall
have been advised by its counsel that such action is unlawful or
is contrary to the terms of this Agreement.
(f) Except as explicitly provided herein, the Trustee shall
not be bound to make any investigation into the accuracy or
completeness of the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document
unless an officer in the Corporate Trust Administration
Department of the Trustee has actual knowledge that the facts or
matters stated therein are false or inaccurate, but the Trustee
may make such further inquiry or investigation into such facts or
matters as instructed by the Lenders.
(g) Except as otherwise provided in written instructions
given to the Trustee by the Lenders, the Trustee shall not have
any duty (i) to arrange for any recording or filing of this
Agreement or any other document or any financing statement or
continuation statement or other notice or document relating
thereto or to arrange for the maintenance of any such recording
or filing, (ii) to arrange for the payment or discharge of any
such recording or filing, (iii) to arrange for the payment or
discharge of any tax, assessment or other governmental charge or
any Lien, (iv) to confirm or verify any financial statements or,
except as explicitly provided herein, observance of any of the
Company's covenants under this Agreement or any other document.
(h) Notwithstanding anything contained herein to the
contrary, neither Wilmington Trust Company nor the Trustee shall
be required to take any action in any jurisdiction other than in
the State of Delaware if the taking of such action will
(i) require the consent or approval or authorization or order of
or the giving of other action in respect of, any state or other
governmental authority or agency of any jurisdiction other than
the State of Delaware unless such consent, approval,
authorization, order or other action has been obtained or given;
(ii) result in any fee, tax or other governmental charge under
the laws of any jurisdiction or any political subdivisions
thereof in existence on the date hereof other than the State of
Delaware becoming payable by Wilmington Trust Company unless such
fee, tax or other governmental charge has been paid; or
(iii) subject Wilmington Trust Company to personal jurisdiction
in any jurisdiction other than the State of Delaware for causes
of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust Company or the Trustee, as the
case may be, contemplated hereby. The Trustee shall be entitled
to obtain advice of counsel (which advice shall be an expense of
the Company) to determine whether any action required to be taken
pursuant to the Agreement results in the consequences described
in clauses (i), (ii) and (iii) of the preceding sentence. In the
event that said counsel advises the Trustee that such action will
result in such consequences, the Trustee shall promptly give
notice to such effect to each of the Lenders, and the Trustee may
appoint a Co-trustee as hereinafter defined in accordance with
paragraph (i) below to take any actions on its behalf.
(i) If there is any enforcement of remedies or exercise of
rights upon the occurrence of an Event of Default, or if the
Trustee deems that, by reason of any present or future law of any
jurisdiction, it may or may not effectively exercise any of the
powers, rights or remedies granted to it under this Agreement or
the other Security Documents, or hold title to the properties, in
trust, as granted under this Agreement or the other Security
Documents, or take any other action which may be desirable or
necessary in connection therewith, or if the Trustee is excused
from taking any required action pursuant to paragraph (h) above,
the Trustee shall be entitled to appoint, to the extent
consistent with applicable law, a separate or additional co-
trustee (a "Co-trustee"). If the Trustee appoints an individual
or institution as a Co-trustee:
(1) the appointment of a Co-trustee by the
Trustee shall be made only with the prior written
consent of the Lenders, which consent shall not be
unreasonably withheld or delayed; and
(2) each and every remedy, power, right,
title, interest, trust, duty and obligation
expressed or intended by this Agreement or the
other Security Documents to be exercised by or
vested in, conveyed to or imposed upon, the
Trustee with respect thereto shall be exercisable
by and vest in the Co-trustee but only to the
extent necessary, appropriate or desirable to
enable it to exercise or have vested in it such
powers, rights, trusts, titles, interests, duties
and obligations and remedies, and every covenant
and obligation necessary, appropriate or desirable
to the exercise thereof by the Co-trustee shall
run to and be enforceable by either of them. The
Trustee shall have the right to terminate the
appointment of a Co-trustee with the prior written
consent of the Lenders, which consent shall not be
unreasonably withheld or delayed. If any
instrument in writing from the Company is required
by the Co-trustee to more fully and certainly vest
in and confirm to it such remedies, rights,
powers, titles, interests, trusts, duties and
obligations, any and all such instruments in
writing shall, on request, be executed,
acknowledged and delivered by the Company. If the
Co-trustee becomes incapable of acting, resigns or
is removed, all the remedies, rights, powers,
titles, interests, trusts, duties and obligations
of the Co-trustee shall vest in and be exercised
by the Trustee until the appointment of a
successor to the Co-trustee.
(j) The Trustee shall not be responsible or liable for any
failure of the Designee to comply with any direction or
instruction delivered by the Trustee, or any failure of the
Designee to perform its covenants or obligations under the Nepal
Agency and Trust Agreement, or any misconduct of the Designee.
(k) In the event the Trustee is uncertain as to the
application of any provision of this Agreement, or such provision
is ambiguous as to its application or is, or appears to be, in
conflict with any other provision hereof, or in the event that
this Agreement permits any determination by the Trustee or is
silent or incomplete as to the course of action which the Trustee
is required to take with respect to a particular set of facts,
then the Trustee may seek instructions from the Lenders and shall
not be liable to any person to the extent that it acts in good
faith in accordance with the instructions of the Lenders.
Section 6.5 Resignation or Removal of Trustee. Subject
to the appointment and acceptance of a successor Trustee as
provided below, the Trustee may resign at any time by giving
notice thereof to each of the Lenders and the Company. The
Trustee may be removed at any time with or without cause by
either of the Lenders. Upon any such resignation or removal, the
Lenders shall appoint a successor Trustee with (prior to an Event
of Default) the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. If no
successor Trustee shall have been appointed by the Lenders and
shall have accepted such appointment within ninety (90) days
after a retiring Trustee's giving of notice of resignation, then
the retiring Trustee may, on behalf of the Lenders, appoint a
successor Trustee, which shall be a bank or trust company
reasonably acceptable to the Lenders. Any successor Trustee
appointed by the Lenders or by a retiring Trustee shall have a
combined capital and surplus of at least $500 million. Upon the
acceptance of any appointment as Trustee hereunder by a successor
Trustee, (i) such successor Trustee shall thereupon succeed to
and become vested with all the rights, powers, privileges and
duties of the Trustee hereunder, and the retiring Trustee shall
be discharged from its duties and obligations hereunder, and
(ii) the retiring Trustee shall promptly transfer the Offshore
Retention Account, the Nepal Retention Account and the Holding
Account and all other Collateral to the possession or control of
the successor Trustee and shall execute and deliver such notices,
instructions and assignments as may be necessary or desirable to
transfer the rights of the Trustee with respect to the Offshore
Retention Account, the Nepal Retention Account and the Holding
Account and all other Collateral to the successor Trustee. After
the retiring Trustee's resignation or removal hereunder as
Trustee, the provisions of this Article 6 and of Article 7 hereof
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
Trustee.
ARTICLE 7
EXPENSES; INDEMNIFICATION; FEES
Section 7.1 Expenses.
(a) The Company agrees to pay or reimburse within thirty
(30) days of demand therefor all out-of-pocket expenses of the
Trustee (including reasonable expenses for legal services) in
respect of, or incident to, the preparation, execution and
delivery of this Agreement, the administration of this Agreement
and the Offshore Retention Account and the other Loan Documents,
the enforcement of any of the provisions of this Agreement or any
other Loan Document or in connection with any amendment, waiver
or consent relating to this Agreement or any other Loan Document,
provided that any such demand is accompanied by such supporting
documentation as may be reasonably requested by the Company.
(b) Without limiting the foregoing, the Company will upon
demand pay to the Trustee or the Designee the amount of any and
all reasonable fees and expenses which the Trustee or the
Designee may incur in connection with:
(i) the administration of this Agreement,
the Nepal Agency and Trust Agreement or any other
Security Document (including, without limitation,
any fees and expenses relating to the conversion
of payments required to be made to any Lender in
any currency other than Dollars),
(ii) the custody, preservation, use or
operation of, or the sale of, collection from, or
other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any
of the rights of the Trustee on behalf of the
Lenders hereunder or under any other Security
Document, or
(iv) the failure by the Company to perform or
observe any of the provisions hereof or under any
Security Document.
(c) In the event the Trustee is required, pursuant to a
written demand from any Governmental Authority, to pay any
withholding taxes to any Governmental Authority, the Trustee
shall promptly notify each of the Lenders and the Company of the
receipt of such written demand and the Company shall promptly
thereafter, but in no event prior to the last date on which such
withholding taxes are due and payable, pay the amount of such
withholding taxes. The Trustee shall not pay any withholding
taxes to such Governmental Authority until the last date on which
such withholding taxes are due and payable. If at any time any
such withholding taxes are payable, the Lenders agree to consult
with the Company with a view to taking, and/or instructing the
Trustee to take, such reasonable steps as the Trustee and the
Lenders may take in order to minimize or eliminate any such
withholding taxes; provided, however, that in no event shall the
Lenders be required to take, or instruct the Trustee to take, any
action which would adversely affect the rights, benefits or
interests of the Lenders under any Principal Document.
Section 7.2 Indemnification.
(a) The Company agrees, unconditionally, absolutely, and
irrevocably, to indemnify and hold harmless Wilmington Trust
Company and the Trustee, its affiliates and their respective
directors, officers, employees, attorneys, agents, servants and
advisors, and their respective successors and assigns (each being
an "Indemnified Party"), from and against any and all
liabilities, damages, penalties, taxes (other than taxes in the
nature of income or gross receipts taxes on the compensation
received by Wilmington Trust Company for its services as Trustee
hereunder), claims (including, without limitation, claims
involving strict liability in tort), actions, costs, expenses and
disbursements (including, without limitation, legal fees and
expenses) of any kind and nature whatsoever which may be imposed
on, incurred by or asserted at any time against such Indemnified
Party in any way relating to this Agreement or any other
Principal Document, the Collateral, the Project, or any part
thereof, any of the transactions contemplated in any other
Principal Document or the performance or enforcement of any of
the terms hereof or thereof, or in any way relating to or arising
out of the creation, acceptance, operation, administration,
ownership or rejection of the trust, the Collateral, the Project,
or any part thereof or any accident in connection therewith
(including, without limitation, latent and other defects, whether
or not discoverable, and any claim for patent, trademark or
copyright infringement), or in any way relating to or arising out
of the administration of the Collateral or the Project or the
action or inaction of such Indemnified Party under this Agreement
or such other documents. The Company shall not be required to
indemnify any Indemnified Party (i) in the case of willful
misconduct or gross negligence (or, in the case of handling of
funds, simple negligence) on the part of an Indemnified Party in
the performance of its duties under this Agreement or (ii) for
the falseness or inaccuracy of any representation or warranty, or
the breach of any covenant of, such Indemnified Party.
(b) Without limiting the generality of the foregoing, the
Company agrees to indemnify and hold harmless each Indemnified
Party from and against any and all liabilities, sums paid in
settlement of claims, obligations, charges, actions (formal or
informal), claims (including, without limitation, claims for
personal injury under any theory or for real or personal property
damage), liens, taxes, administrative proceedings, losses,
damages (including, without limitation, punitive damages,
penalties, fines, court costs, administrative service fees,
response and remediation costs, stabilization costs,
encapsulation costs, treatment, storage or disposal costs,
groundwater monitoring or environmental study, sampling or
monitoring costs, other causes of action and any other costs and
expenses (including, without limitation, reasonable attorneys',
experts' and consultants' fees and disbursements and
investigation, laboratory and data review fees) imposed upon or
incurred by any Indemnified Party (whether or not indemnified
against by any other party) arising directly or indirectly out
of:
(i) the past, present or future treatment,
storage, disposal, generation, use, transport,
movement, presence, release, threatened release,
spill, installation, sale, emission, injection,
leaching, dumping, escaping or seeping of any
Hazardous Materials at or from the Site or the
Project or any part thereof; and/or
(ii) the violation or alleged violation by
the Trustee or any third party of any
Environmental Laws with regard to the past,
present or future ownership, operation, use or
occupying of the Site or the Project or any part
thereof.
(c) The indemnities set forth in this Section shall be in
addition to any other rights the Indemnified Parties may have.
The indemnities and obligations contained herein shall survive
the termination of the trust, any disposition by the Trustee of
its interest in the Collateral, the Project or any other event.
(d) The payor of any indemnity under this Section 7.2 shall
be subrogated to any right of the Indemnified Party in respect of
the matter as to which such indemnity was paid.
(e) The obligations of the Company pursuant to this
Section 7.2 shall survive the termination of this Agreement and
the resignation or removal of such Indemnified Party.
Section 7.3 Fees. The Company agrees to pay the Trustee
the fees as separately agreed to by the Company, the Lenders and
the Trustee in the letter agreement attached hereto as
Schedule F.
Section 7.4 Payments of Expenses and Indemnities.
Amounts required to be paid by the Company under Section 7.1 or
7.2 hereof shall be paid out of funds remaining in the Revenue
Sub-Account after making any withdrawals then required pursuant
to Section 3.2, 3.3, 3.4 or 3.5 hereof, as specified in a Payment
Requisition. If funds so remaining in the Revenue Sub-Account
are insufficient to pay such amounts, the Trustee shall withdraw
from the Debt Service Reserve Sub-Account and transfer to the
Person to whom such amount is owed funds up to the amount of such
deficiency. Funds so transferred shall be replenished on the
earliest possible date from available funds in the Revenue Sub-
Account, subject to and in accordance with the priorities set
forth in Section 4.2 hereof. The insufficiency of funds in the
Revenue Sub-Account and/or the Debt Service Reserve Sub-Account
shall not relieve the Company of its obligations to pay amounts
required to be paid under Section 7.1 or 7.2 hereof.
ARTICLE 8
SATISFACTION AND DISCHARGE OF TRUST
Section 8.1 Satisfaction and Discharge of Trust.
(a) If (i) at any time all Obligations owing to the Lenders
have been paid in full and (ii) a period of one hundred twenty
(120) days (or such other period as may be applicable with
respect to preference or similar periods under applicable
bankruptcy, insolvency or similar laws) has elapsed since the
condition set out in clause (i) is satisfied without any court
determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters, then this Agreement shall cease to be of further effect;
provided that the provisions of Article 7 shall survive such
termination.
(b) If (i) at any time the Trustee shall have received a
notice from the Lenders that all Obligations owing to the Lenders
have been paid in full and all obligations of the Lenders under
the Investment Agreement have terminated, and (ii) a period of
one hundred twenty (120) days (or such other period as may be
applicable with respect to preference or similar periods under
applicable bankruptcy, insolvency or similar laws) has elapsed
since the condition set out in clause (i) is satisfied without
any court determining that the Company is insolvent or, if such
determination is made within that time, the Lenders are
reasonably satisfied that no payment made to the Lenders or the
Trustee by the Company will be set aside as a consequence thereof
under any law relating to bankruptcy, insolvency or similar
matters, then, upon payment in full of all amounts payable to the
Trustee pursuant to Section 7.1, 7.2 or 7.3 hereof, this
Agreement shall cease to be of further effect and the Trustee, at
the cost and expense of the Company, upon delivery to the Trustee
of a certificate signed by two (2) financial officers of the
Company and concurred in by the Lenders stating that all
conditions precedent to the satisfaction and discharge of this
Agreement and the other Security Documents have been complied
with, shall execute proper instruments acknowledging the
satisfaction and discharge of this Agreement and shall transfer
all funds, if any, in the Offshore Retention Account and
investments made with funds in the Offshore Retention Account to
the Company at such place and in such manner to be specified in
writing by the Company. The Lenders agree to give the notice
provided for in this paragraph without unreasonable delay.
ARTICLE 9
PARTICULAR COVENANTS
Section 9.1 Reporting Requirements.
(a) The Company shall deliver to the Trustee copies of each
Annual Budget required to be delivered by the Company to the
Lenders pursuant to the Investment Agreement or any other Loan
Document.
(b) On or before 1 December of each year after the Project
Completion Date, the Company shall deliver to the Trustee and to
each of the Lenders a notice stating the Maintenance Reserve
Requirement for the following year with an explanation of and
documentation supporting the Company's calculation thereof.
Unless the Lenders shall deliver a Correction Notice prior to the
following January 1, the amount set forth in the Company's notice
shall be the Maintenance Reserve Requirement for such year.
(c) The Trustee shall, on a monthly basis and at such other
times as the Lenders or the Company may from time to time
reasonably request, provide to each of the Lenders and the
Company account balance statements in respect of the Offshore
Retention Account.
(d) Within two (2) Business Days of its receipt of such
funds, the Trustee shall notify each of the Lenders and the
Company of each deposit of funds in the Insurance Proceeds Sub-
Account or in the Liquidated Damages Sub-Account, each deposit in
the Construction Sub-Account of proceeds of any Deficiency Loan
or Deficiency Subscription or Subscription Payment Amount, and
each deposit in the Revenue Sub-Account of Liquidated Damages
Proceeds in respect of delays.
(e) The Company will deliver to the Trustee from time to
time, when available, a schedule of Contract Months (as such term
is defined in the PPA) under the PPA. On the last day of each
such Contract Month, the Trustee shall notify each of the Lenders
and the Company if it has not received payment by NEA under the
PPA for the prior Contract Month.
(f) Within two (2) Business Days of the date a payment in
respect of Shares is due from a Sponsor, the Company shall
deliver to the Trustee a properly completed certificate in the
form of Schedule E hereto.
(g) Within two (2) Business Days of its receipt of a
certificate from the Company in the form of Schedule E hereto,
the Trustee shall, upon verification of the information set forth
in items 3, 6 and 7 of such certificate, sign and deliver such
certificate to Nepal Rastra Bank.
Section 9.2 Payment Requisitions, Etc.
(a) Any notice, request or requisition given to the Trustee
shall be in writing and shall state with specificity the date of
the requested transfer, withdrawal, deposit or payment, the
dollar amount, source and disposition of any such funds;
provided, however, that any Payment Requisition or Correction
Notice may be delivered by facsimile. The Lenders or the
Company, as the case may be, may withdraw, modify, delete or
amend any item in any notice, request or requisition delivered by
it by delivering to the Trustee and the other parties hereto a
notice in writing specifying any such withdrawal, modification,
deletion or amendment.
(b) Except as otherwise provided in this Agreement, each
Payment Requisition shall be delivered by the Company to the
Lenders not less than ten (10) Business Days prior to the
proposed date of transfer of funds specified in such Payment
Requisition.
(c) At least ten (10) District of Columbia Business Days
prior to the first day of each Month and each Payment Date after
the Project Completion Date, the Company shall deliver to the
Trustee and each of the Lenders a Debt Service and Reserve
Deposit Certificate. The Trustee shall review such Debt Service
and Reserve Deposit Certificate and will promptly notify the
Company and each of the Lenders if, in the Trustee's opinion
based on its review of the Annual Budget then in effect, the
amounts requested to be transferred to the Operations and
Maintenance Sub-Account or any sub-account of the Nepal Retention
Account exceeds the amount permitted to be transferred to any
such sub-account pursuant to Section 3.2 of this Agreement or
Section 3.2 of the Nepal Agency and Retention Agreement, as
applicable.
(d) The Trustee shall rely on each Payment Requisition or
Debt Service and Reserve Deposit Certificate properly completed
and signed by an Authorized Officer of the Company, unless, prior
to the date funds are withdrawn by the Trustee, the Lenders shall
have delivered a Correction Notice to the Trustee (with copies to
the Company). Upon receipt thereof, the Trustee shall rely on
such Correction Notice or, if the Lenders have issued a
Correction Notice requesting additional information, the Trustee
shall not make any withdrawals of funds until the Lenders have
notified the Trustee that they have received the requested
information and that withdrawals may be made in accordance with
the Payment Requisition or Debt Service and Reserve Deposit
Certificate or the Lenders' Correction Notice. If the Company
fails to deliver any Payment Requisition or Debt Service and
Reserve Deposit Certificate when required hereunder, the Lenders
may do so on the Company's behalf.
(e) Until the Lenders shall otherwise notify the Trustee,
all transfers to be made to the Lenders hereunder shall be in
accordance with the transfer instructions set forth in Schedule D
hereto. All transfers to the Lenders shall be made in Dollars.
Section 9.3 Default Notices. The Company shall give a
Notice of Default to the Trustee and each of the Lenders of any
act, occurrence or condition the happening or existence of which
constitutes a Default or an Event of Default, immediately upon
becoming aware of the occurrence or existence thereof. Each
Lender may also deliver a Notice of Default if a Default or Event
of Default has occurred and is continuing under the Investment
Agreement. Any such Notice of Default shall specify the nature
of such act, occurrence or condition, and any Notice of Default
delivered by the Company shall describe the steps taken by the
Company to cure such Default or Event of Default. The Trustee
shall rely on any Notice of Default it shall receive from either
Lender or the Company. The Trustee shall not be deemed to have
knowledge of a Default or an Event of Default unless and until it
shall have received a Notice of Default in respect thereof from
either Lender or the Company. The Trustee shall deliver copies
of any such notice to the Lenders, the Company and each Sponsor
promptly after receipt thereof.
Section 9.4 Completion Notices.
(a) The Trustee shall, within two (2) Business Days of
receipt from the Company of a Company Completion Certificate,
distribute copies of such Company Completion Certificate to each
of the Lenders, with a notice stating the date on which such
Company Completion Certificate was received by the Trustee.
(b) The Trustee shall, within two (2) Business Days of
receipt from the Lenders of a Lender Completion Notice,
distribute copies of such Lender Completion Notice (and, if such
Lender Completion Notice is undated, a notice stating the date on
which such Lender Completion Notice was received) to the Company.
Section 9.5 Other Notices. The Trustee shall promptly
notify each of the Lenders of any matter of which the Trustee
becomes aware in the course of performance of its obligations
under this Agreement that may, in the opinion of the Trustee, be
of concern to the Lenders, including without limitation, any
failure of the Company to deliver a Payment Requisition, Debt
Service and Reserve Deposit Certificate or other notice or
request to the Trustee when anticipated under the terms of this
Agreement.
Section 9.6 Business Days. If any transfer, withdrawal,
deposit or payment of any funds by the Trustee, or any other
action to be taken by the Trustee under this Agreement is to be
made or taken on a day other than a Business Day, such transfer,
withdrawal, deposit, payment or other action shall be made or
taken on the next succeeding Business Day.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
Section 10.1 Representations and Warranties of the
Company. The Company represents and warrants that as of the date
hereof:
(a) it (i) is a private limited liability company duly
incorporated and registered under the Nepalese Company Act, 2021,
validly existing and in good standing under the laws of Nepal and
(ii) has the power and authority to own its property and assets
and to transact the business in which it is engaged or proposes
to be engaged and to do all things necessary or appropriate in
respect of the Project and to consummate the transactions
contemplated by the Principal Documents;
(b) it has the corporate power to execute, deliver and
perform the terms and provisions of each of the Principal
Documents to which it is party and has taken all necessary
corporate action to authorize the execution, delivery and
performance by it of each of such Principal Documents. The
Company has duly executed and delivered each of the Principal
Documents to which it is party, and each such Principal Document
constitutes its legal, valid and binding obligation;
(c) neither the execution and delivery by the Company of
the Principal Documents to which it is a party, nor the Company's
compliance with or performance of the terms and provisions
thereof, nor the use of the proceeds of the Loans as contemplated
by the Investment Agreement and the other Loan Documents:
(i) will contravene any provision of any
applicable law, statute, rule or regulation or any
order, writ, injunction or decree of any court or
governmental instrumentality or any Governmental
Approval relating to the Company or the Project,
including, without limitation, any Remittance and
Repatriation Approval,
(ii) conflicts or is inconsistent with or
results in any breach of any of the terms,
covenants, conditions or provisions of, or
constitutes a default under, or results in the
creation or imposition of (or the obligation to
create or impose) any Lien (except Permitted
Liens) upon any of the property or assets of the
Company pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement, Loan
Document, Principal Document or any other material
agreement, contract or instrument to which the
Company is a party or by which it or any of its
property or assets is bound or to which it may be
subject, or
(iii) violates any provision of the
Memorandum of Association, the Articles of
Association or the Joint Venture Agreement of the
Company;
(d) no Governmental Approval, except those which have been
obtained or made and are in full force and effect and those which
are listed in Schedule 4.4 to the General Conditions, is required
to authorize, or is required in connection with, (i) the
execution, delivery or performance of any Principal Document to
which the Company is a party, (ii) the legality, validity,
binding effect or enforceability of any such Principal Document
or (iii) carrying out the Project;
(e) it has power to open and maintain the Offshore
Retention Account, the Holding Account and the Nepal Retention
Account and has taken all necessary corporate and other action
required to authorize the opening and maintenance thereof upon
the terms referred to herein and the execution and delivery of
all such documents as are necessary for the purpose thereof;
(f) except for the approval of the Nepal Rastra Bank for
the establishment of the Offshore Retention Account and the
Holding Account and the remittance of foreign currency to and
from the Offshore Retention Account and the Nepal Retention
Account, which have been obtained and are in full force and
effect, it is not necessary to permit the performance of or to
ensure the legality, validity, enforceability or admissibility in
evidence of this Agreement or the assignment, charge, security
interest and Lien on the Collateral created by this Agreement,
that this Agreement be filed, recorded or enrolled with any
Governmental Authority;
(g) all consents, licenses, approvals or authorizations of
or declarations to or registrations with Governmental Authorities
and the payment of all stamp duties and other transaction taxes
required to make this Agreement and the assignment, charge,
security interest and Lien on the Offshore Retention Account
created under this Agreement and the Security Agreement and
Assignment legal, valid and enforceable as a first assignment,
charge, security interest and Lien over the Offshore Retention
Account and admissible in evidence, and to enable it lawfully to
enter into and perform its obligations hereunder and thereunder,
have been obtained or made and are in full force and effect; and
(h) this Agreement and the Security Agreement and
Assignment are effective to create a valid assignment, charge,
security interest and Lien over the Offshore Retention Account
and the Nepal Retention Account, constituting in favor of the
Trustee for the benefit of the Lenders a first priority security
interest with respect to the Offshore Retention Account and the
Nepal Retention Account, and all cash, investments and securities
at any time on deposit therein, to the exclusion of all other
obligations of the Company to its other creditors.
Section 10.2 Representations and Warranties of Wilmington
Trust Company. Wilmington Trust Company, in its individual
capacity, hereby represents and warrants that:
(a) this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms; and
(b) it is a banking corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of
its incorporation and has the corporate power and authority to
enter into and perform its obligations under this Agreement, and
has full right, power and authority to enter into and perform its
obligations as the Trustee under each of the Principal Documents
to which the Trustee is a party; and
(c) the execution, delivery and performance of this
Agreement will not conflict with or result in a breach of any of
the terms, conditions or provisions of, or constitute a default
or require any consent under, any indenture, mortgage, agreement
or other instrument or arrangement to which it is a party or by
which it is bound, or violate any of the terms or provisions of
its articles of incorporation, by-laws or other governing
documents, or any judgment, decree or order or any law, statute,
rule or regulation applicable to it.
ARTICLE 11
MISCELLANEOUS PROVISIONS
Section 11.1 Benefit of Agreement. Nothing in this
Agreement, expressed or implied, shall give or be construed to
give to any Person other than the parties hereto any legal or
equitable right, remedy or claim under this Agreement, or under
any covenant or provision herein contained, all such covenants
and provisions being for the sole benefit of the parties herein
(subject to Section 2.1(b) hereof).
Section 11.2 Successors or Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that neither
the Trustee nor the Company may assign or transfer any of its
rights or obligations hereunder without the prior written consent
of the Lenders. Notwithstanding any such assignment by the
Company, the Company shall remain liable under Sections 7.1 and
7.2 hereof if, as of the date of such transfer, the transferee or
assignee does not have a net worth at least equal to the net
worth of the Company, in each case, as determined on the date of
such transfer. Each of the Lenders may transfer, assign or grant
its rights hereunder in connection with an assignment or transfer
of all or any part of its interest in its Commitment or the IFC
Loans or the DEG Loan, as the case may be, in accordance with the
Investment Agreement.
(b) This Agreement, and the Liens and security interests
granted in the other Security Documents, shall be a continuing
security and accordingly shall not be discharged by an
intermediate payment by or on behalf of the Company.
(c) Any rights conferred on the Trustee or the Lenders by
this Agreement shall be in addition to and not in substitution
for or derogation of any other rights and remedies which the
Lenders may at any time have under the Investment Agreement or
other Loan Documents or otherwise, including, without limitation,
rights to seek and obtain from the Company or any party to the
Security Documents reimbursement of or indemnification against
payments made or liabilities incurred under the Investment
Agreement or the other Loan Documents or otherwise.
(d) Neither the Trustee nor the Lenders shall be obliged
before taking any steps to enforce or to seek to enforce any
rights conferred on any of them pursuant to the security created
by this Agreement and the Security Agreement and Assignment or
before exercising any of the rights, powers and remedies
conferred upon any of them by this Agreement or by law (and the
Company hereby irrevocably waives any right or benefit afforded
by applicable law that would require the Trustee or the Lenders)
(i) to make any demand on or to take action or obtain judgment in
any court against the Company or any party to any Loan Document,
(ii) to make or file any claim in a bankruptcy, winding-up,
liquidation or reorganization of the Company or any such party,
or (iii) to enforce or to seek to enforce any other rights or
remedies either of them may have against the Company or their
rights or remedies against any such party.
Section 11.3 Notices. All notices, demands, requests and
other communications provided for hereunder shall be in writing
and shall be deemed to have been given (a) when presented
personally, (b) when sent by overnight courier service, on the
Business Day following the date of delivery to such courier
service, or such later day as demonstrated by a bona fide receipt
therefor, or (c) when transmitted by facsimile, upon
acknowledgment of receipt by the recipient. Any party may
designate from time to time by written notice to the other
parties another address to which notices are to be sent.
ADDRESSES:
Bhote Koshi Power Company Private Limited
KHA ▇-▇▇▇
▇▇▇▇▇▇▇▇, Tahachal
Kathmandu, Nepal
Attention: Project Manager
Facsimile: 011 977-1-270027
International Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: Director, Power Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇
▇▇▇▇▇ (Mungersdorf)
Federal Republic of Germany
Attention: Infrastructure Department
Facsimile: 011 49 221 4986 107
Trustee or Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 11.4 Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto
in separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together
constitute one and the same instrument.
Section 11.5 Headings Descriptive. The headings of the
several Articles of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction
of any provision of this Agreement.
Section 11.6 Governing Law; Submission to Jurisdiction;
Venue. (a) This Agreement is a contract made under the laws of
the State of Delaware of the United States of America and shall
for all purposes be governed by and construed in accordance with
the laws of such State. Each of the Company and the Trustee
agrees that any legal action or proceeding with respect to this
Agreement may be brought in the courts of the State of Delaware
in the County of New Castle or of the United States for the
District of Delaware and, by execution and delivery of this
Agreement, each of the Company and the Trustee hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each
of the Company and the Trustee agrees that a judgment in any such
action or proceeding shall be conclusive and binding upon itself,
and may be enforced in any other jurisdiction, including without
limitation Nepal, by a suit upon such judgment, a certified copy
of which shall be conclusive evidence of the judgment. The
Company hereby irrevocably designates, appoints and empowers
Corporation Trust Company, with offices on the date hereof at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, as its designee,
appointee and agent to receive, accept and acknowledge for and on
its behalf, and in respect of its property, service of any and
all legal process, summons, notices and documents which may be
served in any such action or proceeding. If for any reason such
designee, appointee and agent shall cease to be available to act
as such, the Company agrees to designate a new designee,
appointee and agent in Wilmington, Delaware on the terms and for
the purposes of this provision satisfactory to the Lenders. The
Company further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at its address set forth
in Section 11.3 hereof, such service to become effective ten (10)
days after such mailing. Nothing herein shall affect the right
of the Trustee or the Lenders to serve process in any other
manner permitted by law or to commence legal proceedings or
otherwise proceed against the Company in Nepal or in any other
jurisdiction.
(b) Each of the Company and the Trustee hereby irrevocably
waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement brought in
the courts referred to in clause (a) above and hereby further
irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
Section 11.7 Survival. All indemnities, agreements,
representations and warranties made herein shall survive the
execution and delivery of this Agreement and the making and
repayment of the Obligations.
Section 11.8 No Waiver; Cumulative Remedies. No failure or
delay on the part of the Trustee or the Lenders in exercising any
right, power or privilege hereunder or under any other Loan
Document, and no course of dealing between the Company and the
Trustee or the Lenders, shall impair any such right, power or
privilege or operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder or
under any other Loan Document preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights, powers and
remedies herein or provided in any other Loan Document are
cumulative and not exclusive of any rights, powers or remedies
which the Trustee or the Lenders would otherwise have. No notice
to or demand on the Company in any case shall entitle the Company
to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Trustee
or the Lenders to any other or further action in any
circumstances without notice or demand.
Section 11.9 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability but that shall not invalidate the
remaining provisions of this Agreement or affect such provision
in any other jurisdiction.
Section 11.10 Communications. All documents to be furnished
or communications to be given or made under this Agreement shall
be in the English language or, if in another language, shall be
accompanied by a translation into English certified by a
representative of the Company, which translation shall be the
governing version between the Company, the Lenders and the
Trustee.
Section 11.11 Amendments. Neither this Agreement nor any of
the terms hereof may be changed, waived, discharged or terminated
unless such change, waiver, discharge or termination is in
writing signed by all of the parties hereto.
Section 11.12 Further Assurances. From time to time, the
Company shall execute and deliver to the Trustee and each of the
Lenders such additional documents as the Lenders may require to
carry out the purposes of this Agreement or to preserve and
protect the Lenders' rights as contemplated herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and acknowledged by their respective
officers or representatives hereunto duly authorized, as of the
date first above written.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:
Name:
Title:
INTERNATIONAL FINANCE CORPORATION
By:
Name:
Title: Authorized Signatory
DEG-DEUTSCHE INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH
By:
Name:
Title:
WILMINGTON TRUST COMPANY, in its individual
capacity and as Trustee
By:
Name:
Title:
SCHEDULE A
FORM OF PAYMENT REQUISITION
[Date]
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
Attention: Corporate Trust Administration
International Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: Director, Power Department
DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇
▇▇▇▇▇ (Mungersdorf)
Federal Republic of Germany
Attention: Infrastructure Department
Dear Sirs:
Reference is made to the Trust and Retention Agreement
(the "Agreement"), dated as of the Closing Date, among Bhote
Koshi Power Company Private Limited (the "Company"),
International Finance Corporation ("IFC"), DEG-Deutsche
Investitions-und Entwicklungsgesellschaft mbH ("DEG") and
Wilmington Trust Company, as trustee (the "Trustee").
Capitalized terms used herein without definition shall have the
meanings specified in Schedule A to the General Conditions.
I. The Company hereby requests that, on ,
the Trustee, in accordance with Section 4.3 of the Agreement,
withdraw the following amounts from the Operations and
Maintenance Sub-Account and transfer such amounts to the payees
indicated below:
Payee Amount of Payment
[Nepal Retention Account]
The Company hereby requests that the Trustee instruct the
Designee to deposit $ in the Nepal Dollar Sub-
Account.
The Company hereby certifies that such withdrawals and
transfers are to be made to pay Operating and Maintenance Costs
or Project Costs, that the Dollars requested to be deposited in
the Nepal Dollar Sub-Account will be used to pay Operating and
Maintenance Costs or Project Costs, and that the amount of such
Operating and Maintenance Costs to be paid does not exceed by
more than 10% the amount budgeted therefor in the Annual Budget
for the relevant period.
II. The Company hereby requests that, on ,
the Trustee withdraw the following amounts from the Construction
Sub-Account and transfer such amounts to the payees indicated
below:
Payee Amount of Payment
The Company hereby certifies that such withdrawals and
transfers are to be made to pay Project Costs and that the amount
of each Project Cost to be paid does not exceed the amount
budgeted therefor in the Annual Budget for the relevant period.
III. The Company hereby requests that the Trustee withdraw, in
accordance with Section 4.5(b) of the Agreement, from the Debt
Service Reserve Sub-Account the amount of US$_____________ and
transfer such amount to the Operations and Maintenance Sub-
Account on [specify Business Day not earlier than Business
Days from the date of delivery hereof to each of the Lenders and
the Trustee]. The Company hereby certifies that, without such
transfer, funds on deposit in the Operations and Maintenance Sub-
Account are insufficient to pay when due Operating and
Maintenance Costs.
IV. The Company hereby requests that, on [specify Business
Day not earlier than 30 Business Days from the date of delivery
hereof to each of the Lenders and the Trustee] the Trustee, in
accordance with Section 4.6 of the Agreement, withdraw the
following amounts from the Maintenance Reserve Sub-Account and
transfer such amounts to the payees indicated below:
Payee Amount of Payment
The Company certifies that such withdrawals and transfers are
to be made to pay costs of scheduled major maintenance or
extraordinary repair or replacement of the Project.
V. The Company hereby requests that, on [enter date, which occurs
monthly after the Project Completion Date], the Trustee withdraw
the following amount from the Revenue Sub-Account and transfer
such amounts to the Holding Account: $______________________.
In addition, the Company hereby requests that the Trustee direct
the Designee to withdraw from the Nepal Reserve Sub-Account, on
[same date], the following amount from the Nepal Reserve Sub-
Account and transfer such amounts to the Nepal Holding Account:
Rs._____________.
The Company hereby certifies that:
(i) no Default or Event of Default has occurred and is
continuing, no Force Majeure Event has occurred (unless
the effect of such Force Majeure Event has been cured to
the Lenders' satisfaction), and no event of default or
default under any other Indebtedness of the Company will
occur as a result of the contemplated transfer;
(ii) the Debt Service Reserve Sub-Account, Debt Payment
Sub-Account, Maintenance Reserve Sub-Account, the
Operations and Maintenance Sub-Account, the Nepal
Operations and Maintenance Sub-Account, the Nepal Reserve
Sub-Account, the Nepal Dollar Sub-Account, and the Nepal
▇▇▇▇▇ Cash Sub-Account are funded to the extent required
under the Agreement or the Nepal Agency and Retention
Agreement, as the case may be;
(iii) the Debt Service Coverage Ratio for the
preceding 12-month period equaled or exceeded 1.20:1 and,
based on the Company's projections (calculated on the
basis of assumptions developed by the Company and
approved by the Lenders), the Debt Service Coverage Ratio
for the following 12-month period will remain above
1.20:1;
(iv) the aggregate amount to be transferred to the
Holding Account equals the amount of funds remaining in
the Revenue Sub-Account on [any date on a monthly basis
occurring after the Project Completion Date] as specified
in Section 3.6 of the Agreement; and
(v) if IFC is a shareholder of the Company, the Person
nominated by IFC is a member of the Board of Directors of
the Company or such Person has resigned from the Board of
Directors of the Company and IFC has not nominated a
replacement therefor.
VI. The Company hereby certifies that:
(i) as of the date hereof no Default or Event of Default
has occurred and is continuing which has not been waived
by the Lenders [or if a Default exists, specifying the
nature and extent thereof and what action the Company is
taking with respect thereto]; and
(ii) a copy of this Payment Requisition has been timely
delivered to each of the Lenders in accordance with the
provisions of the Agreement.
The undersigned hereby certifies that he/she is an Authorized
Officer of the Company, and that, as such, is authorized to
execute and deliver this Payment Requisition on behalf of the
Company.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:
Name:
Title:
SCHEDULE B
FORM OF INSURANCE PROCEEDS REQUEST
[Date]
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
USA
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Dear Sirs:
Reference is made to the Trust and Retention Agreement (the
"Agreement"), dated as of the Closing Date among Bhote Koshi
Power Company Private Limited (the "Company"), International
Finance Corporation ("IFC"), DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH ("DEG") and Wilmington Trust
Company, as Trustee (the "Trustee"). Capitalized terms used
herein without definition shall have the meanings specified in
Schedule A to the General Conditions.
The Company hereby certifies that the following information
is true, correct and complete:
1. No Event of Default under the Loan Documents has
occurred and is continuing.
2. The Company hereby requests that the Trustee
withdraw funds from the Insurance Proceeds Sub-Account
and make the following payments in respect of work
completed or materials furnished in connection with the
repair, restoration or replacement of the Project:
Amount Payee
3. The sum requested above either has been paid by
the Company, or is, to the best of the Company's
knowledge, justly due to the contractors,
subcontractors, materialmen, engineers, architects or
other Persons who have rendered services or furnished
materials for the repair, restoration or replacement of
the Project. Attached hereto is a brief description of
such services and materials and the amounts so paid or
due to each of said Persons in respect thereof. No
part of such expenditures has been or is being made the
basis, in any previous or pending request, for the
withdrawal of funds from the Insurance Proceeds Sub-
Account or has been made out of Insurance Proceeds
received by the Company, and the sum requested does not
exceed the value of the services and materials
described in this certificate.
4. Except for the amount, if any, stated pursuant to
the foregoing paragraph 3 to be due for services and
materials, plus any pending requests made pursuant to
the foregoing paragraph 3, there is no outstanding
Indebtedness shown on the Company's books or known to
the undersigned, after due inquiry, which is due and
payable on the date hereof for labor, wages, materials,
supplies or services in connection with such repair,
restoration or replacement of the Project.
5. To the best of the Company's knowledge, the cost,
as estimated by the undersigned, of the repair,
restoration or replacement of the Project required to
be done subsequent to the date hereof in order to
complete the same, does not exceed funds remaining in
the Insurance Proceeds Sub-Account.
6. A copy of this Insurance Proceeds Request has been
timely delivered to each of the Lenders in accordance
with the Agreement.
The undersigned hereby certifies that he/she is an
Authorized Officer of the Company, and that, as such, is
authorized to execute and deliver this Insurance Proceeds Request
on behalf of the Company.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:
Name:
Title:
SCHEDULE C
FORM OF DEBT SERVICE AND RESERVE DEPOSIT CERTIFICATE
[Date]
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
International Finance Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: Director, Power Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇
▇▇▇▇▇ (Mungersdorf)
Federal Republic of Germany
Attention: Infrastructure Department
Facsimile: 011 49 221 4986 107
Dear Sirs:
Reference is made to the Trust and Retention Agreement (the
"Agreement"), dated as of the Closing Date among Bhote Koshi
Power Company Private Limited (the "Company"), International
Finance Corporation ("IFC"), DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH ("DEG") and Wilmington Trust
Company, as Trustee (the "Trustee"). Capitalized terms used
herein without definition shall have the meanings specified in
Schedule A to the General Conditions.
I. In accordance with Section(s) [enter 3.2, 3.3, 3.4 or 3.5 as
appropriate] of the Agreement, the Company hereby sets forth the
following information, certifies that such information is true,
correct and complete for the date to which this Debt Service and
Reserve Deposit Certificate relates, and requests that the
Trustee make the following deposits to the specified sub-accounts
from the Revenue Sub-Account (Account No. 43370-1) as set forth
below:
Account Deposit Amount
Operations and Maintenance
Sub-Account:
_________________
(Account No. 43370-2)
1.10 x Amount budgeted
for Quarter: __________________
Current Balance: __________________
Debt Payment Sub-Account
__________________
(Account No. 43370-3)
Debt Service Reserve Sub-Account
__________________
(Account No. 43370-4)
Debt Service Reserve
Requirement: __________________
Current Balance:
__________________
Maintenance Reserve Sub-Account
__________________
(Account No. 43370-5)
In addition, the Company hereby certifies that
(i) for the Quarter commencing on [insert date], the
amount of Rupees budgeted in the Annual Budget for
Operating and Maintenance Costs payable in Rupees is
_________Rs., and the Company requests that the Trustee
direct the Designee to deposit such amount multiplied
by 1.10, minus ________ (the amount currently on
deposit in the Nepal Operations and Maintenance Sub-
Account) in the Nepal Operations and Maintenance Sub-
Account;
(ii) the Rupee amounts received from NEA pursuant to
the PPA deposited in the Nepal Retention Account since
the date of the most recent Debt Service and Reserve
Deposit Certificate delivered to the Trustee equals in
the aggregate __________Rs.; and
(iii) the Company requests that the Trustee direct
the Designee to convert all remaining Rupees in the
Nepal Retention Account, ________Rs., into Dollars in
accordance with the procedures set forth in the Nepal
Agency and Retention Agreement.
II. The Company hereby requests that the Trustee, in accordance
with Section 4.4 of the Agreement, make each of the following
payments to the Lenders in respect of Debt Service from the
account indicated on [insert applicable Payment Date]:
Amount of Account from Which
Debt Service** Funds to be Transferred
The undersigned hereby certifies that he/she is an
Authorized Officer of the Company, and that, as such, he/she is
authorized to execute and deliver this Debt Service and Reserve
Deposit Certificate on behalf of the Company.
The Company hereby certifies to the Trustee that a copy of
this Debt Service and Reserve Deposit Certificate has been timely
delivered to each of the Lenders in accordance with the
provisions of the Agreement.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:
Name:
Title:
SCHEDULE D
TRANSFER INSTRUCTIONS
For IFC:
Northern Trust International Banking Corporation
New York, New York
(Account No. CHIPS ID 142255), in favor of
International Finance Corporation
For DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH:
Westdeutsche Landesbank Koeln
Account: 406066
Bank Number: BLZ 370 50000
For Wilmington Trust Company:
Wilmington Trust Company
ABA Routing Number ▇▇▇▇▇▇▇▇▇
For Credit to the Appropriate Account Name,
For Credit to the corresponding Account Number
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SCHEDULE E
FORM OF CERTIFICATE OF EQUITY CAPITAL INVESTMENT
Wilmington Trust Company
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Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[DATE]
Dear Sirs:
Reference is made to the Trust and Retention Agreement (the
"Agreement"), dated as of the Closing Date among Bhote Koshi
Power Company Private Limited (the "Company"), International
Finance Corporation ("IFC"), DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH ("DEG") and Wilmington Trust
Company, as Trustee (the "Trustee"). Capitalized terms used
herein without definition shall have the meanings specified in
Schedule A to the General Conditions.
The Company was due on [Date] a payment of $___________ in
respect of Shares issued to [Sponsor].
In accordance with Section 9.1(f) of the Agreement, the
Company hereby delivers the attached certificate and certifies
that the information contained therein is true, correct and
complete for the date to which such certificate relates.
The undersigned hereby certifies that he/she is an
Authorized Officer of the Company, and that, as such, he/she is
authorized to execute and deliver this certificate on behalf of
the Company.
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:
Name:
Title:
WILMINGTON TRUST COMPANY
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Nepal Rastra Bank
Central Office
Foreign Exchange Department
Investment Section
P.O. Box Number 73
Baluwatar-Kathmandu, Nepal
THE RECEIPT OF FUNDS AS EQUITY
CAPITAL INVESTMENT IN NEPAL COMPANY
FROM FOREIGN INVESTOR
BANK CERTIFICATE
FORM DATE
NO.
1. Name of Industry/Company
In which foreign investor is investing:
2. Industry/Company Registration Number:
3. Name of foreign investor:
Address of foreign investor:
4. Industry/Company's
(a) Authorized Capital:
(b) Paid Up Capital:
5. Foreign investors investment
(a) Amount
(b) Percentage
6. Details of funds deposited in the Bank by
foreign investor
(a) Currency & Amount
(b) Equivalent Nepali rupees
7. Foreign currency deposited in
(a) Agency Bank's Name
(b) Date
I/we certify that the above stated foreign exchange has been
deposited in this bank.
_____________________________
Authorized Signature
Bank Stamp
cc: 1. Industry Department, His Majesty's Government,
Tripureswor, Kathmandu, Nepal
2. Ministry of Water Resources, His Majesty's
Government, Singa Durbar, Kathmandu, Nepal
SCHEDULE F
FEE AGREEMENT
This Agreement is made as of the Closing Date by and among
Wilmington Trust Company, a Delaware banking corporation
("Wilmington Trust"), International Finance Corporation, an
international organization organized and existing by virtue of
the Articles of Agreement among its member countries ("IFC"), DEG-
Deutsche Investitions-und Entwicklungsgesellschaft mbH, a company
organized and existing under the laws of the Federal Republic of
Germany ("DEG") (IFC and DEG collectively referred to herein as
the "Lenders") and Bhote Koshi Power Company Private Limited, a
private limited liability company registered under the Nepalese
Company Act, 2021 (the "Company").
W I T N E S S E T H
WHEREAS, pursuant to a Trust and Retention Agreement dated
as of the Closing Date (the "Trust Agreement"), among Wilmington
Trust, IFC, DEG and the Company, Wilmington Trust will act as
Trustee on behalf of the Lenders in connection with the financing
of a hydroelectric power plant in Sindhupalchok District in
Nepal;
WHEREAS, pursuant to Section 7.3 of the Trust Agreement, the
Company has agreed to pay the fees and expenses of Wilmington
Trust for its services as Trustee, as agreed to by Wilmington
Trust, the Lenders and the Company;
WHEREAS, Wilmington Trust, the Lenders and the Company
desire to set forth with greater particularity the specific
agreement as to the compensation owing to Wilmington Trust
pursuant to the Trust Agreement;
NOW, THEREFORE, for good and valuable consideration, the
parties hereto hereby agree as follows:
(a) The compensation due and owing to Wilmington Trust
pursuant to Section 7.3 of the Trust Agreement shall be as
follows:
(i) Initial Fee: $15,000.00
(This fee covers the in-house legal and administrative review of
all operative documents, the establishment of domestic and
international accounts and cash flows and administrative duties
related to the closing.)
(ii) Annual Administration Fee: $18,000.00
(This fee covers the administration of the trust under the Trust
Agreement.)
(iii) Closing Attendance Fee: $1,000.00
(This fee includes travel expenses for one officer's attendance
at closing in New York City or Washington, D.C. for up to two
days; to the extent that more than two days' attendance is
necessary, there will be an additional fee of $500.00 per day.
Should it be required to send two officers, there will be a
$500.00 fee for the second officer's attendance. The Closing
Attendance Fee for the officer's attendance at closing in other
cities is $750.00 per day plus travel expenses; to the extent
that more than two days attendance is necessary there will be an
additional fee of $500.00 per day.)
(iv) Transaction Fees: (ONLY IF INCURRED)
Purchase, sale, withdrawal,
maturities, calls and puts of
domestic securities: $15.00
Physical delivery of
domestic securities $50.00
Purchase of Eurodollar
certificate of deposit: $65.00
Principal amortizing securities
(per pool/per month): $10.00
Wire charge (per transfer):
Outgoing: $12.00
Incoming: $ 7.00
Expenses Related to the Conversion of Payments to the Lenders
in any Currency other than Dollars
(Transfers made by associate banks may result in additional wire
charges.)
(v) Transfer or Re-Registration Fee:
(ONLY IF INCURRED) $1,000.00
(vi) Termination Fee: To be determined
(Wilmington Trust reserves the right to charge a fee relating to
the termination of the trust and the final distribution of the
[Trust Property] held by the Trustee, such fee to be determined
at the time of termination.)
Wilmington Trust acknowledges and agrees that the Lenders shall
not be responsible or liable for the payment of any of its fees
or expenses for its services as Trustee as provided herein, and
further acknowledges and agrees that it shall look solely to the
Company for the payment of all such fees and expenses.
(b) In the event of a substantive change in the nature of
the Trustee's duties, and in any event after the expiration of
three years from the closing date, Wilmington Trust reserves the
right to adjust its fees.
(c) The Initial Fee, the first year's Annual Administration
Fee, the Closing Attendance Fee and outside counsel's fees and
expenses are due and payable within 30 days after the closing.
Thereafter, the Annual Administration Fee is due and payable
annually in advance on each anniversary of the closing date.
Transaction Fees are due and payable annually in arrears. All
fees are nonrefundable and will not be pro rated in the event of
an early termination of the trust. In the event that the
transaction does not close, Wilmington Trust reserves the right
to be paid its initial fee.
(d) Out of pocket expenses (including outside counsel's
fees and expenses in connection with the closing and in
connection with any post-closing matters) are additional and are
billed separately.
(e) This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and
delivered shall be an original, but all of such counterparts
shall together constitute but one and the same Agreement.
(f) Invoices should be sent to the Company, with a copy to
each of the Lenders, at the addresses set forth below, or at such
other address as such party shall hereafter furnish in writing:
Bhote Koshi Power Company Private Limited
KHA ▇-▇▇▇
▇▇▇▇▇▇▇▇, Tahachal
Kathmandu, Nepal
Attention: Project Manager
Facsimile: 011-977-1-270027
International Finance Corporation
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Attention: Director, Power Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH
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▇-▇▇▇▇▇
▇▇▇▇▇ (Mungersdorf)
Federal Republic of Germany
Attention: Infrastructure Department
Facsimile: 011 49 221 4986 107
(g) No waiver, modification or amendment of this Agreement
shall be valid unless executed in writing by the parties hereto.
(h) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard
to conflicts of laws principles.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers
effective as of the day first above written.
WILMINGTON TRUST COMPANY
By:_______________________________
Name:__________________________
Title:_________________________
BHOTE KOSHI POWER COMPANY PRIVATE LIMITED
By:_______________________________
Name:__________________________
Title:_________________________
INTERNATIONAL FINANCE
CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
DEG-DEUTSCHE INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH
By:_______________________________
Name:__________________________
Title:_________________________
_______________________________
** Specify by amount of principal, interest, fees or other amount owed.