Common use of Advance Payment Terms Clause in Contracts

Advance Payment Terms. (a) Pursuant to the terms of this Section 6(B), Buyer shall make an advance payment to Seller in [...***...] (the “Advance Payment”) to enable Seller to purchase goods, materials and/or services required for Seller’s manufacture of the Components so that Seller may meet its obligations to Buyer under this Agreement. [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] Provided that Seller is in compliance with all terms of this Agreement, including all of the conditions precedent described in subsection (f) below, Buyer shall; process the payment of each portion of the Advance Payment to Seller upon receipt of Seller’s invoice for the applicable portion of the Advance Payment in the amount as set forth on the table above and receipt of the required check. (b) [...***...]. (c) [...***...]. (d) Seller shall repay the “Outstanding Balance of Advance Payment” (defined below) in full to Buyer without interest by providing Buyer with a credit [...***...] on the purchase pace of each Component purchased under the Supply Agreement or deemed, regardless of whether such Component was actually manufactured or delivered, to be purchased and invoiced in accordance with the Minimum Annual Volume Obligation of Appendix 1 of the Agreement. In addition to the foregoing credits, Seller may make additional repayments of the Outstanding Balance of Advance Payment to Buyer in cash through issuance of additional purchase price credits or otherwise. In all cases where Seller is repaying the Advance Payment through [...***...] ordered under the Supply Agreement, Seller shall provide Buyer with an invoice for [...***...] (e) Buyer shall verify all purchase orders issued under the Supply Agreement (“POs”) and invoices against receipts by Buyer to ensure that the Advance Payment is accounted for accurately and completely repaid to Buyer. (f) The obligations of Seller to Buyer with respect to the Advance Payment shall be secured by the following, each of which shall be fully executed by the parties thereto and delivered to Buyer on or before the deadlines set forth herein: (i) To be delivered on the date of the Sixth Amendment of Supply Agreement: The Sixth Amendment to Supply Agreement. (ii) To be delivered on or before the first disbursement of the Advance Payment and in all events by March 30, 2012 and as a condition precedent to Buyer’s first disbursement of the Advance Payment: (A) a Standby Letter of Credit (the “Letter of Credit”) [...***...] and shall be in the same form attached hereto and incorporated herein as Appendix 7, executed by the appropriate party, with all blanks completed: (B) a Guaranty (the “Guaranty”), which shall be in the same form as the guaranty attached hereto and incorporated herein as Appendix 8, executed by TPI Composites, Inc., with all blanks completed, as indirect owner of seventy five percent (75%) of the capital stock of Seller (“TPI”), guaranteeing the full amount of the Outstanding Balance of Advance Payment hereunder executed in favor of Buyer; (C) a Share Pledge Agreement (the “TPI Share Pledge Agreement”) executed by TPI Turkey, LLC, TPI turkey II, LLC and TPI Turkey III, LLC in favor of Buyer with respect to such entities’ ownership of Seller, which shall be in the form attached hereto and incorporated herein as Appendix 9, executed by TPI Turkey, LLC, TPI Turkey II, LLC and TPI Turkey III, LLC , with all blanks completed; (D) a Share Pledge Agreement (the “ALKE Share Pledge Agreement”) executed by ALKE ÎNŞAAT SANAY VE TICARET A.Ş., a Turkish joint stock company (“ALKE”), Sarp Kemaloğlu (“▇. ▇▇▇▇▇▇▇▇▇”), Yildizfer Kemaloğlu Akin (“Altin”) and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (“▇. ▇▇▇▇▇▇▇▇▇”); which shall be in the form attached hereto and incorporated herein as Appendix 10, executed by ALKE, S Kemaloğlu, Altin and A. Kemaloğlu, with all blanks completed; (E) the original stock certificates of Seller owned by TPI Turkey, LLC, TPI Turkey II, LLC and TPI Turkey III, LLC, ALKE, S. Kemaloğlu, Akin, and A. Kemaloğlu, representing one hundred percent (100%) of the equity interests in Seller; (F) an invoice for the first disbursement and a check from Seller to Buyer, which check shall be in compliance with the laws of Turkey, [...***...], which shall be held undeposited so long as no Default occurs hereunder, but which may be deposited by Buyer to the extent a Default has occurred, and to the extent the Outstanding Balance of Advance Payment has not been repaid to Buyer; (G) corporate resolutions of Seller approving the execution and delivery of this Agreement and all related documents land a certified copy of the shareholders ledger of Seller indicating that (he pledge has been established; (H) corporate resolutions of TPI approving the execution and delivery of Guaranty; (I) evidence of authorization of the TPI Share Pledge Agreement satisfactory to Buyer, and (J) corporate resolutions of ALKE approving the execution and delivery of its Share Pledge Agreement. (iii) To be delivered on the date of the second disbursement of the Advance Payment and as a condition precedent to Buyer’s second disbursement of the Advance Payment; An invoice for the second disbursement of the Advance Payment and a [...***...], which check shall be in compliance with the laws of Turkey and which shall be held undeposited so long as no Default occurs hereunder, but which may be deposited by Buyer to the extent a Default has occurred, and to the extent the Advance Payment has not been repaid to Buyer. (iv) To be delivered on the date of the third disbursement of the Advance Payment and as a condition precedent to Buyer’s third disbursement of the Advance Payment: An invoice for the disbursement of the Advance Payment and a [...***...], which check shall be in compliance with the laws of Turkey and which shall be held undeposited so long as no Default occurs hereunder, but which may be deposited by Buyer to the extent a Default has occurred, and to the extent the Advance Payment has not been repaid to Buyer. (g) If at any time during the term of this Agreement the total amount of the Outstanding Balance of Advance Payment [...***...], Seller agrees to increase the amount of the Guaranty to equal the total amount of such Outstanding Balance of Advance Payment. In no event shall Buyer be required to make any Advance Payment in excess of the lesser of lite amount of the Guaranty or the value of the collateral hereunder. To the extent that Buyer incurs any costs or expenses in collecting the Outstanding Balance of Advance Payment or otherwise protecting or enforcing its rights under the Section 6B of the Supply Agreement, including by not limited to securing its interests in the collateral or enforcing the Guaranty or the TPI Share Pledge Agreement and the ALKE Share Pledge Agreement (collectively, the “Share Pledge Agreements”), such costs and expenses will be deemed a part of the Outstanding Balance of Advance Payment hereunder, due from Seller to Buyer on demand, will be included in the obligations owed to Buyer and will bear interest from the incurring or payment thereof at the a rate equal to the “Prime Rate” as defined in The Wall Street Journal [...***...] (the “Default Rate”). Seller shall pay all costs related to obtaining the Letter of Credit and all costs imposed by the issuer of the Letter of Credit in connection with the presentation and honoring of draws thereunder. (h) The obligation of Seller to fully repay the Outstanding Balance of Advance Payment as set forth herein shall not be reduced or discharged by any alteration in the relationship between Seller and Buyer, or by any forbearance or indulgence by Buyer towards Seller, whether as to payment, time, performance or otherwise. Seller agrees to make any payment due hereunder or that becomes payable for the Outstanding Balance of Advance Payment without set-off or counterclaim and without any legal formality, such as protest or notice, being necessary and waives all privileges or rights which it may have, other than payment, including any right to require GE to claim payment or to exhaust remedies against any other person or entity. (i) Seller may pay in advance through purchase price credits, in cash or any combination thereof any or all of the Outstanding Balance of Advance Payment at any time. Buyer shall recover any remaining Outstanding Balance of Advance Payment in accordance with the applicable repayment provisions set forth in Section 6B(d) above or as otherwise provided in Section 6B(k) and 6B(l) below, Seller represents, warrants and covenants that is has been and shall continue to use reasonable best efforts to obtain an alternative source of financing on reasonable commercial terms to allow Seller to repay the Outstanding Balance of Advance Payment in full as soon as possible, and, to the extent that Seller is offered financing on reasonable commercial terms, it shall accept such offer, and close such financing expeditiously and promptly pay off the Outstanding Balance of Advance Payment upon the closing of the refinancing. (j) Time is of the essence hereof. (k) Notwithstanding any other provision of this Section 6B of this Agreement, any Outstanding Balance of Advance Payment not repaid by Seller shall become immediately due and payable upon the occurrence of any of the following (each, a “Default”): (i) Seller is in material breach or default of its obligations under this Section 6B of this Agreement and fails to cure such default with fifteen (15) days after receipt of written notice from Buyer to cure such default; (ii) Seller is in material breach or default of its other obligations under this Agreement and fails to cure such default within the applicable time period for such cure set forth in this Agreement and Buyer has elected to terminate this Agreement in accordance with Section 3 of this Agreement; (iii) Seller is in material breach or default of any of the POs issued under this Agreement and fails to cure such default within the applicable time period for such cure set forth in such POs and Buyer has elected to terminate this Agreement in accordance with Section 3 of this Agreement; (iv) Buyer terminates this Agreement for convenience in accordance with Section 3 of this Agreement and Seller has failed to repay the Outstanding Balance of Advance Payment by the deadline set forth in subsection (1) below; (v) Seller or TPI ceases to conduct its operations in the normal course of business, including the inability to meet its obligations as they mature; (vi) if any proceeding under the bankruptcy or insolvency laws is brought by or against Seller or TPI; (vii) a receiver for Seller is appointed or applied for; (viii) an assignment for the benefit of creditors is made by Seller or TPI; (ix) (l) Seller or TPI enters into any transaction of merger, consolidation or amalgamation, the surviving entity of which has, as measured on the closing date of such transaction (A) a ratio of cash and cash equivalents to short term liabilities or (B) a ratio of debt to equity which are materially lower than the corresponding ratios of Seller or TPI, as applicable, on such closing date, (2) Seller or TPI conveys, sells, leases or transfers, in one or a series of transactions, all or substantially all of its assets, or (3) TPI sells, transfers or otherwise disposes of, or any third party acquires, the capital stock of Seller now owned by TPI; or (x) Buyer has given written notice to Seller that Buyer has reasonably determined that the prospect of Seller’s repayment of the Outstanding Balance of Advance Payment is materially impaired.