EXHIBIT 10.111
ISSUER LOAN AGREEMENT
between
PANDA GLOBAL ENERGY COMPANY
as Lender
and
PAN-WESTERN ENERGY CORPORATION LLC
as Borrower
Dated as of April 22, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 - DEFINITIONS 1
1.1 Definitions 1
ARTICLE 2 - THE CREDIT FACILITY 11
2.1 Credit Facility 11
2.2 Interest Payments 11
2.2.1 Interest Payment Dates 11
2.2.2 Interest 11
2.3 Issuer Note 12
2.4 Repayment of the Loans 12
2.4.1 Payments 12
2.4.2 Application of Payments 12
2.5 Payment Procedure 12
2.6 Prepayments 12
2.6.1 Voluntary Prepayments 12
2.6.2 Certain Mandatory Prepayments 12
2.6.3 Expropriation Event; Event of Loss 13
2.7 Fees 14
ARTICLE 3 - CONDITIONS PRECEDENT 14
3.1 Borrower's Certificate 14
(a) Representations and Warranties 14
(b) No Event of Default 14
(e) Use of Proceeds 14
3.2 Progress Report and Requisition Facility Engineer 14
3.3 Shareholders' Agreement 15
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES 15
4.1 Organization 15
4.2 Authorization; No Conflict 15
4.3 Legality, Validity and Enforceability. 15
4.4 Compliance with Law, Governmental Authorizations
and Facility Documents 15
4.5 Governmental Authorizations 16
4.6 Litigation 16
4.7 Existing Defaults. 16
4.8 Taxes 16
4.9 Contingent Liabilities 16
4.10 Business, Debt, Contracts, Etc 16
4.11 Representations and Warranties 16
4.12 Utilities 16
4.13 Facility Documents 17
4.14 Fees and Enforcement 17
4.15 Subsidiaries and Beneficial Interest 17
4.16 Liens 17
4.17 Regulation of Parties 17
4.18 Transactions with Affiliates 17
ARTICLE 5 - AFFIRMATIVE COVENANTS OF THE BORROWER 17
5.1 Repayment of Indebtedness 17
5.2 Existence, Conduct of Business, Properties, Etc. 18
5.3 Use of Funds 18
5.4 Compliance with Legal Requirements 18
5.5 Operating Budgets 18
5.6 Books, Records, Access 18
5.7 Financial Statements 18
5.8 Progress Report; Facility Engineer 19
5.9 Insurance 19
5.10 Reports; Cooperation 19
5.11 Taxes and Other Governmental Charges 20
5.12 Taxes 21
5.13 Increased Costs 21
5.14 Notices 21
5.15 Expropriation Event 22
ARTICLE 6 - NEGATIVE COVENANTS 22
6.1 Indebtedness 22
6.2 Limitations on Liens 22
6.3 Nature of Business 22
6.4 Sale or Lease of Assets 22
6.5 Merger, Consolidation, Liquidation, Dissolution 22
6.7 Loans, Advances or Investments 23
6.8 Distributions 23
6.9 Transactions With Affiliates 23
6.10 Partnerships; Subsidiaries 23
6.11 Amendments 23
6.12 Assignment 23
6.13 Consent of the Lender 23
6.14 Immunity 23
ARTICLE 7 - EVENTS OF DEFAULT; CURE RIGHTS; REMEDIES 23
7.1 Events of Default; Cure Rights 23
7.1.1 Failure to Make Payments 23
7.1.2 Misstatements; Omissions 23
7.1.3 Affirmative Covenants 24
7.1.4 Negative Covenants 24
7.1.5 Bankruptcy; Insolvency 24
7.1.6 Judgments 24
7.1.7 Other Indebtedness 24
7.1.8 Default under the JV Shareholder
Loan Agreements 25
ARTICLE 8 - SCOPE OF LIABILITY 25
ARTICLE 9 - MISCELLANEOUS 25
9.1 Addresses 25
9.2 Delay and Waiver 26
9.3 Entire Agreement 26
9.4 Severability 26
9.5 Headings 27
9.6 No Partnership, Etc. 27
9.7 Governing Law 27
9.8 Submission To Jurisdiction; Waivers 27
9.9 WAIVERS OF JURY TRIAL 27
9.10 Successors and Assigns 28
9.11 Counterparts 28
TABLE OF SCHEDULES AND EXHIBITS iv
THIS ISSUER LOAN AGREEMENT (this "Agreement") dated as of
April 22, 1997, by and between Panda Global Energy Company (the
"Lender"), a company organized under the laws of the Cayman
Islands, and Pan-Western Energy Corporation LLC (the "Borrower"),
a company with limited liability organized under the laws of the
Cayman Islands
W I T N E S S E T H :
WHEREAS, the Borrower is the owner of approximately 88% of
the aggregate ownership interest in four joint venture companies
(the "Joint Venture Companies") that have developed, and desire
to construct and operate, two 50 MW coal-fired thermal power
generation facilities in conjunction with certain other
facilities including certain water supply, steam, heat and hot
water production and distribution facilities and other related
facilities to be located in Luannan County, Tangshan City, Hebei
Province, China (collectively referred to herein as the
"Facility"); and
WHEREAS, the Borrower has entered into the JV Shareholder
Loan Agreements (as defined below) and the Registered Capital
Contribution and Agency Agreement (as defined below) to finance
the development, construction and operation of the Facility by
the Joint Venture Companies; and
WHEREAS, the Borrower is an indirect Subsidiary of the
Lender and each of the Borrower and the Lender can be expected to
derive certain benefits as a result of this Agreement and from
the financing of the Facility by way of the JV Shareholder Loan
Agreements and the Registered Capital Contribution and Agency
Agreement; and
WHEREAS, the Lender accordingly desires to lend certain
funds to the Borrower upon the term and conditions contained in
this Agreement;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 Definitions. The following terms, as used herein, have
the following meanings, and capitalized terms not otherwise
defined herein shall have the meanings given to such terms in the
Trust Indenture, dated as of April 22, 1997, between the Lender
and Bankers Trust Company, Trustee:
"Administrative Services Agreement" means the agreement
between Panda International and Panda Global Holdings, Inc., a
Delaware corporation dated as of April 22, 1997.
"Affiliate" of a specified Person means any other
Person or Persons that directly, or indirectly through one or
more intermediaries, controls, is controlled by or is under
common control with the Person specified, or who holds or
beneficially owns 10% or more of the equity interest in the
Person specified or 10% or more of any class of voting securities
of the Person specified.
"Authorized Representative" means as to any Person, its
president, chief executive officer or any senior vice president
or any other person specifically identified as such in a
certificate of such Person delivered to the Lender.
"Available Cash Flow" means, for any period, the sum of
(i) all payments of principal and interest on the Shareholder
Loans, (ii) all dividends and distributions received by the
Borrower from the Joint Venture Companies, and (iii) all other
revenues received by the Borrower from any source whatsoever,
other than, unless and until a determination is made as provided
in Section 2.6.3(d), Expropriation Proceeds or the proceeds of an
Event of Loss, less (iv) the cash operating costs of the
Borrower, including expenses incurred in connection with the
Administrative Service Agreement, to the extent permitted to be
paid by the Borrower pursuant to the Indenture, and (v) taxes,
each of (i), (ii), (iii), (iv) and (v) determined on a cash
basis.
"Banking Day" means any day other than (i) a Saturday
or Sunday or (ii) a day on which banks in New York, New York,
▇▇▇▇▇▇ Town, Grand Cayman, Cayman Islands or Zhongdajie,
Bencheng, Luannan County, Hebei Province, China, are authorized
or required by law to be closed.
"Bankruptcy Law" means any insolvency, reorganization,
moratorium or similar law for the general relief of debtors in
any relevant jurisdiction.
"Borrower" has the meaning set forth in the Preamble
hereto.
"Business Day" means any day other than (i) a Saturday
or Sunday or (ii) a day on which banks in New York, New York,
▇▇▇▇▇▇ Town, Grand Cayman, Cayman Islands or Zhongdajie,
Bencheng, Luannan County, Hebei Province, China, are authorized
or required to be closed.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business
entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock, (iii)
in the case of a partnership, partnership interests (whether
general or limited) and (iv) any other interest or participation
that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing
Person.
"Capitalized Lease" means as to any Person, any lease
of any property of which the discounted present value of the
rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such
Person, and "Capitalized Lease Obligation" means the rental
obligations, as aforesaid, under any such lease.
"Carrier" means Luannan County State-Owned
Transportation Company, a PRC company owned and operated by
Luannan County.
"Change of Law" means after the date of this Agreement,
the adoption of any Legal Requirement, any change in any Legal
Requirement or the application or requirements thereof, any
change in the interpretation or administration of any Legal
Requirement by any Governmental Instrumentality, or compliance by
the Lender or the Borrower with any request or directive (whether
or not having the force of law) of any Governmental
Instrumentality.
"Chinamac" means Chinamac (Singapore) Pte Ltd. a
Singapore corporation.
"Closing Date" means April 22, 1997.
"Coal Suppliers" mean, collectively, Kailuan Coal
Mining Administration, Luannan County Coal Mine, Liu Guantun Coal
Mine, Le Ting County Coal Mine, Zunhua Coal Mine, and ▇▇▇▇▇ ▇▇
County Coal Mine.
"Coal Supply Agreements" means, collectively, the coal
supply agreements entered into among Tangshan Panda, Tangshan Pan-
Western and the Coal Suppliers.
"Coal Transportation Agreement" means the coal
transportation agreement, dated March 6, 1996, among the Carrier,
Tangshan Panda and Tangshan Pan-Western.
"Commercial Operation Date" means that date by which
both of the following have occurred: (i) the Facility Engineer
has certified that the Facility has achieved commercial
operations and (ii) the Commercial Operation Date, as such term
is used in the General Interconnection Agreement, has occurred.
"Commercially Feasible Basis" means that, following an
Event of Loss or an Expropriation Event, (i) the sum of the
proceeds of business interruption insurance, any funds available
to be applied to the rebuilding, repair or restoration pursuant
to subsection 2.6.3(e), any amounts that the shareholders of all
the Joint Venture Companies are irrevocably committed to
contribute and the anticipated revenues of the Facility during
the estimated period of rebuilding, repair or restoration will be
sufficient to pay all Facility restoration costs, Debt Service
and O&M Costs of the Facility during the estimated period of
rebuilding, repair or restoration and (ii) the Facility upon
being rebuilt, repaired or restored can reasonably be expected to
produce revenues adequate to pay all Debt Service and O&M Costs
of all Joint Venture Companies pursuant to each such Joint
Venture Company's respective JV Shareholder Loan Agreement over
the remaining terms of the Loans outstanding of each Joint
Venture Company, taking into account any change in projected
operating results due to the impairment of any portion of the
Facility, all without materially affecting the ability of the
Joint Venture Companies to repay their Shareholder Loan or the
ability of the Borrower to repay the Loans.
"Company" means Panda Global Holdings, Inc., a Delaware
corporation.
"Company Indenture" means the trust indenture governing
the terms of the issuance of, from time to time, bonds, notes
indentures, guarantees and, as of the Closing Date, the Senior
Secured Notes Guarantee by the Company, dated as of the Closing
Date, between the Company and the trustee pursuant to such trust
indenture.
"Covered Taxes" means taxes, levies, imposts,
deductions, charges, withholdings and liabilities imposed on or
measured by the net income or capital of a Person by any
jurisdiction or any political subdivision or taxing authority
thereof or therein solely as a result of a permanent
establishment of such Person in such jurisdiction or political
subdivision.
"Debt Service Reserve Requirement" has the meaning
ascribed thereto in the JV Shareholder Loan Agreements.
"Development Expenses" shall mean all reasonable out-of
pocket expenses related to the Facility that have been incurred
by the Borrower, Panda International or their Affiliates in the
development of the Facility prior to the date of this Agreement.
"Disqualified Stock" means, with respect to any Person,
any Capital Stock which, by its terms (or by the terms of any
security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is exchangeable for Indebtedness, or is redeemable
at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Loans, as the case may be.
"Dollars," "U.S. Dollars" and "US$" mean lawful
currency of the United States of America.
"Energy Purchase Agreement" means Electric Energy
Purchase and Sales Agreement, dated September 22, 1995, between
NCPGC and Tangshan Panda and Tangshan Pan-Western, as the same
may from time to time be amended, supplemented or otherwise
modified.
"EPC Contract Price" means the price that the Joint
Ventures have agreed to pay to the EPC Contractor under the EPC
Contract.
"EPC Contractor" means Harbin Power Engineering Company
Limited, a company organized under the laws of the PRC and a
wholly owned subsidiary of Harbin Power.
"Event of Default" shall have the meaning given to such
term in Section 7.1.
"Event of Loss" means an event which causes all or a
portion of the Facility to be damaged, destroyed or rendered
unfit for normal use for any reason whatsoever, other than an
Expropriation Event.
"Expropriation Event" means any condemnation,
nationalization, seizing, or expropriation by any Government
Instrumentality of all or a substantial portion of the Facility
or the property or assets of the Borrower or of its share
capital, or any Government Instrumentality shall have assumed
custody or control of such property or other assets or business
operations of the Borrower or of its share capital, or shall have
taken any action for the dissolution or disestablishment of the
Borrower or any action that would prevent the Borrower or its
officers from carrying on its business or operations or a
substantial part thereof.
"Expropriation Proceeds" means any proceeds received by
the Borrower as a result of the occurrence of an Expropriation
Event.
"Facility" shall have the meaning stated in the first
WHEREAS clause of this Agreement.
"Facility Budget" means the construction budget and
schedule provided by the Lender (containing customary assumptions
and qualifications) approved as reasonable by the Facility
Engineer prior to the making of the first Loan pursuant to this
Agreement, and as it thereafter may be amended with the approval
of the Lender.
"Facility Costs" means all costs incurred, or to be
incurred, in connection with the development, design,
engineering, procurement, construction and commissioning of the
Facility, which costs shall include, but not be limited to: (a)
all costs incurred under the EPC Contract, (b) Development
Expenses, (c) O&M Costs incurred in connection with the start up
of the Facility or otherwise prior to the Commercial Operation
Date, (d) actual interest costs (including, prior to the
Commercial Operation Date, interest due and payable on the Loans)
and amounts required pursuant to the Debt Service Reserve
Requirement, closing and administration costs related to the
Facility until the Commercial Operation Date, (e) the costs of
acquiring Governmental Authorizations for the Facility prior to
the Commercial Operation Date and (f) without duplication,
working capital costs.
"Facility Documents" means, collectively, the Power
Purchase Agreement, the EPC Contract, the Transmission Facilities
Construction Agreement, the O&M Agreement, the Coal Supply
Agreements, the Coal Transportation Agreement, the Engineering
and Design Contract, the Steam Sales Agreements, the Heat Supply
Contracts, the Inter-Company Steam Sales Agreement, and all other
instruments, agreements or other documents arising from or
related to the Facility, but shall not include any Financing
Agreement.
"Facility Engineer" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Energy
Services Inc., or its successor.
"Facility Notes" has the meaning ascribed thereto in
the JV Shareholder Loan Agreements.
"Fair Market Value" or "fair value" means, with respect
to any asset or property, the price which could be negotiated in
an arm's-length market transaction, for cash, between a willing
seller and a willing buyer, neither of whom is under undue
pressures or compulsion to complete the transaction. Fair Market
Value shall be determined by the Board of Directors of the
Borrower acting in good faith and shall be evidenced by a Board
Resolution delivered to the Trustee except that any determination
of Fair Market Value made with respect to any parcel of real
property shall be made by an independent appraiser.
"Financing Agreements" means, collectively, this
Agreement, the Issuer Note, the JV Shareholder Loan Agreements,
the JV Guarantees and the Facility Notes, each individually a
"Financing Agreement".
"FPA" means the United States Federal Power Act, as
amended, excluding Sections I-18, 21-30, 202(c), 210, 211, 212,
305(c) and any necessary enforcement provision of Part III of the
Act with regard to the foregoing sections.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession of the United States, which are applicable
as of the date hereof.
"Governmental Authorizations" means all authorizations,
consents, decrees, permits, waivers, privilege approvals from and
filings with all Governmental Instrumentalities necessary for the
realization of the Facility in accordance with the Facility
Documents.
"Governmental Instrumentality" of any country shall
mean such country and its government and any ministry,
department, political subdivision, instrumentality, agency,
corporation or commission under the direct or indirect control of
such country.
"Harbin Power" means Harbin Power Equipment Group
Company, a PRC Company.
"Heat Supply Contracts" means the contracts to supply
steam and hot water to various PRC industrial and commercial
users that have been assigned by Luannan Heat and Power Plant to
Tangshan Pan-Sino, or any similar contracts in addition to or in
replacement thereof.
"Indebtedness" means, with respect to any Person,
without duplication, (i) any liability, contingent or otherwise,
of such Person (A) for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (B) evidenced by a note,
debenture or similar instrument or letters of credit (including a
purchase money obligation) or (C) for the payment of money
relating to a Capitalized Lease Obligation or other obligation
relating to the deferred purchase price of property; (ii) any
obligation secured by a Lien to which the property or assets of
such Person are subject, whether or not the obligations secured
thereby shall have been assumed by or shall otherwise be such
Person's legal liability; (iii) the maximum fixed repurchase
price of any redeemable or putable Disqualified Stock; (iv)
contractual obligations to repurchase goods sold or distributed;
(v) obligations of a Person in respect of interest rate or
currency exchange agreements to the extent they appear on the
balance sheet; (vi) any and all deferrals, renewals, extensions
and refundings of, or amendments, modifications or supplements
to, any liability of the kind described in any of the preceding
clauses (i) - (v); and (vii) any liability of others of the kind
described in clauses (i) - (vi) which the Person has guaranteed
or which is otherwise directly or indirectly its legal liability.
"Indentures" means the Company Indenture and the Senior
Secured Notes Indenture.
"Independent Accountants" means an internationally
recognized accounting firm.
"Independent Insurance Consultant" means Sedgwick, PLC,
a corporation incorporated in accordance with the laws of the
United Kingdom, or its successors.
"Inter-Company Steam Sales Agreement" means the Water,
Heat, Steam and Hot Water Supply and Usage Agreement, dated as of
October 3, 1996 between Tangshan Cayman and Tangshan Panda.
"Interconnection Agreement" means the General
Interconnection Agreement dated September 22, 1995, between NCPGC
and Tangshan Panda and Tangshan Pan-Western, as the same may from
time to time be amended, supplemented or otherwise modified.
"Interconnection Dispatch Agreement" means the
agreement to be negotiated among Tangshan Power Supply Bureau of
NCPGC, Tangshan Panda and Tangshan pan-Western shortly prior to
the Commercial Operation Date of the Facility concerning specific
details as to the dispatch of the Facility.
"Interest Expense" means, for any period, the sum of
(a) the total interest expense of the Person in question for such
period as determined in accordance with GAAP, including, without
limitation, (i) amortization of debt issuance costs or of
original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in
accordance with the effective interest method of accounting, (ii)
accrued interest, (iii) noncash interest payments, (iv)
commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing,
(v) interest actually paid by the Person in question under any
guarantee of Indebtedness or other obligation of any other Person
and (vi) net costs associated with interest rate agreements
(including amortization of discounts) and currency agreements,
plus (b) capitalized interest plus (c) dividends paid in respect
of preferred stock of the Person in question, held by Persons
other than the Person in question.
"Issuer Note" has the meaning given that term in
Section 2.3.
"Issuer Revenue Fund" means the fund to be established
by the Lender in accordance with the terms of the Indentures.
"Joint Venture Companies" means, collectively Tangshan
Panda, Tangshan Pan-Western, Tangshan Cayman and Tangshan Pan-
Sino.
"JV Equity Contributions" means equity contributions
made by the Borrower to the Joint Venture Companies pursuant to
the Registered Capital Contribution and Agency Agreement.
"JV Guarantees" means collectively, the undertakings by
Tangshan Panda, each executed as of the 22nd day of September,
1996 to unconditionally and irrevocably guarantee to the Borrower
the prompt payment and performance by each of Tangshan Pan-
Western, Tangshan Cayman and Tangshan Pan-Sino of their
individual obligations to Borrower pursuant to any Indebtedness
obligation then or thereafter due and owing by any such party to
Borrower; the undertakings by Tangshan Pan-Western, each executed
as of the 22nd day of September, 1996, to unconditionally and
irrevocably guarantee to the Borrower the prompt payment and
performance by each of Tangshan Panda, Tangshan Cayman, and
Tangshan Pan-Sino of their individual obligations to Borrower
pursuant to any Indebtedness obligation then or thereafter due
and owing by any such party to Borrower; the undertakings by
Tangshan Cayman, each executed as of the 22nd day of September,
1996 to unconditionally and irrevocably guarantee to the Borrower
the prompt payment and performance by each of Tangshan Panda,
Tangshan Pan-Western and Tangshan Pan-Sino of their individual
obligations to Borrower pursuant to any Indebtedness obligation
then or thereafter due and owing by any such party to Borrower;
and the undertakings by Tangshan Pan-Sino, each executed as of
the 22nd day of September, 1996 to unconditionally and
irrevocably guarantee to the Borrower the prompt payment and
performance by each of Tangshan Panda, Tangshan Pan-Western and
Tangshan Cayman of their individual obligations to Borrower
pursuant to any Indebtedness obligation then or thereafter due
and owing by any such party to Borrower.
"JV Shareholder Loans" means loans made by the Borrower
to the Joint Venture Companies pursuant to the JV Shareholder
Loan Agreements.
"JV Shareholder Loan Agreements" means, collectively
the shareholder loan agreements between the Borrower and each of
the Joint Venture Companies respectively, dated September 24,
1997 as each is amended by an amendment and restatement dated
April 1, 1997 (as each is amended, modified and supplemented from
time to time, each a "JV Shareholder Loan Agreement").
"Legal Requirements" means all laws, statutes, orders,
decrees, injunctions, licenses, permits, approvals, agreements
and regulations of any Governmental Instrumentality having
jurisdiction over the matter in question.
"Lender" has the meaning set forth in the recitals
hereto.
"Lien" means any mortgage, lien (statutory or other),
pledge, security interest, encumbrance, claim, hypothecation,
assignment for security, deposit arrangement or preference or
other security agreement of any kind or nature whatsoever. For
purposes of this Agreement, a Person shall be deemed to own
subject to a lien any property which it has acquired or holds
subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement relating to such Person.
"Loans" means the loans made under this Agreement.
"Luanhua Co." means Tangshan Luanhua (Group) Co., a
company organized under the laws of the PRC.
"Luannan Government" means the government of Luannan
County, Tangshan City, Hebei Province, PRC.
"Luannan Heat Company" means Luannan County Heat
Company, Ltd. a company organized under the laws of the PRC.
"Luannan Heat & Power" means Luannan County Heat &
Power Plant, a company organized under the laws of the PRC.
"Material Adverse Effect" means a material adverse
change in the financial condition with respect to the party or
entity in question or any event or occurrence which could
reasonably be expected to materially and adversely affect: (a)
the development, construction or operation of the Facility; or
(b) the ability of the Facility to perform any of its material
obligations under a Facility Document; or (c) the ability of the
Borrower to make payments of principal, premium, if any, or
interest on the Loans when due.
"Material Facility Documents" means, collectively, the
Power Purchase Agreement, the EPC Contract, the Transmission
Facilities Construction Agreement, the O&M Agreement, the Coal
Supply Agreements, the Coal Transportation Agreement and all
other instruments, agreements or other documents arising from or
related to the Facility, but shall not include any Financing
Agreement.
"Maturity Date" means April 10, 2004.
"NCPGC" means North China Power Group Company, a
company organized under the laws of the PRC.
"Non-Excluded Taxes" shall have the meaning ascribed to
it subsection 5.16.
"Nonrecourse Persons" shall have the meaning ascribed
to it in Article 8.
"O&M" means operation and maintenance services.
"O&M Agreement" means the Amended and Restated
Operation and Maintenance Agreement, dated as of March 6, 1997,
among the Joint Ventures and Duke/Fluor ▇▇▇▇▇▇ International
Services, a partnership organized and existing under the laws of
Nevada, whose partners are Duke Coal Project Services Pacific,
Inc., a Nevada corporation and Fluor ▇▇▇▇▇▇ ▇▇▇▇, Inc., a
California corporation.
"O&M Costs" means all amounts disbursed by or on behalf
of the Borrower for operation, maintenance, repair, or
improvement of the Facility, including, without limitation,
premiums on insurance policies, property, income and all other
taxes to the extent paid, and payments under the relevant
operating and maintenance agreements, leases (including Operating
Lease Obligations), royalty and other land use agreements, and
any other payments required under the Facility Documents, each as
determined on a cash basis and otherwise in accordance with GAAP.
"Obligations" means all loans, advances, debts,
liabilities, and obligations, howsoever arising, owed by the
Borrower to the Lender or existing or hereafter arising hereunder
or pursuant to the terms of any of the Financing Agreements or
any of the other Facility Documents, including all interest,
fees, charges and expenses chargeable to the Borrower; and in the
event of any proceeding for the collection or enforcement of the
Obligations, after an event of default shall have occurred and be
continuing, any exercise by the Lender, together with reasonable
attorney's fees and court costs.
"Officer's Certificate" means a certificate of an
authorized representative of the Borrower, signed by the
Chairman, the President, a Vice President, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of
the Borrower.
"Operating Lease Obligations" means any obligation of
the Person in question incurred or assumed under or in connection
with any lease of real or personal property which, in accordance
with GAAP, is not required to be classified and accounted for as
a capital lease.
"Other Taxes" means any other excise or property taxes,
charges or similar levies that arise under the laws of any
jurisdiction on any payment made under this Agreement or under
any other Financing Agreement or from the execution or delivery
or otherwise with respect to this Agreement or any other
Financing Agreement.
"Panda International" means Panda Energy International
Inc., a Texas corporation.
"Pan-Sino" means Pan-Sino Energy Development Company
LLC, a Cayman Islands exempted company.
"Pan-Western Equity Distribution Fund" has the meaning
ascribed thereto in subsection 3.4.
"Pan-Western Funds" has the meaning ascribed thereto in
subsection 3.4.
"Pan-Western Revenue Fund" has the meaning ascribed
thereto in subsection 3.4
"Permitted Indebtedness" means the Loans any other
loans from the Lender to the Borrower.
"Permitted Liens" means, with respect to any Person,
any Lien arising by reason of (a) any judgment, decree or order
of any court, so long as such Lien is being contested in good
faith and is adequately bonded, and any appropriate legal
proceedings which may have been duly initiated for the review of
such judgment, decree or order shall not have been finally
terminated or the period within which such proceedings may be
initiated shall not have expired; (b) taxes not yet delinquent or
which are being contested in good faith; (c) security for payment
of workers' compensation or other insurance; (d) deposits to
secure public or statutory obligations, or to secure permitted
contracts for the purchase or sale of any currency entered into
in the ordinary course of business; and (e) security for surety
or appeal bonds.
"Person" means any natural person, corporation,
partnership, firm, association, Governmental Instrumentality or
any other entity whether acting in an individual, fiduciary or
other capacity.
"Power Purchase Agreement" means, collectively, the
Energy Purchase Agreement, the Interconnection Agreement and the
Supplemental Agreement (and, after execution thereof, the
Interconnection Dispatch Agreement).
"PRC" or "China" means the People's Republic of China.
"Pricing Document" means the document or documents
(issued by the Tangshan Municipal Price Bureau) determining the
price for electric energy delivered, retail price and principals
for adjustment.
"PUHCA" means the United States Public Utility Holding
Company Act of 1935, as amended, and all rules and regulations
adopted thereunder.
"Registered Capital Contribution and Agency Agreements"
means the agreements among each of the Joint Venture Companies
and their respective shareholders, dated as of March 26, 1997 (as
amended, modified and supplemented from time to time) pursuant to
which the Joint Venture Companies are entitled to receive equity
contributions.
"Renminbi" or "RMB" means lawful currency of the PRC.
"Repayment Date" means the 10th day of April in each
year from April 10, 2000 to the Maturity Date.
"SAFE" means the State Administration of Foreign
Exchange of the PRC.
"Senior Secured Notes" means the notes issued by the
Lender pursuant to the Indentures.
"Senior Secured Notes Guarantee" means the Senior
Secured Notes Guarantee issued by the Company under the terms of
the Indentures.
"Senior Secured Notes Indenture" means the trust
indenture governing the terms of issuance of the Senior Secured
Notes, dated as of the Closing Date, by and between the Lender
and the trustee thereunder.
"Shareholders' Agreement" shall have the meaning
ascribed thereto in subsection 3.5.
"Shareholders" means Pan-Sino and Chinamac each
individually a "Shareholder".
"Site" means the land on which the Facility is to be
located.
"Steam Sales Agreements" means the Heat Supply
Contracts and the Inter-Company Steam Sales Agreement.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a)
the sole general partner or the managing general partner of which
is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Supplemental Agreement" means Supplemental Agreement
for General Interconnection Agreement and Electric Energy
Purchase and Sales Agreement, dated February 10, 1996, among
NCPGC, Tangshan Panda and Tangshan Pan-Western, as the same may
from time to time be amended, supplemented or otherwise modified.
"Tangshan Cayman" means Tangshan Cayman Heat and Power
Co., Ltd., a Sino-foreign equity joint venture with limited
liability organized under the laws of the PRC.
"Tangshan Panda" means Tangshan Panda Heat and Power
Co., Ltd., a Sino-foreign equity joint venture with limited
liability organized under the laws of the PRC.
"Tangshan Pan-Sino" means Tangshan Pan-Sino Heat Co.,
Ltd., a Sino-foreign equity joint venture with limited liability
organized under the laws of the PRC.
"Tangshan Pan-Western" means Tangshan Pan-Western Heat
and Power Co., Ltd., a Sino-foreign equity joint venture with
limited liability organized under the laws of the PRC.
"Transmission Facilities" means three new substations,
the upgrades of both an existing substation and an existing
switching station and approximately 43 km of 110 KV transmission
lines to interconnect the Facility to the ▇▇▇▇-▇▇▇-▇▇▇▇ Grid.
"Transmission Facilities Construction Agreement" means
the construction agreement, dated February 10, 1996, among
Tangshan Panda, Tangshan Pan-Western and NCPGC.
"Wholly Owned" by any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership
interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more
Wholly Owned Subsidiaries of such Person.
ARTICLE 2 - THE CREDIT FACILITY
2.1 Credit Facility. Subject to the terms and conditions
set forth in Article 3, the Lender shall from time to time make
shareholder loans to the Borrower in an aggregate amount of
US$114,271,288 (the "Loans").
2.2 Interest Payments.
2.2.1 Interest Payment Dates. The Borrower shall
pay accrued interest on the unpaid principal amount of the Loans
semiannually in arrears on each April 10 and October 10,
commencing October 10, 1997, until the first such date to occur
not less than six months after the Commercial Operation Date, and
on the last day of each month thereafter.
2.2.2 Interest. The Borrower shall pay accrued
interest on the unpaid principal amount of the Loans (a) from the
date of this Agreement through the first April 10 or October 10
to occur not less than six months after the Commercial Operation
Date, at the rate of 12.25% per annum; (b) thereafter through
March 10, 2001, at the rate of 11.0% per annum; (c) thereafter
through March 10, 2002, at the rate of 12.5% per annum, and (d)
thereafter until the Maturity Date, at the rate of 13.5% per
annum.
2.3 Issuer Note. The obligation of the Borrower to repay
the Loans and to pay interest thereon at the rate provided herein
shall be evidenced by a promissory note substantially in the form
of Exhibit A, payable to the order of the Lender and in the
principal amount of ONE HUNDRED FOURTEEN MILLION, TWO HUNDRED
SEVENTY-ONE THOUSAND, TWO HUNDRED AND EIGHTY-EIGHT DOLLARS
(US$114,271,288) (the "Issuer Note"). The Borrower authorizes
the Lender to record on the schedule annexed to the Issuer Note,
each payment or prepayment of principal of the Loans and agrees
that all such notations shall be prima facie evidence of the
information recorded. The Borrower further authorizes the Lender
to attach to and make a part of the Issuer Note continuations of
the schedule attached thereto as necessary. No failure to make
any such notations, nor any errors in making any such notations,
shall affect the validity of the Borrower's obligations to repay
the full unpaid principal amount of the Loans or the duties of
the Borrower hereunder or thereunder.
2.4 Repayment of the Loans.
2.4.1 Payments. The aggregate unpaid principal
amount of the Loans shall be payable in installments on each
Repayment Date in accordance with the amortization schedule set
forth on Schedule A, and any remaining unpaid principal,
interest, fees and costs shall be due and payable on the Maturity
Date.
2.4.2 Application of Payments. If the amount of
any payment made by the Borrower hereunder is less than the total
amount due and payable by the Borrower to the Lender as of the
date on which such payment is actually made by the Borrower, such
payment shall be applied: (i) first, against charges, fees,
costs and expenses due hereunder; (ii) second, against interest
on the Loans (including amounts payable in respect thereof
pursuant to Sections 5.11, 5.12 and 5.13; (iii) third, against
the principal of the Loans (including amounts payable in respect
thereof pursuant to Sections 5.11, 5.12 and 5.13) and interest on
such overdue interest; and (iv) fourth, against all other amounts
then due and payable to the Lender hereunder.
2.5 Payment Procedure. The Borrower shall make all
payments due hereunder on or prior to the Capitalized Interest
Expiration Date to the Trustee for deposit in the Issuer
Construction Fund, and all payments due thereafter to the Trustee
for deposit in the Issuer Revenue Fund.
2.6 Prepayments.
2.6.1 Voluntary Prepayments. Except as required by
this Agreement, the Borrower may not prepay Loans without the
permission of the Lender.
2.6.2 Certain Mandatory Prepayments. In addition
to other amounts which shall be applied to the prepayment of
Loans as provided in this Agreement, the Borrower shall apply to
prepayment of the principal of the Loan, on the next scheduled
Interest Payment Date following receipt thereof, all Available
Cash Flow remaining after all other amounts due hereunder have
been paid. Such payments shall be applied to the installments of
principal due on the Loans in the order of their maturity.
2.6.3 Expropriation Event; Event of Loss. (a) If
an Expropriation Event shall occur with respect to the Facility
or any part thereof, the Borrower shall (i) diligently pursue all
of its rights, and cause the Joint Venture Companies to pursue
their respective rights, the rights to compensation against the
appropriate Governmental Instrumentality in respect of such
event, (ii) not compromise, settle or consent to the settlement
of any claim in respect thereof without the consent of the
Lender, and (iii) promptly deposit all proceeds received in
respect of any Expropriation Event (after deducting all
reasonable expenses) in the Pan-Western Revenue Fund segregated
from all other moneys pending the determination pursuant to
paragraph (c) below.
(b) If an Event of Loss shall occur with respect
to the Facility or any part thereof, the Borrower shall (i)
diligently pursue all its rights and the rights of the Joint
Venture Companies to compensation with respect to such Event of
Loss, (ii) not compromise, settle or consent to the settlement of
any claim exceeding $250,000 in respect thereof without the
consent of the Lender, and (iii) promptly deposit all proceeds
received in respect of any Event of Loss (after deducting all
reasonable expenses) in the Pan-Western Revenue Fund, segregated
from all other moneys pending the determination pursuant to
paragraph (c) below.
(c) If any such Expropriation Event or an Event
of Loss shall occur, as soon as reasonably practicable, but no
later than fifteen (15) days after the date of receipt by the
Borrower of any proceeds in respect thereof, the Borrower shall
make a reasonable good faith determination as to whether (i) the
Facility can be rebuilt, repaired or restored to permit operation
of the entire Facility on a Commercially Feasible Basis, and (ii)
the proceeds thereof, together with any other amounts that the
Borrower and the Joint Ventures have available to commit to such
rebuilding, repair or restoration, are sufficient to pay for such
rebuilding, repair or restoration of the Facility. The
determination of the Borrower shall be evidenced by an Officer's
Certificate filed with the Lender which, in the event the
Borrower determines that the Facility can be rebuilt, repaired or
restored to permit operation of the entire Facility or a portion
thereof on a Commercially Feasible Basis, shall also certify that
such proceeds, together with any other amounts that the Borrower
and the Joint Venture Companies are willing to commit to such
rebuilding, repair or restoration, are sufficient to pay the
costs thereof, and shall also set forth a reasonable good faith
estimate by the Borrower of such costs. If the amount of such
costs exceeds $500,000, such certificate shall be accompanied by
a Facility Engineer's certificate, dated within five (5) days of
the date of the Borrower's certificate, stating that, based upon
reasonable investigation and a review of the determination made
by the Borrower, the Facility Engineer believes that the
determination and the estimate of the total cost, if any, set
forth in the Borrower's certificate to be reasonable.
(d) In the event that the Borrower determines not
to rebuild, repair or restore the Facility, all of the proceeds
of such Expropriation Event or Event of Loss shall be applied to
prepayment of the Loans.
(e) In the event that the determination is made
to rebuild, repair or restore the Facility, all of the proceeds
of such Expropriation Event or Event of Loss on deposit in the
Pan-Western Revenue Fund or the Issuer Fund shall be transferred
to the Luanna Facility Restoration Fund, together with the
amounts (if any) previously transferred to the Lender in
connection with such Expropriation Event or Event of Loss and
such other amounts as the Borrower has available for such
rebuilding, repair or restoration (which also shall be
transferred to the Lender prior to any disbursement for
rebuilding, repair or restorations), shall be used to pay the
costs of such rebuilding, repair or restoration, and any excess
shall, upon completion of such rebuilding, repair or restoration,
be applied to the prepayment of the Loans within 15 days of the
completion of such rebuilding, repair or restoration as certified
by the Facility Engineer.
2.7 Fees. Not more than thirty (30) days following the
making of the first Loan hereunder, the Borrower shall reimburse
the Lender for its reasonable costs other than interest costs
incurred in funding and administering the Loans.
ARTICLE 3 - CONDITIONS PRECEDENT
The obligation of the Lender to make each Loan shall be
subject to the fulfillment or waiver of each of the following
conditions precedent:
3.1 Borrower's Certificate. The Lender shall have received
from the Borrower an Officer's Certificate dated the date of the
request for such Loan, certifying the following:
(a) Representations and Warranties. The
representations and warranties made by the Borrower herein or
which are contained in any certificate, document, financial or
other statement furnished by the Borrower hereunder or thereunder
or in connection herewith or therewith, or, to the knowledge of
the Borrower, made by the Joint Venture Companies pursuant to the
JV Shareholder Loan Agreements, are true and correct in all
material respects on and as of such date as if made on and as of
such date, except as affected by the consummation of the
transaction contemplated thereby or to extent that such
representations and warranties relate solely to an earlier date;
(b) No Event of Default. (i) No Event of Default is
in existence on such date, or shall occur after giving effect to
the Loan to be made on such date, and (ii) to the knowledge of
the Borrower, no JV Shareholder Loan Agreement Event of Default
is in existence on such date.
(d) Governmental Authorizations and other consents and
approvals. All Governmental Authorizations which are required to
be obtained on or prior to the date of the making of such Loan
have been duly obtained or maintained and are in full force and
effect, except for Governmental Authorizations which have not
been obtained at such time but which the Borrower has no reason
to believe will not be obtained in the normal course of business
prior to the date such Governmental Authorizations are required;
and
(e) Use of Proceeds. The costs for the payment of
which the borrowing is being made are to advance money to one or
more Joint Venture Companies pursuant to the JV Shareholder Loan
Agreements or to make equity contributions to one or more Joint
Venture Companies pursuant to the Registered Capital Contribution
and Agency Agreement.
3.2 Progress Report and Requisition Facility Engineer. The
Lender shall have received (a) a copy of a report signed by the
Authorized Representative of each Joint Venture on the date of
each such Loan to the effect that construction of the Facility is
proceeding satisfactorily in accordance with the EPC Contract and
the Facility Budget and the Facility Budget sets forth accurately
the estimated costs to complete the Facility, and such
confirmation thereof from the Facility Engineer as the Lender
reasonably deems necessary and (b) a copy of the EPC Contractor's
application for payment under the EPC Contract or evidence of or
application for other expenses in connection with the
construction and development of the Facility (together with all
supplemental reports required to be furnished thereunder) and
copies of all invoices and other statements of charges with
respect to the payments to be made to the EPC Contractor pursuant
to the EPC Contract or to the recipient of such other expenses on
the date, or expected to be due and payable within 30 days of,
such Loan and with respect to all other items of Facility Costs
to be paid on such date, or expected to be due and payable within
30 days of such Loan.
3.3 Shareholders' Agreement. The Borrower shall have
entered into a shareholders' agreement among the Borrower, Pan-
Sino and Chinamac (the "Shareholders' Agreement") pursuant to
which the shareholders of the Borrower will have agreed to cause
the Borrower to declare distributions immediately upon the
availability of funds for such purpose.
3.4 Equity Contributions; Real Estate Transfers. It shall
be a condition to any Loan hereunder which will be used to
advance funds to the Joint Venture Companies pursuant to the JV
Shareholder Loan Agreements which will have the effect of
increasing the total amount of Loans hereunder to more than
$15,000,000 that (A) each Joint Venture Company shall have
received the full amount of the equity contributions to which
each Joint Venture Company is then entitled pursuant to the
Registered Capital Contribution and Agency Agreement and (B) all
transfers of land use rights relating to the Site shall have been
completed.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
The Borrower makes all of the following representations
and warranties to and in favor of the Lender on the date on which
any Loan is made hereunder, except as such representations relate
to an earlier date.
4.1 Organization. The Borrower (a) is a company with
limited liability duly organized and validly existing under the
laws of the Cayman Islands, (b) is duly authorized to do business
in the Cayman Islands, (c) has all requisite power and authority
to (i) carry on its business as now being conducted and as now
proposed to be conducted, (ii) incur Indebtedness, and (iii)
execute, deliver and perform its obligations under each of the
Financing Agreements to which it is a party, and (d) the sole
shareholders of the Borrower are Pan-Sino and Chinamac.
4.2 Authorization; No Conflict. The Borrower has duly
authorized, executed and delivered the Facility Documents and the
Financing Agreements to which it is a party, and neither the
execution and delivery thereof nor the consummation of the
transactions contemplated thereby nor its compliance with the
terms thereof (a) does or will contravene its formation documents
or any other Legal Requirement then applicable to or binding on
it, (b) does or will contravene or result in any breach or
constitute any default under, or result in or require the
creation of any Lien upon any of its property or under any
agreement or instrument to which it is a party or by which it or
any of its properties may be bound, or (c) does or will require
the consent or approval of any Person.
4.3 Legality, Validity and Enforceability. Each of the
Financing Agreements to which the Borrower is a party is a legal,
valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, subject to bankruptcy
laws or principles of equity, to the extent applicable to the
Borrower. None of the Financing Agreements to which the Borrower
is a party has been amended or modified except in accordance with
this Agreement.
4.4 Compliance with Law, Governmental Authorizations and
Facility Documents. The Borrower is in compliance in all
material respects with all Legal Requirements and Governmental
Authorizations and Financing Agreements to which it is a party,
and no notices of violation of any Governmental Authorization or
Financing Agreements have been issued, entered or received by the
Borrower or, to the knowledge of the Borrower, issued, entered or
received by the Joint Venture Companies.
4.5 Governmental Authorizations. With respect to the Joint
Venture Companies, to the knowledge of the Borrower, there are no
Governmental Authorizations under Legal Requirements existing as
of the date of this Agreement that are required or will become
required, other than the Governmental Authorizations (a) which
have been obtained or granted and are in full force and effect,
or (b) which the Borrower has no reason to believe will not be
obtained before they become necessary for the ownership,
construction, financing or operation of the Facility. To the
best of its knowledge, neither the Borrower nor any of the Joint
Venture Companies is in violation of any condition in any
Governmental Authorization.
4.6 Litigation. There are no pending or, to the Borrower's
knowledge, threatened actions, suits, proceedings or
investigations of any kind, including actions or proceedings of
or before any Governmental Instrumentality, to which the Borrower
or to the knowledge of the Borrower, any Shareholder or any Joint
Venture Company is a party or is subject, or by which any of them
or any of their properties are bound.
4.7 Existing Defaults. There is no Event of Default by the
Borrower under any of the Financing Agreements. To the best of
the Borrower's knowledge, there is no event of default under any
Material Facility Document or any Financing Agreement by any
party to such Material Facility Document or Financing Agreement.
4.8 Taxes. The Borrower has filed, or caused to be filed,
all tax and informational returns that are required to have been
filed by it in any jurisdiction, and has paid all taxes shown to
be due and payable on such returns and all other taxes and
assessments payable by it, to the extent the same have become due
and payable (other than those taxes that it is contesting in good
faith and by appropriate proceedings, with adequate, segregated
reserves established for such taxes) and, to the extent such
taxes are not due, has established reserves that are adequate for
the payment thereof and are required by GAAP.
4.9 Contingent Liabilities. The Borrower has no material
contingent liabilities or obligations except those authorized
under and permitted by the Financing Agreements.
4.10 Business, Debt, Contracts, Etc. The Borrower has not
conducted any business other than the business contemplated
hereunder, has no outstanding Indebtedness other than
Indebtedness incurred hereunder or permitted under Section 6.1
and has no other liabilities other than those incurred hereunder
or permitted hereby.
4.11 Representations and Warranties. All representations
and warranties of the Borrower contained in herein are true and
correct in all material respects and the Borrower hereby confirms
each such representation and warranty of the Borrower with the
same effect as if set forth in full herein.
4.12 Utilities. to the knowledge of the Borrower, all
utility services and easements necessary for the construction and
the operation of the Facility for its intended purposes, are or
will be available at the Site as and when required on
commercially reasonable terms.
4.13 Facility Documents.
4.13.1 The Lender has received a true, complete and
correct copy of each of the Facility Documents and the Financing
Agreements in effect or required to be in effect as of the date
this representation is made or deemed made (including all
exhibits, schedules, side letters and disclosure letters to
therein or delivered pursuant thereto, if any).
4.13.2 To the Borrower's knowledge, all conditions
precedent to the obligations of the respective parties under the
Material Facility Documents have been satisfied or waived in
accordance with the provisions thereof and hereof, except for
such conditions precedent which by their terms cannot be met
until a later stage in the construction or operation of the
Facility, and the Borrower has no reason to believe that any such
condition precedent cannot be satisfied on or prior to the
appropriate stage in the construction or operation of the
Facility.
4.14 Fees and Enforcement. Other than amounts that have
been paid in full, no fees or taxes, including without limitation
stamp, transaction, registration or similar taxes, are required
to be paid for the legality, validity, or enforceability of this
Agreement or any of the other Facility Documents and the
Financing Agreements.
4.15 Subsidiaries and Beneficial Interest. The Borrower has
no subsidiaries other than the Joint Venture Companies and does
not beneficially own the whole or any part of the issued share
capital or other ownership interest of any other company or
corporation or other Person.
4.16 Liens. The Borrower has not secured or agreed to
secure any Indebtedness by any Lien upon any of its present or
future revenues or assets or capital stock except Permitted
Liens. The Borrower does not have any outstanding Lien or
obligation to create Liens on or with respect to any of its
properties or revenues except Permitted Liens.
4.17 Regulation of Parties. The Borrower is not nor will it
be, solely as a result of its participation in the transactions
contemplated hereby or by any other Facility Document, subject to
regulation by any Governmental Instrumentality of the United
States as a "public utility," an "electric utility," an "electric
utility holding company" or a "public utility holding company."
The Borrower is not subject to regulation as a "subsidiary
company" or an "affiliate" of a "holding company" under (and as
defined in) PUHCA.
4.18 Transactions with Affiliates. Except as otherwise
permitted under Section 6.9, the Borrower is not a party to any
contracts or agreements with, or any other commitments to,
whether or not in the ordinary course of business, any Affiliate
of the Borrower.
ARTICLE 5 - AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that until all
Obligations owed to the Lender are paid in full it will:
5.1 Repayment of Indebtedness. Repay in accordance with
its terms, all Indebtedness, including without limitation, all
sums due under this Agreement and the Issuer Note.
5.2 Existence, Conduct of Business, Properties, Etc.
Except as otherwise expressly permitted by the Indentures under
this Agreement, (i) maintain and preserve its existence as a
Cayman Islands exempted company with limited liability and all
rights, privileges and franchises necessary or desirable in the
normal conduct of its business and (ii) engage only in the
business contemplated by the Issuer Indenture and the Financing
Agreements.
5.3 Use of Funds. (a) Use the proceeds of the Loans only
to make (i) the JV Shareholder Loans and (ii) the JV Equity
Contributions.
(b) Immediately upon receipt thereof deposit all cash
revenues, from whatever source derived, with the Trustee for
deposit in the Pan-Western Revenue Fund.
(c) Any funds on deposit in the Pan-Western Operating
Fund shall be used by the Borrower solely for the payment of
expenses in connection with the Administrative Services
Agreement.
(d) Subject to the Indenture, any funds in the Pan-
Western Equity Distribution Fund may be distributed as dividends
in accordance with the Shareholder's Agreement.
5.4 Compliance with Legal Requirements. Promptly and
diligently procure, maintain and comply with or cause to be
procured, maintained or complied with all Governmental
Authorizations required for financing of the Joint Venture
Companies and the transactions contemplated by the Financing
Agreement and the Facility Documents, except that the Borrower
may, at its expense contest by appropriate proceedings conducted
in good faith the validity or application of any such Legal
Requirements, provided that, in either case, (x) none of the
Lender, the Borrower and the Joint Venture Companies would be
subject to any criminal liability for failure to comply therewith
and (y) all proceedings to enforce such Legal Requirements
against the Lender, the Borrower the Joint Venture Companies, or
the Facility or any part thereof, shall have been duly and
effectively stayed during the entire pendency of such contest.
5.5 Operating Budgets. Deliver to the Lender an annual
operating budget in advance of each calendar year.
5.6 Books, Records, Access. Maintain adequate books,
accounts and records with respect to the Borrower, the Joint
Venture Companies, and the Facility in compliance with the
regulations of any Governmental Instrumentality having
jurisdiction thereof, and, with respect to financial statements,
in accordance with GAAP and, subject to reasonable safety
requirements, permit employees or designees of the Lender and the
Facility Engineer, at any reasonable time and upon reasonable
prior notice to inspect the Facility, and to examine or audit all
of Borrower's books, accounts and records pertaining or related
to the Facility and make copies and memoranda thereof.
5.7 Financial Statements.
5.7.1 Provide the Lender with:
(a) As soon as available and in any
event within ninety (90) days after the close of each fiscal year
commencing with the fiscal year ended after the date of this
Agreement, audited financial statements of the Borrower including
a statement of equity, a balance sheet as of the close of such
year, an income and expense statement, reconciliation of capital
accounts and a statement of sources and uses of funds, all
prepared in accordance with GAAP and certified by Independent
Accountants.
(b) As soon as available and in any
event within forty five (45) days after the end of each of the
quarterly accounting periods of its fiscal year commencing with
the quarter ending after the date of this Agreement, unaudited
financial statements of the Borrower, including without
limitation, an unaudited balance sheet of the Borrower as of the
last day of such quarterly period, the related statements of
income and cash flows for such quarterly period and (in the case
of second, third and fourth quarterly periods) for the portion of
the fiscal year ending with the last day of such quarterly
period, setting forth in each case in comparative form
corresponding unaudited figures from the preceding fiscal year,
all prepared in accordance with GAAP.
5.7.2 Each time the financial statements of the
Borrower are delivered under this subsection, an Officer's
Certificate signed by an Authorized Representative of the
Borrower shall be delivered along with such financial statements,
certifying that such officer has made or caused to be made a
review of the transactions and financial condition of the
Borrower during the relevant fiscal period and that such review
has not, to the best of such Authorized Representative's
knowledge, disclosed the existence of any event or condition
which constitutes an Event of Default under this Agreement, or if
any such event or condition existed or exists, the nature thereof
and the corrective actions that Borrower has taken or proposes to
take with respect thereto, and also certifying that the Borrower
is in compliance in all material respects with its obligations
under this Agreement and each other Financing Agreement to which
it is a party or, if such is not the case, stating the nature of
such non-compliance and the corrective actions which the Borrower
has taken or proposes to take with respect thereto.
5.8 Progress Report; Facility Engineer. Delivered to the
Lender a copy of a report signed by the Authorized Representative
of each Joint Venture Company on the date of each borrowing
hereunder to the effect that construction of the Facility is
proceeding satisfactorily in accordance with the EPC Contract and
the Facility Budget and the Facility Budget sets forth accurately
the estimated costs to complete the Facility, and such
confirmation thereof from the Facility Engineer as the Lender
reasonably deems necessary.
5.9 Insurance. Maintain, or cause to be maintained,
adequate insurance with respect to the Facility satisfactory to
the Lender in its reasonable judgment, based upon the advice of
the Independent Insurance Consultant. All insurance other than
third party liability insurance shall name Pan-Western as an
insured and the sole loss payee thereunder. Policies for third
party liability insurance shall name the Lender as an additional
insured.
5.10 Reports; Cooperation.
5.10.1 Deliver to the Lender on each anniversary of
the date of this Agreement a certificate from the Borrower's
insurers or insurance agents (i) evidencing that the insurance
policies in place satisfy the requirements specified in Section
5.9 (including, without limitation, listing all insurance being
carried by or on behalf of the Borrower or the Joint Venture
Companies pursuant to the Financing Agreements and certifying
that all insurance required to be maintained by the Borrower or
the Joint Venture Companies pursuant to the Facility Documents is
in full force and effect and all premiums therefore have been
paid in full), and (ii) setting forth a summary of all losses in
excess of US$250,000 (or the equivalent thereof) incurred with
respect to the Facility in the preceding year.
5.10.2 Deliver to the Lender within thirty (30) days
following the end of each calendar quarter until the Commercial
Operation Date a quarterly status report describing in reasonable
detail the progress of the construction of the Facility since the
immediately preceding report hereunder, including without
limitation, the cost incurred to the end of such quarter, an
estimate of the time and cost required for completion of the
Facility and such other information which the Lender may
reasonably request.
5.10.3 Prior to the Commercial Operation Date,
deliver to the Lender, within thirty (30) days following the end
of each calendar quarter, an update of the Facility Budget,
including but not limited to an explanation or other
reconciliation of differences between such report and previous
reports.
5.10.4 Upon completion of the Facility, deliver to
the Lender an Officer's Certificate certifying that (a) the
Commercial Operation Date has occurred, (b) to the knowledge of
the Borrower, there does not exist as of the date of such
certificate an event of default under any of the JV Shareholder
Loan Agreements, (c) to the knowledge of the Borrower, all
amounts required to be paid or repaid as of such date under the
Facility Documents and the Financing Agreements have been paid or
repaid and (d) the Facility Engineer has delivered a certificate
(which has been attached to such Officer's Certificate)
certifying that the Commercial Operation Date has occurred and
that the amount available in the Completion Sub-Account is
sufficient to complete the Facility.
5.10.5 From and after the Commercial Operation Date,
deliver to the Lender within ninety (90) days following each
calendar year, a summary operating report, which shall include,
unless otherwise agreed to by the Lender, a numerical and
narrative assessment of (i) the Facility's compliance with each
category in the annual operating budget, (ii) statistical data
relating to the Facility, including heat rate, net electrical and
scheduled and unscheduled outages, (iii) fuel deliveries and use,
(iv) major maintenance activity, (v) casualty losses of value in
excess of US$250,000 or the equivalent thereof in other
currencies (whether or not covered by insurance), (vi) disputes
with any materialman, supplier or other Person and any related
claims against the Borrower, (vii) to the knowledge of the
Borrower, pricing information disclosed or made available under
the Coal Supply Agreements and (viii) compliance with the
Governmental Authorizations.
5.10.6 No later than five Business Days following
the receipt thereof, deliver to the Lender all progress reports
and other information concerning the Facility provided by the
Joint Venture Companies to the Borrower pursuant to the JV
Shareholder Loan Agreements.
5.10.7 Deliver to the Lender any such other
information or data with respect to its business or operations
(including supporting information as to compliance with this
Agreement) as the Lender may reasonably request from time to
time.
5.11 Taxes and Other Governmental Charges. Before the same
become delinquent, pay and discharge or cause to be paid and
discharged all taxes, assessments and governmental charges or
levies lawfully imposed upon the Borrower or its income or
profits or upon the Facility, all utility and other governmental
charges incurred in the ownership, operation, maintenance, use,
occupancy and upkeep of the Facility. However, the Borrower may
contest in good faith any such taxes, assessments and other
charges and, in such event, may permit the taxes, assessments or
other charges so contested to remain unpaid during any period,
including appeals, when the Borrower is in good faith contesting
the same, so long as (a) adequate cash reserves have been
established in an amount sufficient to pay any such taxes,
assessments or other charges, accrued interest thereon and
potential penalties or other costs relating thereto, or other
adequate provision for the payment thereof shall have been made,
(b) enforcement of the contested tax, assessment or other charge
is effectively stayed for the entire duration of such contest,
and (c) any tax, assessment or other charge determined to be due,
together with any interest or penalties thereon, is promptly paid
after resolution of such contest.
5.12 Taxes. All payments made by the Borrower under this
Agreement and the Issuer Note shall be made free and clear of,
and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
Governmental Instrumentality, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on
the Lender as a result of a present or former connection between
the Lender and the jurisdiction of the Governmental
Instrumentality imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such
connection arising solely from the Lender having executed,
delivered or performed its obligations or received a payment
under, or enforced, this Agreement or the Issuer Note). If any
such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to the Lender hereunder or
under the Issuer Note, the amounts so payable to the Lender shall
be increased to the extent necessary to yield to the Lender
(after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts
specified in this Agreement. Whenever any Non-Excluded Taxes are
payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Lender for its own account a certified
copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-
Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Lender the required receipts or other
required documentary evidence, the Borrower shall indemnify the
Lender for any incremental taxes, interest or penalties that may
become payable by the Lender as a result of any such failure.
The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Loans, the Issuer Note
and all other amounts payable hereunder.
5.13 Increased Costs. If, after the date of this Agreement,
any Change of Law:
(a) shall subject the Lender to any tax, duty or other
charge with respect to the
Loans, or shall change the basis of taxation of payments by the
Borrower to the Lender on the Loans (except for Covered Taxes,
Other Taxes or changes in the rate of taxation on the overall net
income of the Lender); or
(b) shall impose on the Lender any other condition
directly related to the Loans;
and the effect of any of the foregoing is to increase the cost to
the Lender of making, issuing, creating, renewing, participating
in or maintaining the Loans or to reduce any amount receivable by
the Lender hereunder, then the Borrower shall from time to time,
upon demand by the Lender, pay to the Lender additional amounts
sufficient to reimburse the Lender for such increased costs or to
compensate the Lender for such reduced amounts.
5.14 Notices. Promptly, upon acquiring notice or giving
notice, or obtaining knowledge thereof, as the case may be,
provide to the Lender written notice of:
5.14.1 Any Event of Default which it has knowledge,
specifically stating that an Event of Default has occurred and
describing such an Event of Default and any action being taken or
proposed to be taken with respect to such Event of Default;
5.14.2 Any termination or event of default or notice
thereof under the Power Purchase Agreement or any of the JV
Shareholder Loan Agreements; and
5.14.3 Any litigation pending against the Borrower or
any other party of which the Borrower has actual knowledge, which
is or could reasonably be expected to have a Material Adverse
Effect.
5.14.4 Any request by any Joint Venture Company for
the consent of the Borrower under any provision of such Joint
Venture Company's JV Shareholder Loan Agreement.
5.15 Expropriation Event. If an Expropriation Event shall
occur with respect to the Facility, (a) promptly upon discovery
or receipt of notice of any occurrence thereof, provide written
notice thereof to the Lender, (b) diligently pursue all its
rights and the rights of the Joint Venture Companies rights to
compensation against the relevant Governmental Instrumentality in
respect of such Expropriation Event, and (c) immediately deposit
with the Trustee, to be held and applied pursuant to the
Indenture, any Expropriation Proceeds received in respect of such
event. The Borrower consents to the participation of the Lender
in any proceedings regarding an Expropriation Event, and the
Borrower shall from time to time deliver to the Lender all
documents and instruments requested by it to permit such
participation. Nothing in this Section shall be deemed to impair
any rights which the Lender may have with respect to any such
Expropriation Event.
ARTICLE 6 - NEGATIVE COVENANTS
The Borrower covenants and agrees for the benefit of the
Lender that until all Obligations owed to the Lender are paid in
full, without the consent of the Lender, the Borrower shall not:
6.1 Indebtedness. Incur, create, assume or be liable for
any Indebtedness except Permitted Indebtedness.
6.2 Limitations on Liens. Create, assume or permit to
exist any Lien upon any of the Borrower's assets or properties
other than as contemplated by the Indentures and Permitted Liens.
6.3 Nature of Business. Amend or modify its Articles of
Association without the prior written consent of the Lender, or
engage in any business other than the ownership of its interests
in the Joint Venture Companies and making the Shareholder Loans
and capital contribution to the Joint Venture Companies.
6.4 Sale or Lease of Assets. Sell, lease, assign, transfer
or otherwise dispose of its interests, equity or debt, in the
Joint Venture Companies other than as contemplated by the
Indentures.
6.5 Merger, Consolidation, Liquidation, Dissolution. Merge
or consolidate with or into any other Person, other than the
Lender or Pan-Sino, or liquidate, wind up, dissolve, or otherwise
transfer or dispose of all or any substantial part of its
property, assets or business, or change its legal form, or
purchase or otherwise acquire any assets of any Person.
6.6 Contingent Liabilities. Become liable as a surety,
guarantor, accommodation endorser or otherwise, for or upon the
obligation of any other Person.
6.7 Loans, Advances or Investments. Make or permit to
remain outstanding any loans, extensions of credit or advances to
or investments in (whether by acquisition of any stocks, notes or
other securities or obligations) any Person except as expressly
provided in the Financing Agreements, or the Indentures.
6.8 Distributions. Other than as contemplated in the
Indentures, agree to any restriction on its ability to pay
dividends (excluding restrictions imposed by law).
6.9 Transactions With Affiliates. Except as contemplated
by the Financing Agreements and the Facility Documents, directly
or indirectly: (i) enter into any transaction with any Person
(including any Affiliate) other than in the ordinary course of
business and on terms not less favorable to those available from
independent third parties.
6.10 Partnerships; Subsidiaries. Except as contemplated by
the Financing Agreements, the Facility Documents or the
Indentures, become a general or limited partner in any
partnership or a joint venturer in any joint venture, acquire any
ownership interest in any other Person or enter into any profit-
sharing or royalty agreement or other similar arrangement whereby
the Borrower's income or profits are, or might be, shared with
any other Person, or enter into any management contract or
similar arrangement whereby its business or operations are
managed by any other Person.
6.11 Amendments. Amend, or permit the amendment of, any of
the Financing Agreements or the Facility Documents without the
prior written consent of the Lender.
6.12 Assignment. Without the prior written consent of the
Lender, assign or otherwise transfer its rights under any of the
Financing Agreements or Facility Documents to which it is a
party, or Governmental Authorizations for its benefit, to any
Person without the prior written consent of the Lender.
6.13 Consent of the Lender. Grant any consent or approval
under the JV Shareholder Loan Agreements which require the
consent or approval of the Borrower without the written consent
or approval of the Lender.
6.14 Immunity. In any proceedings in the Cayman Islands,
the United States or elsewhere in connection with any of the
Financing Agreements to which the Borrower is a party, claim for
itself or any of its assets immunity from suit, execution,
attachment or other legal process.
ARTICLE 7 - EVENTS OF DEFAULT; CURE RIGHTS; REMEDIES
7.1 Events of Default; Cure Rights. The occurrence of any
of the following events shall constitute an event of default
("Event of Default") hereunder:
7.1.1 Failure to Make Payments. Payment shall not
have been made of any principal of or any interest on the Loans
or other amounts owed by the Borrower to the Lender within 15
Banking Days after such amounts are due.
7.1.2 Misstatements; Omissions. Any representation
or warranty confirmed or made in any Financing Agreements or
Facility Documents by the Borrower or in any writing provided by
the Borrower in connection with the transactions contemplated by
this Agreement shall be found to have been incorrect in any
material respect when made or deemed to be made; provided,
however, that no Event of Default shall occur if within sixty
(60) days after the date on which the Borrower has actual notice
that such incorrect statement has occurred, the Borrower shall
deliver in good faith, to the Lender an Officer's Certificate
stating in reasonable detail that either (i) the Borrower has
eliminated any adverse effect relating to such incorrect
statement or (ii) that the Borrower has taken action that it
reasonably believes will eliminate the adverse effect relating to
such incorrect statement within a reasonable specified time.
7.1.3 Affirmative Covenants. The Borrower shall
fail to perform or observe any of its obligations under (a)
Section 5.3 or (b) any other term, covenant or agreement set
forth in Article 5 hereof, which failure is not remedied within
fifteen (15) days after notice of such failure.
7.1.4 Negative Covenants. The Borrower shall fail
to perform or observe any of its obligations under any term,
covenant or agreement set forth in Article 6 hereof, which
failure is not remedied within fifteen (15) days after the
Borrower has received notice of such failure.
7.1.5 Bankruptcy; Insolvency. The Borrower shall
institute a voluntary case or undertake actions to form an
arrangement with creditors for the purpose of paying past due
debts, seeking liquidation, reorganization or moratorium of
payments, under any Bankruptcy Law (or any successor statute or
similar statute in any relevant jurisdiction), or shall consent
to the institution of an involuntary case thereunder against it;
or the Borrower shall file a petition, answer or consent or shall
otherwise institute any similar proceeding under any other Legal
Requirements, or shall consent thereto; or the Borrower shall
apply for, or by consent or acquiescence there shall be an
appointment of, a receiver, liquidator, sequestrator, trustee or
other officer with similar powers; or the Borrower shall make an
assignment for the benefit of creditors; or the Borrower shall
admit in writing its inability to pay its debts generally as they
become due; or if an involuntary case shall be commenced seeking
the liquidation or reorganization of the Borrower under any
Bankruptcy Law (or any successor statute or similar statute under
any relevant jurisdiction) or any similar proceeding shall be
commenced against the Borrower under any other Legal Requirements
and (i) the petition commencing the involuntary case is not
timely controverted, (ii) the petition commencing the involuntary
case is not dismissed within sixty (60) days of its filing,
(iii) an interim trustee is appointed to take possession of all
or a portion of the property, and/or to operate all or any part
of the business of the Borrower and such appointment is not
vacated within sixty (60) days, or (iv) an order for relief shall
have been issued or entered therein; or a decree or order of a
court having jurisdiction in the premises for the appointment of
a receiver, liquidator, sequestrator, trustee or other officer
having similar powers of the Borrower of all or a part of their
property, shall have been entered; or any other similar relief
shall be granted against the Borrower under any Legal
Requirements.
7.1.6 Judgments. A final judgment or judgments
shall be entered (i) against the Borrower in the aggregate amount
of US$1,000,000 (or the equivalent thereof in other currencies)
(exclusive of judgment amounts fully covered by insurance where
the insured has admitted liability), other than a judgment, the
execution of which is effectively stayed within sixty (60) days
after its entry but only for no more than ninety (90) days after
the date on which such stay is terminated or expires; or (ii) in
the form of an injunction or similar form of relief requiring
suspension or abandonment of construction or operation of the
Facility on grounds of violation of a Legal Requirement and
failure of the Borrower to have such injunction or similar form
of relief stayed or discharged within ninety (90) days.
7.1.7 Other Indebtedness. The Borrower shall
default for a period beyond any applicable grace period in the
payment of any principal, interest or other amount due under any
agreement involving the borrowing of money or the advance of
credit and the outstanding amount or amounts payable under such
agreement equals or exceeds US$500,000 (or the equivalent thereof
in other currencies) in the aggregate.
7.1.8 Default under the JV Shareholder Loan
Agreements. Any default under the Shareholder Loan Agreements
shall occur and be continuing.
7.1.9 Remedies. Upon the occurrence of any of the
Events of Default, the Lender may, by written notice to the
Borrower declare the Loans to be immediately due and payable and
pursue any and all remedies available for the non-payment of
debts.
ARTICLE 8 - SCOPE OF LIABILITY
The Lender shall have no claims with respect to the
transactions contemplated by the Financing Agreements or the
Facility Documents against any Person other than the Borrower
including, but not limited to, the Panda International and the
Luannan Government or any of their respective Affiliates (other
than the Borrower) or direct or indirect parents, or to the
shareholders, officers, directors, employees, or other
controlling persons (including members of the management
committee) of the Panda International and the Luannan Government,
their respective Affiliates (other than the Borrower), or their
direct or indirect parents (collectively the "Nonrecourse
Persons"), subject to the exceptions set forth below in this
Article 8; provided that (a) the foregoing provision of this
Article 8 shall not constitute a waiver, release or discharge of
any of the indebtedness, or of any of the terms, covenants,
conditions, or provisions of this Agreement, any other Financing
Agreement and the same shall continue until fully paid,
discharged, observed, or performed; (b) the foregoing provision
of this Article 8 shall not limit or restrict the right of the
Lender, to name the Borrower or any other Person as a defendant
in any action or suit for a judicial foreclosure or for the
exercise of any other remedy under or with respect to this
Agreement or any other Financing Agreement, or for injunction or
specific performance, so long as no judgement in the nature of a
deficiency judgement shall be enforced against any Nonrecourse
Persons, except as set forth in this Article 8; (c) the foregoing
provision of this Article 8 shall not affect or diminish or
constitute a waiver, release or discharge of any specific written
obligation, covenant, or agreement in respect to the Facility
made by any of the Nonrecourse Persons; and (d) nothing contained
herein shall limit the liability of any Person who is a party to
any Facility Document or has issued any certificate or other
statement in connection therewith with respect to such liability
as may arise by reason of the terms and conditions of such
Facility Document, certificate or statement, or otherwise, in
each case under this clause (d) relating solely to such liability
of such Person as may arise under such referenced agreement,
instrument or opinion. The limitations on recourse set forth in
this Article 8 shall survive the termination of this Agreement
and the full payment and performance of the Obligations hereunder
and under the other Facility Documents.
ARTICLE 9 - MISCELLANEOUS
9.1 Addresses. Any communications between the parties
hereto or notice provided herein to be given may be given to the
following addresses.
If to the Lender: Panda Global Energy Company
c/▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇ House
P.O. Box 309
South Church Street
▇▇▇▇▇▇ Town, Grand Cayman
Cayman Islands, British West Indies
If to the Borrower: Pan-Western Energy Corporation, LLC
c/▇ ▇▇▇▇▇▇ and Calder
▇▇▇▇▇▇ House
P.O. Box 309
South Church Street
▇▇▇▇▇▇ Town, Grand Cayman
Cayman Islands, British West Indies
in either case,
with a copy to: Panda Energy International Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
9.2 Delay and Waiver. No delay or omission to exercise any
right, power or remedy accruing to the Lender upon the occurrence
of any Event of Default or any breach or default of the Borrower
under this Agreement shall impair any such right, power or remedy
of the Lender, nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring, nor shall any
waiver of any single Event of Default, or other breach or default
be deemed a waiver of any other Event of Default, or other breach
or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part
of the Lender of any Event of Default, or other breach or default
under this Agreement, or any waiver on the part of the Lender of
any provision or condition of this Agreement, must be in writing
and shall be effective only to the extent in such writing
specifically set forth. All remedies, either under this
Agreement or by law or otherwise afforded to the Lender shall be
cumulative and not alternative.
9.3 Entire Agreement. This Agreement and any agreement,
document or instrument attached hereto or referred to herein
integrate all the terms and conditions mentioned herein or
incidental hereto and supersede all oral negotiations and prior
writings in respect to the subject matter hereof. In the event
of any conflict between the terms, conditions and provisions of
this Agreement and any such agreement, document or instrument,
the terms, conditions and provisions of this Agreement shall
prevail. This Agreement may only be amended or modified by an
instrument in writing signed by the Borrower, the Lender and any
other parties to be charged.
9.4 Severability. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
9.5 Headings. Paragraph headings have been inserted in
this Agreement as a matter of convenience for reference only and
it is agreed that such paragraph headings are not a part of this
Agreement and shall not be used in the interpretation of any
provision of this Agreement.
9.6 No Partnership, Etc. The Lender and the Borrower
intend that the relationship between them shall be solely that of
creditor and debtor. Nothing contained in this Agreement or the
Issuer Note shall be deemed or construed to create a partnership,
tenancy-in-common, joint tenancy, joint venture or co-ownership
by or between the Lender, on the one hand, and the Borrower or
any other Person, on the other hand. The Lender shall not be in
any way responsible or liable for the debts, losses, obligations
or duties of the Borrower or any other Person with respect to the
Facility or otherwise. All obligations to pay real property or
other taxes, assessments, insurance premiums, and all other fees
and charges arising from the ownership, operation or occupancy of
the Facility and to perform all obligations under the agreements
and contracts relating to the Facility shall be the sole
responsibility of the Borrower.
9.7 Governing Law. This Agreement shall be governed by,
and be construed and interpreted in accordance with, the law of
the State of New York.
9.8 Submission To Jurisdiction; Waivers. The parties
hereby irrevocably and unconditionally agree to:
(a) submit for themselves and their property in any
legal action or proceeding relating to this Agreement, or for
recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the Courts of the
State of New York in the Borough of Manhattan, the courts of the
United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consent that any such action or proceeding may be
brought in such courts and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the
same;
(c) agree that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to the Pledgor at its address set
forth below or at such other address of which the Trustee shall
have been notified pursuant hereto;
(d) agree that nothing herein shall affect the right
to effect service of process in any other manner permitted by law
or shall limit the right to ▇▇▇ in any other jurisdiction; and
(e) waive, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this paragraph any special,
exemplary or punitive damages.
9.9 WAIVERS OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
9.10 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The
Borrower may not assign or otherwise transfer any of its rights
under this Agreement.
9.11 Counterparts. This Agreement may be executed in one or
more duplicate counterparts and when signed by all of the parties
listed below shall constitute a single binding agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed by their officers or partners thereunto duly
authorized as of the day and year first above written.
PAN-WESTERN ENERGY CORPORATION LLC
By:
Name:
Title:
PANDA GLOBAL ENERGY COMPANY
By:
Name:
Title:
TABLE OF SCHEDULES AND EXHIBITS
Schedule 1 Subsidiaries
Schedule 5.9 Insurance
Schedule A Amortization Schedule
Exhibit A Form of Issuer Note
Schedule 5.9
N/A
EXHIBIT A
FORM OF ISSUER NOTE
$114,271,288.00 New York, New York
April 22, 1997
FOR VALUE RECEIVED, the undersigned, PAN-WESTERN ENERGY
CORPORATION LLC, a company with limited liability organized under
the laws of the Cayman Islands (the "Borrower"), hereby
unconditionally promises to pay to the order of PANDA GLOBAL
ENERGY COMPANY, a company with limited liability organized under
the laws of the Cayman Islands (the "Lender"), by transfer to
such account as the Lender may designate by written notice to the
Borrower, in lawful money of the United States of America and in
immediately available funds, the principal amount of ONE HUNDRED
FOURTEEN MILLION TWO HUNDRED SEVENTY-ONE THOUSAND TWO HUNDRED
EIGHTY EIGHT DOLLARS ($114,271,288), or, if less, the unpaid
principal amount of the Loans made by the Lender pursuant to the
Issuer Loan Agreement, as hereinafter defined. The principal
amount shall be paid in the amounts and on the dates specified in
the Issuer Loan Agreement. The Borrower further agrees to pay
interest in like money at such office on the unpaid principal
amount hereof from time to time outstanding at the rates and on
the dates specified in the Issuer Loan Agreement.
The holder of this Note is authorized to endorse on the
schedule annexed hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a
part hereof the date and amount of the Loans and the date and
amount of each payment or prepayment of principal with respect
thereto. Each such endorsement shall constitute prima facie
evidence of the accuracy of the information endorsed. The
failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loans.
This Note (a) is the Issuer Note referred to in the Issuer
Loan Agreement dated as of April 22, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Issuer
Loan Agreement"), between the Borrower and the Lender, (b) is
subject to the provisions of the Issuer Loan Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part
as provided in the Issuer Loan Agreement.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable,
all as provided in the Issuer Loan Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or
otherwise, hereby waive presentment, demand, protest and all
other notices of any kind.
Unless otherwise defined herein, terms defined in the Issuer
Loan Agreement and used herein shall have the meanings given to
them in the Issuer Loan Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
PAN-WESTERN ENERGY CORPORATION LLC
By:
Name:
Title:
Schedule 1
Subsidiaries
Tangshan Panda Heat & Power Company, Ltd.
Tangshan Pan-Western Heat & Power Company, Ltd.
Tangshan Cayman Heat & Power Company, Ltd.
Tangshan Pan-Sino Heat Company, Ltd.
Schedule A
Issuer Loan Principal Amortization Schedule
Payment Calendar Total Principal
No. Year Payment
1 2000 $ 3,155,000
2 2001 8,867,000
3 2002 9,533,000
4 2003 10,283,000
5 2004 82,433,288
