EXHIBIT 10.75
ADDITIONAL PROJECTS CONTRACT
among
PANDA ENERGY INTERNATIONAL, INC.,
PANDA ENERGY CORPORATION,
and
PANDA INTERFUNDING CORPORATION
Dated as of July 31, 1996
_______________
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS 1
SECTION 1.01 DEFINITIONS 1
SECTION 1.02 USAGE 2
ARTICLE II. TRANSFERS OF OWNERSHIP INTERESTS 2
SECTION 2.01 TRANSFERS OF OWNERSHIP INTERESTS ON THE
EFFECTIVE DATE 2
SECTION 2.02 REQUIRED FUTURE TRANSFERS OF OWNERSHIP
INTERESTS IN ELIGIBLE PROJECTS 2
SECTION 2.03 SPECIAL EXCEPTIONS 4
SECTION 2.04 PERMISSIVE FUTURE TRANSFERS OF OWNERSHIP
INTERESTS 4
SECTION 2.05 DISPOSITION OF OWNERSHIP INTERESTS NOT
SUBJECT TO TRANSFER 5
SECTION 2.06 PANDA INTERNATIONAL AND PEC COVENANTS 5
SECTION 2.07 ADDITIONAL PROVISIONS 5
ARTICLE III. REPRESENTATIONS AND WARRANTIES 6
SECTION 3.01 REPRESENTATIONS AND WARRANTIES REGARDING
PANDA INTERNATIONAL, PEC AND THE PIC 6
SECTION 3.02 REPRESENTATIONS AND WARRANTIES REGARDING
THE PROJECT COMPANIES 7
SECTION 3.03 REPRESENTATIONS AND WARRANTIES REGARDING
TRANSFERS OF ELIGIBLE PROJECTS 9
ARTICLE IV. MISCELLANEOUS 12
SECTION 4.01 NOTICES 12
SECTION 4.02 AMENDMENTS 13
SECTION 4.03 ASSIGNMENT 13
SECTION 4.04 SUCCESSORS AND ASSIGNS 13
SECTION 4.05 INVALIDITY 13
SECTION 4.06 COUNTERPARTS 13
SECTION 4.07 NO ORAL AGREEMENTS 14
SECTION 4.08 GOVERNING LAW AND SUBMISSION TO
JURISDICTION 14
SECTION 4.09 RELATED PARTY CONTRACTS 14
SECTION 4.10 EFFECTIVE DATE AND TERM 14
GLOSSARY 1
_________________
ADDITIONAL PROJECTS CONTRACT
This ADDITIONAL PROJECTS CONTRACT, dated as of
July 31, 1996, is by and among Panda Energy International,
Inc., a Texas corporation ("Panda International"), Panda
Energy Corporation, a Texas corporation ("PEC"), and Panda
Interfunding Corporation, a Delaware corporation ("PIC").
W I T N E S S E T H
WHEREAS, PIC, Panda Funding Corporation, a Delaware
corporation and a subsidiary of PIC (the "Issuer"), and
Bankers Trust Company, a New York banking corporation, as
trustee (the "Trustee") under the Trust Indenture, dated as of
July 31, 1996 (the "Indenture"), by and among PIC, the Issuer
and the Trustee, have entered into the Indenture for the
purpose of issuing $105,525,000 principal amount of Pooled
Project Bonds, Series A due 2012 (the "Series A Bonds") and
additional series of bonds ("Additional Series", and
collectively with the Series A Bonds, the "Bonds");
WHEREAS, PEC has agreed to contribute to PIC (or a
wholly owned subsidiary of PIC) on the Effective Date (as
hereinafter defined) all of its ownership interests in the
Project Companies (as hereinafter defined), which interests
will serve as partial collateral for the Series A Bonds; and
WHEREAS, Panda International and PEC have agreed to
transfer or to cause to be transferred, as applicable, all
ownership interests held by Panda International, PEC or any
Affiliate (as hereinafter defined) of either of them in any
Future U.S. Project or Future International Project (as
hereinafter defined) that satisfies the requirements for such
transfer as set forth herein within the period set forth
herein;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, Panda
International, PEC and PIC hereby agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. In addition to the terms
defined in this Agreement, the capitalized terms used in this
Agreement will have the meanings ascribed to such terms in the
Glossary attached hereto. The Glossary constitutes a part of
this Agreement and is incorporated herein.
Section 1.02 Usage. Unless the context of this
Agreement clearly requires otherwise, (a) pronouns, wherever
used herein, and of whatever gender, will include natural
Persons and corporations and associations of every kind and
character, (b) the word "included" or "including" will mean
"including without limitation", (c) the word "or" will have
the inclusive meaning represented by the phrase "and/or", (d)
the words hereof, herein, hereunder, and similar terms in this
Agreement will refer to this Agreement as a whole and not any
particular section or article in which such words appear, (e)
all terms defined in this Agreement (or in the Glossary
attached hereto) in the singular will have the same meaning
when used in the plural and vice versa, (f) each reference to
a "year" that is not described as a calendar year, will refer
to the 12-month period following the applicable date of
commencement. The section, article and other headings in this
Agreement and the Table of Contents to this Agreement are for
reference purposes and will not control or affect the
construction of this Agreement or the interpretation hereof in
any respect. Article, section and subsection references are
to this Agreement unless otherwise specified.
ARTICLE II
Transfers of Ownership Interests
Section 2.01 Transfers of Ownership Interests on
the Effective Date. On the Effective Date PEC shall transfer
to a PIC U.S. Entity all of the Ownership Interests of PEC in
each of Panda-▇▇▇▇▇▇▇▇ Corporation, PRC II Corporation, Panda-
Brandywine Corporation, Panda Energy Corporation, and
Brandywine Water Company, each of which is a Delaware
corporation (individually, a "Project Company" and
collectively, the "Project Companies").
Section 2.02 Required Future Transfers of Ownership
Interests in Eligible Projects. (a) If at any time within the
period commencing on the Effective Date and ending on the
fifth anniversary thereof Panda International, PEC, or any
Affiliate of either of them executes a Power Purchase
Agreement with respect to any Future U.S. Project or any
Future International Project, Panda International or PEC, as
the case may be, shall transfer, and in the case of an
Ownership Interest owned by an Affiliate of either of them,
Panda International or PEC, as the case may be, shall cause
such Affiliate to transfer all of its Ownership Interest in
such Future U.S. Project to a PIC U.S. Entity or all of its
Ownership Interest in such Future International Project to a
PIC International Entity, as the case may be, on a date that
is not later than ninety (90) days following the earlier of
the Financial Closing or the Commercial Operations Date with
respect to such Future U.S. Project or Future International
Project, provided that the following conditions are satisfied:
(i) as a result of the transfer of such Ownership
Interest, after taking into account the Anticipated Additional
Debt, the annual projected PIC Debt Service Coverage Ratio and
the annual projected Consolidated Debt Service Coverage Ratio,
if then applicable under the Indenture, will equal or exceed
1.7:1 and 1.25:1, respectively, for each Future Ratio
Determination Period (as defined in the Indenture).
(ii) Rating Agency Confirmation has been received;
(iii) as a result of such transfer, none of Panda
International, PEC, PIC, any PIC Entity or any of their
respective Affiliates will become an "investment company" or a
company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(iv) as a result of such transfer, none of Panda
International, PEC, PIC, any PIC Entity or any of their
respective Affiliates will be classified as a "holding
company", a "subsidiary company" of a "holding company", an
"affiliate" of a "holding company", or an "affiliate" of a
"subsidiary" of a "holding company", as such terms are defined
in the Public Utility Holding Company Act of 1935, as amended;
(v) such transfer is not prohibited by any
Project Document (other than a Related Party Contract);
(vi) the Ownership Interest is not at such time
the subject of a foreclosure action commenced in connection
with indebtedness incurred with respect to such Ownership
Interest or the Eligible Project to which it pertains, nor has
a default or event of default occurred and not been cured or
waived with respect to such indebtedness whether or not a
foreclosure action has been commenced; and
(vii) in the case of an Ownership Interest in a
Future International Project, such transfer, in the opinion of
nationally recognized tax counsel selected by Panda
International, would not prevent Panda International (and any
affiliated group of companies with which it files a U.S.
consolidated return) from deferring U.S. income taxes on the
earnings from such Future International Project.
(b) Notwithstanding the provisions of Section
2.02(a), if the electric power generating facility being
developed by PEC near Lakeland, Florida (the "Panda-▇▇▇▇▇▇▇▇
Facility") achieves Financial Closing or the Commercial
Operations Date, PEC shall transfer to a PIC U.S. Entity all
of the Ownership Interests held by PEC in each of Panda-
▇▇▇▇▇▇▇▇ Corporation, a Delaware corporation, and Panda/Live
Oak Corporation, a Delaware corporation, not later than ninety
(90) days following the earlier of Financial Closing or the
Commercial Operations Date with respect to the Panda-▇▇▇▇▇▇▇▇
Facility. Such transfer shall occur irrespective of whether
the requirements of Section 2.02(a)(i)-(vii) are satisfied.
(c) Notwithstanding anything to the contrary set
forth in Section 2.02(a), with respect to any Eligible Project
that has been acquired by the Transferor after such Project
has achieved the Commercial Operations Date and that is
required to be transferred pursuant to Section 2.02(a), such
transfer shall occur on a date that is not later than ninety
(90) days following the date of such acquisition.
Section 2.03 Special Exception.
Notwithstanding anything to the contrary set forth
elsewhere herein, none of Panda International, PEC, or any
Affiliate of either of them shall be required to comply with
the requirements of Section 2.02(a) with respect to any
Ownership Interest in an Eligible Project that is being
developed in phases unless the phases can be legally separated
in a commercially reasonable manner. If the phases of an
Eligible Project cannot be so separated, then such Eligible
Project shall be treated as having achieved Financial Closing
or reaching Commercial Operatons only when such milestones are
achieved or reached with respect to all phases of such
Eligible Project.
Section 2.04 Permissive Future Transfers of
Ownership Interests. If Panda International, PEC, or any
Affiliate of either of them is not required to sell, transfer
or contribute an Ownership Interest to a PIC Entity within the
ninety (90) day period following the earlier of the Financial
Closing or the Commercial Operations Date with respect to a
Future U.S. Project or a Future International Project because
all of the conditions in Section 2.02(a)(i)-(vii) have not
been satisfied within such period, Panda International, PEC,
or such Affiliate may, but shall not be required to, sell,
transfer or contribute such Ownership Interest to a PIC Entity
at any time, provided the conditions in Section
2.02(a)(i)-(vii) are then satisfied.
Section 2.05 Disposition of Ownership Interests Not
Subject to Transfer. With respect to an Ownership Interest in
any Eligible Project as to which either Financial Closing or
the Commercial Operations Date has occurred but that was not
subject to transfer pursuant to Section 2.02(a) at the
earliest to occur of such dates, Panda International, PEC, or
any Affiliate of either of them shall be entitled, in its sole
discretion, to retain, sell, transfer, exchange, abandon or
otherwise dispose of, in whole or in part, such Ownership
Interest and any and all rights and interests therein, and no
PIC Entity shall have any right or interest with respect to
such Ownership Interest.
Section 2.06 Panda International and PEC Covenants.
Panda International and PEC each covenant and agree as
follows:
(a) Panda International and PEC shall use, and
shall cause their Affiliates to use, commercially reasonable
efforts to structure the Project Documents relating to each
Eligible Project such that their Ownership Interests in each
such Eligible Project will be eligible for transfer to a PIC
Entity pursuant to Section 2.02(a) or (b), as applicable, and
shall use and cause their Affiliates to use commercially
reasonable efforts to obtain all consents necessary in
connection with any such transfer; and
(b) PIC shall cause each PIC Entity to become a
party to this Agreement through the execution of an
appropriate instrument of accession.
Section 2.07 Additional Provisions.
(a) Nothing contained herein shall require that
Panda International, PEC, or any Affiliate of either of them
expend funds on the development, construction, ownership or
operation of any Eligible Project.
(b) Nothing contained herein shall be deemed to
prohibit the sale of any Ownership Interest prior to or in
connection with the Financial Closing for any Eligible Project
or to the extent permitted under the Indenture.
ARTICLE III
Representations and Warranties
Section 3.01 Representations and Warranties
Regarding Panda International, PEC and PIC.
Each of Panda International, PEC and PIC, as
applicable, hereby represents and warrants to each other as
follows:
(a) Due Authorization; Binding Obligation. Such
party is duly organized and validly existing as a corporation
under the laws of its state of organization and has all
requisite corporate power and authority to execute, deliver
and perform this Agreement. This Agreement has been duly and
validly authorized, executed and delivered by such party.
This Agreement constitutes the valid and binding obligation of
such party, enforceable in accordance with its terms, except
as enforcement may be limited by bankruptcy and other similar
laws of general application relating to or affecting the
rights and remedies of creditors and to general principles of
equity.
(b) Non-Contravention. The execution, delivery and
performance of this Agreement by such party does not violate
or conflict with (i) any provision of the organizational
documents of such party, (ii)Eany law, rule or regulation of
any federal, state, local or foreign government or agency
thereof, to which such party is subject or (iii)Eany contract
or other agreement binding upon such party.
(c) Third-Party and Regulatory Approvals. Such
party is not required to file, seek or obtain, from any Third
Party or any governmental body or agency, any notice, filing,
authorization, approval, order or consent in connection with
the execution, delivery and performance of this Agreement.
(d) Legal Proceedings, etc. Such party is not
engaged in or a party to or, to such party's knowledge,
threatened with, any suit, investigation, legal action or
other proceeding that, if determined adversely to such party,
would affect the ability of such party to perform its
obligations under this Agreement. There is no outstanding
order, ruling, decree, judgment or stipulation by or with any
court, administrative agency or other similar authority to
which such party is subject, that could reasonably be expected
to affect such party's ability to perform its obligations
under this Agreement.
Section 3.02 Representations and Warranties
Regarding the Project Companies. PEC represents and warrants
to PIC, with respect to each Project Company in which an
Ownership Interest is required to be transferred pursuant to
Section 2.01, the following:
(a) Organization. Such Project Company is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Such
Project Company has full corporate power and authority to
carry on its business as presently conducted by it and to own,
lease and operate its properties and assets.
(b) Qualifications, etc. Such Project Company is
duly qualified to do business as a foreign corporation in the
jurisdictions in which it conducts operations, and neither the
character of the properties owned or held under lease or
license by such company nor the nature of the business
conducted by it requires qualification to do business in any
other jurisdiction, except for such qualifications which if
failed to be obtained would not have a Material Adverse Effect
on the Project Company.
(c) Subsidiaries. Except as set forth on Schedule
3.02(c), such Project Company does not own, directly or
indirectly, any capital stock or security or other equity
interest in, or have any obligation to form or participate in,
any company, partnership, joint venture or other organization
or enterprise. All capital stock, securities and other equity
interests set forth on Schedule 3.02(c) are owned by the
entities set forth on Schedule 3.02(c) free and clear of all
liens, except for liens created or permitted under the
applicable Project Documents.
(d) Legal Proceedings, etc. Such Project Company
is not a party to or, to PEC's knowledge, is not threatened
with, any suit, investigation, legal action or other
proceeding, before any court, administrative or regulatory
agency, arbitration panel or other similar authority the
outcome of which could reasonably be expected to have a
Material Adverse Effect on such Project Company. There is no
outstanding order, ruling, decree, judgment or stipulation by
or with any court, administrative agency, arbitration panel or
other similar authority to which such Project Company is
subject that could reasonably be expected to have a Material
Adverse Effect on such Project Company.
(e) Capitalization. PEC owns all of the issued and
outstanding shares of capital stock in such Project Company,
which shares are validly issued, fully paid and nonassessable.
Except as set forth on Schedule 3.02(e), there are no
outstanding options, warrants or other rights to purchase,
obtain or acquire, or any outstanding securities or
obligations convertible into or exchangeable for, or any
voting agreements with respect to, any shares of capital stock
of such Project Company or any other securities or other
equity interests of any such Entity and no such Entity is
obligated, now or in the future, contingently or otherwise, to
issue, purchase or redeem capital stock or any other
securities or other equity interests to or from any Person.
Except as set forth on Schedule 3.02(e), no Entity other than
PEC has a contractual right to participate in the cash flow
related to the Ownership Interests in such Project Company.
True and complete copies of the organizational documents of
such Project Company shall be delivered to the PIC U.S. Entity
to which each Ownership Interest is to be transferred on or
before the date of such transfer.
(f) Clear Title. The Ownership Interest will be
conveyed free and clear of liens or other material rights or
material encumbrances, except for Permitted Liens.
(g) Project Documents and Violations. There are no
Project Document Violations under the Project Documents
relating to such Project Company. True and complete copies of
all Project Documents relating to such Project Company will be
provided to the PIC U.S. Entity to which the Ownership
Interest in such Project Company will be transferred following
such transfer.
(h) Non-contravention. The consummation of the
transfers contemplated by Section 2.01 will not conflict with
or cause a breach of, or require any consent that has not been
obtained under, the organizational documents with respect to
such Project Company, any Project Document related to such
Project Company, or any applicable law, regulation, permit or
authorization relating to the Ownership Interest or such
Project Company, except to the extent that any such conflict,
breach or failure to obtain such consent could not reasonably
be expected to have a Material Adverse Effect on such Project
Company.
(i) Taxes. No Liens for taxes exist with respect
to any assets or properties of such Project Company, except
for statutory Liens for taxes not yet due and Liens for taxes
that are the subject of a Good Faith Contest.
(j) Compliance with Laws. (i) Such Project Company
is in compliance with all applicable laws and regulations,
except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect on such Project
Company, (ii) to the knowledge of PEC, no claims or notices of
claims have been received by such Project Company to the
effect that such Project Company is in violation of any
applicable laws or regulations, except for violations that
could not reasonably be expected to have a Material Adverse
Effect on such Project Company and (iii) all permits and
authorizations required by such Project Company to fulfill its
obligations under its respective Project Documents have been
obtained and are in full force and effect, except for permits
or authorizations that are not yet required to be obtained or
as to which the failure to have obtained the same could not
reasonably be expected to have a Material Adverse Effect on
such Project Company.
(k) Regulatory Matters. Such Project Company is
not a "public utility", an "electric utility", an "electric
utility holding company", an "electric utility company", a
"holding company" or any similarly named Entity that is
subject to utility regulation, or a subsidiary or an affiliate
of any of the foregoing, under any applicable law of any state
or the U.S. (including, without limitation, the Public Utility
Holding Company Act of 1935, as amended, and the Federal Power
Act of 1935, as amended).
Section 3.03 Representations and Warranties
Regarding Transfers of Eligible Projects. In connection with
each transfer of an Ownership Interest in an Eligible Project
required by Section 2.02(a) or 2.02(b) or permitted by Section
2.04, Panda International or PEC shall represent and warrant
in the instruments of transfer, to the extent that either of
such Entities is the Transferor, or shall cause their
Affiliate to represent and warrant in the instruments of
transfer, if such Affiliate is the Transferor, the following:
(a) Organization. Each Project Ownership Entity in
which an Ownership Interest is to be transferred is duly
organized and validly existing under the laws of the
jurisdiction of its organization. Each such Project Ownership
Entity has full power and authority to carry on its business
as presently conducted by it and to own, lease and operate its
properties and assets.
(b) Qualifications, etc. Each Project Ownership
Entity in which an Ownership Interest is to be transferred is
duly qualified to do business in the jurisdictions in which it
conducts operations, and neither the character of the
properties owned or held under lease or license by such
Project Ownership Entity nor the nature of the business
conducted by it requires qualification to do business in any
other jurisdiction, except for such qualifications which if
failed to be obtained would not have a Material Adverse Effect
on the Ownership Interest of such Project Ownership Entity.
(c) Subsidiaries. Except as set forth in a
schedule to the instruments of transfer, no Project Ownership
Entity in which such Ownership Interest is to be transferred
owns, directly or indirectly, any capital stock or security or
other interest in, nor has any obligation to form or
participate in, any company, partnership, joint venture or
other organization or enterprise.
(d) Legal Proceedings, etc. No Project Ownership
Entity in which an Ownership Interest is to be transferred is
a party to or, to such Transferor's knowledge, threatened
with, any suit, investigation, legal action or other
proceeding before any court, administrative or regulatory
agency, arbitration panel or other similar authority the
outcome of which could reasonably be expected to have a
Material Adverse Effect on such Project Ownership Entity.
There is no outstanding order, ruling, decree, judgment or
stipulation by or with any court, administrative agency,
arbitration panel or other similar authority to which such
Project Ownership Entity is subject that could reasonably be
expected to have a Material Adverse Effect on the Ownership
Interest of such Project Ownership Entity.
(e) Capitalization. The Ownership Interests to be
transferred are validly issued, fully paid and non-assessable
and there are no outstanding options, warrants or other rights
to purchase, obtain or acquire, or any outstanding securities
or obligations convertible into or exchangeable for, or any
voting agreements with respect to, any member interests,
shares of capital stock or other equity interests of any such
Project Ownership Entity and such Project Ownership Entity is
not obligated, at the time of such transfer or at any time in
the future, contingently or otherwise, to issue, purchase or
redeem capital stock or any other securities or other equity
interests to or from any Person. Except as set forth in a
schedule to the instruments of transfer, no Entity other than
the Transferor has a contractual right to participate in the
cash flow related to such Ownership Interest. True and
complete copies of the organizational, charter or partnership
documents of each Project Ownership Entity in which an
Ownership Interest will be transferred pursuant to such
instruments of transfer will be provided to the PIC Entity to
which such Ownership Interest is to be transferred on or
before the effective date of transfer.
(f) Clear Title. The Ownership Interest will be
conveyed free and clear of material liens or other material
rights or material encumbrances, other than those created by
or permitted under the Project Documents relating to the
Ownership Interest or such Project Ownership Entity.
(g) Project Documents and Project Document
Violations. There are no Project Document Violations with
respect to the Project Documents relating to the Ownership
Interest or any Project Ownership Entity to which the
Ownership Interest pertains. True and complete copies of all
Project Documents relating to the Ownership Interest and the
Project Ownership Entity to which the Ownership Interest
pertains will be provided to the PIC Entity to which such
Ownership Interest will be transferred.
(h) Non-contravention. The consummation of the
transfer of the Ownership Interest will not conflict with or
cause a breach of, or require any consent that has not been
obtained under, any Project Document related to the Ownership
Interest or any Project Ownership Entity to which the
Ownership Interest pertains, or any applicable law,
regulation, permit or authorization, except to the extent that
any such conflict, breach or failure to obtain such consent
could not reasonably be expected to have a Material Adverse
Effect on the Ownership Interest or such Project Ownership
Entity.
(i) Taxes. No liens for taxes exist with respect
to any assets or properties of any Project Ownership Entity to
which such Ownership Interest pertains, except for statutory
liens for taxes not yet due and Liens that could not
reasonably be expected to have a Material Adverse Effect on
the Ownership Interest or such Project Ownership Entity.
(j) Compliance with Laws. (i) Each Project
Ownership Entity to which such Ownership Interest pertains is
in compliance with all applicable laws and regulations, except
where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect on the Ownership
Interest or such Project Ownership Entity, (ii) to the
knowledge of the Transferor, no claims or notices of claims
have been received by such Project Ownership Entity to the
effect that such Project Ownership Entity is in violation of
any applicable laws or regulations, except for violations that
could not reasonably be expected to have a Material Adverse
Effect on the Ownership Interest or such Project Ownership
Entity, and (iii) all permits and authorizations required by
such Project Ownership Entity to fulfill its obligations under
its respective Project Documents have been obtained and are in
full force and effect, except for permits or authorizations
that are not, as of the time of such transfer, required to
have been obtained or as to which the failure to have obtained
the same could not reasonably be expected to have a Material
Adverse Effect on the Ownership Interest or such Project
Ownership Entity.
(k) Regulatory Matters. None of the Project
Ownership Entities in which an Ownership Interest is to be
transferred pursuant to such instruments of transfer is a
"public utility", an "electric utility", an "electric utility
holding company", an "electric utility company", a "holding
company" or any similarly named entity that is subject to
utility regulation, or a subsidiary or an affiliate of any of
the foregoing, under any applicable law of any state or the
U.S. (including, without limitation, the Public Utility
Holding Company Act of 1935, as amended, and the Federal Power
Act of 1935, as amended).
ARTICLE IV
Miscellaneous
Section 4.01 Notices. All notices and other
communications provided for herein (including any
modifications of, or waivers or consents under, this
Agreement) shall be given or made in writing and delivered by
hand, telecopy, courier or U.S. Mail to the intended recipient
at the "Address for Notices" specified below (or, as to any
party, at such other address as will be designated for notice
by such party in a notice to the other party). Any notice
given pursuant to this Agreement will be deemed effective when
such notice is received (or upon refusal of receipt) by the
addressee; provided that notices received by any party after
its normal business hours (or on a day other than a Business
Day) will be effective on the next Business Day.
Addresses For Notices:
To Panda
International: Panda Energy International, Inc.
Attention: General Counsel
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Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To PEC, PIC or
a PIC Entity: Panda Energy Corporation or
Panda Interfunding Corporation
or PIC Entity
c/o Panda Energy International,
Inc.
Attention: General Counsel
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Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Section 4.02 Amendments. No amendment,
modification, waiver, consent, approval, direction or other
action under this Agreement will be effective unless in
writing and signed by the party to be bound.
Section 4.03 Assignment. Except as otherwise
provided in this Section 4.03 no party shall have the right to
assign any of its rights or delegate any of its duties or
obligations under this Agreement to any other Person without
the prior written consent of the other parties hereto, which
consent may be withheld in the consenting party's sole
discretion. Any such assignment or delegation without such
consent will be void ab initio. Notwithstanding the foregoing
provisions of this Section 4.03 to the contrary, any party
hereto shall be entitled to assign all of its rights and
delegate all of its duties and obligations under this
Agreement to any successor of such party by merger or to any
purchaser of all or substantially all of the assets of such
party.
Section 4.04 Successors and Assigns. Subject to
Section 4.03, this Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective
permitted successors and assigns.
Section 4.05 Invalidity. In the event that any one
or more of the provisions contained in this Agreement will,
for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability
will not affect any other provision of this Agreement.
Section 4.06 Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together will constitute one and the same instrument and the
parties hereto may execute this Agreement by signing any such
counterpart.
Section 4.07 No Oral Agreements. This Agreement
embodies the entire agreement and understanding between the
parties and supersedes all other agreements and understandings
between such parties relating to the subject matter hereof and
may not be contradicted by evidence of prior, contemporaneous,
or subsequent oral agreements of the parties.
Section 4.08 Governing Law and Submission to
Jurisdiction. THIS AGREEMENT WILL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW (EXCEPT SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
Section 4.09 Related Party Contracts. Any Related
Party Contract shall be deemed acceptable for all purposes of
this Agreement if it contains terms and conditions that would
generally be considered in the independent power industry to
represent an arm's length transaction.
Section 4.10 Effective Date and Term. This
Agreement will become effective as of the date of issuance of
the Series A Bonds pursuant to the Indenture (the "Effective
Date"), and will terminate (the "Initial Term") on the earlier
of (i) July 31, 2006, or (ii) the date on which neither Panda
International nor PEC nor any Affiliate (excluding PIC and any
PIC Entity) thereof has any Ownership Interest in a Future
U.S. Project or a Future International Project for which a
Power Purchase Agreement has been executed during the period
commencing on the Effective Date and ending on the fifth
anniversary thereof and that is subject to being transferred
to a PIC Entity pursuant to Section 2.02(a) or (b). The
parties hereto will have no further rights or obligations
hereunder following such termination (other than with respect
to any defaults by either party hereunder prior to such
termination). Notwithstanding the foregoing, Panda
International and PEC shall each have the right, which may be
exercised by either of them independently or by both of them,
to extend the term of this Agreement for up to an additional
five (5) years beyond the Initial Term, if notice of such
extension is given to PIC and to each PIC Entity which becomes
a party to this Agreement not later than thirty (30) days
prior to the expiration of the Initial Term. Neither PIC nor
any PIC Entity which becomes a party to this Agreement shall
have the right to extend the Initial Term hereof.
Although this Agreement is dated July 31, 1996, this
Agreement will become effective only on the Effective Date.
EXECUTED as of the Effective Date.
PANDA ENERGY INTERNATIONAL, INC.
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board,
President and Chief
Executive Officer
PANDA ENERGY CORPORATION
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board,
President and Chief
Executive Officer
PANDA INTERFUNDING CORPORATION
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board,
President and Chief
Executive Officer
________________
GLOSSARY
Additional Projects Contract
among
Panda Energy International, Inc.
Panda Energy Corporation and
Panda Interfunding Corporation
In addition to such other defined terms as may be
set forth in the Agreement in which this Glossary is included,
as used in such Agreement or in this Glossary, the following
terms have the following respective meanings (capitalized
terms not otherwise defined herein or in the Agreement shall
have the meanings set forth in the Indenture):
"Additional Series" -- Additional series of Bonds
(other than the Series A Bonds) issued pursuant to the
Indenture and a Series Supplemental Indenture (as defined in
the Indenture).
"Anticipated Additional Debt" -- The original
principal amount of an Additional Series proposed to be issued
which is equal to the largest principal amount of such
Additional Series that will provide a projected PIC Debt
Service Coverage Ratio and a projected Consolidated Debt
Service Coverage Ratio (if then applicable) of at least 1.7:1
and 1.25:1, respectively, for each Future Ratio Determination
Period, as confirmed by the Consolidating Engineer, assuming,
in respect of the Additional Series proposed to be issued:
(i) a maximum maturity and average life generally available in
the marketplace for debt of a similar nature and (ii) a coupon
rate then prevailing in the market for debt of a similar
nature, and taking into account (a) in the case of the PIC
Debt Service Coverage Ratio, Cash Available for Distribution
from the Project Portfolio and (b) in the case of the
Consolidated Debt Service Coverage Ratio, Cash Available from
Operations (net of any reserve requirements under Project-
level debt and Company-level debt) from the Project Portfolio
(giving effect, in each case, to transfer to the Projected
Portfolio of any Project in respect of which such Additional
Series is proposed to be issued). In making this analysis,
the Consolidating Engineer shall use generally accepted
financial analysis methods and generally follow the methods
used to calculate the amount of the offering of the Series A
Bonds, including the methods used in the Consolidated Pro
Forma Report for the Series A Bonds.
"Affiliate" -- With respect to any Person, (a) a
Person directly or indirectly owning, controlling or holding
the power to vote 50 percent or more of the outstanding voting
securities of such other Person, (b) any Person 50 percent or
more of whose outstanding voting securities are directly or
indirectly owned, controlled or held with power to vote, by
such other Person, or (c) any Person directly or indirectly
controlling, controlled by or under common control with, such
other Person.
"Agreement" -- The Additional Projects Contract
dated as of July 31, 1996 among Panda Energy International,
Inc., Panda Energy Corporation and Panda Interfunding
Corporation, in which this Glossary is included.
"Bonds" -- Pooled Project bonds of any series issued
under the Indenture and any Series Supplemental Indenture (as
defined in the Indenture).
"Cash Available for Distribution" -- As defined in
the Indenture.
"Cash Available from Operations" -- As defined in
the Indenture.
"Commercial Operations Date" -- With respect to an
Eligible Project, the date of (a) completion of construction
and testing and the functioning of such Eligible Project, and
(b) the satisfaction and discharge of all completion
requirements of, and commencement of regular capacity or
reservation payments under, the purchase, transportation or
other off-take or use contracts for such Eligible Project.
"Consolidated Debt Service Coverage Ratio" -- As
defined in the Indenture.
"Consolidating Engineer" -- As defined in the
Indenture.
"Consolidating Pro Forma Report" -- The report
entitled "Summary of the Consolidated Pro Formas of the Panda-
▇▇▇▇▇▇▇▇ and Panda-Brandywine Power Projects" prepared by ICF
Resources Incorporated, dated July 26, 1996, containing a
summary consolidation of the pro forma financial projections
for the Panda-Brandywine Facility and the Panda-▇▇▇▇▇▇▇▇
Facility.
"Control" -- The power to exercise a controlling
influence over the management and policies of an Entity,
directly or indirectly, whether through the ownership of
Equity Interests, by contract or otherwise.
"Effective Date" -- As defined in Section 4.10 of
the Agreement.
"Eligible Project" -- Any Future U.S. Project or
Future International Project in which Panda International or
PEC or any Affiliate of either of them (other than PIC or any
direct or indirect subsidiary thereof), holds or acquires an
Ownership Interest.
"Entity" -- Any corporation, company, voluntary
association, partnership, joint venture, trust, estate,
unincorporated organization, governmental authority or any
other form of legal Person, other than a natural Person.
"Equity Interests" -- Collectively, stock in
corporations, shares in limited liability and offshore
companies and other partnership or equity interests that
participate in the profits of the underlying Entity.
"Financial Closing" -- With respect to an Eligible
Project, means closing of the initial construction or
long-term project financing (or acquisition financing after
either of such dates) of such Eligible Project.
"Future International Project" -- An electric power
generation project (including businesses substantially related
thereto, such as a steam host affiliated therewith) being
developed, constructed, owned or operated in a country other
than the U. S., except for any such project that is included
within the definition of Future U.S. Project.
"Future Ratio Determination Period" -- As defined in
the Indenture.
"Future U.S. Project" -- An electric power
generation project (including businesses substantially related
thereto, such as a steam host affiliated therewith) being
developed, constructed, owned or operated in the U.S. (other
than the projects being developed, constructed, owned or
operated by the Project Companies), or (i) being developed,
constructed, owned or operated in a country other than the
U.S. and (ii) as to which U.S. tax deferred status is not
being sought.
"Glossary" -- This Glossary to the Agreement.
"Indenture" -- The Trust Indenture dated as of July
31, 1996 by and among the Issuer, PIC and the Trustee, as
supplemented by any Series Supplemental Indenture thereto.
"Initial Term" -- As defined in Section 4.10 of this
Agreement.
"Ownership Interest" -- Collectively, with respect
to any Eligible Project, Equity Interests or other securities
in the corresponding Project Company or other Project
Ownership Entity representing (i) at least a direct or
indirect 50% ownership or equivalent interest in an Eligible
Project, or (ii) at least a direct or indirect 25% ownership
interest in, and Control over, an Eligible Project, provided,
that no other Ownership Interest represents greater control
over such Eligible Project. An Ownership Interest may be in
the form of Equity Interests or other securities in a Project
Company, or in a Project Ownership Entity that owns (directly
or through one or more Project Ownership Entities) Equity
Interests or other securities in a Project Company.
"Panda-Brandywine Facility" -- The 230 MW natural
gas-fired, combined-cycle cogeneration facility being
constructed and located in Brandywine, Prince George's County,
Maryland.
"Panda-▇▇▇▇▇▇▇▇ Facility" -- The natural gas-fired,
combined-cycle cogeneration facility to be located near
Lakeland, Florida that is being developed by PEC.
"Panda-▇▇▇▇▇▇▇▇ Facility" -- The 180 MW natural gas-
fired, combined-cycle cogeneration facility located in Roanoke
Rapids, North Carolina.
"Payment Date" -- As defined in the Indenture.
"Person" -- Any natural person or Entity.
"PIC Debt Service Coverage Ratio" -- As defined in
the Indenture.
"PIC Entity" -- Any PIC U.S. Entity or PIC
International Entity.
"PIC International Entity" -- Any Entity (i) that
100% of its voting capital stock or other voting equity
interest (other than directors' qualifying shares mandated by
applicable law and de minimis shares issued to comply with
legal requirements for a minimum number of shareholders), is
owned directly by PIC and (ii) that holds or has been
established to hold an Ownership Interest in a Future
International Project.
"PIC U.S. Entity" -- Any Entity (i) that 100% of its
voting capital stock or other voting equity interest is owned
directly by PIC and (ii) that holds or has been established to
hold an Ownership Interest in a Future U.S. Project.
"Power Purchase Agreement" -- A power purchase
agreement or similar agreement for the sale of electric
capacity and/or electric energy to a utility or other
purchaser from an Eligible Project.
"Project" -- As defined in the Indenture.
"Project Company" -- Each of Panda-▇▇▇▇▇▇▇▇
Corporation, a Delaware corporation, PRC II Corporation, a
Delaware corporation, Panda-Brandywine Corporation, a Delaware
corporation, Panda Energy Corporation, a Delaware corporation,
and Brandywine Water Company, a Delaware corporation.
"Project Document Violation" -- Any breach,
violation or default (or event that with notice or the lapse
of time, or both, would constitute a breach, violation or
default) under a Project Document that could reasonably be
expected to have a Material Adverse Effect on the
corresponding Ownership Interest. Any such breach, violation
or default that would, if unremedied, give rise to a right to
terminate (or accelerate indebtedness under) a Project
Document will be deemed to have a Material Adverse Effect on
the corresponding Ownership Interest.
"Project Documents" -- With respect to an Eligible
Project, a Project Company, a Project Ownership Entity or any
Ownership Interest therein, the contracts, agreements,
licenses and permits (including all amendments thereto) that
burden or benefit (in any material respect) such Eligible
Project, Project Company, Project Ownership Entity or
Ownership Interest, including without limitation contracts and
agreements relating to the project construction, financing or
operation. The Project Documents may include one or more
Related Party Contracts and Shareholder Commitments.
"Project Ownership Entities" -- Collectively, with
respect to any Eligible Project, an Entity (excluding any PIC
Entity or any direct or indirect parent of such PIC Entity)
that is (i) the direct or indirect owner of a Project or
(ii) that is obligated under or a guarantor of Project Debt or
that has granted a security interest in any of its assets
(including Project cash flows), other than the capital stock
of any of its Subsidiaries (and any dividends or other
distributions on such capital stock and proceeds therefrom),
to secure the payment of Project Debt or the performance of
any Project Document.
"Project Portfolio" -- As defined in the Indenture.
"Rating Agency Confirmation" -- Confirmation by any
two of the three Top Tier Rating Agencies that then maintains
a rating on the Bonds (all of which Rating Agencies shall be
requested to provide such confirmation) to the effect that the
rating on the Bonds will not be reduced as a result of the
transfer of an Ownership Interest, including without
limitation as a result of the issuance of Additional Series in
an amount equal to the Anticipated Additional Debt.
"Related Party Contract" -- Any contract burdening
or benefiting an Eligible Project pursuant to which Panda
International or any Affiliate of it is required to perform
services for or is entitled to obtain benefits from such
Project, including any marketing, capacity, operations and
maintenance, fuel management or fuel supply contract; provided
that a Related Party Contract shall not include any
Shareholder Commitment.
"Series A Bonds" -- The 11-5/8% Pooled Project
Bonds, Series A due 2012, issued pursuant to the Indenture.
"Shareholder Commitment" -- Any guarantee,
indemnity, other liability, undertaking or commitment of Panda
International, PEC or any Affiliate of either of them entered
into in connection with the development, acquisition,
financing or ownership of an Eligible Project or an Ownership
Interest therein, in favor of one or more of the corresponding
Project Ownership Entities or any lender, supplier, customer
or governmental Entity for the primary purpose of providing
financial or other credit support with respect to the Eligible
Project or the Ownership Interest therein.
"Third Party" -- With respect to an Entity, any
person that is not an Affiliate of such Entity.
"Top Tier Rating Agencies" -- Standard and Poor's,
▇▇▇▇▇'▇ Investors Service, Inc. and Duff & ▇▇▇▇▇▇ Credit
Rating Co., and any successor to any of the foregoing, and any
other firm that in the regular course of its business
evaluates and issues ratings on bonds and other debt
instruments and whose ratings are generally recognized as
having significant influence in the debt financing markets for
similar debt offerings.
"Transferor" -- Panda International, PEC, or any
Affiliate of either of them, as the case may be, that holds an
Ownership Interest that has been, is being, or will be
transferred to any PIC Entity pursuant to this Agreement.
"U.S." -- All states, commonwealths, territories and
possessions of the United States of America, as of the date
hereof.
