EX-10 3 ex10-8.htm EXHIBIT 10.8 ex10-8.htm

Exhibit 10.8

  

EXECUTION VERSION

Dated 28 March 2014

 

KYUDEN SARULLA PTE. LTD.

ORSARULLA INC.

PT MEDCO GEOPOWER SARULLA

SARULLA OPERATIONS LTD

SARULLA POWER ASSET LIMITED

as the Borrower

 

ASIAN DEVELOPMENT BANK

as ADB (in certain capacities)

 

JAPAN BANK FOR INTERNATIONAL COOPERATION

as JBIC

 

CERTAIN FINANCIAL INSTITUTIONS

as the Covered Lenders

 

CERTAIN FINANCIAL INSTITUTIONS

as the Hedging Counterparties

 

MIZUHO BANK, LTD.

as the Intercreditor Agent, the Covered Lenders Facility Agent and the JBIC Facility Agent

 

MIZUHO BANK (USA)

as the Offshore Security Agent

 

PT. BANK MIZUHO INDONESIA

as the Onshore Security Agent

 

and

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

ING BANK N.V., TOKYO BRANCH

MIZUHO BANK, LTD.

NATIONAL AUSTRALIA BANK LIMITED

SOCIÉTÉ GÉNÉRALE, TOKYO BRANCH

SUMITOMO MITSUI BANKING CORPORATION

as the Mandated Lead Arrangers

 


 

COMMON TERMS AGREEMENT

 

relating to the

 

SARULLA GEOTHERMAL POWER PROJECT

 


 

9 Raffles Place

#42-02 Republic Plaza

Singapore 048619

(65) 6536 1161 (Tel)

(65) 6536 1171 (Fax)

www.lw.com 

 

 
 

 

 

 

CONTENTS

 

CLAUSE / SCHEDULE

PAGE
     

1.

DEFINITIONS AND INTERPRETATION

2

     

2.

The Senior Facilities

81

     

3.

Conditions Precedent

84

     

4.

Repayment

86

     

5.

Cancellation and Prepayment

86

     

6.

Interest Periods

90

     

7.

Interest

91

     

8.

Payments

92

     

9.

Taxes

95

     

10.

Market Disruption

99

     

11.

Increased Costs

101

     

12.

Mitigation

102

     

13.

Representations and Warranties

103

     

14.

Hedging

114

     

15.

Information undertakings

115

     

16.

General Undertakings

120

     

17.

Equity-Related Undertakings

127

     

18.

Project Undertakings

128

     

19.

Environmental and Social Undertakings

143

     

20.

Project Insurance

148

     

21.

Events of Default

152

     

22.

The Agents and Security

164

     

23.

Fees

174

     

24.

Expenses and Stamp Duties

175

     

25.

Indemnities

175

     

26.

Evidence and Calculations

177

     

27.

Waivers and Amendments

178

     

28.

Changes to the Parties

179

     

29.

Advisors

187

     

30.

Disclosure of Information

187

     

31.

Set-Off

190

     

32.

Severability

190

     

33.

Counterparts

191

     

34.

Notices

191

     

35.

Language

194

     

36.

Dispute Resolution

194

 

 

 
 

 

 

 

CONTENTS

 

CLAUSE / SCHEDULE PAGE
     

37.

Governing Law

196

     

38.

Entire Agreement

196

     

Schedule 1 The Senior Lenders  

197
   

Schedule 2 Documentary Conditions Precedent  

203
   

Schedule 3 Hedging Programme  

213
   

Schedule 4 Form Of Deed Of Novation – Senior Lenders  

214
   

Schedule 5 Form Of Deed Of Accession – Hedging Counterparties  

224
   

Schedule 6 Material Governmental Authorisations  

231
   

Schedule 7 Project Insurances  

237
   

Schedule 8 Form Of Construction And Drilling Progress Report  

270
   

Schedule 9 Form Of Operation Report  

276
   

Schedule 10 Form Of Reservoir Monitoring Report  

286
   

Schedule 11 Physical And Operational Completion Certifications  

293
   

Schedule 12 Project Milestones  

316
   

Schedule 13 Project Site  

321
   

SIGNATORIES

Signature Page

  

 

 
 

 

 

  

THIS COMMON TERMS AGREEMENT (this “Agreement”) is dated 28 March 2014 and is made between:

 

(1)

KYUDEN SARULLA PTE. LTD., a limited liability company established under the laws of Singapore whose registered head office is at 158 Cecil Street, #11-01, Singapore 069545 (the “Kyushu Borrower Entity”);

 

(2)

ORSARULLA INC., an exempted company with limited liability incorporated in the Cayman Islands with registered number 186158 and its registered office at PO Box 309, Ugland House, South Church Street, George Town, Grand Cayman KY1-1104, Cayman Islands (the “Ormat Borrower Entity”);

 

(3)

PT MEDCO GEOPOWER SARULLA, a limited liability company established under the laws of Indonesia whose registered head office is at The Energy Building 50th Floor SCBD Lot 11A Jl. Jend Sudirman Kav. 52-53, Jakarta 12190, Indonesia (the “Medco Borrower Entity”);

 

(4)

SARULLA OPERATIONS LTD, an exempted company with limited liability incorporated in the Cayman Islands with registered number 196738 and its registered office at PO Box 309, Ugland House, South Church Street, George Town, Grand Cayman KY1-1104, Cayman Islands (the “Operator”);

 

(5)

SARULLA POWER ASSET LIMITED, an exempted company with limited liability incorporated in the Cayman Islands with registered number 189923 and its registered office at PO Box 309, Ugland House, South Church Street, George Town, Grand Cayman KY1-1104, Cayman Islands (the “Itochu Borrower Entity”);

 

(6)

ASIAN DEVELOPMENT BANK, an international organisation established by the Agreement Establishing the Asian Development Bank, in its individual capacity;

 

(7)

ASIAN DEVELOPMENT BANK, an international organisation established by the Agreement Establishing the Asian Development Bank, not in its individual capacity but solely in its capacity as an implementing entity of the Clean Technology Fund;

 

(8)

ASIAN DEVELOPMENT BANK, an international organisation established by the Agreement Establishing the Asian Development Bank, not in its individual capacity but solely in its capacity as an implementing entity of the Canadian Climate Fund for the Private Sector in Asia under the Clean Energy Financing Partnership Facility (established by the Government of Canada);

 

(9)

JAPAN BANK FOR INTERNATIONAL COOPERATION (“JBIC”);

 

(10)

CERTAIN FINANCIAL INSTITUTIONS now or hereafter party hereto as the Covered Lenders;

 

(11)

CERTAIN FINANCIAL INSTITUTIONS now or hereafter party hereto as the Hedging Counterparties;

 

(12)

MIZUHO BANK, LTD., as intercreditor agent for the Senior Secured Parties (in such capacity, the “Intercreditor Agent”);

 

(13)

MIZUHO BANK, LTD., as facility agent for the Covered Lenders (in such capacity, the “Covered Lenders Facility Agent”);

 

(14)

MIZUHO BANK, LTD., as facility agent for JBIC (in such capacity, the “JBIC Facility Agent”);

 

 

 
 

 

 

(15)

MIZUHO BANK (USA) as offshore security agent for the Senior Secured Parties (in such capacity, the “Offshore Security Agent”);

 

(16)

PT. BANK MIZUHO INDONESIA as onshore security agent for the Senior Secured Parties (in such capacity, the “Onshore Security Agent” and, together with the Offshore Security Agent, the “Security Agents”); and

 

(17)

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., ING BANK N.V., TOKYO BRANCH, MIZUHO BANK, LTD., NATIONAL AUSTRALIA BANK LIMITED, Société Générale, TOKYO BRANCH and SUMITOMO MITSUI BANKING CORPORATION as the mandated lead arrangers (together, the “Mandated Lead Arrangers” and each, a “Mandated Lead Arranger”).

 

BACKGROUND

 

(A)

The Borrower proposes to design, develop, engineer, procure, construct, erect, commission, test, operate and maintain a geothermal power plant and related facilities and assets in Sarulla, North Sumatra, Indonesia, with an aggregate plant rated capacity of up to 330 MW (net) and whose output will be sold to PLN.

 

(B)

In order to assist the Borrower to implement the Project, the Borrower has requested that:

 

 

(i)

JBIC (1) provide to the Borrower the JBIC Facility in accordance with the terms and conditions of the JBIC Facility Agreement and this Agreement and (2) extend the EPRG to the Covered Lenders in respect of the Covered Lenders Facility;

 

 

(ii)

the Covered Lenders provide to the Borrower the Covered Lenders Facility in accordance with the terms and conditions of the Covered Lenders Facility Agreement and this Agreement;

 

 

(iii)

ADB provide to the Borrower the ADB Facility in accordance with the terms and conditions of the ADB Facility Agreement and this Agreement; and

 

 

(iv)

the Hedging Counterparties enter into the Hedging Agreements.

 

(C)

This Agreement, together with certain of the other Senior Finance Documents, sets out, amongst other things, the terms and conditions on which the Senior Lenders have agreed to provide the Senior Facilities to the Borrower.

 

 

 
 

 

 

IT IS AGREED as follows:

 

1.

DEFINITIONS AND INTERPRETATION

 

1.1

Definitions

 

In this Agreement, unless the context requires otherwise or unless otherwise defined in this Agreement, terms defined in the Intercreditor Deed shall have the same meaning where used in this Agreement and, in addition, the following terms have the following meanings:

 

“Abandonment”

means:

 

(a)           prior to the Lenders’ Completion Date, the cessation of all or substantially all of the construction activities related to all or any material part of the Field Facilities or all or a material part of the Electricity Generation Facilities (including, for the avoidance of doubt, any Generating Unit) in excess of forty five (45) consecutive days;

 

(b)          on and after the Lenders’ Completion Date:

 

(i)            placing all or any material part of the Field Facilities with respect to any Field or any of the Electricity Generating Facilities (including, for the avoidance of doubt, any Generating Unit) on a “care and maintenance” only basis; or

 

(ii)           the cessation of operation of all or any material part of the Field Facilities with respect to any Field or any of the Electricity Generating Facilities (including, for the avoidance of doubt, any Generating Unit), in each case, in excess of sixty (60) consecutive days; or

 

 

 

 
 

 

 

 

 

(c)           at any time, the Borrower ceases to have the right to possess and use on an exclusive and uninterrupted basis all or any material part of the Field Facilities with respect to any Field, the Electricity Generating Facilities, any Generating Unit or any other material Project Assets for the purpose of implementing the Project in the manner contemplated by the Transaction Documents, provided that, in no event shall Abandonment occur if:

 

(A)           any of the foregoing occurs due solely to a Force Majeure Event; 

 

(B)            the Borrower is continuing to receive payment in full of the Electricity Charge for the relevant Generating Units under and in accordance with the ESC; or

 

(C)            the construction or operation of any one or more wells or well pads comprising any part of the Field Facilities is discontinued in circumstances where the construction or operation of such well(s) or well pad(s) is uneconomic or deemed by the Borrower to be unnecessary and the Borrower is otherwise continuing to implement the Project and perform its obligations under the Senior Finance Documents.

“Acceptable Equity Contribution LC”

has the meaning given to it in each Equity Support Deed.

   

“Account Banks”

means the Offshore Account Bank and the Onshore Account Bank.

 

 

 
 

 

 

“Accounts Agreement”

means the accounts agreement entered into or to be entered into by the Borrower, the Account Banks, the Intercreditor Agent, the Offshore Security Agent and the Onshore Security Agent in relation to the establishment, maintenance and operation of the Project Accounts.

   

“ADB”

means the Asian Development Bank in each of the capacities described in paragraphs (6) through (8) of the Preamble to this Agreement.

   

“ADB Board of Directors” or “ADB Board”

means the board of directors of ADB from time to time.

   

“ADB Commitment”

has the meaning given to it in the ADB Facility Agreement.

   

“ADB Event of Default”

has the meaning given to it in the ADB Facility Agreement.

   

“ADB Facility”

means the U.S. dollar denominated term loan facility made available to the Borrower under the ADB Facility Agreement and this Agreement, and which comprises ADB Tranche A, ADB Tranche B and ADB Tranche C.

   

“ADB Facility Agreement”

means the facility agreement dated on or about the Signing Date and entered into by the Borrower and ADB with respect to the ADB Facility.

   

“ADB Tranche A”

has the meaning given to it in the ADB Facility Agreement.

   

“ADB Tranche B”

has the meaning given to it in the ADB Facility Agreement.

   

“ADB Tranche C”

has the meaning given to it in the ADB Facility Agreement.

   

“Additional Drilling Contract”

means each contract (other than the Initial Drilling Contract) for the performance of drilling or related works (or both) with respect to the Project entered into by the Operator and another person as the drilling contractor.

   

“Additional Drilling Contractor”

means a drilling contractor (other than the Initial Drilling Contractor) counterparty to an Additional Drilling Contract.

   

“Additional Project Document”

means any contract or agreement (other than a Senior Finance Document) entered into by one or more Borrower Entities and any other person, or assigned or novated or otherwise transferred to any one or more Borrower Entities, which is not already a Project Document and which the Borrower Entity(ies) party to that contract or agreement were not restricted by the Senior Finance Documents from entering into.

   

“Advance”

means a cash loan made or to be made (as the context requires) under a Senior Facility pursuant to the relevant Senior Facility Agreement and this Agreement.

   

“Affiliate”

means, with respect to a person, a Subsidiary or a Holding Company of that person or any other Subsidiary of that Holding Company.

   

“Agents”

means the Intercreditor Agent, the Facility Agents and the Security Agents.

   

 

 

 
 

 

 

“AMDAL”

means the Environmental Impact Analysis (Analisa Mengenai Dampak Lingkungan) dated August 2009 comprised of:

 

(a)             environmental impact assessment report (Analisa Dampak Lingkungan or ANDAL);

 

(b)             environmental management plan (Rencana Pengelolaan Lingkungan or RKL);

 

(c)             environmental monitoring plan (Rencana Pemantauan Lingkungan or RPL); and

 

(d)             the addendum dated 26 July 2013, as amended or supplemented from time to time.

 

“Annual Period”

has the meaning given to it in Clause 18.5(a) (Operating Plan and Budget).

 

“Annual Unit Rated Capacity Test”

has the meaning given to it in the ESC.

 

“Applicable Accounting Standards”

means:

 

(a)             in respect of the Borrower’s Consolidated Financial Statements, generally accepted accounting principles, standards and practices as applied in Indonesia;

 

(b)             in respect of Medco’s financial statements, generally accepted accounting principles, standards and practices as applied in Indonesia;

 

(c)             in respect of Kyushu’s financial statements, generally accepted accounting principles, standards and practices as applied in Japan;

 

(d)             in respect of Itochu’s financial statements, IFRS;

 

(e)             in respect of Ormat’s financial statements, generally accepted accounting principles, standards and practices as applied in the United States of America.

 

“Applicable Law”

means any law, constitutional law, statute, regulation, resolution, rule, treaty (having the force of law), ordinance, order, decree or directive and any official interpretation of any of the foregoing (whether or not having the force of law but, if not having the force of law, being such that compliance therewith would customarily be required) by any relevant Governmental Authority, now or at any time in effect, and which is applicable to the relevant matter.

 

“Authorised Representative”

means:

 

(a)           in relation to the Operator:

 

(i)            any director of the Operator; or

 

(ii)           any other person properly authorised by the Operator to act as its authorised representative for the purposes contemplated in the Senior Finance Documents, and the name, position and contact details of whom are notified to the Intercreditor Agent in writing by the Operator; and

 

(b)           in relation to any other person, any director of that person.

 

 

 
 

 

 

“Availability Period”

means, with respect to each Senior Facility, the period commencing on the Signing Date and ending on the earliest to occur of:

 

(a)           the date on which such Senior Facility is fully drawn, cancelled or terminated under the provisions of this Agreement; and

 

(b)           the date which is one month prior to the First Repayment Date.

 

“Available Funding”

means, on any date, the aggregate (without double counting) of:

 

(a)           the undrawn and uncancelled Total Commitment as at that date; provided that the Top-Up Commitment shall be included only (i) for the purpose of calculating the “Forecast Funding Shortfall” pursuant to Clause 21.16(f) (Project Events) or (ii) if and to the extent it is available pursuant to Clause 3.4 (Top-Up Advances);

 

(b)           the aggregate undrawn and available Total Base Equity Commitment as at that date; 

 

(c)           the amounts standing to the credit of the Construction and Supply Accounts as at that date;

 

(d)           the amount (if any) standing to the credit of the Pre-Completion Revenue Account as at that date up to the Pre-Completion Revenue Cap; provided that all amounts standing to the credit of the Pre-Completion Revenue Account shall be included only for the purpose of calculating the “Forecast Funding Shortfall” pursuant to Clause 21.16(f) (Project Events);

 

(e)           an amount of Pre-Completion Revenue which the Borrower reasonably projects will be earned and deposited to the Pre-Completion Revenue Account after such date, provided that:

 

(i)            if the Senior Lenders’ Technical Advisor and the Senior Lenders’ Reserves Consultant have certified to the Intercreditor Agent that, based upon the most recent Construction and Drilling Progress Report, all or part of such amount is not reasonably likely to be earned by the Borrower, then the amount of Pre-Completion Revenue to be included for the purpose of this paragraph (e) shall be the amount specified in such certificate of Pre-Completion Revenue as being the amount which the Senior Lenders’ Technical Advisor and the Senior Lenders’ Reserves Consultant consider that the Borrower is reasonably likely to earn;

 

(ii)           such amount shall not exceed an amount equal to the sum of (A) the Pre-Completion Revenue Cap minus (B) the amount then standing to the credit of the Pre-Completion Revenue Account (and if such sum is a negative number, then such amount shall be zero);

 

(iii)         such amount shall be excluded from the calculation of “Available Funding” for the purpose of Clauses 5.1(b)(i) (Cancellation) and 5.2(b)(i) (Voluntary Prepayment); and

 

(iv)          such amount shall be excluded for the purpose of calculating the “Forecast Funding Shortfall” pursuant to Clauses 18.11(c)(i)(B)(2), 18.11(e)(i) and 18.11(e)(xi)(D)(1) (Consent to Specified Actions under the Major Project Documents); and

 

(f)            for the purpose of calculating the “Forecast Funding Shortfall” pursuant to Clause 21.16(f) (Project Events) only, the aggregate undrawn and available Total Contingent Equity Commitment.

 

 

 
 

 

 

 

“Bank Indonesia”

means the central bank of Indonesia.

 

“Basel III”

means: 

 

(a)          the agreements on capital requirements, a leverage ratio and liquidity standards contained in Basel III: A global regulatory framework for more resilient banks and banking systems, Basel III: International framework for liquidity risk measurement, standards and monitoring and Guidance for national authorities operating the countercyclical capital buffer published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

 

(b)          the rules for global systemically important banks contained in Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

 

(c)           any further guidance or standards published by the Basel Committee on Banking Supervision relating to Basel III.

 

“Borrower”

means each Borrower Entity.

 

“Borrower’s Consolidated Financial Statements”

means financial statements prepared for the unincorporated joint venture constituted by the Borrower Entities.

 

 

 
 

 

 

 

“Borrower Entities”

means:

(a)           the Itochu Borrower Entity;

 

(b)           the Kyushu Borrower Entity;

 

(c)           the Medco Borrower Entity;

 

(d)           the Ormat Borrower Entity; and

 

(e)           the Operator, and a “Borrower Entity” means any of them.

 

“Breakage Costs”

means, subject to the terms of the Senior Facility Agreements, in respect of a Floating Rate Senior Loan, the amount (if any), reasonably determined by the relevant Senior Lender, by which:

 

(a)          the interest (other than interest representing the Margin) which that Senior Lender would have received for the period after the date of receipt of all or any part of its Participation in a Floating Rate Senior Loan to the last day of the applicable Interest Period in respect of that Floating Rate Senior Loan, had the principal amount received been paid on the last day of that Interest Period, exceeds:

 

(b)          the amount which that Senior Lender would be able to obtain by placing an amount equal to the principal amount received by it on deposit with a leading bank in the relevant interbank market, for a period starting on the Business Day on which such amounts are received and ending on the last day of the applicable Interest Period.

 

“Business Day”

means:

 

(a)           with respect to any disbursement of a Senior Loan or payment under the Senior Finance Documents, a day (other than a Saturday or Sunday) on which banks are generally open for business in Jakarta, Tokyo, Singapore, London and New York City; and

 

(b)           with respect to any other obligation or requirement under the terms of the Senior Finance Documents, a day (other than a Saturday or Sunday) on which:

 

(i)           banks are generally open for business in Jakarta, Tokyo and Singapore; and

 

(ii)          ADB is open for business in Manila.

 

“Business Interruption Insurance Proceeds”

means Insurance Proceeds for or in respect of loss of revenue or business interruption.

 

 

 
 

 

 

“Calculation Date”

means:

 

(a)           for the purpose of determining the DSRA-1 Reserve Requirement, the DSRA-2 Reserve Requirement, the EPRG Premium Reserve Requirement, the Plant Maintenance Reserve Requirement and the Well Maintenance and Drilling Reserve Requirement for the Lenders’ Completion Date, the Lenders’ Completion Date; and

 

(b)           for all other purposes:

 

(i)         the first Interest Payment Date which falls at least six (6) calendar months after the Unit COD of the Third Generating Unit; and

 

(ii)        each Interest Payment Date falling after the date specified in paragraph (a) above or sub-paragraph (i) above.

 

“Calculation Period”

means a period of six (6) calendar months.

 

“Capital Asset”

means a tangible asset required for the Project (whether or not it is owned by the Borrower) and which is not bought or sold in the ordinary course of business.

 

“Capital Costs”

means any expenditure in respect of a Capital Asset which does not constitute Operating Costs, including:

 

(a)           all sums payable under the Power Plant Contracts;

 

(b)           all sums payable under the Initial Drilling Contract (including for the avoidance of doubt all Pre-Completion Make-Up Well Capital Costs); and

 

(c)           all start up, commissioning and testing costs.

 

Capacity Verification Test

has the meaning given to it in the ESC.

 

“Change in Law”

means the occurrence, after the Signing Date (or in respect of any Senior Finance Party, if later, the date on which such Senior Finance Party becomes a Senior Finance Party) of any of the following:

 

(a)           the adoption or taking effect of any law, rule, regulation or treaty; or

 

(b)           any change in law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority.

 

“Closing Date”

means the first date on which the Intercreditor Agent notifies the Borrower and the Senior Lenders of the satisfaction or waiver of each Condition Precedent to the First Advance.

 

 

 
 

 

 

 

“Code”

means the US Internal Revenue Code of 1986.

 

“Coercive Practice”

means impairing or harming or threatening to impair or harm, directly or indirectly, any person or the property of the person, to influence improperly the actions of that person.

 

“Collusive Practice”

means an arrangement between two or more persons designed to achieve an improper purpose, including influencing improperly the actions of another person.

“Commitment”

means, at any time and in relation to:

 

(a)           ADB, the ADB Commitment;

 

(b)           JBIC, the JBIC Commitment; or

 

(c)           the Covered Lenders, the Covered Lenders Commitment, and in relation to a particular Covered Lender, that Covered Lender’s “Commitment” (as that term is defined in the Covered Lenders Facility Agreement), in each case, at that time.

 

“Compensation and Other Proceeds”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Condition Precedent to the First Advance”

means a documentary condition precedent referred to in Clause 3.1 (Conditions Precedent to Delivery of First Drawdown Notices).

 

 

“Conditional Novation of Project Documents”

means the Indonesian law governed conditional assignment and novation agreement to be entered into on or prior to the Closing Date between the Senior Secured Parties (as represented by the Onshore Security Agent) and each Borrower Entity in respect of the Indonesian Law Governed Project Documents.

 

“Conditions Subsequent Cut-Off Date”

means the date which is the earlier of:

 

(a)           six (6) months after the First Drawdown Date; and

 

(b)           the first date on which the aggregate amount of Senior Loans outstanding is equal to or exceeds the undrawn Total Base Equity Commitment.

 

“Constitutional Documents”

means, in respect of any person, that person’s memorandum of incorporation or articles of association or constitution or other constitutional documents.

 

“Construction and Drilling Contracts”

means:

 

(a)           the Power Plant Contracts; and

 

(b)           the Drilling Contracts.

 

 

 
 

 

 

 

“Construction and Drilling Progress Report”

means a report substantially in the form of Schedule 8 (Form Of Construction And Drilling Progress Report).

 

 

“Construction and Supply Accounts”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Construction Bonds”

means any letters of credit, bank guarantee, bonds, performance security and other forms of security issued or to be issued from time to time in favour of any Borrower Entity in accordance with the terms of the Construction and Drilling Contracts.

 

“Construction Milestones”

means the procurement, construction, commissioning and testing milestones set out in Part A of Schedule 12 (Project Milestones).

 

“Contractors”

means:

 

(a)           the Power Plant Contractors;

 

(b)           the Initial Drilling Contractor; and

 

(c)           each Additional Drilling Contractor.

 

Contractual Currency

has the meaning given to it in Clause 25.1 (Currency Indemnity).

 

“Coordination Agreement”

means the coordination agreement entered or to be entered into by the Operator, the Indonesian Contractor and the Power Plant Supply Contractor with respect to the Power Plant Supply Contract and the Power Plant Construction Contract.

 

“Corrective Action Plan”

means a corrective action plan required in accordance with the Safeguards and Social Provisions, which is required to be approved by the Intercreditor Agent, and which must include the following:

 

(a)           a description of:

 

(i)each relevant Safeguards and Social Non-Compliance; or

 

(ii)each non-compliance issue identified in any relevant environment and/or social compliance audit, including (in either case) their extent, magnitude and impact;

 

(b)           a description of the cause of each Safeguards and Social Non-Compliance and, if applicable, non-compliance issues referred to in paragraph (a) above and the period for which each continued;

 

(c)           the proposed actions to correct any damage or adverse consequences caused by the relevant Safeguards and Social Non-Compliance and, if applicable, non-compliance issues referred to above;

 

(d)           the identity of the person who will be implementing such proposed actions;

 

(e)           a time schedule for implementing such proposed actions, including the start date, the proposed end date and key milestones;

 

(f)            the estimated cost of such proposed actions; and

 

(g)           the proposed actions (including any proposed updates to the Safeguards and Social Documents) to prevent any similar Safeguards and Social Non-Compliance from occurring in the future.

 

 

 
 

 

 

 

“Corrupt Practice”

means the offering, giving, receiving, or soliciting, directly or indirectly, anything of value to influence improperly the actions of another person, including any offer, gift, payment, promise to pay, interest, fee, loan or other consideration which would constitute bribery or an improper payment under or a breach of, any applicable anti-bribery laws, anti-corruption practices laws, or such other similar laws or regulations with which that person is obliged to comply.

 

“Covered Lender”

means: 

 

(a)           any entity listed in Part C of Schedule 1 (The Senior Lenders); and

 

(b)          any New Senior Lender which becomes a Party by assuming the rights and/or obligations of a Covered Lender with respect to the Senior Finance Documents, which in each case has not ceased to be a Party in accordance with the provisions of this Agreement.

 

“Covered Lenders Commitment”

has the meaning given to it in the Covered Lenders Facility Agreement.

 

“Covered Lenders Facility”

means the U.S. dollar denominated term loan facility made available to the Borrower under the Covered Lenders Facility Agreement and this Agreement.

 

“Covered Lenders Facility Agreement”

means the facility agreement dated on or about the Signing Date and entered into by the Borrower, the Covered Lenders Facility Agent and the Covered Lenders with respect to the Covered Lenders Facility.

 

“Date of Commercial Generation”

for a Unit (as defined in the ESC), has the meaning given to it in the ESC.

 

“Debt to Equity Ratio”

means, at any time, the ratio of:

 

(a)           all Senior Loans outstanding under the Senior Facilities at that time;

 

to:

 

(b)          the aggregate amount of Equity that has been contributed or advanced to the Borrower at that time and which has been or will be applied in or towards the payment of Project Costs.

 

 

 
 

 

 

 

“Debt Service Coverage Ratio”

means:

 

(a)          the Historic Debt Service Coverage Ratio; or

 

(b)          the Projected Debt Service Coverage Ratio, as the case may be.

 

“Debt Service Coverage Ratio Calculation Statement”

means a draft calculation statement in a form approved by the Intercreditor Agent in writing.

 

 

“Deed of Accession – Hedging Counterparties”

means a duly completed certificate, substantially in the form of Schedule 5 (Form Of Deed Of Accession – Hedging Counterparties).

 

 

“Deed of Novation – Senior Lenders”

means a duly completed certificate, substantially in the form of Schedule 4 (Form Of Deed Of Novation – Senior Lenders).

 

“Default”

means an Event of Default or a Potential Event of Default.

 

“Default Rate”

has the meaning given to it in Clause 7.3 (Default Interest).

 

“Delay in Start-Up Insurance Proceeds”

means Insurance Proceeds for or in respect of any delay in start-up.

 

“Delay Liquidated Damages”

means any delay liquidated damages or similar delay damages paid by a Contractor to the Borrower under a Construction and Drilling Contract or paid by any other person under any other Project Document.

 

“Designated Interest Period”

has the meaning given to it in Clause 7.3 (Default Interest).

 

“Direct Agreements”

means each of:

 

(a)          the GoI Consent Letter;

 

(b)          the Initial Drilling Contract Direct Agreement;

 

(c)          the NAES Direct Agreement;

 

(d)          the PGE Consent Letter;

 

(e)           the PLN Consent Letter;

 

(f)            the Power Plant Contracts Direct Agreement;

 

(g)           the Trust Account Consent Letter;

 

(h)           the WestJEC Direct Agreement; and

 

(i)            if required by the Intercreditor Agent, each direct agreement with respect to each Additional Drilling Contract (if any), to be entered into by the Additional Drilling Contractor, the Operator and the Offshore Security Agent; 

 

(j)            each direct agreement with respect to a Technical Support Agreement, to be entered into by a Technical Support Agreement Provider, the Operator and the Offshore Security Agent; and

 

(k)           each other document designated as a direct agreement by the Borrower and the Intercreditor Agent.

 

 

 
 

 

 

 

“Discharged Obligations”

has the meaning given to it in Clause 28.3 (Procedure for Transfer – Senior Lenders).

 

“Discharged Rights”

has the meaning given to it in Clause 28.3 (Procedure for Transfer – Senior Lenders).

 

“Disposal”

means a sale, transfer, novation, assignment, lease, licence, declaration of trust or other disposal, whether voluntary or involuntary, and “Dispose” shall be construed accordingly.

 

“Dispute”

has the meaning given to it in Clause 36.1(a) (Disputes).

 

“Disputed Amounts Trust Account”

means the USD denominated account designated as the “Disputed Amounts Trust Account’ held by the Trust Account Trustee on trust for the Borrower and PGE at the Trust Account Bank in accordance with the Trust Account Agreement, as notified by the Intercreditor Agent and the Offshore Security Agent from time to time in accordance with the Trust Account Direct Agreement.

 

“Distributions Accounts”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Distributions Holding Account”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Drawdown Date”

means the date on which an Advance is made under any of the Senior Facility Agreements.

 

“Drawdown Notice”

has the meaning given to it in each Senior Facility Agreement.

 

“Drilling Contract”

means:

 

(a)          the Initial Drilling Contract; and

 

(b)          each Additional Drilling Contract.

 

“Drilling Milestones”

means the drilling milestones specified in Part B of Schedule 12 (Project Milestones).

 

“Drilling Program”

means a detailed drilling program for the Project which describes the drilling operations to be completed, the number of wells (injection and make-up) and the schedule for drilling operations, in each case to be conducted pursuant to the Drilling Contracts until the Lenders’ Completion Date, prepared by the Borrower and delivered to the Intercreditor Agent as a Condition Precedent to the First Advance and as updated in accordance with Clause 18.6 (Drilling Program).

 

 

 
 

 

 

 

“DSRA-1”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“DSRA-1 Reserve Requirement”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“DSRA-2”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“DSRA-2 Reserve Requirement”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Economic Assumptions”

means the assumptions as to economic or financial matters set out in the Financial Model approved as a Condition Precedent to First Advance as may be amended in accordance with Clause 18.1 (Financial Model).

 

“Electricity Charge”

has the meaning given to it in the ESC.

 

“Electricity Generation Facilities”

means those facilities (including the Generating Units) required for the conversion of Geothermal Energy into Electricity and for the delivery of such Electricity to the Points of Interconnection (as defined in the ESC), but excluding the Field Facilities.

 

“Eligible Bank”

means a bank or financial institution which:

 

(a)          has a Required Credit Rating;

 

(b)          has at least USD500 million or its equivalent of capital; and

 

(c)          is located in an OECD country, Singapore or Hong Kong.

 

“Eligible Reserve Account LC”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Emergency Operating Costs”

means all unavoidable costs incurred, or to be incurred, in preventing, rectifying or mitigating the effects of any unforeseen event or circumstance which has caused or is reasonably likely to cause:

 

(a)          imminent material damage to the Plant or other related property;

 

(b)          the release of Hazardous Substances (other than in compliance with Environmental and Social Law); or

 

(c)          immediate adverse effects to the health or safety of any person.

 

“Enforcement Proceeds”

means all cash, securities and other property received or recovered by any Senior Secured Party, whether in respect of the enforcement of Transaction Security or otherwise, at any time after any Remedies have been exercised in accordance with the Intercreditor Deed.

 

 

 
 

 

 

 

“Environmental and Social Action Plan”

(a)           the environmental and social action plan approved by the Intercreditor Agent as a Condition Precedent to the First Advance; and

 

(b)          where the Borrower is required to prepare a further environmental assessment under the Safeguards Requirements, then it means such updated and/or new environmental assessment approved by the Intercreditor Agent.

 

“Environmental and Social Law”

means any Applicable Law relating to:

 

(a)           any release, emission, entry or introduction into the air including the air within buildings and other natural or man-made structures above ground;

 

(b)           any discharge, release or entry into water including into any river, watercourse, lake, pond (whether natural or artificial or above ground or which joins or flows into any such water outlet above ground), reservoir, or the surface of the riverbed or of other land supporting such waters, ground waters, sewer or the sea;

 

(c)           any deposit, disposal, keeping, treatment, importation, exportation, production, transportation, handling, processing, carrying, manufacture, collection, sorting or presence of any Hazardous Substance (including in the case of waste, any substance which constitutes a scrap material or an effluent or other unwanted surplus substance arising from the application of any process or activity (including making it re-usable or reclaiming substances from it) and any substance or article which is required to be disposed of as being broken, worn out, contaminated or otherwise spoiled);

 

(d)          any nuisance, noise, defective premises, health and safety at work, industrial illness, industrial injury due to environmental factors, environmental health problems (including asbestosis or any other illness or injury caused by exposure to asbestos) or genetically modified organisms;

 

(e)           any conservation, preservation or protection of the natural or man-made environment or any living organisms supported by the natural or man-made environment;

 

(f)           human rights, labour issues (including employee relations and occupational health and safety), human health or safety, indigenous peoples, social and involuntary resettlement or economic displacement matters; and

 

(g)           the harming of or the protection of cultural heritage or archaeological artefacts.

 

 

 
 

 

 

 

Environmental and Social Impact Assessment” or “ESIA

means:

 

(a)          Volume I: Environmental Compliance Audit Report and Corrective Action Plan as disclosed on the ADB website where identified as “DRAFT REPORT’ and dated August 2013;

 

(b)          Volume II: Environmental and Social Impact Assessment (ESIA) Addendum as disclosed on the ADB website where identified as “FINAL REPORT’ and dated October 2013;

 

(c)          Volume III: Indigenous Peoples Plan (IPP) as disclosed on the ADB website where identified as “DRAFT FINAL REPORT and dated October 2013;

 

(d)          Volume IV: Social Safeguards Compliance Audit Report and Corrective Action Plan as disclosed on the ADB website where identified as “DRAFT FINAL REPORT and dated October 2013;

 

(e)          Volume V: Resettlement Plan as disclosed on the ADB website where identified as “FINAL REPORT’ and dated October 2013;

 

(f)           the Supplementary Lenders Information Package; and

 

(g)          where the Borrower is required to prepare a further environmental assessment under the Safeguards Requirements, then it means such updated and/or new environmental assessment approved by the Intercreditor Agent.

 

Environmental and Social Management Plan” or “ESMP

means the environmental and social management plan for the Project dated October 2013 (and included in the ESIA), updated in compliance with the Environmental and Social Action Plan and where the Borrower is required to prepare an updated or a new environmental management plan, under the Safeguards Requirements, then it means such updated and/or new environmental management plan approved by the Intercreditor Agent for incorporation into the Safeguards and Social Documents.

 

“Environmental and Social Management System” or “ESMS”

means an environmental, social, health and safety management system (which term may refer to the system for the construction phase of the Project or the system for the operational phase of the Project, or to both systems collectively, as the context may require) as described in system manuals and related source documents, including policies, management programs and plans, procedures, requirements, performance indicators, responsibilities, training and periodic audits and inspections with respect to those environmental and social aspects identified in the ESIA (which are considered relevant to the Project components) designed to identify, assess and manage risk in respect to the Project on an ongoing basis.

 

 

 
 

 

 

 

“EPRG”

means the extended political risk guarantee dated the Signing Date between JBIC, the Covered Lenders and the Covered Lenders Facility Agent.

 

“EPRG Payment”

has the meaning given to it in Clause 28.13 (Subrogation and Assignment).

 

“EPRG Premium”

means the amount payable from time to time by the Covered Lenders (which amount may be funded by the Borrower on behalf of the Covered Lenders in accordance with the terms of the Senior Finance Documents) to JBIC in accordance with Clause 5 (Political Risk Guarantee Fee)of the EPRG.

 

“EPRG Premium Reserve Account”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“EPRG Premium Reserve Requirement”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Equator Principles”

means the principles entitled “Equator Principles” and set out in the paper entitled “A financial industry benchmark for determining, assessing and managing social and environmental risk in project financing” dated July 2006 and developed in co-operation with the International Finance Corporation and adopted by various other banks and financial institutions, being the version in effect on the Signing Date and excluding any amendments, renewals, replacements, extensions, modifications or supplements after the Signing Date.

 

“Equity”

means, on any date, the aggregate of:

 

(a)           the amount subscribed for and paid in as capital in each Borrower Entity by the Equity Parties and not repaid or otherwise reimbursed to the Equity Parties on or before that date to the extent permitted under the Senior Finance Documents; and

 

(b)           the amount of all Subordinated Shareholder Loans outstanding at that date (excluding capitalised interest).

 

“Equity Contribution”

has the meaning given to it in Clause 1.1 (Definitions) of the Equity Support Deeds.

 

“Equity Documents”

means:

 

(a)           the JOA;

 

(b)          the Shareholders Agreement;

 

(c)          each Subordinated Shareholder Loan Agreement; and

 

(d)          each other document which the Borrower and the Intercreditor Agent agree is an Equity Document.

 

“Equity Party”

means:

 

(a)          the Ormat HoldCo;

 

(b)          each Shareholder;

 

(c)          each Sponsor; and

 

(d)          each other person which the Borrower and the Intercreditor Agent agree shall be an Equity Party.

 

 

 
 

 

 

 

“Equity Support Deed”

means each of the equity support deeds dated on or about the Signing Date entered into by, amongst others, the relevant Equity Parties, the Offshore Security Agent and the Intercreditor Agent.

 

“ESC” or “Energy Sales Contract”

means the Original ESC, as assigned to the Borrower pursuant to the New DOA, and as amended by the First ESC Amendment, the Second ESC Amendment and PLN Consent Letter. 

 

“ESC Buyout Payments”

means all amounts paid by:

 

(a)          PLN under and in accordance with the ESC (including Sections 11.2, 11.6, 11.7, 11.8, 11.9 and 11.10, and Annex 5 of the ESC) with respect to the termination of the ESC; or

 

(b)          the GoI in accordance with paragraph 6 of the Government Guarantee.

 

“Event of Default”

means any event or circumstance specified as such in Clause 21 (Events of Default).

 

“Existing Arbitration”

has the meaning given to it in Clause 36.6(a) (Disputes).

 

“Existing Parties”

has the meaning given to it in Clause 28.3 (Procedure for Transfer – Senior Lenders).

 

“Expropriation Proceeds”

means any amount paid by or on behalf of a Governmental Authority with respect to or following any action referred to in Clause 21.22 (Expropriation).

 

“Facility Agent”

means the JBIC Facility Agent or the Covered Lenders Facility Agent and “Facility Agents” means both of them.

 

“FATCA”

means:

 

(a)           sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

 

(b)          any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or

 

(c)           any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

 

 

 
 

 

 

 

“FATCA Application Date”

means:

 

(a)           in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

 

(b)           in relation to a “withholdable payment” described in section 1473(1)(A)(ii) of the Code (which relates to “gross proceeds” from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

 

(c)           in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

 

“FATCA Deduction”

means a deduction or withholding from a payment under a Senior Finance Document required by FATCA.

 

“FATCA Exempt Party”

means a Party that is entitled to receive payments free from any FATCA Deduction.

 

“FATCA FFI”

means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if any Senior Finance Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction or a deduction or withholding from a payment pursuant to the Trust Account Agreement required by FATCA.

 

“FATCA Payment”

means either:

 

(a)           the increase in a payment made by the Borrower or an Equity Party under Clause 9.3 (FATCA Deduction and gross-up by the Borrower and Equity Parties) or by the Borrower under paragraph (b) of Clause 9.4 (FATCA Deduction by the Senior Finance Parties); or

 

(b)           a payment under paragraph (c) of Clause 9.4 (FATCA Deduction by the Senior Finance Parties).

 

“Fee Letters”

means each letter issued by an Agent and accepted by the Borrower setting out, amongst other matters, the fees payable by the Borrower to that Agent in respect of the performance of its obligations as an Agent under the Senior Finance Documents.

 

“Fiduciary Assignment of Insurance Claim Proceeds”

means the Indonesian law governed fiduciary assignment to be entered into on or prior to the Closing Date between the Senior Secured Parties (as represented by the Onshore Security Agent) and the Borrower Entities in respect of all present and future Insurance Proceeds to which any Borrower Entity may be entitled.

 

 

 

 
 

 

 

 

“Fiduciary Assignment of Intellectual Property Rights”

means the Indonesian law governed fiduciary assignment to be entered into on or prior to Closing Date between the Senior Secured Parties (as represented by the Onshore Security Agent) and the Operator in respect of all intellectual property rights, including licences, copyrights, design registrations and know-how necessary for the implementation of the Project and which is owned by the Operator.

 

“Fiduciary Assignment of Receivables”

means the Indonesian law governed fiduciary assignment to be entered into on or prior to the Closing Date between the Senior Secured Parties (as represented by the Onshore Security Agent) and the Borrower Entities in respect of all present and future receivables of the Borrower Entities.

 

“Fiduciary Assignment of Receivables (Medco)”

means the Indonesian law governed fiduciary assignment to be entered into on or prior to the Closing Date between the Senior Secured Parties (as represented by the Onshore Security Agent) and Medco in respect of all present and future proceeds to which Medco may be entitled pursuant to a Subordinated Shareholder Loan Agreement between Medco and the Medco Borrower Entity dated on our about the Closing Date.

 

“Fiduciary Assignment of Reinsurance Claim Proceeds”

means each Indonesian law governed fiduciary assignment to be entered into on or prior to the Closing Date between the Senior Secured Parties (as represented by the Onshore Security Agent) and the relevant Indonesian insurer in respect of all present and future reinsurance proceeds receivables of the relevant Indonesian insurer in connection with the reinsurance policies comprising Project Insurances.

 

“Fiduciary Transfer of Tangible Assets”

means the Indonesian law governed fiduciary transfer agreement entered or to be entered into by the Borrower Entities and the Senior Secured Parties (represented by the Onshore Security Agent) with respect to all of the present and future tangible assets of the Borrower Entities located or deemed to be located in Indonesia.

 

“Fields”

means:

 

(a)           the Namora-I-Langit Field; and

 

(b)           the Silangkitang Field.

 

“Field Facilities”

means those facilities required to produce, process, transport and deliver Geothermal Energy from the Fields to the Generating Units, including pumps, wells, wellsites, pipeline systems, separators, roads, buildings and camps, water disposal and waste process facilities, and including those facilities which are or will be owned by PGE.

 

“Final Maturity Date”

means with respect to a Senior Facility, the date which is twenty (20) years after the Signing Date, provided that if, as a result of the application of any prepayments made by the Borrower pursuant to the Senior Finance Documents, the last date for the making of a Repayment Instalment under the Senior Facility Agreements is a Repayment Date falling prior to what would otherwise be the Final Maturity Date pursuant to this definition, such date shall be that Repayment Date.

 

 

 
 

 

 

 

“Financial Indebtedness”

means, with respect to any person:

 

(a)           indebtedness created, issued or incurred by such person for borrowed money (whether by loan or the issuance and sale of debt securities or the sale of any property of such person to another person subject to an understanding or agreement, contingent or otherwise, to repurchase such property of such person from that other person);

 

(b)           any receivables sold or discounted by such person (other than on a non-recourse basis);

 

(c)          obligations of such person to pay the deferred purchase or acquisition price of any property of such person or services (excluding accounts payable and accrued expenses incurred in the ordinary course of business and having a term not in excess of ninety (90) days);

 

(d)          obligations (contingent or otherwise) of such person in respect of letters of credit, bankers acceptances or similar instruments issued or accepted by banks and other financial institutions for the account of such person;

 

(e)           counter-indemnity obligations of such person in respect of a guarantee, indemnity, surety bond or similar instruments issued by a financial institution;

 

(f)           obligations of such person in respect of any lease, leasing or hire purchase contract which would, in accordance with the Applicable Accounting Standards, be treated as a finance or capital lease;

 

(g)          obligations of such person in respect of any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

 

(h)           indebtedness of others described in paragraphs (a) to (g) (inclusive) above secured by (or for which the holder thereof has an existing right, contingent or otherwise, to be secured by) a Security Interest on the property of such person, whether or not the indebtedness so secured has been assumed by such person;

 

(i)            any amount raised under any other transaction which has the commercial effect of a borrowing or is otherwise classified as a borrowing under the Applicable Accounting Standards; and

 

(j)            indebtedness of others described in paragraphs (a) to (i) (inclusive) above which is guaranteed by such person.

 

 

 
 

 

 

“Financial Model”

means the financial model delivered to the Intercreditor Agent pursuant to paragraph 12(a) of Part A of Schedule 2 (Documentary Conditions Precedent) as updated pursuant to Clause 18.1 (Financial Model).

 

“Financial Year”

means the period from and including 1 January to and including 31 December.

 

“Financing Costs”

means (without double counting):

 

(a)          all interest, fees (including any breakage, prepayment or cancellation fees), premiums, advisors’ fees, legal fees, commissions and costs payable by the Borrower under the Senior Finance Documents;

 

(b)          all amounts payable by the Borrower under Clause 9 (Taxes), by virtue of market disruption provisions under Clause 10 (Market Disruption), by virtue of an obligation with respect to Increased Costs under Clause 11 (Increased Costs), and by virtue of an obligation with respect to an indemnity under Clause 25 (Indemnities);

 

(c)          all Hedging Costs;

 

(d)          the EPRG Premium; and

 

(e)          all Taxes payable by the Borrower in respect of any of the foregoing.

 

“Financing of Terrorism”

means the act of providing or collecting funds with the intention that they be used, or in the knowledge that they are to be used, in order to carry out terrorist acts.

 

First Actual Drawdown Date

means the date on which the first Advance is made under the Senior Facilities or, if that is not the same date for all Advances requested in the First Drawdown Notices, the latest of such dates.

 

“First Advance”

means the first Advance made to the Borrower pursuant to the Senior Finance Documents.

 

“First Drawdown Date”

means the date of the First Advance.

 

“First Drawdown Notices”

means the Drawdown Notices to be submitted by the Borrower pursuant to the Senior Finance Documents requesting the Advances referred to in Clause 2.3(d) (Drawdowns).

 

First Drawdown Sunset Date

means the date which is thirty (30) days after the date (as specified in the relevant Drawdown Notice) on which the First Advance is to be made under the Senior Facilities. 

 

“First ESC Amendment”

means the Amendment Agreement dated 14 December 2007 to the Original ESC entered into by PGE, PLN and the Borrower.

 

 

 
 

 

 

 

“First Generating Unit”

means the first and second units to be constructed and commissioned in accordance with the ESC, with a combined Guaranteed Net Dependable Capacity of 105.4 MW and located at the Silangkitang Field.

 

“First Repayment Date”

means 24 September 2018.

 

“First Tribunal”

has the meaning given to it in Clause 36.6(a) (Consolidation).

 

“Floating Rate Senior Loan”

means a Senior Loan advanced or to be advanced under a Senior-1 Facility.

 

“Floating Rate Senior Facility”

means a Senior Facility under which one or more Floating Rate Senior Loans have been or will be advanced pursuant to the relevant Senior Facility Agreement.

 

“Force Majeure Event”

means an event of force majeure (or other similar term) as defined in any Major Project Document which would excuse the performance by a party to that Major Project Document of any of its material obligations under such Major Project Document.

 

“Forecast Funding Shortfall”

means, at any time, that:

 

(a)           the Available Funding; is less than:

 

(b)           the Projected Project Costs, in each case, at that time.

 

“Fraudulent Practice”

means any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a person to obtain a financial or other benefit or to avoid an obligation.

 

“General Trust Account”

means the USD denominated account designated as the “Payments Account’ held by the Trust Account Trustee on trust for the Borrower and PGE at the Trust Account Bank in accordance with the Trust Account Agreement, as notified to the Intercreditor Agent and the Offshore Security Agent from time to time in accordance with the Trust Account Direct Agreement.

 

“Generating Units”

means:

 

(a)           the First Generating Unit;

 

(b)           the Second Generating Unit; and

 

(c)           the Third Generating Unit.

 

“Geothermal Energy”

means natural geothermal water or steam, the natural heat of the earth, and the energy present in, resulting from or created by or which may be extracted from, the natural heat present below the surface of the earth in whatever form such heat or energy occurs.

 

 

 
 

 

 

 

“GoI”

means the Government of Indonesia.

 

GoI Consent Letter

means the consent letter with respect to the Government Guarantee, issued or to be issued by the GoI and addressed to the Borrower and the Onshore Security Agent.

 

“Government Guarantee”

means the Business Viability Guarantee Letter Number: S-285/MK.011/2013 dated 10 April 2013 (as amended, restated, amended and restated, or supplemented or otherwise modified in writing from time to time) issued by the GoI (represented by the MoF) to the Borrower.

 

“Governmental Authorisation”

means any authorisation from, or filing with, any relevant Governmental Authority, which is necessary or desirable for the purpose of implementing the Project, including the Material Governmental Authorisations.

 

“Governmental Authority”

means any:

 

(a)           national, supranational, regional, provincial or local government, or any ministry, department, political subdivision, instrumentality commission, authority, tribunal, agency, entity (including any state owned enterprise or any subsidiary of a state owned enterprise) under the direct or indirect control thereof;

 

(b)           any parliament, legislature or regulatory body, whether national, supranational, regional, provincial or local;

 

(c)           central bank (or any person, whether or not government owned and howsoever constituted or called, that validly exercises the functions of a central bank); or

 

(d)           other entity of any kind or other person validly exercising executive, legislative, judicial, regulatory or administrative functions.

 

“Guaranteed Net Dependable Capacity”

means, in respect of:

 

(a)           the First Generating Unit, 105.4 MW;

 

(b)           the Second Generating Unit, 107.7 MW; and

 

(c)           the Third Generating Unit, 107.7 MW.

 

“Hazardous Substance”

means any hazardous waste, substance, material or product referred to in the Safeguards Requirements, or defined, listed, classified in or under any Environmental and Social Law.

 

“Health, Safety and Environment Manager”

means the person appointed by the Operator as being responsible for health, safety and environmental aspects of the Project.

 

 

“Hedging Agreement”

means any ISDA Master Agreement together with an ISDA Schedule and one or more swap confirmations in respect of a Hedging Transaction from time to time entered into by the Borrower and a Hedging Counterparty for the purpose of hedging permitted under the terms of the Hedging Programme.

 

 

 
 

 

 

 

“Hedging Costs”

means any amount payable by the Borrower under a Hedging Agreement, except for any Hedging Termination Sum.

 

“Hedging Counterparty”

means:

 

(a)           any Mandated Lead Arranger which is originally party to this Agreement and the Intercreditor Deed as a Hedging Counterparty in respect of a Hedging Transaction entered into and which has become effective on or before the Hedging Cut-Off Date; and

 

(b)         any Eligible Bank which becomes a party to this Agreement and the Intercreditor Deed as a Hedging Counterparty in accordance with Clause 28.4 (Hedging Counterparties) in respect of a Hedging Transaction (including any novated or transferred Hedging Transaction) entered into and which has become effective (including by way of novation or transfer) after the Hedging Cut-Off Date, which in each case has not ceased to be a party to this Agreement and the Intercreditor Deed as a Hedging Counterparty in accordance with the provisions of this Agreement.

 

“Hedging Cut-Off Date”

means the date which is one Business Day (in Jakarta only) before the First Drawdown Date.

 

“Hedging Programme”

means the Borrower’s hedging programme as set out in Schedule 3 (Hedging Programme), as may be amended, supplemented and replaced from time to time by the Borrower with the prior written consent of the Intercreditor Agent.

 

“Hedging Termination Sum”

means any amount payable by the Borrower under a Hedging Agreement as a result of the termination or close out (whether partial or total) of that Hedging Agreement or any Hedging Transaction contemplated under it, excluding for any interest accruing on any amount not paid when due.

 

“Hedging Transaction”

means any hedging instrument entered into under and forming part of a Hedging Agreement and in accordance with the Hedging Programme.

 

“HGB Certificate”

means a certificate that evidences a right (recognised under Indonesian law) to utilise and build upon land (Hak Guna Bangunan) which is issued by an authorised land office in Indonesia.

 

“Historic Debt Service Coverage Ratio”

means, for any Calculation Date and for a Calculation Period, the ratio of:

 

(a)           Project Cash Flow Available for Debt Service during that Calculation Period, to:

 

(b)          Scheduled Debt Service during that Calculation Period, as calculated in accordance with the approved Debt Service Coverage Ratio Calculation Statement for that Calculation Date.

 

 

 
 

 

 

 

“Holding Company”

means, in relation to any company, any other company of which the first mentioned company is a Subsidiary.

 

“IFRS”

means the international financial reporting standards as issued by the International Accounting Standards Board.

 

“Increased Cost”

has the meaning given to it in Clause 11.1 (Increased Costs).

 

“Indonesia”

means The Republic of Indonesia.

 

“Indonesian Contractor”

means PT. Multi Fabrindo Gemilang.

 

“Indonesian CPI”

means, in respect of any adjustment to be made in any year, the Consumer Price Index for Jakarta as published from time to time by Bank Indonesia for the year preceding the year for which such adjustment is to be made; provided that if such Consumer Price Index as published from time to time is unavailable, the Indonesian Consumer Price Index shall mean the index, in substance similar thereto, selected by the Intercreditor Agent (acting reasonably) in consultation with the Borrower and the Senior Lenders’ Technical Advisor.

 

“Indonesian Law Governed Project Documents”

means the ESC, JOC, PLN Support Letter, Government Guarantee, the Power Plant Construction Contract and each other Project Document governed by Indonesian law.

 

 

“Information”

has the meaning given to it in Clause 30.2 (Senior Finance Party Confidentiality).

 

“Initial Drilling Contract”

means the geothermal drilling contract dated 3 October 2013 between the Initial Drilling Contractor and the Operator.

 

Initial Drilling Contract Direct Agreement

means the direct agreement with respect to the Initial Drilling Contract, entered or to be entered into by the Initial Drilling Contractor, the Initial Drilling Contract Guarantor, the Operator and Offshore Security Agent.

 

“Initial Drilling Contract Guarantor”

means Halliburton Worldwide GmbH.

 

“Initial Drilling Contractor”

means PT Halliburton Logging Services Indonesia.

 

“Insolvency Proceeding”

means, with respect to a person:

 

(a)           any insolvency, winding up, liquidation, bankruptcy, administration, corporate rehabilitation, dissolution, suspension of payment obligations, composition, assignment for the benefit of creditors, moratorium on payments or reorganization; or

 

(b)           the appointment of a receiver, compulsory manager, judicial manager, curator, administrator, liquidator, bankruptcy official, trustee, sequestrator, custodian, or similar person, or any comparable step, process or appointment in any relevant jurisdiction, in each case with respect to that person or any of its assets.

 

 

 
 

 

 

 

“Insurance Proceeds”

means all insurance proceeds received under the Project Insurances, including Delay in Start-Up Insurance Proceeds and Business Interruption Insurance Proceeds, but excluding proceeds from third party liability, employer’s liability, automobile third party liability and workers’ compensation insurance to the extent that the same are not paid to or on behalf of the Borrower in accordance with the terms of such insurance.

 

“Insurance Proceeds Account”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Intercreditor Deed”

means the intercreditor deed dated on or about the Signing Date between the Senior Secured Parties in relation to, among other things, voting and other intercreditor matters.

 

“Interest Payment Date”

means:

 

(a)           prior to the First Repayment Date, 24 March and 24 September in each calendar year; and

 

(b)           on and after the First Repayment Date, each Repayment Date.

 

“Interest Period”

means, in relation to any Senior Loan, an interest period determined in accordance with Clause 6 (Interest Periods).

 

“Interim Measures”

has the meaning given to it in Clause 36.4 (Interim Measures).

 

“Interim Operation Period”

has:

 

(a)           in the case of the Power Plant Supply Contract, the meaning given to it in the Power Plant Supply Contract; and

 

(b)           in the case of the Power Plant Construction Contract, the meaning given to it in the Power Plant Construction Contract.

 

“Interpolated Screen Rate”

means, in relation to LIBOR for any Floating Rate Senior Loan or overdue amount under ADB Tranche A or the Covered Lenders Facility, the rate (rounded to four decimal places) which results from interpolating on a linear basis between:

 

(a)           the applicable Screen Rate (“Y1”) for the longest period (for which that Screen Rate is available) (“X1”) which is less than the Interest Period of that Floating Rate Senior Loan or overdue amount; and

 

(b)           the applicable Screen Rate (“Y3”) for the shortest period (for which that Screen Rate is available) (“X3”) which exceeds the Interest Period of that Floating Rate Loan or overdue amount, in each case as of 11:00 a.m. London time on the London Quotation Day for the offering of deposits in Dollars. For the avoidance of doubt, the Interpolated Screen Rate shall be the sum of:

 

(a)           Y1; plus

 

(b)           (Y3 – Y1) multiplied by [(X2 – X1) divided by (X3 – X1)]

 

where “X2” is equal to the number of days of the relevant Interest Period.

 

 

 
 

 

 

“ISDA Master Agreement”

means an ISDA Master Agreement (2002 version).

 

“ISDA Schedule”

means a schedule to an ISDA Master Agreement substantially in a form agreed upon between the Intercreditor Agent and the Borrower.

 

“Itochu”

means Itochu Corporation, a company established under the laws of Japan.

 

“Itochu Share Mortgages”

means each Cayman Islands’ law governed share mortgages entered or to be entered into by:

 

(a)           Itochu and the Offshore Security Agent, with respect to Itochu’s shares in the capital of the Itochu Shareholder; and

 

(b)           the Itochu Shareholder and the Offshore Security Agent, with respect to the Itochu Shareholder’s shares in the capital of the Itochu Borrower Entity.

 

“Itochu Shareholder”

means Sarulla Asset Management, an exempted company with limited liability incorporated in the Cayman Islands for the sole purpose of being the shareholder of the Itochu Borrower Entity and which itself is wholly and directly owned by Itochu.

 

“JBIC Commitment”

has the meaning given to it in the JBIC Facility Agreement.

 

“JBIC Covered Event”

has the meaning given to it in the EPRG.

 

“JBIC Event of Default”

has the meaning given to it in the JBIC Facility Agreement.

 

“JBIC Facility”

means the U.S. dollar denominated term loan facility made available for the Borrower under the JBIC Facility Agreement and this Agreement.

 

 

 
 

 

 

 

“JBIC Facility Agreement”

means the facility agreement dated on or about the Signing Date and entered into by the Borrower, JBIC and the JBIC Facility Agent with respect to the JBIC Facility.

 

“JOA”

means the Amended and Restated Joint Operating Agreement dated 11 July 2008 (as amended by addenda dated 11 July 2008 and 4 April 2013) between the Borrower Entities.

 

“JOC”

means the Sarulla Joint Operation Contract dated 27 February 1993 entered into by and between:

 

(a)           Perusahaan Pertambangan Minyak dan Gas Bumi Negara; and

 

(b)          Unocal North Sumatra Geothermal Ltd, whose interests will be assigned to the Borrower pursuant to the New DoA on the Assignment Date (as defined therein), and as amended pursuant to (i) the Amendment Agreement to Sarulla Joint Operation Contract dated 14 December 2007 entered into by PGE and the Itochu Borrower Entity, the Kyushu Borrower Entity, the Medco Borrower Entity, the Ormat Borrower Entity and the Operator and (ii) the Second Amendment to Sarulla Joint Operation Contract dated 4 April 2013 entered into by PGE and the Borrower.

 

“Know Your Customer Requirements”

means the identification checks that a Senior Finance Party requests in order to meet its obligations under Applicable Law to identify a person who is (or is to become) its customer.

 

“Kyushu”

means Kyushu Electric Power Co., Inc., a company established under the laws of Japan.

 

“Kyushu Share Mortgage”

means the share mortgage governed by the laws of Singapore entered or to be entered into by the Kyushu Shareholder and the Offshore Security Agent, with respect to the Kyushu Shareholder’s shares in the capital of the Kyushu Borrower Entity.

 

“Kyushu Shareholder”

means Kyuden International Corporation, a limited liability company established under the laws of Japan and which itself is wholly and directly owned by Kyushu.

 

 

 
 

 

 

“Lenders’ Completion Date”

means the date on which each of the following conditions have been satisfied on that date, in form and substance satisfactory to, or waived by, the Intercreditor Agent:

 

(a)           the Borrower has delivered to the Intercreditor Agent a physical completion certificate in the form set out in Schedule 11 (Physical And Operational Completion Certifications), Annex A-1 (Form of Physical Completion Certificate);

 

(b)           the Senior Lenders’ Technical Advisor has delivered to the Intercreditor Agent a physical completion confirmation certificate in the form set out in Schedule 11 (Physical And Operational Completion Certifications), Annex A-2 (Physical Completion Confirmation); 

 

(c)           the Borrower has delivered to the Intercreditor Agent an operational completion certificate in the form set out in Schedule 11 (Physical And Operational Completion Certifications), Annex B-1 (Form of Operational Completion Certificate);

 

(d)          the Senior Lenders’ Reserves Consultant has delivered to the Intercreditor Agent an operational completion confirmation certificate in the form set out in Schedule 11 (Physical And Operational Completion Certifications), Annex B-2 (Form of Operational Completion Confirmation);

 

(e)           either:

 

(i)           all amounts which are due and payable under the Project Documents as at the Lenders’ Completion Date have been finally determined and have been paid in full; or

 

(ii)           if and to the extent that there are any amounts which are due and payable under the Project Documents but unpaid as at the Lenders’ Completion, such unpaid amounts have been finally determined and there is in place appropriate performance securities in an aggregate amount not less than the aggregate unpaid amounts, in form and substance satisfactory to the Intercreditor Agent;

 

(f)           either:

 

(i)            there are no outstanding disputes under or in connection with any Project Document; or

 

(ii)           if there are outstanding disputes under or in connection with any Project Document, then:

 

(A)          the aggregate potential liability of the Borrower with respect to all such disputes does not exceed USD30,000,000 (or its equivalent); and either

 

(B)           the Operator has deposited into a separate account opened in its name an amount equal to the aggregate potential liability of the Borrower with respect to such disputes, provided that:

 

(1)           the separate account must be located in a jurisdiction (other than Indonesian) approved by the Intercreditor Agent; and

 

(2)           the Operator’s rights and interest with respect to such account must be subject to a first-ranking perfected Security Interest in favour of the Offshore Security Agent (for the benefit of the Senior Secured Parties) in form and substance satisfactory to the Intercreditor Agent; or

 

(C)           there is in place appropriate performance securities in an aggregate amount not less than the aggregate potential liability of the Borrower with respect to all such disputes, in form and substance satisfactory to the Intercreditor Agent

 

(g)          the Senior Lenders’ Insurance Consultant has delivered to the Intercreditor Agent a certificate confirming that all Project Insurances (including in respect of the operation phase of the Project) required to be in effect as at the Lenders’ Completion Date for the implementation of the Project are in full force and effect;

 

(h)          all Material Governmental Authorisations required to be in effect as at the Lenders’ Completion Date are in full force and effect;

 

(i)           either:

 

(i)            PLN has certified, in writing, that:

 

(A)          the Date of Commercial Generation of the First Generating Unit has occurred and that the Unit Rated Capacity of the First Generating Unit is not less than 83 MW; and

 

(B)           the Date of Commercial Generation of the Second Generating Unit and the Third Generating Unit has occurred; or

 

(ii)           the Borrower has received three (3) payments from PLN of the Electricity Charge by way of deposit into the relevant Project Account pursuant to the provisions of the Accounts Agreement, and:

 

(A)          such payments relate to three (3) invoices issued to PLN covering a period of at least two (2) months in the aggregate;

 

(B)          each payment reflects that the Borrower delivered and generated Electricity from all of the Generating Units representing at least ninety percent (90%) of the Unit Rated Capacity during the period covered by the invoices and that the portion of such payment so represented is undisputed by PLN; and  

 

 
 

 

 

 

 

(C)           there were no Deemed Dispatch Kwhs (as defined in the ESC) during the period covered by the invoices; or

 

(j)            the DSRA-1 has been funded up to the DSRA-1 Reserve Requirement for the Lenders’ Completion Date;

 

(k)           the DSRA-2 has been funded up to the DSRA-2 Reserve Requirement for the Lenders’ Completion Date;

 

(l)            the EPRG Premium Reserve Account has been funded up to the EPRG Premium Reserve Requirement for the Lenders’ Completion Date;

 

(m)          there is in place an approved Operating Plan and Budget for the calendar year in which the Lenders’ Completion Date occurs;

 

(n)          there is in place an approved Plant Maintenance Projection for the required period commencing on the Lenders’ Completion Date and the Plant Maintenance Reserve Account has been funded up to the Plant Maintenance Reserve Requirement for the Lenders’ Completion Date;

 

(o)           there is in place an approved Well Maintenance and Drilling Projection for the required period commencing on the Lenders’ Completion Date and the Well Maintenance and Drilling Reserve Account has been funded up to the Well Maintenance and Drilling Reserve Requirement for the Lenders’ Completion Date;

 

(p)           the PLN Credit Reserve Account is fully funded to the level required (if any) pursuant to the Accounts Agreement as at the Lenders’ Completion Date;

 

(q)           there is in place an approved Financial Model as contemplated pursuant to Clause 18.1 (Financial Model);

 

(r)            either:

 

(i)            the Debt to Equity Ratio at the Lenders’ Completion Date does not exceed the Maximum Debt to Equity Ratio; or

 

(ii)           if the Debt to Equity Ratio at the Lenders’ Completion Date exceeds the Maximum Debt to Equity Ratio:

 

(A)            the Intercreditor Agent has confirmed to the Borrower and the Senior Lenders the Mandatory Debt to Equity Ratio Prepayment Amount; and

 

(B)            all Mandatory Debt to Equity Ratio Prepayment Contributions have been paid in accordance with the applicable provisions of the Senior Finance Documents;

 

(s)           no Force Majeure Event is continuing, unless the Intercreditor Agent has confirmed in writing to the Borrower that the Senior Lenders’ Technical Advisor and/or the Senior Lenders’ Reserves Consultant has certified to the Intercreditor Agent that the Force Majeure Event:

 

(i)            is unlikely to continue for more than seven (7) continuous days in total; or

 

(ii)           is unlikely to have a material and adverse effect (including in terms of delay and cost) on the implementation on the Project;

 

(t)            no Default is subsisting;

 

(u)           the Environmental and Social Management Plan updated for the operation phase of the Project is operational and complies in all material respects with all Safeguards Requirements and to the extent any aspect of the Environmental and Social Management System for the operation phase of the Project has not been implemented, all arrangements necessary for such timely implementation have been made through the Environmental and Social Action Plan; and

 

(v)          the Borrower has delivered to the Intercreditor Agent a certificate signed by two directors of the Operator certifying that the requirements set out in paragraphs (e) and (f) and (h) to (u) inclusive above have been satisfied.

 

“Lenders’ Completion Sunset Date”

means the date which is twenty four (24) months after the Unit COD of the Third Generating Unit.

 

“Lending Office”

means:

 

(a)           in relation to a Senior Lender originally a Party, its office at the address specified in Schedule 1 (The Senior Lenders); and

 

(b)           in relation to any New Senior Lender, its office at the address specified in the relevant Deed of Novation – Senior Lenders and notified to the Intercreditor Agent, or such other offices as the relevant Senior Lender may later select pursuant to Clause 28.8 (Lending Offices).

 

 

 
 

 

 

 

“LIBOR”

means:

 

(a)           in relation to an Interest Period for any Floating Rate Senior Loan made under the JBIC Facility Agreement, or overdue amount thereunder, LIBOR (as defined in the JBIC Facility Agreement); and

 

(b)           in relation to an Interest Period for any Floating Rate Senior Loan made under the ADB Facility Agreement or the Covered Lenders Facility Agreement, or any overdue amount thereunder:

 

(i)            the applicable Screen Rate; or

 

(ii)           (if no Screen Rate is available for the Interest Period of that Floating Rate Senior Loan or overdue amount) the Interpolated Screen Rate for that Floating Rate Senior Loan or overdue amount; or

 

(iii)          if: 

 

(A)         no Screen Rate is available for the currency of that Floating Rate Senior Loan or overdue amount; or

 

(B)          no Screen Rate is available for the Interest Period of that Floating Rate Senior Loan or overdue amount and it is not possible to calculate an Interpolated Screen Rate for that Floating Rate Senior Loan,

 

(C)          the Reference Bank Rate, as of 11:00 a.m. (London time) two London Quotation Days before the first day of the Interest Period of such Floating Rate Senior Loan or overdue amount for the offering of deposits in the currency of that Floating Rate Senior Loan or overdue amount and for a period comparable to that Interest Period, provided that if any such rate is below zero (0), LIBOR will be deemed to be zero (0).

 

“LNTP”

has:

 

(a)           in the case of the Power Plant Supply Contract, the meaning given in the Power Plant Supply Contract;

 

(b)           in the case of the Power Plant Construction Contract, the meaning given in the Power Plant Construction Contract; and

 

(c)           in the case of the Initial Drilling Contract, the meaning given in the Initial Drilling Contract.

 

“London Quotation Day”

means a day (other than a Saturday or Sunday) on which banks are generally open for business in London.

 

 

 
 

 

 

 

“Major Project Documents”

means:

 

(a)           each Drilling Contract;

 

(b)           the ESC;

 

(c)           the Government Guarantee;

 

(d)           the JOC;

 

(e)           the New DOA;

 

(f)            the PLN Support Letter;

 

(g)           each Power Plant Contract;

 

(h)           the Trust Account Agreement;

 

(i)            each Technical Support Agreement;

 

(j)            each parent company guarantee or performance security in respect of the obligations of any of the foregoing under the relevant Major Project Documents (including each Construction Bond);

 

(k)           the Land and Assets Utilisation Agreement between PGE and PT Pertamina (Persero);

 

(l)            each other Project Document entered into by any Borrower Entity after the Signing Date which the Intercreditor Agent determines (acting reasonably) constitutes a Major Project Document; and

 

(m)          any other agreement designated as a Major Project Document by the Intercreditor Agent and the Borrower.

 

“Major Project Parties”

means:

 

(a)          PGE;

 

(b)          PLN;

 

(c)           each Equity Party;

 

(d)           the Trust Account Trustee;

 

(e)           the Trust Account Bank; and

 

(f)           each of the following persons, for so long as that person has any obligations under any Major Project Document to which that person is party:

 

(i)           each Additional Drilling Contractor;

 

(ii)          the Initial Drilling Contract Guarantor;

 

(iii)         the Initial Drilling Contractor;

 

(iv)         each Power Plant Contractor;

 

(v)          each Technical Support Agreement Provider; and

 

(vi)         each provider of a guarantee or performance security (including each Construction Bond) in respect of the obligations of any of the foregoing under the relevant Major Project Document.

 

 

 
 

 

 

 

“Management Costs”

means Equity Party historical expenditures related to the Project in the nature of management costs.

 

“Mandatory Debt to Equity Ratio Prepayment Amount”

means an amount equal to the sum of:

 

(a)           the amount of Senior Loans outstanding which the Borrower is required to prepay pursuant to Clause 5.3(d) (Mandatory Prepayments);

 

(b)           the amount of interest payable pursuant to Clause 5.4(b)(i) (Miscellaneous Provisions) in respect of the prepayment referred to in paragraph (a) above; and

 

(c)           the amount of Hedging Termination Sums (if any), determined by the Intercreditor Agent (acting reasonably) that would be payable pursuant to Clause 5.4(b)(iii) (Miscellaneous Provisions) in connection with the prepayment referred to in paragraph (a) above, assuming for this purpose that the relevant Hedging Agreements were terminated (if required) pursuant to Clause 14.4 (Notional Amount Reductions) on the Lenders’ Completion Date.

 

“Mandatory Debt to Equity Ratio Prepayment Equity Contributions”

means:

 

(a)           Equity Contributions required to be made pursuant to Clause 4.1(c) (Right to Accelerate) of each Equity Support Deed; and

 

(b)           payments to the Borrower in the form of Equity in an amount which, when aggregated with all Equity Contributions to be provided as contemplated under paragraph (a) above, is equal to the Mandatory Debt to Equity Ratio Prepayment Amount.

 

“Margin”

means, with respect to a Floating Rate Senior Loan, the rate expressed to be the “Margin” in each relevant Senior Facility Agreement.

 

“Market Disruption Event”

has the meaning given to it in Clause 10.2 (Market Disruption).

 

“Material Adverse Effect”

means a material and adverse effect on: 

 

(a)           the business, operations, assets or financial condition of any Borrower Entity or any Major Project Party (other than the Trust Account Bank, the Trust Account Trustee and any SPV Equity Party);

 

(b)           the ability of any Borrower Entity or any Major Project Party to perform any of its material obligations under any Transaction Document;

 

(c)           the validity or enforceability of any Transaction Document;

 

(d)           the effectiveness or ranking of any Transaction Security; or

 

(e)           any right or remedy of any Senior Finance Party under or in respect of a Senior Finance Document.

 

 

 
 

 

 

 

“Material Governmental Authorisations”

means:

 

(a)           the authorisations listed in Schedule 6 (Material Governmental Authorisations); 

 

(b)          each authorisation replacing any of the authorisations listed in Schedule 6 (Material Governmental Authorisations); and

 

(c)           each Governmental Authorisation which is material in the context of the Project or is otherwise necessary for the implementation of the Project.

 

“Maximum Debt to Equity Ratio”

means the ratio of 76.97 to 23.03.

 

“Medco”

means PT Medco Power Indonesia, a limited liability company established under the laws of Indonesia.

 

“Medco Share Pledge”

means the Indonesian law governed share pledge entered or to be entered into by Medco, the Medco Borrower Entity and the Senior Secured Parties (as represented by the Onshore Security Agent) with respect to Medco’s shares in the capital of the Medco Borrower Entity.

 

“Medco Technical Support Agreement”

means the agreement entered or to be entered into by the Operator and Medco in connection with staffing arrangements for the Project.

 

“MoF”

means the Ministry of Finance of the GoI.

 

“Money Laundering”

means:

 

(a)           the conversion or transfer of property, knowing it is derived from a criminal offence, for the purpose of concealing or disguising its illegal origin or of assisting any person who is involved in the commission of the crime to evade the legal consequences of its actions;

 

(b)           the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property knowing that it is derived from a criminal offence; or

 

(c)           the acquisition, possession or use of property knowing at the time of its receipt that it is derived from a criminal offence.

 

 

 
 

 

 

 

“Moody’s”

means Moody’s Shareholder Services, Inc.

 

“NAES”

means NAES Corporation.

 

NAES Direct Agreement

means the direct agreement with respect to the NAES Technical Support Agreement, entered or to be entered into by NAES, the Operator and the Offshore Security Agent.

 

“NAES Technical Support Agreement”

means the agreement entered or to be entered into by the Operator and NAES in connection with provision of management services in the development of operating procedures and infrastructure at the Project Site.

 

“Namora-I-Langit Field”

means the geothermal reservoir in the area of the Project Site referred to as Namora-I-Langit.

 

“New DOA”

the Deed of Assignment signed between PLN, the Itochu Borrower Entity, the Medco Borrower Entity, the Ormat Borrower Entity and the Operator dated as of 30 October 2007 (as supplemented by the Addendum to the Deed of Assignment signed between PLN and each Borrower Entity dated 3 July 2008 under which the Kyushu Borrower Entity became a part of the “COMPANY” (as defined in the ESC), the Second Addendum to the Deed of Assignment signed between PLN and each Borrower Entity dated 4 April 2013 and the PLN Consent Letter.

 

“New Senior Lender”

has the meaning given to it in Clause 28.2 (Transfers by Senior Lenders).

 

“Non-Consenting Covered Lender”

means a Covered Lender, other than:

 

(a)          JBIC, if and to the extent that it is subrogated to or assigned or transferred the rights of a Covered Lender as a consequence of any payment made by JBIC pursuant to the EPRG; or

 

(b)          a Covered Lender voting at the direction of JBIC under and in accordance with the EPRG, which does not agree to the making of any Determination in circumstances where:

 

(i)            the Borrower has requested the Intercreditor Agent to make such Determination;

 

(ii)           the Determination is one required to be made in accordance with Clause 4.4 (Unanimous Decisions) of the Intercreditor Deed; and

 

(iii)          affirmative votes for the Determination have been obtained from the requisite Voting Parties specified in Clause 4.5 (Majority Decisions) of the Intercreditor Deed (assuming for this purpose the Determination is one required to be made in accordance with Clause 4.5 (Majority Decisions) of the Intercreditor Deed).

 

 

 
 

 

 

“Notice to Proceed”

has:

 

(a)           in the case of the Power Plant Supply Contract, the meaning given in the Power Plant Supply Contract;

 

(b)           in the case of the Power Plant Construction Contract, the meaning given in the Power Plant Construction Contract; and

 

(c)           in the case of the Initial Drilling Contract, the meaning given in the Initial Drilling Contract.

 

“NTP Date”

means the date set out in a notice to proceed issued by the Borrower pursuant to Clause 4.1(b) of the Power Plant Construction Contract and/or Clause 4.1(b) of the Power Plant Supply Contract (as the case may be) on which each of the Power Plant Contractors is to commence full performance of the relevant scope of supply or scope of work.

 

“Obstructive Practice”

means:

 

(a)          deliberately destroying, falsifying, altering or concealing evidence material to an investigation by a Senior Lender into allegations of a Coercive Practice, Collusive Practice, Corrupt Practice or Fraudulent Practice; making false statements to investigators, in order to materially impede such investigation; failing to comply with requests to provide information, documents or records in connection with such investigation; and threatening, harassing or intimidating any person to prevent it from disclosing its knowledge of matters relevant to such investigation or from pursuing such investigation; or

 

(b)          acts intended to materially impede the exercise of a Senior Lender’s contractual rights of audit or inspection or access to information under any Senior Finance Document in connection with an investigation by a Senior Lender into allegations of a Coercive Practice, Collusive Practice, Corrupt Practice or Fraudulent Practice. 

 

“OECD”

means the Organisation for Economic Cooperation and Development.

 

“Offshore Account Bank”

means Mizuho Bank, Ltd.

 

“Offshore Assignments of Reinsurances”

means each English law governed security assignment entered into from time to time by any direct insurer in favour of the Offshore Security Agent with respect to its rights under certain reinsurance policies constituting Project Insurances.

 

“Offshore General Account”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

 

 
 

 

 

 

“Offshore General Security Agreement”

means the English law governed debenture to be entered into by each Borrower Entity and the Offshore Security Agent with respect to all of the present and future assets of that Borrower Entity, including with respect to the Project Documents governed by Indonesian law and the Project Documents governed by English law.

 

“Offshore Pre-Completion Revenue Account”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

 

“Offshore Project Accounts”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Offshore Project Accounts Charge”

means the Singapore law governed accounts charge dated on or about the Closing Date between the Operator and the Offshore Security Agent with respect to all of the rights of the Operator in the Offshore Project Accounts (excluding the Distributions Accounts).

 

“Offshore Security Documents”

means each of: 

 

(a)          the Offshore Assignments of Reinsurances;

 

(b)          the Offshore Project Accounts Charge;

 

(c)          the Offshore General Security Agreement;

 

(d)          the Offshore Share Security Agreements; and

 

(e)          the Subordinated Shareholder Loan Assignment Agreements entered into by Medco, the Kyushu Shareholder, the Itochu Shareholder and the Ormat Shareholder.

 

“Offshore Share Security Agreements”

means each of:

 

(a)          the Kyushu Share Mortgage;

 

(b)          the Itochu Share Mortgages;

 

(c)          the Operator Share Mortgages; and

 

(d)          the Ormat Share Mortgages.

 

“Onshore Account Bank”

means PT. Bank Mizuho Indonesia.

 

“Onshore Project Accounts”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

 

 
 

 

 

 

“Onshore Security Documents”

means: 

(a)          the Conditional Novation of Project Documents; 

 

(b)          the Fiduciary Assignment of Receivables;

 

(c)          the Fiduciary Assignment of Receivables (Medco);

 

(d)          the Fiduciary Assignment of Insurance Claim Proceeds;

 

(e)          the Fiduciary Assignment of Reinsurance Claim Proceeds;

 

(f)           the Fiduciary Assignment of Intellectual Property Rights;

 

(g)          the Fiduciary Transfer of Tangible Assets;

 

(h)          the Medco Share Pledge;

 

(i)           the Pledge of Onshore Project Accounts;

 

(j)           each Power of Attorney to Exercise Rights under the Indonesian Law Governed Project Documents;

 

(k)          the Power of Attorney to Manage the Business of the Medco Borrower Entity;

 

(l)           the Power of Attorney to Sell Shares of the Medco Borrower Entity;

 

(m)         the Power of Attorney to Vote Shares of the Medco Borrower Entity;

 

(n)          the Power of Attorney to Exercise Intellectual Property Rights;

 

(o)          the Power of Attorney to Manage Bank Accounts; and

 

(p)          any security supplement executed in connection with the agreements listed in paragraphs (a) to (o) (inclusive) above.

 

Operating Costs 

means, in respect of any period, all costs and expenses payable by the Borrower during that period in connection with the operation and maintenance of the Project, including with respect to the following:

 

(a)          the supply and transportation of fuel, power, water and other utilities;

 

(b)          employee salaries and payments pursuant to secondment arrangements and administrative overheads;

 

(c)          fees and costs payable to the Technical Support Agreement Providers under the Technical Support Agreement;

 

(d)          duties and Taxes incurred in the normal course of operations (including Taxes on income and other profits of any Borrower Entity under Indonesian law but excluding withholding tax on Financing Costs);

 

(e)          foreign exchange losses realised in cash;

 

(f)           any premiums and fees relating to any Project Insurances listed in Part B and Part C of Schedule 7 (Project Insurances) and maintained during such period;

 

 

 
 

 

 

 

 

(g)          reasonable general and administrative expenses;

 

(h)          costs and expenses incurred in complying with the Borrower’s environmental and/or social obligations under the Senior Finance Documents;

 

(i)           reasonable legal, accounting, consultancy, advisor and similar professional fees in connection with the implementation of the Project;

 

(j)           Plant Maintenance Expenses;

 

(k)         Well Maintenance and Drilling Expenses; 

 

(l)           any Carbon Credits (as defined in the ESC) payable by the Borrower to PLN and/or PGE in accordance with the provisions of the ESC; and

 

(m)         subject to no double counting of any item, any other costs and expenses contained in the most recent approved Operating Plan and Budget or otherwise approved by the Intercreditor Agent;

 

but excluding:

 

(i)            Capital Costs;

 

(ii)           amounts payable to the Senior Finance Parties pursuant to the Senior Finance Documents;

 

(iii)          Restricted Payments; and

 

(iv)          depreciation, non-cash charges, reserves, amortisation of intangibles and similar book-keeping entries.

 

“Operating Plan and Budget”

means an operating plan and budget which satisfies the requirements set out in, and as updated in accordance with the provisions of, Clause 18.5 (Operating Plan and Budget).

 

“Operation Report”

means a report substantially in the form of Schedule 9 (Form Of Operation Report).

 

“Operations Committee”

has the meaning given to it in the ESC.

 

“Operations Committee Procedures”

means the procedures relating to the activities of the Operations Committee, as may be amended from time to time in accordance with the terms of the Senior Finance Documents. 

 

“Operator Share Mortgages”

means each Cayman Islands’ law governed share mortgage entered or to be entered into by a Shareholder with respect to its shares in the capital of the Operator.

 

 

 
 

 

 

 

“Original ESC”

means the Sarulla Energy Sales Contract dated 27 February 1993 entered into by and between Perusahaan Umum Listrik Milik Negara, Perusahaan Pertambangan Minyak dan Gas Bumi Negara, and Unocal North Sumatra Geothermal Ltd, whose interests will be assigned to the Borrower pursuant to the New DoA.

 

“Ormat”

means Ormat International, Inc., a limited liability company established under the laws of the State of Delaware, United States of America.

 

“Ormat HoldCo”

means Ormat Holding Corp., an exempted company with limited liability incorporated in the Cayman Islands.

 

“Ormat Share Mortgages”

means each Cayman Islands’ law governed share mortgage entered or to be entered into by:

 

(a)           the Ormat HoldCo and the Offshore Security Agent, with respect to the Ormat HoldCo’s shares in the capital of the Ormat Shareholder; and

 

(b)           the Ormat Shareholder and the Offshore Security Agent, with respect to the Ormat Shareholder’s shares in the capital of the Ormat Borrower Entity.

 

“Ormat Shareholder”

means OrPower 11 Inc., an exempted company with limited liability incorporated in the Cayman Islands.

 

“Participation”

means, with respect to a Senior Lender:

 

(a)           and a Senior Loan, the portion of the amount of that Senior Loan which is outstanding and owing to that Senior Lender; and

 

(b)           and any other amount owing by the Borrower under the Senior Finance Documents, the portion of that amount which is owing to that Senior Lender.

 

“Party”

means a Senior Finance Party or a Borrower Entity.

 

PDS

has the meaning given to it in Clause 30.3 (ADB Disclosure Obligations).

 

“Performance Liquidated Damages”

means any liquidated damages payable by:

 

(a)           a Power Plant Contractor to the Borrower under a Power Plant Contract:

 

(i)           for, or in respect of, a failure to achieve the Guaranteed Net Dependable Capacity of a Generating Unit; or

 

(ii)          otherwise in respect of defective performance, but excluding liquidated damages payable in respect of any delay under a Power Plant Contract; and

 

(b)          a Drilling Contractor to the Borrower under a Drilling Contract for or in respect of defective performance, but excluding liquidated damages payable in respect of any delay under the Drilling Contract.

 

 

 
 

 

 

 

“Permitted Disposal”

means:

 

(a)           sales of Geothermal Energy and electric capacity pursuant to the ESC, any other Disposal required by a Major Project Document and any set-off right contemplated in the JOC or the ESC;

 

(b)          Disposals of any consumables for use in the operation of the Plant in the ordinary course of the Borrower’s business;

 

(c)           Disposals in the ordinary course of business and at fair market value, of assets that are obsolete or no longer used by or useful to the Borrower, or which are promptly to be replaced by adequate substitutes of equal or greater value than the replaced items when new;

 

(d)          purchases or sales for cash of Permitted Investments prior to the maturity thereof in accordance with the Accounts Agreement;

 

(e)           the transfer of the Special Facilities to PLN in accordance with the applicable provisions of the ESC;

 

(f)           Disposals in the ordinary course of the Borrower’s business and at fair market value, of assets having a fair market value not exceeding USD1,000,000 in any year or USD5,000,000 in aggregate, and not otherwise permitted under the Senior Finance Documents; and

 

(g)          any Disposal otherwise approved by the Intercreditor Agent for the purpose of this definition (provided that any such approval shall not, unless the Intercreditor Agent expressly agrees, limit the obligations of the Borrower under Clause 5.3(a)(v) (Mandatory Prepayments)), provided that all of the above are effected on an arm’s length basis and on commercially reasonable terms and conditions.

“Permitted Equity Party Payment”

means:

 

(a)           Management Costs in an amount of USD20,000,000 which the Senior Lenders’ Model Auditor has verified (and confirmed such verification to the Intercreditor Agent) as constituting Equity Party historical expenditures related to the Project, to be reimbursed by the Borrower to any Equity Party or any Affiliate of any Equity Party; or

 

(b)           pursuant to a Project Document and which:

 

(i)            has been approved by the Intercreditor Agent; and

 

(ii)           is permitted to be made in accordance with:

 

(A)           the most recent approved Project Budget; or

 

(B)           the most recent approved Operating Plan and Budget.

 

 

 
 

 

 

 

“Permitted Financial Indebtedness”

means:

 

(a)           any Financial Indebtedness of the Borrower secured by Permitted Security Interests;

 

(b)          any Financial Indebtedness of the Borrower under the Transaction Documents;

 

(c)           any accounts payable and other amounts payable in the ordinary course of business to the extent incurred for the implementation of the Project, provided that such indebtedness is payable within ninety (90) days of being incurred including any related value added tax;

 

(d)          any amounts payable under a Subordinated Shareholder Loan Agreement;

 

(e)           any other Financial Indebtedness of the Borrower which does not exceed USD3,000,000 (or its equivalent) in the aggregate; and

 

(f)           any other Financial Indebtedness of the Borrower incurred with the prior written consent of the Intercreditor Agent.

 

“Permitted Investments”

means USD-denominated:

 

(a)           direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America) or obligations, the timely payment of principal and interest of which is fully guaranteed by the United States of America and with the full faith and credit of the United States of America;

 

(b)           interest-bearing demand or time deposits (including certificates of deposit) that are held with any Senior Finance Party, any Account Bank or any other bank that are organised under the laws of a member country of the OECD, Singapore, Hong Kong or, in the case of investments made from funds in the Onshore Project Accounts only, Indonesia, and have general obligations rated at least “AA” by Standard & Poor’s or “Aa2” by Moody’s;

 

(c)           any advances, loans or extensions of credit or any stock, bonds, notes, debentures or other securities as the Intercreditor Agent may from time to time approve,

provided that, each of the above investments shall:

 

(i)            either mature not later than the date on which such investment will be required to be liquidated or otherwise be capable of being liquidated (at no cost and preserving the initial capital value of the investment) at any time, in order to fund withdrawals, transfers or payments in accordance with the Senior Finance Documents;

 

(ii)           if an investment is a marketable obligation traded on an exchange, such exchange is a recognised international exchange; and

 

(iii)         be subject to a first-ranking perfected Security Interest in favour of the Offshore Security Agent (for the benefit of the Senior Secured Parties) in form and substance satisfactory to the Intercreditor Agent.

 

 

 
 

 

 

 

“Permitted Security Interests”

means any of the following:

 

(a)           the Transaction Security;

 

(b)          those Security Interests arising by operation of law in the ordinary course of the Borrower’s business provided that the same are in respect of obligations which have not been due for more than forty five (45) days and which are being contested in good faith and through appropriate proceedings that would not reasonably be likely to involve any substantial danger of the sale, forfeiture, loss or interference of or in the Project or the Project Assets or to have a Material Adverse Effect in the opinion of the Intercreditor Agent (acting reasonably) and in respect of which the Borrower has deposited adequate segregated cash reserves into an account approved by the Intercreditor Agent and which is secured to the Intercreditor Agent’s satisfaction for the benefit of the Senior Secured Parties;

 

(c)           any of the following Security Interests, which would not reasonably be likely to involve any substantial danger of the sale, forfeiture, loss or interference of or in the Project or the Project Assets or to have a Material Adverse Effect in the opinion of the Intercreditor Agent (acting reasonably) and in respect of which the Borrower has deposited segregated cash reserves for the full amount secured by the Security Interests into an account approved by the Intercreditor Agent and which is secured to the Intercreditor Agent’s satisfaction for the benefit of the Senior Secured Parties:

 

(i)            carrier’s, warehousemen’s, mechanic’s, materialmen’s, repairmen’s or other like liens over assets created in respect of ordinary course of business transactions; or 

 

 

 
 

 

 

 

 

(ii)           easements, rights of way, reservations, restrictions, covenants, agreements for joint or common use, landlords’ rights of distraint and other similar Security Interests affecting any property subject to the Transaction Security, granted in the ordinary course of business, which do not materially impair the value of such property or the Transaction Security;

 

(d)          any Security Interest arising in the ordinary course of business out of title retention or similar provisions contained in suppliers’ standard and generally applicable terms for the supply of goods in the ordinary course of business, provided that such Security Interest does not arise as a result of payment for the relevant goods being overdue (or if overdue, which payment is being contested in good faith and through appropriate proceedings that would not reasonably be likely to involve any substantial danger of the sale, forfeiture, loss or interference of or in the Project or the Project Assets or to have a Material Adverse Effect in the opinion of the Intercreditor Agent (acting reasonably) and in respect of which the Borrower has deposited adequate segregated cash reserves into an account approved by the Intercreditor Agent and which is secured to the Intercreditor Agent’s satisfaction for the benefit of the Senior Secured Parties), provided in any event that the aggregate value at any time of all goods subject to any such Security Interest does not exceed USD1,000,000;

 

(e)           any Security Interest which is a result of a court order or judgment that is not yet final and is either discharged within forty-five (45) days of its creation is being contested in good faith and through appropriate proceedings that would not reasonably be likely to involve any substantial danger of the sale, forfeiture, loss or interference of or in the Project or the Project Assets or to have a Material Adverse Effect in the opinion of the Intercreditor Agent (acting reasonably) and in respect of which the Borrower has deposited adequate segregated cash reserves into an account approved by the Intercreditor Agent and which is secured to the Intercreditor Agent’s satisfaction for the benefit of the Senior Secured Parties;

 

(f)           any other Security Interests expressly permitted under the Senior Finance Documents or required to be created in the course of performance of any Project Document; and

 

(g)          any other Security Interest created with the prior written consent of the Intercreditor Agent.

 

“PGE”

means PT Pertamina Geothermal Energy.

 

 

 
 

 

 

 

“PGE Assets”

means the Fields, the Field Facilities and the Project Site, in each case to the extent owned by PGE.

 

PGE Consent Letter

means the consent letter with respect to the JOC and ESC, entered or to be entered into by PGE, the Borrower and the Onshore Security Agent.

 

“PGE Privatisation Event”

means:

 

(a)           any event, or combination of events, which has the effect of equitising PGE under the laws of Indonesia (irrespective of whether the equitisation event, or combination of events, is accomplished through the sale of existing shares or the issuance of new shares) resulting in the GoI no longer holding (directly or indirectly) the percentage of shareholder voting power in PGE required under Applicable Law to pass all resolutions at a general meeting of the shareholders of PGE; or

 

(b)           any demerger or corporate reorganisation of PGE resulting in:

 

(i)           PGE no longer being the counterparty to the Transaction Documents to which it is a party; or

 

(ii)          a material and adverse change to PGE’s ability to perform its obligations under the Transaction Documents to which it is a party.

 

“PKLN Team”

means the Team for Offshore Commercial Loans, established by the GoI pursuant to Presidential Decree No. 39 year 1991.

 

“Plant”

means the Field Facilities, the Electricity Generation Facilities, spare parts, machinery and any ancillary facilities thereto, and all additions and modifications thereto.

 

“Plant Rated Capacity”

has the meaning given to it in the ESC.

 

“Plant Maintenance Expenses”

means expenditure for maintenance of the Plant described in Tables 1 and 2 of Schedule 5 (Plant Maintenance Reserve Requirement) of the Accounts Agreement, excluding Well Maintenance and Drilling Expenses.

 

“Plant Maintenance Projection”

has the meaning given to it in Clause 18.7 (Plant Maintenance Projection).

 

“Plant Maintenance Reserve Account”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Plant Maintenance Reserve Requirement”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

 

“Pledge of Onshore Project Accounts”

means the Indonesian law governed pledge to be executed in the form of a notarial deed on or prior to the Closing Date by the Senior Secured Parties (as represented by the Onshore Security Agent) and the Operator in respect of the Onshore Project Accounts.

 

 

 
 

 

 

 

“PLN”

means PT Perusahaan Listrik Negara (Persero).

 

PLN Consent Letter

means the consent letter with respect to the ESC, entered or to be entered into by PLN, the Borrower and the Onshore Security Agent.

 

“PLN Privatisation Event”

means:

 

(a)           any event, or combination of events, which has the effect of equitising PLN under the laws of Indonesia (irrespective of whether the equitisation event, or combination of events, is accomplished through the sale of existing shares or the issuance of new shares) resulting in the GoI no longer holding (directly or indirectly) the percentage of shareholder voting power in PLN required under Applicable Law to pass all resolutions at a general meeting of the shareholders of PLN; or

 

(b)           any demerger or corporate reorganisation of PLN resulting in:

 

(i)           PLN no longer being the counterparty to the Transaction Documents to which it is a party; or

 

(ii)          a material and adverse change to PLN’s financial ability to perform its obligations under the Transaction Documents to which it is a party.

 

“PLN Support Letter”

means the letter agreement with the subject heading “Sarulla Geothermal Project - PLN Support Letter” (Reference No: 0050/043/DIRUT2013) dated 4 April 2013 entered into by PLN and the Borrower, and the letter of clarification from the Borrower to PLN (Reference No: SOL-DIR-0017) dated 4 April 2013 and the letter from PLN to the Borrower (Reference No: 051/043/DIRUT2013) dated 4 April 2013 (as supplemented by the PLN Consent Letter).

 

“Potential Event of Default”

means any event or circumstance which, with the giving of notice, lapse of time, the making of any determination under the Senior Finance Documents or any combination of the foregoing, may reasonably be expected to constitute an Event of Default.

 

“Power of Attorney to Exercise Intellectual Property Rights”

means the Indonesian law governed irrevocable power of attorney to exercise intellectual property rights including licences, copyrights, design registrations and know-how necessary for the implementation of the Project, to be granted in favour of the Senior Secured Parties (as represented by the Onshore Security Agent) by the Operator on or prior to the Closing Date.

 

“Power of Attorney to Exercise Rights under the Indonesian Law Governed Project Documents”

means each Indonesian law governed irrevocable power of attorney in respect of the rights of a Borrower Entity under the Indonesian Law Governed Project Documents to be granted in favour of the Senior Secured Parties (as represented by the Onshore Security Agent) by that Borrower Entity on or prior to the Closing Date.

 

 

 
 

 

 

 

“Power of Attorney to Manage Bank Accounts of the Operator”

means the Indonesian law governed irrevocable power of attorney to manage the Onshore Project Accounts to be granted by the Operator in favour of the Senior Secured Parties (as represented by the Onshore Security Agent) on or prior to the Closing Date.

 

“Power of Attorney to Manage the Business of the Medco Borrower Entity”

means the Indonesian law governed irrevocable power of attorney to manage the business of the Medco Borrower Entity to be granted in favour of the Senior Secured Parties (as represented by the Onshore Security Agent) by the Medco Borrower Entity on or prior to the Closing Date.

 

“Power of Attorney to Sell Shares of the Medco Borrower Entity”

means the Indonesian law governed irrevocable power of attorney to sell shares to be granted in favour of the Senior Secured Parties (as represented by the Onshore Security Agent) by Medco on or prior to the Closing Date.

 

“Power of Attorney to Vote Shares of the Medco Borrower Entity”

means the Indonesian law governed irrevocable power of attorney to vote shares to be granted in favour of the Senior Secured Parties (as represented by the Onshore Security Agent) by Medco on or prior to the Closing Date.

 

“Power Plant Contracts”

means:

 

(a)           the Power Plant Construction Contract;

 

(b)           the Power Plant Supply Contract; and

 

(c)           the Coordination Agreement.

 

“Power Plant Contractors”

means:

 

(a)           the Power Plant Supply Contractor; and

 

(b)           the Power Plant Construction Contractor.

 

“Power Plant Construction Contract”

means the construction contract entered or to be entered into between the Operator and the Power Plant Construction Contractor.

 

“Power Plant Construction Contractor”

means the Indonesian Contractor and the Power Plant Supply Contractor.

 

Power Plant Contracts Direct Agreement

means the direct agreement with respect to the Power Plant Supply Contract, Power Plant Construction Contract and the Coordination Agreement, entered or to be entered into by the Power Plant Construction Contractor, the Power Plant Supply Contractor, the Operator and Offshore Security Agent.

 

“Power Plant Supply Contract”

means the supply contract entered or to be entered into between the Power Plant Supply Contractor and the Operator.

 

“Power Plant Supply Contractor”

means Hyundai Engineering & Construction Co., Ltd.

 

 

 
 

 

 

 

“Pre-Completion Make-Up Well Capital Costs”

means all costs and expenses incurred, or to be incurred, prior to the Unit COD of the Third Generating Unit in connection with drilling make-up wells.

 

 

“Pre-Completion Operating Costs

means all Operating Costs incurred, or to be incurred, during the period from and including the Unit COD of the First Generating Unit to but excluding the Unit COD of the Third Generating Unit.

 

“Pre-Completion Revenue”

means all:

 

(a)          Electricity Charges;

 

(b)          payments by the GoI under the Government Guarantee which do not constitute ESC Buyout Payments;

 

(c)          Delay Liquidated Damages;

 

(d)          Business Interruption Insurance Proceeds; and

 

(e)           Delay in Start-up Insurance Proceeds, in each case received by the Borrower (by way of deposit into the relevant Project Account pursuant to the provisions of the Accounts Agreement) prior to the Unit COD of the Third Generating Unit.

 

“Pre-Completion Revenue Cap”

means an amount equal to USD86,306,165.

 

“Project”

means:

 

(a)          the design, development, engineering, procurement, construction, erection, commissioning, testing, operation, maintenance and financing of the Field Facilities, the Electricity Generating Facilities and related assets;

 

(b)          the ownership of the Electricity Generation Facilities;

 

(c)          the design, development, engineering, procurement, construction, erection, commissioning, testing and financing of the Special Facilities; and

 

(d)          until the Special Facilities Taking Over Date, the ownership of the Special Facilities.

 

“Project Accounts”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Project Assets”

means all assets, properties, rights and interests from time to time owned (whether legally or beneficially) by the Borrower or any Borrower Entity or used and/or enjoyed by the Borrower or any Borrower Entity in connection with the Project, including:

 

(a)           the Electricity Generation Facilities;

 

(b)          all facilities and equipment and all other property (assets and rights) whether tangible or not and whether real or personal) constructed or acquired from time to time by the Borrower or any Equity Party for the implementation of the Project, including, prior to the Special Facilities Taking Over Date, the Special Facilities;

 

 

 

 
 

 

 

 

 

(c)           the Borrower’s rights under the Project Documents, including:

 

(i)            in respect of the trust(s) created under the Trust Account Agreement; and

 

(ii)           under the JOC with respect to:

 

(A)           the exclusive use and possession of the Fields and the Field Facilities;

 

(B)            the exclusive use and possession of the Project Site;

 

(C)            the Governmental Authorisations; and

 

(D)            the exploitation of the Geothermal Energy located under or within the Contract Area; and (d)the Project Accounts.

“Project Budget”

means a budget for the design, engineering, financing, construction, commissioning, testing and start-up of the Project prepared by the Borrower and delivered to the Intercreditor Agent as a Condition Precedent to the First Advance and as updated in accordance with Clause 18.3 (Project Budget).

 

“Project Cash Flow Available for Debt Service”

means, in respect of any period, the sum of:

 

(a)           the aggregate of:

 

(i)           Electricity Charges which are deposited into a Project Account in accordance with the Accounts Agreement, but excluding Pre-Completion Revenue;

 

(ii)          Delay Liquidated Damages;

 

(iii)         Delay in Start-Up Insurance Proceeds;

 

(iv)         Business Interruption Insurance Proceeds;

 

(v)          interest on the balances standing to the credit of the Project Accounts (other than the Distributions Holding Account and the Distributions Accounts), if and to the extent such interest is credited to the balance of the Offshore General Account;

 

(vi)         all Income and Investment Proceeds (as those terms are defined in the Accounts Agreement), if and to the extent such Investment Proceeds and Income are credited to the balance of the Offshore General Account;

 

(vii)        VAT Receivables; and

 

(viii)       proceeds from the sale of any Carbon Credits (as defined in the ESC), actually received or (in the case of a future period but only with respect to any (x) Electricity Charges, (y) any Delay in Start-Up Insurance Proceeds and Business Interruption Insurance Proceeds if and to the extent that the relevant insurer has acknowledged in writing its liability to pay such Delay in Start-Up Insurance Proceeds or Business Interruption Insurance Proceeds, as the case may be and (z) VAT Receivables) projected to be received by the Borrower, in each case by way of deposit into the relevant Project Account pursuant to the provisions of the Accounts Agreement, during that period;

 

 

 

 
 

 

 

 

 

minus

 

(b)           the aggregate of:

 

(i)          Capital Costs;

 

(ii)          Operating Costs (but excluding for this purpose any Pre-Completion Operating Costs and any Pre-Completion Make-Up Well Capital Costs); and

 

(iii)         any other amount agreed by the Intercreditor Agent in writing, payable or (in the case of a future period) projected to be payable by the Borrower during that period,  as adjusted by an amount equal to the net change in the balance of each of the Plant Maintenance Reserve Account and the Well Maintenance and Drilling Reserve Account during that period (to the intent that an increase in the balance of any such Project Account during that period shall result in a corresponding decrease in Project Cash Flow Available for Debt Service and a decrease in the balance of any such Project Account during that period shall result in a corresponding increase in Project Cash Flow Available for Debt Service).

 

“Project Costs”

means all costs and expenses incurred, or to be incurred, by the Borrower in connection with the design, development, engineering, procurement, construction, erection, commissioning and testing of the Electricity Generation Facilities, the Field Facilities and the Special Facilities, including (without double counting):

 

(a)          “Development Costs” (described as such in the Financial Model and which includes all Management Costs) in the amount of USD85,550,000;

 

(b)          the USD70 million payment required to be made to PLN pursuant to the provisions of the New DOA;

 

(c)           all Capital Costs incurred and payable prior to the Lenders’ Completion Date;

 

(d)          each of the following, to the extent incurred, or to be incurred, and payable by the Borrower prior to the Lenders’ Completion Date:

 

(i)           all spare parts, equipment and other inventory costs;

 

(ii)          “SOL Scope” (described as such in the Financial Model) in the amount of USD23,930,000 specified as such in the Financial Model;

 

(iii)          all costs and expenses associated with any LNTP;

 

(iv)         fees and costs of the Borrower’s engineering, legal and other professional advisors in respect of the implementation of the Project and applications for the authorisations necessary or desirable for the implementation Project and in respect of filings made or to be made in respect of the implementation of the Project;

 

(v)           the cost of any Governmental Authorisations necessary or desirable for the implementation of the Project and the cost of filings made or to be made in respect of the implementation of the Project;

 

(vi)          the costs of acquiring and registering ownership of the Project Site, the Special Facilities Land and the Special Facilities ROWs;

 

(vii)         the fees and costs of the Senior Lenders’ Advisors;

 

(viii)        insurance premiums payable in respect of the Project Insurances listed in Part A and Part C of Schedule 7 (Project Insurances) prior to the end of the first month following the Lenders’ Completion Date; and

 

(ix)          legal, accounting and other professional fees and costs incurred, or to be incurred, by the Borrower in connection with the negotiation and entry into of the Transaction Documents and the documents referred to in the Transaction Documents; 

 

 

 
 

 

 

 

 

(e)           all Operating Costs incurred and payable prior to the Unit COD of the Third Generating Unit;

 

(f)           all Taxes, including any value added or similar Tax in respect of any of the items in this definition, to the extent imposed and payable prior to the Lenders’ Completion Date;

 

(g)           any Financing Costs accruing up to and including Unit COD of the Third Generating Unit;

 

(h)           funding of the DSRA-1 up to the DSRA-1 Reserve Requirement for the Lenders’ Completion Date;

 

(i)            funding of the DSRA-2 up to the DSRA-2 Reserve Requirement for the Lenders’ Completion Date;

 

(j)            the funding of the EPRG Premium Reserve Account up to the EPRG Premium Reserve Requirement;

 

(k)           funding of the Plant Maintenance Reserve Account up to the Plant Maintenance Reserve Requirement for the Lenders’ Completion Date;

 

(l)            funding of the Well Maintenance and Drilling Reserve Account up to the Well Maintenance and Drilling Reserve Requirement for the Lenders’ Completion Date; and

 

(m)          any other costs or expenses which the Intercreditor Agent and the Borrower agree shall constitute Project Costs; but excluding:

 

(i)           with respect to any category of costs and expenses referred to above which is included only to the extent such costs and expenses are incurred prior to a specified date, any costs and expenses relating to such category to the extent incurred after the date (which shall include for the avoidance of doubt Operating Costs incurred or to be incurred after the Unit COD of the Third Generating Unit and Capital Costs incurred or to be incurred after the Lenders’ Completion Date); 

 

(ii)           Repayment Instalments;

 

(iii)          Hedging Termination Sums;

 

(iv)          depreciation, non-cash charges, reserves, amortisation of intangibles and similar book-keeping entries; and

 

(v)           any costs or liabilities which, but for this paragraph (v), would constitute Project Costs, where the same arise in relation to the restoration or reinstatement of any asset which is lost or damaged to the extent such costs or liabilities are or are to be, and are permitted under the Senior Finance Documents to be, funded out of any Insurance Proceeds, Performance Liquidated Damages or Delay Liquidated Damages.

 

 

 
 

 

 

 

“Project Documents”

means:

 

(a)          the Additional Project Documents;

 

(b)          the Major Project Documents; and

 

(c)          each other contract, agreement or document designated as a Project Document by the Intercreditor Agent and the Borrower.

 

“Project Milestones”

means the Construction Milestones and the Drilling Milestones.

 

“Project Milestone Date”

means, with respect to a Project Milestone, the date specified as the Project Milestone Date for that Project Milestone in the relevant part of Schedule 12 (Project Milestones).

 

“Project Insurances”

means the insurances and reinsurances required to be taken out in accordance with Schedule 7 (Project Insurances).

 

“Project Revenues”

means:

 

(a)          Electricity Charges;

 

(b)          ESC Buyout Payments and payments by the GoI under the Government Guarantee which do not constitute ESC Buyout Payments;

 

(c)          Delay Liquidated Damages;

 

(d)          Compensation and Other Proceeds;

 

(e)           Insurance Proceeds;

 

(f)            interest accrued on the balance standing to the credit of, and the proceeds from any Permitted Investments of amounts standing to the credit of, any Project Account (other than the Distributions Holding Account and the Distributions Accounts);

 

(g)           rebates and refunds (including in respect of Tax), including VAT Receivables;

 

(h)           proceeds from any transfer or disposition of any assets;

 

(i)            payments to the Borrower under any Project Document not referred to above;

 

(j)            payments to the Borrower under the Hedging Agreements; and

 

(k)           all other revenues, income and other amounts received by the Borrower not specifically referred to above, payable or actually received by the Borrower.

 

 

 
 

 

 

 

“Project Schedule”

means a schedule for the implementation of the Project up to the Lenders’ Completion Date prepared by the Borrower and delivered to the Intercreditor Agent for approval as a Condition Precedent to the First Advance and as updated in accordance with Clause 18.4 (Project Schedule).

 

“Project Site”

means the land (excluding the Special Facilities Land) marked in the document titled “Project Site Map” set out in Schedule 13 (Project Site) or otherwise agreed in writing by the Borrower and the Intercreditor Agent. 

 

“Projected Debt Service Coverage Ratio”

means, for any Calculation Date and for a Calculation Period, the ratio of:

 

(a)          Project Cash Flow Available for Debt Service during that Calculation Period, to:

 

(b)          Scheduled Debt Service during that Calculation Period, as calculated and projected in accordance with the approved Debt Service Coverage Ratio Calculation Statement for that Calculation Date.

 

“Projected Project Costs”

means, at any time, the aggregate of the Project Costs which remain at that time to be paid in order to enable the Borrower to achieve the Lenders’ Completion Date.

 

“Prudent Utility Practices”

means those practices, methods, techniques and standards, as changed from time to time, that are generally accepted internationally for use in geothermal power plants and commonly used in prudent electric and geothermal engineering and operation to design, engineer, construct, test, operate and maintain the Field Facilities, the Electricity Generation Facilities and facilities and equipment associated with the Project lawfully, safely and economically as applicable to power stations of the size, service and type of the Project and in a manner consistent with Applicable Law, the Material Governmental Authorisations and the Safeguards Requirements and, unless the Senior Lenders’ Technical Advisor agrees otherwise and to the extent that such agreed changes are incorporated into the most recent approved Operating Plan and Budget, the construction, operation and maintenance standards recommended by the Project’s equipment suppliers and manufacturers.

 

“Public Communication Policy”

means the Public Communication Policy of Asian Development Bank Disclosure and Exchange of Information (March 2011).

 

“Reference Banks”

means:

 

(a)           in the case of each Senior Loan made under a Senior Facility Agreement (other than the JBIC Facility Agreement), the principal London offices of The Bank of Tokyo-Mitsubishi UFJ, Ltd., ING Bank N.V., Mizuho Bank, Ltd., National Australia Bank Limited, Société Générale and Sumitomo Mitsui Banking Corporation or such other banks as may be agreed between the Borrower and the Intercreditor Agent; or

 

(b)           in the case of a Senior Loan made under the JBIC Facility Agreement, the JBIC Reference Banks (as defined in the JBIC Facility Agreement).

 

 

 
 

 

 

 

“Reference Bank Rate”

means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Intercreditor Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in Dollars for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in Dollars for that period.

 

“Reimbursement and Subrogation Agreement”

means the reimbursement and subrogation agreement between the Borrower, JBIC and the JBIC Facility Agent and dated the Signing Date.

 

 

“Related Agreement”

has the meaning given to it in Clause 36.6(a) (Consolidation).

 

“Remedies”

means the remedies referred to in Clause 21.27 (Remedies).

 

“Repayment Date”

means each date on which a Repayment Instalment is scheduled to be made pursuant to the relevant provisions of the Senior Facility Agreement under which that Repayment Instalment is required to be made.

 

“Repayment Instalment”

means each instalment for repayment of Senior Loans outstanding under a Senior Facility which is scheduled to be made in accordance with the relevant Senior Facility Agreement, and “Repayment Instalments” means (unless the context requires otherwise) all Repayment Instalments under the Senior Facilities.

 

“Repayment Schedule”

means, with respect to a Senior Facility, the schedule for the repayment of Senior Loans outstanding under that Senior Facility set out in the Senior Facility Agreement for that Senior Facility.

 

“Replacement Senior Lender”

has the meaning given to it in Clause 28.12(b) (Replacement of a Covered Lender).

 

“Representative”

means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

 

“Required Credit Rating”

means a long term USD unsecured debt credit rating of at least “A-” by Standard & Poor’s or “A3” by Moody’s or an equivalent credit rating by another credit rating agency acceptable to the Intercreditor Agent.

 

“Reservoir Monitoring Report”

means a report substantially in the form of Schedule 10 (Form Of Reservoir Monitoring Report).

 

 

 
 

 

 

 

“Restoration”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Restoration Plan”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

Restricted Party

means any person that is:

 

(a)           listed on, or owned or controlled by a person listed on, a Sanctions List;

 

(b)          a government of a Sanctioned Country;

 

(c)           an agency or instrumentality of, or an entity directly or indirectly owned or controlled by, a government of a Sanctioned Country;

 

(d)           resident or located in, operating from, or incorporated under the laws of, a Sanctioned Country; or

 

(e)           to the best knowledge of the Borrower (acting with due care and enquiry), otherwise a target of Sanctions.

 

“Restricted Payment”

means any:

 

(a)           dividend (whether in the form of cash or property or otherwise) or any other payment or distribution on or with respect to any interest in the share capital of a Borrower Entity;

 

(b)          purchase, redemption, retirement or other acquisition of any interest in the share capital of a Borrower Entity;

 

(c)          option or warranty in respect of any interest in the share capital of a Borrower Entity;

 

(d)          payment, prepayment or repayment (whether in the form of cash or property or otherwise) with respect to the principal, interest, fees, costs or otherwise under any Subordinated Shareholder Loan Agreement; or

 

(e)           payment of any development, management or other fee, or any other payment to any Equity Party or any Affiliate of any Equity Party of whatever nature, whether under any Transaction Document or otherwise;

 

but excluding:

 

(i)             any Permitted Equity Party Payments;

 

(ii)            any payment permitted under Clause 3.16 (Distributions Accounts) of the Accounts Agreement; and

 

(iii)           any other payment approved in writing by the Intercreditor Agent.

 

 

 
 

 

 

“Retainage”

has:

 

(a)           in the case of the Power Plant Supply Contract, the meaning given in the Power Plant Supply Contract; and

 

(b)           in the case of the Power Plant Construction Contract, the meaning given in the Power Plant Construction Contract.

 

“RRP”

has the meaning given to it in Clause 30.3 (ADB Disclosure Obligations).

 

“Rules”

has the meaning given to it in Clause 36.1(a) (Disputes).

 

“Rupiah” or “IDR”

means the lawful currency of Indonesia.

 

“Safeguards and Social Claim”

means, with respect to the Borrower, any administrative, regulatory or judicial action or any written notice, claim, suit, lien, judgment or demand by any other person or Governmental Authority in Indonesia which alleges circumstances which (if established) would constitute a Safeguards and Social Non-Compliance.

 

“Safeguards and Social Documents”

means:

 

(a)          the ESIA;

 

(b)          the ESMP

 

(c)          the AMDAL;

 

(d)          the Environmental and Social Action Plan;

 

(e)          each Corrective Action Plan and any other document required to be prepared by the Borrower under the Safeguards Requirements setting out any preventative and corrective actions; and

 

(f)           any other document, plan or programme designated in writing by the Intercreditor Agent and the Borrower as a Safeguards and Social Document.

 

“Safeguards and Social Monitoring Report”

means each report prepared by the Borrower in accordance with the Safeguards Requirements, for monitoring and measuring the progress of implementation of the Safeguards and Social Documents.

 

“Safeguards & Social Non-compliance”

means a failure of the Borrower to comply with, or conduct of the Borrower that is inconsistent with, its obligations under the Safeguards and Social Provisions.

 

“Safeguards and Social Provisions”

means:

 

(a)          the Safeguards Requirements; and

 

(b)          the Safeguards and Social Documents.

 

 

 
 

 

 

 

“Safeguards Requirements”

means:

 

(a)           the requirements of the Environmental and Social Laws;

 

(b)          the IFC Policy and Performance Standards on Social and Environmental Sustainability dated 1 January 2012, but excluding any amendments, renewals, replacements, extensions, modifications or supplements after the Signing Date; and

 

(c)           the Equator Principles.

 

“Sanctioned Country”

means any country or other territory subject to a general export, import, financial or investment embargo under any Sanctions, which, as of the Signing Date, includes Cuba, Iran, Myanmar, North Korea, North Sudan, South Sudan and Syria.

 

“Sanctions”

means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority.

 

“Sanctions Authority”

means (i) the United States of America, (ii) the United Nations Security Council, (iii) the European Union, (iv) the United Kingdom, (v) the respective governmental institutions of any of the foregoing including Her Majesty’s Treasury, the Office of Foreign Assets Control of the United States of America Department of the Treasury, the United States of America Department of Commerce, the United States of America Department of State and any other agency of the government of the United States of America or (vi) any other authority deemed applicable to a Senior Lender.

 

“Sanctions List”

means any of the lists of specifically designated nationals or designated or sanctioned individuals or entities (or equivalent) issued by any Sanctions Authority, each as amended, supplemented or substituted from time to time.

 

“Scheduled Date of Commercial Generation”

has the meaning given to it in the ESC.

 

 

“Scheduled Debt Service”

means, for any period, an amount equal to the aggregate of:

 

(a)          Financing Costs accruing or (in the case of a future period) projected to accrue; and

 

(b)          Repayment Instalments payable or (in the case of a future period) projected to be payable, in that period, less all amounts accrued or (in the case of a future period) projected to accrue for payment to the Borrower in that period under the Hedging Agreements.

 

“Scheduled Substantial Completion Date”

has the meaning given to it in the Power Plant Supply Contract, as may be adjusted in accordance with the Coordination Agreement.

 

 

 
 

 

 

 

“Scheduled Unit COD”

means, in respect of: 

 

(a)           the First Generating Unit, 29 months after the Notice to Proceed is issued under the Power Plant Construction Contract and the Power Plant Supply Contract;

 

(b)          the Second Generating Unit, the date that occurs 40 months after the date the Notice to Proceed is issued under the Power Plant Construction Contract and the Power Plant Supply Contract; and

 

(c)           the Third Generating Unit, the date that occurs 46 months after the date the Notice to Proceed is issued under the Power Plant Construction Contract and the Power Plant Supply Contract, in each case, as extended to take into account any extensions to the Scheduled Date of Commercial Generation made pursuant to Section 9 (Force Majeure) of the ESC and applied to the whole Generating Unit, provided that no such extension shall result in the applicable Scheduled Unit COD occurring after the relevant Unit COD Sunset Date.

 

“Screen Rate”

means: 

 

(a)           in the case of any Floating Rate Senior Loan made under the JBIC Facility Agreement, the “Screen Rate” as defined in the JBIC Facility Agreement); or

 

(b)          in the case of any Floating Rate Senior Loan made under the ADB Facility Agreement or the Covered Lenders Facility Agreement, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for US Dollars and the relevant period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Intercreditor Agent may specify another page or service displaying the relevant rate after consultation with the Borrower and the Senior Lenders.

 

“Second ESC Amendment"

means the Second Amendment to Sarulla Energy Sales Contract dated 4 April 2013 entered into by and between PGE, PLN and the Borrower that amends the Original ESC (as amended by the First ESC Amendment) and the First ESC Amendment.

 

“Second Generating Unit”

means the third and fourth of the Units to be installed and commissioned in accordance with the ESC with a combined Guaranteed Net Dependable Capacity of 107.7 MW and located at the Namora-I-Langit Field.

 

“Security Agents”

means each of the Onshore Security Agent and the Offshore Security Agent.

 

 

 
 

 

 

 

“Security Documents”

means each of:

 

(a)           the Offshore Security Documents;

 

(b)           the Onshore Security Documents; and

 

(c)           any other document entered into from time to time as a further guarantee of or surety for amounts outstanding under the Senior Finance Documents and/or the Hedging Agreements or entered into pursuant to any further assurance provisions set out in any Senior Finance Document, and which the Intercreditor Agent designates as a Security Document.

 

“Security Interest”

means any mortgage, charge, pledge, hypothecation, fiduciary security, lien, encumbrance, assignment by way of security or other security interest or any other arrangement having the effect of conferring security (whether in-rem security or contractual or other security), including a conditional sale, hire purchase or finance lease or other title retention agreement, or any power of attorney or any arrangement whereby rights are subordinated to the rights of a third party.

 

“Senior-1 Facilities”

means ADB Tranche A, the Covered Lenders Facility and the JBIC Facility.

 

Senior-2 Facilities

means ADB Tranche B and ADB Tranche C.

 

“Senior Debt Provisional Limit”

means, at any time, an amount equal to the Total Commitment minus the Top-Up Advance Commitment.

 

“Senior Facilities”

means:

 

(a)           the Senior-1 Facilities; and

 

(b)           the Senior-2 Facilities, and “Senior Facility” means any one of any of them.

 

“Senior Facility Agreements”

means each of:

 

(a)           the ADB Facility Agreement;

 

(b)           the Covered Lenders Facility Agreement; and

 

(c)           the JBIC Facility Agreement.

“Senior Finance Documents”

means:

 

(a)           each Acceptable Equity Contribution LC;

 

(b)           the Accounts Agreement;

 

(c)           this Agreement;  

 

 

 
 

 

 

 

 

(d)           each Direct Agreement;

 

(e)           each Eligible Reserve Account LC;

 

(f)            the EPRG;

 

(g)           each Equity Support Deed;

 

(h)           each Fee Letter;

 

(i)            each Hedging Agreement;

 

(j)            the Intercreditor Deed;

 

(k)           each Deed of Accession – Hedging Counterparties;

 

(l)            each Deed of Novation – Senior Lenders;

 

(m)          the Reimbursement and Subrogation Agreement;

 

(n)           each Security Document;

 

(o)           each Senior Facility Agreement; and

 

(p)           each other document designated in writing by the Borrower and the Intercreditor Agent to be a Senior Finance Document.

 

“Senior Finance Party”

means:

 

(a)           each Agent;

 

(b)           JBIC (in its capacity as provider of the EPRG);

 

(c)           each Senior Lender; and

 

(d)          each Mandated Lead Arranger.

 

“Senior Lender”

means:

 

(a)           each of ADB, JBIC and each Covered Lender referred to in paragraph (a) of the definition thereof; and

 

(b)           each New Senior Lender, which in each case has not ceased to be a Party in its capacity as a Senior Lender in accordance with the provisions of this Agreement.

 

“Senior Lenders’ Advisors”

means the Senior Lenders’ Reserves Consultant, the Senior Lenders’ Insurance Consultant, the Senior Lenders’ Technical Advisor, the Senior Lenders’ Environmental and Social Consultant, the Senior Lenders’ Model Auditor and each other advisor appointed by the Intercreditor Agent in accordance with Clause 29 (Advisors).

 

“Senior Lenders’ Advisors Appointment Letters”

means the agreement or agreements to be entered into by the Intercreditor Agent and each Senior Lenders’ Advisor confirming such Senior Lenders’ Advisor’s appointment.

 

 

 
 

 

 

 

“Senior Lenders’ Environmental and Social Consultant”

means:

 

(a)           ENVIRONCORP Consulting Services (S) Pte Ltd or an affiliate thereof; or

 

(b)           any other reputable firm of environmental advisors as the Intercreditor Agent may appoint in consultation with the Borrower.

 

“Senior Lenders’ Insurance Consultant”

means:

 

(a)           PT Aon Indonesia or an affiliate thereof; or

 

(b)           any other reputable firm of insurance advisors as the Intercreditor Agent may appoint in consultation with the Borrower.

 

“Senior Lenders’ Model Auditor”

means:

 

(a)           BDO Transaction Services (East Coast Practice) Pty Ltd; or

 

(b)           any other reputable firm of financial model auditors as the Intercreditor Agent may appoint in consultation with the Borrower.

 

“Senior Lenders’ Reserves Consultant”

means:

 

(a)          GeothermEx, Inc.; or

 

(b)          any other reputable firm of geothermal resource advisors as the Intercreditor Agent may appoint in consultation with the Borrower.

 

“Senior Lenders’ Technical Advisor”

means:

 

(a)          Lummus Consultants International, Inc.; or

 

(b)          any other reputable firm of technical advisors as the Intercreditor Agent may appoint in consultation with the Borrower.

 

“Senior Loan”

means the principal amount outstanding of any Advance made under a Senior Facility and “Senior Loans” means the aggregate principal amount then outstanding of all Advances made under the Senior Facilities (or, where the context permits, one or more particular Senior Facilities).

 

“Senior Secured Liabilities”

means all present and future sums, obligations and liabilities whatsoever (actual or contingent, joint or several or joint and several) payable, owing, due or incurred by the Borrower to the Senior Secured Parties under or in connection with the Senior Finance Documents (including at law or in equity), whether or not matured and whether or not liquidated (including without limitation any right of subrogation), including (without duplication) in respect of:

 

(a)           the Senior Loans (and all interest thereon) and all other obligations, advances, debts and liabilities of the Borrower, and each Equity Party, including indemnities, fees, interest, Breakage Costs, Hedging Termination Sums and Hedging Costs incurred under, arising out of or in connection with the Senior Loans, this Agreement, any Senior Facility Agreement, each Fee Letter, the Hedging Agreements or any other Senior Finance Document (whether or not evidenced by any note or instrument and whether or not for the payment of money);

 

(b)          any and all sums advanced by any Agent in order to preserve the interest of any Senior Secured Party in any Transaction Security; and

 

(c)           in the event of any proceedings for the collection or enforcement of any of the foregoing while an Event of Default subsists, the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realising any asset which is the subject of a Security Document, or of any exercise by an Agent of its rights under the Security Documents, together with reasonable attorneys’ fees and court costs.

 

 

 
 

 

 

“Senior Secured Liabilities Discharge Date”

means the date on which:

 

(a)          all amounts which may be or become payable by the Borrower or any Equity Party to the Senior Secured Parties under or in connection with the Senior Finance Documents have been irrevocably paid in full to the satisfaction of the Intercreditor Agent; and

 

(b)          no Senior Secured Party has any undischarged actual or contingent liability (including any unutilised Commitment) under or in connection with the Senior Finance Documents.

 

“Senior Secured Parties”

means each Senior Finance Party and each Hedging Counterparty.

 

“Shareholders”

means the Itochu Shareholder, the Kyushu Shareholder, Medco and the Ormat Shareholder, and each other person that becomes a Shareholder pursuant to Clause 8 (Ownership Restrictions) of an Equity Support Deed.

 

“Shareholders Agreement”

means the Amended and Restated Shareholders’ Agreement dated 11 July 2008 between the Shareholders and the Operator (which replaced and amended the prior Shareholders Agreement dated 7 December 2007) as amended on 4 April 2013 and as amended pursuant to an addendum to be entered into on or about the Signing Date and delivered to the Intercreditor Agent pursuant to paragraph 5(a) of Schedule 2.

 

 

 
 

 

 

 

“Significant Safeguards and Social Non-Compliance”

means any Safeguards and Social Non-Compliance which:

 

(a)           is an intentional or reckless disregard of any specific prohibition, commitment or obligation set out in the Safeguards and Social Provisions;

 

(b)           has resulted in or is likely to result in significant, severe or irreversible damage or impact on the environment or damage, impact or harm to the lives, livelihood, quality of life, health, safety, security, property or cultural heritage of affected people; or

 

(c)           has or is likely to have a material and adverse impact on the reputation or business of a Senior Lender.

 

“Significant Safeguards and Social Reporting Event”

means:

 

(a)           the release of any Hazardous Substance on or from any property associated with the Project other than in accordance with the Safeguards and Social Provisions;

 

(b)           any unanticipated incident, accident or circumstance which has resulted in or is likely to result in significant, severe or irreversible damage or impact on the environment, or damage, impact or harm to the lives, livelihood, quality of life, health, safety, security, property or cultural heritage of affected people;

 

(c)           any incident or accident in connection with the Project resulting in death or significant injury;

 

(d)           any material explosion or fire at or on any property associated with the Project; and/or

 

(e)           any other grievance or claim by a party in relation to any of the foregoing which may materially prejudice the business, operations, financial or reputational standing of any Senior Finance Party.

 

“Signing Date”

means the date specified on the front page of this Agreement.

 

“Silangkitang Field”

means the geothermal reservoir in the area of the Project Site referred to as Silangkitang.

 

“Special Facilities”

has the meaning given to it in the ESC.

 

“Special Facilities Land”

means the land upon which the footings for the transmission towers forming part of the Special Facilities are located.

 

“Special Facilities ROW”

means the rights of way that permit access to:

 

(a)           the Special Facilities and Special Facilities Land (if required); and

 

(b)           the transmission lines, which form part of the Special Facilities, to pass over land owned by third parties.

 

 

 
 

 

 

 

“Special Facilities Taking Over Date”

has the meaning given to it in the ESC.

 

“Specified International Finance Institution”

means the African Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group and the World Bank Group.

 

 

“Sponsors”

means:

 

(a)           Itochu;

 

(b)          Kyushu;

 

(c)           Ormat;

 

(d)           Medco; and

 

(e)           each other person that becomes a Sponsor pursuant to Clause 8 (Ownership Restrictions) of an Equity Support Deed.

 

“Spot Rate of Exchange”

means:

 

(a)          with respect to the conversion of USD into Rupiah or Rupiah into USD, the IDR/USD exchange rate determined as the average of Bank Indonesia’s spot rates of exchange for buying and selling of USD with Rupiah or Rupiah with USD as published on its website for telegraphic transfer transaction rates at or about 11:00 a.m. (Jakarta time) on the date of conversion, provided that, if in any month, such rate does not appear on Bank Indonesia’s website for each day of such month, the USD/Rp exchange rate for buying and selling of USD with Rp or Rp with USD announced by Bank Indonesia at or about 11:00 a.m. (Jakarta time) on the relevant date will be used; and

 

(b)          with respect to the conversion of any other currency (the first currency) into USD, the spot rate of exchange for the purchase of USD with the first currency offered by the Intercreditor Agent at or about 11.00 a.m. Singapore time on the date of the conversion.

 

“Standard & Poor’s”

means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc.

 

“Subordinated Shareholder Loan”

has the meaning given to it in Clause 1.1 (Definitions) of each Equity Support Deed.

 

“Subordinated Shareholder Loan Agreement”

has the meaning given to it in each Equity Support Deed.

 

 

“Subordinated Shareholder Loan Assignment Agreements”

has the meaning given to it in each Equity Support Deed.

 

 

 
 

 

 

 

“Subrogation Rights”

has the meaning given to it in Clause 28.13 (Subrogation and Assignment).

 

“Subsequent Hedging Obligations”

means any Hedging Costs and Hedging Termination Sums payable or owing by the Borrower to any Hedging Counterparty under or in connection with any Hedging Transaction (including any novated or transferred Hedging Transaction) entered into (including by way of novation or transfer) after the Hedging Cut-Off Date.

 

“Subsidiary”

means, in relation to any company or entity, any company or entity:

 

(a)          which is controlled, directly or indirectly, by the first-mentioned company or entity;

 

(b)          of which more than fifty per cent. (50%) of the issued share capital or equivalent right of ownership is beneficially owned, directly or indirectly, by the first-mentioned company or entity; or

 

(c)          which is a subsidiary of another subsidiary (within this definition) of the first-mentioned company or entity, and, for these purposes, a company or entity is treated as being “controlled” by a company or entity if that other company or entity is able to direct its affairs and/or to control the composition of its board of directors or equivalent body, in each case, whether by contract or otherwise.

 

“Substantial Completion”

has the meaning given to it in the Power Plant Construction Contract.

 

“Substantial Completion Date”

has the meaning given to it in the Power Plant Construction Contract.

 

“Supplementary Lenders’ Information Package” or “SLIP”

means the set of document demonstrating the Project's substantive application of (and to the extent applicable, compliance with) the Equator Principles.

 

 

“Tax”

means any tax (including income tax and VAT), levy, duty, charge, impost, fee, deduction or withholding of any nature now or hereafter imposed, levied, collected, withheld or assessed by any taxing or other authority in any relevant jurisdiction and includes any interest, penalty or other charge payable or claimed in respect thereof, and “Taxation” shall be construed accordingly.

 

“Tax Credit”

has the meaning given to it in Clause 9.2 (Tax Credits).

 

“Tax Deduction”

means a deduction or withholding for or on account of Tax from a payment under a Senior Finance Document, other than a FATCA Deduction.

 

“Tax Payment”

means an increased payment made by the Borrower to the Senior Lender under Clause 9.1 (Tax gross-up) or a payment under Clause 25.2 (Tax Indemnity).

 

 

 
 

 

 

 

“Technical Assumptions”

means the assumptions set out in the Financial Model approved as a Condition Precedent to First Advance relating to technical matters as may be amended in accordance with Clause 18.1 (Financial Model).

 

“Technical Support Agreements”

means:

 

(a)           the Medco Technical Support Agreement;

 

(b)           the NAES Technical Support Agreement; and

 

(c)           the WestJEC Technical Support Agreement.

 

“Technical Support Agreement Providers”

means each of Medco ,NAES, and WestJEC

 

“Technical Support Agreements Termination Date”

means the date on which the NAES Technical Support Agreement and the WestJEC Technical Support Agreement terminates by expiry of its term (being, initially, at least two years after the Lenders’ Completion Date), as such term may be extended from time to time.

 

“Third Generating Unit”

means the fifth and sixth units to be installed and commissioned in accordance with the ESC with a combined Guaranteed Net Dependable Capacity of 107.7 MW and located at the Namora-I-Langit Field.

 

“Top-Up Advance”

has the meaning given to it in Clause 3.4 (Top-Up Advances).

 

“Top-Up Advance Commitment”

means the amount of USD21,871,721, which comprises part of the Total Commitment, as reduced or cancelled from time to time.

 

“Total Base Equity Commitment”

means USD352,738,432, which includes the Total Core Base Equity Commitment and the Total Top-Up Base Equity Commitment, and which comprises the aggregate of each “Base Equity Commitment” (as that term is defined in each Equity Support Deed).

 

“Total Commitment”

means the aggregate of the ADB Commitment, the JBIC Commitment and the Covered Lenders Commitment, being USD1,170,095,178 as at the Signing Date.

 

“Total Contingent Equity Commitment”

means USD93,612,938, which comprises the aggregate of each “Contingent Equity Commitment” (as that term is defined in each Equity Support Deed).

 

“Total Core Base Equity Commitment”

means USD343,484,892, which comprises the aggregate of each “Core Base Equity Commitment” (as that term is defined in each Equity Support Deed).

 

“Total Loss”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

“Total Top-Up Base Equity Commitment”

means the amount of USD9,253,540, which comprises the aggregate of each “Top-Up Base Equity Commitment” (as that term is defined in each Equity Support Deed).

 

 

 
 

 

 

 

“Transaction Documents”

means:

 

(a)           the Equity Documents;

 

(b)           the Project Documents; and

 

(c)           the Senior Finance Documents.

 

“Transaction Security”

means the Security Interests created under the Security Documents.

 

“Trust Accounts”

means:

 

(a)           the Disputed Amounts Trust Account; and

 

(b)           the General Trust Account.

 

“Trust Account Agreement”

means the trust agreement between PGE, the Borrower, the Trust Account Bank and the Trust Account Trustee entered or to be entered into with respect to the Trust Accounts.

 

“Trust Account Bank”

means the bank appointed as the trust account bank pursuant to the Trust Account Agreement and at the Signing Date means Union Bank, N.A.

 

Trust Account Consent Letter

means the direct agreement with respect to the Trust Account Agreement, entered or to be entered into by the Trust Account Trustee, the Trust Account Bank, PGE, the Borrower and the Offshore Security Agent.

 

“Trust Account Trustee”

means the trustee appointed pursuant to the Trust Account Agreement and at the Signing Date means Union Bank, N.A.

 

“Unit COD”

means, in respect of a Generating Unit, the date on which:

 

(a)          Substantial Completion for that Generating Unit has occurred in accordance with the provisions of the Power Plant Construction Contract, as certified by the Senior Lenders’ Technical Advisor;

 

(b)          the Unit Rated Capacity Test for that Generating Unit has been conducted in accordance with the ESC and which demonstrates that the Unit Rated Capacity of that Generating Unit is at least the Guaranteed Net Dependable Capacity for that Generating Unit; and

 

(c)           in respect of:

 

(i)            the First Generating Unit, either:

 

(A)           the Borrower has received:

 

(1)          three payments from PLN of the Electricity Charge by way of deposit into the relevant Project Account pursuant to the provisions of the Accounts Agreement;

 

 

 
 

 

 

 

 

(2)           such payments relate to three (3) invoices issued to PLN covering a period of at least two (2) months in the aggregate;

 

(3)           each payment reflects that the Borrower delivered and generated Electricity from the First Generating Unit representing at least ninety per cent (90%) of the Unit Rated Capacity of the First Generating Unit during the period covered by the invoices and that the portion of such payment so represented is undisputed by PLN; and

 

(4)           there were no Deemed Dispatch Kwhs (as defined in the ESC) during the period covered by the invoices; or (B)PLN has certified, in writing, that the Date of Commercial Generation of the First Generating Unit has occurred and that the Unit Rated Capacity of the First Generating Unit is not less than 83 MW; or

 

(ii)           in respect of each of the Second Generating Unit and the Third Generating Unit, either:

 

(A)           the Borrower has received:

 

(1)          one payment from PLN of the Electricity Charge by way of deposit into the relevant Project Account pursuant to the provisions of the Accounts Agreement;

 

(2)           such payment covers a period of at least one (1) month in the aggregate;

 

(3)           such payment reflects that the Borrower delivered and generated Electricity from the Second Generating Unit or the Third Generating Unit (as applicable) representing at least ninety per cent (90%) of the Unit Rated Capacity of the Second Generating Unit or the Third Generating Unit (as applicable) during the period covered by that invoice and that the portion of such payment so represented is undisputed by PLN; and

 

(4)           there were no Deemed Dispatch Kwhs (as defined in the ESC) during the period covered by that invoice; or (B)PLN has certified, in writing, that the Date of Commercial Generation of the Second Generating Unit or the Third Generating Unit (as applicable) has occurred.

 

 

 
 

 

 

 

“Unit COD Sunset Date”

means: 

 

(a)           in relation to the First Generating Unit:

 

(i)            with respect to the requirements set out in paragraphs (a) and (b) of the definition of “Unit COD” such requirements apply to the First Generating Unit, the date which is 32 months after the NTP Date; and

 

(ii)           with respect to the requirements set out in paragraph (c) of the definition of “Unit COD” as such requirements apply to the First Generating Unit, the date which is 34 months after the NTP Date;

 

(b)           in relation to the Second Generating Unit, the date which is 43 months after the NTP Date; and

 

(c)           in relation to the Third Generating Unit, the date which is 49 months after the NTP Date.

 

“Unit Rated Capacity”

means, in relation to a Generating Unit, the actual net kilowatt generating capacity achieved during the Unit Rated Capacity Test of such Generating Unit measured at the Unit Metering Point (as that term is defined in the ESC) and determined by the Unit Rated Capacity Test.

 

“Unit Rated Capacity Test”

has the meaning given to it in the ESC.

 

“US”

means the United States of America.

 

“USD” or “Dollars”

means the lawful currency of the United States of America.

 

“US PPI”

means, in respect of any adjustment to be made in any year, the U.S. Producer Price Index for Metals and Metal Products Index, published by the U.S. Department of Labor, Bureau of Labor Statistics, Producer Prices and Price Indexes, Series ID WPU10 for the year preceding the year for which such adjustment is to be made; provided that if such index as published from time to time is unavailable, the US PPI shall mean the index, in substance similar thereto, selected by the Intercreditor Agent (acting reasonably) in consultation with the Borrower and the Senior Lenders’ Technical Advisor.

 

 

 
 

 

 

 

“VAT Receivables”

means any net amounts payable by a Governmental Authority to the Borrower in accordance with Applicable Law on account of reimbursement of VAT amounts paid by the Borrower; provided that, when determining the projected amount of VAT Receivables for the purpose of the definition of Project Cash Flow Available for Debt Service in Clause 1.1 (Definitions), (i) the assumptions used to determine such amount shall have been agreed between the Borrower and the Senior Lenders’ Model Auditor (for the purposes of the Financial Model) or the Intercreditor Agent (for all other purposes) from time to time and (ii) each such amount shall be determined by the Borrower in good faith, on reasonable grounds, and in a manner consistent with those assumptions.

 

“Well Maintenance and Drilling Expenses”

means expenditure for:

 

(a)          maintenance of the geothermal wells; and

 

(b)          drilling of make-up wells and/or workovers of geothermal wells.

 

“Well Maintenance and Drilling Projection”

has the meaning given to it in Clause 18.8(a) (Well Maintenance and Drilling Projection).

 

 

“Well Maintenance and Drilling Reserve Account”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

 

“Well Maintenance and Drilling Reserve Requirement”

has the meaning given to it in Clause 1.1 (Definitions) of the Accounts Agreement.

 

 

“Well Testing Facilities”

has the meaning given to it in the Initial Drilling Contract.

 

“WestJEC”

means West Japan Engineering Consultants, Inc..

 

WestJEC Direct Agreement” 

means the direct agreement with respect to the WestJEC Technical Support Agreement, entered or to be entered into by WestJEC, the Operator and the Offshore Security Agent.

 

“WestJEC Technical Support Agreement”

means the agreement entered or to be entered into by the Operator and WestJEC in connection with the provision of engineering consultancy services to the Project.

 

“Works”

means:

 

(a)          in the case of the Power Plant Supply Contract, the “Supply Works” (as defined in the Power Plant Supply Contract);

 

(b)          in the case of the Power Plant Construction Contract, the “Construction Works” (as defined in the Power Plant Construction Contract); and

 

(c)          in the case of the Coordination Agreement, the “Works” (as defined in the Coordination Agreement).

  

 

 
 

 

 

 

1.2

Construction

 

In this Agreement, unless the context requires otherwise, any reference to:

 

“amendment”

includes a supplement, novation, extension (whether of maturity or otherwise), restatement or re-enactment or replacement, however fundamental and whether or not more onerous and “amended” will be construed accordingly;

 

“approved”

means, when used with reference to any Drilling Program, Financial Model, Debt Service Coverage Ratio Statement, Operating Plan and Budget, Plant Maintenance Projection, Project Budget, Project Schedule or Well Maintenance and Drilling Projection, that such model, statement, plan and budget, projection or schedule has become final and binding on the Parties in accordance with the relevant provisions of this Agreement;

 

“asset”

includes any present or future asset, revenue, property or right and includes uncalled capital;

 

“authorisation”

includes any approval, consent, licence, permit, franchise, permission, registration, resolution, direction, declaration or exemption;

 

“certified copies”

means a certificate signed by an Authorised Representative of a person attaching a copy of one or more documents and confirming that such copy is a true, complete, current and accurate copy of the relevant document(s) and that such document(s) remain unamended and in full force and effect as of the date of such certificate;

 

“enforce”

together with all grammatical variations thereof, includes all methods of enforcement or suit and, when used in the context of a Senior Secured Party enforcing rights under or in connection with the Senior Finance Document, includes the exercise of any Remedies;

 

“including” or “includes”

means including or includes without limitation;

 

“indebtedness”

includes any obligation for the payment or repayment of money, whether present or future, actual or contingent, and whether incurred as principal or as surety;

 

“law” or “regulation”

includes any constitutional provision, treaty, convention, statute, act, law, directive, decree, ordinance, subsidiary or subordinate legislation, order, rule or regulation having the force of law and any rule of civil or common law or equity;

 

 

 
 

 

 

 

“order”

includes any judgment, injunction, decree, determination or award of any court, arbitration or administrative tribunal;

 

“person”

includes any individual, company, body corporate or unincorporate or other juridical person, partnership, firm, joint venture or trust or any federation, state or subdivision thereof or any government or agency of any of the foregoing;

 

“projected”

means, where used in the context of calculating or projecting an amount for the purpose of determining a Projected Debt Service Coverage Ratio for a Calculation Date, that the amount is calculated in accordance with the approved Debt Service Coverage Ratio Calculation Statement for that Calculation Date; and

 

“subsisting” or “subsists”

means:

 

(a)          with respect to any Potential Event of Default, that such Potential Event of Default is not remedied and is unwaived; or

 

(b)          with respect to any Event of Default, that:

 

(i)            such Event of Default is not remedied to the satisfaction of the Intercreditor Agent, provided that this paragraph (i) shall not apply if and to the extent that any Senior Lender has commenced the enforcement of any of its rights under or in connection with the Senior Finance Documents; or

 

(ii)           such Event of Default is unwaived.

  

1.3

Successors and Assigns

 

A reference to a person includes, where the context permits, its permitted successors and permitted assigns and any person or persons deriving title therefrom.

 

1.4

Miscellaneous

 

In this Agreement, unless the context requires otherwise:

 

 

(a)

Statutes: references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced from time to time;

 

 

(b)

Construction: words importing the singular include the plural and vice versa; words importing a gender include the other gender;

 

 

(c)

Transaction Documents: references to this Agreement or any other Transaction Document shall be construed as references to this Agreement or such document as the same may be amended, supplemented, restated or novated from time to time, but only if and to the extent permitted by the Senior Finance Documents;

 

 

 
 

 

 

 

 

(d)

Clauses, Etc: references to Clauses, paragraphs, Schedules and Appendices are to Clauses or paragraphs of and Schedules and Appendices to this Agreement and references to this Agreement include its Schedules and Appendices;

 

 

(e)

Headings: Clause headings are inserted for reference only and shall be ignored in construing this Agreement;

 

 

(f)

Calculations: unless otherwise expressly provided in the Senior Finance Documents, where a Senior Finance Document:

 

 

(i)

specifies that amounts in any currency are required to be converted into any other currency for the purposes of any calculation, the party performing such calculation or conversion shall use the Spot Rate of Exchange on the date of the calculation or conversion, or such other rate as the Intercreditor Agent and the Borrower shall otherwise agree in writing; and

 

 

(ii)

specifies an amount in a particular currency or its equivalent (or similar), the equivalent (or similar) of the particular currency is a reference to the amount of any other currency or currencies which, when converted into the particular currency utilising the Spot Rate of Exchange on the date of conversion or such other rate as the Intercreditor Agent and the Borrower agree in writing, is equal to the relevant amount in the particular currency.

 

 

(g)

Intercreditor Agent approvals: references to something requiring the approval of the Intercreditor Agent or being satisfactory to the Intercreditor Agent, or similar, means that the Intercreditor Agent must, subject to the applicable provisions of the Intercreditor Deed, Clause 22 (The Agents and Security) and the other Senior Finance Documents, give its approval or confirm its satisfaction or similar (as the case may be) in writing.

 

 

(h)

Ratings: references to ratings of Moody’s or Standard & Poor’s shall be construed as references to those ratings as may be replaced by Moody’s or Standard & Poor’s equivalent rating schemes from time to time.

 

1.5

Third Party Rights

 

Unless expressly provided to the contrary in a Senior Finance Document, a person who is not a party to a Senior Finance Document may not enforce any of its terms under the Contract (Right of Third Parties) Act 1999. Notwithstanding any term of any Senior Finance Document, no consent of any third party is required for any amendment to any provision of a Senior Finance Document.

 

1.6

Effect as a Deed

 

This Agreement shall take effect as a deed notwithstanding that it may not have been executed as a deed by one or more Parties.

 

1.7

Supremacy

 

With respect to the Parties, in the event of any conflict between the provisions of this Agreement and the provisions of any other Senior Finance Document or the Financial Model, this Agreement shall prevail, except that:

 

 

(a)

in the case of any conflict between the provisions of this Agreement and the provisions of any Senior Facility Agreement, the provisions of such Senior Facility Agreement shall prevail as between the persons party thereto;

 

 

 
 

 

 

 

 

(b)

as between the Parties, the Accounts Agreement shall prevail over this Agreement as to matters dealt with in the Accounts Agreement; and

 

 

(c)

the Intercreditor Deed shall prevail over this Agreement and each other Senior Finance Documents in relation to matters dealt with in the Intercreditor Deed.

 

1.8

Joint and Several Obligations

 

 

(a)

Each Borrower Entity shall be jointly and severally liable as the Borrower for the performance of each Borrower Entity’s obligations under the Senior Finance Documents to which any Borrower Entity is party.

 

 

(b)

For the purposes of the Senior Finance Documents, if one or more (but not all) Borrower Entities are aware of an event or circumstance, all Borrower Entities shall be considered to be aware of such event or circumstance.

 

1.9

Borrower Entities’ Agent

 

 

(a)

Each Borrower Entity (other than the Operator) by its execution of this Agreement irrevocably appoints the Operator (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Senior Finance Documents and irrevocably authorises:

 

 

(i)

the Operator on its behalf to supply all information concerning itself contemplated by the Senior Finance Documents to the Senior Finance Parties and to give all notices and instructions (including Drawdown Notices), to execute on its behalf any deed of accession, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Borrower Entity notwithstanding that they may affect the Borrower Entity, without further reference to or the consent of that Borrower Entity; and

 

 

(ii)

each Senior Finance Party to give any notice, demand or other communication to that Borrower Entity pursuant to the Senior Finance Documents to the Operator,

 

and in each case the Borrower Entity shall be bound as though the Borrower Entity itself had given the notices and instructions (including any Drawdown Notice) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

 

 

(b)

Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Operator or given to the Operator under any Senior Finance Document on behalf of another Borrower Entity or in connection with any Senior Finance Document (whether or not known to any Borrower Entity and whether occurring before or after such other Borrower Entity became an Borrower Entity under any Senior Finance Document) shall be binding for all purposes on that Borrower Entity as if that Borrower Entity had expressly made, given or concurred with it. No Borrower Entity other than the Operator may make any claim or determination under or with respect to the Senior Finance Documents. In the event of any conflict between any notices or other communications of the Operator and any other Borrower Entity, those of the Operator shall prevail.

 

 

 
 

 

 

 

2.

The Senior Facilities

 

2.1

Statement of Commitment

 

Subject to the terms and conditions of this Agreement and the other Senior Finance Documents:

 

 

(a)

JBIC agrees to provide:

 

 

(i)

the JBIC Facility to the Borrower; and

 

 

(ii)

the EPRG to the Covered Lenders in respect of the Covered Lenders Facility;

 

 

(b)

ADB, in its individual capacity, agrees to provide ADB Tranche A to the Borrower;

 

 

(c)

ADB, not in its individual capacity but solely in its capacity as an implementing entity of the Clean Technology Fund, agrees to provide ADB Tranche B to the Borrower;

 

 

(d)

ADB, not in its individual capacity but solely in its capacity as an implementing entity of the Canadian Climate Fund for the Private Sector in Asia under the Clean Energy Financing Partnership Facility (established by the Government of Canada), agrees to provide ADB Tranche C to the Borrower; and

 

 

(e)

the Covered Lenders agree to provide the Covered Lenders Facility to the Borrower.

 

2.2

Nature of a Senior Finance Party’s Rights and Obligations

 

 

(a)

The obligations of a Senior Finance Party under the Senior Finance Documents are several. Failure of a Senior Finance Party to carry out those obligations does not relieve any other Party of its obligations under the Senior Finance Documents. No Senior Finance Party is responsible for the obligations of any other Senior Finance Party under the Senior Finance Documents.

 

 

(b)

The rights of a Senior Finance Party under the Senior Finance Documents are separate and independent rights. A Senior Finance Party may, except as otherwise stated in the Senior Finance Documents, separately enforce those rights.

 

 

(c)

A debt arising under the Senior Finance Documents to a Senior Finance Party is a separate and independent debt.

 

2.3

Drawdowns

 

 

(a)

The conditions to the drawdown of each Advance under a Senior Facility are set out in this Agreement and the Senior Facility Agreement under which the Advance is to be made.

 

 

(b)

The Borrower may only deliver a Drawdown Notice requesting an Advance under a:

 

 

(i)

Senior-1 Facility if it also delivers a Drawdown Notice requesting an Advance under each other Senior-1 Facility; and

 

 

(ii)

Senior-2 Facility if it also delivers a Drawdown Notice requesting an Advance under the other Senior-2 Facility.

 

 

(c)

Advances under the:

 

 

 
 

 

 

 

 

(i)

Senior-1 Facilities shall be made pro rata as between the Senior-1 Facilities, calculated on the basis of the aggregate Commitments of the Senior Lenders under the Senior-1 Facilities; and

 

 

(ii)

Senior-2 Facilities shall be made pro rata among the Senior-2 Facilities, calculated on the basis of the aggregate Commitments of the Senior Lenders under the Senior-2 Facilities.

 

 

(d)

The Borrower must, in the first Drawdown Notices to be delivered pursuant to the Senior Finance Documents, request:

 

 

(i)

an Advance to be made under the Senior-2 Facilities in an amount equal to the aggregate Commitment under the Senior-2 Facilities; and

 

 

(ii)

Advances to be made under the Senior-1 Facilities in amounts determined by the Borrower, subject to compliance with the provisions of the Senior Finance Documents.

 

 

(e)

The Borrower acknowledges that each of the Senior Lenders, the Intercreditor Agent, the Covered Lenders Facility Agent and the JBIC Facility Agent may set-off from any Advance under the Senior Facilities the amount of any customary bank charges and fees (including transfer fees) and make available to the Borrower the net amount after deducting such charges and fees from such drawdown.

 

2.4

Purpose

 

 

(a)

Unless otherwise agreed by the Intercreditor Agent but subject to the terms and conditions of the Senior Facility Agreements and the following paragraphs of this Clause 2.4, the Borrower shall apply the proceeds of each Advance exclusively towards the payment of Project Costs incurred or to be incurred in accordance with the most recent approved Project Budget.

 

 

(b)

The Borrower shall not be entitled to request an Advance for the purpose of funding:

 

 

(i)

the payment of Pre-Completion Make-Up Well Capital Costs;

 

 

(ii)

the Plant Maintenance Reserve Account; or

 

 

(iii)

the Well Maintenance and Drilling Reserve Account; or

 

 

(iv)

the Borrower’s working capital requirements.

 

 

(c)

The Borrower may only request in a Drawdown Notice all or any part of an Advance to fund Pre-Completion Operating Costs if and to the extent such Advance is a Top-Up Advance which it is permitted to request pursuant to Clause 3.4 (Top-Up Advances).

 

 

(d)

Notwithstanding anything to the contrary in the Senior Finance Documents and unless the Intercreditor Agent otherwise agrees, if there is a Force Majeure Event continuing as at the date on which a Senior Lender is required to participate in any Advance, then, unless the Intercreditor Agent has confirmed in writing to the Borrower that the Senior Lenders’ Technical Advisor and/or the Senior Lenders’ Reserves Consultant has certified to the Intercreditor Agent that the Force Majeure Event (i) is unlikely to continue for more than seven (7) continuous days in total or (ii) is unlikely to have a material and adverse effect (including in terms of delay and cost) on the implementation on the Project, each Senior Lender shall only be obliged to fund its participation in that portion of the Advance which the Intercreditor Agent determines is equal to the amount of Project Costs intended to be funded by the proceeds of the Advance (taking into account the portion of such Project Costs required to be funded by the proceeds of any Equity pursuant to the Senior Finance Documents) which, as at the date of the making of such Advance, is due and payable but unpaid.

 

 

 
 

 

 

 

 

(e)

The Parties acknowledge and agree that no Advance may be requested or drawn by the Borrower to pay or reimburse the payment of any Project Costs if and to the extent that the amount of the Total Base Equity Commitment or the Total Contingent Equity Commitment has been reduced by the amount of, and on account of the payment of, such Project Costs.

 

2.5

Availability Period

 

 

(a)

Subject to the terms and conditions of this Agreement and the relevant Senior Facility Agreements, the Borrower may only deliver a Drawdown Notice if the Drawdown Date for the relevant Advance is a Business Day falling within the Availability Period.

 

 

(b)

Any balance of the Total Commitment that remains undrawn, and in respect of which no Drawdown Notice has been delivered, at close of business on the last day on which a Drawdown Notice is permitted to be delivered under this Agreement and the relevant Senior Facility Agreement, shall be automatically cancelled on the last day of the Availability Period.

 

2.6

Payment of Advances

 

The proceeds of all Advances must be deposited into the Onshore Disbursement Account, for application in accordance with Clause 3.1 (Onshore Disbursement Account) of the Accounts Agreement.

 

3.

Conditions Precedent

 

3.1

Conditions Precedent to Delivery of First Drawdown Notices

 

The Borrower may not deliver the First Drawdown Notices unless and until the Intercreditor Agent has notified the Borrower and the Senior Lenders no later than:

 

 

(a)

ten (10) days on which banks are generally open for business in Tokyo, Japan before the Drawdown Date of the Advances to be made under the Senior-1 Facilities as specified in the relevant First Drawdown Notices; and

 

 

(b)

four (4) days on which banks are generally open for business in Manila and New York before the Drawdown Date of the Advances to be made under the Senior-2 Facilities as specified in the relevant First Drawdown Notices,

 

that all the documents and evidence set out in Part A of Schedule 2 (Documentary Conditions Precedent) have been received in form and substance satisfactory to the Intercreditor Agent (or waived by the Intercreditor Agent) and all other conditions set out in Part A of Schedule 2 (Documentary Conditions Precedent) have been satisfied (or waived by the Intercreditor Agent).

 

 

 
 

 

 

 

3.2

Conditions Precedent to all Advances

 

The obligation of a Senior Lender to participate in any Advance is subject to the further conditions precedent that:

 

 

(a)

a duly executed and completed Drawdown Notice in the form set out in the relevant Senior Facility Agreement has been delivered to the Intercreditor Agent in respect of such Advance, which Drawdown Notice attaches all the documents and evidence set out in, and which satisfies the requirements of, Part B of Schedule 2 (Documentary Conditions Precedent);

 

 

(b)

on both the date of the Drawdown Notice and the Drawdown Date for the Advance:

 

 

(i)

the representations and warranties in Clause 13 (Representations and Warranties) to be repeated on such dates pursuant to Clause 13.29(b) (Time for Making Representations and Warranties) and any representations and warranties set out in any Senior Facility Agreement which are to be made on those dates are true and correct and will be true and correct, in each case (other than with respect to the representations and warranties set out in Clause 13.23 (Environmental and Social Requirements), Clause 13.25 (Business Practices) and in any Senior Facility Agreement) in all material respects, immediately after the Advance is made;

 

 

(ii)

no Default is subsisting or will result from the making of the Advance;

 

 

(iii)

all additional conditions precedent then required under the relevant Senior Facility Agreement for the making of that Advance have been satisfied in accordance with the provisions of that Senior Facility Agreement;

 

 

(iv)

no notice has been delivered to the Borrower in accordance with the terms of this Agreement requiring the Borrower to make any mandatory prepayment of all Senior Loans outstanding and the Borrower is not otherwise required pursuant to this Agreement to make any mandatory prepayment of all Senior Loans outstanding;

 

 

(v)

each of the representations and warranties set out in Clause  9  (Representations and Warranties) of each Equity Support Deed to be repeated on such dates pursuant to Clause 9.18 (Time for making representations and warranties) of each Equity Support Deed, are true and correct and will be true and correct, in each case (other than with respect to the representations and warranties in Clause 9.14 (Business Practices) of the Equity Support Deed) in all material respects, immediately after the Advance is made;

 

 

(vi)

there is no Forecast Funding Shortfall outstanding; and

 

 

(vii)

all fees, costs and expenses then due and payable to any Senior Finance Party or its advisors shall have been paid (other than those fees, costs and expenses to be paid from the proceeds of the relevant Advance, which shall be paid from the proceeds of such Advance); and

 

 

(c)

in respect of the First Advance only:

 

 

(i)

delivery of evidence (in form and substance satisfactory to the Intercreditor Agent) of the receipt by each Reinsurer of a written notice of the Security Interests effected pursuant to the Security Documents in the Reinsurance issued by it to the Intercreditor Agent at least one Business Day before the First Drawdown Date; and

 

 

(ii)

if the Intercreditor Agent provides its consent pursuant to paragraph 4(c)(ii) (Security) of Part A of Schedule 2 (Documentary Conditions Precedent) delivery of:

 

 

 
 

 

 

 

 

(A)

evidence (in form and substance satisfactory to the Intercreditor Agent acting on the instructions of all of the Senior Lenders) of the registration of each fiduciary Security Interest created pursuant to any Onshore Security Document; and

 

 

(B)

a legal opinion or supplementary legal opinion (in form and substance satisfactory to the Intercreditor Agent acting on the instructions of all of the Senior Lenders) issued by Ali Budiardjo, Nugroho, Reksodiputro, Indonesian legal counsel to the Senior Finance Parties and addressed to the Senior Finance Parties,

 

to the Intercreditor Agent at least one Business Day before the First Drawdown Date.

 

3.3

Hedging Agreements

 

The obligation of a Senior Lender to participate in the First Advance is subject to the condition that all Hedging Agreements are complete and in full force and effect.

 

3.4

Top-Up Advances

 

The Borrower may only request one or more Advances (each, a “Top-Up Advance”) which would, on the Drawdown Date of the Top-Up Advance, result in the aggregate principal amount of Senior Loans outstanding exceeding the Senior Debt Provisional Limit, if:

 

 

(a)

Equity Contributions drawn under:

 

 

(i)

the Total Base Equity Commitment have been made such that the Total Base Equity Commitment has been fully drawn, excluding with respect to the Total Top-Up Base Equity Commitment; and

 

 

(ii)

the Total Contingent Equity Commitment have been made such that the Total Contingent Equity Commitment has been fully drawn,

 

and the proceeds of such Equity Contributions have been applied in or towards the payment of Project Costs;

 

 

(b)

the Borrower has received or is entitled to receive not less than six (6) Business Days prior to the relevant Drawdown Date and pursuant to the Equity Support Deeds, Equity Contributions drawn or to be drawn (as the case may be) under the Total Top-Up Base Equity Commitment in an amount which, immediately after the Top-Up Advance is made, will result in the ratio of the amount of such Equity Contributions to the amount of such Top-Up Advance being equal to the ratio of the Top-Up Advance Commitment to the Total Top-Up Base Equity Commitment;

 

 

(c)

the proceeds of the Top-Up Advance are applied to fund the payment of Pre-Completion Operating Costs;

 

 

(d)

there are or there are reasonably likely to be insufficient funds standing to the credit of the Pre-Completion Operating Account to fund such Pre-Completion Operating Costs; and

 

 

(e)

the other applicable terms and conditions in the Senior Finance Documents with respect to the requesting and making of Advances are satisfied.

 

 

 
 

 

 

 

4.

Repayment

 

The Borrower must repay each Senior Loan advanced under a Senior Facility by way of making Repayment Instalments on Repayment Dates in accordance with the relevant provisions set out in the Senior Facility Agreement under which that Senior Loan was advanced.

 

5.

Cancellation and Prepayment

 

5.1

Cancellation

 

 

(a)

Subject to the terms of this Agreement, the Borrower may, by giving not less than sixty (60) days’ prior notice to the Intercreditor Agent, cancel the undrawn Total Commitment in whole or in part (but, if in part, in a minimum amount of USD10,000,000).

 

 

(b)

The Borrower may not cancel all or any part of the Total Commitment unless it delivers to the Intercreditor Agent a certificate signed by two directors of the Operator, both at the time it delivers a cancellation notice under paragraph (a) above and on the date which is five (5) Business Days before the cancellation takes effect, confirming (with supporting details) that immediately after the cancellation:

 

 

(i)

the aggregate Available Funding at that time;

 

will exceed:

 

 

(ii)

the aggregate of:

 

 

(A)

the Projected Project Costs at that time; and

 

 

(B)

the amount of contingencies appropriate in order to enable the Borrower to achieve the Lenders’ Completion Date by the Lenders’ Completion Sunset Date.

 

 

(c)

The Borrower may not cancel all or any part of the Total Commitment unless the Intercreditor Agent confirms to the Borrower that it agrees with the content of each certificate delivered under paragraph (b) above.

 

 

(d)

Any cancellation under paragraph (a) above shall be made on a pro rata basis (calculated by reference to each Senior Lender’s portion of the aggregate of the Total Commitment and the Participations under the Senior Facilities).

 

 

(e)

The Borrower shall pay all amounts payable under Clause 25.3 (Other Indemnities) at the time of any cancellation of the undrawn portion of any Commitment.

 

5.2

Voluntary Prepayment

 

 

(a)

Subject to the other terms of this Agreement, at any time after the end of the Availability Period, the Borrower may, by giving not less than sixty (60) days’ prior written notice to the Intercreditor Agent, prepay any Senior Loans outstanding in whole or in part (but, if in part, in a minimum amount of USD10,000,000 and in integral multiples of USD1,000,000 in excess thereof).

 

 

(b)

The Borrower may not make any prepayment under paragraph (a) above prior to the Lenders’ Completion Date unless it delivers to the Intercreditor Agent a certificate signed by two directors of the Operator, both at the time it delivers a prepayment notice under paragraph (a) above and on the date which is five (5) Business Days before the prepayment is to be made, confirming (with supporting details) that immediately after the prepayment is to be made:

 

 

 
 

 

 

 

 

(i)

the aggregate Available Funding at that time;

 

will exceed:

 

 

(ii)

the aggregate of:

 

 

(A)

the Projected Project Costs at that time; and

 

 

(B)

the amount of contingencies appropriate in order to enable the Borrower to achieve the Lenders’ Completion Date by the Lenders’ Completion Sunset Date.

 

 

(c)

The Borrower may not make any prepayment under paragraph (a) above unless the Intercreditor Agent confirms to the Borrower that it agrees with the content of each certificate delivered under paragraph (b) above.

 

 

(d)

Any prepayment under paragraph (a) above shall be applied in prepayment of the Senior Loans then outstanding on a pro rata basis (calculated by reference to each Senior Lender's portion of the aggregate of the Total Commitment and the Participations under the Senior Facilities) and be applied against the remaining Repayment Instalments in inverse order of maturity.

 

5.3

Mandatory Prepayments

 

 

(a)

Insurance Proceeds; Compensation and Other Proceeds

 

Unless the Intercreditor Agent agrees otherwise, the Borrower shall, following:

 

 

(i)

the occurrence of any event specified in Clause 3.14(f) (Insurance Proceeds Account) of the Accounts Agreement;

 

 

(ii)

receipt of any Performance Liquidated Damages;

 

 

(iii)

receipt of any ESC Buyout Payments;

 

 

(iv)

receipt of any Expropriation Proceeds,

 

 

(v)

receipt of net proceeds in respect of the Disposal of any assets in any calendar year which have an aggregate value in excess of USD1,000,000 and which are not applied within sixty (60) days of such receipt to purchase reasonably adequate substitutes, other than any Disposals which constitute Permitted Disposals under paragraphs (a), (b), (d) or (e) of the definition of Permitted Disposals,

 

apply:

 

 

(A)

if paragraph (a)(i) above applies, all amounts standing to the credit of the Insurance Proceeds Account in or towards prepayment of the Senior Loans outstanding by applying such amounts against the remaining Repayment Instalments in inverse order of maturity;

 

 

(B)

all amounts received under paragraph (a)(ii) above in or towards prepayment of the Senior Loans outstanding by applying the amount received against the remaining Repayment Instalments on a pro rata basis; and

 

 

 
 

 

 

 

 

(C)

all amounts received under paragraphs (a)(iii), (a)(iv) and (a)(v) above in or towards prepayment of the Senior Loans outstanding by applying such amounts against the remaining Repayment Instalments in inverse order of maturity.

 

The Borrower shall apply all amounts which are referred to in this paragraph in or towards prepayment of the Senior Loans outstanding on the Interest Payment Date immediately after the date of the receipt of the relevant amount.

 

 

(b)

Cash Sweep Mechanism

 

 

(i)

If, on any Calculation Date, the Historic Debt Service Coverage Ratio for that Calculation Date for each of:

 

 

(A)

the Calculation Period ending on (and including) that Calculation Date; and

 

 

(B)

the Calculation Period ending on (and including) the day immediately before the Calculation Period referred to in paragraph (A) above commenced,

 

is less than 1.25:1, then the Borrower shall apply all amounts standing to the credit of the Offshore General Account, after all amounts required to be paid under Clause 3.4(c)(i) to Clause 3.4(c)(xi) (inclusive) (Offshore General Account) of the Accounts Agreement have been paid in accordance with those provisions, in or towards prepayment of the Senior Loans outstanding under the Senior-1 Facilities.

 

 

(ii)

Any prepayment pursuant to paragraph (i) above shall be:

 

 

(A)

made by the Borrower on the relevant Calculation Date; and

 

 

(B)

applied against the remaining Repayment Instalments of the relevant Senior Loans in inverse order of maturity.

 

 

(c)

Illegality

 

 

(i)

If, as a result of a Change in Law, it becomes unlawful in any relevant jurisdiction for any Senior Lender to perform any of its obligations under a Senior Finance Document or to fund or maintain its Participation in any Senior Loan, then:

 

 

(A)

that Senior Lender may notify the Borrower through its Facility Agent or the Intercreditor Agent (as appropriate) accordingly; and

 

 

(B)

if such unlawfulness relates to:

 

 

(1)

the maintenance of a Participation in a relevant Senior Loan, the Borrower shall prepay, without premium or penalty, the affected Senior Loan outstanding together with interest accrued thereon, Breakage Costs (if applicable) and any other amounts payable by the Borrower to such Senior Lender under the Senior Finance Documents; or

 

 

 
 

 

 

 

 

(2)

the making available of all or any part of that Senior Lender’s Commitment, the Commitment of such Senior Lender will forthwith be cancelled without premium or penalty.

 

 

(ii)

All prepayments under paragraph (i) above shall be made:

 

 

(A)

on the Interest Payment Date immediately following the occurrence of the relevant event; or

 

 

(B)

if earlier, the date specified by the relevant Senior Lender in the notice delivered under paragraph (i)(A) above (being no earlier than the last day of any applicable grace period permitted by Applicable Law).

 

 

(d)

Debt to Equity Ratio

 

 

(i)

If the Debt to Equity Ratio at the Lenders’ Completion Date exceeds the Maximum Debt to Equity Ratio, the Borrower shall prepay the Senior Loans outstanding in an amount which would result in the Debt to Equity Ratio on the day immediately following such prepayment being equal to the Maximum Debt to Equity Ratio.

 

 

(ii)

The Borrower shall make any prepayment which it is required to make under paragraph (i) above:

 

 

(A)

on the Lenders’ Completion Date (if it falls on an Interest Payment Date) or (if the Lenders’ Completion Date does not fall on an Interest Payment Date) the first Interest Payment Date falling after the Lenders’ Completion Date;

 

 

(B)

by utilising funds standing to the credit of the Offshore Construction and Supply Account (and no other Project Account); and

 

 

(C)

by applying the amount prepaid against the remaining Repayment Instalments of the Senior Loans on a pro rata basis.

 

5.4

Miscellaneous Provisions

 

 

(a)

Any notice of prepayment or cancellation under this Agreement is irrevocable.

 

 

(b)

All prepayments under this Agreement shall be made together with:

 

 

(i)

accrued interest on the amount prepaid up to and, if the relevant Senior Lender receives cleared funds on a day after the time specified in the relevant Senior Facility Agreement by which payments to that Senior Lender must be received, including, the date of such prepayment;

 

 

(ii)

all Breakage Costs incurred by each relevant Senior Lender with respect to the prepayment of a Floating Rate Senior Loan, if such prepayment is made on a day that is not an Interest Payment Date; and

 

 

(iii)

all Hedging Termination Sums (if any) payable in connection with the prepayment due to the operation of Clause 14.4 (Notional Amount Reductions).

 

 

(c)

Upon making any prepayment under Clause 5.2 (Voluntary Prepayment), the Borrower shall, in respect of the Senior Facilities, pay to the relevant Senior Lenders any prepayment fee specified in the Senior Facility Agreement to which that Senior Lender is a party.

 

 

 
 

 

 

 

 

(d)

The Borrower shall pay on or prior to the date on which any cancellation is made pursuant to Clause 5.1 (Cancellation) all Hedging Termination Sums (if any) payable in connection with the cancellation due to the operation of Clause 14.4 (Notional Amount Reductions).

 

 

(e)

No prepayment or cancellation is permitted except in accordance with the express terms of this Agreement.

 

 

(f)

No amount of any Commitment cancelled under this Agreement may subsequently be reinstated.

 

 

(g)

No amount prepaid under this Agreement may subsequently be re-borrowed.

 

 

(h)

Any failure by the Borrower to obtain any authorisation (including any approval from Bank Indonesia) in relation to its obligations to make any prepayment, repayment or payment under any Senior Finance Document shall not alter, change or mitigate in any way the Borrower’s obligation to make any such prepayment, repayment or payment.

 

 

(i)

Any certificate prepared by a Senior Lender of the amounts due and payable by the Borrower in respect of any prepayment or cancellation under this Clause 5 (Cancellation and Prepayment) shall, in the absence of manifest error, be conclusive evidence of the matters to which it relates.

 

6.

Interest Periods

 

6.1

Duration

 

 

(a)

Subject to the following provision of this Clause 6 (Interest Periods), the Interest Period for each Senior Loan shall begin on (and include) an Interest Payment Date and end on (and include) the day immediately before the next following Interest Payment Date, except that the first Interest Period for each Senior Loan shall begin on (and include) the date on which that Senior Loan is made and end on (and include) the day immediately before the next following Interest Payment Date.

 

 

(b)

If an Interest Period for a Senior Loan would otherwise overrun:

 

 

(i)

the First Repayment Date, it shall be shortened so that it ends on the First Repayment Date; or

 

 

(ii)

the Final Maturity Date, it shall be shortened so that it ends on the Final Maturity Date.

 

6.2

Non-Business Days

 

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period shall instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

6.3

Consolidation of Senior Loans

 

Subject to the terms of the Senior Facility Agreements, if the Interest Periods for more than one Senior Loan made to the Borrower under any Senior Facility end on the same date, those Senior Loans will be consolidated into, and treated as, a single Senior Loan under that Senior Facility on the last day of the Interest Period.

 

 

 
 

 

 

 

6.4

Other Adjustments

 

The Intercreditor Agent, the Facility Agents, ADB and the Borrower may enter into such other arrangements as they may agree for the adjustment of Interest Periods and/or the splitting of the Senior Loans.

 

7.

Interest

 

7.1

Interest Rate

 

 

(a)

The rate of interest on each Senior Loan for each of its Interest Periods is the rate per annum specified for such Senior Loan in the Senior Facility Agreement under which such Senior Loan was made.

 

 

(b)

All interest accruing on amounts outstanding under the Senior Facilities shall accrue from day to day and be computed on the basis of the actual number of days elapsed, from and including the first day to but excluding the last day of the relevant period, and a three hundred and sixty (360) day year or, in any case where the practice in the London interbank market differs, in accordance with that practice.

 

7.2

Due Dates

 

Except as otherwise provided in this Agreement or the relevant Senior Facility Agreement, accrued interest on each Senior Loan is payable by the Borrower on each Interest Payment Date.

 

7.3

Default Interest

 

Subject to the terms and conditions of each Senior Facility Agreement (which shall prevail as between the Borrower and the Senior Finance Parties party to that Senior Facility Agreement):

 

 

(a)

if the Borrower fails to pay any amount payable by it under the Senior Finance Documents when due, it shall, forthwith on demand by the Intercreditor Agent, pay to each relevant Senior Finance Party interest on such amount from the due date up to the date of actual payment, after as well as before judgement at a rate (the “Default Rate”) determined by the Intercreditor Agent to be two per cent. (2%) per annum above the interest rate that would normally be applicable to such amount under the terms of the relevant Senior Finance Document (but calculated by reference to the Designated Interest Period determined pursuant to paragraph (b) below); and

 

 

(b)

the Default Rate will be determined on the first Business Day of each calendar month (or such other period as the Intercreditor Agent shall select, acting reasonably) after the failure to pay under paragraph (a) above (each a “Designated Interest Period”), as appropriate.

 

7.4

Notification

 

The Intercreditor Agent shall promptly notify each Facility Agent and the Borrower of the determination of a rate of interest under this Agreement.

 

 

 
 

 

 

 

8.

Payments

 

8.1

Payments Under the Senior Finance Documents

 

Unless a Senior Finance Document specifies that payments under it are to be made in another manner:

 

 

(a)

all payments by a Party (other than the Intercreditor Agent or a Facility Agent) under a Senior Finance Document must be made to the Intercreditor Agent to its account at such office or bank in the principal financial centre of the country of the relevant currency as it may notify to that Party for this purpose from time to time by not less than five (5) Business Days’ prior notice; and

 

 

(b)

all payments under each Hedging Agreement must be made directly between the parties thereto in accordance with the provisions of that Hedging Agreement.

 

8.2

Funds

 

Payments under the Senior Finance Documents shall be made for value on the due date at such times and in such amounts as are specified in the relevant Senior Finance Document and in freely transferable funds or as otherwise specified in such Senior Finance Document.

 

8.3

Distribution

 

 

(a)

Each payment received by the Intercreditor Agent or a Facility Agent under the Senior Finance Documents for another Party must, except as provided in paragraph (b) below, be made available by that Agent to that Party by payment (as soon as reasonably practicable after receipt):

 

 

(i)

in the case of a payment to the Borrower, to the Onshore Disbursement Account in accordance with Clause 3.1 (Onshore Disbursement Account) of the Accounts Agreement;

 

 

(ii)

in the case of a payment to a Senior Lender, for the account of its Lending Office; and

 

 

(iii)

in the case of a payment to a Party other than the Borrower or a Senior Lender, to its account with such office or bank:

 

 

(A)

in the principal financial centre of the country of the relevant currency; or

 

 

(B)

in the case of a payment in Dollars, in the location of the Lending Office of that Party,

 

as it may notify to the Intercreditor Agent for this purpose by not less than five (5) Business Days’ prior notice.

 

 

(b)

The Intercreditor Agent or a Facility Agent may apply any amount received by it for the Borrower in or towards payment (as soon as reasonably practicable after receipt) of any amount due from the Borrower under the Senior Finance Documents or in or toward the purchase of any amount of currency to be so applied.

 

8.4

Currency

 

 

(a)

Amounts payable in respect of costs, expenses and Taxes and the like are payable in the currency in which they are incurred.

 

 

 
 

 

 

 

 

(b)

Any other amount payable under the Senior Finance Documents is, except as otherwise provided in the Senior Finance Documents, payable in USD.

 

8.5

Set-off and Counterclaim

 

All payments made by the Borrower under the Senior Finance Documents (other than any netting-off pursuant to any Hedging Agreement) shall be made without set-off or counterclaim.

 

8.6

Non-Business Days

 

 

(a)

If a payment under the Senior Finance Documents is due on a day which is not a Business Day, the due date for that payment shall instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

 

 

(b)

During any extension of the due date for payment of any principal under this Agreement pursuant to paragraph (a) above, interest is payable on that principal at the rate payable on the original due date.

 

8.7

Clawback

 

 

(a)

Where a sum is to be paid to an Agent under the Senior Finance Documents for another Party, the Agent is not obligated to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

 

 

(b)

If the Agent pays an amount to another Party (other than JBIC) and it proves to be the case that the Agent had not actually received that amount, then the Party (other than JBIC) to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent.