Document:

ex_112652.htm

Exhibit 10.2 

 

	 

 

 

  

FINANCE AGREEMENT

 

 

between

 

 

GEOTÉRMICA PLATANARES, S.A. DE C.V.

 

and

 

 

OVERSEAS PRIVATE INVESTMENT CORPORATION

 

 

 

 

Dated as of April 30, 2018

 

 

 

OPIC/ 9000003553

	 

 

 

	
			NOTE:

			THIS DRAFT IS FOR DISCUSSION PURPOSES ONLY AND HAS NOT BEEN APPROVED BY OPIC. THIS DRAFT DOES NOT CONSTITUTE AN AGREEMENT BY OPIC OR A COMMITMENT BY OPIC TO ENTER INTO AN AGREEMENT AND REMAINS SUBJECT TO CHANGE. ANY REPRESENTATION TO THE CONTRARY IS VOID.

			

 

 

 

 

TABLE OF CONTENTS

 

Page

 

	
			ARTICLE I  DEFINITIONS AND INTERPRETATION

				1
	
			SECTION 1.01.

				
			Definitions and Interpretation

				1
	
			ARTICLE II AMOUNT AND TERMS OF THE LOAN

				1
	
			SECTION 2.01.

				
			Amount and Disbursement

				1
	
			SECTION 2.02.

				
			Interest; Default Interest

				2
	
			SECTION 2.03.

				
			Repayment of the Loan

				2
	
			SECTION 2.04.

				
			Voluntary Prepayment

				2
	
			SECTION 2.05.

				
			Mandatory Prepayment

				3
	
			SECTION 2.06.

				
			Loan Fees and Cancellation

				4
	
			SECTION 2.07.

				
			Tax Gross-Up; Stamp Duties; Proper Legal Form

				4
	
			SECTION 2.08.

				
			Miscellaneous

				5
	
			ARTICLE III  REPRESENTATIONS AND WARRANTIES

				6
	
			SECTION 3.01.

				
			Representations and Warranties

				6
	
			ARTICLE IV  CONDITIONS PRECEDENT TO FIRST DISBURSEMENT

				12
	
			SECTION 4.01.

				
			Transaction Documents

				12
	
			SECTION 4.02.

				
			Authorization

				14
	
			SECTION 4.03.

				
			Ownership

				14
	
			SECTION 4.04.

				
			Consents

				14
	
			SECTION 4.05.

				
			Site

				15
	
			SECTION 4.06.

				
			Security Interest

				15
	
			SECTION 4.07.

				
			Insurance

				15
	
			SECTION 4.08.

				
			Auditors

				15
	
			SECTION 4.09.

				
			Legal Opinions

				16
	
			SECTION 4.10.

				
			Appointment of Agent

				16
	
			SECTION 4.11.

				
			Accounts; Offshore Well Reserve Account

				16
	
			SECTION 4.12.

				
			Financial Projections

				16
	
			SECTION 4.13.

				
			Construction COD Reports

				16
	
			SECTION 4.14.

				
			Environmental and Social Requirements

				17
	
			SECTION 4.15.

				
			ESAP

				17
	
			SECTION 4.16.

				
			Due Diligence

				17
	
			SECTION 4.17.

				
			Lien Waivers

				17
	
			SECTION 4.18.

				
			Advisor Reports

				17
	
			SECTION 4.19. 

				
			Geothermal Resource

				17
	
			SECTION 4.20. 

				
			Equity Contributions; Subordinated Loans

				17
	
			SECTION 4.21. 

				
			Funding Arrangements

				18
	
			SECTION 4.22.

				
			Notices to SERNA and MINOSA

				18
	
			ARTICLE V CONDITIONS PRECEDENT TO EACH DISBURSEMENT

				18
	
			SECTION 5.01.

				
			Disbursement Request

				18
	
			SECTION 5.02.

				
			Representations and Defaults

				18
	
			SECTION 5.03.

				
			No Event of Default; Change in Circumstances

				18
	
			SECTION 5.04.

				
			Notes

				19
	
			SECTION 5.05.

				
			Closing Certificate

				19
	
			SECTION 5.06.

				
			Financial Information and Project Progress

				19
	
			SECTION 5.07.

				
			Payment or Reimbursement of Expenses

				19
	
			SECTION 5.08.

				
			Central Bank Registration; Consents

				19
	
			SECTION 5.09.

				
			DSR Requirement

				19
	
			SECTION 5.10.

				
			Debt to Equity Ratio

				19

 

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TABLE OF CONTENTS

(continued)

 

Page

 

	
			SECTION 5.11.

				
			Reservoir Monitoring Report

				20
	
			SECTION 5.12.

				
			Project Costs

				20
	
			SECTION 5.13.

				
			Independent Engineer Certificate

				20
	
			SECTION 5.14.

				
			Funding

				20
	
			SECTION 5.15.

				
			Insurance

				20
	
			SECTION 5.16.

				
			Lien Waivers

				20
	
			SECTION 5.17.

				
			Other Documents

				20
	
			ARTICLE VI  AFFIRMATIVE COVENANTS

				21
	
			SECTION 6.01.

				
			Company Operations

				21
	
			SECTION 6.02.

				
			Maintenance of Rights and Compliance with Laws

				22
	
			SECTION 6.03.

				
			Maintenance of Insurance

				22
	
			SECTION 6.04.

				
			Accounting and Financial Management

				23
	
			SECTION 6.05.

				
			Financial Statements and Other Information

				23
	
			SECTION 6.06.

				
			Annual Operating Budget

				24
	
			SECTION 6.07.

				
			Access to Records; Inspection; Meetings

				24
	
			SECTION 6.08.

				
			Notice of Default and Other Matters

				24
	
			SECTION 6.09

				
			Security Documents

				25
	
			SECTION 6.10.

				
			Financial Ratios; DSR Requirement; Well Reserve Requirement

				25
	
			SECTION 6.11.

				
			Environmental, Health and Safety Compliance

				26
	
			SECTION 6.12.

				
			Worker Rights

				27
	
			SECTION 6.13.

				
			Additional Project Documents

				28
	
			SECTION 6.14.

				
			Drilling Program

				29
	
			SECTION 6.15.

				
			SERNA Direct Agreement

				29
	
			ARTICLE VII  NEGATIVE COVENANTS

				29
	
			SECTION 7.01.

				
			Liens

				29
	
			SECTION 7.02.

				
			Indebtedness

				30
	
			SECTION 7.03.

				
			No Alteration or Assignment of Agreements

				30
	
			SECTION 7.04.

				
			Restricted Payments and Shareholder Payments

				31
	
			SECTION 7.05.

				
			Conduct of Business with Affiliates

				31
	
			SECTION 7.06. 

				
			No Sale of Assets; Mergers

				31
	
			SECTION 7.07.

				
			Lease Obligations

				31
	
			SECTION 7.08.

				
			Ordinary Conduct of Business

				31
	
			SECTION 7.09.

				
			OFAC Compliance

				32
	
			SECTION 7.10.

				
			Prohibited Payments

				32
	
			SECTION 7.11.

				
			Accounts

				32
	
			SECTION 7.12

				
			Project; Site

				33
	
			SECTION 7.13

				
			Project Documents

				33
	
			ARTICLE VIII  DEFAULTS AND REMEDIES

				33
	
			SECTION 8.01.

				
			Events of Default

				33
	
			SECTION 8.02.

				
			Remedies upon Event of Default

				36
	
			SECTION 8.03.

				
			Arbitration

				37
	
			SECTION 8.04.

				
			Borrower Consent to Suit; Exclusive Forum for Certain Actions

				37
	
			SECTION 8.05.

				
			Judgment Currency

				38
	
			SECTION 8.06.

				
			No Immunity

				38
	
			ARTICLE IX  MISCELLANEOUS

				39
	
			SECTION 9.01.

				
			Notices

				39
	
			SECTION 9.02.

				
			English Language

				40

 

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TABLE OF CONTENTS

(continued)

 

Page

 

	
			SECTION 9.03.

				
			GOVERNING LAW

				40
	
			SECTION 9.04.

				
			Succession; Assignment; Benefit

				40
	
			SECTION 9.05.

				
			Survival of Agreements

				40
	
			SECTION 9.06.

				
			Integration; Amendments

				40
	
			SECTION 9.07.

				
			Severability

				40
	
			SECTION 9.08.

				
			No Waiver

				41
	
			SECTION 9.09.

				
			WAIVER OF JURY TRIAL

				41
	
			SECTION 9.10.

				
			Indemnity

				41
	
			SECTION 9.11.

				
			Cooperation; Loan Servicing

				42
	
			SECTION 9.12.

				
			Further Assurances

				42
	
			SECTION 9.13.

				
			Counterparts

				42
	
			SECTION 9.14.

				
			Waiver of Litigation Payments

				42
	
			SECTION 9.15.

				
			Conflict of Terms

				42

 

SCHEDULES

 

	
			X

				
			Defined Terms and Rules of Interpretation

			
	
			2.03

				
			Amortization Schedule

			
	2.08(b)	Wire Transfer Instructions for Remittance of Payments to OPIC
	
			3.01(d)

				
			Capitalization

			
	3.01(l)	Complaints
	
			3.01(m)

				
			Financial Plan

			
	
			3.01(x)

				
			Contractors and Subcontractors

			
	
			4.04

				
			Consents

			
	4.13(b)(i)	Punchlist Items
	
			4.13(b)(ii)

				
			Construction Payments

			
	
			4.15

				
			Environmental and Social Action Plan (ESAP)

			
	
			4.19-A

				
			Drilling Program

			
	
			4.19-B

				
			Reservoir Monitoring Plan

			
	
			4.19-C

				
			Form of Reservoir Monitoring Report

			
	
			6.03

				
			Insurance

			
	
			6.05(d)

				
			Form of Operating Report

			
	
			6.06

				
			Form of Annual Operating Budget

			
	
			6.12

				
			Worker Rights Action Plan

			
	
			7.01

				
			Liens

			
	
			7.02

				
			Indebtedness

			
	
			7.07

				
			Leases

			
	
			8.03

				
			Arbitration Provisions

			

 

 

 

 

TABLE OF CONTENTS

(continued)

 

Page

 

EXHIBITS

 

	
			A-1

				
			Form of New York Law Promissory Note

			
	
			A-2

				
			Form of Honduran Law Pagaré

			
	A-3	Form of Authorization to Complete
	
			B

				
			Form of Disbursement Request

			
	
			C-1

				
			Form of Authorization Certificate of the Borrower (pursuant to Section 4.02)

			
	
			C-2

				
			Form of Authorization Certificate of the Shareholders (pursuant to Section 4.02)

			
	
			D

				
			Form of Closing Certificate (pursuant to Section 5.05)

			
	
			E

				
			Form of Independent Engineer Certificate (pursuant to Section 5.13)

			
	
			F

				
			Form of Compliance Certificate (pursuant to Section 6.05(a))

			
	
			G

				
			Form of Final Disbursement Certificate (pursuant to Section 6.05(g))

			
	H-1	Form of Written Notice to SERNA
	H-2	Form of Written Notice to MINOSA
	I	Form of SERNA Direct Agreement

 

 

 

 

FINANCE AGREEMENT

 

THIS FINANCE AGREEMENT (this “Agreement”), dated as of April 30, 2018 (the “Effective Date”), is made by and between GEOTÉRMICA PLATANARES, S.A. DE C.V., a sociedad anónima de capital variable organized and existing under the laws of the Republic of Honduras (the “Borrower”), and OVERSEAS PRIVATE INVESTMENT CORPORATION, an agency of the United States of America (“OPIC”).

 

The Borrower intends to implement the Project and has requested that OPIC provide a credit facility pursuant to Section 234(b) of the Foreign Assistance Act of 1961, as amended, which OPIC is willing to do on the terms and conditions set forth herein. Accordingly, in consideration of the foregoing and of the agreements contained herein, it is agreed as follows:

 

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

 

SECTION 1.01.     Definitions and Interpretation.

 

In this Agreement, including the Exhibits and Schedules hereto, (a) capitalized terms used but not otherwise defined have the meanings set forth in the attached Schedule X, and (b) the rules of interpretation set forth in Schedule X apply.

 

 

ARTICLE II

AMOUNT AND TERMS OF THE LOAN

 

SECTION 2.01.     Amount and Disbursement.

 

(a)     Commitment. Subject to the terms and conditions hereof, OPIC agrees to make, and the Borrower agrees to accept, a Loan for the Project in a principal amount not to exceed $124,700,000.

 

(b)     Disbursement; Term. During the Commitment Period, the Borrower may request a Disbursement by delivering to OPIC a Disbursement Request not less than twenty (20) Business Days prior to the applicable Closing Date. Each Disbursement shall be evidenced by (i) a Note under New York law and (ii) a pagaré under Honduran law, dated the Closing Date, in the principal amount of the Disbursement and maturing on the Note Maturity Date. The Loan shall not exceed the amount of the Commitment, and Loan amounts repaid or prepaid may not be reborrowed.

 

(c)     Number and Amount of Disbursements. There shall be no more than one (1) Disbursement in each fiscal quarter and no more than three (3) total Disbursements. Each Disbursement shall be in an amount of not less than $10,000,000 and in multiples of $100,000 in excess thereof. Notwithstanding anything to the contrary, (i) no Disbursement prior to the True-Up Date shall be in an amount that, together with all then previous Disbursements made, exceeds $114,700,000; and (ii) no Disbursement on or following the True-Up Date, shall be in amount that, together with all then previous Disbursements made, exceeds $124,700,000.

 

 

 

 

SECTION 2.02.     Interest; Default Interest.

 

(a)     Payment of Interest; OPIC Note Interest Rate. On each Payment Date, beginning on the first Payment Date immediately following the first Closing Date and ending on the Note Maturity Date, the Borrower shall pay to the order of OPIC interest in arrears on the daily outstanding principal balance of each Note, less any amount of principal on which interest is payable at the Default Rate pursuant to Section 2.02(b), accrued at a rate per annum, subject to Section 2.02(c), equal to the sum of the following (subject to Section 2.02(c), the “OPIC Note Interest Rate” with respect to each Note):

 

(i)     The Certificate Interest Rate; and

 

(ii)     The OPIC Guaranty Fee;

 

provided, that if the Payment Date immediately following any Closing Date occurs within fifteen (15) Business Days of such Closing Date, the Borrower shall make its first interest payment under the related Note on the second Payment Date following such Closing Date.

 

(b)     Default Rate. If the Borrower fails to pay when due any amount due to OPIC under any Financing Document, such unpaid amount shall bear interest at the Default Rate from the date such amount is due until the date on which such amount is paid in full.

 

(c)     Adjustment to OPIC Note Interest Rate. If OPIC shall have made payment of any principal, interest or other guaranteed amount on account of a defaulted payment under any Note pursuant to OPIC’s guaranty under the Funding Documents (an “OPIC Guaranty Payment”), then, with respect to the amount of such OPIC Guaranty Payment, the OPIC Note Interest Rate from the date of such OPIC Guaranty Payment to the date of payment in full to OPIC of the amount of such OPIC Guaranty Payment may, at OPIC’s option, be converted to a fixed per annum rate of interest equal to the sum of the following:

 

(i)     the highest Certificate Interest Rate set forth in any Note then outstanding (or, at OPIC’s option, the U.S. Treasury Cost); and

 

(ii)     the OPIC Guaranty Fee,

 

and the Borrower shall, on demand, pay to OPIC the amount of such OPIC Guaranty Payment, together with interest thereon at the Default Rate, adjusted as provided in this Section 2.02(c).

 

 

SECTION 2.03.     Repayment of the Loan.

 

The Borrower shall repay the Loan in fifty-eight (58) approximately equal quarterly installments (collectively, the “Principal Installments”) beginning on June 20, 2018 as set forth in Schedule 2.03.

 

 

SECTION 2.04.     Voluntary Prepayment.

 

Subject to the requirements of the Funding Documents, including payment of any Redemption Premium payable thereunder, on any Designated Prepayment Date following the last day of the Commitment Period, the Borrower may, upon not less than forty-five (45) days’ nor more than sixty (60) days’ prior notice to OPIC, prepay the Loan, in whole or in part, in a minimum partial prepayment amount of $5,000,000, together with the payment to OPIC of (a) interest accrued to the date of prepayment on the portion of the principal amount of each Note that is to be prepaid in the case of a prepayment on a Payment Date or a prepayment in whole, and (b) a premium (the “Prepayment Premium”), calculated as a percentage of the Loan amount prepaid, in accordance with the following schedule:

 

	
			Year Following Expiration of Commitment Period

				
			Prepayment Premium

			
	
			Year 1

				
			2%

			
	
			Year 2

				
			2%

			
	
			Year 3

				
			1%

			
	
			Year 4 and thereafter

				
			None

			

 

All voluntary prepayments shall be applied in accordance with the terms of the OPIC Funding Agreement, or, if not provided for in the OPIC Funding Agreement, then as OPIC may otherwise determine.

 

2

 

 

SECTION 2.05.     Mandatory Prepayment.

 

Subject to the requirements of the Funding Documents, including payment of any Redemption Premium payable thereunder, on any Designated Prepayment Date the Borrower shall, upon not less than forty-five (45) days and not more than sixty (60) days’ prior notice to OPIC, prepay the Loan in the event that and in the amount (net of the Borrower’s best estimate as of the date of such notice of the documented and reasonable costs, expenses and Taxes to be incurred or paid by the Borrower in connection with the collection and conversion, if in a currency other than Dollars, of such amount) by which (and only to the extent any of the following arise, accrue or are incurred on or after the Effective Date):

 

(a)     Insurance Proceeds or other compensation proceeds for loss or damage to asset(s) received by the Borrower during any Fiscal Year that are not applied or committed to the repair or replacement of assets insured thereby or otherwise reinvested in the Project in a manner satisfactory to OPIC within one hundred-eighty (180) days after receipt by the Borrower, in an amount equal to the amount by which such unapplied or uncommitted proceeds, in the aggregate, exceed one million Dollars ($1,000,000);

 

(b)     compensation or damages are received by the Borrower following a dispute that results in a material adverse change to the ENEE PPA;

 

(c)     compensation or damages, other than payments in the nature of delay liquidated damages, paid to the Borrower pursuant to any Project Document (other than as described in clause (b) above), in an amount equal to the amount by which such compensation or damages, in the aggregate, exceed $350,000;

 

(d)     the Borrower receives any Termination Payment or Expropriation Proceeds, in the amount equal to the lesser of (i) the Secured Obligations and (ii) such Termination Payment or Expropriation Proceeds, as the case may be; and

 

(e)     Sale Proceeds resulting from one or more Dispositions in any year of all or any part of the Property of the Borrower received by the Borrower (except as permitted pursuant to Section 7.06(a)), in an amount equal to the amount by which such Sale Proceeds, in the aggregate, exceed $350,000.

 

Prepayments made pursuant to this Section 2.05 shall be subject to any Redemption Premium or other amounts payable pursuant to the Funding Documents and shall be applied in the same manner as if made pursuant to Section 2.04 (except that no Prepayment Premium shall be due). For purposes of Section 2.05(a), the prepayment shall be applied against payments due to OPIC taking into account the Redemption Premium, if payable pursuant to the Funding Documents in connection with such prepayment.

 

3

 

 

SECTION 2.06.     Loan Fees and Cancellation.

 

(a)     Commitment Fee. During the Commitment Period, the Borrower shall pay to OPIC, in arrears, on each Payment Date beginning on the first Payment Date after the Effective Date and on the last day of the Commitment Period, or, if earlier, the date this Agreement is terminated, a commitment fee (the “Commitment Fee”), accruing on a daily basis at the rate of half of one percent (0.50%) per annum, calculated for each day during the Commitment Period, on the amount of the Commitment.

 

(b)     Cancellation Fee. The Borrower may cancel all or any part of the Commitment at any time upon written notice and payment to OPIC of a cancellation fee (the “Cancellation Fee”) equal to one percent (1%) of the amount of the Commitment canceled, provided, always, that the Borrower demonstrates to OPIC’s satisfaction that there are sufficient funds available, to operate the Project. Any part of the Commitment not disbursed at the end of the Commitment Period or that is terminated for any reason shall be deemed to have been canceled, and such Cancellation Fee shall be payable with respect thereto.

 

(c)     Facility Fee. The Borrower shall pay OPIC a facility fee (the “Facility Fee”) in an amount equal to one percent (1%) of the amount of the Commitment on or prior to the first Closing Date.

 

(d)     Maintenance Fee. The Borrower shall pay to OPIC an annual maintenance fee to cover OPIC’s administrative costs and expenses, including, but not limited to, systems infrastructure costs (the “Maintenance Fee”), which Maintenance Fee shall include an annual fee in the amount of forty-five thousand Dollars ($45,000), payable to OPIC on the first anniversary of the Payment Date immediately following the first Closing Date and on each anniversary of such Payment Date for so long as any portion of the Loan remains outstanding.

 

(e)     Modification Fee. In the event that the Borrower requests an amendment to, waiver of, or consent under, any provision of this Agreement or any other Financing Document, OPIC will consider such a request on its merits upon payment by the Borrower, at the time of such request, of a fee which, in OPIC’s determination, shall be commensurate with the complexity and timing constraints of such amendment, waiver or consent (the “Modification Fee”); provided, however, that no Modification Fee will be payable if the amendment, waiver or consent is necessary, in OPIC’s determination: (i) to correct an error or omission in any Financing Document, or (ii) to improve the operations of the Project without materially altering the risks undertaken by OPIC. OPIC is under no obligation to agree to any amendment or waiver or to grant any consent. The Borrower acknowledges that OPIC may request a Modification Fee in connection with providing its consent to, or any amendment or waiver required for, (a) restructurings of any kind, (b) any prepayment requiring releases of collateral (other than prepayment in full of all obligations secured thereby) or (c) other similar actions by OPIC.

 

 

SECTION 2.07.     Tax Gross-Up; Stamp Duties; Proper Legal Form.

 

(a)     All sums payable by the Borrower hereunder and under any other Financing Document shall be paid in full, free of any deductions or withholdings of any and all present and future Taxes. If the Borrower is required by Applicable Law to deduct any Taxes from or to withhold any Taxes in respect of any amount payable to OPIC hereunder or under any Financing Document, then the Borrower shall pay such additional amount as may be necessary so that the actual amount received by OPIC after such deductions or withholdings equals the full amount under the Financing Documents it would have received had no such deductions or withholdings been required.

 

4

 

 

(b)     In addition to the obligations set forth in Section 6.02(c), the Borrower shall pay before they become overdue any and all present and future Taxes payable on or in connection with the execution, delivery, registration, or notarization, or for the legality, validity, or enforceability of this Agreement or any other Transaction Document directly to the Governmental Authority responsible for collecting such Taxes, except for any Taxes that the Borrower is contesting in good faith by appropriate proceedings and for which adequate reserves have been set aside in accordance with Accounting Standards; provided, that the Borrower hereby indemnifies OPIC and holds OPIC harmless from and against any and all liabilities, fees, or additional expenses with respect to or resulting from any delay in paying, or omission to pay, any such Taxes. Within thirty (30) days after payment by the Borrower of any such Taxes, the Borrower shall furnish OPIC with the original or a Certified copy of the receipt evidencing payment thereof, together with any other information OPIC may reasonably request. OPIC shall have the right, but not the obligation, to pay any such Taxes not paid by the Borrower, and the Borrower shall, upon OPIC’s demand, promptly reimburse OPIC in full for all such payments.

 

(c)     As of each Closing Date, the Borrower shall take all action to ensure that each signature to each of the Financing Documents that has been executed by such Closing Date has been duly legalized for use in Honduras, so that no further action will be required for the enforceability of such Financing Document in Honduras.

 

 

SECTION 2.08.     Miscellaneous.

 

(a)     Payment or Reimbursement of Expenses. OPIC may retain such consultants as determined by OPIC to be necessary, including U.S. and local legal counsel, at any time until the Loans are indefeasibly repaid in full. Upon request, the Borrower shall promptly pay or reimburse OPIC for all of OPIC’s reasonable and documented costs and expenses incurred in connection with the negotiation, preparation, execution, delivery, notarization, recordation and implementation of the Financing Documents (and other documents, instruments and approvals required to be delivered thereunder), including (i) the fees and expenses of outside U.S., Cayman and Honduran legal counsel and business consultants, and (ii) the costs of communications, preparation of any documents, authentication, registration, and recordation of any of the Financing Documents, preparation of a monitoring memorandum for OPIC’s use, and preparation of bound volumes or an electronic closing set of the Financing Documents for OPIC’s use, and the creation, perfection and termination of the Liens created pursuant to the Security Documents and any filings prepared in connection therewith. The Borrower shall also reimburse OPIC, upon demand, for all costs and expenses (A) (including attorneys’ fees and expenses and costs of travel) incurred by OPIC in preserving in full force and effect, or enforcing its rights under, any of the Financing Documents and (B) (including reasonable and documented attorneys’ fees and expenses and costs of travel) incurred by OPIC in addition to the Modification Fee, in connection with any amendment, waiver or consent related to any provision of any Financing Document.

 

(b)     Currency and Place of Payment. All payments to OPIC shall be made in Dollars by wire transfer in immediately available funds without counterclaim, offset, or deduction. Unless instructed otherwise by OPIC, wires should be sent to OPIC’s account with the U.S. Treasury Department in New York by either Fedwire transfer or international electronic funds transfer, and any such wire must include the required information set forth in Schedule 2.08(b). Whenever any payment would otherwise fall due on a day that is not a Business Day, the due date for payment shall be the immediately succeeding Business Day, and interest and fees shall be computed through such immediately succeeding Business Day in accordance with Section 2.08(c); provided, however, that the last payment shall include interest through the actual date of receipt of such payment.

 

5

 

 

(c)     Computation of Interest on Notes and of Certain Fees. Except as otherwise provided herein, in the Funding Documents or in any Note:

 

(i)     interest on any Note (including interest calculated at any OPIC Note Interest Rate or the Default Rate) and default interest calculated at the Default Rate due on any unpaid amount of Redemption Premium, if any, shall accrue on a daily basis and shall be computed as provided therein; and

 

(ii)     the Commitment Fee and any default interest calculated at the Default Rate on any amounts past due other than amounts described in Section 2.08(c)(i) above shall accrue on a daily basis and shall be computed on the basis of three hundred sixty (360)-day years composed of twelve (12) thirty (30)-day months.

 

(d)     Application of Payments to OPIC. Except as otherwise provided herein, in the Funding Documents or in any Note, payments received by OPIC under any of the Financing Documents shall be applied to amounts due to OPIC in such manner as OPIC in its sole discretion may determine.

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.01.     Representations and Warranties.

 

The Borrower represents and warrants to OPIC that:

 

(a)     Existence and Power. The Borrower (i) is a sociedad anónima de capital variable duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization; (ii) is duly authorized to do business in each jurisdiction in which it conducts business; and (iii) has the power to own its properties, carry on its business and the Project, borrow money, create Liens on its properties, and execute, deliver, and perform each of the Borrower Documents.

 

(b)     Authority. The Borrower’s execution, delivery, and performance of each of the Borrower Documents to which the Borrower is a party at the time this representation is made: (i) have been duly authorized by all necessary corporate action; (ii) will not violate any (x) Corrupt Practices Laws, Environmental Laws or Worker Rights Requirements or (y) any other Applicable Law; and (iii) will not breach, or result in the imposition of any Lien upon any of its assets (except as permitted by Section 7.01) under, any of its Charter Documents or any agreement or other requirement by which it or any of its properties may be bound or affected. Each of the Borrower Documents has been duly executed and delivered by the Borrower, and is a legal, valid, and binding obligation of the Borrower, enforceable in accordance with its terms. As of each Closing Date, each of the Borrower Documents executed and delivered by such Closing Date has been duly legalized for use in Honduras with no further action required for the enforceability of such Borrower Documents in Honduras.

 

(c)     Financial Condition. The Borrower’s audited Financial Statements, dated December 31, 2016, which have been furnished to OPIC and any other Financial Statements that have been furnished to OPIC pursuant to Section 6.05, are complete and correct and fairly present its financial condition and results of its operations for the period then ended. Except for obligations incurred in the ordinary course of business, the Borrower has no obligation, contingent or otherwise, of any kind except as disclosed in such Financial Statements. Since the Effective Date, no dividend, Restricted Payment or Shareholder Payment has been declared or paid to the Shareholders or any other Person, except as permitted in Section 7.04.

 

(d)     Capitalization. (i) The Borrower’s authorized capital and issued stock is as set forth on Schedule 3.01(d). All such capital stock has been duly authorized and validly issued and is fully paid and nonassessable. Other than pursuant to the Project Structuring Agreement (but subject to the terms of the Security Documents), there are no rights or claims of any character that restrict the transfer of, require the issuance of, or otherwise relate to any class of the Borrower’s capital stock.

 

6

 

 

(ii) (A) The Sponsor holds the direct legal and beneficial title to OII’s share capital; (B) OII holds the direct legal and beneficial title to Ormat Holding Corp.’s share capital; (C) Ormat Holding Corp. holds the direct legal and beneficial title to the Intermediate Shareholder’s share capital; (D) the Intermediate Shareholder holds the direct legal and beneficial title to OrPower 19’s share capital; (E) OrPower 19 holds the direct legal and beneficial title to the Borrower’s ordinary capital stock (excluding the Preferred Nonvoting Share); and (F) Elcosa holds the direct legal and beneficial title to the Borrower’s Preferred Nonvoting Share, in each case in the percentage amounts set forth next to their names on Schedule 3.01(d). Except as provided in this Section 3.01(d), no Person holds direct or indirect legal or beneficial title to the Borrower’s capital stock, and the Borrower does not own or otherwise control any voting stock of, or have any ownership interest in, any other Person.

 

(iii) No transfer of (a) the Borrower’s assets or the ordinary shares of the Borrower, except for the transfer of assets and shares into the trusts governed by the Honduran Asset Trust Agreement, the Administration and Guaranty Trust Agreement and the Honduran Share Trust Agreement, or (b) the shares of OrPower 19, except for the pledges of shares under the Cayman Pledge Agreements, has been made to Elcosa or any other party.

 

(e)     Liens. The Security Documents are, or upon filing and registration will be, effective to create in favor of OPIC legal, valid, and enforceable first priority Liens, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, on all of the Borrower’s assets intended to be covered thereby. The Borrower does not have outstanding, nor is it contractually bound to create, any Lien on or with respect to any of its assets, rights, or revenues, except for Permitted Liens.

 

(f)     Taxes and Reports. The Borrower has filed all tax returns and reports required by Applicable Law to be filed and has paid (or provided adequate reserves for) all Taxes due.

 

(g)     Defaults. No Default or Event of Default has occurred and is continuing other than any failure of ENEE to make payments in accordance with the ENEE PPA but which payments are nonetheless made within the applicable grace period, provided, that, in the case of any Default or Event of Default with respect to any party other than the Borrower or any of the Ormat Parties, such representation is limited to the Knowledge of the Borrower and the Ormat Parties. Neither the Borrower nor, to the Knowledge of the Borrower and the Ormat Parties, any other party is in breach of any provision of any contract to which the Borrower is a party, which breach could be a Material Adverse Effect.

 

(h)     Litigation. No action, suit, other legal or arbitral proceeding, or investigation is pending by or before any domestic or foreign court or Governmental Authority or in any arbitral or other forum or is threatened in writing, that (i) relates to any of the transactions contemplated by any Transaction Document, or (ii) if adversely determined, could be a Material Adverse Effect.

 

(i)     Compliance with Law; Corrupt Practices; Anti-Money Laundering.

 

(i)     The Borrower has conducted and is conducting its business in compliance with (A) Corrupt Practices Laws, Environmental Laws and Worker Rights Requirements and (B) in all material respects, all other Applicable Laws and its Charter Documents.

 

7

 

 

(ii)     Without limiting the effect of clause (i), the Borrower and its officers, directors, employees, and agents have complied with applicable Corrupt Practices Laws in obtaining all Consents in respect of the Borrower’s business and the Project and are otherwise conducting the Project and the Borrower’s business in compliance with applicable Corrupt Practices Laws. The Borrower’s internal management and accounting practices and controls are sufficient to provide reasonable assurances of compliance with applicable Corrupt Practices Laws and the prevention of Prohibited Payments. Neither the Borrower nor, to the Knowledge of the Borrower and the Ormat Parties, any Person acting on behalf of the Borrower has made any Prohibited Payment.

 

(vi)     The Borrower is in compliance with the applicable requirements of (A) the Anti-Money Laundering Laws, (B) OFAC Regulations, and (C) all other applicable export control, anti-boycott and economic sanctions laws of the U.S. and other jurisdictions relating to its business and facilities.

 

(vii)     None of the Borrower, its directors, members of senior management, or the Persons listed on Schedule 3.01(d) is a Person included in any OFAC List or otherwise subject to sanctions under OFAC Regulations.

 

(j)     Status of Consents.

 

(i)     As of the Effective Date and the date of first Disbursement, Schedule 4.04 lists (and as of any other date on which this representation is given or deemed repeated, such Schedule 4.04, as updated in writing prior to the time of such representation, lists) each Consent necessary for: (x) the conduct of the Borrower’s business and the implementation of the Project; (y) the due execution, delivery, validity and enforceability of, and performance by the Borrower of its obligations under, the Borrower Documents, including Financing Documents, the incurrence of Indebtedness thereunder and the payment of amounts due or to become due with respect thereto (including Consents necessary for such amounts to be free of withholding Taxes and Consents necessary to permit the exemptions from other applicable Taxes assumed by the Financial Model); and (z) the due execution, delivery, validity and enforceability of, and performance by any Shareholder of its obligations under, any Transaction Documents to which it is a party; in each case, other than (A) Consents of a routine nature that are not yet required based on the then-current stage of the Project and which the Borrower reasonably expects to obtain in the ordinary course of business without materially delaying the Project or exceeding the costs set forth in the Financial Plan and (B) such other Consents that may become required in the future for the Project as a result of a change in Applicable Law.

 

(ii)     As of the Effective Date and the date of first Disbursement, all Consents specified in Part A of Schedule 4.04 have been obtained and are in full force and effect. As of any other date on which this representation is given or deemed repeated, all Consents specified in Part A of Schedule 4.04 and all other Consents provided to OPIC through such date pursuant to Section 6.02 are in full force and effect.

 

(iii)     As of the Effective Date and the date of first Disbursement, the Borrower and its agents or designees have applied (or are making arrangements to apply) or will apply (or cause third parties to apply) for all Consents specified in Part B of Schedule 4.04. As of the Effective Date and the date of first Disbursement, the status of such Consents is accurately described in such Part B. As of any other date on which this representation is given or deemed repeated, the status of such Consents is accurately described in such Part B of such Schedule 4.04, as updated in writing prior to the time of such representation, and the Borrower has obtained all such Consents by the time required based on the then-current stage of the Project.

 

8

 

 

(k)     Good Title, Use of Site; Easements, Property Interests, Utilities, Etc. The Borrower either (a) owns and has good, legal and marketable title to, and, in respect of real property, a lawful and valid ownership title in all property that it purports to own, including in those parcels of land comprising the Site, or (b) has a lawful, valid, exclusive and irrevocable right of use of those parcels of land comprising the Site, in each case free and clear of all Liens (other than Permitted Liens). The Borrower does not own any parcel of land comprising the Site that is not subject to a valid, effective and first-priority Lien created by means of the Administration and Guaranty Trust Agreement. The Borrower has a lawful, valid, exclusive and irrevocable right of use and a possessory interest in all necessary easements and other rights of ingress to and egress from the Site and lawfully possesses a valid and subsisting leasehold estate in and to all of its leased property (if any) in each case free and clear of all Liens (other than Permitted Liens). Other than the rights referred to in the preceding sentences, no property rights (including easements or other rights of ingress or egress) are required or can reasonably be expected to be necessary for the design, development, construction, supply, start-up, commissioning, testing, financing, implementation, operation or maintenance of the Project in accordance with Applicable Law and the Transaction Documents. All utility and other services, means of transportation, facilities, other materials, and other rights that are or can reasonably be expected to be necessary for the Project in accordance with Applicable Law and the Transaction Documents have been procured or are commercially available to the Project. No material licenses (other than those granted pursuant to the Warranty Agreement) relating to intellectual property, trademarks, patents, or other similar agreements are necessary for the Project nor are there any payments owed due or accruing to the Sponsor or any of its Affiliates with respect to the usage of any intellectual property, trademarks, copyrights or patents related to the Project.

 

(l)     Environmental, Health and Safety Matters.

 

(i)     The Borrower has duly complied, and its business, operations, and assets, and the Project, are in compliance with all Applicable Law regarding the environment, health and safety and social performance, including Applicable Law related to labor management and worker rights.

 

(ii)     All Consents with respect to air emissions, discharges to surface water or ground water, noise emissions, solid or liquid waste disposal, the use, generation, storage, transportation or disposal of toxic or hazardous substances or wastes, or other environment, health and safety and social performance matters required as of the current stage of development or operation under Applicable Law for the Project have been issued.

 

(iii)     The Borrower and its contractors have taken commercially reasonable measures to address the risks identified in the Social Risk Assessment of Platanares Geothermal Project conducted by Social Capital Group in October 2016 and there have not been any security incidents, displacements of persons or chance archeological finds associated with the Project.

 

(iv)     Except as described in Schedule 3.01(l), the Borrower has not received any written complaint, order, directive, claim, citation, or notice by any Governmental Authority, or any written complaint or claim from any Person seeking damages, contribution, indemnification, cost recovery, compensation, modification of the Project or the Borrower’s practices or other injunctive relief.

 

(v)     Since the Effective Date, the Borrower has duly complied, and its business, operations, and assets, and the Project, are in compliance, with the Environmental and Social Requirements, it being understood that the Borrower will be able to assess and confirm compliance with the noise standards contained within IFC 2007 Environmental, Health, and Safety General Guidelines only upon completion of the noise assessment referenced in Section 3.1 of the ESAP.

 

(m)     Project Status. At the time of its application for the Loan dated November 21, 2016, the Borrower’s estimate of total Project Costs (including contingencies) was the equivalent of $180,000,000, of which up to $45,000,000 has been contributed in cash and/or assets satisfactory to OPIC as equity or subordinated debt, based on the financial plan set forth on Schedule 3.01(m) (the “Financial Plan”).

 

9

 

 

(n)     Disclosure.

 

(i)     All documents, reports, and other written information that have been furnished to OPIC are true and correct in all material respects and do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained herein or therein, taken as a whole, not materially misleading in light of the circumstances in which the same were made at the time such statements were made; provided, however, that with respect to any information that is in the nature of projections or estimates of future performance, including without limitation any information relating to the performance of the geothermal reservoir, the Borrower represents and warrants only that such projections and such other information were prepared and provided in good faith based on assumptions that are reasonable, but makes no representation or warranty as to the accuracy of such projections. There is no fact known to the Borrower the existence of which could reasonably be expected to be a Material Adverse Effect. No event, development, or circumstance has arisen since the application for the Loan dated November 21, 2016 that has or could be a Material Adverse Effect.

 

(ii)     Except for events occurring after the Effective Date disclosed in writing to OPIC, no force majeure event as the same may be defined in the ENEE PPA, the Warranty Agreement or any other Project Document that has a force majeure event has occurred and is continuing thereunder.

 

(o)     Accounts. The Borrower does not own or maintain any accounts with a bank or other financial institution other than the Accounts.

 

(p)     Suspension and Debarment. No event has occurred and no condition exists that is likely to result in the debarment or suspension of the Borrower from contracting with the U.S. Government or any agency or instrumentality thereof, and the Borrower is not now and has not been subject to any such debarment or suspension.

 

(q)     ERISA and Employees. Neither the Borrower nor any ERISA Affiliate sponsors, maintains, administers, contributes to, participates in, or has any obligation to contribute to or any liability or potential liability under, any Guaranteed Pension Plan or Multiemployer Plan and neither the Borrower nor any ERISA Affiliate has ever sponsored, maintained, administered, contributed to, participated in, or had any obligation to contribute to or any liability or potential liability under, any Guaranteed Pension Plan or Multiemployer Plan. The Borrower does not sponsor, maintain, administer, contribute to, participate in, or have any obligation to contribute to or any liability or potential liability under, any Employee Benefit Plan.

 

(r)     Investment Company Act.

 

(i) The Borrower is not an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

 

(ii) The Borrower does not own, directly or indirectly, any other Person.

 

(s)     Margin Regulation. No part of the proceeds of the Loan will be used for “buying” or “carrying” any margin stock within the meaning of Regulation U, or for any purpose that violates any regulation of the Board of Governors of the Federal Reserve System.

 

(t)     Regulation of Indebtedness. The Borrower is not subject to regulation under any Applicable Law (including, without limitation, any United States Federal or state law) that limits or impairs its ability to incur or guarantee Indebtedness or to comply with any of its obligations under the Financing Documents or that otherwise subjects the financing transactions contemplated by the Financing Documents to regulation by a Governmental Authority.

 

10

 

 

(u)     Material Project Documents.

 

(i)     Except for services, materials, licenses, or rights that can reasonably be expected to be available on commercially reasonable terms at the time required, the Material Project Documents required to be executed by the relevant Closing Date in accordance with the terms hereof, constitute all contracts, agreements, leases, or other documents or instruments that (x) contain warranties or contemplate the payment of liquidated damages, (y) are necessary for the construction, completion, operation, and ownership of the Project as of such date or (z) are necessary for the conduct of the business of the Borrower as contemplated by the Transaction Documents and the Financial Plan.

 

(ii)     The Borrower has not entered into any power purchase agreements except for the ENEE PPA and the MINOSA PPA.

 

(iii)     Other than the Material Project Documents, the MINOSA PPA and the Consents listed in Schedule 4.04, there are no agreements that are material to the construction and operation of the Project, including any that contain warranties or contemplate the payment of liquidated damages.

 

(iv)     Other Parties; Transaction Documents. (i) To the Borrower’s knowledge, each of the Transaction Documents constitutes the legal, valid and binding obligation of each party thereto (other than the Borrower and OPIC) enforceable against such party in accordance with its terms, subject to bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights and general principles of equity.

 

(v)      Following the Effective Date, none of the Transaction Documents to which the Borrower is a party has been amended, modified or terminated, except in accordance with this Agreement or as disclosed to OPIC and consented to in writing by OPIC.

 

(w)     Inverted Domestic Corporation. The Borrower is not an Inverted Domestic Corporation and it is not a Subsidiary Of An Inverted Domestic Corporation.

 

(x)     Payment of Contractors and Subcontractors. All contractors and suppliers performing Works before the Cut-Off Date have been paid in full or will be paid in full for such Works with the proceeds of the first Disbursement or adequate cash reserves have been made for such payments, except for amounts (i) that are, in the aggregate, less than one hundred thousand dollars ($100,000) and (ii) that the failure to pay could not reasonably be expected to have a Material Adverse Effect on, or materially impair, the operation of the Project. Part A of Schedule 3.01(x) sets forth a complete list of all contractors and suppliers that, since the Cut-Off Date have performed Works. All such Works have been paid in full except as set forth in Part B of Schedule 3.01(x). Part B of Schedule 3.01(x) sets forth a complete list of all contractors and suppliers that, since December 31, 2016, have performed or will perform Works and all amounts remaining to be paid (or projected to be paid) to each such contractor and supplier that, since the Cut-Off Date, is performing or will perform Works.

 

(y)      Ranking. The payment obligations hereunder and under the Notes constitute unconditional and unsubordinated Indebtedness of the Borrower and rank at all times at least pari passu in priority of payment with all other present and future unsubordinated Indebtedness of the Borrower.

 

(z)     Notice of Committed Power Capacity for Third Parties. The Borrower has not, without prior consent of OPIC, which consent shall not be unreasonably conditioned, given written notice to ENEE of any Committed Power Capacity for Third Parties (as that term is defined in the ENEE PPA) or self-consumption.

 

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(aa)     Repetition of Representations and Warranties. Each of the foregoing representations and warranties in this Section 3.01 shall be deemed to be made as of the Effective Date and as of each Closing Date (except to the extent expressly made only as of a specified earlier date, in which case as of such earlier date). To the extent that any schedule referred to in this Section 3.01 shall need to be updated in order to permit such representation to be true and correct when made or deemed to be made, the Borrower shall provide OPIC with such updated schedule in writing prior to the date such representation is deemed made and shall request that this Agreement be amended in accordance with Section 9.06, provided that no Modification Fee shall be due and payable by the Borrower for any such update that is immaterial unless consideration of such update results in other modifications to, or consents or waivers under, a Financing Document. Unless this Agreement is amended to reflect the changes in any such schedule, no change shall be deemed to have been made.

 

 

ARTICLE IV

CONDITIONS PRECEDENT TO FIRST DISBURSEMENT

 

Unless OPIC otherwise agrees in writing, the obligation of OPIC to make the first Disbursement is subject to the prior fulfillment or written waiver, to OPIC’s satisfaction in its sole discretion, of the following conditions precedent as of the date that is ten (10) days prior to the first Closing Date and to their continued fulfillment on the first Closing Date.

 

 

SECTION 4.01.     Transaction Documents.

 

OPIC shall have received the following documents, each of which shall be satisfactory to OPIC in form and substance and, if applicable, shall have been duly executed by the parties thereto and shall be in full force and effect in accordance with its terms without default:

 

(a)     originals of the following documents (the “Loan Documents”):

 

	 	(i)	this Agreement;
	 	 	 
	 	
			(ii)

				
			the Notes issued in connection with the Disbursement; provided, that any Note issued in connection with a subsequent Disbursement shall be included in the definition of “Loan Document”;

			

 

	 	
			(iii)

				
			the Share Retention Agreement;

			

 

	 	
			(iv)

				
			the Subordination Agreements;

			

 

	 	
			(v)

				
			the Funding Documents;

			

 

	 	
			(vi)

				
			the Direct Agreements; and

			

 

12

 

 

(b)     originals (or, at OPIC’s election, Certified copies) of the following documents (the “Security Documents”):

   

	 	(i)	the Share Pledge Agreement;
	 	 	 
	 	(ii)	the Citi Onshore Account Pledge Agreement;
	 	 	 
	 	(iii)	the New York Security Agreement;
	 	 	 
	 	(iv)	the Accounts Administration and Retention Agreement;
	 	 	 
	 	(v)	the Administration and Guaranty Trust Agreement;
	 	 	 
	 	(vi)	the Honduran Share Trust Agreement;
	 	 	 
	 	(vii)	Cayman Pledge Agreements;
	 	 	 
	 	(viii)	the Accounts Agreement;
	 	 	 
	 	
			(ix)

				
			the Account Control Agreement and each other document that is required for the creation and perfection, in favor of OPIC, of a valid and enforceable, first-priority Lien, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, on all of the Borrower’s assets, of whatever kind and nature, whether tangible or intangible, and wherever situated, both now owned and hereafter acquired, including all accounts receivable, inventory, general intangibles, equipment, real and personal property, accounts, rights under all project agreements, and in the proceeds thereof; and

			

 

(c)     Certified copies of the following documents (the “Material Project Documents”, and all such contracts, together with any other contract required for the construction or operation of the Project and any power purchase agreement entered into by the Borrower, including the MINOSA PPA, that is entered into with respect to the Borrower or the Project subsequent to the date hereof, the “Project Documents”):

 

	 	
			(i)

				
			the ENEE PPA and the Commercial Operation Start Certificate;

			

 

	 	
			(ii)

				
			the interconnection and wheeling agreements, if any;

			

 

	 	
			(iii)

				
			the Joint Guarantee;

			

 

	 	
			(iv)

				
			contracts among the Shareholders and between OII and/or the Borrower, on the one hand, and Elcosa and its Affiliates, on the other hand, including the Project Structuring Agreement, the ancillary documents related to that structuring agreement, and any revenue sharing and consulting and marketing contracts entered into by the Borrower;

			

 

	 	
			(v)

				
			the Operation Contract;

			

 

	 	
			(vi)

				
			the Warranty Agreement;

			

 

	 	
			(vii)

				
			the MINOSA Cooperation Agreement;

			

 

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			(viii)

				
			all contracts for the purchase of land, lease of land or use of easements and rights of way for the Project, including the La Bufa Comfort Letter and the La Bufa Land Lease Agreement;

			

 

	 	
			(ix)

				
			all contracts for the lease of equipment or facilities for the Project exceeding a value of $1,000,000;

			

 

	 	
			(x)

				
			the Ormat Guaranty;

			

 

	 	
			(xi)

				
			all contracts entered into by the Borrower to provide services to the Project exceeding a value of $200,000;

			

 

	 	
			(xii)

				
			the Water Contract;

			

 

	 	
			(xiii)

				
			the O&M Support Agreement; and

			

 

(d)     Originals (or, at OPIC’s election, Certified copies) of each of the Funding Documents.

 

The Loan Documents, the Funding Documents, and the Security Documents, together with any other agreements or instruments entered into in connection with any of the foregoing or pursuant to which the Loan is made, are collectively referred to herein as the “Financing Documents.” The Financing Documents and the Project Documents, together with any other agreements or instruments entered into in connection with any of the foregoing or pursuant to which the Loan is made, are collectively referred to herein as the “Transaction Documents.”

 

 

SECTION 4.02.     Authorization. 

 

OPIC shall have received a certificate of an Authorized Officer of the Borrower dated as of the first Closing Date, substantially in the form of Exhibit C-1 and of each Shareholder, dated as of the first Closing Date, substantially in the form of Exhibit C-2.

 

 

SECTION 4.03.     Ownership. 

 

OPIC shall have received evidence satisfactory to it, which evidence shall include Certified copies of relevant stock certificates for the entities identified in subclauses (a)(i), (ii) and (iii) below and original stock certificates for the entities identified in subclauses (a)(iv) and (v) below, that (a) (i) the Sponsor holds the direct legal and beneficial title to OII’s share capital; (ii) OII holds the direct legal and beneficial title to Ormat Holding Corp.’s share capital; (iii) Ormat Holding Corp. holds the direct legal and beneficial title to the Intermediate Shareholder’s share capital; (iv) the Intermediate Shareholder holds the direct legal and beneficial title to OrPower 19’s share capital; and (v) OrPower 19 holds the direct legal and beneficial title to the Borrower’s ordinary share capital; and (b) Elcosa holds the direct legal and beneficial title to the Preferred Nonvoting Share, in each case in the percentage amounts set forth next to their names on Schedule 3.01(d).

 

 

SECTION 4.04.     Consents.

 

OPIC shall have received Certified copies of all Consents listed in Part A of Schedule 4.04. 

 

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SECTION 4.05.     Site.

 

OPIC shall have received evidence in form and substance satisfactory to it that the Borrower, holds lawful, valid, exclusive and irrevocable title of ownership or other real property rights and lawful and valid use of the entire Site, together with lawful, valid, exclusive and irrevocable right of use and a possessory interest in all necessary easements and other rights of ingress and egress for the development, construction, operation and maintenance of the Project free and clear of any Liens other than Permitted Liens, and that such Site (together with such easements and rights of ingress and egress) is sufficient for the Borrower to develop, construct, operate and maintain the Project as contemplated by the Transaction Documents.

 

 

SECTION 4.06.     Security Interest. 

 

(a)     Each Lien created by the Security Documents shall be of first priority, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, and (i) to the extent it arises or attaches under the Uniform Commercial Code enacted in any jurisdiction in the U.S., shall be perfected, and (ii) in all other cases, shall be enforceable against the Borrower and third parties (including any holder of a subsequently established Lien). Each of the Security Documents shall be in full force and effect and (i) in the case of the Administration and Guaranty Trust Agreement, as soon as possible but no later than one-hundred twenty (120) days after execution thereof, (ii) in the case of the Share Pledge Agreement, the Honduran Share Trust Agreement and all other Security Documents, no later than the first Closing Date, shall have been duly filed, stamped, registered and recorded in every jurisdiction in which such filing, stamping, registration or recording is necessary to make valid and effective the Liens intended to be created thereby and the rights of OPIC thereunder, and OPIC shall have received evidence satisfactory to it that such filing, stamping, registration or recording has been made. In addition, the Borrower shall have executed all such other agreements or documents, or taken any actions that, in the opinion of counsel to OPIC, are required to secure the payment of all amounts due or to become due hereunder and under the Notes with valid, enforceable, first-priority Liens, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, on all of the Borrower’s assets, all of the shares of stock of the Borrower (other than the Preferred Nonvoting Share), the shares of capital stock of OrPower 19 and all other assets described in the applicable Security Documents.

 

(b)     The Honduran Asset Trust Agreement shall have been amended and restated to create the Administration and Guaranty Trust Agreement in form and substance satisfactory to OPIC.

 

 

SECTION 4.07.     Insurance.

 

OPIC shall have received all certificates of insurance and other documentation required pursuant to Section 6.03 and Schedule 6.03, to confirm that the Insurance Policies (and reinsurance, as applicable) required by such provisions are issued in accordance with such provisions, are in full force and effect without default, and show OPIC’s endorsement as additional insured and additional loss payee (other than to the extent explicit exceptions to those requirements are provided in such Schedule 6.03 for documents then in place and such other documents as are not yet required pursuant to Schedule 6.03), and such evidence shall have been reviewed by the Insurance Advisor and satisfactory to OPIC.

 

 

SECTION 4.08.     Auditors.

 

OPIC shall have received evidence that the Borrower has irrevocably instructed its auditors to communicate directly with OPIC regarding the Borrower’s accounts and operations pursuant to Section 6.05, provided, that, OPIC shall provide the Borrower with copies of its communications to the auditors, including notices and requests for information, and will provide the Borrower with reasonable prior written notice of any discussions or meetings and a reasonable opportunity to participate in the same.

 

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SECTION 4.09.     Legal Opinions.

 

OPIC shall have received acceptable written opinions, dated the Closing Date, satisfactory to OPIC in form and substance, of (a) Matamoros Batson & Asociados, its legal counsel in the Project Country, (b) Aguilar Castillo Love, legal counsel to the Borrower and the Ormat Parties in the Project Country, (c) Freshfields Bruckhaus Deringer US LLP, its legal counsel in the United States, with respect to OPIC funding matters, (d) Norton Rose Fulbright US LLP, legal counsel to the Borrower and the Ormat Parties, (e) Ogier, its legal counsel in the Cayman Islands, (f) Maples and Calder, legal counsel to the Borrower and the Ormat Parties in the Cayman Islands and (g) in-house counsel, or other acceptable counsel, to (i) the Supplier, (ii) Elcosa and (iii) ENEE; provided, that the written opinion of counsel to ENEE may be provided in the form of written certifications from ENEE’s in-house counsel.

 

 

SECTION 4.10.     Appointment of Agent.

 

OPIC shall have received evidence that the agent for service of process (a) referred to in Section 8.04(c) with relation to the Borrower and (b) required to be appointed by any other party pursuant to the Financing Documents has been duly appointed and holds such appointment without reservation until six (6) months after the Loan Maturity Date, together with evidence of the prepayment in full of the fees of such agent.

 

 

SECTION 4.11.     Accounts; Offshore Well Reserve Account.

 

Each of the Accounts shall have been established and, if applicable, funded in accordance with the Accounts Agreement or, if applicable, the Accounts Administration and Retention Agreement. OPIC shall have received evidence satisfactory to it that the Offshore Well Reserve Account is funded in an amount at least equal to $2,000,000 or will be funded to such level with proceeds of the first Disbursement.

 

 

SECTION 4.12.     Financial Projections.

 

OPIC shall have received financial projections for the Project through March 31, 2033, including projected financial statements prepared in English and in Dollars, which shall be satisfactory to OPIC in form and substance.

 

 

SECTION 4.13.     Construction COD Reports.

 

(a)     OPIC shall have received a copy of the Commercial Operation Start Certificate delivered as required under the ENEE PPA.

 

(b)     OPIC shall have received one or more certificate(s) from the Borrower, to OPIC’s satisfaction in its sole discretion (in consultation with the Independent Engineer), on the construction, completion, commissioning, testing and start-up of the Project, which shall include, among other things, confirmation that: (i) all Works have been completed except those listed in Schedule 4.13(b)(i) and paid for on commercially reasonable terms, except those listed in Schedule 4.13(b)(ii); (ii) all Works related to the Project have been carried out in a manner consistent with International Finance Corporation’s Performance Standards 1, 3, 4, 5, 6 and 8 (January 1, 2012) and (iii) all Works related to the Project have been carried out in a manner consistent with International Finance Corporation’s Performance Standard 2 (January 1, 2012), except as listed in Annex 1 to such certificate.

 

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(c)     In connection with preparation and review of reports or certificates from the Independent Engineer, including those contemplated in Section 5.13, the Borrower shall have provided to the Independent Engineer and OPIC, as applicable, such information, documents, reports and certificates as may be necessary or reasonably requested to assess the management during construction of environmental issues, worker rights and protections, health and safety, community engagement and consultation and cultural heritage management.

 

 

SECTION 4.14.     Environmental and Social Requirements.

 

The Borrower shall deliver all of the Environmental and Social Plans, each of which shall be prepared in accordance with the Environmental and Social Requirements.

 

 

SECTION 4.15.     ESAP.

 

The Borrower shall have satisfied the conditions specified in the ESAP that are applicable at the time of the first Disbursement.

 

 

SECTION 4.16.     Due Diligence.

 

OPIC shall have completed to its satisfaction its due diligence investigation of the Borrower, the Shareholders, the Project, and all other matters relating thereto, and the results of such investigations shall be satisfactory to OPIC.

 

 

SECTION 4.17.     Lien Waivers. 

 

With respect to all Project Costs incurred in connection with the Works after the Cut-Off Date but before the first Disbursement, the Borrower shall obtain Lien waivers, or evidence that there are no Liens (including through a legal opinion of counsel, a certification by the Borrower and each Key Contractor related to such Works, or a no lien certificate from the local registries, as applicable), and deliver them prior to the first Disbursement as required by Section 5.16.

 

SECTION 4.18.     Advisor Reports.

 

OPIC shall have received the final report of (a) the Independent Engineer, (b) the Insurance Advisor, (c) the Environmental and Social Consultants, and (d) OPIC’s Financial Model Auditor, each in form and substance satisfactory to OPIC.

 

 

SECTION 4.19.      Geothermal Resource.

 

The Borrower shall be in compliance with the Drilling Program and be in compliance with the Reservoir Monitoring Plan.

 

 

SECTION 4.20.      Equity Contributions; Subordinated Loans.

 

Equity contributions and subordinated loans from the Shareholders shall have been made directly or indirectly, including through Ormat Holding Corp., in an amount no less than $41,608,000, and otherwise in accordance with the Financial Plan, and each such contribution shall have been verified to the satisfaction of OPIC.

 

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SECTION 4.21.      Funding Arrangements.

 

Suitable arrangements shall have been made for funding the Loan (all agreements and documents required in connection with such funding arrangements are collectively referred to herein as the “Funding Documents”), which funding arrangements and Funding Documents shall be satisfactory to OPIC in form and substance, including without limitation satisfaction by the Borrower of all conditions precedent to the obligations of any other party to the Funding Documents and performance by the Borrower of all other obligations on its part to be performed prior to the making of the first Disbursement pursuant to any Financing Document.

 

 

SECTION 4.22.      Notices to SERNA and MINOSA.

 

OPIC shall have received evidence that the Borrower shall have provided written notice to SERNA and MINOSA of (a) the transactions contemplated by this Agreement and (b) the collateral assignment by the Borrower of the Borrower’s rights in the Operation Contract (in the case of SERNA) and the MINOSA Cooperation Agreement and the MINOSA PPA (in the case of MINOSA), to the trust described in the Administration and Guaranty Trust Agreement, which notice shall be in substantially the form of (x) with respect to SERNA, Exhibit H-1 and (y) with respect to MINOSA, Exhibit H-2.

 

ARTICLE V

CONDITIONS PRECEDENT TO EACH DISBURSEMENT

 

Unless OPIC otherwise agrees in writing, the obligation of OPIC to make each Disbursement (including the first Disbursement) is subject to the prior fulfillment or written waiver, to OPIC’s satisfaction in its sole discretion, of the following conditions precedent as of the date that is ten (10) days prior to such Closing Date and to their continued fulfillment on such Closing Date.

 

 

SECTION 5.01.     Disbursement Request. 

 

The Borrower shall have delivered a Disbursement Request in accordance with Section 2.01(b). As part of the Disbursement Request, the Borrower shall have provided to OPIC (a) its U.S. Taxpayer Identification Number or (b) an explanation as to why it does not have or need a U.S. Taxpayer Identification Number.

 

 

SECTION 5.02.     Representations and Defaults. 

 

Each of the representations and warranties of the Borrower and each Shareholder set forth in this Agreement and in each of the other Financing Documents to which either is a party shall be true and correct in all material respects (except with respect to any provision including the word “material” or words of similar import, with respect to which such representations and warranties shall be true and correct) on such Closing Date as if made on such Closing Date after giving effect to such Disbursement or if any such representation relates exclusively to an earlier date, as of such earlier date, and on such Closing Date no Default or Event of Default shall have occurred and be continuing or will result from the making of such Disbursement or from the application of the proceeds thereof.

 

 

SECTION 5.03.     No Event of Default; Change in Circumstances.

 

Both before and after giving effect to the Disbursement, no Default or Event of Default shall have occurred or be continuing and as of such Closing Date, nothing shall have occurred and be continuing that, in the reasonable judgment of OPIC, could be a Material Adverse Effect.

 

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SECTION 5.04.     Notes.

 

The Borrower shall have furnished OPIC with the executed Notes to be issued in connection with such Disbursement in accordance with Section 2.01(b).

 

 

SECTION 5.05.     Closing Certificate.

 

The Borrower shall have furnished OPIC with a certificate of an Authorized Officer, dated the Closing Date, substantially in the form of Exhibit D, which shall include Certified copies of all Material Project Documents entered into subsequent to the immediately preceding Closing Date (if any).

 

 

SECTION 5.06.     Financial Information and Project Progress.

 

(a)     Not less than ten (10) Business Days before such Closing Date, OPIC shall have received all Financial Statements, reports, and other information that the Borrower, pursuant to Section 6.05, would otherwise be required to furnish to OPIC on or before such Closing Date, and the Borrower shall have satisfied any conditions specified in the ESAP that are required to be fulfilled on or before such Closing Date.

 

(b)     Not more than ten (10) Business Days before such Closing Date, OPIC shall have received a certificate from the Borrower, satisfactory to OPIC in form and substance, confirming that, with respect to each report delivered pursuant to clause (a), such report is true and correct in all material respects as of such date or, if there has been a change in the matters set forth therein, updating the relevant information.

 

 

SECTION 5.07.     Payment or Reimbursement of Expenses.

 

All Fees and other amounts due, payable or reimbursable by the Borrower with respect to the Loan on or prior to such Closing Date shall have been paid in full.

 

 

SECTION 5.08.     Central Bank Registration; Consents.

 

OPIC shall have received evidence satisfactory to it, as may be required by Applicable Law with respect to each Disbursement other than the first Disbursement, that each such Disbursement does not require any registration or recordation with the central bank of the Project Country, and that the Borrower has taken all other steps necessary to obtain any Consents necessary with respect to such Disbursement or otherwise required as of or prior to such Disbursement, including those indicated in Part B of Schedule 4.04 to the extent they are then required for the then-current stage of the Project. OPIC shall have received Certified copies of such Consents or copies of such certificates, legal opinions, or other documents, satisfactory to OPIC in form and substance, as OPIC shall have requested to evidence such Consents.

 

 

SECTION 5.09.     DSR Requirement.

 

With respect to any Disbursement, OPIC shall have received evidence that funds or assets on deposit in the Offshore Debt Service Reserve Account are at least equal to the DSR Requirement.

 

 

SECTION 5.10.     Debt to Equity Ratio. 

 

After giving effect to such Disbursement, OPIC shall have received evidence satisfactory to it that the Debt to Equity Ratio shall be no greater than 75:25.

 

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SECTION 5.11.     Reservoir Monitoring Report. 

 

With respect to any Disbursement, OPIC shall have received the Reservoir Monitoring Report most recently required to be delivered pursuant to Section 6.01(g) hereof, and evidence satisfactory to it that the Borrower is in compliance with such Reservoir Monitoring Report.

 

 

SECTION 5.12.     Project Costs.

 

OPIC shall have (a) in consultation with the Independent Engineer, received, reviewed and approved the milestones reached and invoices received in respect of Project Costs incurred (i) after the Cut-Off Date, in connection with the first Disbursement, and (ii) since the previous Disbursement, in connection with any subsequent Disbursement and (b) received written confirmation from the Borrower’s auditor confirming that the Project Costs incurred through the end of the fiscal quarter most recently ended prior to such Disbursement are in accordance with the accounting records of the Borrower.

 

SECTION 5.13.     Independent Engineer Certificate.

 

OPIC shall have received from the Independent Engineer, no later than ten (10) Business Days prior to a Disbursement Request, a certificate in the form of Exhibit E and otherwise in form and substance satisfactory to OPIC.

 

 

SECTION 5.14.     Funding.

 

Suitable arrangements shall have been made for funding such Disbursement in accordance with the Funding Documents, which funding arrangements and Funding Documents shall be satisfactory to OPIC in form and substance, including without limitation satisfaction by the Borrower of all conditions precedent to the obligations of any other party to the Funding Documents and performance by the Borrower of all other obligations on its part to be performed prior to the making of such Disbursement pursuant to any Transaction Document.

 

 

SECTION 5.15.     Insurance.

 

OPIC shall have received certificates of insurance and reinsurance or binders and other documents required for OPIC to confirm, in consultation with the Insurance Advisor, that all Insurance Policies as are then required pursuant to Section 6.03 and Schedule 6.03 are in full force and effect.

 

SECTION 5.16.     Lien Waivers.

 

If Project Costs are incurred in connection with the Works in an amount greater than the amount set forth in the then current Annual Operating Budget, then OPIC shall have received copies of all Lien waivers, or evidence that there are no Liens (including through a legal opinion of counsel, a certification by the Borrower and each Key Contractor, or a no lien certificate from the local registries, as applicable), related to the Works required to be obtained pursuant to Section 6.01(f) hereof.

 

SECTION 5.17.     Other Documents.

 

OPIC shall have received any document required to have been delivered pursuant to Article VI and any such other certificates, opinions, agreements, and documents, and translations of any of the foregoing, and evidence of stamping or other local law formalities required, in each case customary for transactions of the type contemplated by this Agreement, each satisfactory to OPIC in form and substance, as it may reasonably request. 

 

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ARTICLE VI

AFFIRMATIVE COVENANTS

 

Unless OPIC otherwise agrees in writing, so long as the Commitment remains outstanding or until all amounts due and to become due hereunder and under the Notes shall have been indefeasibly paid in full, the Borrower agrees as follows:

 

 

SECTION 6.01.     Company Operations.

 

(a)     The Borrower shall duly and punctually perform its obligations under each of the Borrower Documents.

 

(b)     The Borrower shall in accordance with and subject to the terms of the ENEE PPA, the MINOSA PPA, the Consents set forth in Part A of Schedule 4.04 (Consents), the Consents set forth in Part B of Schedule 4.04 (Consents), in each case, to the extent then applicable to the Project, applicable legal requirements and Good Industry Practice, promptly remedy defects in the Works in accordance with Good Industry Practice.

 

(c)     The Borrower shall comply with the Reservoir Monitoring Plan and maintain the geothermal resource of the Project, the wells and the surface facilities related thereto at all times in compliance with its obligations under the ENEE PPA and in accordance with Good Industry Practice.

 

(d)     The Borrower shall conduct its business and operations in accordance with (i) Good Industry Practice and on an arm’s-length basis, with due diligence and efficiency and under the supervision of qualified and experienced management, (ii) the conditions to the Borrower’s warranties under the ENEE PPA, (iii) the terms and conditions of all Insurance Policies, (iv) all requirements of Applicable Law, all Consents set forth in Part A of Schedule 4.04 (Consents) and all Consents set forth in Part B of Schedule 4.04 (Consents) to the extent then applicable to the Project, and (v) the terms of the Material Project Documents (in respect of the Warranty Agreement, only to the extent there are obligations outstanding), the MINOSA PPA and its Charter Documents, in the case of the MINOSA PPA, to the extent necessary to avoid a Material Adverse Effect and, in the case of each of the other foregoing cases, in all material respects. The Borrower shall repair, replace, and protect each of its assets (ordinary wear and tear excepted) so that its business and the Project can be conducted in accordance with the Material Project Documents and Good Industry Practice.

 

(e)     Except as otherwise expressly permitted under this Agreement, the Borrower shall (i) maintain and preserve its existence as a sociedad anónima de capital variable under the laws of Honduras and all rights, privileges and franchises necessary in the normal conduct of its business, and necessary to perform all of its obligations, and exercise all rights, discretion and remedies available to it, under or in connection with all Transaction Documents with due diligence in accordance with Good Industry Practices, and (ii) engage in activities related to the ownership, construction, exploration and development of the Project’s geothermal resource and the erection, installation, commissioning, testing, operation and maintenance of the Project.

 

(f)     If Project Costs are incurred in connection with the Works after the first Disbursement in an amount greater than the amount set forth in the then current Annual Operating Budget, then the Borrower shall obtain Lien waivers, or evidence that there are no Liens (including through a legal opinion of counsel, a certification by the Borrower and each Key Contractor, or a no lien certificate from the local registries, as applicable), related to such Works within seven (7) days of payment for any substantial portion of such Work. Any contractor or supplier performing Works after the Cut-Off Date shall be listed in Part A of Schedule 3.01(x) and an estimate of all amounts owed or owing to such contractor or supplier shall be listed in Part B of Schedule 3.01(x), in each case as required pursuant to Section 3.01(x).

 

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(g)     (i) Within thirty (30) days of the end of each fiscal quarter following the Effective Date until the True-Up Date, and (ii) semi-annually, on each April 30 and October 31 following the True-Up Date until the Loan Maturity Date, the Borrower shall provide a Reservoir Monitoring Report to OPIC.

 

 

SECTION 6.02.     Maintenance of Rights and Compliance with Laws.

 

The Borrower shall: (a) obtain, maintain in full force and effect, and renew or cause to be obtained, maintained and renewed all Consents, leases and other rights in land, and franchises necessary for the conduct of its business and the performance of its obligations hereunder and under the other Transaction Documents as of such time as they are needed for the then-current stage of the Project or Borrower’s operations; (b) conduct its business in compliance with all Environmental Laws, Corrupt Practices Laws, Worker Rights Requirements, Consents and with its Charter Documents and with all other Applicable Laws and Consents; and (c) duly pay before they become overdue all Taxes levied or imposed in any jurisdiction upon its property, earnings, or business that, if not paid, could be a Material Adverse Effect, and all Indebtedness and other liabilities in a timely manner in accordance with normal business practices and with the terms governing the same, except amounts being contested in good faith by appropriate proceedings diligently pursued for which adequate reserves shall have been set aside in accordance with Accounting Standards. The Borrower shall promptly deliver to OPIC a Certified copy of any other Consent obtained after the date of first Disbursement.

 

 

SECTION 6.03.     Maintenance of Insurance. 

 

The Borrower shall:

 

(a)      deliver to OPIC all certificates of insurance and reinsurance, binders and copies of Insurance Policies on or prior to the time when such documents are required pursuant to part 5 of Schedule 6.03;

 

(b)     maintain or cause to be maintained in effect at all times insurance, with respect to the Project, against such risks and hazards, in such amounts, and in such form, as is usually carried by companies of a similar size that are engaged in the same or a similar business and that own similar properties in the same or similar geographic area as the Project, and in any event in compliance with the minimum insurance requirements set out in Schedule 6.03;

 

(c)     apply all Insurance Proceeds in accordance with the terms of the Accounts Agreement and, if applicable, the Accounts Administration and Retention Agreement;

 

(d)     enforce its rights under the Material Project Documents and the MINOSA PPA, to the extent that it has such rights, so as to ensure that any Person (other than the Borrower) required to provide insurance obtains and maintains Insurance Policies as required thereby; and

 

(e)     observe and comply with each other obligation and agreement set forth in Schedule 6.03.

 

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SECTION 6.04.     Accounting and Financial Management.

 

(a)     The Borrower shall (i) comply with Corrupt Practices Laws; (ii) maintain adequate accounting, management information and cost control systems; (iii) prepare its Financial Statements in accordance with Accounting Standards; (iv) engage PricewaterhouseCoopers, or other independent internationally recognized accountants satisfactory to OPIC, as its regular independent auditors; (v) notify OPIC of any change in such accountants and the reason therefor; and (vi) instruct such accountants to communicate directly with OPIC regarding the Borrower’s accounts and operations. Without limiting the foregoing, the Borrower shall maintain the systems described in clause (ii) and related management and accounting policies and controls that are sufficient to provide reasonable assurances of compliance with applicable Corrupt Practices Laws and the prevention of Prohibited Payments.

 

(b)     The Borrower shall comply with the applicable requirements of (i) the Anti-Money Laundering Laws, (ii) OFAC Regulations, and (iii) all other applicable export control, anti-boycott and economic sanctions laws of the U.S. and other jurisdictions relating to its business and facilities.

 

 

SECTION 6.05.     Financial Statements and Other Information.

 

At its cost, the Borrower shall furnish to OPIC each of the following:

 

(a)     within forty-five (45) days after the end of each of the first three fiscal quarters of each Fiscal Year, its unaudited Financial Statements, all Certified by a Financial Officer as being true and complete and fairly presenting in all material respects the financial position, results of operations and cash flows of the Borrower as of the dates indicated and for the periods specified, subject to the absence of disclosures normally made in footnotes and to customary year-end adjustments, together with such officer’s certificate substantially in the form of Exhibit F (i) that his or her review has not disclosed the existence of any Default or Event of Default, or, if any such Default or Event of Default then exists, specifying the nature and period of existence thereof and what action the Borrower has taken or proposes to take with respect thereto and (ii) demonstrating in reasonable detail the Borrower’s compliance with the financial ratios set forth in Section 6.10 and the basis for such calculations;

 

(b)     within one-hundred twenty (120) days after the end of each Fiscal Year, its audited Financial Statements, together with (i) an auditor’s report in accordance with the Accounting Standards and (ii) a statement from the Borrower’s auditors to the effect that based on their examination, as of the date of the audited financial statements, the Borrower was in compliance with the financial ratios under Section 6.10;

 

(c)     within forty-five (45) days after the end of each fiscal quarter, a Certified report setting forth in reasonable detail all transactions between the Borrower, on the one hand, and any of the Shareholders or any Affiliate of any such Shareholder, on the other hand;

 

(d)     semi-annually, beginning on the first to occur of June 30 or December 31, an Operating Report substantially in the form set out in Schedule 6.05(d) (Operating Report);

 

(e)     not later than June 30 of each year, beginning on the first June 30 to occur following the first anniversary of the first Closing Date, the Self-Monitoring Questionnaire;

 

(f)     on or prior to the True-Up Date, a certification (expected to be included in the request for final Disbursement) that the Borrower has completed the noise assessment referenced in Section 3.1 of the ESAP and is in compliance with the noise standards contained within IFC 2007 Environmental, Health, and Safety General Guidelines;

 

(g)     within six (6) months of the end of the Commitment Period, a certificate of an Authorized Officer of the Borrower, setting forth in reasonable detail the Project Costs to which the proceeds of the final Disbursement were applied, substantially in the form of Exhibit G; and

 

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(h)     copies of all other annual or interim reports and management letters submitted to the Borrower by its independent accountants, and such other information and data with respect to the Borrower’s or the Shareholders’ operations, condition (financial or otherwise), assets, and prospects (including supporting information as to compliance with this Agreement) as OPIC may reasonably request from time to time.

 

 

SECTION 6.06.     Annual Operating Budget.

 

(a)     As soon as it is available, but in any event at least thirty (30) days prior to the commencement of each Fiscal Year, the Borrower shall submit to OPIC for approval by OPIC the Annual Operating Budget for such Fiscal Year prepared by the Borrower. Each Annual Operating Budget shall be consistent with the Financial Model and be accompanied by a certificate of an Authorized Officer of the Borrower certifying that the budget is a reasonable estimate for the period covered thereby and is in compliance with the requirements of this Section 6.06.

 

(b)     A proposed Annual Operating Budget shall become effective on the later of (i) the first day of the relevant Fiscal Year and (ii) the date OPIC advises the Borrower that OPIC has approved such Annual Operating Budget. If OPIC does not approve an Annual Operating Budget, OPIC shall advise the Borrower of the items that are disapproved and the reason for such disapproval.

 

(c)     With respect to those aspects of any Annual Operating Budget that are not approved, the Borrower and OPIC shall continue to discuss such aspects in good faith and the Annual Operating Budget for the preceding Fiscal Year related to such disapproved items shall be applicable and shall for all purposes hereof be deemed to be part of the approved Annual Operating Budget for the current Fiscal Year until such time as such aspects of the Annual Operating Budget for the current Fiscal Year have been approved in writing by OPIC.

 

 

SECTION 6.07.     Access to Records; Inspection; Meetings.

 

The Borrower shall, upon OPIC’s reasonable prior request, give, or cause to be given, to any representatives of OPIC access, during business hours, to the Project, the Site and the Borrower’s business and permit them to (a) examine, copy, and make extracts from, any and all records and documents in the possession or subject to the control of the Borrower relating to its operations and financial affairs, (b) inspect any of its facilities or properties, and (c) communicate with employees, agents, or contractors of the Borrower who have or may have knowledge of matters with respect to which OPIC seeks information. If an Event of Default shall have occurred and be continuing and if OPIC so requests, the Borrower shall give OPIC not less than five (5) Business Days’ notice of, and shall permit an OPIC representative to attend (either in person, telephonically or by other electronic means), as a non-voting observer, each formal meeting of the Borrower’s shareholders and of its directors. In conducting any visit or inspection under this Section 6.07, OPIC and its representatives shall abide by and comply with all applicable health, safety and environmental policies and insurance requirements relating to the Project of which the Borrower notifies OPIC in writing reasonably in advance of such visit or inspection.

 

 

SECTION 6.08.     Notice of Default and Other Matters.

 

The Borrower shall notify OPIC promptly, but in any event within two (2) Business Days in general and within 24 hours when required pursuant to Section 6.11(c), of (i) the occurrence, to its knowledge, of any Default, (ii) the occurrence of any Event of Default that is continuing and any steps the Borrower is taking to remedy such situation, (iii) any legal or arbitral proceedings against the Borrower or any Shareholder or, to its Knowledge, any Material Project Party involving claims that either (x) relate to the Project and individually or in the aggregate at any given time exceed the equivalent of $500,000 or (y) otherwise could reasonably be expected to be a Material Adverse Effect and (iv) the occurrence of any other condition or event (including action by any Governmental Authority) that could reasonably be expected to be a Material Adverse Effect and any steps the Borrower is taking to remedy such situation.

 

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SECTION 6.09          Security Documents.

 

(a)     The Borrower, at its own cost, shall take all actions necessary to maintain each of the Security Documents in full force and effect and enforceable in accordance with its terms and to preserve OPIC’s security, including (i) maintaining all filings and recordations, (ii) paying fees and other charges, (iii) issuing supplemental documentation and continuation statements, (iv) discharging all Liens or other claims adversely affecting the rights of OPIC in the property subject to any Security Document other than Permitted Liens, (v) publishing or otherwise delivering notice to third parties, (vi) delivery of title documents, and (vii) taking all actions necessary to ensure that all after-acquired property of the Borrower is subject to a valid and enforceable, perfected first priority Lien, subject only to liens with statutory priority under Applicable Law with respect to claims of labor, tax and software licenses, in favor of OPIC within one-hundred twenty (120) days after the acquisition of any real property and thirty (30) days after the acquisitions of any equipment or movable goods.

 

(b)     Without limiting the generality of subsection (a) above, in the event that any Governmental Authority issues or adopts any new Applicable Law relating to the creation, preservation, registration, perfection, protection or enforcement of security interests in assets of the same character as those covered by the Security Documents, or issues any clarifications of any existing Applicable Law relating to the same, the Borrower shall, at its own cost, execute and deliver all such additional amendments, assignments, certificates, instruments, notifications, or other documents and give further assurances and do all such other acts and things as OPIC shall reasonably request or as may be provided for in such new Applicable Law or any clarifications of any existing Applicable Law, to create, preserve, register, perfect, protect or enforce the security interest provided for in the Security Documents. All actions to be performed by the Borrower shall be taken by the Borrower within (i) one-hundred twenty (120) in the case of the Administration and Guaranty Trust Agreement, and (ii) fifteen (15) days in the case of the Share Pledge Agreement and Honduran Share Trust Agreement after the issuance and applicability of such Applicable Law or clarification to OPIC’s security interest as provided in the preceding sentence (whether by the receipt of notice from OPIC or otherwise).

 

 

SECTION 6.10.     Financial Ratios; DSR Requirement; Well Reserve Requirement.

 

(a)     The Borrower shall maintain at all times following COD, but calculated at the end of the first full fiscal quarter occurring thereafter, (i) a ratio of Cash Flow for the most recently completed four (4) consecutive full fiscal quarters (or the number of full fiscal quarters completed after COD), taken as a single accounting period, to Debt Service for the most recently completed four (4) consecutive full fiscal quarters (or lesser number of quarters if fewer quarters have been completed as contemplated above), taken as a single accounting period, of not less than 1.1 to 1 (such ratio, the “Historic DSCR”); and (ii) a ratio of Cash Flow for the next succeeding four (4) consecutive full fiscal quarters, taken as a single accounting period, to Debt Service for the next succeeding four (4) consecutive full fiscal quarters of not less than 1.1 to 1 (such ratio, the “Projected DSCR”).

 

(b)     At all times after the establishment of the Offshore Debt Service Reserve Account pursuant to Accounts Agreement, the Borrower shall maintain funds or assets on deposit in the Offshore Debt Service Reserve Account with a market value at least equal to the DSR Requirement.

 

(c)     At all times following the first Disbursement until the True-Up Date, the Borrower shall maintain funds or assets on deposit in the Offshore Well Reserve Account with a market value at least equal to $2,000,000.      

 

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SECTION 6.11.     Environmental, Health and Safety Compliance.

 

(a)     The Borrower shall comply with, and shall conduct its business and operations, and maintain its assets, equipment, property, leaseholds, and other facilities in compliance with (i) the Environmental and Social Requirements, and (ii) all Applicable Laws regarding the environment, health and safety, and social performance. In cases in which land is not voluntarily purchased from existing land owners at market rates, the Borrower shall follow international best practices described in the International Finance Corporation’s Performance Standard Number 5 for Land Acquisition and Involuntary Resettlement. The Borrower shall maintain or cause to be maintained all Consents required for the Project under Applicable Law or the Environmental and Social Requirements relating to: (A) air emissions; (B) discharges to surface water or ground water; (C) noise emissions (it being understood that the Borrower will be able to assess and confirm compliance with applicable noise standards only upon completion of the noise assessment referenced in Section 3.1 of the ESAP); (D) solid or liquid waste disposal; (E) the use, generation, storage, transportation, or disposal of toxic or hazardous substances or wastes; and (F) other environment, health and safety, and social performance matters.

 

(b)     The Borrower shall implement and comply at all times with the Environmental and Social Plans and the requirements of the ESAP (it being understood that the Borrower will be able to assess and confirm compliance with applicable noise standards only upon completion of the noise assessment referenced in Section 3.1 of the ESAP). The Borrower shall not amend the Environmental and Social Plans without OPIC’s prior written consent.

 

(c)     The Borrower shall notify OPIC immediately, and in no event later than twenty-four (24) hours after the Borrower becomes aware, through the exercise of reasonable due diligence and care, of any accident directly or indirectly caused by the Project, occurring at the Site or affecting any Worker engaged in their official duties that results in the loss of life or that has, or that could reasonably be foreseen to have a material adverse impact on the environment. The Borrower shall submit to OPIC within thirty (30) days after the occurrence of such event a summary report thereof.

 

(d)     The Borrower shall require each Project Contractor, with respect to itself and any of its Project Subcontractors, to comply with the requirements described in Sections 6.11(a), 6.11(b) and 6.11(c).

 

(e)     The Borrower shall follow international best practices described in International Finance Corporation’s Performance Standard Number 5 – Land Acquisition and Involuntary Resettlement where the Project results in physical and/or economic displacement of any person(s).

 

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(f)     The Borrower shall deliver to OPIC within ninety (90) days of the end of the calendar year on which this Agreement is executed, and annually thereafter within such ninety (90) day period, a report in form and substance satisfactory to OPIC summarizing the Project’s compliance with the Environmental and Social Requirements over the preceding twelve (12) months. Each report shall include:

 

(i) measures taken to operate the Project in a manner consistent with the Environmental and Social Requirements;

 

(ii) results of all environmental monitoring or sampling activity (including noise, wastewater discharge, water use, water quality and air emissions) required to be submitted to any Governmental Authority pursuant to Applicable Law or that may be required or requested by OPIC under the Financing Documents;

 

(iii) summary of training provided to employees;

 

(iv) material accidents impacting the environment or workers, including significant spills, lost time incidents and corrective actions implemented to address these accidents;

 

(v) emergency response incidents;

 

(vi) any recommended revisions to the ESMS;

 

(vii) any compliance actions taken by the host country or local government;

 

(viii) summary of stakeholder engagement activities and of community development activities undertaken by the Borrower;

 

(ix) listing of stakeholder grievances and resolutions, and of worker grievances and resolutions; and

 

(x) security incidents.

 

(g)     All plans, procedures, notices, reports and other deliverables required under Section 4.15 and this Section 6.11 shall be delivered electronically to eia@opic.gov and copied to notices@opic.gov.

 

 

SECTION 6.12.     Worker Rights.

 

(a)     The Borrower shall:

 

(i)      not take any actions to prevent Workers from lawfully exercising their right of association and their right to organize and bargain collectively, or take any actions, or otherwise interfere with, coerce, or penalize, on the basis of the right of association or on the basis of organization and collective bargaining activities or membership, that may result in any form of retaliation, including, but not limited to, the termination, suspension, demotion, blacklisting, or transfer of any Worker by the Borrower, or by an officer, agent, or representative thereof;

 

(ii)      observe Applicable Laws relating to a minimum age for employment of children, acceptable conditions of work with respect to minimum wages, hours of work, and occupational health and safety;

 

(iii)      not use forced or compulsory labor, including, but not limited to any form of slavery or bonded labor;

 

(iv)      explain, document, and make available in writing and orally to each Worker, information regarding all of their working conditions and terms of employment, including their entitlement to wages and any benefits and the Worker Rights Requirements, prior to the later of (A) thirty (30) days after the date hereof or (B) each Worker commencing work;

 

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(v)      not employ persons, formally or informally, under the age of fifteen (15) for general work or under the age of eighteen (18) for work involving hazardous activity, which is work that by its nature or the circumstances in which it is carried out is likely to harm the health, safety, or morals of those persons;

 

(vi)     not make employment decisions or discriminate with respect to aspects of the employment relationship on the basis of personal characteristics unrelated to inherent job requirements, including gender, race, religion, nationality, political opinion, or social or ethnic origin;

 

(vii)     not require hourly or quota-based wage Workers to work more than 48 standard hours of work per week and that all Workers shall be guaranteed a weekly 24-hour rest period;

 

(viii)     pay all wages, including all legally-mandated bonus pay and premium pay for overtime work, in full, in legal tender, and in a timely fashion, to Workers except when Workers have agreed otherwise;

 

(ix)     ensure that Workers have the right to remove themselves from hazardous situations without jeopardizing their continued employment;

 

(x)     with respect to security personnel and security arrangements, be guided by the principles of proportionality and good international practice in relation to hiring, rules of conduct, training, equipping, and monitoring of such Workers and by applicable law, and engage such personnel in a manner consistent with the International Finance Corporation’s Performance Standard 4 paragraphs 12-14;

 

(xi)     implement and comply at all times with the Worker Rights Action Plan set forth in Schedule 6.12; and

 

(xii)     require each Project Contractor, with respect to itself and any of its Project Subcontractors, to comply with the foregoing requirements; provided, that if any Applicable Law, or collective bargaining agreement, imposes a requirement that is more protective of worker rights than any of the foregoing requirements, the Borrower shall, and shall cause the Project Contractor(s) and Project Subcontractor(s) to, observe such Applicable Law or collective bargaining agreement (the requirements set forth in this Section 6.12(a), collectively, the “Worker Rights Requirements”).

 

(b)     In the event that information concerning non-compliance or potential non-compliance with the Worker Rights Requirements (a “Worker Rights Non-Compliance”) comes to the attention of a responsible officer of the Borrower, the Borrower shall give prompt notice thereof to OPIC’s Director of Labor and Human Rights by email to the following address labor@opic.gov. The Borrower shall use all reasonable efforts, including remediation, to cure or to cause the relevant Project Contractor or Project Subcontractor to cure, or prevent the recurrence of, any Worker Rights Non-Compliance.

 

(c)     Notwithstanding the foregoing, the Borrower shall not be responsible for any Worker Rights Non-Compliance resulting from the actions of a government.

 

 

SECTION 6.13.     Additional Project Documents.

 

The Borrower shall promptly deliver to OPIC a Certified copy of any Project Document entered into after the first Closing Date, or any amendment to any Project Document pursuant to Section 7.03, which Project Document shall be in form and substance satisfactory to OPIC.

 

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SECTION 6.14.     Drilling Program.

 

The Borrower shall comply with the provisions of the Drilling Program and shall use commercially reasonable efforts to complete the Drilling Program, and confirm the completion thereof to OPIC, by the date on which the True-Up Confirmation is provided.

 

 

SECTION 6.15.     SERNA Direct Agreement.

 

The Borrower shall, within six (6) months of the first Closing Date, deliver to OPIC the SERNA Direct Agreement, duly executed by SERNA and the Borrower.

 

 

ARTICLE VII

NEGATIVE COVENANTS

 

Unless OPIC otherwise agrees in writing, so long as the Commitment remains outstanding or until all amounts due and to become due hereunder and under the Notes shall have been indefeasibly paid in full, the Borrower agrees as follows:

 

 

SECTION 7.01.     Liens. 

 

The Borrower shall not, directly or indirectly, create, assume, or otherwise permit to exist any Lien on any of its assets, whether now owned or hereafter acquired, or in any proceeds or income therefrom, except for the following Liens (collectively, the “Permitted Liens”):

 

(a)     the Liens created under the Security Documents or pursuant to any other Financing Documents;

 

(b)     tax, mechanic’s, worker’s or other like Liens arising by mandatory provision of law securing obligations incurred in the ordinary course of business that are not yet overdue or that are being contested or litigated in good faith and for which reserves in an amount equal to or exceeding the amount of the Liens for Taxes, assessments or charges have been made in accordance with Accounting Standards;

 

(c)     any Liens that are created in order to continue an administrative or judicial proceeding in which the Borrower is a party and wishes in good faith to present a defense in accordance with Applicable Law and which do not constitute an Event of Default, provided, that (i) at all times there is a stay of execution, (ii) bonds or other security have been provided in an amount equivalent to the value of the property attached and (iii) the Borrower is diligently proceeding with its defense;

 

(d)     any minor easements, rights of way and other similar encumbrances incurred in the ordinary course of business that, in each case, do not and will not adversely impact the value of the Project or give any Person the right to interfere with the construction, operation, ownership and maintenance of the Project and do not and will not create, in any respect, rights preferred to those legally or contractually held by the Borrower; and

 

(e)     the Liens listed on Schedule 7.01.

 

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SECTION 7.02.     Indebtedness. 

 

The Borrower shall not incur, assume, guarantee, or permit to exist, or otherwise become liable for Indebtedness except:

 

(a)     the Loan;

 

(b)     Indebtedness fully subordinated to the Loan on terms satisfactory to OPIC;

 

(c)     Indebtedness consisting of suppliers of goods or services incurred in connection with the construction and operation of the Project, provided, that, such Indebtedness is expressly included in the Annual Operating Budget or otherwise approved by OPIC;

 

(c)    Indebtedness consisting of trade credit from suppliers of goods or services incurred in the ordinary course of business in an aggregate amount not to exceed $250,000 and on terms requiring payment in full in not more than ninety (90) days;

 

(d)     Indebtedness consisting of unsecured short-term credit facilities not exceeding $250,000, in the aggregate, from commercial banks requiring repayment in not more than one hundred and eighty (180) days;

 

(e)     the Priority Fee and the Remainder Fee; and

 

(f)     Indebtedness (other than to any of the Ormat Parties or any Affiliate thereof) listed on Schedule 7.02;

 

provided, that in no event shall any Indebtedness described above, when incurred, cause the Borrower to fail to meet the financial ratios set forth in Section 6.10.

 

 

SECTION 7.03.     No Alteration or Assignment of Agreements.

 

(a)     The Borrower shall not terminate, amend, grant any waiver of, or assign any of the respective duties or obligations under, any provision of any Borrower Document or any Consent (other than amendments or waivers, either to correct manifest error or which are of a stylistic, minor, or purely technical nature and do not change materially any Person’s rights or obligations; provided, that the Borrower shall promptly give OPIC notice, and provide OPIC with a copy, of such amendment or waiver).

 

(b)     The Borrower shall not make any changes to the assumptions in the Financial Model for the Project without OPIC’s prior written consent.

 

(c)     The Borrower shall not compromise or settle any claim against any Person, the compromise or settlement of which in the manner contemplated by the Borrower would materially reduce the amount of any payment due to the Borrower or could reasonably be expected to adversely affect the Borrower’s ability to perform its obligations under the Transaction Documents.

 

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SECTION 7.04.     Restricted Payments and Shareholder Payments. 

 

The Borrower shall not make, or incur any obligation to make, any Restricted Payment or any Shareholder Payment; provided, however, that after the Borrower has made at least one (1) Principal Installment, the Borrower may (subject to the mandatory prepayment provisions set forth in Section 2.05(b)) make Restricted Payments and Shareholder Payments if, but only if, after giving effect to each such Restricted Payment or Shareholder Payment, (i)  no Default or Event of Default shall have occurred and be continuing or will occur as a result of such Restricted Payment or Shareholder Payment, and (ii) the Historic DSCR and the Projected DSCR shall not be less than 1.2 to 1. Notwithstanding the foregoing provisions of this Section 7.04, the Borrower may make (w) Shareholder Payments approved pursuant to the then applicable Annual Operating Budget and payments from proceeds of the Disbursement(s) of the Loan to reimburse the Sponsor and the Shareholders for any equity contributions (including shareholder loans) made prior to the date of COD and which were in excess of the amounts required to be contributed by the Sponsor and the Shareholders under the Financing Documents (as confirmed by OPIC in consultation with its consultants), (x) payment of the Priority Fee in accordance with the terms of the Administration and Guaranty Trust Agreement, (y) payment of the Development Fee to the Shareholders and (z) on an annual basis, payments in respect of the Parent Support Services.

 

 

SECTION 7.05.     Conduct of Business with Affiliates.

 

The Borrower shall not conduct any business with or enter into any business transaction involving any Shareholder or any Affiliate of any Shareholder, except on an arm’s-length basis and subject to the reporting requirement set forth in Section 6.05(c).

 

 

SECTION 7.06.      No Sale of Assets; Mergers. 

 

The Borrower shall not:

 

(a)     sell, assign, convey, lease, or otherwise dispose of its assets, except for the sale of power and renewable energy credits (if any) and the replacement of a capital asset with a capital asset of equal or greater utility or value at the time of the disposition and the disposition of inventory in the ordinary course of business or worn-out, obsolete, uneconomic, or surplus property;

 

(b)     dissolve, liquidate, or otherwise cease to do business; or

 

(c)     merge or consolidate with any Person.

 

 

SECTION 7.07.     Lease Obligations.

 

The Borrower shall not enter into any agreement or arrangement to acquire by lease the use of any property or equipment of any kind, if the annual rental payable under such lease, when aggregated with the annual rentals payable under all other leases already entered into by the Borrower, would exceed $350,000 or its equivalent in any Fiscal Year with the exception of any leases listed on Schedule 7.07 or otherwise approved by OPIC (including in the Annual Operating Budget).

 

 

SECTION 7.08.     Ordinary Conduct of Business.

 

The Borrower shall not:

 

(a)     engage in any business other than the Project;

 

(b)     change the Project or the Site in any material respect;

 

(c)     change its Charter Documents (other than for amendments or modifications, either to correct manifest error or which are of a stylistic, minor, or purely technical nature and do not change the Charter Documents in any material respect; provided, that the Borrower shall promptly give OPIC notice, and provide OPIC with a copy, of such amendment or modification);

 

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(d)     change its name or take any action that might adversely affect the Liens created by the Security Documents;

 

(e)     enter into any partnership, profit-sharing or royalty agreement, or other similar arrangement whereby the Borrower’s income or profits are, or might be, shared with any other Person;

 

(f)     (i) create any subsidiaries, (ii) acquire by purchase or otherwise any of the shares of share capital, other equity interests, or assets of another Person, or (iii) make or permit to exist any loans or advances to, or assume, guarantee, endorse, or otherwise become directly or contingently liable for, any obligation or Indebtedness of, any Person other than the endorsement of negotiable instruments for collection in the ordinary course of business and the prudent investment of idle surplus funds in readily marketable Dollar-denominated debt securities;

 

(g)     fail to maintain its corporate existence and its right to carry on its operations; or

 

(h)     adopt, establish, maintain, sponsor, administer, contribute to, participate in, or incur any liability under or obligation to contribute to, any Employee Benefit Plan, Guaranteed Pension Plan, or Multiemployer Plan or incur any liability to provide post-retirement welfare benefits, except such liability to provide post-retirement welfare benefits as may be required by Applicable Law or other non-material post-retirement welfare benefits.

 

 

SECTION 7.09.     OFAC Compliance.

 

(a)     The Borrower shall ensure that none of the Borrower, Borrower’s directors, members of senior management or the Shareholders or Elcosa shall be a Person included in any OFAC List or otherwise subject to sanctions under OFAC Regulations.

 

(b)     The Borrower shall not, and shall ensure that none of its directors, officers, employees, Affiliates, agents, or Persons acting on its behalf will, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of proceeds of the Loan to fund any trade, business, or other activities (i) involving or for the benefit of any Person included in any OFAC List or otherwise subject to sanctions under OFAC Regulations, or (ii) that could result in any Person (including OPIC) being in breach of OFAC Regulations, becoming included in any OFAC List, or otherwise becoming subject to sanctions under OFAC Regulations.

 

 

SECTION 7.10.     Prohibited Payments.

 

Neither the Borrower nor any Person acting on behalf of the Borrower shall make any Prohibited Payment.

 

 

SECTION 7.11.     Accounts.

 

The Borrower shall not establish or maintain any account with a bank or other financial institution other than the Accounts and the Citi Onshore O&M Account, provided that the latter account is used solely for the purpose of funding expenses of the Borrower denominated in Lempiras and (a) deposits to the Citi Onshore O&M Account shall not exceed the aggregate amount requested by the Borrower prior to any quarter in respect of such expenses reasonably anticipated for such quarterly period and approved in writing by OPIC.

 

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SECTION 7.12          Project; Site.

 

The Borrower shall not use, maintain, operate, or occupy, or allow the use, maintenance, operation, or occupancy of, any portion of the Site or the Project, other than in accordance with the Transaction Documents and pursuant to the Project. Without limiting the foregoing, the Borrower shall not exercise any rights or options to acquire real property, whether under the MINOSA Cooperation Agreement or otherwise, without the prior written consent of OPIC.

 

 

SECTION 7.13          Project Documents.

 

The Borrower shall not, without OPIC’s prior written consent, do any of the following: (a) enter into any Project Documents other than the Material Project Documents and any other Project Documents consented to in writing by OPIC, (b) consent to or otherwise accept or approve any replacement of the Joint Guarantee, (c) commence delivery of power under the MINOSA PPA, (d) deliver notice to ENEE as to any Committed Power Capacity for Third Parties under the ENEE PPA, (e) deliver notice to MINOSA stating that the conditions precedent have been fulfilled to the Borrower’s satisfaction or that the Borrower has been exempted in writing from fulfilling them or (f) supply or consent to supply to MINOSA more than 3 MWe of power in any month; provided that for the foregoing clauses (c), (d) and (e), such prior written consent from OPIC shall not be unreasonably conditioned.

 

ARTICLE VIII

DEFAULTS AND REMEDIES

 

SECTION 8.01.     Events of Default.

 

Each of the following events or circumstances shall constitute an “Event of Default”:

 

(a)     Payment Default. The Borrower fails to pay when due any amount payable to OPIC pursuant to this Agreement, any Note, or any other Financing Document.

 

(b)     Cross-Default. (i) The Borrower fails to pay any amount due on any of its Indebtedness (including principal, interest and any premium or fee thereon, but excluding Indebtedness evidenced by this Agreement and the Notes) (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) having an aggregate principal amount (including undrawn revolving or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $350,000, and such failure continues beyond the applicable cure period, if any, (ii) a default occurs under any agreement or instrument evidencing, or under which the Borrower has outstanding at the time, any such Indebtedness and such default is continuing beyond the applicable cure period, if any, if the effect of such default is to accelerate or to permit the acceleration of the maturity of such Indebtedness, or (iii) any such Indebtedness shall be declared to be due and payable, or required to be prepaid, prior to the stated maturity thereof as a result of a default or other similar adverse event.

 

(c)     Representation Default. Any representation or warranty made or deemed made by or on behalf of the Borrower or any Shareholder in any Financing Document proves to have been incorrect in any material respect when made or deemed made.

 

(d)     Covenant Default. The Borrower fails to comply with any covenant or provision set forth in Sections 6.08, 6.09, 6.10, 6.11 (except as provided in Section 8.01(f)) or 6.12 (except as provided in Section 8.01(e)) or Article VII.

 

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(e)     Worker Rights Non-Compliance. With respect to any Worker Rights Non-Compliance caused by a Project Contractor or Project Subcontractor, the Borrower fails to cause the relevant Project Contractor or Project Subcontractor to cure, or prevent the recurrence of, any Worker Rights Non-Compliance and such failure continues for ninety (90) days after the first occurrence of such Worker Rights Non-Compliance.

 

(f)      Approvals Default. Any Consent necessary for the execution, delivery, or performance of any Transaction Document or for the validity or enforceability of any of the Borrower’s or any Shareholder’s obligations under any of the Transaction Documents is not effected or given or is withdrawn or ceases to remain in full force and effect and (unless the lack of such Consent could have a Material Adverse Effect) such Consent remains not effected or given or is withdrawn or ceases to remain in full force and effect for a period of thirty (30) days or more.

 

(g)     Obligation Default. The Borrower fails to comply with or perform any agreement or covenant contained herein other than those referred to in Sections 8.01(a), (b), (c), (d), (e) or (f) above and such failure continues for thirty (30) days after the occurrence thereof; provided, that, if (i) the Borrower has diligently sought to remedy such breach or default but through its good faith efforts has been unable to do so, and (ii) such breach or default is capable of cure within sixty (60) days, then such thirty (30) day period shall be extended to such date, not to exceed a total of sixty (60) days, as shall be necessary for the Borrower to cure such breach or defaults.

 

(h)     Transaction Document Default. Any Transaction Document at any time for any reason (i) ceases to be in full force and effect (other than upon expiration in accordance with its terms when fully performed or upon termination and replacement, which termination or replacement shall be with OPIC’s prior written consent if such Transaction Document is a Material Project Document or the MINOSA PPA), (ii) is declared to be void or is repudiated, (iii) is suspended or revoked, or terminated (other than upon expiration in accordance with its terms when fully performed or upon termination and replacement with OPIC’s prior written consent), (iv) the validity or enforceability thereof is at any time contested in writing by the Borrower, any Shareholder or any other counter-party (other than OPIC), (v) ceases to give or provide the respective rights, titles, remedies, powers, or privileges intended to be created thereby, or (vi) with respect to the Ormat Guaranty only, any amendment, deletion or other modification takes effect without the prior written consent of OPIC; provided that there shall be no Event of Default hereunder in respect of any Material Project Document referred to in Sections 4.01(c)(ix) and (xi) or any other Project Document that is not a Material Project Document (each, a “Replaceable Project Document”) if any such Replaceable Project Document is restored or replaced with an equivalent Project Document (together with any replacement Direct Agreement if applicable) with the original counterparty to such Replaceable Project Document or another Person of similar or superior creditworthiness and experience as such original counterparty at the time of such replacement, in each case, on terms reasonably satisfactory to OPIC within 45 days of the occurrence of such event or circumstance.

 

(i)     Security Default. (i) Any Security Document, once executed and delivered, ceases at any time for any reason to provide the Liens, rights, titles, interests, remedies, powers or privileges created thereby, (ii) any Lien created in any portion of the collateral pledged pursuant to the Security Documents shall cease to be effective or fail to have the priority originally created under the Security Documents, (iii) the validity of the Security Documents or the applicability thereof to the obligations of the Borrower hereunder or any part thereof, shall be disaffirmed in writing by or on behalf of the Borrower, or (iv) OPIC’s security interest or other rights in any portion of the collateral pledged pursuant to the Security Documents shall terminate in any manner other than that contemplated by the Financing Documents.

 

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(j)     Other Agreements Default. The Borrower, any Shareholder or any party to a Material Project Document fails to comply with or perform any of its material obligations or undertakings set forth in any Transaction Document to which it is a party (other than this Agreement or the Notes) and such failure continues beyond the applicable cure period, if any; provided that there shall be no Event of Default with respect to a Material Project Party under a Replaceable Project Document if such Material Project Party is replaced with another Person reasonably satisfactory to OPIC within 45 days of the occurrence of such event or circumstance.     

 

(k)     Expropriation Default. Any Governmental Authority condemns, nationalizes, seizes, or otherwise expropriates any substantial portion of the assets or the capital stock of the Borrower or takes any action that would prevent the Borrower from carrying on any material part of its business or operations.

 

(l)     Voluntary Bankruptcy Default. The Borrower or any Material Project Party (other than ENEE or SERNA) (i) applies for, or consents to the appointment of, a receiver, trustee, custodian, intervenor, or liquidator of itself or of all or a substantial part of its assets, (ii) files a voluntary petition in bankruptcy, admits in writing that it is unable to pay its debts as they become due, or generally fails to pay its debts as they become due, (iii) makes a general assignment for the benefit of creditors, (iv) files a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, or insolvency laws, (v) files an answer admitting the material allegations of, or consents to, or defaults in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding where such action or failure to act will result in a determination of bankruptcy or insolvency against it, or (vi) takes any corporate action to authorize any of the foregoing; provided that in the case of a Material Project Party, there shall be no Event of Default if such Material Project Party is replaced with another Person reasonably satisfactory to OPIC within 45 days of the occurrence of such event or circumstance.

 

(m)     Involuntary Bankruptcy Default. Without its application, approval, or consent, a proceeding is instituted in any court of competent jurisdiction or by or before any government or governmental agency of competent jurisdiction, seeking in respect of the Borrower or any Material Project Party (other than ENEE or SERNA) adjudication in bankruptcy, reorganization, dissolution, winding up, liquidation, a composition or arrangement with creditors, a readjustment of Indebtedness, the appointment of a trustee, receiver, liquidator, or the like of it or of all or any substantial part of its property or assets, or other like relief in respect of it under any bankruptcy, reorganization, or insolvency law; and, if such proceeding is being contested by it in good faith, the same continues undismissed for a period of sixty (60) days; provided that there shall be no Event of Default with respect to a Material Project Party under a Replaceable Project Document if such Material Project Party is replaced with another Person reasonably satisfactory to OPIC within 45 days of the occurrence of such event or circumstance.

 

(n)     Final, Non-Appealable Judgment Default. A final and non-appealable judgment or litigation settlement for the payment of money in an aggregate amount in excess of $1,000,000 (with respect to the Borrower) or $5,000,000 (with respect to any Shareholder or Elcosa) or the equivalent of such amount in another currency is rendered against, or entered into by, any of the Borrower, the Shareholders or Elcosa, and such judgment is not satisfied or discharged within ten (10) days of entry; provided that in the case of Elcosa, the Sponsor and OII, any such judgment could reasonably be expected to have a material and adverse effect on the performance of any obligations it may have under the Transaction Documents to which it is a party or otherwise with respect to the Project. 

 

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(o)     Judgment Default. A judgment for the payment of money in an aggregate amount in excess of $1,000,000 (with respect to the Borrower) or $5,000,000 (with respect to OrPower 19, the Intermediate Shareholder or Elcosa) or the equivalent of such amount in another currency is rendered against, or entered into by, any of the Borrower, OrPower 19, the Intermediate Shareholder or Elcosa, and such judgment is not appealed in a timely manner and, in any case, within ninety (90) days; provided that in the case of Elcosa, OrPower 19 and the Intermediate Shareholder, any such judgment could reasonably be expected to have a material and adverse effect on the performance of any obligations it may have under the Transaction Documents to which it is a party or otherwise with respect to the Project; and provided, always, that such appeal must have the effect of staying the enforcement of such judgment pending the relevant appeal. 

 

(p)     Material Adverse Effect Default. Any event, development or circumstance shall have occurred that, in the reasonable determination of OPIC, has or could reasonably be expected to have a Material Adverse Effect.

 

(q)     Political Violence Default. Any acts of war (whether declared or undeclared), revolution, insurrection, civil war, strife of a lesser degree, terrorism, or sabotage occur that cause the destruction, disappearance or physical damage of a substantial portion of the assets of the Borrower or prevent the Borrower from carrying on any material part of its business or operations.

 

(r)     U.S. Persons Default. At any time prior to the end of the Commitment Period, U.S. Persons acceptable to OPIC shall cease to retain an ultimate beneficial ownership interest in the Borrower of at least twenty-five percent (25%).

 

(s)     Change of Control Default. Any Change of Control of the Borrower occurs without the prior approval of OPIC.

 

(t)     Right to Site Default. Except pursuant to the Security Documents, the Borrower ceases to have the right to possess and use, or shall be prevented from possessing or using, the Site or any material portion thereof for the purpose of owning, constructing, maintaining and operating the Project in the manner contemplated by the Transaction Documents, and such loss of right is or could reasonably be expected to be a Material Adverse Effect.

 

(u)     Abandonment Default. The Borrower voluntarily Abandons the Project.

 

 

SECTION 8.02.     Remedies upon Event of Default.

 

(a)     Except as otherwise provided in Section 8.02(b), if any Event of Default has occurred and is continuing, OPIC may at any time do any one or more of the following (i) suspend or terminate the Commitment, (ii) declare, by written demand for payment, any portion or all of the Loan to be due and payable, whereupon such portion or all of the Loan, together with interest accrued thereon and all other amounts due under the Financing Documents, shall immediately mature and become due and payable, without any other presentment, demand, diligence, protest, notice of acceleration, or other notice of any kind, all of which the Borrower hereby expressly waives, or (iii) except as required by Applicable Law, without notice of default or demand, proceed to protect and enforce its rights and remedies by appropriate proceedings or actions, whether for damages or the specific performance of any provision of any Financing Document, or in aid of the exercise of any power granted in any Financing Document, or by law, or may proceed to enforce the payment of any Note. In addition, upon the occurrence of an Event of Default referred to in Section 8.01(e), OPIC may require the Borrower to terminate, or cause the relevant Project Contractor to terminate, such Project Contractor’s or Project Subcontractor’s Project Contract, as the case may be.

 

(b)     Upon the occurrence of an Event of Default referred to in Sections 8.01(m) or (n), (i) the Commitment shall automatically terminate, and (ii) the Loan, together with interest accrued thereon and all other amounts due under the Financing Documents, shall immediately mature and become due and payable, without any other presentment, demand, diligence, protest, notice of acceleration, or other notice or action of any kind, all of which the Borrower hereby expressly waives.

 

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SECTION 8.03.     Arbitration.

 

(a)     Any Dispute shall be settled by arbitration in accordance with the Rules; provided, however, that this agreement to arbitrate Disputes shall not include the arbitration of (i) any Excluded Claims; and (ii) any Disputes that are subject to a pending action, suit or proceeding brought by OPIC in accordance with Section 8.04.

 

(b)     Arbitration pursuant to this Section 8.03 is not a waiver of and shall not impair the enforcement rights of OPIC with respect to any Lien or the right of OPIC to exercise any other similar remedy under this Agreement or any other Financing Document to which the Borrower is a party, pursuant to Section 8.04(a) or otherwise, and such enforcement by OPIC shall not be deemed to be inconsistent with or a violation of the arbitration provisions of this Section 8.03.

 

(c)     Any awards issued by the Arbitral Tribunal shall be final and binding on the Arbitration Parties; any orders so issued shall be binding on the Arbitration Parties. Judgment upon any award issued by the Arbitral Tribunal may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Arbitration Party or its assets. The Borrower hereby submits to the jurisdiction of the United States District Court for the Southern District of New York for the limited purpose of enforcing this agreement to arbitrate.

 

            (d)     The Arbitral Tribunal shall have no jurisdiction to grant any interim measure that limits or prevents, or seeks to limit or prevent, OPIC from exercising any enforcement right with respect to any Lien or enforcing any similar remedy under this Agreement or any other Financing Document to which the Borrower is a party, including without limitation any enforcement action pursuant to Section 8.04. The Borrower covenants and agrees not to seek any such interim measure, either in any arbitration pursuant to this Section 8.03 or otherwise.

 

(e)     Notwithstanding Section 9.03, this Section 8.03 and any arbitration pursuant thereto shall be governed by Title 9 (Arbitration) of the United States Code.

 

 

SECTION 8.04.     Borrower Consent to Suit; Exclusive Forum for Certain Actions. 

 

(a)     Notwithstanding Section 8.03, OPIC in its sole discretion shall have the option at any time and from time to time to bring against the Borrower any action, suit or proceeding in respect of any Dispute, in any of (i) the courts of the State of New York in the County of New York or the United States District Court for the Southern District of New York, or (ii) the courts in any other jurisdiction where the Borrower or any of its property may be found; provided, however, with regard to any Dispute that has been referred to arbitration pursuant to Section 8.03 by the Borrower, OPIC may, in its discretion, initiate an action, suit or proceeding as provided herein in lieu of such arbitration and in respect of such Dispute, so long as OPIC exercises its option to do so prior to the last day on which OPIC’s statement of defense (or equivalent submission) in respect of such Dispute is to be submitted.

 

(b)     The Borrower hereby: (i) irrevocably waives any present or future objection to the venue of any such action, suit or proceeding, and irrevocably consents and submits unconditionally to the non-exclusive jurisdiction of any such court for itself and in respect of any of its property; (ii) irrevocably waives any claim in any such court that any such action, suit, or proceeding brought therein has been brought in an inconvenient forum; (iii) agrees that final judgment against it in any such action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction within or outside the United States of America by suit on the judgment or otherwise, a certified or exemplified copy of which shall be conclusive evidence of the fact and of the amount of its obligation; and (iv) covenants and agrees not to resist enforcement of any such final judgment in any jurisdiction where OPIC commences enforcement proceedings.

 

37

 

 

(c)     Prior to the first Disbursement, the Borrower shall irrevocably designate and appoint an agent satisfactory to OPIC for service of process in the County of New York, New York under this Agreement and any other Financing Document governed by the laws of the State of New York, with respect to any action or proceeding in New York, as its authorized agent to receive, accept, and confirm receipt of, on its behalf, service of process in any such proceeding, and shall provide OPIC with evidence of the prepayment in full of the fees of such agent until six (6) months after the Loan Maturity Date. The Borrower agrees that service of process, writ, judgment or other notice of legal process upon said agent shall be deemed and held in every respect to be effective personal service upon it. The Borrower shall maintain such appointment (or that of a successor satisfactory to OPIC) continuously in effect at all times while the Borrower is obligated under this Agreement or any Note. Nothing herein shall affect OPIC’s right to effect service of process in any other manner permitted by Applicable Law.

 

(d)     Any enforcement action, suit, or other judicial, administrative or arbitral proceeding by the Borrower against OPIC (or the United States government) in respect of an Excluded Claim shall be brought exclusively in a United States federal court of competent jurisdiction in the District of Columbia.

 

 

SECTION 8.05.     Judgment Currency.

 

This is an international loan transaction in which the specification of Dollars is of the essence and such currency shall be the currency of account in all events. The payment obligations of the Borrower to OPIC under any Financing Document shall only be discharged by an amount paid in another currency, whether pursuant to a judgment or otherwise, to the extent of the amount in Dollars received by OPIC (after any premium and costs of exchange) on the prompt conversion to Dollars in the U.S. of the amount so paid in another currency under normal banking procedures. In the event that any payment by the Borrower in another currency, whether pursuant to a judgment or otherwise, upon conversion and transfer, does not result in the payment of the amount of Dollars then due at the place such amount is due, OPIC shall be entitled to demand immediate payment of and shall have a separate cause of action against the Borrower for the additional amount necessary to yield the amount of Dollars then due. In the event that OPIC upon the conversion of a payment in another currency into Dollars receives an amount greater than that to which it was entitled, the Borrower shall be entitled to prompt reimbursement of the excess amount.

 

 

SECTION 8.06.     No Immunity.

 

The Borrower represents and warrants that it is subject to civil and commercial law with respect to its obligations under each of the Borrower Documents, that the making and performance of such Borrower Documents and the borrowings by the Borrower pursuant hereto constitute private and commercial acts rather than governmental or public acts, and that neither the Borrower nor any of its properties or revenues has any right of immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, set-off, execution of a judgment, or from any other legal process with respect to its obligations under such Borrower Documents. To the extent that the Borrower may hereafter be entitled, in any jurisdiction in which judicial or arbitral proceedings may at any time be commenced with respect to any Borrower Document, to claim for itself or its revenues or assets any such immunity, and to the extent that in any such jurisdiction there may be attributed to the Borrower such an immunity (whether or not claimed), the Borrower hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity. The foregoing waiver of immunity shall have effect under the United States Foreign Sovereign Immunities Act of 1976.

 

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ARTICLE IX

MISCELLANEOUS

 

SECTION 9.01.     Notices.

 

Except as provided in Sections 6.11(g) and 6.12(b), each notice, demand, or other communication relating to this Agreement shall be in writing, shall be hand-delivered or sent prepaid by mail or overnight delivery service or e-mail (with a copy by mail to follow, receipt of which copy shall not be required to effect notice), and shall be deemed duly given when sent to the following addresses:

 

To the Borrower:

Geotérmica Platanares, S.A. de C.V.

Plaza Saavedra, Modulo #20 y 21

Bo. Mercedes, 1a Calle NE 3a Av NE, Frente a Hotel VIP Copan

Santa Rosa de Copán, Honduras, Centroamerica

HONDURAS

 

Attn.:   Elio Orozco

E-mail: eorozco@ormat.com

Phone: 504-2662-1066

 

with a copy to:

 

Ormat Technologies, Inc.

6225 Neil Road

Reno, Nevada 89511

Attn: Chief Financial Officer

 

 

To OPIC:

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

United States of America

Attn.: Vice President, Structured Finance and Insurance

And attn.: Managing Director, Portfolio Management Division

E-mail:     notices@opic.gov

Re: Platanares Geothermal Project (Honduras) Transaction No. 9000003553

 

Either party may, by written notice to the other, change the address to which such notices, demands, or other communications should be sent to it. No notice to OPIC, including notices delivered pursuant to Sections 6.11(g) and 6.12(b), shall be effective unless such notice includes the project name and number, as listed above, and, prior to the first Disbursement, attention to Vice President, Structured Finance and Insurance and, subsequent to the first Disbursement, attention to Managing Director, Portfolio Management Division.

 

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SECTION 9.02.     English Language.

 

All documents to be furnished or communications made under each of the Financing Documents shall be in English or, if in another language, shall be accompanied by a Certified translation into English, which translation shall govern between the Borrower and OPIC.

 

 

SECTION 9.03.     Governing Law.

 

THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.

 

 

SECTION 9.04.     Succession; Assignment; Benefit.

 

This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto; provided, however, that the Borrower shall not, without the prior written consent of OPIC, assign or delegate all or any part of its interest herein or obligations hereunder. This Agreement is for the sole benefit of the Borrower and OPIC, and no other Person (other than the Indemnified Persons and permitted successors or assigns of the parties hereto) shall be a direct or indirect beneficiary of, be entitled to rely hereon, or have any direct or indirect cause of action or claim in connection with this Agreement or any of the Transaction Documents.

 

 

SECTION 9.05.     Survival of Agreements.

 

Each agreement, representation, warranty, and covenant contained or referred to in this Agreement shall survive any investigation at any time made by OPIC and shall survive all disbursements of the Loan, except for changes permitted hereby, and, except as otherwise provided in this Section, shall terminate only when all amounts due or to become due under the Financing Documents are indefeasibly paid in full. Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in Sections 2.07, 2.08(a), and 9.10 shall survive the payment in full of principal and interest hereunder and under the Notes.

 

 

SECTION 9.06.     Integration; Amendments.

 

This Agreement, including the Exhibits and Schedules hereto, and the agreements referred to herein embody the entire understanding of the parties and supersede all prior negotiations, understandings, and agreements between them with respect to the subject matter hereof. The provisions of this Agreement may be waived, supplemented, or amended only by an instrument in writing signed by the parties hereto.

 

 

SECTION 9.07.     Severability.

 

If any provision of this Agreement is prohibited or held to be invalid, illegal, or unenforceable in any jurisdiction, the parties hereto agree to the fullest extent permitted by law that it shall not affect the validity, legality, and enforceability of the other provisions of this Agreement and shall not render such provision prohibited, invalid, illegal, or unenforceable in any other jurisdiction. If, and to the extent that, any obligation of the Borrower (including that under Section 9.10) is unenforceable for any reason it agrees, independently of any other obligation hereunder, to make the maximum contribution to the payment and satisfaction thereof as is permissible under Applicable Law.

 

40

 

 

SECTION 9.08.     No Waiver.

 

(a)     No failure or delay by OPIC in exercising any right, power, or remedy shall operate as a waiver thereof or otherwise impair any of its rights, powers, or remedies. No single or partial exercise of any such right, power, or remedy shall preclude any other or further exercise thereof or the exercise of any other legal right, power or remedy. No waiver of any such right, power, or remedy shall be effective unless given in writing.

 

(b)     The rights, powers, or remedies provided for herein are cumulative and are not exclusive of any other rights, powers or remedies provided by law. The assertion or employment of any right, power or remedy hereunder, or otherwise, shall not prevent the concurrent assertion of any other right, power or remedy.

 

 

SECTION 9.09.     WAIVER OF JURY TRIAL.

 

THE BORROWER AND OPIC EACH IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM ESTABLISHED BY ANY FINANCING DOCUMENT.

 

 

SECTION 9.10.     Indemnity.

 

The Borrower shall, at all times, indemnify OPIC and its directors, officers, employees, and agents (each, an “Indemnified Person”) against, and hold each Indemnified Person harmless from, any losses, claims, damages, liabilities, penalties, judgments, or other costs (including costs, fees, and expenses incurred by or imposed on any Indemnified Person in defending, analyzing, settling, or resolving any of the foregoing, and the expenses associated with the making of any affirmative claim in connection therewith) of any nature whatsoever to which an Indemnified Person may become subject (“Loss”) arising out of, in connection with, or related to the Loan (including any actual or proposed use of the proceeds of the Loan), this Agreement, any other Financing Document, the Project, or any actual or prospective litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any Indemnified Person is a party thereto (the “Borrower Indemnity”). The Borrower Indemnity shall not apply to the extent that a court or arbitral tribunal with jurisdiction over the Loss and each Indemnified Person who has a Loss in connection therewith renders a final determination that the Loss resulted from (a) the gross negligence or willful misconduct of the Indemnified Person, or (b) OPIC’s failure to perform any act required of it relating to the Loan including under any Financing Document. The Borrower Indemnity is independent of and in addition to (i) any rights of any party hereto in connection with any Loss, and (ii) any other agreement, and shall survive the execution, modification, and amendment of this Agreement and the other Financing Documents, the expiration, cancellation, or termination of the Commitment, the disbursement and repayment of the Loan, and the provisions of any other indemnity. Any exclusion of an obligation to pay any amount under this Section shall not affect the requirement to pay such amount under any other Section hereof or under any other agreement. OPIC and each Indemnified Person shall have the right to control its, his, or her defense; provided, however, that each Indemnified Person shall: (A) notify the Borrower in writing as soon as practicable of any Loss and (B) keep the Borrower reasonably informed of material developments with respect thereto. In exercising the right and power to control his, her, or its actions in connection with a Loss, including a decision to settle any such Loss, each Indemnified Person shall, taking into account the nature and policies of such Indemnified Person (I) consult with the Borrower, and (II) act as such Indemnified Person would act if the Loss or settlement were to be paid by such Indemnified Person. The Borrower acknowledges and agrees that each Indemnified Person is an express, third-party beneficiary of the Borrower’s obligations under this Section 9.10.

 

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SECTION 9.11.     Cooperation; Loan Servicing.

 

At its sole cost, OPIC may assign or delegate all or part of the responsibility for monitoring, managing, administrating or servicing the Loan to a Person that shall act as OPIC’s agent and asset manager in addressing such matters as may be required in connection with the servicing of the Loan. Any Person who so acquires the right to monitor, manage, administrate or service the Loan shall benefit from the indemnity set forth in Section 9.10 (as if the name of such Person had been stated in such provision).

 

 

SECTION 9.12.     Further Assurances.

 

The Borrower shall execute and deliver to OPIC such additional documents and take such additional action as OPIC may require to carry out the purposes of the Financing Documents, to cause the Financing Documents to be duly registered, legalized, notarized, and stamped in any applicable jurisdiction, and to preserve and protect OPIC’s rights as contemplated herein or therein.

 

 

SECTION 9.13.     Counterparts.

 

This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed an original and all of which together shall constitute one and the same instrument.

 

 

SECTION 9.14.     Waiver of Litigation Payments.

 

In the event that any action or lawsuit is initiated by or on behalf of OPIC against the Borrower or any other party to any Transaction Document, the Borrower, to the fullest extent permissible under Applicable Law, irrevocably waives its right to, and agrees not to request, plead, or claim that OPIC and its successors, transfers, and assigns (any such Person, an “OPIC Plaintiff”) post, pay, or offer, any cautio judicatum solvi bond, litigation bond, or any other bond, fee, payment, or security measure provided for by any provision of law applicable to such action or lawsuit (any such bond, fee, payment, or measure, a “Litigation Payment”), and the Borrower further waives any objection that it may now or hereafter have to an OPIC Plaintiff’s claim that such OPIC Plaintiff should be exempt or immune from posting, paying, making, or offering any such Litigation Payment.

 

 

Section 9.15.      Conflict of Terms.

 

 Except as otherwise provided in this Agreement or any of the other Financing Documents by specific reference to the applicable provisions of this Agreement, if any provision contained in this Agreement conflicts with any provision in any of the other Financing Documents, the provision contained in this Agreement shall govern and control.

 

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed and delivered on its behalf by its authorized representative as of the date first above written.

 

	
			 

				
			GEOTÉRMICA PLATANARES, S.A. DE C.V.

				
			 

			
	 	 	 	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Name:

				
			 

				
			 

			
	 	 	 	 
	 	Its:	 	 
	 	Authorized Officer	 
	 	 	 
	 	 	 
	 	
			OVERSEAS PRIVATE INVESTMENT

			CORPORATION

				 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 
	 	Name:	 	 
	 	 	 	 
	 	Its:	 	 

 

43

 

 

)

) ss:

)

 

 

 

 

I, ______________________, a notary public in and for ___________________, DO HEREBY CERTIFY that ______________________, the ________________ of Geotérmica Platanares, S.A. de C.V. (the “Borrower”), personally appeared before me in said ___________________, is personally known to me and known by me to be the person who executed on behalf of the Borrower the Finance Agreement annexed hereto, and who acknowledged the same to be his or her own free act and deed and the free act and deed of the Borrower.

 

Given under my hand and notarial seal this _____ day of __________, 20___.

 

 

 

	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

 

)

) ss:

)

 

 

 

 

I, ______________________, a notary public in and for ___________________, DO HEREBY CERTIFY that ______________________, the ________________ of OVERSEAS PRIVATE INVESTMENT CORPORATION (“OPIC”), personally appeared before me in said ___________________, is personally known to me and known by me to be the person who executed on behalf of the Borrower the Finance Agreement annexed hereto, and who acknowledged the same to be his or her own free act and deed and the free act and deed of the Borrower.

 

Given under my hand and notarial seal this _____ day of __________, 20___.

 

 

 

	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

 

SCHEDULE X

 

Defined Terms and Rules of Interpretation

 

1.     Defined Terms. As used in this Agreement, including the Exhibits and Schedules hereto, the following terms shall have the following meanings.

 

“Abandon” means (a) cease to have the right to possess and use the Site for the Project in the manner contemplated in the Transaction Documents or (b) voluntarily suspend all or substantially all of its activities in connection with the Project, in each case for a period of thirty (30) or more consecutive days (other than for force majeure, maintenance, government order or as required by Applicable Law).

 

“Account Control Agreement” means the account control agreement by and among OPIC, MUFG Union Bank, N.A., and the Borrower, in form and substance satisfactory to OPIC.

 

“Accounting Standards” means GAAP, unless OII is required to modify its accounting standards in accordance with SEC rules and regulations.

 

“Accounts” means, collectively, the Offshore Accounts, the Onshore Accounts and any other of the Borrower’s bank accounts, if any, that are pledged to OPIC, including pursuant to the Administration and Guaranty Trust Agreement.

 

“Accounts Administration and Retention Agreement” means the agreement for the administration of the Onshore Accounts (other than the Citi Onshore O&M Account) (Contrato de Administración y Retención de Cuentas) entered into, or to be entered into, in form and substance satisfactory to OPIC, among the Onshore Administration and Guaranty Trustee, the Borrower, and OPIC.

 

“Accounts Agreement” means the agreement to be entered into by and among the Borrower, OPIC and MUFG Union Bank, N.A., relating to control and administration of the Offshore Accounts.

 

“Act of Political Violence” means any act of war (whether declared or undeclared), revolution, insurrection, civil war, strife of a lesser degree, terrorism, or sabotage.

 

“Actual Equity Contribution” has the meaning set forth in the Share Retention Agreement.

 

“Administration and Guaranty Trust Agreement” means the trust agreement (Contrato de Fideicomiso de Administración y Garantía Enmendado y Reexpresado), dated as of November 27, 2013, among the Borrower, OrPower 19 and the Onshore Administration and Guaranty Trustee, to be amended and restated by the parties thereto and Elcosa on or prior to the first Closing Date. 

 

“Affiliate” means, with respect to any Person, (a) any other Person that is directly or indirectly controlled by, under common control with, or controlling such Person; (b) any other Person owning beneficially or controlling five percent (5%) or more of the equity interest in such Person; (c) any officer or director of such Person; or (d) any spouse or relative of such Person. As used herein, the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of partnership interests or voting securities, by contract or otherwise.

 

3

 

 

“Agreement” has the meaning set forth in the preamble.

 

“Annual Operating Budget” means, for any Fiscal Year, the operating budget (including the then required levels of maintenance capital expenditures) and operating plan for such Fiscal Year prepared by the Borrower in the form of Schedule 6.06, submitted by the Borrower to OPIC and approved by OPIC.

 

“Anti-Money Laundering Laws” means (a) the Bank Secrecy Act, as amended by, inter alia, the USA PATRIOT Act of 2001, (Pub. L. No. 107-56) and (b) any other law, regulation, order, decree or directive of any relevant jurisdiction having the force of law and relating to anti-money laundering.

 

“Applicable Law” means, with respect to a given Person on a given date, any constitution, statute, law, rule, regulation, ordinance, judgment, order, decree, Consent of a Governmental Authority, or any published directive, guideline, requirement or other governmental restriction that has the force of law, or any determination by, or interpretation of any of the foregoing by, any judicial authority, that is binding on such Person whether in effect as of the date hereof or as of any date thereafter.

 

“Arbitral Tribunal” means the arbitral tribunal constituted in accordance with the Rules.

 

“Arbitration Parties” means each of (i) OPIC, (ii) the Borrower and (iii) any other party to an arbitration pursuant to Section 8.04; and “Arbitration Party” means any of them, as the context requires.

 

“Authorized Officer” means, with respect to any Person, any officer designated in such Person’s Charter Documents or otherwise in writing as having been authorized to execute and deliver any of the Transaction Documents.

 

“Board of Governors of the Federal Reserve System” means the Board of Governors of the Federal Reserve System, which is an agency of the United States of America responsible for the analysis of domestic and international financial and economic developments, and for regulating the operations of the Federal Reserve Banks and payment systems.

 

“Borrower” has the meaning set forth in the preamble to this Agreement.

 

“Borrower Documents” means each of the Transaction Documents to which the Borrower is or will be a party.

 

“Borrower Indemnity” has the meaning set forth in Section 9.10.

 

“Business Day” means any day other than (a) a Saturday, Sunday, or day on which commercial banks are authorized by law to close in the City of New York or Washington, D.C., United States of America, (b) with respect to any communication to OPIC, a day on which OPIC is not open for business, and (c) with respect to any Disbursement or payment to OPIC, a day on which OPIC or the United States Department of the Treasury is not open for business.

 

“Cancellation Fee” has the meaning set forth in Section 2.06(b).

 

4

 

 

“Cash Flow” of the Borrower, for any period, means the amount resulting from (a) its Net Income for such period, plus (b) all interest expense, any expense for any Fees, and depreciation, amortization, deferred income taxes, and other non-cash expenses for such period (but only to the extent deducted in determining Net Income), minus (c) the amount of net increase or net decrease in Working Capital between the first day of such period and the last day of such period, minus (d) any capital expenditure (excluding any expenditure prior to COD to the extent such expenditure was financed with the proceeds of the Loan, equity contributions or paid from reserves) incurred in such period for repair or replacement of a capital asset.

 

“Cayman Pledge Agreements” means (a) the Equitable Mortgage Over Shares in OrPower 19, Inc. to be executed on or before the first Closing Date between Intermediate Shareholder and OPIC and (b) the Amended and Restated Equitable Mortgage Over Shares in OrPower 19, Inc., to be executed on or before the first Closing Date between Intermediate Shareholder and Elcosa.

 

“Certificate Interest Rate” has the meaning set forth in the OPIC Funding Agreement.

 

“Certified” means, in respect of any document, that such document is being delivered accompanied by a certification from an Authorized Officer that it is true and complete (or a true and complete copy, as the case may be), including all amendments to date, and, if applicable, is in full force and effect in accordance with its terms as of the date of such certification.

 

“Change of Control” means:

 

(a)     before the Closing Date on which the final Disbursement is made, (i) the failure of the Sponsor to be listed on the New York Stock Exchange; (ii) the failure of the Sponsor, directly or indirectly, to own one hundred percent (100%) of the issued and outstanding share capital and economic interests of OII; (iii) the failure of OII, directly or indirectly, to own one hundred percent (100%) of the issued and outstanding share capital and economic interests of Ormat Holding Corp.; (iv) the failure of Ormat Holding Corp., directly or indirectly, to own one hundred percent (100%) of the issued and outstanding share capital and economic interests of the Intermediate Shareholder; (v) the failure of the Intermediate Shareholder to own one hundred percent (100%) of the issued and outstanding share capital and economic interests of OrPower 19; or (vi) the failure of OrPower 19 to own one hundred percent (100%) of the issued and outstanding ordinary capital stock (excluding the Preferred Nonvoting Share) and one hundred percent (100%) of the economic interests of the Borrower (provided that OrPower 19’s transfer of its shares in the Borrower pursuant to the Honduran Share Trust Agreement shall not be deemed a Change of Control); and

 

(b)     at all times from and after the Closing Date on which the final Disbursement is made, the failure of the Sponsor, directly or indirectly (including through assignment of shares in the Borrower pursuant to the Honduran Share Trust Agreement), to own at least 50.1% of the issued and outstanding share capital and economic interests of, and to exercise control over, the Borrower.

 

“Charter Documents” means, in respect of any Person, such Person’s founding act, charter, articles of incorporation and by-laws, memorandum and articles of association, statute, or similar instrument.

 

“Citi Onshore Account Pledge Agreement” means the account pledge agreement (Contrato de Control y Administración de Cuentas) in form and substance satisfactory to OPIC, governed by the laws of Honduras to be entered into by the Borrower and OPIC, creating a pledge over the Citi Onshore O&M Account.

 

“Citi Onshore O&M Account” has the meaning set forth in the Accounts Agreement.

 

5

 

 

“Closing Date” for any Disbursement means the Business Day on which a Disbursement is made.

 

“COD” means achievement of the Fecha de Inicio de Operación Comercial, as such term is defined in the ENEE PPA.     

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute and all rules and regulations promulgated thereunder.

 

“Commercial Operation Start Certificate” means the Certificado de Inicio de Operación Comercial under the ENEE PPA.

 

“Commitment” means OPIC’s commitment to lend an amount up to $124,700,000 less (a) the portion thereof that pursuant to Section 2.06(b) has been canceled or has been deemed canceled, and (b) any amounts disbursed pursuant to Section 2.01.

 

“Commitment Fee” has the meaning set forth in Section 2.06(a).

 

“Commitment Letter” means the commitment letter, dated as of November 21, 2016, by OPIC in favor of the Borrower and the Sponsor.

 

“Commitment Period” means the period commencing on the date of execution of this Agreement, and ending on the earliest of (a) the first date on which the amount of the Loan equals the amount of the Commitment, (b) the second (2nd) anniversary of the date of execution of this Agreement, provided, however, if the first Disbursement has not occurred on or before the first anniversary of the date of execution of this Agreement or the eighth (8th) anniversary of the date of the Commitment Letter, the Commitment Period shall end on the date of such first or eighth anniversary, as applicable, and (c) the date the Commitment has otherwise been terminated in accordance with this Agreement.

 

“Congressional Approval of the La Bufa Lease” means the Decree of the National Congress of Honduras required under numeral 19 of Article 205 of the Constitution of Honduras approving the Municipality of La Union, Department of Copan’s, grant of the La Bufa Land Lease Agreement for the full term of such lease agreement, approved through Decree 125-2017 dated January 18, 2018 and published in the Official Gazette on April 13, 2018.

 

“Consents” means any registration, declaration, filing, consent, license, right, approval, authorization, or permit.

 

“Corrupt Practices Laws” means (a) the Foreign Corrupt Practices Act of 1977 (Pub. L. No. 95-213, §§101-104), as amended, and (b) any other Applicable Law relating to bribery, kick-backs, or similar business practices.

 

“Current Assets” means assets of the Borrower treated as current assets under Accounting Standards, which, for the avoidance of doubt, does not include amounts that may be on deposit in the Offshore Debt Service Reserve Account or otherwise held to satisfy the DSR Requirement.

 

“Current Liabilities” means liabilities of the Borrower treated as current liabilities under Accounting Standards.

 

6

 

 

“Cut-Off Date” means the period beginning on July 1, 2017 through the last date of the period covered by the review performed by the Independent Engineer with respect to Project Costs incurred prior to such date pursuant to Section 4.18.

 

“Debt Service” means, for any period, the sum of all payments of principal, interest, and fees made or required to be made by the Borrower in respect of its Indebtedness (excluding any Indebtedness owed to any Shareholder and any other Indebtedness that is fully subordinated to the Loan on terms acceptable to OPIC) during such period.

 

“Debt to Equity Ratio” means, as of any date of determination, the ratio of (i) the principal amount of the Loan then outstanding to (ii) the aggregate amount of Actual Equity Contributions made on or prior to such date.

 

“Default” means an event or condition that, with the passage of time or the giving of notice, or both, could constitute an Event of Default.

 

“Default Rate” means at the time any amount due to OPIC under any Financing Document is not paid when due (a) with respect to amounts due under a Note, an amount equal to the sum of (i) the applicable OPIC Note Interest Rate (as such rate may be adjusted as provided in Section 2.02(c)) and (ii) two percent (2%) per annum, and (b) with respect to any other amounts due, an amount equal to the sum of (i) the highest OPIC Note Interest Rate set forth in any Note then outstanding (as such rate may be adjusted as provided in Section 2.02(c)) and (ii) two percent (2%) per annum.

 

“Designated Prepayment Date” has the meaning set forth in the OPIC Funding Agreement.

 

“Development Fee” means the development fee payable by the Borrower to the Shareholders as reflected in the Financial Model and approved by OPIC.

 

“Direct Agreements” means (i) the Elcosa Direct Agreement, (ii) the ENEE Direct Agreement, (iii) the consent and agreement, dated on or before the first Disbursement, among OPIC, the Supplier and the Borrower, (iv) the SERNA Direct Agreement and (v) each of the notices described in Section 4.22.

 

“Disbursement” means any disbursement of the Commitment.

 

“Disbursement Request” means a request for disbursement of the Commitment substantially in the form of Exhibit B.

 

“Disposition” means, with respect to any Property, any sale, license, assignment, exchange, conveyance, liquidation or lease or other transfer or disposition thereof, whether by agreement, operation of law or otherwise (and the verb “Dispose” shall be construed accordingly).

 

“Dispute” means any dispute, controversy or claim arising out of, relating to, or in connection with this Agreement, the Notes or any other Financing Document to which the Borrower or OPIC is a party, including any dispute, controversy or claim relating to the formation, existence, validity, interpretation, enforceability, breach, performance or termination of thereof.

 

“Dollars” or “$” means U.S. dollars.

 

“Drilling Program” means the drilling program set forth in Schedule 4.19-A hereto.

 

7

 

 

“DSR Requirement” means, for any date, an aggregate Dollar amount equal to the aggregate amount of Debt Service with respect to the Loan for the immediately succeeding six-month period.

 

“Effective Date” has the meaning set forth in the preamble to this Agreement.

 

“Elcosa” means Electricidad de Cortés, S. de R.L. de C.V., a Honduran sociedad de responsabilidad limitada de capital variable.

 

“Elcosa Direct Agreement” means the consent and agreement, dated on or before the first Disbursement, among Elcosa, Bidle Trading, Inc., OPIC, the Borrower, OrPower 19, OII, the Intermediate Shareholder and Inversiones Representaciones Electromecánicas, S.A. de C.V.

 

“Elcosa Lien” means the first priority security interest in the assets described in the Elcosa Lien Documents.

 

“Elcosa Subordination Agreement” means the Elcosa subordination agreement, dated on or before the first Disbursement, among Elcosa, Bidle Trading, Inc., OPIC, the Borrower, OrPower 19, OII, the Intermediate Shareholder and Inversiones Representaciones Electromecánicas, S.A. de C.V.

 

“Employee Benefit Plan” means any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Borrower that is subject to ERISA, other than a Guaranteed Pension Plan or a Multiemployer Plan.

 

“ENEE” means the Empresa Nacional de Energía Eléctrica.

 

“ENEE Direct Agreement” means (i) the consent and agreement, dated on or before the first Disbursement, among ENEE, OPIC and the Borrower and (ii) the operative committee resolutions, dated on or before the first Disbursement, by ENEE’s operative committee.

 

“ENEE PPA” means that certain power purchase agreement (Contrato No. 086-2010 Suministro de Potencia y su Energía Asociada Generada con Recursos Renovables) dated as of June 3, 2010 entered into by the Borrower and ENEE, as amended.

 

“Environmental and Social Consultants” means Social Capital Group.

 

“Environmental and Social Plans” means the following, which shall be prepared in accordance with the Environmental and Social Requirements: (a) an overarching policy statement of environmental and social objectives and principles appropriate to the size and nature of the Project and of the Borrower’s organization that will be used to permit the Project to achieve sound and sustainable environmental and social performance; (b) a grievance mechanism appropriate to the size and nature of the Project and of the Borrower’s organization for the Borrower to receive and facilitate resolution of concerns and grievances about the environmental and social performance of the Project and the Borrower’s organization; and (c) the ESAP.

 

“Environmental and Social Requirements” means (a) all Applicable Laws in Honduras regarding environmental, health, and safety requirements; (b) International Finance Corporation’s Performance Standards 1, 2, 3, 4, 5, 6 and 8 (January 1, 2012); (c) applicable provisions of the International Finance Corporation’s April 30, 2007 General Environmental and Health and Safety Guidelines; (d) International Finance Corporation’s Environmental, Health, and Safety Guidelines for Geothermal Power Generation (April 30, 2007); (e) International Finance Corporation’s Environmental, Health, and Safety Guidelines for Electric Power Transmission and Distribution (April 30, 2007) and (f) the applicable provisions of the ESPS of OPIC.

 

8

 

 

“Environmental Laws” means, with respect to any Person, any and all laws applicable to such Person relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time, and all rules and regulations promulgated thereunder.

 

“ERISA Affiliate” shall mean any Person that is treated as a single employer with the Borrower under §414 of the Code.

 

“ESAP” shall mean the environmental and social action plan set forth in Schedule 4.15.

 

“ESMS” means the Environmental and Social Management System to be developed by the Borrower, delivered in writing to OPIC, and implemented by the Borrower, all in accordance with the ESAP.

 

“ESPS” means the Environmental and Social Policy Statement dated as of October 15, 2010, which is posted on OPIC’s website at http://www.opic.gov/environment.

 

“Event of Default” has the meaning set forth in Section 8.01.

 

“Event of Loss” means, with respect to any Property of the Borrower, any loss of, destruction of or damage to, such Property (including any such loss, destruction or damage resulting from an Act of Political Violence).

 

“Excluded Claim” means any dispute, controversy or claim (including any counterclaim, defense or set-off) against OPIC, the United States of America, or any instrumentality or agency of the United States of America sounding in tort or other non-contractual basis for liability.

 

“Expropriation Event” means (a) any condemnation, nationalization, seizure or expropriation by a Governmental Authority of all or a substantial portion of the Project or the Property of the Borrower or of its shares, (b) any assumption by a Governmental Authority of control of all or a substantial portion of the Property, assets or business operations of the Borrower or of its shares, (c) any taking of any action by a Governmental Authority for the dissolution or disestablishment of the Borrower, or (d) any taking of any action by a Governmental Authority that would prevent the Borrower from carrying on its business or operations or a substantial part thereof for a period of thirty (30) or more consecutive days.

 

“Expropriation Proceeds” means, with respect any Expropriation Event, any condemnation awards or other compensation, awards, damages and other payments or relief paid or payable by a Governmental Authority with respect to such Expropriation Event.

 

“Facility Fee” has the meaning set forth in Section 2.06(c).

 

“Fees” means the Commitment Fee, the Cancellation Fee, the Facility Fee, the Maintenance Fee and the Modification Fee (if applicable).

 

9

 

 

“Financial Model” means a financial model prepared by the Borrower setting forth financial projections for the Project through March 31, 2032.

 

“Financial Officer” means the chief financial officer, chief operating officer, president, principal accounting officer, treasurer, controller or asset manager of the Borrower or an Affiliate of the Borrower, to the extent such officer is responsible for overseeing the financial operations of the Borrower.

 

“Financial Plan” has the meaning set forth in Section 3.01(m).

 

“Financial Statements” means, with respect to any Person, its quarterly or annual consolidating and consolidated balance sheet and statements of income, retained earnings, and sources and uses of funds for such fiscal period, together with all notes thereto and with comparable figures for the corresponding period of its previous Fiscal Year, each prepared in or translated into English and in Dollars in accordance with Accounting Standards.

 

“Financing Documents” has the meaning set forth in Section 4.01.

 

“Fiscal Year” means, with respect to the Borrower, the period beginning on January 1 and ending on December 31 of each year.

 

“Fixed Rate Note” means any promissory note issued by the Borrower pursuant to this Agreement substantially in the form of Exhibit A-1 of the OPIC Funding Agreement.

 

“Funding Documents” has the meaning set forth in Section 4.21.

 

“GAAP” means generally accepted accounting principles in the United States of America (as amended, supplemented or re-issued from time to time), applied on a consistent basis both as to classification of items and amounts.

 

“Good Industry Practice” means any of the practices, methods, standards and acts employed by, engaged in or approved by a significant portion of the international geothermal power industry and related installation business with respect to the engineering, design, construction, operation and maintenance of geothermal power infrastructure of the type to be incorporated into the Works and which practices, methods and standards shall conform to the requirements of the equipment suppliers and manufacturers of the plant and materials used in the Works, or any of the practices, methods, standards and acts that, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Industry Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be practices, methods, or acts generally accepted in the industry.

 

“Governmental Authority” means any national, state, county, city, town, village, municipal or other local governmental department, commission, board, bureau, agency, authority or instrumentality of the Project Country or the U.S., as applicable, or any political subdivision thereof, and any person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any of the foregoing entities, having jurisdiction over the Persons or matters in question.

 

“Guaranteed Pension Plan” means any employee pension benefit plan within the meaning of §3(2) of ERISA which is maintained or contributed to by the Borrower or any ERISA Affiliate, the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

 

10

 

 

“Hedge Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate insurance, currency swap agreement, currency option, futures contract, forward contract or any other similar agreement or arrangement with respect to interest rates and currency exchange rates, currencies, commodities or indices or to the hedging of assets or liabilities.

 

“Historic DSCR” has the meaning set forth in Section 6.10(a).

 

“Honduran Asset Trust Agreement” means the trust agreement (Contrato de Fideicomiso), dated as of November 27, 2013, among the Borrower, OrPower 19 and Banco del País, S.A., a Honduran sociedad anónima de capital variable in favor of Elcosa.

 

“Honduran Share Trust Agreement” means the share trust agreement (Contrato de Fideicomiso de Garantía sobre Acciones), in form and substance satisfactory to OPIC, governed by the laws of Honduras to be entered into by OrPower 19 and the Onshore Share Trustee, providing for Security over 100% of the common shares issued and outstanding of the Borrower, in favor of OPIC.

 

“Honduras” means the Republic of Honduras.

 

“Indebtedness” means, with respect to any Person at any date, total liabilities as defined by Accounting Standards and any obligation created, issued, incurred, or assumed by such Person for borrowed money or arising out of any credit facility, financial accommodation or Hedge Agreement or for the deferred purchase price of goods or services, including, any credit to such Person under any conditional sale or other title retention agreement, all guaranties by such Person of liabilities or Indebtedness of any other Person, liabilities or Indebtedness of any other Person secured by any assets or revenue of such Person, and the net aggregate rentals under any lease by such Person as lessee that under Accounting Standards would be capitalized on the books of the lessee or that is the substantial equivalent of the financing of the property so leased.

 

“Indemnified Person” has the meaning set forth in Section 9.10.

 

“Independent Engineer” means Lummus Consultants International, Inc.

 

“Indirect Shareholders” means OII, the Sponsor and the Intermediate Shareholder.

 

“Insurance Advisor” means INDECS Consulting Limited.

 

“Insurance Policy” means each policy, contract or other instrument of insurance or reinsurance of any kind which is or is required to be taken out by or on behalf of any Obligor or any Project Subcontractor pursuant to Section 6.03 and Schedule 6.03 (Minimum Insurance Requirements) hereof and in which the Borrower has any interest (including any of the foregoing taken out by or on behalf of the Borrower under the ENEE PPA).

 

“Insurance Proceeds” means, with respect to any Event of Loss relating to any Property of the Borrower, any insurance or reinsurance (and any other amounts received pursuant to any Insurance Policy), with respect to such Event of Loss (excluding, in each case, if any, the proceeds of general liability insurance, employers’ liability insurance, automobile liability insurance, marine cargo consequential loss insurance, advance loss of profits insurance, delay in start-up insurance and business interruption insurance, Expropriation Proceeds and political risk insurance proceeds of the Shareholders).

 

“Intermediate Shareholder” means OrPower 20, Inc., an exempted company incorporated under the laws of the Cayman Islands.

 

11

 

 

“Inverted Domestic Corporation” means an entity formed outside of the United States which is treated as an inverted domestic corporation under 6 U.S.C. 395(b).

 

“Joint Guarantee” means, collectively, the support letter (Acuerdo de Apoyo para el cumplimiento del Platanares) and the joint guarantee (Aval Solidario del Estado de Honduras) from the Ministry of Finance of Honduras (la Secretaría de Estado en el Despacho de Finanzas) dated June 14, 2011.

 

“Key Contractor” means the Supplier, Geodrill LLC and Ormat Holding Corp.

 

“Knowledge” of a Person that is an organization means the actual knowledge that a responsible officer of such Person has or would have after such inquiry, including through diligent inspection of relevant records and inquiry of relevant employees or such inquiry as may be requested by OPIC, in each case as is practicable and commercially reasonable under the circumstances.  For purposes hereof, responsible officer means, for any Person, an officer, director or employee of such Person that is in a position of senior management or policy making for such Person.

 

“La Bufa Comfort Letter” means the comfort letter from Elcosa and Inversiones y Representaciones Electromecanicas, S. de R.L. de C.V., a Honduran sociedad de responsabilidad limitada de capital variable, in favor of the Ormat Parties, dated as of November 27, 2013.

 

“La Bufa Land Lease Agreement” means the land lease agreement (Contrato de Arrendamiento de Terreno Ejidal) by the municipality of La Union, Copan in favor of the Borrower, dated as of May 15, 2012.

 

“Lempiras” means the lawful currency of Honduras.

 

“Lien” means any lien, pledge, mortgage, security interest, deed of trust, charge, assignment, hypothecation, title retention, or other encumbrance on or with respect to, or any preferential arrangement having the practical effect of constituting a security interest with respect to the payment of any obligation with, or from the proceeds of, any asset or revenue of any kind.

 

“Litigation Payment” has the meaning set forth in Section 9.14.

 

“Loan” means, on any date, the aggregate of the outstanding unpaid principal amounts of the Notes then outstanding.

 

“Loan Documents” has the meaning set forth in Section 4.01(a).

 

“Loan Maturity Date” means the earlier of (a) the Note Maturity Date and (b) the Business Day before the transfer of the Borrower’s assets, the ordinary shares of the Borrower, or the shares of OrPower 19 to Elcosa or another third party.

 

“Long-term Indebtedness” means, in accordance with Accounting Standards, any Indebtedness, the final maturity of which, by its terms or by the terms of any agreement related to it, falls due more than one year after the date of its incurrence.

 

“Loss” has the meaning set forth in Section 9.10.

 

“Maintenance Fee” has the meaning set forth in Section 2.06(d).

 

12

 

 

“Material Adverse Effect” means any event, development, or circumstance having a material adverse effect on (a) the Project, (b) the business, operations, prospects, condition (financial or otherwise), or property of the Borrower, OII, the Intermediate Shareholder, (c) the ability of the Borrower or any other Material Project Party to perform in a timely manner its payment obligations or other material obligations under any of the Transaction Documents, (d) the validity or enforceability of any material provision of any Transaction Document, (e) the rights and remedies of OPIC under any of the Financing Documents, or (f) the Liens provided to OPIC under the Security Documents.

 

“Material Project Documents” has the meaning set forth in Section 4.01(c).

 

“Material Project Party” means ENEE, Elcosa, the Supplier, SERNA, any Affiliate party to any Project Document and any other counterparty (other than MINOSA under the MINOSA Cooperation Agreement and the MINOSA PPA) under any Material Project Document that remains an executory contract after the Effective Date that is an Affiliate of the Borrower or of any Shareholder.

 

“MINOSA” means Minerales de Occidente S.A. de C.V.

 

“MINOSA Cooperation Agreement” means the cooperation agreement to be entered into between the Borrower and MINOSA.

 

“MINOSA PPA” means the power purchase agreement dated as of May 5, 2007 between the Borrower and MINOSA.

 

“Modification Fee” has the meaning set forth in Section 2.06(e).

 

“Multiemployer Plan” means any multiemployer plan within the meaning of §3(37) of ERISA which is maintained or contributed to by the Borrower or any ERISA Affiliate and subject to Title IV of ERISA.

 

“Net Income” means, with respect to the Borrower, for any period, the net income (loss) of the Borrower for such period, as determined in accordance with Accounting Standards, provided, that there shall be excluded in such determination (a) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period, (b) any aggregate net gain during such period arising from the sale, conversion, exchange, or other disposition of capital assets, (c) any gains resulting from the write-up of any assets, (d) any net gain arising from the extinguishment, under Accounting Standards, of any Indebtedness of the Borrower, and (e) any net income or gain during such period resulting from (i) any change in accounting principles in accordance with Accounting Standards, (ii) any prior period adjustments resulting from any change in accounting principles in accordance with Accounting Standards, (iii) any extraordinary items, and (iv) any discontinued operations or the disposition thereof.

 

“New York Security Agreement” means the Security Agreement, to be executed on or before the first Closing Date, between the Borrower and OPIC.

 

“Note Maturity Date” means September 20, 2032.

 

“Notes” means (i) any Fixed Rate Note issued by the Borrower pursuant to this Agreement and the Funding Documents substantially in the form of Exhibit A-1 and (ii) any pagaré issued by the Borrower pursuant to this Agreement substantially in the form of Exhibit A-2.

 

13

 

 

“O&M Support Agreement” means the operations and maintenance service support agreement, to be executed on or before the first Closing Date, between the Borrower and Ormat Nevada Inc., a Delaware corporation.

 

“Obligor” means each of the Borrower, the Shareholder, each other Person that owns equity interests in the Borrower, the Intermediate Shareholder and the Sponsor (without duplication).

 

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury, which administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted individuals, organizations, and foreign countries and regimes.

 

“OFAC List” means the Specially Designated Nationals and Blocked Persons List and any other lists administered or enforced by OFAC, including but not limited to the Palestinian Legislative Council list and the Part 561 list, in each case as published by OFAC from time to time and available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx or any official successor website.

 

“OFAC Regulations” means (a) the rules and regulations promulgated by OFAC, as may be published in Chapter 31, Part 500 of the Code of Federal Regulations from time to time, and (b) any Executive orders administering or imposing economic sanctions on individuals, organizations or foreign countries and regimes.

 

“Official” means any officer of a political party or candidate for political office in the Project Country or the U.S. or any officer or employee (a) of the government of the Project Country or the U.S. (including any Governmental Authority of the Project Country or the U.S.) or (b) of a public international organization.

 

“Offshore Accounts” has the meaning set forth in the Accounts Agreement.

 

“Offshore Debt Service Reserve Account” has the meaning set forth in the Accounts Agreement.

 

“Offshore Well Reserve Account” has the meaning set forth in the Accounts Agreement.

 

“OII” means Ormat International, Inc., a Delaware Corporation.

 

“Onshore Accounts” has the meaning set forth in the Accounts Agreement.

 

“Onshore Administration and Guaranty Trustee” means Banco del País, S.A., a Honduran sociedad anónima acting solely in its capacity as trustee under the Administration and Guaranty Trust Agreement, or any successor thereto.

 

“Onshore Share Trustee” means Banco del País, S.A., a Honduran sociedad anónima acting solely in its capacity as trustee under the Honduran Share Trust Agreement, or any successor thereto.

 

“Operating Report” means a report in the form set forth in Schedule 6.05(d) (Operating Report).

 

14

 

 

“Operation Contract” means that certain operations agreement (Contrato de Operación para la Generación, Transmisión y Comercialización de Energía Eléctrica) dated as of January 6, 2009 entered into by the Borrower and SERNA.

 

“OPIC” has the meaning set forth in the preamble to this Agreement.

 

“OPIC’s Financial Model Auditor” means BDO Ziv Haft Consulting and Management Ltd.

 

“OPIC Funding Agreement” means the Funding and OPIC Guaranty Agreement dated on or before the first Disbursement, among the Borrower, the Paying Agent, the Placement Agent and OPIC.

 

“OPIC Guaranty Fee” has the meaning set forth in the Funding Documents.

 

“OPIC Guaranty Payment” has the meaning set forth in Section 2.02(c).

 

“OPIC Note Interest Rate” has the meaning set forth in Section 2.02(a), as adjusted pursuant to Section 2.02(c).

 

“OPIC Plaintiff” has the meaning set forth in Section 9.14.

 

“Ormat Guaranty” means the Guaranty, dated as of November 27, 2013, by OII in favor of Elcosa.

 

“Ormat Parties” means OII, the Intermediate Shareholder and OrPower 19.

 

“Ormat Parties Subordination Agreement” means the Subordination Agreement, to be executed on or before the first Closing Date by and between the Ormat Parties and any Affiliate thereof providing Indebtedness to the Borrower, and OPIC.

 

“OrPower 19” means OrPower 19, Inc., a Cayman Islands corporation owned by the Intermediate Shareholder.

 

“Parent Support Services” means services provided to the Borrower by its Affiliates for (i) reservoir monitoring and performance assessment of key components, including downhole pumps, turbines and heat exchangers services and (ii) other general services in an amount not to exceed in the aggregate $400,000 on an annual basis, in each case as approved pursuant to the then-applicable Annual Operating Budget.

 

“Paying Agent” means U.S. Bank National Association, or any successor or successors thereto designated as Paying Agent under the Funding Documents.

 

“Payment Date” means the 20th day of each March, June, September and December of each year after the date hereof until the Loan and all amounts due hereunder or under the Notes are paid in full, unless such Payment Date is not a Business Day, in which case the Payment Date will be the next succeeding Business Day.

 

“PBGC” means the Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

 

“Permitted Lien” has the meaning set forth in Section 7.01.

 

15

 

 

“Person” means an individual, a legal entity, including, a partnership, a joint venture, a corporation, a trust, and an unincorporated organization, and a government or any department or agency thereof.

 

“Placement Agent” means Raymond James & Associates, Inc., or any successor or successors thereto designated as Placement Agent under the Funding Documents.

 

“Preferred Nonvoting Share” has the meaning set forth in the Project Structuring Agreement.

 

“Prepayment Premium” has the meaning set forth in Section 2.04.

 

“Principal Installments” has the meaning set forth in Section 2.03.

 

“Priority Fee” means 3% of the Gross Revenues (as defined in the Project Structuring Agreement) received by the Borrower pursuant to Section 2.2(a)(i) of the Project Structuring Agreement, which amount is payable as a Project operating cost by the Borrower to Elcosa pursuant to the Elcosa Direct Agreement.

 

“Prohibited Payment” means the giving or making by any Person (such Person, the “Payor”) of any offer, gift, payment, promise to pay or authorization of the payment of any money or anything of value, directly or indirectly, to or for the use or benefit of any Official (including to or for the use or benefit of any other Person if the Payor knows, or has reasonable grounds for believing, that the other Person would use such offer, gift, payment, promise or authorization of payment for the benefit of any such Official), for the purpose of influencing any act or decision or omission of any Official in order to obtain, retain or direct business to, or to secure any improper benefit or advantage for, the Borrower or the Project, or any other Person; provided that any such offer, gift, payment, promise or authorization of payment shall not be considered a Prohibited Payment if it (a) is expressly permitted by Applicable Law or (b) is made for the purpose of expediting or securing the performance of a routine governmental action (as such term is construed under Applicable Law).

 

“Project” means the development, construction and operation of 38 MWe geothermal power plant located in western Honduras.

 

“Project Contractor” means any Person that is a party to a Project Contract with the Borrower.

 

“Project Contracts” means any contract related to the development, construction or operation of the Project between the Borrower and a Project Contractor or between a Project Contractor and a Project Subcontractor.

 

“Project Costs” means all costs incurred by the Borrower on or after the date hereof to finance and construct the Project, including, but not limited to (a) amounts payable under the Project Contracts, (b) interest, fees and expenses payable with respect to the Loan, (c) expenses incurred to obtain use of the Site, (d) costs and expenses of legal, engineering, accounting, construction management, and other advisors incurred in connection with the Project, (e) insurance premiums, (f) funding of the Offshore Debt Service Reserve Account and of the Offshore Well Reserve Account, (g) general and administrative costs such as Working Capital, payroll, utilities, office equipment and supplies, vehicles, communications expenses, and travel expenses, and (h) Taxes.

 

“Project Country” means Honduras.

 

16

 

 

“Project Documents” has the meaning set forth in Section 4.01(c).

 

“Project Structuring Agreement” means the Project Structuring Agreement among, inter alios, Elcosa and the Shareholders dated November 27, 2013.

 

“Project Subcontractor” means any Person, other than the Borrower or a Project Contractor, which is a party to a Project Contract with a Project Contractor.

 

“Projected DSCR” has the meaning set forth in Section 6.10(a).          

 

“Property” means any present or future right or interest in, to or under any assets, equipment, facilities, contracts, leaseholds, business, receivables, revenues, accounts or other property of any kind whatsoever, whether real, personal, mixed and whether tangible or intangible.

 

“Redemption Premium” has the meaning set forth in the Funding Documents.

 

“Remainder Fee” means the additional royalty payments payable by the Borrower to Elcosa, after the Borrower’s payment of the Priority Fee, pursuant to the Project Structuring Agreement.

 

“Replaceable Project Document” has the meaning set forth in Section 8.01(h) hereof.     

 

“Reservoir Monitoring Plan” means the Borrower’s reservoir monitoring plan set forth in Schedule 4.19-B hereto.

 

“Reservoir Monitoring Report” means the reservoir monitoring report prepared by the Borrower in the form set forth in Schedule 4.19-C hereto.

 

“Restricted Payment” means any of the following made directly or indirectly by the Borrower: (a) any dividend or distribution on any share of capital stock of the Borrower, including any reduction of capital; (b) any payment of principal or interest on any Indebtedness of the Borrower to or for the benefit of any Shareholder or any Affiliate of the Borrower, other than accounts payable for goods or services provided on an arm’s-length basis; (c) any payments to Elcosa or in respect of the Remainder Fee or otherwise; and (d) any purchase, redemption, acquisition, or retirement of any shares of capital stock of the Borrower or any Indebtedness of the Borrower held by any Shareholder or any Affiliate of the Borrower.

 

“Rules” means the International Arbitration Rules of the American Arbitration Association in effect as of the date of the Notice of Arbitration, except as modified by Section 8.03 and Schedule 8.03 or as may be modified by mutual agreement of the Arbitration Parties.

 

“Sale Proceeds” shall mean proceeds from any Disposition of all or any part of any Property of the Borrower, the enforcement of remedies under the Security Documents or otherwise, but excluding any such proceeds (a) included in any Termination Payment, (b) included in any Expropriation Proceeds or Insurance Proceeds, (c) from the sale of electricity and green attributes, if any, or (d) to the extent used in the ordinary course of business to replace the Property so disposed of, or, if not in the ordinary course of business, to the extent used to replace the Property so disposed of or to reinvest in the Project as approved by OPIC in its sole discretion.

 

17

 

 

“Secured Obligations” means all obligations owing to OPIC by the Borrower under or in connection with the Financing Documents including any liability in respect of further advances made under the Financing Documents whether present or future, actual or contingent and whether incurred by the Borrower alone or jointly and whether as principal or surety or in some other capacity. Without limitation, the Secured Obligations shall include interest that accrues, or that would accrue but for the operation of an automatic stay or similar provision, after the filing of a petition initiating any proceeding referred to in Sections 8.01(l) or (m) hereof.

 

“Security Documents” has the meaning set forth in Section 4.01(b).

 

“Self-Monitoring Questionnaire” means the Annual Self-Monitoring Questionnaire used by OPIC to monitor compliance with OPIC’s policy requirements, a copy of which is available and which may be completed online at http://smq.opic.gov.

 

“SERNA” means the Secretaría de Estado en los Despachos de Energía, Recursos Naturales, Ambiente y Minas of Honduras.

 

“SERNA Direct Agreement” means the consent and agreement to be executed within six (6) months of the first Closing Date by and among the Borrower, SERNA and OPIC, in substantially the form attached as Exhibit I.

 

“Share Pledge Agreement” means the share pledge agreement (Contrato de Prenda Sobre Acciones) in form and substance satisfactory to OPIC, governed by the laws of Honduras to be entered into by Elcosa and OPIC, creating a pledge upon the single Preferred Nonvoting Share issued and outstanding of the Borrower in the benefit of OPIC.

 

“Share Retention Agreement” means the Share Retention Agreement, to be executed on or before the first Closing Date by and among the Borrower, the Sponsor, OII, the Intermediate Shareholder and OPIC.

 

“Shareholder Payment” means any payment by the Borrower to, or on behalf of, any Shareholder or any Affiliate of any Shareholder other than a Restricted Payment, including any payment in respect of compensation, fees, salaries, bonuses, or commissions or any payment made on behalf of any Shareholder or any Affiliate of any Shareholder that is for the benefit of such party.

 

“Shareholders” means the OrPower 19 and the Indirect Shareholders.

 

“Site” means the land required for the Project including, but not limited to, the power plant, well pads, roads, gathering system piping, and transmission line.

 

“Sponsor” means Ormat Technologies, Inc. (“Ormat”), a publicly-traded Delaware Corporation.

 

“Subordination Agreements” means the Elcosa Subordination Agreement and the Ormat Parties Subordination Agreement.

 

“Subsidiary Of An Inverted Domestic Corporation” means an entity that is more than fifty percent (50%) owned (a) directly by an Inverted Domestic Corporation, or (b) through another entity that is more than fifty percent (50%) owned by an Inverted Domestic Corporation.

 

18

 

 

“Supplier” means Ormat Nevada Inc., a fully owned Affiliate of the Sponsor incorporated under the laws of Delaware.

 

“Taxes” means all taxes, charges, fees, levies or other assessments, including without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, value added, turnover, transfer, franchise, profits, license, withholding, payroll, employment, excise, estimated, severance, stamp duties, occupation, property or other taxes, customs duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority and any political subdivision, instrumentality, agency or similar body of any taxing authority.

 

“Termination Payment” means any indemnity or other payment received by the Borrower or any Affiliate thereof from any counterparty other than OPIC under or in connection with any termination of a Project Document (in respect of the Warranty Agreement, only to the extent they arise or accrue after the Effective Date) or a Consent, including pursuant to the ENEE PPA or any Direct Agreement.

 

“Transaction Documents” has the meaning set forth in Section 4.01.

 

“True-Up Confirmation” means a certificate, in form and substance reasonably satisfactory to OPIC, from the Independent Engineer based on operational data and the Reservoir Monitoring Report(s) covering at least six (6) months of commercial operations for the purposes of allowing the Well Reserve Disbursement to be released and disbursing an amount pursuant to the Accounts Agreement that, together with all then previous Disbursements made, would exceed $114,700,000.

 

“True-Up Date” means the date of the True-Up Confirmation.

 

“Uniform Commercial Code” means the Uniform Commercial Code as in effect in the State of New York or in any other applicable jurisdiction.

 

“U.S.” means the United States of America.

 

“U.S. Government” means the government of the United States of America and its agencies and instrumentalities.

 

“U.S. Person” means a:

 

(a) U.S. citizen or U.S. lawful permanent resident;

 

(b) for-profit corporation, partnership, or other entity or association created under the laws of the U.S. or any state or territory thereof, or the District of Columbia, and more than twenty-five percent (25%) beneficially owned by U.S. citizens or U.S. lawful permanent residents;

 

(c) for-profit corporation, partnership, or other entity or association created under the laws of a foreign jurisdiction, and more than fifty percent (50%) beneficially owned by U.S. citizens or U.S. lawful permanent residents;

 

(d) non-profit corporation, partnership, or other entity or association created under the laws of the U.S. or any state or territory thereof, or the District of Columbia; or

 

19

 

 

(e) non-profit corporation, partnership, or other entity or association created under the laws of a foreign jurisdiction and where more than fifty percent (50%) of the members of its board of directors or similar governing body are U.S. citizens or U.S. lawful permanent residents.

 

“U.S. Taxpayer Identification Number” means an identification number used by the Internal Revenue Service, an agency of the United States of America, in the administration of tax laws, which is issued either by the Social Security Administration, an agency of the United States of America, or the Internal Revenue Service.

 

“U.S. Treasury Cost” has the meaning set forth in the OPIC Funding Agreement.

 

“Warranty Agreement” means the warranty agreement between the Borrower and the Supplier, dated on or before the first Disbursement.

 

“Water Contract” means the contract between the Borrower and SERNA, dated as of March 25, 2011 (and which entered into force by order of the National Congress of Honduras as of September 13, 2012).

 

“Well Reserve Disbursement” has the meaning set forth in the Accounts Agreement.

 

“Well Reserve Requirement” has the meaning set forth in the Accounts Agreement.

 

“Worker Rights Non-Compliance” has the meaning set forth in Section 6.12(b).

 

“Worker Rights Requirements” has the meaning set forth in Section 6.12(a)(xii).

 

“Workers” means, collectively, (a) individuals that are employed directly by the Borrower, and (b) individuals that, under a Project Contract, perform continuous on-site work that is either (i) of substantial duration or (ii) material to the primary operations of the Project.

 

“Working Capital” means the amount resulting from Current Assets (excluding cash) minus Current Liabilities (excluding Debt Service for the Loan and for all other Long-term Indebtedness).     

 

“Works” means the Completed Work (as defined in the Warranty Agreement), the Resource Works (as defined in the Warranty Agreement) and any other engineering, procurement, construction, drilling, commissioning or testing required to achieve COD.

 

2.     Rules of Interpretation.

 

In this Agreement, including Exhibits and Schedules hereto, unless otherwise indicated or required by the context: (a) reference to and the definition of any document (including this Agreement) shall be deemed a reference to such document as it may be amended, supplemented, revised, or modified from time to time; (b) all references to an “Article,” “Section”, “Schedule,” or “Exhibit” are to an Article or Section of this Agreement or to a Schedule or an Exhibit attached thereto and shall be deemed to have been made a part thereof; (c) the table of contents and article and section headings and other captions are for the purpose of reference only and do not limit or affect the meaning of the terms and provisions thereof; (d) defined terms in the singular include the plural and vice versa, and the masculine, feminine and neuter gender include all genders; (e) accounting terms not defined in this Schedule X have the meanings given to them under Accounting Standards; (f) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (g) the words “include,” “includes,” and “including” mean include, includes and including “without limitation” and “without limitation by specification”; (h) terms capitalized for other than grammatical purposes that are defined in (i) the preamble, (ii) the recitals, or (iii) the Sections of this Agreement have the meanings ascribed to them therein; (i) phrases such as “satisfactory to OPIC”, “in such manner as OPIC may determine,” “in OPIC’s determination,” “to OPIC’s satisfaction,” “acceptable to OPIC”, “at OPIC’s election”, and phrases of similar import authorize and permit OPIC to approve, disapprove, act or decline to act in its sole discretion; and (j) the words “reasonable”, “reasonably”, “unreasonably”, and words of similar import, when applied to OPIC’s satisfaction, acceptance, determination, consent, discretion or approval, take into account any special consideration affecting decisions of OPIC in its capacity as a governmental entity or its responsibilities as such.

 

20

 

 

SCHEDULE 2.03

 

AMORTIZATION SCHEDULE

 

OPIC Platanares Amortization

 

	
			 

				
			6/20/2018

				
			 9/20/2018

				
			12/20/2018

				
			3/20/2019

				
			6/20/2019

				
			9/20/2019

				
			12/20/2019

				
			3/20/2020

				
			6/20/2020

				
			9/20/2020

				
			12/20/2020

				
			3/20/2021

			
	
			Principal

				
			($1,977.59)

				
			($1,977.59)

				
			($2,156.16)

				
			 ($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			 ($2,156.16)

				
			 ($2,156.16)

				
			 ($2,156.16)

				
			 ($2,156.16)

			

 

 

Schedule 2.03 - 1

 

 

 

OPIC Platanares Amortization

 

	
			 

				
			6/20/2021

				
			9/20/2021

				
			12/20/2021

				
			3/20/2022

				
			6/20/2022

				
			9/20/2022

				
			12/20/2022

				
			3/20/2023

				
			6/20/2023

				
			9/20/2023

				
			12/20/2023

				
			3/20/2024

			
	
			Principal

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

			

 

 

Schedule 2.03 - 2

 

 

 

OPIC Platanares Amortization

 

	
			 

				
			6/20/2024

				
			9/20/2024

				
			12/20/2024

				
			3/20/2025

				
			6/20/2025

				
			9/20/2025

				
			12/20/2025

				
			3/20/2026

				
			6/20/2026

				
			9/20/2026

				
			12/20/2026

				
			3/20/2027

			
	
			Principal

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

			

 

 

Schedule 2.03 - 3

 

 

 

OPIC Platanares Amortization

 

	
			 

				
			6/20/2027

				
			9/20/2027

				
			12/20/2027

				
			3/20/2028

				
			6/20/2028

				
			9/20/2028

				
			12/20/2028

				
			3/20/2029

				
			6/20/2029

				
			9/20/2029

				
			12/20/2029

				
			3/20/2030

			
	
			Principal

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

			

 

 

Schedule 2.03 - 4

 

 

 

OPIC Platanares Amortization

 

	
			 

				
			6/20/2030

				
			9/20/2030

				
			12/20/2030

				
			3/20/2031

				
			6/20/2031

				
			9/20/2031

				
			12/20/2031

				
			3/20/2032

				
			6/20/2032

				
			9/20/2032

			
	
			Principal

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

				
			($2,156.16)

			

 

 

Schedule 2.03 - 5

 

 

 

SCHEDULE 2.08(b)

 

Wire Instructions for remittance of payments to OPIc

 

	 	
			A.

				
			Fedwire Instructions:

			

 

	
			Fedwire

			Field

			Tag

				 	 	
			Fedwire Field Name

				 	 	
			Required Information

			
	
			2000

				 	 	
			Amount

			 

				 	 	
			[Insert Dollars amount of wire]

			Note: The amount must be formatted as 12 numeric characters, right-justified with leading zeros. No dollar sign, commas, or decimal point. For example: $39,287.21 must be formatted as 000003928721

			
	
			3400

				 	 	
			Receiver Fedwire Routing Number

				 	 	
			021030004

			
	
			3400

				 	 	
			Receiver Fedwire Short Name

				 	 	
			US TREAS NYC

			
	
			3600

				 	 	
			Business Function Code

				 	 	
			CTR

			
	
			4200

				 	 	
			Beneficiary ID Code

				 	 	
			D

			
	
			4200

				 	 	
			Beneficiary Identifier (account number – AGENCY ALC)

				 	 	
			71000001

			
	
			4200

				 	 	
			Beneficiary Name

				 	 	
			Overseas Private Investment Corporation

			
	
			5000

				 	 	
			Originator ID Code

				 	 	
			D

			
	
			5000

				 	 	
			Originator Identifier (Bank Account Number)

				 	 	
			[Insert bank account number of remitting party – maximum 34 characters] 

			
	
			5000

				 	 	
			Originator Name

				 	 	
			Geotérmica

			Platanares, S.A. de C.V.

			
	
			6000

				 	 	
			Originator to Beneficiary Information – OPIC Loan Number

				 	 	
			OPIC/ 9000003553

			
	
			6000

				 	 	
			Originator to Beneficiary Information – Loan Payment Purpose

				 	 	
			[Insert type of payment being made – e.g., Principal, Interest & Fees, Reimbursement of Expenses, etc.]

			

 

Schedule 2.08(b) - 2

 

 

 

	 	
			B.

				
			International Electronic Funds Transfers (ITS Collections):

			

 

 

	 	
			 

			Field Name

			 

				 	 	
			 

			Required Information

			 

			
	 	
			Beneficiary Account

				 	 	
			Federal Reserve Bank of New York/ITS

			(Can be abbreviated FRBNY/ITS)

			
	 	
			Bank

				 	 	
			Citibank N.A. (New York)

			
	 	
			SWIFT code

				 	 	
			CITIUS33

			
	 	
			Account Number

				 	 	
			36838868

			
	 	
			Bank Address

				 	 	
			388 Greenwich Street, New York, NY 10013

			
	 	
			Amount (12 character numeric field, right-justified with leading zeros, no commas, or decimal point. Example: $39,287.21 becomes 000003928721)

				 	 	 
	 	
			Payment Details (Line 70) – Mandatory (can abbreviate Agency Name to OPIC)

				 	 	
			Overseas Private Investment Corporation,

			ALC # 71000001, OPIC/ 9000003553,

			[Invoice # ___],

			accountingoperations@opic.gov

			
	 	
			Details of Charges (line 71a) - Mandatory

				 	 	
			[__________]

			

 

Schedule 2.08(b) - 3

 

 

 

SCHEDULE 3.01(d)

 

Capitalization

 

	 	
			Entity

				 	 	
			Number of issued and

			authorized shares

			 

				 	 	
			Entity holding the

			shares

				 	 	
			Percentage of shares

			held

				 
	 	
			Ormat Technologies,

			Inc.

				 	 	
			Issued:49,909,524 (as of

			June 22,17)

			 

			Authorized:

			150,000,000

			 

				 	 	
			Publicly traded interests

				 	 	
			100%

				 
	 	
			Ormat International,

			Inc.

				 	 	
			Issued: 200

			 

			Authorized: 1,000

			 

			 

				 	 	
			Ormat Technologies,

			Inc.

				 	 	
			100%

				 
	 	
			Ormat Holding Corp.

				 	 	
			Issued: 999.99

			 

			Authorized: 50,000

			 

				 	 	
			Ormat International,

			Inc.

				 	 	
			100%

				 
	 	
			OrPower 20, Inc.

				 	 	
			Issued: 1,000

			 

			Authorized: 50,000

			 

				 	 	
			Ormat Holding Corp.

				 	 	
			100%

				 
	 	
			OrPower 19, Inc.

				 	 	
			Issued: 1,000

			 

			Authorized: 50,000

			 

				 	 	
			OrPower 20, Inc.

				 	 	
			100%

				 
	 	
			GEOTÉRMICA

			PLATANARES, S.A.

			DE

			 

			C.V.

			 

				 	 	
			Issued: 100,097

			 

			Authorized: 125,000

				 	 	
			OrPower 19, Inc.

				 	 	
			100% of ordinary

			capital stock

				 
	 	
			GEOTÉRMICA

			PLATANARES, S.A.

			DE

			 

			C.V.

			 

				 	 	
			Issued: 1

			 

			Authorized: 125,000

				 	 	
			Electricidad de Cortés,

			S. de R.L. de C.V.

				 	 	
			100% of Preferred

			Nonvoting Share

				 

 

Schedule 3.01(d) - 1

 

 

 

SCHEDULE 3.01(l)

 

COMPLAINTS

 

The Borrower received a letter dated July 11, 2017, from an attorney representing the National Human Rights Commission (Comisionado Nacional de los Derechos Humanos or “CONADEH”).  The letter quotes a complaint by a neighbor of the Project alleging that the Project has caused damage to three homes in the area as well as their families’ health due to auditory contamination.  The neighbor claims that two notes have been provided to an engineer who works for the Project requesting assistance, but that no response has been received to date. 

 

A note was delivered by hand on May 15, 2017 to security guards at the Project site containing similar complaints alleging auditory contamination from machinery and property damage to homes in the area.  Representatives of the Borrower attempted twice to contact the initial complainant (once on May 16, 2017, and again later in the week), Ms. Jessica Peña, but were told by neighbors that she does not reside at the house she owns.

 

In response to the complaint letter, a meeting was held in the municipality of La Unión Copán, attended by representatives of the Borrower, CONADEH, the municipality and the complaining residents.  The Borrower agreed at the meeting to hire a specialist to conduct a sonometric study, witnessed by representatives of CONADEH and the complaining residents, in order to determine the effect of the generated noise. An initial study was conducted on December 6, 2017, following encapsulation work of the turbines and motors intended to reduce noise levels, and a follow-up study was conducted with noise measurements taken from inside the plant on January 19, 2018 and continuous noise measurements taken from outside the plant January 16 – 18, 2018.  The work and studies were completed and the studies are attached to this Schedule 3.01(l) as Attachment A.  The initial study includes an observation claiming that the complainant was approached and indicated that she was no longer bothered by the noise (see observacion #2 on page 7 of Attachment A).  The Borrower plans to implement a mechanism to address similar complaints received during operations.

 

Ormat has provided to OPIC written evidence in the form of a letter from CONADEH dated January 16, 2018 that CONADEH has closed the case opened as a result of the complaint.

 

Schedule 3.01(l) - 1

 

 

 

ATTACHMENT A TO SCHEDULE 3.01(l)

 

 

 

 

 

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Schedule 3.01(l) - 186

 

 

Schedule 3.01(l) - 187

 

 

Schedule 3.01(l) - 188

 

 

Schedule 3.01(l) - 189

 

 

Schedule 3.01(l) - 190

 

 

Schedule 3.01(l) - 191

 

 

Schedule 3.01(l) - 192

 

 

Schedule 3.01(l) - 193

 

 

Schedule 3.01(l) - 194

 

 

Schedule 3.01(l) - 195

 

 

Schedule 3.01(l) - 196

 

 

Schedule 3.01(l) - 197

 

 

Schedule 3.01(l) - 198

 

Schedule 3.01(l) - 199

 

 

SCHEDULE 3.01(m)

 

Financial Plan

 

Total Project Costs: $166,976,000

 

Total OPIC Debt $ 124,700,000

 

Total Equity $ 42,276,000

 

Total Sources $ 166,976,000

 

Schedule 3.01(m) - 1

 

 

 

SCHEDULE 3.01(x)

 

Contractors and Subcontractors

 

Part A: Set forth below is a complete list of all contractors and suppliers (other than the Key Contractors) that, since the Cut-Off Date have performed Works. All such Works have been paid in full except as set forth in Part B of this schedule:

 

	 	
			Contractor/Subcontractor

			

 

 

	 	1	Agencia Y Distribuidora Occidental, Santa Rosa de Copán
	 	 	 
	 	2	Alineamiento y Balanceo Computarizado DBA Jesus Arnaldo Garcia Cuellar, Santa Rosa de Copán
	 	 	 
	 	3	Almacenes de Deposito SA Place an, San Pedro Sula
	 	 	 
	 	4	Alquileres Plaza Saavedra DBA Soveyda Gisela Saavedra Perez, Santa Rosa de Copán
	 	 	 
	 	5	Armet Sociedad Anónima, Guatemala City
	 	 	 
	 	6	ASI NETWORK dba Asociacion de Servicios de Internet S. de R.L., Puerto Cortés
	 	 	 
	 	7	AUTOEXCEL SA DE CV, San Pedro Sula
	 	 	 
	 	8	AUTOS LEMUS DBA JUAN GERARDO LEMUS LEMUS, Santa Rosa de Copán
	 	 	 
	 	9	Ayre de Honduras SA de CV, San Pedro Sula
	 	 	 
	 	10	Bakersfield Pipe & Supply, Los Angeles
	 	 	 
	 	11	Banco Del Pais, Banpais, Santa Rosa de Copán
	 	 	 
	 	12	Baruc Express dba Carlos Francisco Hernandez, Santa Rosa de Copán
	 	 	 
	 	13	Bombas y Motores de Honduras SA de CV, San Pedro Sula
	 	 	 
	 	14	Cameron West Coast, Inc., Fontana
	 	 	 
	 	15	CAMOSA, San Pedro Sula
	 	 	 
	 	16	Carlos Alberto Pineda Siercke, San Pedro Sula
	 	 	 
	 	17	Carlos Alberto Tabora Pineda, Santa Rosa de Copán
	 	 	 
	 	18	Carlos Enrique Niño, Santa Rosa de Copán
	 	 	 
	 	19	Casa Comercial Mathews, S.A. De C.V., San Pedro Sula
	 	 	 
	 	20	Casys, S.A. de C.V., San Salvador

     

Schedule - 3.01(x) - 1

 

 

 

	 	21	CELAQUE ASESORES S DE RL DE CV, Tegucigalpa
	 	 	 
	 	22	CEMCOL COMERCIAL S.A. DE C.V., San Pedro Sula
	 	 	 
	 	23	Central de Mangueras S.A. (CEMASA), San Pedro Sula
	 	 	 
	 	24	CENTRAL INDUSTRIAL SA DE CV, San Pedro Sula
	 	 	 
	 	25	CENTRO MEDICO SANTA ROSA, Santa Rosa de Copán
	 	 	 
	 	26	Comedor Internacional dba Blanca Lydia Polanco Bueso, Cucuyagua
	 	 	 
	 	27	Comedor Yessy, Venta de comida rapida DBA Iris Yesenia Guevara Aguilar, San Andres Minas
	 	 	 
	 	28	COMERCIAL CASA BUESO, Santa Rosa de Copán
	 	 	 
	 	29	Compañía General de Accesorios y Comercio SA de CV, Puerto Cortés
	 	 	 
	 	30	Comunicaciones y Servicios de Honduras SA, San Pedro Sula
	 	 	 
	 	31	Construcciones Trigueros S. de RL, San Andres Minas
	 	 	 
	 	32	Consultores y Servicios Industriales Cortés S de RL de CV, Puerto Cortés
	 	 	 
	 	33	CONTROL DE RIESGOS EMPRESARIALES SRL DE CV, San Pedro Sula
	 	 	 
	 	34	COOPERATIVA CAFETALERA CAPUCA LIMITADA COCAFCAL, Cucuyagua
	 	 	 
	 	35	Corporacion Hotelera Intercentroamericana S.A. de C.V, Tegucigalpa
	 	 	 
	 	36	COSESAE, San Pedro Sula
	 	 	 
	 	37	CPMJ Consultoria DBA Carla Patricia Miranda Jaime, Leon
	 	 	 
	 	38	Cuerpo de Bomberos, Santa Rosa de Copán
	 	 	 
	 	39	DEICOM, San Pedro Sula
	 	 	 
	 	40	DISTRIBUIDORA ADOC DE HONDURAS SA, San Pedro Sula
	 	 	 
	 	41	Distribuidora de Muebles Kessy, Santa Rosa de Copán
	 	 	 
	 	42	DISTRIBUIDORA DE PRODUCTOS AGROPECUARIOS FERTILIZANTES Y FERRETERIA S. de R.L. de C.V., Santa Rosa de Copán
	 	 	 
	 	43	Distribuidora de Válvulas y Equipos S. DE R.L., San Pedro Sula
	 	 	 
	 	44	DURACRETO S.A DE C.V, San Pedro Sula
	 	 	 
	 	45	EACINSA ARRENDAMIENTOS SA DE CV, San Pedro Sula

 

Schedule - 3.01(x) - 2

 

 

 

	 	46	ECONO RENT A CAR, San Pedro Sula
	 	 	 
	 	47	Edson Everardo Caceres, Santa Rosa de Copán
	 	 	 
	 	48	Electro Repuestos Torres DBA Omar Gerardo Torres Espinoza, San Pedro Sula
	 	 	 
	 	49	Empresa Nacional de Energia Electrica (ENEE), Santa Rosa de Copán
	 	 	 
	 	50	EMS PROYECTOS E INSPECCIONES S.A., Villa Nueva
	 	 	 
	 	51	Energia Potencia Y Desarrollo, Las Acacias
	 	 	 
	 	52	Energia y Comunicaciones S. de R. L. de C. V., San Pedro Sula
	 	 	 
	 	53	Equipo Desarrollo e Inversiones S. de R.L., San Pedro Sula
	 	 	 
	 	54	EQUIPOS INDUSTRIALES SA DE CV, Tegucigalpa
	 	 	 
	 	55	ESTACION DE SERVICIO TEXACO CUCUYAGUA, Cucuyagua
	 	 	 
	 	56	Estacion de Servicio Uno San Miguel S de RL de CV, Santa Rosa de Copán
	 	 	 
	 	57	EXA, S.A. de C.V., San Pedro Sula
	 	 	 
	 	58	EXPRECO S DE RL, Santa Rosa de Copán
	 	 	 
	 	59	Falcon Ingenieria SRL, San Pedro Sula
	 	 	 
	 	60	FEG de Honduras SA de CV, San Pedro Sula
	 	 	 
	 	61	FERRECENTRO, Santa Rosa de Copán
	 	 	 
	 	62	FERRETERIA MANANTIAL DBA MIRNA YAQUELI TABORA CHINCHILLA, La Union
	 	 	 
	 	63	FERRETERIA MONTERROSO S.A., San Pedro Sula
	 	 	 
	 	64	Florencia Plaza HOTEL, San Pedro Sula
	 	 	 
	 	65	Francis Ernesto Rojas, Santa Rosa de Copán
	 	 	 
	 	66	Francis Gabriel Zapata Guevara, Cucuyagua
	 	 	 
	 	67	FUNDAEMPRESA (UNITEC), San Pedro Sula
	 	 	 
	 	68	Galvez Matamoros SA de CV, San Pedro Sula
	 	 	 
	 	69	GASOLINERA EL DUENDE S. DE R.L. DE C.V., Santa Rosa de Copán
	 	 	 
	 	70	GEO STRUCTURES S.A. DE C.V., Tegucigalpa
	 	 	 
	 	71	GEOCONSULT S.A. DE C.V., Tegucigalpa

 

Schedule - 3.01(x) - 3

 

 

 

	 	72	Geotec S. de R.L., San Pedro Sula
	 	 	 
	 	73	Grainger, Kansas City
	 	 	 
	 	74	Gran Hotel Plaza S. de R. L. de C.V., Santa Rosa de Copán
	 	 	 
	 	75	GRUPO RIO S DE RL, San Pedro Sula
	 	 	 
	 	76	Grupo Vela Roatan, S.A., Tegucigalpa
	 	 	 
	 	77	HOMEWORK S DE RL, San Pedro Sula
	 	 	 
	 	78	HONDUGAS S. DE R.L. DE C.V., San Pedro Sula
	 	 	 
	 	79	Hondutel, Santa Rosa de Copán
	 	 	 
	 	80	Hopkins Oil Tools, Inc., Mound House
	 	 	 
	 	81	Horizon Well Logging, Inc., LOMPOC
	 	 	 
	 	82	Hotel and Convention Center COPÁNTL, San Pedro Sula
	 	 	 
	 	83	Hotel Elvir S.A. de C.V., Santa Rosa de Copán
	 	 	 
	 	84	Hotel Puesta del Sol dba Marbin Orlando Romero Alvarado, Cucuyagua
	 	 	 
	 	85	Hotel VIP Copán, Angel Antonio Guerra Hernandez,, Santa Rosa de Copán
	 	 	 
	 	86	Importadora Ferretera S.A. de C.V., Puerto Cortés
	 	 	 
	 	87	Industria Termica Comercial SA, San Pedro Sula
	 	 	 
	 	88	Industrias Varias Nacionales SRL CV, San Pedro Sula
	 	 	 
	 	89	INFRA DE HONDURAS,S.A.DE C.V., San Pedro Sula
	 	 	 
	 	90	Ingenieros Civiles Asociados Inversiones S de RL, Tegucigalpa
	 	 	 
	 	91	Ingenieros Consultores Constructores y Electromecanicos S.A., Bugambilia
	 	 	 
	 	92	Inmobiliaria de Hospitalidad San Rafael Honduras S.A., Tegucigalpa
	 	 	 
	 	93	Inporsa dba Inversiones Portillo S.A., Cucuyagua
	 	 	 
	 	94	INSDUSTRIAS METALICAS ROJAS NUÑEZ S. DE R. L. DE C.V., San Pedro Sula
	 	 	 
	 	95	Inversiones Alda dba Alan David Espinoza Flores, Santa Rosa de Copán
	 	 	 
	 	96	INVERSIONES Y COMERCIALIZADORA BENITEZ (INCOBE), San Pedro Sula
	 	 	 
	 	97	Javier Adaly Lopez Alvarado, Santa Rosa de Copán

 

Schedule - 3.01(x) - 4

 

 

 

	 	98	JAVIER ORLANDO SUAZO DUQUE, Santa Rosa de Copán
	 	 	 
	 	99	JDE Cargo Express, San Pedro Sula
	 	 	 
	 	100	Jeidi Zenayda Lara Robles, La Union
	 	 	 
	 	101	Jim Pairish Surveying Co., Bakersfield
	 	 	 
	 	102	Jorge Alberto Maldonado Paz, San Pedro Sula
	 	 	 
	 	103	Juan Carlos Rodriguez, La Union
	 	 	 
	 	104	Juda Ingenieria y Publicidad, Santa Rosa de Copán
	 	 	 
	 	105	K & R Drilling Tools, Bermuda Dunes
	 	 	 
	 	106	Kaeser Compresores de Honduras SRL de CV, San Pedro Sula
	 	 	 
	 	107	Kevin Humberto Peña Dominguez, Santa Rosa de Copán
	 	 	 
	 	108	Kuster Company, Long Beach
	 	 	 
	 	109	La Atlantica S de RL de CV, San Pedro Sula
	 	 	 
	 	110	La Casa de los Tornillos S de RL, San Pedro Sula
	 	 	 
	 	111	Laboratorio Clinico Barel S de RL, Santa Rosa de Copán
	 	 	 
	 	112	Laboratorios Finlay, S.A., San Pedro Sula
	 	 	 
	 	113	Las Cumbres Eco-Saunas y Gastronomia DBA Delfina Concepcion Castillo Minera, Zunil
	 	 	 
	 	114	Lazarus y Lazarus, S.A. de C.V., San Pedro Sula
	 	 	 
	 	115	Lazaruz Service SA CV, San Pedro Sula
	 	 	 
	 	116	Mapfre Honduras, San Pedro Sula
	 	 	 
	 	117	MARIANA TOUR S.A., San Pedro Sula
	 	 	 
	 	118	MARYS ONEYDA REYES NAJERA, La Union
	 	 	 
	 	119	Mecanizaciones y Tornillera Deras dba Darwin Vicente Deras Romero, Cucuyagua
	 	 	 
	 	120	Mediterranean Shipping Company Honduras SA de CV, San Pedro Sula
	 	 	 
	 	121	Mercado del Plástico S de RL, Santa Rosa de Copán
	 	 	 
	 	122	Metal Convertidora SA de CV, San Pedro Sula
	 	 	 
	 	123	MEXICHEM HONDURAS SA DE CV, San Pedro Sula

 

Schedule - 3.01(x) - 5

 

 

 

	 	124	Miguel Terrazas, San Luis
	 	 	 
	 	125	MILTON ADONAY BENITEZ BACA, Tegucigalpa
	 	 	 
	 	126	MINPETCO, El Mirador
	 	 	 
	 	127	Mision Hacia Arriba Mission Upreach INC, Santa Rosa de Copán
	 	 	 
	 	128	Modesto Tabora, Santa Rosa de Copán
	 	 	 
	 	129	Monsol, S.A., San Pedro Sula
	 	 	 
	 	130	MONTAJES ELECTROMECANICOS DE CENTRO AMERICA SA, Puerto Cortés
	 	 	 
	 	131	MSC Industrial Supply Co Inc, St. Louis
	 	 	 
	 	132	Mudanzas Gamundi SA de CV, Tegucigalpa
	 	 	 
	 	133	MULTISERVICIOS RIPORT DBA Ricardo Portillo Guevara, La Union
	 	 	 
	 	134	Nelson Ovidio Lara Erazo, Bo. Santa Teresa
	 	 	 
	 	135	NETWORK PLACE DBA Felipe Antonio Gonzales Madrid, San Pedro Sula
	 	 	 
	 	136	Operadora De Servicios Legales en Honduras, Lexhon, Tegucigalpa
	 	 	 
	 	137	Orellana San Martin & Asociados, Santa Rosa de Copán
	 	 	 
	 	138	Organizacion Hoteltur SA, Guatemala City
	 	 	 
	 	139	Oscar Rolando Moreno Tábora, La Union
	 	 	 
	 	140	PacOcean Forwarding, San Francisco
	 	 	 
	 	141	PDC Honduras SA de CV, San Pedro Sula
	 	 	 
	 	142	PINTURAS SUR DE HONDURAS S.A., Santa Rosa de Copán
	 	 	 
	 	143	Plaza Comercial Santa Isabel DBA Pilar Gonzalez Bosa, Cucuyagua
	 	 	 
	 	144	PREMIER CUSTOMS S. DE R. L. DE C.V., San Pedro Sula
	 	 	 
	 	145	Pricewaterhousecoopers Interamerica S de RL, Santa Rosa de Copán
	 	 	 
	 	146	PROVEEDORA FERRETERA, Santa Rosa de Copán
	 	 	 
	 	147	Rain for Rent, Reno
	 	 	 
	 	148	RAMON ARTURO ROJAS BENITEZ, Santa Rosa de Copán
	 	 	 
	 	149	REMARCO, Santa Rosa de Copán

 

Schedule - 3.01(x) - 6

 

 

 

	 	150	Repuestos y Electrodos S. de R.L. de C.V., San Pedro Sula
	 	 	 
	 	151	Resource Cementing, LLC, Rio Vista
	 	 	 
	 	152	Restaurante Asados Tipicos dba Yanira Iveth Lopez Polanco, Cucuyagua
	 	 	 
	 	153	Robert Gonzales DBA Robert Gonzales Consulting, Bakersfield
	 	 	 
	 	154	Roxanna Lizzeth Lanza Parrish, Santa Rosa de Copán
	 	 	 
	 	155	SageRider West, LLC, Bakersfield
	 	 	 
	 	156	San Joaquin Bit Service, Bakersfield
	 	 	 
	 	157	SANTOS OMAR GAMEZ GAMEZ, Santa Rosa de Copán
	 	 	 
	 	158	SCHOSS ORIGINAL SPORT WEAR SRL DE CV, San Pedro Sula
	 	 	 
	 	159	Scientific Drilling International, Inc., Houston
	 	 	 
	 	160	SEL STORE SA DE CV, Santa Rosa de Copán
	 	 	 
	 	161	Servi Gruas Lara (SGL) S. DE R. L., Santa Rosa de Copán
	 	 	 
	 	162	Servicio de Administracion de Rentas SAR, Tegucigalpa
	 	 	 
	 	163	Servicio Electrico Industrial Valladares S.R.L. de C.V., San Pedro Sula
	 	 	 
	 	164	Servicios Integrales de Seguridad Privada, Tegucigalpa
	 	 	 
	 	165	ServiGruasLaras (SGL) S.de R.L, Santa Rosa de Copán
	 	 	 
	 	166	Sistemas Computacionales, Siscomp, Santa Rosa de Copán
	 	 	 
	 	167	Sistemas y Equipo Contra Incendio de Honduras (SISCOINH), San Pedro Sula
	 	 	 
	 	168	SUMINISTROS ELECTRICOS S DE RL DE CV, San Pedro Sula
	 	 	 
	 	169	SUPERMERCADOS EL 20 MENOS, Santa Rosa de Copán
	 	 	 
	 	170	SYCOM SA DE CV, San Pedro Sula
	 	 	 
	 	171	Taller Industrial Sanzio SRL, San Pedro Sula
	 	 	 
	 	172	TEC- DRILLING S DE RL, San Pedro Sula
	 	 	 
	 	173	Technos Design Computadoras SA de CV, Santa Rosa de Copán
	 	 	 
	 	174	Tecnicas en Montajes Industriales Sociedad de Responsabilidad Limitada, San Pedro Sula
	 	 	 
	 	175	TECNIDESA SA, San Pedro Sula

 

Schedule - 3.01(x) - 7

 

 

 

	 	176	Tecsys S.A de C.V., San Pedro Sula
	 	 	 
	 	177	TIGO, Santa Rosa de Copán
	 	 	 
	 	178	TNG Energy Services, Inc., Bakersfield
	 	 	 
	 	179	Top Test SA de CV, San Pedro Sula
	 	 	 
	 	180	Transporte la Colonia dba Sandra Yamileth Alvarado Alvarado, Cucuyagua
	 	 	 
	 	181	Transportes Hispanos, S.A., Puerto Cortés
	 	 	 
	 	182	TRANSPORTES MADRID DBA CARLOS EDGARDO MADRID, Santa Rosa de Copán
	 	 	 
	 	183	Weatherford U.S., L.P., Rancho Dominguez
	 	 	 
	 	184	Wicom Telefonica S de RL de CV, San Pedro Sula
	 	 	 
	 	185	Wilfredo Alvarado, Santa Rosa de Copán

     

Schedule - 3.01(x) - 8

 

 

 

Part B: Set forth below is a complete list of all contractors and suppliers that, since December 31, 2016, have performed or will perform Works and all amounts remaining to be paid (or projected to be paid) to each such contractor or supplier:

 

	
			 

				
			Supplier Name

				
			Document

				
			Remaining 

			Amount 

			(US$)

			
	
			1.

				
			ORMAT SYSTEMS LTD., Yavne

				
			PO-GPS513

				
			22,144,999

			
	
			2.

				
			ORMAT SYSTEMS LTD., Yavne

				
			PO-GPS514

				
			19,577,000

			
	
			3.

				
			ORMAT SYSTEMS LTD., Yavne

				
			PO-GPS1756

				
			14,819,000

			
	
			4.

				
			Ormat International, Inc., Reno

				
			PO-GPS1729

				
			13,000,000

			
	
			5.

				
			GeoDrill LLC , RENO

				
			PO-GPS1540

				
			11,591,154

			
	
			6.

				
			Ormat Nevada Inc., DO NOT USE

				
			PO-GPS1799

				
			7,371,097

			
	
			7.

				
			Ormat Nevada Inc., DO NOT USE

				
			PO-GPS1730

				
			3,060,000

			
	
			8.

				
			Ingenieros Garcia Consultores (IGC), Tegucigalpa

				
			PO-GPS1829

				
			1,064,080

			
	
			9.

				
			INVERSIONES Y COMERCIALIZADORA BENITEZ (INCOBE), San Pedro Sula

				
			PO-GPS1820

				
			529,312

			
	
			10.

				
			Constructora Zero S. de R.L. de CV, Tegucigalpa

				
			PO-GPS1042

				
			287,434

			
	
			11.

				
			Casys, S.A. de C.V., San Salvador

				
			PO-GPS1901

				
			144,765

			
	
			12.

				
			Energía y Comunicaciones S. de R. L. de C. V., San Pedro Sula

				
			PO-GPS1380

				
			141,631

			
	
			13.

				
			Equipo Desarrollo e Inversiones S. de R.L., San Pedro Sula

				
			PO-GPS1043

				
			141,412

			
	
			14.

				
			Energía y Comunicaciones S. de R. L. de C. V., San Pedro Sula

				
			PO-GPS1160

				
			129,068

			
	
			15.

				
			Ormat Holding Corp,  

				
			PO-GPS1667

				
			87,666

			
	
			16.

				
			PREMIER CUSTOMS S. DE R. L. DE C.V., San Pedro Sula

				
			PO-GPS651

				
			65,783

			
	
			17.

				
			TRANSPORTES MADRID DBA CARLOS EDGARDO MADRID , Santa Rosa de Copán

				
			PO-GPS1833

				
			50,848

			
	
			18.

				
			MB-LATAMLEX ABOGADOS S.A., Tegucigalpa

				
			PO-GPS1906

				
			50,268

			
	
			19.

				
			FEG de Honduras SA de CV, San Pedro Sula

				
			PO-GPS1863

				
			48,715

			
	
			20.

				
			PDC Honduras SA de CV, San Pedro Sula

				
			PO-GPS1743

				
			38,991

			
	
			21.

				
			Servicio de Administración de Rentas SAR, Tegucigalpa

				
			PO-GPS1926

				
			36,030

			
	
			22.

				
			Ingenieros Consultores Constructores y Electromecánicos S.A., Bugambilia

				
			PO-GPS1015

				
			36,001

			
	
			23.

				
			American Telehandler, LLC, St. Augustine

				
			PO-GPS1805

				
			34,910

			
	
			24.

				
			Servicio de Administración de Rentas SAR, Tegucigalpa

				
			PO-GPS1924

				
			33,700

			
	
			25.

				
			MSC Industrial Supply Co Inc, St. Louis

				
			PO-GPS1662

				
			31,616

			
	
			26.

				
			JDE Cargo Express, San Pedro Sula

				
			PO-GPS1894

				
			31,339

			
	
			27.

				
			Ormat de Proyectos de Generación de Energía, Limitada, Guatemala City

				
			PO-GPS1793

				
			29,260

			
	
			28.

				
			INVERSIONES Y COMERCIALIZADORA BENITEZ (INCOBE), San Pedro Sula

				
			PO-GPS1910

				
			28,191

			
	
			29.

				
			Preselección Empresarial S. de R.L., San Pedro Sula

				
			PO-GPS1022

				
			27,220

			
	
			30.

				
			FEG de Honduras SA de CV, San Pedro Sula

				
			PO-GPS1923

				
			26,551

			
	
			31.

				
			CONTRATISTAS ELECTROMECANICOS SRL DE CV, San Pedro Sula

				
			PO-GPS1676

				
			25,580

			
	
			32.

				
			Operadora De Servicios Legales en Honduras, Lexhon, Tegucigalpa

				
			PO-GPS1890

				
			24,700

			
	
			33.

				
			Servicio de Administración de Rentas SAR, Tegucigalpa

				
			PO-GPS1342

				
			22,202

			
	
			34.

				
			FEG de Honduras SA de CV, San Pedro Sula

				
			PO-GPS738

				
			22,177

			
	
			35.

				
			Monkey Forest Consulting Ltd, Central

				
			PO-GPS1522

				
			22,000

			
	
			36.

				
			Grainger, Kansas City

				
			PO-GPS1567

				
			21,548

			
	
			37.

				
			Servicio Eléctrico Industrial Valladares S. de R.L. de C.V., San Pedro Sula

				
			PO-GPS1859

				
			20,465

			
	
			38.

				
			ORMAT SYSTEMS LTD., Yavne

				
			PO-GPS513

				
			22,144,999

			

 

Schedule - 3.01(x) - 9

 

 

 

SCHEDULE 4.04

 

Consents

 

	
			Part A

			
	 	 
	
			1.

				
			Approval granted by the Municipalidad de la Unión, Departamento de Copán, to perform a feasibility study in the area for the possible production of geothermic energy, dated as of February 20, 2006.

			
	 	 
	
			2.

				
			Ruling by SERNA, No. 787-2006, dated as of November 6, 2006, to expand the concession for the feasibility study for the construction and operation of the Project in the Municipio de la Unión, Departamento de Copán.

			
	 	 
	
			3.

				
			Approval granted by the Municipalidad de la Unión, Departamento de Copán, for the development of the Project in San Andres and Aldea de Platanares, dated as of June 15, 2010.

			
	 	 
	
			4.

				
			Operation Contract, dated as of January 6, 2009.

			
	 	 
	
			5.

				
			Environmental License No. 014-2010, granted on January 25, 2010, by SERNA to renew the Operation Contract (Exp. No. 2006-A-032).

			
	 	 
	
			6.

				
			Environmental License and Mitigation Measures Agreement for the Project, by and between SERNA and the Borrower, dated as of January 25, 2010 and valid for the duration of the Project.

			
	 	 
	
			7.

				
			Certification of ruling No. 297-2005, issued by SERNA, dated as of June 30, 2005, affirming the granting of all the rights held by Trans Pacific Geothermal Corporation to the Borrower and the feasibility study permit for the construction and operation of a geothermal project on the Site.

			
	 	 
	
			8.

				
			Interconnection permit, granted by ENEE, dated as of December 1, 2009.

			
	 	 
	
			9.

				
			Municipal exploration permits (annual permit obtained in January of each year prior to start-up of operations and during exploration stage), obtained for years 2006 through year 2012.

			
	 	 
	
			10.

				
			Municipal environmental fee (annual fee paid in January of each year) to defray Municipality’s costs of environmental resource management, paid for years 2011 through year 2012 and the 2012 year operating permit issued by the Municipalidad de la Unión, Departamento de Copán.

			
	 	 
	
			11.

				
			Receipt of payment of the 2017 annual municipal Industry, Service and Commerce Tax.

			
	 	 
	
			12.

				
			Honduran Institute of Anthropology Permit dated November 17, 2005 for the usage of the land in the acreage subject to the Operation Contract as per the diagram attached to the Operation Contract.

			
	 	 
	
			13.

				
			Approval granted by board of trustees of San Andrés, La Unión, Departamento de Copán, dated as of September 11, 2012, to support and develop the geothermal project.

			

 

Schedule 4.04 - 1

 

 

 

	
			14.

				
			Water Contract, dated as of March 25, 2011.

			
	 	 
	
			15.

				
			Official approval by the Honduran National Congress on September 13, 2012 (including completion of publication requirement) of the Water Contract.

			
	 	 
	
			16.

				
			The ENEE PPA, dated as of June 3, 2010, as amended.

			
	 	 
	
			17.

				
			Autorización del Otorgamiento de los Acuerdos de Apoyo para el cumplimiento de los contratos de suministro a las empresas que participaron en el proceso de licitación internacional No. 100-1293/2009 (entre ellas, “Geoplatanares”) published in the Official Gazette on June 7, 2010. This is an authorization for the Joint Guarantee entered into by the Government of Honduras and the Borrower providing assurances of payment for all payments due to the Borrower under the ENEE PPA.

			
	 	 
	
			18.

				
			Certification (Constancia) issued by the Secretary of the National Congress confirming that pursuant to Decree #109-2012 dated July 31, 2012 the National Congress approved the Joint Guarantee.

			
	 	 
	
			19.

				
			Opinion dated March 9, 2012 of ENEE’s attorney to the First Amendment to the ENEE PPA approving the development of the Project in two phases and the obligation of the Borrower to sell to ENEE the first 5 MW generated.

			
	 	 
	
			20.

				
			Official approval granted on December 18, 2012 by the National Congress of Honduras of the Operation Contract by and between SERNA and the Borrower in respect of the use of geothermal resources on the Site.

			
	 	 
	
			21.

				
			SERNA Resolution 0913-2013, dated as of July 17, 2013, approving and confirming the extension of the area of the Project concession and its corresponding modification of the Operation Contract to encompass the use of the land leased to the Borrower under La Bufa Land Lease Agreement, which supersedes the January 2012 extension by SERNA of the Borrower’s environmental license.

			
	 	 
	
			22.

				
			Framework Agreement between ENEE and the Borrower for the construction of a section of the transmission line of 69 kV double circuit parallel to the current 34.5 kV line from Santa Rosa Copán Substation to the Structure No. 23 of Line 336 (draft of agreement has been prepared by the Borrower and ENEE’s engineering management and submitted to ENEE), pending ENEE’s review.

			
	 	 
	
			23.

				
			Approval of ENEE of the first amendment to the ENEE PPA (for the development of the Project in two phases and to provide for the sale of the first 5 MW generated to ENEE).

			
	 	 
	
			24.

				
			Ministry of Tourism of Honduras qualification of a public-interest project that would allow for title or rights of use of land by Honduran companies not owned 100% by Honduran nationals and located in coastal areas or within 40 km of the Honduran borders or coasts (pursuant to Article 107 of the Constitution of Honduras).

			
	 	 
	
			25.

				
			Form TGR-01 evidencing payment of the fine imposed by the Ministry of Tourism relating to item 24 above.

			
	 	 
	26.	Recommendation dated September 20, 2017 issued by the special committee appointed by the National Congress of Honduras in favor of Congressional Approval of the La Bufa Lease.
	 	 
	27.	Congressional Approval of the La Bufa Lease, approved through Decree 125-2017 dated January 18, 2018 and published in in the Official Gazette on April 13, 2018.

 

Schedule 4.04 - 2

 

 

 

	
			Tax exonerations:

			
	 
	
			28.

				
			Exoneration on income tax, capital gains tax, net asset tax, solidarity contribution tax, and all other taxes related to the company’s income – fiscal period 2017.

			
	 	 
	
			29.

				
			Exonerations on import taxes and duties on machinery, equipment, and materials intended for the generation of renewable energy – fiscal periods of 2014, 2015, 2016, 2017 and 2018.

			
	 	 
	
			30.

				
			Exoneration of sales tax on local purchases of goods, services, equipment, replacements, materials intended for the generation of renewable energy – fiscal period 2016.

			
	 	 
	
			31.

				
			Exoneration on income tax and withholding tax on payment of services rendered by Geodrill LLC, a foreign company – fiscal period 2017.

			
	 	 
	
			32.

				
			Amendment to exonerations on import taxes and duties on machinery, equipment and materials intended for the generation of renewable energy – fiscal period 2017.

			
	 	 
	
			33.

				
			Exonerations on import taxes and duties on machinery, equipment and materials intended for geothermal drilling – fiscal period 2017.

			

 

Schedule 4.04 - 3

 

 

 

	
			Part B

			
	 
	
			34.

				
			Notification to the Instituto Hondureño de Turismo that a guarantee trust has been created and the land in reference has been assigned to the trustee, indicating the name of the trustee appointed.

			
	 	 
	
			35.

				
			Resolution issued by the Secretary of Finance of Honduras releasing the Borrower from withholding tax on interest paid to OPIC.

			
	 
	 
	
			Tax exonerations

			
	 
	
			36.

				
			Exoneration on income tax and withholding tax obligations regarding payment of services rendered by foreign companies (Ormat International Inc., and Ormat Nevada Inc.), intended for the generation of renewable energy.

			

 

Schedule 4.04 - 4

 

 

 

SCHEDULE 4.13(b)(i)

 

PUNCH LIST ITEMS 

 

	
			Remaining to Complete

				
			Estimated 

			Cost 

			(Dollars)

				
			Forecast 

			Completion 

			
	
			Power plant site fill slopes: The fill slopes on the north and east sides of the power plant site may be subject to failure in a design basis seismic event.

				
			2,000,000

			to

			4,000,000

				
			December 15th 2018 (*)

			
	
			Stability of slopes: The cut slopes at the west end of the power plant site are more steep and higher than had been indicated by the preliminary earthwork drawings provided for the Independent Engineer’s review.

				
			250,000

				
			June 1st, 2018

			
	
			A limited amount of final grading and surfacing (gravel) is needed at the power plant site.

				
			250,000

				
			This work is nonstructural and it will be completed upon completion of the fill slope work

			
	
			Dining room, including shower and toilets

				
			35,000

				
			June 1st, 2018

			
	
			Add shade for 1000 gal fuel diesel tank

				
			30,000

				
			The fuel tank is on site, containment will be completed by May 1st, 2018

			
	
			Add storage room for lubricants

				
			35,000

				
			May 1st 2018

			

 

 

(*) Subject to analysis and findings of soil study, rainy season land conditions and timely agreement with the IE on preferred work specifications

 

Schedule 4.13(b)(i) - 1

 

 

 

SCHEDULE 4.13(b)(ii)

 

CONSTRUCTION PAYMENTS

 

None.

 

Schedule 4.13(b)(ii) - 2

 

 

 

SCHEDULE 4.15

 

Environmental and Social Action Plan (ESAP)

 

	
			No.

				
			Action

				
			Due Date

			
	
			1

				
			Social and Environmental Management System

				 
	
			1.1

				
			Develop and deliver to OPIC for review and approval a comprehensive project-specific Environmental and Social Management System (ESMS) for construction. The ESMS should include policies, procedures, management plans, risks, impacts, human resources, training, emergency response, record keeping, monitoring and review and should provide sufficient detail for effective implementation of environmental, social, health and safety plans. The ESMS should include an Environmental and Social Management Plan, which should include the specific procedures to implement the mitigation measures including the roles and responsibilities, training requirements, equipment and resources, record keeping, supervision audits, etc. The ESMS should also include an organizational chart detailing the Environmental, Social, Health and Safety teams, structure and relationship at the corporate and project site levels, including contractor and subcontractor levels.

				
			Prior to first disbursement

			 

			 

			 

			 

			 

			
	 	 	 
	 	The Borrower will develop an ESMS for operation phase of the Project.	Six months prior to start of operations
	 	 	 
	
			1.2

				
			Develop and deliver to OPIC a Stakeholder Engagement Plan (SEP) aligned with Annex B of the IFC Performance Standard 1 that identifies key stakeholder groups, prioritizing affected communities; outlines the strategy and frequency with which the Borrower will communicate with stakeholders and community members throughout the life of the Project; outlines monitoring and reporting activities; describes the resources and responsibilities for implementation; and addresses how input from stakeholders will be incorporated into the Project’s management system. Stakeholder communication/information disclosure should include all aspects of potential impact (positive and negative) throughout the life of the Project; for example, in the case of construction scheduling so that affected communities may anticipate increased traffic, personnel, machinery installation, noise, etc. and participate in the development of mitigation measures where appropriate.

			 

			The SEP should take into consideration the recommendations from the Social Risk Assessment of Geoplatanares Geothermal Project: Main Findings (September 2016, Social Capital Group) including engagement with broader set of stakeholders; increasing capacity to its community relations team; and emphasis on transparency, managing expectations and strong communication strategy.

				
			Prior to first disbursement

			

 

Schedule 4.15 - 1

 

 

 

	No.	Action	Due Date
	
			1.3

				
			The Borrower shall develop and implement a formalized community grievance mechanism which outlines the manner in which grievances can be submitted to the company, the process by which grievances will be handled, organizational capacity for receiving and responding to grievances and a time frame for addressing grievances.

				
			Prior to first disbursement

			
	
			1.4

				
			The Borrower shall submit to OPIC a Community Development Plan. The Plan shall include strategy for communicating with stakeholders and community; suggested timelines for activities; monitoring and reporting mechanism; description of resources and responsibilities for implementation; and addresses how input from stakeholders will be incorporated into the Plan.

				
			Prior to first disbursement

			
	
			2.0

				
			Labor and Working Conditions

				 
	
			2.1

				
			The Borrower shall demonstrate that there are adequate emergency response plans in place to respond to potential well blow-outs, pipeline failures, release of toxic drilling additives, fluids and H2S gas, as well as steam containing heavy metals, acids, mineral deposits and other pollutants.

				
			Prior to first disbursement

			
	
			3.0

				
			Resource Efficiency and Pollution Prevention

				 
	
			3.1

				
			The Borrower shall conduct a Baseline Noise Study. Once operational, the Borrower shall conduct a Noise Assessment that includes measures at the site boundary and closest residences or businesses and show compliance with the noise guidelines in the IFC 2007 Environmental, Health, and Safety General Guidelines or the IFC 2007 Environmental, Health, and Safety Guidelines for Wind. The results of these studies should be submitted to OPIC for its review and approval.

				
			Prior to first disbursement (Baseline Noise Study)

			 

			No later than six months after the start of operations (Noise Assessment)

			
	
			4.0

				
			Community Health, Safety and Security

				 
	
			4.1

				
			OPIC will require that the Project develop and implement a Code of Conduct with respect to interactions with communities and include as part of the Environmental and Social Management Plan trainings and awareness campaigns regarding community health and safety issues, etc.

				
			Prior to first Disbursement

			
	
			5.0

				
			Land Acquisition and Involuntary Resettlement

				 
	
			5.1

				
			The Borrower shall notify OPIC if any economic or physical displacement should occur and submit to OPIC for its review and approval additional information and plans (Resettlement Action Plan, Livelihood Restoration Plan) as requested.

				
			Ongoing

			
	
			8.0

				
			Cultural Heritage

				 
	
			8.1

				
			The Borrower shall submit to OPIC for review and approval a Chance Finds Procedure.

			 

				
			Prior to first Disbursement

			

 

Schedule 4.15 - 2

 

 

 

SCHEDULE 4.19-A

 

DRILLING PROGRAM

 

A.     Number of Wells

 

The following wells were already drilled in respect to Plant Platanares I

 

	 	
			Name of Well

				
			Location of Well

				
			Expected output/capacity

				 
	 	 	
			UTM X

				
			UTM Y

				 	 
	
			1

				
			OP2

				
			293394

				
			1632047

				
			Exploration

				 
	
			2

				
			OP3

				
			292406

				
			1633001

				
			Injection

				 
	
			3

				
			OP3A

				
			292401

				
			1632990

				
			Injection

				 
	
			4

				
			OP4

				
			292549

				
			1632770

				
			Exploration

				 
	
			5

				
			OP5

				 	 	
			Monitoring

				 
	
			6

				
			OP-5A

				
			292023

				
			1633749

				
			Production

				 
	
			7

				
			OP-5B

				
			292013

				
			1633753

				
			Production

				 
	
			8

				
			OP-5C RD

				
			292003

				
			1633757

				
			Production

				 
	
			9

				
			OP-5D

				
			292021

				
			1633756

				
			Production

				 

 

B.     Performance of Wells

 

From COD on September 1, 2017 through October 13, 2017, field-wide performance was steady, with net generation at the expected output of 35 MW. The OP5A to OP5D production wells were steady in such first 6 weeks of commercial operation:

 

- Well OP‐5A averaged a flow rate of about 2,715 gpm and a temperature of about 176.7°C

- Well OP‐5B averaged a flow rate of about 2,840 gpm and a temperature of about 177.7°C

- Well OP‐5C averaged a flow rate of about 2,700 gpm and a temperature of about 177°C

- Well OP‐5D averaged a flow rate of about 2,640 gpm and a temperature of about 177.5°C

 

The total of these rates is 10,800 gpm. During the initial start‐up period, individual wells showed production rates as high as 4,000 gpm, and the sum of the individual maximum rates would be over 14,000 gpm. This suggests that there is a surplus of approximately 30% in the combined capacity of the production wells. The operational data suggests that resource decline is minimal and the production well capacity is more than sufficient for 35 MW of net electrical generation.

 

C.     Drilling Parameters

 

The Borrower shall ensure that all drilling and well testing activities are conducted in accordance with Good Industry Practice, and that all relevant and testing records have been made available to the Independent Engineer.

 

Schedule 4.19 -A - 1

 

 

 

SCHEDULE 4.19-B

 

RESERVOIR MONITORING PLAN

 

 

 

 

 

 

Schedule 4.19 -B - 1

 

 

 

SCHEDULE 4.19-C

 

FORM OF RESERVOIR MONITORING REPORT

 

 

 

 

Schedule 4.19 -C - 1

 

 

 

SCHEDULE 6.03

 

INSURANCE

 

	
			1.

				
			Definitions

			

 

	
			1.1

				
			“Approved Insurer” means an insurer of recognized standing which:

			

 

	 	
			(a)

				
			has a financial strength rating of at least A- from Standard & Poor’s or A- from A.M. Best; or

			

 

	 	
			(b)

				
			is otherwise acceptable to OPIC (following consultation with the Insurance Advisor);

			

 

provided, that, any insurer which qualifies as an Approved Insurer in accordance with the foregoing shall cease to be an Approved Insurer once OPIC notifies the Borrower:

	 	
			(i)

				
			that, in OPIC’s sole discretion, such insurer has suffered an adverse change which has affected its standing in the international insurance market such that OPIC (following consultation with the Insurance Advisor) would not have agreed to such insurer qualifying as an Approved Insurer; or

			

 

	 	
			(ii)

				
			at least 30 days prior to the expiry of an existing Insurance Policy of an Approved Insurer, that such Approved Insurer will cease to be an Approved Insurer at the expiry of such existing Insurance Policy.

			

 

	
			1.2

				
			“Approved Reinsurer” means a reinsurer of recognized standing which:

			

 

	 	
			(a)

				
			has a financial strength rating of at least A- from Standard & Poor’s or A- from A.M. Best; or

			

 

	 	
			(b)

				
			is otherwise acceptable to OPIC (following consultation with the Insurance Advisor);

			

 

provided, that, any insurer which qualifies as an Approved Reinsurer in accordance with the foregoing shall cease to be an Approved Reinsurer once OPIC notifies the Borrower:

	 	
			(i)

				
			that, in OPIC’s sole discretion, such reinsurer has suffered an adverse change which has affected its standing in the international insurance market such that OPIC (following consultation with the Insurance Advisor) would not have agreed to such reinsurer qualifying as an Approved Reinsurer; or

			

 

	 	
			(ii)

				
			at least 30 days prior to the expiry of an existing Insurance Policy of an Approved Reinsurer, that such Approved Reinsurer will cease to be an Approved Reinsurer at the expiry of such existing Insurance Policy.

			

 

	
			1.3

				
			“Not Commercially Available” means all of the following conditions are satisfied:

			

 

	 	
			(a)

				
			in OPIC’s sole discretion, the required insurance (or reinsurance, as applicable) is obtainable only at excessive costs or under other unreasonable terms that are not justified by the risks being insured against;

			

 

	 	
			(b)

				
			the required insurance (or reinsurance, as applicable) is generally not carried by companies of a similar size that are engaged in the same or a similar business and that own similar properties in the same or similar geographic area as the Project; and

			

 

	 	
			(c)

				
			the required insurance (or reinsurance, as applicable) is not carried by any other geothermal projects owned directly or indirectly by the Shareholders or under the control of the Sponsor.

			

 

 

Schedule 6.03 - 1

 

 

 

	
			2.

				
			Insurance Covering the Borrower. The Borrower shall:

			

 

	
			2.1

				
			procure not later than the first Closing Date and maintain or cause to be maintained, at all times thereafter in full force and effect until all Secured Obligations are paid in full (unless otherwise specified below), all insurance specified in Annex A hereto and reinsurance of such policies, in all cases with Approved Insurers and Approved Reinsurers;

			

 

	
			2.2

				
			promptly following receipt of request therefor from OPIC (which request shall be provided following consultation with the Borrower), obtain additional insurance coverage of risks or liabilities that are not specified in this Schedule 6.03 as would from time to time be obtained by a prudent power plant similar to the Project that does not self-insure, at the amounts and deductibles specified in such notice;

			

 

	
			2.3

				
			promptly following the receipt of a request therefor from OPIC, obtain additional insurance or make modifications to the terms, conditions, amounts or deductibles of any Insurance Policy required pursuant to Sections 2.2 or 2.3 of this Schedule 6.03 as OPIC, in consultation with the Borrower, may determine to be necessary or desirable and, if specified in such request, cover any material change in the identified risk any exposure of the Borrower, its business or its property and adjust for inflation and other relevant factors;

			

 

	
			2.4

				
			comply with all warranties under each Insurance Policy;

			

 

	
			2.5

				
			not modify (except in accordance with the terms hereof), rescind, terminate, cancel, or cause or consent to a material change to any Insurance Policy without the prior written consent of OPIC;

			

 

	
			2.6

				
			on each date that any Insurance Policy in effect on the first Closing Date is first renewed, ensure that OPIC is listed as loss payee on such Insurance Policy; and

			

 

	
			2.7

				
			ensure that the terms of any renewals of Insurance Policies that are all risk policies account for the revised replacement cost value of the covered assets;

			

 

provided that, OPIC (in consultation with the Insurance Advisor) shall be entitled to review from time to time, in consultation with the Borrower, the monetary limits and deductibles of each Insurance Policy, such review not to be conducted more than once every calendar year with respect to each such policy.

 

 

Schedule 6.03 - 2

 

 

 

	
			3.

				
			Borrower Conditions and Requirements.

			

 

	
			3.1

				
			Loss Notification: The Borrower shall promptly notify OPIC of any single loss for an amount that is or could reasonably be expected to be in excess of five hundred thousand Dollars ($500,000) covered by any Insurance Policies.

			

 

	
			3.2

				
			Loss Adjustment and Settlement: A loss under any Insurance Policies for property damage or business interruption insurance for the Project shall be adjusted with the insurance companies, including the prompt commencement by the Borrower of appropriate proceedings, subject to the approval of OPIC if such loss is valued at an amount greater than $1,000,000. In addition, the Borrower may, in its reasonable judgment, consent to the settlement of any loss; provided that, OPIC’s prior written consent shall be required in the event the amount of the loss exceeds $1,000,000. OPIC shall have, and reserves, the right to participate in settlement negotiations with the insurers.

			

 

	
			3.3

				
			Compliance with Policy Requirements: The Borrower shall not violate or permit to be violated any of the conditions, provisions or requirements of any Insurance Policy, and the Borrower shall, in all material respects, (i) perform, satisfy and comply with, or (ii) cause to be performed, satisfied and complied with, all conditions, provisions and requirements of all Insurance Policies.

			

 

	
			3.4

				
			Waiver of Subrogation: The Borrower hereby waives any and every claim for recovery from OPIC for any and all loss or damage covered by any of the Insurance Policies. Furthermore, the Borrower shall cause its insurers and reinsurers to waive any and all rights of subrogation against OPIC.

			

 

	
			3.5

				
			Annual Overview of Insurances: On an annual basis, the Borrower shall furnish OPIC and the Insurance Advisor with an annual overview of the Borrower’s insurance and reinsurance coverage, which shall include a list of all Insurance Policies and a description of all renewals and other changes to such policies during the previous year. Any certificates of insurance or reinsurance, as applicable, insurance or reinsurance binders, as applicable, certificates from the Borrower’s insurance and reinsurance broker, as applicable, or copies of Insurance Policies required to be delivered pursuant to Section 6.1 of this Schedule 6.03 that have not previously been delivered to OPIC shall be delivered together with such annual overview of insurance and reinsurance. Upon request, the Borrower will promptly furnish OPIC with copies of all Insurance Policies, binders and cover notes or other evidence of such insurance (or reinsurance).

			

 

	
			3.6

				
			Payments: The Borrower shall pay when due any premium, commission and any other amounts and take such other action as may be necessary for effecting and maintaining in force each Insurance Policy.

			

 

	
			3.7

				
			Notification: The Borrower shall promptly notify the relevant insurers or reinsurers, as applicable, of any event entitling the Borrower to make a claim in excess of the deductible amount under any Insurance Policy written by such insurer or reinsurer, as applicable, and diligently pursue such claim, unless the Borrower has, with the prior written consent of OPIC, decided not to pursue such claim.

			

 

 

Schedule 6.03 - 3

 

 

 

	
			3.8

				
			No Omissions: The Borrower shall not do or fail to do, or permit to be done or not done, anything to:

			

 

	
			3.8.1

				
			render any Insurance Policy, or any provision of that Insurance Policy, void or voidable or lead to its suspension or impair or defeat any such policy in whole or in part; or

			

 

	
			3.8.2

				
			prejudice the Borrower’s or, where OPIC is the loss payee or an additional insured, OPIC’s right to claim or recover under any Insurance Policy.

			

 

	
			3.9

				
			Enforcement of Rights: The Borrower shall enforce its rights under the Project Documents, to the extent it has such rights, so as to ensure that any Person (other than the Borrower) required to provide insurance under a Project Document obtains and maintains Insurance Policies as required thereby.

			

 

	
			3.10

				
			Additional Undertakings:

			

 

	
			3.10.1

				
			The Borrower shall ensure that each insurer and reinsurer under all Insurance Policies:

			

 

	 	
			(a)

				
			is promptly notified by the Borrower of the Lien created in favor of OPIC under the Security Documents in the Borrower’s title to, and rights, interest and benefits under, such Insurance Policies;

			

 

	 	
			(b)

				
			provides OPIC sixty (60) days (or, if due to non-payment of a premium, ten (10) days) notice of the issuance of any notice of cancellation or suspension of the relevant Insurance Policy;

			

 

	 	
			(c)

				
			acknowledges that OPIC, as a beneficiary of the relevant Insurance Policy and lender under the Transaction Documents, is not liable to the insurers (or reinsurers, as applicable) for (i) the payment of any insurance (or reinsurance, as applicable) premiums; (ii) any other obligations of the Borrower; or (iii) any other obligations of any kind;

			

 

	 	
			(d)

				
			acknowledges that OPIC has the right, but not the obligation, to pay premiums on behalf of the Borrower; and

			

 

	 	
			(e)

				
			includes all lender’s clauses, including non-vitiation, and a waiver of any and all rights of recourse or subrogation against OPIC, howsoever arising.

			

 

	
			3.10.2

				
			The Borrower shall, with respect to all Insurance Policies, as applicable, (a) give OPIC forty-five (45) days’ notice (or, if due to non-payment of a premium, ten (10) days’ notice) of the issuance of any notice of cancellation or suspension of any Insurance Policy and of any fact of which it becomes aware that could affect the coverage under any Insurance Policy and (b) as a condition to the first Disbursement, provide to OPIC a certificate covering the matters set forth in Section 6.1(a) of this Schedule 6.03 with respect to the Insurance Policies.

			

 

	
			3.10.3

				
			If not provided to OPIC pursuant to Sections 3.10.1(b) or 3.10.2 above, as applicable, the Borrower shall provide OPIC forty-five (45) days’ notice (or, if due to non-payment of a premium, ten (10) days’ notice) of the issuance of any notice of cancellation or suspension of any Insurance Policy and of any fact of which it becomes aware that could affect the coverage under that Insurance Policy and of such other matters as specified in this Schedule 6.03.

			

 

 

Schedule 6.03 - 4

 

 

 

	
			3.10.4

				
			The Borrower shall provide to OPIC letters of undertaking from its insurance brokers and reinsurance brokers in form and substance satisfactory to OPIC, which address, inter alia, notification to OPIC in the event that the brokers become aware of any fact that may materially and adversely affect the coverage under the relevant Insurance Policy, premium payment confirmation, and any changes in the coverage placement of the carrier.

			

 

4.            Insurance Policy Conditions and Requirements.

 

	
			4.1

				
			Language: Each Insurance Policy shall be in the English language (to the extent permitted by Applicable Law) or a certified English translation thereof shall be provided to OPIC, and each shall have terms and conditions acceptable to OPIC and be available on commercially reasonable terms and consistent with generally accepted industry practice for prudent power-plant-operating companies similar to the Project that do not self-insure.

			

 

	
			4.2

				
			Additional Insured: Except with respect to workers’ compensation and employer’s liability insurance, OPIC and, where required by written contract, all contractors working at the Site shall be included as additional insured parties on all Insurance Policies, and their directors, officers, employees, agents and assigns shall also be included as additional insured parties on all liability Insurance Policies.

			

 

	
			4.3

				
			Separate Policies: All Insurance Policy terms and conditions (except those relating to limits of liability) shall operate as if they were a separate Insurance Policy covering each insured party, providing that each insured party is insured individually by such Insurance Policy.

			

 

	
			4.4

				
			Loss Payee: OPIC shall be the sole loss payee under (i) each Insurance Policy (except for third party liability insurance, workers’ compensation, employer’s liability and automobile liability insurance) on the Borrower’s property which is the subject of the Security Documents and (ii) each Insurance Policy covering delay in start-up (if any) and business interruption.

			

 

	
			4.5

				
			Rights of OPIC: All terms and conditions of each Insurance Policy conferring any right, protection or benefit on OPIC (including, but not limited to, terms and conditions relating to status as sole loss payee and additional or additional named insured and notice requirements) shall at all times remain in full force and effect notwithstanding any act or failure to act on the part of the Borrower, its agents or employees or on the part of its construction contractors or subcontractors, unless such Insurance Policies are permitted to be terminated in accordance with this Schedule 6.03 and so long as a 438 BFU Lender’s Loss Payable Clause or a generally accepted equivalent or alternative is commercially available.

			

 

	
			4.6

				
			Separation of Interests: All Insurance Policies shall insure the interests of OPIC regardless of any breach or violation by the Borrower or any other party of warranties, declarations or conditions contained in such Insurance Policies, any action or inaction of the Borrower or others, any foreclosure relating to the Project or any change in ownership of all or any portion of the Project.

			

 

	
			4.7

				
			All liability Insurance Policies, except workers’ compensation and employer’s liability, to be maintained by Borrower, shall be endorsed to include a cross liability clause.

			

 

	
			4.8

				
			All Insurance Policies shall provide that insurance and reinsurance, as applicable, shall be primary and not in excess of or in addition to any other insurance (or reinsurance, as applicable) (other than (x) reinsurance of terrorism policies, for which the global reinsurance policy in the name of Sponsor existing as of the date hereof shall be sufficient and (y) 50/50 marine cargo loss sharing provisions).

			

 

	
			5.

				
			Failure to Maintain Insurance. In the event the Borrower fails to take out or maintain the full insurance and reinsurance coverage required by this Schedule 6.03, OPIC, upon thirty (30) days’ notice (unless the aforementioned insurance or reinsurance would lapse within such period, in which case notice should be given as soon as reasonably possible) to the Borrower of any such failure, may (but shall not be obligated to) take out the required Insurance Policies and pay the premiums on the same. All amounts so advanced by OPIC shall become an additional obligation of the Borrower, and the Borrower shall immediately pay such amounts to OPIC, together with default interest thereon from the date so advanced, in accordance with the Financing Documents.

			

 

 

Schedule 6.03 - 5

 

 

 

	
			6.

				
			Reporting Requirements.

			

 

	
			6.1

				
			Certificates of Insurance and Copies of Insurance Policies:

			

 

	
			6.1.1

				
			On or prior to the first Closing Date, with respect to any Insurance Policy that is required to be in place as of the Closing Date, or, with respect to any Insurance Policy that is not required until or is renewed after the first Closing Date, within fifteen (15) days after such Insurance Policy is issued or renewed, the Borrower shall cause its insurance or reinsurance broker, as applicable, to provide to OPIC and its Insurance Advisor certificates of insurance or reinsurance binders that (i) identify relevant insurers (or reinsurers, as applicable), the type of insurance (or reinsurance, as applicable), the policy numbers, the insurance (or reinsurance as applicable), limits and the policy term, (ii) include evidence that values reported to the relevant insurers (or reinsurers, as applicable) and reflected in the Insurance Policies’ limits are up-to-date and (iii) specifically list any special provisions and endorsements, including but not limited to all endorsements of OPIC as additional insured or additional loss payee, as applicable, and all other endorsements for the benefit of OPIC that are required by this Schedule 6.03. Such certificates of insurance (or reinsurance, as applicable) and insurance binders (or reinsurance binders, as applicable, shall be accompanied by a certificate from the Borrower’s insurance or reinsurance broker, as applicable, in form and substance acceptable to OPIC and confirming, inter alia, that (t) such Insurance Policy has been issued or renewed, as applicable, and is in full force and effect without default, (u) all premiums then due and payable under such Insurance Policy have been paid, (v) the renewal period, (w) the premium, (x) the amounts insured or reinsured, as applicable, for each asset or item, (y) any changes in terms or conditions from such Insurance Policy’s original issue date or, if applicable, last renewal, and, (z) with respect to any Insurance Policy renewal, confirmation that the terms and conditions naming OPIC as sole or first loss payee and additional insured, as applicable, remain in effect.

			

 

	
			6.1.2

				
			Prior to the Closing Date or, with respect to Insurance Policies that are not required until or are renewed after the first Closing Date, within sixty (60) days after the first Closing Date, the Borrower shall provide to OPIC a copy of all Insurance Policies issued to the Borrower, incorporating the loss payee terms and conditions required under this Schedule 6.03. For the avoidance of doubt, the Borrower will provide copies of any facultative reinsurance policies to OPIC.

			

 

 

Schedule 6.03 - 6

 

 

 

	
			6.2

				
			Evidence of Premium Payment: The Borrower shall provide to OPIC such evidence of premium payment as OPIC may from time to time reasonably request.

			

 

	
			6.3

				
			Other Information: The Borrower shall provide to OPIC any other information or documents on each Insurance Policy as OPIC reasonably requests from time to time.

			

 

	
			7.

				
			Application of Proceeds. The Borrower shall apply all proceeds of Insurance Policies in the manner specified in the Accounts Agreement and, if applicable, the Accounts Administration and Retention Agreement.

			

 

	
			8.

				
			Limits on Commercial Availability.

			

 

	
			8.1

				
			Construction and erection all risk coverage, operational all risk property coverage, third party liability coverage and all insurance or reinsurance, as applicable, required to be maintained by Applicable Law shall be maintained at all times required by this Agreement and in accordance with all requirements hereof, including those set forth in this Schedule 6.03. In the event that any other insurance (or reinsurance, as applicable) coverage (including the terms and conditions, required lender provisions, limits or deductibles thereof) required to be maintained pursuant to this Section 8 and this Schedule 6.03 is or becomes Not Commercially Available, the Borrower shall promptly notify OPIC of such facts and circumstances, follow the procedures in this Section 8 if the Borrower desires such requirements to be waived or modified, and obtain the best insurance (or reinsurance, as applicable) then available in the commercial insurance market which complies with the requirements of this Schedule 6.03 (and which is satisfactory to OPIC, in consultation with its Insurance Advisor).

			

 

	
			8.2

				
			To request a waiver or alteration of insurance requirements (or reinsurance requirements, as applicable) based on limitations in commercial availability, the Borrower shall make a specific request to OPIC in writing, and any such request shall include (x) a report (in form and substance satisfactory to OPIC) containing a detailed analysis by the Borrower’s insurance broker (or reinsurance broker, as applicable) of the applicable market conditions, (y) the Borrower’s proposal for an alternative means of risk mitigation, and (z) the following Certified representations:

			

 

	
			8.2.1

				
			that the required insurance or reinsurance, as applicable, coverage is Not Commercially Available; and

			

 

	
			8.2.2

				
			in any case where what is Not Commercially Available is the full amount of required insurance (or reinsurance, as applicable), the maximum amount of insurance (or reinsurance, as applicable) coverage that is available on commercially reasonable terms in the commercial insurance market.

			

 

	
			8.3

				
			The granting by OPIC of any waiver of insurance requirements (or reinsurance requirements, as applicable) will be at OPIC’s sole discretion and may be subject to a Modification Fee. Any such waiver shall be effective only so long as such insurance (or reinsurance, as applicable) shall continue to be Not Commercially Available. At any time after the granting of any such waiver, OPIC may request, and the Borrower shall furnish to OPIC within fifteen (15) days after such request, supplemental reports acceptable to OPIC updating the prior reports and reaffirming their conclusions that the relevant insurance or reinsurance, as applicable, is Not Commercially Available; it being understood that the failure of the Borrower to furnish any reports required pursuant to this Section 8 shall be deemed to be conclusive evidence that the condition giving rise to the waiver no longer exists and that such waiver is no longer effective.

			

 

 

Schedule 6.03 - 7

 

 

 

ANNEX A TO SCHEDULE 6.03

 

1. OPERATIONAL INSURANCE

 

A. PROPERTY ALL RISK INSURANCE

 

Cover: All assets comprising the Project, including but not limited to, buildings and their contents, machinery, stock, fixtures, fittings and all other personal property, against “all risks” of physical loss or damage, including machinery breakdown, as described within the policy wording.

 

Sum Insured: An amount sufficient to reinstate the property (or as may be sub-limited therein) as agreed with OPIC from time to time.

 

Deductibles: PD deductible of (a) 5% of the covered loss (minimum of $500,000 but subject to a maximum of $1,500,000), of each and every occurrence/accident in respect of Flood, Earthquake Shock, Hurricane, Volcanic Eruption and Landslide and (b) $1,500,000 in respect of each and every occurrence of any other losses.

 

Period of Cover: To be maintained from the earliest of COD or the date from which the assets cease to be insured under the Builder All Risk.

 

General:

	 	
			(a)

				
			Automatic reinstatement of sum insured;

			

 

	 	
			(b)

				
			Minor works;

			

 

	 	
			(c)

				
			Capital additions;

			

 

	 	
			(d)

				
			Professional fees clause;

			

 

	 	
			(e)

				
			Removal of debris clause;

			

 

	 	
			(f)

				
			Expediting expenses; and

			

 

	 	
			(g)

				
			Strikes, riots and civil commotion (except if excluded under war exclusion).

			

 

 

B. BUSINESS INTERRUPTION

 

Cover: Loss of revenue as a direct consequence of physical loss of or physical damage to the Project insured under the Property All Risks policy (or which would be covered but for the application of the deductible).

 

Sum Insured: Gross profit or an amount at least equal to the estimated debt service (including interest and capital repayment) and fixed expenses during a covered interruption.

 

Maximum Indemnity Period: 12 months.

 

Deductible: 45 days.

 

Period of Cover: As per Property All Risk insurance

 

 

Schedule 6.03 - Annex A - 1

 

 

 

General:

	 	
			(a)

				
			Denial of access;

			

 

	 	
			(b)

				
			Public utilities extension; and

			

 

	 	
			(c)

				
			Customers’ and suppliers’ extensions to the extent available.

			

 

 

C. THIRD PARTY LIABILITY

 

Cover: Legal liability of the insured parties for death or bodily injury to third parties or loss or damage to their property arising out of the performance of the works.

 

Limit of Indemnity: To be agreed with OPIC in consultation with the Insurance Advisor.

 

Deductibles: Not to exceed $25,000 per occurrence for property damage, but no deductible for bodily injury.

 

Period of Cover: As per Property All Risks insurance.

 

General:

	 	
			(a)

				
			Cross liability clause;

			

 

	 	
			(b)

				
			Worldwide jurisdiction (subject to the market standard North American conditions if necessary);

			

 

	 	
			(c)

				
			Sudden and accidental pollution and the costs incurred of third party clean up;

			

 

	 	
			(d)

				
			“Bodily Injury” to be extended to cover false arrest, invasion of privacy, detention, libel, slander and defamation; and

			

 

	 	
			(e)

				
			Cover obstruction, nuisance, and interference with rights of way, water, light, air or easement.

			

 

D. TERRORISM 

 

Cover: Physical loss or physical damage and consequent loss of revenue caused by an act of terrorism to the Project.

 

Sum Insured: At all times to represent a sum which is sufficient to cover the largest foreseeable loss scenario, as reasonably agreed by OPIC, to comprise: (i) all property loss and/or damage costs (based on the full reinstatement value of such lost or damaged property) and (ii) debt service and fixed costs for the duration of any business interruption.

 

OPIC acknowledges that the sum insured is a combined sum shared among all projects of the Sponsor.

 

Maximum Indemnity Period: 12 months

 

Deductibles:

	
			8.4

				
			Assets: $100,000 each and every loss; and

			

 

	
			8.5

				
			Revenue: 30 days.

			

 

 

Schedule 6.03 - Annex A - 2

 

 

 

2. OTHER INSURANCES

 

At all times Borrower to maintain or cause to be maintained, with respect to the Project:

 

A. CONTROL OF WELL/OPERATORS EXTRA EXPENSE

 

Risks Insured: Operator’s extra expense including cost of well control, redrilling and extra expenses, seepage and pollution, clean up and contamination.

 

Cover: All costs associated with regaining control of wells and redrilling, including underground well control, well safety, care custody and control, evacuation expenses, extended redrilling and restoration, and removal of wreck or debris.

 

Sum Insured: not less than $20,000,000 combined single limit per occurrence, except $2,500,000 for property of others in care, custody and control.

 

Geographical Limits: Honduras

 

Maximum Deductible: Not greater than $250,000 per event; $125,000 for equipment in the care, custody and control of the operator.

 

B. WORKERS COMPENSATION INSURANCE

 

Employer’s Liability Insurance

 

As required by Applicable Law, including such other forms of insurance (or reinsurance, if applicable) which the Borrower is required by Applicable Law to maintain, which provide statutory benefits and cover loss resulting from injury, sickness, disability or death of the employees of the Borrower.

 

C. AUTOMOBILE LIABILITY INSURANCE.

 

If Borrower has automobiles, automobile liability insurance against claims for bodily injury (including death) and property damage covering all owned, non-owned and hired motor vehicles, in amounts as required by Applicable Law.

 

D. OTHER INSURANCES

 

Any other insurances or reinsurances, if applicable, required by Applicable Law.

 

 

Schedule 6.03 - Annex A - 3

 

 

 

E. OTHER CONDITIONS

	 	
			(a)

				
			Non-renewal; “Tail” Coverage.

			

 

In the event that any Insurance Policy is written on a “claims-made” basis and such Insurance Policy is not renewed or the retroactive date of such policy is to be changed, the Borrower shall obtain for each such Insurance Policy extended reporting period coverage or “tail” coverage of at least three (3) years for each such Insurance Policy and shall provide OPIC with proof that such basic and supplemental extended reporting period coverage or “tail” has been obtained.

 

	 	
			(b)

				
			The governing law with regard to local, Honduran polies shall be that of the Republic of Honduras and, with regard to global corporate insurance and reinsurance policies (if any), shall be English or New York.

			

 

	 	
			(c)

				
			Payment of loss proceeds by insurers and reinsurers, as applicable, shall be in Dollars unless otherwise agreed by OPIC in its sole discretion.

			

 

 

Schedule 6.03 - Annex A - 4

 

 

 

SCHEDULE 6.05(d)

 

Form of Operating Report1

 

Report Date: [_____]

 

Subject: Operating report for the period between DD/MM/20XX and DD/MM/20XX

 

Operating Report

 

	
			1

				
			Generation Summary

			

 

	
			Item

				
			For the period

				
			YTD 20XX

			
	
			Net Energy Sales (MWh)

				 	 
	
			Avg. Daily Generation

			(MW)

				 	 
	
			Availability (%)

				 	 

 

 

	
			OEC

				
			Operational 

			Hours during 

			Period

				
			Periodical 

			MWh 

			Generation (Gross)

				
			Periodical 

			MW 

			(Gross)

				
			YTD hr

				
			YTD MWh 

			(Gross)

				
			YTD MW 

			(Gross)

			
	
			OEC-1

				 	 	 	 	 	 
	
			OEC-2

				 	 	 	 	 	 
	
			Total

				 	 	 	 	 	 

 

Summary of Power Generation:

 

	
			Indicator

				
			Units

				
			During Reporting Period

				
			Accumulated during Calendar Year

			
	
			Power Plant Gross Generation

			Aux. Load

			Net Energy Sales

				
			MWh

				 	 
	
			Average Power Delivered

				
			MW

				 	 
	
			Average Power corrected by ambient temperature

				
			MW

				 	 
	
			Capacity Factor 35 MW net

			Equivalent Availability Factor all OECs

				
			%

				 	 
	
			Average Ambient Temperature

				
			°C

				 	 

 

1 To be provided semi-annually, beginning on the first to occur of June 30 or December 31. Operating Reports to be provided within 30 days of the end of the semi-annual reporting periods ending on June 30 and December 31.

 

 

Schedule 6.05(d) - 1

 

 

 

	
			2

				
			Maintenance Summary

			

 

	
			2.1

				
			OEC down time.

			

 

Definition: OEC is not available if it is stopped for preventive or corrective maintenance.

 

	 	
			●

				
			Maintenance Hours:

			

 

	
			Preventive – ______ hrs. down time registered

			
	 
	
			Corrective – ______ hrs. down time registered

			

 

 

 

	
			2.2

				
			Corrective Maintenance

			

 

	
			 

				
			 

				
			Corrective Maintenance 

				
			Total

				
			Down

			
	 	Date	Events	 	
			Time

			
	
			 

				
			[____]

				
			[____]

				
			 

				
			 

			
	[BOP]2	
			[____]

				
			[____]

				 	
			 

			
	 	
			[____]

				
			[____]

				 	
			 

			
	 	
			[____]

				
			[____]

				 	
			 

			
	
			 

				
			[____]

				
			[____]

				
			 

				
			 

			
	OEC 1	
			[____]

				
			[____]

				 	
			 

			
	 	
			[____]

				
			[____]

				 	
			 

			
	 	
			[____]

				
			[____]

				 	
			 

			
	
			 

				
			[____]

				
			[____]

				
			 

				
			 

			
	 	
			[____]

				
			[____]

				 	
			 

			
	OEC 2	
			[____]

				
			[____]

				 	
			 

			
	 	
			[____]

				
			[____]

				 	
			 

			
	 	
			[____]

				
			[____]

				 	
			 

			
	
			Total

				
			 

				
			 

				
			 

				
			 

			

 

 

	
			2.3

				
			Maintenance Activities/Events Summary:

			

 

Plant Switchyard and Power Grid:

	 	
			●

				
			[Confirm monthly and weekly preventive maintenance done as per schedule.]

			

	 	
			●

				
			[Describe planned and unplanned maintenance outages.]

			

	 	
			●

				
			[Describe annual maintenance outages.]

			

 

 

2 Include reporting on corrective maintenance that results in substantial downtime.

 

 

Schedule 6.05(d) - 2

 

 

 

Balance of Plant:

	 	
			●

				
			[Confirm monthly and weekly preventive maintenance done as per schedule.]

			

	 	
			●

				
			[Describe planned and unplanned maintenance outages.]

			

	 	
			●

				
			[Describe annual maintenance outages.]

			

 

Well field and Gathering System:

	 	
			●

				
			[Confirm monthly and weekly preventive maintenance done as per schedule.]

			

	 	
			●

				
			[Describe planned and unplanned maintenance outages.]

			

	 	
			●

				
			[Describe annual maintenance outages.]

			

 

OEC Units:

	 	
			●

				
			[Confirm monthly and weekly preventive maintenance done as per schedule.]

			

	 	
			●

				
			[Describe planned and unplanned maintenance outages.]

			

	 	
			●

				
			[Describe annual maintenance outages.]

			

 

 

	
			3

				
			Environmental Compliance Status

			

 

 

[Reporting guidance: Please include results of monthly H2S monitoring program as a report attachment]

 

 

	
			4

				
			Power Plant Safety Monthly Status

			

 

	
			Event

				
			Date

			
	
			Last Safety and Health Committee Training

				
			[_____]

			
	
			Last Safety and Health Committee Meeting

				
			[_____]

			
	
			Last Basic Occupational Safety and Health Training

				
			[_____]

			
	
			Last Safety and Health meeting held (all)

				
			[_____]

			
	
			Last Annual Fire Fighting Course

				
			[_____]

			
	
			Last CPR and First Aid course

				
			[_____]

			
	
			Last Safety Emergency Response Plan Review

				
			[_____]

			
	
			Last Occupational Accident/Incident Committee Training

				
			[_____]

			

 

 

Schedule 6.05(d) - 3

 

 

 

Health and Safety Report

(The total lost time work hours logged during the specified reporting period should be reported to the appropriate regulatory agency.)

 

	
			Non-Fatal Injures

				
			Jan

				
			Feb

				
			Mar

				
			Apr

				
			May

				
			Jun

				
			Jul

				
			Aug

				
			Sep

				
			Oct

				
			Nov

				
			Dec

				
			Year-To-Date

			
	
			Number of Injuries3

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time less than one day

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time up to 3 days4

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time more than 3 days5

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Total Number of Injuries

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Time Lost (number of whole days)

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time up to 3 days

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time more than 3 days

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Total Time Lost (days)

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			

 

 

	
			Occupational Illness

				
			Jan

				
			Feb

				
			Mar

				
			Apr

				
			May

				
			Jun

				
			Jul

				
			Aug

				
			Sep

				
			Oct

				
			Nov

				
			Dec

				
			Year-To-Date

			
	
			Number of Positive Diagnoses6

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time less than one day

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time up to 3 days7

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time more than 3 days8

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Total Number of Positive Diagnoses

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Time Lost (number of whole days)

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time up to 3 days

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Lost time more than 3 days

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Total Time Lost (days)

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			

 

3  Recorded on the day of the incident.

4  The day on which an incident occurs is not included in the total

5  The day on which an incident occurs is not included in the total

6  Recorded on the day of the positive diagnosis.

7  The day on which an incident occurs is not included in the total.

8  The day on which an incident occurs is not included in the total.

 

 

Schedule 6.05(d) - 4

 

 

 

	Non-Fatal Injures	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Year-to-Date

 

 

	
			Fatalities

				
			Jan

				
			Feb

				
			Mar

				
			Apr

				
			May

				
			Jun

				
			Jul

				
			Aug

				
			Sep

				
			Oct

				
			Nov

				
			Dec

				
			Year-To-Date

			
	
			Number of Fatalities9

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Immediate

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Within a Month of Injury

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Within a Year of Injury

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Total Number of Fatalities

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			

 

 

 

	
			ENEE PPA Demonstrated Capacity (MW)

				
			[_____]

			
	
			Date of Last Demonstrated Capacity Test

				
			[_____]

			

 

[Reporting guidance: Please provide spreadsheet file that’s the basis for the tabulated monthly report data below along with the semiannual report .pdf file]

 

	 	
			Jan

				
			Feb

				
			Mar

				
			Apr

				
			May

				
			Jun

				
			Jul

				
			Aug

				
			Sep

				
			Oct

				
			Nov

				
			Dec

				
			YTD

			
	
			OEC 1

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

				
			 

			
	
			Operating Hours

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Gross Generation (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Net Generation (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
			OEC 2

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Operating Hours

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Gross Generation (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Net Generation (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 

 

9  Recorded at time of death.

 

 

Schedule 6.05(d) - 5

 

 

 

	 	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	YTD
	
			Plant

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Gross Generation (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Auxiliary Use (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Energy Sales (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Scheduled / Preventive Maintenance (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Unscheduled / Corrective Maintenance (MWh)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Maximum Load (MW)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Minimum Load (MW)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Average Load (MW)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Period Hours

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Operating Hours

				 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Total Brine Usage (Tonnes)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Average Brine Temperature

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Average Brine Pressure (bar g)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Injection

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Total Injected (Tonnes)

				 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Average Injection Temperature

				 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
			Average Ambient Temperature

				 	 	 	 	 	 	 	 	 	 	 	 	 

 

	
			5

				
			Comparison Between Operating Budget and Actual Financial Performance

			

 

 

Schedule 6.05(d) - 6

 

 

 

	 	
			Actual10

				
			Budget11

			
	 	
			1st Qtr

				
			2nd Qtr

				
			3rd Qtr

				
			4th Qtr

				
			Total

				
			Total

			
	
			1. Salaries, G&A, etc.

				 	 	 	 	 	 
	
			1.1 Salaries (fixed monthly portion)

				 	 	 	 	 	 
	
			1.2 Salaries (Other)

				 	 	 	 	 	 
	
			1.3 Site G&A

				 	 	 	 	 	 
	
			1.4 Property Insurance

				 	 	 	 	 	 
	
			1.5 Owner G&A

				 	 	 	 	 	 
	
			1.6 Housing

				 	 	 	 	 	 
	
			1.7 Safety

				 	 	 	 	 	 
	
			1.8 Other / Misc.

				 	 	 	 	 	 
	 	 	 	 	 	 	 
	
			Total Fixed Costs Budget

				 	 	 	 	 	 
	
			2. Spare Parts, Consumables, etc.

				 	 	 	 	 	 
	
			2.1 Spare parts, repairs and consumables

				 	 	 	 	 	 
	
			2.2 Other / Misc.

				 	 	 	 	 	 
	
			Total Variable Costs Budget

				 	 	 	 	 	 
	
			3. Wellfield Maintenance / Capex (excluding draw on reserves)

				 	 	 	 	 	 
	
			3.1 Well Maintenance and Workovers

				 	 	 	 	 	 
	
			3.2 Well Pumping System Maintenance

				 	 	 	 	 	 
	
			3.3 CapEx

				 	 	 	 	 	 
	
			3.4 Misc.

				 	 	 	 	 	 
	
			Total Wellfield Maintenance / Capex Budget 

				 	 	 	 	 	 
	
			4. O&M Contingencies & misc. 

				 	 	 	 	 	 
	
			4.1 O&M Contingencies & misc.

				 	 	 	 	 	 
	
			5. Corporate Income Taxes

				 	 	 	 	 	 
	
			5.1 Cash corporate income taxes

				 	 	 	 	 	 
	
			6. TOTAL 

				 	 	 	 	 	 

 

	
			Generation and Revenue

				
			1st Qtr

				
			2nd Qtr

				
			3rd Qtr

				
			4th Qtr

				
			YTD

			
	
			Projected Net Generation (MWh)

				 	 	 	 	 
	
			Actual Net Generation (MWh)

				 	 	 	 	 
	
			Budgeted Revenue (M$)

				 	 	 	 	 
	
			Invoiced Amounts (M$)

				 	 	 	 	 

 

10  Sums are in thousand dollars.

11  Sums are in thousand dollars.

 

 

SCHEDULE 6.05(d) - 7

 

 

 

SCHEDULE 6.06

 

Form of Annual Operating Budget

 

	From: January 1st [____]	To: December 31st [____]	 

                 

 

	 	 
	 	 
	
			(In US$ thousands)

				
			[____] OPERATING BUDGET

			
	 	 	 
	
			 

				
			Annual

				
			Comments

			
	
			1. Salaries, G&A, etc.

				
			 

				
			 

			
	
			1.1 Salaries (Fixed Monthly Portion)

				
			$ [____]

				
			              1/12 per month

			
	
			1.2 Site G&A

				
			$ [____]

				 
	
			1.3 Insurance

				
			$ [____]

				
			              1/12 per month

			
	
			1.4 Owner G&A

				
			$ [____]

				 
	
			1.5 Safety

				
			$ [____]

				 
	
			1.6 O&M Support

				
			$ [____] 12

				 
	
			Total Fixed Costs Budget

				
			$ [____] 

				
			 

			
	
			 

				
			 

				 
	
			2. Maintenance, Spare Parts, etc.

				
			 

				
			 

			
	
			2.1 Spare Parts

				
			$ [____]

				 
	
			2.2 Other / Misc.

				
			$ [____] 

				 
	
			Total Variable Costs Budget

				
			$ 

				
			 

			
	
			 

				
			 

				 
	
			3. Wellfield Maintenance

				
			(exc, draw on reserves)

			
	
			3.1 Wellfield maintenance

				
			$ [____]

				 
	
			3.2 Misc.(*)

				
			$ [____]

				 
	
			Total Wellfield Maintenance / Capex

				
			$ [____] 

				
			 

			
	
			 

				
			 

				 
	
			4. O&M Contingencies & misc.

				
			 

				
			 

			
	
			4.1 O&M Contingencies & misc.

				
			$ [____] 

				
			 

			
	
			5. Income Taxes

				
			 

				
			 

			
	
			5.1 Income Taxes

				
			$ [____]

				 
	
			 

				 	
			 

			
	
			6. TOTAL OPERATING BUDGET FOR PERIOD(**), (***)

				
			$ [____] 

				
			 

			
	
			 

				 	 
	
			 

				 	 
	
			The Annual Operating Budget above is not evenly spread across the months within the year, with the exception of the items which are commented with “1/12 per month”.

			 

			(*) If miscellaneous amount exceeds twenty percent (20%) of total Wellfield Maintenance / Capex Amount, such costs should be further broken-down by category.

			 

			(**) Excluding: deposits to reserve accounts, political risk insurance premiums, all royalty charges on revenue to Elcosa, interest on debitory accounts (if any), VAT and hedging costs (if any).

			 

			(***) Including: maintenance fee payable to OPIC.

			

 

12  Not to exceed in the aggregate $400,000 on an annual basis.

 

 

Schedule 6.06 - 1

 

 

 

SCHEDULE 6.12

 

Worker Rights Action Plan

 

	
			No.

				
			Action

				
			Due Date

			
	
			1

				
			Labor Management System

				 
	
			1.1

				
			The Project shall develop and implement human resource policies appropriate to its workforce consistent with IFC Performance Standard 2 and local labor law.

			 

				
			Prior to first disbursement

			
	
			1.2

				
			The Project shall submit to OPIC evidence of how terms and conditions of work, including wages, hours of work and overtime, benefits entitlements, and access to the employee grievance mechanism are communicated to all workers during the construction phase.

			 

				 
	
			1.3

				
			The Project shall develop and submit to OPIC procedures for monitoring working conditions, including contractor working conditions, at the Site.

			 

				 
	
			1.4

				
			The Borrower shall develop and submit to OPIC evidence of organizational capacity to manage and monitor working conditions at the Site.

			 

				 
	
			2

				
			Security Risk Assessment and Management

				 
	
			2.1

				
			The Project shall submit a Security Management Plan consistent with the IFC Performance Standard 4.

			 

			Documentation should be submitted electronically to labor@opic.gov or in hard copy to:

			Director, Labor and Human Rights Group

			Overseas Private Investment Corporation

			1100 New York Avenue, N.W.

			Washington, D.C. 20527

				 

 

 

Schedule 6.12 - 1

 

 

 

SCHEDULE 7.01

 

Liens

 

None.

 

 

Schedule 7.01 - 1

 

 

 

SCHEDULE 7.02

 

Indebtedness

 

None.

 

 

Schedule 7.02 - 1

 

 

 

SCHEDULE 7.07

 

Leases

 

 

	
			Lessor

				
			Purpose

				
			Amount of Purchase 

			Orders Issued as of 

			October 4, 2017

				
			Amount of Purchase

			Orders expected to be

			issued 

			
	
			La Union Municipality

				
			Area for construction of plant components.

				
			HNL 90,000 per annum indexed at 2% following the second operation year.

				
			No additional amounts are expected

			

 

 

Schedule 7.07 - 1

 

 

 

Schedule 8.03

 

 

Arbitration Provisions

 

 

The provisions of this Schedule 8.03 shall apply to any arbitration under Section 8.03 of this Agreement.

 

1.            Place of Arbitration; Language.

 

	 	
			(a)

				
			The seat of the arbitration shall be The City of New York, New York, U.S.A.

			

 

	 	
			(b)

				
			The language of the arbitration shall be English. All hearings shall be conducted in English, all awards and orders shall be issued in English, and all communications, pleadings and documentary evidence shall be presented in English. If any documents are not in English, the offering Arbitration Party shall provide English translations thereof at its own expense.

			

 

2.            Arbitral Tribunal.

 

	 	
			(a)

				
			Number of Arbitrators

			

 

The Arbitral Tribunal shall consist of three arbitrators appointed in accordance with Section 2(b) of this Schedule 8.03, unless, within twenty (20) days after the receipt by the respondent of the notice of arbitration, the Arbitration Parties shall have agreed that the Arbitral Tribunal consist of only one arbitrator, and shall have agreed on the identity of such arbitrator.

 

	 	
			(b)

				
			Appointment of Arbitral Tribunal – Three Arbitrators

			

 

	 	
			(i)

				
			If the Arbitral Tribunal is to consist of three arbitrators, each Arbitration Party shall nominate one arbitrator. The claimant shall nominate an arbitrator at the same time as serving the notice of arbitration. The respondent shall nominate an arbitrator within twenty (20) days of receipt of notice of the claimant’s nomination. If either Arbitration Party fails to nominate an arbitrator within such time limits, the other Arbitration Party may request that the International Centre for Dispute Resolution (the “Administrator”) appoint the second arbitrator. The Administrator shall promptly make such appointment, and may exercise its discretion (subject to Section 2(c) hereof) in making such appointment. The two arbitrators thus appointed shall choose the third arbitrator who will act as the presiding arbitrator of the Arbitral Tribunal.

			

 

	 	
			(ii)

				
			If within twenty (20) days after the appointment of the second arbitrator the two arbitrators have not agreed on the choice of the presiding arbitrator, the Administrator shall promptly appoint the presiding arbitrator using the following list-procedure, unless (x) all Arbitration Parties agree that the list-procedure should not be used or (y) the Administrator determines in its discretion that the use of the list-procedure is not appropriate for the case:

			

 

 

Schedule 8.03 - 1

 

 

 

(A)     At the request of one of the Arbitration Parties the Administrator shall communicate to the Arbitration Parties an identical list containing at least three names;

 

(B)     Within ten (10) days after the receipt of this list, each Arbitration Party may return the list to the Administrator after having deleted the name or names to which it objects and numbered the remaining names on the list in the order of its preference;

 

(C)     After the expiration of the above period of time, the Administrator shall promptly appoint the presiding arbitrator from among the names approved on the lists returned to it and in accordance with the order of preference indicated by the Arbitration Parties; provided, however, that if no approved names remain on the lists returned to it, the Administrator shall promptly appoint the presiding arbitrator in accordance with the Rules.

 

(D)     In making the appointment, the Administrator shall have regard to such considerations as are likely to secure the appointment of an independent and impartial arbitrator.

 

	 	
			(c)

				
			Qualifications.

			

 

Each arbitrator, in addition to meeting the qualification requirements of the Rules, (i) shall be fluent in the English language, and (ii) shall be an attorney admitted to the bar of the State of New York, U.S.A., with experience in international investment and finance.

 

3.           Expedited Proceedings

 

Unless the Arbitration Parties agree otherwise, the Arbitral Tribunal shall issue its final award within nine (9) months from the date that the Arbitral Tribunal is constituted. Any time limit set by the Rules, the Administrator or the Arbitral Tribunal shall be extended only for extraordinary reasons (as determined in the sole discretion of the Arbitral Tribunal), unless otherwise agreed by the Arbitration Parties.

 

4.            Consolidation

 

An Arbitral Tribunal shall have the power, at the request of an Arbitration Party, to consolidate any two or more arbitrations commenced pursuant to Section 8.03 hereof; provided, however, that no such consolidation shall be ordered unless (i) the time limits referred to in Section 3 of this Schedule 8.03 can be complied with notwithstanding such consolidation, and (ii) the Arbitration Parties in the consolidated arbitration confirm the appointment of the Arbitral Tribunal.

 

 

Schedule 8.03 - 2

 

 

 

EXHIBIT A-1

 

Form of NEW YORK LAW Promissory Note

 

For Fixed Rate Notes please follow the form set forth in Exhibit A-1 of the OPIC Funding Agreement. For Weekly Rate Notes, if any, please follow the form set forth in Exhibit A-2 of the OPIC Funding Agreement.

 

 

Exhibit A-1 - 1

 

 

 

EXHIBIT A-2

 

Form of HONDURAN LAW PAGARÉ

 

 

 

	
			ON DEMAND PROMISSORY NOTE FOR

			U.S.$ [________]

			I, [Insert name of signatory] in my capacity as legal representative of GEOTÉRMICA PLATANARES, S.A. DE C.V. (hereinafter the “Borrower”), by this PROMISSORY NOTE hereby promise to pay unconditionally, in name and representation of the Borrower, to the order of OVERSEAS PRIVATE INVESTMENT CORPORATION, an agency of the United States of America in [Insert place and account number where the payments shall be made], ON DEMAND and NOT REQUIRED TO BE PROTESTED IN CASE OF NON PAYMENT in Dollars of the United States of America, the sum of [Insert amount of the Pagaré], plus interest at an annual rate, equal to the sum of (i) [Certificate Interest Rate]13 plus (ii) three point five percent (3.50%) per annum (“Interest Rate”); such Interest Rate to be paid quarterly. If this Promissory Note is not paid in full upon presentation, the Borrower hereby agrees to pay a default interest rate equal to two percent (2%) per annum (“Default Interest Rate”) in addition to the Interest Rate from the date the amount owed was due and not paid until the date such amount is paid in full; this shall not be considered as an extension or respite for the fulfilment of this obligation. For purposes of Article 536 of the Commerce Code, the presentation term is hereby extended to [insert term equal to one year beyond the loan repayment schedule) i.e.: 16 years)] from the date hereof.-

			In witness of, I hereby sign in [Insert place] this [Insert date] (__) of [Month] of the year two thousand [Year] (20__).

			 

			 

			_______________________________________

			GEOTÉRMICA PLATANARES, S.A. DE C.V.

			By:

			Title:

				
			PAGARÉ A LA VISTA POR

			U.S.$ [________]

			Yo, [Insertar nombre representante], actuando en mi condición de representante legal de la Sociedad  GEOTÉRMICA PLATANARES, S.A. DE C.V. (en adelante la “Deudora”), por medio del presente PAGARÉ, prometo pagar incondicionalmente, en nombre y representación de la Deudora, a la orden de OVERSEAS PRIVATE INVESTMENT CORPORATION, una agencia de los Estados Unidos de América en [Insertar lugar y cuenta de banco en la cual se debe hacer el pago], A LA VISTA Y SIN PROTESTO, y en Dólares de los Estados Unidos de América, la suma de [Insertar monto del Pagaré], más intereses a una tasa anual equivalente a la suma de: (i) [Certificate Interest Rate] más (ii) tres punto cinco por ciento (3.50%) anual (la “Tasa de Interés”) pagaderos estos intereses trimestralmente. Si este Pagaré no fuere pagado totalmente a su presentación, la Deudora se obliga a pagar durante todo el tiempo que permanezca total o parcialmente insoluto, un interés moratorio equivalente a dos por ciento (2%) anual (“Interés Moratorio”) adicional a la Tasa de Interés desde la fecha en que el pago debió realizarse y no fue realizado y hasta la fecha en que la cantidad adeudada sea pagada en su totalidad, sin que por esto se considere que haya prórroga, quita o espera para el cumplimiento de esta obligación. Para los efectos de lo dispuesto en el Artículo 536 del Código de Comercio, queda ampliado el plazo de su presentación a [Insertar plazo total del préstamo más un año, ej: 16 años] contados a partir de la presente fecha.

			En fe de lo cual firmo en [Insertar lugar de emisión] a los [Insertar fecha] (_____) días del mes de [mes] del año dos mil [___] (20__).

			 

			______________________________________

			GEOTÉRMICA PLATANARES, S.A. DE C.V.

			Nombre:

			Cargo:

			

 

 

13 Certificate Interest Rate to be determined.

 

Exhibit A-2 - 1

 

 

 

EXHIBIT A-3

 

Form of AUTHORIZATION TO COMPLETE

 

[__] de [__________] de 2018

 

[    ]

[    ]

[    ]

 

 

Asunto: Autorización relacionada a Pagaré emitido en relación a financiamiento a favor de GEOTÉRMICA PLATANARES, S.A. DE C.V.

 

Estimados Señores:

 

Hacemos referencia al: (i) contrato denominado en idioma inglés como “Finance Agreement” y que en idioma español se traduce a Contrato de Crédito celebrado en fecha [____] de 2018 entre OVERSEAS PRIVATE INVESTMENT CORPORATION y GEOTÉRMICA PLATANARES, S.A. DE C.V.; y (ii) Pagaré por la suma de US$ [ ] suscrito por GEOTÉRMICA PLATANARES, S.A. DE C.V. a favor de OVERSEAS PRIVATE INVESTMENT CORPORATION (dicho pagaré relacionado como el “PAGARÉ”).

 

En relación a lo anterior, GEOTÉRMICA PLATANARES, S.A. DE C.V., manifiesta lo siguiente:

 

I. Que GEOTÉRMICA PLATANARES, S.A. DE C.V., por medio de la presente autoriza e instruye de manera irrevocable a:

 

OVERSEAS PRIVATE INVESTMENT CORPORATION por sí, y/o cualquiera de sus representantes y/o agentes debidamente autorizados completen y/o satisfagan a su libre discreción la información relativa a la fecha de pago en el PAGARÉ en caso de emitir OVERSEAS PRIVATE INVESTMENT CORPORATION de conformidad al Contrato de Crédito, una notificación de que ha ocurrido un Evento de Incumplimiento, en idioma inglés “Event of Default”, bajo el Contrato de Crédito.

 

II. Que GEOTÉRMICA PLATANARES, S.A. DE C.V., tendrá, a partir del momento en que se realicen, por bien hechas todas las acciones tomadas por OVERSEAS PRIVATE INVESTMENT CORPORATION y/o cualquiera de sus representantes debidamente autorizados cuando dichas acciones se hayan tomado en base a la autorización e instrucción conferida bajo el presente documento; y como consecuencia de ello, GEOTÉRMICA PLATANARES, S.A. DE C.V., libre y expresamente renuncian de manera irrevocable a entablar acciones y/u oponer excepciones judiciales o extrajudiciales en contra de cualquiera de estos, derivadas de cualquier controversia o conflicto relacionado directa o indirectamente con esta autorización e instrucción irrevocable, ya sea de su naturaleza, interpretación, cumplimiento, ejecución o terminación de la misma, pues reconocen que todo lo aquí pactado resguarda los intereses de OVERSEAS PRIVATE INVESTMENT CORPORATION en el Crédito que conferirá a GEOTÉRMICA PLATANARES, S.A. DE C.V.

 

 

Emitida el día de hoy ___ de [__________] en la ciudad de San Pedro Sula, Cortés, República de Honduras.

 

 

 

 

GEOTÉRMICA PLATANARES, S.A. DE C.V.

Firma:     ________________________________

 

 

RECIBIDO Y ACEPTADO:

 

 

Firma:     ________________________________

 

 

 

Exhibit A-3 - 1

 

 

 

EXHIBIT B

 

Form of DISBURSEMENT REQUEST

 

 

[ON BORROWER LETTERHEAD]

 

 

[____], 20[__]

 

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527

United States of America

 

Attention:     Vice President for Structured Finance and Insurance

And attn:      Managing Director, Portfolio Management Division

 

Disbursement Request

 

Dear Sir or Madam:

 

Reference is made to the Finance Agreement (OPIC No. 9000003553) dated as of [___], 2018 (the “Agreement”) between Geotérmica Platanares, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Honduras (the “Borrower”), and Overseas Private Investment Corporation (“OPIC”). All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Agreement.

 

Pursuant to Section 5.01 of the Agreement, notice is hereby given that the undersigned requests a Disbursement as follows:

 

	 	
			1.

				
			Amount of Disbursement: $[_____]

			

 

	 	
			2.

				
			Closing Date: [__________]’14

			

 

	 	
			3.

				
			D-U-N-S® Number: [__________]

			

 

	 	
			4.

				
			The Borrower does not have a U.S. Taxpayer Identification Number because it is not a U.S. entity and does not conduct any business or activities in the U.S.

			

 

14 Not less than 20 Business Days from the date OPIC receives this Disbursement Request. Please note that OPIC’s ability to make disbursements will be limited and subject to mutual agreement of an acceptable Closing Date at certain times during the year, including approximately the last two weeks of September and December (the limitation in December usually only applies to investment guaranties and not direct loans).

 

 

Exhibit B-1

 

 

 

A.          PROCEEDS AND ADDITIONAL INFORMATION

 

I, [__________], the [_____]15 of the Borrower, DO HEREBY CERTIFY that:

 

	 	
			1.

				
			Attached hereto as Annex 1 is a schedule setting forth the Project Costs to which the present Disbursement:

			

 

	 	
			a.

				
			[will be applied, for which the proceeds of this Disbursement are presently needed or will be needed in the ninety (90) days following the Closing Date, including each [written contract][confirmed purchase order][invoice] for such costs, indicating the amount payable, due date, and services performed or to be performed and/or goods delivered or to be delivered (as applicable);

			

 

[and/or]]

 

	 	
			b.

				
			has been applied and for which the Borrower seeks reimbursement (to the extent such costs exceed required equity contributions) through the proceeds of this Disbursement, including each [written contract][confirmed purchase order][invoices] [audited financial statements] for such costs, indicating the amount paid and services performed and/or goods delivered, and evidence of such payment in the form of [wire transfers][delivery receipt][customs declaration][copies of cancelled checks or cashier’s checks];

			

 

in each case, with respect to any Project Costs set forth in Annex 1 that will be paid to any Affiliate of the Borrower or any of the Ormat Parties, together with evidence in the form of [auditor’s confirmation and supporting general ledger][confirmed purchase order][invoice]. The payment of such Project Costs will not constitute a Restricted Payment, and, following payment to any such Affiliate, the Borrower will owe no Indebtedness to such Affiliate, except for Indebtedness subordinated to OPIC pursuant to the Ormat Parties Subordination Agreement or as shall be otherwise satisfactory to OPIC in its sole discretion.

 

	 	
			2.

				
			Attached hereto as Annex 2 is the schedule of wire transfer instructions for transfer of the proceeds of the Disbursement.

			

 

	 	
			3.

				
			[Attached hereto as Annex 3 is a schedule setting forth the Project Costs to which the prior Disbursements have been applied, including each [written contract][confirmed purchase order][invoice][audited financial statement] for such costs, indicating the amount paid, payment date, services performed and/or goods delivered, and evidence of such payment in the form of [wire transfers][delivery receipt][customs declaration][copies of cancelled checks or cashier’s checks];]16

			

 

	 	
			4.

				
			Attached hereto as Annex 4 is a schedule setting forth the mandatory prepayment events (as set forth in Section 2.05 of the Agreement) that have occurred or continue to occur as of the date hereof.

			

 

	 	
			5.

				
			[Attached hereto as Annex 5 is evidence that the special committee appointed for the purpose of Congressional Approval of the La Bufa Lease by the National Congress of Honduras has recommended the La Bufa Land Lease Agreement for approval. The Borrower has not been notified of any objections to such approval by the National Congress of Honduras.]17

			

 

15 Title of Authorized Officer.

16 Not applicable to first Disbursement.

 

 

Exhibit B-2

 

 

 

B.           CONDITIONS PRECEDENT SATISFIED

 

	 	
			1.

				
			As of the date that is ten (10) days prior to the Closing Date, each of the conditions set forth in [Articles IV and V]18 [Article V]19 will be satisfied.

			

 

	 	
			2.

				
			[Without limiting the foregoing and for purposes of confirming to OPIC the satisfaction of certain of the conditions set forth or referenced in Section 4.13 of the Agreement, I hereby certify that:

			

 

	 	
			a.

				
			The representations and warranties of the Borrower set forth in Section 3.01(l), of the Agreement are true and correct in all respects.

			

 

	 	
			b.

				
			All Works related to the Project have been carried out in a manner consistent with International Finance Corporation’s Performance Standards 1, 3, 4, 5, 6 and 8 (January 1, 2012).20 

			

 

	 	
			c.

				
			All Works related to the Project have been carried out in a manner consistent with International Finance Corporation’s Performance Standard 2 (January 1, 2012) [except for the deviations and/or resolutions listed in Annex [___] hereto.]21

			

 

	 	
			d.

				
			All Works necessary for safe and sustained commercial operations have been completed in accordance with the Project Documents and paid for on commercially reasonable terms except for any Works remaining to be completed as set forth in Schedule 4.13(b)(ii) of the Agreement. Sufficient funds have been held in reserve by the Borrower to pay for such Works, if any, remaining to be completed.22

			

 

	 	
			e.

				
			The Borrower has caused to be submitted any and all notices to Governmental Authorities that are required by Applicable Law in Honduras regarding community and stakeholder engagement, archeological finds, environmental matters, or matters of health, safety or security.

			

 

	 	
			f.

				
			There have not been any security incidents, displacements of persons or chance archeological finds associated with the Project.

			

 

	 	
			g.

				
			The Borrower and its contractors have taken commercially reasonable measures to address the risks identified in the Social Risk Assessment of Platanares Geothermal Project conducted by Social Capital Group in October 2016.

			

 

	 	
			h.

				
			The Borrower has developed and maintained the geothermal resource, the wells and the surface facilities in accordance with the ENEE PPA, the Agreement and Good Industry Practice.]

			

 

 

17 Only applicable for first Disbursement.

18 Only applicable for first Disbursement.

19 Only applicable for subsequent Disbursements.

20 Include in certificate only for first Disbursement.

21 Include in certificate only for first Disbursement.

22 Include in certificate for first Disbursement.

 

 

Exhibit B-3

 

 

 

	
			3.

				
			[Pursuant to Section [6.05(f)] of the Agreement, I hereby certify that the Borrower has completed the noise assessment referenced in Section 3.1 of the ESAP and is in compliance with the noise standards contained within IFC 2007 Environmental, Health, and Safety General Guidelines].23

			

 

 

[Signature page follows]

 

 

 

23 Include in certificate for final Disbursement, to occur after noise assessment date and on or about the date the True-Up Confirmation is provided.

 

 

Exhibit B-4

 

 

 

C.     AUTHORIZED OFFICER’S CERTIFICATION

 

I am an Authorized Officer of the Borrower and have the power to bind the Borrower herein and affirm that I am authorized to make the above certifications on behalf of the Borrower.

 

 

	 	Very truly yours,	 
	 	 	 
	 	GEOTÉRMICA PLATANARES, S.A. DE C.V.	 
	 	 	 
	 	By: _____________________________________	 
	 	 	 
	 	Name: __________________________________	 
	 	 	 
	 	Its: _____________________________________	 

 

 

Exhibit B-5

 

 

 

Annex 1 to

Disbursement Request

 

Project Costs

 

1.      The present Disbursement will be applied to the following Project Costs to be incurred:

 

A.          [      ]

B.          [      ]

C.          [      ]

 

2.      The Project Costs referred to in item (1) above are evidenced by one of the following, in accordance with Accounting Standards, copies of which are attached:

 

For Goods: Supplier’s invoice, bill of lading, purchase orders or customs declaration. ‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬

For Services other than those covered by the Warranty Agreement: Service provider’s claim, purchase order or invoice‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬.

For Services covered by the Warranty Agreement: Claim, invoice or purchase order from contractor‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬.

3.      The present Disbursement will be applied to the following Project Costs which have already been incurred:

 

A.          [      ]

B.          [      ]

C.          [      ]

 

4.      The Project Costs referred to in item (3) are evidenced by one of the following, in accordance with Accounting Standards:

 

Third-party independent audit opinion: From a firm previously approved by OPIC, opining as to scheduled capital and operating expenditures‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬.

Independent audited Financial Statements: For expenditures from a prior Fiscal Year, if such audit provides sufficient detail as to the specific capital and operating expenditures which to be reimbursed by the Disbursement‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬.

Other: each [written contract][confirmed purchase order][customs declaration][other evidence] for such costs, indicating the amount payable, due date, and services performed or goods delivered; together with copies of such [written contract][confirmed purchase order][customs declaration][other evidence]‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬.

 

 

Exhibit B - Annex 1 - 1

 

 

 

Annex 2 to 

Disbursement Request

 

Wire Transfer Instructions for Direct Loans

 

Please complete one funds transfer box for each transfer requested for this Disbursement. If more than one funds transfer is requested, please copy the relevant table below and add a new “Funds Transfer #[__]” below Funds Transfer # 1. In addition, add or delete sections from the table as needed (for example, if only one wire transfer to a U.S. account is requested, please fill out the U.S. account table and delete the foreign account table under Funds Transfer # 1). Please ensure that the total of all transfers adds up to the total Disbursement amount.

 

	
			1.

				
			If the ultimate recipient account is in the United States, there are two potential transfer mechanisms:

			

	 	
			●

				
			For transfer amounts < $100,000, Automated Clearing House (“ACH”) transfers are used.

			

	 	
			●

				
			For transfer amounts ≥ $100,000, regular wire transfers are used.

			

 

Please be aware that some U.S. banks have a different 9-digit ABA number for ACH transfers vs. regular wire transfers.

 

	
			2.

				
			If the ultimate recipient account is outside the United States, there are two potential transfer mechanisms:

			

	 	
			●

				
			OPIC prefers to use the U.S. Treasury Department’s International Treasury Services (“ITS”) system to send funds directly to foreign recipient accounts. Countries where ITS transfers may be sent are listed at the following URL: http://www.fms.treas.gov/itsgov/destvendor.html

			

	 	
			●

				
			If the recipient’s bank account is in a jurisdiction where the ITS system is not available, then the recipient will need to provide OPIC with the information needed to enable OPIC to send the funds to the recipient’s bank through a U.S. correspondent bank. If this is the case, please ask your OPIC contact for the Non-ITS Wire Transfer Instruction Template.

			

 

	 	
			A.

				
			Funds Transfer # 1:

			

 

	
			 

			If the ultimate recipient account is in the U.S., please complete the following table:

			 

			
	
			Transfer Information

				
			Amount of Transfer

			
	
			Payee Name:

				
			$[________]

			
	
			Payee U.S. Tax ID # (if applicable):

				 
	
			Bank Name:

				 
	
			Bank ABA Routing #: [Bank ABA Routing # for ACH payments]24 [Bank ABA Routing # for wires]25 

				 
	
			Payee’s Account #:

				 
	
			Account Name (if different from Payee Name):

				 
	
			Reference Info (optional):

				 

 

24 Use if transfer is less than $100,000.

25 Use if transfer is greater than or equal to $100,000.

 

 

Exhibit B - Annex 2 - 1

 

 

 

	
			 

			If the ultimate recipient account is not in the U.S., please complete the following table:

			 

			
	
			Transfer Information 

				
			Amount of Transfer

			
	
			Payee Name:

				
			$[__________]

			
	
			Payee U.S. Tax ID # (if applicable):

				(any amount may be sent this way)
	
			Payee’s Account #:

				 
	
			Bank SWIFT Code:

				 
	
			Bank Name:

				 
	
			Bank Address:

				 
	
			IBAN Code (if avail):

				 
	
			Reference Info (optional):

				 

 

Note: If a Non-ITS International Transfer is being used, please paste those instructions here.

 

	 	
			B.

				
			Amounts to be Withheld for OPIC Payables (delete if not applicable):

			

 

	
			Internal Transfer to OPIC for [Principal] / [Interest] / [Facility Fee] / [Commitment Fee]

				
			$[________]

			

 

	 	
			C. 

				
			Total: 

			

 

	
			Total of All Funds Transfers and Amounts Withheld for OPIC Payables (should equal the aggregate amount of the Disbursement requested)

				
			$[________]

			

 

 

Exhibit B - Annex 2 - 2

 

 

 

[Annex 3 to

Disbursement Request]26

 

 

Application of Prior Disbursements

 

1.

2.

3.

 

Attached hereto, with respect to each item listed above, is the corresponding [written contract][confirmed purchase order] or invoice for such costs, indicating the amount paid, due date, and services performed and/or goods delivered, and evidence of such payment in the form of [wire transfers][delivery receipt][customs declaration][copies of cancelled checks or cashier’s checks].

 

26 This annex is not applicable for the first Disbursement.

 

 

Exhibit B - Annex 3 - 1

 

 

 

[Annex 4 to 

Disbursement Request]

 

 

Mandatory Prepayment Events

 

1.

2.

3.

 

 

Exhibit B - Annex 4 - 1

 

 

 

EXHIBIT C-1

 

Form of Authorization Certificate of the Borrower

 

 

[ON BORROWER LETTERHEAD]

 

 

This Certificate is given on behalf of Geotérmica Platanares, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Honduras (the “Borrower”), pursuant to Section 4.02 of the Finance Agreement (OPIC No. 9000003553) dated as of [___], 2018 (the “Agreement”) between the Borrower, and Overseas Private Investment Corporation (“OPIC”). All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Agreement.

 

I, [__________], the [__________]27 of the Borrower, on behalf of the Borrower and not in my personal capacity, DO HEREBY CERTIFY that:

 

1.     Attached hereto as Annex 1 is a true and complete copy [and English translation] of the Escritura de Constitución y Estatutos (the “Articles of Incorporation”) of the Borrower, as amended to date, which are in full force and effect as of the date hereof, together with a [Certificado de Inscripción / Certificación Integra de Asiento], evidencing that such Articles of Incorporation and amendments have been registered with the competent mercantile public registry of San Pedro Sula, Cortés, Honduras.

 

2.     Attached hereto as Annex 2 are true and complete copies of resolutions [and their respective English translations] duly adopted by the [Board of Directors] of the Borrower [and of all documents evidencing any other necessary corporate or shareholder action taken by the Borrower] to authorize the execution, delivery and performance of the Agreement, the Note(s) and each of the other Transaction Documents to which it is or will be a party, and such resolutions are in full force and effect without amendment as of the date hereof.

 

3.     The following named individuals whose specimen signatures and titles are set forth opposite their names are authorized to execute and deliver on behalf of the Borrower the Agreement, the Note, each of the other Transaction Documents to which the Borrower is or will be a party, and all other notices or instruments contemplated in the Agreement:

 

	
			 

				 	
			 

				 	
			 

			
	
			Name

				 	
			Title

				 	
			Specimen Signature

			

 

	
			 

				 	
			 

				 	
			 

			
	
			Name

				 	
			Title

				 	
			Specimen Signature

			

 

	
			 

				 	
			 

				 	
			 

			
	
			Name

				 	
			Title

				 	
			Specimen Signature

			

 

 

[The above-named individuals must include all Persons who have signed any of the Transaction Documents and any Person who will deliver any document, notice, or instrument contemplated by the Agreement in the future, including a [Financial Officer].]

 

 

27 Title of Authorized Officer

 

 

Exhibit C-1 - 1

 

 

 

4.           Defaults. No Default or Event of Default has occurred and is continuing. The Borrower is not in breach of any provision of any contract to which the Borrower is a party, which breach could reasonably be expected to be a Material Adverse Effect.

 

5.           Compliance with Law; Corrupt Practices.

 

(i)     The Borrower is conducting its business in compliance in all material respects with all Applicable Laws, Consents and its Charter Documents.

 

(ii)     Without limiting the effect of clause (i), to the extent applicable, the Borrower and its officers, directors, employees, and agents, have complied with all applicable Corrupt Practices Laws in obtaining any Consents in respect of the Borrower’s business and the Project, and are otherwise conducting the Project and the Borrower’s business in compliance with applicable Corrupt Practices Laws. No Person acting on the Borrower’s behalf has made any Prohibited Payment with respect to the Project or any Transaction contemplated by the Transaction Documents.

 

 

 

WITNESS my hand this [_____] day of [__________], 20[__].28

 

 

 

____________________________

By: [_______________________]

Title: [_____________________]

 

 

 

I, [__________], the [_____]29 of the Borrower, DO HEREBY CERTIFY that [______________]30 is, and at all times since [__________], 20[__] has been, duly elected and qualified as [______]31 of the Borrower, and that the signature of such [Title] set forth above is true and genuine.

 

WITNESS my hand this [_____] day of [__________], 20[__].32

 

 

____________________________

By: [_______________________]

Title: [_____________________]

 

 

28 Must be dated the Closing Date.  Leave month and day blank and provide written authorization for OPIC to fill in the Closing Date.

29 Title

30 Name of person giving certification

31 Title

32 Must be dated the Closing Date.  Leave month and day blank and provide written authorization for OPIC to fill in the Closing Date.

 

 

Exhibit C-1 - 2

 

 

 

EXHIBIT C-2

 

Form of Authorization Certificate of the ShareholdeR

 

 

[ON SHAREHOLDER LETTERHEAD]

 

 

This Certificate is given on behalf of [__________], a [__________] organized and existing under the laws of [__________] (the “Shareholder”), pursuant to Section 4.02 of the Finance Agreement (OPIC No. 9000003553) dated as of [___], 2018 (the “Agreement”) between Geotérmica Platanares, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Honduras (the “Borrower”), and Overseas Private Investment Corporation (“OPIC”). All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Agreement.

 

I, [__________], the [__________]33 of the Shareholder, on behalf of the Shareholder and not in my personal capacity, DO HEREBY CERTIFY that:

 

1.        Agreement. The Shareholder is familiar with the terms of the Agreement and has made or caused to be made such examination or investigation as is necessary to enable it to express an informed opinion as to the matters set forth below.

 

2.         Charter Documents. Attached hereto as Annex 1 is a true and complete copy [and English translation] of the Charter Documents of the Shareholder as amended to date, which are in full force and effect as of the date hereof[, together with [________], evidencing that such [Charter Documents] have been registered with the competent governmental agencies and authorities in [_____]].

 

3.          Resolutions. Attached hereto as Annex 2 are true and complete copies of resolutions duly adopted by the [Board of Directors] of the Shareholder [and of all documents evidencing any other necessary corporate or shareholder action taken by the Shareholder] to authorize the execution, delivery and performance of the Transaction Documents to which it is or will be a party, and such resolutions are in full force and effect without amendment as of the date hereof.

 

4.         Existence and Power. The Shareholder (i) is a [______] duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization; (ii) is duly authorized to do business in each jurisdiction in which it conducts business; and (iii) has the power to own its properties, and carry on its business.

 

5.        No Conflict with Shareholder Agreements. The execution, delivery, and performance by the Shareholder of each of the Transaction Documents to which it is or is contemplated to be a party will not breach the Charter Documents of the Shareholder or any agreement or other requirement by which the Shareholder or any of its properties may be bound or affected.

 

6.      Share Capital. [(i) The Sponsor holds the direct legal and beneficial title to OII’s share capital; (ii) OII holds the direct legal and beneficial title to Ormat Holding Corp.’s share capital; (iii) Ormat Holding Corp. holds the direct legal and beneficial title to the Intermediate Shareholder’s share capital; (iv) the Intermediate Shareholder holds the direct legal and beneficial title to OrPower 19’s share capital; and (v) OrPower 19 holds the direct legal and beneficial title to the Borrower’s ordinary share capital (excluding the Preferred Nonvoting Share).]34

 

 

33 Title of Authorized Officer

 

 

Exhibit C-2 - 1

 

 

 

7.     Adequate Financial Means. The Shareholder (i) has capital sufficient to carry on its businesses and transactions and all businesses and transactions in which it engages, (ii) is able to pay its debts as they mature and (iii) owns property and other assets having a value, both at fair valuation and at present fair saleable value, greater than the total amount of the probable liabilities of the Shareholder on its debts and obligations as they become absolute and matured.

 

8.     Defaults.

(i)     Each of the representations and warranties of the Shareholder set forth in each of the Financing Documents to which it is a party is true and correct in all material respects (except with respect to any provision including the word “material” or words of similar import, with respect to which such representations and warranties are true and correct) as of the date hereof after giving effect to such Disbursement or, if any such representation relates exclusively to an earlier date, as of such earlier date.

 

(ii)     Both before and after giving effect to the Disbursement, to the knowledge of the Shareholder, no Default or Event of Default has occurred or is continuing.

 

9.     Compliance with Law; Corrupt Practices.

(i)     The Shareholder is conducting its business in compliance with all Applicable Laws and its Charter Documents.

 

(ii)     Without limiting the effect of clause (i), to the extent applicable, each of the Borrower and the Shareholder, and its officers, directors, employees, and agents, have complied with all applicable Corrupt Practices Laws in obtaining any Consents in respect of the Borrower’s business and the Project, and are otherwise conducting the Project and the Borrower’s business in compliance with applicable Corrupt Practices Laws. The Shareholder has not made any Prohibited Payment with respect to the Project or any Transaction contemplated by the Transaction Documents.

 

 

10.     Material Adverse Effect. There has been no event, condition or change known to the Shareholder in respect of the Project or the Borrower, the existence of which could reasonably be expected to be a Material Adverse Effect.

 

11.      Incumbency.      The following named individuals whose specimen signatures and titles are set forth opposite their names are authorized to execute and deliver on behalf of the Shareholder the Transaction Documents to which the Shareholder is or will be a party, and all other notices or instruments contemplated thereunder:

 

 

	
			 

				 	
			 

				 	
			 

			
	
			Name

				 	
			Title

				 	
			Specimen Signature

			

 

	
			 

				 	
			 

				 	
			 

			
	
			Name

				 	
			Title

				 	
			Specimen Signature

			

 

	
			 

				 	
			 

				 	
			 

			
	
			Name

				 	
			Title

				 	
			Specimen Signature

			

 

34 Inclusion of certifications (i)-(v) to be adjusted depending on Shareholder issuing the certificate.

 

 

Exhibit C-2 - 2

 

 

 

[The above-named individuals must include all Persons who have signed any of the Transaction Documents and any Person who will deliver any document, notice, or instrument contemplated by the Agreement in the future, including a [Financial Officer].]35

 

WITNESS my hand this [_____] day of [__________], 20[__].36

 

 

	 	 	 
	 	By:	 
	 	Title:	 

 

 

 

 

 

I, [__________], [___]37 of the Shareholder, DO HEREBY CERTIFY that [______]38 is, and at all times since [__________], 20[__] has been, duly elected and qualified as [____]39 of the Shareholder, and that the signature of such [_____]40 set forth above is true and genuine.

 

WITNESS my hand this [_____] day of [__________], 20[__].41

 

 

	 	 	 
	 	By:	 
	 	Title:	 

 

 

 

35 This is only necessary if the Shareholder is executing Transaction Documents or will be delivering Certified financials or other documents on an on-going basis.  Note that Financial Statements should be required from any person giving a personal guaranty.

36 Must be dated the Closing Date.  Leave month and day blank and provide written authorization for OPIC to fill in the Closing Date.

37 Title

38 Name of Person giving certification

39 Title

40 Title

41 Must be dated the Closing Date.  Leave month and day blank and provide written authorization for OPIC to fill in the Closing Date.

 

 

Exhibit C-2 - 3

 

 

 

EXHIBIT D

 

Form of CLOSING Certificate

 

 

[ON BORROWER LETTERHEAD]

 

[_____], 20[__] 42

 

 

This Certificate is given on behalf of Geotérmica Platanares, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Honduras (the “Borrower”), pursuant to Section 5.05 of the Finance Agreement (OPIC No. 9000003553) dated as of [___], 2018 (the “Agreement”) between the Borrower and Overseas Private Investment Corporation (“OPIC”). All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Agreement.

 

I, [__________], the [__________]43 of Geotérmica Platanares, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Honduras (the “Borrower”), DO HEREBY CERTIFY on behalf of the Borrower and not in my individual capacity that:

 

 

1.     I am familiar with the terms of the Agreement.

 

2.     Both before and after giving effect to the Disbursement, no Default or Event of Default has occurred or is continuing and as of the date hereof, nothing has occurred and is continuing that could be a Material Adverse Effect.

 

3.     All of the certifications contained in the Disbursement Request dated [__________] remain true and correct and in full force and effect[.][, except for the following:

 

	 	
			a.

				
			[______________]

			

	 	
			b.

				
			[______________]]

			

 

4.      [In addition, I hereby certify that [_________]]’44

 

5.     Attached hereto as Annex 1 is a list of any and all deviations of the Borrower from IFC Performance Standard 2 and/or any resolutions since the prior Disbursement to deviations from IFC Performance Standard 2 previously disclosed to OPIC.

 

42 Must be dated the Closing Date.  Leave month and day blank and provide written authorization for OPIC to fill in the Closing Date. 

43 Title of Authorized Officer

44 [Placeholder for any confirmations requested in the form of Disbursement Request that were not available. Relevant only if OPIC agrees to defer certification to the relevant Disbursement Date in which written confirmation of status will be necessary for COP’s launch.]

 

 

Exhibit D - 1

 

 

 

6.      [Attached hereto as Annex 2 [are][is a] true and complete [copies][copy] (and [their][its] respective English translation[s]), including all amendments to date, of the following documents[s], which [are][is] in full force and effect in accordance with [their][its] terms as of the date hereof:

 

	 	
			i.

				
			[List document to be Certified]; and

			

	 	
			ii.

				
			[List document to be Certified].]45

			

 

 

WITNESS my hand on the date first written above.

 

	 	GEOTÉRMICA PLATANARES, S.A. DE C.V.	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 
	 	Name:	 	 
	 	 	 	 
	 	Its:	 	 

 

45 Include this provision if there are documents that must be Certified pursuant to the Agreement.  If there are many documents that need to be Certified, consider having all documents Certified in a separate certificate (in which case, this provision may be deleted).

 

 

Exhibit D - 2

 

 

 

Annex 1

 

IFC Performance Standard 2 - Deviations and/or Resolutions

 

[Borrower to provide]

 

 

 

 

Exhibit D - Annex 1 - 1

 

 

 

EXHIBIT E

 

[ON INDEPENDENT ENGINEER LETTERHEAD]

 

Form of INDEPENDENT ENGINEER Certificate

 

	
			Issued by:

				
			Lummus Consultants International, Inc. (“Lummus”), 3600 West Sam Houston Parkway, Suite 400, Houston, TX 77042 in the role of “Independent Engineer” pursuant to the appointment letter signed by Overseas Private Investment Corporation for Geotérmica Platanares, S.A. de C.V. dated May 5, 2016 (the “Appointment”)

				 
	 	 	 
	
			Lender:

				
			Overseas Private Investment Corporation (“OPIC”), 1100 New York Avenue, N.W., Washington, D.C. 20527-0001

				 
	 	 	 
	
			Borrower:

				
			Geotérmica Platanares, S.A. de C.V. (the “Borrower”),

			Plaza Saavedra, Modulo #20 y 21

			Bo. Mercedes, 1a Calle NE 3a Av NE

			Frente a Hotel VIP Copán

			Santa Rosa de Copán

			HONDURAS

				 
	 	 	 
	
			Date of issue:

				
			[_________], 20[__]

				 
	 	 	 
	
			Finance

			Agreement:

				
			Finance Agreement (OPIC No. 9000003553)

				 
	 	 	 
	
			Disbursement:

				
			[___] Disbursement

				 

 

 

Reference is made to the Finance Agreement (OPIC No. 9000003553), dated as of [___], 2018, 2018 (the “Agreement”) by and between the Borrower and OPIC (each, as defined above). All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Agreement.

 

The Independent Engineer hereby submits this certificate (the “Certificate”) pursuant to [Section 4.13 and]46 Section 5.13 of the Agreement.

 

The Independent Engineer has discussed matters set forth in this Certificate, where it deems such discussions to be pertinent, with the Borrower and appropriate third parties. The Independent Engineer has performed the services required in connection with the delivery of this Certificate in a professional manner using sound project management and supervisory principles and procedures in accordance with the standard of care for the level of services as practiced by consulting engineers on similar assignments concerning generation facilities similar to the Project. The Independent Engineer hereby represents that it has the required skills and capacity to perform such services in the foregoing manner and has made such reviews, examinations and investigations as the Independent Engineer believes in its professional judgment to be reasonably necessary for the purposes of making the certifications set forth herein.

 

46 Use for first Disbursement.

 

 

Exhibit E - 1

 

 

 

On the basis of the foregoing and on the understanding and assumption (after due inquiry) that the Independent Engineer has been provided true, correct and complete information from such other parties as to the matters set forth herein, the Independent Engineer hereby makes the following certifications:

 

	 	
			1.

				
			The Disbursement Request referenced above requests funding for Project Costs that have been incurred as of the date of the Disbursement Request.

			

 

	 	
			2.

				
			[The final report prepared by the Independent Engineer dated as of [_____] and delivered to OPIC on [_____] is complete and accurate in all material respects as of the date hereof].47

			

 

	 	
			3.

				
			We have found no indications that the Borrower has not developed and maintained the geothermal resource, the wells and the surface facilities in accordance with the ENEE PPA, the Agreement and Good Industry Practice.

			

 

	 	
			4.

				
			[Works necessary for safe and sustained commercial operations (except for matters related to slope stability pending completion pursuant to Schedule 4.13(b)(i) of the Agreement) have been completed in accordance with the Project Documents that we have reviewed and have been paid for on an arm’s length basis, except those listed in Schedule 4.13(b)(ii) of the Agreement. Sufficient funds have been held in reserve by the Borrower to pay for such Works, if any, remaining to be completed.]48

			

 

	 	
			5.

				
			[To the best of the Independent Engineer’s knowledge (after due inquiry), all such Works have been carried out in a manner consistent with International Finance Corporation’s Performance Standards 3 (it being understood that the Independent Engineer has not assessed compliance that all wastes generated during construction and operation, including hazardous wastes, sanitary wastes and drilling fluids, have been appropriately disposed of and that that no major environmental incidents, such as big spills, occurred, and if they did occur, that appropriate actions were taken to clean up) and 4 (January 1, 2012) and has not conducted a detailed verification.]49

			

 

	 	
			6.

				
			[COD has been reached in accordance with the ENEE PPA as confirmed by the issuance of the Commercial Operation Start Certificate].50

			

 

	 	
			7.

				
			[To the best of the Independent Engineer’s knowledge (after due inquiry), all Consents with respect to air emissions, discharges to surface water or ground water, noise emissions, solid or liquid waste disposal, the use, generation, storage, transportation or disposal of toxic or hazardous substances or wastes, or other environment, health and safety and social performance matters required for construction and operation of the Project or otherwise under Applicable Law for the Project have been issued as required since commencement of construction and through the date hereof.]

			

 

47 Include in certificate for first Disbursement.

48 Include bracketed language in certificate for first Disbursement.

49 Include in certificate for first Disbursement.

50 Include in certificate for first Disbursement.

 

 

Exhibit E - 2

 

 

 

	 	
			8.

				
			The Independent Engineer has performed such inspections, observations, analyses and other procedures which it has deemed necessary for purposes of this certificate, including a site visit on October 12, 2017, and receiving and reviewing all completion test results [and receiving and reviewing at least six months of operations data].51

			

 

	 	
			9.

				
			[Based on performance data from September 1, 2017 through [February 25, 2018], performance has been steady (excluding scheduled ENEE outages), with the Project’s net generation equal to or greater than the Required Plant Capacity.]52

			

 

	 	
			10.

				
			[Analysis of operational data and Reservoir Monitoring Reports covering at least six months of commercial operations, does not lead us to question (a) the conclusions in the final report prepared by the Independent Engineer dated as of [_____] and delivered to OPIC on [_____] or (b) the assumptions about geothermal reservoir performance and plant capacity used by the Borrower in the Financial Model [, except as set forth in Annex [1].]]53

			

 

The undersigned acknowledges that OPIC will rely on the certifications given herein.

 

The person signing this Certificate is a duly qualified representative of the Independent Engineer and as such is authorized to execute this Certificate on behalf of the Independent Engineer.

 

Very truly yours,

Lummus Consultants International, Inc.

 

The undersigned acknowledges that OPIC will rely on the certifications given herein.

 

 

 

Signed: ..............................

 

Name: John Senner

Title: Director

 

	
			Distribution:

				
			Original to:

				
			Duplicate to:

				 
	 	
			Overseas Private

			Investment Corporation

			1100 New York Avenue,

			N.W.

			Washington, D.C. 20527

				
			Geotérmica Platanares, S.A. de C.V.

			Plaza Saavedra, Modulo #20 y 21

			Bo. Mercedes, 1a Calle NE 3a Av NE

			Frente a Hotel VIP Copán

			Santa Rosa de Copán

			HONDURAS

				 

 

51 Include for the True-Up Confirmation, to be included with respect to any Disbursement in an amount that, together with all then previous Disbursements made, would exceed $114,700,000.

52 This is the Plant Capacity certification, to be included with respect to the First Disbursement.

53 This is the True-Up Confirmation, to be included with respect to any Disbursement in an amount that, together with all then previous Disbursements made, would exceed $114,700,000.

 

 

Exhibit E - 3

 

 

 

[Annex 1

Noted or Exceptions Related to the True-Up Confirmation]54

 

[IE to include if applicable]

 

 

 

 

54 Include with respect to any Disbursement in an amount that, together with all then previous Disbursements made, would exceed $114,700,000.

 

 

Exhibit E - Annex 1 - 1

 

 

 

EXHIBIT F

 

[ON BORROWER LETTERHEAD]

 

 

Form of COMPLIANCE Certificate

 

[______], 20[__]’55

 

This Certificate is given pursuant to Section 6.05 of the Finance Agreement (OPIC No. 9000003553) dated as of [___], 2018 (the “Agreement”) between Geotérmica Platanares, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Honduras (the “Borrower”), and Overseas Private Investment Corporation (“OPIC”). All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Agreement.

 

I, [__________], a Financial Officer of the Borrower, on behalf of the Borrower and not in my personal capacity, DO HEREBY CERTIFY that:

 

1.     I am familiar with the terms of the Agreement;

 

2.     I have made or caused to be made such examination or investigation as is necessary to enable me to express an informed opinion as to the matters set forth below;

 

3.     [Attached hereto as Annex 1 are the unaudited Financial Statements of the Borrower for the fiscal quarter ending on [_____] pursuant to Section 6.05(a) of the Agreement, all of which are true and complete;]56

 

4.     Attached hereto as Annex 2 is a copy of the report required under Section 6.05(c) of the Agreement setting forth in reasonable detail all transactions between the Borrower, on the one hand, and any of the Shareholders or any Affiliate of any such Shareholder, on the other hand, and such report is true and complete;

 

5.     My review of the unaudited Financial Statements of the Borrower attached hereto [has not disclosed the existence of any Default or Event of Default][has disclosed the existence of the following Defaults or Events of Default relating to [________],57 for the period of [______],58 which [have been][are proposed to be resolved] as follows:

 

[_____].]59

 

6.     Attached hereto as Annex 3 are the calculations demonstrating in reasonable detail the Borrower’s compliance with the financial ratios set forth in Section 6.10 of the Agreement and the basis for such calculations.

 

55 Must be delivered together with the Borrower’s unaudited Financial Statements as set forth in Section 6.05(a) of the Agreement.

56 Include for first three fiscal quarters of each Fiscal Year.

57 Describe nature of default.

58 Insert period of existence.

59 Insert Description of Action the Borrower has Taken or Proposes to Take with Respect to any such Default or Event of Default.

 

 

Exhibit F - 1

 

 

 

WITNESS my hand on the date first written above.

 

 

By: __________________________

Name: _______________________

Title: Financial Officer

 

 

Exhibit F - 2

 

 

 

[Annex 1

 

[Attach Financial Statements]]60

 

60 Include for first three fiscal quarters of each Fiscal Year.

 

 

Exhibit F - Annex 1 - 1

 

 

 

Annex 2

 

[Attach Related Party Transactions Report under 6.05(c)]

 

 

 

 

Exhibit F - Annex 2 - 1

 

 

 

Annex 3

 

[Insert calculations of financial ratios under Section 6.10]

 

 

 

 

Exhibit F - Annex 3 - 1

 

 

 

EXHIBIT G

 

Form of FINAL DISBURSEMENT Certificate 

 

[ON BORROWER LETTERHEAD]

 

[______], 20[__] 

 

Reference is made to (a) the Finance Agreement (OPIC No. 9000003553) dated as of [___], 2018 (the “Agreement”) between Geotérmica Platanares, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Honduras (the “Borrower”), and Overseas Private Investment Corporation (“OPIC”) and (b) the Disbursement Request dated [_____] pursuant to which the Borrower requested the final Disbursement in the amount of $[____] on [_______]61. All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Agreement.

 

Pursuant to Section 6.05(g) of the Agreement, I, [__________], the [________]62 of the Borrower, on behalf of the Borrower and not in my personal capacity, DO HEREBY CERTIFY that (a) attached hereto as Annex 1 is a true and complete schedule setting forth the Project Costs to which the proceeds of the final Disbursement were applied, including each evidence for such costs, indicating the amount paid, payment date, and services performed and/or goods delivered, and evidence of such payment [instructions] in the form of [wire transfers][delivery receipt][customs declaration][copies of cancelled checks or cashier’s checks][a flow of funds memorandum], and (b) the application of such proceeds is consistent with the use of proceeds described in the Disbursement Request for such Disbursement.

 

 

	 	WITNESS my hand on the date first written above.	 
	 	 	 	 
	 	 	 	 
	 	GEOTÉRMICA PLATANARES, S.A. DE C.V.	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 
	 	Name:	 	 
	 	 	 	 
	 	Its:	 	 

 

61 Insert Closing Date.

62 Title of Authorized Officer.

 

 

Exhibit G - 1

 

 

 

Annex 1

 

Application of Final Disbursement

 

[___________________]63

 

Attached hereto, with respect to each item listed in the schedule above, is the corresponding [written contract][confirmed purchase order][invoice][other evidence] for such costs, indicating the amount paid, due date, and services performed and/or goods delivered, and evidence of such payment in the form of [wire transfers][delivery receipt][customs declaration][copies of cancelled checks or cashier’s checks][other evidence].

 

63 Insert schedule of Project Costs to which proceeds of final Disbursement were applied.

 

 

Exhibit G - Annex 1 - 1

 

 

 

EXHIBIT H-1

 

[PAPEL MEMBRETADO GEOPLATANARES]

 

 

Form of Written Notice to SERNA

 

 

 

Tegucigalpa, M.D.C., [____] de [_____] de 2018

 

Señores

Secretaría de Estado en el Despacho de Energía, Recursos Naturales, Ambiente y Minas (“MI AMBIENTE”)

Presente.

 

Atención: [_____]

 

Asunto: Notificación de cesión en garantía de los derechos derivados del Contrato de Operación para la Generación, Transmisión y Comercialización de Energía Eléctrica suscrito entre la Secretaría de Recursos Naturales y Ambiente y la empresa “Geotérmica Platanares, S.A. de C.V.”

 

Estimados Señores:

 

Hacemos referencia al Contrato de Operación para la Generación, Transmisión y Comercialización de Energía Eléctrica de fecha 06 de Enero de 2009 (en adelante denominado, el “Contrato de Operación”) firmado entre la sociedad GEOTÉRMICA PLATANARES, S.A. DE C.V. (en adelante denominada, la “Empresa”) y la Secretaría de Estado en los Despachos de Recursos Naturales y Ambiente (SERNA), ahora denominada Secretaría de Estado en los Despachos de Energía, Recursos Naturales, Ambiente y Minas (en adelante “MI AMBIENTE”), aprobado por el Congreso Nacional a través de Decreto Legislativo número 197-2012 de fecha 18 de Diciembre de 2012, publicado en el Diario Oficial La Gaceta de fecha 31 de Enero de 2013.

 

 

Exhibit H-1 - 1

 

 

 

En virtud del Contrato de Operación, MI AMBIENTE autoriza a la Empresa para operar el Proyecto denominado Central Geotérmica Platanares, en el Municipio de La Unión, Departamento de Copán, destinado al servicio público de electricidad cuyas instalaciones tendrán una capacidad instalada nominal de 35,000 kW y la generación promedio de 297,400,000 kWh/año (el “Proyecto”). En fecha 03 de Junio de 2010, la Empresa firmó el Contrato de Suministro de Potencia y Energía Eléctrica No. 086-2010 con la Empresa Nacional de Energía Eléctrica (“ENEE”), aprobado por el Congreso Nacional a través de Decreto Legislativo número 159-2010 de fecha 09 de Septiembre de 2010, publicado en el Diario Oficial La Gaceta de fecha 31 de Diciembre de 2010.

 

A fin de obtener el financiamiento necesario para la construcción, desarrollo y operación del Proyecto, la Empresa [(ha suscrito en fecha [_____]) / (suscribirá)64] un contrato de crédito con OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC) (la “Institución Financista”), así como otros documentos relacionados, auxiliares y complementarios de los mismos (colectivamente, los “Documentos de Financiamiento”).

 

Como parte de dichos Documentos de Financiamiento, la Empresa suscribirá un contrato de fideicomiso de administración y garantía con Banco del País, S.A. (el “Fiduciario”) en beneficio de la Institución Financista, en virtud del cual la Empresa cederá en garantía todos los derechos y activos derivados del Contrato de Operación, y los derechos derivados de los demás contratos, permisos, autorizaciones y licencias que sean necesarios para la operación del Proyecto.

 

En consecuencia, por medio del presente documento y en base a lo señalado en la Cláusula SEGUNDA del Contrato de Operación (Vigencia, Duración, Renovación o Prórroga, Cesión) que cita: “...La Empresa Generadora puede otorgar en garantía a las Partes Financistas de la Planta todo o parte de este Contrato con la sola notificación a la Secretaría de tal acto.”, la Empresa formalmente notifica a MI AMBIENTE (antes denominada SERNA) de la cesión en garantía a ser realizada a favor del Fiduciario en beneficio de la Institución Financista tal y como se señala en el párrafo que antecede.

 

64 Dependerá su respectivo uso si la notificación se hace antes de firmar el contrato de préstamo o después de firmar el contrato de préstamo, ambos casos antes de la firma del Fideicomiso de Administración y Garantía.

 

 

Exhibit H-1 - 2

 

 

 

Se acompaña a la presente carta el proyecto de Acuerdo Directo que solicitamos sea suscrito por MI AMBIENTE para dar cumplimiento a la relacionada disposición SEGUNDA del Contrato de Operación y como parte de las condiciones pactadas con la entidad Financista del proyecto.

 

La presente carta es emitida a petición de la Empresa y la Institución Financista para dar fiel cumplimiento a lo requerido en el Contrato de Operación, este día [____] del mes de [___] de dos mil dieciocho (2018).

 

MI AMBIENTE a través de la recepción de ésta carta reconoce haber sido debidamente notificada de la mencionada cesión y se da por enterada de la misma.

 

 

Por la EMPRESA:

 

 

P.p.: ________________________________

 

 

 

Por MI AMBIENTE:

Recibido y Conforme:

 

 

 

P.p.:_________________________________

 

 

Exhibit H-1 - 3

 

 

 

EXHIBIT H-2

 

Form of Written Notice to MINOSA 

 

[__________], 20[__]

 

[__________]

[__________]

[__________]

[__________]65

 

RE: Notice of Collateral Assignment of Cooperation Agreement

 

Dear [__________]:

 

Reference is made to (a) that certain Cooperation Agreement, dated as of [___], 2018 (the “Cooperation Agreement”) between Geotérmica Platanares, S.A. de C.V., a Honduran sociedad anónima de capital variable (“GeoPlatanares”) and Minerales de Occidente S.A. de C.V., a Honduran sociedad anónima de capital variable (“Minosa”) and (b) that certain Electric Energy Supply Contract, dated as of May 5, 2007 (the “PPA”) between GeoPlatanares and Minosa. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Cooperation Agreement and the PPA, as applicable.

 

GeoPlatanares entered into a Finance Agreement, dated as of [____], 2018, with the Overseas Private Investment Corporation (“OPIC”), as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof (the “Finance Agreement”), in order to obtain debt financing for the Geothermal Project.

 

As security for GeoPlatanares’s obligations under the Finance Agreement and the other documents and agreements related thereto, GeoPlatanares, OrPower 19, Inc., and Banco del País, S.A., as trustee, (the “Trustee”), entered into that certain Amended and Restated Administration and Guarantee Trust Agreement (the Contrato de Fideicomiso de Administración y Garantía Enmendado y Reexpresado), dated as of [__________], 20[__], as amended, amended and restated, supplemented or otherwise modified from time to time (the “Administration and Guaranty Trust Agreement”) and the other documents and agreements related thereto, under which GeoPlatanares has assigned its rights and benefits under and pursuant to each of the Cooperation Agreement and the PPA, to the Trustee.

 

Section 11.5(b) of the Cooperation Agreement provides that GeoPlatanares may collaterally assign its rights under the Cooperation Agreement to a Financing Party or its agent, representative or nominee.

 

Clause XXVI of the PPA provides that GeoPlatanares may collaterally assign its rights under the PPA to any Financier with the exception of a public entity. For purposes of the PPA, OPIC is a Financier and is not a public entity.

 

At the request of OPIC, this letter provides notice to Minosa of our collateral assignment of our rights and benefits under and pursuant to the Cooperation Agreement and the PPA to the Trustee, effective as of the date of execution of the Administration and Guaranty Trust Agreement.

 

65 Insert contact information for Minosa.

 

 

Exhibit H-2 - 1

 

 

 

In addition, all amounts payable to GeoPlatanares under and in connection with the Cooperation Agreement and the PPA shall be made directly to the [__________]66 maintained under the [Administration and Guaranty Trust Agreement] by wire transfer as follows:

 

[__________]

[__________]

[__________]

[__________]

[__________]67

 

or as otherwise specified by the Trustee in a written notice to GeoPlatanares, Minosa and OPIC.

 

If you have any questions regarding the collateral assignment described herein, please feel free to contact [Elio Orozco] at [504-2662-1066] or [eorozco@ormat.com].

 

 

 

[Signature page follows]

 

66 Insert applicable account name.

67 Insert wire transfer information.

 

 

Exhibit H-2 - 2

 

 

 

	 	
			GEOTÉRMICA PLATANARES, S.A. DE C.V.

				 
	 	 	 	 
	 	 	 	 
	 	
			By:

				 	 
	 	 	
			Name:

				 
	 	 	
			Title:

				 

 

 

Exhibit H-2 - 3

 

 

 

EXHIBIT I

 

Form of SERNA DIRECT AGREEMENT 

 

 

Exhibit I - 1

 

 

 

 

Exhibit I - 2

 

 

 

 

Exhibit I - 3

 

 

 

 

Exhibit I - 4

 

 

 

 

Exhibit I - 5

 

 

 

 

Exhibit I - 6EX-4.1

 Exhibit 4.1 
  

 
  

HSBC HOLDINGS PLC, 
 as Issuer 

THE BANK OF NEW YORK MELLON, LONDON BRANCH, 

as Trustee 
 HSBC BANK USA,
NATIONAL ASSOCIATION, 
 as Paying Agent, Registrar and Calculation Agent 

 
  

SEVENTH SUPPLEMENTAL INDENTURE 

Dated as of June 19, 2018 
  

 
 To the Senior
Indenture, dated as of August 26, 2009, 
 among the Issuer, the Trustee and the Paying Agent, Registrar and Exchange Rate Agent 

$3,000,000,000 4.583% Fixed Rate/Floating Rate Senior Unsecured Notes due 2029 

 
  

 

 TABLE OF CONTENTS 

 

					
	 	  	Page	 
		
	 ARTICLE 1 DEFINITIONS
	  	 	3	 
		
	 SECTION 1.01. Definition of Terms
	  	 	3	 
	 SECTION 1.02. Supplemental Definitions
	  	 	4	 
		
	 ARTICLE 2 THE NOTES
	  	 	8	 
		
	 SECTION 2.01. Terms Applicable to the Notes
	  	 	8	 
		
	 ARTICLE 3 INTEREST CALCULATION IN RESPECT OF THE NOTES
	  	 	9	 
		
	 SECTION 3.01. Interest Rate on the Notes
	  	 	9	 
	 SECTION 3.02. Calculation Agent
	  	 	10	 
		
	 ARTICLE 4 AMENDMENTS TO THE BASE INDENTURE APPLICABLE TO THE NOTES ONLY
	  	 	12	 
		
	 SECTION 4.01. Redemption of Debt Securities
	  	 	12	 
	 SECTION 4.02. Events of Default and Defaults
	  	 	13	 
		
	 ARTICLE 5 MISCELLANEOUS
	  	 	15	 
		
	 SECTION 5.01. Effect of this Supplemental Indenture; Ratification and Integral Part
	  	 	15	 
	 SECTION 5.02. Priority
	  	 	15	 
	 SECTION 5.03. Successors and Assigns
	  	 	15	 
	 SECTION 5.04. Subsequent Holders’ Agreement
	  	 	16	 
	 SECTION 5.05. Compliance
	  	 	16	 
	 SECTION 5.06. Relation to Calculation Agent Agreement
	  	 	16	 
	 SECTION 5.07. Governing Law
	  	 	16	 
	 SECTION 5.08. Counterparts
	  	 	16	 
	 SECTION 5.09. Entire Agreement
	  	 	16	 
		
	 EXHIBIT A – Form of 4.583% Fixed/Floating Rate Global Security
	  			

 SEVENTH SUPPLEMENTAL INDENTURE, dated as of June 19, 2018 (this “Supplemental
Indenture”), by and among HSBC Holdings plc, a public limited company duly organized and existing under the laws of England and Wales (the “Company”), having its principal office at 8 Canada Square, London E14 5HQ, England,
The Bank of New York Mellon, London Branch, a New York banking corporation, as trustee (the “Trustee”), having its principal corporate trust office at 101 Barclay Street, Floor 7-East, New
York, New York 10286, and HSBC Bank USA, National Association, as Paying Agent, Registrar and Calculation Agent (together, the “Agent”), having its principal office at 452 Fifth Avenue, New York, New York 10018. 

W I T N E S S E T H: 

WHEREAS, the Company, the Trustee and the Agent have executed and delivered an indenture dated as of August 26, 2009 (as amended
or supplemented from time to time, the “Base Indenture” and, together with this Supplemental Indenture, the “Indenture”), to provide for the issuance of the Company’s Debt Securities; 

WHEREAS, Section 9.01(5) of the Base Indenture provides that the Company and the Trustee may enter into a supplemental indenture
to establish the forms or terms of the Debt Securities of any series without the consent of the Holders as permitted under Sections 2.01 and 3.01 of the Base Indenture; 

WHEREAS, the Company desires to issue $3,000,000,000 4.583% Fixed Rate/Floating Rate Senior Unsecured Notes due 2029 (such series of
Debt Securities, the “Notes”) under the Base Indenture (as supplemented and amended by this Supplemental Indenture); 

WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid and binding instrument in accordance
with the terms of the Base Indenture have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized; 

NOW, THEREFORE, each party agrees as follows for the benefit of the other parties and the equal and ratable benefit of the Holders.

 ARTICLE 1 

DEFINITIONS 

SECTION 1.01.    Definition of Terms. For all purposes of this Supplemental Indenture:

 (a)    capitalized terms used herein but not otherwise defined shall have the meanings assigned to
them in the Base Indenture; 
 (b)    all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them therein; 
 (c)    the
singular includes the plural and vice versa; 
 (d)    the use of “or” is not intended to be
exclusive unless expressly indicated otherwise; 
 (e)    the section headings herein are for convenience
only and shall not affect the construction of this Supplemental Indenture; 

  
 3 

 (f)    wherever the words “include,”
“includes” or “including” are used in this Supplemental Indenture, they shall be deemed to be followed by the words “without limitation”; and 

(g)    the words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; 

SECTION 1.02.    Supplemental Definitions. The following definitions shall apply
to the Notes only: 
 (a)    “Agent” has the meaning set forth in the introduction to
this Supplemental Indenture; 
 (b)    “Alternative Base Rate” means the rate that has
replaced LIBOR in customary market usage for determining floating interest rates in respect of bonds denominated in Dollars or, if the Independent Financial Adviser or the Company (in consultation with the Calculation Agent and acting in good faith
and a commercially reasonable manner), as applicable, determines that there is no such rate, such other rate as the Independent Financial Adviser or the Company (in consultation with the Calculation Agent and acting in good faith and a commercially
reasonable manner), as applicable, determines in its or the Company’s sole discretion is most comparable to LIBOR. If the Alternative Base Rate is determined, such Alternative Base Rate shall be the Alternative Base Rate for the remaining
Floating Rate Interest Periods; 
 (c)    “Alternative Screen Page” means the
alternative screen page, information service or source on which the Alternative Base Rate appears (or such other page, information service or source as may replace the alternative screen page, information service or source, in each case, as may be
nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates); 

(d)    “BRRD” means Directive 2014/59/EU establishing a framework for the recovery and
resolution of credit institutions and investment firms, as amended, supplemented or replaced from time to time; 

(e)    Calculation Agent” means HSBC Bank USA, National Association, or its successor appointed
by the Company pursuant to the Calculation Agent Agreement; 
 (f)    “Calculation Agent
Agreement” means the calculation agent agreement dated as of June 19, 2018 between the Company and the Calculation Agent; 

(g)    “Capital Instruments Regulations” means any regulatory capital rules, regulations
or standards which are applicable to the Company at any time (on a solo or consolidated basis and including any implementation thereof or supplement thereto by the PRA from time to time) and which lay down the requirements to be fulfilled by
financial instruments for inclusion in the Company’s regulatory capital (on a solo or consolidated basis) as may be required by (i) the CRR and/or (ii) the CRD, including (for the avoidance of doubt) any delegated acts and
implementing acts made by the European Commission (such as regulatory technical standards and implementing technical standards) and European Banking Authority guidelines all as amended from time to time and as implemented in the UK; 

  
 4 

 (h)    “Company” has the meaning set forth
in the introduction to this Supplemental Indenture; 
 (i)    “CRD” means Directive
2013/36/EU of the European Parliament and of the Council of June 26, 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC, as amended,
and repealing Directives 2006/48/EC and 2006/49/EC, as amended, supplemented or replaced from time to time, and (where relevant) any applicable successor EU or UK legislation; 

(j)    “CRD IV” means, taken together, (i) the CRR, (ii) the CRD and
(iii) the Capital Instruments Regulations; 
 (k)    “CRR” means regulation (EU) No
575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No 648/2012, as amended, supplemented or replaced from time to time,
and (where relevant) any applicable successor EU or UK legislation; 
 (l)    “FATCA”
means (i) sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended or any associated regulations or other official guidance; (ii) any treaty, law, regulation or other official guidance enacted in any other jurisdiction,
or relating to an intergovernmental agreement between the United States and any other jurisdiction, which (in either case) facilitates the implementation of clause (i); or (iii) any agreement pursuant to the implementation of clauses
(i) or (ii) with the U.S. Internal Revenue Service, the U.S. government or any governmental or taxation authority in any other jurisdiction; 

(m)    “Fixed Rate Period” means the period from (and including) June 19, 2018 to
(but excluding) June 19, 2028; 
 (n)    “Fixed Rate Period Interest Payment Date”
has the meaning set forth in clause (d) of Section 2.01 of this Supplemental Indenture; 

(o)    “Floating Rate Interest Period” means the period beginning on (and including) a
Floating Rate Period Interest Payment Date and ending on (but excluding) the next succeeding Floating Rate Period Interest Payment Date; provided that the first Floating Rate Interest Period shall begin on June 19, 2028 and shall end on
(but exclude) the first Floating Rate Period Interest Payment Date; 
 (p)    “Floating Rate
Period” means the period from (and including) June 19, 2028 to (but excluding) the Maturity Date; 

(q)    “Floating Rate Period Calculation Changes” has the meaning set forth in clause
(b) of Section 3.02 of this Supplemental Indenture; 
 (r)    “Floating Rate Period
Interest Determination Date” means the second London Banking Day preceding the applicable Floating Rate Period Interest Reset Date; 

(s)    “Floating Rate Period Interest Determination Cut-off
Date” has the meaning set forth in clause (a)(iii) of Section 3.02 of this Supplemental Indenture; 

  
 5 

 (t)    “Floating Rate Period Interest Payment
Date” has the meaning set forth in clause (d) of Section 2.01 of this Supplemental Indenture; 

(u)     “Floating Rate Period Interest Reset Date” means March 19, June 19,
September 19 and December 19, beginning on June 19, 2028; 
 (v)    “Floating Rate
Period Margin” has the meaning set forth in clause (b)(i) of Section 3.01 of this Supplemental Indenture; 

(w)    “Independent Financial Adviser” means an independent financial institution of
international repute or other independent financial adviser experienced in the international capital markets, in each case appointed by the Company at the Company’s own expense; 

(x)    “Initial Interest Rate” has the meaning set forth in clause (d) of
Section 2.01 of this Supplemental Indenture; 
 (y)    “Issue Date” has the meaning
set forth in clause (a) of Section 2.04 of this Supplemental Indenture; 
 (z)    “HSBC
Group” means the Company together with its subsidiary undertakings; 

(aa)    “LIBOR” means the three-month Dollar London interbank offered rate; 

(bb)    “London Banking Day” means any day on which dealings in Dollars are transacted in
the London interbank market; 
 (cc)    “London Reference Banks” has the meaning set
forth in clause (a)(ii) of Section 3.02 of this Supplemental Indenture; 
 (dd)    “Loss
Absorption Disqualification Event” has the meaning set forth in Section 5.02 of this Supplemental Indenture; 

(ee)    “Loss Absorption Regulations” means, at any time, the laws, regulations,
requirements, guidelines, rules, standards and policies from time to time relating to minimum requirements for own funds and eligible liabilities and/or loss absorbing capacity instruments in effect in the UK, including, without limitation to the
generality of the foregoing, any delegated or implementing acts (such as implementing or regulatory technical standards) adopted by the European Commission and applicable to the Company from time to time (whether or not such requirements, guidelines
or policies are applied generally or specifically to the Company or to the Company and any of its holding or subsidiary companies or any subsidiary of any such holding company); 

(ff)    “Maturity” has the meaning set forth in clause (c) of Section 2.01 of
this Supplemental Indenture; 
 (gg)    “New York Reference Banks” has the meaning set
forth in clause (a)(ii) of Section 3.02 of this Supplemental Indenture; 

(hh)    “Notes” has the meaning set forth in the recitals to this Supplemental Indenture;

 (ii)    “PRA” means the UK Prudential Regulation Authority or any successor entity;

  
 6 

 (jj)    “Reference Banks” has the meaning
set forth in clause (a)(ii) of Section 3.02 of this Supplemental Indenture; 
 (kk)    
“Regulated Entity” means any BRRD Undertaking as such term is defined under the PRA Rulebook promulgated by the PRA, as amended from time to time, which includes certain credit institutions, investment firms, and certain of their
parent or holding companies or any comparable future definition intended to designate entities within the scope of the UK recovery and resolution regime; 

(ll)    “Relevant Regulator” means the PRA or any successor entity or other entity
primarily responsible for the prudential supervision of the Company; 
 (mm)    “Relevant
Rules” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy (including, without limitation, as to leverage) then in effect in the United Kingdom including, without limitation to the
generality of the foregoing, as may be required by CRD IV or BRRD or any applicable successor legislation or any delegated or implementing acts (such as regulatory technical standards) adopted by the European Commission and applicable to the Company
from time to time and any regulations, requirements, guidelines and policies relating to capital adequacy adopted by the Relevant Regulator from time to time (whether or not such requirements, guidelines or policies are applied generally or
specifically to the Company or to the Company and any of its holding or subsidiary companies or any subsidiary of any such holding company); 

(nn)    “Relevant Screen Page” has the meaning set forth in clause (a)(i) of
Section 3.02 of this Supplemental Indenture; 
 (oo)    “Relevant Supervisory
Consent” means as (and to the extent) required, a consent or waiver to the relevant redemption or purchase from the Relevant Regulator. For the avoidance of doubt, Relevant Supervisory Consent shall not be required if either (i) none
of the Notes qualify as part of the Company’s regulatory capital, or own funds and eligible liability or loss absorbing capacity instruments, as the case may be, each pursuant to the Loss Absorption Regulations, (ii) the relevant Notes are
repurchased for market-making purposes in accordance with any permission given by the Relevant Regulator pursuant to Relevant Rules (including, without limitation, Article 29(3) of Commission Delegated Regulation (EU) No. 241/2014) within the
limits prescribed in such permission or (iii) the relevant Notes are being redeemed or repurchased pursuant to any general prior permission granted by the Relevant Regulator or any authority with the ability to exercise a UK Bail-in Power pursuant to the Relevant Rules or the Loss Absorption Regulations within the limits prescribed in such permission; 

(pp)    “Trustee” has the meaning set forth in the introduction to this Supplemental
Indenture; and 
 (qq)    “UK Bail-in Power”
means any write-down, conversion, transfer, modification, or suspension power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the United Kingdom, relating to the
transposition of the BRRD or otherwise, including but not limited to the Banking Act and the instruments, rules and standards created thereunder, pursuant to which (i) any obligation of a Regulated Entity (or other affiliate of such Regulated
Entity) can be reduced, cancelled, modified, or converted into shares, other securities, or other obligations of such Regulated Entity or any other person (or suspended for a temporary period); and (ii) any right in a contract governing an
obligation of a Regulated Entity may be deemed to have been exercised. 

  
 7 

 ARTICLE 2 

THE NOTES 

SECTION 2.01.    Terms of the Notes. 

The following terms relating to the Notes are hereby established: 

(a)    the title of the Notes shall be “4.583% Fixed Rate/Floating Rate Senior Unsecured Notes due
2029”; 
 (b)    the aggregate principal amount of the Notes that may be authenticated and delivered
under the Indenture shall not initially exceed $3,000,000,000 (except as otherwise provided in the Indenture); 

(c)    the principal on the Notes shall be payable on June 19, 2029 (the “Maturity”);

 (d)    during the Fixed Rate Period, interest on the Notes shall be payable (i) semi-annually at
a rate of 4.583% per annum (the “Initial Interest Rate”); and (ii) in arrear on June 19 and December 19 of each year, beginning on December 19, 2018 (each, a “Fixed Rate Period Interest Payment
Date”). During the Floating Rate Period, interest on the Notes shall be payable (i) quarterly at a rate per annum determined in accordance with Article Three of this Supplemental Indenture; and (ii) in arrear on March 19,
June 19, September 19 and December 19, beginning on September 19, 2028 (each, a “Floating Rate Period Interest Payment Date”); and 

(e)    the Regular Record Dates for the Notes shall be the
15th calendar day preceding each Floating Rate Period Interest Payment Date, whether or not a Business Day. 

(f)    the Notes shall be issued on June 19, 2018 (the “Issue Date”); 

(g)    principal of, and any interest on, the Notes shall be paid to the Holder through the Agent in its
capacity as Paying Agent, having offices in New York City, New York; 
 (h)    the Notes shall not be
redeemable except as provided in Article Eleven of the Base Indenture, as amended by Section 4.01 of this Supplemental Indenture. The Notes shall not be redeemable at the option of the Holders at any time. Notwithstanding anything to the
contrary in the Indenture or the Notes, including Section 11.01 of the Base Indenture, the Company may only redeem or repurchase the Notes prior to the Maturity, as applicable, pursuant to Article Eleven of the Base Indenture if the Company has
obtained any Relevant Supervisory Consent; 
 (i)    the Notes are not issued as Discount Debt Securities
or as Indexed Securities and are not subject to a Solvency Condition; 
 (j)    the Company shall have no
obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision; 

(k)    the Notes shall be issued only in denominations of $200,000 and integral multiples of $1,000 in
excess thereof; 

  
 8 

 (l)    the Notes shall be denominated in Dollars; 

(m)    the payment of principal of, and interest on, the Notes shall be payable only in the coin or
currency in which the Notes are denominated which, pursuant to clause (k) above, shall be Dollars; 

(n)    the Notes shall not be converted into or exchanged at the option of the Company or otherwise for
stock or other securities of the Company pursuant to Article Twelve of the Base Indenture; 
 (o)    the
Notes shall be issued in the form of one or more global securities in registered form, without coupons attached, and the initial Holder with respect to each such global security shall be Cede & Co., as nominee of DTC; 

(p)    except in limited circumstances, the Notes will not be issued in definitive form; 

(q)    the form of Notes shall be evidenced by one or more global securities in registered form
substantially in the form of Exhibit A to this Supplemental Indenture; 
 (r)    to the fullest extent
permitted by law, the Holders and the Trustee, in respect of any claims of such Holders to payment of any principal, premium or interest in respect of the Notes, by their acceptance of the Notes, shall be deemed to have waived any
right of set-off or counterclaim that such Holders or, as the case may be, the Trustee in such respect, might otherwise have; and 

(s)    members of the HSBC Group other than the Company may purchase or otherwise acquire any of the Notes
then Outstanding at the same or differing prices in the open market, negotiated transactions or otherwise without giving prior notice to or obtaining any consent from Holders, in accordance with the Relevant Rules and, if required, subject to
obtaining any Relevant Supervisory Consent. 
 ARTICLE 3 

INTEREST CALCULATION IN RESPECT OF THE NOTES 

SECTION 3.01.    Interest Rate on the Notes. 

(a)    Fixed Rate Period 

(i)    Interest on the Notes during the Fixed Rate Period shall be calculated on the basis of twelve 30-day months or, in the case of an incomplete month, the actual number of days elapsed, in each case assuming a 360-day year. 

(ii)    If any scheduled Fixed Rate Period Interest Payment Date is not a Business Day, such Fixed Rate
Period Interest Payment Date shall be postponed to the next day that is a Business Day, but interest on that payment shall not accrue during the period from and after the scheduled Fixed Rate Period Interest Payment Date. 

(b)    Floating Rate Period 

(i)    During the Floating Rate Period, the interest rate on the Notes shall be equal to LIBOR, as
determined by the Calculation Agent on the applicable Floating Rate Period Interest Determination Date, plus 1.53455% per annum (the “Floating Rate Period Margin”). 

  
 9 

 (ii)    During the Floating Rate Period, the interest rate
on the Notes shall be reset quarterly on each Floating Rate Period Interest Reset Date. 

(iii)    Notwithstanding Section 3.10 of the Base Indenture, interest during the Floating Rate Period
shall be calculated on the basis of the actual number of days in each Floating Rate Interest Period, assuming a 360-day year. 

(iv)    Notwithstanding Section 1.13 of the Base Indenture, if any scheduled Floating Rate Period
Interest Reset Date or Floating Rate Period Interest Payment Date (other than the Maturity) is not a Business Day, such Floating Rate Period Interest Reset Date or Floating Rate Period Interest Payment Date shall be postponed to the next day that is
a Business Day; provided that if that Business Day falls in the next succeeding calendar month, such Floating Rate Period Interest Reset Date or Floating Rate Period Interest Payment Date shall be the immediately preceding Business Day. If
any such Floating Rate Period Interest Payment Date (other than the Maturity) is postponed or brought forward as described above, the payment of interest due on such postponed or brought forward Floating Rate Period Interest Payment Date shall
include interest accrued to but excluding such postponed or brought forward Floating Rate Period Interest Payment Date. If the scheduled Maturity or date of redemption or repayment of the Notes is not a Business Day, the Company may pay interest and
principal on the next succeeding Business Day, but interest on that payment shall not accrue during the period from and after the scheduled Maturity or date of redemption or repayment of the Notes. 

(v)    The interest rate on the Notes during the applicable Floating Rate Interest Period shall in no
event be higher than the maximum rate permitted by law or lower than 0% per annum. 

SECTION 3.02.    Calculation Agent. 

(a)    LIBOR shall be determined by the Calculation Agent in accordance with the following provisions: 

(i)    With respect to any Floating Rate Period Interest Determination Date, LIBOR shall be the rate
(expressed as a percentage per annum) for deposits in Dollars having a maturity of three months commencing on the related Floating Rate Period Interest Reset Date that appears on Reuters Page “LIBOR01” (or such other page as may replace
such page on Reuters or such other information service or source, in each case, as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) (the “Relevant
Screen Page”) as of 11:00 a.m., London time, on that Floating Rate Period Interest Determination Date. If no such rate appears, then LIBOR, in respect of that Floating Rate Period Interest Determination Date, shall be determined in
accordance with the provisions described in (ii) and (iii) below; and 
 (ii)    With respect to a
Floating Rate Period Interest Determination Date on which no rate appears on the Relevant Screen Page, subject to the provisions described in (iii) below, the Calculation Agent shall request the principal London offices of each of four major
reference banks in the London interbank market (which may include affiliates of the underwriters), as selected and identified by the Company (the “London Reference Banks”), to provide its offered quotation (expressed as a percentage
per annum) for deposits in Dollars for the period of three months, commencing on the related Floating Rate Period Interest Reset Date, to prime banks in the London interbank market at 

  
 10 

 
approximately 11:00 a.m., London time, on that Floating Rate Period Interest Determination Date, and in a principal amount that is representative for a single transaction in Dollars in that
market at that time. If at least two quotations are provided, then LIBOR on that Floating Rate Period Interest Determination Date shall be the arithmetic mean of those quotations. If fewer than two quotations are provided, then LIBOR on the Floating
Rate Period Interest Determination Date shall be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in the City of New York, on the Floating Rate Period Interest Determination Date by three major banks in the City of
New York (which may include affiliates of the underwriters), as selected and identified by the Company (the “New York Reference Banks” and, together with the London Reference Banks, the “Reference Banks”), for
loans in Dollars to leading European banks, for a period of three months, commencing on the related Floating Rate Period Interest Reset Date, and in a principal amount that is representative for a single transaction in Dollars in that market at that
time. If at least two such rates are so provided, LIBOR on the Floating Rate Period Interest Determination Date shall be the arithmetic mean of such rates. If fewer than two such rates are so provided, LIBOR on the Floating Rate Period Interest
Determination Date shall be LIBOR in effect with respect to the immediately preceding Floating Rate Period Interest Determination Date or, in the case of the Floating Rate Period Interest Determination Date prior to the first Floating Rate Period
Interest Reset Date, the Initial Interest Rate. 
 (iii)    Notwithstanding clause (ii) above, with
respect to a Floating Rate Period Interest Determination Date on which no rate appears on the Relevant Screen Page, if the Company (in consultation with the Calculation Agent) determines that LIBOR has ceased to be published on the Relevant Screen
Page as a result of LIBOR ceasing to be calculated or administered for publication thereon, the Company shall use reasonable efforts to appoint an Independent Financial Adviser to determine the Alternative Base Rate and the Alternative Screen Page
by no later than five Business Days prior to the Floating Rate Period Interest Determination Date relating to the next succeeding Floating Rate Interest Period (the “Floating Rate Period Interest Determination
Cut-off Date”). If the Company is unable to appoint an Independent Financial Adviser, or if the Independent Financial Adviser fails to determine the Alternative Base Rate and the Alternative Screen
Page prior to the Floating Rate Period Interest Determination Cut-off Date, the Company shall determine the Alternative Base Rate and the Alternative Screen Page for such Floating Rate Interest Period;
provided that if the Company does not determine the Alternative Base Rate and the Alternative Screen Page prior to the Floating Rate Period Interest Determination Date for such Floating Rate Interest Period, the interest rate for such
Floating Rate Interest Period shall be equal to the interest rate in effect for the immediately preceding Floating Rate Interest Period or, in the case of the first Floating Rate Interest Period, the Initial Interest Rate. 

(b)    If the Independent Financial Adviser or the Company determines the Alternative Base Rate, the
Independent Financial Adviser or the Company, as applicable, may also, following consultation with the Calculation Agent, make changes to the day count fraction, the business day convention, the definition of Business Day, the remaining Floating
Rate Period Interest Determination Dates and any method for obtaining the substitute or successor base rate if the Alternative Base Rate or the Alternative Screen Page is unavailable on the relevant Floating Rate Period Interest Determination Date
or otherwise, in each case in order to follow market practice, as well as any other changes (including to the Floating Rate Period Margin) that the Company, following consultation with the Independent Financial Adviser (if appointed), determines in
good faith are reasonably necessary to ensure the proper 

  
 11 

 
operation of the Alternative Base Rate, as well as the comparability of the interest rate determined by reference to the Alternative Base Rate to the interest rate determined by reference to
LIBOR (the “Floating Rate Period Calculation Changes”). Any Floating Rate Period Calculation Changes shall apply to the Notes for all future Floating Rate Interest Periods. 

(c)    The Company shall promptly give notice of the determination of the Alternative Base Rate, the
Alternative Screen Page and any Floating Rate Period Calculation Changes to the Trustee, the Paying Agent, the Calculation Agent and the noteholders; provided that failure to provide such notice shall have no impact on the effectiveness of,
or otherwise invalidate, any such determination. 
 (d)    All percentages resulting from any calculation
of any interest rate on the Notes shall be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upward, and all Dollars
amounts shall be rounded to the nearest cent, with one-half cent being rounded upward. 

(e)    All determinations and any calculations made by the Calculation Agent for the purposes of
calculating the applicable interest on the Notes shall be conclusive and binding on the Holders, the Company, the Trustee and the Paying Agent, absent manifest error. The Calculation Agent shall not be responsible to the Company, the Holders or any
third party for any failure of the Reference Banks to provide quotations as requested of them or as a result of the Calculation Agent having acted on any quotation or other information given by any Reference Bank which subsequently may be found to
be incorrect or inaccurate in any way. 
 (f)    By its acquisition of the Notes, each Holder (which, for
these purposes, includes each beneficial owner) (i) acknowledges, accepts, consents and agrees to be bound by the Independent Financial Adviser’s or the Company’s determination of the Alternative Base Rate, the Alternative Screen Page
and any Floating Rate Period Calculation Changes, including as may occur without any prior notice from the Company and without the need for us to obtain any further consent from such Holder, (ii) waives any and all claims, in law and/or in
equity, against the Trustee, the Paying Agent and the Calculation Agent for, agrees not to initiate a suit against the Trustee, the Paying Agent and the Calculation Agent in respect of, and agree that none of the Trustee, the Paying Agent and the
Calculation Agent shall be liable for, the determination of or the failure to determine any Alternative Base Rate, the Alternative Screen Page and any Floating Rate Period Calculation Changes and any losses suffered in connection therewith and
(iii) agrees that none of the Trustee, the Paying Agent and the Calculation Agent shall have any obligation to determine any Alternative Base Rate, the Alternative Screen Page and any Floating Rate Period Calculation Changes (including any
adjustments thereto), including in the event of any failure by the Company to determine any Alternative Base Rate, the Alternative Screen Page and any Floating Rate Period Calculation Changes. The Trustee shall be entitled to rely on this deemed
consent in connection with any supplemental indenture and/or amendment to the Indenture or the Notes necessary to effectuate any Alternative Base Rate, Alternative Screen Page or Floating Rate Period Calculation Changes. 

  
 12 

 ARTICLE 4 

AMENDMENTS TO THE BASE INDENTURE 

APPLICABLE TO THE NOTES ONLY 

SECTION 4.01.    Redemption of Debt Securities. With respect to the Notes only, Article Eleven of the
Base Indenture is amended by adding Section 11.09, which shall read as follows: 
 Section 11.09.
    Optional Redemption of the Notes. The Company may redeem the Notes in whole (but not in part) in its sole discretion on June 19, 2028 (the “Optional Redemption Date”). The redemption price
shall be equal to 100% of their principal amount plus any accrued and unpaid interest to (but excluding) the Optional Redemption Date. 

SECTION 4.02.    Events of Default and Defaults. With respect to the Notes only, Article Five of the
Base Indenture is amended by amending and restating Section 5.01 in its entirety, which shall read as follows: 

Section 5.01.     Events of Default and Defaults. 

(i)    Prior to a Loss Absorption Disqualification Event. On the Issue Date, and for so long as no
Loss Absorption Disqualification Event has occurred, an “Event of Default” with respect to the Notes means any one of the following events: 

(A)    an order is made by an English court which is not successfully appealed within 30 days after the
date such order was made for winding up of the Company other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency; 

(B)    an effective resolution is validly adopted by the Company’s shareholders for winding up of the
Company other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency; 

(C)    failure to pay principal or premium, if any, on the Notes at maturity, and such default continues
for a period of 30 days; or 
 (D)    failure to pay any interest on the Notes when due and payable,
which failure continues for 30 days. 
 (ii)    After a Loss Absorption Disqualification Event. On
and after the date a Loss Absorption Disqualification Event has occurred, an “Event of Default” with respect to the Notes means any one of the following events: 

(A)    an order is made by an English court which is not successfully appealed within 30 days after the
date such order was made for winding up of the Company other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency; or 

(B)    an effective resolution is validly adopted by the Company’s shareholders for winding up of the
Company other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency. 

On and after the date a Loss Absorption Disqualification Event has occurred, a “Default” with respect to the Notes
means any one of the following events: 
 (A)    failure to pay principal or premium, if any, on the
Notes at maturity, and such default continues for a period of 30 days; or 
 (B)    failure to pay any
interest on the Notes when due and payable, which failure continues for 30 days. 

  
 13 

 If a Default occurs, the Trustee may institute proceedings in England (but not
elsewhere) for the Company’s winding-up; provided that the Trustee may not, upon the occurrence of a Default, accelerate the maturity of any Notes then Outstanding, unless an Event of Default has
occurred and is continuing. 
 Notwithstanding the foregoing, failure to make any payment in respect of the Notes shall not
be a Default in respect of the Notes if such payment is withheld or refused: 
 (A)    in order to comply
with any fiscal or other law or regulation or with the order of any court of competent jurisdiction, in each case applicable to such payment; or 

(B)    in case of doubt as to the validity or applicability of any such law, regulation or order, in
accordance with advice given as to such validity or applicability at any time during the said grace period of 30 days by independent legal advisers acceptable to the Trustee; 

provided, however, that the Trustee may, by notice to the Company, require the Company to take such action (including but not
limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an opinion of counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to
resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such resolution determines that the relevant payment
can be made without violating any applicable law, regulation or order then the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of the relevant grace period of 30 days after the Trustee
gives written notice to the Company informing the Company of such resolution. 
 (iii)    Loss
Absorption Disqualification Event. A “Loss Absorption Disqualification Event” shall be deemed to have occurred if clause (C) or (D) of the definition of Event of Default (as such term is defined in clause (i) of this
Section 5.01) has caused or is likely to cause the Notes to be fully or partially ineligible to meet the Company’s minimum requirements for (x) eligible liabilities and/or (y) loss absorbing capacity instruments, in each case
pursuant to the relevant Loss Absorption Regulations, as a result of any: 
 (A)    Loss Absorption
Regulation becoming effective on or after the Issue Date; or 
 (B)    amendment to, or change in, any
Loss Absorption Regulation, or any change in the application or official interpretation of any Loss Absorption Regulation, in any such case becoming effective on or after the Issue Date. 

As soon as practicable after the occurrence of a Loss Absorption Disqualification Event (but no later than 30 days after the
occurrence thereof), the Company shall: 
 (A)    give notice thereof to the Trustee and the Paying Agent
directly and to the Holders via DTC (or, if the Notes are held in definitive form, to the Holders at their addresses shown on the register for the Notes) specifying (x) that a Loss Absorption Disqualification Event has occurred, (y) the
date of the occurrence of the Loss Absorption Disqualification Event and (z) the Events of Default and Defaults specified in clause (ii) of this Section 5.01 are substituted in full for the Events of Default specified in clause (i)

  
 14 

 
of this Section 5.01 and shall be the applicable Events of Default and Defaults under the Indenture and the Notes. The date on which the notice is dispatched by the Company to DTC (or, if
the Notes are held in definitive form, to the Trustee) shall be the date on which such notice is deemed to have been given; and 

(B)    deliver to the Trustee an Officer’s Certificate stating that a Loss Absorption Disqualification
Event has occurred. For these purposes, the Trustee and the Agent shall accept and are entitled to conclusively rely upon such Officer’s Certificate without further enquiry as sufficient evidence of the existence of such circumstances and such
Officer’s Certificate shall be conclusive and binding on the Holders without the need for any further consent on their part. 

(iv)    Agreements with Respect to the Variation of Events of Default and Defaults. 

By its acquisition of the Notes, each Holder (which, for these purposes, includes each beneficial owner) acknowledges, accepts,
consents and agrees to be bound by the variation of the Events of Default and Defaults on the occurrence of a Loss Absorption Disqualification Event (including as may occur without any prior notice from the Company), without the need for the Company
to obtain any further consent from such Holder. 
 By its acquisition of the Notes, each Holder (which, for these purposes,
includes each beneficial owner), to the extent permitted by the Trust Indenture Act, will waive any and all claims, in law and/or in equity, against the Trustee for, agree not to initiate a suit against the Trustee in respect of, and agree that the
Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in connection with the variation of the Events of Default and Defaults on the occurrence of a Loss Absorption Disqualification Event. 

ARTICLE 5 

MISCELLANEOUS 

SECTION 5.01.    Effect of this Supplemental Indenture; Ratification and Integral Part. This
Supplemental Indenture shall become effective upon its execution and delivery. 
 Except as hereby amended, the Base Indenture is in all
respects ratified and confirmed and all the terms, provisions and conditions thereof (including any prior amendments thereto) shall be, and remain in, full force and effect, including, without limitation, Section 4.06 of the first supplemental
indenture dated March 8, 2016 (amending the Base Indenture to add Section 15) and Section 4.01 of the second supplemental indenture dated May 25, 2016 (amending Section 6.07 of the Base Indenture). This Supplemental
Indenture shall be deemed an integral part of the Base Indenture in the manner and to the extent herein and therein provided. 

SECTION 5.02.    Priority. This Supplemental Indenture shall be deemed part of the Base Indenture in the
manner and to the extent herein and therein provided. The provisions of this Supplemental Indenture shall, with respect to the Notes and as otherwise provided herein and subject to the terms hereof, supersede the provisions of the Base Indenture to
the extent the Base Indenture is inconsistent herewith. 
 SECTION 5.03.    Successors and Assigns. All
covenants and agreements in the Base Indenture, as supplemented and amended by this Supplemental Indenture, by the Company shall bind its successors and assigns, whether so expressed or not. 

  
 15 

 SECTION 5.04.    Subsequent Holders’ Agreement.
Any Holder (which, for these purposes, includes each beneficial owner of the Notes) that acquires the Notes in the secondary market and any successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives
of any Holder or beneficial owner of the Notes shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the Holders or beneficial owners of the Notes that acquire the Debt
Securities upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Notes related to the UK Bail-in Power,
LIBOR and the variation of the Events of Default and Defaults on the occurrence of a Loss Absorption Disqualification Event. 

SECTION 5.05.    Compliance. The Agent shall be entitled to take any action or to refuse to take any action
which the Agent regards as necessary for the Agent to comply with any applicable law, regulation or fiscal requirement, court order, or the rules, operating procedures or market practice of any relevant stock exchange or other market or clearing
system. 
 SECTION 5.06.    Relation to Calculation Agent Agreement. In the event of any conflict between
the Indenture and the Calculation Agent Agreement relating to the rights or obligations of the Calculation Agent in the Indenture in connection with the calculation of the interest rate on the Notes during the Floating Rate Period, the relevant
terms of the Calculation Agent Agreement shall govern such rights and obligations. 
 SECTION 5.07.    Governing
Law. This Supplemental Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York. 

SECTION 5.08.    Counterparts. This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. 

SECTION 5.09.    Entire Agreement. This Supplemental Indenture constitutes the entire agreement of the parties
hereto with respect to the Notes and the amendments to the Base Indenture set forth herein. 

  
 16 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first stated above. 
  

			
	 HSBC HOLDINGS PLC, as Issuer

		
	By:	 	 /s/ Eddy Okhuijsen

	Name:	 	Eddy Okhuijsen
	Title:	 	Group Corporate Treasurer
	
	THE BANK OF NEW YORK MELLON,
	 LONDON BRANCH, as Trustee

		
	By:	 	  

	Name:	 	
	Title:	 	
	
	 HSBC BANK USA, NATIONAL ASSOCIATION, as Paying Agent, Registrar and Calculation
Agent

		
	By:	 	  

	Name:	 	
	Title:	 	

 [Signature Page to the Seventh Supplemental Indenture] 

 EXHIBIT A 

FORM OF 4.583% FIXED RATE/FLOATING RATE GLOBAL SECURITY 

No. [●] 
  

			
		  	CUSIP No.:404280 BT5
		  	ISIN: US404280BT50

 THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
 BY ITS ACQUISITION OF THE DEBT SECURITIES REPRESENTED BY
THIS GLOBAL SECURITY, EACH HOLDER (WHICH, FOR THESE PURPOSES, INCLUDES EACH BENEFICIAL OWNER OF THE DEBT SECURITIES) ACKNOWLEDGES, ACCEPTS, CONSENTS AND AGREES, NOTWITHSTANDING ANY OTHER TERM OF THE DEBT SECURITIES, THE INDENTURE OR ANY OTHER
AGREEMENTS, ARRANGEMENTS OR UNDERSTANDINGS BETWEEN THE ISSUER AND ANY HOLDER, TO BE BOUND BY (A) THE EFFECT OF THE EXERCISE OF ANY UK BAIL-IN POWER BY THE RELEVANT UK RESOLUTION AUTHORITY THAT MAY INCLUDE
AND RESULT IN ANY OF THE FOLLOWING, OR SOME COMBINATION THEREOF: (I) THE REDUCTION OF ALL, OR A PORTION, OF THE AMOUNTS DUE (AS DEFINED ON THE REVERSE OF THIS GLOBAL SECURITY); (II) THE CONVERSION OF ALL, OR A PORTION, OF THE AMOUNTS DUE INTO
THE ISSUER’S OR ANOTHER PERSON’S ORDINARY SHARES, OTHER SECURITIES OR OTHER OBLIGATIONS (AND THE ISSUE TO, OR CONFERRAL ON, THE HOLDER OF SUCH ORDINARY SHARES, OTHER SECURITIES OR OTHER OBLIGATIONS), INCLUDING BY MEANS OF AN AMENDMENT,
MODIFICATION OR VARIATION OF THE TERMS OF THE DEBT SECURITIES OR THE INDENTURE; (III) THE CANCELLATION OF THE DEBT SECURITIES; AND/OR (IV) THE AMENDMENT OR ALTERATION OF THE MATURITY OF THE DEBT SECURITIES OR AMENDMENT OF THE AMOUNT OF
INTEREST PAYABLE ON THE DEBT SECURITIES, OR THE INTEREST PAYMENT DATES, INCLUDING BY SUSPENDING PAYMENT FOR A TEMPORARY PERIOD; AND (B) THE VARIATION OF THE TERMS OF THE DEBT SECURITIES OR THE INDENTURE, IF NECESSARY, TO GIVE EFFECT TO THE
EXERCISE OF ANY UK BAIL-IN POWER BY THE RELEVANT UK RESOLUTION AUTHORITY. 
 BY ITS ACQUISITION OF THE DEBT
SECURITIES REPRESENTED BY THIS GLOBAL SECURITY, EACH HOLDER (WHICH, FOR THESE PURPOSES, INCLUDES EACH BENEFICIAL OWNER OF THE DEBT SECURITIES) ACKNOWLEDGES, ACCEPTS, CONSENTS AND AGREES TO BE BOUND BY THE VARIATION OF THE EVENTS OF DEFAULT AND
DEFAULTS ON THE OCCURRENCE OF A LOSS ABSORPTION DISQUALIFICATION EVENT (INCLUDING AS MAY OCCUR WITHOUT ANY PRIOR NOTICE FROM THE ISSUER), WITHOUT THE NEED FOR THE ISSUER TO OBTAIN ANY FURTHER CONSENT FROM SUCH HOLDER. 

[Signature Page to the Seventh Supplemental Indenture] 

 GLOBAL SECURITY 

HSBC Holdings plc 
 US$[●]

 4.583% FIXED RATE/FLOATING RATE SENIOR UNSECURED NOTES DUE 2029 

This is a Global Security in respect of a duly authorized issue by HSBC Holdings plc (the “Issuer,” which term includes any
successor Person under the Indenture hereinafter referred to) of debt securities, designated as specified in the title hereof, in the aggregate face amount of US$[●] (the “Debt Securities”). 

The Issuer, for value received, hereby promises to pay CEDE & CO., or registered assigns on June 19, 2029 or on such earlier
date as this Global Security may be redeemed (“Maturity”), the principal amount hereof and to pay interest on the said principal amount: 

(1)    from June 19, 2018 (the “Issue Date”) or the most recent interest payment date during the Fixed Rate
Period on which interest has been paid or duly provided for to (but excluding) June 19, 2028, semi-annually in arrear on June 19 and December 19 in each year, beginning on December 19, 2018 (each, a “Fixed Rate Interest
Payment Date”), at a rate of 4.583% per annum (the “Initial Interest Rate”); and 
 (2)    from (and
including) June 19, 2028 or the most recent interest payment date during the Floating Rate Period on which interest has been paid or duly provided for to (but excluding) Maturity, quarterly in arrear on March 19, June 19,
September 19 and December 19, beginning on September 19, 2028 (each, a “Floating Rate Period Interest Payment Date”), at a floating rate equal to the three-month Dollar London interbank offered rate (“LIBOR”), as
determined by the Calculation Agent on the applicable Floating Rate Period Interest Determination Date, plus 1.53455% per annum. The interest rate during the Floating Rate Period on this Global Security shall be reset quarterly on each Floating Rate
Period Interest Reset Date. 
 “Fixed Rate Period” means the period from (and including) June 19, 2018 to (but excluding)
June 19, 2028. 
 “Floating Rate Period” means the period from (and including) June 19, 2028 to (but excluding) Maturity.

 “Interest Payment Date” means either a Fixed Rate Interest Payment Date or a Floating Rate Period Interest Payment Date, as
applicable. 
 LIBOR shall be determined by the Calculation Agent in accordance with the Indenture and the following provisions: 

(1)    With respect to any Floating Rate Period Interest Determination Date, LIBOR shall be the rate (expressed as a
percentage per annum) for deposits in Dollars having a maturity of three months commencing on the related Floating Rate Period Interest Reset Date that appears on Reuters Page “LIBOR01” (or such other page as may replace such page on
Reuters or such other information service or source, in each case, as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) (the “Relevant Screen Page”)
as of 11:00 a.m., London time, on that Floating Rate Period Interest Determination Date. If no such rate appears, then LIBOR, in respect of that Floating Rate Period Interest Determination Date, shall be determined in accordance with the provisions
described in (2) and (3) below. 

  
 A-2 

 (2)    With respect to a Floating Rate Period Interest Determination Date on
which no rate appears on the Relevant Screen Page, subject to the provisions described in (3) below, the Calculation Agent shall request the principal London offices of each of four major reference banks in the London interbank market (which
may include affiliates of the underwriters), as selected and identified by the Issuer (the “London Reference Banks”), to provide its offered quotation (expressed as a percentage per annum) for deposits in Dollars for the period of three
months, commencing on the related Floating Rate Period Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on that Floating Rate Period Interest Determination Date, and in a principal amount
that is representative for a single transaction in Dollars in that market at that time. If at least two quotations are provided, then LIBOR on that Floating Rate Period Interest Determination Date shall be the arithmetic mean of those quotations. If
fewer than two quotations are provided, then LIBOR on the Floating Rate Period Interest Determination Date shall be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in the City of New York, on the Floating Rate Period Interest
Determination Date by three major banks in the City of New York (which may include affiliates of the underwriters), as selected and identified by the Issuer (together with the London Reference Banks, the “Reference Banks”), for loans in
Dollars to leading European banks, for a period of three months, commencing on the related Floating Rate Period Interest Reset Date, and in a principal amount that is representative for a single transaction in Dollars in that market at that time. If
at least two such rates are so provided, LIBOR on the Floating Rate Period Interest Determination Date shall be the arithmetic mean of such rates. If fewer than two such rates are so provided, LIBOR on the Floating Rate Period Interest Determination
Date shall be LIBOR in effect with respect to the immediately preceding Floating Rate Period Interest Determination Date or, in the case of the Floating Rate Period Interest Determination Date prior to the first Floating Rate Period Interest Reset
Date, the Initial Interest Rate. 
 (3)    Notwithstanding clause (2) above, with respect to a Floating Rate Period
Interest Determination Date on which no rate appears on the Relevant Screen Page, if the Issuer (in consultation with the Calculation Agent) determines that LIBOR has ceased to be published on the Relevant Screen Page as a result of LIBOR ceasing to
be calculated or administered for publication thereon, the Issuer shall use reasonable efforts to appoint an Independent Financial Adviser to determine the Alternative Base Rate and the Alternative Screen Page by no later than five Business Days
prior to the Floating Rate Period Interest Determination Date relating to the next succeeding Floating Rate Period (the “Floating Rate Period Interest Determination Cut-off Date”). If the Issuer is
unable to appoint an Independent Financial Adviser, or if the Independent Financial Adviser fails to determine the Alternative Base Rate and the Alternative Screen Page prior to the Floating Rate Period Interest Determination Cut-off Date, the Issuer shall determine the Alternative Base Rate and the Alternative Screen Page for such Floating Rate Period; provided that if the Issuer does not determine the Alternative Base Rate and
the Alternative Screen Page prior to the Floating Rate Period Interest Determination Date for such Floating Rate Period, the interest rate for such Floating Rate Period shall be equal to the interest rate in effect for the immediately preceding
Floating Rate Period or, in the case of the first Floating Rate Period, the Initial Interest Rate. 
 If the Independent Financial Adviser
or the Issuer determines the Alternative Base Rate, the Independent Financial Adviser or the Issuer, as applicable, may also, following consultation with the Calculation Agent, make changes to the day count fraction, the business day convention, the
definition of Business Day, the remaining Floating Rate Period Interest Determination Dates and any method for obtaining the substitute or successor base rate if the Alternative Base Rate or the Alternative Screen Page is unavailable on the relevant
Floating Rate Period Interest Determination Date or otherwise, in each case in order to follow market practice, as well as any other changes (including to the Floating Rate Period 

  
 A-3 

 
Margin) that the Issuer, following consultation with the Independent Financial Adviser (if appointed), determines in good faith are reasonably necessary to ensure the proper operation of the
Alternative Base Rate, as well as the comparability of the interest rate determined by reference to the Alternative Base Rate to the interest rate determined by reference to LIBOR (the “Floating Rate Period Calculation Changes”). Any
Floating Rate Period Calculation Changes shall apply for all future Floating Rate Interest Periods. 
 The Issuer shall promptly give notice
of the determination of the Alternative Base Rate, the Alternative Screen Page and any Floating Rate Period Calculation Changes to the Trustee, the Paying Agent, the Calculation Agent and the Holders; provided that failure to provide such
notice shall have no impact on the effectiveness of, or otherwise invalidate, any such determination. 
 All percentages resulting from any
calculation of any interest rate in respect of this Global Security shall be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point
rounded upward (for example, 9.876545% (or 0.09876545) would be rounded to 9.87655% (or 0.0987655)), and all Dollar amounts shall be rounded to the nearest cent, with one-half cent being rounded upward. 

All determinations and any calculations made by the Calculation Agent for the purposes of calculating the applicable interest on this Global
Security shall be conclusive and binding on the Holders, the Issuer, the Trustee and the Agent, absent manifest error. The Calculation Agent shall not be responsible to the Issuer, the Holders or any third party for any failure of the Reference
Banks to provide quotations as requested of them or as a result of the Calculation Agent having acted on any quotation or other information given by any Reference Bank which subsequently may be found to be incorrect or inaccurate in any way. 

Each Holder of the Debt Securities (which, for these purposes, includes each beneficial owner of the Debt Securities) (i) acknowledges,
accepts, consents and agrees to be bound by the Independent Financial Adviser’s or the Issuer’s determination of the Alternative Base Rate, the Alternative Screen Page and any Floating Rate Period Calculation Changes, including as may
occur without any prior notice from the Issuer and without the need for the Issuer to obtain any further consent from such Holder, (ii) waives any and all claims, in law and/or in equity, against the Trustee, the Paying Agent and the
Calculation Agent for, agrees not to initiate a suit against the Trustee, the Paying Agent and the Calculation Agent in respect of, and agrees that none of the Trustee, the Paying Agent or the Calculation Agent shall be liable for, the determination
of or the failure to determine any Alternative Base Rate, the Alternative Screen Page, and any Floating Rate Period Calculation Changes and any losses suffered in connection therewith and (iii) agrees that none of the Trustee, the Paying Agent
or the Calculation Agent shall have any obligation to determine any Alternative Base Rate, the Alternative Screen Page and any Floating Rate Period Calculation Changes (including any adjustments thereto), including in the event of any failure by the
Issuer to determine any Alternative Base Rate, the Alternative Screen Page and any Floating Rate Period Calculation Changes. The Trustee shall be entitled to rely on this deemed consent in connection with any supplemental indenture and/or amendment
to the Indenture or the Debt Securities necessary to effectuate any Alternative Base Rate, Alternative Screen Page or Floating Rate Period Calculation Changes. 

“Alternative Base Rate” means the rate that has replaced LIBOR in customary market usage for determining floating interest rates in
respect of bonds denominated in Dollars or, if the Independent Financial Adviser or the Issuer (in consultation with the Calculation Agent and acting in good faith and a commercially reasonable manner), as applicable, determines that there is no
such rate, such other rate as the Independent Financial Adviser or the Issuer (in consultation with the Calculation Agent and acting in good faith and a commercially reasonable manner), as applicable, determines in its or the Issuer’s sole
discretion is most comparable to LIBOR. If the Alternative Base Rate is determined, such Alternative Base Rate shall be the Alternative Base Rate for the remaining Floating Rate Interest Periods. 

  
 A-4 

 “Alternative Screen Page” means the alternative screen page, information service or
source on which the Alternative Base Rate appears (or such other page, information service or source as may replace the alternative screen page, information service or source, in each case, as may be nominated by the person providing or sponsoring
the information appearing on such page for purposes of displaying comparable rates). 
 “Floating Rate Period Interest Determination
Date” means the second London Banking Day preceding the applicable Floating Rate Period Interest Reset Date. 
 “Floating Rate
Period Interest Reset Date” means March 19, June 19, September 19 and December 19, beginning on June 19, 2028. 

“Independent Financial Adviser” means an independent financial institution of international repute or other independent financial
adviser experienced in the international capital markets, in each case appointed by the Issuer at the Issuer’s own expense. 

“London Banking Day” means any day on which dealings in Dollars are transacted in the London interbank market. 

Interest in respect of this Global Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name this Global Security (or one or more Predecessor Global Securities) is registered at the close of business on the Regular Record Date for such interest. 

Payment of interest, if any, in respect of this Global Security may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Register, or by wire transfer or transfer by any other means to an account designated in writing by such Person to the Paying Agent at least 15 days prior to such payment date. 

Any interest in respect of this Global Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holders thereof on the relevant Regular Record Date by virtue of their having been such Holders; and such Defaulted Interest may be paid by the Issuer, at its
election in each case, as provided in Clause (1) or (2) below: 
  

	 	(1)	The Issuer may elect to make payment of such Defaulted Interest to the Persons in whose names this Global Security (or its respective Predecessor Global Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in the manner provided for in the Indenture. 

  

	 	(2)	The Issuer may make payment of any Defaulted Interest on this Global Security in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Global Security may be listed, and
upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. 

  
 A-5 

 All payments made under or with respect to this Global Security shall be paid by the Issuer,
without deduction or withholding for, or on account of, any and all present and future taxes, levies, imposts, duties, charges, fees, deductions or withholdings whatsoever imposed, levied, collected, withheld or assessed by or on behalf of the
United Kingdom or any political subdivision or taxing authority thereof or therein having the power to tax (each, a “Taxing Jurisdiction”), unless required by law. If such deduction or withholding shall at any time be required by the law
of the Taxing Jurisdiction, the Issuer shall pay such additional amounts in respect of any payments of principal or interest on this Global Security (“Additional Amounts”) as may be necessary so that the net amounts (including Additional
Amounts) paid to the Holders, after such deduction or withholding, shall be equal to the respective amounts of principal or interest which the Holders would have been entitled to receive in respect of this Global Security in the absence of such
deduction or withholding, provided that the foregoing shall not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which: (i) would not be payable or due but for the fact that the Holder or the beneficial
owner of this Global Security is domiciled in, or is a national or resident of, or engaging in business or maintaining a permanent establishment or being physically present in, the Taxing Jurisdiction or otherwise has some connection or former
connection with the Taxing Jurisdiction other than the holding or ownership of this Global Security, or the collection of principal or interest payments on, or the enforcement of, this Global Security; (ii) would not be payable or due but for
the fact that this Global Security (x) is presented for payment in the Taxing Jurisdiction or (y) is presented for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent
that the Holder would have been entitled to such Additional Amount on presenting the same for payment at the close of such 30 day period; (iii) would not have been imposed if presentation for payment of this Global Security had been made to a
paying agent other than the paying agent to which the presentation was made; (iv) is imposed in respect of a Holder that is not the sole beneficial owner of the principal or the interest, or a portion of either, or that is a fiduciary or
partnership, but only to the extent that a beneficiary or settlor with respect to the fiduciary, a beneficial owner or member of the partnership would not have been entitled to the payment of an Additional Amount had the beneficiary, settlor,
beneficial owner or member received directly its beneficial or distributive share of the payment; (v) is imposed because of the failure to comply by the Holder or the beneficial owner of this Global Security or the beneficial owner of any
payment on this Global Security with a request from the Issuer addressed to the Holder or the beneficial owner, including a written request from the Issuer related to a claim for relief under any applicable double tax treaty (x) to provide
information concerning the nationality, residence, identity or connection with a taxing jurisdiction of the Holder or the beneficial owner or (y) to make any declaration or other similar claim to satisfy any information or reporting
requirement, if the information or declaration is required or imposed by a statute, treaty, regulation, ruling or administrative practice of the Taxing Jurisdiction as a precondition to exemption from withholding or deduction of all or part of the
tax, duty, assessment or other governmental charge; (vi) is imposed in respect of any estate, inheritance, gift, sale, transfer, personal property, wealth or similar tax, duty, assessment or other governmental charge; or (vii) is imposed
in respect of any combination of the above items. 
 Whenever in this Global Security there is mentioned, in any context, the payment of any
principal or interest on or in respect of any Debt Security or the net proceeds received on the sale or exchange of any Debt Security, such mention shall be deemed to include mention of the payment of Additional Amounts to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made. 
 Upon any exchange of a portion of this Global Security for a definitive Debt Security, the
portion of the principal amount hereof so exchanged shall be endorsed by the Registrar on Schedule A hereto. The principal amount hereof shall be reduced for all purposes by the amount so exchanged and endorsed. 

  
 A-6 

 Reference is hereby made to the further provisions of this Global Security set forth on the
reverse hereof, which further provisions shall for the purposes hereof have the same effect as if set forth at this place. 
 Unless the
certificate of authentication hereon has been executed by the Trustee or an authenticating agent by manual signature, this Global Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purposes. 

  
 A-7 

 IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed under its corporate
seal. 
  

							
		 		 	By:	 	  

		 		 	[●]	 	
			
		 		 	 HSBC Holdings plc,

as Issuer

 Dated: June 19, 2018 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Debt Securities of a series issued under the within-mentioned Indenture. 

 

							
		 		 	By:	 	  

		 		 	[●]	 	
				
	Dated: June 19, 2018	 		 		 	
			
		 		 	 The Bank of New York Mellon, London Branch,

as Trustee

  
 A-8 

 REVERSE OF GLOBAL SECURITY 

US$[●] 
 4.583% FIXED
RATE/FLOATING RATE SENIOR UNSECURED NOTES DUE 2029 
 This Global Security is one of a duly authorized issue of Debt Securities issued and
to be issued in one or more series under and governed by an Indenture dated as of August 26, 2009 (as amended or supplemented from time to time), by and among the Issuer, The Bank of New York Mellon, London Branch, as trustee (the
“Trustee,” which term includes any successor trustee under the Indenture), and HSBC Bank USA, National Association (“HBUS”), as registrar and paying agent (the “Base Indenture”), as amended and supplemented by a Seventh
Supplemental Indenture dated as of June 19, 2018 (the “Seventh Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), among the Issuer, the Trustee and HBUS, as paying agent, registrar and
calculation agent (the “Agent”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the
Trustee, the Holders and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. 
 Under the terms of
the Indenture, the Debt Securities may be redeemed, as a whole but not in part, at the Issuer’s option, on not less than 30 nor more than 60 days’ notice, at any time at a redemption price equal to the principal amount thereof, together
with accrued interest, if any, to the date fixed for redemption, if, at any time, the Issuer determines that: 
 (a) in
making payment under the Debt Securities in respect of principal (or premium, if any) or interest the Issuer has or shall or would become obligated to pay Additional Amounts as provided in the Indenture and in this Global Security provided such
obligation results from a change in or amendment to the laws of the Taxing Jurisdiction, or any change in the official application or interpretation of such laws (including a decision of any court or tribunal), or any change in, or in the official
application or interpretation of, or execution of, or amendment to, any treaty or treaties affecting taxation to which the United Kingdom is a party, which change, amendment or execution becomes effective after the Issue Date; or 

(b) the payment of interest in respect of the Debt Securities has become or will or would be treated as a
“distribution” within the meaning of Section 1000 of the Corporation Tax Act 2010 of the United Kingdom (or any statutory modification or reenactment thereof for the time being) as a result of a change in or amendment to the laws of
the Taxing Jurisdiction, or any change in the official application or interpretation of such laws, including a decision of any court, which change or amendment becomes effective on or after the Issue Date; provided, however that, in
the case of (a) above, no notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Amounts were a payment in respect of the Debt Securities then due. 

Under the terms of the Indenture, the Debt Securities may be redeemed, in whole but not in part, at the Issuer’s sole discretion, on not
less than 30 nor more than 60 days’ notice, on June 19, 2028 (the “Optional Redemption Date”). The redemption price shall be equal to 100% of their principal amount plus any accrued and unpaid interest to (but excluding) the
Optional Redemption Date. 
 Notwithstanding anything to the contrary in the Indenture, the Issuer may only redeem or repurchase the Debt
Securities prior to Maturity pursuant to the Indenture if the Issuer has obtained any Relevant Supervisory Consent. 

  
 A-9 

 On the Issue Date, and for so long as no Loss Absorption Disqualification Event has occurred, an
“Event of Default” with respect to the Notes means any one of the following events: (A) an order is made by an English court which is not successfully appealed within 30 days after the date such order was made for winding up of the
Issuer other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency; (B) an effective resolution is validly adopted by the Issuer’s shareholders for winding up of the Issuer other than in
connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency; (C) failure to pay principal or premium, if any, on the Debt Securities at Maturity, and such default continues for a period of 30 days; or
(D) failure to pay any interest on the Debt Securities when due and payable, which failure continues for 30 days. 
 On and after the
date a Loss Absorption Disqualification Event has occurred, an “Event of Default” with respect to the Debt Securities means any one of the following events: (A) an order is made by an English court which is not successfully appealed
within 30 days after the date such order was made for winding up of the Issuer other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency; or (B) an effective resolution is validly adopted by
the Issuer’s shareholders for winding up of the Issuer other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency. 

On and after the date a Loss Absorption Disqualification Event has occurred, a “Default” with respect to the Debt Securities means
any one of the following events: (A) failure to pay principal or premium, if any, on the Debt Securities at Maturity, and such default continues for a period of 30 days; or (B) failure to pay any interest on the Debt Securities when due
and payable, which failure continues for 30 days. 
 If a Default occurs, the Trustee may institute proceedings in England (but not
elsewhere) for the Issuer’s winding-up; provided that the Trustee may not, upon the occurrence of a Default, accelerate the maturity of any Debt Securities then Outstanding, unless an Event of
Default has occurred and is continuing. 
 Notwithstanding the immediately preceding two paragraphs, failure to make any payment in respect
of the Debt Securities shall not be a Default in respect of the Debt Securities if such payment is withheld or refused: (A) in order to comply with any fiscal or other law or regulation or with the order of any court of competent jurisdiction,
in each case applicable to such payment; or (B) in case of doubt as to the validity or applicability of any such law, regulation or order, in accordance with advice given as to such validity or applicability at any time during the said grace
period of 30 days by independent legal advisers acceptable to the Trustee; provided, however, that the Trustee may, by notice to the Issuer, require the Issuer to take such action (including but not limited to proceedings for a
declaration by a court of competent jurisdiction) as the Trustee may be advised in an opinion of counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case
the Issuer shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such resolution determines that the relevant payment can be made without violating any
applicable law, regulation or order then the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of the relevant grace period of 30 days after the Trustee gives written notice to the Issuer
informing the Issuer of such resolution. 
 A “Loss Absorption Disqualification Event” shall be deemed to have occurred if clause
(C) or (D) of the definition of Event of Default (as such term is defined on the Issue Date) has caused or is likely to cause the Debt Securities to be fully or partially ineligible to meet the Issuer’s minimum requirements for
(x) eligible liabilities and/or (y) loss absorbing capacity instruments, in each case pursuant to the relevant Loss Absorption Regulations, as a result of any: (1) Loss Absorption Regulation becoming effective on or

  
 A-10 

 
after the Issue Date; or (2) amendment to, or change in, any Loss Absorption Regulation, or any change in the application or official interpretation of any Loss Absorption Regulation, in any
such case becoming effective on or after the Issue Date. 
 “Loss Absorption Regulations” means, at any time, the laws,
regulations, requirements, guidelines, rules, standards and policies from time to time relating to minimum requirements for own funds and eligible liabilities and/or loss absorbing capacity instruments in effect in the UK, including, without
limitation to the generality of the foregoing, any delegated or implementing acts (such as implementing or regulatory technical standards) adopted by the European Commission and applicable to the Issuer from time to time (whether or not such
requirements, guidelines or policies are applied generally or specifically to the Issuer or to the Issuer and any of its holding or subsidiary companies or any subsidiary of any such holding company). 

By its acquisition of the Debt Securities represented by this Global Security, each Holder (which, for these purposes, includes each
beneficial owner of the Debt Securities) acknowledges, accepts, consents and agrees to be bound by the variation of the Events of Default and Defaults on the occurrence of a Loss Absorption Disqualification Event (including as may occur without any
prior notice from the Issuer), without the need for the Issuer to obtain any further consent from such Holder. 
 If an Event of Default
with respect to the Debt Securities of this series shall occur and be continuing, the principal of all of the Debt Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture and this Global
Security. The Indenture provides that in certain circumstances such declaration and its consequences may be rescinded and annulled by the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of such series. If a
Default with respect to Debt Securities of this series occurs and is continuing, the Trustee may pursue certain remedies as set forth in the Indenture. The Holders of not less than a majority in aggregate principal amount of the Outstanding Debt
Securities of this series may on behalf of all the Holders waive any past Event of Default or any Default under the Indenture or the Debt Securities and its consequences except a default (i) in the payment of principal of (or premium, if any,
on) or any installment of interest on any of the Debt Securities or (ii) in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the Holder of this Debt Security, and any such consent
or waiver shall bind every future Holder of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this
Debt Security or such other Debt Securities. 
 The Indenture contains provisions permitting the Issuer and the Trustee (i) without the
consent of the Holders of any Debt Securities issued under the Indenture to execute one or more supplemental indentures for certain enumerated purposes, such as to cure any ambiguity or to secure the Debt Securities, and (ii) with the consent
of the Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of each series of Debt Securities affected thereby, to execute supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of Holders under the Indenture; provided that, with respect to certain enumerated provisions, no such supplemental indenture
may be entered into without the consent of the Holder of each Outstanding Debt Security affected thereby. The Indenture also permits the Holders of at least a majority in aggregate principal amount of the Outstanding Debt Securities of each series
to be affected, on behalf of the Holders of all Debt Securities of such series, to waive compliance by the Issuer with certain restrictive provisions of the Indenture. Any such consent or waiver by the Holder of this Global Security shall bind every
future Holder of this Global Security and of any Global Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Global Security or such
other Global Securities. 

  
 A-11 

 Subject to the terms of the Indenture, the Depositary may surrender this Global Security or any
portion hereof in exchange, in whole or in part, for definitive Debt Securities, of this series in registered form and the Registrar, acting on behalf of the Issuer, shall authenticate and deliver in exchange for this Global Security or the portions
thereof to be exchanged, an equal aggregate face amount of definitive Debt Securities (duly countersigned) in the numbers and in the names advised by the Depositary. 

By its acquisition of the Debt Securities represented by this Global Security, each Holder (which, for these purposes, includes each
beneficial owner of the Debt Securities) acknowledges, accepts, consents and agrees, notwithstanding any other term of the Debt Securities, the Indenture or any other agreements, arrangements or understandings between the Issuer and any Holder, to
be bound by (a) the effect of the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority that may include and result in any of the following, or some combination thereof: (i) the
reduction of all, or a portion, of the Amounts Due; (ii) the conversion of all, or a portion, of the Amounts Due into the Issuer’s or another Person’s ordinary shares, other securities or other obligations (and the issue to, or
conferral on, the Holder of such ordinary shares, other securities or other obligations), including by means of an amendment, modification or variation of the terms of the Debt Securities or the Indenture; (iii) the cancellation of the Debt
Securities; and/or (iv) the amendment or alteration of the Maturity of the Debt Securities or amendment of the amount of interest payable on the Debt Securities, or the interest payment dates, including by suspending payment for a temporary
period; and (b) the variation of the terms of the Debt Securities or the Indenture, if necessary, to give effect to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority. No
repayment or payment of Amounts Due shall become due and payable or be paid after the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority if and to the extent such amounts have been
reduced, converted, cancelled, amended or altered as a result of such exercise. Moreover, each Holder (which, for these purposes, includes each beneficial owner of the Debt Securities) consents to the exercise of any UK Bail-in Power as it may be imposed without any prior notice by the Relevant UK Resolution Authority of its decision to exercise such power with respect to the Debt Securities. 

“Amounts Due” means the principal amount of, and any accrued but unpaid interest, including any Additional Amounts, on, the Debt
Securities. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of any UK Bail-in Power by the Relevant UK Resolution
Authority. 
 “BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions
and investment firms, as amended, supplemented or replaced from time to time. 
 “UK Bail-in
Power” means any write-down, conversion, transfer, modification or suspension power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the United Kingdom, relating to
the transposition of the BRRD or otherwise, including but not limited to the Banking Act and the instruments, rules and standards created thereunder, pursuant to which (i) any obligation of a Regulated Entity (or other affiliate of such
Regulated Entity) can be reduced, cancelled, modified or converted into shares, other securities or other obligations of such Regulated Entity or any other person (or suspended for a temporary period); and (ii) any right in a contract governing
an obligation of a Regulated Entity may be deemed to have been exercised. 
 “PRA” means the UK Prudential Regulation Authority or
any successor entity. 
 “Regulated Entity” means any BRRD Undertaking as such term is defined under the PRA Rulebook promulgated
by the PRA, as amended from time to time, which includes certain credit institutions, investment firms and certain of their parent or holding companies or any comparable future definition intended to designate entities within the scope of the UK
recovery and resolution regime. 

  
 A-12 

 “Relevant Regulator” means the PRA or any successor entity or other entity primarily
responsible for the prudential supervision of the Issuer. 
 “Relevant Rules” means, at any time, the laws, regulations,
requirements, guidelines and policies relating to capital adequacy (including, without limitation, as to leverage) then in effect in the United Kingdom including, without limitation to the generality of the foregoing, as may be required by CRD IV or
BRRD or any applicable successor legislation or any delegated or implementing acts (such as regulatory technical standards) adopted by the European Commission and applicable to the Issuer from time to time and any regulations, requirements,
guidelines and policies relating to capital adequacy adopted by the Relevant Regulator from time to time (whether or not such requirements, guidelines or policies are applied generally or specifically to the Issuer or to the Issuer and any of its
holding or subsidiary companies or any subsidiary of any such holding company). 
 “Relevant Supervisory Consent” means as (and to
the extent) required, a consent or waiver to the relevant redemption or purchase from the Relevant Regulator. For the avoidance of doubt, Relevant Supervisory Consent shall not be required if either (i) none of the Debt Securities qualify as
part of the Issuer’s regulatory capital, or own funds and eligible liability or loss absorbing capacity instruments, as the case may be, each pursuant to the Loss Absorption Regulations, (ii) the relevant Debt Securities are repurchased
for market-making purposes in accordance with any permission given by the Relevant Regulator pursuant to Relevant Rules (including, without limitation, Article 29(3) of Commission Delegated Regulation (EU) No. 241/2014) within the limits
prescribed in such permission or (iii) the relevant Debt Securities are being redeemed or repurchased pursuant to any general prior permission granted by the Relevant Regulator or any authority with the ability to exercise a UK Bail-in Power pursuant to the Relevant Rules or the Loss Absorption Regulations within the limits prescribed in such permission. 

“Relevant UK Resolution Authority” means any authority with the ability to exercise a UK
Bail-in Power. 
 By its acquisition of the Debt Securities, each Holder (which, for these purposes,
includes each beneficial owner of the Debt Securities): (i) acknowledges and agrees that the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Debt Securities shall
not give rise to a Default or Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act; (ii) to the extent permitted by
the Trust Indenture Act, waives any and all claims, in law and/or in equity, against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee
takes, or abstains from taking, in either case (x) in accordance with the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Debt Securities or (y) in
connection with the variation of the Events of Default and Defaults on the occurrence of a Loss Absorption Disqualification Event; and (iii) acknowledges and agrees that, upon the exercise of any UK
Bail-in Power by the Relevant UK Resolution Authority, the Trustee shall not be required to take any further directions from Holders under Section 4.11 (Control by Holders of Debt Securities) of
the Indenture; and that the Indenture shall not impose any duties upon the Trustee whatsoever with respect to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority. 

Notwithstanding clause (iii) of the immediately preceding paragraph, if, following the completion of the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority, the Debt Securities remain outstanding (for example, if the exercise of the UK Bail-in Power results in only a partial
write-down of the principal of the Debt Securities), then the Trustee’s duties under the Indenture shall remain 

  
 A-13 

 
applicable with respect to the Debt Securities following such completion to the extent that the Issuer and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the
Indenture; provided, however that notwithstanding the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority, there shall at all times be a Trustee hereunder pursuant to, and in
accordance with Section 6.09 of the Base Indenture, and the resignation and/or removal of the Trustee and the appointment of a successor trustee shall continue to be governed by Sections 6.10 and 6.11 of the Base Indenture, including to the
extent no supplemental indenture or amendment to the Indenture is agreed upon pursuant to the Indenture in the event the Debt Securities remain outstanding following the completion of the exercise of the UK
Bail-in Power. 
 It is the intention of the Issuer and the Trustee that the Issuer’s
obligations to indemnify the Trustee and the Agent in accordance with Section 6.07 of the Base Indenture (for the avoidance of doubt, as amended by Section 4.01 of the second supplemental indenture dated May 25, 2016) shall survive
any exercise of the UK Bail in Power by the Relevant UK Resolution Authority. 
 The exercise of the UK
Bail-in Power by the Relevant UK Resolution Authority with respect to the Debt Securities shall not constitute an Event of Default or a Default. 

In addition to the right to enter into supplemental indentures pursuant to Sections 9.01 and 9.02 of the Base Indenture, the Issuer and the
Trustee may enter into one or more indentures supplemental to the Indenture to modify and amend the terms of the Indenture or the Debt Securities, without the further consent of any Holders, to the extent necessary to give effect to the exercise by
the Relevant UK Resolution Authority of the UK Bail-in Power. 
 Upon the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Debt Securities, the Issuer shall provide a written notice to the Holders through DTC as soon as practicable regarding such exercise of the
UK Bail-in Power for purposes of notifying Holders and beneficial owners of the Debt Securities of such occurrence. The Issuer shall also deliver a copy of such notice to the Trustee for information purposes.

 Upon the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority that results in
the reduction or cancellation of all, or a portion, of the principal amount of this Global Security and/or the conversion of all, or a portion, of the principal amount of this Global Security into shares or other securities or other obligations of
the Issuer or another person, the portion of the principal amount hereof so reduced, cancelled and/or converted shall be endorsed by the Registrar on Schedule B hereto. The principal amount hereof shall be reduced for all purposes by the amount so
reduced, cancelled and/or converted. 
 By its acquisition of a Debt Security, each Holder (which, for these purposes, includes each
beneficial owner of the Debt Securities) of the Debt Securities shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds the Debt Securities to take any and all
necessary action, if required, to implement the exercise of any UK Bail-in Power with respect to the Debt Securities as it may be imposed, without any further action or direction on the part of such Holder or
beneficial owner, the Trustee and the Agent (and any other agent acting in connection with the relevant series of Debt Securities). 
 To
the fullest extent permitted by law, the Holders and the Trustee, in respect of any claims of such Holders to payment of any principal, premium or interest in respect of the Debt Securities, by their acceptance of the Debt Securities,
shall be deemed to have waived any right of set-off or counterclaim that such Holders or, as the case may be, the Trustee in such respect, might otherwise have. 

  
 A-14 

 ANY HOLDER (WHICH, FOR THESE PURPOSES, INCLUDES EACH BENEFICIAL OWNER OF THE DEBT SECURITIES)
THAT ACQUIRES THE DEBT SECURITIES IN THE SECONDARY MARKET AND ANY SUCCESSORS, ASSIGNS, HEIRS, EXECUTORS, ADMINISTRATORS, TRUSTEES IN BANKRUPTCY AND LEGAL REPRESENTATIVES OF ANY HOLDER OR BENEFICIAL OWNER OF THE DEBT SECURITIES SHALL BE DEEMED TO
ACKNOWLEDGE, AGREE TO BE BOUND BY AND CONSENT TO THE SAME PROVISIONS SPECIFIED HEREIN TO THE SAME EXTENT AS THE HOLDERS OR BENEFICIAL OWNERS OF THE DEBT SECURITIES THAT ACQUIRE THE DEBT SECURITIES UPON THEIR INITIAL ISSUANCE, INCLUDING, WITHOUT
LIMITATION, WITH RESPECT TO THE ACKNOWLEDGEMENT AND AGREEMENT TO BE BOUND BY AND CONSENT TO THE TERMS OF THE DEBT SECURITIES RELATED TO THE UK BAIL-IN POWER, LIBOR AND THE VARIATION OF THE EVENTS OF DEFAULT
AND DEFAULTS ON THE OCCURRENCE OF A LOSS ABSORPTION DISQUALIFICATION EVENT. 
 The Indenture and the Debt Securities may be amended and
modified as provided in the Indenture. 
 All terms used in this Global Security and not otherwise defined shall have the meanings ascribed
to them in the Indenture. 
 The Indenture and the Debt Securities shall be governed by, and construed in accordance with, the laws of the
State of New York. 

  
 A-15 

 SCHEDULE A 

EXCHANGES FOR DEFINITIVE DEBT SECURITIES 

The following exchanges of parts of this Global Security for Definitive Debt Securities have been made: 

 

									
	 Date Made
	 	 	  	 Principal amount

exchanged for Definitive

Debt Securities
	  	 	  	 Remaining principal

amount following such

exchange

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

  
 A-16 

 SCHEDULE B 

REDUCTION, CANCELLATION OR CONVERSION OF DEBT SECURITIES UPON THE EXERCISE OF ANY UK BAIL-IN POWER BY
THE RELEVANT UK RESOLUTION AUTHORITY 
  

									
	 Date made
	 	 	  	 Principal amount

reduced, cancelled

and/or converted
	  	 	  	 Remaining principal

amount following
reduction, cancellation

and/or conversion

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

	  
	 		  	  
	  		  	  

  
 A-17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00284-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00284-of-00352.parquet"}]]