INDICATIVE TERM
Upon the satisfaction or waiver of the conditions precedent set out herein, Sponsor and Investor will negotiate and execute definitive agreements such as Share purchase agreement (the “SPA”).
Upon the issuance of the LOA, Sponsor will undertake to complete the required steps necessary to achieve the successful signing of the PPA including but not limited to the following requirements:
1. Site: the Project must demonstrate that the land site is suitable for power generation and had the necessary site control to build, own operate and maintain the Project for the duration of the PPA, supported by land right/ownership documents or consent for the right to use such land from the relevant person or authority;
2. Funding: the Project must demonstrate source of funding to be used for the project construction and operation, supported by financial support letter issued by local financial institutions or overseas financial institution with branch office in Thailand;
3. Technology: the Project must demonstrate that technology for the operation has been duly procured;
4. License & Permit: the Project must demonstrate that all licenses and permits applicable have been or are being obtained.
5. Technical approval: technical approval has been obtained from EGAT if required.
Terms 1. Investor will subscribe for shares to acquire at 100% of the Company from the Sponsor. The subscription price will be 195 MWac x XX million THB/MWac = XXX million THB payable upon satisfaction of the conditions precedent agreed by the parties and set out in the SPA.
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Reserve Matters to Shareholders The Shareholders Agreement shall provide certain affirmative and negative covenants applicable to the Company customary for an investment of this nature including which require approval from the shareholders:
1. Change of control provisions; amendments to any of Article of Association, change in accounting or dividend policy;
2. Any changes to the capital structure of the Company including but without limitations any issue of new shares or other equity securities;
3. Capital expenditures above [$ ] in a single transaction or [$ ] in a serious of transactions in a twelve month period;
4. Transactions with affiliates and transactions out of the ordinary course of business other than those already existing which have been fully disclosed to the Sponsor prior to signing definitive documentation;
5. Sales of substantial assets of the Company, mergers or acquisitions;
6. Limitation on certain payments and management fees except for those as agreed in the Project Companies Shareholders Agreements and disclosed to the Investor prior to signing definitive documentation;
Quarterly financial reporting and information requirements and inspection rights.
Due Diligence Review Upon the execution of this Term Sheet, the Sponsor shall permit the Investor and its appointed advisors to conduct Due Diligence Review (the “Due Diligence”) which will include but are not limited to the following:
1. Agreements
2. Government permits & licenses
3. Environmental approvals and permits
4. Technical review of projects under development
5. Feasibility studies of projects under development
6. Debt and equity financing agreements and documents
7. Financial statements and management accounts of the Company
8. Shareholder agreements, joint venture agreements, etc.
9. Legal review of the Company and contracts
10. Environmental site assessment
11. Site due diligence
12. Land title deed and evidence that project will have land right ownership upon PPA approval.
a) Anti-corruption due diligence on Sponsor, its principals and the Company.
Representations and Warranties Customary representations and warranties for an investment of this nature and others appropriate in the judgment of the Investor for this transaction, including but not limited to the following:
1. Corporate organization, existence, power and authorization of the Sponsor and Company;
2. Execution, delivery and performance of the shareholders agreement between all shareholders of the Company does not violate law, Memorandum and Articles of Association of the Company and/or existing agreements of the Company;
3. Legality, validity, binding effect and enforceability of the Company’s shareholders agreement and Sponsor’s share purchase agreement;
4. No material adverse change in the business condition (financial or otherwise), operations, performance, properties or prospects of the Company or the Sponsor;
5. Completeness and accuracy of any financial statements;
6. No violation of law or material agreements; and
7. Such other representations and warranties as may be advised by the counsel to the Investor.
The Note shall provide that in the event of any inconsistency between the Shareholders Agreement, Note and the Articles of Association of the Company, the Note will take precedence, and the Articles of Association and Shareholders’ Agreement must be amended in a manner consistent with the Note.
Conditions Precedents In addition to the Conditions Precedent detailed in “Investment” section will include those conditions customary for an investment of this nature and to include others appropriate in the judgment of the Investor, including, but not limited to:
1. Corporate structure and tax elections by the Company to be acceptable to the Investor;
2. The Company’s Shareholders Agreement and Note;
3. Terms and senior debt obligations of the Company and the Project to be satisfactory to the Investor;
4. Investor’s satisfaction of the Due Diligence;
5. Absence of the occurrence of any material adverse event;
6. Satisfactory legal opinions of counsel; and
7. Land purchase contract on an approved land
8. Award of the PPA to the Company
9. Approval of Investor’s Board of Directors and Risk Committee.
Covenants The definitive agreements shall set forth affirmative and negative covenants applicable to the Company including, but not limited to the following covenants. Affirmative covenants will require the Company to:
1. continue its corporate existence
2. maintain insurance policies on
3. comply with applicable law
4. pay taxes
5. adhere to Environmental and Social Management Systems guidelines to be agreed between the Company and the Investor;
6. provide financial reporting and information requirements and inspections rights; and other matters that may result from the due diligence.
Negative covenants will forbid the Company to:
1. change its business or enter a new line of business
2. dispose of its assets other than in the ordinary course of business
3. Dispose of assets other than in the ordinary course of business not to exceed a pre-determined amount
4. enter into any agreement to merge or combine with another company
5. make any acquisition of another company, its business or assets except for certain purchases of inventory in the ordinary course of business
6. issue dividends, stock repurchases or redemptions, make payments with respect to subordinated debt, or make other restricted payments
7. make any loans or investments
8. incur any lien or make any negative pledge, other than mechanics’ liens in favor of suppliers incurred in the ordinary course of business or those allowed under the Permitted Indebtedness
9. incur any additional indebtedness, including guaranties, sale-leasebacks, and other contingent obligations
10. engage in any transactions with insiders or their affiliates
11. increase the size of its Board of Directors
12. increase the annual cash compensation for any employee beyond a certain agreed upon amount
Documentation The terms and conditions of the Investment shall be set forth in a definitive Note and Shareholder’s Agreement, providing for the terms set forth herein, other terms and conditions customary to such transactions in Thailand; delivery of any additional agreements, documents and instruments; and such other terms and conditions as are mutually agreed to between the parties.
Governing Law and Dispute Resolution This Term Sheet will be governed by the laws of Singapore. Any disputes between the Parties in respect of this Term Sheet shall be subject to arbitration in Singapore under the SIAC Rules then in effect. Governing law and dispute resolution under the Share Purchase Agreement and Shareholder’s Agreement shall be mutually agreed by the parties.
Exclusivity 90 days from the issuance of term sheet
Confidentiality This Term Sheet shall be subject to the terms and conditions of the confidentiality agreement to be entered into between Investor and the Sponsor and the Company
CONFIRMATION OF ACCEPTANCE
We hereby understand that the principal terms and conditions set out above are not exhaustive and that the definitive documentation may contain further or different terms, covenants and conditions as may be mutually agreed upon between the parties.
The validity of this Term Sheet may be extended by mutual agreem
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