Professional Documents
Culture Documents
) BC Hydro
Power smart
Scott Macdonald
Manager, Freedom of Information and Privacy
16th Floor
Phone: (604)623-3880
Fax: (604) 623-4556
12 July 2016
Based on discussions with the Office of the Information and Privacy Commissioner for
BC ('the OIPC), BC Hydro has enclosed a record in response to your request.
If you have any questions regarding BC Hydro's handling of your request, please call
me. You may also ask the OIPC to review BC Hydro's response to your request by
writing to the following address within 30 business days of receipt of this letter:
If you ask for a review, please provide the OIPC with a copy of your request and a copy
of this letter.
Yours truly,
Scott Macdonald
Enclosure
British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver, BC, V6B 5R3
www.bchydro.com
MASTER AGREEMENT
THIS MASTER AGREEMENT made as of the 14th day of March, 1997 by and
between BRITISH COLUMBIA HYDRO INTERNATIONAL LIMITED (,,BCHIL,,), a
company incorporated under the laws of the Province of British Columbia, SNC-LAVALIN
INC., a company incorporated under the laws of Canada ("SNC") and SNC-Lavalin Equity
(B.C.), Inc., a company incorporated under the laws of the Province of British Columbia
("Equity") and a wholly-owned subsidiary of SNC-Lavalin Group Inc.
WHEREAS:
A. BCHIL is one of a group of companies indirectly involved in the development of the
Raiwind Project, as may be seen in the corporate chart attached as Schedule A;
B. SNC has established a centre of excellence in Vancouver, British Columbia for
engineering and project management of electric power projects in Pacific Rim countries;
C. SNC wishes to expand its international BOO/T opportunities;
D. BCHIL has no mandate to invest equity in any future BOO/T projects and accordingly is
prepared to facilitate SNC's involvement in such projects with corresponding employment
and other opportunities for British Columbia, on and subject to the terms and conditions
set forth herein;
E. BCHIL and IPC are the registered and beneficial owners of 40% and 60%, respectively,
of the issued and outstanding shares of B.C. Hydro International Power Development
Corporation;
F. Equity is planning to tender an offer to all the Class "A" voting shareholders of IPC to
purchase all of the outstanding Class "A" voting shares in IPC; and
G. BCHIL is or expects to become the owner of a certain number of Class "A" voting shares
in the capital of IPC and, in connection with the proposed Offer and by lock-up
agreement dated March 14, 1997 (the "Lock-up"), has agreed to tender all of its Class
"A" voting snares in IPC to Equity, on and subject to the terms and conditions set out in
the Lock-up.
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ARTICLE 1.
INTERPRETATION
1 . 1 D e fi n i t i o n s . I n t h i s A g r e e m e n t :
(a) "affiliate" has me meaning set forth in the Company Act (British Columbia); .
(b) "BOO/T" means the building, owning and operating of a project and, if transfer
is included, at the end of the contractual concession period the transfer of the
project asset to the host government;
(c) "Business Day" means any day other than Saturday, Sunday or any statutory
holiday in the Province of British Columbia;
(d) "Class A Shares" means the Class "A" Voting Shares without par value in the
capital of IPC;
(f) ' "Closing Pate" has the meaning prescribed in the Offer; ,
(h) "IPC" means IPC International Power Corp., a company incorporated under the
laws of the Province of British Columbia (see reference in Schedule A);
(i) "Loans" means the indebtedness owed to BCHIL, as evidenced by the promissory
notes attached hereto as Schedule l.l(i);
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(i) "Raiwind Project" means the 117 megawatt diesel power station being built near
the town of Raiwind (near Lahore) Pakistan;
(q) "Tradeable Shares" means the 7,630,121 shares in the capital stock of SEPCOL
which are, as of the date of this Agreement, registered in the name of SEP
Holdings Corp.; and
1.2 Headings. The division of this Agreement into Articles, sections, subsections,
paragraphs, and subparagraphs and the insertion of headings is for convenience of reference only
and shall not affect the construction or interpretation hereof.
1.3 Extended Meanings. Words importing the singular include the plural and vice
versa and words importing gender include all genders, unless the context otherwise requires.
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1.6 Amendments. This Agreement may not be amended or modified in any respect
except by written instrument signed by BCHIL and SNC.
1.7 Waiver. Except as expressly provided in this Agreement, no waiver of any
provisions of this Agreement shall be binding unless executed in writing by the party entitled to
the benefit thereby. No waiver of any provision of this Agreement shall constitute a waiver of
any other provision nor shall any waiver of any provision of this Agreement constitute a
continuing waiver unless otherwise expressly provided.
1.8 Period Termination on a Non-Business Day. Should the period of time
permitted under this Agreement to perform any obligation or take any action, including the
delivery of a notice, terminate on a day other than a Business Day, then such period shall be
extended to the next following Business Day.
1.9 Illegality, Invalidity, etc. In the event that one or more provisions of this
Agreement or any agreement, document or other instrument required to be delivered hereunder
or pursuant hereto shall be illegal, invalid or unenforceable in any respect under any applicable
law, the validity, legality and enforceability of the remaining provisions hereof or thereof shall
not be affected or impaired thereby.
1.10 Schedules. The following schedules annexed hereto form part of this Agreement
and are incorporated herein by reference:
Schedule A Corporate Chart
Schedule 1.1(h) Loans
Schedule 2.1(b) Calculation of Purchase Price
Schedule 2.3 Other Projects
1.11 Confirmation of Recitals. The parties hereto confirm the respective facts as
stated in the Recital's to this Agreement and agree that they will refrain from taking any action
which would be a denial of any such facts.
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ARTICLE2.
COVENANTS AND AGREEMENTS
2.1 Shareholders Agreement. Each of BCHIL and SNC agree to negotiate in good
faith and settle on or before the Termination Date the terms of a new shareholders agreement to
be entered into at the Closing, if the Closing occurs, between BCHIL, IPC, Equity and Power
relating to the management of Power and relating to BCHIL's and IPC's respective investments
therein. The parties agree that, among other things, such shareholders agreement shall contain
the following provisions:
(a) that until December 31, 2007, neither party shall sell, transfer, assign, mortgage,
pledge, charge, encumber or otherwise dispose of its shares in Power, without the
prior written consent of the non-selling party and subject to receiving all other
required consents, following which date, either party may sell, transfer, assign,
mortgage, pledge, charge, encumber or otherwise dispose of its shares in Power:
(i) without the consent of the non-selling party, but subject to receiving all
other required consents;
(ii) provided that all contractual commitments made by such selling party prior
to the date of such sale in respect of the business of Power, including any
specific power project, shall continue thereafter; and
(b) at any time.after the commissioning of the Raiwind Project, and subject to
receiving any necessary lender and sponsor and Government of Pakistan
approvals, BCHIL shall have the right, but not the obligation, to require SNC or
any affiliate of SNC, which SNC may designate, to purchase all of BCHIL's
shares in Power at fair market value (the "Purchase Price") as determined by a
third party business valuator in accordance with the principles set out in Schedule
2.1(b) hereto (the "Transaction"). If BCHIL requires, SNC shall concurrently
with such purchase assume all of BCHIL's and B.C. Hydro's obligations accruing
as and from that time pursuant to the Subcontracts in respect of the Raiwind
Project (the "Obligations");.
(c) in the event that BCHIL elects, to sell, transfer or assign its shares in Power, IPC
shall cause the legal names of Power, Transpower and Southern to be changed so
as not to include the words "BC Hydro International" or any variation thereof or
any other words which could be confusing therewith and IPC shall cause such
companies to cease using such words in commerce for any purpose (including,
without limiting the foregoing, on letterhead, business cards, business forms, etc.)
as soon as SNC, acting reasonably, decides and notifies BCHIL that it is
reasonably practicable to do so in connection with the Malakand project and the
Raiwind Project;
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(d) subject to paragraph two of section 2.3, the business of Power shall be the
holding of an indirect interest in, and being obligated under certain contracts
relating to, the Raiwind Project and any other businesses or material contracts to
be entered into, or debt or equity investments to be made other than in connection
with the Raiwind Project, shall require prior written consent of both BCHIL and
IPC;
(e) the board of directors of Power shall be comprised of nine directors, four
nominated by IPC and four nominated by BCHIL and the ninth director to be
appointed by mutual agreement of the parties. The ninth director shall be a
person independent from BCHIL and its affiliates and SNC and its affiliates and
shall be a person with some knowledge or expertise or experience with respect to
international transactions or relevant to the power generation industry. BCHIL
and IPC shall provide one another with the names of their proposed persons to be
a ninth director including any information or resumes relating thereto and shall in
good faith and acting reasonably consider and agree to the appointment of the
ninth director. If following any such good faith consideration and after the
expiration of 60 days following the delivery of proposals to each other no
agreement has been reached, IPC shall be entitled to call a general meeting of
Power to elect the ninth director by ordinary resolution. The ninth director shall
be the Chairman of the board. With respect to the four nominees of "BCHIL" as
described in the sponsors agreement (dated October 27, 1994 among BCHIL1 and
Southern Electric Ltd.) to the board of directors of SfcPCOL, each of BCHIL and
IPC shall cause Power to require Southern to nominate two nominees of BCHIL
and two.nominees of IPC to die board of directors of SEPCOL;
(f) as soon as practicable and subject to receiving all necessary consents, each of
BCHIL and IPC shall cause Power to eliminate Transpower and SEP Holdings,
unless to do so in either or both cases would result in adverse consequences to
either or both of BCHIL and IPC which cannot be remedied to the satisfaction of
BCHIL and IPC, both acting reasonably;
(g) in the event that Power is called upon to make a Capital Contribution (within the
meaning of the Sponsor Support Agreement dated October 25, 1995 between
Southern Electric Power Company Limited, BCHIL Southern Company Limited,
Southern Electric Limited (Marshall Islands), et al), and SNC (or an affiliate of
SNC) makes the required contribution (the "SNC Contribution") to Power in
order to fond such Capital Contribution (it being understood that BCHIL shall
make no contribution in respect of any such Capital Contribution), then for so
long as the SNC Contribution remains unpaid: (i) any dividend amount received
by Power, subject to meeting normal course operating costs of Power; and (ii)
any repayment to Power of the Capital Contribution, including any interest
thereon; if payable, shall be applied in full by Power in payment of the SNC
Contribution and for no other purpose;
(h) the parties agree to meet, at least once every year, while BCHIL is a-shareholder
of Power, to review and assess the progress, objectives and success of Power's
initiatives. The parties will also review the extent to which Power's activities
have brought benefits to the British Columbia economy.
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(ii) BCHIL shall have the first right of refusal on at least 33% in value of the
fee-for-service contract work generated thereunder and granted to Power
and/or SNC or any of its affiliates, unless such Accepted Opportunity is a
turnkey project only, in which case SNC agrees to offer to BCHIL fee-for-
service work through SNC's Vancouver Centre of Excellence operations;
and
(b) SNC shall ensure that there is a significant amount of British Columbia content by
procuring all of the intellectual and professional project implementation services
required on such projects through its B.C. offices or affiliates; provided that
except to the extent that it is not, in the reasonable opinion of SNC, reasonably
practicable to perform such services in B.C., substantially all such services are
performed by persons present in B.C.
In the event that SNC decides to participate in the BOO/T project known as
Malakand through Power, the parties agree that the consent of BCHIL shall be required,
provided that the parties shall work together diligently to devise a structure within Power for the
Malakand project acceptable to each of them, acting reasonably. In the event the parties reach
such agreement, SNC's participation shall be made through Power, provided that SNC shall
receive the benefit of and assume all obligations in respect of such participation and shall
indemnify and save harmless BCHIL and Power in respect thereof. Notwithstanding the
foregoing, provided the Closing has occurred, SNC may cause Power to enter into any
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consulting, project management and/or operations and maintenance "fee for service" contracts
for Malakand; provided that in all circumstances, SNC (or one of its affiliates) shall be the
primary subcontractor of Power in respect of all such contracts and SNC shall indemnify and
save harmless Power and BCHIL from any and all claims under such contracts and in respect of
such activity.
BCHIL recognizes that SNC-Lavalin Group Inc. is a widely held public company
governed by various commercial, legal and other constraints and policies relating to its business
and any disclosure in respect thereof, and that the investigation and pursuit by SNC of any
potential business opportunities in respect of the Projects are of a sensitive and confidential
nature Therefore, BCHIL agrees that it shall make no announcements and release no documents
with respect to any of the Projects without the consent of SNC except as required by law, in
which event BCHIL shall first advise SNC of its intention to make such announcement or release
and of the nature thereof.
2 4 IPC. Upon Equity acquiring 90% or more of the shares of IPC pursuant to the
Offer or otherwise,'Equity shall forthwith take the steps it is entitled to under Section 279 of the
Company Act (British Columbia), to attempt to acquire all remaining outstanding shares of IPC
and if Equity shall become the sole shareholder of IPC, Equity or SNC,- as the case may be,
agree to take all actions and do all things necessary to cause IPC to be wound-up into or
amalgamated with Equity, and subsequently cause Equity to be wound-up into or amalgamated
with SNC-Lavalin Group Inc. or any of its affiliates, so that both IPC and Equity cease to exist.
In connection therewith, SNC-Lavalin Group Inc. or any of its affiliates shall assume all of the
obligations and liabilities of IPC and Equity to BCHIL and Power, and shall be the registered
holder of the Power shares previously held by IPC and Equity.
2.5 The Loans/SEP Holdings. From and after the Closing Date and provided the
Closing occurs, SNC and Equity agree that
(a) until the later of the date BCHIL ceases to be a shareholder of Power and the date
on which the Loans are repaid in full, the Tradeable Shares shall not be sold,
transferred, assigned or dealt with in any manner without the prior written
consent of BCHIL;
(b) if upon the maturity dates of the Loans it is not possible for the Loans to be repaid
in M to BCHIL, SNC and Equity shall, subject to receiving the prior written
consent of BCHIL, cause the Tradeable Shares to be sold in order that the Loans
may be repaid to the extent possible, without relieving any further obligation to
pay the balance thereof when due and owing; provided that if either or both of
SNC and BCHIL determine that market conditions at such time are not favourable
for sale of the Tradeable Shares, either or both may require such sale to be
postponed, and the Loans to be extended until the date upon which SNC (or its
designated affiliate) purchases BCHIL's interest in Power under section 2.1(b)
hereof or such other date as may be mutually agreed by SNC and BCHIL
provided that in no event shall the Loans be extended beyond December 31, 2004;
and
(c) if and when the Tradeable Shares are sold, then the proceeds of such sale shall
first be applied to pay any amounts then outstanding in respect of the Loans, even
if the Tradeable Shares are sold prior to the maturity dates of the Loans.
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2.6 Conditions to the Offer. Equity agrees not to, and SNC agrees not to cause
Equity to, make the Offer to any Class "A" voting shareholder of IPC unless and until BCHIL
has notified Equity, in writing, that all of the conditions set out in sections 2 and 3 of the Lock
up have been satisfied or waived.
2.7 Action No. C967082. Concurrent with the filing of the consent dismissal orders
itemized in paragraph 3(e) of the Lock-up, BCHIL will cause to be filed in the Supreme Court of
British Columbia a consent dismissal order for action no. C967082, as prepared by its counsel
having conduct of the action.
2.8 The Offer. SNC covenants and agrees with BCHIL that, upon Equity (or such
other SNC related company which may make the Offer) receiving executed lock-up agreements,
on terms satisfactory to SNC, which are unconditional or in respect of which all conditions have
been satisfied or waived from the holders of 90% or more of the issued and outstanding Class
"A" voting shares of IPC, it shall forthwith make the Offer to all of the Class "A" voting
shareholders of IPC.
2.9 Non-Restriction. Nothing contained in this Agreement shall restrict any of the
parties hereto from conducting and carrying on their respective businesses, except as specifically
provided herein.
ARTICLE 3.
INDEMNIFICATION
(a) any breach of any covenant or agreement of SNC and/or Equity contained in this
Agreement; and
(b) any other matters expressly contemplated in this Agreement for which SNC has
agreed to indemnify BCHIL.
(a) any breach of any covenant or agreement of BCHIL contained in this Agreement;
and
(b) any other matters expressly contemplated in this Agreement for which BCHIL has
agreed to indemnify SNC.
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ARTICLE 4.
CONFIDENTIALITY/NON-COMPETE
4 . 1 C o n fi d e n t i a l i t y .
(a) Unless otherwise agreed to in writing by BCHIL, SNC and Equity agree:
(ii) not to use any Confidential Information for any purpose other than in
connection with the evaluation and/or consummation of the matters
contemplated by this Agreement and the Offer in a manner that BCHIL
has approved.
(b) ' In the event that SNC or Equity is requested pursuant to, or required by,
applicable law or regulation or by legal process to disclose any Confidential Information, SNC
and Equity agree that they will provide BCHIL with prompt notice of such request or
requirement in order to enable BCHIL to seek an appropriate protective order or other remedy,
to enable BCHIL to consult with SNC with respect to BCHIL taking steps to resist or narrow the
scope of such request or legal process, or to waive compliance, in whole or in part, with the
terms of this Agreement.
(c) If SNC determines that neither it nor Equity wishes to proceed with the matters
contemplated by this Agreement and the Offer, SNC will promptly advise BCHIL of that
decision. In that case, SNC will, upon-BCHIL's request, promptly deliver to BCHIL, all
tangible Confidential Information, including all copies, reproductions, summaries or extracts
thereof or based thereon in the possession of SNC and/or Equity or in the possession of any
representative of SNC or Equity and all analyses, models, documents or other information
prepared by SNC or its representatives containing Confidential Information.
4.2 Non-Compete. BCHIL agrees that, from and after the Closing Date and if the
Closing occurs, it will riot, except as contemplated in paragraph two of Section 2.3 take any
further action in respect of nor undertake, as developer or otherwise as an equity participant, any
of the BOO/T projects listed on Schedule 2.3; provided however that, notwithstanding this
provision, BCHBL shall be able to provide, at any time and from time to time, "fee-for-service"
consulting services in connection with any of the BOO/T projects listed on Schedule 2.3 with the
consent of SNC, which consent shall not be unreasonably withheld.
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ARTICLES.
GENERAL
(a) The fees and disbursements of all third-party lawyers, accountants and consultants
engaged by each of the parties respectively in connection with the transactions contemplated by
this Agreement and the Offer shall be billed to, and paid by, Power, unless the Closing does not
occur, in which case each party shall bear the fees and disbursements of their respective third-
party lawyers, accountants and consultants.
(b) The parties confirm that no broker, agent or other intermediary acted for SNC in
connection with the transactions contemplated herein and that any commission or other
remuneration payable to any broker, agent or other intermediary retained by BCHIL in
connection with the transaction contemplated herein shall be billed to and paid by BCHIL.
with a copy:
Attention: Senior Vice-President, Law
or to such other address as a party may specify by notice as aforesaid and shall be deemed to
have been received, if delivered on the day of delivery if it is a Business Day and otherwise on
the next succeeding Business Day.
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5.4 Further Assurances. Each of the parties shall execute and deliver such further
documents and instruments and do such acts and things as may, before or after the Closing Date,
be reasonably required by another party to carry out the intent and meaning of this Agreement.
5.5 Proper Law. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws of British Columbia. The
parties attorn to the jurisdiction of the courts of British Columbia.
5.6 Benefit and Binding Nature of the Agreement. This Agreement shall enure to
the benefit of and be binding upon the parties hereto and their respective successors and
permitted assigns.
5.7 Announcements. Until the making of the Offer, no announcements or any
written or oral response to any questions of the media, with respect to this Agreement, the Lock
up and/or the Offer and the matters contemplated hereunder and thereunder shall be made by any
party without the consent of the other parties except as required by law or stock exchange
regulations in which event such party shall advise the other parties of that decision and the nature
of the announcement or response. Thereafter and up to the Closing, each party may make such
announcements it considers appropriate in the circumstances having consulted with the other
parties in advance.
5.8 Assignment. No party may assign its rights or benefits under this Agreement by
operation of law or otherwise.
5.9 Arbitration. Any dispute arising hereunder shall be settled by final, binding and
confidential arbitration pursuant to the Commercial Arbitration Act (British Columbia), as
amended, based upon the following:
(a) the tribunal shall consist of one arbitrator (the "Arbitrator") appointed by mutual
agreement of the parties or, in the event of a failure to agree within 10 business
days, either party may apply to a judge of the Supreme Court of British Columbia
to appoint someone to serve as the Arbitrator. The Arbitrator shall be qualified
by education and training to pass upon the particular matter to be decided;
(b) the Arbitrator shall be instructed that time is of the essence in proceeding with his
determination of the dispute and, in any event, the award of the Arbitrator must
be rendered within 90 days of the day which the submission of such dispute to
arbitration was made; and
(c) the arbitration shall take place in or about Vancouver, British Columbia.
5.10 Counterparts. This Agreement may be executed in counterparts, each of which
when so executed and delivered shall be an original, but all of which together shall constitute one
and the same agreement.
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SCHEDULE 1.1(h) Page 1 of 3
PROMISSORY NOTE
Agreement.
AU or y partof the Principal may be pre-paid at any time, and from time to time, without notice,
penalty or boon, upon payment of latere* to tht date of wch prepayment.
This Note Atit become due and payable before the above-mentioned maturity date Immedlat.ly upon
*2*^" TOVm:(A)thevolunUxyorinvoluntaiyfiUngofnpeUdontobankruptcy
or for reorganization, execution or m ""S ".,.,. ^oiic-iion ror anpotnunent or appointment of any receiver;
_ ^ ^ ^ ^ ^
aoy party liable hereon.
This note tod bo governed by and construed in accordance with the laws of the Province of British
Columbia and the laws of Canada applicable therein. ^
IN WITNESS WHEREOF, the undersigned has c*u*4 *!> Note to be duly signed this tfh day of
October, 1995.
PROMISSORY NOTE
Shareholders Loan Advance #1.0
US$1,000,000.00
All or any part of the Principal may be pre-paid at any time, and from time to
time, without notice,, penalty or bonus, upon payment of Interest to the date of such
prepayment.
This Note shall become due and payable before the above-mentioned maturity
date immediately upon the happening of any of the following events, TO WIT: (A) the voluntary
or involuntary filing of a petition in bankruptcy or for reorganization, execution of an assignment
for the benefit of creditors, calling a meeting of creditors, appointment of a liquidating agent or
committee, offer of composition, application for appointment or appointment of any receiver; (B)
Sie deS in payment when due of interest under this Note; or (C) if the undersigned is in
breach of any term, condition, representation or warranty under the Asset Purchase
Agreement, or the Shareholders Agreement.
The undersigned hereby waives presentment, protest and notice of every kind
and description and waives any defences based upon and any. and all indulgences and
forbearances which may be granted by the holder to any party liable hereon.
This note shall be governed by and construed in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable therein.
Authorized Signatory
SCHEDULE 1.1(h) Page 3 of 3
PROMISSORY NOTE
Shareholders Loan Advance #1.0
US$1,000,000.00
VANCOUVER, BRITISH 'COLUMBIA
October 19,1995
Due Date; October 19,' 1998
SStan Dollar ($1,000,000) In lawful money of the United States (foe T^WWW
THAN36 months from the date on which this Note Is issued as referenced above, together with
^^^v^ShdM thereof, calculated annually on the anniversary date of this
No*^t^X^SmZ^ rate over the preceding 12 month period as declared by the
nrihrimTbank:oftte intoned as Its prime interest rate for U.S. dollar commercial loansm
SS wlfo^ merest at the same rate. Interest shall be paid at maturity of
this note.
This Note Is Issued pursuant to Assignment and Assumption Agreement made
as of the 19th day of October.1995, between the undersigned and BCHI Power as evidence of
the obligations of the undersigned thereunder.
All or any part of the Principal may be pre-paid at any time, and from time to
time, without notice, penalty or bonus, upon payment of interest to the date of such
prepayment.
This Note shall become due and payable before the above-mentioned maturity
<<*.
d immadtaW^^ of the
TZ!mnnPnfl^Immlnb^^ or following events. TO
for reorganization, WIT: (A)
execution the assignment
of an voluntary
orlnvolun^
This note shall be governed by and construed In accordance with the laws of the
Province of British Columbia and the laws of Canada applicable therein.
Authorized Signatory,.
SCHEDULE 2. \(b)
At any time after the commissioning of the Raiwind Project, and subject to receiving any
necessary lender and sponsor and Government of Pakistan approval, BCHIL may advise SNC
that it wishes to exercise the right specified in Section 2.1(b) of the Master Agreement, by notice
in writing delivered to SNC (the date of delivery of such notice being the "Valuation Date").
Thereupon, within ten (10) business days after the Valuation Date, BCHIL and SNC shall engage
a third party business valuator (the "Valuator"), who shall be acceptable to each of SNC and
BCHIL, to determine the Purchase Price as at the Valuation Date on the basis of the most recent
financial information at the time of the Transaction, in accordance with the principles set out
below, and shall require the Valuator to complete and deliver such valuation to BCHIL and SNC
within thirty (30) days after the date of such engagement (the "Pricing Date"). The cost of the
Valuator shall be borne by SNC and BCHIL on an equal 50:50 basis.
If either or both of SNC and BCHIL notifies the other within ten (10) business days after the
Pricing Date (the date of delivery of such notice being the "Dispute Date") that they do not agree
that the Purchase Price was properly determined by the Valuator in accordance with this
Schedule 2.1(b) by reason of error of the Valuator, then either or both shall have the right to
engage one other third party business valuator (the "Consultant") who shall be acceptable to each
of SNC and BCHIL, within ten (10) business days after the Dispute Date, to make a final
binding and' confidential determination on the specific points in issue regarding the Valuator's
determination of the Purchase Price, and shall require the Consultant to deliver such
determination (the "Determination") to SNC and BCHIL and the Valuator within fifteen (15)
business days after the date of such engagement (the date of delivery of such Determination
being the "Clarification Date"), and thereupon SNC and BCHIL shall instruct and require the
Valuator to redetermine the Purchase Price on the basis of the Determination and to deliver such
redetermined Purchase Price to SNC and BCHIL within fifteen (15) business days after the
Clarification Date (and the Pricing Date shall be deemed to be extended to the date of delivery to
BCHIL of such redetermined Purchase Price). The cost of the Consultant shall be borne by the
party who engages the Consultant and if engaged by both shall be borne by SNC and BCHIL on
an equal 50:50 basis.
If the Purchase Price so determined is acceptable to BCHIL, BCHIL shall have the right but not
the obligation to require SNC to purchase all of its shares in Power and to assume the
Obligations and to pay BCHIL the Purchase Price, by notice in writing (the "Notice") to SNC
within fifteen (15) business days after the Pricing Date (the date of delivery of such Notice being
the "Exercise Date"), and SNC shall purchase the shares and assume the Obligations at a closing
which shall.be the next business day which is fifteen (15) days after the Exercise Date.
If BCHIL does not deliver the Notice within fifteen (15) business days after the Pricing Date,
BCHIL shall have no further right to require SNC to purchase BCHIL's shares in Power and to
assume the Obligations pursuant to Section 2.1(b) of the Master Agreement until the date which
is three (3) years after the Valuation Date (the "Put Again Date"). At any time on or after the
Put Again Date, BCHIL shall again have the right, but not the obligation, to require SNC to
purchase BCHIL's shares in Power and to assume the Obligations in accordance with the
provisions of Section 2.1(b) of the Master Agreement and the provisions of this Schedule 2.1 (b)
shall apply mutatis mutandis. (BCHIL's rights pursuant to Section 2.1(b) and Schedule 2.1(b) of
the Master Agreement may be exercised at any time and any number of times, provided that at
least three (3) years shall have elapsed after the last Valuation Date.)
00036W8298W22.EIH
31497/730/WP51
During the period between the Valuation Date and the Closing Date there shall be nn
distribution of the profits of Power to its shareholders. n
h\ * * The Pu1rchase ft** sha11 be an amount equal to forty percent (40%) of the sum of
il^nh'^T?^116 f *?
paragraph 2 below) foture *
discounted at aflows of Pwer
rate equal (hurdle
to SNC's detoBDined tai aiord^ceTim
rate for after-tax mtS rate of
(b) the value of the other net assets of Power (as determined in paragraph 3 below) based on the
SE? SnT^n0nrrlidated C,mbined *""" stat o?Po4r a^d Spov^r
Sciple? statel*ents") prepared in accordance with generally accepted accounting
2. The future cash flows of Power will be comprised of and valued as follows:
?* * Th. feasted dividend stream of the Sponsor Shares of SEPCOL indirectly held
by Power (mcludmg any cash available for distribution of dividends in SEPCOL) net of
Pakistani withholding tax on foreign dividends, for the period commencing on the
Valuation Date and ending on the expiry of the term of the Power Purchase Agreement
provided that if any SNC Contribution has been made and remains outstanding then the
parties agree that the amount otherwise forecasted to be received as dividends on the
Sponsor Shares of SEPCOL shall be deemed to be reduced by the net present value of the
.amount of such forecasted dividends required to reimburse in full the then outstanding
SNC Contribution; 6
2.2 Plus the forecasted fees to be earned by Power under the Operations and
Maintenance Contract entered into between Power and SEPCOL for the period
commencing on the Valuation Date and ending on the expiry of the Operations and
Maintenance Contract; for the purpose hereof it wttl be assumed that the term of the
Operations and Maintenance Contract will not be extended;
2.3 Plus Power's indirect interest in any dividend received by Southern but not
distributed to Southern's shareholders, net of dividends declared by Southern but not vet
paid; J
2.4 Less the forecasted operating expenses of Power during such periods;
on the basis of the most recent financial information and reasonable assumptions at the Valuation
Date.
3 The value of the other net assets of Power shall be total assets less total liabilities
as reflected on the Financial Statements, as adjusted for the following:
3.1 Power's indirect investment in the tradeable shares of SEPCOL shall be valued as
the market value of such shares as quoted on the Karachi Stock Exchange at the
Valuation Date, converted into U.S. Dollars at the rate of exchange prevailing at the
Valuation Date;
00036W8298W22.EIH
31497/730/WP51
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