PWS_Redacted.pdf

EXPORT-IMPORT BANK ON BEHALF OF

OGC TO PROVIDE LEGAL SERVICES RELATED TO RELIANCE TRANSACTIONS

PERFORMANCE WORK STATEMENT (PWS)

September 11, 2019

1.0 INTRODUCTION

The Contractor shall provide all personnel, equipment, supplies, facilities, transportation, tools, materials, supervision, and other items and non-personal services necessary to perform legal services related to Reliance Transactions as defined in this Performance Work Statement.

2.0 BACKGROUND

The Contractor must possess expertise in international finance and related New York and English laws, to act as international counsel for EXIM Bank in connection with the following EXIM Bank Transactions (i) no. AP085664XX-India (the Samalkot Transaction), (ii) no. AP085392XX-India (the Sasan Transaction); (iii) no. AP086436XX-India (the Rajasthan Transaction); and (iv) no.

AP086226XX-India (the Dahanu Transaction and together with the Samalkot Transaction, Sasan Transaction, and Rajasthan Transactions, the Reliance Transactions)

Except for the Sasan loan, each of the Reliance Transactions is designated as an “impaired asset” by EXIM Bank’s Asset Management Division (AMD) and as such, it is considered to represent a high risk of loss. The loans to Samalkot, Dahanu and Rajasthan are in payment default. Sasan, which suffers from multiple technical defaults, is on AMD’s watch list. The Samalkot Transaction direct loan . The the Dahanu Transaction while the Rajasthan . Sasan’s approximate

Reliance Transactions.

Although EXIM Bank is not yet considering enforcement action in any of the Reliance

Transactions, given the issues affecting the sponsors and the outstanding defaults, it is likely that EXIM Bank may need to consider doing so in the near future. However, for each Reliance Transaction, EXIM Bank requires ad hoc advice on the financing documents for each of these transactions. For these reasons, as well as those outlined below, EXIM needs to procure the Contractor’s services to protect and advocate for EXIM’s interests with respect to each Reliance Transaction.

Samalkot

The Samalkot Transaction was structured as a project financed loan to finance construction and operation of a gas fueled power plant in India, which is owned by the Samalkot Borrower. As an additional credit support, the Samalkot Borrower's payment obligations to EXIM Bank were guaranteed by R-Power. Due to the Indian government’s failure to provide the requisite gas supply to the project, the power plant was only partially constructed and is not operational. As a result, it cannot generate revenues to enable the Samalkot Borrower to repay the loan. Further, R-Power failed to fulfill its obligations under the finance documents, including its guarantee undertaking to EXIM Bank.

At the beginning of 2018, EXIM Bank negotiated a rescheduling arrangement with the Samalkot

Borrower and R-Power. Since that time, however, the Samalkot Borrower and R-Power experienced difficulties in making timely payments of debt service. They failed to make payment on the debt service installment which was originally due on September 30, 2018. This payment was subsequently deferred to October 31, 2018, and the Samalkot Borrower requested a one-year payment moratorium. EXIM Bank restructured the loan on June 28, 2019 but it is possible that there may be a breach of the restructuring terms. If such breach occurs, EXIM Bank may want to commence enforcement action against the Indian obligors. Such action can be implemented by (i) placing the Samalkot Borrower and/or R-Power in an involuntary restructuring under the Indian Insolvency and Bankruptcy Code (the “Bankruptcy Code”), (ii) commencing an action in an Indian court on mortgages/pledges of the Samalkot Borrower's assets, (iii) starting court proceedings in England against R-Power with respect to the English law governed Guarantee granted by R-Power and enforcement of any such judgement in India and/or (iv) starting an arbitration process in London against the Samalkot Borrower and enforcing an arbitral award in India. EXIM Bank must have access to qualified Indian, New York and English legal counsel in order to protect its legal rights and interests in any such enforcement action(s).

Dahanu

The Dahanu solar project has been operating broadly as was forecasted at origination. However, while the project’s output has been as predicted, various events of defaults over the years with respect to hedging requirements and financial covenants have occurred. In addition, by late 2018, R-Infra, the offtaker under the original power purchase agreement (“PPA”), became in arrears for payments due to Dahanu, totaling approximately US$17 million. Additional breaches occurred in August 2018 when the 25-year PPA was assigned to a new entity without lenders’ consent.

Furthermore, due to regulatory requirements, the assigned PPA contained a lower price than what R-Infra agreed to pay at origination (from Rs17.91 to Rs10.31/kWh from FY 2016-18 and Rs10.30/kWh for FY 2019 and thereafter).

In September 2018, without lenders’ knowledge, R-Infra entered into an agreement whereby it agreed to pay Dahanu the shortfall amount between the tariff originally agreed in the PPA and the current lower tariff in the assigned PPA (such “Shortfall Amount”, about Rs7/kWh). R-Infra has made none of these Shortfall Amount payments to date. In addition, various payments by the current offtaker have been delayed and/or not paid. Dahanu defaulted on its March 2019 debt service payment. It appears at this point that the existing defaults cannot be cured out of court and the lenders are now developing a legal enforcement strategy for Dahanu.

Rajasthan

Despite efforts by Rajasthan to correct technical issues with the project, the operational status of the Rajasthan project remains significantly below the level required under the PPA. It is unlikely that the project will be capable of achieving the necessary level of performance on a long term basis in order to service the debt based on the reduced operational cash flows (current cash flows cover OPEX and 43% of the debt service). Previously, the remaining debt service was funded by R- Power on a non-contractual basis through sponsor subordinated loans in order to avoid the borrower triggering a payment default. In July 2018, no such loans were received and the borrower exhausted the debt service reserve account to make its debt service payment. In January 2019, the borrower defaulted on its payment obligations.

Staff, together with EXIM Bank’s co-lenders, is developing a legal strategy for restructuring the debt but the lenders are prepared to commence an enforcement action against Rajasthan if the restructuring effort is not successful. Both require international and local counsel advice to ensure that all avenues are considered properly and completed in a correct and expeditious manner.

Sasan

Sasan is operating and generating revenues and is not in payment default, which is required under Indian law for enforcement of lender’s security interest in court, or, initiation of insolvency resolution proceedings. However, Sasan suffers from multiple non-payment defaults which also include (i) a cross-default triggered by R-Power’s failure to repay the accelerated Samalkot loan under its guarantee and (ii) a default based on R-Power’s inability to pay its debts as they fall due, suspension of debt payment or, by reason of actual or anticipated difficulties, commencement of negotiations with at least one of R-Power’s creditors with a view to rescheduling its indebtedness.

The events of default noted in (i) and (ii) would be cured, and thus not available as the basis for loan acceleration, if the Samalkot loan is restructured as discussed above, however other technical defaults will remain. The Sasan loan can be accelerated on the basis of these uncured events of default and failure to pay the accelerated amount would trigger a payment default.

Sasan indicated to EXIM Bank that it wishes to refinance its existing loans denominated in foreign currencies. If Sasan is successful in securing refinancing, then the Contractor would be required to assist staff to ensure that (i) all regulatory approvals for the refinancing were obtained by Sasan; (ii) there are no adverse consequences to EXIM Bank under Indian law in permitting early repayment of the EXIM Bank loan, and (iii) repayment of the EXIM Bank loan is properly documented.

3.0 SCOPE

The Contractor shall provide all professional services (by in-house or “of counsel” personnel, subcontractors or consultants), labor, equipment, materials, postage, supervision, and incurring all routine, necessary expenses to provide legal advice in connection with the proactive monitoring and possible enforcement actions in each of the Reliance Transactions and to represent EXIM Bank’s interests.

4.0 OBJECTIVES (NATURE OF WORK)

Desired Outcome: Contractor’s advice to EXIM, advocacy of EXIM’s interests and proactive monitoring of the Reliance Transaction leads to a maximization of recovery by

EXIM.

Constraints: Contractor must not have any organizational conflict of interests (as defined in FAR 9.5) that would interfere with its ability to zealously and effectively represent EXIM’s interests. Contractor must not have any conflict of interests based upon its prior or ongoing representation of any other party that would that would interfere with its ability to zealously and effectively represent EXIM’s interests.

5.0 APPLICABLE DIRECTIVES

Contractor must abide by all relevant codes of professional conduct applicable to the licensed attorneys it employs/retains to perform the services, to include ethics rules and interpretative opinions of the state bars, and any other applicable laws pertaining to the conduct of Contractor’s professional legal practice. Outside legal advice is required to navigate the complex issues surrounding the regulatory/local law issues applicable to the Indian borrowers as well as issues that may arise with respect to possible enforcement avenues.

6.0 GOVERNMENT FURNISHED INFORMATION OR PROPERTY

EXIM shall provide to Contractor copies of or access to the relevant transaction files, project finance records, internal EXIM communications, and where permissible without violating a privilege or security standard, deliberative communications that EXIM may possess regarding any aspect of the Reliance Transactions. EXIM may make such Government Furnished Information available to Contractor via use of a commercially available shared file application.

7.0 SPECIFIC REQUIREMENTS/TASKS

Contractor shall, immediately upon award of the Contract, commence providing legal services primarily with regard to the Samalkot Transaction. However, Contractor is expected to familiarize itself with the substance and procedural posture of each of the other Reliance Transactions, within a short time following contract award. For each Reliance Transaction, the Contractor will be required to:

Task 1: Legal Services

• provide advice (in the form of a memorandum, written note sent via email, or oral input as appropriate) regarding EXIM Bank’s enforcement rights under New York and, if applicable, English law as related to (i) EXIM Bank’s secured lender rights under the credit agreement, the common terms schedule and related documents (such documents, for each Reliance Transaction, Transaction Documents); and (ii) EXIM Bank’s rights resulting from R-Power’s undertakings as sponsor and guarantor, as applicable;

• provide legal advice regarding the existing Transaction Documents to ensure EXIM Bank fully understands all current, enforceable obligations and duties under each Reliance Transaction;

• review and propose solutions to mitigate risks associated with any proposed amendments of the Transaction Documents (Amended Transaction Documents);

• negotiate, draft and review any Amended Transaction Documents;

• conduct any additional legal due diligence requested by US Exim with respect to any issues arising in connection with Transaction Documents and Amended Transaction Documents;

• provide EXIM with regular summaries of the status of its efforts, and shall consult with EXIM in connection with all major decisions to be made;

• retain Indian project finance and/or bankruptcy counsel, provided that one law firm or attorney may provide both such Indian legal services (the provider(s) of such services, hereinafter referred to as Indian Counsel);

• retain consultants, technical experts, other specialized law firms or attorneys, expert witnesses, or other specialists (each, a Subcontractor) to assist Contractor with, or in support of, any legal services contemplated in the Statement of Work;

• provide strategic advice on EXIM Bank's potential actions, as required;

• provide advice on the reservation of rights letters as required;

• represent EXIM Bank as needed, in (i) arbitration proceedings in London against the

Borrower and (ii) court proceedings against R-Power in England; and

• advise on the New York and English law aspects of any enforcement action(s).

• provide other legal services pertaining or relating to any of the Reliance Transactions, as deem necessary by the OGC assigned attorney to preserve EXIM’s lender rights.

In addition, because several transaction documents are governed by Indian law, and in anticipation of potential enforcement actions, Contractor must retain Indian project finance and/or bankruptcy and litigation counsel, provided that one law firm or attorney may provide all such legal services under Indian law (the provider(s) of such services, hereinafter referred to as Indian

Counsel). The identity of any Indian Counsel will be subject to EXIM’s prior approval, as further described below. Furthermore, EXIM reasonably foresees that Contractor may require the services of consultants, technical experts, other specialized law firms or attorneys, expert witnesses, or other specialists (each, a Subcontractor) to assist Contractor with, or in support of, any legal services contemplated in this Performance Work Statement. The retention of each Subcontractor will be subject to EXIM’s prior approval, in addition to the requirements stated in FAR 52.244-2, as is standard commercial practice in the legal industry.

Task 2: Historic Records

• Prepare and deliver to EXIM complete historic records of legal services provided previously by Contractor and Subcontractors in preservation of EXIM’s rights across all Reliance Transactions.

• Subject to the Contractor being satisfied that any of its or a Subcontractor’s claim for legal professional privilege in respect of any material to be made available to EXIM are preserved and that disclosure of material to EXIM would not cause the Contractor to be in breach of any obligations of confidentiality, the Contractor will procure the historic record, including legal memoranda and email correspondence as and when required. All historic record material provided to EXIM shall be marked with a privilege indication and shall be compiled and presented electronically in one file for the relevant actions/decisions transpiring prior to the date of the execution of this contract.

8.0 DELIVERABLES

Item # Deliverable Format Due Date

1. Monthly (or upon request) status report Email Within one week of the close of the prior month, or as specified by the OGC attorney

2. Delivery of legal memoranda or written advice via email setting forth strategy in response to discrete legal issues as they may arise

Email As specified by the assigned OGC attorney

3. Delivery of any update to legal strategy memorandum for each new claim assigned by the OGC attorney

Email As specified by the assigned OGC attorney

4. Acknowledgement of inquires from OGC/EXIM officers

Email Within one business day for receipt of the inquiry

5. Confirmation of Retention of Local Counsel/Subcontractors as documented by contracts/engagement letters

Email Within one month of retention

6. Delivery of any Amended Transaction Documents or other legal documents

Email As specified by the OGC attorney

7. Delivery of complete historic records of legal services provided previously by Contractor

Email As specified by the OGC attorney

9.0 PERFORMANCE REQUIREMENT SUMMARY (PRS)

Task or Deliverable

Performance Standard

Surveillance Method

Performance Rating Incentives/Dis incentives

1- Monthly (or upon request) status report;

Performance will be assessed based upon the ability of the Contractor to provide Deliverables by the Due Date, as specified in Section 8 above.

Review by COR and assigned

OGC

Attorney no errors in work product

CPARS

rating/award of options

2- Delivery of legal memoranda or written advice via

Performance will be assessed based upon the ability of the

Review by COR and assigned

OGC

Attorney no errors in work product

CPARS

of options email setting forth strategy in response to discrete legal issues as they may arise;

Contractor to provide Deliverables by the Due Date, as specified in

3- Delivery of any update to legal strategy memorandum for each new claim assigned by the OGC attorney;

assessed based upon the ability of the Contractor to provide Deliverables by the Due Date, as specified in assigned

OGC

Attorney no errors in work product

CPARS

rating/award of options

4- Acknowledge ment of inquires from

OGC/EXIM

officers;

assessed based upon the ability of the Contractor to provide Deliverables by the Due Date, as specified in assigned

OGC

Attorney no errors in work product

CPARS

rating/award of options

5- Confirmation of Retention of Local Counsel/Subc ontractors as documented by contracts/eng agement letters

On time Review by assigned

OGC

attorney and COR, and approved by the Contracting Office

Subcontractor to perform without errors in work product

CPARS

Award of options

6- Delivery of any Amended Transaction Documents or other legal documents.

assessed based upon the ability of the Contractor to provide Deliverables by the Due Date, as specified in assigned

OGC

Attorney no errors in work product

CPARS

rating/award of options

7- Delivery of complete historic records of legal services provided previously by Contractor

Performance will be assessed based upon the ability of the Contractor to provide Deliverables by the requested Due Date.

Review by COR and assigned

OGC

Attorney no errors in work product

CPARS

of options