6. Section Headings. The Section headings used in this Agreement

 EXHIBIT 10.36

     ASSUMPTION AGREEMENT AND RELEASE, dated as of July 31, 1996, 
made by PANDA INTERHOLDING CORPORATION, a Delaware corporation 
("Panda"), in favor of GENERAL ELECTRIC CAPITAL CORPORATION, a New
York corporation ("GE Captial"), and FLEET NATIONAL BANK, a national
banking association, formerly known as Shawmut Bank Connecticut,
National Association, as Security Agent under the Security Deposit
Agreement (the "Security Agent") for the benefit of GE Capital and the
Owner Trustee, in connection with the Construction Loan Agreement and
Lease Commitment, dated as of March 30, 1995 (as the same may be
amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"; capitialzed terms used herein and not otherwise
defined having the meanings set forth in the Loan Agreement) among
Panda-Brandywine, L.P., a Delaware limited partnership (the "Partnership"),
Panda Brandywine Corporation, a Delaware corporation, and GE Capital,
and the other Transaction Documents.

                   W I T N E S S E T H:

     WHEREAS, pursuant to the Loan Agreement GE Capital has agreed to
(a) provide construction financing for the Project, (b) issue the Lettes
of Credit as collateral security for certain obligations of the Partnership
under the Power Purchase Agreement, (c) acting through the Owner Trustee,
lease the Site from the Partnership and sublease the Site back to the
Partnership, (d) upon completion of the Project, acting through the 
Owner Trustee, purchase the Facility from the Partnership and lease the
Facility back to the Partnership, and (e) upon completion of the
Project, make Equity Loans to the Partnership or the Partners, subject
to and upon the terms and conditions set forth in the Loan Agreement and
the other Transaction Documents;

      WHEREAS, on October 27, 1995, Panda Holdings, Inc., a Delaware 
corporation ("Holdings"), merged with and into Panda Energy Corporation, a
Texas corporation ("PEC") (the "Merger"), and pursuant to the Merger and
the Assumption Agreement dated as of October 27, 1995 made by PEC in favor
of GE Capital and the Security Agent, PEC assumed and succeeded to all 
of Holdings' rights, obligations and liabilities, including, without
limiation, Holdings' rights, obligations and liabilities under the Loan
Agreement, the Stock Pledge Agreement and the other Transaction Documents
to which Holdings was a party;

      WHEREAS, PEC desires to assign and transfer to Panda, its direct
wholly-owned subsidiary, 100% of the capital stock of the General Partner,
the Limited Partner and Brandywine Water Company, and its rights, obligations
and liabilities under the Loan Agreement, the Stock Pledge Agreement and
the other Transaction Documents to which PEC is a party (the "Transfer"); and

      WHEREAS, the Security Agent and GE Capital are willing to agree to the
Transfer on the condition that Panda execute and deliver this agreement to 
assume all of PEC's rights, obligations and liabilities under the Transaction
Documents, other than the obligations imposed on PEC pursuant to Amendment
No. 2 thereto.  

      NOW, THEREFORE, in consideration of the premises and covenants contained
herein Panda hereby agrees with the GE Capital and the Security Agent as
follows:

      1.     Assumption.  Panda hereby assumes all obligations and liabilities
of, and succeeds to the rights of, PEC under the Loan Agreement, the Stock
Pledge Agreement, as amended (other than those obligations imposed on PEC
pursuant to Amendment No. 2 to the Stock Pledge Agreement), and each of the
other Transaction Documents and hereby joins in the Transaction Documents to
which PEC is a party for the purpose of agreeing to (a) be bound by all
covenants and agreements attributable to PEC under the Transaction Documents,
(b) perform all obligations required of PEC under the Transaction Documents and
(c) grant the Liens provided for in the Collateral Security Documents to which
PEC is a party.  Without limiting the foregoing, Panda hereby (i) makes each
of the representations and warranties made by PEC in or pursuant to the 
Transaction Documents on and as of the date hereof, after giving effect to
the Assignment and Transfer and (ii) hereby confirms and ratifies the grant
of Liens and security interests by PEC to the Security Agent, for the 
benefit of GE Capital and the Owner Trustee, pursuant to the Collateral
Security Documents.

      2.     Further Assurances.  Panda hereby further agrees to execute such
other documents, make such filings and to take such other actions as GE 
Capital and the Security Agent may reasonably request from time to time in
connection with the Assignment and Transfer and the assumption of the 
obligations and liabilities of PEC under the Loan Agreement and the other
Transaction Documents pursuant to this Assumption Agreement and Release.

      3.     Release.  From and after the execution and delivery of Amendment
No. 2 to the Stock Pledge Agreement and the consummation of the Transfer,
the Security Agent, GE Capital and the Owner Trustee hereby release and 
forever discharge PEC from any and all further liabilities and obligations
of the Pledgor under the Stock Pledge Agreement (except with respect to the
period occurring prior to the execution and delivery of Amendment No. 2 to
the Stock Pledge Agreement and the consummation of the Transfer) and 
provided that the foregoing shall not limit any other obliations of PEC
in any other capacity under the Stock Pledge Agreement (including 
pursuant to Section 8(g) thereof).

      4.     Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such 
jurisdiction, be ineffective to the extent of such prohibition or 
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall 
not invalidate or render unenforceable such provision in any other
jurisdicition.

      5.      Amendments.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified 
except by a written instrument executed by Panda and GE Capital and the
Security Agent.

      6.      Section Headings.  The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.  

      7.      Successors and Assigns.  This Agreement shall be binding upon
and shall inure to the benefit of the successors and assigns of the Security
Agent, GE Capital and the Owner Trustee.

      8.       GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

      9.       Counterparts.  This Agreement may be executed by one or more
of the parties hereto on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.

      IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.

                                    PANDA INTERHOLDING CORPORATION

                                    By:  /s/  James D. Wright
                                    Title:

Agreed to and accepted:

GENERAL ELECTRIC CAPITAL CORPORATION

By:  /s/  Michael J. Tzayrolis
Title:  Manager of Operations

FLEET NATIONAL BANK,
  as Security Agent

By:  /s/  K. Larimore
Title:  Assistant Vice President 

Basic Info X:

Name: 6. Section Headings. The Section headings used in this Agreement
Type: Used in this Agreement
Date: Oct. 18, 1996
Company: PANDA FUNDING CORP
State:

Other info:

Date:

  • July 31 , 1996
  • March 30 , 1995
  • October 27 , 1995

Organization:

  • PANDA INTERHOLDING CORPORATION
  • Shawmut Bank Connecticut
  • Construction Loan Agreement and Lease Commitment
  • Panda Brandywine Corporation
  • Power Purchase Agreement
  • Panda Holdings , Inc.
  • Panda Energy Corporation
  • Brandywine Water Company
  • Collateral Security Documents
  • Assumption Agreement and Release
  • Stock Pledge Agreement

Location:

  • L.P.
  • Delaware
  • Texas
  • Panda
  • NEW YORK

Person:

  • Lettes
  • James D. Wright
  • Michael J. Tzayrolis
  • K. Larimore

Percent:

  • 100 %