Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
Serial Number: CCBSXZD-970001-B
On-Lending Agreement on Using German Export Credit
by Yangcheng International Power Company Ltd.
between
Shanxi Branch of China Construction Bank
(the Lender)
and
Yangcheng International Power Company Ltd.
(the Borrower)
/ /1997
1
Contents
Article 1. Definitions
Article 2. Amount and Use of the Loan
Article 3. Preconditions for Using the Loan
Article 4. Withdrawal and Term of Withdrawal
Article 5. Interest on the Loan and Expenses
Article 6. Repayment and Early Prepayment
Article 7. Interest in Arrears
Article 8. Force Majeure
Article 9. Insurance
Article 10. Taxation
Article 11. Guarantee
Article 12. Agreed Matters
Article 13. Events of Default
Article 14. Obligation of the Borrower independent of the 'Commercial Contract'
Article 15. The Lender's Exercise of Rights
Article 16. The Lender's Commitments
Article 17. Assignment and Change of Rights and Obligations
Article 18. Amendment and Supplement
Article 19. Settlement of Disputes
Article 20. Appendices
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Article 21. Miscellaneous
Article 22. Effectiveness
Article 23. Termination
Article 24. Mode of Notification
3
Appendices:
1. Accord on the Repayment of Special Fund of Foreign Loan by Yangcheng
International Power Company
Ltd. ('Special Fund Accord')
2. 'The Plan for the Finalization of Capital of Yangcheng International
Power Company Ltd.'
3. 'Guarantee for Repayment'
4. 'Schedule for Repayment of Principal with Interest'.
4
On-Lending Agreement on Using German Export Credit
by Yangcheng International Power Company Ltd.
The Borrower: Yangcheng International Power Company Ltd.
Address: No.151, Shuangtasi Street, Taiyuan City, Shanxi Province.
The Lender: Shanxi Branch of China Construciton Bank
Address: No. 6, Yingzexi Avenue Taiyuan City, Shanxi Province.
In order to construct Phase I Project of the Shanxi Yangcheng Power
Plant, the Borrower has entrusted China Construction Bank to raise fund
overseas. Authorized by the Head Office of China Construction Bank, the Lender
and the Borrower have, through friendly discussions and in accordance with the
Foreign Financing Agreement executed between the Head Office of China
Construction Bank and the Foreign Lending Bank, reached the following Agreement
concerning the use of the above- mentioned loan:
Article 1: Definitions.
Except as provided otherwise, in this On-Lending Agreement:
'Project' shall refer to Phase I Project of Shanxi Yangcheng Power Plant.
'Foreign Lending Bank' shall refer to the German KFW Bank.
'Foreign Financing Agreement' shall refer to the Financing Agreement executed
on August 29,1996 between China Construction Bank and German KFW Bank concerning
using the German Export Credit with respect to the Commercial Contract
No.961JBJGB/011022DE US as well as amendments made thereafter.
'Import Agent' shall refer to China Power Technology Import - Export Company.
'Exporter' shall refer to Siemens Company and Foster Wheeler Inc.
5
'Guarantor' shall refer to North China Electric Power Group Corporation, Shanxi
Provincial Power Company, Jiangsu Provincial Power Company, Shanxi Province
Economic Construction and Investment Corporation, Jiangsu Province Investment
Corporation.
'Commercial Contract' shall refer to the No. 961JBJGB/011022DE.US contract
executed on August 22,1996 between China Electric Power Technology Import-Export
Company and German Siemens and US Foster Wheeler Inc.
'The Day for Issuing and Accepting the Certificate' shall refer to the date for
issuing and accepting the Certificate set forth in the Commercial Contract.
'Insurance Institution for Export Credit' shall refer to the Holmes Export
Credit Security Bureau.
'Insurance Premium for Export Credit' shall refer to the Export Credit Insurance
Premium collected by Holmes Export Credit Security Bureau.
'Day' shall refer to the actual number of days including festivals and
holidays.
'Business day' shall refer to a day when both China Construction Bank and the
New York Federal Reserve Bank are open for business.
'Interest Payment Day' shall refer to the Interest Payment Day set forth in
the Foreign Financing Agreement.
'Repayment Day' shall refer to the Repayment Day set forth in the Foreign
Financing Agreement.
'Withdrawal Term' shall refer to the period from the effective date of this
Agreement to the deadline of withdrawal set forth in the Foreign Financing
Agreement.
'Payment of Instruments' shall refer to the Instruments which shall be
submitted when making payment for the Commercial Contract.
'LIBOR' shall refer to the Libor set forth in the Foreign Financing Agreement.
The headings of Articles hereof are inserted for convenience of reference only
and are not intended to affect the interpretation of this Agreement.
6
Article 2: Amount and Use of the Loan:
2.1. The total amount of on-lending under this On-lending Agreement shall not
exceed [***], among which: [***] is for the payment of part of the payable
under the Commercial Contract; [***] is for the payment of construction
interest; [***] is for the payment of [***] of the export credit insurance
premium (the actual incurred fees shall govern.)
2.2. In the event that the actual on-lending amount is less than the on-lending
amount under this On-lending Agreement, the rights and obligations of the
Borrower and Lender to the actual on-lending amount shall not be affected.
Article 3: Preconditions for Using the Loan.
The loan under this On-lending Agreement can only be used when all the following
conditions are met:
3.1. Precondition for the initial withdrawal.
3.1.1. The Borrower shall submit the following documents at least 30 days prior
to the date of initial withdrawal to the Lender and the Lender shall
confirm the receipt of the following documents:
1) Duplicate of the Borrower's effective business license issued by
administration authorities for industry & commerce.
2) The JV Contract of the Borrower, the Articles of Association of the
enterprise, approval documents of MOFTEC or other documents having the same
effect.
3) The project establishment document approved by the State Planning
Commission.
4) The Borrower's letter of authorization authorizing the China Construction
Bank to raise fund overseas.
5) The State Planning Commission's approval to the project feasibility study
report and other relevant documents.
6) The Borrower's receipt of foreign exchange on-lending loan, registration
certificate issued by the local Administration of Exchange Control and
notice for establishment of account for repayment of principal with
interest of the foreign exchange on-lending loan.
7) Duplicate of the Commercial Contract.
8) Duplicate of the Power Purchase Contract.
9) Duplicate of the Engineering Procurement and Construction Services
Contract.
10) Unconditional and irrevocable letter of guarantee for repayment provided by
the Borrower's guarantor.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
7
11) The report for project commencement concerning Yangcheng Power Plant and
its associated power transmission and substation project approved by
competent State authorities.
12) Effective evidence that the Borrower has obtained the valid certificate for
insurance issued by insurance corporation of China in accordance with
Article 9 of this Agreement.
13) The procurement list of the Borrower and other documents deemed necessary
by the Lender.
3.1.2. The Foreign Financing Agreement has been signed by the parties and has
become effective.
3.1.3. The Foreign Lending Bank has notified the Lender that the export credit
insurance has become effective.
3.1.4. The Borrower has opened a foreign exchange on-lending special account and
a foreign exchange on-lending loan account for the repayment of principal
with interest in China Construction Bank or its designated branches.
3.1.5. The Borrower has committed no event of default or any action that might
lead to events of default.
3.2. Preconditions for each withdrawal (including the initial withdrawal)
3.2.1. The Foreign Financing Agreement remains valid.
3.2.2. The capital of the project as well as auxiliary RMB fund shall be
finalized according to the plan. (Schedule for finalization of capital is
described in Appendix 2)
3.2.3. The Borrower has paid all the expenses due pursuant to Article 5.2. of
this Agreement.
3.2.4. Effective evidence that the Borrower has obtained the valid certificate
for insurance issued by insurance corporation of China in accordance with
Article 9 of this Agreement.
3.2.5. The procurement of goods which does not follow the procurement list
approved by the Lender and the Foreign Lending Bank has not occurred.
3.2.6. The Borrower has not committed any event of default or any action leading
to event of default.
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3.2.7. No amendment in relation to amount, time and altering the purpose of the
equipment of the 'Commercial Contract' without the consent of the Lender
has occurred or no other material amendment has been made without the
affirmation of the Lender.
3.2.8. The Borrower has reiterated that the guarantee made in this Agreement is
true, accurate and valid.
3.3. The fact that the Lender has not submitted any written or oral requirement
to the Borrower to fulfill the articles and clauses set forth in the
preconditions, or that the Lender has granted the loan to the Borrower
without the Borrower's satisfaction of the conditions set forth in the
above mentioned articles and clauses, or that the Lender has given a grace
period to the Borrower's fulfillment of the preconditions shall not be
taken for granted that the Lender has waived the right of recourse to the
Borrower's nonperformance or be interpreted as the Lender's amendment to
the On-lending Agreement.
Article 4: Withdrawal and Term of Withdrawal
4.1. The Borrower hereby authorizes the Lender to require the Foreign Lending
Bank to pay the amount of the Commercial Contract to the export traders
through the payment agent bank in accordance with the stipulations set
forth in Foreign Financing Agreement. This authorization is irrevocable and
shall not be amended without the consent of the Lender.
4.2. Within 5 days after the Lender has signed and accepted relevant instruments
under the Commercial Contract, the instruments shall be submitted to the
Import Agent for examination. The Import Agent shall, within 15 days after
the receipt of the instruments, notify the Lender in written form of its
comments. The Lender shall take the responsibility to instruct the Foreign
Lending Bank whether to make such payment.
4.3. The deadline of the withdrawal under this On-lending Agreement shall be
subject to the date set forth in the Foreign Financing Agreement.
4.4. If the Borrower applies for an extension of the withdrawal term, it shall
submit a written application to the Lender at least 45 days in advance. The
Lender shall then communicate with the Foreign Lending Bank, and if the
Foreign Lending Bank consents to it, the formalities for extending the
withdrawal for the Borrower may be
9
processed. If not, the Borrower must make withdrawal on schedule, otherwise
the unused part shall be automatically canceled.
Article 5. Interest on the Loan and Expenses.
5.1. Interest.
5.1.1. The annual interest rate of the loan under this Agreement shall be [***].
5.1.2. The Borrower shall pay interest to the Lender once in accordance with the
balance of the loan on each Interest Payment Day, the interest shall be
calculated by the actual number of days on the basis of 360 days a year
(subject to the Foreign Financing Agreement). Detailed interest payment
plan as well as the method of payment shall be carried out in accordance
with the 'Schedule for Repayment of Principal with interest' (Appendix 3),
and 'Special Fund Accord' (Appendix 1).
5.1.3. The capitalization of the insurance premium of the export credit and
interest incurred in the construction period shall be carried out in
accordance with the stipulations set forth in the Foreign Financing
Agreement.
5.1.4. In the event that the last day of the interest period falls on a
non-business day, the interest period shall be deferred to the next
business day; in the event that the next business day falls on the next
calendar month, it shall be advanced to the last business day of the
current calendar month.
5.2. Expenses:
5.2.1. Commitment fees of the Foreign Lending Bank.
The annual rate is: [***] starting from August 29,1996 to the deadline
of withdrawal stipulated by the Foreign Lending Bank, the commitment fees shall
be calculated and collected quarterly in US Dollars in accordance with the
actual number of days and the unpaid balance of the loan on the basis of 360
days a year and 30 days a month. It shall be paid by the Borrower to the Foreign
Lending Bank through the Lender in accordance with the Foreign Financing
Agreement.
5.2.2. On-lending fees of the Lender.
The annual rate is [***] in the grace period and [***] in the repayment
period. It shall be paid by the Borrower to the Lender in accordance with the
balance of the loan. The method of payment shall be identical as that described
in the above mentioned Article 5.1.2.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
10
5.2.3. Other expenses incurred under the Foreign Financing Agreement and this
Agreement, including but not being limited to attorney's fees,
notarization expenses, travel expenses, expenses for presentation of
lawsuit agency letter expenses and stamp tax incurred in the preparation of
this Agreement and other relevant documents, negotiations, signing and
implementation shall be paid by the Borrower in accordance with the request
for payment invoice of the other party.
5.3. The interest and expenses as stipulated in the above article, the fees
collected by foreign organizations and the on-lending fees shall be paid in
US Dollars cash, while the remainder shall be paid in RMB. The detailed
method of payment shall be subject to the 'Notice of Payment' submitted by
the Lender and it shall be paid within 7 days after such notice has been
received.
Article 6. Repayment and Prepayment.
6.1. Repayment of the loan.
6.1.1. This on-lending loan shall be repaid in US dollars.
6.1.2. The detailed repayment plan of the Borrower shall be subject to the
'Schedule for Repayment of the Principal with Interest' (Appendix 3).
6.1.3. The detailed method of repayment shall be carried out in accordance with
the 'Special Fund Accord' (Appendix 1) signed between the Borrower and the
Lender.
6.1.4. In this Agreement, all the Borrower's payment to the Lender shall be made
in the following sequence: payment of interest in arrears, expenses,
interest and principal. If the maturity date of any payable in this
Agreement is not a business day, it shall be deferred to the following
business day, the time deferred shall be included in the calculation of
interest for this period.
6.2. Prepayment
6.2.1. In accordance with this On-lending Agreement, the Borrower can prepay the
loan after seeking written consent from the Lender in advance, but the
Borrower shall notify the Lender the amount of prepayment at least 45 days
in advance. If it is a partial prepayment, the amount of prepayment shall
be specified.
6.2.2. The prepayment shall begin with the last installment of repayment set
forth in the 'Schedule of Repayment of Principal with Interest' (Appendix
3) in reverse order.
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6.2.3. The prepayment shall be made together with the corresponding interest and
charges thereof.
6.2.4. If the prepayment requires the approval of relevant departments in
accordance with the stipulations, the Borrower shall provide the duplicate
of the relevant approval document to the Lender.
6.2.5. The request of the Borrower for prepayment is irrevocable and the amount
of the prepayment shall not be reapplied for use.
6.2.6. The compensation fees for the Foreign Lending Bank arising from
prepayment shall be borne by the Borrower.
Article 7. Interest in Arrears
7.1. If the Borrower fails to repay any maturity payment including principal,
interest and expenses in accordance with the stipulations in this
Agreement, the Lender shall calculate and collect interests in arrears with
respect to the part of payment in arrears starting from the date of payment
(inclusive) to the date of actual date of payment (inclusive). The interest
rate shall be the highest of the following:
[***]
7.2. If the overdue exceeds half a year, compound interest shall be accrued.
7.3. The collection of the interest in arrears shall not affect the
implementation of Article 13 of this Agreement.
Article 8. Force Majeure.
In the event that one of the following happens:
1) The export credit insurance has not been obtained or the insurance of the
export credit ceases to be effective.
2) Due to economic crisis or the abrupt change in the financial market, the
corresponding loan funds can not be raised or the cost of the Foreign
Lending Bank has increased.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
12
3) Due to international or domestic political legal and taxation reasons, the
Foreign Lending Bank can not fulfill the obligations of lending set forth
in the Foreign Financing Agreement.
4) Due to adjustment and change in state policies, the Lender`s continuance of
granting loans to the Borrower or of refraining from recovering the loans
will be illegal or a breach of state policy.
5) Due to the occurrence of other events of force majeure,
the Lender is entitled to the following:
1) In accordance with the requirement of the Borrower, and under the
conditions set forth in the stipulations of the Foreign Financing
Agreement, the Lender will negotiate with the Foreign Lending Bank and
handle it in accordance with the result of the negotiations.
2) Declaring the termination of the on-lending loan.
3) Require the Borrower to repay promptly the principal with the relevant
interest and fees.
Article 9: Insurance
9.1. Upon the effectiveness of the Commercial Contract, the Borrower shall
directly make or cause the contractor for transportation, installation or
construction to cover insurance for domestic transportation of imported
goods, installation project, construction project and property all risks in
a Chinese insurance institution acknowledged by the Lender with respect to
equipment under such contract in the delivery, construction and repayment
periods. The Lender shall be considered as the first beneficiary, all the
insurance coverage shall be linked with each other and allow of no
suspension in the duration of insurance.
9.2. The Borrower shall transfer all the interests under the insurance policy to
the Lender pursuant to the stipulation of Article 9.1., the insurance
benefits shall first be used to repay the principal with interest and
expenses of the loan . With the written consent of the Lender, such
insurance benefits can be continuously used in the project construction
under this Agreement.
13
9.3. The Borrower shall be responsible for renewing the insurance on time before
the expiration of the insurance policy and the Borrower shall not suspend
the insurance for whatever reason within the validity of this Agreement.
9.4. If the Borrower fails to fulfill the above mentioned requirements, the
Borrower shall undertake that in case of any loss to the assets, the
Borrower shall not refrain from undertaking any of its obligations to the
Lender for whatever reason.
9.5. The Borrower shall bear the insurance premium incurred by insurance
coverage.
Article 10. Taxation.
The tax payable by the Lender under the Foreign Financing Agreement shall
be borne by the Borrower. The Lender shall on behalf of the Borrower, submit
application to relevant tax authority for exemption of tax in connection with
the withholding tax on foreign interest income under the Foreign Financing
Agreement. The tax payable under this On-lending Agreement shall be carried out
in accordance with Chinese tax law and relevant stipulations.
Article 11. Guarantee
The Borrower hereby guarantees:
11.1. Upon the effectiveness of this On-lending Agreement, the Borrower shall
timely, unconditionally and consecutively fulfill the responsibility and
obligation of repayment of principal with interest as well as other
obligations set forth in this Agreement without any impact whatever because
of gain or loss or repayment ability.
11.2. The Borrower is a legal person which is established in accordance with
Chinese law, existing, and engaging in legal business activities, and is
entitled to execute and perform this On-lending Agreement. The Borrower has
completed all necessary legal and administrative formalities for the
execution and performance of this On-lending Agreement.
11.3. The documents that the Borrower has provided and will provide are true,
accurate, valid and up-to-date in accordance with the requirements.
11.4. The Borrower's execution and performance of this On-lending Agreement do
not violate any of the current Chinese laws, rules and regulations, nor do
they violate any contract or agreement to which the Borrower is a party.
14
11.5. Any contract or agreement which the Borrower executes with a third party
at present and in the future shall not affect and damage all the interests
of the Lender under this On-lending Agreement.
11.6. The Borrower is not involved in or will not be involved in any significant
arbitration or legal process, nor is it subject to any compulsory
administrative measures taken by any government department. (These
arbitration or legal process or administrative measures will have
significantly adverse impact on its finance, operation and management).
11.7. All the assets incurred by the loan under this Agreement shall not be used
as any other form of mortgage or any form of guaranty during the term of
performance of this Agreement without the written consent of the Lender.
11.8. At each withdrawal and repayment, the Borrower reiterates that the above
statement and guarantee remain true, valid and accurate.
Article 12: Agreed Matters
12.1. The distribution principle of repaying loan first and sharing profit
second shall be carried out in accordance with the plan for repayment of
principal with interest.
12.2. Any material amendment to the procurement list between the Borrower and
the Exporter shall obtain written consent from the Lender in advance.
12.3. Any amendment to the Commercial Contract concerning the amount, time,
change of purpose of the equipment or other material amendment confirmed by
the Lender, or any transfer of right and obligation under the Commercial
Contract shall obtain written consent from the Foreign Lending Bank and the
Lender in advance.
12.4. Without the written consent of the Lender, the Borrower shall not sell,
rent or transfer any equipment under the Commercial Contract or use these
equipment aboard.
12.5. In enlarging its scope of business stipulated in the business license
before the execution of this Agreement, or in enlarging the scope of
operation and management approved by relevant government authority, or in
selling, renting and assigning assets under this Agreement or in changing
its business, the Borrower shall solicit written consent from the Lender
before submitting it to the administrative department for industry and
commerce or relevant government authority for approval.
12.6. If the Borrower engages in any form of mortgage, pledge, or guaranty for
its assets and interests or engages in other actions that may have
significantly adverse
15
impact on its assets and interests, it shall notify the Lender in time and
obtain written consent from the Lender in advance.
12.7. The Borrower shall, at the request of the Lender, provide the Lender all
relevant information concerning its operation and finance in time, accept
the supervision from the Lender and provide convenient conditions to the
Lender for examining the use and repayment of the loan as well as the
production and operation status of the Borrower.
12.8. The Borrower shall promptly notify the Lender of any adverse change in the
repayment of loan and operation and financial conditions of the Borrower,
and put forth its proposal or measure for settlement or handling.
12.9. If it is necessary for the Borrower to take any significant actions such
as restructuring, reorganization, merger, acquisition, equity transfer,
equity mortgage or contracting, it shall notify the Lender in advance and
seek written consent from the Lender in advance.
12.10. The Borrower shall within 30 days at the end of each quarter provide the
Lender the balance sheet, the profit and loss statement and other financial
statement for the preceding quarter , and shall provide the Lender within 3
months at the end of each fiscal year the balance sheet, the profit and
loss statement and other financial statement as well as other relevant
information of the preceding fiscal year which have been audited by an
accounting firm.
12.11. The Borrower shall provide the project schedule report and operation
status report to the Lender in time at request.
12.12. The Borrower shall run its business steadily and maintain good financial
status.
12.13. The Borrower shall promptly inform the following to the Lender, if:
1) Any arbitration or legal action involving the Borrower and this project;
2) Mandatory measures have been taken by any relevant governmental authority
against any property of the Borrower;
3) Any event that seriously hinders and endangers the normal performance of
the Foreign Financing Agreement and the Commercial Contract;
4) Other information with respect to the project which is required by the
Lender.
12.14. Any action taken by the Import Agent shall be considered as having been
consented and authorized by the Lender in accordance with the Commercial
Contract or this Agreement and relevant amendments and appendices and shall
constitute the responsibilities and obligations of the Borrower. If the
Import Agent or Exporter fails to perform the Commercial Contract or this
Agreement and its corresponding amendments
16
as well as the stipulations set forth in the appendices, the Lender shall
not undertake the corresponding consequences.
12.15. The Borrower shall strictly carry out the stipulations set forth in the
'Special Fund Accord' (Appendix 1).
12.16. The Borrower must assign all the RMB settlement of accounts and
import-export settlement of accounts to the Lender or its designated branch
for handling.
12.17. The Lender holds that the financial status of the Guarantor has
deteriorated to such an extent as to suspend operation or to go bankrupt or
to be incapable of performing its obligations under the Guaranty Agreement;
the Guarantor may be confronted with possible events of liquidation or
being merged or dissolved and rescinded which may produce adverse impact on
the interests of the Lender; the Guarantor is involved or will be involved
in significant arbitration or legal proceedings and debt dispute which will
affect the implementation of this On-lending Agreement. Once the Lender has
confirmed the occurrence of the above situation, the Lender is entitled:
12.17.1. To ask the Borrower to find a new guarantor acceptable to the Lender
within the time-limit (no longer than 45 days) set by the Lender with
respect to the guaranty obligations undertaken by the above Guarantor.
12.17.2. If the Borrower fails to provide the guarantee acceptable to the Lender
within the above time-limit, the Borrower is considered to have committed
events of default as stipulated in Article 13, the Lender may take any
appropriate action which it is entitled to take in accordance with the
stipulations set forth in the Articles on Events of Default.
12.18. Any matter not determined in this Agreement but included in the
stipulations set forth in the Foreign Financing Agreement shall be included
in the supplementary agreement to this Agreement, the Articles in the
supplementary agreement shall be determined by the Lender in accordance
with the Foreign Financing Agreement, and both the Lender and the Borrower
shall execute and perform.
Article 13. Events of Default
13.1. Any of the following actions or events are considered as the Borrower's
events of default:
1) The Borrower fails to repay the principal and pay interest and other
expenses in accordance with the stipulations set forth in this Agreement.
2) The Borrower fails to fulfill any obligations under this Agreement and
other relevant documents.
17
3) The Borrower's guarantee in this On-lending Agreement and the notification
or other document made or submitted accordingly is proved to be seriously
inconsistent with facts or inaccurate or incapable of being performed.
4) The Lender holds that the financial status of the Borrower has deteriorated
so gravely that it may cease operation or go bankrupt or be incapable of
fulfilling this Agreement.
5) Any agreement, contract or other document related to this Agreement is
suspended or declared invalid.
6) The Borrower may be confronted with events of liquidation or being merged
or dissolved and rescinded which will produce adverse impact on the
interests of the Lender.
7) The Borrower fails to repay in time any other debt which it owes to the
China Construction Bank and the Lender holds that the Borrower's default
under any other debt agreement will affect the Borrower's repayment of any
debt under this Agreement.
8) The Borrower has been involved or shall be involved in any significant
arbitration or legal proceedings and debt disputes (the Lender holds that
these arbitration or legal proceedings or debt disputes may produce adverse
impact on the Borrower's performance of this Agreement.)
9) The Commercial Contract is totally or partially suspended or canceled, or
any event which seriously affects the proper performance of the contract
has occurred.
10) The Borrower opens an account or handles settlements in a bank which is not
designated by the Lender.
11) The tariff approved by the domestic relevant authority is not enough to
ensure the repayment of principal with interest.
12) The capital which shall be finalized in accordance with the Plan for the
Finalization of Capital has not been finalized on schedule and the
associated RMB fund has not been finalized on schedule.
13.2. In the event that any of the above-mentioned events of default occur, the
Lender is entitled to take one or several of the following measures:
1) To notify the Borrower to correct it within a definite time;
2) To suspend withdrawal promptly;
18
3) To announce the maturity of all the loan and require immediate repayment of
all the loan and its corresponding interest and fees;
4) The Lender may ask the Borrower to compensate for any loss and the
additional expenses accordingly because of the Borrower's default.
Article 14. Obligation of the Borrower Independent of the Commercial Contract
Any disputes or other event occurred between the seller and the
purchaser under the Commercial Contract shall not affect any obligation which
shall be undertaken by the Borrower under this On-lending Agreement. The
Borrower shall not for this reason delay in or refrain from performing the
obligation of repaying principal with interest and other fees on schedule.
Article 15. The Lender's Exercise of Rights
The fact that the Lender has not exercised or has not exercised in time
any obligations under this On-lending Agreement in the course of the
implementation of the Agreement shall not be regarded as a waive of its rights
and shall not affect any obligation which the Borrower shall undertake under law
and this On-lending Agreement.
Article 16. The Lender's Commitments
16.1. The Lender will provide the Borrower reasonable reserve loan in the
construction period and circulating fund loan in the operation period.
16.2. The Lender shall conform to the international practice and general
practice followed by foreign banks to raise funds overseas and strive for
better condition for loans in accordance with the financing plan accepted
by the both parties through negotiations.
16.3. The Lender shall conform to the change and trend of the international
financing market, try its best to provide financing services such as
restructuring of debt, and try hard to save interest and expenses and to
reduce the cost of fund for the Borrower.
16.4. If the Borrower applies for an extension of the loan, the Lender will try
its best to negotiate with the Foreign Lending Bank. If the Foreign Lending
Bank agrees to the extension, the Lender will handle the extension
formalities for the Borrower in time.
16.5. If the fund transfer is delayed in withdrawal and repayment on account of
the Lender's responsibility, the Lender shall undertake the corresponding
responsibility.
19
16.6. The Lender shall keep confidential of all the documents, data and business
information which are provided by the Borrower and marked with the word
'Confidential'.
Article 17. Assignment of Rights and Obligations
17.1. The rights and obligations of the Borrower under this On-lending Agreement
can be assigned only if written consent from the Lender is obtained in
advance.
17.2. The Lender may in the light of its business or needs, assign its rights
and obligations under this Agreement totally or partially to a third party
which it thinks appropriate but it must seek written consent from the
Borrower in advance pursuant to the Foreign Financing Agreement.
Article 18. Amendment and Supplement
In case of adjustment in policy or other uncovered matters, this
On-lending Agreement may be amended and supplemented through joint consultations
between both parties pursuant to the Foreign Financing Agreement and on the
precondition on ensuring that the principal, the interest and relevant expenses
of the loan under this On-lending Agreement are paid on schedule. Both the
amendment and the supplement shall constitute an inseparable part of this
On-lending Agreement and have the same effectiveness as this On-lending
Agreement.
Article 19. Settlement of Disputes
Should there be any dispute between the Lender and the Borrower in the
course of the implementation of this On-lending Agreement, it shall first be
settled through friendly consultation. If no agreement can be reached, any party
may institute legal proceedings at a people's court with jurisdiction in
accordance with the law.
Article 20. Effectiveness of Appendices
The appendices of this On-lending Agreement constitute an inseparable
part of the On-lending Agreement and have the same effectiveness as this
On-lending Agreement. Appendix 3 may be adjusted and/or supplemented by the
Lender in accordance with the stipulations of the Foreign Financing Agreement or
the corresponding notification of the Foreign Lending Bank.
Article 21. Miscellaneous
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If the reform in the state foreign currency control system and changes
in other policies are related to the use and repayment of the foreign exchange
under this Agreement, the Lender shall notify the Borrower on time and amend
relevant articles of this Agreement in accordance with the stipulations of the
state.
Article 22. Effectiveness
22.1. This On-lending Agreement becomes effective on the day when all of the
following conditions are satisfied and in accordance with the notification
of the Lender.
1) The execution of this Loan Agreement.
2) The execution of the Foreign Financing Agreement.
22.2. This On-lending Agreement is prepared in two original copies, each party
shall keep one while duplicates will be delivered to the relevant parties.
Article 23. Termination
This On-lending Agreement ceases to be effective automatically on the
day when all the principal, interest and other corresponding expenses under this
Agreement have been paid by the Borrower.
Article 24. Mode of Notification
The correspondence documents in the course of the performance of this
Agreement shall be delivered accurately by the Lender and the Borrower to the
following addresses.(If there is any change, the other Party shall be notified
in time):
The Lender:
Address: No. 9, Taoyuan North Road, Taiyuan City, Shanxi Province
Name: International Business Department of Shanxi Branch
of China Construction Bank
Tel: 0351-4031672/4031685
Fax: 0351-4031683
Zip Code: 030002
The Borrower:
Address:
Name: Yangcheng International Power Company Ltd.
Tel:
Fax:
Zip Code:
If notified by fax, the original must be mailed by registered courier service
immediately after the fax is sent. If it is mailed by registered courier
service, the date of mail shall govern.
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Borrower: Lender:
Yangcheng International Power Shanxi Branch of China
Company Ltd. Construction Bank
(Seal): (Seal):
Signature of Authorized Signature of Authorized
Representative: Representative:
Place of Execution: Place of Execution:
Date of Execution: Date of Execution:
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Appendix I.
Accord on the Repayment of Special Fund of Foreign Loan by Yangcheng
International Power Company Ltd.
In order to construct Phase I Project of the Shanxi Yangcheng Power
Plant, the Shanxi Branch of China Construction Bank ('the Lender') and
Yangcheng International Power Company Ltd. ('the Borrower') have executed this
On-lending Agreement at a total amount not exceeding [***]. To ensure the
use, the repayment of the principal with interest and the payment of relevant
expenses of the Foreign Exchange Loan under the above-mentioned On-lending
Agreement, the Lender and the Borrower have reached the following agreement
through friendly consultations:
Article One. Establishment of the Relevant Account of Special Fund and Its
Purpose
The Borrower applies for establishment of the following accounts within
10 days upon the effectiveness of this On-lending Agreement:
1. The Borrower applies to the Administration of Exchange Control for opening
the 'Special Account for the Foreign Exchange On-lending Loan' and the
'Account for Repayment of Principal with Interest of Foreign Exchange
On-lending Loan' in the Lender's International Business Department .
2. The Borrower shall open a RMB fund special account in an institution
designated by the Lender which shall be used to deposit RMB funds with
respect to foreign exchange settlement and relevant expenses incurred under
the On-lending Agreement.
Article Two. Sources of the Fund of the Special Account
In order to ensure the timely performance of the foreign payment, the
Borrower shall reserve the following funds in accordance with the following
sequence as the sources for repayment. (If there is any change in the
accounting system of the State, both parties may make corresponding adjustment
pursuant to a new accounting system):
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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1. The depreciation fund of fixed assets which will be withdrawn by Phase I
Project of the Yangcheng Power Company Ltd. in accordance with relevant
stipulations.
2. The profit which may be used for repayment by Phase I Project of the
Yangcheng Power Plant in accordance with the relevant stipulations.
3. Foreign exchange income of Phase I Project of the Yangcheng Power Plant.
4. Overall benefits of the Borrower and other income and ownership interests
which can be used for repayment.
5. The exempted or refunded taxes which may be used for repayment after it has
been submitted to relevant authorities for approval.
6. Other legal fund sources.
Article 3. Use of the Account
1. The Borrower shall, in accordance with the 'Schedule for Repayment of
Principal with Interest' or the notification of the Lender and from the day
the first unit is put into operation to within 30 days of the Payment Day,
deposit the required funds pro rata (the specific proportion shall be
determined through consultations between both parties on a monthly basis in
the Special Account for the Foreign Exchange On-lending and Account for the
Repayment of Principal with Interest of Foreign Exchange On-lending which
are opened at the Lender's Bank by the Borrower.
2. The depreciation funds of fixed assets which are withdrawn in accordance
with the stipulations for imported equipment of Phase I Project of
Yangcheng Power Plant must be deposited in the Borrower's RMB Special
Account which is opened at the Lender's designated institution.
3. The RMB settlement must be handled in the designated institution of the
Lender after Phase I Project of Yangcheng Power Plant is put into
operation.
4. After Phase I Project of Yangcheng Power Plant is put into operation, the
settlement of the foreign exchange shall be handled in the International
Business Department of the Lender, the foreign exchange earnings for
ensuring the repayment shall promptly be deposited in the Account for the
Repayment of Principal with Interest of Foreign Exchange On-lending.
5. The Borrower shall repay the principal with interest of the matured foreign
exchange loan with the kind of currency stipulated in the loan agreement.
If the Borrower makes repayment with the kind of currency agreed to by the
Lender, the Lender shall act as an intermediary in foreign exchange trading
in accordance with the current
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exchange rate, the risk of the foreign exchange rate shall be undertaken by
the Borrower.
6. The Lender shall, on the basis of the balance of the funds in the Special
Account of the Borrower, pay interest in accordance with the stipulations.
Article 4. Management of the Special Funds
1. The Borrower shall, in accordance with the stipulations of this Accord,
deposit the foreign exchange and RMB funds used for foreign payments in the
above mentioned account in time. In the event that the Borrower has not
deposited the above mentioned funds in the designated account within 7
business days of the bank before making foreign payment, the Lender is
entitled to handle the formalities for direct transfer.
2. Without prior written consent from the Lender, the Borrower shall not
within the term of repayment handle the settlement of RMB set forth in
Article 3.3. and the settlement of import-export set forth in Article 3.4
in any bank which is not the Lender's Bank.
3. The Borrower shall deposit in time a full amount in the 'Account for the
Repayment of Principal with Interest of Foreign Exchange On-lending' and be
ready for payment in foreign exchange. The payable funds that are not paid
because of the Borrower's insufficient funds shall without exception be
considered as overdue. The Lender will collect the interest in arrears with
respect to the funds in arrears and in accordance with the stipulations set
forth in this On-lending Agreement.
4. While making foreign payment, with respect to the balance due of the
arrears of the aggregate payment resulting from exchange rate changes
because of engaging in foreign exchange trading, the Lender may temporarily
make the advance first and then deduct the advance in the next foreign
payment together with the accrued interest in accordance with the
stipulated corresponding loan interest rate. With respect to the balance of
the fund in the 'Special Account of Payment of Foreign Exchange', interests
will be paid by the Lender in accordance with the stipulations of the China
Construction Bank.
5. The bank charges incurred in settlement and sales of foreign exchange and
in foreign exchange trading and international settlement as well as other
relevant expenses under this On-lending Agreement shall all be borne by the
Borrower.
6. Should there be any adjustment in the state policy, this Accord shall be
amended through consultation between the Borrower and the Lender under the
precondition that the principal and interest of the loan under the
above-mentioned On-lending Agreement as well as other relevant expenses are
paid on schedule.
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7. This Accord shall constitute Appendix I to the above-mentioned On-lending
Agreement.
Yangcheng International Power Company Ltd.
(Official Seal):
Authorized Representative:
Shanxi Branch of China Construction Bank
(Official Seal):
Authorized Representative:
Date of Signature:
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Appendix II.
'The Plan for the Finalization of Capital of Yangcheng International
Power Company Ltd.'
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Appendix III.
'Schedule for Repayment of Principal with Interest'
(Executed in accordance with the Schedule for Repayment of Principal with
Interest provided by the foreign banks)
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On-Lending Agreement on Using German Export Credit - Shanxi Branch of China Construction Bank and Yangcheng International Power Company Ltd.
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