WUHU SHAODA ELECTRIC POWER DEVELOPMENT COMPANY LIMITED
as Mortgagor
and
AES CHINA HOLDINGS COMPANY (L) LIMITED
as Mortgagee
SUBORDINATED MORTGAGE CONTRACT
CHADBOURNE & PARKE LLP
AMERICAN ATTORNEYS AT LAW
SUITE 3704, PEREGRINE TOWER
LIPPO CENTRE, 89 QUEENSWAY
HONG KONG
CONTENTS
Number Clause Heading Page
- ------ -------------- ----
1. Definitions.....................................................1
2. Loan............................................................2
3. Interest........................................................2
4. Repayment and Term..............................................3
5. Charge..........................................................3
6. Custody of Title Documents......................................3
7. Management of the Equipment.....................................4
8. Insurance of the Equipment......................................4
9. Discharge of Mortgage...........................................5
10. Mortgagor's Representations and Warranties......................5
11. Further Assurance...............................................6
12. Mortgagor's Undertakings........................................6
13. Events of Default...............................................8
14. Disposition of the Charged Assets...............................8
15. Indemnities....................................................10
16. Deduction......................................................10
17. Evidence of Debt...............................................11
18. Suspense Account...............................................11
19. Expenses.......................................................11
20. Power of Attorney..............................................12
21. Notice.........................................................12
22. Governing Law and Dispute Settlement...........................13
23. Miscellaneous..................................................13
24. Validity of Contract...........................................14
25. Subordinated Security..........................................14
Execution Block
Appendix 1 Equipment.............................................16
Appendix 2 Buildings.............................................17
THIS SUBORDINATED MORTGAGE CONTRACT (hereinafter referred to as the
'Contract') is made on the day of 1996
-------- --------------------
BETWEEN:
(1) WUHU SHAODA ELECTRIC POWER DEVELOPMENT COMPANY LIMITED, an equity
joint venture company formed under the laws of the People's Republic
of China, with its legal address at Commercial Office Building, West
Huangshan Road, Wuhu, Anhui Province, People's Republic of China
(hereinafter referred to as the 'Mortgagor'); and
(2) AES CHINA HOLDINGS COMPANY (L) LIMITED, a Labuan company of Lot A,
Level 3, Wisma Oceanic, Jalan OKK Awang Besar, 87007, Federal
Territory of Labuan, Malaysia (hereinafter referred to as the
'Mortgagee').
WHEREAS:
(1) By the AES Loan Agreement (as defined below), the Mortgagee has
agreed to make available to the Mortgagor a loan facility of up to
US$18,000,000, the proceeds of which shall be used by the Mortgagor
in accordance with the purposes set out in clause 2 of the AES Loan
Agreement.
(2) It is a condition precedent to the Mortgagee making the Facility
available to the Mortgagor that the Mortgagor enters into this
Contract with the Mortgagee.
IN WITNESS WHEREOF, the Mortgagor and the Mortgagee shall enter into this
Contract to set forth the respective rights and obligations of both parties.
1. DEFINITIONS
1.01 Unless the context requires otherwise, the following terms and
expressions used in this Contract shall have the same meanings as
follows:
(1) 'AES Loan Agreement' means the US$18,000,000 loan agreement
entered into between the Mortgagor and the Mortgagee dated
the date hereof;
(2) 'Cash' means the currency of any country from time to time
held by the Mortgagor, including cash and deposits of any
kind (including interest) that are kept in a bank or other
financial institution in China or any other country;
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(3) 'Charged Assets' means all or any part of the property,
assets and rights of the Mortgagor hereby charged including,
without limitation, the Receivables, Cash, Equipment,
buildings (see Appendix 2 for details) and Inventory;
(4) 'Equipment' means all items of equipment purchased or from
time to time purchased by the Mortgagor including, without
limitation, all equipment listed in Appendix 1, all
equipment purchased, imported or installed by the Mortgagor
and any additions, unused components and users' manuals and
technical documents relating to any of the foregoing;
(5) 'Event of Default' means any event of default specified
under Clause 13 herein;
(6) 'Inventory' means raw materials purchased for the production
of electricity by the Mortgagor;
(7) 'Junior Secured Indebtedness' means all or any sums (whether
principal, interest, fees or other expenses) now or at any
time hereafter due, owing or incurred by the Mortgagor under
the AES Loan Agreement or any Subordinated Security Document
to which it is a party and all other monies hereby secured;
(8) 'Receivables' means the payment arising from time to time in
the ordinary course of business but are still due and owing
to the Mortgagor; and
(9) 'Subordinated Security Documents' means all or any security
document defined under the AES Loan Agreement.
1.02 Unless defined herein otherwise or the context herein requires
otherwise, the terms and expressions used in this Contract shall have
the same meanings as those in the AES Loan Agreement.
2. LOAN
The Mortgagee shall provide the Mortgagor with a loan facility not
exceeding US$18,000,000 the terms of which shall be governed in all
respects by the AES Loan Agreement.
3. INTEREST
The Mortgagor undertakes to pay interest on the loan fully and
punctually in accordance with the AES Loan Agreement. Details on the
calculation and payment of interest shall be governed by the AES Loan
Agreement.
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4. REPAYMENT AND TERM
The Mortgagor undertakes to repay the loan principal and to pay all
other amounts due and owing under the AES Loan Agreement fully and
punctually in accordance with the AES Loan Agreement. Details on the
timing and amounts of principal repayments and other payments shall
be governed by the AES Loan Agreement.
5. CHARGE
5.01 In consideration of the Mortgagee agreeing to make the Facility
available to the Mortgagor upon the terms and conditions of the AES
Loan Agreement and the punctual observance and performance by the
Mortgagor of all other obligations of the Mortgagor contained in the
AES Loan Agreement or any Subordinated Security Document to which it
is a party, the Mortgagor as sole legal beneficial owner grants to
the Mortgagee a third-priority mortgage of and security interest in
all the undertakings, property, assets and rights of the Mortgagor
whatsoever and wheresoever both present and future including, without
limitation, the Receivables, Cash, Equipment, Inventory and buildings
and all its related rights and its uncalled capital for the due and
punctual payment of the Junior Secured Indebtedness in full when due.
THIS MORTGAGE IS SUBORDINATE IN RIGHT TO THE CHARGES CREATED TO
SECURE THE OBLIGATIONS OF THE BORROWER UNDER THE SENIOR LOAN
AGREEMENT, AND THE ENFORCEMENT OF THIS MORTGAGE SHALL BE LIMITED IN
ACCORDANCE WITH THE PROVISIONS OF THE SENIOR SUBORDINATION AGREEMENT
AND THE PRIORITY DEED.
5.02 This Contract shall be a continuing security and shall remain in full
force and effect until the Junior Secured Indebtedness has been paid
in full, notwithstanding the change in the constitution or status of
the Mortgagor, insolvency or liquidation or any incapacity to act as
a company or any intermediate settlement of account or other matter
whatsoever. This Contract is in addition to (and independent of) any
Charge, guarantee or other right or claim now or at any time
hereafter held by the Mortgagee. This Contract shall not be rendered
ineffective by any change or amendment made between the Mortgagor and
Mortgagee to the AES Loan Agreement.
6. CUSTODY OF TITLE DOCUMENTS
The Mortgagor shall deliver to the Facility Agent with copies to the
Mortgagee the purchase contract(s) for the Equipment, warranties from
the manufacturers, insurance receipts, import and customs clearing
documents and any other subsidiary documents reasonably requested by
the Mortgagee for safekeeping and custody, provided that the
Mortgagor
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shall arrange for the delivery of the originals of such
documents to the Mortgagee as soon as all amounts owed to the Senior
Financing Parties under the Senior Loan Agreement have been paid in
full. All relevant and reasonable custody fees shall be borne by the
Mortgagor.
7. MANAGEMENT OF THE EQUIPMENT
7.01 The Equipment shall be possessed, owned and used by the Mortgagor.
The Mortgagor shall use the Equipment reasonably and the Equipment
shall be used in a way permitted by the laws of the People's Republic
of China and the provisions of the AES Loan Agreement.
7.02 Without written consent from the Mortgagee, the Mortgagor shall not
structurally change, disassemble or remove any Equipment, except for
daily maintenance. Any additional facilities and installations made
to the Equipment in contravention of this sub-clause shall
automatically become part of the Equipment.
7.03 The Mortgagee shall not be responsible for any loss or damage arising
from any defect (whether apparent or latent) of the Equipment. The
Mortgagee shall not bear any responsibility if a third party claims
against the Mortgagor for loss or damage. If the Mortgagee suffers
any loss, the Mortgagor shall forthwith compensate the Mortgagee for
such loss.
8. INSURANCE OF THE EQUIPMENT
8.01 Prior to the first drawing under the AES Loan Agreement, the
Mortgagor shall insure the Equipment on such terms and in amounts as
specified in the Subordinated Insurance Assignment, in each case with
such insurance company as appointed or agreed by the Mortgagee. The
benefits of the policies shall be assigned to the Mortgagee until the
Junior Secured Indebtedness is paid in full. Prior to the repayment
of the Junior Secured Indebtedness, the Mortgagor shall not for
whatsoever reason discontinue or materially change the insurance. If
the Mortgagor discontinues or materially changes the insurance, the
Mortgagee shall have the right but not the obligation to insure the
same on its behalf, any reasonable fee or actual loss arising shall
be unconditionally reimbursed by the Mortgagor.
8.02 The originals of the insurance policies shall be delivered to the
Facility Agent for safe-keeping, the cost of which shall be borne by
the Mortgagor, provided that the Mortgagor shall arrange for the
delivery of such originals to the Mortgagee as soon as all amounts
owed to the Senior Financing Parties under the Senior Loan Agreement
have been paid in full.
8.03 In accordance with the Subordinated Insurance Assignment, the
Mortgagor shall irrevocably appoint the Facility Agent as its duly
authorized
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representative to receive and handle the compensation
monies paid under the insurances until all amounts owed to the Senior
Financing Parties under the Senior Loan Agreement have been paid in
full.
8.04 If any Event of Default occurs or is still existing and the aforesaid
compensation monies under the insurances are not sufficient to cover
the Junior Secured Indebtedness, the Mortgagee shall have the right
of recourse to the Mortgagor until the Mortgagor repays all its
indebtedness in full.
9. DISCHARGE OF MORTGAGE
Upon payment in full of all the Junior Secured Indebtedness and
performance of all the obligations and responsibilities hereunder and
under the AES Loan Agreement and the Subordinated Security Documents,
the Mortgagee shall, at the request of the Mortgagor and at a
reasonable fee to be paid by the Mortgagor, discharge the security
over the Charged Assets created by this Contract and assist the
Mortgagor to cancel the registration of the Charge hereunder at the
appropriate inland customs office and other relevant departments and
return all the title documents of the relevant Charged Assets
possessed by the Mortgagee for safe-keeping to the Mortgagor.
10. MORTGAGOR'S REPRESENTATIONS AND WARRANTIES
10.01 The Mortgagor represents and warrants to the Mortgagee that:
(1) the obligations of the Mortgagor under this Contract are
legal, valid and binding;
(2) the Mortgagor is the sole legal and beneficial owner of the
Charged Assets and has full power to mortgage the same to
the Mortgagee. Except for (i) the relevant Charges created
to secure the obligations of the Borrower under the Senior
Loan Agreement, (ii) the Charge created herein, (iii) the
CPIL Security, (iv) any lien set up to provide goods for the
Mortgagor, (v) any lien arising from the exercise of legal
rights in the ordinary course of business and (vi) any
Charge that has been notified to the Mortgagee in writing
and which has been approved by the Mortgagee, the Charged
Assets are free from any Charge or other guarantee. The
Charged Assets are also free from any third party's lease,
right to use or other rights;
(3) the Mortgagor has already obtained all necessary approvals
and permits, if any, from the relevant government
authorities in the People's Republic of China for or in
connection with the execution and performance of this
Contract;
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(4) the whole purchase price, maintenance fees and other tax and
fees of the Charged Assets have been punctually paid in
full;
(5) the Mortgagor is not in default under any law, regulation or
contractual terms in relation to the Charged Assets; and
(6) no litigation, arbitration or administrative proceeding is
currently taking place or pending or threatened in relation
to the Charged Assets.
10.02 The Mortgagor also represents and warrants to the Mortgagee that the
foregoing representations and warranties will be true and accurate
throughout the continuance of this Contract.
11. FURTHER ASSURANCE
11.01 In performance or satisfaction of the Charge hereunder enjoyed by the
Mortgagee over the Charged Assets or to facilitate the assignment of
its rights and obligations hereunder by the Mortgagee, the Mortgagor
undertakes to comply with all reasonable instructions of the
Mortgagee in full (whether the Charge hereunder has been effective).
The relevant assignment fees shall be borne by the Mortgagor.
11.02 The Mortgagor undertakes to comply with all reasonable instructions
from the Mortgagee to handle at any time relevant matters that are
necessary for the rights hereunder (or suffers the Mortgagee to
handle the same) and the Mortgagor also undertakes that the Mortgagee
can act at any time in the name of the Mortgagor in accordance with
the laws and the provisions of this Contract.
12. MORTGAGOR'S UNDERTAKINGS
12.01 Unless the Mortgagee otherwise agrees in writing, the Mortgagor
undertakes:
(1) to keep all its Charged Assets in good repair and in good
working condition; if there is any damage (wear and tear
excepted), the Mortgagor shall forthwith notify the
Mortgagee and carry out repairs to its best endeavors, and
prevent further damage;
(2) to comply with all the relevant laws and provisions of this
Contract in connection with the proper use of the Charged
Assets and the Mortgagor shall, upon the request of the
Mortgagee, forthwith reimburse the Mortgagee for any
reasonable sums and fees for the performance of the
aforesaid obligations;
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(3) to permit the Mortgagee or any other person appointed by the
Mortgagee at all reasonable times to view the state and
condition of the Charged Assets;
(4) the Mortgagee may, upon the occurrence of an Event of
Default, appoint a valuer to appraise the value of any asset
at all reasonable times, the reasonable cost of which shall
be borne by the Mortgagor;
(5) upon receipt of any notice, order or other documents issued
by the Chinese government authorities in connection with the
Charged Assets, the Mortgagor shall take every necessary
steps to comply with the aforesaid notice, order or other
documents within the time limit set out by law or fourteen
(14) days after the receipt of such documents (whichever is
earlier), and take all necessary steps to send a copy of
such document to the Mortgagee within the aforesaid period
of time;
(6) to promptly inform the Mortgagee of the occurrence of any
Event of Default and any litigation, arbitration or
administrative proceeding (including any actual or
prospective litigation, arbitration or administrative
proceeding);
(7) to pay all the taxes, management fee and other fees in
connection with the Charged Asset in accordance with the
relevant laws and the provisions of this Contract;
(8) in accordance with all the reasonable instructions of the
Mortgagee, assist the Mortgagee in handling the approvals,
consents and relevant legal procedures in connection with
this Contract;
(9) to notify the Mortgagee within fourteen (14) days of the
purchase of new Equipment; and
(10) promptly register this Contract as a third-priority mortgage
with all appropriate governmental authorities in China and
maintain all such registration(s).
12.02 Unless the Mortgagee otherwise agrees in writing, the Mortgagor
undertakes not to do any of the following:
(1) except for (i) the relevant Charges created to secure the
obligations of the Borrower under the Senior Loan Agreement,
(ii) the Charge created herein, (iii) the CPIL Security,
(iv) any lien set up to provide goods for the Mortgagor and
(v) any lien arising from the exercise of legal rights in
the ordinary course of business and bearing no relationship
to borrowings, mortgage or charge over the Charged Assets or
any part thereof (whether or not in priority over the Charge
hereunder);
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(2) with or without consideration, lease, sub-let, license,
share, sell, assign, appoint a trustee or in any other way
deal with the Charged Assets or any part thereof;
(3) use the Charged Assets for purposes other than the ordinary
course of business;
(4) do or cause to be done any act (including negligent
behavior) which may in any way significantly increase the
insurance premium or render the insurance invalid; and
(5) permit the use of the Charged Assets to do any act which is
contrary to the relevant laws and the provisions of this
Contract.
13. EVENTS OF DEFAULT
13.01 Each of the following events shall be an Event of Default:
(1) the Mortgagor fails to pay any sum payable under this
Contract or any other Subordinated Security Document to
which it is a party when due or otherwise in accordance with
the provisions hereof or thereof;
(2) the Mortgagor fails duly and punctually to perform or comply
with any of its other obligations or undertakings hereunder
or under any of the other Subordinated Security Documents;
and
(3) an Event of Default or prospective Event of Default has
occurred and is continuing under the AES Loan Agreement.
13.02 If any Event of Default under Clause 13.01 herein has occurred, the
Mortgagee shall have the right to request the Mortgagor to repay
forthwith the whole Junior Secured Indebtedness and shall also have
the right to dispose of the Charged Assets in accordance with laws
and provisions of this Contract and subject to the provisions of the
Senior Subordination Agreement. Any losses to the Mortgagor arising
from the exercise of the aforesaid rights of the Mortgagee shall not
be borne by the Mortgagee.
14. DISPOSITION OF THE CHARGED ASSETS
14.01 Subject to the provisions of the Senior Subordination Agreement and
the Priority Deed, upon the occurrence of any Event of Default under
Clause 13 herein, the Mortgagee shall forthwith have all the rights
and power under the laws of the People's Republic of China and this
Contract, including (without limitation) the right to:
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(1) immediately possess and enjoy the Charged Assets or any part
thereof in accordance with laws;
(2) sell by public auction or sell or lease the Charged Assets
or any part thereof by any means legally permissible and
receive reasonable rent or proceeds and, with respect to
leasing, for a term as determined by the actual market
situation with respect to the Charged Assets; and
(3) employ a receiver to deal with the aforesaid matter, such
receiver's reasonable salary and remuneration for the
account of the Mortgagor. Such receiver shall be regarded as
the agent of the Mortgagor and the Mortgagor shall be wholly
responsible for the acts and omissions of such receiver.
14.02 In accordance with laws, the receiver may:
(1) request the tenant to pay the rent or the use fees, issue
effective leases and receipts or litigate, initiate legal
proceedings, detain assets or use other means to recover
rent or fees; such requests, receipts and claims shall be
issued in the name of the Mortgagor or Mortgagee and no
enquiry as to the scope of power of the receiver is required
for payment to the receiver; and
(2) upon written notice from the Mortgagee, apply the monies
received under any insurance in respect of the Charged
Assets towards its repair or continued operation.
14.03 Upon the occurrence of an Event of Default and subject to the
provisions of the Senior Subordination Agreement and the Priority
Deed, the Mortgagee shall have the power to dispose of any Charged
Assets or any part thereof in accordance with laws without the
consent of the Mortgagor or other persons. The Mortgagee shall have
the power to execute all documents relating to the sale and lease of
the Charged Assets (including the related cancellation document) and
any loss arising shall not be borne by the Mortgagee.
14.04 The Mortgagee can dispose of the Charged Assets or appoint a receiver
to dispose of the Charged Assets in accordance with this Clause 14
and, subject to the provisions of the Senior Subordination Agreement
and the Priority Deed, can apply the monies received from the
disposition of Charged Assets in the following order of priority:
(1) firstly, in payment of all reasonable costs in the
disposition of the Charged Assets, including (but without
limitation) the fees and remuneration of the receiver;
(2) secondly, in payment of all the custom duties and other
taxes required by law in connection with the Charged Assets;
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(3) thirdly, in satisfaction of the Junior Secured Indebtedness;
and the remaining balance, after the above deductions, shall be paid
to the Mortgagor and other persons entitled to the above sum in full
by the Mortgagee. If the monies received by the Mortgagee from the
disposal of the Charged Assets does not satisfy the Junior Secured
Indebtedness in full, the Mortgagor shall reimburse the Mortgagee for
any shortfall.
14.05 The Mortgagee shall not be responsible for any loss to the Mortgagor
arising from the exercise of the Mortgagee's powers and rights in
accordance with law or the provisions of this Contract.
15. INDEMNITIES
15.01 The Mortgagor shall bear, pay for and compensate the Mortgagee for
all fees, damages, expenditures, legal responsibilities, legal costs
and other claims of the Mortgagee arising from an Event of Default
under Clause 13 herein. The Mortgagor's indemnity undertaking shall
be separated from this Contract and shall be independent from the
obligations hereunder. This obligation shall be effective
notwithstanding any judgment or order obtained by the Mortgagor
during winding-up, liquidation or bankruptcy and notwithstanding any
relaxation of the time limit or concession made in respect of any
claim.
15.02 Payment hereunder shall be in US Dollars. If a judgment or order or
part payment received during the winding up of the Mortgagor is not
paid in US Dollars, the Mortgagee may, on receipt of such payment,
purchase US Dollars through normal banking procedures with such
payments received.
15.03 If the amount of the US Dollars which may be so purchased (after
deducting any costs of exchange and any other related costs) is less
than the amount due, the Mortgagor shall indemnify the Mortgagee
against the shortfall.
16. DEDUCTION
All sums payable by the Mortgagor under this Contract shall be paid
in full without set-off, deduction or counterclaim or any restriction
or condition and free and clear of any tax (other than an Excluded
Tax) or other deductions or withholdings of any nature. The Mortgagor
shall be responsible for paying the full amount of any such deduction
or withholding to the relevant taxation or other authority. If the
Mortgagor is required by any law or regulation to make any deduction
or withholding, the Mortgagor shall compensate for such additional
amount as will ensure that the Mortgagee receives the full amount
which it would have received if no such deduction or withholding had
been required.
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17. EVIDENCE OF DEBT
Any statement of account showing a sum payable by the Mortgagor
hereunder and signed as correct by an authorized officer of the
Mortgagee shall, in the absence of manifest error, be conclusive
evidence of the amount so due.
18. SUSPENSE ACCOUNT
18.01 The Mortgagee may place and keep any monies received hereunder to the
credit of a suspense account for a period not exceeding six (6)
months (or if the liquidation or winding-up proceeding has been
commenced by the Mortgagor who is liable for such payment, the period
shall be so long as the Mortgagee may think fit) in order to preserve
the rights of the Mortgagee to sue or prove for the whole amount of
its claims against the Mortgagor. Prior to actual use of such sums
for the repayment of the Junior Secured Indebtedness in full or in
part, no interest shall be payable for such sums that are placed to
the credit of the suspense account.
19. EXPENSES
19.01 The Mortgagor shall pay or be required to pay all the stamp duty,
other taxes, notary fees and registration (including registration of
mortgage) fees and all other similar fees under this Contract or
documents referred to under this Contract, and the Mortgagor shall,
upon the request of the Mortgagee, reimburse the Mortgagee for all
the reasonable expenses (including legal fees, translation fees,
travelling or other miscellaneous expenses) in connection with the
negotiation, preparation, execution of this Contract, the exercise of
its right and power hereunder and enforcement of this Contract.
19.02 If the Mortgagor does not punctually repay the Junior Secured
Indebtedness in full, the Mortgagor shall be responsible for all
reasonable expenses incurred by the Mortgagee in enforcing its rights
hereunder (including, without limitation, any administration fee,
management fee, insurance fee or any other cost related to the
disposition of the Charged Assets).
19.03 In the event the Mortgagor has not paid any tax or fee in accordance
with the AES Loan Agreement or this Contract and the Mortgagee elects
to make payment thereof on behalf of the Mortgagor, the Mortgagor
shall repay such sum and pay interest on such sum to the Mortgagor,
and the interest shall be calculated in accordance with clause 15.01
of the AES Loan Agreement from the time the payment is due to the
time the Mortgagee receives such payment in full.
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20. POWER OF ATTORNEY
The Mortgagor irrevocably appoints the Mortgagee to be its
attorney-in-fact. At the time any Event of Default specified under
Clause 13 herein occurs and subject to the provisions of the Senior
Subordination Agreement, the Mortgagee shall sign any document or do
any act in the name of or otherwise on behalf of the Mortgagor that
the Mortgagee reasonably considers necessary to carry out any
obligations imposed on the Mortgagor hereunder or to exercise any of
the powers hereby conferred or in connection with any disposition of
the Charged Assets or the exercise of any rights in respect thereof
or to give to the Mortgagee the full benefit of this security. The
Mortgagor ratifies and confirms and agrees to ratify and confirm any
instrument and act which such attorney-in-fact may execute or do.
21. NOTICE
21.01 Each notice, demand or other communication to be given or made under
this Contract shall be in writing and delivered or sent to the
relevant party at its address or telex number or fax number set out
below (or such other address or telex number or fax number as the
addressee has by five (5) days' prior written notice specified to the
other party):
To the Mortgagor: Wuhu Shaoda Electric Power Development
Company Limited
Commercial Office Building
West Huangshan Road
Wuhu, Anhui Province
People's Republic of China
Fax Number: (86-553) 382-3224
Attention: Zhai Dao Ping
To the Mortgagee: AES China Holdings Company (L) Limited
9th Floor, Allied Capital Resources Building
32-38 Ice House Street
Central, Hong Kong
Fax Number: (852) 2530-1673
Attention: Jeff Safford
Chief Financial Officer
Any notice, demand or other communication so addressed to the
relevant party shall be deemed to have been delivered (1) if given or
made by telex, when dispatched with confirmed answerback, (2) if
given or made by letter, when actually delivered to the relevant
address and (3) if given or made by
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fax, when dispatched.
21.02 Any correspondence and documents between the Mortgagee and the
Mortgagor shall be written in English.
22. GOVERNING LAW AND DISPUTE SETTLEMENT
22.01 This Contract and its Appendix shall be governed by and construed in
accordance with the laws of the People's Republic of China.
22.02 The Mortgagee shall have the right to dispose of the Charged Assets
and request payment from the Mortgagor through litigation or
enforcement of a judgment in Hong Kong, China or any other
jurisdictions where the Mortgagor has a place of business or owns
assets. The Mortgagor acknowledges that this Contract is protected
under the laws of the People's Republic of China and at the same time
protected under the jurisdictions aforesaid.
22.03 The Borrower irrevocably waives any immunity to which it or its
property may at any time be or become entitled (whether characterized
as sovereign immunity or otherwise) from any set-off or legal action
in China or elsewhere, including immunity from service of process,
immunity from jurisdiction of any court of tribunal, and immunity of
any of its property from attachment prior to judgment or from
execution of a judgment.
23. MISCELLANEOUS
23.01 Any amendment, alteration, supplement or cancellation of the
provisions of this Contract shall not be made orally unless it is
confirmed and signed by both the Mortgagee and the Mortgagor.
23.02 No failure or delay by the Mortgagee in exercising any right, power
or remedy hereunder shall impair such right, power or remedy or
operate as a waiver thereof, nor shall any single or partial exercise
of the same preclude any further exercise thereof or the exercise of
any other right, power or remedy. The exercise of the aforesaid
rights, powers and remedies herein provided by the Mortgagee may be
at the same time, separate or cumulative, and the Mortgagee may
exercise any other rights, powers and remedies provided by law.
23.03 The Mortgagee shall have the right to assign all or part of its
interests hereunder to another party without the consent of the
Mortgagor. The Mortgagor shall not assign any of its rights and
obligations hereunder.
23.04 The Mortgagee shall include its successors and assignees. The
Mortgagor shall include its successors and permitted assignees.
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23.05 The illegality, invalidity and unenforceability of any provisions of
this Contract shall not affect the validity of any other provision of
this Contract. The Mortgagor agrees to perform all of its obligations
under this Contract. In the event that such situation arises, the
Mortgagee has the right to terminate this Contract and forthwith
request payment for the Junior Secured Indebtedness.
24. VALIDITY OF CONTRACT
24.01 This Contract shall be signed by the authorized representatives of
each party at-------------- Municipality.
24.02 This Contract is executed in Chinese in six (6) originals of each,
all of which are equally effective; three (3) copies of which shall
be given to the Mortgagee, one (1) copy to the Mortgagor and one (1)
each to a notary public in Beijing and Beijing Inland Customs.
25. SUBORDINATED SECURITY
Notwithstanding any other provision to the contrary, this Deed must
be read and construed in all respects, and the exercise of any rights
under this Deed and the enforcement of any rights under this Deed
must be subject in each case to the terms of the:
(a) Senior Subordination Agreement; and
(b) Priority Deed.
14
In the event of any conflict or inconsistency between the terms of
this Deed of the one part and the Senior Subordinated Agreement or
the Senior Priority Deed of the other part, the latter documents will
prevail.
Mortgagor: Wuhu Shaoda Electric Power Development Company
Limited
Signature: /s/ [SIGNATURE ILLEGIBLE] Company Chop:
Representative:
Occupation:
Date:
Witness: /s/ [SIGNATURE ILLEGIBLE]
Mortgagee: AES China Holdings Company (L) Limited
Signature: /s/ [SIGNATURE ILLEGIBLE] Company Chop:
Representative:
Occupation:
Date:
Witness: /s/ [SIGNATURE ILLEGIBLE]
15
Appendix 1
Equipment
[Please see attached.]
16
Appendix 2
Buildings
[Please see attached.]
17
Subordinated Mortgage Contract - Wuhu Shaoda Electric Power Development Co. Ltd. and AES China Holdings Co. Ltd.
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