Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
AUHUI LIYUAN ELECTRIC POWER DEVELOPMENT COMPANY LIMITED
AND
HEFEI MUNICIPAL CONSTRUCTION AND INVESTMENT COMPANY
AND
AES ANHUI POWER COMPANY LTD.
COOPERATIVE JOINT VENTURE CONTRACT
FOR THE ESTABLISHMENT OF
ANHUI LIYUAN -AES POWER COMPANY LIMITED
TABLE OF CONTENTS
ARTICLE 1. GENERAL PROVISIONS..................................................3
ARTICLE 2. DEFINITIONS.........................................................3
ARTICLE 3. PARTIES TO THIS CONTRACT............................................5
ARTICLE 4. ESTABLISHMENT OF THE COMPANY.......................................6
ARTICLE 5. PURPOSE, SCOPE AND SCALE OF THE COMPANY............................7
ARTICLE 6. TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL...................8
ARTICLE 7. ANNUAL CAPITAL RETURN..............................................12
ARTICLE 8. RESPONSIBILITIES AND OBLIGATIONS OF THE PARTIES....................13
ARTICLE 9. BOARD OF DIRECTORS.................................................16
ARTICLE 10. MANAGEMENT ORGANIZATION..........................................19
ARTICLE 11. SITE..............................................................19
ARTICLE 12. SALE OF ELECTRICITY...............................................20
ARTICLE 13. CONSTRUCTION......................................................20
ARTICLE 14. OPERATION AND MAINTENANCE OF THE POWER PANT.......................21
ARTICLE 15. LABOR MANAGEMENT..................................................21
ARTICLE 16. FINANCIAL AFFAIRS AND ACCOUNTING..................................21
ARTICLE 17. TAXATION AND INSURANCE............................................24
ARTICLE 18. JOINT VENTURE TERM................................................25
ARTICLE 20. TERMINATION AND LIQUIDATION.......................................26
ARTICLE 21. FORCE MAJEURE.....................................................28
ARTICLE 22. SETTLEMENT OF DISPUTES............................................29
ARTICLE 23. APPLICABLE LAW...................................................31
ARTICLE 24. MISCELLANEOUS PROVISIONS.........................................31
APPENDIX 1. THE PROJECTED RETURN ON EQUITY PRINCIPAL OF THE PARTIES OVER THE
YEARS. ...........................................................35
COOPERATIVE JOINT VENTURE CONTRACT
ARTICLE 1. GENERAL PROVISIONS
This Contract is made in Hefei city, Anhui province, the People's Republic of
China on this 18th day of March, 1996 by and among Anhui Liyuan Electric Power
Development Company Ltd.(hereinafter referred to as Party 'A' ), Hefei Municipal
Construction and Investment Company (hereinafter referred to as Party 'B') and
AES Anhui Power Company Ltd.(hereinafter referred to as Parity 'C'). Each of
Party A, Party B and Party C shall hereinafter individually be referred to as a
'Party' and collectively as the 'Parties'.
After friendly consultations conducted in accordance with the principles of
equality and mutual benefit, the Parties have agreed to establish Anhui
Liyuan-AES Power Company Ltd.,a cooperative joint venture enterprise
(hereinafter referred to as the 'Company') in accordance with the law of the
People's Republic of China on Sino-Foreign Cooperative Joint Venture Enterprises
(hereinafter referred to as the 'Cooperative Joint Venture Law'), the Law of
Corporation of the People's Republic of China, other relevant laws and
regulations, and the provisions of this Contract. Therefore, the creation of
this Contract.
ARTICLE 2. DEFINITIONS
2.01 DEFINITIONS
For purposes of this Joint Venture Contract, the capitalized terms set forth
below shall have the following corresponding meanings:
1) 'CONTRACT' means the cooperative joint venture contract for the
establishment and operation of the Anhui Liyuan-AES Power Company Limited.
2) 'ARTICLES OF ASSOCIATION' means the Company's Articles of Association,
signed by the Parities, approved by the Company's Board of Directors and
the examining and approving authority, as amended when necessary with the
approval from the Board of Directors.
3) 'COMPANY' means the Anhui Liyuan-AES Power Company Limited, a Sino-foreign
cooperative joint venture enterprise established by the Parties pursuant to
this Contract.
4) 'BUSINESS LICENSE' means the business license issued to the Company by the
local branch of the State Administration for Industry and Commence.
5) 'JOINT VENTURE TERM' means the term of the Joint Venture as defined in
Article 18 of this Contract.
6) 'BOARD' or 'BOARD OF DIRECTORS' means the highest authority of the Company
established in accordance with the provisions set forth in Article 9 of
this Contract.
7) 'CHAIRMAN' or 'CHAIRMAN OF THE BOARD OF DIRECTORS' means the Chairman of
the Company's Board of Directors appointed in accordance with Article 9 of
this Contract.
8) 'VICE-CHAIRMAN' means vice-chairman of the Company's Board of Directors
appointed in accordance with Article 9 of this Contract.
9) 'DIRECTOR(S)' means member(s) of the Company's Board of Directors appointed
in accordance with Article 9 of this Contract.
10) 'GENERAL MANAGER' means the General Manager of the Company appointed in
accordance with Article 10 of this Contract.
11) 'DEPUTY GENERAL MANAGER(S)' means the Deputy General Manager(s) appointed
in accordance with Article 10 of this Contract.
12) 'POWER PLANT' means the entire facility and later extension hereto of a
50MW Class gas-steam combined cycle generating set and its control
equipment and all common services, ancillary equipment, facility and the
site.
13) 'SITE' means the land in Hefei City, Anhui Province, China upon which the
Company's Power Plant facility and all required auxiliary facilities are
located.
14) 'COMMENCEMENT OF OPERATION' means the date of commencement of commercial
operation of the Power Plant as defined in the Operation and Offtake
Contract executed between the Company and the Anhui Provincial Electric
Power Company.
15) 'EPC CONTRACT' means the fixed price, fixed schedule, fixed scope and fixed
quality construction contract for the design, construction, completion and
commissioning of the Power Plant.
16) 'INTERCONNECTION AGREEMENT' means the interconnection agreement entered
into by and between the Company and the Anhui Provincial Electric Power
Company.
17) 'DESPATCH AGREEMENT' means the electric power despatch agreement entered
into between the company and the Anhui Provincial Electric Power Company.
18) 'OPERATION AND OFFTAKE CONTRACT' means the long-term electricity sales
contract entered into between the Company and Anhui Provincial Power
Company which is entrusted by the former to operation, maintenance, repair
and management of the Power Plant.
19) 'BANK SUPERVISION AGREEMENT' means an agreement between the Company and
bank within China for supervising each Party's distributable profit as
defined in Article 16.06
20) 'LOAN CONTRACTS' means contracts to be entered into and between the Company
and domestic financial institutions and the overseas institutions arranged
by Party C to provide loans to the Company in accordance with Article 6.03
hereof.
21) 'EXAMINING AND APPROVING AUTHORITY' means the Ministry of Foreign Trade and
Economic Cooperation of the People's Republic of China or its authorized
organization.
22) 'AFFILIATE' means any company through ownership of voting stock or
otherwise, directly or indirectly, controlling or controlled by a Party,
the term 'control' being used in the sense of power to elect directors or
to direct the operation and management of a company.
23) 'OWNER'S ENGINEER' means a qualified engineering firm appointed by the
Company to supervise the execution of the work contracted for under the EPC
Contract.
24) 'THIRD PART' means any party or parties other than the Parties to this
Contract.
25) 'CHINA' means the People's Republic of China
26) 'RMB' means the lawful currency of the People's Republic of China.
27) 'USD'or 'US$' means the lawful currency of the United States of America.
ARTICLE 3. PARTIES TO THIS CONTRACT
3.01 The Parties to this Contract are:
(a)Party A, Anhui Liyuan Electric Power Development Company Limited, a
state-owned enterprise, set up in accordance with the Chinese law and
registered in Anhui province, China, with its legal address at: No. 415
Wuhu Road, Hefei, Anhui Province, China.
Legal Representative of Party A:
Name: Cheng Guangjie
Position: Chairman
Nationality: Chinese
(b)Party B, Hefei Municipal Construction and Investment Company, a
state-owned enterprise, set up in accordance with the Chinese law and
registered in Hefei City, Anhui Province, China, with its legal address
at: No.186 Suzhou Road, Hefei, Anhui Province, China.
Legal Representative of Party B:
Name: Shen Dequan
Position: General manager.
Nationality: Chinese
(c)Party C, AES Auhui Power Company Ltd, a company registered in
British Virgin Islands with its legal address at: 9/F allied Capital
Resources Building, 32-38 Ice House Street, Central, Hong Kong
Legal Representative of Party C:
Name: Paul T. Hanrahan
Position: President
Nationality: U.S.A.
ARTICLE 4. ESTABLISHMENT OF THE COMPANY
4.01 Establishment of the Company
The Parties hereby agree to establish the Company in accordance with
the Sino-Foreign Cooperative Joint Venture Law, the Corporation Law and
other relevant laws and regulations of the People's Republic of China
and with the provisions of this Contract.
4.02 Name and Address of the Company
(a)The Chinese name of the Company shall be '[Chinese Text]' and its
English name is 'Anhui Liyuan-AES Power Company Limited.'
(b)The legal address of the Company shall be: No. 415 Wuhu Road, Hefei,
Anhui Province, China
4.03 Form of Organization of the Company
The form of organization of the Company shall be a limited liability
Company. Creditors of the Company shall have recourse solely to the
assets of the Company and not to the assets of the individual Parties.
Expect as otherwise provided herein, once a Party has paid in full its
contribution to the registered capital of the company and to provide or
arrange loans in accordance with this Contract, it shall not be
required to provide any further funds to or on behalf of the Company by
way of capital contribution, loan, advance, guarantee or otherwise. The
Company shall indemnify the Parties against any losses, damages or
liabilities in respect of any third party arising out of the
department, construction and operation of the Power Plant and the
operation of the Company. Subject to the aforementioned responsibility
limitations, all Parties to this Contract shall share risks and losses
incurred by the Company within the limits of its respective share in
registered capital contribution.
4.04 Laws and Decrees
The Company is an economic entity established pursuant to the laws of
the People's Republic of China. The Company has the legal status of an
independent legal person. The business activities of the Company shall
be governed and protected by the laws, decrees and relevant rules and
regulations of China.
ARTICLE 5. PURPOSE, SCOPE AND SCALE OF THE COMPANY
5.01 Purpose of the Company
The Company's purpose is to build, own and operate the Power Plant, to
sell electric power to the grid and to achieve a projected return on
investment for the Parties.
5.02 Operation Scope of the Company
The operation scope of the Company is to generate electricity, to sell
it to the grid and to take charge of repair and maintenance services of
the Power Plant.
5.03 Construction Scale
The Company shall construct 1(50 MW Class gas-steam combined cycle
generating facility and its auxiliary facilities.
ARTICLE 6. TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL
6.01 Total Investment
The total amount of investment required by the Company is presently
estimated to be US$29.98 million. Any increase in the registered
capital must be first agreed to by the Parties and unanimously approved
by the Board of Directors before being submitted to the relevant
authorized Examination and Approval Authority for approval. Increase in
registered capital will be met by the Parties in proportion to their
existing interest in the Company's registered capital.
6.02 Registered Capital
The total registered capital of the Company shall be US$15 million.
6.03 Financing
The financing for the balance between the total investment and the
registered capital shall be arranged by Party A and Party C
respectively. Party C shall undertake financing responsibility of not
exceeding the maximum amount of US$ 8 million. All the rest of the
financing needed by the Project shall be raised by Party A. The term
and conditions for financing shall be provided for in detail in the
loan contract.
6.04 Contributions of Registered Capital
(a)Party A's Contribution to the Registered Capital: Party A agrees to
contribute an amount of RMB equivalent to US$3 million to the
registered capital of the Company which represents 20% of the
registered capital of the Company. The value of Party A's contribution
in RMB shall be calculated at the medium price of the USD/ RMB exchange
rate as announced by the People's Bank of China on the date the
contribution is made.
(b)Party B's Contribution to the Registered Capital: Party B agrees to
contribute an amount of RMB equivalent to US$1.5 million to the
registered capital of the Company which represents 10% of the
registered capital of the Company .The value of Party B's contribution
in RMB shall be calculated at the medium price of the USD/RMB exchange
rate as announced by the People's Bank of China on the date the
contribution is made.
(c)Party C's Contribution to the Registered Capital: Party C agrees to
contributed an amount of US$10.5 million to the registered capital of
the Company which represents 70% of the registered capital of the
Company.
6.05 Payment of Registered Capital and Conditions Precedent Thereto
Each Party agrees to make their first contribution of registered
capital to the Company which shall not be less than 15% of the total
amount of their respective portions of registered capital share within
thirty (30) days after satisfaction of the conditions precedent listed
below. The second registered capital contribution (namely 85% of the
total registered capital ) shall be made in full several times within a
year after obtaining the copy of the business license. The Parties
agree to hold a meeting of the Board of Directors as soon as possible
after receiving the Business License of the Company to execute the
Contracts listed in Article 4 and decide on a schedule for the balance
of the registered capital in accordance with relevant regulations and
construction needs.
Conditions precedent to payment of registered capital are:
(a)The company and the Project has obtained all necessary relevant
government approvals.
(b)Issuance of Approval by the examining and approving authority
approving this Contract and Articles of Association of the Company.
(c)Issuance of a duplicate of the Company's Business License by the
local branch of the State Administration for Industry and commence of
China;
(d)Local Exchange Control Bureau's agreement to issuing a support
letter to arrange the conversion of RMB into foreign currency on a
priority basis and to approval of the Company access to foreign
exchange trading centre to convert foreign currencies so as to meet the
Company's needs for foreign currency.
(e)Execution and approval of the Operation and Offtake Contract, the
Loan Contracts, the EPC Contract, the Bank Supervision Agreement, the
Interconnection Agreement, the Dispatch Agreement and other agreements
related to this Contract. The approval shall be obtained from all
Chinese Government authorizes required to approve these contracts.
(f)Opening a bank account with a relevant bank in the name of the
company;
(g)Anhui Provincial Pricing Bureau, pursuant to relevant state
policies, has granted its approval to the estimated initial tariff and
the principle of the tariff adjustment as stipulated in the Operation
and Offtake Contract. This principle, once approved, shall be valid for
the entire term of this Contract unanimously.
(h)The Company has obtained relevant certificate to lawful use of the
Site in accordance with the provisions of the laws of China.
(i)The support letter in respect of the Company and this project issued
by Anhui Provincial government;
(j)Obtaining a legal opinion from attorney to the effect that the
Company has obtained all required approvals and that all the Contracts
listed in Article 6.05(e) are legal, effective and enforceable.
(k)Approval by each Party's Board of Directors authorizing each Party
to execute this Contract.
Each of the Parties shall be satisfied the conditions precedent. In the
event any of the conditions have not been met ninety days after the
Company has been issued the Business License, and the Parties do not
agree in writing to waive such conditions precedent or extend the time
for their fulfillment, any Party shall have the right to terminate this
Contract, should any Party terminate this Contract, no Party shall have
the right to require that party to made further contribution to the
registered capital nor shall any Party have the right to claim any
damage from that party.
If within thirty(30) days after satisfaction of the conditions
precedent, any Party has not made its contribution to the registered
capital of the company, or fails to make its contributions in
accordance with the schedule approved by the Board of Directors, the
party or Parties failing to make such contribution shall be changed
with a penalty equal to 0.05% of the delinquent part of payment on a
daily basis, from the date of the scheduled contribution until the date
of the actual contribution, and shall be in default under this
contract.
6.06 Drawdown of Loans
The Loans shall be deposited on time to the bank account of the Company
in accordance with the financial arrangements of the construction
schedule. The specific dates shall be set in the Loan Contracts.
Failure to make payments on time shall be treated in accordance with
the provisions of the Loan Contracts.
In case of financing requirement, the Company establish a RMB reserve
account so as to ensure the repayment of loans.
6.07 Investment Certificate
After any Party has made its contribution in full to the registered
capital, an accounting firm registered in China shall verify the
contribution and issue a contribution verification report. Thereupon,
an investment certificate signed by the Chairman and Vice-Chairman of
the Board shall be issued to such Party by the Company.
6.08 Assignment and security of Registered Capital and Ownership Interest
(a)Approval of the Board of Directors and Right of First Refusal: Any
Party to this Contract may assign, sell or otherwise transfer all or
part of its ownership interest in the Company (such Party being
hereinafter referred to as 'the Transferring Party') to any Third Party
(hereinafter referred to as 'the Transferee'), provided such transfer
gets a unanimous approval from the Board of Directors. Meanwhile, such
transfer will be allowed provided the other Parties have a right of
first refusal to purchase the ownership interest in the Company being
transferred under the same terms and conditions agreed between the
Transferring Party and the Transferee. The Transferring Party shall
notify the other parties in writing of the terms and conditions of the
transfer. If the other Parties do not exercise their right of first
refusal within thirty (30) days after receipt of such notice, they will
be deemed to have consented to the transfer. The Transferring Party may
then transfer its ownership interest in the Company provided the
Transferee executes a document by which it becomes a Party to this
Contract and expressly assumes the Transferring party's obligations
herein.
The requirement for unanimous approval by the Board of Directors do not
apply if a Party is assigning its rights to distributions from the
Company as security to obtain loans for itself or an affiliate nor
shall the Company take any collateral responsibility for it. If a Party
is assigning, selling or otherwise transferring all or any part of its
rights, title and ownership interest in the Company to an Affiliate,
the right of first refusal shall not apply.
(b)Government Approval: The sale or assignment shall become effective
only after the approval in received. Upon receipt of the approval from
such Examining and Approving Authority, the Company shall register the
change in ownership with the local branch of the state Administration
for Industry and Commence.
(c)Subject to the connect of Creditors and after going through China's
applicable legal proceedings, the Parties agree to mortgage and pledge
the Company's assets and ownership rights of the Contract to Creditors
in Accordance with financing requirements in order to obtain loans.
6.09 Increase of Registered Capital
Any increase in the registered capital must be first agreed to by the
Parties and unanimously approval by the Board of Directors before being
submitted to the original Examining and Approving Authority of this
Contract for approval. In principle, increases in registered capital
will be met by the Parties in proportion to their then existing
ownership interest in the Company's registered capital. Upon approval
by such Examining and Approving Authority, the Company shall register
the increase in registered capital with the local branch of the State
Administration for Industry and Commence.
6.10 Failure to Make Registered Capital Contributions.
In the event any Party fails to make its registered capital
contribution or any portion thereof as provided herein or fails to
provide its share of any increase in the Company's registered capital
as described in Article 6.09 above, then in addition to any other
rights the Company may have against the defaulting Party as described
in Article 6.05, the Company shall offer such unsubscribed portion of
registered capital to the non-defaulting Parties. The non-defaulting
Parties will be offered the unpaid portion of the defaulting Party in
proportion to each Party's registered capital contribution. Such change
in each Party's investment ratio and transfer in ownership interest of
registered capital as described in this paragraph shall be subject to
the approval of the Examining and Approving Authority of this contract.
6.11 Development Expenses
Development expenses shall only include the expenses incurred by and
agreed upon by the Parties for the sole purpose of the preliminary work
of the Power Plant and are estimated to be less than one million US
dollars. The Parties agree that the development expenses for Party A is
[***], [***] for Party B and [***] for Party C. All development
expenses shall be deemed as the Parties' loans to the Company whose
annual interest rate is [***] before the contributions of registered
capital are made by the Parties. After the Parties have made their
first contribution of registered capital, the aforesaid development
expenses will either be counted as part of the registered capital
contribution provided by the Parties or paid by the Company at the
financial closing date in accordance with the decision of the Board of
Directors.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
ARTICLE 7. ANNUAL CAPITAL RETURN
7.01 The investment return rate for the Parties is calculated on the basis of
the Power Plant operating at full load with an annual equivalent operation hour
of [***] hours. After all taxes and contributions to required funds according to
relevant regulations are paid, the USD financial internal Return Rate (FIRR) on
equity for the Parties shall be [***]. Based on an annual equivalent full load
operation hour of [***] hours and an FIRR of [***], the annual capital returns
of the Parties calculated in USD are calculated and listed in Appendix 1.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
7.02 In the event that the annual equivalent full load of operating hours
exceeds [***] hours, the exceed net profit will be met by the Parties in
proportion to their existing interest in the Company's registered capital.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
ARTICLE 8. RESPONSIBILITIES AND OBLIGATIONS OF THE PARTIES
8.01 Responsibilities and Obligations of Party A
In addition to other obligations under this Contract, Party A shall
have the following responsibilities:
(a)Be responsible for obtaining all necessary approvals, permits and
licenses for the establishment of the Company and have the obligation
to use its best efforts to obtain all necessary approvals and permits
for the ongoing operation of the Company, including but not limited to
assisting the Company in obtaining approval from Anhui Provincial
Pricing Bureau in connection with the estimated initial tariff and the
principle of tariff adjustment as stipulated in the Operation and
Offtake Contract;
(b)Assist the Company in conducting negotiations with land
administration authority and other relevant government authority in
connection with the Company's use of the site and assist in handling
all necessary formalities so as to ensure the Company's use of the site
in accordance with its scope of business during the entire joint
venture term (including the extension of the term thereafter);
(c)Assist the Company in obtaining all infrastructure needed, including
external water supply, power supply, fuel, transportation,
communications and other services on the most favorable terms and
conditions available;
(d)Assist the Company in applying for preferential tax treatment and
other investment incentives available under applicable laws and
regulations;
(e)Assist the Company in obtaining necessary approvals for importing
raw materials and machinery equipment, in importing machinery
equipment, fuel, materials, supplies and office equipment on
preferential terms, in procuring import licenses, in facilitating
customs formalities and in arranging for transportation of imported
equipment and materials between Chinese ports and the site;
(f)Assist the Company's expatriates to obtain all necessary entry visas
and work permits;
(g)Assist the Company in opening RMB and foreign currency bank accounts
as well as loan reserve account; assist the Company to obtain necessary
approvals to utilize various methods permitted under Chinese laws to
balance its foreign exchange as needed, including assisting Party C to
convert its capital returns into US dollars for remittance overseas;
(h)Arrange financings for the Company pursuant to relevant provisions
of this Contract and assist the Company in obtaining working capital
loans in business operation;
(i)Be responsible for drafting feasibility study report of the Power
Plant, submitting necessary engineering and technical documents for the
proposal and examination and approval of the project;
(j)Facilitate the execution of the Operation and Offtake Contract
between the Anhui Provincial Electric Power Company and the Company ,
ensure to purchase yearly minimum Offtake electricity and ensure safe
and stable generation of electricity in accordance with designed
capability during the term of the joint venture and their adherence to
the obligations thereunder;
(k)Handle other reasonable matters entrusted from time to time by the
Company.
8.02 Responsibilities and Obligations of Party B
In addition to its other obligations under this Contract, Party B shall
have the following responsibilities:
(a)Be responsible for obtaining all necessary approvals, permits and
licenses for the establishment of the Company and have the obligation
to use its best efforts to obtain all necessary approvals and permits
for the ongoing operation of the Company, including but not limited to
assisting the Company in obtaining approval from Anhui Provincial
Pricing Bureau in connection with the estimated initial tariff and the
principle of tariff adjustment as stipulated in the Operation and
Offtake Contract;
(b)Assist the Company in conducting negotiations with land
administration authority and other relevant government authority in
connection with the Company's use of the Site and assist in handling
all necessary formalities so as to ensure the Company's use of the Site
in accordance with its scope of business during the entire joint
venture term (including the extension of the term thereafter);
(c)Assist the Company in obtaining all infrastructure needed, including
external water supply, power supply, fuel, transportation,
communications and other services on the most favorable terms and
conditions available;
(d)Assist the Company in applying for preferential tax treatment and
other investment incentives available under applicable laws and
regulations;
(e)Assist the Company in obtaining necessary approvals for importing
raw materials and machinery equipment, in importing machinery
equipment, fuel, materials, supplies and office equipment on
preferential terms, in procuring import licenses, in facilitating
customs formalities and in arranging for transportation of imported
equipment and materials between Chinese ports and the Site.
(f)Assist the Company's expatriates to obtain all necessary entry visas
and work permits;
(g)Assist the Company in opening RMB and foreign currency bank accounts
as well as loan reserve account; assist the Company to obtain necessary
approvals to utilize various methods permitted under Chinese laws to
balance its foreign exchange as needed, including assisting Party C to
convert its capital returns into US dollars for remittance overseas;
(h)Assist the Company in obtaining working capital loans in business
operation;
(i)Handle other reasonable matters entrusted from time to time by the
Company.
8.03 Responsibilities and Obligations of Party C
In addition to its other obligations under this Contract, Party C shall
have the following responsibilities.
(a)Assist the Company in purchasing equipment, supplies and materials
inside or outside China to ensure that they are of the proper quantity
and quality;
(b)Introduce modern management techniques and financial management
expertise to the Company;
(c)Assist the Company staff and representatives in arranging foreign
visas for overseas training as required for the operation and
management of the Power Plant;
(d)Assist the Company in recruiting qualified expatriate personnel and
international consultants as required by the Company;
(e)Arrange financing for the Company pursuant to relevant provisions
hereof;
(f)Handle other reasonable matters entrusted from time to time by the
Company.
ARTICLE 9. BOARD OF DIRECTORS
9.01 Formation of the Board
(a)The Board of Directors shall be established on the date of
registration of the Company.
(b)The Board shall consist of seven (7) Directors including the
Chairman of the Board, two (2) of whom shall be appointed by Party A,
one (1) by Party B and four (4) by Party C. At the time this Contract
is executed and at any time a Director is appointed or removed, each
Party shall send written notice to the other Parties of the names of
its appointed or removed Directors.
(c)In general, each Director shall be appointed for a term of three
(3)years and may serve consecutive terms if reappointed by the original
appointing Party. Each Director shall serve and may be removed by the
Party who appointed that Director. In the event a Director vacates the
Board through retirement, resignation, illness, disability or death, or
in the event a Director is removed by the original appointing Party
that Party may appoint a successor to serve out the departing
Director's remaining term.
(d)Directors will serve without remuneration, but all reasonable costs
incurred by the Directors in performance of their duties as members of
the Board will be borne by the Company.
(e)Each Director may concurrently be appointed by the Board as General
Manager or Deputy General Manager. When a Director is concurrently a
managerial staff of the Company, he may only carry on day-to-day
managerial activities of the company in the capacity of General
Manager, Deputy General Manager, and may not exercise his director
functions in dealing with day-to-day managerial activities.
(f)The Chairman of the Board shall be appointed by Party A. He shall be
the legal representative of the Company, and will exercise his
authority within the limits prescribe by the Board and in compliance
with the Sino-Foreign Cooperative Enterprise Law and its Rules for
Implementation and the Corporation Law of P.R. China. He may not under
any circumstance contractually bind the Company or otherwise take any
action on behalf of the Company without prior approval of the Board .
Whenever he is unable to perform his responsibilities for any reason,
one Vice Chairman may be designated by him or the Board to temporality
assume his duties until he is able to resume his duties.
(g)There shall be two Vice Chairmen, one appointed by Party B and the
other appointed by Party C.
(h)The Company hereby indemnifies each Director against any claims
arising from that Director's action in his capacity as a Director of
the Company, except for such acts in violation of criminal laws.
9.02 Power of the Board.
(a)The Board of Directors shall be the highest authority of the
Company;
(b)Resolutions involving the following matters may only be adopted at a
duly constituted and convened meeting of the Board whereupon such
resolution receives the unanimous affirmative vote of each and every
Director of the Board voting in person or by proxy at such meeting;
(i)Amendment of the Joint Venture Contract and Articles of
Association;
(ii)Merger and integration of the Company with another
organization, or establishment of subsidiaries of the Company;
(iii)Dissolution of the Company;
(iv)Any increase or transfer of the registered capital of the
Company;
(v)Execution, supplement, modification, termination, substitution
or assignment by the Company of any credit or financing agreements
any Operation and Offtake Contract, and major construction,
contract or material contract;
(vi)Additional capital requirement or financing amounts above
total investment amounts as set forth in Article 6.01;
(vii)Appointment of General Manager and Deputy General Managers of
the Company;
(c)All other issues that require a resolution by the Board may be
raised at a duly convened meeting of the Board. Such resolution must be
adopted by the affirmative vote of a 2/3 of the Directors present at
such meeting in person or by proxy,
(d)Any matter to be decided by the Board may be decided without a
meeting if all Directors consent in writing to such matter. Such
written consent shall be filed with the minutes of the Board
proceedings and shall have the same force and effect as a unanimous
vote taken by the Directors physically present.
9.03 Meetings
(a)Annual Meetings: The first meeting of the Board of Directors shall
be held within thirty (30) days from the date the Company is issued a
Business License pursuant to this Contract. Thereafter, the Board shall
meet at least once every year. Meetings shall be held at the registered
address of the Company or such other address in China or abroad as is
designated by the Board. The Chairman of the Board shall set the
meeting's agenda after consultation with the Vice Chairmen of the
Board. The Chairman is responsible for convening and presiding over all
Board meetings.
(b)Proxy: Meeting may be attended by Directors in person or by proxy.
If a Director is unable to participate in a Board meeting, he may issue
a proxy and entrust a representative to participate in the meeting on
his behalf. The representative so entrusted shall have the rights and
powers as stated in the proxy;
(c)Interim Meetings: Interim meetings of the Board may be held provided
three(3) or more of the Directors submit written requests for such
meetings specifying the matters to be discussed. Within thirty (30)
days upon receipt of such written notice, the Chairman shall convene an
interim meeting of the Board. If the Chairman is unable to participate
in an interim meeting, in his absence the Vice Chairman taking his
place shall decide on the time and location of such interim meetings.
(d)Quorum: Five(5) Directors present in person or by proxy shall
constitute a quorum necessary for the conduct of business at any
meeting of the Board. If at any properly convened meeting, no quorum is
constituted because less than five (5)Directors are present in person
or by proxy, then the meeting shall be canceled, the Chairman may call
another meeting with seven (7) days' notice. Any Director absent from a
meeting without giving a reason therefor and without having appointed a
proxy shall be considered to have abstained from voting. Resolutions,
except those concerning the issues prescribed in Article 9.02 (b),
shall be valid if passed by a majority of the Directors present.
(e)Notice of Meeting: The notice of a Board meeting shall be sent to
all directors ten (10) days in advance of each meeting. The notice
shall state the time, venue and main agenda of the meeting, including
relevant documents and information.
(f)Minutes: The Board will cause complete and accurate summary of
minutes (in both English and Chinese) to be kept of all meetings
(including a copy of the notice of the meeting) and of business
transacted at such meetings. Minutes of all meetings of the Board shall
be distributed to all the Directors as soon as practicable after each
meeting but not later than ten (10) days from the date of such meeting.
Any director who wishes to propose any amendment or addition thereto
shall submit the same in writing to the Chairman and the Vice-Chairmen
within one (1) week after receipt of the proposed minutes. The minutes
shall be finalized by the Chairman and Vice-Chairman not later than
thirty (30) days after the relevant meeting and signed by all the
directors within one (1) week after receipt of the final minutes.
ARTICLE 10. MANAGEMENT ORGANIZATION
10.01 Management Organization;
The Company shall adopt a general manager responsibility system under
the leadership of the Board of Directors. The Company management shall
include a General Manager and two Deputy General Managers. The General
Manager shall be nominated by Party C and each of the two Deputy
General Managers nominated respectively by Party A and Party B and the
Board of Directors needs to unanimously approve the appointment of the
General Manager and the two Deputy General Managers for a term of three
(3) years. The General Manager and the Deputy General Managers may be
removed only by a majority resolution of the Board. If the General
Manager or the Deputy General Manager is removed by Board or if his
term of office expires a successor shall be nominated by the original
nominating Party for approval by the Board of Directors.
10.02 Responsibilities and Power of the General Manager
The General Manager shall at all times be responsible to the Board of
Directors and shall carry out all matters entrusted by the Board. The
General Manager shall be in charge of the financial affairs and the
day-to-day operation and management of the Company. And the Deputy
General Managers shall assist the General Manager in his work. The
General Manager and the Deputy General Managers shall meet regularly to
deal with important issues arising from the operation and management of
the Company.
ARTICLE 11. SITE
11.01 Site
The area of the Site for the Power Plant is approximately 80 MU.
Details regarding the Site are set forth in the Project Feasibility
Study Report.
The use of the Site shall include full access to all necessary public
roads in the vicinity, so that the Company staff and relevant personnel
of parties concerned may have full access to the Site, which shall also
include the right to use external connecting points to public
utilities.
Party A and Party B are duty bound to assist the Company in obtaining
the lawful land use right of the Site during the term of the Joint
Venture Contract so as to conform with the requirement of Chinese laws
and to ensure the construction and normal operation of the Power Plant.
ARTICLE 12. SALE OF ELECTRICITY
12.01 Sale of Electricity
The sale of electricity generated by the Power Plant shall be made
pursuant to the Operation and Offtake Contract entered into by and
between the Company and the Anhui Provincial Electric Power Company.
12.02 Tariff Determination
The tariff of the electricity generated by the Power Plant shall be
determined and adjusted in accordance with the provisions of the
Operation and Offtake Contract entered into by and between the Company
and the Anhui Provincial Electric Power Company, the estimated initial
tariff and the principle of tariff adjustment are subject to the
approval of relevant pricing authority.
ARTICLE 13. CONSTRUCTION
13.01 Construction Management
The Company will select an experienced Chinese or foreign company as
EPC contractor through public bidding. The EPC Contract shall be
comparable to internationally accepted parties in similar projects in
the areas of construction schedules, quality and others. The detailed
clauses shall be specified in the EPC Contract. The EPC Contractor
shall appoint designing and construction consultants who are rich in
constructing and managing gas-steam combined cycle generating set and
agreed to by the company.
13.02 Owner's Engineer
The Company will appoint an owner's engineer to exercise supervision
and management over the construction of the Power Plant.
ARTICLE 14. OPERATION AND MAINTENANCE OF THE POWER PANT
14.01 Operation and Maintenance
The Company will enter into an Operation and Offtake Contract with the
Anhui Provincial Electric Power Company which will be responsible for
the operation, maintenance and repair of the Power Plant and for
providing, on a long-term and stable basis, fuel whose quality must
cater to the operational requirement of the Power Plant.
The manager of the Power Plant is appointed by the Anhui Provincial
Electric Power Company after having consulted the Company and the
appointment shall be submitted to the Board of Directors of the Company
for the record.
ARTICLE 15. LABOR MANAGEMENT
15.01 Labor Management
The Company shall be responsible for its own labor management and is
responsible for recruitment, employment, dismissal, resignation, wages
and welfare of its working personnel in accordance with the 'Label
Management Regulations of the PRC for Foreign Investment Enterprises'
(the 'Labor Regulations') and other relevant regulations. The
organization chart, qualifications and number of employees shall be
determined by the Board of Directors in accordance with the operating
needs of the Company.
ARTICLE 16. FINANCIAL AFFAIRS AND ACCOUNTING
16.01 Financial Principles
(a)The General Manager of the company shall be responsible for the
financial management of the Company.
(b)The Company shall prepare the Company's accounting system and
procedures in accordance with the 'Accounting System of the People's
Republic of China for Foreign Investment Enterprises' and the
'Financial Management System of the People's Republic of China for
Foreign Investment Enterprises'. The Company shall also conduct its
accounting in accordance with such internationally recognized
accounting standards as any foreign lender to the Company may require.
The Company shall practice the accrual system and the debit and credit
accounting system. The Company's accounting system and procedures shall
be submitted to the Board for approval. Once approved by the Board, the
accounting system and procedures shall be filed for the record with the
higher competent authority and with the relevant local department of
finance and tax authorities.
(c)The Company shall adopt RMB. as its bookkeeping base currency.
(d)All accounting records, vouchers and books of the Company shall be
made and kept in Chinese. At the request of Party C, some part of the
records and books will be provide to Party C in English . All Company
accounting statements shall be made and kept in English and Chinese.
16.02 Auditing
(a)The Company will engage an independent accounting firm registered in
China as its auditor to examine and verify the annual financial report.
Such accounting firm shall be of international standard and shall be
entrusted by the Board. The Company shall submit to the Parties an
annual statement of final accounts (including the audited profit and
loss statement and the balance sheet for the fiscal year) within two
(2) months after the end of the fiscal year. Such documentation will be
submitted together with an audit report prepared by the accounting firm
registered in China.
(b)Each Party may, at its own expense, appoint an accountant who is
either an accountant registered abroad or in China. On behalf of the
Party, the independent accountant may audit the Company's accounts.
Such accountants shall be given reasonable access to the Company's
financial records and shall keep confidential all documents under their
auditing.
(c)The Company shall present to the Parties balance sheets, profit and
loss statements and other supplementary information requested by the
Board on a monthly basis. Such information shall be provided to the
Parties both in English and Chinese.
16.03 Bank Accounts and Foreign Exchange Control
The Company shall open a foreign exchange account and a Renminbi
account at banks within or outside China; such bank shall be approved
by the State Administration of Exchange Control. The Company's foreign
exchange transactions shall be handled in accordance with the
regulations of China relating to foreign exchange control.
16.04 Foreign Exchange Balance
(a)In the event the Company borrows foreign currency from lenders not
located in China, the Company shall, in accordance with applicable
foreign exchange regulations of the People's Republic of China, open
USD cash accounts at a bank approved by relevant authorities for the
repayment of principal of and the payment of interest on foreign
currency loans.
(b)Funds in the Company's foreign exchange account shall be used as
determined by the Board of Directors to satisfy foreign exchange debt,
expenses, remittances of profit and other remittances in accordance
with relevant foreign exchange control regulations of the People's
Republic of China.
(c)All remittances to Party C due in accordance with the provisions of
this Contract shall be made to a foreign bank account designated by
Party C in US Dollars or in accordance with the foreign exchange
control regulations of China and the commitment of local foreign
exchange control authority. The Company shall pay for the fee incurred
in the conversion.
16.05 Fiscal Year
The Company shall adopt the calendar year as its fiscal year, which
shall begin on January 1 and end on December 31 of the same year. The
first fiscal year of the Company shall commence on the date when the
Company is established and granted a Business License, and shall end on
December 31 of the same year.
16.06 Revenues and Their Distribution
(a)The revenues due to the Company shall be distributed in accordance
with the following priority of payment
(i) Operation and fuel costs of the Power Plant;
(ii) Financial expenses(loan interest, exchange loss and financing
cost);
(iii) Cost of the Joint Venture Company, including administrative
expenses, insurance expenses, fees payable to auditors,
consultants and advisors and all other such expenses;
(iv) Income tax and other taxes;
(v) Repayment of loan principal;
(vi)Approved by the Board of Directors to cover losses of the
previous year;
(vii) Statutory funds;
(viii) Distributable profit;
(b)After the payment of any applicable related taxes and fees by the
Company, the Board will determine the annual allocations to the
statutory funds as required by Chinese laws and regulations. The sum of
the annual allocations to the statutory funds shall be less than 15% of
the after-tax profit of the year under consideration (unless otherwise
required by law). Any increase or decrease in the percentage to the
statutory funds shall be determined by the Board of Directors, in the
light of annual business operation.
(c)All distributable profits shall be distributed pursuant to amounts
as specified in Appendix 1 hereto. In view of the provision of Article
20 hereto that the fixed assets of the Company will be gratuitously
owned by Party A and Party B upon the expiration of the Joint Venture
term, if the distributable profit in a certain fiscal year during the
Joint Venture term (including the approved extension period) fails to
reach the estimated amount as listed in Appendix 1, the distribution
among the Parties shall be carried out in accordance with the following
priorities: (I) Party C (ii)Party A and Party B
(d)If the company carries losses from the previous year, the
development and reserve funds (the amounts of drawdown will be
determined by the Board ) from the cumulative statutory funds will
first be used to compensate for the losses in the previous year, if
that is still insufficient, then the profits of the current year shall
first be used to cover the losses in the previous year. No profit shall
be distributed by the company unless the deficit from the previous year
is made up. The profits carried out from previous year and retained by
the Company may be distributed together with the distributable profit
of the current year.
(e) Profits shall be distributed in accordance with the distribution
plan formulated in accordance with Appendix 1 of this Contract and the
above stipulation, without the necessity of being unanimously approved
by the Board of Directors. After having received the applicable
approval, the Company may predistribute profits every half a year.
Article 17. Taxation And Insurance
17.01 Taxes
(a)The Company and its Chinese and expatriate employees shall pay tax
under the relevant tax laws of China.
(b)Following approval of this Contract by the Examining and Approving
Authority, the Company will submit an application for confirmation of
the Company as a technically advanced enterprise in accordance with the
'Implementing measures of the Ministry of Foreign Cooperation Trade and
Economic on the Confirmation and Examination of Foreign-Invested
commodity Export Enterprises and Technologically Advanced Enterprises '
in order to obtain the most favorable tax rates.
17.02 Insurance
The insurance for the Company for various kinds of risks shall be
purchased from insurance companies registered within PRC. The Company
shall undertake to procure the types of insurance as required by
overseas creditors which include but are not limited to the following;
(a)Property All Risks Insurance, Construction All Risks Insurance and
Erection All Risks Insurance (including domestic transportation
insurance for equipment) before and after the completion of the Power
Plant and thereafter in respect of any upgrading or maintenance works
to the Power Plant;
(b)Property All Risks Insurance, Machinery Breakdown Insurance,
Business Interruption Insurance, Machinery Breakdown Business
Interruption Insurance, Bodily Injury Insurance, Personal Accident
Insurance and Additional Cover for Medical Expenses for the period
after the completion of the Power Plant; and
(c)Other necessary insurance coverage which the Board of Directors
decides on.
ARTICLE 18. JOINT VENTURE TERM
18.01 Joint Venture Term
The term of the Joint Venture established under this Contract shall
commence on the date the Company is granted a Business Licensed and
shall terminate sixteen (16) years thereafter (including one year of
construction). The fixed assets of the Company will be gratuitously
owned by Party A and Party B upon the expiration of the Joint Venture.
(including the expiration of the extended term of the JV pursuant to
Article 18.02)
18.02 Extensions to the Joint Venture Term
If it is estimated six months prior to the expiration of the term of
this Contract that if the non-fixed assets are liquidated in accordance
with Article 20.03 upon expiration of the term, the Parties can hardly
recover all their investments pursuant to Appendix 1 hereto, than the
directors of the Parties shall unanimously agree upon postponing the
Joint Venture term until the full recovery of investment by the
Parties, and application for approval in respect of extending the Joint
Venture term shall be promptly submitted to the Examining and Approving
Authority.
ARTICLE 19. DEFAULT
19.01 Default
In the event the Company is unable to continue its operation or achieve
the established objectives stipulated in this Contract due to failure
of a Party to fulfill its obligations under this Contract and its
Appendices, the non-defaulting Parties shall have the right to
terminate this Contract in accordance with Article 20 herein and the
liabilities arising from default shall be borne by the defaulting Party
as provided for in this Contract and its Articles of Association. The
defaulting Party shall make the consequent payment arising there from
to the non-defaulting Parties.
ARTICLE 20. TERMINATION AND LIQUIDATION
20.01 Termination
No Party shall have the right to terminates this Contract advanced if
the repayment of the principal and payment of interest on loan under
the Loan Contract have not been completely paid off. After the
completion of the payable period, the Party may terminate this Contract
advanced only under the following circumstances.
(i)The Parties unanimously agree in writing to terminate this Contract;
(ii)A Party materially breaches this Contract or violates the Articles
of Association, and such breach or violation is not cured within thirty
(30) days of written notice to the defaulting Party by a non-defaulting
Party;
(iii)The conditions or consequences of Force Majeure as hereafter
defined in Article 21 significantly interfere with the normal
functioning of the company for a period in excess of eighteen (18)
months and the Parties are unable to find an equitable solution
pursuant to Article 21 hereof;
(iv)The Operation and Offtake Contract and other major contracts are
terminated;
(v)The change of law causes significant adverse consequences to the
Company or any Party, while the economic benefits stipulated in Article
23.02 hereof are not adjusted accordingly.
20.02 Notification Procedure
Mere submission by any Party of a notice indicating a desire to
terminate this Contract shall not by itself constitute a termination of
this Contract. In the event that any Party gives notice pursuant to
Article 20.01 hereof of a desire to terminate this Contract, the
Parties shall, within a two (2) month period after such notice is
given, conduct negotiations and endeavor to resolve the situation which
resulted in the giving of such notice. In the event that the situation
which resulted in the giving of such notice is not cured and that
matters are not resolved to the satisfaction of the Parties within two
(2) months of such notice, the notifying Party may follow the relevant
procedures and laws and apply to the original Examining and Approving
Authority for the termination of the Contract. In the event a default
is committed by a Party to this Contract which results in the
termination of this Contract, the defaulting Party shall bear full
responsibility and costs associated with such default.
20.03 Liquidation
The Company shall carry out the procedures for liquidation of the
Company in accordance with the law of the People's Republic of China,
if this Contract is terminated earlier pursuant to Article 20.01
hereof.
Liquidation Committee: The Board of Directors shall form a Liquidation
Committee, comprising two(2) members appointed by Party A, one(1)
member appointed by Party B and four (4) members appointed by Party C.
The Liquidation Committee shall conduct a thorough examination of the
assets and liabilities of the Company and develop a liquidation plan in
compliance with this Contract and relevant laws and regulations of the
People's Republic of China for the liquidation of the Company. No
member of the Liquidation Committee shall have the power to take any
action binding on the Liquidation Committee, or the Board of Directors,
or the Company without the express authorization and the unanimous
consent of the entire Liquidation Committee. All actions taken by the
Liquidation Committee shall require the unanimous approval of the
entire Liquidation Committee. The Liquidation Committee will value and
liquidate the Company's assets based on the actual circumstances of the
Company valued as an ongoing concern, so as to cause the Parties to
receive the then market value for the assets.
Liquidation Plan: Upon earlier termination of this Contract pursuant to
paragraphs (a),(c), and (d) of Article 20.01 hereof, the liquidation
plan shall provide first for payment of the Company's debts and
expenses. Following such payments, the Company's assets shall be
distributed to the Parties proportionally in accordance with each
Party's registered capital share of the Company. Upon early termination
of the Contract pursuant to section 2 of Article 20.01, the defaulting
Party can participate in the aforementioned distribution only when it
has undertaken its responsibility for breach and indemnified the non
defaulting Party for the loss.
In the event of a situation as mentioned in paragraph (d) of Article
20.01, the Purchaser shall compensate an amount of termination cost to
the Company, pursuant to the Operation and Offtake Contract, the total
assets (including but not limited to fixed assets and circulating
assets) of the Company and the termination cost shall be distributed to
Party C on a priority basis, so that Party C can obtain anticipated
returns as estimated in Appendix I hereof, the remaining part shall be
distributed proportionally to Party A and Party B.
20.04 Normal Termination of Contract Upon Expiration of Joint Venture Term.
In addition to the extension of this contract as stipulated in Article
18.02 hereof, this Contract shall terminate upon expiration of the
joint venture term as designated in Article 18.01 hereof.
Upon the expiration of the joint venture term as stipulated in Article
18 without being extended, the total fixed assets of the Company will
be gratuitously turned over to Party 'A' and Party 'B' registered
capital which the cash from converted non-fixed assets shall be
distributed in accordance with the following Priorities:
(a)Repayment of the Company debts;
(b)To compensate for the difference between the actual returns obtained
by Party C and the estimated amounts as specified in Appendix 1 hereof;
(c)The residual amounts shall be distributed in proportion to the ratio
of investment made by the Parties;
ARTICLE 21. FORCE MAJEURE
21.01 Force Majeure
(a)'Force Majeure ' includes but is not limited to any of the following
events:
i) War, hostilities or rebellion;
ii) Plague or other contagious diseases;
iii) Fire not caused by negligence or deliberateness;
iv) Lightening;
v) Earthquake;
vi) Other forces of nature, including natural disasters.
The aforesaid events shall have simultaneously the following six
characteristics:
i) Arising after the signing of this Contract;
ii) Unforeseen or unavoidable;
iii) Beyond the control of a Party concerned;
iv) Occurring within the Plant Site;
v) Directly preventing a Party from performing this Contract;
vi) Cannot be prevented in spite of utmost efforts being exerted by
that Party.
(b)If occurrence of an event of Force Majeure prevents a party from
fulfilling its obligations ( excluding capital contribution and payment
obligations) under this Contract, the Party may be suspended from
performing such obligations provided;
(i) Suspension of performance is of no greater scope and no longer
duration than is reasonably required to correct consequences caused
by the event of Force Majeure; and
(ii) Suspension of performance will not apply to any obligation to
make payments under this Contract.
(c)In the event any Party is unable to fulfill its obligation under
this Contract as a result of Force Majeure, the Party claiming Force
Majeure shall promptly inform the other two Parties in writing within
15 days of such occurrence. Such notification shall state the nature of
the event, the anticipated duration and any action taken by the
affected party to mitigate the effect. In the event of Force Majeure,
the Parties shall immediately consult with each other in order to find
an equitable solution and shall use all reasonable endeavors to
minimizes the consequences of such Force Majeure.
ARTICLE 22. SETTLEMENT OF DISPUTES
22.01 Conciliation and Mediation
Any dispute in connection with this Contract will be settled through
friendly consultation or conciliation among the Parties. Consultations
shall occur immediately upon the request of one Party to the other
Parties regarding disputes. Disputes may also be mediated by a third
party designated by the Parties to this Contract. If mediation is not
successful within 30 days, disputes may also be submitted to binding,
non-appealable arbitration for settlement.
22.02 Arbitration
The following rules and procedures shall apply to an arbitration of
disputes between the Parties under this Contract.
(a)Arbitration under this Contract will be conducted by an arbitral
tribunal in accordance with UNCITRAL arbitration rules contained in
Resolution 31/98 adopted by the United Nations General Assembly on
December 15, 1976 and entitled 'Arbitration Rules of the United Nations
Commission on International Trade Law' or its amendments as in force at
the time such arbitration is commenced. Should there be a conflict
between the rules and provisions of this Contract and the arbitration
rules, the rules and provisions of this Contract shall govern.
(b)The arbitral tribunal shall have three (3) members. Each Party shall
designate one arbitrator within 30 days after giving or receiving
request for arbitration. The third arbitrator shall be appointed by the
other two arbitrators within 10 days of the appointment of the second
arbitrator. If any of the arbitrators are not appointed within the time
limits set forth in this section, arbitrators will be designated by the
Secretary General of the International Arbitration Center.
(c)All arbitrators must be fluent in Chinese and English .The
arbitration shall be conducted in Chinese and English. Any subsequent
arbitration award shall also be written in Chinese and English.
(d)The venue and organization for arbitration is Singapore
International Arbitration Centre or other international locations or
arbitration organizations agreed to by the Parties.
(e)The Parties agree to accept the arbitration award as final and
binding. The Parties renounce their right to appealing against the
arbitration award.
(f)The Parties agree to bear all costs as determined and allocated in
the arbitration award.
22.03 Continuing Rights and Obligations
The Parties shall continue to exercise their remaining respective
rights, and fulfill their remaining respective obligations under this
Contract except in respect of those matters under dispute.
22.04 Waiver of Immunity
To the extent the Parties may claim for themselves or their assets and
revenues, immunity from suit execution, attachment or other legal
process, the Parties agree not to claim such immunity and agree to
irrevocably waive such immunity to the fullest extent permitted by
applicable law.
ARTICLE 23. APPLICABLE LAW
23.01 Applicable Law
The validity, interpretation and implementation of this Contract shall
be governed by the laws of the People's Republic of China which are
published and publicly available. In the event that there is no
published and publicly available law in China governing a particular
matter relating to this Contract, reference shall be made to general
international commercial practices.
23.02 Economic Adjustment for Change of Law
As used herein 'Change of Law' means the promulgation of any new laws,
rules or regulations in China or the amendment or interpretation of any
existing laws, rules or regulations in China relating to taxes, custom
duties, environmental issues or other matters concerning this Contract.
In the event that a Change of Law adversely and materially affects a
Party's economic benefit under this Contract, the Parties shall
promptly consult with each other and use their best endeavors to
implement adjustments necessary to maintain each Party's economic
benefits derived from this Contract. The basis of this adjustment shall
be no less favorable than the economic benefits it would have derived
if such laws, rules or regulations had not been promulgated or amended
or so interpreted.
23.03 Preferential Treatment
The Company and the Parties shall be entitled to any tax, investment or
other benefits or preferences that become available or publicly known
after the signing of this Contract and which are more favorable than
those set forth in this Contract.
ARTICLE 24. MISCELLANEOUS PROVISIONS
24.01 Environmental
The Company shall undertake environmental protection measures in
accordance with the 'Law of the People's Republic of China on
Environmental Protection ' and other relevant laws and regulations.
24.02 Waiver
To the extent permitted by Chinese Law, failure or delay on the part of
any Party hereto to exercise a right, power or privilege under this
Contract and the Appendices hereto shall not operate as a waiver
thereof or other rights, powers or privileges; nor shall any single or
partial exercise of a right, power or privilege preclude any other
future exercise thereof.
24.03 Binding Effect
This Contract is made for the benefit of the Parties and their
respective lawful successors and assignees and is legally binding on
them. This Contract may not be changed orally, but only by a written
instrument signed by all Parties and approved by the appropriate
Examining and Approving Authority.
24.04 Language
This Contract is executed in the Chinese language and in the English
language. Both language versions shall be equally effective.
24.05 Entire Agreement
This Contract and the Appendices attached to this Contract constitute
the entire agreement between the Parties with respect to the subject
matter of this Contract and supersede all prior discussions,
negotiations and agreements between them. In the event of any conflict
between the terms and provisions of this Contract and those of the
Articles of Association, the terms and provisions of this Contract
shall prevail.
24.06 Notices
Any notice or written communication provided for this Contract by any
Parties or the others, including but not limited to any and all offers,
writings, or notices to be given thereunder, shall be in writing made
in English and Chinese, and shall be sufficiently given if addressed as
set forth below and sent by registered mail or an internationally
recognized overnight courier services, hand delivered or transmitted
clearly by facsimile, however all facsimile shall be confirmed by
courier service delivered letter, promptly transmitted or addressed to
the appropriate Party. The date of actual receipt of a notice or
communication thereunder shall be deemed to be the effective date. All
notices and communications shall be sent to the appropriate address set
forth below, until the same is changed by notice given in writing to
the other Parties.
Party A: Anhui Liyuan Electric Power Development Company Limited
Address: No.415 Wuhu Road
Hefei, Anhui province
China
Telephone No: 86-551-3642775
Facsimile No: 86-551-3637642
Attention: Cheng Guangjie
Zip Code: 230061
Party B: Hefei Municipal Construction and Investment Company
Address: No. 186 Suzhou Road
Hefei, Anhui province
China
Telephone No: 86-551-2617410
Facsimile No: 86-551-2649751
Attention: Shen Dequan
Zip Code: 230001
Party C: AES - Anhui Power Company Ltd.
Address: 3/F, Golden Bridge Building No.1
Jianguomenwai Street, Beijing
China
Telephone: 86-10-5089619
Facsimile No: 86-10-5089628
Attention: Paul T. Hanrahan
Zip Code: 100020
24.08 Appendices
The Appendices listed below are made an integral part of this Contract
and are equally binding with Article 1 through Article 24 herein.
SIGNATURES
IN WITNESS WHEREOF, each of the Parties hereto have caused this
Contract to be executed by their duly authorized representatives on the
date first set forth above.
PARTY A: Anhui Liyuan Electric Power Development Company Ltd.
Name:[Signature Illegible]
Title:
Nationality: Chinese
PARTY B: Hefei Municipal Construction and Investment Company.
Name:[Signature Illegible]
Title:
Nationality: Chinese
PARTY C: AES Anhui Power Company Limited.
Name:[Signature Illegible]
Title:
Nationality: U.S.A.
Appendix 1. The Projected Return on Equity Principal of the Parties over the
Years.
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Anhui Liyuan-AES Power Co. Ltd. - Auhui Liyuan Electric Power Development Co. Ltd., Hefei Municipal Construction and Investment Co. and AES Anhui Power Co. Ltd.
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