{"id":42881,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/support-contract-aes-tian-fu-power-co-ltd-and-chengdu-aes.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"support-contract-aes-tian-fu-power-co-ltd-and-chengdu-aes","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/support-contract-aes-tian-fu-power-co-ltd-and-chengdu-aes.html","title":{"rendered":"Support Contract &#8211; AES Tian Fu Power Co. Ltd. and Chengdu AES Kaihua Gas Turbine Power Co. Ltd."},"content":{"rendered":"<pre>\n Information contained herein, marked with [***], is being filed pursuant to a\n                      request for confidential treatment.\n\n\n\n                                SUPPORT CONTRACT\n\n\n\n                                     BETWEEN\n\n\n\n                       AES TIAN FU POWER COMPANY (L) LTD.\n\n\n\n                                       AND\n\n\n\n                 CHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.\n\n\n\n\n\n                                TABLE OF CONTENTS\n\n                                                                            Page\n                                                                            ----\n\n1.  Definitions and Principles of Construction.................................1\n\n2.  Amount and Terms Of Loans..................................................1\n         2.1.  Loans ..........................................................1\n         2.2.  Notes ..........................................................1\n         2.3.  Interest Payments ..............................................2\n         2.4.  Mandatory Repayments of Principal ..............................2\n         2.5.  Optional Term Loan Prepayments .................................3\n         2.6.  Other Amounts ..................................................3\n         2.7.  Payments to the Arranger; Application of Proceeds ..............3\n\n3.  Loans .....................................................................3\n         3.1.  Method of Borrowing; Transfer of Funds .........................3\n         3.2.  Conditions to all Loans ........................................4\n         3.3.  Conditions to First Construction Loan ..........................4\n         3.4.  Conditions to Additional Construction Loans ....................5\n         3.5.  Conditions to the Term Loan ....................................5\n\n4.  Representations and Warranties of the Company .............................6\n         4.1.  Corporate Existence and Power ..................................6\n         4.2.  Authorization; Contravention ...................................6\n         4.3.  Binding Effect .................................................6\n         4.4.  Financial Information ..........................................6\n         4.5.  Litigation .....................................................7\n\n5.  Covenants of the Company ..................................................7\n         5.1.  Existence ......................................................7\n         5.2.  Notice of Certain Events .......................................7\n         5.3.  Delivery of Financial Statements and Other Reports .............7\n         5.4.  Insurance ......................................................8\n         5.5.  Government Rules and Governmental Approvals ....................8\n         5.6.  Performance of Project Documents ...............................8\n         5.7.  Construction and Operation of the Power Station ................8\n         5.8.  Environmental Compliance .......................................8\n         5.9.  Use of Proceeds ................................................9\n         5.10. Payment of Taxes and Claims ....................................9\n         5.11. Event of Loss ..................................................9\n         5.12. Maintenance of Books and Records; Inspection by the Arranger ...9\n         5.13. Recording of Financing Documents ...............................9\n         5.14. Instruments of Further Assurance ...............................9\n         5.15. Issuance of Additional Debt ....................................9\n\n\n         5.16. Liens .........................................................10\n         5.17. Nature of Business ............................................10\n         5.18. Modification of Agreements ....................................10\n         5.19. Guarantees ....................................................10\n         5.20. Prohibition on Fundamental Changes ............................10\n         5.21. Prohibition on Disposition of Assets ..........................11\n         5.22. Transactions With Affiliates ..................................11\n         5.23. Power Purchaser's Assignment ..................................11\n         5.24. Notice to the Arranger ........................................11\n\n6.  Events of Default:  Remedies .............................................11\n         6.1.  'Event of Default' Defined ....................................11\n         6.2.  Exercise of Remedies ..........................................14\n         6.3.  Collection of Indebtedness by the Arranger; \n                 Deficiency Judgment .........................................14\n         6.4.  Application of Proceeds of Collateral .........................14\n\n7.  Intercreditor Arrangements................................................15\n         7.1.  Borrowings and Repayments......................................15\n         7.2.  Pari Passu.....................................................15\n         7.3.  Amendment or Assignment........................................15\n\n8.  Miscellaneous ............................................................15\n         8.1.  Benefit of Agreement; Partial Invalidity ......................15\n         8.2.  Governing Law .................................................16\n         8.3.  Friendly Consultations ........................................16\n         8.4.  Arbitration ...................................................16\n         8.5.  Continuing Rights and Obligations .............................16\n         8.6.  Enforcement of Award ..........................................17\n         8.7.  Waiver of Sovereign Immunity Defense ..........................17\n         8.8.  Remedies Cumulative; Delay or Omission Not to Impair Remedies .17\n         8.9.  Amendment or Waiver ...........................................17\n         8.10. Notices .......................................................17\n         8.11. No Oral Agreement .............................................18\n         8.12. Counterparts ..................................................18\n         8.13. Verification and Approval by the Chengdu SAEC .................18\n\nAnnex A    DEFINITIONS\nAnnex B    COMMITMENTS\n\nExhibit 1  Form of Construction Note\n        Schedule A\nExhibit 2  Form of Term Loan Note\n        Schedule A\nExhibit 3  Request for Borrowing\n\n\n\n\n\n\n            This SUPPORT CONTRACT, dated as of August 12, 1996 (the 'Contract'),\nis between AES Tian Fu Power  Company (L) Ltd.,  a company  organized  under the\nlaws of Labuan (the  'Arranger'),  and Chengdu AES KAIHUA Gas Turbine Power Co.,\nLtd., a Sino-foreign joint venture company established under the laws of the PRC\n(the 'Company').\n\n                                    RECITALS\n\n            WHEREAS,  the  Company  desires  to  borrow  funds  to pay  for  the\nconstruction and operation of the Power Station; and\n\n            WHEREAS,  the  Arranger  pursuant to the Joint  Venture  Contract is\nwilling,  subject to the terms and conditions contained herein, to make loans to\nthe Company;\n\nNOW THEREFORE,  in consideration of the mutual promises and covenants  contained\nherein,  the  receipt  and  sufficiency  of which is  hereby  acknowledged,  the\nArranger and the Company hereby agree as follows:\n\n\n            1. Definitions and Principles of  Construction.  For all purposes of\nthis Contract, (i) capitalized terms used but not otherwise defined herein shall\nhave the  meanings  set  forth in Annex A  hereto,  and (ii) the  principles  of\nconstruction set forth in Annex A shall apply for purposes of this Contract.\n\n\n            2.   Amount and Terms Of Loans.\n\n            2.1. Loans.\n\n                 (a) Construction  Loans.  The Arranger  agrees,  subject to and\nupon the terms and  conditions  set forth  herein,  to make loans to the Company\nfrom time to time on any  Business  Day  during  the  Construction  Period in an\naggregate amount not to exceed at any time outstanding the Arranger's Commitment\n(each such loan, a 'CONSTRUCTION  LOAN').  Each borrowing of Construction  Loans\nhereunder shall be in an aggregate amount of US$500,000 or an integral  multiple\nof  US$100,000 in excess  thereof.  Once repaid,  Construction  Loans may not be\nreborrowed.\n\n                 (b) Term Loan.  The  Arranger  agrees,  subject to and upon the\nterms and  conditions  set forth  herein,  to make a loan to the  Company on the\nMandatory  Repayment  Date in an aggregate  amount not to exceed the  Arranger's\nCommitment  (the 'Term  Loan').  The Term Loan  borrowing  shall be in an amount\nequal to the aggregate  outstanding  principal amount of Construction Loans plus\naccrued and unpaid interest thereon,  subject to the limitation in the preceding\nsentence. Once prepaid or repaid, Term Loans may not be reborrowed.\n\n            2.2. Notes.\n\n                 (a)  The  Company's  obligation  to pay  the  principal  of and\ninterest on the  Construction  Loans shall be  evidenced  by a  promissory  note\nsubstantially  in the  form of  Exhibit  1  hereto  in an  amount  equal  to the\nCommitment,  completed in  accordance  with the terms of this  Contract and duly\nexecuted, issued and delivered by the Company (the 'Construction Loan Note').\n\n                 (b)  The  Company's  obligation  to pay  the  principal  of and\ninterest on the Term Loan shall be evidenced by a promissory note  substantially\nin the form of Exhibit 2 hereto,  completed in accordance with the terms of this\nContract and duly executed,  issued and delivered by the Company (the 'Term Loan\nNote').\n\n            2.3. Interest Payments.\n\n                 (a) Interest  shall accrue on the  aggregate  unpaid  principal\namount of each  Construction Loan during each calendar month at a rate per month\nequal to [***] (or a pro-rata portion thereof for amounts  outstanding  during a\nportion of the month).  Interest on the  Construction  Loans shall be compounded\nmonthly,  and  accrued  interest  on the  outstanding  principal  amount  of the\nConstruction  Loans shall be payable by the Company on the  Mandatory  Repayment\nDate.\n\n[***] Filed separately with the Commission pursuant to a request for \nconfidential treatment.\n\n                 (b) Interest  shall accrue on the  aggregate  unpaid  principal\namount of the Term Loan during each quarter at a rate per quarter equal to [***]\n(or a pro-rata portion thereof for amounts  outstanding  during a portion of the\nquarter).  Interest on the Term Loan shall be compounded quarterly,  and accrued\ninterest on the outstanding  principal  amount of the Term Loan shall be payable\nby the Company on each Term Loan Repayment Date.\n\n[***] Filed separately with the Commission pursuant to a request for \nconfidential treatment.\n\n                 (c)  Interest  on each Loan shall be computed on the basis of a\n360-day year consisting of twelve 30-day months.  Interest shall accrue from the\nmost recent  date to which  interest  has been paid or, if no interest  has been\npaid,  from the date  requested  by the  Arranger  to its bank to  transfer  the\nproceeds of the respective Loan to the Company.\n\n                 (d) If the Company shall fail to make any payment  hereunder or\non the Notes when due, it shall pay on demand  interest on such  amounts (to the\nextent  permitted by law) to the date of actual payment (after as well as before\njudgment)  at a rate per annum equal to the rate  provided in Section 2.3 (a) or\n(b), as the case may be, plus 2%.\n\n            2.4. Mandatory Repayments of Principal.\n\n                 (a) Principal of the Construction Loans shall be repaid in full\nby the Company,  together with any outstanding  accrued interest thereon, on the\nMandatory Repayment Date.\n\n                 (b)  Principal  of the Term Loan shall be repaid by the Company\nin 20 consecutive  semi-annual  installments  of equal amounts  beginning on the\ndate  occurring six months after the Mandatory  Repayment  Date and on each date\noccurring six calendar months thereafter (each such date, a 'Term Loan Repayment\nDate'),  provided that if any such date is not a Business Day, the relevant Term\nLoan Repayment Date shall be the next following  Business Day. On the final Term\nLoan  Repayment  Date,  all  outstanding  principal  amounts  of the Term  Loan,\ntogether with any outstanding accrued interest thereon, shall be paid in full to\nthe  Arranger.  The Parties shall  complete  Schedule A to the Term Loan Note to\nreflect actual Term Loan Repayment  Dates prior to the issuance of the Term Loan\nNote.\n\n            2.5. Optional Term Loan Prepayments.  The Company may, upon at least\nfive (5) Business  Days prior written  notice to the  Arranger,  prepay the Term\nLoans,  in whole or in part, in an aggregate  principal  amount of US$250,000 or\nintegral  multiples of US$50,000 in excess  thereof,  together  with all accrued\ninterest thereon to the date of prepayment. Upon receipt by the Arranger of such\na notice of  prepayment  in  accordance  with this  section,  such notice  shall\nthereafter not be revocable by the Company.  Any such  prepayments  shall reduce\npro-rata amounts owing on any remaining Term Loan Repayment Dates.\n\n            2.6. Other Amounts. All payments of principal,  premium, if any, and\ninterest  in respect  of the Notes  will be made free and clear of, and  without\nwithholding or deduction for, any Withholding  Taxes.  If any Withholding  Taxes\nare so imposed, the Company will pay such additional amount ('Additional Company\nAmounts')  as will result in receipt by the  Arranger  of such  amounts as would\nhave been received by it had no such Withholding Taxes been imposed.\n\n            2.7.  Payments to the  Arranger;  Application  of Proceeds.  (a) All\npayments to the Arranger of interest, principal,  Additional Company Amounts and\nany other  amounts  owing  hereunder  shall be made in  Dollars  in  immediately\navailable  funds and shall be made to a bank account  designated by the Arranger\nin a written notice to the Company.\n\n                 (b) Except as provided in Section 6.4, all payments received by\nthe  Arranger  hereunder  shall be  applied,  as promptly  as  possible,  in the\nfollowing  order:  (i) first,  to the payment of costs and  expenses  hereunder,\nincluding  those from the  enforcement  of the Contract and the other  Financing\nDocuments,  (ii) second, to the payment of Additional  Company Amounts,  if any,\nand accrued but unpaid interest, including default interest, and (iii) third, to\nthe payment of  principal,  premium and all other  obligations  owing under this\nContract and the other Financing Documents.\n\n\n            3.   Loans.\n\n            3.1. Method of Borrowing; Transfer of Funds.\n\n                 (a) The Company may request a Loan by making a written  request\nto the  Arranger  no less than seven (7) days prior to the date of the  proposed\nLoan.  Each such  request  shall be in the form of  Exhibit 3 hereto,  with such\nblanks  appropriately  completed.  All such  written  requests for a Loan by the\nCompany  shall be  irrevocable  unless the Company  provides the  Arranger  with\nwritten notice of its  cancellation  of a request no later than two (2) Business\nDays prior to the date specified for the making of the Loan.\n\n                 (b)  Subject  to the terms  and  conditions  contained  in this\nContract,  the  Arranger  shall make Loan  amounts  available  to the Company in\nDollars  in  immediately  available  funds  in  accordance  with  the  Company's\ninstructions set forth in the relevant request for a Loan.\n\n            3.2. Conditions to all Loans. The Arranger's  obligation to make any\nLoan is subject to  performance by the Company of all of its  obligations  under\nthis Contract and the  fulfillment  (or waiver in writing by the Arranger in its\nsole discretion) of the following conditions precedent:\n\n                 (a) receipt by the  Arranger of the written  request for a Loan\nas required by Section 3.1 (a) hereof;\n\n                 (b) no Default shall have occurred and be continuing  hereunder\nand no Default  under any agreement to which the Company is a party would result\nfrom the making of the Loan or the application of the proceeds therefrom;\n\n                 (c) the representations and warranties of the Company contained\nin this  Contract,  the Financing  Documents  and each of the Project  Documents\nshall be true and correct on as of the date of such Loan;\n\n                 (d) such  Loan  will not  contravene  any  provision  of law or\nregulation of any Governmental Authority;\n\n                 (e) (i) all Clearances for the Power Station, for the Financing\nDocuments,  and for each of the Project Documents, and (ii) the Liens created by\nthe Security  Documents in the  Collateral,  on and as of the date of such Loan,\nshall be in full force and effect;\n\n                 (f) receipt by the Arranger of a certificate  dated the date of\nthe Loan, duly executed by an Authorized  Officer of the Company,  certifying as\nto the effect set forth in Section 3.2(b), (c), (d), and (e) hereof; and\n\n                 (g) the  Company  shall  have  duly  authorized,  executed  and\ndelivered  to  the  Arranger  the  Security  Documents  in  form  and  substance\nsatisfactory to the Arranger;\n\n                 (h) the  shareholders  of the  Company  shall  have made  their\ninitial  contributions to the registered  capital of the Company pursuant to the\nterms of the Joint Venture Contract; and\n\n                 (i)  receipt  by the  Arranger  of all  such  other  documents,\ninstruments,  or opinions of counsel it deems necessary or advisable in order to\nmake the Loans.\n\n            3.3.   Conditions  to  First   Construction   Loan.  The  Arranger's\nobligation  to  make  the  first   Construction   Loan  shall,  in  addition  to\nsatisfaction  of the  requirements  of  Section  3.2  hereof,  be subject to the\nfulfillment (or waiver in writing by the Arranger in its sole discretion) of the\nfollowing conditions precedent:\n\n                 (a)  receipt by the  Arranger of a duly  executed  Construction\nLoan Note of the Company, dated the date of the making of the first Construction\nLoan;\n\n                 (b)  receipt by the  Arranger  of an  opinion of the  Company's\ncounsel,  in form and substance  satisfactory  to the Arranger,  with respect to\ncertain  matters  relating  to the  Construction  Loan  to be  indicated  by the\nArranger;\n\n                 (c)  receipt by the  Arranger of all  documents  it may request\nwith respect to (i) the existence of the Company,  (ii) the corporate  authority\nof the Company and the validity of each of the Financing Documents and (iii) any\nother matters  related  thereto,  all in form and substance  satisfactory to the\nArranger;\n\n                 (d) receipt by the  Arranger of executed  copies of all Project\nDocuments entered into by the Company;\n\n                 (e)  receipt  by  the   Arranger  of  copies  of  all  required\nClearances  for the Power Station,  for the Financing  Documents and for each of\nthe Project Documents;\n\n                 (f) receipt by the Arranger of evidence,  in form and substance\nsatisfactory  to the  Arranger,  that the Company is required to make payment of\nProject Costs and that it does not possess the funds, either by way of equity or\ndebt, to make such payment of Project Costs; and\n\n                 (g)  evidence,  in  form  and  substance  satisfactory  to  the\nArranger,  that all filings and registrations of each of the Security  Documents\nhave been made and that,  as a  consequence,  the  Security  Documents  create a\nlegally valid  perfected first priority  security  interest in the Collateral in\nfavor of the Arranger and the Other  Arrangers,  securing the Arranger's and the\nOther Arrangers' rights under this Contract and the Other Contracts.\n\n            3.4.  Conditions to Additional  Construction  Loans.  The Arranger's\nobligations  to make  additional  Construction  Loans shall,  in addition to the\nsatisfaction  of the  requirements  of  Section  3.2  hereof,  be subject to the\nfulfillment (or waiver in writing by the Arranger in its sole discretion) of the\nfollowing conditions precedent:\n\n                 (a) receipt by the Arranger of evidence,  in form and substance\nsatisfactory  to the  Arranger,  that the Company is required to make payment of\nProject Costs and that it does not possess the funds, either by way of equity or\ndebt, to make such payment of Project Costs.\n\n            3.5. Conditions to the Term Loan. The Arranger's  obligation to make\nthe Term Loan shall, in addition to satisfaction of the  requirements of Section\n3.2 hereof,  be subject to the fulfillment (or waiver in writing by the Arranger\nin its sole discretion) of the following conditions precedent:\n\n                 (a)  receipt by the  Arranger of a copy of the  Certificate  of\nPerformance Acceptance of the Power Station;\n\n                 (b) receipt by the Arranger of a duly  executed  Term Loan Note\nof the Company dated the date of the making of the Term Loan;\n\n                 (c)  receipt by the  Arranger  of an  opinion of the  Company's\ncounsel,  in form and substance  satisfactory  to the Arranger,  with respect to\ncertain matters relating to the Term Loan to be indicated by the Arranger; and\n\n                 (d) receipt by the Arranger of evidence,  in form and substance\nsatisfactory to the Arranger,  reconfirming that the Security Documents continue\nto create a legally valid perfected first priority security interest and Lien in\nthe  Collateral in favor of the Arranger and the Other  Arrangers,  securing the\nArranger's  and the Other  Arrangers'  rights under this  Contract and the Other\nContracts.\n\n\n            4.   Representations and Warranties of the Company.\n\n            The Company represents and warrants as follows:\n\n            4.1.  Corporate  Existence  and Power.  The Company is a corporation\nduly organized, validly existing and in good standing under the laws of the PRC,\nand has all  corporate  powers  and all  Clearances  required  to  carry  on its\nbusiness as presently conducted.\n\n            4.2.  Authorization;  Contravention.  The  execution,  delivery  and\nperformance  by  the  Company  of  each  of  the  Financing  Documents  and  the\nconsummation of the transactions  contemplated  thereby are within the Company's\ncorporate powers, have been duly authorized by all necessary corporate and joint\nventure action,  require no further action by or in respect of any  Governmental\nAuthority and do not contravene, or constitute a Default under, any provision of\napplicable law or regulation or of any  agreement,  judgment,  order,  decree or\nother instrument binding upon the Company and will not result in the creation or\nimposition of any Lien on any asset of the Company (other than a Lien created by\nthe Security Documents).\n\n            4.3.  Binding Effect.  This Contract has been, and each of the other\nFinancing  Documents when delivered will have been,  duly executed and delivered\nby the Company.  Upon filing with the Chengdu  SAEC,  this Contract will be, and\neach of the other Financing  Documents when delivered will be, the legal,  valid\nand  binding  obligations  of the  Company,  enforceable  against the Company in\naccordance with their terms.\n\n            4.4.  Financial  Information.  All financial  information  heretofor\nprovided  by the  Company to the  Arranger  fairly  present in  conformity  with\nPeople's  Republic of China  Accounting  Rules the  financial  condition  of the\nCompany as of its date.\n\n            4.5. Litigation. There is no action, suit, or proceeding pending, or\nthreatened,  against or affecting the Company  before any court or arbitrator or\nany Governmental Authority.\n\n\n            5. Covenants of the Company.\n\n            So long as any Loan shall remain  unpaid or the Arranger  shall have\nany Commitment hereunder, the Company covenants as follows:\n\n            5.1. Existence.  The Company shall maintain its legal existence as a\nSino-foreign joint venture established under the laws of the PRC.\n\n            5.2. Notice of Certain Events.  The Company shall give notice to the\nArranger,  promptly following an Authorized Officer's learning of the occurrence\nthereof,  of (a) any Default (other than an immaterial  Default that such Person\nreasonably anticipates will be cured on or before the seventh Business Day after\nan  Authorized   Officer  becomes  aware  thereof)  or  any  Event  of  Default,\nspecifically stating that such event or condition has occurred and describing it\nand any action  being or  proposed  to be taken with  respect  thereto,  (b) the\noccurrence  of an Event  of Loss (or  threat  of an  Event of  Eminent  Domain),\ntogether with the details  thereof and the action which the Company is taking or\nproposes to take with respect thereto,  (c) any action, suit or proceeding by or\nbefore any Governmental Authority, arbitral tribunal or other body which has had\nor could reasonably be expected to have a Material Adverse Effect, together with\nthe details  thereof,  (d) receipt of any notice from the Power Purchaser of any\ncircumstance,  act or condition which has had or would reasonably be expected to\nhave a Material Adverse Effect, together with the details thereof and the action\nwhich the  Company  is taking or  proposes  to take with  respect  thereto,  (e)\nwritten notice of any material Default by it under, or material breach by it of,\nthe  Security  Documents  or  relating  to the  Collateral,  and (f)  any  other\ncircumstance,  act or condition which has had or would reasonably be expected to\nhave a Material Adverse Effect, together with the details thereof and the action\nwhich the Company is taking or proposes to take with respect thereto.\n\n            5.3. Delivery of Financial Statements and Other Reports. The Company\nshall furnish to the Arranger:\n\n                 (a) as soon as available and in any event within 120 days after\nthe end of each of its fiscal  years  (commencing  with the fiscal  year  ending\nDecember 31,  1996),  copies of its audited  balance sheet as of the end of such\nfiscal  year and copies of its audited  statements  of income and cash flows for\nsuch fiscal year (in each case,  in accordance  with People's  Republic of China\nAccounting  Rules)  setting  forth in each case  corresponding  figures from the\npreceding  fiscal  year,  and  accompanied  by an  opinion  thereon of a firm of\nindependent public accountants of recognized international standing;\n\n                 (b) as soon as available  and in any event within 60 days after\nthe end of each of its first  three  fiscal  quarters,  copies of the  unaudited\nbalance  sheet of the  Company as of the end of such  quarter  and copies of its\nunaudited  statements  of income and cash flow for such  quarter and fiscal year\nthrough such quarter (in each case,  in  accordance  with  People's  Republic of\nChina  Accounting  Rules)  setting  forth in each  case,  in  comparative  form,\ncorresponding  unaudited  figures  from  the  preceding  fiscal  year,  prepared\nconsistently with the annual statements described in Section 5.3(a) (but subject\nto year end  adjustments  and such other  adjustments as are applicable  and, in\neach case,  consistent  with  People's  Republic of China  Accounting  Rules and\nnecessary for  meaningful  comparison),  and  accompanied by a certificate of an\nAuthorized  Officer of the Company to the effect that such financial  statements\nfairly represent its financial  condition and results of operations at and as of\ntheir respective dates, subject to such adjustments; and\n\n                 (c) a copy of each annual  operating budget and fuel management\nplan,  if any,  as soon as  available,  but in any event not later  than 30 days\nprior to the beginning of the period covered by such annual operating budget and\nfuel management plan, respectively.\n\n            Notwithstanding  the  foregoing,  the  Arranger  shall  be  under no\nobligation  to review or to take any action with respect to the  information  or\ndocuments provided to it pursuant to this Section 5.3.\n\n            5.4.  Insurance.  The Company  shall  procure at its own expense and\nmaintain in full force and effect at all times  insurance in form and  substance\nacceptable to the Arranger.\n\n            5.5. Government Rules and Governmental Approvals.  The Company shall\ncomply with all Government Rules applicable to it and the Power Station,  except\nwhere the failure to do so could not have a Material Adverse Effect.\n\n            5.6. Performance of Project Documents. The Company shall perform all\nof its covenants, agreements and obligations under each of the Project Documents\nto which it is a party,  except  where  the  failure  to do so could  not have a\nMaterial Adverse Effect.  The Company shall take such reasonable steps as may be\nnecessary  to  enforce  the  material  obligations  of the other  parties to the\nProject Documents.\n\n            5.7.  Construction  and Operation of the Power Station.  The Company\nshall (a) construct, operate, and maintain the Power Station, or cause the Power\nStation to be  constructed,  operated,  and  maintained,  in accordance with the\nterms of the Project Documents and prudent operating  practices and (b) promptly\ninvoice,  and use commercially  reasonable efforts to collect, all payments owed\nby the Power Purchaser.\n\n            5.8.  Environmental  Compliance.  The Company  shall comply with all\nEnvironmental  Laws  applicable  to it and to the Power  Station,  except  where\nfailure to do so could not have a Material Adverse Effect. The Company shall use\nreasonable  efforts to prevent  any  physical  condition  from  existing  on any\nproperty  owned  or  operated  by the  Company  or on any  property  that may be\nimpacted  by the  Company's  operations  which  could give rise to any  remedial\nobligation under any  Environmental  Laws or which could result in any liability\nto any  third  party  claiming  damage  to  person  or  property  as a result or\nconsequence of said physical condition, in each case which could have a Material\nAdverse Effect.\n\n            5.9. Use of Proceeds.  The Company  shall use the proceeds  from the\nConstruction  Loans solely to pay for Project  Costs.  The Company shall use the\nproceeds from the Term Loan solely to repay the  Construction  Loans,  including\naccrued interest thereon.\n\n            5.10.  Payment of Taxes and Claims.  The Company  shall duly pay and\ndischarge  or cause to be paid or  discharged  prior to  delinquency  all taxes,\nassessments and governmental and other charges lawfully levied and assessed upon\nit, the Power Station and the Collateral,  or upon the franchises,  earnings and\nbusiness of it, the Power  Station and the  Collateral,  including all penalties\nand interest thereon,  other than any such taxes,  assessments,  or charges that\nare the subject of a Good Faith Contest. The Company shall promptly pay or cause\nto be paid any valid, final judgment enforcing any such tax, assessment, charge,\nlevy or claim and cause the same to be satisfied of record  unless such judgment\nis the subject of a Good Faith Contest.\n\n            5.11. Event of Loss. If an Event of Loss shall occur with respect to\nany portion of the  Collateral,  the Company shall,  to the extent  commercially\nreasonable,  diligently  pursue all of its rights to  compensation  against  the\napplicable Governmental Authority or any other Person with respect to such Event\nof Loss,  and deposit in a trust account  subject to the control of the Arranger\nand the Other  Arrangers all Loss Proceeds  received in respect of such Event of\nLoss  (after  deducting  all  reasonable  costs and  expenses  incurred by it in\npursuing such compensation against such Governmental Authority or other Person).\n\n            5.12. Maintenance of Books and Records;  Inspection by the Arranger.\nThe  Company  shall  keep  proper  books and  records  of all its  business  and\nfinancial affairs in accordance with People's Republic of China Accounting Rules\nand  shall,  upon  the  reasonable  written  request  of  the  Arranger,  permit\nrepresentatives  of the Arranger to inspect its properties  (including the Power\nStation),  books,  records,  reports  and other  papers  and to take  copies and\nextracts therefrom.\n\n            5.13. Recording of Financing  Documents.  The Company will cause the\nFinancing  Documents  at all times to be duly  registered,  recorded or filed in\nsuch  manner and in such places as may in the  reasonable  opinion of counsel to\nthe  Arranger  be  required by  applicable  law in order to  preserve  fully and\nmaintain the Liens  intended to be created under the Financing  Documents to the\nextent  attainable  under  applicable  law. The Company  shall from time to time\nexecute  or cause to be  executed  any and all  further  instruments  reasonably\nrequired to maintain  and preserve  the Liens  intended to be created  under the\nFinancing Documents.\n\n            5.14.  Instruments of Further Assurance.  The Company will, upon the\nArranger's reasonable request,  execute and deliver such further instruments and\ndo such further acts as may be necessary or proper to carry out more effectually\nthe purposes of this Contract.\n\n            5.15.  Issuance of Additional  Debt.  The Company shall not incur or\nsuffer to exist any Indebtedness, except for Permitted Indebtedness.\n\n            5.16.  Liens.  The  Company  shall not  create or suffer to exist or\npermit  any Lien upon or with  respect to any of its  properties  except for (a)\nLiens securing  Indebtedness  arising under this Contract,  the other  Financing\nDocuments or any Project  Document,  (b) mechanics' or materialmen's  Liens that\nare subject to a Good Faith Contest, (c) Liens for taxes not yet due and payable\nor taxes that are the subject of a Good Faith Contest,  (d) Permitted Liens, and\n(e) Liens relating to Permitted Indebtedness.  Prior to granting any Lien on any\nCollateral in connection with the incurrence of Permitted Indebtedness permitted\npursuant  to clause (e) above,  the  Company  shall  furnish to the  Arranger an\nopinion of counsel reasonably  satisfactory to the Arranger stating that, in the\nopinion  of such  counsel,  such  action has been  taken as is  necessary  under\napplicable  law to maintain the Lien  intended to be created under the Financing\nDocuments or stating that no such action is necessary to maintain such Lien. All\nreferences  herein  to  maintaining  a Lien  include,  but are not  limited  to,\nmaintaining the intended  priority of such Lien to the extent  attainable  under\napplicable law.\n\n            5.17.  Nature of  Business.  The  Company  shall  not  engage in any\nbusiness  other  than the  ownership  and  operation  of the  Power  Station  as\ncontemplated or allowed by the Project Documents and the Financing Documents.\n\n            5.18.  Modification  of  Agreements.   (a)  The  Company  shall  not\nterminate  or  amend,  modify or waive any  provision  under any of the  Project\nDocuments  to which it is a party or  assignee  unless the  Arranger  shall have\nreceived a certificate of an Authorized  Officer of the Company  certifying that\n(i) such termination,  amendment, modification or waiver could not reasonably be\nexpected to have a Material  Adverse Effect taken as a whole either currently or\nin the future,  and (ii) such  termination,  amendment,  modification  or waiver\ncould not  reasonably  be expected to materially  increase the  likelihood of an\noccurrence of a future Material Adverse Effect.\n\n                 (b) The Company shall not terminate, amend, modify or waive any\nrights under the Letter(s) of Undertaking;  provided,  however, that the Company\nmay confirm the continued  validity of such Letters of  Undertaking,  obtain new\nletters  with  provisions  no less  favorable  to the Company  than the existing\nletters or extend the effectiveness of such letters.\n\n            5.19.  Guarantees.  Except as contemplated by the Project Documents,\nthe Company shall not contingently or otherwise be or become liable, directly or\nindirectly, in connection with any Guarantee except (a) indemnities with respect\nto unfilled materialmen's,  mechanics',  workmen's,  repairmen's,  employees' or\nother  similar Liens  arising in the course of  construction  or in the ordinary\ncourse of operations or  maintenance of the Power  Station,  (b)  indemnities to\nGovernmental  Authorities  relating to any expenses incurred that are incidental\nto obtaining  easements for the benefit of the Power Station and (c)  Guarantees\nof Permitted  Indebtedness  the proceeds of which result in a direct  benefit to\nCompany.\n\n            5.20.  Prohibition  on  Fundamental  Changes.  The Company shall not\nenter  into any  transaction  of merger or  consolidation,  change  it's form of\norganization,  liquidate  or  dissolve  itself  (or suffer  any  liquidation  or\ndissolution). Except as contemplated in the Project Documents, the Company shall\nnot purchase or otherwise  acquire all or substantially all of the assets of any\nPerson.\n\n            5.21.  Prohibition on Disposition of Assets.  Except as contemplated\nby the Project Documents or permitted pursuant to the Financing  Documents,  the\nCompany  shall not  lease (as  lessor)  or  dispose  of,  sell or  transfer  (as\ntransferor)  any  property  or assets  material  to the  operation  of the Power\nStation,  except (a) in the ordinary  course of business to the extent that such\nproperty  is worn out or no  longer  useful or  usable  in  connection  with the\noperation of the Power Station or (b) to the extent such property is replaced by\nproperty  having a similar  purpose and having a fair  market  value equal to or\ngreater than the fair market value of the property  being leased or  transferred\nand upon which the Arranger has an equivalent Lien.\n\n            5.22. Transactions With Affiliates. Other than the Project Documents\nand the Financing  Documents,  the Company shall not enter into any transactions\nwith Affiliates,  unless the terms of such transactions are no less favorable to\nthe Company than terms which the Company could obtain in comparable transactions\nentered into on an arm's-length basis with a Person which is not an Affiliate of\nthe Company.\n\n            5.23. Power Purchaser's  Assignment.  The Company shall not, without\nthe prior written  consent of the Arranger,  approve any assignment of the Power\nPurchaser's obligations under the Power Purchase Contract.\n\n            5.24. Notice to the Arranger.  The Company shall notify the Arranger\nin  writing  of any  discrepancies  between  the  Services  (as  defined  in the\nConstruction  Contract) and all requirements of the Power Purchaser of which the\nCompany is aware.\n\n\n            6.   Events of Default: Remedies.\n\n            6.1. 'Event of Default'  Defined.  The term 'Event of Default' means\nany of the following  events  (whatever the reason for such event and whether it\nshall be voluntary or involuntary or be effected by operation of law or pursuant\nto or in  compliance  with any  applicable  Government  Rule) and any such event\nshall continue to be an Event of Default if and for so long as it shall not have\nbeen remedied;\n\n                 (a) failure by the Company to pay  principal of or premium,  if\nany, or interest on a Loan for a period of five days after any such amount shall\nhave become due and payable,  whether by scheduled maturity,  required repayment\nor redemption, acceleration or otherwise;\n\n                 (b) failure by the Company to perform in any  material  respect\nany covenant of the Company in this Contract (other than the default referred to\nin Section 6.1(a)) or in any other Financing  Document following notice from the\nArranger, and such failure remains unremedied for 30 days;\n\n                 (c)  any  representation,  warranty  or  certification  made or\ndeemed  made in this  Contract  or any other  Financing  Document by the Company\nshall prove to have been incorrect in any material  respect as of the time made,\nconfirmed or  furnished  and remains  incorrect in any material  respect 30 days\nafter the Company becomes aware that it is incorrect;\n\n                 (d) the Company shall:\n\n                       (i)  apply  for  or  consent  to  the  appointment  of  a\n                  receiver, custodian, trustee, liquidator or equivalent thereof\n                  in  the  applicable   jurisdiction  of  it  or  of  all  or  a\n                  substantial  part of its assets (other than in connection with\n                  a  restructuring  for tax purposes)  which (i) has no Material\n                  Adverse  Effect  and (ii)  does not  effect  the  validity  or\n                  enforceability of this Contract,  any other Financing Document\n                  or any Project Document),\n\n                       (ii) file a voluntary petition in bankruptcy, or admit in\n                  writing its  inability to pay it debts as they come due (other\n                  than in  connection  with a  restructuring  for tax  purposes)\n                  which (i) has no  Material  Adverse  Effect  and (ii) does not\n                  effect the validity or  enforceability  of this Contract,  any\n                  other Financing Document or any Project Document,\n\n                       (iii)  make a  general  assignment  for  the  benefit  of\n                  creditors,\n\n                       (iv) file a petition or an answer seeking  reorganization\n                  or  arrangement  with  creditors  or to take  advantage of any\n                  insolvency law,\n\n                       (v) file an answer admitting the material allegations of,\n                  or  consent  to, or  default in  answering,  a petition  filed\n                  against it in any  bankruptcy,  reorganization  or  insolvency\n                  proceeding, or\n\n                       (vi) be  adjudicated  bankrupt  or  insolvent,  or be the\n                  subject of an order,  judgment or decree  entered by any court\n                  of  competent   jurisdiction   approving  a  petition  seeking\n                  reorganization  of  such  Person  or  appointing  a  receiver,\n                  trustee,  liquidator or equivalent  thereof in the  applicable\n                  jurisdiction of such Person or of all or a substantial part of\n                  its assets, and such order,  judgment or decree shall continue\n                  unstayed and in effect for a period of 60 days;\n\n                 (e) failure by the Company to pay,  discharge,  or provide full\nreserves  against any final and  nonappealable  judgment by a court of competent\njurisdiction  against it for the payment of money in excess of US$1,000,000  (or\nthe equivalent  thereof in any other  currency)  within 60 days from the date of\nentry thereof;\n\n                 (f) the  failure of the  Company to make any  payment  when due\n(subject to any applicable  grace period) in respect of any of its  Indebtedness\nin an aggregate amount exceeding  US$1,000,000 (or the equivalent thereof in any\nother currency),  which has been incurred and which remains  outstanding  (other\nthan any amount due under or pursuant to the Financing Documents);\n\n                 (g) the  Power  Purchase  Contract  or any  Financing  Document\nceases for any reason to be valid and binding and in full force and effect prior\nto its termination in accordance with its terms;\n\n                 (h)  any  Project  Document  (other  than  the  Power  Purchase\nContract)  ceases for any reason to be valid and  binding  and in full force and\neffect prior to its termination in accordance with its terms unless the Arranger\nshall have received a certificate of an Authorized Officer of the Company to the\neffect that such event will not have a Material Adverse Effect;\n\n                 (i) at least 90 days shall  have  elapsed  since any  Clearance\nnecessary to construct or operate the Power  Station  shall have been revoked or\nwithdrawn,  if such  revocation  or  withdrawal  could have a  Material  Adverse\nEffect;\n\n                 (j) any grant of a Lien  contained in the  Financing  Documents\nceases to be effective  to grant a perfected  Lien on any of the  Collateral  or\nceases to be effective to grant a perfected Lien with the priority  purported to\nbe  created  thereby,  to the extent  attainable  under the law  governing  such\ndocuments, in favor of the Arranger in the Collateral;\n\n                 (k) the Company abandons the Project;\n\n                 (l) any party to a Project Document fails to perform any of its\nmaterial  obligations  thereunder  or  makes  any  material   misrepresentations\nthereunder, which failure or misrepresentation (i) is not cured within the later\nof (A) the cure period set forth in the relevant Project Document or (B) 30 days\nafter the  Company's  or the  Arranger's  actual  knowledge  of such  failure or\nmisrepresentation and (ii) could have a Material Adverse Effect on the Company;\n\n                 (m) the Power  Purchaser is liquidated,  except for liquidation\nat the end of the term of the Power Purchase Contract;\n\n                 (n)  Project   Completion  (as  defined  in  the   Construction\nContract) shall not have occurred by January 1, 1998;\n\n                 (o) a Financing  Event of Default  shall have  occurred  and be\ncontinuing;\n\n                 (p) borrowings and repayments under the Other Contracts are not\nmade in accordance with Section 7.1; or\n\n                 (q) a sale of the Collateral or any part thereof occurs without\nthe consent of the Arranger.\n\n            6.2. Exercise of Remedies.\n\n                 (a) If an Event of Default shall occur and be continuing, then,\n(i) the Arranger, by notice to the Borrower and the Other Arrangers, may declare\nits  obligation  to make  Loans  to be  terminated,  whereupon  the  same  shall\nforthwith  terminate,  and (ii) the Arranger,  by notice to the Borrower and the\nOther  Arrangers,  may declare all of the Notes,  all  interest  thereon and all\nother  amounts  payable  under this  Contract to be  forthwith  due and payable,\nwhereupon all of the Notes,  all such interest and all such amounts shall become\nand be  forthwith  due and  payable,  without  presentment,  demand,  protest or\nfurther  notice of any kind,  all of which are  hereby  expressly  waived by the\nCompany; provided, however, that if an Event of Default of the kind described in\nSection 6.1 (d) shall occur,  (i) the  obligation  of the Arranger to make Loans\nshall  automatically  be terminated and (ii) all of the Notes, all such interest\nand all such amounts shall automatically become and be due and payable,  without\npresentment,  demand, protest or any notice of any kind, all of which are hereby\nexpressly waived by the Company.\n\n                 (b) In case one or more of the  Events of  Default  shall  have\noccurred and shall be continuing, then the Arranger may also exercise all rights\nand remedies which it may have under any of the Financing  Documents as provided\ntherein,  in addition to all other rights and remedies available to the Arranger\nat law or in equity. The Arranger shall be also entitled to proceed forthwith to\nprotect and enforce its rights under this  Contract by a suit or suits in equity\nor at law,  either for the  specific  performance  of any  covenant or agreement\ncontained herein, or in aid of the execution of any power herein granted, either\nfor interest or for principal,  or for both, or for the enforcement of any other\nappropriate  legal or  equitable  remedy,  as the  Arranger,  being  advised  by\ncounsel,  shall  deem most  effectual  in support of any of its rights or duties\nhereunder.\n\n            6.3.   Collection  of  Indebtedness  by  the  Arranger;   Deficiency\nJudgment. The Arranger shall be entitled to recover judgment against the Company\nand any other obligor on the Notes and the Loans for the whole amount so due and\nunpaid either before,  after or during the pendency of any  proceedings  for the\nenforcement of any Lien or other provisions of the Financing  Documents,  and in\nthe case of a sale of the Collateral and the application of the proceeds of such\nsale, the Arranger,  in its own name,  shall be entitled to enforce  payment of,\nand to receive,  all amounts then  remaining due and unpaid upon the Notes,  for\nthe benefit of the holders  thereof,  and shall be entitled to recover  judgment\nfor any portion of the same  remaining  unpaid,  with interest as aforesaid.  No\nrecovery of any such  judgment  by the  Arranger,  and no levy of any  execution\nunder any such judgment upon any property of the Company, shall affect or impair\nthe Lien of the Financing  Documents,  or any rights,  powers or remedies of the\nArranger hereunder or under any other Financing Document.\n\n            6.4. Application of Proceeds of Collateral. The proceeds of any sale\nof the Collateral,  or any part thereof,  together with any other sums then held\nby the  Arranger  as part of the  Collateral,  shall be applied as  promptly  as\npossible as follows: (i) first, to the payment of the costs and expenses of such\nsale, including the compensation of the Arranger and its agents and counsel, and\nof all  charges,  expenses,  liabilities  and  advances  incurred or made by the\nArranger without gross negligence or bad faith;  (ii) second,  to the payment of\nAdditional  Company Amounts  hereunder and additional  company amounts under the\nOther Contracts,  if any, and of the interest due and unpaid hereunder and under\nthe Other Contracts,  including default interest; (iii) third, to the payment of\nprincipal,  premium, if any, and all other obligations owing hereunder and under\nthe Financing Documents;  and (iv) fourth, the surplus, if any, shall be paid to\nthe Company, its successors or assigns.\n\n\n            7.   Intercreditor Arrangements.\n\n            7.1.  Borrowings and Repayments.  All borrowings  hereunder shall be\nmade  simultaneously  with borrowings made under the Other  Contracts,  and each\nborrowing  hereunder  shall be in a percentage  of the  Commitment  equal to the\npercentage each simultaneous  borrowing of loans under each Other Contract bears\nto the commitment  under each such Other  Contract;  provided that the foregoing\nshall only apply to borrowings  under the Huaxi  Support  Contract to the extent\nthat the aggregate  principal amount of Loans made under this Contract and loans\nmade under the CNAC Support Contract exceeds U.S.$17,880,000.  All repayments or\nprepayments of Loans (including principal, interest and other amounts) hereunder\nshall be made  simultaneously  with  prepayments  or repayments  under the Other\nContracts,  and any such repayment or prepayment under this Contract shall be in\na percentage of Loans  outstanding  equal to the  percentage  each  simultaneous\nrepayment or  prepayment of loans under each Other  Contract  bears to the loans\noutstanding  under each such Other  Contract,  in each case using the Dollar\/RMB\nexchange rate, if applicable, provided herein and in the Other Contracts.\n\n            7.2. Pari Passu.  All rights of the Arranger  hereunder with respect\nto the Loans and the  Collateral  shall be on a pari passu basis with the rights\nof the Other  Arrangers  under the Other  Contracts  with  respect  to the Other\nArrangers' loans and the Collateral.\n\n            7.3.  Amendment  or  Assignment.  This  Contract may not be amended,\nchanged, terminated or discharged without the prior written consent of the Other\nArrangers.  Neither this Contract nor the rights or obligations hereunder may be\nassigned or transferred by either Party without the prior written consent of the\nOther Arrangers.\n\n\n            8.   Miscellaneous.\n\n            8.1. Benefit of Agreement;  Partial Invalidity.  This Contract shall\nbe binding upon and inure to the benefit of and be enforceable by the respective\nsuccessors  and  assigns of the  Parties  hereto.  The Company may not assign or\ntransfer any of its rights or  obligations  hereunder  without the prior written\nconsent of the Arranger.  If any provision of this Contract,  or the application\nof any  provision  to any  Person  or  circumstance,  shall be held  invalid  or\nunenforceable,  the  remainder  of this  Contract,  or the  application  of such\nprovision  to  Persons  or  circumstances  other  than those to which it is held\ninvalid or unenforceable, shall not be affected thereby.\n\n            8.2.  Governing  Law.  The  rights  of the  Parties  hereto  and the\nvalidity, interpretation and implementation of this Contract and the Notes shall\nbe governed by and construed and  interpreted in accordance with the laws of the\nPeople's Republic of China.\n\n            8.3.   Friendly   Consultations.   In  the  event  of  any  dispute,\ncontroversy,  or claim  arising  out of or  relating  to this  Contract or other\nFinancing Documents, or the breach, termination or invalidity hereof or thereof,\nthe disputing Party shall provide written notice thereof to the other Party. The\nParties  shall  attempt in the first  instance to resolve such  dispute  through\nfriendly consultations.\n\n            8.4.  Arbitration.  (a) If the  dispute is not  resolved by friendly\nconsultation  within 60 days after notice of a dispute is given by a Party, then\nany Party may submit the  dispute  for final  binding  arbitration  by the China\nInternational  Economic and Trade Arbitration  Commission in accordance with its\nrules  then in force.  The  arbitration  proceedings  shall be held in  Mandarin\nChinese and English. The site of the arbitration shall be Beijing.  Should there\nexist a conflict between the rules of the China International Economic and Trade\nArbitration  Commission and the  provisions of this Contract,  the provisions of\nthis Contract will prevail.\n\n                 (b) There shall be three (3) arbitrators. All three arbitrators\nshall speak both  Mandarin  Chinese and  English.  The Company and the  Arranger\nshall each  appoint (1)  arbitrator  within  thirty (30) days of the date of the\nrequest to initiate arbitration. Within thirty (30) days from the appointment of\nthe second of the Parties' arbitrators, the Parties' arbitrators shall appoint a\nthird  arbitrator  who shall,  in addition to his duties as  arbitrator,  act as\nchairman of the arbitration tribunal.  Arbitrators not appointed within the time\nlimits  set forth in this  paragraph  (b) shall be  appointed  by the  Secretary\nGeneral of the International Center for Settlement of Investment  Disputes.  The\nParties  hereby  waive  and  renounce  any  right  to  appeal  the  award of the\narbitration  panel or to have any question of law or fact referred to a court or\nother forum in the People's Republic of China except in furtherance of enforcing\nthe award of the arbitration panel.\n\n                 (c) The award of the  arbitration  panel  shall be  issued  not\nlater  than  sixty  days  following  the close of  hearings  by the  panel.  The\narbitration  award  shall be final and  binding on the  Parties and shall not be\nsubject to appeal to any court. The Parties agree to be bound thereby and to act\naccordingly.\n\n                 (d) The costs of  arbitration  shall be borne by each  Party as\ndesignated in the arbitration award.\n\n            8.5. Continuing Rights and Obligations.  When any dispute occurs and\nis the subject of  friendly  consultations  or  arbitration,  the Parties  shall\ncontinue  to exercise  their  remaining  respective  rights,  and fulfill  their\nremaining  respective  obligations,  under this Contract and the other Financing\nDocuments.\n\n            8.6.  Enforcement of Award.  The Parties  acknowledge that any award\nrendered pursuant to Section 8.4 hereof shall be governed by the 1958 Convention\non the Recognition and Enforcement of Foreign  Arbitration  Awards of the United\nNations.  The award shall be enforceable in any court that has jurisdiction over\nthe losing Party or over the property of the losing Party.\n\n            8.7.  Waiver  of  Sovereign  Immunity  Defense.  In any  arbitration\nproceeding,  any legal  proceeding to enforce any  arbitration  award and in any\nlegal action between the Parties pursuant to or relating to this Contract or the\nother Financing Documents,  each Party expressly waives the defense of sovereign\nimmunity and any other  defense  based on the fact or  allegation  that it is an\nagency or instrumentality of a sovereign state.\n\n            8.8. Remedies Cumulative;  Delay or Omission Not to Impair Remedies.\nNo delay or omission of the Arranger in exercising  any right or remedy  arising\nupon the happening of any Event of Default, and no course of dealing between the\nCompany,  on the one hand, and the Arranger on the other hand,  shall impair any\nright or remedy for, or shall be  construed to be a waiver of, any such Event of\nDefault or an acquiescence  therein; nor shall any single or partial exercise of\nany right or remedy,  under this Contract or under any other Financing Document,\npreclude any other exercise thereof or the exercise of any other right or remedy\nhereunder or thereunder. To the fullest extent permitted by Government Rule, the\nrights and remedies herein and in the Financing Documents are cumulative and not\nexclusive of any rights or remedies  which the Arranger  would  otherwise  have.\nRemedies  may be  exercised  in whatever  order the Arranger or its designee may\nelect. Any rights and remedies granted to or otherwise available to the Arranger\nmay be exercised by the Arranger or any Person or Persons  designated in writing\nby the Arranger. No notice to or demand on the Company shall entitle such Person\nto any further notice or demand in similar  circumstances or constitute a waiver\nof the rights of the Arranger to any other action in any  circumstances  without\nnotice or demand.\n\n            8.9. Amendment or Waiver. This Contract and the terms hereof may not\nbe amended,  changed,  waived,  discharged or terminated  unless such amendment,\nchange,  waiver,  discharge or  termination  is in writing signed by each of the\nParties hereto.\n\n            8.10. Notices.  Any notices to the Arranger by the Company under any\nprovision of this Contract shall be sufficiently  given if in writing and served\npersonally upon an Authorized Officer of the Arranger or delivered via facsimile\ntransmission  to  facsimile  number:  (86) (10)  508-9628  with  electronic  and\ntelephonic  confirmation  to the Arranger,  Attention:  Jeff Safford,  facsimile\nnumber: (85) (2) 530-1673 or at such other address as may be designated for that\npurpose in a notice delivered to the Company by the Arranger.  Any notice to the\nCompany  by  the  Arranger  under  any  provision  of  this  Contract  shall  be\nsufficiently  given if  served  personally  upon an  Authorized  Officer  of the\nCompany or delivered via facsimile  transmission to facsimile number:  (86) (10)\n6508-9628  with  electronic or  telephonic  confirmation  to Attention:  Paul T.\nHanrahan,  or at such other address as may be  designated  for that purpose in a\nnotice delivered to the Arranger by the Company.\n\n            8.11.  No  Oral  Agreement.  This  Contract  represents  the  entire\nunderstanding  of  the  parties  and  supersedes  all  prior   undertakings  and\nagreements with respect thereto, whether written or oral.\n\n            8.12.  Counterparts.  This  Contract  may be executed in one or more\ncounterparts each of which shall be deemed an original and all of which shall be\ndeemed one and the same Contract.\n\n            8.13.  Verification  and Approval by the Chengdu SAEC. The repayment\nof the  principal  and payment of interest  pursuant to this  Contract  shall be\nverified and approved by the Chengdu SAEC.\n\n\n\n\n\n\n            IN WITNESS  WHEREOF,  and intending to be legally bound, the parties\nhereto have caused  their duly  authorized  officers to execute and deliver this\nContract as of the date first above written.\n\n\n                                   CHENGDU AES KAIHUA GAS\n                                   TURBINE POWER CO., LTD.\n\n\n                                   By:[Signature Illegible]\n                                      ---------------------\n                                      Name:\n                                      Title:\n\n\n                                   AES TIAN FU POWER\n                                   COMPANY (L) LTD.\n\n\n                                   By:[Signature Illegible]\n                                      ---------------------\n                                      Name:\n                                      Title:\n\n\nAgreed as to Section 6.4 and Section 7:\n\nCHINA NATIONAL AERO-ENGINE\nCORPORATION\n\n\nBy:[Signature Illegible]\n   --------------------------------\n   Name:\n   Title:\n\nCHENGDU HUAXI ELECTRIC POWER\nSHAREHOLDING (GROUP) COMPANY LTD.\n\n\n\nBy:[Signature Illegible]\n   --------------------------------\n   Name:\n   Title:\n\n\n\n\n\n                                                                         Annex A\n                                                                 to the Contract\n\n\n                                   DEFINITIONS\n\n            'ADDITIONAL  COMPANY  AMOUNTS'  has the meaning set forth in Section\n2.6 of the Contract.\n\n            'AFFILIATE' of any  designated  Person means any other Person which,\ndirectly or indirectly,  controls or is controlled by or is under common control\nwith such designated Person.\n\n            'ARRANGER'  has  the  meaning  provided  in  the  preamble  to  this\nContract.\n\n            'AUTHORIZED   OFFICER'  means,  with  respect  to  any  Person,  the\npresident, any vice president, the treasurer, or any assistant treasurer of such\nPerson,  or any other Person  granted the  relevant  authority in writing by the\nboard of directors or management committee, as applicable, of such Person.\n\n            'BUSINESS  DAY'  means  any day on which  commercial  banks  are not\nauthorized  or required to close in the City of New York,  New York and Beijing,\nPRC.\n\n            'CERTIFICATE  OF PERFORMANCE  ACCEPTANCE' has the meaning given such\nterm in the Construction Contract.\n\n            'CLEARANCE' means any authorization,  consent, clearance,  approval,\nlicense,  ruling, permit,  exemption,  filing or registration by or with (except\nany filing relating to the perfection of security interests),  or variance of or\nfrom any Governmental Authority.\n\n            'CNAC SUPPORT CONTRACT' means the Support  Contract,  dated the date\nhereof,  between the Company China National Aero-Engine  Corporation as arranger\nthereunder.\n\n            'COLLATERAL'  means,  collectively,  all  property  and assets  with\nrespect to which a Lien is granted under the Security Documents.\n\n            'COMMENCEMENT   DATE'  has  the  meaning  given  such  term  in  the\nConstruction Contract.\n\n            'COMMITMENT'  of the  Arranger  means,  for each  type of Loan,  the\namount set forth opposite the Arranger's name on Annex B.\n\n            'COMPANY' has the meaning provided in the preamble to this Contract.\n\n            'CONSTRUCTION CONTRACT' means the Contract for Construction Services\nbetween the  Company  and China  National  Aero-Engine  Corporation  dated as of\n---------, 1996.\n\n            'CONSTRUCTION LOAN' has the meaning provided in Section 2.1(a).\n\n            'CONSTRUCTION LOAN NOTE' has the meaning provided in Section 2.2(a).\n\n            'CONSTRUCTION  PERIOD'  means the period of time  commencing  on the\nCommencement Date and ending on the Mandatory Repayment Date.\n\n            'DEFAULT' means, with respect to any document, any event which, with\nthe giving of notice or the passing of time, or both, or the  fulfillment of any\nother  applicable  condition,  would  become  an event  of  default  under  such\ndocument.\n\n            'DOLLARS',  '$' or US$'  means any coin or  currency  of the  United\nStates of America  which is legal  tender for the  payment of public and private\ndebts.\n\n            'ENVIRONMENTAL LAWS' means any laws, rules,  regulations,  and other\nlegal  requirements  of  any  Governmental   Authority,   foreign  or  domestic,\npertaining to the release of materials  into or  protection of the  environment,\nincluding all such legal requirements pertaining to human health and safety.\n\n         'EVENT OF DEFAULT' has the meaning provided in Section 6.1.\n\n            'EVENT OF EMINENT  DOMAIN' means any  compulsory  transfer or taking\n(including by condemnation, confiscation, seizure or requisition of title or use\nor  transfer  under  threat of  compulsory  transfer  or  taking)  of all or any\nmaterial  part  of the  Power  Station  or the  Collateral  by any  Governmental\nAuthority.\n\n            'EVENT OF LOSS'  means (i) an event that  causes all or a portion of\nthe Power Station or the  Collateral to be damaged,  destroyed or rendered unfit\nfor  normal  use for any  reason or (ii) the  occurrence  of an Event of Eminent\nDomain.\n\n            'FINANCING  DOCUMENTS'  means the Contract,  the Notes, the Security\nDocuments and the Other Contracts.\n\n            'FINANCING  EVENT OF DEFAULT'  means an 'Event of Default' under any\nFinancing Document.\n\n            'FUEL SUPPLY  CONTRACT' means the Gas Purchase and Supply  Contract,\ndated  -----------,  1996 between the Company and Chengdu  Huachuan  Petroleum &amp; Natural  Gas  Exploration  and  Development  Company for the long term supply of\nnatural gas to the Power Station.\n\n            'GOOD FAITH  CONTEST'  means the contest of an item if: (i) the item\nis  diligently  contested  in  good  faith  by  appropriate  proceedings  timely\ninstituted  and (ii) the failure to pay or comply with the contested item during\nthe period of such contest  could not  reasonably be expected to have a Material\nAdverse Effect.\n\n            'GOVERNMENT   RULE'  means  any   constitution,   law,   regulation,\nordinance,  rule, directive,  judgment,  administrative  practice,  order, writ,\ninjunction or decree of or by any Governmental Authority.\n\n            'GOVERNMENTAL   AUTHORITY'  means  any  governmental   authority  or\njudicial,  regulatory or administrative  body, agency or  instrumentality of any\ncountry or political subdivision thereof exercising  jurisdiction over the Power\nStation,  the  Company,  the  Arranger  or any  party to a Project  Document  or\nFinancing Document.\n\n            'GUARANTEE'  by any  Person  means  any  obligation,  contingent  or\notherwise,  of such Person directly or indirectly guaranteeing in any manner the\npayment or  performance  of any  Indebtedness  or other  obligation of any other\nPerson.\n\n            'GUARANTEED  COMPLETION DATE' has the meaning given such term in the\nConstruction Contract.\n\n            'HUAXI SUPPORT CONTRACT' means the Support Contract,  dated the date\nhereof, between the Company and Chengdu Huaxi Electric Power Shareholder (Group)\nCompany Ltd. as arranger thereunder.\n\n            'INDEBTEDNESS'   means,  for  any  Person,  at  any  date,   without\nduplication  (i)  obligations  created,  issued or  incurred  by such Person for\nborrowed money;  (ii) obligations of such Person to pay the deferred purchase or\nacquisition  price of property or services,  other than trade  accounts  payable\n(other than for borrowed money) arising,  and accrued expenses incurred,  in the\nordinary  course of business;  (iii)  Indebtedness  of others  secured by a Lien\n(other than a  Permitted  Encumbrance)  on the  property  of such  Person;  (iv)\nobligations  of  such  Person  in  respect  of  letters  of  credit  or  similar\ninstruments issued or accepted by banks and other financial institutions for the\naccount of such Person  (except to the extent such  letters of credit or similar\ninstruments  are  described  in any of the  Financing  Documents  or the Project\nDocuments (including  performance bonds)); (v) capital lease obligations of such\nPerson; and (vi) Indebtedness of others Guaranteed by such Person.\n\n            'INDEMNIFICATION  CONTRACT' means the Indemnification Contract dated\n---------,   1996  between  the  Company  and  Chengdu  Huaxi   Electric   Power\nShareholdering (Group) Company Ltd.\n\n            'INTERCONNECTION  CONTRACT' means the  Interconnection  and Dispatch\nContract,  dated as of --------, 1996, between Sichuan Power Dispatch Bureau and\nthe Company.\n\n            'JOINT  VENTURE   CONTRACT'  means  the  Cooperative  Joint  Venture\nContract,   dated  November  28,  1995,   among  Chengdu  Huaxi  Electric  Power\nShareholding (Group) Company Ltd., China National Aero-Engine  Corporation,  and\nAES China Generating Company Limited.\n\n            'LAND CONTRACT' means the State-Owned Land Use Rights Contract to be\nentered  into between the Company and  -----------------  State Land Bureau with\nrespect to the use of land located at the Site.\n\n            'LETTER(S) OF UNDERTAKING'  means the letter(s) of undertaking  from\ngovernment  entities stating that they will render all necessary  support to the\nPower Purchaser so that the Power  Purchaser can perform its  obligations  under\nthe Power Purchase  Contract,  including without  limitation (i) the Undertaking\nLetter of the Chengdu City Economic Commission dated ----------,  1996; (ii) the\nUndertaking  Letter of the Chengdu City  Commodity  Price  Control  Bureau dated\n----------,  1996 and  (iii)  the  Undertaking  Letter  of the  Chengdu  Foreign\nEconomic and Trade Commission dated ----------, 1996.\n\n            'LIEN'  means,  with respect to any property,  any  mortgage,  lien,\npledge, charge, lease,  easement,  servitude,  security interest,  assignment or\nencumbrance of any kind on or with respect to such property.\n\n            'LOAN' means either a Construction Loan or the Term Loan and 'Loans'\nmeans collectively the Construction Loans and the Term Loan.\n\n            'LOSS PROCEEDS'  means all net proceeds or compensation  received in\nrespect of any Event of Loss.\n\n            'MANDATORY REPAYMENT DATE' means the earlier of (i) date the Company\ndelivers the Certificate of Performance  Acceptance to the contractor  under the\nConstruction  Contract  and  (ii)  the  Guaranteed  Completion  Date;  provided,\nhowever,  that if such date is not a Business Day, the Mandatory  Repayment Date\nshall occur on the next following Business Day.\n\n            'MATERIAL  ADVERSE  EFFECT' means a material  adverse  effect on the\nfinancial  position,  results of  operations or business  prospects,  taken as a\nwhole, of the Company, including,  without limitation, a material adverse effect\non (i) the commercial  operation of the Power  Station,  (ii) the ability of the\nCompany to perform  any of its  material  obligations  under the  Contract,  the\nProject Documents or the Financing Documents,  (iii) the validity or priority of\nthe  Liens  on  any  of  the  Collateral,  (iv)  the  repayment  of  either  the\nConstruction Loans or the Term Loan, as the case may be, or (v) the validity and\nenforceability of any of the Financing Documents or the Project Documents.\n\n            'NOTE'  means  either  the  Construction  Loan Note or the Term Loan\nNote, and 'Notes' means  collectively  the  Construction  Loan Note and the Term\nLoan Note.\n\n            'OTHER  CONTRACTS'  means the CNAC  Support  Contract  and the Huaxi\nSupport Contract.\n\n            'OTHER ARRANGERS' means China National  Aero-Engine  Corporation and\nChengdu Huaxi  Electric  Power  Shareholding  (Group)  Company  Ltd.,  acting as\narrangers under the Other Contracts.\n\n            'PARTY' means each of the Arranger and the Company.\n\n            PEOPLE'S  REPUBLIC OF CHINA ACCOUNTING RULES' means the Rules of the\nPeople's  Republic of China on  accounting  for Chinese  Foreign  Joint  Venture\nEnterprises and other relevant rules and regulations of the People's Republic of\nChina.\n\n            'PERMITTED  INDEBTEDNESS'  means,  for any Person:  (i) Indebtedness\nincurred  under the Financing  Documents;  (ii)  Indebtedness  arising under the\nProject  Documents;  (iii) trade  accounts  payable (other than for (a) borrowed\nmoney and operating  lease  obligations  or (b) the purchase of equipment with a\nvalue, individually or in the aggregate, in excess of US$1,000,000) arising, and\naccrued expenses  incurred,  in the ordinary course of business,  and (iv) other\nIndebtedness  of such Person not to exceed in the  aggregate  US$500,000  or the\nequivalent thereof.\n\n            'PERMITTED LIENS' means (i) Liens specifically permitted or required\nby or created by any of the Financing  Documents or the Project Documents;  (ii)\nLiens expressly subordinated to the Liens created by the Financing Documents and\nsubordinated  in  right  of  payment  to  the  Loans;  (iii)  Liens  for  taxes,\nassessments or  governmental  charges not due and delinquent or due, but subject\nto  a  Good  Faith  Contest;   (iv)   carriers',   warehousemen's,   mechanics',\nmaterialmen's, repairmen's or other similar Liens arising in the ordinary course\nof  business  or that are the subject of a Good Faith  Contest;  (v)  easements,\nrights-of-way,   reservations,   restrictions,   covenants,  and  other  similar\nencumbrances  affecting any property subject to the Liens of any of the Security\nDocuments, granted in the ordinary course of business, which do not individually\nor in the  aggregate  have a  Material  Adverse  Effect;  and  (vi)  attachment,\njudgment and other similar Liens  arising in connection  with court  proceedings\nthat are the subject of a Good Faith Contest.\n\n            'PERSON'  or 'PERSON'  means any  individual,  sole  proprietorship,\ncorporation,  partnership,  joint venture,  limited  liability  company,  trust,\nunincorporated  association,  institution,  government  authority  or any  other\nentity.\n\n            'POWER  PURCHASER'  means the Chengdu  Huaxi Power  Company  (Group)\nLimited, a company organized under the laws of the PRC.\n\n            'POWER PURCHASE CONTRACT' means the Power Purchase  Contract,  dated\n--------, 1996, between the Company and Power Purchaser.\n\n            'POWER  STATION' means the 1x50 MW natural gas fired power plant, to\nbe  constructed  in Jintang  County,  Sichuan  Province,  the PRC, as more fully\ndescribed in Appendix A to the Construction Contract.\n\n            'PRC' or 'CHINA' means the People's Republic of China.\n\n            'PRICE  ADJUSTMENT  CONTRACT' means the Electric  Tariff  Adjustment\nMethod for Chengdu  AES Kaihua Gas Turbine  Power  Company  Limited  dated as of\n---------, 1996 between the Power Purchaser and the Company.\n\n            'PROJECT  DOCUMENTS'  means the Joint  Venture  Contract,  the Power\nPurchase  Contract,  the  Construction  Contract,   Fuel  Supply  Contract,  the\nIndemnification  Contract, the Land Contract, the Letter(s) of Undertaking,  the\nInterconnection  Contract, the Supplemental  Interconnection Contract, the Price\nAdjustment Contract,  any contract or agreement entered into in substitution for\nthe foregoing and any other contract or letter or instrument entered into by the\nCompany with respect to the Power Station.\n\n            'PROJECT COSTS' means all costs and expenses paid, incurred or to be\nincurred  by  the  Company  in   connection   with  the   development,   design,\nconstruction, financing, start-up, ownership and operation of the Power Station,\nincluding,  without limitation, (i) all construction costs of the Power Station,\nincluding all amounts  payable  under the  Construction  Contract,  (ii) initial\nspare parts,  start-up,  and operator  mobilization  costs,  and working capital\nrequirements,  (iii)  development fees and development  costs  recoveries,  (iv)\ncosts  related to any of the Loans or the loans under the Other  Contracts,  (v)\nrelated  legal  and  other  transaction  and  financing  costs,  (vi)  insurance\npremiums,  (vii) costs of Site, (viii) operating and maintenance expenses,  (ix)\nfees and expenses payable to the Arranger and the Other  Arrangers,  (x) initial\nworking  capital and (xi) all other Power Station related costs and expenses for\nthe construction and financing of the Power Station.\n\n            'RMB' or 'RENMINBI'  means Renminbi yuan, the lawful currency of the\nPRC.\n\n            'SECURITY  DOCUMENTS'  means the  Assignment  Contract to be entered\ninto among the Arranger, the Other Arrangers and the Company.\n\n            'SITE'  means,  in the  aggregate,  the  land  subject  to the  Land\nContract.\n\n            'SUPPLEMENTAL   INTERCONNECTION  CONTRACT'  means  the  Supplemental\nInterconnection and Dispatch Contract dated ---------,  1996 between the Company\nand the Sichwan Power Dispatch Bureau.\n\n            'TERM LOAN' has the meaning provided in Section 2.1(b).\n\n            'TERM LOAN NOTE' has the meaning provided in Section 2.2(b).\n\n            'TERM LOAN  REPAYMENT  DATES' has the  meaning  provided  in Section\n2.4(b).\n\n            'UNITED   STATES'  or  'U.S.'   means  all  states,   commonwealths,\nterritories and possessions of the United States of America.\n\n            'WITHHOLDING  TAXES'  means any  present  or future  withholding  or\ndeduction  for, any present or future  withholding  taxes  imposed by the PRC or\nLabuan or any Governmental Authority within the PRC or Labuan.\n\n         (a) Principles of Construction. Unless the context otherwise requires:\n\n               (i) reference to any statute or statutory provision shall include\n         any  amendment,   modification   or  reenactment  of,  any  legislative\n         provisions   substituted   for  and  all   legislation   and  statutory\n         instruments issued under, such statute or statutory provisions;\n\n               (ii) words  defined as denoting  the singular  shall  include the\n          plural and vice versa;\n\n               (iii) references denoting individuals shall include corporations,\n          associations,  trustees,  instrumentalities and partnerships, and vice\n          versa;\n\n               (iv) words denoting any gender shall include all genders;\n\n               (v) references to a Section,  Schedule, Exhibit or party shall be\n          construed as  references to a Section,  Schedule,  Exhibit or party to\n          the document in which such reference is made;\n\n               (vi)  references  to  any  document,  lease,  contract  or  other\n          agreement of any nature shall, as appropriate, include or be construed\n          as references to such document,  lease, contract or other agreement as\n          amended,  modified,  extended,  renewed,  restated,   supplemented  or\n          replaced from time to time;\n\n               (vii) references to any party in any document,  deed or agreement\n          shall include its successors and permitted assignees;\n\n               (viii) headings used in any document are for convenience only and\n          shall be disregarded in construing such document; and\n\n               (ix) the  words  'include',  'includes'  or  'including'  are not\n          limiting.\n\n\n\n\n\n                                                                         Annex B\n                                                                 to the Contract\n\n\n\n\n                                   COMMITMENTS\n\n\n\n                                                                      COMMITMENT\n                                                                      ----------\n\n         Construction Loans                                            US$------\n\n\n\n\n\n\n         Term Loan                                                     US$------\n\n\n\n\n\n\n                                                                       Exhibit 1\n                                                                 to the Contract\n\n\n                            Form of Construction Note\n\n                                                                          [Date]\n                                                                      [Location]\n\nUS$-------------\n\n                  FOR VALUE RECEIVED,  Chengdu AES KAIHUA Gas Turbine Power Co.,\nLtd. (the  'Company')  hereby  promises to pay to the order of AES Tian Fu Power\nCompany (L) Ltd., a company organized under the laws of Labuan (the 'Arranger'),\nthe aggregate unpaid  principal amount of all Construction  Loans (as defined in\nthe Contract referred to below) not exceeding in the aggregate the principal sum\nof -------------------- (U.S.$------).\n\n                  All Construction Loans made by the Arranger to the Company and\nall repayments of the principal thereof shall be recorded by the Arranger on the\nSchedule attached hereto.\n\n                  This Note shall be repaid in full on the  Mandatory  Repayment\nDate (as such term is defined in the Contract).\n\n                  This Note evidences the obligations of the Company under,  and\nis referred to in, the Support Contract, dated as of -------------,  between the\nCompany and the Arranger (as from time to time in effect,  the 'Contract'),  and\nis entitled to the benefits thereof.\n\n                  The  Company  also  promises  to pay  interest  on the  unpaid\nprincipal  amount hereof from the date hereof until paid at the rates and at the\ntimes provided in the Contract.\n\n                  Principal of, and premium,  if any, and interest on, this Note\nshall be payable in immediately  available funds in such coin or currency of the\nUnited States of America as at the time of payment shall be legal tender for the\npayment of public and private debts, in the manner provided in the Contract.\n\n                  This Note is secured by the Security  Documents referred to in\nthe Contract and is entitled to the benefits thereof.\n\n                  In case an Event of Default (as defined in the Contract) shall\noccur and be continuing,  the principal of and accrued interest on this Note may\nbe declared to be due and payable in the manner and with the effect  provided in\nthe Contract.\n\n                  The Company  hereby  waives  presentment,  demand,  protest or\nnotice of any kind in connection with this Note.\n\n                  THIS  NOTE  SHALL  BE  CONSTRUED  IN  ACCORDANCE  WITH  AND BE\nGOVERNED BY THE LAWS OF THE PEOPLE'S REPUBLIC OF CHINA.\n\n\n\n\n\nCHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.\n\n\n\nBy:-------------------------------\n   Name:\n   Title:\n\n\n\n\n\n\n\n\n                                                                      Schedule A\n                                                                 to Construction\n                                                                       Loan Note\n\n\n                                    AMOUNT           PRINCIPAL          UNPAID\n         DATE                       BORROWED         REPAID             BALANCE\n         ----                       --------         ------             -------\n\n\n\n\n\n                                                                       Exhibit 2\n                                                                 to the Contract\n\n\n\n                             Form of Term Loan Note\n\n\n                                                                          [Date]\n                                                                      [Location]\n\nUS$----------------\n\n         FOR VALUE RECEIVED, Chengdu AES KAIHUA Gas Turbine Power Co., Ltd. (the\n'Company')  hereby promises to pay to the order of AES Tian Fu Power Company (L)\nLtd.,  a  company  organized  under  the laws of Labuan  (the  'Arranger'),  the\naggregate the principal sum of ------------------- (U.S.$------).\n\n         The amounts and dates of the repayment of this Note are as indicated on\nthe attached Schedule A.\n\n         This Note  evidences  the  obligations  of the  Company  under,  and is\nreferred to in, the Support Contract,  dated as of --, 1996, between the Company\nand the  Arranger  (as from  time to time in  effect,  the  'Contract'),  and is\nentitled to the benefits thereof.\n\n         The  Company  also  promises to pay  interest  on the unpaid  principal\namount  hereof  from the date  hereof  until  paid at the rates and at the times\nprovided in the Contract.\n\n         Principal of, and premium,  if any, and interest on, this Note shall be\npayable in  immediately  available  funds in such coin or currency of the United\nStates  of  America  as at the time of  payment  shall be legal  tender  for the\npayment of public and private debts, in the manner provided in the Contract.\n\n         This Note is  secured  by the  Security  Documents  referred  to in the\nContract and is entitled to the benefits thereof.\n\n         In case an Event of Default  (as defined in the  Contract)  shall occur\nand be  continuing,  the  principal of and accrued  interest on this Note may be\ndeclared to be due and payable in the manner and with the effect provided in the\nContract.\n\n         The Company hereby waives presentment, demand, protest or notice of any\nkind in connection with this Note.\n\n         THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE  WITH AND BE GOVERNED BY THE\nLAWS OF THE PEOPLE'S REPUBLIC OF CHINA.\n\n\nCHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.\n\n\nBy:-----------------------------\n   Name:\n   Title:\n\n\n\n\n\n\n                                   Schedule A\n                                to Term Loan Note\n\n\nAmortization Schedule for Term Loan Note\n\n YEAR              MONTH                PRINCIPAL REPAYMENT SCHEDULE\n                                                    U.S.$\n\n\n\n\n\n\n\n\n\n\n                  [ to be completed upon issuance of the Note ]\n\n\n\n\n\n                                                                       Exhibit 3\n                                                                 to the Contract\n\n\n\n                              Request for Borrowing\n\n\n                                                                          [Date]\n\n\nAES Tian Fu Power Company (L) Ltd.\n\n\n\nGentlemen:\n\n                  The  undersigned,  Chengdu AES KAIHUA Gas  Turbine  Power Co.,\nLtd., refers to the Support Contract, dated as of ------------, 1996 (as amended\nfrom time to time, the 'Contract' the terms defined therein being used herein as\ntherein defined),  among the undersigned and you, and hereby requests,  pursuant\nto Section 3.1 of the Contract, that a borrowing be made under the Contract, and\nin that connection  sets forth below the information  relating to such borrowing\n(the 'Proposed Borrowing') as required by Section 3.1 of the Contract:\n\n                  (i) The Business Day of the Proposed Borrowing is --, 19--.\n\n                  (ii) The Proposed  Borrowing is to consist of [a  Construction\nLoan in an  aggregate  principal  amount  equal  to  $---]  [a  Term  Loan in an\naggregate principal amount equal to $---].\n\n                  (iii) The name and  account  number of the bank to which funds\nare to be transferred is ----.\n\n\n                                     Very truly yours,\n\n                                     CHENGDU AES KAIHUA GAS TURBINE \n                                     POWER CO., LTD.\n\n                                      By:--------------------------\n                                         Name:\n                                         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