Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
Exhibit 10.51
ON-LENDING AGREEMENT
by and between
Shanxi Branch of the China Construction Bank
(the Lender)
and
Yangcheng International Power Company Ltd.
(the Borrower)
, 1997
Table of Contents
Article 1 Definition
Article 2 Amount and Purpose of the Loan
Article 3 Preconditions for Using the Loan
Article 4 Use of the Loan
Article 5 Interest and Fees of the Loan
Article 6 Repayment
Article 7 Overdue Interest
Article 8 Change in Situation
Article 9 Insurance
Article 10 Tax
Article 11 Guarantee
Article 12 Promises
Article 13 Events of Default
Article 14 The Lender's Exercise of Rights
Article 15 Assignment of the Rights and Obligations of the
Lender and the Borrower
Article 16 Amendment and Supplement
Article 17 Dispute Resolution
Article 18 Effectiveness of the Annexes
Article 19 Miscellaneous
Article 20 Effectiveness
Article 21 Modes of Notification
2
Annexes:
1. "Regarding the Accord on the Repayment of Special-purpose Funds of the
On-lending Loan for Issuance of Bonds Overseas" by the Yangcheng
International Power Company Ltd. (hereinafter referred to as "the Accord
on Special-purpose Funds")
2. Letter of Guaranty for Repayment
3. "Schedule on the Repayment of Special-purpose Funds of the On-lending
Loan for Issuance of Bonds Overseas" by the Yangcheng International
Power Company Ltd. (hereinafter referred to as "the Schedule for
Repayment of Principal with Interest")
3
ON-LENDING AGREEMENT
Borrower: Yangcheng International Power Company Ltd.
Address: Xx. 00, Xxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxx Xxxxxxxx
Lender: Shanxi Branch of China Construction Bank
Address: Xx. 0, Xxxxxx Xxxxxx (xxxx), Xxxxxxx Xxxx, Xxxxxx Xxxxxxxx
In order to construct the Shanxi Yangcheng Power Plant project, the
Borrower entrusts the China Construction Bank to raise funds overseas. In
accordance with the entrustment of the Borrower and with the approval of the
State Planning Commission, the State Administration of Exchange Control and the
State Administration of Taxation, the China Construction Bank signed in Hong
Kong on April 4, 1997 a relevant agreement with overseas financial institutions
on the issuance of [***] bonds.
With the authorization of the Head Office of the China Construction
Bank, the Lender and the Borrower have, through friendly consultations, reached
the following agreement in connection with the [***] of the funds raised through
the issuance of the above-mentioned bonds:
Article 1 Definition
Unless otherwise specifically stipulated, in this On-lending Agreement:
"Offering Circular" shall mean the circular issued on April 4, 1997.
"Terms of Bonds" shall mean the terms as recorded in the bonds.
"Lender" shall mean the Shanxi Branch of the China Construction Bank.
"Borrower" shall mean the Yangcheng International Power Company Ltd.
"Guarantor" shall mean the legal entity which issues guaranty for the
repayment of principal, interest and relevant fees under this On-lending
Agreement, namely the North China Electric Power Group Corporation, Jiangsu
Provincial International Trust and Investment Company, Shanxi Energy Enterprise
(Group) Company, Shanxi Provincial Power Company and Jiangsu Provincial Power
Company.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
4
"Issuer" shall mean the China Construction Bank.
"Fiscal Agent" shall mean the Chase Manhattan Bank, London Branch or
its successor the Chase Manhattan Bank, Hong Kong Branch.
"Managing Agents" shall mean
1) Bayerische Landesbank Girozentral, Hong Kong Branch;
2) Daiwa Securities (H.K.) Ltd.
3) The Development Bank of Singapore Ltd.
4) Xxxxxxx Xxxxx Far East Limited
5) Sakura Finance Asia Limited
"Fiscal Agency Agreement" shall mean the Fiscal Agency Agreement
executed on April 4, 1997 by and between the Issuer and the Fiscal Agents.
"Subscription Agreement" shall mean the Bonds Subscription Agreement
executed on April 4, 1997 by and between the Issuer and the Managing Agents.
"Bonds" shall mean, pursuant to the Fiscal Agency Agreement, the
issuance of a total amount of [***] bonds at US$ floating interest rate with a
term of five years.
"Net Proceeds from Bonds" shall mean an amount of [***] million
which is the balance from the total proceeds from the issuance of bonds minus
the total commission for the issuance of bonds and other expenses.
"External Agreements" shall mean in general the Fiscal Agency
Agreement, the Subscription Agreement, the Offering Circular and the Terms of
Bonds.
"Business Day" shall mean a day when the China Construction Bank and
the commercial banks of Hong Kong, New York and London are open for business.
"Maturity Date of Bonds" shall mean the interest payment day of April
11, 2002 on which the Issuer shall accept the request for honor on the part of
bondholders.
"Interest Payment Day" shall mean April 11 and October 11 of each year
from the issuance of bonds on April 11, 1997 to the Maturity Date of Bonds
(inclusive), if such day falls on a non-business day, it shall be adjusted
pursuant to Article 5.1.3 of this Agreement, but the date as notified by the
Lender shall prevail in the end.
"Interest Period" shall mean the period beginning from an Interest
Payment Day (inclusive) to the next Interest Payment Day (non-inclusive), but
the first Interest Period shall begin in 1997.
"Interest Rate of Overseas Fund-raising" shall mean the six-month [***]
as stipulated in the External Agreements.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
5
"On-lending Fee Rate" shall mean the rate of on-lending fees under this
Agreement whose annual rate is %.
"Issuance Underwriting Fee" shall mean the commission charges collected
by the underwriting banking syndicate from the Issuer for underwriting bonds.
"Determination Date for Interest Rate" shall mean the date for
determining the US$ floating interest rate as stipulated in the External
Agreements.
"LIBOR" shall mean the LIBOR US$ floating interest rate as referred to
in the External Agreements.
Clause headings in this Agreement are inserted for convenience only and
shall be ignored in construing this Agreement.
Article 2 Amount and Purpose of the Loan
2.1 The on-lending loan under this On-lending Agreement is a part of
the total [***] which are issued by the Issuer
pursuant to the trust of the Borrower, the amount of the Loan
being [***].
Article 3 Preconditions for Using the Loan
The loan under this On-lending Agreement can only be used when all the
following conditions are met:
3.1 To provide at least 30 days prior to drawing money and subject to
the confirmation of the Lender the receipt of the following
documents:
(1) A photo copy of the Borrower's effective business license
issued by the authority for industry and commerce;
(2) A copy of the latest articles of association of the
Borrower's enterprise or other document with equal
effectiveness;
(3) A copy of the SPC's approval document to the proposal for the
construction project of the Borrower;
(4) The Borrower's letter of authorization authorizing the China
Construction Bank to raise funds overseas;
(5) A copy of the approval document of relevant governmental
authority which has listed the project in the State or
provincial plan;
(6) The foreign exchange (on-lending) loan registration and the
notice for the opening of the account for repayment of
investment with
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
6
interest of foreign exchange (on-lending) loan which are
issued by the local administration of exchange control have
been obtained by the Borrower;
(7) The unconditional, irrevocable and payment-upon-demand letter
of guaranty for repayment provided by the Borrower's
Guarantor pursuant to the form and content in Annex 2;
(8) Effective evidence that the Borrower has covered insurance
with a Chinese insurance company in accordance with the
stipulations of this Agreement;
(9) The report for project commencement approved by a competent
authority of the State;
(10) The Borrower has obtained the foreign debt registration
issued by the local administration of foreign exchange;
(11) The signature book and specimen official seal (signature) of
the authorized signatory of the Borrower;
(12) Other documents deemed necessary by the Lender.
3.2 The letter of guaranty for repayment issued by the Guarantor
pursuant to the form and content in Annex 2 has become effective.
3.3 The Borrower has paid all the fees due pursuant to Article 5.2.1
and Article 5.2.2 of this Agreement at the request of the Lender.
3.4 The Borrower has committed no act of default as described in
Article 13 or any act that might lead to default.
3.5 The Guarantor has not violated any obligation stipulated in the
letter of guaranty for repayment.
3.6 The Borrower reaffirms that the guaranty which it makes in this
Agreement is true, accurate and effective.
Article 4 Use of the Loan
The Lender will credit the loan under this Agreement to the account
which the Borrower has opened in the Lender's bank on April 11, 1997, namely the
date when the funds collected from the issuance of bonds have been credited to
the Lender's account. Regardless of when the Borrower will use the loan, the
interest on the loan under this On-lending Agreement shall be accrued from April
11, 1997.
Article 5 Interest and Fees of the Loan
7
5.1 Interest
5.1.1 The Borrower shall pay interest on time pursuant to the
interest rate of the loan which under this Agreement is the sum
of the interest rate for overseas fund-raising and the rate of
on-lending fee, namely the sum of the six months [***]
after the Determination Date of Interest Rate and the rate
of on-lending fee [***]. The specific interest rate as notified
to the Borrower by the Lender shall govern.
5.1.2 The Borrower shall pay interest to the Lender at each
corresponding Interest Payment Day on the basis of the balance
on the loan. The interest shall be calculated by the actual
number of days on the basis of 360 days a year. The specific
interest payment schedule and method of payment shall be
carried out in accordance with the "Schedule on Repayment of
Investment with Interest" (Annex 3) and the "Accord on
Special-purpose Funds" (Annex 1) respectively.
5.1.3 If the Interest Payment Day falls on a non-business day, the
next business day shall be taken as the Interest Payment Day
pursuant to the stipulation on Business Day in the External
Agreements; if the next business day falls on another calendar
month, it shall be advanced to the last business day of the
current calendar month, but the date as notified by the Lender
shall govern in the end.
5.2 Fees
5.2.1 The fees (including issuance underwriting fee, issuance
miscellaneous expenses and financial agency fee) totaling
[***] (the Issuer's overseas attorney fees which are
not included hereto shall be decided by the Lender in a
specific notice) under the Fiscal Agency Agreement and the
Subscription Agreement which are collected from the Issuer by
the Fiscal Agent and the Managing Agents shall be deducted
directly from the loan by the Lender.
5.2.2 The corresponding fees (including but not being limited to
attorney fees, travel expenses and contractual fees) incurred
by the Lenders in arranging the on-lending loan shall all be
borne by the Borrower.
5.3 The interest and fees as stipulated in the above articles with
the exception of Article 5.2.2 shall all be paid in US Dollar
cash while the fees as described in Article 5.2.2 shall be paid
in US Dollar cash or RMB at the request of the Lender and the
specific method of payment shall be carried out in accordance
with the "Payment Notice" delivered by the Lender.
5.4 All the payments made by the Borrower to the Lender under this
Agreement shall be executed in the precedence of payments of
expenses, overdue payment, interest and principal.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
8
5.5 If the maturity date of any payable under this Agreement falls
on a non-business day, it shall be postponed to the next
business day; if the next business day falls on another
calendar month, it shall be advanced to the last business day
of the current calendar month, but the date as notified by the
Lender shall govern in the end.
Article 6 Repayment
6.1 The date of repayment for the Loan under this Agreement is the
Maturity Date of Bonds, namely the Interest Payment Date on
April 11, 2002, but the occurrence of an event of default as
stipulated in Article 13 of this On-lending Agreement is an
exception.
6.2 The loan principal totaling [***] under this
Agreement shall be repaid in lump-sum US Dollar cash.
6.3 The "Schedule on the Repayment of Investment with Interest"
(Annex 3) provided by the Lenders shall govern the specific
repayment schedule.
6.4 The specific method of repayment shall be carried out in
accordance with the "Accord on Special-purpose Funds" (Annex 1)
executed by and between the Borrower and the Lender.
Article 7 Overdue Interest
7.1 If the Borrower fails to repay any sum (including principal,
interest and fees) due pursuant to the stipulations of this
Agreement, the Lender will accrue overdue interest from the
Borrower in relation to the overdue amount from the accrual
date (including such date) to the actual payment day (including
such day), the overdue interest will be the higher of the
following:
(1) 1.3 times as much as the Lender's cash loan interest rate
in the same period;
(2) The loan interest rate (the sum of the overseas
fund-raising interest rate and the rate of on-lending fee)
under this Agreement [***].
7.2 If the overdue exceeds one interest period, a compound interest
shall be accrued on the overdue sum.
7.3 The collection of overdue interest shall not affect the
implementation of Article 13 of this Agreement.
Article 8 Change in Situation
If due to changes in factors such as domestic and foreign laws and
decrees and market conditions which hinder the performance of the External
Agreements or lead
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
9
to bondholder's demand for redeeming its bonds in advance, the Lender may take
corresponding measures pursuant to the External Agreements, including the demand
for the Borrower's prepayment.
Article 9 Insurance
9.1 The Borrower shall cover full insurance for the assets incurred
by this Loan or the assets incurred by the original external
debt funds which are replaced by utilizing this Loan, and
shall, in respect of imported equipment, cover imported
commodity domestic transportation insurance, installment
insurance, construction project insurance, property insurance
and other necessary insurance with a Chinese insurance
institution in connection with the equipment under such
Agreement in the delivery, construction and repayment periods.
All the insurance coverages shall dovetail and allow of no
suspension in the duration of insurance and the insurance
amount shall not be lower than the sum of principal and
interest of the loan under this Agreement.
9.2 The insurance proceeds shall first be used to repay the
investment and interest of the Loan and its fees, but such
insurance proceeds may continue to be used for purposes
stipulated in this Agreement with the written consent of the
Lender.
9.3 The Borrower shall renew in time the insurance policy prior to
its expiration. During the effective period of this Agreement,
the Borrower shall not suspend the insurance for whatever
reason. If the Borrower suspends the insurance, the Lender has
the right to cover the insurance on its behalf and the
insurance premium shall be paid by the Borrower within ten days
after having received the Lender's notice with the overdue
interest to be accrued for the overdue in accordance with
Article 7 of this Agreement.
9.4 The insurance premium incurred for insurance under this Article
shall be borne by the Borrower.
Article 10 Tax
10.1 The tax which the Issuer pays and/or will pay under the
External Agreements shall all be borne by the Borrower in
accordance with the proportion of its on-lending loan in the
funds collected through issuance of bonds.
10.2 The tax payable under this Agreement shall be carried out in
accordance with Chinese tax laws and relevant regulations, and
the Borrower shall submit relevant tax payment receipt to the
Lender at the Lender's request.
Article 11 Guarantee
10
The Borrower hereby guarantees that:
11.1 since the effectiveness of this On-lending Agreement it will,
pursuant to the stipulations of this Agreement, perform
unconditionally and consecutively all its responsibilities and
obligations of repaying the principal with interest under this
Agreement and other obligations as stipulated in this Agreement
without being affected in any way because of its loss incurred
or its ability or inability of repayment;
11.2 the Borrower is a legal entity or institution which is
established, exists and engages in legal business activities in
accordance with the laws of China, is entitled to execute and
perform this Agreement, and has completed all necessary legal
and administrative procedures in executing and performing this
On-lending Agreement;
11.3 all the documents which the Borrower has provided and will
provide to the Lender are true, accurate, effective and latest
as required;
11.4 the Borrower's execution and performance of this Agreement does
not violate any of the current Chinese laws, regulations and
rules nor does it violate any contract or agreement to which
the Borrower is a party;
11.5 the Borrower has covered full insurance in connection with the
assets incurred by external debt funds which are obtained
through utilizing this Loan and that it has, in respect of
imported equipment, covered imported commodity domestic
transportation insurance, installment insurance, construction
project insurance, property insurance and other necessary
insurance with a Chinese insurance institution in connection
with the equipment under such contract in the delivery,
construction and repayment periods;
11.6 any agreement which the Borrower enters into or shall enter
into with a third party shall not affect or harm all the
interests which the Lender enjoys under this Agreement;
11.7 the Borrower, the Borrower's assets and the Borrower's officers
are not involved or will not be involved in any significant
arbitration or legal proceedings, nor are they subject to
mandatory administrative measure of any governmental authority
(these arbitration, or legal proceedings, or administrative
measures will produce significant adverse impact on its
finance, operation and management);
11.8 all the assets incurred by external debt funds under this
Agreement shall not be used as any other form of mortgage or
any form of guaranty during the term of execution of this
Agreement without the written consent of the Lender;
11
11.9 the Borrower reaffirms at each withdrawal and repayment that
the above-mentioned representation and guaranty remain true,
effective and accurate.
Article 12 Promises
12.1 The distribution principle of repaying loan first and sharing
profit second shall be carried out in connection with the plan
of repayment of principal with interest for this project;
12.2 If the Borrower extends the business scope as stipulated in its
business license or the scope of business and management as
approved by relevant governmental authority, or assigns any of
its assets or changes its business, it must seek written
consent from the Lender before submitting it to the
administrative authority for industry and commerce or relevant
governmental authority for approval;
12.3 If the Borrower engages in any form of mortgage, pledge or
guaranty for its assets and interests, it must inform the
Lender and seek written consent from the Lender in advance;
12.4 The Borrower must, at the request of the Lender, provide all
the information materials in time in connection with its
business and finance to the Lender, accept the Lender's
supervision and provide convenient conditions to the Lender in
inspecting the use and repayment of the loan and the production
and operation status of the Borrower;
12.5 If any adverse change on the part of the Borrower has occurred
or will occur which will affect its repayment capability or its
operation and financial status, the Board of Directors must
make a decision thereto or the Borrower must inform the Lender
within ten days of the occurrence of the above instance and put
forth its proposal or measure for settlement or handling;
12.6 If the Borrower requires to take any significant action such as
restructuring, reorganization, merger, acquisition, equity
transfer or equity mortgage, it shall inform the Lender in
advance and seek written consent from the Lender in advance;
12.7 The Borrower must within thirty days at the end of each quarter
provide the financial statement, profit and loss statement and
other financial reports for the preceding quarter to the
Lender, and must within three months at the end of each
financial year provide the financial statement, profit and loss
statement, other financial reports and relevant information for
the preceding year which are audited by an accounting firm to
the Lender;
12.8 The Borrower must run its business steadily and maintain good
financial status;
12
12.9 The Borrower shall inform immediately the following matters to
the Lender:
(1) Any arbitration or legal action in relation to the
Borrower or this project;
(2) Mandatory measure has been taken by any relevant
governmental authority against any property of the
Borrower;
(3) Other information in connection with the project which is
required by the Lender.
12.10 The Borrower hereby acknowledges as follows:
1. The funds which are collected through this issuance of the
bonds are partly aimed at raising funds for the Borrower, and
the China Construction Bank, for the sole benefit of the
Borrower, has as far as possible obtained the most favorable
conditions and terms in signing the External Agreements with
relevant parties at the request of the Borrower;
2. The Borrower commits that regardless of whether the Borrower
uses the loan pursuant to this Agreement, the Borrower will:
(1) bear the expenses and risks which shall be borne by the
Borrower and which are incurred in the course of execution
and performance of the External Agreements in connection
with this loan and pursuant to the stipulation of this
Agreement, and will, pursuant to the notification of
the Lender, compensate in full the Issuer and the Lender
for any expense and loss sustained because of the External
Agreements and related to this loan;
(2) the calculation of the loan interest under this Agreement
shall start from April 11, 1997 in accordance with
relevant stipulation on interest calculation in the
External Agreements;
3. The Borrower commits that in compensating the Lender's loss or
in notifying the Lender to make prepayment pursuant to relevant
terms of this Agreement, the Borrower, after having received
the above notification, must immediately repay the loan
pursuant to the requirement of the notification, meanwhile, the
Borrower irrevocably authorizes the Lender to make direct
deduction, transfer and use in case of compensating for the
loss of the Lender or notifying the Borrower to make prepayment
pursuant to relevant terms of this Agreement;
4. Unless the records are wrong, otherwise the records of the
Lender shall govern in respect of the debt records of the loan
under this Agreement.
12.11 The Borrower must strictly carry out the stipulations of the
"Accord on Special-purpose Funds" (Annex 1);
13
12.12 The Borrower guarantees that the repayment of the loan under
this Agreement is not subordinate to any other debt of the
Borrower;
12.13 The Lender is entitled to exercise supervision and examination
over the Borrower pursuant to the stipulation of this
Agreement;
12.14 The Borrower must deliver all the RMB settlement of accounts
and the import-export settlement of accounts to the Lender or
their designated branch for handling;
12.15 The Lender holds that the financial status of the Guarantor has
deteriorated to such an extent as to suspend operation or to go
bankrupt or to be incapable of performing its obligations under
the guaranty agreement; that the Guarantor may be confronted
with events of liquidation or being merged or dissolved and
rescinded which will produce adverse impact on the interests of
the Lender; and that the Guarantor is involved or will be
involved in significant arbitration or legal proceedings and
debt dispute which will affect the implementation of this
On-lending Agreement. Once the Lender confirms the occurrence
of the above situation, the Lender is entitled:
(1) to demand that the Borrower shall, in connection with the
above-mentioned guaranty obligations undertaken by the
Guarantor, find a new guarantor acceptable to the Lender
within the time-limit (no longer than 45 days) set by the
Lender;
(2) if the Borrower fails to provide the guaranty acceptable
to the Lender within the above time-limit, the Borrower
is regarded as having committed an event of default as
stipulated in Article 13, the Lender may take any
appropriate action which it is entitled to take pursuant
to the terms of the event of default;
12.16 Any undetermined matters in this Agreement, if being stipulated
in the External Agreements, will be included in the
supplementary agreement to this Agreement, the terms in the
supplementary agreement will be determined by the Lender
pursuant to the External Agreements and both the Lender and the
Borrower shall execute and perform.
12.17 In order to meet the need of the Borrower for paying the
principal and interest for the issuance of bonds, the Lender
will, on the basis of the foreign debt quotas acquired by the
Borrower, raise funds for the Borrower pursuant to relevant
stipulations for such foreign debt quotas, so as to enable the
Borrower to repay the principal and pay the interest and
relevant fees of the on-lending loan under this On-lending
Agreement.
Article 13 Events of Default
14
13.1 Any of the following acts or events shall constitute the
Borrower's event of default:
(1) The Borrower fails to repay principal and pay interest
and other fees pursuant to the stipulations of this
On-lending Agreement;
(2) The Borrower fails to perform any obligation which it
shall undertake pursuant to the stipulations of this
On-lending Agreement and relevant documents;
(3) The Borrower's guaranty in this On-lending Agreement and
the notification or other document made or delivered
therefrom are proved to be significantly inconsistent with
facts or inaccurate or incapable of performance;
(4) The Lender holds that the fact that the Borrower has made
guaranty, mortgage and pledge in connection with its
assets and interests has gravely affected its performance
of all the obligations under this Agreement;
(5) The Lender holds that the financial status of the
Borrower and the Guarantor has deteriorated so gravely
that they may suspend operation or go bankrupt or not be
able to perform their obligations under this Agreement;
(6) Any agreement, contract or document related to this
On-lending Agreement is suspended for implementation or
declared invalid;
(7) The Borrower has been or will be confronted with events
of liquidation or being merged or dissolved and rescinded
which will produce adverse impact on the interests of the
Lender;
(8) The Borrower fails to repay in time any other debt which
it owes the China Construction Bank and the Lender holds
that the Borrower's default in any other debt agreement
will affect the Borrower's repayment of any debt under
this Agreement;
(9) The Borrower, the Borrower's assets or the Borrower's
officers have been involved or shall be involved in any
significant arbitration or legal proceedings and debt
dispute (the Lender holds that these arbitration or legal
proceedings or debt dispute may produce adverse impact on
the Borrower's performance of this Agreement), however, if
the Borrower's officers are involved or shall be involved
in any significant arbitration or legal proceedings and
debt dispute which are merely individual actions unrelated
to their titles, then such actions shall not constitute
the Borrower's default;
(10) The Borrower arbitrarily embezzles any portion of the
loan under this Agreement;
(11) The Borrower opens an account or handles settlement in a
bank which is not designated by the Lender;
(12) The Guarantor violates any obligation stipulated in the
letter of guaranty;
13.2 In case any of the above-mentioned events of default occurs,
the Lender is entitled to take one or several of the following
measures:
15
(1) to correct within a definite time in accordance with
the notification of the Lender;
(2) to suspend withdrawal immediately;
(3) to declare the maturity of all the loan and require
immediate repayment of all the loan and its corresponding
interest and fees;
(4) the Lender may ask the Borrower to compensate for any
loss and the additional expenses therefrom because of the
Borrower's default.
Article 14 The Lender's Exercise of Rights
The fact that the Lender has not exercised or has not exercised in time
any obligations under this On-lending Agreement in the course of the
implementation of this Agreement shall not be regarded as its waiver of rights
and shall not affect any obligation which the Borrower shall undertake under law
and this On-lending Agreement.
Article 15 Assignment of the Rights and Obligations of the Lender and
the Borrower
15.1 The rights and obligations of the Lender under this On-lending
Agreement may be legally assigned.
15.2 The assignment of the rights and obligations of the Borrower
under this On-lending Agreement can be executed only after
seeking written consent from the Lender in advance.
Article 16 Amendment and Supplement
If there is adjustment in relevant policy of the State or other
uncovered matters in this On-lending Agreement, it may be jointly consulted,
amended and supplemented by both parties in accordance with the stipulations of
the External Agreements on the prerequisite of ensuring non-violation of the
External Agreements and timely repayment of investment and payment of interest
and relevant fees and of not harming the interests of the Lender. The amendment
and supplement shall constitute an inseparable part of this On-lending Agreement
and shall be as equally authentic as this Agreement.
Article 17 Dispute Resolution
17.1 The signed text of the "External Agreements" shall govern in
connection with the final interpretation of the written
language and terms which have occurred and are used in this
Agreement in relation to the External Agreements.
17.2 Should there be any dispute between the Borrower and the Lender
in the course of entrustment and on-lending, it shall first be
settled through friendly consultation. If no agreement can be
reached, any party may institute legal proceedings at a
people's court with jurisdiction according to law.
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Article 18 Effectiveness of the Annexes
The annexes to this On-lending Agreement are the inseparable parts of
this On-lending Agreement and shall be as equally authentic as this Agreement.
Annex 3 may be adjusted and/or supplemented by the Lender in accordance with
corresponding stipulations of the External Agreements.
Article 19 Miscellaneous
If the reform in the foreign currency system of the State and other
changes in policy are related to the use and repayment of foreign currency, the
Lender shall notify the Borrower on time and redefine relevant terms of this
Agreement pursuant to relevant stipulations of the State. Should there be any
change, the terms after the change shall govern.
Article 20 Effectiveness
20.1 This On-lending Agreement will come into force upon the
Lender's notification after all the following conditions are
satisfied:
(1) Execution of this Loan Agreement;
(2) Effectiveness of the External Agreements.
This Agreement will automatically cease to be effective upon the date
when the Borrower has paid all the loan principal, interest and any other fees
stipulated in this Agreement.
20.2 This On-lending Agreement is prepared in five original copies
with the Lender retaining three and the Borrower retaining two
and with duplicates delivered to relevant parties.
Article 21 Mode of Notification
The correspondence in the course of the implementation of this
Agreement shall be delivered correctly by the Lender and the Borrower to the
following addresses (If there is any change, it shall be notified in time to the
other Party):
Lender: Address:
Name:
Tel.:
Fax:
17
Postcode:
Borrower: Address:
Name:
Tel.:
Fax:
Postcode:
If it is notified by fax, the original must be mailed by registered
courier service immediately after the fax is sent. If it is mailed by registered
courier service, the date of mail shall govern.
Borrower: Lender:
(seal) (seal)
Signature of Legal Representative Signature of Legal Representative
(or his or her authorized (or his or her authorized
representative): representative):
Place of Signature: Date of Signature:
18
Annex 1
Accord on Special-purpose Funds in Connection
with the Repayment of On-lending Loan
for Issuance of Bonds Overseas
In order to meet the need for construction and development of the
Yangcheng Power Plant Project, the Shanxi Branch of the China Construction Bank
(hereinafter referred to as the Lender) and the Yangcheng International Power
Company Ltd. (hereinafter referred to as the Borrower) have signed the
On-lending Agreement totaling [***]. For the sake of ensuring the timely use
and repayment of the principal and payment of interest and relevant fees of the
foreign debt under the above-mentioned Agreement, both the Borrower and the
Lender have reached the following accord through friendly consultations:
Article 1 Opening and Purposes of Relevant Account of Special-purpose
Funds
The Borrower applies for opening the following accounts within
10 days upon the effectiveness of this Accord:
1. The Borrower applies to the Administration of Exchange Control
for opening an account in the Lender's International Business
Department which will be used for repaying the special-purpose
funds of the foreign debt.
2. The Borrower shall open a special-purpose RMB fund account (its
name will be determined separately) in an institution designated
by the Lender. The RMB funds in the account will be used to make
payment in regulated and rationed foreign exchange as well as
relevant fees incurred under this Accord.
Article 2 Sources of the Funds of the Special-purpose Account
In order to ensure the timely performance of external payment, the
Borrower shall reserve the following funds as the sources for repayment (if
there is any change in the accounting system of the State, both Parties may make
corresponding adjustment pursuant to the new accounting system):
1. The depreciation fund of fixed assets which shall be withdrawn
for imported equipment of the project and which shall be used for
repayment;
2. The additional profits which may be used for repayment pursuant
to relevant stipulations after the completion of the project;
3. Foreign currency earnings after the completion of the project;
4. Development fund for the enterprise;
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
19
5. Overall benefits of the Borrower and other income and funds under
enterprise control which may be used for repayment;
6. The exempted or refunded taxes which may be used for repayment
after submission to relevant authorities for approval.
Article 3 Use of the Account
1. The Borrower shall, pursuant to the "Schedule for Repayment of
Principal with Interest" or the notification of the Lender,
deposit the required funds not later than six months before the
Date of Payment in the "Special-purpose Fund Account for the
Repayment of Foreign Debt" or the RMB special-purpose fund account
which is opened at the Lender's Bank.
2. The depreciation funds of fixed assets that are withdrawn from
imported equipment of the project must be deposited in the
Borrower's RMB special-purpose account which is opened at an
institution designated by the Lender.
3. After the project has gone into operation, the RMB settlement in
the credit period must be handled in the Lender or its branch .
4. After the project has gone into operation, the settlement for the
import and export of products in the credit period must be handled
in the International Business Department of the Lender, and the
foreign currency earnings designated for repayment shall
immediately be deposited in the Borrower's "Special-purpose Fund
Account for the Repayment of Foreign Debt"
5. The Borrower shall repay the principal with interest on the
matured foreign currency loan with the kind of currency stipulated
in the loan agreement. If the Borrower makes repayment with other
kind of currency agreed to by the Lender, the Lender will act as
an intermediary in foreign exchange trading in accordance with the
exchange rate announced by the Administration of Exchange Control
at that time with the exchange rate risk borne by the Borrower.
6. The Lender will, on the basis of current deposit, accrue and pay
interest on the Borrower's balance of the funds in the
special-purpose fund account.
Article 4 Management of Special-purpose Funds
1. The Borrower shall, pursuant to the stipulations of this Accord,
deposit in time the foreign currency and RMB funds used for
external payment in the above account. The Lender is entitled to
handle directly the procedures of transfer for any delayed
payment.
2. Without prior written consent of the Lender, the Borrower shall
not handle RMB settlement stipulated in Article 3.3 and import and
export settlement stipulated in Article 3.4 in any bank other than
the Lender's during the repayment period.
If it is discovered that the Borrower handles the
above-mentioned settlement in any bank other than the Lender's, the
Lender is entitled to withhold from the Borrower's deposit account a
sum which is [***] of the total
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
20
amount of each default in settlement. The default fine withheld
pursuant to the above-mentioned stipulation shall not affect the
performance of the terms of "Events of Default" under the On-lending
Agreement.
3. The Borrower shall deposit in time a full amount of rationed or
regulated foreign exchange in the "Special-purpose Fund Account
for Repayment of Foreign Debt" so as to make it available for
payment in foreign currency. The Lender shall handle any of the
Borrower's unpaid payable account because of delayed or
insufficient amount of rationed or regulated foreign exchange as
an overdue, and overdue interest shall be accrued on the overdue
sum in accordance with the stipulations of the On-lending
Agreement.
4. Owing to foreign exchange trading during the period of external
payment, the Lender may temporarily advance the balance of the
arrears of the payment resulting from change in exchange rate and
then withhold it in the next external payment with the accrued
interest pursuant to the stipulated corresponding loan interest
rate. The Lender shall, on the basis of the current deposit for
foreign currency, accrue and pay interest on the balance of the
foreign currency special-purpose fund account for external
payment.
5. The banking charges incurred in foreign exchange rationing,
regulation and trading as well as other relevant fees under this
On-lending Agreement shall all be borne by the Borrower.
6. Should there be any major policy adjustment by the State, this
Accord may be amended through joint consultations between the
Borrower and the Lender on the premise of ensuring to repay on
schedule the principal with interest and relevant fees to relevant
foreign parties under the above-mentioned On-lending Agreement.
Yangcheng International Power Company Ltd.
(official seal)
Signature of Authorized Representative:
Shanxi Branch of China Construction Bank
(official seal)
Signature of Authorized Representative:
Date of Signature:
21
Annex 2
Letter of Guaranty for Repayment
China Construction Bank:
Whereas the Yangcheng International Power Company Ltd. (the Borrower)
has entrusted the China Construction Bank to raise funds through issuing bonds
overseas, the Borrower and the Shanxi Branch of the China Construction Bank (the
Lender) has for this purpose executed the On-lending Agreement totaling
[***]. This Guarantor sincerely guarantees that the Borrower will repay on
time the principal, interest and fees in foreign currency under the
above-mentioned Agreement, and has hereby established this letter of guaranty
which specifies the liabilities for guaranty as follows:
1. This letter of guaranty is an unconditional and irrevocable one
whose amount guaranteed is the sum of all the principal, interest
and fees under the above-mentioned Agreement.
2. In the event that the Borrower fails to deliver on schedule all
or part of the principal, interest and fees of the matured loan
under the above-mentioned Agreement because of difficulties in
making repayment or any other causes, the Guarantor will undertake
collateral liability and shall, within 15 working days after
having received a written notice from the Lender, guarantee to pay
in full to the Lender the foreign currency amount payable by the
Borrower as mentioned in the notice. If this Guarantor is unable
to perform the above-mentioned liability for guaranty, this
Guarantor hereby accepts that the Lender may directly deduct or
entrust the bank of deposit to deduct the corresponding amount
from any account of this Guarantor.
3. All the assets of this Guarantor, including but not being limited
to all the fixed assets, real estate, stock ownership and working
asset owned by this Guarantor, are the material guaranty for
issuing this letter of guaranty by this Guarantor. If this
Guarantor fails to perform its liability for guaranty pursuant to
the stipulation of this letter of guaranty, the Lender is entitled
to acquire through legal procedures the corresponding assets which
this Guarantor offers as a guarantee.
The Lender is also entitled to ask this Guarantor which, on
the basis of all its assets as the material guaranty for this
letter of guaranty, will set up a mortgage to which the Lender is
the beneficiary.
4. This letter of guaranty takes effect as of today and will remain
effective when the Lender agrees to the Borrower's postponement of
payment, while the amount guaranteed will be decreasing with the
Borrower's repayment of the loan until the guaranteed amount has
been repaid in full by the Borrower or the Guarantor.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
22
This Guarantor hereby confirms that the extension of the
above-mentioned loan may be regarded as having obtained prior consent
from this Guarantor and that this Guarantor agrees to undertake
collateral liability. This Guarantor waives its right of raising a plea
against any demand for repayment of loan or for performance of guaranty
obligations on the part of the Lender.
5. This Guarantor hereby confirms that it agrees to undertake
collateral liability.
6. This letter of guaranty is of the nature of a continuing
liability for guaranty which is affected neither by any
instruction of the higher unit of the Guarantor nor by any
agreement and document which the Borrower has concluded with any
unit; nor is it affected in any way by any change in the
Borrower's position or financial status, such as whether it goes
bankrupt, is closed, suspended, merged and transferred, turns to
be a joint stock company, or is purchased; nor is it affected by
any change in the nature of its enterprise, scope of business,
articles of association, and organization and institution.
7. This Guarantor is a legal entity which is lawfully established,
is issued with a business license by the administration for
industry and commerce, is possessed of property as guaranty which
is sufficient to repay the above-mentioned amount of guaranty, and
can guarantee to perform the obligations under this letter of
guaranty during the term of guaranty.
8. In the event of any situation which may affect its ability for
guaranty during the effective term of this letter of guaranty,
this Guarantor shall notify both the Borrower and the Lender and
shall guarantee the continued effectiveness of the guaranty. This
Guarantor shall not assign its obligation for guaranty without the
prior written consent of the Lender.
9. This Guarantor hereby confirms that the content and form of the
above-mentioned Agreement and its annexes have been accepted by
this Guarantor.
10. This letter of guaranty remains effective when both the Borrower
and the Lender agree to make amendments to the above-mentioned
Agreement.
11. This Guarantor hereby agrees that any accommodation and grace
granted to the Borrower by the Lender will not affect the
obligations of the Guarantor under this letter of guaranty.
Guarantor: ____________________
(official seal)
Legal Representative: ___________________
(signature)
23
Address of the Guarantor: _________________
The Guarantor's bank of deposit and account number:_____________
day month year
24
