Loan Agreement
Exhibit 10.10
Contract
Number: (2004)
Bank of China, Shenzhen Corporate Loan No.
42001
Borrower
(hereinafter “Party A”): Hunan Zhaoheng Hydropower
Co., Ltd.
Business
License Number of Enterprise Legal Person: Joint Venture, Changde,
Hunan, No. 000427
Legal
Representative: Xxxx
Xxx
Domicile:
Power Station Road,
Shimen County, Changde City
Telephone: 0000-0000000
Lender
(hereinafter “Party B”): Bank of China, Shenzhen
Branch
Person
in-charge: Jianyou,
Zhang
Domicile:
Xx. 0000 Xxxxxxx Xxxx,
Xxxxxxxx Xxxx
Telephone:
00000000
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Party A
applies to Party B for borrowing money because of the business operation needs,
and the Parties, through consultation, have agreed to execute the Agreement as
follows:
Article
1. Currency and
Amount of the Loan
The
currency under this Loan is Renminbi, the amount
of the Loan under this Agreement is (word) RMB a hundred and eighty
million, and (Arabic numerals) RMB 180,000,000.
Article
2. Purpose of
the Loan
The Loan
hereunder shall be used for the expansion of Sanjiangkou
Hydropower Station, and, Party A shall not change the purpose of the Loan
hereunder without the written consent of Party B.
Article
3. Term of the
Loan
The term
of this loan is 96 months from the
date of effectiveness of this Agreement.
Article
4. Interest
Rate and Interest Calculation
1.
Interest Rate: The interest rate shall be 5.76%
. During the Loan term, if the country's related authority or
Party B adjusted the interest rate or the manner of calculation of interest in
accordance with the related regulations, the interest of this contract shall be
adjusted accordingly without the obligation to notify Party B and the
Guarantor;
2. The
interest shall be calculated from the date of first drawdown and the actual days
the borrower uses. One year shall be calculated as 360 days. Interest
on the loan hereunder will be settled on a quarterly basis
(monthly/quarterly). Interest settlement day is fixed at the twentieth day of
the last month of a
quarter (month/end of quarter). If the maturity date of
the Loan is not the same as the interest settlement day, the maturity date of
the Loan shall be the interest settlement date for the last
installment. For the interests Party A fails to pay on time during
the term of loan, Party B is entitled to collect interest in accordance with the
interest rate stipulated in the Agreement starting from the interest settlement
day. After the loan is overdue, Party B is entitled to collect
interest at the rate of 2.4‰ per day on the
unpaid interest if the currency of the loan is Renminbi or claim penalty
interest at a rate of BLANK upward the
original interest rate if the currency of the loan is foreign currency until all
the interest has been paid off;
3.
Overdue interests and misusing interest: Repayment overdue means Party A fails
to repay the Loan on time as stipulated in the Agreement and fails to reach an
agreement with Party B regarding the extension. Should Party A fail
to repay the Loan under the Agreement on time, Party B has the right to collect
the overdue interest at the rate of 2.4‰ per day to the
overdue amount if the currency of the loan is Renminbi, or claim penalty
interest at a rate of BLANK upward the
original interest rate if the currency of the loan is foreign
currency. Should Party A fail to use the Loan for the purpose as stipulated
in the Agreement, Party B has the right to collect interest at the rate of 2.4‰ per day on any
balance of the Loan used by Party A in breach of this Agreement for the days of
breach if the currency of the loan is Renminbi, or claim penalty
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interest
at a rate of BLANK
upward the original interest rate on any balance of the Loan used by
Party A in breach of this Agreement for the days of breach if the currency
of the loan is foreign currency;
4.
Repayment of interest: Party A shall repay the interest on every interest
settlement day, or Party B may deduct the amount payable directly from the
savings account of Party A.
Article
5. Grant of the
Loan
Party A
shall start collecting the Loan under this Agreement within _BLANK_ month
after the effective date of the Agreement, or collect the Loan in accordance
with the grant plan stipulated in this Agreement. The grant plan is
confirmed by the Parties through consultation. Party A may collect
the Loan in one time or by installment for the purpose stipulated in this
Agreement. Should Party A fail to collect the Loan in
accordance with the grant plan, Party A will not have the right to collect the
amount that has not been collected without the consent of Party B, and Party B
shall be entitled to collect the commitment fee of _____ in one time from Party
A at the rate of _____. For every withdrawal, Party A has to fulfill
the collecting procedures as required by Party B.
Article
6. Repayment of
the Loan
Party A
shall repay all the principal and interest before the maturity date of the Loan
as stipulated in the Agreement. If a repayment plan is included,
Party A shall make the repayment in accordance with the plan.
For early
repayment, Party A shall obtain the written consent of Party B. Party
B is entitled to collect the compensation of ______in one time from Party A for
the early repayment, and Party A shall not collect the part of the Loan that has
been repaid early. If there is a repayment plan in the Agreement, the
early repayment shall be made in the reversed order of the repayment
plan.
In the
event Party A may fail to repay the Loan on time and need an extension, Party A
shall apply to Party B for the extension in writing one month in advance, and
Party B has the right to decide whether to grant the extension.
Article
7. Security of
the Loan
All debts
under the Agreement is guaranteed by Shenzhen Zhaoheng Industrial
Co., Ltd in accordance with the Guarantee Contract, (2004) Bank
of China, Shenzhen, Guarantee No. 0011, and the Pledge Contract, (2004) Bank of
China, Shenzhen, Pledge No. 0005. The guarantor
shall bear the guarantee obligations as stipulated.
Article
8. Rights and
Obligations of Both Parties
1. Rights
and Obligations of Party A
(1) Party
A has right to collect and use the Loan as stipulated herein;
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(2) Party A
shall repay the principal and interest of the loan on schedule and assume the
related expenses as stipulated herein;
(3) Party
A shall provide the relevant materials as required by Party B, including but not
limited to providing the reports regarding its operation and financial
conditions, sheets, certificates, and documents, and shall be responsible for
the accuracy, trueness, completeness and validity of the information
provided by it;
(4) Party
A shall notify Party B in writing the following issues:
(i) The
event of breach of contract under any loan contracts or credit line agreements
and the sub-credit contracts or guaranty contracts between the Party A and any
branches of Bank of China or other banks, non-bank financial organizations and
creditors;
(ii) Any
change in the corporate structure, business scope, shareholder and senior
management personnel, agreement of joint venture operation and articles of
association, and the internal organizational structure;
(iii)
Involvement in illegal activity or material litigation or debt claiming of the
legal representative or main responsible person;
(iv) Serious
difficulty in operation, deterioration of financial condition on the part of
Party A;
(v)
Before repaying in full the principal and interest of the Loan under this
Agreement, any debt that has been or will be owned by Party A, or any mortgate
or pledge guarantee that has been or will be provided by Party to any third
parties;
(vi)
Party A’s involvement of any litigation or arbitration that have been brought
because of the creditor-debtor disputes;
(vii)
Other events that might affect Party A’s financial conditions and ability of
paying debts.
(5) Party
A’s debts shall not exceed its net assets, and Party A shall not dispose the
assets which will make adverse impact on its ability of paying
debts;
(6) Party
A shall accept the credit investigation and supervision by Party B and provide
enough assistance and cooperation;
(7)
Whether or not Party A and the guarantor under this Agreement have reached or
may reach a counter-guarantee contract, such contract shall not legally or
factually damage Party B’s rights under this Agreement;
(8) Party
A shall obtain the written consent from Party B in advance of any of the
following events:
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(i)
Reducing the registered capital, division, merger, consolidation, joint stock
restructuring or other major structure changes, revocation, dissolution, and
going out of business;
(ii)
Major issues regarding investment and assets transfer;
(iii)
Trading of property right or operation right by leasing, contracting, joint
operation, or trusteeship;
(iv)
Adjustment or assignment of equity interest or other major issues regarding the
change of equity interest structure;
(9) In
the event that Party A’s income in a fiscal year is not enough to repay the due
principal, interest, and other expenses under this Agreement, Party A shall not
issue dividend or bonus in any form to shareholders;
(10) The
proportion of Party A’s deposit and settlement business with Party B of the
total deposit and settlement business Party A shall not be lower than the
proportion of Party A’s credit granted by Party B of Party A’s total credit
granted by financial institutions.
2. Rights
and Obligations of Party B
(1) Extends
the Loan in accordance with the provisions stipulated herein;
(2) Party
B has right to supervise and investigate using conditions of the Loan and
collect the principal and interest of the Loan on time;
Article
9. Breach of
Contract
1. The
occurrence of any of the following events constitutes the breach of contract by
Party A under this Agreement:
(1) Fails
to use the Loan in accordance with the purpose stipulated
hereunder;
(2) Fails
to pay the due principal, interest, expenses or other payable in accordance with
the Agreement;
(3) Party
A breaches the obligations set forth in Article 8 hereunder;
(4) Party
A breaches other loan agreements or guaranty agreements or the Guarantor breach
the guaranty agreement which may affect Party A to perform the obligations under
this Agreement;
(5) The
value of the mortgaged property or pledged property that provides guarantee for
this Agreement decreases so clearly that affect Party B’s rights and benefits,
and the mortgagor or the pledgor fails to provide additional
security;
(6)
Serious deterioration of operation conditions on the part of Party
A;
(7) Party
A transfers assets or withdraws capital or conducts other acts to evade the
debts;
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(8) Party
loses the business credit;
(9) Party
A involves in litigation or arbitration proceedings and other legal disputes
with third parties, where Party B considers it may cause adverse effect or
impair on the rights and interests of Party B hereunder;
(10) Any
events that has caused or may cause Party A lose the ability of repaying
debts;
(11)
Intentionally conceals important issues relevant to the execution of the
Agreement or provides false information;
(12)
Before the maturity date of the Loan under this Agreement, Party A expresses
specifically or the conducts of Party A show clearly that Party A refuses to
undertaken the major debts under this Agreement;
(13)
Party A fails to inform Party B serious issues that affect the security of the
Loan;
(14)
Party A breaches obligations under the Account Supervision Agreement executed by
both Parties and Bank of China, Changde Branch on March 03,
2004;
2. The
occurrence of any of the following events constitutes the breach of contract by
Party B under this Agreement:
(1) Party
B fails to grant the Loan as stipulated herein;
(2) Party
B breaches the interest rate stipulated in this Agreement and demands additional
interest and other expenses;
Article
10. Liabilities for
Breach of Contract
1. In the
event of the breaches in the Section 1 of Article 9 herein, Party B shall be
entitled to exercise one or more of the following rights:
(1)
Requests Party A to rectify within the period designed by Party B;
(2) In
the event of misusing the Loan, calculates and collects interest in accordance
with the Section 3 of Article 4 under the Agreement;
(3) For
the overdue repayment, calculates and collects interest in accordance with the
Section 3 of Article 4 under the Agreement;
(4)
Deduct and transfer the overdue principal, interest, expenses and damages
directly from the Party A’s account;
(5)
Suspense the Agreement by notifying Party A in writing and requests Party A to
regain the ability of execution within a month or provides new security
acceptable to Party B;
(6)
Rescind this Agreement;
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(7)
Cancel the credit or stops granting the Loan;
(8)
Accelerate the maturity immediately and requires Party A to promptly repay the
principal, interest and expenses of all the mature or immature debts
hereunder.
2. In the
event of the breaches in the Section 2 of Article 9 herein, Party A shall be
entitled to exercise one or more of the following rights:
(1)
Request Party B to rectify within the period designed by Party A;
(2) Repay
the Loan in advance;
(3)
Rescind this Agreement.
Article
11. Supplement and
Amendment of the Agreement
1. This
Agreement may be supplemented and amended in writing. Any amendment and
supplement shall be an integral part of this Agreement;
2. In
the event of change of laws or regulations which will cause any terms contained
in this Agreement become illegal or loss of the power of compulsory enforcement,
the legality, validity, and the power of compulsory enforcement of other parts
of this Agreement shall not be impaired by it. Both Parties shall make efforts
to promptly amend the terms that become illegal, invalid or loss of compulsory
enforcement power.
Article
12. Notarization of
the Agreement
Should
the Agreement need to be notarized, Party A shall assume the expense of
notarization. Once the Agreement is notarized, Party B has the right
to apply for compulsory enforcement directly if Party A fails to fulfill the
obligations.
Article
13. Appendices
of the Agreement
The
appendices hereto are an integral part of the Agreement. The Agreement and the
appendices hereto have the equal legal force:
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1.
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Certificate
of Indebtedness;
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2.
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Security
Documents;
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3.
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Repayment
Plan;
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4.
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Other
necessary materials agreed by both
Parties.
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Article
14. Other Matters
Agreed
1. Party A
shall assume all expenses related to this Agreement;
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0.Xxxxx A
shall not assign any right and obligation under this Agreement to third parties
without the written consent of Party B;
3.
Commitment fees and compensation fees under this Agreement are within the
category of damages agreed by both Parties;
Article
15. Applicable Laws
and Dispute Settlement
The
applicable laws of the Agreement are the laws of the People’s Republic of
China.
Any
dispute arising during the performance of this Agreement may be settled through
consultation. If the consultation fails, it shall be settled through the first of the
following methods:
1. Bring
a suit before the court in the jurisdiction where Party B
domiciles;
2. File
the dispute to BLANK
arbitration commission for arbitration in accordance with the effective
arbitration rules of the arbitration commission.
Article
16. Effectiveness of
the Agreement
1. This
Agreement is executed by the authorized representatives of the Parties and
affixed with the official seals of both Parties;
2. The
guarantee contract under this Agreement becomes effective;
3. The
above mentioned Account Supervision Agreement executed by both Parties and Bank
of China, Changde Branch becomes effective;
4. Should
the notarization needed, the Agreement becomes effective only after the
notarization.
Article
17. Form of the
Agreement
The
Agreement is executed in quintuplicate with
the equal legal effect. Each of Party A and Party B shall
hold two,
and the Guarantor shall hold one.
Party A
(Seal): (Seal)
Authorized
representative (Signature):
/s/
Xxxxxxx Xxxx
Party B
(Seal): (Seal)
Authorized
representative (Signature): /s/
Xxxxxxx Xxxxx
March 03,
2004 in Shenzhen
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