Mortgage Contract
Exhibit 10.12
Contract
Number: 2007, Shimen (mortgage) No. 0005
Mortgagor
(Party A): Xxxxx Xxxxxxxx Hydropower Co., Ltd
Domicile
(Address): Power Station Road, Chujiang Town, Shimen County
Legal
Representative: Xxxx Xxx
Mortgagee
(Party B): Xxxxxx Xxxxxx of Industrial and Commercial Bank of China Co.,
Ltd
Domicile
(Address): Xxxxxxxx Xxxx, Xxxxxxxx Xxxx, Xxxxxx Xxxxxx
Legal
Representative(Person in-charge): Xxxxx Xx
Table
of Contents
Article
1.
Representations and Warranties of Party A
Article
2. Type and
Amount of the Indebtedness To Be Secured
Article
3. Term of the
Underlying Contract
Article
4. Scope of
Guarantee
Article
5.
Collateral
Article
6. Mortgage
Registration
Article
7. Possession and
Management of the Collateral
Article
8.
Insurance
Article
9. Realization of
Security
Article
10. Rights and
Obligations of Party A
Article
11. Rights and
Obligations of Party B
Article
12. Breach of
Contract
Article
13. Effectiveness,
Amendment and Termination of the Contract
Article
14. Dispute
Settlement
Article
15. Other Issues
Agreed
Article
16. Appendix
Article
17. Supplementary
Provisions
Xxxxx
Xxxxxxxx Hydropower Co., Ltd. (hereinafter "Debtor") and Party B under this
Contract have entered into a Loan Agreements, the contract number of which is
2007 Shimen No.0004, (hereinafter “Underlying Contract”) on March 23, 2007.
Party A agrees to provide mortgage guarantee to secure the indebtedness of the
Debtor under the Underlying Contract. Party A and Party B upon consultation have
reached the following Contract in accordance with the Contract Law and the
Guarantee Law of People’s Republic of China and other relevant laws and
regulations, for mutual observance and compliance.
Article
1. Representations
and Warranties of Party A
1.1 Party
A is the full, effective and lawful owner or the State-authorized administrator
of the collateral under this Contract, and there is no dispute regarding the
ownership or right of administration for the collateral;
1.2 Party
A fully understands the purpose of the Loan under the Underlying Contract and
has provided the security under this Contract of its own will;
1.3 Party
A has disclosed and explained all defects of the
collateral;
1.4 The
collateral under this Contract is allowed by law to be mortgaged;
1.5 There
is no restriction against the establishment of the mortgage under this
Contract;
1.6 There
is no seizure, attachment or supervision existing over the
collateral;
1.7 In
case that Party A leases partial or all of the collateral to other party, Party
A shall notify the Lessee of the mortgage and notify Party B of the lease in
writing.
Article
2. Type and
Amount of the Indebtedness To Be Secured
2.1 The
mortgage under this Contract is to secure the indebtedness owed by the Debtor to
the Mortgagee derived from the Loan, the amount of which is RMB 160 million,
granted by Party B under the Underlying Contract.
Article
3. Term of the
Underlying Contract
3.1 The
term of the Underlying Contract hereunder is 180 months,
from March 23,
2007 to March 23,
2022. If there is any change, the term shall be determined by
the Underlying Contract.
Article
4. Scope of
Guarantee
4.1 The
security under this Contract shall be to secure all of the loan
principal, interest, compound interest, penalty interest, damages, compensations
and all the expenses incurred in realizing the Mortgagee's rights and other fees
payable under the Underlying Contract.
Article
5. Collateral
5.1 The
collateral under this Contract is described in detail in the List of
Collateral;
5.2 The
estimated value of the collateral contained in the abovementioned List of
Collateral is the basis of value evaluation when Party B dispose the collateral
in accordance with Article 9 of this Contract and shall impose no restriction on
realizing the Mortgagee's right by Party B;
5.3 The
relevant certificate and materials of the collateral shall be kept by Party B
after having been confirmed and sealed by both Parties unless otherwise
stipulated by laws and regulations.
Article
6. Mortgage
Registration
6.1 The
Parties shall register the mortgage at the relevant mortgage registration office
within 15 days after execution of this Contract as required by laws or agreed by
both Parties;
6.2 The
Parties shall alter the registration at the relevant mortgage registration
office within 15 days in case of alteration of the mortgage as
required by laws.
Article
7. Possession
and Management of the Collateral
7.1 The
collateral shall be possessed and managed by Party A. Party A shall maintain the
integrity of the collateral and shall not impair the value of the collateral
through improper utilization. Party B is entitled to supervise the possession
and management of the collateral;
7.2 In
case of loss or damage to the collateral, Party A shall notify Party B promptly
and take necessary efforts to minimize the loss. Party A shall also provide
Party B with necessary proof of the loss or damage issued by the relevant
authorities.
Article
8. Insurance
8.1 Party
A shall purchase the basic property insurance and additional BLANK insurance for
the collateral within 15 days after execution of this Contract. The insured
period shall be no shorter than the term of the Loan under the Underlying
Contract and the insured value shall be no less than the principal and interest
of the Loan;
8.2 Party B shall be the first
beneficiary listed under such insurance. There shall be no restriction of Party
B's interest and right under such insurance;
8.3 Party
A should not terminate or cancel the insurance for any reason during the valid
period of this Contract. Party B is entitled to renew the insurance at the cost
of Party A in case of termination of the insurance;
8.4 The
insurance compensation shall be used to repay the Loan under the Underlying
Contract or to restore the value of the collateral as agreed by Party
B.
Article
9. Realization of
Security
9.1 In
realizing the Mortgagee's right in accordance with laws, Party B is entitled to
use the collateral to make up for the indebtedness as agreed by both Parties or
settle the outstanding indebtedness by the proceeds derived from the sale or
auction of the collateral;
9.2 Party
A shall assist Party B to realize its right and shall not cause any
hindrance.
Article
10. Rights and
Obligations of Party A
10.1 After effectiveness of this
Contract, Party A shall not create any mortgage, pledge on the collateral or
lease, transfer or donate the collateral to any third party without getting
written consent from Party B;
10.2 The assignment of the
creditor rights under the Underlying Contract to a third party by Party B in
accordance with the relevant laws shall not affect Party A’s obligations under
this Contract;
10.3 Except for the cases that
the term of the Loan under the Underlying Contract is extended or the principal
amount of the Loan is raised, Party A’s consent is not required for any
variation to the Underlying Contract mutually agreed between Party B and the
Debtor, and Party A’s obligation hereunder shall not be reduced or discharged
thereby;
10.4 In
case of devaluation of the collateral due to Party A's conduct, Party A shall
cease such conduct and restore the value of the collateral or provide extra
security;
10.5 In case of devaluation of
the collateral due to reasons other than Party A's fault, Party A will bear the
obligation of security only within the limitation of the compensation received
by Party A. The remaining collateral shall still be mortgaged to secure the
indebtedness of the Debtor;
10.6 In
case of expropriation of the collateral by the State, the relevant compensation
shall be used to settle the indebtedness of the Debtor before maturity or be
deposited in a third party designated by both Parties;
10.7 Party
A shall bear all the expense and cost under this Contract, including but not
limited to: attorney services, insurance, authentication, evaluation,
registration, transfer and litigation;
10.8 Party
A shall make proper arrangement about the security in case of division, merger,
and shareholding system rebuilding of Party A;
10.9 In case of damage or
possible damage by third party to the collateral, Party A shall notify Party B
in time and assist Party B to prevent the damage;
10.10 Party
A shall promptly notify Party B in writing in case of the following
events:
10.10.1 Change
of its management system, such as contracting, leasing, pooling, merger,
division, shareholding system rebuilding, establishing a joint venture, and
etc;
10.10.2 Change
of its business scope, registered capital and joint stock
restructuring;
10.10.3 Involvement
of major economic dispute;
10.10.4 Dispute
over ownership of the collateral;
10.10.5 Bankruptcy,
cessation of operation, dissolution, cessation of production for rectification,
cancellation or revocation of business license;
10.10.6 Change
of its domicile, telephone number, or legal representative;
10.11 Under
the circumstances stated in 10.10.1 or 10.10.2, Part A shall notify Party B 30
days in advance; under other circumstances stated in 10.10, Party A notify Party
B in writing within 5 days after the occurrence of such event;
10.12 In
case the collateral is project being constructed, Party A shall actively
cooperate PartyB to register the real estate mortgage at the relevant mortgage
registration office after the project is complete and is issued the property
right certificate;
10.13 Party
A is entitled to cancel the mortgage once all indebtedness under the Underlying
Contract has been paid.
Article
11. Rights and
Obligations of Party B
11.1 Party
B is entitled to dispose the collateral in case of failure by the Debtor to pay
the loan principal, interest or other fees upon maturity date of the Underlying
Contract;
11.2 Party B is entitled to
dispose the collateral in advance and the right of first claim to the proceeds
in case that:
11.2.1 The
Underlying Contract is terminated in accordance with laws or as stipulated in
the Underlying Contract;
11.2.2 The
loan becomes mature before expiry of term in accordance with the Underlying
Contract and the indebtedness under the Underlying Contract has not been
settled;
11.3 Party
B is entitled to ask for Party A's assistance in its effort to prevent damage of
the collateral by any third party;
11.4 Party B shall notify Party
A promptly in case of the assignment of the creditor’s right under the
Underlying Contract during the term of the Contract in accordance of the
laws;
11.5 After
the realization of the security, Party B shall assist Party A's execution of
recourse right against the Debtor;
11.6 Party
B shall repay the residual proceeds of the collateral to Party A once all
secured indebtedness has been paid;
Article
12. Breach of
Contract
12.1 Party
A shall compensate Party B for any loss due to false statements or undertakings
by Party A in Article 1 of this Contract;
12.2 Both
Parties shall perform their obligations under this Contract strictly after the
effectiveness of the Contract. The breaching party shall compensate the other
party any loss suffered due to its breach of Contract;
12.3 In case that this Contract
becomes invalid due to fault of Party A, Party A shall compensate Party B for
all loss within the limitation of the security amount.
Article
13. Effectiveness,
Amendment and Termination of the Contract
13.1 The
Contract shall come into effect once it is executed and affixed with the
official seals by both Parties and registered with the relevant mortgage
registration office as required by laws; the contract shall terminate
when the principal, interest, compound interest, penalty interest, damages for
breach of contract, compensation and expenses in realizing the creditor’s right,
and all other related expenses under the Underlying Contract have all been paid
off;
13.2 The
effect and validity of the Contract hereunder shall be separate from and
independent of that of the Underlying Contract; and invalidity of the Underlying
Contract shall not affect the effect and validity of the Contract hereunder. If
the Underlying Contract is held to be void, Party A shall be also liable for all
obligations of guarantee under this Contract;
13.3 After
the effectiveness of the Contract, neither Party shall have the right to amend
or cancel the Contract in advance unilateraly.This Contract may be amended or
terminated in writing by both Parties through consultation. Befor the
written agreement is reached, all terms stipulated in this Contract shall remain
valid.
Article
14. Dispute
Settlement
14.1 Any
dispute arising during the performance of this Contract may be settled through
consultation. If the consultation fails, it shall be settled through the 14.1.2 of the
following methods:
14.1.1 File
the dispute to BLANK_
for arbitration;
14.1.2 Bring
a suit before the court in the jurisdiction where Party B
domiciles.
Article
15 Other Issues
Agreed
15.1 The following space is
intentionally left blank
_________________________________________________________________________;
15.2 The following space is
intentionally left blank
__________________________________________________________________________;
15.3 The following space is
intentionally left blank
____________________________________________________________________________.
Article
16. Appendices
16.1 The
appendices hereto are an integral part of the Contract. The Contract and the
appendices hereto have the equal legal force:
16.2 The
appendices of this Contract include the following:
Appendix
1: List of Collateral
Appendix
2: BLANK
Article
17. Supplementary
Provisions
The
Contract is executed in triplicate with
the equal legal effect. Each of Party A, Party B, and the relevant
mortgage registration office shall hold one.
Party
A (Seal): (Seal)
Legal
representative or authorized representative (Signature):
/s/
Xxxxxxx Xxxx
March 23,
2007
Party B
(Seal): (Seal)
Legal
representative (Person in-charge) or authorized representative
(Signature):
/s/ Xxxxx
Xx
March 23,
2007
List
of the Payment Statistic of Xxxxx Xxxxxxxx Hydropower Co., Ltd’s Left Bank
Expansion
Project (List of Collateral)
March 31, 2007 Currency:
Renminbi
|
No.
|
Name
of the Project
|
Amount
Paid
|
Notes
|
|
1
|
Hydraulic
turbo-generator group
|
35,040,000
|
|
|
2
|
Project
construction supervision
|
1,110,000
|
|
|
3
|
Civil
engineering construction
|
56,791,300
|
Including
payment for materials and prepayment for the
project
|
|
4
|
Hoists,
clean up machines
|
2,452,200
|
|
|
5
|
The
manufacture and installation of gate
|
5,200,000
|
Including
payment for materials and prepayment for the
project
|
|
6
|
Mechanical
and electrical installation work
|
6,400,000
|
|
|
7
|
Dam
safety monitoring
|
908,700
|
|
|
8
|
Overhead
crane
|
1,448,700
|
|
|
9
|
220
KV Main transformer
|
5,180,000
|
|
|
10
|
GIS
equipment
|
2,945,000
|
|
|
11
|
Computer
monitoring equipment
|
840,000
|
|
|
12
|
Insulation
equipment
|
870,000
|
|
|
13
|
DC
power supplies
|
342,000
|
|
|
14
|
Axis
control equipment
|
538,800
|
|
|
15
|
110KV
High-voltage Switch Cabinet
|
2,660,000
|
|
|
16
|
110KV
interval
|
270,000
|
|
|
17
|
Storage
tank equipment
|
48,600
|
|
|
18
|
Automation
components
|
99,000
|
|
|
19
|
Oil-processing
equipment
|
27,000
|
|
|
20
|
Fan
|
126,700
|
|
|
21
|
Drainage
pump
|
147,500
|
|
|
22
|
Water
filter
|
79,000
|
|
|
23
|
Air
compressor
|
214,100
|
|
|
24
|
water
supply pump
|
31,500
|
|
|
25
|
Gas
storage tank
|
94,800
|
|
|
26
|
Fire
fighting equipment
|
1,137,700
|
|
|
27
|
Bus
|
118,400
|
|
|
28
|
Plant
transformer
|
3,500,000
|
|
|
29
|
Industrial
TV
|
200,000
|
|
|
30
|
Metal
roof
|
4,200,000
|
|
|
31
|
Low-voltage
switch cabinet
|
297,700
|
|
|
32
|
Lighting
system, cables
|
8,500,000
|
|
|
33
|
Cable
bridge
|
240,000
|
|
|
34
|
22KV
Access system
|
15,800,000
|
|
|
35
|
Other
sporadic projects
|
15,000,000
|
|
|
36
|
Materials
for Guangdong Yuantian
mechanical
and electrical installation work
|
5,801,100
|
|
|
37
|
Loan
interest
|
29,670,000
|
|
|
38
|
Other
project costs
|
35,000,000
|
|
|
39
|
Plant
renovation project
|
3,000,000
|
|
|
Total
|
246,329,800
|
