MEMORANDUM OF UNDERSTANDINGS FOR STATEGIC COOPPERATION BETWEEN BANK OF CHINA FUJIAN BRANCH AND CHINA HYDROELECTRIC CORPORATION
Exhibit 10.51
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FOR STATEGIC COOPPERATION
BETWEEN BANK OF CHINA FUJIAN BRANCH
AND CHINA HYDROELECTRIC CORPORATION
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This Memorandum of Understandings (the “MOU” ) is entered into between:
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Party A: | Bank of China Fujian Branch |
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Party B: | China Hydroelectric Corporation, a company incorporated Cayman Islands for the purpose of the investing in hydroelectric projects in China |
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(Party A and Party B are hereinafter referred to individually as a “Party”
and collectively as the “Parties” )
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Whereas:
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(1) China Hydroelectric Corporation currently legally owns 10 Wholly Owned Subsidiaries ( “WOFE” )
or Sino-Foreign Joint Ventures ( “JV” ) in China with a total approved investment amount in excess
of US$500 million. China Hydroelectric Corporation through its subsidiaries currently own and
operate 10 hydroelectric power plants in Fujian Province, Zhejiang Province, Yunnan Province and
Sichuan Province.
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(2) China Hydroelectric Corporation intends to set up an Investment Holding Company, China
Hydroelectric Investment Company Limited ( “Investco” ) in Fujian Province to finance the
acquisition of small to medium sized hydroelectric projects in Fujian and other provinces. Total
proposed registered capital of the Investco is $30 million until $100 million.
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Parties A and Parties B hereby agrees that:
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(1) Party A will provide a credit line of up to $200 million or two times the registered capital
of the proposed Investco set up by Party B to finance Investco’ s acquisition of small to
medium-sized hydroelectric
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projects in Fujian Province and other parts of China, and carry on correlated liability or payout
correlated construction expenses.
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(2) Any project, which is merged and acquired by Investco with the fund of Party A, deeds to be
investigated by Party A dutifully, and Party A should loan Investco 50% of the total equity M&A
costs according to the examination and approval procedure for correlative loans after the mortgage
evaluation on Party A and other terms of loan are fully satisfied, so as to fulfill the M&A in the
form of medium of long term credit loan. At the same time, Party A would provide medium of long
term credit loan amounts to no more than 80% of the total real investment in the project for the
project merged and acquired by Investco within the range of gross credit granted amount. The M&A
loan and the total number of the medium of long term credit loan provided by Party A to Investco
should not exceed 70% of the total price for acquisition of the project.
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(3) The acquisition loans provided by Party A should have a term of no
exceed of 5 years and project loan provided by Party A should a term of no exceed of 15 years with
an interest rate less than the related People’ s Bank of China’ s bench xxxx rate.
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(4) The proceeds of the loans should be used solely for the acquisition of small to medium sized
hydroelectric projects and related acquisition expenses or construction expenses.
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(5) Party A shall require Investco to provide annual audited financial statements and other
relevant documents to demonstrate its good standing.
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(6) This Memorandum of Understandings shall be in place for two years from the time of the
execution.
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(7) Confidentiality: Upon the execution of this MOU, and provided that Party A has been moving
forward in good faith toward completing its due diligence investigation and documentation of the
Transaction, Party B shall not furnish, or authorize any agent or representative to furnish to any
third party, any information concerning this MOU., the Transaction, or any non-public information
regarding Party A, except that Party B can furnish such information to its employees, agents and
representatives who are assisting it in evaluating the Transaction. Party B shall be liable for a
breach of this obligation by its officers, directors, employees, agents or representatives.
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(8) Fees and Expenses: The Parties shall bear their own expenses in connection with any legal,
accounting, advisory, out-of-pocket, or other fees/expenses incurred with respect to the
Transaction.
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(9) Governing Law: This MOU and the Definitive Agreements shall be governed by and construed in
accordance with the laws of the PRC.
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(10) Language: This MOU is written in both the Chinese Language and the English Language. In the
event of any discrepancies between the Chinese and English texts, the Chinese text shall prevail.
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IN WITNESS WHEREOF, the Parties hereto have caused this MOU to be duly executed by their
respective authorized representative as of the date of July ( ), 2009.
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