Industrial and Commercial Bank of China Fixed Asset Loan Agreement
Exhibit 10.11
Contract
Number: 2007
Year Shimen No. 0004
Industrial
and Commercial Bank of China
Fixed
Asset Loan Agreement
Borrower
(Party A): Hunan Zhaoheng Hydropower Co., Ltd.
Domicile
(Address): Power Station Road, Chujiang Township, Shimen County
Legal
Representative: Xxxx Xxx
Lender
(Party B): China Construction Bank Co., Ltd. Xxxxxx Xxxxxx
Domicile
(Address): Chujiang Road, Chujiang Town, Shimen County
Legal
Representative (Person in-Charge): Zidan Xu
1
Table
of Contents
Article
1. Representations and
Warranties of Party A
Article
2. Type of the Loan
Article
3. Purpose of the
Loan
Article
4. Amount and Term of the
Loan
Article
5. Interest Rate and Interest
Calculation
Article
6. Conditions of Grant of the
Loan
Article
7. Grant Plan of the
Loan
Article
8. Capital Source and
Method of Repayment
Article
9. Security
Article
10. Rights and Obligations of Both
Parties
Article
11. Liabilities for Breach of
Contract
Article
12. Effectiveness, Modification,
Rescission and Termination of the Agreement
Article
13. Dispute Settlement
Article
14. Other Matters agreed
Article
15. Appendix
2
Whereas
Party A applies for a loan from Party B and Party B agrees to grant a loan to
Party A for the purpose as specified in Section 3.1 hereunder. To
specify their rights and obligations, Party A and Party B hereby enter into this
Agreement after negotiation in accordance with the Contract Law, General Rules
of Loan and relevant laws and regulations.
Article
1. Representations and Warranties of
Party A
1.1 Party A
is an entity with the qualification of a legal person (or a sub-organization
legally authorized by a legal person) that is set up in accordance with the law
and has right to execute the Agreement;
1.2 The
project that will be constructed using the Loan under this Agreement has been
approved by the related government organizations;
1.3 All
accounting reports and materials for the investigation, evaluation, and
management of the Project that provided by Party A are true, accurate, and
complete.
Article
2. Type of the Loan
2.1 The Loan
under this Agreement is fixed asset loan.
Article
3. Purpose of the
Loan
3.1 The
loan hereunder shall be used for the Sanjiangkou Hydropower
Station Left Bank Expansion Project;
3.2 Party
A shall not change the purpose of the loan hereunder without the written consent
of Party B.
Article
4. Amount and Term of the
Loan
4.1 The
amount of the loan under this Agreement is (in word): Renminbi 160 million and (Arabic
numerals) RMB 160,000,000.00.
(In the event of any discrepancy between the word and Arabic numerals
amount, the word shall prevail; the same applies below);
4.2 The
term of the loan hereunder is 180 months,
from March 23,
2007 to March 23,
2022.
Article
5. Interest Rate and
Interest Calculation
5.1 The
interest of loan hereunder accrues on a daily basis from the date of practical
withdrawal (daily interest = annual interest/360) and settled on monthly
(monthly/ quarterly) basis. The interest settlement day is the 20th of each month (the
20th
of each month/the last month of each quarter). If the 20th day is
non-bank working day, the interest settlement day shall be the following bank
working day. The interest shall be paid up with principal upon maturity of
loan;
3
5.2 The interest rate of
the loan hereunder is calculated in accordance with the way stipulated under
5.2.1:
5.2.1 The
interest rate is a fixed annual rate of 7.11% , which is
unchanged during the term of the Loan;
5.2.2 The
interest rate of the Contract is calculated at BLANK %
(upward/downward) from the benchmark interest rate of the corresponding grade of
the People’s Bank of China. The interest rate will be adjusted every period,
which is BLANK (year/half a
year/quarter/month). The date of interest rate determination for the first
period shall be the effective date of the loan Agreement. The interest rate for
the first period shall be calculated by Party B in accordance with the benchmark
interest rate of the corresponding grade of the People’s Bank of China on the
effective date of the loan Agreement and the floating interest rate agreed by
both Parties, that is the annual rate of BLANK %.
The interest rate determination time for the second or later period is the
corresponding date of the effective date of the loan Agreement. The interest
rate is calculated in accordance with the benchmark interest rate of the
corresponding grade of the People’s Bank of China on the effective date of the
loan Agreement and the floating interest rate agreed by both Parties. If there
is no corresponding date of the effective date in the month of adjustment, the
last date of the month shall be the corresponding date.
Withdrawal
by installment, whatever the time of installments is in a period, the interest
rate is all made according to the rate determined on the effective date of the
loan contract or the corresponding date and adjusted on the corresponding date
of the effective date of the loan contract of next period.
The
corresponding date of the effective date of the loan agreement refers to the
corresponding date a period after the effective date of the loan agreement. For
instance, if the effective date of the loan agreement is May 9 one year,
the corresponding date of the second period (a period is one month) is
June 9 of the year; the corresponding date of the second period (a period
is one quarter) is August 9 of the year; the corresponding date of the second
period (a period is half a year) is November 9 of the year; the corresponding
date of the second period (a period is a year) is May 9 of the next year,
and so on.
5.2.3 Others: the following space is
intentionally left
blank
______________________________________________________________________.
Party B
shall notify Party A in writing within 30 days from the date of change of
interest rate, but whether the notification is delivered shall not affect the
execution of the interest rate;
5.3 In
case the People’s Bank of China adjusts the interest rate and calculation
method, the interest rate shall be conducted subject to the
adjustment.
4
Article
6. Conditions of Grant of the
Loan
6.1 Every
time before the Loan can be granted, Party A has to fulfil the following
conditions:
6.1.1 The
security contract has been executed and taken into effect in accordance with the
law;
6.1.2 The
principal and other related fund of the project that will be built up by the
loan under this Agreement have been fully ready in accordance with the
stipulated time and ratio;
6.1.3 Cost
overrun does not occur or has been resolved by Party A;
6.1.4 The
Project is being contructed in accordance with the planned
progress;
6.1.5 Party
A has conducted the loan grant procedures as stipulated herein;
6.1.6 Party
A does not incur any event of default as stipulated herein;
6.1.7 Party
A has provided other materials relating to the Loan hereunder in accordance with
Party B’s requirement.
Article
7. Grant Plan of the
Loan
7.1 The
grant plan of the Loan under this Agreement shall be executed in accordance with
the Section
7.1.1 of
the following:
7.1.1 Party
A shall collect the Loan in one time on March 23, 2007 and
transfer all the amount to its account opened with Party B;
7.1.2 Party
A shall collect the Loan by installment, and the specific collecting amount and
date are as follows:
7.1.2.1 BLANK Year BLANK Month
BLANK Day, Amount (in
word) BLANK
Yuan (Arabic numerals BLANK
Yuan);
7.1.2.2 BLANK Year BLANK Month
BLANK Day, Amount (in
word) BLANK
Yuan (Arabic numerals BLANK
Yuan);
7.1.2.3 BLANK Year BLANK Month
BLANK Day, Amount (in
word) BLANK
Yuan (Arabic numerals BLANK
Yuan);
7.1.2.4 BLANK Year BLANK Month
BLANK Day, Amount (in
word) BLANK
Yuan (Arabic numerals BLANK
Yuan);
7.1.2.5 BLANK Year BLANK Month
BLANK Day, Amount (in
word) BLANK
Yuan (Arabic numerals BLANK
Yuan);
7.1.3 Other
grant plan: the
following space is intentionally left
blank
5
__________________________________________________________________.
7.2 Party
A shall collect the Loan as specified in Section 7.1 hereunder, or collect
it in advance or postpone BLANK
days with the written consent of Party B for special reasons;
7.3 If
Party A wants to cancel partial or all of the amount that has not been collected
under this Agreement, a written application has to be submitted 30 days in
advance of the withdrawal date, and the written consent of Party is
required;
7.4 The
practical withdrawal and repayment date shall be the date stated on the
indebtedness certificate between Party A and Party B. The indebtedness
certificate or loan collection certificate is the integral part of the
Agreement. Apart from the date, in case of any discrepancy between indebtedness
certificate and the Agreement, the Agreement shall prevail.
Article
8. Capital
Source and Method of Repayment
8.1 Party
A repays the principal and interest of the loan hereunder with the capital from
the sources, including but not limited to:
8.1.1 Sales income of power
generation
;
8.1.2 BLANK
.
8.2 In case of any provision on
the capital source of Party A’s repayment as specified in
any other contracts in which Party A is one party, the provision
shall not affect the fulfillment of repayment obligation under this
Agreement.
Party A, in any case, shall not invoke
Section 8.1 to refuse the fulfillment
of repayment obligation hereunder.
8.3 Party
A shall repay interest on time and in full as specified in the Agreement and
repay the principal as the method listed in Section 8.3.2 as
follows:
8.3.1 One-off
repayment. Party A shall repay all the principal of loan on BLANK Year BLANK Month BLANK
Day;
8.3.2 Repayment
by installment. The amount and date of repayment are as follows:
8.3.2.1 2010 Year 03 Month 23 Day, Amount
(word): five
million Yuan;
(Arabic numerals: 5,000,000
Yuan);
8.3.2.2 2011 Year 03 Month 23 Day, Amount
(word): five
million Yuan;
(Arabic numerals: 5,000,000
Yuan);
8.3.2.3 2012 Year 03 Month 23 Day, Amount
(word): five
million Yuan;
(Arabic numerals: 5,000,000
Yuan);
8.3.2.4 2013 Year 03 Month 23 Day, Amount
(word): five
million Yuan;
(Arabic numerals: 5,000,000
Yuan);
6
8.3.2.5 2014 Year 03 Month 23 Day, Amount
(word): ten
million Yuan;
(Arabic numerals: 10,000,000
Yuan);
(An
additional page could be attached when there are many installments)
(Please
see the attached page)
8.3.3 Other
repayment methods: BLANK
BLANK
.
8.4 For
early repayment, Party A shall apply to Party B 30 days in advance in
writing and obtain the written consent of Party B;
8.5 Party
A shall obtain consent from Party B for early repayment, and shall compensate
the foreseeable income loss and other expenses of Party B. The early
repayment of principal shall be at least BLANK Yuan (word) and
shall be the integral multiple of BLANK Yuan
(word);
8.6 In the event of early
repayment of principal of the Loan, the repayment shall be made in the reversed
order of the repayment plan stipulated in Section 8.3.2
herein.
8.7 Party
A shall deposit sufficient funds for repayment of the principal and interest due
in the account opened with Party B prior to the interest settlement date or
principal repayment date, and authorize Party B to deduct money from the account
on such date.
Article
9. Security
9.1 The
security method of the loan hereunder is: guarantee;
9.2 Party
A shall be obliged to actively assist Party B and procure Party B to enter into
the guarantee contract numbering 2007 Shimen (guarantee) No.
0001 with the guarantor, to specify the detailed matters under the
Agreement;
9.3 In
the event of any change in the security hereunder adverse to the indebtedness
owing to Party B, upon notification of Party B, Party A shall provide Party B
with other security satisfactory to Party B as required by Party B.
Article
10. Rights and
Obligations of Both Parties
10.1 Rights
and Obligations of Party A:
10.1.1 Party
A shall withdraw and use the loan in accordance with the term and purpose as
specified in the Agreement;
10.1.2 Party
A shall obtain consent from Party B for early repayment;
10.1.3 Party
A shall accept voluntarily Party B’s investigation, inquiry, and supervision
over the use of loan under the Agreement;
7
10.1.4 Party
A shall actively cooperate with Party B in supervision, inquiry, and
investigation over its production, operation, project contruction, and financial
condition, and have obligation to provide Party B with the related financial
reports and materials such as income statement and balance sheet;
10.1.5 Party
shall actively support Party B’s participation in the investigation over the
budget estimates, budget, and financial statements of the Project, project
bidding, testing of the finished project, and other related
matters;
10.1.6 Party
A shall repay the principal and interest of the Loan hereunder as stipulated in
the Agreement;
10.1.7 Party
A shall undertake the expenses incurred under the Agreement, including but not
limited to the expenses of notarization, evaluation, appraisal and registration,
etc;
10.1.8 Party
A shall send the receipt of the collection letter or document posted by Party B
within 3 days after the document is received and signed;
10.1.9 In case of contracting, lease, joint
stock restructuring, joint operation, merger, acquisition, joint venture,
division, decrease of registered capital, changes in equity, major assets
transfer and other activities that may impair Party B’s right and interest,
Party A shall notify Party B at
least thirty days in advance and obtain the written consent of Party
B. Otherwise, Party A shall not undertake the above activities until
all the debts are discharged;
10.1.10 Party
A shall notify Party B in writing of any change of its domicile, corresponding
address, business scope, legal representative, and other industrial and
commercial registrations within 7 days after the change;
10.1.11 In
case of any circumstances which threatens the normal operation and seriously
affects the obligation of repayment under this Agreement, including but limited
to material economic disputes, bankruptcy, deteriorated financial position,
Party A shall immediately notify Party B in writing;
10.1.12 In
case of going out of business, dissolution, cessation of production for
rectification, cancellation or revocation of business license, Party A shall
notify Party B within 5 days in writing and ensure repayment of the principal
and interest immediately;
10.2 Rights
and Obligations of Party B:
10.2.1 Asks
Party A to provide all the relevant materials;
10.2.2 Deducts
principal, interest, compound interest, penalty interest and other expenses
which Party A shall pay as specified in the Agreement from the account of Party
A in accordance with the Agreement or the laws and regulations;
10.2.3 If Party A evades the
supervision of Party B, delays the repayment of the principal and interest or
commits other material breaches of contract, Party B shall be entitled to
implement credit sanction, report such situation to the relevant
authority or organization and publicly claim for the repayment through
media;
8
10.2.4 Advances
the Loan in full to Party A on schedule as stipulated herein (except the delay
caused by Party A);
10.2.5 Keeps
confidential the materials provided by Party A concerned information of
liabilities, finance, production, operation, etc., unless otherwise required by
the Agreement, laws and regulations.
Article
11. Liabilities for
Breach of Contract
11.1 Both
Parties shall fulfill the obligations as specified in the Agreement after the
Agreement takes into effect. Any Party who fails to fulfill the obligations
hereunder shall bear the liabilities of breach of contract;
11.2 Should
Party A fail to apply for or withdraw the loan as stipulated in Section 7.1
hereunder, Party B has the right to claim delay damages in accordance with the
interest rate hereunder for each day of delay;
11.3 Should
Party B fail to provide loan as stipulated in Section 7.1 hereunder, Party
B shall pay delay damages in accordance with the interest rate hereunder for
each day of delay;
11.4 Should Party A make early
repayment without the written consent of Party B, Party B shall have the right
to claim interest according to the term and interest rate stipulated hereunder;
11.5 Should Party A fail to repay
the principal and interest under the Agreement on time, Party B has the right to
request for repayment within a specified time. Party A shall authorize
Party B to
deduct all the debts hereunder from the accounts
opened with the
Industrial and Commercial Bank of China and their branches and collect an
additional (30-50%) penalty interest to the overdue loan and
30% (30-50%) compound
interest to the
overdue interests;
In case of foreign exchange
deduction, the deduction shall be subject to the
buy rate which Party B announces on the day of deduction;
11.6 Should
Party A fail to use the loan for the purpose as stipulated in the Agreement,
Party B has the right to cease to issue the Loan, reclaim part or all of the
Loan or terminate the Agreement. Besides, Party B is entitled to claim penalty
interest at a rate of 50% (50-100%) 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, and collect compound interest at the
rate of 50% (50-100%) upward
the original interest rate on the unpaid interest;
11.7 For
the interests Party A fails to repay on time during the term of the Loan, Party
A shall pay the compound interest in accordance with the interest rate
stipulated in the Agreement. After the loan is overdue, the compound interest
shall be calculated according to the interest rate stipulated in
Section 11.5 hereof;
9
11.8 The
heavier penalty shall apply upon simultaneous occurrence of the situations as
specified in Section 11.5 and 11.6 in use of loan. Party B shall not be
simultaneously entitled to two types of penalties;
11.9 In case Party A is involved
in one of the following situations, Party A shall rectify it and take the
remedial measures which Party B is satisfied with
within 7 days after receiving the notification from Party B. Otherwise Party B
shall have the
right to cease
or cancel the Loan that has not been granted to Party A and reclaim part or all of the Loan in advance. For the loan
that could not
be drawn back, penalty is imposed on a daily basis in accordance with overdue
loan interest rate:
11.9.1 providing
Party B with the balance sheet, income statement and other financial materials
which are false or hide material facts;
11.9.2 not
cooperating with or refusing Party B’s supervision over the use
of the Loan and related production, operation and financial
activities;
11.9.3 transferring,
disposal of or threatening to transfer or dispose of the major assets without
the consent of Party B;
11.9.4 the
important part of or all the assets of Party A being held by other creditors or
taken over by trustee, receiver or similar personnel, or the assets are detained
or frozen, which may cause serious losses to Party B;
11.9.5 Contracting,
leasing, joint stock restructure, joint operation, merger, acquisition, joint
venture, division, decrease of registered capital, changes in equity, equity
transfer conducted without the consent of Party B and other events that shall
impair and endanger the rights and benefits of Party B;
11.9.6 Alteration
of such items in the industry and commerce registration such as address,
corresponding address, business scope and legal representative, or major
external investment, which have seriously affected or may affect the
indebtedness owing to Party B;
11.9.7 Major
economic disputes, deteriorated financial situation, etc. which may seriously
affect or endanger the exercise of Party B’s rights; Any other event that may
endanger or cause serious losses to the execution of the creditor’s rights of
Party B under the Agreement;
11.9.8 Any
other event that may endanger or cause serious losses to the exercise of the
creditor’s rights of Party B under the Agreement;
Article
12 Effectiveness, Modification, Rescission and Termination of the
Agreement
12.1
The Agreement shall come into effect after the execution of both parties hereto;
where security is available, it shall become effective from the date when
security contract becomes effective and terminate after all the principal,
interests, compound interest, penalty interest, penalty and other payables are
paid up;
10
12.2 Should Party A be involved
in any situation as below, Party B shall have the right to terminate the
Agreement and
require Party B to return the principal and interest in advance
and compensate losses:
12.2.1 Going out of business,
dissolution,
cessation of production for rectification, cancellation
or revocation of business license;
12.2.2 The security hereunder
changes against the rights of Party B, and Party A fails to provide
new
security as
required by Party B;
12.2.3 Party
A fails to repay the loan on schedule or use the loan for the purpose stipulated
herein, default in
interest or other serious breach of the Agreement;
12.3 In
case Party A wants to extend the loan, it shall submit written application and
the written opinions of guarantor’s consent of providing guarantee continuously
30 days prior to the expiration of the contract. The term of loan shall not be
extended until Party B agrees to extend the Loan after inspection and the
Parties execute an agreement for extension. The loan Agreement shall remain in
force before the Parties hereto execute the extension agreement;
12.4 After
the Agreement takes into effect, any Party shall not modify or terminate in
advance the Agreement unless otherwise specified in the Agreement. The
modification or termination of the Agreement, if required, shall be subject to
the written agreement of both Parties hereto through consultation. The Loan
Agreement shall remain in force before the new written agreement is entered
into;
Article
13. Dispute
Settlement
13.1 Any
dispute arising from execution of the Agreement shall be firstly settled by both
Parties hereto through consultation;
In case
no settlement can be reached through consultation, the disputes shall be
submitted through the method listed under Section
13.1.2:
13.1.1 File
the dispute to BLANK_______for
arbitration;
13.1.2 Bring
a suit before the court in the jurisdiction where Party B
domiciles.
Article
14. Other Matters Agreed
14.1 The following space is
intentionally left blank._________________________
______________________________________________________________________;
14.2 The following space is
intentionally left blank._________________________
______________________________________________________________________;
14.3 The following space is
intentionally left blank._________________________
11
_______________________________________________________________________.
Article
15. Appendix
15.1 The
appendices hereto are an integral part of the Agreement. The Agreement and the
appendices hereto have the equal legal force;
15.2 In
case the day of withdrawal or repayment is not a bank working day during the
performance of the Agreement, it shall be postponed to the following bank
working day;
15.3 The
Agreement is made in triplicate with the
equal legal effect. Each of Party A, Party B and guarantor shall hold
one.
Party
A (Seal): (Seal)
Legal
representative or authorized representative (Signature):
/s/
Xxxx Xxx
March 23,
2007
Party B
(Seal): (Seal)
Person
in-charge (or person in-charge) or authorized representative
(Signature):
/s/
Zidan Xu
March 23, 2007
12
Project
Loan Repayment Schedule of Zhaoheng Hydropower Co., Ltd
|
Year
2010
|
5
million Yuan
|
|
Year
2011
|
5
million Yuan
|
|
Year
2012
|
5
million Yuan
|
|
Year
2013
|
5
million Yuan
|
|
Year
2014
|
10
million Yuan
|
|
Year
2015
|
10
million Yuan
|
|
Year
2016
|
10
million Yuan
|
|
Year
2017
|
10
million Yuan
|
|
Year
2018
|
20
million Yuan
|
|
Year
2019
|
20
million Yuan
|
|
Year
2020
|
20
million Yuan
|
|
Year
2021
|
20
million Yuan
|
|
Year
2022
|
20
million Yuan
|
|
Term:
15 years
|
160
million Yuan
|
13
