Exhibit 10.46
Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
SUPPORT CONTRACT
BETWEEN
AES TIAN FU POWER COMPANY (L) LTD.
AND
CHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.
TABLE OF CONTENTS
Page
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1. Definitions and Principles of Construction.................................1
2. Amount and Terms Of Loans..................................................1
2.1. Loans ..........................................................1
2.2. Notes ..........................................................1
2.3. Interest Payments ..............................................2
2.4. Mandatory Repayments of Principal ..............................2
2.5. Optional Term Loan Prepayments .................................3
2.6. Other Amounts ..................................................3
2.7. Payments to the Arranger; Application of Proceeds ..............3
3. Loans .....................................................................3
3.1. Method of Borrowing; Transfer of Funds .........................3
3.2. Conditions to all Loans ........................................4
3.3. Conditions to First Construction Loan ..........................4
3.4. Conditions to Additional Construction Loans ....................5
3.5. Conditions to the Term Loan ....................................5
4. Representations and Warranties of the Company .............................6
4.1. Corporate Existence and Power ..................................6
4.2. Authorization; Contravention ...................................6
4.3. Binding Effect .................................................6
4.4. Financial Information ..........................................6
4.5. Litigation .....................................................7
5. Covenants of the Company ..................................................7
5.1. Existence ......................................................7
5.2. Notice of Certain Events .......................................7
5.3. Delivery of Financial Statements and Other Reports .............7
5.4. Insurance ......................................................8
5.5. Government Rules and Governmental Approvals ....................8
5.6. Performance of Project Documents ...............................8
5.7. Construction and Operation of the Power Station ................8
5.8. Environmental Compliance .......................................8
5.9. Use of Proceeds ................................................9
5.10. Payment of Taxes and Claims ....................................9
5.11. Event of Loss ..................................................9
5.12. Maintenance of Books and Records; Inspection by the Arranger ...9
5.13. Recording of Financing Documents ...............................9
5.14. Instruments of Further Assurance ...............................9
5.15. Issuance of Additional Debt ....................................9
5.16. Liens .........................................................10
5.17. Nature of Business ............................................10
5.18. Modification of Agreements ....................................10
5.19. Guarantees ....................................................10
5.20. Prohibition on Fundamental Changes ............................10
5.21. Prohibition on Disposition of Assets ..........................11
5.22. Transactions With Affiliates ..................................11
5.23. Power Purchaser's Assignment ..................................11
5.24. Notice to the Arranger ........................................11
6. Events of Default: Remedies .............................................11
6.1. "Event of Default" Defined ....................................11
6.2. Exercise of Remedies ..........................................14
6.3. Collection of Indebtedness by the Arranger;
Deficiency Judgment .........................................14
6.4. Application of Proceeds of Collateral .........................14
7. Intercreditor Arrangements................................................15
7.1. Borrowings and Repayments......................................15
7.2. Pari Passu.....................................................15
7.3. Amendment or Assignment........................................15
8. Miscellaneous ............................................................15
8.1. Benefit of Agreement; Partial Invalidity ......................15
8.2. Governing Law .................................................16
8.3. Friendly Consultations ........................................16
8.4. Arbitration ...................................................16
8.5. Continuing Rights and Obligations .............................16
8.6. Enforcement of Award ..........................................17
8.7. Waiver of Sovereign Immunity Defense ..........................17
8.8. Remedies Cumulative; Delay or Omission Not to Impair Remedies .17
8.9. Amendment or Waiver ...........................................17
8.10. Notices .......................................................17
8.11. No Oral Agreement .............................................18
8.12. Counterparts ..................................................18
8.13. Verification and Approval by the Chengdu SAEC .................18
Annex A DEFINITIONS
Annex B COMMITMENTS
Exhibit 1 Form of Construction Note
Schedule A
Exhibit 2 Form of Term Loan Note
Schedule A
Exhibit 3 Request for Borrowing
This SUPPORT CONTRACT, dated as of August 12, 1996 (the "Contract"),
is between AES Tian Fu Power Company (L) Ltd., a company organized under the
laws of Labuan (the "Arranger"), and Chengdu AES KAIHUA Gas Turbine Power Co.,
Ltd., a Sino-foreign joint venture company established under the laws of the PRC
(the "Company").
RECITALS
WHEREAS, the Company desires to borrow funds to pay for the
construction and operation of the Power Station; and
WHEREAS, the Arranger pursuant to the Joint Venture Contract is
willing, subject to the terms and conditions contained herein, to make loans to
the Company;
NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein, the receipt and sufficiency of which is hereby acknowledged, the
Arranger and the Company hereby agree as follows:
1. Definitions and Principles of Construction. For all purposes of
this Contract, (i) capitalized terms used but not otherwise defined herein shall
have the meanings set forth in Annex A hereto, and (ii) the principles of
construction set forth in Annex A shall apply for purposes of this Contract.
2. Amount and Terms Of Loans.
2.1. Loans.
(a) Construction Loans. The Arranger agrees, subject to and
upon the terms and conditions set forth herein, to make loans to the Company
from time to time on any Business Day during the Construction Period in an
aggregate amount not to exceed at any time outstanding the Arranger's Commitment
(each such loan, a "CONSTRUCTION LOAN"). Each borrowing of Construction Loans
hereunder shall be in an aggregate amount of US$500,000 or an integral multiple
of US$100,000 in excess thereof. Once repaid, Construction Loans may not be
reborrowed.
(b) Term Loan. The Arranger agrees, subject to and upon the
terms and conditions set forth herein, to make a loan to the Company on the
Mandatory Repayment Date in an aggregate amount not to exceed the Arranger's
Commitment (the "Term Loan"). The Term Loan borrowing shall be in an amount
equal to the aggregate outstanding principal amount of Construction Loans plus
accrued and unpaid interest thereon, subject to the limitation in the preceding
sentence. Once prepaid or repaid, Term Loans may not be reborrowed.
2.2. Notes.
(a) The Company's obligation to pay the principal of and
interest on the Construction Loans shall be evidenced by a promissory note
substantially in the form of Exhibit 1 hereto in an amount equal to the
Commitment, completed in accordance with the terms of this Contract and duly
executed, issued and delivered by the Company (the "Construction Loan Note").
(b) The Company's obligation to pay the principal of and
interest on the Term Loan shall be evidenced by a promissory note substantially
in the form of Exhibit 2 hereto, completed in accordance with the terms of this
Contract and duly executed, issued and delivered by the Company (the "Term Loan
Note").
2.3. Interest Payments.
(a) Interest shall accrue on the aggregate unpaid principal
amount of each Construction Loan during each calendar month at a rate per month
equal to [***] (or a pro-rata portion thereof for amounts outstanding during a
portion of the month). Interest on the Construction Loans shall be compounded
monthly, and accrued interest on the outstanding principal amount of the
Construction Loans shall be payable by the Company on the Mandatory Repayment
Date.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
(b) Interest shall accrue on the aggregate unpaid principal
amount of the Term Loan during each quarter at a rate per quarter equal to [***]
(or a pro-rata portion thereof for amounts outstanding during a portion of the
quarter). Interest on the Term Loan shall be compounded quarterly, and accrued
interest on the outstanding principal amount of the Term Loan shall be payable
by the Company on each Term Loan Repayment Date.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
(c) Interest on each Loan shall be computed on the basis of a
360-day year consisting of twelve 30-day months. Interest shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date requested by the Arranger to its bank to transfer the
proceeds of the respective Loan to the Company.
(d) If the Company shall fail to make any payment hereunder or
on the Notes when due, it shall pay on demand interest on such amounts (to the
extent permitted by law) to the date of actual payment (after as well as before
judgment) at a rate per annum equal to the rate provided in Section 2.3 (a) or
(b), as the case may be, plus 2%.
2.4. Mandatory Repayments of Principal.
(a) Principal of the Construction Loans shall be repaid in full
by the Company, together with any outstanding accrued interest thereon, on the
Mandatory Repayment Date.
(b) Principal of the Term Loan shall be repaid by the Company
in 20 consecutive semi-annual installments of equal amounts beginning on the
date occurring six months after the Mandatory Repayment Date and on each date
occurring six calendar months thereafter (each such date, a "Term Loan Repayment
Date"), provided that if any such date is not a Business Day, the relevant Term
Loan Repayment Date shall be the next following Business Day. On the final Term
Loan Repayment Date, all outstanding principal amounts of the Term Loan,
together with any outstanding accrued interest thereon, shall be paid in full to
the Arranger. The Parties shall complete Schedule A to the Term Loan Note to
reflect actual Term Loan Repayment Dates prior to the issuance of the Term Loan
Note.
2.5. Optional Term Loan Prepayments. The Company may, upon at least
five (5) Business Days prior written notice to the Arranger, prepay the Term
Loans, in whole or in part, in an aggregate principal amount of US$250,000 or
integral multiples of US$50,000 in excess thereof, together with all accrued
interest thereon to the date of prepayment. Upon receipt by the Arranger of such
a notice of prepayment in accordance with this section, such notice shall
thereafter not be revocable by the Company. Any such prepayments shall reduce
pro-rata amounts owing on any remaining Term Loan Repayment Dates.
2.6. Other Amounts. All payments of principal, premium, if any, and
interest in respect of the Notes will be made free and clear of, and without
withholding or deduction for, any Withholding Taxes. If any Withholding Taxes
are so imposed, the Company will pay such additional amount ("Additional Company
Amounts") as will result in receipt by the Arranger of such amounts as would
have been received by it had no such Withholding Taxes been imposed.
2.7. Payments to the Arranger; Application of Proceeds. (a) All
payments to the Arranger of interest, principal, Additional Company Amounts and
any other amounts owing hereunder shall be made in Dollars in immediately
available funds and shall be made to a bank account designated by the Arranger
in a written notice to the Company.
(b) Except as provided in Section 6.4, all payments received by
the Arranger hereunder shall be applied, as promptly as possible, in the
following order: (i) first, to the payment of costs and expenses hereunder,
including those from the enforcement of the Contract and the other Financing
Documents, (ii) second, to the payment of Additional Company Amounts, if any,
and accrued but unpaid interest, including default interest, and (iii) third, to
the payment of principal, premium and all other obligations owing under this
Contract and the other Financing Documents.
3. Loans.
3.1. Method of Borrowing; Transfer of Funds.
(a) The Company may request a Loan by making a written request
to the Arranger no less than seven (7) days prior to the date of the proposed
Loan. Each such request shall be in the form of Exhibit 3 hereto, with such
blanks appropriately completed. All such written requests for a Loan by the
Company shall be irrevocable unless the Company provides the Arranger with
written notice of its cancellation of a request no later than two (2) Business
Days prior to the date specified for the making of the Loan.
(b) Subject to the terms and conditions contained in this
Contract, the Arranger shall make Loan amounts available to the Company in
Dollars in immediately available funds in accordance with the Company's
instructions set forth in the relevant request for a Loan.
3.2. Conditions to all Loans. The Arranger's obligation to make any
Loan is subject to performance by the Company of all of its obligations under
this Contract and the fulfillment (or waiver in writing by the Arranger in its
sole discretion) of the following conditions precedent:
(a) receipt by the Arranger of the written request for a Loan
as required by Section 3.1 (a) hereof;
(b) no Default shall have occurred and be continuing hereunder
and no Default under any agreement to which the Company is a party would result
from the making of the Loan or the application of the proceeds therefrom;
(c) the representations and warranties of the Company contained
in this Contract, the Financing Documents and each of the Project Documents
shall be true and correct on as of the date of such Loan;
(d) such Loan will not contravene any provision of law or
regulation of any Governmental Authority;
(e) (i) all Clearances for the Power Station, for the Financing
Documents, and for each of the Project Documents, and (ii) the Liens created by
the Security Documents in the Collateral, on and as of the date of such Loan,
shall be in full force and effect;
(f) receipt by the Arranger of a certificate dated the date of
the Loan, duly executed by an Authorized Officer of the Company, certifying as
to the effect set forth in Section 3.2(b), (c), (d), and (e) hereof; and
(g) the Company shall have duly authorized, executed and
delivered to the Arranger the Security Documents in form and substance
satisfactory to the Arranger;
(h) the shareholders of the Company shall have made their
initial contributions to the registered capital of the Company pursuant to the
terms of the Joint Venture Contract; and
(i) receipt by the Arranger of all such other documents,
instruments, or opinions of counsel it deems necessary or advisable in order to
make the Loans.
3.3. Conditions to First Construction Loan. The Arranger's
obligation to make the first Construction Loan shall, in addition to
satisfaction of the requirements of Section 3.2 hereof, be subject to the
fulfillment (or waiver in writing by the Arranger in its sole discretion) of the
following conditions precedent:
(a) receipt by the Arranger of a duly executed Construction
Loan Note of the Company, dated the date of the making of the first Construction
Loan;
(b) receipt by the Arranger of an opinion of the Company's
counsel, in form and substance satisfactory to the Arranger, with respect to
certain matters relating to the Construction Loan to be indicated by the
Arranger;
(c) receipt by the Arranger of all documents it may request
with respect to (i) the existence of the Company, (ii) the corporate authority
of the Company and the validity of each of the Financing Documents and (iii) any
other matters related thereto, all in form and substance satisfactory to the
Arranger;
(d) receipt by the Arranger of executed copies of all Project
Documents entered into by the Company;
(e) receipt by the Arranger of copies of all required
Clearances for the Power Station, for the Financing Documents and for each of
the Project Documents;
(f) receipt by the Arranger of evidence, in form and substance
satisfactory to the Arranger, that the Company is required to make payment of
Project Costs and that it does not possess the funds, either by way of equity or
debt, to make such payment of Project Costs; and
(g) evidence, in form and substance satisfactory to the
Arranger, that all filings and registrations of each of the Security Documents
have been made and that, as a consequence, the Security Documents create a
legally valid perfected first priority security interest in the Collateral in
favor of the Arranger and the Other Arrangers, securing the Arranger's and the
Other Arrangers' rights under this Contract and the Other Contracts.
3.4. Conditions to Additional Construction Loans. The Arranger's
obligations to make additional Construction Loans shall, in addition to the
satisfaction of the requirements of Section 3.2 hereof, be subject to the
fulfillment (or waiver in writing by the Arranger in its sole discretion) of the
following conditions precedent:
(a) receipt by the Arranger of evidence, in form and substance
satisfactory to the Arranger, that the Company is required to make payment of
Project Costs and that it does not possess the funds, either by way of equity or
debt, to make such payment of Project Costs.
3.5. Conditions to the Term Loan. The Arranger's obligation to make
the Term Loan shall, in addition to satisfaction of the requirements of Section
3.2 hereof, be subject to the fulfillment (or waiver in writing by the Arranger
in its sole discretion) of the following conditions precedent:
(a) receipt by the Arranger of a copy of the Certificate of
Performance Acceptance of the Power Station;
(b) receipt by the Arranger of a duly executed Term Loan Note
of the Company dated the date of the making of the Term Loan;
(c) receipt by the Arranger of an opinion of the Company's
counsel, in form and substance satisfactory to the Arranger, with respect to
certain matters relating to the Term Loan to be indicated by the Arranger; and
(d) receipt by the Arranger of evidence, in form and substance
satisfactory to the Arranger, reconfirming that the Security Documents continue
to create a legally valid perfected first priority security interest and Lien in
the Collateral in favor of the Arranger and the Other Arrangers, securing the
Arranger's and the Other Arrangers' rights under this Contract and the Other
Contracts.
4. Representations and Warranties of the Company.
The Company represents and warrants as follows:
4.1. Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the PRC,
and has all corporate powers and all Clearances required to carry on its
business as presently conducted.
4.2. Authorization; Contravention. The execution, delivery and
performance by the Company of each of the Financing Documents and the
consummation of the transactions contemplated thereby are within the Company's
corporate powers, have been duly authorized by all necessary corporate and joint
venture action, require no further action by or in respect of any Governmental
Authority and do not contravene, or constitute a Default under, any provision of
applicable law or regulation or of any agreement, judgment, order, decree or
other instrument binding upon the Company and will not result in the creation or
imposition of any Lien on any asset of the Company (other than a Lien created by
the Security Documents).
4.3. Binding Effect. This Contract has been, and each of the other
Financing Documents when delivered will have been, duly executed and delivered
by the Company. Upon filing with the Chengdu SAEC, this Contract will be, and
each of the other Financing Documents when delivered will be, the legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms.
4.4. Financial Information. All financial information heretofor
provided by the Company to the Arranger fairly present in conformity with
People's Republic of China Accounting Rules the financial condition of the
Company as of its date.
4.5. Litigation. There is no action, suit, or proceeding pending, or
threatened, against or affecting the Company before any court or arbitrator or
any Governmental Authority.
5. Covenants of the Company.
So long as any Loan shall remain unpaid or the Arranger shall have
any Commitment hereunder, the Company covenants as follows:
5.1. Existence. The Company shall maintain its legal existence as a
Sino-foreign joint venture established under the laws of the PRC.
5.2. Notice of Certain Events. The Company shall give notice to the
Arranger, promptly following an Authorized Officer's learning of the occurrence
thereof, of (a) any Default (other than an immaterial Default that such Person
reasonably anticipates will be cured on or before the seventh Business Day after
an Authorized Officer becomes aware thereof) or any Event of Default,
specifically stating that such event or condition has occurred and describing it
and any action being or proposed to be taken with respect thereto, (b) the
occurrence of an Event of Loss (or threat of an Event of Eminent Domain),
together with the details thereof and the action which the Company is taking or
proposes to take with respect thereto, (c) any action, suit or proceeding by or
before any Governmental Authority, arbitral tribunal or other body which has had
or could reasonably be expected to have a Material Adverse Effect, together with
the details thereof, (d) receipt of any notice from the Power Purchaser of any
circumstance, act or condition which has had or would reasonably be expected to
have a Material Adverse Effect, together with the details thereof and the action
which the Company is taking or proposes to take with respect thereto, (e)
written notice of any material Default by it under, or material breach by it of,
the Security Documents or relating to the Collateral, and (f) any other
circumstance, act or condition which has had or would reasonably be expected to
have a Material Adverse Effect, together with the details thereof and the action
which the Company is taking or proposes to take with respect thereto.
5.3. Delivery of Financial Statements and Other Reports. The Company
shall furnish to the Arranger:
(a) as soon as available and in any event within 120 days after
the end of each of its fiscal years (commencing with the fiscal year ending
December 31, 1996), copies of its audited balance sheet as of the end of such
fiscal year and copies of its audited statements of income and cash flows for
such fiscal year (in each case, in accordance with People's Republic of China
Accounting Rules) setting forth in each case corresponding figures from the
preceding fiscal year, and accompanied by an opinion thereon of a firm of
independent public accountants of recognized international standing;
(b) as soon as available and in any event within 60 days after
the end of each of its first three fiscal quarters, copies of the unaudited
balance sheet of the Company as of the end of such quarter and copies of its
unaudited statements of income and cash flow for such quarter and fiscal year
through such quarter (in each case, in accordance with People's Republic of
China Accounting Rules) setting forth in each case, in comparative form,
corresponding unaudited figures from the preceding fiscal year, prepared
consistently with the annual statements described in Section 5.3(a) (but subject
to year end adjustments and such other adjustments as are applicable and, in
each case, consistent with People's Republic of China Accounting Rules and
necessary for meaningful comparison), and accompanied by a certificate of an
Authorized Officer of the Company to the effect that such financial statements
fairly represent its financial condition and results of operations at and as of
their respective dates, subject to such adjustments; and
(c) a copy of each annual operating budget and fuel management
plan, if any, as soon as available, but in any event not later than 30 days
prior to the beginning of the period covered by such annual operating budget and
fuel management plan, respectively.
Notwithstanding the foregoing, the Arranger shall be under no
obligation to review or to take any action with respect to the information or
documents provided to it pursuant to this Section 5.3.
5.4. Insurance. The Company shall procure at its own expense and
maintain in full force and effect at all times insurance in form and substance
acceptable to the Arranger.
5.5. Government Rules and Governmental Approvals. The Company shall
comply with all Government Rules applicable to it and the Power Station, except
where the failure to do so could not have a Material Adverse Effect.
5.6. Performance of Project Documents. The Company shall perform all
of its covenants, agreements and obligations under each of the Project Documents
to which it is a party, except where the failure to do so could not have a
Material Adverse Effect. The Company shall take such reasonable steps as may be
necessary to enforce the material obligations of the other parties to the
Project Documents.
5.7. Construction and Operation of the Power Station. The Company
shall (a) construct, operate, and maintain the Power Station, or cause the Power
Station to be constructed, operated, and maintained, in accordance with the
terms of the Project Documents and prudent operating practices and (b) promptly
invoice, and use commercially reasonable efforts to collect, all payments owed
by the Power Purchaser.
5.8. Environmental Compliance. The Company shall comply with all
Environmental Laws applicable to it and to the Power Station, except where
failure to do so could not have a Material Adverse Effect. The Company shall use
reasonable efforts to prevent any physical condition from existing on any
property owned or operated by the Company or on any property that may be
impacted by the Company's operations which could give rise to any remedial
obligation under any Environmental Laws or which could result in any liability
to any third party claiming damage to person or property as a result or
consequence of said physical condition, in each case which could have a Material
Adverse Effect.
5.9. Use of Proceeds. The Company shall use the proceeds from the
Construction Loans solely to pay for Project Costs. The Company shall use the
proceeds from the Term Loan solely to repay the Construction Loans, including
accrued interest thereon.
5.10. Payment of Taxes and Claims. The Company shall duly pay and
discharge or cause to be paid or discharged prior to delinquency all taxes,
assessments and governmental and other charges lawfully levied and assessed upon
it, the Power Station and the Collateral, or upon the franchises, earnings and
business of it, the Power Station and the Collateral, including all penalties
and interest thereon, other than any such taxes, assessments, or charges that
are the subject of a Good Faith Contest. The Company shall promptly pay or cause
to be paid any valid, final judgment enforcing any such tax, assessment, charge,
levy or claim and cause the same to be satisfied of record unless such judgment
is the subject of a Good Faith Contest.
5.11. Event of Loss. If an Event of Loss shall occur with respect to
any portion of the Collateral, the Company shall, to the extent commercially
reasonable, diligently pursue all of its rights to compensation against the
applicable Governmental Authority or any other Person with respect to such Event
of Loss, and deposit in a trust account subject to the control of the Arranger
and the Other Arrangers all Loss Proceeds received in respect of such Event of
Loss (after deducting all reasonable costs and expenses incurred by it in
pursuing such compensation against such Governmental Authority or other Person).
5.12. Maintenance of Books and Records; Inspection by the Arranger.
The Company shall keep proper books and records of all its business and
financial affairs in accordance with People's Republic of China Accounting Rules
and shall, upon the reasonable written request of the Arranger, permit
representatives of the Arranger to inspect its properties (including the Power
Station), books, records, reports and other papers and to take copies and
extracts therefrom.
5.13. Recording of Financing Documents. The Company will cause the
Financing Documents at all times to be duly registered, recorded or filed in
such manner and in such places as may in the reasonable opinion of counsel to
the Arranger be required by applicable law in order to preserve fully and
maintain the Liens intended to be created under the Financing Documents to the
extent attainable under applicable law. The Company shall from time to time
execute or cause to be executed any and all further instruments reasonably
required to maintain and preserve the Liens intended to be created under the
Financing Documents.
5.14. Instruments of Further Assurance. The Company will, upon the
Arranger's reasonable request, execute and deliver such further instruments and
do such further acts as may be necessary or proper to carry out more effectually
the purposes of this Contract.
5.15. Issuance of Additional Debt. The Company shall not incur or
suffer to exist any Indebtedness, except for Permitted Indebtedness.
5.16. Liens. The Company shall not create or suffer to exist or
permit any Lien upon or with respect to any of its properties except for (a)
Liens securing Indebtedness arising under this Contract, the other Financing
Documents or any Project Document, (b) mechanics' or materialmen's Liens that
are subject to a Good Faith Contest, (c) Liens for taxes not yet due and payable
or taxes that are the subject of a Good Faith Contest, (d) Permitted Liens, and
(e) Liens relating to Permitted Indebtedness. Prior to granting any Lien on any
Collateral in connection with the incurrence of Permitted Indebtedness permitted
pursuant to clause (e) above, the Company shall furnish to the Arranger an
opinion of counsel reasonably satisfactory to the Arranger stating that, in the
opinion of such counsel, such action has been taken as is necessary under
applicable law to maintain the Lien intended to be created under the Financing
Documents or stating that no such action is necessary to maintain such Lien. All
references herein to maintaining a Lien include, but are not limited to,
maintaining the intended priority of such Lien to the extent attainable under
applicable law.
5.17. Nature of Business. The Company shall not engage in any
business other than the ownership and operation of the Power Station as
contemplated or allowed by the Project Documents and the Financing Documents.
5.18. Modification of Agreements. (a) The Company shall not
terminate or amend, modify or waive any provision under any of the Project
Documents to which it is a party or assignee unless the Arranger shall have
received a certificate of an Authorized Officer of the Company certifying that
(i) such termination, amendment, modification or waiver could not reasonably be
expected to have a Material Adverse Effect taken as a whole either currently or
in the future, and (ii) such termination, amendment, modification or waiver
could not reasonably be expected to materially increase the likelihood of an
occurrence of a future Material Adverse Effect.
(b) The Company shall not terminate, amend, modify or waive any
rights under the Letter(s) of Undertaking; provided, however, that the Company
may confirm the continued validity of such Letters of Undertaking, obtain new
letters with provisions no less favorable to the Company than the existing
letters or extend the effectiveness of such letters.
5.19. Guarantees. Except as contemplated by the Project Documents,
the Company shall not contingently or otherwise be or become liable, directly or
indirectly, in connection with any Guarantee except (a) indemnities with respect
to unfilled materialmen's, mechanics', workmen's, repairmen's, employees' or
other similar Liens arising in the course of construction or in the ordinary
course of operations or maintenance of the Power Station, (b) indemnities to
Governmental Authorities relating to any expenses incurred that are incidental
to obtaining easements for the benefit of the Power Station and (c) Guarantees
of Permitted Indebtedness the proceeds of which result in a direct benefit to
Company.
5.20. Prohibition on Fundamental Changes. The Company shall not
enter into any transaction of merger or consolidation, change it's form of
organization, liquidate or dissolve itself (or suffer any liquidation or
dissolution). Except as contemplated in the Project Documents, the Company shall
not purchase or otherwise acquire all or substantially all of the assets of any
Person.
5.21. Prohibition on Disposition of Assets. Except as contemplated
by the Project Documents or permitted pursuant to the Financing Documents, the
Company shall not lease (as lessor) or dispose of, sell or transfer (as
transferor) any property or assets material to the operation of the Power
Station, except (a) in the ordinary course of business to the extent that such
property is worn out or no longer useful or usable in connection with the
operation of the Power Station or (b) to the extent such property is replaced by
property having a similar purpose and having a fair market value equal to or
greater than the fair market value of the property being leased or transferred
and upon which the Arranger has an equivalent Lien.
5.22. Transactions With Affiliates. Other than the Project Documents
and the Financing Documents, the Company shall not enter into any transactions
with Affiliates, unless the terms of such transactions are no less favorable to
the Company than terms which the Company could obtain in comparable transactions
entered into on an arm's-length basis with a Person which is not an Affiliate of
the Company.
5.23. Power Purchaser's Assignment. The Company shall not, without
the prior written consent of the Arranger, approve any assignment of the Power
Purchaser's obligations under the Power Purchase Contract.
5.24. Notice to the Arranger. The Company shall notify the Arranger
in writing of any discrepancies between the Services (as defined in the
Construction Contract) and all requirements of the Power Purchaser of which the
Company is aware.
6. Events of Default: Remedies.
6.1. "Event of Default" Defined. The term "Event of Default" means
any of the following events (whatever the reason for such event and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to or in compliance with any applicable Government Rule) and any such event
shall continue to be an Event of Default if and for so long as it shall not have
been remedied;
(a) failure by the Company to pay principal of or premium, if
any, or interest on a Loan for a period of five days after any such amount shall
have become due and payable, whether by scheduled maturity, required repayment
or redemption, acceleration or otherwise;
(b) failure by the Company to perform in any material respect
any covenant of the Company in this Contract (other than the default referred to
in Section 6.1(a)) or in any other Financing Document following notice from the
Arranger, and such failure remains unremedied for 30 days;
(c) any representation, warranty or certification made or
deemed made in this Contract or any other Financing Document by the Company
shall prove to have been incorrect in any material respect as of the time made,
confirmed or furnished and remains incorrect in any material respect 30 days
after the Company becomes aware that it is incorrect;
(d) the Company shall:
(i) apply for or consent to the appointment of a
receiver, custodian, trustee, liquidator or equivalent thereof
in the applicable jurisdiction of it or of all or a
substantial part of its assets (other than in connection with
a restructuring for tax purposes) which (i) has no Material
Adverse Effect and (ii) does not effect the validity or
enforceability of this Contract, any other Financing Document
or any Project Document),
(ii) file a voluntary petition in bankruptcy, or admit in
writing its inability to pay it debts as they come due (other
than in connection with a restructuring for tax purposes)
which (i) has no Material Adverse Effect and (ii) does not
effect the validity or enforceability of this Contract, any
other Financing Document or any Project Document,
(iii) make a general assignment for the benefit of
creditors,
(iv) file a petition or an answer seeking reorganization
or arrangement with creditors or to take advantage of any
insolvency law,
(v) file an answer admitting the material allegations of,
or consent to, or default in answering, a petition filed
against it in any bankruptcy, reorganization or insolvency
proceeding, or
(vi) be adjudicated bankrupt or insolvent, or be the
subject of an order, judgment or decree entered by any court
of competent jurisdiction approving a petition seeking
reorganization of such Person or appointing a receiver,
trustee, liquidator or equivalent thereof in the applicable
jurisdiction of such Person or of all or a substantial part of
its assets, and such order, judgment or decree shall continue
unstayed and in effect for a period of 60 days;
(e) failure by the Company to pay, discharge, or provide full
reserves against any final and nonappealable judgment by a court of competent
jurisdiction against it for the payment of money in excess of US$1,000,000 (or
the equivalent thereof in any other currency) within 60 days from the date of
entry thereof;
(f) the failure of the Company to make any payment when due
(subject to any applicable grace period) in respect of any of its Indebtedness
in an aggregate amount exceeding US$1,000,000 (or the equivalent thereof in any
other currency), which has been incurred and which remains outstanding (other
than any amount due under or pursuant to the Financing Documents);
(g) the Power Purchase Contract or any Financing Document
ceases for any reason to be valid and binding and in full force and effect prior
to its termination in accordance with its terms;
(h) any Project Document (other than the Power Purchase
Contract) ceases for any reason to be valid and binding and in full force and
effect prior to its termination in accordance with its terms unless the Arranger
shall have received a certificate of an Authorized Officer of the Company to the
effect that such event will not have a Material Adverse Effect;
(i) at least 90 days shall have elapsed since any Clearance
necessary to construct or operate the Power Station shall have been revoked or
withdrawn, if such revocation or withdrawal could have a Material Adverse
Effect;
(j) any grant of a Lien contained in the Financing Documents
ceases to be effective to grant a perfected Lien on any of the Collateral or
ceases to be effective to grant a perfected Lien with the priority purported to
be created thereby, to the extent attainable under the law governing such
documents, in favor of the Arranger in the Collateral;
(k) the Company abandons the Project;
(l) any party to a Project Document fails to perform any of its
material obligations thereunder or makes any material misrepresentations
thereunder, which failure or misrepresentation (i) is not cured within the later
of (A) the cure period set forth in the relevant Project Document or (B) 30 days
after the Company's or the Arranger's actual knowledge of such failure or
misrepresentation and (ii) could have a Material Adverse Effect on the Company;
(m) the Power Purchaser is liquidated, except for liquidation
at the end of the term of the Power Purchase Contract;
(n) Project Completion (as defined in the Construction
Contract) shall not have occurred by January 1, 1998;
(o) a Financing Event of Default shall have occurred and be
continuing;
(p) borrowings and repayments under the Other Contracts are not
made in accordance with Section 7.1; or
(q) a sale of the Collateral or any part thereof occurs without
the consent of the Arranger.
6.2. Exercise of Remedies.
(a) If an Event of Default shall occur and be continuing, then,
(i) the Arranger, by notice to the Borrower and the Other Arrangers, may declare
its obligation to make Loans to be terminated, whereupon the same shall
forthwith terminate, and (ii) the Arranger, by notice to the Borrower and the
Other Arrangers, may declare all of the Notes, all interest thereon and all
other amounts payable under this Contract to be forthwith due and payable,
whereupon all of the Notes, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Company; provided, however, that if an Event of Default of the kind described in
Section 6.1 (d) shall occur, (i) the obligation of the Arranger to make Loans
shall automatically be terminated and (ii) all of the Notes, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Company.
(b) In case one or more of the Events of Default shall have
occurred and shall be continuing, then the Arranger may also exercise all rights
and remedies which it may have under any of the Financing Documents as provided
therein, in addition to all other rights and remedies available to the Arranger
at law or in equity. The Arranger shall be also entitled to proceed forthwith to
protect and enforce its rights under this Contract by a suit or suits in equity
or at law, either for the specific performance of any covenant or agreement
contained herein, or in aid of the execution of any power herein granted, either
for interest or for principal, or for both, or for the enforcement of any other
appropriate legal or equitable remedy, as the Arranger, being advised by
counsel, shall deem most effectual in support of any of its rights or duties
hereunder.
6.3. Collection of Indebtedness by the Arranger; Deficiency
Judgment. The Arranger shall be entitled to recover judgment against the Company
and any other obligor on the Notes and the Loans for the whole amount so due and
unpaid either before, after or during the pendency of any proceedings for the
enforcement of any Lien or other provisions of the Financing Documents, and in
the case of a sale of the Collateral and the application of the proceeds of such
sale, the Arranger, in its own name, shall be entitled to enforce payment of,
and to receive, all amounts then remaining due and unpaid upon the Notes, for
the benefit of the holders thereof, and shall be entitled to recover judgment
for any portion of the same remaining unpaid, with interest as aforesaid. No
recovery of any such judgment by the Arranger, and no levy of any execution
under any such judgment upon any property of the Company, shall affect or impair
the Lien of the Financing Documents, or any rights, powers or remedies of the
Arranger hereunder or under any other Financing Document.
6.4. Application of Proceeds of Collateral. The proceeds of any sale
of the Collateral, or any part thereof, together with any other sums then held
by the Arranger as part of the Collateral, shall be applied as promptly as
possible as follows: (i) first, to the payment of the costs and expenses of such
sale, including the compensation of the Arranger and its agents and counsel, and
of all charges, expenses, liabilities and advances incurred or made by the
Arranger without gross negligence or bad faith; (ii) second, to the payment of
Additional Company Amounts hereunder and additional company amounts under the
Other Contracts, if any, and of the interest due and unpaid hereunder and under
the Other Contracts, including default interest; (iii) third, to the payment of
principal, premium, if any, and all other obligations owing hereunder and under
the Financing Documents; and (iv) fourth, the surplus, if any, shall be paid to
the Company, its successors or assigns.
7. Intercreditor Arrangements.
7.1. Borrowings and Repayments. All borrowings hereunder shall be
made simultaneously with borrowings made under the Other Contracts, and each
borrowing hereunder shall be in a percentage of the Commitment equal to the
percentage each simultaneous borrowing of loans under each Other Contract bears
to the commitment under each such Other Contract; provided that the foregoing
shall only apply to borrowings under the Huaxi Support Contract to the extent
that the aggregate principal amount of Loans made under this Contract and loans
made under the CNAC Support Contract exceeds U.S.$17,880,000. All repayments or
prepayments of Loans (including principal, interest and other amounts) hereunder
shall be made simultaneously with prepayments or repayments under the Other
Contracts, and any such repayment or prepayment under this Contract shall be in
a percentage of Loans outstanding equal to the percentage each simultaneous
repayment or prepayment of loans under each Other Contract bears to the loans
outstanding under each such Other Contract, in each case using the Dollar/RMB
exchange rate, if applicable, provided herein and in the Other Contracts.
7.2. Pari Passu. All rights of the Arranger hereunder with respect
to the Loans and the Collateral shall be on a pari passu basis with the rights
of the Other Arrangers under the Other Contracts with respect to the Other
Arrangers' loans and the Collateral.
7.3. Amendment or Assignment. This Contract may not be amended,
changed, terminated or discharged without the prior written consent of the Other
Arrangers. Neither this Contract nor the rights or obligations hereunder may be
assigned or transferred by either Party without the prior written consent of the
Other Arrangers.
8. Miscellaneous.
8.1. Benefit of Agreement; Partial Invalidity. This Contract shall
be binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the Parties hereto. The Company may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Arranger. If any provision of this Contract, or the application
of any provision to any Person or circumstance, shall be held invalid or
unenforceable, the remainder of this Contract, or the application of such
provision to Persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be affected thereby.
8.2. Governing Law. The rights of the Parties hereto and the
validity, interpretation and implementation of this Contract and the Notes shall
be governed by and construed and interpreted in accordance with the laws of the
People's Republic of China.
8.3. Friendly Consultations. In the event of any dispute,
controversy, or claim arising out of or relating to this Contract or other
Financing Documents, or the breach, termination or invalidity hereof or thereof,
the disputing Party shall provide written notice thereof to the other Party. The
Parties shall attempt in the first instance to resolve such dispute through
friendly consultations.
8.4. Arbitration. (a) If the dispute is not resolved by friendly
consultation within 60 days after notice of a dispute is given by a Party, then
any Party may submit the dispute for final binding arbitration by the China
International Economic and Trade Arbitration Commission in accordance with its
rules then in force. The arbitration proceedings shall be held in Mandarin
Chinese and English. The site of the arbitration shall be Beijing. Should there
exist a conflict between the rules of the China International Economic and Trade
Arbitration Commission and the provisions of this Contract, the provisions of
this Contract will prevail.
(b) There shall be three (3) arbitrators. All three arbitrators
shall speak both Mandarin Chinese and English. The Company and the Arranger
shall each appoint (1) arbitrator within thirty (30) days of the date of the
request to initiate arbitration. Within thirty (30) days from the appointment of
the second of the Parties' arbitrators, the Parties' arbitrators shall appoint a
third arbitrator who shall, in addition to his duties as arbitrator, act as
chairman of the arbitration tribunal. Arbitrators not appointed within the time
limits set forth in this paragraph (b) shall be appointed by the Secretary
General of the International Center for Settlement of Investment Disputes. The
Parties hereby waive and renounce any right to appeal the award of the
arbitration panel or to have any question of law or fact referred to a court or
other forum in the People's Republic of China except in furtherance of enforcing
the award of the arbitration panel.
(c) The award of the arbitration panel shall be issued not
later than sixty days following the close of hearings by the panel. The
arbitration award shall be final and binding on the Parties and shall not be
subject to appeal to any court. The Parties agree to be bound thereby and to act
accordingly.
(d) The costs of arbitration shall be borne by each Party as
designated in the arbitration award.
8.5. Continuing Rights and Obligations. When any dispute occurs and
is the subject of friendly consultations or arbitration, the Parties shall
continue to exercise their remaining respective rights, and fulfill their
remaining respective obligations, under this Contract and the other Financing
Documents.
8.6. Enforcement of Award. The Parties acknowledge that any award
rendered pursuant to Section 8.4 hereof shall be governed by the 1958 Convention
on the Recognition and Enforcement of Foreign Arbitration Awards of the United
Nations. The award shall be enforceable in any court that has jurisdiction over
the losing Party or over the property of the losing Party.
8.7. Waiver of Sovereign Immunity Defense. In any arbitration
proceeding, any legal proceeding to enforce any arbitration award and in any
legal action between the Parties pursuant to or relating to this Contract or the
other Financing Documents, each Party expressly waives the defense of sovereign
immunity and any other defense based on the fact or allegation that it is an
agency or instrumentality of a sovereign state.
8.8. Remedies Cumulative; Delay or Omission Not to Impair Remedies.
No delay or omission of the Arranger in exercising any right or remedy arising
upon the happening of any Event of Default, and no course of dealing between the
Company, on the one hand, and the Arranger on the other hand, shall impair any
right or remedy for, or shall be construed to be a waiver of, any such Event of
Default or an acquiescence therein; nor shall any single or partial exercise of
any right or remedy, under this Contract or under any other Financing Document,
preclude any other exercise thereof or the exercise of any other right or remedy
hereunder or thereunder. To the fullest extent permitted by Government Rule, the
rights and remedies herein and in the Financing Documents are cumulative and not
exclusive of any rights or remedies which the Arranger would otherwise have.
Remedies may be exercised in whatever order the Arranger or its designee may
elect. Any rights and remedies granted to or otherwise available to the Arranger
may be exercised by the Arranger or any Person or Persons designated in writing
by the Arranger. No notice to or demand on the Company shall entitle such Person
to any further notice or demand in similar circumstances or constitute a waiver
of the rights of the Arranger to any other action in any circumstances without
notice or demand.
8.9. Amendment or Waiver. This Contract and the terms hereof may not
be amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing signed by each of the
Parties hereto.
8.10. Notices. Any notices to the Arranger by the Company under any
provision of this Contract shall be sufficiently given if in writing and served
personally upon an Authorized Officer of the Arranger or delivered via facsimile
transmission to facsimile number: (86) (10) 508-9628 with electronic and
telephonic confirmation to the Arranger, Attention: Jeff Safford, facsimile
number: (85) (2) 530-1673 or at such other address as may be designated for that
purpose in a notice delivered to the Company by the Arranger. Any notice to the
Company by the Arranger under any provision of this Contract shall be
sufficiently given if served personally upon an Authorized Officer of the
Company or delivered via facsimile transmission to facsimile number: (86) (10)
6508-9628 with electronic or telephonic confirmation to Attention: Paul T.
Hanrahan, or at such other address as may be designated for that purpose in a
notice delivered to the Arranger by the Company.
8.11. No Oral Agreement. This Contract represents the entire
understanding of the parties and supersedes all prior undertakings and
agreements with respect thereto, whether written or oral.
8.12. Counterparts. This Contract may be executed in one or more
counterparts each of which shall be deemed an original and all of which shall be
deemed one and the same Contract.
8.13. Verification and Approval by the Chengdu SAEC. The repayment
of the principal and payment of interest pursuant to this Contract shall be
verified and approved by the Chengdu SAEC.
IN WITNESS WHEREOF, and intending to be legally bound, the parties
hereto have caused their duly authorized officers to execute and deliver this
Contract as of the date first above written.
CHENGDU AES KAIHUA GAS
TURBINE POWER CO., LTD.
By:[Signature Illegible]
---------------------
Name:
Title:
AES TIAN FU POWER
COMPANY (L) LTD.
By:[Signature Illegible]
---------------------
Name:
Title:
Agreed as to Section 6.4 and Section 7:
CHINA NATIONAL AERO-ENGINE
CORPORATION
By:[Signature Illegible]
--------------------------------
Name:
Title:
CHENGDU HUAXI ELECTRIC POWER
SHAREHOLDING (GROUP) COMPANY LTD.
By:[Signature Illegible]
--------------------------------
Name:
Title:
Annex A
to the Contract
DEFINITIONS
"ADDITIONAL COMPANY AMOUNTS" has the meaning set forth in Section
2.6 of the Contract.
"AFFILIATE" of any designated Person means any other Person which,
directly or indirectly, controls or is controlled by or is under common control
with such designated Person.
"ARRANGER" has the meaning provided in the preamble to this
Contract.
"AUTHORIZED OFFICER" means, with respect to any Person, the
president, any vice president, the treasurer, or any assistant treasurer of such
Person, or any other Person granted the relevant authority in writing by the
board of directors or management committee, as applicable, of such Person.
"BUSINESS DAY" means any day on which commercial banks are not
authorized or required to close in the City of New York, New York and Beijing,
PRC.
"CERTIFICATE OF PERFORMANCE ACCEPTANCE" has the meaning given such
term in the Construction Contract.
"CLEARANCE" means any authorization, consent, clearance, approval,
license, ruling, permit, exemption, filing or registration by or with (except
any filing relating to the perfection of security interests), or variance of or
from any Governmental Authority.
"CNAC SUPPORT CONTRACT" means the Support Contract, dated the date
hereof, between the Company China National Aero-Engine Corporation as arranger
thereunder.
"COLLATERAL" means, collectively, all property and assets with
respect to which a Lien is granted under the Security Documents.
"COMMENCEMENT DATE" has the meaning given such term in the
Construction Contract.
"COMMITMENT" of the Arranger means, for each type of Loan, the
amount set forth opposite the Arranger's name on Annex B.
"COMPANY" has the meaning provided in the preamble to this Contract.
"CONSTRUCTION CONTRACT" means the Contract for Construction Services
between the Company and China National Aero-Engine Corporation dated as of
- ---------, 1996.
"CONSTRUCTION LOAN" has the meaning provided in Section 2.1(a).
"CONSTRUCTION LOAN NOTE" has the meaning provided in Section 2.2(a).
"CONSTRUCTION PERIOD" means the period of time commencing on the
Commencement Date and ending on the Mandatory Repayment Date.
"DEFAULT" means, with respect to any document, any event which, with
the giving of notice or the passing of time, or both, or the fulfillment of any
other applicable condition, would become an event of default under such
document.
"DOLLARS", "$" or US$" means any coin or currency of the United
States of America which is legal tender for the payment of public and private
debts.
"ENVIRONMENTAL LAWS" means any laws, rules, regulations, and other
legal requirements of any Governmental Authority, foreign or domestic,
pertaining to the release of materials into or protection of the environment,
including all such legal requirements pertaining to human health and safety.
"EVENT OF DEFAULT" has the meaning provided in Section 6.1.
"EVENT OF EMINENT DOMAIN" means any compulsory transfer or taking
(including by condemnation, confiscation, seizure or requisition of title or use
or transfer under threat of compulsory transfer or taking) of all or any
material part of the Power Station or the Collateral by any Governmental
Authority.
"EVENT OF LOSS" means (i) an event that causes all or a portion of
the Power Station or the Collateral to be damaged, destroyed or rendered unfit
for normal use for any reason or (ii) the occurrence of an Event of Eminent
Domain.
"FINANCING DOCUMENTS" means the Contract, the Notes, the Security
Documents and the Other Contracts.
"FINANCING EVENT OF DEFAULT" means an "Event of Default" under any
Financing Document.
"FUEL SUPPLY CONTRACT" means the Gas Purchase and Supply Contract,
dated -----------, 1996 between the Company and Chengdu Huachuan Petroleum &
Natural Gas Exploration and Development Company for the long term supply of
natural gas to the Power Station.
"GOOD FAITH CONTEST" means the contest of an item if: (i) the item
is diligently contested in good faith by appropriate proceedings timely
instituted and (ii) the failure to pay or comply with the contested item during
the period of such contest could not reasonably be expected to have a Material
Adverse Effect.
"GOVERNMENT RULE" means any constitution, law, regulation,
ordinance, rule, directive, judgment, administrative practice, order, writ,
injunction or decree of or by any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any governmental authority or
judicial, regulatory or administrative body, agency or instrumentality of any
country or political subdivision thereof exercising jurisdiction over the Power
Station, the Company, the Arranger or any party to a Project Document or
Financing Document.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing in any manner the
payment or performance of any Indebtedness or other obligation of any other
Person.
"GUARANTEED COMPLETION DATE" has the meaning given such term in the
Construction Contract.
"HUAXI SUPPORT CONTRACT" means the Support Contract, dated the date
hereof, between the Company and Chengdu Huaxi Electric Power Shareholder (Group)
Company Ltd. as arranger thereunder.
"INDEBTEDNESS" means, for any Person, at any date, without
duplication (i) obligations created, issued or incurred by such Person for
borrowed money; (ii) obligations of such Person to pay the deferred purchase or
acquisition price of property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business; (iii) Indebtedness of others secured by a Lien
(other than a Permitted Encumbrance) on the property of such Person; (iv)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person (except to the extent such letters of credit or similar
instruments are described in any of the Financing Documents or the Project
Documents (including performance bonds)); (v) capital lease obligations of such
Person; and (vi) Indebtedness of others Guaranteed by such Person.
"INDEMNIFICATION CONTRACT" means the Indemnification Contract dated
- ---------, 1996 between the Company and Chengdu Huaxi Electric Power
Shareholdering (Group) Company Ltd.
"INTERCONNECTION CONTRACT" means the Interconnection and Dispatch
Contract, dated as of --------, 1996, between Sichuan Power Dispatch Bureau and
the Company.
"JOINT VENTURE CONTRACT" means the Cooperative Joint Venture
Contract, dated November 28, 1995, among Chengdu Huaxi Electric Power
Shareholding (Group) Company Ltd., China National Aero-Engine Corporation, and
AES China Generating Company Limited.
"LAND CONTRACT" means the State-Owned Land Use Rights Contract to be
entered into between the Company and ----------------- State Land Bureau with
respect to the use of land located at the Site.
"LETTER(S) OF UNDERTAKING" means the letter(s) of undertaking from
government entities stating that they will render all necessary support to the
Power Purchaser so that the Power Purchaser can perform its obligations under
the Power Purchase Contract, including without limitation (i) the Undertaking
Letter of the Chengdu City Economic Commission dated ----------, 1996; (ii) the
Undertaking Letter of the Chengdu City Commodity Price Control Bureau dated
- ----------, 1996 and (iii) the Undertaking Letter of the Chengdu Foreign
Economic and Trade Commission dated ----------, 1996.
"LIEN" means, with respect to any property, any mortgage, lien,
pledge, charge, lease, easement, servitude, security interest, assignment or
encumbrance of any kind on or with respect to such property.
"LOAN" means either a Construction Loan or the Term Loan and "Loans"
means collectively the Construction Loans and the Term Loan.
"LOSS PROCEEDS" means all net proceeds or compensation received in
respect of any Event of Loss.
"MANDATORY REPAYMENT DATE" means the earlier of (i) date the Company
delivers the Certificate of Performance Acceptance to the contractor under the
Construction Contract and (ii) the Guaranteed Completion Date; provided,
however, that if such date is not a Business Day, the Mandatory Repayment Date
shall occur on the next following Business Day.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
financial position, results of operations or business prospects, taken as a
whole, of the Company, including, without limitation, a material adverse effect
on (i) the commercial operation of the Power Station, (ii) the ability of the
Company to perform any of its material obligations under the Contract, the
Project Documents or the Financing Documents, (iii) the validity or priority of
the Liens on any of the Collateral, (iv) the repayment of either the
Construction Loans or the Term Loan, as the case may be, or (v) the validity and
enforceability of any of the Financing Documents or the Project Documents.
"NOTE" means either the Construction Loan Note or the Term Loan
Note, and "Notes" means collectively the Construction Loan Note and the Term
Loan Note.
"OTHER CONTRACTS" means the CNAC Support Contract and the Huaxi
Support Contract.
"OTHER ARRANGERS" means China National Aero-Engine Corporation and
Chengdu Huaxi Electric Power Shareholding (Group) Company Ltd., acting as
arrangers under the Other Contracts.
"PARTY" means each of the Arranger and the Company.
PEOPLE'S REPUBLIC OF CHINA ACCOUNTING RULES" means the Rules of the
People's Republic of China on accounting for Chinese Foreign Joint Venture
Enterprises and other relevant rules and regulations of the People's Republic of
China.
"PERMITTED INDEBTEDNESS" means, for any Person: (i) Indebtedness
incurred under the Financing Documents; (ii) Indebtedness arising under the
Project Documents; (iii) trade accounts payable (other than for (a) borrowed
money and operating lease obligations or (b) the purchase of equipment with a
value, individually or in the aggregate, in excess of US$1,000,000) arising, and
accrued expenses incurred, in the ordinary course of business, and (iv) other
Indebtedness of such Person not to exceed in the aggregate US$500,000 or the
equivalent thereof.
"PERMITTED LIENS" means (i) Liens specifically permitted or required
by or created by any of the Financing Documents or the Project Documents; (ii)
Liens expressly subordinated to the Liens created by the Financing Documents and
subordinated in right of payment to the Loans; (iii) Liens for taxes,
assessments or governmental charges not due and delinquent or due, but subject
to a Good Faith Contest; (iv) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business or that are the subject of a Good Faith Contest; (v) easements,
rights-of-way, reservations, restrictions, covenants, and other similar
encumbrances affecting any property subject to the Liens of any of the Security
Documents, granted in the ordinary course of business, which do not individually
or in the aggregate have a Material Adverse Effect; and (vi) attachment,
judgment and other similar Liens arising in connection with court proceedings
that are the subject of a Good Faith Contest.
"PERSON" or "PERSON" means any individual, sole proprietorship,
corporation, partnership, joint venture, limited liability company, trust,
unincorporated association, institution, government authority or any other
entity.
"POWER PURCHASER" means the Chengdu Huaxi Power Company (Group)
Limited, a company organized under the laws of the PRC.
"POWER PURCHASE CONTRACT" means the Power Purchase Contract, dated
- --------, 1996, between the Company and Power Purchaser.
"POWER STATION" means the 1x50 MW natural gas fired power plant, to
be constructed in Jintang County, Sichuan Province, the PRC, as more fully
described in Appendix A to the Construction Contract.
"PRC" or "CHINA" means the People's Republic of China.
"PRICE ADJUSTMENT CONTRACT" means the Electric Tariff Adjustment
Method for Chengdu AES Kaihua Gas Turbine Power Company Limited dated as of
- ---------, 1996 between the Power Purchaser and the Company.
"PROJECT DOCUMENTS" means the Joint Venture Contract, the Power
Purchase Contract, the Construction Contract, Fuel Supply Contract, the
Indemnification Contract, the Land Contract, the Letter(s) of Undertaking, the
Interconnection Contract, the Supplemental Interconnection Contract, the Price
Adjustment Contract, any contract or agreement entered into in substitution for
the foregoing and any other contract or letter or instrument entered into by the
Company with respect to the Power Station.
"PROJECT COSTS" means all costs and expenses paid, incurred or to be
incurred by the Company in connection with the development, design,
construction, financing, start-up, ownership and operation of the Power Station,
including, without limitation, (i) all construction costs of the Power Station,
including all amounts payable under the Construction Contract, (ii) initial
spare parts, start-up, and operator mobilization costs, and working capital
requirements, (iii) development fees and development costs recoveries, (iv)
costs related to any of the Loans or the loans under the Other Contracts, (v)
related legal and other transaction and financing costs, (vi) insurance
premiums, (vii) costs of Site, (viii) operating and maintenance expenses, (ix)
fees and expenses payable to the Arranger and the Other Arrangers, (x) initial
working capital and (xi) all other Power Station related costs and expenses for
the construction and financing of the Power Station.
"RMB" or "RENMINBI" means Renminbi yuan, the lawful currency of the
PRC.
"SECURITY DOCUMENTS" means the Assignment Contract to be entered
into among the Arranger, the Other Arrangers and the Company.
"SITE" means, in the aggregate, the land subject to the Land
Contract.
"SUPPLEMENTAL INTERCONNECTION CONTRACT" means the Supplemental
Interconnection and Dispatch Contract dated ---------, 1996 between the Company
and the Sichwan Power Dispatch Bureau.
"TERM LOAN" has the meaning provided in Section 2.1(b).
"TERM LOAN NOTE" has the meaning provided in Section 2.2(b).
"TERM LOAN REPAYMENT DATES" has the meaning provided in Section
2.4(b).
"UNITED STATES" or "U.S." means all states, commonwealths,
territories and possessions of the United States of America.
"WITHHOLDING TAXES" means any present or future withholding or
deduction for, any present or future withholding taxes imposed by the PRC or
Labuan or any Governmental Authority within the PRC or Labuan.
(a) Principles of Construction. Unless the context otherwise requires:
(i) reference to any statute or statutory provision shall include
any amendment, modification or reenactment of, any legislative
provisions substituted for and all legislation and statutory
instruments issued under, such statute or statutory provisions;
(ii) words defined as denoting the singular shall include the
plural and vice versa;
(iii) references denoting individuals shall include corporations,
associations, trustees, instrumentalities and partnerships, and vice
versa;
(iv) words denoting any gender shall include all genders;
(v) references to a Section, Schedule, Exhibit or party shall be
construed as references to a Section, Schedule, Exhibit or party to
the document in which such reference is made;
(vi) references to any document, lease, contract or other
agreement of any nature shall, as appropriate, include or be construed
as references to such document, lease, contract or other agreement as
amended, modified, extended, renewed, restated, supplemented or
replaced from time to time;
(vii) references to any party in any document, deed or agreement
shall include its successors and permitted assignees;
(viii) headings used in any document are for convenience only and
shall be disregarded in construing such document; and
(ix) the words "include", "includes" or "including" are not
limiting.
Annex B
to the Contract
COMMITMENTS
COMMITMENT
----------
Construction Loans US$------
Term Loan US$------
Exhibit 1
to the Contract
Form of Construction Note
[Date]
[Location]
US$-------------
FOR VALUE RECEIVED, Chengdu AES KAIHUA Gas Turbine Power Co.,
Ltd. (the "Company") hereby promises to pay to the order of AES Tian Fu Power
Company (L) Ltd., a company organized under the laws of Labuan (the "Arranger"),
the aggregate unpaid principal amount of all Construction Loans (as defined in
the Contract referred to below) not exceeding in the aggregate the principal sum
of -------------------- (U.S.$------).
All Construction Loans made by the Arranger to the Company and
all repayments of the principal thereof shall be recorded by the Arranger on the
Schedule attached hereto.
This Note shall be repaid in full on the Mandatory Repayment
Date (as such term is defined in the Contract).
This Note evidences the obligations of the Company under, and
is referred to in, the Support Contract, dated as of -------------, between the
Company and the Arranger (as from time to time in effect, the "Contract"), and
is entitled to the benefits thereof.
The Company also promises to pay interest on the unpaid
principal amount hereof from the date hereof until paid at the rates and at the
times provided in the Contract.
Principal of, and premium, if any, and interest on, this Note
shall be payable in immediately available funds in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, in the manner provided in the Contract.
This Note is secured by the Security Documents referred to in
the Contract and is entitled to the benefits thereof.
In case an Event of Default (as defined in the Contract) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Contract.
The Company hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE PEOPLE'S REPUBLIC OF CHINA.
CHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.
By:-------------------------------
Name:
Title:
Schedule A
to Construction
Loan Note
AMOUNT PRINCIPAL UNPAID
DATE BORROWED REPAID BALANCE
---- -------- ------ -------
Exhibit 2
to the Contract
Form of Term Loan Note
[Date]
[Location]
US$----------------
FOR VALUE RECEIVED, Chengdu AES KAIHUA Gas Turbine Power Co., Ltd. (the
"Company") hereby promises to pay to the order of AES Tian Fu Power Company (L)
Ltd., a company organized under the laws of Labuan (the "Arranger"), the
aggregate the principal sum of ------------------- (U.S.$------).
The amounts and dates of the repayment of this Note are as indicated on
the attached Schedule A.
This Note evidences the obligations of the Company under, and is
referred to in, the Support Contract, dated as of --, 1996, between the Company
and the Arranger (as from time to time in effect, the "Contract"), and is
entitled to the benefits thereof.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid at the rates and at the times
provided in the Contract.
Principal of, and premium, if any, and interest on, this Note shall be
payable in immediately available funds in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, in the manner provided in the Contract.
This Note is secured by the Security Documents referred to in the
Contract and is entitled to the benefits thereof.
In case an Event of Default (as defined in the Contract) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Contract.
The Company hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE PEOPLE'S REPUBLIC OF CHINA.
CHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.
By:-----------------------------
Name:
Title:
Schedule A
to Term Loan Note
Amortization Schedule for Term Loan Note
YEAR MONTH PRINCIPAL REPAYMENT SCHEDULE
U.S.$
[ to be completed upon issuance of the Note ]
Exhibit 3
to the Contract
Request for Borrowing
[Date]
AES Tian Fu Power Company (L) Ltd.
Gentlemen:
The undersigned, Chengdu AES KAIHUA Gas Turbine Power Co.,
Ltd., refers to the Support Contract, dated as of ------------, 1996 (as amended
from time to time, the "Contract" the terms defined therein being used herein as
therein defined), among the undersigned and you, and hereby requests, pursuant
to Section 3.1 of the Contract, that a borrowing be made under the Contract, and
in that connection sets forth below the information relating to such borrowing
(the "Proposed Borrowing") as required by Section 3.1 of the Contract:
(i) The Business Day of the Proposed Borrowing is --, 19--.
(ii) The Proposed Borrowing is to consist of [a Construction
Loan in an aggregate principal amount equal to $---] [a Term Loan in an
aggregate principal amount equal to $---].
(iii) The name and account number of the bank to which funds
are to be transferred is ----.
Very truly yours,
CHENGDU AES KAIHUA GAS TURBINE
POWER CO., LTD.
By:--------------------------
Name:
Title: