MEMORANDUM OF UNDERSTANDING
By and Between
Sinohydro Corporation Limited
And
TECSA SA
Austral Construcciones SA
On the Bidding and Construction in EPCOM Basis
of the Kirchner and Cepernic Hydropower Projects
July31*, 2012 \
2)
Page I-Total 7 PagesMEMORANDUM OF UNDERSTANDING
‘This Memorandum of Understanding (hereinafter referred to as the "MOU")
is made and entered into on the 31" of July 2012 by and between:
Sinohydro Corporation Limited. a company duly constituted and existing
under the laws of the People’s Republic of China, having its Principal office
at No.22 Chegongzhuang West Rd, Beijing 100048, China (hereinafter
referred to as “Sinohydro”, which expression shall where the context
admits include its successors and assigns)
And
IECSA S.A., a company duly constituted and existing under the laws of
Argentina, having its Principle office at Manuela Saenz 323, 8 Floor, Ciudad
Autonoma de Buenos Aires, Argentina (hereinafter referred to as "IECSA”.
which expression shall where the context admits include its successors
and assigns)
And
Austral Construcciones SA, a company duly constituted and existing under
the laws of Argentina, having its Principle office at Av. J.Gregores 290, Rio
Gallegos, Argentina (hereinafter referred to as “Austral”, which
expression shall where the context admits include its successors and
assigns)
Sinohydro hereinafter referred to individually as "Party A" and IBCSA and
Austral are hereinafter referred as “Party B”, “Party C” respectively and
collectively as the "Parties").
Whereas’
a. The Government of Argentina desires to increase its generation
capacity through the development named as of the Kirchner and
Cepernic Hydropower Projects in Santa Cruz Province (hereinafter
referred to as the “Project” as a whole);
b. The Project may be awarded either by a public selection proceeding of
a Bidding Process (the “Bidding") or a private selection proceeding of a
Government\e Government Process ("G to G”)
Page 2- Total 7 Pagesc. IECSA and Austral are the well-known contractors with good
experiences and reputation in Argentina and has strong public relation
thereof:
4, Sinohydro is the largest professional stated-owned construction
company with its achievements of over 65% of medium & mega-size
completed hydropower stations in China, and completed over 20
hydropower schemes in Asia, Africa, Latin America, and has
successfully assisted many foreign governments and authorities in
arranging funds from the China for some medium and mega hydropower
projects in Africa. Asia and Latin-America, ete.
. Both Parties expressed their interests in working together to jointly
participate in the development and construction of this Project.
Now therefore it is hereby agreed as follows:
1, Both Parties have agreed to associate themselves as one integrated
Joint Venture without scope of work allocation for the specific purpos
of jointly preparing and submitting the tender for the Contract for thi
Project and jointly executing the Contract if awarded to the Joint
Venture.
The name of Joint Venture is Sinohydro ~ IECSA - Austral Joint
Venture (hereinafter referred to as the “Joint Venture").
3. The participating interests/shares of the Parties in the Joint Venture
are as follows:
Party A: Sinohydro 60% (Sixty Percent), acting as leading partner
Party B: IECSA 20% (Twenty Percent)
Party C: Austral 20% (Twenty Percent)
It is agreed by all Parties that the abovementioned percentage of each
Party's interest/share and the terms of this MOU, including the Contract
awarded by the Employer, shall be adjusted or/and amended subject to
the specific requirements of obtaining funds from the Chinese financial
banks and institutes for this Project.
The Parties shall share the rights and obligations, risks, costs and
expenses, losses and profits arising out of or in any way connected
with the Contract and the performance of the Project, and shall
Page 3-Total 7 Pages
\Wparticipate in the provision of working capitals, in any issue or
procurement of sureties, bonds or guarantees and the required
indemnities in the ownership of goods jointly acquired in connection
with the Contract, in any and all rights, duties and liabilities arising out
of this Agreement, in the above respective proportions, except as
otherwise provided for in this MOU.
Each Party shall bear its own costs and expenses incurred for the
preparation and submission of the Tender, contract negotiations and
any other activities prior to si
ing the Contact for this Project.
The actual expenses incurred for consulting services by third parties
shall be reimbursed and paid by all the Parties in proportion to their
participating Interests/shares in the Joint Venture. provided that such
expenses shall have been approved in writing and in advance by all the
Parties.
Prior to submission of the proposal in the Bidding or “G to G", all
Parties shall enter into a comprehensive Joint Venture Agreement on
basis of the principles set out in this MOU and the requirements of the
bidding documents issued by the Employer. In that sense, prior to
submission of the Tender, all decisions related to the Project shall be
taken unanimously by the Parties.
Parties shall make joint efforts to assist the Government of Argentina
and/or its authorities in applying and securing from the Chinese banks
and financing institutes funds required for the development and
construction of this Project.
No Party shall, however, have a claim against any other Party arising
out of a failure for the financing settlement either from the Chinese
banks or other financing institutes.
Parties shall provide to the other Party previous tender and their
previous bidding documents including but not limited to technical and
financial documents, and relevant design proposal and drawings for
this Project before, so as to facilitate the Joint Venture to prepare and
complete their tender documents: provided that such documents and
drawings are not subject to confidentiality obligations with third
parties. \
V7 q
Page 4-Total 7 Pages
a10.
®
‘The Parties agree that by entering into this MOU it will be necessary to
provide each other with certain confidential information relating to the
Project provided that no party, acting reasonably, shall be obliged to
disclose to any other third party documentation relating to the Project
not intended for release outside such Party's organization other than
its own advisors, consultants, agents, bankers and/or governmental
agencies.
The confidentiality obligations and undertakings set out in this MOU do
not apply to information which is:
1) _at the time of disclosure to the other Party, in the public domain or
subsequently comes into the public domain other than by reason of
a breach of this MOU: or
2) already lawfully in the other Party's possession on a
non-confidential basis prior to its disclosure or which is known to
the other Party before the date the information is disclosed.
The Parties acknowledge and agree that their confidentiality
obligations and undertakings under this MOU shall be continuing and in
particular shall survive for a period of two (2) years after the
termination of this MOU.
No Party shall, without prior written consent or authorization in each
case from the Parties concerned create obligations, assume obligations,
accept commitments, incur debts or waive rights for and on behalf of
any other Party or /and this Joint Venture.
This MOU shall be governed by and construed in accordance with the
laws of France.
Any dispute. controversy or claim arising out of or relating to this MOU,
or the breach, termination or invalidity thereof. shall be settled by the
Paris International Arbitration Centre (“PIAC”) in accordance with the
UNCITRAL Arbitration Rules as at present in force. The arbitration
shall be managed by PIAC in accordance with its practice. rules and
regulations. The number of arbitrators shall be three, one of which
shall be appointed as the chief arbitrator or presiding arbitrator, which
the appointing authority shall be the Chairman of PIAC and the
language to be used in the arbitral proceedings shall be English. \Q
age S-Total 7 PagesThe arbitration award shall be final and binding upon all Parties and
consequently neither Party shall attempt to file appeal with or seek
re-judgment from courts under any jurisdiction except for the sole
purpose of applying for enforcement of the arbitration award.
11. Any communication of documents given to the other party shall be in
writing and shall be deemed to have been duly delivered to the party to
which it is addressed as follows:
(Mr. Luis Bonfanti Mr. Sun Xiao (Mr, Carles Pistin
TBCSA SA. Sinohydro Corporation Limited Austral Construcciones S.A.
Pho #54 11 6315 1508 Ph. $5 10 5898 4974/ Phi + 5111 4328 6680
5838 4919
Fay! +54 11 5819 3866, Foxit 86 10 8896 0141 Fox + 54 11 4925 4484
Enuil thonfanti@grupoods.comat — Eynaitsunxiav@sinohydro.com Email enrlos pistant@austratsa.com.ar
Add’ Manuela Stenz 223, 8" floor, Add: Room G10, No.22, Add: Corahelas 242, 5 floor. Buenos
Buenos Aires, Argentina Chegongchusng West Rd, Alves, Argentina
Haidian Distiet, Being. China
12. This MOU shall become binding and enforceable upon signature
thereof by all Parties and shall terminate on the earliest to occur of the
following events:
1) the proposal for the Project is successful and a new agreement
therein is entered whereby superseding this MOU:
2) final rejection of the proposal by the Employer,
3), the Project is cancelled by the Employer:
4) the Parties mutually agree to withdraw from this MOU:
Upon such termination. no Party shall have any claims against the
other(s).
13. The Parties will be exclusive partners to each other for this Project.
Therefore each Party guarantees to the other Parties that neither any
of its controlled companies, subsidiaries. associated company nor
parent companies shall individually or jointly with others submit a
separate reposal for the execution of the Project. nor part thereof, nor
De \ posta aes {
4)enter into any agreement with any company. consortium, joint venture
or other organization which is competing with or attempting to compete
with the Joint Venture or the Parties with respect to the tender. the bid,
the contract and the works,
14, During negotiation of the Joint Venture Agreement set forth in article 5.
the Parties shall consider the possibility that any Party shall have a
first right of preference before third parties for undertaking all or part
of the Works related to the Project that the Joint Venture decides to
subcontract, provided that such a right of preference is exercised on
equal technical and economic basis as to the ones offered by such third
parties,
‘The MOU is prepared in English, and three originals, each company holds
one copy.
Party A Party B
Signature ap Signature:
> %
\ ity
Name? Mr. TIAN Haihua Name: Mr. Javier\Sanchez Caballero
Ms. Alejandya E, Kademian
Company: Sinohydro Corporation Limited Company: IECSA
Party C
Signature a /
2
Name: Mr. Mendoza, Sétfio
Company: Austral Construcciones SA
Page 7-Total 7 Pages