TERM LOAN FACILITY AGREEMENT
Execution
Dated 22 November 20
10
as
Borrower
and
CHINA
DEVELOPMENT BANK CORPORATION HONG KONG BRANCH
as
Lender
USD35,000,000
and RMB100,000,000
XXXX
& XXXX
0/X.,
Xxxxxxxxx Xxxxx
Xxxxxxx,
Xxxx Xxxx
Tel.:
(000) 0000 0000
Fax:
(000) 0000 0000
Ref.:
710110036/CR/JL
HRBN -
Term Loan Facility Agreement
CONTENTS
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CLAUSE
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PAGE
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1.
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DEFINITIONS
AND INTERPRETATION
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1
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2.
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THE
FACILITY
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8
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3.
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PURPOSE
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9
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4.
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CONDITIONS
OF UTILISATION
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9
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5.
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UTILISATION
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9
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6.
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REPAYMENT
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10
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7.
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PREPAYMENT
AND CANCELLATION
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10
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8.
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INTEREST
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12
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9.
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INTEREST
PERIODS
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13
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10.
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CHANGES
TO THE CALCULATION OF INTEREST
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13
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11.
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FEES
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14
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12.
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TAX
GROSS UP AND INDEMNITIES
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14
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13.
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INCREASED
COSTS
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16
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14.
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MITIGATION
BY THE LENDER
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17
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15.
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OTHER
INDEMNITIES
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18
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16.
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COSTS
AND EXPENSES
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19
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17.
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REPESENTATIONS
AND WARRANTIES
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19
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18.
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UNDERTAKINGS
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19
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19.
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EVENTS
OF XXXXXXX
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00
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00.
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CHANGES
TO THE PARTIES
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20
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21.
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DISCLOSURE
OF INFORMATION
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21
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22.
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PAYMENT
MECHANICS
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21
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23.
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SET-OFF
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23
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24.
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NOTICES
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23
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25.
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CALCULATIONS
AND CERTIFICATES
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24
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26.
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PARTIAL
INVALIDITY
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24
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27.
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REMEDIES
AND WAIVERS
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24
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28.
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AMENDMENTS
AND WAIVERS
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24
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29.
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COUNTERPARTS
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24
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30.
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GOVERNING
LAW
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24
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31.
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ENFORCEMENT
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24
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SCHEDULE
1 COMMITMENTS
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26
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SCHEDULE
2 CONDITIONS PRECENDENT
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27
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SCHEDULE
3 UTILISATION REQUEST
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30
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SCHEDULE
4 REPRESENTATIONS AND WARRANTIES
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31
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SCHEDULE
5 UNDERTAKINGS
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34
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SCHEDULE
6 EVENTS OF DEFAULT
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39
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SCHEDULE
7 DEBT SERVICE ACCOUNT
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42
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EXECUTION
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43
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- i
-
THIS AGREEMENT is dated 22
November 2010 and made between:
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1
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HARBIN ELECTRIC, INC., a
limited liability company incorporated under the laws of the State of
Nevada with its principal place of business at Xx. 0 Xx Xxxx Xx Xx, Xx
Ping Lu Xx Xxxxx Qu, Xxxxxx Xxx Fa Qu, Harbin, People's Republic of China
150060 as borrower (the "Borrower");
and
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2
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CHINA DEVELOPMENT BANK
CORPORATION HONG KONG BRANCH
( )
of Suite 3307- 15, 33/F., One International Finance Centre, Xx. 0 Xxxxxxx
Xxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx as lender (the "Lender").
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IT IS AGREED as
follows:
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1.
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DEFINITIONS
AND INTERPRETATION
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1.1
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Definitions
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In this
Agreement:
"Authorised Person" means a
person duly authorised to act on behalf of any of the Obligors, as the case may
be, and any permitted attorney-in-fact or delegate of such person.
"Availability Period" means the
period six (6) months from and including the date of this
Agreement.
"Available Facility" means, in
relation to a Facility, at any time the Lender's Commitment under that
Facility
minus:
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(a)
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the
aggregate amount of any outstanding Loans under that Facility;
and
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(b)
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in
relation to any proposed Utilisation, the aggregate amount of any Loan
that is due to be made under that Facility on or before the proposed
Utilisation Date.
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"Baring Asia" means Baring
Private Equity Asia Group Limited.
"Break Costs" means the amount
(if any) by which:
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(a)
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the
interest which the Lender should have received pursuant to the terms of
this Agreement for the period from the date of receipt of all or any part
of the principal amount of a Loan or Unpaid Sum to the last day of the
current Interest Period in respect of that Loan or Unpaid Sum, had the
principal amount or Unpaid Sum received been paid on the last day of that
Interest Period;
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exceeds:
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(b)
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the
amount of interest which the Lender would be able to obtain by placing an
amount equal to the principal amount or Unpaid Sum received by it on
deposit with a leading bank in the Relevant Interbank Market for a period
starting on the business day following receipt or recovery and ending on
the last day of the current
Interest Period.
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"Commitment" means Facility A
Commitment or Facility B Commitment; and "Commitments" means both of
them.
"Common Stock" means any stock
of any class of the Borrower which has no preference in respect of dividends or
of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Borrower and which is not subject to redemption
by the Borrower.
"Consortium Agreement" means a
consortium agreement dated 10 October 20 10 between Baring Asia and the Share
Pledgor.
"Debt Service Account" has the
meaning ascribed to it in Schedule 7 (Debt Service
Account).
"Default Notice" means a notice
issued in accordance with this Agreement by the Lender to the Borrower notifying
the Borrower of the occurrence of an Event of Default.
"Event of Default" means any
event or circumstance specified as such in Schedule 6 (Events of
Default).
"Facility" means Facility A or
Facility B; and " Facilities" means both of
them.
"Facility A" means the US
Dollar term loan facility made available under this Agreement as described in
Clause 2 (The
Facility).
"Facility A Commitment" means
the amount under the heading "Facility A Commitment" in Schedule 1 (Commitments) to the extent
not cancelled or reduced by the Lender under this Agreement.
"Facility A Margin" means three
per cent. (3%) per annum.
"Facility A Loan" means, as the
context requires, a loan made or to be made under Facility A or the principal
amount outstanding at any time of that loan.
"Facility B" means the RMB term
loan facility made available under this Agreement as described in Clause 2
(The
Facility).
"Facility B Commitment" means
the amount under the heading "Facility B Commitment" in Schedule 1 (Commitments) to the extent
not cancelled or reduced by the Lender under this Agreement.
"Facility B Margin" means two
and a half per cent. (2.5%) per annum.
"Facility B Loan" means, as the
context requires, a loan made or to be made under Facility B or the principal
amount outstanding at any time of that loan.
"Finance Documents" means the
followings:-
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(a)
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this
Agreement;
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(b)
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the
Security Documents; and
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(c)
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any
other document or agreement designated in writing as such by the Borrower
and the Lender.
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"Financial Indebtedness" means
any indebtedness for or in respect of:
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(a)
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moneys
borrowed;
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(b)
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any
amount raised by acceptance under any acceptance credit
facility;
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(c)
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any
amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock or any similar
instrument;
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(d)
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the
amount of any liability in respect of any lease or hire purchase contract
which would, in accordance with the general applicable accounting
standards, be treated as a finance or capital
lease;
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(e)
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receivables
sold or discounted (other than any receivables to the extent they are sold
on a non-recourse basis);
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(f)
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any
amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a
borrowing;
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2
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(g)
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any
derivative transaction entered into in connection with protection against
or benefit from fluctuation in any rate or price (and, when calculating
the value of any derivative transaction, only the marked to market value
shall be taken into account);
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(h)
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any
counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by
a bank or financial institution;
and
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(i)
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the
amount of any liability in respect of any guarantee or indemnity for any
of the items referred to in paragraphs (a) to (h)
above.
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"Final Maturity Date" means the
date falling thirty-six (36) months after the first Utilisation
Date.
"GAAP" means United States
Generally Accepted Accounting Principles.
"Group" means the Borrower and
its subsidiaries from time to time.
"Group Companies" means the
members of the Group; and "Group Company" means each of
them.
"Interest Payment Date" means
the last day of each Interest Period.
"Interest Period" means, in
relation to a Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in
relation to an Unpaid Sum, each period determined in accordance with Clause 8.3
(Default
interest).
"LIBOR" means, in relation to
any Loan:
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(a)
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the
applicable Screen Rate; or
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(b)
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if
no Screen Rate is available for US Dollars for the Interest Period of that
Loan, the arithmetic mean of the rates (rounded upwards to four decimal
places) quoted by the Reference Banks to leading banks in the London
interbank market (as supplied to the Lender at its
request);
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as of
11:00am (London time) on the Quotation Day for which an interest rate is to be
determined for the offering of deposits in US Dollars and for a period of
comparable to the Interest Period for that Loan.
"Loan" means a Facility A Loan
or a Facility B Loan.
"Margin" means in relation to a
Facility A Loan, Facility A Margin and in relation to a Facility B Loan,
Facility B Margin.
"Material Adverse Change" means
any event or circumstance that has or could reasonably be expected to have a
material adverse effect.
"Obligors" means the Borrower,
the Share Pledgor and any other person (other than the Lender) who is a party to
a Finance Document; and "Obligor" means any of
them.
"Original Financial Statements"
means the audited and consolidated financial statements of the Group for the
financial year ended 3 1 December 2009.
"Party" means a party to this
Agreement.
"Permitted Holders" means the
Share Pledgor and its estate, spouse, ancestors and lineal descendants, the
legal representatives of any of the foregoing and the trustees of any bona fide
trusts of which the foregoing are the sole beneficiaries or the grantors, or any
entity of which the foregoing beneficially own, individually or collectively
with any of the foregoing, at least 80% of the total voting power of the voting
shares of such entity.
3
"Permitted Security Interest"
means
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(i)
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the
Security Interests created pursuant to the Security
Documents;
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(ii)
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any
Security Interest arising or constituted under any retention of title or
similar provision in a supplier's or vendor's terms and conditions of
supply or sale of goods or materials acquired by the Borrower in the
ordinary course of business and provided no default exists in respect of
the obligations which the Security Interest
secures;
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(iii)
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any
Security Interest for any Taxes which are not yet due or remain payable
without penalty (other than those which are currently being contested in
good faith by appropriate proceedings and in respect of which the Borrower
has made adequate reserve (being not less than an amount which would
be required to be reserved in accordance with GAAP)) provided always that
no document has been filed, registered, recorded or lodged with any court,
registry, office, or regional, provincial, governmental or other authority
by any person for the purpose of perfecting or preserving such Security
Interest or the priority thereof;
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(iv)
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any
Security Interest arising or constituted by any lease, rental, hire,
conditional sale or similar agreement entered into by the Borrower
relating to the assets acquired by it in the ordinary course of business
(and not for the primary purpose of raising finance) provided always that
the entry into and performance of such arrangements does not contravene
any provision of any of the Finance
Documents;
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(v)
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any
Security Interest on property acquired by the Borrower after the date
hereof which existed on such property at the time of its acquisition (but
which was not created in anticipation thereof) provided that the terms
thereof and the acquisition of such property do not contravene any
provision of any of the Finance Documents and the principal amount secured
thereby has not been increased in contemplation of, or since the
acquisition of that property by the
Borrower;
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(vi)
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any
netting or set-off arrangement entered into by the Borrower in the
ordinary course of its banking arrangements for the purpose of netting
debit and credit balances.
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"Potential Event of Default"
means any event or circumstance specified in Schedule 6 (Events of Defaults) which
would (with the expiry of a grace period, the giving of notice, the making of
any determination under the Finance Documents or any combination of any of the
foregoing) be an Event of Default.
"PRC" means the People's
Republic of China excluding, for the purpose of this Agreement, Hong
Kong.
"Quotation Day" means, in
relation to any currency for any period for which an interest rate is to be
determined, the day as determined by the Lender in accordance with market
practice in the Relevant Interbank Market (and if quotation would normally be
given by leading banks in the Relevant Interbank Market on more than one day,
the Quotation Day will be the last of those days).
"Reference Banks" means such
banks as may be appointed by the Lender.
"Related Business" means any
designing, developing, manufacturing, supplying, and servicing of electric
motors including linear motors, specialty micro-motors, and industrial rotary
motors.
"Release Date" means the date
on which the Lender has certified that the Secured Indebtedness has been
irrevocably and unconditionally paid and discharged in full.
"Relevant Interbank Market"
means in relation to US Dollars, the London interbank market and, in relation to
RMB, the Shanghai interbank market.
"Repayment Dates" means the
dates falling twenty-four (24) and thirty-six (36) months respectively after the
first Utilisation Date (irrespective of the Facility under which the first
Utilisation is made); and "Repayment Date" means each of
them.
4
"Screen Rate"
means:
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(a)
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in
relation to LIBOR, the British Bankers, Association Interest Settlement
Rate for the relevant currency and period;
and
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(b)
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in
relation to SHIBOR, the Shanghai Interbank Offered Rate calculated by
National Interbank Funding Center for the relevant currency and
period'
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displayed
on the appropriate page of the (in relation to LIBOR) Reuters screen and (in
relation to SHIBOR) the website xxx.xxxxxx.xxx. If the agreed page is replaced
or service ceases to be available, the Lender may specify another page or
service displaying the appropriate rate after consultation with the
Borrower.
"Security Documents"
means
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(a)
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the
Share Pledge Agreement; and
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(b)
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any
other security documents for the time being or from time to time
constituting security for the Secured Indebtedness and any other document
which may be designated a Security Document with the consent of the
Borrower
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and shall
include all notices, acknowledgements or other documents required pursuant
thereto or in connection therewith and reference to "Security Document" includes
reference to any one thereof.
"Secured Indebtedness" means
all present and future indebtedness, obligations and liability (whether actual
or contingent and whether owed on a joint and several basis, or in any capacity
whatsoever) of the Obligors to the Lender under the Finance
Documents.
"Security Interest" means (i) a
mortgage, charge, pledge, lien or other encumbrance securing any obligation of
any person, (ii) any arrangement under which money or claims to, or for the
benefit of, a bank or other account may be applied, set-off or made subject to a
combination of accounts so as to effect payment of sums owed or payable to any
person or (iii) any other type of preferential arrangement (including title
transfer and retention arrangements) having a similar effect.
"Share Pledge Agreement" means
a pledge and security agreement entered or to be entered into between the Share
Pledgor as pledgor and the Lender as pledgee in respect of the Common Stock
including all amendments attached thereto pursuant to the terms of the Share
Pledge Agreement.
"Share Pledgor" means Xx. Xxxx
Tianfu (杨天夫),
holder of PRC passport No. X00000000.
"Share Value" has the meaning
ascribed to it in the Share Pledge Agreement.
"SHIBOR" means, in relation to
any Loan:
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(a)
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the
applicable Screen Rate; or
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(b)
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if
no Screen Rate is available for RMB for the Interest Period of that Loan,
the arithmetic mean of the rates (rounded upwards to four decimal places)
quoted by the Reference Banks to leading banks in the Shanghai interbank
market (as supplied to the Lender at its
request);
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as of
11:30am (Beijing time) on the Quotation Day for which an interest rate is to be
determined for the offering of deposits in RMB and for a period of comparable to
the Interest Period for that Loan.
"Tax" means any tax, levy,
impost, duty or other charge or withholding of a similar nature (including any
penalty or interest payable in connection with any failure to pay or any delay
in paying any of the same).
"Tax Deduction" has the meaning
given to such term in Clause 12.1 (Tax
definitions).
5
"Trading Day" shall mean (a) if
the Common Stock is listed or admitted for trading on the New York Stock
Exchange, a day on which trades may be made on such exchange, (b) if the Common
Stock is quoted on the Nasdaq Stock Market, a day on which trades may be made
thereon or (c) if the Common Stock is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"Trading Market" has the
meaning ascribed to it in the Share Pledge Agreement.
"Unpaid Sum" means any sum due
and payable but unpaid by the Borrower under this Agreement.
"Utilisation" means a
utilisation of a Facility.
"Utilisation Date" means the
date of a Utilisation, being the date on which the relevant Loan is to be
made.
"Utilisation Request" means a
notice substantially in the form set out in Schedule 3 (Utilisation
Request).
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1.2
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Construction
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(a)
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Unless
a contrary indication appears, any reference in this Agreement
to:
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(i)
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the
"Borrower", the
"Lender", any
"Obligor" or any "Party" shall be
construed so as to include its successors in title, permitted assigns and
permitted transferees;
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(ii)
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"affiliate" of any specified
person means:
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(a)
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any
other person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person,
or
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(b)
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any
other person who is a director or officer
of:
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(1)
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such
specified person,
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(2)
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any
subsidiary of such specified
person,
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(3)
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any
person described in (a) above, or
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(c)
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any
spouse, parent, child, brother or sister of any personal described in
(a) or (b) above;
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(iii)
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"applicable law or regulation" includes any
law, regulation, rule, official directive, request or guideline
(whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or regulatory,
self-regulatory or other authority or
organisation;
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(iv)
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a
document is in "agreed
form" if it is agreed and initialled for the purpose
of identification as such by the Borrower and the
Lender;
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(v)
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"assets" includes present
and future properties, revenues and rights of
every description;
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(vi)
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"authorisation"
means:
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(a)
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an
authorization, consent, approval, resolution, licence, exemption,
filing, notarization, lodgement or registration;
or
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(b)
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in
relation to anything which will be fully or partly prohibited or
restricted by law if a government agency intervenes or acts in any way
within a specified period after lodgement, filing, registration or
notification, the expiry of that period without intervention or
action;
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6
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(vii)
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"business day" means a
day (other than a Saturday or Sunday) on which banks are open for
general business in New York, Hong Kong and (if such reference relates to
a date for a payment in US Dollars) London or (if such reference relates
to a date for a payment in RMB)
Shanghai;
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(viii)
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"contractual obligations" means, as to
any person, any provision of any security issued by such person or of
any agreement, undertaking, contract, indenture, mortgage, deed of trust
or other instrument or arrangement (whether in writing or otherwise) to
which such person is a party or by which it or any of such person's
property is bound;
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(ix)
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"control" means the power to
direct the management and policies of a body corporate, whether
through the ownership of voting capital, by contract or otherwise and
"controlled" shall be construed
accordingly;
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(x)
|
a
"Finance Document"
or any other agreement or instrument is a reference to that Finance
Document or other agreement or instrument as amended, novated,
supplemented, extended or restated;
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(xi)
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"governmental agency" means any
government or any governmental agency, semi-governmental or judicial
entity or authority (including, without limitation, any stock
exchange or any self-regulatory organisation established under
statute);
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(xii)
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"holding company" means, in
relation to a company or corporation, any other company or
corporation in respect of which it is a
subsidiary;
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(xiii)
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"including" shall be
construed as "including without limitation" (and cognate expressions
shall be construed similarly);
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(xiv)
|
"indebtedness" includes
any obligation (whether incurred as principal or as surety) for the
payment or repayment of money, whether present or future, actual or
contingent;
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(xv)
|
"indirect tax" means any
goods and services tax, consumption tax, value added tax or any tax
of a similar nature;
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(xvi)
|
"material adverse effect" means a
material adverse effect on (a) the property, business, operations,
financial condition, liabilities or capitalization of the Group ' taken as
a whole, (b) the ability of any Obligor to perform its payment obligations
or any of its material obligations under any of the Finance Documents to
which it is a party, (c) the validity or enforceability of any of the
Finance Documents, (d) the material rights and remedies of the Lender
under any of the Finance Documents or (e) the timely repayment of the Loan
or payment of interest accrued or any other amount payable by the Borrower
under this Agreement;
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(xvii)
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"month" means a period
starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month, except
that:
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(a)
|
if
the numerically corresponding day is not a business day, that period shall
end on the next business day in that calendar month in which that period
is to end if there is one, or if there is not, on the immediately
preceding business day;
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(b)
|
if
there is no numerically corresponding day in the calendar month in which
that period is to end, that period shall end on the last business day in
that calendar month; and
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(c)
|
if
an Interest Period begins on the last business day of a calendar month,
that Interest Period shall end on the last business day in the calendar in
which that Interest Period is to
end;
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7
The above
rules will apply only to the last month of any period.
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(xviii)
|
"subsidiary" means in
relation to any company or corporation, a company or
corporation:
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(a)
|
which
is controlled, directly or indirectly, by the first mentioned company
or corporation;
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(b)
|
more
than half the issued equity share capital of which is beneficially owned,
directly or indirectly, by the first mentioned company or corporation;
or
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(c)
|
which
is a subsidiary of another subsidiary of the first mentioned company or
corporation,
|
and for
this purpose, a company or corporation shall be treated as being controlled by
another if that other company or corporation is able to direct its affairs
and/or to control the composition of its board of directors or equivalent
body;
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(xix)
|
a
"person" includes
any individual, firm, company, corporation, government, state or agency of
a state or any association, trust, joint venture, consortium or
partnership (whether or not having separate legal
personality);
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(xx)
|
a
provision of law is a reference to that provision as amended or
re-enacted; and
|
|
|
(xxi)
|
unless
a contrary indication appears, a time of day is a reference to Hong Kong
time.
|
|
|
(b)
|
Clause
and Schedule headings are for ease of reference
only.
|
|
|
(c)
|
Unless
a contrary indication appears, a term used in any other Finance Document
or in any notice given under or in connection with any Finance Document
has the same meaning in that Finance Document or notice as in this
Agreement.
|
|
|
(d)
|
A
Potential Event of Default or an Event of Default is "continuing" if it has
not been remedied or waived.
|
|
|
(e)
|
Where
this Agreement specifies an amount in a given currency (the "specified currency")
"or its
equivalent", the "equivalent" is a reference to
the amount of any other currency which, when converted into the specified
currency utilising the Lender's spot rate of exchange for the purchase of
the specified currency with that other currency at or about 11 a.m. on the
relevant date, is equal to the relevant amount in the specified
currency.
|
|
1.3
|
Currency Symbols
|
|
|
(a)
|
"USD" or "US Dollars" or "Dollars" denotes the lawful
currency of the United States of
America.
|
|
|
(b)
|
"RMB" denotes the lawful
currency of the PRC.
|
|
2.
|
THE
FACILITY
|
|
2.1
|
The Facility
|
Subject
to the terms of this Agreement, the Lender make available to the
Borrower:
|
|
(a)
|
a
US Dollar term loan facility in an aggregate amount equal to the Facility
A Commitment; and
|
|
|
(b)
|
a
RMB term loan facility in an aggregate amount equal to the Facility
B Commitment.
|
8
|
2.2
|
Commitments
|
|
|
(a)
|
Subject
to paragraph (b) below, on the date of this Agreement, the currency and
amount of the Commitment of the Lender in respect of each Facility is the
currency and amount set out in Schedule 1 (Commitments) in respect
of that Facility.
|
|
|
(b)
|
The
Commitments of the Lender are subject to any cancellation or reduction
thereof in accordance with this
Agreement.
|
|
3.
|
PURPOSE
|
|
3.1
|
Purpose
|
The
Borrower shall apply all amounts borrowed by it under the Facilities for working
capital requirements of the Group.
|
3.2
|
Monitoring
|
The
Lender shall not be bound to monitor or verify the application of any amount
borrowed pursuant to this Agreement.
|
4.
|
CONDITIONS
OF UTILISATION
|
|
4.1
|
The
Borrower may not deliver the first Utilisation Request unless all
conditions precedent set out in Part A of Schedule 2 (Conditions Precedent)
have been satisfied in accordance with this Clause 4 (Conditions of
Utilisation). The Lender shall notify the Borrower promptly upon
being satisfied with the same.
|
|
4.2
|
The
Borrower's right to submit a Utilisation Request (including the first
Utilisation Request) is further subject to all conditions precedent
set out in Part B of Schedule 2 (Conditions Precedent)
having been satisfied in accordance with this Clause 4 (Conditions of
Utilisation).
|
|
4.3
|
The
Borrower shall be deemed to have satisfied the conditions precedent in
this Clause 4 (Conditions of Utilisation)
if:
|
|
|
(i)
|
the
documents and other evidence referred to in Schedule 2 (Conditions Precedent)
and any documentary evidence relating to the satisfaction of the
conditions precedent set out in Schedule 2 (Conditions Precedent)
are delivered to the Lender in form and substance satisfactory to it;
and
|
|
|
(ii)
|
no
Material Adverse Change has occurred and no change in applicable law or
regulation or in the interpretation thereof shall be applicable that
either restrains or prevents or imposes materially adverse conditions upon
the transactions contemplated by or in connection with the Finance
Documents.
|
|
4.4
|
All
copies of documents delivered to the Lender as required under this Clause
4 (Conditions of
Utilisation) shall be certified by an Authorised Person as being
true and complete copies of the
originals.
|
|
5.
|
UTILISATION
|
|
5.1
|
Delivery of a Utilisation
Request
|
The
Borrower may utilise a Facility by delivery to the Lender of a duly completed
Utilisation Request not later than 10:00am (Hong Kong time) on the third
business day before the proposed Utilisation Date.
|
5.2
|
Completion of Utilisation
Request
|
|
|
(a)
|
Each
Utilisation Request is irrevocable and will not be regarded as having been
duly completed unless:
|
|
|
(i)
|
it
identifies the Facility to be
utilised;
|
9
|
|
(ii)
|
the
proposed Utilisation Date is a business day within the Availability Period
applicable to that Facility;
|
|
|
(iii)
|
the
currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount);
and
|
|
|
(iv)
|
the
bank account specified in the Utilisation Request to which the proceeds of
the Utilisation are to be credited is a bank account of the Borrower
maintained with a bank acceptable to the Lender or such other account as
is acceptable to the Lender.
|
|
|
(b)
|
Only
one Loan may be requested in each Utilisation
Request.
|
|
5.3
|
Currency and
amount
|
|
|
(a)
|
The
currency specified in each Utilisation Request utilising Facility A and
Facility B must be US Dollars and RMB
respectively.
|
|
|
(b)
|
The
amount of the proposed Loan must be an amount which is not more than the
Available Facility in respect of the corresponding Facility and which is a
minimum of USD5,000,000 (in the case of Facility A) or RMB20,000,000 (in
the case of Facility B) or, if less, the Available Facility in respect of
that Facility.
|
|
5.4
|
Advance
|
If the
conditions set out in Clause 4 (Conditions of Utilisation)
and 5.1 (Delivery of a
Utilisation Request) to 5.3 (Currency and amount) above
have been met, the Lender shall make the Loan available to the Borrower on the
Utilisation Date.
|
5.5
|
Cancellation of Available Facility
|
On the
expiry of the Availability Period (in the principal financial centre of the
country of the relevant currency):
|
|
(a)
|
the
Available Facility (if any) in respect of each Facility shall be
immediately and automatically reduced to zero;
and
|
|
|
(b)
|
the
Commitment under each Facility shall be immediately and
automatically reduced by the amount (if any) of the Available
Facility in respect of that Facility immediately before the reduction to
zero of that Available Facility in accordance with paragraph (a)
above.
|
|
6.
|
REPAYMENT
|
|
6.1
|
Repayment of
Loans
|
The
Borrower shall repay the Facility A Loans in two (2) equal instalments on the
Repayment Dates. The Borrower shall repay the Facility B Loans in two (2) equal
instalments on the Repayment Dates.
|
6.2
|
Reborrowing
|
The
Borrower may not reborrow any part of a Facility which is repaid.
|
7.
|
PREPAYMENT
AND CANCELLATION
|
|
7.1
|
Illegality
|
If, at
any time, it is or will become unlawful in any applicable jurisdiction for the
Lender to perform any of its obligations as contemplated by this Agreement or to
make, fund or allow to remain outstanding any Loan:
10
|
|
(a)
|
upon
the Lender notifying the Borrower of that event, the Commitments of the
Lender will be immediately cancelled;
and
|
|
|
(b)
|
the
Borrower shall repay the Loans on the last day of the Interest Period of
each Loan occurring after the Lender has notified the Borrower or, if
earlier, the date specified by the Lender in the notice delivered to the
Borrower (being no earlier than the last day of any applicable grace
period permitted by law).
|
|
7.2
|
Cancellation
|
The
Facilities may not be cancelled except as otherwise provided in this
Agreement.
|
7.3
|
Change of Control
|
|
|
(a)
|
Upon
the occurrence of a Change of
Control:
|
|
|
(i)
|
the
Borrower shall promptly notify the Lender upon becoming aware of that
event; and
|
|
|
(ii)
|
the
Lender may, by not less than 30 days notice to the Borrower, cancel the
Facilities and declare all outstanding Loans together with accrued
interest, and all other amounts accrued under the Finance Documents
immediately due and payable, whereupon the Facilities will be cancelled
and all such outstanding amounts will become immediately due and
payable.
|
|
|
(b)
|
For
the purpose of this Clause 7.3 (Change of Control), a
"Change of
Control" means the
occurrence of any of the following
event:-
|
|
|
(i)
|
the
Permitted Holders cease to be the beneficial owners, directly
or indirectly, of a majority of the total voting power of the voting
shares of the Borrower or of at least 30% of the total voting power
of the voting shares of the Borrower or any person or persons, acting
together, other than the Permitted Holders become the beneficial owner(s)
of a higher percentage of the total voting power of the voting shares of
the Borrower than that of which the Permitted Holders are beneficial
owners, directly or indirectly, whether as a result of the issuance of
securities of the Borrower, any merger, consolidation, liquidation or
dissolution of the Borrower, any direct or indirect transfer of securities
by the Permitted Holders or otherwise (for this purpose, the Permitted
Holders will be deemed to beneficially own any voting shares of the
specified company held by a parent company so long as the Permitted
Holders beneficially own, directly or indirectly, in the aggregate a
majority of the total voting power of the voting shares of such parent
company); or
|
|
|
(ii)
|
the
sale, transfer, assignment, lease, conveyance or other disposition,
directly or indirectly, of all or substantially all the assets of the
Borrower and its subsidiaries, considered as a whole (other than a
disposition of such assets as an entirety or virtually as an entirety to a
wholly owned subsidiary or one or more Permitted Holders), shall have
occurred, or the Borrower merges consolidates or amalgamates with or into
any other person (other than one or more Permitted Holders) or any other
person (other than one or more Permitted Holders) merges, consolidates or
amalgamates with or into the Borrower, in any such event pursuant to a
transaction in which the outstanding voting shares of the Borrower is
reclassified into or exchanged for cash, securities or other assets, other
than such transaction where:
|
|
|
(1)
|
the
outstanding voting shares of the Borrower is reclassified into or
exchanged for other voting shares of the Borrower or for the voting shares
of the surviving entity, and
|
|
|
(2)
|
the
holders of the voting shares of the Borrower immediately prior to
such transaction own, directly or indirectly, not less than a majority of
the voting shares of the Borrower or the surviving entity immediately
after such transaction and in substantially the same proportion as before
the transaction; or
|
11
|
|
(iii)
|
individuals
who on the date of this Agreement constitute the board of directors
(together with any new directors whose election or appointment by such
board or whose nomination for election by the shareholders of the Borrower
is approved by a vote of not less than three-fourths of the directors then
still in office who are either directors on the date of this Agreement or
whose election or nomination for election has been previously so approved)
cease for any reason to constitute a majority of the board of directors
then in office; or the shareholders of the Borrower shall have approved
any plan of liquidation or dissolution of the
Borrower.
|
|
7.4
|
Voluntary
Prepayment
|
|
|
(a)
|
The
Borrower may, if it gives the Lender not less than one ( 1) month's (or
such shorter period as the Lender may agree) prior notice, prepay on an
Interest Payment Date or a Repayment Date the whole or any part of any
Loan (but, if in part, being an amount that is an integral multiple of
USD500,000 (in the case of a Facility A Loan) or RMB2,000,000 (in the case
of a Facility B Loan)).
|
|
|
(b)
|
A
Loan may be prepaid only after the last day of the Availability Period
(or, if earlier, the day on which the Available Facility is
zero).
|
|
7.5
|
Restrictions
|
|
|
(a)
|
Any
notice of cancellation or prepayment given by any Party under this Clause
7 (Prepayment and
Cancellation) shall be irrevocable and, unless a contrary
indication appears in this Agreement, shall specify the date or dates upon
which the relevant cancellation or prepayment is to be made and the amount
of that cancellation
or prepayment.
|
|
|
(b)
|
Any
prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid and, subject to any Break Costs, without
premium or penalty.
|
|
|
(c)
|
The
Borrower may not reborrow any part of a Facility which is
prepaid.
|
|
|
(d)
|
The
Borrower shall not repay or prepay all or any part of any Loan or reduce
any Commitment except at the times and in the manner expressly provided
for in this Agreement.
|
|
|
(e)
|
If
any Commitment is reduced in accordance with this Agreement, the amount of
such reduction may not be subsequently
reinstated.
|
|
|
(f)
|
Any
prepayment under Clause 7.3 (Change of Control) or
Clause 7.4 (Voluntary
Prepayment) shall satisfy the obligations under Clause 6.1 (Repayment of Loans) in
inverse chronological order.
|
|
8.
|
INTEREST
|
|
8.1
|
Calculation of
interest
|
The rate
of interest on each Loan for each Interest Period is the percentage rate per
annum which is the aggregate of the applicable:
|
|
(a)
|
Margin;
and
|
|
|
(b)
|
in relation to a
Facility A Loan, LIBOR and in relation to a Facility B Loan, SHIBOR.
|
|
8.2
|
Payment of
interest
|
The
Borrower shall pay accrued interest on that Loan on each Interest Payment
Date.
12
|
8.3
|
Default
interest
|
|
|
(a)
|
If
the Borrower fails to pay any amount payable by it under this Agreement on
its due date, interest shall accure on the Unpaid Sum from the due
date to the date of actual payment (both before and after judgment) at a
rate which is five per cent. (5%) higher than the rate which would
have been payable if the Unpaid Sum had, during the period of non-payment,
constituted a Loan for successive Interest Periods, each of a duration
selected by the Lender (acting reasonably). Any interest accruing under
this Clause 8.3 (Default
interest) shall be immediately payable by the Borrower on demand by
the Lender.
|
|
|
(b)
|
If
any Unpaid Sum consists of all or part of a Loan which became due on a day
which was not the last day of an Interest Period relating to that Loan the
first Interest Period for that Unpaid Sum shall have a duration equal to
the unexpired portion of the current Interest Period relating to that
Loan.
|
|
|
(c)
|
Default
interest (if unpaid) arising on an Unpaid Sum will be compounded with the
Unpaid Sum at the end of each Interest Period applicable to that Unpaid
Sum but will remain immediately due and
payable.
|
|
8.4
|
Notification of rates of
interest
|
The
Lender shall promptly notify the Borrower of the determination of a rate of
interest under this Agreement.
|
9.
|
INTEREST
PERIODS
|
|
9.1
|
Interest
Periods
|
|
|
(a)
|
Each
Interest Period for a Loan shall be of a duration of six (6)
months.
|
|
|
(b)
|
Each
Interest Period for a Loan shall start on the Utilisation Date or (if a
Loan has already been made, whether or not in respect of the same
Facility) on the last day of the preceding Interest Period of such
Loan.
|
|
|
(c)
|
An
Interest Period shall not extend beyond the Final Maturity
Date.
|
|
9.2
|
Non-Business
Days
|
If an
Interest Period would otherwise end on a day which is not a business day, that
Interest Period will instead end on the next business day in that calendar month
(if there is one) or the preceding business day (if there is not).
|
9.3
|
Consolidation of
Loans
|
If the
Interest Periods of two or more Loans end on the same date, those Loans will be
consolidated into, and treated as, a single Loan on the last day of that
Interest Period PROVIDED THAT a Facility A Loan and a Facility B Loan will not
be consolidated into, nor be treated as, a single Loan.
|
10.
|
CHANGES
TO THE CALCULATION OF INTEREST
|
|
10.1
|
Absence of
quotations
|
Subject
to Clause 10.2 (Market
disruption), if LIBOR or SHIBOR (as the case may be) is to be determined
by reference to the Reference Banks but a Reference Bank does not supply a
quotation by noon on the Quotation Day, the applicable LIBOR or SHIBOR (as the
case may be) shall be determined on the basis of the quotations of the remaining
Reference Banks.
13
|
10.2
|
Market
disruption
|
|
|
(a)
|
Subject
to any alternative basis agreed and consented to as contemplated by
paragraphs (a) and (b) of Clause 10.3 (Alternative basis of interest
or funding), if a Market Disruption Event occurs in relation to a
Loan for any Interest Period, then the rate of interest on that Loan for
the Interest Period shall be the rate per annum which is the sum
of:
|
|
|
(i)
|
the
Margin; and
|
|
|
(ii)
|
the
rate notified to the Borrower by the Lender as soon as practicable and in
any event before interest is due to be paid in respect of that Interest
Period to be that which expresses as a percentage rate per annum the cost
to the Lender of making, funding or allowing to remain outstanding that
Loan from whatever source it may reasonably
select.
|
|
|
(b)
|
In
this Agreement "Market
Disruption Event" means:
|
|
|
(i)
|
at
or about noon on the Quotation Day for the relevant Interest Period the
Screen Rate is not available or the Screen Rate is zero or negative and
none or only one of the Reference Banks supplies a rate to the Lender to
determine LIBOR for US Dollars or SHIBOR for RMB (as the case may be) for
the relevant Interest Period; or
|
|
|
(ii)
|
before
noon (Hong Kong time) on the business day immediately following the
Quotation Day for the relevant Interest Period, the Lender (acting in good
faith) notifies the Borrower that the cost to it of obtaining matching
deposits in the Relevant Interbank Market would be in excess of LIBOR or
SHIBOR (as the case may be).
|
|
10.3
|
Alternative basis of interest or
funding
|
|
|
(a)
|
If
a Market Disruption Event occurs and the Lender or the Borrower so
requires, the Lender and the Borrower shall enter into negotiations (for a
period of not more than thirty days) with a view to agreeing a substitute
basis for determining the rate of
interest.
|
|
|
(b)
|
Any
alternative basis agreed pursuant to paragraph (a) above in writing by the
Lender and the Borrower shall be binding on each of
them.
|
|
|
(c)
|
For
the avoidance of doubt, in the event that no substitute basis is agreed at
the end of the thirty day period, the rate of interest shall continue to
be determined in accordance with the terms of this
Agreement.
|
|
10.4
|
Break
Costs
|
The
Borrower shall, within three business days of demand by the Lender, pay to the
Lender its Break Costs attributable to all or any part of a Loan or Unpaid Sum
being paid by the Borrower on a day other than the last day of an Interest
Period for that Loan or Unpaid Sum.
|
11.
|
FEES
|
The
Borrower shall pay to the Lender an arrangement fee in the amount of five
hundred thousand US Dollars (US$500,000) within one ( 1) month of the date of
this Agreement.
|
12.
|
TAX
GROSS UP AND INDEMNITIES
|
|
12.1
|
Tax
definitions
|
|
|
(a)
|
In
this Clause 12 (Tax
Gross Up and Indemnities):
|
"Tax Credit" means a credit
against, relief or remission for, or repayment of any Tax.
14
"Tax Deduction" means a
deduction or withholding for or on account of Tax from a payment under a Finance
Document.
"Tax Payment" means an
increased payment made by the Borrower to the Lender under Clause 12.2 (Tax gross-up) or a payment
under Clause 12.3 (Tax
indemnity).
|
|
(b)
|
Unless
a contrary indication appears, in this Clause 12 (Tax Gross Up and
Indemnities) a reference to "determines" or "determined" means a
determination made in the absolute discretion of the person making the
determination.
|
|
12.2
|
Tax
gross-up
|
|
|
(a)
|
All
payments to be made by the Borrower to the Lender under the Finance
Documents shall be made free and clear of and without any Tax Deduction
unless the Borrower is required to make a Tax Deduction, in which case the
sum payable by the Borrower (in respect of which such Tax Deduction is
required to be made) shall be increased to the extent necessary to ensure
that the Lender receives a sum net of any deduction or withholding equal
to the sum which it would have received had no such Tax Deduction been
made or required to be made.
|
|
|
(b)
|
The
Borrower shall promptly upon becoming aware that the Borrower must make a
Tax Deduction (or that there is any change in the rate or the basis of a
Tax Deduction) notify the Lender
accordingly.
|
|
|
(c)
|
If
the Borrower is required to make a Tax Deduction, the Borrower shall make
that Tax Deduction and any payment required in connection with that Tax
Deduction within the time allowed and in the minimum amount required by
law.
|
|
|
(d)
|
Within
thirty days of making either a Tax Deduction or any payment required in
connection with that Tax Deduction, the Borrower shall deliver to the
Lender evidence reasonably satisfactory to the Lender that the Tax
Deduction has been made or (as applicable) any appropriate payment paid to
the relevant taxing authority.
|
|
12.3
|
Tax
indemnity
|
|
|
(a)
|
Without
prejudice to Clause 12.2 (Tax gross-up), if the
Lender is required to make any payment of or on account of Tax on or
in relation to any sum received or receivable under the Finance Documents
(including any sum deemed for purposes of Tax to be received or receivable
by the Lender whether or not actually received or receivable) or if any
liability in respect of any such payment is asserted, imposed, levied or
assessed against the Lender, the Borrower shall, within three business
days of demand of the Lender, promptly indemnify the Lender, together with
any interest, penalties, costs and expenses payable or incurred in
connection therewith, provided that this Clause 12.3 (Tax indemnity) shall
not apply to:
|
|
|
(i)
|
any
Tax imposed on and calculated by reference to the net income actually
received or receivable by the Lender (but, for the avoidance of doubt, not
including any sum deemed for purposes of Tax to be received or receivable
by the Lender but not actually receivable) by the jurisdiction in which
the Lender is incorporated; or
|
|
|
(ii)
|
any
Tax imposed on and calculated by reference to the net income of the office
or offices of the Lender through which the Lender will perform its
obligations under this Agreement actually received or receivable by the
Lender (but, for the avoidance of doubt, not including any sum deemed for
purposes of Tax to be received or receivable by the Lender but not
actually receivable) by the jurisdiction in which such office or offices
the Lender is/are located.
|
|
|
(b)
|
The
Lender intending to make a claim under paragraph (a) shall notify the
Borrower of the event giving rise to the
claim.
|
15
|
12.4
|
Tax
credit
|
If the
Borrower makes a Tax Payment and the Lender determines that:
|
|
(a)
|
a
Tax Credit is attributable to that Tax Payment;
and
|
|
|
(b)
|
the
Lender has obtained, utilised and retained that Tax
Credit,
|
the
Lender shall pay an amount to the Borrower which the Lender determines will
leave it (after that payment) in the same after-Tax position as it would have
been in had the Tax Payment not been required to be made by the
Borrower.
|
12.5
|
Stamp
taxes
|
The
Borrower shall:
|
|
(a)
|
pay
all stamp duty, registration and other similar Taxes payable in respect of
any Finance Document, and
|
|
|
(b)
|
within
three business days of demand, indemnify the Lender against any cost, loss
or liability the Lender incurs in relation to any stamp duty, registration
or other similar Tax paid or payable in respect of any Finance
Document.
|
|
12.6
|
Indirect
tax
|
|
|
(a)
|
All
consideration expressed to be payable under a Finance Document by any
Obligor to the Lender shall be deemed to be exclusive of any indirect tax.
If any indirect tax is chargeable on any supply made by the Lender to any
Party in connection with a Finance Document, that Party shall pay to the
Lender (in addition to and at the same time as paying the consideration)
an amount equal to the amount of the indirect
tax.
|
|
|
(b)
|
Where
a Finance Document requires any Party to reimburse the Lender for any
costs or expenses, that Party shall also at the same time pay and
indemnify the Lender against all indirect tax incurred by the Lender in
respect of the costs or expenses to the extent the Lender reasonably
determines that it is not entitled to credit or repayment in respect of
the indirect tax.
|
|
13.
|
INCREASED
COSTS
|
|
13.1
|
Increased
costs
|
|
|
(a)
|
Subject
to Clause 13.3 (Exceptions) the
Borrower shall, within three business days of a demand by the Lender, pay
the Lender the amount of any Increased Costs incurred by the Lender or any
of its affiliates as a result of (i) the introduction of or any change in
(or in the interpretation, administration or application of) any law or
regulation or (ii) compliance with any applicable law or regulation made
after the date of this Agreement. The term "applicable law or regulation"
in this paragraph (a) shall include, without limitation, any law or
regulation concerning capital adequacy, prudential limits, liquidity,
reserve assets or Tax.
|
|
|
(b)
|
In
this Agreement "Increased
Costs" means:
|
|
|
(i)
|
a
reduction in the rate of return from a Facility or on the Lender's (or its
affiliate's) overall capital (including, without limitation, as a result
of any reduction in the rate of return on capital brought about by more
capital being required to be allocated by the
Lender);
|
|
|
(ii)
|
an
additional or increased cost; or
|
|
|
(iii)
|
a
reduction of any amount due and payable under any Finance
Document,
|
16
which is
incurred or suffered by the Lender or any of its affiliates to the extent that
it is attributable to the undertaking, funding or performance by the Lender of
any of its obligations under any Finance Document or the making, funding or
allowing to remain outstanding any Loan or Unpaid Sum.
|
13.2
|
Increased cost claims
|
|
|
(a)
|
The
Lender intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify
the Borrower of the event giving rise to the
claim.
|
|
13.3
|
Exceptions
|
Clause
13.1 (Increased costs)
does not apply to the extent any Increased Cost is:
|
|
(a)
|
attributable
to a Tax Deduction required by law to be made by the
Borrower;
|
|
|
(b)
|
compensated
for by Clause 12.3 (Tax
indemnity) (or would have been compensated for under Clause 12.3
(Tax indemnity)
but was not so compensated solely because the exclusion in paragraph (a)
of Clause 12.3 (Tax
indemnity) applied); or
|
|
|
(c)
|
attributable
to the wilful breach by the Lender or its affiliates of any applicable law
or regulation.
|
|
14.
|
MITIGATION
BY THE LENDER
|
|
14.1
|
Mitigation
|
|
|
(a)
|
The
Lender shall, in consultation with the Borrower, take all reasonable steps
to mitigate any circumstances which arise and which would result in
any amount becoming payable under or pursuant to, or cancelled
pursuant to, any of Clause 7.1 (Illegality), Clause
12 (Tax gross-up
and indemnities) or Clause 13 (Increased costs),
including (but not limited to):
|
|
|
(i)
|
providing
such information as the Borrower may reasonably request in order to permit
the Borrower to determine its entitlement to claim any exemption or other
relief (whether pursuant to a double taxation treaty or otherwise) from
any obligation to make a Tax Deduction;
and
|
|
|
(ii)
|
in
relation to any circumstances which arise following the date of this
Agreement, transferring its rights and obligations under the Finance
Documents to another affiliate or another
office.
|
|
|
(b)
|
Paragraph
(a) above does not in any way limit the obligations of any Obligor under
the Finance Documents.
|
|
14.2
|
Limitation of liability
|
|
|
(a)
|
The
Borrower shall indemnify the Lender for all costs and expenses reasonably
incurred by the Lender as a result of steps taken by it under Clause 14.1
(Mitigation).
|
|
|
(b)
|
The
Lender is not obliged to take any steps under Clause 14.1 (Mitigation) if, in the
opinion of the Lender (acting reasonably), to do so might be prejudicial
to it.
|
|
14.3
|
Conduct of business by the
Lender
|
No
provision of this Agreement will:
|
|
(a)
|
interfere
with the right of the Lender to arrange its affairs (tax or otherwise) in
whatever manner it thinks fit;
|
17
|
|
(b)
|
oblige
the Lender to investigate or claim any credit, relief, remission or
repayment available to it or the extent, order and manner of any claim;
or
|
|
|
(c)
|
oblige
the Lender to disclose any information relating to its affairs (tax or
otherwise) or any computations in respect of
Tax.
|
|
15.
|
OTHER
INDEMNITIES
|
|
15.1
|
Currency
indemnity
|
|
|
(a)
|
If
any sum due from the Borrower under the Finance Documents (a "Sum"), or any
order, judgment or award given or made in relation to a Sum, has to
be converted from the currency (the "First Currency") in
which that Sum is payable into another currency (the "Second Currency") for
the purpose of:
|
|
|
(i)
|
making
or filing a claim or proof against the Borrower;
or
|
|
|
(ii)
|
obtaining
or enforcing an order, judgment or award in relation to any litigation or
arbitration proceedings,
|
The
Borrower shall as an independent obligation, within three business days of
demand, indemnify the Lender against any cost, loss or liability arising out of
or as a result of the conversion including any discrepancy between (A) the rate
of exchange used to convert that Sum from the First Currency into the Second
Currency and (B) the rate or rates of exchange available to that person at the
time of its receipt of that Sum.
|
|
(b)
|
The
Borrower waives any right it may have in any jurisdiction to pay any
amount under the Finance Documents in a currency or currency unit
other than that in which it is expressed to be
payable.
|
|
15.2
|
Other
indemnities
|
The
Borrower shall, within three business days of demand, indemnify the Lender
against any cost, loss or liability incurred by the Lender as a result
of:
|
|
(a)
|
the
occurrence of any Event of Default;
|
|
|
(b)
|
investigating
any event which it reasonably believes is an Event of Default or Potential
Event of Default;
|
|
|
(c)
|
the
information produced or approved by any Obligor being or being alleged to
be misleading and/or deceptive in any
respect;
|
|
|
(d)
|
any
enquiry, investigation, subpoena (or similar order) or litigation with
respect to any Obligor or with respect to the transactions contemplated or
financed under this Agreement;
|
|
|
(e)
|
a
failure by an Obligor to pay any amount due under a Finance Document on
its due date or in the relevant
currency;
|
|
|
(f)
|
funding,
or making arrangements to fund, a Loan requested by the Borrower in a
Utilisation Request but not made by reason of the operation of any one or
more of the provisions of this Agreement (other than by reason of default
or negligence by the Lender alone);
|
|
|
(g)
|
acting
or relying on any notice, request or instruction which it reasonably
believes to be genuine, correct and appropriately authorised;
or
|
|
|
(h)
|
a
Loan (or part of a Loan) not being prepaid in accordance with a notice of
prepayment given by the Borrower.
|
18
|
16.
|
COSTS
AND EXPENSES
|
|
16.1
|
Transaction
expenses
|
The
Borrower shall, within three business days of demand, pay the Lender the amount
of all costs and expenses (including legal fees) reasonably incurred by it in
connection with the negotiation, preparation, printing and execution
of:
|
|
(a)
|
this
Agreement and any other documents referred to in this Agreement;
and
|
|
|
(b)
|
any
other Finance Documents.
|
|
16.2
|
Amendment
costs
|
If an
Obligor requests an amendment, waiver or consent, the Borrower shall, within
three business days of demand, reimburse the Lender for the amount of all costs
and expenses (including legal fees) reasonably incurred by the Lender in
responding to, evaluating, negotiating or complying with that request or
requirement.
|
16.3
|
Enforcement
costs
|
The
Borrower shall, within three business days of demand, pay to the Lender the
amount of all costs and expenses (including legal fees) incurred by the Lender
in connection with the enforcement of, or the preservation of any rights under,
any Finance Document.
|
17.
|
REPESENTATIONS
AND WARRANTIES
|
|
17.1
|
Matters
represented
|
The
Borrower makes the representations and warranties set out in Schedule 4 (Representations and
Warranties) to the Lender.
|
17.2
|
Reliance
|
The
Borrower acknowledges the reliance by the Lender on the representations and
warranties in entering into this Agreement and each other Finance Document to
which it is a party.
|
17.3
|
Repetition
|
The
representations and warranties set out in Schedule 4 (Representations and
Warranties) shall be deemed to be repeated in the manner and at this
provided for in Clause 2 (Repetition) of Schedule 4
(Representations and
Warranties).
|
18.
|
UNDERTAKINGS
|
|
18.1
|
Content
|
The
Borrower undertakes to the Lender that it shall comply with the undertakings
contained in Schedule 5 (Undertakings).
|
18.2
|
Duration
|
The
undertakings in Schedule 5 (Undertakings) shall, save as
otherwise provided herein, remain in force from the date of this Agreement until
the Release Date.
19
|
18.3
|
"Know your customer"
checks
|
The
Borrower shall promptly upon the request of the Lender supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by
the Lender for conducting any "know you customer" or other similar procedures
under applicable laws and regulations.
|
19.
|
EVENTS
OF DEFAULT
|
|
19.1
|
Events of Default
|
Each of
the events set out in Schedule 6 (Events of Defaults) shall
constitute an Event of Default (howsoever caused and resulting).
|
19.2
|
Acceleration
|
On and at
any time after the occurrence of an Event of Default which is continuing the
Lender may by notice to the Borrower:
|
|
(a)
|
without
prejudice to any Loans then
outstanding:
|
|
|
(i)
|
cancel
the Commitments (and reduce them to zero), whereupon they shall
immediately be cancelled (and reduced to zero);
or
|
|
|
(ii)
|
cancel
any part of any Commitment (and reduce such Commitment accordingly),
whereupon the relevant part shall immediately be cancelled (and the
relevant Commitment shall be immediately reduced accordingly);
and/or
|
|
|
(b)
|
declare
that all or part of the Loans, together with accrued interest, and all
other amounts accrued or outstanding under the Finance Documents be
immediately due and payable, whereupon they shall become immediately due
and payable; and/or
|
|
|
(c)
|
declare
that all or part of the Loans be payable on demand, whereupon they
shall immediately become payable on demand by the
Lender.
|
|
20.
|
CHANGES
TO THE PARTIES
|
|
20.1
|
Successors and
assigns
|
This
Agreement shall be binding upon and enure to the benefit of each Party and its
or any subsequent successors, transferees and assigns.
|
20.2
|
No assignments and transfers by
the Borrower
|
The
Borrower shall not be entitled to assign or transfer all or any of its rights,
benefits and obligations hereunder without the prior written consent of the
Lender.
|
20.3
|
Assignments and
transfers by
Obligors
|
An
Obligor may not assign or transfer any of its rights or obligations under any
Finance Document, except with the prior written consent of the
Lender.
|
20.4
|
Assignments and transfers by
Lender
|
The
Lender may, subject to Clause 20.5 (Restrictions), at any time,
assign all or any of its rights and benefits hereunder and under any Finance
Documents to which it is a party or transfer all or any of its rights, benefits
and obligations hereunder and under any Finance Documents to which it is a
party.
|
20.5
|
Restrictions
|
The
Borrower shall not become liable as a result of any assignment or transfer as
contemplated by Clause 20.4 (Assignments and transfers by
Lender) above to pay an amount or amounts pursuant to Clause 12 (Tax Gross Up and Indemnities)
and Clause 13 (Increased
Costs) in excess of the amount, if any, which at the time of such
assignment or transfer would have been payable had no such assignment or
transfer occurred, unless:
20
|
20.5.1
|
such
assignment or transfer was made to avoid the occurrence of any
illegality;
|
|
20.5.2
|
any
assignment or transfer was made following an Event of Default which had
occurred and not been remedied; or
|
|
20.5.3
|
such
assignment or transfer was requested by or otherwise made at the
instigation of the Borrower.
|
|
21.
|
DISCLOSURE
OF INFORMATION
|
The
Lender may deliver copies of the Finance Documents and/or disclose any
information received by it under or pursuant to any Finance Document or any
other information about any Obligor or the Finance Documents as the Lender shall
consider appropriate (if, in relation to paragraphs (i)(i) and (i)(ii) below,
the person to whom the copies and/or information are to be delivered or
disclosed has undertaken to keep such information confidential on terms set out
in this Clause 21 (Disclosure
of Information) to:
|
|
(a)
|
any
of its affiliates;
|
|
|
(b)
|
its
head office and any other branch;
|
|
|
(c)
|
any
of its professional advisers and any other person providing services to it
(provided that such person is under a duty of confidentiality, contractual
or otherwise, to the Lender);
|
|
|
(d)
|
any
Obligor;
|
|
|
(e)
|
any
person permitted by any Obligor;
|
|
|
(f)
|
any
person to the extent required for the purpose of any litigation,
arbitration or regulatory proceedings or
procedure;
|
|
|
(g)
|
any
person to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation;
and
|
|
|
(h)
|
any
other person:
|
|
|
(i)
|
to
(or through) whom the Lender assigns or transfers (or may potentially
assign or transfer) all or any of its rights and obligations under this
Agreement; or
|
|
|
(ii)
|
with
(or through) whom the Lender enters into (or may potentially
enter into) any sub-participation in relation to, or any other
transaction under which payments are to be made by reference to, a
Facility, this Agreement or any
Obligor;
|
This
Clause 21 (Disclosure of
Information) supersedes any previous agreement relating to the
confidentiality of such information.
|
22.
|
PAYMENT
MECHANICS
|
|
22.1
|
Payments by the
Borrower
|
|
|
(a)
|
On
each date on which the Borrower is required to make a payment under a
Finance Document, the Borrower shall make the same available to the Lender
(unless a contrary indication appears in a Finance Document) for value on
the due date at the time and in such funds specified by the Lender as
being customary at the time for settlement of transactions in the relevant
currency in the place of payment.
|
21
|
|
(b)
|
Payment
shall be made to such account with such bank as the Lender
specifies.
|
|
22.2
|
Payment by the
Lender
|
Subject
to any requirement in Clause 5.2 (Completion of Utilisation
Request), any amounts payable to the Borrower under this Agreement shall
be paid into the bank account specified by the Borrower and acceptable to the
Lender or in such manner as the Lender and the Borrower shall from time to time
agree.
|
22.3
|
Partial
payments
|
|
|
(a)
|
If
the Lender receives a payment that is insufficient to discharge all the
amounts then due and payable by the Borrower under this Agreement,
the Lender shall, save only as expressly provided in paragraph (b) below,
apply that payment towards the obligations of the Borrower under this
Agreement in the following order:
|
|
|
(i)
|
first, in or towards
payment of any unpaid fees, costs and expenses of the Lender under the
Finance Documents;
|
|
|
(ii)
|
secondly, in or towards payment
of any accrued interest or commitment fees due but unpaid under this
Agreement;
|
|
|
(iii)
|
thirdly, in or towards payment
of any principal due but unpaid under this Agreement;
and
|
|
|
(iv)
|
fourthly, in or towards payment
of any other sum due but unpaid under the Finance
Documents.
|
|
|
(b)
|
The
Lender may vary the order set out in sub-paragraphs (a)(ii) to (iv)
above.
|
|
|
(c)
|
Paragraphs
(a) and (b) above will override any appropriation made by the
Borrower.
|
|
22.4
|
No set-off by the
Borrower
|
All
payments to be made by the Borrower under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for) set-off
or counterclaim.
|
22.5
|
Business
Days
|
|
|
(a)
|
Any
payment which is due to be made on a day that is not a business day shall
be made on the next business day in the same calendar month (if there
is one) or the preceding business day (if there is
not).
|
|
|
(b)
|
During
any extension of the due date for payment of any principal or Unpaid Sum
under paragraph (a) above, interest is payable on the principal or Unpaid
Sum at the rate payable on the original due
date.
|
|
22.6
|
Currency of
account
|
|
|
(a)
|
Subject
to paragraphs (b), (c) and (d) below, US Dollars is the currency of
account and payment for any sum due from the Borrower under any Finance
Document.
|
|
|
(b)
|
Any
repayment or prepayment of a Loan or payment of interest (including
default interest) in respect of Facility B shall be made in
RMB.
|
|
|
(c)
|
Each
payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are
incurred.
|
22
|
|
(d)
|
Any
amount expressed to be payable in a currency other than US Dollars shall
be paid in that other currency.
|
|
23.
|
SET-OFF
|
The
Lender may set off any matured obligation due from the Borrower under the
Finance Documents against any matured obligation owed by the Lender to the
Borrower, regardless of the place of payment, booking branch or currency of
either obligation. If the obligations are in different currencies, the Lender
may convert either obligation at a market rate of exchange in its usual course
of business for the purpose of the set-off. If either obligation is unliquidated
or unascertained, the Lender may set off in an amount estimated by it in good
faith to be the amount of that obligation without prejudice to the duty of the
Lender to account for any surplus upon the amount becoming liquidated or
ascertained.
|
24.
|
NOTICES
|
|
24.1
|
Communications in
writing
|
Any
communication to be made under or in connection with this Agreement shall be
made in writing and, unless otherwise stated, may be made by fax or
letter.
|
24.2
|
Addresses
|
The
address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of each Party for any communication
or document to be made or delivered under or in connection with this Agreement
is that identified with its name below or any substitute address, fax number or
department or officer as the Parties may notify each other by not less than five
business days' notice.
|
24.3
|
Delivery
|
|
|
(a)
|
Any
communication or document made or delivered by one person to another under
or in connection with this Agreement will be
effective:
|
|
|
(i)
|
if
by way of fax, only when received in legible form;
or
|
|
|
(ii)
|
if
by way of letter, only when it has been left at the relevant address or
five business days after being deposited in the post postage prepaid in an
envelope addressed to it at that address; and, if a particular
department or officer is specified as part of its address details provided
under Clause 24.2 (Addresses), if
addressed to that department or
officer.
|
|
|
(b)
|
Any
communication or document to be made or delivered to the Lender will be
effective only when actually received by the Lender and then only if it is
expressly marked for the attention of the department or officer identified
with the Lender's signature below (or any substitute department or officer
as the Lender shall specify for this
purpose).
|
|
24.4
|
English language
|
|
|
(a)
|
Any
notice given under or in connection with any Finance Document must be in
English.
|
|
|
(b)
|
All
other documents provided under or in connection with this Agreement must
be:
|
|
|
(i)
|
in
English; or
|
|
|
(ii)
|
if
not in English, and if so required by the Lender, accompanied by a
certified English translation and, in this case, the English translation
will prevail unless the document is a constitutional, statutory or other
official document.
|
23
|
25.
|
CALCULATIONS
AND CERTIFICATES
|
|
25.1
|
Accounts
|
In any
litigation or arbitration proceedings arising out of or in connection with a
Finance Document, the entries made in the accounts maintained by the Lender
are prima facie
evidence of the matters to which they relate.
|
25.2
|
Certificates and
determinations
|
Any
certification or determination by the Lender of a rate or amount under any
Finance Document is, in the absence of manifest error, conclusive evidence of
the matters to which it relates.
|
25.3
|
Day count
convention
|
Any
interest accruing under this Agreement will accrue from day to day and is
calculated on the basis of the actual number of days elapsed and a year of 360
days (or as may be customary in the relevant market).
|
26.
|
PARTIAL
INVALIDITY
|
If, at
any time, any provision of the Finance Documents is or becomes illegal, invalid
or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.
|
27.
|
REMEDIES
AND WAIVERS
|
No
failure to exercise, nor any delay in exercising, on the part of the Lender, any
right or remedy under the Finance Documents shall operate as a waiver, nor shall
any single or partial exercise of any right or remedy prevent any further or
other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.
|
28.
|
AMENDMENTS
AND WAIVERS
|
Any term
of the Finance Documents may be only amended or waived with the written consent
of the Party against whom the amendment or waiver is claimed to be
binding.
|
29.
|
COUNTERPARTS
|
Each
Finance Document may be executed in any number of counterparts, and this has the
same effect as if the signatures on the counterparts were on a single copy of
the Finance Document.
|
30.
|
GOVERNING
LAW
|
This
Agreement, and all non-contractual obligations arising from or in connection
with this Agreement, are governed by Hong Kong law.
|
31.
|
ENFORCEMENT
|
|
31.1
|
Jurisdiction of Hong Kong
courts
|
|
|
(a)
|
The
courts of Hong Kong have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Agreement (including any dispute
relating to any non-contractual obligation arising from or in connection
with this Agreement and any dispute regarding the existence, validity or
termination of this Agreement) (a "Dispute").
|
|
|
(b)
|
The
Parties agree that the courts of Hong Kong are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue
to the contrary.
|
24
|
|
(c)
|
This
Clause 31.1 (Jurisdiction of Hong Kong
courts) is for the benefit of the Lender only. As a result, the
Lender shall not be prevented from taking proceedings relating to a
Dispute in any other courts with jurisdiction. To the extent allowed by
law, the Lender may take concurrent proceedings in any number of
jurisdictions.
|
|
31.2
|
Service of process
|
Without
prejudice to any other mode of service allowed under any relevant law, the
Borrower:
|
|
(a)
|
irrevocably
agrees to appoint in Hong Kong an agent for service of process in relation
to any proceedings before the Hong Kong courts in connection with any
Finance Document prior to the first Utilisation Date;
and
|
|
|
(b)
|
agrees
that failure by a process agent to notify the Borrower of the process will
not invalidate the proceedings
concerned.
|
|
31.3
|
Waiver of
immunities
|
The
Borrower irrevocably waives, to the extent permitted by applicable law, with
respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar
grounds from:
|
|
(a)
|
suit;
|
|
|
(b)
|
jurisdiction
of any court;
|
|
|
(c)
|
relief
by way of injunction or order for specific performance or recovery of
property;
|
|
|
(d)
|
attachment
of its assets (whether before or after judgment);
and
|
|
|
(e)
|
execution
or enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any proceedings in the courts of any jurisdiction
(and irrevocably agrees, to the extent permitted by applicable law, that
it will not claim any immunity in any such
proceedings).
|
25
SCHEDULE
1
COMMITMENTS
Facility A
Commitment
USD35,000,000
Facility B
Commitment
RMB
100,000,000
26
SCHEDULE
2
CONDITIONS
PRECENDENT
PART A —
Conditions Precedent to the First Utilisation
|
1.
|
Constitutive and Registration
Documents
|
|
1.1
|
Receipt
of copies of constitutive and organisational documents and all
documents videncing the registration of the corporate Obligors with
the appropriate authorities and their qualification to conduct their
business as follows, each as certified by such Obligor's Secretary or
Assistant Secretary:
|
|
|
1.1.1
|
the
certificate of incorporation or certificates of formation, including
restatements and amendments thereof, and the certificate on change of
registered office or registered agent if
applicable;
|
|
|
1.1.2
|
the
bylaws or limited liability company agreement or limited partnership
agreement or other equivalent governing documents, including amendments
and supplements thereof;
|
|
|
1.1.3
|
other
certificates, agreements or merger or consolidation, plans of
reorganization, or other instruments which are filed with Nevada Secretary
of State under Chapter 78 (Private Companies) of
the Nevada Revised Statutes with the effect of amending or supplementing
the certificate of incorporation;
and
|
|
|
1.1.4
|
the
certificate of good standing in such Obligor's jurisdiction of formation
or incorporation and any other jurisdiction in which it conducts business
where a qualification to conduct business as a foreign entity is
required.
|
|
1.2
|
Receipt
of copies of passport or other identification documents of the Share
Pledgor.
|
|
2.
|
Corporate
Documents
|
|
2.1
|
Corporate approvals: Evidence (in the form
of copies of resolutions in agreed forms nd/or certified extracts
from the commercial register) that all corporate or constitutional action
required by any relevant law, regulation or constitutional document to be
taken by the corporate Obligors to
authorise:
|
|
|
2.1.1
|
the
entry into the Finance Documents to which it is a
party;
|
|
|
2.1.2
|
the
execution by it of the Finance Documents to which it is a party;
and
|
|
|
2.1.3
|
an
Authorised Person to sign on behalf of it all other documents, notices
and communications required to be given by or on its behalf, under or
for the purposes of the Finance
Documents,
|
has been
duly taken.
|
2.2
|
Specimen signatures:
Receipt of original specimen signatures of the Authorised Person or
Authorised Persons referred to in Clause 2.1.3 of this
Schedule.
|
|
3.
|
Finance
Documents
|
|
3.1
|
Finance Documents:
Execution and receipt of originals
of:
|
|
|
3.1.1
|
each
Finance Document; and
|
27
|
|
3.1.2
|
each
document to be delivered to the Lender pursuant to the Finance
Documents prior to the
Utilisation.
|
|
3.2
|
Security Documents:
Receipt of written confirmation from the Borrower's counsel, confirming
that the Security Documents have been registered or otherwise perfected
under applicable laws and
regulations.
|
|
3.3
|
Notices: Receipt of
copies of each of the notices for the time being required to be
given pursuant to the terms of the Finance Documents, together with
acknowledgements from each person to whom notice was given, in the form
required by each such document.
|
|
3.4
|
Stamp duties, etc.:
Evidence that all stamp, registration and similar taxes and other
fees payable in connection with the Finance Documents have been
paid.
|
|
3.5
|
Fees: Payment of all
fees which, under the terms of this Agreement, are due prior to
the Utilisation Date.
|
|
4.
|
Legal
Issues
|
|
4.1
|
Legal opinions: Receipt of
legal opinions in agreed form from:
|
|
|
4.1.1
|
King
& Wood, the Hong Kong legal counsel to the Lender, relating to matters
of Hong Kong law relevant to the Finance Documents;
and
|
|
|
4.1.2
|
Loeb
& Loeb, the Nevada and New York legal counsel to the Borrower relating
to matters of the United States federal laws, the laws of the State of
Nevada and the laws of the State of New
York.
|
|
5.
|
Others
|
|
5.1
|
Process agents: Evidence
of the acceptance by the process agents named in the
Finance Documents of their appointment pursuant to the provisions of
the Finance Documents.
|
|
5.2
|
Debt Service Account:
Evidence of the Debt Service Account having been opened and maintained in
accordance with Clause 1 (Opening and maintenance of
Debt Service Account) of Schedule 7 (Debt Service
Account).
|
|
5.3
|
Audited Reports: Receipt
of copies of the Original Financial
Statements.
|
|
5.4
|
Consortium Agreement:
Evidence of any necessary consent and/or waiver of Baring Asia having been
obtained for the transactions contemplated in the Finance Documents in
connection with the obligations of the Share Pledgor under the Consortium
Agreement.
|
28
PART
B — Conditions Precedent to each Utilisation
|
6.
|
Utilisation
Request
|
The
Utilisation Request, duly completed and duly executed by an Authorised
Person.
|
7.
|
Additional Share
Pledge
|
|
7.1
|
(Except
for the first Utilisation) Execution and receipt of the original amendment
to the Share Pledge Agreement in the form set out in Schedule II to
the Share Pledge Agreement in respect of additional shares of the Common
Stock of the Borrower having a Share Value not less than (a) (in the case
where the Common Stock of the Borrower is listed or quoted on a Trading
Market) 200% or (b) (in any other case) 143% of the aggregate of the
proposed Utilisation and an amount determined by the Lender to be an
approximation of the expected interest payments in respect of the Loan so
made within the twelve ( 12) month period following the proposed
Utilisation Date.
|
|
7.2
|
Receipt
of any other document required to be delivered and/or evidence of any step
required to be taken having been so taken under Section 14(c) of the Share
Pledge Agreement in respect of such
amendment.
|
|
7.3
|
Receipt
of the items referred to Clauses 3.2, 3.3 and 3.4 of this Schedule in
respect of such amendment.
|
|
8.
|
Representations and
Warranties
|
All
representations and warranties in the Finance Documents are true in all material
respects on and as of the Utilisation Date, before and after giving effect to
the Utilisation and to the application of the proceeds therefrom, as though made
on and as of such date (save for those representations and warranties which, by
their terms, are made as of a specified date, which representations and
warranties shall be true in all material respects as of such specified date only
and save also as otherwise provided in Clause 2 (Repetition) of Schedule 4
(Representations and
Warranties)).
|
9.
|
No Events of
Default
|
No Event
of Default or Potential Event of Default has occurred and is continuing, or
would result from the Utilisation.
29
SCHEDULE
3
UTILISATION
REQUEST
|
From:
|
|
To:
|
China
Development Bank Corporation Hong Kong
Branch
|
Dated:
Dear
Sirs
Harbin
Electric, Inc. — USD35,000,000 and RMB10,000,000 Term Loan Facility
Agreement
Dated
22 November 2010 (the " Facility Agreement")
|
1.
|
We
refer to the Facility Agreement. This is a Utilisation Request. Terms
defined in the Facility Agreement shall have the same meaning in this
Utilisation Request.
|
|
2.
|
We
wish to borrow a Loan on the following
terms:
|
|
Proposed
Utilisation Date:
|
[•]
20 10 (or, if that is not a business day, the next business
day)
|
|
Facility
to be utilised:
|
[Facility
A] / [Facility B]
|
|
Amount:
|
USD
[•] / RMB [*]
|
|
3.
|
We
confirm that each condition specified in Clause 4 (Conditions of
Utilisation) and Schedule 2 (Conditions precedent)
is satisfied on the date of this Utilisation
Request.
|
|
4.
|
The
proceeds of this Loan shall be credited to the following
account:-
|
|
Account
Holder:
|
[•]
|
|
Bank:
|
[•]
|
|
Branch:
|
[•]
|
|
Account
No.:
|
[•]
|
|
5.
|
This
Utilisation Request is
irrevocable.
|
|
Yours
faithfully
|
|
authorised signatory for
|
30
SCHEDULE
4
REPRESENTATIONS
AND WARRANTIES
|
1.
|
The
Borrower represents and warrants to the Lender that as at the date
hereof:
|
|
|
(a)
|
Status and Due
Authorisation
|
|
|
(i)
|
Each
corporate Obligor is a company with limited liability duly incorporated
and validly existing under the laws of its place of incorporation with
power to enter into each Finance Document to which it is a party and to
exercise its rights and perform its obligations thereunder and all
corporate and other action required to authorise its execution of each
Finance Document to which it is a party and the performance of its
obligations thereunder have been duly taken. It has the power to own its
assets and carry on its business as it is being
conducted.
|
|
|
(ii)
|
The
Share Pledgor has the capacity and power to enter into each Finance
Document to which he is a party and to exercise his rights and perform his
obligations thereunder and all action required to authorise his execution
of each Finance Document to which he is a party and the performance of his
obligations thereunder have been duly
taken.
|
|
|
(b)
|
Execution, Delivery and
Performance
|
The
execution, delivery and performance by each of the Obligors of the Finance
Documents to which it is a party and its exercise of its rights and performance
of its obligations thereunder does not and will not:
|
|
(i)
|
conflict
with any existing agreement or other instrument to which it is a party or
which is binding upon it or any of its assets other than any such conflict
which has been effectively waived by the relevant counterparty prior to
the date of this Agreement;
|
|
|
(ii)
|
(in
the case of a corporate Obligor) conflict with its memorandum and articles
of association or constitutional
documents;
|
|
|
(iii)
|
conflict
with any applicable law, regulation or official or judicial order
currently in effect; or
|
|
|
(iv)
|
result
in the existence of, or oblige it to create any security interest over all
or any of its present or future revenues or assets save as expressly
contemplated by the Security
Documents.
|
|
|
(c)
|
Authorisations
|
All
authorisations and necessary approvals from any governmental or regulatory body
and all material third party consents required in connection with the entry
into, performance, validity, enforceability or admissibility in evidence of, and
the transactions contemplated by, the Finance Documents to which the Borrower or
any other Obligor is a party and to enable the Borrower or any other Obligor or
any other Group Company to conduct its business and perform its obligations as
contemplated in the Finance Documents, which are then required to have been
obtained or effected in accordance with such Finance Documents or applicable law
or regulation including all applicable securities laws and regulations in the
United States are in full force and effect and with respect to any
authorisations and necessary approvals which are not required to be obtained or
effected until a later date, the Borrower has reasonable grounds to believe that
such authorisations and necessary approvals will be obtained and will be in full
force and effect when so required.
31
|
|
(d)
|
Binding Obligations
|
The
obligations expressed to be assumed by each of the Borrower and the other
Obligors in each Finance Document to which it is a party are legal and valid
obligations binding on the Borrower or such Obligor, as the case may be, and
enforceable in accordance with the terms of such Finance Document.
|
|
(e)
|
No
Proceedings
|
No
litigation, arbitration or administrative proceeding of or before any court,
arbitral body or agency has been started or threatened against the Borrower or
any other Group Company or any other Obligor or any of their respective
affiliates which could reasonably be expected to have a material adverse effect
or otherwise affect the legality, validity, binding effect or enforceability of
any Finance Document.
|
|
(f)
|
No Event of Default
|
No Event
of Default or Potential Event of Default has occurred and is continuing or would
result from the making of the Utilisation.
|
|
(g)
|
Law and
Jurisdiction
|
The
choice of Hong Kong law or the laws of the State of New York (as the case may
be) as the governing law in the Finance Documents will be recognised and upheld
in the jurisdictions in which the relevant Obligors are incorporated or reside.
Any judgment obtained in Hong Kong or in the State of New York (as the case may
be) in relation to a Finance Document will be recognised and enforced in the
jurisdictions in which the relevant Obligors are incorporated or
reside.
|
|
(h)
|
Deduction of
Tax
|
Neither
the Borrower nor any other Obligor is required under any applicable law to make
any deduction for or on account of Tax from any payment it may make under any
Finance Document, save for any withholding tax which may arise in respect of any
interest payable by the Borrower hereunder under the applicable federal laws of
the United States or the laws of the State of Nevada.
|
|
(i)
|
Full Disclosure
|
Any
written information provided by the Borrower was true and accurate in all
material respects as at the date it was provided or as at the date (if any) at
which it is stated and any financial projections have been prepared on the basis
of recent information and on the basis of reasonable assumptions. Nothing has
occurred or been omitted and no information has been given or withheld that
results in the information provided taken as a whole being untrue or misleading
in any material respect.
|
|
(j)
|
Financial
Statements
|
The
Original Financial Statements were prepared in accordance with GAAP consistently
applied and give a true and fair view and represent the financial condition and
operations of the Group during the financial year save to the extent expressly
disclosed in such financial statements.
|
|
(k)
|
Security
|
Each
Security Document confers the Security Interests purported to be conveyed
thereby over the assets referred to in such Security Document and such assets
are not subject to any prior Security Interests.
32
|
|
(l)
|
Claims Pari
Passu
|
The
claims of the Lender against each of the Borrower and the other Obligors under
the Finance Documents will rank at least paid passu as to priority of
payments with the claims of all its other unsecured, unsubordinated creditors
save those whose claims are preferred solely by any bankruptcy, insolvency,
liquidation or other similar laws of general application.
|
|
(m)
|
Immunity
|
Neither
the Borrower, any other Obligor nor any of its assets are entitled to immunity
from suit, execution, attachment or other legal process.
|
|
(n)
|
Taxes, Returns and
Payments
|
Each of
the Borrower and the other Group Companies has filed or caused to be filed all
tax returns which are required to be filed by it and has paid or caused to be
paid all taxes shown to be due or payable on such returns or on any assessment
received by it, to the extent such taxes have become due and payable in a timely
manner, except those taxes the validity, application or amount of which is being
contested by it in good faith (and for the payment of which adequate reserves
have been provided, being not less than an amount which would be required to be
reserved in accordance with the applicable accounting standards) by appropriate
proceedings being diligently pursued.
|
|
(o)
|
No
Winding-up
|
No
corporate action nor any other steps have been taken or legal proceedings have
been started or (to the best of the Borrower's knowledge and belief) threatened
for the bankruptcy, winding-up, dissolution, administration or insolvent
re-organisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of any Obligor or any Group
Company or to any or all of its assets or revenues.
|
|
(p)
|
Nevada
|
The
Lender is not and will not be deemed to be resident, domiciled or carrying on
business in the State of Nevada or the United States by reason only of the
execution, delivery, performance or enforcement of the Finance Documents to
which any of them is party. It is not necessary under the laws of the State of
Nevada or the federal laws of the United States (i) in order to enable the
Lender to enforce its rights under the Finance Documents or (ii) by reason of
the execution, delivery and performance of the Finance Execution Documents by
the Lender that it be licensed, qualified or otherwise entitled to carry on
business in the State of Nevada or the United States.
|
2.
|
REPETITION
|
The
Borrower shall be deemed to have repeated each of the representations and
warranties set out in Clause 1 (Representations and
Warranties) of this Schedule 4 on the date on which a Utilisation Request
is issued and on each Utilisation Date with reference to the facts and
circumstances then subsisting.
33
SCHEDULE
5
UNDERTAKINGS
PART
A — INFORMATION UNDERTAKINGS
|
1.
|
INFORMATION
COVENANTS
|
|
1.1
|
Financial
Statements
|
The
Borrower shall:
|
|
1.1.1
|
within
90 days of the end of each of its financial years, deliver to the Lender,
in sufficient copies, its audited consolidated financial statements for
such financial year.
|
|
|
1.1.2
|
within
45 days of the end of each quarter of its financial year, deliver to the
Lender, in sufficient copies, its unaudited consolidated financial
statements for such quarter of the financial
year.
|
|
1.2
|
Requirements as to
Financial
Statements
|
The
Borrower shall ensure that each set of financial statements delivered by it
pursuant to Clause 1.1 (Financial Statements) of this
Schedule 5 (Undertakings) is certified by
a director of the Borrower as having been prepared in accordance with
GAAP.
|
1.3
|
Compliance
Certificate
|
|
|
1.3.1
|
The
Borrower shall deliver to the Lender, within 90 days after the end of each
financial year of the Borrower, a compliance certificate stating that a
review of the activities of the Borrower during the preceding financial
year has been made with a view to determining whether the Borrower and its
subsidiaries have kept, observed, performed and fulfilled their
obligations under this Agreement, and further stating, as to the person
signing such certificate ' that to the best of his or her knowledge the
Borrower has kept, observed, performed and fulfilled each and every
covenant contained in this Agreement and there is no default in the
performance or observance of any of the terms, provisions and conditions
of this Agreement (or, if a Potential Event of Default or Event of Default
shall have occurred, (subject to Clause 1.5 (Insider Information) of
this Schedule) describing all such Potential Event of Default or Events of
Default of which he or she may have knowledge and what action the Borrower
is taking or proposes to take with respect thereto) and that to the best
of his or her knowledge no event has occurred and remains in existence by
reason of which repayment of the Loan(s) and payment of any interest
accrued and any other amount payable under this Agreement is prohibited or
if such event has occurred, a description of the event and what action the
Borrower is taking or proposes to take with respect
thereto.
|
|
|
1.3.2
|
Each
compliance certificate delivered pursuant to Clause 1.3.1 of this Schedule
shall be signed by a director of the
Borrower.
|
|
1.4
|
Other
Information
|
The
Borrower shall supply to the Lender (in sufficient copies):
|
|
1.4.1
|
all
documents dispatched by the Borrower to its shareholders (or any class
of them) or its creditors generally at the same time as they are
despatched;
|
|
|
1.4.2
|
promptly,
any announcement, notice or other document relating specifically to the
Borrower posted onto any electronic website maintained by any stock
exchange on which shares in or other securities of the Borrower are listed
or any electronic website required by any such stock exchange to be
maintained by or on behalf of the
Borrower;
|
34
|
|
1.4.3
|
(subject
to Clause 1.5 (Insider
Information) of this Schedule) promptly upon becoming aware of
them, the details of any litigation, arbitration or administrative
proceedings which are current, threatened or pending against the Borrower
or any other Group Company, and which might, if adversely determined, have
a material adverse effect;
|
|
|
1.4.4
|
(subject
to Clause 1.5 (Insider
Information) of this Schedule) promptly, such further information
regarding the financial condition, business and operations of the Borrower
or any other Group Company as the Lender may reasonably request;
and
|
|
|
1.4.5
|
promptly,
notice of any change in any Authorised Person of any corporate Obligor
signed by a director or company secretary of such corporate Obligor
accompanied by the specimen signature of any new Authorised
Person.
|
|
1.5
|
Insider Information
|
The
Borrower hereby acknowledges that the Lender does not wish to receive material
non-public information with respect to the Borrower or its securities for the
purpose of United States federal and state securities laws ("Insider Information"). The
Borrower hereby agrees that it will use commercially reasonable efforts to omit
any Insider Information from any notice, document or information required to be
provided to the Lender under Clauses 1.3 (Compliance Certificate), 1.4
(Other Information) and
2.1 (Notification and
Default) of this Schedule and that by delivering such notice, document or
information to the Lender, the Borrower shall be deemed to have authorized the
Lender to treat such notice, document or information as not containing any
material non-public information (although it may be sensitive and proprietary)
with respect to the Borrower or its securities for purposes of United States
federal and state securities laws.
PART
B - POSITIVE UNDERTAKINGS
|
2.
|
POSITIVE
UNDERTAKINGS
|
The
Borrower shall comply with the following positive covenants:
|
2.1
|
Notification of
Default.
|
Subject
to Clause 1.5 (Insider
Information) of this Schedule, the Borrower shall promptly inform the
Lender of the occurrence of any Event of Default or Potential Event of Default
of which it becomes aware and, upon receipt of a written request to that effect
from the Lender, confirm to the Lender that, save as previously notified to the
Lender or as notified in such confirmation, no Event of Default or Potential
Event of Default has, to the best of its knowledge, occurred.
|
2.2
|
Corporate
Existence
|
The
Borrower shall and shall procure each corporate Obligor and each other Group
Company maintain its corporate existence and its right to carry on
operations.
|
2.3
|
Authorisations
|
The
Borrower shall obtain, maintain in full force and effect and comply with the
terms of and if requested, supply certified copies to the Lender of each
authorisation, approval and registration required under any applicable law or
regulation including all applicable securities laws and regulations in the
United States to enable it to perform its obligations under, or for the
validity, enforceability or admissibility of, any Finance Document.
35
|
2.4
|
Ranking
|
The
Borrower shall ensure that at all times the claims of Event of Default or
Potential Event of Default against each of the Borrower and the other Obligors
under the Finance Documents will rank at least pari passu with the claims
of its other unsecured creditors other than those whose claims are preferred by
any bankruptcy, insolvency, liquidation or other similar laws of general
application.
|
2.5
|
Compliance with Law and
Taxes
|
The
Borrower shall and shall procure each other Group Company to comply in all
material respects with all applicable laws and regulations to which it is
subject and to file all relevant tax returns and pay all taxes promptly upon the
same becoming due except to the extent taxes are being contested in good faith
(and adequate reserves have been provided in relation thereto in an amount not
less than that which would be required to be reserved in accordance with
GAAP).
|
2.6
|
Accounting
Records
|
The
Borrower shall and shall procure each other Group Company at all times maintain
proper and accurate books and records prepared in accordance with
GAAP.
|
2.7
|
Security - General
Covenants
|
|
|
(i)
|
The
Borrower shall duly make all such filings and registrations with the
relevant authorities as may be necessary in connection with the creation,
perfection or protection of any security interest which it may, or may be
required to, create in connection with the Security Documents (including,
without limitation, any mortgage amendment registration formalities and
foreign security amendment registration formalities in connection with a
change in the particulars of any of the Security
Documents);
|
|
|
(ii)
|
The
Borrower shall promptly make payment of all relevant fees, charges and
taxes payable in relation to any Security Documents and all notarisation
and registration fees in relation to the Security Documents from time
to time and produce to the Lender copies of receipts or other evidence of
such payments duly certified by an Authorised
Person;
|
|
|
(iii)
|
The
Borrower shall procure that no person shall be or become entitled to
assert any proprietary or other like right or interest which might affect
the value of the subject matter under any of the Security Documents
without the prior written consent of the
Lender;
|
|
|
(iv)
|
The
Borrower shall at all times keep the Lender indemnified against all
actions, suits, claims, costs and expenses which may be incurred or
sustained on account of the non-payment of any sum pursuant to this Clause
2.7 (Security - General
Covenants) or any other provision of a Security Document or the
breach or non-performance of the covenants, obligations and agreements
herein contained;
|
|
|
(v)
|
The
Borrower shall provide the Lender with copies of all notices to or from
all relevant government authorities or otherwise relating to the Security
Documents within fourteen ( 14) days of the service of such notices and
comply with all governmental or other legal requirements and notices in
respect of the Security Documents;
and
|
|
|
(vi)
|
The
Borrower shall take and procure to be taken all such action as is
reasonably available to it to register, perfect and protect the security
intended to be conferred on the Lender by or pursuant to the terms of the
Security Documents.
|
36
|
2.8
|
Access
|
The
Borrower shall and shall procure each other Group Company to allow the Lender,
its representatives or the auditors or consultants engaged by the Lender to have
reasonable access to any premises of the Borrower or any other Group Company so
as to carry out inspection or conduct financial review or audit on them upon
prior reasonable notice to the Borrower. The Borrower shall, and shall procure
each other Group Company to, fully cooperate with the Lender and its auditors
and consultants and provide such information as requested for the purpose of the
review or audit.
|
2.9
|
Application of Facility
Amount
|
The
Borrower shall utilise the proceeds of the Facility for the purposes set out in
Clause 3.1 (Purpose).
|
2.10
|
Debt Service
Account
|
The
Borrower shall at all times maintain and operate the Debt Service Account
strictly in accordance with the provisions in Schedule 7 (Debt Service Account)
notwithstanding any other terms upon which monies have been deposited in the
Debt Service Account.
|
2.11
|
Additional Collateral
|
Within
five (5) business days after the occurrence of a Triggering Event (as defined in
the Share Pledge Agreement), the Borrower shall notify the Lender and provide
such additional security as is required pursuant to the Share Pledge
Agreement.
PART
C - NEGATIVE UNDERTAKINGS
|
3.
|
NEGATIVE
UNDERTAKINGS
|
Save as
otherwise agreed by the Lender, the Borrower shall comply with the following
negative covenants.
|
3.1
|
Financing and
Guarantees
|
The
Borrower shall not and shall procure each other Group Company not to make any
financing, grant any credit (save in the ordinary course of business) or give
any guarantee or indemnity (save as contemplated in any Finance Document) to or
for the benefit of any person, or otherwise voluntarily assume any liability,
whether actual or contingent, in respect of any obligation of any other
person.
|
3.2
|
Negative Pledge
|
The
Borrower shall not and shall procure each other Group Company not to create or
permit to subsist any Security Interest over all or any of its present or future
revenues or assets other than Permitted Security Interests.
|
3.3
|
No
Amendments
|
The
Borrower shall not and shall procure each other Group Company not to cause or
agree to the amendment, modification or variation of the terms of its memorandum
and articles of association or articles of association (or such equivalent
constitutional documents), in any material respect and shall not terminate,
amend, vary or grant any waivers under any of the Finance Documents save as
otherwise specifically provided for herein.
|
3.4
|
Disposals
|
The
Borrower shall not and shall procure each other Group Company not to sell,
lease, transfer or otherwise dispose of any asset by one or more transactions or
series of transactions (whether related or not) other than in the ordinary
course of the Related Business. The Borrower shall not and shall procure each
other Group Company not to directly or indirectly dispose of a substantial part
of its assets or undertaking related to the Related Business without the consent
of the Lender in writing.
37
|
3.5
|
Merger
|
The
Borrower shall not and shall procure each other Group Company not to merge or
consolidate with any other person or participate in any other type of corporate
reconstruction without the consent of the Lender in writing.
|
3.6
|
Financial
Year
|
The
Borrower shall not and shall procure each other Group Company not to permit any
change to its financial year end without the consent of the Lender.
|
3.7
|
Shareholder
Loan
|
Where the
Borrower applies any of the proceeds of the Facilities to fund any shareholder
loan to any Group Company, the Borrower shall not assign, transfer or otherwise
deal with any interest in such shareholder loan or the relevant shareholder loan
agreement or any part thereof or create or permit to subsist any Security
Interest thereon or agree or purport to do any of the foregoing without the
prior written consent of the Lender.
38
SCHEDULE
6
EVENTS
OF DEFAULT
Each of
the following events or circumstances set out below shall constitute an Event of
Default.
|
1.
|
Failure to
Pay
|
Any
Obligor fails to pay any amount payable under any Finance Document when
due.
|
2.
|
Misrepresentation
|
Any
representation or warranty made by any Obligor in any Finance Document or in any
notice or certificate delivered by it pursuant thereto or in connection
therewith is or proves to have been incorrect or misleading when made or deemed
to be made.
|
3.
|
Obligations
|
|
3.1
|
Any
Obligor fails duly to perform or comply with any obligation expressed to
be assumed by it in Clause 2.1 (Notification of
Default), Clause 2.2 (Corporate Existence),
Clause 2.4 (Ranking), Clause 3.1
(Financing and
Guarantees) and Clause 3.2 (Negative Pledge) of
Schedule 5 (Undertakings) or any of
the covenants in Schedule 7 (Debt Service
Account).
|
|
3.2
|
Any
Obligor fails duly to perform or comply with any other obligation
expressed to be assumed by it in any Finance Document to which it is a
party and, if capable of remedy, such failure is not remedied within
fifteen ( 15) days after the Lender has given notice to the Borrower or
such Obligor or the Borrower or such Obligor becomes aware of the failure
to perform or comply.
|
|
4.
|
Cross
default
|
|
4.1
|
Any
Financial Indebtedness of the Borrower or any other Group Company in an
aggregate amount in excess of USD5,000,000 or its equivalent is not paid
when due nor within any originally applicable grace
period.
|
|
4.2
|
Any
Financial Indebtedness of the Borrower or any other Group Company in an
aggregate amount in excess of USD5,000,000 or its equivalent is declared
to be or otherwise becomes due and payable prior to its specified maturity
as a result of an event of default (however
described).
|
|
4.3
|
Any
commitment for any Financial Indebtedness of the Borrower or any other
Group Company in an aggregate amount in excess of USD5,000,000 or its
equivalent is cancelled or suspended by a creditor of the Borrower or the
Borrower or any of its subsidiaries as a result of an event of default
(however described).
|
|
4.4
|
Any
creditor of the Borrower or any other Group Company becomes entitled to
declare any Financial Indebtedness of the Borrower or any other Group
Company in an aggregate amount in excess of USD5,000,000 or its equivalent
due and payable prior to its specified maturity as a result of an event of
default (however described).
|
|
5.
|
Insolvency
Events
|
|
5.1
|
The
Borrower, or any other Group
Company:
|
|
|
(a)
|
files
a petition in bankruptcy or takes any action for its rehabilitation,
liquidation, winding-up or
dissolution;
|
39
|
|
(b)
|
commences
a voluntary case or gives notice of intention to make a proposal under any
Bankruptcy Law;
|
|
|
(c)
|
consents
to the entry of an order for relief against it in an involuntary case or
consents to its dissolution or winding
up;
|
|
|
(d)
|
consents
to the appointment of a receiver, interim receiver, receiver and manager,
liquidator, trustee or custodian of it or for all or substantially all of
its property;
|
|
|
(e)
|
makes
a general assignment for the benefit of its
creditors;
|
|
|
(f)
|
is
unable or admits in writing its inability to pay its debts as they become
due otherwise admits its insolvency;
or
|
|
|
(g)
|
stops,
suspends or threatens to stop or suspend payment of all or a material part
of its indebtedness, by reason of actual or anticipated financial
difficulties, or commences negotiations with one or more of its creditors
with a view to rescheduling any of its
indebtedness.
|
|
5.2
|
Any
bankruptcy or insolvency proceedings or other proceedings under any
Bankruptcy Law are commenced against the Borrower, the Borrower or
any of its subsidiaries.
|
|
5.3
|
A
court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
|
|
|
(a)
|
is
for relief against the Borrower or any other Group
Company;
|
|
|
(b)
|
appoints
a receiver, interim receiver, receiver and manager, liquidator, trustee or
custodian of the Borrower or any other Group Company;
or
|
|
|
(c)
|
orders
the liquidation of the Borrower or any other Group
Company.
|
|
5.4
|
For
the purpose of this Clause 5 (Insolvency
Event), "Bankruptcy Law" means
any law in any jurisdiction relating to bankruptcy, insolvency, winding
up, liquidation, reorganisation or relief of the
debtors.
|
|
6.
|
Judgment
|
Any legal
proceedings, judgment or arbitration award (when aggregated with any outstanding
unstayed or unsatisfied proceedings judgement or award against the Borrower, the
Borrower or any of the subsidiaries) in excess of US$5,000,000 or its equivalent
aggregate is rendered against the Borrower or any other Group Company, and
remains unstayed or unsatisfied for 30 consecutive days.
|
7.
|
Expropriation
|
The
confiscation, expropriation or nationalization by any governmental agency of any
assets of the Borrower or any other Group Company if such confiscation,
expropriation or nationalization would have a material adverse effect; or if
such revocation or repudiation could reasonably be expected to have a material
adverse effect, the revocation or repudiation by any government agency of any
previously granted authorisation that is material to the operation of the
Related Business; or the imposition or introduction of material and
discriminatory taxes, tariffs, royalties, customs or excise duties imposed on
the Borrower or other Group Company, or the material and discriminatory
withdrawal or suspension of material privileges or specifically granted material
rights of a fiscal nature.
|
8.
|
Repudiation
|
Any
Obligor repudiates any Finance Document to which it is a party or does or causes
to be done any act or thing evidencing an intention to repudiate any Finance
Document to which it is a party.
40
|
9.
|
Illegality
|
|
|
(a)
|
At
any time it is or becomes unlawful for any of the Obligors to perform or
comply with any or all of its material obligations under any Finance
Document to which it is a party.
|
|
|
(b)
|
At
any time any of the material obligations of any of the Obligors under any
Finance Document to which it is a party are not or cease to be legal,
valid and binding.
|
|
|
(c)
|
Any
authorisation or necessary approval referred to in Clause 2.3 (Authorisations) of
Schedule 5 (Undertakings) is
revoked, terminated or withdrawn and such has or is likely to have a
material adverse effect.
|
|
10.
|
Security
Documents
|
The
security purported to be created by any of the Security Documents shall cease to
constitute a valid, first ranking, security interest in the assets expressed to
be subject thereto or is or becomes subject to any other security interest
(other than a Security Interest permitted under the Finance Documents); or any
Security Document shall (i) cease to be in full force and effect or (ii) cease
to give the Lender all of the material rights, powers and privileges purported
to be created thereby.
|
11.
|
Constitutive
Documents
|
The
Borrower or any other Group Company amends or modifies their respective
constitutive documents in such a manner that would have a material adverse
effect.
|
12.
|
Other
Business
|
The
Borrower shall, or shall permit or any other Group Company to, directly or
indirectly, engage in or carry on any business other than in the ordinary course
of business presently engaged in by it (including with respect to an
arrangements with respect to the business) as consistent with the past custom
and practice of the Group and permitted under all necessary licenses, consents,
authorizations, approvals orders, certificates and permits duly obtained by the
Borrower or any other Group Company.
|
13.
|
Disposal of Related
Business
|
The
Borrower shall, or shall permit or any other Group Company, directly or
indirectly, dispose of or agree to dispose of a substantial part of its assets
or undertaking relating to the Related Business, without the prior written
consent of the Lender.
|
14.
|
Listing Status of the
Borrower
|
The
Borrower fails to maintain the trading of its Common Stock on the New York Stock
Exchange or the Nasdaq Global Select Market or the Nasdaq Global Market without
the prior written consent of the Lender.
|
15.
|
Material Adverse
Change
|
There has
occurred a Material Adverse Change.
41
SCHEDULE
7
DEBT
SERVICE ACCOUNT
|
1.
|
Opening and maintenance of Debt
Service Account
|
The
Borrower shall open and maintain a bank account (the "Debt Service Account") with
the Lender for the purpose set out in this Schedule.
|
2.
|
Operation of Debt Service
Account
|
|
2.1
|
The
Borrower undertakes, until the Release Date, not to make or authorise
any withdrawals from the Debt Service Account except in accordance
with the following provisions of this Clause 2 (Operation of Debt Service
Account) and this Schedule.
|
|
2.2
|
At
any time during the period of thirty (30) days prior to any Interest
Payment Date or Repayment Date, the Borrower shall ensure that the
credit balance of the Debt Service Account is not less than the scheduled
repayment of the Loan(s) and payment of interest accrued and any other
amount payable under the Finance Documents for that Interest Payment Date
or Repayment Date.
|
|
2.3
|
The
Borrower may make or authorise withdrawals and transfers from Debt
Service Account only with the Lender's consent and for the purposes
of repayment of the Loan(s) outstanding or any part thereof or in payment
of any interest accrued and any other amounts due and payable by the
Borrower under the Finance
Documents.
|
|
2.4
|
The
Lender is authorised to make withdrawals and transfers from the Debt
Service Account in such amount and at such time as it shall determine
for the purposes set out in this
Schedule.
|
42
EXECUTION
IN
WITNESS WHEREOF the parties have executed this Agreement on the date first
mentioned above.
|
BORROWER
|
||
|
HARBIN
ELECTIC, INC
|
||
|
By
|
:
|
YANG
TIANFU
|
|
/s/
Xxxxxx Xxxx
|
||
|
Address
|
:
|
Xx.
0 Xx Xxxx Xx Xx, Xx Ping Lu Xx Xxxxx Qu Xxxxxx Xxx Fa
Qu,
|
|
Harbin,
People's Republic of China 150060
|
||
|
Fax
|
:
|
00-000-0000-0000
|
|
LENDER
|
||
|
CHINA
DEVELOPMENT BANK CORPORATION HONG KONG BRANCH
|
||
|
By
|
:
|
/s/
Wang
Wu Ping(王武平)
|
|
Address
|
:
|
Xxxxx
0000-00, 33/F., One International Finance Centre, Xx. 0
Xxxxxxx
|
|
Xxxx
Xxxxxx, Xxxxxxx, Xxxx Xxxx
|
||
|
Fax
|
:
|
x000
0000 0000
|
|
Attention
|
:
|
Xx.
Xxxx Zhongwen
|
43
