EXHIBIT 4.6
Note: Portions of this exhibit indicated by "[*]" are subject to a
confidential treatment request, and have been omitted from this
exhibit. Complete, unredacted copies of this exhibit have been filed
with the Securities and Exchange Commission as part of this Company's
confidential treatment request.
FACILITY AGREEMENT
relating to
LOAN AND PERFORMANCE BOND FACILITIES
including
HK$859,000,000 EQUIPMENT SUPPLY FACILITY
HK$500,000,000 GENERAL FACILITY
3G PERFORMANCE BOND FACILITY
dated 13 MAY 2004
for
MANDARIN COMMUNICATIONS LIMITED
as Borrower
SUNDAY COMMUNICATIONS LIMITED
as Guarantor
HUAWEI TECH. INVESTMENT CO., LIMITED
as the Original Lender
CONTENTS
CLAUSE PAGE
SECTION 1
INTERPRETATION
1. Definitions and Interpretation........................................................................... 1
SECTION 2
THE FACILITIES
2. The Facilities........................................................................................... 22
3. Purpose.................................................................................................. 22
4. Conditions of Utilisation................................................................................ 23
SECTION 3
UTILISATION
5. Utilisation - Loans...................................................................................... 25
6. Disbursement............................................................................................. 26
SECTION 4
SINOSURE, SYNDICATION, AGENCY AND ISSUING BANK PROVISIONS
7. Sinosure and syndication provisions...................................................................... 27
SECTION 5
REPAYMENT, PREPAYMENT AND CANCELLATION
8. Repayment................................................................................................ 30
9. Prepayment and cancellation.............................................................................. 30
SECTION 6
COSTS OF UTILISATION
10. Interest................................................................................................. 40
11. Interest Periods......................................................................................... 40
12. Changes to the calculation of interest................................................................... 42
13. Fees..................................................................................................... 43
SECTION 7
ADDITIONAL PAYMENT OBLIGATIONS
14. Tax gross up and indemnities............................................................................. 44
15. Increased costs.......................................................................................... 46
16. Other indemnities........................................................................................ 47
17. Mitigation by the Lenders................................................................................ 48
18. Costs and expenses....................................................................................... 48
SECTION 8
PERFORMANCE BOND
19. Performance Bond......................................................................................... 50
SECTION 9
GUARANTEE AND SECURITY
20. Guarantee and indemnity.................................................................................. 54
SECTION 10
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
21. Representations.......................................................................................... 57
22. Information undertakings................................................................................. 64
23. Financial Covenants...................................................................................... 70
24. General undertakings..................................................................................... 75
25. Events of Default........................................................................................ 87
SECTION 11
CHANGES TO PARTIES
26. Changes to the Lenders................................................................................... 93
27. Changes to the Obligors.................................................................................. 95
SECTION 12
THE FINANCE PARTIES
28. Role of the Agent and the Security Trustee............................................................... 97
29. Conduct of business by the Finance Parties............................................................... 102
30. Sharing among the Lenders................................................................................ 102
SECTION 13
ADMINISTRATION
31. Payments mechanics....................................................................................... 104
32. Set-off.................................................................................................. 106
33. Notices.................................................................................................. 106
34. Calculations and certificates............................................................................ 108
35. Partial invalidity....................................................................................... 108
36. Remedies and waivers..................................................................................... 109
37. Amendments and waivers................................................................................... 109
38. Counterparts............................................................................................. 109
SECTION 14
GOVERNING LAW AND ENFORCEMENT
39. Governing law............................................................................................ 110
40. Enforcement.............................................................................................. 110
THE SCHEDULES
SCHEDULE PAGE
Schedule 1 Members Of The Group................................................................................ 111
Schedule 2 Conditions Precedent................................................................................ 112
Schedule 3 Requests............................................................................................ 116
Schedule 4 Form Of Transfer Certificate........................................................................ 120
Schedule 5 Form Of Compliance Certificate...................................................................... 122
Schedule 6 Timetables.......................................................................................... 123
Schedule 7 Business Plan....................................................................................... 124
Schedule 8 Group Structure Chart............................................................................... 128
Schedule 9 Performance Bond.................................................................................... 131
Schedule 10 Form Of Accession Deed............................................................................. 132
Schedule 11 Material Licence Agreements........................................................................ 133
Schedule 12 Distacom Shareholders.............................................................................. 134
THIS AGREEMENT is dated 13 May 2004 and made between:-
(1) MANDARIN COMMUNICATIONS LIMITED as MCL ("MCL");
(2) SUNDAY COMMUNICATIONS LIMITED as the guarantor ("SUNDAY"); and
(3) HUA WEI TECH. INVESTMENT CO., LIMITED ("HTIC" and, in its capacity as
the original lender of the Equipment Supply Facility and the General
Facility, the "ORIGINAL LENDER").
IT IS AGREED as follows:-
SECTION 1
INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:-
"2G LICENCE" means the non-exclusive licence issued to MCL on 30 September 1996
by OFTA pursuant to the Telecommunications Ordinance, Licence No. 061 to provide
public mobile radiocommunication services using cellular radiocommunications
technology operating within the frequency band of 1.7-1.9 GHz.
"2G NETWORK" means the "second generation" mobile telecommunications network
operated by MCL pursuant to the 2G Licence.
"2G SUBSCRIBERS" means each SIM card issued to a person or machine which
generates revenues for MCL pursuant to its operation of the 2G Network.
"3G LICENCE" means the non-exclusive licence issued to SUNDAY 3G on 22 October
2001 by OFTA pursuant to the Telecommunications Ordinance, Licence No. 080 to
provide public mobile radiocommunication services using cellular
radiocommunications technology operating within frequency band 1900-1980 MHz,
2015-2025 MHz and 2110-2170 MHz.
"3G NETWORK" means the "third generation" mobile telecommunications network to
be operated by SUNDAY 3G pursuant to the 3G Licence.
"3G SUBSCRIBERS" means each SIM card issued to a person or machine which
generates revenues for SUNDAY 3G pursuant to its operation of the 3G Network.
"ACCESSION DEED" means in the case of the Agent or the Issuer, a document
substantially in form set out in Schedule 10 (Form of Accession Deed).
"ACCOUNTING QUARTER" means each period of 3 Months ending on 31 March, 30 June,
30 September and 31 December in any financial year of SUNDAY or MCL.
"AFFILIATE" means, in relation to any person, a Subsidiary of that person or a
Holding Company of that person or any other Subsidiary of that Holding Company.
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"AGENT" means a bank or financial institution that accedes to this Agreement as
agent of the Finance Parties pursuant to an Accession Deed.
"AGENT'S SPOT RATE OF EXCHANGE" means the spot rate of exchange for the purchase
of the relevant currency with HK Dollars in the Hong Kong foreign exchange
market at or about 11:00 a.m. on a particular day quoted by the Agent.
"APPLICABLE ACCOUNTING PRINCIPLES" means the GAAP used in the Original Financial
Statements.
"APPLICABLE LAW" means any law, subordinate legislation, statute, by-law,
regulation, treaty, judgment, decision, rule, regulation, notice, order,
circular, code of practice or guidance note of, or made by, any Governmental
Agency.
"APPLICABLE MARGIN" means:
(a) in relation to the Equipment Supply Facility, * per annum; and
(b) in relation to the General Facility, * per annum.
"ATRIA" means Atria Limited, a limited liability company incorporated under the
laws of Hong Kong.
"AUTHORISATION" means:-
(a) an authorisation, consent, approval, resolution, licence,
exemption, filing, notarisation, lodgement or registration; or
(b) in relation to anything which will be fully or partly
prohibited or restricted by law if a Governmental 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.
"AVAILABILITY PERIOD" means:-
(a) in relation to the General Facility, the period from and
including the Effective Date to and including the date falling
two Months after the date of this Agreement;
(b) in relation to the Equipment Supply Facility, the period from
and including the Effective Date to and including the date
falling 36 Months after the date of this Agreement; and
(c) in relation to the Performance Bond Facility, the period from
and including 1 October to and including 15 October in each
year before the Final Maturity Date for the Performance Bond
Facility.
"AVAILABLE COMMITMENT" means, in relation to a Facility at any particular time,
a Lender's Commitment under that Facility minus:-
(a) the amount at that time of its participation in any
outstanding Utilisations under that Facility; and
(b) in relation to any proposed Utilisation, the amount at that
time of its participation in any Utilisations that are due to
be made under that Facility on or before the proposed
Utilisation Date.
"AVAILABLE FACILITY" means in relation to a Facility, the aggregate for the time
being of each Lender's Available Commitment in respect of that Facility.
"BENCHMARK RATE" means HIBOR.
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[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
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"BOND PROPORTION" means, in relation to a Lender in respect of any Performance
Bond, the proportion (expressed as a percentage) borne by that Lender's
Available Commitment under the Performance Bond Facility to the Available
Facility under the Performance Bond Facility immediately prior to the issue of
that Performance Bond, adjusted to reflect any assignment or transfer under this
Agreement to or by that Lender.
"BREAK COSTS" means the amount (if any) by which:-
(a) the interest which a Lender should have received for the
period from the date of receipt of all or any part of its
participation in 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;
exceeds:-
(b) the amount which that 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.
"BRIDGING LOAN" means the loan and any other amounts from time to time payable
to HTIC under the loan agreement dated 8 January 2004 between MCL and HTIC.
"BUDGET" means the budget of the Credit Net for the financial year ending 31
December 2004 and each other budget supplied by MCL to the Agent under, and in
each case complying with, Clause 22.5 (Annual Budget).
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks are
open for general business in Hong Kong and Beijing.
"BUSINESS PLAN" means the business plan of the Credit Net in the Agreed Form, a
summary of which is attached as Schedule 7 (Business Plan) for the financial
years from and including, 2004 to, and including 2013 which shall include
performance targets, a budget for total running expenses, projected capital
expenditure and changes in working capital, cash flow projections and
projections as to the number of subscribers and number of cell sites.
"CAPITAL EXPENDITURE" has the meaning given to it in Clause 23.6 (Financial
definitions).
"CASH" means any credit balances on any deposit, savings, current or other
account, and any cash in hand, which is:-
(a) freely withdrawable on demand in Hong Kong; and
(b) not subject to any Security (other than pursuant to any
Security Document).
"CHARGED ASSETS" means the assets over which Security is expressed to be created
pursuant to any Security Document.
"CHARGED SHARES" means any shares or other assets expressed to be secured by a
Share Charge.
"CHARGES" has the meaning given to it in the Security Documents.
"CHARGOR" means any person expressed to create Security pursuant to any Security
Document which shall include SUNDAY and each Credit Net Obligor (except the PRC
Company).
"CLASS" means a class of common shares, preferred shares, loan stock or
equivalent instruments of a company, whenever issued and, for the avoidance of
doubt, each series of ordinary shares, preferred shares, loan stock or
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equivalent instruments in a company, whenever issued and whether or not having
different features, shall be considered as a separate Class.
"COMMITMENT" means a General Facility Commitment, an Equipment Supply Facility
Commitment or a Performance Bond Facility Commitment.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form set out
in Schedule 5 (Form of Compliance Certificate).
"CONFIDENTIALITY UNDERTAKING" means a confidentiality undertaking substantially
in a recommended form of the Asia Pacific Loan Market Association Limited
("APLMA") or, if none is recommended by APLMA, the London Loan Market
Association from time to time or in any other form agreed between MCL and the
Agent.
"CREDIT NET" means each Credit Net Obligor and "CREDIT NET MEMBER" means any one
of these.
"CREDIT NET OBLIGOR" means:
(a) MCL; and
(b) each member of the Group identified in Schedule 1 (Members of
the Group) as a Credit Net Obligor; and
shall include the PRC Company for so long as Clause 21.28 (Non-Credit Net Group
Members) is being complied with in all material respects.
"CREDIT NET PRO FORMA FINANCIAL STATEMENTS" means:
(a) the most recent annual consolidated financial statements of
the Credit Net delivered pursuant to paragraph (a)(ii) of
Clause 22.2 (Annual financial statements); and
(b) the most recent consolidated financial accounts of the Credit
Net in respect of any Accounting Quarter delivered in respect
of sub-paragraph (a)(ii) of Clause 22.1 (Quarterly financial
accounts).
"DEBT SERVICE" has the meaning given to it in Clause 23.6 (Financial
definitions).
"DEBT SERVICE COVERAGE RATIO" has the meaning given to it in Clause 23.6
(Financial definitions).
"DEFAULT" means an Event of Default or any event or circumstance specified in
Clause 25 (Events of Default) which would (with the expiry of a grace period,
the giving of notice, the making of any determination under the Finance
Documents, the passage of time or any combination of any of the foregoing) be an
Event of Default.
"DEFERRED SHAREHOLDERS" means Distacom Hong Kong Limited, Townhill Enterprises
Limited, Parkertex Enterprises Limited, CTS Telecommunications Limited and
Interlink Associates Limited.
"DISTACOM SHAREHOLDERS" means Distacom International Limited, *.
"DSRA" means the debt service reserve account established under Clause 24.12
(Bank accounts) by MCL with the Security Trustee and designated as "DSRA" for
the purpose of holding the DSRA Balance.
"DSRA BALANCE" means, at any time, the balance standing to the credit of the
DSRA at that time.
"EBITDA" has the meaning given to it in Clause 23.6 (Financial definitions).
"EFFECTIVE DATE" means the date this Agreement comes into effect pursuant to
Clause 4.1 (Agreement Effective).
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[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
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"ELIGIBLE GOODS AND SERVICES" means goods and services supplied or provided by
the Supplier pursuant to the terms of the Supply Contract, which are eligible
for financing under the Facility.
"ENVIRONMENT" means living organisms including the ecological systems of which
they form part and the following media:
(a) air (including air within natural or man-made structures,
whether above or below ground);
(b) water (including territorial, coastal and inland waters, water
under or within land and water in drains and sewers); and
(c) land (including land under water).
"ENVIRONMENTAL LAW" means all laws and regulations of any relevant jurisdiction
which:
(a) have as a purpose or effect the protection of, and/or
prevention of harm or damage to, the Environment;
(b) provide remedies or compensation for harm or damage to the
Environment; or
(c) relate to Hazardous Substances or health and safety matters.
"ENVIRONMENTAL LICENCE" means any Authorisation required at any time under
Environmental Law.
"EQUIPMENT SUPPLY FACILITY" means the term facility made available under this
Agreement as described in paragraph (b) of Clause 2.1 (The Facilities) and
sub-paragraph (a)(ii) of Clause 3.1 (Purpose).
"EQUIPMENT SUPPLY FACILITY COMMITMENT" means:-
(a) in relation to the Original Lender, the Total Equipment Supply
Facility Commitments; and
(b) in relation to any other Lender, the amount of any Equipment
Supply Facility Commitment transferred to it under this
Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement.
"EQUITY RIGHTS" means, in respect of any person, any subscriptions, options,
warrants, commitments, pre-emptive rights or agreements of any kind (including
any shareholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of share capital of any Class, or partnership or other ownership interests of
any type in, that person.
"EVENT OF DEFAULT" means any event or circumstance specified as such in Clause
25 (Events of Default).
"EXCEPTED ASSETS" means the rights of any Chargor arising under any of the
following to the extent that those rights are not subject to the relevant
Security because of contractual terms or mandatory provisions of law prohibiting
that Security:-
(a) employment contracts;
(b) agreements or arrangements for the provision of professional
services;
(c) any software licence having an individual contract value of
less than * or its equivalent;
(d) Authorisations (other than the Licences); and
(e) contracts and licences relating to office equipment or office
services having an individual contract value of less than * or
its equivalent; and
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[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
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(f) rights arising under any of the contracts or licences set out
in a letter from MCL to the Agent and the Security Trustee
entitled "Non-Transferable Contracts/Licences over *" in the
Agreed Form.
"EXCESS CASH FLOW" has the meaning given to it in Clause 9.8 (Mandatory
prepayment of Excess Cash Flow).
"EXPANDED FINANCE DOCUMENT" means:-
(a) each Finance Document;
(b) the Intercreditor Agreement (if any); and
(c) the Security Trust Deed.
"EXPANDED SECURITY DOCUMENT" means:-
(a) each Security Document; and
(b) the Security Trust Deed.
"EXPIRY DATE" means, in respect of a Performance Bond, the last day of its Term.
"FACILITY" means the General Facility, the Equipment Supply Facility or the
Performance Bond Facility.
"FACILITY OFFICE" means the office or offices notified by a Lender to the Agent
in writing on or before the date it becomes a Lender (or, following that date,
by not less than five Business Days' written notice) as the office or offices
through which it will perform its obligations under this Agreement and, as the
context requires, the office through which the Issuing Bank will perform its
obligations in respect of any Performance Bond.
"FEE LETTER" means any letter or letters dated on or about the date of this
Agreement between, as the case may be, the Original Lender and MCL, the Agent,
the Security Trustee and MCL (or in the case of the Letter between the Agent,
the Security Trustee and MCL, dated on or about the date of execution of an
Accession Deed and the Security Trust Deed by the Agent and Security Trustee) in
the Agreed Form setting out any of the fees referred to in Clause 13 (Fees).
"FINAL MATURITY DATE" means:-
(a) in respect of the General Facility, 12 July 2006;
(b) in respect of the Equipment Supply Facility, the date falling
90 Months after the date of this Agreement;
(c) in respect of the Performance Bond Facility, 21 October 2011.
"FINANCE DOCUMENT" means:-
(a) this Agreement;
(b) any Performance Bond;
(c) any Fee Letter;
(d) any Accession Deed;
(e) any Hedging Document;
(f) any Security Document,
and any other document designated as such by the Agent and MCL.
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[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
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"FINANCE PARTY" means the Agent, the Security Trustee, the Issuing Bank or a
Lender.
"FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit,
xxxx acceptance or xxxx endorsement facility;
(c) any amount raised pursuant to any note purchase facility or
the issue of bonds, notes, debentures, loan stock or any
similar instrument;
(d) the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with GAAP, be
treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to
the extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial
effect of a borrowing;
(g) 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 of the derivative
instrument shall be taken into account);
(h) preferred shares or shares which are expressed to be
redeemable;
(i) 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
(j) the amount of any liability in respect of any guarantee,
indemnity or Security given for any of the items referred to
in paragraphs (a) to (i) above.
"FINANCIAL OFFICER" means, with respect to any person, the chief financial
officer, principal accounting officer or treasurer of that person.
"GAAP" means generally accepted accounting principles in Hong Kong.
"GENERAL FACILITY" means the term facility made available under this Agreement
as described in paragraph (a) of Clause 2.1 (The Facilities) and sub-paragraph
(a)(i) of Clause 3.1 (Purpose).
"GENERAL FACILITY COMMITMENT" means:-
(a) in relation to the Original Lender, the Total General Facility
Commitments; and
(b) in relation to any other Lender, the amount of any General
Facility Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement.
"GOOD INDUSTRY PRACTICE" means the exercise of that degree of skill, diligence,
prudence, foresight and operating practice which would ordinarily be expected
from an experienced operator engaged in the cellular telecommunications business
in Hong Kong under the same or similar circumstances as MCL.
"GOVERNMENTAL AGENCY" means any government or any governmental agency,
semi-governmental or judicial entity or authority (including any stock exchange
or any self-regulatory organisation established under statute).
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"GROUP" means SUNDAY and its Subsidiaries.
"GROUP STRUCTURE CHART" means the group structure chart set out in Schedule 8
(Group Structure Chart) showing the structure of the Group as at the date of
this Agreement.
"GUARANTOR" means SUNDAY.
"HAZARDOUS SUBSTANCE" means any waste, pollutant, contaminant or other substance
(including any liquid, solid, gas, ion, living organism or noise) that may be
harmful to human health or other life or the Environment or a nuisance to any
person or that may make the use or ownership of any affected land or property
more costly.
"HEDGING BANK" means a Lender (or any Affiliate of a Lender) which accedes as a
Hedging Bank to the Intercreditor Agreement.
"HEDGING DOCUMENT" means any interest or currency rate protection agreement or
other financial hedging arrangement entered or to be entered into by MCL with a
Hedging Bank Agreed Hedging Policy pursuant to the Hedging Policy.
"HEDGING POLICY" means the hedging policy (including a policy of not hedging if
appropriate) to be agreed between MCL and the Lenders by no later than 31 July
2004 (or such later date as the Lenders and MCL may agree) and recorded as a
letter titled "Hedging Policy" signed by the Lenders and MCL and notified to the
Agent.
"HIBOR" means, in relation to any Loan:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the currency or Interest
Period of that Loan) the arithmetic mean of the rates (rounded
upwards to four decimal places) as supplied to the Agent at
its request quoted by the Reference Banks to leading banks in
the Relevant Interbank Market,
as of the Specified Time on the Quotation Day for the offering of deposits in HK
Dollars and for a period comparable to the Interest Period for that Loan.
"HK$" or "HK DOLLARS" means the lawful currency of Hong Kong.
"HOLDING COMPANY" means, in relation to a company or corporation, any other
company or corporation in respect of which it is a Subsidiary.
"HONG KONG" means the Hong Kong Special Administrative Region of the People's
Republic of China.
"HONG KONG GENERAL SECURITY DOCUMENT" means the document given that title in a
form to be agreed by MCL and the Original Lender (each acting reasonably) under
which each Obligor (except SUNDAY and the PRC Company) is expressed to grant
Security to the Security Trustee for the benefit of the Secured Creditors over
substantially all their assets (excluding any Charged Shares and Subordinated
Debt which is secured under another Security Document).
"HTIC" means Huawei Tech. Investment Co. Limited, a limited liability company
incorporated under the laws of Hong Kong.
"HUAWEI" means Huawei Technologies Co., Ltd., a company incorporated under the
laws of the PRC.
"INDIRECT TAX" means any goods and services tax, consumption tax, value added
tax or any tax of a similar nature.
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"INFORMATION MEMORANDUM" means the document dated "April 2004", in the form
approved by MCL concerning the Group which, at MCL's request and on its behalf,
was prepared in relation to this transaction and distributed to Sinosure.
"INTELLECTUAL PROPERTY RIGHTS" means all patents, designs, copyrights,
topographies, trade marks, service marks, trading names, domain names, rights in
confidential information and know-how, any other intellectual property and any
associated or similar rights, and any interest in any of the foregoing (in each
case whether registered or unregistered and including any related licences and
sub-licences of the same, applications and rights to apply for the same and
wherever subsisting).
"INTERCREDITOR AGREEMENT" means any intercreditor agreement entered into between
the Original Lender, the Agent, the Security Trustee, each Hedging Bank and the
Issuing Bank in the Agreed Form.
"INTEREST COVERAGE RATIO" has the meaning given to it in Clause 23.6 (Financial
definitions).
"INTEREST PERIOD" means, in relation to a Loan, each period determined in
accordance with Clause 11 (Interest Periods) and, in relation to an Unpaid Sum,
each period determined in accordance with Clause 10.3 (Default interest).
"INVESTMENT" means, for any person:
(a) the acquisition (whether for cash, property, services or
securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other
securities of any other person or any agreement to make any
such acquisition (including any "short sale" or any sale of
any securities at a time when such securities are not owned by
the person entering into such sale);
(b) the making of any deposit with, or advance, loan or other
extension of credit to, any other person (including the
purchase of property from another person subject to an
understanding or agreement, contingent or otherwise, to resell
such property to that person), but excluding any such advance,
loan or extension of credit having a term not exceeding 90
days arising in connection with the sale of inventory or
supplies by that person in the ordinary course of business; or
(c) the entering into of any guarantee of, or other contingent
obligation with respect to, Financial Indebtedness or other
liability of any other person and (without duplication) any
amount committed to be advanced, lent or extended to that
person.
"INVOICE" means an invoice issued by the Supplier under or in connection with
the Supply Contract.
"ISSUING BANK" means a bank or financial institution that accedes to this
Agreement as issuer of the Performance Bond pursuant to an Accession Deed.
"LENDER" means:-
(a) the Original Lender; and
(b) any bank, financial institution, trust fund or other entity
which has become a Party in accordance with Clause 26 (Changes
to the Lenders) and which has not ceased to be a Lender under
this Agreement.
"LICENCES" means:
(a) the 2G Licence;
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(b) the 3G Licence; and
(c) any material licence (i) granted by OFTA or (ii) required
pursuant to the Telecommunications Ordinance in connection
with the MCL Group's business.
"LOAN" means a loan made or to be made under any Facility or the principal
amount outstanding for the time being of that loan.
"LOAN FACILITIES" means the General Facility and the Equipment Supply Facility,
each a "LOAN FACILITY".
"MAJORITY LENDERS" means:
(a) if there are no Utilisations then outstanding, a Lender or
Lenders whose Commitments aggregate more than 66 2/3% of the
Total Commitments (or, if the Total Commitments have been
reduced to zero, aggregated more than 66 2/3% of the Total
Commitments immediately prior to the reduction); or
(b) at any other time a Lender or Lenders whose participations in
the Utilisations then outstanding aggregate more than 66 2/3%
of the aggregate of all the Utilisations then outstanding.
"MATERIAL ADVERSE EFFECT" means an event, matter, circumstance, action or
omission or a change in the circumstances of an Obligor or Chargor which in the
opinion of the Majority Lenders, acting reasonably, does, will or could
reasonably be expected to have a material adverse effect on:
(a) the business, operations, property, condition (financial or
otherwise) or prospects of MCL, SUNDAY or the MCL Group;
(b) the ability of an Obligor or Chargor to perform or comply with
its obligations under any Relevant Document to which it is a
party; or
(c) the legality, validity or enforceability of any Finance
Document, the validity, priority or value of the Security
granted under the Security Documents or the rights, interests
or remedies of any Finance Party under any Finance Document.
"MATERIAL AGREEMENT" means any material agreement to which any member of the
Group is a party for the time being and the termination or amendment of which
could reasonably be expected to have a Material Adverse Effect, including:
(a) the Supply Contract;
(b) each Licence;
(c) each Software Licence;
(d) each Material Licence Agreement;
(e) the Nortel Purchase and Services Agreement;
(f) any guarantee given by any person in respect of any of the
obligations of any party (other than a member of the MCL
Group) under any of (a) to (e) above;
(g) any other agreement that is designated as a "Material
Agreement" by MCL and the Agent; and
(h) any document that replaces or supplements any of (a) to (f)
above.
"MATERIAL INTELLECTUAL PROPERTY" means:
10
(a) the trade marks and other rights described in the Material
Intellectual Property List; and
(b) in relation to any member of the Group, the Intellectual
Property Rights (i) required by it to carry on any material
part of its business as it is then being conducted or (ii) any
other Intellectual Property Rights which are material to the
business of the Group taken as a whole.
"MATERIAL INTELLECTUAL PROPERTY LIST" means the list titled "MATERIAL
INTELLECTUAL PROPERTY LIST" to be agreed between MCL and the Lenders and to be
provided to the Agent pursuant to Clause 4.2(b) (Initial conditions precedent)
and paragraph 9(a) of Schedule 2 (Conditions Precedent) identifying key
intellectual property (including the brand names) held by members of the Group.
"MATERIAL LICENCE AGREEMENTS" means each of the Agreements listed in Schedule 11
(Material Licence Agreements).
"MAXIMUM DEBT: EBITDA RATIO" has the meaning given to it in of Clause 23.1
(Financial Condition (Credit Net)).
"MCL" means Mandarin Communications Limited.
"MCL GROUP" means MCL and its Subsidiaries.
"MCL ORDINARY SHARES" means those issued ordinary shares issued by MCL and held
by SUNDAY Holdings (as to 99) and SUNDAY Hong Kong (as to one, as nominee
shareholder on trust for and on behalf of SUNDAY Holdings) on the date of this
Agreement or other shares issued by MCL with substantially the same rights as
those ordinary shares.
"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:
(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;
and
(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.
The above rules will only apply to the last Month of any period.
"NETWORK" means the 2G Network and, when completed, the 3G Network and includes
all apparatus, equipment and telecommunication systems of every description
which the Group is authorised to operate or run under the Licences and all
modifications, substitutions, replacements, renewals and extensions made to such
networks.
"NON-CREDIT NET GROUP MEMBER" means SUNDAY and each other member of the Group
which is not a Credit Net Obligor, and any other entity designated as such by
MCL and the Agent.
"NORTEL PURCHASE AND SERVICES AGREEMENT" means the agreement titled "Purchase
and Services Agreement" between Nortel Networks (Asia) Limited and MCL dated 24
December 2001, as amended by an Amendment Agreement dated 21 June 2002 and a
Second Amendment Agreement dated 22 October 2003.
"OBLIGOR" means, at any relevant time:
(a) MCL;
(b) SUNDAY; and
11
(c) each Credit Net Obligor.
"OFTA" means the Office of the Telecommunications Authority of Hong Kong or any
successor.
"OPENING NET CASH BALANCE" means on any date, any positive amount equal to the
sum of all Cash and Permitted Investments held by each Credit Net Member on that
day.
"ORIGINAL FINANCIAL STATEMENTS" means:
(a) the audited consolidated financial statements of SUNDAY for
the financial year ended 31 December 2003; and
(b) the audited consolidated and unaudited non-consolidated
financial statements of MCL for the financial year ended 31
December 2003.
"ORIGINAL OBLIGOR" means MCL and SUNDAY.
"PARTY" means a party to this Agreement and includes its successors-in-title,
permitted assigns and permitted transferees.
"PERFECTION REQUIREMENTS" means:
(a) payment of all documentary taxes and duties required to be
paid in each relevant jurisdiction in order for the relevant
Security Document to be admissible in evidence in the courts
of that jurisdiction and valid, binding and enforceable (all
as contemplated, and qualified, by any legal opinion accepted
pursuant to Clause 4 (Conditions of Utilisation) or Clause 27
(Changes to the Obligors)); and
(b) the making of any registration, the giving of any notice or
the obtaining of any Authorisation which is required in order
to make the relevant Security Document enforceable in the
jurisdiction of the law governing that Security Document and
(if requested by the Agent or the Security Trustee, acting
reasonably) the jurisdiction in which the principal assets
secured by that Security Document are situate (all as
contemplated, and qualified, by any legal opinion accepted
pursuant to Clause 4 (Conditions of Utilisation) or Clause 27
(Changes to the Obligors)).
"PERFORMANCE BOND" means a performance bond issued or to be issued under the
Performance Bond Facility in the form specified by OFTA and pursuant to and as
required by the 3G Licence or such other form as may be agreed by the Issuing
Bank and OFTA.
"PERFORMANCE BOND FACILITY" means the performance bond issuance facility made
available under this Agreement as described in paragraph (c) of Clause 2.1 (The
Facility) and paragraph (b) of Clause 3.1 (Purpose).
"PERFORMANCE BOND FACILITY COMMITMENT" means:
(a) in relation to the Original Lender, the Total Performance Bond
Facility Commitments; and
(b) in relation to any other Lender, the amount of any Performance
Bond Facility Commitment transferred to it under this
Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement.
"PERMITTED BANK ACCOUNTS" means each bank account maintained by the Obligors and
the PRC Company in Hong Kong with the Security Trustee, the Agent or one of the
Lenders for the purpose of operating its banking functions and the accounts as
permitted under paragraph (a)(iii) of Clause 24.12 (Bank accounts).
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"PERMITTED DCS" means letters of credit, bank guarantees or performance bonds
required to be provided by MCL in the ordinary course of business up to an
aggregate value of HK$ 10,000,000 (other than the Performance Bond).
"PERMITTED EXTERNAL BANK ACCOUNTS" means those bank accounts maintained by
members of the Group set out in the document titled "List of Permitted External
Bank Accounts" in the Agreed Form.
"PERMITTED FINANCIAL INDEBTEDNESS" means those types of Financial Indebtedness
set out in paragraph (b) of Clause 24.9 (Restrictions on borrowings).
"PERMITTED INVESTMENTS" means:-
(a) securities with a maturity of less than 12 months from the
date of acquisition issued or fully guaranteed or insured by
the Government of Hong Kong, the United States, Japan,
Switzerland or any member state of the European Union which is
rated at least AA by Standard & Poor's Rating Group or Aa by
Xxxxx'x Investor Service, Inc.;
(b) commercial paper or other debt securities issued by an issuer
rated at least A by Standard & Poor's Ratings Group or P-1 by
Xxxxx'x Investors Service, Inc. and with a maturity of less
than 271 days; and
(c) certificates of deposit or time deposits of any commercial
bank (which has outstanding debt securities rated as referred
to in paragraph (b) above) and with a maturity of less than
180 days,
in each case denominated and payable in HK Dollars or US Dollars, not subject to
any Security (other than pursuant to any Security Document) and the proceeds of
which are capable of being remitted to an Obligor in Hong Kong.
"PERMITTED TRADE SECURITY" means:
(a) security imposed by law for Taxes that are not yet due or are
being contested in compliance with paragraph (b) of Clause
24.30 (Taxes);
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other similar Security imposed by law, arising
in the ordinary course of business and securing obligations
that are not overdue by more than 30 days or are being
contested in good faith and by appropriate means;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) cash deposits or guarantees provided to public utilities in
the PRC or Hong Kong, in each case in the ordinary course of
business;
(e) any attachments, distress or execution that do not constitute
an Event of Default under Clause 25.8 (Creditors' process);
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of
the affected property or materially interfere with the
ordinary conduct of business of any member of the Group; and
(g) Security over the moneys (not exceeding * or its equivalent in
aggregate) placed with issuers of Permitted DCs as cash
collateral for any Permitted DCs,
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[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
13
provided that the term "Permitted Trade Security" shall not include any Security
securing Financial Indebtedness other than Security referred to in paragraph (g)
above.
"PKI HOLDINGS" means PKI Holdings Limited, a limited liability company
incorporated under the laws of the British Virgin Islands.
"PRC" means the People's Republic of China (excluding the Special Administrative
Regions of Hong Kong and Macau).
"PRC COMPANY" means SUNDAY Shenzhen.
"PRC SECURITY DOCUMENT" means the document given that title in a form to be
agreed by MCL and the Original Lender (each acting reasonably) under which
SUNDAY China Holdings grants security over its ownership interests in the PRC
Company.
"PREPAYMENT ACCOUNT" means the account established under paragraph (b) of Clause
9.9 (Prepayment Account) by MCL with the Security Trustee and designated as
"Prepayment Account" for the purpose of holding funds paid under paragraph (b)
of Clause 9.9 (Prepayment Account) and/or (as appropriate) any sub-account of
that account established to hold moneys in different currencies or which are
attributable to a particular type of Proceeds (as defined in Clause 9.9
(Prepayment Account)).
"PROJECTED DEBT SERVICE" has the meaning given to that term by Clause 23.6
(Financial definitions).
"QUOTATION DAY" means, in relation to any period for which an interest rate is
to be determined the first day of that period.
"REFERENCE BANKS" means the principal Hong Kong offices of Citibank N.A., The
Hongkong and Shanghai Banking Corporation Limited and Bank of China (Hong Kong)
Limited or such other banks as may be appointed by the Agent with the agreement
of MCL.
"REFINANCING ACCOUNT" means the account established by MCL with the Security
Trustee and designated as "Refinancing Account" for the purpose of holding funds
paid under Clause 9.3 (Mandatory prepayment from New Borrowings Proceeds).
"RELEVANT DOCUMENTS" means:-
(a) the Expanded Finance Documents; and
(b) the Material Agreements.
"RELEVANT INTERBANK MARKET" means the Hong Kong inter-bank market.
"RELEVANT PERIOD" has the meaning given to it in Clause 23.6 (Financial
definitions).
"REPAYMENT DATES" means each date specified in Clause 8 (Repayment) for the
payment of the relevant Repayment Instalment.
"REPAYMENT INSTALMENT" means each instalment for repayment of the Loans
specified in Clause 8 (Repayment).
"REPEATING REPRESENTATIONS" means each of the representations set out in Clause
21 (Representations) other than 21.8 (Deduction of Tax), 21.9 (Filings and stamp
taxes), paragraph (b) of Clause 21.10 (No default), 21.11 (No misleading
information), 21.14 (No proceedings pending or threatened), 21.18 (Environmental
laws and licences), 21.19 (Environmental releases), 21.20 (Group Structure), in
respect of SUNDAY only, 21.21 (No
14
Financial Indebtedness or Security) 21.22(b) (Intellectual Property Rights),
21.26(f), (g), (h) and (i) (Material Agreements and Licences), 21.27 (Business
Plan) and 21.29 (Distacom Shareholders).
"REQUIRED DSRA BALANCE" has the meaning given to that term by Clause 23.2
(Maintenance of DSRA Balance).
"RESTRICTED PERSON" means: *
"RE-USABLE DISPOSAL PROCEEDS ACCOUNT" means the account established by MCL with
the Security Trustee and designated "Re-usable Disposal Proceeds Account" for
the purpose of holding funds paid under paragraph (c)(ii)(A) of Clause 9.5
(Mandatory prepayment from Disposal Proceeds).
"RE-USABLE INSURANCE PROCEEDS ACCOUNT" means the account established by MCL with
the Security Trustee and designated as "Re-usable Insurance Proceeds Account"
for the purpose of holding funds paid under paragraph (c)(iii)(A) of Clause 9.6
(Mandatory prepayment from Insurance Proceeds).
"RMB" means the lawful currency of the PRC.
"SCREEN RATE" means the rate for the relevant Benchmark Rate and for the
relevant Interest Period displayed on the Bridge-Telerate page 9898. If the
agreed page or service is replaced or ceases to be available, the Agent may,
after consultation with MCL and the Lenders, specify another page or service
displaying the appropriate rate.
"SCHEDULE OF INTRA-GROUP AND EXTERNAL BORROWINGS" means the document in the
Agreed Form given that title and delivered to the Agent pursuant to Clause 4.2
(Initial conditions precedent) and paragraph 9(c) of Schedule 2 (Conditions
Precedent).
"SECURED ACCOUNTS" means:-
(a) the DSRA;
(b) the Prepayment Account;
(c) the Refinancing Account;
(d) the Re-usable Insurance Proceeds Account;
(e) the Re-usable Disposal Proceeds Account,
and any other account opened by any Obligor and designated by that Obligor and
the Agent as a "Secured Account".
"SECURED CREDITORS" means the Finance Parties and any Hedging Bank(s) (and
"SECURED CREDITOR" means any one of them).
"SECURED OBLIGATIONS" of an Obligor means all present and future moneys, debts
and liabilities due, owing or incurred by it to any Secured Creditor under or in
connection with any Finance Document (in each case, whether alone or jointly, or
jointly and severally, with any other person, whether actually or contingently
and whether as principal, surety or otherwise).
"SECURITY" means, with respect to any asset,
(a) any deed of trust, pledge, hypothecation, encumbrance, charge
or security interest in, on or of such asset,
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[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
15
(b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic
effect as any of the foregoing) relating to such asset and
(c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities
or
any other agreement or arrangement having a similar effect to any of these.
"SECURITY DOCUMENTS" means:-
(a) the Hong Kong General Security Document;
(b) the PRC Security Document;
(c) the Share Charge; and
(d) each Subordination Deed,
and any other security document that may at any time be given as security for
any of the Secured Obligations pursuant to or in connection with any Finance
Document.
"SECURITY PROPERTY" means all right, title and interest in, to and under any
Security Document, including:-
(a) the Charged Assets;
(b) the benefits of the undertakings in each Finance Document; and
(c) all sums received by or recovered by the Security Trustee
pursuant to any Finance Document and any assets representing
the same.
"SECURITY TRUST DEED" means the trust deed entered into by the Security Trustee
in relation to the Security Documents in the Agreed Form.
"SECURITY TRUSTEE" means a bank or financial institution that executes the
Security Trust Deed as security trustee for the Secured Creditors.
"SELECTION NOTICE" means a notice substantially in the form set out in Part IV
of Schedule 3 (Requests) given in accordance with Clause 11 (Interest Periods)
in relation to the Loan Facilities .
"SHARE CHARGE" means the document given that title in a form to be agreed by MCL
and the Original Lender (each acting reasonably) under which all relevant
Obligors grant Security to the Security Trustee for the benefit of the Secured
Creditors over the shares owned or held by them in members of the Group
incorporated in Hong Kong or the British Virgin Islands.
"SINOSURE" means the China Export and Credit Insurance Corporation, the wholly
state-owned official export credit insurance agency of the PRC.
"SINOSURE CONDITIONS" means those conditions which will apply to the Sinosure
Insurance.
"SINOSURE DOCUMENTS" means the Sinosure Insurance, the Sinosure Offer, the
Sinosure Conditions, and any other documents related to the Sinosure Offer and
the Sinosure Insurance required by Sinosure.
"SINOSURE INSURANCE" means the policy of insurance which may be issued by
Sinosure in favour of the Agent on behalf of the Finance Parties in respect of
MCL's obligations in respect of such portion of the Equipment Supply Facility as
Sinosure may agree.
16
"SINOSURE OFFER" means the written offer which may be made by Sinosure,
confirming its agreement to provide the Sinosure Insurance in respect of such
portion of the Equipment Supply Facility as Sinosure may agree.
"SINOSURE PREMIUM" means the premium payable to Sinosure under the Sinosure
Insurance.
"SOFTWARE LICENCE" means all material licences of software developed by or
licenced to MCL and/or any of its Subsidiaries which are necessary for the
operation of its business or are issued pursuant to any Material Agreement,
including the software listed in the Software Licence List.
"SOFTWARE LICENCE LIST" means the list titled "SOFTWARE LICENCE LIST" to be
agreed between MCL and the Lenders and provided to the Agent pursuant to Clause
4.2(b) (Initial conditions precedent) and paragraph 9(b) of Schedule 2
(Conditions Precedent) identifying key software licences held by members of the
Group.
"SPECIFIED TIME" means a time determined in accordance with Schedule 6
(Timetables).
"STOCK EXCHANGE" means The Stock Exchange of Hong Kong Limited, the NASDAQ
exchange of New York and/or any other stock exchange approved by the Majority
Lenders.
"SUBORDINATED" means fully subordinated in right, time and priority of payments
to all amounts outstanding under the Finance Documents.
"SUBORDINATED DEBT" means any unsecured present or future obligation or
liability (actual or contingent) of any member of the MCL Group and any other
Credit Net Obligor:
(a) to a member of the Group which is Subordinated pursuant to the
terms of a Subordination Deed; or
(b) to any other person which is Subordinated on terms and
conditions satisfactory to the Agent.
"SUBORDINATION DEED" means a document given that title in a form to be agreed by
MCL and the Original Lender (each acting reasonably) under which each relevant
Obligor or other person subordinates all Financial Indebtedness owed to it by a
Credit Net Obligor or other member of the MCL Group behind all Secured
Obligations.
"SUBORDINATED LOAN AGREEMENT" means an agreement in the Agreed Form between the
lender and MCL of Subordinated Debt setting out the terms on which that
Subordinated Debt is made available and which has not been disapproved by the
Agent under paragraph (d) of Clause 24.9 (Restrictions on borrowings).
"SUBSCRIBERS" means the 2G Subscribers and the 3G Subscribers.
"SUBSIDIARY" means in relation to any company or corporation (a "HOLDING
COMPANY"), a company or corporation:-
(a) which is controlled, directly or indirectly, by the holding
company;
(b) more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the holding
company; or
(c) which is a Subsidiary of another Subsidiary of the holding
company,
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 control the composition of the majority of its board of directors
or equivalent body.
17
"SUNDAY" means SUNDAY Communications Limited, a company publicly listed (on the
Stock Exchange of Hong Kong Limited and NASDAQ in the United States) and
incorporated under the laws of the Cayman Islands.
"SUNDAY 3G" means SUNDAY 3G (Hong Kong) Limited, a limited liability company
incorporated under the laws of Hong Kong.
"SUNDAY 3G HOLDINGS" means SUNDAY 3G Holdings (Hong Kong) Corporation, a limited
liability company incorporated under the laws of the British Virgin Islands.
"SUNDAY CHINA HOLDINGS" means SUNDAY Holdings (China) Corporation, a limited
liability company incorporated under the laws of the British Virgin Islands.
"SUNDAY HOLDINGS" means SUNDAY Holdings (Hong Kong) Corporation, a limited
liability company incorporated under the laws of the British Virgin Islands.
"SUNDAY HONG KONG" means SUNDAY (Hong Kong) Limited, a limited liability company
incorporated under the laws of the British Virgin Islands.
"SUNDAY IP" means SUNDAY IP Limited, a limited liability company incorporated
under the laws of the British Virgin Islands.
"SUNDAY IP HOLDINGS" means SUNDAY IP Holdings Corporation, a limited liability
company incorporated under the laws of the British Virgin Islands.
"SUNDAY SHENZHEN" means SUNDAY Communications Services (Shenzhen) Limited, a
wholly foreign-owned enterprise incorporated as a limited liability company
under the laws of the PRC.
"SUPPLIER" means Huawei or any Affiliate of Huawei.
"SUPPLY CONTRACT" means the agreement dated on or about the date of this
Agreement and entered into between MCL and Huawei or an Affiliate of Huawei to
govern the engineering, procurement and construction by Huawei or such Affiliate
of the 3G Network, together with any amendment, variation or supplement to that
agreement which has been approved by the Agent (acting reasonably).
"SUPPLY CONTRACT UTILISATION REQUEST" means a Utilisation Request applicable to
a Loan under the Equipment Supply Facility.
"SYNDICATION" means any syndication of the whole or any part of the Facilities
by such means as the Original Lender may consider appropriate including pursuant
to Clause 26.5 (Procedure for transfer).
"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).
"TELECOMMUNICATIONS ORDINANCE" means the Telecommunications Ordinance (Cap. 106
of the Laws of Hong Kong).
"TERM" means each period determined under this Agreement for which the Issuing
Bank is under a liability under a Performance Bond.
"TOTAL COMMITMENTS" means the aggregate of the Total General Facility
Commitments, the Total Equipment Supply Facility Commitments and the Total
Performance Bond Facility Commitments or, when used in relation to a specific
Facility, means the Total General Facility Commitments, the Total Equipment
Supply Facility Commitments or the Total Performance Bond Facility Commitments,
as the case may be.
18
"TOTAL EQUIPMENT SUPPLY FACILITY COMMITMENTS" means the aggregate of the
Equipment Supply Facility Commitments, being HK$859,000,000 at the date of this
Agreement.
"TOTAL GENERAL FACILITY COMMITMENTS" means the aggregate of the General Facility
Commitments, being HK$500,000,000 at the date of this Agreement.
"TOTAL PERFORMANCE BOND FACILITY COMMITMENTS" means the aggregate of the
Performance Bond Facility Commitments, being at the date of this Agreement, in
respect of each period specified in Schedule 9 (Performance Bond), the amount
set out opposite such period in Schedule 9 (Performance Bond).
"TRANSFER CERTIFICATE" means a certificate substantially in the forms set out in
Schedule 4 (Form of Transfer Certificate) or any other form agreed between the
Agent and MCL.
"TRANSFER DATE" means, in relation to a transfer, the later of:-
(a) the proposed Transfer Date specified in the Transfer
Certificate; and
(b) the date on which the Agent executes the Transfer Certificate.
"UNPAID SUM" means any sum due and payable but unpaid by an Obligor under the
Finance Documents.
"US$' or "US DOLLARS" means United States dollars.
"UTILISATION" means a utilisation of a Facility, whether by way of Loan or the
issuance of a Performance BOND.
"UTILISATION DATE" means the date of a Utilisation being the date on which the
relevant Loan is or is to be made or Performance Bond is or is to be issued, as
the case may be.
"UTILISATION REQUEST" means, in relation to the Loan Facilities, a notice
substantially in the form set out (in relation to a Loan under the General
Facility) in Part I of Schedule 3 (Requests) or (in relation to a Loan under the
Equipment Supply Facility) in Part II of Schedule 3 (Requests) and, in relation
to the Performance Bond Facility, a notice substantially in the form set out in
of Part III of Schedule 3 (Requests).
"WORKING CAPITAL" has the meaning given to it in Clause 23.6 (Financial
definitions).
1.2 CONSTRUCTION
(a) Unless a contrary indication appears, any reference in this Agreement
to:-
(i) a person "ACTING IN CONCERT" with another person has the
meaning given to it in the Codes on Takeovers and Mergers and
Share Repurchases published from time to time by the
Securities and Futures Commission of Hong Kong;
(ii) the "AGENT", any "FINANCE PARTY", the "ISSUING BANK", a
"HEDGING BANK", any "LENDER", any "OBLIGOR" any "CREDIT NET
OBLIGOR", any "CREDIT NET MEMBER", any "CHARGOR", any "PARTY",
any "SECURED CREDITOR" or the "SECURITY TRUSTEE" shall be
construed so as to include its successors in title, permitted
assigns and permitted transferees;
(iii) "ASSETS" includes present and future properties, revenues and
rights of every description;
(iv) the "CONTROL" of one person by another or one person being
"CONTROLLED" by another means that other (whether directly or
indirectly and whether by the ownership of share capital, the
possession of voting power, contract or otherwise) has the
power to appoint and/or remove all or the majority of the
members of the Board of Directors or other governing body of
that person or otherwise controls or has the power to control
the affairs and policies of that person;
19
(v) the "EQUIVALENT" in any currency (the "FIRST CURRENCY") of any
amount in another currency (the "SECOND CURRENCY") shall be
construed as a reference to the amount in the first currency
which could be purchased with that amount in the second
currency at the Agent's Spot Rate of Exchange for the purchase
of the first currency with the second currency in the Hong
Kong foreign exchange market at or about the relevant time on
the relevant date specified in this Agreement (or, where no
such time and date is specified, at or about such time and on
such date as the Agent may from time to time reasonably
determine to be appropriate in the circumstances);
(vi) a "FINANCE DOCUMENT", "EXPANDED FINANCE DOCUMENT", "SECURITY
DOCUMENT" or any other agreement, deed or instrument is a
reference to that document or other agreement, deed or
instrument as amended or novated;
(vii) "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;
(viii) a "PERSON" includes any person, firm, company, corporation,
government, state or agency of a state or any association,
trust or partnership (whether or not having separate legal
personality) or two or more of the foregoing;
(ix) a "REGULATION" includes any 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;
(x) a PROVISION OF LAW is a reference to that provision as amended
or re-enacted;
(xi) a TIME OF DAY is a reference to Hong Kong time;
(xii) an amount borrowed includes any amount utilised by way of
issuance of a Performance Bond;
(xiii) a Lender funding its participation in a Utilisation includes a
Lender participating in a Performance Bond;
(xiv) amounts outstanding under this Agreement include amounts
outstanding under any Performance Bond;
(xv) an outstanding amount of a Performance Bond at any time is the
maximum amount for which the Issuing Bank is or may be liable
under that Performance Bond at that time;
(xvi) MCL "REPAYING" or "PREPAYING" a Performance Bond means:
(A) MCL providing cash collateral for that Performance
Bond;
(B) the maximum amount payable under the Performance Bond
being reduced in accordance with its terms; or
(C) the Issuing Bank being satisfied that it has no
further liability under that Performance Bond,
and the amount by which a Performance Bond is repaid or
prepaid under sub-paragraphs (xvi)(A) and (xvi)(B) above is
the amount of the relevant cash collateral or reduction;
(xvii) MCL providing "CASH COLLATERAL" for a Performance Bond means
MCL paying an amount in the currency of the Performance Bond
to an interest-bearing account in the name of MCL and the
following conditions being met:
20
(A) the account is with the Agent (if the cash collateral
is to be provided for all the Lenders) or with a
Lender (if the cash collateral is to be provided for
that Lender);
(B) withdrawals from the account may only be made to pay
a Finance Party amounts due and payable to it under
this Agreement in respect of that Performance Bond
until no amount is or may be outstanding under that
Performance Bond; and
(C) MCL has executed a security document over that
account, in form and substance satisfactory to the
Agent or the Finance Party (acting reasonably) with
which that account is held, creating a first ranking
security interest over that account; and
(xviii) the terms "INCLUDE", "INCLUDES" and "INCLUDING" shall be
construed without limitation.
(b) A document is in the "AGREED FORM":-
(i) if it is in a form identified by or on behalf of MCL and the
Original Lender on or before the signing of this Agreement as
being in agreed form; or
(ii) if not falling within paragraph (i) above, if it is in form
and substance satisfactory to the Agent (acting reasonably)
and identified by or on behalf of the Agent as being in agreed
form.
(c) SECTION, CLAUSE and SCHEDULE headings are for ease of reference only.
(d) Unless otherwise stated, references to Clauses and Schedules are to
clauses of and schedules to this Agreement.
(e) Words importing the singular shall include the plural and vice versa,
words importing the masculine, genuine or neuter gender shall include
the others of them.
(f) Unless a contrary indication appears, a term used in any other Expanded
Finance Document or in any notice or certificate given under or in
connection with any Expanded Finance Document has the same meaning in
that Expanded Finance Document, notice or certificate as in this
Agreement.
(g) A Default or Event of Default is "CONTINUING" if it has not been
remedied or waived.
(h) To the extent that one person is the only Lender, all references in the
Expanded Finance Documents to the Lenders shall be read and construed
as if they were references to a single Lender and grammatical and other
changes necessary to give effect to such construction shall be deemed
to have been made.
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SECTION 2
THE FACILITIES
2. THE FACILITIES
2.1 THE FACILITIES
Subject to the terms of this Agreement, the Lenders make available to
MCL:-
(a) a HK Dollar term loan facility in an aggregate amount equal to
the Total General Facility Commitments to be drawn in one lump
sum;
(b) a HK Dollar term loan facility in an aggregate amount equal to
the Total Equipment Supply Facility Commitments; and
(c) a HK Dollar performance bond issuance facility in an aggregate
amount equal to the Total Performance Bond Facility
Commitments.
2.2 FINANCE PARTIES' RIGHTS AND OBLIGATIONS
(a) The obligations of each Finance Party under the Finance
Documents are several. Failure by a Finance Party to perform
its obligations under the Finance Documents does not affect
the obligations of any other Party under the Finance
Documents. No Finance Party is responsible for the obligations
of any other Finance Party under the Finance Documents.
(b) The rights of each Finance Party under or in connection with
the Finance Documents are separate and independent rights and
any debt arising under the Finance Documents to a Finance
Party from an Obligor shall be a separate and independent
debt.
(c) A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance
Documents.
3. PURPOSE
3.1 PURPOSE
(a) All amounts borrowed by MCL under the Loan Facilities shall be applied
as follows:
(i) with respect to the General Facility, to refinance the
Bridging Loan in one lump sum; and
(ii) with respect to the Equipment Supply Facility, in payment of,
and for an amount representing the total purchase price for,
Eligible Goods and Services pursuant to the Supply Contract.
(b) MCL may request the issue of Performance Bonds under the Performance
Bond Facility if required by OFTA under the 3G Licence.
3.2 MONITORING
No Finance Party is bound to monitor or verify the application of any
amount borrowed pursuant to this Agreement.
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4. CONDITIONS OF UTILISATION
4.1 AGREEMENT EFFECTIVE
Notwithstanding any term to the contrary in this Agreement or any other
Expanded Finance Document, this Agreement (and any Expanded Finance
Document which pre-dates such date) shall come into effect upon the
date upon which the conditions precedent specified in paragraphs 1(d)
and 7(a) of Schedule 2 have both been satisfied in full, and no Obligor
shall assume any obligations or have the benefit of any rights under it
(or them) until such date.
4.2 INITIAL CONDITIONS PRECEDENT
(a) MCL may not deliver a Utilisation Request for a Utilisation under the
Equipment Supply Facility or the Performance Bond Facility until after
the Loan under the General Facility has been advanced.
(b) MCL shall not deliver a Utilisation Request unless the Agent has (i)
received all of the documents and other evidence listed in and
appearing to comply with the requirements of Schedule 2 (Conditions
precedent) or (ii) acting on the instruction of the Majority Lenders,
waived the requirement to receive any of these (other than paragraph 3
thereof which only MCL may waive). The Agent shall notify MCL and the
Lenders promptly upon receiving such documents and other evidence.
4.3 FURTHER CONDITIONS PRECEDENT
The Lenders and the Issuing Bank will only be obliged to comply with
Clause 5.4 (Lenders' participation) if, on the date of the Utilisation
Request and on the proposed Utilisation Date:
(a) in the case of the Utilisation of the General Facility the
Agent has received a written confirmation from HTIC on or
before the first Utilisation Date identifying the amount that
will be required for the Bridging Loan to be fully repaid or
prepaid on the first Utilization Date;
(b) no Default is continuing or would result from the proposed
Loan or issue of the Performance Bond;
(c) the Repeating Representations to be made by each Obligor are
true in all material respects; and
(d) in respect of the Performance Bond Facility, the request of
OFTA for a Performance Bond remains valid and effective.
4.4 MAXIMUM AMOUNT OF LOANS/PERFORMANCE BOND
MCL may not deliver a Utilisation Request if, as a result of the
proposed Utilisation:
(a) the aggregate principal amount outstanding under the General
Facility would exceed the Total General Facility Commitments;
(b) the aggregate principal amount outstanding under the Equipment
Supply Facility would exceed the Total Equipment Supply
Facility Commitments; and
(c) the aggregate principal amount outstanding under the
Performance Bond Facility would exceed the Total Performance
Bond Facility Commitments applicable on the proposed
Utilisation Date.
4.5 MAXIMUM NUMBER OF LOANS AND PERFORMANCE BOND
(a) MCL may not deliver a Utilisation Request if as a result of
the proposed Utilisation:
(i) 5 or more Loans under the Equipment Supply Facility
would be outstanding; or
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(ii) more than one Loan under the General Facility would
be outstanding.
(b) MCL may not request that a Loan be divided if, as a result of
the proposed division:
(i) 5 or more Loans under the Equipment Supply Facility
would be outstanding; or
(ii) more than one Loan under the General Facility would
be outstanding.
(c) MCL may not deliver a Utilisation Request if as a result of
the proposed Utilisation more than one Performance Bond would
be outstanding at any time.
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SECTION 3
UTILISATION
5. UTILISATION - LOANS
5.1 DELIVERY OF A UTILISATION REQUEST
(a) MCL may utilise any Facility by delivery to the Agent (and, in relation
to a Utilisation of the Performance Bond Facility, the Issuing Bank) of
a duly completed Utilisation Request in the form of Part I (for the
General Facility), Part II (for the Equipment Supply Facility) or Part
III (for a Performance Bond) of Schedule 3 (Requests) not later than
the Specified Time.
(b) Only one Loan and the issuance of only one Performance Bond may be
requested in each Utilisation Request.
(c) MCL may satisfy its payment obligations under the Supply Contract using
funds other than proceeds of the Equipment Supply Facility and then may
utilise the Equipment Supply Facility by delivering a Utilisation
Request within 60 days of the date of any relevant Invoice in respect
of which reimbursement is claimed, requesting payment of all or some of
the amount paid by MCL in respect of that Invoice.
5.2 COMPLETION OF A 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;
(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
4.4 (Maximum amount of Loans/Performance Bond) and Clause 5.3
(Currency and amount);
(iv) in the case of the Loan Facilities, the proposed Interest
Period complies with Clause 11 (Interest Periods);
(v) in the case of a Performance Bond, the proposed Term is not
more than the minimum term required by OFTA at the date of the
Utilisation Request;
(vi) in the case of the Equipment Supply Facility, the proposed
Utilisation Date is at least 5 Business Days after the date of
the Utilisation Request;
(vii) in the case of the Equipment Supply Facility, it is
accompanied by the Invoice(s) to which the Loan relates; and
(viii) the Utilisation Request is executed by a person duly
authorised to do so on behalf of MCL.
(b) In any Month, MCL may deliver no more than two Utilisation Requests
under the Equipment Supply Facility.
5.3 CURRENCY AND AMOUNT
(a) The amount of the proposed Loan under the General Facility must be
HK$500,000,000 or such lesser amount which, as confirmed pursuant to
paragraph (a) of Clause 4.3 (Further conditions precedent), will be
sufficient to fully repay or prepay the Bridging Loan.
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(b) The amount of the proposed Loan under the Equipment Supply Facility
must be an amount which is a minimum of HK$3,000,000 or such lower
amount as may be agreed.
(c) The amount of the proposed Loan or the maximum liability under the
proposed Performance Bond, as the case may be, must be an amount which
is not more than the Available Facility.
5.4 LENDERS' PARTICIPATION
(a) If the conditions set out in this Agreement have been met:
(i) each Lender participating in a Loan Facility shall make its
participation in each Loan under that Facility available by
the Utilisation Date through its Facility Office; and
(ii) the Issuing Bank shall issue the Performance Bond on the
Utilisation Date through its Facility Office.
(b) The amount of each Lender's participation in each Loan will be equal to
the proportion borne by its applicable Available Commitment to the
applicable Available Facility immediately prior to making the Loan.
(c) The amount of each Lender's participation in each Performance Bond will
be equal to its Bond Proportion.
(d) The Agent shall by the Specified Time notify each Lender of the amount
of each Loan and Performance Bond and the amount of its participation
in that Loan or Performance Bond.
6. DISBURSEMENT
6.1 SUPPLY CONTRACT LOANS
Following receipt from each Lender of its participation in a Loan under
the Equipment Supply Facility in accordance with Clause 5.4 (Lenders'
participation), the Agent shall pay the relevant amount due under the
Invoice in relation to the Supply Contract to the Supplier or, in the
case of reimbursement, to MCL in accordance with the payment
instructions specified in the Supply Utilisation Request submitted for
that Loan.
6.2 DEEMED DISBURSEMENT OF GENERAL LOAN
On the Utilisation Date of the Loan under the General Facility, there
shall be a deemed repayment of the principal amount owing under the
Bridging Facility and a deemed disbursement of the Loan under the
General Facility to MCL but there shall be no actual transfer of funds.
6.3 ACKNOWLEDGEMENT BY MCL
MCL acknowledges and agrees that the payment of (a) a Loan under the
Equipment Supply Facility directly to the Supplier or (b) an amount by
way of reimbursement of MCL shall, in each case, constitute a Loan for
the purposes of this Agreement.
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SECTION 4
SINOSURE, SYNDICATION, AGENCY AND ISSUING BANK PROVISIONS
7. SINOSURE AND SYNDICATION PROVISONS
7.1 SINOSURE INSURANCE AND SYNDICATION
The Original Lender agrees to use all reasonable endeavours to procure
that:-
(a) Sinosure provides the Sinosure Offer and the Sinosure
Insurance in respect of the Supply Contract so that such offer
and insurance cover as large a proportion of the Equipment
Supply Facility as permitted by Sinosure; and
(b) banks or financial institutions acceptable to MCL replace the
Original Lender as Lenders in respect of all or part of the
Equipment Supply Facility and/or the Performance Bond
Facility.
7.2 SUPPORT FOR SINOSURE APPLICATION
MCL and SUNDAY shall actively co-operate and assist the Original Lender
in procuring the Sinosure Offer and the Sinosure Insurance, including:
(a) preparing an information memorandum;
(b) making such senior management and other representatives of
SUNDAY, MCL and their respective Subsidiaries as the Original
Lender may reasonably request available for a presentation to
and/or to participate in meetings with Sinosure at such times
as the Original Lender may reasonably request;
(c) providing the Original Lender with all information reasonably
requested by it in order to complete the application for the
Sinosure Insurance; and
(d) considering in good faith any amendments to the terms of the
Supply Contract reasonably required by Sinosure and reasonably
requested by the Original Lender.
7.3 SUPPORT FOR SYNDICATION
MCL and SUNDAY shall actively co-operate and assist the Original Lender
in the Syndication, including:
(a) preparing and updating the Information Memorandum;
(b) making such senior management and other representatives of MCL
and SUNDAY as the Original Lender may reasonably request
available for a presentation to and/or to participate in
meetings with potential Lenders at such times and places as
the Original Lender may reasonably request;
(c) using best efforts to ensure that Syndication efforts benefit
from the Group's existing lending relationships;
(d) providing the Original Lender with all information reasonably
requested by it to complete the Syndication successfully
within a timeframe acceptable to the Original Lender;
(e) complying with all reasonable requests for information from
potential Lenders through the Original Lender.
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7.4 ADJUSTMENTS TO DOCUMENTATION
The Original Obligors agree, and shall ensure that the other Obligors
agree, to enter into any syndication agreement (in a form reasonably
required by the Original Lender) when required by the Original Lender
in connection with the Syndication. Such an agreement may also
incorporate any minor amendments to the Facility Agreement and/or other
Expanded Finance Documents reasonably requested by any proposed new
Lender and agreed to by MCL.
7.5 MARKET FLEX
(a) The Original Lender may, with the agreement of MCL, change the
structure, terms and/or pricing (but not the total amount) of the
Facilities if it determines that the changes are advisable to ensure
that Sinosure will provide the Sinosure Offer and the Sinosure
Insurance or a successful Syndication.
(b) No such change may be made after the Original Lender has confirmed to
MCL that Syndication has been completed and that the syndicate members
have become bound by the Facility Agreement (or that there will be no
general syndication of the Facilities).
(c) SUNDAY and MCL agree, and shall ensure that the other Obligors agree,
to amend the Facility Agreement and/or other Expanded Finance Documents
as necessary to reflect any such change.
7.6 APPOINTMENT OF AGENT AND SECURITY TRUSTEE
(a) The Original Lender shall appoint a financial institution acceptable to
MCL (such acceptance not to be unreasonably withheld or delayed) to act
as Agent and Security Trustee under the Expanded Finance Documents as
soon as practicable after the date of this Agreement.
(b) If, by the date falling 30 days after the date of this Agreement, no
such financial institution has acceded to this Agreement and executed
the Security Trust Deed, the Original Lender shall execute an Accession
Deed and the Security Trust Deed as Agent and Security Trustee.
7.7 ACCESSION BY THE ISSUING BANK
(a) The Original Lender shall appoint a financial institution acceptable to
MCL (such acceptance not to be unreasonably withheld or delayed) and
OFTA to act as Issuing Bank by the date falling at least * before OFTA
requires a performance bond to be provided under Special Condition 3 to
the 3G Licence.
(b) If no such financial institution has acceded to this Agreement as
Issuing Bank at least * before the date by which OFTA requires a
performance bond to be provided under Special Condition 3 of the 3G
Licence, the Original Lender shall provide such cash collateral or
other security at such times and on such conditions as may acceptable
to OFTA to satisfy SUNDAY 3G's obligations under Special Condition 3 of
the 3G Licence until such time as an Issuing Bank accedes to this
Agreement and issues the Performance Bond. Such cash collateral or
other security shall be provided by the Original Lender on the same
terms and subject to the same fees as a Performance Bond issued under
the Performance Bond Facility.
7.8 ASSISTANCE AND DOCUMENTATION
MCL and SUNDAY shall actively co-operate and assist the Original Lender
in appointing the Agent, the Security Trustee and the Issuing Bank and
shall consider in good faith any amendments to the Finance Documents
that may be reasonably requested by the Agent, the Security Trustee or
the Issuing Bank as a condition to its appointment.
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7.9 NEGOTIATIONS WITH OFTA
MCL and SUNDAY shall actively co-operate and assist the Original Lender
and the Issuing Bank in negotiations with OFTA and shall use all
reasonable efforts to procure OFTA's agreement to terms and conditions
of the Performance Bond mutually acceptable to the Original Lender and
the Issuing Bank.
29
SECTION 5
REPAYMENT, PREPAYMENT AND CANCELLATION
8. REPAYMENT
8.1 REPAYMENT OF LOANS UNDER EQUIPMENT SUPPLY FACILITY
(a) The aggregate principal amount of the Loans outstanding under the
Equipment Supply Facility at the close of business at the end of the
Availability Period for the Equipment Supply Facility shall be repaid
by MCL in full by eight equal semi-annual instalments, commencing 12
Months after the expiry of the Availability Period for the Equipment
Supply Facility (being the first applicable Repayment Date for the
Loans under the Equipment Supply Facility).
(b) The first Repayment Instalment for the Equipment Supply Facility shall
be repaid on the first applicable Repayment Date. The second and
subsequent Repayment Instalments shall be repaid every six Months after
the first Repayment Date for the Equipment Supply Facility.
(c) MCL may not reborrow any Loan under the Equipment Supply Facility which
is repaid.
8.2 REPAYMENT OF LOAN UNDER GENERAL FACILITY
(a) The aggregate principal amount of the Loan outstanding under the
General Facility at the close of business at the end of the
Availability Period for the General Facility shall be repaid by MCL in
full by five semi-annual instalments commencing on 12 July 2004 as
follows:
Repayment instalment Percentage Repayment
1st *
2nd *
3rd *
4th *
5th *
(b) The first Repayment Instalment for the General Facility shall be repaid
on the first applicable Repayment Date. The second and subsequent
Repayment Instalments shall be repaid every six Months after the first
Repayment Date for the General Facility.
(c) MCL may not reborrow any part of the General Loan which is repaid.
9. PREPAYMENT AND CANCELLATION
9.1 ILLEGALITY
If it becomes unlawful in any applicable jurisdiction for the Agent,
the Issuing Bank or a Lender to perform any of its obligations as
contemplated by this Agreement or to fund or maintain its participation
in any Loan or to issue, or procure the issue of, or maintain any
Performance Bond or make any payment thereunder or charge any fee in
respect thereof:
(a) in the case of the Loan Facilities;
(i) the relevant Lender shall promptly notify the Agent
upon becoming aware of that event;
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(ii) upon the Agent notifying MCL, the Commitments in
respect of the Loan Facilities of that Lender will be
immediately cancelled;
(iii) MCL shall repay that Lender's participation in the
Loans on the last day of the Interest Period for each
Loan occurring after the Agent has notified MCL or,
if earlier, the date specified by the Lender in the
notice delivered to the Agent (being no earlier than
the last day of any applicable grace period permitted
by law); and
(b) in the case of the Performance Bond Facility:
(i) the relevant Lender shall promptly notify the Issuing
Bank and the Agent upon becoming aware of that event;
(ii) if a Performance Bond has already been issued and the
relevant event only applies to a Lender or Lenders
(whose Bond Proportion of the Performance Bond does
not exceed 35 per cent.) upon the Agent notifying
MCL, the Performance Bond Facility Commitment of the
relevant Lenders will be immediately cancelled and
MCL shall immediately on demand pay to the Issuing
Bank, the Bond Proportions of the relevant Lenders in
respect of that Performance Bond;
(iii) if a Performance Bond has already been issued and the
relevant event applies to the Issuing Bank and/or a
Lender or Lenders (whose Bond Proportion of the
Performance Bond exceeds 35 per cent.) upon the
Issuing Bank notifying MCL, the Performance Bond
Facility Commitment of all the Lenders will be
immediately cancelled and MCL shall immediately on
demand repay the Performance Bond in full; and
(iv) if no Performance Bond has been issued, the Issuing
Bank shall notify MCL that the obligations of the
Issuing Bank and the Lenders in respect of the
Performance Bond Facility shall be immediately
cancelled.
9.2 VOLUNTARY CANCELLATION
MCL may, if it gives the Agent not less than 15 Business Days' (or such
shorter period as the Majority Lenders in respect of the relevant
Facility may agree) prior notice, cancel the whole or any part (being a
minimum of HK$10,000,000 of an Available Facility. Any cancellation
under this Clause 9.2 in respect of any Facility shall reduce the
Commitments of the Lenders rateably under that Facility.
9.3 MANDATORY PREPAYMENT FROM NEW BORROWINGS PROCEEDS
(a) In this Clause 9.3:-
"NEW BORROWINGS PROCEEDS" means, the aggregate amount of all cash
received by any Credit Net Obligor and any other member of the MCL
Group as a result of incurring any Financial Indebtedness (except for
the types of Permitted Financial Indebtedness set out in paragraphs
(b)(i) to (x) of Clause 24.9 (Restrictions on borrowings)) after
deducting:-
(i) *;
(ii) all costs and expenses incurred in good faith and payable in
connection with incurring that Financial Indebtedness; and
(iii) *.
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(b) MCL shall ensure that any New Borrowings Proceeds are paid into the
Prepayment Account for application in accordance with Clause 9.9
(Prepayment Account).
(c) Paragraph (b) does not apply to any New Borrowings Proceeds if:-
(i) in respect of each Loan Facility, there is no Available
Facility and the Loans outstanding are less than * of the
Available Facility as at the Effective Date; or
(ii) (x) those New Borrowing Proceeds are promptly credited to
the Refinancing Account;
(y) within five Business Days of the receipt of those New
Borrowings Proceeds, MCL certifies to the Agent that
a specified amount of Permitted Financial
Indebtedness other than Financial Indebtedness under
the Finance Documents will be repaid out of those New
Borrowings Proceeds within * of the date of receipt;
and
(z) no part of those New Borrowings Proceeds shall be
withdrawn from the Refinancing Account except for the
purpose described in (ii) above within that * or at
the end of that * to be transferred to the Prepayment
Account.
9.4 MANDATORY PREPAYMENT FROM EQUITY RAISING PROCEEDS
(a) In this Clause 9.4:-
"EQUITY RAISING PROCEEDS" means the aggregate amount of any net cash
proceeds from any public offerings or rights issues of shares or other
Equity Rights of any member of the Group or any issue of subordinated
debt, equity or quasi-equity (excluding shares, equity or quasi-equity
taking the form of shareholder loans already funded with respect to the
relevant member of the Group).
(b) SUNDAY shall ensure that an amount equal to * of any Equity Raising
Proceeds are paid into the Prepayment Account for application in
accordance with Clause 9.9 (Prepayment Account).
(c) Paragraph (b) above does not apply to any Equity Raising Proceeds to
the extent that, in respect of each Loan Facility, there is no
Available Facility and the Loans outstanding represent less than * of
the Available Facility as at the Effective Date.
9.5 MANDATORY PREPAYMENT FROM DISPOSAL PROCEEDS
(a) In this Clause 9.5:-
"DISPOSAL PROCEEDS" means the aggregate amount of all cash payments,
and the fair market value of any non-cash consideration (including,
when received, the cash or cash equivalent proceeds of any deferred
consideration, whether by way of adjustment to the purchase price or
otherwise) received by any Credit Net Obligor or any other member of
the MCL Group in connection with the sale, transfer or other disposal
by any Credit Net Obligor or any other member of the MCL Group of an
asset after deducting:-
(i) *;
(ii) fees and transaction costs incurred in good faith in
connection with that sale, transfer or disposal; and
(iii) *.
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(b) MCL shall ensure that any Disposal Proceeds are paid into the
Prepayment Account for application in accordance with Clause 9.9
(Prepayment Account).
(c) Paragraph (b) above does not apply to any Disposal Proceeds to the
extent that:-
(i) in respect of each Loan Facility, there is no Available
Facility and the Loans outstanding represent less than * of
the original Available Facility as at the Effective Date; or
(ii) (x) those Disposal Proceeds result from any sale, lease,
transfer or disposal permitted by any of paragraphs
(b)(i) to (vii) of Clause 24.7 (Disposals);
(y) those Disposal Proceeds result from a sale, lease,
transfer or disposal under (where the amount received
in respect of the relevant asset is less than *)
paragraph (b)(viii) of Clause 24.7 (Disposals); or
(z) the asset being sold, leased, transferred or disposed
is going to be (or, within the previous six months,
has been) replaced by assets of a similar or better
quality or condition and within 10 Business Days of
the receipt of the relevant Disposal Proceeds by a
Credit Net Obligor or other member of the MCL Group,
MCL either:
(A) certifies to the Agent that a Credit Net
Obligor will apply those Disposal Proceeds
towards the purchase of those replacement
assets within * of the date of receipt and
those Disposal Proceeds are immediately
credited to the Re-usable Disposal Proceeds
Account; or
(B) provides details of the asset which has
replaced the asset sold, leased, transferred
or disposed and the acquisition cost to be
reimbursed out of the relevant Disposal
Proceeds.
No part of any Disposal Proceeds credited to the
Re-usable Disposal Proceeds Account under paragraph
(A) above shall be withdrawn except either to apply
the same towards the cost of replacing that asset
which has been sold, leased, transferred or disposed
or at the end of the * to be transferred to the
Prepayment Account.
9.6 MANDATORY PREPAYMENT FROM INSURANCE PROCEEDS
(a) In this Clause 9.6:-
"INSURANCE PROCEEDS" means any cash proceeds received by any Credit Net
Obligor or other member of the MCL Group under or pursuant to any
insurance policy (or equivalent) (other than proceeds relating to
business interruption insurance or third party liability insurance)
after the Effective Date.
(b) MCL shall ensure that any Insurance Proceeds are paid into the
Prepayment Account for application in accordance with Clause 9.9
(Prepayment Account).
(c) Paragraph (b) above does not apply to any Insurance Proceeds to the
extent that:-
(i) in respect of each Loan Facility, there is no Available
Facility and the Loans outstanding represent less than * of
the Available Facility as at the Effective Date; or
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(ii) those Insurance Proceeds are less than *, when aggregated with
all other Insurance Proceeds received by Credit Net Obligors
and other members of the MCL Group in any financial year of
the Group and any Insurance Proceeds of less than * in respect
of any claim relating to a single cause of loss shall not be
taken into account in calculating whether the * threshold has
been reached; or
(iii) for Insurance Proceeds of more than * in aggregate in any
financial year of the Group:-
(A) those Insurance Proceeds are promptly credited to the
Re-usable Insurance Proceeds Account;
(B) within 10 Business Days of the receipt of the
relevant Insurance Proceeds by a Credit Net Obligor
or member of the MCL Group, MCL certifies to the
Agent that a Credit Net Obligor will use those
Insurance Proceeds to replace or reinstate the
asset(s) or pay the liability to which those
Insurance Proceeds relate within * months of receipt;
and
(C) no part of those Insurance Proceeds shall be
withdrawn from the Re-usable Insurance Proceeds
Account except for the purpose described in paragraph
(B) above within that * or at the end of that * to be
transferred to the Prepayment Account Provided that
if Insurance Proceeds of less than * but more than *
in respect of any claim relating to a single cause of
loss are received, the same need not be paid into the
Re-usable Insurance Proceeds Account provided they
are applied in replacement or reinstatement of the
relevant assets before the said * threshold is
exceeded.
9.7 MANDATORY PREPAYMENT FROM COMPENSATION PROCEEDS
(a) In this Clause 9.7:-
"COMPENSATION PROCEEDS" means any amount exceeding (when aggregated
with any other such amount received or recovered in any financial year
of the Group) * received or recovered by a Credit Net Obligor or other
member of the MCL Group pursuant to or in respect of any compensation
or reimbursement of fees payable by OFTA or any Governmental Agency
(whether by way of direct payment or judgment on, or settlement of, any
claim) (in each case net of related fees and transaction costs incurred
in good faith in achieving any such recoveries).
(b) SUNDAY shall ensure that Compensation Proceeds are paid into the
Prepayment Account for application in accordance with Clause 9.9
(Prepayment Account).
(c) Paragraph (b) does not apply to any Compensation Proceeds to the extent
that:
(i) in respect of each Loan Facility, there is no Available
Facility and the Loans outstanding represent less than * of
the Available Facility as at the Effective Date; or
(ii) those Compensation Proceeds are received or recovered by the
Credit Net Obligor on terms that require the Credit Net
Obligor or other member of the MCL Group to make future
payments of fees that are in addition to fees that it would
otherwise have had to pay and:
(A) those Compensation Proceeds are promptly credited to
the Re-usable Disposal Proceeds Account;
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(B) within 10 Business Days of the receipt of the
relevant Compensation Proceeds by a Credit Net
Obligor or member of the MCL Group, MCL certifies to
the Agent that a Credit Net Obligor will use those
Compensation Proceeds to pay those future additional
fees within the period specified in the terms on
which the Compensation Proceeds are received; and
(C) no part of those Compensation Proceeds shall be
withdrawn from the Re-usable Disposal Proceeds
Account except to pay those future additional fees
within that period or at the end of that period to be
transferred to the Prepayment Account.
9.8 MANDATORY PREPAYMENT OF EXCESS CASH FLOW
(a) In this Clause 9.8:-
"EXCESS CASH FLOW" means for any financial year of the MCL Group, the
amount equal to:-
(i) the Opening Net Cash Balance at the beginning of that
financial year; plus
(ii) EBITDA for that financial year; plus
(iii) to the extent not covered already in paragraph (ii) above,
interest income and other coupon payments received during that
financial year in cash in respect of Permitted Investments;
minus
(A) the aggregate of all principal amounts prepaid during that
financial year under this Clause 9.8 or under Clause 9.10
(Voluntary prepayment of Loans);
(B) Capital Expenditure for that financial year (provided that to
the extent that Capital Expenditure was budgeted to be
incurred in that financial year ("YEAR 1") but was actually
incurred in the first 150 days of the following financial year
("YEAR 2"), that Capital Expenditure shall for the purposes of
the calculations of Excess Cash Flow for Year 1 and Year 2 be
treated as having been made in Year 1 but not in Year 2);
(C) Debt Service for that financial year;
(D) Taxes paid in cash by the MCL Group during the financial year,
plus (if negative) or minus (if positive) any difference between
Working Capital on the first day and on the last day of that financial
year.
(b) Within 10 Business Days of delivery to the Agent of the audited
consolidated financial statements for any financial year or within 150
days after the end of any financial year (whichever is earlier), MCL
shall ensure that an amount (the "EXCESS CASH FLOW AMOUNT") equal to
the following percentage of the amount representing Excess Cash Flow
for that financial year is paid into the Prepayment Account for
application in accordance with Clause 9.9 (Prepayment Account):-
(i) if, in respect of each Loan Facility, there is no Available
Facility and the Loans outstanding are less than * of the
Available Facility as at the Effective Date *;
(ii) if, in respect of each Loan Facility, there is no Available
Facility and the Loans outstanding represent less than * but
more than * of the Available Facility as at the Effective
Date: * of the amount by which Excess Cash Flow exceeds *
provided that the amount required to be paid into the
Prepayment Account pursuant to this
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paragraph (b)(ii) shall be reduced by the amount of the
Required DSRA Balance on the next DSRA Relevant Date provided
further that such amount shall be paid into the DSRA; and
(iii) if there is any Available Facility or if * or more of the
Loans in respect of any Loan Facility are outstanding: * of
the amount by which Excess Cash Flow exceeds * provided that
the amount required to be paid into the Prepayment Account
pursuant to this paragraph (b)(iii) shall be reduced by the
amount of the Required DSRA Balance on the next DSRA Relevant
Date provided further that such amount shall be paid into the
DSRA.
(c) References to financial year in this Clause 9.8 shall mean any
financial year commencing in or after the year in which the First
Utilisation Date occurs.
9.9 PREPAYMENT ACCOUNT
(a) In this Clause 9.9:-
"PROCEEDS" means the moneys relating to each of the following which are
payable into the Prepayment Account under Clauses 9.3 (Mandatory
prepayment from New Borrowing Proceeds) to 9.8 (Mandatory prepayment of
Excess Cash Flow):-
(i) New Borrowings Proceeds;
(ii) Equity Raising Proceeds;
(iii) Disposal Proceeds;
(iv) Insurance Proceeds;
(v) Compensation Proceeds; and/or
(vi) Excess Cash Flow.
(b) MCL shall ensure that:
(i) each relevant Secured Account is established before the first
date on which any relevant Proceeds are required to be paid
into that Secured Account; and
(ii) all Proceeds (or an equal amount) are paid directly into (or,
as soon as practicable after receipt, are transferred into)
the Prepayment Account or (as otherwise provided in this
Clause 9.9) the other Secured Accounts.
(c) Within 10 Business Days after the date on which any Proceeds have been
received by any member of the Group (or have become New Borrowings
Proceeds, Equity Raising Proceeds, Disposal Proceeds, Insurance
Proceeds (in excess of the threshold referred to in Clause 9.6(c)(ii)
(Mandatory prepayment from Insurance Proceeds) or Compensation
Proceeds) or in the case of Excess Cash Flow, the date falling 150 days
after the end of each financial year (such dates the "RECEIPT DATE"),
MCL shall deliver to the Agent a certificate confirming:-
(i) the Receipt Date,
(ii) the amount in HK Dollars (the "PROCEEDS AMOUNT") of those
Proceeds; and
(iii) details of the nature of the Proceeds and of any amounts
deducted from those Proceeds.
(d) If there is no Available Facility in respect of any Facility, MCL shall
attribute the Proceeds Amount on a pro rata basis to all Loans
outstanding in respect of the Facilities and shall prepay those Loans
(in each
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case, on the expiry of the Interest Periods which are current on the
Receipt Date) until Loans equal to or greater than the Proceeds Amount
have been prepaid or repaid.
(e) In respect of any Facility for which there is still an Available
Facility, the same provisions as in paragraph (d) shall apply except
that:
(i) the amount attributable to that Facility shall be calculated
by reference to the Available Facility and the outstanding
Loans in respect of that Facility (pro rata to the Loans in
respect of the other Facilities);
(ii) the amount attributable to that Facility shall be apportioned
between the Available Facility and the Loans outstanding in
respect of that Facility on a pro rata basis;
(iii) the portion attributable to Loans shall be prepaid in the same
manner as in paragraph (d); and
(iv) the Available Facility shall be partially cancelled by an
amount equal to the portion attributable to the Available
Facility automatically 15 Business Days after receipt of those
moneys into the Prepayment Account and, provided no Default is
continuing on the date of cancellation, that amount will be
available for release to MCL.
(f) No amount may be withdrawn or transferred from the Prepayment Account
except:-
(i) to make the prepayments required under this Clause 9.9 or as
otherwise permitted under this Agreement; or
(ii) with the prior consent of all the Lenders.
(g) Any prepayments of Loans under this Clause 9.9 shall satisfy the
obligations under Clause 8 (Repayment) in respect of the remaining
Repayment Instalments of each Facility rateably in actual order of
maturity, except that any prepayment of any Excess Cash Flow Amount
shall satisfy the obligations under Clause 8 (Repayment) in respect of
the remaining Repayment Instalments of each Facility in inverse order.
(h) The Security over the Secured Accounts created by the Hong Kong General
Security Document shall be released to the extent of any withdrawals to
be made from the Secured Accounts for the purposes permitted or
required by this Clause 9.9.
9.10 VOLUNTARY PREPAYMENT OF LOANS
(a) MCL may, if it gives the Agent not less than 15 Business Days' (or such
shorter period as the Majority Lenders may agree) prior notice, prepay
the whole or any part of any Loan (but, if in part, being an amount
that reduces that Loan by a minimum amount of HK$5,000,000 and a
multiple of HK$1,000,000).
(b) Any prepayment of Loans under this Clause 9.10 shall satisfy the
obligations under Clause 8 (Repayment) in respect of the remaining
Repayment Instalments of all the Loan Facilities rateably and in their
actual order.
9.11 VOLUNTARY REPAYMENT OF PERFORMANCE BONDS
MCL may, if it gives the Agent and the Issuing Bank not less than 15
Business Days (or such shorter period as the Majority Lenders may
agree) prior notice, prepay the whole or any part of any Performance
Bond.
9.12 RIGHT OF REPLACEMENT OF A SINGLE LENDER
If:-
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(a) any sum payable to any Lender by an Obligor is required to be
increased under paragraph (a) of Clause 14.2 (Tax gross-up);
or
(b) any Lender claims indemnification from MCL under Clause 14.3
(Tax indemnity) or Clause 15 (Increased costs),
MCL may:-
(i) while the circumstance giving rise to the requirement or
indemnification continues, arrange for the transfer of the
whole (but not part only) of that Lender's Commitment and
participations in the Utilisations to a new or existing Lender
willing to accept that transfer; or
(ii) give the Agent notice of cancellation of the Commitment of
that Lender and its intention to procure the repayment of that
Lender's participation in the Utilisations, whereupon the
Commitment of that Lender shall immediately be reduced to
zero. On the last day of each Interest Period which ends after
MCL has given notice under this paragraph (ii) (or, if
earlier, the date specified by MCL in that notice), MCL shall
repay that Lender's participation in that Utilisation.
9.13 RESTRICTIONS
(a) Any notice of cancellation or prepayment given under this Clause 9
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) No voluntary cancellation of an Available Facility under Clause 9.2
(Voluntary cancellation) or voluntary prepayment of a Loan under Clause
9.10 (Voluntary prepayment of Loans) may be made unless the Agent,
acting reasonably, is satisfied that:
(i) MCL will be able to meet its obligations under the Supply
Contract from other sources and that it has available to it
the funds required to achieve completion of the 3G Network;
(ii) such cancellation or prepayment will not result in default by
SUNDAY 3G of its obligations under Special Condition 3 of the
3G Licence; and
(iii) the notional principal amount of the relevant Hedging
Documents(s) has been reduced by an amount equal to the amount
of the cancellation or prepayment, as the case may be.
(d) MCL may not reborrow any part of the Facilities which is prepaid.
(e) MCL shall not repay or prepay all or any part of the Utilisations or
cancel all or any part of the Commitments except at the times and in
the manner expressly provided for in this Agreement.
(f) Unless a contrary indication appears in this Agreement, no amount of
the Total Commitments cancelled under this Agreement may be
subsequently reinstated.
(g) If the Agent receives a notice under this Clause 9 it shall promptly
forward a copy of that notice to either MCL or the affected Lender, as
appropriate.
(h) Available Commitments shall be automatically cancelled at the expiry of
the Availability Period to which they relate.
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SECTION 6
COSTS OF UTILISATION
10. INTEREST
10.1 CALCULATION OF INTEREST
The rate of interest on each Utilisation for each Interest Period is
the percentage rate per annum which is the aggregate of:-
(a) the Applicable Margin; and
(b) the Benchmark Rate.
10.2 PAYMENT OF INTEREST
MCL shall pay accrued interest on each Loan on the last day of each
Interest Period.
10.3 DEFAULT INTEREST
(a) If an Obligor fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue on the overdue amount
from the due date up to the date of actual payment (both before and
after judgment) at a rate which, subject to paragraphs (b) and (c)
below, is the sum of * and the rate which would have been payable if
the overdue amount had, during the period of non-payment, constituted a
Utilisation in the currency of the overdue amount for successive
Interest Periods, each of a duration selected by the Agent (acting
reasonably). Any interest accruing under this Clause 10.3 shall be
immediately payable by the Obligor on demand by the Agent.
(b) If any overdue amount 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:-
(i) the first Interest Period for that overdue amount shall have a
duration equal to the unexpired portion of the current
Interest Period relating to that Loan; and
(ii) the rate of interest applying to the overdue amount during
that first Interest Period shall be the sum of two per cent
and the rate which would have applied if the overdue amount
had not become due.
(c) Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and
payable.
10.4 NOTIFICATION OF RATES OF INTEREST
The Agent shall promptly notify the relevant Lenders and MCL of the
determination of a rate of interest under this Agreement.
11. INTEREST PERIODS
11.1 SELECTION OF INTEREST PERIODS
(a) MCL may select an Interest Period for a Loan under the Equipment Supply
Facility in the Utilisation Request for that Loan or (if the Loan has
already been borrowed) in a Selection Notice.
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(b) Each Selection Notice for a Loan is irrevocable and must be delivered
to the Agent by MCL not later than the Specified Time.
(c) If MCL fails to deliver a Selection Notice to the Agent in accordance
with paragraph (b) above, the relevant Interest Period will, subject to
Clause 11.2 (Changes to Interest Periods), be three Months.
(d) Subject to this Clause 11, MCL may select an Interest Period of three
or six Months or any other period agreed between MCL and the Agent
(acting on the instructions of all the Majority Lenders). In addition
MCL may select an Interest Period of less than three Months, if
necessary to ensure that:
(i) there is a Loan with an aggregate amount equal to the relevant
Repayment Instalment and an Interest Period ending on the
relevant Repayment Date; or
(ii) a Loan has an Interest Period ending on the same date as the
Interest Period for another Loan that is outstanding under the
same Facility.
(e) The first Interest Period for the Loan under the General Facility shall
end on the last day of the interest period that is current under the
Bridging Loan on the Utilisation Date of the Loan under the General
Facility (the "BRIDGING LOAN INTEREST PERIOD").
(f) The amount of interest payable by MCL in respect of the first Interest
Period for the Loan under the General Facility shall be calculated as
if the Loan had been made on the first day of the Bridging Loan
Interest Period at the interest rate applicable to the Bridging Loan
provided that MCL shall not be required to pay any interest on the
Bridging Loan in respect of the Bridging Loan Interest Period.
(g) An Interest Period for a Loan shall not extend beyond the Final
Maturity Date applicable to the relevant Facility.
(h) Each Interest Period for a Loan shall start on the Utilisation Date for
that Loan or (if already made) on the last day of its preceding
Interest Period.
11.2 CHANGES TO INTEREST PERIODS
(a) Prior to determining the interest rate for the Loan, the Agent may
shorten an Interest Period for that Loan to ensure that there is a Loan
with an aggregate amount equal to the Repayment Instalment and an
Interest Period ending on a Repayment Date.
(b) If the Agent makes any of the changes to an Interest Period referred to
in this Clause 11.2, it shall promptly notify MCL and the relevant
Lenders.
11.3 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).
11.4 CONSOLIDATION AND DIVISION OF LOANS
(a) If two or more Interest Periods for Loans in the same Facility:
(i) end on the same date; and
(ii) relate to the same Facility,
those Loans will, unless MCL specifies to the contrary in the Selection
Notice for the next Interest Period, be consolidated into, and treated
as, a single Loan on the last day of the Interest Period.
41
(b) If MCL requests in a Selection Notice that a Loan be divided into two
or more Loans that Loan will, on the last day of its Interest Period,
be so divided with amounts specified in that Selection Notice, being an
aggregate amount equal to the amount of the Loan immediately before its
division.
(c) Except as described in paragraphs (a) and (b), no Loans shall be
consolidated or divided.
12. CHANGES TO THE CALCULATION OF INTEREST
12.1 ABSENCE OF QUOTATIONS
Subject to Clause 12.2 (Market disruption), if the Benchmark Rate is to
be determined by reference to the Reference Banks but a Reference Bank
does not supply a quotation by the Specified Time on the Quotation Day,
Benchmark Rate shall be determined on the basis of the quotations of
the remaining Reference Banks.
12.2 MARKET DISRUPTION
(a) If a Market Disruption Event occurs in relation to a Loan for any
Interest Period, then the rate of interest on each Lender's share of
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 Agent by that 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 that Lender of
funding its participation in that Loan from whatever source it
may reasonably select.
(b) In this Agreement "MARKET DISRUPTION EVENT" means:-
(i) at or about 12 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 Agent to determine the Benchmark
Rate for the relevant Interest Period; or
(ii) before 12 noon on the Quotation Day for the relevant Interest
Period, the Agent receives notifications from a Lender or
Lenders (whose participations in a Loan exceed 35 per cent. of
that Loan) that the cost to it of obtaining matching deposits
in the Relevant Interbank Market would be in excess of
Benchmark Rate.
12.3 ALTERNATIVE BASIS OF INTEREST OR FUNDING
(a) If a Market Disruption Event occurs and the Agent or MCL so requires,
the Agent and MCL 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 shall,
with the prior consent of all the Lenders and MCL, be binding on all
Parties.
12.4 BREAK COSTS
(a) MCL shall, within three Business Days of demand by a Finance Party, pay
to that Finance Party its Break Costs attributable to all or any part
of a Loan or Unpaid Sum being paid by MCL on a day other than the last
day of an Interest Period for that Loan or Unpaid Sum.
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(b) Each Lender shall, as soon as reasonably practicable after a demand by
the Agent, provide a certificate confirming the amount of its Break
Costs for any Interest Period in which they accrue.
13. FEES
13.1 COMMITMENT FEE
(a) MCL shall pay to the Agent (for the account of each Lender) a fee
computed at the rate of * on that Lender's Available Commitment in
respect of the Equipment Supply Facility for the Availability Period
applicable to that Loan Facility.
(b) The accrued commitment fee is payable on the last day of each
successive period of three Months which ends during the relevant
Availability Period, on the last day of each relevant Availability
Period and, if cancelled in full, on the cancelled amount of the
relevant Lender's Commitment at the time the cancellation is effective.
13.2 ARRANGEMENT FEES
MCL shall pay to the Original Lender arrangement fees in the amount and
at the times agreed in a Fee Letter.
13.3 AGENCY FEE
MCL shall pay to the Agent (for its own account) an agency fee in the
amount and at the times agreed in a Fee Letter.
13.4 SECURITY TRUSTEE FEE
MCL shall pay to the Security Trustee (for its own account) a security
trustee fee in the amount and at the times agreed in a Fee Letter.
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SECTION 7
ADDITIONAL PAYMENT OBLIGATIONS
14. TAX GROSS UP AND INDEMNITIES
14.1 DEFINITIONS
(a) In this Clause 14:-
"TAX CREDIT" means a credit against, relief or remission for, or
repayment of any Tax.
"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 an Obligor to a
Finance Party under Clause 14.2 (Tax gross-up) or a payment under
Clause 14.3 (Tax indemnity).
(b) In this Clause 14 a reference to "determines" or "determined" means a
determination made in the absolute discretion of the person making the
determination.
14.2 TAX GROSS-UP
(a) All payments to be made by an Obligor to any Finance Party under the
Finance Documents shall be made without any set-off or counterclaim,
and free and clear of and without any Tax Deduction, unless that
Obligor is required to make a Tax Deduction, in which case the sum
payable by such Obligor (in respect of which such Tax Deduction is
required to be made) shall be increased to the extent necessary to
ensure that such Finance Party receives a sum net of any deduction or
withholding equal to the sum which it would have received had no such
deduction or withholding been made or required to be made.
(b) An Obligor or a Lender shall promptly upon becoming aware that an
Obligor must make a Tax Deduction (or that there is any change in the
rate or the basis of a Tax Deduction) notify the Agent accordingly. If
the Agent receives such notification from a Lender it shall notify MCL
and that Obligor.
(c) If an Obligor is required to make a Tax Deduction, that Obligor 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 30 days of making either a Tax Deduction or any payment required
in connection with that Tax Deduction, the Obligor making that Tax
Deduction shall deliver to the Agent for the Finance Party entitled to
the payment evidence reasonably satisfactory to that Finance Party that
the Tax Deduction has been made or (as applicable) any appropriate
payment paid to the relevant taxing authority.
14.3 TAX INDEMNITY
(a) Without prejudice to Clause (Tax gross-up), if any Finance Party 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 such Finance Party whether or not actually received or
receivable) or if any liability in respect of any such payment is
asserted, imposed, levied or assessed against any Finance Party, MCL
shall, within 3 Business Days of a demand, promptly indemnify the
Finance Party which suffers a loss or liability as a result against
such payment or liability, together with any interest, penalties, costs
and expenses payable or incurred in connection therewith, provided that
this Clause 14.3 shall not apply to:-
44
(i) any Tax imposed on and calculated by reference to the net
income actually received or receivable by such Finance Party
(but, for the avoidance of doubt, not including any sum deemed
for purposes of Tax to be received or receivable by such
Finance Party but not actually receivable) by the jurisdiction
in which such Finance Party is incorporated;
(ii) any Tax imposed on and calculated by reference to the net
income of the Facility Office of such Finance Party actually
received or receivable by such Finance Party (but, for the
avoidance of doubt, not including any sum deemed for purposes
of Tax to be received or receivable by such Finance Party but
not actually receivable) by the jurisdiction in which its
Facility Office is located; or
(iii) to the extent a loss, liability or cost is compensated for by
an increased payment under Clause 14.2 (Tax gross-up).
(b) A Finance Party intending to make a claim pursuant to paragraph (a)
shall notify the Agent of the event giving rise to the claim, with
reasonable particulars of the same, whereupon the Agent shall notify
MCL thereof.
(c) A Finance Party shall, on receiving a payment from an Obligor under
this Clause , notify the Agent.
14.4 TAX CREDIT
If an Obligor makes a Tax Payment and the relevant Finance Party
determines that:
(a) a Tax Credit is attributable to that Tax Payment; and
(b) that Finance Party has obtained, utilised and retained that
Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance
Party 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 made by the Obligor.
14.5 STAMP TAXES
MCL shall pay and, within three Business Days of demand, indemnify each
Finance Party against any cost, loss or liability that Finance Party
incurs in relation to all stamp duty, registration and other similar
Taxes payable in respect of any Finance Document.
14.6 INDIRECT TAX
(a) All consideration payable under a Finance Document by an Obligor to a
Finance Party shall be deemed to be exclusive of any Indirect Tax. If
any Indirect Tax is chargeable, the Obligor shall pay to the Finance
Party (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 an Obligor to reimburse a Finance
Party for any costs or expenses, that Obligor shall also at the same
time pay and indemnify that Finance Party against all Indirect Tax
incurred by that Finance Party in respect of the costs or expenses save
to the extent that that Finance Party determines (acting reasonably)
that it is entitled to repayment or credit in respect of the Indirect
Xxx.
00
00. INCREASED COSTS
15.1 INCREASED COSTS
(a) Subject to Clause 15.3 (Exceptions), MCL shall, within three Business
Days of a demand by the Agent, pay for the account of a Finance Party
the amount of any Increased Costs incurred by that Finance Party 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 law or regulation made after
the date of this Agreement. The terms "law" and "regulation" in this
paragraph (a) shall include 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 any Facility or on a
Finance Party's (or its Affiliate's) overall capital
(including as a result of any reduction in the rate of return
on capital brought about by more capital being required to be
allocated by such Finance Party);
(ii) an additional or increased cost; or
(iii) a reduction of any amount due and payable under any Expanded
Finance Document,
which is incurred or suffered by a Finance Party or any of its
Affiliates to the extent that it is attributable to that Finance Party
having entered into its Commitment or funding or performing its
obligations under any Finance Document.
15.2 INCREASED COST CLAIMS
(a) A Finance Party intending to make a claim pursuant to Clause 15.1
(Increased costs) shall notify the Agent of the event giving rise to
the claim, giving reasonable particulars, following which the Agent
shall promptly notify MCL.
(b) Each Finance Party shall, as soon as practicable after a demand by the
Agent, provide a certificate confirming the amount of its Increased
Costs, giving reasonable particulars.
15.3 EXCEPTIONS
(a) Clause 15.1 (Increased costs) does not apply to the extent any
Increased Cost is:-
(i) attributable to a Tax Deduction required by law to be made by
an Obligor;
(ii) compensated for by Clause 14.3 (Tax indemnity) (or would have
been compensated for under Clause 14.3 (Tax indemnity) but was
not so compensated solely because an exclusion in paragraph
(a) of Clause 14.3 (Tax indemnity) applied); or
(iii) attributable to the failure by the relevant Finance Party or
its Affiliates to comply with any law or regulation.
(b) In this Clause 15.3, a reference to a "TAX DEDUCTION" has the same
meaning given to the term in Clause 14.1 (Definitions).
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16. OTHER INDEMNITIES
16.1 CURRENCY INDEMNITY
(a) If any sum due from an Obligor 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 that Obligor; or
(ii) obtaining or enforcing an order, judgment or award in relation
to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business
Days of demand, indemnify each Finance Party to whom that Sum is due
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) Each Obligor 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.
16.2 OTHER INDEMNITIES
MCL shall (or shall procure that an Obligor will), within three
Business Days of demand, indemnify each Finance Party against any cost,
loss or liability incurred by that Finance Party as a result of:-
(a) the occurrence of any Event of Default;
(b) a failure by an Obligor to pay any amount due under a Finance
Document on its due date, including any cost, loss or
liability arising as a result of Clause 30 (Sharing among the
Lenders);
(c) funding, or making arrangements to fund, its participation in
a Utilisation requested by MCL 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 that Finance Party alone);
(d) a Utilisation (or part of a Utilisation) not being prepaid in
accordance with a notice of prepayment given by MCL or as
required by this Agreement;
(e) any written information produced or approved by an authorised
signatory referred to in Clause 21.15 (Authorised Signatories)
on behalf of MCL in connection with the Facility being or
being alleged to be misleading and/or deceptive in any
material respect; and
(f) any enquiry, investigation, subpoena (or similar order) or
litigation with respect to an Obligor or with respect to an
Obligor's involvement in the transactions contemplated or
financed under the Finance Documents.
16.3 INDEMNITY TO THE AGENT AND THE SECURITY TRUSTEE
MCL shall promptly indemnify the Agent and the Security Trustee against
any cost, loss or liability incurred by the Agent or the Security
Trustee (in each case acting reasonably) as a result of:-
(a) investigating any event which it reasonably believes is a
Default (except that the Agent or the Security Trustee will
not be entitled to an indemnity under this Clause 16.3(a) to
the extent that it
47
incurs costs investigating an anticipated payment default prior to the
date on which a payment is due but has not been paid); or
(b) acting or relying on any notice, request or instruction which
it reasonably believes to be genuine, correct and
appropriately authorised.
17. MITIGATION BY THE LENDERS
17.1 MITIGATION
(a) Each Finance Party shall, in consultation with MCL, 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 9.1 (Illegality), Clause 14 (Tax gross-up
and indemnities) (or Clause 15 (Increased costs)) including (but not
limited to) transferring its rights and obligations under the Expanded
Finance Documents to another Affiliate or Facility Office.
(b) Paragraph (a) above does not in any way limit the obligations of any
Obligor under the Finance Documents.
17.2 LIMITATION OF LIABILITY
(a) MCL shall, upon being provided with reasonable particulars of the
calculation of the same, indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of steps
taken by it under Clause 17 (Mitigation by Lenders).
(b) A Finance Party is not obliged to take any steps under Clause 17
(Mitigation by Lenders) if, in the opinion of that Finance Party
(acting reasonably), to do so might be prejudicial to it.
18. COSTS AND EXPENSES
18.1 TRANSACTION EXPENSES
MCL shall within 10 Business Days of demand pay the Agent and the
Security Trustee the amount of all costs and expenses (including legal
fees) (subject to any limits agreed between them before the date of
this Agreement) incurred by any of them in connection with the
negotiation, preparation, printing, execution and syndication of:-
(a) this Agreement and any other documents referred to in this
Agreement; and
(b) any other Finance Documents executed after the date of this
Agreement.
18.2 AMENDMENT COSTS
If (a) an Obligor requests an amendment, waiver or consent or (b) an
amendment is required pursuant to Clause 31.9 (Change of currency), MCL
shall, within 10 Business Days of demand, reimburse the Agent and the
Security Trustee for the amount of all costs and expenses (including
legal fees) reasonably incurred by the Agent or the Security Trustee in
responding to, evaluating, negotiating or complying with that request
or in connection with that required amendment.
18.3 ENFORCEMENT COSTS
MCL shall, within 10 Business Days of demand, pay to each Finance Party
and Sinosure the amount of all costs and expenses (including legal
fees) incurred by that Finance Party and/or Sinosure in connection with
the enforcement of, or the preservation of any rights under, any
Expanded Finance Document or in connection with any restructuring or
renegotiation of the Secured Obligations.
48
18.4 SECURITY TRUSTEE EXPENSES
MCL shall promptly on demand pay the Security Trustee the amount of all
costs and expenses (including legal fees) reasonably incurred by it in
connection with the administration or release of any Security created
pursuant to any Security Document.
49
SECTION 8
PERFORMANCE BOND
19. PERFORMANCE BOND
19.1 IMMEDIATELY PAYABLE
If a Performance Bond or any amount outstanding under a Performance
Bond is expressed to be immediately payable, MCL shall repay or prepay
that amount immediately.
19.2 ASSIGNMENTS AND TRANSFERS
(a) Notwithstanding any other provision of this Agreement, the consent of
the Issuing Bank is required for any assignment or transfer of any
Lender's rights and/or obligations under the Performance Bond Facility.
(b) If paragraph (a) and the conditions and procedure for transfer
specified in Clause 26 (Changes to the Lenders) are satisfied, then on
the Transfer Date the Issuing Bank and the New Lender shall acquire the
same obligations between themselves as they would have acquired and
assumed had the New Lender been an Original Lender with the rights
and/or obligations acquired or assumed by it as a result of the
transfer and to that extent the Issuing Bank and the Existing Lender
shall each be released from further obligations to each other under
this Agreement.
19.3 FEE PAYABLE IN RESPECT OF PERFORMANCE BONDS
(a) MCL shall pay to the Issuing Bank a fronting fee in respect of each
Performance Bond requested by it in the amount and at the times agreed
in the letter between the Issuing Bank and MCL. A reference in this
Agreement to a Fee Letter shall include the letter referred to in this
paragraph.
(b) MCL shall pay to the Agent (for the account of each Lender) a
performance bond commission in Hong Kong Dollars computed at the rate
of * per annum on the outstanding amount of each Performance Bond
requested by it for the period from the issue of that Performance Bond
until its Expiry Date. This fee shall be distributed according to each
Lender's Bond Proportion of that Performance Bond.
(c) The performance bond commission on a Performance Bond shall be payable
on the date of issue of that Performance Bond. Accrued performance bond
commission is also payable to the Agent on the cancelled amount of any
Lender's Performance Bond Facility Commitment at the time the
cancellation is effective if that Commitment is cancelled in full and
the Performance Bond prepaid or repaid in full.
19.4 CLAIMS UNDER A PERFORMANCE BOND
(a) MCL and the Lenders irrevocably and unconditionally authorises the
Issuing Bank to pay any claim made or purported to be made under a
Performance Bond and which appears on its face to be in order (a
"CLAIM").
(b) The Issuing Bank agrees to notify the Lenders and MCL promptly after
receipt of any claims under any Performance Bond.
(c) MCL shall immediately on demand pay to the Agent for the Issuing Bank
an amount equal to the amount of any claim.
(d) MCL acknowledges that the Issuing Bank:
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[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
50
(i) is not obliged to carry out any investigation or seek any
confirmation from any other person before paying a claim; and
(ii) deals in documents only and will not be concerned with the
legality of a claim or any underlying transaction or any
available set-off, counterclaim or other defence of any
person.
(e) The obligations of MCL under this Clause 19 will not be affected by:
(i) the sufficiency, accuracy or genuineness of any claim or any
other document; or
(ii) any incapacity of, or limitation on the powers of, any person
signing a claim or other document.
19.5 INDEMNITIES
(a) MCL shall immediately on demand indemnify the Issuing Bank against any
cost, loss or liability incurred by the Issuing Bank (otherwise than by
reason of the Issuing Bank's gross negligence or wilful misconduct) in
acting as the Issuing Bank under any Performance Bond.
(b) Each Lender shall (according to its Bond Proportion) immediately on
demand indemnify the Issuing Bank against any cost, loss or liability
incurred by the Issuing Bank (otherwise than by reason of the Issuing
Bank's gross negligence or wilful misconduct) in acting as the Issuing
Bank under any Performance Bond (unless the Issuing Bank has been
reimbursed by MCL).
(c) If any Lender is not permitted (by its constitutional documents or any
applicable law) to comply with paragraph (b) above), then that Lender
will not be obliged to comply with paragraph (b) and shall instead be
deemed to have taken, on the date the Performance Bond is issued (or if
later, on the date the Lender's participation in the Performance Bond
is transferred or assigned to the Lender in accordance with the terms
of this Agreement), an undivided interest and participation in the
Performance Bond in an amount equal to its Bond Proportion of that
Performance Bond. On receipt of demand from the Agent, that Lender
shall pay to the Agent (for the account of the Issuing Bank) an amount
equal to its Bond Proportion of the amount demanded under paragraph (b)
above.
(d) MCL shall immediately on demand reimburse any Lender for any payment it
makes to the Issuing Bank under this Clause 19.5 (Indemnities) in
respect of a Performance Bond.
(e) The obligations of each Lender under this Clause 19 are continuing
obligations and will extend to the ultimate balance of sums payable by
that Lender in respect of any Performance Bond, regardless of any
intermediate payment or discharge in whole or in part.
(f) The obligations of any Lender under this Clause 19 will not be affected
by any act, omission, matter or thing which, but for this Clause 19,
would reduce, release or prejudice any of its obligations under this
Clause 19 (without limitation and whether or not known to it or any
other person) including:
(i) any time, waiver or consent granted to, or composition with
MCL, any beneficiary under a Performance Bond or any other
person;
(ii) the release of MCL or any other person under the terms of any
composition or arrangement with any creditor or any member of
the Group;
(iii) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of MCL,
any beneficiary under a Performance Bond or any other person
or any non-presentation or non-observance of any formality
51
or other requirement in respect of any instrument or any
failure to realise the full value of any security;
(iv) any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members or
status of MCL, any beneficiary under a Performance Bond or any
other person;
(v) any amendment (however fundamental) or replacement of a
Finance Document, any Performance Bond or any other document
or security;
(vi) any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document, any
Performance Bond or any other document or security; or
(vii) any insolvency or similar proceedings.
19.6 RIGHTS OF CONTRIBUTION
MCL will not be entitled to any right of contribution or indemnity from
any Finance Party in respect of any payment it may make under this
Clause 19.
19.7 ROLE OF THE ISSUING BANK
(a) Nothing in this Agreement constitutes the Issuing Bank as a trustee or
fiduciary of any other person.
(b) The Issuing Bank shall not be bound to account to any Lender for any
sum or the profit element of any sum received by it for its own
account.
(c) The Issuing Bank may accept deposits from, lend money to and generally
engage in any kind of banking or other business with any Borrowing
Group Party and any other party to the Relevant Documents.
(d) The Issuing Bank may rely on:
(i) any representation, notice or document believed by it to be
genuine, correct and appropriately authorised; and
(ii) any statement made by a director, authorised signatory or
employee of any person regarding any matters which may
reasonably be assumed to be within his knowledge or within his
power to verify.
(e) The Issuing Bank may engage, pay for and rely on the advice or services
of any lawyers, accountants, surveyors or other experts.
(f) The Issuing Bank may act in relation to the Finance Documents through
its personnel and agents.
(g) The Issuing Bank is not responsible for:
(i) the adequacy, accuracy and/or completeness of any information
(whether oral or written) supplied by the Issuing Bank, the
Agent, the Security Trustee, MCL or any other person given in
or in connection with any Relevant Document or the Information
Memorandum; or
(ii) the legality, validity, effectiveness, adequacy or
enforceability of any Relevant Document or any other
agreement, arrangement or document entered into, made or
executed in anticipation of or in connection with any Relevant
Document.
52
19.8 EXCLUSION OF LIABILITY
(a) Without limiting paragraph (b) below, the Issuing Bank will not be
liable for any action taken by it under or in connection with any
Finance Document, unless directly caused by its gross negligence or
wilful misconduct.
(b) No Party (other than the Issuing Bank) may take any proceedings against
any officer, employee or agent of the Issuing Bank in respect of any
claim it might have against the Issuing Bank or in respect of any act
or omission of any kind by that officer, employee or agent in relation
to any Finance Document.
19.9 CREDIT APPRAISAL BY THE LENDERS
Without affecting the responsibility of MCL for information supplied by
it or on its behalf in connection with any Finance Document, each
Lender confirms to the Issuing Bank that it has been, and will continue
to be, solely responsible for making its own independent appraisal and
investigation of all risks arising under or in connection with any
Finance Document, including but not limited to, those listed in
paragraphs (a) to (d) of Clause 28.14 (Credit appraisal by the
Lenders).
19.10 ADDRESS FOR NOTICES
The address, fax number and telex number (and the department or
officer, if any, for whose attention the communication is to be made)
of the Issuing Bank for any communication or document to be made or
delivered under or in connection with the Finance Documents is that
notified in writing to the Agent prior to the date on which the Issuing
Bank accedes to this Agreement or any substitute address, fax number,
telex number or department or officer as the Issuing Bank may notify to
the Agent by not less than five Business Days' notice.
19.11 AMENDMENTS AND WAIVERS
Notwithstanding any other provision of this Agreement, an amendment or
waiver which relates to the rights or obligations of the Issuing Bank
may not be effected without the consent of the Issuing Bank.
19.12 NOTIFY BORROWER OF DEMANDS UNDER PERFORMANCE BONDS
The Issuing Bank shall notify the Lenders and MCL promptly after
receipt of any demand or claims from OFTA or its permitted assignees
under any Performance Bond.
53
SECTION 9
GUARANTEE AND SECURITY
20. GUARANTEE AND INDEMNITY
20.1 GUARANTEE AND INDEMNITY
The Guarantor irrevocably and unconditionally:-
(a) guarantees to each Finance Party punctual performance by each
other Obligor of all that Obligor's obligations under the
Finance Documents;
(b) undertakes with each Finance Party that whenever an Obligor
does not pay any amount when due under or in connection with
any Expanded Finance Document, it shall immediately on demand
pay that amount as if it was the principal obligor; and
(c) indemnifies each Finance Party immediately on demand against
any cost, loss or liability suffered by that Finance Party if
any obligation guaranteed by it (or anything which would have
been an obligation if not unenforceable, invalid or illegal)
is or becomes unenforceable, invalid or illegal. The amount of
the cost, loss or liability shall be equal to the amount which
that Finance Party would otherwise have been entitled to
recover.
20.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the
ultimate balance of sums payable by any Obligor under the Finance
Documents, regardless of any intermediate payment or discharge in whole
or in part.
20.3 REINSTATEMENT
If any payment to or any discharge given by a Finance Party (whether in
respect of the obligations of any Obligor or any security for those
obligations or otherwise) is avoided or reduced for any reason
including as a result of insolvency, breach of fiduciary or statutory
duties or any similar event:-
(a) the liability of each Obligor shall continue as if the
payment, discharge, avoidance or reduction had not occurred;
and
(b) each Finance Party shall be entitled to recover the value or
amount of that security or payment from each Obligor, as if
the payment, discharge, avoidance or reduction had not
occurred.
20.4 WAIVER OF DEFENCES
The obligations of the Guarantor under this Clause 20 will not be
affected by an act, omission, matter or thing which, but for this
Clause, would reduce, release or prejudice any of its obligations under
this Clause 20 (without limitation and whether or not known to it or
any Finance Party) including:-
(a) any time, waiver or consent granted to, or composition with,
any Obligor or other person;
(b) the release of any other Obligor or any other person under the
terms of any composition or arrangement with any creditor of
any member of the Group;
(c) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, any
Obligor or other
54
person or any non-presentation or non-observance of any
formality or other requirement in respect of any instrument or
any failure to realise the full value of any security;
(d) any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members or
status of an Obligor or any other person;
(e) any amendment (however fundamental) or replacement of an
Expanded Finance Document or any other document or security;
(f) any unenforceability, illegality or invalidity of any
obligation of any person under any Expanded Finance Document
or any other document or security;
(g) any insolvency or similar proceedings; or
(h) this Agreement or any other Expanded Finance Document not
being executed by or binding against any other party.
20.5 IMMEDIATE RECOURSE
The Guarantor waives any right it may have of first requiring any
Finance Party (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment from
any person before claiming from it under this Clause 20. This waiver
applies irrespective of any law or any provision of an Expanded Finance
Document to the contrary.
20.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors under
or in connection with the Expanded Finance Documents have been
irrevocably paid in full, each Finance Party (or any trustee or agent
on its behalf) may:-
(a) refrain from applying or enforcing any other moneys, security
or rights held or received by that Finance Party (or any
trustee or agent on its behalf) in respect of those amounts,
or apply and enforce the same in such manner and order as it
sees fit (whether against those amounts or otherwise) and the
Guarantor shall not be entitled to the benefit of the same;
and
(b) hold in an interest-bearing suspense account any moneys
received from the Guarantor or on account of the Guarantor's
liability under this Clause 20 .
20.7 DEFERRAL OF GUARANTOR'S RIGHTS
Until all amounts which may be or become payable by the Obligors under
or in connection with the Expanded Finance Documents have been
irrevocably paid in full and unless the Agent (or, as the case may be,
the Security Trustee) otherwise directs, the Guarantor will not
exercise any rights which it may have by reason of performance by it of
its obligations under the Finance Documents:-
(a) to be indemnified by an Obligor;
(b) to claim any contribution from any other guarantor of or
provider of security for any Obligor's obligations under the
Finance Documents; and/or
(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Finance Parties
under the Expanded Finance Documents or of any other guarantee
or security taken pursuant to, or in connection with, the
Expanded Finance Documents by any Finance Party.
55
20.8 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by
any other guarantee or security now or subsequently held by any Finance
Party.
56
SECTION 10
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
21. REPRESENTATIONS
Each Obligor (other than SUNDAY) and MCL on behalf of SUNDAY makes the
representations and warranties set out in this Clause 21 to each
Finance Party on the Effective Date and makes the Repeating
Representations on the dates set out in Clause 21.29 (Repetition), in
each case on the following basis:
(a) MCL makes any representation and warranty which applies to a
member of the MCL Group in respect of that member of the MCL
Group on the Effective Date and (if that representation and
warranty is a Repeating Representation) on each date on which
a Repeating Representation is expressed to be repeated under
Clause 21.29 (Repetition);
(b) each Obligor (other than MCL) makes any representation and
warranty which apply to it only in respect of itself on the
date on which it becomes an Obligor (or, if later, the
Effective Date) and on each date on which a Repeating
Representation is expressed to be repeated under Clause 21.29
(Repetition); and
(c) MCL makes any representation which is not specifically
expressed to apply to a member of the Group on the Effective
Date and (if that representation and warranty is a Repeating
Representation) on each date on which a Repeating
Representation is expressed to be repeated under Clause 21.29
(Repetition).
21.2 STATUS
(a) Except for the PRC Company, each member of the Group is a limited
liability company or corporation, duly incorporated and validly
existing under the law of its jurisdiction of incorporation.
(b) The PRC Company was, when established, validly and properly established
in the PRC as a foreign invested enterprise in accordance with all
applicable laws of the PRC.
(c) Each Obligor has the power to own its assets and carry on its business
as it is being conducted.
21.3 BINDING OBLIGATIONS
The obligations expressed to be assumed by each Obligor in each Finance
Document to which it is or will be a party are legal, valid, binding
and enforceable, subject to:-
(a) any general principles of law limiting its obligations which
are specifically referred to in any legal opinion delivered in
accordance with Clause 4 (Conditions of Utilisation) or Clause
27 (Changes to the Obligors);
(b) in the case of any Security Document, the Perfection
Requirements; and
(c) in the case of Excepted Assets, any actions necessary for
those assets to be secured under the Security Documents.
21.4 NON-CONFLICT WITH OTHER OBLIGATIONS
The entry into and performance by each Obligor of, and the transactions
contemplated by, the Finance Documents do not and will not conflict
with:-
(a) any law or regulation applicable to it;
57
(b) its constitutional documents; or
(c) (to any extent which could reasonably be expected to result in
a Material Adverse Effect) any agreement or instrument binding
upon it or any of its assets.
21.5 POWER AND AUTHORITY
Each Obligor has the power to enter into, perform and deliver, and has
taken all necessary action to authorise its entry into, performance and
delivery of, the Finance Documents to which it is a party and the
transactions contemplated by those Finance Documents.
21.6 VALIDITY AND ADMISSIBILITY IN EVIDENCE
All Authorisations required:-
(a) to enable each Obligor lawfully to enter into, exercise its
rights and comply with its obligations in the Finance
Documents to which it is a party and the transactions
contemplated by such Finance Documents;
(b) to make the Finance Documents to which it is a party
admissible in evidence in its jurisdiction of incorporation;
and
(c) to enable it to create the Security to be created by it
pursuant to any Security Document and to ensure that such
Security has the priority and ranking it is expressed to have,
have been obtained or effected and are in full force and effect except:
(a) for any applicable Perfection Requirements that are yet to be
complied with in accordance with the Finance Documents;
(b) as specifically referred to in any legal opinion accepted
pursuant to Clause 4 (Conditions of Utilisations) or Clause 27
(Changes to the Obligors); and
(c) in the case of Excepted Assets, any actions necessary for
those assets to be secured under the Security Documents.
21.7 GOVERNING LAW AND ENFORCEMENT
Except as specifically referred to in any legal opinion accepted
pursuant to Clause 4 (Conditions of Utilisations) or Clause 27 (Changes
to the Obligors):-
(a) the choice of law specified in each Finance Document as the
governing law of each Finance Document will be recognised and
enforced in its jurisdiction of incorporation; and
(b) any judgment obtained in Hong Kong in relation to a Finance
Document (or in the jurisdiction of the governing law of that
Finance Document) will be recognised and enforced in its
jurisdiction of incorporation and, in relation to a Finance
Document governed by a law other than Hong Kong law, in the
jurisdiction of the governing law of that Finance Document.
21.8 DEDUCTION OF TAX
Neither MCL nor SUNDAY is required under the law of its jurisdiction of
incorporation to make any deduction for or on account of Tax from any
payment it may make under any Finance Document.
21.9 FILINGS AND STAMP TAXES
Under the law of each Obligor's jurisdiction of incorporation it is not
necessary that the Finance Documents be filed, recorded or enrolled
with any court or other authority in that jurisdiction or that any
58
stamp, registration or similar tax be paid on or in relation to the
Finance Documents or the transactions contemplated by the Finance
Documents (save in each case for complying with any applicable
Perfection Requirements).
21.10 NO DEFAULT
(a) No Event of Default is continuing or might reasonably be expected to
result from the making of any Utilisation.
(b) No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding on any
Obligor or to which any Obligor's assets are subject which might have a
Material Adverse Effect.
21.11 NO MISLEADING INFORMATION
(a) Any written factual information provided by MCL or any other Obligor
including written factual information provided for the purposes of the
Information Memorandum 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.
(b) Any financial projections contained in the Information Memorandum have
been prepared on the basis of recent historical information and on the
basis of reasonable assumptions.
(c) Nothing has occurred or been omitted from the Information Memorandum
and no information has been given or withheld that results in the
information contained in the Information Memorandum or otherwise
provided by MCL or any other Borrowing Group Party being untrue or
misleading in any material respect.
21.12 FINANCIAL STATEMENTS
(a) The Original Financial Statements were prepared in accordance with GAAP
consistently applied save to the extent expressly disclosed in such
Original Financial Statements.
(b) The Original Financial Statements give a true and fair view and
represent its financial condition and operations (consolidated in the
case of SUNDAY and MCL) during the relevant financial year save to the
extent expressly disclosed in such Original Financial Statements.
(c) There has been no material adverse change in any Obligor's business or
financial condition (or the business or consolidated financial
condition of SUNDAY MCL or the Credit Net) since 31 December 2003.
21.13 PARI PASSU RANKING
Each Obligor's payment obligations under the Finance Documents rank at
least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except for obligations mandatorily preferred
by law applying to companies generally.
21.14 NO PROCEEDINGS PENDING OR THREATENED
(a) No litigation, arbitration or administrative proceedings of or before
any court, arbitral body or agency which, if adversely determined,
might reasonably be expected to have a Material Adverse Effect have (to
the knowledge of SUNDAY or MCL) been started or threatened against it
or any member of the Group.
(b) No labour disputes which might have a Material Adverse Effect are
current or (to the knowledge of SUNDAY or MCL) threatened, nor are
there any circumstances likely to give rise to any such disputes.
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21.15 AUTHORISED SIGNATORIES
Any person specified as its authorised signatory under Schedule 2
(Conditions precedent) or under Clause 22.6 (Information:
miscellaneous) is authorised to sign Utilisation Requests and other
notices on its behalf.
21.16 SHARES
(a) The shares (including preferred shares) of any member of the Group
(except SUNDAY) which are expressed to be (or are required by this
Agreement to be or become) subject to any Security under any Security
Document are duly authorised, validly issued, fully paid,
non-assessable and freely transferable, and there are no moneys or
liabilities outstanding or payable by the holder in respect of any such
share.
(b) No person has or is entitled to any conditional or unconditional
option, warrant or other Equity Rights in respect of the share capital
of any member of the Group (except SUNDAY) (including any right of
pre-emption, conversion or exchange).
(c) There are no agreements in force or corporate resolutions passed which
require or might require the present or future issue or allotment of
any share capital or loan capital of any member of the Group (except
SUNDAY) (including any option or right of pre-emption, conversion or
exchange).
21.17 ASSETS
(a) Each Obligor and Credit Net Member has good and marketable title to, or
valid leases or licences of or is otherwise entitled to use, all
material assets required by it to carry on its business as it is being
conducted or, if different, which are subject to the Security created
by the Security Documents except only for minor defects in title that
do not interfere with the use of the relevant asset or the relevant
member of the Group carrying on its business.
(b) No Credit Net Member has any interests in respect of real property.
(c) After the Security Documents required to be executed under Schedule 2
(Conditions Precedent) have been executed and subject to any Perfection
Requirements, all of the material property of the Credit Net will be
expressed to be secured pursuant to the Security Documents except for
assets owned or used in the PRC by the PRC Company.
21.18 ENVIRONMENTAL LAWS AND LICENCES
Each Obligor has:-
(a) complied with all Environmental Laws to which it may be
subject;
(b) all Environmental Licences required in connection with its
business; and
(c) complied with the terms of those Environmental Licences,
in each case where failure to do so could reasonably be expected have a
Material Adverse Effect.
21.19 ENVIRONMENTAL RELEASES
No:-
(a) property currently owned, leased or occupied by any Obligor
has been contaminated with any Hazardous Substance; and
(b) discharge, release, leaching or escape of any Hazardous
Substance into the Environment in breach of Environmental Laws
has occurred or is occurring in the conduct of the business of
the Group,
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in each case in circumstances where this might have a Material Adverse
Effect.
21.20 GROUP STRUCTURE
(a) The Group Structure Chart shows:-
(i) each member of the Group and any person in which any member of
the Group has an interest in the issued share capital or
equivalent ownership interest (and the percentage of the total
share capital or equivalent ownership interest held, whether
legally or beneficially, by that member);
(ii) the entire issued share capital (broken down into Classes, if
relevant), and all Equity Rights (if any) which have been
authorised and/or issued, in respect of each member of the
Group, confirming which shares and Equity Rights are paid up;
(iii) the jurisdiction of incorporation or establishment of each
person shown in it;
(iv) the status of each person shown in it which is not a limited
liability company or corporation; and
(v) a breakdown of each Class of shares in a particular person.
(b) PKI Holdings wrote down to zero its investment in Atria in the
financial year ending 31 December 2003. * PKI Holdings has no
outstanding obligations or liabilities to Atria and holds no assets
other than the shares in Atria.
(c) On the Effective Date:
(i) the aggregate of the unconsolidated net assets of the Credit
Net (without double counting and excluding any interests in
any members of the Group which are Credit Net Members) exceeds
* of the consolidated net assets of the Group; and
(ii) the aggregate of the unconsolidated revenues/profits or losses
before interest and tax of the Credit Net (without double
counting and excluding any dividends or other distributions
from members of the Group which are Credit Net) exceeds * of
the consolidated revenues/profits or losses before interest
and tax of the Group,
in each case calculated by reference to the Original Financial
Statements of SUNDAY.
21.21 NO FINANCIAL INDEBTEDNESS OR SECURITY
(a) No Obligor has any Financial Indebtedness other than (i) (until the
first Utilisation Date) under the Bridging Loan, and (ii) as permitted
by Clause 24.9 (Restrictions on borrowings).
(b) As at the date specified in the Schedule of Intra-Group and External
Borrowings, SUNDAY and Credit Net Members owe no Financial Indebtedness
except for that set out in the Schedule of Intra-Group and External
Borrowings.
(c) No Obligor on the Effective Date has any Security outstanding over any
of its assets except for:-
(i) Permitted Trade Security; and
(ii) any Security granted in connection with the Bridging Loan.
(d) On the first Utilisation Date, simultaneously with the General Loan
being advanced, there is no Security over the assets of any member of
the Group except for Permitted Trade Security.
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21.22 INTELLECTUAL PROPERTY RIGHTS
(a) Each member of the MCL Group owns or has licensed to it all the
material Intellectual Property Rights necessary to the conduct of its
business as it is being, or is proposed to be, conducted.
(b) To the best of MCL's knowledge, no member of the MCL Group has received
any notice of infringement by it of any Material Intellectual Property.
(c) All registered Material Intellectual Property is fully valid and
subsisting in the names of the Obligors.
21.23 SOLVENCY
No Obligor is unable to pay its debts (including subordinated and
contingent debts), nor could it be deemed by a court to be unable to
pay its debts within the meaning of Section 178(1) of the Companies
Ordinance (Cap.32).
21.24 TAXES
Each Obligor has paid when due all Taxes required to be paid by it
other than any Taxes:-
(a) being contested by it in good faith and in accordance with the
relevant procedures; and
(b) which have been disclosed to the Agent.
21.25 INSURANCES
(a) The insurances required by Clause 24.21 (Insurance) are in full force
and effect as required pursuant to the terms of this Agreement.
(b) No event or circumstance has occurred, and there has been no failure to
disclose a material fact, which would entitle any insurer to reduce or
avoid its liability under any such insurance.
(c) No material claim has been made on such insurance policies which is
currently unpaid or outstanding or may be made and there are no
circumstances existing which may give rise to a claim.
(d) There is no fact or matter which could lead to any policy being avoided
or repudiated or refused renewal on substantially the current terms or
which may lead or has led to the premiums in respect of such policies
being increased.
21.26 MATERIAL AGREEMENTS AND LICENCES
(a) Credit Net Obligors which are members of the MCL Group are the only
members of the Group which are party to, or have rights under, each of
the Material Agreements.
(b) Each Licence is held in the name of a Credit Net Obligor which is a
member of the MCL Group.
(c) Each Material Agreement constitutes or will, when executed, constitute
the legal, valid, binding and enforceable obligations of the Obligor
which is party to it, subject to any general principles of law limited
their respective obligations which are specifically referred to in any
legal opinion delivered pursuant to Clause 4 (Conditions of
Utilisation).
(d) Each Authorisation necessary in connection with the entry into,
performance (in all material respects) and validity and enforceability
of each Material Agreement has been obtained or effected.
(e) Each Licence held by a Credit Net Obligor is in full force and effect
and each member of the Group is in compliance in all material respects
with all provisions thereof that are applicable to it.
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(f) MCL is not, and subject to paragraph (k), to the best of MCL's
knowledge, no party (other than MCL) to a Material Agreement, is in
breach of any of its obligations under a Material Agreement, except for
such breaches as could not reasonably be expected to have a Material
Adverse Effect.
(g) Subject to paragraph (k), no dispute exists under or in relation to:
(i) any Licence; or
(ii) any Material Agreement
to an extent or in a manner which has, or could reasonably be expected
to have, a Material Adverse Effect.
(h) At the date of signing this Agreement, there have been no material
amendments, supplements or waivers to any Material Agreement from the
form provided to the Agent in accordance with Clause 4.2 (Initial
conditions precedent).
(i) Subject to paragraph (k), there has been no act, omission or event
which might reasonably be expected to give rise to the revocation,
suspension, cancellation, withdrawal or termination of any provision of
any Material Agreement, nor is any Material Agreement the subject of
any pending or threatened proceedings which proceedings if adversely
determined might reasonably be expected to have a Material Adverse
Effect.
(j) There are no outstanding obligations or liabilities under any supply,
warranty or related contract or agreement entered into between any
member of the Group and Nortel Networks (Asia) Limited (formerly
Northern Telecom (Asia) Limited) ("NORTEL") or any Affiliate of Nortel
and all such contracts or agreements have expired in accordance with
their terms, except that under the Nortel Purchase and Services
Agreement, Nortel has outstanding obligations to supply certain
equipment and services, including the provision of extended warranties,
in relation to which the aggregate sum of US$3,040,000 will be payable
by MCL and such liability will be discharged by MCL on or before the
end of 2005.
(k) No representation is made under paragraphs (f), (g) or (i) above in
respect of any action or omission of the Supplier under the Supply
Contract.
21.27 BUSINESS PLAN
(a) The Business Plan (including the financial and business model) was
prepared in good faith after due and careful consideration and has been
based on reasonable assumptions and all forecasts in the Business Plan
are believed to be reasonable.
(b) The Business Plan has been approved by the Executive Management
Committee of the Board of Directors of SUNDAY.
21.28 NON-CREDIT NET GROUP MEMBERS
None of the Non-Credit Net Group Members:
(a) retain the ownership or operational use of any assets which
are strategically material to the business or operations of
the Network or the MCL Group; or
(b) own any of the Material Intellectual Property or Software
Licences, except on terms where the use and enjoyment has been
irrevocably licensed to a member of the MCL Group which is a
Credit Net Obligor.
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21.29 DISTACOM SHAREHOLDERS
As at the date of this Agreement, the information included in the chart
set out in Schedule 12 (Distacom Shareholders) is an accurate
representation of the shareholdings in Distacom International Limited,
Distacom Communications Limited and Distacom Hong Kong Limited.
21.30 REPETITION
(a) The Repeating Representations are deemed to be made by each applicable
Obligor by reference to the facts and circumstances then existing on:-
(i) the date of each Utilisation Request and the first day of each
Interest Period; and
(ii) the day on which it becomes (or it is proposed that it
becomes) an Obligor.
(b) The representations and warranties set out in Clause 21.11 (No
misleading information) are deemed to be made by MCL by reference to
the facts and circumstances then existing on the date of issue of the
Information Memorandum or (as the case may be) the date on which any
factual information is provided.
(c) The representation set out in Clause 21.27 (Business Plan) will be
repeated with respect to any new or updated Business Plan upon the
delivery to the Agent of any such new or updated Business Plan.
22. INFORMATION UNDERTAKINGS
The undertakings in this Clause 22 remain in force from the Effective
Date for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force, provided that on the Effective
Date, MCL shall supply to the Agent all notices, documents or other
information that should have been supplied to the Agent pursuant to
this Clause 22 had the undertakings in this Clause 22 been in force
from the date of this Agreement.
22.1 QUARTERLY FINANCIAL ACCOUNTS
(a) SUNDAY shall supply to the Agent in sufficient copies for all the
Lenders as soon as the same become available, but in any event within
60 days after the end of each of its first three Accounting Quarters:-
(i) its unaudited consolidated financial accounts for that
Accounting Quarter; and
(ii) the unaudited Credit Net Pro Forma Financial Statements for
that Accounting Quarter, certified in accordance with
paragraph (a) of Clause 22.4 (Requirements as to financial
statements).
(b) MCL shall supply to the Agent in sufficient copies for all the Lenders
as soon as the same shall become available, but in any event within 60
days after the end of each of its first three Accounting Quarters, its
unaudited consolidated and non-consolidated financial accounts for that
Accounting Quarter.
(c) Each set of quarterly financial accounts delivered pursuant to
paragraph (a) or (b) above shall include:-
(i) consolidated cash flow statements and profit and loss accounts
for the relevant Accounting Quarter and for the financial year
to date (for SUNDAY, MCL and the Credit Net) and (for MCL) a
schedule on consolidation with summarised information for MCL;
(ii) a consolidated balance sheet as at the end of the relevant
Accounting Quarter (for SUNDAY, MCL and the Credit Net) and
(for MCL) a schedule on consolidation with summarised
information.
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22.2 ANNUAL FINANCIAL STATEMENTS
(a) SUNDAY shall supply to the Agent in sufficient copies for all the
Lenders as soon as the same become available, but in any event within
150 days after the end of each of its financial years commencing with
the financial year ending 31 December 2004:-
(i) the audited consolidated financial statements of the Group for
that financial year; and
(ii) the consolidated Credit Net Pro Forma Financial Statements for
that financial year, certified in accordance with paragraph
(a) of Clause 22.4 (Requirements for financial statements)
(b) MCL shall supply to the Agent in sufficient copies for all the Lenders
as soon as the same become available, but in any event within 150 days
after the end of each of its financial years commencing with the
financial year ending 31 December 2004 the audited consolidated
financial statements of the MCL Group and unaudited non-consolidated
financial accounts of MCL, incorporating profit and loss accounts,
balance sheet and cash flow statements for that financial year.
(c) Each set of financial statements delivered pursuant to paragraph (a) or
(b) shall include or be accompanied by:-
(i) the following cash flow statements and profit and loss
accounts for the relevant financial period or year:
(A) SUNDAY: consolidated and audited;
(B) MCL: audited consolidated and unaudited
non-consolidated; and
(C) Credit Net: consolidated and certified in accordance
with paragraph (a) of Clause 22.4 (Requirements for
financial statements);
(ii) the following balance sheets as at the end of the relevant
financial period or year:
(A) SUNDAY: consolidated and audited;
(B) MCL: audited consolidated and unaudited
non-consolidated; and
(C) Credit Net: consolidated and certified in accordance
with paragraph (a) of Clause 22.4 (Requirements for
financial statements);
(iii) an unaudited consolidated cash flow statement and profit and
loss account for the final Accounting Quarter of that
financial period or year for SUNDAY, MCL and the Credit Net
and a schedule on consolidation with summarized information
for MCL;
(iv) a management commentary on the Group's and the MCL Group's
performance during that financial year, including:-
(A) actual performance compared with budgeted performance
for that financial year;
(B) a comparison with performance in the previous
financial year; and
(C) any material developments or proposals affecting the
Group or the MCL Group (as appropriate); and
(v) details of all fixed assets of the Credit Net with either a
book value or original acquisition cost of at least
HK$5,000,000 (or its equivalent).
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22.3 COMPLIANCE CERTIFICATE
(a) SUNDAY and MCL shall each supply to the Agent, with each set of
financial statements delivered pursuant to paragraph (a) of Clause 22.2
(Annual financial statements), a Compliance Certificate under which:-
(i) MCL shall set out (in reasonable detail) computations as to
compliance with the terms of Clause 23 (Financial covenants)
which apply to it and the Credit Net as at the date at which
or, as the case may be, in respect of the period for which
those financial statements were drawn up;
(ii) each of SUNDAY and MCL shall set out any descriptions or
information required under paragraph (c) of Clause 22.4
(Requirements for financial statements); and
(iii) MCL shall confirm that, as at the date at which those
financial statements were drawn up, no Event of Default is
continuing (or if an Event of Default is continuing, specify
the Event of Default and the steps being taken to remedy it).
(b) If required to be delivered with the financial statements delivered
pursuant to paragraph (a) of Clause 22.2 (Annual financial statements),
the Compliance Certificate shall also:-
(i) set out (in reasonable detail) the computation of Excess Cash
Flow for that financial year (or other period);
(ii) set out (in reasonable detail) computations as to compliance
with Clause 23.5 (Dividend payments) during that financial
year (or other period); and
(iii) confirm the balances of each of the Permitted External Bank
Accounts.
(c) Each Compliance Certificate shall be signed by a Financial Officer.
(d) Each Compliance Certificate required to be delivered with the financial
statements delivered pursuant to paragraph (a)(i) of Clause 22.2
(Annual financial statements) shall be reported on by SUNDAY's and
MCL's auditors.
22.4 REQUIREMENTS FOR FINANCIAL STATEMENTS
(a) Each set of financial statements delivered by SUNDAY and MCL pursuant
to Clause 22.1 (Quarterly financial accounts) or Clause 22.2 (Annual
financial statements) shall be certified by a Financial Officer and (in
respect of Clause 22.2 (Annual financial statements)) by a director of
the relevant company as fairly representing (to the best of that
person's knowledge, after due and careful enquiry) its (or, as the case
may be, its consolidated) financial condition and operations as at the
end of and for the period in relation to which those financial
statements were drawn up.
(b) Each set of financial statements delivered by SUNDAY and MCL pursuant
to paragraphs (a)(i) and (b) of Clause 22.2 (Annual financial
statements) shall be reported on by SUNDAY's and MCL's auditors
(without any "going concern" or similar qualification or exception and
without any exception to the scope of the audit) and shall include a
confirmation that those financial statements present fairly in all
material respects the financial condition and results of operations of
each member of the Group in respect of which those financial statements
have been prepared and have been prepared in accordance with GAAP.
(c) SUNDAY shall procure that each set of financial statements of it, MCL,
the Group, the Credit Net and the MCL Group delivered pursuant to
Clause 22.1 (Quarterly financial accounts) or Clause 22.2 (Annual
financial statements) are prepared using GAAP, accounting practices and
financial reference periods in
66
each case consistent with the Applicable Accounting Principles unless,
in relation to any set of financial statements, it notifies the Agent
that there has been a change in GAAP, the accounting practices or
reference periods and its auditors deliver to the Agent:-
(i) a description of any change necessary for the relevant
financial statements to reflect the Applicable Accounting
Principles; and
(ii) sufficient information to enable the Lenders to determine
whether Clause 23 (Financial covenants) has been complied
with, to calculate the Excess Cash Flow, to determine any
other relevant matter and/or to make a true and fair
comparison between the financial position of the relevant
persons before and after that change.
Any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to
reflect the Applicable Accounting Principles.
22.5 ANNUAL BUDGET
MCL shall supply to the Agent in sufficient copies for all the Lenders
as soon as the same becomes available, but in any event no later than
15 days before the start of each of its financial years, a Budget
(including balance sheet, income statement and cash flow projections)
in respect of that next financial year in a form satisfactory to the
Agent (acting reasonably).
22.6 INFORMATION: MISCELLANEOUS
(a) SUNDAY and MCL each agrees to supply to the Agent (in sufficient copies
for all the Lenders, if the Agent so requests):-
(i) promptly after they are dispatched, all documents dispatched
by SUNDAY to any Stock Exchange, to SUNDAY's shareholders
generally or to all or substantially all of (or of any class
of) its creditors;
(ii) promptly upon becoming aware of them, the details of any
litigation, arbitration or administrative proceedings which
are current, threatened or pending against any member of the
Group, and which might, if adversely determined, have a
Material Adverse Effect;
(iii) promptly upon becoming aware of them, the details of any
transfer of legal or beneficial ownership in any share capital
or loan capital of any Obligor or any change of control of any
such share capital or loan capital or any actual or proposed
issue or allotment of any share capital or loan capital of any
member of the Group;
(iv) promptly upon becoming aware of them, the details of any
actual or proposed amendment to or waiver or consent under,
any breach of or default under, any notice given or received
under and any claim or potential claim made by or against any
member of the Group under any Material Agreement;
(v) promptly upon becoming aware of them, the details of any claim
or potential claim for an amount in excess of * (or its
equivalent in another currency or currencies) made by or on
behalf of any Obligor under any insurance policy;
(vi) promptly upon becoming aware of them, the details of any
change in the structure of the Group from that set out in the
Group Structure Chart which are or might be materially adverse
to the interests of the Finance Parties;
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(vii) promptly, notice of any change in authorised signatories of
any Obligor in respect of the Finance Documents signed by a
Financial Officer of that Obligor accompanied by specimen
signatures of any new signatory; and
(viii) promptly, such further information regarding the financial
condition, business and operations of any member of the Group
as any Finance Party or Sinosure (through the Agent) may
reasonably request.
(b) Each Obligor authorizes each of the other parties to any Expanded
Finance Document to disclose to each other all information relating to
itself and its related entities and coming into the possession of any of
them in connection with the Expanded Finance Documents.
22.7 NOTIFICATION OF DEFAULT
Each Obligor shall notify the Agent of any Event of Default (and the
steps, if any, being taken to remedy it) promptly upon becoming aware
of its occurrence (unless that Obligor is aware that a notification has
already been provided by another Obligor).
22.8 INSPECTION OF BOOKS AND RECORDS AND PROPERTY
Each Obligor shall :-
(a) keep books and records which accurately reflect in all
material respects all of its business, affairs and
transactions; and
(b) permit any Finance Party or any of its representatives, at
reasonable times, between 9:00 a.m. and 5:00 p.m., and
intervals, and upon reasonable notice, to visit any of its
offices, to inspect any of its material property, books and
records and to discuss its financial matters with its officers
and auditors.
22.9 AUDITORS AND FINANCIAL YEAR END
(a) SUNDAY shall ensure that the auditors for each member of the Group are
PricewaterhouseCoopers or any other independent public accountants of
recognized international standing.
(b) SUNDAY shall ensure that the financial year end of the Group and each
member of the Group is 31 December.
(c) No Obligor shall (and SUNDAY shall ensure that no other member of the
Group will) change its financial year end or the end of its Accounting
Quarter without the consent of the Majority Lenders (not to be
unreasonably withheld or delayed).
22.10 INVESTIGATIONS
(a) If an Event of Default has occurred and is continuing, the Agent
(acting on the instructions of the Majority Lenders) may:-
(i) instruct (or require SUNDAY to instruct) the auditors of the
Group (or such other independent public accountants of
recognised international standing as the Agent selects) to
investigate the affairs, financial performance or accounting
and other reporting procedures and standards of the Group; or
(ii) instigate such other investigations and commission such other
reports as the Agent (acting on the instructions of the
Majority Lenders) requires.
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The costs of each such investigation or report shall be borne by MCL.
(b) Each Obligor shall (and MCL shall ensure that each other member of the
Group will) co-operate fully with any person carrying out an
investigation or preparing a report pursuant to paragraph (a) above.
22.11 USE OF WEBSITES
(a) MCL may satisfy its obligation under this Agreement to deliver any
information in relation to those Lenders (the "WEBSITE LENDERS") who
accept this method of communication by posting this information onto an
electronic website designated by MCL and the Agent (the "DESIGNATED
WEBSITE") if:
(i) the Agent expressly agrees (after consultation with each of
the Lenders) that it will accept communication of the
information by this method;
(ii) both MCL and the Agent are aware of the address of and any
relevant password specifications for the Designated Website;
and
(iii) the information is in a format previously agreed between MCL
and the Agent.
If any Lender (a "PAPER FORM LENDER") does not agree to the delivery of
information electronically then the Agent shall notify MCL accordingly
and MCL shall supply the information to the Agent (in sufficient copies
for each Paper Form Lender) in paper form. In any event MCL shall
supply the Agent with at least one copy in paper form of any
information required to be provided by it.
(b) The Agent shall supply each Website Lender with the address of and any
relevant password specifications for the Designated Website following
designation of that website by SUNDAY and the Agent.
(c) MCL shall promptly upon becoming aware of its occurrence notify the
Agent if:
(i) the Designated Website cannot be accessed due to technical
failure;
(ii) the password specifications for the Designated Website change;
(iii) any new information which is required to be provided under
this Agreement is posted onto the Designated Website;
(iv) any existing information which has been provided under this
Agreement and posted onto the Designated Website is amended;
or
(v) MCL becomes aware that the Designated Website or any
information posted onto the Designated Website is or has been
infected by any electronic virus or similar software.
If MCL notifies the Agent under paragraph (c)(i) or paragraph (c)(v)
above, all information to be provided by MCL under this Agreement after
the date of that notice shall be supplied in paper form unless and
until the Agent and each Website Lender is satisfied that the
circumstances giving rise to the notification are no longer continuing.
(d) Any Website Lender may request, through the Agent, one paper copy of
any information required to be provided under this Agreement which is
posted onto the Designated Website. MCL shall comply with any such
request within ten Business Days.
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23. FINANCIAL COVENANTS
23.1 FINANCIAL CONDITION (CREDIT NET)
MCL shall ensure that:-
(a) MINIMUM INTEREST COVERAGE RATIO: the ratio of Annualised
EBITDA to Interest Expense for each Relevant Period ending on
a Relevant Date set out in the table below (the "INTEREST
COVERAGE RATIO") will not be less than the ratio set out in
the relevant column in the table below opposite that Relevant
Date;
(b) MINIMUM DEBT SERVICE COVERAGE RATIO: the ratio of Annualised
Cash Flow Available for Debt Service to Debt Service for each
Relevant Period ending on a Relevant Date falling on or after
30 September 2007 set out in the table below ("DEBT SERVICE
COVERAGE RATIO") will not be less than the ratio set out in
the relevant column in the table below opposite that Relevant
Date;
(c) MAXIMUM DEBT: EBITDA RATIO: on each date during any Relevant
Period ending on a Relevant Date set out in the table below,
the ratio of Total Borrowings on that date to Annualised
EBITDA ("MAXIMUM LEVERAGE RATIO") for the Relevant Period
ended on or (if that date is not a Relevant Date) most
recently before that date will not exceed the ratio set out in
the relevant column in the table below opposite the Relevant
Period ending on that Relevant Date;
(d) MINIMUM EBITDA: Annualised EBITDA for each Relevant Period
ending on a Relevant Date set out in the table below ("MINIMUM
EBITDA") will not be less than the amount set out in the
relevant column in the table below opposite that Relevant
Date; and
(e) MAXIMUM DEBT TO EQUITY RATIO: the ratio of Total Borrowings on
each date to Net Worth on that date or (if that date is not a
Relevant Date) the most recent Relevant Date ("MAXIMUM DEBT TO
EQUITY RATIO") will not at any time exceed the ratio which the
table below sets out as applying from the most recent Relevant
Date set out in the table below.
MINIMUM
MINIMUM DEBT INTEREST
SERVICE COVERAGE MAXIMUM MAXIMUM DEBT
RELEVANT DATE COVERAGE RATIO RATIO LEVERAGE RATIO MINIMUM EBITDA TO EQUITY RATIO
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* * * * * *
* * * * * *
* * * * * *
* * * * * *
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MINIMUM
MINIMUM DEBT INTEREST
SERVICE COVERAGE MAXIMUM MAXIMUM DEBT
RELEVANT DATE COVERAGE RATIO RATIO LEVERAGE RATIO MINIMUM EBITDA TO EQUITY RATIO
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* * * * * *
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(f) If there is any dispute in relation to the calculation of any
financial covenant (or any component of any financial
covenant) in this Clause 23, the Parties agree that a
certificate of the auditors of SUNDAY confirming the relevant
calculation shall be conclusive and binding on the Parties in
the absence of manifest error.
23.2 MAINTENANCE OF DSRA BALANCE
Within five Business Days of each DSRA Relevant Date, the Agent will
calculate the amount of the Projected General Facility Debt Service or
Projected Debt Service for the three Months starting from that DSRA
Relevant Date and shall notify MCL of the amount (such amount being the
"REQUIRED DSRA BALANCE"). Within three Business Days of receiving that
notice, MCL shall ensure that sufficient moneys are deposited into, and
maintained in, the DSRA so that the DSRA Balance equals or exceeds the
Required DSRA Balance at all times until the next calculation is
notified to it pursuant to this Clause.
23.3 MINIMUM SUBSCRIBERS
MCL shall ensure that, as at each 31 December falling before the Final
Maturity Date for the Equipment Supply Facility, the aggregate number
of its 2G Subscribers and 3G Subscribers is at least *.
23.4 FINANCIAL COVENANT CALCULATIONS
(a) Annualised Cash Flow Available for Debt Service, EBITDA, Excess Cash
Flow, Interest Expense, Net Worth Total Borrowings and Working Capital
shall be calculated and interpreted on a consolidated basis in
accordance with the Applicable Accounting Principles and shall be
expressed in HK Dollars.
(b) Annualised Cash Flow Available for Debt Service, EBITDA, Excess Cash
Flow, Interest Expense, Total Borrowings and Working Capital shall be
determined (except as needed to reflect the terms of this Clause 23)
from the Credit Net Pro Forma Financial Statements, the financial
statements of the MCL Group and the Compliance Certificates, all as
delivered under Clause 22.1 (Annual financial statements) and Clause
22.3 (Compliance Certificate).
(c) For the purpose of this Clause 23, no item shall be included or
excluded more than once in any calculation.
23.5 DIVIDEND PAYMENTS
(a) SUNDAY may declare and pay a dividend in respect of its distributable
profits earned in the previous financial year.
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(b) A member of the MCL Group may pay a dividend to any Credit Net Obligor
which is a member of the MCL Group.
(c) A member of the Group which is not a member of the MCL Group may pay a
dividend to a Credit Net Obligor.
(d) A member of the Group may declare and pay a dividend to SUNDAY in
respect of any distributable profits earned in the previous financial
year on or in respect of any Class of its shares provided that:
(i) no Default has occurred and is continuing at the times when
that dividend is declared and is paid;
(ii) the requirements under Clause 9.8 (Mandatory prepayment of
Excess Cash Flow) have been complied with in respect of the
financial year in respect of which the distribution profits
were earned and that dividends will be paid; and
(iii) the amount of dividends paid in respect of the distributable
profits of a financial year does not exceed the remainder of
the amount representing Excess Cash Flow for that financial
year which was not required to be paid into the Prepayment
Account pursuant to Clause 9.8 (Mandatory prepayment for
Excess Cash Flow).
23.6 FINANCIAL DEFINITIONS
In this Clause 23:
"ANNUALISED CASH FLOW AVAILABLE FOR DEBT SERVICE" means for any
Relevant Period of the Credit Net, the amount equal to:-
(a) Annualised EBITDA for that Relevant Period; plus
(b) to the extent not covered already in paragraph (a) above,
interest income and other coupon payments received during that
Relevant Period in cash in respect of Permitted Investments;
minus
(c) Capital Expenditure for that Relevant Period; minus
(d) Taxes paid in cash by the Credit Net during the Relevant
Period; minus
(e) Any dividends paid by any member of the Credit Net to any
person that is not a Credit Net Member plus (if negative) or
minus (if positive) any difference between Working Capital on
the first day and on the last day of that Relevant Period.
"ANNUALISED EBITDA" means, for any Relevant Period, EBITDA for the
previous four Accounting Quarters or (as applicable) financial year
ending at the end of that Relevant Period.
"CAPITAL EXPENDITURE" means for any period, expenditures made by any
Credit Net Member to acquire (including the aggregate amount of finance
leases incurred during such period) or construct fixed assets, plant
and equipment (including renewals, improvements and replacements, but
excluding repairs) during that period computed in accordance with GAAP;
"DEBT SERVICE" means, for any relevant period, the aggregate of:-
(a) all payments by each Credit Net Member of principal as
Financial Indebtedness;
(b) Interest Expense of each Credit Net Member for that period;
and
(c) all amounts payable by MCL under Hedging Documents during that
period.
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"DSRA RELEVANT DATE" means:
(a) in respect of Projected General Facility Debt Service, each 31
March, 30 June, 30 September and 31 December falling on or
before the Final Maturity Date for the General Facility; and
(b) in respect of Projected Debt Service, each 31 March, 30 June,
30 September and 31 December commencing on 30 September 2007
and falling on or before the Final Maturity Date for the
Equipment Supply Facility.
"EBITDA" means, in relation to any Relevant Period, the total
consolidated net profit of the Credit Net for that Relevant Period:-
(a) before taking into account:-
(i) Interest Expense;
(ii) Tax;
(iii) profits (or losses) attributable to minority
interests in any member of the Credit Net;
(iv) all extraordinary and non-recurring items;
(v) any non-cash charges;
(vi) any gain or loss arising from an upward or downward
revaluation of any asset;
(vii) any gain or loss arising from any disposal of an
asset;
(viii) any unrealised exchange gains or losses including
these arising on translation of currency debt; and
(ix) any share of the profit of any associated company or
undertaking; and
(b) after adding back all amounts provided for depreciation and
amortisation (to the extent already deducted in determining
consolidated operating profit).
"INTEREST EXPENSE" means, in relation to any Relevant Period, the
aggregate amount of interest and any other finance charges (whether or
not paid, payable or capitalised) accrued by the Credit Net in that
Relevant Period in respect of Total Borrowings including:-
(a) the interest element of leasing and hire purchase payments;
(b) costs which have the same economic affect as if they were
interest or are otherwise treated by GAAP as interest;
(c) commitment fees and commissions; and
(d) amounts in the nature of interest payable in respect of any
shares other than equity share capital,
(e) amounts in the nature of interest payable in respect of any
shares other than equity share capital,
adjusted (but without double counting) by:
(i) adding back the net amount payable (or deducting the net
amount receivable) by members of the Credit Net in respect of
that Relevant Period under any interest or (so far as they
relate to interest) currency hedging arrangements; and
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(ii) deducting interest income of the Credit Net in respect of that
Relevant Period to the extent freely distributable to MCL in
cash;
(iii) deducting (to the extent already accounted for) any fee paid
pursuant to Clause 13.2 (Arrangement fees); and
(iv) excluding accrued amounts in the nature of non-cash interest
payable in respect of Subordinated Debt.
as determined (except as needed to reflect the terms of this Clause 23)
from the financial statements of the MCL Group, the Credit Net Pro
Forma Financial Statements and Compliance Certificates delivered under
Clause 22 (Information undertakings).
"NET WORTH" means, as at any particular time, the aggregate of:
(a) the amount paid up or credited as paid up on the issued share
capital of MCL (other than any shares which are expressed to
be redeemable); and
(b) the amount standing to the credit of the consolidated reserves
of the MCL Group,
less (but without double counting) any amount included in the above
which is attributable to:
(i) goodwill or other intangible assets;
(ii) amounts set aside for Tax;
(iii) minority interests;
(iv) the amount by which the net book value of any asset has been
written up after 31 December 2003 (or, in the case of a person
becoming a member of the MCL Group after that date, the date
on which that person became or becomes a member of the MCL
Group) by way of revaluation or on its transfer from one
member of the MCL Group to another; and
(v) any dividend or other distribution declared, recommended or
made by any member of the MCL Group,
but ignoring any variation in the credit or debit balance on the MCL
Group consolidated profit and loss account since the date of the then
latest audited consolidated balance sheet of the MCL Group except to
the extent reflected in any later MCL Group consolidated profit and
loss statement delivered to the Agent under Clause 22 (Information
undertakings).
"PROJECTED DEBT SERVICE" means the aggregate of Debt Service determined
by the Agent to be scheduled to be payable by MCL during the next three
Months following the applicable DSRA Relevant Date in respect of the
Equipment Supply Facility and the Hedging Documents.
"PROJECTED GENERAL FACILITY DEBT SERVICE" means the aggregate of Debt
Service determined by the Agent to be scheduled to be payable by MCL
during the next three Months following the applicable DSRA Relevant
Date in respect of the General Facility and the Hedging Documents (if
any).
"RELEVANT DATE" means the date specified in the relevant table as the
date on (or to) which a particular financial ratio is being tested.
"RELEVANT PERIOD" means each period of four consecutive Accounting
Quarters ending on a Relevant Date.
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"TOTAL BORROWINGS" means, as at any particular time, the aggregate
outstanding principal, capital or nominal amount (and any fixed or
minimum premium payable on prepayment or redemption) of the Financial
Indebtedness of Credit Net Members (other than any Subordinated Debt).
For this purpose, any amount outstanding or repayable in a currency
other than HK Dollars shall on that day be taken into account in their
HK Dollars equivalent at the rate of exchange that would have been used
had an audited consolidated balance sheet of the MCL Group been
prepared as at that day in accordance with the Applicable Accounting
Principles.
"WORKING CAPITAL" means, at any time, the current assets of the Credit
Net being realisable within one year (other than Cash and Permitted
Investments) less current liabilities due within one year (other than
Financial Indebtedness and tax payable or recoverable).
24. GENERAL UNDERTAKINGS
On and from the Effective Date, the undertakings in this Clause 24
shall remain in force for so long as any amount is outstanding under
the Finance Documents or any Commitment is in force and the date on
which they came into force will be treated as the date of this
Agreement except that the undertaking in Clause 24.9(a) (Restrictions
on borrowing) will be treated as having come into force on the date
specified in the Schedule of Intra-Group and External Borrowings.
AUTHORISATIONS AND STATUS UNDERTAKINGS
24.1 AUTHORISATIONS
(a) Each Obligor shall promptly obtain, comply with and do all that is
necessary to maintain in full force and effect (and supply copies to
the Agent of) any Authorisation required under any applicable law or
regulation:-
(i) to enable it to perform its obligations under the Finance
Documents;
(ii) to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation
of any Finance Document; and
(iii) to enable it to carry on its business as it is being conducted
from time to time if failure to obtain, comply with or
maintain any such Authorisation might have a Material Adverse
Effect.
(b) MCL shall ensure that the Perfection Requirements are promptly complied
with.
24.2 COMPLIANCE WITH LAWS AND MATERIAL CONTRACTUAL OBLIGATIONS
Each Obligor shall comply in all respects with all laws to which it may
be subject, if failure to so comply could reasonably be expected to
have a Material Adverse Effect.
24.3 PARI PASSU
Each Obligor shall ensure that its obligations under the Finance
Documents will be secured to the extent of the Security Documents and
shall otherwise rank at all times at least pari passu in right of
priority and payment with the claims of all its other unsecured and
unsubordinated creditors, except for obligations mandatorily preferred
by laws applying to companies generally.
SECURITY AND DISPOSALS UNDERTAKINGS
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24.4 NEW ASSETS WHICH MAY NEED SUPPLEMENTAL SECURITY:
Each Credit Net Obligor shall promptly notify the Agent if it takes out
(or there is taken out on behalf of it to its knowledge) any insurance
(other than director's liability insurance or third party liability
insurance) or its increases its issued share capital or registered
capital or any Cash or Investments are acquired by it or on its behalf
and such insurance, shares, Cash or Investments are not subject to any
Security in favour of the Secured Creditors under a Security Document
and, within 30 Business Days of request by the Agent, execute, to the
extent legally possible, (or, in the case of shares, procure the
execution of) a Security Document (on terms substantially similar to
the appropriate Security Document) or a share charge (on terms
substantially similar to the Share Charge) (as appropriate), subject to
any necessary changes) and deliver such other documentation in form and
substance satisfactory to the Security Trustee (acting reasonably) in
respect of such insurance, shares, Cash or Investments.
24.5 PRC COMPANY
MCL shall procure that the PRC Company:-
(a) will not sell, lease, transfer or otherwise dispose of any
asset whatsoever except:
(A) the sale of stock in the ordinary course of trading;
(B) to a Credit Net Obligor in the circumstances
described in paragraph (b)(v) of Clause 24.7
(Disposals); or
(C) in the circumstances described in paragraphs (b)(ii),
(iv), (vi), (vii) or (viii) of Clause 24.7
(Disposals);
(b) will not create or permit to subsist any Security over any of
its assets except for Permitted Trade Security;
(c) will not incur Financial Indebtedness except for those types
described in paragraphs (b)(iii), (iv), (vi), (viii) (up to an
aggregate outstanding amount which does not exceed * or its
equivalent in another currency or currencies) or (x) of Clause
24.9 (Restrictions on borrowings); and
(d) will not incur any other indebtedness which in aggregate
exceeds * (or its equivalent).
24.6 NEGATIVE PLEDGE
(a) No Credit Net Obligor shall create or permit to subsist any Security
over any of its assets.
(b) SUNDAY shall supply to the Agent (in sufficient copies for all the
Lenders, if the Agent so requests) details of any Security over any of
its assets that it creates or permits to subsist promptly upon such
creation or permission to subsist. Where there are no restrictions on
SUNDAY doing so, it shall supply such details reasonably in advance of
such creation or permission to subsist.
(c) No Credit Net Obligor shall:-
(i) sell, transfer or otherwise dispose of any of its assets on
terms whereby they are or may be leased to or re-acquired by
any other member of the Group;
(ii) sell, transfer or otherwise dispose of any of its receivables
on recourse terms;
(iii) enter any title retention arrangement;
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(iv) enter into any arrangement under which money or the benefit of
a bank or other account may be applied, set-off or made
subject to a combination of accounts; or
(v) enter into any other preferential arrangement having a similar
effect,
in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of financing
the acquisition of an asset.
(d) Paragraphs (a) and (c) above do not apply to:-
(i) Permitted Trade Security;
(ii) any Security entered into pursuant to any Finance Document or
(until the date of the first Utilisation) the Bridging Loan;
and
(iii) contractual rights of set-off entered into in the ordinary
course of business either with trade creditors which are not
financial institutions or with financial institutions in
respect only of those accounts permitted under Clause 24.12
(Bank accounts).
24.7 DISPOSALS
(a) No Credit Net Member shall (and MCL shall ensure that no Credit Net
Member will) enter into a single transaction or a series of
transactions (whether related or not and whether voluntary or
involuntary) to sell, lease, transfer or otherwise dispose of any
asset.
(b) Paragraph (a) above does not apply to any sale, lease, transfer or
other disposal:-
(i) of stock subject only to a floating charge under the Security
Documents and made in the ordinary course of trading of the
disposing entity;
(ii) of cash:-
(A) for the acquisition on arm's length terms of assets
permitted or required under this Agreement; or
(B) for any other purpose not prohibited under this
Agreement;
(iii) of Permitted Investments at arm's length;
(iv) constituting the creation of any Security permitted under
paragraph (d) of Clause 24.6 (Negative pledge);
(v) by a Credit Net Member to the PRC Company or to another Credit
Net Member which creates first ranking security in favour of
only the Secured Creditors over the transferred asset as
security (without limit) for all amounts which may be or
become payable to the Secured Creditors under the Finance
Documents;
(vi) of obsolete or worn-out assets no longer used or useful for
the relevant business provided that the market value or
consideration receivable for those assets does not exceed * in
any financial year of SUNDAY;
(vii) of land, plant or machinery in exchange for or replaced (* of
the sale, lease, transfer or other disposal) by other land,
plant or machinery comparable or superior in type, value and
quality (including the relocation of any office or factory
premises occupied by any member of the Group); or
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(viii) not referred to in paragraphs (i) to (vii), in any financial
year where the higher of the market value or consideration
receivable (when aggregated with the higher of the market
value or consideration received or receivable for any other
sale, lease, transfer or other disposal not referred to in
paragraphs (i) to (vii) above in any financial year of SUNDAY)
does not exceed * (or its equivalent in another currency or
currencies) in any financial year of SUNDAY or in excess of
that amount to the extent that the Disposal Proceeds of the
sale, lease, transfer or other disposal are paid into the
Prepayment Account for application in accordance with Clauses
9.5 (Mandatory prepayment from Disposal Proceeds) and 9.9
(Prepayment Account).
24.8 RESTRICTIVE AGREEMENTS, NEGATIVE PLEDGES
No Credit Net Obligor shall enter into (or permit to exist) any
agreement or arrangement (other than the Finance Documents and the
documentation in respect of the Bridging Loan) prohibiting or
restricting:-
(a) the creation or existence of any Security on any of the assets
of any Obligor except:-
(i) assets subject to Permitted Trade Security;
(ii) Excepted Assets; and
(iii) any other assets having a fair market value of an
aggregate value of not more than *
(b) the ability of any Credit Net Obligor to make any payments,
directly or indirectly, to another Obligor (whether by way of
dividends, advances, repayments of or payments of interest on
advances, reimbursement of management and other intercompany
charges, expenses, accruals or other returns on investments,
or otherwise).
FINANCING ARRANGEMENT UNDERTAKINGS
24.9 RESTRICTIONS ON BORROWINGS
(a) No Credit Net Obligor shall (and MCL shall ensure that no other Credit
Net Member will) incur (or agree to incur) or have outstanding any
Financial Indebtedness.
(b) SUNDAY shall supply to the Agent (in sufficient copies for all the
Lenders, if the Agent so requests) details of any Financial
Indebtedness that it incurs, agrees to incur or has outstanding
promptly upon such Financial Indebtedness being incurred, agreed to be
incurred or becoming outstanding. Where there are no restrictions on
SUNDAY doing so, it shall supply such details reasonably in advance of
such Financial Indebtedness being incurred, agreed to be incurred or
becoming outstanding.
(c) Paragraph (a) above does not apply to:-
(i) Financial Indebtedness under the Finance Documents or the
Bridging Loan;
(ii) Subordinated Debt;
(iii) credit not exceeding 180 days for goods and services, whether
in the ordinary course of trade of the relevant Credit Net
Member or by way of acquisition of capital equipment;
(iv) Financial Indebtedness permitted by paragraphs (b)(ii), (iii)
and (iv) of Clause 24.10 (Loans and Guarantees);
(v) Financial Indebtedness within the meaning of paragraph (g) of
the definition of that term;
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(vi) guarantees provided to public utilities in Hong Kong or the
PRC in the ordinary course of business;
(vii) Financial Indebtedness incurred in the ordinary course of
business and on normal commercial terms and not falling within
paragraphs (i) to (vi) above, the aggregate outstanding
principal amount of which does not exceed * (or its equivalent
in another currency or currencies);
(viii) Financial Indebtedness under lease and hire purchase
arrangements relating to the supply of office equipment for an
outstanding amount of up to *;
(ix) Financial Indebtedness of up to * in respect of the Permitted
DCs;
(x) Financial Indebtedness incurred solely to fund Capital
Expenditure of the Credit Net in the maximum aggregate amounts
for each year, and incurred by the relevant Credit Net
Members, set out in the Business Plan;
(xi) Financial Indebtedness which is credited, simultaneously with
being incurred, to the Prepayment Account, to pay repay or
prepay all the amounts outstanding under this Agreement under
Clause 9.3 (Mandatory prepayment from New Borrowings
Proceeds); and
(xii) with the prior written consent of the Majority Lenders,
Financial Indebtedness incurred in relation to qualified
technological equipment leases that are structured to obtain
for MCL a cash benefit subject to such terms and conditions as
the Majority Lenders may think fit and provided that no such
qualified technological equipment lease shall prejudice the
interests of the Finance Parties under the Finance Documents.
(d) MCL shall, at least * Business Days before any member of the MCL Group
or Credit Net Obligor incurs any Subordinated Debt, obtain approval
from the Agent for the form of Subordinated Loan Agreement that will
evidence that Subordinated Debt. The Agent may not disapprove that form
(and shall be deemed to have approved that form) unless the Agent
(acting reasonably) determines, within * Business Days of any request,
that the form of Subordinated Loan Agreement:-
(i) is not governed by Hong Kong law;
(ii) is not expressly subject to the terms of the Subordination
Deed; or
(iii) has any terms which could materially adversely affect the
rights of the Finance Parties or contravene any terms of the
Finance Documents.
The Agent will promptly notify the Lenders of any determinations under
this paragraph.
(e) MCL shall ensure that any Subordinated Loan Agreement shall not be
amended or modified except with the consent of the Agent.
24.10 LOANS AND GUARANTEES
(a) No Credit Net Obligor shall (and MCL shall ensure that no other Credit
Net Member will):-
(i) make any loan, or provide any form of credit or financial
accommodation, to any other person; or
(ii) give or issue any guarantee, indemnity, bond or letter of
credit to or for the benefit of any person or voluntarily
assume any liability (whether actual or contingent) of any
other person.
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(b) Paragraph (a) above does not apply to:-
(i) loans, guarantees, indemnities, bonds and letters of credit
under or expressly contemplated by the Finance Documents or
the Bridging Loan;
(ii) unsecured loans made by a Credit Net Member to another Credit
Net Obligor to fund its working capital requirements or its
obligations under the Finance Documents;
(iii) guarantees, indemnities, bonds and letters of credit given or
issued by a Credit Net Member in respect of liabilities or
obligations of Credit Net Obligors, but not to or for the
benefit of a Restricted Person; or
(iv) trade credit, guarantees, indemnities, bonds and letters of
credit granted, given or issued in the ordinary course of
trading of the relevant Credit Net Member, not in respect of
Financial Indebtedness and on normal commercial terms for a
term not longer than 180 days, but if to or for the benefit of
a Restricted Person up to an aggregate amount which does not
exceed *.
24.11 HEDGING
(a) MCL shall ensure that the hedging required by the Hedging Policy is
effected in accordance with the terms of the Hedging Policy.
(b) At or before the time that MCL enters into any Hedging Document with a
Hedging Bank, MCL shall ensure that the counterparty accedes as a
Hedging Bank to the Intercreditor Agreement.
(c) No Credit Net Obligor shall (and MCL shall ensure that no other Credit
Net Member will) enter (or agree to enter) into any derivative
transaction other than the hedging transactions required by the Policy.
24.12 BANK ACCOUNTS
(a) Each Credit Net Obligor shall (and MCL shall ensure that each other
Credit Net Member will) not open or maintain any account with any bank
or other financial institution except for:-
(i) the Permitted External Bank Accounts;
(ii) the accounts referred to in paragraphs (a) to (e) of the
definition of "Secured Accounts";
(iii) accounts ("PERMITTED BANK ACCOUNTS") opened with the Agent,
the Security Trustee or any Lender (on terms which do not
conflict with each Finance Party's right of set-off under
Clause 32 (Set-off));
(iv) accounts opened to place deposits with the Agent, the Security
Trustee, a Lender or other bank or financial institution in
respect of Permitted DCs; and
(v) such other bank accounts as may be agreed by the Agent (acting
reasonably) from time to time.
(b) Each Credit Net Obligor shall (and MCL shall ensure that each other
Credit Net Member will) pay all sums received by it into a bank account
complying with paragraph (a) above.
24.13 ACQUISITIONS AND INVESTMENTS
(a) No Credit Net Obligor shall (and MCL shall ensure that no other Credit
Net Member will):-
(i) invest in or acquire any share in or any security issued by
any person, or any interest therein or in the capital of any
person, or make any capital contribution to any person;
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(ii) invest in or acquire any business or going concern, or the
whole or substantially the whole of the assets, property or
business of any person or any assets that constitute a
division or operating unit of the business of any person.
(b) No Credit Net Obligor shall (and MCL shall ensure that no other Credit
Net Member will) enter into any joint venture, consortium, partnership
or similar arrangement with any person, except for investments up to an
aggregate amount of * in any financial year.
(c) Paragraph (a) above does not apply to:-
(i) the Supply Contract;
(ii) the acquisition of assets by a member of the MCL Group in the
ordinary course of its trading;
(iii) the investment by a member of the MCL Group of surplus cash in
Permitted Investments belonging to that member of the Group;
(iv) Capital Expenditure of the Credit Net permitted within the
annual allowances, and in respect of the relevant Credit Net
Members, set out in the Business Plan where the assets are
purchased by Credit Net Obligors which are members of the MCL
Group; or
(v) investments by MCL in any existing or new wholly owned
Subsidiary of MCL up to an aggregate amount of * in any
financial year.
(d) No Credit Net Obligor shall make or permit to remain outstanding any
Investment except for Permitted Investments or as provided in paragraph
(c) above.
24.14 BUSINESS LINES AND CHANGE OF BUSINESS
(a) SUNDAY and MCL shall ensure that no change is made to the general
nature of the business of SUNDAY or MCL or the MCL Group taken as a
whole from that carried on at the date of this Agreement.
(b) SUNDAY and MCL shall ensure that each member of the MCL Group which has
a type or types of business set out beside its name in Schedule 1
(Members of the Group) will not engage in any business except:-
(i) for that/those businesses; or
(ii) with the consent of the Majority Lenders (not to be
unreasonably withheld or delayed).
24.15 MERGER
No Obligor shall enter into any amalgamation, demerger, merger,
consolidation or corporate reconstruction (other than a solvent
reconstruction not involving a change of control).
24.16 PKI HOLDINGS
MCL shall procure that PKI Holdings shall distribute to MCL any amounts
it may receive *
RING-FENCING UNDERTAKINGS
24.17 ISSUE OF SHARES
(a) No Credit Net Obligor shall (and MCL shall ensure that no other Credit
Net Member will):-
(i) issue any share capital to any person; or
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(ii) grant to any person the right (whether conditional or
otherwise) to call for the issue or transfer of any share,
loan note or loan capital of any Credit Net Member (including
any option or right of pre-emption or conversion) or any other
equity investment, or alter any right attaching to any issued
share of any Credit Net Member.
(b) Paragraph (a) above does not apply to subject to Clause 24.18
(Restricted payments), the issue of shares by a Credit Net Member to
any Credit Net Obligor (provided that the new shares are subject to the
same security, if any, under the Security Documents as the shares
already in issue).
24.18 RESTRICTED PAYMENTS
(a) No Credit Net Obligor shall (and MCL shall ensure that no other Credit
Net Member will):-
(i) pay, repay or prepay any principal, interest or other amount
on or in respect of, or redeem, purchase or defease any
Subordinated Debt;
(ii) declare, pay or make any dividend or other payment or
distribution of any kind on or in respect of any Class of its
shares or in respect of Equity Rights except for dividends
permitted under Clause 23.5 (Dividend payments);
(iii) reduce, retire, return, purchase, acquire, repay, cancel or
redeem any of its share capital (or Equity Rights relating to
that share capital) or make any payment (whether in cash,
securities or other assets and including payments into a
sinking fund or similar deposit) on account of any of these or
enter into any other arrangement intended to have a materially
similar effect or in respect of Equity Rights except for
dividends permitted under Clause 23.5 (Dividend payments);
(iv) pay, repay or prepay any principal, interest or other amount
on or in respect of redeem, purchase or defease any Financial
Indebtedness owing to any Restricted Person;
(v) make any investment in any Restricted Person;
(vi) pay any fee or make any advance or other kind of payment to,
any Restricted Person (other than fees payable to Restricted
Persons in the ordinary course of trading and on normal
commercial terms in connection with the type of Financial
Indebtedness permitted by paragraph (b)(iv) of Clause 24.10
(Loans and Guarantees) in an aggregate amount not exceeding *
per annum); or
(vii) pay any fee or commission to any other person other than on
arm's length terms to third parties for service or advice
provided to the relevant member of the Group in the ordinary
course of its business.
(b) Paragraph (a) does not apply to:
(i) any such payment, repayment, prepayment or other activity
prohibited under paragraph (a) to or in respect of any member
of the MCL Group to fund its obligations under the Finance
Documents; or
(ii) the following payments provided that no Default has occurred
and is continuing at the time of the proposed payment or would
occur as a result of the proposed payment:
(A) MCL may advance to SUNDAY for the purpose of funding
SUNDAY's operating expenses interest free loans not
exceeding in aggregate * in any financial year;
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(B) MCL may pay to SUNDAY Shenzhen and SUNDAY Shenzhen
may receive and retain management fees in an
aggregate amount not exceeding * of the operating
expenses incurred by SUNDAY Shenzhen in any financial
year in accordance with the Business Plan; and
(C) MCL may pay to SUNDAY 3G and SUNDAY 3G may receive
and retain management fees in an amount sufficient to
cover SUNDAY 3G's operating expenses as contemplated
by the Business Plan.
24.19 ARM'S LENGTH TERMS
No Credit Net Obligor shall enter into any contract or arrangement with
or for the benefit of any other person (including any disposal to that
person) other than with another Obligor or in the ordinary course of
business and on arm's length terms.
CORPORATE HOUSEKEEPING UNDERTAKINGS
24.20 ASSETS
Each Credit Net Obligor shall maintain all its assets reasonably
necessary for the conduct of its business as conducted from time to
time in good working order and condition, ordinary wear and tear
excepted.
24.21 INSURANCE
(a) MCL shall:-
(i) maintain insurance on all property and assets of the Credit
Net of an insurable nature against loss or damage by fire and
other risks normally insured against by persons carrying on a
similar business in a sum or sums at least equal to their
replacement value (meaning the total cost of entirely
rebuilding, reinstating or replacing such property and assets
if completely destroyed together with architects', surveyors'
and other professional fees); and
(ii) maintain insurance against business interruption, loss of
profits, product liability, director's liability, employer's
liability, sudden and accidental pollution and third party
liability at levels no lower than those in place prior to the
date of this Agreement, increasing or decreasing consistently
with increasing or decreasing business levels.
(b) MCL shall promptly pay premiums and do all things necessary to maintain
insurances required of it by paragraph (a) above.
(c) MCL shall:-
(i) promptly supply to the Agent on request copies of each
insurance policy required by this Clause;
(ii) instruct the insurer under each such policy to undertake to
the Security Trustee to notify the Security Trustee should any
renewal, premium or other sum payable by any member of the
Group not be paid when due and, if requested, confirm that
such policies are in place;
(iii) immediately notify the Agent of any fact, act or omission
which has caused or may cause it to be in breach of any
provision of this Clause and of any purported or threatened
avoidance of any insurance policy required by this Clause;
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(iv) promptly notify the Agent of any claim or notification under
any of its insurance policies which is for, or might result in
a claim under that policy for, at least HK$500,000 (or its
equivalent in another currency or currencies); and
(v) ensure that each insurer has been issued with a notice, and
use reasonable endeavours to ensure that such insurer has
signed an acknowledgement, substantially in the form set out
in a schedule titled "Form of notice of assignment and
acknowledgement in relation to insurances" of the Hong Kong
General Security Document.
(d) MCL shall use reasonable endeavours to procure that each insurance
policy required by this Clause:-
(i) notes the Security Trustee's interest therein;
(ii) names the Security Trustee as loss payee (except to the extent
that sums are payable directly to third parties under third
party insurance); and
(iii) contains a severability of interest clause which shall cause
the policy to operate in the same manner as if there were a
separate policy available to and covering each named insured
party.
(e) If MCL fails to purchase or maintain any insurance required by this
Clause, the Agent or the Security Trustee (acting reasonably) may
purchase such insurance as may reasonably be necessary to remedy any
such failure and MCL shall indemnify the Agent or, as the case may be,
the Security Trustee on demand against any costs or expenses reasonably
incurred by it in purchasing any such insurance.
(f) MCL will not:-
(i) do or omit to do anything which might render any insurance
required by this Clause void, voidable or unenforceable;
(ii) effect or require any other person to effect any additional
insurance if that additional insurance could reduce the amount
payable under any insurance required by this Clause;
(iii) make or agree to any material adverse amendment to the terms
of insurance required by this Clause without the prior consent
of the Security Trustee (not to be unreasonably withheld or
delayed); or
(iv) waive, release, settle, compromise or abandon any claim under
any insurance required by this Clause or do anything else in
respect of any of those insurances which may reduce the amount
of likely recovery under that insurance.
24.22 ENVIRONMENTAL UNDERTAKINGS
Each Credit Net Obligor shall (and MCL shall ensure that each other
Credit Net Obligor will):-
(a) comply with all Environmental Laws to which it may be subject;
(b) obtain all Environmental Licences required in connection with
its business; and
(c) comply with the terms of all those Environmental Licences,
in each case where failure to do so might have a Material Adverse
Effect.
24.23 ENVIRONMENTAL CLAIMS
Each Credit Net Obligor shall (and MCL shall ensure that each other
Credit Net Obligor will) promptly notify the Agent of any claim, notice
or other communication received by it in respect of any actual or
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alleged breach of or liability under Environmental Law which, if
substantiated, might have a Material Adverse Effect.
24.24 INTELLECTUAL PROPERTY
Each Credit Net Obligor shall:-
(a) take all reasonably necessary action to obtain, safeguard and
maintain all Material Intellectual Property and not
discontinue the use of any such Material Intellectual
Property, including:-
(i) paying all applicable renewal fees, licence fees and
other outgoings; and
(ii) performing and complying with all laws and
obligations to which it is subject as registered
proprietor, beneficial owner, user, licensor or
licensee of any such Material Intellectual Property;
and
(b) notify the Agent promptly of any infringement or suspected
infringement of or any challenge to the validity of any
Material Intellectual Property owned by or licensed to it
which may come to its notice and supply the Agent with all
information in its possession relating thereto and take all
reasonable and necessary steps (including the institution of
legal proceedings) to prevent third parties infringing any
such Material Intellectual Property.
24.25 AMENDMENT OF CONSTITUTIONAL DOCUMENTS
No Credit Net Obligor shall, without prior approval from the Agent (not
to be unreasonably withheld or delayed except that the Agent shall have
an absolute right to withhold approval in the case of any amendments
affecting the rights attaching to the Deferred Shares), amend,
terminate or give any waiver or consent under any of its constitutional
documents which might be material to the interests of the Finance
Parties under the Finance Documents.
24.26 INDEPENDENT OBLIGATIONS
Subject to Clause 25.21 (Default by Supplier under Supply Contract),
each Obligor shall perform its obligations under the Finance Documents
notwithstanding any failure by the Supplier to fulfil its obligations
under the Supply Contract or otherwise and no Obligor shall use any
such failure as an excuse, defence, set-off or counterclaim in respect
of its obligations under the Finance Documents.
NETWORK AND MATERIAL AGREEMENTS
24.27 NETWORK
MCL will procure that the 3G Network is designed, constructed,
completed, operated and run in a safe, efficient and business-like
manner in accordance with:
(a) the requirements of the 3G Licence and any Authorisation from
time to time; and
(b) Good Industry Practice.
24.28 MATERIAL AGREEMENTS
MCL shall (and shall ensure that each Obligor will):
(a) not at any time:
(i) terminate, rescind or discharge (except by
performance) unless a replacement licence or
agreement is entered into on terms in aggregate that
are no less favourable to it;
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(ii) agree to, or acquiesce in, any variation, amendment
or waiver of any material provision of or grant any
time or indulgence in respect of any term of;
(iii) do or omit to do anything which may derogate from or
adversely affect the terms, operation or application
of, or jeopardise its rights under; or
(iv) do or omit to do anything which may give any other
party legal or equitable grounds to do anything in
paragraphs (i) to (iii) in respect of,
the Supply Contract (provided that MCL shall be entitled to
agree any amendments to the Supply Contract in accordance with
its terms without obtaining the consent of the Agent) or any
Licence without prior written consent of the Agent or any
other Material Agreement where to do so might have a Material
Adverse Effect;
(b) comply in all material respects with the terms of the Material
Agreements;
(c) make all payments required to be made by it under the Supply
Contract at the times (or within any applicable grace period)
and in the manner required thereunder;
(d) maintain and exercise and enforce all of the material rights
and remedies available to it under the Material Agreements in
a timely manner and with regard to its ability to comply with
its obligations under this Agreement;
(e) (i) notify the Agent of any event of force majeure
(howsoever described) under the Material Agreements,
(ii) copy to the Agent any notice it serves or receives in
relation to any such force majeure event;
(iii) to the extent possible inform the Agent of the
anticipated length of such event of force majeure and
any costs anticipated to be incurred by virtue of the
occurrence of such event of force majeure and
(iv) notify the Agent of the date on which such event of
force majeure ceases to exist;
(f) promptly notify the Agent upon becoming aware of:
(i) any breach of or default in any material respect
under any Material Agreement by any party;
(ii) any material dispute between the parties to a
Material Agreement; and
(iii) any notice of, or other act of, revocation,
suspension, withdrawal, cancellation or termination
of any material provision of any Material Agreement
or other pending or threatened proceedings;
(g) obtain and keep in full force and effect and comply with all
Authorisations required to ensure the validity and
enforceability of the Material Agreements;
(h) not at any time agree to or acquiesce in any assignment or
transfer of rights and/or obligations by any counterparty to a
Material Agreements where MCL or the relevant member of the
MCL Group has a right to object.
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24.29 PNETS LICENCES, INTERCONNECTION AGREEMENTS AND ROAMING AGREEMENTS
MCL shall (and shall ensure that each Obligor will) maintain in effect
and comply in all material respects with such:
(a) PNETS (Public Non-Exclusive Telecommunication Services)
licence(s) issued by OFTA pursuant to the Telecommunications
Ordinances;
(b) interconnection agreement(s) and PCN provisioning agreement(s)
with PCCW-HKT Telephone Limited (formerly known as Hong Kong
Telephone Company Limited) or other providers of fixed line
telecommunications interconnections in Hong Kong; and
(c) international roaming agreements with suitable counterparties,
in each case that are required by MCL or the relevant Obligor to
operate or conduct its business in the manner which it is currently
operated or conducted and in accordance with Good Industry Practice.
TAX UNDERTAKINGS
24.30 TAXES
(a) Each Obligor shall pay all Taxes required to be paid by it when due
(or, if earlier, before any penalties are imposed or any Security could
be imposed ranking in priority to the claims of any Finance Party or to
any Security created pursuant to the Security Documents).
(b) Paragraph (a) above does not apply to any Taxes:-
(i) being contested by the relevant Obligor in good faith and in
accordance with the relevant procedures;
(ii) which have been adequately disclosed in the financial
statements, and for which adequate provisions are being made
in accordance with GAAP;
(iii) where payment can be lawfully withheld; and
(iv) if a failure to pay those Taxes while they are being contested
could not reasonably be expected to result in a Material
Adverse Effect.
25. EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 25 is an
Event of Default.
25.1 NON-PAYMENT
An Obligor does not pay on the due date any amount pursuant to a
Finance Document at the place at and in the currency in which it is
expressed to be payable unless:-
(a) its failure to pay is caused by administrative or technical
error; and
(b) payment is made within three Business Days of its due date.
25.2 FINANCIAL COVENANTS
(a) Any requirement of Clause 23 (Financial covenants) is not satisfied.
(b) Notwithstanding paragraph (a) above, failure to satisfy the
requirements of Clause 23 shall not constitute an Event of Default if
MCL successfully remedies the relevant breach within 2 calendar months
of it occurring. MCL shall be entitled to remedy any such breaches not
more than twice in any twelve month
87
period based on its financial year and not more than 4 times in total
during the period that any indebtedness is outstanding under this
Agreement.
25.3 OTHER OBLIGATIONS
(a) Any provision of Clause 3.1 (Purpose) or Clause 22.7 (Notification of
Default) is not complied with.
(b) Any provision of the Finance Documents (other than those referred to in
Clause 25.1 (Non-payment), Clause 25.2(Financial covenants) or
paragraph (a) of this Clause 25.3) is not complied with by any Obligor
and, if the failure to comply is capable of remedy, it is not remedied
within 20 Business Days of the Agent giving notice to MCL or MCL
becoming aware of the failure to comply (whichever is earlier).
25.4 MISREPRESENTATION
(a) Any representation or statement made or deemed to be made by any
Obligor in the Finance Documents or any other document delivered by or
on behalf of any Obligor under or in connection with any Finance
Document is or proves to have been materially incorrect or misleading
in any material respect when made or deemed to be made.
(b) No Event of Default will occur under this Clause 25.4 if in the opinion
of the Agent (acting reasonably) the circumstance which was
misrepresented is capable of being remedied and is remedied within 20
Business Days of the Agent giving notice to MCL, or of MCL becoming
aware, of that breach (whichever is earlier).
25.5 CROSS DEFAULT
(a) Any Financial Indebtedness of any Obligor is not paid when due nor
within any originally applicable grace period.
(b) Any Financial Indebtedness of any Obligor 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).
(c) Any commitment for any Financial Indebtedness of any Obligor is
cancelled or suspended by a creditor of that Obligor as a result of an
event of default (however described).
(d) Any creditor of any Obligor becomes entitled to declare any Financial
Indebtedness of that Obligor due and payable prior to its specified
maturity as a result of an event of default or review event (however
described).
(e) No Event of Default will occur under this Clause 25.5 if the aggregate
amount of Financial Indebtedness falling within paragraphs (a) to (c)
above is less than (in respect of SUNDAY) * or (in respect of any other
Obligor) * (or its equivalent in any other currency or currencies).
25.6 INSOLVENCY
(a) An Obligor is or is presumed or deemed to be unable or admits inability
to pay its debts as they fall due, suspends, or threatens to suspend,
making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or
more of its creditors with a view to rescheduling any of its
indebtedness.
(b) The value of the assets of any Obligor is less than its liabilities
(taking into account contingent and prospective liabilities).
(c) A moratorium is declared in respect of any indebtedness of any Obligor.
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25.7 INSOLVENCY PROCEEDINGS
(a) Any corporate action, legal proceedings or other procedure or step is
taken in relation to:-
(i) the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration, provisional
supervision, supervision or reorganisation (by way of
voluntary arrangement, scheme of arrangement or otherwise) of
any Obligor;
(ii) a composition, assignment or arrangement with any creditor of
any Obligor;
(iii) the appointment of a liquidator, receiver, administrator,
administrative receiver, compulsory manager, provisional
supervisor, supervisor or other similar officer in respect of
any Obligor or any of its assets; or
(iv) the enforcement of any Security over any material part of the
assets of any Obligor,
or any analogous procedure or step is taken in any jurisdiction.
(b) Notwithstanding paragraph (a) above, if within 20 Business Days after
the relevant petition is presented or step taken:
(i) MCL demonstrates to the satisfaction of the Agent, acting
reasonably that:
(A) any petition or other step for the winding up,
liquidation, receivership, administration or
supervision of the relevant Obligor is frivolous or
vexatious or an abuse of process and is being
actively contested in good faith; and
(B) MCL has sufficient funds available to discharge all
such indebtedness; or
(ii) the petition is dismissed,
then the presentation of such a petition or taking of such a step shall
not constitute an Event of Default.
25.8 CREDITORS' PROCESS
Any expropriation, attachment, sequestration, distress or execution
affects any asset or assets of an Obligor having an aggregate value (in
the case of SUNDAY) of * or more or its equivalent or (in the case of
any other Obligor) of * or more (or its equivalent) and is not
discharged within * Business Days.
25.9 OWNERSHIP
(a) MCL ceases to control and own legally and beneficially (directly or
indirectly) 100 per cent. of the shares in:
(i) SUNDAY 3G Holdings;
(ii) SUNDAY 3G.
(b) SUNDAY ceases control and to own legally and beneficially (directly or
indirectly) 100 per cent. of the shares in:
(i) SUNDAY Holdings;
(ii) MCL (except for the shares of the Deferred Shareholders and
the share held by SUNDAY Hong Kong);
(iii) SUNDAY China Holdings;
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(iv) SUNDAY Shenzhen;
(v) SUNDAY IP Holdings;
(vi) SUNDAY IP.
(c) any two or more of Xxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxx and
Xxxxxx Xxxxx cease to be a director and to be involved in the
management of SUNDAY other than by reason of death, disability, removal
by shareholders or dismissal for cause.
25.10 UNLAWFULNESS
(a) It is or becomes unlawful for any Obligor to perform any of its payment
obligations, or any other material obligations, under the Finance
Documents unless the Agent, acting reasonably, is satisfied those
obligations can be assumed within 20 Business Days by another Obligor
without there being a Material Adverse Effect.
(b) It becomes unlawful for any party to perform any of its material
obligations under any Material Agreement in a manner or to an extent
that could reasonably be expected to have a Material Adverse Effect.
25.11 REPUDIATION
An Obligor repudiates a Finance Document or evidences an intention to
repudiate a Finance Document.
25.12 SECURITY AND GUARANTEES
Any Expanded Security Document or any guarantee or indemnity in or any
subordination effected under any Finance Document is not in full force
and effect or any Security Document does not create in favour of the
Security Trustee for the benefit of the Secured Creditors the Security
which it is expressed to create fully perfected and with the ranking
and priority it is expressed to have except only to the extent that
Perfection Requirements have not been completed or to the extent of
Excepted Assets provided that such non-completion or the existence of
that Excepted Asset is not an Event of Default under other provisions
of this Agreement and except to the extent that (a) Security expressed
as fixed takes effect as floating only or (b) Security of an expressed
type takes effect over assets located outside Hong Kong as a different
type of Security under the law of the relevant other jurisdiction or
(c) a new agreement or Security is entered into having substantially
the same effect as the relevant Expanded Security Document, guarantee,
indemnity, subordination or Security Documents within 30 Business Days.
25.13 CARRY ON BUSINESS
Any Obligor suspends or ceases (or threatens to suspend or cease) to
carry on all or a material part of its business carried on as at the
date of this Agreement other than:-
(a) solely as a result of a disposal or as otherwise permitted by
this Agreement; or
(b) where SUNDAY demonstrates that a suspension or cessation does
not materially adversely affect the business of the MCL Group
taken as a whole or MCL's ability to pay and repay the Secured
Obligations.
25.14 AUTHORISATIONS
Any Authorisation is amended, suspended, not renewed or revoked or
becomes invalid, unless MCL demonstrates to the satisfaction of the
Agent acting reasonably that either:
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(a) the amendment, suspension, non-renewal or revocation is being
actively contested and the outcome of such contest is
determined favourably to it within 20 Business Days from the
Agent giving notice to MCL or such longer period as may be
agreed by the Agent; or
(b) the amendment, suspension, non-renewal or revocation or
invalidity would be unlikely to have a Material Adverse
Effect.
25.15 NATIONALISATION
Any step is taken by any person with a view to the seizure, compulsory
acquisition, expropriation or nationalisation of any or all of the
assets, shares or revenues of any Obligor and such seizure(s),
compulsory acquisition(s), expropriation(s) and/or nationalisation(s),
either alone or taken together, has or might have a Material Adverse
Effect.
25.16 LITIGATION
Any litigation, arbitration, proceedings or disputes are commenced or
threatened by or against any member of the Group or its respective
assets or there are any circumstances reasonably likely to give rise to
any such action or proceedings, in each case which are reasonably
likely to be adversely determined against that Obligor and, if so
determined, would have a Material Adverse Effect.
25.17 SUSPENSION OR CESSATION OF LISTING SUNDAY's share listing on any Stock
Exchange:-
(a) is suspended for 15 or more consecutive days on which it is
trading ("TRADING DAYS"); or
(b) is terminated or otherwise ceases,
and MCL cannot demonstrate to the Agent within 15 trading days that the
suspension, termination or cessation does not result from circumstances
which could, in the Agent's opinion, acting reasonably, have a Material
Adverse Effect.
25.18 MATERIAL AGREEMENTS
(a) Any Credit Net Obligor does not comply with any provision of,
or is otherwise in default or breach of a Material Agreement,
in a manner or to an extent that the Agent reasonably
considers could have a Material Adverse Effect;
(b) any obligation expressed to be assumed by a Credit Net Obligor
under a Material Agreement is not or ceases (other than as a
result of performance in full thereof) to be a valid and
binding obligation of, or is repudiated by such party or is or
becomes void, voidable or unenforceable in a manner or to an
extent that the Agent reasonably considers could have a
Material Adverse Effect;
(c) any Material Agreement is varied, amended or waived in a
manner or to an extent that the Agent reasonably considers
could have a Material Adverse Effect;
(d) any Material Agreement is terminated, cancelled or suspended
in a manner or to an extent that the Agent reasonably
considers could have a Material Adverse Effect; or
(e) any assignment or transfer of rights and/or obligations by any
counterparty to a Material Agreement is made where MCL or the
relevant Obligor has a right to object.
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25.19 MATERIAL ADVERSE CHANGE
Any event or series of events occurs which, in the opinion of the
Agent, acting reasonably, could have a Material Adverse Effect.
25.20 ACCELERATION
At any time while an Event of Default is continuing the Agent may, and
shall if so directed by the Majority Lenders, by notice to MCL:-
(a) cancel the Total Commitments whereupon they shall immediately
be cancelled;
(b) declare that all or part of the Utilisations, 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;
(c) declare that all or part of the Utilisations be payable or
repayable on demand, whereupon they shall immediately become
payable or repayable on demand by the Agent on the
instructions of the Majority Lenders;
(d) require MCL to repay any Performance Bond whereupon it shall
become immediately due and payable; and/or
(e) declare that all or any of the rights of the Finance Parties
under the Security Documents may be exercised.
25.21 DEFAULT BY SUPPLIER UNDER SUPPLY CONTRACT
For the avoidance of doubt, if the Supplier defaults or is otherwise in
breach of its obligations under the Supply Contract, the same shall not
constitute an Event of Default, whether or not such default or breach
results in termination of the Supply Contract, nor shall it constitute
a breach of any undertaking under Clause 24.28 (Material Agreements).
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SECTION 11
CHANGES TO PARTIES
26. CHANGES TO THE LENDERS
26.1 ASSIGNMENTS AND TRANSFERS BY THE LENDERS
(a) Subject to this Clause 26, a Lender (the "EXISTING LENDER") may:-
(i) assign any of its rights; or
(ii) transfer by novation any of its rights and obligations,
to an Eligible Transferee which is regularly engaged in or established
for the purpose of making, purchasing or investing in loans, securities
or other financial assets (the "NEW LENDER").
(b) "ELIGIBLE TRANSFEREE" means any person or persons which is or are from
time to time approved for such purposes by MCL in writing.
26.2 CONDITIONS OF ASSIGNMENT OR TRANSFER
(a) The consent of the Obligors is not required for an assignment or
transfer to an Eligible Transferee by a Lender.
(b) An assignment will only be effective on receipt by the Agent of written
confirmation from the New Lender (in form and substance satisfactory to
the Agent) that the New Lender will assume the same obligations to the
other Finance Parties as it would have been under if it was an Original
Lender.
(c) A transfer will only be effective if the procedure set out in Clause
26.5 (Procedure for transfer) is complied with.
(d) If:-
(i) a Lender assigns or transfers any of its rights or obligations
under the Expanded Finance Documents or changes its Facility
Office; and
(ii) as a result of circumstances existing at the date the
assignment, transfer or change occurs, an Obligor would be
obliged to make a payment to the New Lender or Lender acting
through its new Facility Office under Clause 14 (Tax gross up
and indemnities) or Clause 15 (Increased Costs),
then the New Lender or Lender acting through its new Facility Office is
only entitled to receive payment under those Clauses to the same extent
as the Existing Lender or Lender acting through its previous Facility
Office would have been if the assignment, transfer or change had not
occurred.
(e) An assignment or transfer will only be effective if the Existing Lender
and the New Lender transfer all the rights and obligations under all
the Expanded Finance Documents which relate (or relate proportionately)
to the Commitment or Loans being transferred or assigned.
26.3 ASSIGNMENT OR TRANSFER FEE
The New Lender shall, on the date upon which an assignment or transfer
takes effect, pay to the Agent (for its own account) a fee of US$1,000.
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26.4 LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
(a) Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New
Lender for:-
(i) the legality, validity, effectiveness, adequacy or
enforceability of the Finance Documents or any other
documents;
(ii) the financial condition of any Obligor;
(iii) the performance and observance by any Obligor of its
obligations under the Finance Documents or any other
documents; or
(iv) the accuracy of any statements (whether written or oral) made
in or in connection with any Finance Document or any other
document,
and any representations or warranties implied by law are excluded.
(b) Each New Lender confirms to the Existing Lender and the other Finance
Parties that it:-
(i) has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in connection
with its participation in this Agreement and has not relied
exclusively on any information provided to it by the Existing
Lender in connection with any Expanded Finance Document; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities
whilst any amount is or may be outstanding under the Expanded
Finance Documents or any Commitment is in force.
(c) Nothing in any Expanded Finance Document obliges an Existing Lender
to:-
(i) accept a re-transfer from a New Lender of any of the rights
and obligations assigned or transferred under this Clause 26;
or
(ii) support any losses directly or indirectly incurred by the New
Lender by reason of the non-performance by any Obligor of its
obligations under the Expanded Finance Documents or otherwise.
26.5 PROCEDURE FOR TRANSFER
(a) Subject to the conditions set out in Clause 26.2 (Conditions of
assignment or transfer) a transfer is effected in accordance with
paragraph (b) below when the Agent executes an otherwise duly completed
Transfer Certificate delivered to it by the Existing Lender and the New
Lender. The Agent shall, as soon as reasonably practicable after
receipt by it of a duly completed Transfer Certificate appearing on its
face to comply with the terms of this Agreement and delivered in
accordance with the terms of this Agreement, execute that Transfer
Certificate.
(b) On the Transfer Date:-
(i) to the extent that in the Transfer Certificate the Existing
Lender seeks to transfer by novation its rights and
obligations under the Expanded Finance Documents each of the
Obligors and the Existing Lender shall be released from
further obligations towards one another under the Expanded
Finance Documents and their respective rights against one
another shall be cancelled (being the "DISCHARGED RIGHTS AND
OBLIGATIONS");
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(ii) each of the Obligors and the New Lender shall assume
obligations towards one another and/or acquire rights against
one another which differ from the Discharged Rights and
Obligations only insofar as that Obligor and the New Lender
have assumed and/or acquired the same in place of that Obligor
and the Existing Lender;
(iii) the Agent, the Security Trustee, the New Lender and other
Lenders shall acquire the same rights and assume the same
obligations between themselves as they would have acquired and
assumed had the New Lender been an Original Lender with the
rights and/or obligations acquired or assumed by it as a
result of the transfer and to that extent the Agent, the
Security Trustee and the Existing Lender shall each be
released from further obligations to each other under this
Agreement; and
(iv) the New Lender shall become a Party as a "Lender" and entitled
to the benefits of any other Expanded Finance Document entered
into by the Agent and/or Security Trustee on behalf of the
Lenders.
26.6 DISCLOSURE OF INFORMATION
(a) Any Lender may disclose to any of its Affiliates and any other person:-
(i) to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under this Agreement;
(ii) with (or through) whom that 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, this Agreement or any Obligor; or
(iii) to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation,
any information about any Obligor, the Group and the Expanded Finance
Documents as that Lender shall consider appropriate if, in relation to
paragraphs (a) and (b) above, the person to whom the information is to
be given has entered into a Confidentiality Undertaking. This Clause
supersedes any previous agreement relating to the confidentiality of
this information.
(b) Each of the Agent and the Lenders shall be entitled to provide any
information in relation to MCL, the Group, the MCL Group and the
Relevant Documents to the competent authorities of the PRC represented
by Sinosure and to allow such parties to review all records relating to
MCL, the Group, the MCL Group and the Relevant Documents and to provide
them with copies thereof.
27. CHANGES TO THE OBLIGORS
27.1 ASSIGNMENTS AND TRANSFER BY OBLIGORS
No Obligor may assign any of its rights or transfer any of its rights
or obligations under the Finance Documents.
27.2 RELEASE OF SECURITY
(a) At the time of completion of any disposal by any Obligor of any asset,
the Security Trustee shall, at the request and cost of MCL, execute
such documents as may be required to release that asset from the
Security Documents. Each other Finance Party authorises the Security
Trustee to execute any such document.
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(b) The Security Trustee shall only be required to grant a release under
paragraph (a) above if:
(i) the disposal is permitted under Clause 24.7 (Disposals) or
otherwise with the consent of the Agent;
(ii) to the extent that the proceeds of the disposal are, or are
required by this Agreement, to be applied in or toward
repayment or prepayment of the Facilities, the Security
Trustee has received (or is satisfied that it will receive)
those proceeds; and
(iii) to the extent that the disposal is to be in exchange for
replacement assets, the Security Trustee has received (or is
satisfied that it will receive) Security (in favour of the
Secured Creditors to secure all of the obligations of the
Obligors under the Finance Documents and in form and substance
satisfactory to the Security Trustee) over those replacement
assets.
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SECTION 12
THE FINANCE PARTIES
28. ROLE OF THE AGENT AND THE SECURITY TRUSTEE
28.1 APPOINTMENT OF THE AGENT AND THE SECURITY TRUSTEE
(a) Each other Finance Party appoints the Agent to act as its agent under
and in connection with the Expanded Finance Documents .
(b) Each other Finance Party appoints the Security Trustee to act as
security trustee under and in connection with the terms of the Security
Trust Deed, any Intercreditor Agreement and the Finance Documents and
authorises the Security Trustee to execute the Security Trust Deed on
its behalf.
(c) Each other Finance Party authorises each of the Agent and the Security
Trustee to exercise the rights, powers, authorities and discretions
specifically given to it under or in connection with the Expanded
Finance Documents together with any other incidental rights, powers,
authorities and discretions.
28.2 DUTIES OF THE AGENT
(a) The Agent shall promptly forward to a Party the original or a copy of
any document which is delivered to the Agent for that Party by any
other Party.
(b) Except where an Expanded Finance Document specifically provides
otherwise, the Agent is not obliged to review or check the adequacy,
accuracy or completeness of any document it forwards to another Party.
(c) If the Agent receives notice from a Party referring to this Agreement,
describing a Default and stating that the circumstance described is a
Default, it shall promptly notify the Finance Parties.
(d) If the Agent is aware of the non-payment of any principal, interest,
commitment fee or other fee payable to a Finance Party under this
Agreement it shall promptly notify the other Finance Parties.
(e) The Agent shall promptly send to the Security Trustee such
certification as the Security Trustee may require pursuant to the
Security Trust Deed.
(f) The duties of the Agent and the Security Trustee under the Expanded
Finance Documents are solely mechanical and administrative in nature.
The Agent shall have no other duties except as expressly provided in
the Expanded Finance Documents.
28.3 ROLE OF THE SECURITY TRUSTEE
The Security Trustee shall not be an agent of any Finance Party or any
Obligor under or in connection with any Expanded Finance Document.
28.4 NO FIDUCIARY DUTIES
(a) Nothing in this Agreement constitutes the Agent or the Security Trustee
(except as expressly provided in the Security Trust Deed) as a trustee
or fiduciary of any other person.
(b) Neither the Agent nor the Security Trustee (except as expressly
provided in the Security Trust Deed or in any Security Document) r
shall be bound to account to any Lender for any sum or the profit
element of any sum received by it for its own account.
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28.5 BUSINESS WITH THE GROUP
The Agent and the Security Trustee may accept deposits from, lend money
to and generally engage in any kind of banking or other business with
any member of the Group.
28.6 RIGHTS AND DISCRETIONS OF THE AGENT
(a) The Agent may rely on:-
(i) any representation, notice or document believed by it to be
genuine, correct and appropriately authorised and shall have
no duty to verify any signature on any document; and
(ii) any statement purportedly made by a director, authorised
signatory or employee of any person regarding any matters
which may reasonably be assumed to be within his knowledge or
within his power to verify.
(b) The Agent may assume, unless it has received notice to the contrary in
its capacity as agent for the Lenders for the Finance Parties, that:-
(i) no Default has occurred (unless it has actual knowledge of a
Default arising under Clause 25.1 (Non-payment));
(ii) any right, power, authority or discretion vested in any Party
or any Majority Lenders or Majority Lenders has not been
exercised; and
(iii) any notice or request made by MCL or SUNDAY (other than a
Utilisation Request or Selection Notice) is made on behalf of
and with the consent and knowledge of all the Obligors.
(c) The Agent may engage, pay for and rely on the advice or services of any
lawyers, accountants, surveyors or other experts.
(d) The Agent may act in relation to the Expanded Finance Documents through
its personnel and agents.
(e) The Agent may disclose to any other Party any information it believes
it has received as agent under this Agreement.
(f) Notwithstanding any other provision of any Expanded Finance Document to
the contrary, neither the Agent nor any other Finance Party is obliged
to do or omit to do anything if it would or might in its reasonable
opinion constitute a breach of any law or a breach of a fiduciary duty.
28.7 MAJORITY LENDERS' INSTRUCTIONS
(a) Unless a contrary indication appears in an Expanded Finance Document,
the Agent shall (i) exercise any right, power, authority or discretion
vested in it as Agent in accordance with any instructions given to it
by the Majority Lenders for that Facility (or, if so instructed by the
Majority Lenders for that Facility, refrain from exercising any right,
power, authority or discretion vested in it as Agent) and (ii) not be
liable for any act (or omission) if it acts (or refrains from taking
any action) in accordance with an instruction of the Majority Lenders.
(b) Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders for a Facility will in
respect of that Facility be binding on all the Finance Parties.
(c) The Agent may refrain from acting in accordance with the instructions
of the Majority Lenders (or, if appropriate, the Lenders) or under
paragraph (f) below until it has received such security as it may
require
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for any cost, loss or liability (together with any associated Indirect
Tax) which it may incur in complying with the instructions.
(d) In the absence of instructions from the Majority Lenders (or, if
appropriate, the Lenders), the Agent may act (or refrain from taking
action) as it considers to be in the best interest of the Lenders.
(e) The Agent is not authorised to act on behalf of a Lender (without first
obtaining that Lender's consent) in any legal or arbitration
proceedings relating to any Expanded Finance Document.
28.8 RESPONSIBILITY FOR DOCUMENTATION
The Agent :-
(a) is not responsible for the adequacy, accuracy and/or
completeness of any information (whether oral or written)
supplied by the Agent, the Security Trustee, an Obligor or any
other person given in or in connection with any Relevant
Document or the Information Memorandum; or
(b) is not responsible for the legality, validity, effectiveness,
adequacy or enforceability of any Relevant Document or any
other agreement, arrangement or document entered into, made or
executed in anticipation of or in connection with any Relevant
Document.
28.9 EXCLUSION OF LIABILITY
(a) Without limiting paragraph (b) below, the Agent will not be liable for
any action taken by it, or for omitting to take action, under or in
connection with any Relevant Document, unless directly caused by its
gross negligence or wilful misconduct.
(b) No Party (other than the Agent) may take any proceedings against any
officer, employee or agent of the Agent in respect of any claim it
might have against the Agent or in respect of any act or omission of
any kind by that officer, employee or agent in relation to any Expanded
Finance Document and any officer, employee or agent of the Agent may
rely on this Clause.
(c) The Agent will not be liable for any delay (or any related
consequences) in crediting an account with an amount required under the
Finance Documents to be paid by it if it has taken all necessary steps
as soon as reasonably practicable to comply with the regulations or
operating procedures of any recognised clearing or settlement system
used by it for that purpose.
28.10 LENDERS' INDEMNITY TO THE AGENT
(a) Subject to paragraph (b) below, each Lender shall (in proportion to its
Available Commitments and participations in the Utilisations then
outstanding to the Available Facilities and all the Utilisations then
outstanding) indemnify the Agent, within three Business Days of demand,
against any cost, loss or liability incurred by the Agent (otherwise
than by reason of its gross negligence or wilful misconduct) in acting
as Agent under the Finance Documents (unless it has been reimbursed by
an Obligor pursuant to a Finance Document).
(b) If the Available Facilities are then zero each Lender's indemnity under
paragraph (a) above shall be in proportion to its Available Commitments
to the Available Facilities immediately prior to their reduction to
zero, unless there are then any Utilisations outstanding in which case
it shall be in proportion to its participations in the Utilisations
then outstanding to all the Utilisations then outstanding.
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28.11 RESIGNATION OF THE AGENT
(a) The Agent may resign and appoint one of its Affiliates acting through
an office in Hong Kong as successor by giving notice to the other
Finance Parties and MCL.
(b) Alternatively the Agent may resign by giving notice to the other
Finance Parties and MCL, in which case the Majority Lenders (after
consultation with MCL) may appoint a successor Agent.
(c) If the Majority Lenders have not appointed a successor Agent in
accordance with paragraph (b) above within 30 days after notice of
resignation was given, the Agent (after consultation with MCL) may
appoint a successor Agent (acting through an office in Hong Kong).
(d) The retiring Agent shall, at its own cost, make available to its
successor such documents and records and provide such assistance as its
successor may reasonably request for the purposes of performing its
functions as Agent under the Expanded Finance Documents.
(e) The resignation notice of the Agent shall only take effect upon the
appointment of a successor.
(f) Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Expanded
Finance Documents but shall remain entitled to the benefit of this
Clause 28. Its successor and each of the other Parties shall have the
same rights and obligations amongst themselves as they would have had
if such successor had been an original Party.
(g) After consultation with MCL, the Majority Lenders may, by notice to the
Agent require it to resign in accordance with paragraph (b) above. In
this event, the Agent shall resign in accordance with paragraph (b)
above.
28.12 CONFIDENTIALITY
(a) The Agent (in acting as agent for the Finance Parties) shall be
regarded as acting through its agency division which in each case shall
be treated as a separate entity from any other of its divisions or
departments.
(b) If information is received by another division or department of the
Agent, it may be treated as confidential to that division or department
and the Agent shall not be deemed to have notice of it.
(c) Notwithstanding any other provision of any Finance Document to the
contrary, the Agent is not obliged to disclose to any other person (i)
any confidential information or (ii) any other information if the
disclosure would or might in its reasonable opinion constitute a breach
of any law or a breach of a fiduciary duty.
28.13 RELATIONSHIP WITH THE LENDERS
The Agent may treat each Lender as a Lender, entitled to payments under
this Agreement and acting through its Facility Office unless it has
received not less than five Business Days prior notice from that Lender
to the contrary in accordance with the terms of this Agreement.
28.14 CREDIT APPRAISAL BY THE LENDERS
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Expanded Finance
Document, each Lender confirms to the Agent and the Security Trustee
that it has been, and will continue to be, solely responsible for
making its own independent appraisal and investigation of all risks
arising under or in connection with any Expanded Finance Document
including but not limited to:-
(a) the financial condition, status and nature of each member of
the Group or any other person;
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(b) the legality, validity, effectiveness, adequacy or
enforceability of any Relevant Document and any other
agreement, Security, arrangement or document entered into,
made or executed in anticipation of, under or in connection
with any Relevant Document;
(c) whether that Lender has recourse, and the nature and extent of
that recourse, against any Party or any of its respective
assets under or in connection with any Relevant Document, the
transactions contemplated by the Relevant Documents or any
other agreement, Security, arrangement or document entered
into, made or executed in anticipation of, under or in
connection with any Relevant Document; and
(d) the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by the Agent,
the Security Trustee, any Party or by any other person under
or in connection with any Relevant Document, the transactions
contemplated by the Relevant Documents or any other agreement,
Security, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any
Relevant Document.
28.15 REFERENCE BANKS
If a Reference Bank (or, if a Reference Bank is not a Lender, the
Lender of which it is an Affiliate) ceases to be a Lender, the Agent
shall (in consultation with MCL) appoint another Lender or an Affiliate
of a Lender or any bank approved by the Majority Lenders to replace
that Reference Bank.
28.16 MANAGEMENT TIME OF THE AGENT AND THE SECURITY TRUSTEE
Any amount payable to the Agent or the Security Trustee under Clause
18.3 (Enforcement costs) and to the Agent following the occurrence of a
Default under Clause 28.10 (Lenders' indemnity to the Agent) shall
include the cost of utilising its management time or other resources
(unless Huawei or an Affiliate of Huawei is the Agent or the Security
Trustee, as the case may be) and will be calculated on (and will
include reasonable particulars of) the basis of such reasonable daily
or hourly rates as it may notify to MCL and the Lenders, and is in
addition to any fee paid or payable to it under Clause 13 (Fees).
28.17 DEDUCTION FROM AMOUNTS OWING
If any Party owes an amount to the Agent under the Finance Documents
the Agent may, after giving notice to that Party, deduct an amount not
exceeding that amount from any payment to that Party which the Agent
would otherwise be obliged to make under the Finance Documents and
apply the amount deducted in or towards satisfaction of the amount
owed. For the purposes of the Finance Documents, as the case may be,
that Party shall be regarded as having received any amount so deducted.
28.18 SECURITY DOCUMENTS
(a) Each Finance Party irrevocably authorizes the Agent and, where
applicable, the Security Trustee to execute any Expanded Finance
Document to which it is expressed to be a party on its behalf.
(b) Each Obligor and each Finance Party irrevocably agrees that the benefit
of the Security Documents shall be held by the Security Trustee upon
the terms of the Security Trust Deed and agrees to be bound by the
Security Trust Deed and the Security Documents.
(c) Each Obligor and each Finance Party irrevocably waives any right to
appropriate any payment to, or other sum received, recovered or held
by, the Security Trustee in or towards payment of any particular part
of the Secured Obligations secured by the Security Documents and agrees
that the Security Trustee shall
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have the exclusive right to appropriate any such payment or other sum
in accordance with the Security Trust Deed, which right shall override
any application made or purported to be made by any other person.
(d) Each Finance Party irrevocably agrees that each decision made in
accordance with the terms of the Intercreditor Agreement (if any) shall
be binding on it.
29. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:-
(a) interfere with the right of any Finance Party to arrange its
affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party 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 any Finance Party to disclose any information relating
to its affairs (tax or otherwise) or any computations in
respect of Tax.
30. SHARING AMONG THE LENDERS
30.1 PAYMENTS TO LENDERS
If a Lender (a "RECOVERING LENDER") receives or recovers any amount
from an Obligor other than in accordance with Clause 31 (Payment
mechanics) and applies that amount to a payment due under the Finance
Documents then:-
(a) the Recovering Lender shall, within three Business Days,
notify details of the receipt or recovery to the Agent;
(b) the Agent shall determine whether the receipt or recovery is
in excess of the amount the Recovering Lender would have been
paid had the receipt or recovery been received or made by the
Agent and distributed in accordance with Clause 31 (Payment
mechanics), without taking account of any Tax which would be
imposed on the Agent in relation to the receipt, recovery or
distribution; and
(c) the Recovering Lender shall, within three Business Days of
demand by the Agent, pay to the Agent an amount (the "SHARING
PAYMENT") equal to such receipt or recovery less any amount
which the Agent determines may be retained by the Recovering
Lender as its share of any payment to be made, in accordance
with Clause 31.5 (Partial payments).
30.2 REDISTRIBUTION OF PAYMENTS
The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Obligor and distribute it between the Finance Parties (other
than the Recovering Lender) in accordance with Clause 31.5 (Partial
payments).
30.3 RECOVERING LENDER'S RIGHTS
(a) On a distribution by the Agent under Clause 30.2 (Redistribution of
payments), the Recovering Lender will be subrogated to the rights of
the Finance Parties which have shared in the redistribution.
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(b) If and to the extent that the Recovering Lender is not able to rely on
its rights under paragraph (a) above, the relevant Obligor shall be
liable to the Recovering Lender for a debt equal to the Sharing Payment
which is immediately due and payable.
30.4 REVERSAL OF REDISTRIBUTION
If any part of the Sharing Payment received or recovered by a
Recovering Lender becomes repayable and is repaid by that Recovering
Lender, then:-
(a) each Lender which has received a share of the relevant Sharing
Payment pursuant to Clause 30.2 (Redistribution of payments)
shall, upon request of the Agent, pay to the Agent for account
of that Recovering Lender an amount equal to the appropriate
part of its share of the Sharing Payment (together with an
amount as is necessary to reimburse that Recovering Lender for
its proportion of any interest on the Sharing Payment which
that Recovering Lender is required to pay); and
(b) that Recovering Lender's rights of subrogation in respect of
any reimbursement shall be cancelled and the relevant Obligor
will be liable to the reimbursing Lender for the amount so
reimbursed.
30.5 EXCEPTIONS
(a) This Clause 30 shall not apply to the extent that the Recovering Lender
would not, after making any payment pursuant to this Clause, have a
valid and enforceable claim against the relevant Obligor.
(b) A Recovering Lender is not obliged to share with any other Lender any
amount which the Recovering Lender has received or recovered as a
result of taking legal or arbitration proceedings, if:-
(i) it notified the other Lenders of the legal or arbitration
proceedings; and
(ii) the other Lender had an opportunity to participate in those
legal or arbitration proceedings but did not do so as soon as
reasonably practicable having received notice and did not take
separate legal or arbitration proceedings.
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SECTION 13
ADMINISTRATION
31. PAYMENT MECHANICS
31.1 PAYMENTS TO THE AGENT
(a) On each date on which an Obligor or a Lender is required to make a
payment under a Finance Document that Obligor (subject to Clause 31.10
(Payments to the Security Trustee) or Lender shall make the same
available to the Agent (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 Agent as being customary at the time for
settlement of transactions in the relevant currency in the place of
payment.
(b) Payment shall be made to such account in Hong Kong, for HK Dollars with
such bank as the Agent specifies.
31.2 DISTRIBUTIONS BY THE AGENT
Each payment received by the Agent under the Expanded Finance Documents
for another Party shall, subject to Clause 31.3 (Distributions to an
Obligor) and Clause 31.4 (Clawback) and Clause 31.10 (Payments to the
Security Trustee), be made available by the Agent as soon as
practicable after receipt to the Party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the
account of its Facility Office), to such account as that Party may
notify to the Agent by not less than five Business Days' notice with a
bank in Hong Kong.
31.3 DISTRIBUTIONS TO AN OBLIGOR
The Agent and the Security Trustee may apply any amount received by it
for that Obligor in or towards payment (on the date and in the currency
and funds of receipt) of any amount due from that Obligor under the
Finance Documents or in or towards purchase of any amount of any
currency to be so applied.
31.4 CLAWBACK
(a) Where a sum is to be paid to the Agent or the Security Trustee under
the Finance Documents for another Party, the Agent or, as the case may
be, the Security Trustee is not obliged to pay that sum to that other
Party (or to enter into or perform any related exchange contract) until
it has been able to establish to its satisfaction that it has actually
received that sum.
(b) If the Agent or the Security Trustee pays an amount to another Party
and it proves to be the case that it had not actually received that
amount, then the Party to whom that amount (or the proceeds of any
related exchange contract) was paid shall on demand refund the same to
the Agent or, as the case may be, the Security Trustee together with
interest on that amount from the date of payment to the date of receipt
by the Agent or, as the case may be, the Security Trustee, calculated
by it to reflect its cost of funds.
31.5 PARTIAL PAYMENTS
(a) If the Agent receives a payment that is insufficient to discharge all
the amounts then due and payable by an Obligor under the Finance
Documents, the Agent shall apply that payment towards the obligations
of that Obligor under the Expanded Finance Documents in the following
order:-
(i) FIRST, in or towards payment pro rata of any unpaid fees,
costs and expenses of the Agent, the Security Trustee, the
Issuing Bank or any delegate or receiver under the Finance
Documents;
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(ii) SECONDLY, in or towards payment pro rata of any accrued
interest, fee or commission due but unpaid under this
Agreement;
(iii) THIRDLY, in or towards payment pro rata of any principal due
but unpaid under this Agreement; and
(iv) FOURTHLY, in or towards payment pro rata of any other sum due
but unpaid under the Expanded Finance Documents.
(b) The Agent shall, if so directed by the Majority Lenders vary the order
set out in paragraphs (a)(ii) to (iv) above.
(c) Paragraph (a) above will override any appropriation made by an Obligor.
31.6 NO SET-OFF BY OBLIGORS
All payments to be made by an Obligor under the Finance Documents shall
be calculated and be made without (and free and clear of any deduction
for) set-off or counterclaim.
31.7 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 an
Unpaid Sum under this Agreement interest is payable on the principal or
Unpaid Sum at the rate payable on the original due date.
31.8 CURRENCY OF ACCOUNT
(a) Subject to paragraphs (b) to (e) below, HK Dollars is the currency of
account and payment for any sum due from an Obligor under any Finance
Document.
(b) A repayment of a Utilisation or Unpaid Sum or a part of a Utilisation
or Unpaid Sum shall be made in the currency in which that Utilisation
or Unpaid Sum is denominated on its due date.
(c) Each payment of interest shall be made in the currency in which the sum
in respect of which the interest is payable was denominated when that
interest accrued.
(d) Each payment in respect of costs, expenses or Taxes shall be made in
the currency in which the costs, expenses or Taxes are incurred.
(e) Any amount expressed to be payable in a currency other than HK Dollars
shall be paid in that other currency.
31.9 CHANGE OF CURRENCY
(a) Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank of
any country as the lawful currency of that country, then:-
(i) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency or
currency unit of that country designated by the Agent (after
consultation with MCL); and
(ii) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Agent (acting
reasonably).
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(b) If a change in any currency of a country occurs, this Agreement will,
to the extent the Agent (acting reasonably and after consultation with
MCL) specifies to be necessary, be amended to comply with any generally
accepted conventions and market practice in the Relevant Interbank
Market and otherwise to reflect the change in currency.
31.10 PAYMENTS TO THE SECURITY TRUSTEE
Notwithstanding any other provision of any Finance Document, at any
time after any Security created by or pursuant to any Security Document
becomes enforceable, the Security Trustee may require:-
(a) any Obligor to pay all sums due under any Finance Document; or
(b) the Agent to pay all sums received or recovered from an
Obligor under any Finance Document,
in each case as the Security Trustee may direct for application in
accordance with the terms of the Security Documents and/or the Security
Trust Deed.
32. SET-OFF
A Finance Party may, but is not obliged to, set off any matured
obligation due from an Obligor under the Finance Documents (to the
extent beneficially owned by that Finance Party) against any matured
obligation owed by that Finance Party to that Obligor, regardless of
the place of payment, booking branch or currency of either obligation.
If the obligations are in different currencies, the Finance Party may
convert either obligation at a market rate of exchange in its usual
course of business for the purpose of the set-off.
33. NOTICES
33.1 COMMUNICATIONS IN WRITING
Subject to Clauses 33.4 (Electronic communication) any communication to
be made under or in connection with the Expanded Finance Documents
shall be made in writing and, unless otherwise stated, may be made by
fax or letter.
33.2 ADDRESSES
The address and fax number and (if applicable) email address (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 the Expanded Finance Documents
is:-
(a) in the case of MCL and SUNDAY, that identified with its name
below;
(b) in the case of each Lender set out beneath its name in the
signature pages of this Agreement; or
(c) in the case of any other Lender or any other Obligor, that
notified in writing to the Agent on or prior to the date on
which it becomes a Party; and
(d) in the case of the Agent and the Security Trustee, that
identified with its name below,
or any substitute address, fax number, email address (if applicable) or
department or officer as the Party may notify to the Agent (or the
Agent may notify to the other Parties, if a change is made by the
Agent) by not less than five Business Days' notice.
106
33.3 DELIVERY
(a) Any communication or document made or delivered by one person to
another under or in connection with the Expanded Finance Documents will
only be effective:-
(i) if by way of fax, when received in legible form;
(ii) if by way of letter, 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; or
(iii) if by way of electronic transmission if it complies with the
rules under Clause 33.4 (Electronic communication),
and, if a particular department or officer is specified as part of its
address details provided under Clause 33.2 (Addresses), if addressed to
that department or officer.
(b) Any communication or document to be made or delivered to the Agent or
the Security Trustee will be effective only when actually received by
it and then only if it is expressly marked for the attention of the
department or officer identified with its signature below (or any
substitute department or officer as it shall specify for this purpose).
(c) All notices from or to an Obligor shall be sent through the Agent.
(d) Any communication or document made or delivered to MCL in accordance
with this Clause will be deemed to have been made or delivered to each
of the Obligors.
33.4 ELECTRONIC COMMUNICATION
(a) Any communication to be made between the Agent and a Lender under or in
connection with the Expanded Finance Documents may be made by
electronic mail or other electronic means, if the Agent and the
relevant Lender:-
(i) agree that, unless and until notified to the contrary, this is
to be an accepted form of communication;
(ii) notify each other in writing of their electronic mail address
and/or any other information required to enable the sending
and receipt of information by that means; and
(iii) notify each other of any change to their electronic mail
address or any other such information supplied by them.
(b) Any Lender which sets out an email address beneath its name in the
signature pages of this Agreement is deemed to agree to receiving
communications from the Agent by electronic mail.
(c) Any electronic communication made:-
(i) by the Agent to a Lender will be effective when it is sent by
the Agent unless the Agent receives a message indicating
failed delivery; and
(ii) by a Lender to the Agent will be effective only when actually
received by the Agent and then only if it is addressed in such
a manner as the Agent shall specify to that Lender for this
purpose.
(d) The Agent or a Lender shall notify any affected parties promptly upon
becoming aware that its electronic mail system or other electronic
means of communication cannot be used due to technical failure (and
that failure is continuing for more than two Business Days). Until the
Agent or that Lender has notified the
107
other affected parties that the failure has been remedied, all notices
between those parties shall be sent by fax or letter in accordance with
this Clause 33 (Notices).
33.5 NOTIFICATION OF ADDRESS, FAX NUMBER AND EMAIL ADDRESS
Promptly upon receipt of notification of an address, fax number and
email address or change of address, fax number or email address
pursuant to Clause 33.2 (Addresses) or changing its own address, fax
number or email address, the Agent shall notify the other Parties.
33.6 RELIANCE
Any notice sent under this Clause 33 can be relied on by the recipient
if the recipient reasonably believes the notice to be genuine and if it
bears what appears to be the signature (original or facsimile) of an
authorised signatory of the sender (without the need for further
enquiry or confirmation). Each party must take reasonable care to
ensure that no forged, false or unauthorised notices are sent to
another Party.
33.7 ENGLISH LANGUAGE
(a) Any notice given under or in connection with any Expanded Finance
Document must be in English.
(b) All other documents provided under or in connection with any Expanded
Finance Document must be:-
(i) in English; or
(ii) if not in English, and if so required by the Agent,
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 or a
Security Document.
34. CALCULATIONS AND CERTIFICATES
34.1 ACCOUNTS
In any litigation or arbitration proceedings arising out of or in
connection with any Expanded Finance Document, the entries made in the
accounts maintained by a Finance Party are prima facie evidence of the
matters to which they relate.
34.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or
amount under any Expanded Finance Document is, in the absence of
manifest error, conclusive evidence of the matters to which it relates.
34.3 DAY COUNT CONVENTION
Any interest, commission or fee accruing under an Expanded Finance
Document will accrue from day to day and is calculated on the basis of
the actual number of days elapsed and a year of 365 days (for HK
Dollars) or, in any case where the practice differs, in accordance with
that market practice.
35. PARTIAL INVALIDITY
If, at any time, any provision of the Expanded 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.
108
36. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Expanded 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.
37. AMENDMENTS AND WAIVERS
37.1 REQUIRED CONSENTS
(a) Subject to Clause 37.2 (Exceptions) any term of the Finance Documents
and the Security Trust Deed may be amended or waived only with the
consent of the Majority Lenders and MCL and any such amendment or
waiver will be binding on all Parties.
(b) The Agent may effect, on behalf of any Finance Party, any amendment or
waiver permitted by this Clause.
37.2 EXCEPTIONS
(a) An amendment or waiver that has the effect of changing or which relates
to:-
(i) the definition of "Majority Lenders" in Clause 1.1
(Definitions);
(ii) an extension to the date of payment of any amount under the
Finance Documents;
(iii) a reduction in the Margin or a reduction in the amount of any
payment of principal, interest, fees or commission payable;
(iv) an increase in or an extension of any Commitment;
(v) a change to MCL or the Guarantors;
(vi) Clause 2.2 (Finance Parties' rights and obligations), Clause
9.9 (Prepayment Account), Clause 12.3 (Alternative basis of
interest or funding), Clause 26 (Changes to the Lenders),
Clause 30 (Sharing among the Lenders) or this Clause 37;
(vii) a provision which expressly requires the consent of all the
Lenders; or
(viii) the release of any Security created pursuant to any Security
Document or of any Charged Assets (except as provided in any
Expanded Security Document),
shall not be made without the prior consent of all the Lenders.
(b) An amendment or waiver which relates to the rights or obligations of
the Agent, the Security Trustee or the Issuing Bank may not be effected
without the consent of the Agent, the Security Trustee or the Issuing
Bank, as the case may be.
38. 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.
109
SECTION 14
GOVERNING LAW AND ENFORCEMENT
39. GOVERNING LAW
This Agreement is governed by Hong Kong law.
40. ENFORCEMENT
40.1 JURISDICTION OF HONG KONG COURTS
(a) The courts of Hong Kong have non-exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement (including
a 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.
(c) This Clause 40.1 is for the benefit of the Finance Parties only. As a
result, no Finance Party shall be prevented from taking proceedings
relating to a Dispute in any other courts with jurisdiction. To the
extent allowed by law, the Finance Parties may take concurrent
proceedings in any number of jurisdictions.
40.2 SERVICE OF PROCESS
(a) Without prejudice to any other mode of service allowed under any
relevant law, each Obligor (other than an Obligor incorporated in Hong
Kong or who is registered as an overseas company under Part XI of the
Companies Ordinance (Cap.32)):-
(i) irrevocably appoints MCL as its agent for service of process
in relation to any proceedings before the Hong Kong courts in
connection with any Finance Document; and
(ii) agrees that failure by a process agent to notify the relevant
Obligor of the process will not invalidate the proceedings
concerned.
(b) MCL irrevocably accepts its appointment referred to in paragraph (a)
above as agent for service of process of the relevant Obligors in
relation to any proceedings before the Hong Kong courts in connection
with any Finance Document.
THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF THIS
AGREEMENT.
110
SCHEDULE 1
MEMBERS OF THE GROUP
NAME OF MEMBERS OF REGISTRATION NUMBER CREDIT NET
THE GROUP PLACE OF INCORPORATION (OR EQUIVALENT, IF ANY) LINE OF BUSINESS OBLIGOR (YES/NO)
SUNDAY Communications Cayman Islands CR-94336 Investment Holding No
Limited
SUNDAY Holdings British Virgin Islands 433140 Dormant No
(Singapore) Corporation
SUNDAY Holdings (Hong British Virgin Islands 242804 Investment Holding Yes
Kong) Corporation
SUNDAY Holdings (Asia) British Virgin Islands 454583 Investment Holding No
Corporation
SUNDAY Holdings (China) British Virgin Islands 241885 Investment Holding Yes
Corporation
SUNDAY XX Xxxxxxxx Xxxxxxx Xxxxxx Xxxxxxx 000000 Investment Holding Yes
Corporation
Mandarin Communications Hong Kong 498281 Provision of mobile Yes
Limited and other services,
and sales of mobile
phones and accessories
SUNDAY Asia Limited British Virgin Islands 454584 Dormant No
SUNDAY Communications PRC (Chinese Provision of back Yes
Services (Shenzhen) characters) office support
Limited 308583 services to SUNDAY
Group
SUNDAY IP Limited British Virgin Islands 488960 Holding SUNDAY'S Yes
intellectual property
rights and trade marks
SUNDAY 3G Holdings (Hong British Virgin Islands 452897 Investment Holding Yes
Kong) Corporation
PKI Holdings Limited British Virgin Islands 241887 Xxxxxxxxxx Xxxxxxx Xx
XXXXXX 0X (Xxxx Xxxx) Xxxx Xxxx 617222 Licensee of HK 3G Yes
Limited licence
Nominee of SUNDAY No
SUNDAY (Hong Kong) Limited British Virgin Islands 241884 Group companies
SUNDAY Enterprises Limited Hong Kong 650665 Dormant No
Jumbo Union Limited Hong Kong 649871 Dormant No
Konsgreat Limited Hong Kong 645528 Lessee of cell site No
Unison Limited Hong Kong 649487 Dormant No
SUNDAY (China) Limited Hong Kong 615042 Dormant No
xxxxxx.xxx Limited British Virgin Islands 372812 Dormant No
111
SCHEDULE 2
CONDITIONS PRECEDENT
1. OBLIGORS
(a) A copy of the certificate of incorporation, memorandum and articles of
association and business registration certificate of each Obligor
incorporated in Hong Kong and any analogous constitutional documents of
each Obligor incorporated outside Hong Kong.
(b) A copy of a resolution of the board of directors or equivalent body of
each Obligor:-
(i) approving the terms of, and the transactions contemplated by,
the Finance Documents to which it is a party and resolving
that it execute the Finance Documents to which it is a party;
(ii) authorising a specified person or persons to execute the
Finance Documents to which it is a party on its behalf;
(iii) authorising a specified person or persons, on its behalf, to
sign and/or despatch all documents and notices (including, if
relevant, any Utilisation Request and Selection Notice) to be
signed and/or despatched by it under or in connection with the
Finance Documents to which it is a party; and
(iv) in the case of each Obligor other than MCL, to the effect that
it is in the best interests of that Obligor, giving reasons.
(c) A specimen of the signature of each person authorised by the
resolutions referred to in paragraph (b) above in respect of the
Finance Documents.
(d) A copy of a resolution of the Shareholders of SUNDAY approving the
transactions contemplated by, the Finance Documents and the Supply
Contract.
(e) A certificate of each Obligor (signed by a director or the secretary)
certifying that:-
(i) each copy document relating to it specified in this Schedule 2
is correct, complete and in full force and effect (as at a
date no earlier than the date of this Agreement);
(ii) (in the case of MCL and SUNDAY only) borrowing or
guaranteeing, as appropriate, the Total Commitments would not
cause any borrowing, guaranteeing or similar limit binding on
that Obligor to be exceeded; and
(iii) that Obligor is solvent on the date of the certificate.
2. SECURITY
Confirmation from the Security Trustee that it has received each of the
following documents in form and substance satisfactory to it:-
(a) A copy of each of the following Security Documents, duly executed by
the Security Trustee and the other parties noted below:-
(i) Hong Kong General Security Document: executed by, inter alios,
MCL, SUNDAY 3G Holdings, SUNDAY 3G, SUNDAY IP Holdings, SUNDAY
IP, SUNDAY Holdings and SUNDAY China Holdings;
112
(ii) the Share Charge:
CHARGORS SHARES CHARGED
(A) SUNDAY Holdings (A) MCL
(B) SUNDAY 3G Holdings (B) SUNDAY 3G
(C) SUNDAY (C) SUNDAY China Holdings
(D) MCL (D) SUNDAY 3G Holdings
(E) SUNDAY IP Holdings (E) SUNDAY IP
(iii) the PRC Security Document (undated but together with
irrevocable instructions providing for it to be dated):
executed by the Security Trustee and SUNDAY China Holdings;
and
(iv) the Subordination Deed: executed by each member of the Group
who owes Subordinated Debt or to whom Subordinated Debt is
owed.
(b) The share certificates (and all necessary powers of attorney, blank
executed stock transfer form, directors' letters of resignation or
equivalent means of transferring the shares) in relation to the entire
issued share capital (other than deferred shares in MCL) of each of
Shares referred to as being charged in paragraphs (a) (ii) and (iii).
(c) A copy of the capital verification reports issued by registered PRC
accountants, confirming that the registered capital for the PRC company
is fully paid up.
(d) All notices of assignment and applications for registration or
authorisation and other similar documentation required to perfect the
Security Documents listed above under the laws of the British Virgin
Islands, Hong Kong, the PRC as advised to the Security Trustee by its
legal advisers in each relevant jurisdiction.
3. HUAWEI/ORIGINAL LENDER
(a) A letter of comfort ("HUAWEI COMFORT LETTER") in respect of the
obligations of the Original Lender under this Agreement issued by
Huawei in a form acceptable to SUNDAY.
(b) A copy of the certificate of incorporation, memorandum and articles of
association and business registration certificate of the Original
Lender and any analogous constitutional documents of Huawei.
(c) A copy of a resolution of the board of directors or equivalent body of
the Original Lender and Huawei:
(i) approving the terms of, and the transactions contemplated by,
in the case of the Original Lender, the Finance Documents to
which it is a party and, in the case of Huawei, the Huawei
Comfort Letter and resolving that, in the case of the Original
Lender, it execute the Finance Documents to which it is a
party and, in the case of Huawei, it execute the Huawei
Comfort Letter;
(ii) authorising a specified person or persons to execute, in the
case of the Original Lender, the Finance Documents to which it
is a party and, in the case of Huawei, the Huawei Comfort
Letter, on its behalf; and
113
(iii) in the case of the Original Lender, to the effect that it is
in its best interests to enter into the relevant Finance
Documents, giving reasons.
(d) A specimen of the signature of each person authorised by the
resolutions referred to in paragraph (c) above in respect of the
relevant Finance Documents and the Huawei Comfort Letter.
4. LEGAL OPINIONS
(a) A legal opinion of Xxxxxxxx Xxxxxx, legal advisers to the Original
Lender and the Agent in Hong Kong, substantially in the Agreed Form.
(b) A legal opinion of Deacons, legal advisers to MCL and SUNDAY in Hong
Kong, as to corporate existence, capacity and due authorisation in
relation to Obligors incorporated in Hong Kong substantially in the
Agreed Form.
(c) A legal opinion of legal advisers to the Original Lender and the Agent
in the Cayman Islands, substantially in the Agreed Form.
(d) A legal opinion of legal advisers to the Original Lender and the Agent
in the British Virgin Islands, substantially in the Agreed Form.
(e) A legal opinion of legal advisers to the Original Lender and the Agent
in the PRC, substantially in the Agreed Form.
5. FINANCIAL INFORMATION
(a) A copy of each of the Original Financial Statements.
(b) The Budget in respect of the financial year ending 31 December 2004.
6. GROUP STRUCTURE
A copy of the Group Structure Chart.
7. MATERIAL AGREEMENTS
(a) Evidence that the Supply Contract is in full force and effect and that
all conditions precedent to the Supply Contract have been satisfied or
waived (other than any condition related to the effectiveness of this
Agreement).
(b) A copy of the business licence of the PRC Company in the appropriate
form, and any other authorisations confirmed to be required in the
opinion delivered under paragraph 3(e) above.
8. OTHER DOCUMENTS AND EVIDENCE
(a) Evidence that the fees, costs and expenses then due from MCL pursuant
to Clause 13 (Fees) have been paid or will be paid on or before the
First Utilisation Date.
(b) Evidence that any process agent referred to in Clause 40.2 (Service of
process) or any similar clause in another Finance Document, if not an
Obligor or member of the Group, has accepted its appointment.
(c) A copy of any other Authorisation or other document, opinion or
assurance which the Agent (acting reasonably) considers to be necessary
(if it has notified MCL accordingly) in connection with the entry into
and performance of the transactions contemplated by any Finance
Document or for the validity and enforceability of any Finance Document
or for the continuing operations of the Group and evidence that
114
such Authorisation shall have been obtained and be in full force and
effect unless the Agent in its reasonable discretion decides that the
cost or difficulty of obtaining the same is excessive in relation to
the value of the protection to be afforded thereby.
9. LISTS IN AGREED FORM
The following documents in Agreed Form:
(a) A copy of the Material Intellectual Property List.
(b) A copy of the Software Licence List.
(c) A copy of the Schedule of Intra-Group and External Borrowings referred
to in Clause 21.21(b) (No Financial Indebtedness or Security).
(d) A copy of the list of Permitted External Bank Accounts.
115
SCHEDULE 3
REQUESTS
PART I
UTILISATION REQUEST
GENERAL LOAN
From: Mandarin Communications Limited
To: [_____________] as Agent
Fax: [_____________]
Attn: [_____________]
Dated:
Dear Sirs
FACILITY AGREEMENT
DATED [__] MAY 2004
1. We wish to borrow a Loan under the General Facility on the following
terms:-
Proposed Utilisation Date: [___________________] (or,
if that is not a Business
Day, the next Business Day)
Facility to be utilised: the General Facility
Amount: HK$[___________________]
or, if less, the Available
Facility
Interest Period: [___________________]
2. We confirm that each condition specified in Clause 4.3 (Further
conditions precedent) is satisfied on the date of this Utilisation
Request.
3. The proceeds of this Loan should be credited to [account].
4. This Utilisation Request is irrevocable.
Yours faithfully
________________________________________
authorised signatory for
MANDARIN COMMUNICATIONS LIMITED
116
PART II
UTILISATION REQUEST
EQUIPMENT SUPPLY UTILISATION REQUEST
From: Mandarin Communications Limited
To: [____________] as Agent
cc: [Supplier]
Dated:
Dear Sirs
FACILITY AGREEMENT
DATED [________________] MAY 2004 (THE "AGREEMENT")
1. We refer to the Agreement. This is a Supply Contract Utilisation
Request. Terms defined in the Agreement shall have the same meaning in
this Supply Contract Utilisation Request unless given a different
meaning in this Supply Contract Utilisation Request.
2. We request a Utilisation in HK Dollars under the Agreement on the
following terms:
Facility: [Equipment Supply Facility]
Proposed Utilisation Date: [_________________] (or,
if that is not a Business
Day, the next Business
Day)
Amount: HK$[______________] or, if
less, the Available Tranche
3. The proceeds of this Loan should be credited to [account]. This is an
account of [the Supplier/MCL].
4. [The Loan is being disbursed directly to the Supplier in payment of the
Invoice(s) attached to this Utilisation Request.] [The Loan is being
disbursed to MCL as reimbursement for its payment to the Supplier of
the amounts due under the Invoice(s) attached to this Utilisation
Receipt and the Supplier confirms that it has received that payment.] *
5. This Utilisation Request is irrevocable.
6. We also include true copies of Invoice(s) from the Supplier in respect
of Eligible Goods and Services intended to be financed.
____________________________
authorised signatory for
MANDARIN COMMUNICATIONS LIMITED
* Delete as appropriate
117
PART III
UTILIZATION REQUEST
PERFORMANCE BOND FACILITY
From: Mandarin Communications Limited
To: [ ] as Agent
Dated:
DEAR SIRS
FACILITY AGREEMENT
DATED [ ] MAY 2004 (THE "AGREEMENT")
1. We refer to the Agreement. This is a Utilisation Request. Terms defined
in the Agreement shall have the same meaning in this Utilisation
Request.
2. Please issue a Performance Bond in the sum of HK$[ ] to OFTA on or
before [ ].
3. We confirm that each condition specified in Clause 4.3 (Further
conditions precedent) is satisfied on the date of this Utilisation
Request.
4. This Utilisation Request is irrevocable.
Yours faithfully
__________________________________
authorised signatory for
MANDARIN COMMUNICATIONS LIMITED
118
PART IV
SELECTION NOTICE
APPLICABLE TO A LOAN
From: Mandarin Communications Limited
To: [___________________] as Agent
Fax: [___________________]
Attn: [___________________]
Dated:
Dear Sirs
FACILITY AGREEMENT
DATED [__] MAY 2004
1. We refer to the Loan and the Interest Period ending on [_____].*
2. [We request that the next Interest Period for this Loan is [_______]].
3. This Selection Notice is irrevocable.
Yours faithfully
__________________________
authorised signatory for
MANDARIN COMMUNICATIONS LIMITED
119
SCHEDULE 4
FORM OF TRANSFER CERTIFICATE
To: [___________________] as Agent
cc: [___________________] as Security Trustee
From: [The Existing Lender] (the "EXISTING LENDER") and [Name of New
Lender] (the "NEW LENDER")
Dated:
FACILITY AGREEMENT
DATED [_________________] MAY 2004
1. We refer to the Facility Agreement. Terms defined in the Facility
Agreement shall have the same meaning in this Transfer Certificate.
2. We refer to Clause 26.5 (Procedure for transfer):-
(a) The Existing Lender and the New Lender agree to the Existing
Lender transferring to the New Lender by novation all or part
of the Existing Lender's Commitment, rights and obligations
referred to in the Schedule in accordance with Clause 26.5
(Procedure for transfer) and all of its related rights and
obligations under the Expanded Finance Documents.
(b) The proposed Transfer Date is [__].
(c) The Facility Office and address, fax number, email address and
attention details for notices of the New Lender for the
purposes of Clause 33.2 (Addresses) are set out in the
Schedule.
(d) [The New Lender agrees to be bound by the terms of the
Intercreditor Agreement (if any) as a [Lender].]
3. The New Lender expressly acknowledges the limitations on the Existing
Lender's obligations set out in paragraph (c) of Clause 26.4
(Limitation of responsibility of Existing Lenders).
4. This Transfer Certificate is governed by Hong Kong law.
120
THE SCHEDULE
COMMITMENT/RIGHTS AND OBLIGATIONS TO BE TRANSFERRED
[insert relevant details]
[Facility Office address, fax number and attention details for notices and
account details for payments.]
PARTICIPATION IN LOANS NEXT INTEREST
AVAILABLE COMMITMENT TRANSFERRED HK$ TRANSFERRED PAYMENT DATE
General Facility: General Facility: General Facility:
[___________________] [___________________] [___________________]
Equipment Supply Facility: Equipment Supply Facility: Equipment Supply Facility:
[___________________] [___________________] [___________________]
[PARTICIPATION IN PERFORMANCE BOND
[AVAILABLE COMMITMENT TRANSFERRED HK$] TRANSFERRED]
[Performance Bond Facility: [___________________]] [Performance Bond Facility: [___________________]]
ADMINISTRATION DETAILS:
New Lender's Standing Payment Instructions: [___________________]
Facility Office address: [___________________]
Telephone: [___________________]
Fax: [___________________]
[Email Address:] [___________________]
Attn/Ref [___________________]
[Existing Lender] [New Lender]
By: By:
This Transfer Certificate is accepted by the Agent and the Transfer Date is
confirmed as
[_________________].
[Agent]
By:
121
SCHEDULE 5
FORM OF COMPLIANCE CERTIFICATE
To: [ ] as Agent
From: Mandarin Communications Limited
cc: SUNDAY Communications Limited
Dated:
Dear Sirs
FACILITY AGREEMENT
DATED [ ] MAY 2004 (THE "FACILITY AGREEMENT")
1. We refer to the Agreement. This is a Compliance Certificate. Terms used
in the Agreement shall have the same meaning in this Compliance
Certificate.
2. We confirm that MCL is in compliance with Clause 23 (Financial
covenants) of the Agreement.
3. The Repeating Representations are true and correct on the date of this
Compliance Certificate.*
Signed: __________________
Director
of
Mandarin Communications Limited
--------------------------------------------------------------------------------
* If this statement cannot be made, the certificate should identify any
Default that is continuing and the steps, if any, being taken to remedy
it.
122
SCHEDULE 6
TIMETABLES
"D - " refers to the number of Business Days before the relevant Utilisation
Date/the first day of the relevant Interest Period.
EQUIPMENT SUPPLY PERFORMANCE BOND
GENERAL FACILITY FACILITY FACILITY
Delivery of a duly completed Utilisation Request (Clause X-0 X-0 X-0
5.1 (Delivery of a Utilisation Request)) or a Selection 10:00 a.m. 10:00 a.m. 10:00 a.m.
Notice (Clause 11.1 (Selection of Interest Periods))
Agent notifies the Lenders of the Loan or Performance X-0 X-0 X-0
Bond in accordance with Clause 5.4 (Lenders' 1:00 p.m. 1:00 p.m. 1:00 p.m.
participation)
Benchmark Rate is fixed Quotation Day Quotation Day
(D) (D)
11:00 a.m. 11:00 a.m.
Agent gives notice to Lender of determined interest rates Quotation Day Quotation Day
5:00 p.m. (D)
5:00 p.m.
123
SCHEDULE 7
BUSINESS PLAN
*
--------------------------------------------------------------------------------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
124
*
--------------------------------------------------------------------------------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
125
*
--------------------------------------------------------------------------------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
126
*
--------------------------------------------------------------------------------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
127
SCHEDULE 8
GROUP STRUCTURE CHART
[GROUP STRUCTURE CHART]
128
% OF TOTAL SHARE
TOTAL NUMBER OF CAPITAL HELD BY A
ISSUED AND FULLY SHARE OPTIONS MEMBER OF THE
NAME PLACE OF INCORPORATION PAID-UP CAPITAL OUTSTANDING GROUP STATUS
---- ---------------------- --------------- ----------- ----- ------
SUNDAY Communications Cayman Islands 2,990,000,000 29,505,849 n/a Limited
Limited ordinary shares shares * liability
of HK$0.1 each Company
SUNDAY Holdings British Virgin Islands 1 ordinary share n/a 100% Limited
(Singapore) Corporation of US$1 each liability
Company
SUNDAY Holdings (Hong British Virgin Islands 100 ordinary n/a 100% Limited
Kong) Corporation shares of US$1 liability
each Company
SUNDAY Holdings (Asia) British Virgin Islands 1 ordinary share n/a 100% Limited
Corporation of US$1 each liability
Company
SUNDAY Holdings (China) British Virgin Islands 1 ordinary share n/a 100% Limited
Corporation of US$1 each liability
Company
SUNDAY IP Holdings British Virgin Islands 1 ordinary share n/a 100% Limited
Corporation of US$1 each liability
Company
Mandarin Communications Hong Kong 100 ordinary n/a 100% Limited
Limited shares of HK$1 of the liability
each and ordinary Company
1,254,000,000 shares
non-voting
deferred shares
of HK$1 each
SUNDAY Asia Limited British Virgin Islands 1 ordinary share n/a 100% Limited
of US$1 each liability
Company
SUNDAY Communications PRC US$1,500,000 n/a 100% Limited
Services (Shenzhen) Limited liability
Company
SUNDAY IP Limited British Virgin Islands 1 ordinary share n/a 100% Limited
of US$1 each liability
Company
SUNDAY 3G Holdings (Hong British Virgin Islands 1 ordinary share n/a 100% Limited
Kong) Corporation of US$1 each liability
Company
PKI Holdings Limited British Virgin Islands 1 ordinary share n/a 100% Limited
of US$1 each liability
Company
SUNDAY 3G (Hong Kong) Hong Kong 2 ordinary shares n/a 100% Limited
Limited of HK$1 each liability
Company
SUNDAY (Hong Kong) British Virgin Islands 1 ordinary share n/a 100% Limited
Limited of US$1 each liability
Company
SUNDAY Enterprises Limited Hong Kong 2 ordinary shares n/a 100% Limited
of HK$1 each liability
Company
129
Jumbo Union Limited Hong Kong 2 ordinary shares n/a 100% Limited
of HK$1 each liability
Company
Konsgreat Limited Hong Kong 2 ordinary shares n/a 100% Limited
of HK$1 each liability
Company
Unison Limited Hong Kong 2 ordinary shares n/a 100% Limited
of HK$1 each liability
Company
SUNDAY (China) Limited Hong Kong 2 ordinary shares n/a 100% Limited
of HK$1 each liability
Company
xxxxxx.xxx Limited British Virgin Islands 1 ordinary share n/a 100% Limited
of US$1 each liability
Company
Atria Limited Hong Kong 2,000 ordinary n/a 50% Limited
shares of HK$1 liability
each Company
* balance as at 30 April 2004
130
SCHEDULE 9
PERFORMANCE BOND
TOTAL PERFORMANCE BOND
PERIOD FACILITY COMMITMENTS (HK$)
------ --------------------------
Period from and including 22 October 2004
to and including 21 October 2005 *
Period from and including 22 October 2005
to and including 21 October 2006 *
Period from and including 22 October 2006
to and including 21 October 2007 *
Period from and including 22 October 2007
to and including 21 October 2008 *
Period from and including 22 October 2008
to and including 21 October 2009 *
Period from and including 22 October 2009
to and including 21 October 2010 *
Period from and including 22 October 2010
to and including 21 October 2011 *
--------------------------------------------------------------------------------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
131
SCHEDULE 10
FORM OF ACCESSION DEED
To: [The Agent/The Original Lender, MCL and SCL]
THIS DEED is made the day of , by [ ] (the "[AGENT/ISSUING Bank]")
in relation to the Facility Agreement (the "FACILITY AGREEMENT") dated [ ]
May 2004 and originally between [ ] as the Original Lender, Mandarin
Communications Limited ("MCL") as borrower and Sunday Communications Limited as
guarantor ("SCL"). Words defined for the purposes of the Facility Agreement
shall bear the same meanings in this Deed.
In consideration of being accepted as [an Agent/Issuing Bank] for the purposes
of the Facility Agreement by the parties thereto (including any persons who have
previously executed Accession Deeds), the [Agent/Issuing Bank]:
(a) confirms that it intends to be party to the Facility Agreement as [an
Agent/Issuing Bank];
(b) undertakes to perform all the obligations expressed in the Facility
Agreement to be assumed by [an Agent/Issuing Bank]; and
(c) agrees that it shall be bound by all the provisions of the Facility
Agreement,
as if it had been an original party to the Facility Agreement.
This Deed shall be governed by and construed in accordance with Hong Kong law
and the provisions of Clauses 39 (Governing Law) and 40 (Enforcement) of the
Facility Agreement are, subject to any necessary changes, incorporated by
reference into this Deed.
IN WITNESS whereof this Deed has been duly executed as a deed on the date stated
above.
[Agent/Issuing Bank]
By:
Address: [_____________]
Fax No.: [_____________]
Attention: [_____________]
Signed by the [Agent/Original Lender, MCL and SCL]
Date:
132
SCHEDULE 11
MATERIAL LICENCE AGREEMENTS
*
--------------------------------------------------------------------------------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with request to the omitted portions.
133
SCHEDULE 12
DISTACOM SHAREHOLDERS
[FLOW CHART]
134
THE OBLIGORS
MANDARIN COMMUNICATIONS LIMITED
Address: 00xx Xxxxx, Xxxxxxx House
Taikoo Place
000 Xxxx'x Xxxx
Xxxxxx Xxxx
Xxxx Xxxx
Fax No.: 0000 0000 and 0000 0000
email contact: xxxxx.xxxxx@xxxx.xxxxxx.xxx / Xxxxx.Xxxx@xxxx.xxxxxx.xxx
Attention: Mr Xxxxx Xxxxx, Group Managing Director / Xx Xxxxx Xxxx,
Group Director - Finance
By: MR XXXXX XXXXX
DIRECTOR
with a copy to Deacons
Address: 0xx Xxxxx, Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxx Xxxx
Fax No.: 0000 0000
Attention: Mr. Xxxxx Xxxx
or such other address or facsimile number as MCL may notify to the Agent for
this purpose by not less than 5 Business Days' notice.
For the avoidance of doubt, as long as a notice is served or is deemed to be
served on MCL and/or SUNDAY at the address, facsimile number or e-mail set out
under its name, the fact that Deacons was not also served with that notice shall
not affect the validity of that notice so served on MCL and/or SUNDAY.
135
SUNDAY COMMUNICATIONS LIMITED
Address: 00xx Xxxxx, Xxxxxxx House
Taikoo Place
000 Xxxx'x Xxxx
Xxxxxx Xxxx
Xxxx Xxxx
Fax No.: 0000 0000 and 0000 0000
email contact: xxxxx.xxxxx@xxxx.xxxxxx.xxx / Xxxxx.Xxxx@xxxx.xxxxxx.xxx
Attention: Mr Xxxxx Xxxxx, Group Managing Director / Xx Xxxxx Xxxx, Group
Director - Finance
By: MR XXXXX XXXXX
GROUP MANAGING DIRECTOR
with a copy to Deacons
Address: 0xx Xxxxx, Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxx Xxxx
Fax No.: 0000 0000
Attention: Mr. Xxxxx Xxxx
or such other address or facsimile number as MCL may notify to the Agent for
this purpose by not less than 5 Business Days' notice.
For the avoidance of doubt, as long as a notice is served or is deemed to be
served on MCL and/or SUNDAY at the address, facsimile number or e-mail set out
under its name, the fact that Deacons was not also served with that notice shall
not affect the validity of that notice so served on MCL and/or SUNDAY.
136
THE ORIGINAL LENDER
HUAWEI TECH. INVESTMENT CO., LIMITED
Address: Room 3610-12
Xxx Xxxxxx
00 Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Fax No.: 0000 0000 and (00 000) 0000 0000
email contact: xxxxxxxxx@xxxxxx.xxx / xxxxxx@xxxxxx.xxx
Attention: Peng Qiuen, Director, Group Treasury / Wan Hui, Director,
Treasury
By: MADAM JI PING
DIRECTOR
137
