FRAMEWORK AGREEMENT by and between XI’AN NEW LAND DEVELOPMENT CO., LTD. CHINA HOUSING AND LAND DEVELOPMENT, INC. and PRAX CAPITAL REAL ESTATE HOLDING LIMITED Dated: November 5, 2008 Xi’an Baqiao Project
Execution
Version
by and
between
XI’AN
NEW LAND DEVELOPMENT CO., LTD.
CHINA
HOUSING AND LAND DEVELOPMENT, INC.
and
PRAX
CAPITAL REAL ESTATE HOLDING LIMITED
Dated: November
5, 2008
______________________________
Xi’an
Baqiao Project
______________________________
TABLE
OF CONTENTS
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Page
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ARTICLE
I.
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PRE-FORMATION
ACTIVITIES
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2
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ARTICLE
II.
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PROJECT
COMPANY TRANSACTIONS
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4
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ARTICLE
III.
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HK
SPV TRANSACTIONS
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8
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ARTICLE
IV.
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TRANSACTION
DOCUMENTS
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10
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ARTICLE
V.
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TERMINATION
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10
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ARTICLE
VI.
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REPRESENTATIONS
AND WARRANTIES
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12
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ARTICLE
VII.
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INDEMNIFICATION
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14
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ARTICLE
VIII.
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CONFIDENTIALITY
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15
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ARTICLE
IX.
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NOTICES
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16
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ARTICLE
X.
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GENERAL
PROVISIONS
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17
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APPENDIX
1
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DESCRIPTION
AND DEPICTION OF PROJECT LAND
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APPENDIX
2
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INDEX
OF DEFINED TERMS
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EXHIBIT
A
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JOINT
VENTURE AGREEMENT
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EXHIBIT
B
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PROJECT
COMPANY ARTICLES OF ASSOCIATION
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EXHIBIT
C
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SHAREHOLDERS’
AGREEMENT
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EXHIBIT
D
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SHARE
SUBSCRIPTION AGREEMENT
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EXHIBIT
E
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HK
SPV AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF
ASSOCIATION
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EXHIBIT
F
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GUARANTY
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THIS FRAMEWORK AGREEMENT (the
“Agreement”) is
made and entered into on October , 2008 by
and between:
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(1)
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Xi’an New Land Development Co.,
Ltd., a limited liability company established under the Laws (as
defined below) of the People’s Republic of China (for the purpose of
Agreement, excluding Hong Kong Special Administrative Region, Macao
Special Administrative Region and Taiwan, the “PRC”), with its
registered address at 0 Xxxxxxx Xxxx, Xxxxxx Xxxxxxxx, Xi’an, PRC (“New
Land”);
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(2)
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China Housing and Land
Development, Inc., a corporation established under the Laws of the
State of Nevada, the United States of America, with its registered address
at 0000 X Xxxxxxx XX., Xxxxx 000 Xxxxxx Xxxx, XX 00000-0000, the United
States of America (“CHL”);
and
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(3)
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Prax Capital Real Estate
Holding Limited, a company established under the Laws of Hong Kong
(as defined below), with its registered address at Xxxx/XX 0000, 15/F,
Xxxx Xxx Xxxxxxxxxx Xxxxxx, 000-000 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx
(“Prax”).
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New Land,
CHL and Prax are referred to in this Agreement individually as a “Party” and
collectively as the “Parties”.
RECITALS
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(A)
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New
Land is the direct, wholly-owned subsidiary of
CHL;
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(B)
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(C)
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Upon
the terms and conditions of this Agreement and the Transaction Documents
(as defined in Section 4.2 below), Prax, through HK SPV, and New Land,
intend to participate jointly in the bidding of land use rights with
respect to a parcel of land located in the Xxxx Xx Ecological District,
adjacent to Ba Riverfront Park, the details of which is described and
depicted in Appendix 1
attached to this Agreement (the “Target
Land”);
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(D)
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Provided
that the HK SPV and New Land are the prevailing bidders at the Auction (as
defined in Section 1.1 below) for the land use rights for the Target Land,
the HK SPV and New Land shall apply with the relevant governmental
authorities of the PRC to establish a cooperative joint venture under the
Laws of the PRC (the “Project
Company”) in accordance with the provisions of this Agreement and
the Transaction Documents and shall cause the land use rights for the
Target Land to be granted or otherwise vested in the Project
Company;
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(E)
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Concurrently
with the establishment of the Project Company and securing all necessary
governmental approvals, consents, filings and permits required under the
applicable laws, statutes, regulations, directives and other legal
requirements (collectively, “Laws”) of the
PRC, (i) Prax shall make a capital contribution in the amount specified
herein but not to exceed the US$ equivalent of RMB220,000,000 (which US$
equivalent shall be determined using the medium rate between RMB and US$
as announced by the People’s Bank of China (“PBOC”) on the
business day that is not a Saturday, Sunday, legal holiday or a day on
which federal banking institutions in the United States of America, or
banking institutions in Hong Kong or the PRC are required to be closed
(“Business
Day”) immediately preceding the date on which Prax pays such
amount) to the HK SPV, (ii) the HK SPV shall make a capital contribution
in the amount specified herein but not to exceed the US$ equivalent of
RMB220,000,000 to the Project Company (which US$ equivalent shall be
determined using the medium rate between RMB and US$ as announced by the
PBOC on the Business Day immediately preceding the date on which Prax pays
such amount), (iii) New Land shall make a capital contribution of
RMB120,000,000 to the Project Company, and (iv) the HK SPV shall issue
common shares to CHL affiliate and reclassify currently issued shares of
the HK SPV issued to Prax (or its affiliates specified in the
Shareholders’ Agreement) as preferred shares, in each case in accordance
with the provisions of this Agreement and the Transaction Documents;
and
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(F)
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The
Project Company shall cause the Target Land to be developed, operated and
sold in accordance with the provisions of the Transaction
Documents.
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NOW
THEREFORE, the Parties agree as follows:
Article
I.
PRE-FORMATION
ACTIVITIES
1.1 Auction for Target
Land. Contemporaneously with the execution of this Agreement,
New Land shall register itself and the HK SPV as joint bidders at the auction
of, or public bidding for, the Target Land (the “Auction”) for the
Target Land with the Xi’an Land Resources Bureau (the “Xi’an
LRB”). In connection with such registration, New Land shall
prepare and timely submit to the Xi’an LRB any and all documentation and other
items required by the Xi’an LRB in connection with the Auction. All
such documentation shall be subject to the prior written approval of Prax in its
sole discretion. Further, at its sole cost and expense, New Land
shall fund, on behalf of the HK SPV and New Land (as joint bidders at the
Auction), all deposits (including without limitation the RMB80,000,000
pre-auction deposit (the “Funded Auction
Deposit”) and other fees and expenses imposed by the Xi’an LRB in
connection with the Auction. Prior to registering for the Auction,
New Land shall obtain the prior written consent, in form and substance
reasonably approved by Prax, of the Administrative Committee of Xi’an Baqiao
Technology Industrial Park to the joint bidding arrangement between New Land and
the HK SPV for the Auction and shall provide evidence reasonably acceptable to
Prax that the Land Grant Contract (as defined in Section 1.2 below) will comply
with the requirements as set forth in Section 1.2 below. New Land
shall consult regularly with Prax and keep Prax informed on a timely basis
regarding all matters in connection with New Land’s and the HK SPV’s
registration for, and participation in, the Auction. At all times,
but subject to the provisions of this Agreement, New Land shall exercise its
best efforts to cause New Land and the HK SPV, as the joint bidders, to be the
prevailing bidder at the Auction and to secure the land use rights for the
Target Land for an aggregate Land Acquisition Cost not to exceed RMB320,000,000
(the “Cost
Ceiling”). Before bidding or agreeing to pay an amount that
would result in the Land Acquisition Cost exceeding the Cost Ceiling, New Land
shall obtain the prior written consent of Prax, which may be granted, withheld
or otherwise rejected in Prax’s sole discretion. As used in this
Agreement, the term “Land Acquisition
Cost” shall mean the total land acquisition costs and expenses payable by
or on behalf of the Project Company for purposes of acquiring the land use
rights for the Target Land, including but not limited to the land premium
payable under the Land Grant Contract (as defined in Section 1.2 below) and
all fees (including without limitation land relocation fees, if any), taxes and
expenses relating to the acquisition of the land use rights for the Target Land
and the obtaining of the land use rights certificate for the Target Land
pursuant to the Land Grant Contract.
2
1.2 Land Use Rights
Grant. Upon the execution of this Agreement, New Land
immediately shall commence negotiations with the Xi’an LRB regarding the terms
and conditions of the land use rights grant contract to be entered into by New
Land, the HK SPV and Xi’an LRB after New Land and the HK SPV are the prevailing
bidders at the Auction, pursuant to which contract the Xi’an LRB shall grant the
land use rights for the Target Land to New Land and the HK SPV (the “Land Grant
Contract”). Prior to registering for the Auction in accordance
with Section 1.1 of this Agreement, New Land shall cause the final form of Land
Grant Contract to (a) permit New Land and the HK SPV to assign all of their
rights and obligations under the Land Grant Contract to the Project Company
without the prior consent of the Xi’an LRB or any other governmental authority;
(b) both the Funded Auction Deposit and the Funded Preparation Fee (as defined
in Section 2.5 below) shall be deemed as partial payment of land premium payable
by the grantee under the Land Grant Contract; and (c) acknowledge that New
Land and the HK SPV have no obligation to pay any land premiums or other charges
for the land use rights for the Target Land until each of the following
conditions have been satisfied: (i) the Project Company has been formed;
(ii) New Land has secured all governmental approvals, consents, filings and
permits required under applicable Laws for the formation of the Project Company
(it being acknowledged that the Project Company has a foreign investor and is a
real estate development company) and for the Project Company to hold the land
use rights for the Target Land as contemplated under this Agreement;
(iii) a business license has been issued by the Administration for Industry
and Commerce to the Project Company; and (iv) the Project Company has been
duly registered with the State Administration of Foreign Exchange of the PRC or
its authorized local agency (“SAFE”). The
other terms and conditions of the Land Grant Contract shall be subject to the
prior written approval of Prax, which approval shall not be unreasonably
withheld. New Land shall consult regularly with Prax and keep Prax
informed on a timely basis regarding all matters in connection with the
negotiation of the Land Grant Contract. Further, Prax shall have the
right, but not the obligation, to observe and participate in negotiations with
the Xi’an LRB regarding the Land Grant Contract.
1.3 Budget and Business
Plan. The Parties shall jointly prepare a budget and business
plan (the “Budget and
Business Plan”) with respect to the acquisition, development, operation
and disposition of the project to be developed on the Target Land (the “Project”). The
Budget and Business Plan shall contain detailed financial projections, operating
budgets, cash flow projections and management teams for the Project covering the
full term of the Project’s existence (i.e. development, operation and
disposition). The Budget and Business Plan shall be subject to the
final written approval of Prax in its sole discretion. The Budget and
Business Plan so approved by Prax or otherwise amended pursuant to the
Transaction Documents shall be referred to as the “Approved Budget and Business
Plan” in this Agreement.
3
Article
II.
PROJECT COMPANY
TRANSACTIONS
2.1 Formation of Project
Company.
(a) Conditions
Precedent. The Parties’ obligations to form the Project
Company and effect the other transactions described in this Article II are
subject to the satisfaction of the following conditions precedent (collectively,
the “Project Company
Conditions Precedent”), or the waiver of such conditions by the Party or
Parties benefited thereby (which waiver may be exercised by a Party in its sole
and absolute discretion):
(i) For the
benefit of each of the Parties, New Land and the HK SPV are the prevailing
parties at the Auction;
(ii) For the
benefit of Prax, the Land Grant Contract complies with the requirements of
Section 1.2 of this Agreement and has been executed and delivered by the Xi’an
LRB, New Land and the HK SPV;
(iii) For the
benefit of Prax, New Land has produced to Prax documentation satisfactory to
Prax that New Land has obtained an updated, valid and effective business license
and organization code certificate that complies with all applicable
Laws;
(iv) For the
benefit of Prax, CHL, in its capacity as the sole shareholder of New Land, has
submitted to Prax a written approval in form reasonably acceptable to Prax
approving New Land’s execution and delivery of this Agreement and the
Transaction Documents and the performance of its obligations
thereunder;
(v) For the
benefit of Prax, New Land has submitted to Prax (A) a written consent of the
Administrative Committee of Xi’an Baqiao Technology Industrial Park in form
reasonably acceptable to Prax approving (x) the joint bidding arrangement of New
Land and the HK SPV for the Auction and (y) the establishment of, and
investment in, the Project Company by the HK SPV and New Land; and (B) a written
consent of Weilai Branch of Xi’an City Commercial Bank in form reasonably
acceptable to Prax approving the establishment of, and investment in, the
Project Company by the HK SPV and New Land;
4
(vi) For the
benefit of CHL and New Land, Prax has executed and delivered the Prax Project
Company Deliverables (as defined in Section 2.1(b) below) in accordance
with the provisions of this Agreement;
(vii) For the
benefit of Prax, CHL and New Land have executed and delivered the CHL/New Land
Project Company Deliverables (as defined in Section 2.1(b) below) in
accordance with the provisions of this Agreement;
(viii) For the
benefit of Prax, CHL has executed and delivered to Prax the Guarantee (as
defined in Section 4.1 below);
(ix) For the
benefit of CHL and New Land, Prax is not in default in the performance of its
material obligations under this Agreement, the Joint Venture Agreement (as
defined in Section 2.1(b) below) and the Project Company Articles of
Association (as defined in Section 2.1(b) below), and all of the
representations and warranties of Prax under this Agreement, the Joint Venture
Agreement and the Project Company Articles of Association are true and correct
in all material respects; and
(x) For the
benefit of Prax, neither CHL nor New Land is in default in the performance of
its material obligations under this Agreement, the Joint Venture Agreement, the
Project Company Articles of Association or the Guarantee, and all of the
representations and warranties of CHL and New Land under this Agreement, the
Joint Venture Agreement, the Project Company Articles of Association and the
Guarantee are true and correct in all material respects.
(b) Project Company
Deliverables. No later than seven (7) days following the
satisfaction of those Project Company Conditions Precedent specified in
Section 2.1(a)(i) and (ii) above (the “Project Company Delivery
Date”), the Parties shall execute and deliver (or, as the case may be,
cause to the executed and delivered) the following documents:
(i) by the HK
SPV and New Land, that certain Cooperative Joint Venture Contract for the
Project Company in the form of Exhibit A
attached to this Agreement (the “Joint Venture
Agreement”); and
(ii) by the HK
SPV and New Land, those Articles of Association of the Project Company in the
form of Exhibit B
attached to this Agreement (the “Project Company Articles of
Association”).
As used
in this Agreement, the term “CHL/New Land Project Company
Deliverables” shall mean New Land’s execution and delivery of those
documents specified in subparts (i) and (ii) of this Section, and the term
“Prax Project Company
Deliverables” shall mean Prax causing the HK SPV to execute and deliver
those documents specified in subparts (i) and (ii) of this Section.
2.2 Project Company Governmental
Approvals. After the execution and delivery of those documents
described in Section 2.1(b) above, New Land immediately shall apply for the
Project Company Governmental Approvals (as defined below) and thereafter shall
exercise its best efforts to ensure that the Project Company Governmental
Approvals are obtained as soon as is practicable. New Land shall
consult regularly with Prax and keep Prax informed on a timely basis regarding
all matters in connection with obtaining the Project Company Governmental
Approvals. As used in this Agreement, the term “Project Company Governmental
Approvals” shall mean collectively (a) approvals required under
applicable Laws from the Department of Commerce of Shaanxi Province or its
authorized local agency (“Shaanxi DOC”) and all
other governmental entities for the formation of the Project Company, the
participation of the HK SPV in the Project Company and for the Project Company
to hold land use rights for the Target Land; (b) the Administration for
Industry and Commerce’s issuance of a business license to the Project Company
for those business purposes specified in the Project Company Articles of
Association; (c) filings required under applicable Laws with the general office
of the People’s Government of Shaanxi Province and the Shaanxi DOC for the
formation of the Project Company, the participation of the HK SPV in the Project
Company and for the Project Company to hold land use rights for the Target Land;
and (d) the registration of the Project Company with SAFE in accordance
with all applicable Laws of the PRC.
5
2.3 Reimbursement of Prax Costs
and Payment of Finder’s Fee. No later than forty-five days
following the full contribution of registered capital of the Project Company
pursuant to the relevant Transaction Documents, the Parties shall cause the
Project Company to (a) reimburse Prax, through payment to the HK SPV, for
all third party expenses incurred by Prax and its affiliates in connection with
the due diligence and the investigation of the feasibility of its investment in
the Project Company and the negotiation and documentation of the transactions
contemplated in this Agreement and the Transaction Documents, with the amount of
such reimbursement not to exceed US$ equivalent of RMB2,000,000 (for the
avoidance of doubt, the Parties hereto agree to cause the HK SPV to, upon its
receipt of such amount from the Project Company, pay such amount with no
deduction to Prax or other entities designated by Prax in its sole discretion)
and (b) pay RMB2,000,000 as a finder’s fee to a third party approved by
Prax in connection with procuring the Parties’ participation in the transactions
contemplated in this Agreement and the Transaction Documents.
2.4 Project
Financing. Prior to the applicable deadline specified in the
Approved Budget and Business Plan, CHL and New Land shall cause the Project
Company to obtain onshore loans from one or more PRC banks to finance the
design, development and construction of the Project on commercially reasonable
terms for at least RMB400,000,000 (the “Onshore
Financing”). However, the Project Company’s entry into the
Onshore Financing and the execution and delivery of any documents and
instruments in connection with the Onshore Financing shall be subject to the
approval of the boards of directors of the HK SPV and the Project Company, which
approval shall be subject to the provisions of the Joint Venture Agreement and
the Shareholders’ Agreement (as defined in Section 3.1(b) below). CHL
and New Land shall consult regularly with Prax and keep Prax informed on a
timely basis regarding all matters in connection with locating, negotiating and
securing the Onshore Financing. Further, Prax shall have the right,
but not the obligation, to observe and participate in negotiations with
prospective lenders in connection with the Onshore Financing.
6
2.5 Payment of Land Premium and
Funded Pre-Construction Costs. CHL and New Land hereby,
jointly and severally, represent to Prax that prior to the date hereof, New Land
has deposited land preparation fees (预储备金) for the sole purpose of acquiring the
land use rights for the Target Land in an amount of RMB81,600,000 (the “Funded Preparation
Fee”) and it has secured the consent of the relevant local financial
bureau that upon the execution of the Land Grant Contract, all of the Funded
Preparation Fee will be deemed as, and accepted by the Xi’an LRB and the
relevant local financial bureau as, the Project Company’s partial payment of the
land premium under the Land Grant Contract. Upon the execution of the
Land Grant Contract and the issuance of the Project Company Governmental
Approvals, New Land shall cause and ensure that the sum of the Funded Auction
Deposit and the Funded Preparation Fee shall immediately constitute the Project
Company’s partial payment of land premium under the Land Grant Contract and the
remaining portion of the land premium under the Land Grant Contract shall be
paid out of the paid-in registered capital of the Project
Company. Provided that all of the Funded Preparation Fee actually has
been treated by the Xi’an LRB and the relevant local financial bureau as the
Project Company’s partial payment of the land premium under the Land Grant
Contract, to the extent permitted by the Laws of the PRC, such amount will be
treated as the Project Company’s payable to New Land without any interest and
upon the full contribution of the registered capital of the Project Company and
the issuance of the relevant capital verification report by certain firm of PRC
certified public accountants, the Parties shall cause the Project Company to
promptly repay RMB40,000,000 to New Land and the remaining portion of the Funded
Preparation Fee in the amount of RMB41,600,000 will be forthwith treated as
funds loaned by New Land to the Project Company to finance any pre-construction
costs (including without limitation the reimbursement of amounts payable to Prax
and the finder’s fee payable pursuant to Section 2.3 above, architecture,
engineering, permitting and other “soft” costs) in connection with the Project
which are not fully funded by the registered capital of the Project
Company. The amount of RMB41,600,000 funded by New Land pursuant to
the preceding sentence shall be referred to as “Funded Pre-Construction
Costs” in this Agreement. Interest shall accrue on the unpaid
principal balance of the Funded Pre-Construction Costs at an interest rate of
twenty percent (20%) per annum, simple interest, from the time the HK SPV and
New Land each have fully contributed their registered capital to the Project
Company as provided in this Agreement and the Joint Venture
Agreement. The payment of interest or return on Funded
Pre-Construction Costs, and the repayment of Funded Pre-Construction Costs to
New Land, shall be governed by the Transaction Documents.
2.6 Contribution
of Registered Capital. It is agreed by the Parties that if New Land
and the HK SPV, as the joint bidders, become the prevailing bidder at the
Auction for an aggregate Land Acquisition Cost of RMB300,000,000, the registered
capital of the Project Company will be RMB320,000,000 (“Target Registered
Capital”) and the total investment amount of the Project Company will be
RMB640,000,000 provided that, if the aggregate Land Acquisition Cost is more
than RMB300,000,000, the registered capital of the Project Company will be
increased by such amount of the difference between the actual Land Acquisition
Cost and RMB300,000,000, but in no event shall the registered capital of the
Project Company exceed RMB340,000,000 (the “Registered Capital
Ceiling”). In the event that the Project Company’s actual
registered capital exceeds the Target Registered Capital, but is less than the
Registered Capital Ceiling, then the Project Company’s total investment amount
shall be increased proportionally but in no event shall the Project Company’s
total investment amount exceed the RMB equivalent of
US$100,000,000. Of the registered capital of the Project Company,
each of CHL and New Land, jointly and severally, undertakes that New Land shall
subscribe an amount of RMB120,000,000, of which, the Funded Auction Deposit
shall constitute a partial contribution by New Land and the remaining
RMB40,000,000 shall be contributed by New Land in cash at the same time Prax (or
its designated affiliate) has made the capital contribution to the HK SPV
required to be made by Prax under the Subscription Agreement. The HK
SPV shall subscribe the remaining portion of the registered capital of the
Project Company and for the avoidance of doubt, the registered capital of the
Project Company subscribed by the HK SPV shall in no event exceed
RMB220,000,000.
7
Article
III.
HK SPV
TRANSACTIONS
3.1 Capital
Contributions.
(a) Conditions
Precedent. The Parties’ obligations to make the capital
contributions to the HK SPV and the Project Company as described in this
Article III and the Transaction Documents shall be subject to the
satisfaction of the following conditions precedent (collectively, the “Capital Contribution
Conditions Precedent”) or the waiver of such conditions by the Party or
Parties benefited thereby (which waiver may be exercised by a Party in its sole
and absolute discretion):
(i) For the
benefit of Prax, the satisfaction (or waiver by Prax) of those Project Company
Conditions Precedent for the benefit of Prax;
(ii) For the
benefit of CHL and New Land, the satisfaction (or waiver by New Land) of those
Project Company Conditions Precedent for the benefit of CHL or New
Land;
(iii) For the
benefit of each of the Parties, the issuance of all of the Project Company
Governmental Approvals;
(iv) For the
benefit of Prax, the Budget and Business Plan has been approved by Prax as
provided in Section 1.3 above;
(v) For the
benefit of Prax, CHL and New Land have delivered each of the CHL/New Land
Capital Contribution Deliverables (as defined in Section 3.1(b)
below);
(vi) For the
benefit of CHL and New Land, Prax shall have delivered, and caused the HK SPV
(where applicable) to deliver, the Prax Capital Contribution Deliverables (as
defined in Section 3.1(b) below);
(vii) For the
benefit of Prax, neither CHL nor New Land is in default in the performance of
its material obligations under this Agreement or the Transaction Documents, and
all of the representations and warranties of CHL and New Land under this
Agreement and the Transaction Documents are true and correct in all material
respects; and
8
(viii) For the
benefit of CHL and New Land, Prax is not in default in the performance of its
material obligations under this Agreement and the Transaction Documents, and all
of the representations and warranties of Prax under this Agreement and the
Transaction Documents are true and correct in all material
respects.
(b) Capital Contribution
Deliverables. No later than seven (7) Business Days following
the issuance of all of the Project Company Governmental Approvals (the “Capital Contribution
Delivery Date”), the Parties shall cause the following payments to be
made and documents to be executed and delivered:
(i) that
certain Shareholders’ Agreement for the HK SPV in the form of Exhibit C
attached to this Agreement (the “Shareholders’
Agreement”), executed by Prax (or its affiliates specified in the
Shareholders’ Agreement), CHL (or its affiliate specified in the Shareholders’
Agreement) and the HK SPV;
(ii) that
certain Share Subscription Agreement for the HK SPV in the form of Exhibit D
attached to this Agreement (the “Subscription
Agreement”), executed by Prax (or its affiliates specified in the
Shareholders’ Agreement), CHL (or its affiliate specified in the Shareholders’
Agreement) and the HK SPV;
(iii) those
Amended and Restated Articles of Association of the HK SPV in the form of Exhibit E
attached to this Agreement (the “HK SPV Amended and Restated
Memorandum and Articles of Association”), approved and adopted by Prax
and CHL (or the affiliates thereof specified in the Shareholders’
Agreement);
(iv) Prax (or
its designated affiliate) has made those payments and capital contributions
required to be made by such party under the Subscription Agreement;
(v) CHL (or
its designated affiliate) has made those payments and capital contributions
required to be made by such party under the Subscription Agreement;
(vi) all of
the Funded Preparation Fee has been actually treated by the Xi’an LRB as the
Project Company’s partial payment of the land premium under the Land Grant
Contract, and CHL has provided Prax with written evidence reasonably
satisfactory to Prax evidencing both (A) the payment of the Funded
Preparation Fee by New Land and (B) the acceptance of the Funded
Preparation Fee by the relevant local financial bureau as partial payment of the
land premium under the Land Grant Contract; and
(vii) New Land
has made those payments and capital contributions required to be made by New
Land under the Joint Venture Agreement.
As used
in this Agreement, the term “CHL/New Land Capital
Contribution Deliverables” shall mean (A) the Shareholders’
Agreement, the Subscription Agreement and the HK SPV Amended and Restated
Memorandum and Articles of Association executed and delivered or otherwise
approved and adopted by CHL (or its affiliate(s) named therein) and
(B) those payments described in subparts (v), (vi) and (vii)
above. As used in this Agreement, the term “Prax Capital Contribution
Deliverables” shall mean (Y) the Shareholders’ Agreement, the
Subscription Agreement and the HK SPV Amended and Restated Memorandum and
Articles of Association executed and delivered or otherwise approved and adopted
by Prax (or its affiliate(s) named therein) and (Z) those payments
described in subpart (iv) above.
9
3.2 Use of Capital Contribution
Proceeds. The Parties acknowledge and agree that the proceeds
from all capital contributions made to the HK SPV pursuant to
Section 3.1(b) above shall be used solely to fund the capital contribution
to be made by the HK SPV to the Project Company described in the Transaction
Documents. Further, the Parties acknowledge and agree that the
proceeds from the HK SPV’s capital contribution to the Project Company shall be
used solely for (a) the acquisition of the Target Land, (b) the
design, development and construction of the Project, (c) the reimbursement
of amounts payable to Prax pursuant to Section 2.3 of this Agreement; and
(d) the repayment of payable to New Land in the amount of RMB40,000,000 pursuant
to Section 2.5 of this Agreement.
Article
IV.
TRANSACTION
DOCUMENTS
4.1 Guarantee. Concurrently
with the execution and delivery of this Agreement, CHL shall execute and deliver
that certain deed of guarantee in the form of Exhibit F
attached hereto (the “Guarantee”) to Prax
and the other beneficiaries named therein.
4.2 Transaction
Documents. As used herein, the term “Transaction
Documents” shall mean collectively the Joint Venture Agreement, the
Project Company Articles of Association, the Shareholders’ Agreement, the
Subscription Agreement, the HK SPV Amended and Restated Memorandum and Articles
of Association and the Guarantee. The term “Transaction Document”
shall mean any of the foregoing instruments.
4.3 Effectiveness of Transaction
Documents. Each Transaction Document shall be effective upon
its execution and delivery by the parties to such Transaction Document, provided
that the Joint Venture Agreement and the Project Company Articles of Association
are subject to the approval of Shaanxi DOC and shall become effective upon the
receipt of such approval. In the event of any conflict between the
provisions of any Transaction Document and the provisions of this Agreement,
(a) if such conflict is between the Joint Venture Agreement and the
provisions of this Agreement, then the provisions of this Agreement shall
prevail, and (b) if such conflict is between any Transaction Document other
than the Joint Venture Agreement and this Agreement, then the provisions of the
applicable Transaction Document (other than the Joint Venture Agreement) shall
prevail.
Article
V.
TERMINATION
5. Termination. This
Agreement and the transactions contemplated under this Agreement shall
terminate:
10
(a) upon the
mutual written agreement of the Parties;
(b) by either
New Land or CHL effective upon the delivery of written notice to Prax, if there
has been a material breach by Prax at any time before the satisfaction (or
waiver by the Party or Parties benefited thereby) of the Capital Contribution
Conditions Precedent of any representation, warranty or covenant contained in
this Agreement that is not cured within thirty (30) days after written notice of
such breach is given by New Land or CHL, as may be applicable, to Prax or if
assurances of cure reasonably acceptable to New Land and CHL are not provided by
Prax during such thirty-day period;
(c) by Prax
effective upon the delivery of written notice to New Land and CHL, if there has
been a material breach by New Land or CHL at any time before the satisfaction
(or waiver by the Party or Parties benefited thereby) of the Capital
Contribution Conditions Precedent of any representation, warranty or covenant
contained in this Agreement that is not curable or, if curable, is not cured
within thirty (30) days after written notice of such breach is given by Prax to
New Land or CHL, as may be applicable, or if assurances of cure reasonably
acceptable to Prax are not provided by New Land and CHL in such
period;
(d) by Prax
effective upon the delivery of written notice to New Land and CHL, if (i) the
Land Acquisition Costs exceed, or are reasonably anticipated to exceed,
RMB320,000,000; (ii) the land use of the Target Land as indicated in the
documents issued by Xi’an LRB for the purpose of the Action (collectively, the
“Auction
Documents”) is not residential use; (iii) the site area of the Target
Land as indicated in the Auction Documents is less than 196,400 square meters
and/or the permitted maximum gross floor area of the Target Land as indicated in
the Auction Documents is less than 651,785 square meters; (iv) the term of the
granted land use rights in respect of the Target Land as indicated in the
Auction Documents is less than 70 years; or (v) in Prax’s reasonable opinion,
other terms and conditions applicable to the Target Land as set forth in the
Auction Documents are not satisfactory to Prax;
(e) by Prax
effective upon the delivery of written notice to New Land and CHL, if the
Auction does not occur prior to November 30, 2008 (or such later date as may be
approved by Prax in its sole discretion);
(f) by any of
the Parties effective upon the delivery of written notice to the other Parties,
if the Project Company Conditions Precedent have not been satisfied (or waived
by the Party or Parties benefited thereby) within thirty (30) days (or such
longer period as may be approved by Prax in its sole discretion) following the
date on which the documents for the Auction have been officially released by the
Xi’an LRB;
(g) by Prax
effective upon the delivery of written notice to New Land and CHL, if the
Project Company Governmental Approvals have not been obtained within forty-five
(45) days (or such longer period as may be approved by Prax in its sole
discretion) following the date on which New Land and the HK SPV are recognized
by the Xi’an LRB as the prevailing parties at the Auction; or
11
(h) by any of
the Parties effective upon the delivery of written notice to the other Parties,
if the Capital Contribution Conditions Precedent have not been satisfied (or
waived by the Party or Parties benefited thereby) within thirty (30) days (or
such longer period as may be approved by Prax in its sole discretion) following
the date on which the Project Company Governmental Approvals have not been
obtained.
5.2 Consequences of
Termination. If this Agreement is terminated as provided in
Section 5.1 above, this
Agreement and the Transaction Documents shall become null and void, and be of no
further force and effect, except that the Parties shall continue to be bound by
the provisions of Articles VIII, IX and X of this Agreement. Further,
if this Agreement is terminated for any reason other than the cause specified in
Section 5.1(b) of this Agreement, CHL and New Land, jointly and severally,
shall indemnify, defend and hold Prax and the HK SPV harmless from and against
any and all Losses (as defined in Section 7.1 below) arising from or
related to the Auction, the Target Land or the HK SPV’s actual or alleged status
as a bidder for the Target Land. Nothing in this Section shall be
deemed to release any Party from any liability for any breach of this Agreement
first arising, occurring or accruing prior to the date of such
termination. Provided that both (a) the Funded Auction Deposit has
been paid or otherwise funded by New Land and (b) New Land and the HK SPV
are recognized by the Xi’an LRB as the prevailing parties at the Auction, if
this Agreement is terminated by Prax for any reason other than the cause
specified in Sections 5.1, 10.15 and 10.16, Prax shall pay the US$ equivalent of
RMB20,000,000 (which US$ equivalent shall be determined using the medium rate
between RMB and US$ as announced by the PBOC on the Business Day immediately
preceding the date on which Prax pays such amount) to CHL within seven (7)
Business Days following Prax’s receipt of CHL’s written request for such
payment.
Article
VI.
REPRESENTATIONS AND
WARRANTIES
6.1 By CHL and New
Land. CHL and New Land, jointly and severally, represent and
warrant to Prax as of the date of this Agreement and as of Project Company
Delivery Date and the Capital Contribution Delivery Date as
follows:
(a) CHL, New
Land and their affiliates who are parties to Transaction Documents are duly
organized, validly existing and in good standing under the Laws of the
jurisdictions in which they are organized.
(b) The
execution, delivery and performance of this Agreement and the Transaction
Documents to which CHL, New Land and their affiliates are parties:
(i) are
within the organizational powers of CHL, New Land, and their affiliates, have
been duly authorized by all necessary action, and do not and will not contravene
any Laws applicable to it or materially convene any contractual restriction
binding on or affecting CHL, New Land and their affiliates;
(ii) except
for the approval by the Shaanxi DOC in respect of the Joint Venture Agreement
and the Project Company Articles of Association, do not require any other
approval, authorization, license, exemption from, consent of, or filing with,
any governmental agency or authority, court or any other third party except for
those which have been duly obtained or made and are in full force and effect,
and are not, and will not be, in contravention of the terms of the
organizational documents (or any amendment thereof) of CHL, New Land or their
affiliates;
12
(iii) will not
conflict with or result in any breach or contravention of or the creation of any
lien under any agreement, instrument or undertaking to which CHL, New Land or
any of their affiliates is a party or by which any of CHL, New Land or their
affiliates is bound; and
(iv) are and
will be valid and legally binding obligations of CHL, New Land and their
affiliates, enforceable against CHL, New Land and their affiliates in accordance
with the terms hereof or thereof, except (A) as limited by bankruptcy,
insolvency, reorganization or similar Laws relating to or affecting generally
the enforcement of creditors’ rights and (B) the Joint Venture Agreement
and the Project Company Articles of Association shall not be valid and binding
until approved by the Shaanxi DOC.
(c) There is
no action, suit, arbitration, investigation or proceeding pending, or to the
knowledge of CHL or New Land, threatened or contemplated against either CHL, New
Land or their affiliates, before any court or administrative agency nor is any
substantial basis for any such litigation known to exist, which either questions
the legality, validity or propriety of this Agreement or any other Transaction
Documents or the transactions contemplated hereunder or thereunder, or could
materially affect their ability to carry out their obligations hereunder or
thereunder.
(d) CHL, New
Land and their affiliates have complied, and are in compliance in all material
respects, with all applicable Laws, decrees and other similar documents and
instruments of all courts and governmental authorities, bureaus and agencies,
domestic and foreign, the non-compliance with which could have a material
adverse effect on the business, operations, financial condition or properties of
CHL, New Land, the HK SPV, the Project Company or any of their respective
affiliates, or on the ability of CHL, New Land and their affiliates to perform
their obligations under this Agreement and the other Transaction
Documents.
Except as
otherwise expressly set forth herein, the representations and warranties set
forth in Sections 6.1 shall be continuing and shall survive the Capital
Contribution Delivery Date for a period of five (5) years.
6.2 By
Prax. Prax represents and warrants to CHL and New Land as of
the date of this Agreement and as of the Project Company Delivery Date and the
Capital Contribution Delivery Date as follows:
(a) Prax is
duly organized, validly existing and in good standing under the Laws of the
jurisdictions in which it is organized.
(b) The
execution, delivery and performance of this Agreement and the Transaction
Documents to which Prax is a party:
13
(i) are
within the organizational powers of Prax, have been duly authorized by all
necessary action, and do not and will not contravene any Laws applicable to it
or materially convene any contractual restriction binding on or affecting
Prax;
(ii) except
for the approval by the Shaanxi DOC in respect of the Joint Venture Agreement
and the Project Company Articles of Association, do not require any other
approval, authorization, license, exemption from, consent of, or filing with,
any governmental agency or authority, court or any other third party except for
those which have been duly obtained or made and are in full force and effect,
and are not, and will not be, in contravention of the terms of Prax’s
organizational documents or any amendment thereof;
(iii) will not
conflict with or result in any breach or contravention of or the creation of any
lien under any agreement, instrument or undertaking to which Prax is a party or
by which Prax is bound; and
(iv) are and
will be valid and legally binding obligations of Prax, enforceable against Prax
in accordance with the terms hereof or thereof, except (A) as limited by
bankruptcy, insolvency, reorganization or similar Laws relating to or affecting
generally the enforcement of creditors’ rights and (B) the Joint Venture
Agreement and the Project Company Articles of Association shall not be valid and
binding until approved by the Shaanxi DOC.
(c) There is
no action, suit, arbitration, investigation or proceeding pending, or to the
knowledge of Prax, threatened or contemplated against Prax, before any court or
administrative agency nor is any substantial basis for any such litigation known
to exist, which either questions the legality, validity or propriety of this
Agreement or any other Transaction Documents or the transactions contemplated
hereunder or thereunder, or could materially affect its ability to carry out its
obligations hereunder or thereunder.
(d) Prax has
complied, and is in compliance in all material respects, with all applicable
Laws, decrees and other similar documents and instruments of all courts and
governmental authorities, bureaus and agencies, domestic and foreign,
non-compliance with which could have a material adverse effect on the business,
operations, financial condition or properties of Prax or any of its affiliates,
or on the ability of Prax to perform its obligations under this Agreement and
the other Transaction Documents.
Article
VII.
INDEMNIFICATION
7.1 Indemnification by
CHL. CHL shall indemnify and hold Prax harmless from and
against any and all losses, claims, liabilities, damages and costs and expenses
(including without limitation reasonable legal fees and litigation expenses)
incurred (collectively, “Losses”) in
connection with or arising from, in whole or in part, any breach by CHL and/or
New Land of any representation, warranty, covenant or undertaking in this
Agreement or the Transaction Documents, or of their respective obligations
arising from or in connection with the transactions contemplated by the
Transaction Documents.
14
7.2 Indemnification by New
Land. New Land shall indemnify and hold Prax harmless from and
against any Losses in connection with or arising from, in whole or in part, any
breach by New Land of any representation, warranty, covenant or undertaking in
this Agreement or the Transaction Documents, or of their respective obligations
arising from or in connection with the transactions contemplated by the
Transaction Documents.
7.3 Indemnification by
Prax. Prax shall indemnify and hold CHL and New Land harmless
from and against any Losses in connection with or arising from, in whole or in
part, any breach by Prax of any representation, warranty, covenant or
undertaking in this Agreement or the Transaction Documents, or of their
respective obligations arising from or in connection with the transactions
contemplated by the Transaction Documents.
Article
VIII.
CONFIDENTIALITY
8.1 Scope of
Obligation. In consideration of the mutual covenants of the
Parties herein, each Party hereto agrees to keep strictly private and
confidential and under no circumstances disclose to any person or entity which
is not a party hereto or an affiliate thereof, the terms of this Agreement, all
proprietary, confidential and any information obtained from the other Party or
arising from or in connection with this Agreement or the transactions
contemplated under this Agreement, including, but not limited to, the terms in
or the arrangements and all other matters contemplated under this Agreement
(collectively, “Confidential
Information”), unless disclosure of the Confidential Information is to
their respective professional advisors or to their potential investors or
lenders on condition that this same confidentiality undertaking as herein is
imposed on such advisers, potential investors or lenders or unless expressly
permitted by prior written consent of the other party.
8.2 Precautions. The
Parties hereto agree to take all necessary precautions, to keep secret the
Confidential Information and to restrict its uses to the uses permitted
hereunder.
8.3 Affiliated
Parties. Each Party shall take all necessary steps to ensure
that it and its affiliates’ directors, officers and employees will comply in all
respects with this confidential undertaking.
8.4 Exclusions. Notwithstanding
the foregoing, in relation to any Party, the confidentiality obligation shall
not apply to:
(a) any
information obtained from any party hereto which becomes generally known to the
public, other than by reason of any breach of confidentiality obligations,
willful or negligent act or omission of any Party hereto or its affiliates or
any of their employees or professional advisors;
(b) any
information which is, at the time of disclosure, already legally in the
possession of any Party or its affiliates to which such information is
furnished;
(c) any
information which is required to be disclosed by any Party pursuant to any
applicable legal requirement or legal process issued by any court or any
competent government authority or rules or regulations of any relevant body
provided that such Party shall have first, to the extent reasonably practicable
and legally permissible, advised the other Parties of the requirement to
disclose such information and shall have afforded the other Parties an
opportunity to dispute such requirement and seek relief therefrom by legal
process; or
15
(d) any
information which is developed by a Party independent of, and without reliance
upon, any Confidential Information.
Notwithstanding
the foregoing, neither CHL nor New Land, or any of their respective affiliates,
may issue a press release or otherwise disclose to any other person the terms
and conditions of this Agreement or the other Transaction Documents or the
transactions contemplated under this Agreement or any other Transaction
Documents without the prior written consent of Prax, which consent may be
withheld in the sole and absolute discretion of Prax.
8.5 Acknowledgment. CHL
and New Land each hereby acknowledges and covenants that it has the right to
supply the Confidential Information to Prax and the supply of the Confidential
Information to, and the receipt and use of such Confidential Information by,
Prax will not infringe upon any rights held by any third party, involve the
unauthorized use of confidential information belonging to a third party or
result in a breach by CHL, New Land or any of their respective affiliates or
subsidiaries of any law, regulation or fiduciary duty owed to any third party,
intellectual property rights or agreement.
8.6 Duration. The
confidentiality obligations in this Agreement shall continue to be in full force
and effect until the earlier of (a) twelve (12) months from the date
hereof or (b) the execution and delivery of the Transaction Documents by
the Parties.
Article
IX.
NOTICES
9.1 Notices. Any
notice required to be given hereunder to any of the Parties shall be in writing
in Chinese (unless otherwise specifically required by this Agreement or any
applicable Transaction Documents to be given in English) and shall be delivered
in person or sent by an internationally recognized courier or by facsimile and,
each such notice shall be copied to each other relevant Parties. Any
notice sent by courier as provided above shall be deemed to have been given,
made or served two (2) Business Days after dispatch to each relevant
Party. Any notice sent by facsimile as provided in this paragraph
shall be deemed to have been given, made or served to each relevant Party at the
time shown in the transmission report; provided that if the time shown in the
transmission report is after 5:00 p.m. (China time) on any day, such notice
shall be deemed to be given, made or served at 10:00 a.m. (China time) on
the next succeeding Business Day. Any notice, report or other
communication given hereunder shall be addressed to the relevant Party and, if a
copy is required to be given to any other Party, to such other Party, as
follows:
16
|
(a)
|
If
to New Land:
|
6
Youyi Xxxx Xx, Xxx Xxxx 4 Xxx
|
|
Xi’an,
Shaanxi
|
||
|
P.
R. China 710054
|
||
|
Attention:
Xx. Xx Jing
|
||
|
Facsimile:
(00-00) 0000-0000
|
||
|
with
copy to:
|
DLA
Piper LLP (US)
|
|
|
0000
Xxxxxx xx xxx Xxxxxxxx
|
||
|
Xxx
Xxxx, Xxx Xxxx 00000
|
||
|
Attention: Xxxxx
Xxxxx, Esq.
|
||
|
Facsimile:x0
(000) 000-0000
|
||
|
(b)
|
If
to CHL:
|
c/o
Xi’an New Land
Development Co., Ltd.
|
|
6
Youyi Xxxx Xx, Han Yuan 4 Xxx
|
||
|
Xi’an,
Shaanxi
|
||
|
P.
R. China 710054
|
||
|
Attention:
Xx. Xx Jing
|
||
|
Facsimile:
(00-00) 0000-0000
|
||
|
with
copy to:
|
DLA
Piper LLP (US)
|
|
|
0000
Xxxxxx xx xxx Xxxxxxxx
|
||
|
Xxx
Xxxx, Xxx Xxxx 00000
|
||
|
Attention: Xxxxx Xxxxx, Esq.
|
||
|
Facsimile:x0
(000) 000-0000
|
||
|
(c)
|
If
to Prax:
|
x/x
Xxxx Xxxxxxx
|
|
Xxxxx
0000, Xxxx Xx Plaza
|
||
|
000
Xxxx Xxx Xxxxx Xxxx
|
||
|
Xxxxxxxx,
000000
|
||
|
Xxxxx
|
||
|
Attention:
Xxxxxx Xxx
|
||
|
Facsimile:
(00-00) 0000-0000
|
||
|
with
copy to:
|
Paul,
Hastings, Xxxxxxxx & Xxxxxx XXX
|
|
|
00/X,
Xxxx Xxxxx
|
||
|
0000
Xxxxxxx Xxxx Xxxx
|
||
|
Xxxxxxxx,
000000
|
||
|
Xxxxx
|
||
|
Attention: Xxxxx
Xxxxxxxxxx, Esq.
|
||
|
Facsimile: (00-00)
0000-0000
|
Article
X.
GENERAL
PROVISIONS
10.1 Governing
Law. This Agreement shall be interpreted, construed, applied
and enforced in accordance with the Laws of Hong Kong.
17
10.2 Dispute
Resolution. In the event of any dispute arising from or in
connection with this Agreement, the Parties shall attempt to resolve the dispute
through friendly consultations. In the event that satisfactory
resolution is not reached within thirty (30) days after commencement of such
consultations, the dispute shall be submitted to resolution by arbitration
before China International Economic and Trade Arbitration Commission (“CIETAC”), Shanghai
Sub-Commission in accordance with the CIETAC Arbitration Rules presently in
force. There shall be a single arbitrator. If the Parties
do not agree to appoint an arbitrator who has consented to participate within
twenty (20) days after the issuance of a notice of arbitration by any Party, the
relevant appointment shall be made by CIETAC Shanghai
Sub-Commission. Any proceedings shall take place in Shanghai and be
conducted in Chinese. The arbitral award shall be final and binding
upon all Parties. If any Party obtains an arbitration award against
any of the other Parties in connection with a dispute arising from or in
connection with this Agreement, such Party shall be entitled to cover its costs
and reasonable attorney’s fees (including the reasonable value of in-house
attorney services) and disbursements incurred in connection therewith and in any
appeal or enforcement proceeding thereafter, in addition to all other
recoverable costs, as determined by the arbitrator.
10.3 Governing
Language. This Agreement is written in both English and
Chinese languages. Both versions shall be equally valid and effective
but, in the event of inconsistency between the two versions, the English version
shall prevail.
10.4 Amendment; Modification;
Waiver. No amendment, modification or waiver of any provision
of this Agreement, shall in any event be effective unless and until the Parties
reach mutual agreement in writing.
10.5 Severability. If
one or more of the provisions of this Agreement is for any reason held invalid
or unenforceable, such provisions shall be deemed severable from the remaining
provisions of this Agreement and such invalidity or unenforceability shall in no
way affect the validity or enforceability of such remaining provisions or the
rights of any Parties.
10.6 Rights Cumulative;
Waivers. The rights of each of the Parties under this
Agreement are cumulative and may be exercised as such Party considers
appropriate. The rights of each of the Parties pursuant to this
Agreement shall not be capable of being waived or varied otherwise than by an
expressed waiver or variation in writing. Any failure to exercise or
any delay in exercising any of such rights shall not operate as a waiver or
variation of that or any other such right.
10.7 Drafting
Presumption. This Agreement shall be construed fairly as to
each Party regardless of which Party drafted it. Each of the Parties
acknowledges and agrees that each of them played a significant and essential
role in the review and completion of this Agreement.
10.8 Further
Assurances. Each of the Parties shall execute and deliver such
other documents and to take such other action as may be necessary or convenient
to consummate the purpose and subject matter of this Agreement.
18
10.9 No
Recourse. Notwithstanding any provision of this Agreement to
the contrary, the Parties agree that none of them nor any person acting on their
behalf may assert any claim or cause of action against any officer, director,
shareholder, controlling person, manager, member, partner, employer, agent,
representative, or affiliate of any other Party (except for such Party itself
and the liabilities of CHL under the Guarantee) or their respective officers,
directors, shareholders, controlling persons, managers, members, partners,
employees, agents, or representatives in connection with, arising out of, or
relating to this Agreement, the Transaction Documents, or the transactions
contemplated hereunder or thereunder.
10.10 Attorneys’
Fees. In the event that any Party seeks to enforce its rights
under this Agreement, the prevailing Party or Parties shall be entitled to
recover from the non-prevailing Party or Parties its/their court costs,
arbitration expenses, if any, and reasonable attorneys’ fees and disbursements
incurred in connection therewith and in any appeal or enforcement proceeding
thereafter, in addition to all other recoverable costs as determined by the
court or arbitrator.
10.11 Assignment; Binding
Effect. No Party may assign this Agreement or its rights or
obligations under this Agreement and the Transaction Documents without the prior
written consent of the other Parties; provided, however, Prax may assign this
Agreement, any of the Transaction Documents and any of its rights or obligations
under this Agreement or the Transaction Documents to any person or party
Controlled by, under common Control with or Controlling Prax. As used
herein, “Control” shall mean
with respect to any specified person or party the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership or voting of securities,
by contract or otherwise, and the terms “Controlling”, “Controlled” and
“under common Control
with” have meanings correlative to the foregoing. Subject to
the provisions of this Section, this Agreement is binding upon and inures to the
benefit of each Party hereto and their respective successors and
assigns.
10.12 Counterparts. This
Agreement may be executed in as many counterparts as required. All
counterparts together collectively shall constitute a single
agreement.
10.13 Consent. With
respect to any matter where the consent or approval of a Party shall be required
hereunder, such consent or approval may be granted or withheld in the sole and
absolute discretion of such Party, subject to the terms of this
Agreement.
10.14 Costs and
Fees. Subject to the provisions of Section 2.3 of this
Agreement, each Party shall pay its own fees and expenses in connection with the
negotiation and execution of this Agreement and the Transaction Documents and
the completion of the transactions contemplated by this Agreement.
10.15 Force
Majeure.
(a) Scope of Force
Majeure. Force majeure includes, but is not limited to, acts
of God, war, terrorism, civil commotion, riot, blockade or embargo, delays of
carriers, fire, explosion, labor dispute, casualty, accident, earthquake,
epidemic, flood, windstorm, or by reason of any law, order, proclamation,
regulation, ordinance, demand, expropriation, requisition or requirement or any
other act of any governmental authority, including military action, court
orders, judgments or decrees, or any other cause beyond the reasonable control
of the affected Party, whether or not foreseeable.
19
(b) Notice. Should
any Party be prevented from performing the terms and conditions of this
Agreement due to the occurrence of any force majeure event, the prevented Party
shall send notice to the other Parties within fourteen (14) days from the
occurrence of the force majeure event stipulating the occurrence thereof and
stating in the notice that such event is an event of force majeure.
(c) Performance. Any
delay or failure in performance of this Agreement caused by a force majeure
event shall not constitute default by the prevented Party or give rise to any
claim for damage, losses or penalties. Under such circumstances, the
Parties are still under an obligation to take reasonable measures to perform
this Agreement, so far as is practical. The prevented Party shall
send notice to the other Party as soon as possible of the elimination of the
force majeure event, and the other Party shall confirm receipt of such
notice.
(d) Consultations. Should
the force majeure event continue to delay implementation of this Agreement for a
period of more than three (3) months, the Parties shall, through consultations,
decide whether to terminate or amend this Agreement.
10.16 Change of
Law. If any Party cannot perform any of its obligations
hereunder, or is adversely and materially affected due to the promulgation of
any new Laws of the PRC or the amendment or interpretation of any existing Laws
of the PRC after the date of this Agreement (each, a “Change of Law”), the
Parties shall promptly consult with each other and use their best endeavors to
implement any necessary adjustments to cause each Party to perform their
respective obligations to the greatest extent, and to maintain their respective
economic benefits derived from this Agreement on a basis no less favorable than
the economic benefits it would have derived if such laws, rules or regulations
had not been promulgated or amended or so interpreted.
10.17 Anti-Corruption
Laws. In connection with this Agreement and the obligations to
be performed by the Parties hereunder, no Party has, and no Party will, make,
offer, promise, agree to make or authorize any payment or transfer of anything
of value, directly or indirectly, to (a) any government official,
(b) any political party, party official or candidate, (c) any person
while knowing or having reason to know that all or a portion of the value so
transferred will be offered, given or promised, directly or indirectly, to
anyone described in subparts (a) or (b) of this Section, (d) any owner,
director, employee, representative or agent of any actual or potential customer
of any Party, (e) any director, employee, representative of any Party or
any of its affiliates, or (f) any other person or entity, if such payment
or transfer would violate any Anti-Corruption Laws. The Parties
acknowledge and agree that the provision of reasonable and customary meals and
entertainment in the normal course of business or the giving of business
mementos of nominal value shall not be a breach of this Section. Each
Party shall immediately notify the other Party of any request that such Party or
any of its officers, directors, employees, shareholders, members, agents or
affiliates, acting on its behalf, receives to take any action that may violate
any Anti-Corruption Laws. As used in this Agreement, the term “Anti-Corruption Laws”
shall mean (i) the U.S. Foreign Corrupt Practices Act of 1977, as amended,
and its purposes, (ii) all other anti-corruption Laws applicable to the
Parties (including all bribery and anti-money laundering Laws), and
(iii) all Laws of the PRC (including all notices, decrees and decisions)
concerning bribery and anti-corruption issues.
20
10.18 Entire
Agreement. This Agreement and the Transaction Documents
collectively embody the entire agreement with respect to the subject matter
covered by this document and understanding between the Parties and collectively
supersede all prior agreements and understandings between the Parties relating
to the subject matter hereof.
10.19 Exclusivity. In
consideration for the effort and expense that will be required to conduct the
due diligence and to negotiate and finalize the relevant Transaction Documents,
CHL and New Land agree that until this Agreement has been terminated by a Party
expressly in accordance with the terms of this Agreement, CHL and New Land will
not, and will cause their affiliates and their directly and indirectly owned or
controlled subsidiaries not to (and will not authorize or permit any of their
respective representatives to) take, directly or indirectly, any action to
initiate, assist, solicit, receive, negotiate, encourage or accept any offer or
inquiry from any person to jointly bid or invest, to purchase or to finance any
interest, direct or indirect, in the Target Land or any transaction that has the
impact of conferring such rights or otherwise frustrating the transactions
contemplated herein.
10.20 Governing
Law. This Agreement shall be governed by and construed in
accordance with the Laws of Hong Kong, without reference to its conflicts of law
principles.
10.21 Language. This
Agreement shall be executed in English and Chinese. Both the English
and Chinese versions shall be given equal weight in the interpretation of this
Agreement. If there is any discrepancy between the English version
and the Chinese version, the English version shall prevail.
[Signature
Page Follows]
21
This
Agreement has been executed by the duly authorized representatives of the
Parties on the date and year first above written.
NEW
LAND:
XI’AN NEW LAND DEVELOPMENT CO.,
LTD. (Company Chop)
By:
Name: 鲁平纪 (Lu
Pingji)
Title: Chairman of Board
CHL:
CHINA
HOUSING AND LAND DEVELOPMENT, INC.
By:
Name:
鲁平纪 (Lu
Pingji)
Title:
Chairman of Board
PRAX:
PRAX
CAPITAL REAL ESTATE HOLDING LIMITED
By:
Name:
姚继平 (Xxx,
Xxx-Ping)
Title:
Director
S-1
APPENDIX
1
DESCRIPTION AND DEPICTION OF
PROJECT LAND
|
Location:
|
Xi’an
Baqiao Technology Industrial Park (西安灞桥科技产业园)
|
|
Plot
Number:
|
Plot
BQ2-99-33
|
|
Boundaries:
|
East: Baqiao
District Watercourse Management Station of
Xi’an
|
|
|
West: Baqiao
District Watercourse Management Station of Xi’an and Chaima
Village
|
|
|
North: Xx
Xxx Express Way
|
|
|
South: Xi’an
Water Supply Company
|
|
Land
Area:
|
196,400
square meters
|
|
Land
Nature:
|
State-owned
Land
|
[Depiction
To Be Attached]
App.
1
APPENDIX
2
INDEX OF DEFINED
TERMS
|
Agreement
|
1
|
Land
Grant Contract
|
3
|
|
|
Anti-Corruption
Laws
|
21
|
Laws
|
2
|
|
|
Approved
Budget and Business Plan
|
4
|
Losses
|
15
|
|
|
Auction
|
2
|
New
Land
|
1
|
|
|
Auction
Documents
|
12
|
Onshore
Financing
|
7
|
|
|
Budget
and Business Plan
|
4
|
Parties
|
1
|
|
|
Business
Day
|
2
|
Party
|
1
|
|
|
Capital
Contribution Conditions Precedent
|
8
|
PBOC
|
2
|
|
|
Capital
Contribution Delivery Date
|
9
|
Prax
|
1
|
|
|
Change
of Law
|
21
|
Prax
Capital Contribution Deliverables
|
10
|
|
|
CHL
|
1
|
Prax
Project Company Deliverables
|
6
|
|
|
CHL/New
Land Capital Contribution Deliverables
|
10
|
PRC
|
1
|
|
|
CHL/New
Land Project Company Deliverables
|
6
|
Project
|
4
|
|
|
Confidential
Information
|
16
|
Project
Company
|
1
|
|
|
Control
|
20
|
Project
Company Articles of Association
|
6
|
|
|
Cost
Ceiling
|
3
|
Project
Company Conditions Precedent
|
4
|
|
|
Funded
Auction Deposit
|
2
|
Project
Company Delivery Date
|
5
|
|
|
Funded
Pre-Construction Costs
|
7
|
Project
Company Governmental Approvals
|
6
|
|
|
Funded
Preparation Fee
|
7
|
Registered
Capital Ceiling
|
8
|
|
|
Guarantee
|
11
|
|
SAFE
|
3
|
|
HK
SPV
|
1
|
Shaanxi
DOC
|
6
|
|
|
HK
SPV Amended and Restated Memorandum and Articles of
Association
|
10
|
Shareholders’
Agreement
|
9
|
|
|
1
|
Subscription
Agreement
|
10
|
||
|
Joint
Venture Agreement
|
5
|
|
Target
Land
|
1
|
|
Land
Acquisition Cost
|
3
|
Target
Registered Capital
|
8
|
|
|
Transaction
Document
|
11
|
|||
|
Transaction
Documents
|
11
|
|||
|
Xi’an
LRB
|
2
|
App. 2 -
1
EXHIBIT
A
JOINT VENTURE
AGREEMENT
[To
Be Attached]
Exh.
A
EXHIBIT
B
PROJECT COMPANY ARTICLES OF
ASSOCIATION
[To
Be Attached]
Exh.
B
EXHIBIT
C
SHAREHOLDERS’
AGREEMENT
[To
Be Attached]
Exh.
C
EXHIBIT
D
SHARE SUBSCRIPTION
AGREEMENT
[To
Be Attached]
Exh.
D
EXHIBIT
E
HK SPV AMENDED AND RESTATED
MEMORANDUM
AND ARTICLES OF
ASSOCIATION
[To
Be Attached]
Exh.
E
EXHIBIT
F
DEED OF
GUARANTEE
[To
Be Attached]
Exh.
F
