Confidential March 6 , 2008 Abax Lotus Ltd. c/o Abax Global Capital (Hong Kong) Limited Suite 6708, 67/F Two International Finance Centre
March
6 ,
2008
Abax
Lotus Ltd.
c/o Abax
Global Capital (Hong Kong) Limited
Suite
6708, 67/F Two International Finance Centre
0 Xxxxxxx
Xxxxxx
Central,
Hong Kong SAR
CCIF
Petrol Limited
Kingston
Xxxxxxxx, PO Box 173
Road
Town, Tortola,
British
Virgin Islands
Re:
Indenture dated as of September 28, 2007, by and among Sinoenergy Corporation, a
Nevada corporation (the “Company”), DB Trustees (Hong Kong) Limited, as
Trustee, Deutsche Bank AG, Hong Kong Branch as Paying Agent, DB Trustees (Hong
Kong) Limited as Collateral Agent and Deutsche Bank AG, Hong Kong Branch as
Conversion Agent (the "Indenture”),
relating to the issue of 3.0% Guaranteed Senior Convertible Notes due 2012 (the
“Notes”)
Ladies
and Gentlemen:
In this
agreement (this “Agreement”),
capitalized terms used but not defined herein have the respective meanings
assigned to them in the Indenture. Pursuant to Section 14.05(i) of the
Indenture, the Company is required to adjust the Conversion Rate upon occurrence
of a Financial and Operational Trigger that is found upon completion of the
Company’s annual audit. In order to avoid any adjustment to the Conversion Rate
by reason of any Financial and Operational Trigger that may be found to have
occurred for the twelve-month period ending December 31, 2007, Skywide Capital
Management Limited (“Skywide”)
proposes to pay to Abax Lotus Ltd. (“Abax”) the sum of US$400,000 and CCIF Petrol Limited
(“CCIF”)
the sum of US$200,000 (collectively, the “Waiver
Payments”), but payment to Abax or CCIF, as the case may be, shall
be made only on the condition that Abax or CCIF, as the case may be, executes
and delivers to the Trustee for the Notes the Waiver in the form attached hereto
as Exhibit
A.
Skywide’s
proposal is not based on whether or not a Financial and Operational Trigger has
actually occurred, but rather on the basis of avoiding any potential application
of the adjustment to the Conversion Rate and is made to induce Abax and CCIF to
execute the Waiver.
In
consideration of Abax and CCIF executing and delivering the Waiver, Skywide
promises to promptly pay within 5 business days of demand therefor all costs
and
1
expenses
(which, together with the Waiver Payments, is referred to herein as the “Investor
Amounts”), including without limitation, fees and
disbursements of counsel to Abax and CCIF, incurred in connection with the
preparation, review, execution, delivery, performance and enforcement of rights
and remedies in connection with this Agreement, the Waiver and the transactions
arising therefrom or relating thereto.
Skywide
promises to pay the Waiver Payments by wire transfer in immediately available
funds to both Abax and CCIF on or before December 1, 2008, except if required
sooner as expressly described below. If Skywide defaults in paying any Investor
Amounts, interest on defaulted amounts (and, to the extent lawful, on overdue
installments of interest) shall accrue at a rate that is equal to LIBOR + 5.0%
per annum.
Until
Abax’s and CCIF’s actual receipt in full of their respective Investor
Amounts:
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(i)
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Skywide
shall not sell, assign, transfer, pledge, hypothecate, or otherwise
encumber or dispose of in any way, including, without limitation, through
a deed of trust, deposit arrangement, security interest, lien, charge,
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, all or any part of or any
interest in the common stock of the Company, now or hereafter owned or
acquired by Skyline. Any sale, assignment, transfer, pledge, hypothecation
or other encumbrance or disposition of the common stock of the Company now
or hereafter owned or acquired by Skyline, not made in conformity with
this Agreement, shall be null and void and cause the Waiver Payments to
become immediately due and payable;
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(ii)
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Skywide
shall procure from the Company’s transfer agent physical certificates
representing all shares of the Company’s common stock owned by Skywide and
shall deliver any and all physical share certificates of the common stock
of the Company issued to it by the Company to Abax until such time as all
respective Investor Amounts have been paid by Skywide and actually
received by Xxxx and CCIF. Upon actual receipt of all respective Investor
Amounts by Abax and CCIF, Abax shall promptly return the share
certificates to Skywide.
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THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Each of the parties
hereto agrees that any suit, action or proceeding against Skywide arising out of
or based upon this Agreement or the transactions contemplated hereby may be
instituted in any State or U.S. federal court in The City of New York and County
of New York, and waives any objection which it may now or hereafter have to the
laying of venue of any such proceeding, and irrevocably submits to the
non-exclusive jurisdiction of such courts in any suit, action or proceeding.
Skywide hereby appoints Law Debenture Corporate Services Inc., 000 Xxxxxxx
Xxxxxx, Xxxxx 0X, Xxx Xxxx, XX 00000, Facsimile No. +1
2
000 000
0000, as its authorized agent upon whom process may be served in any suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated herein. The parties hereto each hereby waive any right
to trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Agreement. Neither Abax nor CCIF shall be precluded by the
foregoing from pursuing remedies in any other appropriate
jurisdiction.
Please
confirm that the foregoing correctly sets forth the agreement among us by
executing a copy of this Agreement and returning it to us.
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Very
truly yours,
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| SKYWIDE CAPITAL MANAGEMENT LIMITED | |||
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By:
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Name:
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Title:
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Accepted
and Agreed:
ABAX
LOTUS LTD.
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By:
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Name:
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Title:
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Authorized
Signatory
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CCIF
PETROL LIMITED
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By:
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Name:
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Title:
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Authorized
Signatory
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3
EXHIBIT A
Sinoenergy
Corporation
1603-1604,
Tower B Fortune Centre Ao City
Beiyuan
Road, Chaoyang District
Beijing,
P.R. China 100107
DB
Trustees (Hong Kong) Limited
00xx
Xxxxx, Xxxxxx Xxxx Center
0 Xxxxx’x
Xxxx Xxxxxxx Xxxx Xxxx
RE: Waiver by the Holders of
US$14,000,000 Guaranteed Senior Convertible Notes Due 2012 (the “Waiver”)
Ladies
and Gentlemen:
Reference
is hereby made to the US$14,000,000 in aggregate principal amount of Guaranteed
Senior Convertible Notes due 2012 (the “Notes”)
issued by Sinoenergy Corporation, a Nevada corporation (the “Company”),
pursuant to an indenture dated September 28, 2007 (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the “Indenture”),
by and between the Company, Sinoenergy Holding Limited, a British Virgin Islands
corporation as a guarantor, DB Trustees (Hong Kong) Limited, as trustee and
collateral agent, and Deutsche Bank AG, Hong Kong Branch, as paying agent and
conversion agent, pursuant to which the Company has agreed to exchange common
stock par value US$.001 of the Company, for the Notes on the terms and
conditions set forth in the Indenture. For the purposes of this Waiver, all
capitalized terms used herein without definition shall have the respective
meanings set forth or referred to in the Indenture.
Subject
to the conditions set forth in this Waiver and otherwise notwithstanding the
provisions of the Indenture, we, as the holders of all of the aggregate
principal amount of outstanding Notes, hereby agree to waive the adjustment of
the Conversion Rate which is otherwise required pursuant to Section 14.05(i) of
the Indenture due to the occurrence of a Financial and Operational Trigger for
the twelve-month period ending December 31, 2007. No Waiver is otherwise granted
with respect to any Financial and Operational Trigger, other than that relating
to the twelve-month period ending December 31, 2007.
This
Waiver and all matters arising out of or relating to this Waiver shall be
governed by and construed in accordance with the laws of the State of New York
without giving effect to conflicts of law principles. This Waiver may be signed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument. Either party may enter into this Waiver by signing any
such counterpart and each counterpart shall be as valid and effectual as if
executed as an original.
This
Waiver (or any portion hereof) shall not be deemed to be superseded by any other
letter or documentation, unless such letter or documentation is executed by the
parties hereto and expressly makes reference to this Waiver and states that this
Waiver (or specific portion hereof) is superseded thereby.
[Remainder
of Page Intentionally Left Blank]
4
EXHIBIT
A
IN
WITNESS WHEREOF, the undersigned have caused this Waiver to be executed and
delivered as of the date first above written.
ABAX
LOTUS LTD.
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By:
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Name:
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Title:
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Authorized
Signatory
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CCIF
PETROL LIMITED
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By:
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Name:
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Title:
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Authorized Signatory | |
5
Sinoenergy
Corporation
1603-1604,
Tower B Fortune Centre Ao City
Beiyuan
Road, Chaoyang District
Beijing,
P.R. China 100107
DB
Trustees (Hong Kong) Limited
00xx
Xxxxx, Xxxxxx Xxxx Center
0 Xxxxx’x
Xxxx Xxxxxxx Xxxx Xxxx
RE: Waiver by the Holders of
US$14.000.000 Guaranteed Senior Convertible Notes Due 2012 (the “Waiver”)
Ladies
and Gentlemen:
Reference
is hereby made to the US$14,000,000 in aggregate principal amount of Guaranteed
Senior Convertible Notes due 2012 (the “Notes”) issued by
Sinoenergy Corporation, a Nevada corporation (the “Company”), pursuant to an indenture
dated September 28, 2007 (as amended, restated, supplemented or otherwise
modified and in effect from time to time, the “Indenture”), by and between the
Company, Sinoenergy Holding Limited, a British Virgin Islands corporation as a
guarantor, DB Trustees (Hong Kong) Limited, as trustee and collateral agent, and
Deutsche Bank AG, Hong Kong Branch, as paying agent and conversion agent,
pursuant to which the Company has agreed to exchange common stock par value
US$.001 of the Company, for the Notes on the terms and conditions set forth in
the Indenture. For the purposes of this Waiver, all capitalized terms used
herein without definition shall have the respective meanings set forth or
referred to in the Indenture.
Subject
to the conditions set forth in this Waiver and otherwise notwithstanding the
provisions of the Indenture, we, as the holders of all of the aggregate
principal amount of outstanding Notes, hereby agree to waive the adjustment of
the Conversion Rate which is otherwise required pursuant to Section 14.05(i) of
the Indenture due to the occurrence of a Financial and Operational Trigger for
the twelve-month period ending December 31, 2007. No Waiver is otherwise granted
with respect to any Financial and Operational Trigger, other than that relating
to the twelve-month period ending December 31,2007.
This
Waiver and all matters arising out of or relating to this Waiver shall be
governed by and construed in accordance with the laws of the State of New York
without giving effect to conflicts of law principles. This Waiver may be signed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument. Either party may enter into this Waiver by signing any
such counterpart and each counterpart shall be as valid and effectual as if
executed as an original.
This
Waiver (or any portion hereof) shall not be deemed to be superseded by any other
letter or documentation, unless such letter or documentation is executed by the
parties hereto and expressly makes reference to this Waiver and states that this
Waiver (or specific portion hereof) is superseded thereby.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the undersigned have caused this Waiver to be executed and
delivered as of the date first above written.
ABAX
LOTUS LTD.
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By:
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| Name: | ||
| Title: | Authorized Signatory | |
CCIF
PETROL LIMITED
| By:: | |
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Name:
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| Title: | Authorized Signatory |
