Exhibit 10.56
CONFORMED COPY
THIS FIXED AND FLOATING CHARGE is made as a deed on 3 April 2007
BETWEEN:
(1) HUAWEI-3COM CO., LIMITED, a company incorporated under the laws of Hong
Kong whose registered office is at Suites 3013-3014, 30/F One International
Xxxxxxx Xxxxxx, 0 Xxxxxxx Xxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx (the "CHARGOR");
and
(2) INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED, a limited liability
company incorporated under the laws of Hong Kong whose registered office is
at 33rd Floor, ICBC Tower, 3 Garden Road, Central, Hong Kong (in its
capacity as collateral agent, the "COLLATERAL AGENT", which expression
shall, wherever the context so admits, include such entity and all other
persons from time to time acting in such capacity).
WHEREAS:
(A) By the Facility Agreement, the Lenders have agreed to make Term Loans to
the Borrower upon the terms and subject to the conditions contained
therein.
(B) As security for the Chargor's obligations under the Facility Agreement, the
Chargor has agreed to enter into this Fixed and Floating Charge.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION AND DEFINITIONS
1.1 DEFINITIONS
In this Fixed and Floating Charge, unless the context otherwise requires:
"ACCOUNT BANK" means Industrial and Commercial Bank of China (Asia) Limited
at 00xx Xxxxx, XXXX Xxxxx, 0 Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx;
"ACCOUNTS" means the H3C Debt Service Account, the H3C Debt Service
Investment Accounts and the H3C Debt Service Reserve Account and includes
any renewal or redesignations thereof;
"BORROWER DEBT SERVICE ACCOUNT" means the US dollar interest-bearing
deposit account (number [PERSONAL INFORMATION OMITTED FOR SECURITY
PURPOSES] designated "H3C Holdings Limited") of the Borrower opened and
maintained with the Account Bank, and includes any renewal or
re-designation thereof.
"CHARGED PROPERTY" means any or all of the property, assets and undertaking
of the Chargor for the time being whatsoever and wheresoever situated,
present and future in each case expressed to be subject to the security
created under Clause 3 (Security) of this Fixed and Floating Charge;
"CONVEYANCING AND PROPERTY ORDINANCE" means the Conveyancing and Property
Ordinance (Chapter 219 of the Laws of Hong Kong);
H3C Fixed and Floating Charge
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"FACILITY AGREEMENT" means the senior secured credit and guaranty agreement
dated __________ 2007 and signed by or on behalf of, amongst others, the
Chargor and the Collateral Agent, as amended, supplemented and/or restated
from time to time in any manner whatsoever;
"H3C DEBT SERVICE ACCOUNT" means the US dollar interest-bearing deposit
account (number [PERSONAL INFORMATION OMITTED FOR SECURITY PURPOSES]
designated "Huawei-3Com Co., Limited") of the Chargor opened and maintained
with the Account Bank, and includes any renewal or re-designation thereof;
"H3C DEBT SERVICE INVESTMENT ACCOUNTS" means any account or accounts (the
designation of which includes the words "H3C Debt Service Investment
Account") of the Chargor opened and maintained with the Account Bank, which
is or are opened pursuant to section 5.21 of the Facility Agreement.
"H3C DEBT SERVICE RESERVE ACCOUNT" means the US dollar interest-bearing
deposit account (number [PERSONAL INFORMATION OMITTED FOR SECURITY
PURPOSES] designated "Huawei-3Com Co., Limited") of the Chargor opened and
maintained with the Account Bank, and includes any renewal or
re-designation thereof;
"POWERS OF ATTORNEY ORDINANCE" means the Powers of Attorney Ordinance
(Chapter 31 of the Laws of Hong Kong);
"RECEIVABLES" means all books and other debts of any nature whatsoever,
other than those represented by the Accounts;
"RECEIVER" means a receiver appointed by or on behalf of the Collateral
Agent under this Fixed and Floating Charge or pursuant to the Collateral
Agent's statutory powers, and includes more than one such receiver and
substituted receiver;
"SECURED INDEBTEDNESS" means the moneys, liabilities and obligations
(whether actual or contingent and whether owed jointly and severally or in
any other capacity whatsoever) of the Chargor which are, or are expressed
to be, or may at any time in the future be due and owing to the Collateral
Agent (whether for its own account or as agent or trustee for the Secured
Parties) or to any of the Secured Parties under or in connection with the
Facility Agreement together with all costs, charges and expenses incurred
by the Collateral Agent or any Secured Party which are, or are expressed to
be, or may become due and owing by the Chargor under or in connection with
the Facility Agreement;
"SECURITY" means the security from time to time constituted by or pursuant
to this Fixed and Floating Charge (or intended to be constituted by or
pursuant to this Fixed and Floating Charge) or any part thereof; and
"WFOE CHARGES" means the deeds of charge to be entered into by the Chargor
in favour of the Collateral Agent to create a Lien over the shares of
Hangzhou Huawei-3Com Technologies Co Limited and Hangzhou Queenhive
Software Co Limited respectively as security for the Secured Indebtedness.
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1.2 DEFINITIONS IN THE FACILITY AGREEMENT
Unless the contrary interpretation appears, a term used in the Facility
Agreement has the same meaning when used in this Fixed and Floating Charge.
1.3 CONVEYANCING AND PROPERTY ORDINANCE
In the context of the rights, powers, privileges, discretions and
immunities conferred on the Collateral Agent, any Receiver or any Attorney,
references to "mortgage" and "mortgaged land" in any provision of the
Conveyancing and Property Ordinance shall, for the purposes of this Fixed
and Floating Charge, be deemed to be references to the Security and the
Charged Property respectively.
2. COVENANT TO PAY AND NATURE OF SECURED INDEBTEDNESS
2.1 COVENANT TO PAY
The Chargor hereby covenants with the Collateral Agent that it shall pay
and discharge the Secured Indebtedness at the time or times and in the
manner provided for in the Facility Agreement and the Chargor hereby
creates the Security in the Charged Property in the manner and on the terms
set out in Clause 3 (Security).
2.2 NATURE OF SECURED INDEBTEDNESS
Each conveyance, transfer, assignment and charge hereunder expressed to be
to, each undertaking and agreement hereunder expressed to be to or with,
and each representation and warranty hereunder expressed to be given to,
the Collateral Agent is to, with or, as the case may be, given to the
Collateral Agent for itself and as agent and trustee for the Secured
Parties from time to time. Without prejudice to the generality of the
foregoing or Clause 1.2 (Definitions in the Facility Agreement), any
reference in this Fixed and Floating Charge to the Chargor, the Collateral
Agent or any Secured Party shall be construed so as to include their
respective successors and permitted assigns or transferees.
3. SECURITY
3.1 ASSIGNMENT, FIXED AND FLOATING CHARGE
The Chargor as beneficial owner, by way of continuing security for the
payment and discharge of the Secured Indebtedness, hereby:
(A) conveys, transfers and assigns absolutely to the Collateral Agent all
of the right, title, interest and benefit of the Chargor (present and
future and whether legal or equitable) in, to and under the
Receivables, save only for the sums from time to time standing to the
credit of the bank account to be established by the Chargor to
receive, and representing, capital contributions from H3C Holdings
Limited for the purpose of sections 5.9 or 5.12 of the Facility
Agreement and any
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Receivable(s) represented by any loan of all or any part of any such
sums to H3C Holdings Limited;
(B) charges in favour of the Collateral Agent by way of first fixed charge
all its rights under or in respect of the assets referred to in
Sub-clause 3.1(A) (save as expressly excepted there) to the extent
they are not the subject of a mortgage or an assignment under such
Sub-clause 3.1(A);
(C) charges in favour of the Collateral Agent by way of first fixed charge
all its rights under or in respect of the H3C Debt Service Account and
all of the amounts and deposits standing to the credit of such account
from time to time together with all interest accruing from time to
time thereon and the debts represented thereby; and
(D) charges in favour of the Collateral Agent by way of first fixed charge
all its rights under or in respect of the H3C Debt Service Investment
Accounts and all of the deposits and investments standing to the
credit of such accounts with all interest accruing from time to time
thereon and all title, interests, rights and benefit of the Chargor
represented thereby; and
(E) charges in favour of the Collateral Agent by way of first floating
charge the whole of the Chargor's undertakings and all its property,
assets and rights, whatsoever and wheresoever, present and future
(including without limitation its respective uncalled capital, its
rights to any insurance policy or insurance proceeds and any property
held on trust for the benefit of it by a third party), other than:
(i) [a sum of cash not exceeding US$41,000,000 set aside in an amount
held by the Chargor to satisfy the Restricted Junior Payment
referred to in section 6.4(b) of the Facility Agreement;]
(ii) the H3C Debt Service Account and all of the amounts and deposits
standing to the credit of such account from time to time together
with all interest accruing from time to time thereon and the
debts represented thereby;
(iii) any property, assets or rights from time to time or for the time
being effectively:
(a) the subject of a Lien (in equity or at law) by Sub-clause
3.1(A) and (B) (Assignment, Fixed and Floating Charge) or
otherwise pursuant to this Fixed and Floating Charge;
(b) the subject of a Lien pursuant to the WFOE Charges; or
(c) subject to Clause 12.8 (Discharge Conditional), released,
discharged and/or reassigned, or as appropriate, transferred
in accordance with Sub-clauses 3.4(A) and 3.4(B);
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(iv) any of the Chargor's rights arising out of:
(a) the lease agreement dated 30 April 2004 entered into between
the Chargor, MTR Corporation Limited and IFC Development
Limited in respect of Suites 3013 and 3014 on the thirtieth
floor of One International Finance Centre, Xx.0 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxx, Xxxx Xxxx;
(b) the tenancy agreement due to expire on 14 November 2009
entered into between Cityplaza Holdings Limited and the
Chargor in respect of Suites 1702 to 1704 on the 00xx Xxxxx
xx Xxxxxxxxx Xxx, Xxxxxx Xxxxx, Xxxx Xxxx; and
(c) the tenancy agreement entered into in 2007 between the
Landlord (as defined thereunder) acting through its
authorised agent, Xxxxxxxx Leasing Limited, and the Chargor
in respect of Suites 2801-3 (28th Floor), Xxxxx Xxxxx, Xxxxx
Xxxxxx, Xxxx Xxxx; and
(v) the sums and the Receivable(s) expressly excepted in Sub-clause
3.1(A);
to hold the same unto the Collateral Agent, but in each case subject to
Clause 3.4 (Redemption).
3.2 CHARGOR TO DELIVER DOCUMENTS
The Chargor shall as soon as reasonably practicable following the execution
of this Fixed and Floating Charge deposit with the Collateral Agent (using
all reasonable endeavours to procure such deposit as soon as reasonably
practicable):
(A) all share certificates and documents of title (to the extent such
exist) in respect of the shares in any Subsidiary of the Chargor
(other than those whose shares are the subject of a Lien pursuant to
the WFOE Charges); and
(B) instrument(s) of transfer in respect of such shares duly executed,
subject always to the provisions of sections 5.13 and 5.15 of the Facility
Agreement and any applicable local laws. Notwithstanding the requirements
in this Sub-clause 3.2 and any other provisions in this Fixed and Floating
Charge, nothing shall prevent the Chargor from entering into any Subsidiary
Integration Transactions in accordance with the Facility Agreement. The
Collateral Agent shall return any documents under Sub-clause (A) to the
extent and for any period required by the Chargor to comply with its legal
and regulatory obligations, provided the recipient of the documents shall
confirm to the Collateral Agent that the documents are held to the order of
the Collateral Agent.
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3.3 COLLATERAL AGENT NO OBLIGATION TO PERFORM
Notwithstanding the conveyance, transfer and assignment to the Collateral
Agent of all the right, title, interest and benefit of the Chargor in, to
and under the Receivables, the Collateral Agent shall not be or be deemed
to be liable to perform any of the obligations of the Chargor under any of
the Receivables and the Chargor hereby acknowledges and confirms that it
shall remain fully liable for the performance of all such obligations and
shall have no claim against the Collateral Agent in respect of any omission
on the part of the Collateral Agent to perform the same.
3.4 REDEMPTION
(A) Subject always to Clause 12.9 (Discharge Conditional), upon the
Secured Indebtedness having been fully paid and unconditionally and
irrevocably discharged in full the Collateral Agent shall at the
request and cost of the Chargor, promptly release, discharge and/or
re-assign, or, as appropriate, transfer the benefit of the Security
constituted by Clause 3.1 (Assignment, Fixed and Floating Charge) to
the Chargor or as the Chargor may direct and, thereafter, the Chargor
shall have no future obligation hereunder.
(B) The execution of a discharge, release, re-assignment or partial
discharge by the Collateral Agent shall be a good and valid release or
discharge of the Security constituted by this Clause 3 (Security) or
the relevant part thereof (as the case may be) and the obligations (or
the relevant part thereof, as the case may be) of the Chargor from
this Fixed and Floating Charge without the need for the Chargor to be
a party thereto.
(C) The Collateral Agent hereby agrees that it shall, at the request and
cost of the Chargor, do all such things and execute all such documents
and procure that its nominees do all such things and execute all such
documents within its power to do and execute as may be reasonably
necessary to give effect to the release, discharge, re-assignment
and/or transfer referred to in Sub-clauses (A) and (B).
(D) Upon any release, discharge, re-assignment and/or transfer pursuant to
and in accordance with Sub-clause (A), the Collateral Agent shall, at
the request and cost of the Chargor:
(i) promptly procure the redelivery to the Chargor of all deeds,
certificates and other documents deposited with the Collateral
Agent or to its order pursuant to Clause 4.2 (Deposit of Title
Documents);
(ii) promptly reverse or remove such memoranda endorsed on such
documents pursuant to Clause 4.3 (Endorsement on Documents) as
are in the possession of the Collateral Agent;
(iii) promptly procure the redelivery to the Chargor, if it requests
the same, of the instruments and papers delivered by the Chargor
to the Collateral Agent under Sub-clause 3.2(A);
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(iv) promptly give notice to each person (if any) who has received
notice of the Security pursuant to Clause 4.1 (Further Deeds and
Documents) of such release, discharge, re-assignment and/or
transfer; and
(v) promptly instruct the relevant insurance company to remove any
endorsements and reverse any amendments made pursuant to
Sub-clause 4.1(D),
in each case to the extent the same relates to such release,
discharge, re-assignment and/or transfer.
4. PERFECTION OF SECURITY AND FURTHER ASSURANCE
4.1 FURTHER DEEDS AND DOCUMENTS
The Chargor shall at any time, at the request of the Collateral Agent but
at the cost of the Chargor for costs reasonably incurred, promptly sign,
seal, execute, deliver and do all deeds, instruments, notices, documents,
acts and things (including, without limitation further or other legal
assignments, transfers, mortgages, legal or other charges or securities or
any filings or registrations) as in each such case may be necessary or
desirable for the purpose of maintaining, perfecting or protecting the
Security or at any time after the Security has become enforceable for
facilitating the realisation thereof and the exercise of all powers,
authorities and discretions vested in the Collateral Agent or any Receiver
appointed hereunder provided that and without limitation:
(A) promptly following the execution and delivery of this Fixed and
Floating Charge, the Chargor shall:
(i) enter the relevant particulars of this Fixed and Floating Charge
in the registers of charges kept or to be kept at the registered
office of the Chargor;
(ii) make all such other filings and registrations as may be requested
in writing by the Collateral Agent as may be necessary to
perfect, protect and maintain the Security; and
(iii) authorise its secretary or any person nominated by the
Collateral Agent to deliver particulars of the Security created
by this Fixed and Floating Charge, together with a copy of this
Fixed and Floating Charge, to the Registrar of Companies in Hong
Kong in accordance with Section 80 of the Companies Ordinance
(Chapter 32 of the Laws of Hong Kong);
(B) the Chargor shall, forthwith following the execution and delivery of
this Fixed and Floating Charge, and forthwith upon the opening of any
H3C Debt Service Investment Account, join with the Collateral Agent in
giving notice of the fixed and floating charges effected pursuant to
Clause 3.1(C) and Clause 3.1(D) to the Account Bank in substantially
the form set out in Schedule 1 (Notice of Charge) or as otherwise
approved by the Collateral Agent and use reasonable
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efforts to procure that the Account Bank executes the acknowledgements
and agreements set out in Schedule 2 (Form of Acknowledgement);
(C) as soon as practicable following a request by the Collateral Agent,
the Chargor shall assign any material insurance policies inuring to
its benefit and join with the Collateral Agent in giving notice of
such assignment in a form reasonably satisfactory to the Collateral
Agent to each insurance company under such insurance policies and use
reasonable endeavours to procure that such insurance company
acknowledges such notice in a form reasonably satisfactory to the
Collateral Agent and ensure that all endorsements then existing on
each of such insurance policies will be deleted, and each of such
insurance policies will be endorsed substantially as set out in, and
the named insured under each of the insurance policies will be amended
in, a form satisfactory to the Collateral Agent;
(D) as soon as practicable following a request by the Collateral Agent,
the Chargor shall use its reasonable efforts to procure that its
insurance brokers issue to the Collateral Agent the brokers'
undertaking(s) in respect of the insurance policies assigned pursuant
to Sub-clause (B) above in a form reasonably satisfactory to the
Collateral Agent; and
(E) the Chargor shall, at the request of the Collateral Agent or any
person deriving title under the Collateral Agent, execute or do all
lawful acts, assurances and things for further or more perfectly
assuring the Charged Property or any part thereof to the Collateral
Agent and to those deriving title under the Collateral Agent,
and without prejudice to the generality of the foregoing, such assignments,
transfers, mortgages, legal or other charges or securities shall be in such
form as the Collateral Agent shall reasonably require and may contain
provisions such as are herein contained or provisions to the same effect.
4.2 DEPOSIT OF TITLE DOCUMENTS
In addition to the provisions of Clause 3 (Security), the Chargor shall, as
soon as practicable following the request of the Collateral Agent following
the execution and delivery of this Fixed and Floating Charge (or upon
becoming possessed thereof at any time hereafter), deposit with the
Collateral Agent or to the Collateral Agent's order all deeds, certificates
and other documents (other than those relating to the shares in the
Subsidiaries of the Chargor subject to the WFOE Charges) constituting or
evidencing title to any material asset forming part of the Charged Property
originally charged pursuant to Clause 3.1(A), (B) or (C) or subsequently
becoming subject to a fixed charge hereunder pursuant to Clause 5 hereof or
any part thereof (if they have not already done so) and the Collateral
Agent, if held by it or to its order, shall hold or procure to be held such
deeds, certificates and other documents in safe custody and clearly
identified so as to be distinct from all other deeds, certificates and
other documents of the Collateral Agent.
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4.3 ENDORSEMENT ON DOCUMENTS
The Chargor, shall from time to time at the reasonable request of the
Collateral Agent but at the Chargor's cost for costs reasonably incurred
endorse or cause to be endorsed on documents referred to in Clause 4.2
(Deposit of Title Documents) such memoranda as the Collateral Agent may
reasonably require for the purpose of referring or drawing attention to the
security interests created by this Fixed and Floating Charge.
5. PROTECTION OF SECURITY AND CRYSTALLISATION OF FLOATING CHARGE
5.1 PART CRYSTALLISATION
The Collateral Agent shall be entitled at any time by notice in writing to
the Chargor after an Event of Default to convert the floating charge
created by Clause 3.1(D) into a fixed charge affecting all the property and
assets which for the time being are the subject of such floating charge or,
as the case may be, such of the said property and assets as are specified
in such notice.
5.2 AUTOMATIC CRYSTALLISATION
Notwithstanding Clause 5.1 (Part Crystallisation) and without prejudice to
any rule of law which may have a similar effect, the floating charge shall
automatically be converted with immediate effect into a fixed charge as
regards all the property and assets subject to the floating charge and
without notice from the Collateral Agent to the Chargor on:
(A) the presentation of a petition for the compulsory winding up of the
Chargor;
(B) the convening of a meeting for the passing of a resolution for the
voluntary winding up of the Chargor;
(C) the presentation or making of an application for a warrant of
execution, writ of fieri facias, garnishee order or charging order in
respect of any material part of the property or assets of the Chargor
subject to the floating charge which is not discharged within 60 days;
(D) the Chargor creating or permitting any Lien over or with respect to
any of the Charged Property, or attempting to do so without the prior
consent of the Collateral Agent (other than as permitted by the
Facility Agreement); or
(E) the Security becoming enforceable in accordance with Clause 9 (Default
Procedure).
5.3 RECONVERSION OF CRYSTALLISED ASSETS
The Collateral Agent may by notice in writing to the Chargor re-convert any
of the assets which has become subject to a fixed charge pursuant to
Clauses 5.1 (Part Crystallisation) or 5.2 (Automatic Crystallisation) so
that such asset shall again be subject to the floating charge specified in
Clause 3.1(D) provided that the floating
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charge over any asset re-converted under this Clause 5.3 (Reconversion of
Crystallised Assets) shall be subject to the further operation of Clause
5.1 (Part Crystallisation) or 5.2 (Automatic Crystallisation).
6. PAYMENTS INTO AND OUT OF THE CHARGED ACCOUNTS
(A) All dividends received from the PRC Subsidiaries shall be credited to
the H3C Debt Service Account and the H3C Debt Service Reserve Account
in the respective amounts provided for in section 5.21 of the Facility
Agreement and the Chargor undertakes to procure that WFOE and
Queenhive pay such dividends to such accounts in such respective
amounts. The Chargor shall, as soon as reasonably practicable
following the execution and delivery of this Fixed and Floating
Charge, join with the Collateral Agent in giving notice of the
security granted by Clause 3.1 to WFOE and Queenhive in substantially
the form set out in Schedule 3 (Notice of Charge) or otherwise
approved by the Collateral Agent and use reasonable efforts to procure
that WFOE and Queenhive acknowledge and agree to the notice of charge
by executing a copy of the notice of charge.
(B) The Collateral Agent shall for so long as an Event of Default shall
not have occurred and be continuing be entitled to withdraw amounts
from the H3C Debt Service Account, and/or the H3C Debt Service
Investment Accounts, in a manner and at a time or times provided for
in, and in an amount or amounts calculated in accordance with, section
5.21 of the Facility Agreement and transfer the same to the Borrower
Debt Service Account, in each case in satisfaction of a dividend
declared by the Chargor in respect of its issued share capital.
(C) The Chargor shall for so long as an Event of Default shall not have
occurred and be continuing be entitled to require the Collateral Agent
to use all or any part of the balance standing to the credit of the
H3C Debt Service Account and/or the H3C Debt Service Investment
Accounts towards transfer to the Borrower Debt Service Account in a
manner and at times provided for in, and in amounts calculated in
accordance with, section 5.21 of the Facility Agreement, in each case
in satisfaction of a dividend declared by the Chargor in respect of
its issued share capital.
(D) The Chargor shall for so long as an Event of Default shall not have
occurred and be continuing be entitled to require the Collateral Agent
to use all or any part of the balance standing to the Credit of the
H3C Debt Service Account towards any investment in Cash Equivalents
(or such other investments as agreed by the Collateral Agent), and the
Collateral Agent shall thereupon make such investment in Cash
Equivalents (or such other agreed investments) in the name of the
Chargor, provided always that any such investments may only be made
through the H3C Debt Service Investment Accounts and subject to the
fixed charge set out in Clause 3.1(D).
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(E) The Collateral Agent shall however be entitled to decline to make any
such discharge or investment as is mentioned in Sub-clauses (C) or (D)
above if to do so would prevent the withdrawal and application of any
amount in accordance with Sub-clause (B).
(F) All interest accruing on the H3C Debt Service Account and/or the H3C
Debt Service Investment Accounts shall be transferred to the credit of
the H3C Debt Service Reserve Account by the Collateral Agent as and
when credited to the H3C Debt Service Account or, as the case may be,
the H3C Debt Service Investment Accounts.
(G) Other than pursuant to Sub-clauses (B) to (F), no amount may be
withdrawn from the H3C Debt Service Account or the H3C Debt Service
Investment Accounts by the Chargor without the prior written consent
of the Collateral Agent.
(H) The Chargor shall for so long as an Event of Default shall not have
occurred and be continuing be entitled to withdraw from the H3C Debt
Service Reserve Account at any time and without any consent from the
Collateral Agent any amount to be applied by it for any purpose in the
ordinary course of business not prohibited by the Facility Agreement,
and apply it for such purpose.
(I) Other than pursuant to Sub-clause (H) above, no amount may be
withdrawn from the H3C Debt Service Reserve Account by the Chargor
without the prior written consent of the Collateral Agent.
(J) The Collateral Agent shall transfer amounts from the H3C Debt Service
Account and/or the H3C Debt Service Investment Accounts to the H3C
Debt Service Reserve Account pursuant to and in accordance with
section 5.21 of the Facility Agreement.
7. REPRESENTATIONS
7.1 The Chargor makes the following representations:
(A) it is duly incorporated and validly existing under the laws of Hong
Kong and it has the power and capacity to enter into this Fixed and
Floating Charge and grant the Security created hereunder;
(B) it has taken all necessary action to authorise its entry into, and the
creation of security and the performance of all its obligations under,
this Fixed and Floating Charge and the transactions contemplated by
this Fixed and Floating Charge;
(C) the entry into and performance by it of, the creation of security
under, and the transactions contemplated by, this Fixed and Floating
Charge do not and will not conflict with:
(i) any law or regulation applicable to it;
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(ii) its constitutional documents; or
(iii) any agreement or instrument binding upon or its Subsidiaries or
any of its or its Subsidiaries' assets.
(D) the execution, delivery and performance by the Chargor of its
obligations under this Fixed and Floating Charge will not require any
consent, approval or notice to any governmental or other regulatory
body.
(E) the obligations expressed to be assumed by it under this Fixed and
Floating Charge are, subject to any general principles of law limiting
its obligations, legal, valid, binding and enforceable obligations;
(F) the security interests created under this Fixed and Floating Charge
are (subject to completion of all registrations required by law)
legal, valid, binding and enforceable security having the priority and
ranking which they are expressed to have; and
(G) subject only to this Fixed and Floating Charge, it is the sole legal
and beneficial owner of the Charged Property and that the Charged
Property is free from any Lien and any interest or claims of third
parties other than interest or claims arising by operation of law
affecting companies generally and Permitted Liens.
7.2 The above representations are made on the date of this Fixed and Floating
Charge and are deemed to be repeated by the Chargor on each day following
the date of this Fixed and Floating Charge until the termination of the
Facility Agreement or this Fixed and Floating Charge, whichever is later.
8. COVENANTS AND UNDERTAKINGS
8.1 COVENANTS AND UNDERTAKINGS OF THE CHARGOR
The Chargor covenants and undertakes with the Collateral Agent that:
(A) The Chargor undertakes to, within 14 days from the date of this Fixed
and Floating Charge, provide evidence in form and substance
satisfactory to the Collateral Agent that the particulars of this
Fixed and Floating Charge have been recorded in the register of
mortgages, charges and other encumbrances of the Chargor and filed
with the Companies Registry of Hong Kong pursuant to Section 80 of the
Companies Ordinance (Chapter 32 of the Laws of Hong Kong);
(B) it shall take all such actions as are available to it:
(i) to perfect and protect the Security intended to be conferred by
it on the Collateral Agent pursuant to this Fixed and Floating
Charge; and
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(ii) to maintain the Security intended to be conferred by it on the
Collateral Agent pursuant to this Fixed and Floating Charge as
first ranking security;
(C) it shall not sell, transfer, assign, exchange or otherwise dispose of
the whole or any part of the Charged Property or agree to do any of
the foregoing other than as expressly permitted or provided for in the
Facility Agreement or in this Fixed and Floating Charge or (with
respect to the assets charged pursuant to Clause 3.1(D)) in the
ordinary course of business and in accordance with the Facility
Agreement;
(D) other than as permitted by the Facility Agreement or this Fixed and
Floating Charge it shall not create, incur or permit to subsist or
attempt to create, incur or permit to subsist any Lien on the Charged
Property;
(E) it shall at the written request of the Collateral Agent, make all such
filings and registrations, and take all such other reasonable steps,
as may be necessary or desirable in connection with the creation,
perfection or protection of any security which it may, or may be
required to, create in connection herewith;
(F) it shall at all times give to the Collateral Agent such information as
the Collateral Agent may reasonably require in respect of the Charged
Property for the purpose of the discharge of the trusts, powers,
rights, duties, authorities and discretions vested in it hereunder or
by operation of law;
(G) it shall take all reasonable steps as may be required by the
Collateral Agent to allow the Collateral Agent to sell or dispose of
the Charged Property on or after the Security becomes enforceable; and
(H) it shall not to do or cause or permit to be done, or omit to do
anything which may in any way jeopardise the Security created
hereunder.
8.2 POWER OF COLLATERAL AGENT TO REMEDY FAILURES
If at any time the Chargor shall fail to comply with or perform any of the
covenants contained in this Fixed and Floating Charge or any Credit
Document, the Collateral Agent shall have the power on behalf of or in the
name of the Chargor, but shall not be under any obligation, to perform the
covenants and to take such steps which the Collateral Agent may in its
discretion consider appropriate with a view to remedying, or mitigating the
consequences of, such failure but so that the exercise of this power or the
failure to exercise it shall, in no circumstances, prejudice the other
rights of the Collateral Agent under this Fixed and Floating Charge or any
Credit Document. The Chargor shall on demand reimburse to the Collateral
Agent all proper costs, expenses and losses incurred or sustained by the
Collateral Agent in connection with such steps and until such costs,
expenses and losses are reimbursed the outstanding sums shall carry
interest in accordance with section 2.10 of the Facility Agreement from the
date when payment is due to the date of reimbursement and such outstanding
sums including any accrued interest shall form part of the Secured
Indebtedness. No
14
exercise by the Collateral Agent of its powers under this Clause 8.2 (Power
of Collateral Agent to Remedy Failures) shall render the Collateral Agent
liable to account as a mortgagee in possession.
9. DEFAULT PROCEDURE
The Security shall become immediately enforceable:
(A) automatically upon the occurrence of any Event of Default described in
sections 8.1(f) or 8.1(g) of the Facility Agreement (except with
respect to Excluded Subsidiaries); and
(B) at the request of (or with the consent of) the Requisite Lenders and
upon notice to the Borrower by the Administrative Agent, upon the
occurrence of any other Event of Default (including those described in
sections 8.1(f) or 8.1(g) of the Facility Agreement with respect to
Excluded Subsidiaries).
10. CHATTELS AND FIXTURES
At any time after the Security has become enforceable, the Collateral Agent
or any Receiver may:
(A) dispose of any chattels owned by the Chargor forming part of the
Charged Property as agent for the Chargor and without prejudice to any
obligation on the part of the Collateral Agent or the Receiver to
account for the proceeds of sale of such chattels; and
(B) sever any plant machinery and other fixtures and fittings owned by the
Chargor from any premises containing them and sell the same separately
without the consent of the Chargor.
11. EFFECTS OF THE SECURITY BECOMING ENFORCEABLE
11.1 EFFECTS
After the Security (or the relevant part thereof) shall have become
enforceable in accordance with Clause 9 (Default Procedure) and without
prejudice to the powers of the Collateral Agent to appoint a Receiver
pursuant to Clause 14 (Appointment of Receiver):
(A) the floating charge created under Clause 3.1(D) shall automatically
and immediately crystallise and operate as a fixed charge;
(B) the Chargor's rights or power to deal with the Charged Property
(whether statutory or otherwise) shall cease and the Collateral Agent
shall be entitled to deal with, collect in and realise the same in
such manner as the Collateral Agent thinks fit;
15
(C) the Collateral Agent shall be entitled to exercise all powers in
respect of the Charged Property provided in Section 51 of and The
Fourth Schedule to the Conveyancing and Property Ordinance but without
the necessity to comply with any restrictions imposed by the
provisions of the said Section 51 or The Fourth Schedule;
(D) the Collateral Agent may exercise all of the rights conferred on any
mortgagee by law and on the Collateral Agent or on any Receiver under
this Fixed and Floating Charge including, without limitation, the
right to sell or otherwise dispose of, for any consideration, the
whole or any part of the Charged Property in respect of which the
security hereby constituted has become enforceable accordingly and, in
particular the provisions of paragraph 11 of The Fourth Schedule to
the Conveyancing and Property Ordinance shall not restrict the
exercise by the Collateral Agent or any Receiver of its powers
hereunder and the Security shall become immediately enforceable and
the statutory power of sale and other powers of sale and appointing a
Receiver shall become immediately exercisable without any juridical or
other formality or any presentment, demand, protest or other notice of
any kind on or at any time after the Security becomes enforceable;
(E) the Collateral Agent may sell, realise or otherwise dispose of, for
such consideration (whether payable immediately or by instalments) as
it shall in its absolute discretion think fit (whether by private sale
or otherwise), the whole or any part of the shares held by the Chargor
in any Subsidiaries (other than the shares which are subject to Liens
pursuant to the WFOE Charges) and the Collateral Agent may to the
extent that it has not already done so, take possession of and hold
all or any part of such shares and accordingly register, or cause to
be registered, all or any of such shares in its own name or in the
name of the Collateral Agent's nominee or assignee or in the name of
any purchaser thereof and apply any shares constituting dividends or
other distributions in cash as if they were proceeds of sale of such
shares; and
(F) without prejudice to the foregoing, the provisions of the Conveyancing
and Property Ordinance are expressly extended (subject to Clause 11.9
(Inconsistency and Conflict)) so that the Collateral Agent may in
addition to any powers granted it by applicable law, upon the Security
becoming enforceable and upon and subject to the terms and conditions
of the Facility Agreement):
(i) sell all the title to and interest in the Charged Property or any
interest in the same and do so in consideration of an agreement
to pay all or part of the purchase price at a later date or
dates, or an agreement to make periodical payments, whether or
not the agreement is secured by a security or a guarantee, or for
such other consideration whatsoever as the Collateral Agent may
think fit, and also grant any option to purchase and effect
exchanges;
16
(ii) with a view to, or in connection with, the sale of the Charged
Property, carry out any transaction, scheme or arrangement which
the Collateral Agent considers appropriate;
(iii) do all or any of the following things or exercise all or any of
the following powers, so far as not included in paragraphs (i)
and (ii) of Sub-clause (F):
(a) take possession of, get in and collect the Charged Property
and, without prejudice to the generality of the foregoing,
the Collateral Agent shall be at liberty and is hereby
irrevocably authorised, without any reference to or further
authority from the Chargor and without giving prior notice
to the Chargor or obtaining the consent of the Chargor at
any time or times without any restriction whatsoever, to
appropriate the moneys for the time being standing to the
credit of the Accounts in or towards payment to the
Collateral Agent of any or all of the moneys hereby
covenanted to be paid, it being agreed that any such moneys
shall be applied in accordance with section 2.16(h) of the
Facility Agreement;
(b) carry on the business of the Chargor in so far as it relates
to the Charged Property as it thinks fit;
(c) sell, exchange, license or otherwise dispose of or in any
way whatsoever deal with the Charged Property for such
consideration (if any) and upon such terms as it may think
fit;
(d) appoint and engage managers, agents and advisers in respect
of the Charged Property upon such terms as to remuneration
and otherwise and for such periods as it may determine, and
to dismiss them;
(e) bring, defend, submit to arbitration, negotiate, compromise,
abandon and settle any claims and proceedings concerning the
Charged Property;
(f) transfer all or any of the Charged Property and/or any of
the liabilities of the Chargor to any other company or body
corporate, whether or not formed or acquired for the purpose
and whether or not a subsidiary or associated company of the
Collateral Agent or a company in which the Collateral Agent
has an interest;
(g) in connection with the exercise of any of its powers
hereunder, execute or do, or cause or authorise to be
executed or done, on behalf of or in the name of the
Chargor, as it may think fit, but only in respect of the
Charged Property all assurances, deeds,
17
transactions, schemes of arrangement, documents, acts and
things which it may consider appropriate and to do and
exercise, in relation to the Charged Property, all such
powers as it would be capable of exercising if it were the
absolute beneficial owner of the same and to use the name of
the Chargor for all or any of the foregoing purposes;
(h) exercise or permit any other person to exercise any powers,
rights, remedies or privileges in respect of the Charged
Property;
(i) exercise any of the powers and perform any of the duties
conferred on the Chargor by any Credit Document or any
statute, deed or contract;
(j) disclaim, discharge, abandon, disregard, alter or amend all
or any of the outstanding contracts of the Chargor but only
in respect of the Charged Property and allow time for
payment of any monies either with or without security;
(k) make and effect insurances in respect of the Charged
Property and submit claims thereunder;
(l) do all such other acts and things as it may consider
necessary, incidental or conducive to the exercise of any of
the powers hereby conferred;
(m) generally use the name of the Chargor and its corporate seal
(where appropriate) in the exercise of all or any of the
powers hereby conferred;
(n) in respect of the Charged Property, sanction or confirm
anything done by the Chargor and concur with the Chargor in
any dealing not hereinbefore specifically mentioned; and
(o) generally carry out, cause or authorise to be carried out
any transaction, scheme or arrangement whatsoever, whether
similar or not to any of the foregoing, in relation to the
Charged Property which it may consider expedient as
effectually as if it were solely and absolutely entitled to
the Charged Property.
11.2 ENTITLEMENT TO PAY EXPENSES AND OUTGOINGS
Subject to the order of priority of payments set out in section 2.16(h) of
the Facility Agreement, the Collateral Agent may pay and discharge the
expenses incurred (whether by the Collateral Agent, any Receiver or any
other person) in and about the carrying on and management of any such
business as contemplated by Clause 11.1 (Effects) or in the exercise of any
of the powers conferred by Clause 11.1 (Effects) or otherwise in respect of
the Charged Property and all outgoings which it shall think fit to
18
pay out of the profits and income of the Charged Property and the moneys
received by it in carrying out any business as contemplated by Clause 11.1
(Effects) and may apply the residue of the said profits, income and moneys
in the manner provided by section 2.16(h) of the Facility Agreement
provided that any such expenses shall, in any event, to the extent not
fully paid or discharged, form or shall be deemed to form part of the
Secured Indebtedness.
11.3 NO WAIVER
No failure or delay on the part of the Collateral Agent or any Receiver to
exercise any right, power or remedy under this Fixed and Floating Charge
will operate as a waiver thereof nor will any single or partial exercise of
any right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.
11.4 WAIVERS TO BE IN WRITING
Any waiver and any consent by the Collateral Agent under this Fixed and
Floating Charge must be in writing, be express and not implied and may be
given subject to any conditions which the Collateral Agent considers fit.
Any waiver or consent shall be effective only in the instance and for the
purpose for which it is given.
11.5 NO OBLIGATION TO INSURE
Notwithstanding any provisions to the contrary, the Collateral Agent shall
not be under any obligation to insure any of the Charged Property or the
title deeds or other evidence in respect thereof and shall not be
responsible for any loss which may be suffered as a result of the lack of
or inadequacy of any such insurance.
11.6 NO RESPONSIBILITY FOR LOSSES
The Collateral Agent shall not be responsible for any loss or diminution in
the value occasioned to the Charged Property by any act or omission of the
Chargor or any prior ranking encumbrancer or any other person.
11.7 NO RESPONSIBILITY FOR TAX
The Collateral Agent shall have no responsibility whatsoever to any person
as regards any deficiency which might arise because the Collateral Agent is
subject to any tax in respect of the Charged Property or any part thereof
on any income therefrom or any proceeds thereof.
11.8 NO LIABILITY
The Collateral Agent shall not be liable for any failure, omission or
defect in perfecting the Security or any security created by the Facility
Agreement or any of the Credit Documents.
19
11.9 INCONSISTENCY AND CONFLICT
To the maximum extent permitted by applicable law, where any inconsistency
or conflict exists between the provisions of this Fixed and Floating Charge
and the provisions of any applicable law (including without limitation the
Conveyancing and Property Ordinance and the Trustee Ordinance (Chapter 29
of the Laws of Hong Kong)), the provisions of this Fixed and Floating
Charge shall prevail and such inconsistent or conflicting provisions shall
be deemed to be expressly negated or modified hereby provided that none of
the foregoing shall be construed as a limitation on the powers of any
Receiver.
11.10 NO EXEMPTION
Nothing in this Fixed and Floating Charge shall exempt the Collateral Agent
from or indemnify it against any liability which would by rule of law or
otherwise attach to it in respect of any act of negligence or wilful
default which it may have committed in relation to its duties and/or
discretions under this Fixed and Floating Charge.
12. PRESERVATION OF RIGHTS
12.1 SECURITY ADDITIONAL
The Security and the rights given to the Collateral Agent under this Fixed
and Floating Charge shall be in addition to and shall be independent of
every guarantee, indemnity or other security which the Collateral Agent may
at any time hold for the Secured Indebtedness and it is hereby declared
that no prior security held by the Collateral Agent over the whole or any
part of the Charged Property shall merge in the Security.
12.2 SECURITY CONTINUING
The Security and the rights given to the Collateral Agent under this Fixed
and Floating Charge shall be a continuing security notwithstanding the
winding-up or dissolution of the Chargor or any partial payment, settlement
of account or other matter whatsoever and in particular (but without
prejudice to the generality of the foregoing) shall not be considered
satisfied by any intermediate repayment in satisfaction of all or any of
the Secured Indebtedness and shall continue in full force and effect until
the Secured Indebtedness has been discharged and satisfied in full.
12.3 INDULGENCE AND RELEASE
The Collateral Agent may (with the prior written consent of the Requisite
Lenders) in its discretion grant time or other indulgence, or make any
other arrangement, variation or release with, the Chargor or any other
person (whether or not party hereto and whether or not jointly liable with
the Chargor) in respect of the Secured Indebtedness or of any other
security therefor or guarantee in respect thereof without prejudice either
to the Security or to the liability of the Chargor for the Secured
Indebtedness.
20
12.4 RIGHTS CUMULATIVE
The rights, powers and remedies provided in this Fixed and Floating Charge
are cumulative and are not, nor are they to be construed as, exclusive of
any rights, power or remedies provided by law.
12.5 SECURITY NOT AFFECTED
Neither the Security nor any of the rights, powers and remedies conferred
upon the Collateral Agent or any Receiver (or their respective delegates)
by this Fixed and Floating Charge or by law nor the liability of the
Chargor hereunder shall be discharged, impaired or otherwise affected by:
(A) any time, waiver or consent granted, or any other indulgence or
concession granted, by the Collateral Agent or any other Secured Party
to the Chargor or any other person; or
(B) the taking, holding, variation, compromise, exchange, renewal,
realisation or release by the Collateral Agent or any other Secured
Party or any other person of any rights under or in connection with a
Credit Document, any other security, guarantee, indemnity or other
document; or
(C) the refusal or failure to take up, hold, realise, perfect or enforce
by the Collateral Agent or any other Secured Party or any other person
any rights under or in connection with a Credit Document, any other
security, guarantee, indemnity or other document (including, without
limitation, any failure to comply with any formality or other
requirement or any failure to realise the full value of any security);
or
(D) the existence of any claim, set-off or other right which the Chargor
may have at any time against the Collateral Agent or any other Secured
Party or any other person; or
(E) the making or absence of any demand for payment or discharge of any
Secured Indebtedness on the Chargor or any other person, whether by
the Collateral Agent or any other Secured Party or any other person;
or
(F) any arrangement, compromise or settlement entered into by the
Collateral Agent or any other Secured Party with the Chargor or any
other person; or
(G) any postponement, discharge, reduction, non-provability or other
similar circumstance affecting any obligation of the Chargor under a
Credit Document resulting from any insolvency, liquidation or
dissolution proceedings or from any law, regulation or order; or
(H) any variation, amendment, waiver, release, novation, supplement,
extension (whether of maturity or otherwise) or restatement (in each
case however
21
fundamental and of whatsoever nature) or replacement of any Credit
Document, or any other security, guarantee, indemnity or other
document; or
(I) any amendment, variation, novation, supplementation or replacement of
any agreement between the Secured Parties; or
(J) any unenforceability, illegality or invalidity of any obligation of
any person under any Credit Document or any other security, guarantee,
indemnity or other document; or
(K) any of the obligations of the Chargor under any of Credit Document or
under any other Lien taken in respect of the obligations of the
Chargor under any Credit Document being or becoming illegal, invalid,
unenforceable, ineffective or impaired in any respect; or
(L) any amalgamation, merger or reconstruction that may be effected by the
Collateral Agent with any other person or any sale or transfer of the
whole or any part of the undertaking, property and assets of the
Collateral Agent to any other person; or
(M) any amalgamation, merger or reconstruction (other than as part of a
solvent reconstruction or amalgamation the terms of which have been
approved by the Collateral Agent), reorganisation, administration,
administrative or other receivership or dissolution or liquidation
entry into a voluntary arrangement of the Chargor or any other person;
or
(N) the insolvency, bankruptcy, winding-up or dissolution of the Chargor
or any change in its status, function, control or ownership; or
(O) any change in the constitution of the Chargor; or
(P) any incapacity, lack of power, authority or legal personality of the
Chargor to enter into or perform any of its obligations under any
Credit Document or any irregularity in the exercise thereof or any
lack of authority by any person purporting to act on their behalf; or
(Q) any exercise, omission to exercise, compromise, renewal or release of
any rights against the Chargor; or
(R) any invalidity or irregularity in the execution of this Fixed and
Floating Charge or any other Credit Document; or
(S) any other act (save for an act of release and discharge by the
Collateral Agent in accordance with this Agreement), event or omission
which, but for this Clause 12.5 (Security Not Affected) might operate
to discharge, impair or otherwise affect the Security or the liability
of the Chargor for the Secured Indebtedness or any of the rights,
powers or remedies conferred upon the
22
Collateral Agent or any Receiver (or their respective delegates) by
this Fixed and Floating Charge or by law or the liability of the
Chargor hereunder.
Without prejudice to the generality of this Clause 12.5 (Security Not
Affected), the Chargor expressly confirms that it intends that its
liability for the Secured Indebtedness and its obligations under this Fixed
and Floating Charge shall extend from time to time to any variation,
increase, extension, addition or replacement (however fundamental) of or to
any of the Credit Documents and/or any facility or amount made available
under any of the Credit Documents.
12.6 NO PREJUDICE TO OTHER SECURITY
Nothing contained in this Fixed and Floating Charge is intended to, or
shall operate so as to, prejudice or affect any guarantee, indemnity or
other security of any kind whatsoever which the Collateral Agent may have
for the Secured Indebtedness or any right, remedy or privilege of the
Collateral Agent thereunder.
12.7 SCOPE OF RELEASE
Any receipt, release or discharge of the Security or of any liability
arising under this Fixed and Floating Charge may be given by the Collateral
Agent and, unless expressly stated otherwise, shall not release or
discharge the Chargor from any liability for the same or any other monies
which may exist independently of this Fixed and Floating Charge. Where such
receipt, release or discharge relates only to part of the Charged Property
such receipt, release or discharge shall not prejudice or affect the
Security in relation to the remainder of the Charged Property, unless
expressly stated otherwise.
12.8 FURTHER ADVANCES
The security created by this Fixed and Floating Charge is intended to
secure any further advances made by the Lenders pursuant to the terms of
the Facility Agreement.
12.9 DISCHARGE CONDITIONAL
Any settlement, reassignment, release or discharge between the Chargor on
the one part and the Collateral Agent or any Receiver (or their respective
delegates) on the other (the Collateral Agent, any Receiver and their
respective delegates being referred to in this Clause 12.9 (Discharge
Conditional) as the "TRANSACTION PERSON(S)") shall be conditional upon no
security or payment by any person in respect of the Secured Indebtedness
being avoided or reduced by virtue of any provisions of law or enactments
(including but not limited to those relating to bankruptcy, insolvency or
liquidation) for the time being in force and, in the event of any such
security or payment being so avoided or reduced, the Transaction Person(s)
shall be entitled, to recover the value or amount of such payment and the
Security subsequently as if such settlement or discharge had not occurred
but so that nothing herein shall confer on any Transaction Persons the
right to claim under this Clause 12.8 (Discharge Conditional) for more than
the Collateral Agent would be entitled to claim in aggregate hereunder in
respect of such avoided or reduced security or payment provided that any
such Xxxxxxxxxx,
00
reassignment, release or discharge shall become unconditional upon the
expiry of one month after the maximum period within which such settlement,
reassignment, release or discharge can be avoided or reduced.
12.10 NO CONDITIONS TO EXERCISE OF RIGHTS
Neither the Collateral Agent nor any Receiver nor any of their respective
delegates shall be obliged before exercising any of the rights, powers or
remedies conferred upon them by this Fixed and Floating Charge or by law:
(A) to take any action or obtain judgment in any court against the
Chargor;
(B) to make or file any claim or proof in a winding-up or dissolution of
the Chargor; or
(C) to enforce or seek to enforce the recovery of any moneys and
liabilities hereby secured or any other security taken in respect of
any of the obligations of the Chargor under any of the Credit
Documents.
12.11 NEW ACCOUNT
At any time following (a) the Collateral Agent receiving notice (either
actual or constructive) of any subsequent charge affecting the Charged
Property or (b) the Collateral Agent receives notice of any assignment or
disposition affecting all or any part of the Charged Property or any
interest therein to which the Collateral Agent has not given its approval
or (c) the commencement of the insolvency, administration, reorganisation,
liquidation or dissolution of, or any analogous proceeding in respect of,
of the Chargor, the Collateral Agent may open a new account in the name of
the Chargor (whether or not it permits any existing account to continue).
If the Collateral Agent does not open such a new account, it shall
nevertheless be treated as if it had done so at the time when the notice
was received or was deemed to have been received or, as the case may be,
the insolvency, administration, reorganisation, liquidation, dissolution or
other proceeding commenced. Thereafter, all payments made by the Chargor to
the Collateral Agent or received by the Collateral Agent for the account of
the Chargor shall be credited or treated as having been credited to the new
account and shall not operate to reduce the amount secured by this Deed at
the time when the Collateral Agent received or was deemed to have received
such notice or, as the case may be, the insolvency, administration,
reorganisation, liquidation, dissolution or other proceeding commenced.
12.12 SUSPENSE ACCOUNT(S)
All monies received, recovered or realised by the Collateral Agent or a
Receiver under this Fixed and Floating Charge (including the proceeds of
any conversion of currency) after the security created hereunder has become
enforceable, except where such monies together with all other monies
received, recovered or realised by the Collateral Agent or any Receiver
under this Fixed and Floating Charge are sufficient to satisfy and
discharge the Secured Indebtedness in full, may in the discretion of the
Collateral Agent
24
or the Receiver (provided that such action has first been approved by the
Collateral Agent) be credited to any suspense or impersonal account in the
name of the Collateral Agent at the Account Bank and may be held in such
account for so long as the Collateral Agent may think fit (with interest
accruing thereon at such market rate, if any, as the Collateral Agent may
deem fit) pending their application from time to time (as the Collateral
Agent shall be entitled to do in its discretion) in or towards satisfaction
of the Secured Indebtedness in accordance with the terms of this Fixed and
Floating Charge. Save as provided above, no party shall be entitled to
withdraw any amount at any time standing to the credit of any such suspense
or impersonal account.
13. PROTECTION OF PURCHASERS
No purchaser or other person dealing with the Collateral Agent or its
delegate or any Receiver appointed hereunder shall be bound to see or
inquire whether the right of the Collateral Agent or such Receiver to
exercise any of its or his powers has arisen or become exercisable or be
concerned to see whether any such delegation by the Collateral Agent shall
have lapsed for any reason or been revoked. Any sale or other dealing by
the Collateral Agent or its delegate or any Receiver of or with the Charged
Property and any part thereof shall be deemed to be within the power of the
person effecting the same and the receipt by such person of the purchase or
other moneys connected therewith shall effectively discharge the purchaser
or other party to such dealing who shall not be concerned with the manner
of application of the proceeds of sale or other dealing or be in any way
answerable therefor.
14. APPOINTMENT OF RECEIVER
14.1 APPOINTMENT AND REMOVAL
The Collateral Agent may if requested by the Chargor or at any time after
the Security (or the relevant part thereof) shall have become enforceable
in accordance with Clause 9 (Default Procedure), appoint one or more
persons to be a Receiver or Receivers of the whole or any part of the
Charged Property. The Collateral Agent may:
(A) remove any Receiver previously appointed hereunder; and
(B) appoint another person or other persons as Receiver or Receivers,
either in the place of a Receiver so removed or who has otherwise
ceased to act or to act jointly with a Receiver or Receivers
previously appointed hereunder.
If at any time and by virtue of any such appointment(s) any two or more
persons shall hold office as Receivers of the same assets or income, each
one of such Receivers shall be entitled (unless the contrary shall be
stated in any of the deed(s) or other instrument(s) appointing them) to
exercise all the powers and discretions hereby conferred on Receivers
individually and to the exclusion of the other or others of them.
25
14.2 POWERS OF RECEIVERS
Every Receiver for the time being holding office by virtue of an
appointment made by the Collateral Agent hereunder shall (subject to any
limitations or restrictions expressed in the deed or other instrument
appointing him but notwithstanding any winding-up or dissolution of the
Chargor) have, in relation to the Charged Property, or as the case may be,
that part of the Charged Property in respect of which he was appointed:
(A) all the powers (as varied and extended by the provisions hereof)
conferred by the Conveyancing and Property Ordinance or otherwise by
law on mortgagees (whether or not in possession) and receivers
appointed under the Conveyancing and Property Ordinance; and
(B) the power in the name or on behalf and at the cost of the Chargor to
exercise all the powers and rights of an absolute owner of the Charged
Property or the relevant part thereof and do or omit to do anything
which the Chargor could do.
14.3 ADDITIONAL POWERS OF RECEIVERS
In addition and without prejudice to the generality of the foregoing every
Receiver shall (notwithstanding any winding-up or dissolution of the
Chargor) have the powers specified in Clause 11.1 (Effects).
14.4 RECEIVER TO BE AGENT OF THE CHARGOR
Every Receiver so appointed shall be deemed at all times and for all
purposes to be the agent of the Chargor and the Chargor shall be solely
responsible, jointly and severally, for the acts and defaults of such
Receiver (save in the case of the fraud, negligence, wilful default, breach
of duty or breach of trust in relation to duties by such Receiver) and for
payment of such Receiver's remuneration in respect thereof.
14.5 REMUNERATION OF RECEIVER
Every Receiver shall be entitled to remuneration for his services at a
reasonable rate to be fixed by agreement between him and the Collateral
Agent (or, failing such agreement, to be fixed by the Collateral Agent)
appropriate to the work and responsibilities involved upon the basis of
charging from time to time adopted in accordance with his current practice
or the current practice of his firm.
14.6 MONIES ACTUALLY PAID BY RECEIVER
Only monies actually paid by the Receiver to the Collateral Agent in
satisfaction of the Secured Indebtedness shall be capable of being applied
by the Collateral Agent in satisfaction thereof. The Receiver shall pay
over to the Collateral Agent any monies realised by the Receiver as a
result of the enforcement of the Security (other than monies paid into a
suspense account by such Receiver in accordance with Clause 12.12 (Suspense
Account(s)).
26
14.7 LIMITATION OF LIABILITY
(A) Neither the Collateral Agent nor the Receiver nor any Attorney (as
defined in Clause 16 (Power of Attorney) or agent of such party shall
be liable to any person in respect of any loss or damage whatsoever
which arises out of the realisation of the Charged Property or any
part thereof or from any act, default or omission in relation to the
Security or from any exercise or non-exercise, or the attempted or
purported exercise of, or the failure to exercise any of their
respective powers, authorities or discretions conferred upon them in
relation to the Security or any part of it, unless such loss or damage
is caused by its or his negligence, wilful default, breach of duty,
breach of trust or fraud.
(B) Without prejudice to the generality of Sub-clause (A), entry into
possession of the Charged Property shall not render the Collateral
Agent or the Receiver liable to account as mortgagee in possession or
liable for any loss on realisation or for any default or omission for
which a mortgagee in possession might be liable unless such loss or
damage is caused by its negligence, wilful default, breach of duty,
breach of trust or fraud and, if and whenever the Collateral Agent or
the Receiver enters into possession of the Charged Property, it shall
be entitled at any time to go out of such possession.
14.8 POWER OF APPOINTMENT ADDITIONAL
The foregoing powers of appointment of a Receiver shall be in addition to
and not to the prejudice of all statutory and other powers of the
Collateral Agent under the Conveyancing and Property Ordinance (and so that
the statutory power of sale shall be exercisable without regard to
paragraph 11 of the Fourth Schedule to the said Ordinance) or otherwise and
so that such powers shall be and remain exercisable by the Collateral Agent
in respect of any part of the Charged Property in respect of which no
Receiver has been appointed and notwithstanding that an appointment under
the provisions of this Clause 12 (Appointment of Receiver) shall have
subsisted and been withdrawn in respect of that property or shall be
subsisting in respect of any other part of the Charged Property.
15. INDEMNITY
15.1 INDEMNITY
Without prejudice to any right at law given to trustees, the Chargor
further covenants with and undertakes to each of the Collateral Agent and
any Receiver or Receivers fully to indemnify and keep indemnified it from
and against all liabilities, losses, damages, costs and expenses (including
legal costs and expenses), charges, actions, proceedings, claims and
demands or any other obligation or liability (including, without
limitation, in respect of taxes, duties, levies, imposts and other charges
any indemnity and other amounts which the Collateral Agent is or would
become obliged to pay, upon payment by the Chargor, under such indemnity)
which it may properly incur (except, having regard to the provisions of any
Credit Document, insofar as they are incurred
27
because of fraud, negligence, wilful default or breach of trust on the part
of it whether before or after the Security becomes enforceable):
(A) in consequence of anything done or purported to be done by the
Collateral Agent or any Receiver in relation to the Charged Property
or under this Fixed and Floating Charge or any Credit Document as a
result of or in connection with any failure by the Chargor to comply
with its obligations thereunder to the Collateral Agent or any
Receiver; or
(B) in consequence of any payment in respect of the Secured Indebtedness
(whether made by the Chargor or a third party) being impeached or
declared void for any reason whatsoever; or
(C) in consequence of the breach or non-performance by the Chargor of any
of their respective warranties, representations, covenants or
undertakings herein contained or otherwise relating to all or any part
of the Charged Property; or
(D) in connection with the realisation of the Charged Property (including
the costs of any proceedings in relation to this Fixed and Floating
Charge or to the Secured Indebtedness).
15.2 INTEREST
The amounts payable to the Collateral Agent or the Receiver under Clauses
15.1 (Indemnity) and 18 (Stamp Duty and Taxes) shall carry interest in
accordance with section 2.10 of the Facility Agreement from the date on
which they were paid or incurred by the Collateral Agent or the Receiver
(as the case may be) to the date of actual payment to the Collateral Agent
or, as the case may be, the Receiver under the aforementioned clauses as
well after as before any judgment and such amounts and interest may be
debited by the Collateral Agent to any account of the Chargor, but shall,
in any event (to the extent not fully paid or discharged), form part of the
Secured Indebtedness and accordingly be secured on the Charged Property
under the Security.
16. POWER OF ATTORNEY
16.1 APPOINTMENT AND POWERS
The Chargor hereby irrevocably appoints the following (each an "ATTORNEY"
and collectively the "ATTORNEYS", and acting solely or jointly with the
other Attorneys), namely:
(A) the Collateral Agent;
(B) each and every person to whom the Collateral Agent shall from time to
time have duly delegated the exercise of the power of attorney
conferred by this Clause 16.1 (Appointment and Powers); and
(C) any Receiver appointed hereunder and for the time being holding
office,
28
to be its attorney or attorneys and in its name and otherwise on its behalf
and as its act and deed to sign, seal, execute, deliver, perfect and do all
deeds, instruments, acts and things which may be required (or which the
Collateral Agent, any person falling within Sub-clause (B) or any Receiver
appointed hereunder shall reasonably consider requisite) for carrying out
any obligation imposed on the Chargor, as the case may be, by or pursuant
to this Fixed and Floating Charge (including but not limited to the
obligations of the Chargor under Clause 4.1 (Further Deeds and Documents)
and the covenants referred to in Clause 4.1 (Further Deeds and Documents)),
for carrying out any sale, lease or other dealing by the Collateral Agent
or any such Receiver into effect, for conveying or transferring any legal
estate or other interest in the Charged Property, for getting in the
Charged Property, and generally for enabling the Collateral Agent or any
person falling within Sub-clause (B) or any Receiver to exercise the
respective powers conferred on them by or pursuant to this Fixed and
Floating Charge or by law provided that the power contained in this Clause
16.1 (Appointment and Powers) shall not be exercisable unless and until the
Security shall have become enforceable. The exercise of such power by the
Collateral Agent or any person falling within Sub-clause (B) or any
Receiver shall not put any person dealing with it upon any enquiry as to
whether a Event of Default shall have occurred. Each of the Collateral
Agent, any person falling within Sub-clause (B) and any Receiver shall have
full power to delegate the power conferred on it by Clause 16.1
(Appointment and Powers), but no such delegation shall preclude the
subsequent exercise of such power by the Collateral Agent or any person
falling within Sub-clause (B) or any Receiver (as the case may be) itself
or preclude the Collateral Agent or any person falling within Sub-clause
(B) or any Receiver (as the case may be) from making a subsequent
delegation thereof to some other person; any such delegation may be revoked
by the Collateral Agent or any person falling within Sub-clause (B) or any
Receiver (as the case may be) at any time.
16.2 RATIFICATION
The Chargor shall ratify and confirm all transactions lawfully and properly
entered into by the Collateral Agent or any Receiver or delegate of the
Collateral Agent in the exercise of the Collateral Agent's or such
Receiver's respective powers and all transactions lawfully and properly
entered into, documents executed and things done by the Collateral Agent or
such Receiver or delegate by virtue of the power of attorney given by
Clause 16.1 (Appointment and Powers).
16.3 ACKNOWLEDGEMENT OF CONSIDERATION
The power of attorney hereby granted is as regards the Collateral Agent,
its delegates and any such Receiver (and as the Chargor hereby
acknowledges) granted irrevocably and severally, for value and for security
as part of the Security to secure the several proprietary interests of and
the performance of obligations owed to the respective donees within the
meaning of the Powers of Attorney Ordinance.
29
17. SET-OFF AND CURRENCY
17.1 CURRENCY OF ACCOUNT
(A) Except where specifically provided otherwise, US dollars are the
currency of account and payment for each and every sum at any time due
to the Collateral Agent hereunder provided that payments in respect of
costs and expenses may be made in Hong Kong dollars if incurred in
Hong Kong dollars.
(B) If any sum due from the Chargor under this Fixed and Floating Charge
or any order or judgment given or made in relation hereto has to be
converted from the currency (the "FIRST CURRENCY") in which the same
is payable hereunder or under such order or judgment into another
currency (the "SECOND CURRENCY") for the purpose of (a) making or
filing a claim or proof against the Chargor, (b) obtaining an order or
judgment in any court or other tribunal or (c) enforcing any order or
judgment given or made in relation hereto then:
(i) the Chargor shall indemnify and hold harmless the Collateral
Agent from and against any loss suffered except to the extent
that such loss is suffered as a result of or in connection with
the Collateral Agent's own fraud, negligence, wilful default,
breach of duty or breach of trust; and
(ii) the Collateral Agent shall account to the Chargor for the amount
by which any sum realised by it exceeds the aggregate amount of
all sums owing to it by the Chargor at the time at which such
profit is realised provided that the Collateral Agent shall only
be required to make any payment to the Chargor in relation
thereto if at such time all the payment obligations of the
Chargor hereunder to the Collateral Agent are satisfied,
in each case where such loss or excess arises as a result of any
discrepancy between (1) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second
currency and (2) the rate or rates of exchange at which the Collateral
Agent may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim
or proof.
17.2 SET-OFF
The Chargor waives, and (where incapable of waiver) agrees not to exercise
(unless required to do so by law), any right of set-off or netting, whether
conferred by agreement or law, which it may have against the Collateral
Agent so that it does not reduce any amount payable by it to the Collateral
Agent under this Fixed and Floating Charge.
30
17.3 CURRENCY CONVERSION
For the purpose of the satisfaction of the Secured Indebtedness or for the
purpose of crediting any monies to the Accounts or any suspense account
pursuant to Clause 12.12 (Suspense Account(s)) or making any application
therefrom or for any other purpose in connection with this Fixed and
Floating Charge, the Collateral Agent may (unless otherwise required by
law) convert any monies received, recovered or realised or subject to
application by the Collateral Agent under this Fixed and Floating Charge or
any monies to be credited to any such account (including the proceeds of
any previous conversion under this Clause 17 (Set-off and Currency)) from
their existing currency of denomination into such other currency of
denomination as the Collateral Agent may reasonably think fit and any such
conversion shall be effected at such rate or rates of exchange as may be
agreed by the Collateral Agent in consultation with the Chargor as being
relevant and any rate, method and date so agreed shall be binding on the
Chargor and any costs, expenses or commissions incurred in effecting any
such conversion shall be deducted from the proceeds of any such conversion.
18. STAMP DUTY AND TAXES
The Chargor shall pay all stamp duties, land registry and similar fees,
filing and registration fees and other transaction taxes required in
relation to or for the purpose of procuring the execution, validity and
enforceability of this Fixed and Floating Charge and the Security and shall
indemnify the Collateral Agent and each Receiver appointed hereunder
against any liabilities, costs, claims and expenses resulting from any
failure to pay or any delay in paying the same on a full indemnity basis.
19. AMENDMENTS
This Fixed and Floating Charge may not be amended, modified or waived in
any respect whatsoever, without the prior written consent of the Collateral
Agent given with express reference to this Clause 19 (Amendments) and
expressly stated to be intended to operate as the Collateral Agent's
consent to such amendment, modification or waiver on behalf of the
Requisite Lenders.
20. APPLICATION TO COURT
The Collateral Agent may, at any time after the Security has become
enforceable, apply to the court for an order that the terms of this Fixed
and Floating Charge be carried into execution under the direction of the
Court and for the appointment of a Receiver of the Charged Property or any
part thereof and for any other order in relation to the administration of
the terms of this Fixed and Floating Charge as the Collateral Agent shall
deem fit and it may assent to or approve any application to the Court made
at the instance of the Collateral Agent or on its behalf and the Collateral
Agent shall be indemnified by the Chargor against all costs, charges and
expenses properly incurred by it in relation to any such application or
proceedings.
31
21. PARTIAL INVALIDITY
Every provision contained in this Fixed and Floating Charge shall be
severable and distinct from every other such provision and if at any time
any provision hereof is or becomes illegal, invalid or unenforceable in any
respect under the law of any jurisdiction, neither the legality, validity
or enforceability of the remaining provisions hereof nor the legality,
validity or enforceability of such provision under the law of any other
jurisdiction shall in any way be affected or impaired thereby.
22. NOTICES
22.1 COMMUNICATIONS IN WRITING
Each communication to be made hereunder shall be made in writing and,
unless otherwise stated, shall be made by facsimile or letter.
22.2 ADDRESSES
Any communication or document to be made or delivered by one person to
another pursuant to this Fixed and Floating Charge shall (unless that other
person has by 15 days' written notice to the one specified another address
department, officer or person as the case may be) be made or delivered to
that other person at the address identified with its signature below and
shall be deemed to have been made or delivered (in the case of any
communication made by letter) when left at that address during normal
business hours on a Business Day (or on the next Business Day if not left
during normal business hours on a Business Day) or (as the case may be) 5
days (in the case of local post) and 10 days (in the case of overseas post)
after being deposited in the post postage prepaid in an envelope addressed
to it at that address marked for the attention of any specified department,
officer or person or (in the case of any communication made by facsimile
transmission) when sent to the correct facsimile number of the addressee
identified with its signature below and received in whole and in legible
form by such addressee provided that any communication or document to be
made or delivered by the Chargor or the Collateral Agent shall be effective
only when received by the Chargor or the Collateral Agent, as appropriate,
and then only if the same is expressly marked for the attention of the
department, officer or person identified below with the signature of the
relevant addressee (or such other department, officer or person as the
relevant addressee shall from time to time and in each case by not less
than 3 days' prior notice in writing to the parties hereto have specified
for this purpose).
22.3 ENGLISH LANGUAGE
Each communication and document made or delivered by one party to another
pursuant to this Fixed and Floating Charge shall be in the English language
or accompanied by a translation thereof into English certified (by an
officer of the person making or delivering the same) as being a true and
accurate translation thereof.
32
23. ASSIGNMENT
The Collateral Agent may assign its rights and obligations under this Fixed
and Floating Charge to any successor under the Facility Agreement in
accordance with section 9.7 of the Facility Agreement.
24. COSTS AND EXPENSES
The Chargor further covenants with and undertakes to the Collateral Agent
and any Receiver appointed by the Collateral Agent hereunder or by law
(including more than one such receiver and any substitute receiver) to
reimburse or pay to the Collateral Agent or such Receiver (on the basis of
full indemnity) the amount of all proper costs, charges, liabilities and
expenses including costs, charges or expenses incurred by the Collateral
Agent or such Receiver or any attorney, manager, agent or delegate in
connection with:
(A) the negotiation, preparation, registration, perfection, preservation
or enforcement of this Fixed and Floating Charge and any other
document relating thereto; and
(B) the proper exercise or the attempted proper exercise by or on behalf
of the Collateral Agent or such Receiver of any of the powers of the
Collateral Agent or such Receiver or any other action properly taken
by or on behalf of the Collateral Agent with a view to or in
connection with the enforcement of any obligations of the Chargor
under any of the Credit Documents or the recovery by the Collateral
Agent or any such Receiver from the Chargor of the Secured
Indebtedness then due and payable.
25. CERTIFICATES AND DETERMINATIONS
For all purposes, including any Proceedings (as defined in Clause 27.3):
(a) a determination by the Collateral Agent; or
(b) a copy of a certificate signed by an officer of the Collateral Agent,
of the amount of any indebtedness comprised in the Secured Indebtedness for
the time being or at any time shall, in the absence of manifest error, be
conclusive evidence against the Chargor as to the amount thereof.
26. GOVERNING LAW
This Fixed and Floating Charge is governed by Hong Kong law.
33
27. JURISDICTION
27.1 HONG KONG COURTS
The courts of Hong Kong have non-exclusive jurisdiction to settle any
dispute (a "DISPUTE") arising out of or in connection with this Fixed and
Floating Charge (including a dispute regarding the existence, validity or
termination of this Fixed and Floating Charge or the consequences of its
nullity).
27.2 CONVENIENT FORUM
The parties agree that the court of Hong Kong are the most appropriate and
convenient courts to settle Disputes between them and, accordingly, that
they will not argue to the contrary.
27.3 NON-EXCLUSIVE JURISDICTION
This Clause 27 (Jurisdiction) is for the benefit of all parties hereto
other than the Borrower and the Chargor. As a result and notwithstanding
Clause 27.1 (Hong Kong Courts), it does not prevent any party hereto other
than the Chargor from taking proceedings relating to a Dispute
("PROCEEDINGS") in any other courts with jurisdiction. To the extent
allowed by law, the parties hereto other than the Chargor may take
concurrent Proceedings in any number of jurisdictions.
28. EXECUTION AND COUNTERPARTS
This Fixed and Floating Charge may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same Fixed and
Floating Charge.
IN WITNESS WHEREOF the parties hereto have caused this Fixed and Floating Charge
to be duly executed the day and year first above written.
34
SCHEDULE 1
NOTICE OF CHARGE
[LETTERHEAD OF CHARGOR]
To: INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
00XX XXXXX, XXXX XXXXX
0 XXXXXX XXXX
XXXXXXX, XXXX XXXX
___ MARCH 2007
Dear Sirs,
NOTICE OF CHARGE
We refer to our US dollar interest-bearing deposit accounts (number __________
designated " ______________________________" and number ____________________
designated " ______________________________") with you (the "ACCOUNTS").
A copy of a fixed and floating charge dated ___ March 2007 (the "FIXED AND
FLOATING CHARGE") and made between ourselves and Industrial and Commercial Bank
of China (Asia) Limited (as agent and trustee for the Secured Parties) (the
"COLLATERAL AGENT") is enclosed for your attention and we request that you take
note of its provisions, in particular, the undertaking from the Chargor that it
shall not create any security over the Charged Property (Clause 8.1(D)).
Words and expressions defined in the Fixed and Floating Charge shall, unless
otherwise defined herein, have the same meaning in this notice.
We give you notice of the Fixed and Floating Charge and, for the purposes of the
Fixed and Floating Charge, we irrevocably and unconditionally instruct and
authorise you (notwithstanding any previous instructions which we may have given
you to the contrary) as follows:
(a) To disclose to the Collateral Agent, without any reference to or further
authority from us and without any enquiry by you as to the justification
for such disclosure, such information relating to the Accounts and all
credit balances now or at any time in future on the Accounts, all debts
from time to time represented by such credit balances and all our other
rights accruing or arising in relation to the Accounts (the "DEPOSIT") as
the Collateral Agent may, at any time and from time to time, request you to
disclose to it.
(b) To at all times hold the Deposit relating to the H3C Debt Service Account
to the exclusive order of the Collateral Agent.
(c) To hold the part of the Deposit relating to the (i) H3C Debt Service
Reserve Account to the exclusive order of the Collateral Agent upon
receiving notice from the Collateral Agent that there has occurred an Event
of Default or (ii conversion of the floating charge created by Clause
3.1(D) into a fixed charge pursuant to Clause 5.1 or 5.2, subject to any
reconversation pursuant to Clause 5.3.
35
(d) To, immediately upon receiving notice from the Collateral Agent that the
Security has become enforceable, comply with the terms of any written
notice statement or instructions (including any instructions as to the
payment of the Deposit (or any part of it), the renewal or extension of the
term of the Deposit, or the breaking of the term of the Deposit) in any way
relating or purporting to relate to the Fixed and Floating Charge and/or
the Accounts and/or the Deposit which you may receive at any time and from
time to time from the Collateral Agent without any reference to or further
authority from us and without any enquiry by you as to the justification
for such notice, statement or instructions or the validity thereof.
(e) To advise us of any withdrawals or transfer of moneys from the Accounts as
soon as practicable.
The instructions and authorisations which are contained in this letter shall
remain in full force and effect until the Collateral Agent gives you notice in
writing revoking them. This notice is governed by Hong Kong law.
Please acknowledge receipt of this notice and confirm your agreement to it, by
executing and returning an original copy of the Form of Acknowledgement attached
to this notice to the Collateral Agent at 33rd Floor, ICBC Tower, 0 Xxxxxx Xxxx,
Xxxxxxx, Xxxx Xxxx with a copy to us.
Yours faithfully,
----------------------------------------
For and on behalf of
Huawei-3Com Co., Limited
36
SCHEDULE 2
FORM OF ACKNOWLEDGEMENT
[LETTERHEAD OF ICBC]
To: INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
00XX XXXXX, XXXX XXXXX
0 XXXXXX XXXX
XXXXXXX, XXXX XXXX
(as agent and trustee for the Secured Parties, the "COLLATERAL AGENT")
With a copy to:
Huawei-3Com Co., Limited
Suites 3013-3014,
30/F One International Finance Centre,
0 Xxxxxxx Xxxx Xxxxxx, Xxxxxxx,
Xxxx Xxxx
(the "COMPANY")
___ MARCH 2007
Dear Sirs,
ACKNOWLEDGEMENT OF NOTICE OF CHARGE
We acknowledge receipt of a Notice of Charge dated ___ March 2007 (the "NOTICE")
(a copy of which is attached to this letter) and the copy of the Fixed and
Floating Charge enclosed with the Notice. We take note of the provisions
contained in the Charge, in particular, the undertaking made by the Chargor
under Clause 8.1(D). Words and expressions defined in the Notice and the Fixed
and Floating Charge shall have the same meanings in this letter.
In consideration of the Secured Parties agreeing to provide finance and
financial support pursuant to the Credit Documents, we represent and undertake
to the Collateral Agent in the terms set out in this letter.
(a) We will act in accordance and comply with the terms of the Notice.
(b) No mortgage, charge, pledge, lien, security assignment, hypothecation or
trust arrangement for the purpose of providing security and any other
encumbrance or security interest of any kind having the effect of securing
any obligation of any person (including, without limitation, the deposit of
moneys or property with a person with the intention of affording such
person a right of lien, set-off, combination or counter-claim) and any
other agreement or any other type of arrangement having a similar effect
(including, without limitation, any "flawed-asset" or "hold back"
arrangement) exists in our favour on, over or with respect to the Accounts
or the Deposit or any part thereof.
37
(c) No rights of counter-claim, rights of set-off or combination of accounts or
any other equities whatsoever have arisen in our favour against the Company
in respect of the Accounts or the Deposit or any part thereof, and we shall
not assert or seek to exercise any such rights or equities.
(d) We have not, as at the date hereof, received any notice that any other
person has or will have any right or interest whatsoever in, or has made or
will be making any claim or demand or be taking any action whatsoever
against, the Accounts or the Deposit or any part thereof, and if, after the
date hereof, we receive any such notice, we shall immediately give written
notice thereof to the Collateral Agent.
We have made the representations and given the undertakings set out in this
letter in the knowledge that they are required by the Collateral Agent in
connection with the security which has been granted by the Company in favour of
the Collateral Agent under the Fixed and Floating Charge.
This letter is for the benefit of the Collateral Agent as agent and trustee for
the Secured Parties and is governed by Hong Kong law.
Yours faithfully,
Signed for and on behalf of
INDUSTRIAL AND COMMERCIAL BANK OF CHINA
(ASIA) LIMITED
By
-------------------------------------
(Print Name):
--------------------------
38
SCHEDULE 3
NOTICE OF CHARGE
[LETTERHEAD OF CHARGOR]
To: Hangzhou Huawei-3Com Technology Co., Ltd.
(CHINESE CHARACTERS)
(CHINESE CHARACTERS)
(CHINESE CHARACTERS): 310053
Hangzhou Queenhive Software Co., Ltd.
(CHINESE CHARACTERS)
(CHINESE CHARACTERS): 310053
___ MARCH 2007
Dear Sirs,
NOTICE OF CHARGE
A copy of a fixed and floating charge dated ___ March 2007 (the "CHARGE") and
made between ourselves and Industrial and Commercial Bank of China (Asia)
Limited (as agent and trustee for the Secured Parties) (the "COLLATERAL AGENT")
is enclosed for your attention and we request that you take note of its
provisions.
Words and expressions defined in the Charge shall, unless otherwise defined
herein, have the same meaning in this notice.
We give you notice of the Charge and, for the purposes of the Charge, we
irrevocably and unconditionally instruct and authorise you (notwithstanding any
previous instructions which we may have given you to the contrary) to make
payment of the amount of any dividends which may be declared by you directly to
the account of Huawei-3Com Co., Limited no. _______________ with Industrial and
Commercial Bank of China (Asia) Limited at 00xx Xxxxx, XXXX Xxxxx, 0 Xxxxxx
Xxxx, Xxxxxxx, Xxxx Xxxx and/or to such other account of Huawei-3Com Co.,
Limited with such bank as the Collateral Agent may notify to you.
The instructions and authorisations which are contained in this letter shall
remain in full force and effect until the Collateral Agent gives you notice in
writing revoking them. This notice is governed by Hong Kong law.
Please acknowledge receipt of this notice and confirm your agreement to it, by
executing and returning an original copy of this notice to the Collateral Agent
at 33rd Floor, ICBC Tower, 0 Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx with a copy to us.
39
Yours faithfully,
----------------------------------------
For and on behalf of
Huawei-3Com Co., Limited
40
Signed, acknowledged and agreed by
----------------------------------------
For and on behalf of
Hangzhou Huawei-3Com Technology Co.,
Ltd. / Hangzhou Queenhive Software Co.,
Ltd.
Date:
------------------
EXECUTION PAGES
THE CHARGOR
Executed as a deed by affixing the common seal ) XXXX X. XXXXXXX
of HUAWEI-3COM CO., LIMITED ) XXXXXX X. XXXXXXX, III
)
in the presence of: ) SEAL AFFIXED
Xxxx X. Xxxxxxx
Director
Xxxxxx X. Xxxxxxx, III
Director
Address: Suites 3013-3014,
30/F One International Finance Centre,
0 Xxxxxxx Xxxx Xxxxxx, Xxxxxxx,
Xxxx Xxxx
Facsimile Number: _______________________
Attention: _______________________
EXECUTION PAGES
THE COLLATERAL AGENT
Executed as a deed by affixing the common seal of )
INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) ) SEAL AFFIXED
LIMITED )
in the presence of: )
XXXX XXXX XXX XXXXXXX
Director
XXXXX XXX XXXX XXXXX
Director/Secretary
Address: 00xx Xxxxx, XXXX Xxxxx, 0 Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx
Facsimile Number: [PERSONAL INFORMATION OMITTED FOR SECURITY PURPOSES]
Attention: _______________________
CONFORMED COPY
Dated 3 April 2007
HUAWEI-3COM CO., LIMITED
as Chargor
INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
as Collateral Agent
----------
H3C FIXED AND FLOATING CHARGE
----------
Xxxxxxxxx and May
00xx Xxxxx, Xxxxxxx Xxxxx
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxx Xxxx
(RMGG/AHLL)
(HK070060022)
CONTENTS
CLAUSE PAGE
------ ----
1. INTERPRETATION AND DEFINITIONS 1
2. COVENANT TO PAY AND NATURE OF SECURED INDEBTEDNESS 3
3. SECURITY 3
4. PERFECTION OF SECURITY AND FURTHER ASSURANCE 7
5. PROTECTION OF SECURITY AND CRYSTALLISATION OF FLOATING CHARGE 9
6. PAYMENTS INTO AND OUT OF THE CHARGED ACCOUNTS 10
7. REPRESENTATIONS 11
8. COVENANTS AND UNDERTAKINGS 12
9. DEFAULT PROCEDURE 14
10. CHATTELS AND FIXTURES 14
11. EFFECTS OF THE SECURITY BECOMING ENFORCEABLE 14
12. PRESERVATION OF RIGHTS 19
13. PROTECTION OF PURCHASERS 24
14. APPOINTMENT OF RECEIVER 24
15. INDEMNITY 26
16. POWER OF ATTORNEY 27
17. SET-OFF AND CURRENCY 29
18. STAMP DUTY AND TAXES 30
19. AMENDMENTS 30
20. APPLICATION TO COURT 30
21. PARTIAL INVALIDITY 31
22. NOTICES 31
23. ASSIGNMENT 32
24. COSTS AND EXPENSES 32
25. CERTIFICATES AND DETERMINATIONS 32
26. GOVERNING LAW 32
27. JURISDICTION 33
28. EXECUTION AND COUNTERPARTS 33
SCHEDULE 1 NOTICE OF CHARGE 34
SCHEDULE 2 FORM OF ACKNOWLEDGEMENT 36
SCHEDULE 3 NOTICE OF CHARGE 38
