SHAREHOLDER'S LOAN AGREEMENT
THIS SHAREHOLDER'S LOAN AGREEMENT (the AGREEMENT) is entered into and executed
on_________, 200_
BY AND BETWEEN
UMW ACE (L) LTD., a company registered in Malaysia and its legal address at
Xxxxxx Xxxxx, Xxxxx Xxxxxx, X.X. Xxx 00000, 00000 Xxxxxx X.X., Xxxxxxxx (the
LENDER); and
WUXI SEAMLESS OIL PIPE CO., LTD , a limited liability company incorporated under
the laws of the People's Republic of China and registered with SAIC with its
registered address at Xx. 00, Xxxxxxxx Xxxx, Xxxx High and New Technology
Industry Development Zone, Jiangsu Province, People's Republic of China (the
BORROWER).
WHEREAS,
A. The Lender is the majority shareholder of the Borrower by virtue of its
holding fifty one percent (51%) equity in the Borrower.
B. The Borrower desires to take a shareholder's loan from the Lender, and the
Lender is willing, subject to the terms and conditions of this Agreement,
to extend such loan to the Borrower for the Borrower's on-going expansion
programmes.
NOW, THEREFORE, the Borrower and the Lender agree as follows:
1. DEFINITION
In this Agreement and the Schedule attached (the Schedule) hereto, unless
the context otherwise requires, the following expressions shall have the
meanings set out opposite them:
1.1 "BUSINESS DAY" shall mean a day on which commercial banks in
the People's Republic of China are open for
Business.
1.2 "EXPIRY DATE" shall mean the agreed date of which this
Agreement may be deemed to end as stated in
Clause 2.
1.3 "EXPANSION PROGRAMMES" shall mean capital expenditures which include
the purchase of plant and machineries as well
as the construction of plant.
1.4 "INTEREST RATE" shall mean the amount of interest that shall be
imposed subject to the conditions in Clause 3
at the rate and calculation as shown in Item 2
of the Schedule and which may be varied at any
time or from time to time by a fourteen (14)
days written notice from the Lender to the
Borrower.
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1.5 "LOAN" shall mean the amount of monies agreed by the
parties that shall be borrowed by the Borrower
from the Lender that shall be subjected to the
conditions as stated in Clause 2. Details of
the calculation of the interest rate, interest
payment and interest calculation are as shown
in the Schedule.
1.6 "OVERDUE INTEREST" means interest that shall be calculated based
on the loan amount overdue at an interest rate
of one (1) per cent (1%) which interest shall
be in addition to the interest provided in
Clause 3 and accrued on a daily basis from the
repayment due date until the date of actual
repayment.
1.7 "PRC" shall mean the People's Republic of China.
1.8 "SIBOR" shall mean the Singapore Inter Bank Offered
Rate. The one (1) month/ three (3) months/ six
(6) months SIBOR rate which may be varied at
any time or from time to time.
1.9 "USD" means the lawful currency of the United States
of America.
2. THE SHAREHOLDER'S LOAN
Subject to the terms and conditions of this Agreement, the Lender hereby
provides the Borrower with a loan of USD ______ million (the LOAN)
commencing on the _______[date] and ending at the expiration of a ____
years period on _____[date] (the EXPIRY DATE) in accordance with the
provisions hereof.
3. INTEREST
3.1 The Loan shall bear interest, to be adjusted, from the date it is drawn
down to (but not including) its repayment. The details of the interest
rate, interest payment and interest calculation are as shown in the
Schedule.
3.2 Interest hereunder shall be computed on the basis of a year of three
hundred sixty (360) days for the actual number of days elapsed.
3.3 The Borrower will bear the interest and principal as provided in this
Agreement without deduction of any taxes, imposts or duties, present or
future, withheld at the source by the Borrower, which are levied or
imposed by any governmental or other authority or agency having the power
to tax.
4. REPAYMENT
The Borrower will, repay the interest due and capital repayment as per
item 5 of the Schedule. The Borrower must repay the Loan in full, both in
interest and in principal, on or before the Expiry Date, unless otherwise
agreed. Should there be any late payment, the Lender shall have the right
to charge the Borrower overdue interest.
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5. PAYMENTS
All payments to be made hereunder shall be made in United States Dollars
(USD). Payments due hereunder shall be made to a bank designated by the
Lender to whom such payment is to be made.
6. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
6.1 Corporate Authority: The Borrower has full power and authority to enter
into this Agreement, to make the borrowing hereunder, and to incur the
obligations provided for herein, all of which have been duly authorized by
all proper and necessary corporate action.
6.2 Binding Agreement: This Agreement constitutes the valid and legally
binding obligation of the Borrower enforceable in accordance with its
terms.
6.3 The Borrower warrants to inform the Lender in writing forthwith in the
event of any litigation, arbitration or enforcement which have or may have
an adverse effect on the Borrower and shall provide with the Lender all
relevant updates and information as reasonably required from time to time
by the Lender.
7. CHANGE OF PRESENT SHAREHOLDINGS
In the event of any change in the share ownership of the Borrower that
results in the Lender holding less than fifty one per cent (51%) of the
share ownership of the Borrower, the Lender is at liberty to invoke Clause
8 of this Agreement save and except where the Lender gives its written
approval.
8. MANAGEMENT STRUCTURE OF THE BORROWER
This Agreement and the various facilities and services rendered by the
Lender is made on the basis that the structure of the management of the
Borrower remains intact in its present form. In the event that the present
management structure is changed then in such an event the Lender has the
absolute right and/or the option to completely renegotiate, modify and/or
completely withdraw all the facilities and services rendered to the
Borrower and to terminate this Agreement. Thereafter neither party shall
be entitled to any compensation whatsoever as a consequence of such
termination by the Lender, save that such termination shall not prejudice
or affect the rights of either party against the other in respect of any
breach of this Agreement or in respect of any money payable by one (1)
party to the other in relation to any period prior to termination.
9. BUSINESS DAYS: PAYMENT ON NON-BUSINESS DAYS
Whenever any payment to be made under this Agreement shall be stated to be
due on a day which is not a Business Day, such payment shall be made on
the next succeeding day which is a Business Day, and such extension of
time shall in such case be included in the computation of interest payable
on the applicable Loan.
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10. ASSIGNMENT
Upon notice to the Borrower the Lender shall have the right to assign the
rights and/or obligations under this Agreement to any third party. The
Borrower shall cooperate in effecting the assignment and perform to this
assignee all its obligations to the Lender under this Agreement.
11. GOVERNING LAW AND JURISDICTION
This Agreement is a contract made under, and shall be governed by and
construed in accordance with, the laws of PRC. Each party agrees that any
disputes arising from the performance of, or in connection with this
Agreement shall be referred to and solved by means of arbitration in
accordance with the Rules of Arbitration of the China International
Economic and Trade Arbitration Commission ("CIETAC RULES"). The
arbitration shall be carried out in Shanghai by an arbitral tribunal
consisting of three (3) arbitrators appointed in accordance with the
CIETAC Rules and shall have its seat in Shanghai. The arbitration shall be
administered by the China International Economic and Trade Arbitration
Commission. The arbitration award is final and shall be binding upon all
parties.
12. MISCELLANEOUS
12.1 This Agreement may be amended, and the observance of any provision of this
Agreement may be waived, with (and only with) the consent of all of the
parties hereto.
12.2 The headings of this Agreement are inserted for convenience of reference
only and do not constitute a part of this Agreement.
12.3 Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction, shall be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.
12.4 The Borrower shall be responsible for relevant charges and taxes charged
by the governmental departments and other organizations for registration
or transfer. In the event that the Borrower fails to make the payments in
accordance with the provisions of this Agreement and causes the Lender to
issue reminder, or claims in whatever form for whatever reasons (including
hiring of a third company), all costs and expenses incurred in connection
thereto (including but not limited to the handling charge, legal costs,
travel costs, auction fee, arbitration costs) shall be borne by the
Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed for and on their behalf by one of their authorized officers, as of the
day and year first above written.
Signed by )
for and on behalf of )
UMW ACE )
(L) LTD. ) /s/
In the presence of: ) ..................................
/s/
..................................
Signed by )
for and on behalf of )
WUXI SEAMLESS OIL )
PIPE CO., LTD. ) /s/
In the presence of : ) ..................................
/s/
..................................
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SCHEDULE
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1. Tenure Five (5) years.
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2. Interest Rate Six (6) months SIBOR + 2 % p.a
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3. Interest Payment Interest is payable before the ___ of every
month for sixty (60) months until _______.
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4. Interest Calculation Interest shall be calculated from the date of
drawdown on the actual number of days elapsed
on a three hundred sixty (360) days year using
prior month end prevailing rate.
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5. Principal Repayment Total principal sum of USD _____ million is
repaid via ten (10) equal quarterly repayment
of USD _______ as follows:
1st repayment- before ___________;
2nd repayment -before ___________;
3rd repayment - before ___________;
4th repayment - before ___________;
5th repayment - before ___________;
6th repayment - before ___________;
7th repayment - before ___________;
8th repayment - before ___________;
9th repayment - before ___________; and
10th repayment - before ___________.
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6. Overdue Interest 1% p.a above the prescribed Interest Rate.
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SCHEDULE
NO. DATE OF AGREEMENT AMOUNT TERM
--- ----------------- ------ ----
1. April 28, 2005 US$4.8 million April 28, 2005 to April 27, 2010
2. May 20, 2005 US$30 million May 20, 2005 to May 19, 2010
3. December 15, 2005 US$9.435 million December 16, 2005 to December 15, 2010
4. February 22, 2006 US$9.065 million February 22, 2006 to December 21, 2010
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