Dated 22 November2010 HARBINELECTRIC, INC. asBorrower and CHINA DEVELOPMENT BANK CORPORATIONHONG KONG BRANCH (LPl/L) asLender USD35,000,000and RMB100,000,000 TERMLOAN FACILITY AGREEMENT KING& WOOD 9/F.,Hutchison House Central,Hong Kong Tel.:(852) 2848 4848 Fax:(852) 2845 2995 Ref.:710110036/CR/JL

 

(b)

any other person who is a director or officer of:

 

(1)

such specified person,

 

(2)

any subsidiary of such specified person,

 

(3)

any person described in (a) above, or

 

(c)

any spouse, parent, child, brother or sister of any personal described in (a) or (b) above;

 

(iii)

“applicable law or regulation” includes any law, regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

 

(iv)

a document is in “agreed form” if it is agreed and initialled for the purpose of identification as such by the Borrower and the Lender;

 

(v)

“assets” includes present and future properties, revenues and rights of every description;

 

(vi)

“authorisation” means:

 

(a)

an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration; or

 

(b)

in relation to anything which will be fully or partly prohibited or restricted by law if a government agency intervenes or acts in any way within a  specified  period  after lodgement,  filing,  registration or notification, the expiry of that period without intervention or action;

 

(vii)

“business day” means a day (other than a Saturday or Sunday) on which banks are open for general business in New York, Hong Kong and (if such reference relates to a date for a payment in US Dollars) London or (if such reference relates to a date for a payment in RMB) Shanghai;

(viii)

“contractual obligations” means, as to any person, any provision of any security issued by such person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument or arrangement (whether in writing or otherwise) to which such person is a party or by which it or any of such person's property is bound;

 

(ix)

“control” means the power to direct the management and policies of a body corporate, whether through the ownership of voting capital, by contract or otherwise and “controlled” shall be construed accordingly;

 

(x)

a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

 

(xi)

“governmental agency” means any government or any governmental agency, semi-governmental or judicial entity or authority (including, without limitation, any stock exchange or any self-regulatory organisation established under statute);

 

(xii)

“holding company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a subsidiary;

 

(xiii)

“including” shall be construed as “including without limitation” (and cognate expressions shall be construed similarly);

 

(xiv)

“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

(xv)

“indirect tax” means any goods and services tax, consumption tax, value added tax or any tax of a similar nature;

 

(xvi)

“material adverse effect” means a material adverse effect on (a) the property, business, operations, financial condition, liabilities or capitalization of the Group , taken as a whole, (b) the ability of any Obligor to perform its payment obligations or any of its material obligations under any of the Finance Documents to which it is a party, (c) the validity or enforceability of any of the Finance Documents, (d) the material rights and remedies of the Lender under any of the Finance Documents or (e) the timely repayment of the Loan or payment of interest accrued or any other amount payable by the Borrower under this Agreement;

 

(xvii)

“month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

 

(a)

if the numerically corresponding day is not a business day, that period shall end on the next business day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding business day;

 

(b)

if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last business day in that calendar month; and

 

(c)

if an Interest Period begins on the last business day of a calendar month, that Interest Period shall end on the last business day in the calendar in which that Interest Period is to end;

(xviii)

“subsidiary” means in relation to any company or corporation, a company or corporation:

 

(a)

which is controlled, directly or indirectly, by the first mentioned company or corporation;

 

(b)

more than half the issued equity share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or

 

(c)

which is a subsidiary of another subsidiary of the first mentioned company or corporation, and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

(xix)

a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

 

(xx)

a provision of law is a reference to that provision as amended or re-enacted; and

(xxi)

unless a contrary indication appears, a time of day is a reference to Hong Kong time.

(b)

Clause and Schedule headings are for ease of reference only.

(c)

Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

(d)

A Potential Event of Default or an Event of Default is “continuing” if it has not been remedied or waived.

(e)

Where this Agreement specifies an amount in a given currency (the “specified currency”) “or its equivalent”, the “equivalent” is a reference to the amount of any other currency which, when converted into the specified currency utilising the Lender's spot rate of exchange for the purchase of the specified currency with that other currency at or about 11 a.m. on the relevant date, is equal to the relevant amount in the specified currency.

1.3

 

(a)

“USD” or “US Dollars” or “Dollars” denotes the lawful currency of the United States of America.

 

(b)

“RMB” denotes the lawful currency of the PRC.

2.1

 

Subject to the terms of this Agreement, the Lender make available to the Borrower:

 

(a)

a US Dollar term loan facility in an aggregate amount equal to the Facility A Commitment; and

 

(b)

a RMB term loan facility in an aggregate amount equal to the Facility B Commitment.

2.2

(a)

Subject to paragraph (b) below, on the date of this Agreement, the currency and amount of the Commitment of the Lender in respect of each Facility is the currency and amount set out in Schedule 1 (Commitments) in respect of that Facility.

(b)

The Commitments of the Lender are subject to any cancellation or reduction thereof in accordance with this Agreement.

3.1

3.2

4.1

The Borrower may not deliver the first Utilisation Request unless all conditions precedent set out in Part A of Schedule 2 (Conditions Precedent) have been satisfied in accordance with this Clause 4 (Conditions of Utilisation). The Lender shall notify the Borrower promptly upon being satisfied with the same.

4.2

The Borrower's right to submit a Utilisation Request (including the first Utilisation Request) is further subject to all conditions precedent set out in Part B of Schedule 2 (Conditions Precedent) having been satisfied in accordance with this Clause 4 (Conditions of Utilisation).

4.3

The Borrower shall be deemed to have satisfied the conditions precedent in this Clause 4 (Conditions of Utilisation) if:

 

(ii)

no Material Adverse Change has occurred and no change in applicable law or regulation or in the interpretation thereof shall be applicable that either restrains or prevents or imposes materially adverse conditions upon the transactions contemplated by or in connection with the Finance Documents.

4.4

All copies of documents delivered to the Lender as required under this Clause 4 (Conditions of Utilisation) shall be certified by an Authorised Person as being true and complete copies of the originals.

5.1

5.2

(a)

Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

(i)

it identifies the Facility to be utilised;

 

(ii)

the proposed Utilisation Date is a business day within the Availability Period applicable to that Facility;

 

(iii)

the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and

 

(iv)

the bank account specified in the Utilisation Request to which the proceeds of the Utilisation are to be credited is a bank account of the Borrower maintained with a bank acceptable to the Lender or such other account as is acceptable to the Lender.

(b)

Only one Loan may be requested in each Utilisation Request.

5.3

(a)

The currency specified in each Utilisation Request utilising Facility A and Facility B must be US Dollars and RMB respectively.

(b)

The amount of the proposed Loan must be an amount which is not more than the Available Facility in respect of the corresponding Facility and which is a minimum of USD5,000,000 (in the case of Facility A) or RMB20,000,000 (in the case of Facility B) or, if less, the Available Facility in respect of that Facility.

5.4

 

If the conditions set out in Clause 4 (Conditions of Utilisation) and 5.1 (Delivery of a Utilisation Request) to 5.3 (Currency and amount) above have been met, the Lender shall make the Loan available to the Borrower on the Utilisation Date.

5.5

 

On the expiry of the Availability Period (in the principal financial centre of the country of the relevant currency):

 

(a)

the Available Facility (if any) in respect of each Facility shall be immediately and automatically reduced to zero; and

 

(b)

the Commitment under each Facility shall be immediately and automatically reduced by the amount (if any) of the Available Facility in respect of that Facility immediately before the reduction to zero of that Available Facility in accordance with paragraph (a) above.

6.1

6.2

 

The Borrower may not reborrow any part of a Facility which is repaid.

7.1

 

If, at any time, it is or will become unlawful in any applicable jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to make, fund or allow to remain outstanding any Loan:

 

(a)

upon the Lender notifying the Borrower of that event, the Commitments of the Lender will be immediately cancelled; and

 

(b)

the Borrower shall repay the Loans on the last day of the Interest Period of each Loan occurring after the Lender has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Borrower (being no earlier than the last day of any applicable grace period permitted by law).

7.3

 

(a)

Upon the occurrence of a Change of Control:

 

(i)

the Borrower shall promptly notify the Lender upon becoming aware of that event; and

 

(ii)

the Lender may, by not less than 30 days notice to the Borrower, cancel the Facilities and declare all outstanding Loans together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facilities will be cancelled and all such outstanding amounts will become immediately due and payable.

 

(b)

For the purpose of this Clause 7.3 (Change of Control), a “Change of Control” means the occurrence of any of the following event:-

 

(i)

the Permitted Holders cease to be the beneficial owners, directly or indirectly, of a majority of the total voting power of the voting shares of the Borrower or of at least 30% of the total voting power of the voting shares of the Borrower or any person or persons, acting together, other than the Permitted Holders become the beneficial owner(s) of a higher percentage of the total voting power of the voting shares of the Borrower than that of which the Permitted Holders are beneficial owners, directly or indirectly, whether as a result of the issuance of securities of the Borrower, any merger, consolidation, liquidation or dissolution of the Borrower, any direct or indirect transfer of securities by the Permitted Holders or otherwise (for this purpose, the Permitted Holders will be deemed to beneficially own any voting shares of the specified company held by a parent company so long as the Permitted Holders beneficially own, directly or indirectly, in the aggregate a majority of the total voting power of the voting shares of such parent company); or

 

(ii)

the sale, transfer, assignment, lease, conveyance or other disposition, directly or indirectly, of all or substantially all the assets of the Borrower and its subsidiaries, considered as a whole (other than a disposition of such assets as an entirety or virtually as an entirety to a wholly owned subsidiary or one or more Permitted Holders), shall have occurred, or the Borrower merges consolidates or amalgamates with or into any other person (other than one or more Permitted Holders) or any other person (other than one or more Permitted Holders) merges, consolidates or amalgamates with or into the Borrower, in any such event pursuant to a transaction in which the outstanding voting shares of the Borrower is reclassified into or exchanged for cash, securities or other assets, other than such transaction where:

 

(1)

the outstanding voting shares of the Borrower is reclassified into or exchanged for other voting shares of the Borrower or for the voting shares of the surviving entity, and

 

(2)

the holders of the voting shares of the Borrower immediately prior to such transaction own, directly or indirectly, not less than a majority of the voting shares of the Borrower or the surviving entity immediately after such transaction and in substantially the same proportion as before the transaction; or

 

(iii)

individuals who on the date of this Agreement constitute the board of directors  (together with any  new directors  whose election  or appointment by such board or whose nomination for election by the shareholders of the Borrower is approved by a vote of not less than three-fourths of the directors then still in office who are either directors on the date of this Agreement or whose election or nomination for election has been previously so approved) cease for any reason to constitute a majority of the board of directors then in office; or the shareholders of the Borrower shall have approved any plan of liquidation or dissolution of the Borrower.

7.4

 

(a)

The Borrower may, if it gives the Lender not less than one (1) month's (or such shorter period as the Lender may agree) prior notice, prepay on an Interest Payment Date or a Repayment Date the whole or any part of any Loan (but, if in part, being an amount that is an integral multiple of USD500,000 (in the case of a Facility A Loan) or RMB2,000,000 (in the case of a Facility B Loan)).

 

(b)

A Loan may be prepaid only after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).

7.5

(a)

(b)

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

(c)

The Borrower may not reborrow any part of a Facility which is prepaid.

(d)

The Borrower shall not repay or prepay all or any part of any Loan or reduce any Commitment except at the times and in the manner expressly provided for in this Agreement.

(e)

(f)

Any prepayment under Clause 7.3 (Change of Control) or Clause 7.4 (Voluntary Prepayment) shall satisfy the obligations under Clause 6.1 (Repayment of Loans) in inverse chronological order.

8.1

 

(a)

Margin; and

 

(b)

in relation to a Facility A Loan, LIBOR and in relation to a Facility B Loan, SHIBOR.

8.2

8.3

 

(a)

If the Borrower fails to pay any amount payable by it under this Agreement on its due date, interest shall accure on the Unpaid Sum from the due date to the date of actual payment (both before and after judgment) at a rate which is five per cent. (5%) higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted a Loan for successive Interest Periods, each of a duration selected by the Lender (acting reasonably). Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Borrower on demand by the Lender.

 

(b)

If any Unpaid Sum consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan.

 

(c)

Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.

8.4

9.1

 

(b)

Each Interest Period for a Loan shall start on the Utilisation Date or (if a Loan has already been made, whether or not in respect of the same Facility) on the last day of the preceding Interest Period of such Loan.

 

(c)

An Interest Period shall not extend beyond the Final Maturity Date.

9.2

9.3

10.1

10.2

(a)

Subject to any alternative basis agreed and consented to as contemplated by paragraphs (a) and (b) of Clause 10.3 (Alternative basis of interest or funding), if a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on that Loan for the Interest Period shall be the rate per annum which is the sum of:

 

(i)

the Margin; and

 

(ii)

the rate notified to the Borrower by the Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum the cost to the Lender of making, funding or allowing to remain outstanding that Loan from whatever source it may reasonably select.

(b)

In this Agreement “Market Disruption Event” means:

 

(i)

at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available or the Screen Rate is zero or negative and none or only one of the Reference Banks supplies a rate to the Lender to determine LIBOR for US Dollars or SHIBOR for RMB (as the case may be) for the relevant Interest Period;

 

or

 

(ii)

before noon (Hong Kong time) on the business day immediately following the Quotation Day for the relevant Interest Period, the Lender (acting in good faith) notifies the Borrower that the cost to it of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR or SHIBOR (as the case may be).

10.3

(a)

If a Market Disruption Event occurs and the Lender or the Borrower so requires, the Lender and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

(b)

Any alternative basis agreed pursuant to paragraph (a) above in writing by the Lender and the Borrower shall be binding on each of them.

(c)

For the avoidance of doubt, in the event that no substitute basis is agreed at the end of the thirty day period, the rate of interest shall continue to be determined in accordance with the terms of this Agreement.

10.4

12.1

(a)

In this Clause 12 (Tax Gross Up and Indemnities):

 

“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.

 

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document.

 

“Tax Payment” means an increased payment made by the Borrower to the Lender under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).

(b)

Unless a contrary indication appears, in this Clause 12 (Tax Gross Up and Indemnities) a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

12.2

(a)

(b)

The Borrower shall promptly upon becoming aware that the Borrower must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly.

(c)

If the Borrower is required to make a Tax Deduction, the Borrower shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(d)

12.3

(a)

 

(i)

any Tax imposed on and calculated by reference to the net income actually received or receivable by the Lender (but, for the avoidance of doubt, not including any sum deemed for purposes of Tax to be received or receivable by the Lender but not actually receivable) by the jurisdiction in which the Lender is incorporated; or

 

(ii)

any Tax imposed on and calculated by reference to the net income of the office or offices of the Lender through which the Lender will perform its obligations under this Agreement actually received or receivable by the Lender (but, for the avoidance of doubt, not including any sum deemed for purposes of Tax to be received or receivable by the Lender but not actually receivable) by the jurisdiction in which such office or offices the Lender is/are located.

(b)

The Lender intending to make a claim under paragraph (a) shall notify the Borrower of the event giving rise to the claim.

12.4

 

If the Borrower makes a Tax Payment and the Lender determines that:

 

(a)

a Tax Credit is attributable to that Tax Payment; and

 

(b)

the Lender has obtained, utilised and retained that Tax Credit,

12.5

 

The Borrower shall:

 

(a)

pay all stamp duty, registration and other similar Taxes payable in respect of any Finance Document, and

 

(b)

within three business days of demand, indemnify the Lender against any cost, loss or liability the Lender incurs in relation to any stamp duty, registration or other similar Tax paid or payable in respect of any Finance Document.

12.6

(a)

All consideration expressed to be payable under a Finance Document by any Obligor to the Lender shall be deemed to be exclusive of any indirect tax. If any indirect tax is chargeable on any supply made by the Lender to any Party in connection with a Finance Document, that Party shall pay to the Lender (in addition to and at the same time as paying the consideration) an amount equal to the amount of the indirect tax.

(b)

Where a Finance Document requires any Party to reimburse the Lender for any costs or expenses, that Party shall also at the same time pay and indemnify the Lender against all indirect tax incurred by the Lender in respect of the costs or expenses to the extent the Lender reasonably determines that it is not entitled to credit or repayment in respect of the indirect tax.

13.1

(a)

Subject to Clause 13.3 (Exceptions) the Borrower shall, within three business days of a demand by the Lender, pay the Lender the amount of any Increased Costs incurred by the Lender or any of its affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any applicable law or regulation made after the date of this Agreement. The term “applicable law or regulation” in this paragraph (a) shall include, without limitation, any law or regulation concerning capital adequacy, prudential limits, liquidity, reserve assets or Tax.

(b)

In this Agreement “Increased Costs” means:

 

(i)

a reduction in the rate of return from a Facility or on the Lender's (or its affiliate's) overall capital (including, without limitation, as a result of any reduction in the rate of return on capital brought about by more capital being required to be allocated by the Lender);

 

(ii)

an additional or increased cost; or

 

(iii)

a reduction of any amount due and payable under any Finance Document,

13.2

(a)

The Lender intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Borrower of the event giving rise to the claim.

13.3

 

(a)

attributable to a Tax Deduction required by law to be made by the Borrower;

 

(b)

compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because the exclusion in paragraph (a) of Clause 12.3 (Tax indemnity) applied); or

 

(c)

attributable to the wilful breach by the Lender or its affiliates of any applicable law or regulation.

14.1

(a)

The Lender shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12

 

(i)

providing such information as the Borrower may reasonably request in order to permit the Borrower to determine its entitlement to claim any exemption or other relief (whether pursuant to a double taxation treaty or otherwise) from any obligation to make a Tax Deduction; and

 

(ii)

in relation to any circumstances which arise following the date of this Agreement, transferring its rights and obligations under the Finance Documents to another affiliate or another office.

(b)

Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

14.2

(a)

The Borrower shall indemnify the Lender for all costs and expenses reasonably incurred by the Lender as a result of steps taken by it under Clause 14.1 (Mitigation).

(b)

The Lender is not obliged to take any steps under Clause 14.1 (Mitigation) if, in the opinion of the Lender (acting reasonably), to do so might be prejudicial to it.

14.3

 

(a)

interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

 

(b)

oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

 

(c)

oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

15.1

(a)

If any sum due from the Borrower under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

 

(i)

making or filing a claim or proof against the Borrower; or

 

(ii)

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

(b)

The Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

15.2

 

(a)

the occurrence of any Event of Default;

 

(b)

investigating any event which it reasonably believes is an Event of Default or Potential Event of Default;

 

(c)

the information produced or approved by any Obligor being or being alleged to be misleading and/or deceptive in any respect;

 

(d)

any enquiry, investigation, subpoena (or similar order) or litigation with respect to any Obligor or with respect to the transactions contemplated or financed under this Agreement;

 

(e)

a failure by an Obligor to pay any amount due under a Finance Document on its due date or in the relevant currency;

 

(f)

funding, or making arrangements to fund, a Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by the Lender alone);

 

(g)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

 

(h)

a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

16.1

 

(a)

this Agreement and any other documents referred to in this Agreement; and

 

(b)

any other Finance Documents.

16.2

16.3

17.1

17.2

17.3

18.1

18.2

18.3

19.1

19.2

 

(a)

without prejudice to any Loans then outstanding:

 

(i)

cancel the Commitments  (and  reduce them  to zero), whereupon they shall immediately be cancelled (and reduced to zero); or

 

(ii)

cancel  any  part  of any  Commitment  (and reduce  such Commitment  accordingly), whereupon the relevant part shall immediately be cancelled (and  the relevant    Commitment    shall be immediately reduced accordingly); and/or

 

(b)

declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or

 

(c)

declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Lender.

20.1

20.2

20.3

20.4

20.5

such assignment or transfer was made to avoid the occurrence of any illegality;

 

20.5.2

any assignment or transfer was made following an Event of Default which had occurred and not been remedied; or

 

20.5.3

such assignment or transfer was requested by or otherwise made at the instigation of the Borrower.

 

(a)

any of its affiliates;

 

(b)

its head office and any other branch;

 

(c)

any of its professional  advisers  and any other  person providing services  to it (provided that  such person is under a duty of confidentiality,  contractual  or otherwise, to the Lender);

 

(d)

any Obligor;

 

(e)

any person permitted by any Obligor;

 

(f)

any person to the extent required for the purpose of any litigation, arbitration or regulatory proceedings or procedure;

 

(g)

any  person  to whom, and to the extent  that,  information  is required to be disclosed by any applicable law or regulation; and

 

(h)

any other person:

 

(i)

to (or through) whom the Lender assigns or transfers (or may potentially assign or transfer) all or  any of its rights and obligations  under this Agreement; or

 

(ii)

with (or through) whom the Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which  payments  are  to  be  made  by  reference  to, a  Facility,  this Agreement or any Obligor;

22.1

(a)

On each date on which the Borrower is required to make a payment under a Finance Document, the Borrower shall make the same available to the Lender (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Lender as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

(b)

Payment shall be made to such account with such bank as the Lender specifies.

22.2

22.3

(a)

If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by the Borrower under this Agreement, the Lender shall, save only as expressly provided in paragraph (b) below, apply that payment towards the obligations of the Borrower under this Agreement in the following order:

 

(i)

first, in or towards payment of any unpaid fees, costs and expenses of the Lender under the Finance Documents;

 

(ii)

secondly, in or towards payment of any accrued interest or commitment fees due but unpaid under this Agreement;

 

(iii)

thirdly, in or towards payment of any principal due but unpaid under this Agreement; and

 

(iv)

fourthly, in or  towards payment  of any other  sum due but  unpaid under the Finance Documents.

(b)

The Lender may vary the order set out in sub-paragraphs (a)(ii) to (iv) above.

(c)

Paragraphs (a) and (b) above will override any appropriation made by the Borrower.

22.4

22.5

(a)

Any payment which is due to be made on a day that is not a business day shall be made on the next business day in the same calendar month (if there is one) or the preceding business day (if there is not).

(b)

During any extension of the due date for payment of any principal or Unpaid Sum under paragraph (a) above, interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

(a)

Subject to paragraphs (b), (c) and (d) below, US Dollars is the currency of account and payment for any sum due from the Borrower under any Finance Document.

(b)

Any repayment or prepayment of a Loan or payment of interest (including default interest) in respect of Facility B shall be made in RMB.

(c)

Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

(d)

Any amount expressed to be payable in a currency other than US Dollars shall be paid in that other currency.

24.1

24.2

24.3

(a)

Any communication or document made or delivered by one person to another under or in connection with this Agreement will be effective:

 

(i)

if by way of fax, only when received in legible form; or

 

(ii)

if  by way  of  letter,  only when  it  has  been  left  at  the relevant address  or five business days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

(b)

Any communication or document to be made or delivered to the Lender will be effective only when actually received by the Lender and then only if it is expressly marked for the attention of the department or officer identified with the Lender's signature below (or any substitute department or officer as the Lender shall specify for this purpose).

24.4

(a)

Any notice given under or in connection with any Finance Document must be in English.

(b)

All other documents provided under or in connection with this Agreement must be:

 

(i)

in English; or

 

(ii)

if not in English, and if so required by the Lender, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

No failure to exercise, nor any delay in exercising, on the part of the Lender, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

 

Any term of the Finance Documents may be only amended or waived with the written consent of the Party against whom the amendment or waiver is claimed to be binding.

 

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

 

This Agreement, and all non-contractual obligations arising from or in connection with this Agreement, are governed by Hong Kong law.

31.1

(a)

The courts of Hong Kong have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including any dispute relating to any non-contractual obligation arising from or in connection with this Agreement and any dispute regarding the existence, validity or termination of this Agreement) (a “Dispute”).

(b)

The Parties agree that the courts of Hong Kong are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

(c)

This Clause 31.1 (Jurisdiction of Hong Kong courts) is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.

 

(a)

irrevocably agrees to appoint in Hong Kong an agent for service of process in relation to any proceedings before the Hong Kong courts in connection with any Finance Document prior to the first Utilisation Date; and

 

(b)

agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned.

31.3

 

The Borrower irrevocably waives, to the extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from:

 

(a)

suit;

 

(b)

jurisdiction of any court;

 

(c)

relief by way of injunction or order for specific performance or recovery of property;

 

(d)

attachment of its assets (whether before or after judgment); and

 

(e)

execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any proceedings in the courts of any jurisdiction (and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any immunity in any such proceedings).

1.

1.1

Receipt of copies of constitutive and organisational documents and all documents evidencing the registration of the corporate Obligors with the appropriate authorities and their qualification to conduct their business as follows, each as certified by such Obligor's Secretary or Assistant Secretary:

 

1.1.1

the certificate of incorporation or certificates of formation, including restatements and amendments thereof, and the certificate on change of registered office or registered agent if applicable;

 

1.1.2

the bylaws or limited liability company agreement or limited partnership agreement or other equivalent governing documents, including amendments and supplements thereof;

1.1.3

other certificates, agreements or merger or consolidation, plans of reorganization, or other instruments which are filed with Nevada Secretary of State under Chapter 78 (Private Companies) of the Nevada Revised Statutes with the effect of amending or supplementing the certificate of incorporation; and

1.1.4

the certificate of good standing in such Obligor's jurisdiction of formation or incorporation and any other jurisdiction in which it conducts business where a qualification to conduct business as a foreign entity is required.

1.2

Receipt of copies of passport or other identification documents of the Share Pledgor.

2.

2.1

Corporate approvals: Evidence (in the form of copies of resolutions in agreed forms and/or certified extracts from the commercial register) that all corporate or constitutional action required by any relevant law, regulation or constitutional document to be taken by the corporate Obligors to authorise:

2.1.1

the entry into the Finance Documents to which it is a party;

2.1.2

the execution by it of the Finance Documents to which it is a party; and

2.1.3

an Authorised Person to sign on behalf of it all other documents, notices and communications required to be given by or on its behalf, under or for the purposes of the Finance Documents,

 

has been duly taken.

2.2

Specimen signatures: Receipt of original specimen signatures of the Authorised Person or Authorised Persons referred to in Clause 2.1.3 of this Schedule.

3.

3.1

Finance Documents: Execution and receipt of originals of:

 

3.1.1

each Finance Document; and

 

3.1.2

each document to be delivered to the Lender pursuant to the Finance Documents prior to the Utilisation.

3.2

Security Documents: Receipt of written confirmation from the Borrower's counsel, confirming that the Security Documents have been registered or otherwise perfected under applicable laws and regulations.

3.3

Notices: Receipt of copies of each of the notices for the time being required to be given pursuant to the terms of the Finance Documents, together with acknowledgements from each person to whom notice was given, in the form required by each such document.

3.4

Stamp duties, etc.: Evidence that all stamp, registration and similar taxes and other fees payable in connection with the Finance Documents have been paid.

3.5

Fees: Payment of all fees which, under the terms of this Agreement, are due prior to the Utilisation Date.

4.

4.1

Legal opinions: Receipt of legal opinions in agreed form from:

 

4.1.1

King & Wood, the Hong Kong legal counsel to the Lender, relating to matters of Hong Kong law relevant to the Finance Documents; and

5.

5.1

Process agents: Evidence of the acceptance by the process agents named in the Finance Documents of their appointment pursuant to the provisions of the Finance Documents.

5.2

Debt Service Account: Evidence of the Debt Service Account having been opened and maintained in accordance with Clause 1 (Opening and maintenance of Debt Service Account) of Schedule 7 (Debt Service Account).

5.3

Audited Reports: Receipt of copies of the Original Financial Statements.

5.4

Consortium Agreement: Evidence of any necessary consent and/or waiver of Baring Asia having been obtained for the transactions contemplated in the Finance Documents in connection with the obligations of the Share Pledgor under the Consortium Agreement.

6.

 

The Utilisation Request, duly completed and duly executed by an Authorised Person.

7.

7.1

(Except for the first Utilisation) Execution and receipt of the original amendment to the Share Pledge Agreement in the form set out in Schedule II to the Share Pledge Agreement in respect of additional shares of the Common Stock of the Borrower having a Share Value not less than (a) (in the case where the Common Stock of the Borrower is listed or quoted on a Trading Market) 200% or (b) (in any other case) 143% of the aggregate of the proposed Utilisation and an amount determined by the Lender to be an approximation of the expected interest payments in respect of the Loan so made within the twelve (12) month period following the proposed Utilisation Date.

7.2

Receipt of any other document required to be delivered and/or evidence of any step required to be taken having been so taken under Section 14(c) of the Share Pledge Agreement in respect of such amendment.

7.3

Receipt of the items referred to Clauses 3.2, 3.3 and 3.4 of this Schedule in respect of such amendment.

8.

 

All representations and warranties in the Finance Documents are true in all material respects on and as of the Utilisation Date, before and after giving effect to the Utilisation and to the application of the proceeds therefrom, as though made on and as of such date (save for those representations and warranties which, by their terms, are made as of a specified date, which representations and warranties shall be true in all material respects as of such specified date only and save also as otherwise provided in Clause 2 (Repetition) of Schedule 4 (Representations and Warranties)).

9.

 

No Event of Default or Potential Event of Default has occurred and is continuing, or would result from the Utilisation.

To:

China Development Bank Corporation Hong Kong Branch

1.

We refer to the Facility Agreement. This is a Utilisation Request. Terms defined in the Facility Agreement shall have the same meaning in this Utilisation Request.

2.

We wish to borrow a Loan on the following terms:

3.

We confirm that each condition specified in Clause 4 (Conditions of Utilisation) and Schedule 2 (Conditions precedent) is satisfied on the date of this Utilisation Request.

4.

The proceeds of this Loan shall be credited to the following account:-

5.

This Utilisation Request is irrevocable.

1.

The Borrower represents and warrants to the Lender that as at the date hereof:

(a)

 

(i)

Each corporate Obligor is a company with limited liability duly incorporated and validly existing under the laws of its place of incorporation with power to enter into each Finance Document to which it is a party and to exercise its rights and perform its obligations thereunder and all corporate and other action required to authorise its execution of each Finance Document to which it is a party and the performance of its obligations thereunder have been duly taken. It has the power to own its assets and carry on its business as it is being conducted.

 

(ii)

The Share Pledgor has the  capacity  and  power to enter into  each Finance Document  to  which  he  is a  party and  to exercise  his rights and perform his obligations thereunder and all action required to authorise his execution of each Finance Document to which he is a party and the performance of his obligations thereunder have been duly taken.

(b)

 

The execution,  delivery  and  performance  by each of the Obligors of the Finance Documents to which it is a party and its exercise of its rights and performance of its obligations thereunder does not and will not:

 

(i)

conflict with any existing agreement or other instrument to which it is a party or which is binding upon it or any of its assets other than any such conflict which has been effectively waived by the relevant counterparty prior to the date of this Agreement;

 

(ii)

(in the case of a corporate Obligor) conflict with its memorandum and articles of association or constitutional documents;

 

(iii)

conflict with any applicable law, regulation or official or judicial order currently in effect; or

 

(iv)

result in the existence of, or oblige it to create any security interest over all or any of its present or future revenues or assets save as expressly contemplated by the Security Documents.

(c)

 

(d)

 

The obligations expressed to be assumed by each of the Borrower and the other Obligors in each Finance Document to which it is a party are legal and valid obligations binding on the Borrower or such Obligor, as the case may be, and enforceable in accordance with the terms of such Finance Document.

(e)

 

No litigation,  arbitration or  administrative proceeding of  or before any court, arbitral  body or agency has been started or threatened against the Borrower or any other Group Company or any  other  Obligor  or any of their respective  affiliates which could  reasonably be expected to have a material adverse effect or otherwise affect the legality, validity, binding effect or enforceability of any Finance Document.

(f)

 

No Event of Default or Potential Event of Default has occurred and is continuing or would result from the making of the Utilisation.

(g)

 

The choice of Hong Kong law or the laws of the State of New York (as the case may be) as the governing law in the Finance Documents will be recognised and upheld in the jurisdictions in which the relevant Obligors are incorporated or reside.  Any judgment  obtained in Hong Kong or in the State of New York (as the case may be) in relation to a Finance Document  will be recognised and enforced  in the jurisdictions in  which the relevant Obligors are incorporated or reside.

(h)

 

Neither the Borrower nor any other Obligor is required under any applicable law to make any deduction for or on account of Tax from any payment it may make under any Finance Document, save for any  withholding  tax which may arise in respect  of any interest payable by the Borrower hereunder under the applicable federal laws of the United States or the laws of the State of Nevada.

(i)

 

Any written information provided by the Borrower was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated and any financial projections have been prepared on the basis of recent information and on the basis of reasonable  assumptions.  Nothing has occurred  or been omitted  and no information has been given or withheld that results in the information provided taken as a whole being untrue or misleading in any material respect.

(j)

 

The Original Financial Statements were prepared in accordance with GAAP consistently applied and give a true and fair view and represent the financial condition and operations of the Group during the financial year save to the extent expressly disclosed in such financial statements.

(k)

 

Each Security Document confers the Security Interests purported to be conveyed thereby over the assets referred to in such Security Document and such assets are not subject to any prior Security Interests.

(l)

 

The claims of the Lender against each of the Borrower and the other Obligors under the Finance Documents will rank at least pari passu as to priority of payments with the claims of all its other unsecured, unsubordinated creditors save those whose claims are preferred solely by any bankruptcy, insolvency, liquidation or other similar laws of general application.

(m)

 

Neither the Borrower, any other Obligor nor any of its assets are entitled to immunity from suit, execution, attachment or other legal process.

(n)

 

Each of the Borrower and the other Group Companies has filed or caused to be filed all tax returns which are required to be filed by it and has paid or caused to be paid all taxes shown to be due or payable on such returns or on any assessment received by it, to the extent such taxes have become due and payable in a timely manner, except those taxes the validity, application or amount of which is being contested by it in good faith (and for the payment of which adequate reserves have been provided, being not less than an amount which would be required to be reserved in accordance with the applicable accounting standards) by appropriate proceedings being diligently pursued.

(o)

 

No corporate action nor any other steps have been taken or legal proceedings have been started or (to the best of the Borrower's knowledge and belief) threatened for the bankruptcy, winding-up, dissolution, administration or insolvent re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of any Obligor or any Group Company or to any or all of its assets or revenues.

(p)

 

The Lender is not and will not be deemed to be resident, domiciled or carrying on business in the State of Nevada or the United States by reason only of the execution, delivery, performance or enforcement of the Finance Documents to which any of them is party. It is not necessary under the laws of the State of Nevada or the federal laws of the United States (i) in order to enable the Lender to enforce its rights under the Finance Documents or (ii) by reason of the execution, delivery and performance of the Finance Documents by the Lender that it be licensed, qualified or otherwise entitled to carry on business in the State of Nevada or the United States.

 

The Borrower shall be deemed to have repeated each of the representations and warranties set out in Clause 1 (Representations and Warranties) of this Schedule 4 on the date on which a Utilisation Request is issued and on each Utilisation Date with reference to the facts and circumstances then subsisting.

1.

1.1

 

The Borrower shall:

 

1.1.1

within 90 days of the end of each of its financial years, deliver to the Lender, in sufficient copies, its audited consolidated financial statements for such financial year.

 

1.1.2

within 45 days of the end of each quarter of its financial year, deliver to the Lender, in sufficient copies, its unaudited consolidated financial statements for such quarter of the financial year.

1.2

 

The Borrower shall ensure that each set of financial statements delivered by it pursuant to Clause 1.1 (Financial Statements) of this Schedule 5 (Undertakings) is certified by a director of the Borrower as having been prepared in accordance with GAAP.

1.3

1.3.1

The Borrower shall deliver to the Lender, within 90 days after the end of each financial year of the Borrower, a compliance certificate stating that a review of the activities of the Borrower during the preceding financial year has been made with a view to determining whether the Borrower and its subsidiaries have kept, observed, performed and fulfilled their obligations under this Agreement, and further stating, as to the person signing such certificate , that to the best of his or her knowledge the Borrower has kept, observed, performed and fulfilled each and every covenant contained in this Agreement and there is no default in the performance or observance of any of the terms, provisions and conditions of this Agreement (or, if a Potential Event of Default or Event of Default shall have occurred, (subject  to  Clause 1.5 (Insider Information) of this Schedule) describing all such Potential Event of Default or Events of Default of which he or she may have knowledge and what action the Borrower is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which repayment of the Loan(s) and payment of any interest accrued and any other amount payable under this Agreement is prohibited or if such event has occurred, a description of the event and what action the Borrower is taking or proposes to take with respect thereto.

Each compliance certificate delivered pursuant to Clause 1.3.1 of this Schedule shall be signed by a director of the Borrower.

1.4

 

The Borrower shall supply to the Lender (in sufficient copies):

 

1.4.1

all documents dispatched by the Borrower to its shareholders (or any class of them) or its creditors generally at the same time as they are despatched;

 

1.4.2

promptly, any announcement, notice or other document relating specifically to the Borrower posted onto any electronic website maintained by any stock exchange on which shares in or other securities of the Borrower are listed or any electronic website required by any such stock exchange to be maintained by or on behalf of the Borrower;

 

1.4.3

(subject to Clause 1.5 (Insider Information) of this Schedule) promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against the Borrower or any other Group Company, and which might, if adversely determined, have a material adverse effect;

 

1.4.4

(subject to Clause 1.5 (Insider Information) of this Schedule) promptly, such further information regarding the financial condition, business and operations of the Borrower or any other Group Company as the Lender may reasonably request; and

 

1.4.5

promptly, notice of any change in any Authorised Person of any corporate Obligor signed by a director or company secretary of such corporate Obligor accompanied by the specimen signature of any new Authorised Person.

1.5

 

The Borrower hereby acknowledges that the Lender does not wish to receive material non-public information with respect to the Borrower or its securities for the purpose of United States federal and state securities laws (“Insider Information”). The Borrower hereby agrees that it will use commercially reasonable efforts to omit any Insider Information from any notice, document or information required to be provided to the Lender under Clauses 1.3 (Compliance Certificate), 1.4 (Other Information) and 2.1 (Notification and Default) of this Schedule and that by delivering such notice, document or information to the Lender, the Borrower shall be deemed to have authorized the Lender to treat such notice, document or information as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States federal and state securities laws.

2.

 

The Borrower shall comply with the following positive covenants:

2.2

 

The Borrower shall and shall procure each corporate Obligor and each other Group Company maintain its corporate existence and its right to carry on operations.

2.3

 

The Borrower shall obtain, maintain in full force and effect and comply with the terms of and if requested, supply certified copies to the Lender of each authorisation, approval and registration required under any applicable law or regulation including all applicable securities laws and regulations in the United States to enable it to perform its obligations under, or for the validity, enforceability or admissibility of, any Finance Document.

2.4

 

The Borrower shall ensure that at all times the claims of Event of Default or Potential Event of Default against each of the Borrower and the other Obligors under the Finance Documents will rank at least pari passu with the claims of its other unsecured creditors other than those whose claims are preferred by any bankruptcy, insolvency, liquidation or other similar laws of general application.

 

The Borrower shall and shall procure each other Group Company to comply in all material respects with all applicable laws and regulations to which it is subject and to file all relevant tax returns and pay all taxes promptly upon the same becoming due except to the extent taxes are being contested in good faith (and adequate reserves have been provided in relation thereto in an amount not less than that which would be required to be reserved in accordance with GAAP).

2.6

 

The Borrower shall and shall procure each other Group Company at all times maintain proper and accurate books and records prepared in accordance with GAAP.

2.7

 

(i)

The Borrower shall duly make all such filings and registrations with the relevant authorities as may be necessary in connection with the creation, perfection or protection of any security interest which it may, or may be required to, create in connection with the Security Documents (including, without limitation, any mortgage amendment registration formalities and foreign security amendment registration formalities in connection with a change in the particulars of any of the Security Documents);

 

(ii)

The Borrower shall promptly make payment of all relevant fees, charges and taxes payable in relation to any Security Documents and all notarisation and registration fees in relation to the Security Documents from time to time and produce to the Lender copies of receipts or other evidence of such payments duly certified by an Authorised Person;

 

(iii)

The Borrower shall procure that no person shall be or become entitled to assert any proprietary or other like right or interest which might affect the value of the subject matter under any of the Security Documents without the prior written consent of the Lender;

 

(iv)

The Borrower shall at all times keep the Lender indemnified against all actions, suits, claims, costs and expenses which may be incurred or sustained on account of the non-payment of any sum pursuant to this Clause 2.7 (Security – General Covenants) or any other provision of a Security Document or the breach or non-performance of the covenants, obligations and agreements herein contained;

 

(v)

The Borrower shall provide the Lender with copies of all notices to or from all relevant government authorities or otherwise relating to the Security Documents within fourteen (14) days of the service of such notices and comply with all governmental or other legal requirements and notices in respect of the Security Documents; and

 

(vi)

The Borrower shall take and procure to be taken all such action as is reasonably available to it to register, perfect and protect the security intended to be conferred on the Lender by or pursuant to the terms of the Security Documents.

2.8

 

The Borrower shall and shall procure each other Group Company to allow the Lender, its representatives or the auditors or consultants engaged by the Lender to have reasonable access to any premises of the Borrower or any other Group Company so as to carry out inspection or conduct financial review or audit on them upon prior reasonable notice to the Borrower. The Borrower shall, and shall procure each other Group Company to, fully cooperate with the Lender and its auditors and consultants and provide such information as requested for the purpose of the review or audit.

2.9

 

The Borrower shall utilise the proceeds of the Facility for the purposes set out in Clause 3.1 (Purpose).

2.10

 

The Borrower shall at all times maintain and operate the Debt Service Account strictly in accordance with the provisions in Schedule 7 (Debt Service Account) notwithstanding any other terms upon which monies have been deposited in the Debt Service Account.

2.11

 

Within five (5) business days after the occurrence of a Triggering Event (as defined in the Share Pledge Agreement), the Borrower shall notify the Lender and provide such additional security as is required pursuant to the Share Pledge Agreement.

3.

 

Save as otherwise agreed by the Lender, the Borrower shall comply with the following negative covenants.

3.1

 

The Borrower shall not and shall procure each other Group Company not to make any financing, grant any credit (save in the ordinary course of business) or give any guarantee or indemnity (save as contemplated in any Finance Document) to or for the benefit of any person, or otherwise voluntarily assume any liability, whether actual or contingent, in respect of any obligation of any other person.

3.2

 

The Borrower shall not and shall procure each other Group Company not to create or permit to subsist any Security Interest over all or any of its present or future revenues or assets other than Permitted Security Interests.

3.3

 

The Borrower shall not and shall procure each other Group Company not to cause or agree to the amendment, modification or variation of the terms of its memorandum and articles of association or articles of association (or such equivalent constitutional documents), in any material respect and shall not terminate, amend, vary or grant any waivers under any of the Finance Documents save as otherwise specifically provided for herein.

3.4

 

The Borrower shall not and shall procure each other Group Company not to sell, lease, transfer or otherwise dispose of any asset by one or more transactions or series of transactions (whether related or not) other than in the ordinary course of the Related Business. The Borrower shall not and shall procure each other Group Company not to directly or indirectly dispose of a substantial part of its assets or undertaking related to the Related Business without the consent of the Lender in writing.

3.5

 

The Borrower shall not and shall procure each other Group Company not to merge or consolidate with any other person or participate in any other type of corporate reconstruction without the consent of the Lender in writing.

3.6

 

The Borrower shall not and shall procure each other Group Company not to permit any change to its financial year end without the consent of the Lender.

3.7

 

Where the Borrower applies any of the proceeds of the Facilities to fund any shareholder loan to any Group Company, the Borrower shall not assign, transfer or otherwise deal with any interest in such shareholder loan or the relevant shareholder loan agreement or any part thereof or create or permit to subsist any Security Interest thereon or agree or purport to do any of the foregoing without the prior written consent of the Lender.

1.

 

Any Obligor fails to pay any amount payable under any Finance Document when due.

2.

 

Any representation or warranty made by any Obligor in any Finance Document or in any notice or certificate delivered by it pursuant thereto or in connection therewith is or proves to have been incorrect or misleading when made or deemed to be made.

3.

3.1

Any Obligor fails duly to perform or comply with any obligation expressed to be assumed by it in Clause 2.1 (Notification of Default), Clause 2.2 (Corporate Existence), Clause 2.4 (Ranking), Clause 3.1 (Financing and Guarantees) and Clause 3.2 (Negative Pledge) of Schedule 5 (Undertakings) or any of the covenants in Schedule 7 (Debt Service Account).

3.2

Any Obligor fails duly to perform or comply with any other obligation expressed to be assumed by it in any Finance Document to which it is a party and, if capable of remedy, such failure is not remedied within fifteen (15) days after the Lender has given notice to the Borrower or such Obligor or the Borrower or such Obligor becomes aware of the failure to perform or comply.

4.

4.1

Any Financial Indebtedness of the Borrower or any other Group Company in an aggregate amount in excess of USD5,000,000 or its equivalent is not paid when due nor within any originally applicable grace period.

4.2

Any Financial Indebtedness of the Borrower or any other Group Company in an aggregate amount in excess of USD5,000,000 or its equivalent is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

4.3

Any commitment for any Financial Indebtedness of the Borrower or any other Group Company in an aggregate amount in excess of USD5,000,000 or its equivalent is cancelled or suspended by a creditor of the Borrower or the Borrower or any of its subsidiaries as a result of an event of default (however described).

4.4

Any creditor of the Borrower or any other Group Company becomes entitled to declare any Financial Indebtedness of the Borrower or any other Group Company in an aggregate amount in excess of USD5,000,000 or its equivalent due and payable prior to its specified maturity as a result of an event of default (however described).

5.

5.1

The Borrower, or any other Group Company:

 

(a)

files a petition in bankruptcy or takes any action for its rehabilitation, liquidation, winding-up or dissolution;

 

(b)

commences a voluntary case or gives notice of intention to make a proposal under any Bankruptcy Law;

 

(c)

consents to the entry of an order for relief against it in an involuntary case or consents to its dissolution or winding up;

5.2

Any bankruptcy or insolvency proceedings or other proceedings under any Bankruptcy Law are commenced against the Borrower, the Borrower or any of its subsidiaries.

5.3

A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(a)

is for relief against the Borrower or any other Group Company;

 

(b)

appoints a receiver, interim receiver, receiver and manager, liquidator, trustee or custodian of the Borrower or any other Group Company; or

 

(c)

orders the liquidation of the Borrower or any other Group Company.

5.4

For the purpose of this Clause 5 (Insolvency Event), “Bankruptcy Law” means any law in any jurisdiction relating to bankruptcy, insolvency, winding up, liquidation, reorganisation or relief of the debtors.

6.

 

Any legal proceedings, judgment or arbitration award (when aggregated with any outstanding unstayed or unsatisfied proceedings judgement or award against the Borrower, the Borrower or any of the subsidiaries) in excess of US$5,000,000 or its equivalent aggregate is rendered against the Borrower or any other Group Company, and remains unstayed or unsatisfied for 30 consecutive days.

7.

 

The confiscation, expropriation or nationalization by any governmental agency of any assets of the Borrower or any other Group Company if such confiscation, expropriation or nationalization would have a material adverse effect; or if such revocation or repudiation could reasonably be expected to have a material adverse effect, the revocation or repudiation by any government agency of any previously granted authorisation that is material to the operation of the Related Business; or the imposition or introduction of material and discriminatory taxes, tariffs, royalties, customs or excise duties imposed on the Borrower or other Group Company, or the material and discriminatory withdrawal or suspension of material privileges or specifically granted material rights of a fiscal nature.

8.

 

Any Obligor repudiates any Finance Document to which it is a party or does or causes to be done any act or thing evidencing an intention to repudiate any Finance Document to which it is a party.

9.

 

(a)

At any time it is or becomes unlawful for any of the Obligors to perform or comply with any or all of its material obligations under any Finance Document to which it is a party.

 

(b)

At any time any of the material obligations of any of the Obligors under any Finance Document to which it is a party are not or cease to be legal, valid and binding.

 

(c)

Any authorisation or necessary approval referred to in Clause 2.3 (Authorisations) of Schedule 5 (Undertakings) is revoked, terminated or withdrawn and such has or is likely to have a material adverse effect.

10.

 

The security purported to be created by any of the Security Documents shall cease to constitute a valid, first ranking, security interest in the assets expressed to be subject thereto or is or becomes subject to any other security interest (other than a Security Interest permitted under the Finance Documents); or any Security Document shall (i) cease to be in full force and effect or (ii) cease to give the Lender all of the material rights, powers and privileges purported to be created thereby.

11.

 

The Borrower or any other Group Company amends or modifies their respective constitutive documents in such a manner that would have a material adverse effect.

12.

 

The Borrower shall, or shall permit or any other Group Company to, directly or indirectly, engage in or carry on any business other than in the ordinary course of business presently engaged in by it (including with respect to an arrangements with respect to the business) as consistent with the past custom and practice of the Group and permitted under all necessary licenses, consents, authorizations, approvals orders, certificates and permits duly obtained by the Borrower or any other Group Company.

13.

 

The Borrower shall, or shall permit or any other Group Company, directly or indirectly, dispose of or agree to dispose of a substantial part of its assets or undertaking relating to the Related Business, without the prior written consent of the Lender.

14.

 

The Borrower fails to maintain the trading of its Common Stock on the New York Stock Exchange or the Nasdaq Global Select Market or the Nasdaq Global Market without the prior written consent of the Lender.

15.