Short-Term Advised Credit Line Facility Agreement
Exhibit 10.2
JPMorgan
Exhibit
10.2
Date:
July 30, 2007
1.
Facility
JPMorgan
Chase Bank, N.A., Shanghai Branch (the “Bank”)
is
pleased to make available to Kadant Jining Light Machinery Co.,
Ltd.(凯登炅工机械ø济宁÷有榰公司),
a
company incorporated in P.R. China having its principal office at No.99 Jidian
Road 1, High and New Technologies Industry Development Zone, Jining, Shandong,
272023, P.R. China (the “Borrower”)
a
short term advised credit line facility (“Facility”)
up to
an aggregate principal amount not at any time exceeding RMB Forty-five million
Only (RMB45,000,000) (the “Advised
Amount”)
subject to the terms and conditions of this Agreement.
2.
Purpose
The Borrower will apply the proceeds of the Loan towards its general working
capital requirements. The Loan will not be used for other purposes without
the
prior consent of the Bank provided that the Bank is not obliged to monitor
or
verify the application of the Loan.
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3.
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Availability
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The
Facility offered by the Bank is uncommitted. No Advance will be available
for drawdown and no Bank Guarantee will be available for issuance
after
the expiration of the Drawdown Period after which time the Facility
will
automatically lapse. In any event, the availability of the Facility
even
during such Drawdown Period will be at the sole discretion of the
Bank.
The Bank may, in its sole and absolute discretion, agree to provide
the
Facility on such terms and conditions as the Bank deems appropriate.
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4.
Loans
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4.1
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Subject
to the terms and conditions of this Agreement (including without
limitation, clause 3 hereof), the Facility may be used by one or
more
Advances and or Bank Guarantees to the Borrower following receipt
by the
Bank of an irrevocable duly completed Request in respect of the particular
Advance no later than 10:00am (Shanghai) time, three (3) Business
Days
immediately preceding the proposed Drawdown Date, provided that the
aggregate amount of any and all Loans which may from time to time
be
outstanding, will not in any case exceed the Advised Amount (unless
otherwise agreed by the Bank) and provided further that the Term
of any
Advance or Bank Guarantee will not exceed the Specified Period. The
Borrower may at any time during the Drawdown Period re-borrow the
Loan or
any part thereof which may at that time have been repaid subject
to and in
accordance with the terms and conditions of this
Agreement.
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4.2
The
Request will not be regarded as having been duly completed unless:-
| (a) |
the
proposed Drawdown Date is a Business Day falling on or before the
expiration of the Drawdown Period;
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| (b) |
the amount of the relevant Advance
is:
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(i)
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a
minimum of RMB One million (RMB1,000,000) and an integral multiple
of RMB
One hundred thousand (RMB100,000) ;
or
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| (ii) |
such other amount as the Bank may agree;
and
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(c)
the
amount selected under sub-clause 4.2(b) does not cause clause 4.1 to be
contravened.
5.
Conditions
Precedent
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5.1
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In
addition to the terms of clause 3, the availability of the Facility
will
be subject to the availability of funds, the availability of room
within
the Bank’s regulatory ceiling and completion or performance, as
applicable, of each of the following conditions precedent to the
satisfaction of the Bank:
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| (a) |
receipt
by the Bank of each of the following documents in form and substance
acceptable to it not less than three (3) Business Days immediately
preceding the earlier date on which (i) the first
Advance is intended to be made or (ii) the first Bank Guarantee is
intended to be issued (each such document (other than an original)
being
duly certified by an authorised officer of the Borrower as true,
complete
and up-to-date):
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(i)
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the
original of this Agreement duly executed by the Borrower;
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(ii)
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copies
of the constitutional documents of the Borrower and/or other relevant
corporate documents, and the relevant internal rules of the
Borrower;
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(iii)
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copy
of each of the Borrower’s current valid business license and IC Card
(Credit Information Card) issued by the People's Bank of
China;
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(iv)
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copy
of the supporting board resolution/s of the Borrower with respect
to this
Agreement, authorising the execution, delivery and performance of
this
Agreement and any Request;
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(v)
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the
names and specimen signatures of the persons authorised to sign,
on behalf
of the Borrower, this Agreement, each Request and any other documents
in
connection with this Agreement;
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(vi)
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the
original of each approval, authorisation, permit, registration and/or
filing and any other document required by any applicable law for
the
Borrower to enter into and perform any and all terms of this Agreement,
including the drawing of any Loans, issued by the applicable regulatory
authority, entity or body, including without limitation, the relevant
government authorities of the People’s Republic of
China;
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(vii)
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original
guarantee issued by Kadant Inc., parent company of the Borrower (the
“Guarantor”),
in favour of the Bank, in respect of the obligations of the Borrower
under
this Agreement, in form and substance satisfactory to the Bank (the
“Guarantee”);
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(viii)
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Evidence
that the Borrower has paid all the stamp duties chargeable on this
Agreement (including the renewal or extension
thereof);
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(ix)
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any
other authorisation or other document, opinion or assurance which
the Bank
considers necessary or desirable in connection with the entry into
and
performance of, and the transactions contemplated by, any Finance
Document
or for the validity and enforceability of any Finance Document;
and
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(x)
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the
Borrower’s current financial information (including without limitation
audited annual and unaudited semi-annual financial statements, promptly
prepared and received), in form and substance satisfactory to the
Bank;
which information will be furnished to the Bank as it may from time
to
time reasonably request; and
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| (b) |
the
Bank’s satisfaction with the business affairs, financial condition and
prospects of the Borrower or the Guarantor; and there being in the
opinion
of the Bank no material adverse change in the financial
condition of the Borrower or the Guarantor, in the financial, banking
or
capital market conditions, or in the international financial
environment.
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5.2
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In
addition to the terms of clauses 3 and 5.1, the availability of each
Advance or Bank Guarantee subsequent to the initial Advance or Bank
Guarantee is subject to each of the documents delivered or to be
delivered
under clause 5.1 remaining true complete and up to date as at the
date
upon which that relevant Advance or Bank Guarantee is made or issued
by
the Bank and to the Bank continuing to be satisfied as that date
in
relation to each of the matters referred to in sub-clauses 5.1 (b).
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6.
Borrowings
in excess of the Advised Amount/Other Purposes
Should
the Bank, in its sole discretion, allow the aggregate drawings under the
Facility at any time to exceed the Advised Amount or allow the Facility to
be
used for any purposes other than as set out in clause 2, such drawings will
be
subject to the same terms and conditions stipulated in this Agreement and for
the purpose of such drawings, the Borrower shall from time to time at the
request of the Bank, execute, sign, perfect, do and procure the doing of and
if
required, register every document, act or thing as, in the opinion of the Bank,
may be necessary or desirable for the preservation and the perfection of all
rights and powers of the Bank. The terms of this clause should not, however,
be
construed as agreement on the part of the Bank to make any modifications
whatsoever to this Agreement or the Facility.
7.
Covenants
In
consideration of the Bank entering into this Agreement, the Borrower undertakes
to the Bank during the period while any sum is due or payable under this
Agreement that it shall:
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(i)
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obtain
and maintain in full force, validity and effect all governmental
and other
approvals, authorizations, licences, consents and registrations required
in connection with the Facility and do or cause to be done all other
acts
and things necessary or desirable for the performance of its obligations
under this Agreement;
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| (ii) |
within 120 days after the end of each fiscal year, supply to the
Bank
audited financial statements of the Borrower of
such fiscal year,
provided that as to
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Guarantor,
the filing of the Guarantor’s Annual Report on Form 10-K with the U.S.
Securities and Exchange Commission on the Electronic Data Gathering, Analysis
and Retrieval computer system (“▇▇▇▇▇”) shall be deemed to satisfy such
requirement;
| (iii) |
cause
the Guarantor to comply with its obligations under (x) the Credit
Agreement dated May 9, 2005, entered into between JPMorgan Chase
Bank,
N.A. as Agent, the Lenders named therein, the Foreign Subsidiary
Borrowers from time to time parties thereto, and the Guarantor as
Borrower, (as the same may be amended, supplemented, modified or
extended
from time to time, the “US Credit Agreement”); (y) any credit agreement
that in whole substantially replaces the US Credit Agreement and
in which
JPMorgan Chase Bank, N.A. is a participant (the “Successor US Credit
Agreement”) or (z) in the event of the termination of the US Credit
Agreement or the Successor US Credit Agreement prior to the repayment
of
the loans hereunder, Sections 6, 7 and 8 of the US Credit Agreement
or
their equivalent sections of the Successor US Credit Agreement, as
the
same shall be in effect immediately prior to such termination (the
agreements referred to in subclauses (x), (y) and (z) are collectively
referred to as the “Guarantor
Credit Agreement”).
Any event of default which is continuing under the Guarantor Credit
Agreement shall be deemed an event of default
hereunder;
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(iv)
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ensure
that at all times the claims of the Bank against it under this Agreement
rank at least pari
passu
with the claims of all its other unsecured creditors,
except the claims of Bank of China Limited, Jining Branch under the
Existing Facility Agreement.;
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(v)
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notify
the Bank immediately if the Guarantor ceases to hold a beneficial
interest
of greater than fifty per cent (50%) in the Borrower;
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(vi)
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on
demand from the Bank, provide the Bank with full cash cover satisfactory
to the Bank in immediately available funds in respect of any actual
or
contingent liability incurred by the Bank under the Facility;
and
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(vii)
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other
than Permitted Security Interests, not create or allow to exist any
Security Interest on any of its
assets;
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other
than Permitted Security Interests, the Borrower may not:
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(1)
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sell,
transfer or otherwise dispose of any of its assets on terms where
it is or
may be leased to or re-acquired or acquired by it or any of its
related
entities;
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(2)
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sell,
transfer or otherwise dispose of any of its receivables on recourse
terms;
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(3)
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enter
into any arrangement under which money or the benefit of a bank
or other
account may be applied, set-off or made subject to a combination
of
accounts; or
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(4)
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enter
into any other preferential arrangement having a similar effect,
in
circumstances where the transaction is entered into primarily
as a method
of raising financial indebtedness or of financing the acquisition
of an
asset.
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8. Representations and Warranties
8.1
The
Borrower represents and warrants to the Bank that:
a)
the
Borrower is an enterprise duly registered and validly existing in accordance
with the laws of The People's Republic of China;
b)
the
Borrower, pursuant to applicable laws and its articles of association, has
full
power to enter into and perform, and has taken all necessary legal and other
action to authorise the entry into, performance and delivery of, this Agreement,
the relevant documents in connection herewith and the transactions contemplated
by this Agreement;
c) all
verifications, business license, approvals, authorizations and other documents
and permits required or desirable in connection with the entry into,
performance, validity and enforceability of the Finance Documents and the
transactions contemplated by, and the admissibility in evidence of, the Finance
Documents have been obtained or effected and are in full force and
effect;
d) the
Finance Documents constitute valid and legally binding obligations of the
Borrower, enforceable in accordance with their respective terms;
e)
the
Borrower’s obligations under each Finance Document constitute its direct,
unconditional, unsubordinated and unsecured obligations and rank and will rank
at least pari passu with all its other existing and future unsecured and
unsubordinated obligations, except for obligations mandatorily preferred by
law
applying to companies generally and the Borrower’s obligations to Bank of China
Limited, Jining Branch under the
Existing
Facility Agreement;
f)
the
entry into and performance by it of, and the transactions contemplated by,
the
Finance Documents do not and will not conflict with (a) any law or regulation
or
judicial or official order applicable to the Borrower; (b) the constitutional
documents of the Borrower, or (c) any document which is binding upon the
Borrower or any of its assets;
g)
it
will use the Loan according to the purpose provided under this Agreement. The
Borrower specifically warrants that it will not use any Advance outside the
legal business scope of its business licence issued by the State Administration
of Industry and Commerce, PRC;
h)
No
litigation, arbitration or administrative proceedings are current or, to its
knowledge, pending or threatened, which might, if adversely determined, have
a
material adverse effect on the Borrower;
i)
No
breach of this Agreement by the Borrower has occurred or may result from the
making of any Loan and no other event is outstanding which constitutes (or
with
the giving of notice, lapse of time, determination of materiality or the
fulfilment of any other applicable condition or any combination of the
foregoing, might constitute) a default under any document which is
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binding
on the Borrower or any of its assets to an extent or in a manner which might
have a material adverse effect on the Borrower; and
j)
All
amounts payable by the Borrower under the Finance Documents may be made free
and
clear of and without deduction for or on account of any tax.
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8.2
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The
representations and warranties set out in clause 8.1 (a) are made
on the
date of this Agreement and (b) are deemed to be repeated by the Borrower
on the date of each Request, the date of any Advance being made and
the
first day of each Interest Period with reference to the facts and
circumstances then existing.
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9.
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Repayment
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Each
Advance or Bank Guarantee together with all interest accrued thereon to the
date
of repayment and all fees and other amounts due and payable under this Agreement
are repayable upon the expiry of the Term of that Advance or Bank Guarantee
or
within 3 Business Days of any written demand for repayment thereof made by
the
Bank, whichever is earlier.
10.
Prepayment
The
Borrower may prepay the Loan in full or any part thereof subject to the Borrower
providing the Bank with not less than 15 Business Days’ prior written notice of
such intention to prepay and obtaining the prior written consent of the Bank
(such consent shall not be unreasonably withheld or delayed) and any necessary
government approval thereto. In the event that a prepayment is accepted, the
Bank reserves the right to charge penalties, break funding costs and fees
arising from such prepayment at its sole discretion. Break funding costs are
the
amounts (if any) determined by the Bank which would indemnify the Bank against
any loss or liability that it incurs as a consequence of any part of the Loan
is
prepaid on a date other than the expiry date of the Term of such Loan and
includes any costs incurred as a result of the Bank terminating all or any
part
of its fixed rate, swap or other hedging arrangements. The Bank will supply
to
the Borrower applicable rate of break funding costs after claiming such break
funding costs.
11.
Modification
and Cancellation of Facility and Terms
The
Bank
has the right to revise, modify or cancel the un-drawn portion of the Facility
at any time without prior notice to the Borrower. Further, the Bank has the
right to review and supervise the Facility drawn by the Borrower and shall
be
entitled to accelerate the Loan pursuant to the provisions of this Agreement
and
PRC laws, rules and regulations.
12.
Interest
and Fees
12.1
Interest
Periods
Each
Interest Period will be three months or such periods as the Bank and Borrower
may mutually agree from time to time, provided that the first Interest Period
for any Advance will commence on and include its Drawdown Date and extend up
to
and excluding the immediately succeeding Interest Settlement Date. Each
subsequent Interest Period for that Advance will commence on and include
Interest Settlement Date of the immediately preceding Interest Period for that
Advance and extend up to and excluding the immediately
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succeeding
Interest Settlement Date. If an Interest Period for a particular Advance would
otherwise overrun the expiry date of the Term of that Advance, it will be
shortened so that it ends on that expiry date.
12.2
Interest
(i)
The
rate of interest per annum on each Advance shall be ninety per cent (90) %
of
the applicable short term interest rate for an RMB loan having a term equal
to
the Term of that Advance as published by The People's Bank of China prevailing
as at the Drawdown Date of that Advance.
| (ii) |
The
Borrower shall pay the due and payable interest for each Advance
on each
Interest Settlement Date, and upon the expiry date of the Term of
that
Advance.
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| (iii) |
If
the Borrower fails to pay any sum on its due date for payment under
this
Agreement or applies the proceeds of the Loan other than the purposes
provided in clause 2 hereunder, the Borrower will pay interest at
the rate
per annum determined by the Bank according the regulations issued
by the
People's Bank of China.
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12.3
Commission
The
Borrower shall, in respect of each Bank Guarantee requested by it, pay to the
Bank a commission in the amount of the higher of the following: (i) RMB1,200
flat; and (ii) at the rate of 1.25% per annum on the maximum actual and
contingent liability of the Bank under that Bank Guarantee. Such commission
shall be paid on the issuance date of that Bank Guarantee.
12.4
Fees
for
Bank Guarantee
Notwithstanding
otherwise provided in this Agreement, if the Borrower intends to amend any
Bank
Guarantee, the
Borrower shall pay to the Bank an amendment fee in the amount of RMB600 flat.
If
any cable fee or postage or such other fees as customary from time to time
is
incurred by the Bank, the Borrower shall pay to the Bank a cable fee in the
amount of RMB150 per page and shall reimburse the Bank with all postage or
such
other fees incurred.
13. Set-Off
With
notice to the Borrower and the Guarantor, the Bank may set off credits in any
accounts at any time held by the Borrower with the Bank or any of its affiliates
located anywhere in the world, whether in transit or for safe keeping, custody,
pledge, transmission, collection, deposit or otherwise, which set off may be
exercised at any time in satisfaction of all or any part of the amounts due
and
payable by the Borrower under the Facility.
The
Borrower waives any rights of set-off it may have at law or otherwise against
the Bank with respect to amounts owed by the Borrower to the Bank from time
to
time.
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14.
Increased
Costs
The
Borrower will forthwith on demand by the Bank pay to the Bank the amount of
any
increased cost incurred by the Bank as a result of the introduction of, or
any
change in, the interpretation or application of, any law or regulation or
compliance with any regulation made after the date of this Agreement provided
that this clause 14 does not apply to any change in the rate of, or change
in
the basis of calculating, tax on the overall net income of the Bank or any
of
its branches.
The
term
“increased cost” when used in this Agreement means an additional cost incurred
by the Bank as a result of it having entered into, or performing, maintaining
or
funding its obligations under the Finance Documents or a reduction in any amount
payable to the Bank or in the effective return to the Bank under this Agreement
(or to the extent that it is attributable to this Agreement) on its capital
but
does not include any increased cost compensated for under clause
15.
15.
Taxes
All
payments made by the Borrower under the Finance Documents will be made without
any deduction and free and clear of and without deduction for or on account
of
any taxes, except to the extent that the Borrower is required by law to make
payment subject to any taxes. If any tax or amounts in respect of tax must
be
deducted, or any other deductions must be made, from any amounts payable or
paid
by the Borrower under the Finance Documents, the Borrower will pay such
additional amounts as may be necessary to ensure that the Bank receives a net
amount equal to the full amount which it would have received had payment not
been made subject to tax or any other deduction. The Borrower will:
| a) |
pay
when due all taxes required by law to be deducted or withheld by
it from
any amounts paid or payable under the Finance
Documents;
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| b) |
within
15 days of the payment being made, deliver to the Bank evidence
satisfactory to the Bank (including all relevant tax receipts) that
the
payment has been duly remitted to the appropriate authority;
and
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| c) |
forthwith
on demand indemnify the Bank against any loss or liability which
the Bank
incurs as a consequence of the payment or non-payment of those
taxes.
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16.
Indemnity
The
Borrower will indemnify the Bank against any cost, liability, damage, loss
or
expense (including without limitation legal fees, costs and expenses) which
the
Bank may suffer, incur or sustain directly or indirectly, as a consequence,
of
or in connection with (a) any default or shortfall in payment by the Borrower
of
any sum due under this Agreement (including where the amount received by the
Bank in a currency other than RMB when converted into RMB at a market rate
in
the usual course of the Bank’s business is less than the amount owed in RMB
under this Agreement);(b) any prepayment of the Loan or an overdue amount being
received otherwise than on the Interest Settlement Date; (c) a change in
currency of the PRC; (d) any breach by the Borrower of any term of this
Agreement or (e) an Advance not being made for any reason (excluding any default
or negligence of the Bank) after a Request has been delivered or made by the
Borrower.
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17.
Expenses
The
Borrower will pay the Bank upon demand all costs, charges and expenses
(including any stamp taxes) incurred by the Bank in connection with the
negotiation, preparation, execution, performance and enforcement of this
Agreement (or any amendment, variation, extension or renewal
thereof).
18.
Disclosure
The
Bank
may disclose confidential information and documents relating to the Borrower
in
connection with the Facility which are in the Bank’s possession if required
under court orders or in order to comply with requests or orders made under
applicable laws and regulations or in order to, in the Bank’s sole and absolute
discretion, pass on such information and documents to bank examiners, the Bank’s
head office and other branch offices, its affiliates and associates, assignees
and prospective assignees and the Bank’s auditors, counsel and other
professional advisers.
| 19. |
SAFE
registration upon claim
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Unless
otherwise provided by the applicable laws and regulations, if the Guarantee
is
claimed, the Borrower shall register with State Admin. of Foreign Exchange
for
actual foreign debt registration according to the Notice regarding the
Perfection of Foreign Debt Management (《国家外汇管理局关于完善外债管理有关樒杨的濦知》)issued
by State Admin. of Foreign Exchange on 21 October 2005, whereby the same quota
system (total investment of the Borrower minus registered capital of the
Borrower) shall apply.
| 20. |
Notices
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20.1
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General
Requirements for Notices
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a)
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Any
communication in connection with this Agreement must be in writing
and,
unless otherwise stated, may be given in person, by post or
fax.
All communications and notices shall be written in English, or in
Chinese
if any law or regulation of the PRC requires, provided that any such
notice provided to the Guarantor shall be translated into
English.
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b)
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Unless
it is agreed to the contrary, any consent or agreement required under
this
Agreement must be given in writing.
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c)
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In
the event that (i) the Borrower failures to pay on the due date any
amount
payable by it under this Agreement; (ii) the Bank declares that all
or
part of any amounts outstanding under the Facility are immediately
due and
payable; (iii) the Bank provides any notice or communication relating
to
the Guaranty; or (iv) the Bank provides any notice or consent relating
to
prepayment and break funding costs under Section 10, the notices
addressed
to the Borrower in relation to the above-mentioned matters shall
be copied
to the Guarantor via air courier and provided in
English.
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20.2
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Contact
details
|
The
contact details of the Borrower are:
Address: ▇▇.
▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇
High
and
New Technologies Industry Development ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇.
▇▇▇▇▇
Fax
number: 0537-2073189
Attention:
Chairman
The
contact details of the Guarantor are:
Address:
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇
Fax
number: ▇▇▇-▇▇▇-▇▇▇▇
Attention:
Treasurer
The
contact details of the Bank are:
Address:
31F,
HSBC
Building
1000
Lu
Jia Zui ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
People’s
Republic of China
Fax
number:
86-21-6160
2707
Attention:
▇▇▇▇▇
▇▇▇▇/▇▇▇▇▇▇▇▇▇
▇▇▇/▇▇▇▇▇ CZ Cai
Commercial
Banking
Any
party
may change its contact details by giving five (5) Business Days' notice to
the
other parties.
21.
Miscellaneous
21.1 Certificates
A
certificate by the Bank shall be conclusive evidence of the indebtedness of
the
Borrower under this Agreement save in the case of manifest error on the Bank’s
part.
21.2
No
waivers
Any
delay
or omission by the Bank in enforcing its rights under this Agreement will not
constitute a waiver of any of its rights at any time.
21.3
Assignment,
Transfer and Participation
The
Borrower hereby consents that the Bank may at any time assign or transfer to
one
or more banks or other entities all or a portion of its rights and/or
obligations under the Facility and any Finance Documents without any further
consent from the Borrower in relation thereto.
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The
Borrower hereby consents that the Bank may at any time sell participations
to
one or more banks or other entities of all or a portion of its rights and
obligations under the Facility without any further consent from the Borrower
in
relation thereto.
The
Bank
may, in connection with (i) any assignment, or any proposed assignment, under
the Facility; (ii) any participation, or any proposed participation, under
the
Facility; (iii) the purchase or sale of any credit insurance or any other
contractual protection or hedging with respect to the Borrower’s obligations
under the Facility; or (iv) the processing and management of data relating
to
the Facility, disclose to third parties any information relating to the Borrower
furnished to the Bank by the Borrower, provided that, prior to such disclosure,
such third party shall agree in writing to preserve the confidentiality of
any
confidential information relating to the Borrower received by it from the
Bank.
The
Borrower may not assign, transfer or otherwise dispose of any of its rights,
benefits or obligations under the Facility.
21.4.
Severance
If
at any
time any of the terms and conditions of the Offer Letter is or becomes illegal,
invalid or unenforceable in any respect, the legality, validity or
enforceability of the remaining terms and conditions shall not be affected
thereby.
21.5
Language
This
Agreement is written in both Chinese and English. If there is any inconsistency
between the two versions in the interpretation or otherwise, the English version
shall prevail.
22.
Governing
Law and Jurisdiction
This
Agreement shall be governed by and construed in all respects in accordance
with
the laws of the PRC and each of the parties to this Agreement, for the benefit
of the Bank, hereby submits to the non-exclusive jurisdiction of the courts
of
the PRC.
23.
Effectiveness
This
Agreement shall be effective on the date that the authorized representatives
of
the Bank and the Borrower have duly executed this Agreement (If the execution
by
the Bank and the Borrower is not at the same date, the effective date shall
be
the later date that this Agreement is executed).
24.
Definitions
and Interpretation
24.1
The
following terms have the following meanings when used in this
Agreement:
“Advance”
means the borrowing under the Facility of all or any portion of the Advised
Amount by the Borrower or as the context may require, the principal amount
of
such borrowing;
“Advised
Amount” means RMB Forty-five million Only (RMB45,000,000);
11
JPMorgan
“Agreement”
means the agreement constituted by the acceptance by the Borrower of the terms
and conditions of this Offer Letter, as the same may be amended, varied or
extended from time to time;
“Business
Day” means a day (other than a Saturday, a Sunday or a public holiday) on which
Banks are open for general business in Shanghai;
“Drawdown
Date” means in relation to any Advance, the date of that Advance or in relation
to any Bank Guarantee, the date of issuance of that Bank Guarantee;
“Drawdown
Period” means in the period from the date of acceptance of this Offer Letter by
the Borrower up to and including eleven (11) calendar months from the date
of
such acceptance;
“Existing
Facility Agreement” means the RMB loan
agreement dated 6 June 2006, entered into between Bank of China Limited, Jining
Branch as lender and the Borrower as borrower, under which Bank of China
Limited, Jining Branch agrees to make available a term loan facility up to
RMB40,000,000;
“Facility”
means the
short
term advised credit line facility consisting of performance/financial guarantee
(the “Bank
Guarantee”),
and
Advance made available under this Agreement;
“Finance
Documents” means this Agreement, the Guarantee referred to in clause
5.1(a)(vii); each Request and any other document designated as such by the
Bank;
“First
Drawdown Date” means the date upon which the Borrower makes the first drawdown
of the Loan under this Agreement;
“Interest
Period” means each period determined in accordance with clause
12.1;
“Interest
Settlement Date” means in relation to any Advance, the 20th
day of
the last calendar month of each calendar quarter falling during each Interest
Period for that relevant Advance provided that if such day is not a Business
Day, the Business Day immediately after that day;
“Loan”
means the aggregate principal amount of the borrowing from time to time under
any Advance or Bank Guarantee by the Borrower under this Agreement or the
aggregate principal amount outstanding of that borrowing;
“Offer
Letter” means this letter;
“Permitted
Security Interest” means:
|
(i)
|
any
Security Interest comprising a netting or set-off arrangement entered
into
by the Borrower in the ordinary course of its banking arrangements
for the
purpose of netting debit and credit
balances;
|
|
(ii)
|
any
Security Interest arising by operation of law and in the ordinary
course
of business;
|
12
JPMorgan
(iii)
any
Security Interest entered into pursuant to a Finance Document;
|
(iv)
|
any
Security Interest created in favour of Bank of China Limited, Jining
Branch for the performance of the Borrower’s obligations under the
Existing Facility Agreement;
|
|
(v)
|
any
Security Interest created over real property (whether by mortgage
or lien)
owned by the Borrower and aggregate principal amount secured by all
such
Security Interest does not, at any time, exceed RMB30,000,000 (or
its
equivalent in any other
currencies);
|
|
(vi)
|
any
Security Interest created over the fixed assets acquired by the Borrower
provided that aggregate principal amount secured by all such Security
Interest is for the purpose of acquiring such fixed assets and does
not,
at any time, exceed RMB42,000,000 (or its equivalent in any other
currencies);
|
|
(vii)
|
any
Security Interests created over assets of the Borrower and aggregate
principal amount secured by all such Security Interest does not,
at any
time, exceed RMB15,000,000 (or its equivalent in any other currencies);
and
|
(viii)
any
other Security Interest with the prior written consent of the Bank;
“PRC”
means The People’s Republic of China;
“Request”
means a request in writing made by the Borrower for an Advance, in the form
of
the Schedule to this Agreement;
“RMB”
means the lawful currency of the PRC;
“Security
Interest” means any mortgage, pledge, lien, charge, assignment, hypothecation or
security interest or any other agreement or arrangement having a similar effect,
whether created pursuant to PRC law or any other applicable law.
“Term”
means the term of each Advance, not exceeding the Specified Period, as specified
in the Request delivered in relation to that Advance and agreed by the Bank;
and
“Specified
Period” means in relation to each Advance or Bank Guarantee, the period of one
year from and including the date of acceptance of this Offer Letter by the
Borrower.
|
24.2
|
In
this Agreement, to the extent not inconsistent with the subject or
context, words importing the singular number shall include the plural
number and vice versa, words importing any gender shall include other
genders; references to “persons”
shall include any body of persons, corporate or unincorporate and
references to a “year”
will mean a period of 365 days. The headings are inserted for reference
only and shall not affect the construction of the terms and conditions
of
this Agreement.
|
13
JPMorgan
Kindly
acknowledge your acceptance and agreement with the terms of this Offer Letter
by
signing where indicated below and returning your duly completed acknowledgement
to the Bank at the place indicated above. We look forward to being of service
to
you.
Yours
faithfully
/s/
Q.C.
Hua...... [Legal Chop]
JPMorgan
Chase Bank, N.A.
Shanghai
Branch
Name:
Q.
C. Hua
Title:
Managing Director & General Manager
Date:
July 30, 2007
Acknowledged
and agreed:
/s/
▇▇▇▇▇
▇. ▇▇▇▇▇..........[Legal Chop]
For
and
on behalf of
Kadant
Jining Light Machinery Co., Ltd.
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Legal Representative
Date:
July 30, 2007
14
JPMorgan
SCHEDULE
FORM
OF REQUEST
To:
J
PMorgan Chase Bank,N.A.
Shanghai
Branch
From:
Kadant
Jining Light Machinery Co., Ltd.
Short
Term Advised Credit Line Facility Agreement dated July 30,
2007
1.
We
wish
to borrow a Loan as follows:-
(a)
Drawdown
Date: [ ]
(b)
Type:
Advance / Bank Guarantee
(b)
Amount:
[ ]
(c)
Payment
instructions / Beneficiary: [
]
(d)
Term:
[ ]
| 2. |
We confirm that each condition specified in Clause 5 is satisfied
on the
date of this Request.
|
| 3. |
This
request is irrevocable.
|
By:
[
]
Authorised
Signatory
15