DATED 28 September 2007 CHARGE over registered shares in Sinoenergy Holding Limited between SINOENERGY CORPORATION as Chargor and DB TRUSTEES (HONG KONG) LIMITED as Security Agent
DATED
28
September 2007
____________________________
CHARGE
over
registered shares
in
Sinoenergy Holding Limited
____________________________
between
SINOENERGY
CORPORATION
as
Chargor
and
DB
TRUSTEES (HONG KONG) LIMITED
as
Security Agent
THIS
CHARGE is dated 28 September 2007 and made between:
|
(1)
|
Sinoenergy
Corporation, incorporated in the State of Nevada, United States of
America, and having its registered office in ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ (the "Chargor");
and
|
|
(2)
|
DB
Trustees (Hong Kong) Limited, incorporated in Hong Kong, and having
its
registered office in 55th Floor ▇▇▇▇▇▇ Kong Center, 2 Queen’s Road
Central, Hong Kong as trustee for the Purchasers (the "Security
Agent").
|
BACKGROUND:
|
(A)
|
The
Chargor, the Company and the Purchasers (as defined below), amongst
others, have entered into a Notes Purchase Agreement (as defined
below).
|
|
(B)
|
To
secure the due and punctual payment of the Secured Liabilities (as
defined
below), it is the intention of the Chargor to mortgage and charge
the
Shares (as defined below) to the Security Agent in accordance with
the
terms of this Charge.
|
|
(C)
|
It
is intended that this document takes effect as a deed notwithstanding
the
fact that a party may only execute this document under
hand.
|
|
(D)
|
The
Security Agent holds the benefit of this Charge as agent for the
Trustee
who holds it on trust as security for, inter alia, the holders of
Note
Obligations under the terms of the
Indentures.
|
|
(E)
|
This
Charge is a Security Document as defined in the
Indentures.
|
IT
IS
AGREED as follows:
1. INTERPRETATION
1.1 Definitions
Unless
expressly defined in this Charge, capitalised terms defined in the Indentures
shall have the same meaning in this Charge and the construction rules to
references set out in the Indentures shall apply to such references in this
Charge
In
addition, in this Charge:
"Act"
means
the
Conveyancing and Law of Property Act (Cap. 220) of the BVI.
“Additional
Shares”
means
all
shares in the capital of the Company which the Chargor owns in the future in
addition to the Shares, including, but not limited to, additional shares issued
to the Chargor in connection with any warrant, option, share split, issue of
bonus shares or recapitalisation and all Related Rights thereto.
“BCA”
means
the
Business Companies Act, 2004 of the BVI.
“BVI”
means
the
British Virgin Islands.
"Company"
means
Sinoenergy Holding Limited, a company incorporated in the BVI, with
incorporation number 668551, having its registered office at Akara Bldg, ▇▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Cay I, Road Town, Tortola.
“Convertible
Notes”
means
the
US$14,000,000 3% Guaranteed Senior Convertible Notes due 2012 of US$100,000
principal amount each issued or to be issued by the Chargor and convertible
into
shares of common stock of the Chargor.
"Default
Rate"
means
3.0%.
"Event
of Default"
means:
(a) failure
by the Chargor to pay any sum due under any of the Secured Liabilities on the
due date for payment thereof;
(b) any
representation or warranty given by the Chargor in this Charge or under or
in
connection with the Notes being or becoming incorrect, false or misleading
in
any material particular;
(c) any
breach or failure to observe or perform any provision of this Charge or under
or
in connection with the Notes; or
(d) the
Chargor (in relation to any law or jurisdiction):
| (i) |
being
unable to pay its debts when due or being otherwise
insolvent;
|
| (ii) |
resolving
or taking any step or procedure, preparatory to or for stopping or
suspending payments; and
|
| (iii) |
being
subject to any order in respect of bankruptcy, winding-up, compromise
with
creditors, execution of judgement, sequestration or attachment of
assets,
or
|
(e) an
Event
of Default occurs and is continuing under either of the Indentures.
“Indentures”
means
an
indenture dated on or about the date of this Charge by and among the Chargor,
the Company and the Trustee relating to the Senior Notes and an indenture dated
on or about the date of this Charge by and among the Chargor, the Company and
the Trustee in relation to the Convertible Notes.
“Notes”
means
the
Senior Notes and the Convertible Notes.
"Receiver"
means
a
receiver and manager or (if the Security Agent so specifies in the relevant
appointment) a receiver, in either case, appointed under this
Charge.
"Related
Rights"
means
(a)
any dividend or interest paid or payable in relation to any Share, (b) any
rights, money, shares or property accruing or offered at any time in relation
to
any Share by way of redemption, substitution, exchange, bonus or preference,
under option rights or otherwise, and (c) allotments, offers and rights accruing
or offered in respect of any of the Shares.
"Secured
Liabilities"
means
all
sums, liabilities and obligations owed or payable by:
| (a) |
the
Chargor under or in connection with the Notes;
and
|
| (b) |
the
Chargor to the Security Agent or any Receiver under or in connection
with
this Charge,
|
in
each
case, whether present or future, actual or contingent.
“Security
Interest”
means
any
mortgage, pledge, lien, charge (fixed or floating), assignment, conditional
or
forward or prepaid sale, fiducia security, hypothecation, set-off or trust
arrangement for the purpose of creating security, reservation of title or
security interest or any other agreement or arrangement having a substantially
similar effect.
"Security
Period"
means
the
period beginning on the date of this Charge and ending on the date on which
the
Security Agent is satisfied that all the Secured Liabilities have been
unconditionally and irrevocably paid and discharged in full.
“Senior
Notes”
means
the
US$16,000,000 Guaranteed Senior Notes due 2012 of US$100,000 principal amount
each issued or to be issued by the Chargor.
"Shares"
means
50,000 shares of par value US$1.00 representing the entire issued share capital
of the Company and all warrants, options or other rights to subscribe for,
purchase or otherwise acquire those shares.
1.2 Construction
| (a) |
In
this Charge, unless the contrary intention appears, a reference
to:
|
| (i) |
an
“amendment”
includes a supplement, novation or re-enactment and “amended”
is to be construed accordingly;
|
“assets”
includes present and future properties, revenues and rights of every
description;
an
“authorisation”
includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration or notarisation;
a
“person”
includes any individual, company, unincorporated association or body of persons
(including a partnership, joint venture or consortium), government, state,
agency, international organisation or other entity;
a
“regulation”
includes any regulation, rule, official directive or guideline (whether or
not
having the force of law, but if not having the force of law, if compliance
is
customary) of any governmental, inter-governmental or supranational body,
agency, department or regulatory or self-regulatory authority or
organisation;
| (ii) |
a
provision of law is a reference to that provision as amended or
re-enacted;
|
| (iii) |
a
Clause or a Schedule is a reference to a clause or schedule to this
Charge;
|
| (iv) |
a
person includes its successors, permitted transferees and
assigns;
|
| (v) |
the
singular shall include the plural and vice versa and words denoting
the
masculine gender shall include the feminine and neuter;
and
|
| (vi) |
a
document is a reference to that document as amended;
|
| (b) |
The
word “including”
is to be construed as being by way of illustration or emphasis only
and is
not to be construed as, nor shall it take effect as, limiting the
generality of any foregoing words.
|
| (c) |
An
Event of Default is “continuing”
if it has not been remedied or
waived.
|
| (d) |
The
index to and the headings in this Charge are for convenience only
and are
to be ignored in construing this
Charge.
|
| (e) |
Each
mortgage, charge and assignment created under this Charge is made
by the
Chargor as beneficial owner in accordance with Section 27 of the
Act.
|
| (f) |
If
the Security Agent considers that an amount paid by the Company or
the
Chargor to the Security Agent under this Charge or the Indentures
is
capable of being avoided or otherwise set aside on the insolvency,
liquidation or administration of the Company or the Chargor or otherwise,
then that amount shall not be considered to have been irrevocably
paid for
the purposes of this Charge.
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2. COVENANT
TO PAY
|
The
Chargor covenants with and undertakes to the Security Agent to pay
and
discharge the Secured Liabilities when due in accordance with their
terms
or, if no time for payment is specified, immediately on demand by
the
Security Agent.
|
3. FIXED
SECURITY
The
Chargor, with full title guarantee and as security for the due and punctual
discharge of all the Secured Liabilities, charges in favour of the Security
Agent:
|
(a)
|
by
way of a first equitable mortgage or first fixed charge all of the
Shares
and any Additional Shares; and
|
|
(b)
|
by
way of a first fixed charge all Related
Rights,
|
The
Chargor acknowledges giving this Charge, incurring obligations and giving rights
under this Charge for valuable consideration.
4. REPRESENTATIONS
AND WARRANTIES
4.1 Representations
and Warranties
The
Chargor makes the representations and warranties set out in this Clause 4
to the Security Agent on the date of this Agreement and throughout the Security
Period.
4.2 Status
of Chargor
|
(a)
|
It
is a limited liability company, duly incorporated and validly existing
under the laws of the State of Nevada;
|
| (b) | it has the power to own its assets and carry on its business, as it is being conducted; and |
|
(c)
|
neither
the Chargor nor any of the Chargor’s assets are subject to any
immunity.
|
4.3 Powers and authority
The
Chargor has the power to enter into, perform and deliver, and has taken all
necessary action to enter into, perform and deliver this Charge and the
transactions contemplated by this Charge.
4.4 Legal validity
This
Charge constitutes the legal, valid and binding obligations of the Chargor
enforceable in accordance with its terms and creates a first priority Security
Interest over the Shares and the Related Rights.
4.5 Non-conflict
The
entry
into and performance by the Chargor of, and the transactions contemplated by,
this Charge do not and will not:
|
(a)
|
conflict
with any law or regulation or judicial or official
order;
|
|
(b)
|
conflict
with the constitutional documents of the Company;
or
|
|
(c)
|
conflict
with any document which is binding upon the Chargor or any of its
assets.
|
4.6 Authorisations
All
authorisations required or desirable in connection with the entry into,
performance, validity and enforceability of, and the transactions contemplated
by, this Charge have been obtained or effected (as appropriate) and are in
full
force and effect.
4.7 The
Shares
|
(a)
|
The
Chargor is the sole, absolute, legal and beneficial registered
owner of,
and has good title to, the Shares and the Related
Rights;
|
|
(b)
|
the
Shares represent the entire issued share capital of the
Company;
|
|
(c)
|
the
Shares and, to the extent applicable, the Related Rights, are
fully paid
and not issued in part or in whole in consideration for a promissory
note
or written obligation for payment of a debt and are not otherwise
subject
to forfeiture or compulsory
redemption;
|
|
(d)
|
there
are no covenants, agreements, conditions, interest, rights or
other
matters whatsoever which adversely affect the Shares and Related
Rights;
|
|
(e)
|
the
Shares are freely transferable on the books of the Company and
no consents
or approvals are required in order to register a transfer of
the
Shares;
|
|
(f)
|
the
Shares and Related Rights are free from any Security Interest
or any
agreement to create any Security Interest, except those created
by this
Charge; and
|
|
(g)
|
the
Chargor has received no notice of any adverse claims by any person
in
respect of the ownership of the Shares or the Related Rights
or any
interest in the Shares or the Related
Rights.
|
4.8
The
Company
|
(a)
|
The
Company is a limited liability entity duly incorporated, validly
existing
and in good standing under the laws of the
BVI;
|
|
(b)
|
The
Company has the power and all necessary licences, permits and
authorisations to own its assets and carry on its business as it
is being
conducted; and
|
|
(c)
|
neither
the Company nor the Company’s assets are subject to any
immunity.
|
4.9
No
Default
|
No
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 binding on the
Chargor,
the Company or any of their respective
assets.
|
4.10
Security
This
Charge creates those Security Interests it purports to create and is not liable
to be avoided or otherwise set aside on the insolvency or liquidation of the
Chargor or otherwise.
4.11 Litigation
|
There
is no litigation, arbitration or administration proceeding presently
current or pending or threatened against the Chargor or the
Company.
|
4.12 Winding-up
|
No
meeting has been convened, order made or resolution passed for the
winding-up of the Chargor or the Company, no such step is intended
by
either the Chargor or the Company and, so far as it is aware, no
petition,
application or the like is outstanding for its
winding-up.
|
4.13 Times
for making representations and warranties
The
representations and warranties set out in this Clause 4 are made on the
date of this Charge and are deemed to be repeated by the Chargor on each day
during the Security Period with reference to the facts and circumstances then
existing.
4.14 Information
and documents
All
information, documents and other evidence submitted in writing to the Security
Agent pursuant to this Charge are true, complete, accurate and updated in all
material respects as at the date that such information, documents and other
evidence were submitted.
4.15 Full
disclosure
It
has
disclosed in writing to the Security Agent all facts relating to the Chargor,
this Charge, the Secured Liabilities, the Related Rights and the Shares and
all
things in connection with them, which are material to the assessment of the
nature and amount of the risk undertaken by the Security Agent in entering
into
any transaction relating to this Charge and doing anything in connection with
this Charge or a transaction relating to it, including (but not limited to)
all
of its interests in the Shares.
5 UNDERTAKINGS
5.1 Duration
The
undertakings in this Clause 5 remain in force throughout the Security
Period.
5.2 Restrictions
on dealing
The
Chargor shall not:
|
(a)
|
create
or permit to subsist any Security Interest on any of the Shares or
the
Related Rights other than any Security Interest created by this Charge;
or
|
|
(b)
|
sell,
lease, transfer or otherwise dispose of any of the Shares or the
Related
Rights or permit the same to occur;
or
|
|
(c)
|
take
or permit the taking of any action which may result in the rights
attaching to any of the Shares or the Related Rights being altered
or
further shares in the Company being issued;
or
|
|
(d)
|
do
or cause or permit to be done anything which may in some way depreciate,
jeopardise or otherwise prejudice the value to the Security Agent
of the
Shares or the Related Rights.
|
5.3 Deposit
of Shares
The
Chargor shall:
|
(a)
|
forthwith
upon execution of this Charge, deposit with the Security Agent, or
as the
Security Agent may direct, all original certificates and other documents
of title or evidence of ownership in relation to the Shares and the
Related Rights;
|
|
(b)
|
execute
and deliver to the Security Agent all share transfers and other documents
which may be requested by the Security Agent in order to enable the
Security Agent or its nominees to be registered as the owner or otherwise
obtain a legal title to the Shares and their Related Rights, including
forthwith upon execution of this Charge, the executed, but undated
blank
share transfer form in the form set out in Schedule
5;
|
|
(c)
|
forthwith
upon execution of this Charge, deposit with the Security Agent with
respect to the Company a signed undated resignation of each director
of
the Company (incorporating a confirmation of no claim against the
Company
for compensation for loss of office or otherwise), together with
a signed
authority from each such director authorising the Chargee to make
use of
such resignation upon and/or at any time after the occurrence of
an Event
of Default (in the form set out in Schedule
3);
|
|
(d)
|
forthwith
upon execution of this Charge, deposit with the Security Agent signed
undated resolutions of all the directors of the Company approving
(1) the
resignation of each such director, (2) the appointment as directors
in
their place of such persons as the Security Agent may nominate and
(3) the
registration of any transfer of the Shares pursuant to this Charge,
together with a signed authority from each such director authorising
the
Security Agent to make use of such resolutions upon and/or at any
time
after the occurrence of an Event of
Default;
|
|
(e)
|
on
or before execution of this Charge, deposit with the Security Agent
an
undertaking, duly executed by the Company and all the directors of
the
Company, by which the Company and such directors undertake to register
any
transfer of the Shares pursuant to this Charge, in the form set out
in
Schedule 2;
|
|
(f)
|
not
without the prior written consent of the Security Agent permit the
appointment or removal of any director of the
Company;
|
|
(g)
|
immediately
upon the appointment, removal or resignation of any director of the
Company, to deposit with the Security Agent (1) a resignation and
authority of such director (if appointed) complying with clause 5.3(c)
and
(2) replacements for the documents referred to in clauses 5.3(d)
and
5.3(e) reflecting such appointment, removal or
resignation;
|
|
(h)
|
save
as permitted under the Indentures, not without the prior written
consent
of the Security Agent permit the issue by the Company of any or (except
pursuant to this Charge) the transfer of any shares issued by the
Company;
|
|
(i)
|
forthwith
upon execution of this Charge, deposit with the Security Agent with
respect to the Chargor an executed Irrevocable Proxy, in the form
set out
in Schedule 4; and
|
|
(j)
|
upon
the Chargor becoming the registered owner of and receiving share
certificates in respect of any shares in the share capital of the
Company
in addition to the Shares after the date hereof which have been acquired
in exchange for or following the conversion or reclassification of
any of
the Shares, deliver such share certificates to the Security Agent
and
share transfer form(s) which have been duly executed in blank by
it or its
nominee(s) (as applicable) in favour of the Security Agent, as
appropriate, in respect of such shares in the form set out in Schedule
5.
|
5.4 Payment
obligations in respect of the Shares
|
(a)
|
The
Chargor shall make all payments due and payable in respect of any
of the
Shares or the Related Rights and if it fails to do so the Security
Agent
may (but is not obliged to) make any such payment on behalf of the
Chargor. The Chargor shall forthwith on demand reimburse the Security
Agent for any payment made by the Security Agent pursuant to this
paragraph together with interest at the Default Rate from the date
of
payment by the Security Agent up to and including the date of
reimbursement by the Chargor.
|
|
(b)
|
The
Chargor shall comply with all other conditions and obligations in
respect
of any of the Shares or the Related
Rights.
|
|
(c)
|
The
Security Agent is not obliged to carry out any obligation of the
Chargor
in respect of any of the Shares or the Related Rights or to make
any
payment, or to make any enquiry as to the nature or sufficiency of
any
payment received by it or the Chargor, or to present or file any
claim or
take any other action to collect or enforce the payment of any amount
to
which it may have been or to which it may be entitled under this
Charge.
|
|
(d)
|
The
Chargor shall ensure that the Shares are at all times free from any
restriction on transfer by the Security Agent or its nominee or any
Receiver to perfect or enforce the Security Interests created by
or
pursuant to this Charge and procure that the board of directors of
the
Company approves any transfer of the Shares in the Company desired
to be
made by the Security Agent or its nominee or any Receiver in the
exercise
of the rights, powers and remedies conferred upon it by this Charge
or by
law.
|
|
(e)
|
Unless
retention is permitted by clause 7.2(b) or otherwise agreed in writing
by
the Security Agent, the Chargor shall account to the Security Agent,
promptly following receipt, for all moneys received before or after
the
occurrence of an Event of Default in respect of the Shares and Related
Rights and, pending payment of such moneys to the Security Agent,
to hold
such moneys on trust for the Security
Agent.
|
|
(f)
|
The
Chargor shall notify the Security Agent of the contents of any
communication or document received by it in relation to any of the
Shares.
|
|
(g)
|
The
Chargor shall make all such filings and registrations and shall execute
all such documents and do all such acts and take all such other steps
as
may be necessary, desirable or convenient, in the Security Agent’s sole
discretion, in connection with the creation, perfection or protection
of
the Security Interests created by or pursuant to this Charge and
pay (or
procure payment of) all application, registration, renewal and other
fees
in respect of the same, when the same have become due and
payable.
|
|
(h)
|
The
Chargor shall procure that no amendment or supplement is made to
the
memorandum or articles of association of the Company without the
prior
written consent of the Security
Agent.
|
|
(i)
|
The
Chargor shall procure that the Company makes a notation of this Charge
on
its register of members in form and substance satisfactory to the
Security
Agent and files a copy thereof at the Registry of Corporate Affairs
in the
BVI.
|
5.5 Additional
Shares
If
the
Chargor receives any Additional Shares, sub-clauses 5.3(a), (b), (d), (e) and
(i) and sub-clause 5.4 shall apply to the Additional Shares.
5.6 Other
obligations in respect of the Shares and the Related
Rights
|
(a)
|
The
Chargor must promptly copy to the Security
Agent
and comply with all requests for information which is within
its knowledge
and which are made under any statutory or regulatory provisions
relevant
to or binding on the Chargor, the Shares and/or any Related
Rights or any
similar provision contained in any articles of association
or other
constitutional document relating to the Shares or the Related
Rights. If
it fails to do so, the Security
Agent
may elect to provide such information as it may have on behalf
of the
Chargor.
|
|
(b)
|
The
Chargor must comply with all other conditions and obligations
assumed by
it in respect of the Shares and the Related
Rights.
|
|
(c)
|
The
Security
Agent
is
not obliged to:
|
| (i) |
perform
any obligation of the Chargor; or
|
| (ii) |
make
any payment, or make any enquiry as to the nature or sufficiency
of any
payment received by it or the Chargor or to present or file any claim
or
take any other action to collect or enforce the payment of any amount
to
which it may be entitled under this
Charge,
|
| in respect of the Shares or the Related Rights. |
6. WHEN
SECURITY BECOMES ENFORCEABLE
| (a) |
Upon
the occurrence of an Event of Default, the Chargor shall be in default
under this Charge.
|
| (b) |
The
restriction on the consolidation of mortgages and on power of sale
imposed
by sections 35 and 40 respectively of the Act shall not apply to
the
security constituted by this
Charge.
|
| (c) |
The
power to sell or dispose of the Charged Property and other powers
conferred by sections 38 and 39 of the Act, section 66 of the BCA
and all
other enforcement powers conferred by this Charge shall be immediately
exercisable and the security constituted by this Charge is enforceable
at
any time after one day has elapsed following the Chargor being in
default
under paragraph (a) above and having been notified and required to
rectify
such matter by the Security Agent.
|
7. ENFORCEMENT
OF SECURITY
7.1 General
For
the
purposes of all powers implied by statute, the Secured Liabilities are deemed
to
have become due on the date of this Charge.
7.2 Shares
|
(a)
|
After
the security constituted by this Charge has become enforceable, and
without limiting any other rights of the Security Agent under this
Charge
or at law, the Security Agent shall have the rights set out in Schedule
1
and, in addition, may:
|
| (i) |
sell
all or any of the Shares or Related Rights in any manner permitted
by law
upon such terms as the Security Agent in good faith
determines;
|
| (ii) |
collect,
recover or compromise and give a good discharge for any money payable
to
the Chargor in respect of the Shares or Related Rights or in connection
with this Charge;
|
| (iii) |
take
any action against any institution as the Security Agent in its sole
discretion may determine to be necessary in order to enforce the
Security
Agent’s rights under the Shares or Related Rights or this Charge; and
|
| (iv) |
exercise
(in the name of the Chargor and without any further consent or authority
on the part of the Chargor) any voting rights and any powers or rights
which may be exercised by the person or persons in whose name any
Share or
its Related Rights are registered or who is the holder of any of
them or
otherwise.
|
|
(b)
|
Until
such time the security created by this Charge shall become enforceable,
the voting rights, powers and other rights in respect of the Shares
shall
(if exercisable by the Security Agent) be exercised in any manner
which
the Chargor may direct in writing provided that such exercise would
not
(in the absolute discretion of the Security Agent) prejudice the
security
created by this Charge and is not otherwise inconsistent with the
terms of
this Charge.
|
7.3 No
obligation on Security Agent
The
Chargor agrees and acknowledges that the Security Agent need not:
| (a) |
do
anything to obtain payment of any dividends or other income in respect
of
the Shares or the Related Rights;
or
|
| (b) |
vote
at any meeting of shareholders of the Company;
or
|
| (c) |
exercise
rights in respect of the Shares or the Related Rights;
or
|
| (d) |
sell
the Shares or Related Rights,
|
even
if
it has reason to believe that the value of the Shares or the Related Rights
may
fall. The Security Agent is not responsible for loss as a result of such a
failure to act or delay in so acting.
7.4 Order
of enforcement
The
Security Agent
may enforce this Charge before it enforces other rights or
remedies:
| (a) |
against
any other person; or
|
| (b) |
under
another document.
|
If the Security Agent has more than one encumbrance, it may enforce them in
any
order it chooses.
7.5 No
notice required unless mandatory
Neither
the Security Agent nor any Receiver need give to the Chargor any notice or
demand or allow time to elapse before exercising a right under this Charge
or
conferred by law (including a right to sell) unless the notice, demand or lapse
of time is required by law and cannot be excluded.
7.6 Mandatory
notice period
If
the
law requires that a period of notice must be given or a lapse of time must
occur
or be permitted before a right under this Charge or conferred by law may be
exercised, then:
| (a) |
when
a period of notice or lapse of time is mandatory, that period of
notice
must be given or that lapse of time must occur or be permitted by
the
Security Agent; or
|
| (b) |
when
the law provides that a period of notice or lapse of time may be
stipulated or fixed by this Charge, then one day is stipulated and
fixed
as that period of notice or lapse of time including, if applicable,
as the
period of notice or lapse of time during
which:
|
| (i) |
an
Event of Default must continue before a notice is given or requirement
otherwise made for payment of the Secured Liabilities or the observance
of
other obligations under this Charge;
and
|
| (ii) |
a
notice or request for payment of the Secured Liabilities or the observance
of other obligations under this Charge must remain not complied with
before the Security Agent or a Receiver may exercise
rights.
|
7.7 Contingencies
|
(a)
|
If
the Security Agent enforces the security constituted by this Charge
at a
time when no amounts are due under the Secured Liabilities or this
Charge
but at a time when amounts may or will become so due, the Security
Agent
(or the Receiver) may pay the proceeds of any recoveries effected
by it
into a suspense account.
|
|
(b)
|
The
Security Agent (or a Receiver) may (subject to the payment of any
claims
having priority to this security) withdraw amounts standing to the
credit
of the suspense account to:
|
|
(i)
|
meet
all costs, charges and expenses incurred and payments made by the
Security
Agent (or such Receiver) in the course of such
enforcement;
|
|
(ii)
|
pay
remuneration to the Receiver as and when the same becomes due and
payable;
and
|
|
(iii)
|
meet
amounts due and payable under the Secured Liabilities and this Charge
as
and when the same become due and
payable,
|
in
each
case, together with interest thereon (as well after as before judgment and
payable on demand) at the Default Rate from the date the same become due and
payable until the date the same are unconditionally and irrevocably paid and
discharged in full.
|
(c)
|
The
Chargor will not be entitled to withdraw all or any moneys (including
interest) standing to the credit of the suspense account until the
expiry
of the Security Period.
|
7.8 Privileges
Each
Receiver and the Security Agent is entitled to all the rights, powers,
privileges and immunities conferred by the Act on mortgagees and receivers
when
such receivers have been duly appointed under the Act, except that
Section 40 of the Act does not apply.
7.9 Protection
of third parties
No
person
(including a purchaser) dealing with the Security Agent or a Receiver or the
agents of either will be concerned to enquire:
|
(a)
|
whether
the Secured Liabilities have become payable;
or
|
|
(b)
|
whether
any power which the Security Agent or the Receiver is purporting
to
exercise has become exercisable; or
|
|
(c)
|
whether
any money remains due under the Indentures or this Charge;
or
|
|
(d)
|
how
any money paid to the Security Agent or to the Receiver is to be
applied.
|
7.10 Redemption
of prior Mortgages
At
any
time after the security constituted by this Charge has become enforceable,
the
Security Agent may:
|
(a)
|
redeem
any prior Security Interest against any of the Shares or the Related
Rights; and/or
|
|
(b)
|
procure
the transfer of that Security Interest to itself;
and/or
|
|
(c)
|
settle
and pass the accounts of the prior mortgagee, chargee or encumbrancer
and
any accounts settled and passed will be conclusive and binding on
the
Chargor.
|
The
Chargor shall pay on demand all principal moneys, interest, costs, charges
and
expenses in connection with any redemption and/or transfer.
8 NO
LIABILITY AS MORTGAGEE
8.1 No
liability as mortgagee in possession
Neither
the Security Agent nor any Receiver will be liable, by reason of taking
possession of any of the Shares or the Related Rights, to account as mortgagee
in possession or for any loss on realisation or for any default or omission
for
which a mortgagee in possession might be liable except for any loss incurred
by
the gross negligence or wilful misconduct of either the Security Agent or
Receiver.
8.2 Agent
of the Chargor
Each
Receiver is deemed to be the agent of the Chargor for all purposes and
accordingly is deemed to be in the same position as a Receiver duly appointed
by
a mortgagee under the Act. The Chargor alone shall be responsible for his
contracts, engagements, acts, omissions, defaults and losses and for liabilities
incurred by him and the Security Agent shall not incur any liability (either
to
the Chargor or to any other person) by reason of the Security Agent making
his
appointment as a Receiver or for any other reason.
9. RECEIVER
9.1 Appointment
of Receiver
At
any
time after the security constituted by this Charge becomes enforceable, or
if
the Chargor so requests the Security Agent in writing, at any time, the Security
Agent may without further notice appoint under seal or in writing under its
hand
any one or more persons to be a Receiver of all or any part of any of the Shares
or the Related Rights in like manner in every respect as if the Security Agent
had become entitled under the Act or the BCA to exercise the power of sale
conferred under the Act or the BCA.
9.2 Removal
The
Security Agent may by writing under its hand:
|
(a)
|
remove
any Receiver appointed by it; and
|
|
(b)
|
may,
whenever it deems it expedient, appoint a new Receiver in the place
of any
Receiver whose appointment may for any reason have
terminated.
|
9.3 Remuneration
The
Security Agent may fix the remuneration of any Receiver appointed by
it.
9.4 Relationship
with Security Agent
To
the
fullest extent permitted by law, any right, power or discretion conferred by
this Charge (either expressly or impliedly) upon a Receiver of any of the Shares
or the Related Rights may after the security created by this Charge becomes
enforceable be exercised by the Security Agent in relation to any of the Shares
or the Related Rights without first appointing a Receiver or notwithstanding
the
appointment of a Receiver.
10. POWERS
OF RECEIVER
10.1 General
|
(a)
|
Each
Receiver has, and is entitled to exercise, all of the rights, powers
and
discretions set out below in this Clause 10 in addition to those
conferred by the Act or the BCA on any receiver appointed under the
Act or
the BCA.
|
|
(b)
|
If
there is more than one Receiver holding office at the same time,
each
Receiver may (unless the document appointing him states otherwise)
exercise all of the powers conferred on a Receiver under this Charge
individually and to the exclusion of any other
Receivers.
|
10.2 Possession
A
Receiver may take immediate possession of, collect and get in any of the Shares
or the Related Rights or any part thereof and for that purpose take such
proceedings as may seem to the Receiver expedient to recover possession of
any
of the Shares or the Related Rights.
10.3 Sale
of assets
A
Receiver may sell, dispose of, exchange, convert into money and realise any
of
the Shares or the Related Rights by public auction or private contract and
generally in any manner and on any terms which he thinks proper. Without
prejudice to the generality of the foregoing he may do any of these things
for
consideration comprising cash, securities, debentures or other obligations,
shares, stock or any other valuable consideration and any such consideration
may
be payable in a lump sum or by instalments spread over such period as he thinks
fit.
10.4 Borrow
Money
|
A
Receiver may for the purpose of exercising any of the powers, authorities
and discretions conferred on him by or pursuant to this Charge and/or
of
defraying any costs, charges, losses or expenses (including his
remuneration) which shall be incurred by him in the exercise of such
powers, authorities and discretions or for any other purpose, raise
and
borrow money either unsecured or on the security of any of the Shares
or
the Related Rights or any part of them either in priority to the
security
constituted by this Charge or otherwise and generally on such terms
and
conditions as he may think fit and no person lending such money shall
be
concerned to enquire as to the propriety or purpose of the exercise
of
such power or to see to the application of money so raised or
borrowed.
|
10.5 Compromise
A
Receiver may settle, adjust, refer to arbitration, compromise and arrange any
claims, accounts, disputes, questions and demands with or by any person who
is
or claims to be a creditor of the Chargor or relating in any way to any of
the
Shares or the Related Rights.
10.6 Legal
actions
A
Receiver may commence, continue, discontinue, enforce or defend all such
actions, suits and proceedings in relation to any of the Shares or the Related
Rights as may seem to him to be expedient including in relation to the
liquidation of the Company.
10.7 Appointment
of professionals
|
A
Receiver may appoint a solicitor or accountant or other professionally
qualified person to assist him in the performance of his
functions.
|
10.8
Realisation
|
A
Receiver may do all such things as may be necessary for the realisation
of
any of the Shares or the Related
Rights.
|
10.9
Payments
|
A
Receiver may make a payment which is necessary or incidental to the
performance of his functions.
|
10.10 Receipts
A
Receiver may give valid receipts for all moneys or dividends and execute all
assurances and things which may be proper or desirable for realising any of
the
Shares or the Related Rights.
10.11 Delegation
A
Receiver may delegate his powers in accordance with Clause 15
(Delegation).
10.12 Other
powers
A
Receiver may:
|
(a)
|
do
all other acts and things which he may consider desirable or necessary
for
realising any of the Shares or the Related Rights or incidental or
conducive to any of the rights, powers or discretions conferred on
a
Receiver under or by virtue of this Charge;
and
|
|
(b)
|
exercise
in relation to any of the Shares or the Related Rights all the powers,
authorities and things which he would be capable of exercising if
he were
the absolute beneficial owner of the
same,
|
and
may
use the name of the Chargor for any of the above purposes.
11. APPLICATION
OF PROCEEDS
Any
moneys received by the Security Agent or any Receiver after the security
constituted by this Charge has become enforceable shall be applied in the
following order of priority (but without prejudice to the right of the Security
Agent to recover any shortfall from the Chargor or any other
party):
|
(a)
|
in
satisfaction of, or provision for, all costs and expenses incurred
by the
Security Agent or any Receiver (including costs and expenses incurred
by
the Security Agent or any Receiver in the course of carrying on the
business of the Chargor) and of all remuneration due to any Receiver
under
this Charge;
|
|
(b)
|
subject
to Clause 18.5 in or towards payment of the Secured Liabilities or
such
part of them as is then due and payable;
and
|
|
(c)
|
in
payment of the surplus (if any) to the Chargor or other person entitled
to
it. In doing so, it does not incur any liability to the Chargor.
The
Security Agent is not required to pay the Chargor interest on any
money
remaining after the Secured Liabilities are
paid.
|
12. EXPENSES
AND INDEMNITY
The
Chargor irrevocably and unconditionally agrees as a primary obligation to pay
to
the Security Agent from time to time on demand all costs and expenses (including
legal fees on a full indemnity basis) incurred or suffered in connection with
(a) their appointment or involvement hereunder or the exercise of any of their
powers or duties hereunder or the taking of any acts in accordance with the
terms of this Charge or its usual practice; (b) any instruction or other
direction upon which the Security Agent may rely under this Charge as well
as
the costs and expenses incurred by an indemnified party of defending itself
against or investigating any claim or liability with respect of the foregoing;
and (c) this Charge by the Security Agent, its directors, officers, employees
and agents, any Receiver, attorney, manager, agent or other person appointed
by
the Security Agent under this Charge and keep each of them indemnified against
any failure or delay in paying the same. The parties hereto acknowledge that
the
foregoing indemnities shall survive the resignation or removal of the
indemnified party or the termination of this Charge.
13. PAYMENTS
The
Chargor agrees to make payments under this Charge:
| (c) |
in
full without set-off or counterclaim, and without any deduction in
respect
of taxes unless prohibited by law; and
|
| (d) |
the
currency in which the payment is
due.
|
14. EXPERT
ADVICE
The
Security Agent shall engage and consult, at the expense of the Chargor, with
any
legal adviser and professional adviser selected by it and rely upon any advice
so obtained and each of its respective directors, officers, employees and duly
appointed agents shall be protected and shall not be liable in respect of any
action taken, or omitted to be done or suffered to be taken, in accordance
with
such advice.
15. DELEGATION
The
Security Agent and any Receiver may delegate by power of attorney or in any
other manner to any person any right, power or discretion exercisable by them
under this Charge and will notify the Chargor in writing within 14 days of
such
appointments. Any such delegation may be made upon the terms (including power
to
sub-delegate) and subject to any regulations which the Security Agent or such
Receiver (as the case may be) may think fit. Neither the Security Agent nor
any
Receiver will be in any way liable or responsible to the Chargor for any loss
or
liability arising from any act, default, omission or misconduct on the part
of
any such delegate or sub-delegate.
16. FURTHER
ASSURANCES
The
Chargor shall, at its own expense, take whatever action the Security Agent
or a
Receiver, each in its sole discretion, may require for:
|
(a)
|
perfecting
or protecting the security intended to be created by this Charge
over any
of the Shares or the Related Rights and the priority of such security;
and
|
|
(b)
|
facilitating
the realisation of any of the Shares or the Related Rights or the
exercise
of any right, power or discretion exercisable, by the Security Agent
or
any Receiver or any of its or their delegates or sub-delegates in
respect
of any of the Shares or the Related
Rights,
|
including
the execution of any transfer, conveyance, assignment or assurance of any
property whether to the Security Agent or to its nominees, and the giving of
any
notice, order or direction and the making of any registration, which in any
such
case, the Security Agent or a Receiver may think expedient.
17. POWER
OF ATTORNEY
The
Chargor, by way of security, irrevocably and severally appoints, with full
power
of substitution, the Security Agent, each Receiver and any of their delegates
or
sub-delegates to be its attorney to take any action which the Chargor is obliged
to take under this Charge after this Charge becomes enforceable in relation
to
the Shares and any Additional Shares, or under the Act or the BCA, including
under Clause 16 (Further Assurances). The Chargor ratifies and confirms
whatever any attorney does or purports to do pursuant to its appointment under
this Clause 17.
18. PRESERVATION
OF SECURITY
18.1 Continuing
security
The
security constituted by this Charge is continuing and will extend to the
ultimate balance of the Secured Liabilities regardless of any intermediate
payment or discharge in whole or in part.
18.2 Reinstatement
|
(a)
|
Where
any discharge (whether in respect of the obligations under this Charge,
any other security or otherwise) is made in whole or in part or any
arrangement is made on the faith of any payment, security or other
disposition which is avoided or must be restored on insolvency,
liquidation or otherwise without limitation, the liability of the
Chargor
under this Charge shall continue as if the discharge or arrangement
had
not occurred. The Security Agent shall be entitled to recover the
value or
amount of that security or payment from the Chargor, as if the payment,
discharge, avoidance or reduction had not occurred.
|
(b) On
request from the Security Agent, the Chargor agrees to do anything (including
signing any document) to restore to the Security Agent any security (including
this Charge) it held from the Chargor immediately before the discharge or
arrangement.
|
(c)
|
The
Security Agent may concede or compromise any claim that any payment,
security or other disposition is liable to avoidance or
restoration.
|
|
(d)
|
The
Chargor’s obligations under this clause are continuing obligations,
independent of the Chargor’s other obligations under this Charge and
continue after the expiry of the Security Period or the unconditional
release of this Charge.
|
18.3 Waiver
of defences
The
obligations of the Chargor under this Charge and this security will not be
affected by any act, omission, matter or thing which, but for this provision,
would reduce, release or prejudice any of its obligations under this Charge
or
this security or prejudice or diminish those obligations or this security in
whole or in part, including (whether or not known to the Security
Agent):
|
(a)
|
any
time or waiver granted to, or composition with, the Chargor, the
Company
or any other person;
|
|
(b)
|
the
release of the Company, the Chargor or any other person under the
terms of
any composition or arrangement with any creditor of the Company or
the
Chargor;
|
|
(c)
|
the
taking, variation, compromise, exchange, renewal or release of, or
refusal
or neglect to perfect, take up or enforce, any rights against, or
security
over assets of, the Company, the Chargor or any other person or any
non-presentment or non-observance of any formality or other requirement
in
respect of any instruments or any failure to realise the full value
of any
security;
|
|
(d)
|
any
incapacity or lack of powers, authority or legal personality of or
dissolution or change in the members or status of, the Company, the
Chargor or any other person;
|
|
(e)
|
any
variation (however fundamental) or replacement of the Indentures
or any
other document or security so that references to the Indentures or
other
document in this Clause shall include each variation or
replacement;
|
|
(f)
|
any
unenforceability, illegality or invalidity of any obligation of any
person
under the Indentures or any other document or security, to the intent
that
the Chargor's obligations under this Charge shall remain in full
force and
be construed accordingly, as if there were no unenforceability, illegality
or invalidity; or
|
|
(g)
|
any
postponement, discharge, reduction, non-provability or other similar
circumstance affecting any obligation of the Company or any other
person
under the Indentures or otherwise resulting from any insolvency,
liquidation or dissolution proceedings or from any law, regulation
or
order so that each such obligation shall for the purposes of the
Chargor's
obligations under this Charge be construed as if there were no such
circumstance.
|
18.4 Immediate
recourse
The
Chargor waives any right it may have of first requiring the Security Agent
(or
any trustee or agent on its behalf) to proceed against or enforce any other
rights or security or claim payment from any person before claiming from the
Chargor under this Charge.
18.5 Appropriations
The
Security Agent (or any trustee or agent on its behalf) may at any time during
the Security Period:
|
(a)
|
refrain
from applying or enforcing any other moneys, security or rights held
or
received by it (or any trustee or agent on its behalf) in respect
of those
amounts, or apply and enforce the same in such manner and order as
it sees
fit (whether against those amounts or otherwise) and the Chargor
shall not
be entitled to the benefit of the same;
and
|
|
(b)
|
hold
any moneys received from the Chargor or on account of the liability
of the
Chargor under this Charge in a suspense account or apply the same
in
payment to the Noteholders for application in or towards the discharge
of
those amounts in such manner and order as they see
fit.
|
18.6 Non-competition
The
Chargor shall not, at any time during the Security Period, after a claim or
sale
has been made under this Charge or by virtue of any payment or performance
by it
under this Charge:
|
(a)
|
be
subrogated to any rights, security or moneys held, received or receivable
by the Security Agent (or any trustee or agent on its behalf) or
be
entitled to any right of contribution or indemnity in respect of
any
payment made or moneys received on account of the Chargor's liability
under this Charge;
|
|
(b)
|
claim,
rank, prove or vote as a creditor of the Company or its estate in
competition with the Security Agent (or any trustee or agent on its
behalf); or
|
|
(c)
|
receive,
claim or have the benefit of any payment, distribution or security
from or
on account of the Company, or exercise any right of set-off as against
the
Company,
|
unless
the Security Agent otherwise directs. The Chargor shall hold in trust for and
forthwith pay or transfer to the Security Agent any payment or distribution
or
benefit of security received by it contrary to this Clause 18.6 or as
directed by the Security Agent.
18.7 Additional security
The
security constituted by this Charge is in addition to and is not in any way
prejudiced by any other security now or subsequently held by the Security Agent
for any of the Secured Liabilities.
19. SECURITY
AGENT’S ROLE
| (a) |
At
any time when the Security Agent is required or entitled to exercise
any
discretion or power, take any action, make any decision, form any
opinion
or give any direction pursuant to this Charge or otherwise in respect
of
the Shares or the Related Rights (including, without limitation,
any such
exercise of discretion or power, or the taking of any action, the
making
of any decision or giving of any direction in the name of the Chargor
pursuant to the provisions of this Charge), the Security Agent shall
act
solely on the instructions of the Trustee subject to being indemnified
to
its satisfaction.
|
| (b) |
As
regards the exercise and performance of all powers, authorities,
duties
and discretions of the Security Agent under this Charge, except where
expressly provided otherwise, the Security Agent shall act only in
accordance with the instructions of the Trustee and the Chargor shall
not
have any claim against the Security Agent for acting or refraining
from
acting as aforesaid.
|
| (c) |
The
Chargor hereby releases and indemnifies the Security Agent from all
and
any losses related to or in any way howsoever arising in connection
with
this Charge (including present, contingent and future
claims).
|
| (d) |
The
Security Agent may act through its personnel, agents, affiliates
and/or
branches.
|
| (e) |
Without
limiting paragraph (f) below, the Security Agent will not be liable
for
any action taken by it under or in connection with this Charge, unless
directly caused by its gross negligence or wilful
misconduct.
|
| (f) |
The
Security Agent will not be liable for any delay (or any related
consequences) in crediting an account with an amount required under
the
Indentures or this Charge to be paid by it if it has taken all necessary
steps as soon as reasonably practicable to comply with any applicable
laws
in any relevant jurisdiction and/or the regulations or operating
procedures of any recognised clearing or settlement system used by
it for
that purpose.
|
20. MISCELLANEOUS
20.1 New
Accounts
If
the
Security Agent receives, or is deemed to be affected by, notice, whether actual
or constructive, of any subsequent charge or other interest affecting any of
the
Shares or the Related Rights and/or the proceeds of sale of any of the Shares
or
the Related Rights, the Security Agent and/or the Noteholders may open a new
account with the Chargor. If the Security Agent and/or the Noteholders do not
open a new account, they shall nevertheless be treated as if they had done
so at
the time when the Security Agent received or was deemed to have received notice.
As from that time all payments made to the Security Agent and/or the Noteholders
will be credited or be treated as having been credited to the new account and
will not operate to reduce any amount for which this Charge is
security.
20.2 Evidence
and calculations
Any
certification or determination by the Security Agent of a rate or amount under
the Charge (or the Indentures) is conclusive evidence of the matters to which
it
relates.
20.3 Stamp
duties
The
Chargor will pay or procure the payment when due of all present and future
registration fees, stamp duties and other similar tax which is or becomes
payable in relation to this Charge and keep the Security Agent indemnified
against any failure or delay in paying them.
20.4 Covenant
to pay
The
Chargor
must pay or discharge the Secured Liabilities in the manner provided for in
the
Indentures.
20.5 Prompt
performance
Subject
to clause 20.11 (Time of the essence):
| (a) |
if
this Charge specifies when the Chargor agrees to perform an obligation,
the Chargor agrees to perform it by the time specified;
and
|
| (b) |
the
Chargor agrees to perform all other obligations
promptly.
|
20.6 Conflict
of interest
The
Security Agent’s and any Receiver’s rights and remedies under this Charge may be
exercised even if this involves a conflict of duty or the Security Agent or
Receiver has a personal interest in their exercise.
20.7 Remedies
cumulative
The
rights and remedies of the Security Agent or a Receiver under this Charge are
in
addition to other rights and remedies given by law independently of this
Charge.
20.8 Indemnities
The
indemnities in this Charge are continuing obligations, independent of the
Chargor’s other obligations under this Charge and continue after this Charge
ends. It is not necessary for the Security Agent to incur expense or make
payment before enforcing a right of indemnity under this Charge.
20.9 Inconsistent
law
To
the
extent permitted by law, this Charge prevails to the extent it is inconsistent
with any law.
20.10 Supervening
legislation
Any
present or future legislation which operates to vary the obligations of the
Chargor in connection with this Charge with the result that the Security Agent’s
rights, powers or remedies are adversely affected (including by way of delay
or
postponement) is excluded except to the extent that its exclusion is prohibited
or rendered ineffective by law.
20.11 Time
of the essence
Time
is
of the essence in this Charge in respect of an obligation of the Chargor to
pay
money.
20.12 No
liability on Security Agent
The
Security Agent shall not be liable for any loss of any kind (including but
not
limited to any loss arising from changes in exchange rates) which may occur
as a
result of the exercise or purported exercise of, or any delay or neglect to
exercise, any of its rights or remedies under this Charge.
20.13 Set-off
The
Security Agent may set off any obligations (whether or not matured) owed by
the
Chargor under this Charge (to the extent beneficially owned by it) against
any
obligation (whether or not matured) owed by the Security Agent to the Chargor,
regardless of the place of payment, booking branch or currency of either
obligation. If the obligations are in different currencies, the Security Agent
may convert either obligation at a market rate of exchange in its usual course
of business for the purpose of the set-off. If either obligation is unliquidated
or unascertained, the Security Agent may set off in an amount estimated by
it in
good faith to be the amount of that obligation.
|
The
Security Agent may do anything necessary to effect any set-off under
this
clause (including varying the date for payment of any amount owing
by the
Security Agent to the Chargor and making currency exchanges). This
clause
applies despite any other agreement between the Chargor and the Security
Agent.
|
20.14 Currency
Indemnity
|
(a)
|
If
the Security Agent receives an amount in respect of the Chargor's
liability under this Charge or if that liability is converted into
a
claim, proof, judgment or order in a currency other than the currency
(the
"contractual
currency")
in which the amount is expressed to be payable under this
Charge:
|
|
(i)
|
the
Chargor shall indemnify the Security Agent as an independent obligation
against any loss or liability arising out of or as a result of the
conversion;
|
|
(ii)
|
if
the amount received by the Security Agent, when converted into the
contractual currency at a market rate in the usual course of its
business,
is less than the amount owed in the contractual currency, the Chargor
shall forthwith on demand pay the Security Agent an amount in the
contractual currency equal to the deficit;
and
|
|
(iii)
|
the
Chargor shall forthwith on demand pay to the Security Agent any exchange
costs and taxes payable in connection with any such
conversion.
|
|
(b)
|
The
Chargor waives any right it may have in any jurisdiction to pay any
amount
under this Charge in a currency other than that in which it is expressed
to be payable.
|
20.15 Amendments
No
amendment, modification, termination or waiver of any provision of this Charge,
and no consent to any departure by the Chargor therefrom, shall in any event
be
effective unless the same shall be in writing and signed by the Security Agent
and, in the case of any such amendment or modification, by the Chargor. Any
such
waiver or consent shall be effective only in the specific instance and for
the
specific purpose for which it was given.
21. CHANGES
TO THE PARTIES
21.1 Transfers
by the Chargor
The
Chargor may not assign, transfer, novate or dispose of its rights and/or
obligations under this Charge.
21.2 Transfers
by Security Agent
The
Security Agent may assign, transfer, novate or dispose of all or any part of
its
rights and/or obligations under this Charge and in contemplation of such
transfer may disclose to a potential transferor or to any person who may
otherwise enter into contractual relations with the Security Agent in relation
to the Indentures such information about the Chargor and the Company as the
Security Agent shall consider appropriate.
21.3 Resignation
or change of Security Agent
The
Chargor acknowledges that the person acting as Security Agent under this Charge
may be replaced or resign from time to time and that any person agreeing to
act
as successor and so appointed shall become the Security Agent under this Charge
and be entitled to exercise all rights and powers vested hereunder.
22. SEVERABILITY
If
a
provision of this Charge is or becomes illegal, invalid or unenforceable in
any
jurisdiction, that shall not affect:
|
(a)
|
the
validity or enforceability in that jurisdiction of any other provision
of
this Charge; or
|
|
(b)
|
the
validity or enforceability in other jurisdictions of that or any
other
provision of this Charge.
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23. COUNTERPARTS
This
Charge may be executed in any number of counterparts, and this has the same
effect as if the signatures or seals on the counterparts were on a single copy
of this Charge.
24. NOTICES
24.1 Giving
of notices
|
All
notices or other communications under or in connection with this
Charge
shall be given in writing and, unless otherwise stated, may be made
by
facsimile. Any such notice will be deemed to be given as
follows:
|
(a) if
by
letter, when delivered; or
(b) if
by
facsimile, when received in legible form.
|
However,
a notice given in accordance with the above but received on a non-working
day or after business hours in the place of receipt will only be
deemed to
be given on the next working day in that
place.
|
24.2 Addresses
for notices
| (a) |
The
address and facsimile number of the Chargor
are:
|
| Address: |
1603-1604,
Tower B Fortune Centre Ao City, Beiyuan Road,,
Chaoyang
District, Beijing, P.R. China 100107
|
| Fax Number: | Chief Financial Officer |
| Attention: | ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ |
|
or
such other as the Chargor may notify to the Security Agent by not
less
than 10 days notice in writing; and
|
| (b) |
The
address and facsimile number of the Security Agent
are:
|
| Address: |
55th
Floor ▇▇▇▇▇▇ Kong Center, ▇ ▇▇▇▇▇’▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
|
| Fax Number: | ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ |
| Attention: | The Managing Director |
|
or
such other as the Security Agent may notify to the Chargor by not
less
than 10 days notice in writing.
|
25. RELEASE
Upon
the
expiry of the Security Period (but not otherwise), the Security Agent shall,
at
the request and cost of the Chargor, take whatever action is necessary to
release the Shares and the Related Rights from the security constituted by
this
Charge.
26. LANGUAGE
(a) Any
notice given under or in connection with this Charge shall be in
English.
(b) All
other
documents provided under or in connection with this Charge shall
be:
| (i) |
in
English; or
|
| (ii) |
if
not in English, accompanied by a certified English translation and,
in
this case, the English translation shall prevail unless the document
is a
statutory or other official
document.
|
27. DISPUTE
RESOLUTION
27.1 Submission
For
the
benefit of the Security Agent, the Chargor agrees that the courts of the BVI
have jurisdiction to settle any disputes in connection with this Charge and
accordingly submits to the jurisdiction of the BVI courts.
27.2 Service
of process
Without
prejudice to any other mode of service, the Chargor:
|
(a)
|
irrevocably
appoints as its agent for service of process the Company in relation
to
any proceedings before the BVI courts in connection with this
Charge;
|
|
(b)
|
agrees
to maintain such an agent for service of process in the BVI during
the
Security Period;
|
|
(c)
|
agrees
that failure by a process agent to notify the Chargor of the process
will
not invalidate the proceedings
concerned;
|
|
(d)
|
consents
to the service of process relating to any such proceedings by prepaid
posting of a copy of the process to its address for the time being
applying under Clause 24.2 (Addresses for notices);
and
|
|
(e)
|
agrees
that if the appointment of any person mentioned in paragraph (a)
above ceases to be effective, the Chargor shall immediately appoint
a
further person in the BVI to accept service of process on its behalf
in
the BVI and, failing such appointment within 15 days, the Security
Agent is entitled to appoint such a person by notice to the
Chargor.
|
27.3 Forum
convenience and enforcement abroad
The
Chargor:
|
(a)
|
waives
objection to the BVI courts on grounds of inconvenient forum or otherwise
as regards proceedings in connection with this Charge;
|
|
(b)
|
agrees
that a judgment or order of a BVI court in connection with this Charge
is
conclusive and binding on it and may be enforced against it in the
courts
of any other jurisdiction; and
|
| (c) |
irrevocably
and unconditionally waives to the fullest extent permitted by applicable
law any right it may have in any suit, action or proceedings brought
in a
BVI court arising out of or in connection with this Charge to require
the
Bank to post security for the costs of the Chargor or to post a bond
or to
take similar action.
|
27.4 Non-exclusivity
Nothing
in this Clause 27 limits the right of the Security Agent to bring
proceedings against the Chargor in connection with this Charge:
(a) in
any
other court of competent jurisdiction; or
(b) concurrently
in more than one jurisdiction.
25. WAIVER
OF IMMUNITY
The
Chargor irrevocably and unconditionally:
|
(a)
|
agrees
that if the Security Agent brings proceedings against it or its assets
in
relation to this Charge, no immunity from those proceedings (including
suit, attachment prior to judgment, other attachment, the obtaining
of
judgment, execution or other enforcement) will be claimed by or on
behalf
of itself or with respect to its
assets;
|
|
(b)
|
waives
any such right of immunity which it or its assets now has or may
subsequently acquire; and
|
|
(c)
|
consents
generally in respect of any such proceedings to the giving of any
relief
or the issue of any process in connection with those proceedings,
including, the making, enforcement or execution against any assets
whatsoever (irrespective of its use or intended use) of any order
or
judgment which may be made or given in those
proceedings.
|
26. GOVERNING
LAW
This
Charge is governed by BVI law.
This
Charge has been delivered as a deed on the date stated at the beginning of
this
Charge.
RIGHTS
OF
THE SECURITY AGENT
The
Security Agent shall have the right, either in its own name or in the name
of
the Chargor or otherwise and in such manner and upon such terms and conditions
as the Security Agent thinks fit, and either alone or jointly with any other
person:
(a) Take
possession
to
take
possession of the Shares, and to require payment to it of all
dividends;
(b) Deal
with
the Shares
to
sell,
transfer, assign, exchange or otherwise dispose of or realise the Shares and
Related Rights to any person either by public offer or auction, tender or
private contract and for a consideration of any kind (which may be payable
or
delivered in one amount or by instalments spread over a period or
deferred);
(c) Borrow
money
to
borrow
or raise money either unsecured or on the security of the Shares or Related
Rights (either in priority to the Charges or otherwise);
(d) Rights
of
ownership
to
exercise and do (or permit the Chargor or any nominee of it to exercise and
do)
all such rights and things as the Security Agent would be capable of exercising
or doing if it were the absolute beneficial owner of the Shares and Related
Rights;
(e) Claims
to
settle, adjust, refer to arbitration, compromise and arrange any claims,
accounts, disputes, questions and demands with or by any person relating to
the
Shares or the Related Rights;
(f) Legal
actions
to
bring,
prosecute, enforce, defend and abandon actions, suits and proceedings in
relation to the Shares or the Related Rights;
(g) Redemption
of Security
to
redeem
any Security (whether or not having priority to the Charges) over the Shares
or
the Related Rights and to settle the accounts of any person with an interest
in
the Shares or the Related Rights; and
(h) Other
powers
to
do
anything else it may think fit for the realisation of the Shares, the Related
Rights or incidental to the exercise of any of the rights conferred on the
Security Agent under or by virtue of the Indentures, this Charge, the Act or
the
BCA.
SCHEDULE
2
Acknowledgement
and Agreement of Company and its Directors
I,
the
undersigned, on behalf of the Company and in my personal capacity as the
Director of the Company, hereby acknowledge and agree to the charge dated 28
September 2007 and executed by Sinoenergy Corporation in favour of DB Trustees
(Hong Kong) Limited over the Shares (the “Share
Charge”)
and I
agree to approve any transfer of the Shares to the Security Agent or its nominee
pursuant to the Share Charge and to enter the particulars of such transfer
in
the Register of Members of the Company.
Unless
otherwise defined, capitalised terms defined in this acknowledgement and
agreement shall have the same meaning as afforded to them in the Share Charge.
Dated:
9/28/07
/s/
Tianzhou Deng
(Director)
SCHEDULE
3
Sinoenergy
Holding Limited (the “Company”)
RESIGNATION
OF DIRECTOR
Akara
▇▇▇▇,
▇▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
Cay I,
Road
Town,
Tortola
BVI
Dear
Sirs,
I
hereby
resign as a Director of the Company and from any and all other offices of the
Company I may hold effective from today's date without claim or compensation
for
loss of office or otherwise.
This
Resignation is issued pursuant to a Share Charge executed by the Company’s sole
shareholder, Sinoenergy Corporation and dated 28 September 2007 in favour of
DB
Trustees (Hong Kong) Limited who are authorised to date and deliver this
Resignation under the terms thereof.
DATED:
9/28/07
Yours
faithfully,
/s/
Tianzhou Deng
SCHEDULE
4
Sinoenergy
Corporation
▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
IRREVOCABLE
PROXY
The
undersigned being the owner of 50,000
ordinary
shares ("Shares", which expression shall be deemed to include any further shares
issued to the undersigned) of Sinoenergy
Holding Limited
("Company"), a British Virgin Islands company, hereby make, constitute and
appoint DB
Trustees (Hong Kong) Limited
("Security Agent"), or any individual designated by the Security Agent, as
proxy
and attorney-in-fact of the undersigned with full power to appoint a
representative or nominee or substitute to act hereunder from time to time
to
vote all or any of the Shares at all annual and extraordinary general meetings
of shareholders of the Company and to sign any unanimous written resolutions
of
the shareholders of the Company with the same force and effect as the
undersigned might or could do and the undersigned hereby ratifies and confirms
all that the said proxy and attorney-in-fact or its representative or nominee
or
substitute shall do or cause to be done by virtue hereof.
The
Shares have been mortgaged to the Security Agent pursuant to a share charge
("Charge") dated 28 September 2007 made between the undersigned and the Security
Agent. This Proxy is coupled with an interest and is irrevocable and shall
remain irrevocable as long as the Charge remains in effect.
IN
WITNESS whereof this instrument has been duly executed as a Deed this
28th
day of
September 2007.
|
EXECUTED
as
a DEED by
Sinoenergy
Corporation
in
the presence of:
______
Witness
|
)
)
)
)
)
)
)
)
|
/s/ Tianzhou Deng
Director
/s/ ▇▇▇▇▇▇▇ ▇▇▇
Director/Secretary
|
SCHEDULE
5
SHARE
TRANSFER FORM
FULL
NAME AND ADDRESS OF TRANSFEROR:
Sinoenergy
Corporation
of
▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
FULL
NAME AND ADDRESS OF TRANSFEREE:
FULL
NAME OF COMPANY:
Sinoenergy
Holding Limited
NUMBER
AND FULL DESCRIPTION OF SHARES:
50,000
Ordinary
Shares of US$1.00
each
CONSIDERATION:
The
Transferor hereby transfers to the Transferee the shares described above free
of
all liens, charges and encumbrances and together with all rights now or
hereafter attaching thereto, but subject to the Memorandum of Association and
Articles of Association of the Company.
Duly
signed this day
of
September, 2007
| The Transferor in the presence of: | /s/ Tianzhou Deng |
| WITNESS (Signature): | /s/ ▇▇▇▇▇▇▇ ▇▇▇ |
| WITNESS (Name) Print: | ▇▇▇▇▇▇▇ ▇▇▇ |
| WITNESS (Address) Print: | 1603-1604, Torrer B ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ |
| ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ |
SIGNATORIES
TO THE MORTGAGE OF SHARES
Chargor
SIGNED
and DELIVERED
As
a Deed
by
Sinoenergy
Corporation
in
the
presence of:
Witness:
/s/ ▇▇▇▇▇▇▇ ▇▇▇
Security
Agent
| SIGNED and DELIVERED | /s/ ▇▇▇▇ Sing Liu |
| As a Deed by | ▇▇▇▇ Sing ▇▇▇ |
| ▇▇ Trustees (Hong Kong) Limited | Director |
| in the presence of: | |
| Witness: | /s/ ▇▇▇▇ ▇▇▇ Wing ▇▇▇▇▇▇ |
| ▇▇▇▇ Kin ▇▇▇▇ ▇▇▇▇▇▇ | |
| Authorized Signatory |