DATED[] , 2008
CHINA ORIENT ASSET MANAGEMENT CORPORATION
BEIJING OFFICE
as Seller
and
[]
as Purchaser
______
LOAN SALE AND
PURCHASE AGREEMENT
______
Portfolio No.： COAMC2008BJ02A/ COAMC2008BJ02B
ARTICLEI DEFINITIONS, headings and construction 1
Section1.1 Definitions. 1
Section1.2 Headings. 1
Section1.3 Construction. 2
ARTICLEII PURCHASE AND SALE OF ASSETS 2
Section2.1 Sale and Purchase of Assets. 2
Section2.2 Purchase Price. 2
Section2.3 Third Party Agreements. 2
Section2.4 Brokerage Fee. 3
ARTICLEIII Payment of Deposit and Purchase Price 3
Section3.2 Payment of the Purchase Price. 4
Section3.3 No Deduction. 5
Section3.4 Application of Earnest Money Deposit. 5
The Earnest Money Deposit shall be applied as follows: 5
ARTICLEIV Closing 5
Section4.1 Obligation to Consummate Closing. 5
Section4.2 Determination of Closing Date. 5
Section4.3 Conditions to Closing. 6
Section4.4 Compilation of List of Asset Documents. 7
Section4.5 Updating of Assets Schedule. 7
Section4.6 Exchange of Documents. 8
Section4.7 Closing and Closing Deliverables. 8
ARTICLEV Allocation of relevant fees 9
Section5.1 Stamp Duties. 9
Section5.2 Transfer Expenses. 9
Section5.3 General Expenses. 9
ARTICLEVI Asset Servicing prior to the Closing Date 10
Section6.1 Resolution Proposal. 10
Section6.2 Approval by Purchaser. 11
Section6.3 Purchaser’s Resolution Proposal. 11
Section6.4 Participation by Purchaser. 11
Section6.5 Interim Servicing Fee to Seller. 11
Section6.6 Resolution Expenses. 12
Section6.7 No Liability of Seller. 12
ARTICLEVII REMEDIES for defects 12
Section7.1 Defect Raised by Seller. 12
Section7.2 Purchaser’s Claims of Defect. 13
Section7.3 Remedies Available. 13
Section7.4 Adjustment of the Allocated Purchase Price. 14
Section7.5 Repurchase. 15
ARTICLEVIII REPRESENTATIONS AND WARRANTIES and acknowledgments OF PURCHASER 17
Section8.1 Representations and Warranties of Purchaser. 17
Section8.2 Acknowledgments of Purchaser. 18
ARTICLEIX REPRESENTATIONS AND WARRANTIES OF SELLER 19
Section9.1 Representations and Warranties by Seller as to Seller. 19
Section9.2 Representations and Warranties by Seller Common to Loan Assets. 20
Section9.3 Representations and Warranties of Seller as to Environmental Matters. 22
Section9.4 Certain Other Matters relating to Representations and Warranties. 22
ARTICLEX COVENANTS OF SELLER AND PURCHASER 22
Section10.1 Seller’s Covenants. 22
Section10.2 Purchaser’s Covenants. 25
Section10.3 Post-Closing Service. 26
ARTICLEXI ASSIGNMENT OF RIGHTS AND OBLIGATIONS TO THIRD PARTIES 26
ARTICLEXII termination 26
Section12.1 Termination. 26
Section12.2 Remedies for Breach. 27
ARTICLEXIII SUBSEQUENT DOCUMENTATION 27
ARTICLEXIV FILES AND RECORDS 28
Section14.1 Conformity to Law. 28
Section14.2 Purchaser’s Document Maintenance. 28
ARTICLEXV NOTICES 28
ARTICLEXVI MISCELLANEOUS PROVISIONS 29
Section16.1 Severability. 29
Section16.2 Rights Cumulative; Waivers. 29
Section16.3 Binding Effect. 29
Section16.4 Prior Understandings; Integrated Agreement; Amendment. 29
Section16.5 Language and Counterparts. 29
Section16.6 Governing Law; Jurisdiction; Venue. 30
Section16.7 No Third Party Beneficiaries. 30
Section16.8 Confidentiality. 30
Section16.9 Force Majeure. 31
Section16.10 Effectiveness. 31
EXHIBIT 1 1
Schedule 1 Assets Schedule 1
EXHIBIT 2.3 List of Third Party Agreements 1
EXHIBIT 4.6(A) Form of Waiver of Government Guarantee 1
EXHIBIT 4.7(b)(i) Receipt of Asset Documents 1
EXHIBIT 4.7(B)(III) AGREEMENT ON TRANSFER OF ASSETS OF SINGLE BORROWER ……. 1
Exhibit 7.2 Form of Notification of Defect 1
EXHIBIT 8.2(E) NDRC Regulations 1
Exhibit 10.1(G) Form of Notice of Assignment to Obligor 1
ii
This LOAN SALE AND PURCHASE AGREEMENT (this “Agreement”) is entered into and made as of this [ ], 2008, by and between:
(a) China Orient Asset Management Corporation Beijing Office, the branch of China Orient Asset Management Corporation in Beijing, whose registered place of business is 3/F, Dakang Building, No.44 Chongwenmenwai Dajie,Beijing, China100062 (“Seller”); and
(b) [ ], a legal entity duly organized and existing under the laws of [], whose registered place of business is at [ ] (“Purchaser”).
WHEREAS,
(a) Seller received from China Cinda Asset Management Corporation (“Cinda”) certain non-performing loans originated by China Construction Bank (“CCB”) and received from Bank of China (“BOC”) certain policy loans resolved by BOC;
(b) Seller has entered with CITIC Trust and Investment Co., Ltd (the “Trustee”) into a trust agreement, whereby Seller has transferred partial non-performing loans originated by CCB as trust assets to the Trustee;
(c) Seller entered with the Trustee an engagement agreement, whereby Seller was engaged by the Trustee to resolve such non-performing loans in the name of Seller;
(d) Seller has agreed to sell, and Purchaser has agreed to purchase, all titles, interests and benefits to and in the Assets (as defined in Exhibit 1 of this Agreement) under the terms and conditions set forth herein;
(e) Seller hereby expressly states that the Assets under this Agreement are non-performing financial assets associated with special risks of uncollectability in part or as a whole and possible difficulties in collecting the repayments thereof;
(f) Purchaser hereby acknowledges that it is fully aware of and agrees to assume the above risks and difficulties, and agrees to enter into this Agreement based on its independent and prudent judgment, and agrees to acquire the Assets under the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE IDEFINITIONS, headings and construction
Section 1.1 Definitions.
For the purposes of this Agreement, unless the context otherwise requires, the terms with first letter capitalized shall have the meanings as set forth in Exhibit 1 of this Agreement.
Section 1.2 Headings.
The headings and the titles hereof and that of the Exhibits and Schedule hereof are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.
Section 1.3 Construction.
(a) Unless the context otherwise requires, singular nouns and pronouns, when used herein, shall be deemed to include the plural of such noun or pronoun, and pronouns of one gender shall be deemed to include the equivalent pronoun of the other gender.
(b) Whenever the term “to its knowledge” or any phrase similar thereto is used herein, “knowledge” referred to shall be deemed to mean actual knowledge a Person is aware of.
(c) The term” including” used herein means “including without limitation”.
ARTICLE IIPURCHASE AND SALE OF ASSETS
Section 2.1 Sale and Purchase of Assets.
On the Closing Date, subject to the terms and conditions hereof, Seller shall sell, transfer, convey and assign to Purchaser, and Purchaser shall purchase from Seller, the Assets in the Closing Pool and acquire Seller’s rights, titles, interests and benefits in and to such Assets.The Assets shall be transferred under the terms and conditions of this Agreement. Seller does not make any representations and warranties with regard to the Assets or the value thereof other than those representations and warranties made under Article IX.
Notwithstanding the foregoing and subject to the completion of the Closing, Purchaser shall bear the risk of any loss of and/or damage to the Assets in the Closing Pool commencing from the Cut-off Date, and in accordance with provisions of this Agreement, receive all the Net Resolution Proceeds and other interests in and benefits from the Assets in the Closing Pool since the Cut-off Date.
Section 2.2 Purchase Price.
(a) Payment to be made by Purchaser to Seller for the purchase of all the Assets shall be [ ] RMB Yuan (the “Purchase Price”).
(b) If, during the period from the date hereof through the Closing, any Asset set forth in the Assets Schedule attached hereto as Schedule 1 is deleted from the Closing Pool in accordance with this Agreement, or if the Allocated Purchase Price of any Asset in the Closing Pool is adjusted according to Article VII, then the Purchase Price shall be adjusted accordingly to equal the aggregate of the Allocated Purchase Prices and/or Revised Allocated Purchase Prices, as the case may be, of all the Assets in the Closing Pool.
Section 2.3 Third Party Agreements.
Purchaser agrees that, with respect to any litigation retainers and debt collection retainers and similar agreements, which were originally entered into by the BOC, CCB or Cinda, and assumed by Seller together with the “Assets” received therefrom, and any such other documents entered into by Seller for the purpose of preservation or disposal of certain Assets, as set forth in Exhibit 2.3 and included in the IRF (collectively, “Third Party Agreements”), Purchaser shall upon the Closing be bound by the terms and conditions of such Third Party Agreements and succeed to Seller’s rights and obligations thereunder beginning from the Cut-off Date.
Section 2.4 Brokerage Fee.
The parties agree and represent to each other that, unless otherwise stated in this Agreement or disclosed by Seller to Purchaser, no brokerage fee shall be payable to any Person in connection with the sale by Seller to Purchaser of any Asset under this Agreement.Seller and Purchaser agree to indemnify and hold the other harmless from any claim for any brokerage fee imposed upon, or demanded by, any Person claiming through or under such indemnifying party.
ARTICLE III Payment of Deposit and Purchase Price
Section 3.1 Deposit.
(a) Seller acknowledges that Seller has received from Purchaser ￥[] RMB paid on the Bid Date (the “Bid Deposit”).
(b) Purchaser shall pay Seller the Earnest Money Deposit in accordance with the following provisions:
(i) Within ten (10) Business Days after the signing of this Agreement, Purchaser shall make an additional payment in RMB[1], which, together with the Bid Deposit which has been paid, shall equal 20% of the Purchase Price (the “Earnest Money Deposit”). Upon receiving the above additional payment, Seller shall convert the Bid Deposit into part of the Earnest Money Deposit. No interest shall accrue on the Bid Deposit before it is converted into the Earnest Money Deposit. Failure of Purchaser to perform its obligations under this Section 3.1(b)(i) will constitute a material breach by Purchaser and entitle Seller to terminate this Agreement with a written notice of termination which shall take effect immediately unless otherwise expressly provided in such written notice of termination, and to entitle Seller to pursue all the remedies under Section 12.2(b).
(ii) In the event that Seller notifies Purchaser in writing, within fifteen (15) Business Days after receipt of the written proposal for the postponement of the Closing Date delivered by Purchaser pursuant to Section 4.2(d), that Seller agrees to postpone the Closing Date pursuant to the provisions of Section 4.2(d), then Purchaser shall, on or prior to the tenth (10th) Business Day before the Closing Date as set forth in Section 4.2(a), make an additional payment to Seller, which, together with the Earnest Money Deposit which has already been paid by Purchaser under Section 3.1(b)(i), shall equal 50% of the Purchase Price and shall constitute the Earnest Money Deposit hereunder.
(iii) Purchaser shall be paid interest calculated at the then current demand deposit rate of U.S. dollar or Renminbi (as the case may be) publicly announced by the Bank of China, accrued upon the Earnest Money Deposit for the period beginning from the date of Seller’s receipt from Purchaser the additional payment as stated in Section 3.1(b)(i) through (x) the Closing Date as stated in (i) Section 4.2(a) or (ii) the Closing Date as designated by Seller pursuant to Section 4.2(c) as applicable, (y) the date which is the ninetieth (90th) day following the date hereof in the event that the Closing is completed on or prior to the expiry of the Extension Period, or (z) the date upon which Seller returns the Earnest Money Deposit to Purchaser in accordance with Section 12.2(a) or (c), whichever shall be applicable.For the avoidance of doubt, without prejudice to Seller’s right to confiscate the Earnest Money Deposit in case of Purchaser’s breach of this Agreement, no interest accrued upon the Earnest Money Deposit shall be payable to Purchaser in the event that this Agreement is terminated pursuant to Section 12.1(b).
Section 3.2 Payment of the Purchase Price.
(a) On or prior to the Closing Date, Purchaser shall pay an amount equal to, based on the following calculation, the result of (i) the Purchase Price, less (ii) the Earnest Money Deposit (together with the accrued interest as stated in Section 3.1(b)(iii)), plus (iii) the Interim Servicing Fee, less (iv) the Net Resolution Proceeds. If Seller agrees to refund, after the Closing, the Earnest Money Deposit paid by Purchaser (together with the accrued interest as stated in Section 3.1(b)(iii)) upon Purchaser’s written request prior to the Closing, Purchaser shall pay an amount equal to, based on the following calculation, the result of (i) the Purchase Price, plus (ii) the Interim Servicing Fee, less (iii) the Net Resolution Proceeds .Purchaser shall make the above-mentioned payments in RMB[2].
(b) All the amounts payable under this Agreement (other than the Bid Deposit) shall be paid in one lump sum by wire transfer of immediately available funds into one of the following bank accounts, as applicable, or such other account as designated by Seller. Any bank charges associated with such payments shall be borne by Purchaser.
For US Dollars to:
Account No.: 800107807308023014
Recipient: China Orient Asset Management Corporation
Opening Bank: China Orient Asset Management Corporation Beijing Office
Swift Code: Bank of China, Beijing Branch
Tel No: 86-10-67165566
Description: China Orient Asset Management Corporation Beijing Office Portfolio No. COAMC2008BJ02A/COAMC2008BJ02B [Earnest Money Deposit or Purchase Price, where applicable]
For RMB to:
Account No.: 800107807308023001
Name: China Orient Asset Management Corporation Beijing Office
Opening Bank: Bank of China Beijing Branch
Description: China Orient Asset Management Corporation Beijing Office Portfolio No. COAMC2008BJ02A/COAMC2008BJ02B [Earnest Money Deposit or Purchase Price, where applicable]
Address: 3/F, Dakang Building, No.44 Chongwenmenwai Dajie, Beijing, 100062, P. R. China
Tel: 86-10-67165566
(c) In case there is any excess or shortfall in the amount actually paid by Purchaser, relevant adjustments shall be made by Seller refunding to Purchaser any excess, or Purchaser making additional payment to Seller of any such shortfall, within twenty (20) Business Days following the Closing.
(d) For the purposes of this Section 3.2, Purchaser shall be deemed to have satisfied the corresponding requirement of payments if Seller’s opening bank has produced written confirmation that the required payment has been received on the date of payment as provided herein.
Section 3.3 No Deduction.
Subject to Section 3.2(a), any payment made by Purchaser under this Agreement shall be paid without any deduction or set-off of any nature whatsoever or any restriction or condition and free and clear of any tax or other deductions of any nature.