Exhibit 10.16

 

 

FOURTH AMENDMENT TO CREDIT AGREEMENT

 

 

 

This Fourth Amendment to Credit Agreement dated as of July 18, 2017 (the "Fourth
Amendment"), is made between HAN FENG, INC., a North Carolina corporation having
its principal place of business at 6001 West Market Street, Greensboro, North
Carolina 27409 (the "Borrower"), and EAST WEST BANK, 535 Madison Avenue, 8th
Floor, New York, New York 10022 (referred to herein as the "Bank").

 

Recitals

 

Whereas, the Borrower, New Sun Wah Trading Corporation, a corporation originally
formed in the State of South Carolina ("New Sun Wah"), and the Bank entered into
a credit agreement as of January 5, 2012, providing for a credit facility from
the Bank to the Borrower and New Sun Wah in the maximum principal amount of Ten
Million ($10,000,000) Dollars,

 

Whereas, the Borrower is the successor in interest to New Sun Wah by merger of
New Sun Wah into the Borrower as of March 26, 2012 pursuant to Articles of
Merger filed with the Secretary of State of the State of North Carolina as of
such date, the Borrower being the surviving entity after such merger and New Sun
Wah being a division of the Borrower,

 

Whereas, the Borrower and the Bank increased the maximum principal amount of the
credit facility to Twelve Million ($12,000,000) Dollars, and amended certain
other terms and conditions of such credit facility, pursuant to an amendment to
credit agreement between the Borrower and the Bank dated as of May 21, 2013 (the
"First Amendment"),

 

Whereas, the Borrower and the Bank revised the interest rate applicable to such
credit facility, and amended certain other terms and conditions of the credit
facility, pursuant to a second amendment to credit agreement between the
Borrower and the Bank dated as of December 20, 2013 (the "Second Amendment")

 

Whereas, the Borrower and the Bank further amended such credit facility to,
among other things, (i) increase the maximum principal amount of the credit
facility to Fourteen Million Five Hundred Thousand ($14,500,000) Dollars, (ii)
extend the maturity date of the credit facility, (iii) revise the rate of
interest on the loans made thereunder, and (iv) revise certain covenants and
definitions of the Credit Agreement, pursuant to a third amendment to credit
agreement between the Borrower and the Bank dated as of July 1, 2016 (the "Third
Amendment"),

 

Whereas, the Borrower and the Bank wish to further amend such credit agreement,
as amended by the First Amendment, the Second Amendment and the Third Amendment
(the "Credit Agreement"), to, among other things, limit the aggregate amount of
Loans advanced under the credit facility until certain conditions are met, as
set forth herein,

 

 

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Terms and Conditions

 

 

1.

The Credit Agreement is hereby amended by the terms and conditions set forth in
this Fourth Amendment effective as of the date hereof, and in the event of any
conflict the terms of this Fourth Amendment shall govern.

        2. The following definitions set forth in Annex I of the Credit
Agreement are hereby amended to read as follows:

 

"Agreement": this Credit Agreement, as amended by Amendment to Credit Agreement
between the Borrower and the Bank dated as of May 21, 2013 (the "First
Amendment'), the Second Amendment to Credit Agreement between the Borrower and
the Bank dated as of December 20, 2013 (the "Second Amendment'), the Third
Amendment to Credit Agreement between the Borrower and the Bank dated as of July
1, 2016 (the "Third Amendment"), and the Fourth Amendment to Credit Agreement
between the Borrower and the Bank dated as of July __ , 2017 (the "Fourth
Amendment'), as the same may be further amended, supplemented or otherwise
modified from time to time.

 

 

3.

The following provision is hereby added to Section 1.04 of the Credit Agreement:

 

Notwithstanding the Commitment Amount in effect from time to time, and without
limiting the effect of any other provision of this Credit Agreement with respect
to the amount of Loans that can be advanced hereunder, the Bank may limit the
aggregate amount of the Loans advanced to the Borrower to the sum of Twelve
Million Five Hundred Thousand ($12,500,000.00) Dollars for so long as any
Indebtedness from the Borrower to League Realty USA LLC, a New York limited
liability company, including without limitation a loan in the approximate sum of
$2,000,000, remains outstanding.

 

 

4.

The following provision is hereby added as Section 6.08(e) of the Credit
Agreement:

 

(e) Minimum Effective Tangible Net Worth minus Investment in Affiliates shall
not be less than (i) $7,600,000 prior to December 31, 2017, and (ii) $9,000,000
at December 31, 2017, and thereafter.

 

 

5.

The following provision is hereby added as Section 7.03 of the Credit Agreement:

 

7.03 Non-Compliance Fee. The Borrower acknowledges that if the Borrower fails to
timely furnish the Bank with any financial records required by this Note or
otherwise fails to timely perform any other term, obligation or covenant
required by this Note or any related document (singularly and collectively
referred to as "Non-Compliance"), the Bank will incur costs and damages as
result of the Borrower's Non-Compliance, and in consideration of such costs and
damages, the Borrower agrees to pay the Bank a fee equal to 2.500% per annum of
the then outstanding Loan balance, calculated based on a 30-day month over a
360-day year (the "Predetermined Fee Amount"). Any fee under this section will
be imposed monthly in the Predetermined Fee Amount and due on the interest
payment due date until the Non-Compliance is cured by the Borrower. A
Predetermined Fee Amount will be calculated and imposed in accordance with this
section for each recurring event of Non-Compliance.

 

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6.

Except as amended by the terms of this Fourth Amendment to Credit Agreement, the
provisions of the Credit Agreement shall remain in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Fourth
Amendment to Credit Agreement as of the day and year first written above.

 

 

HAN FENG, INC.

 

By:      /s/ Zhou MinNi 

Name: Zhou Min Ni

Title:   Chief Executive Officer

 

By:      /s/ Chan Sin Wong 

Name: Chan Sin Wong

Title:   President

 

EAST WEST BANK

 

By:      /s/ Terry Mang

Name: Terry Mang

Title:    Vice President