Document:

exhibit 10.2

Exhibit 10.2
            
	
					
	Execution Version
	 
	 
	 
	 

	 
	 
	 
	 
	 

Granite Construction Incorporated

_____________________________________
                    

Temporary Waiver and Agreement
Dated as of December 24, 2013

to

Note Purchase Agreement
Dated as of December 12, 2007

_____________________________________

                    

Re:
$200,000,000 6.11% Series 2007-A Senior Notes due December 12, 2019

                                                    
	
					
	 
	 
	 
	 
	 

Temporary Waiver and Agreement

This Temporary Waiver and Agreement dated as of December 24, 2013 (the or this “Waiver”) to that certain Note Purchase Agreement dated as of December 12, 2007 is between Granite Construction Incorporated, a Delaware corporation (the “Company”), each of the Guarantors (as defined in the hereinafter defined Note Purchase Agreement) listed on the signature pages hereto, and each of the institutional investors listed on the signature pages hereto (collectively, the “Noteholders”):
Recitals:

A.    The Company and each of the Purchasers (as defined in the hereinafter defined Note Purchase Agreement) heretofore entered into that certain Note Purchase Agreement dated as of December 12, 2007 (as amended by that certain First Amendment dated as of October 11, 2012, the “Note Purchase Agreement”).  Pursuant to the Note Purchase Agreement, the Company originally issued and currently has outstanding $200,000,000 aggregate principal amount of its 6.11% Series 2007-A Senior Notes due December 12, 2019 (the “Notes”).  The Noteholders are the holders of 100% of the outstanding principal amount of the Notes.
B.    Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Purchase Agreement unless herein defined or the context shall otherwise require.
C.    Each of the Guarantors has entered into the Guaranty Agreement pursuant to which it has guaranteed the obligations of the Company under the Note Purchase Agreement and the Notes.
D.    The Company has notified the Noteholders that Events of Default are about to occur as a result of the Company’s inability to maintain (1) Consolidated Tangible Net Worth as required by Section 10.2 of the Note Purchase Agreement (the “Consolidated Tangible Net Worth Covenant”) and (2) the Consolidated Leverage Ratio as required by Section 10.3(a) of the Note Purchase Agreement (the “Consolidated Leverage Ratio Covenant”) during the Waiver Period (as hereinafter defined).
E.    The Company has requested that the Noteholders waive any testing of, or compliance by the Company with, the Consolidated Tangible Net Worth Covenant and the Consolidated Leverage Ratio Covenant solely during the Waiver Period.
F.    All requirements of law have been fully complied with and all other acts and things necessary to make this Waiver a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

2

Now, therefore, upon the full and complete satisfaction of the conditions precedent to the effectiveness of this Waiver set forth in Section 3.1 hereof, and in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:
SECTION 1.Temporary Waiver and Agreement.

1.1    Pursuant to Section 17.1 of the Note Purchase Agreement and subject to the terms and conditions of this Waiver, the Noteholders agree to waive any testing of, or compliance by the Company with, the Consolidated Tangible Net Worth Covenant and the Consolidated Leverage Ratio Covenant solely during the period beginning on October 1, 2013 and ending on the earliest to occur of (a) a default by the Company in the performance or compliance with Section 1.2 hereof, (b) the occurrence of any Event of Default, (c) (i) the occurrence of any “Event of Default” under and as defined in the Bank Credit Agreement or (ii) the waiver, amendment or other modification of any provision of the Bank Credit Agreement (other than pursuant to the Bank Credit Agreement Waiver (as hereinafter defined)) without which an Event of Default under the Bank Credit Agreement would occur and (d) March 3, 2014 (the “Waiver Period”).
Upon the expiration or termination of the Waiver Period, any Event of Default that would have occurred during the Waiver Period but for the temporary waiver set forth in this Section 1.1, shall be deemed no longer subject to an effective waiver to the same extent as if the waiver requested herein had never been in effect and the Noteholders reserve the right, in their discretion, to exercise any or all of their rights and remedies under the Note Purchase Agreement as a result of any such Event of Default.
The waivers set forth in this Waiver are limited to the extent specifically set forth above and shall in no way serve to waive (1) compliance with (i) the Consolidated Tangible Net Worth Covenant and the Consolidated Leverage Ratio Covenant for any other period or (ii) any other terms, covenants or provisions of the Note Purchase Agreement or any other Transaction Document, or any obligations of the Company or the Guarantors or (2) any Events of Default that may have previously occurred or that occur after the date hereof, other than as expressly set forth above.
1.2     As consideration for the temporary waiver set forth in Section 1.1, the Company agrees that it will not, at any time during the Waiver Period, (a) permit Consolidated Tangible Net Worth to be less than $640,000,000 or (b) permit the Consolidated Leverage Ratio to exceed 4.50 to 1.00.
The Company shall promptly upon availability, but in any event within five Business Days after any Noteholder requests, provide calculations to evidence compliance with the financial covenant requirements set forth in this Section 1.2.  Any failure to comply with the financial covenant requirements set forth in this Section 1.2 shall constitute an “Event of Default” under the Note Purchase Agreement.

3

SECTION 2.Representations and Warranties of the Company.
2.1    To induce the Noteholders to execute and deliver this Waiver (which representations shall survive the execution and delivery of this Waiver), the Company represents and warrants to the Noteholders that:
(a)this Waiver has been duly authorized by all necessary corporate action on the part of the Company, executed and delivered by the Company and this Waiver and the Note Purchase Agreement, as affected by this Waiver, constitute the legal, valid and binding obligations, contracts and agreements of the Company enforceable against it in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally;
(b)the execution and delivery of this Waiver by the Company and the performance hereof and of the Note Purchase Agreement, as affected by this Waiver, by the Company will not (1) violate (i) any provision of law, statute, rule or regulation or its certificate of incorporation or bylaws or other charter documents, (ii) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (iii) any provision of any indenture, agreement or other instrument to which it is a party or by which its properties or assets are or may be bound, or (2) result in a breach or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause (1)(iii) of this Section 2.1(b);
(c)no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution and delivery of this Waiver by the Company or the performance thereof or of the Note Purchase Agreement, as affected by this Waiver, by the Company;
(d)the Persons appearing as Guarantors on the signature pages to this Waiver constitute all Persons who are required to be Guarantors pursuant to the terms of the Note Purchase Agreement, including, without limitation, all Persons who became Subsidiaries or were otherwise required to become Guarantors after the First Amendment Effective Date, and each of such Persons has become and remains a party to the Guaranty Agreement as a Guarantor;
(e)all the representations and warranties contained in Section 2.1(i) of the First Amendment dated as of October 11, 2012 to the Note Purchase Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they were true and correct in all material respects as of such earlier date); and

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(f)after giving effect to this Waiver and the Bank Credit Agreement Waiver, no Default or Event of Default has occurred which is continuing; and no default or event of default under the Bank Credit Agreement exists, or would result from the effectiveness of this Waiver.

SECTION 3.Conditions to Effectiveness of this Waiver.
3.1    This Waiver shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:
(a)executed counterparts of this Waiver, duly executed by the Company and the Required Holders, shall have been delivered to the Noteholders;
(b)the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof;
(c)the Company shall have delivered to each Noteholder financial projections for the fiscal quarter ending December 31, 2013, which shall include a projected consolidated balance sheet and projected consolidated statements of income, stockholders’ equity and cash flow for such period, in each case prepared in a manner consistent with the financial statements previously delivered pursuant to Section 7.1(a) of the Note Purchase Agreement and the information (including detailed calculations) required to determine projected Consolidated Tangible Net Worth and the Consolidated Leverage Ratio as of December 31, 2013;
(d)the Company shall have delivered to each Noteholder evidence that the parties to the Bank Credit Agreement shall have duly executed and delivered an amendment and/or waiver to the same effect as this Waiver (the “Bank Credit Agreement Waiver”) which such amendment and/or waiver shall be in form and substance reasonably satisfactory to the Required Holders and which shall not contain any provisions or amendments which relate to any material affirmative or negative covenants or any events of default or remedies thereunder and the effect of which is to subject the Company or any of its Subsidiaries to any more onerous or more restrictive provisions;
(e)each Noteholder shall have received, by payment in immediately available funds to the account of such holder set forth in Schedule A to the Note Purchase Agreement or to such other account as such Noteholder shall have heretofore provided to the Company, the amount set forth opposite such Noteholder’s name in Schedule 1 attached hereto; and
(f)the Company shall have paid the fees and expenses of Schiff Hardin LLP, special counsel to the Noteholders, in connection with the negotiation, preparation, approval, execution and delivery of this Waiver.

5

SECTION 4.Reaffirmation of Guaranty Agreement.
4.1By their execution and delivery hereof, the undersigned Guarantors hereby acknowledge and agree to this Waiver and reaffirm the Guaranty Agreement dated as of December 12, 2007 given in favor of each Noteholder and their respective successors and assigns.
SECTION 5.Miscellaneous.
5.1This Waiver shall be construed in connection with and as part of the Note Purchase Agreement, and except as affected by this Waiver, all terms, conditions and covenants contained in the Note Purchase Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.
5.2Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Waiver may refer to the Note Purchase Agreement without making specific reference to this Waiver but nevertheless all such references shall include this Waiver unless the context otherwise requires.
5.3None of the terms or conditions of this Waiver may be changed, modified, waived or canceled orally or otherwise, except in writing and in accordance with Section 17.1 of the Note Purchase Agreement.
5.4The descriptive headings of the various Sections or parts of this Waiver are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.
5.5This Waiver shall be governed by and construed in accordance with the laws of the State of New York.
5.6The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Waiver may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.  
[Remainder of page intentionally left blank.]

6

	
		
	Granite Construction Incorporated

	 
	 

	By
	/s/ Laurel J. Krzeminski

	 
	Laurel J. Krzeminski

	 
	Its Sr. VP and CFO

	
		
	By
	/s/ Jigisha Desai   

	 
	Jigisha Desai 

	 
	Its VP Treasurer

	
		
	Granite Construction Company

	 
	 

	By
	/s/ Laurel J. Krzeminski

	 
	Laurel J. Krzeminski

	 
	Its Sr. VP and CFO

	
		
	By
	/s/ Jigisha Desai   

	 
	Jigisha Desai 

	 
	Its VP Treasurer

	
		
	GILC Incorporated

	 
	 

	By
	/s/ Laurel J. Krzeminski

	 
	Laurel J. Krzeminski

	 
	Its Sr. VP and CFO

	
		
	By
	/s/ Jigisha Desai   

	 
	Jigisha Desai 

	 
	Its VP Treasurer

	
		
	Granite Construction Northeast, Inc.

	 
	 

	By
	/s/ Laurel J. Krzeminski

	 
	Laurel J. Krzeminski

	 
	Its Sr. VP and CFO

	
		
	By
	/s/ Jigisha Desai   

	 
	Jigisha Desai 

	 
	Its VP Treasurer

	
		
	Intermountain Slurry Seal, Inc.

	 
	 

	By
	/s/ Kathleen Schreckengost

	 
	Kathleen Schreckengost

	 
	Its VP Treasurer

	
		
	By
	/s/ Darren S. Beevor

	 
	Darren S. Beevor

	 
	Its VP Controller

	
		
	Kenny Construction Company

	 
	 

	By
	/s/ Ashley M. Stinson

	 
	Ashley M. Stinson

	 
	Its VP

Accepted and Agreed to:

    	
			
	The Prudential Life Insurance Company
  of America

	 
	 
	 

	 
	By:
	/s/ David Levine

	 
	 
	Vice President

    	
			
	Prudential Retirement Insurance and Annuity
   Company

	 
	 
	 

	 
	By:
	Prudential Investment Management, Inc.,

	 
	 
	as investment manager

    	
		
	By:
	/s/ David Levine

	 
	Vice President

    	
			
	Universal Prudential Arizona Reinsurance
   Company

	 
	 
	 

	 
	By:
	Prudential Investment Management, Inc.,

	 
	 
	as investment manager

    	
		
	By:
	/s/ David Levine

	 
	Vice President

            	
			
	Zurich American Insurance Company

	 
	 
	 

	 
	By:
	Prudential Private Placement Investors, L.P.

	 
	 
	(as Investment Advisor)

    	
		
	By:
	Prudential Private Placement Investors, Inc.

	 
	(as its General Partner)

    	
		
	By:
	/s/ David Levine

	 
	Vice President

    	
			
	The Variable Annuity Insurance Company

	 
	 
	 

	 
	By:
	AIG Asset Management (U.S.), LLC

	 
	 
	Investment Advisor

    	
		
	By:
	/s/ David Patch

	Name:
	David Patch

	Title:
	Vice President

    	
			
	ING Life Insurance and Annuity Company

	ING USA Annuity and Life Insurance Company

	ReliaStar Life Insurance Company

	ReliaStar Life Insurance Company of New York

	Security Life of Denver Insurance Company

	 
	 
	 

	 
	By:
	ING Investment Management LLC,

	 
	 
	as Agent

    	
		
	By:
	/s/ Gregory R. Addicks

	 
	Gregory R. Addicks

	 
	Senior Vice President

    	
			
	The Guardian Life Insurance Company
  of America

	 
	 
	 

	 
	By:
	/s/ Edward J. Brennan 

	 
	Name:
	Edward J. Brennan 

	 
	Title:
	Senior Director

    	
			
	Principal Life Insurance Company

	 
	 
	 

	 
	By:
	Principal Global Investors, LLC,

	 
	 
	a Delaware limited liability company,

	 
	 
	its authorized signatory

    	
		
	By:
	/s/ Colin Pennycooke

	Its:
	Counsel

    	
		
	By:
	/s/ Adrienne L. McFarland

	Its:
	Counsel

    	
			
	United of Omaha Life Insurance Company

	 
	 
	 

	 
	By:
	/s/ Curtis R. Caldwell

	 
	Name:
	Curtis R. Caldwell

	 
	Title:
	Senior Vice President

    	
			
	Allianz Life Insurance Company of North 
   America

	 
	 
	 

	 
	By:
	/s/ Brian F. Landry

	 
	Name:
	Brian F. Landry

	 
	Title:
	Assistant Treasurer

    	
			
	American United Life Insurance Company

	 
	 
	 

	 
	By:
	/s/ Michael Bullock

	 
	Name:
	Michael Bullock

	 
	Title:
	VP, Private Placements

    	
			
	The State Life Insurance Company

	 
	 
	 

	 
	By:
	American United Life Insurance Company,

	 
	 
	its agent

    	
		
	By:
	/s/ Michael Bullock

	Name:
	Michael Bullock

	Title:
	VP, Private Placements

    	
			
	Farm Bureau Life Insurance Company 
   of Michigan

	 
	 
	 

	 
	By:
	American United Life Insurance Company,

	 
	 
	its agent

    	
		
	By:
	/s/ Michael Bullock

	Name:
	Michael Bullock

	Title:
	VP, Private Placements

    	
			
	American Family Life Insurance Company

	 
	 
	 

	 
	By:
	/s/ David Voge

	 
	Name:
	David Voge

	 
	Title:
	Senior Fixed Income Analyst

 	
			
	Assurity Life Insurance Company

	 
	 
	 

	 
	By:
	/s/ Joseph J. Mick

	 
	Name:
	Joseph J. Mick

	 
	Title:
	Senior Investment AnalystExhibit 4.1

 

CONFIDENTIAL TREATMENT REQUESTED BY FEISHANG ANTHRACITE RESOURCES LIMITED

 

DATED: [·], 2013

 

DEED OF NON-COMPETITION

 

BY

 

 FEISHANG GROUP LIMITED

 

LAITAN INVESTMENTS LIMITED

 

MR. LI FEILIE (李非列)

 

and

 

GUIZHOU FEISHANG ENERGY CO., LTD.

 

in favour of

 

FEISHANG ANTHRACITE RESOURCES LIMITED

 

 

CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
Definition And Interpretation
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
Non-Competition Undertakings
    	
3
    
	
 
    	
 
    	
 
    
	
3.
    	
Further Undertakings
    	
5
    
	
 
    	
 
    	
 
    
	
4.
    	
Invalidity
    	
5
    
	
 
    	
 
    	
 
    
	
5.
    	
Notices
    	
5
    
	
 
    	
 
    	
 
    
	
6.
    	
Counterparts
    	
7
    
	
 
    	
 
    	
 
    
	
7.
    	
Variations
    	
7
    
	
 
    	
 
    	
 
    
	
8.
    	
Governing Law And Jurisdiction
    	
8
    

 

2

 

THIS DEED is dated the [·] day of [·] 2013 and made

 

BY:

 

(1)                                 FEISHANG GROUP LIMITED, an exempted company incorporated in the British Virgin Islands on January 3, 1997 whose registered office is at TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands (“Feishang”);

 

(2)                                 LAITAN INVESTMENTS LIMITED, a BVI Business Company incorporated with limited liability under the laws of the British Virgin Islands with its registered office at P.O. Box 3444, Road Town, Tortola, British Virgin Islands (“Laitan”);

 

(3)                                 MR. LI FEILIE (李非列), holder of Macao ID card number 1372402 (6), whose residential address is at 18A, Huaxuge, Huafu, No.1 Xiangmihu, 1089 Xiangmei Road, Futian District, Shenzhen, Guangdong, the People’s Republic of China; and

 

(4)                                 GUIZHOU FEISHANG ENERGY CO. LTD., a company organized in the People’s Republic of China whose address is 25/F, B2 Building, Qilong Business Tower, Chengxin South Road, Guanshan Lake District, Guiyang City, Guizhou Province 550000, the People’s Republic of China (“Feishang Energy”).

 

IN FAVOUR OF:

 

(5)                                 FEISHANG ANTHRACITE RESOURCES LIMITED, a company incorporated in the British Virgin Islands with limited liability whose registered office is P.O. Box 173, Kingston Chambers, Road Town, Tortola, British Virgin Islands, for itself and as trustee for its Subsidiaries (the “Company”).

 

WHEREAS:

 

(A)                               The Company and its Subsidiaries (the “Group”) are principally engaged in the business of the acquisition and exploitation of anthracite coal mining rights (including the exploration, construction, development and operation of anthracite coal mines) located in Guizhou province in the PRC.

 

(B)                               Application has been made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Shares on the Main Board of the Stock Exchange (the “Proposed Listing”).

 

(C)                               Feishang, Laitan and Mr. Li Feilie are, and will at the Effective Date continue to be, the Controlling Shareholders (as defined in the Listing Rules, and in Clause 1.1 of this Deed) of the Company. Feishang Energy is, and will at the Effective Date continue to be, an Affiliate of Mr. Li Feilie and is designated as an enterprise qualified to participate in the consolidate of coal mines in Guizhou province (a “Qualified Consolidator”).

 

(D)                               The Controlling Shareholders, Feishang Energy and the Company have agreed to enter into this Deed to facilitate the Proposed Listing.

 

NOW THIS DEED WITNESSETH as follows:

 

1.                                      DEFINITION AND INTERPRETATION

 

1.1.                            In this Deed, the following expressions shall, unless the context otherwise requires,

 

1

 

have the following meanings:

 

	
“Affiliates”
    	
 
    	
has   the meaning ascribed to it in Clause 2.1.1 to this Deed;
    
	
 
    	
 
    	
 
    
	
“Business Day”
    	
 
    	
means   any day (other than a Saturday, Sunday or public holiday) on which banks in   Hong Kong are generally open for normal banking business;
    
	
 
    	
 
    	
 
    
	
“Business Opportunity”
    	
 
    	
means:   (i) in connection with any of the Relevant Business, any opportunity   (whether arising by invitation or pursuant to open bidding in response to a   “request for proposal” or otherwise) to participate in the development,   ownership (whether entire or partial), management or operations of, or   commercial returns from, such business which directly or indirectly competes   or may so compete with the Relevant Business, whether such participation is   direct or indirect and whether made by new commitment or by assumption of the   existing position of any other parties; and (ii)  any opportunity   (whether arising by invitation or pursuant to open bidding in response to a   “request for proposal” or otherwise) to participate in the acquisition or   consolidation of coal enterprises;
    
	
 
    	
 
    	
 
    
	
“Controlling Shareholders”
    	
 
    	
means   Feishang, Laitan and Mr. Li Feilie, and also has the meaning ascribed to   it under the Listing Rules;
    
	
 
    	
 
    	
 
    
	
“Effective Date”
    	
 
    	
means   the date of commencement of dealings in the Shares on the Main Board of the   Stock Exchange;
    
	
 
    	
 
    	
 
    
	
“Group”
    	
 
    	
means   the Company and its Subsidiaries from time to time;
    
	
 
    	
 
    	
 
    
	
“Hong Kong”
    	
 
    	
means the Hong Kong Special Administrative Region   of the PRC;
    
	
 
    	
 
    	
 
    
	
“Independent Directors”
    	
 
    	
means the independent non-executive directors of   the Company who are appointed in accordance with the Listing Rules;
    
	
 
    	
 
    	
 
    
	
“Listing Rules”
    	
 
    	
means the Rules Governing the Listing of   Securities on The Stock Exchange of Hong Kong Limited;
    
	
 
    	
 
    	
 
    
	
“Listing Committee”
    	
 
    	
has the meaning ascribed to it under the Listing   Rules;
    
	
 
    	
 
    	
 
    
	
“Non-Compete Period”
    	
 
    	
(i) in respect of the Controlling   Shareholders, is specific to each of the Controlling Shareholders, and means   the period commencing on the Effective Date and ending on the earlier of:

 

(a) the date on which the relevant Controlling   Shareholder and/or their Affiliates ceases to be a controlling shareholder of   the Company within the meaning of the Listing Rules;

 

(b) the date on which the Shares cease to be   listed on the Stock Exchange; and

 

(c) the date on which the Group ceases to engage   in the
    

 

2

 

	
 
    	
 
    	
Relevant Business; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii) in respect of Feishang Energy only,   means the period commencing on the Effective Date and ending on the date on   which Feishang Energy ceases to be a Qualified Consolidator;
    
	
 
    	
 
    	
 
    
	
“PRC”
    	
 
    	
means the People’s Republic of China (excluding,   for the purposes of this Deed, Hong Kong, the Macau Special Administrative   Region of the PRC and Taiwan);
    
	
 
    	
 
    	
 
    
	
“Relevant Business”
    	
 
    	
means the acquisition and exploitation of coal   mining rights (including the exploration, construction, development and   operation of coal mines) located in Guizhou province in the PRC;
    
	
 
    	
 
    	
 
    
	
“Restricted Activities”
    	
 
    	
shall have the meaning ascribed to it in Clause   2.1.1 to this Deed;
    
	
 
    	
 
    	
 
    
	
“Shares”
    	
 
    	
means shares in the capital of the Company or such   other equity securities of the Company or any successor thereto which may   exist after the date hereof;
    
	
 
    	
 
    	
 
    
	
“Stock Exchange”
    	
 
    	
means The Stock Exchange of Hong Kong Limited; and
    
	
 
    	
 
    	
 
    
	
“Subsidiary”
    	
 
    	
has the meaning ascribed to it under the Listing   Rules.
    

 

1.2.                            In this Deed where the context admits:

 

(a)                                 any reference to a “person” includes any individual, company, corporation, firm partnership, joint venture, association, organization or trust (in each case, whether or not having separate legal personality) and references to any of the same shall include a reference to the others;

 

(b)                                 references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time  to time and shall include references to any provisions of which they are re-enactments (whether with or without modification);

 

(c)                                  references to “this  Deed” or to any other agreement or document referred to in this Deed mean this deed or such other agreement or document as amended, varied, supplemented, modified or novated from time to time, and include the schedules; and

 

(d)                                 references to Clauses are references to clauses of this Deed.

 

1.3.                            The headings are inserted for convenience only and shall not affect the construction of this Deed.

 

2.                                      NON-COMPETITION UNDERTAKINGS

 

2.1.                            Each of the Controlling Shareholders and Feishang Energy hereby unconditionally and irrevocably undertakes to and for the benefit of the Group, except as specifically provided in this Deed, for the duration of their respective Non-Compete Periods:

 

3

 

2.1.1.                  not, and procure that their respective Subsidiaries or parties controlled by them either solely or jointly with another Controlling Shareholder or any other party (“Affiliates”) will not, either on their own account or in conjunction with or on behalf of any person, firm or company, directly or indirectly, be interested or engaged in or acquire or hold any right or interest (in each case whether as a shareholder, partner, agent or otherwise) in any business which directly or indirectly competes or may so compete with the Relevant Business (the “Restricted Activities”);

 

2.1.2.                  if any of them becomes aware of any Business Opportunity, notify the Group of such Business Opportunity forthwith. Such notification shall be in writing and shall include all relevant information and documents possessed by any of the Controlling Shareholders or Feishang Energy in respect of the Business Opportunity to enable the Group to evaluate the Business Opportunity; and

 

2.1.3.                  use its best endeavours to procure that such opportunities in Clause 2.1.2 are first offered to the Group on terms and conditions that are fair and reasonable.

 

2.2.                            Each of the Controlling Shareholders and Feishang Energy further unconditionally and irrevocably undertakes to grant to the Group, except as specifically provided in this Deed, for the duration of their respective Non-Compete Periods:

 

2.2.1.                  options to purchase on the basis of valuations conducted by an independent qualified valuer jointly appointed by the relevant Controlling Shareholder, Feishang Energy and the Group, subject to any relevant laws and applicable listing rules and existing third party pre-emptive rights:

 

2.2.1.1.        any interest in the relevant Controlling Shareholder’s or Feishang Energy’s business, including any  business of their respective Affiliates, which directly or indirectly competes or is likely to compete with the Relevant Business; and

 

2.2.1.2.        any interest in any business of a Controlling Shareholder, Feishang Energy or their respective Affiliates resulting from a Business Opportunity referred to in Clause 2.1.2 which has been offered to, but has not been purchased by the Group, and has been retained by a Controlling Shareholder, Feishang Energy or their respective Affiliates; and

 

2.2.2.                  pre-emptive rights to purchase on fair and reasonable terms any new or existing business of the Controlling Shareholders, Feishang Energy or any of their respective Affiliates that directly or indirectly competes, or may so compete with the Relevant Business, subject to any relevant laws and applicable listing rules and existing third party pre-emptive rights.

 

2.3.                            Notwithstanding the provisions of this Clause 2, each of the Controlling Shareholders, Feishang Energy and their respective Affiliates may, during their respective Non-Compete Periods:

 

2.3.1.                  hold, directly or indirectly, securities of any company listed on the Stock Exchange or other recognized stock exchange which is primarily engaged in any Restricted Activity provided that the interests of the relevant Controlling Shareholder and its Affiliates or Feishang Energy and its Affiliates, in each case, in such company  represents in aggregate not more than 5% of the total issued share capital of such company and that the relevant Controlling Shareholder and its

 

4

 

Affiliates or Feishang Energy and its Affiliates, in each case, individually or together, are not in control of the board of directors of such company; and/or

 

2.3.2.                  hold shares and other securities in the Group or in Feishang Energy; and/or

 

2.3.3.                  hold shares and other securities of any company listed on the Stock Exchange or other stock exchange whose primary business is not the Restricted Activity.

 

3.                                      FURTHER UNDERTAKINGS

 

Each of the Controlling Shareholders and Feishang Energy hereby further undertakes to the Company to provide an annual confirmation to confirm to the Company and its Independent Directors on their compliance and the compliance of their Affiliates (as relevant) with this Deed.

 

4.                                      INVALIDITY

 

4.1.                            While the restrictions contained in this Deed are considered reasonable in all circumstances, it is recognized that restrictions of the nature in question may fail for technical reasons unforeseen. Accordingly it is hereby agreed and declared that if any such restriction shall be adjudged to be void as going beyond what is reasonable in all the circumstances for the protection of the interests of the Group, but would be valid if part of the wording thereof were deleted, the said restrictions shall apply with such modifications as may be necessary to make it valid and effective.

 

4.2.                            Each of the Controlling Shareholders, Feishang Energy and their respective Affiliates hereby agrees that any failure by the Group to exercise or any delay by the Group in exercising any right, power of privilege under this Deed shall not in any way impair or affect the exercise thereof or operate as a waiver thereof in whole or in part.

 

4.3.                            Each party confirms that it has received independent legal advice relating to all the matters provided for in this Deed and agrees that the provisions of this Deed are fair and reasonable.

 

5.                                      REVIEW AND COMPLIANCE

 

5.1.                            Each party acknowledges that the other party and its Subsidiaries may be required by applicable laws and regulations and the Listing Rules to disclose, from time to time, in, among others, public announcements and/or annual reports, information on any Business Opportunity or any decision regarding pursuing or declining to pursue any Business Opportunity pursuant to this Deed and information on the compliance and enforcement of this Deed, and each party agrees to such disclosure to the extent necessary for the other party and its Subsidiaries to comply with such requirements during the relevant Non-Compete Period.

 

5.2.                            Each party undertakes that, during the relevant Non-Compete Period, it shall as soon as practicable upon request by the other party, provide to the other party all such information as may reasonably be requested by the other party for its review and enforcement of this Deed.

 

6.                                      NOTICES

 

6.1.                            Any notice (which term shall in Clause 6 include any other communication) required to be given under this Deed or in connection with the matters contemplated by it shall, except where otherwise specifically provided, be in writing.

 

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6.2.                            Any such notice shall be addressed as provided in Clause 6.3 below and may be:

 

6.2.1.                  personally delivered, in which case it shall be deemed to have been given upon delivery at the relevant address;

 

6.2.2.                  sent by pre-paid post within Hong Kong, in which case it shall be deemed to have been given two Business Days after the date of posting; or

 

6.2.3.                  sent by pre-paid air mail from or to any place outside Hong Kong, in which case it shall be deemed to have been given seven Business Days after the date of posting.

 

6.3.                            The address and other details of the parties referred to in this Deed are:

 

6.3.1.                  In the case of Feishang:

 

Address:  Room 2205, 22/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong

 

Fax No: +852 28106963

 

For the attention of:                                 Board of Directors

 

6.3.2.                  In the case of Laitan:

 

Address:  Room 2205, 22/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong

 

Fax No: +852 28106963

 

For the attention of: Board of Directors

 

6.3.3.                  In the case of Mr. Li Feilie:

 

Address:  18A, Huaxuge, Huafu, No.1 Xiangmihu, 1089 Xiangmei Road, Futian District, Shenzhen, Guangdong, the People’s Republic of China

 

Fax No: [·]

 

For the attention of:                                 Mr. Li Feilie

 

6.3.4.                  In the case of Feishang Energy:

 

Address:  25/F, B2 Building, Qilong Business Tower, Chengxin South Road, Guanshan Lake District, Guiyang City, Guizhou Province 550000, the People’s Republic of China

 

Fax No: [·]

 

For the attention of: Board of Directors

 

6.3.5.                  In the case of the Company:

 

Address:  Room 2205, 22/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong

 

Fax No: +852 28106963

 

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For the attention of:                                 Board of Directors

 

6.4.                            Any party to this Deed may notify the other party of any change to the address or any of the other details specified in Clause 6.3, provided that such notification shall only be effective on the date specified in such notice or five Business Days after the notice is given, whichever is later.

 

7.                                      COUNTERPARTS

 

This Deed may be executed in any number of counterparts, and by each party on separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument. Delivery of a counterpart of this Deed by e-mail attachment or telecopy shall be an effective mode of delivery.

 

8.                                      FURTHER ASSURANCES

 

Each party shall perform (or procure the performance of) all further acts and things and execute and deliver (or procure the execution and delivery of) such further documents as may be required by law or as may be necessary or reasonably required for the purpose of giving the other parties the full benefit of the provisions of this Deed.

 

9.                                      WHOLE AGREEMENT

 

This Deed sets out the whole agreement between the parties in respect of the subject matter hereof and supersedes any prior agreement (whether oral or written) relating to the same.  It is agreed that no party shall have any claim in respect of any agreement or arrangement so superseded.

 

10.                               ASSIGNMENT

 

Unless the other parties agree in writing, no party shall assign all or any of its rights under this Deed.

 

11.                               TIME OF THE ESSENCE

 

Time shall be of the essence of this Deed both as regards any dates and periods mentioned and as regards any dates and periods which may be substituted for them in accordance with this Deed or by agreement in writing among the parties.

 

12.                               WAIVERS, RIGHTS AND REMEDIES

 

No failure or delay by any party in exercising any right or remedy provided by law or under this Deed shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any further exercise of it or the exercise of any other remedy.

 

13.                               VARIATIONS

 

No amendment of this Deed shall be valid unless it is in writing and duly executed by or on behalf of all of the parties to it.

 

14.                               CONFIDENTIALITY

 

14.1.                     Subject to Clause 14.2, each party shall keep as strictly confidential and not disclose or use any information received or obtained by it as a result of entering into this Deed and any information relating to the provisions and subject matter of, and negotiations leading to, this Deed.

 

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14.2.                     Clause 14.1 shall not prevent the disclosure or use by a party to the extent that it can demonstrate that:

 

(a)                                 the disclosure or use is required by law, any regulatory or governmental body (including any tax authority) or the rules and regulations of any internationally recognised stock exchange (including, but not limited to, disclosure of the terms of this Deed in any prospectus or offering document prepared by a party in connection with its listing on any internationally recognised stock exchange);

 

(b)                                 the disclosure or use is required for the purpose of any judicial proceedings arising out of this Deed;

 

(c)                                  the disclosure is made to professional advisers of the disclosing party on terms that such professional advisers undertake to comply with the provisions of Clause 14.1 in respect of such information as if they were a party to this Deed;

 

(d)                                 the disclosure is of information which has previously become publicly available other than by a breach of this Deed;

 

(e)                                  the other party has given its prior written consent to the disclosure or use; or

 

(f)                                   the disclosure is made pursuant to Clause 5.1.

 

15.                               COSTS

 

Except as otherwise provided in this Deed, each party shall be responsible for its own costs, charges and other expenses incurred in connection with the preparation, negotiation, entry into and performance of this Deed.

 

16.                               GOVERNING  LAW AND JURISDICTION

 

16.1.                     This Deed shall be governed by, and construed in accordance with, the laws of Hong Kong.

 

16.2.                     Each party to this Deed irrevocably submits to the non-exclusive jurisdiction of the courts of Hong Kong and waives any objections to proceedings in such courts on the grounds of venue or on the grounds that the proceedings have been brought in an inconvenient forum.

 

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IN WITNESS WHEREOF this Deed has been duly executed by the parties and is intended to be and is hereby delivered on the date first above written.

 

 

	
SIGNED   SEALED AND DELIVERED
    	
)
    	
 
    
	
by
    	
)
    	
 
    
	
the   duly appointed lawful attorney(s) of
    	
)
    	
 
    	
[seal and signature]
    
	
FEISHANG   GROUP LIMITED,
    	
)
    	
 
    	
 
    
	
Whose   signature(s) is/are verified by:
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Solicitor, Hong Kong SAR
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED   SEALED AND DELIVERED
    	
)
    	
 
    	
 
    
	
by
    	
)
    	
 
    	
 
    
	
the   duly appointed lawful attorney(s) of 
    	
)
    	
 
    	
[seal and signature]
    
	
LAITAN   INVESTMENTS LIMITED,
    	
)
    	
 
    	
 
    
	
Whose   signature(s) is/are verified by:
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Solicitor, Hong Kong SAR
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED,   SEALED
    	
)
    	
 
    	
 
    
	
and   DELIVERED by LI FEILIE
    	
)
    	
[Signature and seal of Li Feilie]
    
	
in   the presence of:
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name,   address and signature of witness[es] —
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    

 

 

	
SIGNED   SEALED AND DELIVERED
    	
)
    	
 
    	
 
    
	
by
    	
)
    	
 
    	
 
    
	
the   duly appointed lawful attorney(s) of
    	
)
    	
 
    	
[seal and signature]
    
	
GUIZHOU   FEISHANG ENERGY CO.
    	
)
    	
 
    	
 
    
	
LTD.
    	
)
    	
 
    	
 
    
	
Whose   signature(s) is/are verified by:
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Solicitor, Hong Kong SAR
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED   SEALED AND DELIVERED
    	
)
    	
 
    	
 
    
	
by
    	
)
    	
 
    	
 
    
	
the   duly appointed lawful attorney(s) of
    	
)
    	
 
    	
[seal and signature]
    
	
FEISHANG ANTHRACITE
    	
)
    	
 
    	
 
    
	
RESOURCES LIMITED,
    	
)
    	
 
    	
 
    
	
Whose   signature(s) is/are verified by:
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Solicitor, Hong Kong SAR

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