Australia Kunqian International Energy provides a $73.8 million AUD loan to U&D Coal for debt repayment and working capital purposes

Project narrative

In October 2012, U&D Mining Industry (Australia) Pty Ltd — then a joint venture wholly owned by U&D Coal Limited, an Australia-based coal explorer and producer which was jointly owned by Brisbane, Australia-based Australia New Agribusiness & Chemical Group Ltd (New Agri Group) (formerly Daton Group) (49%) and Australia Kunqian International Energy Co., Pty Ltd, a wholly owned subsidiary of Chinese state-owned China Yima Coal Group, (51%) — entered into a scheme implementation agreement (SIA) with Endocoal Limited, an Australia-based coal exploration and development company, to acquire all of its ordinary shares for a consideration of $71 million AUD ($73.6 million USD), or $0.38 AUD ($0.39 USD) per Endocoal share. The acquisition was expected to be completed in March 2013. On or about May 23, 2013, the Sydney Branch of China Construction Bank Corporation (CCB) entered into a $70 million AUD facility (loan) agreement with U&D Mining Industry (Australia) Pty Ltd to support U&D's acquisition of Endocoal Limited. This facility carried a maturity period of one year and a final maturity date of May 28, 2014. This facility carried an interest rate of the 3-month BBSY rate plus a 0.9% margin. This loan is captured by Record ID#93535. New Agri Group pledge its equity ownership in U&D as a guarantee for the CCB loan. Additionally, this facility was secured by (i.e. collateralized against) a $35,700,000 AUD cash deposit with CCB made by Australia Kunqian International Energy Co., Pty Ltd and security over the whole of the undertaking, property (including real property), and the assets of U&D in favor of CCB. U&D also provided a negative pledge to not subsist any security interest over any assets, not sell, transfer, or dispose assets which may be leased to or reacquired by U&D or on any of U&D's receivables on recourse terms, no entry into any title retention arrangement, and no entry into any arrangement under which money or the benefit of a bank or other account may be applied, set-off, or made subject to a combination of accounts or not repayable in certain circumstances. This facility carried a $70,000 AUD establishment fee payable the day the cash advance was made by CCB to U&D; U&D only could drawdown the facility in one advance within 60 days from the date of facility agreement, else it would be required to pay $70,000 AUD to CCB. There was no re-borrowing under any of the facility. The payment of interest was on the cash advance on the last business day of each month period. Furthermore, as a condition of the debt facility, U&D agreed to list itself on the Australian Securities Exchange (ASX), with the Initial Public Offering (IPO) intended to repay the bank loan; should it have failed to do so, New Agri Group and Kunqian committed to repaying the loan. The acquisition was completed on May 7, 2013. With the acquisition, U&D came to control coal deposits of 51.4 Mt at EPC 1517 Orion Downs, 447.1 Mt on the Rockwood project at EPCs 1514, and in the in-development Meteor Downs South Project. In July 2013, New Agri Group entered into a pair of Share Sale Agreements with China Kunlun International Holding Limited and Golden Globe Energy Limited, two British Virgin Islands registered investment companies, to dispose its 49% stake in U&D to Kunlun (25%) and Golden Globe (24%). When the share sale was finalized, Kunlun and Golden Globe became guarantors of the CCB loan while New Agri Group ceased to be one. Under the Tripartite Deed between CCB, U&D, Kunqian, Kunlun, and Golden Globe, Kunqian provided a guarantee for 51% of U&D's obligations by way of agreeing to set off its guarantee obligation against a $35,700,000 AUD cash deposit made it. Kunlun and Golden Globe jointly agreed to guarantee 49% of U&D's obligations, and would jointly indemnity CCB if U&D failed to pay all the money it owed or perform its obligation on time, if U&D, Kunlun, or Golden Globe went insolvent or became incapable, and if the money owned it not recoverable from or not enforceable against U&D. If Kunlun and Golden Globe were unable to satisfy their guarantees, Kunqian guaranteed the performance of their joint guarantee, and would set off and apply all or part of the credit balance of its cash deposit against Kunlun and Golden Globe's obligations, if either were in default. Then, on November 15, 2013, CCB and U&D entered into an amendment agreement on the facility; as part of this amendment, the maturity period was extended by two years, with the final maturity date shifting from May 28, 2014 to May 28, 2016. Most other terms, including the interest rate, remained on the same terms as originally negotiated. This extension is captured by Record ID#93539. Then, on May 30, 2016, Australia Kunqian International Energy Co., Pty Ltd entered into a $73.8 million AUD loan facility agreement with U&D Coal Limited to fully repay the CCB loan and for other working capital purposes. This loan carried a final maturity date of July 1, 2017 and an interest rate of the 3-month BBSY rate plus a margin of 10.0%. This loan is captured by Record ID#93540. Then, on July 26, 2017, Kunqian and U&D entered into an agreement to extend the final maturity dates of the $73.8 million AUD loan, as well as a $20.0 million AUD loan used to repay the CCB loan, to August 1, 2018. The extension of the $73.8 million AUD loan (extending the maturity to two years from one year) from Kunqian is captured by Record ID#93541. The extension of the $20 million AUD loan (extending the maturity to four years from three years) is captured by Record ID#93558. Then, in October 2017, Kunqian entered into another amendment agreement with U&D, this time extending the maturity date of the $73.8 million AUD loan,, as well as a $20.0 million AUD loan and a $8.0 million AUD loan (as captured by Record ID#93562), to December 31, 2018. The extension of the $73.8 million AUD loan (extending the maturity to 2.5 years from two years) from Kunqian is captured by Record ID#93542. The extension of the $20 million AUD loan (extending the maturity to 4.33 years from four years) is captured by Record ID#93559. The extension of the $8.0 million AUD loan (extending the maturity to 3.5 years from three years) is captured by Record ID#93563. Then, in January 2020, Kunqian entered into another amendment agreement with U&D; in this agreement, it extended the maturity date of $73.8 million AUD loan, as well as a $20.0 million AUD loan, a $8.0 million AUD loan, a RMB 15.6 million loan (as captured by Record ID#93576), and a RMB 62.4 million loan (as captured by Record ID#93579), to June 30, 2021. The extension of the $73.8 million AUD loan (extending the maturity to 5 years from 2.5 years) from Kunqian is captured by Record ID#93543. The extension of the $20 million AUD (extending the maturity to 6.83 years from 4.33 years) loan is captured by Record ID#93560. The extension of the $8.0 million AUD loan (extending the maturity to six years from 3.5 years) is captured by Record ID#93564. The extension of the RMB 15.6 million loan (extending the maturity to four years from three years) is captured by Record ID#93577. The extension of the RMB 62.4 million loan (extending the maturity to 3.667 years from two years) is captured by Record ID#93580. Then, in June 2020, Kunqian entered into another amendment agreement with U&D; in this agreement, it extended the maturity date of the $73.8 million AUD loan, as well as the $20.0 million AUD, the $8.0 million AUD loan, the RMB 15.6 million loan, and the RMB 62.4 million loan, to July 31, 2021 (an extension of one month). The extension of the $73.8 million AUD loan (extending the maturity to 5.083 years from five years) from Kunqian is captured by Record ID#93544. The extension of the $20 million AUD loan (extending the maturity to 6.913 years from 6.83 years) is captured by Record ID#93561. The extension of the $8.0 million AUD loan (extending the maturity to 6.083 years from six years) is captured by Record ID#93566. The extension of the RMB 15.6 million loan (extending the maturity to 4.083 years from four years) is captured by Record ID#93578. The extension of the RMB 62.4 million loan (extending the maturity to 3.75 years from 3.667 years) is captured by Record ID#93581.