Microsoft Word - E_307_Project Maple announcement_20150105

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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(Incorporated in Bermuda with limited liability)

(Stock Code: 307)

SATISFACTION OF CERTAIN CONDITIONS BY

THE DECEMBER LONGSTOP DATE OF THE WINSWAY SPA

Reference is made to the announcements of Up Energy Development Group Limited (the "Company") dated 8 December 2014, 9 December 2014 and 30 December 2014 in relation to the very substantial acquisition of GCC and GCC LP and the extension of the December Longstop Date (the "Announcement"). Capitalised terms used herein shall have the same meanings as those defined in the Announcement unless defined otherwise.
SATISFACTION OF CERTAIN CONDITIONS BY THE DECEMBER LONGSTOP DATE
Conditions (14), (15) and (18) of the Winsway SPA as set out under the paragraph headed Conditions Precedent on the Announcement dated 8 December 2014 have been satisfied by the December Longstop Date. A summary of the principal term of the New Partnership Agreement, New Shareholders' Agreement and Marketing Agency Agreement are set out below.
NEW PARTNERSHIP AGREEMENT
On 31 December 2014, GCC, the Winsway Seller and the Company agreed on the terms of the New Partnership Agreement in relation to GCC LP setting out their respective rights and obligations for the purpose of carrying on, among other things, the business and activities of owning and operating a coal mining and development business, including related marketing and sales activities, and any business which is ancillary, incidental or directly or indirectly related thereto.

* for identification purpose only

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The New Partnership Agreement shall replace the original limited partnership agreement upon Completion. The parties to the original limited partnership agreement will enter into a letter agreement to confirm that Marubeni Seller should no longer be a party to the original limited partnership agreement, and the current partners, being the Company and the Winsway Seller, will confirm that GCC LP established pursuant to the original limited partnership agreement as amended and restated and to further amend and restate the original limited partnership agreement on the terms and conditions set out in the agreed form of the New Partnership Agreement.
NEW SHAREHOLDERS' AGREEMENT
On 31 December 2014, the Winsway Seller and the company, among others, have agreed the terms of the New Shareholders' Agreement setting out their respective rights and obligations in relation to GCC, which as the general partner of GCC LP, is responsible for the operations of GCC LP. The New Shareholders' Agreement shall replace the Shareholder Agreement and will regulate the affairs of GCC upon and subject to the Completion, including certain key matters relating to GCC. The principal terms of the New Shareholders' Agreement are set out below:
Commencement
The New Shareholders' Agreement shall take effect on or before the Completion.
Composition of the board of GCC
GCC shall have a board of directors consisting of seven (7) directors, unless otherwise agreed by the shareholders of GCC and changed in accordance with the Act. The chairman of the board of directors shall be elected by a simple majority of the board of directors.
Management Committee
The shareholders of GCC shall act collectively through the management committee (the "Management Committee"). Decisions or actions taken by the Management Committee in accordance with the provisions of the New Shareholders' Agreement shall constitute decisions or actions by GCC and its shareholders and shall be binding on each shareholder, director, officer and employee of GCC. The Management Committee will be comprised of a number of representatives appointed by the shareholders of GCC (the "Representative") that is equal to the number of directors from time to time permitted under the articles of association of GCC. The Company and its subsidiaries (the "Group") shall, in the

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aggregate, be entitled to appoint:
(a) for so long as the Group holds not less than 50.1% of the outstanding common shares of GCC, six (6) Representative when the Winsway Seller holds not less than
15% of the outstanding common shares of GCC; and
(b) for so long as the Group holds not less than 50.1% of the outstanding common shares of GCC, five (5) Representatives when the Winsway Seller holds not less than 30% of the outstanding common shares of GCC.
Quorum for meetings of the Management Committee
The necessary quorum for a meeting of the Management Committee shall consist of two (2) Representatives of the Group and one (1) Representative from the Winsway Seller, provided that, in the event the Group holds less than 50.1% of the outstanding common shares, the quorum shall be one (1) Representative for each of the shareholders of GCC.
Quorum for meetings of the shareholders of GCC
The necessary quorum for a meeting of the shareholders of GCC shall be established in the same manner as set out above for Management Committee meetings.
Restriction on transfer
No shareholder of GCC may transfer its shareholding interest in whole or in part unless permitted under the New Shareholders' Agreement, and no shareholder may transfer less than its entire shareholding interest. If a shareholder of GCC wishes to transfer its shareholding interest, it shall first give the other shareholders a right of first refusal to purchase such shares. Subject to the terms and conditions of the New Shareholders' Agreement, a shareholder may only transfer all of its shareholding interest to a wholly-owned affiliate.
Termination of the New Shareholders' Agreement
The New Shareholders' Agreement shall continue in full force and effect until (i) it is terminated by unanimous shareholder approval; (ii) the business of the GCC LP is sold or completely decommissioned; or (iii) the winding up or dissolution of GCC.

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MARKETING AGENCY AGREEMENT
On 31 December 2014, the Winsway Seller, the Company and GCC also agreed on the terms of the marketing agency agreement to be entered into on or before Completion, pursuant to which GCC shall grant certain marketing rights to the Winsway Seller in relation to the products of GCC for the PRC for a term of 10 years from the Completion Date subject to extension by agreement.
Appointment of agent and marketing rights
GCC shall appoint the Winsway Seller or any of its subsidiaries as the exclusive marketing agent (the "Marketing Agent") in China (excluding Taiwan) to promote and sell its products to buyers in China (excluding Taiwan), and the Marketing Agent agrees to act in that capacity, subject to the terms of the Marketing Agency Agreement.
Minimum purchases and price
The Winsway Seller will commit to undertake 40% of GCC's annual production of coal products, and such commitment shall be confirmed by coal sale agreements to be entered into between the Winsway Seller and GCC. The parties to the Marketing Agency Agreement shall discuss in good faith and agree before the beginning of each quarter of each calendar year, the delivery of the next quarterly quantity and the applicable coal price for each customer, with the parties acknowledging that the price may differ, depending on the relevant customer.
Fees
GCC shall pay the Winsway Seller fees for all of the GCC coal products sold through the Winsway Seller or any of its subsidiaries during the term of the Marketing Agency Agreement based on the different price of GCC coal products fixed in accordance with the terms and conditions set out in the Marketing Agency Agreement.
The relevant fees should be payable by GCC in U.S. Dollars and shall be fully paid to the Winsway Seller in accordance with banking instructions to be provided by the Winsway Seller not less than five (5) days prior to the last payment date of the relevant fees in accordance with the Marketing Agency Agreement.

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By Order of the Board
Up Energy Development Group Limited
Qin Jun
Chairman
Hong Kong, 2 January 2014
As of the date of this announcement, the executive Directors of the Company are Mr. Qin Jun, Mr. Jiang Hongwen and Mr. Wang Chuan whilst the independent non-executive Directors of the Company are Mr. Chau Shing Yim, David, Mr. Li Bao Guo, Mr. Lien Jown Jing, Vincent and Dr. Shen Shiao-Ming.

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