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acting under the authority of the Imperial Chinese Government, of the one part, and the Hong Kong and Shanghae Banking Corporation (hereinafter called "the said bank"), for themselves and on behalf of the firm of Jardine, Matheson, and Co., representing as joint agents the Corporation, of the other part, the said loan was issued on behalf of the Director-General aforesaid by the Corporation.
3. By the provisions of the Loan Agreement the proceeds of the loan were to be paid over in London to the order of the Director-General, and were to be applied (amongst other purposes) to the construction of the said railways mentioned in the said bonds as being then partly constructed or in course of construction or about to be constructed, including the said branch line from Nu-erh-ho to the collieries of Nanpiao.
4. The said railways mentioned in the said bonds as being then partly constructed or in course of construction or about to be constructed (except the said branch line from Nu-erh-ho to Nanpiao) have now been constructed and opened for traffic, and it is contended by the Director-General that the several purposes for which the proceeds of the said loan were applicable under the Loan Agreement, except the construction of the said branch line to Nanpiao, have been fulfilled.
5. In accordance with the provisions of the said bonds and of the Loan Agreement, bonds to the aggregate amount of 57,500l., were drawn and paid off in each of the years 1905, 1906, and 1907 (except certain drawn bonds which have not yet been presented for payment), with the result that the outstanding bonds of the said loan do not in the aggregate exceed the sum of 2,127,500l.
6. All interest which has accrued due under the bonds of the said loan up to the date of this Agreement has been duly paid.
7. At the time of the issue of the said loan it was believed that good coal could be obtained from Nanpiao for general purposes, and in particular for the purposes of working the said railways mentioned in the said bonds. The Imperial Chinese Government have now ascertained that the coal at Nanpiao is generally of an inferior quality, and in particular is of little use for locomotive purposes, and consequently the Director-General refuses to proceed with the construction of the said branch line to Nanpiao.
8. The estimated cost of the branch line from Nu-erh-ho to Nanpiao was 150,000l., which estimate is more than covered by the remainder of the capital of the loan so far unexpended and lying in the Hong Kong and Shanghai Bank in London to the credit of the Imperial Railways of North China.
9. Under the circumstances, the Corporation are satisfied that it will be generally for the benefit of the security of the said bonds that such arrangement shall be effected (subject to the sanction of the High Court in England) as is hereinafter expressed.
Now it is hereby agreed as follows:—
1. The Director-General and the Imperial Chinese Government shall be free and discharged from any obligation either under the said bonds or under the Loan Agreement to construct the branch line from Nu-erh-ho to Nanpiao, or any part thereof.
2. No part of the unexpended loan funds shall be reserved for the construction of the branch line from Nu-erh-ho to Nanpiao, but all of the said unexpended loan funds, so far as they are not already applicable by the Imperial Railways of North China to reimbursement for work of construction, improvement, and equipment already performed by the latter, shall be disposed of under the terms of the original Loan Agreement of 1898, that is to say, in the further construction of extensions or improvement of existing lines or railway equipment under the terms of the said Loan Agreement other than the construction and equipment of the said branch line from Nu-erh-ho to Nanpiao.
3. Each of the said bonds remaining outstanding is hereby declared to be entitled to a first charge upon the permanent way, rolling stock, and entire property, with the freight and earnings, of the railway already constructed from Peking to Tungchow, and also of all railways and railway equipment the construction or purchase of which, or of any part of which, shall be paid for out of the said funds standing to the credit of the Imperial Railways of North China as aforesaid, and so that all the agreements and provisions of the said bonds and of the Loan Agreement for the security of the said bonds or the benefit of the bondholders shall, so far as may be, apply in respect of the said railways and property of every kind included in this present charge in like manner as if such railways and property had been originally included in the security of the said bonds.
4. The Director-General will execute, and do or cause to be executed and done, all (if any) instruments, acts, and things which, according to the law of China, may be necessary or proper to effectuate this Agreement and the charge herein contained.
5. All the costs, charges, and expenses of the Corporation of and incidental to the negotiations for and the preparation and execution of this Agreement, and of and incidental to the carrying the same into effect, including the costs, charges, and expenses of all parties of and incidental to the proceedings to be taken under the next following clause, shall be paid out of the said funds at the said bank.
6. Proceedings shall forthwith be commenced in the High Court of Justice in England for obtaining the sanction of the said Court to this Agreement on behalf of the holders of the said bonds.
7. This Agreement is to be sealed with the official seal of the Chinese Minister in London, in testimony of the authority of the Director-General to execute and effectuate this Agreement.
In witness whereof the contracting parties have signed this Agreement this 23rd day of the 2nd month of the 34th year of Kuang Hsü, corresponding to the 25th day of March, 1908.
Sir,
(Signed) LIANG, Director-General,
For the British and Chinese Corporation (Limited),
(Signed) J. O. P. BLAND.
Inclosure 2 in No. 1.
British and Chinese Corporation to Liang Shih Yi.
Peking, March 24, 1908.
WITH reference to the form of agreement for the release of Northern Railway loan funds, handed to me by your Excellency on the 21st instant, I have the honour to state that, in conformity with your request, I have made, and now inclose, four copies of this document, which I have signed as representative of the British and Chinese Corporation, and which I would ask your Excellency to sign, seal, and return to me at your earliest convenience. Upon receipt of the document thus completed, I will forward it to London and request the Corporation to take immediate steps for commencement of the necessary formal proceedings in the High Court.
I take this opportunity of placing on record the statement which I made to your Excellency in conversation yesterday, that it is the earnest desire of the Corporation to facilitate and expedite to the utmost the release of these loan funds for the purposes of the Chinese Government. At the same time, the Corporation having submitted a draft Agreement in the form which legal opinion in London considers most suitable for the attainment of the desired end, and that draft having been modified in certain particulars by your Excellency's instructions, the Corporation cannot be held responsible for any delay or expenses that may result in the event of the High Court's expressing its inability to release the loan funds on this document.
I will forward a copy of the Agreement to His Majesty's Minister, together with a request that, in accordance with the verbal understanding come to between his Excellency and the Managing Director of the Railway (Mr. Chow) on the 19th December last, he may be good enough to lay the facts before the British Foreign Office and recommend that representations be made, if possible, to the High Court in the sense that, while the peculiar nature of the case may render strict compliance with the formalities of British law a matter of difficulty, the proposed release of the loan funds is highly desirable in the interests of both the Chinese Government and the bondholders.
I have, &c.
(Signed) J. O. P. BLAND.
513
F
2
acting under the authority of the Imperial Chinese Government, of the one part, and the Hong Kong and Shanghae Banking Corporation (hereinafter called "the said bank"), for themselves and on behalf of the firm of Jardine, Matheson, and Co., representing as joint agents the Corporation, of the other part, the said loan was issued on behalf of the Director-General aforesaid by the Corporation.
3. By the provisions of the Loan Agreement the proceeds of the loan were to be paid over in London to the order of the Director-General, and were to be applied (amongst other purposes) to the construction of the said railways mentioned in the said bonds as being then partly constructed or in course of construction or about to be constructed, including the said branch line from Nu-erh-ho to the collieries of Nanpiao.
4. The said railways mentioned in the said bonds as being then partly constructed or in course of construction or about to be constructed (except the said branch line from Nu-erh-ho to Nanpiao) have now been constructed and opened for traffic, and it is contended by the Director-General that the several purposes for which the proceeds of the said loan were applicable under the Loan Agreement, except the construction of the said branch line to Nanpiao, have been fulfilled.
5. In accordance with the provisions of the said bonds and of the Loan Agreement, bonds to the aggregate amount of 57,5001, were drawn and paid off in each of the years 1905, 1906, and 1907 (except certain drawn bonds which have not yet been presented for payment), with the result that the outstanding bonds of the said loan do not in the aggregate exceed the sum of 2,127,5001
6. All interest which has acerned due under the bonds of the said loan up to the date of this Agreement has been duly paid.
7. At the time of the issue of the said loan it was believed that good coal could be obtained from Nanpiao for general purposes, and in particular for the purposes of working the said railways mentioned in the said bonds. The Imperial Chinese Govern- ment have now ascertained that the coal at Nanpiao is generally of an inferior quality, and in particular is of little use for locomotive purposes, and consequently the Director- General refuses to proceed with the construction of the said branch line to Nanpiao.
8. The estimated cost of the branch line from Nu-erh-ho to Nanpiao was 150,000l., which estimate is more than covered by the remainder of the capital of the loan so far unexpended and lying in the Hong Kong and Shanghe Bank in London to the credit of the Imperial Railways of North China.
9. Under the circumstances, the Corporation are satisfied that it will be generally for the benefit of the security of the said bouds that such arrangement shall be effected (subject to the sanction of the High Court in England) as is hereinafter expressed.
Now it is hereby agreed as follows :---
1. The Director-General and the Imperial Chinese Government shall be free and discharged from any obligation either under the said bonds or under the Loan Agree- ment to construct the branch line from Nu-erh-ho to Naupias or any part thereof.
2. No part of the unexpended loan funds shall be reserved for the construction of the branch line from Nu-erh-ho to Nanpiao, but all of the said unexpended loan funds, so far as they are not already applicable by the Imperial Railways of North China to reimbursement for work of construction, improvement, and equipment already per- formed by the latter, shall be disposed of under the terms of the original Loan Agree- ment of 1898, that is to say, in the further construction of extensions or improvement of existing lines or railway equipment under the terms of the said Loan Agreement other than the construction and equipment of the said branch line from Nu-erh-ho to Nanpiao.
3. Each of the said bonds remaining outstanding is hereby declared to be entitled to a first charge upon the permanent way, rolling stock, and entire property, with the freight and earnings, of the railway already constructed from Peking to Tungehow, and also of all railways and railway equipment the construction or purchase of which, or of any part of which, shall be paid for out of the said funds standing to the credit of the Imperial Railways of North China as aforesaid, and so that all the agreements and provisions of the said bonds and of the Loan Agreement for the security of the said bonds or the benefit of the bondholders shall, so far as may be, apply in respect of the said railways and property of every kind included in this present charge in like manner as if such railways and property had been originally included in the security of the said bonds.
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4. The Director-General will execute, and do or cause to be executed and done, all (if any) instruments, acts, and things which, according to the law of China, may be necessary or proper to effectuate this Agreement and the charge herein contained,
5. All the costs, charges, and expenses of the Corporation of and incidental to the negotiations for and the preparation and execution of this Agreement, and of and incidental to the carrying the same into effect, including the costs, charges, and expenses of all parties of and incidental to the proceedings to be taken under the next following clause, shall be paid out of the said funds at the said bank.
6. Proceedings shall forthwith be commenced in the High Court of Justice in England for obtaining the sanction of the said Court to this Agreement on behalf of the holders of the said bonds.
7. This Agreement is to be sealed with the official seal of the Chinese Minister in London, in testimony of the authority of the Director-General to execute and effectuate this Agreement.
In witness whereof the contracting parties have signed this Agreement this 23rd day of the 2nd month of the 34th year of Kuang Hsü, corresponding to the 25th day of March, 1908.
Sir,
(Signed) LIANG, Director-General, For the British and Chinese Corporation
(Limited),
(Signed) J. O. P. BLAND.
Inclosure 2 in No. 1.
British and Chinese Corporation to Liang Shih Yi.
Peking, March 24, 1908. WITH reference to the form of agreement for the release of Northern Railway loan funds, handed to me by your Excellency on the 21st instant, I have the honour to state that, in conformity with your request, I have made, and now inclose, four copies of this document, which I have signed as representative of the British and Chinese Corporation, and which I would ask your Excellency to sign, seal, and return to me at your earliest convenience. Upon receipt of the document thus completed, I will forward it to London and request the Corporation to take immediate steps for commencement of the necessary formal proceedings in the High Court.
I take this opportunity of placing on record the statement which I made to your Excellency in conversation yesterday, that it is the earnest desire of the Corporation to facilitate and expedite to the utmost the release of these loan funds for the purposes of the Chinese Government. At the same time, the Corporation having submitted a draft Agreement in the form which legal opinion in London considers most suitable for the attainment of the desired end, and that draft having been modified in certain particulars by your Excellency's instructions, the Corporation cannot be held responsible for any delay or expenses that may result in the event of the High Court's expressing its inability to release the loan funds on this document.
I will forward a copy of the Agreement to His Majesty's Minister, together with a request that, in accordance with the verbal understanding come to between his Excellency and the Managing Director of the Railway (Mr. Chow) on the 19th December last, he may be good enough to lay the facts before the British Foreign Office and recommend that representations be made, if possible, to the High Court in the sense that, while the peculiar nature of the case may render strict compliance with the formalities of British law a matter of difficulty, the proposed release of the loan funds is highly desirable in the interests of both the Chinese Government and the bondholders.
I have, &c. (Signed)
J. O. P. BLAND.
513
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