Template-DDR-英文.doc

Draft dated 17.07.16
Form of Legal Due Diligence Report

[to be issued on the letterhead of PRC counsel]

To: [typically addressed to the manager, trustee and sponsor of the REIT and the banks]

Date: [·]

PART A

INTRODUCTION

1. Purpose and Use

(a) This is the Legal Due Diligence Report (this "Report") prepared by [insert name of PRC counsel] (“[·]” or “we”) solely for use by [insert name of relevant parties] in relation to the proposed [insert description of transaction]. Save as aforesaid, this report should not be used, quoted or circulated (in whole or in part) for any other purpose or to any other person (unless so required by court order or a regulatory authority) without our prior written consent.

(b) We accept no responsibility or liability whatsoever in connection with the contents of this report to any person other than those to whom it is addressed. If others choose to rely in any way on the contents of this report, they do so entirely at their own risk.

2. Scope of Report

This Report covers only [insert name of the Companies] (the “Companies”) up to [insert cut-off date].

This report is limited to our analysis of the legal issues arising out of our legal due diligence review of the documents provided to us (the "Documents"), and [do not cover any other areas or matters not otherwise specifically stated herein (including any environmental, financial, technical, tax or accounting review)] [Comment: scope to be confirmed].

We have made searches with [insert relevant authorities with whom searches were conducted] for purpose of issuing this report.

The due diligence review undertaken by us does not address matters governed by the laws of any jurisdiction other than PRC law. While we have reviewed documents which are expressed to be governed by laws of jurisdictions other than PRC law, we have simply reviewed the terms of those documents as they appear on their face and have conducted no investigation into, and express no opinion regarding, the impact of the relevant governing law on the interpretation and implementation of such terms. Furthermore, where transaction documents are expressed to be governed by the laws of jurisdictions other than PRC, we have made no investigation and express no opinion regarding, the impact of such laws on such transaction documents.

3. Assumptions and Qualifications

3.1 In this report, we have assumed, having raised queries as we saw appropriate:

(a) that all of the information supplied to us was when given and remains, true, complete and accurate and not misleading;

(b) that where original documentation is referred to but not provided, the original was correctly executed and is still in existence;

(c) that the documents we have examined are true, complete and accurate copies of the originals and that the signatures on those documents are genuine;

(d) the genuineness of all signatures, chops, seals and dates and the correct identity and legal capacity, power and authority of each of the parties to the documents which we have examined to enter into and be bound by the terms of such documents;

(e) for each document to which a corporation is a party (save for the Companies), that party had been and at all relevant times remained duly incorporated and had at all relevant times the necessary corporate power, or corporate authorisation had been validly obtained, to execute each such document, each such document was validly executed and that party was solvent when it did so;

(f) that unless so provided or expressly stated, any document submitted to us continues unamended and is in full force and effect; and

(g) that no term of any agreement comprised in the documents received by us has been amended orally by the parties or by conduct or by course of dealing without our being aware of such amendment. In addition, there may be agreements which are wholly oral of which we are unaware.

The making of each of the above assumptions indicates that we have assumed that the subject of each assumption is true, correct and complete in every particular instance. That we have made the assumptions in this report does not imply that we have made any enquiry to verify an assumption. No assumption is limited by any other assumption.

3.2 This report should not be regarded as a comprehensive or formal legal opinion or legal audit concerning any matter contained in it. For full information, this report should be read in conjunction with the underlying documents themselves.

3.3 Although we may mention matters concerned with financial or accounting issues regarding the Companies, these issues do not form part of the scope of our due diligence review and in this respect we understand that such matters are being dealt with by other advisers.

3.4 We have specifically not commented on the commercial or business nature or effect of the due diligence documents reviewed by us, nor have we given any opinion on valuation issues.

4. Reviewed Documents

For purpose of issuing this report, we have reviewed the documents listed in Part C of this Report in addition to those licenses and permits provided in Part B of this Report.

Yours sincerely,

[insert name of PRC counsel]

Executive Summary
The principal issues identified are:
Nature of Issues
Description of Issues
Legal Implications / Suggestions

PART B

REPORT ON THE COMPANIES

[Comment: to include a structure chart of the Companies]

[Name of the Company][Comment: to duplicate the template for each Company]

1. CORPORATE INFORMATION

1.1 Company Name, Registration Number and Other Information of the Company

We summarise below in table form, the current valid corporate information of the Company according to its Approval Certificate and Business Licence.

Information listed in the Approval Certificate of the Company issued by [ ] on [·]:

Company Name

Date of Certificate

No. of the Certificate

Type of Business

Duration of Operation

Shareholder and Shareholding

Business Scope

Registered Capital

Total Investment

[Comment: please include any other important information]

Remarks: [ ]

Information listed in the Business Licence issued by [ ] on [·]:

Company Name

Company Registration No.

Place/Date of Incorporation

Current Registered Address

Type of Company

Scope of Business

Registered Capital/Paid up Capital

Legal Representative

Period of Operation

Annual Inspection

[Comment: please include any other important information]

Remarks: [ ]
We are of the view that the Company is duly incorporated and validly existing as a company with limited liability under the relevant PRC laws and regulations and has obtained all material necessary approvals, permits, consents and licenses for its due incorporation and the conduct of the business it currently carries on.
1.2 Articles of Association of the Company and their Amendments [Comment: to include Joint Venture Contracts, if applicable]
(a) Articles of Association of the Company
The Original Articles of Association of the Company dated [·] was duly approved by [ ] (the “Original Approval Authority”) on [·]. The Company obtained its Original Approval Certificate on [·].
The main information listed in the Original Approval Certificate is as follows:
Company Name

Registered Address

Date of the Certificate

No. of the Certificate

Shareholder

Registered Capital

Total Investment

[Comment: please include any other important information]

Remarks: [ ]

(b) First Amendment to the Articles of Association [Comment: to duplicate for subsequent amendments]
No.
Article
Before Amendment
After Amendment
1

The First Amendment to the Articles of Association of the Company was duly approved by [ ] on [·].

(c) Summary of the current valid Articles of Association of the Company (the “AOA”)
(i) Constitution of the AOA

The current valid AOA of the Company consists of the following documents:
[ ]

(ii) Content of the AOA

The main content of the AOA is as follows:

[to set out main contents of the AOA, including any particulars that PRC counsels deem fit to highlight e.g. any provisions affecting voting rights, payment of dividends or transfer of equity interests in the company]

We are of the view that the current valid Articles of Association of the Company comply with PRC law.

1.3 Corporate Structure of the Company

(a) Legal Representative
[Comment: to include information on the legal representative of the Company]

(b) Directors and Supervisor
According to an appointment letter dated [insert date] issued by the Company, the current valid Directors and Supervisor of the Company are listed as follows:

Name
Position
Effective Date of Appointment
Expiry
Date of Term of Office
Supporting Documents

[ ]
[ ]
[ ]
[ ]
[ ]

We are of view that the current directors and supervisor are duly registered with the [ ] and that their appointments are valid.
(c) Auditors
Name
Address
Effective Date of Appointment
Effective Date of Resignation
Supporting Documents
[ ]
[ ]
[ ]
[ ]
[ ]

(d) Branch
[Based on the results of our company search, the Company does not have any branch.]
1.4 History of Equity Transfer, Registered Capital, Paid-Up Capital, Total Investment and Other Changes
[Comment: to insert write-up tracing the history of the above and highlighting any irregularities in respect thereof. Other changes may include change of the Company name, corporate type and legal representative.]
We are of view that the above changes in respect of the Company have been duly approved by the relevant PRC governmental authorities and are valid.
Based on our review:
(i) there are no irregularities in any capital contribution, change of capital or transfer of equity interests. All capital contributions, changes of capital and transfers of equity interests are duly authorised, valid and effective;
(ii) [there are no minimum capitalisation requirements applicable to the Company];
(iii) there are no proposals, commitments or undertakings to change the registered capital of the Company or transfer the equity interests of the Company;
(iv) there are no known arrangement the operation of which may, at a subsequent date, result in a change in control of the Company;
(v) the shareholder of the Company has not charged or otherwise encumbered its equity interests in the Company; and
(vi) there are (a) no restrictions transfers of equity interests in the Company; and (b) no restrictions on holdings of equity interests in the Company (including restrictions on non-resident or foreign shareholders directly or indirectly holding equity interests or exercising voting rights in the Company.
1.5 Details relating to any security interests created over any of the Company’s Equity Shares
[Comment: to insert write-up on the above]

2. GOVERNMENTAL/REGULATORY APPROVALS, LICENCES, REGISTRATIONS & CERTIFICATES

Name
Number
Date of Issue
(dd/mm/yy)
Validity Term
Business Scope
Authority
Business Licence (营业执照)

Approval Certificate for establishment of enterprises with foreign investment in the PRC
(中华人民共和国外商投资企业批准证书)

Tax Registration Certificate
(税务登记证)

Organizational Code Certificate
(组织机构代码证)

Foreign Exchange Registration Certificate
(外汇登记证)

Statistics Registration Certificate
(统计登记证)

Financial Registration for Enterprises with Foreign Investment
(外商投资设立财政登记证)

Permit for Opening Bank Account
(开户许可证)

Social Insurances Registration Certificate
(社会保险登记证)

Hygiene License
(卫生许可证)

(Property Management Enterprise Qualification Certificate)
物业管理企业资质证书

[Comment: please include any other approvals/licences/ certificates if applicable]

Remarks: [ ]

3. MATERIAL CONTRACTS
[insert name of material contract]
Parties
[ ]
Term
[ ]
Contract sum
[ ]
Purpose of the Agreement
[ ]
Obligations and liabilities
[ ]
Change of control provisions
[ ]
Assignment
[ ]
Non-compete
[ ]
Termination Clause
[ ]
Events of default
[ ]
Consequences of breach
[ ]
Confidentiality
[ ]
Governing Law
[ ]
Special clauses
[ ]
[Comment: please include any other important information]
[ ]
Remarks
[ ] [Comment: generally to insert description if amendments have been made to the document over time – applies to all documents summarised]

(a) Lease Agreements [Comment: please review all lease agreements]
Please see Appendix A List of Summary of Reviewed Leases.
(b) Retail Lease Agreements ([ ] agreements)
Please see Appendix B Summary of Retail Lease Agreements.
(c) Office Lease Agreements ([ ] agreements)
Please see Appendix C Summary of Office Lease Agreements.
(d) Letters of Intent ([ ] letters)
Please see Appendix D Summary of Letters of Intent.

(e) Registration Status of Lease Agreements ([ ] agreements)
Retail/Office
Unit
Number of Lease Agreements
Status (Registered/Not Registered/Remarks)

(f) [insert description of other] Lease Agreements
Tenant
Number of Leases
Location/ Leased Area
Lease Term (mm-dd-yy)
Monthly Rent (RMB)
Monthly Management Fee (RMB)

We confirm that, in respect of each of the leases detailed above:
(i) there has been no breach of the tenant (other than non-payment of rent) or the landlord;
(ii) there is no rental that is due from the tenant that is unpaid;
(iii) there has been no notice of termination by the tenant or the landlord;
(iv) there are no disputes between the tenant and the landlord or in respect of the leased premises; and
(v) the lease has been duly registered in accordance with the requirements of PRC laws and regulations.

4. FINANCING

(a) Loan Contracts [Comment: to include all loans such as bank loans and shareholder loans]

Parties
[ ]
Date of the contract
[ ]
Objective of the Loan
[ ]
Duration of the contract
[ ]
Amount of the Loan
[ ]
Final Maturity Date
[ ]
Interest
[ ]
Repayment & Prepayment
[ ]
Events of Default
[ ]
Security for the Loan
[ ]
Change of control provisions
[ ]
Assignment
[ ]
Governing Law
[ ]
Dispute Resolution
[ ]
Registration
[ ]
[Comment: please include any other important information]
[ ]
Remarks
[ ]

(b) Share Pledge

Parties

Date of the contract

Objective of the contract

Duration of the contract

Pledged Shares

Secured Debt

Restrictions on the Pledgor

Change of control provisions

Assignment

Governing Law

Dispute Resolution

Registration

[Comment: please include any other important information]

Remarks

(c) Property