EMAIL DETAILS

We should at least know who the non-funding investor was. Right?
Love to know BOC opinion on this whole matter as well since they are our
partners.
Let's stay calm and get the proper message across to Jonathan this is a big
fuck up
That's my thoughts
Jimmy

On Saturday, March 7, 2015, James Bulger <jbulger@thorntonai.com> wrote:

> I believe you have the relevant points correct
>
> On Saturday, March 7, 2015, Hunter Biden <hbiden@rosemontseneca.com
> <javascript:_e(%7B%7D,'cvml','hbiden@rosemontseneca.com');>> wrote:
>
>> So not only did they fail to fund but we may end up loosing money due to
>> the RMB 63M fine we may have to pay. Am I reading this wrong or should I be
>> appropriately ape shit about this. Plus we are going to pilloried in the
>> press for being the only fund that failed to meet its obligations. WTF!
>>
>> RHB
>> 202.333.1880
>>
>> Begin forwarded message:
>>
>> *From:* "Jason Zhu" <jason.zhu@bhrpe.com>
>> *Date:* March 7, 2015 at 9:55:43 AM EST
>> *To:* <darcher@rosemontseneca.com>, "'Hunter Biden'" <
>> hbiden@rosemontseneca.com>, "Bulger Jim" <jbulger@thorntonai.com>,
>> "Michael Lin" <michael.c.l.lin@gmail.com>
>> *Cc:* "Leonard Mike" <mleonard@thorntonai.com>, "Sebastian Momtazi" <
>> smomtazi@rosemontseneca.com>, "'Jonathan.li'" <jonathan.li@bhrpe.com>, <
>> xueming@bhrpe.com>, <xin.wang@bhrpe.com>, '李新中' <xinzhong.li@bhrpe.com>,
>> '夏雨（Yu XIA）' <yu.xia@bhrpe.com>, "'YU, Felix'" <felix.yu@bhrpe.com>
>> *Subject:* *The Notice of Sinopec Deal*
>>
>> Dear all,
>>
>>
>>
>> In reference to the SMC Capital Increase deal, we would like to update
>> everyone as follows:
>>
>>
>>
>> - following the signing of all relevant subscription and investment
>> agreements in September 12, 2014 for a total subscription amount of RMB6
>> billion, Sinopec finally issued its capital call notice on February 2, 2015
>> requesting that all funds be fully invested by February 13, 2015
>>
>>
>>
>> - by closing of business on February 13, 2015, BHR transferred a total of
>> RMB3.75 billion to Sinopec whereas the remaining RMB2.25 billion was not
>> made available at the time due to the withdrawal of funds by one of our
>> original LPs (the “*Defaulting LP*”). Sinopec agreed to extend BHR’s
>> closing date to March 4, 2015
>>
>>
>>
>> - as we continued to negotiate with the Defaulting LP, we immediately
>> launched alternative fundraising efforts despite the intervening Chinese
>> New Year holiday (which meant many of our contacts were either unavailable
>> to not able procure the necessary funds in time). By the closing of March
>> 4, 2015, we were able to raise an additional RMB0.2 billion, bringing BHR’s
>> total investment amount to RMB3.95 billion
>>
>>
>>
>> - as of March 6, 2015, Sinopec officially closed its subscription
>> accounts, also terminating BHR’s rights to make any further subscriptions
>> beyond the RMB3.95 invested
>>
>>
>>
>> This unfortunate incident caught each of us by surprise and despite the
>> team’s best efforts, we were not able to raise the defaulted amount given
>> the extremely tight timing from first receiving the capital call on
>> February 2 to being notified at the very last minute before the original
>> Feb. 13 closing date of the Defaulting LP’s funding withdrawal and finally
>> to the closing of the subscription window on the morning of March 6.
>>
>>
>>
>> Sinopec issued an announcement in relation to the closing of the SMC
>> Capital Increase last night which touched upon the failure to fund by an
>> investor but did not name BHR. All involved parties understand and agree
>> that BHR's failure to fund the entire amount is an isolated event which is
>> solely attributable to liquidity difficulties with an LP and should not
>> serve as a testament of BHR’s abilities. While we are confident that this
>> incident will not have any adverse effect in the long run, we must deal
>> with the possibility of short-term credibility issues once the market picks
>> up the story (which will be soon). Our position is that we maintain our
>> support for the SMC deal as attested by our RMB3.95 billion subscription
>> amount but given the deal fund structure of this particular transaction, we
>> were not able to maneuver other committed funds to cover the deficiency
>> caused by the Defaulting LP.
>>
>>
>>
>> For now, we must deal with the legal aftermath of the situation. On the
>> one hand, we are, vis-à-vis Sinopec, in breach of our funding obligations
>> in respect of the RMB2.05 billion uninvested amount, which may involve
>> monetary damages of up to RMB63.5 million. On the other hand, we are
>> pursuing all remedies against the Defaulting LP for its breach of relevant
>> LP agreements, which directly caused our breach of the Sinopec agreements.
>>
>>
>>
>> Finally, we are in close discussions with Sinopec to coordinate our
>> efforts and to mitigate any spillover effect this incident may have on our
>> SOE fundraising efforts or on our ability to partake in future SOE reform
>> opportunities. We ask that all inquiries in relation to this transaction
>> be directed to Mr. Xia Yu, who will be the house speaker on this matter on
>> behalf of BHR.
>>
>>
>>
>>
>>
>> Regards,
>>
>>
>>
>> 诸晨刚 Jason Zhu
>>
>> 执行董事 Executive Director
>>
>>
>>
>> 渤海华美（上海）股权投资基金管理有限公司
>>
>> Bohai Harvest RST (Shanghai) Equity Investment Fund Management Co., Ltd.
>>
>> 北京市朝阳区建国路79号华贸中心写字楼2座31层3101室 邮编：100025
>>
>> 31/F, Unit 3101, Tower 2, China Central Place, 79 Jianguo Road,
>>
>> Chaoyang District, Beijing 100025, China
>>
>> Cellphone: 136 8169 7246
>>
>> Tel: 86 10 5969 5858
>>
>> Fax: 86 10 5969 6123
>>
>> Email: jason.zhu@bhrpe.com
>>
>>
>>
>>
>
> --
> James J. Bulger
> Chairman
> Thornton Group LLC
> 14 Beacon Street, Suite 804A
> Boston, MA 02108
> Office tel: 617.248.9440
>


--
James J. Bulger
Chairman
Thornton Group LLC
14 Beacon Street, Suite 804A
Boston, MA 02108
Office tel: 617.248.944