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Eric:

Please see our comments below on the loan agreement.

George

George R. Mesires
Partner
george.mesires@FaegreBD.com<mailto:george.mesires@FaegreBD.com> Download vCard<http://www.faegrebd.com/vcard/george.mesires.vcf>
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Faegre Baker Daniels LLP<http://www.faegrebd.com/>
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On Jul 6, 2017, at 1:50 AM, Mao, Cloris <Cloris.Mao@FaegreBD.com<mailto:Cloris.Mao@FaegreBD.com>> wrote:

Hi George,

I have two comments to the Loan Agreement:

1. In 2016 we worked on the share transfer agreement to transfer the 20% equity interest in BHR from Rosemont Seneca Bohai, LLC to Skaneateles (10%) and Ulysses (10%). According to the online database of the PRC Administration of Industry and Commerce ("AIC"), BHR has not filed the share transfer with the AIC until today. So legally speaking, Skaneateles has not formally become the owner of the 10% equity interest and does not have the capital contribution obligation, which is the basis of this Loan Agreement.

I suggest checking with BHR to see when it can finish the share transfer filing to record Skaneateles as the 10% owner. And Skaneateles can sign the Loan Agreement after the completion of the filing. If the Loan Agreement must be signed before the completion of the filing, we should add some language in the whereas clause of the Loan Agreement to address the background.

2. According to Section 4 of the Loan Agreement, the loan will be disbursed by the Lender (Mr. Li Xiang Sheng) directly to BHR's account t(i.e. not thorough Skaneateles' account). We suggest asking BHR to confirm if such payment route is fine and will not cause trouble at BHR's bank for receiving the amount or raise any issue in BHR's next annul filing. As BHR will need to explain to the bank and the AIC that the payment from Mr. Li Xiang Sheng's account to BHR's account is actually the capital contribution of Skaneateles, it is possible that the bank or the AIC may challenge why the payment is not remitted from Skaneateles' account. So it is important that BHR confirm the feasibility of this arrangement.

Should you have any questions, please feel free to let me know. Thanks.

Best regards,

Cloris

-----Original Message-----
From: Mesires, George R.
Sent: 2017年7月5日 21:35
To: Mao, Cloris
Cc: Martin, George D.
Subject: FW: BHR Loan Agreement

Hi Cloris:

If you recall, you helped out on the BHR matter. Please see the email below and attached. Can you please review the loan agreement, attached and make sure it reflects market terms and is otherwise compliant with Chinese law?

Thank you.

George

George R. Mesires
Partner
george.mesires@FaegreBD.com<mailto:george.mesires@FaegreBD.com>
D: +1 312 356 5101 | M: +1 312 972 4151

www.FaegreBD.com<http://www.FaegreBD.com>

Faegre Baker Daniels LLP
311 S. Wacker Drive | Suite 4300 | Chicago, IL 60606, USA


-----Original Message-----
From: Eric Schwerin [mailto:eschwerin@rosemontseneca.com]
Sent: Monday, June 26, 2017 11:38 PM
To: Mesires, George R.
Subject: BHR Loan Agreement

Let's discuss when you get a chance.

In short, Skaneateles owes BHR an additional approx $145K for our capital commitment. Since we don't have the capital right now, Jonathan Li, the CEO is going to loan us the money to meet the regulatory capital commitment and the loan can be paid off by any future distributions (if we don't choose to pay it off before).
Already we should have $45K coming from a distribution which will go to this.

I don't have a problem with this in concept and I know Hunter doesn't
as well. Devon and Jim Bulger would sign similar agreements.

In theory our 10% share is currently worth about $1m US so a portion of it could be sold to pay back the loan if it came to that.

I don't have to sign while I am here but it may need to be executed in a week or two.

Reading through the language it seems pretty straightforward