Loan Contract
Exhibit
10.4
Loan
Contract
(Chongwen)
Nong-Xxx-Xxx No.0954 Borrower (Full Name): Duoyuan
Digital Printing Technology Industry (China) Co., Ltd.
Lender
(Full Name): Agricultural Bank of China Chongwen
Branch, Beijing
In
accordance with applicable laws and regulations of the State, both parties
hereto enter into this loan contract (the “Contract”) after mutual consultation.
Article
I Loan
1 Type
of
Loan: revolving
debt
2 Purpose
of Loan: for
purchasing raw materials
3 Currency
and Amount (in Capital Letters) of Loan: Twenty
million XXX
0 Xxxx
of
Loan
(1)
See
the table below for the term of the Loan.
|
Release
|
Maturity
|
||||||||||||||
|
Year
|
Month
|
Day
|
Amount
|
Year
|
Month
|
Day
|
Amount
|
||||||||
|
2007
|
7
|
13
|
Twenty
million
|
2008
|
7
|
12
|
Twenty
million
|
||||||||
(Additional
sheets may be attached to the above table when the space in the above table
is
insufficient and shall constitute a part of the Contract.)
(2)
In
the event of any discrepancy between the amount, release and maturity dates
of
the Loan as stated in the Contract and those recorded on the loan document,
the
latter shall prevail. The loan document shall constitute a part of and enjoy
the
same effectiveness as the Contract.
(3)
When
the Loan hereunder is in a foreign currency, the Borrower shall pay principal
and interest of the Loan in the currency in which the Loan has been originally
released to him/her.
5.
Interest Rate
Interest
rate of RMB loans shall be determined using the (2 ) method described here
below:
(1)
Floating Interest Rate: The interest rate of the Loan shall float by ×%
(up/down) the base rate and the annual interest rate shall be %. The base rate
of a loan for a term of five years or less shall be the base rate of RMB loans
in the same period as publicized by the People’s Bank of China, and that of a
loan for a term of more than five years shall be said base rate of RMB loans
plus × (in capital letters) percent.
Interest
rate adjustment shall take place at an interval of ×
(in
capital letters) month. In the event of an adjustment to the base interest
rate
of RMB loans by the People’s Bank of China, the Lender shall determine the new
applicable interest rate of the Loan based on the adjusted base rate of loans
for appropriate term without further notifying the Borrower. When the date
of a
base rate adjustment coincides with the release date of the Loan or the date
of
the initial month of said adjustment interval that corresponds to the release
date of the Loan, the new applicable rate shall be determined from the date
of
the adjustment. When no such corresponding date is available, the last day
of
the month shall be deemed as the corresponding date.
(2)
Fixed
Interest Rate The interest rate of the Loan shall float by ×% up (up/down) the
base rate and the annual interest rate shall be 6.732% until the maturity date
of the Loan. The base rate of a loan for a term of five years or less shall
be
the base rate of RMB loans in the same period as publicized by the People’s Bank
of China, and that of a loan for a term of more than five years shall be said
base rate of RMB loans plus × (in capital letters) percent. Interest rate of
foreign-currency loans shall be determined using the × method described here
below:
(1)
The
interest rate shall be floating based on ×
(in
capital letters) months × that is composed of (in capital letters) months’
× (LIBOR/HIBOR) + × % as interest rate difference. LIBOR/HIBOR shall be the
London/Hong Kong inter-bank offered rate publicized by Routers as of two working
days before the interest calculation date for loans of the corresponding term.
(2)
Apply
the annual interest rate of × % until the maturity date of the Loan.
(3)
Other
Method: × .
6.
Interest Settlement Interest of the Loan hereunder shall be settled on a
quarterly (monthly/quarterly) basis and the date of interest settlement shall
be
the 20th day of each quarter (month/quarter’s final month). The Borrower shall
pay interest on each date of interest settlement. If the final principal payment
date of the Loan isn’t a date of interest settlement, the outstanding interest
shall be paid in full together with the principal (daily interest rate = monthly
interest rate/ 30).
Article
II. The Lender shall have the right to reject provision of the Loan hereunder
if
the following requirements are not satisfied:
1 The
Borrower shall open basic account with the Lender.
2
The
Borrower shall provide relevant documents, materials and properly fulfill
appropriate procedures as requested by the Lender.
3 When
the
Loan hereunder is in a foreign currency, the Borrower shall have properly
fulfilled all approval, registration and other statutory procedures in
connection with the Loan as required by the present clause.
4
In the
event that the Loan hereunder involves mortgage or pledge guarantee, the
appropriate registration and/or insurance procedures shall have been properly
fulfilled as required by the Lender and such guarantee and insurance shall
remain valid. If the Loan hereunder involves a surety guarantee, the surety
contract shall have been signed and fallen into force and effect.
Article
III. Rights and Obligations of Lender
1. The
Lender shall have the right to keep informed of conditions of the Borrower’s
business and financial activities as well as inventories of materials and use
of
the Loan, and to require the Borrower to provide financial
statements as well as other materials and information on a regular basis.
2 When
the
Borrower incurs any of the unfavorable actions or situations set forth in
provisions including without limitation to Sub-clauses 7, 8 and 10 of Article
IV
herein that is sufficient to endanger security of the Loan, the Lender may
suspend release of the Loan or recover it earlier.
3 When
recovering principal, interest, penal interest, compound interest of the Loan
and other fees and charges payable by the Borrower as contracted herein or
earlier than scheduled, the Lender may transfer the amounts to be so recovered
from any account of the Borrower.
4 When
the
amount paid by the Borrower is insufficient to pay off the sum due and payable
hereunder, the Lender may opt to use the amount to pay the principal, interest,
penal interest, compound interest or fees and charges of the Loan.
5 If
the
Borrower has failed to fulfill the obligation of paying the Loan, the Lender
may
publicly disclose the Borrower’s default.
6 The
Lender shall release the Loan to the Borrower in full amount and on time as
agreed herein.
Article
IV Rights and Obligations of Borrower
1 The
Borrower shall have the right to obtain and use the Loan as agreed herein.
2 The
Borrower shall handle current settlements and deposits in connection with the
Loan hereunder through the account set forth in Article II herein.
3 If
the
Loan hereunder is in a foreign currency, the Borrower shall properly fulfill
appropriate approval, registration and other statutory procedures in connection
with the Loan in accordance with applicable regulations.
4 The
Borrower shall pay principal and interest of the Loan as scheduled. When the
Borrower needs an extension of the term of the Loan, it shall lodge a written
application to the Lender within 15 days before the maturity date of the Loan,
and sign an extension agreement after obtaining the Lender’s consent.
5 The
Borrower shall use the Loan for the purpose contracted herein without seizing
or
diverting the Loan for any other purposes.
6 The
Borrower shall provide the Lender with true, complete and valid financial
statements and other relevant materials and information on a monthly basis,
and
actively collaborate with the Lender’s inspection of its business and financial
activities and use of the Loan hereunder.
7 The
Borrower shall notify the Lender in advance in writing and obtain the Lender’s
consent before it executes any contracting, lease, joint stock system reform,
joint venture, consolidation, merger, division, asset assignment, application
for cessation of operation for rectification purpose or for dissolution or
bankruptcy, or any other action that is sufficient to cause changes to the
debtor-creditor relationship hereunder or to impair the Lender’s realization of
its creditor’s rights, and shall not implement any of the foregoing actions
until it has identified the accountability for debts paying or paid off all
debts earlier.
8 The
Borrower shall immediately notify the Lender in writing when it incurs any
other
circumstances other than the actions set forth in the foregoing sub-clause
that
will have material negative influence on its fulfillment of the payment
obligation hereunder, such as cessation of production, wind-up, registration
cancellation, revocation of business license, legal representative or
superintendent’s engagement in illegal activities or involvement in major legal
actions or arbitration, severe difficulty in business operation, deterioration
of financial status, etc., and shall implement the creditor’s right preservation
measures that have been accepted by the Lender.
9 The
Borrower shall notify the Lender in advance in writing and obtain the Lender’s
consent if it provides guarantee for other persons’ debts or mortgages or
pledges its major assets to a third person that may possibly impair its ability
to pay the Loan hereunder.
10 The
Borrower and its investor(s) shall not secretly withdraw funds, transfer assets
or assign shares without permission in order to evade the payment obligation
to
the Lender.
11 The
Borrower shall duly notify the Lender in writing of changes to the Borrower’s
name, legal representative, address or business scope.
12 The
Borrower shall promptly provide other guarantee measures accepted by the Lender
in the event that the guarantor of the Loan hereunder incurs such situations
as
cessation of operation, wind-up, cancellation of registration, revocation of
business license, bankruptcy or suffering a losing result in business operation
and has partially or completely lost the guaranteeing capability matching the
Loan, or that the collateral, pledge or pledged title serving as guarantee
of
the Loan hereunder suffers decrement in value.
13 The
Borrower shall cover the costs and expenses of attorney’s service, insurance,
transportation, appraisal, registration, safekeeping, identification and public
notarization that are in connection with the Contract or the guarantee
hereunder.
Article
V. Early Payment of Loan
The
Borrower shall obtain the Lender’s consent before making an earlier payment of
the Loan; and if the Lender agrees upon such earlier payment, interest on the
portion so paid earlier shall be calculated and paid at the time of the payment
using the two method described here below:
1 Calculate
and collect interest based on the term of the Loan and applicable interest
rate
agreed in the Contract.
2 Calculate
and collect interest based on the actual term of the Loan and at the applicable
interest rate agreed herein plus ZERO (in capital letters) percent.
Article
VI. Defaults
1 If
the
Lender has failed to release the Loan to the Borrower in full and as scheduled
and consequently caused loss to the Borrower, it shall pay penalty to the
Borrower based on the defaulted amount and the days of duration of the default,
which penalty shall be calculated using the same method applicable to overdue
loan payment in the same period.
2 In
the
event that the Borrower has failed to pay principal of the Loan as per the
schedule agreed herein, the Lender shall impose penal interest upon the overdue
amount from the overdue date and at the applicable interest rate of the Loan
as
set forth herein plus FIFTY (in capital letters) percent until the principal
and
interest of the Loan is paid off in full. If the People’s Bank of China adjusts
upwards the base interest rate of RMB loans in the same period during such
overdue payment, the penal interest rate shall be raised accordingly from the
date of the adjustment to the extent that the Loan hereunder is in RMB.
3 If
the
Borrower has failed to use the Loan as contracted, the Lender shall impose
penal
interest on the defaulted amount from the date of the default and at the
applicable interest rate of the Loan as agreed herein plus ONE HUNDRED (in
capital letters) percent until the principal and interest of the Loan is paid
in
full. If the People’s Bank of China adjusts upwards the base interest rate of
RMB loans in the same period during such default, the penal interest rate shall
be raised accordingly from the date of the adjustment to the extent that the
Loan hereunder is in RMB.
4 The
Lender will charge compound interest in accordance with regulations of the
People’s Bank of China on interest due and payable but remaining outstanding.
5 In
the
event of the Borrower’s breach of its obligations hereunder, the Lender shall
have the right to require the Borrower’s correction of the breach within
specified period of time, suspend release of the Loan, recover earlier the
amount of the Loan that has been previously released, and declare immediate
maturity of loans under other loan contracts between the Borrower and the Lender
or take other asset preservation measures.
6 If
any
guarantor of the Loan hereunder has breached the obligations agreed herein,
the
Lender shall have the right to suspend release of the Loan, recover earlier
the
amount of the Loan that has been previously released or take other asset
preservation measures.
7 If
the
Lender resorts to legal action or arbitration for realization of its creditor’s
rights as result of the Borrower’s default of the Contract, the Borrower shall
assume the attorney’s fee, traveling expense and other costs and expenses that
the Lender has paid for such realization of creditor’s rights.
Article
VII. Guarantee
The
form
of guarantee of the Loan hereunder is Maximum collateralized loan balance and
the guarantee contract is to be separately signed. If maximum-value guarantee
is
adopted, the guarantee contract number is .
Article
VIII. Settlement of Disputes
Disputes
occurring during performance of the Contract may either be settled through
mutual consultation of both parties or through the 1 method described here
below:
1 Legal
action: Such disputes shall be subject to jurisdiction of the people’s court in
the place of the Lender.
2 Arbitration:
The disputes shall be submitted to × (full name of arbitrating agency) for
arbitration in accordance
with its arbitration rules. During such legal action or arbitration, performance
of provisions of the Contract other than those concerned in the dispute shall
be
continued.
Article
IX. Miscellaneous
Maximum
collateralized loan balance term: 2005.07.28—2007.07.27
Article
X. Effectiveness of Contract
The
Contract shall take effect from the date of signatures or seals by the Lender
and the Borrower.
Article
XI. Counterparts
The
Contract is made in four identical copies, with each party hereto respectively
holding one, the guarantors respectively keeping one and four copies, all
enjoying the same effectiveness.
Article
XII. Notice
The
Lender has reminded the Borrower to fully and accurately understand all printed
clauses herein and made appropriate clarifications of the clauses as requested
by the Borrower. Both parties have common understanding regarding implications
of the Contract.
Borrower
(Signature/Seal) Lender (Signature/Seal):
Agricultural
Bank of China Beijing Chongwen District Branch Special
Seal
for
Loan Contract Approval
Legal
Representative: Officer in Charge or Authorized Representative:
Date
Signed:
Place
Signed:
