Loan Contract
EXHIBIT 10.2
Loan
Contract
(Chongwen)
Nong-Yin-Jie No.1059
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
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1.
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Type
of Loan: short-term
flowing capital
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2.
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Purpose
of Loan: for
purchasing raw materials
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3.
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Currency
and Amount (in Capital Letters) of Loan: Ten
million RMB
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4.
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Term
of Loan
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(1)
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See
the table below for the term of the
Loan.
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Release
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Maturity
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|||||||||||||||||||||
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Year
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Month
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Day
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Amount
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Year
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Month
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Day
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Amount
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|||||||||||||||
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2007
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3
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15
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Ten
million
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2008
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3
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14
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Ten
million
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(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.)
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(2)
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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.
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(3)
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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.
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5.
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Interest
Rate
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Interest
rate of RMB loans shall be determined using the (2
)
method
described here below:
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(1)
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Floating
Interest Rate:
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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.
1
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.
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(2)
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Fixed
Interest Rate
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The
interest rate of the Loan shall float by 10
%
up
(up/down) the base rate and the annual interest rate shall be 6.138%
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.
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| (2) |
Apply
the annual interest rate of × %
until the maturity date of the
Loan.
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| (3) |
Other
Method: ×
.
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6.
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Interest
Settlement
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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’s
final month (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
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1.
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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.
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2
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2.
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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.
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3.
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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.
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4.
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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.
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5.
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If
the Borrower has failed to fulfill the obligation of paying the Loan,
the
Lender may publicly disclose the Borrower’s default.
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6.
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The
Lender shall release the Loan to the Borrower in full amount and
on time
as agreed herein.
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Article
IV Rights
and Obligations of Borrower
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1.
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The
Borrower shall have the right to obtain and use the Loan as agreed
herein.
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2.
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The
Borrower shall handle current settlements and deposits in connection
with
the Loan hereunder through the account set forth in Article II
herein.
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3.
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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.
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4.
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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.
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5.
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The
Borrower shall use the Loan for the purpose contracted herein without
seizing or diverting the Loan for any other
purposes.
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6.
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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.
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7.
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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.
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8.
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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.
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9.
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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.
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10.
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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.
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11.
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The
Borrower shall duly notify the Lender in writing of changes to the
Borrower’s name, legal representative, address or business
scope.
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3
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12.
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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.
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13.
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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.
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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 ×
method
described here below:
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1.
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Calculate
and collect interest based on the term of the Loan and applicable
interest
rate agreed in the Contract.
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2.
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Calculate
and collect interest based on the actual term of the Loan and at
the
applicable interest rate agreed herein plus × (in
capital letters) percent.
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Article
VI. Defaults
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1.
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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.
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2.
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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.
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3.
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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.
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4.
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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.
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5.
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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.
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6.
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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.
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7.
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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.
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4
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:
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1.
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Legal
action: Such disputes shall be subject to jurisdiction of the people’s
court in the place of the Lender.
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2.
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Arbitration:
The disputes shall be submitted to × (full
name of arbitrating agency) for arbitration in accordance with
its
arbitration rules.
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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
×
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 three
identical
copies, with each party hereto respectively holding one, the guarantors
respectively keeping one
and
three
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.
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Borrower (Signature/Seal)
/s/ Duoyuan Digital Printing Technology Industry
(China)
Co., Ltd.
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Lender
(Signature/Seal):
/s/ Agricultural Bank of China Beijing Chongwen
District
Branch Special Seal for Loan Contract Approval
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| Legal Representative: | Officer in Charge or Authorized Representative: | |
| Date Signed: | ||
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Place
Signed:
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