RENMINBI LOAN CONTRACT BY AND BETWEEN CHANGXING CHISEN ELECTRIC CO., LTD. AS LOANEE AND BANK OF CHINA (HONG KONG) LIMITED SHANGHAN BRANCH AS LOANER
BY
AND BETWEEN
CHANGXING
CHISEN ELECTRIC CO., LTD.
AS
LOANEE
AND
BANK
OF CHINA (HONG KONG) LIMITED SHANGHAN BRANCH
AS
LOANER
WHEREAS,
|
(1)
|
The
Loanee submits loan application to the Loaner for the purpose as
prescribed in Article 2 hereof;
|
|
(2)
|
Bank
of China Limited Zhejiang Provincial Branch (BOC Zhejiang Branch)
issues
stand-by letter of credit to guarantee the
loan;
|
|
(3)
|
The
loanee, upon checking the loanee's application and the documents
and
materials related thereto, renders decision pursuant to the provisions
hereof to offer the loanee the loan aggregately not exceeding RMB20
million (say twenty million Yuan
Renminbi);
|
NOW,
THEREFORE, the
Loaner and the Loanee hereby enter into this Contract after full consultation.
| Article 1 |
Definition
and Construction
|
Unless
the context otherwise construes or the text otherwise requires, the following
terms as used in this Contract shall have the meanings set forth
below:
| Drawing Day |
with
respect to each sum of loan, means the date to actually offer such
loan to
the Loanee;
|
| Legal Interest Rate |
means
the reference loan rate of financial institution set forth and/or
promulgated (as adjusted from time to time) by the Headquarters of
the
People's Bank of China. The Legal Interest Rate shall be the reference
to
determine the loan rate under this Contract that will change together
with
the adjustment thereof.
|
| Arrears |
means
all expired and unexpired money owed by the Loanee to the Loaner
under
this Contract, including the loan principal and interests (including
overdue interest, penalty interest and double interest), stamp tax,
handling fee, attorney's fee and other reasonable taxes and fees
(including the fees payable to the third party) arising from this
Contract.
|
| Overdue Interest |
means
the interests collected by the Loaner on the aforesaid money at the
overdue interest rate as prescribed in subsection 3.04 from the overdue
date at the time of the Loanee's failure to repay the loan as scheduled
(including, but not limited to, the loan principal and interest and
other
expenses payable).
|
| Penalty Interest |
means
the penalty interest collected by the Loaner on the money used not
pursuant to the purpose as set forth herein at the penalty interest
rate
as prescribed in subsection 3.05 at the time of the Loanee's failure
to
use the loan to the purpose as set forth
herein.
|
| Double Interest |
means
the interests collected by the Loaner on the unpaid interests and/or
the
Penalty Interest at the penalty interest rate as set forth herein
at the
time of the Loanee's failure to pay relevant interests (including
the
Penalty Interest) as scheduled.
|
| Tax |
means
the aggregate or portion of the taxes in connection with the execution,
performance and dispute resolution of this Contract, including, but
not
limited to, stamp tax, withholding tax on interest and other taxes
in
relation to the loan under this Contract.
|
| Outlay |
means
the aggregate or portion of the taxes in connection with the execution,
performance and dispute resolution of this Contract, including, but
not
limited to, premium, notarial fee, attorney's fee, legal cost and
other
fees in relation to the loan under this Contract.
|
| Notice of Drawing |
means
any notice of drawing signed by the Loanee bearing the substantial
contents and in the form as prescribed in Attachment 3 of this
Contract.
|
| Business Day |
means
the open days of the bank of the place in which the Loaner is located,
other than Saturday, Sunday and other legal holidays defined by the
Chinese government.
|
| Year, Month, Day |
mean
the year, month and day of the calendar year.
|
| Chinese Law or Law |
means
the present, as amended from time to time, and the latest law, rule
and
regulation of the People's Republic of China (excluding Hong Kong,
Macao,
Taiwan).
|
| Article 2 |
Amount,
Period and Purpose of Loan
|
| 2.01 |
Loan
Amount
|
|
The
loan amount under this Contract shall be RMB20 million (say twenty
million
Yuan Renminbi) (called as the Loan Amount hereunder), the actual
Loan
Amount shall be subject to the aggregate loan actually offered by
the
Loaner.
|
| 2.02 |
Loan
Period
|
The
loan
period under this Contract shall be 12 months or the working days within one
month prior to the expiry date of stand-by letter of credit (whichever is
earlier), commencing from the date of drawing (first drawing) by the Loanee.
Thee
Loaner, if able to prove the Loanee has no ability to perform this Contract,
shall unilaterally be entitled to adjust the loan period specified hereinbefore
by sending a prior written notice to the Loanee. Provided that the Loanee fails
to furnish a written evidence satisfactory to the Loaner to certify its
repayment ability, the Loaner shall be entitled to require in writing the Loanee
to pay off all Arrears within 30 days.
| 2.03 |
Loan
Purpose
|
The
loan
under this Contract shall be used to the Loanee's procurement of raw materials
and daily operation. Without prior consent of the Loaner, the Loanee may not
make any change of the loan purpose specified herein.
|
2.04
|
Without
prior written consent of the Loaner, the Loanee may not apply for
cancellation, in whole or in part, of the loan under this Contract
after
signature hereon.
|
| Article 3 |
Interest,
Overdue Interest and Penalty Interest
|
|
3.01
|
The
Loanee shall pay the Loaner the loan interest under this Contract
according to the provisions set forth below:
|
|
(1)
|
Loan
rate: 5% up from the Legal Interest
Rate.
|
|
(2)
|
The
loan under this Contract shall be levied interest pursuant to the
preceding subsection hereof, and the Loaner shall notify the Loanee
of the
loan rate and the interest date in writing.
|
|
Within
the validity period of this Contract, the loan shall be quarterly
accumulatively levied interest and settled for interest quarterly,
each
360 days shall be calculating basis.
|
|
3.03
|
The
Loanee shall pay the interest payable for current period pursuant
hereto.
If the payment day is not a business day, such payment shall be postponed
to the succeeding business day, if adjacent month end, made on the
business day prior to such date.
|
|
3.04
|
Provided
that the Loanee fails to repay the loan as scheduled, the Loaner
shall be
entitled to collect the Overdue Interest on such overdue loan and/or
Arrears since such overdue date.
|
|
3.05
|
Provided
that the Loanee fails to use the loan to the purpose as specified
herein,
the Loaner shall be entitled to collect the Penalty Interest from
the
Loanee.
|
|
3.06
|
The
loan that is not paid on time or not used to the purpose as specified
herein shall be imposed the Overdue Interest and the Penalty Interest
respectively pursuant to this Contract since the overdue date or
the date
on which the loan is not used to the said purpose till the date of
full
repayment.
|
|
3.07
|
The
Loaner shall be entitled to recover the Overdue Interest, Penalty
Interest
and Double Interest as separate financial
claim.
|
|
3.08
|
The
Overdue Interest and Penalty Interest shall commence from the date
payable
and end on the date of full payment.
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| Article 4 |
Premises
|
Prior
to
the drawing, the Loanee shall submit to the Loaner the following documents
consistent with the following conditions, or the Loaner will not offer any
loan
thereto:
|
4.01
|
Approval
for Establishment, business license, articles of association, joint
venture/contractual joint venture contract, capital verification
report
and other hardcopies of documents as deemed necessary to the Loaner.
|
|
4.02
|
The
latest and true list of members of board of directors and sample
signatures thereof.
|
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4.03
|
The
true resolution of the board of directors bearing the contents with
respect to approval of execution of this Contract.
|
|
4.04
|
This
Contract has been signed and sealed by authorized representatives
of the
parties hereto and has binding thereon.
|
|
4.05
|
The
Loanee shall provides the Loaner with the true and effective “Credit Card”
issued by the People’s Bank of China and the code
thereof.
|
| 4.06 |
The
Loanee has paid off all taxes and payables before the drawing.
|
| 4.07 |
Bank
of China Zhejiang Branch has issued the stand-by letter of credit
for this
loan.
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| 4.08 |
Bank
of China Changxing Branch has signed on supervisions agreement.
|
|
4.09
|
Other
documents, documentary evidence and/or other necessary conditions
on the
reasonable ground.
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| Article 5 |
Others
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5.01
|
During
the period of validity of this Contract, without the written consent
of
the Loaner, the Loanee may not repay the loan to its shareholder
prior to
the loan under this Contract.
|
|
5.02
|
During
the period of validity of this Contract, without the written consent
of
the Loaner, the Loanee may not xxxx to the public or distribute
dividend.
|
|
5.03
|
During
the period of validity of this Contract, the Loanee shall in due
time
report to the Loaner the related transaction accounting for over
10% of
the net assets thereof.
|
| Article 6 |
Drawing
and Effective Period of
Drawing
|
|
6.01
|
After
this Contract takes effect, the Loanee shall produce the official
and
complete Notice of Drawing before the Loaner at least 3 days before
the
proposed drawing day.
|
|
6.02
|
For
installment drawing, the loan amount of each drawing by the Loanee
may not
be lower than RMB10 million.
|
|
6.03
|
The
preceding Notice of Drawing shall be irrevocable upon after
issuance.
|
|
6.04
|
The
effective period of drawing under this Contract shall be 3 months
since
the date on which this Contract is signed.
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| Article 7 |
Repayment
|
|
7.01
|
Each
loan to the Loanee may not exceed the loan period and shall be paid
off in
one lump sum at the time of expiry.
|
|
7.02
|
The
Loanee shall repay all Arrears under this Contract in one lump sum
on the
final expiry date or prior thereto, including but not limited to
the loan
principal, interests (including but limited to Overdue Interest,
Penalty
Interest, Double Interest), tax, fees and other expenses. Provided
that
the Loanee has no enough money to repay all Arrears, the money shall
be
repaid in the order set forth
below:
|
|
(1)
|
tax
and other fees in relation to the
loan;
|
|
(2)
|
Overdue
Interest, Penalty Interest and Double Interest (if
any);
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|
(3)
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Loan
interest;
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|
(4)
|
Loan
principal.
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7.03
|
The
loan principal and interest (including, but not limited to, Overdue
Interest, Penalty Interest, Double Interest) shall be counted and
repaid
in the currency of the loan.
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|
7.04
|
The
loan that has been repaid by the Loanee may not be re-loaned
thereto.
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| Article |
Early
Repayment
|
|
8.01
|
The
Loanee may repay the loan, in whole or in part, prior to the repayment
date upon sending at least a ten-day's written notice to the Loaner.
|
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8.02
|
The
early repaid amount may not be less than RMB10 million and must be
integer
multiple of RMB5 million (exclusive of the final Arrears paid in
advance).
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8.03
|
The
loan repaid in advanced may not be re-loaned except for a prior consent
of
the Loaner.
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| Article 9 |
Tax
and Expense
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|
9.01
|
The
stamp tax, attorney's fee, registration fee, premium and other fees
in
relation to or collected by the guarantee, government, insurance
company
and any other third party shall be paid by the Loanee and/or the
Guarantor. The Loaner shall be under no liability for the preceding
expenses (including any fees incurred by the guarantee in relating
to this
Contract).
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9.02
|
The
Loanee shall pay the Loaner the following fees according to the
requirement set forth thereby:
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|
(1)
|
Attorney’s
fees and other expenses incurred by the consultation, document processing
in relation to the loan, or the cost, expense and fee arising from
the
amendment, modification, revision or waiver of this Contract;
and
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|
(2)
|
All
costs, fees and expenses arising from maintenance or performance
of this
Contract or prevention of the overdue limitation of action.
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9.03
|
The
fees recovered by the Loaner to the Loanee shall not be levied interests.
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9.04
|
After
this Contract comes into effect, upon occurrence of any one of the
following circumstances arising from the change or enactment of any
law or
regulation, the Loanee shall, upon the requirement by the Loaner,
forthwith compensate the Loaner the relevant tax, fee, increased
cost or
reduced benefit:
|
|
(1)
|
any
tax or fee that should be paid, or has been paid, by the
Loanee;
|
|
(2)
|
cost
increased for execution of this Contract or assumption of liability
under
this Contract; or
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|
(3)
|
reduction
of benefit or actual benefit earned by the
Loaner.
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| Article 10 |
Guarantee
Measure
|
|
10.01
|
The
Loanee undertakes to use the following equity as the guarantee for
this
Contract:
|
Stand-by
letter of credit opened by Bank of China Zhejiang Branch
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10.02
|
Provided
that the Guarantor is involved in financial decline or falls in capacity
in repayment due to other reasons, the Loaner shall be entitled to
require
the Loanee to replace the Guarantor or provide new
pledge.
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| Article 11 |
Statement
and Commitment of the Loaner
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|
11.01
|
The
Loanee shall assume the duty to repay the loan pursuant to this Contract.
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11.02
|
The
Loanee shall irrevocably authorize the Loaner to deduct the expired
arrears from the account designated thereby.
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11.03
|
The
Loanee shall, within 90 days after expiration of each fiscal year,
submit
the financial statement, contemporaneously with international finance
data
of each half year, operating situation, financial report and annually
audited loan card, to the Loaner for examination.
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11.04
|
Without
the written consent of the Loaner, the Loaner may not take the following
actions:
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|
(1)
|
to
sell, assign, lease, lend, transfer, mortgage, pledge, or dispose
in other
ways, the important assets in whole or in
part;
|
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(2)
|
change,
or intend to change, the operating system or property form, including,
but
not limited to, lease on contract, joint management, reform pursuant
to
company law, reform under stock system, sales of company, merger,
joint
venture, split, establishment of subsidiary, property transfer,
application for bankruptcy, reduction of registered
capital;
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(3)
|
change
main officers;
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(4)
|
provide
guarantee to other debts;
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(5)
|
change
equity composition/shareholder, or transfer or pledge the equity
interest;
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(6)
|
return
the loan to shareholder and/or distribute dividend; or
|
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(7)
|
apply
to other financial institution for loan, other than the loan that
has been
known to the Loaner at the time of approval of the loan under this
Contract.
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| Article 12 |
Breach
of Contract and Responsibility
|
| 12.01 |
The
following circumstances shall be deemed breach of
contract:
|
|
(1)
|
The
Loanee (and or the Guarantor) violates any provisions set forth in
this
Contract and/or the guarantee contract related hereto or violates
any
provision set forth in the documents related
hereto;
|
|
(2)
|
Any
party participating in signature of any document in relation to the
loan
under this Contract violates any provision set forth
therein;
|
|
(3)
|
The
statement and promise made by the Loanee in this Contract is false,
untrue, inaccurate or misleading;
|
|
(4)
|
Any
approval or consent in relation to this Contract is certified invalid,
out
of legal force or is cancelled;
|
|
(5)
|
The
Loanee, after entering into this Contract, refuses to signed or provide
any document or situation in relation hereto or is in arrears of
any fee
payable thereby related hereto;
|
|
(6)
|
The
Loanee refuses the supervision and examination by the Loaner of the
use of
the loan and the operating situation and financial condition
thereof;
|
|
(7)
|
The
Loanee, without authority, changes the original purpose of the loan,
misappropriates the loan or applies the loan to illegal
act;
|
|
(8)
|
The
Loanee fails to repay the loan pursuant to the written notice sent
by the
Loner pursuant hereto;
|
|
(9)
|
The
Loanee violates any provision of this Contract.
|
|
12.02
|
Upon
occurrence of any one of the following circumstances with
the Loanee, the Loaner shall entitled to suspend the offer of loan
still
not used by the Loanee and recover the principal and interests in
whole or
in part in advance:
|
|
(1)
|
to
provide false material or conceal material financial
situation;
|
|
(2)
|
without
the authorization by the Loaner, to change the original purpose of
the
loan, misappropriate the loan or apply the loan to illegal
transaction;
|
|
(3)
|
to
refuses the supervision and examination by the Loaner of the use
of the
loan and the operating situation and financial condition of the
Loanee;
|
|
(4)
|
to
violate any other provision set forth in this Contract.
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| Article 13 |
Liability
of the Loaner
|
|
The
Loaner shall, pursuant to this Contract, offer the loan to the account
designated by the Loanee.
|
| Article 14 |
Recovery
Cost
|
|
Any
fee arising from the Loaner's recovery of loan from the Loanee shall
be
paid and undertaken by the Loanee.
|
| Article 15 |
Tolerance
and Division of Contract
|
| 15.02 |
All
rights, benefits and remedies specified herein are accumulative,
may be
adopted simultaneously or separately, no exclusion of any other
rights,
benefits or remedies set forth by the laws and regulations.
|
|
15.02
|
The
invalidity or failure of any provision hereof shall not have effect
on the
validity hereof and the guarantee contract related
hereto.
|
| Article 16 |
Transfer
and Inheritance/Success
|
| 16.01 |
Transfer
|
|
(1)
|
The
Loaner shall be entitled to transfer any right thereof under this
Contract
upon sending a written notice to the Loanee who shall assume to the
transferee all liabilities and responsibilities thereof to the Loaner
under this Contract.
|
|
(2)
|
Without
the prior written consent of the Loaner, the Loanee may not transfer
any
right or liability thereof under this Contract.
|
| 16.02 |
Inheritance/Success
|
Provided
that the Loanee is involved in the inheritance/success, such inheritor/successor
shall assume to the Loaner all liabilities and responsibilities of the Loanee
under this Contract.
| Article 17 |
Communications
|
|
17.01
|
Unless
this Contract otherwise requires, all communications and legal documents
under this Contract or in connection therewith shall be sent in writing
(including facsimile, telegram, telex and letter) to the address
designated by the recipient for the last time to the
sender.
|
|
17.02
|
If
any party hereto changes the address, such changing party shall notify
the
other party thereof in due time.
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|
17.03
|
Any
communication sent by the Loaner, the Loanee by facsimile, telegram,
telex
and hand deliveryshall be deemed service to the other party, upon
being
sent, if by mail, shall be deemed service 7 days later.
|
| Article 18 |
Miscellaneous
|
|
18.01
|
The
title of this Contract is set only for convenience and has no any
legal
force at the time of construction of this Contract.
|
|
18.02
|
The
attachments hereto are integral part hereof and shall be equally
authentic
with this Contract.
|
|
18.03
|
Unless
this Contract otherwise specifies, any amendment hereto shall be
approved
by both parties hereto in writing.
|
|
18.04
|
This
Contract shall become effect since being signed and sealed by both
parties
hereto.
|
|
18.05
|
This
Contract shall be executed in two copies, one for each party, each
of
which shall be equally authentic.
|
| Article 19 |
Applicable
Law and Governance
|
|
19.01
|
The
execution, construction and any dispute arising from or in connection
with
this Contract shall be governed by the Chinese Laws, if not applicable,
subject to the practices set forth by the International Commercial
Bank.
|
|
19.02
|
For
any dispute arising from or in connection with this Contract, any
party
hereto shall be entitled to refer to the court of the place in which
the
Loaner is located. Both parties hereto shall irrevocably accept the
jurisdiction of the court of the place in which the Loaner is
located.
|
|
19.03
|
During
the period of dispute, except the provisions under dispute, other
provisions under this Contract shall continue to be effective.
|
| Article 20 |
Other
Matters
|
| 21.01 |
Absent
temporarily.
|
(NO
TEXT
HEREUNDER)
Loaner:
Bank of China Limited Zhejiang Provincial Branch (seal)
Signature
by authorized representative: /s/ Sun Keping
Loanee:
Changxing Chisen Electric Co., Ltd.
Signature
by authorized representative: /s/ Xx Xxxxxxx
Date:
March 31, 2008
