Loan Contract Contract No.: SSY (Huanggang) Loan (2007) No. (C110340700242) Not Within the Line of Credit
LE
-
B -
2007 - 85
Contract
No.: SSY (Huanggang)
Loan (2007)
No. (C110340700242)
Not
Within the Line of Credit
Party
A
(“Borrower”): Long-e
Technologies (Shenzhen) Co., Ltd.
Address:
0X,
Xxxxxxxx X, Xxxxxx Xxxxxxxxxx Xxxx, Xxxxxx Xxxx, Shenzhen Hightech Industrial
Park
Party
B
(“Lender”): Shenzhen Commercial Bank- Huanggang
Branch
Address:
F1,
Jiahui New Building, Shennan Middle Road
This
Contract is made and entered into by and between Party A and Party B through
friendly negotiations in accordance with the Contract Law and other relevant
laws and regulations in respect of Party A’s application to Party B for
borrowing loans from Party B.
Article
1 The Loan
|
1.1
|
The
Loan Amount: RMB (in words) eight
million RMB.
|
|
1.2
|
The
Loan Purpose: working
capital.
|
|
1.3
|
The
Loan Repayment Term: 12
months.
|
The
actual amount of the loan and term thereof shall be that as specified in the
Promissory Note, subjecting to the provisions covenanted herein.
|
1.4
|
Interest
and Calculation and Payment Thereof
|
|
(1)
|
The
rate of interest on the Loan hereunder shall be 6.57%
per
annum. Interest
shall be calculated on the basis of the actual days of using the
Loan.
Daily interest rate = annual interest rate/360. Each 20th
day shall be the Interest Payment Date. The maturity date shall be
the
Final Interest Payment Date, on which interest shall be repaid with
principal.
|
|
(2)
|
If
after this Contract is executed, the national loan interest rate
is
adjusted or the method of calculation of the interest is changed
before
the Loan is made to Borrower’s account, Party B shall have right to adjust
the interest rate hereunder according to relevant national rules
without
otherwise notifying Party A thereof.
|
|
(3)
|
Party
B shall have right to adjust on quarterly basis the rate of interests
on
medium and long-term loans of above one (1) year in accordance with
the
adjustment of the national benchmark interest rate and particular
loan
risks.
|
|
(4)
|
During
the term of the Loan, in the event of any changes made by the national
authorities in the interest rate, manner of adjustment thereof and/or
method of calculation of interest, relevant rules stipulating such
changes
shall be implemented.
|
|
1.5
|
Fees
accrued from the Loan, including but not limiting to stamp duty,
costs of
communication and correspondences, post charges and information service
charges, shall be borne by Party A. Any such fees charged by Party
B for
the Loan shall not be refunded to Party A no matter whether Party
A uses
the Loan or not.
|
Article
2 Making the Loan
|
2.1
|
Before
making the Loan to the account of Borrower, Party B shall have
right to
review and audit the following matters and determine whether to
make the
Loan or not based on the result of its review and audit, which,
nevertheless, shall not constitute Party B’s
obligation.
|
|
(1)
|
Whether
all governmental approvals, licenses, registrations, deliveries
and other
procedures required by law in connection with the Loan hereunder
have been
obtained or fulfilled by Party A in accordance with relevant
laws and
regulations;
|
|
(2)
|
Whether
relevant guarantee contract has entered into
effect;
|
|
(3)
|
Whether
Party A has paid up any and all the fees in relating to this
Contract;
|
|
(4)
|
Whether
Party A has fulfilled the conditions of making the loan
as required by
Party B;
|
|
(5)
|
Whether
Party A and its Guarantor experience unfavorable changes
in their
operating and financial conditions;
and
|
|
(6)
|
Whether
Party A otherwise breaches this Contract.
|
|
2.2
|
In
the case that Guarantor requires to stop making the Loan, Party
B shall
suspend its issuance of loans to Party A.
|
|
The
notice of suspension of the Loan issued by Party B shall be deemed
as
served to Party A if it is delivered by registered mail to Party
A’s such
address as provided in this Contract. In the event that Party A
fails to
provide
satisfactory
guarantee within the period specified by Party B in its notice,
Party B
shall have right to cancel this Contract or declare earlier expiry
thereof.
|
| 2.3 | After making the Loan, Party B shall have right to supervise the use of it. |
Article
3 Repayment
|
3.1
|
Party
A shall make repayments hereunder in the following method:
|
|
|
| Installment repayment: interest shall be paid monthly; each sum of 500,000 RMB principal of the Loan shall be repaid monthly as of the next month after the Loan is made to Party A’s account; and the rest payments shall be paid up in one lump sum when the Loan is due. |
| 3.2 | Party A shall repay the principal of the Loan hereunder and pay interest thereon in full amount in a timely manner. Any sum of loan outstanding when it is due shall be taken as overdue loan if the term thereof is not agreed by Party B to be extended. In the case of any sum of overdue loan, Party B shall have right to require Party A to repay the Loan in full amount in advance and claim for penalty for late payment against Party A on the total amount of the Loan. |
| 3.3 | Party A hereby irrevocably authorizes Party B to withhold the due principal of each sum of the Loan and interest thereon and relevant fees in relating thereto from any account of Party A. If the money withheld is insufficient to satisfy all the due debts of Party A, it shall be used in priority to pay fees, then interest and finally principal. |
| 3.4 | Party A may make earlier repayment of the Loan after agreed by Party B. Party A shall give a seven (7) days prior notice to Party B of earlier repayment, which is irrevocable once it is confirmed by Party B. |
Article
4 Borrower’s Representations and Warranties
| 4.1 |
Party
A shall open account(s) in Party B and give priority to Party B in
depositing money and clearing
payments.
|
| 4.2 |
Party
A accepts and warrants to cooperate with Party B in supervising and
checking Party A’s operating conditions and use of the Loan, timely
provide to Party B with financial statements and other relevant materials
required by Party B, and guarantee the truthfulness, completeness
and
accuracy of the documents and materials provided.
|
| 4.3 |
The
credit to Party B shall be satisfied in priority to the credit to
Party
A’s shareholders.
|
| 4.4 |
Upon
the occurrence of any of the following circumstances, Party A shall
give a
30-day prior written notice to Party B and take no action before
paying
all the debts hereunder or providing to Party B with satisfactory
repayment plan and guarantee:
|
| (1) |
Party
A’s operating structure, organizational form and major business experience
material changes, including but not limiting to contract businesses,
leased operation, joint operation, stock transformation, merger and
acquisition, combination, joint venture (joint cooperative venture),
split, establishment of subsidiaries, sale of business, transfer
of
properties, reduction of capital, and shut down for subjectively
reason;
|
| (2) |
Party
A sells, gifts, rents, lends, transfers, mortgages (pledges), or
otherwise
disposes its important assets (mainly refer to fixed assets) of a
value
exceeding 10% of its net assets;
|
| (3) |
The
dividends distributed by Party A exceed 30% of its profits net of
tax;
|
| (4) |
The
outward investments made by Party A exceed 20% of its net
assets;
|
| (5) |
Party
A modifies the terms and conditions of its debts agreed with other
creditor, and repays other long-term debts in
advance;
|
| (6) |
Party
A repays its debts owed to its shareholders;
or
|
| (7) |
Party
A applies to other creditor for credit or provides guarantee to a
third
party, which involves an amount of debt exceeding 10% of its net
assets.
|
| 4.5 |
Within
seven (7) days as of the date the following event(s) occurs or might
occur, Party A shall give a written notice thereof to Party B and
work out
a specific solution to repayment of all the debts
hereunder:
|
| (1) |
Party
A or its Guarantor experiences deteriorating operating conditions
(as
caused, for example, by improper operation or management, or by heavy
losses);
|
| (2) |
Party
A or its Guarantor involves in serious action, or such mandatory
measures
as attachment are taken against the substantial assets of Party A
or its
Guarantor;
|
| (3) |
Party
A or its Guarantor provides guarantee to a third party, which produces
materially adverse influences upon Party A’s or the Guarantor’s financial
conditions or Party A’s capacity to fulfill its obligations
hereunder;
|
| (4) |
Party
A or its Guarantor winds up, reorganizes, dissolves, bankrupts, or
is
unlicensed;
|
| (5) |
Guarantor’s
operating structure and organizational form change
substantially;
|
| (6) |
The
value of the collateral apparently
decreases;
|
| (7) |
Party
A’s legal representative, address and/or telephone number changes;
or
|
| (8) |
Other
significant events that affects Party A’s operating
activities.
|
| 4.6 |
Party
A warrants to maintain a reasonable financial ratio during the term
of the
Loan.
|
Article
5 Default
| 5.1 |
Each
of the following events shall constitute an Event of Default as defined
in
this Article:
|
| (1) |
Party
A misappropriates the Loan for other
purpose;
|
| (2) |
Party
A delays the payment of principal or interest thereon or any fees
hereunder;
|
| (3) |
Party
A breaches its representations and warranties made
hereunder;
|
| (4) |
Party
A or its Guarantor shifts away properties or illegally withdraws
its
capital in order to evade payment of
debts;
|
| (5) |
Party
A breaches any terms or conditions of this
Contract;
|
| (6) |
The
legal representative or chief management of Party A or its Guarantor
involves in criminal cases; or
|
| (7) |
Party
A delays its performance of other contract entered into with Party
B or
other bank or otherwise breaches such contract.
|
| 5.2 |
Upon
occurrence of any Event of Default, Party B shall have right to take
the
following measures:
|
| (1) |
cease
making the unused sum of the Loan to Party A’s
account;
|
| (2) |
declare
earlier maturity of all the principals of the Loan already granted
hereunder and require Party A to immediately repay them together
with
interest thereon;
|
| (3) |
require
Party A to provide satisfactory guarantee;
|
| (4) |
inform
relevant entities of such Event of Default and release it on media;
and/or
|
| (5) |
other
remedies provided by laws and regulations.
|
| 5.3 |
If
Party A fails to pay any sum of principal of the Loan in full amount
in
time, Party B will charge penalty for late payment against Party
A at a
per annum interest rate equal to 50% above the interest rate specified
herein calculated upon such sum from and including the overdue date.
If
Party A fails to pay interest on the Loan in time, Party B will charge
compound interest against Party A at the interest rate of the penalty
for
late payment. If Party A fails to use the Loan for such purpose as
specified herein, Party B shall charge penalty for misuse of the
Loan
against Party A at an interest rate equal to 100% above the interest
rate
specified herein. Party A shall bear any and all the fees accrued
from
Party B’s realization of its credit (including but not limiting to fees
for payment calls, action or arbitration expenses, attorney fees,
account
transfer fees, travel expenses,
etc.).
|
Article
6 Other Covenants
Party
A warrants that: any follow-up audit of capitals and clearance of payments
in
foreign currency shall be performed with/at Party B’s place. If Party A breaches
this Article, Party B shall have right to claim back its loan in
advance.
Article
7 Miscellaneous Provisions
| 7.1 |
Party
B may transfer, fully or partially, its rights hereunder to any third
party and Party A acknowledges that Party B shall not be subject
to notify
Party A of such transfer. If Party A is required to perform its
obligations hereunder to the transferee, Party B will otherwise notify
Party A thereof.
|
| 7.2 |
Party
B shall have right to require for public notarization that is compulsorily
enforceable.
|
| 7.3 |
All
the debts of Party A hereunder shall be guaranteed by such guarantor
that
is acknowledged by Party B, subjecting to additional execution of
a
guarantee contract to be attached hereto.
|
| 7.4 |
The
Promissory Note hereunder and relevant documents and materials confirmed
by the Parties as related hereto shall be an inseparable part of
this
Contract.
|
| 7.5 |
Any
dispute in relating to this Contract shall be governed by the local
court
in jurisdiction of Party B. This Contract shall be governed by the
laws of
the People’s Republic of China.
|
| 7.6 |
This
Contract shall enter into effect after it is signed and stamped by
the
Parties’ respective legal representative or authorized representative. If
Party A fails to withdraw any sum of the Loan within three (3) months
after the Effective Date hereof, Party B shall have right to terminate
this Contract.
|
| 7.7 |
This
Contract is prepared in four copies. Party B will hold two copies
and
Party A will hold one copy.
|
| Borrower (Stamp) | Lender (Stamp) |
| Long-e Technologies (Shenzhen) Co., Ltd. | Shenzhen Commercial Bank - Huanggang Branch |
| Legal or Authorized Representative: | Legal or Authorized Representative: |
| (Signature) | (Signature) |
| Date of Signature: July 18, 2007 | Date of Signature: July 23, 2007 |
| Place of Signature: | Place of Signature: |
| /s/ Bu Shengfu | /s/ Zhang Zhengqing |
