LOAN AGREEMENT
Exhibit
10.19
This
Loan
Agreement (hereinafter the "Agreement") is made as of June 12, 2008, by and
between Danyang Lihua Electron Co., Ltd (hereinafter the "Borrower"), and Bank
of Jiangsu Danyang Branch (hereinafter the "Lender").
For
the
purpose set forth in Article 2.1, the Borrower is borrowing from the Lender,
and
the Lender is lending to the Borrower. In order to confirm the rights and
obligations of the parties, and in accordance with the Contract Law, the General
Rules on Loans and the related laws and regulations, the parties hereby mutually
agree as follows:
| 1. |
Type
|
| 1.1 |
The
types under the Agreement are the short term/ the mid and long term
liquid
capital/ the fixed asset
borrowings.
|
| 2. |
Purpose
|
| 2.1 |
The
purpose under the Agreement is for the liquid
capital.
|
| 2.2 |
Without
the written consent of the Lender, the Borrower shall not alter the
purpose of loans under the
Agreement
|
| 3. |
Facility
and Maturity
|
| 3.1 |
The
Borrower is borrowing for the amount of RMB Ten Million (RMB10,000,000)
(the “Facility”)
|
| 3.2 |
The
Facility hereunder are for the period of months, starting from June
15,
2008 to September 15th , 2008.
|
| 3.3 |
The
Facility set forth in Article 3.2 shall be an entirely one-time drawdown
by the Borrower. The actual drawdown date (the “Actual Drawdown Date”) and
the repayment due date (the “Actual Due Date”) are set forth in the
borrowing note as the bank wire transferring date. The borrowing
note and
the loan drawdown certificate constitute an undividable part of this
Agreement. Except for the aforementioned dates, in the event of any
conflict between the Agreement and such note and certificate, this
Agreement shall control.
|
| 4. |
Interest
Rate and Calculation
|
| 4.1 |
The
monthly interest rate hereunder is seven point forty seven percent
(7.47%)
(the interest rate for the mid and long term borrowing is calculated
yearly in compliance with the regulations of the People’s Bank of China
(the “PBC”)). The Interest shall be accrued per month from the Actual
Drawdown Date, and the interest settlement date is the 20th
day of every month (the 20th
day of every month/ the 20th
day of the last month of every quarter). The payment of the principal
and
the accrued interest shall be made in full when
due.
|
| 4.2 |
If
PBC adjusts the interest rate applicable to the interest rate hereunder
when the Agreement is effective, the Lender, without any notice to
the
Borrower, may adjust the interest rate and the calculation hereunder
accordingly.
|
| 5. |
Source
and Schedule of Repayment
|
| 5.1 |
The
Borrower’s source of repayment of the principal and the accrued interest
is including but not limited to business
incomes.
|
| 5.2 |
Notwithstanding
the Borrower’s other agreement related to the source of repayment with
other third parties, its performance of the repayment obligation
hereunder
shall not be affected. Under no circumstance shall the Borrower apply
Article 5.1 to reject performing its repayment obligation under this
Agreement.
|
| 5.3 |
The
Borrower shall repay the accrued interest and the principal in full
in
accordance with the schedule set forth in the
Agreement.
|
| 5.4 |
On
the date before the agreed interest settlement date or principal
repayment
date hereunder, the Borrower shall deposit the full amount of the
accrued
interest due by the schedule or the principal to its account opened
at the
Lender, and authorize the Lender to directly withdraw the repayment
from
the aforementioned account on the agreed interest settlement date
or
principal repayment date.
|
| 6. |
Guarantee
|
| 6.1 |
The
loan hereunder is guaranteed by guarantors (the
“Guarantor”)
|
| 6.2 |
The
Borrower is obligated to assist the Lender and cause the Guarantor
to
enter into the guarantee agreement with the Lender.
|
| 6.3 |
Shall
any change occur to the guarantee hereunder and cause any adverse
effect
to the Lender, with the Lender’s notice; the Borrower shall provide other
guarantees acceptable for the
Lender.
|
| 7. |
Rights
and Obligations
|
| 7.1 |
The
Borrower’s rights and obligations:
|
| 7.1.1 |
The
Borrower shall draw down and execute the Facility in accordance
with the
agreed schedule and purpose set forth in the
Agreement.
|
|
7.1.2
|
Without
the Lender’s written consent, the Borrower shall not prepay the
Facility
|
| 7.1.3 |
The
Borrower shall represent and warrant the authenticity, the accuracy
and
the entirety of the information provided for the Lender’s credit
review.
|
| 7.1.4 |
The
Borrower shall acknowledge and agree the Lender’s investigation, inquiry,
and supervision to its compliance with the purpose
hereunder.
|
| 7.1.5 |
The
Borrower shall actively cooperate with the Lender’s inspection, inquiry
and supervision with regard to its production, business operation
and
financial condition; and is obligated to provide the relevant periodic
income statement and balance sheet.
|
| 7.1.6 |
The
Borrower shall repay the principal and the accrued interest in accordance
with the Agreement.
|
| 7.1.7 |
The
Borrower shall assume all relevant expenses arising out of and related
to
this Agreement, including but not limited to notary, appraisal, and
registration fees.
|
| 7.1.8 |
The
Borrower shall sign and receive the collection letters or collection
documents sent by the Lender, and send the return receipt to the
Lender
within three days after receiving such letters and
documents.
|
| 7.1.9 |
Shall
the Borrower carry out outsource, lease, conversion to share-holding
system, co-operating business, merger, acquisition, joint venture,
split,
capital reduction, change in share-holding, material asset transfer
and
other actions could affect the Lender’s rights and interests hereunder, it
should send the thirty-day written notice to the Lender. Without
the
Lender’s written consent, the Borrower shall not carry out the
aforementioned actions before it repay borrowings hereunder in
full.
|
| 7.1.10 |
The
Borrower shall send the written notice to Lender within seven days
after
any change in its business address, correspondence address, business
scope
, legal representative and other business registration
items.
|
| 7.1.11 |
In
the case any event affecting the Borrower’s ordinary business operation or
causing material adverse effects to the performance of the Borrower’s
repayment obligations hereunder, including but not limited to the
material
economic dispute, bankruptcy, worsening financial condition occurs,
the
Borrower shall send written notice to the Lender
immediately.
|
| 7.1.12 |
In
case the Borrower ceases operation, is dissolved, ceases management
or is
abolished business license, the Borrower shall send written notice
within
five days after the occurrence of the aforesaid events, and warrants
to
immediately repay the principal and the accrued
interest.
|
| 7.2 |
The
Lender’s rights and obligations:
|
| 7.2.1 |
The
Lender may request the Borrower to provide all information related
to the
Agreement.
|
| 7.2.2 |
The
Lender, in accordance with the Agreement, related laws and regulations,
is
entitled to withdraw the principal, the accrued interest, the compound
interest, the punitive interest and other expenses occur hereunder
from
the Borrower’s accounts.
|
| 7.2.3 |
In
the event the Borrower avoids the Lender’s supervision, does not repay the
principal and the accrued interest on schedule, or materially breach
the
Agreement, the Lender is entitled to apply credit sanction to the
Borrower, to report to the competent authority and to conduct public
collection via news media.
|
| 7.2.4 |
The
Lender shall provide the Facility to the Borrower on schedule in
accordance with the Agreement.
|
| 7.2.5 |
The
Lender shall maintain the confidentiality of the Borrower’s debt, finance,
production, operation and other relevant information, except as otherwise
provided in the Agreement, and relevant laws and
regulations.
|
| 8. |
Breach
|
| 8.1 |
After
the Agreement becomes effective, the parties shall be obligated to
perform
in accordance with the Agreement. Any party breach or partially breach
its
obligations hereunder shall be liable for the
default.
|
| 8.2 |
In
the event the Borrower is not in compliance with the Article 3.3
to draw
down, the Borrower shall pay the Lender the delay penalty equals
to the
interest herein on the daily basis.
|
| 8.3 |
In
the event the Lender is not in compliance with the Article 3.3 to
provide
the Facility, the Lender shall pay the Borrower the delay penalty
equals
to the interest herein on the daily
basis.
|
| 8.4 |
In
the case, without the Lender’s written consent, the Borrower prepay
borrowings hereunder, the Lender is entitled to collect the interests
in
accordance with the schedule and the interest rate hereunder.
|
| 8.5 |
In
the event of default in the payment of the principal and the accrued
interest when due as herein provided, the Lender is entitled to demand
the
Borrower to repay the full amount of the outstanding loan within
a limited
time, to set off the outstanding borrowings against the Borrower’s any
account opened at the Lender and to receive the default interest
against
the unpaid principal on the rate of X of ten thousand percent (0.0X%)
per
day and the compound interest against the unpaid
interest.
|
| 8.6 |
In
the event the Borrower is not in compliance with the purpose hereunder,
the Lender is entitled to demand a part or entire borrowings or early
terminate the Agreement, and to receive the default interest against
the
amount of the borrowings against the purpose on the rate of X of
ten
thousand percent (0.0X%) per day and the compound interest against
the
unpaid interest.
|
| 8.7. |
In
case the default set forth in Article 8.5 and Article 8.6 occur
simultaneously, the Lender may only opt the heavier one, and not
apply
both Articles.
|
| 8.8 |
In
the event any of the following occurs, the Borrower shall amend it
and
adopt actions the Lender may accept within seven days upon the Lender’s
notice, otherwise the Lender is entitled to early demand the Borrower
to
repay a part or a whole amount of the borrowings. In the case the
Borrower
fails to repay, the Lender may demand the penalty calculated by the
default interest rate on daily
basis.
|
| 8.8.1 |
The
Borrower provides false or hides material balance sheet or income
statement and other related financial
information.
|
|
8.8.2
|
The
Borrower does not cooperate with or refuse the Lender’s supervision
related to purpose hereunder and production, business operation and
financial condition.
|
| 8.8.3 |
Without
the Lender’s consent, the Borrower transfers or disposes, or threatens to
transfer or dispose its material
assets.
|
| 8.8.4 |
The
material or whole assets of the Borrower are possessed by other creditors,
or are assigned to a trustee, or are taken over by receivers or the
like
persons, or its assets are distrained or freezed, and the aforementioned
conditions could cause the Lender material
lost.
|
| 8.8.5 |
Without
the Lender’s consent, the Borrower agrees to carry out outsource, lease,
conversion to share-holding system, co-operating business, merger,
acquisition, joint venture, split, capital reduction, change in
share-holding, material asset transfer and other actions could affect
the
Lender’s rights and interests.
|
| 8.8.6 |
The
Borrower changes its business address, correspondence address, business
scope, legal representative and other business registration items,
or
carries out material investments that severely affect or threaten
the
Lender’s rights and interests
hereunder.
|
| 8.8.7 |
The
Borrower engages in material economic dispute, or its financial condition
worsens to cause material adverse effects or threatens the Lender’s right
hereunder.
|
| 8.8.8 |
Any
other condition that could cause material adverse effects or threaten
the
Lender’s rights and interests
hereunder.
|
| 9. |
Effectiveness,
Modification, Cancellation and Termination of the
Agreement
|
| 9.1 |
The
Agreement shall become effective after the legal representatives
or the
authorized persons of the parties sign and affix personal seals and
corporate seals, and shall be terminated after the principal, the
interest, the compound interest, the punitive interest, the penalty
and
other costs and expenses are
repaid.
|
| 9.2 |
In
the case any of the following occurs, the Lender may cancel the Agreement
and demand the Borrower for early repaying the principal and the
interest
and compensating its lost:
|
| 9.2.1 |
In
case the Borrower ceases operation, is dissolved, ceases management
or is
abolished business license
|
| 9.2.2 |
The
guarantee provided herein occurs adverse changes, and the Borrower
is not
able to provide other guarantees as the Lender
demands.
|
| 9.2.3 |
Any
other material breach of this
Agreement.
|
| 9.3 |
If
the Borrower requests to roll over the Facility, it should submit
a
thirty-day written application before the maturity date of this Agreement
to the Lender and the Guarantor’s written agreement of continuing to
provide guarantee; after the Lender reviews and consents to the
application and the roll-over agreement is signed by and between
the
parties, the roll-over of the Facility shall be effective. This Agreement
shall be continuing valid and effective until the parties sign the
roll-over agreement.
|
| 9.4 |
After
the Agreement becomes effective, except as otherwise provided herein,
either party shall not early terminate this Agreement, if it is necessary
to modify or terminate the Agreement, the parties shall reach a written
agreement. The agreement remains valid and effective before the written
agreement is reached.
|
| 10. |
Dispute
Resolution
|
| 10.1 |
Any
dispute arising out of or related to this Agreement shall be negotiated
by
the parties, if the dispute is not able to be solved through negotiation,
it shall be solved in accordance with Article
10.1.2.
|
| 10.1.1 |
Solved
via Arbitration.
|
| 10.1.2 |
The
dispute shall be submitted to and tried by the court, in which the
Lender
resides.
|
| 11. |
Other
Covenant
|
(N/A)
| 12. |
Appendix
|
| 12.1 |
The
appendixes of this Agreement shall constitute an undividable part
of the
Agreement, and shall have the same legal effect as the
Agreement.
|
| 12.2 |
While
the Agreement is effective, if any drawdown date or repayment date
falls
on a non bank business day, it shall be deferred to the next bank
business
day.
|
| 12.3 |
This
agreement is to be written up in two original copies with the Borrower
and
the Lender. Each party shall hold one original copy, which shall
have same
legal effects.
|
The
Borrower: Danyang Lihua Electron Co., Ltd
Xxxx
Representative (or authorized person)
The
Lender: Bank of Jiangsu Danyang Branch
Xxxx
Representative (or authorized person)
Date
:
June 12, 2008
