The Loan Contract
Exhibit
10.14
The
Loan
Contract
The
contract number: N32101200800018108
The
borrower (full name): Danyang Xxxxx Electron Ltd.
The
lender (full name): Agriculture Bank of China Danyang
branch
According
the laws and regulations of the State, both parties come to an
agreement.
First
Term The
Loan
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1.
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The
loan type: General business operation
fund
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2.
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Loan
purpose: purchase steel material
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3.
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Loan
currency and amount (in capital): RMB, 4.8 million
yuan
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4.
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Loan
term
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(1)The
loan term is based on the following table:
(Table)
Release
May
27,
2008
Amount:
4.8 million
Due
date:
May 20, 0000
Xxxxxx:
4.8 million
(The
item
on the table is not enough can add additional table as part of the
contract.)
(2)When
the loan amount, release date and due date indicated under the contract is
different from what is in the loan certificate, the loan certificate will
prevail. The loan certificate is part of the contract with the same legal
effect.
(3)
When
the loan is borrowed in the foreign currency, the borrower should pay off the
interest and principal of the loan in the original currency.
5.
Interest Rate
The
RMB
interest rate is based on the following first
method:
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(1)
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Floating
rate
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The
loan
rate is 30%
above
floating
of the prime rate. The executed annual interest rate : 9.711%, for the loan
of
five year term below (including five year), the interest rate is the prime
rate
announced by the Chins People’s Bank at the current period. For the loan of five
year term above, the interest rate is the prime rate announced by the Chins
People’s Bank at the current period plus _____ percent.
The
rate
adjustment is based on one
month as
a cycle. When the prime rate is adjusted by the China People’s Bank, starting
from the first moth of the loan corresponding date of next cycle when the prime
rate is adjusted, the lender can base on the prime rate after adjustment in
the
corresponding date and the calculation method above to execute the loan rate
without notice. If the prime rate adjustment date and the loan release date
or
the corresponding loan date of first month of such cycle falls on the same
date,
starting from the prime rate adjustment date, it should confirm the new loan
rate. If there is no loan corresponding date, the last day of such month would
consider as the loan corresponding date.
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(2)
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Fixed
interest rate
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The
loan
rate is the prime rate of ______ (above/below) floating ____%, the executed
interest rate ____% until the loan due date. For the loan of five year term
below (including five year), the interest rate is the prime rate announced
by
the Chins People’s Bank at the current period. For the loan of five year term
above, the interest rate is the prime rate announced by the Chins People’s Bank
at the current period plus _____ percent.
The
foreign currency loan rate should base on the following ____
method:
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(1)
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The
interest rate difference of ____ month ____(LIBOR/HIBOR) + ______
%, which
base on ____ months of floating interest rate. LIBOR / HIBOR is the
London
/ Hong Kong market call rate in the corresponding period of two working
days prior to the interest calculation date announced by Reuters
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(2)
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The
executed interest rate ___-% until the loan due
date.
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(3)
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Other
method
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6.Interest
Payment Calculation
The
loan
interest under the contact is calculated monthly
(month/season). The payment calculation date is on the 20th
of each
month
(month/
end of month of each quarter). The borrower should pay interest on that date.
If
the last paid-off date of the loan principal is not on the payment calculation
date, the unpaid interest should be paid along with the principal (daily
interest rate:30/ monthly interest rate)
Second
Term
If the
following conditions are not met, the lender has the right not to provide the
loan under the contract:
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1.
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The
borrower opens a general
account at the lender.
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2.
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As
per request of the lender, the borrower should provide related document,
information and complete all the related
processes.
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3.
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If
the loan under the contract is in foreign currency, as per request
of the
lender, the borrower has to complete the approval, registration and
related processes.
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4.
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If
the loan under the contract has collateral or pledge, all the legal
process related to the registration and or insurance have been completed
as per lender’s request and the collateral and pledge are continuously
valid. If the loan under the contract has guarantee, the guarantee
contract has been sign and be
valid.
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Third
Term Lender’s
rights and responsibilities
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1.
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The
lender has the right to understand the borrower’s business operation,
financial activities, inventories and loan purpose and request the
borrower to provide documents and information such as financial reports
according to the schedule.
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2.
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When
the situations but not limited to 7th,
8th
and 10th
items under fourth Term happened to the borrower that can affect
the loan
security, the lender can stop releasing the loan or get the loan
back
earlier.
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3.
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For
any agreed returned payment or early payment of principal, interest,
penalty, compound interest and other payable the borrower, the lender
can
directly charge from any of the borrower’s
accounts.
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4.
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The
payment from the borrower that is not sufficient to pay off the payable
amount under the contract, the borrower can choose to use such payment
to
pay off principal, interest, penalty interest, compound interest
and
expenses.
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5.
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If
the borrower does not fulfill the payment obligations, the lender
can
disclose such default to the
public.
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6.
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According
to the contract as agreed, the loan can be released to the
borrower.
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Fourth
Term Borrower’s
rights and responsibilities
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1.
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Have
the right to obtain and use the loan according the
contract.
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2.
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Based
on the account which has been agreed on the Second Term to process
all and
settle and deposit for the loan under the
contract.
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3.
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If
the loan is in foreign currency, the related approval, registration
and
other legal processes should be completed according to the
regulations.
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4.
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When
the borrower pays the interest and principal on time and needs to
postpone
the payment, the borrower should submit the payment delay application
in
writing 15 days before the payment is due. Upon the approval from
the
lender, both parties can sign the
agreement.
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5.
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The
loan should be used based on the agreed purpose. No appropriation
of the
loan.
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6.
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Provide
the borrower each month with the accurate, complete and valid financial
reports and other related information and actively accommodate the
borrower’s inspection of its business operation, financial activities and
usage condition of the loan under the
contract.
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7.
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When
the borrower has sub-contract, lease, changes in shareholding, joint
venture, merger, acquisition, split off, transfer of assets, applying
for
shutting down, dissolution, revocation, bankruptcy, changes in holding
shareholders or anything affect the lender to fulfill its creditor’s
rights, they should notify the lender in writing in advance and get
lender’s approval. At the same time, it should fulfill the creditor’s
rights to pay off the debt or pay off the debt in advance; otherwise
the
above can not be implemented.
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8.
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Other
than the actions mentioned above, some of the importantly negative
situations happen to the borrower and affect its ability to fulfill
the
loan obligation, such as obsolesence, going out of business, revocation,
business license suspended, the legal representative or the person
in
charge has some illegal activities, involving large legal dispute
or
arbitration, production difficulty or financial deterioration, the
borrower should inform the lender in writing and make sure to implement
the protection measures of creditor’s rights.
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9.
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The
borrower provides the guarantee for other person’s debts or uses its main
properties as the third party’s collateral or pledge, which can affect its
ability to pay off the debt under the contract, the borrower should
notify
the lender in writing in advance to get the approval from the
lender.
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10.
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The
borrower and its investors can not hide the capital, transfer assets
or
transfer shares at their own xxxxx in order to avoid the debts to
the
lender.
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11.
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Any
changes in names, legal representative, address and business coverage
should notify the lender
immediately.
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12.
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When
the guarantor for the contract is out of business, obsolete, revocation,
business license suspended, bankruptcy, loss in the operation, lost
part
or entire guarantee capability, or lost value in the collateral or
pledge,
the borrower should provide other types of collateral or pledge as
approved by the lender.
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13.
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The
borrower is responsible for all the expenses occurred by the guarantee
under the contract such as legal service fee, insurance, transportation,
evaluation, registration, custody, identification and notary.
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Fifth
Term Early
Repayment
When
the
borrower makes early repayment, the borrower should get the approval from the
lender first and, once the lender agrees, the early repayment part should be
based on the following second
methods
to calculate the interest: (three methods)
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1.
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Based
on the loan term under the contract and the agreed interest rate
to
calculate the interest.
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2.
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Based
on the agreed interest rate under the contract above floating Zero
%.
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Sixth
Term Default
Responsibilities
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1.
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The
lender does not release enough amount of loan as agreed and as schedule
to
the borrower which causes the loss of the borrower, the penalty should
be
paid to the borrower based on the amount of default and the number
of days
of delay. The calculation of the penalty is the same as the loan
past due
calculation.
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2.
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When
the borrower did not return the principal as schedule under the contract,
the lender will charge the penalty of the past due amount starting
from
the date of past due based on the executed interest rate of the contract
above floating fifty
per cent until the principal and interest have been paid off. During
this
period of time, if the loan is borrowed in RMB and it happens that
the
China People’s Bank has adjusted the prime rate up, the penalty interest
rate should be raised accordingly from the date of interest rate
adjustment.
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3.
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When
the borrower did not follow the agreed loan purpose to use the loan,
the
part that does not follow the agreed loan purpose will be charged
the
penalty interest starting from the date of default based on the executed
interest rate of the contract above floating one
hundred
per cent until the principal and interest has been paid off. During
this
period of time, if the loan is borrowed in RMB and it happens that
the
China People’s Bank has adjusted the prime rate up, the penalty interest
rate should be raised accordingly from the date of interest rate
adjustment.
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4.
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For
the unpaid interest, the lender should be charged with the compound
interest rate based on the rules of China People’s Bank. The unpaid
interest includes the unpaid interest occurred during the course
of the
loan (including the penalty for the default of loan purpose) and
the
unpaid interest occurred by the past due (including the penalty for
the
past due and the default of loan purpose). The unpaid interest occurred
during the course of loan, it should base on the executed interest
rate
under the contract to calculate the compound interest. Starting for
the
due date of the interest, the compound interest rate should be
calculated.
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5.
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If
the borrower violates the responsibilities of the contract, the lender
has
the right to correct such default, stop releasing the loan, collect
the
released loan earlier, announce the other loan contracts between
the
borrower and lender due immediately or take other asset project measures
accordingly.
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6.
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Any
of the guarantors for the loan under the contract violates the agreement
under the guarantee contract, the lender has the right to stop releasing
the loan, collect the released loan earlier or take other asset project
measures accordingly.
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7.
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Due
to the borrower’s default which causes any litigation and arbitration, the
borrower is responsible for all the expenses such as attorney’s fees,
travel expenses and other expenses in order to release the credit’s rights
entailed by such default of the
borrower.
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Seventh
Term The
Loan
Guarantee
The
guarantee under the contract is using maximum
amount of guarantee.
Another
guarantee contract should be signed. If the maximum amount of guarantee has
been
used, the guarantee contract number is No 32905220700002755.
Eighth
Term Dispute
Resolution
In
the
event of any dispute during the course of the loan, both parties can resolve
the
dispute by the following first
method:
1.
Litigation. The prosecution will take place at the People’s court located at the
lender’s address.
2.
Arbitration. Submit to _____
(the
full name of the arbitration institution) based on the current arbitration
rules
at the time of arbitration.
During
the arbitration and litigation, any parts under the contract that are not
involved in the dispute are still valid.
Ninth
Term Others
The
loan
is guaranteed by two guarantee contracts: No 3290520070002755 and No.
32110313901200806 with maximum amount of guarantee.
[Loan
certificate]
Agriculture
Bank of China
321200800110770
Date:2008/5/21
Borrower:
Xxxxxx Xxxxx Electron Ltd.
[ID]
00000000-7
[Loan
Account Number]
[Loan
Type]The general business operation funds
[Loan
Purpose] Purchase steel material
[Loan
Contract Number] No 32101200800018108
[Guarantee
Contract Number] No 3290520070002755
[Loan
Date] May 21, 2008
[Loan
Due
Date] May 20, 2009
[Deposit
account number] 10322901040001897
[Amount]
RMB four million and eight hundred thousand yuans
(¥
4,800,000)
(Table)
Repayment
registration
Year/Month/Date/
Principal
returned amount
Interest
rate
Interest
returned amount
Remaining
principal
The
person in charge
Made
by:
Approved
by:
