Loan Agreement with Jinjiang Branch of Industrial Bank Co Ltd (No.:10417199-091126) for RMB4million
Exhibit
10.38
[English
translation for reference only]
Loan
Agreement with Jinjiang Branch of Industrial Bank Co Ltd
(No.:00000000-091126)
for
RMB4million
Article
1 Definitions and
interpretations
Unless
otherwise agreed in writing by both parties, the words and expressions of the
contract shall have the following definitions and interpretations:
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1.
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“Creditor’s
right”, or called main creditor’s right, is the creditor’s right in RMB
arising from the application by Borrower (debtor) to Lender (creditor) and
upon the review & approval by Lender, Borrower under this contract to
provide financing to Borrower (including the principal, interests, penalty
interests, compound interests, penalty, liquidated damages and the costs
incurred by the creditor in achieving its creditor’s right
etc.).
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Lender
and Borrower (hereinafter referred to as “the Parties”) agree and
acknowledge that, the creditor’s right of Lender against Borrower under
this contract corresponds to the debt of Borrower towards Lender under
this contract.
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2.
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“Costs
incurred in achieving creditor’s right” include, but not limited to, legal
costs, arbitration costs, property preservation costs, application
enforcement costs, attorney fees, costs for handling a case, advertising
costs, assessment costs, appraisal costs, auction costs, sale costs,
telecommunications charges , travel costs and disposal
costs.
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3.
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“Major
transaction” refers to in Article XIII of this contract means (including
but not limited to): any transaction identified or potential to take
place, which will seriously affect Borrower's company basic structure,
shareholders change, contingent liabilities, cash flow, profitability, the
company's core business secrets, the company’s core competitiveness, the
company’s important assets, and major credit and debt, debt-paying
ability, ability to fulfill this contract, or other transactions which
Lender and/or Borrower deem to constitute a major
transaction.
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4.
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“Major
event” refers to in Article XIII of this contract means (including but not
limited to): any event identified or potential to take place, which will
seriously affect the performance capacity of Borrower’s officers, the
employment and dismissal of employees engaged in core business, the
company’s core business secrets, the company’s core competitiveness, the
basic structure of the company, shareholders change, the company’s
contingent liabilities, the company’s existence, the legitimacy of company
engaging in business, company stability, company development, company
profitability, debt-paying ability, the company’s ability to perform this
contract, or other events which Lender and/or Borrower deem to constitute
a major event.
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5.
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“Working
day” refers to in this contract means the business day of Lender’s bank,
and in the performance of this contract, if a withdrawal or repayment day
is not on a business day, then it shall be postponed to the next following
business day accordingly.
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1
Article
2 Master Contract
This
contract is an individual contract of “Basic Facility Credit Contract” No.
10417199-081204 (i.e. the Master Contract), with credit facility equivalent to
XXX 00 million only, and credit is valid from December 4, 2008 to December 3,
2009. The amount of loan borrowed this time is charged to
credit facility provided by Lender.
Article
3 Loan Amount
Lender
agrees to give Borrower a loan in the amount of XXX 0 million only.
Article
4 Loan Purpose
The load
serves as Working Capital. Without the prior written consent of Lender, Borrower
shall not change the load purpose set forth in this contract.
Article
5 Loan Period
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1
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Loan
period is twelve months, from November 26, 2009 to November 25,
2010.
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2 As
for the load released at one-time, the release day shall be subject to the
actual release date recorded in loan IOU and loan vouchers. If the actual
release date is later than that recorded in the foregoing paragraph, then the
load due date shall be postponed accordingly.
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3
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The
gradual usage schedule for loan is as
follows:
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Month Date Year ,
RMB ;
Month Date Year ,
RMB ;
Month Date Year ,
RMB ;
Month Date Year ,
RMB ;
Month Date Year ,
RMB ;
Month Date Year ,
RMB ;
Borrower
shall give application to Lender for handling loan formality three working days
prior to each withdrawal date or in such other time required by Lender in
writing.
If
Borrower fails to withdraw loan in accordance with the gradual usage period as
agreed above, then Lender shall be entitled to require Borrower to
pay % of the loan
amount which shall be withdrawn in that period as compensation.
In the
event that the preconditions for releasing load stipulated in Article VII of
this contract are stratified, Lender will transfer the sums as agreed into
Borrower’s account gradually on the dates specified above.
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4
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Lender
has the right to make appropriate adjustment to the gradual usage schedule
for loan in consideration of the following factors: the compliance of the
loan with relevant laws, regulations and policies; the compliance of the
loan with the preconditions for releasing loan as required by Lender; the
execution of guarantee contracts corresponding to this contract and the
handling time of guarantee formalities as well as other factors Lender
deems necessary. If Borrower cannot meet the preconditions for releasing
loan as stipulated in this contract, Lender has the right stop releasing
loan or cancel this loan contract, and Borrower shall bear the
corresponding responsibilities for its breach of
contract.
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5
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The
loans gradually used shall have the same due date, in other words, the
loans released gradually shall have the same due date, namely, the due
date as determined by IOU or loan vouchers for the first released
loan.
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6
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Should
Lender collect loan in advance in accordance with the circumstances set
out in this contract, then the loan shall be deemed due earlier
accordingly.
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Article
6 Loan Interest Rate and Interest
Repayment
1. The
loan interest rates under this contract shall be (1):
2
(1) Fixed
interest rate, which is 5.31% per annum. If,
after the loan releasing day recorded in Article V of this contract and before
the actual releasing date of each loan, the national benchmark interest rate is
adjusted, then fixed interest rate shall be floated upward 0% or downward 0% of
the national benchmark interest rate in same condition at corresponding period
on the actually releasing date, namely, the actual interest rate is equal to the
national benchmark interest rate in same condition at corresponding period on
the actually releasing date multiplying by the coefficient of 1. During the loan
period, the fixed interest rate shall not be subject to the adjustment of
national benchmark interest rate.
(2)
Floating interest rate, which will be determined every
(month/quarter/half-year), and the interest rate per annum shall be floated
upward N/A% or downward N/A % of the national benchmark
interest rate in same condition at corresponding period, namely, the actual
interest rate is equal to the national benchmark interest rate in same condition
at corresponding period multiplying by the coefficient. The interest rate for
the initial loan shall be the national benchmark interest rate in same condition
at corresponding period on the actually releasing date multiplying by the above
coefficient, and the following interest rate shall be determined with the
national benchmark interest rate in corresponding condition at current period
multiplying by the above coefficient upon the expiry of every N/A
(month/quarter/half-year) from the actually releasing date.
Borrower
will not be informed of the adjustment in the national benchmark interest rate
during loan period.
(3) Other
interest rates: N/A
2. The
interest rate for the loans gradually used under this contract shall be
determined in accordance with the national benchmark interest rate in same
condition at corresponding period on the actually releasing date for each such
loan.
3. In the
event of the cancellation by the state of the benchmark interest rate, Lender
has the right to re-determine the interest rate for loan in accordance with
national interest rate policy at same period, in good faith and with reference
to the industry practice and the interest rate conditions. Should Borrower have
any dissent, it shall promptly consult with Lender. In case of failure to reach
an agreement through Consultation, Lender has the right to collect loan in
advance, and Borrower shall immediately settle the remaining principal and
interest of loan.
4.
Repayment for loan interest
The
repayment for loan interest shall be (1):
(1) The
20th day of each month (month/month at the end of a quarter) is agreed as the
interest settlement day in this contract. Borrower shall pay Lender the current
loan interest on the following day of interest settlement day, and shall pay
Lender the last interest on the due day for loan.
(2) All
loan interests will be paid by Borrower to Lender on due day for loan at
one-time.
(3) Other
repayment methods:
5.
Penalty interest and compound interest
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(A)
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If
Borrower fails to use loan in the purpose as agreed in this contract,
Lender has the right to charge penalty interest on the misused loan, and
the interest rate for penalty interest shall be floated upward 100% of the
interest rate for loan; Borrower fails to repay the loan as scheduled and
fails to reach an agreement with Lender on extension of loan, namely, the
loan is overdue, then Lender has the right to charge penalty interest on
the overdue loan, and the interest rate for penalty interest shall be
floated upward 50% of the interest rate for loan; as to the interest that
Borrower fails to repay on time, Lender has the right to charge compound
interest in accordance with the interest rate for penalty interest in
respect of overdue loan as agreed in this
contract.
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(B)
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As
to the loan with fixed interest rate, its penalty interest rate is fixed
interest rate, too; as to loan with floating interest rate, its penalty
interest rate is floating interest rate, and its floating period is the
same as that of the interest rate for
loan.
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3
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(C)
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The
method to charge penalty interest and compound interest is subject to the
repayment method for loan as agreed in this
contract.
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Article
7 Loan release and
repayment
1. Loan
release
Lender
will not release the loan under this contract to Borrower until Borrow has met
the following preconditions for releasing loan as required by
Lender:
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(A)
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Borrower
has served the following documents to Lender, and situations stated in
such documents have not changed and remain in force, or Borrower has made
explanation and clarification in respect of change to the satisfaction of
Lender;
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(1)
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Articles
of association and business license as confirmed by Borrower in writing,
signature sample of legal representative and members of board of directors
as registered and filed in the industrial and commercial administration,
capital verification report of Borrower, copy of ID card of the legal
representative, other company documents that Lender may deem
necessary;
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(2)
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The
true, legal and valid original copy of resolution of the board of
directors or shareholders meeting, which was held by Borrower in
accordance with legal procedures, and approved by the vote of a quorum of
the directors or shareholders in respect of the consent to applying the
load under this contract to Lender, in which expressly listing the loan
purpose and the acceptance to the loan conditions as required by Lender,
or other documents that Lender may deem
necessary;
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(3)
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The
annual financial reports and statements for the recent three year as
audited and acceptable to Lender, or other financial documents that Lender
may deem necessary;
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(4)
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If
the project in which the loan under this contract to be used shall be
reported for approval in accordance with the provisions or requirements of
state competent authorities, then Borrower has provided Lender with the
true and valid original copy of approval documents from state
authorities;
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(5)
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In
the event of guarantee from third party, articles of association and
business license as confirmed by guarantor in writing, signature sample of
legal representative and members of board of directors as registered and
filed in the industrial and commercial administration, the true, legal and
valid resolution made by the authorized body of guarantor in respect of
consent to providing guarantee for the loan under this contract, other
documents that Lender may deem
necessary;
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(6)
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Other
documents, statements, vouchers etc. as required by
Lender.
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(B)
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Borrower
has completed the IOU or vouchers in connection with this loan release.
IOU or vouchers form an integral part of this contract, and have the equal
legal effect with this contract. In case of discrepancy between this
contract and IOU or vouchers in respect of loan amount, loan period and
loan interest rate, then IOU or vouchers shall
prevail.
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(C)
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The
statement and commitment made by Borrower in Article IX under this
contract shall remain true and valid; there is no default event or
potential default event on or before the withdrawal
date.
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(D)
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In
the case of mortgage/pledge, Borrower has handled the mortgage/pledge
formalities properly in accordance with relevant laws and regulations.
Borrower has, in accordance with the requirements of Lender, provided the
original copy of authority documents and registration documents etc for
Lender to receive and keep; in case of guarantee from third party, such
guarantee has come into effect. Such guarantee shall remain in
force.
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(E)
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If
Lender requires Borrower to effect insurance for pledge, then Borrower has
properly handled the insurance formalities with Lender as the first
beneficiaries and has provided the original copy of insurance policy for
Lender to receive and keep; such insurance policy shall remain in
force.
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(F)
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If
Lender requires Borrower to handle notary formalities etc, then Borrower
has done that properly.
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4
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(G)
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Borrower
has opened an account in Lender’s bank as required, and has paid the
related costs under this contract as required by
Lender.
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(H)
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Other
conditions for releasing loan as required by
Lender.
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The above
conditions’ being met is the precondition for Lender to perform its obligations
under this contract. As to the above preconditions for releasing loan, Lender
has the right to unilaterally lower or waive some of them, Borrower or guarantor
shall not defense Lender in respect thereof. After the loan principal under this
contract has been transferred by Lender, the loan shall be deemed having been
released to Borrower, which shall be borne interest from the transferred
date.
2. Loan
repayment
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(A)
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The
repayment method for the loan principal under this contract shall be
(1):
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(1) All
loan principal will be repaid on the due date for loan at one-time.
(2) The
load principal will be repaid in installment, and amount and date to repay
principal are as follows:
Month Date Year ,
repaid RMB ;
Month Date Year ,
repaid RMB ;
Month Date Year ,
repaid RMB ;
Month Date Year ,
repaid RMB ;
Month Date Year ,
repaid RMB ;
Month Date Year ,
repaid RMB ;
If Lender
adjusts the gradual usage schedule for loan, then loan repayment date as agreed
for loan installment repayment keeps unchanged, and Borrower shall repay the
loan principal as scheduled.
(3) Other
methods to repay the loan principal:
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(B)
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Borrower
shall repay the loan principal and interest under this contract to Lender
on the repayment date and interest settlement date as agreed in this
contract in full amount and on time. If Borrow fails to do so, Lender has
the right to, in accordance with bank accounting rules and in the order
provided in Lender’s internal provisions, to withhold the costs and loan
principal and interest payable by Borrower from any accounts opened by
Borrower in Lender’s bank or all branches within Lender’s
system.
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(C)
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In
the event that the repayment day is not a business day of Lender, then the
repayment will be postponed to the following business day of Lender, and
the non-business day of Lender will be included in the actual occupation
days of loan. When repaying the last loan principal and interest, Borrower
shall repay the loan and interest at one-time, and shall not be bound by
the interest settlement day as agreed in Article
VI.
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(D)
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In
the event that Borrower cannot repay the loan under the loan contract as
schedules and needs extension for repayment, Borrower shall submit Lender
the formal written request for extension for repayment 10 business days of
Lender prior to the due day of that loan. If Lender reviews and approves
such request, the Parties will sign a separate "Loan Extension Contract"
to serve as a supplementary contract of this
contract.
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Article
8 Guarantee
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1.
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The
following contracts serve as the guarantee contract to this
contract:
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(A)
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No.gk-20081126002
“Maximum Mortgage Contract” (contract name), its guarantee method is
mortgage, and its guarantor is Guanke (Fujian) Electronic Technology Co
Ltd
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(B)
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No.
10417199-091126GEDAN-1 “Personal Guarantee Statement” (contract name), its
guarantee method is surety, and its guarantor is Tin Man
Or.
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5
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(C)
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No.
10417199-091126GEDAN-2 “Personal Guarantee Statement” (contract name), its
guarantee method is surety, and its guarantor is Xxx Xxxx
Or.
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2.
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Before
the guarantee contracts under this contract have been signed and come into
force/guarantee formalities have been handled properly, Lender has the
right to suspend the performance of its obligations under this contract,
such as releasing loan.
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Article
9 Borrower’s statement and
commitment
Borrower
is voluntary to make the following statement and commitment, and holds
responsibilities for the authenticity of the same:
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1
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Borrower
is legal representative established under the laws of People’s Republic of
China and validly existed, with full civil ability. Borrower undertakes
that it will provide relevant evidences, permits and certificates as
required by Lender as well as other documents that Lender may request from
time to time.
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2
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Borrower
is competent to perform all obligations and responsibilities under this
contract, and its settlement responsibility shall not be released or
discharged as a result of any orders, changes in financial position and
any agreements entered into between Borrower and any third
party.
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3
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Borrower
has sufficient power, authority and legal right to sign this contract, and
Borrower has obtained and executed all of its internal approval and
authorization or other related formalities necessary for the execution and
performance of this contract, and has obtained and executed all approvals,
registrations, authorizations, consents, permits and other related
formalities from any necessary governmental agencies or other authorities
necessary for the execution and performance of this contract, and all
approvals, registrations, consents, permits and authorizations and other
related formalities necessary for the execution of this contract remain
fully legal and effective.
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4
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The
execution by Borrower of this contract fully complies with Borrower’s
article of association, internal decisions and the resolution of
shareholders and board of directors. This contract does not conflict with
or is contrary to any of Borrower’s article of association, internal
decisions, and the resolution of shareholders and board of directors as
well as Borrower’s policy.
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5
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The
execution and performance of this contract is based on Borrower's true
intention, and the above execution and performance does not violate any
laws, rules, regulations or the provisions under this contract which bind
upon Borrower. This contract is legally valid and enforceable. If this
contract becomes null and void as a result of defect of rights in the
execution and performance of this contract by Borrower, then Borrower will
immediately and unconditionally compensate all losses suffered by
Lender.
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6
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All
documents, financial statements and other information provide by Borrower
under this contract to Lender is true, complete, accurate and valid, and
continue to maintain the financial indices required by
Lender.
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7
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Borrower
agrees that the loan business under this shall be bound by the
requirements and practices of Lender, and shall be interpreted by
Lender.
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8
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If
Borrower fails to fulfill its obligations in accordance with this
contract, Borrower hereby authorizes Lender to directly collect sums from
any account opened by Borrower in Lender’s bank or within Lender’s
system.
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9
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Notwithstanding
any transaction stage after the execution of this contract, if Borrower
submits any documents in connection with specific transactions to Lender
for review, Borrower shall ensure the authenticity of all documents, and
Lender will only make decision for the apparent authenticity of the
transaction documents. Lender neither participates nor knows the substance
of the specific transactions engaged by Borrower, nor bears any
responsibility.
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6
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10
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Borrower
acknowledges that, in addition to circumstances already disclosed to
Lender in writing, Borrower has not concealed any following event which
have occurred or is about to occur and which may make Lend not agree to
release the loan under this
contract:
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(A)
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The
debt or contingent liabilities borne by Borrower, including but not
limited to, any mortgage, pledge, lien and other debt burden on Borrower's
assets or income which have not disclosed
Lender;
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(B)
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Major
event in breach of discipline or laws or claim by others in connection
with Borrower or Borrower’s key management
staff;
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(C)
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Borrower’s
default events in debt-creditor’s right contracts between Borrower and any
other creditors;
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(D)
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Any
litigation, arbitration or administrative proceedings, which occurs to
Borrower, or which is pending, or which is likely to occur to Borrower or
Borrower's property as known to Borrower, and liquidation or winding up or
other similar procedures against Borrower, whether filed by Borrower or
any third party;
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(E)
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Other
circumstances that may affect Borrower’s financial position and liquidity
ability.
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11
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Borrower
undertakes to use the loan in the purposes as agreed in this contract, and
will not misuse the loan or use the loan in any other purposes in
violation of this contract. Borrower will from time to time accept and
cooperate with the supervision, inspection and inventory by Lender on
Borrower’s usage of loan fund and Borrower’s production and operation,
financial activities, materials inventory, assets and liabilities, bank
deposits, cash inventory etc, or other requirements that Lender may deem
necessary or appropriate.
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12
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Borrower
shall provide valid guarantee in full amount as recognized by Lender, or
other guarantee that Lender may deem appropriate and
acceptable.
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13
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Borrower
shall not in any way reduce the registered capital. Without the prior
written consent of Lender, Borrower shall not assign the debt under this
contract to any third party in part or in full. Without the written
consent of Lender, Borrower shall not pay off any debt between Borrower
and other creditors in advance before the debt under this contract has
been paid off.
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14
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In
the event of litigation, arbitration or other dispute between Lender and
Borrower or any third party in connection with Borrower as a result of the
performance by Lender of its obligations under this contract, which
results in that Lender has to be involved in the dispute between Borrower
and any third party, then Borrower shall bear all the litigation or
arbitration costs or lawyer’s fees etc. suffered by Lender
therefrom.
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15
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Borrower
shall handle all settlement business under this contract through the
settlement account opened by Borrower in Lender's
bank.
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Article
10 Rights and obligations of the
Parties
1. Rights
and obligations of Lender
(A)
Rights of Lender:
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(1)
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Lender
has the right to require Borrower to repay the loan plus interest and
costs on scheduled;
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(2)
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Lender
has the right to require Borrower to provide information related to
loan;
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(3)
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Lender
has the right to know Borrower's production and operations and financial
position;
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(4)
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Lender
has the right to supervise Borrower to use the loan in the purposes as
agreed in this contract;
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(5)
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In
the event that the loan under this contract is used in the construction of
project, Lender has the right to supervise the project progress and
propose recommendations and
requirements;
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(6)
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Lender
has the right to directly collect loan principal and interest and other
related costs from Borrower’s
account;
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7
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(7)
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Lender
has the right to transfer at any time the creditor’s rights under this
contract and the guarantee benefit to third party in whole or in part
without Borrower's consent. In the event that Lender transfers the loan
and guarantee benefit under this contract, Borrower shall remain to assume
all its obligations under this contract.
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(8)
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If
Borrower cannot repay the loan principal and interest in accordance with
this contract or cannot carry out the repayment of loan principal and
interest, Lender may disclose the same to the Credit Information Center of
the People’s Bank of China or news media, and may take recovery,
litigation or arbitration etc. legal
measures.
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(9)
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Lender
has the right, in accordance with the obligations imposed on Lender by the
mandatory or directive requirements and guidance from bank administration
and supervision body, the guidance and practice from the national and
local banking industry association, to take appropriate measures against
Borrower, without prior notice to Borrower and without the need to seek
written consent from Borrower.
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(10)
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Lender
has the right to be entitled to other rights under laws, regulations,
rules or under this contract.
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(B)
Obligations of Lender:
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(1)
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Lender
shall release loan to Borrower in accordance with this
contract;
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(2)
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Lender
shall keep the confidentiality of Borrower's debt, finance, production,
operating position, except for those otherwise provided, directed and
ordered by laws, regulations or judicial agencies and regulatory
bodies.
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2. Rights
and obligations of Borrower
(A)
Borrower has the following rights:
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(1)
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Borrower
has the right to withdraw and use all the loans in accordance with this
contract;
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(2)
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Borrower
has the right to require Lender to keep confidentiality of the information
provided by Borrower in accordance with this
agreement.
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(B)
Obligations of Borrower
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(1)
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Borrower
shall provide the true documentation as required by Lender as well as the
information on all deposit banks, accounts and balance of deposit/loan,
and shall cooperate with Lender's survey, review and
inspection;
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(2)
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Borrower
shall accept Lender’s supervision on Borrower’s usage of credit funds and
production & operation and financial activities; in the event that the
loans under this contract is used in the construction of project, Borrower
shall cooperate with Lender’s supervision and inspection on project, and
shall promptly take reasonable treatment measures against Lender’s
suggestions and requirements;
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(3)
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Borrower
shall use the loan in accordance with the purposes as agreed in this
contract, and shall not misuse the loan, and shall not use the loan to
engage in equity investments; shall not use the loan in illegal
speculative trading of securities, futures, real estate, etc.; shall not
use the loan to engage in the mutual borrowing/lending activities between
enterprises and other illegal activities restricted by the state; shall
not otherwise misappropriate or misuse loan in other
way;
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(4)
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Borrower
shall repay the loan principal and interest in full and on time in
accordance with the contract;
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(5)
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Without
the prior written consent from Lender, Borrower shall not transfer the
debt under this contract to third party in whole or in
part;
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(6)
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Borrow
shall bear expenses of costs in connection with this contract, including
but not limited to, the cost incurred in notary, appraisal, evaluation,
registration etc, and the costs incurred by Lender in achieving its
creditor’s right;
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(7)
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Borrower
shall not in any way reduce its registered
capital;
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8
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(8)
|
In
the following cases, Borrower shall obtain the prior written consent of
Lender, and shall actively, in accordance with Lender’s requirements,
carry out the measures to ensure the repayment of loan principal and
interest and costs under this contract in full amount, otherwise, Borrower
shall be deemed in default, then Lender has the right to take early
collection of loan etc in accordance with Article XII of this
contract:
|
|
(i)
|
In
the event that Borrower applies for loan against third party (such as
banks) in the amount more than RMB , or
Borrower’s total debt is more than
RMB , or Borrower provides a loan to
third party in the amount more than
RMB , or Borrower provides guarantee
for the debt of third party in the amount more than
RMB ;
|
|
(ii)
|
Borrower
conducts major change in assets and property rights as well as the
adjustment in operation manner and key management staff (including but not
limited to, signing joint venture or cooperation contact with foreign
businessmen or businessmen from Hong Kong, Macao and Taiwan; remove,
close, shutdown, change the line of production; division, merger,
acquisition, being merged, being acquired; reorganized, organized or
converted into a incorporated company; become a shareholder or invest in
an incorporated company or company with the fixed assets, such as house,
machinery and equipment, or with the intangible assets, such as trademark,
patent, proprietary technology, land use rights, or conduct property
rights and operations rights transactions by lease, contracting, joint
management, trust etc; the change of key management staff
etc.).
|
|
(iii)
|
If
Borrower conducts the change of equity (including but not limited to,
equity transfer, trust, administration, pledge, etc.), Borrower shall
inform Lender on a timely manner, and when the change in equity reaches
at %, Borrower shall obtain prior written
consent from Lender.
|
|
|
(9)
|
In
the following events, Borrower shall promptly inform Lender, and shall
actively, in accordance with Lender’s requirements, carry out the measures
to ensure the repayment of loan principal and interest and costs under
this contract in full amount:
|
|
(i)
|
Significant
financial loss, loss of assets or other financial
crisis;
|
|
(ii)
|
Wind-up,
business license being suspended or cancelled, file or being filed for
bankruptcy or dissolution;
|
|
(iii)
|
Major
crisis in the operation or finance of its controlling shareholder and
other affiliated company, affecting its normal
operation;
|
|
(iv)
|
Personnel
change in Borrower’s legal representative, directors or key officers,
affecting its normal operation;
|
|
(v)
|
Major
related transactions between Borrower and its controlling shareholder and
other affiliated company, affecting its normal
operation;
|
|
(vi)
|
Any
litigation, arbitration or criminal, administrative penalties, which will
bring significant adverse consequences to its operation or financial
position;
|
|
(vii)
|
Other
major issues that may affect the solvency of
Borrower.
|
|
(10)
|
Borrower
undertakes to maintain current asset and net asset value
within , to maintain the ratio of
assets and liabilities within , to
maintain the asset liquidity ratio
within .
|
|
(11)
|
As
to the collection letters or collection documents sent or otherwise served
by Lender, Borrower shall sign in and deliver the return receipt to
Lender.
|
|
(12)
|
Borrower’s
business under this contract shall be independent, and shall not be
affected by the relations between either party of this contract and third
party, except for those otherwise agreed in this
contract.
|
Article
11 Prepayment
|
1
|
If
Borrower requests to prepay the loan principal and interest in whole or in
part, it shall give Lender 15 working days prior written
notice, and shall obtain the written consent from Lender. Lender has the
right to require Borrower to pay % of the
prepaid loan amount as
compensation.
|
9
|
2
|
With
the consent of Lender, after Borrower prepays loan principal and interest
in part, Borrower shall consult with Lender to determine the future
repayment installments, time and amount. The prepaid loan principal shall
be charged interest in accordance with the actual usage period and the
loan interest rate as agreed in this contract. Lender makes no adjustment
to the loan interest charged before the
prepayment.
|
|
3
|
Without
the prior written consent of Lender, if Borrower prepays the loan under
this contract, Lender has the right charge interest in accordance with the
loan terms and interest rates as agreed in this
contract.
|
Article
12 Advance collection of loans
1 During
the loan period, if Borrower or guarantor (namely the warrantor or mortgagor or
xxxxxxx under this contract) commits one of the following acts, Lender has the
right to unilaterally decide to stop releasing loan not used under this
contract, and collect in advance the loan principal and interest in whole or in
part. As to the loan repaid in installment, if Lender collects in advance one
installment of loan therein under this contract, then the other undue loan may
be deemed as due in advance:
|
(A)
|
Borrower
provides false materials or conceals important operation and financial
facts, and any evidence and documents submitted by Borrower to Lender and
any of statement and commitment made by Borrower in Article IX of this
contract prove to be untrue, inaccurate, incomplete or intentionally
misleading;
|
|
(B)
|
Without
the consent of Lender, Borrower changes the original usage of loan,
misuses loan or uses loan to engage in illegal or improper
transactions;
|
|
(C)
|
Through
the false contracts between Borrower and related parties, Borrower
discounts or pledges in Lender’s bank, or defrauds Lender’s funds or
credit with the notes receivable and accounts receivable without actual
trade background;
|
|
(D)
|
Borrower
refuses to accept Lender’s supervision and inspection on its use of credit
funds as well as operation and financial
activities;
|
|
(E)
|
Major
mergers, acquisitions and reorganizations etc., which in the opinion of
Lender may affect the safety of
loan;
|
|
(F)
|
Borrower
intentionally escapes the creditor’s right of Lender through related party
transactions;
|
|
(G)
|
Borrower’s
credit position deteriorates, and Borrower’s solvency (including
contingent liabilities) significantly
weakens;
|
|
(H)
|
The
cross-default situations as stipulated in Article XV of this contract is
found in Borrower or Borrower's affiliates and the guarantor or the
guarantor’s affiliates;
|
|
(I)
|
Borrower
fails to repay the principal, interest and costs of any financing under
this contract as scheduled;
|
|
(J)
|
Borrower
stops repaying its debts, or is unable or indicates unable to repay the
due debts;
|
|
(K)
|
Borrower
winds up, closes its business, is declared bankrupt, is dissolved, is
revoked its business license, is cancelled, involves in significant
economic disputes, or financial position
deteriorates;
|
|
(L)
|
Borrower
fails to perform the obligations as agreed in Articles X and XIII as well
as other obligations as agreed in this contract, or the guarantor fails to
perform its obligations under the guarantee
contract;
|
|
(M)
|
The
value of pledge or mortgage serving as guarantee has reduced or may
significantly reduce, or the rights of pledge must be exercised prior to
the expiry the loan;
|
|
(N)
|
Other
events which may jeopardize or damage or likely to jeopardize or damage
the interests of Lender.
|
|
2
|
In
the case of collecting loan in advance, Lender is entitled to take
corresponding measures in accordance with the second paragraph of Article
XIV of this contract.
|
10
|
Article
13
|
Borrower’s
obligation to disclose major transactions and events to
Lender
|
In any of
the following cases, Borrower shall promptly disclose the same in writing to
Lender, and shall, at the request of Lender, cooperate with Lender to take
ensuring measures for loan, pay off or carry out debt repayment:
|
1
|
Borrower
shall promptly report to Lender in writing the major transactions or
events undergone by the applicant.
|
|
2
|
If
Borrower is a group client, then Borrower shall, in accordance with
relevant provisions, timely report to Lender the related party
transactions in the value more than 10% of Borrower’s net assets,
including but not limited to:
|
|
(A)
|
The
related relation of the parties to the
transaction;
|
|
(B)
|
The
substance and nature of
transaction;
|
|
(C)
|
The
amount of transaction or the corresponding
ratio;
|
|
(D)
|
The
pricing policies (including transaction without amount or with nominal
amount only ).
|
|
3
|
During
the validity period of this contract, if Borrower intends to conduct share
transfer, reorganization, merger, division, joint-stock reconstruction,
joint venture, cooperation, joint operation, contracting, leasing, change
in business scope and the registered capital, transfer of major assets,
contingency liabilities etc., or conduct any matters that may affect or
seriously affect its ability to bear responsibilities, then Borrow shall
give thirty calendar days prior written notice to
Lender.
|
|
4
|
If
Borrower winds up, closes its business, is declared bankrupt, is
dissolved, is revoked its business license, is cancelled, financial
position deteriorates or involves in significant economic disputes, or the
occurrence of other major events that may affect or seriously affect
Borrower’s ability to bear responsibilities, then Borrow shall inform
Lender in writing within seven calendar days from the occurrence
thereof.
|
|
5
|
When
there is major litigation or arbitration cases between Borrower and any
third party, or when there is other major event which may affect or
seriously affect Borrower’s ability to bear responsibility, then Borrower
shall inform Lender in writing within seven calendar days from the date of
receipt of such notice.
|
|
6
|
Borrower
undertakes that it shall not take advantage of the legal dispute between
Borrower and any third party (including the dispute on basic trade
contract) as the grounds to jeopardize creditor’s right of
Lender.
|
Article
14 Defaults
1 After
this contract comes into force, both Borrower and Lender shall perform their
obligations under this contract. Either party who fails to perform or fails to
fulfill its obligations under this contract, shall bear corresponding
responsibilities for its defaults.
|
2
|
If
Borrower fails to perform any provision of this contract, then Lender has
the right to take one or more of the following
measures:
|
|
(A)
|
May
cure the defaults within a definite
time;
|
|
(B)
|
May
stop releasing the unreleased loan under this
contract;
|
|
(C)
|
May
unilaterally decide the early due of debt in whole or in
part;
|
|
(D)
|
May
unilaterally terminate this contract, require Borrower to pay off loan
principal and interest whether due or undue, and pay or compensation for
the relevant costs;
|
11
|
(E)
|
If
the loan is overdue, then Borrow may require Borrower to pay the penalty
interest for overdue; if Borrower misuses loan, then Lender may require
Borrower to pay the penalty interest for misuse; Lender may require Borrow
to pay compound interest for unpaid
interest;
|
|
(F)
|
May
require Borrower to add or replace guarantees, mortgage, pledge/pledge
right;
|
|
(G)
|
May
carry out or achieve any rights under the guarantee in respect of
loan;
|
|
(H)
|
May
withhold and collect loan principal and interest from any accounts opened
by Borrower in Lender’s bank (except for those public welfare accounts,
such as public accumulation fund, labor union fees,), or entrust deposit
bank of Borrower account to withhold and collect loan principal and
interest from such accounts, including but not limited to, loan principal
and interest, the costs stipulated in this contract. If the sums in such
account and loan are in different currencies, Lender is entitled to pay
off loan principal and interest by conversion such sum into loan currency
at the listed price for Lender to buy foreign exchange on the date Lender
makes withholding and
collection.
|
|
(I)
|
If
Lender files litigation or arbitration to require Borrower to pay off loan
principal and interest, then Borrower shall bear the costs incurred by
Lender in achieving creditor’s
right.;
|
|
(J)
|
Lender
is entitled to seize or lien Borrower’s any movable or immovable, tangible
or intangible property under the control and possession of Lender, or take
other measures that Lender may deem
appropriate;
|
|
(K)
|
Other
measures provided under laws and regulations or this contract or that
Lender may deem appropriate.
|
|
3
|
If
Borrower suffers loss as a result of Lender’s failure to provide loan in
accordance with the date and amount as agreed, Lender shall compensate
Borrower for the direct economic losses arising therefrom. However, in no
case Lender shall hold any compensation responsibility for any foreseeable
or unforeseeable indirect losses suffered therefrom by the
Borrower.
|
|
4
|
If
the guarantor (namely the warrantor or mortgagor or xxxxxxx) under this
contract commits one of the following acts, then Lender has the right to
take measures in accordance with paragraph 2 of this
Article:
|
|
(A)
|
The
guarantor fails to perform the guarantee contract, or the guarantor’s
credit deteriorates, or the occurrence of events which weaken the
guarantee ability;
|
|
(B)
|
The
mortgagor fails to perform mortgage contract, or mortgagor intentionally
damages mortgage, or the value of mortgage may be or has been
significantly reduced, or other events that may jeopardize the mortgage
rights of Lender;
|
|
(C)
|
The
xxxxxxx fails to perform pledge contract, or the value of pledge has been
or may be significantly reduced, or the pledge rights must be exercised
prior to loan settlement, or other events that may jeopardize the pledge
right of Lender.
|
Article
15 Cross-defaults
Borrower
or Borrower's affiliates and the Guarantor or the Guarantor’s affiliates commit
any of the following acts, the Borrower shall be deemed as in breach of this
contract, and Lender has the right to collect loan in advance in accordance with
Article XII of this contract, and may require Borrower to bear default
responsibilities in accordance with Article XIV of this contract:
|
(A)
|
Any
loan, financing or debt which has occurred or may occur defaults, or may
be declared due in advance;
|
|
(B)
|
The
nonperformance of any guarantees or similar obligations, or there is the
possibility of
nonperformance;
|
|
(C)
|
Failure
to perform or violate legal documents or contracts in respect of debt
guarantee and other similar obligations, or there is the possibility of
nonperformance or violation;
|
|
(D)
|
Present
or is about to present insolvent for debts due or loan/financing
due;
|
12
|
(E)
|
Has
been declared or are about to be declared bankrupt by the legal
process;
|
|
(F)
|
Transfer
its assets or property to other
creditors;
|
|
(G)
|
Other
circumstances that jeopardize safety of principal and interest under this
contract.
|
Article
16 Continuity of obligations
All
obligations in the IOU under this contract shall be of continuity, and shall
have full and equal bonding force to its heirs, agents, receiver, assignee and
subject after merger, restructure, change in name.
Article
17 Acceleration terms for the due date of
principal, interest and costs
Borrower
and guarantors agree that, if Borrower fails to perform the statement and
commitment in Article IX under this contract, or Borrower fails to perform any
of its obligations under this contract, then Lender has the right to decide that
any other obligations of Borrower against Lender, including the repayment
obligation for all due and undue principal, interest (including penalty interest
and compound interest) under this contract plus corresponding cost, will be
immediately due.
Article
18 Arrangement for priority
subrogation
Borrower
hereby states that, if Borrower is in default or Borrower fails to repay the
debt due, including principal, interest and costs, and Borrower does not have
sufficient property to repay its debt, then Lender have priority subrogation for
Borrower’s any creditor’s right against third party, receivables and other
property entitlement.
Article
19 Offset arrangement
If the
debt is due in advance as a result of the failure of Borrower or guarantor to
perform debts due or their violation of this contract, then Lender has the right
to directly withhold and transfer the sums in any account of Borrower to repay
the debt. When Lender withholds and transfer sums in Borrower’s accounts, if the
sums in such accounts and main debt are in different currencies, Lender is
entitled to make conversion at the listed price as issued for Lender to buy
foreign exchange on that date.
Article
20 Applicable laws, jurisdiction and dispute
resolution
1
The laws of the People’s Republic of China shall be applicable to the entering
into, coming into force, performance, cancellation and dispute settlement of
this contract.
|
2
|
Any
dispute arising from this contract shall be settled by Borrower and Lender
through friendly consultation; if failed, the Parties agree to adopt (1)
for resolution:
|
|
(1)
|
File
litigation against the people's court where Lender is located. Litigation
costs, reasonable attorney’s fees and other litigation costs produced in
litigation process, including but not limited to, property preservation
costs, travel expenses, notary certification costs, translation fees,
assessment and auction costs, shall be borne by the losing
party.
|
|
(2)
|
Refer
the dispute to the arbitration committee for arbitration, and the dispute
shall be awarded in accordance with its current arbitration rules when
referring dispute for arbitration. The arbitral award is final and binding
on the Parties. The venue of the arbitral tribunal for hearing is
at .
Arbitration costs, reasonable attorney’s fees and other arbitration costs
produced in arbitration process, including but not limited to, property
preservation costs, travel expenses, notary certification costs,
translation fees, assessment and auction costs, shall be borne by the
losing party.
|
|
(3)
|
Other
methods:
|
|
3
|
The
terms of this contract not involving the dispute shall still be
performance pending litigation or
arbitration.
|
13
Article
21 Correspondences, communications and
notices
1 Any
correspondences, communications and notice under this contract shall be in
writing, and shall be served by either party to the other party in accordance
with address, fax number or other contact recorded on the cover of this
contract.
|
2
|
If
the above contact of either party has changed, then that party shall
without any delay notify the other by any swift means. If either party
fails to promptly notify the other party, and the other party still serves
documents, communications and notices to the original address, then all
consequences arising thereby shall be borne by the party who fails to
notify the other party.
|
|
3
|
Any
documents, communications and notices sent to above address shall be
deemed to be served on the following
dates:
|
|
(A)
|
As
to letter, five working days after sent by registered
mail;
|
|
(B)
|
As
to telex, on the date receiving answer confirmation from the other
party;
|
|
(C)
|
If
delivered by hand, on the date signing in by the
recipient.
|
|
4
|
The
Parties agree that, common seals, office seals, financial seals, contract
seals, sending and receiving seals of the Parties and Lender's credit
business seal are the valid seal for correspondences, communications and
notices between the Parties. All staff of Borrower shall be the valid
staff for signing and receiving the correspondences, communications and
notices between the Parties
|
Article
22 Contract force and miscellaneous
1
This contract comes into force from the date signed or stamped by the
Parties.
2
During the validity period of this contract, no tolerance,
indulgence or delay the exercise of the rights and benefits under this contract
by Lender to Borrower or the guarantor, shall prejudice, affect or limit all the
rights and benefits which Lender may have in accordance with relevant laws and
regulations as well as this contract, shall be deemed as Lender’s waive of
rights and benefits under this contract, shall affect any of Borrower’s
obligations under this contract.
3
If at any time, any terms of this contract is or becomes illegal,
invalid or unenforceable in any respect, the legality, validity and
enforceability of other terms of this contract shall not be not affected or
impaired.
|
4
|
The
heading of this contract is inserted for the convenience of read only, and
shall not be used for the interpretation of this contract or any other
purpose.
|
|
5
|
The
annex of this contract form an integral part of this contract, and shall
have the equal legal effect with contract
text.
|
|
6
|
This
contract is made in duplicate, and Lender and Borrower each keep one copy
with the same legal effect.
|
Article
23 Notary and voluntary to accept mandatory
enforcement
|
1
|
Should
Lender require notarization, this contract shall be notarized in public
notary as stipulated by state.
|
2 A
notarized contract has mandatory enforcement effect. In the event Borrower fails
to repayment debt or in the case in which Lender could achieve its creditor’s
rights in accordance with laws, regulations and this contract, Lender has the
right to request direct mandatory for the people's court having
jurisdiction.
14
Article
24 Supplemental provisions
|
Lender
(official
seal): Signed
by or on behalf of (signature and seal):
|
|
Industrial
Bank Co Ltd Jinjiang Branch
|
|
November
26, 2009
|
|
Borrower
(official
seal): Signed
by legal representative or on behalf of (signature and
seal):
|
|
Tin
Man Or
|
|
Guanke
(Fujian) Electron Technological Industry Co Ltd
|
|
November
26, 2009
|
Signature
and guarantee have been checked in the presence of relevant
parties.
15
