Exhibit 99.1
(English Translation)
LOAN AGREEMENT
Contract No. 'Shenfa Changcheng' 20051117002
[ ] Not within credit limit
[X] Within credit limit - Consolidated facilities reference No:
'Shenfa Changcheng' 20051107001
Lender (Party A): Shenzhen Development Bank Limited - Changcheng Branch
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Address: 0/X, Xxxxx X,Xxxxxxxxx Xxxx, Xxxxxxxx Xxxxx Xxxx
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Tel: 0000 0000 Fax: 00000000
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Person in charge: Xxxxxx Xxxx Designation: Branch Director
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Borrower (Party B): Shenzhen Digitainment Co., Ltd.
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Address: 23/F, Huaqiang Jiahe Building A, Xxxxxxx Xxxxx Road, Futian District
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Tel: 00000000 Fax: 00000000
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Person in charge: Xxxx Xx Designation: Managing Director
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Party B applied to Party A for a loan, and Party A agreed to grant this loan
after proper examination. In accordance with the relevant rules and regulations,
Party A and Party B negotiated and hereby agreed unanimously to enter into this
agreement, and to abide the terms and conditions as stipulated herein.
ARTICLE 1. The Loan
1. Loan Amount: (Currency): RMB
(in word): Twenty Million (20,000,000)
2. Term of the loan: One year.
Calculation of the term of the loan is as follow:
The term of the loan should be counted from the day when the loan amount is
actually drawn and the day of drawn down should be based on the loan receipt.
3. Interest rate
(1) The interest rate for RMB loan should be applied as follow: (please tick
one as appropriate)
[X] The interest rate for this loan is fixed and the rate is 5.58%.
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[ ] The interest rate for this loan is floating, and the rate is the
Peoples' Bank base rate + ___________ (floating point), change every
_________ (month/quarter/year), __________(1st month/1st quarter/1st
year) loan interest rate is _____________.
(2) The interest rate for foreign currency loan should be applied as follow:
(please tick one as appropriate)
[ ] The interest rate for this loan is fixed and the rate is ___________.
[ ] The interest rate for this loan is floating, and the rate is the
Party A's best lending rate + ___________ (floating point), change
every _________ (month/quarter/year), __________(1st month/1st
quarter/1st year) loan interest rate is _____________.
4. Usage of the loan
The purpose of the loan should be as 1 below.
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(1) Working capital
(2) Revolving loan (repayment of matured loan), i.e. to repay loan under
Contract No. ______________________.
(3) Others, ________________________________________________________.
ARTICLE 2. Draw Down Of The Loan
1. This loan should be released to Party B in one (time/phase). Phases should
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be arranged as follow:
First phase _____________________________________________,
Second phase _____________________________________________,
Third phase _____________________________________________,
Fourth phase _____________________________________________.
The maturity of the aforesaid loan amount released in phases should be based
on the same maturity date as the loan released in the first phase.
2. When the loan is drawn down, a loan receipt should be completed in accordance
with the terms of this agreement.
ARTICLE 3. Loan Interest Payment
1. Interest will be accrued on the date when actual amount of loan is drawn down
and is based on the actual term of the loan. Accrued interest should be
settled as stipulated in 1 below:
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(1) To be settled monthly and on the 20th day of each month.
(2) To be settled quarterly and on the 20th day of each quarter end.
(3) To be settled annually and on the 20th day of December each year.
2. Party B should pay the interest on the settlement day. Party A has the right
to deduct the interest payment directly from the bank account maintained by
Party B with Shenzhen Development Bank. If Party B defaults in paying the
interest due, Party A is entitled to charge exact interest on the unpaid
interest.
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ARTICLE 4. Repayment of Loan Principal
1. Part B should repay the loan principal in full upon maturity. In case that
Party B fails to repay the loan as scheduled, a one-month notice should
be given to Party A and negotiation with Party A should be conducted in
respect of the detailed plan for principal repayment.
2. If Party B intends to repay the loan principal prior to its maturity, a
7-day notice should be given to Party A in order to obtain Party A's
approval. In case of early repayment, Party A has the right to charge Party
B one month extra interest on the repaid loan principal. If the earlier
repayment date is less than one month to maturity, the interest will be
charged to maturity.
3. Party B irrevocably authorizes Party A to deduct any accrued interest due
and payable from Party B's bank account maintained with Shenzhen Development
Bank.
4. If Party A and Party B agreed on repayment by installment, details of
Party B's installment payment should be: ___________________________________
_____________________________________________________________________________
____________________________________________________________.
ARTICLE 5. Penalty and Interest on Interest
When there is default in repayment or misappropriation of loan principal,
interest and interest on interest should be accrued according to the following
calculation: (tick where appropriate)
[X] For fixed interest rate loan upon maturity, if Party B defaults, Party
A has the right to impose an extra interest charge up to 50% of the
interest rate as stipulated in this agreement. If Party B fails to utilize
the loan proceeds on the specified purpose, Party A has the right to impose
from the day when the funds are being misused an extra interest charge up
to 100% of the interest rate as agreed in this agreement.
[ ] For floating interest rate loan upon maturity, if Party B defaults,
Party A has the right to impose an extra interest charge up to _______% of
the agreed floating interest rate, while the interval of interest rate
change and calculation remain unchanged. If Party B fails to utilize the
loan proceeds on the specified purpose, Party A has the right to impose
from the day when the funds are being misused an extra interest charge up
to _____% of the floating interest rate as agreed in this agreement.
For overdue accrued interest, penalty interest will be imposed on the unpaid
overdue interest.
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ARTICLE 6. Early Expiry of the Loan
When any one of the following situations occurs, the loan under this agreement
should be deemed to have expired and matured prior to its original terms. Party
A has the right to call for immediate repayment of the loan principal and to
stop releasing any loan amount not drawn.
1. Party B is in breach of any obligations under this agreement, or
Party B admits or reveals from its behavior that it will not fulfill
its obligations;
2. Party B is forced to or voluntarily cease operation;
3. Party B has provided false information or disguised material
operation and financial facts;
4. Party B incurs financial loss;
5. Loan plan of Party B is canceled or unable to implement;
6. Party B deceives Party A or other banks for capital or credit
through false contracts with affiliates and discount or impawn of
notes receivable without actual trade;
7. Party B intentionally renounces bank debts through affiliate
transactions or other methods;
8. Party B has committed illegal operation and activities and is
under administrative punishment or is under investigation by the
relevant department, which may result in administrative punishment;
9. Party B is in the situations of dissolution, merger, liquidation,
reorganization, cancellation of registration, declared bankruptcy,
etc;
10. Party B changes the usage of the loan without prior approval from
Party A, or misappropriates the funds, or uses the loan in illegal or
unlawful transactions;
11. Party B breaches the agreement signed with Party A or other
similar contracts signed with other third party, or resulting in any
lawsuit or arbitration due to disputes from such contracts;
12. Controlling shareholders of Party B transfer their shares in
Party B, or in view of material events including but not limit to
administrative punishment due to unlawful or illegal operations, or
under investigation from relevant department and may result in
administrative punishment, lawsuit or arbitration cases, severe
deterioration of financial position, announcement of bankruptcy or
dissolution, etc;
13. Guarantor breaches the associated guarantee contract, including
but not limit to false information and procedures provided by
Guarantor, Guarantor is in breach of credit contracts, guarantee
contracts or any other similar contracts signed with Party A or other
third party, or lawsuit or arbitration caused by disputes of similar
contracts, or being forced to or voluntarily cease operation,
significant operation faults, under administrative punishment or under
investigation by relevant department and may lead to such punishment,
renouncing bank debts, or any acquisition, merger, reorganization and
other conditions may weaken the ability of acting as a guarantor;
14. Any other conditions that endanger or may endanger the safety of
Party A's loan.
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ARTICLE 7. The Rights of Party B
Party B should have the rights:
1. To draw down and use all the loan in accordance with the terms as
stipulated in this Agreement;
2. To refuse any additional conditions not stipulated in this Agreement;
3. To transfer the debt after obtaining the approval from Party A.
ARTICLE 8. Liabilities of Party B
1. Party B should provide all documents and information, and position
regarding bank accounts and bank balance as requested by Party A; and to
cooperate with the investigation, audit and verification of Party A;
2. Party B has to provide Party A with the monthly financial reports and
updated registration information;
3. Party B shall accept the monitoring and supervision of Party A in
respect of its use of loan and other relevant production, operation and
financial activities;
4. Party B shall use the loan asset forth in this Agreement;
5. Party B shall repay in full the loan principal and accrued interest in
accordance with the terms of this Agreement;
6. When all of or part of the loan is to be transferred to the third
party, prior approved should be obtained from Party A;
7. Should there be any major change of equity interest, reorganization or debt
restructuring, Party B should notify Party A in advance, and to properly
implement the safety measures and protection as to ensure the repayment of
loan principal, interest and other related expenses.
ARTICLE 9. Credit For Group Customer and Special Clauses on Affiliate
Transactions
1. Group customer refers to a legal entity with the following characteristics:
1. Through shares or operation, direct or indirect, controls other
legal entity, or is controlled by the legal entity;
2. Under common control by another legal entity;
3. Under common control, direct or indirect, by any major investors,
key managers or their close family members (including direct family
members within three generations and family relatives within two
generations);
4. Existence of connected relation, which may lead to deviation from
fair market value principle for transfer of assets and profits, and
should be deemed as group customer for the purpose of credit
management.
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2. In case Party B is a group customer, when an affiliate transaction is up to
or more than 10% of net assets value, Party B shall provide written report
to Party A within ten days of the transaction. The report should include
the relationship between the transaction parties, items and nature of the
transaction, amount or consideration, and the pricing policies of the
transaction (including those transactions involving no cash or only nominal
value transaction).
ARTICLE 10. The Rights of Party A
1. To request Party B for the information and documents related to the
loan;
2. To request Party B to repay the loan principal and interest on
time;
3. To kept informed of the operations and productions, financial
activities and repayment plan of Party B;
4. To monitor the usage of loan proceeds by Party B as set forth in this
Agreement;
5. To deduct the loan principal and interest directly from Party B's
account;
6. If Party B fails to fulfill its obligation as stipulated in this
Agreement, Party A shall have the right to request Party B for early
repayment of the loan under this Agreement and cease releasing any unused
portion of the loan;
7. In the event that Party B has major transfer of equity interest,
reorganization or transfer of right to debt or debt obligations, Party A
has the right to demand from Party B repayment of the loan principal and
all other relevant fees; or to demand for a transfer of the loan under this
Agreement to other transferee acceptable and agreed by Party A; or to
provide collateral measures acceptable and agreed by Party A.
ARTICLE 11. Liabilities of Party A
1. Shall release the loan as set forth in this Agreement;
2. Shall the information related to the situations of Party B's finance,
production and operation, except as stipulated by the relevant laws.
ARTICLE 12 Fees
1. All relevant charges related to credit check, examination,
notarization, testimony and registration, etc shall be borne by Party B;
2. In case of Party B's default in loan principal and interest, Party B
should be responsible for the related expenses incurred by Party A for its
collection of the loan principal and interest, including fees for public
announcement, service of notice, verification fees, , attorney fee, legal
costs, travel expenses, and charges for valuation, auction, property
preservation, enforcement, etc.
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ARTICLE 13. Party B shall open a settlement account with Party A and use this
account to conduct the settlement of its business activities.
ARTICLE 14. Breach of Contract and Liabilities
1. In the event that Party B is in breach of Item 1, 2 and 3 of Article 8
and Article 9, Party A shall have the right to cease paying the unused loan
amount to Party B, and to call for repayment of all of or all of the loan
before maturity.
2. In the event that Party B is in breach of Item 4 of Article 8, Party A
shall have the right to impose penalty interest as set forth in this
Agreement, and cease paying the unused loan amount to Party B, and to call
for repayment of all of or all of the loan before maturity.
3. In the event that Party B is in breach of Item 5 of Article 8, Party A
shall have the right to impose penalty interest (principal) and interest on
interest (overdue interest) as set forth in this Agreement.
4. In the event that Party B is in breach of Item 6 and 7 of Article 8,
causing the renouncement of the loan debt under this Agreement, Party A
shall have the right to cease paying the unused loan amount and to demand
early repayment of the drawn loan. With respect to the loss of credit
assets, Party A shall have the right to hold Party B responsible for
compensating the whole or part of the damages.
ARTICLE 15. Amendment and Cancellation of the Agreement
This Agreement can be amended or cancelled upon unanimous consensus by both
parties. The changes or cancellation should be concluded in writing.
ARTICLE 16. Miscellaneous
1. During the effective term of this Agreement, any extension, toleration
or delay in action offered by Party A to Party B in relation to any breach
of Agreement or delay caused by Party B shall not impair, affect or limit
Party A to exercise any of its rights under this Agreement and the related
legally recognized rights as a creditor; it should not be construed as the
permission or acceptance of Party A on any damaging activities to this
Agreement; and it shall not be deemed as the renouncement of Party A of its
rights to take any action against any activities which are in breach of
this Agreement currently or in the future.
2. In any event that, irrespective of any reason or causes, part of or
all of the clauses contained in this Agreement become legally not
enforceable, Party B shall still discharge all of its responsibilities of
repayment. In such event, Party A shall have the right to terminate this
Agreement and to demand immediate repayment of the loan principal, interest
and other relevant charges.
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3. Any notice and requests between the two parties shall be conducted in
writing.
ARTICLE 17. Representations and Warrants of Party B
Party B is qualified legally to sign and perform this Agreement. In addition,
Party B has been authorized to sign and perform this Agreement by the Board of
Directors or any other authorizing body (if require).
Party B undertakes that all application documents and information provided to
Party A were true, legal, and effective; and did not contain any material
mistake or omission of any significant truth or facts.
Party B undertakes to inform Party A in writing within ten days of any change in
location of business, corresponding address, telephone number and scope of
business, and legal representative, etc.
Party B fully understood and acknowledged all of the terms and conditions as
stipulated in this Agreement. It is the Party B's true intent to sign this
Agreement.
ARTICLE 18. Governing Law and Dispute Resolution
This Agreement is signed in accordance with and is subject to the Laws of the
People's Republic of China. Any disputes related to the execution of this
Agreement should be resolved through friendly consultation or intermediation
among the parties. In case no settlement can be reached, the dispute shall be
resolved as described in 1 below:
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1. Submit the case for trial to the People's Court at the vicinity where
Party A is located.
2. Submit to _______________________ Arbitration Tribunal for arbitration.
3. In case this Agreement has been notarized in accordance with the power
of attorney granted by both Party A and Party B to the notary public, in
the event that Party B fails to or partially fails to discharge its
liabilities or obligation under this Agreement, Party A has the right to
apply for a certificate of execution from the relevant notary public, and
to make the application to the relevant judicial People's Court (i.e. the
judicial Court where the debtor is located or where the properties of the
debtor are located) for immediate execution of the Agreement.
4. _________________________________________________________________.
ARTICLE 19. Conditions for Loan Agreement Effectiveness and Ineffectiveness
1. Conditions for Agreement to be effective (tick where applicable)
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[X] This loan is a guaranteed loan. This Loan Agreement should become effective
when the following conditions are met:
(1) This Agreement should be signed and sealed by the authorized
representatives of both parties.
(2) The relevant Guarantee Contract (with Guarantee Money and
Warranty Guarantee Clauses) is signed and the required registration
completed.
[ ] This loan is a credit loan, This Loan Agreement becomes effective
when signed and sealed.
2. Conditions for Agreement to be ineffective: The loan principal,
interest and other related expenses under this Agreement have been fully
settled by Party B.
ARTICLE 20. Other matters agreed by both Party A and Party B: _________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
ARTICLE 21. This Agreement is executed in 4 originals, each of Party A and
Party B shall hold two copies, and each copy of the original is of the same
legal effect.
Party A (Seal): Shenzhen Development Bank Ltd Changcheng Branch
/s/ Sealed
Person in charge (Sign): /s/ Xxxxxx Xxxx
(Principal or Authorized Officer)
Date: November 24, 2005
Party B (Seal): Shenzhen Digitainment Co. Ltd.
/s/ Sealed
Person in charge (Sign): /s/ Xxxx Xx
(Legal Representative or Authorized Officer)
Date: November 23, 2005
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