Bank Credit Line: Shenzhen Highpower Technology Co., Ltd. ( “Borrower”)
EXHIBIT
10.5
DBS
Our
reference number: P/SHNY/00823/07
Date:
August 17, 2007
Shenzhen
High Power Technology Co., Ltd.
Building
A2, Luoshan Industrial Zone, Shanxia, Pinghu Town, Longgang District,
Shenzhen
To
whom
it may concern:
Bank
Credit Line: Shenzhen Highpower Technology Co., Ltd.
(
“Borrower”)
Our
bank,
DBS Bank (China) Limited Shenzhen Branch together with its successor and
transferee (“Bank”) hereby notifies you with pleasure that the Bank now
contemplates to provide you as Borrower (as shown in detail in Appendix 1)
with
the following bank credit line (“Credit Line”) according to the terms and
conditions set out below. The Bank can examine the Credit Line at any time
(including the annual auditing thereof conducted as per the practices of the
Bank and customary bank practices). The Bank has the right and may elect (but
is
under no obligation) to issue, after the auditing, a notice on the extension
of
the Credit Line to the Borrower or any collateral provider and/or any guarantor.
Whether such a notice is issued or not does not prejudice any right and power
of
the Bank under this letter and/or any guarantee or mortgage document.
Where
the
Borrower uses the Credit Line simultaneously in foreign currency and RMB, (i)
the total principal of loans in all currencies that the Borrower has drawn
and
not yet repaid and that the Borrower has not yet actually drawn after sending
a
drawing notice to the Bank shall not exceed the limit prescribed by the
individual Credit Line hereunder at any time; (ii) the total value of the
letters of credit in all currencies (if applicable) that the Borrower has
already opened and has not yet actually opened after filing an opening
application with the Bank and the total value of guarantees and other contingent
liabilities shall not exceed the limit prescribed by the individual Credit
Line
hereunder at any time. For purpose of calculation of Credit Line, the exchange
rates between foreign currencies and between foreign currencies and RMB
hereunder shall be translated into equivalent benchmark currency as per the
exchange rate published by the Bank from time to time.
Credit
Line:
| 1. |
Accounts
payable financing: RMB 28,000,000 Yuan (uncommitted credit
line)
|
Purpose
of Loan: Working capital
Payment:
Loan is released against the trust collection receipt provided on the basis
of
supplier invoice in either original or duplicate (duly verified by the Borrower
as certified copy).
1
For
each
drawing, the Borrower shall submit to the Bank all documents related to the
accounts payable as required by the Bank, including but not limited to invoices,
sales contract and transport documents (if applicable), in content and form
satisfactory and acceptable to the Bank. The payment under this Credit Line
shall be made directly to the related suppliers.
Clauses:
The longest financing term of each invoice is 120 days, minus:
| (1) |
Term
of supplier’s charge account (if any); and
|
| (2) |
Where
payment is made to a supplier after expiry of payment day, the elapsed
term commencing from the date of
expiration.
|
The
suppliers of accounts payable and the specific limit for each of them shall
be
subject to the prior written approval granted by the Bank to according to
specific cases (if so required by the Bank). The Bank may do the company search
against the suppliers of accounts payable financing at the expense of the
Borrower. All related fees and expenses could be drawn from the account of
the
Borrower.
Service
Charges of Accounts Payable Financing
First
Installment: RMB 400.000 Yuan 1/4%
Balance
1/8%
Interest:
The interest payable for each loan shall be calculated and collected at a rate
that is 45% higher than the legal loan interest rate of the relevant grade
published by the People’s Bank of China on the day the loan is released.
| 2. |
Negotiate
documentary letter of credit (with recourse) with
variance
|
USD
equivalent to RMB 10,000.000 (uncommitted credit line)
Purpose
of loan: The loan will be used to clear off the outstanding part (if any) of
the
account payable financing that the Borrower owes to the Bank first before the
balance can be used as current capital.
Subject
to recourse against the Borrower, the Bank will negotiate documentary letters
of
credit and/or drafts that are acceptable to it, but have variance.
Notwithstanding anything to the contrary herein contained, the Bank can, at
any
rate and in its own absolute discretion, decide to refuse to negotiate any
documentary letter of credit and/or draft that have
any
variance deemed unacceptable by the Bank.
Interest
As
per
the standard US draft interest rate published from time to time by the Bank,
provided that Bank can decide to change the loan interest rate from time to
time
in its own absolute discretion.
| 3. |
Factoring
financing service: USD 6,000,000 (uncommitted credit line)
|
Purpose
of Loan:
The loan
will be used to clear off the outstanding part (if any) of the account payable
financing that the Borrower still owes to the Bank first
The
terms
and conditions of the factoring financing service agreement will be specified
in
Appendix 3 and the factoring agreement.
2
Service
Charges of Credit Line and Other Expenses:
The
Bank
has the right to collect Service Charges and other fees for related Credit
Line,
including but not limited to loan arrangement fees and the Service Charges
for
loan extension (including drawing and extension). All fees shall be collected
according to the standard existing rules of the Bank, unless otherwise
stipulated in a separate agreement or this letter.
Precondition:
As
a
precondition for the Bank to provide or continue to provide the Credit Line,
the
Borrower must provide the documents, items and evidences listed in Appendix
2 in
a form and content satisfactory and acceptable to the Bank (unless otherwise
approved by the Bank).
Most
Preferential Interest Rate:
Unless
otherwise stipulated herein, the most preferential interest rate means that
of
Hong Kong Dollars published from time to time by DBS (Hong Kong) Limited. If
the
interest rate of any Credit Line is expressed as the most preferential rate
published from time to time by the Bank plus a margin, the Bank may decide
in
its reasonable discretion to use the interest rate of “Hong Kong Interbank
Offered Rate plus 0.5%” in lieu of the most preferential interest rate without
consulting or notifying the Borrower to calculate the interest payable under
the
Credit Line. If the interest of any Credit Line is expressed as the most
preferential interest rate published from time to time by the Bank minus a
certain percentage, the Bank can decide in its reasonable discretion to use
“Hong Kong Interbank Offered Rate plus 0.5%” to calculate the interest payable
on the Credit Line under the Credit Line.
Business
day:
Unless
otherwise stipulated herein, business day means the days when the business
places of the Bank and the commercial banks in the major financial centers
of
the
denominated currencies
of related Credit Line (or part thereof) are open for business (excluding
Saturday, Sunday and other public holidays). If any payment day, repayment
day
or interest payment day is not a business day, the day shall be adjusted to
the
next or previous business day by the Bank in its sole discretion. If any
repayment day or interest payment day has no date of the same number in a month,
the day shall be adjusted to be the last day of the month.
Interest
applicable to overdue repayment of Credit Line in foreign currency:
If
any
amount hereunder remains outstanding on the day it falls due or the Credit
Line
used exceeds the limit allowed for the Credit Line in that currency, the
Borrower shall pay interest for the overdue repayment or the amount in excess
thereof at an interest rate that is the interest rate of the Bank then in force
for overdue repayment or exceeded limit, which can be collected in the form
of
compound interest each month or in other cycle as the Bank may decide from
time
to time. If any amount becomes overdue, the Bank may raise the interest rate
of
all the amounts still owed hereunder without prejudice to its other rights.
Interest
applicable to overdue Credit Line in RMB:
If any
loan/financing hereunder remains outstanding on the day its falls due, the
Borrower shall pay interest from the day of expiration at the interest rate
prescribed by the Bank from time to time for delayed repayment (the Borrower
may
inquire the Bank about the interest rate applicable to delayed repayment from
time to time) until all the principal and interest of the loan/financing are
repaid. In case of any adjustment to the interest rate for delayed repayment,
interest calculation shall be based on separate periods. For the interest that
cannot be paid on time during the term of loan/financing, compound interest
will
be collected at the interest rate for delayed repayment. The above interest
rate
for delayed repayment is set and adjusted in reference to the relevant
guidelines and regulations issued by the People’s Bank of China from time to
time.
3
Penalty
Interest on Diverted Credit Line in RMB:
Without
prejudice to the other rights of the Bank hereunder, the Borrower shall pay
penalty interest at a rate equal to the annual loan interest rate agreed by
and
between the Borrower and the Bank hereunder plus 50% for any failure to use
any
loan toward the purpose specified herein starting from the day of diversion.
The
calculation of penalty interest will be based on separate periods in case of
any
adjustment made to the interest rate thereof from the day the relevant loan
is
diverted to the day it is repaid in full. For the interest that cannot be paid
on time during the diversion of the loan, compound interest will be collected
on
a monthly basis at the penalty interest rate for diversion. If the adjustment
made by the People’s Bank of China to the penalty interest rate for diversion
causes the penalty interest rate for diversion hereunder to be applicable no
longer or in need of corresponding adjustment, the Bank reserves the right
to
revise the penalty interest rate for diversion subject to a prior notice given
to the Borrower.
Establishment
fee:
USD
7000
Calculation
of Interest:
Unless
otherwise stipulated herein, interest will be cumulative on a daily basis and
calculated in reference to the elapsed days or on the basis of 365 days a year
(for credit in HK$, pound, Singapore dollars or Malaysian Ringgit), or a year
of
360 days when the annual interest rate is converted to daily interest (if for
any approved credit in foreign currency and/or RMB).
Payment:
All the
payments hereunder shall be made in the currency of the released loan under
the
Credit Line (or any part thereof) or in the currency in which related payments
have been made (as the case may be) as instructed by the Bank. In whichever
case, the payment shall be made in immediately available capital without any
debt set-off or recourse and deduction or withholding for any tax, taxation
or
collection of fees of whatever nature. If any payment received by the Bank
deviates from the currency specified above, the Bank has the right to convert
the amount to the currency specified above at the exchange rate then published
by the Bank and according to its business practices as soon as possible after
receipt thereof (the currency conversion shall not contravene any related law
and regulations of China), while the Borrower shall make up any insufficiency
to
the Bank. In any event, the Borrower must pay to the Bank all the expenses
incurred by the conversion thereof.
Fees
and Expenses:
The
Borrower must pay the stamp tax related hereto (including the part payable
by
the Bank). Without prejudice to the preceding paragraph and irrespective of
whether any amount has been released to the Borrower under this letter or other
documents or whether the Borrower has used any Credit Line, the Borrower shall,
if so required by the Bank, pay all the following fees and expenses incurred
reasonably and properly by the Bank (including but not limited to registration
fee, inspection fee of mortgaged machinery and equipment (if applicable), agent
charges, legal cost and the charges of other professional consultants collected
on the basis of full indemnity, travel expenses, communication fees, publicity
costs, other fees and expenses); all fees and expenses incurred in connection
with the preparation, consultations and conclusion of this letter, common
commercial agreement and other guarantee documents (collectively “Loan
Documents”) to be issued by the Borrower or other guarantor/collateral provider;
all fees and expenses incurred in connection with the fulfillment, preservation
or protection of any right under the Loan Documents; or all fees and expenses
incurred in connection with the exercise or execution or attempted exercise
or
execution of any right under the Loan Documents.
4
For
as
long as the Credit Line continues to exist, the Borrower shall bear the Service
Charges for the audit carried out by the Bank each year by paying the amount
decided by the Bank. The charges may be drawn from the account of the
Borrower.
Commitments:
The
Borrower hereby commits itself to the following for the benefit of the
Bank:
| (a) |
The
Borrower will compile and maintain account books and financial statements
in accordance with applicable Chinese laws and regulations and generally
recognized accounting principles and
practices;
|
| (b) |
The
Borrower shall:
|
| (i) |
submit
to the Bank audited (and consolidated, if appropriate) accounts and
reports of directors and auditors for each fiscal year as soon as
possible
when the same becomes available for submission, but in any way within
10
months after the end thereof and, if reasonably required by the Bank,
submit to the Bank all the other information relating to its financial
position and business that is required by the Bank as soon as
possible;
|
| (ii) |
inform
the Bank of details on any existing or (to the best of its knowledge)
upcoming major lawsuit, arbitration or administrative proceedings
instituted by or against it as soon as reasonably
possible.
|
| (c) |
The
Borrower will inform the Bank of any change to its directors or any
revision of its contract (if any) and bylaw as soon as
possible;
|
| (d) |
The
Borrower shall inform the Bank of any factor that may prohibit, impair
or
delay the fulfillment of the obligations under the Loan Documents
by the
Borrower or any guarantor/collateral provider as soon as possible
after it
becomes aware of the same;
|
| (e) |
The
Borrower will keep the value of its net assets always at a level
not lower
than RMB 80,000,000Yuan;
|
| (f) |
Without
the prior written consent of the Bank, the Borrower will not announce
the
distribution of any dividend;
|
| (g) |
The
Borrower will refer no less than HK$ 60,000.000 of its factoring
finance
to the Bank every half a year;
|
| (h) |
All
transactions involved in the trade finance under the Credit Line
are true,
fair, equitable, normal and legal. All persons involved the transactions,
including but not limited to the beneficiary of any letter of credit,
supplier and buyer (as the case may be), are persons and/or companies
of
no affiliation with the Borrower. If the above transactions involve
any
person and/or company affiliated with the Borrower, the Borrower
undertakes to voluntarily and immediately reveal the relevant relationship
to the Bank, provide all the information as the Bank may require
and hold
up the relevant transaction and use of related trade finance before
the
Bank grants approval.
|
5
| (i) |
(i)
For purpose of the performance guarantee provided by an overseas
guarantor
for this Credit Line, the Borrower shall go through the formalities
for
registration of foreign debts with the local foreign exchange
administration within fifteen (15) days after the expiration day
of the
overseas guarantor; (ii) when going through the formalities for
registration of foreign debts with the local foreign exchange
administration, the Borrower shall own sufficient investment balance;
and
(iii) the Borrower shall take necessary measures to ensure that all
outstanding debts it owes to the Bank under the Credit Line will
be repaid
to the Bank in the same currency as the Credit Line. Investment balance
means the balance of the total investment of the Borrower minus its
registered capital, the accumulative amount of medium and long-term
foreign debts and short-term foreign debts.
|
| (j) |
The
Borrower will obtain and make sure that all related guarantors and/or
collateral providers obtain any approval, registration and/or filing
relating to the Loan Documents and keep the same valid until full
repayment of all Credit Line. When the certificate thereof is obtained,
the original or duplicate verified by the Borrower or guarantor or
collateral provider (as the case may be) as a signed duplicate thereof
shall be delivered to the Bank for keeping.
|
Restrictions
on Obligations of Providing Credit Line:
Within
the validity term of the Credit Line hereunder, the Bank’s provision of Credit
Line for the Borrower shall be conditional upon the ability of the Bank to
raise
the funds for the Credit Line. If the Bank is unable to provide the Borrower
with the Credit Line hereunder, either in whole or in part, because of the
restrictive regulations on interbank borrowing or other restrictive regulations
promulgated for implementation by the People’s Bank of China/China Banking
Regulatory Commission, the Credit Line hereunder shall be transferred to credit
line in other currency according to the applicable laws and regulations and
usable funds of the Bank. The Borrower expresses complete consent to and will
fully cooperate with any disposal and arrangement made by the Bank in relation
thereto and hereby agrees that the Bank will bear no responsibility whatsoever
to the Borrower during the period.
Temporary
Credit Line and Excess of Limit:
In
its
absolute discretion, the Bank may (but is under no obligation to) provide to
the
Borrower, at its request, temporary Credit Line and/or transitory permission
for
amount already used to exceed the limit of the original Credit Line. Without
prejudice to the power of the Bank under the clause “Require Repayment of Credit
Line”, all the amounts due hereunder (including principal, interest, fees and
other funds) shall be paid promptly according to the instructions of the Bank.
If the Borrower fails to fulfill its obligations hereunder or fulfill its
obligations in a way agreed, thereby causing losses or damage to the Bank,
the
Borrower shall indemnify the Bank for the losses by paying an amount
commensurate with the losses so caused.
6
Require
Repayment of Credit Line:
| (a) |
Without
prejudice to paragraph (b) below, if the Borrower fails to pay any
amount
payable hereunder on time, or the Borrower fails to fulfill any other
obligations prescribed by this letter or any other Loan Documents,
or the
Borrower fails to repay any other debts, in whole or in part, on
the
agreed expiration date, or such debts are declared to fall due prematurely
before the expiration date due to the breach of contract by the Borrower,
or any other creditor of the Borrower has the right to declare that
the
Borrower’s debts have fallen due and payable before the agreed expiration
date, or the Borrower is declared insolvent or dissolved, or the
secured
mortgage document hereunder has expired or is invalid or illegal;
the Bank
can cancel the Credit Line or any part of it in real time and/or
require
immediate repayment or payment (as the case may be) of all the principal,
interest, expenses and other funds that remain outstanding hereunder
or
any part thereof (“Liabilities”) and/or require the Borrower to
immediately provide cash guarantee for all Liabilities. Then, the
Credit
Line or the part of it shall be cancelled in real time and/or the
Liabilities shall fall due immediately and/or the cash guarantee
shall be
provided immediately.
|
| (b) |
Notwithstanding
anything in any other clauses hereof (including above paragraph (a)),
in
any event, the Bank can decide, at any time without the need to notify
the
Borrower and in its own absolute discretion, to cancel the Credit
Line or
any part of it in real time and/or require immediate repayment or
payment
(as the case may be) of all the principal, interest, expenses and
other
funds that remain outstanding hereunder or any part thereof
(“Liabilities”) and/or require the Borrower to immediately provide cash
guarantee for all Liabilities. Then, the Credit Line or the part
of it
shall be cancelled in real time and/or the Liabilities shall fall
due
immediately and/or the cash guarantee shall be provided
immediately.
|
| (c) |
Notwithstanding
anything in the above paragraph entitled “Payment” (applicable where the
Bank has not required repayment) and under the precondition that
any prior
claim is not contravened, all the amounts received by the Bank at
any time
after exercising the right in above paragraph (a) or (b) shall be:
|
First,
used for or toward payoff of all fees and expenses incurred by the Bank in
connection with the fulfillment, preservation and exercise or attempted
fulfillment, preservation and exercise of its rights under the Loan
Documents;
Then,
used for or toward payment of all outstanding Liabilities in the sequence and
manner specified by the Bank;
Lastly,
pay to the Borrower in the form of any balance thereof without contravening
the
right of any third party actually known to the Bank.
Default
Liabilities: If
the
Borrower fails to fulfill its obligations hereunder in accordance with the
clauses hereof, thereby causing losses or damage to the Bank, the Borrower
shall
indemnify the Bank for the loss or damage caused as a result of its breach,
including benefits that could have been obtained but for the breach.
Transfer:
| (a) |
The
Borrower may not transfer its rights or obligations hereunder, either
in
whole or in part;
|
7
| (b) |
The
Bank can transfer all or any of its rights and/or obligations hereunder
by
just giving a written notice to the Borrower without the need to
seek the
approval of the Borrower. Such transfer/update shall take effect
from the
date indicated in the notice. All references herein made to “the Bank”
include any other persons merged or integrated with the Bank and
the
successor and transferee of the Bank, which shall be understood in
such a
way as to look as if the entity constituted by way of merger or
acquisition or the successor or transferee of the Bank (as the case
may
be) had become a party hereto in lieu of the
Bank.
|
Information
Policy:
The
Borrower agrees that the information policy, notices and/or other communications
(copies thereof available from the Bank upon request) issued from time to time
by the Bank (member of DBS Group) to the customers concerning the application
of
their information shall be applicable to all the information provided for the
Bank by the Borrower in respect of the Loan Documents. The Borrower further
agrees that all the information provided in any application, or obtained by
the
Bank from any source, or arising from the other transactions between the
Borrower and the Bank (or any other member of DBS Group) (“Information”) will be
subject to such policy, notices and/or other communications that can be revised
from time to time. The Borrower specially agrees that:
| (a) |
The
Bank can verify, provide and collect the Information on the Borrower
with,
for or from other organizations, institutions or other
persons;
|
| (b) |
The
Bank can transfer the Information to other places than the business
places
of the Bank, including but not limited to Hong Kong Special Administrative
Region and Singapore; and
|
| (c) |
The
Bank can compare any Information it has obtained with the Information
of
the Borrower before taking any action on the basis of the results
obtained, including actions that may be adverse the interests of
the
Borrower (including refusal to accept any
application).
|
The
Borrower agrees to accept the constraints of the clauses of such information
policy, notices and/or other communications, which shall form an integral part
of the agreement concluded by and between the Borrower and the Bank.
Relationship
with Directors/Employees: As
a
licensed bank, the Bank is subject to some restrictions on the release of loans
to the directors, or employees or other relevant persons of the Bank or other
members of DBS Group. By signing this letter, the Borrower confirms to the
Bank
that it has no relationship with any director or employee with the members
of
DBS Group in any aspect. The Borrower undertakes to give a written notice to
the
Bank immediately after entering into such relationship at any time while the
Bank continues to provide the Borrower with Credit Line or any loan or other
debts owed to the Bank still remain outstanding.
Miscellaneous:
| (a) |
Without
prejudice to any other clause hereof, the Borrower can request at
any time
to repay all the amounts due under the Credit Line or any part thereof
ahead of schedule after obtaining the approval of the Bank and satisfying
all the conditions set forth by the Bank (including the requirement
for
the Borrower to pay the interest that the Bank could have collected
from
the moved-up date of repayment to the original expiration date at
the
interest rate herein specified or pay the extra capital cost or loss
caused to the Bank by the advance repayment of the Credit
Line);
|
8
| (b) |
Time
is an element hereof, but the failure or delay of the Bank to exercise
or
execute any right or remedial measure shall not be deemed waiver
of the
Bank to exercise or execute the right or remedy, while the single
or
partial or insufficient exercise or execution of any right or remedy
by
the Bank shall not preclude the Bank from further exercising or executing
the right or remedy or exercising or executing any other right or
remedy.
The right and remedies herein contained shall be cumulative. The
Bank can
exercise the same whenever it sees fit without excluding any other
right
or remedy vested in the Bank by laws and regulations. The Borrower
must
notify the Bank immediately of any change to its address for notices.
Such
change can take effect only after it is properly recorded by the
Bank.
|
| (c) |
Any
notice or other communication sent to the party hereto shall be deemed
delivered:
|
| (i) |
on
the day of sending if it is sent by the Bank to the Borrower via
a letter;
or on the day of delivery to the relevant address if it is sent by
the
Borrower to the Bank via a letter;
|
| (ii) |
on
the day of transmission if it is sent via fax, provided that the
day of
transmission is a working day at the location of the receiving party;
or
on the first working day immediately after the day of transmission,
if the
day of transmission is not a working day at the location of the receiving
party;
|
| (iii) |
The
Borrower must notify the Bank immediately of any change to its address
of
receiving notices and/or faxes. Such change can take effect only
after it
is properly recorded by the Bank.
|
| (d) |
If
any clause hereof is illegal, invalid or unenforceable under the
laws of
any judicial jurisdiction, the legality, validity or enforceability
of any
other clause hereof under the laws of the judicial jurisdiction and
the
legality, validity or enforceability of such clause in other judicial
jurisdiction shall not be affected.
|
Common
Commercial Agreement:
The
clauses of the common commercial agreement duly signed by the Borrower on April
24, 2006 (including but not limited to clauses on interest period) are also
applicable to this letter. The terms and conditions thereof constitute an
integral part hereof. In case of any contradiction between the terms and
conditions of the common commercial agreement and those hereof, the latter
shall
prevail.
Laws:
This
letter shall be governed by the laws of the People’s Republic of China (“China”)
and both parties accept the nonexclusive judicial jurisdiction of Chinese court.
The preceding clause shall not restrict the right of the Bank to execute this
letter in any other judicial jurisdiction. If any dispute arising from this
letter or in connection therewith is brought before a Chinese court, it shall
be
a court at the location of the Bank.
Effectiveness:
This
letter takes effect the moment it is signed and returned by the Borrower.
However, if this letter must be approved, registered and/or filed by or with
any
authority before taking effect under the Chinese laws and regulations, it shall
take effect on the day such approval, registration and/or filing procedures
are
duly completed.
9
Please
kindly sign the counterpart hereof and return it to the Bank, attention: Xx.
Xx
Xxxxxxx, within one month after the date hereof, thereby indicating that you
understand and accept this offer. After the above time limit, this offer will
automatically cease to be in force (unless otherwise approved by the Bank).
The
Credit Line mentioned herein is a renewal, extension, revision and/or
supplementation of the Credit Line already released. Subject to your acceptance
hereof, this letter will supercede the previous letter of the Bank on the said
Credit Line, which is dated April 18, 2006, with the reference number
P/SFHFB/00056/06.
Enclosed
herein please find a full set of documents you are expected to sign and return
to the Bank. If you have any question, please contact Xx. Xx Xxxxxxx of the
Bank
by dialing (00-000) 0000-0000.
10
The
Bank
takes great pleasure in serving you.
DBS
Bank (China) Limited Shenzhen Branch
/s/
Illegible Signature
SW/yw
With
appendixes
|
Please
note:
This
letter is a very important legal document. Before signing it, you
are
advised to carefully it and, if necessary, seek independent legal
opinion
to ensure that you understand your responsibilities hereunder and
all
consequences of signing this letter. You should sign this letter
only if
you agree to be bound by the terms and conditions
hereof.
|
We
hereby
confirm that you have warned us about and explained to us all the terms and
conditions of this Letter of Credit Line. We fully understand and agree to
accept all the terms and conditions hereof and are willing to be bound by them
unconditionally. We further agree that you have the right to change, terminate,
recover or cancel the Credit Line you have agreed to provide to us without
the
need to give us any prior notice and undertake to immediately repay all the
outstanding debts under the Credit Line once you require us to.
Shenzhen
Highpower Technology Co., Ltd.
By:
/s/
Xxxx Xx
Xxx
Legal
Representative/Authorized Agent
Date
when
Borrower signs and returns this letter:
Common
Seal: Shenzhen Highpower Technology Co., Ltd.
11
Appendix
I
Data
of Borrower
|
Borrower:
|
Shenzhen
Highpower Technology Co., Ltd.
|
|
Registration
Number of Business License:
|
Xx
Xx Xxx Xxxx Zong Di 317218
|
|
Legal
Address:
|
Building
A2, Luoshan Industrial Zone, Shanxia, Pinghu Town, Longgang District,
Shenzhen
|
|
Legal
Representative
|
Xxx
Xxxxxx
|
|
Address
for Notices
|
Building
A2, Luoshan Industrial Zone, Shanxia, Pinghu Town, Longgang District,
Shenzhen
|
|
Fax
Number
|
12
Appendix
2:
Preconditions
| 1. |
Common
commercial agreement in the standard format of the Bank duly signed
by the
Borrower;
|
| 2. |
(i)
Deposit pledge contract in the standard format of the Bank duly signed
by
the Borrower and duly notarized or
witnessed;
|
(ii)
No
less than RMB 17,000,000 Yuan saved by the Borrower in the Bank as pledge
deposit.
| 3. |
Letter
of full amount guarantee and compensation in the standard format
of the
Bank duly signed by Hong Kong Highpower Technology Company Limited
(“HK
Company Guarantor”), which is duly notarized or witnessed;
|
| 4. |
Letter
of undertaking issued to the Bank by Pan Dangyu, Xx Xxxxxxxx and
Xx
Xxxxxx, who shall have fulfilled related formalities for the letter
of
undertaking in accordance with all applicable laws to make it legal
and
valid;
|
| 5. |
Factoring
agreement in the standard format of the Bank duly signed by the
Borrower;
|
| 6. |
Business
license of legal entity (original and duplicate) and signed duplicate
of
approval certificate of the Borrower that have received annual
examination;
|
| 7. |
Documents
of incorporation (including but not limited to latest contract/agreement
for joint venture/joint operation), latest bylaw and signed duplicate
of
revised version thereof of the
Borrower;
|
| 8. |
Signed
duplicate of the organization code certificate of the Borrower;
|
| 9. |
Signed
duplicate of capital verification report (if applicable) issued by
Chinese
certified public accountant to prove that the Borrower has paid up
the
registered capital;
|
| 10. |
Signed
duplicate of list of members of the board of directors of the Borrower;
|
| 11. |
Board
resolution or abstract of board resolution of the Borrower that approves
the signing of this letter and other related documents and specimen
of the
seal or signature of authorized signatory;
|
| 12. |
Duplicates
of ID cards and personal signatures or private seals of all directors
who
have signed the above board resolution or abstract of resolution
of the
Borrower and all authorized signatories;
|
| 13. |
Duplicate
and password of the valid loan card of the
Borrower;
|
| 14. |
The
Borrower has opened the RMB and/or USD accounts needed by the
Bank;
|
| 15. |
The
Borrower has paid loan Service Charges and other fees payable to
the Bank;
|
| 16. |
Signed
duplicates of latest incorporation documents and bylaw of HK Company
Guarantor;
|
| 17. |
Board
resolution or abstract of board resolution of HK Company Guarantor
concerning related guarantee and mortgage and specimen of the seal
or
signature of authorized signatory;
|
13
| 18. |
Duplicates
of ID cards and personal signatures or private seals of all directors
and
shareholders who have signed the above resolutions of the board and
shareholders’ meeting or abstract of resolution of HK Company Guarantor
and mortgagor and all authorized signatories;
|
| 19. |
Signed
duplicate of identity certificate for a undertaker of personal status;
|
| 20. |
Certificate
of stamp tax paid by the Borrower for this letter;
|
| 21. |
Evidences
proving that the Borrower has completed loan registration and opened
the
necessary accounts required for the Credit Line in accordance with
relevant laws and regulations;
|
| 22. |
Other
documents, items or evidences required by the Bank, including the
documents of approval, registration and/or filing as well as the
legal
opinion relating to this letter, any Credit Line hereunder and relevant
guarantee and/or mortgage.
|
14
Appendix
3
Disclosed
terms and conditions for factoring finance service,
including:
| a) |
Advance
|
The
Bank
can decide in its sole discretion to provide the Borrower with advance before
the payment day for amounts due of qualified drawings;
| b) |
Management
of Collection and Accounts Receivable
|
The
management service provided by the Bank for accounts receivable include managing
the sales ledger of the Borrower, issuing monthly statements to its debtors
and
collecting accounts receivable from its debtors;
| c) |
Insurance
against Credit Risks
|
The
Bank
will take out insurance against credit risks in its own name with agency
collectors or credit underwriter, which shall be subject to the clauses of
insurance against credit risks established by the agency collector or credit
underwriter.
| 1. |
(a)
Limit of Advance for Customers: USD
6,000,000
|
(b)
Percentage of Advance: 80%
(c)
Longest Period of Financing: 120 days from the date of invoice
(d)
Account Management Fee: Factoring without recourse—0.9%
of
invoice
(e)
Discount Fee Collection: Standard interest rate of the Bank for USD drafts
plus
0.5% a year
(f)
Interest rate for overdue amount: For advances in foreign currency, the interest
is collected at a monthly rate of 2% of the overdue amount; for advances in
RMB,
the provisions in “Interest Applicable to Overdue Credit Line in RMB” hereof
shall apply.
| 2. |
The
advance limit for the debtors of the Borrower will be paid after
the Bank
has completed a satisfactory evaluation of the debtors. The Bank
reserves
the right to audit and change the limit or decide in its own discretion
to
make no payment of the advance at all.
|
| 3. |
The
Borrower shall notify all debtors in the written format specified
by the
Bank.
|
| 4. |
All
advances paid to the Borrower shall be paid into the account opened
by the
Borrower with the Bank after receipt of the advance payment instruction
issued by the Borrower via fax. The Bank will bear no responsibility
for
any delay, loss or damage in observing the fax instruction or caused
by
the delay, illegibility or failed receipt of the fax instruction.
|
| 5. |
The
accounts receivable of the Borrower shall be investigated before
the
account is activated and the terms and conditions specified in this
letter
(including this appendix) can be adjusted on the basis of the
investigation results. The Bank can carry out regular investigation
subsequently. If the Bank is unsatisfactory with any investigation
result,
it reserves the right to cancel this offer.
|
| 6. |
All
the clauses of the factoring agreement (duplicate enclosed herewith)
in
the standard format of the Bank shall also be applicable after the
revisions listed above are made. The Bank reserves the right to revise
any
term and condition of this letter (including this appendix) or the
factoring agreement by giving the Borrower a written notice with
effect
starting from the date therein indicated.
|
15
