Exhibit 10.3

 

Mitsui Sumitomo Bank Standard Loan Terms and Conditions (Translation)

 

Translated From Japanese

 

1.

Changing Interest rate

 

 

(1)

The Borrower shall agree that the Bank will change interest rate in calculation
term depending on money market.

 

 

(2)

In case standard interest rate is cancelled or changed, interest rate will be
issued by the Bank.

 

 

(3)

After the Bank changing interest rate, the Bank shall charge the previous
amount. After a while the Bank shall charge the difference from the Borrower’s
specified bank account.

 

2.

Automatic Deduction Repayment and Interest Rate

 

 

(1)

The Bank shall take the amount of repayment and interest rate out from the
Borrower’s specified bank account without any notice.

 

 

(2)

In the event the Borrower fails to repay the loan due to not enough money in the
bank account, the Bank has the right to implement the payment delay compensation
in stead of deducting the payment.

 

 

(3)

About above, the Borrower agree if there is another bank account or any way to
make payment, the Bank shall chose the way to make payment or the order.

 

3.

Cancellation before Starting Loan

 

The Borrower shall confirm interest rate will be determined by the Bank on the
day the Borrower apply for the loan or two days before interest payment day. The
Borrower can not cancel the loan after entering into contract, even if it is
before starting loan.

 

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4.

Cancellation Penalty Fee before Starting Loan

 

 

(1)

If any trouble shall occur due to unavoidable circumstance the Borrower may
cancel the loan with agreement by the bank. The Borrower has to pay penalty.

 

 

(2)

Before starting loan if the reason on Article9 occurred, the loan will be
cancelled. The Borrower has to pay the penalty.

 

5.

Changing Loan Conditions

 

 

(1)

The Borrower can not change any loan conditions after entering into this
contract. ( included before starting loan)

 

 

(2)

If there is any unavoidable circumstance, the Borrower can change the loan
conditions with the Bank’s agreement. The Borrower has to notify the changing 1
month before the day Borrower expects to change. The Borrower has to pay any
related fee to change the conditions.

 

6.

Prepayment

 

 

(1)

The Borrower can not change method of repayment under this contract without
agreement with the Bank.

 

 

(2)

The Borrower has to notify any prepayment 1 month before the day the Borrower
expects to execute with agreement with the Bank. If the Borrower can not get
agreement by the bank, it will not be executed.

 

 

(3)

The bank determine the date of prepayment and the Borrower has to pay repayment,
unpaid interest rate and penalty fee.

 

7.

Penalty of Prepayment and Loss of Profit in Term

 

 

Just pay penalty.

 

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8.

Provide and Dispose Collateral

 

 

(1)

When there is a reason for which Bank needs to preserve the collateral given to
Bank such as it gets damaged, extinct or its value decreases for a reason not
attributable to Bank or when the credibility of Client or its guarantor
decreases, Clients shall provide Bank with a collateral or a guarantor approved
by Bank or add collateral or a guarantor.

 

 

(2)

When Clients defaults on payment, Bank can dispose the collateral not in a legal
procedure but in a generally accepted way, timing and price. Bank can deduct the
fees from the acquired amount and allot it to discharge Client’s debt. When it
does not discharge all of Client’s debt, Client shall pay the rest immediately.
If it is more than Client’s debt, Bank will return the rest to whom the
collateral belongs.

 

 

(3)

When Clients defaults on payment, bank can do same as above to client’s occupied
estate, handprints, and other securities.

 

9.

Loss of Profit in Term

 

 

(1)

If at least one of the following occurs to the bank, without any bank peremptory
notice from the borrower, the bank will lose all of its profit due to the
liability, immediate settlement to the liability is required.

 

 

A)

In the case of the following statements, bank suspension, bankruptcy, civil
rehabilitation proceedings, corporate reorganization proceedings, initiation of
company reorganization or special liquidation.

 

 

B)

When received a suspension of bill clearinghouse.

 

 

C)

When a client or his deposit guarantor and other tentative garnishments, to send
a writ and notification of protective garnishment and garnishment

 

 

D)

In addition client deposit guarantor and other tentative garnishments which bank
provide approved collateral, or client noticed to bank in writing promptly that
come up with a guarantor,

 

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(2)

And if bank admits a profit in term as before, bank notices to client that in
writing.

 

 

A)

When the notification what bank send to client returns, if client is not in.

 

 

B)

If at least only one case of following items will come into, by the demand of
bank, client will lose all profits and immediately to perform of Client’s debt.

 

 

C)

When the Client is not to be late for discharging to the bank even in a part of
Client’s debt. When to be a garnishment or to start an auction procedure for
subject matters of collateral.

 

 

D)

When client will violate an agreement between bank and client. Guarantor
correspond to any of the previous articles and these every item.

 

 

E)

When the case will be considerable causes to need the previous articles and
other approved collateral.

 

 

(3)

In previous article, if the invoice from bank will arrive late or not arrive,
the reason why client by the client responsibility, which client will not notice
of removal, or the invoices will not be delivered, the profit in term will lose
scheduled time.

 

10.

Calculation in Case of Off-set by the Bank

 

 

(1)

If the bank has to fulfill the liability against the borrower, due to arrival of
the due date, loss of profit upon due date, occurrence of discounted discharge,
compensation discharge, or due to other reasons, the borrower can off-set the
liability of the bank deposit, and any other liabilities regardless of the
liability due-dates at any time.

 

 

(2)

As to the bank deposit and other liabilities, the advance notice and prescribed
procedure can be omitted, refunded, cancelled, and with the income the discharge
to the liability is said to be made.

 

 

(3)

Upon the calculation in case of off-set stated in the preceding section, the
calculation of interest due to liability discharge, discounted fare, loss amount
and balance amount are based up until the date of the off-set calculation. The
interest rate and price rate are to be set by the borrower, and as to the
foreign exchange the rate is applied at the time of calculation.

 

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11.

Calculation in Case of Off-set by the Borrower

 

 

(1)

The bank can offset the borrower’s bank deposit and other liability that are in
the period of discharge, before the liability due date.

 

 

(2)

If the bank off-sets the discount bill before the expiration date in accordance
to the preceding section, the bank can off-set by paying the redemption
discharge stated on the bill

 

 

(3)

If the off-set is approved through the preceding two sections, the off-set
notice should be on paper, and the off-set deposit, and other liability right
certification, book, should be submitted immediately to the borrower.

 

 

(4)

In the case of off-set, the liability discharge, discounted fare, loss amount
and balance amount are based upon until the date of off-set notice receipt.
Moreover, as to interest, price rate, and such, unless there is a fixed rule
between the bank and the borrower the borrower can set a rule. As to the foreign
exchange the rate is applied at the time of calculation. Will there be a special
rule for the service charge for the before-deadline discharge, it is set
according to the rule.

 

 

(5)

In the case of off-set from the bank to the borrower, due to accidents requiring
insurance stated by the deposit insurance law, the borrower can follow the
deposit regulations and trust contract set by the borrower, according to the
first section in this article and/or preceding sections. However, should there
be a difference in regulations between the first section in this article and the
deposit regulation and trust contract set by the borrower, the latter is
applied.

 

12.

Assignment of the Appropriation by the Bank

 

 

(1)

In the case of off-set calculation by the settlement or article 10, if there is
not enough to defunct the whole liability from the bank to the borrower, the
borrower is acknowledged to be appropriated, and the bank does not object to the
appropriation. In this case, the borrower will notify the appropriation results
to the bank in writing.

 

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13.

Assignment of the Appropriation by the Borrower

 

 

(1)

In the case of bank off-setting by article 11, if there is not enough to defunct
the whole liability from the bank to the borrower, the bank is able to
appropriate according to the one-by-one manner assigned by the paper from the
bank to the borrower.

 

 

(2)

If the bank has not assigned the preceding section, the borrower is able to
appropriate according to the opportune one-by-one manner, and the bank does not
object to the appropriation. In this case, the borrower will notify the
appropriation results to the bank in paper.

 

 

(3)

If there is a possibility for the liability convention of the borrower to be
obstructed, by considering the assignment of the first section, pledge,
possession of the certification, importance, difficulty of the disposal, length
of liquidation period, settlement expectation for the discount bills, it is
possible to appropriate according to the assignment by the borrower. In this
case, the borrower will notify the appropriation results to the bank in paper.

 

 

(4)

If the borrower appropriates through the preceding 2 sections, unexpired
liability for the bank will be considered as expired, and liability redemption
will be applied to the discount bills prior to expiration. For the payment
acceptance, compensation claim debt in advance will be considered to have been
paid by the bank, and the borrower is able to assign the one-by-one method.

 

14.

Risk of Loss and Exemption Clauses

 

 

(1)

The Bank will make document and debt paper and so on, when the Borrower loses
due to natural disaster. The Borrower has to deal with any loss and damage.

 

 

(2)

Damage of Collateral will be dealt with by Borrower

 

 

(3)

Loss and damage by forged signature will be dealt by the Borrower

 

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15.

Bearing Expense and Commission

 

 

(1)

The Borrower bear the expense of loan plan commission, revenue stamp,
registration fee, notarization, reimbursement and any penalty fee for
prepayment, relevant to this loan Agreement or relevant to the guaranty under
this Loan Agreement.

 

 

(2)

At a rule the Borrower will not have loan plan commission refund.

 

16.

Automatic Deduction Expense

 

 

(1)

The Bank shall take any fee and penalty out from the Borrower’s specified bank
account without any notice.

 

 

(2)

Under this contract the Borrower need neither filling out a check nor preparing
forms to make payment.

 

17.

Assignment

 

 

(1)

Borrower shall allow the Bank to transfer all or part of the loan debt based on
this contract to other banks in the future. Borrowers should confirm that the
banking transaction rules and any articles under this contract will be applied
continuously after transferring the debt.

 

 

(2)

Borrower agrees that Bank shall manage and collect debt as a representative
during the transfer period.

 

18.

Special terms and conditions for Joint Guarantor

 

 

(1)

Joint guarantor and Borrower shall be jointly liable for the loan.

 

 

(2)

Joint guarantor shall not use the Borrower’s saving or another loan to offset
the payment.

 

 

(3)

Joint guarantor shall not clam exemption clauses, even if the Bank change or
terminate collateral or another guarantee.

 

 

(4)

When Joint guarantor performs a guarantee obligation, joint guarantor shall not
use the right that the Bank provides during agreement between Borrower and Bank.
Also if the Bank ask joint guarantor for assign the right, joint guarantor has
to provide it.

 

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(5)

If joint guarantor guarantee another debt between the Borrower and the Bank, it
will not be changed by this guarantee contract. In case the guarantor guarantees
another limited debt, it will be added this amount of debt.

 

 

(6)

If joint guarantor guarantees another agreement between the Borrower and the
Bank in the future, it will the same as above.

 

18-2

Notification of Guardian

 

 

Guardian’s name and any other need has to be notified to the bank in writing.

 

19.

Reconsidering Contract Conditions

 

 

(1)

In the case of following statements during the term of this contract Bank shall
ask borrower for consultation of changing interest rate for loan or Spread.
Borrower shall accept the consultation.

 

 

A)

Interest coverage ratio under 1

 

It will be examined based on statement of profits and losses.

 

Method of calculation

(sales profit + interest income)/interest expenses

 

 

B)

Operating at a loss for successive 2 years.

 

It will be examined based on statement of profits and losses after settling
accounts. It will be also considered that borrower operates at a loss over three
years.

 

 

C)

Dept exceeds assets

 

To be based on the examined balance sheet after settling accounts.

 

 

D)

In the event that Bank for whatever reason should consider changing the contract
conditions occurs.

 

 

(2)

Borrower can not avoid the rule about recalling loan under this contract, even
when Borrower is in the situations above.

 

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20.

Updated Corporate Information

 

 

(1)

Client should report any change in the seal, name, trade name, representative,
address, and any other reported particulars, immediately in writing.

 

 

(2)

Failing to practice the preceding, or not receiving notices from the borrower,
and if the notice or the documents sent by the borrower are delayed or do not
reach, they will be considered as reached on schedule.

 

21.

Report and Research

 

 

(1)

Client should submit balance sheet, statement of profits and losses, and copies
of documents acknowledged by the bank such as research on the client’s property,
management and updates.

 

 

(2)

Client should submit other documents as requested by bank in a timely manner
related to ongoing performance of the company.

 

 

(3)

Client should report any material matter to the bank in a timely manner.

 

 

(4)

If the client is an individual, he/she is to report any information related to
family court issues in a timely manner.

 

22.

Agreement of usage purpose of information and providing information to the third
party.

 

23.

Changing Laws

 

24.

Notarized Document

 

Whenever the bank ask the Borrower for preparing notarized document, the
borrower has to start prepare it.

 

25.

Ruling Laws, Jurisdiction

This contract and this ruling law and any transactions between the client and
the bank based on this contract are carried out under Japanese laws.

 

If it is necessary to proceed to a the court case about transactions based on
this contract, local courts in Osaka Prefecture and Tokyo, or the courts which
have jurisdiction (over) each location of correspondents shall hold
jurisdiction.

 

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