EXHIBIT 10.5

 

Loan Agreement

 

By and between

 

The Shareholder of Shenzhen CCPower Corporation

(“Borrower”)

 

and

 

Shenzhen CCPower Investment Consulting Co., Ltd.

(“Lender”)

 

August 25, 2016

 

 

 

 

Loan Agreement

 

This Loan Agreement (“this Agreement”) is executed by and among the following
Parties on August 25, 2016.

 

(1)Shareholder of Shenzhen CCPower Corporation (hereinafter as “Borrower”), as
follows:

 

Name of the Shareholder  Shareholding Ratio (%)   Contribution   ID Card No. 
Wei Zhixiong   100%   10,000,000    430524197303182439 

 

and

 

(2)Shenzhen CCPower Investment Consulting Co., Ltd. (hereinafter called the
“Lender”), a wholly foreign owned enterprise registered in China with its
registered address at 1705, Tower A, Haisong Building, Tairan 9 Road,
Chegongmiao, Futian District, Shenzhen, PRC; . It’s legal representative is
Renyan GE.

 

(Borrower and Lender are collectively called “the Parties” or “each Party” or “a
Party” respectively.)

 

WHEREAS:

 

(1)Borrower holds 100% of the Equity Interests in Shenzhen CCPower Corporation
(the “Company”);    

(2)Lender is a wholly foreign owned enterprises incorporated in Shenzhen in
accordance with the laws of People’s Republic of China;      (3)Borrower desires
to borrow from Lender for the operations of the Company by pledging his equity
in the Company to Lender as the guaranty hereof, and Lender agrees to provide
such loan to Borrower.

 

NOW, THEREFORE, The Parties made and entered into this Agreement with respect to
the Loan hereunder through friendly negotiation as follows:

 

1.Definitions

 

Except provided otherwise, the terms under this Agreement shall mean:

 

1.1“Assets Transfer” refers to the assignment of the Company’s assets to Lender
or its designated third party in accordance with the provisions of the exclusive
purchase option agreement (the “Exclusive Purchase Option Agreement”) executed
on the execution date of this Agreement;

 

1.2“Company” refers to Shenzhen CCPower Corporation, a domestic company which is
incorporated and validly existing under the PRC Laws, its business license No.
is 9144030074663507X7, and its registered address is 1705, Tower A, Haisong
Building, Tairan 9 Road,Chegongmiao, Futian District, Shenzhen;

 

1.3“Equity” or “Equity Interests” refers to one hundred percent (100%) of the
equity interests in the Company owned by Borrower;

 

1

 

 

1.4“Equity Transfer” refers to the assignment of Company’s Equity Interests held
by Borrower to Lender or its designated third party in accordance with the
provisions of the Exclusive Purchase Option Agreement;

 

1.5“Loan” refers to the Total Principal loaned to Borrower by Lender in
accordance with Article 2 hereunder;

 

1.6“PRC” refers to the People’s Republic of China, for the purpose of this
Agreement, excluding the Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan Province;

 

1.7“PRC Laws” refers to all PRC laws, administrative regulations and government
rules in effect now or as they may be modified throughout the term of this
Agreement;

 

1.8“RMB” refers to the legal currency within the PRC;

 

1.9“Shareholder” or “Borrower” refers to the owner of the Equity Interests in
the Company.

 

2.The Total Loan Amount

 

The total principal of the Loan hereunder is 10,000,000 RMB (“Total Principal”).

 

3.Term of the Loan

 

Unless otherwise provided, the term of Loan shall commence upon the obtaining of
the Loan by Borrower and expire when the Loan is completely repaid by Borrower
in accordance with the provisions of Article 6 hereunder or expressly waived in
writing by Lender.

 

4.Loan Usage

 

4.1The Total Principal of the Loan provided hereunder shall be used by Borrower
for the operations of the Company, and Borrower shall in no event change the
usage without the prior written consent by Lender. Borrower hereby covenants and
agrees to contribute, within two (2) working days immediately following the
funding of the Loan, the Total Principal of the Loan to the bank account of the
Company.

 

5.Loan Interest

 

5.1Except as provided in Section 5.2 hereunder, the Loan hereunder shall be
interest-free.

 

5.2When the Equity Transfer or the Assets Transfer set forth in the Article 6
hereof takes place and if the deemed value of the consideration of Equity
Transfer or consideration of Assets Transfer in accordance with Article 6 hereof
is higher than the Total Principal due to the requirement by the then applicable
law or any other reason, the excess shall be deemed to be interest on the Loan
(the “Interest”) to the maximum extent being permitted by the PRC Laws, and
shall be repaid to Lender by Borrower together with the Total Principal pursuant
to the consideration of Equity Transfer or consideration of Assets Transfer, as
the case may be, in accordance with Article 6 hereof. Borrower further agrees to
handle the balance in excess of the permitted Interest according to Lender’s
instruction.

 

2

 

 

6.Repayment

 

6.1The Loan shall become due and payable upon request of Lender after the
completion of the Equity transfer or the Assets transfer. Lender shall be
entitled to demand the repayment at any time by the delivery of a written notice
of demand for repayment sent by Lender to Borrower (“Repayment Notice”). The
Repayment Notice shall indicate Lender’s election for the Loan to be repaid by
way of the consideration of Equity Transfer or consideration of Assets Transfer
in accordance with Section 6.3, or by other manner set forth in the Repayment
Notice.

 

6.2Repayment Notice shall indicate the terms and conditions for repayment of the
Loan (“Repayment Terms”).

 

6.3Except as provided otherwise by Repayment Notice, Borrower shall repay the
Loan to Lender in accordance with the following provisions:

 

6.3.1In the event of an Equity Transfer under the Exclusive Purchase Option
Agreement, the Loan shall be repaid in full by way of Borrower’ payment to
Lender of the consideration of Equity Transfer paid by Lender to Borrower, net
of any tax paid by the Shareholder on such consideration (the “Consideration of
Equity Transfer”) (If the deemed value of the Consideration of Equity Transfer
is higher than the Total Principal, the excess shall be deemed to be Interests
of the Loan to the maximum extent being permitted by PRC Laws. Borrower further
agrees to handle the balance in excess of the permitted Interest according to
Lender’s instruction);

 

6.3.2In the event of an Assets Transfer, the Loan shall be repaid in full by way
of Borrower’ payment to Lender of his allocable portion, to the maximum extent
as permitted by PRC Laws, of the consideration paid by Lender to the Company for
the Assets Transfer, net of any tax paid by the Company or the Shareholder on
such consideration (the “Consideration of Assets Transfer”) (If the deemed value
of the Consideration of Assets Transfer is higher than the Total Principal, the
excess shall be deemed to be Interest on the Loan to the maximum extent being
permitted by PRC Laws. Borrower further agrees to handle the balance in excess
of the permitted Interest according to Lender’s instruction);

 

6.4If the deemed value of the Consideration of Equity Transfer or Assets
Transfer is lower than the Total Principal under this Agreement, Borrower shall
be exempted from the shortfall repayment obligation.

 

3

 

 

7.Conditions for Granting of the Loan

 

7.1Lender shall grant the Loan immediately following the receipt of the written
evidence which proves that the Parties have fulfilled all the following
conditions hereof (or subject to any waiver by Lender of any conditions as
follows):

 

7.1.1Lender has obtained all of the required licenses, permits, approvals and
registrations to open its capital account and current bank accounts and has
commenced its business;

 

7.1.2Borrower has signed the Equity Pledge Agreement set forth in Article 9
hereof; and

 

7.1.3The warranties and undertakings made by Borrower in Article 8 hereof shall
be true, correct and complete in all aspects when made, and shall be true,
correct and complete in all aspects during the term of the Loan.

 

7.2Borrower shall cause the Total Principal amount to be transferred directly to
the Company’s bank account for the operations of the Company.

 

8.Borrower’s Warranties and Undertakings

 

8.1Borrower hereby represents and warrants to Lender that, as of the execution
date of this Agreement:

 

8.1.1Borrower legally holds one hundred percent (100%) of the Equity Interests
in the Company and there are no other options, warrants, rights, agreements or
understandings by which any person has a right or claim to acquire from the
Company or from Borrower any equity interest in the Company;

 

8.1.2Except as otherwise provided in the Equity Pledge Agreement and Exclusive
Purchase Option Agreement, there is no pledge or other forms of encumbrances or
claims on the Equity Interests;

 

8.1.3There are no material debts which adversely affect the Loan borrowed by
Borrower from Lender;

 

8.1.4Borrower has obtained all the necessary written approvals and
authorizations from every relevant third party, if any, with respect to
Borrower’ execution and implementation of this Agreement; and

 

8.1.5Execution of this Agreement by Borrower shall not constitute any breach of
the Article of Associations of the Company.

 

8.2Borrower undertakes, and will also cause the Company to undertake, the
followings:

 

8.2.1Except as otherwise provided in the Equity Pledge Agreement and Exclusive
Purchase Option Agreement and other agreements signed among Borrower, the
Company and the Lender, without Lender’s prior written consent, Borrower and
Company shall not transfer, sell, mortgage or otherwise dispose of or encumber
any assets or incomes of the Company;

 

4

 

 

8.2.2Without Lender’s prior written consent, Borrower shall not engage in any
business or operation which is in competition with the Company, the Company’s
owned or controlled subsidiaries and Lender, nor shall Borrower invest in or
work for any company or entity which is in competition with the Company, the
Company’s owned or controlled subsidiaries, or Lender;

 

8.2.3Without Lender’s prior written consent, Borrower shall not take action to
supplement or amend the Articles of Association of the Company, nor to increase
or decrease the registered capital or change the shareholding structure of the
Company in any manner;

 

8.2.4Without Lender’s prior written consent, Borrower or the Company shall not
take action to, and shall prevent the Company from taking action to approve,
cause or allow the dissolution, liquidation or change of legal form of the
Company or any of its owned and controlled subsidiaries;

 

8.2.5Without Lender’s prior written consent, the shareholder’s meeting of the
Company shall not approve, cause or allow any profit distribution proposal, nor
shall Borrower accept such distributed dividends; at Lender’s request, Borrower
shall promptly convene the shareholder’s meeting of the Company for the purpose
of allocating the Company’s distributable profits, approve for the profit
distribution proposal, which has been approved by Lender in writing in advance,
and accept such distributed dividends;

 

8.2.6At Lender’s request, Borrower shall provide Lender with all information
regarding the Company’s business operation and financial condition;

 

8.2.7Without Lender’s prior written consent, Borrower shall not incur or succeed
to any debts or liabilities which may adversely affect his Equity Interests;

 

8.2.8Borrower shall appoint, and appoint only, the candidates nominated by
Lender to the board of directors and supervisor office of the Company, and shall
not replace such candidates without Lender’s written consent;

 

8.2.9Except as Lender may otherwise consent in writing in advance, Borrower
shall not cause the Company shareholder’ meeting and the board of directors to
approve any establishment of new subsidiary, any acquisition by, any
consolidation with, or any investment in any third party;

 

8.2.10Borrower shall promptly notify Lender of any pending or threatened
lawsuit, arbitration or administrative disputes which involve the assets,
business or incomes of the Company; and make every effort to take action to
resolve such lawsuit, arbitration or administrative disputes for safeguarding
the legal rights and interests of the Company;

 

8.2.11Without Lender’s prior written consent, Borrower shall not take action to
approve, cause or allow any conduct that could materially affect the Company’s
assets, business or liabilities; and

 

8.2.12Borrower shall strictly comply with the provisions of this Agreement, and
effectively perform its obligations hereunder, and shall be prohibited from
committing any conduct which may affect the validity or enforceability of this
Agreement.

 

5

 

 

9.Guaranty of the Loan

 

To secure the repayment of the Loan hereunder, Borrower agrees to pledge all his
Equity Interests in the Company to Lender, and all Parties agree to execute the
Equity Pledge Agreement with respect thereto.

 

10.Tax and Expense

 

10.1The Parties shall pay their respective taxes and expenses in relation to the
execution and performance hereof in accordance with the PRC Laws. Borrower may
charge his taxes and expenses in relation to the execution and performance
hereof to the Company, upon Lender’s prior approval.

 

10.2Lender shall pay the taxes and expenses in accordance with Section 6.4
hereof (if applicable).

 

11.Assignment of Agreement

 

11.1Borrower shall not transfer any or all of his rights and obligations under
this Agreement to any third party without the prior written consent of Lender.

 

11.2The Parties agree that Lender shall be allowed, at its own discretion, to
transfer any or all of its rights and obligations under this Agreement to any
third party upon the delivery of a five (5)–day written notice to Borrower.

 

12.Liabilities and Indemnities for Breach of this Agreement

 

12.1If Borrower fails to use the Loan in compliance with the terms and
conditions of this Agreement, Lender may require Borrower to promptly repay the
unduly used part.

 

12.2If Borrower breaches any warranty or undertaking as provided in Article 8 or
other provisions under this Agreement hereof, or the Company breaches any
provisions provided in the Technology Service Agreement, Consigned Management
and Service Agreement or Exclusive Purchase Option Agreement or other agreements
signed among Borrower, the Company and Lender, and fail to redress such breach
within fifteen (15) days upon receipt of the written notice from Lender, Lender
shall be entitled to request Borrower to repay the granted Loan immediately.

 

12.3If Borrower fails to repay the Loan in compliance with the terms and
conditions of this Agreement, Borrower should pay a damage of 0.03% of the
unpaid part of the repayable Loan on each day of delay to Lender. If the
repayment is delayed for more than fifteen (15) days, Lender is entitled to
foreclose its equity pledge rights in accordance with the Equity Pledge
Agreement.

 

13.Effectiveness, Modification and Cancellation

 

13.1This Agreement shall take effect on the date of execution hereof by the
Parties.

 

13.2The modification of or amendment to this Agreement shall not be effective
without written agreement of the Parties through the negotiation.

 

6

 

 

13.3This Agreement shall not be terminated or canceled without written agreement
through negotiation, provided Lender may, by delivering a thirty (30)-day prior
notice to Borrower hereto, terminate this Agreement.

 

13.4Unless Lender fails to grant the Loan as required hereunder after the
satisfaction of all conditions as set forth in Section 7.1 hereunder by
Borrower, Borrower shall not be entitled to unilaterally terminate this
Agreement.

 

14.Confidentiality

 

14.1The negotiation, execution and articles of this Agreement and any
information, documents, data and all other materials (herein “Confidential
Information”) arising out of the implementation of this Agreement, shall be kept
in strict confidential by the Parties. Without the written approval by the other
Parties, neither of the Parties shall disclose to any third parties any
Confidential Information, but the following shall not be considered to be
“Confidential Information”:

 

(1)The materials that are known by the general public (but not including the
materials disclosed by a party receiving the materials in breach of this
Agreement); or    

(2)The materials required to be disclosed subject to the applicable laws or the
rules or provisions of any stock exchange.

 

The materials disclosed by each Party to its legal or financial consultants
relating to the transactions under this Agreement, provided the legal or
financial consultants shall comply with the confidentiality set forth in this
Section. The disclosure of the confidential materials by staff or employed
institution of any Party shall be deemed as the disclosure of such materials by
such Party, and such Party shall bear the liabilities for breaching the
contract.

 

14.2This Article shall survive whatever this Agreement is invalid, amended,
revoked, terminated or unable to implement by any reason.

 

15.Force Majeure

 

15.1“Force Majeure” refers that any event that could not be foreseen, and could
not be avoided and overcome, which includes among other things, but without
limitation, acts of nature (such as earthquake, flood or fire), government acts,
strikes or riots;.

 

15.2If an event of Force Majeure occurs, any of the Parties who is prevented
from performing its obligations under this Agreement by an event of Force
Majeure shall notify the other Party without delay and within fifteen (15) days
of the event provide detailed information about and notarized documents
evidencing the event and take appropriate means to minimize or remove the
negative effects of Force Majeure on the other Party, and shall not assume the
liabilities for breaching this Agreement. While the Force Majeure is continuing,
the Party alleging breach may suspend his performance. The Parties shall keep on
performing this Agreement after the event of Force Majeure disappears.

 

7

 

 

16.Governing Law and Dispute Resolution

 

16.1The effectiveness, interpretation, implementation and dispute-resolution
related to this Agreement shall be governed under PRC Laws.

 

16.2Any dispute arising out of this Agreement shall be resolved by Parties
through mutual negotiation. If Parties could not reach an agreement within
thirty (30) days since the dispute is brought forward, any Party may submit the
dispute to China International Economic and Trade Arbitration Commission in
Beijing for arbitration under its applicable rules, the language of arbitration
proceedings shall be English. The arbitration award should be final and binding
upon both parties.

 

16.3During the process of dispute-resolution, Parties shall continue to perform
other terms under this Agreement, except for provision of dispute resolution.

 

17.Miscellaneous

 

17.1The Parties acknowledge that this Agreement constitutes the entire agreement
of the Parties with respect to the subject matters therein and supersedes and
replaces all prior or contemporaneous oral or written agreements and
understandings.

 

17.2This Agreement shall bind and benefit the successor of each Party and the
transferee permitted hereunder with the same rights and obligations as if the
original parties hereof.

 

17.3Any notice required to be given or delivered to the Parties hereunder shall
be in writing and delivered to the address as indicated below or such other
address or as such party may designate, in writing, from time to time. All
notices shall be deemed to have been given or delivered upon by personal
delivery, fax and registered mail. It shall be deemed to be delivered upon: (1)
registered air mail: five (5) business days after deposit in the mail; (2)
personal delivery or by fax: two (2) business days after transmission. If the
notice is delivered by fax, it should be confirmed by original through
registered air mail or personal delivery:

 

Borrower: Wei Zhixiong

Address: 1705, Tower A, Haisong Building, Tairan 9 Road,Chegongmiao, Futian
District, Shenzhen;

Tel: 0755-8348-7878

Fax: 0755-8348-7881

 

Lender: Shenzhen CCPower Investment Consulting Co., Ltd.

Contact person: Renyan GE

Address: 1705, Tower A, Haisong Building, Tairan 9 Road, Chegongmiao, Futian
District, Shenzhen, PRC;

Tel: 136-3266-8228

 

8

 

 

17.4If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
portions shall not in any way be affected or impaired thereby. In such event,
the Parties shall use best efforts to negotiate, in good faith, a substitute,
valid and enforceable provision or agreement which effects the Parties original
intention to the largest extent.

 

17.5This Agreement shall be executed in English and Chinese language versions,
each of which shall have equal validity. However, in the event of any
inconsistency between the two, the English language version shall govern and
control.

 

17.6This Agreement is executed in two (2) copies with each of the person signing
this Agreement holding one copy. Each of copy shall be equally valid and
authentic.

 

9

 

 

IN WITNESS THEREFORE, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.

 

For and on behalf of

 

Borrower:

 

Shareholder of Shenzhen CCPower Corporation

 

Wei Zhixiong: /s/ Wei Zhixiong  

 

Lender:

 

Shenzhen CCPower Investment Consulting Co., Ltd.

 

Legal Representative: Renyan GE         Signature & Seal: /s/ Renyan Ge  

 

10