ex10_11.htm


    
       Exhibit
10.11 

       

    

     Short-term
Loan Contract 

    


     Contract
NO. 2008-0012, Nanxin
Branch, CIB Shenzhen 

     Lender: CIB
Shenzhen 

     Postcode:
518052 

     Phone#
26077176  Fax# 26077085 

    


     Borrower: Shenzhen
Xie Qin Industrial Ltd. 

     Postcode:
518054 

     Phone#
26012478  Fax# 26012225 

    


     This
contract was signed at CIB Shenzhen Branch, CIB Building, Futian district,
Shenzhen. 

    


     The
Borrower applied for a short-term loan from The Lender for business use, The
Lender agreed to provide a loan to the Borrower. The Lender and the Borrower
reached an agreement on the following Terms and Conditions: 

    


    
       I. 
       General
Contract 

    

     This
Contract is a sub-contract of General Credit
Line Contract, NO.
2008-0004, Nanxin Branch, CIB Shenzhen, which provides
RMB30,000,000
credit line to the Borrower. The credit line starts on September
25, 2008 and ends on September
25, 2009. 

    


    
       II.       
Loan
amount 

    

     The
Lender agreed to provide a loan of RMB5,
000,000 

    


    
       III.      The
use of Loan 

    

     This
loan shall be used for customs
duty. 

    


    
       IV.     
Loan
Duration 

    

     This
loan duration will be 6
months, which starts on September
25, 2008 and ends on March 25,
2009. 

    


    
       V.      
Loan
interest 

    

     Interest
for this loan is
6.831% per year. This interest is fixed regardless of the national bank
interest change. 

    


    
       VI.      Interest
payment 

    

     Interest
shall be paid on the
20th of
each month, the Borrower shall pay interest on a monthly basis, and the Borrower
shall pay off the interest before the due date of the loan. 

    


    
      	
               VII.   

            	
               Defaut
      interest and compound interest 

            


    

    
      	
               1   

            	
               For
      amounts overdue on the loan and if the loan is used for purposes not
      stipulated in this contract, the Lender has the right to charge defaut
      interest on the overdue amount or the amount used for other purposes as
      per the stipulated interest. For overdue interest, the Lender has the
      right to charge compound
interest. 

            


    

     

    
      
        
        

      

      
         1 

        
          

        

      

      
        
        

      

       

    

    
      	
               2   

            	
               For
      overdue loan, defaut interest shall be charged as
    follows: 

            


    

    
      	   	
               2.1   

            	
               The
      Lender shall charge defaut interest and compound interest for overdue
      period, the defaut interest rate is a 50%
      increase on the fixed loan
interest. 

            


    

    
      	
               3   

            	
               For
      loan used for other purposes not stipulated in this contract, defaut
      interest shall be charged as
follows: 

            


    

    
      	   	
               3.1   

            	
               The
      Lender shall charge default interest and compound interest for the period
      the amount was used, the default interest rate is a 100%
      increase on the fixed loan
interest. 

            


    

    
      	
               4   

            	
               The
      charge of compound interest shall be in complying with the terms and
      conditions of this contract. 

            


    

    


    
      	
               VIII.   

            	
               Repaying
      of principal and interest 

            


    

    
      	
               1   

            	
               The
      Borrower should pay off principal and interest on the date stipulated in
      this contract. 

            


    

    
      	
               2   

            	
               The
      Borrower shall get the Lender’s consent if the Borrower wants to prepay
      the loan, and the Lender has the right to charge interest based on the
      loan duration stipulated in this
contract. 

            


    

    
      	
               3   

            	
               Loan
      under this contract is a loan of foreign currency, the Borrower shall pay
      off the principal and interest in the same currency as was
      borrowed. 

            


    

    
      	
               4   

            	
               The
      Borrower hereby irrepealably authorizes the Lender to access any of the
      Borrower’s bank accounts for principal and interest as per Term #11 and
      Terms#12. 

            


    

    


    
      	
               IX.   

            	
               Guarantee 

            


    

    
      	
               1   

            	
               The
      first guarantee for Contract
      NO. 2008-0004A Nanxin Branch, CIB Shenzhen, The
      Highest Credit Line Guarantee Contract is the guarantee of the
      guarantor SinoHub
      Electronics Shenzhen
Ltd. 

            


    

    
      	
               2   

            	
               The
      second guarantee for Contract
      NO. 2008-0004B Nanxin Branch, CIB Shenzhen, The
      Highest Credit Line Guarantee Contract is the guarantee of the
      guarantor Shenzhen
      Yin Zhao Co., Ltd. 

            


    

    
      	
               3   

            	
               The
      third guarantee for Contract
      NO. 2008-0004A Nanxin Branch, CIB Shenzhen, The
      Highest Credit Line Guarantee Contract is the personal guarantee of
      Lei
      Xia as a pledgor. 

            


    

    
      	
               4   

            	
               The
      fourth guarantee for Contract
      NO. 2008-0004B Nanxin Branch, CIB Shenzhen, The
      Highest Credit Line Guarantee Contract is the personal guarantee of
      Christina
      Cui as a pledgor. 

            


    

    
      	
               5   

            	
               The
      fifth guarantee (mortgage) for Contract
      NO. 2008-0004 Nanxin Branch, CIB Shenzhen, The
      Highest Mortgage Contract is a Mortgage on a property owned
      jointly (50/50) by HENRY
      THOMAS COCHRAN and LINDA MARIE HETUE (together the
      Mortgagor). 

            


    

     

    
      	
               X.   

            	
               Representations
      and Warranties 

            


    

    
      	
               1   

            	
               The
      Borrower hereby represents to the
Lender: 

            


    

    
      	   	
               1.1   

            	
               The
      Borrower is a registered company, and legally exists during the loan
      duration. The Borrower has the right to sign and fulfill this
      contract. 

            


    

    
      	   	
               1.2   

            	
               The
      loan under this contract has been approved by the Board of Directors or
      the CEO of the Borrower, and is in comply with Laws, regulations, policies
      and Articles of Association. Otherwise, the Borrower shall take all the
      responsibilities and the Lender is not
  responsible. 

            


    

     

    
      
        
        

      

      
         2 

        
          

        

      

      
        
        

      

       

    

    
      	   	
               1.3   

            	
               Unless
      specified in the information provided to the Lender, the Borrower shall
      have no mortgage, pledge, lien and other debt, no outstanding litigation,
      arbitration and insolvency
proceedings. 

            


    

    
      	   	
               1.4   

            	
               The
      Borrower did not cover up any of the following events that have taken
      place or are about to occur so that the Lender may not agree with granting
      loans: 

            


    

    
      	   	   	
               1.4.1   

            	
               The
      Borrower or the Borrower's principal leaders involved in a major violation
      of law and regulations, or
claims, 

            


    

    
      	   	   	
               1.4.2   

            	
               Pending
      litigation, arbitration case, 

            


    

    
      	   	   	
               1.4.3   

            	
               The
      Borrower’s debt or assumed debt, or guarantee, mortgage, pledge security
      provided to a third-party, 

            


    

    
      	   	   	
               1.4.4   

            	
               The
      Borrower occurred in an event of default with any other
      loaners  under
contract, 

            


    

    
      	   	   	
               1.4.5   

            	
               Other
      things that may affect the financial condition and liquidity situation of
      the Borrower. 

            


    

    


    
      	
               2   

            	
               The
      Borrower hereby warrants to the
Lender: 

            


    

    
      	   	
               2.1   

            	
               The
      Borrower shall provide authentic documents, statements, certifications as
      per the Lender’s request. 

            


    

    
      	   	
               2.2   

            	
               The
      Borrower shall open a bank account at CIB Shenzhen, and make transactions
      through that bank account. 

            


    

    
      	   	
               2.3   

            	
               The
      use of the loan shall be in compliance with this contact and the loan
      shall not be diverted for other use. The Borrower shall not use the loan
      for equity investment, or for speculation in securities, futures, real
      estate or the like. The Borrower shall not use the loan for
      inter-enterprise lending activities or other illegal activities. And the
      Borrower shall not divert or misappropriate funds derived from the
      loan. 

            


    

    
      	   	
               2.4   

            	
               The
      Borrower shall at any time agree and cooperate with the Lender to inspect
      the use the loan, business operations, financial activities, inventory of
      goods, assets and liabilities, bank deposits and cash on
      hand. 

            


    

    
      	   	
               2.5   

            	
               The
      Borrower shall provide full and approved guarantees that have been agreed
      to by the Lender. 

            


    

    
      	   	
               2.6   

            	
               The
      Borrower shall not reduce the registered capital in any
      way. 

            


    

    
      	   	
               2.7   

            	
               Without
      the written consent of the Lender, the Borrower shall not transfer part or
      all of the obligations under this contract to a third
      party. 

            


    

    
      	   	
               2.8   

            	
               Major
      changes in the ownership and business operation adjustment (including, but
      not limited to, signing a joint venture or co-operation contract with a
      foreign corporation, or a Hong Kong, Macao or Taiwan corporation; revoking
      the license of, closing, shutting down of production, changing of
      products, spin-off of any business, acquisition, merger; re-establish or
      alteration to a joint-stock company; making investments in joint-stock
      companies or investment companies by using fixed assets such as houses and
      equipment, or intangible assets such as trademarks, patents, proprietary
      technology, land use rights,  transactions on property rights,
      business operation rights by leasing, contracting, joint venture) shall
      get the written consent of the Lender in
  advance. 

            


    

    


    
      
        
        

      

      
         3 

        
          

        

      

      
        
        

      

       

    

    
      	
               3   

            	
               Guarantor
      (or mortgagor, pledgor) hereby
commits: 

            


    

     When
the Borrower fails to fulfill obligations, regardless that the Lender may have
other guaranties under this contract (including but not limited to, warranty,
mortgage, pledge, bank line, or any other forms of guaranty methods), the Lender
has the right to request a guarantor (or mortgagor, pledgor) to take all
responsibilities under this contract, without exercising other guaranty
rights. 

    


    
      	
               XI.   

            	
               Advance
      loan collection 

            


    

     Under
the following circumstances the Lender has the right to collect the loan ahead
of schedule. The Lender has the right to access to any of the Borrowers accounts
for recovery of money. 

    
      	
               1   

            	
               The
      Borrower owes loan interest. 

            


    

    
      	
               2   

            	
               The
      Borrower has an operating loss or a sharp economic
      decline. 

            


    

    
      	
               3   

            	
               The
      Borrower is involved in or is about to be involved in litigation,
      arbitration or other legal
disputes. 

            


    

    
      	
               4   

            	
               The
      Borrower provides untrue reports or
  information. 

            


    

    
      	
               5   

            	
               The
      Borrower uses the loan for purposes not stipulated in this
      contract. 

            


    

    
      	
               6   

            	
               The
      Borrower refuses to have the Lender to inspect or supervise its operating
      and financial activities, or refuses to provide reports or
      information. 

            


    

    
      	
               7   

            	
               The
      Borrower has major personnel
changes. 

            


    

    
      	
               8   

            	
               Other
      situations that may jeopardize the loan
  security. 

            


    

    


    
      	
               XII.   

            	
               Liabilities 

            


    

    
      	
               1   

            	
               The
      following circumstances constitute a breach of this
      Contract: 

            


    

    
      	   	
               1.1   

            	
               The
      Borrower does not repay principal and interest on time in accordance with
      this contract. 

            


    

    
      	   	
               1.2   

            	
               The
      Borrower violates the Representations and Warranties as per Chapter 10 in
      this contract. 

            


    

    
      	   	
               1.3   

            	
               The
      Borrower violates other provisions of this
  contract. 

            


    

    


    
      	
               2   

            	
               When
      a breach of this Contract happens, the Lender has the right to take one or
      all of the actions as follows: 

            


    

    
      	   	
               2.1   

            	
               Order
      the Borrower to correct violations in a time
  limit. 

            


    

    
      	   	
               2.2   

            	
               Stop
      the Borrower from withdrawing
money. 

            


    

    
      	   	
               2.3   

            	
               Terminate
      the loan contract, and require the Borrower to repay mature or undue
      principal and interest. 

            


    

    
      	   	
               2.4   

            	
               The
      Lender has the right to charge defaut interest for overdue loan
      amounts. 

            


    

    
      	   	
               2.5   

            	
               The
      Lender has the right to charge defaut interest on non-specified use of the
      loan. 

            


    

    
      	   	
               2.6   

            	
               The
      Lender has the right to charge compound interest on overdue loan
      amounts. 

            


    

    
      	   	
               2.7   

            	
               The
      Lender has the right to recover money from any of the Borrower’s bank
      accounts for owed principal and interest, and exchange the currency as per
      the bank rate when necessary. 

            


    

    
      	   	
               2.8   

            	
               The
      Lender has the right to take legal means to recover the loan principal and
      interest; all costs arising from litigation activities shall be borne by
      the Borrower. 

            


    

     

    
      
        
        

      

      
         4 

        
          

        

      

      
        
        

      

      
        


        
          	
                   3   

                	
                   In
      the case that the Lender does not provide loans to the Borrower in
      accordance with the agreed date and the amount, which results in a loss
      for the Borrower, the Lender shall pay the
  loss. 

                


        

         

      

    

    
      	
               4   

            	
               The
      Lender has the right to take actions in accordance with the provisions of
      this contract when a guarantor (or mortgagor, pledgor) has any of the
      following situations: 

            


    

    
      	   	
               4.1   

            	
               The
      guarantor violates this contract, or the guarantor’s credit has
      deteriorated, or the guarantor is not competent to support the
      guarantee. 

            


    

    
      	   	
               4.2   

            	
               The
      Mortgagor violates this contract, intentionally damages collateral, or the
      collateral value has been or may be significantly reduced, or other
      incidents happen which damage the Lender’s lien on the
      mortgage. 

            


    

    
      	   	
               4.3   

            	
               Any
      pledgor violates this contract, or any pledged property value has been or
      may significantly reduced, or the right to pledge must be fulfilled before
      the settlement of the loan, or other incidents happen which damage the
      Lender’s right on the pledge. 

            


    

    


    
      	
               XIII.   

            	
               Jurisdiction 

            


    

     The
signing, legal validity, interpretation, performance or disputes of this
contract shall apply to the law of the People's Republic of China. During the
term of the contract, all controversy and dispute shall be dealt through
negotiation. If the parties are unable to reach an agreement, either the Lender
or the Borrower may demand for arbitration by the Shenzhen Arbitration
Committee. 

    


    
      	
               XIV.   

            	
               Term
      of this Contract 

            


    

     This
contract shall enter into force after the following conditions: 

    
      	
               1   

            	
               Both
      parties have signed or chopped this
  contract. 

            


    

    
      	
               2   

            	
               The
      guarantee contracts under this contract have entered into
      force. 

            


    

    
      	
               3   

            	
               The
      Lender requests for a notarization for this contract, and notarization
      procedures are fulfilled
legally. 

            

 This
contract shall cease to be in effect once the loan principal and interest and
other debts are paid. 

    


    
      	
               XV.   

            	
               Copies 

            


    

     This
Agreement will be executed in triplicate, both parties and the notary agency
will have one copy. 

    


    
      	
               XVI.   

            	
               Supplementary
      provisions 

            


    

    


    


     Signature
Page Follows 

    


     5