Document:

ex103.htm

EXHIBIT 10.3

 

Renminbi Working Capital Loan Agreement

[unofficial translation]

Agreement No.: JC20111260 (Business Dept.)

Borrower (Party A): Shenzhen Dasen Communication Technology Co., Ltd.

Address: Room 11C2, Tianxiang Building, Chegongmiao, Futian District, Shenzhen (only for office)

Postal code:

Legal representative (Person in-charge): Lin Xiangfeng

Fax:                                                                Tel.:

Lender (Party B): China Construction Bank Corporation Limited Shenzhen Branch

Address: Building A, Rongchao Business Center, No. 6003, Yitian Road, Futian District, Shenzhen

Postal code:

Person in-charge: Liu Jun

Fax:                                                                Tel.:

Whereas Party A applies for a loan from Party B for the purpose of purchasing Apple’s series products, and Party B agrees to grant a loan to Party A, this Agreement is made between the Parties by mutual agreement in accordance with the relevant laws and regulations as following:

Article 1 Amount of Loan

Party A borrows an amount of RMB 10,000,000 (in capital: RMB ten million in total) from Party B.

Article 2 Purpose of Loan and Source of Repayment

Party A shall use the loan for daily production and business turnover. Refer to Annex 1 “Basic Information on the Loan” for the specific purpose of loan and source of repayment under this Agreement.

Article 3 Term of Loan

 

The term of the loan agreed in this Agreement is eighteen months, from December 29, 2011 to June 28, 2013.

In case the start date of the term of loan under this Agreement is not consistent with loan deposit voucher (certificate of indebtedness, the same below), the actual granting date specified in loan deposit voucher for the first granting shall prevail, and the maturity of loan agreed in Paragraph 1 of this Article shall be adjusted accordingly.

Loan deposit voucher is an integral part of this Agreement and has the same legal effect with this Agreement.

 

  

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Article 4 Loan Interest Rate, Penalty Interest Rate, Interest Calculation and Settlement

4.1 Loan Interest Rate

The loan interest rate under this Agreement is annual interest rate, the method set out in       4.1.4shall apply:

4.1.1 Fixed interest rate that is / %, which remains unchanged during the term of loan;

4.1.2 Fixed interest rate that is _ /_(optional “floating up” or “floating down”) based on the benchmark interest rate _ /_on the date of value, which remains unchanged during the term of loan;

4.1.3 Floating rate that is _ /_ (optional “floating up” or “floating down”) based on the benchmark interest rate _ /_on the date of value, which shall be adjusted for one time according to the benchmark interest rate on the date of interest rate adjustment and the aforesaid floating ratio every __/_month(s) from the date of value until the date when all principal and interest having been paid off. The date of interest rate adjustment is the corresponding date to the date of value in the month of making adjustment, in case no corresponding date to the date of value, the last day of that month is the date of interest rate adjustment.

4.1.4 Interval interest rate, which is determined between the interval floating down (optional “floating up” or “floating down”) 5 % on the benchmark interest rate on the date of drawing and floating up (optional “floating up” or “floating down”) 60 % on the benchmark interest rate on the date of drawing. The specific interest rate for a single drawing shall be subject to the Advice of Drawing under this Agreement, and shall be adjusted for one time according to the benchmark interest rate on the date of interest rate adjustment and the aforesaid floating ratio every _3__months from the date of drawing until the date when all principal and interest under this Agreement having been paid off. The date of interest rate adjustment is the corresponding date to the date of drawing in the month of making adjustment, in case no corresponding date to the date of drawing, the last day of that month is the date of interest rate adjustment.

The date of drawing is the date when the loan granted for each time is deposited to the loan-granting account agreed by the Parties.

The benchmark interest rate under this Agreement refers to the lending rate at the same grade in corresponding term set by the People's Bank of China on the date of drawing; thereafter, in case the lending rate is adjusted according to the aforesaid agreement, the benchmark interest rate refers to the lending rate at the same grade in corresponding term set by the People's Bank of China on the date of adjustment; in case no lending rate at the same grade in corresponding term is set by the people's Bank of China, the benchmark interest rate refers to the lending rate at the same grade in corresponding term recognized or generally applied by the Banking Association on the date of adjustment, except otherwise agreed by both Parties.

4.1.5 ______________________/____________________________

4.2 Penalty Interest Rate

4.2.1 In case Party A fails to use the loan in accordance with the Agreement, the penalty interest rate shall float up 100 % on the lending rate, in case the lending rate is adjusted according to Article 4.1.3 and 4.1.4, the penalty interest rate shall be adjusted according to the adjusted lending rate and the above floatation range at the same time.

4.2.2 The penalty interest rate for the overdue loan under this Agreement shall float up 50 % on the lending rate, in case the lending rate is adjusted according to Article 4.1.3 and 4.1.4, the penalty interest rate shall be adjusted according to the adjusted lending rate and the above floatation range at the same time.

4.2.3 For overdue loan and loan used for other purposes, penalty interest rate or double rate should be imposed subject to the severity.

4.3 The date of value under this Article is the date when the loan granted for the first time is deposited to the loan-granting account agreed in Article 6 of this Agreement (hereinafter referred to as “loan-granting account").

When the loan is granted for the first time under this Agreement, the benchmark interest rate refers to the lending rate at the same grade in corresponding term announced and effected by the people's Bank of China on the date of value; thereafter, in case the lending rate is adjusted according to the aforesaid agreement, the benchmark interest rate refers to the lending rate at the same grade in corresponding term announced and effected by the people's Bank of China on the date of adjustment; in case no lending rate at the same grade in corresponding term is announced and effected by the people's Bank of China, the benchmark interest rate refers to the lending rate at the same grade in corresponding term recognized or generally applied by the Banking Association on the date of adjustment, except otherwise agreed by both Parties.

4.4 The loan interest shall be calculated from the date that the loan is deposited to the loan-granting account. The interest under this Agreement shall be calculated on a daily basis, daily rate = annual rate / 360. In case Party A fails to pay the interest as per the date of value agreed in this Agreement, compound interest will be calculated from the next date.

4.5 Interest settlement

4.5.1 The interest for the loan with a fixed interest rate shall be calculated according to the agreed interest rate on settlement; the interest for the loan with a floating interest rate shall be calculated according to the interest determined for each floating period when settlement; in case the interest rate is floating for several times during a single interest period, the interest for the interest period shall be calculated by totaling up the interest of each floating period.

4.5.2 The interest under this Agreement shall be settled according to the method of 4.5.2.1    set out following:

4.5.2.1 Monthly settlement, settlement date is fixed to the 20th of every month;

4.5.2.2 Quarterly settlement, settlement date is fixed to the 20th of the last month in each quarter;

4.5.2.3 _____________________/___________________________

 

  

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Article 5 Granting and Payment

5.1 Conditions of granting a loan

Unless Party B waives the conditions in whole or in part, Party B shall not have the obligation to grant a loan until all of the following conditions having been satisfied on a continuous basis:

1. Party A has completed the approval, registration, delivery, insurance and other legal procedures related to the loan under this Agreement;

2. In case a guarantee is established in this Agreement, the guarantee approved by Party B has become effective;

3. Party A has opened the account for withdrawal and repayment purpose in accordance with the requirements of Party B;

4. No breach of the Agreement by Party A;

5. No occurrence of any circumstances agreed by both Parties in the Agreement which will possibly endanger creditor’s rights of Party B;

6. Laws and regulations, rules or competent authorities do not prohibit and restrict Party B to grant the loan under this Agreement;

7. Party A’s financial status conforms to the requirements set forth in Annex 2 “Binding Clause of Financial Indicators” on a continuous basis.

8. Party A has submitted the relevant materials in accordance with the Agreement before granting the loan;

9. The materials provided by Party A to Party B are legal, accurate, complete and in line with the other requirements of Party B;

10. Other conditions:

Conditions of granting loan: (1) Party A shall open a basic account in Party B; (2) Secured promissory note is issued by security company, and the secured amount, term and repayment method of which shall be consistent with the credit approval.

5.2 Loan drawdown plan

Loan drawdown refers to an action that Party B, according to Party A’s request and this Agreement, release the loan funds to the loan-granting account.

Loan drawdown plan is determined by the method of    5.2.4   set out as following:

5.2.1 Loan drawdown plan is as following:

1. ___/____ (MM) ___/___ (DD), ____/___ (YY), Amount_____/________;

2. ___/____ (MM) ___/___ (DD), ____/___ (YY), Amount_____/________;

3. ___/____ (MM) ___/___ (DD), ____/___ (YY), Amount_____/________;

4. ___/____ (MM) ___/___ (DD), ___/____ (YY), Amount_____/________;

5. ___/____ (MM) ___/___ (DD), ___/____ (YY), Amount____/_________;

6. ___/____ (MM) ___/___ (DD), ___/____ (YY), Amount____/_________;

5.2.2 Loan drawdown plan is as following:

1. ___/____(MM) ___/___(DD), ___/____(YY) to___/____(MM) ____/__(DD), ____/___(YY), Amount______/_______;

2. ___/____(MM) ______(DD), ___/____(YY) to___/____(MM) __/____(DD), ___/____(YY), Amount_____/________;

3. ___/____(MM) ___/___(DD), ____/___(YY) to____/___(MM) __/____(DD), ___/____(YY), Amount_____/________;

4. __/_____(MM) __/____(DD), _____/__(YY) to____/___(MM) ___/___(DD), ___/____(YY), Amount____/_________;

5. ___/____(MM) __/____(DD), ___/____(YY) to___/____(MM) ___/___(DD), ___/____(YY), Amount______/_______;

6. ___/____(MM) ___/___(DD), ____/___(YY) to___/____(MM) __/____(DD), ___/____(YY), Amount_____/________;

5.2.3 Apply for payment at any time on the actual needs of Party A.

5.2.4 As per the terms agreed by the Parties.

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5.3 Party A shall use the loan in accordance with the agreed loan drawdown plan, and shall not advance, delay, spilt or cancel to use the loan without the written consent of Party A.

5.4 In case of drawdown at installment by Party A, the maturity date of the loan shall still be determined in accordance with Article 3 of this Agreement.

5.5 Documentation to be provided by Party A

The Parties choose    5.5.2      (optional 5.5.1 or 5.5.2) as the agreement applicable to the materials to be provided by Party A:

 

  

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5.5.1

1. In case    /      of the following circumstances is satisfied:

(1) The amount of a single loan drawdown exceeding RMB10, 000,000, and the amount of payment under such drawdown exceeding RMB10, 000,000;

(2)                                /

                                  /

Then Party A shall provide the following documentation no later than   5  working days before a loan drawdown:

(1) Loan deposit voucher signed by Party A and vouchers of clearing signed by Party A;

(2) Transaction information (including but not limited to commodity, service, capital contract and/or invoice and other written or electronic documentation to prove the specific purpose of capital fund);

                               /

                               /

As well as other documentation required by Party B (including but not limited to business license, authorization, the articles of association, resolution of the shareholders' meeting or the board of directors of Party A’s counterpart).

2. Except the agreed circumstance in (1) above, or Party B considers Party A may adopt the method of direct payment by Party A as agreed in Article 5.7 after examination, Party A shall provide the following materials to Party B no later than 5  working days before a loan drawdown:

(1) Capital Use Plan corresponding to the loan to be granted (see Annex 3 for the format of Capital Use Plan);

(2) Loan deposit voucher signed by Party A;

__________________________________/______________________________

__________________________________/______________________________

As well as other documentation required by Party B (including but not limited to business license, authorization, the articles of association, resolution of the shareholders' meeting or the board of directors of Party A’s counterpart).

5.5.2 No matter what the amount is of a single drawdown, Party A shall provide the following documentation to Party B not later than  3  working days before a loan drawdown:

(1) Loan deposit voucher signed by Party A and vouchers of clearing signed by Party A;

(2) Transaction information (including but not limited to commodity, service, capital contract and/or invoice and other written or electronic documentation to prove the specific purpose of capital fund);

                               /

                               /

As well as other documentation required by Party B (including but not limited to business license, authorization, the articles of association, resolution of the shareholders' meeting or the board of directors of Party A’s counterpart).

5.6 Entrusted payment by Party B

5.6.1 Circumstances of Application for entrusted payment by Party B

In case   (2)  of the following circumstances is satisfied, entrusted payment by Party B shall be applied, namely: Party A shall irrevocably entrust Party B to transfer the loan capital to Party A’s counterpart, and shall not pay the loan capital to the counterpart or any other third party by itself.

(1) The amount of a single loan drawdown exceeding RMB 10,000,000, and the amount of payment under such drawdown exceeding RMB 10,000,000, and Party B considers that the materials provided by Party A are satisfied with the clear characteristics of counterpart after examination;

(2) No matter what the amount is of a single drawdown, entrusted payment by Party B shall be adopted;

(3)                                  /

                                    /

5.6.2 In case of entrusted payment by Party B, Party B deposits the loan capital to the loan-granting account, then directly pays such loan capital to the account of the counterpart from the loan-granting account. Party A shall not in any way (including but not limited to transfer, withdraw cash) dispose the loan capital.

5.6.3 Party B shall examine the amount, time, recipient, method and handling account of payment according to the information provided by Party A. If Party B considers the abovementioned factors of payment have satisfied with the requirements after completing the formal examination, the loan capital will be transferred to recipient designated by Party A by Party B. Once the loan capital is released to the account of such recipient, which shall be deemed that Party B have fulfilled payment obligation. Party A shall check whether the payment goes through or not within one business day after the date of payment, if not, Party A shall immediately notify Party B. Party A shall ensure the recipient comply with the specific purpose and transaction information.

5.6.4 The formal examination to the abovementioned factors of payment conducted by Party B does not mean Party B’s confirmation of the authenticity, legality and compliance of transaction, also not mean Party B's involvement in any disputes between Party A and its recipient or other third party or assuming any responsibility or obligation of Party A. All losses suffered by Party B due to such entrusted payment shall be borne by Party A.

5.6.5 In case the documentation provide by Party A are incomplete, untrue, inaccurate, inconsistent with the specific purposes of the loan or conflicts with existing statements of fact, which result in the consequence that the loan capital fails to be paid to the account of its recipient, the following provisions shall be applied:

 

  

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(1) All consequences resulted herein, including but not limited to the losses caused by the loan capital failing to be paid or failing to be paid in time to the account of its counterpart shall be borne by Party A. Party B shall bear no responsibility. All losses suffered by Party B shall be compensated by Patty A;

(2) Party A shall not in any way (including but not limited to transfer, withdraw cash) dispose the loan capital;

(3) Party A shall fulfill the obligations to resubmit documentation in accordance with Party B’s requirements within __/__working day(s);

                                    /

                                    /

Party B has the right to recover the loan capital in advance in case of any breach of the above agreement by Party A.

5.6.6 The risk, liability and loss caused by failed, wrong or delayed payment not due to Party B’s fault shall be borne by Party A only. All losses suffered by Party B shall be compensated by Party A.

5.7 Direct payment by Party A

In case a single drawdown does not meet the requirements of entrusted payment by Party B set out in Article 5.6.1, direct payment the Party A may be adopted, which means that, after Party B releases loan capital to the loan-granting account according to Party A’s drawdown application, Party A directly pays such loan capital to its counterpart. Party A shall ensure its counterpart to be consistent with the specific purposes and transaction data stipulated in the loan contract.

5.8 In the case either entrusted payment by Party B or direct payment by Party A is adopted, once the loan capital is released to the loan-granting account, Party B fulfills its payment obligation. Party A shall ensure the loan-granting account in a normal status (abnormal status such as being frozen by the competent authorities). The risk, liability and loss caused by abnormal account status shall be borne by Party A. All losses suffered by Party B shall be compensated by Party A after the loan capital is released to the loan-granting account.

5.9 Payment Term Change

In case of one of the following circumstances, Party B has the right to change the term of payment for the loan capital, including but not limited to adjustment of the conditions for entrusted payment (such as adjusting the amount standard of entrusted payment), change the term of payment for single drawdown, etc.:

1. Occurrence of any breach of the Agreement by Party A;

2. Occurrence of any circumstances agreed in the Agreement possibly endangering creditor’s rights of Party B;

3. Other circumstances that Party B considers necessary to change the payment term of loan funds;

In case Party B change the payment term, Party A shall fulfill the obligations to resubmit the documentation in accordance with this Agreement and Party B’s requirements.

Article 6 Use and Supervision of Account

6.1 Loan-granting account

The loan-granting account under this Agreement is determined according to Article 6.1.2.

6.1.1 Party A shall open a designated loan-granting account in Party B bank for the granting and payment of all loans under this Agreement within __/__business day(s) from the execution date of the Agreement and before first loan drawdown;

6.1.2 Other account opened by Party A in Party B bank (Account No. 44201581500052528219).

6.2 Capital collection account

6.2.1 Party A shall open a capital collection account at Party B bank or set the existing account (Account No. 44201581500052528219) opened at Party B bank as capital collection account within __/__business day(s) from the execution date of the Agreement;

6.2.2 Party A shall regularly submit a report on the capital transactions in the capital collection account to Party B on a quarterly (optional “monthly” or “quarterly”) basis. Party A shall submit such report for the last report cycle to Party B within the early ten business days of each reporting cycle.

6.2.3 Party B has the right to manage capital transactions in the capital collection account, in particular, capital account should meet ___/___of the following requirements:

(1) Average amount of capital in the account:

__________________/________________________________________ __

__________________/___________________________________________

(2) In place time of collection capital:

__________________/___________________________________________

__________________/___________________________________________

(3) Proportion of Party A’s sales collection flowing to the account:

__________________/___________________________________________

__________________/____________________________________________

(4) Limit to a single external payment of capitals in the account:

__________________/___________________________________________

__________________/___________________________________________

(5) Limit to a single-day external payment of capitals in the account:

__________________/____________________________________________

__________________/___________________________________________

 

  

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(6) Limit to the online bank contracted under such account:

__________________/___________________________________________

__________________/_____________________________________________

(7) External payment of capitals in the account is subject to Party B’s approval;

(8) Such account shall be specially used for collection and repayment of the loan under this Agreement, not for other purposes;

(9) __________________/________________________________________

__________________/____________________________________________

(10) Other requirements purposed by Party B;

(11) In accordance with the provisions stipulated in the account management agreement separately entered by the Parties.

Article 7 Repayment

7.1 Principles of repayment

Party A shall repay the loans under this Agreement based on the following principles:

Party B has the right to reimburse all kinds of expenses advanced by Party B for Party A and the expenses occurred by Party B to realize creditor's rights with the repayment first, the remaining part shall be first used to pay the interest then to repay the principal, with the principle of matching the principal repayment. But for the loan which can not be collected after the principal is overdue more than 90 days and the loan which can not be collected after the interest is overdue more than 90 days and loans otherwise stipulated by laws, regulations or rules, the amount repaid by Party A shall be first used to repay the principal and then to pay the interest after the abovementioned expenses having been reimbursed.

7.2 Payment of interest

Party A shall pay the interest to Party B on the due date for interest. The first interest payment date shall be the first due date for interest after the loan is released. Principal and interest must be repaid on the last interest payment date.

7.3 Repayment plan

Repayment plan is determined in accordance with Article 7.3.2 as following:

7.3.1 Repayment plan is as follows:

1. ___/____ (MM) ___/___ (DD), ___/____(YY), Amount______/_______;

2. __/____ (MM) ___/___ (DD), ___/____ (YY), Amount______/_______;

3. __/____ (MM) ___/___ (DD), ___/____ (YY), Amount______/_______;

4. __/____ (MM) ___/___ (DD), ___/____ (YY), Amount______/_______;

5. __/____ (MM) ___/___ (DD), ___/____ (YY), Amount______/_______;

6. __/____ (MM) ___/___ (DD), ___/____(YY), Amount______/_______;

7.3.2 Party A shall repay RMB 500,000 for principal each month from the seventh month after the loan is released, the balance shall be repaid on the due date.

7.4 Method of repayment

Party A shall deposit sufficient funds into capital collection account or other account opened at Party B bank before the repayment date agreed in this Agreement and transfer the amount for repayment to Party B (Party B has the right to deduct the funds from such account for repayment), or transfer the funds from other account for repayment on repayment date agreed in this Agreement.

7.5 Prepayment

Party A shall submit a written application to Party B for prepayment of the principal in no less than 30 business days, with the consent of Party B, Party A may prepay partial or the whole principal.

In case of prepayment, the interest shall be calculated according to the actual days of the loan and the lending rate agreed in the Agreement.

In case Party B agrees that Party A can repay principal in advance, Party B shall have the right to collect compensation from Party A, which is determined according to Article 7.5.1 as following:

7.5.1 Compensation = principal amount of prepayment x months of prepayment x 3 ‰, one month shall be calculated if advance time is insufficient one month;

7.5.2                                     /

                                    /

In case Party A repays by installmentsinstallment, for example, repays part of the principal in advance, then Party A shall repay in an order opposite to repayment plan. The balance owed to Party B after prepayment shall still apply to the lending rate agreed in the Agreement.

 

  

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Article 8 Rights and Obligations of Party A

8.1 Rights of Party A

8.1.1 Party A has the right to request Party B release the loan in accordance with the Agreement;

8.1.2 Party A has the right use the loan according to the agreed purposes;

8.1.3 Party A has the right to apply for extension of the loan to Party B according to the conditions required by Party B;

8.1.4 Unless the laws and regulations otherwise stipulated, competent authorities otherwise required or otherwise agreed by the Parties, Party A has the right to request Party B to keep trade secrets on the relevant financial information, production and management;

8.1.5 Party has the right to refuse Party B and its staff to solicit bribe, and has the right to report to the relevant authorities in case of the aforesaid behavior or breach of relevant laws, regulations on credit interest rate and service charge.

8.2 Obligations of Party A

8.2.1 Withdraw the loan capital and pay off the full principal and interest, and bear the expenses in accordance with this Agreement;

8.2.2 Provide financial and accounting information, production and operation information, including but not limited to providing balance sheet, profit and loss statement (income and expenditure statement for institution) at the end of last quarter before the 10th working days of the first month each quarter, and providing statement of cash flows at the end of the year in time, and ensure that the information provided is legal, true, complete, accurate, effective, does not provide false materials or conceal important facts on business and finance;

8.2.3 Notify Party B of significant adverse events affecting its solvency or other circumstances endangering creditor's rights of Party B, or industry and commerce registration changes to the name, legal representative (person in-charge), address, business scope, registered capital or articles of association of the company (enterprise), and attach the relevant information after change;

8.2.4 Party A shall use the loan according to the agreed purposes, and shall not occupy, misappropriate the loan capital to engage in illegal trading, and shall not use the loan for fixed assets and equity investment and the production and operating fields and purposes prohibited by the state, shall not replace the liabilities arising from fixed assets and equity investment; Party A shall cooperate with Party B to inspect and monitor its production and operation, financial activities, use and payment status of the loan, and accept post-loan management requirements of Party B: Party A shall not secretly withdraw funds, transfer assets or use related-party transaction to evade repayment of debts; shall not use false contract with related parties and notes receivable and accounts receivable without actual trading background to seek to discount or pledge and obtain bank financing or credit; Party A shall pay the loan capital in accordance with this Agreement and shall not evade the method of entrusted payment by Party B by breaking up the whole into parts or other means;

8.2.5 Party A shall comply with the relevant state regulations on environmental protection in case of using the loan under this Agreement for manufacturing;

8.2.6 Party A shall not provide a security to a third party by use of the assets formed through the loan under this Agreement without the consent of Party B before paying off the principal and interest of loan;

8.2.7 Party A shall promptly report to Party B the related transactions exceeding 10% of the net assets if Party A is a group customer, including: (1) the relationship among the related parties; (2) transaction project and nature; (3) amount and corresponding proportion of transaction; (4) pricing policy (including transaction without an amount or with a token amount);

8.2.8 Party A shall obtain prior written consent of Party B for any merger, division, equity transfer, foreign investment, substantial increase of debt financing and other important matters. However, such consent shall not affect Party B’s right to take remedy measures agreed in the Agreement in future once Party B considers the aforesaid actions may endanger the safety of creditor's rights;

8.2.9 In case of direct payment by Party A, Party A shall submit a summary report on the use and payment of loan for the last month within the early 10 business days of each month and the actual payment list to Party B until the loan is paid off. See Annex 4 for the format of Summary Report.

Article 9 Rights and Obligations of Party B

9.1 Party B has the right to request Party A to repay the principal, interest and expenses of the loan, to manage and control the payment of loan capital, to monitor Party A's overall cash flow on a dynamic basis, to collect the loan in advance according to capital collection, to exercise other rights under this Agreement and to require Party A to fulfill other obligations under this Agreement.

9.2 Party B has the right to participate in large amounts of financing (i.e. total amount of financing exceeding RMB ___/____ (ten thousand) or the equivalent in foreign currency), asset sale, merger, division, shareholding reform, bankruptcy liquidation and activities of Party A to maintain the creditor’s rights of Party B. Specific participation method is ____/____of the following:

1. The abovementioned activities shall be subject to written consent of Party B;

2. Party B arranges large amounts of financing for Party A;

 

  

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3. The price and buyer of asset sale shall meet the following provisions:

__________________________/________________________________

__________________________/________________________________

4. __________________________/________________________________

­­­­­­­­­­­­­­­­­­____________________________________________________________

5. Other methods to be adopted by Party B.

9.3 Release the loan in accordance with to the provisions of this Agreement, but any delay or failure caused by Party A or other reasons not attributable to Party B shall be excluded.

9.4 Unless the laws and regulations otherwise stipulated, competent authorities otherwise required or otherwise agreed by the Parties, Party B shall keep trade secrets on the relevant financial information, production and management provided by Party A.

9.5 Party B shall not offer bribes to Party A and its staff or solicit or accept bribes from them.

9.6 Party B shall not have dishonest action or other action to damage the legal interests of Party A.

Article 10 Remedial Measures for Breach of Contract and Circumstances Endangering Creditor’s Rights of Party B

10.1 Circumstances and liabilities for breach of contract by Party B;

10.1.1 Party A may require Party B continue to release the loan according to the Agreement in case Party B fails to release the loan according to the Agreement;

10.1.2 In case Party B has illegally charged interest and fees to Party A according to the laws and regulations, Party A has the right to demand Party B refund these charged interest and fees.

10.2 Circumstances of breach by Party A

10.2.1 Party A's breach of any provision under this Agreement or breach of any legal obligation;

10.2.1 Party A expressly states or states by performance not to fulfill any obligation under this Agreement.

10.3 Circumstances possibly endangering Creditor’s Rights of Party B

10.3.1 Party B may consider it will endanger creditor’s rights under this Agreement upon occurrence of any of the following circumstances by Party A: contracting, custody (takeover), leasing, shareholding reform, reduction of registered capital, investment, joint venture, merger, acquisition and reorganization, reorganization, division, joint venture, equity transfer, substantial increase of debt financing, (being filed) filing for rectification, filing for dissolution, being revoked, (being filed) filing for bankruptcy, change of controlling shareholder, actual controller or significant assets transfer, cessation of production, out of business, heavy fines imposed by competent authorities, cancellation of registration, business license being revoked, involving significant legal dispute, serious difficulties in production and operation or deteriorative financial status, declining of credit condition, and failure to perform the duties by legal representative or person in-charge under normal condition;

10.3.2 Party B considers it will endanger creditor’s rights under this Agreement in case any one of the following circumstances happens to Party A:

Failure to fulfill other matured debts (including matured debts owed to the branches of China Construction Bank or other third parties), transferring the property free of cost or with a low price, third party debt relief, negatively exercising creditor's rights or other rights, or offering guarantee for a third party; failure to meet the requirements set out in Annex 2 Binding Clause of Financial Indicators; abnormal funds fluctuation occurring in any account of Party A (including but not limited to capital collection account and other accounts monitored by Party B) occurs; occurrence of any material cross default by Party A; poor main business profitability; abnormal use of loan;

10.3.3 Party A’s shareholder abuse the independent status of legal person or the shareholder limited liability to avoid debt, Party B may consider it will endanger creditor’s rights;

10.3.4 Any one of the conditions to grant the loan agreed in the Agreement has not satisfied on a continuous basis;

10.3.5 Party B considers it will endanger creditor’s rights under this Agreement upon in case any one of the following circumstances happens to the guarantor:

(1) Breach of any provisions of the Agreement, or any false, incorrect and omitting information existing in representation and warranty;

(2) contracting, custody (takeover), leasing, shareholding reform, reduction of registered capital, investment, joint venture, merger, acquisition and reorganization, reorganization, division, joint venture, equity transfer, substantial increase of debt financing, (being filed) filing for rectification, filing for dissolution, being revoked, (being filed) filing for bankruptcy, change of controlling shareholder, actual controller or significant assets transfer, cessation of production, out of business, heavy fines imposed by competent authorities, cancellation of registration, business license being revoked, involving significant legal dispute, serious difficulties in production and operation or deteriorative financial status, declining of credit condition, and failure to perform the duties by legal representative or person in-charge under normal condition, which affecting the guarantor’s capacity to undertake the guarantee;

(3) Other circumstances of loss or potential loss of guarantee capacity;

10.3.6 Party B considers it will endanger creditor’s rights under this Agreement upon in case any one of the following circumstances happens to the mortgagor or the pledgor:

(1) Damage to, loss or value reduction of the mortgaged or pledged property due to the third party’s act, state expropriation, confiscation, requisition, demolition, changes in the market or any other causes;

(2) The mortgaged or pledged property being sealed up, seized, frozen, deducted, detained, auctioned, regulated by administrative authority or ownership dispute;

(3) Breach of any provisions of mortgage contract or pledge contract, or any false, incorrect and omitting information existing in representation and warranty;

(4) Other circumstances endangering to realize mortgage or pledge of Party B;

10.3.7 Guarantee is not established, not effective, invalid, revoked or released, the guarantor is default or expressly states or states through its action not to fulfill liability to guarantee, or the guarantor losses part or all lose guarantee ability, value reduction of collateral and other circumstances endangering the security of creditor’s rights under this Agreement; or

 

  

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10.3.8 Other circumstances endangering the security of creditor’s rights under this Agreement.

10.4 Remedy measures of Party B

Upon occurrence of any one of the circumstances set out in Article 10.2 and 10.3, Party B shall have the right to exercise one or all of the following rights:

10.4.1 Stop granting the loan;

10.4.2 Amend the conditions of loan granting and payment;

10.4.3 Change the method of loan payment according to the Agreement;

10.4.4 Announce that loans are due immediately, and require Party A to pay off the principal, interest and fees for all due and undue debts immediately;

10.4.5 In case Party A fails to withdraw the loan in accordance with the Agreement, Party B shall have the right to require Party A to pay liquidated damages equivalent to 15.96 % of such amount being withdrawn, and refuse Party B to withdraw the unpaid loan under this Agreement;

10.4.6 In case Party A fails to use the loan in accordance with the Agreement, interest and compound interest shall be calculated from the date of misappropriation to the date when the principal and interest of the loan is fully paid according to punitive interest rate and interest settlement method agreed in this Agreement for the misappropriated amount;

10.4.7 In case of an overdue loan, interest and compound interest shall be calculated from the overdue date to the date when the principal and interest of such loan is fully paid according to punitive interest rate and interest settlement method agreed in this Agreement for the principal and interest failed to be repaid on schedule (including part or all principal and interest at maturity in advance announced by Party A). Overdue loan refers to an action that Party A fails to repay the loan on schedule or repays the loan beyond the scheduled period of repayment by installment agreed in this Agreement.

Compound interest shall be calculated according to lending rate and interest settlement method agreed in this Agreement for the interest unpaid by Party A on schedule before the matured date of loan;

10.4.8 Other remedy measures, including but not limited to:

1. Deduct the corresponding amount in RMB or other currency from the account opened with China Construction Bank by Party A without an advance notice to Party A;

2. Exercise the right of security;

3. Require Party A provide a new security for all the debts under this Agreement in accordance with Party B’s requirement;

4. Refuse Party A to dispose the corresponding amount of deposit in the account opened with China Construction Bank (including but not limited to capital collection account);

5. Terminate this Agreement.

Article 11 Handling Bank and Seal of Party B

Party A acknowledges that: upon the effectiveness of this Agreement, Party B may entrust one or more other sub-branches of China Construction Bank Corporation Limited Shenzhen Branch as the handling bank for this Agreement. The handling bank has the right to fulfill the obligations under this Agreement, to sign the relevant legal documentation and enjoy the rights under this Agreement in its own name, including but not limited to actual performance of the Agreement ( in whole or in part), debt collection, litigation/arbitration, execution and other matters. The handling bank having fulfilled the obligations of Party under this Agreement shall be deed as Party B having fulfilled this Agreement, and the obligations and responsibilities of Party A shall not be diminished and exempted. Party B and its handling bank shall have the right to affix their common seal, related business seal or contract seal on the materials or vouchers.

Article 12 Miscellaneous

12.1 Expenses

Unless otherwise agreed by the Parties, the fees and expenses for lawyer service, insurance, registration, evaluation, storage, appraisal, notary, taxation, environmental protection, technology, payment and settlement under this Agreement and related to the security under Agreement shall be borne by Party A.

All fees and expenses (including but not limited to legal fees, arbitration fees, property preservation fee, travel expense, execution fee, assessment fees, notary fee, auction fee, service fee, advertising fee, lawyers fee ) occurred by Party B to realize creditor's rights shall be borne by Party A.

12.2 Use of information of Party A

Party A agrees Party B to inquire Party A's credit status through the database of credit established by the People's Bank of China and the competent authorities of credit information or the relevant units and departments, and agrees Party B to provide the information on Party A to the database of credit established by the People's Bank of China and the competent authorities of credit information. Party A further agrees that Party B may reasonably use and disclose the information on Party A for business needs.

12.3 Collection Notice

In case Party A defaults on the loan principal and interest or breaches of the Agreement, Party B is entitled to inform the relevant department or unit and to post a collection notice through the news media.

12.4 Evidential effect of Party B’s records

Unless there is a reliable, determined evidence to the contrary, internal accounting records on principal, interest, fees and repayment records of Party B, receipts and vouchers on withdrawal, repayment and interest payment and other business issued or maintained by Party B, and the records and vouchers on loan collection shall constitute the determined evidences to effectively proof the debtor-creditor relationship between the Parties. Party A shall not raise an objection only because such records, receipts, vouchers are produced and maintained by Party B.

 

  

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12.5 Reservation of rights

The rights enjoyed by Party B under this Agreement shall not affect and exclude any right enjoyed under the laws, regulations and other contracts. Any tolerance, grace, preference imposed to default or delay behavior or delaying the exercise of any right under this Agreement shall not be construed as a waive of the rights and interests or permission or acknowledgement of any breach of the Agreement, also shall not restrict, prevent and hinder further exercising such rights and any other rights, nor result in Party B’s assuming the obligation and responsibility of Party A.

12.6 Except the debt under this Agreement, in case Party A has other matured debts due to Party B, Party B is entitled to deduct the capital in RMB or other currency from the account opened with China Construction Bank by Party A to first clear off any matured debt, for which Party A shall not raise an objection.

12.7 Party A shall promptly notify Party B of change to address or contact information in writing, any loss caused by failure to promptly notify Party B shall be borne by Party A.

12.8 Collection of payables

For the account payable by Party A under this Agreement, Party B is entitled to deduct the corresponding amount in RMB or other currency from the account opened with China Construction Bank by Party A without an advance notice to Party A. In case of handling the settlement and sale of foreign exchange, foreign exchange trading formalities, Party A is obligated to assist Party B to handle, and the exchange rate risk shall be borne by Party A.

12.9 Dispute Settlement

Any dispute arising from the execution of this Agreement shall be settled through consultation. If it cannot be settled after consultation, method 12.9.1 in the following shall be applied:

12.9.1. Bring such dispute to the people's court where Party B is located.

	
  

	
12.9.2. Submit to _____/________ Arbitration Commission (place of arbitration: ________/____________) for arbitration in accordance with its arbitration rules effective at the time of application. The arbitral award is final and binding on both Parties.

The provisions of the Agreement not involving in dispute shall be executed during litigation or arbitration.

12.10 Effectiveness of contract

This Agreement shall come into force after being signed and affixed a common seal (contract seal) by the legal representative (person in-charge) or authorized representative of Party A and the person in-charge or authorized representative of Party B.

The annexes under this Agreement are an integral part of this Agreement, and have the same legal effect with this Agreement.

12.11 This Agreement is made in sextuplicate.

12.12 Other matters:

_______________________________/______________________________

_______________________________/______________________________

Article 13 Statement

13.1 Party A is fully aware of business scope and limits of authority of Party B.

13.2 Party A has read the terms and conditions of this Agreement. Party B, at the request of Party A, has made corresponding explanation to the terms and conditions. Party A has fully known and understood the meanings and the corresponding legal consequences of the terms and conditions of this Agreement.

13.3 Party A’s signing this Agreement and fulfilling the obligations under this Agreement are in line with the law, administrative regulations, rules and the  articles of association of Party A and the internal organization documentation, and have obtained the approvals from internal competent authorities of the company and/or state competent authorities.

13.4 The production and operation of Party A comply with laws and regulations.

13.5 Party A has the ability to continue operation, and has a legal source of repayment.

13.6 Party A undertakes that all loans under this Agreement reflect the actual demand based on the specific purposes of the loan, which will not exceed its actual demand;

13.7 Party A and its controlling shareholder have good credit standing and have no significant adverse credit records.

13.8 Party B has the right to entrust other branches of China Construction Bank to grant the loan under this Agreement and exercise and fulfill the rights and obligations of Party B under this Agreement, for which Party A has no objection.

13.9 Party A declares that Party A has no any beach of the relevant laws, regulations and rules on environmental protection, energy saving and emission reduction, reducing pollution when entering this Agreement, and further promises to strictly abide by such laws, regulations and rules after this Agreement is concluded; in case the aforesaid statement of Party A is false or not fulfilled, or energy consumption and pollution risk may occur, Party B is entitled to stop granting loans or announce to accelerate the maturity of principal and interest, or take other remedy measures agreed in this Agreement or permitted by the law.

  

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Party A (Common Seal): (Seal of Shenzhen Dasheng Communication Technology Co., Ltd.)

Legal Representative (Person in-charge) or Authorized Representative (Signature):

                   Lin Xiangfeng

December 29, 2011

Party B (Seal): (Seal of China Construction Bank Corporation Limited Shenzhen Branch)

Person in-charge or Authorized Representative (Signature):

                 Yang Fang

December 29, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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Annex 1:

Basic Information on the Loan

1. Specific purposes of the loan under this Agreement:

To purchase Apple’s series products. The payee is limited to Telling Communications Co., Ltd.

Party A shall not change the specific purposes of the loan without a written consent of Party B.

2. Repayment source of the loan under this Agreement:

Party A’s operating income.

Party A shall ensure an authentic and legal source of repayment and a stable and adequate repayment cash flow.

3. Other:

____________________________________________________________

____________________________________________________________

BLANK_______________________________________________________

_____________________________________________________________

 

 

 

 

 

 

 

 

  

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Annex 2

Binding Clause of Financial Indicators

Financial Indicators of Party A shall meet the following restriction on a continuous basis:

Asset-liability ratio shall not exceed 60%.

 

 

BLANK___________________________________________________________

 

 

Party B has the right to modify the aforesaid restriction upon notifying Party A in advance ________ working day(s).

 

 

  

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Annex 3

Capital Use Plan

	
Agreement No.

	  
	
Date of Drawdown

	  
	
No.

	
Planned Use

	
Estimated Amount of Payment

	
Estimated Counterpart (if any)

	
Remark

	
1

	  	  	  	  
	
2

	  	  	  	  
	
......

	  	  	  	  
	
Total

	
Ten Thousand (in capital:                                )

	
 

 

	 
	Name of Borrower (Seal):        /s/ Lin Xiangfeng
	  Lin Xiangfeng
	
 (Seal of Shenzhen Dasheng Communication Technology Co., Ltd.)

  

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Annex 4

Summary of Direct Payment by Borrower

	
Agreement No.

	  
	
Date of Submission

	  
	
No.

	
Actual Use

	
Counterpart

	
Amount

	
Supporting Materials

	
Planned Item (Y/N)

	
1

	  	  	  	  	  
	
2

	  	  	  	  	  
	
......

	  	  	  	  	  
	
Total

	
Ten Thousand (in capital:                                )

	
Name of Borrower (Seal):

 

(Seal of Shenzhen Dasheng Communication Technology Co., Ltd.)

	
 

Internal Review Conclusion

	
 

 

Customer Manager (Signature):

	
 

 

Granting and Payment Review (Signature):

 

 

 

 

 

 

15ex104.htm

EXHIBIT 10.4

 

Loan Agreement

[unofficial translation]

Contract No.: SF ZY DZ No.20120113004

o Not in the line

þ In the line: Name of line contract: comprehensive line of credit contract

No. of limit contract: SFZYZZ No.20110526006

Party A (Lender): Business Department of Head Office of Shenzhen Development Bank Limited Liability Company

Address: 5th Floor, Shenzhen Development Bank, No.5047, East Shennan Road, Shenzhen

Tel: 0755-22168769                 Fax: 0755-82081555

Principal: Yang Zhihong              Post: General Manager

Party B (Borrower): Shenzhen Dongsen Mobile Communication Technology Co., Ltd.

Address: 6th Floor, C5 Building, Fuyuan Industry Town, No.111, Zhoushi Road, Xixiang Street, Bao’an District, Shenzhen

Tel: 0755-82718088                  Fax: 0755-82718111

Legal representative: Lin Zihong        Post: President

Pursuant to relevant laws and regulations, Party A and Party B, via negotiation and mutual agreement, hereby conclude the loan contract and agree to obey all terms of the Contract.

Article 1  Loan Content

	
I.  

	
Loan amount: RMB (in letter): Fifteen Million Yuan Only

	
II.  

	
Loan period: 302 days   

Calculation method for loan period is as follows:

Loan period starts with actual release day of the loan; the first-phase loan rate and expiration date shall be subject to loan receipt record.

	
III.  

	
Loan interest rate

	
1.  

	
Loan interest rate of the Contract shall be established according to following standard and first-phase loan interest rate shall be subject to loan receipt record (tick “√” in your choice):

	
  

	
√□ Same-level loan benchmark interest rate of Bank of China on loan issuing day: √□floating upwards/□ floating downwards 15%.

	
  

	
□ Same-level loan benchmark interest rate of Bank of China on loan issuing day:□+/□- _____ (floating point).

 □ Same-level loan benchmark interest rate of Bank of China on loan issuing day.

	
  

	
  □ Libor on loan issuing day □+/□-_____ (floating point) (only applicable to foreign exchange loan).

2. Regulation way of loan interest rate of the Contract is (tick “√” in your choice):

√□ floating per six months. Regulation day of interest rate is (1) below:

	
(1)  

	
On the day corresponding to loan issuing date at the sixth month every six months; when there is no corresponding date, it shall be the last day of corresponding month.

	
(2)  

	
January 1st of each year.

□Fixed interest rate.

 

  

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3. Conversion of daily interest rate: daily interest rate=annual interest rate/360 days.

IV. Loan Use

Use purpose of this loan is (3) below:

	
(1)  

	
Rotation of current fund.

	
(2)  

	
Refinancing (enlending)/reorganization, implemented in details as: return limit of credit under SF/Z No.______/_______________

	
(3)  

	
Others, implemented in details as: purchase mobile phone (blank hereafter)____________________________________________________________________________________________________________________________

Article 2  Issuance and Payment of the Loan

I. Under situation that conditions of 2nd item are satisfied, Party B can demand Party A to issue the loan under the Contract:

1. After the Contract becomes effective.

2. The Contract has become effective and relevant security contract has been concluded. If registration, records or notary procedures are required, procedures have been completed.

3.______________________________/___________________________________ _____________________________________________________________________

II. Payment of Loan Fund

(I) Payment method

Party A and Party B agree to adopt following way to pay loan fund (tick “√” in your choice)

√□Full-amount payment, meaning that Party A, according to Party B’s withdrawal application and payment entrustment, pays loan fund to Party B’s trading partner in conformity with agreed uses via Party B’s account.

□Partial-amount payment, meaning that whereas paying target is defined and single paying amount is more than RMB________( ten thousand) (including ten thousand Yuan), Party A, according to Party B’s withdrawal application and payment entrustment, pays loan fund to Party B’s trading partner in conformity with agreed uses via Party B’s account; The residual loan fund shall be independently paid by Party B, meaning that Party A transfers loan fund into Party B’s account according to Party B’s withdrawal application and Party B automatically pays to trading partner in conformity with agreed uses.

□Full-amount automatic payment, meaning that Party A transfers loan fund into Party B’s account according to Party B’s withdrawal application and Party B automatically pays to trading partner in conformity with agreed uses.

□___________________________/______________________________________

__________________________________________________________________

(II) Payment management

1. If entrusted payment is adopted and following payment conditions are satisfied, Party B can demand Party A to pay loan fund;

1.1 Party B can submit certification materials such as payment application and corresponding business contracts according to Party A’s requirements and information listed in payment application such as trading partners and paying amount shall keep consistent with certification materials;

1.2 Payment application conforms to loan use ruled in the Contract;

1.3 Party B authorizes Party A to pay loan fund to specific trading partner;

1.4 _________________________________________________________________

Party A reserves the right to examine and verify the information listed in payment application provided by Party B such as paying partner and amount are consistent with corresponding business contracts and has the right to reject payment application in breach of loan use ruled in the Contract.

2. If automatic payment is adopted, Party B shall report loan fund payment condition to Party A according to ____ and submit certification materials according to Party A’s requirements such as trading partner and paying amount.

3. Party B shall not use loan fund in fixed assets, equity investment, production and business fields or other uses forbidden by law.

(III) Change of payment method and conditions triggering the change

When one of following situations occurs, Party A reserves the right to regulate the entrusted paying amount standard ruled in Paragraph (I) or change the payment method to full-amount entrusted payment;

1. If automatic payment is adopted, Party B fails to regularly report loan fund payment condition to Party A according to the provision, or refuses to cooperate with Party A on account analysis, voucher verification or field survey to examine whether loan payment conforms to ruled use;

2. Party B breaches the provision of the Contract and avoids Party A’s entrusted payment by breaking up the whole into parts;

3. Party B’s credit standing are downgraded or profiting ability of his major business is weak;

4. Abnormal use of loan fund;

5._________________________________________________________

 

  

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Article 3  Account Management and Financial Index

I. Party A and Party B negotiate and reach agreement that Party B agrees opens following account at Party A and accepts Party A’s supervision and control:

1. Party B agrees to, according to Party A’s requests, open loan issuance account at Party A with name of Shenzhen Donxon Mobile Communication Technology Co., Ltd. and account number is 13003990697302. Loan fund is issued and withdrawn via this account. Party A reserves the right to carry out close supervision to the account and adopt measures including but not limited to freeze and cease payment when abnormal situation occurs.

2. Party B agrees to, according to Party A’s requests, open fund collection account at Party A (tick “√” in “□” before your choice)

□Fund collection account refers to loan issuance account in Item 1

□Name of fund collection account is Shenzhen Dongsen Mobile Communicaiton Technology Co., Ltd. and account number is 11003990697303.

Fund collection of the account shall conform to following provisions: __________________________________________________________________________________________________________________________________________

When Party B fails to promptly pay back loan lent from Party A, Party A reserves the right to deduct fund from Party B’s fund collection account and other accounts opened at Party A to return loan principal and interest.

II. Before loan under the Contract is totally paid off, Party B’s financial index shall conform to following ruled conditions:                             __________________________________________________________________________________________________________________________________________

Article 4  Calculation Settlement of the Loan

1. Interest shall be calculated according to actual loan amount and actual loan period since actual loan issuing day. Calculation settlement shall be implemented via the way under (1) provision:

(1) Once every month; calculation settlement day is 20th day of each month;

(2) Once every season; calculation settlement day is 20th day of each month;

(3) Once every year; calculation settlement day is December 20th of each year.

2. Party B shall, before every calculation settlement day, deposit corresponding interest payable into deduction account. Party A can directly deduct money from Party B’s account opened at Shenzhen Development Bank. Provided that Party B fails to promptly pay interest, Party A reserves the right to charge compound interest upon unpaid interest.

Article 5  Installment Plan

Provided that Party A and Party B agree on Party B’s installment payment, Party B’s installment payment is scheduled as follows: __________________________________________________________________________________________________________________________________________

Article 6  Applicable Laws and Dispute Settlement

The Contract is concluded in accordance with laws of the People’s Republic of China and is applicable to laws of the People’s Republic of China. Disputes arising during performance of the Contract shall be settled via negotiation or mediation between both parties; if negotiation or mediation fails, disputes shall be resolved via the way ruled in  1st  way hereinafter.

1. Submit litigation to people’s court where Party A is located.

2. Submit arbitration to __________ arbitration committee.

3. __________________/___________________________

Article 7  Notarization

□Both parties agree to implement notarization to the Contract

After the Contract receives notarization under coercion agreed by Party A and Party B, if Party B refuses to perform or refuses to wholly perform obligations ruled in the Contract, Party A reserves the right to apply for performance certification to original notarization authority and apply for performance to people’s court with jurisdiction upon original notary certificate and performance certificate (referring to people’s court where the property of the performer or the person subject to execution is located).

√□The Contract has not been notarized.

Article 8  Other matters agreed by Party A and Party B: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Article 9  The Contract is in quadruplicate, three for Party A, one for Party B and __/____, _____/___, __/______ with same legal effect.

 

  

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Article 10  Calculation of floating interest rate

If loan rate floats, loan interest shall be charged according to rate after change since rate regulation day. However, if installment payment is adopted to pay back loan (including equal repayment on schedule and diminishing repayment on schedule), loan interest shall be charged according to rate before change on rate regulation day and charged according to rate after change since next phase.

Article 11  Loan Repayment

1. Party B shall pay off all loan principal and interest on due day of the loan; whereas Party B knows or should have known that it will not be able to make the payment on schedule, he shall, one month ahead, inform Party A in writing and negotiate with Party A upon repayment matters.

2. Party B shall, provided that he repays in advance, apply to Party A and both parties shall negotiate and reach an agreement.

3. Party B shall irrevocably authorize Party A to deduct all due or advance due loan principal and interest from account opened at Shenzhen Development Bank.

Article 12  Party B’s Rights

1. Reserve the right to withdraw and use all loan according to the provisions of the Contract;

2. Reserve the right to reject any additional conditions beyond the Contract;

3. Upon agreement with Party A, reserve the right to assign debts to third parties.

Article 13  Party B’s Obligations

1. Truthfully provide documentation on opening accounts and loan balance under Party A’s requests and cooperate with Party A on survey, auditing and inspection;

2. Shall promptly provide Party A with latest updating of monthly financial statement and registration progress;

3. Shall accept Party A’s supervision and examination on his loan fund condition and production and operation and financial activities and cooperate with Party A on loan payment management, after-loan management and relevant examinations;

4. Shall use the loan pursuant to the provisions of the Contract;

5. Shall repay full loan principal and interest on schedule in accordance with provisions of the Contract;

6. If whole or partial debts under the Contract are assigned to a third party, Party B shall firstly gain written consent from Party A;

7. If Party B carries out severe ownership assignment, system change, merger, separation, equity assignment, assignment of severe assets, material increase of debt financing, foreign investment and other behaviors that fully influence Party A’s rights and benefits, he shall firstly gain written agreement from Party A and implement guarantee measures for security repayment of loan principal and interest and all other expenses under the Contract.

8. Party B shall promptly inform Party A when severe bad events that influence his repayment ability occur.

Article 14  Group Client’s Special Convention on Credit and Affiliated Transactions

I. Group clients refer to legal persons of enterprise with following features:

1. Directly or indirectly control other legal persons of other enterprises or is controlled by legal persons of other enterprises on equity or business;

2. Jointly controlled by legal person of the third enterprise;

3. Individual, key manager or close family members (including lineal relatives within three generations and collateral relatives within two generations) of main investor together directly or indirectly control;

4. There is other affiliated relation and it may not transfer assets and profit according to fair price principle, which shall be deemed that group client carries out management on credit.

II. When Party B is group client, he shall, within ten days since affiliated transaction day that more than 10% net assets is generated, report to Party A in writing and the report shall include affiliated relation between transaction parties, trading project and property, trading amount or corresponding ratio and pricing policy (including transaction without amount or only with symbolic amount).

 

  

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Article 15  Party A’s Rights

1. Reserve the right to demand Party B to provide materials related to the loan;

2. Reserve the right to demand Party B to return loan principle and interest on schedule;

3. Reserve the right to know Party B’s production and operation, financial activities and operation and repayment plan and implement after-loan management and relevant examinations to Party B;

4. Reserve the right to supervise Party B to use the loan in accordance with the provisions of the Contract; carry out loan-payment management to Party B; whereas automatic payment is adopted, Party A reserves the right to demand Party B to give regular summarization and report on loan fund payment condition and check whether loan payment conforms to ruled use via account analysis, voucher examination or field survey;

5. Reserve the right to directly deduct loan principal and interest from Party B’s account;

6. Whereas Party B fails to perform various obligations ruled in the Contract, Party A reserves the right to demand Party B to advance repayment or stop issuing unused loan to Party B pursuant to the provisions of the Contract;

7. Reserve the right to collect the loan in advance according to Party B’s fund collection condition;

8. If Party B carries out severe ownership assignment, system change, merger, separation, equity assignment, assignment of severe assets, material increase of debt financing, foreign investment and other behaviors that fully influence Party A’s rights and benefits, Party A reserves the right to demand Party B to repay loan principal and interest and all other relevant expenses under the Contract or assign all debts under the Contract to assignee accepted by Party A or demand Party B to provide guarantee measures accepted by Party A.

9. Have the right to assign rights and obligations under the Contract to third party, which Party B shall deem as accepting the assignment.

10. If Party B has matters such as big-amount financing, severe assets sale and merger, separation, equity reform and bankruptcy and liquidation, Party A has the right to take part in above matters so as to maintain Party A’s creditor’s right.

Article 16  Party A’s Obligations

1. Issue loan to Party B pursuant to the provisions of the Contract;

2. Keep Party B’s finance, production and operation condition confidential, however, unless otherwise specialized in laws, regulations or supervision and control organs.

Article 17  Expense Clause

1. Expenses on credit standing survey, examination, notarization, verification and registration under the Contract shall be borne by Party B.

2. Expenses caused due to that Party B fails to repay loan principal and interest on schedule so that Party A urges collection of loan principal and interest shall be borne by Party B, including declaration, sending, authenticity fee, lawyer’s fee, litigation fee, traveling fee, assessment fee, auctioning fee, property guarantee fee and fee for action under coercion, etc.

Article 18  Party B shall open settlement account at Party A and realize economic business settlement via this account.

Article 19  Events and Liabilities for Breach of the Contract

I. Events for breach of the Contract

If one of following situations appears, it shall be deemed as occurrence of events for breach of the Contract:

1. Party B breaches performance obligation ruled in the Contract or Party B definitely expresses orally or via behavior that he will not perform the obligations under the Contract;

2. Relevant certifications and documents or declarations, guarantees and promises made by Party B to Party A are not authentic, not correct, incomplete or have false record, misunderstanding description or severe leakage;

3. Party B hides true important situations and does not cooperate with Party A’s survey, auditing and inspection’

4. Party B randomly changes loan fund use, diverts loan or uses bank loan to carry out illegal or foul transactions;

5. Party B breaches the rule on loan fund payment of the Contract;

6. Party B breaks financial index ruled in the Contract;

7. Party B fails to use foreign exchange loan according to state management rules;

 

  

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8. Custody and value of mortgage change a lot;

9. Party B breaches other similar contracts signed with Party A or other third parties (including but not limited to limit contract of credit, loan contract and security contract) or any debt securities issued by Party B or disputes related to the Contract or securities arising involve in litigation or arbitration;

10. Party B’s guarantor breaches the provisions of security contract (including but not limited to guarantee contract, mortgage contract and pledge contract) or have events in breach of security contract or security contract does not become effective, or become avoided or is cancelled;

11. Party B idles at management and claim of due creditor’s right or handles his major property via free or irrational low price and other improper ways or other way of avoiding debts;

12. Party B uses false contract and schedule with any third party (including but not limited to Party B’s affiliated parties), including but not limited to debt discount or pledge such as notes receivable without true trading background, take fund or limit of credit from Party A or other banks;

13. Party B intently avoids creditor’s right of bank via affiliated transaction or other ways;

14. Party B’s business situation becomes severe. Financial conditions become serious and severe financial deficit, assets loss (including but not limited to assets loss due to foreign security) or other financial crisis;

15. Due to illegal operation, Party B suffers administrative penalty, penal sanction or is receiving survey from relevant authorities, which may receive administrative penalty and penal sanction, illegal operation

16. Party B has situations such as separation, merger, severe combination, purchase and reorganization, severe assets settlement, capital decrease, liquidation, reform, cancellation, bankruptcy and dissolution;

17. Party B’s holding shareholder or actual controller is changed and Party A considers it may endanger realization of creditor’s right under the Contract; or Party B’s holding shareholder, actual controller, legal representative, senior manager have severe event, including but not limited to administrative penalty, penal sanction or survey from relevant authorities that may cause administrative penalty and penal sanction due to illegal and foul operation; litigation or arbitration cases, severe deterioration of financial conditions, bankruptcy or dissolution appear;

18. Bad-tendency change occurs to Party B’s industry and Party A considers it has or may endanger realization of creditor’s right under the Contract;

19. Party B fails to handle relevant businesses such as settlement or deposit at Party A in accordance with provisions.

20. Other situations related to Party B that have endangered or may endanger realization of creditor’s right under the Contract.

II. Liability for Breach of the Contract

When the breach event mentioned in Article 1, Paragraph 1 appears, Party A reserves the right to adopt any one or multiple measures:

1. Propose loan becomes due in advance and collect partial or whole principal and interest of issued loan in advance and demand payment of relevant expenses, including but not limited to fees on survey on credit standing, inspection and notarization. Party A’s lawyer’s fee due to realization of creditor’s right, litigation fee, arbitration fee, traveling fee, declaration fee, sending fee and performance fee;

2. Stop or terminate issuing and paying any payments that have not been issued and paid yet;

3. Reserve the right to directly deduct loan principal and interest and all expenses from accounts of Party B and guarantor;

4. Demand Party B to offer new security to creditor’s right under the Contract pursuant to Party A’s requirements;

5. Perform security right and demand guarantor to perform guarantee responsibility or realize creditor’s right via settling mortgage and/or pledge;

6. Whereas loan becomes due or is due in advance and Party B fails to repay loan principal and interest according to the rule, Party A reserves the right to, pursuant to actual number of overdue days since expiration day, charge 50% default interest rate as interest according to loan rate ruled in the Contract and charge compound interest according to default interest rate to interest unpaid on schedule.

Whereas number of overdue days of loan is within 90 (including 90), the repayment order of the loan is: (1) interest (including default interest and compound interest); (2) principal. Whereas loan expires for longer than 90 days, the repayment order of loan principal and interest is: (1) principal; (2) interest (including default interest and compound interest).

7. Whereas Party B diverts loan, Party A reserves the right to, since diverting day, charge 100% default interest rate according to loan interest rate specified in the Contract upon number of overdue days as interest; as for interest that can not be charged on schedule, compound interest shall be charged according to default interest rate;

8. Claim to Party B’s debtor for recourse by law. Party B shall, according to Party A’s requirements, provide with all necessary assistance to Party A. Party A’s expenses on performing right of subrogation shall be borne by Party B;

9. Apply to people’s court for cancelling Party B’s activity of giving up due creditor’s right or free assets assignment or property transfer with obviously irrational low-price. Party B shall provide all necessary cooperation and assistance according to Party A’s requirements and correspondingly generated expenses of Party A shall be borne by Party B;

10. Party A reserves the right to claim for other saving measures by law or in accordance with the Contract.

Article 20  Modification and Dissolution of the Contract

The Contract can be modified or dissolved via negotiation and mutual agreement between Party A and Party B. Agreement on modification or dissolution of the Contract shall be carried out in writing.

 

  

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Article 21  Party B’s Declaration, Guarantee and Promise

1. Party B is a company that is established within jurisdiction area, can be effectively continued and have good fame and have full company right and governmental permit to do present business.

2. Party B has legal power, rights and authority to sign, deliver and perform the Contract. The Contract constitutes effective and binding power upon Party B and performs contractual clauses to Party B.

3. Party B guaranties that various materials provided to Party A are authentic, complete, legal and effective and there is not any false record, mistaking description or severe leakage.

4. Party B hereby promises that he will via friendly way completely perform all his obligations under the Contract and will not carry out any activities without prior written consensus of Party A (including his activity that shall be done but not yet or activity that shall not be done but done) to endanger realization of creditor’s right of the Contract.

5. Party B hereby promises to inform Party A in writing of the change of domicile, communication address, telephone number and business scope and legal person. If Party B fails to above informing obligation and Party A has sent notice and documents to original communication address, it shall be deemed as reach.

6. Party B hereby confirms that he has carefully read, fully known and understood all clauses of the Contract and signature of the Contract is his own willing.

Article 22  Others

1. During the duration of the Contract, Party A’s tolerance, extension or postponement to Party B’s any breach of the Contract or performance of Party A’s rights shall not damage, influence or limit Party A to enjoy all rights ruled in the Contract or laws and shall not be deemed as permit or approval to damage against the Contract or exemption of Party A to adopt actions to Party B’s existing or future breach behaviors.

2. When the Contract becomes avoided or partial clauses become avoided due to any reason by law, Party B shall still perform repayment responsibility. If above situation appears, Party A reserves the right to terminate the Contract and forthwith claim for loan principal and interest and other payments under the Contract to Party B.

3. Notices and requirements related to the Contract of Party A and Party B shall be made in writing.

4. Whereas date or the last during duration ruled in the Contract meets legal holiday, it shall be postponed to the first working day after legal holiday.

Article  23 Effective Conditions and Termination Conditions of the Loan Contract

1. Effective conditions of the Contract: the Contract shall become effective with signatures of all parties (the Contract shall be signed or affixed by signers with rights and seal shall be affixed).

2. Termination conditions of the Contract: Party B has paid off all loan principal and interest and other expenses.

Seal of Party A’s unit: Special Seal for Credit Loan Contract of Business Department of Head Office of Shenzhen Development Bank Limited Liability Company

 

/s/ ____________

 

Signed by responsible person or agent:

January 12, 2012

Seal of Party B’s unit: Shenzhen Dongsen Mobile Communication Technology Co., Ltd. (seal)

Signed by legal representative or agent ad litem: Lin Zihong (seal)

January 12, 2012

Consistent in electronic inspection and print

Consistent in labor inspection and print

Handled by: Peng Dandan, Guo Xiaolong

  

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Signature and seal of legal person shall present his own true willing

 

/s/ _____________

 

Consistent in electronic inspection and print

Consistent in labor inspection and print

Handled by: Peng Dandan, Guo Xiaolong

Appendix:

Payment Application

Business Department of Head Office of Shenzhen Development Bank Limited Liability Company:

In accordance with provisions of SFZYDZ No.20120113004 Loan Contract concluded with your bank, our company applies to carry out loan payment and irrevocably authorize your bank to pay loan fund to our appointed partner. Detailed paying target and amount are as follows:

	
Name of paying target

	
Account

	
Currency type

	
Paying amount (Yuan)

	
Shenzhen NewPower Technology Co., Ltd.

	
102001516010037558

	
RMB

	
15 million

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

Our company will, pursuant to contractual provisions, provide certification materials related to this payment application such as commercial contract and guaranty that above certification materials are authentic, legal and effective.

Applicant:Shenzhen Dongsen Mobile Technology Co., Ltd(seal).

Seal:

Signature of authorized signer: Lin Zihong(seal)

January 12, 2012

(Seal)

 

Signature and seal of legal person shall present his own true willing

/s/ _______________

  

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Introduction and Tips to Use of Loan Contract

1. Loan Contract shall be concluded to public loan (excluding loan for fixed assets).

2. Interest rate clause

(1) Interest rate clause shall be filled strictly according to opinion of final trail. For instance, “floating per month/quarter/half year/year” shall be respectively filled in Article 1, Paragraph 3, (2) and “(1) per month/three months/three months/sixth month of half year/year and date corresponding to issuing day of the loan, ... ” shall be filled in regulation of interest rate.

(2) When loan interest rate floats every year, regulation day of interest rate (annually corresponding to issuing date of the loan and corresponding date or January 1 of each year) shall be chosen in Article 1, Paragraph 3, 2 of the Contract.

(3) If existing loan interest rate clause is inapplicable due to policy adjustment, additional remark can be made at Article 8 “other matters ruled by Party A and Party B”.

4. Loan use shall be consistent with actual use. If it is refinancing loan, please note original loan contract number.

5. “Loan issuing conditions” in Article 2, Paragraph 1 of the Contract shall be chosen according to loan issuing situation; whereas there are extra conditions and requirements for loan issuance, please choose Paragraph 3 of the article and detailed conditions and requirements shall be defined in Paragraph 3.

6. Whereas (II) “payment management” in Article 2, Paragraph 2 “payment of loan fund” adopts 1 “payment way”, it shall be filled according to detailed business condition. When “partial entrusted payment” is chosen, please fill amount standard of entrusted payment according to opinion of final trial.

6. Whereas (II) “payment management” in Article 2, Paragraph 2 “payment of loan fund” adopts 2 “automatic payment”, Party B shall, upon summarization upon ____, tell loan fund payment condition to Party A and contents such as per month/quarter/half year can be filled according to business condition.

6. As for Article 3, Paragraph 1, 2 of the Contract, you can choose different options on fund collection account according to business detailed condition.

7. In Article 11, Paragraph 2 of the Contract that debtor automatically repays in advance, obligatory rule on charging extra interest is cancelled. If you need to charge interest from debtor, please negotiate with debtor.

8. Way for dispute settlement

In choosing way for dispute settlement, if you choose arbitration, please correctly fill the name and location of chosen arbitration committee, otherwise arbitration clauses will be mistaken or even avoided due to error in name of arbitration committee.

8. Action under coercion of notary clauses

Notary clauses of action under coercion of Loan Contract are changed for optional. If limit contract needs notarization under action under coercion, please tick the first choice.

9. Options and blank clauses (for instance, other matters ruled by parties)

Whereas □ is before option, please tick “√” before your choice.

Whereas there is bracket for contents after blank line, please fill contents in bracket on the line and draw slash for no contents.

10. When model contract is filled with errors, please resign contract principally. Under specific situation that it is necessary to modify on the contract, please slash the errors and note correct contents beside and then various parties shall sign and/or seal at modified places.

11.           Penalty interest rate

Penalty interest rate ruled in the Contract shall be to charge extra 50% according to applicable loan interest rate. Diverted penalty interest rate shall be to charge extra 100% according to applicable loan interest rate in diverting. If penalty interest rates for detailed businesses are different, please remark at Article 8 “Other matters ruled by Party A and Party B”.

12. Under specific situation that it is necessary for its legal representative or agent to seal for signature (including that our bank needs responsible person to seal for signature), please examine the authenticity of the seal.

 

 

 

 

 

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