Document:

ex10.htm

Exhibit 10.1

MIDDLEBURG FINANCIAL CORPORATION

SUPPLEMENTAL BENEFIT PLAN

As Amended and Restated

Effective November 17, 2010

  

  

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

TABLE OF CONTENTS

	  	
Page

	
INTRODUCTION

	
1

	  	  
	
ARTICLE I DEFINITIONS

	
2

	  	  	  	  
	  	
1.01

	
Account

	
2

	  	
1.02

	
Annual Compensation

	
2

	  	
1.03

	
Beneficiary

	
2

	  	
1.04

	
Board

	
2

	  	
1.05

	
Change in Control

	
2

	  	
1.06

	
Code

	
3

	  	
1.07

	
Committee

	
3

	  	
1.08

	
Company

	
3

	  	
1.09

	
Company Contribution

	
3

	  	
1.10

	
Credited Service

	
3

	  	
1.11

	
Disability or Disabled

	
3

	  	
1.12

	
Eligible Employeee

	
3

	  	
1.13

	
ERISA

	
3

	  	
1.14

	
Participant

	
4

	  	
1.15

	
Plan

	
4

	  	
1.16

	
Plan Year

	
4

	  	  
	
ARTICLE II  PARTICIPATION

	
5

	  	  	  	  
	  	
2.01

	
Eligibility to Participate

	
5

	  	
2.02

	
Removal From Participation

	
5

	  	  
	
ARTICLE III  BENEFITS

	
6

	  	  	  	  
	  	
3.01

	
Contributions

	
6

	  	
3.02

	
Vesting

	
6

	  	
3.03

	
Investment of Accounts

	
7

	  	  
	
ARTICLE IV  DISTRIBUTIONS

	
8

	  	  	  	  
	  	
4.01

	
Timing of Payment

	
8

	  	
4.02

	
Form of Payment

	
8

	  	
4.03

	
Death or Disability

	
8

	  	
4.04

	
Forfeiture

	
9

 

 

Supplemental Benefit Plan

 

  

i  

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

 

	  	  	  	  
	  	
4.05

	
No Acceleration

	
9

	  	  
	
ARTICLE V  ADMINISTRATION

	
10

	  	  	  	  
	  	
5.01

	
Administrator

	
10

	  	
5.02

	
Indemnification

	
10

	  	
5.02

	
Claims Procedure

	
10

	  	  
	
ARTICLE VI  AMENDMENT AND TERMINATION

	
11

	  	  	  	  
	  	
6.01

	
Amendment

	
11

	  	
6.02

	
Termination

	
11

	  	  
	
ARTICLE VII  MISCELLANEOUS

	
12

	  	  	  	  
	  	
7.01

	
Effect on Employment Rights

	
12

	  	
7.02

	
Unfunded Plan

	
12

	  	
7.03

	
Retired Participant Not an Employee

	
12

	  	
7.04

	
Non-Alienation

	
12

	  	
7.05

	
Construction of the Plan

	
12

	  	
7.06

	
Binding Nature

	
12

	  	
7.07

	
Governing Law

	
13

	  	  
	
ARTICLE VIII  ADOPTION

	
14

	  	  
	
EXHIBIT I

	
15

	  	  

 

Supplemental Benefit Plan

 

  

ii  

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

INTRODUCTION

The Board of Directors of Middleburg Financial Corporation adopted the Supplemental Benefit Plan, effective July 1, 2004, for the purpose of attracting and retaining qualified individuals to serve as officers and managers of the Company.

The Plan is intended to be unfunded and maintained primarily for the purpose of providing deferred compensation for a “select group of management or highly compensated employees” (as such phrase is used in the Employee Retirement Income Security Act of 1974).  The Plan must be administered and construed in a manner that is consistent with that intent.

Effective January 1, 2005, any benefit, payment or other right provided by the Plan shall be provided or made in a manner, and at such time, in such form and subject to such election procedures (if any), as comply with the applicable requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and Treasury Regulations thereunder to avoid a plan failure described in Code section 409A(a)(1), including without limitation, deferring payment until the occurrence of a specified payment event described in Code section 409A(a)(2).  Notwithstanding any other provision hereof or document pertaining hereto, the Plan shall be so construed and interpreted.

It is specifically intended that all elections, consents and modifications thereto under the Plan will comply with the requirements of Code section 409A (including any transition or grandfather rules thereunder).  The Company is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply with the requirements of Code section 409A (including any transition or grandfather rules thereunder) and to declare any election, consent or modification thereto void if non-compliant with Code section 409A.

The Plan was amended and restated, effective May 7, 2010, to change the benefit formula, to add new participants, and to provide for a benefit under the Plan upon a participant’s death.  The Plan is further amended and restated, effective November17, 2010, to make certain clarifying changes.

Supplemental Benefit Plan

 

  

  

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

ARTICLE I

DEFINITIONS

The following phrases or terms have the indicated meanings:

1.01           Account

Account means the notional account established and maintained for each Participant in accordance with Article III hereof, for bookkeeping purposes only, to measure the value of the Company Contributions made under the Plan and the earnings thereon.

1.02           Annual Compensation

Annual Compensation means the Participant’s annual base cash compensation, plus bonuses or commissions, including any pre-tax deferrals, earned in a Plan Year.

1.03           Beneficiary

Beneficiary means the person, persons, entity, entities or the estate of a Participant entitled to receive benefits under the Plan in accordance with a properly completed beneficiary designation form.  If a Participant fails to complete a beneficiary designation form, or if the form is incomplete, Beneficiary means the Participant’s estate.  A Participant may amend or change his Beneficiary designation in accordance with procedures established by the Committee.

1.04           Board

Board means the Board of Directors of Middleburg Financial Corporation.

1.05           Change in Control

Change in Control means any of the following: (i) any person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the owner or beneficial owner of Corporation securities having twenty percent or more of the combined voting power of the then outstanding Corporation securities that may be cast for the election of the Corporation’s directors, other than as a result of an issuance of securities initiated by Corporation, or open market purchases approved by the Board, as long as the majority of the Board approving the purchase is a majority at the time the purchases are made; (ii) a contested election of directors in which less than a majority of the individuals nominated by the Board of the Corporation are elected; or (iii) a merger or consolidation of Corporation with, or into, another corporation or the sale, conveyance or other transfer of substantially all of the assets or stock of Corporation if, immediately following such transaction, those who were directors of the Corporation immediately before such transaction do not constitute at least a majority of the surviving or resulting corporation.  In the event that there is a transaction under a plan which

Supplemental Benefit Plan

 

  

2

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

involves a Change of Control of the Corporation, then the date of Change of Control shall be the date that the last step in the plan causes a Change of Control of the Corporation to occur.

1.06           Code

Code means the Internal Revenue Code of 1986, as amended.

1.07           Committee

Committee means the Compensation Committee of the Company’s Board of Directors.

1.08           Company

Company means Middleburg Financial Corporation, designated subsidiaries, and successors thereto.

1.09           Company Contribution

Company Contribution means the contribution described in Plan section 3.01 and which is credited to a Participant’s Account.

1.10           Credited Service

Credited Service means the Participant’s completed years of service with the Company, beginning with the Participant’s date of hire.

1.11           Disability or Disabled

Disability or Disabled shall mean the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

1.12           Eligible Employee

Eligible Employee means a Senior Manager of the Company with a minimum of one year of service as vice president (or higher) of the Company.

1.13           ERISA

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

Supplemental Benefit Plan

 

  

3

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

1.14           Participant

Participant means a member of senior management who has been selected by the Committee to participate in the Plan and who has not been removed therefrom, pursuant to Article II.

1.15           Plan

Plan means the Middleburg Financial Corporation Supplemental  Benefit Plan.

1.16           Plan Year

Plan Year means the fiscal year of the Company, which is the calendar year.

Supplemental Benefit Plan

 

  

4

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

ARTICLE II

PARTICIPATION

2.01           Eligibility to Participate

Participation in the Plan shall be limited to Eligible Employees of the Company who are designated by the Committee to participate in the Plan.  The Committee shall have sole, absolute and complete discretion to select Eligible Employees as Participants.  The Committee shall inform each Participant of his designation as a Participant.

2.02           Removal From Participation

The Committee shall have sole, absolute and complete discretion to remove a Participant from the Plan.  Upon removal, the Participant shall not be eligible for additional Company Contributions but shall be credited with any additional years of Credited Service, if any, during his continued employment with the Company.

Supplemental Benefit Plan

 

  

5

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

ARTICLE III

BENEFITS

3.01           Contributions

(a)           Effective for Plan Years beginning January 1, 2010, as of the last day of each Plan Year, the Company shall credit the Account of each Participant listed on Exhibit I attached hereto an amount equal to a percentage of such Participant’s annual base compensation, including pre-tax deferrals of such base compensation.  The percentage for each Participant is shown on Exhibit I.

(b)           Effective for Plan Years through December 31, 2009, as of the last day of each Plan Year, the Company shall credit to a Participant’s Account an amount equal to the sum of (1) and (2) where:

(1)           equals the Participant’s Annual Compensation in excess of the Social Security Wage Base as in effect for the Plan Year times the percentage paid by the Company on behalf of the Participant under the Federal Security Act; and

(2)           equals the Participant’s Annual Compensation in excess of the dollar amount specified in Code section 414(q)(1)(B)(i), as adjusted in accordance with Code section 415(d) ($90,000 for 2004) times the rate of employer matching contribution made by the Company for the Plan Year under the Company’s 401(k) Savings Plan.

(c)           No Company contribution shall be made under Plan Section 3.01(a) or 3.01(b) for a Participant who is not an Eligible Employee as of December 31 of the Plan Year for which the contribution is credited.

(d)           In addition to the amounts credited in accordance with Sections 3.01(a) and (b) above, the Company shall credit to the Account of Arch Moore (Executive Vice President – Chief Lending Officer), an opening account balance, as of July 1, 2004, equal to (a) the amount that would have been credited each year to such Participant’s Account under Section 3.01(b) above based on Annual Compensation earned from calendar years 1999 through 2003 plus (b) earnings on each year’s credited amount equal to a rate of 6% credited annually.

3.02           Vesting

(a)           Subject to Plan Section 4.04, each Participant shall be fully vested in his Account upon the completion of five years of Credited Service, death, or Disability.

(b)           A Participant who terminates employment from the Company (other than due to death or Disability) prior to completing five years of Credited Service shall vest in his Account in accordance with the following schedule:

Supplemental Benefit Plan

 

  

6

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

	
Years of Credited Service

	
Vested percentage

	
One or less

	
0%

	
More than one, but less than two

	
20%

	
More than two, but less than three

	
40%

	
More than three, but less than four

	
60%

	
More than four, but less than five

	
80%

	
Five or more

	
100%

(c)           A Participant who terminates his employment prior to the completion of five years of Credited Service, death, or Disability, shall forfeit the non-vested portion of his Account.

(d)           Notwithstanding the above, a Participant shall be fully vested in his Account upon a Change in Control of the Company.

3.03           Investment of Accounts

(a)           Each Participant shall be entitled to direct the deemed investment of the amounts credited to his Account in any of the investment choices or combination of investment choices as may be offered by the Committee from time to time in accordance with the rules, regulations and procedures established by the Committee.  The Committee may add or remove investment choices in its sole discretion.  Commencing January 1, 2010, a Participant’s Account will be credited with earnings for a Plan Year in an amount equal to the ten-year U.S. Treasury Daily Yield Curve Rate quoted for December 1 of the year immediately preceding such Plan Year plus 150 basis points.  Such earnings rate will continue in effect until another earnings rate or deemed investment choice, if any, is announced by the Committee.

(b)           Each Participant’s Account shall be credited with earnings and losses in accordance with such Participant’s investment choices or the rate of earnings provided in Plan Section 3.03(a) as applicable.  Earnings and losses shall begin to accrue with respect to amounts credited to the Participant’s Account in accordance with the procedures established by the Committee.

Supplemental Benefit Plan

 

  

7

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

ARTICLE IV

DISTRIBUTIONS

4.01           Timing of Payment

Except as provided in Plan sections 4.03 or 4.04, a Participant shall begin to receive distributions from his Account on the first day of the month following his “separation from service” (within the meaning of Code section 409A and Treasury Regulations thereunder) with the Company, other than in the event of Participant’s Disability, which shall be governed by Plan section 4.03.  Notwithstanding the foregoing, if a Participant is a “specified employee” (within the meaning of Code section 409A and Treasury Regulations thereunder) on the date of his or her separation from service, benefits under this Plan will commence on the first day of the month following the six-month anniversary of the date of the Participant’s separation from service to the extent required by Code section 409A and Treasury Regulations thereunder.  The first payment shall include the payments, if any, required to be delayed under the preceding sentence.

	
4.02

	
Form of Payment

Any payment from a Participant’s Account shall be made in cash in equal or substantially equal quarterly installments over a ten-year period, except as provided in Section 4.03 below.  The earnings rate in effect under Plan section 3.03(a) on the date payments commence under this Article IV shall be applied to Participant’s Account during the entire period over which benefits are paid out under this Article IV.

4.03           Death or Disability

(a)           In the event a Participant separates from service with the Company (within the meaning of Code section 409A and Treasury Regulations thereunder) due to death, the balance of such Participant’s Account as of the date of Participant’s death shall be paid to the Participant’s Beneficiary within thirty (30) days following the Participant’s death in a single lump sum payment.

(b)           If the Participant dies after his separation from service with the Company, including after benefits have commenced under this Article, his Beneficiary shall be entitled to the remaining balance of such Participant’s Account, payable over the remaining installment period.

(c)           In the event of Participant’s Disability, the balance of such Participant’s Account shall be paid to the Participant (or the Participant’s legal representative) commencing on the first day of the month following the date the Participant is determined to be Disabled and in the form provided in Plan section 4.02 or over such shorter period as may be permitted by Treasury Regulation, notice or ruling.

Supplemental Benefit Plan

 

  

8

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

4.04           Forfeiture

(a)           Notwithstanding any other provisions in the Plan, a Participant shall forfeit his entire interest in the Plan if he is (i) dismissed for Cause (or is permitted to resign or retire in lieu of dismissal) or (ii) separates from service and becomes employed within one year after separation from service with an entity that is deemed to be in Competition with the Company; provided, however, that this clause (ii) does not apply in the event of Participant’s termination of employment following a Change in Control.

(b)           For purposes of this Section 4.04, “Cause” means the Participant’s failure to perform the material functions of his job or any reason other than for Disability; unlawful business conduct; theft; commission of a felony; or the failure of the Participant, within 10 days after receipt by the Participant of written notice from the Board to correct, cease or otherwise alter any act or omission that materially or adversely affects the Company’s profits or operations.

 

(c)           For purposes of this Section 4.04, “Competition” means to directly or indirectly, either as a principal, agent, employee, employer, stockholder, co-partner or any other individual or representative capacity whatsoever: (i) engage in a Competitive Business anywhere with a 25 mile radius of any office operated by the Company or on the date the Participant’s employment terminates; or (ii) solicit, or assist any other person or business entity in soliciting, any depositors or other customers of the Company to make deposits in or to become customers of any other financial institution conducting a Competitive Business; or (iii) induce any individuals to terminate their employment with the Company.  As used in this Plan, the term “Competitive Business” means all banking and financial products and services that are substantially similar to those offered by the Company on the date that the Participant’s employment terminates.

 

	
4.05

	
No Acceleration

No acceleration of any payment or benefit is permitted under this Plan unless in accordance with Code section 409A and Treasury Regulations or other applicable guidance thereunder.

Supplemental Benefit Plan

 

  

9

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

ARTICLE V

ADMINISTRATION

5.01           Administrator

The Plan is administered by the Committee.  The Committee has complete authority to take any steps the Committee, in its sole discretion, deems necessary or appropriate to carry out the purposes of the Plan.  The Committee has sole, absolute and discretionary authority to interpret the provisions of the Plan.  Without limiting the generality of the foregoing, the Committee may prescribe interpretive rules, procedures and forms for the administration of the Plan.  In addition, the Committee in its sole discretion may delegate ministerial duties with respect to the administration of the Plan to employees of the Company or to third parties.

5.02           Indemnification

The Company shall indemnify and save harmless each member of the Board against any and all expenses and liabilities arising out of membership on the Board, excepting only expenses and liabilities arising out of a member’s own willful misconduct.  Expenses against which a member of the Board shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof.  The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled.

5.03           Claims Procedure

All claims for benefits shall be in writing in a form satisfactory to the Committee.  If the Committee wholly or partially denies a Participant’s or Beneficiary’s claim for benefits, the Committee shall review the Participant’s claim in accordance with applicable procedures described in the Employee Retirement Income Security Act of 1974.

Supplemental Benefit Plan

 

  

10

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

ARTICLE VI

AMENDMENT AND TERMINATION

6.01           Amendment

Except as provided below, the Board shall have full authority to amend the Plan prospectively or retroactively in any respect without the consent of any Participant or Beneficiary.  However, the Plan may not be amended to affect adversely benefits due to Participants who are fully or partially vested in accordance with Plan section 3.02.  For purposes of this Plan, benefits earned and vested to the date of any such amendment shall be calculated as if the Plan were terminated on the date of such amendment.

6.02           Termination

The Board, in its sole, absolute and complete discretion, may discontinue and terminate the Plan at any time without the consent of any Participant or Beneficiary, who shall have no further right to benefits under the Plan; provided, however, that such action shall not adversely affect benefits due to Participants who are fully or partially vested in accordance with Plan section 3.02 as the date of such termination.  Any such termination shall be carried out in accordance with Code section 409A and Treasury Regulations or other applicable guidance thereunder.

Supplemental Benefit Plan

 

  

11

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

ARTICLE VII

MISCELLANEOUS

7.01           Effect on Employment Rights

Nothing contained in this Plan shall be deemed to give any Participant or employee the right to be retained in the service of the Company or to interfere with the right of the Company to discharge any Participant or employee at any time regardless of the effect which such discharge shall have upon him as a Participant in the Plan.

7.02           Unfunded Plan

Benefits under the Plan are unfunded.  The rights of a Participant or Beneficiary shall be solely those of any unsecured general creditor of the Company.  Should the Company choose to invest in insurance contracts or other specific assets with a view towards providing an informal source of funds to pay benefits hereunder, any such asset shall be held in the Company’s name and shall be subject to the claims of its general creditors, and no Participant shall have any special claim or lien on any such asset.  No trust or security interest is intended to be created by this document.

7.03           Retired Participant Not an Employee

A retired Participant shall not be considered an employee for any purpose under the law.

7.04           Non-Alienation

Except insofar as this provision may be contrary to applicable law, no sale, transfer, alienation, assignment, pledge, collateralization, or attachment of any benefits under this Plan shall be valid or recognized by the Committee.

7.05           Construction of the Plan

For the purposes of the Plan, the singular shall include the plural and vice versa; and the use of any gender shall include all genders.

7.06           Binding Nature

This Plan shall be binding upon the inure to the benefit of the Company, its successors and each Participant and his heirs, executors, administrators and legal representatives.

Supplemental Benefit Plan

 

  

12

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

7.07           Governing Law

To the extent not preempted by federal law, the Plan shall be governed by the laws of the Commonwealth of Virginia, including its choice of law rules, except to the extent those rules would require the application of the law of a state other than Virginia, as in effect at the time of their adoption and executing, respectively.

Supplemental Benefit Plan

 

  

13

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

ARTICLE VIII

ADOPTION

The Corporation has adopted this restated Plan pursuant action taken by the Board.

 

As evidence of its adoption of the Plan, as amended and restated effective November 17, 2010, Middleburg Financial Corporation has caused this document to be signed by its President and Chief Executive Officer this 17th day of November 2010.

 

	 	 MIDDLEBURG FINANCIAL CORPORATION	 
	 	 	 
	 	 /s/ Gary R. Shook	 
	 	 Gary R. Shook	 
	 	 President and Chief Executive Officer	 

 

Supplemental Benefit Plan

 

  

14

  

Middleburg Financial Corporation

Supplemental Benefit Plan

As Amended and Restated

Effective November 17, 2010

EXHIBIT I

This Exhibit I applies for Plan Years commencing on and after January 1, 2010.

	
 

 

       Name

	
 

Plan Section 3.01(a)

Date of Participation

	
 

Plan Section 3.01(a)

Benefit Percentage

	
 

       Gary Shook

	
 

May 7, 2010

	
 

14.0%

 

	
       Arch Moore

	
May 7, 2010

	
24.4%

 

	
       Raj Mehra

	
May 7, 2010

	
8.5%

 

	
       Jeff Culver

	
May 7, 2010

	
2.1%

Supplemental Benefit Plan

 

  

15bthcxv8kex101112210.htm

Exhibit 10.1

 

Renminbi Loan Application (short term)

(Applicable to the Middle & Small Scale Enterprise Renminbi Loan)

No.: 2010 Yishui BOC Jieshen 017#

To: Bank of China Yishui Branch

  To meet the need of business operation, in accordance with the “Middle & Small Scale Enterprise Credit Line Granting Agreement” No.: 2010 Yishui BOC Jieshen 016# and “Attachment 1: Applicable to Renminbi Loan Operations (short term)”, the Applicant hereby applies for Renminbi short term loan. The rights and obligation caused by above action shall apply to the engagement of above agreement, attachment and this application.

Article 1: Loan Amount

 

	The loan amount is: 	(in words) Renminbi Fifteen Million Yuan
	 	 (in number) 15,000,000.00

 

Article 2: Loan Period

The period is 12 months, starting from the loan fund drawdown date; If the fund is drawn by installments, it shall be starting from the first term drawdown date.

The applicant shall drawdown following strictly as scheduled; the actual drawdown date is later than scheduled date, the applicant shall repay the loan as scheduled by the application.

Article 3: Loan Purpose

The loan purpose is: working capital, cost for advertising and promotion

Article 4: Loan interest, interest computation and payment

4.1 Loan Interest rate

Fixed interest rate, in an annual rate of 6.116% remaining unchanged within the valid period of the application.

4.2 Interest computation

The interest shall be calculated from the drawdown date, according to the exact amount of the fund drawn and the exact using days.

4.3 Payment of Interest

The interest shall be paid by:

Paid by quarter, the 20th of the last month of the quarter shall be the interest computation day, the 21st shall be the payment day.

If the payment day of the last term is not on the above mentioned payment day, the last term repaid date shall be regarded as the payment day, on which the applicant pays up the payable interest.

4.4 Penalty Interest

4.4.1 If the applicant fails to carry out the payment on time, the penalty interest shall be charged on the overdue part of the loan in a penalty interest rate, until the loan principal and interest are paid up.

 

 

  

  

  

The penalty interest rate on the overdue loan shall be the rate under the Item 4.1 PLUS 50%.

4.4.2 If the applicant changes the loan purpose as stipulated, the mis-using penalty interest shall be charged on the mis-using part of the loan in a mis-using penalty interest rate from the date the loan is mis-used, until the loan is repaid up.

The mis-using penalty interest rate shall be the rate stipulated under Item 4.1 PLUS 100%.

4.4.3 The loan is overdue and mis-used, the interest shall be calculated based on the mis-using penalty interest rate.

4.4.4 If the applicant fails to pay the interest on time, in accordance with the interest payment stipulated under Item 4.3, the interest shall be calculated in the loan interest rate pursuant to Item 4.1 within the loan period; the loan is overdue, the compound interest shall be calculated in the Penalty interest rate pursuant to this item.

4.4.5 During the penalty interest and compound interest calculation, the loan lending interest incurs a adjustment, the above interest shall be calculated by terms from the date of adjustment.

Article 5: Date and Methods of Drawdown

5.1 The drawdown method and the date as following:

One-off drawdown on the date of 21-10-2010

5.2 The bank has the right to refuse to release the fund after the above drawdown date.

If the bank agrees to release the loan, it may has right to charge a commitment fee on the preferred drawdown in a rage of 0.03%; the part of the loan which the bank refuses to release, on which shall be charged the commitment fee in a rage of 0.03%.

Article 6: Loan Repayment

6.1 Except stipulated under another agreement, the applicant shall repay back the loan as following scheduled:

To repay up the loan in a lump sum at the expiration of the loan.

If the repayment schedule needs to be changed, the applicant shall submit a written application to the bank in 7 bank business days prior to the expiration of the loan, and it shall be confirmed by both parties in writing.

 

6.2 Except stipulated under another agreement, if the Applicant defaults on the loan principal and interest, the bank has the right to decide the repayment order of the loan principal or the interest; in the event of repaying by installments, there are many due or overdue loans under this application, the bank has the right to decide the repayment order of above loans; if there are many due loan contracts between the Applicant and the bank, the bank has the right to decide the repayment order of these loan contract.

 

6.3 Except stipulated under another agreement, if the Applicant decides to repay the loan ahead of schedule, shall inform the bank in writing in 7 bank business days advance. The fund shall be repaid to the latest due loan, following a reverse order of repayment.

 

 

  

  

  

The bank has the right to charge the compensation in a rate of 10% of the payment in advance.

6.4 The applicant shall carry out the repayment as following:

 

The Applicant shall deposit enough money in the repayment account in 2days prior to the due date of each payable term of principal and interest; the bank has the right to draw the above fund from the repayment account on the date of each due term of principal and interest.

 

	 	 
The repayment account is: Shandong Longkong Travel Development Co., Ltd

	 	 
Account No.:

 

Article 7: Warranties

7.1 The warranties of the debt under this application is:

This application is the Main contract under the “Pledge Contract of Middle & Small Scale Enterprise in a Maximum Amount”, Contract No.: 2010 Yishui BOC Gao e di 016#, signed between the guarantor Yishui Yinhe Tourism Developing Co., Ltd and the bank, which provides the warranties to the main contract.

This application is the Main contract under the “Guarantee Contract of Middle & Small Scale Enterprise in a Maximum Amount”, Contract No.: 2010 Yishui BOC Gao e di 016-1#, signed between the guarantor Mr. Zhang Shanjiu and the bank, which provides the warranties to the main contract.

This application is the Main contract under the “Guarantee Contract of Middle & Small Scale Enterprise in a Maximum Amount”, Contract No.: 2010 Yishui BOC Gao e di 016-2#, signed between the guarantor Junan Tianma Tourism Developing Co., Ltd and the bank.

This application is the Main contract under the “Guarantee Contract of Middle & Small Scale Enterprise in a Maximum Amount”, Contract No.: 2010 Yishui BOC Gao e di 016-3#, signed between the guarantor Yishui Yinhe Tourism Developing Co., Ltd and the bank.

This application is the Main contract under the “Guarantee Contract of Middle & Small Scale Enterprise in a Maximum Amount”, Contract No.: 2010 Yishui BOC Gao e di 016-4#, signed between the guarantor Yishui Underground Fluorescence Lake Tourism Developing Co., Ltd

7.2 If the Applicant or the Guarantors incur such events which the bank believes that may effect their contract performing abilities; or the guarantee contract become invalid, canceled or terminated; or the Applicant or guarantors incur a financial status worsening, or involved into a material lawsuit or arbitration; or other matters may cause the contract performing abilities; or the guarantors breach this Guarantee contract or other contract signed with the bank; or the guaranty incurs depreciation, damage, losses, sealed up, which causes the guarantee value decreasing or loss, in such events, the bank has the right to require the Applicant to provide a new warranty, to change guarantors and other actions to secure the debt under this contract.

 

 

  

  

  

Article 8: Attachment

The following attachment or other attachments which accepted by both parties shall be regarded as the inseparable part of the application, has the same legal effect with the application.

Renminbi Loan Drawdown Application (short term);

Applicant: Shandong Longkong Travel Development Co., Ltd (sealed)

Signed by Authorized Person:       /s/ Zhang Shanjiu

Date: 20-10-2010

Bank Approval:  Approved  (and sealed by: BOC Yishui Branch)

Signed by Authorized Person/manager:       /s/ Li Shiming

Date: 20-10-2010

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