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China BAK Battery, Inc.: Exhibit 10.12 - Filed by newsfilecorp.com

Exhibit 10.12

English Translation of Loan Agreement 

Borrower: Shenzhen BAK Battery Co., Ltd 
Address: BAK
Industrial Park, Kuichong Street, Longgang District, Shenzhen 
Legal
Representative: Xiangqian Li 

Lender: Jinghui Wang 
Address: 

In accordance with related laws and regulations, the two
parties agreed to this agreement on December 17, 2013. 

	1. 	
      Basic

	 	 	 
	1.1 	
      The loan amount is RMB 370,000,000.

	 	 	 
	1.2 	
      The loan will be transferred by the Lender to the
      Borrower’s account before January 17, 2014 in installments, among which
      RMB 80 million has been transferred to the Borrower on December 13,
      2013.

	 	 	 
	1.3 	
      The loan principal and interest shall be repaid to the
      Lender by March 31, 2014.

	 	 	 
	1.4 	
      The interest is 20% per annum and shall be accrued
      monthly.

	 	 	 
	1.5 	
      The loan purpose is to provide working capital to the
      Borrower for operations.

	 	 	 
	1.6 	
      Account supervision: The Borrower shall provide the name
      and numbers of its bank accounts with respect to the Borrower’s collection
      of account receivables to the Lender. The Lender is entitled to request
      the Borrower to provide the record of the accounts in a timely
    manner.

	 	 	 
	1.7 	
      Repayment: The Borrower shall repay the loan principal
      and interest to the Lender’s designated account one day before the mature
      date

	 	 	 
	2. 	
      Guaranty and Mortgage

	 	 	 
	2.1 	
      To secure the loan agreement, the guaranty and mortgage
      are as follows:

	 	 	 
		(1) 	
      BAK International Limited provides corporate
    guaranty;

	 	 	 
		(2) 	
      China BAK Battery, Inc provides corporate
  guaranty;

	 	 	 
		(3) 	
      China BAK Battery, Inc pledges 100% equity interest in
      BAK International Limited

	 	 	 
	2.2 	
      The guaranty agreement and mortgage agreement and other
      related documents will be entered into by the guarantor, mortgagor and the
      Borrower, which clauses will be drafted and decided by the Lender’s
      attorney. The agreements shall be in compliance with related rules and
      regulations, which the Borrower, guarantor and mortgagor shall cooperate
      with.

	 	 	 
	2.3 	
      All the legal expenses related to the loan agreement,
      guaranty agreement, mortgage agreement and other documents incurred by the
      Lender will be reimbursed by the Borrower.

	 	 	 
	2.4 	
      If upon the request of the Borrower, any amount of the
      loan is provided to the Borrower by the Lender before the guaranty
      agreement and mortgage agreement are signed, it will not be deemed as
      Lender’s waiver of the abovementioned guaranty and mortgage requirements
      or other clauses of the loan agreement. The Borrower shall continue to
      perform the abovementioned guaranty and mortgage to the satisfactory of
      the Lender.

	
3. 		
Legal responsibility

	
	 	 	 
	
3.1 		
The Borrower constitutes breach of the agreement in the event it shall:

	
	 	 	 
		
(1) 		
violate the obligations of the agreement;

	
	 	 	 
		
(2) 		
Not perform the promises made under clause 2;

	
	 	 	 
		
(3) 		
Clearly state or its behavior indicates it will not repay the loans matured or to be matured;

	
	 	 	 
		
(4) 		
Not perform or not fully perform the obligations under other agreements entered into by the Borrower and the Lender, and the Lender declares the default of the Borrower;

	
	 	 	 
		
(5) 		
Other situations that the Borrower do not perform or fully perform the agreements;

	
	 	 	 
	
3.2 		
In the following event, the Lender can terminate this loan agreement and other agreements entered into by the Borrower and the Lender:

	
	 	 	 
		
(1) 		
The Borrower or the guarantor is in breach of agreement;

	
	 	 	 
		
(2) 		
The Borrower or the guarantor’s ability to repay the loan deteriorates materially;

	
	 	 	 
		
(3) 		
The collateral or mortgaged property suffers material damage or loss;

	
	 	 	 
		
(4) 		
Adjustment of national policy that may materially, adversely affect the loan;

	
	 	 	 
		
(5) 		
The Borrower is in material breach of agreement with other creditors;

	
	 	 	 
		
(6) 		
Other situations in which the agreement may be terminated according to laws or by mutual consent of the parties.

	

	
3.3 		
In the event that the situations under clause 3.1 and 3.2 occur, the Lender is entitled to exercise its legal and contractual rights and claim for damages.

	
	 	 
	
3.4 		
In the event due to default of the Borrower, the Lender seeks for litigation or arbitration to exercise its rights, all the fees, including legal fees, traveling fees, performance fees, valuation fees and other fees incurred for
realizing its rights shall be reimbursed by the Borrower.

	
	 	 
	
4. 		
Other clauses

	
	 	 
	
4.1 		
Not exercising or partly exercising any of its rights by the Lender under the loan agreement does not constitute waiver or change of its rights or other rights, and does not influence the future exercise of its right or other
rights.

	

	
4.2 		
Dispute resolution

	
	 	 
	
4.2.1 		
The two parties will negotiate to settle the dispute; if not successful, parties may submit to Shenzhen Arbitration Committee for arbitration;

	
	 	 
	
4.2.2 		
During the course of arbitration, the clauses without dispute shall be performed.

	
	 	 
	
4.3 		
Legal effect

	
	 	 
	
4.3.1 		
The loan agreement becomes effective since the signature date between the Borrower and the Lender.

	
	 	 
	
4.3.2 		
The agreement is signed in Shenzhen.

	
	 	 
	
4.3.3 		
The agreement has three copies, one for the Borrower, two for the Lender, with the same effect.

	

The Borrower 
Legal Representative: /s/ Xiangqian Li

________________ 
Date: December 17, 2013 

 

The Lender: /s/ Jinghui Wang 
_________________ 
Date:
December 17, 2013Exhibit 10.1 Consent to Sale of Assets

October 17, 2013

SofTech, Inc.

59 Lowes Ways

Lowell, Massachusetts 018512

Attention:  Joseph P. Mullaney, Chief Executive Officer

Prides Crossing Capital GP, LLC

Prides Crossing Capital, L.P.

Prides Crossing Capital-A, L.P. 

800 Boylston Street, Suite 2220

Boston, Massachusetts 02199

Attention: Peter M. Sherwood, Manager

Re:

Consent to Sale of Assets and Amendment to Loan, Pledge and Security Agreement 

To Whom It May Concern: 

Reference is made to that certain Loan, Pledge and Security Agreement dated as of May 10, 2013 (as amended, modified, supplemented, extended, renewed, restated or replaced from time to time, the “Loan Agreement”), by and among SofTech, Inc., a Massachusetts corporation (the “Borrower”), Prides Crossing Capital, L.P. (“PCC”), and Prides Crossing Capital-A, L.P. (“PCCA” and collectively with PCC, the “Lenders”).  Capitalized terms used herein but not otherwise defined herein shall have the respective meanings assigned to such terms in the Loan Agreement.

The Borrower has notified the Lenders that the Borrower has entered into an Asset Purchase Agreement dated as of August 30, 2013 (the “CADRA Sale Agreement”) with Mentor Graphics Corporation, an Oregon corporation (the “Purchaser”), pursuant to which the Borrower has agreed to sell (the “CADRA Sale”) to Purchaser certain assets of the Borrower comprising the Borrower’s CADRA product line (collectively, the “CADRA Sale Assets”) for a net cash purchase price payable on the closing date of approximately $2,880,000.    

The Borrower has requested that the Lenders (i) consent to the consummation of the CADRA Sale, (ii) waive the provisions of Section 10.12 of the Loan Agreement to the extent necessary to permit the consummation of the CADRA Sale, and (iii) release their liens and security interests in and to the CADRA Sale Assets upon consummation of the CADRA Sale.

1.

Consent, Waiver and Release.  Subject to the terms and conditions set forth in this Section 1, the Lenders hereby (a) consent to the CADRA Sale, (b) waive the provisions of Section 10.12 of the Loan Agreement solely to the extent necessary to permit SofTech to consummate the CADRA Sale and (c) agree that upon (x) the consummation of the CADRA Sale and (y) the remittance by the Purchaser to the Lenders cash equal to $1,350,000 of the net proceeds of the CADRA Sale (such cash, the “Deposit Amount”), all liens and security interests granted in favor of the Lenders in the CADRA Sale Assets shall be automatically released and terminated.  In furtherance of clause (c) of the foregoing sentence, the Lenders (i) agree to deposit and hold the Deposit Amount at U.S. Bank, N.A., in a non-interest bearing escrow account (the “Escrow Account”), subject to the Lender’s continuing security interest under the Loan Agreement, and (ii) authorize the Borrower, or its counsel, to file with the Secretary of State of the Commonwealth of Massachusetts UCC-3 amendments in substantially the form of the UCC-3 amendment attached as Exhibit A hereto, releasing such liens and security interests, (ii) agree to promptly execute and deliver at the Borrower’s expense such other documents that release Lenders’ liens and security interests on file at the U.S. Patent and Trademark Office, and (iii) agree to promptly execute and deliver, at Borrower’s expense, amendments and agreements that release the CADRA Sale Assets from the Source Code Escrow Agreement.

 

2.

Escrow of Deposit Amount.  By their execution of this consent letter (this “Consent”), the Borrower and the Lenders hereby agree that the Deposit Amount and Escrow Account shall be held as cash collateral and security for all outstanding amounts due under the Loan Agreement and Term Notes until the earlier of (i) thirty (30) days after the date of this Consent, or (ii) the date on which the Borrower and the Lenders shall have executed an amendment to the Loan Agreement, and any related documents (collectively the “Restructuring Amendment”), which Restructuring Amendment shall restructure the terms of the Loan Agreement, Term Notes and all other Loan Documents on terms and conditions reasonably satisfactory to the Borrower and the Lenders.  If the Borrower and the Lenders fail to execute the Restructuring Amendment within thirty (30) days after the date of this Consent (the “Restructuring Amendment Agreement Deadline”), (i) the escrow established by this Consent and subsequent agreements shall automatically terminate, the Escrow Account shall terminate and the Deposit Amount shall be transferred to the Lenders, who shall apply such funds in accordance with the terms of the Loan Agreement, and (ii) all amounts which are then unpaid under the Loan Agreement, Term Notes, and all other Loan Documents (including unpaid principal, accrued and unpaid interest, and accrued and unpaid fees) shall be immediately due and payable on the Restructuring Amendment Agreement Deadline.

3.

Effectiveness of Consent.  This Consent shall become effective upon receipt by the Lenders of counterparts of this Consent duly executed by each of the Borrower and the Lenders.  

4.

Effect on Loan Documents.  Except as specifically set forth herein, the Loan Documents shall remain in full force and effect against the Borrower and are hereby ratified and confirmed by the Borrower in all respects.  Except as otherwise expressly set forth herein, the execution, delivery and effectiveness of this Consent shall not operate as a waiver of any right, power or remedy of any Lender under the Loan Documents, nor constitute a waiver, amendment or modification of any provision of the Loan Documents except as specifically set forth herein.  This Consent shall be deemed to be a Loan Document.

5.

Miscellaneous.  This Consent shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts.  This Consent may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall be one agreement.  

[Signature pages follow]

 

IN WITNESS WHEREOF, the undersigned have executed this Consent as of the date first set forth above.  

BORROWER

SOFTECH, INC.

By: /s/ Joseph P. Mullaney

Name:  Joseph P. Mullaney

Title:  Chief Executive Officer

LENDERS

PRIDES CROSSING CAPITAL, L.P.

By:  PRIDES CROSSING CAPITAL GP, LLC, its General Partner

By:/s/ Peter M. Sherwood

Name: Peter M. Sherwood  

Title: Manager    

PRIDES CROSSING CAPITAL-A, L.P.

By:  PRIDES CROSSING CAPITAL GP, LLC, its General Partner

By:/s/ Peter M. Sherwood

Name: Peter M. Sherwood  

Title: Manager    

All consents, terms, conditions, amendments, modifications and releases set forth herein are acknowledged and agreed to by Joseph P. Mullaney (“Guarantor”).  Further, the Consent shall not operate as a waiver of any right, power or remedy of any Lender under that certain Guaranty Agreement, dated May 10, 2013 (the “Guaranty”), by Guarantor in favor of the Lenders, nor constitute a waiver, amendment or modification of any provision of the Guaranty, except as specifically set forth herein.  This Consent shall be deemed to be a Loan Document under the Guaranty, and such Guaranty continues to covers, includes and guaranties all Loan Documents as amended and modified herein. 

By: /s/ Joseph P. Mullaney

Name: Joseph P. Mullaney

cc: Mr. Joseph P. Mullaney

 

EXHIBIT A

Form of UCC-3 Financing Statement Amendments

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