Document:

exh10_1.htm

Exhibit 10.1

EXECUTION VERSION

 

MANAGEMENT LOCK-UP AND SUPPORT AGREEMENT

 

THIS AGREEMENT made the 21st day of September, 2012.

 

BETWEEN:

 

Chris Koide, a resident of the Province of British Columbia,

(the “Seller”),

 

AND:

 

LML Acquisition Corp., a corporation existing under the laws of the Province of British Columbia,

 

(the “Acquiror”).

 

WHEREAS the Seller is the legal and beneficial (as defined in Rule 13d-3 under the Securities Exchange act of 1934) owner of such number of shares (“Shares”) of each class of capital stock of LML Payment Systems Inc. (the “Company”) and/or options to acquire Shares (“Options”) of the Company as is indicated on the signature page of this Agreement;

 

AND WHEREAS the Acquiror is contemporaneously herewith entering into an arrangement agreement with the Company (the “Arrangement Agreement”), which provides for, among other things, the Acquiror acquiring all of the outstanding Shares for consideration of $3.45 in cash per Share pursuant to a plan of arrangement under the BCBCA (the “Transaction”) on and subject to the terms and conditions of the Arrangement Agreement;

 

AND WHEREAS this Agreement sets out the terms and conditions of the agreement of the Seller: (i) to vote or cause to be voted the Subject Securities (as defined below) in favour of the Transaction and any other matter that could reasonably be expected to facilitate the Transaction; and (ii) to abide by the restrictions and covenants set forth herein;

 

AND WHEREAS the Acquiror is relying on the covenants, representations and warranties of the Seller set forth in this Agreement in connection with the execution and delivery of the Arrangement Agreement by the Acquiror;

 

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereby covenant and agree as follows:

 

ARTICLE 1

INTERPRETATION

 

 

1.1                      All capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Arrangement Agreement. All references herein to the Arrangement Agreement or any portion thereof refer to the Arrangement Agreement as amended, modified, restated or waived in accordance with the terms of the Arrangement Agreement.

 

 

1.2                      In this Agreement, unless otherwise expressly stated or the context otherwise requires:

 

1

  

 

 

 

	
(a)  

	
references to “herein”, “hereby”, “hereunder”, “hereof” and similar expressions are references to this Agreement and not to any particular Section of this Agreement;

 

	
(b)  

	
references to an “Article”, “Section” or “clause” are references to an Article, Section or clause of this Agreement;

 

	
(c)  

	
words importing the singular shall include the plural and vice versa, and words importing gender shall include the masculine, feminine and neuter genders;

 

	
(d)  

	
the use of headings is for convenience of reference only and shall not affect the construction or interpretation hereof;

 

	
(e)  

	
if the date on which any action is required to be taken hereunder by any of the parties is not a Business Day, such action shall be required to be taken on the next succeeding day that is a Business Day;

 

	
(f)  

	
a period of Business Days is to be computed as beginning on the day following the event that began the period and ending at 4:00 p.m. (Vancouver time) on the last day of the period or at 4:00 p.m. on the next Business Day if the last day of the period does not fall on a Business Day;

 

	
(g)  

	
the terms “material” and “materially” shall, when used in this Agreement, be construed, measured or assessed on the basis of whether the matter would materially affect a party and its affiliates, taken as a whole;

 

	
(h)  

	
references to any legislation or to any provision of any legislation shall include any modification or re-enactment thereof, any legislation provision substituted therefor and all regulations, rules and interpretations issued thereunder or pursuant thereto;

 

	
(i)  

	
references to any agreement or document shall be to such agreement or document (together with the schedules and exhibits attached thereto), as it may have been or may hereafter be amended, modified, restated or waived from time to time; and

 

	
(j)  

	
wherever the term “includes” or “including” is used, it shall be deemed to mean “includes, without limitation” or “including, without limitation”, respectively.

 

1.3                      References to the “knowledge of the Seller” mean the actual knowledge or awareness of, after due inquiry, the Seller, including where the Seller is not an individual the directors and officers of the Seller and/or any other person in an equivalent position with the Seller.

 

ARTICLE 2

AGREEMENT TO VOTE

 

2.1                      Subject to the terms and conditions of this Agreement, the Seller hereby irrevocably and unconditionally covenants and agrees from the date hereof until the earlier of: (i) the Effective Time; and (ii) the termination of this Agreement pursuant to Article 7:

 

 

  

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(a)  

	
to vote or to cause to be voted the Subject Securities (as defined below) at every meeting of the shareholders of the Company called (including the Company Meeting), and at every adjournment or postponement thereof, and on every action or approval by written consent of the shareholders of the Company in favour of the Transaction, including the Arrangement Resolution, and in favour of any other matter to be considered by the Company Securityholders at the Meeting which is reasonably necessary for the consummation of the Arrangement, including in connection with any separate vote of any sub-group of the Company Securityholders that may be required to be taken and of which sub-group the Seller forms a part. The Seller shall also cause the Subject Securities to be counted as present for purposes of establishing a quorum at any such Meeting (including the Company Meeting);

 

	
(b)  

	
not to exercise any rights of a Company Securityholder to dissent pursuant to applicable Law in respect of the Transaction, the Arrangement, the Interim Order, the Final Order or otherwise in connection with the Transaction, in each case as such may be amended or varied at any time prior to the Effective Time;

 

	
(c)  

	
to cause the Subject Securities to be counted as present for purposes of establishing a quorum and (A) to vote, or cause to be voted, the Seller’s Subject Securities against, and (B) to not tender into (if applicable) or otherwise support, in each case, any: (i) Acquisition Proposal, liquidation, dissolution, recapitalization, merger, arrangement, amalgamation, acquisition, strategic alliance, business combination, take-over bid, sale of material assets (or any lease, long-term supply agreement or other arrangement having the same economic effect as a sale), any material issue or sale of treasury shares or rights or interests therein or thereto (other than any treasury shares issued as a result of the exercise of any Options, or similar transactions or series of transactions involving the Company, or a proposal to do any of the foregoing, excluding the Transaction; (ii) amendment of the Company’s articles or by-laws or other proposal or transaction involving the Company which amendment or other proposal (including an Acquisition Proposal) or transaction would in any manner delay, impede, frustrate or prevent the Transaction or any of the transactions reasonably necessary for the consummation of the Arrangement, or change in any manner the voting rights of the Shares or any other securities of the Company; and (iii) action, agreement, transaction or proposal (including an Acquisition Proposal) that might reasonably be regarded as being directed towards or likely to prevent or delay the Company Meeting or the successful completion of the Transaction or of the transactions reasonably necessary for the consummation of the Arrangement, at any meeting of Company Securityholders; and

 

	
(d)  

	
notwithstanding anything herein to the contrary, and provided it does not reduce the cash payment the Seller would receive for the Subject Securities, to support the completion of any pre-arrangement reorganization transaction consummated in an alternative manner (an “Alternative Transaction”) in the same manner as the Seller is obligated to support the Arrangement under this Agreement if the Acquiror concludes, after the date of this Agreement, it is necessary or desirable and, without limiting the generality of the foregoing, if such Alternative Transaction is effected by way of a take-over bid:

 

	
  

	
(i)

	
the Seller shall validly tender or cause to be tendered and cause all acts and things to be done to tender the Seller’s Shares on the terms and conditions set out herein; and

 

	
  

	
(ii)

	
within five Business Days following the mailing of the take-over bid circular of the Company to be sent to Securityholders in connection with the Alternative Transaction, the Seller shall deposit or cause to be deposited (including by instructing the participant in the book based system operated by CDS Clearing and Depository Services Inc. or such other intermediary through which the Seller holds the Subject Securities to arrange for such deposit) all of the Subject Securities in accordance with the provisions of the offer and circular and thereafter the Seller shall not withdraw or permit its Subject Securities to be withdrawn from such offer.

 

 

  

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2.2                      As used in this Agreement, the term “Subject Securities” means the Shares (including Shares issuable pursuant to the exercise of any Option) and any Option or other securities of the Company that are beneficially owned, or in respect of which the voting is, directly or indirectly, controlled or directed by the Seller, as constituted at the date hereof, listed immediately under the Seller’s signature hereto and includes:

 

	
(a)  

	
the Shares listed immediately under the Seller’s signature hereto;

 

	
(b)  

	
all of the Shares and Options that may become beneficially owned, or in respect of which the voting may become, directly or indirectly, controlled or directed by the Seller after the date hereof and prior to the Effective Time, including all of the Shares issued pursuant any convertible security of the Company owned by the Seller or which may otherwise be acquired by the Seller after the date hereof and prior to the Effective Time; and

 

	
(c)  

	
any other voting securities of the Company that may result from a reclassification, conversion, consolidation, subdivision or exchange of, or distribution or dividend on, such shares or capital reorganization of the Company and all other securities exercisable, convertible or exchangeable into any of the foregoing.

 

ARTICLE 3

GRANT OF IRREVOCABLE PROXY

 

3.1                      Seller hereby appoints the Acquiror and each of its executive officers or other designees (the “Proxyholders”), as Seller’s proxy and attorney-in-fact (with full power of substitution and resubstitution), to attend, vote and otherwise act for and on behalf of the Seller in respect of its Subject Securities and in respect of all matters which may come before a meeting of the Company Securityholders relating to the Transaction, and such proxy shall not be revoked unless this Agreement is terminated pursuant to Article 7 prior to the exercise of such proxy (or other voting instrument).  Seller agrees to deliver (including by instructing the participant(s) in the book-based system operated by CDS Clearing and Depository Services Inc. or other intermediary through which the Seller holds the Subject Securities to arrange for such delivery) any such instruments as are required to effect the grant of irrevocable proxy provided for in this Section 3.1.

 

3.2                      Seller hereby revokes any proxies heretofore given by Seller in respect of the Subject Securities.

 

3.3                      Seller hereby affirms that the irrevocable proxy set forth in this Article 3 is given in connection with the performance by the Company of its obligations under the Arrangement Agreement, and that such irrevocable proxy is given to secure the performance of the duties of Seller under this Agreement.  Seller hereby further affirms that the irrevocable proxy is coupled with an interest, is intended to be irrevocable, and may under no circumstances be revoked, unless and until this Agreement is terminated pursuant to Article 7.  The irrevocable proxy granted by Seller herein is a durable power of attorney and shall survive the dissolution, bankruptcy, or incapacity of Seller.

 

3.4                      The Proxyholders may not exercise this irrevocable proxy on any matter except as provided above.  Seller may vote the Subject Securities on all other matters.

 

3.5                      The Acquiror may terminate this proxy at any time by written notice to Seller.

 

 

  

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ARTICLE 4

CERTAIN COVENANTS OF THE SELLER

 

4.1                      The Seller hereby covenants and irrevocably agrees that it shall, from the date hereof until the earlier of: (i) the termination of this Agreement pursuant to Article 7; and (ii) the Effective Time, except in accordance with the provisions of this Agreement:

 

	
(a)  

	
not, directly or indirectly, through any of its affiliates, associates or representatives take any action with respect to an Acquisition Proposal that, if taken by the Company, would violate the terms of the Arrangement Agreement;

 

	
(b)  

	
immediately cease and cause to be terminated all existing discussions and negotiations, if any, with any person or group or any representatives of any person or group conducted before the date of this Agreement with respect to any Acquisition Proposal;

 

	
(c)  

	
immediately notify the Acquiror of any Acquisition Proposal of which the Seller or, to the knowledge of the Seller, any of its representatives becomes, directly or indirectly, aware. Such notification shall be made first orally and then in writing and shall include a description of the material terms and conditions together with a copy of all documentation relating to any such Acquisition Proposal or inquiry in respect of an Acquisition Proposal within the Seller’s possession;

 

	
(d)  

	
not option, sell, transfer, pledge, encumber, grant a security interest in, hypothecate or otherwise convey or enter into any forward sale, repurchase agreement or other monetization transaction with respect to any of the Subject Securities, or any right or interest therein (legal or equitable), to any person or group (other than the Acquiror) or agree to do any of the foregoing;

 

	
(e)  

	
Seller will not commit any act that could restrict or affect Seller’s legal power, authority, and right to vote all of the Shares then owned of record or beneficially by Seller or otherwise prevent or disable Seller from performing any of its obligations under this Agreement.  Without limiting the generality of the foregoing, except for this Agreement and as otherwise permitted by this Agreement, Seller shall not enter into any voting agreement with any person or entity with respect to any of the Subject Securities, grant or agree to grant any person or entity any proxy (revocable or irrevocable) or power of attorney or other right with respect to any of the Subject Securities, deposit any of the Subject Securities in a voting trust, or otherwise enter into any voting agreement, voting trust, vote pooling or other agreement or arrangement with respect to the right to vote, call meetings of Company Securityholders or give consents or approvals of any kind with respect to any of the Subject Securities;

 

	
(f)  

	
not requisition or join in any requisition of any meeting of Company Securityholders without the prior written consent of the Acquiror, or vote or cause to be voted any of the Subject Securities in respect of any proposed action by the Company or its Shareholders or affiliates or any other person or group in a manner which might reasonably be regarded as likely to prevent or delay the successful completion of the Transaction or the other transactions contemplated by the Arrangement Agreement and this Agreement or have a Material Adverse Effect;

 

	
(g)  

	
not do indirectly that which it may not do directly by the terms of this Article 4 or take any other action of any kind, directly or indirectly, which might reasonably be regarded as likely to reduce the success of, or delay or interfere with the completion of, the Transaction and the other transactions contemplated by the Arrangement Agreement and this Agreement; and

 

 

  

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(h)  

	
if Seller is the beneficial owner, but not the record holder, of the Subject Securities, take all actions necessary to cause the record holder and any nominees to vote all of the Subject Securities in accordance with this Agreement.

 

4.2                      Notwithstanding Section 4.1, if the Seller is a director and/or officer of the Company, the Seller shall be entitled to exercise his fiduciary duties to the Company in his capacity as director or officer and not be in breach of this Agreement, it being acknowledged that compliance with the provisions set out in Section 4.3 of the Arrangement Agreement shall not be construed to result in a breach of this Agreement.  For certainty, any such exercise of fiduciary duties by the Seller shall not in any way diminish the Seller’s obligations in his capacity as a Shareholder under this Agreement.

 

4.3                      If a Superior Proposal is made, the Seller hereby agrees that it shall continue to support the Arrangement (or, if applicable, any Alternative Transaction) and comply with its obligations hereunder, including not withdrawing or revoking the proxy or power of attorney referred to in Article 3 in respect of the Subject Securities, unless and until this Agreement is terminated in accordance with its terms.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

5.1                      The Seller represents, warrants and, where applicable, covenants to the Acquiror as follows and acknowledges that the Acquiror is relying upon these representations, warranties and covenants in connection with the entering into of this Agreement and the Arrangement Agreement:

 

	
(a)  

	
if the Seller is a corporate body, the Seller has been duly formed and is validly existing under the laws of its jurisdiction of incorporation and has all necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder;

 

	
(b)  

	
the execution and delivery of this Agreement by the Seller and the performance by the Seller of its obligations hereunder have been duly authorized and no other proceedings on its part are necessary to authorize this Agreement and the performance of the Seller’s obligations hereunder;

 

	
(c)  

	
this Agreement has been duly executed and delivered by the Seller and, assuming the due authorization, execution and delivery by the Acquiror, constitutes a legal, valid and binding obligation, enforceable by the Acquiror against the Seller in accordance with its provisions, subject to bankruptcy, insolvency and other applicable Laws affecting creditor’s rights generally and general principles of equity;

 

	
(d)  

	
(i) the Seller is the beneficial owner of, or controls or directs the voting rights in respect of, the Subject Securities free and clear of any and all Liens; and (ii) the only Shares, Options or other securities of the Company beneficially owned, or over which control or direction is exercised by the Seller are those listed immediately under the Seller’s name on the signature pages hereto;

 

	
(e)  

	
the Seller has the sole right to vote all the Subject Securities and all such Subject Securities shall, immediately prior to the Effective Time, be beneficially owned solely by the Seller with good and marketable title thereto, free and clear of any and all Liens;

 

 

  

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(f)  

	
no individual or entity has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option, for the purchase, acquisition or transfer from the Seller of any of the Subject Securities or any interest therein or right thereto, including any right to vote, except the Acquiror pursuant to this Agreement;

 

	
(g)  

	
none of the execution and delivery by the Seller of this Agreement or the completion or performance of the transactions contemplated hereby or the compliance with the obligations hereunder by the Seller will result in a breach of: (i) the constating documents of the Seller, if applicable; (ii) any agreement or instrument to which the Seller is a party or by which the Seller or any of the Seller’s property or assets is bound; or (iii) any judgment, decree, order or award of any Governmental Authority with respect to the Seller, except, in the case of (ii) and (iii), such breaches which could not, individually or in the aggregate, impair the ability of the Seller to perform its obligations under this Agreement or otherwise delay the Seller in performing such obligations; and

 

	
(h)  

	
there are no legal proceedings in progress or pending before any Governmental Entity, or, to the knowledge of the Seller, threatened, against the Seller or the Seller’s affiliates that would adversely affect in any manner the Seller’s ability to enter into this Agreement and to perform its obligations hereunder.

 

The representations and warranties of the Seller set forth in this Article 5 shall, if the Seller is a director and/or officer of the Company, survive the Effective Date and shall continue thereafter in full force and effect for the benefit of the Acquiror without limitation as to time or, if the Seller is not a director and/or officer of the Company, expire and be terminated and extinguished on the earliest to occur of the Effective Time and the termination of this Agreement in accordance with Article 7.

 

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR

 

6.1                      The Acquiror represents, warrants and, where applicable, covenants to the Seller as follows and acknowledges that the Seller is relying upon these representations, warranties and covenants in connection with the entering into of this Agreement:

 

	
(a)  

	
the Acquiror has been duly formed and is validly existing under the laws of its jurisdiction of incorporation and has the requisite corporate power and authority to conduct its business as it is now being conducted and to execute and deliver this Agreement and to perform its obligations hereunder;

 

	
(b)  

	
the execution and delivery of this Agreement by the Acquiror and the performance by it of its obligations hereunder have been duly authorized by its respective board of directors and no other corporate proceedings on its part are necessary to authorize this Agreement and the performance of its obligations hereunder;

 

	
(c)  

	
this Agreement has been duly executed and delivered by the Acquiror and, assuming the due authorization, execution and delivery by the Seller, constitutes a legal, valid and binding obligation, enforceable by the Seller against the Acquiror in accordance with its terms, subject to bankruptcy, insolvency and other applicable Laws affecting creditor’s rights generally and general principles of equity;

 

 

  

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(d)  

	
none of the execution and delivery by the Acquiror of this Agreement or the completion or performance of the transactions contemplated hereby or the compliance with the obligations hereunder by the Acquiror will result in a breach of: (i) the constating documents of the Acquiror; (ii) any agreement or instrument to which the Acquiror is a party or by which the Acquiror or any of the Acquiror's property or assets is bound; or (iii) any judgment, decree, order or award of any Governmental Authority with respect to the Acquiror, except, in the case of (ii) and (iii), such breaches which could not, individually or in the aggregate, impair the ability of the Acquiror to perform its obligations under this Agreement or otherwise delay the Acquiror in performing such obligations; and

 

	
(e)  

	
the Acquiror has sufficient funds or has made adequate arrangements to have financing in place in order to distribute to all the Securityholders the cash consideration to which they are entitled upon consummation of the Transaction.

 

The representations and warranties of the Acquiror set forth in this Article 6 shall survive the Effective Date and shall continue thereafter in full force and effect for the benefit of the Seller until the earliest to occur of the Effective Time and the termination of this Agreement in accordance with Article 7.

 

ARTICLE 7

TERMINATION

 

7.1                      This Agreement may be terminated by the Acquiror in its sole discretion at any time prior to the Effective Date by notice in writing to the Seller, provided that at the time of such termination the Acquiror is not in material default of its obligations under this Agreement.

 

7.2                      This Agreement may be terminated by the Seller by notice in writing to the Acquiror if:

 

	
(a)  

	
the Acquiror has not complied in all material respects with its covenants and agreements to and with the Seller contained herein;

 

	
(b)  

	
any of the representations and warranties of the Acquiror contained herein is untrue or inaccurate in any material respect; or

 

	
(c)  

	
the Arrangement Agreement is terminated for any reason.

 

provided that at the time of such termination the Seller is not in material default of its obligations under this Agreement.

 

7.3                      This Agreement shall automatically terminate at the Effective Time.

 

7.4                      This Agreement may be terminated at any time upon the mutual written agreement of the Seller and the Acquiror.

 

7.5                      In the case of any termination of this Agreement pursuant to Section 7.1, 7.2, 7.3 or 7.4, this Agreement shall terminate and be of no further force or effect.  Notwithstanding anything else contained herein, such termination shall not relieve any party from liability for any breach of its obligations or non-compliance with the terms and conditions of this Agreement by the party prior to such termination.

 

ARTICLE 8

DISCLOSURE

 

8.1                      Except as required by applicable Laws or by any Governmental Authority or in accordance with the requirements of any stock exchange, the Seller shall not make any public announcement or statement with respect to this Agreement without the approval of the Acquiror. A copy of this Agreement may be provided to the directors of the Company.

 

 

  

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ARTICLE 9

GENERAL

 

9.1                      This Agreement shall become effective as among the Acquiror and the Seller concurrently upon execution and delivery of the Arrangement Agreement by the Company and the Acquiror and execution and delivery hereof by the Acquiror and the Seller.

 

9.2                      Each of the Seller and the Acquiror shall, from time to time, promptly execute and deliver all such further documents and instruments and do all such acts and things as the other party may reasonably require to effectively carry out the intent of this Agreement.

 

9.3                      This Agreement shall not be assignable by any party without the prior written consent of the other party, except that the Acquiror may assign this Agreement to an affiliate without the consent of the Seller. This Agreement shall be binding upon and shall enure to the benefit of and be enforceable by each of the parties hereto and their respective successors and permitted assigns.

 

9.4                      Time shall be of the essence of this Agreement.

 

9.5                      Any notice or other communication required or permitted to be given hereunder shall be sufficiently given if in writing, delivered or sent by telecopier or facsimile transmission:

 

	
(a)  

	
in the case of the Seller, at the telecopier or facsimile number or address set out immediately under the Seller's name on the signatures page hereto:

 

	
(b)  

	
in the case of the Acquiror:

 

Digital River, Inc.

10380 Bren Road W

Minnetonka, MN 55343

Fax:  (952) 674-4333

Attention:  Kevin L. Crudden, Esq.

With a copy (not constituting notice) to:

Fredrikson & Byron, P.A.

200 South Sixth Street, Suite 4000

Minneapolis, MN 55402

Fax: (612) 492-7077

Attention: Ryan G. Miest, Esq.

and with a separate copy to (which shall not constitute notice):

Borden Ladner Gervais LLP

1200 Waterfront Centre

200 Burrard Street, P.O. Box 48600

Vancouver, British Columbia V7X IT2

Fax: (604) 622-5861

Attention: Nigel P. Cave

 

 

  

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or

 

	
(c)  

	
at such other address as the party to which such notice or other communication is to be given has last notified the party giving the same in the manner provided in this Section 9.6 and if so given shall be deemed to have been received on the date of such delivery or sending (or, if such day is not a Business Day, on the next following Business Day).

 

9.6                      This Agreement and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein.

 

9.7                      Each of the parties hereto agrees with the others that: (i) money damages would not be a sufficient remedy for any breach of this Agreement by any of the parties; (ii) in addition to any other remedies at law or in equity that a party may have, such party shall be entitled to seek equitable relief, including injunction and specific performance, in addition to any other remedies available to the party, in the event of any breach of the provisions of this Agreement; and (iii) any party that is a defendant or respondent shall waive any requirement for the securing or posting of any bond in connection with such remedy. Each of the parties hereby consents to any preliminary applications for such relief to any court of competent jurisdiction. The prevailing party shall be reimbursed for all costs and expenses, including reasonable legal fees, incurred in enforcing the other party’s obligations hereunder. Such remedies shall not be deemed to be exclusive remedies for the breach of this Agreement but shall be in addition to all other remedies at law or in equity.

 

9.8                      If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not irremediably affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled according to their original tenor to the extent possible.

 

9.9                      This Agreement constitutes the entire agreement and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof.

 

9.10                      This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce more than one counterpart.

 

  

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IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

 

	  	  	  	
LML Acquisition Corp.

	  	  	  	  
	  	  	  	  
	  	  	
By:

	
/s/ Stefan Schulz

	  	  	
Name:

	
Stefan Schulz

	  	  	
Title:

	
Chief Financial Officer

 

Irrevocably accepted and agreed to this ____ day of September, 2012.

	
SIGNED, SEALED & DELIVERED

	
)

	  
	
in the presence of:

	
)

	  
	  	
)

	  
	
s/ Rick Bird

	
)

	
/s/ Chris Koide

	
Witness

	
)

	
Name: Chris Koide

	  	
)

	
Address: 302 – 2659 Douglas Street,

	  	
)

	
Vancouver, British Columbia

	  	
)

	
Fax Number: (604) 689-4413

	  	
)

	  
	  	
)

	
Shares: 87,767  Options: 510,000

 

[Signature Page to Management Lock-Up and Support Agreement]posama3ex10xliv_keyuan.htm

Exhibit 10.44

 

Working Capital Loan Agreement

Huaxia Bank Inc

  

  

  

Working Capital Loan Agreement

 

No. NB071011110144/145

Borrower (Party A): Ningbo Keyuan Plastic Co., Ltd

Address: Ningbo Beilun Qingzhi Industrial Zone

Postal code: 315800                   Legal representative:

Te;: 86232717                         Fax: 86234706

Opening bank: Bank of China, Beilun Branch Account number: 810735036108091001

Lender (Party B): Huaxia Bank Co., Ltd. Ningbo Branch

Address: No. 787, Baizhang East Road

Postal code: 315040

Legal Representative (Principal):

Phone: 87972545                               Fax: 87972608

Based on the principles of fairness, Party A and Party B enter into this Contract after negotiation in accordance with the Contract Law, General Rules of Loan and relevant laws and regulations.

Article 1 Type of Loan

1.1   The loan under this contract is working capital loan.

Article 2 Currency and Amount

2.1   The currency under this contract is √RMB □ USD □Others / .

2.2   The amount of the loan under this Contract is (Spell-Out): RMB Eighty Million.

Article 3 Purpose of Loan

The loan under this contract should be only used under the articles of Working Capital Loan Withdrawal Application; Party A shall not change the purpose of the loan hereunder without the written consent of Party B.

  

2

  

 

Article 4 Term of Loan

 

4.1   The term of the loan hereunder is one year (Day/month/year), from Sept. 13th, 2011 to Sept. 13th, 2012.

4.2   Party A shall withdraw the loan under this contract according to the types as follows:

√Party A shall withdraw the loan in on the day of Sept. 13th, 2011 . Party A shall in advance file an application with Party B ahead of three working days, and the loan shall is available only after the application is approved by Party B.

□Party A shall withdraw the loan on the period as below:

Party A shall withdraw the loan during the period from the date when the contract is signed to ______/___. Party A shall in advance file an application with Party B ahead of / working days each time, and the loan shall is available only after the application is approved by Party B.

Once Party A wants to withdraw the loan, all the terms and conditions in Article Six should be satisfied firstly, or else, Party B is under no obligation to provide any kind of loans.

4.3   Party A can repay principal following the types as below:

□ Repay the principal in one time on the day of _____ ______________.

√ Adopt Installment repayment following the sequence, time and amount.

August 13, 2012 , Amount (Spell-Out)     Forty Million

September 13, 2012 , Amount (Spell-Out)     Forty Million

____/___Year___/____month____/___Day, Amount (Spell-Out) ___________/_____________

____/___Year___/____month____/___Day, Amount (Spell-Out) ___________/_____________

____/___Year__/_____month____/___Day, Amount (Spell-Out) ___________/_____________

____/___Year____/___month___/____Day, Amount (Spell-Out) ___________/_____________

□ Repay the loan according to the maturity date written by Party B in Working Capital Loan Withdrawal Application, and all the maturity dates of withdrawing should not be later than the date of ___________/_____________.

4.4   If the withdrawal and maturity date written in the loan collection certificate is inconsistent with the in the appointed date or the date stated on the Application, the date on the loan collection certificate under this contract shall prevail. The accessories including the Application, loan collection certificate and other files already identified by both sides consists of an inseparable part of the contract, and have the same validity with this contract.

 

  

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Article 5 Interest Rate

5.1   The interest of loan in calculated in according with such the agreement as below:

√The interest rate of the Contract is calculated at 6.56 % (annual rate). After the contract is signed and before the loan is given out, if the People's Bank of China adjusts the benchmark lending rates, the interest rate shall be conducted subject to the floating proportion written in Article 5.5.

□ The interest rate will be adjusted every ___/___months, and the interest rate from the date of withdrawing loan to the first date of interest rate settlement is / % (annual rate).

□ The floating interest rate is composed of _/_____months’ ___/___(LIBOR/HIBOR) plus ___/___% rep-resents, and floating every ___/___months. (LiBOR, an acronym for the London Interbank Offered Rate, is the interest rate at which large international banks are willing to lend each other money on a short-term basis. It's calculated every business day in 10 currencies and 15 terms, ranging from overnight to one year. HIBOR, an interest rate stated in Hong Kong dollars on the lending and borrowing between banks in the Hong Kong interbank market. The terms of the deposits vary from overnight to one year. The HIBOR is a reference rate for lenders and borrowers that participate directly or indirectly in the Asian economy. )

□ Others

________________/_____________________________________________________________

_____________________________________________________________________________

 

5.2   The interest date shall be executed with the start of withdrawal date, and the calculation formula is: Interest rate = the loan balance × the days of interest date × annual rate/360(day).

5.3   One kind of the interest settlement types shall be chosen as below:

□ Interest settlement monthly, the interest payment date is 20th every month, and the last interest payment date is the maturity rate the contract.

√ Interest settlement quarterly, the interest payment date is 20th every quarter, and the last interest payment date is the maturity rate the contract.

□ Interest settlement follows the settlement of principal, and interest will be paid off at the same

date as the principal in one time.

□___________/_______________________________________________________________

5.4   After the loan is given out, in case the People’s Bank of China adjusts the interest rate and calculation method, the interest rate shall be conducted according to the types as below:

□ The interest rate is unchangeable.

□ The interest rate shall be conducted subject to the adjustment of the benchmark interest rate of the corresponding grade of the People’s Bank of China.

 

  

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□ For the monthly interest settlement, the interest rate shall be conducted monthly, and the adjusted interest rate will be effective from the second day of the first interest settlement date.

√For the quarterly interest settlement, the interest rate shall be conducted seasonally, and the adjusted interest rate will be effective from the second day of the first interest settlement date.

□ The interest rate is adjusted annually.

□

_______/____________________________________________________________________

5.5    Following the articles of 5.1 and 5.4, the adjusted interest rate will float upwards___/_____/downwards___10%_______, according to the benchmark interest rate of the corresponding grade of the People’s Bank of China.

5.6    If there is a change in the interest rate under this contract, the penalty for interest rate will be changed to some extent and will be effective at the same time, and by virtue of sectional method.

5.7    Based on the above principles, Party B can adjust the interest rate without the necessary agreement of Party A.

Article 6 Items and conditions of withdrawal

6.1    When party A withdraws the loan, these items should be in advance satisfied as below:

6.1.1  Complying with the current laws and regulations, Party A should finish the related procedures, including the administrative permission, approval, registration and so on.

6.1.2  Part y A has submitted the related files that have already met the requirements.

6.1.3  The Certificate of guarantee should be finished in advance and all the relevant procedures are already in effect, and also the mortgage right and the pledge.

6.1.4  Party A doesn’t break the any agreement under this contract.

6.1.5  On the moment of withdrawing, the claims and guarantee of Party A are to be real, punctual and effective.

6.1.6  On the moment of withdrawing, Party A should guarantee the inconsistence between the real running, financing conditions and the written contents in the contract.

6.2    After Party A has fulfilled the above items and conditions, Party B will deal with the withdrawal procedures and sign the loan certificate. The loan certificate has the same legal effect with the contract and is an indispensable party of the contract

 

  

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6.3   When Party A can’t satisfy the items and conditions of withdrawal, Party B has a privilege of

partly fulfilling the contract.

Article 7 grants and payments of loan

7.1   The grants and payments of loan are conducted as below:

□ Party A pays independently

√ Party B pays as fiduciary party

□ The payment amounts is less than __/_____RMB (or the equal foreign currency) , the payment will be handled by Party A; while the payment amounts exceed ___/____RMB (or the equal foreign currency), the payment will be handled by Party B; if the payment object is specified but the amounts is indefinite, the payment will be handled by Party A directly.

7.2   Payment handled by Party A independently, the officially sealed Working Capital Loan Withdrawal Application Party A should be certified firstly, and then, the loan will be transferred to account of Party A who will finally handle the independent payment, where the transact object has an appointed use.

7.3   Payment handled by Party B, based on the appointed use of the loan, Party B will verify whether the listed object and the paid amounts provided by Party A are consistent with the commercial contract. After being approved, in accordance with the officially sealed Working Capital Loan Withdrawal Application, Party B will offer loans to Party A and pay the appointed use outwardly for part y A’s transaction object.

7.4   Payment handled by Party A independently; Party A should sum up the payment records every_/___months, and party B has the right to investigate and analyze the account, certificate and the spot.

7.5   Payment handled by Party B as fiduciary party, Party A should provide the related information and usage of transaction counterpart, and Party B will bear little responsibility due to lack of truth, punctuality, integrity of the transaction counterpart provided by Party A.

7.6   The loan shouldn’t be offered to the agency company of Party A in the capital market or the associated company of Party A but without the accordant use of loan.

Article 8 Capital Supervision after Granting Loan

8.1   Party A should open a single capital withdrawal account in Party B (Account: _______________/___________), or provides a capital withdrawal account opened in other banks (Account: 810735036108091001), and deposit the withdrawal capital to the account by not lower the proportion of _____5___%. If the capital withdrawal account is opened in other banks, Party A should provide the invoice to Party B every__3__months.

 

  

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Article 9 Repayment

9.1   Party A repays the principal and interest of the loan hereunder with the capital from the sources, including but not limited to Operation Revenue. In case of any provision on the capital source of Party A’s repayment as specified in any other contracts in which Party A is one party, the provision shall not affect the fulfillment of repayment obligation under the contract. Party A, in any case, shall not invoke the appointed items to refuse the fulfillment of repayment obligation.

9.2   Party A shall deposit sufficient funds for repayment of the principal and interest due in the account opened with Party B prior to the interest settlement date or principal repayment date, and authorize Party B to deduct money from the account on such date. If confronting with the in legal holiday, the repayment date can be postponed to next working day.

9.3   Party B has the rights to deduct money from the account on such date if Party A doesn’t repay the loan timely. If the currency is not consistent with the required one, the currency will be converted according to the exchange price quotation.

9.4   The payment contents are listed in order hereunder: the cost used to realize the claim and guarantee title, the bill for the damage, the breaches and compound interest, overdue interests, and penalty interest, interest and principal etc.., and Party B has a right to change the order.

9.5    If Party A wants to repay the loan, he should present an application in written form, after Party B approves it, the repayment will be conducted as below:

√ Party B charges for the interest according to the loan interest rate appointed in the contract and

the real days

□ Except for the interest according to the loan interest rate appointed in the contract and the real days, Party B charges for the compensation money according to a proportion of ___/___% and with a top limit that is calculated by the amounts of repayment in advance × loan interest rate in the contract /360×days in advance.

Article 10 Loan Guarantee

10.1  One item or several items of the loan guarantee can be adopted as below:

□ The guarantor___________/____________signs the Guarantee Contract with Party B.

□ The mortgagor_______________/________signs the Mortgage Contract with Party B.

□ The pledgor _______________/________signs the Pledge Contract with Party B.

□ ________________________/________________________________________________

 

  

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10.2  If the claim in this contract belongs to the claims of the maximize guarantee, one item or several items of the pledges can be adopted as below:

√ the guarantor_ Ningbo Litong Petrochemical Co., Ltd _signs the Guarantee Contract of the maximize guarantee with Party B.

□ the mortgagor_________/______________signs the Guarantee Contract of the Top Amount

with Party B.

□ the pledger______________/_________signs the Pledge Contract of the Cop Amount with

Party B.

√The guarantor Tao Chunfeng signs the Personal Guarantee Contract of the maximize guarantee with Party B.

Article 11 Rights and Obligations of Party A

11.1  Party A shall guarantee the legality of his company and the validity of survival, and has the right to deal with the assets, the related business with the loan, the sign and fulfillment of this contract.

11.2  Party A shall obtain the approval and authorization from its superior departments or the board of directors.

11.3  Party A shall guarantee the sign and fulfillment of the contract without violating other asset regulations and appointments, the pledge agreement signed with other companies and other documents that are binding upon both parties.

11.4  Party A shall be responsible for the truth, accuracy and integrity of the materials provided during the examination of the loan.

11.5  During the survival of the loan agreement, the asset-liability ratio of Party A shall not exceed 95% .

11.6  Party A shall withdraw and use the loan in accordance with the term and purpose as specified in the contract.

11.7  Party A shall open the bank settlement account assigned by Party B, and accept voluntarily Party B’s investigation and supervision.

11.8  Party A shall use the loan in accordance with the term and purpose as specified in the contract, but not be used for purposes of illegal production and running.

 

  

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11.9    Party A shall not embezzle the working capital for other usage, and actively cooperate with Party B in supervision and investigation over its production, operation and management and so on, and provide the information but not limited to the documents as below:

11.9.1 Business license, annual proof, legal person code certificate, necessary proofs of identity and personal information of the legal person, the board members, the responsible persons in charge of finance, business license, tax authorities annual examination of the tax registration certificate, annual tax certificate proofs, a copy of related loan certificate (card) required by Party

11.9.2 All opening Banks and account, and the deposits and loans

11.9.3 Annual audited balance sheet, income statement, equity changes of shareholders, sales, the cash flow sheet, the financial statements and notes.

11.9.4 Production and operation plans, statistical reports.

11.9.5 All external (including any institution of Party B) security situation.

11.9.6 All associated companies and related information, and the related transactions that have taken place or is about to occur exceed more than ten percent of its net assets as well as the internal mutual guarantees Group.

11.9.7 In case of litigation, arbitration, administrative penalties, and other disputes such as the debts and personal criminal prosecution.

11.9.8 Using records and information about loans under this contract.

11.10  Repay the loan according to appointed items in this contract

11.11  Party A shall notify Party B in writing ahead of thirty days before the related aspects changes, including but not limited to the office investment, substantial increase in debt financing, contracting, leasing, trust, asset restructuring, debt restructuring, equity restructuring, equity transfer, joint venture, merger (the merger), division, joint venture (cooperative), reducing registered capital or application business for rectification, application for dissolution (or revocation), the application re-engineering, reconciliation and bankruptcy and other operations, its own institutions and legal status, written notice to Party B, and implement responsibility for debt repayment under this contract, or provide a new guarantee in writing, or else, Party A shall not carry out any activities before paying off all the loan.

11.12  Party A shall notify Party B in writing ahead of thirty days before the related aspects changes, including but not limited to suspend business for rectification, and is declared closed, is dissolved (withdrawal), is asked to reorganize, bankruptcy, and changes in legal status and to take adequate and effective steps to preserve Party B’s claims.

 

  

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11.13  Party A shall notify Party B in writing within three days after the running or the claims security turn into serious situations, as well as adopt take adequate and effective steps to preserve Party B’s claims.

11.14  Party A shall notify Party B in writing within seven days after such changes happen, including residence, name, legal representative or other senior management members.

11.15  Party B shall not sell certain assets, pay off other debts in advance, and be guarantor for third-party debt without Party B agrees before paying off the loan principal and interest.

11.16  Party A shall not sign contract with any third party that may damage Party B under this contract rights.

11.17  In the case of guarantee, if the guarantor violates any kind of the warranty service or commitment, or lose guarantee capabilities, Party A should provide Party B immediately with new guarantor or prepay the loan in advance.

Article 12 Rights and Obligations of Party B

12.1    Has the right to require Party A to provide all the relevant materials.

12.2    Has the right to supervise, examine the using of loan, know more about the running activities, financing, guarantee and deputes and so on.

12.3    Has the right to ask Party A to open a bank account in an assigned bank, and supervise the account according to the articles under this contract.

12.4    Has the right to participate the large party financing, asset sales and mergers, division, joint-stock reform, bankruptcy and liquidation activities, maintaining the party claims without violating the laws, regulations and regulatory requirements.

12.5    During the process of loan payment, if there is a declined credit, a low business profitability, not in accordance with the agreed purpose or use of loan funds, or borrow funds to pay as agreed, Party B has the right to adjust the loan payment terms and payment methods, or to suspend the issuance and payment of loan funds, meanwhile claim that it will call in the all the released principal and interest and other measures immediately.

12.6    If Party A withdraws all loan funds ahead of the maturity date, Party B has the right to call in the loan ahead of time.

12.7    Party B shall grant loans to the full schedule, if Party A fulfills its obligations completely and meet the withdrawal conditions under this contract.

 

  

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12.8    Keep confidential the materials provided by Party A concerned information of liabilities, finance, production, operation, etc., unless otherwise required by the Contract and laws and regulations.

12.9    Notify Party A timely when Party B changes his residency and promulgate an announcement publicly.

Article 13 Liabilities of Breach

13.1    Both Parties hereto shall fulfill the obligations as specified in the Contract after the Contract takes into effect. Any party who fails to fulfill the obligations hereunder shall bear the liabilities of breach of contract.

13.2    Should Party A fail to provide the guarantor or the guaranteed documents or go through the withdrawal documents within thirty days (including legal holidays and weekends), Party B has the right to remove the contract or call in the released loan.

13.3    Should Party A fail to repay the principal under the Contract on time, Party B has the right to request for repayment within a specified time. Party B has the right to collect an additional 50% penalty interest to overdue loan. Should Party A fail to repay the interest under the Contract on time, Party B has the right to collect the compound interest, in case of the maturity date, Party B shall collect the compound interest according to penalty interest stated on this contract.

13.4    Should Party A fail to use the loan for the purpose as stipulated in the Contract, Party B is entitled to collect the principal and interest according to penalty interest at a rate 100%.

13.5    Should Party A fail to repay the loan under the Contract on time or use the loan for the purpose as stipulated in the Contract, Party B shall collect the overdue interest, penalty interest and compound interest.

13.6    Due to breach of Party A that results in litigation, Party A should bear the costs for this payment, arbitration fees, security fees, advertising fees, assessment fees, appraisal fees, auction fees, travel expenses, legal fees and the cost of achieving the other claims.

13.7    In case Party A is involved in one of the following situations, Party B shall have the right to reclaim part of or all loan in advance and cease to grant loan, and adopt the relevant measures.

13.7.1 Should Party A fail to use the loan for the purpose as stipulated in the Contract, or fail to pay for the principal, interest and other payables on time.

13.7.2 Should Party A fail to pay for the loan according to the agreed types.

13.7.3 Party A exceeds agreed financial index.

 

  

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13.7.4   Party A fails to use the loan funds for the purpose as stipulated in the Contract.

 

13.7.5   Party A breaks up the whole into parts in order to avoid the payment by Party B.

13.7.6   Party A provides Party B with false reports or conceals important facts in the financial statements and other business information.

13.7.7   Party A refuses to accept the monitoring and inspection in the aspects of the loan funds and the relevant production, management, financial activities.

13.7.8   Party A use the loans for equity investment

13.7.9   Party A uses the loans for the purpose of speculation in securities, futures, real estate, etc., or engages in other illegal business, illegal transactions.

13.7.10 Party A takes advantages of the loans for lending in order to obtain illegal revenues

13.7.11 Party A defraud the Party A for loans by means of fraud.

13.7.12 Party A cheats the capital by means of providing false contract with the associated parties without the actual trade notes receivable, accounts receivable and other claims.

13.7.13 Through related party transactions, Party A avoids the claims of bank debts.

13.7.14 As a party in violation of other contracts (including this contract, Party B) or agreement, Party A constitutes a serious breach.

13.7.15 If the Party A changes the mode of operation, its own system, insolvency or legal status, without the written consent and the implementation of the repayment of debt of Party B, or the new guarantor provided by Party A, including but not limited to foreign investment, substantial increase in debt financing, contract, trust, asset restructuring, debt restructuring, equity transfer, joint-stock reform, joint venture, merger (the merger), acquisition, division, paid transfer of property rights, joint venture (cooperative), to reduce the registered capital or application business for rectification, application for dissolution (or revocation), the application re-engineering, reconciliation and bankruptcy.

13.7.16 The change of the guarantee under the contract is not conducive to Party B’s claims, including but not limited to collateral, collateral damage, loss, reduction in the value or that Party A fail to provide the new guarantor timely when the old guarantor breaches its obligations established by the contract.

13.7.17 The guarantee contract is not in effect, or the guarantor loses the ability or fail to perform guarantee duties by way of violating promise and or refuse to bear responsibilities, thus Party A fails to provide the new guarantor.

 

  

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13.7.18 The statements, representations and warranties made by Party A is not real, inaccurate or concealed material.

13.7.19 Party A does not fulfill the contract obligations specifically.

13.7.20 During the period of loans, the debt ratio of Party A exceeds 95% .

13.7.21 Party violates any other contract obligations and commitments which affect the achievement of Party B’s claim.

13.7.22 Party A’s description of the statements or materials in the application or attached accessories are untrue or violates the commitments in the withdrawal application.

13.8       If it has been seven working days from the date after Party A has reached all the conditions for withdrawal but can’t obtain loans, Party A is entitled to receive a penalty, according to the actual number of days overdue under penalty interest articles 13.3.

Article 14 Effectiveness

14.1       The contract shall come into effect after the execution of both parties hereto.

Article 15 Transfer, change and Termination

15.1       A contract takes effect, Party B under this contract in whole or in part of the debt to a third party, without the consent of Party A agrees.

15.2       The contract takes effect, Party A under this contract all or part of the debt to a third party, shall be submitted in advance to the B button to take the Guarantor agree to transfer obligations bear any written documents or provide new guarantees, and by B written consent.

15.3       This contract takes effect, A, B shall not alter any of the parties. For a change, A, B and both parties have reached an agreement in writing to change.

15.4       If Party A requires the loan extension of the contract hereunder, with Party B’s investigation and agreement, extension agreement can be signed. If Party B do not agree with loan extension Party A should still fulfill its repayment obligations in accordance with the contract.

15.5       During the contract performance period, when one of the following cases occurs, Party B is entitled to terminate the contract, withdraw the granted loan and interests in advance and stop the continual lending:

15.5.1    Party A’s operation and financial position deteriorates and unable to pay due debts, or involves in major economic litigation or arbitration and other legal correction, which severely affects and threats Party B’s fulfillment of obligatory right;

 

  

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15.5.2   The overall customer credit status, operation situation and financial condition of the Group Party A belongs to arise severe crisis, which raises serious imperil to Party B’s loan safety;

15.5.3   Party A is closed, dismissed, stopped, with the business license being revoked, cancelled and so forth;

15.5.4   Any other situations that will treat or severely affect Party B’s fulfillment of obligatory right under this contract.

Article 16 Settlements of disputes

16.1       If there is a dispute between the parties took place due to all disputes should be resolved through consultation; consultation fails, the parties choose the following ways:

√Sue to the people's court.

□ Ask for ____/______ from arbitration committee for arbitration.

Article 17 Supplementary Provisions

17.1       If both parties have signed _________/________according to the Maximum Amount of Financing Contract, this contract shall be the maximum amount of financing under the contract the specific business contract.

17.2       The Contract, Party A corporate name, magic representative, shelter and other changes without written notice to Party B, Party B according to the information contained in the contract sent to Party all instruments, beginning with the service.

17.3       Party A shall assume the contract and its registration under the contract of guarantee, insurance, notary, appraisal, assessment, transportation and all other related costs. Payment by Party B, Party B has the right to deduct from the party account directly.

17.4       contract changes to meet after the main laws and regulations, judicial interpretations of the regulations made changes to the contract, the other should be with. Otherwise, do not stop issuing loans.

17.5       The two sides agreed to other matters.

_______________________/_______________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

 

17.6       This contract adopt □option, denotes the agreed article, while ×denotes unfitness here.

 

  

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17.7       Copies of the contract: Party A of one copy, Party B of two copies and / Party of /

copy, shares the same legal effect.

17.8       The accessories under the contract have the same legal effect with the contract

17.9       Party B has taken reasonable means to draw attention to the West under the contract exclusion or limitation of liability provisions Party, according to owner required a full explanation of the conditions, both parties all the terms of this contract, understanding does not exist objection.

Attachment: Application for withdrawing working capital loans.

Sign in this page (without the text)

Party A: Ningbo Keyuan Plastic Co., Ltd. (Seal)

Legal representative (or agency): Signed name:

Sept. 13 2011

Party B Huaxia Bank Inc. Ningbo Branch (Seal)

Legal representative (or agency): Signed name:

Sept. 13 2011

 

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