Common use of Breach of the Contract Clause in Contracts

Breach of the Contract. 10.1 The borrower breaches the contract in one of the following situations: (1) The borrower pays back the principal and interest of the loan and other payables in the contract not in according with the agreement, or fails to fulfill any other obligation in the contract, or breaks the representations, guaranty or commitments in the contract; (2) The borrower fails to separately offer other guaranty recognized by the lender in case there are changes on the guaranty in the contract adverse to the obligatory right of the lender; (3) The borrower fails to liquidate any other debts after expiration (including those that be declared to expire ahead of time), or fails to fulfill or breaches the obligations in the contract, which has impacted or may impact the fulfillment of its obligations in the contract; (4) The financial indicators including the profitability, solvency, operation capability and cash flow of the borrower break the agreed standards or are deteriorating, which has impacted or may impact the fulfillment of its obligations in the contract; (5) Material adverse changes on the equity structure, production and management and external investment of the borrow that have impacted or may impact the fulfillment of the obligations in the contract; (6) The borrower is involved or may be involved in material economic disputes, lawsuits or arbitrations, or its assets are sealed up, detained or compulsorily executed, or it is investigated and punished or penalized by the judicial authority or administrative organ by law, or exposed by media for violating related provisions or policies of the state, which has impacted or may impact the fulfillment of the obligations in the contract; (7) The abnormal changes or missing of the major investors, key managers of the borrower, or the mentioned persons who are investigated or restricted the personal liberty by the judicial authority according to law, which has impacted or may impact the fulfillment of the obligations in the contract; (8) The borrower takes advantage of the false contract with the related party or the transaction without actual trading background for the arbitrage of the capital or credit of the lender, or intentionally dodges and slips the obligatory rights of the lender through the related transactions; (9) The borrower has closed down or may close down, has been or may be dissolved, liquidated, suspended to bring up to standard, revoked the business license, cancelled or filing (filed) for bankruptcy; (10) The borrower violates the related laws and regulations such as food safety, safety production and environmental protection, provisions for supervision or occupation standard to cause liability accident to have impacted or possibly impact the fulfillment of the obligations in the contract; (11) Where the loan in the contract is released on credit, and the indicators for the credit rating, profitability, assets liabilities ratio, operation activity and net cash flow is not in line with the requirements for credit loan of the lender; the borrower offers mortgage/pledge guarantee to others or guarantee warranty to the public with its effective business assets without the written approval of the lender to have impacted or possibly impact the fulfillment of the obligations in the contract; and (12) Other situations possibly triggering the adverse impact on the achievement of the obligatory rights of the lender in the contract. 10.2 Where the borrower breaches the contract, the lender has the right to adopt one or some measures as follows: (1) ordering the borrower to make corrections within a specified time; (2) Suspending the releasing of the loan and other financings to borrower according to the contract and other contracts signed between the lender and the borrower, and partially or fully cancelling the undrawn loan and other financings; (3) Declaring the outstanding amount and other financings in the contract and other contracts signed between the lender and the borrower immediately due and call in the outstanding amount; (4) Requiring the borrower to compensate for the losses for the breach of the contract; and (5) Taking other measures according to laws and regulations and the contract or the lender thinks necessary. 10.3 Where the borrower makes repayment not in accordance with the contract after the loan expires (including the declared immediate due), the lender has the right to impose default interest according to the overdue penalty rate in the contract upon the overdue date. Where the borrower fails to pay the interest on time, the lender has the right to collect compound interest according to the overdue penalty rate. 10.4 In the borrower uses the loan not in accordance with the contract, the lender has the right to impose default interest according to the punitive interest rate of the misappropriated loan in the contract upon the misappropriation date, and the borrow fails to pay the interest during the misappropriation of the loan, the compound interest shall be imposed according to the punitive interest rate of the misappropriated loan. 10.5 Where the borrowing simultaneously has the situations as stated in Clause 10.3 and 10.4, the punitive interest rate shall be subject to the higher one. 10.6 Where the borrower fails to pay back the principal, interest (including default interest and compound interest) or other payables on time, the lender has the right to make an announcement to collect overdue receivables by media. 10.7 The relations of control and being controlled between the related party and the borrower changes, or the related party of the borrower has other situations except (1) and (2) of Clause 10.1, which has impacted or may impact the fulfillment of the obligations of the contract, the lender has the right to adopt the measures as stipulated in the contract.