Credit Line Contract
EXHIBIT 10.12
Contract
No：（2008）0004
Party
A：Nanxin
Branch, CIB Shenzhen
Address:
1st Floor, Nan Hai Tai
Building, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇
Postcode：518052
Phone
# ▇▇▇▇-▇▇▇▇▇▇▇▇, Fax
#
▇▇▇▇-▇▇▇▇▇▇▇▇
Party
B: SinoHub
SCM Shenzhen, Ltd.
Address：▇/▇, ▇▇. ▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇
Postcode：518057
Phone
# ▇▇-▇▇▇-▇▇▇▇▇▇▇▇, Fax
# ▇▇-▇▇▇-▇▇▇▇▇▇▇▇
This
contract was signed at CIB Shenzhen Branch, CIB Building, Futian District,
Shenzhen.
Party
A agreed to provide a credit line to Party B. In order to specify
responsibilities and obligations, Party A and Party B agreed on the following
terms and conditions in accordance with relevant laws and
regulations.
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1
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Definition
and Interpretation
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1.1
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“Credit
Granting” means Party A shall comprehensively evaluate the management
situations and risk factors of Party B, and define the credit line of
Party B, which includes foreign currency loans, trade financing,
acceptance of bills, discount on bills, the opening of L/Cs, guarantees or
the like.
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1.2
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“Basic
credit granting” refers to a credit line granted to Party B for funds flow
based on the basic conditions of Party B. Party B may use the credit line
gradually and circularly within the
term.
|
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1.3
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“Credit
line term” refers to an uninterrupted period, in which Party B may apply
for financing under the agreement of Party A. However, the time for Party
B to fulfill obligations (including but not limited to the performance of
payment of the main debt and responsibility for the guarantee) shall not
be limited to the term.
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1.4
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Party
A shall take a control of the credit line balance. The balance refers to
the sum of outstanding credit line and the credit line at
maturity:
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1.4.1
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Outstanding
credit line refers to the sum of loans that are not
due.
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1.4.2
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Credit
line at maturity refers to sum of the loans that are
overdue.
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1.5
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“Sub-contract”
refers to contracts that regulate the amount, the performance terms of the
debt instrument, rights and obligations for each financing under the
credit line. This contract is the general contract, all sub-contracts have
the same legal effect, and they are integral parts of the general
contract.
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1.6
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“The
main debt” refers to the principle, which includes but is not limited to
loan principle for all currencies, trade financing principle, the
principle of bill acceptance, the bill discount amount, L/C advances, debt
principle of the guarantee provided by Party A to Party
B.
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2
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Credit
Line
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Credit
line under this contract is RMB 30
million. If there is a foreign currency financing under the credit line,
that currency shall be exchanged to RMB according to the exchange rate published
by Party A. This credit line can be used for the following
items:
|
Business
name
|
Amount(
RMB）
|
Remark
|
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1. Import
L/C Opening
|
30,000,000.00
|
15%
for deposit
|
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2. Import
Bill Advance
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25,500,000.00
|
|
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3. Import
services
|
25,500,000.00
|
|
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4. Short-term
loan
|
5,000,000.00
|
|
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The
credit line can be used among above
items.
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||
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3
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Credit
Line Term
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Term
of the credit line starts on September
25, 2008, and ends on September
25, 2009.
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4
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Guarantee
|
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4.1
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The
following are the guarantee contracts for this general
contract:
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4.1.1
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The
first guarantee for Contract
NO. 2008-0004A Nanxin Branch, CIB Shenzhen, The
Highest Credit Line Guarantee Contract is the guarantee of the
guarantor SinoHub
Electronics Shenzhen
Ltd.
|
|
4.1.2
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The
second guarantee for Contract
NO. 2008-0004B Nanxin Branch, CIB Shenzhen, The
Highest Credit Line Guarantee Contract is the guarantee of the
guarantor Shenzhen
▇▇▇ ▇▇▇▇ Co., Ltd.
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4.1.3
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The
third guarantee for Contract
NO. 2008-0004A Nanxin Branch, CIB Shenzhen, The
Highest Credit Line Guarantee Contract is the personal guarantee of
▇▇▇
▇▇▇ as a pledgor.
|
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4.1.4
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The
fourth guarantee for Contract
NO. 2008-0004B Nanxin Branch, CIB Shenzhen, The
Highest Credit Line Guarantee Contract is the personal guarantee of
▇▇▇▇▇▇▇▇▇
▇▇▇ as a pledgor.
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4.1.5
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The
fifth guarantee (mortgage) for Contract
NO. 2008-0004 Nanxin Branch, CIB Shenzhen, The
Highest Mortgage Contract is a Mortgage on a property owned
jointly (50/50) by ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (together the
Mortgagor).
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4.2
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Unless
otherwise agreed, all debts under the credit line shall be provided with
maximum guarantee by the guarantor, the mortgagor, or the
pledgor.
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2
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4.3
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Party
A has the right to take the measures according to Chapter 6.2 for the
following situations:
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4.3.1
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The
guarantor violates the The
Highest Credit Line Guarantee Contract, or the guarantor’s credit
has deteriorated, or the guarantor is not competent to support the
guarantee.
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4.3.2
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The
Mortgagor violates The
Highest Mortgage Contract, intentionally damages collateral, or the
collateral value has been or may be significantly reduced, or other
incidents happen which damage the lien of Party A on the
mortgage.
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4.3.3
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The
pledgor violates The
Highest Credit Line Guarantee Contract, or the pledged property
value has been or may significantly reduced, or the right to pledge must
be fulfilled before the settlement of the loan, or other incidents happen
which damage the pledge right of Party
A.
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5
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Rights
and Obligations
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5.1
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Within
the term and the amount limit, Party A shall grant credit to Party B after
reviewing all the conditions.
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5.2
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Party
B shall open a bank account at CIB, and have all the transactions go
through that bank account.
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5.3
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Party
A has the right to access to the financial report and other business
information of Party B, Party B shall provide timely information to Party
A of the marketing plans, investment and development plans, and funds
demand. Party A shall not disclose any trade secrets of Party
B.
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5.4
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Party
B shall provide a full and valid guarantee recognized by Party
A.
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5.5
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Party
A shall provide guidance to Party B on economic policy, business
management, and credit policy.
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5.6
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Party
A has the right to charge fees relating to the credit line. Unless
otherwise agreed, all necessary costs based on the credit line shall be
paid by Party B.
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5.7
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Party
A has the right to adjust or terminate the credit line for the following
situations:
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5.7.1
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Party
B is having serious operational difficulties and
risks.
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5.7.2
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Party
B is making significant changes in organization (including split-off,
merging, revocation of license or the
like)
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5.7.3
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The
credit of Party B decreases, or Party B does not pay off debt on
time.
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5.7.4
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Significant
changes take place in the
market.
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5.7.5
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Other
situations under which Party A shall change the credit
line.
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5.8
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Party
B may apply for an increase on the credit line for a special occasion or a
particular project.
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6
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Liabilities
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6.1
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Breach
of Contract by Party B shall
mean
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6.1.1
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Party
B provides untrue information or covers up the truth of corporate
matters.
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3
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6.1.2
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Party
B’s credit has deteriorated, or Party B is not competent to support the
guarantee.
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6.1.3
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Party
B violates the sub-contracts.
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6.1.4
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Party
B violates the general
contract.
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6.2
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If
Party B violates the contract, Party A has the right to exercise one or
more of the following measures:
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6.2.1
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Suspend,
reduce, or terminate the credit
line.
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6.2.2
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Declare
the expiry of some or all of the credit
line.
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6.2.3
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Request
for full compensation for loss from Party
B.
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7
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Fees
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If
either Party breaches the contract, the defaulting party shall pay for all fees,
including but not limited to legal costs, lawyers fees, property preservation
fees, implementation fees, handling fees or the like.
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8
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Jurisdiction
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The
signing, legal validity, interpretation, performance or disputes of this
contract shall apply to the law of the People's Republic of China. During the
term of the contract, all controversy and dispute shall be dealt through
negotiation. If the two parties are unable to reach an agreement, either party
may demand for arbitration by the Shenzhen Arbitration
Committee.
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9
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Notification
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9.1
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Any
notice under this contract shall be in writing and delivered to the other
party as per the address or fax number on the front
cover.
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9.2
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Either
party shall promptly inform the other party of changes in their contact
information.
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9.3
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All
notices that are delivered as per the specified address shall be deemed as
well received after:
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9.3.1
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5
days if the notice is delivered by a registered
mail.
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9.3.2
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Receiving
a confirmation after sending a
fax.
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9.3.3
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Receiving
a receipt with the receiver’s
signature.
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10
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Effective
Conditions of The Contract
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10.1
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This
contract shall enter into full force after the following
conditions:
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10.1.1
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Both
parties sign and chop on the
contract
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10.1.2
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The
Guarantee (Mortgage, Pledge) contracts under this contract have come into
effect.
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10.1.3
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Party
A requests that this contract be notarized and notarization procedures are
fulfilled legally.
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10.2
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This
contract shall cease to be in effect once all the debts are
paid.
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11
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Contract
Documents
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This
contract will be executed in quadruplicate, each of the parties, the notary
agency, and the guarantor will have one copy.
4
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12
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Supplementary
Provision
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The
sum of the balances of Contract
No.（2007）0004 and Contract No.（2008）0004 shall not be greater than
RMB30million.
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Signature Page Follows
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||||
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| Party A (Corporate Chop) |
Legal representative or authorized agent
(signature)
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| Nanxin Branch, CIB Shenzhen | /s/▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| August 21, 2008 | ||||
| Party B (Corporate Chop) |
Legal
representative or authorized agent
(signature)
|
|||
| SinoHub SCM Shenzhen, Ltd. | /s/Cui Hantao | |||
| August 21, 2008 | ||||
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