Short-term Loan Contract
Exhibit
10.11
Short-term
Loan ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇
Branch, CIB Shenzhen
Lender: CIB
Shenzhen
Postcode:
518052
Phone#
▇▇▇▇▇▇▇▇ Fax# ▇▇▇▇▇▇▇▇
Borrower: Shenzhen
▇▇▇ ▇▇▇ Industrial Ltd.
Postcode:
518054
Phone#
▇▇▇▇▇▇▇▇ Fax# ▇▇▇▇▇▇▇▇
This
contract was signed at CIB Shenzhen Branch, CIB Building, Futian district,
Shenzhen.
The
Borrower applied for a short-term loan from The Lender for business use, The
Lender agreed to provide a loan to the Borrower. The Lender and the Borrower
reached an agreement on the following Terms and Conditions:
I.
General
Contract
This
Contract is a sub-contract of General Credit
Line Contract, NO.
2008-0004, Nanxin Branch, CIB Shenzhen, which provides
RMB30,000,000
credit line to the Borrower. The credit line starts on September
25, 2008 and ends on September
25, 2009.
II.
Loan
amount
The
Lender agreed to provide a loan of RMB5,
000,000
III. The
use of Loan
This
loan shall be used for customs
duty.
IV.
Loan
Duration
This
loan duration will be 6
months, which starts on September
25, 2008 and ends on March 25,
2009.
V.
Loan
interest
Interest
for this loan is
6.831% per year. This interest is fixed regardless of the national bank
interest change.
VI. Interest
payment
Interest
shall be paid on the
20th of
each month, the Borrower shall pay interest on a monthly basis, and the Borrower
shall pay off the interest before the due date of the loan.
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VII.
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Defaut
interest and compound interest
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1
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For
amounts overdue on the loan and if the loan is used for purposes not
stipulated in this contract, the Lender has the right to charge defaut
interest on the overdue amount or the amount used for other purposes as
per the stipulated interest. For overdue interest, the Lender has the
right to charge compound
interest.
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1
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2
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For
overdue loan, defaut interest shall be charged as
follows:
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2.1
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The
Lender shall charge defaut interest and compound interest for overdue
period, the defaut interest rate is a 50%
increase on the fixed loan
interest.
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3
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For
loan used for other purposes not stipulated in this contract, defaut
interest shall be charged as
follows:
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3.1
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The
Lender shall charge default interest and compound interest for the period
the amount was used, the default interest rate is a 100%
increase on the fixed loan
interest.
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4
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The
charge of compound interest shall be in complying with the terms and
conditions of this contract.
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VIII.
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Repaying
of principal and interest
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1
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The
Borrower should pay off principal and interest on the date stipulated in
this contract.
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2
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The
Borrower shall get the Lender’s consent if the Borrower wants to prepay
the loan, and the Lender has the right to charge interest based on the
loan duration stipulated in this
contract.
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3
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Loan
under this contract is a loan of foreign currency, the Borrower shall pay
off the principal and interest in the same currency as was
borrowed.
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4
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The
Borrower hereby irrepealably authorizes the Lender to access any of the
Borrower’s bank accounts for principal and interest as per Term #11 and
Terms#12.
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IX.
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Guarantee
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1
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The
first guarantee for ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ Branch, CIB Shenzhen, The
Highest Credit Line Guarantee Contract is the guarantee of the
guarantor SinoHub
Electronics Shenzhen
Ltd.
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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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3
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The
third guarantee for ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ Branch, CIB Shenzhen, The
Highest Credit Line Guarantee Contract is the personal guarantee of
Lei
Xia as a pledgor.
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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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5
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The
fifth guarantee (mortgage) for ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ 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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X.
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Representations
and Warranties
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1
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The
Borrower hereby represents to the
Lender:
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1.1
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The
Borrower is a registered company, and legally exists during the loan
duration. The Borrower has the right to sign and fulfill this
contract.
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1.2
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The
loan under this contract has been approved by the Board of Directors or
the CEO of the Borrower, and is in comply with Laws, regulations, policies
and Articles of Association. Otherwise, the Borrower shall take all the
responsibilities and the Lender is not
responsible.
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2
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1.3
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Unless
specified in the information provided to the Lender, the Borrower shall
have no mortgage, pledge, lien and other debt, no outstanding litigation,
arbitration and insolvency
proceedings.
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1.4
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The
Borrower did not cover up any of the following events that have taken
place or are about to occur so that the Lender may not agree with granting
loans:
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1.4.1
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The
Borrower or the Borrower's principal leaders involved in a major violation
of law and regulations, or
claims,
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1.4.2
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Pending
litigation, arbitration case,
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1.4.3
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The
Borrower’s debt or assumed debt, or guarantee, mortgage, pledge security
provided to a third-party,
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1.4.4
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The
Borrower occurred in an event of default with any other
loaners under
contract,
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1.4.5
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Other
things that may affect the financial condition and liquidity situation of
the Borrower.
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2
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The
Borrower hereby warrants to the
Lender:
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2.1
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The
Borrower shall provide authentic documents, statements, certifications as
per the Lender’s request.
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2.2
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The
Borrower shall open a bank account at CIB Shenzhen, and make transactions
through that bank account.
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2.3
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The
use of the loan shall be in compliance with this contact and the loan
shall not be diverted for other use. The Borrower shall not use the loan
for equity investment, or for speculation in securities, futures, real
estate or the like. The Borrower shall not use the loan for
inter-enterprise lending activities or other illegal activities. And the
Borrower shall not divert or misappropriate funds derived from the
loan.
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2.4
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The
Borrower shall at any time agree and cooperate with the Lender to inspect
the use the loan, business operations, financial activities, inventory of
goods, assets and liabilities, bank deposits and cash on
hand.
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2.5
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The
Borrower shall provide full and approved guarantees that have been agreed
to by the Lender.
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2.6
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The
Borrower shall not reduce the registered capital in any
way.
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2.7
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Without
the written consent of the Lender, the Borrower shall not transfer part or
all of the obligations under this contract to a third
party.
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2.8
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Major
changes in the ownership and business operation adjustment (including, but
not limited to, signing a joint venture or co-operation contract with a
foreign corporation, or a Hong Kong, Macao or Taiwan corporation; revoking
the license of, closing, shutting down of production, changing of
products, spin-off of any business, acquisition, merger; re-establish or
alteration to a joint-stock company; making investments in joint-stock
companies or investment companies by using fixed assets such as houses and
equipment, or intangible assets such as trademarks, patents, proprietary
technology, land use rights, transactions on property rights,
business operation rights by leasing, contracting, joint venture) shall
get the written consent of the Lender in
advance.
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3
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3
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Guarantor
(or mortgagor, pledgor) hereby
commits:
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When
the Borrower fails to fulfill obligations, regardless that the Lender may have
other guaranties under this contract (including but not limited to, warranty,
mortgage, pledge, bank line, or any other forms of guaranty methods), the Lender
has the right to request a guarantor (or mortgagor, pledgor) to take all
responsibilities under this contract, without exercising other guaranty
rights.
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XI.
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Advance
loan collection
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Under
the following circumstances the Lender has the right to collect the loan ahead
of schedule. The Lender has the right to access to any of the Borrowers accounts
for recovery of money.
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1
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The
Borrower owes loan interest.
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2
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The
Borrower has an operating loss or a sharp economic
decline.
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3
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The
Borrower is involved in or is about to be involved in litigation,
arbitration or other legal
disputes.
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4
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The
Borrower provides untrue reports or
information.
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5
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The
Borrower uses the loan for purposes not stipulated in this
contract.
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6
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The
Borrower refuses to have the Lender to inspect or supervise its operating
and financial activities, or refuses to provide reports or
information.
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7
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The
Borrower has major personnel
changes.
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8
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Other
situations that may jeopardize the loan
security.
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XII.
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Liabilities
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1
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The
following circumstances constitute a breach of this
Contract:
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1.1
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The
Borrower does not repay principal and interest on time in accordance with
this contract.
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1.2
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The
Borrower violates the Representations and Warranties as per Chapter 10 in
this contract.
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1.3
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The
Borrower violates other provisions of this
contract.
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2
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When
a breach of this Contract happens, the Lender has the right to take one or
all of the actions as follows:
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2.1
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Order
the Borrower to correct violations in a time
limit.
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2.2
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Stop
the Borrower from withdrawing
money.
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2.3
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Terminate
the loan contract, and require the Borrower to repay mature or undue
principal and interest.
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2.4
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The
Lender has the right to charge defaut interest for overdue loan
amounts.
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2.5
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The
Lender has the right to charge defaut interest on non-specified use of the
loan.
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2.6
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The
Lender has the right to charge compound interest on overdue loan
amounts.
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2.7
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The
Lender has the right to recover money from any of the Borrower’s bank
accounts for owed principal and interest, and exchange the currency as per
the bank rate when necessary.
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2.8
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The
Lender has the right to take legal means to recover the loan principal and
interest; all costs arising from litigation activities shall be borne by
the Borrower.
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4
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3
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In
the case that the Lender does not provide loans to the Borrower in
accordance with the agreed date and the amount, which results in a loss
for the Borrower, the Lender shall pay the
loss.
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4
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The
Lender has the right to take actions in accordance with the provisions of
this contract when a guarantor (or mortgagor, pledgor) has any of the
following situations:
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4.1
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The
guarantor violates this contract, or the guarantor’s credit has
deteriorated, or the guarantor is not competent to support the
guarantee.
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4.2
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The
Mortgagor violates this contract, intentionally damages collateral, or the
collateral value has been or may be significantly reduced, or other
incidents happen which damage the Lender’s lien on the
mortgage.
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4.3
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Any
pledgor violates this contract, or any 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
Lender’s right on the pledge.
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XIII.
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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 parties are unable to reach an agreement, either the Lender
or the Borrower may demand for arbitration by the Shenzhen Arbitration
Committee.
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XIV.
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Term
of this Contract
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This
contract shall enter into force after the following conditions:
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1
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Both
parties have signed or chopped this
contract.
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2
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The
guarantee contracts under this contract have entered into
force.
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3
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The
Lender requests for a notarization for this contract, and notarization
procedures are fulfilled
legally.
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XV.
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Copies
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This
Agreement will be executed in triplicate, both parties and the notary agency
will have one copy.
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XVI.
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Supplementary
provisions
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Signature
Page Follows
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