Notes
|
June 30, 2011
|
December 31, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
|||||||||||
ASSETS
|
|||||||||||||
Current assets
|
|||||||||||||
Cash and cash equivalents
|
78,446 | 12,137 | 171,227 | ||||||||||
Restricted cash
|
88,689 | 13,721 | 1,314 | ||||||||||
Accounts and bills receivable, net
|
3
|
34,364 | 5,317 | 25,482 | |||||||||
Inventories
|
4
|
43,217 | 6,686 | 52,577 | |||||||||
Advance to suppliers
|
5,370 | 831 | 10,974 | ||||||||||
Prepayments and other receivables
|
30,063 | 4,651 | 540 | ||||||||||
Deferred tax assets - current
|
745 | 115 | 1,344 | ||||||||||
Total current assets
|
280,894 | 43,458 | 263,458 | ||||||||||
Plant, properties and equipment, net
|
5
|
299,613 | 46,355 | 284,891 | |||||||||
Construction in progress
|
6
|
169,698 | 26,255 | 197,193 | |||||||||
Lease prepayments, net
|
7
|
20,309 | 3,142 | 21,024 | |||||||||
Advance to suppliers - Long term
|
4,116 | 637 | 2,787 | ||||||||||
Goodwill
|
10,276 | 1,590 | 10,276 | ||||||||||
Long-term deposit
|
8
|
16,760 | 2,593 | 16,760 | |||||||||
Deferred tax assets - non current
|
1,692 | 262 | 1,763 | ||||||||||
Total assets
|
803,358 | 124,292 | 798,152 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||
Current liabilities
|
|||||||||||||
Short-term borrowings
|
9
|
173,501 | 26,843 | 142,000 | |||||||||
Accounts payables
|
18,328 | 2,836 | 14,296 | ||||||||||
Advance from customers
|
9,308 | 1,440 | 37,291 | ||||||||||
Accrued expenses and other payables
|
8,875 | 1,373 | 20,993 | ||||||||||
Deferred tax liabilities
|
1,816 | 281 | 1,822 | ||||||||||
211,828 | 32,773 | 216,402 | |||||||||||
Long-term loan
|
9
|
10,000 | 1,547 | 30,000 | |||||||||
Total liabilities
|
221,828 | 34,320 | 246,402 | ||||||||||
Commitments and contingencies
|
|||||||||||||
Equity
|
|||||||||||||
Shareholders’ equity
|
|||||||||||||
Registered capital (of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500 issued and outstanding)
|
13,323 | 2,061 | 13,323 | ||||||||||
Additional paid-in capital
|
311,907 | 48,257 | 311,907 | ||||||||||
Statutory reserve
|
35,195 | 5,445 | 35,195 | ||||||||||
Retained earnings
|
220,697 | 34,145 | 190,933 | ||||||||||
Cumulative translation adjustment
|
1,211 | 187 | 1,186 | ||||||||||
Total shareholders’ equity
|
582,333 | 90,096 | 552,544 | ||||||||||
Non-controlling interest
|
(803 | ) | (124 | ) | (794 | ) | |||||||
Total equity
|
581,530 | 89,972 | 551,750 | ||||||||||
Total liabilities and equity
|
803,358 | 124,292 | 798,152 |
The Three-Month Period Ended June 30,
|
The Six-Month Period Ended June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||
RMB
|
US$
|
RMB
|
RMB
|
US$
|
RMB
|
|||||||||||||||||||
Net sales
|
137,316 | 21,245 | 110,319 | 311,470 | 48,189 | 198,774 | ||||||||||||||||||
Cost of sales
|
(114,789 | ) | (17,760 | ) | (90,648 | ) | (243,807 | ) | (37,721 | ) | (166,337 | ) | ||||||||||||
Gross profit
|
22,527 | 3,485 | 19,670 | 67,663 | 10,468 | 32,437 | ||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
Selling expenses
|
(4,945 | ) | (765 | ) | (4,159 | ) | (9,039 | ) | (1,399 | ) | (7,555 | ) | ||||||||||||
Administrative expenses
|
(7,242 | ) | (1,120 | ) | (12,896 | ) | (18,878 | ) | (2,920 | ) | (20,425 | ) | ||||||||||||
Total operating expenses
|
(12,187 | ) | (1,885 | ) | (17,055 | ) | (27,917 | ) | (4,319 | ) | (27,980 | ) | ||||||||||||
Operating income
|
10,340 | 1,600 | 2,615 | 39,746 | 6,149 | 4,457 | ||||||||||||||||||
Other income (expense)
|
||||||||||||||||||||||||
- Interest income
|
525 | 81 | 157 | 1,076 | 167 | 171 | ||||||||||||||||||
- Interest expense
|
(2,427 | ) | (376 | ) | (2,669 | ) | (4,727 | ) | (731 | ) | (4,287 | ) | ||||||||||||
- Others income, net
|
(132 | ) | (20 | ) | (180 | ) | (236 | ) | (37 | ) | (136 | ) | ||||||||||||
Total other income (expense)
|
(2,034 | ) | (315 | ) | (2,692 | ) | (3,887 | ) | (601 | ) | (4,251 | ) | ||||||||||||
Income before income tax benefit (expense)
|
8,306 | 1,285 | (77 | ) | 35,859 | 5,548 | 205 | |||||||||||||||||
Income tax benefit (expense)
|
(2,191 | ) | (339 | ) | 42 | (6,104 | ) | (944 | ) | 23 | ||||||||||||||
Net Income (loss)
|
6,115 | 946 | (35 | ) | 29,756 | 4,604 | 228 | |||||||||||||||||
Net loss attributable to noncontrolling interests
|
(5 | ) | (1 | ) | (32 | ) | (9 | ) | (1 | ) | (69 | ) | ||||||||||||
Net income (loss) attributable to the Company
|
6,120 | 947 | (3 | ) | 29,764 | 4,605 | 297 | |||||||||||||||||
Other comprehensive income
|
||||||||||||||||||||||||
- Foreign currency translation adjustments attributable to noncontrolling interest
|
12 | 2 | - | 17 | 2 | - | ||||||||||||||||||
- Foreign currency translation adjustments attributable to the Company
|
18 | 3 | - | 6 | 2 | (16 | ) | |||||||||||||||||
Comprehensive income (loss) attributable to non-controlling interest
|
7 | 1 | (32 | ) | 8 | 1 | (69 | ) | ||||||||||||||||
Comprehensive income attribute to the Company
|
6,138 | 950 | (3 | ) | 29,770 | 4,607 | 281 | |||||||||||||||||
Earnings per share,
Basic and diluted
|
0.47 | 0.07 | (0.0002 | ) | 2.28 | 0.35 | 0.02 | |||||||||||||||||
Weighted average number ordinary shares,
Basic and diluted
|
13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 |
Period Ended June 30, 2011
|
Period Ended June
30, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Cash flow from operating activities
|
||||||||||||
Net income
|
29,756 | 4,604 | 228 | |||||||||
Adjustments to reconcile net income to net cash
|
||||||||||||
(used in) provided by operating activities
|
||||||||||||
- Depreciation of property, plant and equipment
|
18,868 | 2,919 | 18,158 | |||||||||
- Amortization of intangible assets
|
227 | 35 | 227 | |||||||||
- Deferred income taxes
|
664 | 103 | (23 | ) | ||||||||
- Bad debt expense (recovery)
|
(5,638 | ) | (872 | ) | (2 | ) | ||||||
- Accounts receivable
|
(9,130 | ) | (1,413 | ) | (8,502 | ) | ||||||
- Inventories
|
9,360 | 1,448 | 5,682 | |||||||||
- Advance to suppliers
|
5,605 | 867 | (2,670 | ) | ||||||||
- Prepaid expenses and other current assets
|
(23,184 | ) | (3.587 | ) | 87 | |||||||
- Accounts payable
|
4,032 | 624 | (4,147 | ) | ||||||||
- Accrued expenses and other payables
|
(8,153 | ) | (1,262 | ) | 5,922 | |||||||
- Advance from customers
|
(27,983 | ) | (4,329 | ) | 613 | |||||||
- Tax payable
|
(3,816 | ) | (590 | ) | 1,610 | |||||||
Net cash provided by (used in) operating activities
|
(9,392 | ) | (1,453 | ) | 17,184 | |||||||
Cash flow from investing activities
|
||||||||||||
Addition of property, plant and equipment
|
(33,556 | ) | (5,192 | ) | (1,234 | ) | ||||||
Restricted cash related to trade finance
|
(87,383 | ) | (13,519 | ) | 12,041 | |||||||
Advanced to suppliers - non current
|
(1,329 | ) | (206 | ) | 910 | |||||||
Subtraction to construction in progress
|
27,495 | 4,254 | 1,114 | |||||||||
Net cash provided by (used in) investing activities
|
(94,773 | ) | (14,663 | ) | 12,832 | |||||||
Cash flow from financing activities
|
||||||||||||
Principal payments of short-term bank loans
|
(7,000 | ) | (1,083 | ) | (16,179 | ) | ||||||
Proceeds from short-term bank loans
|
18,501 | 2,862 | 10,000 | |||||||||
Net cash provided by (used in) financing activities
|
11,501 | 1,779 | (6,179 | ) | ||||||||
Effect of foreign exchange rate changes
|
(116 | ) | 575 | (26 | ) | |||||||
Net increase (decrease) in cash and cash equivalent
|
(92,780 | ) | (13,760 | ) | 23,810 | |||||||
Cash and cash equivalent
|
||||||||||||
At beginning of period
|
171,227 | 25,897 | 26,804 | |||||||||
At end of period
|
78,446 | 12,137 | 50,615 | |||||||||
SUPPLEMENTARY DISCLOSURE
:
|
||||||||||||
Interest paid
|
4,727 | 731 | 4,441 | |||||||||
Income tax paid
|
8,456 | 1,308 | - |
Years
|
|||
Buildings and improvements
|
25 - 30
|
||
Plant and equipment
|
10 - 15
|
||
Computer equipment
|
5
|
||
Furniture and fixtures
|
5
|
||
Motor vehicles
|
5
|
June 30, 2011
|
December 31, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Accounts receivable
|
20,416 | 3,159 | 7,097 | |||||||||
Less: Allowance for doubtful accounts
|
(2,387 | ) | (369 | ) | (2,140 | ) | ||||||
18,029 | 2,790 | 4,957 | ||||||||||
Bills receivable
|
16,335 | 2,527 | 20,525 | |||||||||
34,364 | 5,317 | 25,482 |
June 30, 2011
|
December 31, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Raw materials
|
20,991 | 3,248 | 25,254 | |||||||||
Work-in-progress
|
1,854 | 287 | 1,419 | |||||||||
Finished goods
|
22,146 | 3,426 | 27,634 | |||||||||
Consumables and spare parts
|
804 | 124 | 849 | |||||||||
Inventory—impairment
|
(2,578 | ) | (399 | ) | (2,578 | ) | ||||||
43,217 | 6,686 | 52,577 |
June 30, 2011
|
December 31, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Buildings
|
44,869 | 6,942 | 44,398 | |||||||||
Plant and equipment
|
449,114 | 69,485 | 417,696 | |||||||||
Computer equipment
|
2,165 | 335 | 1,602 | |||||||||
Furniture and fixtures
|
8,158 | 1,262 | 6,958 | |||||||||
Motor vehicles
|
2,280 | 353 | 1,906 | |||||||||
506,586 | 78,377 | 472,561 | ||||||||||
Less: accumulated depreciation
|
(206,973 | ) | (32,022 | ) | (187,670 | ) | ||||||
299,613 | 46,355 | 284,891 |
June 30, 2011
|
December 31, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Lease prepayment – non-current
|
20,309 | 3,142 | 20,570 | |||||||||
Lease prepayment – current
|
454 | 70 | 454 | |||||||||
20,763 | 3,212 | 21,024 |
RMB
|
US$
|
|||||||
1 year after
|
454 | 70 | ||||||
2 years after
|
454 | 70 | ||||||
3 years after
|
454 | 70 | ||||||
4 years after
|
454 | 70 | ||||||
5 years after
|
454 | 70 | ||||||
Thereafter
|
18,493 | 2,861 |
Lender
|
Interest rate
|
June 30, 2011
|
December 31, 2010
|
|||||||||||||
per annum
|
RMB
|
US$
|
RMB
|
|||||||||||||
SHORT-TERM LOANS
|
||||||||||||||||
Bank of Communications Co., Ltd.
|
||||||||||||||||
- June 8, 2010 to June 7, 2011
|
6.666 | % | - | - | 67,000 | |||||||||||
- June 7, 2010 to June 6, 2011
|
6.666 | % | - | - | 70,000 | |||||||||||
- May 25, 2011 to May 7, 2012
|
7.57 | % | 30,000 | 4,641 | - | |||||||||||
- May 25, 2011 to May 14, 2012
|
7.57 | % | 35,000 | 5,415 | - | |||||||||||
- May 25, 2011 to May 21, 2012
|
7.57 | % | 35,000 | 5,415 | - | |||||||||||
- May 30, 2011 to April 17, 2012
|
7.57 | % | 30,000 | 4,641 | - | |||||||||||
- April 26, 2011 to April 25, 2012
|
4.2725 | % | 18,501 | 2,862 | - | |||||||||||
Bank of Weifang
|
||||||||||||||||
- December 2, 2008 to December 2, 2011
|
0.00 | % | 5,000 | 774 | 5,000 | |||||||||||
- January 16, 2009 to January 12, 2012
|
0.00 | % | 10,000 | 1,547 | - | |||||||||||
- January 13, 2010 to January 12, 2012
|
0.00 | % | 10,000 | 1,547 | - | |||||||||||
LONG-TERM LOANS
|
||||||||||||||||
Bank of Weifang
|
||||||||||||||||
- January 16, 2009 to January 12, 2012
|
0.00 | % | - | - | 10,000 | |||||||||||
- January 13, 2010 to January 12, 2012
|
0.00 | % | - | - | 10,000 | |||||||||||
Weifang Dongfang State-owned Assets Management Co., Ltd.
|
||||||||||||||||
- October 19, 2009 to October 18, 2017
|
6.12 | % | 10,000 | 1,547 | 10,000 | |||||||||||
183,501 | 28,390 | 172,000 |
RMB
|
US$
|
|||||||
1 year after
|
- | - | ||||||
2 years after
|
- | - | ||||||
3 years after
|
- | - | ||||||
4 years after
|
3,350 | 518 | ||||||
5 years after
|
6,650 | 1,029 |
June 30, 2011
|
June 30, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Cayman Islands current income tax benefit (expense)
|
- | - | - | |||||||||
PRC current income benefit (expense)
|
(5,440 | ) | (842 | ) | - | |||||||
Deferred tax benefit (expense)
|
(664 | ) | (102 | ) | 23 | |||||||
Total provision for income tax
|
(6,104 | ) | (944 | ) | 23 |
June 30, 2011
|
June 30, 2010
|
|||||||
Tax expense (credit) – Cayman Islands
|
0 | % | 0 | % | ||||
Foreign income tax – PRC
|
15 | % | 15 | % | ||||
Exempt from income tax due to tax holidays
|
0 | % | 0 | % | ||||
Tax expense at actual rate
|
15 | % | 15 | % |
June 30, 2011
|
June 30, 2010
|
|||||||
Expected tax benefit
|
34 | % | 34 | % | ||||
State income taxes, net of federal benefit
|
5 | % | 5 | % | ||||
Changes in valuation allowance
|
(39 | )% | (39 | )% | ||||
Total
|
- | - |
June 30, 2011
|
June 30, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Income before income taxes
|
35,859 | 5,548 | 205 | |||||||||
Computed “expected” tax expense
|
9,067 | 1,403 | 63 | |||||||||
Non-taxable income
|
- | - | (63 | ) | ||||||||
Tax holiday
|
(3,627 | ) | (561 | ) | - | |||||||
Tax rate differential of other tax jurisdictions
|
664 | 102 | (23 | ) | ||||||||
Actual income tax expenses (benefit)
|
6,104 | 944 | (23 | ) |
June 30, 2011
|
December 31, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Current
|
||||||||||||
Accounts receivable
|
358 | 55 | 321 | |||||||||
Other receivables
|
- | - | 636 | |||||||||
Inventory impairment
|
387 | 60 | 387 | |||||||||
745 | 115 | 1,344 | ||||||||||
Non-current
|
||||||||||||
Property, plant and equipment, principally due to differences in depreciation and capitalized interest
|
1,692 | 262 | 1,763 | |||||||||
Construction in progress, principally due to capitalized interest
|
(1,417 | ) | (219 | ) | (1,417 | ) | ||||||
Lease prepayments, principally due to differences in charges
|
(399 | ) | (62 | ) | (404 | ) | ||||||
(124 | ) | (19 | ) | (58 | ) | |||||||
Net deferred income tax assets
|
622 | 96 | 1,286 |
Fair value of shares on measurement date
|
US$ 8.28 per share
|
|||
Expected volatility
|
57.26 | |||
Expected dividends
|
0.00 | |||
Expected term (in years)
|
5 | |||
Risk-free rate
|
4.56 |
Options
Outstanding
|
Weighted Average
Exercise Price
|
Aggregate
Intrinsic Value
|
||||||||||
Outstanding, December 31, 2010
|
187,500 | $ | 10.35 | - | ||||||||
Granted
|
- | - | - | |||||||||
Forfeited
|
- | - | - | |||||||||
Exercised
|
- | - | - | |||||||||
Outstanding, June 30, 2011
|
187,500 | $ | 10.35 |
Outstanding Options
|
Exercisable Options
|
|||||||||||||||||||||
Exercise
Price
|
Number
|
Average Remaining
Contractual Life
|
Average Exercise
Price
|
Number
|
Average Exercise
Price
|
|||||||||||||||||
$ | 10.35 | 187,500 | 0.50 | $ | 10.35 | 187,500 | $ | 10.35 |
Six-Month Period
Ended
|
Six-Month
Period Ended
|
|||||||
June 30, 2011
|
June 30, 2010
|
|||||||
(as % of Revenue)
|
||||||||
Gross profit
|
21.7 | 16.3 | ||||||
Operating expenses
|
(9.0) | (14.1) | ||||||
Operating income
|
12.8 | 2.2 | ||||||
Other income (expense)
|
(1.2) | (2.1) | ||||||
Income tax benefit (expense)
|
(2.0) | (0.01) | ||||||
Net income (loss)
|
9.6 | 0.1 |
Six-Month Period Ended
June 30, 2011
|
% of Total
|
Six-Month Period
Ended
June 30, 2010
|
% of Total
|
|||||||||||||||||
RMB
|
US$
|
RMB | ||||||||||||||||||
Printing film
|
30,419 | 4,706 | 9.8 | % | 28,087 | 14.1 | % | |||||||||||||
Stamping film
|
170,335 | 26,353 | 54.7 | % | 122,580 | 61.7 | % | |||||||||||||
Metallization film
|
17,157 | 2,654 | 5.5 | % | 12,683 | 6.4 | % | |||||||||||||
Specialty film
|
79,541 | 12,306 | 25.5 | % | 24,780 | 12.5 | % | |||||||||||||
Base film for other application
|
14,018 | 2,170 | 4.5 | % | 10,644 | 5.4 | % | |||||||||||||
311,470 | 48,189 | 100.0 | % | 198,774 | 100.0 | % |
Six-Month Period Ended
June 30, 2011
|
Six-Month Period
Ended
June 30, 2010
|
|||||||||||||||||||
RMB
|
US$
|
% of Total
|
RMB |
% of Total
|
||||||||||||||||
Sales in China
|
203,556 | 31,493 | 65.4 | % | 162,084 | 81.5 | % | |||||||||||||
Sales in other countries
|
107,914 | 16,696 | 34.6 | % | 36,690 | 18.5 | % | |||||||||||||
311,470 | 48,189 | 100.0 | % | 198,774 | 100.0 | % |
Six-Month Period
Ended
|
Six-Month Period
Ended
|
|||||||
June 30, 2011
|
June 30, 2010
|
|||||||
% of total
|
% of total
|
|||||||
Materials costs
|
81.0% | 76.2% | ||||||
Factory overhead
|
8.8% | 11.7% | ||||||
Energy expense
|
6.3% | 7.8% | ||||||
Packaging materials
|
2.6% | 3.0% | ||||||
Direct labor
|
1.3% | 1.3% |
Three-Month Period
Ended
|
Three-Month
Period Ended
|
|||||||
June 30, 2011
|
June 30, 2010
|
|||||||
(as % of Revenue)
|
||||||||
Gross profit
|
16.4 | 17.8 | ||||||
Operating expenses
|
(8.9) | (15.5) | ||||||
Operating income
|
7.5 | 2.4 | ||||||
Other income (expense)
|
(1.5) | (2.4) | ||||||
Income tax benefit (expense)
|
(1.6) | 0.04 | ||||||
Net income (loss)
|
4.5 | (0.002) |
Three-Month Period Ended
June 30, 2011
|
|
Three-Month Period
Ended
June 30, 2010
|
|
|||||||||||||||||
RMB
|
US$
|
% of Total
|
RMB
|
% of Total
|
||||||||||||||||
Sales in China
|
94,189 | 14,573 | 68.6 | % | 84,959 | 77.0 | % | |||||||||||||
Sales in other countries
|
43,127 | 6,672 | 31.4 | % | 25,359 | 23.0 | % | |||||||||||||
137,316 | 21,245 | 100.0 | % | 110,319 | 100.0 | % |
Three-Month Period
Ended
|
Three-Month Period
Ended
|
|||||||
June 30, 2011
|
June 30, 2010
|
|||||||
% of total
|
% of total
|
|||||||
Materials costs
|
79.2% | 75.9% | ||||||
Factory overhead
|
9.9% | 12.0% | ||||||
Energy expense
|
6.7% | 7.7% | ||||||
Packaging materials
|
2.8% | 3.1% | ||||||
Direct labor
|
1.4% | 1.3% |
Payments due by period
|
||||||||||||||||||||
Less than
|
1-3
|
3-5
|
More than
|
|||||||||||||||||
Contractual obligations
|
Total
|
1 year
|
years
|
years
|
5 years
|
|||||||||||||||
Rental obligations
|
126 | 126 | - | - | - | |||||||||||||||
Purchase obligations
|
114,690 | 114,690 | - | - | - | |||||||||||||||
Total
|
114,816 | 114,816 | - | - | - |
Exhibit No.
|
|
Description
|
4.1
|
Loan Contract between Fuwei Films (Shandong) Co. Ltd. and Bank of Communications, dated May 25, 2011
|
|
4.2
|
Loan Contract between Fuwei Films (Shandong) Co. Ltd. and Bank of Communications, dated May 25, 2011
|
|
4.3
|
Loan Contract between Fuwei Films (Shandong) Co. Ltd. and Bank of Communications, dated May 25, 2011
|
|
4.4
|
Loan Contract between Fuwei Films (Shandong) Co. Ltd. and Bank of Communications, dated May 30, 2011
|
|
4.5
|
Loan Contract between Fuwei Films (Shandong) Co. Ltd. and Bank of Communications, dated April 26, 2011.
|
|
99.1
|
Press Release dated August 10, 2011.
|
Fuwei Films (Holdings) Co., Ltd.
|
||
By:
|
/s/ Xiaoan He
|
|
Name: Xiaoan He
|
||
Title: Chairman and Chief Executive Officer
|
Borrower:
|
Fuwei Films (Shandong) Co., Ltd.
|
Legal Representative:
|
Xiaoan He
|
Legal Address:
|
Hi-Tech Development Zone, No. 387 Dong Ming Road , Weifang
|
Correspondence Address:
|
Same as above
|
Lender:
|
Weifang Branch, Bank of Communications
|
Responsible Person:
|
Ankui Liu
|
Correspondence Address:
|
No. 358 Dong Feng, Dong Street, Weifang
|
1
|
Loan
|
1.1
|
Currency: Renminbi (RMB)
|
1.2
|
Amount: 30,000,000
|
1.3
|
The proceeds of the Loan under this Contract shall be used for
procurement of raw materials
.
|
1.4
|
Loan Period: Commencing from the date of first loan drawing and expiring on
May 7
, 2012 with a term of no more than
twelve (12)
months.
|
2
|
Interest Rate and Computation of Interest
|
2.1
|
1
Interest rate: The annual interest rate is up 20% based on the benchmark interest rate of the Central Bank of China (
þ
annually
o
monthly).
|
|
2
In case that the Central Bank of China adjusts the benchmark interest rate during the Contract term, the date of interest rate adjustment herein is set according to option
I
. Lender has the right to enforce the adjusted interest rate after the date of interest rate adjustment herein with the increase percentage unchanged.
|
|
3
The two parties shall negotiate for an appropriate interest rate in case that the adjusted benchmark interest rate by the Central Bank of China is floating interest rate or it cancels the benchmark interest rate; in case that the two parties fail to reach on the interest rate terms for the Contract
one
(1) month after the Central Bank of China adjusts the benchmark interest rate, Lender has the right to announce that all the loans hereunder expire earlier than stipulated herein
.
|
2.3
|
Computation of Interest
|
2.3.1
|
Normal interest = interest rate under this Contract X proceeds of the Loan X number of days of use. Number of days of use is calculated from the drawing date to the maturity date.
|
2.3.2
|
The penalty interest of the overdue loan and appropriated loan is calculated based on the amount and the actual number of days overdue or appropriated. If the currency of the loan is Renminbi (RMB), the overdue penalty interest rate is equal to the loan interest rate set forth in this Contract plus 50% of such loan’s interest rate, and the appropriated penalty interest rate is equal to the loan interest rate set forth in this Contract plus 100% of such loan interest rate. If the currency of the loan is a foreign currency, the aforesaid penalty interest rates are equal to the loan interest rate set forth in this Contract plus
(not applicable)
of such loan interest rate.
|
2.4
|
The loan under this Contract uses the second (2
nd
) method mentioned below for payment of interest. On the maturity date, the interest shall be paid together with the principal. The date of payment of interest is the date of the settlement of interest:
|
1.
|
Interest settlement on the 20
th
day of the last month of each quarter; or
|
2.
|
Interest settlement on the 20
th
day of each month.
|
2.5
|
In the event of earlier repayment by the Borrower or loan recalling pre-maturely by Lender, the applicable interest rate is still valid.
|
3
|
Granting and Payment of Loan
|
3.1
|
Borrower is allowed to make multiple withdrawals of proceeds of the loan with total amount withdrawn not to exceed the amount stipulated in Clause 1. And Borrower shall draw the proceeds of the Loan in accordance with the following loan drawing schedule:
|
3.2
|
Unless all of the following conditions are satisfied, Lender has the right to refuse to grant the Loan:
|
1)
|
Borrower has already completed the statutory procedures including obtaining related permit, approval and registration from the government together with other statutory procedures and such permit, approval and registration remain in full force and effect.
|
|
2)
|
The guarantee contract (if any) under this Contract has come into effect and remains in full force and effect. In case that the guarantee contract is a mortgage or pledge contract, the security interest is established and remains in effect.
|
|
3)
|
The business and financial condition of the Borrower does not have any substantial adverse changes; and
|
|
4)
|
Borrower is not in breach of this Contract;
|
5)
|
The repayment method is compliant with the terms and conditions in the Contract
,
and the lender consents to pay as authorized by borrower;
|
3.3
|
The Borrower designates the following account as loan deposit account; the said account is
not
an account set up by the Borrower with the Lender specifically for loan deposit.
|
|
Account Title:
Fuwei Films (Shandong) Co., Ltd.
|
|
Account Number:
377005086900000002273
|
3.4
|
Before each withdrawal, the Borrower process the relevant withdrawal procedures at least
three (3)
bank business days in advance and specify the payment method (entrusting the Lender with the payment or the Borrower itself making the payment); only one of the payment methods can be used for each withdrawal.
|
3.5
|
Entrusting the Lender with making the payment means that the Lender, pursuant to the payment entrustment engagement letter from the Borrower and after the release of the loan pursuant to the provisions herein, makes the payment from the loan proceeds through the Borrower's account directly to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.6
|
The Borrower making the payment at its sole discretion means that, after the Lender releases the loan proceeds into the Borrower's account pursuant to the provisions herein, the Borrower makes the payment from the loan proceeds to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.7
|
The actual loan release date and the amount released must be based on the records in the "Loan Certificate."
|
4
|
Repayment of Loan
|
|
4.1
The Borrower must repay the loan at the maturity date specified in 1.4 herein and according to the following schedule; if the maturity date in the "Loan Certificate" is inconsistent with that specified herein, the record in the "Loan Certificate" shall prevail:
|
Date of Repayment
|
Amount Withdrawn
|
|
7th
day of
May,
2012;
|
Thirty Million
(amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
4.2
|
Borrower shall not repay the Loan prior to the scheduled date without having a written consent from Lender.
|
4.3
|
Borrower assigns the following accounts:
|
5
|
Representation and Guarantee of the Borrower
|
5.1
|
Borrower is an independent entity and has the necessary contractual capacity to perform this Contract and will be liable for its non-performance of its obligations hereunder.
|
5.2
|
The execution and performance of this Contract is the true intention of the Borrower, and the Borrower has all necessary consents, approvals and authorizations to perform its obligations.
|
5.3
|
Borrower operates legally, is able to make profits continually and has legal source of fund for repayment with no material bad credit history. The officers of Borrower have no criminal records.
|
5.4
|
All the documents, reports, data and information provided by the Borrower to the Lender during the execution and performance of this Contract are true, accurate, complete and in full effect, and Borrower has not withheld any information which may affect the evaluation of its financial status and repayment ability. Since the date of the most recent financial statements published, there has been no material adverse effect on the financial position of Borrower.
|
5.5
|
Borrower is neither the shareholder of Guarantor nor the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor, and it does not intend to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor.
|
5.6
|
Borrower promises that 1) notify Lender once it is informed that the real estate pledged as security for the repayment of the loan mortgaged house will be demolished; and 2) in the event that the real estate is demolished with the property right of Borrower transferred, Borrower shall repay the loan pre-maturely, or promptly provide other guarantee approved by the Lender as requested.
|
6
|
Rights and Obligations of Lender
|
6.1
|
Lender has the right to be repaid the principal, receive interest (including compound, overdue and appropriated penalty interest) and the necessary expenses from the Borrower in accordance with this Contract. Lender has the right to exercise any other rights under the relevant laws and regulations or stipulated in this Contract.
|
6.2
|
Lender shall only conduct routine review for documents provided by Borrower and it shall not be liable for any failure of entrusted payment by Borrower caused by incomplete, fault documents.
|
|
Except as otherwise specified under this contract, Lender shall keep all the financial and operation data and information confidential unless compelled by requirements of applicable laws and regulations.
|
6.3
|
Lender shall not be liable for any failure in loan release or payment caused by freezing of the Borrower’s loan release account or
Borrower's trading
partner’s account or any reasons otherwise.
|
7
|
Rights and Obligations of Borrower
|
7.1
|
Borrower shall repay the Loan under this Contract and pay the interest hereunder in accordance with the date, amount, currency set forth in this Contract.
|
7.2
|
Borrower shall not use the proceeds of the Loan for any usage not stipulated in this Contract.
|
7.3
|
Borrower shall be liable for the expenses under this Contract, including but not limited to, expenses for notary service, authentication, evaluation and registration.
|
7.4
|
Borrower shall comply with the operation procedure and the general practice of the Lender and loan application, including but not limited to, facilitating Lender’s examination and supervision on Borrower’s operation status, and providing all the financial statements, or any other data and information requested by Lender, and shall guarantee that such documents, data and information are true, complete and accurate.
|
7.5
|
If any one of the following events occurs, Borrower shall notify the Lender within thirty (30) days and shall not commence such activities unless the Loan and interest under this Contract are repaid completely, or a repayment schedule and guarantee are approved and accepted by the Lender. These are as follows:
|
(1)
|
Selling, donating, renting, lending, assigning, mortgaging, pledging or disposing of all or substantial part of its assets; and
|
|
(2)
|
any potential or actual substantial changes in organization or structure of the Borrower, including but not limited to, its operation, subcontracting, lease, affiliation, company restructuring, joint-stock, merger (consolidation), equity joint-venture (non-equity), spin-off, incorporation of subsidiary, asset assignment, reduction of registered capital, etc.
|
7.6
|
Borrower shall notify the Lender within seven (7) days of occurrence of any of the following events:
|
|
(1)
|
Amendment of the Articles of Association, change of Borrower’s name, change of legal representative, change of domicile, change of address, and change in the scope of its business.
|
|
(2)
|
Borrower, its related party or Guarantor’s intention to file for bankruptcy.
|
|
(3)
|
Borrower’s involvement in any major litigation or arbitration, or any lien or encumbrance is imposed on its assets.
|
|
(4)
|
Borrower’s or its related party’s guarantee to any other third party, which will have a material adverse effect on its financial status and ability to perform its obligations under this Contract.
|
|
(5)
|
Borrower or its related enters into a contract which will have a material adverse effect on its operation and financial status.
|
|
(6)
|
Borrower, its related party or Guarantor (if any) stops its operation, its business terminates, winds up, or its business license is revoked.
|
|
(7)
|
Borrower’s or its related party, major individual investor of Borrower or its related party, Borrower’s or its related party’s legal representative or senior management has committed a criminal offence, is missing, or has been changed.
|
|
(8)
|
Borrower faces substantial hardship in managing its business or any other event which will have an adverse effect on the financial status or ability of the Borrower to repay the Loan.
|
|
(9)
|
Related-party transaction occurs with the total amount at or more than 10% of the most recent audited net assets.
|
|
(10)
|
Borrower will become or is very likely to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor.
|
|
(11)
|
Borrower or its related party is covered by media or causes accidents due to any and all violation of laws and regulations, state policies or industrial standards.
|
|
(12)
|
The controlling relationship between its related party and Borrower has material change.
|
|
(13)
|
There has been material adverse effect on the repayment ability of Borrower or its related party.
|
7.7
|
Upon the occurrence of any change to the guarantee hereunder that is adverse to the Lender’s claims, the Borrower must promptly provide other guarantee approved by the Lender as requested.
|
8
|
Other Terms
|
9
|
Maturity Repayment of the Loan before the Maturity Date
|
9.1
|
The occurrence of any of the following will be considered an “advance maturity event” for this Contract:
|
|
(1)
|
Borrower’s representations and warranties in Section 5 are not true;
|
|
(2)
|
Borrower is in breach of this Contract;
|
|
(3)
|
The events set forth in Section 7.6 have occurred and Lender believes that such event will have a material adverse effect on its rights as a creditor;
|
|
(4)
|
Lender decides at its discretion that Borrower shall repay the proceeds and interests of the loan based on to its current capital return situation;
|
|
(5)
|
Lender may violate or will violate laws by releasing the loan due to changes to current regulatory laws and regulations; or
|
|
(6)
|
Borrower
violates any provisions herein
the Contract with Lender or stipulated in any other contracts entered into with any other third party, or its debt may or has been declared due ahead of maturity date.
|
9.2
|
In the event of any of the aforesaid events, Lender has the right to take one, more or all of the following actions:
|
10
|
Breach of Contract
|
10.1
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, or to use the proceeds of the Loan as set forth in this Contract, Lender has the right to use the overdue penalty interest rate and appropriate penalty interest rate to calculate the interest.
|
10.2
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, Borrower shall be liable for the Lender’s expenses in exercising its creditor’s rights, including litigation cost (arbitration fee), costs of preservation of asset, costs of publication, enforcement costs, legal fees, travel and other expenses.
|
10.3
|
In the event that Borrower avoids Lender’s supervision, fails to repay the principal or the interest of the Loan or avoids the repayment intentionally, Lender has the right to inform relevant government authority and to publish the payment notification on news media.
|
11
|
Withdrawal Instructions
|
11.1
|
In the event that Borrower is overdue in payment in respect of principal, interest, penalty interest, compound interest or other expenses, Lender is authorized to withdraw the money from any other bank accounts of Borrower with Bank of Communications to offset the said outstanding payment.
|
11.2
|
After the aforesaid withdrawal, Lender shall inform the Borrower of such account number, loan contract reference number, promissory note reference number, amount of withdrawal, and the outstanding Loan amount.
|
11.3
|
If the amount of withdrawal is not sufficient to offset the aforesaid payment, the overdue expenses shall be settled first. If the principal and interest are overdue for less than ninety (90) days, the remaining balance shall be first used to settle the overdue interest, penalty interest and compound interest, then shall be used to settle the overdue principal. In the event that the overdue payment or interest is overdue for more than ninety (90) days, the remaining balance shall be used to settle the overdue principal, and then shall be used to settle the overdue interest, penalty interest or compound interest.
|
11.4
|
If the currency of the aforesaid withdrawal amount is different from the currency of the Loan, the exchange rate determined by Bank of Communications on the date of withdrawal shall be used for the currency conversion calculation.
|
12
|
Notification
|
12.1
|
The contact information (including mail address, phone number and fax number) herein provided by Borrower is true. In case of any changes to the information, Borrower shall notify Lender by delivering the written updated information in ordinary post, courier or in person. The updated information shall be in effect upon actual receipt and update in records by Lender.
|
12.2
|
Unless expressly specified otherwise herein, the Lender has the right to use any of the following means for sending notification to the Borrower. The Lender has the right to choose the notification method it deems appropriate and shall not be responsible under any circumstance for any error, miss or delay of the postal mail, fax, telephone or any other communication system. If the Lender chooses several notification methods, the notification will be considered served on the basis of the faster method. The methods include:
|
13
|
Information Disclosure and Non-Disclosure
|
13.1
|
The Lender must have the responsibility to keep confidential the Borrower’s commercial secrets and other information and documents which carry written legends requiring confidentiality; however the following circumstances are excepted:
|
13.2
|
Borrower agrees that Lender can use or disclosure all the information and materials of Borrower with respect to the loan in case of the following event and it shall be liable for any arising from that:
|
14
|
Applicable Law and Dispute Resolution
|
15
|
Miscellaneous
|
15.1
|
Borrower consents that Lender can search for and keep its credit related information for the purposes of loan application and post-loan-release management.
|
15.2
|
Lender shall not be liable for failing to release the loan or make payment caused by force majeure, communication or internet connection failure or systematic trouble but it shall notify Borrower promptly.
|
15.3
|
With
drawal application template and signed withdraw application, loan certificate
and other instruments, materials confirmed by both parties under this Contract shall constitute the entire agreement between Lender and Borrower of the Contract.
|
15.4
|
The terms “related-party”, “related-party transaction” and “primary individual investor” herein are in compliance with those defined in
Related-Party Disclosures
of Chapter 36
in The Accounting Standards for Business Enterprises
(CK No. [2006] 3) and its amendments promulgated by Ministry of Finance of PRC.
|
15.5
|
This Contract comes into effect upon both Parties’ signing and stamping on this contract.
|
15.6
|
This Contract is executed in
four (4)
counterparts. Each of the Parties and their Guarantors (if any) shall keep one counterpart.
|
May 25, 2011
|
May 25, 2011
|
Borrower (seal):
|
Lender (seal):
|
Fuwei Films (Shandong) Co., Ltd.
|
Bank of Communications
|
Legal Representative or Authorized Person
|
Responsible Person or Authorized Person
|
Xiaoan He
|
Ankui Liu
|
(signature or seal)
|
(signature or seal)
|
Borrower:
|
Fuwei Films (Shandong) Co., Ltd.
|
Legal Representative:
|
Xiaoan He
|
Legal Address:
|
Hi-Tech Development Zone, No. 387 Dong Ming Road, Weifang
|
Correspondence Address:
|
Same as above
|
Lender:
|
Weifang Branch, Bank of Communications
|
Responsible Person:
|
Ankui Liu
|
Correspondence Address:
|
No. 358 Dong Feng, Dong Street, Weifang
|
1
|
Loan
|
1.1
|
Currency: Renminbi (RMB)
|
|
|
1.2
|
Amount: 35,000,000
|
|
|
1.3
|
The proceeds of the Loan under this Contract shall be used for
procurement of raw materials
.
|
|
|
1.4
|
Loan Period: Commencing from the date of first loan drawing and expiring on May14, 2012 with a term of no more thantwelve (12) months.
|
2
|
Interest Rate and Computation of Interest
|
|
|
2.1
|
1
Interest rate: The annual interest rate is up 20% based on the benchmark interest rate of the Central Bank of China (
þ
annually
o
monthly).
|
|
2
In case that the Central Bank of China adjusts the benchmark interest rate during the Contract term, the date of interest rate adjustment herein is set according to option
I
. Lender has the right to enforce the adjusted interest rate after the date of interest rate adjustment herein with the increase percentage unchanged.
|
|
3
The two parties shall negotiate for an appropriate interest rate in case that the adjusted benchmark interest rate by the Central Bank of China is floating interest rate or it cancels the benchmark interest rate; in case that the two parties fail to reach on the interest rate terms for the Contract
one
(1) month after the Central Bank of China adjusts the benchmark interest rate, Lender has the right to announce that all the loans hereunder expire earlier than stipulated herein.
|
2.2
|
Daily interest rate is monthly interest rate divided by thirty (30) days while the monthly interest rate is equal to annual interest rate divided by twelve (12) months.
|
2.3
|
Computation of Interest
|
2.3.1
|
Normal interest = interest rate under this Contract X proceeds of the Loan X number of days of use. Number of days of use is calculated from the drawing date to the maturity date.
|
2.3.2
|
The penalty interest of the overdue loan and appropriated loan is calculated based on the amount and the actual number of days overdue or appropriated. If the currency of the loan is Renminbi (RMB), the overdue penalty interest rate is equal to the loan interest rate set forth in this Contract plus 50% of such loan’s interest rate, and the appropriated penalty interest rate is equal to the loan interest rate set forth in this Contract plus 100% of such loan interest rate. If the currency of the loan is a foreign currency, the aforesaid penalty interest rates are equal to the loan interest rate set forth in this Contract plus
(not applicable)
of such loan interest rate.
|
2.4
|
The loan under this Contract uses the second (2
nd
) method mentioned below for payment of interest. On the maturity date, the interest shall be paid together with the principal. The date of payment of interest is the date of the settlement of interest:
|
1.
|
Interest settlement on the 20
th
day of the last month of each quarter; or
|
2.
|
Interest settlement on the 20
th
day of each month.
|
2.5
|
In the event of earlier repayment by the Borrower or loan recalling pre-maturely by Lender, the applicable interestrate is still valid.
|
3
|
Granting and Payment of Loan
|
3.1
|
Borrower is allowed to make multiplewithdrawals of proceeds of the loanwith total amount withdrawnnot to exceed the amount stipulated in Clause 1. And Borrower shall draw the proceeds of the Loan in accordance with the following loan drawing schedule:
|
3.2
|
Unless all of the following conditions are satisfied, Lender has the right to refuse to grant the Loan:
|
1)
|
Borrower has already completed the statutory procedures including obtaining related permit, approval and registration from the government together with other statutory procedures and such permit, approval and registration remain in full force and effect.
|
2)
|
The guarantee contract (if any) under this Contract has come into effect and remains in full force and effect. In case that the guarantee contract is a mortgage or pledge contract, the security interest is established and remains in effect.
|
3)
|
The business and financial condition of the Borrower does not have any substantial adverse changes; and
|
4)
|
Borrower is not in breach of this Contract;
|
5)
|
The repayment method is compliant with the terms and conditions in the Contract
,
and the lender consents to pay as authorized by borrower;
|
6)
|
For loan withdrawal in foreign currency, Borrower has opened an account according to the requirements of foreign exchange administration and provided support documents for the loanwhich reflectcompliance with foreign exchange administration including but not limited to certificationfor purposes of the loan in foreign currency, registration or verification instruments;
|
7)
|
Borrower
has designated a capital return account as requested by the Lender and executed account management agreement
.
|
3.3
|
The Borrower designates the following account as loan deposit account; the said account is
not
an account set up by the Borrower with the Lender specifically for loan deposit.
|
3.4
|
Before each withdrawal, the Borrower process the relevant withdrawal procedures at least
three (3)
bank business days in advance and specify the payment method (entrusting the Lender with the payment or the Borrower itself making the payment); only one of the payment methods can be used for each withdrawal.
|
3.5
|
Entrusting the Lender with making the payment means that the Lender, pursuant to the payment entrustment engagement letter from the Borrower and after the release of the loan pursuant to the provisions herein, makes the payment from the loan proceeds through the Borrower's account directly to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
________________________________________________________________
|
________________________________________________________________
|
3.6
|
The Borrower making the payment at its sole discretion means that, after the Lender releases the loan proceeds into the Borrower's account pursuant to the provisions herein, the Borrower makes the payment from the loan proceeds to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.7
|
The actual loan release date and the amount released must be based on the records in the "Loan Certificate."
|
4
|
Repayment of Loan
|
4.1
|
The Borrower must repay the loan at the maturity date specified in 1.4 herein and according to the following schedule; if the maturity date in the "Loan Certificate" is inconsistent with that specified herein, the record in the "Loan Certificate" shall prevail:
|
Date of Repayment
|
Amount Withdrawn
|
|
14th
day of
May
,
2012;
|
Thirty-Five Million
(amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
4.2
|
Borrower shall not repay the Loan prior to the scheduled date without having a written consent from Lender.
|
4.3
|
Borrower assigns the following accounts:
|
5
|
Representation and Guarantee of the Borrower
|
5.1
|
Borrower is an independent entity and has the necessary contractual capacity to perform this Contract and will be liable for its non-performance of its obligations hereunder.
|
5.2
|
The execution and performance of this Contract is the true intention of the Borrower, and the Borrower has all necessary consents, approvals and authorizations to perform its obligations.
|
5.3
|
Borrower operates legally, is able to make profits continually and has legal sourceof fund for repayment with no material bad credit history. The officers of Borrower have no criminal records.
|
5.4
|
All the documents, reports, data and information provided by the Borrower to the Lender during the execution and performance of this Contract are true, accurate, complete and in full effect, and Borrower has not withheld any information which may affect the evaluation of its financial status and repayment ability.Since the date of the most recent financial statements published, there has been no material adverse effect on the financial position of Borrower.
|
5.5
|
Borrower is neither the shareholder of Guarantor nor the “actual controller” as defined in
Company Lawof the People’s Republic of China
of Guarantor, and it does not intend to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor.
|
5.6
|
Borrowerpromises that 1) notify Lender once it is informed that thereal estate pledged as security for the repayment of the loan mortgaged house will be demolished; and 2) in the event that the real estate is demolished with the property right of Borrower transferred, Borrower shall repay the loan pre-maturely, or promptly provide other guarantee approved by the Lender as requested.
|
6
|
Rights and Obligations of Lender
|
6.1
|
Lender has the right to be repaid the principal, receive interest (including compound, overdue and appropriated penalty interest) and the necessary expenses from the Borrower in accordance with this Contract. Lender has the right to exercise any other rights under the relevant laws and regulations or stipulated in this Contract.
|
6.2
|
Lender shall only conduct routine review for documents provided by Borrower and it shall not be liable for any failure of entrusted payment by Borrower caused by incomplete, fault documents.
|
|
Except as otherwise specified under this contract, Lender shall keep all the financial and operation data and information confidential unless compelled by requirements of applicable laws and regulations.
|
6.3
|
Lender shall not be liable for any failure in loan release or payment caused by freezing of the Borrower’s loan release account or
Borrower's trading
partner’s account or any reasons otherwise.
|
7
|
Rights and Obligations of Borrower
|
7.1
|
Borrower shall repay the Loan under this Contract and pay the interest hereunder in accordance with the date, amount, currency set forth in this Contract.
|
7.2
|
Borrower shall not use the proceeds of the Loan for any usage not stipulated in this Contract.
|
7.3
|
Borrower shall be liable for the expenses under this Contract, including but not limited to, expenses for notary service, authentication, evaluation and registration.
|
7.4
|
Borrower shall comply with the operation procedure and the general practice of the Lender and loan application, including but not limited to, facilitating Lender’s examination and supervision on Borrower’s operation status, and providing all the financial statements, or any other data and information requested by Lender, and shall guarantee that such documents, data and information are true, complete and accurate.
|
7.5
|
If any one of the following events occurs, Borrower shall notify the Lender within thirty (30) days and shall not commence such activities unless the Loan and interest under this Contract are repaid completely, or a repayment schedule and guarantee are approved and accepted by the Lender. These are as follows:
|
(1)
|
Selling, donating, renting, lending, assigning, mortgaging, pledging or disposing of all or substantial part of its assets; and
|
(2)
|
any potential or actual substantial changes in organization or structure of the Borrower, including but not limited to, its operation, subcontracting, lease, affiliation, company restructuring, joint-stock, merger (consolidation), equity joint-venture (non-equity), spin-off, incorporation of subsidiary, asset assignment, reduction of registered capital, etc.
|
7.6
|
Borrower shall notify the Lender within seven (7) days of occurrence of any of the following events:
|
(1)
|
Amendment of the Articles of Association, change of Borrower’s name, change of legal representative, change of domicile, change of address, and change in the scope of its business.
|
(2)
|
Borrower, its related party or Guarantor’s intention to file for bankruptcy.
|
(3)
|
Borrower’s involvement in any major litigation or arbitration, or any lien or encumbrance is imposed on its assets.
|
(4)
|
Borrower’s or its related party’s guarantee to any other third party, which will have a material adverse effect on its financial status and ability to perform its obligations under this Contract.
|
(5)
|
Borrower or its relatedenters into a contract which will have a material adverse effect on its operation and financial status.
|
(6)
|
Borrower, its related party or Guarantor (if any) stops its operation, its business terminates, winds up, or its business license is revoked.
|
(7)
|
Borrower’s or its related party, major individual investor of Borrower or its related party, Borrower’s or its related party’s legal representativeor senior management has committed a criminal offence, is missing, or has been changed.
|
(8)
|
Borrower faces substantial hardship in managing its business or any other event which will have an adverse effect on the financial status or ability of the Borrower to repay the Loan.
|
(9)
|
Related-party transaction occurs with the total amount at or more than 10% of the most recent audited net assets.
|
(10)
|
Borrower will become or is very likely to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor.
|
(11)
|
Borrower or its related party is covered by media or causes accidents due to any and all violation of laws and regulations, state policies or industrial standards.
|
(12)
|
The controlling relationship between its related party and Borrower has material change.
|
(13)
|
There has been material adverse effect on the repayment ability of Borrower or its related party.
|
7.7
|
Upon the occurrence of any change to the guarantee hereunder that is adverse to the Lender’s claims, the Borrower must promptly provide other guarantee approved by the Lender as requested.
|
8
|
Other Terms
|
9
|
Maturity Repayment of the Loan before the Maturity Date
|
9.1
|
The occurrence of any of the following will be considered an “advance maturity event” for this Contract:
|
(1)
|
Borrower’s representations and warranties in Section 5 are not true;
|
(2)
|
Borrower is in breach of this Contract;
|
(3)
|
The events set forth in Section 7.6 have occurred and Lender believes that such event will have a material adverse effect on its rights as a creditor;
|
(4)
|
Lender decides at its discretion that Borrower shall repay the proceeds and interests of the
loan based on to its current capital return situation;
|
(5)
|
Lender may violate or will violate laws by releasing the loan due to changes tocurrent regulatory laws and regulations; or
|
(6)
|
Borrower
violates any provisions herein
the Contract with Lender or stipulated in any other contracts entered into with any other third party, or its debt may or has been declared due ahead of maturity date.
|
9.2
|
In the event of any of the aforesaid events, Lender has the right to take one, more or all of the following actions:
|
(1)
|
Suspend the release of the remainder of the loan;
|
(2)
|
Suspend the payment for the withdrawn but yet not allocated loan;
|
(3)
|
request the Borrower to enter into supplementary agreement with respect to loan release terms and payment terms;
|
(4)
|
request the Borrower to change its payment method in accordance with Lender’s requirements; and
|
(5)
|
unilaterally declare due of the released loan herein and ask the Borrower to repay all its proceeds and interests.
|
10
|
Breach of Contract
|
10.1
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, or to use the proceeds of the Loan as set forth in this Contract, Lender has the right to use the overdue penalty interest rate and appropriate penalty interest rate to calculate the interest.
|
10.2
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, Borrower shall be liable for the Lender’s expenses in exercising its creditor’s rights, including litigation cost (arbitration fee), costs of preservation of asset, costs of publication, enforcement costs, legal fees, travel and other expenses.
|
10.3
|
In the event that Borrower avoids Lender’s supervision, fails to repay the principal or the interest of the Loan or avoids the repayment intentionally, Lender has the right to inform relevant government authority and to publish the payment notification on news media.
|
11
|
Withdrawal Instructions
|
11.1
|
In the event that Borrower is overdue in payment in respect of principal, interest, penalty interest, compound interest or other expenses, Lender is authorized to withdraw the money from any other bank accounts of Borrower with Bank of Communications to offset the said outstanding payment.
|
11.2
|
After the aforesaid withdrawal, Lender shall inform the Borrower of such account number, loan contract reference number, promissory note reference number, amount of withdrawal, and the outstanding Loan amount.
|
11.3
|
If the amount of withdrawal is not sufficient to offset the aforesaid payment, the overdue expenses shall be settled first. If the principal and interest are overdue for less than ninety (90) days, the remaining balance shall be first used to settle the overdue interest, penalty interest and compound interest, then shall be used to settle the overdue principal. In the event that the overdue payment or interest is overdue for more than ninety (90) days, the remaining balance shall be used to settle the overdue principal, and then shall be used to settle the overdue interest, penalty interest or compound interest.
|
11.4
|
If the currency of the aforesaid withdrawal amount is different from the currency of the Loan, the exchange rate determined by Bank of Communications on the date of withdrawal shall be used for the currency conversion calculation.
|
12
|
Notification
|
12.1
|
The contact information (including mail address, phone number and fax number) herein provided by Borrower is true. In case of any changes to the information, Borrower shall notify Lender by delivering the written updated information in ordinary post, courier or in person. The updated information shall be in effect upon actual receipt and update in records by Lender.
|
12.2
|
Unless expressly specified otherwise herein, the Lender has the right to use any of the following means for sending notification to the Borrower. The Lender has the right to choose the notification method it deems appropriate and shall not be responsible under any circumstance for any error, miss or delay of the postal mail, fax, telephone or any other communication system. If the Lender chooses several notification methods, the notification will be considered served on the basis of the faster method. The methods include:
|
13
|
Information Disclosure and Non-Disclosure
|
13.1
|
The Lender must have the responsibility to keep confidential the Borrower’s commercial secrets and other information and documents which carry written legends requiring confidentiality; however the following circumstances are excepted:
|
13.2
|
Borrower agrees that Lender can use or disclosure all the information and materials of Borrower with respect to the loan in case of the following event and it shall be liable for any arising from that:
|
14
|
Applicable Law and Dispute Resolution
|
15
|
Miscellaneous
|
15.1
|
Borrower consents that Lender can search for and keep its credit related information for the purposes of loan applicationand post-loan-release management.
|
15.2
|
Lender shall not be liable for failing to release the loan or make payment caused by force majeure, communication or internet connection failure or systematictrouble but it shall notify Borrower promptly.
|
15.3
|
With
drawal application template and signed withdraw application,loan certificate
and other instruments, materials confirmed by both parties under this Contract shall constitute the entire agreement between Lender and Borrower of the Contract.
|
15.4
|
The
terms “related-party”, “related-party transaction” and “primary individual investor” herein are in compliance with those defined in
Related-Party Disclosures
of Chapter 36
in The Accounting Standards for Business Enterprises
(CK No. [2006] 3) and its amendmentspromulgated by Ministry of Finance of PRC.
|
15.5
|
This Contract comes into effect upon both Parties’ signing and stamping on this contract.
|
15.6
|
This Contract is executed in
four (4)
counterparts. Each of the Parties and their Guarantors (if any) shall keep one counterpart.
|
May 25, 2011
|
May 25, 2011
|
Borrower (seal):
|
Lender (seal):
|
Fuwei Films (Shandong) Co., Ltd.
|
Bank of Communications
|
Legal Representative or Authorized Person
|
Responsible Person or Authorized Person
|
Xiaoan He
|
Ankui Liu
|
(signature or seal)
|
(signature or seal)
|
Borrower:
|
Fuwei Films (Shandong) Co., Ltd.
|
Legal Representative:
|
Xiaoan He
|
Legal Address:
|
Hi-Tech Development Zone, No. 387 Dong Ming Road, Weifang
|
Correspondence Address:
|
Same as above
|
Lender:
|
Weifang Branch, Bank of Communications
|
Responsible Person:
|
Ankui Liu
|
Correspondence Address:
|
No. 358 Dong Feng, Dong Street, Weifang
|
1
|
Loan
|
1.1
|
Currency: Renminbi (RMB)
|
1.2
|
Amount: 35,000,000
|
1.3
|
The proceeds of the Loan under this Contract shall be used for
procurement of raw materials
.
|
1.4
|
Loan Period: Commencing from the date of first loan drawing and expiring on
May21
, 2012 with a term of no more than
twelve (12)
months.
|
2
|
Interest Rate and Computation of Interest
|
2.1
|
1
Interest rate: The annual interest rate is up 20% based on the benchmark interest rate of the Central Bank of China (
þ
annually
o
monthly).
|
2.2
|
Daily interest rate is monthly interest rate divided by thirty (30) days while the monthly interest rate is equal to annual interest rate divided by twelve (12) months.
|
2.3
|
Computation of Interest
|
2.3.1
|
Normal interest = interest rate under this Contract X proceeds of the Loan X number of days of use. Number of days of use is calculated from the drawing date to the maturity date.
|
2.3.2
|
The penalty interest of the overdue loan and appropriated loan is calculated based on the amount and the actual number of days overdue or appropriated. If the currency of the loan is Renminbi (RMB), the overdue penalty interest rate is equal to the loan interest rate set forth in this Contract plus 50% of such loan’s interest rate, and the appropriated penalty interest rate is equal to the loan interest rate set forth in this Contract plus 100% of such loan interest rate. If the currency of the loan is a foreign currency, the aforesaid penalty interest rates are equal to the loan interest rate set forth in this Contract plus
(not applicable)
of such loan interest rate.
|
2.4
|
The loan under this Contract uses the second (2
nd
) method mentioned below for payment of interest. On the maturity date, the interest shall be paid together with the principal. The date of payment of interest is the date of the settlement of interest:
|
1.
|
Interest settlement on the 20
th
day of the last month of each quarter; or
|
2.
|
Interest settlement on the 20
th
day of each month.
|
2.5
|
In the event of earlier repayment by the Borrower or loan recalling pre-maturely by Lender, the applicable interestrate is still valid.
|
3
|
Granting and Payment of Loan
|
3.1
|
Borrower is allowed to make multiplewithdrawals of proceeds of the loanwith total amount withdrawnnot to exceed the amount stipulated in Clause 1. And Borrower shall draw the proceeds of the Loan in accordance with the following loan drawing schedule:
|
3.2
|
Unless all of the following conditions are satisfied, Lender has the right to refuse to grant the Loan:
|
1)
|
Borrower has already completed the statutory procedures including obtaining related permit, approval and registration from the government together with other statutory procedures and such permit, approval and registration remain in full force and effect.
|
2)
|
The guarantee contract (if any) under this Contract has come into effect and remains in full force and effect. In case that the guarantee contract is a mortgage or pledge contract, the security interest is established and remains in effect.
|
3)
|
The business and financial condition of the Borrower does not have any substantial adverse changes; and
|
4)
|
Borrower is not in breach of this Contract;
|
5)
|
The repayment method is compliant with the terms and conditions in the Contract
,
and the lender consents to pay as authorized by borrower;
|
6)
|
For loan withdrawal in foreign currency, Borrower has opened an account according to the requirements of foreign exchange administration and provided support documents for the loanwhich reflectcompliance with foreign exchange administration including but not limited to certificationfor purposes of the loan in foreign currency, registration or verification instruments;
|
7)
|
Borrower
has designated a capital return account as requested by the Lender and executed account management agreement
.
|
3.3
|
The Borrower designates the following account as loan deposit account; the said account is
not
an account set up by the Borrower with the Lender specifically for loan deposit.
|
3.4
|
Before each withdrawal, the Borrower process the relevant withdrawal procedures at least
three (3)
bank business days in advance and specify the payment method (entrusting the Lender with the payment or the Borrower itself making the payment); only one of the payment methods can be used for each withdrawal.
|
3.5
|
Entrusting the Lender with making the payment means that the Lender, pursuant to the payment entrustment engagement letter from the Borrower and after the release of the loan pursuant to the provisions herein, makes the payment from the loan proceeds through the Borrower's account directly to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.6
|
The Borrower making the payment at its sole discretion means that, after the Lender releases the loan proceeds into the Borrower's account pursuant to the provisions herein, the Borrower makes the payment from the loan proceeds to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.7
|
The actual loan release date and the amount released must be based on the records in the "Loan Certificate."
|
4
|
Repayment of Loan
|
4.1
|
The Borrower must repay the loan at the maturity date specified in 1.4 herein and according to the following schedule; if the maturity date in the "Loan Certificate" is inconsistent with that specified herein, the record in the "Loan Certificate" shall prevail:
|
Date of Repayment
|
Amount Withdrawn
|
|
21th
day of
May
,
2012;
|
Thirty-Five Million
(amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
|
_______________ (amount in
Capital Letters
)
|
4.2
|
Borrower shall not repay the Loan prior to the scheduled date without having a written consent from Lender.
|
4.3
|
Borrower assigns the following accounts:
|
5
|
Representation and Guarantee of the Borrower
|
5.1
|
Borrower is an independent entity and has the necessary contractual capacity to perform this Contract and will be liable for its non-performance of its obligations hereunder.
|
5.2
|
The execution and performance of this Contract is the true intention of the Borrower, and the Borrower has all necessary consents, approvals and authorizations to perform its obligations.
|
5.3
|
Borrower operates legally, is able to make profits continually and has legal sourceof fund for repayment with no material bad credit history. The officers of Borrower have no criminal records.
|
5.4
|
All the documents, reports, data and information provided by the Borrower to the Lender during the execution and performance of this Contract are true, accurate, complete and in full effect, and Borrower has not withheld any information which may affect the evaluation of its financial status and repayment ability.Since the date of the most recent financial statements published, there has been no material adverse effect on the financial position of Borrower.
|
5.5
|
Borrower is neither the shareholder of Guarantor nor the “actual controller” as defined in
Company Lawof the People’s Republic of China
of Guarantor, and it does not intend to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor.
|
5.6
|
Borrowerpromises that 1) notify Lender once it is informed that thereal estate pledged as security for the repayment of the loan mortgaged house will be demolished; and 2) in the event that the real estate is demolished with the property right of Borrower transferred, Borrower shall repay the loan pre-maturely, or promptly provide other guarantee approved by the Lender as requested.
|
6
|
Rights and Obligations of Lender
|
6.1
|
Lender has the right to be repaid the principal, receive interest (including compound, overdue and appropriated penalty interest) and the necessary expenses from the Borrower in accordance with this Contract. Lender has the right to exercise any other rights under the relevant laws and regulations or stipulated in this Contract.
|
6.2
|
Lender shall only conduct routine review for documents provided by Borrower and it shall not be liable for any failure of entrusted payment by Borrower caused by incomplete, fault documents.
|
6.3
|
Lender shall not be liable for any failure in loan release or payment caused by freezing of the Borrower’s loan release account or
Borrower's trading
partner’s account or any reasons otherwise.
|
7
|
Rights and Obligations of Borrower
|
|
|
7.1
|
Borrower shall repay the Loan under this Contract and pay the interest hereunder in accordance with the date, amount, currency set forth in this Contract.
|
|
|
7.2
|
Borrower shall not use the proceeds of the Loan for any usage not stipulated in this Contract.
|
|
|
7.3
|
Borrower shall be liable for the expenses under this Contract, including but not limited to, expenses for notary service, authentication, evaluation and registration.
|
|
|
7.4
|
Borrower shall comply with the operation procedure and the general practice of the Lender and loan application, including but not limited to, facilitating Lender’s examination and supervision on Borrower’s operation status, and providing all the financial statements, or any other data and information requested by Lender, and shall guarantee that such documents, data and information are true, complete and accurate.
|
|
|
7.5
|
If any one of the following events occurs, Borrower shall notify the Lender within thirty (30) days and shall not commence such activities unless the Loan and interest under this Contract are repaid completely, or a repayment schedule and guarantee are approved and accepted by the Lender. These are as follows:
|
|
(1)
|
Selling, donating, renting, lending, assigning, mortgaging, pledging or disposing of all or substantial part of its assets; and
|
|
(2)
|
any potential or actual substantial changes in organization or structure of the Borrower, including but not limited to, its operation, subcontracting, lease, affiliation, company restructuring, joint-stock, merger (consolidation), equity joint-venture (non-equity), spin-off, incorporation of subsidiary, asset assignment, reduction of registered capital, etc.
|
7.6
|
Borrower shall notify the Lender within seven (7) days of occurrence of any of the following events:
|
|
(1)
|
Amendment of the Articles of Association, change of Borrower’s name, change of legal representative, change of domicile, change of address, and change in the scope of its business.
|
|
(2)
|
Borrower, its related party or Guarantor’s intention to file for bankruptcy.
|
|
(3)
|
Borrower’s involvement in any major litigation or arbitration, or any lien or encumbrance is imposed on its assets.
|
|
(4)
|
Borrower’s or its related party’s guarantee to any other third party, which will have a material adverse effect on its financial status and ability to perform its obligations under this Contract.
|
|
(5)
|
Borrower or its relatedenters into a contract which will have a material adverse effect on its operation and financial status.
|
|
(6)
|
Borrower, its related party or Guarantor (if any) stops its operation, its business terminates, winds up, or its business license is revoked.
|
|
(7)
|
Borrower’s or its related party, major individual investor of Borrower or its related party, Borrower’s or its related party’s legal representativeor senior management has committed a criminal offence, is missing, or has been changed.
|
|
(8)
|
Borrower faces substantial hardship in managing its business or any other event which will have an adverse effect on the financial status or ability of the Borrower to repay the Loan.
|
|
(9)
|
Related-party transaction occurs with the total amount at or more than 10% of the most recent audited net assets.
|
|
(10)
|
Borrower will become or is very likely to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor.
|
|
(11)
|
Borrower or its related party is covered by media or causes accidents due to any and all violation of laws and regulations, state policies or industrial standards.
|
|
(12)
|
The controlling relationship between its related party and Borrower has material change.
|
|
(13)
|
There has been material adverse effect on the repayment ability of Borrower or its related party.
|
7.7
|
Upon the occurrence of any change to the guarantee hereunder that is adverse to the Lender’s claims, the Borrower must promptly provide other guarantee approved by the Lender as requested.
|
8
|
Other Terms
|
9
|
Maturity Repayment of the Loan before the Maturity Date
|
9.1
|
The occurrence of any of the following will be considered an “advance maturity event” for this Contract:
|
|
(1)
|
Borrower’s representations and warranties in Section 5 are not true;
|
|
(2)
|
Borrower is in breach of this Contract;
|
|
(3)
|
The events set forth in Section 7.6 have occurred and Lender believes that such event will have a material adverse effect on its rights as a creditor;
|
|
(4)
|
Lender decides at its discretion that Borrower shall repay the proceeds and interests of the loan based on to its current capital return situation;
|
|
(5)
|
Lender may violate or will violate laws by releasing the loan due to changes tocurrent regulatory laws and regulations; or
|
(6)
|
Borrower
violates any provisions herein
the Contract with Lender or stipulated in any other contracts entered into with any other third party, or its debt may or has been declared due ahead of maturity date.
|
9.2
|
In the event of any of the aforesaid events, Lender has the right to take one, more or all of the following actions:
|
(1)
|
Suspend the release of the remainder of the loan;
|
(2)
|
Suspend the payment for the withdrawn but yet not allocated loan;
|
(3)
|
request the Borrower to enter into supplementary agreement with respect to loan release terms and payment terms;
|
(4)
|
request the Borrower to change its payment method in accordance with Lender’s requirements; and
|
(5)
|
unilaterally declare due of the released loan herein and ask the Borrower to repay all its proceeds and interests.
|
10
|
Breach of Contract
|
|
|
10.1
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, or to use the proceeds of the Loan as set forth in this Contract, Lender has the right to use the overdue penalty interest rate and appropriate penalty interest rate to calculate the interest.
|
|
|
10.2
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, Borrower shall be liable for the Lender’s expenses in exercising its creditor’s rights, including litigation cost (arbitration fee), costs of preservation of asset, costs of publication, enforcement costs, legal fees, travel and other expenses.
|
10.3
|
In the event that Borrower avoids Lender’s supervision, fails to repay the principal or the interest of the Loan or avoids the repayment intentionally, Lender has the right to inform relevant government authority and to publish the payment notification on news media.
|
|
|
11
|
Withdrawal Instructions
|
|
|
11.1
|
In the event that Borrower is overdue in payment in respect of principal, interest, penalty interest, compound interest or other expenses, Lender is authorized to withdraw the money from any other bank accounts of Borrower with Bank of Communications tooffset the said outstanding payment.
|
11.2
|
After the aforesaid withdrawal, Lender shall inform the Borrower of such account number, loan contract reference number, promissory note reference number, amount of withdrawal, and the outstanding Loan amount.
|
|
|
11.3
|
If the amount of withdrawal is not sufficient to offset the aforesaid payment, the overdue expenses shall be settled first. If the principal and interest are overdue for less than ninety (90) days, the remaining balance shall be first used to settle the overdue interest, penalty interest and compound interest, then shall be used to settle the overdue principal. In the event that the overdue payment or interest is overdue for more than ninety (90) days, the remaining balance shall be used to settle the overdue principal, and then shall be used to settle the overdue interest, penalty interest or compound interest.
|
|
|
11.4
|
If the currency of the aforesaid withdrawal amount is different from the currency of the Loan, the exchange rate determined by Bank of Communications on the date of withdrawal shall be used for the currency conversion calculation.
|
12
|
Notification
|
12.1
|
The contact information (including mail address, phone number and fax number) herein provided by Borrower is true. In case of any changes to the information, Borrower shall notify Lender by delivering the written updated information in ordinary post, courier or in person. The updated information shall be in effect upon actual receipt and update in records by Lender.
|
12.2
|
Unless expressly specified otherwise herein, the Lender has the right to use any of the following means for sending notification to the Borrower. The Lender has the right to choose the notification method it deems appropriate and shall not be responsible under any circumstance for any error, miss or delay of the postal mail, fax, telephone or any other communication system. If the Lender chooses several notification methods, the notification will be considered served on the basis of the faster method. The methods include:
|
13
|
Information Disclosure and Non-Disclosure
|
13.1
|
The Lender must have the responsibility to keep confidential the Borrower’s commercial secrets and other information and documents which carry written legends requiring confidentiality; however the following circumstances are excepted:
|
13.2
|
Borrower agrees that Lender can use or disclosure all the information and materials of Borrower with respect to the loan in case of the following event and it shall be liable for any arising from that:
|
14
|
Applicable Law and Dispute Resolution
|
15
|
Miscellaneous
|
15.1
|
Borrower consents that Lender can search for and keep its credit related information for the purposes of loan applicationand post-loan-release management.
|
15.2
|
Lender shall not be liable for failing to release the loan or make payment caused by force majeure, communication or internet connection failure or systematictrouble but it shall notify Borrower promptly.
|
15.3
|
With
drawal application template and signed withdraw application,loan certificate
and other instruments, materials confirmed by both parties under this Contract shall constitute the entire agreement between Lender and Borrower of the Contract.
|
15.4
|
The terms “related-party”, “related-party transaction” and “primary individual investor” herein are in compliance with those defined in
Related-Party Disclosures
of Chapter 36
in The Accounting Standards for Business Enterprises
(CK No. [2006] 3) and its amendmentspromulgated by Ministry of Finance of PRC.
|
15.5
|
This Contract comes into effect upon both Parties’ signing and stamping on this contract.
|
15.6
|
This Contract is executed in
four (4)
counterparts. Each of the Parties and their Guarantors (if any) shall keep one counterpart.
|
May 25, 2011
|
May 25, 2011
|
Borrower (seal):
|
Lender (seal):
|
Fuwei Films (Shandong) Co., Ltd.
|
Bank of Communications
|
Legal Representative or Authorized Person
|
Responsible Person or Authorized Person
|
Xiaoan He
|
Ankui Liu
|
(signature or seal)
|
(signature or seal)
|
Borrower:
|
Fuwei Films (Shandong) Co., Ltd.
|
Legal Representative:
|
Xiaoan He
|
Legal Address:
|
Hi-Tech Development Zone, No. 387 Dong Ming Road, Weifang
|
Correspondence Address:
|
Same as above
|
Lender:
|
Weifang Branch, Bank of Communications
|
Responsible Person:
|
Ankui Liu
|
Correspondence Address:
|
No. 358 Dong Feng, Dong Street, Weifang
|
1
|
Loan
|
1.1
|
Currency: Renminbi (RMB)
|
1.2
|
Amount: 30,000,000
|
1.3
|
The proceeds of the Loan under this Contract shall be used for
procurement of raw materials
.
|
1.4
|
Loan Period: Commencing from the date of first loan drawing and expiring on
April17
, 2012 with a term of no more than
twelve (12)
months.
|
2
|
Interest Rate and Computation of Interest
|
2.1
|
1
Interest rate: The annual interest rate is up 20% based on the benchmark interest rate of the Central Bank of China (
þ
annually
o
monthly).
|
2.2
|
Daily interest rate is monthly interest rate divided by thirty (30) days while the monthly interest rate is equal to annual interest rate divided by twelve (12) months.
|
2.3
|
Computation of Interest
|
2.3.1
|
Normal interest = interest rate under this Contract X proceeds of the Loan X number of days of use. Number of days of use is calculated from the drawing date to the maturity date.
|
2.3.2
|
The penalty interest of the overdue loan and appropriated loan is calculated based on the amount and the actual number of days overdue or appropriated. If the currency of the loan is Renminbi (RMB), the overdue penalty interest rate is equal to the loan interest rate set forth in this Contract plus 50% of such loan’s interest rate, and the appropriated penalty interest rate is equal to the loan interest rate set forth in this Contract plus 100% of such loan interest rate. If the currency of the loan is a foreign currency, the aforesaid penalty interest rates are equal to the loan interest rate set forth in this Contract plus
(not applicable)
of such loan interest rate.
|
2.4
|
The loan under this Contract uses the second (2
nd
) method mentioned below for payment of interest. On the maturity date, the interest shall be paid together with the principal. The date of payment of interest is the date of the settlement of interest:
|
|
1.
|
Interest settlement on the 20
th
day of the last month of each quarter; or
|
|
2.
|
Interest settlement on the 20
th
day of each month.
|
3
|
Granting and Payment of Loan
|
3.1
|
Borrower is allowed to make multiplewithdrawals of proceeds of the loanwith total amount withdrawnnot to exceed the amount stipulated in Clause 1. And Borrower shall draw the proceeds of the Loan in accordance with the following loan drawing schedule:
|
3.2
|
Unless all of the following conditions are satisfied, Lender has the right to refuse to grant the Loan:
|
|
1)
|
Borrower has already completed the statutory procedures including obtaining related permit, approval and registration from the government together with other statutory procedures and such permit, approval and registration remain in full force and effect.
|
|
2)
|
The guarantee contract (if any) under this Contract has come into effect and remains in full force and effect. In case that the guarantee contract is a mortgage or pledge contract, the security interest is established and remains in effect.
|
|
3)
|
The business and financial condition of the Borrower does not have any substantial adverse changes; and
|
|
4)
|
Borrower is not in breach of this Contract;
|
5)
|
The repayment method is compliant with the terms and conditions in the Contract
,
and the lender consents to pay as authorized by borrower;
|
6)
|
For loan withdrawal in foreign currency, Borrower has opened an account according to the requirements of foreign exchange administration and provided support documents for the loanwhich reflectcompliance with foreign exchange administration including but not limited to certificationfor purposes of the loan in foreign currency, registration or verification instruments;
|
7)
|
Borrower
has designated a capital return account as requested by the Lender and executed account management agreement
.
|
3.3
|
The Borrower designates the following account as loan deposit account; the said account is
not
an account set up by the Borrower with the Lender specifically for loan deposit.
|
3.4
|
Before each withdrawal, the Borrower process the relevant withdrawal procedures at least
three (3)
bank business days in advance and specify the payment method (entrusting the Lender with the payment or the Borrower itself making the payment); only one of the payment methods can be used for each withdrawal.
|
3.5
|
Entrusting the Lender with making the payment means that the Lender, pursuant to the payment entrustment engagement letter from the Borrower and after the release of the loan pursuant to the provisions herein, makes the payment from the loan proceeds through the Borrower's account directly to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.6
|
The Borrower making the payment at its sole discretion means that, after the Lender releases the loan proceeds into the Borrower's account pursuant to the provisions herein, the Borrower makes the payment from the loan proceeds to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.7
|
The actual loan release date and the amount released must be based on the records in the "Loan Certificate."
|
4
|
Repayment of Loan
|
4.1
|
The Borrower must repay the loan at the maturity date specified in 1.4 herein and according to the following schedule; if the maturity date in the "Loan Certificate" is inconsistent with that specified herein, the record in the "Loan Certificate" shall prevail:
|
Date of Repayment
|
Amount Withdrawn
|
|
17th
day of
April
,
2012;
|
Thirty Million
(amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
|
_______________ (amount in
Capital Letters
)
|
4.2
|
Borrower shall not repay the Loan prior to the scheduled date without having a written consent from Lender.
|
4.3
|
Borrower assigns the following accounts:
|
5
|
Representation and Guarantee of the Borrower
|
5.1
|
Borrower is an independent entity and has the necessary contractual capacity to perform this Contract and will be liable for its non-performance of its obligations hereunder.
|
5.2
|
The execution and performance of this Contract is the true intention of the Borrower, and the Borrower has all necessary consents, approvals and authorizations to perform its obligations.
|
5.3
|
Borrower operates legally, is able to make profits continually and has legal sourceof fund for repayment with no material bad credit history. The officers of Borrower have no criminal records.
|
5.4
|
All the documents, reports, data and information provided by the Borrower to the Lender during the execution and performance of this Contract are true, accurate, complete and in full effect, and Borrower has not withheld any information which may affect the evaluation of its financial status and repayment ability.Since the date of the most recent financial statements published, there has been no material adverse effect on the financial position of Borrower.
|
5.5
|
Borrower is neither the shareholder of Guarantor nor the “actual controller” as defined in
Company Lawof the People’s Republic of China
of Guarantor, and it does not intend to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor.
|
5.6
|
Borrowerpromises that 1) notify Lender once it is informed that thereal estate pledged as security for the repayment of the loan mortgaged house will be demolished; and 2) in the event that the real estate is demolished with the property right of Borrower transferred, Borrower shall repay the loan pre-maturely, or promptly provide other guarantee approved by the Lender as requested.
|
6
|
Rights and Obligations of Lender
|
6.1
|
Lender has the right to be repaid the principal, receive interest (including compound, overdue and appropriated penalty interest) and the necessary expenses from the Borrower in accordance with this Contract. Lender has the right to exercise any other rights under the relevant laws and regulations or stipulated in this Contract.
|
6.2
|
Lender shall only conduct routine review for documents provided by Borrower and it shall not be liable for any failure of entrusted payment by Borrower caused by incomplete, fault documents.
|
6.3
|
Lender shall not be liable for any failure in loan release or payment caused by freezing of the Borrower’s loan release account or
Borrower's trading
partner’s account or any reasons otherwise.
|
7
|
Rights and Obligations of Borrower
|
7.1
|
Borrower shall repay the Loan under this Contract and pay the interest hereunder in accordance with the date, amount, currency set forth in this Contract.
|
7.2
|
Borrower shall not use the proceeds of the Loan for any usage not stipulated in this Contract.
|
7.3
|
Borrower shall be liable for the expenses under this Contract, including but not limited to, expenses for notary service, authentication, evaluation and registration.
|
7.4
|
Borrower shall comply with the operation procedure and the general practice of the Lender and loan application, including but not limited to, facilitating Lender’s examination and supervision on Borrower’s operation status, and providing all the financial statements, or any other data and information requested by Lender, and shall guarantee that such documents, data and information are true, complete and accurate.
|
7.5
|
If any one of the following events occurs, Borrower shall notify the Lender within thirty (30) days and shall not commence such activities unless the Loan and interest under this Contract are repaid completely, or a repayment schedule and guarantee are approved and accepted by the Lender. These are as follows:
|
|
(1)
|
Selling, donating, renting, lending, assigning, mortgaging, pledging or disposing of all or substantial part of its assets; and
|
|
(2)
|
any potential or actual substantial changes in organization or structure of the Borrower, including but not limited to, its operation, subcontracting, lease, affiliation, company restructuring, joint-stock, merger (consolidation), equity joint-venture (non-equity), spin-off, incorporation of subsidiary, asset assignment, reduction of registered capital, etc.
|
7.6
|
Borrower shall notify the Lender within seven (7) days of occurrence of any of the following events:
|
|
(1)
|
Amendment of the Articles of Association, change of Borrower’s name, change of legal representative, change of domicile, change of address, and change in the scope of its business.
|
|
(2)
|
Borrower, its related party or Guarantor’s intention to file for bankruptcy.
|
|
(3)
|
Borrower’s involvement in any major litigation or arbitration, or any lien or encumbrance is imposed on its assets.
|
|
(4)
|
Borrower’s or its related party’s guarantee to any other third party, which will have a material adverse effect on its financial status and ability to perform its obligations under this Contract.
|
|
(5)
|
Borrower or its relatedenters into a contract which will have a material adverse effect on its operation and financial status.
|
|
(6)
|
Borrower, its related party or Guarantor (if any) stops its operation, its business terminates, winds up, or its business license is revoked.
|
|
(7)
|
Borrower’s or its related party, major individual investor of Borrower or its related party, Borrower’s or its related party’s legal representativeor senior management has committed a criminal offence, is missing, or has been changed.
|
|
(8)
|
Borrower faces substantial hardship in managing its business or any other event which will have an adverse effect on the financial status or ability of the Borrower to repay the Loan.
|
(9)
|
Related-party transaction occurs with the total amount at or more than 10% of the most recent audited net assets.
|
(10)
|
Borrower will become or is very likely to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor.
|
(11)
|
Borrower or its related party is covered by media or causes accidents due to any and all violation of laws and regulations, state policies or industrial standards.
|
(12)
|
The controlling relationship between its related party and Borrower has material change.
|
(13)
|
There has been material adverse effect on the repayment ability of Borrower or its related party.
|
7.7
|
Upon the occurrence of any change to the guarantee hereunder that is adverse to the Lender’s claims, the Borrower must promptly provide other guarantee approved by the Lender as requested.
|
8
|
Other Terms
|
9
|
Maturity Repayment of the Loan before the Maturity Date
|
9.1
|
The occurrence of any of the following will be considered an “advance maturity event” for this Contract:
|
|
(1)
|
Borrower’s representations and warranties in Section 5 are not true;
|
|
(2)
|
Borrower is in breach of this Contract;
|
|
(3)
|
The events set forth in Section 7.6 have occurred and Lender believes that such event will have a material adverse effect on its rights as a creditor;
|
(4)
|
Lender decides at its discretion that Borrower shall repay the proceeds and interests of the loan based on to its current capital return situation;
|
(5)
|
Lender may violate or will violate laws by releasing the loan due to changes tocurrent regulatory laws and regulations; or
|
(6)
|
Borrower
violates any provisions herein
the Contract with Lender or stipulated in any other contracts entered into with any other third party, or its debt may or has been declared due ahead of maturity date.
|
9.2
|
In the event of any of the aforesaid events, Lender has the right to take one, more or all of the following actions:
|
|
(1)
|
Suspend the release of the remainder of the loan;
|
|
(2)
|
Suspend the payment for the withdrawn but yet not allocated loan;
|
|
(3)
|
request the Borrower to enter into supplementary agreement with respect to loan release terms and payment terms;
|
|
(4)
|
request the Borrower to change its payment method in accordance with Lender’s requirements; and
|
|
(5)
|
unilaterally declare due of the released loan herein and ask the Borrower to repay all its proceeds and interests.
|
10
|
Breach of Contract
|
10.1
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, or to use the proceeds of the Loan as set forth in this Contract, Lender has the right to use the overdue penalty interest rate and appropriate penalty interest rate to calculate the interest.
|
10.2
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, Borrower shall be liable for the Lender’s expenses in exercising its creditor’s rights, including litigation cost (arbitration fee), costs of preservation of asset, costs of publication, enforcement costs, legal fees, travel and other expenses.
|
10.3
|
In the event that Borrower avoids Lender’s supervision, fails to repay the principal or the interest of the Loan or avoids the repayment intentionally, Lender has the right to inform relevant government authority and to publish the payment notification on news media.
|
11
|
Withdrawal Instructions
|
11.1
|
In the event that Borrower is overdue in payment in respect of principal, interest, penalty interest, compound interest or other expenses, Lender is authorized to withdraw the money from any other bank accounts of Borrower with Bank of Communications to offset the said outstanding payment.
|
11.2
|
After the aforesaid withdrawal, Lender shall inform the Borrower of such account number, loan contract reference number, promissory note reference number, amount of withdrawal, and the outstanding Loan amount.
|
11.3
|
If the amount of withdrawal is not sufficient to offset the aforesaid payment, the overdue expenses shall be settled first. If the principal and interest are overdue for less than ninety (90) days, the remaining balance shall be first used to settle the overdue interest, penalty interest and compound interest, then shall be used to settle the overdue principal. In the event that the overdue payment or interest is overdue for more than ninety (90) days, the remaining balance shall be used to settle the overdue principal, and then shall be used to settle the overdue interest, penalty interest or compound interest.
|
11.4
|
If the currency of the aforesaid withdrawal amount is different from the currency of the Loan, the exchange rate determined by Bank of Communications on the date of withdrawal shall be used for the currency conversion calculation.
|
12
|
Notification
|
12.1
|
The contact information (including mail address, phone number and fax number) herein provided by Borrower is true. In case of any changes to the information, Borrower shall notify Lender by delivering the written updated information in ordinary post, courier or in person. The updated information shall be in effect upon actual receipt and update in records by Lender.
|
12.2
|
Unless expressly specified otherwise herein, the Lender has the right to use any of the following means for sending notification to the Borrower. The Lender has the right to choose the notification method it deems appropriate and shall not be responsible under any circumstance for any error, miss or delay of the postal mail, fax, telephone or any other communication system. If the Lender chooses several notification methods, the notification will be considered served on the basis of the faster method. The methods include:
|
(1)
|
Public announcement: the notification will be considered served on the day when the Lender publish such announcement on its website, online banking site, telephone banking system or business website;
|
(2)
|
Courier delivery: the notification will be considered served on the day when the Borrower signs the delivery receipt;
|
(3)
|
Postal mail (including special express mail, ordinary mail and registered mail): the notification will be considered served 3 days (if, in the same city)/5 days (if, in different regions) such mail is sent to the Borrower’s most recent mailing address that the Lender knows (even though such mail may be returned); and
|
(4)
|
Notification by fax or by other electronic method will be considered served when it is sent to the most recent fax number or email address that the Lender knows.
|
13
|
Information Disclosure and Non-Disclosure
|
13.1
|
The Lender must have the responsibility to keep confidential the Borrower’s commercial secrets and other information and documents which carry written legends requiring confidentiality; however the following circumstances are excepted:
|
(1)
|
Disclosure as required by the applicable law and statutes or by the public offering rules;
|
(2)
|
Disclosure as required by judicial or government authorities;
|
(3)
|
Disclosure made to the Lender’s outside business experts; and
|
13.2
|
Borrower agrees that Lender can use or disclosure all the information and materials of Borrower with respect to the loan in case of the following event and it shall be liable for any arising from that:
|
14
|
Applicable Law and Dispute Resolution
|
15
|
Miscellaneous
|
15.1
|
Borrower consents that Lender can search for and keep its credit related information for the purposes of loan applicationand post-loan-release management.
|
15.2
|
Lender shall not be liable for failing to release the loan or make payment caused by force majeure, communication or internet connection failure or systematictrouble but it shall notify Borrower promptly.
|
15.3
|
With
drawal application template and signed withdraw application,loan certificate
and other instruments, materials confirmed by both parties under this Contract shall constitute the entire agreement between Lender and Borrower of the Contract.
|
15.4
|
The terms “related-party”, “related-party transaction” and “primary individual investor” herein are in compliance with those defined in
Related-Party Disclosures
of Chapter 36
in The Accounting Standards for Business Enterprises
(CK No. [2006] 3) and its amendmentspromulgated by Ministry of Finance of PRC.
|
15.5
|
This Contract comes into effect upon both Parties’ signing and stamping on this contract.
|
15.6
|
This Contract is executed in
four (4)
counterparts. Each of the Parties and their Guarantors (if any) shall keep one counterpart.
|
Party A:
|
Fuwei Films (Shandong) Co., Ltd.
|
Legal Representative:
|
Xiaoan He
|
Legal Address:
|
Hi-Tech Development Zone, No. 387 Dong Ming Road, Weifang
|
Correspondence Address:
|
Same as above
|
Party B:
|
Weifang Branch, Bank of Communications
|
Responsible Person:
|
Ankui Liu
|
Correspondence Address:
|
No. 358 Dong Feng, Dong Street, Weifang
|
1
|
Financing Content
|
1.1
|
Currency:
Euro (€)
|
1.2
|
Amount:
two million six thousand two hundred and fifty euros
|
1.3
|
The fund financed under this Contract shall be solely used for
payment of import outward remittance stipulated in Article 1.5
.
|
1.4
|
Method to release fund financed herein:
|
1.5
|
The information such as released amount, date and maturity date are shown as follows:
|
2
|
Interest Rate and Computation of Interest
|
2.1
|
Interest rate: 4.2725% per annum. Daily interest rate is monthly interest rate divided by thirty (30) days while the monthly interest rate is equal to annual interest rate divided by twelve (12) months.
|
2.2
|
Computation of Interest
|
2.2.1
|
Normal interest = interest rate under this Contract X proceeds of the fund X number of days of use. Number of days of use is calculated from the drawing date to the maturity date.
|
2.2.2
|
The overdue penalty interest rate is equal to the loan interest rate set forth in Article 2.1 under this Contract plus 20% of such loan’s interest rate, and actual penalty is calculated according to the actual days due (from date due to date the fund is paid off).
|
2.3
|
Inthe event of earlier repayment by the Borrower or loan recalling pre-maturely by Lender, the applicable interestrate is still valid.
|
3
|
Granting, Payment and Repayment of Fund Financed
|
3.1
|
Unless all of the following conditions are satisfied, Lender has the right to refuse to grant the fund financed:
|
|
1)
|
Party A has already completed the statutory procedures including obtaining related permit, approval and registration from the government together with other statutory procedures and such permit, approval and registration remain in full force and effect.
|
|
2)
|
The guarantee contract (if any) under this Contract has come into effect and remains in full force and effect. In case that the guarantee contract is a mortgage or pledge contract, the security interest is established and remains in effect.
|
|
3)
|
The business and financial condition of the Borrower does not have any substantial adverse changes; and
|
|
4)
|
Borrower is not in breach of this Contract;
|
|
5)
|
The repayment method is compliant with the terms and conditions in the Contract
,
and the lender consents to pay as authorized by borrower;
|
|
For loan withdrawal in foreign currency, Borrower has opened an account according to the requirements of foreign exchange administration and provided support documents for the loanwhich reflectcompliance with foreign exchange administration including but not limited to certificationfor purposes of the loan in foreign currency, registration or verification instruments;
|
|
7)
|
Borrower
has designated a capital return account as requested by the Lender and executed account management agreement
.
|
3.3
|
The
Borrower
designates the following account as loan deposit account; the said account is
not
an account set up by the Borrower with the Lender specifically for loan deposit.
|
3.4
|
Before each withdrawal, the Borrower process the relevant withdrawal procedures at least
three (3)
bank business days in advance and specify the payment method (entrusting the Lender with the payment or the Borrower itself making the payment); only one of the payment methods can be used for each withdrawal.
|
3.5
|
Entrusting the Lender with making the payment means that the Lender, pursuant to the payment entrustment engagement letter from the Borrower and after the release of the loan pursuant to the provisions herein, makes the payment from the loan proceeds through the Borrower's account directly to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.6
|
The Borrower making the payment at its sole discretion means that, after the Lender releases the loan proceeds into the Borrower's account pursuant to the provisions herein, the Borrower makes the payment from the loan proceeds to the Borrower's trading partner that meets the requirement of the loan purpose stipulated herein.
|
3.7
|
The actual loan release date and the amount released must be based on the records in the "Loan Certificate."
|
4
|
Repayment of Loan
|
4.1
|
The Borrower must repay the loan at the maturity date specified in 1.4 herein and according to the following schedule; if the maturity date in the "Loan Certificate" is inconsistent with that specified herein, the record in the "Loan Certificate" shall prevail:
|
Date of Repayment
|
Amount Withdrawn
|
|
17th
day of
April
,
2012;
|
Thirty Million
(amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
_______________ (amount in
Capital Letters
)
|
|
___ day ___ month ___ Year;
|
|
_______________ (amount in
Capital Letters
)
|
3.4
|
Party A shall repay the proceeds and interest of the fund financed once the goods imported are sold.
|
|
(2) Account for Capital Return:
|
3.5
|
Party A shall not repay the Loan prior to the scheduled date without having a written consent from Party B.
|
4
|
Representation and Guarantee of Party A
|
4.1
|
Party A is an independent entity and has the necessary contractual capacity to perform this Contract and will be liable for its non-performance of its obligations hereunder.
|
4.2
|
The execution and performance of this Contract is the true intention of Party A, and the Borrower has all necessary consents, approvals and authorizations to perform its obligations.
|
4.3
|
Party A operates legally, is able to make profits continually and has legal sourceof fund for repayment with no material bad credit history. The officers of Party A have no criminal records.
|
4.4
|
All the documents, reports, data and information provided by Party A to Party B during the execution and performance of this Contract are true, accurate, complete and in full effect, and Borrower has not withheld any information which may affect the evaluation of its financial status and repayment ability.Since the date of the most recent financial statements published, there has been no material adverse effect on the financial position of Party A.
|
4.5
|
Party A has import permit, the remitted party for import goods is a legal entity for export trade, the imported good are within the scope of business of Party A and are not those that are not allowed to be imported or smuggled in China.
|
4.6
|
Party A agrees to pay the import goods according to the fund financed herein and shall pay as per the terms in Article 3.3.
|
4.7
|
Party A is neither the shareholder of Guarantor nor the “actual controller” as defined in
Company Lawof the People’s Republic of China
of Guarantor, and it does not intend to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor when signingthis Contract.
|
5
|
Rights and Obligations of Party B
|
5.1
|
Party B has the right to be repaid the principal, interest (including compound, overdue and appropriated penalty interest) and necessary expenses from Party Ain accordance with this Contract. Party Bdecides at its discretion that Borrower shall repay the proceeds and interests of the loan based on to its current capital return situationand has the right to exercise any other rights under the relevant laws and regulations or stipulated in this Contract.
|
5.2
|
Party B shall only conduct routine review for documents provided by Borrower and it shall not be liable for any failure of entrusted payment by Borrower caused by incomplete, fault documents.
|
6
|
Rights and Obligations of Party A
|
6.1
|
Party A shall repay the Loan under this Contract and pay the interest hereunder in accordance with the date, amount, currency set forth in this Contract.
|
6.2
|
Party A shall not use the proceeds of the Loan for any usage not stipulated in this Contract.
|
6.3
|
Party A shall be liable for the expenses under this Contract, including but not limited to, expenses for notary service, authentication, evaluation and registration.
|
6.4
|
Party A shall comply with the operation procedure and the general practice of Party B for import outward remittance fund application, including but not limited to, facilitating Party B’s examination and supervision on Party A’s operation status, and providing all the financial statements, or any other data and information requested by Party B, and shall guarantee that such documents, data and information are true, complete and accurate.
|
6.5
|
If any one of the following events occurs, Party A shall notify Party B within thirty (30) days and shall not commence such activities unless the fund financed and its interest under this Contract are paid off, or a repayment schedule and guarantee are approved and accepted by the Party B. These are as follows:
|
(1)
|
Selling, donating, renting, lending, assigning, mortgaging, pledging or disposing of all or substantial part of its assets; and
|
(2)
|
any potential or actual substantial changes in organization or structure of the Borrower, including but not limited to, its operation, subcontracting, lease, affiliation, company restructuring, joint-stock, merger (consolidation), equity joint-venture (non-equity), spin-off, incorporation of subsidiary, asset assignment, reduction of registered capital, etc.
|
6.6
|
Party A shall notify the Lender within seven (7) days of occurrence of any of the following events:
|
(1)
|
Amendment of the Articles of Association, change of Party A’s name, change of legal representative, change of domicile, change of address, and change in the scope of its business.
|
(2)
|
Party A, its related party or Guarantor’s intention to file for bankruptcy.
|
(3)
|
Party A’s involvement in any major litigation or arbitration, or any lien or encumbrance is imposed on its assets.
|
(4)
|
Party A’s or its related party’s guarantee to any other third party, which will have a material adverse effect on its financial status and ability to perform its obligations under this Contract.
|
(5)
|
Party Aor its relatedparty enters into a contract which will have a material adverse effect on its operation and financial status.
|
(6)
|
Party A, its related party or Guarantor (if any) stops its operation, its business terminates, winds up, or its business license is revoked.
|
(7)
|
Party A’s or its related party, major individual investor of Party Aor its related party, Party A’s or its related party’s legal representativeor senior management has committed a criminal offence, is missing, or has been changed.
|
(8)
|
Party A or its related party faces substantial hardship in managing its business or any other event which will have an adverse effect on the financial status or ability of the Borrower to repay the Loan.
|
(9)
|
Related-party transaction occurs with the total amount at or more than 10% of the most recent audited net assets.
|
(10)
|
Party Awill become or is very likely to become the shareholder of Guarantor or the “actual controller” as defined in
Company Law of the People’s Republic of China
of Guarantor before paying off the fund financed under this Contract.
|
(11)
|
Party Aor its related party is covered by media or causes accidents due to any and all violation of laws and regulations, state policies or industrial standards.
|
(12)
|
The controlling relationship between its related party and Party A has material change.
|
(13)
|
There has been material adverse effect on the repayment ability of Party A or its related party.
|
6.7
|
Upon the occurrence of any change to the guarantee hereunder that is adverse to the Lender’s claims, the Borrower must promptly provide other guarantee approved by the Lender as requested.
|
7
|
Other Terms
|
8
|
Maturity Repayment of the Loan before the Maturity Date
|
8.1
|
The occurrence of any of the following will be considered an “advance maturity event” for this Contract:
|
|
(1)
|
Borrower’s representations and warranties in Section 4 are not true;
|
|
(2)
|
Borrower is in breach of this Contract;
|
|
(3)
|
The events set forth in Section 6.6 have occurred and Lender believes that such event will have a material adverse effect on its rights as a creditor;
|
(4)
|
Lender decides at its discretion that Borrower shall repay the proceeds and interests of the loan based on to its current capital return situation;
|
(5)
|
Lender may violate or will violate laws by releasing the loan due to changes tocurrent regulatory laws and regulations; or
|
(6)
|
Borrower
violates any provisions herein
the Contract with Lender or stipulated in any other contracts entered into with any other third party, or its debt may or has been declared due ahead of maturity date.
|
8.2
|
In the event of any of the aforesaid events, Lender has the right to take one, more or all of the following actions:
|
(1)
|
Suspend the release of the remainder of the loan;
|
(2)
|
Suspend the payment for the withdrawn but yet not allocated loan;
|
(3)
|
request the Borrower to enter into supplementary agreement with respect to loan release terms and payment terms;
|
(4)
|
unilaterally declare due of the released loan herein and ask the Borrower to repay all its proceeds and interests.
|
9
|
Breach of Contract
|
9.1
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, or to use the proceeds of the Loan as set forth in this Contract, Lender has the right to use the overdue penalty interest rate and appropriate penalty interest rate to calculate the interest.
|
9.2
|
In the event that Borrower fails to repay the principal or interest in full in a timely fashion, Borrower shall be liable for the Lender’s expenses in exercising its creditor’s rights, including litigation cost (arbitration fee), costs of preservation of asset, costs of publication, enforcement costs, legal fees, travel and other expenses.
|
9.3
|
In the event that Borrower avoids Lender’s supervision, fails to repay the principal or the interest of the Loan or avoids the repayment intentionally, Lender has the right to inform relevant government authority and to publish the payment notification on news media.
|
10
|
Withdrawal Instructions
|
10.1
|
In the event that Borrower is overdue in payment in respect of principal, interest, penalty interest, compound interest or other expenses, Lender is authorized to withdraw the money from any other bank accounts of Borrower with Bank of Communications to offset the said outstanding payment.
|
10.2
|
After the aforesaid withdrawal, Lender shall inform the Borrower of such account number, loan contract reference number, promissory note reference number, amount of withdrawal, and the outstanding Loan amount.
|
10.3
|
If the amount of withdrawal is not sufficient to offset the aforesaid payment, the overdue expenses shall be settled first. If the principal and interest are overdue for less than ninety (90) days, the remaining balance shall be first used to settle the overdue interest, penalty interest and compound interest, then shall be used to settle the overdue principal. In the event that the overdue payment or interest is overdue for more than ninety (90) days, the remaining balance shall be used to settle the overdue principal, and then shall be used to settle the overdue interest, penalty interest or compound interest.
|
10.4
|
If the currency of the aforesaid withdrawal amount is different from the currency of the Loan, the exchange rate determined by Bank of Communications on the date of withdrawal shall be used for the currency conversion calculation.
|
11
|
Notification
|
11.1
|
The contact information (including mail address, phone number and fax number) herein provided by Borrower is true. In case of any changes to the information, Borrower shall notify Lender by delivering the written updated information in ordinary post, courier or in person. The updated information shall be in effect upon actual receipt and update in records by Lender.
|
11.2
|
Unless expressly specified otherwise herein, the Lender has the right to use any of the following means for sending notification to the Borrower. The Lender has the right to choose the notification method it deems appropriate and shall not be responsible under any circumstance for any error, miss or delay of the postal mail, fax, telephone or any other communication system. If the Lender chooses several notification methods, the notification will be considered served on the basis of the faster method. The methods include:
|
12
|
Information Disclosure and Non-Disclosure
|
12.1
|
The Lender must have the responsibility to keep confidential the Borrower’s commercial secrets and other information and documents which carry written legends requiring confidentiality; however the following circumstances are excepted:
|
12.2
|
Borrower agrees that Lender can use or disclosure all the information and materials of Borrower with respect to the loan in case of the following event and it shall be liable for any arising from that:
|
13
|
Applicable Law and Dispute Resolution
|
14
|
Miscellaneous
|
14.1
|
Borrower consents that Lender can search for and keep its credit related information for the purposes of loan applicationand post-loan-release management.
|
14.2
|
Lender shall not be liable for failing to release the loan or make payment caused by force majeure, communication or internet connection failure or systematictrouble but it shall notify Borrower promptly.
|
14.3
|
With
drawal application template and signed withdraw application,loan certificate
and other instruments, materials confirmed by both parties under this Contract shall constitute the entire agreement between Lender and Borrower of the Contract.
|
14.4
|
The terms “related-party”, “related-party transaction” and “primary individual investor” herein are in compliance with those defined in
Related-Party Disclosures
of Chapter 36
in The Accounting Standards for Business Enterprises
(CK No. [2006] 3) and its amendmentspromulgated by Ministry of Finance of PRC.
|
14.5
|
This Contract comes into effect upon both Parties’ signing and stamping on this contract.
|
14.6
|
This Contract is executed in
two (2)
counterparts. Each of the Parties and their Guarantors (if any) shall keep one counterpart.
|
April 26, 2011
|
April 26, 2011
|
Borrower (seal):
|
Lender (seal):
|
Fuwei Films (Shandong) Co., Ltd.
|
Bank of Communications
|
Legal Representative or Authorized Person
|
Responsible Person or Authorized Person
|
Xiaoan He
|
Ankui Liu
|
(signature or seal)
|
(signature or seal)
|
§
|
Net sales for the second quarter were RMB137.3 million (US$21.2 million), compared with RMB 110.3 million in the same period of 2010;
|
§
|
Gross profit for the second quarter was RMB22.5 million (US$3.5 million), compared with RMB 19.7 million in the same period of 2010;
|
§
|
Net sales during the first six months were RMB311.5 million (US$48.2 million), compared with RMB 198.8 million in the same period of 2010;
|
§
|
Net income for the first six months was RMB29.8 million (US$4.6 million), compared with RMB 297,000 in the same six-month period of 2010;
|
§
|
Basic and diluted earnings per share for the first six months was RMB2.28 (US$0.35), compared with RMB 0.02 in the same period of 2010;
|
§
|
Sales of Specialty films for the first six months were RMB79.5 million (US$12.3 million) compared to RMB 24.8 million in the same period of 2010;
|
§
|
Overseas sales during the first six months were RMB107.9 million (US$16.7 million) compared to RMB 36.7 million in the same period of 2010.
|
Three-Month Period Ended
June 30, 2011
|
Three-Month Period
Ended
June 30, 2010
|
|||||||||||||||||||
RMB
|
US$
|
% of Total
|
RMB
|
% of Total
|
||||||||||||||||
Sales in China
|
94,189 | 14,573 | 68.6 | % | 84,959 | 77.0 | % | |||||||||||||
Sales in other countries
|
43,127 | 6,672 | 31.4 | % | 25,359 | 23.0 | % | |||||||||||||
|
||||||||||||||||||||
137,316 | 21,245 | 100.0 | % | 110,319 | 100.0 | % |
June 30, 2011
|
December 31, 2010
|
|||||||||||
RMB
|
US$
|
RMB
|
||||||||||
ASSETS
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
78,446 | 12,137 | 171,227 | |||||||||
Restricted cash
|
88,689 | 13,721 | 1,314 | |||||||||
Accounts and bills receivable, net
|
34,364 | 5,317 | 25,482 | |||||||||
Inventories
|
43,217 | 6,686 | 52,577 | |||||||||
Advance to suppliers
|
5,370 | 831 | 10,974 | |||||||||
Prepayments and other receivables
|
30,063 | 4,651 | 540 | |||||||||
Deferred tax assets - current
|
745 | 115 | 1,344 | |||||||||
Total current assets
|
280,894 | 43,458 | 263,458 | |||||||||
Plant, properties and equipment, net
|
299,613 | 46,355 | 284,891 | |||||||||
Construction in progress
|
169,698 | 26,255 | 197,193 | |||||||||
Lease prepayments, net
|
20,309 | 3,142 | 21,024 | |||||||||
Advance to suppliers - Long Term
|
4,116 | 637 | 2,787 | |||||||||
Goodwill
|
10,276 | 1,590 | 10,276 | |||||||||
Long-term deposit
|
16,760 | 2,593 | 16,760 | |||||||||
Deferred tax assets - non current
|
1,692 | 262 | 1,763 | |||||||||
Total assets
|
803,358 | 124,292 | 798,152 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||
Current liabilities
|
|
|
|
|||||||||
Short-term borrowings
|
173,501 | 26,843 | 142,000 | |||||||||
Accounts payables
|
18,328 | 2,836 | 14,296 | |||||||||
Advance from customers
|
9,308 | 1,440 | 37,291 | |||||||||
Accrued expenses and other payables
|
8,875 | 1,373 | 20,993 | |||||||||
Deferred tax liabilities
|
1,816 | 281 | 1,822 | |||||||||
211,828 | 32,773 | 216,402 | ||||||||||
Long-term loan
|
10,000 | 1,547 | 30,000 | |||||||||
Total liabilities
|
221,828 | 34,320 | 246,402 | |||||||||
Commitments and contingencies
|
|
|
|
|||||||||
Equity
|
|
|
|
|||||||||
Shareholders’ equity
|
||||||||||||
Registered capital(of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500 issued and outstanding)
|
13,323 | 2,061 | 13,323 | |||||||||
Additional paid-in capital
|
311,907 | 48,257 | 311,907 | |||||||||
Statutory reserve
|
35,195 | 5,445 | 35,195 | |||||||||
Retained earnings
|
220,697 | 34,145 | 190,933 | |||||||||
Cumulative translation adjustment
|
1,211 | 187 | 1,186 | |||||||||
Total shareholders’ equity
|
582,333 | 90,096 | 552,544 | |||||||||
Non-controlling interest
|
(803 | ) | (124 | ) | (794 | ) | ||||||
Total equity
|
581,530 | 89,972 | 551,750 | |||||||||
Total liabilities and equity
|
803,358 | 124,292 | 798,152 |
The Three-Month Period Ended June 30,
|
The Six-Month Period Ended June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||
RMB
|
US$
|
RMB
|
RMB
|
US$
|
RMB
|
|||||||||||||||||||
Net sales
|
137,316 | 21,245 | 110,319 | 311,470 | 48,189 | 198,774 | ||||||||||||||||||
Cost of sales
|
(114,789 | ) | (17,760 | ) | (90,648 | ) | (243,807 | ) | (37,721 | ) | (166,337 | ) | ||||||||||||
Gross profit
|
22,527 | 3,485 | 19,670 | 67,663 | 10,468 | 32,437 | ||||||||||||||||||
Operating expenses
|
|
|
|
|
|
|
||||||||||||||||||
Selling expenses
|
(4,945 | ) | (765 | ) | (4,159 | ) | (9,039 | ) | (1,399 | ) | (7,555 | ) | ||||||||||||
Administrative expenses
|
(7,242 | ) | (1,120 | ) | (12,896 | ) | (18,878 | ) | (2,920 | ) | (20,425 | ) | ||||||||||||
Total operating expenses
|
(12,187 | ) | (1,885 | ) | (17,055 | ) | (27,917 | ) | (4,319 | ) | (27,980 | ) | ||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Operating income (loss)
|
10,340 | 1,600 | 2,615 | 39,746 | 6,149 | 4,457 | ||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Other income (expense)
|
||||||||||||||||||||||||
- Interest income
|
525 | 81 | 157 | 1,076 | 167 | 171 | ||||||||||||||||||
- Interest expense
|
(2,427 | ) | (376 | ) | (2,669 | ) | (4,727 | ) | (731 | ) | (4,287 | ) | ||||||||||||
- Others income, net
|
(132 | ) | (20 | ) | (180 | ) | (236 | ) | (37 | ) | (136 | ) | ||||||||||||
Total other income (expense)
|
(2,034 | ) | (315 | ) | (2,692 | ) | (3,887 | ) | (601 | ) | (4,251 | ) | ||||||||||||
Income before income tax benefit (expense)
|
8,306 | 1,285 | (77 | ) | 35,859 | 5,548 | 205 | |||||||||||||||||
Income tax benefit (expense)
|
(2,191 | ) | (339 | ) | 42 | (6,104 | ) | (944 | ) | 23 | ||||||||||||||
Net Income (loss)
|
6,115 | 946 | (35 | ) | 29,756 | 4,604 | 228 | |||||||||||||||||
Net loss attributable to noncontrolling interests
|
(5 | ) | (1 | ) | (32 | ) | (9 | ) | (1 | ) | (69 | ) | ||||||||||||
Net income (loss) attributable to the Company
|
6,120 | 947 | (3 | ) | 29,764 | 4,605 | 297 | |||||||||||||||||
Other comprehensive income
|
||||||||||||||||||||||||
- Foreign currency translation adjustments attributable
to noncontrolling interest
|
12 | 2 | - | 17 | 2 | - | ||||||||||||||||||
- Foreign currency translation adjustments attributable
to the Company
|
18 | 3 | - | 6 | 2 | (16 | ) | |||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interest
|
7 | 1 | (32 | ) | 8 | 1 | (69 | ) | ||||||||||||||||
Comprehensive income attribute to the Company
|
6,138 | 950 | (3 | ) | 29,770 | 4,607 | 281 | |||||||||||||||||
Earnings per share,
Basic and diluted
|
0.47 | 0.07 | (0.0002 | ) | 2.28 | 0.35 | 0.02 | |||||||||||||||||
Weighted average number ordinary shares,
Basic and diluted
|
13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 |
|
Period Ended June 30, 2011
|
Period Ended June 30, 2010
|
||||||||||
RMB
|
US$
|
RMB
|
||||||||||
Cash flow from operating activities
|
|
|
|
|||||||||
Net income
|
29,756 | 4,604 | 228 | |||||||||
Adjustments to reconcile net income to net cash
|
|
|
|
|||||||||
(used in) provided by operating activities
|
||||||||||||
- Depreciation of property, plant and equipment
|
18,868 | 2,919 | 18,158 | |||||||||
- Amortization of intangible assets
|
227 | 35 | 227 | |||||||||
- Deferred income taxes
|
664 | 103 | (23 | ) | ||||||||
- Bad debt expense (recovery)
|
(5,638 | ) | (872 | ) | (2 | ) | ||||||
- Accounts receivable
|
(9,130 | ) | (1,413 | ) | (8,502 | ) | ||||||
- Inventories
|
9,360 | 1,448 | 5,682 | |||||||||
- Advance to suppliers
|
5,605 | 867 | (2,670 | ) | ||||||||
- Prepaid expenses and other current assets
|
(23,184 | ) | (3,587 | ) | 87 | |||||||
- Accounts payable
|
4,032 | 624 | (4,147 | ) | ||||||||
- Accrued expenses and other payables
|
(8,153 | ) | (1,262 | ) | 5,922 | |||||||
- Advance from customers
|
(27,983 | ) | (4,329 | ) | 613 | |||||||
- Tax payable
|
(3,816 | ) | (590 | ) | 1,610 | |||||||
|
|
|
|
|||||||||
Net cash provided by (used in) operating activities
|
(9,392 | ) | (1,453 | ) | 17,184 | |||||||
|
|
|
|
|||||||||
Cash flow from investing activities
|
||||||||||||
Purchases of property, plant and equipment
|
(33,556 | ) | (5,192 | ) | (1,234 | ) | ||||||
Restricted cash related to trade finance
|
(87,383 | ) | (13,519 | ) | 12,041 | |||||||
Advanced to suppliers - non current
|
(1,329 | ) | (206 | ) | 910 | |||||||
Amount decrease (addition) to construction in progress
|
27,495 | 4,254 | 1,114 | |||||||||
Net cash provided by (used in) investing activities
|
(94,773 | ) | (14,663 | ) | 12,832 | |||||||
Cash flow from financing activities
|
|
|
|
|||||||||
Principal payments of short-term bank loans
|
(7,000 | ) | (1,083 | ) | (16,179 | ) | ||||||
Proceeds from short-term bank loans
|
18,501 | 2,862 | 10,000 | |||||||||
Net cash provided by (used in) financing activities
|
11,501 | 1,779 | (6,179 | ) | ||||||||
Effect of foreign exchange rate changes
|
(116 | ) | 575 | (26 | ) | |||||||
Net increase (decrease) in cash and cash equivalent
|
(92,780 | ) | (13,760 | ) | 23,810 | |||||||
Cash and cash equivalent
|
|
|
|
|||||||||
At beginning of period
|
171,227 | 25,897 | 26,804 | |||||||||
At end of period
|
78,446 | 12,137 | 50,615 | |||||||||
SUPPLEMENTARY DISCLOSURE:
|
|
|
|
|||||||||
Interest paid
|
4,727 | 731 | 4,441 | |||||||||
Income tax paid
|
8,456 | 1,308 | - |