Loan Agreement dated October 25, 2018, between CVie Therapeutics, Lees Pharmaceutical Holdings Limited, and O-Bank Co., Ltd

1.

Please find the information on the purpose of collecting of personal information, classification of personal information collected and the time period, area, target and way of use involved in using the personal information collected below for your review:

2.

Pursuant to Article 3 of the PIPA, you may reserve the following rights in respect of your personal information collected by the Bank:

(1)

Except the situations stated in Article 10 of the PIPA, making inquiries, requesting to review, or asking for a duplication of personal information from the Bank, and the Bank may charge a reasonable and necessary fee pursuant to Article 14 of the PIPA.

(2)

Requesting the Bank to supplement or correct provided that you should make an appropriate explanation pursuant to Article 19 of the Title Enforcement Rules of the PIPA.

(3)

In the event that the Bank contravenes the PIPA in collecting, processing or using your personal information, pursuant to Section 4 of Article 11 of the PIPA, you may request the Bank to delete or cease collecting, processing or using your personal information pursuant to Section 2 of Article 11 of the PIPA.

(4)

Pursuant to Section 2 of Article of the PIPA, in the event of controversy arising in relation to the accuracy of the personal information, you may request the Bank to cease processing or using your personal information, except that it is necessary for the Bank to conduct its business and the Bank has recorded the controversy or there is written consent from you pursuant to the proviso of Section 2 of Article of the PIPA.

(5)

Pursuant to Section 3 of Article 11 of the PIPA, you may request the Bank to delete, cease processing or using your information after the specific purpose of collecting personal information vanishes or the deadline expires, except that it is necessary for the Bank to conduct its business or there is written consent from the you pursuant to the proviso of Section 3 of Article 11 of the PIPA.

3.

If you would like to exercise the foregoing rights indicated in Article 3 of the PIPA, you may inquire the Bank (02-87527000) or go to the official website (http://www.o-bank.com) for information on how to exercise your rights.

4.

You may freely choose whether or not to provide relevant personal information and the classification of such information; however, if the information or classification of such information you refuse to provide is necessary for information reviews or required for the business of the Bank, the Bank may therefore not be able to provide the relevant services or provide better quality of the service. Thank you for your understanding.

(1)

The form, requirements and other contents of the facility limit may be confirmed between the Bank and the Borrower. The credit guarantee shall constitute a part of this Agreement and be binding on the Borrower and the Guarantor. Any matters specially set forth in the confirmation documents (including other additional amendments signed according to the terms in the confirmation documents) shall be deemed the special terms and conditions of this Agreement and shall take priority in their application. For other matters not designated in the confirmation documents, the provisions in this Agreement shall apply.

(2)

For every individual credit issuance and exchange transaction, the Borrower and the Guarantor should, in accordance with the Bank’s requirements, execute related contracts, applications or other documents. If the matter requires a guarantee, the Borrower and the Guarantor should, in accordance with the Agreement, provide the Bank with the collateral, execute documents and complete registration according to the relevant law.

1.

Total Facility Amount

2.

Scope of debts

3.

Maximum Guarantee

4.

Joint debt

5.

Notice of change and delivery of documents

6.

Interest

7.

Delay interest and penalty

8.

Authorization relating to withholding

(1)

The Bank has the right to access and transfer funds from the account without the Borrower’s passbook, withdrawal slip or promissory notes/check signed by the Borrower. In the case of insufficient fund in which disputes with third parties arise, the Borrower shall be fully liable and the Bank is free of any liability. In that case, the Borrower should provide relevant certificates to the Bank as soon as possible for the Bank to re-issue documents to access the account.

(2)

The necessary procedures relating to credit issuance and other services should be carried out by the Borrower in accordance with the ordinary rules; the Borrower shall not use such authorization as an excuse for non-compliance to the procedural rules; otherwise, the Borrower shall be held solely liable.

(3)

If the designated account is agreed to be the NT dollar account and the original currency for transfer is a foreign currency, the Borrower agrees to authorize the Bank to convert to NT dollars based on the conversion rate of the date of transfer, before transferring and deducting the funds from the designated account.

(4)

Although authorized to access and transfer funds, the Bank is not liable to make payments on behalf of the Borrower by transferring funds from the designated account. If the Bank determines that there is a need or a dispute, or the necessary procedures for business transactions are incomplete, or the funds are insufficient etc., the Borrower shall immediately go to the Bank and take all necessary actions upon being notified by the Bank.

9.

Reserve Account Authorization

10.

Debt offset

11.

Acceleration clause

(1)

When the Borrower fails to repay the debt or to amortize principal in accordance with its agreements, or refuse to honor or make payments when due for any of its debts to the Bank or to any financial institution;

(2)

When applying for settlement under the bankruptcy law, voluntary or involuntary bankruptcy, voluntary or involuntary restructuring of the company or being refused by the Taiwan clearing house, closing of business or liquidating debts;

(3)

When failing to provide guarantee as originally agreed;

(4)

Upon the death of the Borrower and the heir disclaims inheritance;

(5)

When a criminal sentence is issued and the majority of assets have been confiscated;

(6)

When the Borrower, the Guarantor, the representative of the Borrower or the Guarantor, actual beneficiary, or those exercising control over the Borrower or the Guarantor is found to be subject to economic sanctions, or be deemed or investigated terrorist or organization by foreign governmental or international anti-money laundering organization, or is found to be on the list of sanctions announced by the Ministry of Justice of the Republic of China;

(7)

When the Borrower fails to pay for the interest of any debt owed to the Bank or any financial institution;

(8)

When any collateral are sealed or lost or reduced in value, or due to the deteriorated financial status of the issuing company of the collateral, situations involving insufficient security, poor credit of the Guarantor or termination of guarantee, and failure to replace the collateral or failure of the Guarantor to repay part of principal after being requested by the Bank to do so;

(9)

In relation to the debt owed by the Borrower, when the actual use of funds differs from the purpose approved by the Bank or the business, credit, assets have adverse changes that may detrimentally affect the credit claim of the Bank;

(10)

When subject to compulsory execution, provisional attachment, provisional injunction or other preservation, exposing the Bank to the risk of not being able to be repaid;

(11)

When the Borrower is found to be dishonest or withholding information or conducting other acts not in good faith in its statements of facts or in its provision of documents during its correspondence with the Bank;

(12)

When the Borrower or the Guarantor do not cooperate with the inspection, refuse to provide information related to the actual beneficiary of the Borrower or the Guarantor or the person exercising control, or refuse to cooperate in explaining the actual nature and purpose of the transaction or the source of funds;

(13)

When the Borrower fails to comply with the commitment to maintain certain standards of financial status during the loan period, or other covenants or undertakings stated in the transaction documents with the Bank.

12.

Breach of contract

(1)

The Borrower should in accordance to the requirements of the Bank immediately repay all debts, their interest and related fees.

(2)

For the Borrower’s guarantee or provision of security, or letter of credit, acceptance of bill, guarantee or other means of financing to a third party issued by the Bank for the Borrower, the Bank has the right (but shall have no obligation) to demand part or all such debts to be repaid before the maturity of such debts. The Borrower shall immediately repay all amounts advanced by the Bank and the delay interest and penalty incurred between the date of the advance made and the date of repayment calculated in accordance to this Agreement.

(3)

The Bank is also entitled to notify the Borrower to immediately deposit an amount equal to the unpaid debts in the manner requested by the Bank to an account with the Bank as guarantee. The Bank is entitled to use such guarantee amount to repay or make early repayments of any and all unpaid debts of the Borrower. If the amount of such guarantee is insufficient to pay or make early repayments of the debts, the Borrower shall pay the Bank the difference to enable the Bank to repay all debts when due or to make early repayment of all debts and interest; if there is excess after repaying all debts owed by the Borrower to the Bank or if all the debt obligations are discharged, the excess amount should be returned to the Borrower.

(4)

The Bank may execute and dispose any and all collateral, request payments under promissory notes and use other lawful means to enforce its debt collection against the Borrower and the Guarantor pursuant to the laws and this Agreement.

13.

Exercise of the Set-off Right of Undue Debts

14.

Replacement of Guarantor

15.

Supervision, Audit, Inspection and Information Provision

16.

Collection, Processing and Utilization of Information

17.

Recognition of defects, damages or loss of bills and borrowings and alike

18.

Joint Guarantee

1.

The Bank does not need to seek repayments from the collateral first before it is entitled to claim directly against the Guarantor.

2.

After the Guarantor has paid off all the debts on behalf of the principal debtor and requests the collateral to be returned to the Guarantor in accordance to the law, the Guarantor shall not object over any defect on the collateral.

3.

The Guarantor shall not terminate the guarantee unless under the terms of this Agreement; however, the guarantee debts before the termination shall not be waived, and the guarantee responsibility shall not be waived upon the occurrence of any change in the position, status, and qualifications. An exception applies when the Bank believes that it is necessary based on an application or other specific facts, upon written notice, one or multiple Guarantors should be waived or removed from its guarantor responsibility, however, the other Guarantors shall still be fully liable for the debts borne by the principal debtor.

4.

If a third party jointly bears the debts of the principal debtor, the Guarantor shall still be liable to bear joint and several liability.

19.

Deferred or amortized

20.

Return or replacement of collateral and certificates

21.

Authorization of the payment of the promissory note and the authorization of the due date of the note

22.

Payment Currency

23.

Foreign Currency Exchange and Reclassification

24.

Adjustment of drawdown date and amount of the loan

25.

Notice and Prohibition

1.

Significant changes or any change in nature relating to the business, business structure, personnel or financial situation of the Borrower.

2.

The Borrower is a party to a lawsuit or is involved in other procedures in the court, the arbitration commission or a government agency.

1.

Directly or indirectly owe a debt to another person (natural or legal persons) through debt commitment, guarantee, endorsement or other means of debt, except for deposits, withdrawals or similar transactions in the ordinary course of business operations.

2.

Merge or spin off the company with another person.

3.

Sale, lease or otherwise transfer or dispose of all or substantially all of the business or assets.

4.

Place or permit others to place a lien, pledge or other security interest in the collateral granted to the Bank.

5.

Engage in any transaction with another person outside the ordinary course of business.

6.

Borrow money from financial institutions that are not legally established.

7.

Provide loans to others, except for ordinary commercial financing with its customers.

26.

Other expenses and tax

27.

Fill in the documents

28.

Chop authorization for the loan

29.

Governing Law and Jurisdiction

1.

This credit is available for the Borrower to apply for short, medium and long-term financing (revolving); however, the actual content is limited to those approved by the Bank.

2.

When the Borrower drawdown the loan, it agrees to provide the loan certificate and/or application documents required by the Bank. The interest rate, term and repayment method shall each be agreed on the loan certificate or application documents.

1.

The Borrower agrees to drawdown the loan in accordance with the conditions and term approved by the Bank. Upon the expiry of the approved overdraft term, the Borrower shall immediately repay the principal and the interest if the Borrower has not obtained the Bank’s consent to extend such term.

2.

The Borrower shall make the withdrawal from the check deposit account no. ____________ opened with the Bank by issuing checks signed by the Borrower or/and other means approved by the Bank.

3.

The interest rate shall be calculated according to the interest rate approved by the Bank and as stated in the letter of credit confirmation, and shall be adjusted according to the agreed interest rate adjustment. Interest will be calculated once a month, and the original loan overdraft will be rolled into the account. If the total principal and interest exceed the overdraft limit, the Borrower shall immediately repay the excess amount.

1.

This loan is for the Bank to provide debt guarantee and acceptance business, and entrusts the Bank (resolving) to provide guarantee and acceptance in accordance with the law. The provision of guarantee, acceptance amount, the period, the scope and other conditions by the Bank as engaged by the Borrower shall be based on the relevant laws and regulations or the guarantees, acceptance documents or notes issued by the Bank. The Bank reserves the right to determine whether to provide guarantee and acceptance after audit.

2.

The Borrower shall pay the guarantee fee of the Bank according to the agreed terms and conditions before the issuance of the guarantee document. If there is an extension to the guarantee period in the future, the Borrower shall be willing to pay the handling fee at the expiry date of the original guarantee period according to the agreement of the parties. The Borrower shall be responsible for all taxes or withholding tax payable in this Contract. If there is a settlement fee, loan handling fee, cable fee and other expenses, the Borrower shall also pay for the additional fees. The guarantee fee will not be refunded once it is paid; even if the guarantee period may be shortened or terminated in the future, the Borrower does not have the right to claim for a refund of the expenses already paid.

3.

If the Borrower fails to perform the agreed matters with the guaranteed beneficiary within the term guaranteed by the Bank, or fails to apply for an extension after the expiration of the guarantee period, or the application for extension has not been approved by the Bank, the Borrower shall immediately perform the obligations agreed and before the full discharge of the guarantee liability of the Bank, the Borrower should continue to pay guarantee fees at the agreed rate for the outstanding amount (as recorded in the books of the Bank or the balance shown after the guaranteed beneficiary has discharged the Bank with a written notice) at the beginning of every half a year.

4.

When the guarantee amount is calculated in a foreign currency, the risk of foreign exchange rate fluctuation shall be borne by the Borrower. If the foreign exchange rate of the foreign currency changes and causes losses to the Bank, the Borrower shall be liable for any and all compensation to the Bank. When the guarantee amount is calculated in a foreign currency and is to be converted to New Taiwan Dollars, unless otherwise agreed, it shall be calculated according to the spot exchange selling rate of the Bank during the guarantee period.

5.

The Borrower shall earnestly perform or ensure its designated person (including legal persons) to earnestly perform the principal debts that it engaged the Bank to guarantee, and shall diligently inform the Bank of its performance. If there is any breach of Contract that results in the Bank having to make an advance to perform a guarantee obligation, the Borrower shall repay such advance immediately.

6.

When the Bank handles for the Borrower the book keeping and accounting of raw materials, semi-finished products and finished products for export, if the set-off period has expired and the bonded raw materials remain all or partly unprocessed for export, except where the Borrower applies and obtains the approval of an extension with the Ministry of Finance according to the law, the Borrower shall pay to the customs the tax payable and the late payment due; otherwise the Bank may unilaterally make a payment and dispose the collateral and recover such payments from the Borrower and the Guarantor.

7.

When the Borrower fails to perform the agreed matters with the guaranteed beneficiary, upon a notice by the beneficiary to the Bank in writing to fulfill the guaranteed responsibility, the Bank may perform the guaranteed obligation unconditionally based on the guarantee issued in this Contract. The Borrower or the Guarantor shall not request the Bank to refuse to pay or give any directions to the Bank based on the engagement relationship or any other reasons, and shall not refuse payment or claim to be free from liability by asserting any disputes with the guaranteed beneficiary or with a third party or any other reasons (including force majeure).

8.

The bill of exchange that the Borrower applies from the Bank for the acceptance under this Contract shall not exceed 180 days from the date of acceptance until the maturity date of the bill unless otherwise approved by the Bank; the promissory note the Borrower applies from the Bank shall not exceed 365 days from the date of guarantee to the expiration date of the bill unless otherwise provided by the Bank.

9.

When the Borrower issues the notes in batches or in a revolving period during the effective term of this Contract, the amount, term and content of which shall be subject to the notes issued by the Borrower; the Borrower and the Guarantor agree to be jointly liable in accordance with the terms of this Contract even if the due date of the notes exceeds the effective term of this Contract,.

1.

The Borrower agrees to comply with the conditions and withdrawal period approved by the Bank, and to pay the handling fees immediately upon notification by the Bank. When the Borrower applies to the Bank for a letter of credit, it will provide the application form, the relevant transaction certificates and the relevant documents required by the Bank, and deposit guarantee fee or provide guarantee according to its agreement with the Bank.

2.

The usance Letter of Credit under this Agreement shall not exceed a maximum of one hundred and eight days unless otherwise approved by the Bank.

3.

The Borrower acknowledges and confirms that all the amounts listed in each letter of credit and the interest and all expenses incurred therefrom are guarantee or advance payments made by the Bank for the Borrower; the Borrower further agrees to authorize the Bank to pay the bill of exchange under each letter of credit based on the application for the letter of credit and the bills of exchange thereunder.

4.

According to the bill of exchange and the supporting documents prompted by the letter of credit, when being deemed by the Bank to be in conformity with the conditions contained in the letter of credit and the advances or acceptances have been made, with verbal or written notice from the Bank, the Borrower shall repay all advances within five days of the making of such advances together with interest. The interest on the advance shall be paid in a single installment at the rate of the benchmark lending rate on the date of the advance payment +2%. In the case of acceptance, the Borrower shall pay before the due date of the acceptance of bill. If the Borrower fails to pay before the due date, the Borrower shall pay interest at the benchmark lending rate on the day of the advance payment or the due date of the bill of exchange plus 4%.

5.

The Bank shall not be held liable for any loss or damage of the letter of credit for reasons not attributed to the Bank, such as an error or a delay in the transmission of the letter of credit, or an error in the interpretation of the terminology, or the document, the merchandise set forth in the document, all or part of the quality or quantity or value of the merchandise being lost or delayed or has not arrived at the place of delivery, or a lack of or insufficiency of the insurance over the merchandise, whether in transit or delivered, or an obstruction or detainment by a third party of the merchandise, or any other factors etc. In any of the above cases, the letter of credit shall still be paid in full by the Borrower.

6.

If a damage occurs to the merchandise purchased according to the records of each letter of credit for reasons that the beneficiary of the letter of credit fails to perform the contract, the delivery delays or force majeure, the Borrower shall be fully liable.

7.

Each Letter of Credit shall not be irrevocable once executed and issued, and the Bank shall have an unconditional obligation to make payment in accordance with the relevant terms. In addition, the appointment relationship under the Civil Code of the Republic of China shall not apply, and therefore, the Borrower shall not request revocation of such Letter of Credit or give any other instruction to the Bank or raise any objection or defense in respect of any aforementioned payment made by the Bank on the grounds of any appointment relationship thereunder.

8.

In respect of merchandise under any Letter of Credit or each collateral separately provided by the Borrower, the Borrower is willing to obtain approval from the Bank in advance on the insurance types and conditions, and then obtain full insurance policies for the benefit of the Bank (or add mortgage special clauses thereto) and bear all such insurance costs. In the event the Borrower delays in purchasing insurance or fails to renew the insurance policies when they expire, the Bank may have the right to purchase insurance or renew the insurance policies on behalf of the Borrower; provided, however, that the Bank is not obliged to do so on behalf of the Borrower. Any such insurance cost, if advanced by the Bank, shall be immediately repaid by the Borrower to the Bank, and in case of any delay in such repayment, the Borrower shall pay the Bank interest calculated in accordance with Article 4, Chapter 4 hereof.

1.

The Borrower is willing to have the Bank advance payables and/or accept the Letter of Credit applied by the Borrower pursuant to the relevant laws and regulations and ordinary practice. In addition to depositing its import license to the Bank and entering into agreement with the Bank on provision of collateral, the Borrower is willing to provide the bills of lading and merchandise procured under each Letter of Credit as guarantee over all debts under each Letter of Credit, with this Agreement serving as evidence of its provision of guarantee. As of the date of the Bank’s issuance of Letter of Credit until the time of delivery of the procured merchandise, the Bank retains pledge over the rights to all certificate of bills of lading (such import license and relevant bills of lading) in connection with such procured merchandise, and as of the time of delivery of the procured merchandise, the Bank retains pledge of personal property to the procured merchandise.

2.

Both the Borrower and the Guarantor acknowledge that the differences (i.e. un-exchanged foreign currency amounts) between the amounts specified in the certificate of foreign exchange transaction or the certificate of transaction under each Letter of Credit and the settled foreign exchange amounts) as well as their accrued interest, penalties and relevant fees are foreign guarantee amounts which are paid or advanced by the Bank on behalf of the Borrower, and agree to use each application for issuance of letter of credit, certificate of foreign exchange transaction, certificate of transaction, or bill of exchange as evidence. The Borrower is willing to pay off all its due debts in accordance with the terms hereof.

3.

When the Borrower procures merchandise in a region where USD is not used, it may apply for issuance of letter of credit and import financing with such other foreign currencies as approved by the Bank, provided that each Letter of Credit amount and/or financing amount, after denominated in a currency designated by the Bank, shall be within the approved line of credit (amount). In the event the foregoing amount(s) exceed(s) the approved line of credit (amount) due to varying exchange rate or other factors, the Borrower and the Guarantor shall pay off the excessive portion immediately after being notified by the Bank to make such repayment.

4.

Pursuant to each Letter of Credit at sight, the Borrower shall repay each Advance Payment within fifteen (15) days of receipt of (written or verbal) notification from the Bank with respect to the delivery of bills of lading under each Letter of Credit. The interest accrued on Advance Payment shall be calculated from the actual Advance Payment date (the debit date of the Bank’s correspondent bank for a Letter of Credit containing authorized debit clauses, or the post date of the Bank and the transmission date of payment message for a Letter of Credit without authorized debit clauses) based on the Bank’s foreign currency loan costs on the Advance Payment date at the interest rate of 4% or other rate approved by the Bank; except in the event any of the following occurs, then the repayment method shall be as follows:

(1)

If the shipping documents have been delivered but the merchandise have yet to arrive, the Borrower shall provide airline documentation or certificates recognized for the Bank’s review and make full repayment within three (3) days of arrival of the merchandise; provided, however, that if on the thirtieth (30^th) day after the delivery of the shipping documents the merchandise still has not arrived, the Borrower shall make immediate repayment upon receipt of a notification by the Bank.

(2)

If the merchandise has been delivered but the shipping documents have yet to arrive and an application for delivery against bank guarantee or endorsement of duplicate bill of lading is required, the Borrower shall make immediate payment of the principal, interest and associated fees.

(3)

If the merchandise is shipped in batches, the Borrower shall make repayment of Advance Payment, its interest and associated fees in accordance with the Letter of Credit amount and/or percentage of Advance Payment in relation to each shipping document.

5.

The repayment date for each debt shall be determined based on the bills of change or payment period as specified in the application for issuance of letter of credit with respect to each usance Letter of Credit issued in accordance with this Agreement. In the event of any Advance Payment, the accrued interest shall be calculated from the actual Advance Payment date (the debit date of the Bank’s correspondent bank for a Letter of Credit containing authorized debit clauses, or the post date of the Bank and the transmission date of payment message for a Letter of Credit without authorized debit clauses) based on the Bank’s foreign currency loan costs on the Advance Payment date at the interest rate of 4% or other rate approved by the Bank.

6.

After each documentary bill has arrived in respect of the Borrower’s application for issuance of usance Letter of Credit, the Bank may within the approved line of credit extend subloans in the original designated currency. After each documentary bill has arrived in respect of the Borrower’s application for issuance of Letter of Credit at Sight, upon approval from the Bank, the Bank may extend subloans within the approved line of credit. Each loan term shall not exceed the period approved by the Bank and the repayment date shall be the due date as notified by the Bank. The interest of each loan shall be calculated in accordance with the Agreement and be paid on a monthly basis, unless otherwise agreed.

7.

The Borrower shall, with the approval from the Bank, apply for currency conversion for its debts under foreign currency loans and make repayment in the designated currency at a mutually agreed exchange rate. The collateral as originally provided for financing shall remain the collateral used for financing after the foregoing currency conversion, and the original agreements shall still govern the terms relating to maturity date and repayment method.

8.

In the event the Borrower fails to perform and repay debts hereunder or fails to go through customs clearance and take delivery timely or delays in any process upon arrival of shipping documents under each Letter of Credit, or the Bank determines based on specific facts that there is obvious deterioration in the Borrower’s financial conditions which may cause the Bank to suffer damage or loss, the Bank’s Advance Payment and loans shall be deemed to have matured and the Bank may take the delivery and exercise its rights to the collateral and to sell or otherwise freely dispose of such collateral (including the disposal method, time and price), and in such case, the Borrower will be willing to reimburse the Bank for any insufficiency of the debt. The Borrower and the Guarantor will be jointly and severally liable for making immediate payment on all fees such as duty, warehouse rent and freight advanced by the Bank in connection with the Bank’s taking of the delivery.

9.

The Borrower shall, on the repayment date for debts or import financing under each Letter of Credit, pay the principal and interest in an equivalent amount denominated in New Taiwan Dollars at the spot exchange selling rate posted by the Bank at the time of payment or in the original designated currency.

10.

In the event any cargo name, specification, unit price, aggregate price and delivery term set forth in the application delivery against bank guarantee or endorsement of duplicate bill of lading as made by the Borrower and accordingly signed by the Bank is inconsistent with those specified in the subsequent shipping documents, the Borrower and the Guarantor will undertake to reimburse and complete all other procedures in accordance with the terms and conditions set forth in such bill of lading as delivered to the Bank; and in such case, if the Bank suffers any loss as a result, the Borrower and the Guarantor are willing to be held jointly liable for all compensation. Such application for delivery against bank guarantee or endorsement of duplicate bill of lading shall constitute a part of the Agreement binding on both Borrower and Guarantor.

11.

The Borrower is willing to obtain approval from the Bank on the insurance types and conditions for the merchandise under any Letter of Credit and subsequently obtain appropriate insurance policies for the benefit of the Bank as the preferred beneficiary on and for such price conditions in accordance with international practice, and provide the originals of the insurance policies and copies of premium receipts to the Bank for record-keeping. All insurance costs shall be borne by the Borrower. In the event the Borrower delays in purchasing insurance or fails to renew the insurance policies when they expire, the Bank may have the right to purchase insurance or renew the insurance policies on behalf of the Borrower; provided, however, that the Bank is not obliged to do so on behalf of the Borrower. Any costs associated with the insurance, if advanced by the Bank, shall be immediately repaid by the Borrower to the Bank, and in case of any delay in such repayment, the Bank may include such cost to the total debt amount and calculate delay interest and penalty in accordance with Article 7, Chapter 1 hereof.

12.

In case any sea disaster, piracy, flood, fire or other force majeure events occurs during transportation to any merchandise procured as specified in each Letter of Credit, or if the beneficiary of the Letter of Credit fails to perform the agreement or delays in delivery of merchandise and incurs losses, or any insurance company refuses to indemnify or provides insufficient claim coverage or delays in claim payment, the Borrower shall be responsible for the losses and handle the situation on its own. The Borrower is willing to make repayment of the principal, interest, delay interest, penalty and all other associated fees.

13.

Where the Borrower imports merchandise through inward collection or open account (O/A), the Borrower may, with the approval from the Bank, apply to the Bank for delivery against bank guarantee or endorsement of duplicate bill of lading within the approved line of credit (amount). At each application, the Borrower shall provide the application for delivery against bank guarantee or for endorsement of duplicate bill of lading and other instruments requested by the Bank. The Borrower acknowledges each of the application concerning the amounts and agreements set forth in the foregoing instruments and will be liable to the Bank for damages until foreign instruments have been delivered to the Bank and the Borrower completes acceptance of bills or makes due payment.

14.

The Borrower hereby expressly states and grants an irrevocable authorization to the Bank that upon delivery of the merchandise, in whole or in part, as named in the Letter of Credit issued by the Bank as requested by the Borrower with its import license and/or other related documents granted by the Bureau of Foreign Trade of the Ministry of Economic Affairs or other designated organizations, if the Borrower fails to repay debts within the repayment period in accordance with relevant credit agreements in respect of each Letter of Credit issued by the Bank, or the debts are deemed as due under the Letter of Credit issued by the Bank at the request of the Borrower pursuant to the relevant credit agreements, the Bank may apply directly to the Bureau of Foreign Trade of the Ministry of Economic Affairs for approval to clear customs and take delivery on behalf of the Borrower and to sell or freely dispose of the imported merchandise.

15.

Save for the foregoing Article 14, the Borrower agrees that this Section 5 shall be subject to Article 1, Article 3 to 5, and Article 7 of Section 4.

1.

Documentary bill payment refers to the situation when the Bank, after reviewing the bill of exchange and/or instrument presented by the Borrower based on the terms of a Letter of Credit as provided by the Borrower, makes an advance payment for the foregoing bill of exchange and/or instrument, provided that it is not forfaiting and that the Bank enjoys the right to claim for repayment. The Bank may deduct any interest and related fees in advance based on the (foreign currency) interest rate it approves for advance payment or usance letter of credit, as appropriate to the payment location, payment period, status of the instrument, and the letter of credit terms.

2.

After the Bank advances the foregoing bill of exchange and/or instrument but fails to recover the advanced amounts within the interest deduction period, the Borrower is willing to pay the Bank a delay interest and penalty. If the Bank is unable to recover the advanced amounts from the issuing bank of the letter of credit or the payor bank within one (1) month of expiration of the interest period or of the maturity of the advanced amounts (whichever is earlier), the Borrower agrees to repay the Bank unconditionally the advanced amounts, accrued interest and all associated fees immediately upon receipt of notice (verbal or in writing) from the Bank and to undertake that the Bank will not suffer any loss as a result of its advance payment of the foregoing bill of exchange and/or instrument.

3.

The Borrower agrees to transfer relevant merchandise and instruments to the Bank as collateral for all liabilities such as debts, bills of debts and interest, delay interest, penalties, indemnities, handling charges and other associated fees owed to the Bank as a result of payment of documentary bills and export financing conducted by the Borrower.

4.

The Bank or any holder of the foregoing bill or exchange and/or instrument may (but is not obliged to) purchase insurance for the merchandise (i.e. collateral to the Bank) under the foregoing bill or exchange and/or instrument against robbery, theft, fire, etc., and the Borrower shall bear the premiums and related fees in connection therewith. The Bank enjoys the priority for claim in respect to the foregoing merchandise and may freely dispose of the merchandise in accordance with the law so as to repay the debts and other fees owed to the Bank or relevant insurance costs paid by other third persons without affecting the Bank’s claim for other bills of debts. In addition, the Bank may handle all required matters on behalf of the Borrower in its capacity as an agent pursuant to ordinary business practice and charge service fees. In the event no objection is raised by the Bank, the Borrower shall move the merchandise to public or private pier or warehouse in accordance with the instructions of the payor or acceptor.

5.

In the event the payor refuses to accept or pay the bill of exchange, or the merchandise has arrived at the destination pier prior to the maturity of the bill of exchange, the Bank or the Bank’s correspondent bank may perform the unloading, customs clearance, warehousing and insuring of the foregoing merchandise, and take any necessary measure for the purpose of protecting the merchandise. The Borrower shall bear all fees arising therefrom and be liable for damages incurred from any willful misconduct or negligence of practitioners during the process of such unloading, customs clearance, warehousing and obtaining insurance, or from any war, act of God or other force majeure factors.

6.

If the foregoing bill of exchange and/or instrument is rejected by the acceptor or refused by the payor, or the payor, acceptor, issuing bank or accepting bank suspends payment, seeks to avoid payment, declares bankruptcy, or is subject to settlement, seizure, provisional attachment, provisional injunction, auction, or takes liquidation steps, or is affected by any external intervention, local law or regulations or any other events, thereby causes the bill of exchange or instrument to be denied or unable to be accepted or paid, whether or not having been accepted with conditions, absolutely or returned, the Bank may request the Borrower to repay immediately the principal advanced by the Bank, its accrued interest and all related fees. In addition, the Bank or any holder of the bill of exchange and/or instrument may (but is not obliged to) sell the merchandise thereunder, in part or in whole, in any such manner as it deems appropriate, and use the proceeds to offset service fees and commission and to pay for the bill of exchange and/or instrument amount and associated fees (including the interest, delay interest and penalty). Thereafter, the Bank or any holder of the bill of exchange and/or instrument may use any balance to pay for other debts (whether or not secured) owed by the Borrower to the Bank. In case of any loss of insured merchandise, the Bank may still request compensation in accordance with the insurance policies, and may use the amounts received to offset service fees and then sell the merchandise for repayment in the abovementioned manner of disposal.

7.

In the event the net proceeds from any sale of the merchandise is insufficient to pay for the bill of exchange or instrument amount, interest and fees, the Borrower agrees that the Bank or any holder of the bill of exchange or instrument may present and use relevant certificates as evidence of loss incurred by the sale of the merchandise, and upon notified by the Bank or such holder of the bill of exchange or instrument (either in writing or verbally), the Borrower shall be obliged to make immediate payment without affecting the Bank’s claim against other debtors.

8.

Regardless of any sale or resale of the merchandise, the Bank or any holder of the bill of exchange may accept payment requests from the payor or acceptor to which it may provide bill of lading and other shipping documents after payment. In the event the Bank or any holder of the bill of exchange accepts earlier payment, it may pay pursuant to the usual interest rate of the place of payment and deduct the interest accrued before the maturity date.

9.

In the event of a bill of exchange provided with instruments after acceptance, after the acceptor accepts such bill of exchange, the Bank may provide the instruments to the acceptor. In case of a delayed payment, the Bank may provide all relevant instruments to the issuing bank or payor prior to receipt of any such payment. Upon maturity of such bill of exchange, if the Bank still has not received any payment or if the Bank had only received partial payment, the Borrower shall be liable for the consequences. The Borrower shall repay all debts together with any and all exchange and service fees incurred therefrom, and shall undertake to indemnify the Bank from suffering any damage.

10.

The Bank or any holder of the bill of exchange may accept the payor’s conditional acceptance, and may provide the auxiliary instruments that are used as collateral to the payor or acceptor.

11.

At any time before the maturity of any bill of exchange, so long as the Bank or acceptor or its representative deems appropriate, the Bank may deliver the merchandise to any third person in batches; provided, however, that the delivered merchandise, whether in whole or in part, shall be exchanged for a fair amount of loan in reasonable proportion to the merchandise price shown on the receipt or the amount specified in the secured bill of exchange.

12.

After payment of any bill of exchange and/or instrument by the Bank, if the conditions provided in such bill of exchange and/or instrument are not consistent with those set forth in the Letter of Credit, or such bill of exchange and/or instrument is denied by the Bank’s discount house or correspondent bank for any reason, or the issuing bank, paying bank or accepting bank refuses to make payment, or the merchandise is found to be defective in its quality or quantity at delivery or on other occasions, or such bill of exchange and/or instrument is rejected by any party for any reason, or the Bank suffers any damage as a result of any defect in such bill of exchange and/or instrument, the Borrower agrees to be held entirely responsible and immediately pay the amounts advanced by the Bank, accrued interest and all other associated fees. The interest shall be calculated in accordance with Article 7, Chapter 1 hereof from the period between the Bank’s advance date and the Borrower’s payment date.

13.

The Bank or its correspondent bank may send a bill of exchange and/or auxiliary instruments in such manner as it deems appropriate. In the event such bill of exchange and/or auxiliary instruments are damaged, lost, wrongly delivered or subject to other accidents etc. in the delivery process that delays the delivery, upon notified by the Bank, the Borrower may prepare new bill of exchange and/or auxiliary instruments pursuant to the details set forth in the Bank’s books and accounts without going through any legal procedure and provide the same to the Bank, or immediately pay the amounts advanced by the Bank, interest and all associated fees to the Bank in accordance with the Bank’s instructions.

14.

The Borrower agrees to cooperate with the Bank to change, split or consolidate any bill of exchange and/or instruments executed and issued by the Borrower at the request of the Bank.

15.

Unless otherwise agreed in writing, any holder of a bill of exchange that is executed, endorsed, accepted or guaranteed by the Borrower may be exempted from a rejection of payment or a rejection of acceptance of such bill of exchange being made before a claim may be exercised. Should the Bank or its correspondent bank deem it necessary to prepare a certificate of rejection, the Borrower will deem such certificate as legal and valid and will bear the incurred fees.

16.

The Borrower warrants that any and all bills of exchange and/or instruments and Letter of Credit presented to the Bank are absolutely true, correct and valid. If the Bank has duly performed its care as a good administrator over the Borrower’s writings, signatures or seals on such bill of exchange and/or instruments and believed that such writings, signatures or seals are the same as the specimens kept at the Bank or as those appearing on the bills of exchange and/or instruments previously used by the Borrower, such bill of exchange and/or instrument shall become effective immediately. In case of any damage incurred to the Bank, the Borrower will be held liable and will compensate the Bank of all damages suffered by the Bank.

17.

In the event a bill of exchange lacks any required component and invalidates the debts attached thereto, or such debts become null and void due to the passing of statute of limitations or incomplete procedure, the Borrower agrees to pay the face value of such bill of exchange to the Bank together with all interest accrued upon maturity thereof and associated fees.

18.

The Bank has obtained legal authorization from the Borrower for the purposes of any necessary action hereunder and this Agreement shall be proof of such authorization.

1.

The Borrower agrees to provide the Bank with each such loan certificate and/or application, bill receivable and its transaction certificate as recognized by the Bank, and to apply to the Bank for one-time or multiple drawdowns or on a revolving basis in accordance with the approved line of credit, rate, period and other credit terms. The matured bills receivable shall be cashed and deposited into a demand deposit reserve account. It is agreed as follows:

(1)

The Borrower agrees to open a demand deposit reserve account in the name of the Borrower at the Bank and authorize the Bank to allow withdrawal by any authorized signatory with his or her executed withdrawal slip for the purposes of paying all debts owed at and to the Bank or for transferring the same amount of withdrawal to the Borrower’s another saving account established with the Bank (other than check deposit accounts). In addition, the Borrower may not use any portion of the deposit in such reserve account unless with approval from the Bank.

(2)

The Borrower fully acknowledges any withdrawal or transfer made by the Bank in accordance with the foregoing paragraph, and the account balance shall be determined by the actual balanced amount posted by the Bank; the Borrower shall raise no objection.

(3)

Such reserve account will provide statements at the request of the Borrower and will have no passbook.

(4)

Any bill provided by the Borrower shall be received solely for the purposes of legal transactions such as sale or lease of goods or provision of services and shall have endorsed and transfer to the Bank by the Borrower. In the event the Borrower receives no payment upon maturity of such bill or such bill is unable to be accepted or paid, the Borrower shall redeem it with equivalent amount of cash or a sight bill receivable within three (3) days of receipt of notice from the Bank and if the Borrower fails to do so, the Bank may suspend the Contactor’s drawdown under this credit facility or treat all debt balances as due and may not be required to notify the Contactor of any reasons for such suspension.

(5)

Unless otherwise agreed, the maturity date of any bill provided by the Borrower shall not fall over one hundred and eighty (180) days from the drawdown period hereunder.

2.

The Borrower agrees to the following when providing any endorsed bill to the Bank as collateral for debt performance or repayment:

(1)

Unless otherwise agreed, to facilitate bookkeeping, when the balance of all cashed bills receivable reached at least ___% of the credit amount hereunder, the Bank may directly use such amount to offset any and all debts owed by the debtor or the Borrower, and the Borrower shall still be liable for full repayment in case of any insufficiency.

(2)

After the foregoing bill receivable is cashed by the Bank, if the Bank agrees that the Borrower may provide the Bank with any bill receivable in the equivalent or greater amount, the Bank may deposit the foregoing cashed amount into the Borrower’s account maintained by the Bank, or transfer it into the Borrower’s other account at other financial institutions in accordance with the instruction of the Borrower. The Borrower shall be liable to the Bank for full repayment of debts whose amount shall still be determined based on the bills of exchange, loan certificates and/or applications etc.

(3)

In the event the foregoing bill of exchange is not cashed, and the Borrower or Guarantor fails to take actions after being notified by the Bank or is unable to be notified, the Bank may settle with the debtor with any amount lower than the face value of such bill of exchange, subject to the debtor’s financial conditions.

(4)

The Bank may from time to time request the Borrower to endorse any bill of exchange or the causation between the Borrower and the issuer (purchase agreement, service agreement or other debt agreements). The Borrower shall guarantee the debtor (issuer)’s solvency in respect of debt transfer and debt performance. The Bank may directly request full payment from the debtor (issuer) and use all amounts received to offset all the Borrower’s debts owed to the Bank; provided, however, that if such received amounts are insufficient to repay all Borrower’s debts owed to the Bank, the Borrower and the Guarantor shall be still held responsible.  

3.

The Borrower hereby declares that in the event any bill of exchange provided by it to the Bank for financing, regardless of any defect in such bill of exchange, causes any damage to the Bank, the Borrower agrees to surrender its term benefits and make prompt repayment of all its debts and compensate the Bank for the damages it suffers. The Borrower shall by no means refuse to repay or compensate with the excuse of any defect in such bill of exchange, or incomplete notification in accordance with the law, or statute of limitations. 

1.

The Borrower and the Guarantor hereby represent and warrant the following:

(1)

The Borrower and the Guarantor have full legal capacity to execute and perform the Agreement, and this Agreement shall constitute legally binding and valid obligations to the Borrower and the Guarantor.

(2)

Executing or performing the terms of the Agreement will not violate any law, regulations, company articles, bylaw, shareholder/director resolution, or any other agreements or documents entered into by the Borrower or the Guarantor; will not constitute any violation of any agreement or document that is binding to the Borrower or the Guarantor or any of its assets or income; will not require consent from any other party to such agreement or document (the Borrower or the Guarantor shall immediately provide proof which demonstrate its creditors’ consent to execution of the Agreement or other documentation at the request of the Bank).

(3)

The Borrower and the Guarantor have obtained all approvals, consents and registrations required by law for execution or performance of the Agreement.

(4)

All documents and data in respect of matters contemplated by the Agreement provided by the Borrower and the Guarantor to the Bank proactively or at the Bank’s request are true, correct and complete without any falsehood, concealment or misleading details. The Bank may rely on them in good faith and the Borrower and the Guarantor shall by no means defend or refuse to perform the Agreement for any reason.

(5)

The Contactor, the Guarantor, or any of its responsible persons, actual beneficial owners or controlling persons is not subject to any sanction or deemed as any terrorist or group by any foreign government or any international anti-money laundering organization or on the blacklist for sanction of the R.O.C. Ministry of Justice.

(6)

The Borrower and the Guarantor will cooperate with the Bank to review and provide information or their respective actual beneficial owners and controlling persons and will provide explanation as to the nature of transaction, purpose of transaction or source of funds upon request by the Bank.

2.

The Borrower and the Guarantor agree to be bound by the Agreement and its credit confirmation letter and each drawdown application, credit extension instrument, amendment and other related documents. Each of the foregoing documents shall constitute a part of this Agreement and shall have the same force and effect as the Agreement; provided, however, that in case of any inconsistency between any provision of the Agreement and that of any of the foregoing documents, the terms of the latter shall prevail as special provision to the Agreement. Any matter not set forth therein shall still be governed by the terms of the Agreement.

3.

The Agreement, applications and documents used for credit facility, and related guarantee documents may be made in Chinese and English; provided, however, that in the event of any discrepancy between the Chinese and English versions, the Chinese version shall prevail.

4.

Unless otherwise provided herein or agreed by both parties, the Agreement shall become effective as of the date of execution and shall continue to be valid and effective after the Borrower and the Guarantor have paid off all debts owed to the Bank with the consent to so terminate by the Bank.