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This Loan Agreement involves Comtech Group Inc . A Loan Agreement details the terms around an obligation by a Borrower to repay principal and interest provided by one or more lending parties. The loan agreement will frequently contain and provide for a number of representations and warranties of the borrower, along with other conditions, covenants and restrictions in relation to that loan.

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08/05/09
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Loan Agreement, Comtech Group Inc Loan Agreement, UNITED INFORMATION TECHNOLOGY CO. LTD. ..., Misc. Financial Services Loan Agreement

Comtech Group Inc Loan Agreement

EXHIBIT 10.1 AGREEMENT OF UNITED INFORMATION TECHNOLOGY CO. LTD. TABLE OF CONTENTS CONTENTS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 PAGE Agreement..........................................................4 Loan Advance.......................................................5 Restrictions on transfer...........................................5 Pre-emptive rights.................................................7 Use of the loan proceeds...........................................8 Business of the Company............................................8 Board of Directors.................................................9 Reserved matters..................................................10 Continuing obligations............................................10 Confidentiality...................................................11 Financial Projections.............................................11 Intellectual Property.............................................13 Disclosure........................................................14 Obligations of Management & Key Employees.........................15 Announcements.....................................................16 Notices...........................................................16 Severability......................................................16 General...........................................................16 Whole Agreement...................................................18 Governing Law.....................................................18 Schedule 1 (A) The Others Shareholders.......................................19 Schedule 1 (B) The Management Shareholders...................................20 Schedule 1 (C) List of officer, key employee and key engineer................21 2 Schedule 2 (A) Particulars of the Company....................................22 Schedule 2 (B) Particulars of the Subsidiary.................................23 Schedule 3 Reserved Matters..................................................24 Schedule 4 Continuing Obligations............................................27 Schedule 5 Financial Projection..............................................29 Schedule 6(A) & 6(B) Milestone for Financial Projection......................31 Schedule 7 Intellectual Property List........................................33 3 1. 1.1 AGREEMENT THIS AGREEMENT (this "AGREEMENT") is made on 12 May, 2005 by and among Comtech Group ("COMTECH"), a company incorporated and existing under the laws of the Cayman Islands, United Information Technology Co. Ltd., a company incorporated and registered in British Virgin Islands ( the "COMPANY"), [CHINESE HERE] a wholly foreign owned enterprise established in the People's Republic of China (the "SUBSIDIARY"), certain individuals listed on Schedule 1(A) hereto (the "OTHER SHAREHOLDERS") and the management team list on Schedule 1(B) (the "MANAGEMENT SHAREHOLDERS"). NOTE: "GROUP" OR "GROUP COMPANIES" MEANS THE COMPANY AND ITS SUBSIDIARY FROM TIME TO TIME AND "GROUP COMPANY" MEANS ANY OF THEM 1.2 (A) WHEREAS: The Company is a company limited by shares which is currently wholly owned by Comtech, particulars of which are set out in Schedule 2(A). The Subsidiary is a wholly foreign owned enterprise legally and beneficially owned by the Company, particulars of which are set out in Schedule 2(B). Comtech intends to inject into the Company an aggregate sum of USD4,000,000 loan advance to the Company. Comtech, the Company and the Other Shareholders have agreed to enter into this Agreement for the purposes of (i) recording the terms and conditions on which Comtech will extend the loan, and (ii) regulating the relationship between the shareholders of the Company and certain (B) (C) aspects of the affairs of the Group Company. 4 2. 2.1 LOAN ADVANCE The loan advance by Comtech to the Group Company set out in the table below: ADVANCE BY COMTECH COMTECH AMOUNT USD 2,500,000 1,500,000 --------4,000,000 (Note) NOTE: (1) COMTECH CAN PAY OTHER CURRENCIES EQUIVALENT TO USD4M AS LOAN ADVANCE TO THE GROUP COMPANY. (2) IF MILESTONE A HAS FAILED TO ACHIEVE, THE SHORTFALL CAN BE COMPENSATED IN NEXT INTERVAL. COMTECH HAS ABSOLUTE DISCRETIONARY AUTHORITY TO DETERMINE TO FURTHER ADVANCE THE LOAN OF USD1.5M TO THE COMPANY OR NOT UNTIL THE MILESTONE A HAS ACHIEVED. 3. 3.1 RESTRICTIONS ON TRANSFER: RIGHT OF FIRST REFUSAL & PRIORITY CO-SALE RIGHT Other Shareholders hereby severally, irrevocably and unconditionally undertakes with Comtech that he shall not sell, transfer or otherwise dispose of or create any mortgage, charge, pledge, lien or other encumbrance, third party rights or security interest whatsoever on or over or in respect of all or any of the shares in the Company (or any interest therein) without the prior written approval of Comtech. (a) Subject to Clause 3.1, if any Other Shareholder (the "TRANSFERRING SHAREHOLDER") proposes to sell, pledge, or otherwise transfer any Shares (the "STOCK") or any interest therein to any person or entity then the other holders of any Stock at the time (the "NON-TRANSFERRING SHAREHOLDERS") shall have a right of first refusal (the "RIGHT OF FIRST REFUSAL") to purchase some or all of the Stock proposed to be sold. The Transferring Shareholder shall give a written notice (the "TRANSFER NOTICE") to the Non-transferring Shareholders describing fully the 5 proposed transfer, including the number of Stock proposed to be transferred, the proposed transfer price, the name and address of the DATE no later than 15 May 2005 1 August 2005 3.2 proposed transferee, and whether the Company has exercised its right of first refusal, if any, with respect to that Stock. The Transfer Notice shall be signed both by the Transferring Shareholder and by the proposed transferee, and shall constitute a binding commitment of both parties for the transfer of that Stock. Each Non-transferring Shareholder shall then have the right to purchase the ratio of (a) the total number of Shares or Shares Equivalents of a Non-transferring Shareholder to (b) the total number of Shares and Share Equivalents held by all Non-transferring Shareholders (its "PRO RATA SHARE") of the Stock subject to the Transfer Notice at a price per share equal to the proposed per share transfer price, and on the same terms and conditions applicable to the proposed transfer, by delivery of a notice of exercise of its Right of First Refusal within 20 days after the date the Transfer Notice is delivered to the Non-transferring Shareholder. To the extent the Non-transferring Shareholders exercise their Right of First Refusal in accordance with the terms and conditions set forth in this Clause 3, the number of Shares that the Transferring Shareholder may sell to the proposed transferee in the transaction shall be correspondingly reduced. 3.3 If the Transferring Shareholder proposes to sell, pledge, or otherwise transfer any Stock or any interest therein to any person or entity, including another Shareholder, and not all Non-transferring Shareholders have elected to exercise their Right of First Refusal under Clause 3.2, then each Non-transferring Shareholder shall have the right, exercisable upon written notice to the Transferring Shareholder within 20 days after the date the Transfer Notice is delivered to the Non-transferring Shareholders, to participate in the sale of Stock on the same terms and conditions as the Transferring Shareholder to the extent of that Non-transferring Shareholder's Pro-rata Share (the "CO-SALE RIGHT"). Notice of exercise of a Co-Sale Right shall indicate the number of Shares the Non-transferring Shareholder wishes to sell under its Co-Sale Right. Any Non-transferring Shareholder may elect to sell all or some of the shares of Stock then held by that Non-transferring Shareholder (or issuable upon conversion or exercise of any convertible debt, warrants, or similar securities then held by the Non-transferring Shareholders). To the extent the Non-transferring Shareholders exercise their Co-Sale Right in accordance with the terms and conditions set forth in this Clause 3.3, the number of Shares that the Transferring Shareholder may sell in the transaction shall be correspondingly reduced. 6 3.4 If the Non-transferring Shareholders do not exercise their Right of First Refusal or their Co-Sale Right with respect to the sale of the Stock subject to the Transfer Notice, the Transferring Shareholder may, not later than 60 days following delivery to the Company and the Non-transferring Shareholders of the Transfer Notice, conclude a transfer of all of the Stock covered by the Transfer Notice on terms and conditions not more favourable to the transferor than those described in the Transfer Notice. Any proposed transfer on terms and conditions more favourable than those described in the Transfer Notice, as well as any subsequent proposed transfer of any Stock by the Transferring Shareholder, shall again be subject to the Right of First Refusal and Co-Sale Right of the Non-transferring Shareholders and shall require compliance by the Transferring Shareholder with the procedures described in this Clause 3. 3.5 Notwithstanding the above, Comtech may transfer all or any of their Shares to their Affiliates provided always that the transferee shall agree in writing with the Company (for itself and as trustee for all the Shareholders), as a condition to such transfer, to be bound by all of the provisions of any agreement relating to the Company then subsisting to the same extent as if such transferee were the transferor Shareholder. Any sale, assignment, transfer or disposal of Shares or Shares Equivalents not permitted by or in accordance with this Agreement or the Articles shall be null and void. PRE-EMPTIVE RIGHTS If the Company desires to issue Shares and/or Shares Equivalents in a transaction or series of transactions intended to raise capital ("FUND RAISING ISSUANCE") for the Company or any of its Subsidiaries, then the Shareholders shall procure that the Company shall first notify Comtech of the terms and conditions of such proposed issue and shall permit Comtech (without obligat