Circular on ICBC Deposit-Loan Link Service under Personal Loan

Party A: ICBC

Party B: 王丹

 

    In connection with Party A's wish to apply for Party B's Deposit-Loan Link service under personal loan and for considerations deemed by the parties to be mutually acceptable, the parties agree to enter into the following agreement to clarify the right and obligation of both parties.

    Article I Definition

    (I) Party A has the option to apply for the Deposit-Loan Link service once applying for RMB loan from Party B, at the consent of Party B. Party A shall open Deposit-Loan Link account and associate with the loan applied at Party B. During the association period, Party B shall see the situation of the daily deposit balance in the Party A's Deposit-Loan Link account at the end of each business day and pay the value-added income to Party A according to the terms and calculation rules stated in this Agreement.

    (II) Daily deposit balance of Deposit-Loan Link account means the daily balance of RMB current deposit in Party A's matching deposit account at the end of each business day.

    (III) Value-added income means the value-added income to Party A. During the association period, Party B shall see the situation of the deposit balance in the Party A's Deposit-Loan Link account at the end of each business day and pay the value-added income regularly into Party A's Deposit-Loan Link account according to the terms and calculation rules stated in this Agreement.

    (IV) After opening the Deposit-Loan Link account, Party A should pay loan interest to Party B before receiving value-added income on condition that the loan principal has not been used to offset the loan.

    (V) "Daily interest rate of current deposit" in this Agreement means:

    The benchmark rate of PBOC for current deposit，converted to daily rate if quoted as annual rate.

    Article II Deposit-Loan Link account

    The Deposit-Loan Link account stated in this Agreement is a personal settlement account opened for Party A at Party B and associated with the Party B's loan.

    Party B shall collect account management fee from Party A every year. If the remaining months of the year signing the agreement or the remaining months of the loan is less than one year, the fee will be collected on annual basis.

    Article III Association between deposit account and loan

    In case the Party A's loan applied in Party B meets the following conditions, the loan will be associated with Party A's Deposit-Loan Link account starting from the date of this Agreement in force:

    1. Deposit-Loan Link account is the personal settlement account opened for Party A at Party B;

    2. No overdue loan principal and interest not repaid from the date Party A applying for loan from Party B till signing of this Agreement. No bad repayment record during the loan period. Ratio of total default times to total repayment periods is less than 10%, and no record of default for two successive periods. For over RMB 100,000 in loan balance when applying for this agreement, more than 12 months of repayment periods remains.

   After Party A's loan has been associated with Deposit-Loan Link account, when the principal and interest of the loan have all been settled (including early settlement) or changes in the repayment account, the disassociation will take place starting from the settlement date of loan principle and interest or the date when the repayment account has been changed. Party B will stop the payment of value-added income to Party A starting from the date of disassociation. If Party A has more than one loan associated with the Deposit-Loan Link account and one loan or more than one have been disassociated with the Deposit-Loan Link account, no impact to other loans with principal and interest not fully settled or loans with repayment account changed on their associated relation with the Deposit-Loan Link account.

    Article IV Calculation of value-added income

    Party A has the following two options to choose from for the calculation of value-added income:

    1. Fixed ratio

    2. In segment

    Details of the two calculation options:

    I、Fixed ratio

    Party B calculates the value-added income to Party A every day based on the deposit balance in Party A's Deposit-Loan Link account at the end of each business day, as below:

    (I) When deposit balance in the Deposit-Loan Link account at the end of the business day is less than or equal to the initial offset amount of RMB x ('0000): the value-added income for the day = 0.

    (II) When deposit balance in the Deposit-Loan Link account at the end of the business day is more than the initial offset amount of RMB x ('0000), if no overdue in any loan (including Party A's loan not associated with the Deposit-Loan Link account) of Party A on the day, the value-added income for the day = ( deposit balance in the Deposit-Loan Link account at the end of the business day - initial offset amount of RMB x ('0000) x y％ x (interest rate of the loan associated with Deposit-Loan Link account – annual interest rate of current deposit) / 360; If more than one loan associated with the Deposit-Loan Link account, Party B shall apply the above rules to calculate the "value-added income" for each loan according to the loan account sequence specified by Party A (see application approval form). No repeated calculation on the initial amount of deposit balance.

    (III) Each loan can enjoy value-added income base ≤ loan balance x y%.

    Example: a customer has two loans A, B with balance of RMB 100,000 and RMB 150,000 respectively. Offset for loan A first, then loan B, deposit balance is RMB 230,000, loan rate: 5.81%, interest rate for current deposit: 0.72%, x=5, y=80%, offset as follows:

    RMB 150,000 (deposit) is used to offset loan A, no offset for initial offset amount under RMB 50,000, offset limit: 5x0% + 10x80% = RMB 80,000

    After offset for loan A, the customer will receive an annual value-added income of 8 x (5.81% - 0.72%) = RMB 4072. Deposit balance not yet offset is RMB 80,000. Based on the rule not to repeatedly calculate the initial offset amount, 80% of the remaining deposit will be used to offset loan B, offset limit: 8x80%=RMB 64,000, annual value-added income: 6.4 × (5.81%-0.72%) = RMB 3258. Total value-added income for the year：RMB 4072+ RMB 3258 = RMB 7330.

    The customer continues to pay interest on amount of loan B not offset.

    II、In segment

    Party B calculates the value-added income to Party A every day based on the deposit balance in Party A's Deposit-Loan Link account at the end of each business day, using the below calculating table:

    (I) When deposit balance in the Deposit-Loan Link account at the end of the business day is less than or equal to the initial offset amount of RMB a ('0000), the value-added income for the day = 0.

    (II) When deposit balance in the Deposit-Loan Link account at the end of each business day is more than the initial offset amount of RMB a ('0000), the above table will be used to estimate the amount of value-added income. If more than one loan associated with the Deposit-Loan Link account. Party B shall apply the above rules to calculate the "value-added income" for each loan according to the loan account sequence specified by Party A (see appendix I: application approval form). After the calculation of value-added income for the first loan, the remaining deposit balance will be associated with the second loan and included into the appropriate offset level. No repeated calculation on the initial offset amount.

    (III) Each loan associated with the Deposit-Loan Link account can enjoy value-added income base ≤ loan balance.

    Example: a customer has two loans A, B with balance of RMB 100,000 and RMB 150,000 respectively. Offset for loan A first, then loan B, deposit balance is RMB 230,000, loan rate: 5.81%, interest rate for current deposit: 0.72%, value-added income is calculated as below:

    Offset as below:

    RMB 220,000 (deposit) is used to offset loan A, no offset for initial offset amount under RMB 20,000, the remaining amounts are multiplied by the ratio of respective offset level, offset limit: 2?%+3?0%+5?0%+12?0%= RMB 100,000

    After offset for loan A, the customer will receive an annual value-added income of 10?(5.81%-0.72%) = RMB 5900. The deposit balance at this time is RMB 10,000. Based on the rule not to repeatedly calculate the initial offset amount and directly put into second level (RMB 20,000-RMB 50,000), use 10% offset rate to offset loan B, offset limit: 1?0%= RMB1,000, annual value-added income: 0.1?(5.81%-0.72%)= RMB 50. Total value-added income for the year: RMB 5900+ RMB 50 = RMB 5950.

    Article V Payment of value-added income

    (I) If the conditions of this Agreement are met, Party B shall pay "value-added income to Party A" directly to the Deposit-Loan Link account on the monthly payment date as agreed. The income cycle is usually one month. First income cycle starts from the date of this Agreement in force until the income payment date for the month or the date of termination of this Agreement. Party B shall not pay the income to Party A if Party A closes the Deposit-Loan Link account before income payment as agreed.

    (II) Party B should immediately start to pay value-added income to Party A from the date when Party A's Deposit-Loan Link account has been associated with respective loans.

    Article VI Special Terms

    (I) If any loan applied by Party A at Party B (including loans not associated with Deposit-Loan Link account) has overdue, Party B will not pay "value-added income" to Party A on the loan from the current date, until Party A repays all the overdue principal and interest. Party B will recover the payment of "value-added income" to Party A starting from the date of the overdue principal + interest has been settled. Party A can deduct the deposit from the Deposit-Loan Link account to repay the overdue principal and interest.

    (II) If any loan applied by Party A at Party B (including loans not associated with Deposit-Loan Link account) has been overdue for three times (inclusive) and above starting from the date of this Agreement is in force, Party B reserves the right to unilaterally terminate this Agreement.

    (III) If the loan associated with Party A's deposit-loan account is the loan jointly applied by Party A and other borrowers from Party B, then other borrowers should agree to apply for Deposit-Loan Link service and supply written opinion or authorization.

    Article VII Agreement validity

    (I) Conditions for Entry into Force

    The present Agreement comes into force from the date of signing by Party A and Party B's authorized person with Party B's stamp affixed.

    (II) Conditions for Termination

    Once this Agreement is terminated in the event of any of the following, Party B shall stop providing deposit-loan-link service starting from the date of termination:

    1. Party B reserves the right to unilaterally terminate this Agreement in case of Party A involving in major litigation or other events that may damage Party A's ability to repay the loan. For example: Party A's property (including but not limited to Deposit-Loan Link account) is frozen, withheld or seized as required by law, or Party A fails to comply with the performance of other loan contracts;

    2. During the performance of this agreement, this Agreement shall be terminated as required by the national laws, regulations, policy, government department or Party B's senior organizations, or major changes in the interest rate;

    3. Meet the conditions stated in Article VI (II) of this agreement;

    4. On the day when Party A closes Deposit-Loan Link account in advance;

    5. Party A has delayed payment of Deposit-Loan Link account's management fee for more than three periods;

    6. Reach the conditions stated in this Agreement of disassociating the relation (excluding partial disassociation) between Party A's loan and Deposit-Loan Link account;

    7. Other termination conditions agreed between Party A and Party B.

    Article VIII After signing of this Agreement by Party A and Party B, it does not imply amendments to the loan contract or other credit facility contract signed by the two parties before, nor any change on the rights and obligations of Party A stated in the above-mentioned contracts. Party A still has to follow the rules stated in these contracts to repay in full the principal and interest of loan to Party B as scheduled.

    Article IX Party A warrants that the source of funds in the Deposit-Loan Link account is legal and shall not use the Deposit-Loan Link account to engage in illegal activities.

    Article X Party A and Party B shall pay own taxes according to the laws and regulations.

    Article XI The supplementary agreements to this Agreement are an integral part of this Agreement having the same force and effect.

    Article XII All disputes or differences which may arise in the time of fulfillment of this Agreement shall be settled through mutual discussion between both parties. Should no consensus be reached, both parties agree to pursue remedies in law at the People's Court located in the same place as Party B.

    Article XIII In case of any other right and obligation not related to this Agreement (such as rights and obligations agreed in the deposit and loan contract) have not been fulfilled after termination of this agreement, both parties should execute the former contracts as agreed.

    Article XIV Both sides agreed that any matter not mentioned herein or business terminology involved shall be proceeded according to Party B's services rules and financial practices.

    Article XV Party A hereby states：Party A has read carefully this Agreement herein. At the request of Party A, Party B has explained the related terms and conditions. Party A fully understands and accepts the terms of this Agreement and related legal obligations and the risk may be incurred. Party A is willing to carry out the rights and obligations of this Agreement.

    Article XVI This agreement is printed in three originals, one for Party A, two for Party B, all of them having the same legal force.