VIP LOAN TERMS
Version: 19 October 2023
These VIP Loan Terms (this “Agreement”) shall apply to your participation in the Binance VIP Loan Program, a program that the particular Binance entity as set out in the agreed Loan Term Sheet, as defined below, (“Binance”) offers to you, that is, borrowing cryptocurrencies using your existing digital assets as collateral.
This Agreement shall take effect as soon as you first participate in the Binance VIP Loan Program or acknowledge your acceptance of these terms or any Loans Term Sheet (as determined by Binance, and including by your action of clicking “Agree” or similar in the relevant submission fields relevant to this Agreement, or your receipt of a Loan).
By utilising the VIP Loan Request page, you may submit your loan requirements, setting out the particular terms of each Loan to be agreed between the parties through the online submission process. Once agreed and confirmed, subject to the terms of this Agreement, you will receive a copy of the agreed Loan Term Sheet for your records. After accepting your Loan Term Sheet and following our receipt of sufficient Collateral, subject to the terms of this Agreement, the Loan will be released to your Borrower Account within five (5) Business Days (as defined below).
For the purposes of this Agreement references to “Borrower” shall be references to you and references to “Lender” are references to Binance.
This Agreement is to be read together with the Binance Terms of Use as may be amended from time to time (“Binance Terms of Use”). In the event of any conflict or inconsistency between the terms in this Agreement and the Binance Terms of Use, the terms in this Agreement shall prevail with respect to the services contemplated hereunder, unless expressly stated otherwise. Unless otherwise stated in this Agreement, the Binance Terms of Use shall remain unchanged.
1. Definitions
“Affiliates” means, in relation to a company, an entity that such company controls, is controlled by or is under common control with, or any of their respective legal successors. For the purposes of this definition, “control” means the possession, directly or indirectly, of the power to elect or dismiss a majority of the board of directors (or other governing body) or to direct or cause the direction of the management and policies of such party, entity or person, whether through ownership of voting securities or otherwise;
“Airdrop” means a distribution of a new token or tokens resulting from the ownership of a pre-existing token. For the purposes of Section 5, an “Applicable Airdrop” is an Airdrop for which the distribution of new tokens can be definitively calculated according to its distribution method, such as a pro rata distribution based on the amount of the relevant Digital Currency held at a specified time or an Airdrop for which the distribution of new tokens cannot be definitively calculated, such as a random distribution, a distribution to every wallet of the relevant Digital Currency, or a distribution that depends on a wallet of the relevant Digital Currency meeting a threshold requirement.
“Borrower” means the party who is the recipient of the Loan and who has agreed to and accepted the terms of this Agreement and the Loan Documents.
“Borrower Account” means the Borrower’s account or sub-account on the Exchange that the Loan will be made available to.
“Borrowed Amount” refers to the value of the Loaned Assets in U.S. dollars on the Loan Effective Date.
“Borrower Email” means a registered email address of the Borrower Account.
“Business Day” means a day (other than a Saturday, Sunday, or a public holiday in Hong Kong) on which commercial banks in Hong Kong are open for business.
“Call Option” means the option of the Lender to demand payment of a portion or the entirety of the Loan Balance at any time, subject to this Agreement.
“Collateral” is defined as set forth in Section 4.1.
“Collateral Account(s)” is/are set out in the relevant Loan Term Sheet.
“Collateral Amendment” is defined as set forth in Section 4.1.
“Collateral Discount” is defined as set forth in Section 4.1.
“Collateral Level” is defined as set forth in Section 4.1.
“Digital Assets” means any Digital Currency deposited as Collateral in the Collateral Account(s) .
“Digital Currency” means Bitcoin (“BTC”), Bitcoin Cash (“BCH”), Ethereum (“ETH"), Ethereum Classic (“ETC”), Litecoin (“LTC”), or any digital currency that the Borrower and Lender agree upon.
“End of Day” means 5:00 pm Hong Kong time.
“Event(s) of Default” is defined as set forth in Section 8.
“Exchange” means Binance.com, the exchange platform which the Lender and/or its Affiliates operates and controls.
“Fixed Rate Mode” means a fixed interest rate.
“Flexible Rate Mode” means a variable interest rate that will be updated every day. Reference interest rate: https://www.binance.com/en/vip-loan)
“Hard Fork” means a permanent divergence in the blockchain (e.g., when non-upgraded nodes cannot validate blocks created by upgraded nodes that follow newer consensus rules, or an Airdrop or any other event which results in the creation of a new token).
“Index Price” means the corresponding indexed price as set out under the ‘Price Index’ tab provided at https://www.binance.com/en/loan/data or such other price as designated by Binance from time to time.
“Lender” means the Binance entity set out in the Loan Term Sheet.
“Lender Insolvency Event” means any bankruptcy, insolvency, or liquidation proceedings or other proceedings for the relief of debtors or dissolution proceedings that are instituted by or against the Lender and/or its Affiliates which; (i) are not dismissed within thirty (30) days of the initiation of said proceedings; and (ii) prevent the Lender and/or its Affiliates from continuing to operate the Exchange for the foreseeable future.
“Loan” means a loan of Digital Currency made or to be made pursuant to and in accordance with this Agreement and a Loan Term Sheet.
“Loan Balance” means the sum of all outstanding amounts of Loaned Assets, including New Tokens, and Loan Interest, other interest and any Late Fees, Hard Fork Fee or other fees for a particular Loan.
“Loan Documents” means this Agreement and any and all Loan Term Sheets entered into between the Lender and the Borrower.
“Loan Effective Date” means the Loan Start Date as set forth in the relevant Loan Term Sheet.
“Loaned Assets” means any Digital Currency amount transferred in a Loan hereunder until such Digital Currency (or identical Digital Currency) amount is transferred back to the Lender hereunder, except that, if any new or different Digital Currency is created or split by a Hard Fork or other alteration in the underlying blockchain and meets the requirements set forth in this Agreement, such new or different Digital Currency shall be deemed to become Loaned Assets in addition to the former Digital Currency. For purposes of return of Loaned Assets by the Borrower or purchase or sale of Digital Currencies pursuant to Section 9, such term shall include Digital Currency of the same quantity and type as the Digital Currency, except that, if any new or different Digital Currency is created or split by a Hard Fork or other alteration in the underlying blockchain and meets the requirements set forth in this Agreement, such new or different Digital Currency shall be deemed to become Loaned Assets in addition to the former Digital Currency for which such exchange is made.
“Loan Interest” is the interest accrued under the Loan.
“Loan Term Sheet” means the agreement between the Lender and the Borrower on the particular terms of an individual Loan, subject to this Agreement, as agreed between the parties through the online submission process.
“Maturity Date” means the predetermined future date upon which a Loan becomes due in full as set forth or calculated in accordance with the Loan Term Sheet, or as otherwise mutually agreed by Parties.
“Open Loan” means a Loan without a set Maturity Date (Maturity Date will be determined at a later date, such as upon Recall Request).
“Party” means the Borrower or the Lender and “Parties” means the Borrower and the Lender.
“Prepayment Option” means the Borrower has the option to repay or return the Loan Balance prior to the Maturity Date, subject to this Agreement.
“Recall Amount” is defined as set forth in Section 2.3.2.
“Recall Delivery Deadline” is defined as set forth in Section 2.3.2.
“Recall Request” is defined as set forth in Section 2.3.2.
“Term” means the period from the Loan Effective Date through Termination Date.
“Term Loan” means a Loan with a predetermined Maturity Date.
“Termination Date” means the date upon which a Loan is terminated.
“Transactions” means any transactions in Digital Currency or any other products which the Lender may from time to time permit to be carried out under the Collateral Account(s) in the spot market. For the avoidance of doubt, Transactions do not include any transactions in derivatives, futures, and/or options.
2. Loan
2.1. In accordance with this Agreement, upon the Borrower’s request, the Lender will make a Loan to the Borrower for a specified amount of Digital Currency, and the Lender shall extend (or shall procure that the Lender’s affiliate extends) such Loan on terms acceptable to the Lender and as set forth in a corresponding Loan Term Sheet.
2.2. The Lender will commence, itself or through the Lender’s affiliate, transmission to the Borrower Account in accordance with the Loan Term Sheet upon receiving sufficient Collateral as set forth in Section 4.
2.3. Loan Repayment
2.3.1. Unless otherwise specified in subsections 2.3.2 and 2.3.3 below or as otherwise explicitly agreed in the relevant Loan Term Sheet, upon the earlier of the Maturity Date, the Recall Delivery Deadline (as defined below), or the Redelivery Day (as defined below) for a Loan, the Borrower shall repay the entirety of the Loan Balance to the Lender by the End of Day of such date.
2.3.2. For all Loans, the Lender has a Call Option as set out in the relevant Loan Term Sheet whereby the Lender may at any time, and on any number of occasions (the “Recall Request”) demand repayment of a portion or the entirety of the Loan Balance (the “Recall Amount”). The Lender will notify the Borrower in writing to the Borrower’s Email or any other communication tools (such as Telegram). The Borrower will have until the deadline as set out in the Recall Request (the “Recall Delivery Deadline”) to deliver the Recall Amount. In the event of a Call Option where the Lender demands only a portion of the Loan Balance, the Borrower shall repay said portion of the Loan Balance on the Recall Delivery Deadline and the remaining portion of the Loan Balance on the earlier of the Maturity Date or the subsequent Recall Delivery Deadline.
2.3.3. For all Loans, the Borrower has a Prepayment Option whereby the Borrower may notify the Lender in writing at any time of its intent to immediately return all or a portion of the Loan Balance prior to maturity. The Borrower shall provide said notice prior to or on the date on which the Borrower will repay all or a portion of the Loan Balance (said later date, the “Redelivery Day”). The Borrower’s exercising of its Prepayment Option shall not relieve it of any of its obligations herein, including without limitation its payment of owed Late Fees and interest payable under this Agreement. Once the said notice has been provided to the Lender, unless consented in writing by the Lender, it shall be irrevocable and any failure to repay the Loan Balance on the Redelivery Day shall constitute an Event of Default. In the event of a Prepayment Option where the Borrower repays only a portion of the Loan Balance, the Borrower shall repay said portion of the Loan Balance on the Redelivery Day and the remaining portion of the Loan Balance on the earlier of the Maturity Date, Recall Delivery Deadline, or subsequent Redelivery Day. In the event of an exercise of a Prepayment Option by the Borrower, and on the condition that the Borrower has returned to Lender the relevant portion of a relevant Loan (including any relevant accrued interest and Late Fees), Borrower may immediately, after giving the Lender 24 hours’ notice, withdraw applicable Collateral so long as the Collateral Level is maintained at all times.
2.4. A Loan will terminate upon the earlier of:
2.4.1. the repayment of the Loan Balance by the Borrower prior to the Maturity Date in accordance with Section 2, Section 4 or Section 9;
2.4.2. the repayment of the Loan Balance by the Borrower on the Maturity Date; or
2.4.3. either party giving the other 24 hours’ notice.
2.5. The Lender shall never be obliged to make a Loan to the Borrower, and in addition (without limitation) in no circumstances shall the Lender be obliged to make a Loan to the Borrower if:
2.5.1. in the Lender’s opinion, it deems that in the event any or all of the Loan Balance becomes at risk of being: (a) considered a security, swap, derivative, or other similarly-regulated financial instrument or asset by any regulatory authority, whether governmental, industrial, or otherwise, or by any court of law or dispute resolution organization, arbitrator, or mediator; (b) subject to any laws or regulations concerning the provision of consumer or retail credit, or (c) subject to future regulation materially impacting this Agreement, the Loan, or the Lender’s business; or
2.5.2. an Event of Default has occurred and is continuing or would occur as a result of the proposed Loan.
3. Loan Interest, Late Fees and Taxes and Fees
3.1. Loan Interest
Unless otherwise agreed, the Borrower agrees to pay the Lender a financing fee for each Loan (the “Loan Interest”). When a Loan is executed, the Borrower shall pay the Loan Interest as agreed herein and annualized in the relevant Loan Term Sheet, subject to any changes as agreed by the Borrower and the Lender. Unless otherwise agreed between the Borrower and the Lender, the Loan Interest shall accrue from and include the date on which the Loaned Assets are transferred to the Borrower to the date on which such Loan Balance are repaid in their entirety to the Lender. For any Loan, the minimum Loan Interest shall be the Loan Interest that would accrue for one (1) day.
The Lender shall calculate any Loan Interest owed on a daily basis and provide the Borrower with the calculation upon request. The Loan Interest will be calculated off all outstanding portions of the Loaned Digital Currencies.
3.2. Payment of Loan Interest
Unless otherwise agreed, any Loan Interest payable hereunder shall be paid by the Borrower upon the earlier of (a) five (5) Business Days after receipt of written notice from Lender or (b) the termination of all Loans hereunder (the “Payment Due Date”). The Loan Interest shall be payable, unless otherwise agreed between the Borrower and the Lender in the Loan Term Sheet, in the Digital Currency on the same blockchain and of the same type that was loaned by the Lender during the Loan.
Notwithstanding the foregoing, in all cases, all Loan Interest shall be payable by the Borrower immediately upon the occurrence of an Event of Default.
The Borrower shall not be entitled to take out any other Loans until any and all of the outstanding Loan Interest under any Loan that has been terminated/expired has been paid to the Lender.
3.3. Late Fee
For each calendar day that the Loan Balance or Recall Amount remains outstanding after the Maturity Date, the Redelivery Day or the Recall Delivery Deadline (whichever is applicable), the Borrower shall incur a late interest fee calculated on a daily basis using three times the interest rate specified in the Loan Term Sheet, and
notwithstanding the above, in respect of any Call Option exercised by the Lender where the Recall Delivery Deadline is less than twenty-four (24) hours, the late interest fee shall be calculated on an hourly basis using the prevailing interest rate for Flexible Rate Mode for the relevant Digital Currency (unless such other interest rate is specified in the Recall Request),
(together being the “Late Fee”).
If a Late Fee is imposed under this Section 3.3 due to an event that would constitute an Event of Default under Section 8, the imposition of a Late Fee by the Lender does not constitute a waiver of its right to declare an Event of Default for the same event. The Borrower and the Lender acknowledge and agree that the Late Fee is not the imposition of a penalty.
3.4. Payment of Late Fees
Unless otherwise agreed, any Late Fees payable hereunder shall be paid by the Borrower on written demand by the Lender or the termination of the Loan hereunder, whichever is earlier (the “Payment Due Date”). The Late Fees shall be payable, unless otherwise agreed between the Borrower and the Lender in the Loan Term Sheet, in the Digital Currency on the same blockchain and of the same type that was loaned by the Lender during the Loan.
Notwithstanding the foregoing, in all cases, all Late Fees shall be payable by the Borrower immediately upon the occurrence of an Event of Default.
3.5. Taxes and Fees
All transfer or other taxes or third party fees payable with respect to the transfer, repayment, and/or return of any Loan Balance or Collateral hereunder shall be paid by the Borrower unless such transfer or other taxes or third party fees are payable as a result of the Lender assigning this Agreement pursuant to Section 19 below.
4. Collateral Requirements
4.1. Collateral
Unless otherwise agreed by the Parties, or modified in the Loan Term Sheet or as set forth below, the Borrower shall provide an amount of Digital Currency (such choice at the sole discretion of the Lender) as collateral (“Collateral”). Unless otherwise agreed by the Parties in the Loan Term Sheet, the Collateral shall initially be 138.88% of the value of the Loaned Assets, such value determined by the Index Price as determined by the Lender, acting reasonably (“Collateral Level”). The Borrower shall, prior to or concurrently with the transfer of the Loan Balance to the Borrower, but in no case later than the End of Dayon the day of such transfer, transfer to the Lender the Collateral.
The Lender may determine that the value of the Collateral, or any part of the Collateral, is less than the Index Price at any time (“Collateral Discount”). The Lender may also amend which Digital Currency can be used as Collateral from time to time (“Collateral Amendment”). The Collateral Discount and Collateral Amendment will not apply until after the Lender has provided at least three (3) days’ notice to the Borrower.
The Borrower shall provide the Collateral to the Lender in Digital Currency in an amount equal to the value of the Collateral in U.S. Dollars at the Index Price determined by the Lender. For the avoidance of doubt, upon the repayment of the Loan Balance in full at the termination of a Loan, the Lender shall release to the Borrower the Collateral that was deposited, net of any Additional Collateral (as defined below in Section 4.3). If a Hard Fork in the blockchain of the Digital Currency serving as Collateral meeting the criteria in Section 5 occurs while the Lender is holding Digital Currency as Collateral, the Lender shall release the New Tokens (as defined in Section 5) to the Borrower upon the repayment of the Loan Balance in full at the termination of the Loan. If such a Hard Fork occurs that does not meet the criteria in Section 5, the Lender shall have no obligation to return any New Tokens to the Borrower.
The Collateral shall be transferred by the Borrower to the Collateral Account(s) and shall be held to the credit of the Collateral Account(s). When the Lender transfers or otherwise deals with Digital Assets in the Collateral Account(s), the Lender will not be deemed to have used any specific Digital Assets, however identifiable, to make such transfer or dealing.
This Collateral Account(s) is/are owned by the Borrower and the Borrower shall have the right to effect Transactions through the Collateral Account(s), subject always to the Borrower’s obligation to ensure that the value of the Collateral does not fall below the Margin Call Level. The Lender shall bear no responsibility for any change in value of the Collateral as a result of the Transactions executed by the Borrower and the Borrower shall be solely responsible for monitoring any such change in value. During the term of this Agreement, the Lender shall have access to the Collateral Account(s) and have the right to reduce stock and execute mandatory liquidation or other necessary conduct at the Lender’s discretion in the situations listed in Section 4.3.
To the extent that the Borrower has such rights, it hereby pledges with, assigns to, and grants the Lender a continuing first priority security interest in, and a lien upon, the Collateral, which shall attach upon the transfer of the Loaned Assets by the Lender to the Borrower and which shall cease upon the repayment of all Loan Balances in full by the Borrower, owed to the Lender. During the Term of any Loan hereunder, the Borrower agrees, acknowledges, authorises and affirms the Lender’s (or its designee) enforcement upon the Collateral (in any Collateral Account(s)) and any of the Lender’s set-off rights after the occurrence and during the continuance of any Event of Default pursuant to the terms of this Agreement.
4.2. Loan and Collateral Transfer
If the Lender transfers Loaned Assets to the Borrower and the Borrower does not transfer the Collateral to the Collateral Account(s) as provided in Section 4.1, the Lender shall have the absolute and immediate right to the return of the Loaned Assets; and if the Borrower transfers Collateral to the Lender, as provided in Section 4.1, and the Lender does not transfer the Loaned Assets to Borrower within the period as set forth in Section 2.2, the Borrower shall have the absolute right to the Collateral.
4.3. Margin Calls and Liquidation
The Borrower acknowledges that it is responsible for monitoring the value of Collateral in order to avoid the possibility of an Event of Default or liquidation, failing which the Lender shall have the right to take any such action set out under this Section 4.3 without prior notice to the Borrower.
If during the Term of a Loan the value of the Loan Balance increases, or the value of the Collateral decreases, so that the value of Collateral becomes equal to or below 130% of the Loan Balance (the “Margin Call Level''), the Lender may draw on any Digital Currency held to the credit of any of the Collateral Accounts (“Additional Collateral”) to repay and reduce the Loan Balance in accordance with Section 4.4 below so that the Collateral is at least the same percentage indicated in Section 4.1 relative to the value of the Loan Balance. Failure to provide the Additional Collateral within two (2) hours of the value of Collateral falling below the Margin Call Level shall give the Lender the option to declare an Event of Default under Section 8 below. The Borrower expressly waives any rights to receive prior notice or demand from the Lender and agrees that any prior demand, notice, announcement, or advertisement if so provided by the Lender shall not be deemed a waiver of the Lender’s right to declare an Event of Default, nor is the Lender bound by such notification(s) to forestall the exercise of any of such rights.
If during the Term of a Loan the value of the Loan Balance decreases, or the value of the Collateral increases, so that the value of the Collateral becomes higher than the Collateral Level, the Borrower may withdraw Collateral on twenty-four (24) hours notice to the Lender (including from the Collateral Account(s), the Borrower Account, or any other account it holds with the Lender or on the Exchange or any other of Lender’s exchange platform) in an amount such that the Collateral remains at least at the Collateral Level.
Notwithstanding anything contained herein to the contrary, if (i) at any time, the value of the Loan Balance increases, or the value of the Collateral decreases, so that the value of Collateral becomes equal to or less than 110% of the Loan Balance (“Liquidation Level”), or (ii) the Borrower fails to repay the Loan Balance by the Maturity Date (where applicable), the Lender shall have the right to liquidate any or all the Digital Assets held to the credit of the Collateral Account(s) after twenty-four (24) hours of the value of the Collateral falling below the Liquidation Level, and in any manner and through any market or dealer, to repay and reduce the Loan Balance in accordance with Section 4.4 below. The Borrower understands and agrees that if the Digital Assets in the Collateral Account(s) are liquidated by the Lender, it shall have no right or opportunity to determine the Digital Currencies to be liquidated or the order, manner or price of liquidation. The Lender shall have no liability for any loss sustained by the Borrower in connection with such liquidation (or if the Lender delays effecting, or does not effect, such liquidation) even if the Borrower re-establishes its position at a worse price. The Borrower shall be liable to pay the Lender a fee equivalent to 2% of the value of the positions liquidated, along with any deficiencies in its Collateral Account(s) that arise from such liquidation or remain after such liquidation. The Borrower expressly waives any rights to receive prior notice or demand from the Lender and agrees that any prior demand, notice, announcement, or advertisement shall not be deemed a waiver of the Lender’s rights under this Agreement, nor is the Lender bound by such notification(s) to forestall the exercise of any of such rights.
Notwithstanding the foregoing, if at any point during the Term of a Loan, the value of the Loan Balance increases, or the value of the Collateral decreases, so that the value of Collateral becomes equal to or below 95% of the Loan Balance, the Lender shall have the right to liquidate any or all the Digital Assets held to the credit of the Collateral Account(s) and in any manner and through any market or dealer, without prior notice to the Borrower to repay and reduce the Loan Balance in accordance with Section 4.4 below.
The Borrower acknowledges that its obligations hereunder, including those in this Section 4, shall continue regardless of the Lender’s request for Additional Collateral and the Borrower’s acceptance or rejection of the same.
4.4. Repayment of remaining Loan Balance
Repayment of the remaining Loan Balance (after application of the provisions of Clause 4.3) shall be made by (i) transferring the amount in the Collateral Account(s); or (ii) returning the amount of Loan Balance necessary to align the Collateral percentage indicated in the Loan Term Sheet based on the Margin Call Level.
5. Hard Fork
5.1. Notification
In the event of a public announcement of a future Hard Fork or an Airdrop in the blockchain for any Loaned Assets or Collateral, the Lender may provide notification to the Borrower, written or otherwise, including via email, other electronic instant messaging services (such as Telegram), or phone calls.
5.2. No Immediate Termination of Loans Due to Hard Fork
In the event of a Hard Fork in the blockchain for any Loaned Assets or an Airdrop, any outstanding Loans will not be automatically terminated. The Borrower and the Lender may agree, regardless of the Loan type, either (i) to terminate the Loan without any penalties on an agreed upon date or (ii) for the Lender to manage the Hard Fork on the behalf of the Borrower. If the Lender manages the Hard Fork on behalf of the Borrower, the Borrower shall return the Loaned Assets to the Lender two (2) Business Days prior to the scheduled Hard Fork or Airdrop. The Lender shall not be obligated to return any Collateral to the Borrower during the period in which the Lender manages the Loaned Assets on the behalf of the Borrower. The Lender shall fork the Loaned Assets, and following the Hard Fork, shall return to the Borrower the Loaned Assets (but excluding any New Tokens (as defined below)). For the period in which the Lender manages the Loaned Assets pursuant to this Section, the Loan Interest for those days shall not accrue. Nothing herein shall relieve, waive, or otherwise satisfy the Borrower’s obligations hereunder, including without limitation, the return of the Loaned Assets upon the termination of the Loan and payment of the accrued Loan Interest, which includes the per diem amounts for days on which the Borrower transfers Loaned Assets to the Lender and the Lender transfers the Loaned Assets back to the Borrower pursuant to this Section.
5.3. Lender’s Right to New Tokens
The Lender will receive the benefit and ownership of any incremental tokens generated as a result of a Hard Fork in the Digital Currency protocol or an Applicable Airdrop (the “New Tokens”)
The Borrower will have up to three (3) days from the Hard Fork or Applicable Airdrop to transfer the New Tokens to the Lender. If sending the New Tokens to the Lender is burdensome, upon the Lender’s written agreement with the Borrower, the Borrower can reimburse the Lender for the value of the New Tokens by either (i) a one-time payment in the same Loaned Assets transferred as a part of the Loan reflecting the amount of the New Tokens owed using the spot price determined by the Lender in its reasonable discretion at the time of said repayment, or (ii) returning the borrowed Digital Currency so that the Lender can manage the split of the underlying digital tokens as described in Section 5.2 above. Alternatively, subject to the Lender’s written agreement, the Parties may agree to other methods of reimbursing the Lender for the Borrower’s failure to transfer New Tokens to the Lender. In all cases, the Borrower will be solely responsible for payment of additional costs incurred by any transfer method other than returning the New Tokens to the Lender, including but not limited to technical costs, third party fees, and tax obligations for the transaction, including but not limited to a tax gross-up payment. The Lender’s rights to New Tokens as set forth in this Section shall survive the termination of the relevant Loan, return of the Loaned Assets, and termination of this Agreement. If the Borrower fails to transfer the New Tokens to the Lender, or fails to provide alternative compensation to the Lender as agreed to in accordance with this subsection, within sixty (60) days from the Hard Fork or Applicable Airdrop, such failure will be considered an Event of Default in accordance with Section 8, and the Borrower shall incur an additional fee (the “Hard Fork Fee”) equal to ten percent (10%) (annualized, calculated daily) of all outstanding portions of the Loaned Assets, the New Tokens and Loan Interest. The Lender’s charging of the Hard Fork Fee does not constitute a waiver of its right to declare an Event of Default for the same event.
6. Representations and Warranties
The Borrower makes the following representations and warranties, which shall be deemed to be repeated on each day for as long as any Loan Balance remains outstanding and unpaid to the Lender:
6.1.1. (i) it has the power to execute and deliver the Loan Documents, to enter into the Loans contemplated hereby and to perform its obligations hereunder, (ii) it has taken all necessary action to authorise such execution, delivery and performance, and (iii) this Agreement and the Loan Documents constitute a legal, valid, and binding obligation enforceable against it in accordance with its terms;
6.1.2. it has not relied on the Lender for any tax or accounting advice concerning this Agreement, any Loan Documents or any Loan and that it has made its own determination as to the tax and accounting treatment of any Loan, any Digital Currency, Collateral, or funds received or provided hereunder;
6.1.3. it is acting for its own account;
6.1.4. it is a sophisticated party and fully familiar with the inherent risks involved in the transaction contemplated in this Agreement and the Loan Documents, including, without limitation, risk of new financial regulatory requirements, potential loss of money and risks due to volatility of the price of the Loaned Assets, and voluntarily takes full responsibility for any risk to that effect;
6.1.5. it is not insolvent and is not subject to any bankruptcy or insolvency proceedings under any applicable laws;
6.1.6. there are no proceedings pending or, to its knowledge, threatened, which could reasonably be anticipated to have any material adverse effect on the transactions contemplated by this Agreement or any Loan Document or the accuracy of the representations and warranties hereunder or thereunder;
6.1.7. to its knowledge the transactions contemplated in this Agreement and the Loan Documents are not prohibited by law or other authority in the jurisdiction of its place of incorporation, place of principal office, or residence and that it has necessary licenses and registrations to operate in the manner contemplated in this Agreement and the Loan Documents;
6.1.8. it complies with all statutes, rules and regulations applicable to it, including obtaining any licenses required to conduct its business; and
6.1.9. other than any security granted pursuant to this Agreement, it has not granted a security interest in the Collateral.
7. Covenants
7.1. Negative Covenants.
During the Term of the Loan, other than any security granted under this Agreement, the Borrower shall not (a) create, permit or purport to subsist any security, lien, charge, mortgage or other encumbrance over any of the Collateral, or (b) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any Collateral, except as permitted under this Agreement or with the prior written consent of the Lender.
7.2. Future Assurance.
The Borrower shall, promptly upon demand by the Lender, and entirely at its own costs and expenses, make, execute, do, perform and provide all such further acts and documents as the Lender shall reasonably require to perfect, protect, maintain, or improve the security afforded or created by this Agreement and/or to give full effect to any provision of this Agreement.
7.3. Government Approvals.
The Borrower shall comply with all statutes, rules and regulations applicable to it, and will obtain any licenses required to conduct its business. The Borrower will obtain and maintain in full force and effect all governmental and other approvals, authorities, licences and consents required in connection with the security created under this Agreement and will do or cause to be done all other acts and things necessary or useful for the performance of all of his obligations under this Agreement, or for ratifying or confirming anything done by the Lender in the performance of its duties or exercise of its rights or powers under this Agreement.
8. Default
It is further understood that any of the following events shall constitute an event of default hereunder, and shall be herein referred to as an “Event of Default” or “Events of Default”:
8.1. the failure of the Borrower to pay to the Lender any amount due and payable under this Agreement in the manner specified by the Lender;
8.2. the failure to return any and all New Tokens by the date such New Tokens should be returned to the Lender under this Agreement;
8.3. the failure of the Borrower to transfer Collateral as required by Section 4;
8.4. a material default by the Borrower in the performance of any of the other agreements, conditions, covenants, provisions or stipulations contained in this Agreement, including without limitation a failure by the Borrower to abide by its obligations in Sections 5, 6 or 7 of this Agreement;
8.5. the Borrower’s default in any other agreement with the Lender or the Lender’s affiliates or failure to perform its obligation thereunder;
8.6. the application for or appointment of a liquidator, receiver, trustee or similar official over all or a material part of the Borrower’s assets;
8.7. any bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors or dissolution proceedings that are instituted by or against the Borrower and are not dismissed within thirty (30) days of the initiation of said proceedings;
8.8. any event or circumstance occurs or exists that is a material adverse effect on the business, operations, prospects, property, assets, liabilities or financial condition of, the Borrower, taken as a whole, or a material adverse effect on the ability of the Borrower to perform its obligations under the Loan Documents, including but not limited to the ability to return, transfer, repay, or pay the Loan Balance or any part thereof;
8.9. an encumbrancer taking possession of, or a distress, execution, attachment or other process is levied or enforced against, a Borrower Account, any Collateral Account(s), any Collateral, any assets held by the Lender on the Borrower’s behalf, or any of the Borrower’s assets;
8.10. the Borrower is unable to or admits to being unable to pay debts as they become due;
8.11. (a) it is or becomes unlawful for the Borrower to perform any of its obligations under this Agreement or any other Loan Document, (b) any obligation or obligations of the Borrower under this Agreement or any other Loan Document is not or cease to be legal, valid, binding or enforceable, (c) this Agreement or any Loan Document ceases to be in full force and effect or any security created hereunder ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it to be ineffective for any reason, or (d) the ranking or priority of the security interest created hereunder ceases to be first ranking priority security interest;
8.12. any representation or warranty made by the Borrower in this Agreement or any of the Loan Documents proves to be incorrect or untrue in any material respect as of the date of making or deemed making thereof; or
8.13. the Borrower notifies the Lender of its inability to or its intention not to perform its obligations hereunder, or otherwise disaffirms, rejects, or repudiates any of its obligations hereunder.
9. Remedies
9.1. Upon the occurrence and during the continuation of any Event of Default by the Borrower, the Lender may, at its option: (1) declare the entire Loan Balance outstanding for any Loan hereunder immediately due and payable; (2) terminate this Agreement and any Loan upon notice to the Borrower; (3) transfer any Collateral from the Collateral Account(s) to the Lender’s operating account necessary for the payment of any non-payment, liability, obligation, or indebtedness created by this Agreement or by the Lender in furtherance of its performance hereunder and/or its lending business, including but not limited to using the Collateral to purchase the relevant Digital Currency to replenish the Lender’s supply of the relevant Digital Currency or selling any Collateral in a relevant market for such Digital Currency; (4) purchase on the Lender’s own account such amount of Digital Currency in a relevant market for such Digital Currency, such purchase to be reimbursable by the Borrower; (5) exercise its rights under Section 12 herein; and (6) exercise all other rights and remedies available to the Lender hereunder, under applicable law, or in equity, in each case without further notice to or consent by the Borrower; provided, that upon any Event of Default pursuant to Section 8 as to a particular Loan, the entire Loan Balance then outstanding hereunder shall automatically become and be immediately due and payable.
9.2. On the occurrence of any Event of Default under Section 8 or termination in accordance with Section 2.4, this Agreement and any and all Loans made pursuant to this Agreement shall be terminated immediately and become due and payable, and Lender shall have immediate right to the Collateral to the fullest extent permitted herein and by law.
9.3. On the occurrence of any Event of Default under Section 8, the Lender may, in its sole discretion, take over the Collateral Account(s) without the Borrower’s prior consent and conduct margin closeout or liquidation. The Lender shall not be responsible to the Borrower’s losses, if any, in connection with such as liquidation.
9.4. In the event that the purchase price of any replacement Digital Currency pursuant to Sections 9.1(3) & 9.1(4) above exceeds the amount of the Collateral, the Borrower shall be liable to the Lender for the amount of such excess together with interest thereon in the amount of the Loan Interest as set out in the Loan Term Sheet. As security for the Borrower’s obligation to pay such excess, the Lender shall have, and the Borrower hereby grants, to the extent it is able to do so, a security interest in any property of the Borrower then held by or for the Lender and a right of set-off with respect to such property. The purchase price of replacement Digital Currency purchased under this Section shall include, and the proceeds of any sale of Collateral shall be determined after deduction of, broker’s fees and commissions and all other reasonable costs, fees and expense related to such purchase or sale (as the case may be). In the event the Lender exercises its rights under this Section, the Lender may elect in its sole discretion, in lieu of purchasing all or a portion of the replacement Digital Currencies or selling all or a portion of the Collateral, to be deemed to have made, respectively, such purchase of replacement Digital Currencies or sale of Collateral for an amount equal to the price therefor on the date of such exercise obtained from a generally recognized source.
9.5. To the extent that the Loans are now or hereafter secured by property other than the Collateral, or by the guarantee, endorsement or property of any other person, then upon an Event of Default by the Borrower, the Lender shall have the right in its sole discretion to determine which rights, security, liens, security interests or remedies the Lender shall at any time pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of them or any of the Lender’s rights hereunder.
9.6. In connection with the exercise of its remedies pursuant to this Section 9, the Lender may (1) exchange, enforce, waive or release any portion of the Collateral or Loans in favor of the Lender or relating to any other security for the Loans; (2) apply such Collateral or security and direct the order or manner of sale thereof as the Lender may, from time to time, determine; and (3) settle, compromise, collect or otherwise liquidate any such Collateral or security in any manner following the occurrence of an Event of Default, without affecting or impairing the Lender's right to take any other further action with respect to any Collateral or security or any part thereof.
9.7. In addition to its rights hereunder, the Lender shall have any rights otherwise available to it under any other agreement or applicable law.
10. Rights and Remedies Cumulative
No delay or omission by the Lender in exercising any right or remedy hereunder shall operate as a waiver of the future exercise of that right or remedy or of any other rights or remedies hereunder. All rights of the Lender stated herein are cumulative and in addition to all other rights provided by law, in equity.
11. Survival of Rights and Remedies
All remedies of the Lender hereunder and all obligations of the Borrower with respect to any Loan shall survive the termination of the relevant Loan, return of Loaned Assets or Collateral, and termination of this Agreement.
12. Collection Costs
In the event the Borrower fails to pay any amounts due or to return any Digital Currency or upon the occurrence of any Event of Default in Section 8 hereunder, the Borrower shall, upon demand, pay to the Lender all reasonable costs and expenses, including without limitation, reasonable attorneys’ fees and court costs, broker fees, and technology costs incurred by the Lender in connection with the enforcement of its rights hereunder.
13. Governing Law; Dispute Resolution
This Agreement is governed by, and shall be construed and enforced under, the laws of Hong Kong SAR without regard to any choice or conflict of laws rules. If a dispute arises out of or relates to this Agreement, or the breach thereof, and if said dispute cannot be settled through negotiation it shall be finally resolved by arbitration in Hong Kong by the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules (the “HKIAC Rules”) in force when the Arbitration Notice is submitted in accordance with the HKIAC Rules. There shall be one (1) arbitrator. The HKIAC Council shall select the arbitrator, who shall be qualified to practice law in Hong Kong. The Parties agree to waive their rights to a jury trial. If any proceeding is brought for the enforcement of this Agreement, then the successful or prevailing Party shall be entitled to recover attorneys’ fees and other costs incurred in such proceeding in addition to any other relief to which it may be entitled.
14. Confidentiality
14.1. Each Party to this Agreement shall hold in confidence all information obtained from the other Party in connection with this Agreement and the transactions contemplated hereby, including without limitation any discussions preceding the execution of this Agreement or any Loan Documents (collectively, “Confidential Information”). Confidential Information shall not include information that the receiving Party demonstrates with competent evidence was, or becomes, (i) available to the public through no violation of this Section 14, (ii) in the possession of the receiving Party on a non-confidential basis prior to disclosure, (iii) available to the receiving Party on a non-confidential basis from a source other than the other Party or its affiliates, subsidiaries, officers, directors, employees, contractors, attorneys, accountants, bankers or consultants (the “Representatives”), or (iv) independently developed by the receiving Party without reference to or use of such Confidential Information.
14.2. Each Party shall (i) keep such Confidential Information confidential and shall not, without the prior written consent of the other Party, disclose or allow the disclosure of such Confidential Information to any third party, except as otherwise herein provided, and (ii) restrict internal access to and reproduction of the Confidential Information to a Party’s Representatives only on a need to know basis; provided, however, that such Representatives shall be under an obligation of confidentiality at least as strict as set forth in this Section 14.
14.3. Each Party also agrees not to use Confidential Information for any purpose other than in connection with transactions contemplated by this Agreement or any Loan Documents.
14.4. The provisions of this Section 14 will not restrict a Party from disclosing the other Party’s Confidential Information to the extent required by any law, regulation, or direction by a court of competent jurisdiction or government agency or regulatory authority with jurisdiction over said Party; provided that the Party required to make such a disclosure uses reasonable efforts to give the other Party reasonable advance notice of such required disclosure in order to enable the other Party to prevent or limit such disclosure. Notwithstanding the foregoing, the Lender may disclose the Borrower’s Confidential Information without notice pursuant to a written request by a governmental agency or regulatory authority.
14.5. The obligations with respect to Confidential Information shall survive for a period of two (2) years from the date of termination of this Agreement. Nevertheless, any termination of this Agreement shall not relieve each Party, as the receiving Party, of its confidentiality and use obligations with respect to Confidential Information disclosed prior to the date of such termination. Notwithstanding anything in this Agreement to the contrary, a Party may retain copies of Confidential Information (the “Retained Confidential Information”) to the extent necessary (i) to comply with its recordkeeping obligations, (ii) in the routine backup of data storage systems, and (iii) in order to determine the scope of, and compliance with, its obligations under this Section 14; provided, however, that such Party agrees that any Retained Confidential Information shall be accessible only by legal or compliance personnel of such Party and the confidentiality obligations of this Section 14 shall survive with respect to the Retained Confidential Information for so long as such information is retained.
15. Notices
Unless otherwise provided in this Agreement or as separately agreed between the Parties, all notices or demands relating to this Agreement shall be in writing and shall be sent by electronic mail, in the case of the Borrower, to the Borrower Email and, if the Borrower Account is a sub-account of a master account on Binance.com, to the registered email address of that master account on Binance.com and, in the case of the Lender, to the respective address set forth below:
Email: vip@binance.com
Copy to: legal_notice@binance.com
16. Modifications
All modifications or amendments to this Agreement shall be effective only when agreed in writing by both Parties.
17. Single Agreement
The Borrower and the Lender acknowledge that, and have entered into this Agreement in reliance on the fact that, all Loans hereunder constitute a single business and contractual relationship and have been entered into in consideration of each other. Accordingly, the Borrower and the Lender hereby agree that payments, deliveries, and other transfers made by either of them in respect of any Loan shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Loan hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted. In addition, the Borrower and the Lender acknowledge that, and have entered into this Agreement in reliance on the fact that, all Loans hereunder have been entered into in consideration of each other. Accordingly, the Borrower and the Lender hereby agree that (a) each shall perform all of its obligations in respect of each Loan hereunder, and that a default in the performance of any such obligation by the Borrower in any Loan hereunder shall constitute a default by the Borrower under all such Loans hereunder, and (b) the Lender shall be entitled to set-off claims in accordance with Section 27 and, to the extent it holds any property of the Borrower, apply that property held by it in respect of any Loan hereunder against obligations owing to it in respect of any other Loan with the Borrower.
18. Entire Agreement
This Agreement, each exhibit referenced herein, and all Loan Term Sheets constitute the entire agreement among the parties with respect to the subject matter hereof and supersedes and replaces any prior negotiations, understandings and agreements, oral or written, entered into between the Borrower and the Lender. Nothing in this Section 18 shall be construed to conflict with or negate Section 17 above.
19. Successors and Assigns
This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the Parties and no other person shall have any right, benefit, priority or interest under, or because of the existence of, this Agreement; provided, that the Borrower may not assign this Agreement or any rights or duties hereunder without the prior written consent of the Lender (such consent to not be unreasonably withheld). The Lender may assign this Agreement or any rights or duties hereunder upon notice to the Borrower. Notwithstanding the foregoing, in the event of a change of control of the Lender or the Borrower, prior written consent shall not be required provided that such Party which is the subject of the change of control provides the other Party with written notice prior to the consummation of such change of control. For purposes of the foregoing, a “change of control” shall mean a transaction or series of related transactions in which a person or entity, or a group of affiliated (or otherwise related) persons or entities acquires from stockholders of the Party shares representing more than fifty percent (50%) of the outstanding voting stock of such Party. Neither this Agreement nor any provision hereof, nor any Exhibit hereto or document executed or delivered herewith, or Loan Term Sheet hereunder, shall create any rights in favor of or impose any obligation upon any person or entity other than the Parties hereto and their respective successors and permitted assigns. For the avoidance of doubt, any and all claims and liabilities against the Lender arising in any way out of this Agreement are only the obligation of the Lender, and not any of its parents or affiliates. The Parties agree that none of the Lender’s parents or affiliates shall have any liability under this Agreement nor do such related entities guarantee any of the Lender’s obligations under this Agreement.
20. Severability of Provisions
Each provision of this Agreement shall be viewed as separate and distinct, and in the event that any provision shall be deemed by a court of competent jurisdiction to be illegal, invalid or unenforceable, the court finding such illegality, invalidity or unenforceability may modify or reform this Agreement to give as much effect as possible to such provision. Any provision which cannot be so modified or reformed will be given no effect and shall be treated as though it were not included in this Agreement, and the remaining provisions of this Agreement shall continue in full force and effect.
21. Counterpart Execution
To the extent applicable, this Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by email or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any Party delivering an executed counterpart of this Agreement by email or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. To the extent permitted by the applicable laws, the Parties agree that this Agreement may be delivered via electronic transmission and that this Agreement, or any part thereof, shall not be denied legal effect, validity, or enforceability solely on the ground that it is in the form of an electronic record. The Parties further agree that they shall not dispute the validity, accuracy, legal effectiveness or authenticity or enforceability of this Agreement merely on the basis that it is delivered via electronic transmission and in the form of an electronic record, and that such electronic record shall be final and conclusive of the Parties’ agreement of any relevant matter as set out in this Agreement.
22. Relationship of Parties
Nothing contained in this Agreement shall be deemed or construed by the Parties, or by any third party, to create the relationship of partnership or joint venture between the Parties hereto, it being understood and agreed that no provision contained herein shall be deemed to create any relationship between the Parties hereto other than the relationship of borrower and lender.
23. No Waiver
The failure of or delay by the Lender to enforce an obligation or exercise a right or remedy under any provision of this Agreement or to exercise any election in this Agreement shall not be construed as a waiver of such provision, and the waiver of a particular obligation in one circumstance will not prevent the Lender from subsequently requiring compliance with the obligation or exercising the right or remedy in the future. No waiver or modification by either Party of any provision of this Agreement shall be deemed to have been made unless expressed in writing and signed by both Parties.
24. Indemnification
The Borrower shall indemnify and hold harmless the Lender, or any of its parents or affiliates, from and against any and all third party claims, demands, losses, expenses and liabilities of any and every nature (including attorneys’ fees of an attorney of the Lender’s choosing to defend against any such claims, demands, losses, expenses and liabilities) that the Lender, or any of its parents or affiliates, may sustain or incur or that may be asserted against the Lender, or any of its parents or affiliates, arising out of the Lender’s lending of Digital Currency to the Borrower under this Agreement, except for any and all claims, demands, losses, expenses and liabilities arising out of or relating to the Lender’s bad faith, gross negligence or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of the Borrower, its successors and assigns, notwithstanding the termination of this Agreement.
25. Term and Termination
The term of this Agreement shall commence as set out in the particulars, and shall automatically renew for successive one-year terms annually, unless either Party provides notice of a desire to terminate this Agreement no less than ten (10) days prior to the end of such one-year period. The foregoing notwithstanding, this Agreement may be terminated upon thirty (30) days’ notice by either Party to the other.
In the event of a termination of this Agreement, the entire Loan Balance shall be redelivered immediately and any fees owed shall be payable immediately.
26. Miscellaneous
Whenever used herein, the singular number shall include the plural, the plural the singular, and the use of the masculine, feminine, or neuter gender shall include all genders where necessary and appropriate. The section headings are for convenience only and shall not affect the interpretation or construction of this Agreement. The Parties acknowledge that the Agreement and any Loan Term Sheet are the result of negotiation between the Parties which are represented by sophisticated counsel and therefore none of the Agreement’s provisions will be construed against the drafter.
27. Right of Set-off
27.1. The Lender may set-off any or all of the Loan Balance that is due from the Borrower under this Agreement against any other amount or property held by the Lender and/or its Affiliates to the Borrower’s credit.
27.2. If a Lender Insolvency Event occurs, or the Borrower is lost or affected (however described), the Borrower may set-off any or all of the Loan Balance that is due from the Borrower under this Agreement against any other amount or property held on the Exchange to the Borrower’s credit by the Lender and/or its Affiliates.