Appendix 1
Loan Agreement (Supplier)
FIXED RATE LOAN – LOAN AGREEMENT (SUPPLIER)
The Fixed Rate Loan is provided by you to Binance (each as defined below) for its onward lending to the Borrower(s) through the Fixed Rate Loan Services (as defined in the Fixed Rate Loan Service Terms) offered by Binance based on a back-to-back contractual arrangement, subject to the terms and conditions set out in this Loan Agreement (the “Agreement”), the Fixed Rate Loan Service Terms, the Terms of Use and the relevant Supply Order and Supply Order Confirmation (each as defined below). By placing the Supply Order and upon Execution (each as defined in the Fixed Rate Loan Service Terms), you will be taken to have accepted all of the terms and conditions set out in this Agreement.
(1) you, the user who submitted the Supply Order (as defined in the Fixed Rate Loan Service Terms) to which the Fixed Rate Loan relates (“Supplier”); and
(2) the Binance entity from which the Supplier opened his/her/its Spot Account (“Binance”).
Subject to the terms and conditions of this Agreement, the Supplier agrees to lend Virtual Asset to Binance, and Binance will pay the Loan Interest and return such Virtual Asset to the Supplier upon the termination of the Loan.
In consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Binance and the Supplier hereby agree as follows:
1. Definitions
Unless otherwise defined, terms defined in the Binance Terms of Use (available here) and the Fixed Rate Loan Service Terms (available [here]) shall have the same meaning when used in this Agreement.
“Affiliate” 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.
“Agreed Communication Method” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“Airdrop” means a distribution of a new token or tokens resulting from the ownership of a pre-existing token. For the purposes of Section 4, 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 Virtual Asset 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 Virtual Asset, or a distribution that depends on a wallet of the relevant Virtual Asset meeting a threshold requirement.
“Binance Interest Fee” has the meaning given to that term in Section 3.1.
“Borrow Order” means the instruction given by the Borrower to Binance through the Order Submission Interface to borrow the Fixed Rate Loan pursuant to the terms of the Loan Agreement (Borrower).
“Borrow Order Confirmation” means the order confirmation in respect of the Borrow Order accepted by the Borrower through the Order Submission Interface.
“Borrower” means the party who is the recipient of the Fixed Rate Loan and who has agreed to and accepted the terms of the Loan Agreement (Borrower).
“Business Day” means a day (other than a Saturday, Sunday, or a public holiday) on which commercial banks in the jurisdiction in which the Binance entity entering into this Agreement operates is open for business.
“Event of Default” has the meaning given to that term in Section 6.
“Execution” means the matching of the Borrow Order with the Supply Order by the Platform pursuant to the Fixed Rate Loan Service Terms, and “Executed” shall be construed accordingly.
“Expiry Date” means the date and time which the Term expires as set forth in the Supply Order Confirmation and/or when the Loan becomes due and payable in accordance with this Agreement.
“Fixed Rate Loan” means the fixed rate loan facility granted by Binance as lender to the Borrower as borrower pursuant to the terms of the Loan Agreement (Borrower).
“Fixed Rate Loan Services” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“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).
“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.
“Loan” means the loan of Virtual Assets granted by the Supplier to Binance pursuant to and in accordance with this Agreement, the Fixed Rate Loan Service Terms, the Binance Terms of Use and the Supply Order Confirmation.
“Loan Agreement (Borrower)” means the loan agreement entered into between Binance and the Borrower in respect of the Fixed Rate Loan.
“Loan Balance” means, in respect of the Loan, the sum of all outstanding amounts of Loaned Assets, Loan Interest and New Tokens.
“Loan Documents” means this Agreement, the Fixed Rate Loan Service Terms, the Binance Terms of Use, the Supply Order and the Supply Order Confirmation.
“Loaned Assets” means any Virtual Asset amount transferred in the Loan hereunder until such Virtual Asset (or identical Virtual Asset) amount is transferred back to the Supplier hereunder, except that, if any new or different Virtual Asset 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 Virtual Asset shall be deemed to become Loaned Assets in addition to the former Virtual Asset. For purposes of return of Loaned Assets by Binance, such term shall include Virtual Asset of the same quantity and type as the Virtual Asset, except that, if any new or different Virtual Asset 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 Virtual Asset shall be deemed to become Loaned Assets in addition to the former Virtual Asset for which such exchange is made.
“Loan Interest” has the meaning given to that term in Section 3.1.
“Loan Interest Rate” means the interest rate as set out in the Supply Order in respect of the Loan.
“Margin Insurance Fund” means a pool of Virtual Assets maintained by Binance as more particularly described here.
“New Tokens” has the meaning given to that term in Section 4.3.
“Order Submission Interface” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“Party” means Binance or the Supplier and “Parties” means Binance and the Supplier.
“Platform” has the meaning given to that term in the Binance Terms of Use.
“Redelivery Day” has the meaning given to that term in Section 2.3.2.
“Spot Wallet” means the Binance Account that the Supplier uses for spot transactions, which is also designated for using the Fixed Rate Loan Services.
“Supply Order” means the instruction given by the Supplier to Binance through the Order Submission Interface to lend Virtual Assets pursuant to the terms of this Agreement.
“Supply Order Confirmation” means the order confirmation delivered through the Order Submission Interface to the Supplier before the relevant Supply Order is placed and submitted to Binance, setting out a summary of the terms of the Loan.
“Term” means the duration of the Loan as provided for in the Loan Documents.
“Termination Date” means the date upon which a Loan is terminated.
2. General Terms of the Loan
2.1 Virtual Asset Loan
Subject to the terms and conditions hereof and upon Execution, the Supplier will make available the Loan to Binance.
2.2 Transfer of Loaned Assets
The Supplier agrees that upon Execution, Binance shall transfer an amount equivalent to the Loaned Assets from the Spot Wallet in accordance with the terms set forth in the Loan Documents.
2.3 Loan Repayment Procedure
2.3.1 Loan Repayment
Unless otherwise specified in Section 2.3.2 below, Binance shall repay the entirety of the Loan Balance to the Supplier within 24 hours from the Expiry Date.
Repayment of the remaining Loan Balance shall be made by transferring an amount of the type of Virtual Assets in which the Loan Balance is denominated which is equivalent to the Loan Balance to the Spot Wallet.
2.3.2 Prepayment
Binance may repay the Loan Balance at any time prior to the Expiry Date. Binance’s exercising of its option to repay the entire Loan Balance prior to the Expiry Date under this Section 2.3.2 (the “Redelivery Day”) shall not relieve it of any of its obligations under this Agreement.
2.4 Termination of the Loan
The Loan will terminate upon the earlier of:
2.4.1 the repayment of the Loan in full by Binance prior to the Expiry Date in accordance with Section 2 or Section 7; or
2.4.2 the repayment of the Loan Balance by Binance within 24 hours from the Expiry Date.
2.5 Conditions of Utilisation
The Supplier will not be obliged to make the Loan to Binance if an Event of Default has occurred and is continuing or would occur as a result of the proposed Loan.
3. Loan Interest
3.1 Loan Interest
Binance agrees to pay the Supplier interest for the Loan (the “Loan Interest”). Loan Interest shall be calculated at the Loan Interest Rate (as annualized and set out in the Supply Order Confirmation), subject to any changes or adjustments as agreed between Binance and the Supplier. Unless otherwise agreed between Binance and the Supplier, subject to Section 4.2, Loan Interest shall accrue on the full amount of the Loan from and including the date on which the Loaned Assets are transferred to the end of the Term.
Binance shall calculate Loan Interest owed on a daily basis (and a day count convention of a year of 365 days) and, subject to Section 4.2, based on the Term.
The Supplier acknowledges and agrees that Binance will deduct an interest fee payable to Binance in respect of the Loan (the “Binance Interest Fee”) before transferring and on-lending the Loaned Assets to the Borrower. For the avoidance of doubt, the Binance Interest Fee payable to Binance shall not reduce the Loan Interest and Loan Balance payable to the Supplier.
In conjunction with Section 4.2, the Supplier further acknowledges that the loan interest payable by the Borrower under the Fixed Rate Loan is not refundable unless, in the event of a Hard Fork or an Airdrop in respect of the Loaned Assets, Binance and the Borrower mutually agree to terminate the Fixed Rate Loan or have Binance manage the Hard Fork on behalf of the Borrower in accordance with the terms of the Loan Agreement (Borrower).
3.2 Payment of Loan Interest
Loan Interest shall be paid to the Supplier:
3.2.1 within 24 hours from the Expiry Date; or
3.2.2 (in the case of Binance making a prepayment pursuant to Section 2.3.2 above) on the Redelivery Day.
For the avoidance of doubt, Loan Interest shall not accrue during the 24 hours period as specified in Section 3.2.1 above.
Loan Interest shall be payable, unless otherwise agreed between Binance and the Supplier pursuant to the terms of the Loan Documents, on the same blockchain and in the same type of Virtual Asset in which the Loaned Assets are denominated.
4. Hard Fork
4.1 Notification
In the event of a public announcement of a future Hard Fork or an Airdrop in the blockchain for any Loaned Assets, Binance may provide notification to the Supplier (but is under no obligation to do so), written or otherwise, including via announcements, email, other electronic instant messaging services (such as Telegram), or phone calls.
4.2 No Immediate Termination of the Loan due to Hard Fork
In the event of a Hard Fork in the blockchain for any Loaned Assets or an Airdrop, the outstanding Loan will not be automatically terminated. Pursuant to section 6.2 of the Loan Agreement (Borrower), Binance and the Borrower may agree either (i) to terminate the Loan without any penalties on an agreed upon date (the “Agreed Termination Date”) or (ii) for Binance to manage the Hard Fork on behalf of the Borrower.
The Supplier acknowledges that if Binance and the Borrower agree to terminate the Loan without any penalties on an Agreed Termination Date, loan interest payable by the Borrower shall only accrue from and including the date on which the Actual Receiving Amount (as defined in the Loan Agreement (Borrower)) is transferred to the Agreed Termination Date, and Binance shall return to the Borrower the excess portion of loan interest which was paid in advance by the Borrower pursuant to the terms of the Loan Agreement (Borrower) (the “Excess Amount”). The Supplier further acknowledges and agrees that such Excess Amount shall be deducted from the Loan Interest and returned to the Borrower accordingly.
The Supplier acknowledges and agrees that if Binance manages the Hard Fork on behalf of the Borrower pursuant to the terms of the Loan Agreement (Borrower), Binance may, but is not obliged to, return to the Borrower the portion of loan interest payable by the Borrower which is accrued from and including the date of the scheduled Hard Fork or Airdrop to the date on which the Loaned Assets are returned to the Borrower, and such amount shall be deducted from the Loan Interest and returned to the Borrower accordingly.
4.3 Supplier’s Right to New Tokens
The Supplier will receive the benefit and ownership of any incremental tokens generated as a result of a Hard Fork in the Virtual Asset protocol or an Applicable Airdrop (the “New Tokens”).
Binance will have up to ten (10) days from the Hard Fork or Applicable Airdrop to transfer the New Tokens to the Supplier. If sending the New Tokens to the Supplier is burdensome, Binance reserves the right to reimburse the Supplier for the value of the New Tokens by 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 Binance in its reasonable discretion at the time of said repayment. In all cases, the Supplier will be solely responsible for payment of additional costs incurred by any transfer method other than returning the New Tokens to the Supplier, 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.
5. Covenants
The Supplier shall comply with all statutes, rules and regulations applicable to it, and will obtain any licenses required to conduct its business (if applicable). The Supplier will obtain and maintain in full force and effect all governmental and other approvals, authorities, licences and consents (if any) required in connection with the transactions contemplated 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 its obligations under this Agreement, or for ratifying or confirming anything done by the Supplier in the performance of its duties or exercise of its rights or powers under this Agreement.
6. 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”:
6.1 Binance’s failure to pay to the Supplier any amount due and payable under this Agreement;
6.2 a material default by Binance in the performance of any of the other agreements, conditions, covenants, provisions or stipulations set out in any of the Loan Documents;
6.3 it is or becomes unlawful for Binance or the Supplier to perform any of its obligations under any of the Loan Documents;
6.4 any of Binance’s or the Supplier’s obligations under any of the Loan Documents ceases to be legal, valid, binding or enforceable;
6.5 any of the Loan Documents ceases to be in full force and effect; or
6.6 Binance notifies the Supplier of its inability to or its intention not to perform its obligations under this Agreement, or otherwise disaffirms, rejects, or repudiates any of its obligations under this Agreement.
7. Remedies
7.1 Upon the occurrence and during the continuation of any Event of Default, the Supplier may, at its option: (i) declare the entire Loan Balance outstanding for the Loan hereunder immediately due and payable; and (ii) terminate this Agreement and the Loan upon notice to Binance.
7.2 The Supplier acknowledges and agrees that if the Borrower is unable to repay the all or part of the Fixed Rate Loan (including any interest and fees payable to Binance in respect of the Fixed Rate Loan) by the expiry date specified in the Borrow Order Confirmation and pursuant to the terms of the Loan Agreement (Borrower), Binance may, in its sole discretion, cover the shortfall amount due by the Borrower, in whole or in part, with funds from the Margin Insurance Fund for the purpose of repaying (i) any amounts due and payable to the Supplier under this Agreement; or (ii) such other fees payable to Binance under the Loan Agreement (Borrower). For the avoidance of doubt, the shortfall amount covered by Binance shall ultimately be recoverable from the Borrower and the Borrower shall be directly liable to settle such shortfall amount with Binance. Binance shall under no circumstances be liable for any decision whether to make the Margin Insurance Fund available or not.
8. Survival of Rights and Remedies
All remedies of the Supplier hereunder and all of Binance’s obligations with respect to the Loan shall survive the termination of the Loan, return of the Loaned Assets and termination of this Agreement.
9. Governing Law; Dispute Resolution
This Agreement is governed by, and shall be construed and enforced under, the laws of Hong Kong 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.
10. Confidentiality
10.1 Each Party 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, the “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 10, (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.
10.2 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 10.
10.3 Each Party also agrees not to use the Confidential Information for any purpose other than in connection with transactions contemplated by any of the Loan Documents.
10.4 The provisions of this Section 10 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, Binance may disclose the Supplier’s Confidential Information without notice pursuant to a written request by a governmental agency or regulatory authority.
10.5 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 the 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 10; 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 10 shall survive with respect to the Retained Confidential Information for so long as such information is retained.
11. Notices
Unless otherwise provided in this Agreement or as separately agreed between the Parties, the Supplier acknowledges that all notices, demands and notifications in relation to the Loan, this Agreement or any of the Loan Documents shall be delivered to the Supplier via an Agreed Communication Method. The Supplier shall be responsible for accessing the relevant websites, platforms, and interfaces (including without limitation the Platform and the inbox which corresponds to the Supplier’s email address registered to the Spot Wallet) from time to time to check whether Binance has delivered any such notices, demands and notifications to the Supplier, and Binance shall not be obliged to notify the Supplier after any such notices, demands and notifications were made.
Binance shall not be held responsible for any unforeseen technical or other errors resulting in the non-delivery of any such notices, demands and notifications if the information contained therein is equally accessible to the Supplier via any other Agreed Communication Method.
12. Modifications
All modifications or amendments to this Agreement shall be effective only when agreed in writing by both Parties.
13. Single Agreement
The Parties acknowledge that, and have entered into this Agreement in reliance on the fact that, the Loan constitutes a single business and contractual relationship and have been entered into in consideration of each other.
14. Entire Agreement
This Agreement and all of the other Loan Documents 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 Parties. Nothing in this Section 14 shall be construed to conflict with or negate Section 13 above.
15. 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 Supplier may not assign this Agreement or any rights or duties hereunder without Binance’s prior written consent (such consent to not be unreasonably withheld). Binance may assign this Agreement or any rights or duties hereunder upon notice to the Supplier. Neither this Agreement nor any provision hereof, or any document executed or delivered pursuant to any of the Loan Documents shall create any rights in favor of or impose any obligation upon any person or entity other than the Parties and their respective successors and permitted assigns. For the avoidance of doubt, any and all claims and liabilities against Binance arising in any way out of this Agreement are only Binance’s obligation, and not any of its parents or Affiliates. The Parties agree that none of Binance’s parents or Affiliates shall have any liability under this Agreement nor do such related entities guarantee any of Binance’s obligations under this Agreement.
16. 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.
17. 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. 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.
18. Relationship of the 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, 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.
19. No Waiver
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.
20. Indemnification
The Supplier shall indemnify and hold harmless Binance, 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 Binance’s choosing to defend against any such claims, demands, losses, expenses and liabilities) that Binance, or any of its parents or Affiliates, may sustain or incur or that may be asserted against Binance, or any of its parents or Affiliates, arising out of Binance’s obligations under this Agreement, except for any and all claims, demands, losses, expenses and liabilities arising out of or relating to Binance’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 Supplier, its successors and assigns, notwithstanding the termination of this Agreement.
21. Termination
This Agreement shall terminate upon the repayment of the entire outstanding Loan Balance.
22. 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 this Agreement and the Order Confirmation are the result of negotiation between the Parties which are represented by sophisticated counsel and therefore none of the provisions of this Agreement will be construed against the drafter.
Appendix 2
Loan Agreement (Borrower)
FIXED RATE LOAN – LOAN AGREEMENT (BORROWER)
The Fixed Rate Loan is provided by the Lender to you subject to the terms and conditions set out in this Loan Agreement (the “Agreement”), the Fixed Rate Loan Service Terms, the Terms of Use and the relevant Borrow Order and Order Confirmation (each as defined in the Fixed Rate Loan Service Terms). By placing the Borrow Order and upon Execution (each as defined in the Fixed Rate Loan Service Terms), you will be taken to have accepted all of the terms and conditions set out in this Agreement.
(1) you, the user who submitted the Borrow Order (as defined in the Fixed Rate Loan Service Terms) to which this Fixed Rate Loan relates (“Borrower”); and
(2) the Binance entity from which the Borrower opened his/her/its Spot Account (“Lender”).
Subject to the terms and conditions of this Agreement, the Lender agrees to lend Virtual Asset to the Borrower, and the Borrower will pay Loan Interest and return such Virtual Asset to the Lender upon the termination of the Loan.
In consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby agree as follows:
1. Definitions
Unless otherwise defined, terms defined in the Binance Terms of Use (available here) and the Fixed Rate Loan Service Terms (available [here]) shall have the same meaning when used in this Agreement.
“Actual Receiving Amount” has the meaning given to that term in clause 2.2.
“Additional Collateral” has the meaning given to that term in Section 4.2.
“Affiliate” 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.
“Agreed Communication Method” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“Agreed Termination Date” has the meaning given to that term in Section 6.2.
“Airdrop” means a distribution of a new token or tokens resulting from the ownership of a pre-existing token. For the purposes of Section 6, 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 Virtual Asset 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 Virtual Asset, or a distribution that depends on a wallet of the relevant Virtual Asset meeting a threshold requirement.
“Auto-Repay Service” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“Borrow Order” means the instruction given by the Borrower to the Lender through the Platform to borrow the Loaned Assets pursuant to the terms of the Loan Documents.
“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.
“Business Day” means a day (other than a Saturday, Sunday, or a public holiday) on which commercial banks in the jurisdiction in which the Binance entity entering into this Agreement operates is open for business.
“Binance Account” has the meaning given to that term in the Terms of Use.
“Collateral” has the meaning given to that term in Section 4.1
“Collateral Amendment” has the meaning given to that term in Section 4.1.
“Collateral Balance” means, in respect of the Loan, the total value of the Collateral and the Additional Collateral.
“Collateral Discount” has the meaning given to that term in Section 4.1.
“Collateral Level” has the meaning given to that term in Section 4.1.
“Event of Default” has the meaning given to that term in Section 8.
"Execution” means the matching of the Borrow Order with the Supply Order by the Platform pursuant to the Fixed Rate Loan Service Terms, and “Executed” shall be construed accordingly.
“Expiry Date” means the date and time which the Term expires as set forth in the Order Confirmation and/or when the Loan becomes due and payable in accordance with this Agreement.
“Fixed Rate Loan Services” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“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).
“Hard Fork Fee” has the meaning given to that term in Section 6.3.
“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.
“Initial LTV” means the LTV threshold described as “Initial LTV” (expressed as a percentage) in the Order Confirmation, which may be adjusted by the Lender at its sole discretion from time to time.
“Late Fee” has the meaning given to that term in Section 3.3.
“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 Platform for the foreseeable future.
“Liquidation LTV” means the LTV threshold described as “Liquidation LTV” (expressed as a percentage) in the Order Confirmation, which may be adjusted by the Lender at its sole discretion from time to time.
“Liquidation Level” has the meaning given to that term in Section 4.2.
“Loan” means the loan of Virtual Assets made or to be made pursuant to and in accordance with this Agreement, the Fixed Rate Loan Service Terms, the Binance Terms of Use and the Order Confirmation.
“Loan Balance” means, in respect of the Loan, the sum of all outstanding amounts of Loaned Assets, New Tokens, Loan Interest, other interest and any Late Fees, Hard Fork Fee or other fees for the Loan.
“Loan Documents” means this Agreement, the Fixed Rate Loan Service Terms, the Binance Terms of Use, the Borrow Order and the Order Confirmation.
“Loaned Assets” means any Virtual Asset amount transferred in the Loan hereunder until such Virtual Asset (or identical Virtual Asset) amount is transferred back to the Lender hereunder, except that, if any new or different Virtual Asset 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 Virtual Asset shall be deemed to become Loaned Assets in addition to the former Virtual Asset. For purposes of return of Loaned Assets by the Borrower or purchase or sale of Virtual Assets pursuant to Section 9, such term shall include Virtual Asset of the same quantity and type as the Virtual Asset, except that, if any new or different Virtual Asset 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 Virtual Asset shall be deemed to become Loaned Assets in addition to the former Virtual Asset for which such exchange is made.
“Loan Interest” has the meaning given to that term in Section 3.1.
“Loan Interest Rate” means the interest rate as set out in the Borrow Order in respect of the Loan.
"LTV” means, in respect of the Loan at any given point of time before it is repaid in full, the result of the following formula calculation, expressed as a percentage:
LTV = Loan Balance / Collateral Balance
whereas the value of the Loaned Assets and the Collateral shall be determined by a spot price as determined by the Lender, acting reasonably.
“Margin Call Level” has the meaning given to that term in Section 4.2.
“Margin Call LTV” means the LTV threshold described as “Margin Call LTV” (expressed as a percentage) in the Order Confirmation, which may be adjusted by the Lender at its sole discretion from time to time.
“Margin Insurance Fund” means a pool of Virtual Assets maintained by Binance as more particularly described here.
“New Tokens” has the meaning given to that term in Section 6.3.
“Order” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“Order Confirmation” means the order confirmation delivered through the Order Submission Interface to the Borrower before the relevant Borrow Order is placed and submitted to the Lender, setting out a summary of the terms of the Loan.
“Order Submission Interface” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“Party” means the Borrower or the Lender and “Parties” means the Borrower and the Lender.
“Platform” has the meaning given to that term in the Binance Terms of Use.
“Redelivery Day” has the meaning given to that term in Section 2.3.2.
“Spot Account” means the Binance Account that the Borrower uses for spot transactions, which is also designated for using the Fixed Rate Loan Services.
“Supplier” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“Supply Order” has the meaning given to that term in the Fixed Rate Loan Service Terms.
“Term” means the duration of the Loan as provided for in the Loan Documents.
“Termination Date” means the date upon which a Loan is terminated.
2. General Terms of the Loan
2.1 Virtual Asset Loan
Subject to the terms and conditions hereof and upon Execution, the Lender will make available the Loan to the Borrower.
2.2 Transfer of Loaned Assets
The Lender shall commence, or shall procure that the Lender’s Affiliate commences, transfer of an amount equivalent to the Loaned Assets less the Loan Interest (as defined in Section 3.1 below) (the “Actual Receiving Amount”) to the Spot Account in accordance with the terms set forth in the Loan Documents upon Execution and subsequent due execution of this Agreement by the Parties.
2.3 Loan Repayment Procedure
2.3.1 Loan Repayment
Unless otherwise specified in Section 2.3.2 below, the Borrower shall repay the entirety of the Loan Balance to the Lender by the Expiry Date.
Repayment of the remaining Loan Balance shall be made by:
(i) (if the balance standing to the credit of the Spot Account is sufficient for repayment) deducting an amount of the type of Virtual Assets in which the Loan Balance is denominated which is equivalent to the Loan Balance from the Spot Account; or
(ii) (if the balance standing to the credit of the Spot Account is insufficient for repayment) deducting an amount of the Collateral required for repayment of the entirety of the Loan Balance.
If the Borrower opted in the Auto-Repay Service when placing the Borrow Order, upon the Expiry Date, the deduction described in (i) above (subject to whether the balance in the Spot Account is sufficient for repayment) will be automatically processed through the Platform for the repayment of the remaining Loan Balance. If the balance standing to the credit of the Spot Account is insufficient for repayment, the auto-repayment process will fail.
If the Borrower did not opt in the Auto-Repay Service when placing the Borrow Order, the Borrower shall manually initiate repayment of the remaining Loan Balance through the Platform. The Borrower will not be able to proceed with initiating the repayment if the balance standing to the credit of the Spot Account is insufficient for repayment.
For the avoidance of doubt, except in the case where the Auto-Repay Service is opted in by the Borrower, the Lender shall not be obligated to process any repayment of the remaining Loan Balance by the Expiry Date, irrespective of whether the balance standing to the credit of the Spot Account is sufficient for repayment.
2.3.2 Prepayment
The Borrower may repay the Loan Balance at any time prior to the Expiry Date, provided that the entire (but not partial) Loan Balance will be repaid to the Lender upon such prepayment. The Borrower’s exercising of its option to repay the entire Loan Balance prior to the Expiry Date under this Section 2.3.2 (the “Redelivery Day”) shall not relieve it of any of its obligations herein, including without limitation its payment of the interest payable under this Agreement.
For the avoidance of doubt, no refunds of any amount of Loan Interest, any of the Hard Fork Fee or other fees in respect of the Loan will be made to the Borrower, irrespective of whether the Borrower exercises its option to prepay all or part of the Loan Balance prior to the Expiry Date under this Section 2.3.2 or not.
2.4 Termination of the Loan
The Loan will terminate upon the earlier of:
2.4.1 the repayment of the Loan in full by the Borrower prior to the Expiry Date in accordance with Section 2, Section 4 or Section 9; or
2.4.2 the repayment of the Loan Balance by the Borrower on the Expiry Date.
2.5 Conditions of Utilisation
The Lender will not be obliged to make the 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: (i) 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; (ii) 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 and Late Fees
3.1 Loan Interest
The Borrower agrees to pay the Lender interest for the Loan (the “Loan Interest”) in advance which is not refundable unless, in the event of a Hard Fork or an Airdrop in respect of the Loaned Assets, the Borrower and the Lender mutually agree to terminate the Loan or have the Lender manage the Hard Fork on behalf of the Borrower in accordance with Section 6.2. Loan Interest shall be calculated at the Loan Interest Rate (as annualized and set out in the Order Confirmation), subject to any changes or adjustments as agreed between the Borrower and the Lender. Unless otherwise agreed between the Borrower and the Lender, subject to Section 6.2, Loan Interest shall accrue on the full amount of the Loan from and including the date on which the Actual Receiving Amount is transferred to the end of the Term.
The Lender shall calculate Loan Interest owed on a daily basis (and a day count convention of a year of 365 days) and based on the Term.
Loan Interest shall be deducted at source from the Loan proceeds and prior to the disbursement of the Actual Receiving Amount to the Borrower.
3.2 Payment of Loan Interest
Loan Interest shall be paid to the Lender prior to the disbursement of the Actual Receiving Amount (as a deduction from the Loaned Assets) pursuant to Section 2.2.
Loan Interest shall be payable in full irrespective of whether the Borrower exercises its option to prepay all or part of the Loan Balance prior to the Expiry Date under Section 2.3.2.
Loan Interest shall be payable, unless otherwise agreed between the Borrower and the Lender pursuant to the terms of the Loan Documents, on the same blockchain and in the same type of Virtual Asset in which the Loaned Assets are denominated.
The Borrower shall be entitled to take out any number of Fixed Rate Loans concurrently while this Loan remains outstanding, provided that the Borrower maintains sufficient collateral Virtual Assets (including the Collateral) for each of the Fixed Rate Loans (including this Loan) until such loans are repaid in full.
3.3 Late Fee
For the first twenty-four (24) hours in excess of the Expiry Date (the “24 Hours Period”) in which the Borrower has not repaid the entirety of the overdue Loan Balance, the Borrower shall pay an additional nominal fee (the “Late Fee”) which is equivalent to the outstanding Loan Balance multiplied by three (3) times of the Loan Interest Rate as set out in the Order Confirmation.
If the Borrower repays the entirety of the overdue Loan Balance before the 24 Hours Period had lapsed, the Late Fee shall be pro-rated on an hourly basis. Late Fees will be charged on the basis of full hours only, even if the Borrower repays the entirety of the overdue Loan Balance before the lapse of a full hour.
If the Borrower fails to repay the entirety of the overdue Loan Balance after the 24 Hours Period had lapsed, the Lender shall have the right to liquidate any or all of the Virtual Assets held to the credit of the Collateral Account pursuant to Section 4.2.
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
The Late Fees shall be payable, unless otherwise agreed between the Borrower and the Lender in the Loan Documents, on the same blockchain and in the same type of Virtual Asset in which the Loaned Assets are denominated.
All Late Fees shall either be (i) transferred by the Borrower to the Lender directly; (ii) deducted from the balance standing to the credit of the Spot Account if sufficient; (iii) (in the case of liquidation upon the expiry of the 24 Hours Period) deducted from the Collateral Account upon liquidation; or (iv) (if the Lender exercises its sole discretion to utilize funds from the Margin Insurance Fund pursuant to Section 9.2) recovered from the Margin Insurance Fund.
4. Collateral Requirements
4.1 Collateral
Unless otherwise agreed by the Parties, or modified pursuant to the terms of the Loan Documents or as set forth below, the Borrower shall provide an amount of Virtual Asset(s) as collateral (the “Collateral”) and the Borrower has the option to choose more than one type of Virtual Asset as Collateral when placing the Borrow Order in accordance with the Fixed Rate Loan Service Terms. Unless otherwise agreed between the Parties pursuant to the terms of the Loan Documents, the Collateral(s) shall at all times be maintained at an amount such that the LTV does not go above the Initial LTV threshold (the “Collateral Level”).
The Lender may determine that the value of the Collateral(s), or any part of the Collateral(s), is less than the spot price at any time (the “Collateral Discount”). The Lender may also amend which Virtual Asset can be used as Collateral from time to time (the “Collateral Amendment”). The Lender will publish an announcement through the Platform to users before applying any Collateral Discount and Collateral Amendment to Fixed Rate Loans.
The Borrower shall deposit additional Collateral with the Lender if the Collateral Level cannot be met after any Collateral Discount or Collateral Amendment becomes effective to avoid liquidation.
The Borrower shall provide the Collateral(s) to the Lender in Virtual Assets in an amount equal to the value of the Collateral(s) in U.S. Dollars at a spot price determined by the Lender. For the avoidance of doubt, upon the repayment of the Loan Balance in full, the Lender shall release to the Borrower the Collateral(s) that was deposited to the Collateral Account, net of any Additional Collateral (as defined below in Section 4.3). If a Hard Fork in the blockchain of the Virtual Asset serving as Collateral meeting the criteria in Section 6 occurs while the Lender is holding Virtual Asset as Collateral, the Lender shall release the New Tokens (as defined in Section 6) to the Borrower upon the repayment of the Loan Balance in full at the termination of the Loan. If a Hard Fork that does not meet the criteria in Section 6 occurs, the Lender shall have no obligation to return any New Tokens to the Borrower.
The Collateral shall be set aside in the Spot Account immediately after the Borrow Order has been successfully submitted to the Lender, and shall be set aside until the Borrow Order is Executed or cancelled pursuant to the terms of the Loan Documents. The Collateral will not be available for use, transfer or withdrawal unless the Borrow Order is cancelled pursuant to the terms of the Loan Documents.
Upon Execution, the Collateral shall be transferred by the Lender from the Spot Account to the Collateral Account. When the Lender transfers or otherwise deals with Virtual Assets in the Collateral Account, the Lender will not be deemed to have used any specific Virtual Assets, however identifiable, to make such transfer or dealing.
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(s), which shall attach upon the transfer of the Loaned Assets by the Lender to the Borrower and which shall cease upon the repayment of the Loan Balance in full by the Borrower to the Lender. During the Term of the Loan, the Borrower agrees, acknowledges, authorises and affirms the Lender’s (or its designee) enforcement upon the Collateral(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.
The Borrower acknowledges and agrees that the Collateral(s) (upon being transferred from the Spot Account to the Collateral Account pursuant to this Section 4.1) may, at the Lender’s sole discretion and without prior notice, be used for operating purposes by the Lender and/or its Affiliates, including but not limited to being used for granting loans to clients of the Lender and/or its Affiliates under the relevant product terms of use published by the Lender from time to time. The Borrower further acknowledges and agrees that the Collateral(s) may also be used by the Lender and/or its Affiliates in on-chain staking activities in the Lender’s reasonable discretion.
4.2 Margin Calls and Liquidation
The Borrower acknowledges that it is responsible for monitoring the value(s) of Collateral(s) 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 4.2 without prior notice to the Borrower.
If during the Term the value of the Loan Balance increases, or the value of the Collateral(s) decreases, to the effect that the LTV becomes equal to or exceeds the Margin Call LTV threshold (the “Margin Call Level”), the Borrower shall deposit with the Lender an additional amount of Virtual Asset(s) (the “Additional Collateral”) to restore the LTV to a level which is at least the same percentage as the Collateral Level. Notwithstanding that Binance may make a notification to the Borrower to deposit Additional Collateral when the LTV reaches the Margin Call Level, 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.
Notwithstanding anything contained herein to the contrary, if (i) at any time, the value of the Loan Balance increases, or the value(s) of the Collateral(s) decreases, so that the LTV becomes equal to or higher than the Liquidation LTV (the “Liquidation Level”), (ii) the Borrower fails to repay the Loan Balance by the Expiry Date and still fails to repay the overdue Loan Balance after the 24 Hours Period had lapsed, or (iii) the Lender has given the Borrower notice of default in accordance with Section 9.1 on the occurrence of any of the Events of Default set out in Sections 8.2 to 8.13 and the Borrower fails to repay the Loan Balance by the date and time as specified in the notice of default, the Lender shall have the right to (i) immediately liquidate any or all the Collateral(s) and/or Additional Collateral held to the credit of the Collateral Account to repay and reduce the Loan Balance, and in any manner and through any market or dealer; or (ii) exercise its set-off right in accordance with Section 5 below.
If the Collateral(s) and/or Additional Collateral is/are of a different type of Virtual Asset from the Loaned Assets, the Lender shall have the right to convert any such Collateral and/or Additional Collateral into the same type of Virtual Asset in which the Loaned Assets are denominated (in such manner and at such rate as the Lender may determine) for the purpose of liquidation pursuant to this Section 4.2.
The Borrower acknowledges, understands and agrees that if any of the Collateral(s) is liquidated by the Lender, it shall have no right or opportunity to determine the type of Virtual Assets to be liquidated, the order of which the Collateral is to be liquidated, or the 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 the Collateral Account 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.
The Borrower further acknowledges, understands and agrees that if the liquidation proceeds are insufficient to repay the outstanding Loan Balance, the Borrower shall be liable for any shortfall and such amount shall be immediately due and payable from you to Binance.
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.
4.3 Return of Collateral
Any remaining Collateral(s) in the Collateral Account shall be returned to the Spot Account as and when the Loan Balance is fully repaid and there is no further indebtedness (actual or contingent) owed by the Borrower to the Lender or its Affiliates.
5. Set-Off
5.1 The Lender may, at any time without notice, set off any obligation or indebtedness owing by the Borrower to the Lender from time to time by applying any credit balance standing to the credit of the Spot Account in or towards the satisfaction of any such obligation or indebtedness, provided that the amount so applied (i) does not exceed the amount of Virtual Assets which is actually owing by the Borrower to the Lender under such obligation or indebtedness; and (ii) is not being set aside in the Spot Account as Frozen Collateral or Frozen Loan Assets (each as defined in the Fixed Rate Loan Service Terms) pursuant to any submitted Orders.
5.2 The Borrower acknowledges and agrees that the Lender may purchase such other types of Virtual Assets as may be necessary to effect the application of any amount of Virtual Assets standing to the credit of the Spot Account as contemplated above. The Borrower further acknowledges and agrees that the Lender may convert such amount with reference to the then-prevailing market rates for the purpose of exercising its set-off right to satisfy any obligation or indebtedness owing by the Borrower to the Lender.
6. Hard Fork
6.1 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 (but is under no obligation to do so), written or otherwise, including via announcements, email, other electronic instant messaging services (such as Telegram), or phone calls.
6.2 No Immediate Termination of the Loan due to Hard Fork
In the event of a Hard Fork in the blockchain for any Loaned Assets or an Airdrop, the outstanding Loan will not be automatically terminated. The Borrower and the Lender may agree either (i) to terminate the Loan without any penalties on an agreed upon date (the “Agreed Termination Date”) or (ii) for the Lender to manage the Hard Fork on behalf of the Borrower.
If the Borrower and the Lender agree to terminate the Loan without any penalties on an Agreed Termination Date, Loan Interest shall only accrue from and including the date on which the Actual Receiving Amount is transferred to the Agreed Termination Date, and the Lender shall return to the Borrower the excess portion of Loan Interest which was paid in advance by the Borrower pursuant to Sections 3.1 and 3.2.
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 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)). 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 6.2. Notwithstanding the above, the Lender may, but is not obliged to, return to the Borrower the portion of Loan Interest accrued from and including the date of the scheduled Hard Fork or Airdrop to the date on which the Loaned Assets are returned to the Borrower in accordance with this Section 6.2.
6.3 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 Virtual Asset 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 Virtual Asset so that the Lender can manage the split of the underlying digital tokens as described in Section 6.2 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 6.3 shall survive the termination of the 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 Section 6.3, within seven (7) 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 10% (annualized, calculated daily) of all outstanding portions of the Loaned Assets, the New Tokens and the 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.
All Hard Fork Fees shall either be deducted from the balance standing to the credit of the Spot Account if sufficient, and, if not, the Collateral or (if the Lender exercises its sole discretion to utilize funds from the Margin Insurance Fund pursuant to Section 9.2) recovered from the Margin Insurance Fund.
7. Covenants
7.1 Negative Covenants
During the Term, other than any security granted under this Agreement, the Borrower shall not (i) create, permit or purport to subsist any security, lien, charge, mortgage or other encumbrance over any of the Collateral, or (ii) 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 (if applicable). The Borrower will obtain and maintain in full force and effect all governmental and other approvals, authorities, licences and consents (if any) required in connection with the transactions contemplated hereunder and 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 its 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 (in the event that the LTV reaches the Margin Call Level) the failure of the Borrower to deposit Additional Collateral to restore the LTV to a level which is at least the same percentage as the Collateral Level;
8.4 a material default by the Borrower in the performance of any of the other agreements, conditions, covenants, provisions or stipulations set out in any of the Loan Documents, including without limitation a failure by the Borrower to abide by its obligations set out in Section 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 (i) (in the case that the Borrower is an individual) any bankruptcy proceedings or proceedings for the appointment of a guardian, trustee, nominee or similar officer of him or of any or all of his assets or revenues, or (ii) (in the case that the Borrower is an entity) any winding-up, 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 any of 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, the Spot Account, the Collateral Account, 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 (i) it is or becomes unlawful for the Borrower to perform any of its obligations under any of the Loan Documents, (ii) any obligation of the Borrower under any of the Loan Documents ceases to be legal, valid, binding or enforceable, (iii) any of the Loan Documents 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 (iv) 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 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 under this Agreement, or otherwise disaffirms, rejects, or repudiates any of its obligations under this Agreement.
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: (i) give a notice of default to the Borrower and declare the entire Loan Balance outstanding for the Loan hereunder due and payable such that the Expiry Date of the Loan would be immediately shortened to the date and time as specified in the notice of default; (ii) terminate this Agreement and the Loan upon notice to the Borrower; (iii) transfer any Collateral from the Collateral Account 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 business, including but not limited to using the Collateral to purchase the relevant Virtual Asset to replenish the Lender’s supply of the relevant Virtual Asset or selling any Collateral in a relevant market for such Virtual Asset; (iv) purchase on the Lender’s own account such amount of Virtual Asset in a relevant market for such Virtual Asset, such purchase to be reimbursable by the Borrower; (v) exercise its rights under Section 12 herein; and (vi) 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 the occurrence of any Event of Default pursuant to Section 8 as to the Loan, the entire Loan Balance then outstanding hereunder shall automatically become and be immediately due and payable.
9.2 Without prejudice to Section 4.2 above, if the liquidation proceeds obtained by the Lender are insufficient to repay the outstanding Loan Balance, the Lender may, in its sole discretion, cover the shortfall amount due by the Borrower, in whole or in part, with funds from the Margin Insurance Fund for the purpose of repaying (i) any amounts due and payable to the Supplier(s) corresponding to the Supply Order(s) which was/were matched with the Borrow Order at Execution; or (ii) such other fees payable to the Lender. For the avoidance of doubt, the shortfall amount covered by the Lender shall ultimately be recoverable from the Borrower and the Borrower shall be directly liable to settle such shortfall amount with the Lender. The Lender shall under no circumstances be liable for any decision whether to make the Margin Insurance Fund available or not.
9.3 On the occurrence of any Event of Default under Section 8, upon the demand of the Lender, this Agreement and the Loan shall be terminated immediately and become due and payable, and the Lender shall have immediate right to the Collateral to the fullest extent permitted herein and by law.
9.4 On the occurrence of any Event of Default under Section 8, the Lender may, in its sole discretion, conduct collateral liquidation using the Collateral deposited into the Collateral Account without the Borrower’s prior consent. The Lender shall not be responsible to the Borrower for any loss for conduction of collateral liquidation in this.
9.5 In the event that the purchase price of any replacement Virtual Asset pursuant to Sections 9.1(iii) & 9.1(iv) above exceeds the amount of the Collateral, the Borrower shall be liable to the Lender for such excess amount (together with interest thereon in the amount of the Loan Interest Rate as set out in the Order Confirmation). As security for the Borrower’s obligation to pay such excess amount and interest thereon, 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 Virtual Assets purchased under this Section 9.5 shall include, and the proceeds of any sale of the Collateral shall be determined after deduction of, broker’s fees and commissions and all other reasonable costs, fees and expenses related to such purchase or sale (as the case may be). In the event the Lender exercises its rights under this Section 9.5, the Lender may elect in its sole discretion, in lieu of purchasing all or a portion of the replacement Virtual Assets or selling all or a portion of the Collateral, to be deemed to have made, respectively, such purchase of replacement Virtual Assets or sale of the Collateral for an amount equal to the price therefor on the date of such exercise obtained from a generally recognized source.
9.6 In connection with the exercise of its remedies pursuant to this Section 9, the Lender may (i) exchange, enforce, waive or release any portion of the Collateral or the Loan in favor of the Lender or relating to any other security for the Loan; (ii) apply such Collateral or security and direct the order or manner of sale thereof as the Lender may from time to time determine; and (iii) 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 the Loan shall survive the termination of the Loan, return of the Loaned Assets or the Collateral and termination of this Agreement.
12. Collection Costs
In the event the Borrower fails to pay any amounts due or to return any Virtual Asset 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 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 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, the “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 the Confidential Information for any purpose other than in connection with transactions contemplated by any of the 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 the 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, the Borrower acknowledges that all notices, demands and notifications in relation to the Loan, this Agreement or any of the Loan Documents shall be delivered to the Borrower via an Agreed Communication Method. The Borrower shall be responsible for accessing the relevant websites, platforms, and interfaces (including without limitation the Platform and the inbox which corresponds to the Borrower’s email address registered to the Spot Account) from time to time to check whether the Lender has delivered any such notices, demands and notifications to the Borrower, and the Lender shall not be obliged to notify the Borrower after any such notices, demands and notifications were made.
The Lender shall not be held responsible for any unforeseen technical or other errors resulting in the non-delivery of any such notices, demands and notifications if the information contained therein is equally accessible to the Borrower via any other Agreed Communication Method.
16. Modifications
All modifications or amendments to this Agreement shall be effective only when agreed in writing by both Parties.
17. Single Agreement
The Parties acknowledge that, and have entered into this Agreement in reliance on the fact that, the Loan constitutes a single business and contractual relationship and have been entered into in consideration of each other.
18. Entire Agreement
This Agreement and all of the other Loan Documents 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 Parties. 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. Neither this Agreement nor any provision hereof, or any document executed or delivered pursuant to any of the Loan Documents shall create any rights in favor of or impose any obligation upon any person or entity other than the Parties 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. 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 the 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, 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 Virtual Asset 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. Termination
This Agreement shall terminate upon the repayment of the entire outstanding Loan Balance.
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 this Agreement and the Order Confirmation are the result of negotiation between the Parties which are represented by sophisticated counsel and therefore none of the provisions of this Agreement 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.
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 Platform to the Borrower’s credit by the Lender and/or its Affiliates.
