Common use of Interest Rate and Interest Clause in Contracts

Interest Rate and Interest. 5.1 Interest rate: Interest of the Loan is calculated at the rate of 5.22 % per annum. The interest rate of the Loan shall be finally confirmed by the rate stated on the certificate of indebtedness. If Party B changes the purpose of the Loan, Party A is entitled to charge interest on the misused portion of the Loan at the rate equaling to 2 times of the normal Loan interest rate based on misused days. If Party B fails to repay the Loan before the due date, Party A is entitled to charge interest on the amount in default at the rate equaling to 1.5 times of the normal Loan interest rate. If both events above-mentioned occur simultaneously, Party B should impose penalty based on the breach which is more severe instead of based on both events. If the People’s Bank of China changes the lending rate during the term of the Loan, the interest of the Loan shall be calculated in accordance with the provisions relating to such change. 5.2 Calculation of interest: Interest shall accrue from the drawdown date of the Loan on the basis of the actual amount granted and the actual days elapsed and shall be calculated once a month at the 20th day of each month. 5.3 Payment of interest: Party B shall pay the interest on each interest calculation date. Party A may deduct the interest directly from Party B’s deposit account. If Party B fails to pay the interest by the time prescribed, Party A is entitled to charge compound interest on the interest in default.