Loan Contract of Fixed Assets Agricultural Development Bank of China
No.34128101-2010(BZ) No.0021
Agricultural Development Bank of China
Borrower: Bozhou Xinghe Pharmaceutical Co., Ltd.
No. of Business License: 000000000000000(1-1)
Legal representative (principal): Xxx Xxxxxxx
Domicile: Keji Road, Industrial Park, Qiaocheng District, Bozhou City, Anhui Province, China
Post code: 236800
Bank of basic deposit account and account No.: Bozhou Branch of Agricultural Development Bank of China 00000000000000000000000
Contact No. and fax: 0000-0000000
Lender: Bozhou Branch of Agricultural Development Bank of China
Legal representative (principal): Xxxx Xxxxxxxx
Domicile: Xx. 00 Xxxxx Xxxxxxxx Xxxx, Xxxxxx Xxxx, Xxxxx Xxxxxxxx, Xxxxx
Post code: 236800
Contact No. and fax: 0000-0000000
The Borrower applies for loan from the Lender, and the Lender agrees to offer the loan to the Borrower. The two parties reached the Contract through fair negotiation in accordance with the state laws, regulations and provisions.
Article 1: Type of loan
The loan under the Contract is the medium and long-term one for TCM herbs of the industrialized leading company.
Article 2: Purpose of loan
The loan under the Contract is used for paying for the construction works, instrument purchase, installation and debugging (adjusted) expenses. Without the written permission of the Lender, the Borrower shall not change the purpose agreed in the Contract.
Article 3: Amount of loan
The loan under the Contract covers the amount of RMB 10 million.
Article 4: Term of loan
The loan under the Contract covers the term of 50 months, from May 26, 2010 to July 30, 2014. If the beginning date of the term of loan is different from the date on the loan certificate handled by the Borrower and Lender, it shall regard the date on the loan certificate when making the first drawing. The loan certificate is the part of the Contract, and it has the same legal effect with the Contract.
Article 5: Loan interest rate, penalty interest rate, calculation interest and settlement interest
5.1.1 It shall abide by the loan interest rate in 3 to 5 years (5 years included) issued by the People’s Bank of China, which is 5.76%.
5.1.2 It shall float (upward/downward) for / % based on the level of the loan interest rate / issued by the People’s Bank of China, with the interest rate of / %.
5.1.3 It shall adjust (upward/downward) for / % based on the level of the loan interest rate / issued by the People’s Bank of China, with the interest rate of / %.
5.2 The loan interest rate under the Contract shall abide by the agreement in Item 5.2.3 if the benchmark interest rate of the People’s Bank of China is adjusted:
5.2.1 Fixed interest rate, which will not be changed during the loan term.
5.2.2 It shall be adjusted according to the situation, and calculated the interest in phases.
5.2.3 It shall be adjusted according to floating of 6 months since the actual money drawing date, and calculated the interest in phases.
5.3 The penalty interest rate under the Contract shall be the annual interest rate, including:
5.3.1 The penalty interest rate of the overdue loan shall be added 30% based on the loan interest rate agreed by the Contract.
5.3.2 The penalty interest rate of the loan not be used according to the purpose agreed by the Contract shall be added 50% based on the loan interest rate agreed by the Contract.
5.4 The penalty interest rate of the loan under the Contract shall abide by the agreement in Item 5.4.2 if the benchmark interest rate of the People’s Bank of China is adjusted:
5.4.1 No adjustment;
5.4.2 It shall be adjusted according to the situation, and calculated the interest in phases.
5.5 If the Borrower uses the loan under the Contract, and has the situations of overdue loan and the loan not used according to the purpose agreed by the Contract, the Lender shall calculate the penalty interest according to the higher penalty interest rate between them.
5.6 Interest calculation and settlement
5.6.1 The loan under the Contract shall be calculated interest daily since the actual money drawing date, and the interest shall be calculated and charged according to the actual loan using days and the loan interest rate agreed by the Contract.
5.6.2 Within the term of loan agreed by the Contract, the interest not paid by the Borrower on time shall be calculated and charged the compound interest, which shall be executed according to the loan interest rate agreed by the Contract.
5.6.3 If the Borrower has overdue loan or loan not used according to the purpose agreed by the Contract, the interest not paid by the Borrower on time shall be calculated and charged the compound interest according to the penalty interest rate agreed by the Contract.
5.6.4 The interest of the loan under the Contract shall be settled monthly and the interest settlement date is the 20th day of each month.
5.6.5 During the performance of the Contract, if the People’s Bank of China adjusts the regulation of the loan interest rate and penalty interest rate, and it shall be applicable to the loan under the Contract, the Lender has the right to calculate the corresponding interest and penalty interest according to the regulation of the People’s Bank of China and the loan interest rate and penalty interest rate after the adjustment, without additional notification to the Borrower.
Article 6: Draw money
6.1 The Borrower shall meet the following preconditions to draw money; otherwise, the Lender has the right to refuse the money drawing application of the Borrower:
6.1.1 The approval, registration, delivery and other legal procedures related to the loan under the Contract have been handled according to the relevant laws and regulations.
6.1.2 If there is the guaranty for the loan under the Contract, the guaranty contract agreed by Item 8.2 of Article 8 in the Contract shall have taken effect legally. If it adopts mortgage or pledge method, the mortgage or pledge right has been set legally and the registration procedure has been handled legally.
6.1.3 The capital fund or other funds shall be collected of the project related to the loan under the Contract have been in full according to the time and proportion regulated.
6.1.4 There is no over-budget or the over-budget has been settled.
6.1.5 The project progress has been completed according to the schedule.
6.1.6 The money drawing procedure has been handled according to the agreements of the Contract.
6.1.7 There is no event of default agreed by the Contract.
6.1.8 Other materials related to loan handling have been provided according to the requirements of the Lender.
6.2 Schedule for the Borrower drawing money is as follows:
6.2.1 May 26, 2010, the amount of RMB 10 million.
6.3 If the Borrower fails to draw money according to Item 6.2 of the Article due to special reason, it shall put forward written application to the Lender 5 working days in advance; after being agreed by the Lender in written, it can draw money 10 days in advance or postpone 10 days.
6.4 If the Borrower requires to cancel all or partial money undrawn of the Contract, it shall put forward written application to the Lender 15 working days before the drawing date agreed by the Contract, and it can be cancelled after being agreed by the Lender in written.
Article 7: Repayment
7.1 The Borrower shall pay the interest timely according to the Contract. If the loan expires, with the principal cleared, the interest is settled.
7.2 Schedule for the Borrower repaying the loan principal is as follows:
7.2.1 July 30, 2013, the amount of RMB 6 million;
7.2.2 July 30, 2014, the amount of RMB 4 million.
7.3 If the Borrower repays the principal in advance, it shall put forward the written application to the Lender 15 working days before the planned repayment date; after being agreed by the Lender in written, it can repay partial or all loan principals in advance. If the Borrower repays partial principals in advance, it shall repay loans according to the reverse order of the schedule.
7.4 The Borrower shall reserve sufficient interest or principal and interest that shall be paid in the current period at the account opened in the Lender before the interest settlement date or the principal repayment date agreed by the Contract and authorize the Lender to charge from the account directly at the second day of the interest settlement date agreed by the Contract or the principal repayment date.
Article 8: The loan method under the Contract shall adopt the following Item 8.2:
8.2 The guaranty method of the Mortgage and Guaranty of Maximum Amount. The guaranty contract shall be signed additionally and the number of the guaranty contract is 34128101-2009 B.Z. (D) Z. No.0023 and 34128101-2009 B.Z. (B) Z. No.0040.
Article 9: Rights and obligations of the Borrower
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9.1
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The Borrower has the right to learn about the credit policy and interest rate policy from the Lender.
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9.2
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The Borrower has the right to draw and use the loan according to the term purpose agreed by the Contract.
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9.3
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The Borrower has the right to apply for extending the period to the Lender if it meets the Lender’s regulation.
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9.4
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The Borrower has the right to require the Lender to keep the material and information related to debt, finance, production and operation provided by it confidential, unless otherwise stipulated by laws and regulations or agreed by the Contract.
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9.5
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The Borrower shall ensure that the material provided during loan reviewing shall be true, accurate, complete and valid.
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9.6
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The Borrower shall periodically provide the true, complete, legal and valid documents, materials and information like the financial accounting statements to the Lender according to the Lender’s requirements, and accept and coordinate with the Lender’s checking and inspection on its production & operation, project construction, material inventory, financial situation and loan usage situation.
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9.7
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The Borrower shall support and coordinate with the Lender’s participation in budget estimate, budget, final settlement review, bid-inviting and completion acceptance work of the project related to the loan.
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9.8
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The Borrower shall pay the principal and interest timely according to agreements in the Contract.
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9.9
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Within the valid term of the Contract, if the Borrower has any change on name, legal representative (principal), domicile, mailing address, contact number, business scope, relationship of administrative subordination, Articles of Association and internal structure, it shall notify the Lender in written within 15 days since the date of change.
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9.10
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Within the valid term of the Contract, if the Borrower provides guaranty to the debts of the other person or makes mortgage and pledge to the third person based on its main properties, it shall notify the Lender in written 30 days in advance and obtains the written permission of the Lender.
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9.11
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If the Borrower has any material related transactions with its controlling shareholder and other related companies (including but not limit to material related purchase and sales contract, lease, raw material supply and money flow), or its related party relationship has any change, or the operation or financial situation of its controlling shareholder and other related companies has serious crisis, the Borrower shall notify the Lender in written within 3 days after the date of occurrence.
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Within the valid term of the Contract, if the Borrower has contracting, lease, shareholding reform, joint operation, separation, merge (acquisition), joint capital (cooperation), capital reduction, ownership change, asset transfer or disposal, major external investment or other behaviors influencing the realization of the creditor's rights of the Lender, it shall notify the Lender in written 30 days in advance and perform the debts paying responsibility under the Contract agreed by the Lender in written, or provide other legal and valid guaranty approved by the Lender in written; otherwise, it shall not have the above behavior before paying off all debts under the Contract.
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9.13
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If the Borrower has severe difficulties in production and operation, deteriorative financial situation, involves in material economic disputes or any other lawsuit, arbitration or criminal and administrative penalty having material adverse consequences on its operation or property status, or the major part or all of its properties are occupied by other creditors, or took over by the designated trustee, receiver or the similar person, or its properties are seized or frozen, which may cause serious loss on the Lender, the Borrower shall notify the Lender in written within 3 days after the date of occurrence and take the protective measures that ensures repayment of loan principal and interest and all other expenses under the Contract on a timely basis according to the requirements of the Lender.
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9.14
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Within the valid term of the Contract, if the Borrower stops production, closes business, suspends business to bring up to standard, cancels registration, is revoked the business license and cancelled, files or is filed for bankruptcy or dissolution, the Borrower shall notify the Lender in written within 3 days after the date of occurrence and ensure to repay the principle and interest of the loan according to the written requirements of the Lender, or provide the protective measures of the creditor’s rights approved by the Lender in written.
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9.15
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If the guaranty is adopted by the loan under the Contract and the guaranty has change having adverse effect on the creditor’s rights of the Lender, the Borrower shall additionally provide other legal and valid guaranty approved by the Lender in written according to the requirements of the Lender.
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9.16
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The Borrower shall assume expenses of lawyer service, insurance, transportation, appraisal, registration, keeping, verification and notarization related to the Contract and the guaranty under the Contract.
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Article 10: Rights and obligations of the Lender
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10.1
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The Lender has the right to check and supervise the Borrower’s production and operation, financial activities, project construction, material inventory and usage of loan, and has the right to require the Borrower to provide the relevant document, material and information like financial accounting statements on time.
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10.2
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The Lender has the right to directly charge the loan principal, interest, penalty interest, overdue interest, compound interest and other accrued expenses shall be paid by the Borrower from the account of the Borrower according to the agreement of the Contract.
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10.3
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If the Borrower escapes the Lender’s supervision, defaults the loan principal and interest or has other severe noncompliance, the Lender has the right to perform credit sanctions, notify the relevant department or unit, and announce to recover through the news media.
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10.4
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The Lender shall offer the loan in full to the Borrower on time according to the Contract, except the delay caused by the Borrower.
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10.5
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The Lender shall keep the material and information related to debt, finance, production and operation provided by the Borrower confidential, unless otherwise stipulated by laws and regulations or agreed by the Contract.
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If the Lender changes name, domicile and mailing address within the valid term of the Contract, it shall notify the Borrower in written within 15 days since the change date.
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Article 11: Liability for breach of contract
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11.1
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After the Contract taking effect, the Borrower and the Lender shall fulfill the obligations agreed by the Contract. If any party fails to fulfill or completely fulfill the obligations agreed by the Contract, it shall assume the liability for breach of contract according to the law.
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11.2
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If the Borrower fails to handle and draw the loan according to the Contract, it shall pay the overdue liquidated damage to the Lender at the loan interest rate agreed by the Contract according to the breach amount and days.
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11.3
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If the Borrower fulfills the obligations under the Contract and the Lender fails to handle and offer the loan according to the Contract, the Lender shall pay the overdue liquidated damage to the Borrower at the loan interest rate agreed by the Contract according to the breach amount and days.
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11.4
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If the Borrower repays the loan under the Contract in advance without written permission of the Lender, the Borrower shall pay the liquidated damage to the Lender at the loan interest rate agreed by the Contract according to the breach amount and days.
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11.5
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If the Borrower fails to repay the loan on time, the Lender has the right to require the Borrower to repay within a definite time, and directly charge the loan principal and interest owed from any account of the Borrower opened in the Lender; meanwhile, the Lender can charge the interest to the overdue loan according to the penalty interest rate since the overdue date and charge the compound interest to the interest not paid on time according to the penalty interest rate.
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11.6
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If the Borrower fails to use the loan according to the Contract, the Lender has the right to stop offering loan, recover the loan in advance or terminate the Contract, and has the right to charge the interest to the loan illegally used by the Borrower according to the penalty interest rate since the date of breach, and charge the compound interest to the interest not paid on time according to the penalty interest rate.
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11.7
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The Lender has the right to stop offering loan, withdraw the loan not drew by the Borrower or recover partial or all loans in advance if the Borrower has one of the following conditions; if the loan cannot be recovered, the liquidated damage shall be charged according to penalty interest rate of the overdue loan daily:
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11.7.1
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The Borrower provides any false loan review information that conceal any important fact, or provides false balance sheet, income statement and other financial accounting materials that conceal any important fact;
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11.7.2
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The Borrower violates agreement on Item 9.6 of Article 9 in the Contract;
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11.7.3
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The Borrower violates agreement on Item 9.7 of Article 9 in the Contract;
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11.7.4
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The Borrower violates agreement on Item 9.9 of Article 9 in the Contract, which severely influences or threatens the creditor's rights realization of the Lender;
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11.7.5
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The Borrower violates agreement on Item 9.10 of Article 9 in the Contract;
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11.7.6
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The Borrower violates agreement on Item 9.11 of Article 9 in the Contract, which has impact on the creditor's rights safety of the Lender;
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11.7.7
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The Borrower violates agreement on Item 9.12 of Article 9 in the Contract, which threatens the creditor's rights safety of the Lender;
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The Borrower violates agreement on Item 9.13 of Article 9 in the Contract, which severely influences the creditor's rights realization of the Lender or may cause heavy loss of the Lender;
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11.7.9
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Any other situations may threaten the creditor's rights realization of the Lender or cause heavy loss of the Lender.
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11.8
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If the Borrower breaks the Contract and the Lender takes legal actions like lawsuit and arbitration to realize the creditor’s rights, the attorney fee, travel expense and other expenses for realizing creditor’s rights paid by the Lender shall be assumed by the Borrower.
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Article 12: Taking effect, modification and termination of contract
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12.1
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The Contract shall take effect after being signed and sealed by the Lender and the Borrower. If it is guaranteed, it shall come into force after the guaranty contract agreed in Item 8.2 of Article 8 in the Contract taking effect.
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12.2
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If the Borrower cannot repay the loan on time and it needs to extend the period, it shall apply for extending the period to the Lender in written 60 working days before the expiration of the loan term agreed in the Contract; and if it is guaranteed, the Borrower shall also provide the written opinion that the Guarantor agrees to continue to guarantee or provide other legal and valid guaranty accepted by the Lender. The agreement on extending loan term shall be signed after the Lender approving to agree.
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12.3
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The Lender has the right to terminate the Contract and require the Borrower to repay the principal and interest of the loan under the Contract in advance and compensate for the loss if Party B:
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12.3.1
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Violates agreement on Item 9.14 of Article 9 in the Contract;
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12.3.2
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Violates agreement on Item 9.15 of Article 9 in the Contract;
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12.3.3
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Fails to pay the loan interest according to the Contract for 3 months continuously or 6 months accumulatively;
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12.3.4
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Has other severe noncompliance.
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12.4
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After the Contract taking effect, any party of the Borrower and the Lender shall not change or terminate the Contract arbitrarily, otherwise agreed by the Contract. If it needs to change or terminate the Contract, it shall notify the other party in written and sign the written agreement after the negotiation of both parties.
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Article 13: Dispute solution
13.1 Dispute aroused during performing the Contract shall be solved by the Borrower and the Lender through negotiation; if the negotiation fails, it shall be solved according to the following Item 13.1.1:
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13.1.1
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Appeal to the local People’s Court of the Lender.
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13.1.2
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Submit to the / arbitration committee (the arbitration place is / ), and it shall be arbitrated according to the current and valid arbitration rules of the committee when applying for arbitration.
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13.2
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During the period of lawsuit or arbitration, clauses of the Contract unrelated to the dispute shall be performed continuously.
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Article 14: Other matters agreed by the two parties
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14.1
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According to the spirit of Notice on Bozhou Xinghe Pharmaceutical Co., Ltd’s Credit Approval Matter with the number of W.N.F.Y.B [2010] No.218 issued by Anhui Branch of Agricultural Development Bank of China, based on the mode of one loan for receiving, the Lender issues a loan of RMB 10 million to the Borrower, Bozhou Xinghe Pharmaceutical Co., Ltd. and receives RMB 10 million loan under the former contract with the number of 34128101-2009 (BZ) No. 0040, and RMB 10 million agricultural medium and long-term loan subject for agricultural small business is changed as medium and long-term loan for TCM herbs of industrialized leading company.
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14.2
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14.3
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Article 15: Supplementary provisions
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15.1
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The attachment of the Contract is an integral part of the Contract, covering same legal effect with the Contract.
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15.2
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Except the separate agreements, the Borrower and Lender shall deliver all the notifications to the other party in written form. Any typewriting and telegraph delivered to the post office sent by the Lender to the Borrower shall be regarded as being delivered to the Borrower.
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15.3
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If a certain drawing or payment day is non-statutory working day during performing the Contract, it shall be postponed to next statutory working day.
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15.4
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The Contract has two copies, with the Borrower and the Lender holding one respectively, with the same legal effect.
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Article 16: Notes
The Lender has notified the Borrower to completely understand the meanings and legal effect of all the contract clauses, and has made the clauses notes required by the Borrower. The two parties have no disputes on understanding the clauses.
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Borrower (Seal): Bozhou Xinghe
Pharmaceutical Co., Ltd.
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Lender (Seal): Bozhou Branch of Agricultural
Development Bank of China
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Legal representative (principal) or the
authorized agent: Xxx Xxxxxxx
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Legal representative (principal) or the
authorized agent: Xxxx Xxxxxxxx
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June 2, 2010
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