Loan Agreement (English Translation)
EXHIBIT
10.3
(English
Translation)
|
Borrower:
|
Fanshi
County Xinyu Iron Resource Co., Ltd.
|
|
Legal
Representative:
|
Xxxxxxxx
Xxxx
|
|
Address:
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Daying
town, Fanshi County, Shanxi Province, PRC
|
|
Lender
(Pledgee):
|
Shanxi
Bestlink Management Consulting Co., Ltd.
|
|
Legal
Representative:
|
Beicang
Hou
|
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Address:
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8/F,
Beicang Building, Jianshe North Road No76, Taiyuan, Shanxi Province,
PRC
|
|
Guarantor
(Pledgor):
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All
of the shareholders of the Borrower, being Shanxi Changchi Enterprise
Co.,
Ltd. and Xxxxxxxx Xxxx
|
|
Address:
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12/F,
Beicang Building, Jianshe North Road No76, Taiyuan, Shanxi Province;
PRC
Liuxiang South Road No48,Taiyuan City, Shanxi Province,
PRC
|
This
agreement (“Agreement”) is entered into in Taiyuan on January 5, 2006 by the
above parties (“Parties”) pursuant to all applicable laws and regulations and
upon the mutual consent of the Parties
to adhere to the herein terms.
Terms
of the Loan
Article
1 Use
of
Proceeds
Borrower
shall use the proceeds of the loan in connection with the cash flow necessary
for Borrower’s operations.
Article
2 Loan
Amount
The
amount of the loan is Renminbi Five Hundred Thousand (RMB 500,000) (“Loan”).
Based on Borrower’s operations, Lender and Borrower may agree at any time to
increase the amount of the Loan. Borrower hereby warrants that, without Lender’s
written consent, Borrower may not borrow money or request loan guaranty from
third parties, and may not incur additional debts.
Article
3 Term
The
term
of the Loan is from January 5, 2006 until December 31, 2025.
Article
4 Interest
Rate; Late Payment Penalty
4.1 Interest
Rate
The
Loan
shall be interest-free.
4.2 Late
Payment Penalty
A
daily
late payment penalty shall be imposed on any amount of the Loan not repaid
at
the end of the Term, at the rate of 0.5% of the unpaid balance per day.
If
Borrower fails to repay the entire Loan at the end of the Term, Lender may
exercise its rights as Pledgee.
Article
5 Payment
of Loan
Lender
shall pay the proceeds of the Loan in installments, in the total sum of RMB
500,000 on or before the end of 2006.
Article
6 Repayment
of Loan
Borrower
shall repay the Loan in yearly installment payments.
Article
7 Early
Repayments
Borrower
may not make early repayments of the Loan without Lender’s written consent. In
the event that Borrower is experiencing financial difficulties, Lender may
demand for the immediate repayment of the Loan or, in the alternative, exercise
its rights as Pledgee to recover the Loan amount.
Article
8 Borrower’s
Rights and Obligations
8.1 Borrower
shall complete all procedures to effectuate the pledge within 30
days.
8.2 At
Lender’s request, Borrower shall provide Lender or its designee with all
financial, operational and management information, which information Borrower
warrants to be complete, current and accurate.
8.3 Borrower
warrants to timely repay the Loan and interests, if any.
8.4 Lender
or
its designee may examine Borrower’s financial records.
8.5 Borrower
shall notify Lender in writing within 7 days of the occurrence or likely
occurrence of the following:
8.5.1 Any
dispute between Pledgor and a third party
8.5.2 Any
lawsuit, arbitration or administrative actions that affect or may affect
Borrower’s ability to repay the Loan
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8.5.3
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Any
other event that affect or may affect Borrower’s ability to repay the
Loan
|
Article
9 Lender’s
Rights and Obligations
9.1 Lender
has the right to timely receive repayment of the Loan in full.
9.2 Lender
has the right to examine and verify the legality of all documents and records
provided by Borrower, including the use of the Loan proceeds.
9.3 Lender
shall maintain the pledge certificate and all related documents.
Guaranty
Article
10. This
Agreement is guaranteed by a pledge and a guaranty.
Article
11. Terms
of
the Pledge.
11.1 Pledgor
hereby acknowledges that this Agreement is crucial to Lender’s allocation of its
capital, and agrees that the Pledge be effectuated pursuant to Attachment
1,
and
further guarantees Borrower’s performance of the terms and conditions of this
Agreement.
In
the
event of Borrower’s breach, and in addition to any other rights of Lender,
Lender may enforce this Agreement against Pledgor to the extent of Pledgor’s
guaranty, including the right to demand Pledgor to transfer all pledged shares
to Lender or its designee based on the initial paid-in price of the register
capital.
11.3 Pledgor
shall provide Lender with all legally required documents effectuating the Pledge
within 10 working days from the effective date of this Agreement.
11.4 The
Pledge is separate and independent from all other terms of this Agreement.
If
any
clause of this Agreement is determined to be invalid or non-enforceable, Pledgor
shall assume all liabilities to the extent of Pledgor’s guaranty. In the event
that the Agreement between Lender and Borrower is deemed invalid, Pledgor shall
assume all resulting liabilities of Lender.
11.5 At
its
own expense, Pledgor shall use its best effort and take all actions necessary
to
effectuate the Pledge and secure the rights of Lender as Pledgee.
Article
12 Guaranty
of Guarantor
12.1 Extent
of
Guaranty and Guaranty Amount
Guarantor
hereby guarantees all of the obligations of Borrower and/or Pledgor under this
Agreement, including actual damages resulting from breach of said obligations,
as well as all expenses incurred by Lender to enforce its rights (including
without limitations fees legal, arbitration, travel, administrative, appraisal
and auction fees and expenses).
12.2 Form
of
Guaranty
The
Guranty is jointly made, and shall be in effect from the effective date of
this
Agreement until Borrower and/or Pledgor has satisfied all obligations under
the
Agreement, but in no event earlier than December 31, 2025.
12.3 Effectuating
the Guaranty
Pursuant
to the request of Lender and/or Pledgee, Guarantor shall assist Borrower and/or
Pledgor to satisfy their obligations under the Agreement, and Guarantor shall
waive its right of protest.
12.4 Exemption
Guarantor
shall further guarantee such other changes to the Agreement agreed to between
Lender and/or Pledgee on the one hand and Borrower and/or Pledgor on the other,
to the extent that such changes may increase the obligations of Borrower and/or
Pledgor.
12.5 Effectiveness
of the Guaranty
This
Guaranty is effective from the signing of or affixing seal to this Agreement
by
Guarantor’s representative and delivering same to Lender and/or
Pledgee.
Breach
Article
13 Event
of
Breach
13.1 If
Borrower obtains the Loan through false data or documentation
13.2 If
Borrower fails to timely repay the Loan, interest or related fees
13.3 If
Borrower uses the Loan proceeds for purposes other than as described in Article
1
13.4 If
Borrower refuses or otherwise prevent Lender (including its authorized
representative) from supervising and inspecting the Borrower’s use of the Loan
proceeds
13.5 If
other
debts or liabilities of Borrower affect or may affect its ability to satisfy
its
obligations to Lender
13.6 If
Borrower is in financial difficulties or is involved in litigation, arbitration
or other legal proceedings, the occurrence of any one of which in Lender’s
opinion affect or may affect Lender’s rights under the Agreement
13.7 If
any
part or all of the Guaranty is ineffective or terminated or is not effectuated,
and Borrower fails to secure new guaranty at the request of
Lender
13.8 If
Borrower disposes its assets or contractual rights without Lender’s
authorization, or if any other event occurs that affect Borrower’s ability to
repay the Loan
Article
14 Remedies
On
the
occurrence of any Event of Breach, Lender shall be entitled to do any one of
the
following or combination thereof:
14.1 Declare
the Loan due immediately and demand repayment of the Loan and all outstanding
interests and related fees;
14.2 Exercise
its rights under the Guaranty; and/or
14.3 Terminate
its relationship with Borrower
General
Provisions
Article
15 During
the Term, Borrower’s obligation to make annual repayments of the Loan is
irrespective of Borrower’s ability to complete its plans
Article
16 Dispute
Resolution
The
parties shall strive to settle any dispute arising from this Agreement through
friendly consultation. In case no settlement can be reached through
consultation, either party may submit the dispute to China International
Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in Beijing
in accordance with the rules of CIETAC. The decision of the CIETAC shall be
final and binding upon all parties. During the period when a dispute is being
resolved, the parties shall in all other respects continue their implementation
of this Agreement.
Article
17 Effective
Date of this Agreement
This
Agreement shall become effective on the date the representatives of all parties
sign the Agreement.
Article
18 Notice
Notices
pursuant to this Agreement shall be written in Chinese and shall be delivered
or
sent by mail, telegram or facsimile transmission to the address of the relevant
party set forth below. A party shall provide written notice of any change in
address or facsimile number within 10 days prior to the change.
Article
19 Four
copies of this Agreement shall be made, one copy to each party, and each copy
having the same force and effect.
[Remainder
of Page Intentionally Blank]
[Signature
Page]
Borrower:
Fanshi
County Xinyu Iron Resource Co., Ltd.
/s/
Xxxxxxxx Xxxx
Xxxxxxxx
Xxxx
Legal
Representative
January
5, 2006
Lender
(Pledgee):
Shanxi
Bestlink Management Consulting Co., Ltd.
/s/
Beicang Hou
Beicang Hou
Legal
Representative
January
5, 2006
Guarantor:
Shanxi
Changchi Enterprise Co., Ltd.
/s/
Beicang Hou
Beicang
Hou
Legal
Representative
January
5, 2006
Guarantor:
/s/
Xxxxxxxx Xxxx
Xxxxxxxx Xxxx
Xxxxxxxx Xxxx
January
5, 2006
