LOAN AGREEMENT
This Loan Agreement dated March 31,
2010 by and between Xx. Xxxxx Xxx and Xx. Xxxxxxxx Xxx, with their address at 11
Youquan Road, Zhanqian Street, Jinzhou District, Dalian, China 116100 (the
"Borrowers") and RINO International Corporation, a Nevada corporation with its
address at 11 Youquan Road, Zhanqian Street, Jinzhou District, Dalian, China
116100 (the "Lender").
WITNESSETH
WHEREAS, the Lender has
provided a loan to the Borrowers in the amount of Three Million Five Thousand
dollars ($3,500,000.00) on December 7, 2009.
NOW THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, it is
hereby agreed as follows:
SECTION
1. DEFINITIONS
1.1. Defined
Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Collateral" shall be the
property described in the Deed of Trust.
"Default" shall mean any of
the events specified in Section 7.1 hereof, whether or not any requirement for
the giving of notice or the lapse of time or both has been
satisfied.
"Event of Default" shall mean
any of the events specified in Section 7.1 hereof.
"Lien" shall mean, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
"Loan" shall mean the amount
of monies borrowed by Borrowers from Lender under Section 2.1
hereof.
"Loan Agreement" shall mean
this Loan Agreement including all Exhibits hereto as amended or supplemented
from time to time.
"Loan Documents" shall mean
collectively, this Loan Agreement, the Note, and the Deed of Trust, and all
other agreements, documents, instruments or certificates delivered in connection
with the Loan Agreement.
"Note" shall mean the secured
promissory note described in Section 2.1 hereof and attached hereto as Exhibit
2.1 or any promissory note issued in exchange therefor.
"Obligations" shall mean all
obligations and liabilities of the Borrowers to Lender whether now or hereafter
existing, including but not limited to under the Loan Documents.
"Person" shall mean any
individual, corporation, company, voluntary association, partnership, joint
venture, trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"Deed of Trust" shall mean the
Deed of Trust attached hereto as Exhibit 4.1.
1.2.
Use of
Defined Terms. All terms defined in this Loan Agreement shall
have such defined meanings when used (without definition) in the Note, the Deed
of Trust, certificates or other documents made or delivered pursuant to this
Loan Agreement.
1.3
Lender's
Discretion. Whenever the terms
"satisfactory to," "determined by," "acceptable to," "shall elect," "shall
request," or similar terms are used in this Loan Agreement or any of the other
Loan Documents to apply to Lender, except as otherwise specifically provided
herein or therein, such terms shall mean satisfactory to, at the election of,
determined by, acceptable to, or requested by, as applicable, Lender, in its
sole discretion.
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1.4.
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Statements
as to Knowledge. Any statements, representations or
warranties which are based upon the knowledge of the Borrowers shall be
deemed to have been made after due inquiry with respect to the matter in
question but without Borrowers being required to seek an opinion of
counsel with respect thereto.
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SECTION
2. AMOUNT
AND TERMS OF LOAN
2.1 Loan. Subject
at all times to all of the terms and conditions of this Loan Agreement, the
Lender agrees to advance to Borrowers the sum of Three Million Five Hundred
Thousand dollars ($3,500,000.00) which sum is hereby acknowledged to have been
delivered to the account of the Borrowers. Such Loan is to be evidenced by the
Note in the format of Exhibit 2.1 attached hereto and shall have a term
commencing on December 7, 2009 (the “Issuance Date”) and terminating on May 10,
2010 (the "Maturity Date" or "Maturity"). The Note may be prepaid at any time
before the Maturity Date with no less than five (5) days notice to
Lender.
2.2. Fees and
Interest.
(a) The
Borrowers shall pay to the Lender interest on the unpaid principal amount of the
Loan, for the period commencing on the Issuance Date until such Loan is paid in
full at a rate per annum equal to 5.25%.
(b) Interest
defined in Section 2.2(a) shall be computed on the basis of a 360-day year for
the actual number of days elapsed, shall be due and payable on the Maturity
Date.
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(c)
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In
the event that Borrowers fails to timely pay any interest or principal
hereunder when due or upon the occurrence of any Event of Default
(hereinafter defined) hereunder, such unpaid principal or interest shall
accrue interest thereafter at a rate per annum equal to three percent (3%)
above the rate otherwise applicable thereto (the "Post-Default Rate") and
shall be payable on demand.
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(d) Intentionally
deleted.
2.3. Principal
Payment. Principal payment on account of the Note shall be on May 10,
2010. The amount of the
principal payment
shall equal the amount of Borrowers' Obligations to Lender then outstanding on
the Maturity Date.
2.4. Application
of Payments. Any funds received from or on behalf of the Borrowers
(whether pursuant to any of the terms and provisions of the Note or otherwise)
by Lender shall be applied to the following items in the following
manner:
(i) the
payment to or reimbursement of Lender for any fees and expenses for which it is
entitled to be paid or reimbursed pursuant to any of the provisions of the Loan
Documents;
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(ii)
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the
payment of any accrued and unpaid interest of the Note;
and
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(iii)
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for
such use as the Lender may elect, in accordance with this
Agreement.
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2.6. Closing.
The execution and delivery of the Loan Documents (the “Closing” or the “Closing
Date”).
SECTION
3. REPRESENTATIONS AND
WARRANTIES OF BORROWERS
Borrowers represent and warrant to
Lender that:
3.1 No Liens
or Restrictions. The Collateral is so owned as of the date of this Loan
Agreement by the Borrowers, free and clear of any Lien.
3.2 Consents. This
Loan Agreement and all the other Loan Documents executed by and to be executed
by Borrowers constitute valid and binding obligations of Borrowers enforceable
in accordance with their respective terms. To the Borrowers'
knowledge, no consent of any other party and no consent, license, approval, or
authorization of any governmental authority is required in connection with the
borrowing by Borrowers hereunder, the execution, delivery, and performance of
this Loan Agreement, and any of the other Loan Documents executed or to be
executed in connection herewith.
3.3 No
Conflicts. The borrowing by the Borrowers hereunder and the
execution and delivery by the Borrowers of this Loan Agreement and other Loan
Documents executed and to be executed by Borrowers, do not conflict with or
result in the breach of any agreement, mortgage or similar instrument under
which Borrowers or any of his properties are bound, or, to Borrowers' knowledge,
any law, rule, or regulation of any governmental agency applicable to them or
said properties.
3.4 Litigation. There
is no action or proceeding pending or, to the knowledge of Borrowers,
contemplated or threatened against Borrowers before or by any court, arbitrator,
grand jury or administrative agency, any governmental authority, bureau, agency,
or instrumentality which might reasonably foreseeable result in a material
adverse change in the financial condition of Borrowers.
3.5 No
Defaults. Borrowers are not in default in the payment or
performance of any of his obligations or in the performance of any contract,
agreement or other instrument to which they are a party or by which any of their
assets or properties may be bound.
SECTION
4. CONDITIONS TO LENDER'S
OBLIGATIONS
The obligation of the Lender to make
the Loan is subject to the satisfaction of the following conditions precedent
(to the satisfaction of the Lender):
4.1 Pledge. The
Borrowers shall have delivered to the Lender:
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a.
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the
Note, in the form of Exhibit 2.1 attached hereto, duly executed by the
Borrowers; and
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b.
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the
Deed of Trust, in the form of Exhibit 4.1 attached hereto, duly executed
by the Borrowers,
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4.2 Legal
Matters. All matters and all documentation and other
instruments in connection with the Loan shall be satisfactory in form and
substance to Lender and its counsel, and counsel to Lender shall have received
copies of all documents which it may reasonably request in connection with the
Loan.
4.3 Regulations. The
making of the Loan by Lender to Borrowers and the other transactions
contemplated hereby, including but not limited to the execution, delivery and
performance of the Deed of Trust shall be in compliance with applicable laws and
government regulations imposed upon Lender and the Borrowers.
4.4 Intentionally
deleted.
4.5 No
Judgment and Litigation. Lender shall have received evidence
that (i) there exists no judgment, order, injunction or other restraint issued
or filed which prohibits the making of the Loan or the consummation of the other
transactions contemplated hereby, and (ii) no action, suit, litigation or
similar proceeding at law or in equity by or before any court, governmental
authority, or agency exists or is threatened with respect to the transactions
contemplated hereby.
SECTION
5. AFFIRMATIVE
COVENANTS
Borrowers hereby covenants that, so
long as any of the Obligations remains outstanding and unpaid, Borrowers shall,
unless otherwise consented to in writing by Lender:
5.1 Notices. Promptly
give notice in writing to Lender of (a) the occurrence of any Default or Event
of Default under this Loan Agreement or any other Loan Document or (b) of any
default whether or not any requirement for the giving of notice or the lapse of
time or both has been satisfied under any instrument or agreement of Borrowers
which could have a materially adverse effect on the Collateral.
5.2 Notice of
Litigation and Other Matters. Promptly upon learning of (a)
the institution of any investigation or proceeding by any governmental authority
or agency; or (b) any action, suit, proceeding which names as a party or may
effect the Borrowers involving individually amounts greater than $1,000,000 and
in the aggregate greater than $3,000,000, Borrowers shall give notice to the
Lender of any of the foregoing events describing the substance and status of the
matter involved.
SECTION
6. NEGATIVE
COVENANTS
Borrowers covenants that so long as any
of the Obligations remains outstanding and unpaid, the Borrowers shall not
without Lender's express prior written consent, create, assume or suffer to
exist any Lien of any kind upon any of the Collateral, except for liens and
security interests in favor of Lender.
SECTION
7. EVENTS
OF DEFAULT AND REMEDIES
7.1 Events of
Default. An "Event of Default" shall exist if any one or more
of the following shall occur:
(a) Failure
by Borrowers to pay the principal of the Note within ten business days of the
date when due, whether on the date fixed for payment or by acceleration or
otherwise, or the failure by Borrowers to pay any interest defined in Section
2.2. hereof within ten business days of the date such interest becomes due;
or
(b) If
any representation or warranty made by Borrowers in this Loan Agreement or in
any certificate or statement furnished at the time of Closing or pursuant to
this Loan Agreement or any other Loan Document shall prove to have been
knowingly untrue or misleading in any material respect at the time made;
or
(c) Default
by Borrowers in the performance or observance of any covenant or agreement
contained in this Loan Agreement or default in any other Loan Document which is
not cured within any applicable grace period for therein, if any;
or
(d) A
final judgment for the payment of money in excess of $3,000,000 shall be
rendered against Borrowers, and such judgment shall remain undischarged for a
period of sixty days from the date of entry thereof unless within such sixty day
period such judgment shall be stayed, and appeal taken therefrom and the
execution thereon stayed during such appeal; or
(e) If
the Borrowers shall default in respect of any evidence of indebtedness or under
any agreement under which any notes or other evidence of indebtedness of
Borrowers are issued, if the effect thereof is to cause, or permit the holder or
holders thereof to cause, such obligation or obligations in an amount in excess
of $3,000,000 in the aggregate to become due prior to its or their stated
maturity or to permit to acceleration thereof; or
(f)
If an Event of Default under the Deed of Trust of even
date herewith shall occur and any grace period provided for therein shall have
expired; or
(g) If
Borrowers shall make a general assignment for the benefit of creditors or
consent to the appointment of a receiver, liquidator, custodian, or similar
official of all or substantially all of their properties, or any such official
is placed in control of such properties, or Borrowers admit in writing their
inability to pay their debts as they mature, or the Borrowers shall commence any
action or proceeding or take advantage of or file under any federal or state
insolvency statute, including, without limitation, the United States Bankruptcy
Code, seeking to have an order for relief entered with respect to the Borrowers
or seeking adjudication as a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or other relief with respect
to them or their debts; or
(h) There
shall be commenced against Borrowers any action or proceeding of the nature
referred to in subsection (g) of this Section 7.1, or seeking issuance of a
warrant of attachment, execution, distraint, or similar process against all or
any substantial part of the property of Borrowers, which results in the entry of
an order for relief which remains undismissed, undischarged or unbonded for a
period of sixty days; or
(i)
The Deed of Trust shall cease at any time after its execution
and delivery and for any reason to create a valid and perfected first priority
security interest in and to the property subject thereto or the validity or
priority of such security interest shall be contested by Borrowers or by any
other Person; or any of the other Loan Documents shall at any time after their
execution and delivery for any reason cease to be in full force and effect or
shall be declared null or void, or the validity or enforceability thereof shall
be contested by Borrowers or by any other Person; or
7.2 Rights.
Upon the occurrence of an Event of Default, specified in Subsections 7.1(g) or
7.1(h), the Note, together with any accrued and unpaid interest thereon, shall
be immediately due and payable without notice or demand. Upon the occurrence of
an Event of Default other than those specified in Subsections 7.1(g) and 7.1(h),
Lender may declare, at its option, so long as the Event of Default is continuing
at the time notice thereof is given and any applicable grace period has expired,
upon five calendar days notice or demand, the Note to be immediately due and
payable. In any case, the Note shall become due and payable without
presentment, demand or protest, all of which are hereby expressly
waived.
At any time after the date first above
written, Lender shall thereupon have the rights, benefits, and remedies afforded
to it under any of the Loan Documents with respect to the Collateral and may
take, use, sell or otherwise, encumber or dispose of the Collateral as if it
were the Lender’s own property. Borrowers agrees that Lender may or may not
proceed, as it determines in its sole discretion, with any or all other rights,
benefits, and remedies which it may have against Borrowers.
Anything herein to the contrary
notwithstanding, (but except as provided below), the Lender agrees, for itself,
its representatives, successors, endorsees and assigns, that: the Lender (and
any such representative, successor, endorsee or assignee) shall look to the
property encumbered by the Deed of Trust and/or the other instruments of
security that secure the Note for payment of the Obligations, and will not make
any claim or institute any action or proceeding against the Borrowers (or any
representatives, successors, assigns or affiliates of the Borrowers) for any
deficiency remaining after collection upon the Collateral. Provided, however,
and notwithstanding the foregoing, the Borrowers are and will remain personally
liable for any deficiency remaining after collection of the pledged collateral
to the extent of any loss suffered by Lender, or its representatives,
successors, endorsees or assigns, if such loss is caused by Borrowers based in
whole or in part upon:
(i) Damages
arising from any fraud, misrepresentations or the breach of any covenant or
agreement; and/or
(ii) Damage
to the pledged collateral resulting from gross negligence or intentional acts;
and/or
(iii) Failure
to pay taxes or other property-related liens; and/or
(iv) Damages
arising from the failure to comply with any and all laws.
SECTION
8. MISCELLANEOUS
8.1. Redelivery
of Collateral. Lender agrees that, within three business days of
Borrowers’ full payment of the Obligations, to return the Collateral to
Borrowers at the address specified herein for the giving of notices or to such
other person and address as Borrowers specifies in writing to
Lender.
8.2 Notices. All
notices, requests or other communications to either of the parties by the other
shall be in writing and shall be deemed duly given on the earlier of the date
the same is delivered in person or when deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested, as
follows:
If to Lender:
RINO International
Corporation
11
Youquan Road, Zhanqian Street,
Jinzhou
District, Dalian, China 116100
If to the Borrowers:
Xx. Xxxxx Xxx and Xx. Xxxxxxxx
Xxx
11
Youquan Road, Zhanqian Street,
Jinzhou
District, Dalian, China 116100
Either party may designate by notice in
writing to the other a new address to which notices, requests and other
communications hereunder shall be given.
8.3 Construction.
This Loan Agreement, the Note and all instruments or agreements delivered
hereunder shall be governed by and construed in accordance with the laws of the
State of New York, excluding therefrom any principles of conflicts of
laws. If any of the provisions of this Loan Agreement shall be or
become illegal or unenforceable under any law, the other provisions shall remain
in full force and effect.
8.4 Further
Assurances. Borrowers hereby agrees to execute and deliver such further
instruments and documents as may be reasonably requested by Lender in order to
carry out fully the intent and accomplish the purposes of this Loan Agreement
and the transactions referred to herein. Borrowers agrees to take any action
which Lender may reasonably request in order to obtain and enjoy the full rights
and benefits granted to Lender by this Loan Agreement and each other agreement,
instrument and document delivered to Lender in connection herewith, including
specifically, at Borrowers' own cost and expense, the use of its best efforts to
assist in obtaining consent of any government agency or self-regulatory
organization for an action or transaction contemplated by this Loan Agreement
which is then required by law.
8.5 Survival
of Agreements. Except as herein provided, all agreements, representations
and warranties made herein and in any certificate delivered pursuant hereto,
shall survive the execution and delivery of this Loan Agreement and the Note,
and shall continue in full force and effect until the indebtedness of Borrowers
under the Note and all other Obligations have been paid in full.
8.6 Entire
Agreement. This Loan Agreement and Other Loan Documents contain the
entire agreement between the parties hereto and may be amended, changed or
terminated only by an instrument in writing signed by the parties
hereto.
8.7 Waivers.
No failure to exercise and no delay in exercising, on the part of Lender, any
right, power or privilege under this Loan Agreement or under the Note, or any
agreement or instrument delivered to Lender hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. No waiver of any provision of this
Loan Agreement, the Deed of Trust or the Note or any agreement or instrument
delivered hereunder shall be effective unless executed by Lender and any such
waiver shall not constitute a waiver in the future of any of the provisions of
any of the foregoing documents, except as may be specifically provided in any
such waiver. No notice to Borrowers from Lender shall entitle Borrowers to any
other or further notice in any circumstance unless expressly provided for in
such notice or this Loan Agreement. No course of dealing between
Borrowers and Lender shall operate as a waiver of any of the rights of Lender
under this Loan Agreement.
8.8 Gender
and Number. Unless the context otherwise requires, when used herein, the
singular includes the plural, and vice-versa, and the masculine includes the
feminine and neuter, and vice-versa.
8.9 Captions.
Captions used herein are inserted for convenience only and shall not be given
any legal effect.
8.10 Counterparts.
This Loan Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same agreement.
8.11 Successors
and Assigns. This Loan Agreement shall be binding upon and inure to the
benefit of Borrowers and Lender and their respective successors and assigns
except that the rights and obligations of Borrowers hereunder may not be
assigned or transferred in any respect. The provisions of this Loan
Agreement are intended to be for the benefit of any holder, from time to time,
of the Note and shall be enforceable by any such holder, whether or not an
expressed assignment to such holder of rights under this Loan Agreement has been
made by Lender or its successors or assigns.
8.12 Confidentiality.
This Loan Agreement and the other Loan Documents are to be kept confidential and
are not to be reproduced in any manner whosoever for Persons other than the
parties hereto. Each Party agrees not to circumvent the legitimate interests of
the other party and to maintain this transaction in strict confidentiality. Each
party agrees to maintain the confidentiality of any trade secrets, techniques,
and contracts and contacts of the other party. Each party agrees not to engage
in unauthorized communications (i.e. telephone calls, written inquiries, etc.)
with the other party’s banks, insurers, contracting parties and
contacts.
8.13 Consent
to Jurisdiction: Venue; Jury Trial Waiver. Borrowers hereby
consents to the jurisdiction of the courts of the State of New York, as well as
to the jurisdiction of all courts from which an appeal may be taken from the
aforesaid courts, for the purpose of any suit, action or other proceeding
arising out of any of Borrowers' obligations under or with respect to this Loan
Agreement, and expressly waives any and all objections Borrowers may have as to
venue in any of such courts. In addition, Borrowers consents to the
service of process by United States certified or registered mail, return receipt
request, addressed to Borrowers at the address provided
herein. Borrowers also, to the extent permitted by law, waives trial
by jury in any action brought on or with respect to this Loan Agreement and
agrees that in the event this Loan Agreement shall be successfully enforced by
suit or otherwise, Borrowers will reimburse the holder or holders of the
Obligations, upon demand, for all reasonable expenses incurred in connection
therewith, including, without limitation, reasonable attorneys' fees and
expenses.
IN WITNESS WHEREOF, the
parties hereto have caused this Loan Agreement to be duly executed and delivered
as of the day and year first above written.
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Borrowers:
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Xx.
Xxxxx Xxx
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Xx.
Xxxxxxxx Xxx
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Lender:
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By:
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For:
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RINO
International
Corporation
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IT IS
SPECIFICALLY AGREED AND UNDERSTOOD THAT THE TRANSMITTAL OF THIS LOAN AGREEMENT
DOES NOT CONSTITUTE AN OFFER BY THE PROPOSED LENDER AND THAT THE PROPOSED LOAN
AGREEMENT SHALL NOT BE BINDING UPON THE PROPOSED LENDER UNLESS ACTUALLY SIGNED
BY THE LENDER. MOREOVER, IT IS SPECIFICALLY AGREED THAT THE ENCLOSED DOES NOT
REPRESENT A NOTE OR MEMORANDUM OF AGREEMENT UNTIL EXECUTED AND PERFORMED. THE
LENDER SHALL BE UNDER NO OBLIGATION TO PROCEED WITH THE CONSUMMATION OF THIS
TRANSACTION.
EXHIBIT
2.1
SECURED
PROMISSORY NOTE
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
THE DEBTOR SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE DEBTOR, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER THE ACT OR UNLESS SOLD PURSUANT TO, AND IN ACCORDANCE WITH, RULE 144 OR
RULE 000X XXXXX XXX XXX XX XXXXXXX XXX XXXXXX XXXXXX IN ACCORDANCE WITH RULE 904
OF REGULATION S UNDER THE ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND
REGULATIONS.
SECURED
PROMISSORY NOTE
$3,500,000.00
Issue
Date: March 31, 2010
FOR VALUE
RECEIVED, Xx. Xxxxx Xxx and Xx. Xxxxxxxx Xxx (collectively referred to as the
"Debtor")
hereby promises to pay in accordance with the provisions hereof to the order of
RINO International Corporation, a Nevada corporation or its successors, assigns
and legal representatives (the "Holder"),
at 11 Youquan Road, Zhanqian Street, Jinzhou District, Dalian, China 116100, or
at such other location as the Holder may designate from time to time, the
aggregate principal sum of Three Million Five Hundred Thousand ($3,500,000.00)
Dollars, in lawful money of the United States of America, together with interest
thereon at a rate per annum equal to 5.25% (the "Interest
Rate"). This Note is issued pursuant to that certain Loan Agreement by
and between the Debtor and the Holder, and the Holder and this Note are subject
to the terms and entitled to the benefits of the Loan Agreement. The terms used
in this Note that are not defined herein, shall have the meaning as set forth in
the Loan Agreement.
1.
Maturity.
(a) Unless
prepaid by the Debtor in accordance with Section 4 hereof, the Note shall mature
on May 10, 2010 (the “Maturity
Date”). On the Maturity Date, unless otherwise prepaid in
accordance with the provisions hereof, all outstanding principal and any accrued
and unpaid interest due and owing on the Note shall be immediately paid by the
Debtor.
(b) Intentionally
deleted.
2.
Calculation
and Payment of Interest.
(a) The
Note shall bear interest ("Interest")
at a rate equal to 5.25% per annum on a 360-day year (the "Interest
Rate"). To the extent unpaid, Interest shall accrue on all outstanding
principal until all amounts owed under the Note shall be fully repaid and shall
be payable in full on the Maturity Date.
(b) Intentionally
deleted.
(c) All
payments to be made by the Debtor hereunder or pursuant to the Note shall be
made, without setoff or counterclaim, in lawful money of the United States or
the equivalence of Chinese Yuan (Renminbi) and in immediately available
funds.
3.
Prepayment.
(a) Voluntary
Prepayment. All or any portion of the Note (along with all
interest accrued and the Applicable Accrued Value) may be prepaid by the Debtor
on or after the fifth (5th)
business day upon giving notice to Holder (the "Prepayment
Date") in accordance with Section 16 of this Note of the Debtor's intent
to prepay the Note.
(b) Intentionally
deleted.
4.
Covenants. The
Debtor agrees that, so long as any amount payable under the Note as defined in
the Loan Agreement, remains unpaid, it will not without the prior written
consent of the Holder:
(a) Intentionally
deleted;
(b) create,
incur, assume or suffer to exist any lien, claim, pledge, charge, security
interest or encumbrance of any kind ("Liens")
on any asset or property secured by the Deed of Trust; or
(c) Intentionally
deleted.
(d) Notwithstanding
anything to the contrary in this Note, the Debtor can create, incur, guarantee,
issue, assume or in any manner become liable in respect of, any obligation,
secured or unsecured provided the proceeds of which are used to pay all
outstanding obligations to Holder (including principal and interest together
with costs and expenses, including, without limitation, reasonable fees, charges
and disbursements of counsel) in accordance with the provisions
herein.
5.
Intentionally
Deleted.
6.
Intentionally
Deleted.
7.
Security.
(a) The
indebtedness evidenced by this Note and the obligations created hereby are
secured by a first priority lien on the Collateral pursuant to the Loan
Agreement and the Deed of Trust executed in connection
herewith. The Debtor represents and covenants that this grant of
security interest is, and shall remain while any indebtedness hereunder is
outstanding, senior in right to all other security interests of the Debtor with
regard to such assets and is not subordinated to any other security interest of
any other party.
8.
Events
of Default. Each of the following shall constitute an "Event
of Default" hereunder:
(a) The
Debtor shall fail to pay the principal amount of this Note, accrued interest
thereon when due and payable (whether at the Maturity Date, prepayment pursuant
to Section 4, upon acceleration or otherwise) and such failure shall continue
for a period of ten (10) business days, after delivery of written notice to the
Debtor of such failure;
(b) The
Debtor shall fail to pay any other amount under this Note when due and payable
(whether at the Maturity Date, prepayment pursuant to Section 4, upon
acceleration or otherwise) and such failure shall continue for a period of
fifteen (15) business days, after delivery of written notice to the Debtor of
such failure;
(c) There
shall have occurred and be continuing without cure for a period of not less than
twenty (20) business days after delivery of written notice to the Debtor a
material breach by the Debtor of any provision of this Note, the Deed of Trust,
or any other agreement of even date herewith between the Debtor and Holder, or
the mortgagor with regard to that certain mortgage of even date herewith
(collectively, the "Transaction
Documents");
(d) Any
representation or warranty made by the Debtor in the Transaction Documents shall
have been untrue or misleading in any material respect when made;
(e) Any
material covenant, agreement or obligation of the Debtor in any Transaction
Document shall be determined by a court of competent jurisdiction to be
unenforceable in any material respect;
(f) If
an Event of Default under the Deed of Trust of even date herewith shall occur
and any grace period provided for therein shall have expired;
(g) The
Deed of Trust shall cease at any time after its execution and delivery and for
any reason to create a valid and perfected first priority security interest in
and to the Collateral subject thereto or the validity or priority of such
security interest shall be contested by the Debtor or by any other
Person;
(h) If
Debtor shall make a general assignment for the benefit of creditors or consent
to the appointment of a receiver, liquidator, custodian, or similar official of
all or substantially all of their properties, or any such official is placed in
control of such properties, or Borrowers admits in writing their inability to
pay their debts as they mature, or the Borrowers shall commence any action or
proceeding or take advantage of or file under any federal or state insolvency
statute, including, without limitation, the United States Bankruptcy Code,
seeking to have an order for relief entered with respect to the Debtor or
seeking adjudication as a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or other relief with respect
to them or their debts.
Upon the
occurrence of any Event of Default, the Holder may, at its option, declare all
amounts due hereunder to be due and payable immediately and, upon any such
declaration, the same shall become and be immediately due and payable. Upon the
occurrence of any Event of Default, the Holder may, in addition to declaring all
amounts due hereunder to be immediately due and payable, pursue any available
remedy, whether at law or in equity. If an Event of Default occurs,
the Debtor shall pay to the Holder the reasonable attorneys' fees and
disbursements and all other reasonable out-of-pocket costs incurred by the
Holder in order to collect amounts due and owing under this Note or otherwise to
enforce the Holder's rights and remedies hereunder.
9.
Waiver
of Presentment, Demand and Dishonor. The Debtor hereby waives
presentment for payment, protest, demand, notice of protest, notice of
non-payment and diligence with respect to this Note, and waives and renounces
all rights to the benefit of any statute of limitations or any moratorium,
appraisement, exemption or homestead now provided or that hereafter may be
provided by any federal or applicable state statute, including but not limited
to exemptions provided by or allowed under the Federal Bankruptcy Code, both as
to itself and as to all of its property, whether real or personal, against the
enforcement and collection of the obligations evidenced by this Note and any and
all extensions, renewals and modifications hereof.
No
failure on the part of the Holder hereof to exercise any right or remedy
hereunder with respect to the Debtor, whether before or after the happening of
an Event of Default, shall constitute a waiver of any future Event of Default or
of any other Event of Default. No failure to accelerate the debt of
the Debtor evidenced hereby by reason of an Event of Default or indulgence
granted from time to time shall be construed to be a waiver of the right to
insist upon prompt payment thereafter; or shall be deemed to be a novation of
this Note or a reinstatement of such debt evidenced hereby or a waiver of such
right of acceleration or any other right, or be construed so as to preclude the
exercise of any right the Holder may have, whether by the laws of the state
governing this Note, by agreement or otherwise; and the Debtor hereby expressly
waives the benefit of any statute or rule of law or equity that would produce a
result contrary to or in conflict with the foregoing.
10. Intentionally
Deleted.
11. Enforcement
Costs. In the case of any Event of Default under this Note,
the Debtor shall pay to Holder such reasonable amounts as shall be sufficient to
cover the cost and expense of such Holder due to such Event of Default,
including all reasonable attorneys fees and expenses and all reasonable costs of
collection and enforcement.
12. Amendment;
Waiver. Any term of this Note may be amended or waived only
upon the written consent of the Debtor and the consent of the
Holder. No such waiver or consent on any one instance shall be
construed to be a continuing waiver or a waiver in any other instance unless it
expressly so provides.
13. Transfers. This
Note has not been and is not being registered under the provisions of the 1933
Act or any state securities laws and this Note may not be transferred prior to
the end of the holding period applicable to sales under Rule 144 unless in
accordance with applicable law and unless (1) the transferee is an “accredited
investor” (as defined in Regulation D under the 0000 Xxx) and (2) the Holder
shall have delivered to the Debtor an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Debtor, to the effect that this
Note may be sold or transferred without registration under the 1933 Act. Prior
to any such transfer, such transferee shall have represented in writing to the
Debtor that such transferee has requested and received from the Debtor all
information relating to the business, properties, operations, condition
(financial or other), results of operations or prospects of the Debtor and the
Subsidiaries deemed relevant by such transferee; that such transferee has been
afforded the opportunity to ask questions of the Debtor concerning the foregoing
and has had the opportunity to obtain and review the reports and other
information concerning the Debtor which at the time of such transfer have been
filed by the Debtor with the SEC pursuant to the 1934 Act.
14. Governing
Law; Consent to Jurisdiction. The validity,
construction and interpretation of this Note will be governed, and construed in
accordance with, the laws of the State of New York, without regard to the
principles of conflict of laws. EACH
OF THE DEBTORS AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT
TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS NOTE AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
Each of
the Debtor and, by its acceptance of this Note, the Holder irrevocably submits
to the exclusive jurisdiction of any state or federal court located in the State
of New York for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Note and the transactions contemplated
hereby. Each of the Debtor and, by its acceptance of this Note, the
Holder irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such
court. Each of the Debtor and, by its acceptance of this Note, the
Holder irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
15. Notices. All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified;
(b) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; (c) if transmitted by facsimile,
on the date of transmission with receipt of a transmittal confirmation; or (d)
the next business day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Debtor or the Holder
at the address below or at such address as either party hereto may designate by
10 days' advance written notice to the other party hereto.
Xx.
Xxxxx Xxx and Xx. Xxxxxxxx Xxx
11
Youquan Road, Zhanqian Street,
Jinzhou
District, Dalian, China 116100
With a
Copy to:
Guzov
Ofsink, LLC
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxx
Xxxxxx
RINO
International Corporation
11
Youquan Road, Zhanqian Street,
Jinzhou
District, Dalian, China 116100
With a
Copy to:
Guzov
Ofsink, LLC
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxx
Xxxxxx
17. Assignability.
This Note shall be binding upon the Debtor and its successors and assigns, and
shall inure to the benefit of and be binding upon the Holder and its successors
and permitted assigns.
[Signature
Page to Secured Promissory Note]
Dated: March
31, 2010
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Xxx
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EXHIBIT
4.1
DEED
OF TRUST
