BANK OF CHINA Loan Contract (For Short Term)
EXHIBIT
10.1
BANK
OF CHINA
(For
Short Term)
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The
Borrower:
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Luoshan
finding Chemical Co., Ltd.
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Business
License No.:
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4130282000056
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Legal
Representative:
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Zhou
Dianchang
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Address:
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Xicheng
Industrial Zone, Luoshan
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A/C
and opening Bank:
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Bank
of China, Luoshan Sub-branch, 00000000000000
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TEL:
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0S76-2168518
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The
Lender:
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Bank
of China, Luoshan Sub-branch
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Legal
Representative:
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Xxxx
Xxxx'an
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Address:
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No.110
Chengguan Xidajie, Luoshan
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TEL:
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0000-0000000
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According
to the applicable laws, the Borrower and Lender, after reaching an agreement
through negotiations, hereby enter into this contract pursuant to Borrowers
application to Lender for a short-term Reaminbi loan.
Article
1 The
Loan
The
total
loan amount (in capital letters) is RMI3 TEN MILLION exactly, RMB 10,000,000
(equivalent to US 1,250,000 dollars).
Article
2 Term
The
loan
term is twelve months, ranging from the designed Advance Date of the loan to
the
last designed Repayment Date of the loan. Shall the designed Advance Date be
some particular period, the beginning day of that period shall be deemed as
the
outlined "Advance Date".
Article
3 Use
The
loans
credited under the Contract shall be solely used for purchasing raw materials
and shall not be diverted on any other purposes of uses unless with a prior
written consent of the Lender.
Article
4 Interest
rate & Calculation
The
annual interest rate: 5.58%, counted from the actual advance date and by actual
loan days and amount with the calculation base of 360 days per
annum.
The
formula on interest calculation:
The
interest due under this loan contract shall be collected by each quarter, say
on
March 20, June 30, September 20th
and
December 20 every year.
Article
5 Conditions
on Loan Advance
Shall
the
Borrower fail to meet any one of the following conditions, the Lender has the
right to refuse its application on the advance of the loan.
| 1) |
submit
the written advance application and related certifications on the
uses of
the loan five days earlier;
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| 2) |
the
loan contract and its appendixes have all been
effected;
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| 3) |
the
guaranty under this Contract as said in Article 4 hereof has been
effected;
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| 4) |
the
Borrower has already established the bank accounts for the loan advance,
interest and other expense payment and loan repayment
accordingly;
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| 5) |
submit
the Board Resolution and the Letter of Designation regarding this
Loan
Contract, which has been approved by the Board Meeting or other relevant
authorities;
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| 6) |
submit
the name-list and their signatory samples, the persons of whom shall
sign
either on the contract or voucher;
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| 7) |
there
has no occurrence of default as said in Article 11
hereof;
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| 8) |
meet
other conditions co-designated by both parties or pursuant to applicable
laws & regulations.
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Article
6 Loan
Advance Date
The
Borrower shall advance the total loan amount on March 31, 2006 by one time.
Article
7 Loan
Advance Procedure
Each
time
as of the advance, the Borrower shall submit the advance application as required
and complete all the relevant procedures as well.
Article
8 Payment
on the Loan
The
Borrower shall repay the principal and interest in full under the repayment
schedule below.
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Repayment
Times
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Repayment
Date
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Repayment
Amount
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Repayment
Times
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Repayment
Date
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Repayment
Xxxxxx
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0
(Xxxxxx Xxxx)
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0000-00-00
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XXX
10,000,000
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The
Borrower may make adjustment to above repayment schedule subject to the written
application 30-day earlier than the maturity date. Any changes or revision
made
to the schedule shall be co-confirmed by both parties in advance.
The
repayment in advance is allowed but subject to a fifteen-day prior notice to
the
Lender while the Lender has the right to collect the 10% interest payable on
the
advance payment part as the compensation. Whereas, the prepayment shall not
be
re-advanced once approved by the Lender.
Article
9 Guaranty
The
total
loan under this Contract shall adopt the 1) and 2) methods to provide
guaranty:
| 1) |
Xx.
Xxxx Dianchang and Xx. Xxxx Guiquan have the joint liability to provide
the guaranty on loan repayment and thereby shall sign the separate
Guarantee Contract numbered 0000 XxxXxxxxXxxXxxXx
No. 001
and 0000 XxxXxxxxXxxXxxXx
No. 002
with the Bank of China.
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| 2) |
Luoshan
Ending Chemical Co., Ltd. shall also provide security and sign a
separate
Security Contract numbered 2006
LuoZhongYinDiZi No 001
with the Bank of China.
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When
the
financial conditions of the guarantor deteriorates, its solvency distinctively
descends, or its guarantee capability is distinctively weakened or forfeited
because the guaranty devalues, is damaged or destroyed, the Lender has the
right
to request either new guaranty or to replace the Guarantor for the security
on
the loan.
Article
10 Declaration
and Warranties
The
Borrower hereby makes the declaration
as
follows:
| 1) |
that
the Borrower is legally registered and
incorporated;
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| 2) |
that
the Borrower has obtained the warrant required under this
Contract;
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| 3) |
that
all the files, data, statements and vouchers provided by the Borrower
are
true, accurate, integrate and
effective;
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| 4) |
that
the Borrower has not hidden any following occurrence or possible
occurrence which might affect the judgment towards its contract
performance:
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| i) |
if
there have any big severe law breaches and violation behaviors or
claims
on compensation related to either the Borrower or its key
management;
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| ii) |
if
the Borrower has any default under other
contracts;
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| iii) |
if
the Borrower has assumed any debts, contingent liability or the security
and guaranty to the third party;
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| iv) |
if
there has any lawsuit or arbitration suspended;
and
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| v) |
other
occasions that might affect the financial conditions and solvency
of the
Borrower.
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The
Borrower hereby makes the warranties
as
follows:
| 1) |
that
the Borrower assures to promptly provide the most updated financial
statements and related materials requested by the Lender, including
but
not limited to the previous-year financial statements and other files
or
data regarding the financial conditions and operation results of
the
Borrower;
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| 2) |
that
if the
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| 3) |
that
the Borrower would fully cooperate with the Lender for purposes of
supervision and inspection on uses of fund borrowed under this Loan
Contract;
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| 4) |
that
when the Borrower's registered capital, operational system or the
organizational form of property ownership is materially changed,
including
but not limited to, the practices of contracting, leasing operations,
joint operations, joint-stock reconstruction, mergers & acquisition,
joint-venture or cooperation, split-off & subsidiaries establishment,
the transfer of property ownership, capital reduction, winding-up,
dissolution and bankruptcy application, a prior written notice shall
be
delivered to the Lender and the approval is required if any above
actions
could cause an unfavorable impact towards the solvency of the
Borrower;
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| 5) |
that
the Borrower's act as a guarantor to a third party would not have
the
material adverse effect on its
solvency;
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| 6) |
that
the liquidation sequence of the loan under this Contract is in priority
than the loans from the Borrower’s shareholders and no less than those
indebtedness of same category;
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| 7) |
that
any of the following occurrences would be promptly noted to the
Lender:
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| i) |
any
types of breach or violation either under this Contract or any other
contracts;
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| ii) |
when
the Borrower alters its accreditation, amends the articles of association,
replaces its key management personnel, or makes key resolutions on
the
internal organizational framework;
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| iii) |
when
any material changes on Borrower's finance occurs or its financial
conditions deteriorates;
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| iv) |
when
the Borrower has been involved into any kind of big lawsuits or
arbitration cases; or
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| v) |
when
other issues that may significantly affect the Borrower's financial
position or solvency have occurred
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| 8) |
that
the Borrower shall deposit the full amount of the principal and interest
due 15 days earlier to the account;
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| 9) |
that
the loan settlement under this Loan Contract shall be processed in
the
branches of the Bank of China with the total amount up to the requirements
of the Lender; or
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| 10) |
that
the Borrower shall not distribute the interests or dividends in any
types
when the net profit after tax in related financial years is either
zero or
negative or is not enough to offset the accumulated loss of previous
years, or the profit before tax hasn't been used to liquidate the
Lender's
principal, interest and expenses due or insufficient to pay the principal,
interest and expenses of next term.
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Article
11 Defaults
& Disposal
In
case
Party A fails to repay the loan on schedule and neither reaches any further
agreement, Party B shall collect the overdue interest with a daily rate of
2.1
of ten thousand percent.
In
case
that the Borrower uses the loan on any other purposes rather than the
contractual one, the Lender has the right to impose a penalty interest rate
of a
daily 5 of ten thousand percent on the embezzled amount.
The
Lender may cease to release or cancel the loan funds unused by the Borrower
and
unilaterally declare all principals under the Loan Contract become due in
advance in case of any following events occurred:
| 1) |
if
the Borrower is delinquent to repay the principal and interest overdue
for
over 30 days;
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| 2) |
if
the embezzlement of the total loan amount overdue exceeds RMB 5
million;
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| 3) |
if
the Borrower violates its declaration to be true or its warranties
in
Article 14;
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| 4) |
if
the Borrower has any defaults or breaches under other
contracts;
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| 5) |
if
the Guarantor or mortgager has any breach under the guaranty that
may
affect its performance on the contractual
obligations;
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| 6) |
if
the operation of the Borrower terminates, wind-up, withdraws or goes
into
bankruptcy;.
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| 7) |
if
the financial conditions of the Borrower or its Guarantor is significantly
affected; or
|
S)
if the
Borrower fails to provide new guaranty when the old ones have been devalued,
damaged, destroyed, sealed up or frozen.
Article
12 Deduction
The
Borrower hereby irrevocably authorizes the Lender to directly withdraw funds
from its deposit accounts in the Bank of China for the recovery of the
principal, interest, penalty interest and other fees unpaid subject to the
approval of the Borrower.
Article
13 Taxes
& Expenses
The
Borrower shall undertake the taxes and expenses incurred under this Contract,
its performance and related disputes settlement, including but not limited
to
the stamp duty, interest withholding tax, legal fare, execution charge, attorney
fee, notarial charge and etc.
Article
14 Cancellation,
Transfer & Preservation of the Rights
The
Borrower shall fully repay the loan in terms of the Contract and shall only
make
a cancellation proposal subject to the approval of the Lender.
Without
the written approval of the Lender, the Borrower shall not transfer anything
under this Contract to the third ply
Article
15 Alteration
& Termination
Upon
the
mutual written approval, the Loan Contract can be revised, complemented or
terminated with all the revised and supplementary part inseparable to the whole
Contract.
Article
16 Applicable
laws, disputes settlement and jurisdiction
This
Loan
Contract is under the jurisdiction of PRC laws.
Any
disputes concerning the contract shall be resolved through mutual negotiations
initially; shall this fail, following method can be adopted as agreed by both
parties: apply the legal procedure at the local court where Lender locates.
Article
17 Appendix
The
appendixes attached hereafter and other related documents & materials
confirmed by both parties under this Loan Contract are inseparable components
to
this Loan Contract and holds equivalent legal force.
Article
18 Validation
This
Loan
Contract shall become effective once signed by legal representatives or
authorized representatives with official seals of both parties.
This
Loan
Contract is in quadruple with each party holding one copy of equivalent legal
force.
Article
19 Remarks
Both
the
Lender and the Borrower have fully negotiated regarding the terms and conditions
under this Loan Contract. The Lender has
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Borrower:
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Luoshan
Jinding Chemical Co., Ltd.
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Lender:
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Bank
of China, Luoshan Sub-branch
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Legal
Representative or Authorized Representative:
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Legal
Representative or Authorized Representative:
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Zhou
Dianchang
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Fan
Wanzhou
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(Signature)
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(Signature)
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/s/ Zhou
Dianchang
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/s/ Fan
Wanzhou
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Date: March 31,
2006.
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