Short-Term Loan Agreement*
EXHIBIT
10.17.1
To: Sub-branch of Zhengzhou Branch of
Shanghai Pudong Development Bank Number:
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Client
Name
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Henan
Gerui Composite Material Stock Co., Ltd.
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Date
of Application
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2008.07.23
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Address:
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1
Xinzheng Shuanghu Economic Development Zone, Zhengzhou
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Contact
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Xxxxxxx
Xxx
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Telephone
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0000-00000000
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Contact
of Financing Bank: (Fill out by the Financing Bank
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Tao
Jing
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Fax:
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0000-00000000
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The
Company hereby irrevocably applies to the bank for a short-term working
capital loan in accordance with the undermentioned terms of this
Agreement:
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I.
Important Provisions
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oThis Agreement
shall be the signing of an auxiliary financing document of the “Financing
Limit Agreement” (hereinafter referred to as the “Financing Limit
Agreement”) with a document number
of .
After entry of force of this Agreement, all of the terms under this
Agreement shall become part of the Financing Limit Agreement (If the
Client has already signed a financing limit agreement with the financing
bank, this item should be checked, and the document number of the
Financing Limit Agreement should be noted);
oThis Agreement
shall be an independent credit document signed between the Client and the
Financing Bank (if the Client has not signed a Financing Limit Agreement
with the Financing Bank, this item should be checked).
oThe purpose of
this loan for this Agreement is borrowing new loan to return old loan. The
Guarantors are well aware of the situation. The name of the original
agreement: Date
of
Signing: Number: (If
the purpose of the load is borrowing new loan to return old loan, then
this item must be selected).
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II.
Description of Loan
(Where
a Financing Limit Agreement signed by the customer has provisions
regarding the rate and penalty rate, the related columns of this Agreement
may be omitted)
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Types
of Short-Term Loan: A. Short-Term Loan with Fixed Time Limit; B.
Short-Term Loan with borrowing and return at any time
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Currency
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Amount
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Type
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Withdrawal
Date
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Due
Date (or Time Limit)
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Interest
Rate
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Method
of Interest Settlement
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Overdue
Penalty Interest Rate
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Penalty
Interest Rate for Embezzlement
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Renminbi
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Ten
Million Yuan
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A
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2008.7.23
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2009.3.18
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8.217%
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Monthly
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10.6821%
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16.434%
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Description
of Repayment Method:
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Repayment
in one lump sum
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Note:
The Renminbi interest rate is annual interest rate. Floating cycle must be
noted for floating interest rate. Due date must be filled out
for short-term loan with fixed time limit. The due date for short-term
loan with borrowing and returning at any time refers to the final return
date for the Client.
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III.
Description of Guarantee
(Where
the Financing Limit Agreement signed by the customer has provisions
regarding the conditions of guarantee, the related columns of this
Agreement may be omitted)
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Guarantor:
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Zhengzhou
Feida Communication Facilities Engineering Co., Ltd.
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Method of Guarantee: oMortgage;
oPledge; oGuarantee
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IV.
General Provisions
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The
Client hereby confirms that the following general provisions of the Loan
Agreement have been read and agreed:
1.
After the financing bank signs this Agreement, unless the applied loan has
been released to the Client in accordance with the provisions stipulated
under this Agreement, the financing bank may cancel the promise of loan as
agreed in this Agreement at any
time.
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*
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This
form of agreement is also used for a Loan Agreement dated May 26, 2008 in
an amount of RMB 10,000,000 valid from May 26, 2008 to May 25,
2009
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2.
Interest Payment Method Unless specified otherwise, the
interest payment method under this Agreement shall be calculated daily,
which shall be paid upon repayment of the principle.
3.
Submission of documents The Client guarantees that the
following documents or similar documents meeting the corresponding
conditions are submitted to the Financing Bank prior to withdrawal of
fund. However, the financing bank has no obligation to examine
the truthfulness of these documents:
(1)
Duplicate copies of the most recent Articles of Association and business
license of the Client;
(2)
The resolution of meeting of board of directors authorizing the Client to
sign this Agreement and the relevant auxiliary financing documents (If the
Articles of Association of the Client makes limitation regarding the
contract signing power of the legal representative);
(3)
The power of attorney for the authorized representative of the Client and
a signature sample of the authorized representative;
(4)
This Agreement that is legally and effectively signed by the
Client;
(5)
The date of withdrawal appointed by the Client shall be a business day of
the financing bank;
(6)
Where the loan under this Agreement has guarantee, the guarantee document
has already been signed and entered into force prior to the
withdrawal;
(7)
Other documents and/or conditions requested by the financing bank at
times
4.
In case that the appointed withdrawal date or repayment date is not a
business day of the financing bank, then the appointed withdrawal date or
repayment date shall be delayed to the next business day of the Financing
Bank accordingly. Interest shall be calculated and collected for the
delayed repayment period.
5.
Early Repayment and Premature Due For short-term loans with
borrowing and returning at any time, the Client may undergo early
repayment at any time before the due date. For short-term loans with fixed
time limit, other than the situation where the Financing Bank notifies the
Client regarding the premature due of loan, when the Client undergoes
early repayment, a written approval must be obtained from the Financing
Bank, and any costs or losses resulting from the early repayment must be
fully compensated to the Financing Bank. Any early repayment shall be
deemed as premature due of loan. Without giving any reason, the Financing
Bank has the right to notify the Client that the financing under this
Agreement is prematurely due at any time, and the Client shall immediately
repay the loan.
6.
Taxation Unless the laws require the Client to deduct the
relevant taxations upon repayment of the financing, the repayment by the
Client under this Agreement shall be paid in full amount without any
deduction. In case that the Client must deduct the relevant taxations in
accordance with the provisions of the laws, the Client shall pay
additional money to the Financing Bank, allowing the money received by the
Financing Bank equivalent to the amount that should be received by the
Financing Bank without any deduction.
7.
Declaration and Guarantee The Client makes the following
declarations and guarantees, and that the declarations and guarantees
shall be deemed being restated by the Client when the Financing Bank
provides financing in accordance with the provisions of this
Agreement:
(1)
The Client is a company registered and established in accordance with the
laws of China (excluding Hong Kong and Macau Special Administrative
Regions and Taiwan; similarly hereinafter), has the right to sign this
Agreement and any documents associated with this Agreement, and has taken
the necessary company action, allowing this Agreement and any documents
associated with this Agreement to be legal, effective, and compulsory
executable;
(2)
When the Client signs this Agreement and executes its obligations
stipulated under this Agreement, the Client shall not and will not violate
any other signed contracts or documents, Articles of Association, any
applicable laws, regulations, or administrative directives, and the
related documents, ruling, and judgment of the concerning authorities and
will not be in conflict with any previous arrangements or obligations
borne by the Client;
(3)
The Client and any of its shareholders and associated companies are not
involved in any liquidation, bankruptcy, reconstruction, being buy-out,
merger, separation, restructuring, dissolution, shutdown, suspension of
business or similar legal procedures with no occurrence of any situation
that may lead to involvement of the aforementioned legal
procedures;
(4)
The Client is not involved in any economic, civil, criminal,
administrative litigation procedures or similar arbitration proceedings
that may lead to unfavorable impact, with no occurrence of any situation
that may lead to involvement of the Client into the aforementioned
litigations or similar arbitration
proceedings;
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(5)
The legal representative, directors, supervisors, or other senior
managerial personnel of the Client and any major assets of the Client are
not involved in any compulsory execution, seizure, detainment, freezing,
lien, or supervisory control, with no occurrence of any situation that may
lead to involvement of the aforementioned situations;
(6)
The Client guarantees that all the financial reports (if any) have met the
requirements of Chinese laws. All reports and statements are
truthful, complete, and fairly reflect the financial state of the Client.
All the materials, documents, and information, including itself and the
guarantor provided by the Client to the Financing Bank during signing and
execution of this Agreement are truthful, valid, accurate and complete
without any concealment or omission;
(7)
The Client shall strictly abide the provisions of the laws and regulations
regarding its operation activities, shall strictly carry out all business
operations according to the business license or the legally approved
business scope, and shall timely complete the annual registration renewal
procedure;
(8)
The Client guarantees the inexistence of any situation or event that may
cause unfavorable impact to the ability of the Client executing the
Agreement.
8.
Promised Items The Client makes the following
promises:
(1)
The Client shall strictly observe and execute all the obligations
stipulated under this Agreement;
(2)
The Client shall timely repay the principle and interests of the financed
fund and pay the corresponding fees. The Client shall process, receive,
and abide all the approvals, authorizations, registrations, and licensing
required by the applicable laws and shall maintain their effectiveness,
allowing the Client to legally sign and fulfill the obligations stipulated
under this Agreement and any other documents associated with this
Agreement. In case of request from the Financing Bank, the Client shall
promptly provide the related proof;
(3)
Within five working days of learning of its possible involvement in an
economic, civil, criminal, administrative litigation procedures or similar
arbitration proceedings that may lead to unfavorable impact or within five
working days of learning of its major assets are involved in
any compulsory execution, seizure, detainment, freezing, lien, or
supervisory control, the Client shall notify the financing bank in writing
detailing the impact and the remedial measures taken or plan to be
taken;
(4)
Without a written approval from the Financing Bank, repayment of large
amount of debts to a third party other than the Financing Bank or
fulfillment of any guarantee liability is prohibited
(5)
Without a written approval from the Financing Bank, occurrence of any
other large amount of debts or existing debts or setting or providing any
form of collateral with first priority nature to any other debts for
itself or any third party is prohibited. Starting from the signing date of
this Agreement to the full repayment of all the debts under this
Agreement, without a written approval from the Financing Bank, the Client
shall not
a.
undergo liquidation, reconstruction, bankruptcy, being buy-out, merger,
separation, restructuring, dissolution, shutdown, suspension of business,
or similar legal procedures;
b.
other than the need for the daily operation, undergo sale, lease,
donation, transfer or any other types of method of disposition of any of
its major assets;
c.
undergo any change in the structuring of shares;
d.
undergo signing of Contract/Agreement that may have major unfavorable
impact to fulfill the obligations stipulated under this Agreement or bear
any obligations that may have the same impact.
(6)
Where specific circumstances or specific changes have occurred to the
collateral listed under this Agreement, the Client shall timely provides
other collateral approved by the Financing Bank in accordance with the
requirements of the financing bank. The specific circumstances or specific
changes shall include but not limited to the suspension of production,
termination of business, dissolution, temporary suspension of operation,
revoke or suspension of business license, applying for or being requested
for reconstruction, bankruptcy, major changes in operation or financial
situation, involvement in major legal proceeding or arbitration, and
involvement of legal representative, directors, supervisor, and chief
managerial personnel in legal proceeding of the guarantor, devaluation,
possible devaluation, or seizure of the mortgage property, actions of
breach of contract under guarantee contract, and request for termination
of guarantee contract;
(7)
With the request from the Financing Bank, the Client shall also undergo
notarization of effective compulsory execution at a notarization office
appointed by the financing bank. The Client shall bear the costs and shall
voluntarily accept the compulsory
execution;
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(8)
The Client shall notify the Financing Bank at any time for any event that
may impact the ability of Client to fulfill its obligations stipulated
under this Agreement or any documents associated with this
Agreement.
9.
Fees and Expenses As for the Financing Bank regarding the costs
of modification, signing, compulsory execution, notarization, and
registration of any documents associated with this Agreement, upon request
from the Financing Bank, the Client shall immediately compensate the
Financing Bank. Unless the laws clearly stipulate that the taxed items are
borne by the Financing Bank, the Client shall be responsible to bear any
stamp tax duty and other taxations.
10.
Penalty Interest For any overdue payment by the Client, a daily
penalty interest with the unpaid money (including unpaid interests) as
basis shall be charged against the Client starting from the due date until
the date of actual payment. The penalty interest (including penalty
interest for embezzlement, if present) shall be settled monthly and shall
be compounded monthly.
11.
Authorization of Repayment and Counterbalance The Client hereby
authorizes the Financing Bank to represent the Client using money
(irrespective the types of currency) in any accounts opened in the
Financing Bank to directly compensate the debts when any due debt is
unpaid, irrespective whether the debt belongs to the debts under this
Agreement. This authorization is irrevocable. In case that currency
conversion is involved, the Financing Bank may undergo conversion in
accordance with the exchange rate determined by the Financing Bank. The
Client shall bear the risk of exchange rate.
12.
Proof of Debts The Financing Bank shall maintain a set of
accounting notes and vouchers related to the business activities
concerning this Agreement on its accounting books in accordance to its
general operational guidelines. Other than the obvious errors, the Client
shall accept that the relevant records of the accounting notes and
vouchers shall be the valid proof of the debts of the Client.
13.
Transfer The Client shall not transfer any rights or
obligations stipulated under this Agreement. The Financing Bank may
transfer the rights or obligations stipulated under this Agreement to any
third party at any time and may disclose any information related to this
Agreement to a third party, including any information of the Client and
the guarantor of the Client provided to the Financing Bank for the purpose
of this Agreement.
14.
Disclosure of Information The Client agrees that: other than
the disclosure permitted under Article 13, any information related to this
Agreement, the Financing Bank may disclose the information to its head
office, branch institutions, associated institutions, and the employees of
these institutions. Moreover, disclosures made according to the
requirements of any laws, regulations, and rules and requests from
supervision departments, governmental authorities, or juridical
institutions belong to the situations, where disclosures are
permissive.
15.
Breach of Contract Any actions, such as violation of any
declaration or guarantee of this Agreement by the Client or the
declarations and guarantees are ambiguous, untruthful, missing,
misleading, or already been violated violation, and/or violation or
failure of execution of any promised items of this Agreement by the Client
and/or violation of any provision of this Agreement by the Client, and/or
occurrence of any incidence that may impact the safety of the loan of the
Financing Bank, and/or violation of the provisions of the guarantee
documents by the guarantor, shall constitute breach of contract by the
Client regarding this Agreement. The financing bank shall have the right
declaring that the loan is prematurely due and requesting that the Client
to compensate all the losses incurred on the financing bank, including
attorney fees.
16.
Special Term for Group Client Where the client of this
Agreement is a group client, the Client hereby agrees that: (1) The Client
shall timely report any associated transactions over 10% of the net assets
of the actual fiduciary, including: a. the relationships among all parties
of the transaction; b. the items and nature of the transaction; c. the
amount or the corresponding ratio of the transaction; d. pricing policy
(including non-monetary or token transactions); (2) In case that the
actual fiduciary has one of the followings, the Client shall be deemed
breach of contract, and the Financing Bank shall have the right to
unilaterally cancel the remaining unused credit with recovery of part or
all of the used credits or request the Client to pay up to 100% of
security deposit: a. providing false materials or concealing important
operation and financial facts; b. arbitrarily altering the purpose of use
of credit without approval from the Financing Bank; embezzling the credit
or using the bank credit to undergo unlawful and illegal transactions; c.
using a fake contract with receivable notes and account receivables that
have no actual trade context with an associated party to discount for cash
or pledge from bank; d. refusing to accept supervision and inspection from
the Financing Bank regarding the state of utilization of credit and the
related operation and financial activities; e. occurrence of major merger,
buy-out, and restructuring deemed by the Financing Bank as possible threat
to the safety of credit; f. intentional evasion of bank creditor’s rights
through associated
transactions.
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17.
Other Agreed Terms: Within the effective
period of this Agreement, in case that the People’s Bank of China makes an
adjustment on the prime interest rate, the interest rate of the loan under
this Agreement shall be adjusted monthly, starting from the following
month of the day of adjustment of the prime interest
rate
18.
Applicable Laws and Judicial Jurisdiction The laws of the
People’s Republic of China (excluding Hong Kong and Macau Special
Administrative Regions and Taiwan) shall be applicable for this Agreement
and shall be interpreted by the laws. All disputes in connection with this
Agreement of the execution thereof shall be governed by the local People’s
Court of the Financing Bank, which possesses non-exclusive judicial
jurisdiction.
19.
Place of Delivery for Litigation The Client confirms that the
delivery of the legal documents, such as subpoena and notices, issued
during the process of any legal proceedings that may have occurred
regarding this Agreement shall be deemed delivered upon delivery to the
address listed at the beginning of this Agreement. In case that the
Financing Bank is not notified in advance for any change of the
aforementioned address, the change shall be ineffective to the Financing
Bank.
20.
Severability of Articles In case that certain article or part
of an article of this Agreement is deemed invalid, illegal, or
unenforceable, the invalid article or the invalid part shall not impact
the effectiveness, legality, and enforceability of other articles of this
Agreement.
21.
Within the effective period of this Agreement, the moratorium or delayed
action granted by the Financing Bank to the Client for any breach of
contract or other actions shall harm, impact, or restrict all the rights,
interests, and benefits enjoyed by the Financing Bank as a creditor in
accordance with the laws and the provisions of this Agreement and shall
not be deemed as approval from the Financing Bank regarding the act of
breach of contract by the Client. Furthermore, it shall not be deemed as
forfeit of right undergoing legal action against the Client regarding the
present or future act of breach of contract.
22.
Consistency with the Financing Limit Agreement In case that a
discrepancy exists between the Financing Limit Agreement (if any, it shall
include the effective changes made at times) and this Agreement, the
provisions of this Agreement shall prevail.
23.
Signing This Agreement is made out in four original copies,
with the Client holding one copy and the financing bank holding three
copies, which shall come into force upon signing and affix of seal by the
legal representative/responsible person or authorized representative of
both parties and starting on the day of application.
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Signing
Column
Both
parties confirm that, upon signing of this Agreement, both parties have
undergone detailed explanation regarding all the provisions and that both
parties have no objection regarding all the terms stipulated under this
Agreement. Moreover, the legal meaning of the provisions related to the
rights and obligations of all parties are accurately and fully
understood.
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Client
(Official Seal):
Legal
Representative (Signature or Seal)
or
Authorized Representative
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Financing
Bank (Official Seal):
Responsible
Person (Signature or Seal)
or
Authorized Representative
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