RMB Facility Loan Contract
EXHIBIT
10.19
RMB
Facility Loan Contract
Contract
No: Shanjiankaidai (2008)020
Type
of Loan: Short-term Industrial Current Capital Loan
Borrower
(Party A): Shaanxi Tianren Organic Food Co. Ltd.
Address: X-0/X
Xxxxxxxxx Xxxxxxx Xxxxxxxx, Xx.00, Xxxxxx 2nd Rd,
High-tech
Zone, Xi’an, China 710075
Legal
Representative (Chief Officer): Xue Hongke
Fax: 00-000-00000000
Tel: 00-000-00000000
Lender
(Party B): Hi-tech Industrial Development Zone,
Xi’an
Branch of China Constuction Bank
Address:
No.42 Gaoxin Road,Xi’an 710075
Chief
Officer: Zhou Cunxing
Fax: 00-000-00000000 Tel:
00-000-00000000
Whereas
Party A applies to Party B for, and Party B agrees to provide Party A with, a
loan facility (the “Facility”). Pursuant to relevant laws and regulations and
through consultation, Party A and Party B enter into this Contract:
Article
1. Amount of the Facility
The
amount of the Facility shall be RMB four
million
(in words) (the “Maximum Amount”).
Article
2. Use of Loan
The Loan
is only allowed for buying raw materials
unless given written consent from Party B.
Article
3. Availability Period
1.
The Availability Period of the Facility shall commence from April 21 2008 and end
on Dec.7
2008(the “Availability Period”). Party A’s obligation to repay its
indebtedness in respect to any individual Loan provided within the Availability
Period shall not be affected by the expiration of Availability Period even if
the maturity date for such individual Loan comes after the Availability Period
expires.
2.
Upon the expiration of the Availability Period, the Facility not drawn shall
become invalid automatically.
3.
The term of each individual Loan means the period commencing from the date of
the drawing of such individual Loan and ending on the maturity date of such Loan
as provided for under this Contract.
Article
4. Drawing of the Facility
1.
During the Availability Period and within the Maximum Amount of the Facility,
Party A can apply for Loans subject always to the formalities which shall be
completed by both parties. The amount, interest rate, term and purpose of each
individual Loan shall be determined according to the Notice of Drawing issued by
Party B to Party A.
2.
If any security provider has performed its obligations in accordance with any
security contract, the Facility shall decrease by the amount of principals which
has been repaid by such security provider.
3.
Drawing Schedule
Time:
Xxxxx 00, 0000
Xxxxxx: XXX
4,000,000.00
Article
5. Interest Rate, Calculation and Payment of Interests and Fees
1. The
annual interest rate applicable to each individual Loan shall be fixed at 7.47%.
2.
Penalty Interest Rate
3.
The annual interest rate shall be adjusted up to 100% if Party A does not
perform according to the agreement, and the interest shall be calculated and
paid in accordance with relevant regulations of the People’s Bank of China. The
annual interest rate shall be adjusted to 50% for the overdue loan.
4.
Interest Settlement
The
interest rate shall be calculated and paid according to the fixed interest rate,
and the 20th day of each month shall be the date for the settlement of
interest.
Article
6. Disbursement of the Loan
1.
Subject to a waiver by Party B, Party B is not obliged to make any
disbursement to Party A unless the following conditions precedent have been
satisfied:
2.
Party A has obtained and/or completed all approval, registration, delivery
and other necessary formalities relating to the Loan in accordance with relevant
laws and regulations; and
3.
The security documents acceptable to Party B have become effective and
remain in full effect; and
4.
No Event of Default specified in this Contract has occurred; and The Application for Drawing has
been verified and approved by Party B.
Article
7. Repayment
1.
Principle of Repayment
Any
repayment by Party A under this Contract shall be made in accordance with the
principle that the interests shall be paid before the repayment of any
principal.
2.
Interest Payment
Party A
shall pay to Party B the due interest on the Interest Payment Date. The first
interest payment shall be made on the first Interest Payment Date after the
Disbursement of the Loan. Upon the maturity date for the Loan, Party A shall pay
in full all the unpaid interest together with the principal.
3. Principal
Repayment
Party A
shall repay the principal in accordance with the Principal Repayment Schedule
set forth:
Repayment
Schedule:
Time:
December 7,
2008 Amount: RMB
4,000,000.00
4.
Method of Repayment
Party A
shall deposit into its account with Party B such funds as sufficient to repay
the amount due to Party B before each Repayment Date specified in this Contract,
and shall automatically transfer such funds to Party B for repayment; or Party A
shall transfer a sufficient amount from its other accounts to make such
repayment on the aforementioned Repayment Date. If Party A fails to repay any
indebtedness punctually, Party B has the right to directly debit for the
corresponding amount any account opened by Party A with any branch or office of
China Construction Bank.
5.
Prepayment
1) Party
A may prepay the interest with prior notice to Party B.
2) Party
A shall submit to Party B a written application [30] banking days in
advance of any prepayment. Party A may prepay all or any part of the principal
subject to Party B’s consent to such application.
In the
case of prepayment of the principal, the interest shall be calculated on the
basis of the actual number of days elapsed and at the interest rate set forth in
Article 4 of this Contract.
In the
case of prepayment of the principal, Party B is entitled to demand of Party A a
compensation fee calculated in accordance with the following
formula:
Compensation
Fee = Prepayment Amount × 1‰ × Number of Days of Prepayment
Where any
individual Loan shall be repaid in installments and Party A prepays part of the
principal, such prepayment shall be effected in a reverse order of the Repayment
Schedule. The interest on the outstanding indebtedness after such prepayment
shall still be calculated at the interest rate as specified in this
Contract.
Article
8. Rights and Obligations of Party A
1.
Party A has the right to require Party B to keep in confidence relevant
financial information and trade secrets relating to production and operation of
Party A unless otherwise provided by laws and regulations.
2.
Party A shall provide relevant financial information and information
relating to production and operation as required by Party B and shall be
responsible for the authenticity, integrity and validity of such
information.
3.
Party A undertakes that all settlements and deposits relating to the Loan
shall be conducted through its accounts opened with Party B or Party B’s
relevant branch.
4.
Party A shall assist in and accept Party B’s inspection and supervision of
its production, operation, financial activities and utilization of the
Loan.
5.
Party A shall utilize the Loan for the purpose as provided for
hereunder.
6.
Party A shall punctually repay the principal and interest in accordance
with this Contract.
7.
Party A or its investors shall not transfer any funds or assets in order
to evade the indebtedness owed to Party B.
8.
Party A shall give Party B a prior written notice for Party B’s consent if
Party A intends to provide security for any third party during the term of this
Contract and such security may affect Party A’s ability to make repayment under
this Contract.
9.
Party A shall promptly arrange for new security(ies) satisfactory to Party
B where the Guarantor in respect of this Contract ceases or suspends production;
its corporate registration is canceled, business license revoked; it is bankrupt
or dissolved; it is operating at a loss; or any other negative change has
occurred, and such aforementioned incidents result in loss or partial loss of
the Guarantor’s ability to secure the Loan, or where the mortgaged or pledged
property(ies) for securing the Loan depreciate(s) or is (are) damaged or
destroyed.
10.
Party A shall promptly inform Party B of any relevant changes during the
term of this Contract, including without limitation its business name, legal
representative (or chief officer), registered office, business purpose or
registered capital.
11.
Where Party A intends to carry out activity(ies) during the term of this
Contract which may have an impact on the realization of Party B’s rights
hereunder, Party A shall give Party B a [ 30 ] banking days prior written notice
for its consent to such intended activity(ies) and shall further take sufficient
measures to safeguard the repayment of the indebtedness under this Contract and
arrange for security in accordance with Party B’s instructions. The
aforementioned activities shall include without limitation contracting, leasing,
transformation to a stock company, forming an economic association with another
enterprise, consolidation, merger, division, setting up a joint venture,
application for suspension of production or for winding up or for
bankruptcy
12.
Party A shall promptly inform Party B in writing, take sufficient measures
to safeguard the repayment of the indebtedness under this Contract and arrange
for security(ies) in accordance with Party B’s instructions if there has
occurred to Party A incident(s) during the term of this Contract that may have
substantially negative effects on Party B’s performance of its obligations
hereunder. The aforementioned incidents shall include without limitation the
following: Party A ceases or suspends production; its corporate registration is
canceled, or business license revoked; its legal representative or high-ranking
officers are involved in illegal activities; it is involved in litigation with a
major impact; great difficulties arise in respect of its production or
operation; or its financial standing deteriorates.
13.
Party A shall bear all fees and expenses in connection with this Contract
and the security(ies) for this Contract including without limitation fees and
expenses in respect to legal services, insurance, evaluation, registration,
storage, authentication and notarization.
Article
9. Rights and Obligations of Party B
1．Party B
is entitled to have access to information about the production, operation, and
financial activities of Party A, and to require Party A to provide financial
information and documents in respect to its production and
operation.
2．If the
credit rating of Party A declines, Party B is entitled to adjust or even cancel
the Facility which is otherwise available.
3．Party B
is entitled to debit any account opened by Party A with any branch or office of
China Construction Bank for any amount due to Party B under this
Contract.
4．Party B
shall disburse the Loan to Party A in accordance with this Contract, except for
any delay caused by Party A.
5．Party B
shall keep in confidence financial information and trade secrets in relation to
production and operation of Party A unless otherwise required by laws or
regulations.
Article
10. Liabilities for Default
1.
Event of Default
Events of
Default by Party A
(I) Party
A fails to provide true, complete and valid financial information or information
relating to its production and operation or other relevant documents as required
by Party B.
(II)
Party A fails to utilize the Loan for the purpose agreed by the
Parties.
(III)
Party A fails to repay punctually the principal and/or interest.
(IV)
Party A refuses Party B’s demand for supervision and/or inspection over the
utilization of the Loan or hinders Party B from doing so.
(V) Party
A transfers or misappropriates funds or assets in order to evade the
indebtedness.
(VI)
Party A’s operational and financial conditions deteriorate and as a result it is
unable to repay its indebtedness upon maturity; or it is involved or likely to
be immediately involved in litigation or arbitration with a major impact or
other legal disputes, and any of the aforementioned incidents in Party B’s
judgment may or has
affect(ed)
or impair(ed) Party B’s rights and interests hereunder.
(VII) Any
other indebtedness owed by Party A has affected or may affect its performance of
the obligations to Party B hereunder.
(VIII)
Party A fails to repay any other indebtedness due to China Construction Bank
upon maturity.
(IX)
Party A carries out activity(ies) during the term of this Contract which may
change its operational or managerial modes or equity structure and which in
Party B’s sole judgment may affect or has affected the rights and interests of
Party B hereunder. The aforementioned activities shall include without
limitation contracting, leasing, transformation to a stock company, forming an
economic association with another enterprise, consolidation, merger, division,
or setting up a joint venture.
(X) Other
events that Party B believes will affect the realization of its rights under
this Contract.
(XI)
Party A fails to perform or comply with any of its other obligations
hereunder.
Any of
the following events in relation to the Guarantor for this Contract shall be
deemed as an event of default by Party A unless Party A provides new security in
favor of, and satisfactory to, Party B:
(I)
During the term of this Contract, there occurs to the Guarantor such incident(s)
as may affect its ability to act as a joint and several liability guarantor.
Such incidents shall include without limitation contracting, leasing,
consolidation, merger, setting up a joint venture, division, forming an economic
association with another enterprise, transformation to a stock company,
bankruptcy and dissolution.
(II) The
Guarantor provides beyond its capacity any security for any third
party.
(III) The
Guarantor loses or may lose its capability to act as a guarantor.
(IV)
Other event of default by the Guarantor as provided for in the guarantee
contract.
Any of
the following events in relation to the Mortgagor for this Contract shall be
deemed as an event of default of Party A unless Party A provides new security in
favor of, and satisfactory to, Party B:
(I) The
Mortgager fails to effect or maintain insurance for the mortgaged property, or
fails to dispose of insurance proceeds in accordance with the mortgage contract
upon occurrence of any insured event.
(II) The
Mortgager fails to dispose of proceeds of compensation in accordance with the
mortgage contract where the mortgaged property is damaged or destroyed or its
value decreases as a result of the act of any third party.
(III) The
Mortgager transfers, leases, re-mortgages or disposes of by any other means the
mortgaged property without Party B’s written consent.
(IV) The
Mortgager fails to handle the proceeds of the disposal of the mortgaged property
in accordance with the mortgage contract although such disposal is effected with
Party B’s consent.
(V) The
Mortgager fails to restore the value of the mortgaged property promptly, or
fails to provide other security acceptable to Party B, where the mortgaged
property is damaged, destroyed or decreases in value, which may affect the
repayment of the indebtedness hereunder.
(VI)
Other events of default by the Mortgager provided for in the mortgage
contract.
Any of
the following events in relation to the Xxxxxxx for this Contract shall be
deemed as an event of default by Party A unless Party A provides new security in
favor of, and satisfactory to, Party B:
(I) The
Xxxxxxx fails to effect or maintain insurance for the pledged property, or fails
to dispose of insurance proceeds in accordance with the pledge contract upon
occurrence of any insured event.
(II) The
Xxxxxxx fails to dispose of the proceeds of compensation in accordance with the
pledge contract, where the pledged property is damaged or destroyed or its value
decreases as a result of the act of any third party.
(III) The
Xxxxxxx fails to handle the proceeds of disposal of the pledged property in
accordance with the pledge contract although such disposal is effected with the
consent of Party B.
(IV) The
Xxxxxxx fails to restore the value of the pledged property promptly, or fails to
provide other security acceptable to Party B, where the pledged property is
damaged, destroyed or decreases in value, which may have an impact on the
repayment of the indebtedness hereunder.
(V) Other
events of default by the Xxxxxxx provided for in the pledge
contract.
Any of
the following shall constitute an Event of Default by Party A unless Party A
provides new security as required by Party B: the security documents or other
securities do not take effect, or are void or rescinded, or the security
provider totally or partially loses its capacity to secure the indebtedness or
refuses to perform its obligations.
2.
Remedies
If any
Event of Default in item (1) to (5) above occurs, Party B is entitled to enforce
its rights hereunder by taking one or more of the following
measures:
(1) Party
B is entitled to adjust, cancel or suspend the Facility or to adjust the
Availability Period.
(2) Party
B is entitled to cease Disbursement of the Loan, to accelerate forthwith the
Loan, and to require Party A to repay forthwith all principal, interest and
fees.
(3) Party
B is entitled to liquidated damages of [ 10 ]‰ of the outstanding
principal.
(4) Where
Party A fails to repay the Loan upon maturity, Party A shall pay interest and
compound interest on the principal, and interest which is not punctually repaid
(including all or part of the principal and interest which are accelerated by
Party B) at the overdue interest rate stipulated by the People’s Bank of China
and in accordance with the interest payment provisions set out in this
Contract.
(5) In
the event that Party A fails to utilize the Loan for the purpose set forth in
this Contract, Party A shall pay default interest on the misappropriated part of
the Loan in accordance with relevant regulations of the People’s Bank of
China.
(6) Party
B is entitled to debit any account in any currency opened by Party A with any
branch or office of China Construction Bank for any amount payable by Party A
under this Contract.
(7) Party
B is entitled to enforce its security rights.
(8) Party
B is entitled to require Party A to provide new security(ies) satisfactory to
Party B.
(9) Party
B is entitled to terminate this Contract.
Article
11. Amendment to this Contract
Upon
taking effect of this Contract, any Party intending to amend this Contract shall
notify the other Party promptly and a written agreement shall be executed if the
Parties so agree, unless otherwise provided in this Contract or in any other
agreement.
Article
12. Miscellaneous
1
______________________________
2
______________________________
3
______________________________
4
______________________________
Article
13. Dispute Resolution
Any
dispute arising out of or in connection with this Contract shall be settled
through friendly consultation. If no agreement is reached through such friendly
consultation, such dispute shall be settled in accordance with _____ of the
following:
1.
Instituting legal proceedings with the People’s Court in the location of
Party B.
2.
Submitting the disputes to the [ ]
for arbitration (the venue for such
arbitration shall be __________), which
shall be conducted in accordance with the arbitration rules in effect as of the
date of submission. The arbitration award shall be final and binding on both
Parties.
3.
The Parties shall perform this Contract in accordance with the undisputed
parts during the course of such legal proceedings or arbitration.
Article
14. Effectiveness
This
Contract shall take effect upon the execution by the legal representative (chief
officer) or authorized representative of Party A and by the chief officer or
authorized representative of Party B with the company seals of both Parties
affixed.
Article
15. This Contract Shall be Made in [5] Counterparts
All
documents created within the Availability Period and within the Maximum Amount
of the Facility which underlie the debtor-creditor relationship between the
Parties (including but not limited to Application for Drawing, Notice of
Drawing or other certificates and documents) are integral parts of this
Contract.
Article
16. Representations
1.
Party A is fully informed and aware of the business purposes and powers of
Party B.
2.
Party A has read all the terms of this Contract and Party B has given
explanation as required by Party A. Party A hereby acknowledges that it fully
understands all terms of this Contract and the corresponding legal consequences
thereof.
3.
Party A has the right and power to execute this Contract.
Party A:
Shaanxi Tianren
Organic Food Co. Ltd.
Legal
Representative (or Chief Officer) or Authorized Representative
(Signature): /s/: Xue
Hongke
Date:
04/21/2008
Party B:
Hi-tech Industrial Development Zone, Xi’an branch of China Constuction
Bank
Chief
Officer or Authorized Representative (Signature): /s/: Zhou
Cunxing
Date:
04/21/2008
