RMB CURRENCY LOAN CONTRACT China Construction Bank Henan Branch
EXHIBIT
10.2
China
Construction Bank
Henan
Branch
Borrower
(hereinafter to as Party A): Luoshan Jinding Chemical Co.,
Ltd
Lender
(hereinafter to as Party B): Xinyang Branch of China Construction
Bank
Party
A
hereby applies loan from Party B and Party B agrees to issue the loan. Party
A
and Party B hereby agree to enter into this Contract for the observance and
performance of the parties in accordance with relevant laws and
regulations.
ARTICLE
1 SUM OF THE LOAN
Party
A
borrows from Party B RMB
SIX MILLIOM EXACTLY..
ARTICLE
2 PURPOSE OF THIS LOAN
This
loan
will be used by Party A fornormal
working capital turnover.
ARTICLE
3 TERM OF THIS LOAN
The
term
of this loan is 12
months
from
January
1st, 2006
to
January
1st, 2007.
Where
the
starting date of the loan under this contract is different from that recorded
on
the transference certificate of loan, the date recorded on the transference
certificate of loan of the first issuance of loan shall prevail. The
transference certificate of loan constitutes part of this Contract and has
the
equal binding effect as this Contract.
ARTICLE
4 INTEREST RATE, DEFAULT INTEREST RATE, CACULATION OF INTEREST AND SETTLEMENT
OF
INTEREST
| 1. |
Interest
Rate
|
The
interest rate of the loan under this Contract is monthly rate and the rate
is
calculated in the way as is provided in (a) as follows:
| (a) |
Fixed
rate. The rate will be fixed at 5.115 ‰ during the loan
term;
|
| (b) |
Floating
rate. The rate is ___ (raised/reduced)
by
every ___ month(s)
from the standard interest rate from the date of value. The rate
adjustment day shall be the corresponding day of the date of value
in the
adjustment month. Where there’s no corresponding day of the date of value
in the month, the last day of the month shall be the rate adjustment
day.
|
| 2. |
Default
interest rate
|
| (a) |
The
default interest rate is monthly
rate.
|
| (b) |
Where
Party A fails to use the loan within the purpose scope of this Contract,
the first default interest rate as follows shall be
applied:
|
| (i) |
Fixed
rate at 10.23%.
|
| (ii) |
Floating
rate. The rate is raised by every ___ month(s)
from the standard interest rate from the date of value. The default
interest rate adjustment day shall be the corresponding day of the
date of
value in the adjustment month. Where there’s no corresponding day of the
date of value in the month, the last day of the month shall be the
default
interest rate adjustment day.
|
| (c) |
The
overdue default interest rate of the loan under this Contract shall
be
that of (i) as follows:
|
| (i) |
Fixed
rate at
10.23 ‰ ;
|
| (ii) |
Floating
rate. The rate is raised every ___ month(s)
from the standard interest rate from the date of value. The default
interest rate adjustment day shall be the corresponding day of the
date of
value in the adjustment month. Where there’s no corresponding day of the
date of value in the month, the last day of the month shall be the
default
interest rate adjustment day.
|
| 3. |
The
day date of value under this article is the day when the fist loan
issued
under this Contract is transferred to Party A’s
account.
|
The
standard interest rate at the time when the first loan is issued under this
Contract shall be the loaning interest rate of the same grade promulgated and
executed by People’s Bank of China on the date of value. The standard interest
rate henceforth shall be the loading interest promulgated and executed by
People’s Bank of China on the day when loaning interest rate of the same grade
or default interest rate is adjusted as is prescribed above. Where People’s Bank
of China stops promulgate the loaning interest rate of the same grade, the
standard rate shall be the loaning interest rate of the same grade commonly
accepted in the bank industry or the usual loaning interest rate of the same
grade on the adjustment day, unless the two parties have different agreement
on
it.
| 4. |
The
loaning interest is calculated from the day when the loan is transferred
to Party A’s account. The interest of loans under this contract is
calculated according to days. Daily interest=monthly interest/30=yearly
interest/360. Where Party A fails to pay interest timely, compound
interest is calculated from the second day.
|
| 5. |
Settlement
of Interest
|
| (a) |
Where
the loan applies fixed rate, the interest is calculated at the agreed
rate. Where the loan applies floating rate, the interest is calculated
at
the rate as defined at each floating period. Where there are several
rate
changes in an individual interest settlement period, the interest
rate of
the interest settlement period is calculated with the interest of
each
floating period calculated first and interests of each floating period
added together on the settling day.
|
| (b) |
The
interest of loans under this Contract is settled monthly and the
settling
day is the 20th day of each month.
|
ARTICLE
5 THE ISSUANCE AND USE OF THE LOAN
| 1. |
The
Preconditions for Loan Issuance
|
| (a) |
Only
when the following conditions are met will Party B have the obligation
to
issue the loan unless it waives all or part of the
conditions:
|
| (i) |
Party
A has finished ratification, registration, delivery and other legal
procedures in accordance with the provisions of laws and
regulationså
|
| (ii) |
Where
there’s assurance for this Contract, the assurance contract or other
assurances that meet the requirement of Party B has been in
effectå
|
| (iii) |
Party
A hasn’t constituted any of the breaches as agreed in this
Contract;
|
| (iv) |
Other
conditions agreed by the parties on the issuance of
loan.
|
| (b) |
Party
B shall issue the loan within ten working days of bank after Party
A has
satisfied all the above conditions.
|
2.
Loan
Use
Plan
(a)
Jan.
5th,
2006,
Sum:
RMB
6,000,000 ;
(b) _____
(date),
Sum: ____________;
(c) _____
(date),
Sum: ____________;
(d) _____
(date),
Sum: ____________;
(e) _____
(date),
Sum: ____________;
(f) _____
(date),
Sum: ____________.
ARTICLE
6 REPAYMENT
| 1. |
Principles
of Repayment
|
The
repayment of Party A under this Contract shall be maid in accordance with the
following principles:
| (a) |
Where
the principal hasn’t been repaid over 90 days since the due date, the
interest hasn’t been paid over 90 days since the due date, or where the
loan hasn’t expired or the repayment of principal or interest hasn’t
exceeded 90 days since the due date while Party A has stopped its
production and operation or that the project related to the loan
stopped,
or other loans as prescribed in laws or regulations, the repayment
shall
be made with principal prior to
interest;
|
| (b) |
As
for loans not included in (a), the interest shall be paid before
principal
and paid off with principal.
|
| 2. |
Payment
of Interest
|
Party
A
shall pay to Party B the due interest on interest settling days. The first
day
of interest payment shall be the first interest settling day after the issuance
of the loan. The interest shall be paid off at the last repayment.
| 3. |
Principal
Repayment Plan
|
Party
A
shall repay the principal in the following plan:
(a)Jan.
5th,
2007,
Sum:
RMB
6,000,000 ;
(b)
______ (date),
Sum: ___________;
(c)
______
(date),
Sum: ___________;
(d)
______
(date),
Sum: ___________;
(e)
______
(date),
Sum: ___________;
(f)
______
(date),
Sum: ___________.
| 4. |
Method
for Repayment
|
Party
A
shall get the due money ready in Party B’s account before the repayment days as
agreed in this Contract and transfer it for repayment or transfer money from
other accounts for repayment on the repayment day as agreed in this Contract.
Where Party A fails to repay timely, Party B is entitled to transfer the money
from Party B’s account in China Construction Bank.
| 5. |
Advance
Repayment
|
| (a) |
Party
A shall notify Party B when it pays interest in
advance.
|
| (b) |
Party
A shall submit to Party B an application in written form thirty working
days earlier before it repays the principal in advance and can only
repay
all or part of the principal at Party B’s consent.
|
The
interest shall be calculated according to the actual days that Party A uses
the
loan and the loaning interest rate as prescribed in Article 4 of this Contract
when Party A repays principal in advance.
Party
A
agrees to pay compensation to Party B when it repays the principal in advance.
Sum of compensation=the amount of principal repaid in advance×the
number of months between the actual repayment day and the due repayment
day×1.5‰.
It
shall be calculated as one month where the period between the actual repayment
day and the due repayment day is less than a month.
Where
Party A makes the repayment gradually, it shall repay in the converse order
of
the repayment plan if it repays part of the principal in advance. The loaning
interest rate agreed in this Contract shall apply to the remaining loan after
the advance repayment.
ARTICLE
7 ASSURANCE FOR THE LOAN
Where
there’s
assurance for the loan, it shall be the first or second method as
follows:
| 1. |
Guaranty;
|
| 2. |
Mortgage;
|
| 3. |
Pledge;
|
| 4. |
Stand-by
letter of credit;
|
| 5. |
Credit
Insurance.
|
| 6. |
Others:
_______________________________.
|
ARTICLE
8 RIGHTS AND OBLIGATIONS OF PARTY A
| 1. |
Rights
of Party A
|
| (a) |
Require
Party B to issue the loan as agreed in this
Contract;
|
| (b) |
Use
the loan within the purpose as is agreed in this
Contract;
|
| (c) |
Apply
to Party B for the extension of the loan as in accordance to the
conditions prescribed by Party B;
|
| (d) |
Require
Party B to keep confidential the financial information and business
secrets in production and operation provided by Party A unless otherwise
prescribed in laws and regulations.
|
| 2. |
Obligations
of Party A
|
| (a) |
Provide
financial and fiscal information as well as information on production
and
operation at Party B’s requirement, including but not limited to
submitting to Party B the balance sheet of the last quarter and the
income
statement to the end of the last quarter (income and expenditure
statement
for public service unit) within ten working days of bank of the first
month of each quarter and submitting the statement of cash flow of
the
year at the end of the year. Party A shall be responsible for the
trueness, integrity and effectiveness of the information it
submits;
|
| (b) |
Use
the loan within the purpose agreed in this Contract and shall not
use it
for any other purposes;
|
| (c) |
Cooperate
and accept actively and voluntarily the investigation and supervision
of
Party B on its production and operation, finance and its use of the
loan
under this Contract;
|
| (d) |
Repay
the principal and interest of the loan timely in accordance to this
Contract;
|
| (e) |
Party
A and its investors shall not withdraw their capital distribution
or
transfer their capitals to avoid its debt to Party B.
|
| (f) |
Before
paying off the principal and interest to Party B, it shall not provide
assurance to third party with the capital formed from the loan under
this
Contract without Party B’s consent.
|
| (g) |
During
the term of this Contract, where Party A intends to provide assurance
to
other people’s debt and where the assurance affects its repayment capacity
under this Contract, it shall notify Party B in writing in advance
and
acquire Party B’s consent.
|
| (h) |
Where
production stop, business suspension, registration cancellation,
bankruptcy or operation loss happens to the guarantor under this
contract
or where it is recalled which makes it loses fully or partly its
corresponding assuring capability of this loan, or the value of mortgages,
impawned properties decreases or they are destroyed or lost accidentally,
Party A shall provide timely to Party B other assurances that it
recognizes.
|
| (i) |
During
the term of this Contract, where the name, legal representative,
domicile,
business scope, registered capital changes of Party A changes, Party
A
shall notify Party B timely.
|
| (j) |
During
the term of this Contract, where there are situations of
contractingôlease,
shareholding reform, joint business, combination, annexation, division,
joint venture, operation suspension for rectification application,
bankruptcy application that would affect the realization of Party
A’s
creditor’s right happen to Party A, Party A shall notify Party B 60 days
in advance and fulfill the repayment of loan and assurance under
this
Contract with Party B’s consent and at its requirement.
|
| (k) |
During
the term of this Contract, where there are situations of production
stop,
business suspension, registration cancellation, business license
cancellation, the legal representative or person in charge’s involvement
in law breaching activities or major litigation, or where there is
serious
difficulty in production and operation or the serious financial
degradation that have important negative effect on Party A’s performance
of the repayment obligation, Party A shall notify Party B immediately
and
fulfill the repayment of loan and assurance under this Contract at
Party
B’s requirement.
|
| (l) |
Pay
the expenses like lawyer service, insurance, assessment, registration,
safekeeping fee, appraisal, notarization relevant to this Contract
and the
assurance under which.
|
ARTICLE
9 RIGHTS AND OBLIGATIONS OF PARTY B
| 1. |
Rights
of Party B
|
| (a) |
Know
the production and operation as well as finance situation of Party
A and
require Party A to provide relevant documentation like plans and
financial
accounting reports;
|
| (b) |
Transfer
money in any currency that Party A has on its account in China
Construction Bank for any payment that Party A shall make to Party
B
arising from this Contract.
|
| 2. |
Obligations
of Party B
|
| (a) |
Issue
loan in due amount on due day as are agreed in this Contract, unless
the
delay is caused by Party A;
|
| (b) |
Keep
confidential the financial information and business secrets in production
and operation provided by Party A unless otherwise prescribed in
laws and
regulations.
|
ARTICLE
10 LIABILITIES FOR BREACH
| 1. |
Breaches
|
| (a) |
Breaches
of Party A
|
| (i) |
It
fails to submit true, integrated and effective information on finance,
production and operation and other relevant
information;
|
| (ii) |
It
fails to use the loan in the purpose as is agreed in this
Contract;
|
| (iii) |
It
fails to repay the principal and interest of this loan on due
day;
|
| (iv) |
It
refuses or impedes Party B’s investigation and supervision on its use of
loan;
|
| (v) |
It
transfers its asset and takes out capital to avoid the
obligation;
|
| (vi) |
The
degradation of its business and finance makes it unable to render
performance that is due or it is involved in major litigation or
arbitration or other legal conflicts that Party B considers as may
affect
or impair or have affected or impaired its rights and interests under
this
Contract;
|
| (vii) |
Any
other obligations that it has have affected or may affect its performance
of obligation to Party B under this
Contract;
|
| (viii) |
It
fails to render other performance that is due to China Construction
Bank;
|
| (ix) |
During
the term of this Contract, there are business method changing or
business
mechanism changing conducts like contracting, lease, combination,
annexation, joint venture, division, joint business, shareholding
reform
that Party B considers as may affect or impair or have affected or
impaired its rights and interests under this
Contract;
|
| (x) |
Other
situations that Party B considers would affect the realization of
it’s
creditor’s right.
|
| (xi) |
It
breaks other obligations as agreed in this
Contract.
|
| (b) |
Party
A shall be deemed breaching the contract where it fails to provide
new
assurances to Party B that meet its requirement when the following
events
happen to the guarantor:
|
| (i) |
Contracting,
lease, combination, annexation, joint venture, division, joint business,
shareholding reform, bankruptcy or cancellation of the guarantor
that
would affect its joint assuring
liability.
|
| (ii) |
The
guarantor provides to third party assurance that is beyond its
affordability;
|
| (iii) |
The
guarantor loses or may lose its capability of
assurance;
|
| (iv) |
Other
breaches of the guarantor as are agreed in the assurance
contract.
|
| (c) |
Party
A shall be deemed breaching the contract where it fails to provide
new
assurances to Party B that meet its requirement when the following
events
happen to the Mortgagee:
|
| (i) |
The
Mortgagee fails to insure the pawn as required by Party B or it fails
to
dispose the proceeds from insurance as agreed in the mortgage
contract;
|
| (ii) |
The
Mortgagee fails to dispose damages paid by a third party for the
damage,
disappearance or value reduce it causes to the
Mortgage;
|
| (iii) |
The
Mortgagee disposes the Mortgage through donation, transference, lease,
multiple mortgage or other methods without Party B’s written
consent;
|
| (iv) |
The
Mortgagee disposes the Mortgage with Party B’s consent while it fails to
dispose the money from Mortgage disposal in accordance with the mortgage
contract.
|
| (v) |
The
Mortgagee fails to resume the value of the Mortgage or provide other
assurance that is recognized by Party B when the damage, disappearance
or
value reduce of the Mortgage affects the performance of obligation
under
this Contract;
|
| (vi) |
Other
breaches of the Mortgagee as are agreed in the mortgage
contract.
|
| (d) |
Party
A shall be deemed breaching the contract where it fails to provide
new
assurances to Party B that meet its requirement when the following
events
happen to the pledgor:
|
| (i) |
The
pledgor fails to insure the pawn as required by Party B or it fails
to
dispose the proceeds from insurance as agreed in the pledge
contract
|
| (ii) |
The
pledgor fails to dispose damages paid by a third party for the damage,
disappearance or value reduce it causes to the pledged
property;
|
| (iii) |
The
pledgor disposes the pledged property with Party B’s consent while it
fails to dispose the money from pledged property disposal in accordance
with the pledge contract.
|
| (iv) |
The
pledgor fails to resume the value of the pledged property or provide
other
assurance that is recognized by Party B when the damage, disappearance
or
value reduce of the pledged property affects the performance of obligation
under this Contract;
|
| (v) |
Other
breaches of the pledgor as are agreed in the pledge
contract.
|
| (e) |
Party
A shall be deemed breaching the contract where Party A fails to provide
new assurances required by Party B when the assurance contract or
other
assurances hasn’t comes into effect or are revoked, or that the assuror
loses all or part of its assuring capability or rejects to perform
the
assurance obligation.
|
| 2. |
Remedies
for Breaches
|
Party
B
is entitled to exert one or several right(s) as follows where the above breaches
from (a) to (e) happen:
| (a) |
Terminate
issuing the loan, declare the loan expires at the time and require
Party A
to repay all the principal, interest and expenses of the loan whether
due
or not.
|
| (b) |
Claim
liquidated damages from Party A at the rate of 0.21‰
of
the principal each day.
|
| (c) |
Where
Party A fails to use the loan in the purpose as agreed in this Contract,
claim interest and compound interest at the default interest rate
and
other interest settlement method agreed in this Contract from the
day when
Party A fails to use the loan in the agreed purpose to the day when
both
principal and interest are paid off for the amount of the loan that
Party
A uses for other purpose other than the agreed purpose.
|
| (d) |
Before
the loan expires, claim compound interest at the loaning rate and
interest
settlement method agreed in Article 4 for the interest that Party
A fails
to pay off timely.
|
| (e) |
After
the overdue of the loan, claim interest and compound interest at
the
default interest rate and other interest settlement method agreed
in this
Contract from the day the loan is overdue to the day when both principal
and interest are paid off for the principal and interest of the loan
that
Party A fails to pay off (including the principal and interest of
the loan
that is declared by Party B as wholly or partly pre-expires). The
overdue
of the loan means that Party A fails to make full repayment timely
or that
the number of times it repays the loan after the due date of the
gradual
repayment plan agreed in this
Contract.
|
| (f) |
Transfer
money in any currency from Party A’s account in China Construction
Bank.
|
| (g) |
Require
Party A to provide new assurances that meet the requirement of Party
B of
debts under this Contract.
|
| (h) |
Exert
the right to realizing assurance.
|
| (i) |
Terminate
this Contract.
|
ARTICLE
11 OTHER AGREEMENTS
1.
_______________________________________;
2.
_______________________________________;
3.
_______________________________________;
4._______________________________________.
ARTICLE
12 SETTLEMENT OF DISPUTE
All
the
disputes arising during the performance of this Contract shall be solved through
negotiation and where negotiation fails to solve, the following first method
shall be applied:
| 1. |
Bring
lawsuit to the people’s
court at Party B’s domicile.
|
| 2. |
Submit
the dispute to __________________ (Name
of Arbitral Organization) for arbitration which shall be conducted
in __________ (Place
of Arbitration) in
accordance with the rules then in effect of the arbitration commission.
The award resulting from such arbitration shall be final and binding
on
the parties.
|
The
provisions that are not involved in dispute shall still be performed during
litigation or arbitration.
ARTICLE
13 COMING INTO EFFECT OF THE CONTRACT
This
Contract comes in to effect on the legal representative (person in charge)
or
the authorized attorney of Party A and the person in charge or the authorized
attorney of Party B sign and stamp the official seal on the contract.
ARTICLE
14
The
Contract is in quintuplicate.
ARTICLE
15 RECITALS
| 1. |
Party
A knows clearly the business scope and the scope of authority of
Party
B.
|
| 2. |
Party
A has read all the provisions of this Article and Party B has made
corresponding explanation to provisions at Party A’s requirement. Party A
has fully known and understood the meanings and corresponding legal
effects of the provisions of this
Contract.
|
| 3. |
Party
A has the right to sign this
Contract.
|
Party
A
(official seal): Luoshan
Jinding Chemical Co., Ltd
Legal
representative (person in charge) or authorized attorney (signature):
Party
B
(official seal): Xinyang
Branch of China Construction Bank
Legal
representative (person in charge) or authorized attorney
(signature):
On
January 5th,
2006
Contract
No.: Year 2006 No. 001
Type
of
Loan: Floating capital for industrial enterprise
The
Borrower (Party A): Luoshan Jinding Chemical Co., Ltd.
Address:
Xicheng Industrial Zone, Luoshan
Postcode:
464200
Legal
Representative: Zhou, Dianchang
FAX:▇▇▇▇▇▇▇
/s/
Zhou ▇▇▇▇ ▇▇▇▇▇
The
Lender (Party B): Xinyang Branch of China Construction Bank
Address:
ChangAn Road, Xinyang
Postcode:
464000
Person
in
Charge: Zong, Su
TEL:
▇▇▇▇▇▇▇ FAX:
/s/
Xinyang Branch of China Construction
Bank