Exhibit 10.17
Working Capital Loan Contract

 
Contract No.: 2010, 58 Daizi, #008   

Borrower (Party A): SkyPeople Juice Group Co., Ltd.
 
Legal Representative/authorized person (Chief Officer): Xue Hongke

Lender (Party B): China Merchants Bank, Xi’an Kejidu Branch
 
Authorized Representative: Li Xiaojun
 
Party A applies for a working capital loan to Party B due to the demand to
settle its working capital turnover.
 
Party B consents to grant the loan to Party A. Hereby, the two Parties agree and
enter into this Contract under related laws and regulations after sufficient
negotiation.
 
Article 1. Currency and Loan Amount
 
RMB Twenty Six Million Yuan (in Capital form)
 
Article 2. Use of Loan
 
The nature of the loan is as a working capital loan and should be used only for
this purpose. Party A should not change the use of the loan without written
consent from Party B.
 
Article 3. Availability Period
 
The Availability Period of the Contract shall commence from September 9, 2010
and end on December 5, 2010 (the “Availability Period”) for 3 months. If the
granting date of the loan is not consistent with the above commencing date,
please refer to the date on receipt of the loan as the granting date and
postpone the repaying date correspondingly. For specific information, please
refer to the receipt.
 
Article 4. Prerequisites of Loan
 
In connection with granting of the loan under this contract (including each set
of loan), Party A should meet each premise below. Party B has the right to
refuse the grant of the loan if Party A does not satisfy a single condition of
the following：
 
4.1  
Party A provides the documents required by Party B according to this contract;

 
4.2  
Party A coordinates supervision and inspection with Party B as required by this
contract；

 

 
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4.3  
As to the granted loan, Party A performs its right of repaying the loan；

 
4.4  
No default event described in the contract has happened to Party B；

 
4.5  
Party A did not violate other actions agreed upon in this contract;

 
4.6  
The prerequisites of the loan are settled by Party B, who has the right to lower
the request level for prerequisites without receiving the consent of Party A.

 
Article 5. Interest Rate and Payment of Interests
 
5.1  
Interest Rate

 
5.1.1  
This loan adopts a fixed interest rate of 4.86% per year.

 
5.1.2  
If the loan is granted in the form of RMB, the interest rate will be based on
the benchmark interest rate for finance institutes of six months announced by
the People’s Bank of China on the pricing date.

 
5.1.3  
The pricing date means the date when the loan is determined effective or the
date referred to when determining the benchmark rate during the fluctuating
period. If the loan adopts a fixed interest rate, the pricing date is the date
the loan is granted; if the loan adopts a fluctuated interest rate, the price
date is determined as described in the article below.

 
5.1.4  
If the fluctuating rate of the loan is adopted, set [Blank] days as a
fluctuating period. The benchmark rate during each fluctuating period is
determined in reference to article 5.1.4 above.

 
5.1.5  
If Party A changes the use of the loan, they will be charged an additional 100%
interest on the changed portion of the loan based on the original rate since the
date when the use of the loan changed.

 
5.1.6  
If Party A does not return the loan in a timely manner, as to the un-repayable
portion of the loan, Party A will be charged an additional 50% interest based on
the original interest rate since the due date.

 
5.1.7  
If provisions on the interest rate are adjusted by PBC, then conduct as adjusted
provisions.

 
5.2 Interest Settlement
 
The interest rate shall be calculated according to the fixed interest rate and
paid from the date when the loan entered into Party A’s bank account, and the
20th day of each month shall be the date for the settlement of interest.
 
5.3 Payment of Interest
 
Party A should pay interest on each interest settlement date. Party B should
deduct the interest from Party A’s bank account. If Party B is unable to pay
interest in a timely manner, Party B will have the rights to charge additional
interest on the unpayable part based on the interest rate of that period.

 
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Article 6. Warranties
 
The loan under this Contract is warranted by the standby letters of credit
No.229LG1000001, par value $3.95 million under the name of Pacific Industry
Holding Group Co., Ltd. (Parent company of SkyPeople Juice Group Co., Ltd.)
 
If the warrant is unable to sign the documents of warranty and settle upon the
procedure, Party A has the right to refuse grant of the loan to Party A.
 
Article 7. Rights and Obligations of Party A
 
7.1 Party A has the right to require Party B to keep in confidence relevant
financial information and trade secrets relating to the production and operation
of Party A unless otherwise provided by laws and regulations.
 
7.2 Party A shall provide relevant financial information and the information
relating to production and operation as required by Party B and shall be
responsible for the authenticity, integrity and validity of such information.
 
7.3 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.
7.4 Party A shall assist in and accept Party B’s inspection and supervision of
its production, operation, financial activities and the utilization of the loan.
7.5 Party A shall utilize the loan for the purpose as provided for hereunder.
 
7.6 Party A shall punctually repay the principal and interest in accordance with
this Contract.
 
7.7 Party A or its investors shall not transfer any funds or assets in order to
evade the indebtedness owed to Party B.
 
7.8 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.
 
7.9 Party A shall promptly arrange for new security(ies) satisfactory to Party B
where the Guarantor in respect to this Contract ceases or suspends production;
its corporate registration is canceled or business license revoked; it is
bankrupt or dissolved; it is operating at a loss; or any other negative change
has occurred, and such aforesaid 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.
 
7.10 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.
 
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7.11 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
 
7.12 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;
 
7.13 High-ranking officers are involved in illegal activities; it is involved in
litigation with a major impact; great difficulties arise in respect to its
production or operation; or its financial standing deteriorates.
 
7.14 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 8. Rights and Obligations of Party B
 
8.1 Party B is entitled to：
 
8.1.1 ask for repayment of loan principal and interest from Party A, and;
 
8.1.2  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;
 
8.1.3 supervise the use of the loan agreed to in the Contract, and;
 
8.1.4 supervise the bank account of Party A opened with the bank of Party B and
authorize a third party do such supervision, and control the payment of the
agreed loan, and;
 
8.1.5 deduct  loan principal and interest and any related fees  from the account
of  Party A, and;
 
8.1.6 transfer creditor’s rights possessed by Party A or take other actions on
it, such as notifying Party A of the matter of transference by, including but
not limited to, fax, mail, delivery or announcement on public media and
collecting, and;
 
8.1.7 reject the release of the loan to Party A before receipt of the Commitment
Letter on Interest Repayment, which is submitted by buyer/seller in the business
of a buyer' credit in which seller repays interest  or  in the business of a
sellers credit in which buyer repays the interest, and;

 
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8.1.8 take back the loan in advance based on the status of the fund withdrawal
of Party A, and;
 
8.1.9 take actions agreed to in the Contract in case Party A does not fulfill
obligations in the Contract, and;
 
8.1.10 enjoy other rights under the Contract.
 
8.2 Party B is obliged to:
 
8.2.1 grant the loan to Party A according to the Contract, and;
 
8.2.2 keep in confidence the financial information and trade secrets in relation
to the production and operation of Party A unless otherwise required by laws or
regulations.
 
Article 9. Party A Particularly Warrants the Following Items:
 
9.1 Party A was organized and exists under the law of PRC，and is a separate
legal entity with the capacity for civil action to sign and fulfill the
Contract, and;
 
9.2 Party A should acquire full authority from the Board of the Directors or
other qualified institute to sign and execute this Contract, and this contract
forces a binding effect on Party A from the signed date, and;
 
9.3 The project under the loan and the matter of the loan credit should comply
with the applicable laws and regulations, Party A is not allowed to invest in
fixed assets and equity rights, or buy and sell securities, futures and real
property illegally, or inter-credit to seek for illegal income, or use in
production and operation prohibited by the nation, or apply to other purpose out
of the Contract, and;
 
9.4 In case of the automatic repayment of the loan made by the borrower, Party A
should report the payment to Party B regularly (at least quarterly). Party B is
entitled to ensure if the loan is made properly through account analysis,
voucher inspection and on-site investigation.
 
9.5 After agreement by Party B, if it is needed for Party A to pay via online
banking, Party A is obliged to accept restricted measures on, including but not
limited to, pre-set payee list, and limits for single and periodical  payment.
 
9.6 Information materials in connection with Party A, Warrantor, Pledger, and
mortgage provided by Party A should be true, complete and effective, without any
untruthful statements or omission of material facts.
 
9.7 There is and there will be no material pending proceeds, arbitration,
criminal and administrative penalty that will result in negative influence on
Party A or its main assets on signing the Contract as well as during the
executive period. If so, Party A should inform Party B immediately.
 
9.8 Party B should comply strictly with each law and regulation applied in this
Contract, and operate its business within the scope defined in the Business
License and inspect it annually.
 
9.9 Party A should maintain and improve its current business and management
level to ensure the value increase and value maintenance, and not give up any
due debt or dispose current assets with an obligation or through other improper
ways.

 
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9.10 There is nothing of importance that has happened to Party A that would
influence the execution of Party A’s obligation under this Contract.
 
Article 10. Withdrawal and Use of Funds
 
10.1 Party A should use the loan in the self-directed form. It means that Party
A deposits funds to the account of Party B according to the application of Party
B, which could then be transferred to any client of Party B autonomously under
the agreed use.
 
10.2 Party B should submit a withdrawal application form, IOU letter for
borrowing and other materials which are connected to self-directed payment or
payment made under trust and required to be submitted by Party A in case Party A
withdraws the loan funds, otherwise Party B has the rights to refuse withdrawal.
 
10.3 After Party B receives the above required documents and approved withdrawal
of loan, Party B will record the actual date, time limit and amount of each
grant on the IOU letter in detail.
 
Article 11. Pre-repayment
 
Party A could ask for repayment in advance if accepted by Party B
 
Party B could pre-repay the loan, however the interest could remain to be
calculated in the way set forth in the Contract.
 
Article 12. Extension of Loan
 
If Party A is unable to pay back the loan under the contract and needs to extend
it, Party A should apply to Party B one month early in advance written notice.
If the application is reviewed and approved, the two Parties will enter into
another new contract for extension. If the application is denied, this Contract
will remain effective. As to such case, Party A should pay back the loan and
interest payable, which has been used by Party A, in accordance with the
Contract.
 
Article 13. Management Fee
 
Where Party A shall pay to Party B a Management Fee of RMB zero Yuan in
accordance with this Contract, Party A has paid such Management Fee to Party B
within zero banking days after the execution of this Contract.
 
Article 14. Special Account for Loan
 
Business of loan withdrawal and deposit under this contract should be managed
through this account

 
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Account Information:
 
Account name: SkyPeople Juice Group Co., Ltd.
 
Account opening bank: China Merchant Bank Kejilu Branch in Xi’an
 
Article 15. Supervision on Fund Return
 
During the period after the Contract goes into effect and before the loan is to
be paid off, the two Parties agree to appoint the following bank account of
Party A to collect fund returns:
 
Account name: SkyPeople Juice Group Co., Ltd.
 
Account opening bank: China Merchant Bank Kejilu Branch in Xi’an
 
Article 16. Liabilities for Default
 
Events of Default
 
16.1 Events of Default by Party A 
 
16.1.1 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.
 
16.1.2 Party A fails to utilize the loan for the purpose agreed upon by the
Parties.
 
16.1.3 Party A fails to repay punctually the principal and/or interest.
 
16.1.4 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.
 
16.1.5 Party A transfers or misappropriates funds or assets in order to evade
the indebtedness.
 
16.1.6 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.
 
16.1.7 Any other indebtedness owed by Party A has affected or may affect its
performance of the obligations to Party B hereunder.
 
16.1.8 Party A fails to repay any other indebtedness due to China Construction
Bank upon maturity.

 
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16.1.9 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, transforming to a stock company, forming an
economic association with another enterprise, consolidation, merger, division or
setting up a joint venture.
 
16.1.10 Other events which Party B believes will affect the realization of its
rights under this Contract.
 
16.1.11 Party A fails to perform or comply with any of its other obligations
hereunder.
 
16.2 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:
 
16.2.1 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.
 
16.2.2 The Guarantor provides beyond its capacity any security for any third
party.
 
16.2.3 The Guarantor loses or may lose its capability to act as a guarantor.
 
16.2.4 Other events of default by the Guarantor as provided for in the guarantee
contract.
 
16.3  Any of the following events in relation to the Mortgager 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:
 
16.3.1 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.
 
16.3.2 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.
 
16.3.3 The Mortgager transfers, leases, re-mortgages or disposes of by any other
means the mortgaged property without Party B’s written consent.
 
16.3.4 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.
 
16.3.5  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.

 
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16.3.6 Other events of default by the Mortgager provided for in the mortgage
contract.
 
16.4  Any of the following events in relation to the Pledger 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:
 
16.4.1 The Pledger 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.
 
16.4.2 The Pledger 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.
 
16.4.3 The Pledger 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.
 
16.4.4 The Pledger 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.
 
16.4.5 Other events of default by the Pledger provided for in the pledge
contract.
 
16.5 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.
 
Article 17. Remedies
 
If any Event of Default in item (16.1) to (16.5) above occurs, Party B is
entitled to enforce its rights hereunder by taking one or more of the following
measures:
 
17.1 Party B is entitled to adjust, cancel or suspend the Facility or to adjust
the Availability Period.
 
17.2 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.
 
17.3 Party B is entitled to liquidated damages of [10] ‰ of the outstanding
principal.
 
17.4 Where Party A fails to repay the loan upon maturity, Party A shall pay
interest and compound interest on the principal and interest which are 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.
 
17.5 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.

 
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17.6 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.
 
17.7 Party B is entitled to enforce its security rights.
 
17.8 Party B is entitled to require Party A to provide new security(ies)
satisfactory to Party B.
 
17.9 Party B is entitled to terminate this Contract.
 
17.10 Article 17. Amendment to this Contract
 
17.11 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 18. Miscellaneous
 
18.1 Party A declares that there is no violation of laws and regulations on
environment protection, energy-savings and ejection-decreasing, and environment
pollution reducing in the process of this contract-making, and also promises
that after the contract has been signed，Party A will strictly abide by relevant
laws and regulations on environment protection, energy-savings and
ejection-decreasing, and environment pollution reducing; or
 
18.2 If the aforesaid declaration is found to be false or promises have not been
kept, or certain energy consumption and environmental pollution risks happen to
Party A, Party B has the right to terminate the credit to Party A（including,
without limitation, refusal to grant loans， provide financing， issue a guarantee
or L/C or an acceptance bill of Bank), or to declare the debt obligation
(including, without limitation, to loans or financing, money advanced which
occurred or might occur) to expire in advance，or to take other remedies granted
by laws or contractually agreed upon; or
 
18.3 Both Parties agree to apply to the notarization institutions for
enforceable notarization over this Contract. If there is an overdue loan or any
other event of default by Party A or the Guarantor does not perform its
obligations, the Lender has the right to apply to the notarization agency, which
has notarized this Contract, for executive certificate. Together with the
notarial deed, the Lender could apply for execution to the PRC jurisdiction
court, and Party A should accept the enforceable execution.
 
Article 19. 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
Resolution（19.1）of the following:
 
 
19.1 Instituting legal proceedings with the People’s Court in the location of
Party B.

 
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19.2 Submitting the disputes to Arbitration Commission (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.
 
19.3 The Parties shall perform this Contract in accordance with the undisputed
parts during the course of such legal proceedings or arbitration.
 
19.4 Article 14. Effectiveness
 
19.5 This Contract shall take effect upon 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 20. Effectiveness
 
The Contract will be effective as of the signing day with the company seals of
both Parties affixed and will cease to be in force automatically on the date
that all the loan principal and interest is paid off.
 
Article 21. Collateral Clause
 
The Contract is written in triplicate, copies of which are kept by both Parties
as well as the Loan Granting Centre of Party A. All the copies share equal legal
effect. 
 
 
Party A: SkyPeople Juice Group Co., Ltd.
 
Legal Representative (or Chief Officer) or Authorized Representative
(Signature):
 
/s/: Xue Hongke
 
Date: 9/9/2010

 
 
 
Party B: China Merchants Bank, Xi’an Kejidu Branch
 
 
Chief Officer or Authorized Representative (Signature): /s/: Li Xiaojun
Date: 9/9/2010