Exhibit 10.24

LOAN CONTRACT

 

 

 

 

 

 

Shenzhen development bank

 

April 2010

 

 

 

 

LOAN CONTRACT

 

Contract No. Shenfa Yinlian Daizhi 20110429217

 

Within agreed amount

Agreed amount loan contract name: comprehensive agreed credit loan contract

Agreed amount loan contract Shenfa Yinlian Daizi No.: 20110216001

 

Lender: Dalian branch of Shenzhen development bank

Address: 5 Youhao Square, Zhongshan District, Dalian

Tel. No.: 0411-82580729   Fax:

Person in charge: Yuan Baigang   Position:  Branch Manager

 

Borrower: Dalian TOFA New Material Development Co.,LTD.

Address: Lingan industry Park south, economic and tech development district,
Dalian

Tel. No.: 82789758   Fax:

Legal representative: Zheng Chuantao  Position:

 

According to relevant law and after reaching agreement, borrower and lender sign
this loan contract and both parties should abide all items in this contract.

 

Item one: Loan contract content

 

1.   Loan amount: RMB seven and a half million yuan

2.   Loan term: 1-year

Calculation method of loan term: the loan term of this contract should start
when borrower actually obtain the principal. And loan granting date and due date
is basis on the receipt date.

3.   Loan interest:

3.1 Loan interest is set, according to the rules as follows; and initial loan
interest is the same with loan receipt record: When borrower obtains the loan
and the interest rate should be one-year benchmark interest rate for loan on
that date +10%.

3.2   Adjustments for this floating interest rate: this floating rate should be
adjusted in every month, according to loan issuing date and if there is no loan
issuing date, it should be adjusted at the end every month.

3.3   Day interest rate calculation: day interest rate=interest rate of the
year/360.

4.   Loan usage: this loan is used for working capital.

 

Item two: Loan granting and loan repayment

 

1   Borrower can request for loan upon the execution, registration and
notarization of this Agreement.

2. Payments:

2.1 Full amount entrusted payment: Lender shall wire to the designed party
according to Borrower’s loan withdrawal application.

 

2.2 Payment Management:

2.2.1 Borrower has right to request Lender to wire the loan proceeds if:

2.2.1.1 Borrower has submitted required business transaction agreement loan
withdrawal application with wiring party, wiring amount and other related
information according to Lender’s demand;

2.2.1.2 The loan withdrawal will be used in accordance with the loan agreement;
and

2.2.1.3 Borrower authorized Lender to make the payment to designed wiring party.

 

Lender has the right to review if the information of wiring party, payment
amount, etc. is consistent with the business transaction agreement and the
Lender shall have right to refuse any loan withdrawal application that is not in
compliance of this Agreement.

 

2.2.2 Not applicable.

 

2.2.3 Borrower cannot use the loan proceeds in investments of fixed assets and
equities, or any business and operation areas not permitted by the State.

 

2.3 Payment changes and conditions

Lender has right to adjust the total entrusted payment amount if any of the
following happens:

2.3.1 Not applicable

2.3.2 Borrower defaulted under this Agreement and avoided Lender’s entrustment
payment supervision;

2.3.3 Borrower’s credit reduced and the main business operation became weaken;
and

2.3.4 There was abnormal situation happened to the loan proceeds.

 

Item three: Account Management and Financial Standards:

 

1. The parties agree that Borrower shall open the following bank account with
Lender subject to Lender’s supervision:

1.1 Account Name: Dalian TOFA New Material Development Co., Ltd.; Account #:
11005811050001

1.2 The above account will be used as the loan withdrawal and repayment purpose.

2. Not applicable.

 

Item four: Loan interest

 

1.   Borrower, according to actual loan granting date, should pay interest every
moth and interest payment date is on every 20th of every month. Borrower should
deposit interest payment in its account, before interest payment date or lender
has right to ask for extra interest payment, according to compound interest
calculation and unpaid interest.

 

 

 

 

Item five: Installment

None.

 

Item six: Adopted law and dispute solution

 

This contract is set, according to PRC laws, and it is applicable for PRC laws.
If any dispute happens during contract period, both parties can negotiate and
try to reach agreement; if two parties can not reach agreement, litigation
should take place in lender’s residential place.

 

Item seven: Enforceable notary, this contract does not need enforceable notary.

 

Item eight: Additional agreement - if Borrower makes a pre-repayment, the fee
for such prerepayment is 1%. (fee = remaining loan months x total pre-repayment
x fee rate). This loan shall be used in raw material purchase; Borrower shall
make a monthly payment of 50% of total due amount in two month prior to the due
date of installment payment.

 

None

Item nine: This contract is in duplicate, both of parties hold one copy and both
copies have the same legal force.

 

Item ten: Settlement of floating interest rate

 

For the floating interest rate, interest rate is adjusted after adjustment date
and lender charges interest, according to the new floating interest rate;
however, for amortizing loan, no matter same amount amortizing loan or
acceleration amortizing loan, even though interest rate is adjusted during the
period, lender still charges interest according to former interest rate. And
lender will charge interest with new floating interest rate in next period.

 

Item eleven: Loan repayment

 

1.   Borrower should repay all the principle and interest on time. If borrower
can not repay all the principle and interest by the end of due day, borrower
must send written application to lender one month advanced and discuss with
lender regarding the loan detail further.

2.   If borrower decides to repay all the principle and interest early, borrower
also need to send application to lender to reach agreement.

3.   Borrower can not cancel lender right which is lender can take out all due
amount or advanced principle and interest from the Shenzhen development bank
account.

 

Item twelve: Borrower’s rights

 

 

 

 

1.   Borrower has right to take out and use full amount of loan as contracted;

2.   Borrower has right to refuse any additional item which is not include in
the contract;

3.   After receiving written consent from lender, borrower has right to transfer
this loan to third party.

 

Item thirteen: Borrower’s obligations

1.   Borrower has obligation to supply true materials as required by lender, and
all bank account number and bank account balance with lender; and borrower must
coordinate with lender about investigation, auditing and inspection;

2.   Borrower has obligation to give monthly financial reports and registry
situation timely to lender;

3.   Borrower has obligation to be supervised to lender about loan usage,
relative operation and financial activities and to coordinate with lender about
loan repayment management, after-loan management and relative inspection;

4.   Borrower has obligation to use bank loan as required in the contract;

5.   Borrower has obligation to repay the full amount of the loan principle and
interest;

6.   If borrower wants to transfer loan to third party, no matter partly or
wholly, borrower has obligation to acquire written consent from lender advanced;

7.   If borrower wants to process significant property right alternation,
structure transforming, consolidation, segregation of the entity, equity
transfer, significant asset transfer, substantively increasing debt financing,
investment to other parties and any deed could effect lender’s rights and
interests; borrower must acquire written consent from lender and ensure to repay
the remaining principle, interest and relative fee;

8.   Borrower has obligation to notify lender timely, if any thing happens to
effect borrower’s solvency ability.

 

Item fourteen: Granting credits to group clients and special agreement of
related parties trading

 

1.   Group clients must possess following features:

1.1   From the aspect of equity or operation, client control other entities or
is controlled by other entities, no matter directly or indirectly;

1.2   Both of client and other entities are controlled by third party entity;

1.3   Group client is, directly or indirectly, together controlled by main
investors and key managers or their close family members( including linear
relatives within three generation and collateral relatives within two generation
);

1.4   There is other affiliate relationship through which the assets profits are
might be transferred beyond market price; the commercial bank considers that the
enterprise or public institution with legal person status shall be deemed as a
group client under credit management.

2.   If borrower becomes a group client, when the trading value with relative
parties is over ten percents of net asset, borrower should send a written report
to lender within ten days from day of trading with relative parties; and this
written should include the relationships between trading parties, what the
trading projects are, the nature of the trading, trading amount or relative
proportion and pricing policy (including trading without trading price or with
small trading price).

 

Item fifteen: Lender’s rights

 

1.   Lender has right to ask borrower supply materials which is relative with
application for bank loan;

2.   Lender has right to require borrower repay principle and interest timely;

 

 

 

 

3.   Lender has right to acknowledge borrower’s operation, financial activities,
repayment plan and also has right to after-loan management and relative
inspection;

4.   Lender has right to supervise the usage of loan as being contracted, and do
loan repayment management; for borrower who apply auto-payment method, lender
also has right to ask borrower to supply summary of loan payment regularly, and
lender can judge whether the usage of loan is strictly followed the contract by
analyzing accounts, checking receipts, on-site investigation and other methods;

5.   Lender has right to indirectly transfer loan principle and interest from
borrower’s account;

6.   If borrower does not follow the items contracted, lender has right to ask
borrower to repay loan earlier or stop granting loan which is not fully used by
borrower;

7.   Lender has right to ask borrower repay bank loan earlier, according to the
situation of withdrawing of funds from circulation;

8.   If borrower is processing significant property right alternation, structure
transforming, consolidation, segregation of the entity, equity transfer,
significant asset transfer, substantively increasing debt financing, investment
to other parties and any deed could effect lender’s rights and interests, lender
has right to ask borrower repay the loan principle, interest and all relative
fees, or lender has right to ask borrower to transfer this loan to another party
approved by lender, or lender has right to ask borrower to supply approved party
with guarantee;

9.   Lender has right to transfer loan-related rights and obligations to third
party, and borrower must agree with this deed;

10.   If borrower is involving significant financing, sales of important assets,
consolidation, segregation, equity structure reforming, liquidation or any vital
issue, lender has right to take part in the issues mentioned above to protect
lender’s creditor’s right.

 

Item sixteen: Lender’s obligations

 

1.   Lender has obligation to grant credit to borrower as contracted;

2.   Lender has obligation to make borrower’s financials, producing and
operation confidential, only except being required by laws, rules or other
supervisory institutes.

 

Item seventeen: Fee items

 

1.   To sign this contact, some fees, which could be incurred, due to
investigation on capital and credit of borrower, inspection, notary, witness,
registration and so on, should be responsible by borrower;

2.   If borrower can not repay principle and interest on time, lender has to do
loan on calls which could also incur some fees ,including post fee, service fee,
identification fee, legal expenses, litigation fee, travel expenses, appraising
fee, auction fee, property preservation fee, enforcement fee and so on, should
be paid by borrower.

 

Item eighteen: Borrower should set up accounts for settlement in our bank, and
do operation activity settlement through this account.

 

Item nineteen: breaching affairs and breaching responsibility

 

1.   Breaching affairs: any following affair happens; this affair is regarded as
breaching affair.

 

 

 

 

1.1   Borrower breaches any obligation as contracted, or borrower clearly state
that he will not follow this contract or his deed indicates his breaching;

1.2   Any related material, document, statement, warranty or commitment is
unreal, inaccurate, incomplete, false record, misunderstanding statement or
significant omitting;

1.3   Borrower covers true situation, does not cooperate with lender to do
investigation, auditing or inspection;

1.4   Borrower change the usage of loan as contracted, misappropriation or
taking part in illegal  or irregular trading;

1.5   Borrower breaches the agreement of repayments;

1.6   Borrower does not reach the requirement of financial ratios as contracted;

1.7   Borrower does not follow the rule issued by government to use the foreign
currency loan;

1.8   Keeping or the value of collateral changes a lot;

1.9   Borrower does not follow contracts or similar contracts which is singed
with lender or third party(including but not limiting granting credit contract,
loan contract and guarantee contract), or issuing any security with bond nature,
or any lawsuit or arbitration incurred from contracts or issuing securities
mentioned above;

1.10 Borrower’s warrantor breaches warranty contract(including but not limiting
contract of guarantee, mortgage contract, pledge contract) or incurring
breaching affair under warranty contract, or invalid warranty, ineffective
warranty or canceled warranty happens;

1.11 Borrower does not take enough care to manage or claim due debt rights, or
borrower transfer wealth in unrecoverable, unreasonable or any other
inappropriate way or any deed of escaping from debt right happens;

1.12 Borrower deals with any third party(including but not limiting lender’s
related party) to take use of untrue contract or arrangement, including but not
limiting using not existing trading receivables to discount or pledge and to
further acquire lender’s or other banks’ capital or granting credit;

1.13 Borrower escapes from debt right of bank with intention, in the way of
related party trading or other ways;

1.14 Borrower encounters significant operation problem, huge worsening financial
situation, vital financial losses, asset losses(including but not limiting
losses causing by warranty for other parties) or financial crisis in other
forms;

1.15 Borrower is punished or in sanctions, due to illegal operation, or is being
investigated by related department and is possible to be punished or in
sanctions;

1.16 Borrower is involving segregation, consolidation, merger and acquisition,
disposal of significant assets, reducing capital, liquidation, restructuring,
repealing, being announced to go bankruptcy, being disbanded or others;

1.17 Borrower changes its majority stockholder or management controlling person,
and lender deems this issue can possibly affect debt rights; or important issue
happens to majority stockholder, management controlling person, legal
representative person, high management level; this issue include but not limits
punishment or sanction caused by illegal operation or persons mentioned above is
possible to be punished, in sanctions, to incur lawsuit or arbitration, to
worsen financial situation, to announce to be bankruptcy or disbanded or others;

1.18 Industry of borrower changes, which may cause losses to borrower, lender
deems this change has already hampered debt rights or it is possible to be
negative to debt rights;

1.19 Borrower does not do balancing or saving as contracted;

1.20 Any situation, which is relevant to borrower, can make or may make debt
rights unsecure;

2.   breaching responsibilities: if any breaching affairs mentioned above
happens, lender has right to adopt any or together adopt several measures:

 

 

 

 

2.1 Lender can state loan is due, and claim part or whole amount of principle,
interests and related fees, including but not limiting, related investigation
fee of capital and credit, inspection fee, notary fee and so on, legal expenses,
litigation fee, travel expenses, post fee, service fee, enforceable fee and all
other relevant fees which are used to help lender realize its debt rights;

2.2 Ceasing or terminating residual loan;

2.3 Having rights to deduct principle, interests and fees from borrower’s and
guarantor’s accounts;

2.4 Requiring borrower offer new warranty contract which can meet lender’s
requirements;

2.5 Taking use of warranty rights and requiring guarantor to fulfill its
responsibilities or securing lender’s debt rights through disposal of collateral
or pledge;

2.6 Loan is due or due before schedule, and borrower does not repay principle
and interests as contracted, lender has right to charge 50% additional
punishment interest on principle, according to the dates after due and lender
also uses compound interest calculation to obtain the punishment interest: if
days after loan due day is no more than 90 days, the payment sequence of loan is
:(1) interests (including punishment interest, compound interest); (2)
principle. If days after loan due day is more than 90days, the payment sequence
of loan is :(1) principle;(2) interests (including punishment interest, compound
interest);

2.7 Borrower who misappropriates loan, lender has right to charge borrower
additional 100% punishment interest according to the misappropriation date, days
and contracted loan’s interest. If borrower can not pay interest timely, lender
will use compound interest to calculate punishment interest;

2.8 According to laws, lender can use subrogation to claim loan from borrower’s
debtor, borrower should, according to lender’s requirements, supply all
necessary coordination and help; and all fees incurred from subrogation are
afforded by borrower;

2.9 Appealing to law court to cancel borrower’s due debt rights or any deed of
transferring  ownership without payment or unreasonable low transferring price;
borrower should, according to lender’s requirements, coordinate and help lender,
and all related fees should be paid by borrower;

2.10 Lender, according to laws and rules, has right to claim other recoverable
measures;

 

Item twenty: Being amended and being canceled of contract

 

After negotiation between borrower and lender, this contract can be amended and
canceled, and new agreement should be in the written form.

 

Item twenty-one: borrower’s statement, guarantee and commitment

1.   Borrower is a perspective lasting company with good reputation; it was set
up, following laws. It has all company rights and approval from government and
it can engage in its current operation;

2.   Borrower has its legal rights, legal authority and it also has power to
authorize to sign, pay and carry out this contract. This contract is effective
to borrower and it can also restrict borrower. And according to this contract’s
items, this contract can be executive to borrower;

3.   Borrower guarantee that all supplied materials are true, complete, legal
and effective, and they are without fake record, misleading statements or
significant omitting;

4.   Borrower made commitment with honor that it will fulfill all contract’s
obligations with kindness, and without consent from lender, borrower will not do
anything(including not fulfilling its obligations or doing something that it
should not do) to destroy debt rights;

5.   Borrower made commitment with honor that if any change happens to borrower,
such as changes of residential address, changes of contact address, changes of
contact number, changes of operation scope and legal representative status and
so on, borrower will send written report to lender within ten days after
alteration. If borrower does not fulfill obligations mentioned above, lender can
also send documents to original contact address, and this deed is regarded as
successful service;

 

 

 

 

6.   Borrower confirms with honor that borrower has already read this contract
with care, has already been acknowledge and fully understood this contract; and
signing this contract is following its real and true will.

 

Item twenty-two: Others

 

1.   During the period of this contract, when borrower does breaching and
delaying deed, lender has rights to reserve its rights to do any forgiveness,
losing this contract or delaying execute this contract; and these deeds, as
mentioned above, can not be regarded as lender’s approval, they are not regarded
as waiving its rights to borrower;

2.   No matter what happens to make this contract fully or partly valid,
borrower still has obligations to do its payment duties. If any party of this
contract encounters situation as mentioned above, lender can immediately claim
residual principle, interests and all other related fees;

3.   It is required that all borrower’s and lender’s contract-related notice,
requirements should be in written form.

4.   If the contract date is public holiday or contract date is in the period of
public holiday, the settlement day is the fist day after public holiday.

 

Item twenty-two: Conditions can make loan contract valid and terminated.

 

1.   Conditions can make loan contract valid: this contract is valid after
signed by both parties(it should have person’s signature or seal, who is legal
and in charge, and it also need seal of both parties’);

2.   Conditions can make loan contract terminated: Borrower repaid all
principle, interests and all related fees.

 

 

 

Lender’s seal:

 

Person-in-charge‘s or authorized person’s signature: /s/ Yuan Baigang

 

April 29, 2011

 

 

Borrower’s seal:

 

Legal representative status’s or authorized person’s signature: /s/ Zheng
Chuantao

 

April 29, 2011

 

 

 

 

Appendix

 

Loan Withdrawal and Payment Application

 

Shenzhen Development Bank Dalian Branch:

 

Based on the Yilian Daizi No. 20110429217 Loan Contract, the undersigned
requests the payment of the loan withdrawal and please make an irreversible
wiring of the following amount to the following designed party:

 

Wiring Party   Account #   Currency   Payment Amount
(RMB)   Dalian Huaxiu Industry and Commerce Co., Ltd.   11000609817901   rmb  
7,500,000                                  

 

The undersigned has submitted the required business transaction contracts and
related documents as the supporting proofs to this Application and guaranty the
provided information is true legitimate and valid.

 

Applicant: Chuantao Zheng

 

[Corporate Seal]

 

April 29, 2011