Unassociated Document


    Maximum
Amount Loan With Pledge Contract

     

     

    No.:
2008001

    


     

    Borrower:
Fuqing Guanwei
Plastics Industry Co. Ltd.

    Lender:
Fuqing Rural Credit
Cooperative Bank

    Mortgagor:
Fuqing Guanwei
Plastics Industry Co. Ltd.

     

    This
contract is entered ande excuted upon friendly negotiaion among all parties and
is in compliance with provisions of Guarantee Law of PRC.

     

     

    Article
1

     

     

    From January 21, 2008 to
January 20, 2011, within maxmium amount of loan RMB 9,700,000,
creditor shall release loans by divided payment to debtor upon debtor’s
requirement. Within this time period and within the limitation of amount, each
divided issuance of loan is not required to be equipped with separate pledge
contract. The last divided issuance of loan shall not be later than January 20, 2011. The
type of loan, usage of loan, principal of loan, interest charges and repayment
requirements shall be in compliance with loan notes of each divided issuance of
loan. The interest charges date is 20th day of
last month each quarter. In the circumstance of pre-payment of loan, the
interest rate will be the same as in this contract and the creditor is entitled
to collect interest charges accordingly. The due bill is regarded as part of
this contract and has the same legal binding effect as this
contract.

     

    Article 2 Mortgagor is
willingly to pledge its assets of which mortgagor is entitled the legal
ownership to secure the loan under this contract and the pledged goods list is
regarded as part of this contract

     

    (1) If
the debtor failed to make the repayment, creditor is entitled to appraisal,
auction or to liquidate the pledged assets and is entitled the priority of
dedcution from the assets realization

     

    (2) Total
value of the pledged goods is RMB 23,528,000, and
the actual value of pledged goods will be referred to the realization amount at
acution or liquidation of assets

     

    (3) The
scope of pledge is principal, interest, compounded interest, penalty charges,
breach of contract charges, damages compensation and the coverage of expenses
incurred including but not limited to overdue loan claim expenses, arbitration
fee, insurance fee, public notification fee, execution fee, attorney fee, travel
expenses and other expenses

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (4) The
legal force of the mortgaged right has been entitled to the subordinated
mortgaged properties and rights, supplementary materials, additonal materials,
natural and legal interests, subrogated mortgaged properties of  the
mortgages, the insured amount, compensation and penalty of the damage, loss or
requisition arised

     

     

    (5)
Mortgagor keeps the mortgaged properties and it shall keep them properly and
shall be responsible for maintaining and keeping them intact. Creditor is
entitled the custody of ownership registration/certificate of pledged
goods

     

     

    (6) The
pledged goods under this contract is not regarded part of bankruptcy or
liquidation processing and the residual amount of pledged goods can only apply
after the repayment of all debts with creditor

     

    Article
3 RIGHTS AND RESPONSIBILITIES OF DEBTOR

     

    (1)
Debtor is entitled to collect and to use the loan according to the terms under
this contract

     

    (2) To
repay the principal and interests

     

    (3)
Debtor shall only use the loan for the purpose as restricted in this contract
and shall not impropirately use the loan

     

    (4) To
provide to creditor true balance sheet, income statement and cash flow
monthly

     

    (5) To
accept creditor’s review and investigate of its operational and financial
status

     

    (6) To
send the written notice and to obtain approval if debtor is to provide guarantee
to any third party, and to ensure that the guarantee is not going to affect its
repayment capability

     

    (7)
Provide notice in advance once debtor’s domicile, registered captial, legal
representative or operation location changes

     

    (8)  Debtor shall send the
written notice to creditor at least 30 days prior to the occurrence of the
practices of contracting, leasing operations, joint operations, joint-stock
reconstruction, mergers & acquisition, joint-venture or cooperation. Debtor
is not allowed to conduct the above without creditor’s written
consent

     

    (9)
Debtor shall also notify creditor immediately in the circumstance of split-off
& subsidiaries establishment, the transfer of property ownership, capital
reduction, winding-up, dissolution and bankruptcy application etc. which will
affect debtor’s repayment capability materially. Debtor shall not only provide
written notice to creditor but also to provide the solvency plan

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (10)
Debtor and its investor also guarantees not to withdraw or transfer capital to
avoid the repayment performance

     

    (11)
Debtor agrees that all the payment, including principal and interests and
expenses, could be deducted from its account with creditor

     

    Article
4 STATEMENTS OF MORTGAGOR

     

    
      	
              (1)  

            	
              Mortgagor
      is entitled full ownership and dissolution rights on the pledged assets.
      In the circumstance that the pledged assets is leased, mortgagor shall
      provide the written notice to creditor. Creditor is entitled the first
      right on the pledged assets or mortgagor shall provide the written notice
      to creditor

            


    

     

    
      	
              (2)  

            	
              Mortgagor
      shall guard and to maintain the pledged assets in good condition during
      the pledge period

            


    

     

    
      	
              (3)  

            	
              Mortgagor
      shall obtain written approval from creditor if the pledged asset is to be
      leased or to be transferred. Mortgagor shall discharge the debt with
      creditor or to negotiate with creditor of deposit & withdraw terms for
      the consideration obtained from the lease or the
  transfer

            


    

     

    
      	
              (4)  

            	
              Mortgagor
      shall go through property insurance alteration procedure with creditor as
      first beneficiary or in case that the insurance of mortgaged properties
      provided by the insurance company and bought by mortgagor cannot be longer
      than the performance term of guaranteed creditor’s right, mortgagor shall
      extend the term of insurance correspondingly to guarantee the insurance
      continuity of the mortgaged properties during the valid
    term.

            


    

     

    
      	
              (5)  

            	
              In
      case of insurance accidents occurred to mortgaged properties, insurance
      compensation shall be used for paying the debts of main debtor under the
      main contract in advance or, if agreed by creditor, be used for the value
      restoration of such mortgaged properties or be deposited at the account
      designed by creditor to ensure the contract performance of those debts
      under the main contract.

            


    

     

    
      	
              (6)  

            	
              To
      accept the investigate and review of pledged assets by
      creditor

            


    

     

    
      	
              (7)  

            	
              The
      pledged assets shall be registered with governing agency and the
      registration approval/license shall be provide to creditor, creditor is
      entitled the custody of these registration
files

            


    

     

    
      	
              (8)  

            	
              The
      pledge responsibilities continues even in the circumstance of the
      invalidation of main loan contract

            


    

     

    
      	
              (9)  

            	
              In
      any usage purpose of loan by debtor, mortgagor agrees to perform its
      related responsibilities on debt under the main contract in
      full

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Article
5 RIGHTS AND RESPONSIBILITIES OF CREDITOR

     

    (1) To
issue loans according to the terms under this contract to debtor once debtor has
fulfilled the presupposition of loan and the guarantee of loan is
provided

     

    (2)
Creditor is entitled to review and investigate the operational and financial
status, including the assets status of debtor and to require debtor to provide
related documents and files

     

    (3) To
deduct the repayment of principal, interests, compounded interests and penalty
and expenses incurred due to the overdue of loan or impropriate usage of loan
from the accounts of debtor. Creditor is also entitled to require the deduction
of above from banks/financial institutions which debtor has accounts with, or to
demand repayment in advance in legal processing

     

    (4) If
debtor makes the repayment prior to the maturity of loan, debtor shall obtain
creditor’s written consent

     

    Article 6 If the debtor is not
able to make the repayment in full at the maturity date, it shall provide the
written request at least 15 days prior to the maturity date. The maturity date
could be extended only upon the approval by all creditor, debtor and guarantor
and the interest rate in the extension period shall be in compliance with
primary rate issued by Bank of China

     

    Article
7 BREACH OF CONTRACT

     

    
      	
              (1)  

            	
              Debtor’s
      breach of contract

            


    

     

    
      	
              1.  

            	
              Debtor
      is responsible for Interest charges on the overdue loan if the extension
      is not granted, which shall be calculated on the amount of overdue loan
      amount, 50% upward
      fluctuation of interest set force in this contract will be charged for
      amount of overdue loan.

            


    

     

    
      	
              2.  

            	
              Debtor
      is responsible for Interest charges on the impropriate usage of loan if
      the usage of loan is not approved by creditor, which shall be calculated
      on the amount of impropriate usage amount, 80% upward
      fluctuation of interest set force in this contract will be charged for
      amount of impropriate usage of
loan.

            


    

     

    
      	
              3.  

            	
              Debtor
      is to be fined for the penalty on overdue interest and the penalty rate is
      as overdue loan interest penalty

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              4.  

            	
              Creditor
      is entitled to stop issuance of loan or to demand pre-payment of loan if
      debtor breaches any terms under this
contract

            


    

     

    (2)  Creditor’s
breach of contract

     

    In the
circumstance that debtor has fulfilled the presuppositions of this contract and
has provided the required guarantee and creditor does not issue loans in divided
payment to debtor on time, creditor is to be fined  as
penalty.

     

    
      	
              (3)  

            	
              Mortgagor’s
      breach of contract

            


    

     

    The
mortgagor is to be claimed related responsibilities if he/she does not fulfill
its pledge responsibilities and mortgagor is to compensate the creditor for its
los

     

    Article 8 Creditor is entitled
to auction or liquidate the pledged assets if the debtor failed to make the
repayment in full at maturity date. If the consideration obtained from auction
or liquidation is not fully recover the loan, creditor is entitled the claim
rights till the debt is cleared in full

     

    Article 9 The pledge
registration is debtor’s responsibility and debtor is responsible for the
payment of appraisal fee, valuation fee, registration fee and insurance
fee.

     

    Article 10 If the collection
of debt is to be realized by the form of lawsuits or arbitration, debtor and
mortgagor is jointly responsible for the expenses incurred for the realization,
which including but not limited to attorney fee, travel expenses and other
expenses

     

    Article 11 Parties shall
consult to settle disputes arising from this contract at first instance. Where
consultation fails, the parties may choose to settle the dispute with suits at
local court of creditor’s domicile

     

    Article12
Supplementary terms

     

    Article 13 For any unsettled
issues in this contract, PRC law and regulations shall be referred
to

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Article 14 This contract is in
centuplicate, creditor, debtor and guarantor each holds one copy。 This contract
comes into effect only with the execution and corporate seal of all
parties

     

     

    Article
12 IMPORTANT NOTICE

     

     

    DEBTOR
AND MORTGAGOR HAVE REVIEWED AND UNDERSTOOD THE TERMS AS HEREINABOVE IN THIS
CONTRACT AND CERDITOR HAD BEEN EXPALINED FOR ALL THE QUESTIONS

    


     

    
      	DEBTOR     	CREDITOR	MORTGAGOR


    

                                                                          

     

     

    (Corporate
seal)

     

     

    (Execution
by legal representative/person in charge)

     

     

    Execution
date: January 17,2008