Unassociated Document


    
       

      EXHIBIT
10.17.4

       



     

      Commercial Bank of
Zhengzhou

     

     

     

    Loan
Agreement

     

     

    


     

     

    


     

     

    


     

     

     

     

     

     

    Borrower:
Henan Gerui Composite
Materials Co., Ltd.

     

     

    Lender:
Commodity World Branch
of Commercial Bank of Zhengzhou

     

     

    


     

     

    COMMERCIAL
BANK OF ZHENGZHOU

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Loan
Agreement*

     

     

    Number:
No. 071109310101 of Loan
of Commercial Bank of Zhengzhou

     

     

    Borrower
(Party A): Henan Gerui
Composite Materials Co., Ltd.

     

    
      
        
          	
                  Legal
      Representative: Mingwang
      Lu

                	
                  Position:
      Chairman

                


        

      

    

     

    Address:
No. 1 Xinzheng
Shuanghu Economic Development Zone

     

    
      
        
          	
                  Telephone:
      62566757   

                	
                  Postal
      Code: 451191

                


        

      

    

     

    Lender
(Party B): Commodity World Branch of Commercial Bank of Zhengzhou

     

    
      
        
          	
                  Responsible
      Person: Yunling
      Shi     

                	
                  Position:
      President

                


        

      

    

     

    Address:
Zhengbian Road, Front
Row 1 of Area C, Commodity World

     

    
      
        
          	
                  Telephone:
      66515120

                	
                  Postal
      Code: 450004

                


        

      

    

     

     

    In
pursuance to the application of Party A, in consideration of the rights and
obligations of both parties, through friendly consultations, Party A and Party B
hereby entered this Contract according to the relevant laws, regulations, and
rules of the State.  In consideration of the foregoing and the mutual
covenants and conditions contained herein, the parties hereto agree as
follows:

     

    Article I Loan Amount:
Renminbi Eight Million
Yuan.

     

    Article II Purpose of Loan:
working
capital.

     

    Article III Interest Rate of
Loan and Calculation Method: By mutual consensus, the executed monthly interest
rate for this Contract shall be 8.505‰.

     

    I. The
interest shall be calculated monthly from the day of release of the
loan.  The 20th of
every month shall be the day of collection of interest.  In case that
the time limit of the loan is less than one month, the interest shall be paid
along with the repayment of the principle.  Party A shall prepare
sufficient money in the settlement account before the 20th of
every month.  The account number is: 995620120101001478.

     

    II. From
the day of entry into force of this Contract, Party A voluntarily authorizes
Party B to collect the monthly interest that should be paid by Party A from the
aforementioned account.  The authorized action of collection of
interest by Party B shall be deemed as a voluntarily action of payment of
interest by Party A.  Party A will not issue additional authorization
document for collection of interest, and the terms of this article shall be
used.

     

    
      
        	
                *

              	
                This
      form of agreement is also used for the following loans and bank payable
      bills:

              


      

      
        	
                 
      

              	
                Loan
      in amount of RMB 10,000,000 valid from June 20, 2008 to June 20,
      2009

              


      

      
        	
                 
      

              	
                Loan
      in amount of RMB 20,000,000 valid from July 24, 2008 to June 5,
      2009

              


      

      
        	
                 
      

              	
                Loan
      in amount of RMB 4,000,000 valid from October 26, 2007 to October 25,
      2009

              
	 	Bill
      in amount of RMB 9,500,000 valid from October 15, 2008 to April 15,
      2009
	 	
                Bill
      in amount of RMB 9,000,000 valid from October 16, 2008 to April 16,
      2009

              


      

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    III.
During the execution period of this Contract, should the People’s Bank of China
make an upward adjustment of the prime interest rate, the executed interest rate
of the contract shall be adjusted accordingly, starting from the day of upward
adjustment.  The extent of the upward adjustment of the interest rate
stipulated under this Contract shall remain unchanged.  Should the
People’s Bank of China make a downward adjustment of the prime interest rate,
the executed interest rate of the contract shall remain unchanged.

     

    IV. Where
Party A makes early repayment of loan, Party B shall have the right to collect
interest of loan from Party A in accordance with the time limit and interest
rate stipulated under this Contract.  Should Party A receive approval
from Party B to make early repayment of loan, the interest may be calculated and
paid in accordance with the interest rate stipulated under this Contract and the
actual number of days.

     

    Article IV Time Limit of Loan:
From November 9,
2007 to November 8,
2008.

     

    I. The
actual date of release of the loan and the agreed date of repayment of the loan
shall be determined by the loan note (the repayment date of the loan note shall
not exceed the expiration date of this Contract).  The loan note shall
be an integral part of this Contract and shall have the same legal
force.  In case that a discrepancy exists between the time limit of
execution of the Contract and the loan note, Party A is obligated to promptly
notify the Mortgagors.

     

    II.
Within the time limit of the loan stipulated under this Contract, the use of the
loan by the Borrower may be divided into multiple periods and
amounts.  However, the actual balance of the loan shall not exceed the
loan amount stipulated under this Contract.

     

    Article V Source of Capitals
for Repayment and Repayment Method:

     

    I. Source
of Capitals for Repayment: sales
income

     

    II.
Repayment Method: one
lump sum (one lump sum, installments)

     

    Installments:

     

    (1)   Year   Month   Day, Amount:
  Ten
Thousand Yuan;

     

    (2)   Year   Month   Day, Amount:
  Ten
Thousand Yuan;

     

    (3)   Year   Month   Day, Amount:
  Ten
Thousand Yuan;

     

    (4)   Year   Month   Day, Amount:
  Ten
Thousand Yuan.

     

    Article VI Extension of
Loan

     

    In case
that Party A has legitimate reasons recognized by Party B to extend the time
limit of the loan, a written application shall be submitted to Party B at least
15 days before the time lime of the loan.  A written loan extension
agreement shall be signed after approval from Party B and the
Mortgagors.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Article VII Authorization of
Payment Deduction

     

    Within
the execution period of this Contract, should Party A fail to timely pay the
principle or interests or breach of contract have occurred, Party B shall have
the right to deduct the principle and interests of the loan from all the
accounts opened in the system of Commercial Bank of Zhengzhou.

     

    Article VIII Loan
Guarantee

     

    The
following mortgagors shall provide mortgage to Party B for Party A regarding the
loan in this Contract.

     

    
      
        
          	I. Mortgagor: Zhengzhou
      No. 2 Steel Co., Ltd. 	Mortgage Method: Mortgage of real
      estate and land


        

      

    

     

    
      
        
          
            	II. Mortgagor: Henan
      Jingfa Properties Co., Ltd. 	Mortgage Method: Guarantee of joint
      liability


          

        

      

       

    

    
      
        
          
            	III. Mortgagor:                                                          
      	Mortgage Method:                                                            
      


          

        

      

       

    

    
      
        
          
            	IV. Mortgagor:                                                         
        	Mortgage Method:                                                  
               
  


          

        

      

       

    

    Article IX Rights and
Obligations of Both Parties

     

    I. Rights
and Obligations of Party A

     

    (I) Party
A shall have the right to use the loan in accordance with the terms stipulated
under this Contract.

     

    (II)
Party A shall voluntarily accept the inspection by Party B regarding the state
of utilization of the loan under this Contract.

     

    (III)
Party A shall positively cooperate with Party B regarding the inspection of its
state related to production, operation, and financial matters and shall
truthfully provide all the related materials requested by Party B (including but
not limited to all the signed agreements and contracts, accounting vouchers, and
financial reports).  Moreover, Party A is obligated to timely submit
the monthly, semi-annual and the annual financial reports to Party B (including
but not limited to the duplicate copies of accounting reports and attachments
and financial fact sheets, such as balance sheets, income statement, statements
of profit distribution, cash-flow statements, tax return) and other materials
deemed necessary by Party B.

     

    (IV) From
the entry into force of this Contract to the final settlement of principle and
interests of the loan by Party A, should any of the followings have occurred
without written approval from Party B, the act shall be deemed as breach of
contract by Party A.  Party B shall have the right to prematurely
recover the unused loan, shall have the right to suspend any unreleased loan,
shall have the right to prematurely terminate the execution of this Contract,
and shall request Party A to repay the principle and interests in
advance.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1. Profit
distribution exceeding 10% of the net profit of that year by Party A or using
the balance from the previous fiscal year for profit distribution;

     

    2.
Capital expenditures of Party A exceed 20% of its net assets;

     

    3. The
assets listed under Attachment I have been sold, mortgaged, or exchanged by
Party A;

     

    4. Party
A fails to use the loan in accordance with the purpose stipulated under this
Contract;

     

    5. Party
A repays other debts in advance;

     

    6. Party
A changes the terms of the debts with other creditors;

     

    7. Party
A provides collateral to others for a third party;

     

    8. Party
A undergoes contractual operation, lease, restructuring, joint operation,
merger, joint venture, separation, or closure due to subjective
reasons;

     

    9. Party
A fails to fulfill the obligations stipulated under (II) and (III) of this
Paragraph;

     

    10. Party
A violates the provisions of the laws, regulations, and rules of the State
regarding utilization of loan;

     

    11. Party
A violates the terms of this Contract with failure of timely repayment of
principle and interests;

     

    12. Party
A has breach of contract with other financial institutions;

     

    13.
Others have lodge legal proceedings or arbitration against Party A with the
value of the subject matter of action exceeding 20% of the net assets of Party A
in the previous month;

     

    14. The
financial materials or other documentations (including but not limited to all
the materials provided by Party A to Party B prior to the entry of force of this
Contract) provided by Party A to Party B are false;

     

    (V) Where
others have filed bankruptcy against Party A or relevant authorities suspend the
business license or issue temporary suspension of operation, Party B shall have
the right to prematurely recover the unused loan, shall have the right to
suspend any unreleased loan, shall have the right to prematurely terminate the
execution of this Contract, and shall request Party A to repay the principle and
interests in advance.

     

    (VI)
Should any major event have occurred jeopardizing the normal operation of Party
A and producing unfavorable impact to Party A in fulfilling the obligation of
repaying the loan under this Contract, a written notice shall be timely
delivered to Party B.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (VII)
Where change in name, legal representative, or legal address of Party A has
occurred, a written notice shall be delivered to Party B ten days in
advance.

     

    (VIII)
Party A shall bear the related costs of this Contract, including but not limited
to costs, such as attorney, insurance, notarization, authentication, appraisal,
auditing, and registration.

     

    (IX)
Where Party B utilizes legal action to actualize creditor’s rights as result of
breach of contract by Party A, Party A shall bear all the costs incurred on
Party B (including but not limited to all costs for actualizing creditor’s
rights, such as legal fee, attorney fee, and traveling expenses)

     

    II.
Rights and Obligations of Party B

     

    (I) Party
B shall have the right requesting Party A to provide all the materials deemed
necessary by Party B.

     

    (II)
Party B shall have the right to deduct and collect the principle, interests,
compound interests, and penalty interests of the loan and all other payables
from the account of Party A.

     

    (III) In
case of breach of contract by Party A, Party B shall have the right to
prematurely recover the unused loan, shall have the right to suspend any
unreleased loan, shall have the right to prematurely terminate the execution of
this Contract, and recover the principle, interests, compound interests, and
penalty interests of the loan and all other payables.

     

    (IV)
Party B shall be obligated to timely release the loan in accordance with the
terms stipulated under this Contract.

     

    (V) All
the materials provided by Party A related to debts, financial affairs,
production, and operation of Party A shall be kept confidential by Party B,
excluding legal inquirers.

     

    Article X Breach of
Contract

     

    I. Within
the effective period of this Contract, in case that breach of contract has
occurred as result of Party A failing to timely pay the interests, the interests
shall be calculated according to compound interest starting on the 20th of
every month.

     

    II. In
case that the loan is overdue, Party A shall pay penalty interest to Party B
starting on the day of delayed payment of the principle and interests of the
loan.  The penalty interest rate shall be calculated according to the
executed interest rate of this Contract multiplying by one point five (executed
interest rate × 1.5).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    III.
Where Party A fails to use the loan provided by Party B in accordance with the
purpose stipulated under this Contract, the act shall be deemed as embezzlement
of loan.  Party A shall pay a penalty interest to Party B starting
from the day of embezzlement of loan.  The penalty interest rate shall
be calculated according to the executed interest rate of this Contract
multiplying by two (executed interest rate × 2).  Should Party B
discover that the time of embezzlement of loan by Party A is later than the
actual time of embezzlement by Party A, Party B shall deduct the interests
already paid by Party A upon calculation and collection of penalty
interests.

     

    IV. Where
the Contract states that the loan is to be paid back in installments, failure of
timely payment shall be deemed as delay of payment.

     

    V. Where
Party B fails to timely provide the loan, Party B shall pay a penalty to Party A
in accordance with the amount in breach and the number of days of
delay.  The amount of penalty shall be calculated in accordance with
the executed interest rate stipulated under this Contract.

     

    Article XI Settlement of
Dispute

     

    All
disputes in connection with this Contract of the execution thereof shall be
settled through friendly negotiations.  In case that no settlement can
be reached through negotiations, either party may submit the case for
prosecution at the local People’s Court of Party B.

     

    Article XII Effectiveness,
Modification or Termination of Contract

     

    I. This
Contract shall be established upon signing or affix of seal by the legal
representative or authorized representative of Party A and the legal
representative or responsible person or authorized representative of Party B and
shall come into force upon entry of force of the guarantee contract under this
Contract.

     

    II. No
Party shall arbitrarily change or terminate this Contract unless the incidence
permitted by this Contract to undergo change or termination of the Contract has
occurred or due to the provision of the “Contract Law of the People’s Republic
of China”.

     

    III.
Where one party requests change of this Contract, the other party shall be
promptly notified in writing, and a written modification agreement shall be
reached.

     

    Article XIII Through friendly
negotiations, Party A and Party B may reach a written agreement on matters not
discussed in this Contract, which shall become an attachment of this
Contract.  Any attachment to this Contract shall be an integral part
of this Contract and shall have the same legal force.

     

    Article XIV Party B shall hold
two original copies of this Contract with Party A and the Mortgagor holding one
original copy each.  Where the Contract has to be submitted to the
relevant authorities, the rules of the relevant authorities shall be executed
accordingly.  This Contract is made out in four original copies
upon signing.

     

    
      
        
        

      

      
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    Article XV This Contract is
signed at the location of Party B on November 9,
2007.

     

    [Special
Note] Party B has already asked Party A to carefully read all the articles of
this Contract and has provided detailed explanation on all the questions raised
by Party A regarding the articles of this Contract.  Party A has
already understood all the explanations made by Party B regarding the articles
of the contract and the explanations for the questions.  Both Party A
and Party B have no misunderstanding regarding the content of all the articles
stipulated under this Contract and this special note.

     

     

    
      
        
          
            
              
                
                  
                    	Party
      A (Official Seal):  	Party
      B (Official Seal):
	 	 
	
                            Legal
      Representative (Signature or Seal):

                          	
                            Responsible
      Person (Signature):

                          
	 	 
	
                            Authorized
      Representative (Signature):

                          	
                            Authorized
      Representative (Signature):

                          
	 	 
	
                            Handling
      Person (Signature):

                          	
                            Handling
      Person (Signature):

                          
	 	 
	
                            Telephone:
      62566757

                          


                  

                

              

            

          

        

      

    

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Attachment
I

     

     

    List of
Main Assets

     

    
      
        	
                Asset
      Name

              	
                Location

              	
                Quantity

              	
                Purchasing
      Price (10K Yuan)

              	
                Depreciation
      (%)

              	
                Years
      Used

              	
                Current
      Value

              	
                Ownership
      Certificate Number

              	
                Ownership

              	
                Mortgage
      Situation & Mortgagee

              	
                Remark

              
	
                Building

              	
                No.
      1 Xinzheng Shuanghu Economic Development Zone

              	
                4

              	
                629

              	 
      	 
      	
                455

              	 
      	
                Henan
      Gerui Composite Materials Co., Ltd.

              	 
      	 
      
	
                Automobile

              	
                No.
      1 Xinzheng Shuanghu Economic Development Zone

              	
                14

              	
                340

              	 
      	 
      	
                104

              	 
      	
                Henan
      Gerui Composite Materials Co., Ltd.

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      


      

    

     

    Note: The
aforementioned assets mainly include valuable assets that are easily noticeable
with clear ownership, such as transportation vehicles, machinery and equipment,
buildings, and lands.

     

    
      
        
          
            
              
                
                  
                    
                      	Party
      A (Official Seal):  	Party
      B (Official Seal):
	 


                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        8