Document:

f10q0612ex10x_keyuanpetro.htm

Exhibit 10.10

 

[TRANSLATION COPY]

 

“Daifuda” Business Contract

 

No: 2012 Beilun Branch “Daifuda” 050

Party A (Applicant): Ningbo Keyuan Plastics Co., Ltd

Business License No: 330200400023187

Legal Representative; Chunfeng Tao

Address: Qingchi Beilun Ningbo      Postal Code: 315803

Opening Financial Institution and Account No: Bank of China Beilun Branch, 361058330713

Tel: 0574-86232932     Fax: 0574-86232618

Party B: Bank of China, Inc Beilun Branch

Legal Representative: Shuguang Sun

Address: No 588, Hua Shan Road, Beilun District, Ningbo  Postal code: 315800

TEL: 0574-86869916          Fax: 0574-86895311

The two parties entered into this contract in accordance with the laws and regulations. This contract is a single agreement under < General Agreement on Credit Business>.

 

Article1. Definition of “Daifuda”

	
1.

	
“Daifuda” means: Based on Party A’s application, Party B provides the short-term financing with its overseas branch or through inter-bank borrowing in domestic and international markets (hereinafter refer to as “Paying Bank”) for Party A’s account payable under the imported products or trade service. Party A shall pay off all the above mentioned financing including interests, commissions, fees and default interests within the time limits.

	
2.

	
The scope for import settlement account includes: Letter of Credit, collection, remittance (including prepayment, cash on delivery and trade service etc), all above mentioned settlements should be conducted in accordance with international practice and all signed contacts and agreements between Party A and Party B.

Article 2.  Preconditions

“Daifuda” business shall meet following conditions:

 

	
1.

	
This contract has already been effective;

 

  

1

  

 

	
2.

	
Party A obligates and signs the related documents, receipts, seal, related person’s name lists and samples of signatures for party B, and also fills in relevant certificates;

	
3.

	
Party A opens the required account to fulfill this contract;

	
4.

	
Party A arranges the required legal and administrative approval process to facilitate the business properly, and submits the duplicate copy of the approval documents or the copies of the original documents as requested by Party B;

	
5.

	
The guarantee on the provision of this contract has been effectively established;

	
6.

	
Other conditions requested by Party B.

 

Article 3. Related to Import Trade (Notes: complete with factual information.)

√Letter of Credit

Letter of Credit No.: LC1901312000160/AB1901312000245

Name of Bank Issuing Document: OVERSEA-CHIAESE BANKING CORPORATI OCBC, SINGAPORE

No. of Issued Document: NG 5TF21100391

Receipt amount: USD9,283,900.50

Collection

Invoice No.: /           Entrusted bank’s name: /

Issuing documents No.: /  Receipt amount: /

Remittance

TT:/      Receiver:/

Amount:/

Article 4. Financing Currency and Amount

Financing Currency: US dollar

Financing Amount (Spell-Out): Nine Million Two hundred and Eighty-Three Thousand Seven hundred and Seventy-Six point Six Seven.

(Numeric): USD9,283,876,67

Article 5. Financing Term

The term is / months/88 days.

√No grace period.

Plus ......days of grace period, since the date of starting financing foreign payment

 

  

2

  

 

If sale price of the imported products has been collected before the closing of the financing, Party B has the right to consider the final collection date as the closing date of the financing. Party A agrees to use the payment for sale of imported products it receives to repay Party A of the financing amount.

Article 6.  Interest Rate and Interest Settlement (Notes: complete with factual information.)

	
1.

	
Interest rate (annual interest rate)

	
  

	
(1)

	
Financing in RMB: fixed interest rate, and annual interest rate is / %;

	
  

	
(2)

	
Financing in foreign currency:

	
  

	
A.

	
Fixed interest rate, and annual interest rate is / %;

	
  

	
B.

	
Loan interest rate in the floating period within  / months / years since the financing date published by the Bank of China, Inc.

	
  

	
C.

	
Benchmark of LIBOR/HIBOR + 140 for the 3 months fixed by paying bank on financing date.

	
2.

	
Calculation of interest

Interest is calculated according to the actual payment amount and days since the date of Party B made payment.

Calculation formula: Interest=Principal*Days*Daily interest rate.

Basis for calculating daily interest rate is of 360 days, the reduction formula is: daily interest rate=annual interest rate/360.

	
3.

	
Method of interest settlement

Interest settlement is according to the following _third_ way:

	
(1)

	
Settlement with quarter, 20th of each last month per quarter as the interest settlement day, and the 21st as the payment day.

	
(2)

	
Settlement with month, 20th of each month as the interest settlement day, and the 21st as the interest payment day.

	
(3)

	
Same as expiration date of principal.

	
(4)

	
Receive the interest in advance and settle when expiration date.

On the condition that the final payment day of the financing principal is not the same date of interest payment day, then the final payment day is considered as interest payment day and Party A shall pay off the entire interest.

 

  

3

  

 

	
4.

	
Default interest

	
  

	
(1)

	
If Party A fails to return the principal amount of financing within the agreed term, as for the overdue payment, the default interest shall begin accruing according to the default interest rate starting from the date of late payment until both the principal and interest are paid off.

	
  

	
(2)

	
If Party A fails to pay the interest and default interest in time, it can be penalized with compound interest per month/per quarter according to agreed default interest in this contract.

	
  

	
(3)

	
Default interest rate

A. Default interest rate is a floating rate, the floating period is  / month/ /year. In every floating period, the default interest shall be re-priced on the default date. The re-pricing date is the corresponding date in the month of the default date. If there is no corresponding date in the same month, then the last date of the month is the re-pricing date.

 

B. Default interest rate equals to the benchmark interest rate in the item C below plus 20%.

C. In the first floating period, the benchmark interest rate is the financing interest rate item 1 of this Article. After each full floating period, the benchmark interest rate shall be calculated as below:

Financing in RMB, it floats upward/ floats downward according to the same level loan benchmark interest rate issued by the People’s Bank of China in the re-pricing day.

Financing with foreign currency,

It is the loan interest rate within the same floating period of / years of the re-pricing day implemented by Bank of China, Inc.

Based on the re-pricing day of paying bank’s LIBOR plus 160 base point .

Article 7.  Fees

Party B provides the following services to Party A under this contract:

 

	
1.

	
Arrangement of paying for another financing

Party A pays Party B the expense of financing under the contract: USD 42,115.38. Party A authorizes Party B to withdraw directly from Party A’s account: Account No. 361058330713

 

	
2. 

	

Telegraph expenses of Party B and paying bank: USD 23.83

 

√Party A pay for it            Receiver pay for it

 

  

4

  

 

Article 8. Other Rights and Obligations of the Parties

Party B has the right to handle the full set of documents/goods under the “Daifuda” business or other guarantee right/ property right pursuant to applicable laws and regulations. If according to applicable laws and regulations or the verdict of the courts and arbitral authorities, the right to handle the full set of documents/goods under the “Daifuda” business belongs to Party A, then Party A agrees to transfer this right to party B unconditionally to the maximum extent allowed by applicable law and regulations and accept performance and non-performance of Party B to handle the documents/goods. If according to applicable laws and regulations or the verdict of the courts and arbitral authorities, the right to handle the full set of documents/goods under the “Daifuda” business belongs to Party B, then Party B retains this right till Party A completely pays off the financing.

When Party A requests to hold receipts/goods, and repays the financing with sales income, Party A is only acting as Party B’s consignee, including but not limited to safekeeping relevant receipts, handling storage, transportation and other related matters under those receipts, and maintain sales fund or deposit it to specific account of Party B. Party A shall disclose this role when selling the goods to a third party.

Party A shall be responsible for all the fees (including but not limited to insurance, storage, transport and wharf) during period when Party A retains the goods. Party A promises to insure the goods according to the market price of the goods, indicate Party B as the insured and provide the insurance documents to Party B. Party B has the right to clam directly when insured cargo endures loss.

Without the permission of Party B, party A is not allowed to delay payment or handle the goods through any non-currency method or at a price lower than the market price. Party A is not allowed to mortgage or pledge, or make the goods to be bound by any other liens. Once requested by Party B, Party A shall submit the details of the goods’ accounts, any sales revenue or relevant sales contracts to party B; Party B has the right to enter into the warehouse to review the actual situations of the goods, or repossess these goods.

Article 9. Guarantee (Notes: complete with factual information.)

The guarantee methods of liability under this contract:

√ Ningbo Kewei Fuels Co., Ltd provides joint liability guarantee, ... , and sign corresponding guarantee contract.

√ Ningbo Keyuan Plastics Co., Ltd provides margin pledge:

In case the pledgor is a third party, Party B and the pledgor shall enter into additional margin pledge contract.

 

  

5

  

 

√ This contract is the main contract of < General Agreement of Margin Pledge>, and the agreement provides margin pledge and submit corresponding <Certification of Margin Pledge> or handle directly as following ways rather submit <Certification of Margin Pledge>:

 

	
1)

	
Margin Amount: (Currency) RMB ; (Spell-Out) Six Million;

(Numeric) 6,000,000.

	
2)

	
Party A pay for above margin with following method:

Within   /   banking days since the effective date of this contract, Party A will deposit or load margin to the margin account opened in Party B with     .

√ Entrusted Party B to load the margin to the margin account opened in Party B from the RMB account in Party B.

Party A’s guarantee liability of margin under   business has been removed, and Party A authorized Party B to load the margin to margin account opened in Party B directly from  account.

Others:  

	
3)

	
In case above guarantee liability of margin has been removed by Party B, Party B shall return according to following methods:

Return to the Party A’s account.

Return according to the deposit route.

Return according to the written instruction of Party A.

Others:                               .

If Party B believes that Party A or guarantee occurred matters potentially affect the contractual capacity, or guarantee contract becomes invalid, terminated or cancelled, or financial conditions of Party A or guarantor gets worse or they enter into major litigation or arbitration, or any other factors that may affect their ability to perform their contractual obligations, or the value of guaranty gets worse or lost due to devaluation, destruction, losses, or being closed down, Party B has the right to demand and Party A has the obligation to provide new guarantee, replace the guarantor to bear the liability under this contract.

Article 10.  Party A’s Statements and Commitment

Statements as follows:

	
1.

	
Party A registers and survives by law, and possess the complete capacity of civil rights needed to fulfill this contract;

	
2.

	
Party A signs and fulfills this contract based on true intention, has obtained the legal and effective authority according to the requirements of the Articles of Incorporation or other internal management documents, and is not allowed to violate any binding agreement, contract and other legal documents; Party A has gained or will gain all the relevant approvals, permits, files or registers.

 

  

6

  

 

	
3.

	
All the documents and certificates provided by party A to Party B is authentic, complete, accurate and effective under this contract;

	
4.

	
The trading background described by party A to party B is authentic and legal, and does not have the illegal purpose such as money laundering. Party A providing any documents according to party B’s requirements does not mean that party B has the obligations and responsibilities of inspection towards the authenticity and legality of party A’s trade;

	
5.

	
Party A will not hide any truths that may influence both parties’ financial situation and contractual capacity.

Commitments as follows:

	
  

	
1.

	
Provide the statement of products sales regarding the import items in timely manner according to Party B’s requirement.

	
  

	
2.

	
If Party A has already signed or will sign counter-guarantee agreement or other similar agreements about the guaranteed obligations with the guarantor of this contract, then the agreement will not damage any rights owned by party B under this contract;

	
  

	
3.

	
If the products sales of the import items have serious difficulties, or situations that may influence both parties’ financial conditions and capacity to fulfill this contract, including but not limited to the change of any business pattern of dismantlement, merger, affiliation, joint venture with foreign merchants, cooperation, contractual operation, reorganization, reformation and listing program, reduction of registered capital, assignment of significant property or stock right, commitment of significant liabilities, or installation of new significant liabilities on the pledge, or involvement to grave litigation or arbitration cases, party A shall inform party B in time;

	
  

	
4.

	
Party A agrees that Party B has the right to provide related business documents to paying bank in order to continues to do business.

	
  

	
5.

	
As for pending matters, Party A agrees to handle according to the international conventions and agreement with Party B.

Article11. Disclosure of Related Parties of Party A and Related Transactions

The __first _ item below is applicable to both parties:

	
1.

	
Party A does not belong to the group client of party B according to the Management Guidance of Credit Extension Business Risk of Commercial Bank Group (“Guidance”).

 

  

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2.

	
Party A belongs to the group client of party B according to Guidance. Party A shall report the situation of related transactions over 10% net assets in time, including the related relationship, trading projects, trading properties, trading amount, corresponding proportion and pricing policy and so on (including the trade with no capital but only proportion capital).

 

Article 12. Default Events

Party A will be considered in violation of this contract if one of the following events happens:

	
1.

	
Party A fails to fulfill its obligations to pay and repay to the party B according to this contract;

	
2.

	
The statements made by party A is untrue or default the commitments under this contract;

	
3.

	
The matters mentioned in No.3 of Item 2 in Article 9 happen; Party B considered those may affect the financial conditions and contractual capability of Party A or guarantor, and Party A has not provided new guarantee, replaced guarantor in accordance with the provisions of this contract.

	
4.

	
Party A closes down or is subject to disincorporation, revocation or bankrupt.

	
5.

	
Party A defaults other covenants in this contract;

	
6.

	
Party A default the other contracts signed with Party B or other institutions of Bank of China, Inc.

	
7.

	
Guarantor defaults the covenants of guarantee contract, or other contracts signed with Party B or other institutions of Bank of China, Inc.

When any of the above mentioned events occur, Party B has the right to take one or some following actions:

	
1.

	
Request Party A and/or guarantor to amend the default behaviors within limited time;

 

	
2.

	
Entirely or partly suspend or terminate Party A’s business applications under this contract or the other contracts, entirely or partly suspend or terminated to grant and handle the un-granted loans, holding trading financing;

	
3.

	
Announce the unpaid loans/financing principals and interests and the other account payables to entirely or partly expire.

	
4.

	
Terminate or revoke this contract, entirely or partly terminate or revoke the other contracts between Party A and Party B;

 

  

8

  

	
5.

	
Request Party B to compensate the liquidated damages;

	
6.

	
Deduct funds from Party A’s account to repay entirely or partly liability under this contract.

 

The undue funds in this account will be considered due in advance. If the account currency is different from the business currency of Party B, convert according to the applicable rate of Party B.

	
7.

	
Execute real guarantee;

	
8.

	
Request guarantor to bear guarantee liability;

	
9.

	
Other measures considered necessary by Party B.

Article 13. Reservation of the Rights

If one party fails to fulfill entire or part rights under this contract or request the other party to fulfill, undertake entire or part obligations, responsibilities, it shall not be considered to waive the obligations or responsibilities.

Any party’s tolerance or extension or delay execution of the rights under this contract towards another party shall not affect the rights under this contact and laws and regulations, also not considered to waive the rights.

Article 14. Amendment, Modification and Termination

This contract can be amended or modified in writing  mutual agreement. Any amendments or modifications are inseparable parts of this contract.

Unless otherwise specified by laws or regulations or covenants, this contract is not allowed to terminate till the rights and obligations are completely executed.

Unless otherwise specified by laws or regulations or covenants, invalidation of any items under this contract will never affect the other items’ legal effectiveness.

Article 15. Applicable Laws and Settlement

 

This contract shall be governed by the laws of PRC.

After this contract becomes effective, all disputes concerning this contract should be settled through friendly negotiation. When negotiation fails, any party can settle with following second method;

	
1.

	
Submit to ___________________Arbitration Committee to arbitrate.

	
2.

	
Submit to the People’s court located in the domicile of Party B or other corresponding institutions of Bank of China, Inc.

 

  

9

  

 

	
3.

	
Prosecute the People's Courts with jurisdiction.

During the settlement period, if this dispute does not affect the performance of this other items, the other items shall continue to performance,

 

Article 16. Attachment

The following attachments and other attachments ensured by both parties makes up the inseparable parts of this contract, and possess the equal legal validity.

1,__________/_______;

2,__________/_______;

......

Article 17.  Other Covenants

	
1.

	
Without Party B’s written consent, Party A is not allowed to transfer rights or obligations to the third parties.

	
2.

	
If Party B entrusts any other institutes of Bank of China to execute the rights and obligations under this contract, Party A shall agree. Party B or its designees are entitled to exercise all the rights under this agreement and to file a lawsuit in the People's Courts or submit to the Arbitration Committee to arbitrate.

	
3.

	
In case of not affecting the other covenants of this contract, this contract has the legal binding to the heirs and transferees.

	
4.

	
Apart from the other covenants, the address specified in this contract by both parties is regarded as the contract address, and also promise that when the contract address changes, then information will sent to the party in written form in time.

	
5.

	
The titles and business names in this contract are just used for the purpose of convenience, and can’t be used for the purpose to explain the clause content, and obligations and rights of the party.

	
6.

	
Per the changes of laws and regulations or regulatory process or the requirements of regulatory authority, Party B is unable to execute this agreement or execute according to covenants, Party B has the right to terminate or amend this agreement or single agreement according to the changes of laws and regulations or regulatory process or the requirements of regulatory authority and exemption from liability.

  

10

  

 

Article 18.  Conditions for effectiveness

This contract becomes effective upon the signature and seal of the legal representatives of both parties, principals or the authorized persons.

This contract is made in duplicates, each party has one copy, both having the same legal effects.

 

	Party A: Ningbo Keyuan Plastic Co., Ltd 	Party B: Bank of China, Inc Beilun Branch
	 	 
	The authorized person:	The authorized person:
	 	 
	May 2, 2012  	May 2, 2012  

 

 

11f10q0612ex10xi_keyuanpetro.htm

Exhibit 10.11

 

[TRANSLATION COPY]

 

Trading financing 008

 

Trust Receipt Loan Contract

Contract No: G1225-2012-015

Party A: Ningbo Keyuan Plastics Co., Ltd

Address: Qingzhi      Postal code: 315801

Legal representative: Chunfeng Tao

Tel: 86232932

 

Party B (Lender ): China Construction Bank, Beilun Branch

Address: No 51 Xinda road            postal code: 315801

Principals: Jiangen Han

Fax: 86882152             Tel: 86884361

Since the Letter of Credit (“L/C” or “LC”) / Telegraphic Transfer (“T/T” or “TT”) / documents under import collection will arrive (has arrived), Party A applied for trust receipt loan and Party B has already accepted the application.

WHEREAS:

The undersigned parties agreed to sign this contract after mutual agreement.

 

Article 1. Trust Receipt Loan

 

	
1.  

	
Trust Receipt Loan under this contract means the short term financing provide by Party B per Party A’s request when the expiration date of LC/TT/ documents under import collection to be used for payment.

Information of L/C

L/C No.:83009010006607

Amount of L/C (Spell-Out):USD Fourteen Million Seven hundred and Forty-Nine Thousand Two Hundred and Eighty-One point Six

Invoice/Bills (Spell-Out):USD Fourteen Million Seven hundred and Forty-Nine Thousand Two Hundred and Eighty-One point Six

Information of Inward Collection

Inward Collection No.:/

Invoice/Bills (Spell-Out):/

 

  

1

  

Information of Import COD

Import Contract No.:/

Invoice/Bills(Spell-Out):/

Invoice No:/

	
2.  

	
Trust Receipt Loan Amount(Currency, Spell-Out): USD Fourteen Million Seven hundred and Fifty Thousand.

	
3.  

	
Term: 4 days, from June 28, 2012 to July 2, 2012.

Article 2.  Interest Rate and Interest Calculation and Interest Settlement

	
1.  

	
Interest rate under this contract is annual interest rate, being the following Item 1:

	
1)

	
The loan interest under this contract is fixed interest rate, which is 2.9961%, the interest rate remains unchanged within loan term

 

	

2)

	
The loan interest under this contract is floating interest rate, which is LIBOR +interest margin /, floating once per month.

	
2.  

	
The loan interest is started to be calculated from the date of payment by Party B, which date is also value date. The loan interest is accounted by date. Daily interest of the loan calculates with 365 days if the currency is HK dollar and UK pound, while the other currencies shall be calculated by 360. The first day of the term is included in the interest period but exclude the last day.

	
3.  

	
Interest settlement

	
    1)  

	
With fixed interest, the interest rate shall be calculated according to agreed fixed rate. With floating interest, the interest rate shall be calculated according to the interest rate in the floating term. If the floating interest rate term is shorter than settlement term, the floating interest will be calculated first, settlement date plus interest in each period to calculate the loan interest.

	
    2)  

	
Settlement method applies for the following second one :

	
a.     

	
Settlement by/(month/quarter/half year), settlement date shall be the corresponding date of value date, if there is no corresponding date, the last shall be done.

	
b.     

	
Loan is cleared with payment of both principal and interests on the due date of the loan.

	
c.     

	
                                                                 

 

  

2

  

 

Article 3.  Preconditions for Party B to Grant Loan

Unless Party B waives all or any of the following, Party B will be obligated to grant loan when all of the following preconditions are met.

	
1.  

	
Party A has already complete related legal procedures like approval, registration, insurance and so on required by law;

	
2.  

	
Party A has already submitted all the files required by Party B;

	
3.  

	
Party A has already submitted the trust receipt required by Party B;

	
4.  

	
All requested guarantee becomes and remains effective;

	
5.  

	
Party A does not breach any covenants under this contract;

	
6.  

	
Others

Article 4. Repayment

	
1.  

	
Repayment principle

 

Payments Party A receives for products relating to L/C/inward collection/import COD under this contract shall be used for repaying Party B’s trust receipt, and shall repay the outstanding amount with other capital.

	
2.  

	
Interest payment

 

Patty A shall pay the due interest to Party B in settlement date. The first interest payment date is the first settlement date and the loan shall be cleared with the payment of both interests and principal.

 

	
3.  

	
Repayment method

	
    1)  

	
Party A shall pay off the loan principal and interest at the same time when the loan is due.

	
     2)  

	
Party A shall prepare sufficient capital in the account opened with Party B before payment due day (Party B is also entitled to deduct the money from Party A’s account for payment), or transfer the capital from other account on the payment due day.

	
4.  

	
Repayment in advance

Party A has the right to repay in advance.

When repay in advance, Party A shall calculate the interest according to the actual number of days the loan and interest rate stipulated in this contract. After the prepayment, the unpaid balance shall be still subject to the terms and conditions under this contract.

 

  

3

  

Article 5.  The Rights and Obligations

	
1.  

	
Party A has the right to request Party B to grant loan according to the provisions of this contract.

 

	
2.  

	
Party B should keep Party A’s the commercial secret confidential, unless otherwise required by laws and regulations, demanded by the authority, or according to other agreements between the parties.

	
3.  

	
All settlement of RMB and foreign currency under this contract shall be conducted in Party A’s account opened with Party B.

	
4.  

	
Party B takes the ownership of the documents and products when Party A issued loan receipt or Party B paid (whichever happens first).

	
5.  

	
After Party A issued the trust receipt to Party B, Party B shall hand over all the documents to Party A.

	
6.  

	
Being the trustor and beneficiary, Party B has the beneficial right to Party A’s entrusted property.

	
7.  

	
Being the trustee, Party A shall unload, store, produce, process, transport and sell under the documents and products involving L/C/inward collection/import COD for the interest of Party B.

 

The sales price received by Party A shall be used to repay the loan. The remaining balance of the loan shall be paid with other capital.

 

	
8.  

	
Party A shall undertake all fees incurred by products or handling products.

	
9.  

	
Party B has the right to collect the payment from buyers regarding sales products involving L/C/inward collection/import COD and does not need to inform Party A in advance.

	
10.  

	
 If Party B has special requirements, Party A will handle the products according to the requirements.

	
11.  

	
All relevant documents, products and rights (including but not limited to the unsold products, and the claims to buyers due to products sales, the payment due to products sales and insurance compensation) under this contract are Party B’s trust property, and independent from Party A. When Party A entered into dissolution, revocation and bankruptcy, or the creditors of Party A claim rights to the trust assets, it is the obligation for Party A to declare to the court or third Party that the trust assets does not belong to Party A’s liquidation assets or owned assets, or Party A’ s bankrupt assets. Claims Party A obtains due to managing and handling the documents and products is not allowed to offset the liability under the owned assets.

 

  

4

  

 

	
12.  

	
Before paying off the trust receipt loan principal, interest and expense, Party A can not pledge the documents or the products to other third parties, or make the goods must subject to any restriction of lien.

	
13.  

	
If Party B so requests, Party A shall provide any requested documents or store goods as instructed, and use Party B letterhead to create warehouse receipt.

	
14.  

	
If Party B so requests, Party A shall take related insurance from good credit insurance company with equal value to L/C/inward collection/import COD, and hold as the trustee of Party B and provide Party B with the insurance policy or insurance agreement which Party B is beneficiary or endorsing Party B as beneficiary per Party B’s request. Party A will be responsible for all the expenses related to insurance. If any claims occur, Party A shall inform Party B immediately and hand over the insurance compensation to Party B upon receipt.

	
15.  

	
Party B is entitled to decide and inspect the transportation methods, storage location and method and insurance. Party A shall provide all the convenient access to allow Party B to get into Party A’s location or warehouse, and sign all the documents for Party B’s collection and claims.

	
16.  

	
Party B is entitled to inspect the payment collection of the products under L/C/inward collection/import COD and Party A shall inform Party B in writing when required by Party B.

	
17.  

	
If Party A changed its legal representative, address, or business location, registered capital and article of incorporation, it shall inform Party B within .....working days after occurrence.

	
18.  

	
Party A shall not sign any contracts with third parties that may be detrimental to Party B’s rights under this contract.

	
19.  

	
Party B can revoke the trust any time. Upon request by Party B, Party A shall return to all the property certificate, documents and the products o Party B.

	
20.  

	
If Party A fails to handle the trust property per Party B’s request, Party B is entitled to terminate the trust relationship, take back the trust property and handle as it sees fit.

	
21.  

	
If there are any disputes or frauds under the main contract concerning L/C/inward collection/import COD, whatever settled or not, Party A shall pay loan principal and interest and related expenses under this contract to Party B.

  

5

  

 

	
22.  

	
Party A cannot use the related party transaction to avoid the liability to Party B; cannot use the false contract with related parties, bill receivable without practical business background, account receivable to discount or pledge in bank for cash or credit granting.

	
23.  

	
If the Party A is a group client, it shall give Party B a timely notice for related transaction involving over 10% net assets, including: 1) the relationship with each party in the transaction, 2) project and transaction nature; 3) the money amount and related proportion; 4) the pricing policy (including symbolic transaction without monetary amount).

Article 6.  Liability of Default

	
1.  

	
Party A’s defaults and the conditions may adversely affect Party B’s claims:

	
   1)

	
Party A breaches any covenants under this contract or explicitly expresses not to perform one of the covenants;

	
   2)

	
If any following conditions occur that make Party B believe may affect its claims:  Party A takes contract, trusteeship, lease, shareholding reforming, investment, joint operation, M & A, purchase and reorganization, separation, joint venture, apply for closing down, apply for dismissing, being revoked, being applied for bankruptcy, shareholder change or major assets transfer, stop production, closing down, and charged by local authority, cancelling it registration, suspend its license, involved in great legal dispute, great difficulties in production or finance, legal representative can not perform its duty, Party A does not perform its obligation for due debt (including the debt of Party A to Party B, or to other departments in Chinese Construction Bank), transfer its capital for free or in low price, reduce third Party’s liability or provide guarantee for third Party, neglect to perform its claims  or other rights, Party A’s shareholder to use its independent position to avoid liability, or Party A fails to provide certification to prove its property separate with shareholder’s property, the guarantee under the contract is false, ineffective, invalid, being revoked, or being dismissed, the guarantor default the contract or express he will not continue the guarantee by his actions, or the guarantor lose its guarantee capacity partially or wholly, and the value of warranty is being reduced, or the other conditions may endanger Party B’s claims.

	
    3)

	
If any one of above mentioned situation arises, Party B has the right to take one or any actions below:

	
A.    

	
Announce that the loan is due immediately, and request Party A to repay entire due and undue principal, interest and expense.

	
B.     

	
If Party A fails to pay the interest in time within the term, it shall pay compound interest pursuant to relevant terms under this agreement.

  

6

  

 

When the loan is overdue, from the overdue date to the date of paying off all principal and interest, the unpaid principal and interest (including the principal and interest which Party B to declare acceleration of maturity) shall be calculated based on agreed settlement with default loan interest; if the agreed principal and interest shall be paid off simultaneously when due, the unpaid principal and interest (including the principal and interest which Party B to declare acceleration of maturity) shall be calculated based on agreed settlement with default loan interest. The default loan interest 4.9961%.

 

The overdue loan means Party A fails to pay off the loans on time.

	
C.     

	
Dispose the documents and products regarding L/C/inward collection/import COD.

	
D.     

	
Request Party A to provide guarantee

	
E.     

	
Exercise the guarantee right.

	
F.     

	
 Other remedies allowed by law.

Article 7.  Others

	
1.  

	
Fees

Unless otherwise agreed, Party A shall be responsible for all fees related to legal counsel, insurance, evaluation, registration, appraisal and notarization under this contract.

Party A shall be responsible for all fees (including but not limited legal cost, arbitration fee, property protection fee, travel expense, execution fee, evaluation fee, auction fee, delivery fee, announcement fee, lawyer fee and etc) that Party B incurs in order to pursue its claims.

	
2.  

	
Collection of account receivable

For all the account receivable under this contract, Party B is entitled to deduct the money or foreign currency directly from Party A’s account in Chinese Construction Bank without informing Party A in advance. If the settlement of exchange and purchasing foreign currency is required, it is Party A’s obligation to assist Party B and take care exchange rate risk.

	
3.  

	
The usage of Party A’s information

Party A agrees that Party B may check Party A’s credit status form People’s Bank of China or the credit data base approve by Credit Department or other departments, and also agrees that Party B may provide information to People’s Bank of China or the credit data base approve by Credit Department. Party A also agrees that Party B may use and disclose Party A’s information if it is necessary to carry out business.

 

  

7

  

	
4.  

	
Announcement collection

Party B has the right to inform related department for the default of Party A, and do announcement collection through press.

	
5.  

	
The effectiveness of Party B’s record

Unless there are reasonable, definite contrary evidences, all the Party B’s internal records for principal, interest and expense and repayment records, the documents and evidences related to Party A to withdrawal money, repayment, and interest payment, and record for Party B’s announcement of collection, are all regarded as the efficient evidences to prove the relationship between Party A and Party B.  Party A can not object due to the fact that the records and documents are prepared by Party B.

	
6.  

	
Reservation of power

Party B’s right under this contract will never affect and exclude his rights under the law and other contracts. Any tolerant, grace, privilege or delay to execute any rights for the default behavior and delay behavior shall not be considered as waive of rights and interests or accept the default behavior, and also does not bind or prevent Party B from continuing to execute the rights, and also will not result in Party B undertaking obligation and responsibility to Party A.

	
7.  

	
If Party A owes other due liability to Party B apart from the liabilities under this contract, Party B is entitled to deduct money from Party A’s account in Chinese Construction Bank system for RMB and foreign currency to pay off the liabilities, and Party A shall not object.

	
8.  

	
Party A shall make an immediate notice to Party B for any changes of address in writing. If failure to provide notice results in any losses, Party A be responsible for the losses.

	
9.  

	
The construction of this contract shall be subject to the purpose of this contract, sentences used, relevant clauses, trading custom, international practice, and the principle of good faith and honesty.

	
10.  

	
Trust receipt loan applications and other documents are parts of this contract.

	
11.  

	
Settlement

  

8

  

 

All disputes concerning this contract should be settled through friendly negotiation; when the negotiation fails, shall settle with following  method:

 

	
1)     

	
Proceed to the local People's Court

 

	
2)     

	
Submit to arbitration committee.

 

During the dispute, the parties shall continue to perform the terms which are not affected by the dispute.

 

	
12.  

	
Effect of this contract

This contract becomes effective upon the signature and seal of the legal representatives of both parties, principals or the authorized persons.

	
13.  

	
This contract is made in two duplicates.

	
14.  

	
Other covenants

                        /                     

 

Article 8. Statements

	
1.  

	
Party A is aware of Party B’s operation scope and authority limit.

	
2.  

	
Party A has read all the clauses of this contract. At Party A’s request, Party B has made sufficient explanation for this contact. Party A fully understands the contract and is aware of the legal consequence.

	
3.  

	
Party A’s signing and execution of this contract complies with all the national laws and regulations, as well as Party A’s internal constitution and internal organization files. Party A has already obtained approval authority within the company or from national organization to enter into this contract.

	
4.  

	
Party A states that at the time of executing the contract there is no violation of any laws and regulations related to environmental protection, energy conservation and emission reduction; and promises to comply with those laws and regulations throughout the term of this contract. If Party A’s above statement is false or it fails to perform, or there is potential risk of waste of energy and pollution from the part of Party A, Party B has the right to stop granting credit to Party A (include but not limited to refuse loaning, financing, issuing L/G, LC), or announce the claims (principal and interest) is acceleration of maturity (include but not limited to loan, financing, money paid in advance or to be paid actually) , or using other reliefs allowed by this contract or laws.

 

Party A(Stamp)

Legal Representative/ Authorized person

2012-6-28

 

Party B (Stamp)

Legal Representative/ Authorized person

2012-6-28

 

 

10

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